TCR_Public/020927.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Friday, September 27, 2002, Vol. 6, No. 192    

                          Headlines

ACOUSTISEAL: Court Okays Bryan Cave as Debtor's Ch. 11 Attorneys
ADELPHIA COMMS: Committee Taps Neilson for Accounting Services
AMERCO: Moody's Cuts Rating on Senior Unsecured Notes to Ba2
AMR CORP: Blaylock Initiates Coverage with "Hold" Ratings
AT&T CANADA: Takes Steps to Establish Viable Capital Structure

BANYAN STRATEGIC: Extends Northlake Closing Date to September 30
BETHLEHEM STEEL: Proposes Uniform Majestic Bidding Procedures
BOOTS & COOTS: June 30 Working Capital Deficit Tops $5 Million
BUDGET GROUP: Wants Okay to Hire Eversheds as Foreign Counsel
CENTENNIAL COMMS: First Quarter EBITDA Climbs Up 21% to $75.8MM

CHINA ENTERPRISES: Net Loss Widens 28.3% to $2.8MM in First Half
COMDIAL CORP: Raises a Total of $3.95MM from Bridge Financing
COMDISCO INC: Balks at Sungard's Move to Transfer Texas Property
CONTINENTAL AIRLINES: Blaylock Begins Coverage with HOLD Rating
COOKER RESTAURANT: Chapter 11 Bankruptcy Plan is Confirmed

CORTECH: Fails to Fulfill Nasdaq Continued Listing Requirements
DELTA AIRLINES: Blaylock Kicks-Off Coverage with "Hold" Rating
DIVINE INC: Expects to Close Merger Transaction with Viant Today
D.R. HORTON: Fitch Assigns Initial BB+ Senior Unsec. Debt Rating
DYNEGY: S&P Says Accounting Fine Will Not Affect Credit Profile

ENRON CORP: Goldendale Asks Court to Appoint NEPCO Examiner
EXIDE TECHNOLOGIES: Court Extends Plan Exclusivity Until Dec. 11
FFP MARKETING: Accepting Sealed Bids for Non-Core Assets
FLAG TELECOM: Restructures Lucent, Ciena & Other Contracts
FLAG TELECOM: S.D.N.Y. Court Confirms Plan of Reorganization

GROUP TELECOM: CCAA Protection Extended to November 4, 2002
GROUP TELECOM: Wins Extension of US Court Protection to Nov. 12
HA-LO INDUSTRIES: Will Not Hire New Accountants in the Interim
HARDWOOD PROPERTIES: Confirms "Inactive Issuer" Status on TSX
HORSEHEAD INDUSTRIES: Turns to Blackstone for Financial Advice

INDYMAC MANUFACTURED: S&P Junks Rating on Class B-1 P-T Certs.
INNOVATIVE CLINICAL: Signs-Up Vitale Caturano as New Auditors
INNOVATIVE CLINICAL: Sells Wholly Owned Clinical Studies Unit
INT'L THUNDERBIRD: Resolves Default on Prime & MRG Obligations
KAISER ALUMINUM: Selling Pipeline Assets to Sorrento for $3 Mil.

KMART: Moody's Further Junks Ratings on Four Lease-Backed Notes
KNOLOGY BROADBAND: Seeking Nod to Pay Critical Vendors' Claims
LEHMAN ABS: Fitch Drops Junk-Rated on Class B-2 Notes to D
LODGIAN: CCA Asks Court to Extend Time for Sec. 1111(b) Election
LORAL SPACE: Extends Preferred Share Exchange Offer to October 8

LTV CORP: Court Approves Nationwide Consulting as Appraisers
MARK NUTRITIONALS: Seeks Okay to Use Hibernia's Cash Collateral
MARTIN INDUSTRIES: Secures Interim Bank Financing from AmSouth
MEASUREMENT SPECIALTIES: Sells Terraillon to Fukuda for $22.3MM
MENTERGY: Files for Court Protection from Creditors in Israel

METROCALL INC: Court Confirms Plan & Stage Set to Emerge in Oct.
MILITARY RESALE: Cash Levels Insufficient to Fund Operations
MTS SYSTEMS: Fails to Comply with Nasdaq Listing Requirements
NATIONAL STEEL: Ziegler Wants to Recoup Assets from Nat'l Pellet
NEPTUNE SOCIETY: KPMG LLP Articulates Going Concern Doubts

NORTHWEST AIRLINES: Blaylock Initiates Coverage with Hold Rating
OMEGA HEALTHCARE: S&P Affirms B Corporate Credit Rating
OWENS CORNING: Jackson & Hancock Want to Recover Settlements
PACIFIC GAS: Wants to Defray $5.6MM Additional Misc. Plan Costs
PACIFIC GAS: Plan Confirmation Hearings to Begin on November 18

PENN MUTUAL: Fitch Ups Ratings on Series 1996-PML P-T Certs.
PENN TRAFFIC: Ups Promo Spending to Combat Market Competition
PENNEXX FOODS: Plans Equity Infusion to Dodge Potential Default
PEREGRINE SYSTEMS: Look for Schedules & Statements around Nov. 5
PEREGRINE SYSTEMS: Receives Court Approval of First Day Motions

POLAROID CORP: Wants More Time to Remove Prepetition Actions
PREVIO INC: Files Cert. of Dissolution with Delaware State Sec.
PURCHASEPRO.COM: Case Summary & 20 Largest Unsecured Creditors
REUNION INDUSTRIES: Closes Sale of Kingway Division for $32 Mil.
SAGENT: Nasdaq Approves Listing Transfer to SmallCap Market

SERVICE MERCH.: Asks Court to Lift Claim Trading Restrictions
SLI INC: Wins Nod to Pay Critical Vendors' Prepetition Claims
SUNRISE TECHNOLOGIES: Files for Chapter 7 Liquidation in Calif.
SYNTHONICS TECHNOLOGIES: Committee Wants to File a Better Plan
TRICORD SYSTEMS: Receives Formal Notice of Patent Acceptance

TRICORD SYSTEMS: Obtains Formal Notice of Patent Issuance
UNITED AIRLINES: AFL-CIO Issues Comment on Union Coalition Plan
UNITED AIRLINES: Blaylock Initiates Coverage with Sell Rating
US AIRWAYS: Conditionally Seeks Okay to Reject Union Agreements
US AIRWAYS: Blaylock Commences Coverage with SELL Rating

VALEO ELECTRICAL: Court Clears Emergence from Ch. 11 Bankruptcy
VIVENDI UNIVERSAL: Six Board of Directors Members Leave Seats
WORLDCOM INC: Asks Court to Clear Pentagon Purchase Agreement
WORLDCOM: ATLANTIC-ACM Says Bankruptcy Will Benefit IDT & Vartec
ZIFF DAVIS: Commences Exchange Offer for Series E Preferreds

* BOOK REVIEW: The Phoenix Effect: Nine Revitalizing Strategies
               No Business Can Do Without

                          *********

ACOUSTISEAL: Court Okays Bryan Cave as Debtor's Ch. 11 Attorneys
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Missouri
gave its permission to Acoustiseal, Inc., to employ and retain
Mark G. Stingley, Esq., and the firm of Bryan Cave LLP as its
attorneys.

Mr. Stingley and other attorneys at Bryan Cave LLP are duly
licensed and qualified attorneys and are amply qualified to act
as counsel for the estate, the Company says in its papers.

Specifically, Bryan Cave will:

     a. advise the Debtor with respect to its rights and
        obligations as Debtor in Possession and regarding other
        matters of bankruptcy law;

     b. prepare and file any petitions, schedules, motions,
        statement of affairs, plan of reorganization, or other
        pleadings and documents which may be required in these
        proceedings;

     c. represent the Debtor at the meeting of creditors, plan
        disclosure, confirmation and related hearings, and any
        adjourned hearings;

     d. represent the Debtor in adversary proceedings and other
        contested bankruptcy matters; and

     e. represent the Debtor in the above matter, and any other
        matter that may arise in connection with the Debtor's
        reorganization proceeding and its business operation.

Bryan Cave will charge the Debtor at its customary hourly rates:

          Partners          $250 - $400 per hour
          Counsel           $150 - $250 per hour
          Associates        $110 - 225 per hour
          Paralegals        $ 75 - $120 per hour
          Document Clerks   $ 75 per hour

Acoustiseal, Inc., filed for chapter 11 protection on September
4, 2002 in the U.S. Bankruptcy Court for the Western District of
Missouri (Kansas City).  Cynthia Dillard Parres, Esq., and Mark
G. Stingley, Esq., at Bryan, Cave LLP represent the Debtor in
its restructuring efforts.  When the Company filed for
protection from its creditors, it listed an estimated assets of
$10-$50 million and estimated debts of over $50 million.


ADELPHIA COMMS: Committee Taps Neilson for Accounting Services
--------------------------------------------------------------
The Official Committee of Unsecured Creditors seeks to retain
the firm of Neilson Elggren as accountants to perform the
forensic and investigative accounting services that will be
necessary during the Chapter 11 cases involving the Adelphia
Communications Debtors.  The Debtors ask the Court to approve
the engagement nunc pro tunc to August 1, 2002.

According to Adam L. Shiff, Esq., at Kasowitz Benson Torres &
Friedman LLP, in New York, Neilson Elggren is a firm of 40
professionals and consultants including certified public
accountants and consultants that specialize in, among other
things, forensic accounting, litigation support, and other
general bankruptcy accounting services including bankruptcy
taxation and business valuation issues.  Neilson Elggren
maintains its primary place of business at 10100 Santa Monica
Boulevard, Suite 410 in Los Angeles, California 90067 and
maintains other offices in Salt Lake City, Utah and Wilmington,
Delaware.  The Committee seeks to retain the firm of Neilson
Elggren as its forensic accountants because of the firm's
extensive experience, expertise and knowledge with respect to
the identification, detection and investigation of accounting-
related frauds, as well as its capabilities in all aspects of
bankruptcy accounting issues.

The Committee believes that the hiring of a firm to provide
forensic and investigative accounting services is necessary in
these Chapter 11 cases due to the size, scope, and complexity of
the Debtors' enterprise and the alleged frauds that were
perpetrated by certain insiders of the ACOM Debtors.  Mr. Shiff
points out that no credible information exists with respect to
the ACOM Debtors' accounting and finances.  The Debtors' public
filings state that they plan to restate their financial
statements for the fiscal years 1999 and 2000.  Additionally,
the ACOM Debtors have yet to file financial statements for the
fiscal year 2001 or for the first quarter of 2002 and do not
anticipate doing so until the end of the third quarter of 2002.  
The services of Neilson Elggren are necessary for the Committee
to:

-- understand the Debtors' businesses on an operational and
   financial basis,

-- to investigate potential claims against insiders of the
   Debtors and third parties, and

-- to investigate other potential courses of action within these
   Chapter 11 cases.

The Committee is aware that the Debtors have sought to retain
the firm of PricewaterhouseCoopers to provide auditing and
forensic accounting services to the Debtors and that other third
parties may seek to employ forensic accounts to provide
additional services in these Chapter 11 cases.  Neilson Elggren
has informed the Committee that it plans to work closely with
PwC in order to:

-- utilize the work product, which has already been produced by
   PwC regarding the Debtors, and

-- minimize duplication of efforts between Neilson Elggren and
   PwC.

The professionals presently designated to represent the
Committee and their current standard hourly rates are:

       Partners                      $375 - 475
       Managers                       230 - 275
       Seniors                        190 - 220
       Consultants                    170 - 180
       Accounting Technicians          90 - 125

Neilson Elggren is expected to:

A. analyze and determine the appropriateness of the
   Debtors' accounting journal entries and other record keeping
   methods relating to inter/intra company transactions between
   its various legal entities and other entities which may be
   related to the Debtors through the Rigas family and determine
   whether the methodology used to charge or allocate
   expenditures was and currently is reasonable;

B. obtain and analyze the Debtors' historical legal entity
   financial statements and determine that those financial
   statements fairly represent the financial performance of each
   legal entity;

C. investigate the Debtors' accounting journal entries and
   other financial records with respect to the fiscal year 2001
   and the first quarter of 2002;

D. analyze the Debtors' historical financings and acquisitions
   and determine the appropriateness of those transactions on a
   legal entity-by-entity basis;

E. gain an understanding of the Debtors' operating procedures
   and policies including:

    1. Cash management system;

    2. Inter/Intra company transactions;

    3. Capital expenditure classification;

    4. Significant accounting policies and procedures;

    5. Acquisition accounting; and

    6. Internal financial/tax restructuring programs.

F. provide litigation support, including testimony, to the
   Committee as requested by counsel to the Committee;

G. report to the Committee from time to time regarding work
   performed; and

H. interact with other financial, accounting, and other
   professionals employed by the Debtors and related parties as
   well as law enforcement accounting professionals.

R. Todd Neilson, a partner in the firm of Neilson Elggren LLP,
assures the Court that the firm has not otherwise provided
services to the Debtors, their creditors, equity security
holders, or any other parties-in-interest, or their respective
attorneys, in any matters relating to the Debtors or their
estates.  In addition, Neilson Elggren:

-- does not hold or represent any interest adverse to the
   Committee in the matters for which it has been retained,

-- Neilson Elggren is a "disinterested person" as that term is
   defined in Section 101(14) of the Bankruptcy Code, and

-- has no connection with the Debtors, the creditors or any
   other party-in-interest. (Adelphia Bankruptcy News, Issue No.
   18; Bankruptcy Creditors' Service, Inc., 609/392-0900)

DebtTraders says that Adelphia Communications' 9.50% bonds due
2005 (ADEL05USR1) are trading at 30.5 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ADEL05USR1
for real-time bond pricing.


AMERCO: Moody's Cuts Rating on Senior Unsecured Notes to Ba2
------------------------------------------------------------
Moody's Investors Service took several downward ratings on
AMERCO.

Affected Ratings are:
                 
     * Senior implied and senior unsecured and medium term notes
       to Ba2,

     * Subordinated shelf to (P)Ba3; and

     * Preferred shelf to (P)B1.

Moody's says the ratings outlook is stable.

Moody's says, "The downgrade is based on our expectation that
adjusted debt will continue to be high while financial
performance, which has recently been hurt by losses at its
insurance operations, will continue to be weak. The downgrade
also reflects weak cash flow from operations, which requires an
ongoing sale of assets and access to financial markets for
refunding, and a reduced liquidity position, which is aggravated
by the high seasonality of its rental operations."

The stable outlook assumes that the company can continue its
efficient access to funding alternatives in order to meet near-
term maturities. Revenues is growing in a lower but steady pace
over the last three years. Profits from the company's core
business have also been steady.

AMERCO, a holding company based in Reno Nevada, has interests in
consumer truck rental, storage, real estate and property &
casualty and life insurance.


AMR CORP: Blaylock Initiates Coverage with "Hold" Ratings
---------------------------------------------------------
Blaylock & Partners' airlines and transportation analyst Ray
Neidl has initiated coverage of AMR Corporation (NYSE: AMR) with
"hold" ratings.  Mr. Neidl delayed initiating coverage of the
airline until he had a better sense of when a recovery will
occur, which he believes will not be until 2Q03 at the earliest.

In his equity reports, Mr. Neidl notes that AMR should rebound
once the economy recovers.  The airline has enough liquidity to
carry it through to next year.  Reasons for Mr. Neidl's "hold"
recommendations include:

     -- AMR -- The airline has a good reputation for service,
which attracts higher-yielding frequent flyers.  AMR plans to
restructure its large Dallas Fort-Worth hub and cut jobs and
capacity, which will reduce annual costs by $1.1 billion.

Mr. Neidl also cites the reasons why he is not optimistic on the
industry in the short-term:

     -- The disappointing pace of economic recovery during the
summer, and no clear direction yet as to when the full recovery
will come

     -- General stock market weakness and continuing large
institutional sellers

     -- The slowdown in the industry recovery as reflected in
the continuing weak traffic and yield numbers

     -- Continuing high oil prices at around $30 barrel

     -- The threat of conflict in the Middle East and its
possible effect on travel and oil prices

     -- Additional costs and inconvenience on the traveling
public of beefed-up security procedures continue to affect
operations

     -- A certain segment of the traveling public's continuing
fear of flying due to terrorism

     -- The threat of a major industry player, UAL Corp., going
bankrupt, and its possible effect on the rest of the industry

     -- The continuing uncertainty and increased costs of
insurance

     -- The normally slow fall seasonal weakness of airline
travel and stock prices will also probably have a continuing
negative effect on stock prices

Blaylock's ratings system consists of "buy," "hold" and "sell"
recommendations.  Investment banking stocks have a "not rated"
designation. Institutional investors interested in receiving
more information should contact Mr. Neidl at 212/715-6627 --
rneidl@blaylocklp.com   Journalists interested in receiving
copies of the research reports should contact Dao Tran at
dtran@starkmanassociates.com  

Based in New York, Blaylock & Partners, L.P., has been ranked by
Black Enterprise magazine as the number one minority-owned
investment banking firm for 1999 and 2000.  The firm has co-
managed four of the largest most recent IPOs - Travelers
Property Casualty Corp., Prudential Financial, Inc., Kraft Foods
Inc., and Agere Systems Inc.  Blaylock & Partners is a member of
the NASD and SIPC.

Blaylock & Partners, L.P. is a member of the National
Association of Securities Dealers, CRD number 35669.

DebtTraders reports that AMR Corp.'s 9.0% bonds due 2012
(AMR12USR1) are trading at 56 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AMR12USR1for  
real-time bond pricing.


AT&T CANADA: Takes Steps to Establish Viable Capital Structure
--------------------------------------------------------------
AT&T Canada Inc., (NASDAQ: ATTC) (TSX: TEL.B) reported that, as
part of its strategy to ensure its future as a strong and
growing competitor, it has taken two important steps towards
establishing a viable capital structure to support the strategic
direction of its businesses.

First, further to AT&T Canada's continuing discussions about its
capital restructuring, the company has agreed to repay all
amounts drawn from the company's bank credit facility upon the
conclusion of the back-end transaction with AT&T Corp. The
repayment of the CDN$200 million drawn will be funded with a
portion of the approximately CDN$240 million in proceeds that
the company expects to receive from the exercise of employee
stock options. As the company has stated previously, the back-
end is expected to close on October 8 but no later than October
23. After repaying the amount drawn under the bank credit
facility, the company will continue to have liquidity in excess
of CDN$400 million.

Second, all of AT&T Canada's remaining currency swaps have been
unwound in accordance with their terms with the company
receiving approximately CDN$85 million in face amount of its
outstanding bonds in satisfaction of the counterparties
obligation to the company. The bonds received will be cancelled
by the company.

David Lazzarato, Executive Vice President and CFO, AT&T Canada
said, "These actions are part of our strategy to put in place a
viable capital structure that will support the potential of AT&T
Canada's businesses. We believe our discussions with our
bondholders and AT&T Corp., continue to be encouraging and we
are on-track to achieve a consensual restructuring of our public
debt by year-end or sooner."

AT&T Canada is Canada's largest competitor to the incumbent
telecom companies. With over 18,700 route kilometers of local
and long haul broadband fiber optic network, world class managed
service offerings in data, Internet, voice and IT Services, AT&T
Canada provides a full range of integrated communications
products and services to help Canadian businesses communicate
locally, nationally and globally. AT&T Canada Inc. is a public
company with its stock traded on the Toronto Stock Exchange
under the symbol TEL.B and on the NASDAQ National Market System
under the symbol ATTC. Visit AT&T Canada's Web site,
http://www.attcanada.comfor more information about the company.

AT&T Canada Inc.'s 9.95% bonds due 2008 (ATTC08CAR1),
DebtTraders reports, are trading at 10 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ATTC08CAR1
for real-time bond pricing.


BANYAN STRATEGIC: Extends Northlake Closing Date to September 30
----------------------------------------------------------------
Banyan Strategic Realty Trust (OTC Bulletin Board: BSRTS) has
entered into an amendment with the proposed purchaser of
Banyan's ground lease interest in the Northlake Tower Festival
Mall (suburban Atlanta, Georgia), extending the closing date
from September 24, 2002 to September 30, 2002.  The extension
was necessitated by, among other things, the fact that the
purchaser had not yet obtained all of the approvals of the
required rating agencies necessary for closing.  In addition,
formal consent to the transaction has not yet been received from
the owner of the land upon which the shopping center is
situated. Rating agency approval is required for the purchaser's
assumption of the first mortgage debt that encumbers the
property, and the land owner's consent is required by the
applicable ground lease.

The amendment resolves certain disputed issues between Banyan
and the purchaser.  Banyan allowed a price concession of
$110,000 (reducing the total purchase price to $20,390,000), in
exchange for the purchaser's willingness to accept certain
tenant estoppel letters that the purchaser contended were not in
acceptable form.  The price reduction is also intended to
compensate the purchaser for the financial impact of certain
concessions that the purchaser may be required to make to the
lessor under the ground lease, in order to obtain the ground
lessor's consent to the transaction.

Banyan indicated that both the company and the purchaser intend
to work together to accomplish the remaining steps in order to
close on or prior to the September 30, 2002 closing date. If the
rating agency approvals are not received by such time, or other
conditions precedent to closing are not satisfied, the purchaser
may terminate the contract without penalty.

Banyan Strategic Realty Trust is an equity Real Estate
Investment Trust that adopted a Plan of Termination and
Liquidation on January 5, 2001. On May 17, 2001, the Trust sold
approximately 85% of its portfolio in a single transaction.
Other properties were sold on April 1, 2002 and May 1, 2002.
Banyan now owns a leasehold interest in one (1) real estate
property located in Atlanta, Georgia, representing approximately
9% of its original portfolio. This property is subject to a
contract of sale, currently scheduled to close on September 30,
2002.  Since adopting the Plan of Termination and Liquidation,
Banyan has made liquidating distributions totaling $5.45 per
share. As of this date, the Trust has 15,496,806 shares of
beneficial interest outstanding.

See Banyan's Web site at http://www.banyanreit.comfor more  
information about the Company.


BETHLEHEM STEEL: Proposes Uniform Majestic Bidding Procedures
-------------------------------------------------------------
Although Bethlehem Steel Corporation and its debtor-affiliates
have a definitive agreement with Majestic Realty Co., with
respect to the sale of the Bethlehem Commerce Center, the
Debtors believe that they can still fetch an even better offer.  
Accordingly, the Debtors sought and obtained the Court's
permission to implement these bidding procedures:

  (a) All bidders must sign an agreement in a form no less
      favorable to the Debtors in the aggregate than the
      Purchase and Sale Agreement with Majestic;

  (b) A bidder must submit to the Debtors' counsel a written bid
      for the properties for at least $16,456,729 and deliver an
      earnest money deposit to the Debtors' counsel of no less
      than $500,000.  The deposit will be in the form of a
      certified check or wire transfer payable to the trust
      account of the Debtors' counsel not later than October 3,
      2002 at 4:00 p.m.  The bid must identify the bidder and
      contain documents and information establishing the
      bidder's financial ability to close.  The Debtors' counsel
      will provide Majestic's counsel with copies of any
      competing bids;

  (c) Bids must not be subject to financing or any other
      contingencies not otherwise expressly contained in the
      Majestic Agreement;

  (d) If higher or better bids are submitted timely, the
      Auction will be conducted at the law offices of

             Weil, Gotshal & Manges, LLP
             767 Fifth Avenue
             New York, New York
             10153

      on the October 17, 2002 at 11:00 a.m.  Qualified
      Bidders who have complied with the bidding procedures
      delineated herein may improve their bids at the Auction in
      increments of $250,000.  Should overbidding occur,
      Majestic has the right, but not the obligation, to
      participate in the bidding and to be approved as the
      successful bidder at the Sale Hearing based on any
      subsequent overbid.  The bidding will be continuous and
      competitive and will not end until all bidders have
      submitted their last and best offers;

  (e) At the conclusion of the Auction, the Debtors will
      announce the highest or best bid;

  (f) A hearing to confirm the results of the Auction will be
      held before Judge Lifland on October 10, 2002, at
      10:00 a.m., Eastern Time;

  (g) All Deposits will be held by the Debtors' counsel in an
      interest-bearing bank account, assuming the Qualified
      Bidder provides a Tax ID number, with interest for the
      accounts of the bidders.  Within four business days after
      entry of the Order approving the assumption, assignment
      and sale of the Acquired Assets, Deposits, plus accrued
      interest, if any will be returned to all Qualified
      Bidders except the Successful Bidders.  If the assumption,
      assignment and sale of the Acquired Assets to the
      Successful Bidder closes, the Successful Bidder's Deposit
      plus accrued interest, if any, will be applied to the
      purchase price at closing.

The Debtors will also provide notice of the Sale Hearing to:

1. Majestic Realty Co.;

2. The U.S. Trustee;

3. The attorneys for the Debtors' lenders;

4. The attorneys for the Unsecured Creditors Committee;

5. All parties who are known to assert a security interest, lien
   or claim in the properties;

6. Qualified parties who have expressed interest in acquiring
   the properties within 1 year before the date of the Sale
   Motion;

7. All appropriate federal, state and local taxing authorities,
   and environmental authorities;

8. All government agencies required to receive notice under the
   Bankruptcy Rules; and

9. All parties that have filed a notice of appearance in the
   Debtors' chapter 11 cases pursuant to Bankruptcy Rule 2002.

The Debtors will also publish a notice of the Sale Hearing at
least 15 days before the Auction in the national edition of The
Wall Street Journal.

Moreover, the Debtors sought and obtained the Court's authority
to afford Majestic a $360,000 expense reimbursement, which will
be paid:

(i) in the event a higher or better transaction is approved by
     the Bankruptcy Court; and

(ii) the approved higher or better transaction actually closes,
     in which event the Expense Reimbursement will be paid to
     Majestic in cash concurrently with the closing on the sale
     of that higher or better transaction;

If the Successful Bidder is a party other than Majestic, the
Debtors will file with the Court, one business day after the
Auction, a First Supplement outlining:

    * the identity of the Successful Bidder;
    * the relevant terms of the proposed sale agreement; and
    * the purchase price received;

The First Supplement will also contain a copy of the transcript,
if applicable, from the Auction. (Bethlehem Bankruptcy News,
Issue No. 22; Bankruptcy Creditors' Service, Inc., 609/392-0900)

Bethlehem Steel Corp.'s 10.375% bonds due 2003 (BS03USR1) are
trading at 7 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BS03USR1for  
real-time bond pricing.


BOOTS & COOTS: June 30 Working Capital Deficit Tops $5 Million
--------------------------------------------------------------
During the first half of 2002, demand for Boots & Coots
International Well Control's services declined as overall
industry conditions weakened. In response, the Company
discontinued certain of its operations resulting in a loss from
discontinued operations of $7.2 million. The Company's
continuing operations incurred a $1.8 million loss for the six
months ended June 30, 2002. These losses further impair the
Company's liquidity position and hamper the Company's capacity
to pay vendors on a timely basis, obtain materials and supplies,
and otherwise conduct effective or efficient operations. To
date, however, the Company has not been limited in its ability
to respond to critical well events.

The Company continues to experience severe working capital
constraints. As of June 30, 2002, the Company's current assets
totaled approximately $6,721,000 and current liabilities were
$11,617,000, resulting in a net working capital deficit of
approximately $4,896,000 (compared to a beginning year working
capital of $3,285,000). The Company's highly liquid current
assets, represented by cash of $262,000 and receivables and
restricted assets of $4,228,000 were collectively $7,127,000
less than the amount of current liabilities at June 30, 2002
(compared to a beginning year deficit of $4,452,000). The
Company is actively exploring new sources of financing,
including the establishment of new credit facilities and the
issuance of debt and/or equity securities. During April and May
2002, the Company entered into loan participation agreements
with certain parties under which it borrowed an additional
$1,000,000 under the Senior Secured Loan Facility. The
participation agreements have an initial maturity of 90 days,
which have been extended for an additional 90 days at the
Company's option.

Prevention revenues were $4,266,000 for the six months ended
June 30, 2002, compared to $1,615,000 for the six months ended
June 30, 2001, representing an increase of $2,651,000 (164%) in
the current year. The increase was primarily the result of
service fee increases associated with the WELLSURE program,
increased project management work in Venezuelan operations and
expanded services and equipment sales provided under the
Company's Safeguard program.

Response revenues were $3,728,000 for the six months ended June
30, 2002, compared to $7,595,000 for the six months ended June
30, 2001, a decrease of $3,867,000 (51%) in the current year.

The decrease is primarily the result of a lack of emergency
response services as overall industry conditions weakened.
Moreover, the 2001 period contained three significant WELLSURE
events while the Company had no major critical well events
during the 2002 period.

Prevention cost of sales were $1,588,000 for the six months
ended June 30, 2002, compared to $469,000 for the six months
ended June 30, 2001, an increase of $1,119,000 (238%) in the
current year. The increase was due to manufacturing costs
incurred from an international equipment sale under the
Safeguard program. Response cost of sales were $1,671,000 for
the six months ended June 30, 2002, compared to $979,000 for the
six months ended June 30, 2001, an increase of $692,000 (71%) in
the current year. The increase was a result of higher than usual
third party costs associated with one response project during
the first six months of 2002.

Consolidate operating expenses were $3,373,000 for the six
months ended June 30, 2002, compared to $2,299,000 for the six
months ended June 30, 2001, an increase of $1,074,000 (47%) in
the current year. This increase was primarily a result of
expanding engineering staffing levels, increases in support
staff for the WELLSURE program and business development costs
associated with the Safeguard program. Also included were
increases in operating overhead associated with higher insurance
premiums, professional fees and other personnel expenses.

Consolidated selling, general and administrative expenses were
$1,413,000 for the six months ended June 30, 2002, compared to
$1,551,000 for the six months ended June 30, 2001, a decrease of
$138,000 (9%) from the prior year. These reductions were
primarily a result of decreased payroll and rent requirements in
the continuing operation.

Consolidated depreciation and amortization expenses were
$574,000 for the six months ended June 30, 2002, compared to
$661,000 for the six months ended June 30, 2001, a decrease of
$87,000 (13%) from the prior year due to a lower asset base.

The increase in interest and other expenses of $497,000 for the
six months ended June 30, 2002, as compared to the prior year
period is primarily a result of legal settlements of $800,000,
of which $234,000 was allocated to discontinued operations
during the current period. The six months ended June 30, 2001
included $350,000 for potential claims in the ITS bankruptcy
proceeding and $143,000 in financing costs related to the KBK
financing that commenced during the period.

Income taxes for the six months ended June 30, 2002 are a result
of taxable income in the Company's foreign operations.

The uncertainties surrounding the sufficiency and timing of its
future cash flows and the lack of firm commitments for
additional capital raise substantial doubt about the ability of
Boots & Coots to continue as a going concern.


BUDGET GROUP: Wants Okay to Hire Eversheds as Foreign Counsel
-------------------------------------------------------------
Budget Group Inc., and its debtor-affiliates seek the Court's
authority to employ and retain Eversheds as their special
counsel to foreign matters pursuant to Section 327 of the
Bankruptcy Code and Federal Rules of Bankruptcy Procedure 2014.

Robert L. Aprati, the Debtors' Executive Vice President, General
Counsel and Secretary, tells the Court that Eversheds will
provide the required legal and litigation support to the Debtors
concerning foreign legal matters.  Eversheds will bring:

-- expertise with respect to English insolvency/bankruptcy
   related issues,

-- expertise with respect to French insolvency/bankruptcy
   related issues,

-- commercial, corporate, employment and property law advice in
   respect of assets of the Debtors situated in the United
   Kingdom and in France, and

-- expertise with respect to international franchise
   arrangements and related issues governed by English law.

Mr. Aprati relates that since May 24, 1996, Eversheds has
represented the Debtors in litigation and transactional matters
in both the United Kingdom and France.  Through their
representation of the Debtors, the professionals at Eversheds
have become uniquely and thoroughly familiar with the Debtors
and their business affairs.  The partners, assistance solicitors
and trainee solicitors of Eversheds -- who will represent the
Debtors in connection with the matters that Eversheds is to be
retained -- have extensive knowledge and expertise in all
aspects of foreign law and the treatment of the issues in the
context of a Chapter 11 bankruptcy.

The Debtors intend to compensate Eversheds based on the standard
hourly rates of its professionals:

          Partners                - 365 Pounds
          Assistant Solicitors    - 165 to 275 Pounds
          Trainee Solicitors      - 110 Pounds

Eversheds customarily charges its clients for all costs and
expenses incurred, including without limitation, travel costs,
telecommunications, express mail, messenger service, document
processing, photocopying costs, temporary employment of
additional staff, overtime meals, court fees, transcript costs
and, in general, all identifiable expenses that would not have
been incurred except for representation of a particular client.

Mr. Aprati reports that Eversheds has received 404,415 Pounds --
or $629,270 -- as retainer in connection with its representation
of the Debtors.

Aleen Gulvanessian, a Partner at Eversheds, tells the Court that
the firm represented or currently represents these parties-in-
interest in the Debtors' cases on unrelated matters:

A. Known Institutional Lenders: Credit Suisse, Credit Suisse
   Asset Management Ltd, Credit Suisse First Boston, Merrill
   Lynch Investment Managers Ltd., Merrill Lynch, Merrill Lynch
   Europe PLC, Commerzbank Aktiengellschaft, Commerzbank (South
   East Asia) Limited, Commerzbank International Trust
   (Singapore) Ltd., GE Capital, GE Capital Papas, GE Capital
   Europe Ltd, GE Capital Services, GE Aircraft Division, GE
   Power System, GE Energy Services, GE Plastics and GE Power
   System, GE Capital Fleet Services Limited and GE Capital
   TLS Limited GE Global consumer finance, Sumitomo Mitsui
   Banking Corporation, Sumitomo Trust & Banking Company Ltd.,
   Mitsui Sumitomo Insurance, Goldman Sachs Asset Management
   International Goldman Sachs International, Bank of
   Tokyo-Mitsubishi Ltd., Fuji Bank, IBNP Paribas, General
   Electric International (Benelux) BV, BNP Paribas Merchant
   Banking Asia Ltd., Credit Agricole Indosuez, British American
   Securities Inc. and Bank of Nova Scotia Asia Limited.

B. Top 50 Largest Creditors: GE Capital Papas, GE Capital Europe
   Ltd., GE Capital Insurance, GE Capital Services, GE Aircraft
   Division, GE Power System, GE Capital Real Estate, GE Energy
   Services, GE Plastics and GE Power System, GE Aircrafts
   Engines GE Capital Fleet Services Limited and GE Capital, TLS
   Limited, GE Global consumer finance, GE Capital Commercial
   Finance, Global Consumer Finance, Leasecontracts Limited,
   Sabre Insurance Company Ltd., Sabre Employment Ltd, Sabre
   International Ltd., Sabre Rail Services, Sabre Corporation
   Property Ltd, JP Morgan Fleeting, JP Morgan Investment
   Management Inc., Morgan Stanley & Co. International Ltd.,
   Morgan Morgan Stanley, Investment Management Ltd. Morgan
   Chase Associates Limited, JP Morgan Fleeting (Funds) Ltd., JP
   Morgan PLC Morgan Stanley Asia Ltd., AT &T BCS-E, AT&T Global
   Network Services, AT&T Business EMEA, AT&T Istel, Goldman
   Sachs Asset Management International, Goldman Sachs
   International, Prudential Assurance Company, Prudential Unit
   Trusts Ltd., Prudential Assurance, British Telecom Plc, BT
   Brightstar, BT Ignite, BT Exact Technologies Ltd, Citibank
   International Plc Citibank, Citibank International Personal
   Banking, The Citibank Ptd Ltd., Citibank N.A., Citibank,
   Citibank Finance Limited, Citibank NA, Citibank Finance
   Limited, Bear Stearns International and Bear Steams
   International Trading Limited, Bear Stearns Home Loans Ltd,
   Deutsche Bank AG, Deutsche Genossenschatts-hypobank AG,
   Deutsche Hypothekenbank (a-g) and Deutsche Hypothekenbank
   Frankfurt-Hamburg, Deutsche Bank Aktiengesellschaft, Charles
   Schwab Europe Limited, Charles Schwab Europe, UBS Fund
   Services Luxemborg AG, UBS Ltd., UBS Monaco, UBS AG/Formerly
   SBC Warburg Dillon Read, Schroder Investment Management (Hong
   Kong) Ltd., Schroder Investment Management Luxembourg,
   Scluoder Investment Management, (Guernsey) Ltd, Schroder
   Saloman Smith Barney, National Leasing & Finance Co.,
   American Securities BD Co LP, State Street Bank and Trust
   Company and Credit Lyonnaise.

C. Insurers: CAN Executive Search Limited, Lancer UK Limited XL
   Prevent, XL Refrigeration Limited, Federal Finance Ltd.
   Finance, Lloyds TSB Motovent Limited, Lloyds TSB TSB
   Education Motolease Ltd., Motolease Ltd., Lloyds Bank
   Mortgage Limited and Lloyds TSB, TSB Commercial Finance,
   Zurich Financial Services, American Life Insurance Company,
   AIG Insurance Management Services, AIG Europe Limited,
   Liberty Mutual Insurance Company, Limited and Liberty
   Underwriters Canada, The USF Environmental Pension Scheme
   Trustee and USF.

D. Major Customers (excluding gasoline vendors): Daimler
   Chrysler Capital Services (Debris) UK, Daimler Benz AG,
   Daimler Chrysler Daimler Chrysler UK Ltd, Ford Motor Company,
   Ford Components Manufacturing Limited, Ford Motor Company
   Ltd., Nissan Motor Manufacturing UK, Hyundai, Hyundai Micro
   Electronic Wales Ltd. and Hyundai Mipo Dockyard Co. Ltd.

E. Known Shareholders Holding More Than [S%] of Debtors Common
   Equity: Deutsche Bank A.G, Deutsche Genossenschatts -
   hypobank AG, Deutsche Hypothekenbank (a-g) and Deutsche
   Iiypothekenbanh Frankfurt - Hamburg and Deutsche Bank
   Aktiengesellschaft.

F. Parties to Significant Litigation: Ryder Truck Rental Ltd.
   and Ryder Consulting Limited.

G. Known Indenture Trustees to Debtors: Credit Suisse, Credit
   Suisse Asset Management, Credit Suisse Securities Ltd.,
   Funds Services, Credit Suisse Asset Management Ltd., Credit
   Suisse (UK) Limited, Chase Manhattan Expatriate Division,
   Chase Manhattan Bank London office, JP Morgan Fleming, JP
   Morgan Fleeting (Funds) Ltd., Stanley Dean Witter and Morgan
   Stanley Investment Management Ltd., Morgan Stanley Asia Ltd.,
   State Street Bank and Wilmington Trust.

H. Retained Professionals: KMPG, Buck Consultants, Ernst &
   Young, Sidley Austin Brown, Jeffries Solicitors, Standard
   Banks Offshore Trust Company Jersey Ltd. and Shandwick
   International Ltd.

I. Other Significant Relationships: Cendant Europe Limited
   Cendant Corporation and Cendant Intercultural, The Bennett
   Group.

Mr. Gulvanessian assures the Court that Eversheds, its members,
counsel and trainees do not represent or hold any interest
adverse to the Debtors or their estates, with respect to the
matters upon which the firm is to be employed.  Furthermore,
Eversheds does not have any material connection with the
Debtors, their officers, affiliates, creditors or any other
party-in-interest, or their respective attorneys and
accountants, or the United States Trustee. (Budget Group
Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


CENTENNIAL COMMS: First Quarter EBITDA Climbs Up 21% to $75.8MM
---------------------------------------------------------------
Centennial Communications Corp., (NASDAQ: CYCL) -- whose May 31,
2002 balance sheet records a total shareholders' equity deficit
of about $470 million -- announced results for the quarter ended
August 31, 2002.

Consolidated revenues grew 10% from the same quarter last year
to $191.9 million, and earnings before interest, taxes,
depreciation, amortization and gain on disposition of assets
("EBITDA") increased 21% from the same quarter last year to
$75.8 million. Basic and diluted loss per share for the first
quarter was $0.00.

During the quarter, the Company announced:

     - The sale of its 51% interest in its Jamaica wireless
business and an agreement to sell its 60% interest in its
Jamaica Internet service provider business. The sale reduced
consolidated debt by $45.1 million. The Jamaica operations
incurred EBITDA losses of approximately $0.9 million in the
first quarter. The Company recorded a $2.4 million gain on the
sale of the Jamaica wireless business.

     - The appointment of Thomas J. Fitzpatrick to the position
of executive vice president and chief financial officer.

The Company's wireless subscribers at August 31, 2002 were
883,800, compared to 803,200 on the same date last year, an
increase of 10%. Caribbean Wireless subscribers decreased 16,700
during the quarter due primarily to the loss of 30,200  
subscribers in the divested Jamaica operation. U.S. Wireless
subscribers decreased by 6,300 during the quarter due primarily
to a reduction in prepaid subscribers. Caribbean Broadband
switched access lines reached 36,000 and dedicated access line
equivalents were 165,200 at quarter end, up 46% and 15%,
respectively, from the same quarter last year.

"We are very pleased with the significant year-over-year
improvement in financial performance. Targeting the most
profitable customers with superior service was the critical
driver of this growth," said Michael J. Small, chief executive
officer. "We are pleased to welcome Tom Fitzpatrick to
Centennial."

For the quarter, U.S. Wireless revenues were $93.1 million and
EBITDA was $45.1 million. EBITDA increased by 18% from the prior
year due to significantly improved margins on retail revenue.
Approximately 80% of our U.S. Wireless subscribers now use a
digital phone, which has facilitated a 43% increase in average
minutes of use per customer over the last year.

Also for the quarter, total Caribbean revenues were $98.8
million and EBITDA was $30.7 million, up 19% and 25%,
respectively from the same quarter last year. Caribbean
Broadband revenues for the quarter reached $35.7 million and
EBITDA reached $9.8 million, up 12% and 47% respectively from
same quarter last year.

The Company adopted Statement of Financial Accounting Standards
No. 142 effective June 1, 2002. As a result, previously recorded
goodwill and other intangible assets with indefinite lives will
no longer be amortized but will be subject to impairment tests.
Depreciation and amortization expense for the quarter ended
August 31, 2002 would have been $6.1 million higher in the
absence of SFAS No. 142. The aggregate effect of ceasing
amortization decreased net loss and loss per basic and diluted
share by $4.5 million and $0.05, respectively.

Centennial is one of the largest independent wireless
telecommunications service providers in the United States and
the Caribbean with approximately 17.1 million Net Pops and
approximately 883,800 wireless subscribers. Centennial's U.S.
operations have approximately 6.0 million Net Pops in small
cities and rural areas. Centennial's Caribbean integrated
communications operation owns and operates wireless licenses for
approximately 11.1 million Net Pops in Puerto Rico, the
Dominican Republic and the U.S. Virgin Islands, and provides
voice, data, video and Internet services on broadband networks
in the region. Welsh, Carson Anderson & Stowe and an affiliate
of the Blackstone Group are controlling shareholders of
Centennial. For more information regarding Centennial, please
visit its Web sites at http://www.centennialcom.comand  
http://www.centennialpr.net  


CHINA ENTERPRISES: Net Loss Widens 28.3% to $2.8MM in First Half
----------------------------------------------------------------
China Enterprises Limited (NYSE: CSH) announced its unaudited
condensed consolidated results for the six months ended June 30,
2002.

Revenues for the six months ended June 30, 2002 slide-up 7.2% to
Rmb1,46 million (US$176.4 million) from Rmb1,363.1 million
recorded in the same period last year. Total net loss reaches
Rmb23.1 million (US$2.8 million), up 28.3% from Rmb18 million in
the corresponding year-ago period.

Revenues, operating income, loss from continuing operations and
loss from discontinued operations for the six months ended June
30, 2001 have been restated from amounts previously reported to
reflect the effect of discontinued operations as of June 30,
2001. Please refer to Note 1 to the attached Financial
Highlights for details.

For the period under review, the Company has successfully
diversified its business outside the tire manufacturing and
trading sectors through the acquisition of a substantive stake
in Ananda Wing On Travel (Holdings) Limited, a leading travel
operator based in Hong Kong whose shares are listed on The Stock
Exchange of Hong Kong Limited.  The investment was accounted as
an investment in affiliate companies in the interim results.

In the fourth quarter of fiscal 2001, the Company entered into a
share transfer agreement with a third party to dispose of its
entire interest in Yantai CSI and the respective shareholder's
advance of Rmb20.2 million for an aggregate consideration of
Rmb25.5 million.  The approval from the relevant governmental
authorities has been obtained in late January 2002 and the
Company transferred substantially all its risks and benefits of
ownership of Yantai CSI to the buyer. The Company recognized a
net realized gain on such disposition of Rmb7.8 million and has
ceased to account for the results of operations and the assets
and liabilities of the factory from the disposal date. The sale
proceeds were fully received by the Company in cash in August
2002.

In January 2002, the Company also signed a transfer agreement to
sell its entire interest in Shandong Synthetic to its Chinese
joint venture partner for a consideration of Rmb10,000. The sale
was considered as completed in July 2002 as approval from the
relevant governmental authorities has been obtained and the
Company transferred substantially all its risks and benefits of
ownership of the factory to the buyer in early July 2002.

During the period, tire prices remained flat amidst the highly
competitive tire market but the prices of major raw materials
such as natural rubber and nylon cord have moved up.  Despite
the above, the Company was able to maintain a 7.2% revenue
growth with revenue climbed up to Rmb1.46 billion as compared to
the Rmb1.36 billion recorded in the same period last year due to
the Company efforts to reorganize its product strategy into
marketable and higher margin products and discontinue those of
lower profit margins.  There was a notable increase in the sales
of radial tires of 22.1% and bicycle tires of 18.3%. Gross
profit margin improved from 12.97% to 13.49%. The Company was
able to control the rising cost of production while benefiting
from the sales of higher margin products at the same time.  
However, it is worth noting that the tension in the Middle East
may lead to an upward trend in crude oil prices as well as a
continuing price increase in the natural rubber prices. In view
of the above, the present profit margin achieved for these six
months may not be maintained unless general market selling
prices can be adjusted to compensate for the rising production
costs.

Compared to the same period last year, selling and
administrative expenses decreased by 27.6% to Rmb114.9 million.  
This significant improvement can be attributed to: the
discontinuance of free delivery services, management's stringent
cost cutting efforts and the implementation of more efficient
and effective administrative and marketing strategies.

Loss from continuing operations increased to Rmb27.0 million
compared to Rmb1.5 million last year. It comprises an impairment
loss provision for the long-lived assets of Yinchuan CSI
amounting to Rmb174.4 million due to continued recurring losses
incurred by Yinchuan CSI, a gain of Rmb37.1 million upon an
increase in fair value of the convertible options in the
convertible note of Ananda and the Company's share of losses of
Ananda in an amount of Rmb3.6 million since its acquisition on
April 19, 2002.  The downturn of the Hong Kong economy and the
September 11, 2001 incident led to a general decrease in
consumer consumption in Hong Kong and a change of customer's
preference to short distance journeys. In addition, the second
quarter of a year is generally a low season in the travel
industry. All these facts contributed to affect the performance
of Ananda in the quarter results.

Income from discontinued operations increased to Rmb3.9 million
in the half year ended 2002 compared with a loss of Rmb16.6
million in the half year ended 2001. It represented the
operating results of the radial tire factory of Double
Happiness, Shandong Synthetic and Yantai CSI up to the disposal
date and a gain on disposal of Yantai CSI amounting to Rmb7.8
million in the first half year of 2002.

For the half-year ended June 30, 2002, the Company recorded a
consolidated net loss of Rmb23.1 million (2001: Rmb18.0
million).

In late August 2002, the Company decided to reengineer the
operation of Yinchuan CSI. The Company is actively engaged in
negotiations with its Chinese joint venture partner to formulate
different alternatives for the future operations of Yinchuan
CSI. No concrete plan has yet been agreed among all parties as
at the report date.

The New York Stock Exchange informed the Company on September
19, 2002 that the NYSE intends to suspend trading in the
Company's Common Stock prior to the Exchange's opening on
September 27, 2002 for a failure to meet the NYSE's continuing
listing standards. The Company intends to request a review of
the NYSE's decision according to NYSE appeal procedures.
Following the review, if the Company is unsuccessful in its
appeal, the NYSE may apply to the SEC to delist the Common Stock
from the NYSE.


COMDIAL CORP: Raises a Total of $3.95MM from Bridge Financing
-------------------------------------------------------------
As previously disclosed Comdial Corporation conducted closings
on its private placement of 7% senior subordinated secured
convertible promissory notes in the aggregate principal amount
of $3,475,000.00 pursuant to Subscription Agrements which
provide for up to $4 million of bridge financing to the Company.

On September 9, 2002, the Company closed on an additional
$475,000 of Bridge Notes.  This sale brings the total raised to
date from the Bridge Financing to $3,950,000.00. Proceeds from
this sale will be used for working capital and product
development and delivery.

The holders of the Bridge Notes are eligible to convert 13.33%
of the principal amount of the Bridge Note into shares of common
stock at a conversion price of $0.01 per share.

Pursuant to the terms of the previously disclosed advisory
agreement between the Company and Commonwealth Associates, LP,
and as a result of the most recent closing of the Bridge Notes,
the Company issued additional warrants to Commonwealth to
acquire 242,017 shares of common stock at an exercise price of
$0.01 per share.

Comdial Corporation, headquartered in Sarasota, Florida,
develops and markets sophisticated communications solutions for
small to mid-sized offices, government, and other organizations.
Comdial offers a broad range of solutions to enhance the
productivity of businesses, including voice switching systems,
voice over IP (VoIP), voice processing and computer telephony
integration solutions. For more information about Comdial and
its communications solutions, please visit its Web site at
http://www.comdial.com   

                            *    *    *

                         Debt Restructuring

On June 21, 2002, ComVest entered into an agreement with
Comdial's senior bank lender to purchase the bank's
approximately $12.7 million senior secured debt position,
outstanding letters of credit of $1.5 million, and 1,000,000
shares of Series B Alternate Rate Convertible Preferred Stock
(having an aggregate liquidation preference of $10.2 million)
for a total of approximately $8.0 million. Although there can be
no assurances, it is expected that this buy-out by ComVest,
which is subject to closing conditions, will be completed during
2002.  In connection with its debt restructuring, Comdial will
seek additional longer term financing which it expects will be
in the form of a new senior bank loan and other debt or equity
funding to be raised during 2002.  It is anticipated that the
Bridge Financing will be replaced by or convert into this
subsequent longer term financing.  There can be no assurance
that the Company will be successful in obtaining additional
financing or that the terms on which any such funding may be
available will be favorable to the Company.

                          Nasdaq Delisting

As a result of its immediate convertibility into shares of
common stock, the issuance of the Bridge Notes required
shareholder approval under the corporate governance requirements
of Nasdaq's Marketplace Rules. The failure to obtain shareholder
approval prior to the issuance of the Bridge Notes has resulted
in the Company's shares being delisted from the Nasdaq SmallCap
Market(R).  The Company anticipates that its common stock will
be quoted on the NASD's OTC-BB.  Nasdaq determined that the
Company was not eligible for immediate listing on the OTC-BB
because part of the delisting order related to public interest
concerns regarding the substantial dilution.  Accordingly, the
Company's stock currently trades on the Pink Sheets Electronic
Quotation Service.  The application to be quoted on the OTC-BB
must be filed by one or more broker-dealers and the Company must
meet certain requirements, including that its filings under the
Exchange Act must be current.  There can be no assurance that
the Company's stock will be quoted on the NASD's OTC-BB in the
future, in which case the Company's stock will continue to trade
through the pink-sheets.


COMDISCO INC: Balks at Sungard's Move to Transfer Texas Property
----------------------------------------------------------------
Pursuant to the Acquisition Agreement between SunGard and the
Reorganized Comdisco, Inc., the Debtors agreed to transfer the
Availability Solutions facility and real property located at
3001 Red Hawk Drive in Grand Prairie, Texas to SunGard.

SunGard now claims that a two-acre parcel of real property
located at 2900 Eagle Drive in Grand Prairie, Texas should have
been included in the Agreement and conveyed along with the Red
Hawk Property.  SunGard contends that the Eagle Drive Property
was held "primarily for use" in the Debtors' Availability
Solutions business and should have been conveyed pursuant to
Section 1.1 of the Agreement.

Felicia Gerber Perlman, Esq., at Skadden, Arps, Slate, Meagher &
Flom, in Chicago, Illinois, argues that SunGard's Motion should
be denied for these reasons:

  -- the Agreement provided for the conveyance of the Red
     Hawk Property only, and not the Eagle Drive Property.  The
     Agreement contemplated the transfer of all property held
     primarily for use in the Reorganized Debtors' Availability
     Solutions business.  Considering that SunGard had
     professionals conducting multiple reviews of the
     Debtors' assets and attended tours of the facilities used
     in the Reorganized Debtors' Availability Solutions
     business, SunGard should have known what real property was
     included in the Agreement;

  -- the Eagle Drive Property is a separate, undeveloped piece
     of property and should not be conveyed.  The two parcels of
     land are located on different roads, have different
     addresses and separate legal descriptions and are separated
     by a curb.  Both properties are taxed separately and have
     separate tax identification numbers.  The Reorganized
     Debtors' purchase of the Red Hawk Property is separated by
     five years from the purchase of the Eagle Drive Property;

  -- the Eagle Drive Property was not used in the Reorganized
     Debtors' Availability Solutions business.   The Eagle
     Drive Property was not used and was never intended to be
     used as a parking lot.  The Eagle Drive Property was
     purchased by the Debtors for use in their leasing business
     which is distinct and separate from the Availability
     Solutions business; and

  -- specific performance is not warranted because the Agreement
     clearly specified the Red Hawk Property, but not the Eagle
     Drive Property.

Therefore, the Debtors ask the Court to deny SunGard's request.
(Comdisco Bankruptcy News, Issue No. 36; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   


CONTINENTAL AIRLINES: Blaylock Begins Coverage with HOLD Rating
---------------------------------------------------------------
Blaylock & Partners' airlines and transportation analyst Ray
Neidl has initiated coverage of Continental Airlines Inc. (NYSE:
CAL) with "hold" ratings.  Mr. Neidl delayed initiating coverage
of Continental Airlines until he had a better sense of when a
recovery will occur, which he believes will not be until 2Q03 at
the earliest.

In his equity reports, the Company has enough liquidity to carry
it through to next year.  Reasons for Mr. Neidl's "hold"
recommendations include:

     -- CAL -- Continental has code-sharing and marketing
agreements with Northwest and Delta which help cut costs and
increase revenues.  Its hubs at Newark Liberty Airport, Houston
InterContinental Airport and Cleveland Airport can support
growth in a stronger economy.

Mr. Neidl also cites the reasons why he is not optimistic on the
industry in the short-term:

     -- The disappointing pace of economic recovery during the
summer, and no clear direction yet as to when the full recovery
will come

     -- General stock market weakness and continuing large
institutional sellers

     -- The slowdown in the industry recovery as reflected in
the continuing weak traffic and yield numbers

     -- Continuing high oil prices at around $30 barrel

     -- The threat of conflict in the Middle East and its
possible effect on travel and oil prices

     -- Additional costs and inconvenience on the traveling
public of beefed-up security procedures continue to affect
operations

     -- A certain segment of the traveling public's continuing
fear of flying due to terrorism

     -- The threat of a major industry player, UAL Corp., going
bankrupt, and its possible effect on the rest of the industry

     -- The continuing uncertainty and increased costs of
insurance

     -- The normally slow fall seasonal weakness of airline
travel and stock prices will also probably have a continuing
negative effect on stock prices.

Blaylock's ratings system consists of "buy," "hold" and "sell"
recommendations.  Investment banking stocks have a "not rated"
designation. Institutional investors interested in receiving
more information should contact Mr. Neidl at 212/715-6627 --
rneidl@blaylocklp.com   Journalists interested in receiving
copies of the research reports should contact Dao Tran at
dtran@starkmanassociates.com  

Based in New York, Blaylock & Partners, L.P., has been ranked by
Black Enterprise magazine as the number one minority-owned
investment banking firm for 1999 and 2000.  The firm has co-
managed four of the largest most recent IPOs - Travelers
Property Casualty Corp., Prudential Financial, Inc., Kraft Foods
Inc., and Agere Systems Inc.  Blaylock & Partners is a member of
the NASD and SIPC.

Blaylock & Partners, L.P., is a member of the National
Association of Securities Dealers, CRD number 35669.

Continental Airlines' 8% bonds due 2005 (CAL05USR1) are trading
at 94.281 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CAL05USR1for  
real-time bond pricing.


COOKER RESTAURANT: Chapter 11 Bankruptcy Plan is Confirmed
----------------------------------------------------------
The Cooker Restaurant Corporation's (OTC Bulletin Board: CGRT)
plan of reorganization was approved by the Federal Court in
Columbus, Ohio on Wednesday, September 11, 2002.

CRC entered Chapter 11 in May of 2001 with a total debt of $85
million. The new Company has debt of $34 million.  The Company
owns and operates 35 restaurants in Tennessee (Nashville &
Murfreesboro - 7), in Ohio (Cleveland - 7, Columbus - 5,
Cincinnati - 3, Dayton - 2 & Toledo- 2) and in Michigan (Detroit
- 6 & Ann Arbor - 1), in Virginia (Chesapeake 1) and in Florida
(Orlando - 1).  The Company also has raised $4 million in new
equity capital, including a large infusion from River Capital
Partners, Atlanta, Georgia.

The Cooker specializes in recipes made from scratch and serves
lunch and dinner daily.  The Cooker menu features innovative
recipes for traditional products like meatloaf and pot roast,
along with a variety of sandwiches, salads, fish, steaks,
appetizers and desserts.

The Cooker has over 2800 employees in the core markets of
Tennessee, Ohio and Michigan.

Henry Hillenmeyer, Chairman & CEO, notes, "Our emergence from
Chapter 11 allows us to build on the great and already
established Cooker reputation for delicious home-styled foods at
very moderate prices.  Our team of managers and employees are
totally customer focused.  We encourage everyone to come on by
The Cooker ... where everything's in great taste!"

Dan Clay, COO, offers, "We are very grateful to all of the
managers and crew members who have worked so hard over the past
16 months to improve upon our made-from-scratch tradition.  We
remain committed to Cooker's original vision of home-styled
foods in a comfortable setting with fast friendly service, all
backed by our 100% satisfaction guarantee."

The Cooker Restaurant Corporation is headquartered in Nashville,
Tennessee, under the same roof as the original Cooker
Restaurant.


CORTECH: Fails to Fulfill Nasdaq Continued Listing Requirements
---------------------------------------------------------------
Cortech Inc., (NASDAQ: CRTQ) received a Nasdaq Staff
Determination on September 24, 2002 indicating that the Company
fails to comply with the Minimum Market Value of Publicly Held
Shares requirement for continued listing set forth in
Marketplace Rule 4450(e)(1), and that its securities are,
therefore, subject to delisting from The Nasdaq National Market.

Cortech has applied to transfer its securities to The Nasdaq
SmallCap Market. The initiation of the delisting proceedings
will be stayed pending the Nasdaq Staff's review of the
Company's transfer application. While the Company believes it
meets the current requirements for inclusion on The Nasdaq
SmallCap Market, there can be no assurance that the Nasdaq Staff
will approve the transfer application.

Cortech has 3,616,380 shares of common stock outstanding.


DELTA AIRLINES: Blaylock Kicks-Off Coverage with "Hold" Rating
--------------------------------------------------------------
Blaylock & Partners' airlines and transportation analyst Ray
Neidl has initiated coverage of Delta Airlines, Inc. (NYSE: DAL)
with "hold" rating.  Mr. Neidl delayed initiating coverage of
the airline until he had a better sense of when a recovery will
occur, which he believes will not be until 2Q03 at the earliest.

In his equity reports, Delta Airlines should rebound once the
economy recovers.  The airline has enough liquidity to carry
them through to next year.  Reasons for Mr. Neidl's "hold"
recommendations include:

     -- DAL -- EBITDA is expected to increase in 2002 to $369
million and in 2003 to $1.2 billion (before CAPEX).  Delta's
code-sharing and marketing agreements with Northwest and
Continental are expected to increase its revenues.

Mr. Neidl also cites the reasons why he is not optimistic on the
industry in the short-term:

     -- The disappointing pace of economic recovery during the
summer, and no clear direction yet as to when the full recovery
will come

     -- General stock market weakness and continuing large
institutional sellers

     -- The slowdown in the industry recovery as reflected in
the continuing weak traffic and yield numbers

     -- Continuing high oil prices at around $30 barrel

     -- The threat of conflict in the Middle East and its
possible effect on travel and oil prices

     -- Additional costs and inconvenience on the traveling
public of beefed-up security procedures continue to affect
operations

     -- A certain segment of the traveling public's continuing
fear of flying due to terrorism

     -- The threat of a major industry player, UAL Corp., going
bankrupt, and its possible effect on the rest of the industry

     - The continuing uncertainty and increased costs of
insurance

     - The normally slow fall seasonal weakness of airline
travel and stock prices will also probably have a continuing
negative effect on stock prices

Blaylock's ratings system consists of "buy," "hold" and "sell"
recommendations.  Investment banking stocks have a "not rated"
designation. Institutional investors interested in receiving
more information should contact Mr. Neidl at 212/715-6627 --
rneidl@blaylocklp.com   Journalists interested in receiving
copies of the research reports should contact Dao Tran at
dtran@starkmanassociates.com

Based in New York, Blaylock & Partners, L.P., has been ranked by
Black Enterprise magazine as the number one minority-owned
investment banking firm for 1999 and 2000.  The firm has co-
managed four of the largest most recent IPOs - Travelers
Property Casualty Corp., Prudential Financial, Inc., Kraft Foods
Inc., and Agere Systems Inc.  Blaylock & Partners is a member of
the NASD and SIPC.

Blaylock & Partners, L.P. is a member of the National
Association of Securities Dealers, CRD number 35669.


DIVINE INC: Expects to Close Merger Transaction with Viant Today
----------------------------------------------------------------
Viant Corporation (Nasdaq: VIAN), a provider of digital business
solutions, and divine, inc. (Nasdaq: DVIN), a leading provider
of solutions for the extended enterprise, announced that the per
share cash distribution to be paid in connection with Viant's
pending merger with divine will be $1.4625, assuming that the
merger closes on September 27, 2002, as is currently anticipated
by the parties.  The aggregate cash distribution payable to each
Viant stockholder will be rounded to the nearest whole cent.

If the merger closes on September 27 as anticipated, the payment
date for the cash distribution is expected to be October 3,
2002, and the distribution will be paid to all Viant
stockholders of record as of September 27, 2002.  If the closing
of the merger is delayed, Viant will establish new record and
payment dates for the cash distribution.  If the merger does not
close, the cash distribution will not be paid.

The final per share stock consideration to be paid in connection
with the pending merger, assuming that the merger closes on
September 27, will be available on Viant's toll-free number, 877
842-6824 (outside the U.S.: 617 531-3606) following the close of
business on September 25, 2002.

Viant, a professional services organization providing digital
business solutions, applies industry insight and technology
understanding to help clients leverage assets for better
business performance.  Founded in 1996, Viant employs
professionals from the creative, technology and strategy
disciplines and maintains offices in Boston, Los Angeles and New
York.  More information about Viant can be found at
http://www.viant.com  

divine, inc., (Nasdaq: DVIN) is focused on extended enterprise
solutions. Through professional services, software services and
managed services, divine extends business systems beyond the
edge of the enterprise throughout the entire value chain,
including suppliers, partners and customers. divine offers
single-point accountability for end-to-end solutions that
enhance profitability through increased revenue, productivity,
and customer loyalty. The company provides expertise in
collaboration, interaction, and knowledge solutions that
enlighten, empower and extend enterprise systems. Founded in
1999, divine focuses on Global 5000 and high-growth middle
market firms, government agencies, and educational institutions,
and currently serves over 20,000 customers. For more
information, visit the company's Web site at
http://www.divine.com  

divine, inc.'s June 30, 2002 balance sheet shows that its total
current liabilities exceeds total current assets by about $50
million.


D.R. HORTON: Fitch Assigns Initial BB+ Senior Unsec. Debt Rating
----------------------------------------------------------------
Fitch Ratings initiates coverage of D.R. Horton, Inc. Fitch
assigns a 'BB+' rating to the senior unsecured debt. The rating
applies to approximately $1.87 billion in outstanding senior
notes as well as the company's $805 million revolving credit
agreement. A rating of 'BB-' has been assigned to the company's
outstanding $495 million senior subordinated notes. The Rating
Outlook is Stable.

Ratings for DHI are based on the company's above average growth
during the recent economic expansion, execution of its business
model, steady capital structure and geographic and product line
diversity. The company has been an active consolidator in the
homebuilding industry which has kept debt levels a bit higher
than its peers. But management has also exhibited an ability to
quickly and successfully integrate its many acquisitions. The
company is currently digesting its largest acquisition (Schuler
Homes) and is unlikely to make additional acquisitions over the
coming twelve months.

Risk factors include the inherent (although somewhat tempered)
cyclicality of the homebuilding industry. The ratings also
manifest the company's aggressive, yet controlled growth
strategy, moderate bias towards owned as opposed to optioned
land and its relatively heavy speculative building activity
(which has lessened of late).

The company has expanded EBITDA margins over the past several
years on healthy price increases, volume improvements and steady
operating expense ratios and has produced record levels of home
closings, orders and backlog in excess of expectations for this
unprecedented lengthy upswing in the housing cycle. EBITDA
margins have increased from 9.5% in 1997 to 12.6% in 2001 and
are 11.9% currently, including Schuler Homes which was acquired
in February of 2002. Although DHI has benefited from strong
economic conditions, a degree of margin enhancement is also
attributable to broadened new product offerings. In addition,
margins have benefited from purchasing, access to capital and
other scale economies that have been captured by the large
national homebuilders in relation to smaller builders. These
economies, greater geographic diversification (than in the
past), consistency of performance over an extended period of
time, low cost operating structure and a return-on-capital focus
provide the framework to soften the margin impact of declining
market conditions when they occur. During the past five years
acquisitions have accounted for half of DHI's growth. That
pattern is expected to continue in the future.

DHI's inventory consistently has been 1.6x to 1.8x homebuilder
debt. The company's inventory turns are a bit low relative to
its peers, reflecting some bias towards owned lots. As of
6/30/02 57.1% of its 140,054 lot supply was owned with the
balance controlled through options. Total lots owned and
controlled represent a 4.5 year supply based on current
production rates.

Debt-to-capital pretty consistently declined from 61.0% at the
end of 1998 to 56.0% at present. DHI's debt-to-EBITDA remains
somewhat high relative to its peers. However, absent major
acquisitions and given high cash flow trends, DHI's leverage
ratios are likely to decline.

DHI maintains an $805 million revolving credit facility of which
$550 million were available at the end of the second quarter.
The revolving credit agreement matures in January 2006. The
company has irregularly purchased moderate amounts of its stock
in the past. DHI has $150 million in long term debt maturing in
2004 and $200 million maturing in 2005.


DYNEGY: S&P Says Accounting Fine Will Not Affect Credit Profile
---------------------------------------------------------------
Standard & Poor's Ratings Services said that Dynegy Inc.'s
(B+/Watch Neg/--) agreement to pay $3 million in fines related
to its accounting and financial reporting practices will not
affect the firm's credit profile. Although the fines are a cash
outlay, the amount is not material.  

Dynegy Holdings Inc.'s 8.75% bonds due 2012 (DYN12USR1),
DebtTraders reports, are trading at 32 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=DYN12USR1for  
real-time bond pricing.


ENRON CORP: Goldendale Asks Court to Appoint NEPCO Examiner
-----------------------------------------------------------
Goldendale Energy Inc., an affiliate of Calpine Corporation,
asks the Court to direct the appointment of an examiner pursuant
to Sections 105 and 1104(c) of the Bankruptcy Code for the
estate of National Energy Production Corporation.

Martin G. Bunin, Esq., at Thelen, Reid & Priest LLP, in New
York, reminds the Court that NEPCO commenced its Chapter 11 case
on May 20, 2002.  It was procedurally consolidated for
administrative purposes with the Chapter 11 cases of Enron Corp.
et al.  Three other affiliates of Enron filed Chapter 11
petitions on May 20, 2002:

    -- NEPCO Power Procurement Company,
    -- NEPCO Services International Inc., and
    -- Enron Power & Industrial Construction Company

According to Mr. Bunin, NEPCO is primarily engaged in the
business of lump sum engineering, procurement construction of
electrical power generation stations in North America.

NEPCO continues to operate its business and manage its
properties as a debtor in possession pursuant to Sections
1107(a) and 1108 of the Bankruptcy Code.

In March 2002, Mr. Bunin informs the Court that GEI commenced an
arbitration proceeding in the State of Washington against NEPCO.
GEI seeks to arbitrate a dispute arising from an engineering,
procurement and construction contract dated February 13, 2001
pursuant to which NEPCO, as contractor, agreed to design and
construct a power plant located in Goldendale, Washington for
GEI, as owner.  In April 2002, NEPCO and GEI executed an
agreement to arbitrate the dispute.

GEI seeks to recover $39,619,036 in the arbitration, consisting
of:

    -- amounts paid to NEPCO that NEPCO was required to pay to
       subcontractors, suppliers and others, but failed to pay,
       and

    -- overpayments by GEI to NEPCO.

Mr. Bunin tells Judge Gonzalez that while NEPCO acknowledges
that it was overpaid, "it disagrees as to the amount and has
refused to make any payments to GEI".

Mr. Bunin also notes that over $39,000,000 of unsecured claims
is listed against the NEPCO Debtors and yet GEI's claim does not
appear on the List of Creditors Holding 20 Largest Unsecured
Claims against NEPCO.

NEPCO Chief Executive Officer G. Brian Stanley, in his
Affidavit, admits that "more than $360,000,000 in payments to
the NEPCO Debtors, made by customers pursuant to the
[engineering, procurement and construction contracts] were
transferred to Enron Corp., as a result of cash sweeps under the
centralized cash management system."  These cash sweeps occurred
shortly before the filing of Enron Corp.'s Chapter 11 petition
on December 2, 2001.  Together with the other effects of Enron
Corp.'s loss of credit rating and Chapter 11 filing, "the loss
of these substantial funds through the centralized cash sweep .
. . caused incurable events of defaults under the [engineering,
procurement and construction contracts]."  These defaults made
it "increasingly difficult for the NEPCO Debtors to continue
business operations" and resulted in their chapter 11 filings.

Based on the Stanley Affidavit, GEI contends that an examiner
should be appointed for NEPCO pursuant to Section 1104(c) of the
Bankruptcy Code to investigate the admitted prepetition cash
sweeps by Enron Corp., of more than $360,000,000 from NEPCO
and/or the NEPCO Debtors and the return by Enron Corp. to NEPCO
and/or the other NEPCO Debtors of those funds for the benefit of
the creditors of NEPCO and/or the other NEPCO Debtors.

GEI asserts that an examiner should, at a minimum, investigate:

  (i) when and in what amounts Enron made the cash sweeps
      totaling more than $360,000,000 shortly before Enron Corp.
      filed its Chapter 11 petition,

(ii) the sources of the NEPCO cash that was swept,

(iii) the disposition of the cash by Enron Corp., including but
      not limited to where it was deposited and the details of
      its use, if any,

(iv) whether any fraud, dishonesty, incompetence, misconduct,
      mismanagement or irregularity by NEPCO or Enron Corp.
      occurred in connection with the cash sweeps or any use of
      the cash,

  (v) whether or not the swept cash can be traced,

(vi) whether or not the factual and legal predicates exist for
      the imposition of a constructive trust on the more than
      $360,000,000 swept, and

(vii) how funds returned by Enron Corp. to NEPCO should be
      distributed to the creditors of NEPCO.

Section 1104(c) of the Bankruptcy Code provides that:

  "On request of a party in interest or the United States
  trustee, and after notice and a hearing, the court will order
  the appointment of an examiner to conduct such an
  investigation of the debtor as is appropriate, including an
  investigation of any allegations of fraud, dishonesty,
  incompetence, misconduct, mismanagement, or irregularity in
  the management of the affairs of the debtor of or by current
  or former management of the debtor, if --

    (1) such appointment is in the interests of creditors, any
        equity security holders, and other interests of the
        estate; or

    (2) the debtor's fixed, liquidated, unsecured debts, other
        than debts for goods, services, or taxes, or owing to an
        insider, exceed $5,000,000.

Mr. Bunin clarifies that GEI's fixed, liquidated, unsecured
claim against NEPCO of $39,619036 for the return of overpayments
is not a claim for goods, services, taxes or amounts owing to an
insider and far exceeds the $5,000,000 statutory floor set forth
in Section 1104(c)(2) of the Bankruptcy Code.  GEI believes that
there are other fixed, liquidated, unsecured claims against
NEPCO, not for goods, services, taxes or amounts owing to
insiders, that individually or in the aggregate exceed
$5,000,000.  Mr. Bunin notes that:

  -- J.P. Morgan Chase Bank has an unsecured claim against NEPCO
     for $140,000,000 arising from the draw down of letters of
     credit issued by J.P. Morgan Chase Bank on behalf of NEPCO;
     and

  -- Westdeutsche Landesbank Girozentrale has an unsecured claim
     against NEPCO for $19,954,000 arising from the draw down of
     a letter of credit it issued for the benefit of TPS McAdams
     LLC on behalf of NEPCO and NEPCO Power. (This claim is the
     subject of adversary proceeding no. 02-02009 pending in the
     Enron Corp. Chapter 11 cases and entitled "Westdeutsche
     Landesbank Girozentrale v. Enron Corp.")

Accordingly, Mr. Bunin asserts, the appointment of an examiner
for the estate of NEPCO is mandatory under Section 1104(c)(2) of
the Bankruptcy Code.

GEI further contends that the appointment of an examiner for the
estate of NEPCO warranted because NEPCO:

    -- has, in effect, been in liquidation since the admitted
       $360,000,000 in cash sweeps occurred prior to Enron
       Corp.'s Petition Date,

    -- has no current construction projects underway,

    -- is proposing to sell substantially all its remaining
       assets, and

    -- has insufficient staff to investigate and recover the
       $360,000,000 swept by Enron Corp.

Moreover, Mr. Bunin continues, NEPCO is controlled by its
parent, Enron Corp.:

    -- the sweeper of the cash,
    -- the sole beneficiary of the sweeps, and
    -- the entity which, by reason of the cash sweeps, forced
       NEPCO out of business.

"Enron Corp. can't be relied on to investigate this matter and
return the funds to NEPCO," Mr. Bunin says. (Enron Bankruptcy
News, Issue No. 43; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


EXIDE TECHNOLOGIES: Court Extends Plan Exclusivity Until Dec. 11
----------------------------------------------------------------
Exide Technologies and its debtor-affiliates obtained extension
of its Exclusive Periods. The U.S. Bankruptcy Court for the
District of Delaware grants the Debtors the exclusive right to
file and propose a Chapter 11 plan until December 11, 2002, and
the exclusive right to solicit acceptances of that plan from
their creditors until February 10, 2003.

Exide Technologies is the world's largest industrial and
transportation battery producer and recycler, with operations in
89 countries. The Debtors filed for Chapter 11 reorganization on
April 14, 2002.


FFP MARKETING: Accepting Sealed Bids for Non-Core Assets
--------------------------------------------------------
FFP Marketing, which operates 424 convenience stores, truck
stops and gas-only fuel concessions in 11 states, is selling 96
service stations, 65 c-stores and five truck stops, in a sealed
bid offering National Real Estate Clearinghouse scheduled for
December 5, 2002, F&D Reports said.

Alimentation Couche-Tard, a Canadian convenience store operator,
is reported to be eyeing on the units.

FFP Marketing owns 424 convenience stores, truck stops, and
retail fuel concessions at Company-operated and independently
operated stores in Texas and 10 other central, southern, and
southwestern states.  The Company also sells motor fuel on a
wholesale basis, operates a fuel processing plant and terminal,
and sells money orders under the name Financial Express Money
Orders.  Its common stock is listed under the symbol "FMM" on
the American Stock Exchange.

                          *   *   *

As reported in the June 12, 2002 issue of the Troubled Company
Reporter, FFP Marketing, at year end 2001 and the end of the
first quarter of 2002, was not in compliance with a financial
covenant contained in the loan agreements for its long-term
notes payable.  The Company has made all payments required under
its loan documents and is currently seeking to obtain, and
expects to obtain, a waiver of such non-compliance in the next
two weeks.  At that time the Company anticipates filing its Form
10-K annual report for 2001 and its Form 10-Q quarterly report
for the first quarter of 2002.  The failure to meet the above
financial covenant under its long-term notes payable also causes
the Company to be in non-compliance under its revolving credit
facility, although the Company is in compliance with its
financial covenant under the loan agreement for that facility.  
The Company anticipates that funding will be continued under its
revolver until the waiver is obtained.  There can be no
assurance at this time, however, that the waivers will be
obtained.

  
FLAG TELECOM: Restructures Lucent, Ciena & Other Contracts
----------------------------------------------------------
FLAG Telecom Holdings Limited and its debtor-affiliates seek the
Court's authority certain amended executory contracts with KT
Corporation and Reach Networks Hong Kong Ltd., Ciena
Communications Inc., Lucent Technologies, and Tyco Contracting
Ltd.

At the same time, the Debtors ask the Court to approve the
related settlement agreements with these major creditors.

Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher LLP, explains
that these creditor compromises reflect the results of the
Debtors' efforts to:

    -- restructure their major payment obligations to certain
       creditors,

    -- resolve significant claims asserted in these cases, and

    -- avoid large up-front cure costs in connection with the
       assumption of certain critical executory contracts.

Approval of the creditor compromises, Mr. Reilly asserts,
represents a key component to the feasibility of the Plan,
because it will allow the Debtors to continue to maintain
important contractual relationships and to receive services and
products important to their business operations going-forward
while reducing the amount of creditor claims, stretching out
payment schedules, and generally reducing future operational
costs.

                          The Agreements

Specifically, the Debtors ask the Court to approve these four
creditor compromises:

(1) Amendment and Assumption of Agreements with KT Corp.,
    formerly known as Korea Telecom

    The Debtors seek the Court's authority to amend and assume
    certain contracts with KT Corp. that pertain to the Debtors'
    use of Korean landing stations that represent components of
    both the FLAG North Asian Loop and FLAG Europe-Asia Network
    submarine fiber optic cable systems.

    With respect to the FNAL system, the Debtors seek the
    Court's authority to assume the FNAL Landing Station
    Agreement among FLAG Asia Limited, KT Corp. and REACH
    NETWORKS HONG KONG LTD., as successor-in-interest to Level 3
    Communications Holdings (Korea) Ltd., dated May 28, 2001,
    pursuant to the Letter Amendment to Landing Station
    Agreement among FASL, KT, and REACH, dated September 13,
    2002.  The FNAL Letter Amendment amends and restates the
    FNAL Landing Station Agreement and reschedules certain
    payment obligations of FASL to KT with respect to the
    construction of the Landing Station in Busan, Korea
    amounting to $3,012,897.

    Pursuant to an invoice issued by KT on April 12, 2002, FASL
    owes KT $2,875,000 for prepetition construction services
    performed by KT pursuant to the FNAL Landing Station
    Agreement.  In addition, FASL owes KT $137,897 for
    additional prepetition work requested of KT during the
    construction of the FNAL Landing Station.

    Pursuant to the FNAL Letter Amendment, FASL, KT and REACH
    have agreed to make the remaining payments in five monthly
    installments of $602,580, free of interest.  The first two
    FNAL monthly payments are due on September 30, 2002, and the
    remaining three FNAL monthly payments thereafter will be due
    on the last business day of each of October 2002, November
    2002, and December 2002.

    The FNAL Letter Amendment also refers to an Operation and
    Maintenance Escrow Agreement between Reach and FASL, which
    requires FASL to fund an escrow account to cover certain
    expenses related to the FNAL Landing Station.

    The FNAL Letter Amendment provides that Reach agrees to step
    in and apply the monies in the escrow account to make p
    payment of any of the FNAL monthly payments under the
    amended FNAL Landing Station Agreement, upon non-payment by
    FASL, within 10 business days of receiving a written notice
    of any payment default from KT.  The FNAL Letter Amendment
    also entitles KT to suspend any services at the FNAL Landing
    Station in the event that:

     (a) FASL defaults on any of the FNAL monthly payments,

     (b) Reach has not exercised its step in rights under the
         Escrow Agreement, and

     (c) the FNAL monthly payments have not been made in full
         by January 31, 2003.

    FEA Landing Party Agreement; FEA Access Charges Agreement
    ---------------------------------------------------------

    The Debtors seek the Court's authority to assume, as
    amended, a Landing Party Agreement, dated December 14, 1994
    between Flag Limited and KT and an Access Charges Letter
    Agreement, dated April 4, 2001, between FL and KT pursuant
    to the FEA Amendment Letter, dated September 13, 2002,
    between FL and KT.

    The FEA Letter Amendment reschedules certain payments,
    totaling $1,182,041, payable by FL to KT under the FEA
    Landing Party Agreement and the FEA Access Charges
    Agreement.

    Pursuant to the FEA Landing Party Agreement, KT agreed to
    construct the FEA Landing Station in exchange for certain
    payments from FL.

    Under an invoice issued by KT to FL on August 25, 2000, FL
    owes KT $854,787, which derives from certain charges related
    to FL's obligations to pay capital and other costs related
    to the FEA Landing Station.  In addition, pursuant to
    invoices issued by KT on November 15, 2000, February 10,
    2001, May 25, 2001, December 17, 2001, and March 18, 2002,
    FL owes KT $327,254 for operation and maintenance fees
    related to the FEA Landing Station.

    The FEA Letter Amendment reschedules the payment of these
    obligations totaling $1,182,041 so that they are payable in
    five monthly installments of $236,408, free of interest and
    other charges.

    The first two FEA monthly payments will be due on September
    30, 2002 and the remaining three FEA monthly payments
    thereafter will be due on the last business day of each
    month following September 2002. Full payment of the five
    monthly payments will be deemed to discharge FL from all and
    any obligations it may have under the Original Agreements
    with respect to the FEA Original Payments and the related
    original payment schedule.

    Finally, the FEA Letter Amendment provides that in the event
    that FL defaults in any payment on any of the FEA Monthly
    Payments and the FEA Monthly Payments have not been made in
    full by January 31, 2003, KT has the right to suspend its
    services with respect to the FEA Access Charges Agreement.

(2) Amendment and Assumption of Agreement with Ciena
    Communications, Inc.

    The Debtors seek the Court's authority to amend and assume
    the Agreement of Sale By and Between Ciena Communications,
    Inc. and FASL dated May 10, 2001, as amended to date, and as
    amended pursuant to Amendment No. 3 to Agreement of Sale By
    and Between Ciena and FASL, dated as of September 13, 2002.

    The Ciena Amendment amends and restates the Ciena Agreement
    to clarify the purchase and sale obligations thereunder and
    to define further the maintenance relationship between the
    parties intended to support fault diagnosis, resolution and
    repair of equipment purchased by FASL from Ciena pursuant to
    the Agreement.

    Pursuant to the Ciena Agreement, Ciena agreed, among other
    things, to sell and ship to FASL certain equipment and
    software used in, among other things, undersea landing
    stations in the FNAL system.  Ciena also agreed to provide
    certain installation, training, and maintenance services
    related to the equipment sold to FASL.  In consideration,
    FASL agreed to purchase a defined amount of equipment,
    software and related services pursuant to purchase orders
    submitted to Ciena.

    Ciena has asserted claims, based on products and services
    provided by Ciena to FASL through June 30, 2002 under the
    Ciena Agreement totaling $12,992,000.  In consideration for
    the compromise of these claims, FASL has agreed to assume
    the Ciena Agreement, as amended by the Ciena Amendment, and
    to distribute to Ciena pursuant to the Plan 1.58% of the
    primary common stock of reorganized FLAG Telecom Holdings
    Limited issued on the effective date of the Plan.

    In addition, the Debtors have agreed to pay Ciena $1,020,000
    on the effective date of the Plan and to issue to Ciena an
    unsecured note issued by Reorganized Holdco in the amount of
    $1,000,000, with an interest rate of 7.0% (payable monthly
    in arrears), payable in 18 monthly installments of principal
    and interest beginning 30 days from the Effective Date.

    Finally, the Debtors have agreed to waive and release any
    preference actions of their estates assertable against Ciena
    and to exchange general mutual releases with Ciena.

(3) Settlement Agreement with Lucent and Assumption of Lucent
    Contract

    The Debtors also the Court to approve their settlement
    agreement with Lucent Technologies, Inc. and Lucent
    Technologies BV, dated September 13, 2002, that calls for,
    among other things, the Debtors' agreement to become
    additional parties to the FNS Point of Presence Frame
    Agreement, dated August 20, 2001 by and between Lucent BV
    and FLAG Telecom Ireland Network Limited, a non-debtor
    affiliate of the Debtors.

    The Lucent Contract provides the overall framework for the
    supply by Lucent BV and its affiliates of telecommunications
    hardware, equipment and parts thereof, software and other
    licensed materials and related services to FTINL and its
    affiliates for use in operation of various points-of-
    presence within the FLAG Telecom global network, including
    those forming part of the FNAL cable system.

    Lucent Technologies, on behalf of Lucent BV and its other
    affiliates that supplied the Debtors under the Lucent
    Contract, asserted a claim against the Debtors for
    $5,759,471, which includes all amounts through July 31,
    2002, owing under the Lucent Contract.

    The Debtors have disputed the claim on the basis that, among
    other things, it is not properly assertable against the
    Debtors (or payable in full under the Plan) as it arises
    under the Lucent Contract with FTINL, a non-Debtor.  Lucent
    asserts that the Lucent Contract with FTINL provided only a
    framework for the relationship between Lucent and its
    affiliates and the Debtors and their affiliates and that in
    actual practice, the Purchase Orders created contractual
    relationships with various Debtors.

    The Debtors believe that settling the claim with Lucent as
    part of the bankruptcy process benefits their estates
    because it allows them to consensually settle this claim
    against an affiliate, which will further the implementation
    of the Plan by allowing the Debtors and FTINL to continue
    their operations at a reduced cost.

    The Debtors have agreed that the claim will be allowed for
    $5,420,000.  On account of the claim, a non-Debtor paid
    Lucent, and Lucent acknowledged receipt of, $1,000,000 in
    June 2002, in relation to amounts due from the non-Debtor
    under purchase orders placed by it, pursuant to the Lucent
    Contract.

    In addition, the Debtors will pay to Lucent on the Effective
    Date an additional cash sum of $1,000,000.  The Debtors will
    also issue to Lucent a $3,420,000 note.  The Lucent Note
    will be payable in 12 monthly installments each for
    $285,000, commencing on the 13th day subsequent to the
    Plan's Effective Date.

    Pursuant to the Lucent Settlement Agreement, the Debtors
    have also agreed to assume the Lucent Contract and, thus,
    become additional parties thereto, and Lucent has reaffirmed
    its obligations to honor all warranty obligations under the
    Lucent Contract.  Lucent has also agreed to file a
    Stipulation withdrawing its claim.

    Finally, Lucent and the Debtors have agreed to negotiate in
    good faith a support agreement pursuant to which Lucent will
    provide certain support services described in the Lucent
    Settlement Agreement for a fixed price capped at $18,000 per
    calendar month for a period of one year commencing on the
    Effective Date.

(4) Settlement Agreement and Release with Tyco Contracting Ltd.

    The Debtors ask the Court to approve the Settlement
    Agreement and Release by and among Flag Atlantic Limited,
    FTHL and Tyco Contracting Ltd., dated September 13, 2002.  
    FLAG Atlantic and Tyco are parties to a Marine Maintenance
    Service Agreement for the Flag Atlantic-1 Cable Network,
    dated June 1, 2001.

    Since the Debtors' Petition Dates, various disputes have
    arisen among FAL and Tyco as to their respective rights,
    duties, obligations and liabilities to one another pursuant
    to the Tyco Maintenance Agreement.  Tyco has asserted claims
    against the Debtors.

    The Debtors have disputed the existence, amount, extent and
    priority of the Tyco Claims.  The Debtors have negotiated a
    compromise of the Tyco Claims pursuant to the Tyco
    Settlement Agreement that calls for the:

     (a) affirmation, by assumption, of the Tyco Maintenance
         Agreement by FAL and entry into the Tyco Maintenance
         Agreement by FTHL, as modified as set forth in the Tyco
         Settlement Agreement,

     (b) certain payments by the Debtors to Tyco,

     (c) the exchange of general mutual releases between FAL,
         FTHL and Tyco, and

     (d) the assurance of the continued performance of the
         Repairs by Tyco for the benefit of FAL and FTHL.

    Pursuant to the Tyco Maintenance Agreement, Tyco has agreed
    to provide a program of maintenance services on a 24 hours a
    day, 365 days a year basis for the Debtors' undersea fiber
    optic cable systems.  Tyco, thus, provides critical marine
    maintenance cable ships for the repair of defaults on the
    system.

    The Tyco Settlement Agreement calls specifically for cash
    payments to be made to Tyco in the amount of:

     (a) $1,187, and

     (b) payments required in accordance with certain provisions
         of the Settlement Agreement amending the obligations
         under the Tyco Maintenance Agreement.  The Debtors have
         agreed that Tyco will be granted an Allowed
         Administrative Expense Claim in an amount equal to that
         portion of the Total Cash Consideration that is not
         paid when such amount is due.

    The Tyco Settlement Agreement also calls for FAL's
    assumption of and FTHL's entry into the Tyco Maintenance
    Agreement, as amended by the Tyco Settlement Agreement, to
    modify certain of FAL's payment obligations to Tyco and to
    suspend four months of fees otherwise due to Tyco during the
    bankruptcy cases.  In addition, pursuant to the Tyco
    Settlement Agreement, certain other obligations arising
    under the Tyco Maintenance Agreement will be modified
    effective after the Effective Date as set forth in Amendment
    No. 1 to the Tyco Maintenance Agreement.

    The Amendment will result in a 30% reduction in fees payable
    to Tyco by the Debtors and a more flexible approach for the
    provision of important repair and maintenance services for
    the Debtors' undersea cable networks.  The Settlement
    Agreement provides further that if the Court does not
    approve the Settlement Agreement, then the Debtors will
    support an Allowed Administrative Expense Claim in favor of
    Tyco in an amount equal to the Annual Fee under the
    unamended Maintenance Agreement prorated from July 1, 2001
    through the date that of entry of the Confirmation Order,
    i.e. $19,904 per day. (Flag Telecom Bankruptcy News, Issue
    No. 15; Bankruptcy Creditors' Service, Inc., 609/392-0900)


FLAG TELECOM: S.D.N.Y. Court Confirms Plan of Reorganization
------------------------------------------------------------
FLAG Telecom Holdings Limited (OTC: FTHLQ), along with its group
companies, announced that the U.S. Bankruptcy Court for the
Southern District of New York has confirmed its Chapter 11 Plan
of Reorganization, less than six months after FLAG Telecom filed
for Chapter 11 protection. The Plan significantly reduces the
Company's debt levels, provides for FLAG Telecom's worldwide
business to emerge intact from Chapter 11 and will result in
creditors owning the equity of the reorganized Company. As a
result of this order, FLAG Telecom anticipates that the Plan of
Reorganization will become effective on or about October 7,
2002, at which point FLAG will emerge from Chapter 11.

              About the FLAG Telecom Group

The FLAG Telecom Group is a leading global network services
provider and independent carriers' carrier providing an
innovative range of products and services to the international
carrier community, ASPs and ISPs across an international network
platform designed to support the next generation of IP over
optical data networks. On April 12 and April 23, 2002, FLAG
Telecom Holdings Limited and certain of its subsidiaries filed
voluntary petitions for reorganization under Chapter 11 of the
United States Bankruptcy Code in the United States Bankruptcy
Court for the Southern District of New York. Also, FLAG Telecom
Holdings Limited and the other companies continue to operate
their businesses as Debtors In Possession under Chapter 11
protection. FLAG Telecom Holdings Limited and certain of its
Bermuda-registered subsidiaries - FLAG Limited, FLAG Atlantic
Limited and FLAG Asia Limited - filed parallel proceedings in
Bermuda to seek the appointment of provisional liquidators to
obtain a moratorium to preserve the companies from creditor
actions. Provisional liquidators were appointed and part of
their role is to oversee and liaise with the directors of the
companies in effecting a reorganization under Chapter 11. Recent
news releases and further information are on FLAG Telecom's Web
site at http://www.flagtelecom.com


GROUP TELECOM: CCAA Protection Extended to November 4, 2002
-----------------------------------------------------------
GT Group Telecom Inc., (TSX: GTG.B, GTG.A) has sought and
obtained, from the Ontario Superior Court of Justice, an order
granting it and its affiliates an extension of protection under
the Companies' Creditors Arrangement Act to November 4, 2002.
The purpose of the extension is to allow the Company additional
time to complete a review of all of its available alternatives.

Group Telecom continues to pursue a number of alternatives
including a restructuring. However, as part of its application,
the Company sought and obtained approval for a merger and
acquisition process that will be led jointly by its Special
Committee and the Monitor, PricewaterhouseCoopers. The Company
has put in place with its senior lenders a protocol to manage
the M&A process and that process has been implemented. Letters
that outline this protocol have been sent to all qualified
parties that have expressed interest in the M&A process.

In addition, the Court approved a key employee retention plan as
well as revised compensation arrangements for members of its
Board of Directors.

An extension of the U.S. preliminary injunction will be sought
from the U.S. Bankruptcy Court later this morning. If obtained,
a further release will be issued at that time.

The Company currently has sufficient cash on hand to permit it
to continue to carry on its business in the ordinary course
during the restructuring period.

Group Telecom is Canada's largest independent, facilities-based
telecommunications provider, with a national fibre-optic network
linked by 454,125 strand kilometres of fibre-optics, at March
31, 2002. Group Telecom's unique backbone architecture is built
with technologies such as Gigabit Ethernet for delivery of
enhanced network performance and Synchronous Optical Network
(SONET) for the highest level of network reliability. Group
Telecom offers next-generation high-speed data, Internet,
application and voice services, delivering enhanced
communication solutions to Canadian businesses. Group Telecom
operates with local offices in 17 markets across nine provinces
in Canada. Group Telecom's national office is in Toronto.

For more information about Group Telecom, visit its Web site at
http://www.gt.ca


GROUP TELECOM: Wins Extension of US Court Protection to Nov. 12
---------------------------------------------------------------
GT Group Telecom (TSX: GTG.B, GTG.A) announced that the
preliminary injunction issued on July 29, 2002 by the United
States Bankruptcy Court in favor of it and its affiliates, has
been further extended from September 25, 2002 until November 12,
2002.

Group Telecom is Canada's largest independent, facilities-based
telecommunications provider, with a national fibre-optic network
linked by 454,125 strand kilometres of fibre-optics, at March
31, 2002. Group Telecom's unique backbone architecture is built
with technologies such as Gigabit Ethernet for delivery of
enhanced network performance and Synchronous Optical Network
(SONET) for the highest level of network reliability. Group
Telecom offers next-generation high-speed data, Internet,
application and voice services, delivering enhanced
communication solutions to Canadian businesses. Group Telecom
operates with local offices in 17 markets across nine provinces
in Canada. Group Telecom's national office is in Toronto.


HA-LO INDUSTRIES: Will Not Hire New Accountants in the Interim
--------------------------------------------------------------
HA-LO Industries, Inc., had previously engaged Arthur Andersen
LLP as its independent public accountant. In July 2002, HA-LO
was verbally informed by the engagement partner at Andersen that
Andersen could not continue to serve as HA-LO's independent
public accountant because of Andersen's business problems and
its inability to comply with the provisions of the applicable
securities rules and regulations. In addition, the engagement
partner informed HA-LO that Andersen was submitting a proof of
claim in HA-LO's pending bankruptcy case, which act also
precludes Andersen from continuing to serve as HA-LO's
independent public accountant under applicable law.

HA-LO does not intend to retain new independent accountants at
this time due to its current financial condition and status as a
company in bankruptcy. HA-LO cannot at this time project when it
might retain new independent accountants, if at all.

HA-LO does not at this time intend to restate its financial
results despite its prior intention to do so. As indicated
above, HA-LO currently does not intend to retain new independent
accountants, which would be necessary to complete an audit of
its financial statements and restate its financial results.

HA-LO earlier this year completed the sale of its business
division based in Troy, Michigan and all of the stock of its
wholly owned subsidiary HA-LO Canada, Inc. to The Beanstalk
Group for an aggregate of $10 million in cash and promissory
notes. The Michigan based business division had satellite
offices in Orlando, Florida and Norfolk, Virginia. HA-LO Canada
had offices in Toronto, Vancouver and Calgary. This sale was
approved by the Delaware Bankruptcy Court on January 16, 2002.

In August 2002, HA-LO engaged, subject to the approval of the
Bankruptcy Court, Lincoln Partners LLC to explore a potential
sale of the balance of HA-LO's business. The process is
currently in the early stages and no potential buyers have been
definitively identified.

On May 28, 2002, an Amended Consolidated Class Action Complaint
was filed in the United States District Court for the Northern
District of Illinois, Eastern Division, against various former
and current officers and directors of HA-LO, alleging that such
individuals violated (i) Section 10(b) of the Securities
Exchange Act of 1934, as amended and Rule 10b-5 promulgated
thereunder and (ii) Section 20(a) of the Exchange Act, and
requesting compensatory damages in an amount to be proven at
trial and related costs and expenses. On July 3, 2002, HA-LO and
the Official Committee of Unsecured Creditors filed a Verified
Complaint in the United States Bankruptcy Court for the Northern
District of Illinois, Eastern Division, against the plaintiffs
in the Class Action Suit, for (i) a preliminary and permanent
injunction against further prosecution of the Class Action Suit
and (ii) a declaratory judgment that any proceeds from any
director and officer insurance policy carried by HA-LO are the
sole and exclusive property of HA-LO's bankruptcy estate. The
plaintiffs in the Class Action Suit were scheduled to answer the
Injunction Complaint in the Bankruptcy Court on September 18,
2002.

On August 30, 2002, HA-LO filed a complaint against its former
Chief Executive Officer John R. Kelley in the United States
District Court for the Northern District of Illinois for breach
of the fiduciary duties of care and loyalty and for waste, in
connection with his role in HA-LO's acquisition of
Starbelly.com, Inc. in 2000 for $240 million in cash and stock.
Mr. Kelley is scheduled to answer on October 14, 2002.

Since filing bankruptcy on July 30, 2001, HA-LO has undertaken
various actions to improve its financial health, including
reductions in force and resultant closures of various office
locations. On August 1, 2001, HA-LO entered into a Revolving
Credit Agreement with LaSalle Bank National Association, which
has been subsequently amended and presently provides a credit
facility of $3 million reflecting its decreasing borrowing
needs. HA-LO is considering various types of actions to
facilitate its emergence from bankruptcy, including but not
limited to the sale of the company.

HA-LO remains a debtor, with two of its subsidiaries, Lee Wayne
Corporation and Starbelly.com, Inc., in three separate, although
jointly administered, Chapter 11 cases in case number 02 B
12059, and continues to work towards emerging from bankruptcy.
To date, although discussions have commenced between the Debtors
and the Official Committee of Unsecured Creditors regarding the
form and content of a plan or plans of reorganization, no plan
or plans of reorganization have been filed or confirmed by the
Bankruptcy Court. The parties have not yet agreed upon any terms
and conditions of any consensual plan. Even with the actions
taken above and the discussions to date, the holders of equity
interests in HA-LO remain unlikely to receive or retain anything
of value on account of their interests in HA-LO in the
bankruptcy.


HARDWOOD PROPERTIES: Confirms "Inactive Issuer" Status on TSX
-------------------------------------------------------------
Hardwood Properties Ltd., (TSX:HWP) confirms that it has been
designated as an "inactive issuer" by the TSX Venture Exchange.
Pursuant to the Exchange's Policy 2.6, the "inactive issuer"
status will not affect trading in Hardwood's common shares until
August 28, 2003. However, pursuant to Hardwood's previously
announced and approved plan for the voluntary liquidation and
dissolution of the Corporation, management may seek to
voluntarily de-list Hardwood's common shares from trading on the
Exchange subsequent to the Corporation's final cash
distribution.

Hardwood Properties Ltd., is a Calgary based real estate company
that specializes in the acquisition, re-construction, management
and sale of multi-family residential properties.


HORSEHEAD INDUSTRIES: Turns to Blackstone for Financial Advice
--------------------------------------------------------------
Horsehead Industries, Inc., has signed an agreement to retain
The Blackstone Group as financial advisor to assist the company
in formulating its plan to successfully emerge from Chapter 11
bankruptcy. The Blackstone Group, based in New York, New York,
is a leading advisor to companies in restructurings and
bankruptcies.

"The Blackstone Group has a tremendous amount of experience in
successfully handling the issues we are currently facing. They
are regarded as one of the most seasoned and experienced firms
on Wall Street in this field," said James Carpenter, Chief
Executive Officer for Horsehead. "We feel confident that with
their assistance Horsehead will be positioned as a very viable
company as we emerge from the current situation."

Blackstone will assist with negotiating Debtor in Possession
(DIP) financing, formulating continuing business and
reorganization plans, and plans for a successful exit from the
bankruptcy filing.

As these Court filing related plans are developed, Horsehead's
multi-state zinc production and zinc-waste recycling operations
continue. "Our operations continue to run 24 hours a day for
seven days a week. This is because of the work ethic of our
employees and the resolve of this company," said Mr. Carpenter.
"We continue to serve our customers, continue to provide the
steel industry with the United States Environmental Protection
Agency's Best Demonstrated Available Technology for
environmentally-sound recycling of hazardous zinc-containing
wastes, and continue to produce quality zinc products as the
largest zinc producer in the United States and the world's
foremost manufacturer of value-added zinc products including
zinc oxide, zinc dust, and zinc powder."

More information on The Blackstone Group can be found at
http://www.blackstone.com  

Horsehead Industries Inc. (Horsehead), has seven operations in
six states with primary operations in Monaca and Palmerton, PA,
making it the world leader in the recycled production of zinc.
Horsehead is comprised of two vertically integrated operating
companies. Zinc Corporation of America operates a state-of-the-
art, highly flexible electrothermic zinc refinery that is the
largest manufacturer in the world of value-added zinc products
and Prime Western zinc metal. Horsehead Resource Development
Company is the world leader in recycling zinc bearing hazardous
Electric Arc Furnace dust derived from the steel industry
through use of its proprietary technology designated "Best
Demonstrated Available Technology" by the EPA. Horsehead and its
predecessors have been technological leaders and innovators in
the zinc industry for more than 100 years.


INDYMAC MANUFACTURED: S&P Junks Rating on Class B-1 P-T Certs.
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on class
B-1 of IndyMac Manufactured Housing Contract Pass-Thru Trust
1998-2 to triple-'C'-minus from single-'B'-minus.

The lowered rating reflects the likelihood of investors
receiving timely interest, and the ultimate repayment of
original principal investment. Standard & Poor's expects Indymac
1998-2 to experience an outstanding liquidation loss interest
shortfall on the B-1 class in the near future.

Standard & Poor's defaulted Indymac 1998-2's class B-2
certificates in December 2001 based on an interest shortfall as
a result of writedowns on class B-2. Currently, interest on
class B-2 is only being paid on the reduced class balance, and
class B-2 deferred interest on the written-down portion is low
on the payment waterfall. As a result of high losses in the
transaction, deferred interest is not being paid. Once class B-2
is reduced to zero, class B-1 will begin to be written down,
likely resulting in a default on interest for class B-1.

Standard & Poor's will continue to monitor this transaction
closely.

                    Rating Lowered

         Indymac Manufactured Housing Contract
               Pass-Thru Trust 1998-2
         Manufactured housing contract pass-thru
               certs series 1998-2
  
                        Rating
         Class     To           From
         B-1       CCC-         B-


INNOVATIVE CLINICAL: Signs-Up Vitale Caturano as New Auditors
-------------------------------------------------------------
On September 18, 2002, the Board of Directors of Innovative  
Clinical Solutions, Ltd., engaged the services of Vitale,
Caturano & Company as its new independent auditors.  VCC will
audit the financial statements of the Company for the fiscal
year ending January 31, 2003.

Innovative Clinical Solutions, Ltd., headquartered in
Providence, Rhode Island, provides services that support the
needs of the pharmaceutical and managed care industries.

As reported in Troubled Company Reporter's August 13, 2002
edition, the Securities and Exchange Commission notified
Innovative Clinical Solutions that the SEC had been notified by
Arthur Andersen LLP, the Company's auditor of record, that
Arthur Andersen LLP is unable to perform future audit services
for the Company and, as a result its relationship with the
Company is effectively terminated.

The audit reports of Arthur Andersen LLP on the consolidated
financial statements of Innovative Clinical for the fiscal years
ended January 31, 2002 and 2001 contained a going concern
opinion explanatory paragraph. The Company has attempted to
obtain a letter from Arthur Andersen indicating  its concurrence
with the disclosure, however, Arthur Andersen LLP has closed its
Boston office, which had responsibility for the audit of
Innovative Clinical Solutions' financial statements and,
accordingly, the Company is unable to provide such a letter from
Arthur Andersen.


INNOVATIVE CLINICAL: Sells Wholly Owned Clinical Studies Unit
-------------------------------------------------------------
As previously reported, on February 7, 2002, Innovative Clinical
Solutions Ltd., sold its wholly  owned subsidiary, Clinical
Studies, Ltd., to Comprehensive Neuroscience, Inc., in exchange
for CNS common stock.  The sale was effected through the merger
of CSL with a subsidiary of CNS.

Subsequent to the Merger, a dispute arose between CNS and ICSL
involving CSL liabilities and post-closing adjustments to the
CNS stock escrows. On September 10, 2002, in connection with the  
settlement of the Gillheeney litigation described below, ICSL
and CNS entered into a Settlement  Agreement providing for
settlement of the Gillheeney litigation on the terms described
below and  mutual releases by the parties of all claims except
as may be asserted pursuant to the  indemnification and escrow
provisions of the Merger Agreement.  In addition, the provisions
of the Escrow Agreement entered into in connection with the
Merger were amended to provide that up to 2,330,278 of the
7,767,593 shares of common stock held in the Litigation Escrow
(with a valuation of $1.5 million for purposes of the Merger
Consideration) would be available for satisfaction of any CSL
Working Capital Deficiency to the extent the Working Capital
Escrow, Contingent Liabilities Escrow and General Escrow are
insufficient to satisfy such deficiency. The CNS Settlement
Agreement also provides that, subject to the closing of a new
convertible note financing of at least $2.5  million by CNS,  
ICSL will make the following payments to CNS: (i) $125,000 upon
closing of the New CNS Financing and (ii) subject to the
resolution of certain ICSL contingent liabilities and available
cash, $125,000  by March 31, 2003.  These amounts as well as
approximately $142,000 for CSL liabilities paid or reimbursed by
ICSL following the closing of the Merger will be treated as
current assets of CSL as of December 31, 2001 for purposes of
determining the CSL December Net Working Capital and calculating  
any CSL Working Capital Deficiency under the Merger Agreement.

Under the CNS Settlement Agreement, subject to the consummation
of the New CNS Financing as described  below, ICSL has agreed to
invest all Excess Cash in CNS securities.  "Excess Cash" is
defined as all ICSL cash or cash equivalents that are (i)
derived from currently existing ICSL assets and (ii) not needed
to pay or provide for the payment of ICSL liabilities and
obligations, all as determined in good faith by the ICSL Board.  
ICSL shall have no obligation to invest any Excess Cash if CNS
is not  solvent or is in default under its senior credit  
facility.  If ICSL makes any investment of Excess Cash within
six months of the closing of the New CNS Financing, ICSL will be
issued convertible secured notes having the same terms and
pricing as the notes being sold in the New CNS Financing.  If
ICSL makes any investment of Excess Cash after such six month
period, it will be issued unsecured  convertible notes of CNS,
bearing interest at CNS's senior debt borrowing rate then in
effect, compounded semi-annually and payable in cash or to
accrue (at CNS's option). If CNS consummates a financing within
six months prior to or six months after the issuance of Later
Notes in which the  gross proceeds to CNS are at least $3
million, the Later Notes will be convertible into the same type
of securities as sold by CNS in the Qualifying Financing at the
same pricing as CNS obtains in the Qualifying Financing.  If no
Qualifying Financing is consummated within such 12-month period,
and ICSL and CNS have not mutually agreed upon a conversion
price prior to the expiration of such 12-month period, then CNS
will engage and pay for an investment banking firm or other
independent valuation expert approved by ICSL to perform a
valuation analysis and provide a range for the then fair market  
value of the CNS common stock, whereupon ICSL will propose to
CNS the per share price of CNS common stock, within such range,
at which the Later Notes will be convertible.  CNS must either
accept  ICSL's proposal or redeem the Later Notes within 30 days
of ICSL's proposal, in cash, for a price equal to face amount of
the Later Notes, plus accrued and unpaid interest thereon, plus
a premium equal to interest accrued at the interest rate of the
Later Note calculated on the face amount for the period that the
Later Note has been outstanding.  If CNS redeems the Later
Notes, ICSL shall have no further obligation to invest Excess
Cash.  Until the conversion ratio of the Later Notes is  
determined in accordance with the  foregoing, ICSL will have
voting rights in respect of the Later Notes on an as-converted  
basis, assuming the same conversion price as the convertible
secured notes issued in the New CNS Financing, up to the greater
of (i) 5% of the total voting power of all CNS voting securities
or (ii) the number of votes determined using a conversion price
equal to twice the  conversion price of the convertible secured
notes issued in the New CNS Financing.

In the CNS Settlement Agreement, ICSL has agreed to enter into a
voting agreement with CNS and other securityholders of CNS under
which the parties will agree to (i) vote in favor of all matters  
required to effectuate the recapitalization of CNS as
contemplated by the term sheet for the New CNS Financing and for
which securityholder approval is required and (ii) waive all
rights of dissent and claims against CNS (and its affiliates,
directors and officers) in respect of the New CNS Financing.

The CNS Settlement Agreement provides that ICSL shall retain its
two CNS Board designees until the settlement of the Merger
escrows.  Thereafter, ICSL shall be entitled to one CNS Board
designee,  provided that ICSL has invested at least $1 million
of Excess Cash as contemplated by the CNS Settlement Agreement,
and two CNS Board designees, provided ICSL holds voting
securities in excess of 25% of all outstanding voting
securities.  All persons designated by ICSL to serve on the ICSL
Board shall be subject to the approval of CNS, which approval
shall not be unreasonably withheld.

Upon execution of the CNS Settlement Agreement, CNS assumed
financial responsibility for costs and  expenses associated with
or related to the preparation and filing with the SEC of any and
all annual,  quarterly, periodic or other reports required to be
filed by ICSL.

CNS has not yet provided ICSL with certain financial statements
of CNS that were contemplated by the Merger documents to have
been provided to ICSL. In the CNS Settlement Agreement, CNS has
agreed to provide audited December 31, 2001 financial statements
and unaudited quarterly financial statements to ICSL promptly
following the consummation of the New CNS Financing, together
with any other  information reasonably requested by ICSL to
comply with its reporting obligations under the securities  
laws. ICSL has agreed to use all commercially reasonable efforts
to effectuate the deregistration of ICSL's common stock as soon
as practicable after the receipt of the CNS financial
statements.  Upon deregistration, ICSL will no longer be
required to file annual or quarterly reports with the securities
and exchange commission and, accordingly, investors will no
longer have access to current financial information regarding
ICSL. As a result, stockholders' ability to trade ICSL common
stock will be materially and adversely affected.

Subsequent to the Merger, CNS determined that due to
unanticipated declines in projected revenues and  increases in
expenses and liabilities, its working capital would be
insufficient to sustain and grow its business.  To address its
working capital deficiency, CNS has secured preliminary
commitments for the New CNS Financing on the terms described
below from certain of its existing securityholders (other than
ICSL).

The New CNS Financing contemplates the issuance by CNS of
Tranche B1 Convertible Secured Notes and Tranche B2  Convertible  
Secured Notes.  Each holder of old CNS Notes, which were issued
in connection with the Merger, who purchases New Money Notes
with a value equal to or greater than 50% of such Old Note
investor's preemptive pro rata share of the aggregate value of
the New Money Notes, will be entitled to exchange his/her Old
Notes for a Swap Note equal in amount to the face amount plus
all accrued and unpaid interest of the Old Note at closing. The
Notes will bear the same interest as CNS senior debt in effect
at the closing date of the New CNS Financing, which will be
compounded semi-annually and payable in cash or accrue, at CNS's
option. The collateral securing the Notes is all current and
future assets of CNS, except those pledged as part of an
existing asset backed lease obligation or equipment or other
capital leases incurred in the ordinary course of business.

The Notes will be subject to redemption by CNS at the higher of
fair market value, as determined by the same appraisal process
as provided under the terms of the Old Notes, on an as converted
basis, or at the Accreted Value on February 7, 2006.  Also, CNS
may repurchase all New Money Notes at any time prior to the six-
month anniversary of the closing of the New CNS Financing at a
price equal to 110% of the face amount of the New Money Notes.

In connection  with the New CNS Financing, CNS will effect a 10-
for-1 reverse stock split.  The Notes will be convertible into a
number of shares of CNS common stock determined by dividing the
Accreted  Value by $0.484831 at the holder's option at any time.
CNS currently has outstanding Old Notes with a face value of
$3,354,000, which are convertible into 5,210,502 shares of CNS
common stock, based upon the $0.6437 per share conversion ratio
established in connection with the Merger.  The current  
conversion ratio of the Old Notes is approximately 1553.5 shares
(pre-Reverse Split) for each $1,000 of Accreted Value.  The
conversion ratio of the Swap Notes, which will be exchangeable
for Old Notes in the New CNS Financing, is approximately 2062.6
shares (post-Reverse Split) for each $1,000 of Accreted Value
(which equates to 20,626 shares (pre-Reverse  Split) for each
$1,000 of Accreted Value).  Prior to the issuance of the Notes,
the holders of Old Notes will waive any anti-dilution adjustment
under such notes in respect of future issuances by CNS of equity
securities or equity-linked securities at a price per share
equal to or greater than $0.484831.  Holders of the Notes will
have the right to vote with the CNS common stock on an as-
converted basis, and protective provisions relating to debt
issued or incurred, declarations of dividends, changes in the
current business or structure of CNS, and interested party
transactions will require the approval of 66.67% of the holders
of the Notes and Old Notes.

In addition to the Notes, the purchasers of the Notes will be
issued seven year warrants which  entitle the holder to purchase
an amount of Series A Preferred Stock equal to 60% of the face
amount of the New Money Notes purchased at an exercise price
equal to the liquidation preference for the Series A Preferred
Stock.  However, in the event that CNS exercises its right to
repurchase the New Money Notes, CNS will have the right to
cancel 50% of these warrants.

CNS presently has outstanding 10,400,000 shares of Series A
Convertible Preferred Stock convertible  into 16,516,918 shares
of CNS common atock based upon the $0.6437 per share conversion
ratio established in connection with the Merger.  In connection
with the New CNS Financing, the terms of the Series A Preferred
Stock will be amended to provide for "full ratchet" rather than
"weighted average"  anti-dilution rights, thereby resulting in
an adjusted conversion price of $0.484831 upon the issuance of
the New Money Notes (after giving effect to the Reverse Split).  
As a result the Series A Preferred  Stock will be convertible
into 21,450,773.5 shares of CNS common stock (which equates to
214,507,735 shares pre-Reverse Split).

CNS is also negotiating $600,000 of additional financing from
Heller Healthcare Finance, Inc.  In connection with securing
such additional financing, the holders of certain Old Notes have
agreed to guarantee the repayment of up to $1 million of the
Heller Line in excess of the borrowing base. In  consideration
for this guarantee, CNS has agreed to issue seven year warrant,
at an exercise price of $0.001 per share, to acquire an
aggregate of 7,200,000 shares of CNS common stock (pre-Reverse
Split)  or a proportional number if the initial amount of the
guarantee is other than $600,000.

CNS has advised ICSL that it anticipates closing the New CNS
Financing by the end of September, but there can be no assurance
that the New CNS Financing will be consummated. Consummation of
the New CNS Financing will result in substantial dilution of
ICSL's equity interest in CNS.  Following the  Reverse Split
contemplated by the New CNS Financing, ICSL will hold 2,237,406
shares of CNS common stock, of which 1,712,970 shares will be
held in escrow to satisfy ICSL's indemnification obligations,  
if any, pursuant to the Merger Agreement and to satisfy possible
adjustments to the Merger  consideration based upon resolution
of certain CSL litigation and any CSL Working Capital
Deficiency.  Assuming $2.5 million is invested in the New Money
Notes and an equal amount of Old Notes are exchanged for Swap
Notes, ICSL's  equity and voting interest will be substantially
diluted from 42.4% to approximately 5.9% of CNS's common equity
determined on an "as converted" basis.  The dilution will be
greater if CNS issues additional New Money Notes and if CNS
issues the common stock Warrant in connection with the guarantee
of the Heller Line.

CNS has experienced a serious working capital shortfall during
the second and third quarter of 2002, which has adversely
impacted its operations.  Absent the consummation of the CNS New
Financing, the significant working capital deficit raises
substantial doubt as to CNS's ability to continue as a going
concern. CNS has represented that upon consummation of the New
CNS Financing its current assets will exceed its current
liabilities and that it will be solvent.  CNS has advised ICSL
that it has received  commitments to purchase $2.7 million of
New Notes and is confident that it will be able to consummate
the New CNS Financing. CNS has also indicated that it believes
it will obtain an increase in the Heller Line.  However, there
can be no assurance that CNS will consummate such financings.  
Furthermore, CNS has not yet achieved profitability for any
period after the closing of the Merger and there can be no  
assurance that it will achieve a profitable level of operations
or that the funds from the New CNS Financing will be sufficient
to sustain CNS's operations or grow its business. Should
additional funds be required to finance CNS operations, there
can be no assurance that such funds would be available  when
required on terms acceptable to CNS, if at all.  In such event,
CNS may be required to  discontinue its operations and ICSL's
investment in CNS would have little or no value. Moreover, even
if available, such additional financing is likely to dilute
ICSL's equity interest in CNS, which dilution may be
substantial.


INT'L THUNDERBIRD: Resolves Default on Prime & MRG Obligations
--------------------------------------------------------------
International Thunderbird Gaming Corporation (TSX:INB)
previously reported that its "going concern" challenges may be
overcome in part if the Company's major creditors were willing
to enter into "work-outs" with the company.

The Company is no longer in default with respect to the Prime
Receivables and MRG loans. Prime has agreed to a payment plan on
the $730,000 balance whereby the Company will begin payments of
$10,000 per month for 73 months. No interest will be charged on
the $730,000 current balance unless the Company collects on one
or more of its receivables, including the lawsuit filed by the
Company against the Spotlight 29 tribe. The Company has entered
into a Memorandum of Understanding with MRG whereby all amounts
owed to MRG (approximately $3,000,000) will be re-paid over a
period of 48 months at 14% interest. $235,000 of the loan can be
converted into 2,350,000 shares of Thunderbird at US$0.10 per
share. This conversion feature will increase the fully diluted
number of shares outstanding to 25,865,868 from 23,515,868
currently. MRG is currently holding 2,330,000 convertible
warrants at a conversion price of .65USD for 2,000,000 shares
and .35USD for 330,000 shares. These warrants will be terminated
and replaced with the new warrants. In no event shall such
conversion rights result in MRG owning greater than 10% of the
outstanding common shares. This conversion feature is subject to
approval by the Toronto Stock Exchange. The new MRG loan will be
secured by the Company's 50% interest in the Panama operation
and will be contingent on approval by the Panama Gaming Board.
The MRG "work-out" is also contingent on the Company raising
$1,400,000 for use in the Company's Venezuelan operation. The
$1,400,000 will be used in conjunction with other funds to pay-
off the "Del Sur Bank" loan in Venezuela. The Company's
affiliate, Fiesta Casino Guayana is being charged 50% to 60%
interest rates and the new funding will substantially improve
FCG's cash flow which in turn will improve the Company's cash
flow. The "work-out" will also improve the Company's working
capital deficiency by 33%.

The Company is pursuing the renewal of its concession in
Guatemala and hopes to have an arbitration decision by September
30, 2002. The Company filed its NAFTA claim against the Mexico
government on August 23, 2002 and expects to be engaged in a
long and tedious arbitration process. The Company continues to
pursue collection on other receivables.

The Company is preparing to open a fifth Casino in the Republic
of Panama. In addition, the completion of the El Panama Casino
expansion is ahead of schedule.

On Oct 15, 2002 Fiesta Chitre will open in the Province of Los
Santos, Republic of Panama located in the Barcelo Los Guayacanes
Hotel. Fiesta Chitre will be home to 66 state of the art Slot
machines and 5 tables representing 35 positions. This casino
will cater to the local markets of Chitre, Aguadulce and Las
Tablas, Panama.

On Nov 15, 2002 the second expansion of Fiesta Casino El Panama
in Panama City will open. This addition of 6,000 square feet
will house approximately 120 new slots, 4 new table games and a
luxurious VIP gaming area. In addition, the upgrade of the
entire facility is expected to fortify Fiesta's dominant market
share position.

The Company's CFO, Dave Michelson has submitted his resignation
effective October 1, 2002. The Company wishes Mr. Michelson
success in his future endeavors as he pursues other interests
and thanks him for his dedicated service to the Company over the
past five years. The Company's board of directors has elected
Booker T. Copeland III to fill the position of CFO. Mr. Copeland
has functioned with distinction as the Company's controller for
the past four years. Based on this performance and his 18 years
of diverse accounting and financial management experience, the
Company is confident that Mr. Copeland's financial leadership
will offer significant contributions to the Company's future
development.

The Company will not add additional executive staff in the San
Diego office and will continue to move management offshore.
There are currently seven employees in the San Diego corporate
office, including the Company's President, Legal Counsel, Chief
Financial Officer and Administrative Staff. The Company has laid
off its Development Director and will pursue development with
its existing staff.

International Thunderbird Gaming Corporation is an owner and
manager of international gaming facilities. Additional
information about the Company is available on its World Wide Web
site at http://www.thunderbirdgaming.com  


KAISER ALUMINUM: Selling Pipeline Assets to Sorrento for $3 Mil.
----------------------------------------------------------------
Adjacent to Kaiser Aluminum Corporation's Gramercy Facility in
Louisiana is a caustic/chlorine facility that is no longer
operated.  Patrick M. Leathem, Esq., at Richards, Layton &
Finger, in Wilmington, Delaware, relates that this
caustic/chlorine facility includes a 13-mile pipeline that was
used primarily to carry brine from a distant well to the
caustic/chlorine facility.  Previously, small amounts of brine
were also delivered through the Brine Line to the Gramercy
Facility.

Although the Debtors require brine for the operation of the
Gramercy Facility, Mr. Leathem says they have obtained the
necessary brine from other sources.  The Brine Line was
constructed to deliver substantially higher amounts of brine for
use in the caustic/chlorine facility.  In view of the smaller
amounts of brine needed by the Gramercy Facility, the operation
of the Brine Line, which includes maintaining the mineral
rights, is not cost effective.  Hence, the Debtors ceased
utilizing the Brine Line.

In September 2001, the Debtors commenced efforts to sell the
Brine Line and the other surplus assets associated with the
caustic/chlorine plant.  After several failed marketing efforts,
continues Mr. Leathem, the Debtors managed to negotiate with
Enterprise Products Operating, L.P., which expressed interests
in the Brine Line.  Since that time, the Debtors have been in
discussions with Enterprise and its affiliate, Sorrento Pipeline
Company, LLC, to reach an acceptable agreement for the sale of
the Brine Line.

Subsequently, the Debtors have agreed to enter into a purchase
and sale agreement with Sorrento on September 24, 2002.  Subject
to Court approval, the salient terms of the purchase agreement
are:

Property:  -- 11.09 miles of the Brine Line;

           -- all records and permits in connection with the
              ownership, operation and maintenance of the Brine
              Line.

           The assets will be sold free and clear of liens,
           claims and Encumbrances.  The Debtors do not believe
           that any liens against these assets exist other than
           the lien granted in connection with the Debtors'
           postpetition financing.

Buyer:     Sorrento Pipeline Company, LLC;

Price:     $3,000,000 in cash;

           The Purchase Price will be paid at the closing of the
           transaction.  The Purchase Price does not include
           sales, use, excise or other taxes payable on account
           of the transaction, which, if applicable, will be
           paid by Sorrento.  Sorrento is assuming no
           liabilities of the Debtors under the Sale Agreement
           other than future obligations arising under certain
           permits designated by Sorrento;

Indemnification:

           The parties are required to indemnify the other to
           the extent and as described in the Sale Agreement.

           The Debtors will indemnify Sorrento from and against:

           -- any breaches of the Debtors' representations and
              warranties; and

           -- any losses relating to any claims arising from
              activities of the Debtors relating to the Pipeline
              Assets prior to the closing date.

           Sorrento will indemnify the Debtors from and against:

           -- any breaches of Sorrento's representations and
              warranties; and

           -- any losses relating to any claims arising from
              activities of Sorrento relating to the Pipeline
              Assets after the closing date;

Other Bid: The Debtors are not permitted to solicit other bids
           for the Pipeline Assets unless the solicitation is
           required by the Court.

           The Debtors, however, do not believe further
           solicitation of bids will result in higher value to
           their estates since:

           -- due to the immovable nature and few potential uses
              of the Pipeline Assets, the market for the
              Pipeline Assets is very limited;

           -- the Debtors believe that their efforts to market
              the Pipeline Assets have been thorough and have
              resulted in a fair and reasonable price for the
              Pipeline Assets; and

           -- negotiations with Enterprise and Sorrento have
              continued over the course of several months and
              during that time no other party has expressed an
              interest in the Pipeline Assets.

By this Motion, the Debtors seek authority to consummate the
sale of the Pipeline Assets.

Mr. Leathem assures the Court that the sale of the Pipeline
Assets justifies sound business judgment because the Debtors no
longer need large enough volumes of brine at the Gramercy
Facility to make the ownership and operation of the Brine Line
cost effective.  In addition, the sale of the Pipeline Assets
will generate revenue that will be used to the benefit of the
Debtors' estate.  The Debtors also deem the purchase price fair
and reasonable considering that the sale was negotiated at arm's
length over several months. (Kaiser Bankruptcy News, Issue No.
15; Bankruptcy Creditors' Service, Inc., 609/392-0900)   

Kaiser Aluminum & Chemicals' 12.75% bonds due 2003 (KLU03USR1),
DebtTraders reports, are trading at 17 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=KLU03USR1for  
real-time bond pricing.


KMART: Moody's Further Junks Ratings on Four Lease-Backed Notes
---------------------------------------------------------------
Moody's Investors Service downgraded the ratings of four lease-
backed notes supported by Kmart Corporation's lease obligations
or lease obligations guaranteed by Kmart.

Rating Action                             To         From

* Pass Through Trusts 1995-K1/K2,         Ca         Caa2
  
* Pass Through Trusts 1995-K3/K4,         Ca         Caa2

* Kmart Funding Corporation Secured       Ca         Caa2
  Lease Bonds, Series F and G,

* KMS III Realty Limited Partnership      Ca         Caa2
  7.78% Lease Backed Notes, Series
  A due 1/2009, 8.16% Lease Backed Notes,
  Series B due 7/2011, 8.58% Lease Backed
  Notes, Series C due 1/2015,

The securities are collaterized by multiple Kmart stores. The
rating actions reflect that each transaction has suffered from
at least one rejected lease and that three of the four
transactions have experienced interest shortfalls.


KNOLOGY BROADBAND: Seeking Nod to Pay Critical Vendors' Claims
--------------------------------------------------------------
Knology Broadband, Inc., tells the U.S. Bankruptcy Court for the
Northern District of Georgia the it needs to pay its critical
vendors' prepetition claims and authority to maintain and extend
postpetition credit agreements.

Maintenance of uninterrupted payments on account of Trade
Claims, whether owing by the Debtor or by one of its Operating
Subsidiaries, is of extreme importance to the Debtor's
reorganization, the Company says.  In order to maintain trade
credit, Trade Creditors require assurance of payment.  
Otherwise, Trade Creditors will most likely stop providing goods
and services on credit.  If that happens, the pre-negotiated
restructuring will be impossible.

Furthermore, if the Debtor is not authorized to pay the Trade
Claims on which its Operating Subsidiaries are liable, the
Operating Subsidiaries will not be able to continue to transfer
the revenues to the Debtor in accordance with past practice.  
The Operating Subs will be required to retain their revenues for
the payment of its own accounts payable, all at increased costs
and expense, without particular benefit to the Debtor's estate.

The Debtor points out that it is vital to the success of this
case that the Debtor and the Operating Subs be able to maintain
trade credit during the duration of the case and following
confirmation of the Prepackaged Plan.

The Debtor estimates that the amount of Trade Claims owing to
Critical Vendors is approximately $3,000,000 per week, of which
$500,000 is owing to Trade Creditors of the Debtor and
$2,500,000 is owing to Trade Creditors of the Operating Subs.

Knology Broadband, Inc., provides services to certain of its
affiliates which are providers of cable TV, telephone and high
speed Internet access to business and residential customers. The
Debtor filed for chapter 11 protection on September 18, 2002.
Barbara Ellis-Monro, Esq., Michael S. Haber, Esq., and Ronald E.
Barab, Esq., at Smith, Gambrell & Russell, LLP represent the
Debtor in its restructuring efforts.  When the Company filed for
protection from its creditors, it listed $43,646,524 in total
assets and $473,814,416 in total debts.


LEHMAN ABS: Fitch Drops Junk-Rated on Class B-2 Notes to D
----------------------------------------------------------
Fitch Ratings has downgraded the following residential mortgage-
backed securitization:

Lehman ABS Corporation, series 1998-1 --Class B-2 ($849,385
outstanding) downgraded to 'D' from 'CCC'; --Class B-1 ($991,388
outstanding) downgraded to 'BB' from 'BBB' and removed from
Rating Watch Negative; --Class M-2 ($1,983,503 outstanding)
downgraded to 'BBB' from 'A'; --Class M-1 ($10,166,272
outstanding) downgraded to 'A' from 'AA'.

Due to an ongoing reporting error, cumulative losses are
understated on the monthly distribution statements. As a result
of the extensive review, the current rating actions reflect the
actual cumulative losses incurred to date which is $2,125,029,
as well as the high level of delinquencies relative to the
remaining credit support levels as of the Aug. 25, 2002,
distribution.

Lehman ABS Corp., series 1998-1 remittance information indicates
that 8.41% of the pool is over 90 days delinquent and cumulative
losses are $2,125,029 or 1.56% of the initial pool. Currently,
class B-2 has 0% of credit support, class B-1 has 2.61% of
credit support remaining, class M-2 has 5.66% of credit support
remaining, and class M-1 has 11.76% of credit support remaining.


LODGIAN: CCA Asks Court to Extend Time for Sec. 1111(b) Election
----------------------------------------------------------------
The Capital Company of America, LLC, a secured creditor of
debtors -- IMPAC Hotels II, L.L.C and IMPAC Hotels III, L.L.C,
asks the Court to extend its time to make an election under
Section 1111(b) of the Bankruptcy Code.

Andrew A. Kress, Esq., at Kaye Scholer LLP, in New York, tells
the Court that CCA holds a valid and perfected:

-- first mortgage on one deed of trust on each of 18 hotels
   owned by IMPAC located in various locations,

-- assignment of leases and rents with respect to each of the
   Hotel Properties,

-- security interest in and lien on all personal property
   located at the Hotel Properties, and

-- assignment of agreements, licenses, permits and contracts
   from IMPAC.

CCA is owed $109,000,000 in principal and prepetition interest
and fees.  A portion of the CCA loan is guaranteed by IMPAC
Hotel Group, L.L.C and Lodgian, Inc.  CCA's loan matured on
September 11, 2002.

On August 21, 2002, Mr. Kress recounts that the Debtors filed a
proposed Plan under which the CCA Mortgage Financing would
receive a treatment, which has yet to be determined by the
Debtors.  In that regard, the proposed Disclosure Statement
explains that the treatment of the CCA Mortgage Financing will
be affected by the resolution of certain disputes between CCA
and the Debtors, which are scheduled for mediation.  Thus, the
proposed treatment of CCA is left unclear.

According to Mr. Kress, the Plan and Disclosure Statement
expressly provide that a hotel lender will receive, at the
relevant debtor's option, either cash equal to 100% of its
allowed claim, the net proceeds of the sale of the collateral,
the return of its collateral, a new note in the amount of its
allowed claim, or any other treatment allowed by the Bankruptcy
Code.  The Plan further provides that if a lender rejects the
Plan, the Debtors then may seek to have the Court determine the
value of the collateral, bifurcating the lender's claims under
Section 506(a).  Certainly, a lender like CCA cannot reasonably
analyze this Plan.  CCA does not know what it will receive.

In the event that a secured creditor is found to be undersecured
after a valuation of its collateral for purposes of a particular
proposed Plan, Mr. Kress notes that Section 1111(b) of the
Bankruptcy Code provides two options to the secured creditor in
connection with the proposed Plan of reorganization, namely:

-- to retain the secured and unsecured claims that resulted from
   a Section 506(a) valuation, or

-- to forgo its unsecured claim and instead have its claim
   treated under the Plan as fully secured by the collateral to
   the full extent of its allowed claim.

Mr. Kress explains that the purpose of the second option -- the
Section 1111(b)(2) election -- is to prevent a secured creditor
from bearing the risk of and being "cashed out" under a Plan at
a low judicial valuation.  The option exercised under Section
1111(b) also impacts the secured creditor's treatment under the
proposed Plan and in particular the "cramdown" provisions of
Sections 1129(b)(1) and (b)(2)(A)(i).

Rule 3014 of the Federal Rules of Bankruptcy Procedures provides
that the election must be made no later than at the conclusion
of the hearing on the approval of the proposed Disclosure
Statement or at a later time as fixed by the Court.  CCA would
have to decide whether to make a Section 1111(b)(2) election in
connection with the Debtors' proposed Plan at the Disclosure
Statement hearing on September 24, 2002, prior to knowing:

-- the specific treatment it will receive under the Debtors'
   proposed Plan, and

-- whether:

    a. IMPAC will elect to have the Court value CCA's collateral
       in an attempt to bifurcate CCA's claim under the proposed
       Plan into secured and unsecured components and in that
       event, and

    b. the Court's valuation of CCA's collateral in connection
       with the Debtors' proposed Plan.

Mr. Kress notes to Bankruptcy Rule 3014 makes it clear that the
secured creditor must know how it will be treated in a Plan
before it should be forced to decide and determine its rights
under Section 1111(b).  Furthermore, the Section 1111(b)
election comes into relevance only if the Court is required to
value the collateral in connection with the Plan and the result
is a bifurcation of the secured creditor's claim into two parts
under the Plan: a secured portion limited to the value of the
collateral and an unsecured deficiency portion.  Thus, a Section
1111(b) election should await a court's determination of the
value of the collateral in connection with a proposed Plan.

Whether IMPAC will seek to value CCA's collateral in connection
with its proposed Plan, and if it does, the outcome of the
Court's valuation, are critical components in any secured
creditor's decision under Section 1111(b) in respect of a
particular Plan.  As presently structured, Mr. Kress points out
that CCA will not know whether IMPAC will proceed in this
fashion and whether the Court's valuation will result in a
deficiency claim until after the Disclosure Statement is
approved, making the present deadline under Bankruptcy Rule 3014
inapposite. Moreover, the Section 1111(b) election may not be
implicated at all in the event a consensual arrangement is
reached, the Debtors otherwise propose proper treatment for CCA
in the Plan, or the Debtors decide not to seek to value the
collateral in connection with CCA's treatment under the proposed
Plan.

Therefore, Mr. Kress insists that it is premature to consider
issues with respect to a Section 1111(b) election.  For these
reasons, the Court should extend CCA's right to make an election
under Section 1111(b) until 10 days after a valuation, if any,
of CCA's collateral made for purposes of CCA's treatment under
the Debtors' proposed Plan. (Lodgian Bankruptcy News, Issue No.
16; Bankruptcy Creditors' Service, Inc., 609/392-0900)  


LORAL SPACE: Extends Preferred Share Exchange Offer to October 8
----------------------------------------------------------------
Loral Space & Communications (NYSE: LOR) has amended certain
terms of the exchange offer for all of its outstanding preferred
stock, and therefore has extended the expiration date of the
offer to 11:59 p.m., New York City time, October 8, 2002, unless
extended.

The offer, which had been scheduled to expire last midnight, is
part of Loral's ongoing strategy to reduce debt and increase its
financial flexibility.

Under its improved offer, Loral is to exchange $1.92 in cash and
6.54 shares of Loral common stock for each share of its Series C
and Series D preferred stock. This represents an increase from
the four shares of common stock in the original offer; there is
no change in the cash portion of the offer. Further, the company
has removed its condition for 50 percent minimum participation,
in the aggregate, of all outstanding shares of the two series of
preferred stock.

The company does not expect to offer any further improvements to
the economics of the offer. The terms of Loral's bond indenture
prevent it from increasing the cash component of this offer, and
New York Stock Exchange rules preclude Loral from issuing more
common shares without shareholder approval. Moreover, the
previously announced indefinite suspension of dividends for both
series of preferred stock will apply to the dividends that
otherwise would have been paid in November. Accordingly, the
company will be prohibited from offering cash in future
preferred exchanges.

If all of the preferred shares participate, Loral will exchange
$22 million in cash and 75.1 million common shares for preferred
stock that has a liquidation preference of $574 million. As of
June 30, 2002, there were 8,084,174 outstanding shares of the
Series C preferred stock and 3,391,688 outstanding shares of the
Series D preferred stock. As of the close of business on
September 24, 2002, 286,440 shares of Series C preferred stock
and 1,132,700 shares of Series D preferred stock had been
tendered.

Documents describing the amended exchange offer in greater
detail are being mailed to holders of Series C and Series D
Preferred Stock. Series C and D shareholders who wish to
participate in the exchange offer should contact the company's
information agent, Morrow & Co., Inc., at (800) 607-0088.
Exchanges will be effected by The Bank of New York, the exchange
agent for the offer.

Loral Space & Communications is a high technology company that
concentrates primarily on satellite manufacturing and satellite-
based services. For more information, visit Loral's Web site at
http://www.loral.com  

                         *     *     *

As reported in Troubled Company Reporter's Monday edition,
Standard & Poor's lowered its senior unsecured debt rating on
Loral Space & Communications Ltd. to triple-'C'-minus from
triple-'C'-plus and its senior unsecured debt rating on the
company's wholly-owned subsidiary Loral Orion Inc., to triple-
'C'-plus from single-'B'. These downgrades were based on concern
about Loral's liquidity and weak customer demand in the
company's satellite leasing and manufacturing businesses.

Standard & Poor's also lowered its corporate credit rating on
Loral to double-'C' from single-'B' and its preferred stock
rating on the company to single-'C' from triple-'C', and placed
the ratings on CreditWatch with negative implications. These
rating actions follow the company's commencement of an offer to
exchange cash and common stock for each share of its series C
and series D preferred stock.


LTV CORP: Court Approves Nationwide Consulting as Appraisers
------------------------------------------------------------
LTV Steel Company and its debtor-affiliates obtained the Court's
authority to employ Nationwide Consulting Company Inc., as
appraisers, nunc pro tunc to July 9, 2002.

As previously reported, the Debtors have engaged Nationwide as
an "ordinary course professional" to perform appraisal services
for their businesses on an ad hoc basis.  As these cases
progressed, the Debtors asked Nationwide to perform appraisals
of their personal property in connection with their application
for a $250 million loan from National City Bank and KeyBank,
N.A. This loan was to be guaranteed in part under the Federal
Emergency Steel Guaranteed Loan Program.  The Loan Guaranty
Appraisal was required under this program.  But the loan
guaranty did not push through, forcing the Debtors to seek
authority to implement the APP.

Nationwide also performed appraisal for the Debtors in
connection with the sale of certain assets owned by non-debtor
affiliates -- the River Terminal Railway Company, Chicago Short
Line Railway Company, and the Cuyahoga Valley Railway Company --
as part of the Integrated Steel Sale.  Specifically, the need
for the Railroad Appraisal arose from the obligations of LTV
Steel and the Railroad Subsidiaries under the Allocation
Agreement dated February 26, 2002, which has now been approved.

The Debtors foresee the need for Nationwide's appraisal services
in connection with the APP and the Debtors' marketing of the
Metal Fabrication Business.  The Debtors expect that the total
cost of the nationwide Appraisals will exceed the $25,000
average monthly fee limitation per fee reporting period
established by the Ordinary Course Professionals Order.  While
the Debtors believe that Nationwide is a Service Provider -- not
a Covered Professional -- and therefore, not subject to the fee
cap, the Debtors nonetheless make this Application out of an
abundance of caution.

Nationwide will render Future Appraisals and in that connection
will:

       (1) advise and assist the Debtors and their professionals
           in preparing machinery and equipment appraisals to
           assist them in implementing the APP and related
           asset sales;

       (2) advise and assist the Debtors and their professionals
           in their negotiation and due diligence efforts with
           other parties;

       (3) attend and participate in hearings and meeting
           on matters within the scope of Nationwide's
           retention; and

       (4) advise and assist the Debtors with respect to
           such other related matters as the Debtors or
           their professionals may request from time to time.

                      Payment of Nationwide Fees

Nationwide intends to:

       (a) charge for its professional services on an
           hourly basis in accordance with its ordinary
           and customary hourly rates in effect on the
           date services are rendered; and

       (b) seek reimbursement of actual and necessary
           out-of-pocket expenses.

Nationwide's hourly rates vary with the experience and seniority
of the individuals assigned, and may be adjusted by Nationwide
from time to time. (LTV Bankruptcy News, Issue No. 37;
Bankruptcy Creditors' Service, Inc., 609/392-00900)


MARK NUTRITIONALS: Seeks Okay to Use Hibernia's Cash Collateral
---------------------------------------------------------------
Mark Nutritionals, Inc., seeks authority from the U.S.
Bankruptcy Court for the Western District of Texas to use its
lenders' cash collateral. The Debtors tells the Court that it
need to use an immediate $600,000 of cash collateral to avoid
irreparable harm to the estate. Absent such use would require
the Debtor to cease operations.

The Debtor tells the Court that it need to continue its business
to be able to propose a Plan of Reorganization.  The Debtor has
no alternative borrowing source and to remain in business, it
must be permitted to sell its inventory to the retail trade cash
and on credit and to use the cash proceeds of inventory and
accounts to pay its employees and purchase new inventory.

The Debtor reports that Hibernia National Bank asserts a
security interest in all of the Debtor's accounts receivable and
related books arising from retail sales.  The Debtor proposes to
provide adequate protection to Hibernia by affirming the
existing lien and granting to Hibernia a security interest in
all new accounts generated by the Debtor by granting senior
liens against the Collateral and priority and administrative
expense status and assuming factoring agreement with Hibernia.

Mark Nutritionals, Inc., filed for chapter 11 protection on
September 17, 2002. William H. Oliver, Esq., and Marvin G.
Pipkin, Esq., at Pipkin, Oliver & Bradley LLP represent the
Debtor in its restructuring efforts.  When the Company filed for
protection from its creditors it listed estimated debts of over
$10 million.


MARTIN INDUSTRIES: Secures Interim Bank Financing from AmSouth
--------------------------------------------------------------
Martin Industries, Inc. (OTCBB:MTIN), a manufacturer of premium
gas fireplaces and home heating appliances, has arranged
temporary financing from its primary lender, AmSouth Bank, to
restart limited operations. As previously reported, the Company
had suspended operations on September 17 due to a lack of
working capital. Under the new financing arrangement, the
Company will be entitled to borrow up to an additional $750,000
under its line of credit with AmSouth until the earliest of (i)
October 14, 2002, or (ii) further default by the Company of its
agreements with AmSouth, or (iii) the Company again suspends
operations or files for bankruptcy protection.

The Company expects to immediately resume limited manufacturing
operations in order to fill existing customer orders and is
considering the feasibility of future orders. The Company has
engaged Philip + Company Inc. to oversee the resumption of the
manufacturing operations. Philip + Company Inc., specialize in
assisting businesses who are in under-funded or distressed
situations. Philip + Company Inc. will also be working with the
Company's Board of Directors and President and CEO, Jack Duncan,
in exploring available alternatives, including a possible sale
of the Company or the Company's assets.

The Company intends to utilize a portion of the $750,000 under
the line of credit to pay a portion of past due wages owed to
hourly employees. The payment of those wages will be dependent
of the Company's compliance with the terms of its agreements
with AmSouth.

In connection with this new agreement with AmSouth, the maturity
date for the Company's indebtedness to AmSouth has been moved
from November 4 to October 14, 2002. As of September 20, 2002,
the amount outstanding under the Company's line of credit with
AmSouth was $6.4 million.

As previously reported, the Company had considered the
possibility of pursuing a reorganization plan pursuant to a
Chapter 11 bankruptcy filing. If current strategy fails to find
a reasonable solution to the Company's circumstances, a
bankruptcy filing remains an option. Martin Industries designs,
manufactures and sells high-end, pre-engineered gas and wood-
burning fireplaces, decorative gas logs, fireplace inserts and
gas heaters and appliances for commercial and residential new
construction and renovation markets in the U.S. Additional
information on Martin Industries and its products can be found
at its Web site http://www.martinindustries.com


MEASUREMENT SPECIALTIES: Sells Terraillon to Fukuda for $22.3MM
---------------------------------------------------------------
Measurement Specialties (Amex: MSS) announced the sale of
Terraillon Holdings Limited (Terraillon), a wholly owned
subsidiary of MSS, to Fukuda (Luxembourg) S.a.r.l., an
investment holding company incorporated in Luxembourg, for $22.3
million in cash plus the assumption of $4.8 million in debt. SSG
Capital Advisors acted as financial advisor to MSS. MSS will use
the net closing proceeds ($16.7 million after fees and escrowed
proceeds) to reduce senior debt as required under the previously
executed Forbearance Agreement.

"Terraillon is a great brand and great asset," commented Frank
Guidone, CEO. "We received strong response to the proposed sale
and are pleased with the outcome. As previously disclosed,
selling Terraillon is a critical step in our restructuring plan
announced several months ago. The proceeds from the sale will
allow us to significantly reduce our senior debt and eliminate
the overadvance, and will facilitate a refinancing of the
secured lenders. While the operational and financial
restructuring initiatives were important to execute the
turnaround, we continue to work diligently to complete the audit
of our financial statements and become current with our SEC
filings. We recognize our responsibility to shareholders and the
investment community, and anticipate filing our FY02 Form 10-K
(including restated FY01 financial statements) and FY03 Form 10-
Q prior to the AMEX de-listing appeals hearing, which is
currently scheduled for October 22."

Measurement Specialties is a designer and manufacturer of
sensors, and sensor-based consumer products. Measurement
Specialties produces a wide variety of sensors that use advanced
technologies to measure precise ranges of physical
characteristics, including pressure, motion, force,
displacement, angle, flow, and distance. Measurement Specialties
uses multiple advanced technologies, including piezoresistive,
application specific integrated circuits, micro-
electromechanical systems, piezopolymers, and strain gages to
allow their sensors to operate precisely and cost effectively.

                         *    *    *

As reported in Troubled Company Reporter's July 10, 2002
edition, Measurement Specialties, Inc., successfully negotiated
and executed an extended forbearance agreement with its lenders.  
This agreement provides that the lenders will forbear, until
November 1, 2002, from exercising the rights and remedies
available to them as a result of the Company's defaults under
its credit agreement.  The agreement is the critically important
first step in the Company's broader restructuring plan announced
June 19th.  In a display of support for the proposed
restructuring plan, the lenders have also agreed to extend
additional credit under the Company's revolving credit facility
as well as allow the Company to apply the proceeds from the
sale/liquidation of certain Company assets against amounts
outstanding under the revolving credit facility (rather than
against amounts outstanding under the term loan as otherwise
required by the credit agreement).  As a condition to the
agreement and the lenders' continued forbearance, the Company
has agreed to pledge in favor of the lenders certain
unencumbered assets, and must take certain actions and comply
with strict financial covenants during the forbearance period.


MENTERGY: Files for Court Protection from Creditors in Israel
-------------------------------------------------------------
Mentergy(TM) Ltd. (Nasdaq:MNTE), has filed a request with an
Israeli court seeking protection from creditors and appointment
of a trustee for the company for a period of three months in
order to prepare a recovery plan and an arrangement with
creditors.

The filing relates only to creditors of Mentergy Ltd. (an
Israeli company), and does not apply to any of Mentergy's
subsidiaries.

Mentergy expects the recovery plan to include a sale of its U.S.
operations to local management, and is currently in negotiations
for such sale. In addition, Mentergy is considering transferring
its TrainNet activities to its subsidiary, Gilat Satcom Systems.

There can be no assurance that the recovery plan or any
component of the plan will be successful.


METROCALL INC: Court Confirms Plan & Stage Set to Emerge in Oct.
----------------------------------------------------------------
Metrocall, Inc., (OTC Bulletin Board: MCLLQ) one of the nation's
largest narrowband wireless data and messaging companies,
announced that its Plan of Reorganization was confirmed by the
United States Bankruptcy Court and expects to emerge from the
restructuring process in early October when the plan becomes
effective.

Vincent D. Kelly, Metrocall's Chief Operating and Chief
Financial Officer, commented , "We are pleased our plan has been
confirmed by the court and was supported by an overwhelming
majority of all voting classes. We look forward to emerging as a
newly reorganized company in early October. This successful
restructuring represents the collective efforts of Metrocall,
our creditors, our employees and valued customers."

Throughout its restructuring proceedings, which commenced June
3, 2002, Metrocall's wireless data networks and customer support
services continued to operate seamlessly. "We continue to exceed
the service revenues, operating cash flow and subscriber targets
provided for in our restructuring business plan," Mr. Kelly
noted. Metrocall's reorganization which was completed without
any debtor-in-possession financing will result in substantial
debt elimination and de-leveraging. Metrocall will continue to
focus on its traditional subscriber base, emphasizing business
development and retention of small business, government,
healthcare and corporate customers.

As previously announced and in accordance with the pre-
negotiated plan, Metrocall's $133 million of existing senior
secured debt will be exchanged for (i) a $60 million secured
term note to be issued by the reorganized operating entity, (ii)
a $20 million paid-in-kind note to be issued by the reorganized
holding company, (iii) preferred stock to be issued from the
reorganized holding company with a $53 million liquidation
preference and (iv) 42% of the new common stock of the
reorganized holding company (subject to dilution of up to 7% for
options provided to employees under a new stock option plan to
be implemented after the effective date of the plan).
Metrocall's general unsecured creditors' claims, totaling
approximately $751 million, including the holders of its
unsecured public notes, will be exchanged for a pro rata share
of (i) preferred stock of the reorganized holding company with a
$5 million liquidation preference and (ii) 58% of the new common
stock to be issued (also subject to dilution of up to 7% for the
aforementioned stock option plan to be implemented). Pursuant to
the plan, ninety-five percent of the total voting rights shall
be with the preferred stock until such stock is fully redeemed.
Metrocall's plan also provides that general unsecured creditors
of its wholly owned subsidiaries will receive payment of 100% of
the principal amount of their allowed claims upon effectiveness
of the plan. The current equity holders of the Company will
receive no distributions under the plan and their stock, options
and warrants will be canceled when the plan becomes effective.

Metrocall, Inc., headquartered in Alexandria, Virginia, is one
of the largest narrowband wireless data and messaging companies
in the United States, providing both products and services to
over four million business and individual subscribers. Metrocall
was founded in 1965 and currently employs approximately 2,000
people nationwide. The company currently offers two-way
interactive messaging, wireless e-mail and Internet
connectivity, cellular and digital PCS phones, as well as one-
way messaging services. Metrocall operates on multiple
nationwide, regional and local networks. Also, Metrocall offers
integrated resource management systems and communications
solutions for business and campus environments. For more
information on Metrocall please visit its Web site and on-line
store at http://www.Metrocall.comor call 800-800-2337.


MILITARY RESALE: Cash Levels Insufficient to Fund Operations
------------------------------------------------------------
The total revenue of Military Resale Group Inc., for the three
months ended June 30, 2002 of $1,721,912 reflected an increase
of $557,030, or approximately 47.8%, compared to total revenue
of $1,164,882 for the three months ended June 30, 2001. Revenues
are derived in either one of two ways: in the majority of
instances, the Company purchases products from manufacturers and
suppliers for resale to the commissaries it services. In such
cases, it resells the manufacturer's or supplier's products to
the commissaries at generally the same prices it pays for such
products, which prices generally are negotiated between the
manufacturer or supplier and the Defense Commissary Agency.
Revenue is recognized as the gross sales amount received by
Military Resale from such sales, which includes (i) the purchase
price paid by the commissary plus (ii) a negotiated storage and
delivery fee paid by the manufacturer or supplier. In the
remaining instances, Military Resale acts as an agent for the
manufacturer or supplier of the products it sells, and earns a
commission paid by the manufacturer or supplier, generally in an
amount equal to a percentage of the manufacturer's or supplier's
gross sales amount. In such cases, revenue is recognized as the
commission received on the gross sales amount.

Resale revenue for the three months ended June 30, 2002 of
$1,657,440 reflected an increase of $609,049, or approximately
58.1%, compared to resale revenue of $1,048,393 for the three
months ended June 30, 2001. For the three months ended June 30,
2002, approximately 75.6% of gross profit was derived from sales
involving resale revenue compared to 30.6% for the three months
ended June 30, 2001. These increases were attributable primarily
to the addition of the new products the Company began supplying
to commissaries during the fourth quarter of fiscal 2001,
including Slimfast, L'eggs, Bush Beans and Rayovac Batteries,
and during the first quarter of fiscal 2002, including a line of
feminine hygiene products and a line of infant feeding products
supplied by Playtex Products, Inc., which the Company sells on a
resale basis, as well as the implementation of its long-term
strategy to increase its ratio of sales of products it sells on
a resale basis, rather than a commission basis, due to the
payment discounts it often receives from the manufacturers and
suppliers of the goods it purchases for resale.

Commission revenue for the three months ended June 30, 2002 of
$64,472 reflected a decrease of $52,017, or approximately 44.7%,
compared to commission revenue of $116,489 for the three months
ended June 30, 2001. For the three months ended June 30, 2002,
approximately 24.4% of gross profit was derived from sales
involving commission revenue compared to approximately 69.4% for
the three months ended June 30, 2001. These decreases were
attributable primarily to the implementation of gthe Company's
long-term strategy to increase its ratio of sales of products so
ld on a resale basis, rather than a commission basis. It cannot
be certain as to whether or not these trends will continue;
however, in the long term it is seeking to increase the ratio of
its sales of products sold on a resale basis, rather than a
commission basis, because it believes it can increase
profitability on such sales by taking advantage of payment
discounts frequently offered by the manufacturers and suppliers
of such products. To do so, the Company intends to continue to
seek to add new products that it can offer to commissaries on a
resale basis from its existing manufacturers and suppliers and
from others with whom it does not currently have a working
relationship.

The Company incurred a net loss of $456,650 for the three months
ended June 30, 2002 as compared to a net loss of $36,819 for the
three months ended June 30, 2001.  And although revenues
increased for the six month period ended June 30, 2002, as
compared to the same period of 2001, the Company, primarily as a
result of increased expenses and cost of goods sold, incurred a
net loss of $645,590 for the six months ended June 30, 2002 as
compared to a net loss of $134,241 for the six months ended June
30, 2001.

Military Resale's current cash levels, together with the cash
flows it generates from operating activities, are not sufficient
to enable it to execute its business strategy. As a result, the
Company intends to seek additional capital through the sale of
up to 5,000,000 shares of its common stock. In December 2001, it
filed with the Securities and Exchange Commission a registration
statement relating to such shares. Such registration statement
has not yet been declared effective, and there can be no
assurance that the Securities and Exchange Commission will
declare such registration statement effective in the near
future, if at all. In the interim, the Company intends to fund
operations based on its cash position and the near term cash
flow generated from operations, as well as additional
borrowings. In the event it sells only a nominal number of
shares (i.e. 500,000 shares) in its proposed offering, it
believes that the net proceeds of such sale, together with
anticipated revenues from sales of its products, will satisfy
its capital requirements for at least the next 12 months.
However, the Company would require additional capital to realize
its strategic plan to expand distribution capabilities and
product offerings. These conditions raise substantial doubt
about Military Resale Group's ability to continue as a going
concern.

Assuming that the Company receives a nominal amount of proceeds
from its proposed offering of common stock, it expects capital
expenditures to be approximately $200,000 during the next twelve
months, primarily for the acquisition of an inventory control
system. It is expected that its principal uses of cash will be
to provide working capital, to finance capital expenditures, to
repay indebtedness and for other general corporate purposes,
including sales and marketing and new business development. The
amount of spending for any particular purpose is dependent upon
the total cash available to it and the success of its offering
of common stock.

At June 30, 2002, the Company had liquid assets of $529,076,
consisting of cash and accounts receivable derived from
operations, and other current assets of $336,367, consisting
primarily of inventory of products for sale and/or distribution.
Long term assets of $166,690 consisted primarily of warehouse
equipment used in operations.

Current liabilities of $1,528,116 at June 30, 2002 consisted of
approximately $1,108,770 of accounts payable and $339,755 for
the current portion of capitalized leases and notes payable, of
which approximately $210,000 was payable to its officers or its
other affiliates.

The Company's working capital deficit was $662,673 as of June
30, 2002.


MTS SYSTEMS: Fails to Comply with Nasdaq Listing Requirements
-------------------------------------------------------------
MTS Systems Corporation (Nasdaq: MTSCE) received a NASDAQ notice
on September 24, 2002 indicating that the company is currently
not in compliance with NASDAQ listing rules requiring companies
to obtain reviews of internal financial information by their
independent auditors prior to filing Form 10-Q reports with the
Securities and Exchange Commission.

On August 16, 2002, coincident with filing its third quarter
Form 10-Q, MTS disclosed that its current auditors KPMG LLP had
not completed reviewing the company's results for the three-
month and nine-month periods ended June 30, 2002.  KPMG had
previously replaced Arthur Andersen LLP as the company's auditor
effective May 31, 2002.  Consequently, the NASDAQ has issued a
staff determination that the company is subject to delisting as
set forth in Marketplace Rule 4310(C)(14).  This delisting is
subject to the results of a hearing before the NASDAQ Hearings
Department, which the company has requested.  No date has been
set for the hearing.  Simultaneously, NASDAQ changed the
company's trading symbol to MTSCE.  This symbol will remain in
effect until the matter is resolved.

MTS fully expects that NASDAQ will grant its request to continue
listing following this hearing.

The company previously reported that KPMG had requested
additional analysis on the timing of a number of adjustments
made during the first nine months of the year.  These
adjustments were related to changes in accounting estimates and
corrections of bookkeeping errors.  On a net basis, these past
adjustments had a negative impact on the company's reported net
income in all of the first three quarters of fiscal 2002.  The
company and KPMG have, to-date, not been able to make a complete
and accurate assessment of changes, if any, in the timing of
recording these adjustments.  It may still be determined that
the third quarter fiscal year 2002 report and previously filed
periodic reports for fiscal 2002 and 2001 require revision.

"The review is taking a little longer than we expected," said
Sidney W. Emery, Jr., chairman and CEO.  "MTS and KPMG are
working together to ensure we do a complete and thorough
assessment.  As before, I remain confident that the results will
have no material impact on the financial health of the company."

MTS Systems Corporation is a global supplier of integrated
simulation solutions that help customers accelerate and improve
their design, development and manufacturing processes.  MTS
supplies products for determining the mechanical behavior of
materials, products and structures -- including computer-based
testing and simulation systems, modeling and testing software,
and consulting services -- as well as products for automating
manufacturing processes.  MTS had 2,200 employees and revenue of
$397 million for the fiscal year ended September 2001.  
Additional information on MTS can be found on the worldwide web
at http://www.mts.com


NATIONAL STEEL: Ziegler Wants to Recoup Assets from Nat'l Pellet
----------------------------------------------------------------
Ziegler Inc., wants the automatic stay lifted so it can
repossess a truck it sold to National Steel Pellet Company.  
Additionally, Ziegler asks that the Court direct National Pellet
to make adequate protection payments on certain mining property
because the value of its collateral is declining.

Ziegler sold a Caterpillar Model 793C truck for $1,780,304 but,
to date, National Pellet has yet to make payments for the truck.

According to John S. Delnero, Esq., at Bell, Boyd & Lloyd LLC,
in Chicago, Illinois, on September 14, 2001, National Pellet
sent Ziegler a purchase order for the truck.  The Purchase Order
incorporated a quotation Ziegler gave earlier.  The quotation,
which Ziegler provided on May 22, 2001, states that, "it is
intended and understood that title and ownership of said
equipment is and shall remain vested in the Sellers,
notwithstanding delivery or possession, until the entire price
is paid by cash in full."

On January 2, 2002, continues Mr. Delnero, National Pellet
started to receive components of the Truck.  Shortly thereafter,
the assembly of the Truck began and was largely completed by
January 30, 2002 except for a seat, which as National Pellet
reported to Ziegler, did not conform to its order.  On February
14, 2002, the correct seat was delivered and installed and the
Truck, as ordered, was now completely delivered.

After the Truck was completely installed, Ziegler sent National
Steel an invoice.  Later, Ziegler filed a U.C.C. financing
statement in Delaware to secure Ziegler's reservation of title.

Since the invoice was sent, Ziegler has continued to provide
goods and services related to the Truck.  These goods and
services are provided pursuant to the Truck sale contract with
no extra charge to National Pellet.  For example, on March 4,
2002, a steering tie and ring in the Truck was replaced.  And,
Ziegler has provided and continues to provide personnel on
National Pellet's site to help service the Truck.

Based on the allegations mentioned, Mr. Delnero contends that
Ziegler -- as a secured creditor with a purchase money security
interest in the Truck -- is entitled to adequate protection to
cover depreciation of the Truck.  Mr. Delnero asserts that
Ziegler should be paid $98.92 per hour of use, as this type of
Truck depreciates at this rate.  The Truck was worth $1,700,000
on March 6, 2002 and $1,350,000 on August 9, 2002.   According
to Mr. Delnero, an hourly meter on the Truck can measure the
amount of use.

Meanwhile, Ziegler also seeks adequate protection of its
interests on a mining property, which National Pellet has been
using.  Ziegler asserts a miners' lien on the property under
Minnesota law.

Mr. Delnero explains that National Pellet has continued to mine
a real property covered by the lien and the liened real estate
is depreciating as it is mined; the minerals are extracted the
property loses value.  Ziegler does not know the value of the
real estate or its rate of depreciation.  Given that, Mr.
Delnero believes Ziegler is entitled to relief from the stay to
foreclose upon the land referred to the Miners' Lien.

Ziegler has given notice under Section 546 of the Bankruptcy
Code that it intends to enforce its rights and foreclose on the
property secured by the Minnesota Miners' Lien under Minn. Stat.
Section 514.17.

                          Debtors Reply

Although the Debtors do not deny allegations that they have
bought the Caterpillar truck from Ziegler Inc. and the existence
of a miners' lien, the Debtors argue certain points made in
Ziegler's motion.

The Debtors remind Ziegler that the services it provides are
just customary and are not exclusive of the Caterpillar Truck
alone. Ziegler serviced National Pellet's entire fleet.  The
Debtors also challenge the validity of the miner's lien.  The
Debtors also are unaware of the allegations that the truck or
the liened real estate is depreciating in value.

Consequently, the Debtors contend that the motion should be
denied. (National Steel Bankruptcy News, Issue No. 15;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


NEPTUNE SOCIETY: KPMG LLP Articulates Going Concern Doubts
----------------------------------------------------------
The Neptune Society Inc., is a provider of pure cremation
services in North America.  As of April 1, 2002, it operated 19
locations serving California, Colorado, Florida, Illinois, Iowa,
Oregon, New York, and Washington. Its strategy is to grow by:

     o    initiating start-up operations;

     o    selectively acquiring small, family-owned cremation
          service providers strategically located across North
          America ;
     o    operating all locations under one nationally branded
          name, "The Neptune Society" (where permitted);

     o    avoiding direct competition with corporate
          consolidators by concentrating solely on cremation
          services and cremation products; and

     o    improving revenue and profitability of newly acquired
          operations by consolidating administrative and
          management functions within its organization.

The Company believes that implementing these initiatives are
critical to achieving profitability and are its most important
challenges in competing effectively in the death care industry.

In May 2001, Neptune changed its inventory procedures and sales
contracts to conform to its revised revenue recognition policy.
Under its revised revenue recognition policy, the Company
recognizes  certain pre-need merchandise revenues from the sale
of pre-need contracts prior to the performance of the related
cremation service.

Cremation service and merchandise revenues were $11,775,000 for
the year ended December 31, 2001 compared to $6,188,000 for the
same period in 2000.  Revenues increased $4,195,000, or 90%, due
to the recognition of pre-need merchandise revenue, increased
at-need revenues and travel assurance  product offering. During
the four month period beginning June 1, 2001 and ending
September 30, 2001, the Company recognized pre-need merchandise
revenues of $1,804,000.  Effective October 1, 2001, it  changed
inventory management policy and no longer recognized revenue on
the sale of pre-need merchandise.  The introduction of its
worldwide travel plan, which was introduced company-wide  during
the first quarter of 2001, contributed $1,905,000 to the
increase in revenues.

During the year ended December 31, 2001 and 2000, merchandise
sales of $5,097,000 and $4,326,000,  respectively, were deferred
as Neptune did not meet its revenue recognition criteria.  
Although such revenues were deferred, pre-need cremation
arrangement sales contract volume increased 18% over the same
period in 2000.

During the year ended December 31, 2001, the Company recognized
previously deferred pre-need  merchandise revenues and costs of
approximately $34,000 and $14,000, respectively, related to the
fiscal year 2000 cumulative effect of change in accounting
principle adjustment.

The Company believes that revenues were also lower during the
year ended December 31, 2001 as it suspended marketing
activities in Riverside, Imperial, San Bernardino and San Diego
Counties pending resolution resulting from litigation for
trademark infringement resulting from its use of the  "Neptune
Society" name in those counties. It suspended sales in these
areas, and estimates that the litigation caused revenues to
decline by approximately $350,000, or 3%, during the year ended  
December 31, 2001.  In October, 2001, the Company entered into a
settlement agreement to resolve the  litigation.  Under the
terms of the settlement agreement, Neptune is permitted to
market pre-need arrangement contracts under the name "Trident
Society."  The Company believes the settlement will not have a
material financial impact on operations; however,  it cannot
predict when, or if, revenues related to the affected areas will
return to historical levels.

Loss before cumulative effect of a change in accounting
principle was $10,151,000 and $8,435,000, for the year ended
December 31, 2001 and 2000, respectively. Net loss was
$10,151,000 and $8,839,000 for the year ended December 31, 2001
and 2000, respectively.

At June 30, 2002, Neptune had current assets of $3,321,000,
which was comprised of $887,000 in cash, $2,218,000 in accounts
receivable and $216,000 in prepaid expenses and other current
assets. It had  total current liabilities of $3,720,000,
comprised mainly of $1,389,000 in accounts payable, $1,424,000
in accrued liabilities, and $907,000 in the current portion of
long-term debt. It had long-term debt of $2,069,000, convertible
debentures with a carrying value of $5,827,000 and other long-
term liabilities of $996,000. It also had deferred pre-need
revenue of $15,642,000. Neptune had a working capital deficit of
$400,000 at June 30, 2002.

The Company has also guaranteed the payment of a $1,500,000
debt, due July 31, 2002 (extended to November 1, 2002), assumed
by the purchaser of its Portland, Oregon crematory operations.

Management had a net working capital deficit of approximately
$400,000 as of June 30, 2002. The Company carries outstanding
debt, including convertible debt, requiring annual cash interest
payments of approximately $1.1 million, payable in monthly
installments for the year ending December 31, 2002.  There is no
guarantee that any convertible debt will be converted; therefore
the maximum amount of interest payments have been projected.

The Company anticipates capital expenditures to amount to
approximately $200,000 for the year ending December 31, 2002.
These expenditures include office furniture and office and
computer equipment.

Neptune is obligated  under certain office rental, facility
rental, storage rental equipment rental,  temporary housing
rental and automotive rental agreements. Future lease payments
from 2003 through 2005 amount to $1.0 million.

The Company states that it may have to raise additional capital
to meet its obligations under the portions of long-term debt due
after 2002 and intends to raise the capital required to fund its
financing needs by issuance of debt and equity.  There can be no
assurance financing will be available or accessible on
reasonable terms.

Neptune estimates its total operating and capital budgets for
the fiscal year ended December 31, 2002  to be approximately $21
million.  There is no assurance that actual expenditures for the
fiscal year ending December 31, 2002 will not exceed the
estimated operating budgets.  Actual expenditures will depend on
a number of factors, some of which are beyond Company control
including, among other things, timing of regulatory approval of
its projects, the availability of financing on acceptable  
terms, reliability of the assumptions of management in
estimating cost and timing, the death and cremation rates in the
geographical locations that are served, consumer acceptance of
the pre need plans, changes in governmental regulation as they
relate to Neptune's business, certain economic and political
factors, the time expended by consultants and professionals and
fees associated with applications related to obtaining and
maintaining licenses for its locations and the professional   
fees associated with its reporting obligations under the
Securities Exchange Act of 1934.  If the  actual expenditures
for such costs exceed the estimated costs or if events occur
that require  additional expenditures, the Company will be
required to raise additional financing or to defer  certain
expenditures to meet other obligations.  If the Company cannot
raise adequate financing to fund its plan of operation, it may
be required to suspend its growth strategy; consolidate its  
operations through reductions in staffing, marketing and sales,
promotion and hours of operation; terminate its operations in
unprofitable or difficult to service markets; sell assets or
operations  in some of the markets it services and/or suspend
its operations in certain markets.  The failure to meet certain
expenditures may cause Neptune to default on material
obligations and such default may have a material adverse effect
on its business and results of operations.

Neptune expects operating cash flows, before debt servicing and
expansion expenditures, to be adequate to finance basic
operations. It anticipates that it will finance long-term debt,
additional acquisitions, if any, and growth, in part, by issuing
equity and/or debt securities.

KPMG LLP, in its Auditors Report for the year ended December 31,
2000, issued a statement concerning substantial doubt regarding
the ability of the Company to continue as a going concern.


NORTEL NETWORKS: Revises Q3 2002 Outlook & Plans Reverse Split
--------------------------------------------------------------
Nortel Networks Corporation (NYSE:NT)(TSX:NT.) expects revenues
from continuing operations in the third quarter of 2002 to be
lower than second quarter 2002 revenues from continuing
operations by approximately 15%. This compares to its previously
stated guidance of expected sequentially lower revenues in the
third quarter of 2002 of "up to approximately 10%." Further
deterioration in spending by service providers, generally in the
United States and for wireless networks in Asia, has resulted in
the revised outlook.

Despite the current revenue outlook, the Company continues to
expect that the impact of its ongoing restructuring will result
in a lower cost structure in the third quarter of 2002.
Factoring the uncertainty about the timing of a meaningful
recovery in the telecom market into its quarterly review
procedures regarding the potential realization of the income tax
assets on its balance sheet, the Company at this time
anticipates recognizing significantly lower than expected income
taxes against its loss for the third quarter. As a result, the
Company expects a marginally larger pro forma net loss from
continuing operations per share in the third quarter of 2002
compared to the second quarter of 2002.

Frank Dunn, president and chief executive officer, Nortel
Networks reiterated, "Despite the continued challenging market
environment, our top priority remains to return to profitability
by the end of June of 2003. We are progressing well in our
restructuring plan, and we will continue to monitor the market
and the spending environment and take additional actions, as
appropriate, to achieve our profitability goals." In addition,
the Company continues to assess its overall liquidity needs and
expects to enter into discussions with its banks regarding its
existing credit facilities (all of which are currently undrawn).

The Company also announced that it plans to present a proposal
to its shareholders for a consolidation of its outstanding
common shares (also known as a "reverse stock split") at its
annual meeting planned for spring 2003. The consolidation ratio
will be set by the Company's Board of Directors in early 2003 at
a level which would be expected at that time to result in an
initial post-consolidation common share price in the range of
US$10 to US$20, assuming receipt of shareholder and regulatory
approvals. As of the close of trading today, the 30-day average
closing share price for the Company's common shares has fallen
below the minimum continued listing requirements of the New York
Stock Exchange. The planned share consolidation proposal is
intended to satisfy such continued listing requirements.

Nortel Networks is an industry leader and innovator focused on
transforming how the world communicates and exchanges
information. The Company is supplying its service provider and
enterprise customers with communications technology and
infrastructure to enable value-added IP data, voice and
multimedia services spanning Metro and Enterprise Networks,
Wireless Networks and Optical Networks. As a global Company,
Nortel Networks does business in more than 150 countries. More
information about Nortel Networks can be found on the Web at
http://www.nortelnetworks.com  

                         *    *    *
  
As reported in Troubled Company Reporter's Wednesday Edition,
Standard & Poor's lowered its rating on Nortel Networks Lease
Pass-Through Trust to single-'B' from double-'B'-minus. The
outlook remains negative.

The rating on Nortel Networks Lease Pass-Through Trust is
dependent on the corporate credit rating of Nortel Networks
Ltd., which was lowered to single-'B' from double-'B'-minus on
September 18, 2002.

The pass-through trust certificates reflect security interests
in five single-tenant, office/research and development buildings
leased to Nortel. Nortel guarantees the payment and performance
of all obligations of the tenant under the leases.


NORTHWEST AIRLINES: Blaylock Initiates Coverage with Hold Rating
----------------------------------------------------------------
Blaylock & Partners' airlines and transportation analyst Ray
Neidl has initiated coverage of Northwest Airlines, Inc.,
(Nasdaq: NWAC) with "hold" rating.  Mr. Neidl delayed initiating
coverage of the airline until he had a better sense of when a
recovery will occur, which he believes will not be until 2Q03 at
the earliest.

In his equity reports, Mr. Neidl noted that Northwest Airlines
should rebound once the economy recovers.  The airline has
enough liquidity to carry it through to next year.  Reasons for
Mr. Neidl's "hold" recommendation include:

     -- NWAC -- Northwest's publicly traded debt is trading at
deeply discounted levels, which is attractive, as the airline is
not in danger of defaulting.  EBITDA is expected to turn
positive in 2002 to $271 million, and EPS for 2002 of negative
$4.21 is expected to turn positive to $0.97 in 2003.

Mr. Neidl also cites the reasons why he is not optimistic on the
industry in the short-term:

     -- The disappointing pace of economic recovery during the
summer, and no clear direction yet as to when the full recovery
will come

     -- General stock market weakness and continuing large
institutional sellers

     -- The slowdown in the industry recovery as reflected in
the continuing weak traffic and yield numbers

     -- Continuing high oil prices at around $30 barrel

     -- The threat of conflict in the Middle East and its
possible effect on travel and oil prices

     -- Additional costs and inconvenience on the traveling
public of beefed-up security procedures continue to affect
operations

     -- A certain segment of the traveling public's continuing
fear of flying due to terrorism

     -- The threat of a major industry player, UAL Corp., going
bankrupt, and its possible effect on the rest of the industry

     -- The continuing uncertainty and increased costs of
insurance

     -- The normally slow fall seasonal weakness of airline
travel and stock prices will also probably have a continuing
negative effect on stock prices.

Blaylock's ratings system consists of "buy," "hold" and "sell"
recommendations.  Investment banking stocks have a "not rated"
designation. Institutional investors interested in receiving
more information should contact Mr. Neidl at 212/715-6627 --
rneidl@blaylocklp.com   Journalists interested in receiving
copies of the research reports should contact Dao Tran at
dtran@starkmanassociates.com  

Based in New York, Blaylock & Partners, L.P., has been ranked by
Black Enterprise magazine as the number one minority-owned
investment banking firm for 1999 and 2000.  The firm has co-
managed four of the largest most recent IPOs - Travelers
Property Casualty Corp., Prudential Financial, Inc., Kraft Foods
Inc., and Agere Systems Inc.  Blaylock & Partners is a member of
the NASD and SIPC.

Blaylock & Partners, L.P. is a member of the National
Association of Securities Dealers, CRD number 35669.

Northwest Airlines Inc.'s 9.875% bonds due 2007 (NWAC07USR2) are
trading at 45 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NWAC07USR2
for real-time bond pricing.


OMEGA HEALTHCARE: S&P Affirms B Corporate Credit Rating
-------------------------------------------------------
Standard & Poor's Ratings Services affirmed its single-'B'
corporate credit rating on Omega Healthcare Investors Inc. At
the same time, ratings on the company's $100 million 6.95%
senior unsecured notes due 2007 and $107.5 million preferred
stock are affirmed. The outlook is revised to positive from
stable.

The outlook revision reflects ongoing improvements to this
health care REIT's business, its increased debt coverage
measures, and improved financial flexibility following its
rights offering and private placement.

Maryland-based Omega invests in and provides financing to the
long-term care industry. The company owns or holds mortgages on
233 skilled nursing and, to less of an extent, assisted living
facilities with approximately 24,400 beds located in 28 states
and operated by 36 independent health care operating companies.
Similar to other health care REITs focused on skilled-nursing
facilities, the company's operator base faced significant
challenges during the past few years (in part, as a result of
the implementation of the Prospective Payment System) that led
to operator bankruptcies, and lease/mortgage restructurings.
Omega's management team has done a commendable job of
renegotiating and restructuring lease/mortgage agreements with
troubled operators. As a result, the vast majority of the
company's primary operators (representing about 75% of
investments) are currently meeting their obligations, albeit at
reduced rates, and achieving approximately 1.2 times EBITDAR
coverage after a 4% management fee.

The company has also made good strides recapitalizing its
balance sheet. It has used proceeds from asset sales and
suspended dividends to reduce debt, refinanced some existing
debt to lower overall debt costs, and completed a $50 million
rights offering in February 2002 that enabled it to meet its
maturing debt obligations and achieve extensions on its secured
bank line agreements. Further, book value leverage of about 40%
at June 30, 2002 is down materially from roughly 55% in 1999,
although the favorable debt reduction has been offset by the
higher proportion of variable-rate short-term, bank debt that
now dominates the capital structure. Nonetheless, coverage
measures have benefited, as debt service coverage reached 2.4x
for the six months ended June 30, 2002, which is up dramatically
from just 1.3x for fiscal year 2001. Notably, Omega's fixed-
charge coverage continues to mirror its debt service coverage
since the company has suspended preferred dividend payments ($35
million of cumulative to date) since February 2001. Common
dividends (which had been running at roughly $55 million
annually two years ago) will likely be reinstated sometime in
early 2003, but at a materially lower level. Financial
flexibility, while improved, does remain constrained as the
majority of assets are encumbered by mortgages, and bank line
availability is modest, with about $207 million outstanding at
the end of the second quarter under the combined $225 million
lines, both of which appear to be currently well-collateralized.

                      OUTLOOK: POSITIVE

The company has worked through several tenant bankruptcies and
lease/mortgage negotiations while successfully meeting its
maturing debt obligations. Further, Omega's operating cash flow
continues to improve and when combined with proceeds from asset
sales, should provide the company with sufficient cash to meet
the $40 million cumulative preferred dividends in early 2003,
subject to Omega's board approval. Once the cumulative preferred
dividends are paid and future preferred dividends are
reinstated, Standard & Poor's will raise the preferred rating
from its current 'D' default status to triple-'C'-plus and
consider raising the corporate rating and senior unsecured
rating a single-notch to single-'B'-plus and single-'B'-minus,
respectively.


OWENS CORNING: Jackson & Hancock Want to Recover Settlements
------------------------------------------------------------
Like Owens Corning, Fibreboard was a long-time producer and
seller of products containing asbestos.  Beginning in the 1960s,
substantial numbers of product liability claims were being filed
against manufacturers of asbestos-containing products, including
Fibreboard and Owens.  In the 1980s and 1990s, Fiberboard
engaged in substantial litigation and negotiations regarding the
scope and extent of its insurance coverage in connection with
the asbestos claims.  By the end of 1996, Fibreboard and its
insurers entered into an irrevocable agreement under which the
insurers undertook to establish a $18,000,000,000 trust to pay
present and future asbestos claims against Fibreboard, in
exchange for which the insurers would have no further liability
to Fiberboard or to asbestos claimants.

Using funds provided by the Bank Group, Owens Corning acquired
Fiberboard in 1997, including its contractual entitlement and
its trust by Fiberboard's insurers for $660,000,000.

By this motion, Jackson National Life Insurance Company and John
Hancock Life Insurance Company, as members of a sub-committee of
the Official Committee of Unsecured Creditors, seek the Court's
authority to commence these three avoidance actions in behalf of
the Debtors:

-- An action for the purpose of avoiding and setting aside as a
   fraudulent conveyance the May 1997 acquisition by Owens
   Corning of the capital stock of Fibreboard, the assumption
   and repayment by Owens Corning of Fiberboard's debt and
   Fiberboard's transfer of assets to Owens Corning;

-- An action for the purpose of avoiding and setting aside as a
   fraudulent conveyance the claims which the Bank Group has
   asserted against certain of the Debtors and their non-Debtor
   affiliates arising out of inter-corporate guarantees and
   security interests in support of the $ 1,500,000,000 of
   prepetition loans and advances made by the Bank Group to one
   or more of the Debtors, or alternatively to equitably
   subordinate the claims to other claims against the Debtors;
   and

-- An action to avoid as fraudulent transfers dividend paid to
   the Debtors' shareholders between 1996 and 2000 and to
   recover the dividends for the Debtors' estates.

Francis A. Monaco, Esq., at Walsh Monzack and Monaco PA, in
Wilmington, Delaware, tells the Court that Jackson and John
Hancock have reason to believe that Fiberboard and the Debtors
were already insolvent at the time of the acquisition.  If their
suspicions are true, Mr. Monaco says, the Debtors could not have
received reasonably equivalent value for the acquisition and,
thus, the acquisition was a fraudulent transfer.

A number of inter-corporate guarantees and stock pledges were
made for the benefit of the Bank Group in connection with the
documentation of the credit facility.  Mr. Monaco relates that
Jackson and John Hancock also suspect that the Debtors and their
non-Debtors were:

* insolvent at the time the documentation was entered into,

* were rendered insolvent by the acquisition transaction, or

* subsequently, were rendered insolvent by the conveyance and
  operation of the stock pledges and inter-corporate guarantees
  in question.

In any event, Mr. Monaco says, the Debtors and their affiliates
did not receive reasonably equivalent value.  The guarantees and
stock pledges in question must be avoided and set aside, or in
the alternative, equitably subordinated.

The Debtors paid $61,000,000 in dividend from 1996 to 2000.  Mr.
Monaco insists that the dividend payments qualify as transfers
under the Uniform Transfer Act in effect in Delaware, Owens
Corning's state of incorporation and Ohio, Owens Corning's
principal state of business.  Since the Debtors were already
insolvent at the time of the transfers, they received no value
for the payment of the dividends.  Thus, the funds paid out
should be returned to the Debtors as fraudulent transfers.

                        Debtors Respond

Norman L. Pernick, Esq., at Saul Ewing LLP, in Wilmington,
Delaware, tells the Court there is no reason to grant the sub-
committee's motion as far as the avoidance action on the Bank
Group's guarantees are concerned because the Debtors will be
proceeding with the action on October 4, 2002.

The Debtors, however, have determined not to assert either the
Fibreboard Action or the action on the dividends due to concerns
about the merits of the actions and the recoveries that may
actually be realized.  But should the Court grant the sub-
committee's motion, Mr. Pernick explains that the Debtors will
not object so long as the sub-committee will not proceed with
the action on the Bank Group's guarantees. (Owens Corning
Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


PACIFIC GAS: Wants to Defray $5.6MM Additional Misc. Plan Costs
---------------------------------------------------------------
Pacific Gas and Electric Company seeks the Court's authority to
incur additional miscellaneous expenses of $5,602,810 for
projects in connection with Plan Implementation.

                     A. GTrans Business Processes

1. Credit Evaluations (Cost Estimate -- $40,000)

   PG&E purchases electricity from QF customers pursuant to
   Qualifying Facilities agreements.  Conversely, PG&E
   provides QF customers with gas and electric transmission
   services.  PG&E currently may offset payments to the QF
   customers with amounts due from the QF customers.  The
   ability to offset payments is a consideration in determining
   the creditworthiness of these QF customers.

   Upon separation from PG&E, GTrans will provide gas
   transmission services to the QF customers but will not buy
   electricity from them.  Therefore, GTrans will not be able to
   evaluate creditworthiness based on offset payments but will
   have to incur expenses to perform credit evaluations for 80
   customers who hold Qualifying Facilities agreements with
   PG&E.

   PG&E has selected a management consulting and engineering
   firm, ESS Consulting, to perform the credit evaluations.

2. Virtual Metering (Cost Estimate -- $140,000)

   After the Plan Effective Date, GTrans will be a gas
   transmission business and PG&E will be one of its customers
   for gas deliveries.  In order to bill PG&E for gas
   deliveries, GTrans will need to measure the quantity of gas
   delivered to PG&E.  Currently, over 5,000 interconnection
   points between what will be the GTrans gas transmission
   system and the PG&E gas distribution system are not metered.

   In view of the large number of interconnection points, it is
   not economically feasible to install meters.  Therefore,
   instead of meters, PG&E intends to measure the gas deliveries
   by a "virtual metering" methodology, which has been proposed
   pursuant to the Metered Quantity Determination Agreement.  As
   part of PG&E's applications filed on November 30, 2001 with
   the Federal Energy Regulatory Commission to approve the
   transactions contemplated by the Plan, PG&E filed the
   proposed MQDA and requested FERC's approval for its virtual
   metering methodology.

   In order to create virtual metering, a new database on gas
   delivery information will need to be developed.  PG&E has
   selected two applications developers from Blackstone
   Technology Group to design, develop and implement the new
   database, working with PG&E business and systems analysts.
   Blackstone Technology Group is a consulting firm specializing
   in utility application solutions.

               B. Reorganized PG&E Business Processes

To establish important PG&E business processes that need to be
developed as a result of the separation contemplated by the
Plan, PG&E needs:

1. Software Licenses And Related Expenses (Cost Estimate --
   $9,200)

   Currently, PG&E Corporation provides certain services to PG&E
   utilizing software products that are licensed by PG&E
   Corporation.  As a result of the separation under the Plan,
   PG&E must purchase and install several software products so
   that it will be able to perform the functions internally.

   PG&E will need to purchase software:

   a. to track employee contributions to PG&E's political action
      committee;

   b. to manage PG&E's pension and pension benefits funds;

   c. to train PG&E employees over the Internet on business
      ethics and compliance with legal and regulatory
      requirements;

   d. to track risk management and insurance requirements; and

   e. for tax return preparation and tax solutions.

2. Stock Option Management (Cost Estimate -- $25,000)

   PG&E Corporation currently administers a stock option plan
   for PG&E employees who hold options to purchase PG&E
   Corporation stock.  Pursuant to the Plan, employees who hold
   options to purchase PG&E Corporation stock will also be
   granted options to purchase PG&E stock, which will be
   publicly traded after the Plan Effective Date.  Therefore,
   PG&E will require a new PG&E stock option plan.

   PG&E has selected Salomon Smith Barney, a member of Citigroup
   (Salomon), to develop a system for administering the new
   stock option plan.

                  C. New Entity Business Processes

PG&E has identified several projects related to the business
operations of all of the New Entities, which must be completed
by or in advance of the Plan Effective Date.  For these
operations, PG&E will need certain software and related
services:

1. Human Resources Software (Cost Estimate -- $75,810)

   a. "Heidi/Assistant" -- for Random Drug Testing in order to
      comply with Department of Transportation regulations for
      certain classes of employees;

      PG&E intends to purchase a software license for the New
      Entities from Compliance Information Systems for $6,590,
      which includes the software and support for 2,500 tests
      per year;

   b. "Great AAP" -- to create and manage affirmative action
      plans to comply with state and federal regulations;

      PG&E intends to purchase the software license from
      Berkshire Associates, Inc. for $2,995, which includes the
      Great AAP Master Edition Single License and one year of
      technical support;

   c. "Training Server" -- to manage training;

      PG&E intends to purchase this software license from THINQ
      Learning Solutions Inc. for $20,000 and to pay THINQ
      $40,000 for the installation, configuration and testing;

   d. "Scan Tools" -- for Employee Testing from NCS Pearson for
      $1,725 and the EEI Scanner Software from the Edison
      Electric Institute for $4,500.

   PG&E intends to obtain the necessary software licenses and to
   transfer the licenses to the New Entities upon the Plan
   Effective Date.  If the Plan is not confirmed, PG&E
   anticipates that it will be able to use all of the software
   tools, which represent current (and therefore upgraded)
   versions of software already in use by PG&E.

2. Banking & Money Management (Cost Estimate -- $195,800)

   a. Cash Management Software and Related Services

      PG&E currently licenses Resource IQ software, which it
      uses to manage its daily cash position and to record
      banking transactions to the general ledger accounting
      system. Therefore, for the New Entities, PG&E intends to
      purchase a similar license from Sunguard Treasury Systems,
      a banking software specialist, at a cost of $110,950.  
      Software consultants from Sunguard will assist with the
      installation, configuration and implementation of Resource
      IQ at an additional cost of $32,000.  In addition, PG&E
      will purchase a license for Mellon Bank's Telecash
      software for the New Entities at a cost of $350.  This
      software is used to approve wire transfers of money to and
      from Mellon Bank initiated through the Resource IQ
      software system.

   b. Banking Relationship Software and Related Services

      PG&E currently uses Banking Relationship Manager software
      to analyze banking fees and services.  For the New
      Entities, PG&E contemplates purchasing a license for
      Banking Relationship Manager software from The Weiland
      Financial Group, a financial services consulting firm, at
      a cost of $20,500.  Weiland will also provide one or more
      consultants who will assist PG&E in separating the data
      currently stored in the Banking Relationship Manager
      software used by PG&E.  The cost for the consultants'
      services will be $2,000.

   c. Project Management

      PG&E has selected Boil and Company, Inc., a cash
      management consulting firm, to provide project management
      services in connection with the implementation of the
      banking and money management processes for the New
      Entities at a cost of $30,000.

3. Electronic Data Interchange (Cost Estimate -- $90,000)

   GE Global Exchange Services currently provides an Electronic
   Data Interchange program for PG&E's purchasing and accounts
   payable functions.  The EDI program allows PG&E to
   communicate electronically with its vendors and exchange
   purchase orders, purchase order changes and invoices
   electronically.  It also permits PG&E to pay vendors via
   Electronic Funds Transfer. PG&E has selected GE Global
   Exchange Services to provide a similar EDI program for the
   New Entities.

4. Procurement Management (Cost Estimate -- $270,000)

   It is estimated that the New Entities collectively will
   spend $200,000,000 per year on materials (including supplies
   and equipment) and $300,000,000 per year on services
   (including consulting services and technical assistance).

   In order for the New Entities to be prepared to commence
   business operations by the Effective Date, PG&E intends to
   implement certain procurement processes in advance of the
   Effective Date.  Significant portions of this project will be
   handled by PG&E, including, for example, the configuration of
   the new Materials Management System to be utilized by the New
   Entities.  However, PG&E will require the assistance of
   consultants in connection with this project and also
   anticipates incurring certain printing costs.

   a. Project Management

      Russell Harris of Source California Energy Services will
      provide project management services.  PG&E estimates that
      the cost for these services will be $135,000.  Stan
      Miyamoto of Stan Miyamoto Consulting will provide project
      management support as well as oversee the coordination of
      this project with the related materials distribution
      center project.  PG&E estimates that the cost for Mr.
      Miyamoto's services will be $25,000.

   b. Consultants with Procurement Expertise

      Three outside consultants will be needed to provide
      expertise and recommendations in the areas of warehouse
      management, paperless procurement and e-commerce
      technology.  PG&E has not yet selected the consultants but
      estimates a total cost of $75,000 for these services,
      based on its past experience with similar consultants and
      preliminary discussions to date with potential
      consultants.

   c. Printing of Materials

      PG&E estimates that it will incur $35,000 for printing of
      training manuals, policies and procedures manuals, and
      other materials related to procurement procedures for use
      by the New Entities.

5. Accounting Processes And Procedures (Cost Estimate --
   $1,500,000)

   Currently, PG&E's principal accounting system is provided
   through a client server application developed by SAP America,
   Inc.  PG&E also uses more than 80 other software applications
   that support information recorded in the SAP accounting
   system and perform other accounting functions.

   By the Plan Effective Date, the New Entities will require
   accounting systems and applications that are fully
   implemented and operational in order to maintain their books
   and records.

   PG&E has selected PricewaterhouseCoopers, a global accounting
   and financial services firm, to assist with the development
   of accounting processes and procedures for the New Entities.

   PG&E estimates that the accounting process and procedures
   work to be performed by PwC (and related work to be performed
   by PG&E) will take six months.  This project is designed to
   provide only the basic accounting requirements for the New
   Entities and PG&E.  PG&E estimates that the total cost for
   PwC's services will be $1,500,000.

                D. General Implementation Expenses

1. Transactional Agreements And Schedules (Cost Estimate --
   $257,000)

   Implementation of the Plan will require the creation of up to
   100 separate agreements, most of which will have several
   schedules.  Some of the schedules are expected to take up
   thousands of pages and will be maintained on computer discs
   rather than in paper format.

   PG&E has selected ZIA Information Analysis Group, Inc. to
   provide data management support for this project.

2. Permit And Franchise Application Fees (Cost Estimate --
   $3,000,000)

   Pursuant to the Permits Motion, PG&E obtained authority to
   hire various consultants to assist it with the process of
   obtaining the necessary permits and franchises for the New
   Entities.  PG&E subsequently obtained authority to incur
   additional expenses related to the permit transfer process.

   Since the previous motions were approved, PG&E and its
   consultants have contacted many of the applicable government
   entities to begin the lengthy process of arranging for the
   Permits and Franchises to be in place in advance of the Plan
   Effective Date.  In some cases, applications have been
   submitted. Some government entities are requesting that PG&E
   submit application fees and/or cost recovery fees.  In
   addition, upon issuance of Franchises, PG&E may be required
   to post a surety or performance bond to secure performance.  
   PG&E anticipates that it will have bonding capacity and will
   therefore only need to pay bond premiums.  At this time, PG&E
   does not know the exact amount of the Application Fees or
   bond premiums that will be owed, but PG&E estimates that it
   could be $3,000,000.

PG&E seeks approval for the various implementation expenses as a
use of estate property that is outside of the ordinary course of
business under Bankruptcy Code Section 363(b)(1). (Pacific Gas
Bankruptcy News, Issue No. 45; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


PACIFIC GAS: Plan Confirmation Hearings to Begin on November 18
---------------------------------------------------------------
The U.S. Bankruptcy Court ruled that the confirmation hearings
in Pacific Gas and Electric Company's Chapter 11 case will begin
on November 18, 2002.

"We are pleased PG&E's reorganization plan continues to move
forward in a timely manner and that the Bankruptcy Court did not
agree with the California Public Utilities Commission's request
for a significant delay," said Roger J. Peters, Pacific Gas and
Electric Company's senior vice president and general counsel.

As previously determined by the Bankruptcy Court, it will hear
each confirmation case separately, beginning with the plan
submitted by the CPUC and then moving to PG&E's reorganization
plan immediately afterwards.

At the beginning of Wednesday's hearing, the CPUC requested the
confirmation hearing be postponed, in light of Monday's Ninth
Circuit Court of Appeals decision that threw into question the
CPUC's settlement with Southern California Edison Company.  The
CPUC's legal counsel indicated that the decision raised
questions about the confirmability of its plan.  The CPUC later
indicated it was ready to proceed with its plan in November.

Recent events confirm PG&E's strong belief that it has developed
the only practical solution that allows the utility to emerge
from Chapter 11 as a financially healthy, investment-grade
company, pays creditors in full with interest and gives the
State of California a clearly defined path to exit the power
buying business.  PG&E's plan achieves these objectives without
asking the Bankruptcy Court to raise rates or customers for a
bailout.


PENN MUTUAL: Fitch Ups Ratings on Series 1996-PML P-T Certs.
------------------------------------------------------------
Fitch Ratings upgrades Penn Mutual Life Insurance Company's
commercial mortgage pass-through certificates, series 1996-PML,
$11.7 million class E to 'AAA' from 'AA', $23.4 million class F
to 'AAA' from 'AA-' and principal only class P to 'AAA' from
'BBB'. Fitch also upgrades the following classes: $19.5 million
class G to 'AA' from 'BBB+', $23.4 million class H to 'A' from
'BBB-', $15.6 million class J to 'BBB' from 'BB', $23.4 million
class K to 'BB+' from 'B+', $15.6 million class L to 'BB-' from
'B' and $11.7 million class M to 'B' from 'CCC'. In addition,
Fitch affirms the $24.4 million class B, notional class X-1 and
X-2, $31.3 million class C and $35.1 million class D at 'AAA'.
Fitch does not rate the $12.9 million class N. The ratings
upgrades and affirmations follow Fitch's annual review of the
transaction, which closed in August 1996.

The upgrades are primarily due to increased subordination levels
caused by the reduction in certificate balance combined with
stable operating performance. As of the September 2002
distribution, the deal has paid off 68.5% since issuance to
$245.9 million from $781.6 million at issuance. In addition,
78.6% of the loans in the pool are out of the prepayment lockout
period and approximately half of the loans have an interest rate
at or above 9.0%. Given the current interest rate environment,
Fitch expects the deal to continue to experience significant
paydown. Midland Loan Services, the master servicer, collected
year-end 2001 financials for 95.0% of the pool. Loans that
reported financials at year-end 2000, YE 2001, and at issuance
represented 84.7% of the pool. These loans had a weighted
average debt service coverage ratio of 1.72 times for YE 2001
compared to 1.71x in YE 2000 and 1.35x at issuance.

This pool benefits from loan seasoning. The weighted average
seasoning is 10.8 years. Another strength of the deal is the
staggered maturity concentration. The highest amount of loan
maturites occur in 2004 representing only 12.06% of the pool

Currently there are five loans, representing 8.2% of the pool,
on the master servicer's watchlist. Three of the five loans are
on the watchlist due to upcoming maturities. All of these loans
have demonstrated a stable operating performance. The remaining
two loans are on the watchlist because of occupancy problems.
Both of these loans remain current. The first loan is a retail
property located in Gurnee, IL. The anchor tenant, Piggly
Wiggly, vacated the property in September of 2001. There are no
prospective tenants at this time and the borrower is currently
marketing the property for sale. The other loan is an office
property located in Deerfield, IL. The property has a history of
occupancy problems. The YE 2001 occupancy was 44.2% which is an
increase from 30.0% in YE 2000. The servicer indicated that the
borrower was asking below market rents and that the property was
in good condition with no significant deferred maintenance. In
addition to these loans on the watchlist, there is one loan that
in foreclosure representing 1.4% of the outstanding loan
balance. The property is a single tenant office building located
in Georgetown, MA. The loan originally transferred to special
servicing because the tenant, Salomon, vacated the building.
Subsequently, the borrower filed bankruptcy on February 26, 2002
which has delayed the foreclosure process. Currently the
building is 100% occupied by High Tech Hose, a London based
firm. There are currently no other delinquent loans in the
transaction.

Fitch believes that the increased subordination levels caused by
the reduction of the certificate balance, the stable operating
performance of the loans, and the low amount of delinquent loans
warrant the upgrades for this transaction. Fitch will continue
to monitor this transaction, as surveillance is ongoing.


PENN TRAFFIC: Ups Promo Spending to Combat Market Competition
-------------------------------------------------------------
Penn Traffic, headquartered in Syracuse, New York, plans to
invest on additional promotional spending in wake of expected 28
competitive openings, including nine supercenters, F&D Reports'
Monday edition said.

The Company is on track with its capital expenditure program for
the current fiscal year and expects to invest approximately
$60.0 million in its store base and infrastructure.  Included in
these expenditures are five new store openings and 12 major
store remodels.  This comes on top of the $170.0 million Penn
Traffic spent over the past three years to remodel, enlarge or
replace 94 of its 216 supermarkets, representing 50% of its
square footage.

                          *   *   *

As previously reported, Penn Traffic obtained a waiver of a
default under its $205 million secured revolving credit and term
loan agreement funded -- according to data obtained from
http://www.LoanDataSource.com-- by Fleet Capital Corporation,  
GMAC Business Credit, LLC, AmSouth Bank, Bank of America
National Trust and Savings Association, Heller Financial, Inc.,
LaSalle Business Credit, Inc., Citizens Business Credit Company,
The CIT Group/Business Credit, Inc., IBJ Whitehall Business
Credit Corporation, Foothill Capital Corporation, TransAmerica
Business Credit Corporation, Sovereign Bank And The Provident
Bank.

The lending consortium agrees to forbear until October 31, 2002,
and continue providing working capital financing to Penn
Traffic, Dairy Dell, Inc., Big M Supermarkets Inc. and Penny
Curtiss Baking Company Inc.


PENNEXX FOODS: Plans Equity Infusion to Dodge Potential Default
---------------------------------------------------------------
Pennexx Foods, Inc. (OTC Bulletin Board: PNNX), a leading
provider of case-ready meat to retail supermarkets in the
Northeast, announced that the costs of vacating its former plant
in Pottstown, Pennsylvania and of opening its new plant in
Philadelphia will contribute to a loss in the quarter annual
period ending September 30, 2002.

Michael D. Queen, President of the Company said, "Because of the
magnitude of the move, we estimate that the Company's net loss
for July 2002 approximated $1.2 million, and that the net loss
for August 2002 approximated $0.3 million. Additional expenses
related to the relocation, including installation and training
costs, will also weigh on the results of operation for September
and October, and possibly, later into the fall."

The Company's July results included a non-cash write-off of
approximately $200,000 in improvements at the Pottstown plant,
and an estimated loss of contribution of between $500,000 and
$600,000 due to the temporary subcontracting of pork production
to Smithfield Foods, Inc., during the move. The Company's
accounting policy is to expense all moving related expenses.
This policy has increased the size of the losses as compared to
the amounts which would have been reported if certain of such
costs had been capitalized.

The Company's Board of Directors is considering the raising of
additional equity to improve its balance sheet through an
additional equity contribution from Smithfield Foods, Inc. or
other third parties. Such an equity infusion would not only
improve the Company's liquidity which has deteriorated due to
the losses, but would also provide some additional protection
against a potential default under the Company's Credit Agreement
(with Smithfield Foods, Inc.), which requires the Company to
maintain positive shareholders' equity. (The Company estimates
that shareholders' equity at August 31, 2002 was $ 250,000.) Of
course, there is no assurance that such equity will be available
on terms acceptable to the Company.

Mr. Queen reported that the Philadelphia facility's conversion
to new automated, state-of-the-art equipment would be completed
within the next 90 days. "From that point forward," said Mr.
Queen, "we expect Company efficiencies to increase substantially
and return the Company to profitability."

Established in 1999, Pennexx Foods, Inc., is a leading provider
of case-ready meat to retail supermarkets in the northeastern
U.S. The company currently provides case-ready meat within a
300-mile radius of its plant to customers in the Northeast in
order to assure delivery of product with an extended shelf life.
The company cuts, packages, processes and delivers case-ready
beef, pork, lamb and veal in compliance with the United States
Department of Agriculture regulations. Pennexx customers include
many significant supermarket retailers.

In June 2001, Smithfield Foods, Inc., (NYSE: SFD) acquired 50%
of the common stock of Pennexx Foods, Inc.

Smithfield Foods has delivered a 26 percent average annual
compounded rate of return to investors since 1975. With
annualized sales of $8 billion, Smithfield Foods is the leading
processor and marketer of fresh pork and processed meats in the
United States, as well as the largest producer of hogs. For more
information, please visit http://www.smithfieldfoods.com


PEREGRINE SYSTEMS: Look for Schedules & Statements around Nov. 5
----------------------------------------------------------------
Peregrine Systems, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware for more time to
prepare and file their Schedules of Assets and Liabilities and
Statements of Financial Affairs.

The Debtors report that they have over 15,000 potential
creditors.  The conduct and operation of their businesses
require the Debtors to maintain voluminous books and records and
a complex accounting system.  Due to the number of creditors,
the complexity of their businesses and the diversity of their
operation and assets, the Company needs more time to comply with
the disclosure obligations imposed under 11 U.S.C. Sec. 521(1)
and Rule 1007 of the Federal Rules of Bankruptcy Procedure.  

The Debtors tell the Court that they need until November 5, 2002
to complete their schedules and statements and file that
mountain of paper with the Court.

Peregrine Systems, Inc., the leading global provider of
Infrastructure Management software, filed for chapter 11
protection on September 22, 2002. Laura Davis Jones, Esq., at
Pachulski, Stang, Ziehl Young & Jones represent the Debtors in
their restructuring efforts.  When the Company filed for
protection from its creditors, it listed estimated debts and
assets of more than $100 million.


PEREGRINE SYSTEMS: Receives Court Approval of First Day Motions
---------------------------------------------------------------
Peregrine Systems, Inc., (OTC: PRGNQ) has received U.S.
Bankruptcy Court approval of $60 million of interim debtor-in-
possession financing for immediate use by the company to fund
ongoing operations during its voluntary Chapter 11
reorganization under the U.S. Bankruptcy Code.  Among other
actions, the court also has approved payment of pre-petition and
post-petition employee wages, healthcare insurance and other
employee benefits.

The $60 million of interim DIP financing is part of the $110
million commitment from BMC Software, Inc. (NYSE: BMC).  The
final hearing regarding approval of the DIP financing has been
set for Oct. 15, 2002.

BMC Software also agreed to acquire all of the assets of
Peregrine's Remedy(R) business unit for $350 million and to
assume substantially all of its liabilities.  To facilitate the
transaction, Peregrine Remedy, Inc., has also filed a voluntary
Chapter 11 petition.  The sale agreement is subject to approval
by the U.S. Bankruptcy Court for the District of Delaware, under
Section 363 of the U.S. Bankruptcy Code.

At hearings conducted on Peregrine's "first day motions," the
court also approved employee pay, reimbursable expenses, the
company's severance program and insurance benefits, including
medical, dental, workers compensation insurance and vision care,
during its voluntary Chapter 11 reorganization.  In addition,
the company was authorized to continue, in the ordinary course
of business, all of its customer-related practices and programs.

Gary Greenfield, Peregrine CEO, said he was "extremely pleased
with the Bankruptcy Court's approval of its 'first-day' motions
and interim DIP financing.  We appreciate the court's prompt
action on these first-day orders, especially those authorizing
the continuation of employee wages and healthcare benefits as
well as our customer programs."  In addition, Greenfield said
that the interim DIP financing will be used for post-petition
trade and vendor obligations, among other things.

Peregrine filed voluntary petitions for reorganization under
Chapter 11 of the U.S. Bankruptcy Code on Sept. 22, 2002 in the
U.S. Bankruptcy Court for the District of Delaware in
Wilmington.

Founded in 1981 and headquartered in San Diego, Calif.,
Peregrine Systems is the leading global provider of
Infrastructure Management software. Market-leading application
suites delivered by Peregrine and Remedy product lines address
diverse customer needs to better manage and extend the life of
infrastructure and manage business services.  Peregrine's
Service Management and Asset Management solutions empower
companies to support and manage assets with best practice
processes.  Remedy's comprehensive suite of packaged
applications, including IT Service Management and Customer
Support solutions, enable customers to improve reliability and
quality of service for both internal and external service
management.  Remedy's Action Request System(R) provides a
comprehensive platform to deliver business process authoring
capabilities to meet the unique requirements of organizations
today and into the future.


POLAROID CORP: Wants More Time to Remove Prepetition Actions
------------------------------------------------------------
According to Eric M. Davis, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, in Wilmington, Delaware, Polaroid
Corporation and its debtor-affiliates require additional time to
determine which of the State Court Actions they will remove to
the Delaware Bankruptcy Court for continued litigation and
resolution.  The Debtors are parties to over 50 different
judicial and administrative proceedings currently pending in
various courts or administrative agencies throughout the
country.  The Actions involve a wide variety of claims --
environmental, commercial, employment-related, product
liability, trademark and patent litigation -- some of which are
extremely complex.

Accordingly, the Debtors ask the Court to further extend the
deadline to remove prepetition actions to the later of:

  (a) January 31, 2003; or

  (b) 30 days after entry of an order terminating the automatic
      stay with respect to any particular action sought to be
      removed.

Pursuant to Rule 9006(b) of the Federal Rules of Bankruptcy
Procedure, Mr. Davis asserts that the extension should be
granted since:

  (a) it will afford the Debtors with sufficient opportunity to
      make fully-informed decisions on the possible removal of
      Actions;

  (b) it will protect the Debtors' valuable right economically
      to adjudicate lawsuits pursuant to Section 1452 of the
      Judiciary Procedures Code if the circumstances warrant
      removal;

  (c) the Debtors have made significant achievements to date in
      their Chapter 11 cases;

  (d) the Debtors' adversaries will not be prejudiced by the
      extension as they may not prosecute the Actions absent
      relief from the automatic stay; and

  (e) this Motion will not prevent any party to a proceeding
      that the Debtors seek to remove from pursuing a remand
      pursuant to Section 1452(b) of the Bankruptcy Code.

The Court will convene a hearing to consider the Debtors'
request on November 12, 2002.  By application of Del.Bankr.LR
9006-2, the deadline by which the Debtors must make decisions
about lease dispositions is automatically extended through the
conclusion of that hearing. (Polaroid Bankruptcy News, Issue No.
24; Bankruptcy Creditors' Service, Inc., 609/392-0900)

DebtTraders reports that Polaroid Corporation's 11.50% bonds due
2006 (PRDC06USR1) are trading at 5.5 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=PRDC06USR1
for real-time bond pricing.


PREVIO INC: Files Cert. of Dissolution with Delaware State Sec.
---------------------------------------------------------------
Previo, Inc., (Nasdaq: PRVO) filed a certificate of dissolution
with the office of the Secretary of State of the state of
Delaware in accordance with the plan of dissolution previously
approved by the stockholders on September 17, 2002.

As a result, Previo's stock transfer books were closed as of the
end of trading Wednesday (Sept. 23, 2002), and it has ceased the
issuance and recording of the transfer of shares of its common
stock.  Also effective Wednesday, Previo has voluntarily
delisted from the Nasdaq National Market. The record date for
purposes of determining stockholders that will be eligible to
participate in any distributions made by Previo is September 25,
2002.

As also previously announced, on September 17, 2002, Previo
obtained approval by its stockholders for the sale of
substantially all of its non-cash assets to Altiris, Inc. for
consideration totaling $1,000,000 cash.  On September 24, 2002
Previo and Altiris, Inc., formally completed this transaction.


PURCHASEPRO.COM: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Purchasepro.Com, Inc.
        3391 Buffalo Drive, Suite 9
        Las Vegas, Nevada 89129
        dba Purchase Pro, Inc.

Bankruptcy Case No.: 02-20472

Type of Business: Purchasepro.com offers strategic sourcing and
                  procurement software solutions.

Chapter 11 Petition Date: September 12, 2002

Court: District of Nevada (Las Vegas)

Judge: Robert C. Jones

Debtor's Counsel: Gregory E. Garman, Esq.
                  Gorcion & Silver, Ltd.
                  3960 Howard Hughes Parkway, 9th Floor
                  Las Vegas, Nevada 89109
                  (702) 796-5555

Total Assets: $41,943,000

Total Debts: $20,058,000

Debtor's 20 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
Chayenne Investments, Inc.                          $4,643,277
3291 N. Buffalo Drive
Suite 1
Las Vegas, Nevada 89129

Compaq Computer Corporation                           $868,892          
PO Box 281858
Atlanta, GA 30384-1858

Advanstar Communications, Inc.                        $868,892
PO Box 64584
Saint Paul, MN 55154-0564

Computer Associates                                   $472,000
Dept. 0730
PO Box 120001
Dallas, TX 75312-0730

Arrow Electronics                                     $200,000

Alta Vista Company                                    $175,000

ADP Investor               Shareholder Services       $149,627
Communication Services             

Aces International                                    $123,696

Wilson Sonini Goodrich &   Prof. Services Rendered    $110,271
Rosati

Directcolor Invoice                                    $72,520

Exodus Communications, Inc.                            $63,667

Grant Thornton LLP         Prof. Services Rendered     $62,807

MGM Mirage                                             $42,000

Sklar, Warren, Conway                                  $33,922

GATX Technology ECR Portfolio                          $33,142

Ogata, Setsuko             Services                    $31,500

Morris Pickering & Sanner  Prof. Services Rendered     $29,149

Brobeck Hale & Dorr                                    $29,026

Ernst & Young LLP          Prof. Services Rendered     $29,015

Pondell/Wilkinson MS&L     Prof. Services Rendered     $27,136


REUNION INDUSTRIES: Closes Sale of Kingway Division for $32 Mil.
----------------------------------------------------------------
Reunion Industries, Inc., (Amex - RUN) has completed the sale of
its Kingway Material Handling Division for $32 million in cash
and notes.

Anticipated use of the cash proceeds from the sale is to reduce
bank debt. Future proceeds from the notes are contingent upon
Kingway's future operating results. Kingway designs,
manufactures and installs high quality, integrated material
handling systems for distribution centers for mass merchandisers
and grocery retailers.

Reunion President Kimball Bradley stated in his comments, "This
is an important step towards meeting the challenges we faced
during the last 18 months and going forward. We can now focus on
improving our operations and rebuilding customer and vendor
relationships. Among the benefits of this divestiture is that it
alleviates our dependence on large capital projects and
eliminates progress billings, which historically have been a
tremendous strain on our liquidity. We're now better positioned
to complete our previously announced restructuring plan and
rebuild our continuing businesses."

Reunion manufactures and markets a broad range of metal and
plastic products and parts, including seamless steel pressure
vessels, fluid power cylinders, leaf springs, high volume
precision plastics products and thermoset compounds and provides
engineered plastics services. Reunion Industries is
headquartered at 11 Stanwix Street, Suite 1400, Pittsburgh, PA,
15222.

Reunion's June 30, 2002 balance sheet shows a working capital
deficit of about $63 million, and a total shareholders' equity
deficit of about $25.6 million.


SAGENT: Nasdaq Approves Listing Transfer to SmallCap Market
-----------------------------------------------------------
Sagent (Nasdaq:SGNT), a leading provider of enterprise business
intelligence solutions, announced Nasdaq Stock Market approval
of its application to list its common stock on the Nasdaq
SmallCap Market, effective at market opening on Sept. 26, 2002.
The company's ticker symbol remains the same, "SGNT". Sagent
also announced its decision against pursuing a 1-for-10 reverse
stock split, as disclosed on July 30, 2002, at this time.

"We believe that these decisions are in the best interests of
our stockholders and our own profitability targets," said Steve
Springsteel, Sagent chief operating officer and chief financial
officer. "When we reported second-quarter 2002 results on July
30, we reiterated our plans for EBITDA break-even at year-end
2002. Voluntarily transferring our listing from the Nasdaq
National Market to the Nasdaq SmallCap Market will enable us to
keep these plans on track by avoiding the expense of a special
stockholders' meeting to approve the proposed reverse stock
split. Moreover, as an alternative to potential delisting and
relegation to the over-the-counter bulletin board, the move will
maintain Sagent's presence on Nasdaq and stockholders' access to
all current trading information and price quotations."

Sagent plans to report its third-quarter 2002 results after the
close of market on Oct. 22, 2002.

Sagent provides a complete software platform for business
intelligence, enabling companies to reduce operational costs,
increase profitability and improve customer relationships.
Sagent employs a unique business intelligence life-cycle process
that facilitates the rapid development of custom analytic
solutions and helps bridge the gap between business users and
information technology. Through its technology, services and
business expertise, Sagent simplifies business intelligence for
more than 1,500 customers worldwide. Sagent customers include:
AT&T, Boeing Employees Credit Union, BP Amoco, Carrefour,
Citibank, GPU Energy, Guinness UDV, Heineken, Kawasaki, Kemper
National Insurance, La Poste, Novartis, NTT-DoCoMo, Sara Lee,
Siemens, and Singapore Telecom.

Sagent technology is also embedded in multiple partner solutions
that address the needs of specific vertical and functional
application areas; key ISV partners include Advent Software,
Hyperion Solutions and HAHT Commerce. Sagent technology has been
adopted by leading regional and global systems integrators, such
as Cap Gemini Ernst & Young, Satyam and Unisys, to address
customer needs within their business intelligence practices. In
addition, Sagent has built alliances with numerous technology
vendors to cooperatively market solutions; alliance partners
include Microsoft, Business Objects and Sun Microsystems. Sagent
is headquartered in Mountain View, Calif. For more information
about Sagent, please visit http://www.sagent.com


SERVICE MERCH.: Asks Court to Lift Claim Trading Restrictions
-------------------------------------------------------------
Service Merchandise Company, Inc., and its debtor-affiliates
seek to terminate the notice and hearing procedures for trading
in claims against the Debtors established by the Court's April
6, 2000 order.

Beth A. Dunning, Esq., at Bass, Berry & Sims PLC, at Nashville,
Tennessee, relates that the Claims Trading Procedures Order was
established to preserve the Debtors' ability to use their
consolidated net operating loss carryovers, to offset future
income.  It enabled the Debtors to monitor claims trading
activity and seek appropriate relief if the trading were to
jeopardize the Debtors' ability to utilize their net operating
loss carryovers.

Pursuant to the Procedures Order, the Debtors have been and
continue to receive notifications from certain creditors as they
acquire claims against the Debtors.  Because the Debtors will be
filing a plan of liquidation to provide for the distribution of
the proceeds of their assets to creditors, the Debtors will not
be able to utilize their net operating loss carryovers.
Accordingly, the notification and hearing procedures for trading
claim against the Debtors are no longer necessary. (Service
Merchandise Bankruptcy News, Issue No. 38; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

DebtTraders says that Service Merchandise's 9.0% bonds due 2004
(SVCD04USR1), an issue in default, are trading at 7 cents-on-
the-dollar. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=SVCD04USR1


SLI INC: Wins Nod to Pay Critical Vendors' Prepetition Claims
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave its
stamp of approval to SLI, Inc., and its debtor-affiliates to pay
critical trade vendors' prepetition claims.

In return for receiving payment of these claims, the critical
vendors will be required to extend normalized trade credit terms
to the Debtors for the duration of these cases. The Debtors
intend to pay an aggregate amount of no more than $8,117,000 to
the Critical Vendors.

The Debtors are among the world's leading manufacturers of
lighting products. The raw and processed materials, parts, goods
and services to be provided by the Critical Vendors during these
cases are utilized in the Debtors' manufacturing and related
operations as well as their import and sale of finished lamp and
other lighting products. Such materials, parts, goods and
services are an integral part of the products that the Debtors,
in turn, manufacture and sell to their customers. Absent payment
of the Critical Vendor claims in the ordinary course of
business, the Debtors believe that their business will be
severely damaged, perhaps beyond repair.

The Debtors' Critical Vendors fall into six broad categories:

  1) Quality Control Vendors

     Vendors whose products have been extensively tested by the
     Debtors for quality control purposes and who are able to
     consistently produce Critical Products that meet or exceed
     the Debtors' exacting production standards;

  2) Capacity Vendors

     Vendors who are the sole vendors able to supply the Debtors
     with adequate amounts of a Critical Product;

  3) Sole Source Vendors

     Vendors who are the sole sources of supply for a Critical
     Product;

  4) Customer Directed Vendors

     Vendors who manufacture, assemble and/or deliver a product
     based on the customer's stated specifications and
     requirements;

  5) Key Small Vendors

     Vendors who are also Sole Source or Quality Control Vendors
     and for whom the Debtors constitute a primary or
     substantial customer, such that non-payment of prepetition
     amounts may jeopardize such vendor's ability to continue to
     provide Critical Products to the Debtors; and

  6) Operational Services Vendors

     Vendors who provide critical operational services to the
     Debtors.

Additionally, the Debtors have historically sought to maximize
the value of SLI by, among others, minimizing total global
delivery costs and strategically availing themselves of tax and
regulatory benefits. To achieve these goals, and to ensure
availability of satisfactory amounts of certain Critical
Products, the Debtors purchase many Critical Products from their
subsidiaries and affiliates in foreign countries. The Foreign
Affiliates are managed independently from the Debtors, and deal
with the Debtors on an arms' length basis. The Debtors cannot
compel the Foreign Affiliates to continue to provide Critical
Products to the Debtors if they decline to do so voluntarily.

Transactions with Critical Affiliated Vendors account for
approximately 40% of the Debtors' total revenues in their
general lighting business and approximately 200 of total
revenues in their miniature lighting business. If the Debtors
fail to keep current on their obligations to their Critical
Affiliated Vendors, the Debtors' sales will drop precipitously
and their reorganization efforts will be seriously jeopardized.

SLI, Inc., and its affiliates operate in multi-business segments
as a vertically integrated manufacturer and supplier of lighting
systems, which includes lamps, fixtures and ballasts. The
Company filed for chapter 11 protection on September 9, 2002 in
the U.S. Bankruptcy Court for the District of Delaware. Gregg M.
Galardi, Esq., at Skadden, Arps, Slate, Meagher represents the
Debtors in their restructuring efforts. When the Company filed
for protection from its creditors, it listed $830,684,000 in
total assets and $721,199,000 in total debts.


SUNRISE TECHNOLOGIES: Files for Chapter 7 Liquidation in Calif.
---------------------------------------------------------------
Sunrise Technologies International, Inc., (OTC:SNRS) has filed a
Chapter 7 bankruptcy. The official bankruptcy filing was made in
the Northern District of California - Oakland Division.

Dale Bowerman, Chairman of the Board of Sunrise Technologies
International, Inc., said, "We, along with several large
shareholders, have tried to reorganize the company in order to
preserve its value and to make this technology available to the
physicians and their patients. At the same time we have been
trying to enhance the technology. We have been unable to raise
enough money to pay our commitments to our creditors. One
secured creditor decided to foreclose on all company assets and
conduct an auction to sell these assets. We felt that it was in
the best interests of all our creditors that the company ask the
bankruptcy court to assist in this liquidation procedure. It is
with deepest regret that we make this Chapter 7 filing."

Mr. Bowerman added, "We also would like to thank all of those
who were involved in the last nine months in the efforts to save
the company. I hope and expect that Sunrise's technology will
find its way into the ownership of a company that will continue
to service our customers and to continue enhancing the LTK
procedure."

Sunrise Technologies International, Inc., is a refractive
surgery company based in Menlo Park, California, that has
developed holmium YAG laser-based systems that utilize a
patented process for shrinking collagen developed by Dr. Bruce
Sand (the "Sand Process") for correcting ophthalmic refractive
conditions.


SYNTHONICS TECHNOLOGIES: Committee Wants to File a Better Plan
--------------------------------------------------------------
The Official Creditors' Committee appointed in Synthonics
Technologies, Inc.'s on-going chapter 11 case pending before the
U.S. Bankruptcy Court for the Central District of California
says it has a better plan for the Debtor than the one on the
table.  

The Creditors Committee has come up with a Plan and Disclosure
Statement that is "much more relevant to . . . creditors . . .
and will be far more advantageous to the creditors," Earle
Hagen, Esq., in Encino, California, says.  The Committee Mr.
Hagen's representing wants the hearing scheduled to consider the
Debtors' Disclosure Statement adjourned for 30-45 days, "so that
everybody will [have] time to evaluate th[e] Disclosure
Statement and Plan proposed by the Creditors Committee."

As reported in the Troubled Company Reporter on March 8, 2001,
the Company proposed a plan premised on retiring and canceling  
all old debt and equity securities and issuing new securities
under a distribution scheme allocating:

    * 60% of the new securities for 3D as reorganization equity,

    * 20% for creditors holding allowed claims and electing to
      participate in the equity distribution rather than receive
      deferred payment of debt,

    * 15% for the existing interest holders, and

    * 5% held in reserve for future use by the reorganized
      company management.

Synthonics Technologies, Inc., develops and licenses advanced
three-dimensional replication software tools used in computer-
assisted design, virtual reality and medical animation
applications.  The Company filed for chapter 11 protection on
October 23, 2000.  


TRICORD SYSTEMS: Receives Formal Notice of Patent Acceptance
------------------------------------------------------------
Tricord Systems, Inc. (Nasdaq:TRCDQ) -- developer of the
revolutionary Illumina clustering software and Lunar Flare
clustered server appliances -- today announced it has received
formal notification from the U.S. Patent Office that an
additional patent has been allowed on Tricord's unique
clustering technology. The patent, entitled "Self-Healing
Computer System Storage" concerns Tricord's proprietary
technique for dynamically rerouting data access requests from a
failed memory controller to a backup memory controller.

"We're pleased to add this to the growing number of patents for
our unique Illumina software," said Keith Thorndyke, president
and CEO of Tricord. "This patented technology allows us to
deliver the availability and ease-of-use of a SAN with a much
lower price point."

The Notification of Allowance was dated August 7, 2002. The
Company expects that the U.S. Patent Office will issue this
patent within 60 days.

Tricord Systems, Inc., designs, develops and markets clustered
server appliances and software for content-hungry applications.
The core of Tricord's revolutionary new technology is its
patented Illumina software that aggregates multiple appliances
into a cluster, managed as a single resource. Radically easy to
deploy, manage and grow, Tricord's products allow users to add
capacity to a cluster with minimal administration. Appliances
are literally plug-and-play, offering seamless growth and
continuous access to content with no downtime. The technology is
designed for applications including general file serving,
virtual workplace solutions, digital imaging and security.
Tricord is based in Minneapolis, Minnesota.

On August 2, 2002, Tricord filed a voluntary petition for
reorganization under Chapter 11 of the Federal Bankruptcy Code
in the United States Bankruptcy Court for the District of
Minnesota. For more information regarding Tricord, visit
http://www.tricord.com


TRICORD SYSTEMS: Obtains Formal Notice of Patent Issuance
---------------------------------------------------------
Tricord Systems, Inc. (Nasdaq:TRCDQ) -- developer of the
revolutionary Illumina clustering software and Lunar Flare
clustered server appliances -- has received the Notice of
Issuance of U.S. Patent 6,427,212 from the U.S. Patent Office.
The patent, entitled "Data Fault Tolerance Software Apparatus
and Method," concerns Tricord's proprietary technique for file
distribution across a large-scale data processing system, which
protects against data loss when one or more storage devices
fail. The patent describes how each distributed file object may
have an associated fault tolerance that, combined together,
provides RAID-level data protection on a file-by-file basis.

"We're very pleased that our unique technology has received this
patent, among others, which further solidifies Tricord's
leadership in the field of high availability, distributed file
systems," said Keith Thorndyke, president and CEO of Tricord.
"Our Illumina software has received two patents and has one
pending patent for its unique SAN-like high availability. Our
advanced technology allows us to offer the software at a much
lower price point than traditional SAN systems."

Tricord Systems, Inc., designs, develops and markets clustered
server appliances and software for content-hungry applications.
The core of Tricord's revolutionary new technology is its
patented Illumina software that aggregates multiple appliances
into a cluster, managed as a single resource. Radically easy to
deploy, manage and grow, Tricord's products allow users to add
capacity to a cluster with minimal administration. Appliances
are literally plug-and-play, offering seamless growth and
continuous access to content with no downtime. The technology is
designed for applications including general file serving,
virtual workplace solutions, digital imaging and security.
Tricord is based in Minneapolis, Minnesota.

On August 2, 2002, Tricord filed a voluntary petition for
reorganization under Chapter 11 of the Federal Bankruptcy Code
in the United States Bankruptcy Court for the District of
Minnesota. For more information regarding Tricord, visit
http://www.tricord.com


UNITED AIRLINES: AFL-CIO Issues Comment on Union Coalition Plan
---------------------------------------------------------------
Association of Flight Attendants, AFL- CIO, United Airlines
Master Executive Council President Greg Davidowitch issued this
statement following his meeting with the leaders of the other
unions representing workers at United and the airline's CEO
Glenn Tilton:

     "Being a part of the solution that assists United in
surviving its near-term financial crisis is central to our goal
of ensuring that the Flight Attendants' long-term interests are
represented.

     "By bringing in a new CEO, Glenn Tilton, United now has the
leadership with the vision, plan and commitment needed to turn
our airline around.  With this leadership in place, AFA and the
other Unions at United have developed an alternative framework
for a recovery program that will provide United with $5 billion
in total labor cost savings over the next five years --
including significant savings from management.  Now United can
successfully amend its application for a loan guarantee from the
Air Transportation Stabilization Board, get access to near-term
financing, avoid bankruptcy, and rebuild."

The United Union Coalition includes representatives from AFA,
Airline Pilot's Association; the International Association of
Machinists and Aerospace Workers, Districts 141 and 141-M; the
Professional Airline Flight Control Association; and the
Transport Workers Union of America.

More than 50,000 Flight Attendants, including the 26,000 Flight
Attendants at United, join together to form AFA, the world's
largest Flight Attendant union. Visit its Web site at
http://www.unitedafa.org


UNITED AIRLINES: Blaylock Initiates Coverage with Sell Rating
-------------------------------------------------------------
Blaylock & Partners' airlines and transportation analyst Ray
Neidl has initiated coverage of United Airlines' parent UAL
Corporation (NYSE: UAL) with "sell" rating.  Mr. Neidl delayed
initiating coverage of the airline until he had a better sense
of when a recovery will occur, which he believes will not be
until 2Q03 at the earliest.

Mr. Neidl's reasons for his "sell" recommendations for UAL
include:

     -- UAL -- There is a high probability that the airline will
file for Chapter 11 this fall.  If it does so, the stock,
including ESOP stock, may lose all value.

Blaylock's ratings system consists of "buy," "hold" and "sell"
recommendations.  Investment banking stocks have a "not rated"
designation. Institutional investors interested in receiving
more information should contact Mr. Neidl at 212/715-6627 --
rneidl@blaylocklp.com   Journalists interested in receiving
copies of the research reports should contact Dao Tran at
dtran@starkmanassociates.com  

Based in New York, Blaylock & Partners, L.P. has been ranked by
Black Enterprise magazine as the number one minority-owned
investment banking firm for 1999 and 2000.  The firm has co-
managed four of the largest most recent IPOs - Travelers
Property Casualty Corp., Prudential Financial, Inc., Kraft Foods
Inc., and Agere Systems Inc.  Blaylock & Partners is a member of
the NASD and SIPC.

Blaylock & Partners, L.P. is a member of the National
Association of Securities Dealers, CRD number 35669.


US AIRWAYS: Conditionally Seeks Okay to Reject Union Agreements
---------------------------------------------------------------
John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher &
Flom, relates that any restructuring will require a reduction in
labor costs.  US Airways has been working closely with its
unions for several months to voluntarily modify labor
agreements.  US Airways has already made significant progress in
this effort.  In June 2002, US Airways began bargaining in
earnest with its five unions.  At the commencement of these
bargaining sessions, US Airways provided each union with a
written term sheet that outlined specific proposals by the
Company for modifications to the existing collective bargaining
agreements that would achieve the cost reduction target.  The
chart shows the average annual cost savings, calculated over a
six and a half-year period from July 1, 2002 through December
31, 2008, produced by the Company's Initial Prepetition
Proposals to each union:

                           Valuation of
                    Initial Prepetition Proposals
             Union Average Annual Cost Savings (millions)
             --------------------------------------------

      ALPA (Pilots)                                  $546.9
      IAM  (Mechanical and Related)                   178.3
      AFA  (Flight Attendants)                         89.2
      CWA  (Passenger Service Employees)               82.7
      IAM  (Fleet Service)                             77.1
      TWU  (Dispatchers)                                5.9
      TWU  (Flight Crew Training Instructors)           5.4
      TWU  (Simulator Engineers)                        1.4
      IAM  (Maintenance Training Specialists)           0.9
                                                     ------
      TOTAL                                          $987.8

All of the organized employees of US Airways are represented by
one of 5 unions:

   * ALPA represents approximately 4,430 US Airways pilots;

   * AFA represents approximately 7,625 flight attendants;

   * IAM represents approximately 6,631 mechanical and
     related employees, approximately 5,360 fleet service
     employees, and approximately 48 maintenance training
     specialists;

   * CWA represents approximately 6,700 passenger service
     employees; and

   * TWU represents approximately 160 dispatchers,
     approximately 46 simulator engineers, and approximately 113
     flight crew training instructors.

At the time US Airways began its restructuring effort, all of
these groups were subject to collective bargaining agreements.
Thus, the labor cost reductions needed under the restructuring
plan could be achieved only by modifying existing collective
bargaining agreements.

Mr. Butler warns that there is no assurance US Airways will
achieve its goal of full voluntary participation with the IAM
and CWA.  Because of the urgency of the Company's financial
condition, the Debtors cannot delay exercising their legal
rights.  In the event that mutually agreeable cost-reduction
agreements cannot be reached with each union, the Debtors seek
the Court's authority to reject the collective bargaining
agreements.

US Airways have already executed cost-reduction agreements with
two of its largest organized employee groups.  Shortly before
the Petition Date, US Airways' pilots and flight attendants
overwhelmingly ratified restructuring agreements that will
produce an aggregate of $552,000,000 in average annual cost
reductions through calendar year 2008.  These agreements also
provide the pilots and flight attendants with financial
participation in the anticipated financial recovery of US
Airways through equity or profit-sharing plans.  On August 21,
2002, the dispatchers and flight simulator engineers, who are
represented by the Transport Workers Union, ratified
restructuring agreements.  A third group represented by TWU --
flight crew training instructors -- ratified a restructuring
agreement on August 23, 2002.  These three restructuring
agreements will produce an aggregate of $11,000,000 in annual
labor cost savings through 2008, and provide financial
participation for TWU-represented employees through equity or
profit-sharing plans.

Mr. Butler relates that of IAM members, only the fleet service
employees have executed a tentative agreement.  The mechanical
and related employees rejected the cost-reduction agreement.  
The three IAM proposals would deliver an aggregate of
$219,000,000 in average annual labor cost savings for IAM-
represented employees through 2008.  Based on ratifications by
ALPA, AFA and TWU, US Airways is hopeful that the three IAM
employee groups will ratify agreements, but the outcome cannot
be predicted with certainty. If the IAM-represented employee
groups ratify the prepetition cost-reduction agreements, this
application will be withdrawn for the relevant bargaining units.

The remaining union at US Airways, the CWA, represents the
Company's approximately 6,700 passenger service employees.  From
May 2002 until it filed its chapter 11 reorganization cases on
August 11, 2002, US Airways met with CWA 16 times in an effort
to obtain a prepetition cost-reduction agreement.  US Airways
also provided CWA with the voluminous financial and operational
data that was provided to the other unions -- data that
demonstrated to the genuine and urgent need for labor cost
reductions by all US Airways employees.

Unlike the other unions at US Airways, which agreed either to
enter into prepetition cost-reduction agreements or to submit US
Airways' final cost-reduction proposal to its membership for a
vote, CWA has declined to do either.  To meet the Company's goal
of spreading the required financial sacrifices fairly among all
US Airways employees and to achieve the total amount of labor
cost reductions needed to carry out its business plan and obtain
DIP financing, US Airways must obtain modifications to the
current CWA collective bargaining agreement that will produce
approximately $70,000,000 in average annual savings through
2008.

US Airways delivered to CWA representatives a formal proposal
for modifications of the CWA collective bargaining agreement
pursuant to Section 1113 of the Bankruptcy Code.  While US
Airways will attempt to reach a voluntary agreement with CWA,
Debtors will ask the Court to authorize rejection of the CWA
labor agreement, if necessary.

The modifications to the IAM and CWA agreements as proposed
under Section 1113 are necessary to accomplishing four key goals
of Debtors' reorganization:

  1) completion of the Restructuring Plan and Long-Term
     Viability;

  2) fair and Equitable Treatment of All Employees;

  3) accessing the ATSB Loan Guarantee; and

  4) accessing DIP Financing.

Although US Airways and CWA have been engaged in negotiations
since May 2002, US Airways has been unable to obtain CWA's
agreement to the modifications the Company believes are
necessary to successfully restructure.  CWA has also declined
the Company's request to put US Airways' last prepetition
proposal to an employee ratification vote, as the IAM has done.

In the judgment of US Airways management, obtaining CWA-related
average annual savings of $70,000,000 a year for six and a half
years -- that is, 85% of the $82,700,000 in annual cost
reductions under the Company's Initial Prepetition Proposal --
is a necessary component of the plan to successfully restructure
the Company.  In addition, that level of reductions is necessary
for CWA employees to shoulder their fair share of the burden of
restructuring.  If management were to settle with CWA for less
than the 85% contributed by other employees or if this Court
were to deny US Airways' Section 1113 application for rejection
of CWA agreement, it would have a destabilizing effect on labor
relations at US Airways.  "It would send a message to the unions
that they can advantage their position by not concluding an
agreement in a timely manner," Mr. Butler says.  Furthermore,
the business plan upon which the Company's ATSB application is
based assumes that CWA will participate in labor cost
reductions.  The DIP Facility also requires voluntary
modifications or court-ordered rejection of each collective
bargaining agreement, including that of CWA.

Achieving all key elements of the restructuring plan, including
labor agreements with all groups and gaining access to the ATSB
loan guarantee, is necessary to access the DIP financing.
Without the liquidity provided by the DIP Facility or
replacement financing, US Airways may not have sufficient
liquidity to restructure.  The likelihood of liquidation would
therefore be much higher.

By this application, the Debtors conditionally seek the Court's
authority to reject each collective bargaining agreement for a
bargaining unit that has not delivered a signed, ratified
agreement for voluntary modifications.  Achieving modifications,
whether voluntary or through Court-approved rejection, is a
vital component of the Debtors' reorganization plans.  Section
1113(c) of the Bankruptcy Code authorizes the Court to approve
rejection of a collective bargaining agreement where the debtor
demonstrates compliance with this checklist:

1) The debtor made a proposal to modify the collective
   bargaining agreement;

2) The proposal was based upon the most complete and reliable
   information available at the time of the proposal;

3) The proposed modifications are necessary to permit
   reorganization of the debtor;

4) The modifications assure that all creditors, the debtor, and
   all other affected parties are treated fairly and equitably;

5) The debtor provided to the union relevant information as is
   necessary to evaluate the proposal;

6) The debtor met at reasonable times with the union between the
   time of the proposal and the time of the hearing on the
   proposal;

7) The debtor conferred with the union in good faith at these
   meetings;

8) The union refused to accept the debtor's proposal without
   good cause; and

9) The balance of equities clearly favors rejection of the
   agreement.

Mr. Butler reports that CWA has now reached a tentative
agreement with US Airways on consensual modifications to the
collective bargaining agreements with the passenger service
employees.  That tentative agreement remains subject to a
ratification vote by the union membership.  In addition, IAM has
agreed to re-submit a US Air proposal for modifications for a
ratification vote by the mechanical and related employees.

Although the parties to this Motion hope and expect that the
modifications will be ratified, there can be no certainty of
that occurring.  Accordingly, the parties have agreed to
continue the hearing on the Application for a period of time
sufficient to complete the ratification process and to prepare
for a hearing if:

  (a) CWA's membership fails to ratify the tentative agreement,
      and/or

  (b) IAM's mechanical and related employees fail to approve US
      Air's final prepetition proposal. (US Airways Bankruptcy
      News, Issue No. 6; Bankruptcy Creditors' Service, Inc.,
      609/392-0900)


US AIRWAYS: Blaylock Commences Coverage with SELL Rating
--------------------------------------------------------
Blaylock & Partners' airlines and transportation analyst Ray
Neidl has initiated coverage of US Airways, Inc. (NYSE: U-NL)
with "sell" rating.  Mr. Neidl delayed initiating coverage of
the airline until he had a better sense of when a recovery will
occur, which he believes will not be until 2Q03 at the earliest.

Mr. Neidl's reasons for his "sell" recommendations for US
Airways include:

     -- U-NL -- As in previous bankruptcy filings where common
shareholders lost all value for their shares, restructuring
under Chapter 11 may make US Airways' common shares valueless.

Blaylock's ratings system consists of "buy," "hold" and "sell"
recommendations.  Investment banking stocks have a "not rated"
designation. Institutional investors interested in receiving
more information should contact Mr. Neidl at 212/715-6627 --
rneidl@blaylocklp.com  Journalists interested in receiving
copies of the research reports should contact Dao Tran at
dtran@starkmanassociates.com  

Based in New York, Blaylock & Partners, L.P., has been ranked by
Black Enterprise magazine as the number one minority-owned
investment banking firm for 1999 and 2000.  The firm has co-
managed four of the largest most recent IPOs - Travelers
Property Casualty Corp., Prudential Financial, Inc., Kraft Foods
Inc., and Agere Systems Inc.  Blaylock & Partners is a member of
the NASD and SIPC.

Blaylock & Partners, L.P., is a member of the National
Association of Securities Dealers, CRD number 35669.

US Airways Inc.'s 10.375% bonds due 2013 (U13USR2) are trading
at 10 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=U13USR2for  
real-time bond pricing.


VALEO ELECTRICAL: Court Clears Emergence from Ch. 11 Bankruptcy
---------------------------------------------------------------
Valeo Electrical Systems Inc., was cleared to emerge from the
protection of Chapter 11 of the U.S. Bankruptcy Code, as the
U.S. Bankruptcy Court today confirmed the company's Plan of
Reorganization.

Pursuant to orders signed by the Honorable Stuart M. Bernstein,
VESI's Plan of Reorganization is expected to become effective on
October 7, 2002, and payments to creditors holding allowed
claims will commence shortly thereafter. Under the terms of the
Plan, which was endorsed by the Official Committee of Unsecured
Creditors in VESI's Chapter 11 case, unsecured creditors will
receive 95 percent of their allowed claims against the company.

On August 21, the Court had approved the Disclosure Statement
relating to VESI's Chapter 11 case, and authorized the company
to solicit acceptances from its creditors. The Plan received
overwhelming approval from VESI's creditors, as more than 90
percent of those voting filed acceptances by the September 19,
2002 ballot deadline.

Commenting on the confirmation of the Plan, VESI executive vice
president and general manager of the Rochester site, Walter
Kneuer said, "This is an important day for VESI, the culmination
of a long process that reached this successful conclusion thanks
to the support of key stakeholders - especially our employees
and suppliers. Looking ahead, the real significance of emerging
from Chapter 11 is that VESI now has a new and solid framework
for competing in the future, and for continuing to serve our
customers as a part of Rochester's manufacturing base."

VESI filed for Chapter 11 on December 14, 2001 to protect its
operations in the face of a difficult competitive situation.
VESI's parent company Valeo has agreed to fund the terms of the
Plan by contributing $226 million ($190 million on the Effective
Date and the balance in 2003) to recapitalize VESI.

VESI manufactures automotive wiper systems, motors and other
components in North America for sale to car and truck
manufacturers, component suppliers and other customers. VESI's
manufacturing operations are primarily located in a facility in
Rochester. It is a subsidiary of Valeo, an independent
industrial Group fully focused on the design, production and
sale of components, integrated systems and modules for cars and
trucks. Valeo ranks among the world's top automotive suppliers.

Detailed information about the VESI Chapter 11 filing can be
found at http://www.valeoelectricalsystems.com


VIVENDI UNIVERSAL: Six Board of Directors Members Leave Seats
-------------------------------------------------------------
Vivendi Universal (Paris Bourse: EX FP; NYSE: V) announced that
its Board of Directors met Wednesday, September 25, 2002. It
noted the resignation of six of its members: Mrs. Esther
Koplowitz, Mr. Richard Brown, Mr. Eric Licoys, Mr. Samuel
Minzberg, Mr. Simon Murray and Mr. Serge Tchuruk.

On the proposal of the Chairman, Mr. Jean-Rene Fourtou, the
Board elected Mr. Fernando Falco y Fernandez de Cordoba as a
non-executive director. The Board of Directors is thus reduced
to a more streamlined 12 members.  Mr. Jean-Rene Fourtou asked
the Human Resources Committee to propose a complete
reorganization of the various Board Committees at the next Board
Meeting with a view to finalizing them and, if necessary,
bringing them into line with the new European and U.S. standards
that are currently in development, as well as the Bouton report
on corporate governance in France.

Following the meeting, Mr. Jean-Rene Fourtou, Chairman and CEO
of Vivendi Universal, declared:

"The Board has noted with satisfaction the decisive progress
made during the past three months. We are leaving the crisis
behind us. The main sources of loss have been reduced, sold or
halted, or are about to be. The reduction of the company's debt
has started through a major asset disposal plan that will be
carried through with determination with the target of achieving
at least 12 billion euros over 18 months. Vivendi Universal
Publishing future disposal is part of this plan.

"The Board has approved the decision to enhance the value of the
company's entertainment businesses and develop them. It is a
market in which Vivendi Universal is already among the world
leaders. To meet that challenge, our objective is to create a
true partnership, on both sides of the Atlantic, with the senior
executives and talented employees that are the key to these
businesses. The partnership will be based on financial
agreements and management methods."

Jean-Rene Fourtou went on to add: "With regard to Cegetel, the
Board was pleased with the company's excellent results, and we
are continuing to study every possible solution that would be
favorable to our shareholders and compatible with our primary
financial objectives. It must be understood that we do not have
the capacity to take back majority control of Vivendi
Environnement. We, therefore, must make optimum use of our
interest in Vivendi Environnement, and examine, in close
collaboration with its management, how the relationship between
Vivendi Universal and Vivendi Environnement should develop.

The Vivendi Universal Chairman concluded: "The employees have
experienced moments of great anxiety during the past year. I
want to thank each of them, on behalf of the company, for the
significant work they have accomplished and to acknowledge their
professionalism."

1. We are leaving the crisis behind us.

In a very unfavorable economic climate, marked by the Enron and
Worldcom scandals, the downgrading of Vivendi Universal's status
by the rating agencies and the banks' sudden loss of confidence
in the company's future, brought the financial crisis to a
height in early July. The cash crunch came when the company had
an untenable level of debt given the available cash flow (35
billion euros at June 30, 2002, of which 19 billion euros for
Media and Communication), with repayment terms that were too
tight and could not be rescheduled.

The situation was resolved in two phases.

     - On July 10, 2002, Vivendi Universal obtained a short-term
credit line of 1 billion euros from a group of seven
international banks. This facility pushed back the risk of
immediate default, and gave the company time to negotiate
refinancing so that it could meet its needs over a longer term.

     - On September 18, 2002, the banks agreed a 3 billion euro
medium-term credit line, replacing the 1 billion euro facility
obtained in July. This loan takes the form of three tranches,
each one secured, with repayment dates spread over the period
from November 2003 to December 2004 at the latest. It will give
the company a breathing space pending receipt of revenue from
the disposal of assets.

The risk associated with the company's cash position is
therefore in the process of being eliminated, especially since
negotiations on extending the repayment date of the Vivendi
Universal Entertainment credit line (1.6 billion euros) from
November 2002 to November 2003 are at a very advanced stage.

2. The main sources of loss have been reduced, sold or halted,
   or are about to be

The main sources of loss have been clearly identified. They have
been reduced, sold or halted, or are about to be: Canal+ Italy,
Poland, Benelux and Scandinavia are going to leave Vivendi
Universal's landscape. Vizzavi has been sold (excluding Vizzavi
France, which is now wholly owned). Scoot and Divento are in the
process of being closed.

The other Internet assets will be sold or integrated with the
businesses to which they report. In addition, measures have been
taken to reduce Paris and New York headquarters costs, as well
as communication and sponsorship expenditure.

3. The company is progressing in its debt reducing program
   through a significant asset disposal plan that will be
   carried through with determination

Within the next 18 months, Vivendi Universal is expected to sell
off assets worth 12 billion euros, of which divestments of at
least 5 billion euros will be completed within nine months. This
plan will return the company to a financial situation that
should earn it BBB/Baa2 status from the rating agencies.

The main assets in the disposals plan, subject to consultation
with employee representatives and labor unions, include:

     - Canal+ activities outside France (Italy, Poland, Benelux,
Scandinavia) and Canal+ Technologies;

     - The interest in the "new Canal+ above 49%";

     - Telecoms activities outside France (Poland, Hungary,
Kenya, etc.);

     - Internet activities;

     - Press (Comareg, Express-Expansion) and publishing (VU
Publishing);

     - Minority interests;

     - Miscellaneous assets (property, distribution, airplanes,
energy production, etc.);

     - Monetization of a minority stake of VU Games

With the exception of VUP, these are primarily non-core
businesses, which should have been sold off anyway due to the
difficulties involved in managing such a complex and disparate
range of activities.

Several disposals, for a total amount of around 1.1 billion
euros, have already been finalized.

In addition, Vivendi Universal confirms having received
acquisition proposals for Vivendi Universal Publishing (VUP) in
its entirety. These proposals are currently being studied, in
the best interest of the shareholders of Vivendi Universal,
Vivendi Universal Publishing and VUP employees.

Vivendi Universal specifically asked all potential acquirers to
include in their proposals commitments regarding the
preservation of VUP's French cultural heritage. These
commitments will be made public.

4. The entertainment businesses will be enhanced and developed

Vivendi Universal's aim is to streamline its consolidation
scope. The new Vivendi Universal is an entertainment company
focused on the creation of consumer content, and with two
important minority interests, Cegetel and Vivendi Environnement.

Vivendi Universal is among the world's leading media and
communication companies and is number one in Europe.
Entertainment (music, film, TV, parks and games) is its core
business. The company has excellent assets, strong prospects for
growth in these activities, high quality management teams and
creative talents, and outstanding brands (Universal and Canal+).
These will contribute to the enhancement of the media and
communication activities with the primary goal of creating
maximum value for all of its shareholders.

With regard to Cegetel, against the new backdrop created by the
expiry of the standstill clauses in the shareholder agreements,
Vivendi Universal is studying every possible solution that will
favor value creation, in accordance with terms that are
compatible with our priority financial objectives.

With regard to Vivendi Environnement, as Vivendi Universal
cannot take back majority control, the aim is to optimize our
stake and to examine, with Vivendi Environnement management, how
relationship between Vivendi Universal and Vivendi Environnement
should develop.

5. First-half 2002 financial statements

The Board of Directors approved the reviewed financial
statements for the first half of 2002. These financial
statements will replace the interim results published on August
14, 2002. The full statements will be published in the usual way
and made available on www.vivendiuniversal.com in the
Shareholders section, as well as on the Investor Relations
Website at http://finance.vivendiuniversal.comThey will also be  
available on request from the Shareholder Information
Department.

6. The PwC assignment

The PwC assignment consisted of delivering some information to
the new general management about some specific aspects, but it
was not an audit of Vivendi Universal's accounts. To date, this
assignment has not revealed any malfunction of a nature to bring
the sincerity of the written financial information provided by
Vivendi Universal into question. On the contrary, it has
revealed the complexity of that information and has led to the
identification of ways and means of improving and coordinating
the procedures used by the various business units and the
holding company, in particular in terms of cash, Vivendi
Universal commitments, and basic accounting structures and
processes. The Board noted senior management's decision to take
full account of these recommendations and adopt the measures
necessary for implementing them as quickly as possible.


WORLDCOM INC: Asks Court to Clear Pentagon Purchase Agreement
-------------------------------------------------------------
Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New
York, relates that after the execution of the contract for the
sale of Pentagon City, TST/Pentagon City LLC and Worldcom Inc.,
and its debtor-affiliates continued an open dialogue regarding
the property.  In connection with the dialogue and following the
Purchaser's due diligence investigation as contemplated by the
contract, the parties agreed to amend and restate the July 11,
2002 contract.  On August 28, 2002, the parties executed the
Amended and Restated Sale and Purchase Contract.

The Agreement provides for the sale of:

-- Pentagon City, including all legal rights related thereto,

-- certain furniture, fixtures and equipment related to the use
   and operation of Pentagon City, and

-- all intangible property, if any, pertaining to Pentagon City
   or the FF&E, including the assignment to Purchaser of certain
   related contracts.

Ms. Goldstein adds that TST/Pentagon City LLC also will have the
option to assume certain service contracts.  The Agreement
further contemplates the execution of two lease agreements
between TST/Pentagon City LLC and the Debtors for an equipment
site lease at 701 South 12th Street and a post-closing occupancy
agreement for portions of 701 South 12th Street and 601 South
12th Street.

The principal terms of the Agreement are:

-- Purchase Price:  $101,425,000

-- Deposit:  $2,000,000, to be applied toward the Purchase Price
   at closing.

-- Closing Date:  The closing will occur as soon as practicable
   after Court approval but not later than 11 days after entry
   of the Sale Order.

-- Assets To Be Sold:

   a. Real Property consisting of Pentagon City, all mineral,
      oil and gas rights, water rights, sewer right, and other
      utility rights associated therewith, all appurtenances,
      easements, licenses, privileges and other property
      interests belonging or appurtenant therewith, and all
      right, title and interest in any roads, streets and ways
      serving Pentagon City;

   b. Tangible Personal Property, consisting of the furniture,
      fixtures and equipment; and

   c. Intangible Personal Property, consisting of all intangible
      personal property related to the Real Property or the
      Tangible Personal Property.  The Debtors agree to assign,
      to the extent assignable, its interest in all Service
      Contracts related to the property, including management
      contracts, transferable utility contracts, service
      contracts, equipment leases, and maintenance contracts, to
      the Purchaser to the extent that the Purchaser elects to
      assume the Service Contracts.  The Debtors will cancel,
      with respect to the Assets to be sold, all terminable
      Service Contracts that the Purchaser elects not to assume.

-- Leases:  The Purchaser and the Debtors will enter into an
   equipment site lease and a temporary post-closing occupancy
   agreement with the Debtors.

-- Warranty:  The Assets are being sold "as is" without any
   representations and warranties whatsoever other than as
   specified in the Agreement.

-- Closing Conditions:  Closing is subject to Bankruptcy Court
   approval and other customary conditions.

-- Auction Procedures:  The Agreement provides that the Debtors
   will file and diligently prosecute a motion seeking entry of
   an order of the Bankruptcy Court approving certain bidding
   protections for the Purchaser including a break-up fee of 3%
   of the Purchase Price, setting a deadline for the submission
   of competing offers, setting an initial minimum overbid
   requirement of the Purchase Price plus the Break-Up Fee plus
   $1,000,000, fixing bidding increments of not less than
   $500,000, and other customary bid protections.  The order of
   the Bankruptcy Court approving the auction procedures must be
   entered not later than October 3, 2002.  An order approving
   the sale must be entered no later than November 14, 2002.  If
   the Debtors do not obtain the requisite orders prior to the
   stated deadlines, the Purchaser may terminate the Agreement
   pursuant to its terms.

-- Equipment Site Lease:  The Purchaser will lease to the
   Debtors 4,300 net rentable square feet on the second floor of
   701 South 12th Street, together with a generator area, at an
   annual base rent of $86,000, or $20 per rentable square foot,
   for a term of 2 years, with six 3-year renewal options, on
   terms and conditions specified in the Equipment Site Lease.

-- Post-Closing Occupancy Agreement:  The Debtors will continue
   to occupy certain floors of Pentagon City for varying periods
   of time pursuant to a transition schedule through December
   31, 2002.  The Debtors will pay the Purchaser rent for the
   premises it occupies during the transition period at $20 per
   rentable square foot on terms and conditions set forth in the
   Post-Closing Occupancy Agreement. (Worldcom Bankruptcy News,
   Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392-
   0900)  


WORLDCOM: ATLANTIC-ACM Says Bankruptcy Will Benefit IDT & Vartec
----------------------------------------------------------------
ATLANTIC-ACM's ninth annual study of the long distance industry
reveals the shrinkage of the U.S. long distance switched revenue
market from $55 billion in 2001 to $39 billion in 2007. Dramatic
shifts in market share are expected during these years with
burgeoning LD entrants predicted to seize much of the retail
switched voice market. These carriers, which passed $1B in LD
revenue by 2001, include Verizon, Qwest, Global Crossing, Vartec
and IDT. As a group, they will see their retail switched voice
revenues grow at a compounded annual growth rate of 18.1% from
$5.7 billion in 2001 to $15.6 billion in 2007.

The Regional Bell Operating Companies are expected to triple
their 2001 long distance market share by 2007. Their share of
6.3% in 2001 will jump to 22.8% in 2007. RBOCs are also expected
to increase their private and data market share 2.5 fold from
2001 to 2007. "This large market share growth will be a result
of extensive marketing efforts by the RBOCs," explains Dr. Judy
Reed Smith, CEO of ATLANTIC-ACM.

"The recent bankruptcy filing by WorldCom will benefit emerging
companies, with IDT and Vartec, in particular, well-poised to
seize a considerable percentage of WorldCom's retail residential
share," proclaims Taher Bouzayen, Vice President at ATLANTIC-
ACM.

U.S. Long Distance Services Market: Sizing & Share Analysis
2002-2007 is a 232-page report available now for $4,950.00(US).
The report provides a quantitative analysis of the overall size
and composition of the current U.S. long distance services
market, projecting its growth and opportunities for both long
distance players and their competitors. For more information
contact ATLANTIC-ACM at One Beacon Street, 34th Floor, Boston,
MA 02108, Tel +1(617) 720-3700, Fax +1 (617) 720-1077, e-mail
atlantic@atlantic-acm.com  or visit its Web site at
http://www.atlantic-acm.com

ATLANTIC-ACM is a telecommunications strategy consulting and
customized research firm. ATLANTIC-ACM assists clients in
evaluating telecommunications opportunities for successful
investment, market entry, and long-term planning.

Worldcom Inc.'s 11.25% bonds due 2007 (WCOM07USA1), DebtTraders
reports, are trading at 22.5 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCOM07USA1
for real-time bond pricing.


ZIFF DAVIS: Commences Exchange Offer for Series E Preferreds
------------------------------------------------------------
Ziff Davis Media Inc., is offering to exchange up to 28,526.40
Shares of outstanding Series E Redeemable Preferred Stock of
Ziff Davis Holdings Inc., for a like number of Shares of new
Series E-1 Preferred Stock of Ziff Davis Holdings Inc., and
$90,333,600 of outstanding Senior Subordinated Compounding Notes
due 2009, of Ziff Davis Media Inc., for a like amount of new
Senior Subordinated Compounding Notes due 2009, Series B of Ziff
Davis Media Inc.

The terms of the series E-1 preferred stock to be issued in the
exchange offer are substantially identical to the outstanding
series E redeemable preferred stock, except that the transfer
restrictions and registration rights relating to the series E
redeemable preferred stock will not apply to the series E-1
preferred stock. The terms of the exchange notes to be issued in
the exchange offer are substantially identical to the existing
notes, except that the transfer restrictions and registration
rights relating to the existing notes will not apply to the
exchange notes.  

The Company believes that, subject to certain exceptions, the
exchange notes and the series E-1 preferred stock each may be
offered for resale, resold and otherwise transferred by the
purchaser without compliance with the registration and
prospectus delivery provisions of the Securities Act.

The Company also believes that the exchange of series E-1
preferred stock and the exchange of notes will not be taxable
events for U.S. Federal income tax purposes.  

The exchange offer is subject to customary conditions, including
the condition that the exchange offer will not violate
applicable law or any applicable interpretation of the Staff of
the SEC.   

The expiration date of the offer has not yet been stipulated.  
Ziff Davis will not receive any cash proceeds from the exchange
offer.

Each broker-dealer that receives exchange notes or series E-1
preferred stock for its own account pursuant to the exchange
offer must acknowledge that it will deliver a prospectus in
connection with any resale of such exchange notes or series E-1
preferred stock. The Letter of Transmittal states that by so
acknowledging and delivering a prospectus, a broker-dealer will
not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act of 1933, as amended.  Neither the
Securities and Exchange Commission nor any state securities
commission has approved the notes or preferred stock to be
distributed in the exchange offer.

Ziff Davis Media Inc., is a special interest media company
focused on the technology and game markets.  In the United
States, the company publishes 9 industry leading business and
consumer publications: PC Magazine, eWEEK, Baseline, CIO
Insight, Electronic Gaming Monthly, Xbox Nation, Official U.S.
PlayStation Magazine, Computer Gaming World and GameNow. There
are 45 foreign editions of Ziff Davis Media's publications
distributed in 76 countries worldwide. In addition to producing
companion sites for all of its magazines, the company develops
tech enthusiast sites such as ExtremeTech.com.  Ziff Davis Media  
provides custom publishing and end-to-end marketing solutions
through  its Integrated Media Group, industry analyses through
Ziff Davis Market Experts and produces seminars and webcasts.  
For more information, visit http://www.ziffdavis.com  

As reported in Troubled Company Reporter's August 14, 2002
edition, Ziff Davis Media completed its exchange offer
with its bondholders and is now planning to finish the related
documentation and distribute proceeds for its financial
restructuring plan within the next several days.  As of August
9, 2002, holders of 95.1% of the aggregate face amount of its
$250.0 million of 12.0% Senior Subordinated Notes due 2010
formally accepted the terms of its out-of-court financial
restructuring plan. In addition, the Company also announced that
it has reached agreement with holders of 100.0% of the
outstanding loans under its Senior Credit Facility regarding an
amended and restated credit agreement.

As a result of the out-of-court restructuring, the Company will
reduce its outstanding debt by approximately $147.4 million and
its cash debt service requirements over the next several years
by over $30.0 million annually.


* BOOK REVIEW: The Phoenix Effect: Nine Revitalizing Strategies
                No Business Can Do Without
----------------------------------------------------------------
Authors: Carter Pate and Harlann Platt
Publisher: John Wiley & Sons, Inc.
Softcover: 244 Pages
List Price: $27.95
Review by Gail Owens Hoelscher
Buy a copy for yourself and one for a colleague on-line at
http://amazon.com/exec/obidos/ASIN/0471062626/internetbankrupt  

Think of all the managers of faltering companies who dream of
watching those companies rise from the ashes all around them!
With a record number of companies failing in 2001, and another
record-setting year expected for 2002, there are a lot of ashes
from which to rise these days.

Carter Pate and Harlan Platt highly value strong leadership able
to sharpen a company's focus and show the way to the future.
They believe that all too often, appropriate actions required to
improve organizations are overlooked because upper management
either isn't aware of the seriousness of the issues they face or
they don't know where to turn for accurate information to best
address their concerns. In the Phoenix Effect, the authors
present their ideas to "confront, comprehend, and conquer a
company's ills, big and small."

These ideas are grouped into nine steps: (i) Find out whether
the company needs a tune-up, a turnaround, or crisis management.
Locate the source of "the pain." (ii) Analyze the true scope of
the company's operations. Decide whether to stay in the same
businesses, withdraw from existing businesses, or enter new
ones. (iii) Hold the company to its mission statement. If it
strives to be "the most environmentally friendly." Figure out
how. (iv) Manage scale. Should the company grow, stay the same
size, or shrink? (v) Determine debt obligations and work toward
debt relief. (vi) Get the most from the company's assets.
Eliminate superfluous assets and evaluate underused assets.
(vii) Get the most from the company's employees. Increase output
and lower workforce costs. (viii) Get the most from the
company's products. Turn out products that are developed and
marketed to fill actual, current customer needs. (ix) Produce
the product. Search for alternate ways to create the product:
owning or leasing facilities, outsourcing, etc.

The authors believe that "how you're doing is where you're
going." They assert that the "one fundamental source of life  in
companies, as in people,.is the capacity for self-renewal, the
ability to excite your team for game after game. to go for broke
season after season." This ability can come from "(g)enetics,
charisma, sheer luck, stock options - all  crucial, yes, but the
best renewal insurance is a leader who always knows exactly how
his or her company is doing."

There are a lot of books written on this topic. Pate and Platt
successfully bridge the gap between overgeneralization and too
detail. They are equally adept at advising on how to go about
determining a business's scope and arguing for Monday rather
than Friday for implementing layoffs. They don't dwell on sappy
motivational techniques. They don't condescend to the reader or
depend too much on folksy vernacular and clich,. Their message
is clear: your company's phoenix, too, can rise from its ashes.

* Carter Pate is a well known turnaround expert at
PricewaterhouseCoopers with more than 20 years experience
providing strategic consulting and implementation strategies.

* Harlan Platt is a professor of finance at Northeastern
University and author of the book Principles of Corporate
Renewal.

                          *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices
are obtained by TCR editors from a variety of outside sources
during the prior week we think are reliable.  Those sources may
not, however, be complete or accurate.  The Monday Bond Pricing
table is compiled on the Friday prior to publication.  Prices
reported are not intended to reflect actual trades.  Prices for
actual trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy
or sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.

Bond pricing, appearing in each Thursday's edition of the TCR,
is provided by DebtTraders in New York. DebtTraders is a
specialist in global high yield securities, providing clients
unparalleled services in the identification, assessment, and
sourcing of attractive high yield debt investments. For more
information on institutional services, contact Scott Johnson at
1-212-247-5300. To view our research and find out about private
client accounts, contact Peter Fitzpatrick at 1-212-247-3800.
Real-time pricing available at http://www.debttraders.com/

Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
                  
                          *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard
Group, Inc., Washington, DC USA. Yvonne L. Metzler, Bernadette
C. de Roda, Donnabel C. Salcedo, Ronald P. Villavelez and Peter
A. Chapman, Editors.

Copyright 2002.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.  Information
contained herein is obtained from sources believed to be
reliable, but is not guaranteed.