TCR_Public/021003.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Thursday, October 3, 2002, Vol. 6, No. 196    

                          Headlines

360NETWORKS INC.: U.S. Court Confirms Plan of Reorganization
360NETWORKS: Inks New Jersey Turnpike Settlement Pact
ACME METALS: BofA Extends DIP Financing until November 29, 2002
ADVANCED GLASSFIBER: Sr. Lenders Agree to Forbear Until Oct. 31
AGWAY INC: Voluntary Chapter 11 Case Summary

AIR CANADA: Closes Sale-Leaseback Transaction at about C$100MM
ALLMERICA: S&P Cuts Ratings on 2 Related Synthetic Transactions
AMTRADE INTERNATIONAL: Fitch Drops Ratings to Default Level
ANACOMP INC: Appoints Jeff Cramer as Chief Executive Officer
ANC RENTAL: Wants to Consolidate Operations at O'Hare Airport

APPLE CAPITOL: Selling Certain Secured Debt to Applebee's Int'l
BBVA BANCOMER: New York Agency Commences Voluntary Liquidation
BEAR STEARNS: Fitch Affirms 6 P-T Certs. Ratings at Low-B Level
BORDEN CHEMICALS: Wants to Extend DIP Loan Pact Until Dec. 31
BRIGHTPOINT INC: Repurchases Additional Convertible Notes

BUDGET GROUP: Wants to Expand Fowler White's Scope of Engagement
BURLINGTON INDUSTRIES: Plan Exclusivity Intact through Jan. 31
CANADIAN IMPERIAL: Applies for Repricing of Warrants with TSX
CARBIDE/GRAPHITE: Inks Definitive Pact to Sell Unit's Assets
CARIBBEAN PETROLEUM: Wants to Stretch Exclusivity to December 2

COMDISCO: Makes Initial Distribution to Shareholders & Creditors
COMMUNICATION DYNAMICS: Gets Nod to Use GECC's Cash Collateral
COVANTA ENERGY: Wins OK to Implement Broad-Based Severance Plan
DTVN HOLDINGS: Files for Chapter 11 Protection in Dallas, Texas
ENCOMPASS SERVICES: Sr. Lenders Waive Loan Financial Covenants

ENRON CORP: Court Approves ENA's Merced Termination Settlement
EXODUS COMMS: EXDS Pursues $19 Million Recovery from 9 Creditors
FANNIE MAE: S&P Affirms Low-B Ratings on Four Classes of Notes
FEDERAL-MOGUL: Court Denies Committee's Restricted Docs. Demand
GE CAPITAL: S&P Affirms Ratings on Six Classes at Lower-B Levels

GLOBAL CROSSING: Court Extends IRS Bar Date Until Year-End
GRANITE BROADCASTING: S&P Affirms Junk Rating After Asset Sale
GUILFORD MILLS: Preparing to Emerge from Chapter 11 Proceeding
HADRO RESOURCES: June 30 Working Capital Deficit of $1.23 Mill.
HAYES LEMMERZ: Has Until Dec. 3 to Remove Prepetition Actions

HEALTHCARE INTEGRATED: Voluntary Chapter 11 Case Summary
HECLA MINING: Brings-In Ronald W. Clayton as VP, U.S. Operations
IBEAM BROADCASTING: Gets Approval to Delay Entry of Final Decree
J.L. HALSEY: Files Form 10-K for Year Ended June 30, 2002
KINETIC CONCEPTS: S&P Keeps Watch on B Ratings After Jury Award

KITTY HAWK: Successfully Emerges from Chapter 11 Bankruptcy
KMART CORP: Seeks Court Approval to Expand PwC's Engagement
LAIDLAW INC: Transport Board Allows Control on Seeley Bus Lines
LEAP WIRELESS: Initiates Brave Steps to Streamline Operations
LEHMAN BROTHERS: Fitch Affirms Class A-1 & A-2 Ratings at D/CCC

LUMENON INNOVATIVE: Reports Loss for Fifth Consecutive Year
MALLON RESOURCES: Black Hills Merger Deal Solves this Insolvency
MARINER POST-ACUTE: MHG Wants More Time to Challenge Claims
MATTRESS DISCOUNTERS: Standstill Pact Continues Until October 31
MIKOHN GAMING: Selling Lighting & Sign Unit to C.E.I. Holding

MITEC TELECOM: Working Capital Deficit Reaches C$3.5M at July 31
MORGAN STANLEY: Fitch Affirms Low-B & Junk Ratings on 7 Classes
NATIONSRENT INC: Signing-Up UBS Warburg for Financial Advice
NODAK MUTUAL: AM Best Keeping Watch on B++ Fin'l Strength Rating
NRG ENERGY: South Central Unit Defaults on Senior Secured Bonds

OWENS CORNING: Court Okays EPA Bar Date Extension to December 15
PATRIOT AIR: Case Summary & 20 Largest Unsecured Creditors
PCNET INT'L: Units File for CCAA Protection in British Columbia
PENNZOIL-QUAKER: S&P Keeps Low-B Debt Ratings on Watch Positive
PENTON MEDIA: Will Publish Third Quarter Results on October 31

PEREGRINE SYSTEMS: Asks Court to Fix December 16 Claims Bar Date
PLAINS ALL AMERICAN: Closes Financing Pacts to Augment Liquidity
PSINET: Goldin Resolved Dispute over Metamor Stock Sale to CIBER
SAKS: Consolidating Younkers Ops. into Carson Pirie Headquarters
SCIENTIFIC LEARNING: Names Jill Rutter Vice Pres. of Operations

SLI INC: Seeks Nod to Sign-Up Skadden Arps as Bankruptcy Counsel
SOFTCHOICE CORP: Commences Trading on Toronto Stock Exchange
SPINNAKER INDUSTRIES: Lynch Transfers Shares to a Brokerage Firm
STERLING BANCSHARES: Fitch Assigns BB+ Rating to $31-Mill. Trust
SUNBEAM: Court to Consider Disclosure Statement on Oct. 4, 2002

SUNBEAM: Court Extends Exclusive Periods Until December 15, 2002
TCW LINC: S&P Puts BB- Classes A-3A & A-3B on Watch Negative
TEMPLETON EMERGING: Completes Reorganization into a New Trust
TEMPLETON VIETNAM: Completes Reorg. into Developing Market Trust
TEXAS PETROCHEMICALS: S&P Hatchets BB- Corp. Credit Rating to B

TEXON INT'L: Ad Hoc Committee Agrees to Recapitalization
TOTAL IMAGE: TSX Knocks Off Shares for Violating Requirements
TRICORD SYSTEMS: Lunar Flare NAS Product Performance Jumps 80%
UAL CORP: S&P Slashes Series B Preferreds Rating to D from CC
US AIRWAYS: Receives Court's Blessing to Obtain Surety Bonds

USG CORP: Wants Deloitte & Touche to Render Additional Services
USI HOLDINGS: S&P Keeping Watch on B+ Counterparty Credit Rating
VIASYSTEMS GROUP: Files Chapter 11 Petition in S.D. New York
VITESSE SEMICONDUCTOR: Reiterates Earnings Guidance for Q4 2002
WORLDCOM INC: Creditors' Committee Hires Akin Gump as Counsel

XEROX CORPORATION: Appoints Three Executives to New Positions
XO COMMS: Assuming Amended Lease for LA, Calif. Carrier Center

* DebtTraders' Real-Time Bond Pricing

                          *********

360NETWORKS INC.: U.S. Court Confirms Plan of Reorganization
------------------------------------------------------------
360networks announced that the U.S. Bankruptcy Court for the
Southern District of New York has confirmed its plan of
reorganization, completing the final step in 360networks'
emergence plan from bankruptcy protection in the U.S. and CCAA
protection in Canada. The plan had received overwhelming
approval from 100% of the Company's senior lenders and 94% of
the unsecured U.S. creditors, who voted their claims last week.
Having previously obtained plan approval from the Supreme Court
of Canada on September 4, 2002, 360networks expects to emerge
from bankruptcy by the end of October.

During its restructuring, 360networks completed the lighting of
its U.S. and Canadian footprint and successfully grew its
monthly recurring revenue from lit services, including
wavelengths and private lines, while dramatically reducing its
monthly recurring expenses. 360networks will emerge with
approximately $100 million of cash and $215 million of bank debt
(reduced from the Company's pre-filing debt level of
approximately $2.7 billion). Given its strong liquidity
position, the Company's business plan does not anticipate
requiring additional capital prior to its debt maturing in five
years. The Company's equity will be held by 360's pre-filing
secured debt and unsecured trade creditors and by the Company's
employees.

"As the first long-haul telecommunications provider to
restructure successfully, we believe that our low debt level,
lean cost structure and innovative, focused product set will
enable us to be a key player in shaping the industry," said Greg
Maffei, president and chief executive officer of 360networks.
"This has been a painful process for our employees, customers
and stakeholders, but we believe that our restructuring leaves
us well-positioned. Throughout the restructuring, we have
maintained our operational focus and continue to deliver
excellent solutions for our customers. We see organic growth
opportunities in our sector and potentially in the consolidation
of carriers, and are confident we have the right team in place
to take advantage of these opportunities."

360networks also said that WL Ross & Co. LLC, a leading private
equity firm, has purchased debt securities of 360networks that
represent approximately 10% of the new equity and 13% of the
confirmed debt, and that 360networks and WL Ross & Co. will
partner to consider future acquisitions in the
telecommunications industry. In addition, Mr. Wilbur Ross,
founder and Chairman of WL Ross & Co., will join the board of
directors of the reorganized company. Over more than three
decades, Mr. Ross has built a strong reputation for seizing
opportunities to build value in restructured companies.

"After studying optical fiber network opportunities for more
than a year, we have concluded that 360networks presents the
most attractive combination of balance sheet strength, network
map, technology, proximity to cash flow breakeven and management
talent," said Wilbur Ross. "We see it as a logical base for the
imminent industry consolidation."

                    About 360networks

360networks offers telecommunications services and network
infrastructure in North America to telecommunications and data
communications companies. The company's optical mesh fiber
network is one of the largest and most advanced on the
continent, spanning approximately 25,000 miles (40,000
kilometers) and connecting 48 major cities in Canada and the
United States.

On June 28, 2001, certain companies in the 360networks group
voluntarily filed for protection under the Canadian Companies'
Creditors Arrangement Act (CCAA) and Chapter 11 of the U.S.
Bankruptcy Code. Additional information is available at
www.360.net.

                    About WL Ross

WL Ross & Co. LLC earlier this year organized International
Steel Group with $236 million of equity to buy and reactivate
the principal steel production and finishing assets of the
bankrupt LTV Steel Corp. and of Acme Steel Corp. and last year
invested a similar amount to acquire from the Japanese
government Kansai Sawayaka Bank in Osaka, Japan as the successor
to the failed Kofuku Bank. Private equity and hedge funds
operated by WL Ross & Co. LLC also are the largest bondholders
of Burlington Industries and recently renegotiated to a
successful conclusion the debt exchange offer proposed by
American Retirement Corp. Since its inception on April 1, 2000,
WL Ross & Co. LLC has sponsored more than $1.6 billion of
private equity and hedge fund commitments.


360NETWORKS: Inks New Jersey Turnpike Settlement Pact
-----------------------------------------------------
Two years ago, 360networks inc., and its debtor-affiliates and
New Jersey Turnpike Authority entered into an Agreement for
Indefeasible Right of Use of Duct and Dark Fiber.  Under the
Agreement, the Authority granted to the Debtors the right to
build and maintain a conduit containing 144 fibers along the 230
miles of the Authority's property.  In exchange, the Debtors
paid to the Authority a one-time user fee of $12,500,000 and
agreed to pay annual user and maintenance fees of $200,000.

Since the Debtors' business plan no longer requires the use of
all of the Fibers, they negotiated with the Authority for lower
fees.

Accordingly, the Debtors seek the Court's authority to enter
into a Settlement Agreement with the Authority on these terms:

    (a) 360 USA will transfer all of its rights and interest in
        130 miles of the Duct and Fiber to the Authority.  In
        consideration of the transfer, the Authority will grant
        360 USA an IRU in 12 dark fibers within the 130 miles of
        Duct being surrendered to the Authority, free and clear
        of all liens, claims and encumbrances.  360 USA will
        retain all of its rights in the remaining 100 miles of
        Duct and Fiber;

    (b) 360 USA will assume the Agreement, as modified by the
        Settlement, which govern the Debtor's continued use of
        the 360 USA Fibers and Duct;

    (c) 360 USA shall be exempt from all user and maintenance
        fees  associated with the 360 USA Fibers and Duct; and

    (d) 360 USA and the Authority will waive and mutually
        discharge all claims, if any, they have or may have up
        to the date of the execution of the Settlement
        Agreement. Among other things, this would result in the
        Authority waiving $390,000 of fees.

Shelly C. Chapman, Esq., at Willkie Farr & Gallagher, in New
York, contends that pursuant to Rule 9019 of the Federal Rules
of Bankruptcy Procedure and Section 365(a) of the Bankruptcy
Code, the Settlement Agreement should be approved because:

    (a) it is fair, equitable and in the best interest of the
        Debtors' estates;

    (b) it will relieve the Debtors of an annual payment
        obligation of $200,000 while preserving the Debtors'
        right to use the Fibers and Duct;

    (c) the Debtors are able to avoid possible cure claims that
        otherwise would arise from the Debtors' assumption of
        the Agreement;

    (d) all claims for payments due on or before the date of the
        Settlement Agreement will be mutually discharged; and

    (e) the Debtors are able to retain interests in fibers,
        conduit and collation space that are essential to their
        business plan. (360 Bankruptcy News, Issue No. 34;
        Bankruptcy Creditors' Service, Inc., 609/392-0900)   


ACME METALS: BofA Extends DIP Financing until November 29, 2002
---------------------------------------------------------------
Acme Metals Incorporated, along with its debtor-affiliates,
seeks approval from the U.S. Bankruptcy Court for the District
of Delaware of an extension of their existing postpetition
credit facility with Bank of America, N.A., until November 29,
2002.  The extension, the Debtors relate, is for the sole
purpose of securing the Company's reimbursement obligation for
an outstanding $1 million Letter of Credit issued under the
Existing Facility.

The Debtors report that Acme Steel is currently in the process
of implementing its Shut-Down and production at the Acme Steel
steel-making facility has ended as of December 2001.  Acme
Packaging on the other hand continues to generate positive cash
flow and the Debtors are working with their counsel, financial
advisors and key creditor constituencies toward reorganizing
Acme Packaging's business through a stand-alone restructuring of
that business.

The proceeds of the liquidation of Acme Steel's inventories and
accounts receivable have been applied to the repayment of the
Existing Facility. Currently, all borrowings under the Existing
Facility have been repaid except for the contingent
reimbursement obligation an outstanding $1 million Letter of
Credit issued in favor of Liberty Mutual Insurance Company.

Bank of America agreed to reduce its non-refundable monthly
amendment/extension fee from $10,000 to $7,500 each month. If
the Existing Facility is not extended, the Debtors relate that
the Debtors will be required to obtain a letter of credit with
another financing institution on less favorable terms.

The Maximum Revolver Amount will remain at $1,500,000 and
further borrowings or request for the issuance of new Letter of
Credit are generally precluded.

Acme Metals and its debtor-affiliates are engaged in the
business of steel manufacturing and fabricating. The Company
filed for chapter 11 bankruptcy protection on September 28,
1998. Brendan Linehan Shannon, Esq., and James L. Patton, Esq.,
at Young, Conaway, Stargatt & Taylor represent the Debtors in
their restructuring efforts. The Debtors' consolidated balance
sheet as of December 31, 2000 reports total assets of $654,421
and liabilities of $362,737.


ADVANCED GLASSFIBER: Sr. Lenders Agree to Forbear Until Oct. 31
---------------------------------------------------------------
Advanced Glassfiber Yarns LLC has reached an agreement on the
terms of an additional amendment and forbearance agreement with
its senior secured lenders under the Company's senior secured
revolving credit and term loan facility.

Previously, the Company had announced that it was in discussions
with its senior lenders regarding a consensual restructuring of
approximately $180 million of indebtedness outstanding under
such facility, and had obtained an agreement from such lenders
to forbear from exercising rights and remedies under such
facility until September 27, 2002. Under the latest amendment
and forbearance agreement, the Company's senior lenders agreed,
among other things, to extend the forbearance period until
October 31, 2002 while the parties continue restructuring
discussions. In connection with this agreement, the Company,
among other things, will not be making an approximately $5.9
million scheduled principal repayment under its term loan
facility that was due on September 30, 2002, and will be subject
to a borrowing cap of $35 million under its revolving credit
facility. The Company currently anticipates that it will have
sufficient liquidity to satisfy its cash obligations in the
foreseeable future including day-to-day trade obligations.

The Company also advised that it intends to use the time
afforded under the latest forbearance agreement to continue
restructuring discussions with an ad hoc committee of its $150
million of 9-7/8% senior subordinated notes.

The Company noted, however, that there can be no assurance that
it will be successful in achieving a consensual restructuring of
its senior secured or senior subordinated indebtedness, in which
event, the Company will explore all viable alternatives.

Advanced Glassfiber Yarns, headquartered in Aiken, SC, is one of
the largest global suppliers of glass yarns, which are a
critical material used in a variety of electronic, industrial,
construction and specialty applications.


AGWAY INC: Voluntary Chapter 11 Case Summary
--------------------------------------------
Lead Debtor: Agway, Inc.
             aka Agway Agricultural Products
             aka Agway Agronomy
             aka Agway Bean Company
             aka Agway Consumer Products
             aka Agway Coordinated Dairy Systems Company
             aka Agway Country Foods
             aka Agway Country Products
             aka Agway CPG Technologies International
             aka Agway Feed & Nutrition Company
             aka Agway Financial Corporation
             aka Agway Flour Company
             aka Agway Holdings Inc.
             aka Agway Research Center
             aka Agway Retail Services
             aka Agway Water Treatment Systems
             aka Allied Seed Cooperative
             aka Andgrow
             aka Andgrow Fertilizer
             aka Apex Bag Company

             Blue Ribbon Seed Potato Company
             aka Central Maine Feed
             aka Country Best
             aka Country Gardens
             aka CPG Nutrients
             aka CPG Technologies
             aka Cultivations
             aka Devitts
             aka Empire Sweets
             aka G&P Fresh Pac
             aka Mid-State Fresh
             aka Mid-State Potato Distributors
             aka Milford Fertilizer Company
             aka ProPet
             aka ProLawn Products
             aka Reading Bone
             aka Reading Bone Fertilizer
             aka Respond Feed
             aka Salem Country Gardens
             aka Seedway
             aka Shopworks
             aka Sunflower
             aka Vanguard Nutrition Products

             333 Butternut Drive
             DeWitt, NY 13214

Bankruptcy Case No.: 02-65872

Debtor affiliates filing separate chapter 11 petitions:

Entity                                     Case No.
------                                     --------
Agway General Agency, Inc.                 02-65873
Brubaker Agronomic Consulting Service LLC  02-65874
Country Best Adams, LLC                    02-65875
Country Best-DeBerry LLC                   02-65876
Feed Commodities International LLC         02-65877

Type of Business: Agway, an agricultural co-op, has 69,000
                  members, primarily in the Northeast. The co-
                  op's Agricultural Group sells feeds, seeds,
                  fertilizers, and other farm supplies to
                  members and other growers. Agway's Country
                  Products Group processes and markets fresh
                  produce (mostly under the Country Best
                  label). It also invests in new agricultural
                  technology. Agway Energy Products sells fuel
                  and HVAC systems and markets electricity and
                  gas in deregulated states. Agway also offers
                  leasing services.

Chapter 11 Petition Date: October 1, 2002

Court: Northern District of New York (Utica)

Judge: Stephen D. Gerling

Debtors' Counsel: Menter, Rudin & Trivelpiece, P.C.
                  500 South Salina Street, Suite 500
                  Syracuse, NY 13202
                  315-474-7541

Total Assets: $1,574,360,000 (as of June 30, 2002)

Total Debts: $1,510,258,000 (as of June 30, 2002)


AIR CANADA: Closes Sale-Leaseback Transaction at about C$100MM
--------------------------------------------------------------
Air Canada announced the completion of an engine sale-leaseback
transaction providing approximately C$100 million of new funding
for the carrier, which will be used for repayment of third
quarter debt maturities. In an agreement with GE Engine Leasing
and Shannon Engine Support, Air Canada sold and leased-back
eleven owned spare engines.

"We will continue to access financing, including sale and
leaseback transactions and asset sales to maintain the company's
liquidity requirements in these uncertain times for the airline
industry world-wide," said Rob Peterson, Executive Vice
President and Chief Financial Officer.

GE Engine Leasing is a joint services unit of GE Engine Services
and GE Capital Aviation Services Inc. Shannon Engine Support is
a wholly-owned subsidiary of CFM International. CFM is a 50/50
joint company between SNECMA Moteurs of France and General
Electric of the United States.

                           *   *   *

As previously reported, Standard & Poor's downgraded its senior
unsecured debt rating for Air Canada to 'B' from 'B+',
reflecting reduced asset protection for unsecured creditors and
application of revised criteria for "notching" down of such debt
ratings based on the proportion of secured debt in a company's
capital structure.

According to the report, the rating actions did not indicate a
changed estimate of default risk, but rather poorer prospects
for recovery on senior unsecured obligations if the affected
airline were to become insolvent.

Air Canada's 10.25% bonds due 2011 (AIRC11CAN1) are trading at
50 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AIRC11CAN1
for real-time bond pricing.


ALLMERICA: S&P Cuts Ratings on 2 Related Synthetic Transactions
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on two
synthetic transactions related to AFC Capital Trust I to single-
'B'-minus from double-'B'-plus and placed them on CreditWatch
with negative implications.

The rating actions follow the lowering of Allmerica Financial
Corp.'s preferred stock (AFC Capital Trust I) rating on
September 27, 2002.

The two transactions are swap-independent synthetic transactions
that are weak-linked to the underlying collateral, AFC Capital
Trust I's preferred shares. The lowered ratings reflect the
credit quality of the underlying securities issued by AFC
Capital Trust I.

     Ratings Lowered and Placed On Creditwatch Negative

            PreferredPLUS Trust Series ALL-1
      $48 million trust certificates series ALL-1

                          Rating
          Class     To                From
          A      B-/Watch Neg      BB+
          B         B-/Watch Neg      BB+

            CorTs Trust For AFC Capital Trust I
          $36 million Allmerica corporate-backed
     trust securities (CorTs) certificates series 2001-19

                          Rating
          Class     To                From
          A         B-/Watch Neg      BB+


AMTRADE INTERNATIONAL: Fitch Drops Ratings to Default Level
-----------------------------------------------------------
Fitch Ratings has downgraded its long-term issuer and long-term
deposit ratings for AmTrade International Bank to 'D' from 'BB'
and 'BB+', respectively. A complete list of affected ratings is
included at the end of this release. The rating action is in
response to the Federal Deposit Insurance Corporation being
named receiver following the closure of the bank by Commissioner
of Banking and Finance for the state of Georgia.

At the time of the regulatory action the bank had approximately
$12 million in assets and $10 million in deposits. The FDIC has
approved the payout of all insured depositors. The level of
uninsured deposits is not known. Fitch's assignment of a 'D'
rating to the uninsured deposits and other obligations of
AmTrade reflects an expected recovery rate below 50 percent. The
low level of expected recovery is based on the fact that AmTrade
has been actively liquidating itself in the third quarter
(assets at June 30, 2002 were $92 million). Fitch previously
anticipated that AmTrade would successfully complete its self-
liquidation with no loss to creditors. The current situation
suggests remaining assets may provide minimal additional funds
to meet outstanding obligations.

                     Ratings Downgraded

                 AmTrade International Bank

      -- Long-Term Deposits to 'D' from BB+';

      -- Short-Term Deposits to 'D' from 'B';

      -- Long-Term Issuer Rating to 'D' from 'BB';

      -- Short-Term Issuer Rating to 'D' from 'B';

      -- Individual Rating to 'E' from 'C/D'.


ANACOMP INC: Appoints Jeff Cramer as Chief Executive Officer
------------------------------------------------------------
Anacomp, Inc. (OTC Bulletin Board: ANCPA), a global provider of
information outsourcing, maintenance support and document output
solutions, announced the promotion of its president Jeff Cramer
to the additional role of chief executive officer.

Phil Smoot, who had been CEO of the Company since August 2000,
remains chairman of the board for Anacomp.

"I've worked closely with Jeff over the past two years and
believe he has the experience, knowledge and, most importantly,
the vision to guide Anacomp and its people to a very successful
future," said Smoot.  "Jeff's ideal blend of customer focus,
financial experience and market knowledge will no doubt ensure
an excellent environment for Anacomp and its customers,
employees and shareholders."

Cramer has served as Anacomp's president since March 2002.  
Previously, he was senior vice president and general manager of
its technical services division, a position he held for over
four years.  He joined the Company in 1996 as senior vice
president of business development.

Cramer's 25-plus-year business career spans a variety of
industries, domestic and international operations, and both
public and private companies. Prior to joining Anacomp, he
served as chief executive officer of COM Products, Inc.  He has
also held senior roles with Bell and Howell Company, COSCO
Industries, Inc. and Grumman Corporation.

"I look forward to having the opportunity to shape Anacomp's
strategic direction," said Cramer.  "Phil's efforts in the last
two years have laid the groundwork for the Company's return to
profitability.  Now Anacomp is ready to accelerate the growth of
its Web and Multi-Vendor Services businesses, while remaining
the undisputed leader in COM [computer output to microfiche]."

Smoot, who joined Anacomp in August 2000 as president and chief
executive officer, was elected chairman of the board in November
2001.  During his tenure as chief executive officer, he led
Anacomp through a successful debt restructuring and
reorganization of its worldwide operations.  In his continuing
role as chairman, Smoot will remain involved in overseeing
Anacomp's operations and its ongoing efforts to improve its
financial position.

Headquartered in San Diego, Anacomp, Inc., provides information
outsourcing, maintenance support and document output solutions
for businesses and organizations around the globe.  Anacomp
offers a full range of solutions to meet end-user document
capture, presentation, retrieval and archive requirements, as
well as computer room and networking equipment services, output
systems and supplies needs.  Current service and product
offerings include digital document services, document imaging
services, print and micrographic services, business continuity
services, multi-vendor services and support, and imaging and
print systems and supplies. For more information, visit
Anacomp's Web site at http://www.anacomp.com  

Anacomp Inc.'s June 30 balance sheets show a negative working
capital of $16.3 million. The negative working capital results   
from the current period reclassification of its $33.5 million
revolving credit facility, due June 30, 2003, from long-term to
current.


ANC RENTAL: Wants to Consolidate Operations at O'Hare Airport
-------------------------------------------------------------
In order to acquire significant cost savings at the O'Hare
International Airport in Chicago, Illinois, ANC Rental
Corporation and its debtor-affiliates operate the two brand
names -- Alamo and National -- on a consolidated basis.

Alamo and National are each parties to a License of Terminal
Space, which serves as a concession agreement, with the City of
Chicago.  National is also a party to a month-to-month agreement
Lease of On-Airport Service Facility with the City of Chicago.

Thus, the Debtors seek authority to reject the Alamo Concession
Agreement and assume and assign the National Concession
Agreement and the National Lease to ANC Rental Corporation.

Bonnie Glantz Fatell, Esq., at Blank Rome Comisky & McCauley
LLP, in Wilmington, Delaware, tells the Court that the
concession agreements only permit dual branding with the airport
authority's consent.  As a condition for the airport authority's
consent to the motion, the Debtors have agreed to increase their
Minimum Annual Guarantee Fee under the National Concession
Agreement from $2,474,616 to $3,700,000.  The Debtors will also
increase the security deposit required pursuant to the National
Concession Agreement to $925,000.  The Debtors, in addition,
will pay any debt outstanding to the airport authority arising
out of the Alamo Concession Agreement through the date of
rejection.

The consolidation of operations at the O'Hare Airport is
expected to save the Debtors over $2,347,000 per year in fixed
facility costs and other operational cost savings. (ANC Rental
Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


APPLE CAPITOL: Selling Certain Secured Debt to Applebee's Int'l
---------------------------------------------------------------
Applebee's International, Inc., (Nasdaq:APPB) has entered into
an agreement to acquire certain secured debt of Apple Capitol
Group, LLC owed to Lehman Brothers Holdings, Inc., for $34.3
million.  This agreement is subject to the consummation of
Applebee's International's previously announced potential
acquisition of 21 franchise restaurants located in the
Washington, D.C., area from Apple Capitol, an existing
franchisee. The company continues to expect to close under its
negotiated purchase agreement to acquire the 21 restaurants in
the fourth quarter of 2002, subject to normal bankruptcy court
bidding procedures, obtaining operating licenses and other
third-party consents.

Applebee's International, Inc., headquartered in Overland Park,
Kan., develops, franchises and operates restaurants under the
Applebee's Neighborhood Grill and Bar brand, the largest casual
dining concept in the world. There are currently 1,459
Applebee's restaurants operating system-wide in 49 states and
eight international countries. Additional information on
Applebee's International can be found at the company's Web site  
http://www.applebees.com


BBVA BANCOMER: New York Agency Commences Voluntary Liquidation
--------------------------------------------------------------
                   NOTICE TO THE CUSTOMERS
                      AND CREDITORS OF
                     BBVA BANCOMER, S.A.

On August 16, 2002, BBVA Bancomer, S.A., commenced the voluntary
liquidation of its New York agency located at 1370 Avenue of the
Americas, 21st Floor, New York, New York 10019, under the
provisions of Section 605(11)(c) of the New York Banking Law.
Upon completion of the liquidation, it is expected that
substantially all of the business of the New York agency will be
transferred to and conducted by BBVA Bancomer's Los Angeles
agency at 444 South Flower Street, Suite 100, Los Angeles,
California 90071. Any claims on BBVA Bancomer's New York Agency
should be submitted by November 18, 2002 to Mr. Volker
Mergenthaler, Vice President, at the New York agency address
first listed above, telephone (212) 445-1010.  Questions also
may be referred to Mr. Jos Antonio Padilla, Executive Vice
President & General Manager, U.S Agencies, or to Mr. Gabriel
Palafox, Vice President, at the bank's Los Angeles agency,
telephone (213) 489-7245.


BEAR STEARNS: Fitch Affirms 6 P-T Certs. Ratings at Low-B Level
---------------------------------------------------------------
Bear Stearns Commercial Mortgage Securities Inc.'s commercial
mortgage pass-through certificates, series 2001-TOP2 Trust Fund,
$312.3 million class A-1, $529.7 million class A-2, and
interest-only classes X-1 and X-2 are affirmed at 'AAA' by Fitch
Ratings. In addition, Fitch affirms the following classes: $26.4
million class B at 'AA', $30.2 million class C at 'A', $10.1
million class D at 'A-', $23.9 million class E at 'BBB', $8.8
million class F at 'BBB-', $16.4 million class G at 'BB+', $6.3
million class H 'BB', $7.5 million class J at 'BB-', $3.8
million class K at 'B+', $5 million class L at 'B' and $2.5
million class M at 'B-'. Fitch does not rate the $10.1 million
class N. The affirmations follow Fitch's annual review of the
transaction, which closed in May 2001.

The rating affirmations reflect the consistent loan performance
and minimal reduction of the pool collateral balance since
closing. There are currently no delinquent loans. Three loans
(1.9%) are being specially serviced. As of the August 2002
distribution date, the pool's aggregate certificate balance has
decreased by 1.3% since closing, to $993 billion from $1.01
billion. The certificates are collateralized by 140 fixed-rate
mortgage loans, consisting primarily of office (29.3% by
balance), industrial (24.4%), and retail (21.7%) properties,
with concentrations in California (25.2%), New Jersey (8.1%),
and New York (7.6%).

Wells Fargo Bank, master servicer, provided year-end 2001
borrower operating statements for 100% of the pool's outstanding
balance. The weighted average debt service coverage ratio for YE
2001 remains relatively unchanged at 1.61 times compared to
1.60x at closing. Three loans (1.5%) reported YE 2001 DSCRs
below 1.00x.

Fitch reviewed the performance and underlying collateral of the
deal's four loans which Fitch considered as having investment
grade credit characteristics at closing, Westin River North
(5.5%), The Summit at Westchester (2%), Mansfield Village
Apartments (1.8%), and Tech Ridge (1.5%). Of these loans, Fitch
no longer considers Westin River North to have investment grade
credit characteristics. In general, DSCRs for these loans were
derived by using the borrower net operating income less Fitch
underwritten reserves and debt service payments based on the
original balance and a stressed refinance constants.

Westin River North is a 424 room full-service hotel located in
Chicago, IL. Since origination, the property's performance has
deteriorated due to economic factors and the effects of Sept.
11. The YE 2001 DSCR has decreased to 1.44x, compared to 2.03x
as of trailing-twelve months ending February 2001.

The Summit at Westchester is a 228,920-sf multi-tenant office
building located in Valhalla, NY. The YE 2001 DSCR has decreased
to 1.12x, compared to 1.28x as of YE 1999. The decrease is
mostly due to an increase in utility costs, which expense was
not fully reimbursed to the borrower. In addition, a number of
tenants took occupancy in 2001, which could have attributed to
some loss in rents and reimbursements for this period. As of
March 31, 2002, the property was 100% occupied, compared to 90%
at closing.

Mansfield Village Apartments is an 812-unit multifamily property
located in Mansfield, NJ. The YE 2001 DSCR has decreased to
0.93x, compared to 1.39x as of YE 1999. However, the most recent
YE coverage reflects capital improvement expenses that were
classified as operating expenses in the repairs and maintenance
(R&M) line item. The DSCR increases to 1.64x when adjusting the
DSCR to reflect a more normalized R&M expense. This adjusted
coverage is in-line with the original reported Fitch stressed
DSCR of 1.71x. As of March 2002, the property was 93% occupied,
compared to 95% at closing.

Tech Ridge is a 340,076-sf industrial building located in
Austin, TX. The YE 2001 DSCR has increased to 1.93x, compared to
1.65x at closing. The current DSCR was derived by using Fitch's
original vacancy factor of 5%, and the closing DSCR was derived
by using Fitch's original underwritten net cash flow (NCF). The
property is 100% occupied as of December 2001, which is in-line
to the occupancy at closing. Fitch will continue to monitor this
transaction, as surveillance is ongoing.


BORDEN CHEMICALS: Wants to Extend DIP Loan Pact Until Dec. 31
-------------------------------------------------------------
Borden Chemicals and Plastics Operating Limited Partnership
wants to extend its DIP Financing under a Modified Loan
Agreement with BCP Management, Inc.

The Debtors tell the U.S. Bankruptcy Court for the District of
Delaware that it is in the best interest of its estates and
creditors that the Company be authorized to continue to borrow
money from BCPM.  The Debtors wish to continue and extend the
Modified Loan Agreement until December 31, 2002 and reduce
available borrowing to $7,500,000.

In order to prevent harm to its estate, the Debtors should be
authorized to incur debt to meet its working capital needs, the
Company tells the Court.  The Debtors point out that continued
borrowing from BCPM is consistent with the obligations of BCP to
maximize the value of its assets and minimize disruption to its
business.

Borden Chemicals and Plastics Operating Limited Partnership, a
producer of PVC resins, filed for chapter 11 protection on April
3, 2001. Michael Lastowski, Esq., at Duane, Morris, & Hecksher
represents the Debtors in their restructuring efforts.

DebtTraders reports that Borden Chemical & Plastics' 9.50% bonds
due 2005 (BCPU05USR1) are trading at less than a penny on the
dollar. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=BCPU05USR1


BRIGHTPOINT INC: Repurchases Additional Convertible Notes
---------------------------------------------------------
Brightpoint, Inc., (NASDAQ:CELL) has repurchased an additional
132,381 of its 166,708 outstanding convertible, subordinated,
zero-coupon Convertible Notes due 2018. The aggregate purchase
price for the Convertible Notes was approximately $45 million
(at an average cost of approximately $340 per Convertible Note).
Approximately $30 million of the purchase price was funded by
cash held by Brightpoint Holdings B.V., the Company's primary
foreign finance subsidiary and through a borrowing of
approximately $15 million under the credit facility with General
Electric Capital Corporation and the Company's primary North
American operating subsidiaries, Brightpoint North America L.P.
and Wireless Fulfillment Services. During the third quarter of
2002, the Company has purchased, in the aggregate, 162,706
Convertible Notes at a total cost of approximately $54 million.
The Company now has an aggregate of 34,327 Convertible Notes
outstanding with an accreted value of approximately $18.6
million (approximately $542 per Convertible Note) as of
September 27, 2002.

The timing and amount of additional repurchases, if any, will
depend on many factors, including but not limited to, the
availability of capital, the prevailing market price of the
Convertible Notes and overall market conditions. No assurance
can be given that the Company will repurchase any additional
Convertible Notes. Additional information concerning the
Convertible Notes can be found in the Company's filings with the
Securities and Exchange Commission.

Brightpoint is one of the world's largest distributors of mobile
phones. Brightpoint supports the global wireless
telecommunications and data industry, providing quickly
deployed, flexible and cost effective third party solutions.
Brightpoint's innovative services include distribution, channel
management, fulfillment, eBusiness solutions and other
outsourced services that integrate seamlessly with its
customers. Additional information about Brightpoint can be found
on its Web site at http://www.brightpoint.comor by calling its  
toll-free Investor Relations Information line at 877-IIR-CELL
(877-447-2355).

                              *   *   *

As reported in Troubled Company Reporter's May 8, 2002 edition,
Standard & Poor's lowered its corporate credit rating on
Brightpoint Inc., to 'B+' from 'BB-'. The downgrade reflected a
net loss from continuing operations for the quarter ended March
31, 2002. Outlook is negative.

The ratings reflect Indianapolis, Indiana-based Brightpoint's
position as a leading distributor and provider of value-added
logistics services in the fragmented and highly competitive
wireless communications products distribution market. Increased
market saturation for wireless handsets, and global economic
weakness, particularly in the U.S., has resulted in lower
consumer demand and diminished near-term growth prospects for
Brightpoint.

                     RATINGS LIST

      RATINGS LOWERED                          TO           FROM

   Brightpoint Inc.

      * Corporate credit rating                B+            BB-
      * Senior secured debt                    BB-           BB
      * Subordinated debt                      B-             B


BUDGET GROUP: Wants to Expand Fowler White's Scope of Engagement
----------------------------------------------------------------
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor LLP,
in Wilmington, Delaware, tells the Court that Budget Group Inc.,
and its debtor-affiliates want Fowler White Burnett P.A. to
provide these additional services:

A. Counseling and providing strategic advice to the Debtors
   concerning litigation and corporate related services that
   Fowler currently provides to and requested by the Debtors in
   the ordinary course of their business;

B. Providing counseling and strategic advice to and
   representation of the Debtors in connection with litigation
   and corporate issues arising under Florida law with respect
   to the Debtors' ongoing operations in Florida on an "as-
   needed" basis; and

C. Providing litigation advice to, support and representation of
   the Debtors regarding the protection of their bankruptcy
   estates against non-bankruptcy actions brought in Florida
   seeking acquisition of property of the Debtors' bankruptcy
   estates.

Mr. Brady informs the Court that for several years prior to the
Petition Date, Fowler represented the Debtors in connection with
various litigation and corporate related issues stemming from
their business operations in Florida.  The Debtors believe that
Fowler's continued representation by rendering these
supplemental services is essential to their a successful Chapter
11 process and will provide a substantial benefit to the Debtors
and their estates.

Although the supplemental services that Fowler will be providing
are in the ordinary course of business, Mr. Brady relates that
Fowler will be submitting its application for compensation as a
supplement to their application for compensation as the Debtors'
special counsel in the Ryder litigation.

The $48,535 retainer that Fowler has received from the Debtors
will constitute a general retainer with respect to the charges
to be incurred by the Fowler for its services, including the
supplemental services. (Budget Group Bankruptcy News, Issue No.
8; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


BURLINGTON INDUSTRIES: Plan Exclusivity Intact through Jan. 31
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware granted
Burlington Industries, Inc., and its debtor-affiliates a second
extension of their exclusive periods. The Debtors continues to
maintain the exclusive right to file and propose a chapter 11
plan until January 31, 2003, and the exclusive right to solicit
acceptances of that plan from their creditors until March 31,
2002.

Burlington Industries, Inc., is one of the world's largest and
most diversified manufacturers of softgoods for apparel and
interior furnishings. Burlington Industries filed for Chapter 11
reorganization on November 15, 2001.

Burlington Industries' 7.25 bonds due 2005 (BRLG05USR1),
DebtTraders reports, are trading at 27 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BRLG05USR1
for real-time bond pricing.


CANADIAN IMPERIAL: Applies for Repricing of Warrants with TSX
-------------------------------------------------------------
Canadian Imperial Venture Corp., has made application with the
TSX Venture Exchange for the repricing of certain outstanding
warrants issued in private placements which closed in October
and December 2000 and February 2001.

The Company is seeking Exchange approval to have 2,156,250
warrants originally issued on October 13, 2000 and 4,008,347
warrants issued on December 29, 2000 and February 2, 2001
repriced to $0.17. The original exercise price of these warrants
was $0.21 for those issued in October and $0.55 for those issued
in December and February. The expiry date for all the warrants
will remain unchanged at October 13, 2002.

                         *   *   *

As reported in the September 18, 2002 edition of Troubled
Company Reporter, Canadian Imperial Venture Corp.,(TSX: CQV)
issued a total of 4,178,648 to four creditors in connection with
its shares for debt settlement which it originally announced on
July 19, 2002. The four creditors have settled debts with the
Company with the aggregate value of $1,044,662. The shares were
issued at a deemed price of $0.25. The issuance of shares to the
four creditors was permitted under statutory exemptions to the
prospectus and registration requirements of securities
legislation. The shares will have a hold period expiring January
10, 2003.


CARBIDE/GRAPHITE: Inks Definitive Pact to Sell Unit's Assets
------------------------------------------------------------
The Carbide/Graphite Group, Inc., announced that as part of its
efforts to emerge from Chapter 11 Bankruptcy, it has signed a
definitive purchase agreement with Carbide Acquisition LLC for
the assets associated with C/G's carbide products business unit.  
The terms of the Section 363 asset sale were filed with the
Western District of Pennsylvania Bankruptcy Court on September
20, 2002.  

Carbide Acquisition LLC was formed between JP Industries, Inc.,
a private investment company headquartered in Cleveland, Ohio,
and Carbide Products management. The new entity will continue to
operate the carbide products business in Louisville and Calvert
City, KY.  Walter Fowler, C/G's CEO, commented, "The sale of our
Carbide business to JP is an important step to ensure
uninterrupted product supply to our customers.  The new company
will continue operations in Louisville and Calvert City under
the direction of the existing, experienced management team.  
This transaction is an important further step to bringing all of
the assets of C/G out of bankruptcy."  Consummation of
transaction is subject to an auction to be conducted by the
Bankruptcy Court on October 16, 2002.


CARIBBEAN PETROLEUM: Wants to Stretch Exclusivity to December 2
---------------------------------------------------------------
Caribbean Petroleum LP and its debtor-affiliates want to extend
their exclusive periods during which they may file a plan of
reorganization and solicit acceptances of that plan from their
creditors.  The Debtors want the Court to give them until
December 2, 2002 to propose and file a plan and until
February 3, 2003 to solicit creditors' acceptances of that plan.

When Caribbean filed for bankruptcy, the Debtors' primary
concern was to stabilize its operations.  Having done so, the
Debtors next focus was on formulating a business plan that would
allow the Debtors to pay a dividend to unsecured creditors and
successfully emerge from bankruptcy.  The preparation of that
business plan involved a thorough review and analysis of the
Debtors' physical and financial operations.

At the same time the Debtors were formulating their business
plan and negotiating for financing, they were interviewing
investment bankers who could assist them in selling some or all
of their assets.  

The Debtors need an extension of their exclusive periods in
order to determine whether a standalone restructuring or a sale
of the business will deliver greater value to stakeholders.

Caribbean Petroleum LP distributes petroleum products and
owns/leases real property on which service stations selling
petroleum products are stored and sold to retail customers. The
Debtors filed for chapter 11 protection on December 17, 2001.
Michael Lastowski, Esq., and William Kevin Harrington, Esq., at
Duane, Morris & Heckscher LLP represent the Debtors in their
restructuring efforts.


CHANGE TECHNOLOGY: Board of Directors Adopts Plan of Liquidation
----------------------------------------------------------------
Change Technology Partners, Inc., (OTC Bulletin Board: CTPI)
announced that its Board of Directors has adopted a plan of
complete liquidation and dissolution in order to maximize
shareholder value. In reaching its decision, Change's Board of
Directors considered principally the provisions of the
Investment Company Act of 1940, which would have required the
Company to register as an "investment company" in the absence of
the adoption of the plan of liquidation.

The plan of liquidation and dissolution adopted by Change's
Board of Directors anticipates the continuation of the Company's
current business activities pending an orderly wind down of its
operations.  Additionally, the plan provides that in the event
the Company's Board of Directors determines that it would be in
the best interests of the Company and its stockholders to amend,
modify or abandon the plan of liquidation and dissolution, it
may do so notwithstanding stockholder approval to the extent
permitted by applicable law.

The Company intends to seek stockholder approval of the plan of
liquidation and dissolution at its next annual meeting, expected
to be held in the Spring of 2003.  Subject to approval of the
plan by holders of a majority of the Company's outstanding
shares, the Company plans to sell its assets, discharge its
liabilities and distribute the net proceeds to its stockholders.


COMDISCO: Makes Initial Distribution to Shareholders & Creditors
----------------------------------------------------------------
Comdisco Holding Company, Inc., (OTC:CDCO) announced that Monday
it commenced its initial distribution to holders of allowed
claims, as outlined in its First Amended Joint Plan of
Reorganization, which became effective on August 12, 2002.
Additionally, Comdisco said it established a disputed claims
reserve for holders of claims that are currently disputed, but
may subsequently be allowed in full or in part. In connection
with the initial distribution, the company allowed claims for
Class C-4 general unsecured creditors in the amount of $3.628
billion and the disputed claims reserve has been established at
$450 million.

As discussed in the Plan, Comdisco issued Senior Notes due 2004
in the face amount of $400 million with a variable interest rate
equal to the three month LIBOR plus 3 percent and Subordinated
Payment-in-Kind Notes due 2005 in the face amount of $650
million with a fixed interest rate of 11 percent. Comdisco also
issued approximately 4.2 million shares of new common stock to
be distributed in accordance with the Plan. In addition, the
cash to be distributed totals approximately $2.2 billion.

In the initial distribution, allowed general unsecured creditors
will receive cash equal to approximately 55 percent of their
allowed claims, and pro-rata shares of the Senior Notes, PIK
Notes, and new common stock. Distributions to holders of claims
that are disputed have been funded into a disputed claims
reserve based on Court approved estimates for further
distribution as and when their claims are resolved. Holders of
convenience claims will be paid in cash at the rate of 89.8
percent of the ultimate allowed amount of their claims.

The company anticipates that the new common stock will be traded
on the NASDAQ OTC under the symbol CDCO.

Comdisco is required to make further distributions on a
quarterly basis. It may make distributions more frequently, if
appropriate. The company also currently anticipates making a
significant optional redemption on the Senior Notes before the
end of calendar year 2002.

Comdisco's old common stock was cancelled on August 12, 2002.
Former common shareholders are entitled to distributions of
contingent distribution rights under the Plan. In order to be
eligible to receive any distribution of CDRs, former common
shareholders must properly complete a transmittal form and
surrender all shares of old common stock to Mellon Investors
Services LLC prior to August 12, 2003. Transmittal forms and
information packages describing the procedures for exchanging
old common stock certificates for the CDRs are being mailed this
week to holders of the old common stock. For additional
information concerning the CDRs, please refer to the Plan and
the Form 8-A filed with the Securities & Exchange Commission by
Comdisco on August 12, 2002.

The company anticipates that the CDRs will trade on the
NASDAQ:OTC under the symbol CDCJ.

Wells Fargo Bank will serve as the disbursing agent for all
distributions, except for those to former common stockholders.
Mellon Investor Services will serve as disbursing agent for
distributions to former common stockholders.

Comdisco's Plan calls for an orderly runoff or sale of the
company's remaining assets, which is expected to be completed by
the end of fiscal year 2004.

The purpose of reorganized Comdisco is to sell, collect or
otherwise reduce to money the remaining assets of the
corporation in an orderly manner. Rosemont, IL-based Comdisco --
http://www.comdisco.com-- provided equipment leasing and  
technology services to help its customers maximize technology
functionality and predictability, while freeing them from the
complexity of managing their technology. Through its Ventures
division, Comdisco provided equipment leasing and other
financing and services to venture capital backed companies.


COMMUNICATION DYNAMICS: Gets Nod to Use GECC's Cash Collateral
--------------------------------------------------------------
Communication Dynamics, Inc., and its debtor-affiliates sought
and obtained interim authority from the U.S. Bankruptcy Court
for the District of Delaware to use General Electric Credit
Corporation's cash collateral.

The Court allows the Debtors to use GECC's cash collateral until
October 15, 2002 pursuant to this 4-Week Budget:

                  Sept. 27    Oct. 4     Oct. 11     Oct. 15
                  --------    ------     -------     -------  
Collection        $3,862,184  $3,041,512 $3,091,198  $2,100,385
Total
  Disbursements    2,031,907   4,525,878  2,445,970   3,239,502
Net Cash          $1,830,277 $(1,484,366)  $645,228   $(238,952)

A hearing to consider the Debtors' request for final approval to
use GECC's cash collateral is scheduled for October 31, 2002.

The Debtors explain that even in the event sales decline, they
expect that their overall cash flow in the near term will be
positive or neutral.

Prior to the Petition Date, the Debtors obtained financing with
General Electric Credit Corporation. To secure the obligations
owing under the Senior Loan Agreements, the Debtors pledged as
collateral substantially all of the Debtors' assets to the
Senior Lenders.

The Debtor purportedly breached certain financial covenants
under this Facility.  The Forebearance Agreement is terminated.
Thereafter, the Debtors and the Senior Lenders attempted to
negotiate the terms of a debtor in possession financing
agreement and an additional period of forebearance. Around
September 2002, these negotiations broke down.

As a consequence to the threatened default which would have
resulted in the Senior Lender's sweeping substantially all of
the Debtors' cash, the Debtors were forced to seek immediate
relief under Chapter 11 of the Bankruptcy Code.

Given the purported encumbrances upon substantially all of the
Debtors' assets, the immediate use of the Debtors' assets that
may become cash collateral is required to fund the day-to-day
operations of the Debtors. If not for the Cash Collateral, the
Debtors will be unable to continue funding their business
operations that are essential to the Debtors' existence as a
going concern, all to the detriment of their creditors,
including the Senior Lenders.

The Debtors have determined that maintaining their operations as
a going-concern will yield values far in excess of values that
will otherwise be derived by a shut-down of business operations
and a wholesale liquidation at distressed process.  The Debtors
believe that if they be given appropriate time to complete the
operational restructuring, values approaching the Senior
Lenders' secured claims may be obtained, resulting in value
being available for distribution to general unsecured creditors.

Communication Dynamics, Inc., together with its Debtor and non-
Debtor affiliates, is one of the largest multinational suppliers
of infrastructure equipment to the broadband communications
industry. The Debtors filed for chapter 11 protection on
September 23, 2002.  Thomas E. Lauria, Esq., at White & Case and
Jeffrey M. Schlerf, Esq., at The Bayard Firm represent the
Debtors in their restructuring efforts.  When the Company filed
for protection from its creditors, it listed more than $100
million both in estimated assets and debts.


COVANTA ENERGY: Wins OK to Implement Broad-Based Severance Plan
---------------------------------------------------------------
Covanta Energy Corporation and its debtor-affiliates obtained
permission from the U.S. Bankruptcy Court for the Southern
District of New York to establish and implement their Broad-
Based Severance Plan for its eligible full-time employees.

Eligible full-time employees are those employees terminated
involuntarily Without Cause in connection with:

    (a) a job or department elimination;

    (b) office closing;

    (c) reduction in force; or

    (d) other appropriate circumstances as determined by the
        plan administrator.

The Eligible Employee will receive continued payments of his or
her Base Salary for a number of calendar weeks equal to the
greater of:

    -- the product of two multiplied by each year of service
       completed prior to the Termination Date; and

    -- four weeks, provided that the salary pay continuation
       period will not exceed 26 weeks.

Payments will begin no later than 10 days after the delivery of
the release.  In addition, participants would receive continued
medical and dental coverage; provided that the participants pay
the regular employee co-payments for the period the cash
severance benefits are payable.  A participant's right to
continue to receive medical or dental coverage will cease
immediately if the participant becomes eligible for the same
plan of any subsequent employer.

The Broad-Based Severance Plan further provides that the Company
may, in its sole discretion, with prospective or retroactive
effect, amend, alter, suspend, discontinue or terminate the plan
at any time and for any reason, with or without notice and
without the consent of any employee, stockholder or other
person; provided, however, that, without the consent of an
employee, no action will materially and adversely affect the
right of an employee to receive severance benefits under the
Broad-Based Severance Plan with respect to an Eligible
Termination of Employment as of a Termination Date occurring
prior to the action. (Covanta Bankruptcy News, Issue No. 14;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   


DTVN HOLDINGS: Files for Chapter 11 Protection in Dallas, Texas
---------------------------------------------------------------
DTVN Holdings, Inc., (OTC Bulletin Board: DTVN), a nationwide
provider of packet-switched information services through its
wholly owned subsidiary DataVoN, Inc., announced that DTVN,
DataVoN, and two other affiliated companies filed Chapter 11
bankruptcy petitions in Dallas, Texas.

Mr. Birdwell, the CEO of the Company, said, "DTVN and DataVoN
have been operating in a very difficult environment for the past
eighteen months and have managed to turn the corner from an
operational perspective.  Preliminary unaudited results indicate
that in August 2002 the consolidated enterprise was profitable.  
However, prior to August the Company operated at a loss and
accumulated a substantial amount of secured and unsecured debt
that is currently past due.  The Company does not have the
ability to pay all past due obligations at this time and due to
pressure exerted by several creditors it was decided that
orderly reorganization under Chapter 11 is in the best interest
of the Company and its various interest holders.  We are hopeful
that a plan of reorganization can be filed quickly and confirmed
in a relatively short time frame."

In connection with these filings, the Company also announced
that Michael Donohoe has been appointed to the newly created
position of Chief Restructuring Officer.  Mr. Donohoe is General
Counsel of each of the debtor entities and will continue to
perform those functions.  Mr. Donohoe can be contacted at (972)
792-3711 or by e-mail at mdonohoe@datavon.com .

DataVoN, Inc. ( http://www.datavon.com), Video Intelligence,  
Inc. and Zydeco Exploration, Inc. are wholly owned subsidiaries
of DTVN Holdings, Inc.  DTVN and DataVoN have headquarters and
DataVoN's Network Operations Center is in Richardson, Texas.


ENCOMPASS SERVICES: Sr. Lenders Waive Loan Financial Covenants
--------------------------------------------------------------
Encompass Services Corporation (NYSE: ESR) has received a waiver
from its senior lenders relieving it from compliance with the
financial covenants contained in its senior credit facility
through October 15, 2002.

Encompass stated that because it considers the successful
completion of its previously announced Rights Offering highly
unlikely, and in order to provide the Company with additional
flexibility and liquidity, it has elected not to reduce the
amount drawn under its revolving credit facility as of September
30, 2002. As a result, the Company believes it would not have
met the financial covenants contained in its senior credit
facility measured as of September 30, 2002 without the waiver
the Company has obtained, and without the waiver would have been
in default under its senior credit facility. As of September 30,
2002, the Company had approximately $118 million in cash.

"We appreciate the continued support of our senior lenders,"
said Joe Ivey, President and Chief Executive Officer of
Encompass. "We also appreciate the ongoing support that we have
received from our employees, vendors, customers and surety
providers. We remain committed to finding an appropriate
solution to strengthen our financial position."

A major component of the Company's Rights Offering is an
investment of $35 million in the Company to be made by Apollo
Management IV, L.P. and Apollo Overseas Partners IV, L.P.
Apollo's obligation to close its investment is subject to
several conditions precedent, including the absence of a
material adverse change in the Company's business and the
absence of any default, amendment or waiver of its senior credit
facility. Further, the Apollo investment is an affirmative
covenant under the senior credit facility. In the event the
Apollo investment does not close, without a waiver of that
covenant, the Company will be in default under the senior credit
facility.

Encompass stated that it is exploring certain strategic options
to restructure and/or reduce total debt levels and improve its
balance sheet in order to enhance the Company's prospects for
future growth and increased profitability. It has retained
Houlihan Lokey Howard Zukin Capital as its financial advisor to
assist in evaluating these strategic options. Some of those
options would result in the termination of the Rights Offering
and the cancellation of the upcoming Encompass Special Meeting
of Shareholders scheduled for October 15, 2002, at which
shareholder approval of the Apollo investment is being
requested.

In light of these events, the Company announced that it is
withdrawing all forecasts and financial guidance, including its
revenue and EBITDA guidance, and has terminated its Employee
Stock Purchase Plan, whereby employees purchase Encompass common
stock through payroll withholding, as well as the ability of
employees to purchase Encompass common stock through its 401(k)
plan.

Encompass Services Corporation is one of the nation's largest
providers of facilities systems and services. Encompass provides
electrical technologies, mechanical services and cleaning
systems to commercial, industrial and residential customers
nationwide. Additional information and press releases about
Encompass are available on the Company's Web site at
http://www.encompass.com


ENRON CORP: Court Approves ENA's Merced Termination Settlement
--------------------------------------------------------------
Edward A. Smith, Esq., at Cadwalader Wickersham & Taft, in New
York, relates that Enron North America Corp., and Merced
Irrigation District entered into an ISDA Master Agreement on
March 25, 1999.  Pursuant to the Agreement, ENA and Merced
entered into financially settled swap transactions concerning
natural gas and power.

With ENA's filing for bankruptcy, Merced sent a notice to ENA on
April 24, 2002, terminating the Agreement and the transactions
entered into.

Mr. Smith explains that under the terms of the Agreement, an
early termination requires:

    (a) the payment of all outstanding accounts payable; and

    (b) payment of the forward value of the Agreement to the
        in-the-money party.

The forward value, Mr. Smith says, represents the difference
between the prices set in the transactions under the Agreement
and the prices at which like transactions could be entered into
as of the termination date.

Upon negotiation, Mr. Smith reports, ENA and Merced have
reached, and reduced into writing, an agreement as to the
termination payment, including the forward value of the
Agreement and any outstanding payables.  The Settlement
Agreement requires:

    -- Merced to pay ENA an $8,448,652 termination payment, and

    -- the parties to exchange mutual releases of all
       obligations related to the Agreement.

Mr. Smith contends that the Settlement Agreement is within the
range of reasonableness because:

    (a) it is fair, reasonable and in the best interests of the
        Debtors' estate;

    (b) it resolves any disagreement as to the forward value of
        the Contract;

    (c) it will allow ENA to realize a value for the estate; and

    (d) it avoids potential future disputes and litigation
        regarding the termination payment.

Accordingly, ENA sought and obtained the Court's authority to
enter into the Settlement Agreement pursuant to Rule 9019 of the
Federal Rules of Bankruptcy Procedure. (Enron Bankruptcy News,
Issue No. 43; Bankruptcy Creditors' Service, Inc., 609/392-0900)


EXODUS COMMS: EXDS Pursues $19 Million Recovery from 9 Creditors
----------------------------------------------------------------
EXDS Inc., asks the Court to render judgment against nine
creditors for the recovery of transfers totaling $19,436,714.
EXDS has filed separate adversary proceedings against these
creditors:

           Creditor                          Transferred Amount
     ------------------                     --------------------
     Pacific Bell Telephone Co.                   $1,180,520
     ISR Solutions                                 1,400,583
     The Goldman Sachs Group Inc.                  2,500,000
     CompuCom Systems Inc.                         3,000,000
     Comstor Corporation                           1,284,637
     Credit Suisse First Boston Corp.              1,000,000
     Standard Electronics Inc.                     1,937,558
     Sprint Corporation                            1,746,130
     XO Communications                             5,387,286
                                                  -----------
                                          Total: $19,436,714


Jeremy W. Ryan, Esq., at Saul Ewing LLP, in Wilmington,
Delaware, tells the Court that EXDS is entitled to recover the
transfers because:

-- the transfers were each made on account of a debt owed by
   EXDS to the creditors,

-- the transfers were made on or within 90 days prior to the
   Petition Date,

-- EXDS was insolvent at the time it made each of the transfers
   to the creditors, and

-- the transfers enabled the creditors Pacific Bell receive more
   than they would have received if:

    * this case were a Chapter 7 of the Bankruptcy Code,

    * the transfers were not made, or

    * if Pacific Bell received payment of its debt to the extent
      provided under the provisions of the Bankruptcy Code.

Mr. Ryan relates that EXDS had sent initial demand letters on
July 22, 2002 to each of the creditors demanding the return of
the transferred amounts.  No response was made.  EXDS then sent
out a second set of demand letters.  Yet again, the demand fell
on deaf ears.  As a result, EXDS have no choice but to seek the
Court's interference.

Mr. Ryan points out that the creditors' indifference could be
used as basis for the disallowance of any claim that each may
have against EXDS since Section 502(d) of the Bankruptcy Code
provides that:

  "[n]otwithstanding subsections (a) and (b) of this section,
  the court shall disallow any claim of any entity from which
  property is recoverable under section 542, 542, 550, or 553 of
  this title or that is a transferee of a transfer avoidable
  under section 522(f), 522(h), 544, 547, 548, 549, or 724(a) of
  this title, unless such entity or transferee has paid the
  amount, or turned over any such property, for which such
  entity or transferee is liable under section 522(i), 542, 542,
  550, or 553 of this title." [sic]

The disallowance of the claim of each of the creditors may only
be lifted upon the return of the transfers.

EXDS, thus, specifically asks the Court to:

-- enter judgment in favor of EXDS and against the creditors,

-- enter judgment in favor of EXDS and against the creditors in
   the amounts that were transferred to each of them, plus pre-
   judgment interest from the date of EXDS' initial demand
   letter and post-judgment interest, fees and costs to the
   extent provided by law, and

-- disallow any claims the creditors may have against EXDS.
   (Exodus Bankruptcy News, Issue No. 25; Bankruptcy Creditors'
   Service, Inc., 609/392-0900)

Exodus Communications Inc.'s 11.625% bonds due 2010 (EXDS10USR1)
are trading at 5 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=EXDS10USR1
for real-time bond pricing.


FANNIE MAE: S&P Affirms Low-B Ratings on Four Classes of Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on four
classes of Fannie Mae's REMIC pass-through certificates series
1998-M6.

The affirmations reflect the improved financial performance of
the multifamily and cooperative collateral, the expected loss on
a delinquent multifamily property in Dallas, Texas, and low debt
service coverage on the watchlisted loans.

This Dallas property (representing 0.97% of the pool's principal
balance) is currently being operated by a court-appointed
receiver following the borrower's bankruptcy filing.

The property, which was in very poor condition, was closed down,
with the remaining tenants evicted. Currently, it is under
contract for $1.4 million. If this amount is ultimately
realized, losses of approximately 50% of the principal balance
will occur.

There are no other specially serviced or delinquent loans
outstanding. In addition, there have been no losses or appraisal
reductions taken to date.

The multifamily servicer, Orix Capital Markets LLC, has four
multifamily loans (representing 3.77%) on its watchlist. In
2002, the loans experienced DSC declines. Softening local market
conditions have affected two of the loans, while the other two
have experienced higher operating expenses. Based on discussions
with Orix, these loans and the Dallas property were stressed by
Standard & Poor's in its loss analysis.

The current principal balance is $278.9 million, down from
$304.3 million at issuance. The collateral pool is concentrated
in New York due to the underlying mortgage cooperative
collateral (representing 35%). The remaining principal balance
is collateralized by multifamily properties located in 21
states.

At Dec. 31, 2001, the DSC for the multifamily properties was
1.75 times as compared to 1.47x at issuance. The loan-to-value
for the cooperative pool is 8.0% as compared to 23.3% at
issuance. This is based on a cooperative valuation analysis that
Standard & Poor's conducted, with cooperative resale information
provided by the cooperative servicer, National Consumer
Cooperative Bank.

The New York City cooperative market has experienced significant
price appreciation since the securitization of these loans.
Based on a study by Insignia Douglass Elliman/Miller Samuel
Inc., the average value of a cooperative apartment has increased
by 52% from the time the loans were securitized through June 30,
2002. For the second quarter, the average price increased by
2.75% from that of the previous quarter. The cooperative market
has benefited from low mortgage interest rates and limited
supply.

Standard & Poor's will continue to monitor the liquidation of
the Dallas property and the operating performance of the
watchlist loans. If realized losses on the Dallas property
exceed those that are expected, or if the watchlist loans
exhibit further deterioration, rating actions may be necessary
on one or more classes of the subordinate certificates.

                         Ratings Affirmed

                            Fannie Mae
               REMIC pass-thru certs series 1998-M6

               Class    Rating     Credit Support (%)
               B        BB         3.27
               C        BB-        2.73
               D        B          2.18
               E        B-         1.64


FEDERAL-MOGUL: Court Denies Committee's Restricted Docs. Demand
---------------------------------------------------------------
The Official Unsecured Creditors Committee, in the chapter 11
cases involving Federal-Mogul Corporation and its debtor-
affiliates, is conducting an investigation whether certain liens
established in a December 2000 transaction between the Debtors
and their bank creditors and sureties under the Fourth Amended
and Restated Credit Agreement should be set aside.  Accordingly,
the Committee demanded production of pertinent documents from
the National Economic Research Associates, Credit Suisse First
Boston Corporation and PricewaterhouseCoopers.  The Committee
intends to use those documents and any information they unearth
to prosecute a fraudulent conveyance proceeding they want to
initiate against the banks and sureties.

However, the Debtors asserted that the documents the Committee
is requesting are subject to work product and privilege
protection.

The Bankruptcy Court finds that the NERA report the Committee
wants to put its hands on is subject to the work product
doctrine.  However, the Bankruptcy Court had not ruled whether
the doctrine can be overcome based upon substantial need or
whether it has been waived.

Thus, in an informal application -- by way of a letter dated
September 5, 2002 -- to the District Court, the Creditors'
Committee asked Judge Alfred Wolin to rule whether those
documents claimed by the Debtors to be covered by the attorney
client privilege should be turned over to the Committee.

The Committee also asked Judge Wolin to issue a Protective Order
to govern:

1) the Disputed Documents;

2) all copies or versions of the Disputed Documents which the
   Debtors inadvertently produced in unredacted form;

3) all confidential interrogatory answers, responses to requests
   to admit and other discovery materials produced or provided
   by the parties or third parties in connection with the
   investigation relating to the Disputed Documents; and

4) all confidential testimony given in connection with the
   investigation relating to the Disputed Documents.

The Creditors Committee further proposed procedures with respect
to "Confidential Attorneys' Eyes Only" Documents.

But Judge Wolin denied the Creditors Committee's application.

"[The] Committee's primary ground is that it would be easier and
more time-efficient if the debtors' attorney-client privilege
were set aside.  This is patently not sufficient justification
for overruling the privilege," according to Judge Wolin.

Judge Wolin further rules that although the Committee's argument
that it is entitled to a limited waiver of the privilege because
it seeks to prosecute a claim on behalf of the estate is at
least intelligible, it falls short.  Judge Wolin notes that the
Committee cites no authority for the proposition that a creditor
is entitled to the debtors' privileged documents when the
creditor prosecutes a fraudulent conveyance action.  Judge Wolin
was not convinced that prosecuting a claim on behalf of a
debtor's estate truly puts a party in the debtors' shoes to the
extent claimed by the Committee.

"Even if one were to assume that the Committee were acting in
loco the debtor, this would not automatically entitle the
Committee access to such sensitive areas as the debtors'
privileged attorney-client communications," Judge Wolin
explains.

Judge Wolin points out that if the Debtors do not believe that
producing these documents pursuant to the protective order is in
their interest, then the hope of saving time by the procedure
suggested by the Committee was apparently in vain. (Federal-
Mogul Bankruptcy News, Issue No. 24; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


GE CAPITAL: S&P Affirms Ratings on Six Classes at Lower-B Levels
----------------------------------------------------------------
GE Capital Commercial Mortgage Corp.'s commercial mortgage pass-
through certificates, series 2000-1, $102.1 million class A-1,
$429.2 million class A-2 and interest only class X are affirmed
at 'AAA' by Fitch Ratings. Fitch also affirms the following
classes: $28.3 million class B at 'AA', $31.8 million class C at
'A', $8.8 million class D at 'A-', $23 million class E at 'BBB',
$8.8 million class F at 'BBB-', $23.9 million class G at 'BB+',
$6.2 million class H at 'BB', $5.3 million class I at 'BB-',
$7.1 million class J at 'B+', $6.2 million class K at 'B' and
$6.2 million class L at 'B-'. Fitch does not rate the $10.6
million class M. The rating affirmations follow Fitch's annual
review of the transaction, which closed in December 2000.

The rating affirmations are the result of stable performance of
the mortgage pool. The weighted average debt service coverage
ratio (DSCR) for the pool as of year-end (YE) 2001, based upon
collected financial statements (95%), is 1.38 times, which is up
slightly from a 1.36x at issuance.

The certificates are collateralized by 100 commercial and
multifamily mortgages. There are significant concentrations in
retail (24%), office (22%), multifamily (21%), hotel (14%) and
Industrial (10%). The properties are located in 28 states
including California (17%), Texas (19%), Tennessee (7%) and
Louisiana (5%). As of the September 2002 distribution date, the
pool's aggregate balance has been reduced by 1.3% to $697.5
million at issuance.

The Equity Inns Portfolio is a $35.8 million loan secured by
nine cross-collateralized and cross-defaulted limited service
hotels. Fitch considers this loan to have investment grade
credit characteristics. Eight of the hotels are flagged as
Hampton Inns and one is flagged as a Residence Inn. As of YE
2001 the Fitch stressed DSCR was 1.76x up from 1.74x at
issuance. The properties reported a weighted average revenue per
available room of $52.46, which up from $49.63 at issuance. The
Fitch stressed DSCR is based on cash flow adjusted for capital
expenditures and a 10.09% constant.

There is currently one loan in special servicing. The Equitable
Office building located in Des Moines, Iowa was transferred to
special servicing in April 2002 due to a drop in occupancy to
approximately 82%. The $11.5 million dollar loan, representing
1.7% of the pool, remains current and is being monitored while
the borrower continues attempts at leasing up the property.

Fitch will continue to monitor this transaction, as surveillance
is ongoing.


GLOBAL CROSSING: Court Extends IRS Bar Date Until Year-End
----------------------------------------------------------
Global Crossing Ltd., its debtor-affiliates, and the Internal
Revenue Service sought and obtained an extension of the deadline
for the Government to file proofs of claims in these Chapter 11
cases until December 31, 2002 at 5:00 p.m., prevailing Eastern
Time. (Global Crossing Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


GRANITE BROADCASTING: S&P Affirms Junk Rating After Asset Sale
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings,
including its triple-'C' corporate credit rating, on TV station
owner Granite Broadcasting Corp., and removed all ratings from
CreditWatch following completion of the $230 million sale of its
San Jose, California. Station, KNTV, which provides a modest
short-term boost to liquidity. The current outlook is negative.

"Even after the station sale, Standard & Poor's remains
concerned about mounting financial pressure due to weak cash
flow and an onerous debt burden," said Standard & Poor's credit
analyst Alyse Michaelson. She added, "the company's cash cushion
is thin given that its high-cost preferred stock requires cash
dividends in October 2002." New York-based Granite had about
$232.7 million of debt and $197.9 million of preferred stock,
net of offering costs, outstanding at June 30, 2002.

Standard & Poor's said that its ratings on Granite reflect very
high financial risk from debt-financed TV station acquisition
activity, an expensive capital structure, a prolonged ramp-up
period for the WB affiliates, diminished cash flow, and widening
discretionary cash flow deficits. Tempering factors include
ownership of major network affiliated stations that are
profitable and have relatively good margin potential, decent
discretionary cash flow generation capability of the business,
and station asset values. Revenue momentum is benefiting from
revenue gains at Granite's NBC affiliates and stronger than
expected political, auto, and movie advertising. Still,
sustaining positive revenue trends could be difficult in 2003
given election cycles. Ratings could be lowered if liquidity
tightens and prohibits the company from meeting its near-term
financial obligations.  


GUILFORD MILLS: Preparing to Emerge from Chapter 11 Proceeding
--------------------------------------------------------------
As previously announced, following the satisfaction of various
conditions, Guilford Mills, Inc., (OTC Bulletin Board: GFDMQ)
will emerge from bankruptcy on the effective date of its plan of
reorganization.  The Company and its senior lenders are in the
process of finalizing loan and other documentation.  The Company
will issue a press release announcing the effective date and
currently expects that it will be in the next few days.

Guilford Mills is an integrated designer and producer of value-
added fabrics using a broad range of technologies.  Guilford
Mills serves a diversified customer base in the automotive,
industrial and apparel markets.


HADRO RESOURCES: June 30 Working Capital Deficit of $1.23 Mill.
---------------------------------------------------------------
Investrend analyst J. Damien Kolb has issued the previously-
scheduled report on Hadro Resources, Inc. (OTCBB:HDRS - news),
and Investrend has simultaneously announced a suspension of
further coverage due to the company's failure to respond to
analyst inquiries or otherwise comply with the terms of the
enrollment.

The full report, along with the company's policies and
guidelines, is available at http://www.investrend.comThe  
Investrend Research rating system may be viewed at
http://www.investrend.com/iciratings.htm  

"The investor's rearview mirror reveals an emerging oil and gas
exploration and production company seeking capital to pursue
low-risk petroleum prospects," said Kolb, adding, "as of this
report, some potential investors may prefer to consider the
liquidation value of net assets, a few may see a candidate for a
reverse-merger into a public shell, while others may prefer the
status quo.

"As of the date of the Company's most recent 10Q filing, there
was substantial doubt regarding the Company's ability to
continue operating as a going concern. As of June 30, current
liabilities of $1.28 million offset current assets of $56
thousand to yield a working capital deficit of approximately
($1.23 million). Through August 12, HDRS had never generated
sufficient cash flow to fund its operations. The Company's
continuance of operations as a going concern and its realization
of the carrying value of oil and gas properties are dependent on
Management's ability to: i.) Raise additional capital; ii.) Meet
outstanding debt obligations; iii.) Successfully develop
existing oil and gas properties; and iv.) Develop new business
prospects." he concluded.

Mr. Kolb is a member of AIMR and the Boston Security Analysts
Society. He is a Level III Candidate for the CFA designation and
a candidate for the American Society of Appraisers' Business
Valuation certification. Mr. Kolb served as Investment Banking
Analyst at a boutique investment-banking firm, and previously
held Associate positions at Lehman Brothers and Morgan Stanley.
Mr. Kolb received an MBA in Finance from the Weatherhead School
of Management at Case Western Reserve University and a Master of
International Management degree in Global Finance and Latin
American Emerging Markets from Thunderbird, The American
Graduate School of International Management. Mr. Kolb is
president and founder of the Commonwealth Holding Company, Inc.

Investrend Communications, Inc., has provided shareholder
empowerment platforms - including broadcast, research, forums
and information - for the benefit of the shareholders of more
than 400 companies since its founding in 1996. Investrend
Research has been the leading independent equity research
publishing and distribution program, with over 65 AIMR-qualified
professional analysts posting more than 450 reports to date.
Investrend Broadcast has been a leading provider of webcast
solutions for the shareholders of more than 250 public
companies. Enrollment fees for the Investrend Research
Institutional (continuous) coverage is listed at $1,950 per
month, which had been paid by the company prior to its
suspension. Analysts are in turn paid by Investrend in advance
for their initiation of coverage to eliminate or reduce
pecuniary conflict.

Anyone interested in receiving alerts regarding Hadro Resources
should e-mail info@investrend.com with "HDRS" in the subject
line.


HAYES LEMMERZ: Has Until Dec. 3 to Remove Prepetition Actions
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware granted
Hayes Lemmerz International, Inc., and its debtor-affiliates'
motion to extend the date on which they can remove actions
through the longer of:

     -- December 3, 2002 or

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

Hayes Lemmerz International, Inc., is one of the world's leading
global suppliers of automotive and commercial highway wheels,
brakes, powertrain, suspension, structural and other lightweight
components. The Company has 46 facilities and 3 joint ventures
and 14,000 employees worldwide. Of the total, 22 plants in the
United States and one plant in Nuevo Laredo, Mexico are included
in the Chapter 11 filings. The Company filed for chapter 11
reorganization on December 5, 2001.


HEALTHCARE INTEGRATED: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Lead Debtor: HealthCare Integrated Services, Inc.
             733 Highway 35
             Ocean Township, NJ 07712

Bankruptcy Case No.: 02-19320

Debtor affiliates filing separate chapter 11 petitions:

     Entity                                     Case No.
     ------                                     --------
     HIS Imaging                                02-19319

Type of Business: A multi-disciplinary provider of healthcare
                  services, currently specializing in
                  diagnostic imaging operations and clinical
                  research trials.

Chapter 11 Petition Date: September 25, 2002

Court: District of New Jersey (Camden)

Judge: Judith H. Wizmur

Debtors' Counsel: Brian L. Baker, Esq.
                  Ravin Greenberg, PC
                  101 Eisenhower Parkway
                  Roseland, NJ 07068
                  (973) 226-1500

Total Assets: $12,000,000

Total Debts: $23,700,000


HECLA MINING: Brings-In Ronald W. Clayton as VP, U.S. Operations
----------------------------------------------------------------
Hecla Mining Company (NYSE:HL)(NYSE:HL-PrB) announced that
Ronald W. Clayton has joined Hecla as Vice President -- U.S.
Operations.

Clayton has more than 22 years of operational and management
experience in the mining industry. He returns to Hecla after
working for Stillwater Mining Company for two years. Prior to
that, Clayton had spent 13 years with Hecla as general manager
of the Rosebud, Republic and Lucky Friday mines. Before leaving
the company in 2000, Clayton had been appointed as Hecla's Vice
President -- Metals Operations.

Clayton will report to Tom Fudge, Hecla's Vice President --
Operations, who in turn reports to Hecla's president, Phil
Baker. Baker said, "I think it's great that Ron is able to
return to Hecla. He is a first-class mining operator, with
excellent skills in mine economics and margin analysis, which
will be very valuable as we continue to grow this company
through new acquisitions and projects. And of course, he's very
familiar with Hecla and our operations."

Clayton will be responsible for operations at Greens Creek,
Lucky Friday and the Hollister Block development project in
Nevada. He will also participate in the due diligence and
analysis necessary for potential new acquisitions in the United
States and Canada, working with Hecla's Vice President --
Corporate Development, Mike Callahan.

Baker said, "Someone of Ron's caliber further strengthens
Hecla's already established expertise in the niche of high-
grade, narrow vein, underground hardrock mining. He will be a
great asset in building Hecla's inventory of operations."

Clayton holds a BS in Mining Engineering from Colorado School of
Mines.

Hecla Mining Company, headquartered in Coeur d'Alene, Idaho,
mines and processes silver and gold in the United States,
Venezuela and Mexico. A 111-year-old company, Hecla has long
been well known in the mining world and financial markets as a
quality silver and gold producer. Hecla's common and preferred
shares are traded on the New York Stock Exchange under the
symbols HL and HL-PrB.

Hecla's Home Page can be accessed on the Internet at  
http://www.hecla-mining.com

                            *    *    *

As reported in Troubled Company Reporter's June 13, 2002,
Standard & Poor's revised its outlook on Hecla Mining Co., to
positive from negative based on the company's improved cost
position.

Standard & Poor's said that its ratings on the company,
including its triple-'C'-plus corporate credit rating, are
affirmed. Standard & Poor's preferred stock rating on Hecla
remains at 'D', as the company is not current on its dividends.
Hecla, headquartered in Coeur d'Alene, Idaho, has about $19
million in total debt.

Standard & Poor's ratings on Hecla continue to reflect its well
below average business position due to its limited reserve base,
operating diversity, and tight liquidity.


IBEAM BROADCASTING: Gets Approval to Delay Entry of Final Decree
----------------------------------------------------------------
The iBEAM Broadcasting Corporation Liquidating Trust, as
successor in interest to the iBEAM Broadcasting Corporation,
sought and obtained approval from the U.S. Bankruptcy Court for
the District of Delaware to extend the time to file a
consolidated final report until February 7, 2003 and delay entry
of a final decree in until a month thereafter.

Since the Confirmation Date, the Liquidating Trust has engaged
in substantial analysis and reconciliation of claims and has
begun the claim objection process by evaluating claims, and by
filing objections to certain individual claims and a first set
of omnibus objections to claims.

Despite these efforts, the Liquidating Trust is still in the
process of reviewing the many claims filed in this case. The
Liquidating Trust filed its motion to extend the claim objection
deadline through January 31, 2003 so as to provide ample time to
resolve the claims filed in this case.  The Trust's attorney,
Mr. Aaron A. Garber believes that adequate time for resolution
of these claim objections is required in order to determine the
correct distribution amounts to these claimants and other
creditors. It would be premature to close this Chapter 11 case
at this time, Mr. Garber says.

iBeam Broadcasting Corporation delivers streaming media over the
Internet. The Company filed for chapter 11 protection on October
11, 2001.


J.L. HALSEY: Files Form 10-K for Year Ended June 30, 2002
---------------------------------------------------------
J. L. Halsey Corporation (OTCBB:JLHY) (formerly NAHC, Inc.)
announced the filing of its Form 10-K for the year ended June
30, 2002.

As part of the filing, the Company has revised its range of
estimated values for its assets, liabilities and costs of
liquidation. The revised range of estimated realizable value of
funds available for distribution to stockholders (liquidation
estimates) is an amount between $0.08 and $0.24 per share of
common stock.

The increase in these estimates is primarily due to the
Company's estimate of a settlement in its claim for overpayment
of federal taxes.

Without the refund, the assets available for distribution upon
liquidation of the Company were estimated at ($0.06) and $0.10
per share. The Plan of Restructuring was adopted by the
Company's stockholders at a special meeting held on September
21, 1999. The Company currently anticipates that liquidation
pursuant to the Plan of Restructuring will not occur, if at all,
until December 31, 2003.

Details concerning the estimated liquidation values are
discussed in the company's Form 10-K for the year ended June 30,
2002, filed yesterday with the Securities and Exchange
Commission.


KINETIC CONCEPTS: S&P Keeps Watch on B Ratings After Jury Award
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its single-'B'
corporate credit and senior secured ratings on hospital supplier
Kinetic Concepts Inc., on CreditWatch positive, following the
announcement that a Texas jury has found in KCI's favor. KCI was
awarded $173.5 million in damages relating to its antitrust
lawsuit against Hillenbrand Industries Inc. and Hillebrand's
Hill-Rom Co. Inc. unit.

Under Federal law, the damages would automatically be trebled,
which would raise the award to about $520 million. The jury
verdict and damage award is subject to judicial review by the
U.S. District court in San Antonio, Texas.

"Although the appeal of any judgment would take some time to
resolve, the potential for a settlement of the litigation, which
charged Hillenbrand with attempting to monopolize the specialty
hospital bed market, brightens prospects for KCI to improve its
liquidity and address near-term debt maturities," said Standard
& Poor's credit analyst Jordan Grant.

KCI has approximately $30 million of term-loan debt due in 2003,
with additional tranches of $86 million and $113 million
maturing in 2004 and 2005. Total debt outstanding as of June 30,
2002 was about $570 million.

KCI is a leading manufacturer of specialty hospital surfaces and
noninvasive medical devices, many of which are proprietary.

Standard & Poor's will monitor developments in this case as they
affect KCI's business and financial strategy.


KITTY HAWK: Successfully Emerges from Chapter 11 Bankruptcy
-----------------------------------------------------------
Haynes and Boone, LLP announced that its client Kitty Hawk, Inc.
emerged from Chapter 11 bankruptcy effective Sept. 30, 2002.
Haynes and Boone attorneys represented Kitty Hawk throughout its
reorganization efforts, including obtaining confirmation of its
Final Plan of Reorganization that was announced July 24, 2002.

In May 2000, Kitty Hawk, Inc., and its nine subsidiaries filed
voluntary petitions for protection under Chapter 11 of the
Bankruptcy Code. The petitions were filed the U.S. Bankruptcy
Court, Northern District of Texas, Fort Worth Division.

"This case challenged us in every way imaginable," said John
Penn, one of the Haynes and Boone partners leading the firm's
Kitty Hawk team. "We even had to help the client deal with the
aftermath of the unimaginable when the U.S. became a 'no fly
zone' in September 2001. We had to deal with a myriad of issues
that are rarely faced by many practitioners over their careers
but were all addressed successfully by Kitty Hawk."

Since filing in May 2000, the company endured the recession in
2000, the U.S. Postal Service terminating its contract to award
the largest contract in its history for mail transportation
services to Federal Express during 2001, and numerous other
disputes. According to Sarah Foster, partner with Haynes and
Boone's Kitty Hawk team, over the past twelve months, each of
Kitty Hawk's primary interest groups sought to have the company
liquidated. Nevertheless, Kitty Hawk steered through all of the
adversities in the economy, the airline industry and
reorganization process. In doing so, Kitty Hawk saved hundreds
of jobs, reorganized its finances and transferred ownership to
its creditors.

"With the current economic conditions of the airline industry,
we are proud to be moving forward and out of bankruptcy," said
Jim Reeves, Kitty Hawk's Chairman and CEO. "While in bankruptcy,
Kitty Hawk reduced its overhead and operations to the size
required in today's environment while always delivering the
excellent service our customers expect. We would not have
survived that process without our legal team's assistance."

According to Bob Albergotti, partner with Haynes and Boone's
Kitty Hawk team and the lead Haynes and Boone partner on the
California Deregulation team, Kitty Hawk is emerging from
bankruptcy protection at an exciting time. With its financial
restructuring, the company will have more options than it did
before it filed for bankruptcy protection.

Haynes and Boone, LLP is an international law firm with nine
offices throughout Texas, Washington, D.C., and Mexico City
providing a full spectrum of legal services to clients around
the world. With more than 400 attorneys, Haynes and Boone is
ranked among the largest law firms in the nation by National Law
Journal. AmLaw Tech Magazine Scoreboard ranked Haynes and Boone
first in law firm technology in 2001. The firm has been
recognized as one of the 25 "Best U.S. Law Firms at Which to
Work" (Of Counsel, 2000), one of the "Best Corporate Law Firms
in America" (Corporate Board Member Magazine, 2002) and
recipient of the Minority Corporate Counsel Association's 2002
Thomas L. Sager Award for commitment to diversity.

Kitty Hawk provides scheduled overnight air freight services to
approximately 47 U.S. cities operating through its Fort Wayne,
Ind. hub. For more information on the Kitty Hawk, visit its site
at http://www.kha.com


KMART CORP: Seeks Court Approval to Expand PwC's Engagement
-----------------------------------------------------------
Kmart Corporation's Chief Restructuring Officer Ronald Hutchison
relates that PricewaterhouseCoopers LLP is presently employed to
provide routine audit, audit-related and tax services to the
Debtors as an ordinary course professional.  However, the U.S.
Trustee, the statutory committees and the Debtors' audit
committee have requested the Debtors to formally and publicly
disclose the terms of PwC's engagement.

Therefore, the Debtors decided to amend the scope of the
retention and employment of PwC to include additional audit-
related and certain tax services on an as-needed basis in these
Chapter 11 cases:

(1) Audit-Related Services

PwC has been engaged to audit the Debtors' consolidated
financial statements as of January 29, 2003 and for the year
then ending. Upon completion of the audit, Mr. Hutchison says
PwC will provide the Debtors with an audit report on the
financial statements for the year ending January 29, 2003.  In
conjunction with the annual audit, PwC will perform reviews of
the Debtors' unaudited consolidated quarterly financial
statements and related data for each of the first three quarters
in the year ending January 29, 2003.

PwC estimates that its fees for this audit engagement will be
$1,900,000, exclusive of out-of-pocket expenses while the out-
of-pocket expenses and internal charges with respect to the
audit-related services will reach $100,000.

According to Mr. Hutchison, PwC may provide additional audit-
related services as the Debtors and PwC deem appropriate,
including, but not limited to:

    (a) other related accounting services;
    (b) restructuring activities;
    (c) controls testing of System changes; and
    (d) implementation of new accounting standards.

These additional services will be the subject of separate
written agreements.

Mr. Hutchison further notes that the additional services will be
billed at an agreed upon rate, not to exceed PwC's Audit
Standard Hourly Rates:

              Professional                Rate
              ------------                ----
              Sr. Mgr. -- Partner      $515 - 680
              Managers                  425 - 460
              Sr. Associates            280 - 315
              Associates                180 - 215
              Interns                   145

Additionally, depending upon the nature of the additional
services, Mr. Hutchison tells the Court that the audit
professionals may seek other expertise within the firm.  In this
regard, Mr. Hutchison says, PwC's Global Risk Management
Solutions practice is currently assisting the audit
professionals in a controls review of the Debtors' new general
ledger package. GRMS's services will also be billed at an agreed
upon rate, not to exceed the GRMS Standard Hourly Rates:

              Professional                Rate
              ------------                ----
              Director -- Partner      $645 - 890
              Manager -- Sr. Manager    475 - 670
              Sr. Associates            315 - 470
              Associates                200 - 290

(2) Tax Services

From time to time, PwC also may perform tax services for the
Debtors on an hourly basis or pursuant to a fixed-fee
arrangement at the direction of the Debtors' tax or human
resources departments.  In view of that, Mr. Hutchison maintains
that the fees for tax consulting matters will typically be
established on an hourly basis at an agreed upon rate, not to
exceed PwC's Tax Standard Hourly Rates:

              Professional                Rate
              ------------                ----
              Director -- Partner      $563 - 720
              Manager -- Sr. Manger     463 - 666
              Sr. Associates            309 - 425
              Associates                219 - 282
              Intern                    142 - 229
              Administrator             103 - 140

On the other hand, fees for most tax compliance matters and
certain tax consulting matters will be on a fixed-fee basis.
However, fixed-fee projects and significant hourly fee projects
will be the subject of an engagement letter requiring the
approval of the Debtors' Vice President of Tax or other
appropriate representative of the Debtors, and all agreements
and fees related to tax services will be subject to the review
and objection rights of the United States Trustee, the Statutory
Committees and the Debtors' Audit Committee.

PwC also will separately bill the Debtors for reasonable out-of-
pocket expenses and internal charges for certain support
activities related to the provision of tax compliance and tax
consulting services to the Debtors.

(3) Non-Audit Services

On July 24, 2002, PwC publicly announced that it has entered
into a definitive agreement to sell its Business Recovery
Services practice to FTI Consulting, Inc.  This transaction
closed effective August 31, 2002 and the BRS Practice has
concluded its work with the Debtors as of the Closing Date.

However, PwC will continue to provide other non-audit services,
such as bankruptcy tax and other financial advisory services, to
the Debtors.

(4) Other Services

Mr. Hutchison further informs Judge Sonderby that PwC may be
requested or authorized by the Debtors or required by government
regulation, subpoena, or other legal process to produce its
working papers or its personnel as witnesses with respect to the
audit engagement, including the pending investigations of the
Debtors, so long as PwC is not a party to the proceeding in
which the information is sought.  In that event, the Debtors
will pay PwC for its professional time and expenses, as well as
the fees and expenses of PwC's counsel.

Notwithstanding, PwC will reimburse the Debtors' payment to the
extent that PwC will become a named party to the proceedings and
it is ultimately determined in those proceedings that PwC's
intentional wrongdoing is responsible for the liabilities
arising in connection with those proceedings.

By this application, the Debtors ask the Court to include the
audit, audit-related and tax services to PwC's scope of
employment. (Kmart Bankruptcy News, Issue No. 34; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


LAIDLAW INC: Transport Board Allows Control on Seeley Bus Lines
---------------------------------------------------------------
The Surface Transportation Board of the Department of
Transportation approved on September 18, 2002 Laidlaw Inc.'s
application to acquire indirect control of C. Seeley Bus Lines
Ltd.

Seeley's Bus is a motor passenger carrier that is authorized to
provide special and charter operations pursuant to federally
issued authority.

Under a voting trust agreement dated May 31, 2002, Laidlaw
Inc.'s indirectly controlled subsidiary -- Laidlaw Transit Inc.
-- acquired all of C. Seeley's outstanding shares of stock.  As
a result, C. Seeley is able to offer its Ontario-originated
passengers with tour and sightseeing services over an expanded
area.  Moreover, C. Seeley's addition to the Laidlaw family will
promote efficient use of buses and ensure that C. Seeley and
other Laidlaw affiliates will have an adequate number of buses
to serve the public.

After reviewing the merits of Laidlaw's application, the
Transportation Board finds that the application is consistent
with the interest of the general public.  The effect of the
transaction will improve the adequacy of transportation to the
public.  The board also considered the total fixed charges that
would result and the interest of affected carrier employees.

The Transportation Board approved Laidlaw's proposed acquisition
of control of C. Seeley, subject to the filing of opposing
comments.  If timely opposing comments are filed, the Board will
reconsider its decision.  The Board's decision will be effective
on November 4, 2002, unless timely opposing comments are filed.
(Laidlaw Bankruptcy News, Issue No. 24; Bankruptcy Creditors'
Service, Inc., 609/392-0900)  


LEAP WIRELESS: Initiates Brave Steps to Streamline Operations
-------------------------------------------------------------
Leap Wireless International, Inc., (Nasdaq: LWIN) has taken
aggressive steps to streamline operations in order to size its
business to meet current market conditions and the overall
slowdown of the wireless industry.  This action, which includes
both staffing reductions and the consolidation of the Company's
five operating regions into three, eliminates approximately 130
positions across the business and reduces the total number of
employees currently employed by Leap to approximately 1,500.

"Our business is built on a model that requires one of the
lowest cost structures in the industry and necessitates that
prompt action be taken to maintain our cost leadership,
especially in today's economic environment," said Harvey P.
White, Leap's chairman and CEO.  "We have therefore realigned
our organization and made operating cost and staffing reductions
across all areas of the Company in order to maintain the overall
efficiency of our business operations.  We believe that these
actions will allow us to attain our financial goals without
compromising our commitment to customer service. We regret the
impact this will have on those affected and will work to help
them transition to new opportunities."

As a result of this staffing reduction, Leap expects to record a
one-time charge of approximately $0.75 million in the third
quarter.  While this reduction only affects approximately eight
percent of the Company's workforce, it is expected to reduce
costs by approximately $2.2 million for the remainder of the
year after Leap records this one-time charge.  This, and other
actions the Company has taken over the past 12 months to
streamline its business, is expected to result in cost savings
of approximately $8.8 million for fiscal year 2002 and
annualized savings of approximately $20.0 million.

Leap, headquartered in San Diego, Calif., is a customer-focused
company providing innovative communications services for the
mass market.  Leap pioneered a wireless service that lets
customers make all their local calls from within their local
calling area and receive calls from anywhere for one low, flat
rate.  Leap has begun offering new services designed to further
transform wireless communications for consumers.  For more
information, please visit http://www.leapwireless.com

                          *    *    *

As reported in Troubled Company Reporter's Sept. 12, 2002
edition, Standard & Poor's Ratings Services lowered its
corporate credit rating on wireless carrier Leap Wireless
International Inc., to double-'C' from triple-'C'-minus
following the company's September 6, 2002, 8-K filing indicating
that it had defaulted on interest payments under its vendor
facilities at operating subsidiary Cricket Communications Inc.

The senior unsecured debt, which is rated single-'C', and the
corporate credit rating remain on CreditWatch with negative
implications. As of June 30, 2002, San Diego, California-based
Leap had $2.1 billion of debt outstanding.


LEHMAN BROTHERS: Fitch Affirms Class A-1 & A-2 Ratings at D/CCC
---------------------------------------------------------------
LB Multifamily Mortgage Trust's, multiclass pass-through
certificates, series 1991-4, are affirmed by Fitch Ratings as
follows: $13.8 million class A-1 at 'D' and $1,856 class A-2 at
'CCC'. The remaining $15,427 class R certificates are not rated
by Fitch. The rating actions follow Fitch's annual review of the
transaction, which closed in July 1991.

The certificates are collateralized by adjustable-rate mortgage
loans, secured by multifamily properties in California. As of
the September 2002 distribution date, the pool's collateral
balance has been reduced by 87% to $13.8 million from $105.8
million at issuance. Of the original 139 loans in the pool, 28
remain outstanding. No loans are currently delinquent or being
specially serviced and none are on the watchlist. Realized
losses total $34.1 million or 32% of the pool's original
principal balance, including the $9.2 million loss allocated to
class A-1.

Class A-2 should never experience a realized principal loss, due
to a reserve fund in place, tied to this class. Realized losses
of principal allocated to class A-2 certificates will be offset
by distributions to the class A-2 certificates from the reserve
fund.

The largest loan in the pool currently represents 12% of the
pool's outstanding principal balance, while the top ten loans
represent 61% (by balance).

At issuance, the net operating income and the debt service
coverage ratio figures were not available. No loans reported
year-end 2001 financials.

Fitch will continue to monitor this transaction, as surveillance
is ongoing.


LUMENON INNOVATIVE: Reports Loss for Fifth Consecutive Year
-----------------------------------------------------------
Lumenon Innovative Lightwave Technology, Inc. (NASDAQ SC: LUMM),
a manufacturer of high-quality optical devices for the global
telecommunications, data communications and cable markets,
announced its results for the fiscal fourth quarter and year
ended June 30, 2002.

Lumenon's five-year pattern of net losses continued in the
fiscal fourth quarter ending June 30, 2002.  The latest
quarterly loss totaled C$4.3M (US$2.8M), compared with C$15.2M
for the same period in 2001.

As of June 30, 2002, Lumenon had a cash position of C$7.0M
(US$4.6M), compared with C$22.3M as of June 30, 2001. For the
fiscal year ended June 30, 2002, the loss was C$23.9M
(US$15.7M), compared with C$58.4M for the fiscal year 2001.

Commenting on this year's activity, Gary Moskovitz, President
and Chief Executive Officer said, "Over the past 12 months we
have seen a significant decline in the overall demand for
telecommunications equipment. Every company in the industry was
challenged to re-examine assumptions, strategies, and
expectations.

Lumenon responded early to these adverse market conditions by
restructuring our business operations in an effort to facilitate
a realistic and measured transition to commercialization. Over
the course of the year we methodically managed our cash flow and
business operations, while we continued to implement our
business strategies at various levels."

                          Core Technology

Dr. Mark Andrews, Lumenon's Co-Founder, Vice President and Chief
Technology Officer commented, "We believe Lumenon remains in the
development forefront of hybrid glasses and polymers for the
manufacturing of Planar Lightwave Circuits. We have made
significant progress towards the optimization and
commercialization of hybrid glass/polymer optical chips. Over
the course of the year we have advanced our PHASIC(TM) process
and demonstrated our core technology capability through
extensive testing against strict performance metrics. To date we
have successfully produced AWGs with channel insertion losses of
6 dB and less and have been shipping pre-production sample
devices such as our 16 channel 100 GHz DWDMs. We are also
leveraging our core technology platform with the development of
an Optical Channel Monitor. This device represents our first
hybrid integration and the initial steps towards leveraging the
full potential of our PHASIC(TM) process to produce low cost
integrated components."

"No one can reasonably predict when telecommunications capital
spending will resume to levels more reasonably in line with past
expectations. Ultimately, communications carriers must address
the increasing demand for services such as video-on-demand,
desktop video conferencing, and interactive games over the
Internet and other, yet-to-be-developed, advanced applications.
To be successful, they will need the help of technologies that
lower costs and increase performance, technologies that Lumenon
is now being positioned to offer," Mr. Moskovitz concluded.

                         Conference Call

Lumenon will hold a conference call and webcast in the near
future to expand on the Company's Annual Report on Form 10 K,
and to provide a business and financial update to summarize
recent actions the Company has taken. The date and time of the
conference call will be announced shortly.

Lumenon Innovative Lightwave Technology, Inc., designs, develops
and builds optical components and integrated optical devices in
the form of packaged compact hybrid glass and polymer circuits
on silicon chips. These photonic devices - based upon Lumenon's
patented PHASIC(TM) design process and manufacturing methodology
- offer communications providers the ability to dramatically
boost bandwidth for today's burgeoning telecommunication, data
communication and cable industries.

For more information about Lumenon Innovative Lightwave
Technology, Inc., visit the Company's Web site at
http://www.lumenon.com  

                           *    *    *

As reported in Troubled Company Reporter's June 10, 2002,
Lumenon Innovative Lightwave Technology, Inc., received approval
from the Nasdaq Stock Market, Inc., to transfer the listing of
the Company's common stock from The Nasdaq National Market to
The Nasdaq SmallCap Market effective at the opening of business
Friday, June 7, 2002. The Company's common stock will continue
to trade under its current symbol "LUMM".


MALLON RESOURCES: Black Hills Merger Deal Solves this Insolvency
----------------------------------------------------------------
Black Hills Corporation (NYSE: BKH) has entered into a
definitive merger agreement to acquire Denver-based Mallon
Resources Corporation (OTC Bulletin Board: MLRC).  The total
cost of the transaction is estimated at $52 million, which
includes the acquisition today by Black Hills of Mallon's debt
to Aquila Energy Capital Corporation and the settlement of
outstanding hedges, amounting to $30.5 million.  The merger
agreement, which has been approved by both companies' Boards of
Directors, provides that Mallon shareholders will receive 0.044
of a share of Black Hills common stock for each share of Mallon.  
Completion of the acquisition, which is subject to customary
conditions, including approval by the shareholders of Mallon, is
expected in the first quarter of 2003.

Mallon's proved reserves, as reported at December 31, 2001, were
53.3 billion cubic feet of gas equivalent.  Black Hills believes
that Mallon's current proved reserves could be substantially
higher based on its review of the reserves and current oil and
gas prices.  The reserves are located primarily on the Jicarilla
Apache Nation in the San Juan Basin of New Mexico and are
comprised almost entirely of natural gas in shallow sand
formations.  The oil and gas leases of the acquisition total
more than 66,500 gross acres (56,000 net), most of which is
contained in a contiguous block that is in the early stages of
development.  Black Hills also believes it could recover
additional gas reserves from the shallow sands.  Further, more
gas could be recoverable from deeper horizons that have yet to
be explored, but are productive elsewhere in the San Juan Basin.

Daniel P. Landguth, Chairman and CEO of Black Hills Corporation,
said "This acquisition is an outstanding strategic fit for us.  
In one transaction, we have advanced several of our long-term
objectives by dramatically increasing our natural gas reserves
and production.  We believe that natural gas is the fuel of
choice and that U.S. gas demand will remain strong.  Our
integrated energy strategy seeks balance and integration among
our business lines."

Current daily net production of the Mallon properties is nearly
13 million cubic feet of gas equivalent.  Mallon operates 149 of
171 total gas and oil wells, with working interests averaging 90
to 100 percent in most of the wells and undeveloped acreage.  
Landguth added, "These operated properties provide us with
control over the exploration and development program, allowing
flexible capital deployment as market conditions dictate.  
Moreover, our Denver marketing subsidiary, Enserco Energy, can
add gas marketing and transportation expertise.  We also look
forward to working in partnership with the Jicarilla Apache
Nation to responsibly develop the portion of their gas resources
contained beneath these leases."

Landguth continued, "This deal demonstrates our commitment to
long-term earnings growth.  Upon closing, the acquisition is
expected to increase gas and oil production immediately by
approximately 60 percent and more than double our proven oil and
gas reserves at a very attractive acquisition cost. Combined
with our other integrated energy activities, this acquisition
will solidify our presence in Western markets."

George O. Mallon, Jr., Chairman and CEO of Mallon Resources
Corporation, stated, "We feel that this transaction is both
prudent and exciting for our shareholders.  After pursuing
several corporate strategies, we concluded that this merger with
Black Hills Corporation was the most attractive for our
shareholders.  With Mallon's unique fit into the Black Hills
strategy, this combination will give all shareholders the
opportunity to grow with a solid, well run energy company that
has the desire, knowledge and financial capability to develop
our significant undeveloped gas reserves in the San Juan Basin."

After the acquisition is closed, Black Hills plans to initiate
an expanded development and exploratory drilling program on the
properties.  As a result, Black Hills expects to increase gas
production, reserves and cash flow from fuel operations in late
2003 and beyond.  Black Hills expects the acquisition to have a
nominal earnings-per-share impact until production levels can be
increased.

Black Hills Corporation -- http://www.blackhillscorp.com-- is a  
diverse energy and communications company.  Oil and gas
operations, conducted in nine states with a concentration of
resources in the Rocky Mountain region, are part of Black Hills
Energy, the integrated energy business unit which generates
electricity and produces and markets natural gas, oil and coal;
Black Hills Power, an electric utility serving western South
Dakota, northeastern Wyoming and southeastern Montana; and Black
Hills FiberCom, a broadband communications company offering
bundled telephone, high speed Internet and cable entertainment
services.  Mallon Resources Corporation is a Denver, Colorado,
based oil and gas exploration and production company operating
primarily in the San Juan Basin of New Mexico.

                         Investor Notices

Investors and security holders are advised to read the joint
proxy statement/prospectus that will be included in the
Registration Statement on Form S-4 expected to be filed with the
SEC in connection with the proposed merger.  Black Hills and
Mallon will file the joint proxy statement/prospectus with the
SEC.  Investors and security holders may obtain a free copy of
the joint proxy statement/prospectus (when available) and other
documents filed by Black Hills and Mallon with the SEC at the
SEC's Web site at http://www.sec.gov The joint proxy  
statement/prospectus and such other documents (relating to Black
Hills) may also be obtained for free from Black Hills by
directing such request to:  Black Hills Corporation, P.O. Box
1400, 625 Ninth Street, Rapid City, South Dakota 57709,
Attention:  Steven J. Helmers, General Counsel; telephone:  605-
721-2300; email:  shelmers@bh-corp.com   The joint proxy
statement/prospectus and such other documents (relating to
Mallon) may also be obtained for free from Mallon by directing
such request to:  Mallon Resources Corporation, 999 18th Street,
Suite 1700, Denver, Colorado 80202, Attn:  Peter H. Blum,
Executive Vice President; telephone:  303-293-2333.

Mallon, its directors, executive officers and certain members of
management and employees may be considered "participants in the
solicitation" of proxies from Mallon's shareholders in
connection with the merger. Information regarding such persons
and a description of their interests in the merger and related
transactions will be contained in the Registration Statement on
Form S-4 when it is filed.

Mallon Resources' June 30, 2002 balance sheets show a working
capital deficit of about $28.8 million, and a total
shareholders' equity deficit of about $7 million.


MARINER POST-ACUTE: MHG Wants More Time to Challenge Claims
-----------------------------------------------------------
The Mariner Health Group Debtors ask the Court to extend the
deadline for filing objections to claims in their Chapter 11
cases until February 28, 2003.

The MHG Debtors relate that under the Plan, the term "Claims
Objection Deadline" is defined to mean the later of:

  (i) the 180th day after the Effective Date,

(ii) with respect to a specific Claim, the 180th day after
      proof of the Claim is filed,

(iii) with respect to a Claim that is subject to the ADR
      Procedure, the 90th day after the holder of the Claim
      either has opted out of the ADR Procedure by executing the
      necessary stipulation or has completed the requirements of
      the ADR Procedure, or

(iv) the greater period of limitation as may be fixed or
      extended by the Bankruptcy Courts or by agreement between
      a Debtor and the holder of the Claim.

Presently, the earliest Claims Objection Deadline is on November
8, 2002.

The Debtors report that they have resolved 26,000 of the 32,000
filed and scheduled claims in the MHG and MPAN cases.  The
resolution of the scheduled prepetition claims has proven to be
more difficult than anticipated because of:

    (a) the need to adjust scheduled amounts based upon payments
        made during the case on account of critical vendors,

    (b) the need to compare scheduled claims to the lists of
        assumed contracts,

    (c) the need to compare scheduled claims to orders entered
        during the case approving compromises, and

    (d) problems related to matching filed claims to scheduled
        claims, particularly in circumstances where numerous
        claims were filed of the same vendor.

The Debtors explain that resolution of filed claims entails the:

    (a) review of trade claims by the Reorganized Debtors'
        accounts payable department, including the need to
        reconcile scheduled amounts with claims, which may have
        been filed by several branches of the same vendor on a
        regional basis,

    (b) review of assumed and rejected unexpired leases and
        executory contracts by numerous different working groups
        within the Reorganized Debtors,

    (c) analysis of damage claims arising from the rejection of
        unexpired leases and executory contracts,

    (d) review of all prior settlements in the cases for
        releases involving claims,

    (e) identification of duplicate and superseded claims,

    (f) identification of claims for reimbursement, contribution
        and indemnity,

    (g) identification and analysis of unliquidated and
        contingent claims,

    (h) review of asserted claims for priority or administrative
        status,

    (i) reconciliation of paid claims to taxing authorities,

    (j) review of claims based upon shareholders interests or
        damage claims relating to the purchase or sale of the
        Debtors' securities,

    (k) review and reconciliation of claims filed in one or both
        of the MPAN and MHG cases, that assert claims against
        the estates in both the MHAN and MHG cases, and

    (l) continuing efforts to resolve personal injury claims.

The Reorganized Debtors estimate that it will take until January
2003 to complete their analysis of the remaining unresolved
claims and to conclude their initial efforts to negotiate
settlements without the need for filing formal objections.
(Mariner Bankruptcy News, Issue No. 34; Bankruptcy Creditors'
Service, Inc., 609/392-0900)  


MATTRESS DISCOUNTERS: Standstill Pact Continues Until October 31
----------------------------------------------------------------
Mattress Discounters Corporation announced that the standstill
agreement previously reached with members of an ad-hoc committee
of senior noteholders holding approximately two thirds of the
Company's 12-5/8% Senior Notes will continue. Under this
agreement the ad-hoc committee members have agreed to
"standstill" until October 7, 2002, with a further automatic
extension to October 31, 2002 upon reaching a satisfactory
conclusion to ongoing negotiations with Sealy, Inc., and certain
of the Company's equity holders. During this time they will
refrain from exercising any rights or remedies or take any other
action with respect to the Company's failure to make the
interest payment that was due on July 15, 2002.  The standstill
agreement will provide the Company with the additional time
necessary to continue to negotiate a consensual financial
restructuring of its outstanding obligations.  The Company
entered into a similar extension agreement with its secured
lenders.  The secured lender extension agreement provides that
the lenders will "standstill" until October 7, 2002, with a
further automatic extension until October 25, 2002, provided
that the senior noteholder agreement is extended to October 31,
2002.

Steve Newton, the Chief Executive Officer of Mattress
Discounters stated, "Everyone involved in this process is
working extremely hard to find a solution. Our employees have
been outstanding during this time of uncertainty and we are all
looking forward to putting this period behind us."

Sealy, Inc.'s Chief Executive Officer, David McIlquham stated,
"Sealy is working with Mattress Discounters' Management Team and
is hopeful that matters will be successfully resolved in the
very near future."

John J. Rapisardi of Jones Day Reavis & Pogue, the ad hoc
Committee's counsel added, "The committee believes that
continuing the standstill agreement will further the Company and
the committee's efforts toward achieving a value maximizing
restructuring."

Mattress Discounters is headquartered in Upper Marlboro,
Maryland, employing 1,100 people.  With almost 25 years in
business and more than 240 company-owned stores across the
nation, they are the largest specialty mattress retailer in
America and one of the world's largest retailers of Sealy
mattresses.


MIKOHN GAMING: Selling Lighting & Sign Unit to C.E.I. Holding
-------------------------------------------------------------
Mikohn Gaming Corporation (Nasdaq:MIKN) has reached a definitive
agreement to sell its exterior sign subsidiary, Mikohn Lighting
and Sign, to C.E.I. Holding Inc., headed by Mark Johnson a long-
time Mikohn employee. The transaction is anticipated to close no
later than October 31, 2002. Johnson is joined by a group of the
operation's current employees who will become co-owners of the
business.

Russ McMeekin, President and CEO of Mikohn Gaming commented; "we
are delighted that Mark Johnson and his group have stepped
forward to purchase our exterior sign business. Although this is
a quality operation, the sale reflects our strategic focus on
our recurring revenue products. Mark and his team have many
years of experience in the exterior sign business and we wish
him and his team much success".

Commenting on the transaction, Mark Johnson, Chairman of C.E.I.
Holding said, "We are very excited about this opportunity to
continue to serve an industry which we have serviced for many
years, and look forward to continuing relationships within the
industry".

"Consistent with our commitment to streamline our operations and
focus on cash growth, we are on track to generate cash growth
through business operations and divestitures and are on track to
close the year at a minimum cash balance of $14 million"
reiterated John Garner, Chief Financial Officer.

Mikohn is a diversified supplier to the casino gaming industry
worldwide, specializing in the development of innovative
products with recurring revenue potential. Mikohn develops,
manufactures and markets an expanding array of slot games, table
games and advanced player tracking and accounting systems for
slot machines and table games. The company is also a leader in
exciting visual displays and progressive jackpot technology for
casinos worldwide. There is a Mikohn product in virtually every
casino in the world. For further information, visit the
company's Web site at http://www.mikohn.com  

                          *    *    *

As previously reported, Standard & Poor's Ratings Services
lowered its corporate credit and senior secured debt ratings of
Mikohn Gaming Corp., to single-'B'-minus from single-'B'. The
ratings remain on CreditWatch where they placed on February 22,
2002, but the implication is revised to negative from
developing.

The actions followed the announcement by the Las Vegas, Nevada-
based slot-machine manufacturer that operating performance
during the June 2002 quarter was well below expectations. That
weak performance resulted in a violation of bank covenants and a
significant decline in credit measures. Mikohn has about $100
million of debt outstanding. The lower ratings also reflect
Standard & Poor's concern that Mikohn's liquidity position could
further deteriorate if operating performance during the next few
quarters does not materially improve.


MITEC TELECOM: Working Capital Deficit Reaches C$3.5M at July 31
----------------------------------------------------------------
Mitec Telecom Inc. (TSX: MTM), a leading designer and
manufacturer of wireless network products for the
telecommunications industry, reported its results for the first
quarter ended July 31, 2002. Revenues and net income for the
period were adversely affected as original equipment
manufacturers and service providers continued to reduce capital
spending in the face of the telecommunications industry's on-
going weakness. Mitec has responded decisively to this situation
by implementing an aggressive cash generation and cost reduction
program.

First quarter sales were C$24 million, down 34.6% from C$36.7
million for the same period last year. Net loss for the period
was C$6.4 million compared to a net income of C$684,000 after
goodwill amortization. In addition to the effects of reduced
sales and margins, the first quarter net loss includes a
restructuring provision of C$0.4 million and non-cash foreign
exchange losses of C$1 million.

Compared to the fourth quarter ended April 30, 2002, sales
decreased from C$31 million, while the net loss improved from
the C$21 million reported. In anticipation of the negative
industry environment, management's actions significantly reduced
the cash burn which for the first quarter was C$3.5 million
compared to C$8.5 million for the fourth quarter ended April 30,
2002.

At July 31, 2002, Mitec Telecom's balance sheets show that its
total current liabilities eclipsed its total current assets by
about C$3.5 million.

Ken Allstaff, interim President and interim COO said Mitec
continues to face the same challenges as all other organizations
in the sector. "Reduced spending continues to be the general
trend. This has an obvious snowball effect throughout the supply
chain. We have experienced reductions in each of our three
segments. Wireless is down 32% year over year due to a reduction
of orders for 2.5G products; microwave-links revenues are off
almost 44% as a major customer has delayed orders due to the
slowdown in the European telecom industry and satcom is off 7.5%
due to lower demand for satellite ground stations, microwave
backhaul equipment and flexible waveguide products."

         Turnaround Plan at Beve Bringing Desired Results:
        New Business, Cost Reductions Creating Improvement

Mr. Allstaff said BEVE has undergone extensive downsizing during
the past few months. "Concurrent with this has been an upturn in
sales within the military area as well as new EMS contract
manufacturing business. The situation in Sweden is a lot
brighter and the current outlook for the second half is
positive. It is anticipated that BEVE will be EBITDA positive
for the year after being in a cash deficit position during the
most recent fiscal year."

   Extensive Corporate-Wide Plan To Generate $8-$12 Million
       In Cash; Staff Cuts To Reduce Fixed Costs By An
                 Additional $6 Million

Keith Findlay, Executive Vice-President, Finance and CFO said
several initiatives have been implemented to streamline
activities in order to generate cash, rationalize operations and
further reduce the Company's workforce. He cited the following
details:

    - $5 - $7 million net cash generation (after repayment of      
      debt) through the sale of corporate real estate.

    - $2 million through the sale of non-core capital assets.

    - $3 million through the realization of slow-moving
      inventory.

    - $6 million annual savings through additional staff
      reductions globally.

           NEW APPOINTMENT TO BOARD OF DIRECTORS

Myer Bentob, Chairman of the Board, announced that Thomas A.
Kaneb has been named to Mitec's Board of Directors, effective
immediately. "I am delighted to welcome Mr. Kaneb to our Board.
He brings us a wealth of expertise in a variety of business
endeavors, as well as extensive experience as a director of a
number of public and private organizations."

From 1978-1999, Mr. Kaneb was the President and sole shareholder
of Universal Terminals Inc., the largest independent distributor
of heating oil and industrial fuels in Ontario. After selling
the business to Ultramar in 1999, Mr. Kaneb was the founding
shareholder of Sigma Point Technologies, a contract manufacturer
of integrated circuit boards and system assemblies for optical
networking, telecommunications and medical equipment. He is
currently Sigma Point Technology's Chairman of the Board, and is
actively engaged in private investments in young companies with
a focus on proprietary technologies in chemicals, energy and
high tech.

Mitec Telecom is a leading designer and manufacturer of products
for the telecommunications industry. The Company sells its
products worldwide to network providers for incorporation into
high-performing wireless networks used in voice and
data/Internet communications. Additionally, the Company provides
value-added services from design to final assembly and maintains
test facilities covering a range from DC to 60 GHz.
Headquartered in Montreal, Canada, the Company also operates
facilities in the United States, Sweden, United Kingdom, China
and Thailand.

Mitec Telecom Inc., is listed on the Toronto Stock Exchange
under the symbol MTM. On-line information about Mitec is
available at http://www.mitectelecom.com


MORGAN STANLEY: Fitch Affirms Low-B & Junk Ratings on 7 Classes
---------------------------------------------------------------
Fitch Ratings affirms Morgan Stanley Dean Witter Capital I's
commercial mortgage pass-through certificates, series 2000-
Life2, $142.4 million class A-1, $480 class A-2, and interest-
only class X at 'AAA'. In addition, Fitch affirms the following
classes: $23 million class B at 'AA', $24.9 million class C at
'A', $6.9 million class D at 'A-', $18.8 million class E at
'BBB', $7.7 million class F and $3.1 million class G at 'BBB-',
$9.6 million class H at 'BB+', $9.2 million class J at 'BB',
$3.1 million class K at 'BB-', $4 million class L at 'B+', $6.7
million class M at 'B', $2.9 million class N at 'B-' and $1
million class O at 'CCC'. Fitch does not rate the $5.7 million
class P. The rating affirmations follow Fitch's annual review of
the transaction, which closed in October 2000.

The affirmations are due to the steady performance of the pool
and the limited amount of collateral paydown. As of the
September 2002 distribution date, the transaction's collateral
balance has decreased by 2.2%, to $748.7 million from $765.3
million at issuance. The certificates are collateralized by 103
fixed rate loans secured by 103 multifamily and commercial
properties consisting primarily of office (30%), industrial
(26%), retail (21%), and multifamily (20%). There are geographic
concentrations in New Jersey (26%), California (21%), New York
(7%), Maryland (5%) and Florida (5%). No loans have been
delinquent or in special servicing since issuance. Wells Fargo
Bank, the master servicer, collected year-end 2001 operating
statements for all loans. The 2001 weighted average debt service
coverage ratio is 1.62 times, compared to the 1.52x as of YE
2000 and 1.53x at issuance. The top five loans represent 21% of
the collateral balance. The weighted average DSCR for all top
five loans is 1.74x as of YE 2001 compared to 1.61x as of YE
2000 and 1.65x at issuance. Overall, Fitch considers seven loans
(4.8%) to be of concern due to vacancy issues or difficulty
collecting rental payments from tenants.

Fitch reviewed the performance of the Towers at Portside loan
(7.4% of the pool). The loan is secured by a 527 unit
multifamily property located on the waterfront in Jersey City,
NJ. Fitch's stressed DSCR was calculated using borrower reported
net operating income adjusted for reserves and a Fitch stressed
debt constant of 9.16%. The YE 2001 DSCR was 1.97x, compared to
1.81x as of YE 2000 and 1.78x at issuance. Even though occupancy
at the property has fallen to 90% as of Dec. 31, 2001, the
property is expected to continue performing well. Given the
improved performance of this loan it maintains credit
characteristics consistent with investment-grade obligations.

Due to the overall stable performance, low number of loans of
concern and limited paydown Fitch affirmed all ratings. Fitch
will continue to monitor the performance of this transaction, as
surveillance is ongoing.


NATIONSRENT INC: Signing-Up UBS Warburg for Financial Advice
------------------------------------------------------------
NationsRent Inc., and its debtor-affiliates seek the Court's
authority to employ UBS Warburg LLC as financial advisors in
these Chapter 11 cases.

Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger PA,
in Wilmington, Delaware, tells Judge Walsh that UBS Warburg is a
leading financial advisory firm, comprised of professionals with
exceptional experience in providing financial advice, including
restructuring, merger and acquisition, capital markets and
transactional advice, to financially troubled companies.  The
firm also has extensive experience in assisting troubled
companies explore a variety of strategic alternatives, including
the sale of these companies.  UBS Warburg and its professionals
have provided financial advice in many recent restructuring and
financing transactions.

According to Mr. DeFranceschi, the Debtors have already engaged
UBS Warburg to perform various financial advisory services and
restructuring-related activities before the Petition Date.
Through these prepetition activities, UBS Warburg has worked
closely with the Debtors' management, financial staff and other
employees and, thus, has become well acquainted with the
Debtors' business operations and financial advisory needs.   Mr.
DeFranceschi notes that UBS Warburg has developed significant
experience and expertise that will be valuable in providing
effective and efficient services in these Chapter 11 cases.  Of
equal importance, UBS Warburg is one of the few, if not the
only, major full-service securities firm with a major
restructuring practice.

The Debtors anticipate UBS Warburg to assist them in:

  (a) identifying and evaluating potential third parties to a
      potential transaction as defined in the Engagement Letter;

  (b) contacting and meeting with potential Transaction Parties;

  (c) preparing a memorandum that describes the Debtors and
      their business operations for distribution to Transaction
      Parties;

  (d) evaluate the financial aspects of a Transaction;

  (e) advising the Debtors as to the structure and form of a
      proposed Transaction;

  (f) developing a general negotiating strategy with a potential
      Transaction Party and participating in these negotiations;

  (g) in any proceeding relating to regulatory approvals
      required for a Transaction; and

  (h) assisting with other matters that fall within UBS
      Warburg's expertise as may be mutually agreed upon by both
      parties.

In consideration for its services, the Debtors propose to pay
UBS Warburg:

  -- an initial fee of $175,000, payable promptly upon entry of
     an order approving the Motion; provided that this will
     be offset against the Transaction Fee; and

  -- a Transaction Fee payable at the closing of the
     Transaction, equal to the greater of:

       (1) $1,000,000; or

       (2) 1% of the Transaction Value.

     The Transactions must be consummated during the term UBS
     Warburg's engagement or within 12 months thereafter unless
     UBS Warburg chooses to terminate its engagement;

     A Transaction includes:

        (a) any merger, consolidation, reorganization or other
            business combination under which the business
            of the Debtors is combined with that of the
            Transaction Party; or

        (b) the sale, transfer or other disposition of 50%
            or more of the capital stock or assets of the
            Debtors by way of tender or exchange offer, option,
            negotiated purchase, leveraged buyout, minority
            investment or partnership, joint or collaborative
            venture or otherwise;

     This does not include a reorganization or recapitalization
     of the Debtors wherein the Debtors' creditors and other
     parties in interest surrender their debt and equity claims
     against the Debtors in exchange for new debt or equity
     claims as reorganized without a material new investment by
     any third party, creditor or other party in interest.

The Debtors will also reimburse UBS Warburg for reasonable out-
of-pocket expenses not to exceed $15,000 without the Debtors'
prior written approval.

The Debtors will indemnify, hold harmless, and defend UBS
Warburg and its affiliates, directors, agents, employees or
principals under certain circumstances.  In particular, Mr.
DeFranceschi says, these Parties will be indemnified by the
Debtors for any losses, claims, damages, liabilities and
expenses relating to or arising out of matters contemplated by
UBS Warburg's engagement. This includes any legal proceeding in
connection with matters relating to or referred to in the
parties' Engagement Letter or arising out of issues in which UBS
becomes involved in any capacity.

Jorge G. Mora, executive director in the M&A Group of UBS,
assures the Court that UBS Warburg does not hold or represent
any interest adverse to these Chapter 11 cases.  However, Mr.
Mora relates that UBS Warburg or an affiliate has provided or is
providing services to interested parties in matters unrelated in
these cases.  The interested parties are: Amsouth Leasing Ltd.;
Apollo Advisors; Bank of America Securities; Bank of Montreal;
The Bank of New York; Bingham McCutchen LLP; Bombardier Capital,
Inc.; Citizens Bank of Massachusetts; Financial Group;
David L. Babson & Co., Inc.; Deere Credit, Inc.; Delaware
Management Company; Deutsche Financial Services Corporation;
Ernst & Young LLP; Fleet National Bank; Ford Motor Credit
Company.

Other parties include: General Electric Capital Corporation;
Heller Financial Leasing Inc.; ING Pilgrim; Investcorp S.A.;
J.P. Morgan Capital Corporation; KeyCorp Leasing; Kroll Zolfo
Cooper, LLC; Lowes Companies, Inc.; Muzinich & Co., Inc.; New
Holland Credit Company; PPM America, Inc.; Provident Investment
Management LLC.; Richards, Layton & Finger, P.A.; Seneca Capital
Management; Skadden, Arps, Slate, Meagher & Flom LLP; South
Trust Bank NA; Textron Financial Corporation; Transamerica
Business Credit. (NationsRent Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

DebtTraders says that NationsRent Inc.'s 10.375% bonds due 2008
(NRNT08USR1) are trading at a penny on the dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NRNT08USR1
for real-time bond pricing.


NODAK MUTUAL: AM Best Keeping Watch on B++ Fin'l Strength Rating
----------------------------------------------------------------
A.M. Best Co., has placed the financial strength rating of B++
(Very Good) of Nodak Mutual Group (Fargo, ND) under review with
negative implications.

The rating action reflects the September 23, 2002, announcement
by the North Dakota Department of Insurance placing Nodak Mutual
Insurance Company under administrative supervision.

The order was issued at the request of the senior management of
Nodak Mutual. The action is wholly related to the instability
between the Board of Directors and management and was not
related to the financial condition of Nodak Mutual Insurance
Company. The order of administration requires prior approval by
the Department for material transactions of Nodak Mutual's
management. The negative implications of the under review status
reflect A.M. Best's concerns regarding the uncertainties
associated with the future direction of the group. The group
will remain under review pending the completion of the
Department's investigation and A.M. Best's discussions with
management.

The following property/casualty members of the Nodak Mutual
Group have been placed under review with negative implications:

     -  American West Insurance Company  
     -  Nodak Mutual Insurance Company  

A.M. Best Co., established in 1899, is the world's oldest and
most authoritative insurance rating and information source. For
more information, visit A.M. Best's Web site at
http://www.ambest.com


NRG ENERGY: South Central Unit Defaults on Senior Secured Bonds
---------------------------------------------------------------
As previously announced, NRG South Central LLC (a wholly owned
subsidiary of NRG Energy) on September 16, 2002, did not make
approximately $47 million in combined principal and interest
payments on 8.962 percent series A-1 senior secured bonds due
2016 and 9.479 percent series B-1 senior secured bonds due 2024.
The South Central bondholders hired advisors and formed a
committee to represent them in negotiations with NRG.

NRG is continuing to negotiate with this committee of
bondholders, as well as with all of its other lenders, in the
context of a comprehensive restructuring plan. The fifteen-day
grace period to make payment ended October 1, 2002 and NRG South
Central Generating LLC did not make the required payments. As a
result, NRG South Central is in default on these bonds.

NRG intends to submit to its lenders and bondholders a
comprehensive restructuring plan by late October. As a part of
this process, NRG continues to work with certain of NRG's bank
lenders to obtain an extension of the deadline by which it must
post approximately $1.0 billion of cash collateral in connection
with certain bank loan agreements. The prior extension expired
September 13, 2002 and NRG has been working with its bank
lenders since then to obtain an extension. Unless and until an
extension can be agreed upon, the banks have the right to demand
posting of the cash collateral.

"NRG remains hopeful that it will be able to reach an
arrangement for the benefit of all stakeholders," said Richard
C. Kelly, NRG president and chief operating officer.

NRG Energy develops and operates power-generating facilities.
Its operations include competitive energy production and
cogeneration facilities, thermal energy production and energy
resource recovery facilities.

Xcel Energy is a major U.S. electricity and natural gas company
with regulated operations in 12 Western and Midwestern states.
The company provides a comprehensive portfolio of energy-related
products and services to 3.2 million electricity customers and
1.7 million natural gas customers through its regulated
operating companies. In terms of customers, it is the fourth-
largest combination natural gas and electricity company in the
U.S. Company headquarters are located in Minneapolis.


OWENS CORNING: Court Okays EPA Bar Date Extension to December 15
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
the Stipulation between the United States Environmental
Protection Agency and the Owens Corning Debtors extending the
General Claims Bar Date by which the EPA must file any proofs of
claim arising to December 15, 2002.

Owens Corning is one of the world's top makers of fiberglass and
composite materials. The company, which uses the Pink Panther
cartoon character as its pitchman, sells fiberglass and foam
insulation. Owens Corning's building-materials unit also
manufactures roofing materials, vinyl windows, patio doors,
vinyl siding, and rain gutters and downspouts. The company's
composite-materials segment makes composites used in the
automotive, electronics, and telecommunications industries.
Owens Corning operates manufacturing facilities in the US and
about a dozen other countries. The company has filed for
bankruptcy protection to help it cope with billions of dollars
in asbestos-related lawsuits.


PATRIOT AIR: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Patriot Air, LLC
        Two Lincoln Centre
        5420 LBJ Freeway #1450
        Dallas, Texas 75240

Bankruptcy Case No.: 02-38187

Chapter 11 Petition Date: September 18, 2002

Court: Northern District of Texas (Dallas)

Judge: Harold C. Abramson

Debtor's Counsel: Donald R. Rector, Esq.
                  Glast, Phillips & Murray
                  2200 One Galleria Tower
                  13355 Noel Rd., LB 48
                  Dallas, Texas 75240-6657
                  972-419-8300   

Estimated Assets: $1 to $10 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
AIS                        Trade                       $10,976

ASA                        Trade                       $10,000

Aegis Aviation Services    Trade                       $24,094

Aegis Service Co., LLC     Trade                       $47,152

American Airlines          Trade                       $13,357

Amtex Corporation          Trade                        $5,328

Avfuel Corporation         Trade                        $6,587

Dalfort Aerospace          Trade                       $47,039

Delta Airlines             Trade                       $16,198

Eagle Jet, Inc.            Trade                        $5,445

Embassy Suites             Trade                        $3,416

Ivyport Logistical         Trade                       $11,261
Services, Ltd.

Northwest Airlines         Trade                        $4,335

Orlando Sanford            Trade                        $5,935

Pace Airlines              Contract                 $2,402,630
PO Box 525 (S-305)
Winston Salem, NC 27102-0525

Piedmont Hawthorne         Trade                       $34,740

South Jersey               Trade                       $38,745
Transportation  

Swissport                  Trade                       $82,354

Triton Aviation            Aircraft Lease Paymnets  $1,646,167  
55 Green Street
San Francisco, CA 94111

Worldwide Flight Service   Trade                       $19,435


PCNET INT'L: Units File for CCAA Protection in British Columbia
---------------------------------------------------------------
PCNET International Inc., (TSX-V: PCT) announced its
subsidiaries, PCN Ventures Inc., and Pacific Coast Net Inc.,
together with their respective subsidiaries have successfully
applied for and obtained protection under the Companies'
Creditors Arrangement Act pursuant to an Order from the British
Columbia Superior Court of Justice. The initial Order, as is
customary in these matters, is for a period of 30 days.

"Along with filing for protection we have aggressively reshaped
the company, and are pleased to have what we believe is a
comprehensive restructuring solution," says Peter Casson, CEO.

Mr. Casson emphasized the CCAA process will have no impact on
the company's abilities to fulfill its obligations to its
employees or its customers. "Daily operations of our facilities
will continue as usual, and our employees will continue to be
paid without interruption," says Mr. Casson.

PCN's customers will remain unaffected by this announcement and
the company confirmed it has sufficient funds on hand to enable
it to continue normal operations during the CCAA process, and to
make payments to suppliers and others for authorized goods and
services received after the Initial Order was issued. PCN is
committed to maintaining its usual high service levels to
customers during this period.

"During the restructuring period and beyond, we will continue
our commitment to provide the highest quality product and
service that our customers have come to expect," Mr. Casson
said. "Our vendors will be paid for all goods and services
provided after the filing date and transactions that occur in
the normal course of business will continue as before."

He said that the company has been operating under challenging
conditions during the past two years due to reduced margins
prevalent in the ISP sector, increased competition and other
factors. "Despite this pressure, our company continued to
maintain strong growth until supply far outpaced demand. After
careful consideration, we determined that the CCAA process
presents the best means to complete our restructuring," Mr.
Casson stated.

"[Tues]day's announcement should reassure all interested
parties, including our employees, clients, and suppliers that
PCN can emerge from the current period as a strong competitor in
the Internet Service Provision industry. We are committed to
working with our Creditors to achieve a fair disposition of
funds, and a positive working relationship for the future." said
Mr. Casson.


PENNZOIL-QUAKER: S&P Keeps Low-B Debt Ratings on Watch Positive
---------------------------------------------------------------
Standard & Poor's said that its double-'B'-plus corporate credit
and senior secured debt ratings and its double-'B'-minus senior
unsecured debt ratings on Pennzoil-Quaker State Co., remain on
CreditWatch with positive implications. PQS ratings were placed
on CreditWatch on March 26, 2002, following the announcement
that Shell Oil Co., (AAA/Stable/A-1+) entered into a definitive
agreement to acquire PQS. The transaction was valued at about
$2.9 billion, which included the assumption of about $1.1
billion in debt.

On Friday, September 27, 2002, PQS announced that the Federal
Trade Commission had cleared its acquisition by Shell. In
addition, PQS announced that it had entered into a consent order
with the FTC that resolves the agency's concerns regarding the
U.S. group II base oil marketplace.

"PQS ratings will remain on CreditWatch with positive
implications until after the closing of the transaction," said
Standard & Poor's credit analyst Jean C. Stout. Standard &
Poor's credit analyst John Thieroff added, "The timing and
magnitude of such an upgrade will depend on PQS' placement
within the Royal Dutch/Shell Group of companies and the presence
or absence of credit support from Royal Dutch/Shell."

PQS, based in Houston, Texas, is a worldwide automotive consumer
products company with a leading market share in branded motor
oils, holding the No. 1 and No. 2 selling motor oils in the
United States.


PENTON MEDIA: Will Publish Third Quarter Results on October 31
--------------------------------------------------------------
Penton Media, Inc., (NYSE: PME) expects to release its third-
quarter results before the market opens on Thursday, October 31.
The Company plans to hold a conference call to discuss the
results and its business outlook at 10 a.m. Eastern Time that
same morning. The call dial-in number is 973-633-1010. A
telephone replay of the conference call will be available
beginning the afternoon of October 31 until 6 p.m. Eastern Time,
Thursday, November 7, by calling 1-402-220-1156 (no access code
is necessary).

A live audio webcast of the phone call will be available through
the Investors section of Penton's Web site at
http://www.penton.com The call also will be archived on the  
site.

Penton Media is a leading, global business-to-business media
company that produces market-focused magazines, trade shows and
conferences, and Web sites. Penton's integrated media portfolio
serves the following industries: Internet/broadband; information
technology; electronics; natural products; food/retail;
manufacturing; design/engineering; supply chain; aviation;
government/compliance; mechanical systems/construction; and
leisure/hospitality. For more information, visit
http://www.penton.com

                              *    *    *

As reported in Troubled Company Reporter's May 13, 2002,
edition, Standard & Poor's revised its outlook on business-to-
business media company Penton Media Inc., to negative from
developing due to additional concerns about the company's
profitability in light of continued revenue declines and the
operating difficulties of key end markets. Standard & Poor's
also affirmed its existing ratings on Penton, including its
single-B-minus corporate credit rating.

                        Outlook

Ratings could be lowered if Penton fails to maintain adequate
liquidity to fund its operations during this difficult operating
environment.

Ratings List:                            To:             From:

Penton Media Inc.

* Corporate credit rating          B-/Negative/--      B-/Dev/--
* Senior secured debt rating              B-
* Subordinated debt rating               CCC


PEREGRINE SYSTEMS: Asks Court to Fix December 16 Claims Bar Date
----------------------------------------------------------------
Peregrine Systems, Inc., and its affiliated debtor Peregrine
Remedy, Inc., move the U.S. Bankruptcy Court for the District of
Delaware to fix December 16, 2002 as the Claims Bar Date -- the
deadline by which creditors must file their proofs of claims.
The Debtors also want to fix bar date for all governmental units
at March 6, 2003.

The Debtors point out that establishing Bar Dates will help to
ensure that the Debtors' chapter 11 plan can be implemented
fairly -- using better estimates for total liabilities.  A Dec.
16 deadline provides all creditors ample time to prepare and
file their claims, the Debtors suggest.

Holders of:

  i) administrative claims of professionals retained pursuant to
     a Court order,

ii) claims arising from goods or services provided to the
     Debtors subsequent to the Petition Date, and

iii) claims for which specific deadlines are fixed by the Court.

are excluded from the Bar Date.  

The Debtors will publish notice of the Bar Date in the Los
Angeles Times and the national edition of The Wall Street
Journal.  Furthermore, the Debtors assure the Court that they
will file the Schedules of Assets and Liabilities and Statements
of Financial Affairs on or before November 6, 2002.  
Accordingly, the proposed Bar Date will provide more than 45
days after the filing of the Debtors' Statements and Schedules.

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.


PLAINS ALL AMERICAN: Closes Financing Pacts to Augment Liquidity
----------------------------------------------------------------    
Plains All American Pipeline, L.P., (NYSE: PAA) recently
completed several transactions designed to enhance the
Partnership's financial position, augment its liquidity and
financial flexibility and position it for future growth:
    
    -- In July, the Partnership amended its senior secured
       credit facilities to enable it to increase the size of
       its Letter of Credit and Hedged Inventory Facility by
       $150 million and also extend the maturity of that   
       facility to April 2005;
    
    -- In August, the Partnership completed a public offering of
       6,325,000 common units, raising net proceeds of
       approximately $145 million; and
    
    -- In September, the Partnership completed a private
       offering of $200 million of senior notes due 2012 raising
       net proceeds of approximately $196 million.
    
"These past three months have been extremely active for the
Partnership," said Greg L. Armstrong, Chairman and Chief
Executive Officer of the Partnership.  "In that time period, we
completed the acquisition of Shell's West Texas business units,
continued to execute our financial growth strategy by completing
these financing transactions under less than optimum market
conditions, and obtained upgrades or were placed on positive
credit watch by each of the ratings agencies."  Armstrong noted
that in September, Moody's Investors Service upgraded the
Partnership's senior implied credit rating to Ba1 (stable
outlook), while Standard & Poor's reiterated the Partnership's
BB corporate credit rating and had in June placed the
Partnership on CreditWatch with positive implications.

"With over $400 million of immediate liquidity available under
our revolving credit facilities, we believe we are well-
positioned to take advantage of one of the most attractive
acquisition markets in recent history."  As of the end of the
third quarter, the Partnership estimates that it will have
approximately $15 million outstanding on its $450 million of
revolving credit facilities that mature in 2005, approximately
$297 million of senior secured term loans with final maturity
dates in 2006 and 2007 and $200 million of Senior Notes which
mature in 2012.

Plains All American Pipeline, L.P., is engaged in interstate and
intrastate crude oil transportation, terminalling and storage,
as well as crude oil gathering and marketing activities,
primarily in Texas, California, Oklahoma, Louisiana and the
Canadian Provinces of Alberta, Saskatchewan and Manitoba. The
Partnership's common units are traded on the New York Stock
Exchange under the symbol "PAA".  The Partnership is
headquartered in Houston, Texas.

                         *   *   *

As previously reported, Standard & Poor's Ratings Services
assigned its double-'B' rating to Plains All American Pipeline
L.P.'s $150 million senior unsecured notes due 2012. In
accordance with Standard & Poor's criteria on notching for
unsecured debt, the notes are rated one notch lower than Plains
All American's corporate credit rating because of the
substantial amount of secured bank debt the partnership has
outstanding.

Ratings on Plains All American remain on CreditWatch, where they
were placed with positive implications on June 27, 2002,
following the announcement by its 29% owner Plains Resources
Inc., of its plans to restructure.


PSINET: Goldin Resolved Dispute over Metamor Stock Sale to CIBER
----------------------------------------------------------------
The closing of transactions for the sale of the Industry
Solutions Stock by the Debtors, both PSINet, Inc., entities and
Consulting, to CIBER occurred on October 15, 2001.

Prior to September 2001, PSINet and Consulting directly or
indirectly owned the stock of Metamor Industry Solutions, Inc.
and its wholly owned subsidiary, Metamor Government Solutions,
Inc.  The Industry Solutions Entities were engaged in the
business of providing consulting services principally to state
and local government agencies.

The Stock Purchase Agreement provides for certain amounts to be
held in escrow pursuant to the Escrow Agreement by and among
Consulting, CIBER and Wells Fargo Bank, the escrow agent.

After the sale, certain final closing balance sheet adjustment
issues arose between the Trustee and CIBER, particularly with
respect to the disposition of $1,920,840.00 being held in escrow
as of July 1, 2002.

After negotiations, the Trustee and CIBER agreed to resolve all
disputes arising out of, or related to, the Sale Transaction
Agreements and the Escrow Agreement.  The parties were able to
obtained the Court's approval of their Settlement Agreement.

             Salient Terms of the Settlement Agreement

a. The Escrow Amount will be distributed:

         * $875,003.35 to CIBER,
         * $50,000.00 retained in escrow, and
         * the balance (Escrow Balance) to Consulting;

b. Indemnification

   Consulting agrees to defend the litigation captioned Price
   McNabb v. PSINet Consulting Solutions. Inc., Case No. 00-CV-
   570(MU) now pending in the United States District Court for
   the District of North Carolina, and to indemnify CIBER with
   respect to any and all liabilities arising in, or related to
   the Price McNabb Litigation including reasonable attorneys'
   fees and other costs of defense against the Price McNabb
   Litigation.

   However, Consulting will not be liable for any liabilities
   under the Settlement Agreement in excess of $50,000 (the
   Cap). Besides, Consulting will not be liable to CIBER for any
   Liabilities unless written notice of the incurrence of
   Liabilities has been received by Consulting prior to the Cut-
   Off Date.  The Cut-Off Date means the earliest of:

       (i) October 15, 2003;

      (ii) the effective date of a plan of confirmation in
           Consulting's Chapter 11 Case;

     (iii) in the event that Consulting's case is converted into
           a proceeding under Chapter 7, the date of final
           distribution under that plan;

      (iv) the bar date under Consulting's Chapter 11 Case in
           the event that Price McNabb has failed to submit a
           claim following receipt of notice; and

       (v) the date that CIBER receives written notice that
           Price McNabb has acknowledged that Consulting and/or
           one or more of its wholly owned subsidiaries is the
           sole proper defendant in the Price McNabb Litigation.

   CIBER will have an administrative claim under Section 507(b)
   of the Bankruptcy Code to the extent that any indemnification
   obligation under the Settlement Agreement remains due and
   payable as of the Cut-Off Date, but only to the extent of the
   Cap, less amounts previously paid under Consulting's
   indemnification obligation under the Settlement Agreement;

c. Consulting agrees to cooperate with CIBER in connection with
   CIBER's election under section 338(h)(10) of the Internal
   Revenue Code including, to execute Form 8023-Elections Under
   Section 338 For Corporations Making Qualified Stock
   Purchases, in accordance with the terms of Section 10.6 of
   the Stock Purchase Agreement;

d. CIBER agrees to provide to Consulting reasonable access to
   its records, and to former Metamor employees currently
   employed by CIBER, concerning receivables owing to Consulting
   arising out of the Master Services Agreement between
   Consulting and General Electric Capital Corporation, provided
   that CIBER will not be required to incur any material expense
   in doing so.

   CIBER acknowledges that:

     (i) no receivables in respect of the Master Services
         Agreement were transferred pursuant to the Sale
         Transaction Agreements, and

    (ii) neither CIBER nor any of its direct or indirect
         subsidiaries claims any interest in any of the accounts
         receivable;

e. The Parties release each other from any causes of action or
   liabilities arising from the Sale Transaction and the
   Settlement Agreement.

The Trustee notes that, absent this Settlement Agreement, CIBER
would have been entitled to require that $600,000 of escrowed
funds be retained in escrow.  With the Settlement Agreement,
this is reduced to $50,000.  It also creates certainty that
CIBER will not claim entitlement to funds in excess of the
$50,000 retained in escrow.  Besides, the Settlement Agreement
resolves all disputes between the Trustee and CIBER with respect
to the Sale Transaction Agreements and the Escrow Agreement,
thus avoiding possible protracted litigation. (PSINet Bankruptcy
News, Issue No. 28; Bankruptcy Creditors' Service, Inc.,
609/392-0900)   

PSINET Inc.'s 11% bonds due 2009 (PSIX09USS1), DebtTraders
reports, are trading at 10 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=PSIX09USS1
for real-time bond pricing.


SAKS: Consolidating Younkers Ops. into Carson Pirie Headquarters
----------------------------------------------------------------
In order to streamline its organizational structure and reduce
overhead expenses, retailer Saks Incorporated (NYSE:SKS) plans
to consolidate its Younkers' home office operations into its
Carson Pirie Scott headquarters. The consolidation is scheduled
for completion in the fiscal fourth quarter ending February 1,
2003.

The merchandising, advertising/marketing, and various support
functions of the 50-unit, Des Moines, Iowa-based Younkers
division will be absorbed into the 96-unit, Milwaukee,
Wisconsin-based Carson Pirie Scott division. This division
currently operates stores under the Carson Pirie Scott, Boston
Store, Bergner's, and Herberger's nameplates. The majority of
Younkers stores will continue to operate under the Younkers
nameplate. In certain markets, store names may be changed where
nameplates overlap.

"The planned Younkers consolidation is a result of a thorough
review of our organizational structure," commented George Jones,
President and Chief Executive Officer of Saks Department Store
Group. "This action will strengthen our management focus,
enhance our competitive cost structure, and increase
productivity, while still allowing us to customize our
merchandise offerings and services to specific markets
consistent with our ``hometown' strategy."

Jones continued, "While this is a good business decision, it was
certainly a difficult one to make. We are very appreciative of
the service, dedication, and many contributions of the Younkers
team. We know this is a challenging time for the associates who
are being affected. We are committed to offering these
associates other opportunities within the organization where
appropriate and to ensuring that all associates are treated
fairly and provided assistance during this time of transition."

The consolidation will eliminate approximately 270 positions at
the Younkers home office in Des Moines and a total of
approximately 25 positions in Younkers' furniture warehouse and
in Younkers' distribution center, both located in Green Bay,
Wisconsin. Associates who are affected by this action who do not
take new opportunities within the Company will be offered
appropriate severance packages, outplacement services, and other
transition assistance.

Jones also noted, "We remain very committed to Younkers'
hometown of Des Moines and home state of Iowa, and we will
continue our support of the many charitable organizations and
philanthropic causes supported by Younkers. We will still have a
very meaningful presence in Des Moines and in the state, with
over 1,200 associates serving the four Des Moines area stores
and more than 3,000 associates serving our nineteen Younkers
locations throughout Iowa."

Management expects this restructuring will reduce operating
expenses by approximately $12 million (pre-tax) annually,
beginning in 2003. Charges relating to the consolidation
primarily will relate to severance and property write-offs and
are expected to total approximately $10 million (after-tax). The
majority of the charges will be cash charges for severance and
will be incurred in the fourth quarter of 2002.

Saks Incorporated operates Saks Department Store Group (SDSG)
with 243 department stores under the names of Parisian,
Proffitt's, McRae's, Younkers, Herberger's, Carson Pirie Scott,
Bergner's, and Boston Store. The Company also operates Saks
Fifth Avenue Enterprises, which consists of 61 Saks Fifth Avenue
stores and 52 Saks Off 5th stores.

                              *    *    *

As reported in Troubled Company Reporter's July 30, 2002
edition, Fitch Ratings affirmed its 'BB+' rating of Saks
Incorporated's $700 million bank facility and its 'BB-' rating
of the company's senior notes. Approximately $1.2 billion of
senior notes are affected by the action, which follows Saks'
announcement that it has agreed to sell its credit card
receivables to Household International. The Rating Outlook
remains Negative.

The ratings reflect Saks' solid position within its markets
balanced against its weak operating results and high financial
leverage. Saks' operations have been pressured by soft apparel
sales and growing competition from specialty and discount
retailers.


SCIENTIFIC LEARNING: Names Jill Rutter Vice Pres. of Operations
---------------------------------------------------------------
Jill Rutter has joined Scientific Learning Corporation (OTCBB:
SCIL) as officer and vice president of operations. Previously,
Ms. Rutter was vice president of professional and technical
services for NCS Learn, a provider of educational software for
the K-12 school market. NCS Learn is a unit of Pearson
Education.  

Ms. Rutter brings to Scientific Learning more than two decades
of experience in the educational software business, including
leadership and direction in educational consulting, technical
services, and customer support to school districts nationwide.
She has a consistent track record of creating successful,
innovative offerings, using a combination of internal,
technology-based services and contract services, while
simultaneously growing revenue, improving profit, and increasing
customer satisfaction.  

Robert C. Bowen, Chairman and Chief Executive Officer of
Scientific Learning, said, "Jill brings to us substantial
experience, allowing us to build on our current foundation. She
has proven ability to manage teams as well as develop and grow
profitable professional service and support organizations, while
maintaining extremely high customer satisfaction. Jill will also
work closely with Sherrelle Walker, our Chief Education Officer,
to ensure that Fast ForWord(R) products meaningfully connect
with classroom teachers and increase the number of students
served."  

Ms. Rutter began her career as an elementary and middle school
teacher and was a master of teacher training for her school
district. She holds a bachelor of science in elementary
education and a bachelor of science in special education and
learning disabled K-12 from the University of Arizona.  

Headquartered in Oakland, CA, Scientific Learning (OTCBB: SCIL)
sells the Fast ForWord(R) patented family of products, which
develop and enhance cognitive abilities critical to language and
reading for learners of all ages. Significant gains are
frequently achieved in as few as 20 to 40 instructional
sessions. To learn more about Scientific Learning's
neuroscience-based products, visit the Company's Web sites at
http://www.ScientificLearning.comand  
http://www.BrainConnection.comor call toll-free 888-665-9707.   

At June 30, 2002, Scientific Learning Corp.'s total
shareholders' equity deficit reaches a little over $5 million,
and its working capital deficit tops $4 million.


SLI INC: Seeks Nod to Sign-Up Skadden Arps as Bankruptcy Counsel
----------------------------------------------------------------
SLI, Inc., along with its debtor-affiliates, requests authority
from the U.S. Bankruptcy Court for the District of Delaware to
employ and retain Skadden, Arps, Slate, Meagher & Flom LLP and
its affiliated law practice entities as counsel.

The Debtors will look to Skadden Arps to:

  a) advise the Debtors with respect to their powers and duties
     as debtors and debtors-in-possession in the continued
     management and operation of their businesses and
     properties;

  b) attend meetings and negotiate with representatives of
     creditors and other parties in interest and advise and
     consult on the conduct of the case, including all of the
     legal and administrative requirements of operating in
     chapter 11;

  c) take all necessary action to protect and preserve the
     Debtors' estates, including the prosecution of actions on
     their behalf, the defense of any actions commenced against
     those estates, negotiations concerning all litigation in      
     which the Debtors may be involved and objections to claims
     filed against the estates;

  d) prepare on behalf of the Debtors all motions, applications,
     answers, orders, reports and papers necessary to the
     administration of the estates;

  e) negotiate and prepare on the Debtors' behalf plan(s) of
     reorganization, disclosure statement(s) and all related
     agreements and/or documents and take any necessary action
     on behalf of the Debtors to obtain confirmation of such
     plan(s);

  f) advise the Debtors in connection with any sale of assets;

  g) appear before this Court, any appellate courts, and the
     U.S. Trustee, and protect the interests of the Debtors'
     estates before such courts and the U.S. Trustee; and

  h) perform all other necessary legal services and provide all
     other necessary legal advice to the Debtors in connection
     with these chapter 11 cases.

Under an Engagement Agreement, Skadden Arps and the Debtors
agree that Skadden Arps' bundled rate structure will apply to
these chapter 11 cases and, therefore, Skadden, Arps will not be
seeking to be separately compensated for certain staff,
clerical, and resource charges for which it previously charged.
Presently, the hourly rates under the bundled rate structure
range from:

     partners and of-counsel              $480 to $695 per hour
     associates and counsel               $265 to 470 per hour
     legal assistants and support staff   $80-160 per hour

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.


SOFTCHOICE CORP: Commences Trading on Toronto Stock Exchange
------------------------------------------------------------
Softchoice Corporation (TSX: SO), a premier North American
software and hardware direct marketer, announced that the
Company's common shares have been listed and posted for trading
on the Toronto Stock Exchange, Canada's senior stock exchange
effective Tuesday, October 1, 2002.

Softchoice's common shares have been delisted from the TSX
Venture Exchange, but the Company will maintain the same trading
symbol "SO" on the TSX.

"Softchoice initially became a public company through a reverse
take-over in May 2002, thereby obtaining a listing on the TSX
Venture Exchange," said David MacDonald, President, Softchoice
Corporation. "Our game plan was then to make the move to the
more senior exchange and we are extremely pleased by the quick
migration, as the TSX is a more suitable exchange for Softchoice
given our profile in terms of revenues and profits."

Softchoice recently reported revenues of $152.3 million and net
income of $4.8 million for its second quarter in 2002. Complete
financial results are available on http://www.sedar.com  

Softchoice provides businesses and organizations of all sizes
with a fast, flexible, and cost-effective way to research, buy
and manage their software and hardware technology resources.
Softchoice is a single source for a vast selection of industry
leading technology brands -- offering more than 200,000 software
titles and a wide range of IT hardware products. Softchoice
delivers exceptional service through a network of highly trained
outbound sales and customer service representatives, technical
product specialists, licensing experts, eBusiness tools and
strategic partnerships with leading technology manufacturers.
Headquartered in Toronto, Softchoice currently has 32 branches
in operation with 27 branches located in the U.S. and five
branches in Canada. Visit Softchoice at
http://www.softchoice.com


SPINNAKER INDUSTRIES: Lynch Transfers Shares to a Brokerage Firm
----------------------------------------------------------------
Lynch Corporation has transferred all of its remaining
shareholdings in Spinnaker Industries, Inc., to an independent,
international brokerage firm in New York City.  The transfer was
made on September 23, 2002, without consideration because Lynch
Corporation determined that the Spinnaker shares have no value,
as a result of Spinnaker's on-going reorganization under Chapter
11 of the bankruptcy code.

As a result of this transfer, Lynch Corporation will record a
$19,420,000 non-cash gain and consequently an increase in
shareholders' equity of $19,420,000 in the third quarter of
calendar-fiscal 2002.  This action will increase Lynch
Corporation's total shareholder equity to approximately $11
million for the third quarter of 2002 from a deficit of
$7,615,000 on June 30, 2002.

Lynch Corporation is listed on the American Stock Exchange under
the symbol LGL.  For more information on the company, contact
Raymond H. Keller, Vice President and Chief Financial Officer,
Lynch Corporation, 50 Kennedy Plaza, Suite 1250 Providence, RI
02903-2360, (401) 453-2007, ray.keller@lynch-mail.com, or visit
the company's Web site at http://www.lynchcorp.com


STERLING BANCSHARES: Fitch Assigns BB+ Rating to $31-Mill. Trust
----------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to the $31.3 million
Sterling Bancshares Capital Trust III. The Rating Outlook is
Positive.

SBIB's ratings are based on the company's strong niche serving a
well-defined customer base of owner/operator businesses in
Texas. While concentrated in Houston, the company has focused on
diversifying into the key markets of San Antonio and Dallas
through acquisitions and de novo branching. Overall performance
is characterized by elevated, yet generally stable chargeoffs
reflective of the higher risk lending to small businesses.
Strong margins compensate for asset quality and have contributed
to stable returns. Capital has been adversely impacted by
acquisitions, and remains a constraining factor to ratings.

SBIB issued earlier in September 2002 $20 million in trust
preferred through a private placement to fund the acquisition of
ENB Bankshares, Inc. and other general corporate purposes;
however, the company intends to use the net proceeds from the
issuance of Capital Trust III's securities to replace $28.8
million outstanding under Capital Trust I securities that were
issued in 1997. As a result, leverage and capital are not
expected to be materially impacted upon the completion of this
transaction.

                   Rating Assigned:

Sterling Bancshares Capital Trust III -- Trust preferred 'BB+'.


SUNBEAM: Court to Consider Disclosure Statement on Oct. 4, 2002
---------------------------------------------------------------
On September 5, 2002, Sunbeam Americas Holdings, Ltd., and its
debtor-affiliates filed their Third Amended Chapter 11
Reorganization Plan, along with a corresponding Disclosure
Statement pursuant to Section 1125 of the Bankruptcy Code.   

The U.S. Bankruptcy Court for the Southern District of New York
will convene a hearing to consider the approval of the Proposed
Disclosure Statement for October 4, 2002, at 9:00 a.m.  The
Honorable Arthur J. Gonzalez presides over Sunbeam's chapter 11
cases.  

Sunbeam Corporation, the largest manufacturer and distributor of
small appliances, sells mixers, coffeemakers, grills, smoke
detectors, toasters and outdoor & camping equipment in the
United States, filed for chapter 11 protection on February 6,
2001 in the Southern District of New York. Lori R. Fife, Esq.,
and George A. Davis, Esq., of Weil Gotshal & Manges LLP,
represent the Debtors in their restructuring effort. As of
filing date, the company listed $2,959,863,000 in assets and
$3,201,512,000 in debt.


SUNBEAM: Court Extends Exclusive Periods Until December 15, 2002
----------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the Southern District
of New York, Sunbeam Americas Holdings, Ltd. and its debtor-
affiliates obtained an extension of their exclusive periods.  
The Court gives the Debtors until December 15, 2002 the
exclusive right to file their plan of reorganization and to
solicit acceptances of that Plan.

Sunbeam Corporation, the largest manufacturer and distributor of
small appliances, sells mixers, coffeemakers, grills, smoke
detectors, toasters and outdoor & camping equipment in the
United States, filed for chapter 11 protection on February 6,
2001 in the Southern District of New York. George A. Davis,
Esq., of Weil Gotshal & Manges LLP, represents the Debtors in
their restructuring effort. As of filing date, the company
listed $2,959,863,000 in assets and $3,201,512,000 in debt. In
their June 30, 2002 form 8-K report filed with SEC, the Debtors
account $1,594,787,000 in assets and $2,498,065,000 in
liabilities.


TCW LINC: S&P Puts BB- Classes A-3A & A-3B on Watch Negative
------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on the
class A-1F, A-1, A-2L, A-2, A-3A, and A-3B notes issued by TCW
LINC III CBO Ltd., an arbitrage CBO transaction originated in
July of 1999, on CreditWatch with negative implications.

At the same time, the triple-'A' rating assigned to the class A-
1L notes is affirmed. The ratings assigned to the class A-2L, A-
2, A-3A, and A-3B notes were previously lowered on June 10,
2002.

The CreditWatch placements reflect factors that have negatively
affected the credit enhancement available to support the notes
since the June 10, 2002 rating action was undertaken. These
factors include erosion of the par value of the collateral pool
securing the rated notes and deterioration in the credit quality
of the performing assets within the pool.

Standard & Poor's noted that, as a result of asset defaults and
sales of credit risk assets at distressed prices, the par value
of the collateral pool has deteriorated since the previous
rating action. As of the most recent available monthly report
(Sept. 17, 2002), the class A overcollateralization ratio was
108.97%, versus a minimum required ratio of 110.0% and a ratio
of approximately 113% at the time of the June 2002 rating
action.

The credit quality of the collateral pool has also deteriorated.
According to the Sept. 17, 2002 monthly report, three of the
transaction's five required ratings distribution tests are
failing. Currently, 30.3% of the performing assets in the
collateral pool come from obligors rated single-'B'-plus or
higher (versus the minimum required 36%), 45.9% come from
obligors rated single-'B' or higher (versus the minimum required
73%), and 58.3% come from obligors rated single-'B'-minus or
higher (versus the minimum required 95%).

Standard & Poor's will be reviewing the results of current cash
flow runs generated for TCW LINC III CBO Ltd., to determine the
level of future defaults the rated tranches can withstand under
various stressed default timing and interest rate scenarios,
while still paying all of the interest and principal due on the
notes. The results of these cash flow runs will be compared to
the projected default performance of the performing assets in
the collateral pool to determine whether the ratings currently
assigned to the notes remain consistent with the credit
enhancement currently available.

               Ratings Placed On Creditwatch Negative

                       TCW LINC III CBO Ltd.

                   Rating
     Class    To               From     Current Balance (Mil. $)
     A-1F     AAA/Watch Neg    AAA      15.00
     A-1      AAA/Watch Neg    AAA      96.00
     A-2L     A+/Watch Neg     A+       21.50
     A-2      A+/Watch Neg     A+       82.00
     A-3A     BB-/Watch Neg    BB-      34.00
     A-3B     BB-/Watch Neg    BB-      45.00

                         Rating Affirmed

                       TCW LINC III CBO Ltd.

     Class    Rating    Current Balance (Mil. $)
     A-1L     AAA       126.00


TEMPLETON EMERGING: Completes Reorganization into a New Trust
-------------------------------------------------------------
Templeton Emerging Markets Appreciation Fund, Inc., (NYSE:TEA) a
closed-end management investment company, announced the
completion of its reorganization into Templeton Developing
Markets Trust, a registered open-end management investment
company. In accordance with the Agreement and Plan of
Acquisition between the Fund and Developing Markets Trust,
Developing Markets Trust acquired substantially all of the
assets of the Fund in exchange solely for shares of Developing
Markets Trust-Advisor Class to be distributed to the Fund's
shareholders.

The transaction, which is a tax-free reorganization, was
effective as of the close of business on September 26, 2002.
Trading of the Fund's shares on the NYSE was suspended after the
close of business on September 26, 2002. The Fund's shareholders
are entitled to receive shares of Developing Markets Trust-
Advisor Class having the same aggregate net asset value as their
shares of the Fund held on September 26, 2002. The exchange of
shares was based on each fund's relative net asset value per
share as of the close of business on September 26, 2002. For six
months following the reorganization, former Fund shareholders
who redeem their Advisor Class shares of Developing Markets
Trust received in the reorganization, will pay a 2% redemption
fee. Questions regarding the exchange of shares in connection
with the reorganization should be directed to Mellon Investor
Services, LLC, the Exchange Agent, toll-free at 1-800-777-3674.

Templeton Asset Management Ltd., the investment adviser for the
Fund and Developing Markets Trust, is an indirect wholly owned
subsidiary of Franklin Resources, Inc. (NYSE:BEN), a global
investment organization operating as Franklin Templeton
Investments. Franklin Templeton Investments provides global and
domestic investment management services through its Franklin,
Templeton, Mutual Series and Fiduciary Trust subsidiaries. The
San Mateo, CA-based company has over 50 years of investment
experience and more than $259 billion in assets under management
as of August 31, 2002. For more information, please call 1-
800/DIAL BEN(R) (1-800-342-5236).

                         *    *    *

As reported in Troubled Company Reporter's August 29, 2002
edition, Templeton Emerging Markets Appreciation Fund, Inc.'s
shareholders, at the August 26 meeting, approved an Agreement
and Plan of Acquisition between the Fund and Templeton
Developing Markets Trust. The Agreement provided for the
acquisition of substantially all of the assets of the Fund by
Developing Markets Trust in exchange solely for shares of
Developing Markets Trust-Advisor Class, the distribution of
these shares to the Fund's shareholders, and the complete
liquidation and dissolution of the Fund.


TEMPLETON VIETNAM: Completes Reorg. into Developing Market Trust
----------------------------------------------------------------
Templeton Vietnam and Southeast Asia Fund, Inc., (NYSE:TVF) a
closed-end management investment company, announced the
completion of its reorganization into Templeton Developing
Markets Trust, a registered open-end management investment
company. In accordance with the Agreement and Plan of
Acquisition between the Fund and Developing Markets Trust,
Developing Markets Trust acquired substantially all of the
assets of the Fund in exchange solely for shares of Developing
Markets Trust-Advisor Class to be distributed to the Fund's
shareholders.

The transaction, which is a tax-free reorganization, was
effective as of the close of business on September 26, 2002.
Trading of the Fund's shares on the NYSE was suspended after the
close of business on September 26, 2002. The Fund's shareholders
are entitled to receive shares of Developing Markets Trust-
Advisor Class having the same aggregate net asset value as their
shares of the Fund held on September 26, 2002. The exchange of
shares was based on each fund's relative net asset value per
share as of the close of business on September 26, 2002. For six
months following the reorganization, former Fund shareholders
that redeem their Advisor Class shares of Developing Markets
Trust received in the reorganization will pay a 2% redemption
fee. Questions regarding the exchange of shares in connection
with the reorganization should be directed to Mellon Investor
Services, LLC, the Exchange Agent, toll-free at 1-800-777-3674.

Templeton Asset Management Ltd., the investment adviser for the
Fund and Developing Markets Trust, is an indirect wholly owned
subsidiary of Franklin Resources, Inc. (NYSE:BEN), a global
investment organization operating as Franklin Templeton
Investments. Franklin Templeton Investments provides global and
domestic investment management services through its Franklin,
Templeton, Mutual Series and Fiduciary Trust subsidiaries. The
San Mateo, CA-based company has over 50 years of investment
experience and more than $259 billion in assets under management
as of August 31, 2002. For more information, please call 1-
800/DIAL BEN(R) (1-800-342-5236).

                            *   *   *
As reported in Troubled Company Reporter's August 30, 2002
edition, Templeton Vietnam and Southeast Asia Fund, Inc.'s
shareholders approved, at August 27 meeting, an Agreement and
Plan of Acquisition between the Fund and Templeton Developing
Markets Trust. The Agreement provided for the acquisition of
substantially all of the assets of the Fund by Developing
Markets Trust in exchange solely for shares of Developing
Markets Trust-Advisor Class, the distribution of these shares to
the Fund's shareholders, and the complete liquidation and
dissolution of the Fund.


TEXAS PETROCHEMICALS: S&P Hatchets BB- Corp. Credit Rating to B
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Texas Petrochemicals Corp., to single-'B' from double-
'B'-minus and its subordinated debt rating to triple-'C'-plus
from single-'B', citing the specialty chemicals company's
negative financial results and increased refinancing risk. At
the same time, Standard & Poor's placed all ratings on
CreditWatch with negative implications. The Houston, Texas-based
company had about $323 million in total debt outstanding as of
June 30, 2002.

"The ratings downgrade and CreditWatch placement reflect
deterioration in the company's credit profile and heightened
concerns regarding the refinancing of the company's bank credit
facility, which matures on December 31, 2002," said Standard &
Poor's credit analyst Franco DiMartino. Disappointing operating
results and challenging industry conditions, and restrictive
capital markets have made the task of refinancing the credit
line more difficult. The CreditWatch placement highlights the
importance of obtaining a line of credit and the increased risk
of default if the company is unable to refinance its bank debt
beyond the expiration of the current credit agreement. The
current ratings incorporate the expectation that this process
will be completed in a timely fashion.

Profitability and cash flow have been negatively impacted by
higher raw material costs and weaker pricing in key product
lines, and several recent operational disruptions at the
company's sole manufacturing facility in Houston. The shortfall
in earnings, reflected by operating margins and funds from
operations to total debt in the mid-single-digit area, will make
it more difficult for the company to strengthen credit
protection measures in the near term. Future demand for methyl
tertiary-butyl ether, which is subject to legislative bans,
could begin to decline as some gasoline refiners and retailers
curtail their usage of the product ahead of these legislative
mandates. In addition, the company faces significant costs
required to reduce the emissions of nitrogen oxide at its
manufacturing facility as mandated by clean air legislation and
substantial capital expenditures that will be needed to convert
production assets currently used for MTBE to other products.
Together, these costs could prove to be a significant drain on
operating cash flow, which will make the reduction of the
company's sizable debt burden more difficult over the
intermediate term. Texas Petrochemicals is the largest North
American merchant producer of butadiene and specialty butylene
chemicals, which are key ingredients for synthetic and specialty
rubber, plastics, lubricant additives and coatings. The company
also is the third-largest producer of MTBE, a commodity gasoline
additive used as an oxygenate in clean-burning fuels and as an
octane enhancer.


TEXON INT'L: Ad Hoc Committee Agrees to Recapitalization
--------------------------------------------------------
Texon International Limited announced that, following
discussions with an ad hoc committee of holders of the DM 245
million Senior Notes of the Company due 2008, the Company has
finalized the terms of a recapitalization of the Company.

Holders of over 74% of the Senior Notes have committed to
support the Recapitalization, subject to certain conditions. The
Recapitalization will be implemented by means of a scheme of
arrangement under Section 425 of the English Companies Act 1985,
a process voluntarily initiated by the Company.

The Board of Directors of the Company has approved the terms of
the Recapitalization, which would eliminate the debt burden
associated with EUR 93,949,883 of outstanding Senior Notes which
are to be converted to equity under the Recapitalization,
reducing the Company's interest expense on the Senior Notes to
EUR 3,131,663 a year.

               Details of the Recapitalization

The Recapitalization provides that 75% of the outstanding Senior
Notes, 50% of the coupon that fell due for payment in August
2002 and is presently unpaid, any interest on such overdue
interest, and 75% of the accrued interest on the Senior Notes
between 1 August 2002 and the date the Recapitalization becomes
effective, will be exchanged for ordinary and redeemable
preference shares in the Company. Upon completion of the
Recapitalization, the holders of Senior Notes will own 90% of
the share capital of the Company and the Consenting Noteholders
will be entitled to appoint three or more directors to the
Board, who will then constitute a majority of the Board.

The residual 25% of the outstanding Senior Notes will remain in
place subject to certain amendments to their terms, including an
extension of the final redemption date for the remaining Senior
Notes to 1 February 2010, and to provide that the Company will
be allowed to redeem the remaining Senior Notes at any time
after the Scheme has taken effect. 50% of the August Coupon will
be paid by the Company within 90 days of the Recapitalization
becoming effective.

The proposed Recapitalization will involve exclusively the
Company, which is the holding company for the Texon Group's
operations world-wide. None of the Company's operating
subsidiaries in the United Kingdom or internationally would be
involved in the Recapitalization. The claims of trade creditors
and other vendors to the Company and its operating subsidiaries
will be unaffected by the proposed Recapitalization.

Noteholders will also have the option to elect to receive from
the Company a cash payment of EUR 90 per EUR 1,000 in face value
of Senior Notes held, instead of shares. The cash payment will
be funded by MatlinPatterson Global Opportunities Partners LP,
the largest Noteholder, who will subscribe for new shares in the
Company for a total monetary value, including the appropriate
share premium, equal to the cash payment to be made by the
Company.

The successful implementation of the Scheme is subject to a
number of conditions being satisfied. The main conditions are
(i) approval of the Scheme by a majority in number and 75% in
value of the voting holders of Senior Notes, (ii) the subsequent
sanctioning of the Scheme by the High Court in London, (iii) the
approval of resolutions required to implement the Scheme by the
shareholders of the Company, (iv) the entering into by certain
of the Company's main operating subsidiaries of an amended
credit facility agreement on terms satisfactory to the
Committee, (v) obtaining a court order in New York recognizing
the effect of the Scheme, and (vi) no material adverse change
having occurred.

The Company's Board believes that, in the absence of the
proposed Recapitalization, the Company will not be in a position
to meet its financial obligations under the Senior Notes. The
Company was due to pay the August Coupon on 1 August 2002 but
has not yet made this payment. The grace period of 30 days has
expired and therefore an event of default has occurred pursuant
to Section 6.01 of the Indenture governing the Senior Notes. In
addition, Texon Australia Pty Limited, a subsidiary of the
Company is in default of a facility agreement with National
Australia Bank Limited. The Company has guaranteed Texon
Australia's obligations to NAB. The Board believes that after 30
September 2002, it is open to NAB to take action against Texon
Australia and under the Company's guarantee at any time.

Against this background, the Board believes that the
Recapitalization is the best alternative available to the
Company to ensure its continuity and, once the process is
implemented, to allow the Company to emerge as a going concern.
Over the last 18 months the Company has been operating under
payment plans with a number of its suppliers and, as at 25
September 2002, had payment plans in place with 10 suppliers.
The Company believes that, upon completion of the
Recapitalization, it will be able to resume normal payment
terms.

Commenting on the terms of the Recapitalization, the Company's
Chief Executive, Peter Selkirk, said: "We are very pleased to
have reached this binding agreement with the bondholder
committee. This step signals the start of the completion of the
restructuring process that we initiated at the start of the
year. The Recapitalization will significantly reduce our
interest burden and long term debt and will improve our
liquidity. Our customers, suppliers, partners and employees will
all greatly benefit from this recapitalization and I would like
to thank all of them for their continued support."

               Implementation of the Recapitalization

The Company has applied for a hearing before the High Court in
London, to be held on Friday, 4 October 2002. At this hearing,
the Company expects a date to be set for a meeting in London at
which the holders of Senior Notes will be asked to approve the
proposed Scheme. Under the terms of a Restructuring Agreement
entered into with the Company, holders of over 74% of the Senior
Notes have committed to vote in favor of the Scheme at the
meeting of the holders of the Senior Notes, subject to the
satisfaction of certain conditions.

Following the hearing, the Company's Board of Directors proposes
to send out written resolutions to shareholders in connection
with the Scheme. The Company has received undertakings from
shareholders accounting for at least 75% of each class of the
Company's existing issued share capital to vote in favor of the
resolutions.

If the terms of the Scheme are approved by the requisite
majority of the holders of the Senior Notes and the resolutions
put to shareholders are passed, the High Court will be asked to
sanction the Scheme. If the Scheme is sanctioned, it will become
binding on all holders of Senior Notes, provided that the
conditions contained in the Scheme have been satisfied. A
permanent injunction is expected to be obtained from the US
Bankruptcy Court under Section 304 of the US Bankruptcy Code
soon after the High Court sanctions the Scheme, so as to ensure
that the effect of the Scheme is recognized under US law. The
Company expects to close the Recapitalization by the first week
of November.

                    Post Restructuring Share Capital

Upon completion of the Recapitalization the Company's share
capital will be divided into four classes of shares: ordinary
shares, deferred shares, redeemable preference shares and non-
redeemable preference shares. The holders of Converting Notes
will receive an aggregate of 12,376,926 Preference Shares and
2,475,369 Ordinary Shares in exchange for their Converting
Notes. Each EUR 1,000 principal amount of Converting Notes will
be converted into 26.348 Ordinary Shares and 131.740 Preference
Shares, with all fractional entitlements being rounded down to
the nearest whole number. In aggregate the holders of Converting
Notes shall, upon completion of the Recapitalization, hold
approximately 90% of the Company's share capital.

The residual 10% of the post-Recapitalization shares of the
Company will be split between the existing shareholders and the
Company's CEO and CFO. The existing holders of the preferred
redeemable cumulative preference shares of (pound)1.00 each pre-
Recapitalization will hold 6.0% of the Shares after conversion
at a ratio of five Preference Shares to one Ordinary Share.

In addition, the existing shareholders, other than the CEO and
the CFO, will hold 2.0% of the Shares pro rata (giving effect to
dilution pursuant to the Recapitalization) to their pre-
Recapitalization equity holdings (excluding the Series II
Preference Shares) as follows:

     (i) existing shareholders, other than the CEO and the CFO,
who hold redeemable cumulative preference shares of (pound)1.00
each pre-Recapitalization will hold 1.98% of the Company's
shares after conversion at a ratio of five Preference Shares to
one Ordinary Share;

    (ii) existing shareholders, other than the CEO and the CFO,
who do not hold Series I Preference Shares pre-Recapitalization
will hold 0.02% of the Company's shares after conversion at a
ratio of five Non-redeemable Preference Shares to one Ordinary
Share; and

   (iii) the CFO and the CEO will each hold 1.0% of the
Company's shares after conversion at a ratio of five Non-
redeemable Preference Shares to one Ordinary Share.

To the extent that the pre-Recapitalization equity holdings of
existing shareholders need to be adjusted to effect the post-
Recapitalization equity structure, the surplus shares held by
Current Shareholders will become Deferred Shares. The Deferred
Shares carry no entitlement to vote or participate in the
profits of the Company and may be purchased by the Company at
any time.

The Redeemable Preference Shares and Non-redeemable Preference
Shares carry the same voting rights as the Ordinary Shares. The
Redeemable Preference Shares may be redeemed at the Company's
discretion or upon a listing, sale or liquidation.

In order to facilitate the Recapitalzation, the Company's
shareholders have agreed by way of written resolution to re-
register the Company as a private company limited by shares.
This resolution was passed on 20 September 2002 and the Company
was re-registered as a private limited company on 20 September
2002.

Advisors:

Talbot Hughes LLP are acting as financial advisers to the
Company on the recapitalization. Cadwalader, Wickersham and Taft
and Dickson Minto W.S. are acting as legal advisers to the
Company.

Bingham McCutchen LLP are acting as legal advisers to the
Committee. Numerica Business Services Limited are the financial
advisers to the Committee.

The Company recommends that holders of Senior Notes wishing to
obtain additional information regarding the terms of the
recapitalization contact the legal advisers to the Committee,
Bingham McCutchen LLP, on + 44 20 7661 5300 (attention: James
Roome and Ian Wenniger).

For further information, contact James Douglas at Cadwalader,
Wickersham & Taft, telephone +44 20 7170 8628, e-mail:
james.douglas@cwt-uk.com.

The Company believes that the Texon Group is the world's
largest, in terms of sales, manufacturer and marketer of
structural materials footwear that are essential in the
manufacture of footwear. It supplies over 7,500 customers in 90
countries, including most of the world's major footwear
manufacturers, with products from its fifteen manufacturing
sites strategically located in Europe, the United States,
Brazil, China and Australia.

As of 31 July 2002, the Company forecasted its EBITDA for the
year ending 31 December 2002 to be (pound)20.6 million based on
total sales of (pound)139 million. This is slightly below the
Company's January 2002 budget of EBITDA of (pound)21.6 million,
comprising EBIT of (pound)16.4 million and depreciation and
amortization of (pound)5.2 million, based on budgeted sales of
(pound)152 million.

The 2002 budget expected a net decrease in working capital of
(pound)1.0 million leading to expected cash flow from operations
for 2002 of (pound)22.6 million. The 2002 budget predicted
operating cash flow of (pound)19.3 million, and operating cash
flow after taxation ((pound)3.2 million) and servicing of
finance ((pound)10.5 million) of (pound)5.6 million. Following
completion of the Recapitalization, the Company expects to have
significantly reduced finance servicing costs.


TOTAL IMAGE: TSX Knocks Off Shares for Violating Requirements
-------------------------------------------------------------
Effective at the close of business October 1, 2002, the common
shares of Total Image Capital Corp., were delisted from TSX
Venture Exchange for failing to maintain Exchange Listing
Requirements.

The securities of the Company have been suspended in excess of
twelve months.


TRICORD SYSTEMS: Lunar Flare NAS Product Performance Jumps 80%
--------------------------------------------------------------
Tricord Systems, Inc. (Nasdaq:TRCDQ) -- developer of the
revolutionary Illumina(TM) clustering software and Lunar
Flare(TM) clustered server appliances -- announced an 80-percent
performance increase in its Lunar Flare NAS product line.

The significant performance jump in the Lunar Flare NAS 1200
platform --- from 110 mbs to 200 mbs in a four-appliance cluster
--- represents enhancements to just the Illumina clustering
software. Additional testing showed that four-appliance cluster
throughput exceeded 500 mbs when Illumina was configured on new
generation platforms. NetBench 7.01, an industry standard file
server benchmarking tool, was used for these tests.

"These performance enhancements allow Illumina-enabled NAS
appliances' to maintain a price/performance advantage by a
factor of two over the competition," said Bob Wilson, Tricord's
vice president of sales and marketing.

"After completing our major feature releases earlier this year,
Tricord has focused on performance tuning, logging significant
gains in the past six months," said Keith Thorndyke, president
and CEO of Tricord. "Our engineers are continuing to work toward
even more improvements. Pursuant to an agreement reached with
our creditors and preferred stockholder in our bankruptcy
proceedings, we have, subject to certain conditions, until
October 31 of this year to find a buyer or investor for the
company, and we believe that these improvements will assist us
in these efforts."

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(TM) 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


UAL CORP: S&P Slashes Series B Preferreds Rating to D from CC
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on UAL
Corp.'s (CCC/Watch Dev/--) 12.25% Series B preferred stock and
on the UAL Corp. Capital Trust I 13.25% trust originated
preferred securities to 'D' from double-'C'. Standard & Poor's
said its triple-'C' corporate credit ratings on UAL Corp. and
unit United Air Lines Inc. remain on CreditWatch with developing
implications, where they were placed on August 15, 2002.

"The rating action follows UAL's announcement [Mon]day that it
had suspended the Series B dividends and also deferred
subordinated debentures interest payments due December 31, 2002,
that are distributed by the UAL Corp. Capital Trust I as
preferred dividends," said Standard & Poor's credit analyst
Philip Baggaley.

United (CCC/Watch Dev/--) is in negotiations with its unions
regarding labor cost concessions as part of a financial
restructuring intended to help secure a $1.8 billion federal
loan guaranty and avoid a threatened bankruptcy filing. United
has $875 million of debt maturities in the fourth quarter, the
first $350 million of which falls due on November 17, that it
says it will be unable to pay without a financial restructuring.
A possible U.S. attack on Iraq, which would likely cause an
additional increase in fuel prices and a fall in airline
industry passenger traffic, further complicate United's near-
term financial outlook. Ratings could be raised if UAL and
United are able to secure a federal loan guaranty, or lowered if
that effort fails (in which case a bankruptcy filing would be
very likely).


US AIRWAYS: Receives Court's Blessing to Obtain Surety Bonds
------------------------------------------------------------
John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher &
Flom, informs Judge Mitchell that US Airways Group Inc., in the
ordinary course of business, is required to provide surety bonds
to secure the payment or performance of various obligations,
including: landing fees, real estate lease obligations, workers'
compensation obligations, and fuel expenses.

One of these bonds, issued to the U.S. Customs Service, is set
to expire on September 28, 2002.  The failure to replace these
bonds would jeopardize the Debtors' ability to conduct their
international operations.  Accordingly, the Debtors want to
ensure that this bond can be replaced.

In an emergency motion, the Debtors seek the Court's authority
to obtain surety bonds secured by cash collateral or other
collateral consisting of cash equivalents, and/or backed by
letters of credit, for a maximum of $16,000,000.

Prior to the Petition Date, the Debtors obtained surety bonds
from Travelers Casualty and Surety Company of America under
three related agreements:

   (1) General Contract of Indemnity dated August 31, 2001,

   (2) Collateralized Bond Surety Program Registered Pledge And
       Master Security Agreement dated September 4, 2001, and

   (3) Pledged Collateral Account Agreement dated August 30,
       2001.

As of the Petition Date, $12,000,000 in surety bonds were issued
and outstanding.  The surety bonds were fully collateralized by
$9,100,000 of cash collateral, which includes cash equivalents,
and $3,300,000 of letters of credit issued to Travelers.

The Debtors have been unable to obtain surety bonds on an
unsecured basis.  After reviewing their options, the Debtors
determined that ratification and continuation of the current
surety bond program with Travelers is their best option at
present.

As part of the consideration to Travelers to continue to issue
surety bonds to USAir, the Debtors agreed that the automatic
stay of Section 362 of the Bankruptcy Code should be lifted to
allow Travelers to liquidate the cash collateral, including cash
equivalents and letters of credit, to repay any obligations
under the Surety Documents.  By providing this relief in advance
of any surety bond being drawn upon, the obligations to
Travelers, including accrued interest and attorneys' fees and
costs incurred in filing a motion for relief from stay, will be
minimized.

                           *     *     *

Accordingly, Judge Mitchell grants the Debtors' request. (US
Airways Bankruptcy News, Issue No. 8; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

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.


USG CORP: Wants Deloitte & Touche to Render Additional Services
---------------------------------------------------------------
USG Corporation and its debtor-affiliates want Deloitte & Touche
to perform additional services aside from those covered by the
initial engagement, nunc pro tunc to August 10, 2002.

According to Paul N. Heath, Esq., at Richards Layton & Finger,
the Debtors want Deloitte to perform financial and tax due
diligence and related services after 2003.  However, the precise
term engagements cannot be determined now.  But the parties'
most recent Engagement Letter applies to the period of August
10, 2002 through December 31, 2003.

Mr. Heath reminds Judge Newsome that, in addition to agreements
identified in the Initial Application for Deloitte, the Debtors
may enter into financial and due diligence agreements, including
possible assistance with contract and financing issues pursuant
to and consistent with the initial Engagement Letter.

                    P.I. Committee Objects

The Official Committee of Asbestos Personal Injury Claimants
asks the Court to deny the Supplemental Application and the
underlying Engagement Letter in present form.  The P.I.
Committee contends that the compensation agreement is "arbitrary
and improper."  The P.I. Committee asserts that prior to payment
of any fee, Deloitte "must establish the reasonableness" of the
fee upon application to the Court.

                        *     *     *

Judge Newsome will convene a hearing on the Debtors' Application
on October 29, 2002 at 10:00 a.m. (USG Bankruptcy News, Issue
No. 34; Bankruptcy Creditors' Service, Inc., 609/392-0900)


USI HOLDINGS: S&P Keeping Watch on B+ Counterparty Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services' ratings on USI Holdings
Corp., including its single-'B'-plus counterparty credit rating,
are remaining on CreditWatch with developing implications
following a recent meeting with USI's senior management.

"After discussing capitalization plans with the company,
Standard & Poor's expects that the IPO will likely be completed
within the 90-day time frame that was expected when the ratings
were initially placed on CreditWatch," said Standard & Poor's
credit analyst Donovan Fraser. The ratings have been on
CreditWatch since August 2, 2002.

If the company successfully completes the IPO, Standard & Poor's
expects the company to pay down debt significantly, thereby
improving leverage and coverage substantially. Such improvements
could lead to an affirmation of existing ratings or a potential
one-notch upgrade. If the IPO is unsuccessful, the company's
high leverage, poor operating results, and history of having to
amend its bank-debt covenants to remain in compliance will
likely result in Standard & Poor's lowering the ratings by one
or two notches.


VIASYSTEMS GROUP: Files Chapter 11 Petition in S.D. New York
------------------------------------------------------------
Viasystems Group, Inc. (OTCBB:VSGI) announced that it has filed
a voluntary petition for reorganization under Chapter 11 of the
U.S. Bankruptcy Code in order to achieve final approval for the
company's recapitalization. The prepackaged filing was made in
the U.S. Bankruptcy Court for the Southern District of New York.
Terms of the recapitalization were disclosed in the company's
disclosure statement filed with the Securities and Exchange
Commission on September 3, 2002.

The recapitalization will involve the exchange of approximately
$740 million of Viasystems' debt into common and preferred
stock. Upon completion of the restructuring, Viasystems' debt,
net of cash, will decline from approximately $1.1 billion to
approximately $380 million and interest will be reduced by
approximately $70 million annually.

Viasystems has received sufficient votes in favor of the
restructuring plan to meet the requirements of the Bankruptcy
Code for confirmation of the plan. Votes to accept the
restructuring plan were tendered by holders of approximately 87%
of Viasystems senior secured debt, holders of 100% of
Viasystems' 14% Senior Notes and holders of approximately 77% of
Viasystems' 9.75% Senior Subordinated Notes.

Viasystems will continue business as usual through its operating
subsidiaries, which will not be party to the reorganization
proceeding. Consequently, it is anticipated that customers,
employees and suppliers will not be affected by the
restructuring.

"With this filing, Viasystems is well on its way to
recapitalizing its balance sheet," said CEO David M. Sindelar.
"Customers have long recognized the value of our global
footprint and low-cost, vertically integrated business model.
With a balance sheet that is more reflective of today's business
environment, Viasystems will be in a better position to help our
customers gain a competitive advantage."

Under the terms of the restructuring, Viasystems' senior secured
bank debt will be reduced to approximately $450 million ($370
million net of estimated cash) through repayments from $77.4
million in proceeds from sales of senior convertible preferred
stock and common stock representing in the aggregate up to 23.5%
of the company's fully diluted common stock (excluding a
management incentive plan and warrants issued pursuant to the
plan). Viasystems' 14% Senior Notes will be exchanged for junior
preferred stock with a liquidation preference of $120.1 million
and 6.3% of the company's common stock, determined on a fully
diluted basis (excluding a management incentive plan and
warrants issued pursuant to the plan). Viasystems' 9.75% Senior
Subordinated Notes will be exchanged for up to 70.2% of the
company's common stock, determined on a fully diluted basis
(excluding a management incentive plan and warrants issued
pursuant to the plan). Subject to approval of the plan by the
general unsecured creditors of Viasystems Group, Inc., such
creditors will receive in exchange for their claims warrants to
purchase 0.6% of the company's common stock, determined on a
fully diluted basis, and the holders of Viasystems' existing
Series B Preferred Stock will receive warrants to purchase 5.4%
of the company's common stock, determined on a fully diluted
basis (in each case excluding a management incentive plan). The
exercise price of the warrants will be based on a $1.15 billion
total enterprise value. Viasystems' existing common stock,
options and warrants will be cancelled and will not receive any
distribution in the restructuring.

Viasystems has secured commitments from its senior lenders for
$37.5 million of working capital financing that will be
available during the reorganization proceeding. Upon completion
of the recapitalization, Viasystems will have a cash balance of
approximately $80 million and a new revolving credit facility of
up to $62 million.

                      About Viasystems

Viasystems Group, Inc. is a leading global EMS provider with
more than 18,000 employees in eight countries, supplying
customers in the telecommunications, networking, automotive and
consumer electronics industries.


VITESSE SEMICONDUCTOR: Reiterates Earnings Guidance for Q4 2002
---------------------------------------------------------------
Vitesse Semiconductor Corporation (Nasdaq:VTSS) expects revenue
for the fourth quarter of fiscal 2002 ending September 30 to be
approximately $38 million, which is within the range provided
during the last earnings conference call on July 18, 2002.

Lou Tomasetta, President and CEO, said, "Normally we do not
comment on analyst reports. However, in recent weeks a number of
analyst and media reports have contained errors and
misunderstandings that must be clarified for our shareholders.

"First, over 80% of our revenue in the last two quarters has
been from storage, enterprise and metro applications. Analysts
have left the impression that we remain heavily dependent on the
core transport market. While this was true several years ago, it
has not been the case lately. We have discussed our strategy to
expand our focus to applications outside the core on numerous
occasions and have reported revenue trends to support this
transition in each quarter over the last year. While there are
no areas in the communication IC space that are growing at
robust rates, these applications in the storage, enterprise and
metro areas are showing significantly better opportunities for
growth compared to core transport.

"Second, operating expenses (R&D and SG&A) for the December 2002
quarter are expected to be approximately $39 million, down
substantially from the $51 million reported for the June
quarter, as a result of cost reductions and the restructuring
discussed in the July earnings conference call. Additional cost
reductions are expected in subsequent quarters as a result of
the already announced restructurings. Some analysts continue to
project future expenses at the June quarter levels.

"Third, net cash (cash minus convertible debt) has been positive
for all of fiscal 2002. On our balance sheet total cash is shown
on three line items: cash and cash equivalents, consisting of
cash and fixed income securities with maturities under 90 days;
short term investments consisting of fixed-income securities
with maturities between 90 and 365 days; and long-term
investments, consisting of fixed-income securities with
maturities greater than 365 days. At June 30, 2002, this balance
was $472 million. While we have explained this in detail, some
reports have left the impression that today we have less cash
than convertible debt. We expect to utilize cash in operations
at a substantially lower rate over the next few quarters and we
anticipate ending fiscal 2002 and 2003 with positive net cash.

"Additional details will be provided during our quarterly
earnings conference call scheduled for the week of October 21,
2002. While our normal practice is not to comment on analyst
reports and we do not undertake any obligation to do so in the
future, we felt that it was important in this case to correct
misleading information that we believe has led to confusion in
the market."

Vitesse Semiconductor Corporation is a leading designer and
supplier of innovative, high-performance integrated circuits and
optical modules used in next generation networking and optical
communications equipment. The Company's products address the
needs of Enterprise, Access, Metro, Core, and Optical Transport
network equipment manufacturers who demand a robust combination
of high-speed, high-service delivery and low-power dissipation
in their products. In concert with its broad communications
product portfolio, Vitesse also develops ICs for storage area
networking and enclosure management. Vitesse is headquartered in
Camarillo, California. Company and product information can be
found on the Web at http://www.vitesse.comor is available by  
calling 1-800-VITESSE.

                         *    *    *

As reported in Troubled Company Reporter's September 6, 2002
edition, Standard & Poor's lowered its corporate credit rating
on Vitesse Semiconductor Corp., to single-'B' from single-'B'-
plus. The outlook remains negative. The action reflects the
company's depressed operating profitability and expectations
that business conditions will remain challenging in at least the
intermediate term.


WORLDCOM INC: Creditors' Committee Hires Akin Gump as Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors seek the Court's
authority to retain Akin Gump Strauss Hauer & Feld LLP as its
counsel, in the chapter 11 cases involving Worldcom Inc., and
its debtor-affiliates, nunc pro tunc to July 29, 2002.

The Committee explains that it is necessary and appropriate to
retain Akin Gump to provide these services:

-- advise the Committee with respect to its rights, duties and
   powers in these cases;

-- assist and advise the Committee in its consultations with the
   Debtors relative to the administration of these cases;

-- assist the Committee in analyzing the claims of the Debtors'
   creditors and the Debtors' capital structure and in
   negotiating with holders of claims and equity interests;

-- assist the Committee in its investigation of the acts,
   conduct, assets, liabilities and financial condition of the
   Debtors and of the operation of the Debtors' businesses;

-- assist the Committee in its analysis of, and negotiations
   with, the Debtors or any third party concerning matters
   related to, among other things, the assumption or rejection
   of certain leases of non-residential property and executory
   contracts, asset dispositions, financing of other
   transactions and the terms of a plan of reorganization for
   the Debtors and accompanying disclosure statement and related
   plan documents;

-- assist and advise the Committee as to its communications to
   the general creditor body regarding significant matters in
   these Cases;

-- represent the Committee at all hearings and other
   proceedings;

-- review and analyze applications, orders, statement of
   operations and schedules filed with the Court and advise the
   Committee as to their propriety;

-- assist the Committee in preparing pleadings and applications
   as may be necessary in furtherance of the Committee's
   interests and objectives; and

-- perform any other legal services as may be required or are
   otherwise deemed to be in the best interests of the Committee
   in accordance with the Committee's powers and duties as set
   forth in the Bankruptcy Code, Federal Rules of Bankruptcy
   Procedures or other applicable law.

Committee Chairperson Van Greenfield believes that Akin Gump
possesses extensive knowledge and expertise in the areas of law
relevant to these cases, and that Akin Gump is well qualified to
represent the Committee in these cases.  In selecting attorneys,
the Committee looked for a counsel with considerable experience
in representing unsecured creditors in Chapter 11 reorganization
cases, other debt restructurings and telecommunication matters.
Akin Gump has this experience since it is currently representing
and has represented official creditors' committees in many
significant Chapter 11 reorganizations including: In re Aetna
Industries Inc.; In re Dairy Mart Convenience Stores Inc.; In re
Exide Technologies Inc.; In re Flag Telecom Holdings Limited; in
re Fountain View Inc.; In re Globalstar L.P.; In re Heilig
Meyers Company; In re Kaiser Aluminum Corporation; In re Lernout
& Hauspie Speech Products N.V.; In re LTV Steel Company Inc.; In
re Polaroid Corporation; In re Sterling Chemical Holdings Inc.;
In re Verado Holdings Inc.; and In re XO Communications Inc.

Akin Gump will charge for its services in an hourly basis in
accordance with its ordinary and customary hourly rates in
effect on the date the services are rendered.  The current
hourly rates charged by Akin Gump for professionals and
paraprofessionals are:

       Partners                            $400 - 700
       Special Counsel and Counsel          285 - 600
       Associates                           185 - 430
       Paraprofessionals                     55 - 165

Akin Gump's professionals currently expected to have primary
responsibility for providing services to the Committee are:

          Name               Position      Hourly Rate
    ------------------       ---------     -----------
    Daniel H. Golden         Partner         $675
    Michael S. Stramer       Partner          550
    Ira S. Dizengoff         Partner          475
    James R. Savin           Associate        350
    Philip C. Dublin         Associate        320
    Kenneth A. Davis         Associate        320
    Nava Hazan               Associate        280

Akin Gump Partner Daniel H. Golden, Esq., assures the Court that
the Firm neither holds nor represents any interest adverse to
the Creditors' Committee, the Debtors, their creditors or other
parties-in-interest in these Chapter 11 cases.  In addition,
Akin Gump is a "disinterested person" within the meaning of the
Bankruptcy Code.  However, Akin Gump has in the past and
currently represents these companies on matters wholly unrelated
to these cases:

A. Unsecured Creditors:  Deutsche Bank, Bank of Nova Scotia,
   Bank One, Electronic Data Systems, Motorola Inc., ABN Amro
   Bank NV, Texas State Treasurer, Citibank N.A., Credit
   Lyonnais, Bayerische Landesbank, AT&T Corp., Hewlett Packard,
   Wells Fargo Bank N.A., AMR Corp., Mellon Bank, Fleet National
   Bank, Banco Bilbao Vizcaya, Sprint Corp., Verizon
   Communications, Royal Bank of Scotland, Arab Bank PLC, Cisco
   Systems and Westpac;

B. Bondholders:  JP Morgan Chase, Bank of New York, Goldman
   Sachs, Deutsche Bank, Salomon Smith Barney, Merill Lynch,
   Bear Sterns, Morgan Stanley, Citibank, UBS Warburg, CS First
   Boston, BT Alex Brown, American Express, Prudential
   Insurance, Pershing/DLJ, First Union Bank, Lehman Bros., Bank
   of Nova Scotia, Barclays Capital, ABN Amro Bank N.V., State
   Street Bank, Northern Trust, Investors Bank & Trust, PNC
   Bank, Charles Schwartz, and A.G. Edwards & Sons Inc.;

C. Bank Lenders:  Bank of Nova Scotia, Bayerische Landesbank,
   Credit Lyonnais, Wells Fargo Bank, JP Morgan Chase, Bank One
   N.A., Citibank N.A., Deutsche Bank, ABN Amro Bank N.V.,
   Westpac, Banco Bilbao Vizcaya, Mellon Bank, Arab Bank PLC,
   Fleet National Bank, and Royal Bank of Scotland;

D. Underwriters:  Arthur Andersen, Bear Sterns, ABN Amro Bank
   NV, Citibank NA, Deutsche Bank, Goldman Sachs, Salomon Bros.,
   Paine Webber, Bank of America, BT Alex Brown, CIBC World
   Markets, CSFB, Donaldson Lufkin Jenrette, JP Morgan Chase,
   UBS Warburg, Morgan Stanley, Westdeutsche Landesbank, Legg
   Mason Wood Walks, Robertson Stephens, Fleet National Bank,
   and Nations Bank;

E. Indenture Trustees:  Bank of New York, Citibank NA, US Trust
   Company of New York, JP Morgan Chase, Wilmington National
   Bank, Mellon Bank, Fleet National Bank, Nations Bank, State
   Street Bank, and Texas Commerce Bank;

F. Significant Shareholders:  AXA Financial Inc., Deutsche Bank,
   Bank of New York, Citibank NA, and Lehman Bros. (Worldcom
   Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service,
   Inc., 609/392-0900)  


XEROX CORPORATION: Appoints Three Executives to New Positions
-------------------------------------------------------------
Xerox Corporation (NYSE: XRX) announced the following executive
appointments:

     --  Richard F. Cerrone has been named senior vice president
and general manager of Xerox's European Office Operations,
reporting to Jean Noel Machon, president, Xerox Europe, and
James Miller, president, Xerox Office Printing Business. Cerrone
currently leads Xerox's North American Agent Operations. His new
appointment is effective Jan. 1, 2003.  

     --  D. Cameron Hyde has been named senior vice president
and general manager, Xerox North American Agent Operations, also
reporting to Miller. Hyde now serves as president and chief
executive officer of Xerox Canada Ltd. Doug Lord moves to the
president and CEO post of Xerox Canada, Ltd. Lord is currently
senior vice president, North American Graphic Arts Operations.
Both appointments are also effective Jan. 1.  

     --  Gregory B. Tayler has accepted a position in Xerox
Canada providing assistance during this leadership transition.
As such, his appointment is effective immediately. Since joining
Xerox in 1991, Tayler has held several senior finance positions
in operations and planning in Xerox Canada before moving into
corporate positions, including the most recently held post of
corporate treasurer. Xerox Chief Financial Officer Lawrence A.
Zimmerman will assume the role of treasurer in an acting
capacity until a new treasurer is named.  

As previously reported, Fitch downgraded its rating on Xerox
Corp.'s senior unsecured debt to BB- to reflect its weak credit
protection measures.

Xerox Corporation's 9.75% bonds due 2009 (XRX09USA1) are trading
at 77 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=XRX09USA1for  
real-time bond pricing.


XO COMMS: Assuming Amended Lease for LA, Calif. Carrier Center
--------------------------------------------------------------
XO Communications, Inc., obtained permission from the U.S.
Bankruptcy Court for the Southern District of New York to assume
the Amended Lease Agreement with Carrier Center LA Inc.

The Amended Lease provides for:

                            Existing Lease      Amended Lease
                            --------------      -------------
Rentable Square Feet              68,000           29,000
Annual Base Rent
   Current through Month 36    $1,360,000         $580,000
   Months 37-60                $1,428,000         $609,000
   Months 61-120               $1,632,000         $696,000
   Months 121-180              $1,876,800         $800,400
Tenant Share of Expenses          15.12%            7.31%

The reduction in annual base rent is attributable solely to the
reduction in square footage; the rental rate per rentable square
foot remains unchanged.  This alone will save the Debtor over
$13,000,000 -- inclusive of additional rent savings -- over the
remainder of the lease term.

In exchange, the Amendment provides for a $1,100,000 Termination
Fee.

Apart from these, the Amendment also modifies certain lease
provisions relating to services and utilities, supplemental
equipment, signs and telecommunications device areas. (XO
Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service,
Inc., 609/392-0900)  


* DebtTraders' Real-Time Bond Pricing
-------------------------------------

Issuer               Coupon   Maturity  Bid - Ask  Weekly change
------               ------   --------  ---------  -------------
Crown Cork & Seal     7.125%  due 2002    98 - 100       +2
Federal-Mogul         7.5%    due 2004    24 - 26        +2
Finova Group          7.5%    due 2009    28 - 30        0
Freeport-McMoran      7.5%    due 2006    87 - 89        -1
Global Crossing Hldgs 9.5%    due 2009   0.5 - 1.5       0
Globalstar            11.375% due 2004     3 - 5         0
Lucent Technologies   6.45%   due 2029    64 - 66        +5
Polaroid Corporation  6.75%   due 2002   5.5 - 7.5       0
Terra Industries      10.5%   due 2005    79 - 81        0
Westpoint Stevens     7.875%  due 2005    49 - 51        -1
Xerox Corporation     8.0%    due 2027    38 - 40        +1.5

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

                          *********

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.

The TCR subscription rate is $625 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each.  For subscription information, contact Christopher
Beard at 240/629-3300.

                *** End of Transmission ***