TCR_Public/021008.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Tuesday, October 8, 2002, Vol. 6, No. 199    

                          Headlines

AAMES FINANCIAL: Exchange Offer for Junk-Rated Bonds Extended
ADELPHIA COMMS: Wins Nod to Hire PwC to Render Financial Advice
ADVANCED MICRO: S&P Affirms B Corporate Credit & Other Ratings
AES CORP: S&P Drops Corp. Credit & Sr. Unsec. Debt Ratings to B+
AGWAY INC: Gets Interim OK to Use $80MM of $125MM DIP Facility

AKORN INC: Nasdaq Panel Nixes Appeal for Nat'l Market Relisting
AMERCO: S&P Cuts Credit Rating to BB+ As Flexibility Weakens
AMERICAN ENERGY: Will File Late Annual Report on Form 10-K
AMERICAN HOMEPATIENT: Court Fixes Oct. 15, 2002 Claims Bar Date
AMES: Escrows $25 Million of GOB Sale Proceeds for Lenders' Fees

ANC RENTAL: Consolidating Operations at the Atlanta Airport
APPLIED DIGITAL: Sr. Lender Agrees to Amend Financial Covenants
ASPEON INC: Richard Stack Replaces Robert Nichols as Pres. & CEO
AT&T CANADA: Costa Brava Partnership Withdraws its Lawsuit
AT&T CANADA: Expects to Complete Sale of Deposited Shares Today

BETHLEHEM STEEL: Court Approves Surplus Property Lease Program
BIG BUCK BREWERY: Nasdaq Delists Shares Effective Oct. 7, 2002
BUDGET GROUP: Court Okays Pennie & Edmonds as Special Counsel
BURLINGTON INDUSTRIES: Gets Approval to Hire Eli Cohen as Broker
CELEXX CORPORATION: Fails to File Form 10-KSB on Time

CHOICE ONE: Fails to Maintain Nasdaq Listing Requirements
COMDISCO: Dist. Court Affirms Retention of Lazard & Rothschild
COMMUNICATION DYNAMICS: Signs-Up Bayard Firm as Del. Co-Counsel
CONSECO INC.: WSJ Says Bondholders Demand Keys to the Boardroom
CONSECO INC: S&P Hatchets Counterparty Credit Rating Down to D

CONTOUR ENERGY: Files Amended Joint Chapter 11 Plan in Houston
COVANTA ENERGY: Court Approves Compromise with Dominion Virginia
CRUSADER INSURANCE: AM Best Slashes Fin'l Strength Rating to B+
DAYTONA BEACH: Case Summary & Largest Unsecured Creditors
DTVN HOLDINGS: Case Summary & 13 Largest Unsecured Creditors

EFS CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors
ELAN CORP: Sells All Interest in JV to Elite Pharmaceuticals
ENRON CORP: Grigsby Wants to Hire Hinton Sussman as Counsel
ENRON MANAGEMENT: Case Summary & 20 Largest Unsecured Creditors
EQUITY INNS: S&P Revises Outlook to Neg. over Lowered Guidance

EXODUS COMMS: Balks At C&W's Retention of PricewaterhouseCoopers
FEDERAL-MOGUL: Deadline to Commence Litigation Moved to Oct. 16
FELCOR LODGING: S&P Changes Outlook to Neg. on Weak Performance
FIBERNET TELECOM: Shareholders Approve Proposed Recapitalization
FOAMEX INT'L: Terminates Talks to Sell GFI Carpet Cushion Assets

FRISBY TECHNOLOGIES: Falls Short of Nasdaq Listing Standards
FRUIT OF THE LOOM: Creditors Trust Asks Court to Set-Up Reserve
GALEY & LORD: Exclusive Period Stretched to December 30
GUILFORD MILLS: Successfully Emerges from Chapter 11 Proceeding
INSPIRE INSURANCE: Texas Court Approves Disclosure Statement

INTEGRATED SECURITY: June 30 Balance Sheet Upside-Down by $8MM
IPALCO: Parent's Downgrade Prompts S&P to Cut Corp Rating to BB+
ISTA PHARMACEUTICALS: Fails to Meet Nasdaq Listing Guidelines
IT GROUP: Court Approves Shaw Master Services Agreement
ITC DELTACOM: Obtains Overwhelming Acceptance of Reorg. Plan

KMART CORP.: Six Landlords Want Bids for $1.7 Mill. Lease Claims
LEAP WIRELESS: Fails to Satisfy Nasdaq Listing Requirements
LODGIAN INC: Court Approves Proposed Solicitation Procedures
MALDEN MILLS: Wants More Time to Solicit Plan Acceptances
MOBILE TOOL: Continues Lincoln Engagement as Investment Bankers

MORGAN GROUP: Plans to File for Chapter 11 Liquidation Soon
NEW WORLD RESTAURANT: Taps Grant Thornton Re-Audit Financials
NOGA ELECTRO-MECHANICAL: Nasdaq Halts Trading & Wants More Info.
ORBITAL SCIENCES: S&P Ups Junk Corporate Credit Rating to B
OWENS CORNING: Wins OK to Insure Future Representative Liability

PARK PHARMACY: Bankruptcy Filing Likely if Debt Workout Fails
PENNEXX FOODS: Receives Waiver of Covenant Under Credit Pact
PEREGRINE SYSTEMS: Continues Employment of Ordinary Course Profs
PG&E CORP: Obtains New Waiver Extension Until October 18, 2002
POPE & TALBOT: Terminates Exchange Offer for 8-3/8% Senior Notes

PPL CORP: Will Expense Future Stock Options Starting January 1
RELIANCE GROUP: Wins Fourth Extension of Exclusive Periods
SAMSONITE CORP: Artemis Bows-Out of Proposed Recapitalization
SERVICE MERCHANDISE: Keeps Plan Filing Exclusivity Until Nov. 12
SMITHWAY MOTOR: Commences Trading on Nasdaq SmallCap Market

SPECIAL METALS: Bank Group Waives Default Under Credit Agreement
TELIGENT: Wants November 15 Admin. & General Claims Bar Date Set
TESORO PETROLEUM: S&P Cuts Corp. Credit Rating One Notch to BB-
TRANSWESTERN PIPELINE: S&P Ups Credit Rating to BB from CCC
TRANSWESTERN PIPELINE: Applauds S&P's Upgrade of Credit Rating

US AIRWAYS: Various Creditors Move for Adequate Protection
US AIRWAYS: Revenue Passenger Miles Up 10.4% in September 2002
US TIMBERLANDS: Fails to Maintain Nasdaq Listing Standards
USG CORP: Has Until March 31, 2003 to Remove Prepetition Actions
VENCOR INC: Seeks Okay to Assume Hyperbaris Management Contract

VENTAS INC: Will Publish Third Quarter Results on October 29
VENTURE HOLDINGS: S&P Keeps Watch on Rating on Unit's Insolvency
VIASYSTEMS GROUP: Files Prepackaged Reorg. Plan in Delaware
VIASYSTEMS: Bankruptcy Filing Prompts S&P to Lower Ratings to D
WARNACO GROUP: Classification & Treatment of Claims Under Plan

WORLDCOM INC: Proposes Uniform Claims Settlement Procedures
WYNDHAM INT'L: Closes Sale of Ramada Beachwood to Pay Down Debt

                          *********

AAMES FINANCIAL: Exchange Offer for Junk-Rated Bonds Extended
-------------------------------------------------------------
Aames Financial Corporation (OTCBB:AMSF) announced that the
expiration date of its offer to exchange its newly issued 4.0%
Convertible Subordinated Debentures due 2012 [rated Ca by
Moody's] for any and all of its outstanding 5.5% Convertible
Subordinated Debentures due 2006 has been extended to 5:00 p.m.,
New York City time, on Friday, October 25, 2002. The Exchange
Offer was scheduled to expire on Friday, October 4, 2002, at
5:00 p.m., New York City time. The Company reserves the right to
further extend the Exchange Offer or to terminate the Exchange
Offer, in its discretion, in accordance with the terms of the
Exchange Offer.

To date, the Company has received tenders of Existing Debentures
from holders of approximately $43.0 million principal amount, or
approximately 37.8%, of the outstanding Existing Debentures.

The Company is a consumer finance company primarily engaged in
the business of originating, selling and servicing home equity
mortgage loans. Its principal market is borrowers whose
financing needs are not being met by traditional mortgage
lenders for a variety of reasons, including the need for
specialized loan products or credit histories that may limit the
borrowers' access to credit. The residential mortgage loans that
the Company originates, which include fixed and adjustable rate
loans, are generally used by borrowers to consolidate
indebtedness or to finance other consumer needs and, to a lesser
extent, to purchase homes. The Company originates loans through
its retail and broker production channels. Its retail channel
produces loans through its traditional retail branch network and
through the Company's National Loan Centers, which produce loans
primarily through affiliations with sites on the Internet. Its
broker channel produces loans through its traditional regional
broker office networks, and by sourcing loans through
telemarketing and the Internet. At June 30, 2002, the Company
operated 98 retail branches, 4 regional wholesale loan offices
and 2 National Loan Centers throughout the United States.


ADELPHIA COMMS: Wins Nod to Hire PwC to Render Financial Advice
---------------------------------------------------------------
Diana L. Weiss, Esq., at Orrick Herrington & Sutcliffe LLP, in
New York, tells the Court that the Circle Objection does not
raise any valid concerns as to the qualifications or
disinterestedness of PricewaterhouseCoopers.  Stripped of its
inflammatory invective and unsupported allegations, it is
apparent that the Circle Objection essentially complains that
PwC had agreed to act as an expert on behalf of Circle
Acquisitions, Inc. in an arbitration, and now neither party
wishes for PwC to do so.  Even assuming the truth of these
allegations, the Circle Objection has not asserted any basis to
disqualify PwC from employment.  Circle does not identify any
actual conflict of interest or any other indication of non-
disinterestedness that would create an incentive for PwC
to act contrary to the best interests of the estate.
Accordingly, the Adelphia Communications Debtors' application
should be granted.

                            *   *   *

Judge Gerber authorizes the ACOM Debtors to employ PwC as its
financial advisor, provided that no person performing services
for the ACOM Debtors pursuant to this Order will communicate
with or provide information to Richard R. Deas, Daniel Baron, or
any other present or former PwC employee, agent or
representative who have had any involvement with Circle
Acquisitions, Inc., or its affiliates relating to the ACOM
Debtors concerning the PwC's work for the ACOM Debtors.

In addition, the PwC Circle Group will not perform services for
the Debtors and will not communicate with or provide information
to:

-- any person in the PwC Adelphia Group;

-- any agent, employee or representative of any of the Debtors;

-- any professional retained by the Debtors, any Committee
   herein or any trustee or examiner appointed in this
   bankruptcy proceeding provided, however, that any examiner
   will be authorized to make application to the Court for
   relief from prohibition if he or she believes that
   communication is necessary under the circumstances and is in
   furtherance of the examiner's duties to the Debtors' estate;
   or

-- any third party, concerning Circle or its claims against any
   of the Debtors.

                         *    *    *

Among the services to be provided to the Debtors in these cases,
PwC will:

-- consult with the Debtors regarding any accounting and
   financial reporting matters and provide related assistance
   with any regulatory investigations and litigation;

-- audit the consolidated financial statements of the Debtors as
   of December 31, 2001 and 2000 and for each of the three years
   in the period ending December 31, 2001 or any other periods
   as the Debtors may deem appropriate or necessary and
   warranted under the circumstances;

-- consult with the Debtors' management in connection with
   operational, financial and other business matters relating to
   accounting, auditing and general tax matters as the same
   pertains to ongoing activities; and

-- consult with the Debtors regarding financial reporting
   controls and procedures; and provide any other accounting,
   tax and consulting services as may be requested by the
   Debtors.

The Debtors will pay PwC partners and staff members at the
firm's regular hourly rates.  Additionally, PwC will seek
reimbursement of out-of-pocket expenses incurred in performing
services for the Debtors.  The current range of hourly rates
payable to PwC for services is:

      National Consulting Partner       $800
      Partner                            650 - 750
      Director/Senior Manager            550 - 595
      Manager                            415 - 480
      Senior Associate                   280 - 350
      Associate                          180 - 230
      Administrative Assistant            90
(Adelphia Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

Adelphia Communications' 9.875% bonds due 2005 (ADEL05USR2) are
trading at 36 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ADEL05USR2
for real-time bond pricing.


ADVANCED MICRO: S&P Affirms B Corporate Credit & Other Ratings
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its single-'B'
corporate credit rating and its other ratings on Advanced Micro
Devices Inc., and revised its outlook to negative from stable.
The Sunnyvale, California-based No. 2 supplier of personal
computer microprocessors had $1.7 billion of total debt
outstanding as of June 30, 2002.

The outlook revision followed AMD's recent announcement that it
would report a revenue decline for the September 2002 quarter to
about $500 million, from $600 million in the June quarter. The
company had expected a moderate sequential increase in revenues.
AMD also expects to report an operating loss well above $100
million for the quarter. Standard & Poor's anticipates that
AMD's operating cash flows will also be substantially negative.

"Although marketplace conditions are expected to support the
company's role as a key microprocessor supplier, weak sales and
cash flows are likely to place substantial pressures on
liquidity and financial flexibility," said Standard & Poor's
credit analyst Bruce Hyman. "If the company cannot stabilize its
operating performance over the next few quarters, ratings could
be lowered."

A December marketplace recovery this year is far from assured,
while conditions later in 2003 are also uncertain. AMD had
recently delayed the introduction of its new "clawhammer"
desktop microprocessor until next year from the December
quarter. Personal computer demand has been weak. AMD also
manufactures flash memory chips. Flash sales have been improving
from earlier depressed levels.

Standard & Poor's expects AMD to report that cash balances
declined materially in September as operating losses
accelerated. While operating performance in December cannot
currently be assessed, losses and negative cash flows remain
likely.


AEROVOX: Wants Lease Decision Period Extended to March 3, 2003
--------------------------------------------------------------
Aerovox, Inc., now known as New Bedford Capacitor, Inc., seeks
approval from the U.S. Bankruptcy Court for the District of
Massachusetts to extend its lease decision period. The Debtor
wants to decide whether to assume, assume and assign or reject
its unexpired nonresidential real property leases through March
3, 2003.

The Debtor tell the Court that a further extension of the lease
decision period is required in order to allow the Debtor and
other parties in interest adequate time to assess the
appropriate disposition of real properties.

The Debtor reports that it has recently sold substantially all
of its operating assets but has retained its interest in the
Vertente Facility. The Vertente Facility is presently being
subleased to Parallax for a one-year period and is subject to
liens asserted by Key Bank.

New Bedford Capacitor, Inc., f/k/a Aerovox Inc., a leading
manufacturer of electrostatic and aluminum electrolytic
capacitors, filed for chapter 11 protection on June 6, 2001 in
Massachusetts.  When the company filed for protection from its
creditors, it listed $70,702,599 in assets and $54,721,050 in
debt. In its 8K Report for January 26, 2002, the Debtor posted
$65,944,337 in assets and $56,218,563 in liabilities.


AES CORP: S&P Drops Corp. Credit & Sr. Unsec. Debt Ratings to B+
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured debt ratings on The AES Corp., to single-
'B'-plus from double-'B'-minus, its rating on AES' subordinated
debt to single-'B'-minus from single-'B', and its rating on the
company's trust preferred securities to triple-'C'-plus from
single-'B'-minus, and placed the ratings on CreditWatch with
negative implications.

The downgrade follows AES' launch of a $1.62 billion secured
bank facility, combined with up to $350 million in senior
secured exchange notes maturing December 2005. AES has tendered
for the $300 million senior unsecured notes due in December
2002, offering 50% of face value in cash at closing and 50% of
face value in senior secured exchange notes; and for the $200
million remarketable or redeemable securities (first remarketing
date June 2003), offering 100% of face value in senior secured
exchange notes. The exchange notes rank pari passu with the bank
facility in the security package, which includes 100% of AES'
equity interests in its "tier 1" domestic businesses and 65% of
the equity in its "tier 1" foreign businesses. Under the terms
of the offer, a significant portion of the asset sale proceeds
will be required to retire secured debt.

"If this transaction is successful, it will increase AES'
flexibility by pushing off any substantial maturities for up to
three years," said credit analyst Scott Taylor. "However, the
downgrade reflects continued deterioration in AES' Latin
American businesses, and anticipation that cost cutting and
improved performance at other businesses will not make up for
those losses to the extent that AES had projected in its
guidance provided after the second quarter," he added. If the
tender is successful, AES will not be paying down maturities out
of operating cash flow as they come due, as had been AES' plan,
but rather will be paying down debt as proceeds from asset sales
are realized, which will likely result in less timely
deleveraging than had been anticipated.

Many of AES' businesses provide solid, stable cash flow, with
44% of anticipated 2002 distributions coming from contract
generation or large utilities in North America, and about one-
third of anticipated distributions going forward coming from
these assets. The remainder comes from a diversified mix of
global businesses that include utilities, distribution
companies, contract generation, and merchant generation.
However, AES' concentration in Latin America has hurt its
financial performance over the past two years. That, combined
with general market conditions in the sector, has severely
restricted AES' access to capital and placed it in a position
where it needs to sell assets to reduce leverage to a more
manageable level.

If AES closes the transaction, its corporate credit rating will
be 'B+' and the outlook will be negative due to the need to
execute on the remainder of the asset sale program. With the
security package that will be in place and the disadvantaged
position of all other debtholders, senior unsecured notes would
be lowered to single-'B'-minus, subordinated notes to triple-
'C'-plus, and trust preferred securities to triple-'C'. While
the burden of debt maturities would be lifted, AES still needs
to execute an asset sale program to pay down the bank facility
over time. If AES cannot execute asset sales, its solvency could
be threatened. If and as such a plan is executed and if market
access improves, the negative outlook would be lifted, and as
debt is paid down, the rating would move up consummately
assuming AES' current cash flow profile is maintained.

If AES were to fail in executing this transaction, the rating
would fall to single-'B' or further depending on the
circumstances, and would remain on CreditWatch Negative. AES
would then need to repay the December maturity, close on its
bank facility, and begin to execute its asset sale program to
maintain its solvency.

Standard & Poor's will be completing a detailed analysis and
assign a rating to the exchange notes and bank facility in the
coming days. The analysis will focus on the strength of the
security package and recovery prospects for the holders in a
bankruptcy scenario. Depending on Standard & Poor's views on
potential recovery, the notes will be rated either at the
corporate credit rating of AES or one to two notches higher.


AGWAY INC: Gets Interim OK to Use $80MM of $125MM DIP Facility
--------------------------------------------------------------
Agway Inc., announced that the U.S. Bankruptcy Court for the
Northern District of New York approved the company's request for
interim use of its Debtor-in-Possession credit facility.

The Court's order enables Agway to draw up to $80 million of the
$125 million DIP facility, pending a final hearing to approve
the facility. The facility will be used for normal business
operations, including payments to vendors and suppliers for
goods and services received after the company filed for Chapter
11 reorganization on October 1, 2002.  The final hearing will be
held by the Court on October 22, 2002 to consider Agway's
request for permanent access to the full DIP facility.

Agway Chief Executive Officer Donald P. Cardarelli said,
"[Fri]day's approval of interim access to our DIP facility
provides even greater assurance to our vendors that they will
continue to be paid on a business-as-usual basis going forward.  
We greatly appreciate the widespread support our vendors have
shown since our Chapter 11 filing, and look forward to
continuing to enjoy productive business relationships with
them."

As announced, Agway Feed and Nutrition, Agway Agronomy, Seedway,
Feed Commodities International, Country Best Produce, CPG
Nutrients, Agway CPG Technologies and Agway General Agency are
included in the Chapter 11 filings.  Four wholly owned Agway
Inc., subsidiaries -- Agway Energy Products LLC, Agway Energy
Services, Inc., Agway Energy Services-PA, Inc., and Telmark LLC
-- are not included in the filings.  Also not included in the
filings is Cooperative Milling, a joint venture between Agway
and Southern States Cooperative.

Agway, Inc., is an agricultural cooperative owned by 69,000
Northeast farmer-members. The Cooperative is headquartered in
DeWitt, NY.  Visit Agway at http://www.agway.com


AKORN INC: Nasdaq Panel Nixes Appeal for Nat'l Market Relisting
---------------------------------------------------------------
Akorn, Inc., (AKRN) announced that it was informed by Nasdaq
that a Nasdaq Listing and Hearing Review Council denied the
Company's appeal for relisting on the NASDAQ National Market.

This action taken by Nasdaq stems from the Company's current
non-compliance with Nasdaq report filing requirements.
Specifically, the Form 10-K that the Company filed with the U.S.
Securities and Exchange Commission for the year ended December
31, 2001 was filed with unaudited financial statements.

The Company has been working with its auditors and the SEC to
finalize the restatement of its fiscal year 2001 and 2000
financial statements. This will enable the Company to obtain  
audited financial statements, after which time the Company will
apply for listing on a National Stock Market Exchange. There
can be no assurance, however, when or if such resolution will
occur. The Company's securities continue to be traded on the
Pink Sheets.

Akorn, Inc., manufactures and markets sterile specialty
pharmaceuticals, and markets and distributes an extensive line
of pharmaceuticals and ophthalmic surgical supplies and related
products.


AMERCO: S&P Cuts Credit Rating to BB+ As Flexibility Weakens
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
corporate credit rating on AMERCO to double-'B'-plus from
triple-'B' and lowered its short-term corporate credit and
commercial paper ratings on the company to 'B' from 'A-3' based
on heightened financial flexibility and liquidity concerns.
Standard & Poor's said that at the same time it assigned its
double-'B'-plus rating to the consumer truck renter's proposed
$275 million senior notes due 2009. All ratings remain on
CreditWatch with negative implications where they were placed
July 10, 2002.

"AMERCO's downgrade is based on the company's weakened financial
flexibility and liquidity over the last year," said Standard &
Poor's credit analyst Betsy Snyder. In June, the company entered
into a $205 million bank facility, replacing the existing $400
million facility. The company also suspended its commercial
paper program and had to contribute $76 million of equity to its
insurance operations to meet regulatory requirements. The
company has a $100 million debt maturity that comes due on Oct.
15, 2002, which proceeds of the proposed offering are intended
to repay. "The ongoing Credit Watch", Ms. Snyder said, "reflects
uncertainty regarding the proposed debt issuance. If the company
is unsuccessful in placing the notes, the ratings would likely
be lowered significantly".

Standard & Poor's said that its ratings on Reno, Nevada-based
AMERCO reflect the company's leading position in consumer truck
rentals offset by somewhat weak financial profile for a
transportation equipment lessor. Other limiting credit
considerations include participation in competitive markets,
uneven profitability, and substantial capital investment needs.
AMERCO's major operating subsidiary is U-Haul International
Inc., the largest provider of truck and trailer rentals to
retail customers in North America.


AMERICAN ENERGY: Will File Late Annual Report on Form 10-K
----------------------------------------------------------
Key officers and management of The American Energy Group, Ltd.,
have been involved in extensive reorganization of the Company
and acquiring capital investments for the Company, and have been
unable to complete the Financial Statements on Form 10K to be
filed with the SEC.

The Company expects to report that total net loss is
significantly less, approximately $11,274,092 less than last
year (from $13,274,092 to approximately $2,000,000). The
reduction in overall net loss is due mostly to prior year
nonrecurring expenses of the write-off of dry holes - Pakistan,
warrant settlement costs and the cost of stock issued to
Directors.

The American Energy Group, Ltd., is an independent oil and gas
exploration, drilling, and production company currently based in
Houston, Texas, engaged in international exploration projects.
On June 28, 2002, 3 creditors of the Company filed an
involuntary Chapter 7 petition against the Company in the U.S.
Bankruptcy Court for the Southern District of Texas (Houston).


AMERICAN HOMEPATIENT: Court Fixes Oct. 15, 2002 Claims Bar Date
---------------------------------------------------------------
By Order of the U.S. Bankruptcy Court for the Middle District of
Tennessee, October 15, 2002 is fixed as the deadline -- the
Claims Bar Date -- by which creditors of American HomePatient,
Inc., and its debtor-affiliates, must file their proofs of
claims against the Debtors and their estates or be forever
barred from asserting their claims.

Proofs of claims must be received by the Debtors' Claims Agent
before 5:00 p.m., Central Time on the Claims Bar Date.  If
mailed, Proofs of Claim must be addressed to:

      First Union National Bank
      Claims Agent For: American HomePatient
      P.O. Box 600727
      Jacksonville, Florida 32260-0727

If by hand delivery or overnight courier, to:

      First Union National Bank
      Claims Agent For: American HomePatient  
      210 N. Ridgecrest Lane, #100
      Jacksonville, Florida 32259

Copies must also be sent to:

      (a) Frank J. Wright, Esq.
          Hance Scarborough Wright Ginsberg & Brusilow, LLP
          750 Signature Place, 14785 Preston Road
          Dallas, TX 75254

      (b) Robert Fringer
          American HomePatient, Inc.
          5200 Maryland Way, Suite 400
          Brentwood, TN 37027-5018

The Court also sets March 1, 2003 as the deadline for filing
proofs of claims by governmental units.

Proofs of claims need not be filed if they are on account of:

       i. Claims accurately scheduled;

      ii. Claims specifically excluded from the Bar Date;

     iii. Administrative expenses; or

      iv. Equity interests.

American Homepatient, Inc., provides home health care services
and products consisting primarily of respiratory and infusion
therapies and the rental and sale of home medical equipment and
home care supplies. The Company filed for chapter 11 protection
on July 31, 2002. Glenn B. Rose, Esq., at Harwell Howard Hyne
Gabbert & Manner, PC represents the Debtors in their
restructuring efforts. When the Company filed for protection
from its creditors, it listed $269,240,077 in assets and
$322,129,850 in debts.


AMES: Escrows $25 Million of GOB Sale Proceeds for Lenders' Fees
----------------------------------------------------------------
Pursuant to the order approving Ames Department Stores, Inc.,
and its debtor-affiliates' going-out-of-business sales, the
Debtors are to pay GE Capital the proceeds of the GOB Sales.  
Here, the Debtors deposit the proceeds of the GOB Sales into
bank accounts at Chase Manhattan Bank now known as JP Morgan
Chase, and Chase daily concentrates the proceeds in the Account.  
Chase then forwards the amounts in the Concentration Account to
a collection account, which is maintained by GE Capital at
Bankers Trust Company.  Everyday, GE Capital applies the funds
in the Collection Account to the Debtors' payments obligations
under the DIP Agreement.

In a recent discussion among the Debtors, General Electric
Capital Corporation, as Agent and a Lender, as well as the other
Lenders to the DIP Credit Agreement, and the Unsecured Creditors
Committee, the Lenders expressed that they are entitled to
certain fees amounting to $14,000,000 as provided in the DIP
Agreement.  The Lenders also proposed that the Debtors establish
an $11,500,000 reserve or escrow to support the Debtors'
obligations to indemnify GE Capital and Lenders with respect to
a pending adversary proceeding between LFD Operating, Inc. and
GE Capital.  The Lenders believe that the LFD Reserve should be
funded from the proceeds of the GOB Sales.

However, the Debtors and the Committee disputed GE Capital's
entitlement to the $14,000,000 Fee and the LFD Reserve.  So, the
parties decided to hold the Fee and LFD Reserve in escrow to
allow discussions with respect to these matters.

In a Court-approved Stipulation, the parties agree that:

A. Following the repayment in full in cash of all other
   Obligations under the Lenders DIP Agreement, GE Capital will
   transfer from the Collection Account at Bankers Trust
   Company, by wire transfer, the full amount of the Fee and LFD
   Reserve -- a total of $25,500,000 -- to this interest bearing
   account to be held in escrow pursuant to the terms and
   conditions of this Stipulation:

             Escrow account of Jaspan Schlesinger Hoffman, LLP
                in trust for the Parties to
                the September 2002 Stipulation
             North Fork Bank
             275 Broadhollow Road
             Melville, NY 11747
             Account No. 3124053392
             ABA No. 021 407912
             DDA Account No. 4224011058
             Attention: Alice Marcelle

B. Jaspan Schlesinger Hoffman, LLP, as escrow agent, will hold
   the Escrow Property until the earlier of:

   -- receipt by the Escrow Agent of entry of an order of the
      Court, deciding the dispute with respect to the Fee and
      the LFD Reserve; or

   -- the date on which the Escrow Agent receives the unanimous
      written consent of the parties regarding distribution of
      the Escrow Property.  The consent must be approved by the
      Court;

C. In the event that the parties desire a distribution of the
   Escrow Property, one or more of them will give a written
   notice to the Escrow Agent.  The notice will contain a copy
   of:

   -- the required Order above or the unanimous written consent
      plus the Court order approving the written consent, as the
      case may be;

   -- written instructions to the Escrow Agent as to whom to
      deliver the Escrow Property; and

   -- an affidavit of service proving the personal delivery or
      mailing to the other parties of a copy of the notice;

D. Five days after receiving the Notice, the Escrow Agent will
   deliver the Escrow Property, free and clear of any interest
   therein, to the entity designated in the Notice, except in
   the event that:

   -- within the four days of receiving the Notice from any
      party, the Escrow Agent receives written notice of an
      objection by one of the parties to this Stipulation; or

   -- the Escrow Agent receives an order of a court of competent
      jurisdiction enjoining, restraining or limiting the
      delivery;

E. In the event that the Escrow Agent receives a timely Notice
   of Objection or a notice of a Stay, the Escrow Agent will:

   -- deposit the Escrow Property with the Clerk of the Court,
      in which event the Escrow Agent will stand fully relieved
      and discharged of any further liability or duties; or

   -- continue to hold the Escrow Property awaiting a resolution
      of the dispute;

F. Any dispute that may arise with respect to:

     (a) the distribution of Escrow Property;

     (b) the delivery, ownership or right to possession of the
         Escrow Property or any portion of the Property;

     (c) the facts upon which the Escrow Agent's determinations
         are based or the duties of the Escrow Agent; or

     (d) any other questions arising under this Escrow
         Agreement;

   will be resolved either by mutual agreement of all of the
   parties or by an order of the Court. The Escrow Agent may,
   but will be under no duty whatsoever to, institute or defend
   any proceedings.  Before the settlement of the dispute, the
   Escrow Agent is authorized and directed to retain in its
   possession, without liability to anyone, all or the portion
   of the Escrow Property that is the subject of or involved in
   the dispute;

G. The Escrow Agent will serve without compensation for its
   services.  Instead, the parties will reimburse all of the
   Escrow Agent's costs and expenses, including reasonable
   attorney's fees and expenses, incurred or made in connection
   with this Stipulation, including the maintenance or defense
   of any litigation or proceeding;

H. The parties severally agree to release the Escrow Agent from
   any and all claims, causes of action, suits, damages,
   judgments and liabilities in connection with this
   Stipulation, except to the extent resulting from the willful
   misconduct or gross negligence;

I. The Escrow Agent may resign from its duties at any time by
   giving notice of the resignation to the parties specifying a
   date when the resignation will take effect.  The effective
   date should not be less than 30 days after the giving of the
   notice.  Upon resignation, a successor Escrow Agent will be
   appointed with the unanimous consent of the parties;

J. If the parties are unable to agree upon a successor Escrow
   Agent within 20 days after the notice, the Escrow Agent will
   apply to the Court asking it to appoint a successor Escrow
   Agent.  The Escrow Agent will continue to serve until its
   successor accepts the escrow and receives the Escrow Property
   and the Court approves its successor;

K. The Escrow Agent will have no responsibility for the contents
   of any writing contemplated herein and may rely without any
   liability upon its contents.  The Escrow Agent will be
   entitled to rely on an order of the Court with respect to
   this Stipulation or on a Stay;

L. The Escrow Agent will not be liable for any action taken or
   omitted by it in good faith and believed by it to be
   authorized or within the rights or powers conferred upon it.
   This includes, without limitation, action taken in accordance
   with advice of counsel.  The Escrow Agent also will not be
   liable for any mistake of fact or error of judgment or for
   any acts or omissions of any kind, unless, in any instance,
   caused by or based upon its own willful misconduct or gross
   negligence;

M. The parties acknowledge that Jaspan Schlesinger Hoffman, LLP
   is special counsel to the Committee and will continue to
   serve in that capacity.  Despite the conflict, the parties
   have no objection to Jaspan Schlesinger acting as Escrow
   Agent; and

N. Any notices will be given by:

   -- in-hand personal delivery

      Notice given by hand will be deemed given when personally
      delivered to the addressee;

   -- overnight delivery by FedEx

      Notice given by FedEx will be deemed given on the first
      Business Day after placement with FedEx, with all charges
      paid for overnight a.m. delivery;

   -- certified or registered mail, return receipt requested

      Notice given by mail will be deemed given three days after
      placement into the mail, postage paid and properly
      addressed to the party at these addresses:

       (a) If to GE Capital to:

                General Electric Capital Corporation
                800 Connecticut Avenue, Two North
                Norwalk, Connecticut 06852
                Attention: Ames Account Manager

       (b) with a copy to:

                William D. Brewer, Esq. &
                Michael E. Emrich, Esq.
                Winston & Strawn
                200 Park Avenue
                New York, New York 10166

       (c) If to the Debtors to:

                David H. Lissy, Esq.
                Ames Department Stores, Inc.
                2418 Main Street
                Rock Hill, Connecticut 06067

                Frank A. Oswald, Esq.
                Togut, Segal & Segal, LLP
                One Penn Plaza
                New York, New York 10119

       (e) If to the Committee to:

                Harold D. Jones, Esq. &
                Antonia M. Donohue, Esq.
                Jaspan Schlesinger Hoffman, LLP
                300 Garden City Plaza
                Garden City, New York 11530
(AMES Bankruptcy News, Issue No. 26; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


ANC RENTAL: Consolidating Operations at the Atlanta Airport
-----------------------------------------------------------
ANC Rental Corporation and its debtor-affiliates sought and
obtained the Court's authority to:

-- reject Alamo's month-to-month Agreement for Rental
   Concession, dated December 20, 1985 with the City of Atlanta
   in Georgia, which controls and operates the Hartsfield/
   Atlanta International Airport, and

-- assume and assign to ANC Rental Corporation National's month-
   to-month Agreement for Rental Car Concession, dated December
   20, 1985, with the City of Atlanta.

The assignment of National's contract to ANC will enable the
Debtors to operate both brand names from a single location and,
in the process, generate cost savings estimated to reach over
$4,768,000 per year in fixed facility costs and other
operational cost savings.  The Debtors will pay its prepetition
debts to the City of Atlanta -- $315,254.28 by National and
$284,316.23 by Alamo.

Bonnie Glantz Fatell, Esq., at Blank Rome Comisky & McCauley
LLP, in Wilmington, Delaware, tells the Court that ANC will
increase its Minimum Annual Guarantee Payment under the terms of
the National Concession Agreement from $1,222,800 to $1,972,800.
(ANC Rental Bankruptcy News, Issue No. 20; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


APPLIED DIGITAL: Sr. Lender Agrees to Amend Financial Covenants
---------------------------------------------------------------
Applied Digital Solutions, Inc., (Nasdaq: ADSX) an advanced
technology development company, has executed an amendment to the
Third Amended and Restated Term Credit Agreement with its senior
lender, IBM Credit Corporation.

Under the terms of the amendment dated September 30, 2002,
certain financial covenants for the quarter ending September 30,
2002, and the fiscal year ending December 31, 2002, were
revised.

Commenting on the amendment, Scott R. Silverman, President of
Applied Digital Solutions, stated: "We are very pleased with
IBMCC's willingness to modify the covenants. Based upon our
current level of operations, we are comfortable that we will be
able to maintain compliance. Moving forward with our business
strategy, IBMCC's continued cooperation is important. Despite
the challenging economic environment, we believe our personal
safeguard technologies will yield value for our Company,
stockholders, and employees."

VeriChip, first announced on December 19, 2001, is a
miniaturized radio frequency identification device that can be
used in a variety of security, financial, emergency
identification and healthcare applications. About the size of a
grain of rice, each VeriChip product contains a unique
verification number and will be available in several formats,
some of which will be insertable under the skin. The
verification number is captured by briefly passing a proprietary
scanner over the VeriChip. A small amount of radio frequency
energy passes from the scanner energizing the dormant VeriChip,
which then emits a radio frequency signal transmitting the
verification number. "Getting chipped" is a simple, outpatient
procedure that lasts just a few minutes and involves only local
anesthetic and insertion of the chip. VeriChip Corporation and
its parent company, Applied Digital Solutions, are working with
federal regulators to ensure full compliance with applicable
regulations. VeriChip Corporation is a wholly owned subsidiary
of Applied Digital Solutions.

On March 27, 2002 Digital Angel Corporation completed a merger
with Medical Advisory Systems, Inc., which for two decades has
operated a 24/7, physician-staffed call center in Owings,
Maryland. Prior to the merger, Digital Angel Corporation was a
93% owned subsidiary of Applied Digital Solutions, Inc. (Nasdaq:
ADSX), which now is the beneficial owner of a majority position
in the Company. Digital Angel(TM) technology and patents
represent the first-ever combination of advanced sensors and
Web-enabled wireless telecommunications linked to Global
Positioning Systems. By utilizing advanced sensor capabilities,
Digital Angel will be able to monitor key functions - such as
ambient temperature and physical movement - and transmit that
data, along with accurate emergency location information, to a
ground station or monitoring facility. The Company also
invented, manufactures and markets implantable identification
microchips the size of a grain of rice for use in companion
pets, fish, and livestock. Digital Angel Corporation owns
patents for its inventions in applications of the implantable
microchip technology for animals and humans. For more
information about Digital Angel Corporation, visit
http://www.digitalangel.net

Applied Digital Solutions is an advanced technology development
company that focuses on a range of life-enhancing, personal
safeguard technologies, early warning alert systems,
miniaturized power sources and security monitoring systems
combined with the comprehensive data management services
required to support them. Through its Advanced Technology Group,
the company specializes in security-related data collection,
value-added data intelligence and complex data delivery systems
for a wide variety of end users including commercial operations,
government agencies and consumers. Applied Digital Solutions is
the beneficial owner of a majority position in Digital Angel
Corporation (AMEX: DOC). For more information, visit the
company's Web site at http://www.adsx.com

The June 30, 2002 balance sheets of Applied Digital Solutions
show that its total current liabilities exceeded its total
current assets by about $96 million.


ASPEON INC: Richard Stack Replaces Robert Nichols as Pres. & CEO
----------------------------------------------------------------
On September 12, 2002, Aspeon Inc., entered into a Secured
Convertible Promissory Note Purchase Agreement with three
individuals. Under that agreement, those three individuals, who
are Richard Stack, a director of the Company, Kenneth Kadlec,
the Company's Vice President of Engineering, and Horace Hertz,
have loaned the Company $125,000, $50,000 and $75,000,
respectively.  Each of those loans is represented by a Secured
Convertible Promissory Note, and bears interest at the rate of
ten percent per annum. Interest on the loans is due monthly, and
the principal amount of the loans is due on the first
anniversary of the loans. Repayment of the loans is secured by a
security interest in substantially all Company assets. The
principal amount of the loans is convertible at any time at the
election of the lenders into shares of Aspeon common stock at a
conversion price of $0.08 per share. In connection with the
consummation of these loans, Robert Nichols and Edward Brooks
resigned from the Board of Directors, and Horace Hertz was
elected to the Board of Directors. As a result, Aspeon's Board
of Directors is currently comprised of Jay Kear, Richard Stack
and Horace Hertz.

On September 20, 2002 Robert Nichols resigned as President and
Chief Executive Officer and Richard Stack was appointed
President and Chief Executive Officer.  Mr. Nichols will
continue to manage the Company's St. Louis based Javelin Store
Systems subsidiary.

Aspeon is a leading manufacturer and provider of point-of-sale
(POS) systems, services and enterprise technology solutions for
the retail and foodservice markets.

At March 31, 2002, Aspeon recorded in its balance sheet a total
shareholders' equity deficit of about $19 million.


AT&T CANADA: Costa Brava Partnership Withdraws its Lawsuit
----------------------------------------------------------
AT&T Canada (TSX: TEL.B and NASDAQ: ATTC) reported that the
lawsuit by Costa Brava Partnership III LP has been withdrawn by
the plaintiffs. The plaintiff has agreed not to proceed with the
application and the parties have agreed to a dismissal of the
action.

The Costa Brava Partnership III LP, a U.S.-based hedge fund,
filed an application last week seeking relief, including an
injunction prohibiting the completion of the purchase of shares
of the Company not already owned by AT&T Corp., and its
affiliates by the parties designated by AT&T Corp., pursuant to
the deposit receipt agreement entered into in June 1999. Costa
Brava holds US$4 million of AT&T Canada debt. It is not a member
of the bondholder group negotiating with AT&T Canada to achieve
a consensual restructuring of the company's public debt.

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

AT&T Canada Inc.'s 10.625% bonds due 2008 (ATTC08CAR2),
DebtTraders reports, are trading at 10 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ATTC08CAR2
for real-time bond pricing.


AT&T CANADA: Expects to Complete Sale of Deposited Shares Today
---------------------------------------------------------------
AT&T Canada (TSX: TEL.B and NASDAQ: ATTC) confirmed that the
purchase price to be paid by AT&T Corp., and purchasers
designated by it for all of the outstanding shares of AT&T
Canada Inc. that AT&T Corp does not already own, pursuant to the
terms of the June 1999 Deposit Receipt Agreement, is CDN$51.21.

The Company expects the sale of the Deposited Shares to be
completed on October 8, 2002 subject to and in accordance with
the terms of the Deposit Receipt Agreement.

As previously announced, on June 25, 2002, AT&T Corp., took
steps to arrange for the purchase of the Deposited Shares.

Pursuant to the Deposit Receipt Agreement, the price per
Deposited Share is the greater of the "floor price", namely
CDN$51.21, and the "fair market value price." Morgan Stanley
today provided its view with respect to the fair market value
price per Deposited Share, completing the appraisal process
prescribed by the Deposit Receipt Agreement. Since Morgan
Stanley and each of the other appraisers engaged pursuant to the
Deposit Receipt Agreement arrived at a fair market value price
that is below the floor price, the floor price (CDN $51.21) will
prevail.

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


BETHLEHEM STEEL: Court Approves Surplus Property Lease Program
--------------------------------------------------------------
Bethlehem Steel Corporation and its debtor-affiliates obtained
Court's authority to lease certain Surplus Real Property.

The salient terms of the Lease Procedures are:

(a) The Debtors will provide a notice of each proposed lease for
    any Surplus Real Property if:

    -- the Surplus Real Property is subject to any lien or
       encumbrance, but only to the extent that the lease will
       affect the encumbrance, in addition to the liens and
       encumbrances held by or for the benefit of the Debtors'
       postpetition or prepetition lenders under the
       $320,000,000 revolving credit facility;

    -- the proposed aggregate lease payments have a present
       value exceeding $500,000;

    The Notice Parties will include:

       (i) the United States Trustee;

      (ii) attorneys for the statutory creditors' committee;

     (iii) attorneys for the Debtors' Lenders and;

      (iv) the holder of any lien or encumbrance relating to the
           Surplus Real Property proposed to be leased;

    The Notices will be served by facsimile, so as to be
    received by 5:00 p.m. Eastern Time on the date of service.

    The Notice will specify:

    1. the Surplus Real Property to be leased;

    2. the identity of the lessor;

    3. the identity of the lessee;

    4. an estimate of the aggregate present value of the lease
       payments;

    5. a brief statement of the Debtors' marketing efforts with
       respect to the Surplus Real Property to be leased;

    6. a description and estimate of the present value of any
       expenses expected to be borne by the Debtors;

    7. a brief description of any contingent liabilities of the
       Debtors;

    8. a brief summary of any restrictions upon assignment by
       the lessor; and

    9. an estimate of the net present value of the lease.

    The Debtors will have the right to make amendments to the
    lease terms not set forth in the Notice without serving an
    amended Notice on the Notice Parties;

(b) The Notice Parties will have ten days after the Notice is
    served to object to the proposed lease.  All objections will
    be in writing and delivered to the Debtors' counsel, so as
    to be actually received by 5:00 p.m. on the deadline.  If no
    written objection is received prior to the expiration of the
    objection period, the Debtors will be authorized to take the
    necessary actions to enter into the proposed lease;

(c) If a Notice Party objects to the proposed transaction within
    the allowed objection period, the parties involved will use
    good faith efforts to resolve the objection.  However, if a
    consensual resolution has not been reached, the Debtors
    would not enter into the proposed lease pursuant to these
    procedures, but they may seek Court approval of the proposed
    lease upon notice and a hearing;

(d) The Debtors will be authorized to enter into a lease of
    Surplus Real Property without providing notice to any
    parties if:

    -- the property in question is not subject to any lien or
       encumbrance, other than an encumbrance that is not
       affected by the lease, in addition to the liens or
       encumbrances held by or for the benefit of the DIP
       Lenders or Inventory Lenders; and

    -- the proposed total lease payments have a present value of
       $500,000 or less;

(e) To the extent that the entry into a lease of Surplus Real
    Property will cause the present value of the aggregate lease
    payments owed to the Debtors by any single entity for leases
    of Surplus Real Property to exceed $6,000,000, the Debtors
    may not seek authorization to enter into a lease pursuant to
    the Sale Procedures; and

(f) Nothing in the foregoing procedures will prevent the
    Debtors, in their sole discretion, from seeking Court
    approval at any time of any proposed lease upon notice and a
    hearing. (Bethlehem Bankruptcy News, Issue No. 23;
    Bankruptcy Creditors' Service, Inc., 609/392-0900)


BIG BUCK BREWERY: Nasdaq Delists Shares Effective Oct. 7, 2002
--------------------------------------------------------------
Big Buck Brewery & Steakhouse, Inc., (Nasdaq: BBUCD) has
received notice from The Nasdaq Stock Market that its securities
were delisted from The Nasdaq SmallCap Market as of the open of
business Monday, October 7, 2002.

The notice indicated that the Nasdaq Listings Qualification
Panel to which Big Buck had presented its request for continued
listing was unwilling to grant an exception to the $1.00 minimum
bid price requirement for continued listing set forth in
Marketplace Rule 4310(C)(4).

According to the notice, Big Buck securities may immediately be
eligible to trade on the OTC Bulletin Board pursuant to an
exemption which permits a broker-dealer to publish in, or submit
for publication in, a quotation medium, quotations for a
security immediately after such security is no longer authorized
for quotation on The Nasdaq Stock Market, subject to certain
conditions.

Because trading, if any, will be conducted in the over-the-
counter market in the so-called "pink sheets" or on the OTC
Bulletin Board, selling Big Buck securities will be more
difficult because smaller quantities of securities may be bought
and sold, transactions may be delayed, and security analyst and
news media coverage of Big Buck may be reduced.  These factors
could result in lower prices and larger spreads in the bid and
ask prices for Big Buck securities.

As a result of the delisting, Big Buck securities have become
subject to certain rules of the SEC relating to "penny stocks."  
Such rules require broker-dealers to make a suitability
determination for purchasers and to receive the purchaser's
prior written consent for a purchase transaction, thus
restricting the ability to purchase or sell Big Buck securities
in the open market.

Big Buck Brewery & Steakhouse, Inc., operates restaurant-
brewpubs in Gaylord, Grand Rapids and Auburn Hills, Michigan,
offering casual dining featuring a high quality, moderately
priced menu and a variety of award- winning craft-brewed beers.  
In August 2000, the company opened its fourth unit in Grapevine,
Texas, a suburb of Dallas.  This unit is owned and operated by
Buck & Bass, L.P., pursuant to a joint venture agreement between
the company and Bass Pro Outdoor World, L.L.C.


BUDGET GROUP: Court Okays Pennie & Edmonds as Special Counsel
-------------------------------------------------------------
Budget Group Inc., and its debtor-affiliates obtained the
Court's authority to employ and retain Pennie & Edmonds LLP as
its special trademark litigation counsel in connection with
these Chapter 11 cases.

Pennie will provide the Debtors these services:

    -- counseling, providing strategic, advice to, and
       representing the Debtors in connection with the Ryder
       Litigation;

    -- assisting in the trial preparation and defense of the
       Ryder Litigation if the case proceeds to trial;

    -- rendering any other services as may be in the best
       interests of the Debtors in connection with the forgoing;
       and

    -- providing analysis and advice to the Debtors in
       formulating, developing and implementing a litigation
       strategy for resolving and defending the Debtors in the
       Ryder Lawsuit.

As compensation for its services, Pennie will charge these
hourly billing rates:

       Attorneys              $500 - $215
       Paraprofessionals      $135
(Budget Group Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc., 609/392-0900)    


BURLINGTON INDUSTRIES: Gets Approval to Hire Eli Cohen as Broker
----------------------------------------------------------------
Burlington Industries, Inc., and its debtor-affiliates obtained
the Court's permission to employ Eli Cohen Real Estate LLC, as
its real estate agent and broker, nunc pro tunc to June 15,
2002. Eli Cohen will aid the Debtors to dispose of a two-acre
land as Block 452A, Lots 1A & 2A in North Bergen, New Jersey.

For its part, Eli Cohen agrees to:

       (i) advertise the New Jersey Land through promotional and
           marketing activities;

      (ii) distribute a standard brokerage flyer; and

     (iii) contact potential purchasers or lessors of the New
           Jersey Land regarding a potential sale.

The Broker's Fee includes a 6% commission of the gross sales
price of the New Jersey Land. However, if the sale of the
property is consummated with the cooperation and assistance of
an additional real estate broker, the total Broker's Fee will be
7-1/2%.  Eli Cohen and that other broker will split the Fee.  As
of August 8, 2002, Eli Cohen has not yet located a buyer.
(Burlington Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service, Inc., 609/392-0900)    


CELEXX CORPORATION: Fails to File Form 10-KSB on Time
-----------------------------------------------------
CeleXx Corporation says it cannot, without unreasonable effort
and expense, file its 2002 Financial Statements with the SEC
within the prescribed time period because the Company and its
accountants are awaiting additional financial information
necessary for finalizing its financial statements that will be
included in the Company's Form 10-KSB.

Additionally, CeleXx currently has insufficient operating
capital to fund completion of its Annual Report on Form 10-KSB
and is currently seeking additional financing.  

CeleXx Corporation is a leading provider of Information
Technology (IT) and e-Business Integration services to companies
on the Fortune 500 list. CeleXx provides networking solutions,
computer telephony integration, e-Learning systems, Learning
Management Systems (LMS) implementation, and interactive web-
centric training to major industrial companies listed in the
Fortune 1000, commercial businesses, and financial institutions
in the United States. In general, these services are designed to
enhance the performance of client IT systems, to protect vital
data, to improve employee on-the-job performance, and to more
dynamically link employees, customers, suppliers and partners.


CHOICE ONE: Fails to Maintain Nasdaq Listing Requirements
---------------------------------------------------------
Choice One Communications (Nasdaq: CWON), an Integrated
Communications Provider offering facilities-based voice and data
telecommunications services, web hosting, design and development
to small and medium-sized businesses, announced that the company
received a Nasdaq Staff Determination on September 30, 2002 that
the company does not comply with requirements for continued
listing on the Nasdaq National Market or the Nasdaq SmallCap
Market. Specifically, the company does not meet the minimum bid
price, the minimum stockholders' equity or the market value of
publicly held shares required by the Nasdaq National Market.

The company has requested a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination. The
company is considering various courses of action to regain
compliance, but there can be no assurance that the company will
prevail at the hearing and that the company's common stock will
not be de-listed from the Nasdaq Market. Until the Panel issues
a decision regarding the company's continued listing, the
company's securities will remain listed on the Nasdaq National
Market.

Headquartered in Rochester, New York, Choice One Communications
Inc., (Nasdaq: CWON) is a leading integrated communications
services provider offering voice and data services including
Internet and DSL solutions, and web hosting and design,
primarily to small and medium-sized businesses in second and
third-tier markets.

Choice One currently offers services in 30 markets across 12
Northeast and Midwest states. At June 30, 2002, the company had
more than 450,000 lines in service and more than 100,000
accounts. The company's annualized revenue run rate is
approximately $300 million, based on second quarter 2002.

For further information about Choice One, visit its Web site at
http://www.choiceonecom.comor contact us at 1-888-832-5800.


COMDISCO: Dist. Court Affirms Retention of Lazard & Rothschild
--------------------------------------------------------------
United States District Court Judge Matthew F. Kennelly affirms
the Bankruptcy Court's Orders authorizing Comdisco, Inc., and
its debtor-affiliates to retain to Rothschild, Inc. and Lazard
Freres & Co., LLC.  Ira Bodenstein, United States Trustee for
the Northern District of Illinois, filed the appeals challenging
the indemnification provisions of the Orders.

In his memorandum opinion and order dated September 23, 2002,
Judge Kennelly explains his decision:

  (1) Reasonableness of Indemnification Provisions

      Most of the Courts addressing indemnity clauses for
      financial advisors have expressed reservations about them
      but have uniformly declined to impose a blanket
      proposition against their use.  Nevertheless, the
      Bankruptcy Court modified the indemnification provisions
      to exclude acts or omissions constituting negligence or
      breach of fiduciary duty.  The Bankruptcy Court also
      determined that "whether indemnification should be offered
      to a professional should be determined on a case by case
      basis, after the claim has been asserted for which
      indemnity has been sought."

      Judge Kennelly is not persuaded by the U.S. Trustee's
      attempt to compare financial advisors to attorneys,
      accountant and underwriters.  The ethic rules governing
      lawyers and accountants -- which typically prohibit
      general indemnification agreements -- do not apply to
      financial advisors and cannot provide the benchmark for
      assessing reasonableness of a financial advisor's contract
      under the Bankruptcy Laws.  As noted by Rothschild and
      Lazard, the evidence before the Bankruptcy Court shows
      that the indemnification agreements like the ones in this
      case are the norm in the marketplace for financial
      advisors.

      Indemnification provisions, which insulate professional
      advisors from their own negligence, are arguably
      distasteful and potentially could cause substandard
      performance.  The Debtors and the Committee note that the
      Bankruptcy Code is intended to be applied to encourage
      financial advisors to serve in bankruptcy cases.

      Whether a particular indemnity clause is reasonable in a
      particular case depends on the facts of the case and can
      properly be determined only on an individual basis.  The
      factors to be considered may include:

      (a) the extent of the Debtors' need for a financial
          advisor;

      (b) the financial advisor's experience and level of
          expertise;

      (c) whether and on what terms the financial advisor would
          agree to remove the indemnity clause;

      (d) whether comparable services are available from another
          financial advisor without an indemnity clause;

      (e) whether the terms of agreement were negotiated at
          arm's length by all interested parties; and

      (f) whether the creditors support the retention
          notwithstanding the indemnity clause.

  (2) Reasonableness of the Rothschild and Lazard
      Indemnification Provisions

      The U.S. Trustee has not challenged the reasonableness of
      the indemnification agreements signed in this case or the
      facts that led the Bankruptcy Court to approve them.
      Thus, having determined that indemnification agreements
      can be reasonable under appropriate circumstances, Judge
      Kennelly explains that the District Court must affirm the
      Bankruptcy Court's decision to approve the applications to
      retain Rothschild and Lazard over the Trustee's objection.
      (Comdisco Bankruptcy News, Issue No. 37; Bankruptcy
      Creditors' Service, Inc., 609/392-0900)    


COMMUNICATION DYNAMICS: Signs-Up Bayard Firm as Del. Co-Counsel
---------------------------------------------------------------
Communication Dynamics, Inc., along with its debtor-affiliates,
request approval from the U.S. Bankruptcy Court for the District
of Delaware to hire The Bayard Firm, P.A., as their bankruptcy
co-counsel.

The Debtors want to retain The Bayard Firm to:

  a) take all necessary action to protect and preserve the
     estate of the Debtors, including the prosecution of actions
     on the Debtors' behalf, the defense of any actions
     commenced against the Debtors, the negotiation of disputes
     in which the Debtors are involved, and the preparation of
     objections to claims filed against the Debtors' estates;

  b) provide legal advice with respect to the Debtors' powers
     and duties as debtors-in-possession in the continued
     operation of their business and management of their
     properties;

  c) negotiate, prepare and pursue confirmation of a plan and
     approval of the disclosure statement;

  d) prepare on behalf of the Debtors, as debtors-in-possession,
     necessary motions, applications, answers, orders, reports
     and other legal papers in connection with the
     administration of the Debtors' estates;

  e) appear in Court and protect the interest of the Debtors
     before the Court;

  f) assist with any disposition of the Debtors' assets, by sale
     or otherwise; and

  g) perform all other legal services in connection with these
     chapter 11 cases as required.

The Debtors assure the Court that The Bayard Firm intends to
work closely with White & Case LLP to ensure that there is no
unnecessary duplication of services in connection to the two
firms' representation of the Debtors.

The principal attorneys and paralegals who will represent the
Debtors and their hourly rates are:

          Jeffrey M. Schlerf         $395 per hour
          Christopher A. Ward        $260 per hour
          Eric M. Sutty              $250 per hour
          GianClaudio Finizio        $160 per hour
          Liana Shaw (paralegal)     $130 per hour

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.  Jeffrey M. Schlerf, Esq., at The Bayard
Firm represents 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.


CONSECO INC.: WSJ Says Bondholders Demand Keys to the Boardroom
---------------------------------------------------------------
The Wall Street Journal reports that the Ad Hoc Noteholders'
Committee negotiating a restructuring plan with Conseco, Inc.,
is demanding full ownership of the company.  The Journal's
sources say that "because Conseco's debts exceed estimates of
the company's value, its bondholders are likely to gain at least
a controlling stake in the restructured company."  

The Ad Hoc Noteholders' Committee is credited with forcing Gary
Wendt to step down as Conseco's CEO.  The Journal says that "a
representative of the bondholders told the restructuring  
committee of Conseco's board that Mr. Wendt's 'usefulness had
come and passed and we want him gone,' according to one person
at [a] meeting [two weeks ago]."

Journal reporters Mitchell Pacelle and Joe Hallinan relate that
bondholders have presented the company with a written proposal
demanding full ownership of the restructured company . . . but
might be willing to give a nominal amount of warrants to
existing equity holders.  


CONSECO INC: S&P Hatchets Counterparty Credit Rating Down to D
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its counterparty
credit rating on Conseco Inc., to 'D' (default) from 'SD'
(selective default) following the resignation of Gary Wendt,
Conseco's CEO.

Standard & Poor's also said that it lowered its senior debt and
preferred stock ratings on Conseco to 'D' from double-'C'.

The single-'B'-plus counterparty credit and financial strength
ratings on Conseco's insurance subsidiaries remain on Credit
Watch with negative implications, where they were placed on Aug.
9, 2002.

"The 'D' rating reflects Standard & Poor's view that Mr. Wendt's
resignation is a prelude to an ultimate bankruptcy filing,"
explained Standard & Poor's credit analyst Jayan U. Dhru.
"Therefore, Standard & Poor's expects that Conseco's future
payments on principal and interest will be adversely affected."

The ratings on the insurance entities will remain on CreditWatch
until there is more clarity about the impact of the parent
company's travails on the insurance operations. Standard &
Poor's believes the insurance policyholders have a priority over
the debtholders and that the regulators are ensuring that
appropriate risk-based capital is maintained at the operating
companies.


CONTOUR ENERGY: Files Amended Joint Chapter 11 Plan in Houston
--------------------------------------------------------------
Contour Energy Co., announced that on September 26, 2002, it
filed its First Amended Debtors' Joint Plan of Reorganization
Under Chapter 11 of the Bankruptcy Code with the United States
Bankruptcy Court for the Southern District of Texas, Houston
Division. In connection with the filing of the Amended Plan,
Contour stated its intention to assume all its existing joint
operating and related agreements and to cure any related
monetary defaults.

The Amended Plan provides that the general unsecured class of
creditors will be paid in full, so long as the claims within
that class are less than the Unsecured Claims Cap. The
"Unsecured Claims Cap" is defined in the Amended Plan as
$1,750,000 plus the amount, if any, of general unsecured claims
attributable to current or suspended royalties, joint interest
billings, and certain license and membership fees. Contour
believes that general unsecured claims will be significantly
less than the Unsecured Claims Cap. If the general unsecured
claims do exceed the Unsecured Claims Cap, all general unsecured
creditors will share pro rata in the amount of the Unsecured
Claims Cap.

Contour has obtained approval to pay in full its pre-petition
royalty obligations, and all those amounts have now been paid by
the Company. Post-petition royalties are being paid in the
normal course of business. It is anticipated that any amounts
owed to joint working interest owners will be paid in full in
connection with the assumption of the operating and related
agreements.

The Amended Plan does not modify the treatment of holders of the
Company's 14% senior secured notes due 2003 and 10-3/8% senior
subordinated notes due 2006. The senior secured noteholders will
be paid in full with interest at the non-default rate, and the
senior subordinated noteholders will receive all the Company's
post-confirmation equity. In accordance with the approved cash
collateral order, a $5 million principal payment was made to the
trustee of the 14% senior secured notes on October 3, reducing
the amount owed under those notes to $100 million plus accrued
interest. The aggregate amount owed under the senior
subordinated notes is $155 million plus interest accrued through
the petition date.

Under the Amended Plan, existing holders of Contour common
stock, in the aggregate, will receive the lesser of $750,000 or
the amount by which total general unsecured claims are less than
the Unsecured Claims Cap.

The Amended Plan, including the changes described above, is
subject to final confirmation by the bankruptcy court. The
hearing for confirmation of the Amended Plan has been scheduled
for December 4, 2002 at 1:30 pm central time in Houston, Texas.

Contour Energy Co., is engaged in the exploration, development,
acquisition and production of natural gas and oil.

Contour Energy Co., common stock is traded on the Pink Sheets
under the symbol CONC.


COVANTA ENERGY: Court Approves Compromise with Dominion Virginia
----------------------------------------------------------------
Covanta Energy Corporation and its debtor-affiliates obtained
Court approval of a compromise between Covanta Fairfax and
Dominion Virginia Power. The Court also agrees to lift the
automatic stay to permit the set-off of mutual prepetition
obligations owed by Dominion Virginia Power and Covanta
Alexandria to each other.

With the Court's approval, Covanta Fairfax, Dominion, the County
and the Authority entered into a Settlement Agreement wherein
Dominion is granted a $1,600,000 prepetition claim, to
be set-off against the net prepetition amount owed by Dominion
to Covanta Fairfax.  Only $190,000 of the settlement amount will
ultimately affect Covanta Fairfax because the County is entitled
to the benefit of 88% of the proceeds.

Also, as of the Petition Date, Dominion owed Covanta Alexandria
$583,851 for energy and capacity sold by Covanta Alexandria to
Dominion during March 2002.  Covanta Alexandria, on the other
hand, owed Dominion $185,046 for utility services provided to
Covanta Alexandria during March 2002.  The amounts owed by the
respective parties are not in dispute.

With the Court approval, Covanta Alexandria and Dominion will
set-off their claims against each other, and pursuant to this
agreement, Dominion will remit the balance of $398,804 to
Covanta Alexandria. (Covanta Bankruptcy News, Issue No. 14;
Bankruptcy Creditors' Service, Inc., 609/392-0900)    


CRUSADER INSURANCE: AM Best Slashes Fin'l Strength Rating to B+
---------------------------------------------------------------
A.M. Best Co., has downgraded the financial strength rating to
B+ (Very Good) from A- (Excellent) of Crusader Insurance Company
(NASDAQ: UNAM) (Woodland Hills, CA).

The outlook is negative.

This rating action follows an August 13, 2002, decision to place
the rating under review with negative implications, pending
successful capital raising and/or reinsurance initiatives that
would enhance capital. At that time, A.M. Best indicated it
would monitor Crusader's progress in the near term and expected
these capital enhancement initiatives to be completed by the end
of the third quarter of 2002.

Also, this rating decision follows Crusader's second quarter
public earnings announcement that it incurred a reserve charge
of approximately $6 million related to liquor liability and
premises liability claims in 2001 and prior accident years on
business outside of California. The capital raising initiatives
were imperative to support the company's eroded capital base due
to numerous reserve charges in the last three years.

This rating action reflects Crusader's failure to successfully
complete capital raising and/or reinsurance initiatives by the
prescribed timeframe. Furthermore, Crusader's decline in
operating performance and the negative impact on capitalization
does not support an Excellent rating.

In an effort to stabilize and improve operating performance,
management has taken corrective actions on problematic classes
of business. While continuing its normal operations and sales,
Crusader is instituting a more stringent underwriting criteria,
limiting coverages offered, placing moratoriums on certain types
of new business, increasing rates and non-renewing certain types
of business. Moreover, Crusader will not expand into additional
programs or territories until it has improved its operating
performance. Nevertheless, A.M. Best remains concerned with the
potential for further adverse loss reserve development and the
negative impact it would have on the company's operating
performance and overall capitalization.

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


DAYTONA BEACH: Case Summary & Largest Unsecured Creditors
---------------------------------------------------------
Lead Debtor: Daytona Beach Regency, Ltd.
             1150 First Avenue, Suite 900
             King of Prussia, Pennsylvania 19406

Bankruptcy Case No.: 02-12889

Debtor affiliates filing separate chapter 11 petitions:

     Entity                                       Case No.
     ------                                       --------
     Epic Resorts - Hilton Head, LLC              02-12890
     Epic Resorts - Westpark Resort, LLC          02-12892
     Epic Resorts - Scottsdale Links Resort, LLC  02-12893

Chapter 11 Petition Date: October 4, 2002

Court: District of Delaware (Delaware)

Judge: Mary F. Walrath

Chapter 11 Trustee: Anthony H.N. Schnelling

Trustee's Counsel: Kevin Gross, Esq.
                   Rosenthal Monhait Gross & Goddess
                   1401 Mellon Bank Center
                   Wilmington, DE 19899
                   Tel: 302 656-4433
                   Fax : 302-658-7567
    
                      - and -

                   Robin E. Keller, Esq.
                   Stroock & Stroock & Lavan LLP
                   180 Maiden Lane
                   New York, NY 10038
                   Tel: (212) 806-5400

Estimated Assets: $1 to $10 Million

Estimated Debts: $500,000 to $1 Million

A. Daytona's 20 Largest Unsecured Creditors:

Entity                                            Claim Amount
------                                            ------------
Daytona Sunshine Vacation                             $118,368
Club

Mindset Interactive                                    $78,185

Daytona Beach Regency Association                      $47,876

Seagarden Inn                                          $47,543

County Delinquent Tax Department                       $44,685

Castaways Beach Resort                                 $44,001

Florida Power & Light Company                          $33,764

Hilton                                                 $30,276

Holiday Inn Daytona Shores                             $28,404

Hawaiian Inn                                           $28,084

Vacation Ventures Inc.                                 $23,487

Four Graphics Inc.                                     $18,487

Jansos Beck                                            $17,178

Olive Garden                                           $16,302

PYA / Monarch, Inc.                                    $14,294

Franklin Mills Association LP                          $12,865

United Parcels Service                                 $12,812

Travelodge Ocean Jewels Resorts                        $11,711

Daytona Oceanside Inn                                  $10,608

Clark Properties                                       $10,600

B. Hilton Head's 20 Largest Unsecured Creditors:

Entity                                            Claim Amount
------                                            ------------
Hilton Head Beach & Tennis                            $115,178

Crowne Plaza                                           $89,983

Hampton Inn Hilton Head                                $71,353

Red Roof Inns, Inc.                                    $65,930

The Westin                                             $43,076

Hilton Head Ocean Resort and Spa                       $23,910

Hyatt Regency Hilton Head                              $16,910

Charleston's                                           $15,750

America Direct, Inc.                                   $13,840

Quality Inn and Suites                                 $12,614

NTFC Capital Corporation                               $11,343

Reilly's Sea Pines Crl                                  $9,875

Crazy Crab Restaurant                                   $9,476

Brian 1301 Bistro                                       $9,300

Savage Direct Marketing                                 $7,521

Beaufort County Treasurer                               $7,223

South Seaport Caf,                                      $6,245

Alligator Grill                                         $4,575

Hargray Telephone Company                               $4,523

Office Products Plus                                    $3,889

C. Scottsdale Link's 20 Largest Unsecured Creditors:

Entity                                            Claim Amount
------                                            ------------
Arizona Public Service                                 $33,820

H & P Graphics                                         $20,434

City of Scottsdale                                     $10,453

Avaya Financial Services                                $8,977

Dove Valley Ranch                                       $8,901

AAA Arizona                                             $8,881

Qwest                                                   $8,559

Delta-Tel Info. Solutions                               $7,041

Cahners Travel Group                                    $6,976

USA Today - Phoenix                                     $6,885

Lato Supply Corporation                                 $6,631

Worldwide Express                                       $4,662

Arizona Office Equipment                                $4,662

John Scates                                             $4,515

Cox Communications                                      $4,483

Grainer                                                 $3,488

AT&T                                                    $3,081

Hometown Distributors                                   $3,078

C-Pec Corporation                                       $3,020

Carpet West, Inc.                                       $3,005

D. Westpark Resort's 20 Largest Unsecured Creditors:

Entity                                            Claim Amount
------                                            ------------
Vingcard, Inc.                                         $36,587   

Sprint                                                 $33,152

Mission Industries                                     $31,492

Clark County Treasurer                                 $28,642

Nevada Power Company                                   $22,305

Nextel Communications                                  $22,061

St. Tropez                                             $18,160

Preferred Equities Co.                                 $17,325

Clark County Sanitation District                       $16,651

Candlewood Suites                                      $16,099

CompUSA                                                $14,702

Sprint North Supply Leasing                            $14,046

Sprint                                                 $13,448

Brady Industries, Inc.                                 $13,019

San Remo Hotel & Casino                                $12,773

Transportation Solutions                               $12,511

Employers Insurance of Nevada                          $11,100

Coordinated Systems                                     $9,702

XO Communications                                       $8,464

Jet Printing                                            $8,104


DTVN HOLDINGS: Case Summary & 13 Largest Unsecured Creditors
------------------------------------------------------------
Lead Debtor: DTVN Holdings, Inc
             1801 Gateway Blvd, #101
             Richardson, Texas 75080

Bankruptcy Case No.: 02-38770

Debtor affiliates filing separate chapter 11 petitions:

     Entity                                     Case No.
     ------                                     --------
     Datavon, Inc.                              02-38600

Type of Business:

Chapter 11 Petition Date: October 1, 2002

Court: Northern District of Texas (Dallas)

Judge: Robert C. McGuire

Debtors' Counsel: Jeffrey Ross Fine, Esq.
                  Hughes & Luce, LLP
                  1717 Main St., Suite 2800
                  Dallas, TX 75201
                  214-939-5500

Total Assets: $2,589,609

Total Debts: $951,779

Debtor's 13 Largest Unsecured Creditors:

Entity                                            Claim Amount
------                                            ------------
Zydeco Exploration, Inc.                              $572,383
1801 Gateway Blvd., Suite 101
Richardson, TX 75080

Datavon, Inc.                                         $159,730

Baker & McKenzie                                       $36,232

KPMG, LLP                                              $23,075

Munsch Hardt Kopt & Harr, PC                           $20,785

RR Donnelley Receivables, Inc.                         $10,738

Dell Financial Services                                $10,357

Premium Financing Specialists                           $9,665    

Hein & Associates, LP                                   $7,055

A.G. Ferguson & Associates, Inc.                        $5,250

CT Corporation System                                   $1,549

M.M. Simpson & Associates, PC                           $1,185

Bracewell & Patterson                                     $287


EFS CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: EFS Construction Management Services, Inc.
        1400 Smith Street
        Houston, Texas 77002

Bankruptcy Case No.: 02-14885

Type of Business: EFS Construction Management Services,
                  Inc.("EFS-CMS"), an affiliate of Enron Corp,
                  holds a number of construction subcontracts
                  and/or purchase orders through which EFS-CMS
                  provides construction management services to
                  Enron Energy Services, Inc. ("EES") and its
                  affiliates.

Chapter 11 Petition Date: October 2, 2002

Court: Southern District of New York (Manhattan)

Judge: Arthur J. Gonzalez

Debtors' Counsel: Brian S. Rosen, Esq.
                  Weil, Gotshal & Manges LLP
                  767 Fifth Avenue
                  New York, New York 10153
                  212-310-8602
                  Fax : 212-310-8007

                  and

                  Melanie Gray, Esq.
                  Weil, Gotshal & Manges LLP
                  700 Louisiana, Suite 1600
                  Houston, Texas 77002
                  713-546-5000

Total Assets: $5,557,246

Total Debts: $8,832,595

Debtor's 20 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
Applied Energy Management  Contract                   $593,326
Inc.
Attn: Steve Glick
P.O. Box 189
14 Pine Street
Stockbridge, MA 01262

Seco                       Contract                   $498,000
Attn: Paul Bollinger
180 Mercer St.
Meadville, PA 16335

The Fouress Co.            Contract                   $487,754
Attn: Mr. Sridharan Raghavachari
4914 W. Forest Hill Ave.
Franklin, WI 53132

Missouri Valley, Inc.      Contract                   $484,352
Attn: Mr. George Cumming, Jr.
4614 McCarty Blvd.
Amarillo, TX 79114
Missouri Valley, Inc.

Dreicor, Inc.              Contract                   $418,648
Attn: Mr. Bob Bare
1820 Ashville Highway
Hendersonville, NC 28793

Honeywell International,   Contract                   $281,841
Inc.
Attn: Hank Balaity
16340 Roscoe Blvd., Suite 200
Van Nuys, CA 91406
Honeywell International, Inc.

Incomm                     Contract                   $259,338
Attn: Greg Schwenk
277 W. Main Street, Suite 1
Niantic, CT 06357

Aqualine Resources, Inc.   Contract                   $226,608

Gartner & Associates       Contract                   $191,981

Temperature Equipment      Contract                   $184,811
Corp.

O&M Industries             Contract                   $176,075

National Lighting          Contract                   $154,428

Lewis Mechanical           Contract                   $149,182

Alpha Electric Service     Contract                   $116,160

Zeks                       Contract                   $110,231

Thermal Transfer Corp.     Contract                    $82,208

Energy Investment          Contract                    $77,354

Sun & Sun Industries       Contract                    $65,187

Bassett                    Contract                    $63,545

Techlite Corp.             Contract                    $47,909


ELAN CORP: Sells All Interest in JV to Elite Pharmaceuticals
------------------------------------------------------------
Elite Pharmaceuticals, Inc., (Amex: ELI) has consummated an
agreement with Elan Corporation, plc (NYSE: ELN) to acquire all
of Elan's interest in a joint venture company, Elite Research
Limited.  The termination of the joint venture results from
Elan's continuing restructuring efforts.  Elite now owns 100
percent of the joint venture company and intends to expedite the
development of the products that were developed within the
collaboration.

The joint venture has completed the initial Phase I study for
its first product, a once-a-day Oxycodone formulation.  The
study compared the once a day formulation against the twice-
daily reference product that is currently marketed. The data
showed comparable bioavailability. Accordingly, Elite intends to
proceed with the next stage of development. The US market for
twice a day oxycodone products exceeds $1 billion. Currently
there is no once a day formulation for this compound.

The joint venture has also been developing a second product in
the CNS therapeutic area to compete with a currently marketed
product whose US sales exceed $1 billion.

Dr. Atul Mehta, the President and CEO of Elite stated, "We are
excited to have obtained the world-wide development and
commercialization rights for these products. We anticipate
commencing larger studies on the first product in the near
future.   As a result of this transaction, we have regained
control over the products, and we are now in a position to make
the strategic decisions that will most efficiently move them
toward commercialization."

Under the termination agreement, Elite acquired all proprietary,
development and commercial rights for the worldwide markets for
the products developed by the joint venture. In exchange for
this assignment, Elite Research has agreed to pay Elan a royalty
on certain revenues that may be realized from the once-a-day
Oxycodone product only that has been developed by the joint
venture.  Elan and its transferees also retained Elite
securities that were issued in connection with the joint
venture, and those securities are being converted to Elite
common stock at a significant premium.

Elite Laboratories, a wholly owned subsidiary of Elite
Pharmaceuticals, Inc., specializes in oral drug delivery, and
applies its proprietary controlled release technology to the
development of delayed release, sustained release, targeted
release and pulse release products for NDA or ANDA submission.  
Elite has been issued several patents, and additional patent
applications are pending.

                           *    *    *

As reported in Troubled Company Reporter's August 2, 2002
edition, Standard & Poor's lowered its corporate credit rating
on Elan Corp., PLC to single-'B'-minus from double-'B'-minus,
and all of its other ratings on the specialty pharmaceutical
company and its affiliates. The ratings are removed from
CreditWatch, where they were placed on July 2, 2002, with
negative implications. The actions are due to Standard & Poor's
increased concern over Elan's ability to meet obligations as
they come due.

The low speculative-grade rating on Dublin, Ireland-based Elan
reflects the company's declining pharmaceutical sales prospects,
significant upcoming debt maturities and other funding needs,
and the uncertain value of its investment portfolio, mitigated
somewhat by its still substantial cash position. The outlook is
negative.


ENRON CORP: Grigsby Wants to Hire Hinton Sussman as Counsel
-----------------------------------------------------------
Michael Grigsby, a current employee, is a former Vice President
of Enron Corp's West Gas Trading Desk operation.  Due to his
former position, Mr. Grigsby has been requested by the Commodity
Futures Trading Commission and the Federal Energy Regulatory
Commission to attend a disposition and give testimony regarding
the Debtors' energy trading activities.

To prepare his testimony, Mr. Grigsby sought legal
representation from Swidler Berlin Shereff Friedman LLP, the
Debtors' Special Employees Counsel.  However, Swidler cannot
represent Mr. Grigsby due to a actual or potential conflict of
interest and recommended Jane Barrett of Dyer Ellis & Joseph
LLP.   Ms. Barrett also represents several clients on related
matters concerning the Debtors and thus suggested that Mr.
Grigsby should seek counsel elsewhere.

Accordingly, Mr. Grigsby seeks the Court's authority to retain
Hinton, Sussman, Bailey & Davidson LLP to represent him in the
Investigations, nunc pro tunc to March 8, 2002.

Michael J. Hinton, Esq., at Hinton Sussman Bailey & Davidson, in
Houston, Texas, relates that Hinton Sussman will bill the
Debtors for the services rendered based on its hourly rates and
seek reimbursement of its out-of-pocket costs.  Hinton Sussman's
current hourly rates are:

    Partners             $400
    Associates            250
    Legal assistants       75

Pursuant to Sections 105(a) 327(e) and 363(b) of the Bankruptcy
Code, Mr. Grigsby believes that the retention is warranted
because:

  -- the Debtors' retention of counsel for former and current
     employees is authorized as this will facilitate the
     Debtors' interest and the public interest in full
     disclosure.  Thus, the retention provides a tangible
     benefit to the Debtors' estate;

  -- he satisfies the requirement of the Order that he is only a
     witness in the Investigations and has no indication that he
     is under any investigation for his role in any activity
     while working for Enron Corp; and

  -- Swidler cannot represent him due to actual or potential
     conflict.

Mr. Hinton assures the Court that Hinton Sussman, its partners,
counsel, and associates do not have any known material adverse
interests at this time against the Debtors' estate.  Hence,
Hinton Sussman is a disinterested party in these Chapter 11
proceedings. (Enron Bankruptcy News, Issue No. 44; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


ENRON MANAGEMENT: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Enron Management, Inc.
        1400 Smith Street
        Houston, Texas 77002

Bankruptcy Case No.: 02-14977

Type of Business: Enron Management, Inc. is a managing company
                  for the benefit plans of Enron Corp. and
                  certain liabilities associated with those
                  plans.

Chapter 11 Petition Date: September 7, 2002

Court: Southern District of New York (Manhattan)

Judge: Arthur J. Gonzalez

Debtors' Counsel: Brian S. Rosen, Esq.
                  Weil, Gotshal & Manges LLP
                  767 Fifth Avenue
                  New York, New York 10153
                  212-310-8602
                  Fax: 212-310-8007
                  
                  and
   
                  Melanie Gray, Esq.
                  Weil, Gotshal & Manges LLP
                  700 Louisiana, Suite 1600
                  Houston, Texas 77002
                  Telephone: (713) 546-5000

Total Assets: $178,626,929

Total Debts: $170,827,822

Debtor's 20 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
Various Enron Corp. and    Contractual Benefit     $72,143,427
subsidiaries welfare        Debt
benefit plans -
postretirement benefits
1400 Smith Street
Houston, TX 77002
713-853-6161

Enron Corp. 1988           Contractual Benefit     $67,876,551
Deferral Plan              Debt
1400 Smith Street
Houston, TX 77002
713-853-6161

Houston Natural Gas        Contractual Benefit      $8,227,364
Corporation                 Debt
Deferred Income
Program
1400 Smith Street
Houston, TX 77002
713-853-6161

Enron Corp.                Contractual Benefit      $6,206,386
Director's Deferral        Debt
Plan
1400 Smith Street
Houston, TX 77002
713-853-6161

InterNorth, Inc.,          Contractual Benefit      $1,470,338
Director's Income Plan      Debt
1400 Smith Street
Houston, TX 77002
713-853-6161

PriceWaterhouseCoopers     Accounts Payable            $25,000

PriceWaterhouseCoopers     Accounts Payable            $15,380

Robert H. Shealor DBA      Accounts Payable            $13,125

Corestaff Services         Accounts Payable            $10,863

Bowne Business Solutions   Accounts Payable            $10,413

O.C. Tanner Co.            Accounts Payable            $10,162

Resources Connection       Accounts Payable             $2,513

CAD Technology Inc.        Accounts Payable             $1,260

Watson Wyatt Data Services Accounts Payable               $699

The Westar Company         Accounts Payable               $660

Vinson & Elkins            Legal Fees                     $475

Southwestern Bell          Accounts Payable               $459
Telephone

Cingular Wireless          Accounts Payable               $409

Investors Bank & Trust Co. Accounts Payable               $375

Texas Shredding Co., Inc.  Accounts Payable                $50


EQUITY INNS: S&P Revises Outlook to Neg. over Lowered Guidance
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook for
Equity Inns Inc., to negative from stable reflecting the
company's recently announced lowered earnings guidance and
Standard & Poor's expectation for a more modest lodging industry
recovery than previously anticipated.

Standard & Poor's also affirmed its single-'B'-plus corporate
credit rating and its triple-'C'-plus preferred stock rating on
the company. Memphis, Tennessee-based Equity Inns had total debt
outstanding of $352 million as of June 30, 2002.

"Based on management guidance, Equity Inns is expected to end
2002 with a total debt to EBITDA ratio in the low 5.0 times area
and interest coverage in the low 2.0x area. With limited
expected discretionary cash flow available to reduce debt and
our expectation for a continued challenging lodging environment,
credit measures are not expected to improve materially in the
near term," Standard & Poor's credit analyst Stella Kapur said.

Standard & Poor's also said that the ratings could be lowered in
the intermediate term if the lodging environment fails to
improve resulting in the further deterioration of Equity Inns'
credit measures. The potential for improvement could be affected
by external events, such as changes in the global political
landscape.

Equity Inns recently announced lowered EBITDA guidance of
between $20 million and $21 million for the third quarter of
2002 and between $13 million to $17 million for the fourth
quarter. This reflects a 9% decline year-over-year in EBITDA for
the third quarter and between a 10% to 30% decline year-over-
year for the fourth quarter. Fourth quarter guidance suggests
increased margin pressure during the period.


EXODUS COMMS: Balks At C&W's Retention of PricewaterhouseCoopers
----------------------------------------------------------------
EXDS is now more convinced that it should not be forced to
arbitrate its post-Closing dispute with Cable & Wireless as long
as PricewaterhouseCoopers is the proposed arbitrator.

Mark Minuti, Esq., at Saul Ewing LLP, in Wilmington, Delaware,
relates that the information was discovered when EXDS CEO
Richard M. Williamson contacted Sean Ballington, PwC's so-called
relationship partner, to obtain the information that Cable &
Wireless has refused to disclose to EXDS.  Cable & Wireless had
argued that the information sought was already moot in light of
the parties' supposed agreement to waive conflicts.

Mr. Williamson's inquiry with Mr. Ballington made known these
facts:

-- PwC is currently performing a substantial amount of work for
   Cable & Wireless,

-- PwC currently has several joint venture projects using
   services and personnel both of Cable & Wireless and PwC,

-- Mr. Ballington is the relationship partner for Cable &
   Wireless and Exodus and not EXDS, and

-- As relationship partner, Mr. Ballington is responsible for:

   a. communicating with all PwC partners performing work for a
      given client, and

   b. managing the relationship with the goal of obtaining
      additional assignments from the client.

According to Mr. Minuti, EXDS' waiver of conflicts was hinged on
the understanding that it only waived the dispute concerning
PwC's work for the now defunct Creditors' Committee of EXDS.  At
the time that the waiver was agreed upon, EXDS did not know of
PwC's relationship with Cable & Wireless.  Thus, EXDS did not
have the requisite knowledge to make a knowing waiver.

Mr. Minuti relates that the relationship between Cable &
Wireless and PwC could cloud PwC's objectivity especially
because of the known pressure that relationship partners,
including Mr. Ballington, exert on their partners to develop
business.  Cable & Wireless' evasiveness and its failure to
disclose the nature of its relationship with PwC, on the other
hand, give strength to the appearance of impropriety.

Mr. Minuti insists that the selection of a different and
impartial arbitrator is the most prudent and economic course to
take given the possibility that any decision by PwC, should it
be appointed the arbitrator, is vulnerable to later vacation due
to a conflict of interest.

                     Cable & Wireless Responds

Victoria Counihan, Esq., at Greenberg Traurig LLP, in
Wilmington, Delaware, argues that in rejecting PwC's engagement
based on newly-discovered information, EXDS is ignoring its
previous determination -- by the waiver agreement with Cable &
Wireless -- that there is no risk of bias in naming PwC as the
Independent Accountant so long as the person chosen by PwC to
arbitrate has not had direct involvement with the parties or
other interested entities and is screened from anyone who has or
has had such involvement.

The Court, should not allow EXDS to re-determine that issue and
renege on its agreement.  Ms. Counihan dismisses EXDS' argument
that only known conflicts can be waived in blanket waivers.  Ms.
Counihan points out that Section 122 of the Restatement of the
Law Governing Lawyers, blanket waivers are recognized as valid
even when the waiver is not supported by a screening mechanism.

According to Ms. Counihan, EXDS' position -- that only the
conflict arising from PwC's past work with the Creditors'
Committee was ignored by the waiver -- is inconsistent with the
agreement, which provides that "all conflicts" are waived.
(Exodus Bankruptcy News, Issue No. 25; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


FEDERAL-MOGUL: Deadline to Commence Litigation Moved to Oct. 16
---------------------------------------------------------------
For the fourth time, Federal-Mogul Corporation's Unsecured
Creditors' Committee, Asbestos Claimants Committee, the
Indenture Trustees, and the Legal Representative for the Future
Asbestos-Related Claimants and the Prepetition Agent, on behalf
of the Existing Lenders and the holders of Tranche C Loans, the
Surety Bond issuers, have agreed to move the deadline for the
Committees and the Future Representative to initiate an
adversary proceeding against the Prepetition Agent, the Existing
Lenders, the Surety Bond Issuers or the holders of the Tranche C
Loans:

  -- challenging the amount, validity, enforceability,
     perfection, or priority of the Existing Obligations or the
     liens on the Existing Obligations Collateral in respect
     thereof; or

  -- asserting any claims or causes of action.

In a Court-approved Stipulation, the parties agree:

  (a) to extend the Litigation Commencement Date until October
      16, 2002;

  (b) that the extension of the Litigation Commencement date is
      without prejudice to the right of the Prepetition Agent,
      the Existing Lenders, the holders of Tranche C Loans and
      the Surety Bond Issuers to, at any time, commence an
      action to establish the amount, validity, enforceability,
      perfection, or priority of the Existing Obligations or the
      liens on the Existing Obligations Collateral with respect
      to the Obligation or of the Tranche C Loans;

  (c) that in order to avoid duplication and unnecessary waste
      of resources, the Committees and the Future Representative
      will coordinate, and share the results of, their discovery
      requests to the Prepetition Agent, the Existing Lenders,
      the holders of Tranche C Loans and the Surety Bond
      Issuers.  The Committee and the Future Representative will
      not serve duplicative discovery requests on the
      Prepetition Agent, the Existing Lenders, the holders of
      Tranche C Loans and the Surety Bond Issuers and will not
      notice -- whether by subpoena or otherwise -- more than
      one deposition of the same individual representative of
      any of the Prepetition Agent, the Existing Lenders, the
      holders of Tranche C Loans and the Surety Bond Issues
      absent a showing of good cause as to why an additional
      deposition of that representative is necessary; and

  (d) nonetheless, that:

           * the deposition of a corporate representative
             designated pursuant to Rule 30(b)(6) of the Federal
             Rules of Civil Procedure and a separate deposition
             the same witness specifically noticed by name; and

           * a narrow deposition limited to privilege or other
             evidentiary issues and a separate deposition of the
             same individual on substantive issues;

      will not, in and of itself, constitute "duplicative
      discovery". (Federal-Mogul Bankruptcy News, Issue No. 24;
      Bankruptcy Creditors' Service, Inc., 609/392-0900)

Federal-Mogul Corp.'s 8.80% bonds due 2007 (FMO07USR1) are
trading at 19 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=FMO07USR1for  
real-time bond pricing.


FELCOR LODGING: S&P Changes Outlook to Neg. on Weak Performance
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook for
FelCor Lodging Trust to negative from stable, reflecting the
company's weaker-than-expected performance, given a more
moderate lodging industry recovery than was previously seen.

At the same time, Standard & Poor's affirmed its double-'B'-
minus' corporate credit and other ratings on the Irving, Texas-
based company. FelCor had total debt outstanding as of June 30,
2002, of $1.8 billion.

FelCor's debt leverage was previously weak for the rating, and
the time period under which credit measures are expected to
recover has now been lengthened.

"The negative outlook reflects the company's weak credit
measures and expectations that the lodging environment will
continue to be challenging over the intermediate term, said
Standard & Poor's credit analyst Craig Parmelee. "Ratings could
be lowered if the lodging environment does not strengthen over
the intermediate term, allowing FelCor's credit measures to
improve."

Standard & Poor's now expects that revenue per available room in
the industry will decline 2%-3% in 2002, compared to a previous
expectation of flat to slightly lower. RevPAR in 2003 is
expected to grow in the low single digits.

FelCor's management recently announced lowered earnings guidance
of $77 million-$80 million in EBITDA for the third quarter of
2002 and $320 million-$326 million for the full year 2002, a 13%
decline in EBITDA from the 2001 level.

While FelCor's credit measures are currently weak for the
rating, this factor is partially mitigated by its good quality
hotel portfolio which is well positioned for the long term.


FIBERNET TELECOM: Shareholders Approve Proposed Recapitalization
----------------------------------------------------------------
FiberNet Telecom Group, Inc. (Nasdaq: FTGX), a leading provider
of metropolitan optical connectivity, announced that the
required plurality of its stockholders approved all of the
proposals described in the Company's proxy statement filed on
September 4, 2002 and put forth at the Company's Annual Meeting
on October 3, 2002.  As a result, the Company now intends to
consummate its proposed recapitalization.

Certain of the proposals approved by stockholders pertained to
transactions relating to the recapitalization.  Those
contemplated transactions include converting $66.0 million of
senior secured bank debt into shares of common stock of the
Company at an effective conversion price of approximately $0.15
per share and issuing common stock to certain members of
executive management and existing institutional investors in a
new private placement financing.  The proposed recapitalization
would, if consummated, enable FiberNet to streamline its capital
structure and significantly reduce its outstanding indebtedness.

There are a number of conditions to closing these transactions,
including receipt of credit approval from each lender;
negotiating definitive documentation; completion of the equity
financing, with respect to the debt conversion; completion of
the debt conversion, with respect to the equity financing; and
conversion of all currently outstanding convertible preferred
securities and notes into common stock.  The conversion of
senior secured debt into equity would also involve certain
amendments to the provisions of the Company's senior secured
credit facility.

There can be no assurance that the Company will be able to
successfully effectuate any or all of the transactions described
above.  Should the Company succeed in doing so, these
transactions will be substantially dilutive to FiberNet's
existing stockholders.

FiberNet Telecom Group, Inc., enables carriers to connect
directly with one another with unprecedented speed and
simplicity over its 100% fiber optic networks.  FiberNet manages
high-density short-haul networks between carrier hubs within
major metropolitan areas.  By using FiberNet's next-generation
infrastructure, carriers can quickly and efficiently deliver the
full potential of their high bandwidth data, voice and video
services directly to their customers.

FiberNet has lit multiple strands of fiber on a redundant and
diversely routed SONET ring and IP architecture throughout New
York City.  In addition, the Company also provides services in
Chicago and Los Angeles.  FiberNet sets a new standard for the
fastest local loop delivery and connectivity in carrier hubs and
Class A commercial buildings, at speeds up to OC-192 SONET and
Gigabit Ethernet.  For more information on FiberNet, please
visit the Company's Web site at http://www.ftgx.com

Fibernet's working capital deficiency reaches $108 million, as
of June 30, 2002.


FOAMEX INT'L: Terminates Talks to Sell GFI Carpet Cushion Assets
----------------------------------------------------------------
Foamex International Inc. (Nasdaq: FMXI), the leading
manufacturer of flexible polyurethane and advanced polymer foam
products in North America, announced that discussions with
Leggett & Platt for the sale of Foamex's GFI carpet cushion
business have been terminated.

On September 10, 2002 the Company announced that it had signed a
letter of intent with Leggett & Platt under which Foamex was to
sell GFI to Leggett & Platt. The two companies were unable to
reach agreement on definitive terms for the transaction.

Marshall Cogan, Foamex's Chairman and Founder, said: "During the
course of negotiations we came to the conclusion that the terms
of the transaction were not in the best interest of Foamex's
shareholders. We are committed to growing the profitability of
our carpet cushion business and to providing customers with the
high level of service and superior products they are accustomed
to receiving from us."

Foamex, headquartered in Linwood, PA, is the world's leading
producer of comfort cushioning for bedding, furniture, carpet
cushion and automotive markets. The Company also manufactures
high-performance polymers for diverse applications in the
industrial, aerospace, defense, electronics and computer
industries as well as filtration and acoustical applications for
the home. For more information visit the Foamex Web site at
http://www.foamex.com  

At June 30, 2002, Foamex's balance sheet shows a total
shareholders' equity deficit of about $81 million.


FRISBY TECHNOLOGIES: Falls Short of Nasdaq Listing Standards
------------------------------------------------------------
Frisby Technologies, Inc. (Nasdaq: FRIZ), announced that it has
received a letter from the Nasdaq Listing Qualifications Staff
dated September 30, 2002 indicating that the company does not
comply with either the minimum net tangible assets or the
minimum stockholders' equity requirements for continued listing
set forth in Marketplace Rule 4310(C)(2)(B) and that its common
stock would be delisted from the Nasdaq SmallCap Market at the
opening of business on October 8, 2002.

The Company said it intends to request an oral hearing before a
Nasdaq Listings Qualifications Panel to appeal the Staff's
determination, which it expects would be scheduled within
approximately 45 to 60 days.  Pending the appeal process, the
company's shares would continue to be listed on the Nasdaq
SmallCap Market.

The Company previously disclosed in its form 10-QSB filed with
the SEC for the quarter ended June 30th, 2002 that it had been
notified by Nasdaq that the bid price of its common stock had
closed below the minimum $1.00 per share requirement for 30
consecutive trading days and, therefore, did not satisfy
Marketplace Rule 4310(C)(4).  The Company was provided until
February 3, 2003 to regain compliance.  The Staff's September 30
letter indicated that the Company would also need to address
compliance with this requirement at the hearing.

The Company anticipates continuing its efforts to obtain
sufficient new equity capital to enable it to regain and sustain
compliance with Nasdaq minimum listing requirements.  The
Company cannot provide any assurance that it will be successful
in its efforts to maintain continued listing.  If its common
stock is delisted, the company anticipates that its shares would
likely trade on the Over-the-Counter Bulletin Board.  The
company's stock is also listed on the Boston Stock Exchange
under the ticker symbol FRZ.


FRUIT OF THE LOOM: Creditors Trust Asks Court to Set-Up Reserve
---------------------------------------------------------------
David B. Stratton, Esq., at Pepper & Hamilton, reminds the Court
that Fruit of the Loom, Ltd.'s Unsecured Creditors Trust, was
established pursuant to the April 30, 2002 Unsecured Creditors
Trust Agreement.  The Plan Agreements provide that the Trust
will complete the claims analysis and objection process for
Class 4A Claims and make an Initial Distribution no later than
180 days after the Effective Date.  Additionally, the Trust will
prosecute, settle or resolve the Creditors' Committee Action.

The Plan also provides that on the initial Distribution Date,
the Trust will "establish a separate Disputed Reserve" for
disputed claims consisting of "ratable proportion of all cash or
other property allocated for distribution on account of each
disputed claim based upon the asserted amount," or an amount
agreed to by the claimholder and the Trust, or as determined by
the Court.

By this motion, the Unsecured Creditors Trust asks the Court to
establish the appropriate reserve for all unliquidated and
contingent claims that have not yet been resolved and allowed.

On the Effective Date, there were approximately 3,450 Class 4A
Claims. The Trust has been filing objections to these claims
since August 6, 2002.  Numerous claims have been disallowed by
the Court, there are approximately 2,925 Class 4A Claims
remaining, of which 565 have been allowed.

Mr. Stratton reports that the Trust is currently holding
$16,459,967 for potential distribution.  The Trust also holds
$2,705,000 that is allocated for case administration.

The Trust, in conjunction with the Unsecured Creditors Trust
Advisory Committee, is investigating the potential prosecution
of the claims against the former officers and directors of Fruit
of the Loom.  The Litigation Claims must be initiated by no
later than November 30, 2002.

The Trust proposes to reserve $1,000,000 for fees and expenses
associated with the potential litigation against former
directors and officers.  This will leave $15,459,967 available
for distribution to Class 4A Claims.  The aggregate amount of
Initial Allowed Claims is $72,159,284.  Of the disputed claims,
2,064 are asserted in liquidated amounts aggregating
$186,471,989, leaving 264 unliquidated disputed claims.

Based upon the monetary value of the asserted claims and the
funds available, Mr. Stratton predicts a payout of around
3.9297%.  The estimated amount that the Trust proposes to
establish as the Disputed Reserve is $134,784,756.86:

                                             Estimate of Claims
No. of Claims     Category                 for Disputed Reserve
-------------     --------                 --------------------
     20           Stated Amounts                 $59,676,345
      9           Otherwise Liquidated           $50,208,912
    172           Vacation Pay                    $7,249,500
     28           Executives                     $10,500,000
     32           Miscellaneous                   $7,150,000

Mr. Stratton explains that the Disputed Reserve will permit
creditors with fixed, liquidated and undisputed claims to
receive a payment or distribution on their Allowed Claims
without waiting for the complete resolution of all claims and
will allow the Trust to comply with the explicit terms of the
Trust Agreement. (Fruit of the Loom Bankruptcy News, Issue No.
60; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


GALEY & LORD: Exclusive Period Stretched to December 30
-------------------------------------------------------
By order of the U.S. Bankruptcy Court for the Southern District
of New York, Galey & Lord, Inc., and its debtor-affiliates
obtained an extension of their exclusive periods.  The Court
gives the Debtors, until December 30, 2002, the exclusive right
to file their plan of reorganization and until March 3, 2003 to
solicit acceptances of that Plan.

G&L, a leading global manufacturer of textiles for sportswear,
including cotton casuals, denim, and corduroy, and is a major
international manufacturer of workwear fabrics, filed for
chapter 11 protection on February 19, 2002 together with its
affiliates. When the Company filed for protection from its
creditors, it listed $694,362,000 in total assets and
$715,093,000 in total debts. Michael J. Sage, Esq., at Stroock &
Stroock & Lavan LLP, represents the Official Committee of
Unsecured Creditors.

Galey & Lord Inc.'s 9.125% bonds due 2008 (GYLD08USR1),
DebtTraders reports, are trading at 14 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=GYLD08USR1
for real-time bond pricing.


GUILFORD MILLS: Successfully Emerges from Chapter 11 Proceeding
---------------------------------------------------------------
Guilford Mills, Inc., (OTC Bulletin Board: GMILV) announced that
its previously-confirmed plan of reorganization became effective
Friday, October 4, 2002.  The announcement marks the Company's
swift emergence from bankruptcy proceedings, which commenced
only 6-1/2 months ago.

The bankruptcy court had approved Guilford Mills' reorganization
plan on September 19, 2002, after the Company's creditors and
stockholders had voted overwhelmingly to accept it.

Emerging from bankruptcy, Guilford Mills now has senior debt of
approximately $145 million, down from $270 million when it
entered the proceedings.  The senior debt consists primarily of
a three-year revolving credit facility and a three-year term
loan.  The Company's suppliers are being paid in full.  Guilford
Mills' senior lenders now own 90% of the Company's equity.

"I spent a few days after the court's September 19 approval
visiting with many of our 3,500 associates, thanking them for
their tireless efforts to bring this reorganization to a
successful conclusion," said John A. Emrich, Guilford Mills'
President and Chief Executive Officer.  "I saw a work force that
is fired up and ready to take on the world.  I'm very excited
about what we're going to accomplish over the next year."

Friday, the effective date of the reorganization plan, all
shares of Guilford Mills' existing common stock, will be
cancelled, and the Company will issue its new common stock:  90%
to its senior lenders and 10% to its existing common
stockholders pro rata.

The record date under the plan of reorganization for determining
the existing common stockholders who are entitled to receive
shares of New Common Stock is the close of business on October
3, 2002.  After the record date, the Company is not required to
recognize or process any further changes in the holders of Old
Common Stock.

Shares of New Common Stock will be issued to record holders at a
ratio of approximately one (1) share of New Common Stock for
every 34.776338 shares of Old Common Stock.  No fractional
shares of New Common Stock, or cash in lieu thereof, will be
issued to a holder.  Instead, fractions of one-half or greater
will be rounded to the next higher whole number and fractions of
less than one-half will be rounded to the next lower whole
number.  All shares of Old Common Stock will be automatically
cancelled.

The issuance and distribution of shares of New Common Stock,
which will be processed by the Company's transfer agent,
American Stock Transfer & Trust Company, will take place as soon
as possible.  Shareholders need not return their Old Common
Stock certificates or take any other actions in order to receive
shares of New Common Stock.  The Company expects that there will
be approximately 5.5 million shares of New Common Stock
outstanding immediately following the issuance under the plan of
reorganization.

New Common Stock will be quoted on the OTC Bulletin Board
initially under a new ticker symbol "GMILV," and within several
days, the symbol will change to "GMIL."  The Old Common Stock
will cease to be quoted.

Guilford Mills and its domestic subsidiaries filed voluntary
petitions for reorganization under Chapter 11 of the U.S.
Bankruptcy Code on March 13, 2002. The Company had exited
several businesses over the previous year to focus on its
strongest operations: automotive, technical textiles and select
apparel businesses.  The bankruptcy reorganization allowed
Guilford Mills to reduce its debt to a level more appropriate
for its new size.

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.


INSPIRE INSURANCE: Texas Court Approves Disclosure Statement
------------------------------------------------------------
INSpire Insurance Solutions, Inc., (OTC Pink Sheets: NSPRQ.PK)
filed with the U.S. Bankruptcy Court for the Northern District
of Texas, Fort Worth Division a proposed plan of reorganization
and a proposed disclosure statement describing the Plan on
August 27, 2002.  The bankruptcy court approved the disclosure
statement at a hearing held on September 24, 2002. INSpire has
commenced a solicitation of votes for approval of the Plan and a
confirmation hearing on the Plan is scheduled for October 24,
2002.  The deadline to object to and vote on the Plan is October
21, 2002.

The Plan is subject to continuing negotiations and contemplates
the sale of all the Company's operating assets to CGI Group,
Inc., (NYSE: GIB; Toronto: GIB.A).  The Plan, along with all
other filings, can be obtained from INSpire's Web site at
http://www.nspr.com  Execution of a definitive purchase  
agreement with CGI Group, Inc., is subject not only to the
bankruptcy court's approval of the Plan, but also the
negotiation of an agreement satisfactory to both parties and
other conditions.

Under the Plan, INSpire's business operations will be integrated
within CGI Group, Inc., and through CGI Group, Inc., INSpire
will continue to offer complete policy and claims administration
outsourcing, IT outsourcing, and software services.  INSpire
anticipates that all of its customer contracts will be assumed
by and assigned to CGI Group, Inc., and will work with its
customers to make the transaction as smooth as possible.

If the Plan is approved, INSpire's existing common stock will be
cancelled on the effective date of the Plan.  Under the Plan,
any money that INSpire receives (and remaining assets, if any)
will be transferred to a trust.  The cash proceeds from the
trust will be used to satisfy claims of INSpire.  If creditors
are paid in full, and after the expenses incurred in
implementing the plan are satisfied, any remaining cash will be
divided pro rata to shareholders according to shares of INSpire
common stock held at a date that is fifteen days after the
bankruptcy court approves the Plan.  At this time, INSpire is
unable to determine whether there will be any remaining cash to
distribute to shareholders.

INSpire Insurance Solutions, Inc., offers policy and claims
administration solutions for property and casualty insurance
carriers, managing general agencies, and brokers.  As one of the
foremost providers of integrated software systems and turnkey
business process outsourcing, INSpire serves clients with needs
to enter new markets quickly, reduce expenses, increase customer
satisfaction and focus on core competencies.  Additional
information can be obtained from INSpire's Web site at
http://www.nspr.comor by calling 817-348-3999.


INTEGRATED SECURITY: June 30 Balance Sheet Upside-Down by $8MM
--------------------------------------------------------------
Integrated Security Systems Inc., was formed in December 1991 as
a Delaware corporation.  The Company became publicly traded in
April 1993.  The Company designs, develops, manufactures,
distributes and services security and traffic control products
used in the commercial, industrial and government sectors
through two wholly owned subsidiaries, B&B Electromatic, Inc.,
and Intelli-Site, Inc.  B&B's products are used in thousands of
locations across the country.

The Company has experienced unanticipated delays in the
completion of its Intelli-Site(R) software  product and has not
met the anticipated sales levels for this product.  In addition,
the audit report of Grant Thornton LLP, the Company's
independent auditors, for the Company's consolidated financial
statements for the year ended June 30, 2002 states that in
fiscal 2002 and 2001 the Company has suffered significant losses
from operations and at June 30, 2002 had a stockholders' deficit
of $8,099,160.  The audit report further states that these
matters raise substantial doubt about the Company's ability to
continue as a going concern.

The Company's total sales decreased by $0.3 million, or 7%,
during the fiscal year ended June 30, 2002, from $5.3 million in
fiscal 2001. This decrease is primarily due to a decrease in
road and bridge sales at the Company's B&B subsidiary together
with a slight decrease in sales at the Intelli-Site subsidiary.  
For the twelve months ended June 30, 2002, approximately 97% of
the Company's revenues were generated from the sale of products
manufactured by the Company compared to 94% for the twelve
months ended June 30, 2001.

Cost of sales as a percentage of sales remained comparable at
64% for the fiscal year ended June 30,  2002 and at 68% for the
fiscal year ended June 30, 2001. For the twelve months ended
June 30, 2002,  approximately 99% of the Company's cost of sales
were related to the products manufactured by the Company,
compared to 89% for the twelve months ended June 30, 2001.  This
increase in the percentage of cost of sales related to
manufactured products is due to an unfavorable change in product
mix sales at B&B, coupled with a decrease in costs related to
the project revenue decrease at the Intelli-Site, Inc.,
subsidiary.

The gross margin percentage increased from 32% in fiscal 2001 to
36% in fiscal 2002.  The increase was primarily due to increased
software only sales at Intelli-Site, but was offset by a
decrease at B&B due to an unfavorable change in product mix
sales.

Selling, general and administrative expenses decreased by 36%,
or by $1.5 million, during the fiscal  2002 period compared to
fiscal 2001 due to overall company reduction in staffing and
operating expenses.

Research and development expenses decreased approximately
$95,000 during fiscal period 2002 compared to fiscal 2001 due to
decreased staffing at the Intelli-Site subsidiary.

Other income consists of the gain on the sale of the Company's
B&B subsidiary VT-6802 railroad crash barrier and related
technology.

During fiscal 2002, interest expense increased by approximately
$168,000 compared to fiscal 2001.  Interest expense on the
Company's current outstanding debt decreased by approximately
$0.6 million.  The Company did, however, incur approximately
$0.8 million in non-cash interest expense relating to  warrants
that were issued in connection with securing additional
financing in order to meet working capital needs.

In exchange for an aggregate of $150,000 cash investment,
Integrated Security Systems, Inc. issued a  promissory note to
each of Frost National Bank FBO Renaissance Capital Growth &
Income Fund III, Inc. and Frost National Bank FBO Renaissance US
Growth Investment Trust PLC on September 5, 2002. Each of the
two promissory notes is in the original principal amount of
$75,000 and has an annual interest rate of 8%. The promissory
notes, plus interest, are due on September 5, 2003. Interest is
payable in monthly installments on the first day of each month.

In order to explain the Company's current financial position and
what led to the changes in the Company's financial position, the
following is a brief summary of the recent history of the
Company and its subsidiaries.

The Company's operating cash deficit has been increasing as a
result of lower revenues and higher  than budgeted development
costs.  In 1999, management refocused the Company on two of its  
subsidiaries, B&B Electromatic, Inc., and Intelli-Site, Inc.,
and sold its other subsidiaries, as a part of the Company's
repositioning strategy. Intelli-Site, Inc., manufactures the
Intelli-Site(R)software product and B&B Electromatic, Inc.,
manufactures traffic control, safety systems and safety
barriers.

When the Company decided to shift its focus, management assumed
that the development of its Intelli-Site(R) software product was
complete.  However, due to unanticipated delays in the
completion of the product, the Company did not meet the
anticipated sales levels for the product and the Company  
experienced operating cash shortfalls.  In addition, the
anticipation by customers of a new requirement concerning the
Underwriters' Laboratories UL325 listing for gate operators
caused B&B to experience a significant downturn in perimeter
security sales.  B&B received UL compliance listing in July
2000. B&B also experienced a much lower sales volume than
anticipated for the new railroad  barrier product, of which the
patents and certain technology related to the railroad barrier
product were sold in fiscal 2002.

To reiterate, the Company has experienced significant losses
during fiscal 2002 and 2001 and at June 30, 2002 had a
stockholders' deficit of $8,099,160.  Management expects losses
to continue through the majority of fiscal 2003. In order to
meet working capital needs, the Company will need to receive  
additional financing either through the sale of assets, equity
placement and/or additional debt. Failure to receive such
financing could jeopardize the Company's ability to continue as
a going concern.


IPALCO: Parent's Downgrade Prompts S&P to Cut Corp Rating to BB+
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
ratings on The AES Corp.'s (B+/CW-Neg/--) Indianapolis, Indiana-
based subsidiary IPALCO Enterprises Inc., and its vertically
integrated electric utility Indianapolis Power & Light Co., to
double-'BB'-plus from triple-'BBB'-minus solely due to their
rating linkage to AES Corp.

All ratings have been placed on CreditWatch with negative
implications.

At the same time, Standard & Poor's lowered IPALCO's senior
unsecured debt rating to double-'BB'-minus from double-'BB'-
plus. IPL's senior secured debt ratings were lowered to double-
'BB'-plus from triple-'BBB'-minus, senior unsecured debt to
double-'BB'-minus from double-'BB'-plus, and preferred stock to
single-'B'-plus from double-'B'. The ratings on CILCORP Inc.,
the direct parent of Central Illinois Light Co., remain on
CreditWatch with positive implications pending CILCORP's and
Central Illinois Light's sale by AES to higher rated Ameren
Corp.

"The rating action is directly attributable to the downgrade of
AES' ratings," said Standard & Poor's credit analyst Barbara
Eiseman. "There have been no other events that in and of
themselves would have caused a rating action on these
subsidiaries," she added.

In most circumstances, Standard & Poor's will not rate the debt
of a wholly owned subsidiary higher than the rating of the
parent. Exceptions can be made, and were in this case, on the
basis of the cumulative value provided by enhancements such as
structural protections, covenants, a pledge of stock, and an
independent director, assuming the stand-alone credit quality of
the entity supports such elevation.

These provisions serve to make these subsidiaries bankruptcy
remote from a sponsor with weaker credit quality. Standard &
Poor's views these provisions as supportive in that they reduce
the risk of a subsidiary being filed into bankruptcy in the
event of a parent bankruptcy, but does not view them as 100%
preventative of such a scenario. Therefore, Standard & Poor's
limits the rating differential provided by such structural
enhancements to three notches. On that basis, AES subsidiaries'
corporate credit ratings cannot be higher than double-'BB'-plus.


ISTA PHARMACEUTICALS: Fails to Meet Nasdaq Listing Guidelines
-------------------------------------------------------------
ISTA Pharmaceuticals, Inc., (Nasdaq: ISTA) has received a Nasdaq
Staff Determination letter indicating that the Company is not in
compliance with the minimum bid price requirement for continued
listing set forth in Marketplace Rule 4450(a)(5), and that its
securities are therefore subject to delisting.  ISTA believes
that its previously announced plan for a reverse stock split at
a ratio between 1-for-7 and 1-for-10 will bring the Company back
into compliance with the Nasdaq rule.

ISTA has requested an oral hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination.  The
Company's securities will remain listed, pending a decision by
the Panel.  At the hearing, which is expected to be scheduled
within the next 45 days, ISTA will present its plan for
regaining compliance to the Nasdaq Panel.  Although there can be
no assurance that the Panel will grant ISTA's request for
continued listing, ISTA is confident in its ability to present a
definitive plan to regain compliance.

The Nasdaq Staff Determination letter also noted the Nasdaq
Staff's belief that ISTA's previously announced plan for a $44
million financing "provided a definitive plan" to bring the
Company back into compliance with Marketplace Rule 4450(a)(3),
which governs net tangible assets and shareholders' equity, and
that ISTA would not be subject to delisting for this deficiency.

ISTA Pharmaceuticals is focused on saving and improving eyesight
by developing proprietary therapeutic products.  ISTA's product
candidates and programs address serious diseases and conditions
of the eye such as vitreous hemorrhage, diabetic retinopathy,
hyphema, glaucoma, ocular pain and inflammation.  Building on
this pipeline, ISTA's goal is to become a fully integrated
specialty pharmaceutical company by acquiring complementary
products, either already marketed or in development.


IT GROUP: Court Approves Shaw Master Services Agreement
-------------------------------------------------------
The IT Group, Inc., and its debtor-affiliates obtained the
Court's authority to enter into a Master Services Agreement with
Shaw Environmental Inc., a subsidiary of Shaw Group Inc.

The salient terms of the Master Services Agreement are:

  (a) The provision of environmental consulting and engineering
      services, including, technological services relating to
      the environment, site assessment, remediation and
      restoration, and laboratory analysis by Shaw
      Environmental, Inc.;

  (b) A one-year term from the date of execution, subject
      to Bankruptcy Court approval.  If the Bankruptcy Court
      disapproves of IT Group's entry into the Agreement, then
      all costs incurred by Shaw Environmental will be deemed a
      priority administrative expense;

  (c) Compensation:

        (i) Shaw Environmental's fees will be established
            according to its published rate schedules in effect
            on the date when the services are performed, subject
            to a discount of one category rate less than that
            associated with an individual's project function;

       (ii) The fees are payable by the earlier of:

            -- 7 calendar days after IT Group receives payment
               from a third party; or

            -- 90 days after IT Group's receipt of the invoice;

      (iii) Shaw's fees will not exceed $1,000,000, unless
            otherwise agreed to by both parties;

  (d) Either party may terminate the Agreement, with or without
      cause, upon 30 days prior written notice to the other; and

  (e) Neither party will assign or delegate any of its duties
      or obligations under the Master Services Agreement without
      the prior consent of the other.  Notwithstanding the
      foregoing, Shaw may assign or subcontract all or any
      portion of the services to one or more of its subsidiaries
      or affiliates or to other persons as it deems appropriate.    
      (IT Group Bankruptcy News, Issue No. 18; Bankruptcy   
      Creditors' Service, Inc., 609/392-0900)  


ITC DELTACOM: Obtains Overwhelming Acceptance of Reorg. Plan
------------------------------------------------------------
ITC-DeltaCom, Inc., an integrated telecommunications and
technology provider to businesses in the southern United States,
announced that all classes of creditors and stockholders voting
have overwhelmingly approved its proposed plan of
reorganization.

According to the final tally of votes received by the October 2,
2002 voting deadline, the plan was approved by approximately
99.8% of the senior notes and 100% of the convertible notes that
voted in terms of principal amount voted. The plan also was
approved by 100% of the shares of the Company's preferred stock
that voted on the plan and approximately 98.3% of the shares of
common stock that voted on the plan. The final voting report
will be filed next week with the United States Bankruptcy Court
for the District of Delaware.

The reorganization plan remains subject to confirmation by the
bankruptcy court. A hearing on confirmation of the plan is
scheduled for October 10, 2002.

As previously announced, under the terms of the proposed plan:

     --  All of the Company's $415 million principal amount of
senior note debt will be eliminated and the Company's senior
noteholders will receive 81.5% of the reorganized Company's
common stock.

     --  All of the Company's $100 million principal amount of
subordinated convertible note debt will be eliminated and the
Company's convertible noteholders will receive 5% of the
reorganized Company's common stock.

     --  The existing holders of the Company's common stock,
Series A preferred stock and Series B preferred stock
collectively will receive a total of 1% of the reorganized
Company's common stock.

     --  Campbell B. Lanier, III, a director and current
stockholder, SCANA Corporation, a current stockholder, and other
investors have agreed to purchase $30 million of a new issue of
the reorganized Company's convertible preferred stock. The
preferred stock will be convertible into a total of 10.5% of the
reorganized Company's common stock, and the purchasers also will
receive warrants to purchase up to an additional 2% of the
reorganized Company's common stock. In consideration for this
financing commitment, these investors will receive shares of
common stock representing 2% of the reorganized Company's common
stock.

     --  In a rights offering to its existing common and
preferred stockholders conducted pursuant to the plan, the
existing stockholders will be entitled to purchase on a pro rata
basis, up to a specified amount, the convertible preferred stock
and warrants that Mr. Lanier, SCANA and the other investors have
agreed to purchase. The purchase commitments of these investors
will be proportionately reduced by any purchases made in the
rights offering.

     --  Assuming repayment of certain capital lease
obligations, the Company expects that its total indebtedness
will be reduced from approximately $724 million at March 31,
2002 to approximately $194 million of indebtedness under its
senior credit facility and capital leases. As a result, the
Company also estimates that its 2002 annual interest expense on
a pro forma basis will decrease from approximately $55 million
to approximately $13 million.

Additional information about the proposed plan of reorganization
is contained in ITC-DeltaCom's filings with the Securities and
Exchange Commission.

If the bankruptcy court approves the proposed plan, it is
expected that the plan would be implemented, and that ITC-
DeltaCom would exit chapter 11 proceedings later this month.

ITC-DeltaCom, headquartered in West Point, Georgia, provides,
through its operating subsidiaries, voice and data
telecommunications services on a retail basis to businesses in
the southern United States and is a regional provider of
broadband transport services to other telecommunications
companies. ITC-DeltaCom's business communications services
include local, long distance, enhanced data, Internet access,
managed IP, network monitoring and management, operator
services, and the sale and maintenance of customer premise
equipment. ITC-DeltaCom also offers colocation, web hosting, and
managed and professional services. The Company operates 35
branch offices in nine states, and its 10-state fiber optic
network of approximately 9,980 miles reaches approximately 175
points of presence. ITC-DeltaCom has interconnection agreements
with BellSouth, Verizon, Southwestern Bell and Sprint for resale
and access to unbundled network elements and is a certified
competitive local exchange carrier in Arkansas, Texas, and all
nine BellSouth states. For additional information about ITC-
DeltaCom, please visit the Company's Web site at
http://www.itcdeltacom.com


KMART CORP.: Six Landlords Want Bids for $1.7 Mill. Lease Claims
----------------------------------------------------------------
Six landlords, owed $1,698,346.74 by Kmart Corporation, want to
sell their claims against the retailer to the highest bidder.  
The claims arise from the Debtors' January 2002 rejection of two
99-year Lease Agreements entered into with S.S. Kresge Company
in the 1920s for property located in Illinois.  The Landlords
filed their proofs of claim on July 29, 2002.  The Landlords are
in possession of the property Kmart walked away from and it
hasn't been re-rented.  The claims include damages for a 16,000
square-foot structure Kmart razed and was supposed to replace,
but didn't.  

For further information concerning the Landlords' claims and to
submit an all-cash bid or a bid offering the Landlords a minimum
guaranteed and non-refundable cash payment upon assignment
followed by an additional cash payment upon final liquidation,
contact:

          Nancy A. Mitchell, Esq.
          John T. Gregg, Esq.
          Greenberg Traurig, P.C.
          77 West Wacker Drive, Suite 2400
          Chicago, IL 60601
          Telephone (312) 456-8400
          Fax (312) 456-8435


LEAP WIRELESS: Fails to Satisfy Nasdaq Listing Requirements
-----------------------------------------------------------
Leap Wireless International, Inc. (Nasdaq: LWIN), received a
NASDAQ Staff Determination on Oct. 3, 2002, indicating that the
Company has failed to comply with NASDAQ's shareholder approval
requirements set forth in Marketplace Rule 4350(i)(1)(B), that
it has failed to comply with the net tangible assets and
stockholder's equity requirements for continued listing on the
Nasdaq National Market as set forth in Marketplace Rule
4450(a)(3), and that it has raised separate public interest
concerns under Marketplace Rules 4300 and 4330(a)(3). As a
result, NASDAQ has notified Leap that its Common Stock is
therefore subject to delisting from the Nasdaq National Market
on Oct. 11, 2002. The Company intends to request a hearing
before a NASDAQ Listing Qualifications Panel to review the Staff
Determination. There can be no assurance, however, that the
Panel will grant the Company's request for continued listing.
Should the Company not prevail in its appeal, the Company
believes that its Common Stock will likely be quoted on the
Over-the-Counter Bulletin Board (OTC:BB) following its delisting
from The Nasdaq National Market.

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


LODGIAN INC: Court Approves Proposed Solicitation Procedures
------------------------------------------------------------
Lodgian, Inc., and its debtor-affiliates obtained Court approval
to establish procedures for the solicitation and tabulation of
creditors' votes to accept or reject the Company's chapter 11
Plan of Reorganization.

After the Court has approved the Disclosure Statement as
containing adequate information as required by Section 1125 of
the Bankruptcy Code, the Debtors propose to mail or cause to be
mailed solicitation packages containing copies of:

-- the Order approving this Motion and the Disclosure Statement,

-- the Disclosure Statement Approval Notice,

-- the Confirmation Hearing Notice; and

-- the approved form of the Disclosure Statement.

The Solicitation Packages will be mailed no later than September
30, 2002 to:

-- the parties-in-interest listed on the Master Service List,

-- attorneys for the Committee,

-- the U.S. Trustee,

-- all persons or entities that filed proofs of claim on or
   before the date of the Disclosure Statement Notice, except to
   the extent that a claim was paid pursuant to, or expunged by,
   prior order of the Bankruptcy Court,

-- all persons or entities listed in the Debtors' schedules of
   assets and liabilities dated March 5, 2002, as holding
   liquidated, non-contingent, and undisputed claims, in an
   amount greater than zero,

-- the transfer agent and registered holders of the Debtors'
   senior subordinated note claims, and CRESTS claims,

-- all other parties-in-interest that have filed a request for
   notice pursuant to Bankruptcy Rule 2002 in the Debtors'
   Chapter 11 cases,

-- the Securities & Exchange Commission,

-- the Internal Revenue Service,

-- the Department of Justice,

-- the Pension Benefit & Guaranty Corp.,

-- any entity that has filed with the Court a notice of transfer
   of a claim under Bankruptcy Rule 3001(e) prior to the date of
   the Disclosure Statement Notice, and

-- any other known holders of claims against the Debtors,
   provided that the Debtors will not be required to serve the
   foregoing on any of the Debtors' creditors whose claims will
   be paid in full prior to the effective date.

The Solicitation Package will not be sent to the members of
Classes 8, 10-A and 11.  Instead, the members of Classes 8, 10-A
and 11 will receive a Notice of Non-Voting Status.  Members of
Class 8 will also receive a Short Form DS.  The Debtors do not
propose to distribute any Solicitation Packages to holders of
interests in Class 9, as these holders are either Debtors or
affiliates of Debtors.

In addition, the Debtors will provide additional solicitation
materials to be included in the Solicitation Packages.  
Specifically, holders of claims in classes entitled to vote to
accept or reject the Plan will receive:

-- an appropriate form of Ballot and a Ballot return envelope,

-- a joint letter from the Debtors and the Committee
   recommending acceptance of the Plan, and

-- any other materials as the Court may direct.

Solicitation Packages for holders of claims against, or
interests in, any Debtor placed within a  class under the Plan
that is deemed to accept or reject the Plan will not include a
Ballot.  Instead, the Solicitation Packages for the holders of
these claims and interests will include a Notice of Non-Voting
Status.  To avoid duplication and reduce expenses, the Debtors
propose that creditors who have multiple or duplicate claims
against the same Debtor entity in any given class should be
required to receive only one Solicitation Package and one Ballot
for voting their claims with respect to that class.  In
addition, the Debtors request that if a creditor holds more than
one claim against one or more Debtors, and therefore may receive
multiple Ballots, the Debtors are only required to send a
creditor one Solicitation Package with the applicable Ballots.

The Debtors will distribute to certain creditors forms for the
Ballots that are based on Official Form No. 14, but have been
modified to address the particular aspects of these Chapter 11
cases and to include certain additional information that the
Debtors believe to be relevant and appropriate for each class of
claims or interests.  

The Court also allows the Debtors to send only one Ballot to
creditors holding claims against multiple Debtors in the same
class.  Through the use of a single form Ballot per class,
creditors can elect to vote in the same manner for all claims
against the applicable Debtors or can specify separate voting
treatment for all claims against a particular Debtor.

The Debtors will send to holders of claims or interests which
are not entitled to vote under the Plan, and all known parties
to executory contracts and unexpired leases who either  do not
hold allowed filed or scheduled claims or whose claims have been
scheduled as contingent, unliquidated, or disputed, a notice of
non-voting status, which identifies the treatment of the classes
designated.

Procedurally, the Debtors propose to send Notices of Non-Voting
Status to the record holders of the Class 8 Old Lodgian Common
Stock Interests as of the close of business on the Record Date,
including, without limitation, brokers, banks, dealers, or other
agents or nominees.  Mr. Rogoff assures the Court that each
Stock Intermediary would be entitled to receive reasonably
sufficient copies of the Notice of Non-Voting Status to
distribute to the beneficial owners of the interests for whom
the Stock Intermediary holds the Old Lodgian Common Stock
Interests, and the Debtors will be responsible for each Stock
Intermediary's reasonable costs and expenses associated with the
distribution of copies of the Notice of Non-Voting Status to the
beneficial owners of these interests.  To the extent that the
Stock Intermediaries incur out-of-pocket expenses in connection
with distribution of the Notice of Non-Voting Status, the
Debtors request authority to reimburse these entities for their
reasonable, actual, and necessary out-of-pocket expenses
incurred in this regard.

The solicitation period will commence within 6 days after the
entry of an order approving the Disclosure Statement.  Based on
this schedule, the Debtors propose that in order to be counted
as a vote to accept or reject the Plan, each Ballot must be
properly executed, completed, and delivered to the Debtors' Vote
Tabulation Agent, Poorman Douglas so that it is received no
later than 5:00 p.m. Pacific Time on October 24, 2002, which is
at least 24 days after the proposed commencement of the
solicitation period.  This solicitation period should be a
sufficient period within which creditors and any applicable
equity interest holders can make an informed decision to accept
or reject the Plan.

Solely for purposes of voting to accept or reject the Plan and
not for the purpose of the allowance of, or distribution on
account of, a claim, and without prejudice to the rights of the
Debtors in any other context, the Debtors propose that each
claim within a class of claims entitled to vote to accept or
reject the Plan be temporarily allowed in an amount equal to the
amount of claim set forth in a timely filed proof of claim, or,
if no proof of claim was filed, the amount of claim as set forth
in the Schedules.  The general procedure will be subject to
these exceptions:

-- If a claim is deemed allowed in accordance with the Plan,
   that claim is allowed for voting purposes in the deemed
   allowed amount set forth in the Plan;

-- If a claim for which a proof of claim has been timely filed
   is marked as contingent, unliquidated, or disputed, the
   Debtors propose that the claim be temporarily allowed for
   voting purposes only in an amount equal to the greater of $1
   and that portion of the claim that is non-contingent,
   liquidated and undisputed;

-- If a claim has been estimated or otherwise allowed for voting
   purposes by order of the Court, the claim is temporarily
   allowed in the amount so estimated or allowed by the Court
   for voting purposes only, and not for purposes of allowance
   or distribution;

-- If a claim is listed in the Schedules as contingent,
   unliquidated, or disputed and a proof of claim was not:

    a. filed by the applicable bar date for the filing of proofs
       of claim established by the Court or

    b. deemed timely filed by an order of the Court prior to the
       Voting Deadline, unless the Debtors have consented in
       writing,

   as the Debtors propose, that the claim be disallowed for
   voting purposes and for purposes of allowance and
   distribution pursuant to Rule 3003(c) of the Federal Rules of
   Bankruptcy Procedure; and

-- If the Debtors have served an objection to a claim at least
   10 days before the Voting Deadline, the claim will be
   temporarily disallowed for voting purposes only and not for
   purposes of allowance or distribution, except to the extent
   and in the manner as may be set forth in the objection.

If any creditor seeks to challenge the allowance of its claim
for voting purposes in accordance with these procedures, the
Debtors request that the Court direct the creditor to serve on
the Debtors and file with the Court a motion for an order
pursuant to Bankruptcy Rule 3018(a) temporarily allowing the
claim in a different amount for purposes of voting to accept or
reject the Plan on or before the 10th day after the earlier of
service of the Disclosure Statement Approval Notice and service
of notice of an objection, if any, to the claim.  In accordance
with Bankruptcy Rule 3018, that as to any creditor filing a
motion, the creditor's Ballot should not be counted unless
temporarily allowed by the Court for voting purposes, after
notice and a hearing.

In tabulating the Ballots, these additional procedures will be
utilized:

-- any Ballot that is properly completed, executed and timely
   returned to the Vote Tabulation Agent but does not indicate
   an acceptance or rejection of the Plan, or that indicates
   both an acceptance and rejection of the Plan, will be deemed
   a vote to accept the Plan;

-- if no votes to accept or reject the Plan are received with
   respect to a particular class, this class will be deemed to
   have voted to accept the Plan;

-- if a creditor or interest holder casts more than one Ballot
   voting the same claim or interest before the Voting Deadline,
   the latest dated Ballot received before the Voting Deadline
   will be deemed to reflect the voter's intent and thus to
   supersede any prior Ballots; and

-- creditors and interest holders must vote all of their claims
   or Interests within a particular class, with respect to a
   particular Debtor under the Plan either to accept or reject
   the Plan and may not split their votes within a particular
   class; thus, a Ballot within a particular class of a
   particular Debtor received from a single creditor or interest
   holder that partially rejects and partially accepts the Plan
   will be deemed to have voted to accept the Plan.

Creditors will be given the option on the ballot of electing to
vote to either accept or reject the Plan with respect to all of
the Debtors in which they hold claims against in a particular
class.  If creditors choose not to vote all of their claims in a
particular class against more than one Debtor the same way, they
are required to set forth on the Ballot each Debtor's name and
their vote with respect to each Debtor's Plan.

These Ballots will not be counted or considered for any purpose
in determining whether the Plan has been accepted or rejected:

-- any Ballot received after the Voting Deadline unless the
   Debtors will have granted in writing an extension of the
   Voting Deadline with respect to the Ballot;

-- any Ballot that is illegible or contains insufficient
   information to permit the identification of the claimant or
   interest holder;

-- any Ballot cast by a person or entity that does not hold a
   claim in a class that is entitled to vote to accept or reject
   the Plan;

-- any Ballot cast for a claim scheduled as unliquidated,
   contingent, or disputed for which no proof of claim was
   timely filed;

-- any unsigned Ballot; and

-- any Ballot transmitted to PDC by facsimile.

In preparation for the Confirmation Hearing, and pursuant to
Bankruptcy Rules 2002 and 3017(d), the Debtors will provide,
together with, and served in the same manner as, the
Solicitation Packages, the Disclosure Statement Approval Notice,
setting forth:

-- the Voting Deadline for the submission of Ballots to accept
   or reject the Plan,

-- re-stating the time fixed for filing objections to
   confirmation of the Plan as set forth in the Scheduling
   Order, and

-- re-stating the time, date and place of the Confirmation
   Hearing as set forth in the Scheduling Order. (Lodgian
   Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service,
   Inc., 609/392-0900)  


MALDEN MILLS: Wants More Time to Solicit Plan Acceptances
---------------------------------------------------------
Malden Mills Industries, Inc., and its debtor-affiliates ask for
more time from the U.S. Bankruptcy Court for the District of
Massachusetts to solicit acceptances of their chapter 11 plan of
reorganization.  

The Debtors remind the Court that a Disclosure Statement Hearing
will convene six days before the expiration of the Company's
Exclusive Solicitation Period.  The Debtors seek to extend the
Solicitation Period until the conclusion of the Confirmation
Hearing.  The Debtors submit that this time period is reasonable
under the current circumstances of these cases.  

The Debtors relate that they are not yet permitted to solicit
acceptances of the Plan because the Disclosure Statement has not
yet been approved.  The Debtors assert that they should not
deprived of a reasonable period of exclusivity after the
Disclosure Statement is approved to solicit acceptances of their
Plan.  The Debtors explain that even if the Disclosure Statement
will be approved on the day of the Disclosure Statement Hearing,
they will only have six days to solicit acceptances.  
Consequently, the Debtors determined that meaningful
solicitation of acceptances during that 6-day period is
virtually impossible.  The Debtors further believe that they
will require at least 32 days to solicit acceptances from their
2,500 creditors.

Malden Mills Industries, Inc., a worldwide producer of high-
quality branded fabric for apparel, footwear and home
furnishings, filed for chapter 11 protection on November 29,
2001. Richard E. Mikels, Esq., and John T. Morrier, Esq., at
Mintz, Levin, Cohn, Ferris represent the Debtors in their
restructuring efforts.


MOBILE TOOL: Continues Lincoln Engagement as Investment Bankers
---------------------------------------------------------------
Mobile Tool International, Inc., and its debtor-affiliates want
to continue employing Lincoln Partners LLC as their exclusive
investment banking advisor.  The Debtors ask permission from the
U.S. Bankruptcy Court for the District of Delaware to continue
that engagement in these cases.

Mobile Tool relates that since the Summer of 2002, Lincoln has
provided advice with respect to marketing the Debtors'
businesses to prospective purchasers. In providing these
services, Lincoln has worked closely with Debtors' management
and has become well acquainted with the Debtors' business.
Accordingly, Lincoln has developed significant relevant
experience and expertise regarding the Debtors that will assist
them in providing effective and efficient services in this case.

The Debtors expect Lincoln to:

  a. develop a list of corporations, partnerships, individuals
     or other entities who might be interested in entering into
     a Transaction with the Debtors;

  b. prepare a compendium of information and/or descriptive
     memorandum that describes the Debtors' operations,
     management, results of operations and financial condition
     and that incorporates current financial data and other
     information deemed relevant by the Debtors;

  c. contact and elicit interest from Prospective Purchasers;

  d. convey information desired by serious Prospective
     Purchasers not contained in the Information Memorandum;

  e. investigate the financial capability of Prospective
     Purchasers;

  f. review and analyze all proposals, both preliminary and
     firm, that are received from Prospective Purchasers; and

  g. negotiate, to the extent requested by the Debtors, with
     Prospective Purchasers.

The Debtors agree to pay Lincoln:

  a. If a single transaction involving the Debtors is
     consummated, a Success Fee equal to $150,000 plus 1 % of
     the Sale Price, plus an incentive equal to 3% of the Sale
     Price in excess of an mutually agreed Incentive Value. The
     minimum Success Fee shall be $450,000.

  b. If more than one transaction involving the Debtors is
     consummated, a Success Fee equal to $150,000 plus 1% of the
     Sale Price, plus an incentive equal to 3% of the Sale Price
     in excess of an Incentive Value. The minimum Success Fee on
     the first transaction to close shall be $350,000 and each
     transaction thereafter the minimum Success Fee shall be
     $250,000.

  c. If a transaction involving MTI-IP is consummated, a Success
     Fee equal to $150,000 plus 1 % of the Sale Price, plus an
     incentive equal to 3% of the Sale Price in excess of an
     Incentive Value. The minimum Success Fee shall be $350,000
     if acquired by Morse Manufacturing, Inc. and Ottenweller
     Company or $450,000 if acquired by another Prospective
     Purchaser.

Mobile Tool International, Inc., is an employee owned
manufacturer and distributor of equipment, including aerial
lifts, digger derricks and pressurization and monitoring
systems, for the telecommunications, CATV, electric utility and
construction industries. The Company filed for chapter 11
protection on September 30, 2002. Steven M. Yoder, Esq.,
Christopher A. Ward, Esq., at The Bayard Firm and Brent R.
Cohen, Esq., at Rothgerber Johnson & Lyons LLP represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from its creditors, it listed $65,250,000 in
total assets and $46,580,000 in total debts.


MORGAN GROUP: Plans to File for Chapter 11 Liquidation Soon
-----------------------------------------------------------
The Morgan Group, Inc.'s Board of Directors passed a resolution
for The Morgan Group, Inc., and two of its operating
subsidiaries to file for bankruptcy protection within the next
few days.

The Morgan Group, Inc., and two of its wholly owned operating
subsidiaries, Morgan Drive Away, Inc., and TDI, Inc., intend to
pursue a Chapter 11 liquidation of all assets and liabilities.

The Morgan Group, Inc.'s liability insurance expired at 12:01
a.m. on October 3, 2002 and it has been unable to secure
replacement liability insurance. The Morgan Group, Inc., is
required by federal law to cease operating motor vehicles
without required minimum levels of liability insurance.

MGHL is a holding company that consolidates financial statements
with The Morgan Group, Inc., in which MGHL has a 64.2% ownership
interest and a 77.6% voting interest.


NEW WORLD RESTAURANT: Taps Grant Thornton Re-Audit Financials
-------------------------------------------------------------
New World Restaurant Group (Pink Sheets: NWCI) has engaged its
new independent auditors, Grant Thornton, LLP, to reaudit its
financial statements for the fiscal years ended Dec. 31, 2000
and Jan. 1, 2002.  This action follows notification from the
company's previous independent auditors, Arthur Andersen, LLP
that, due to New World's anticipated material restatements of
2000 and 2001, Andersen's opinion related to the company's 2000
and 2001 financial statements could no longer be relied upon.  
New World also has asked Grant Thornton to audit its financial
statements for the nine-month period ending October 1, 2002.

As previously announced, the anticipated restatements relate
primarily to the accounting treatment of the company's
increasing rate indebtedness, preferred stock, and related
warrants to purchase stock.  The anticipated restatements are
expected to primarily involve non-cash components of interest
expense, preferred dividends and accretion and earnings per
share.

As a result of these actions, the filing of the company's Form
10-Q reports for the second and third quarters of fiscal 2002,
as well as the restated, reaudited results for the historical
periods, will be delayed until these audits are completed.

On July 29, 2002, New World announced that it had replaced
Arthur Andersen with Grant Thornton as its auditor.  On August
22, the company disclosed that the filing of its Form 10-Q for
the second quarter of fiscal 2002 would be delayed by
anticipated restatements of its financial statements for the
four trailing quarters.  Andersen had issued unqualified
opinions on the company's consolidated financial statements for
the past two fiscal years, and those opinions were included in
the company's Form 10-K filings for those years.

The company had previously announced that it expects adjusted
EBITDA for the quarter ended July 2, 2002, to approximate $11.4
million.  CEO Anthony Wedo also had said that same-store sales
for company operated Einstein/Noah locations rose 1.7 percent in
the second quarter over the same period last year, and were
continuing to increase in the third quarter.

New World is a leading company in the quick casual sandwich
industry, the fastest-growing restaurant segment.  The company
operates locations primarily under the Einstein Bros and Noah's
New York Bagels brands and primarily franchises locations under
the Manhattan Bagel and Chesapeake Bagel Bakery brands.  As of
October 1, 2002, the company's retail system consisted of
458 company-owned locations and 289 franchised and licensed
locations in 34 states.  The company also operates one dough
production facility and one coffee roasting plant.

                         *    *    *

As reported in Troubled Company Reporter's June 6, 2002,
edition, Standard & Poor's lowered its corporate credit rating
on New World Restaurant Group Inc., to triple-'C'-plus from
single-'B'-minus based on Standard & Poor's concern that the
company is increasingly challenged to refinance its $140 million
senior secured notes due in June 2003.

The rating was also removed from CreditWatch, where it had been
placed April 5, 2002. The outlook is negative. Eatontown, New
Jersey-based New World had $158 million total debt outstanding
as of January 1, 2002.


NOGA ELECTRO-MECHANICAL: Nasdaq Halts Trading & Wants More Info.
----------------------------------------------------------------
The NASDAQ Stock Market(SM) announced that trading was halted in
Noga Electro-Mechanical Industries (1986) Ltd. (Nasdaq: NOGAF;
NOGWF), today at 9:29 a.m., Eastern Time, for "additional
information requested" from the company at last prices of $0.25
and $0.02, respectively. Trading will remain halted until Noga
Electro-Mechanical Industries (1986) Ltd. has fully satisfied
Nasdaq's request for additional information.

For news and additional information about the company, please  
contact the company directly or check under the company's symbol
using InfoQuotes(SM) on the Nasdaq Web site.

For more information about The NASDAQ Stock Market, visit the
Nasdaq Web site at http://www.nasdaq.comor the Nasdaq  
Newsroom(SM) at http://www.nasdaqnews.com


ORBITAL SCIENCES: S&P Ups Junk Corporate Credit Rating to B
-----------------------------------------------------------
Standard & Poor's Rating Services raised its corporate credit
rating on Orbital Sciences Corp. to single-'B' from triple-'C'-
plus, citing the defense company's refinancing of subordinated
notes. Standard & Poor's removed the rating from CreditWatch,
where it was placed on July 30, 2002. The outlook is positive.

"The upgrade reflects the successful refinancing of Orbital's
$100 million subordinated notes that matured on October 1,
2002," said Standard & Poor's credit analyst Christopher
DeNicolo. The subordinated notes were paid using the proceeds
from the issuance of $135 million second-priority secured notes
due 2006.

The rating on Dulles, Virginia-based Orbital Sciences reflects
the company's modest size and risks inherent to the space launch
business, offset by leading positions in market niches and
increased military spending, especially for the National Missile
Defense (NMD) program. Orbital is a leading provider of small
launch vehicles, small geostationary (GEO) communications
satellites, and boost vehicles and targets for the U.S. NMD
program. The firm has divested a number of units over the past
two years to focus on its core launch vehicle and satellite
operations. The small GEO satellite program had been operating
at a loss due to development costs but is now profitable. Demand
for communications satellites has been weak, but the company's
small GEO satellites could benefit from their lower capital
costs and ability to add incremental capacity. The launch
vehicle segment has been bolstered by a contract with Boeing
Co., valued at over $900 million over the next six to eight
years, to develop the booster for one segment of the NMD
program.

Orbital's near-term liquidity has improved due to the successful
refinancing of its $100 million subordinated notes. The proceeds
from the new notes were also used to repay a $25 million term
loan. Orbital remains fairly highly leveraged, with total debt
to capital of around 65%. Profitability will likely improve
materially in 2002 from net losses the past two years due to the
turnaround in the company's satellite operations and the Boeing
contract. Standard & Poor's expects that operating margins
before depreciation are likely to approach 10% in 2002. Cash
generation is expected to increase with improved profitability
in 2003.

Revenues and profitability are expected to benefit from the
Boeing contract and improved satellite operations. Sustained
improvement in Orbital's credit profile over the near to
intermediate term could lead to an upgrade.


OWENS CORNING: Wins OK to Insure Future Representative Liability
----------------------------------------------------------------
Owens Corning and its debtor-affiliates obtained permission from
the Court to enter into an agreement with Kemper Indemnity
Insurance Company to provide liability insurance for James J.
McMonagle, the Legal Representative for Future Claimants, and
pay the associated premiums. The Debtors, in addition, also
obtained the authority to renew the Insurance Agreement during
the pendency of the Chapter 11 cases, without further
application, so long as the insurance premium does not increase
by more than 10% annually.

The Insurance Agreement specifically provides:

A) Required payment of an annual premium totaling $115,500,
   inclusive of taxes;

B) $15,000,000 of aggregate coverage with a $10,000 per claim
   deductible; and

C) Coverage solely for liability arising during the performance
   of James McMonagle's duties as Future's Representative.
   (Owens Corning Bankruptcy News, Issue No. 38; Bankruptcy
   Creditors' Service, Inc., 609/392-0900)   


PARK PHARMACY: Bankruptcy Filing Likely if Debt Workout Fails
-------------------------------------------------------------
Park Pharmacy Corporation, is a provider of high-end and
technical pharmacy services in Texas and the southwestern United
States. It is a holding company based in Dallas, Texas, and its
subsidiaries are engaged in retail pharmacy, infusion pharmacy,
institutional pharmacy and wholesale pharmacy distribution.
Through Dougherty's Pharmacy in North Dallas and three Medicine
Man pharmacies located south of Houston, Park Pharmacy offers
traditional independent pharmacy services, including
prescriptions, over-the-counter drugs, durable medical
equipment, cosmetics, gifts and sundries. Through Dougherty's
Homecare Infusion in North Dallas, Park Infusion Care in Dallas
and San Antonio, and Total Health Care in Arlington, Texas, the
Company supplies enteral nutrition, total parenteral nutrition,
antibiotic therapy, chemotherapy and other infusion products and
services to home healthcare and hospice patients. Dougherty's
Homecare Pharmacy and Total Health are institutional pharmacies
fulfilling prescriptions for nursing homes and assisted living
facilities in North Texas. The Company's subsidiary, Total
Pharmacy Supply, based in Arlington, Texas, is a national
wholesale supplier of non-drug products for independent drug
stores and grocery chains.

Due to the acquisitions consummated by prior management there
has been a significant negative impact upon Park's operating
results and financial condition and severely strained its
liquidity. Other than the acquisition of its infusion business,
new management believes that the acquisitions have performed
substantially below expectations and their own historical
results. Park Pharmacy believes that these businesses had
significant management and operational issues that prevented
them from operating on a profitable basis. Park's poor cash flow
from these acquisitions has made it extremely difficult to
service Park's high level of debt and operate its business.

Due in large part to the poorly performing acquisitions and high
level of debt, Park's new management team face a number of
challenges, including the following:

        o  Securing and reducing its high level of indebtedness.

        o  Collecting its large accounts receivable balance.

        o  Operating under a cash-on-delivery basis with
           Amerisource Bergen, Park's principal supplier.

        o  Reducing corporate overhead.

        o  Improving operations and management of its business
           segments.

        o  Refinancing or restructuring its senior secured
           credit facility.

        o  Negotiating the settlement of a governmental
           investigation into Parks' alleged violation of the
           Controlled Substances Act.

For the twelve months ended June 30, 2002, Park Pharmacy
Corporation's revenue increased 25% to $53,823,109, compared to
$37,943,149 from the same period in 2001. Its increase in
revenue was primarily attributable to the inclusion of a full
year of the operating results of entities acquired in fiscal
2001.

Gross profit (revenues minus cost of goods sold) for fiscal 2002
was $19,314.633, representing an increase of 23% over
$15,758,617 in the prior period. The increase was due largely to
increases in revenue associated with the inclusion of a full
year of operations of entities acquired in fiscal 2001. Overall
revenue growth accounted almost exclusively for the increase in
gross profit. Gross margin decreased from 41.5% in the earlier
period to 35.9% in the current period. The decrease in gross
margin was due partly to lower gross profit in the Medicine Man
operations, which were acquired in May 2001, and a shift in the
infusion business to primarily managed care contracts which are
easier to collect, but produce a lower gross margin. In the
future, gross margin may fluctuate depending on changes in the
composition of the Company's business. Accordingly, there can be
no assurance that gross margin will remain at the level
experienced during the twelve months ended June 30, 2002.

Loss from continuing operations for the twelve months ended June
30, 2002 was $6,793,333 compared to income of $336,504 a year
ago.

Park Pharmacy Corporation is highly leveraged. Its high level of
indebtedness: (a) limits its ability to obtain additional
financing; (b) limits its flexibility in planning for, or
reacting to, changes in its business and the industry; (c)
places it at a competitive disadvantage relative to its
competitors with less debt; (d) renders it more vulnerable to
general adverse economic and industry conditions; and (e)
requires it to dedicate a substantial portion of its cash flow
to service its debt. Based upon current levels of operations and
its current operating performance, management is not confident
that cash flow from operations together with available borrowing
under the senior secured credit facility and other sources of
liquidity will be adequate to meet anticipated annual
requirements for working capital and debt service for the next
twelve months. The Company will continue to assess its liquidity
position and potential sources of supplemental liquidity in
light of its operating performance and other relevant
circumstances. Should it determine, at any time, that it is
necessary to obtain additional short-term liquidity, the Company
will evaluate alternatives and attempt to take appropriate steps
to obtain sufficient additional funds. Obtaining any such
supplemental liquidity through the increase of indebtedness or
asset sales may require the consent of its Senior Lender under
one or more of its credit agreements. There can be no assurance
that any such supplemental funding, if sought, could be obtained
or that the Senior Lender would provide the necessary consents,
if required.

At June 30, 2002, the Company had working capital and
stockholders' deficits of $5.2 million and $1.7 million,
respectively and incurred a net loss of $9.9 million for the
year ended June 30, 2002. Also, subsequent to June 30, 2002, the
Company was in default under its senior secured credit facility
with its Senior Lender. Should the Company be unable to
refinance or restructure this debt and the Senior Lender pursues
its available remedies, the Company may be forced to seek
protection under the U.S. Bankruptcy Code. These factors raise
substantial doubt about Park's ability to continue as a going
concern.


PENNEXX FOODS: Receives Waiver of Covenant Under Credit Pact
------------------------------------------------------------
Pennexx Foods, Inc. (OTC Bulletin Board:PNNX), a leading
provider of case-ready meat to retail supermarkets in the
Northeast, has reached an agreement with Smithfield Foods, Inc.,
for an unconditional waiver through October 30, 2002 related to
a net-worth covenant under the company's credit agreement signed
in May 2001 between Smithfield Foods, Inc., and Pennexx Foods.

"We are reviewing all of our options to raise additional equity,
which we believe would give us the financial flexibility to
capitalize on our case-ready initiatives," said Michael D.
Queen, president of Pennexx Foods.

"We continue to work closely with our strategic partner,
Smithfield Foods, to solve our short-term financial issues and
they are cooperating fully with us in this endeavor."

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


PEREGRINE SYSTEMS: Continues Employment of Ordinary Course Profs
----------------------------------------------------------------
Peregrine Systems, Inc., and Peregrine Remedy, Inc., ask the
U.S. Bankruptcy Court for the District of Delaware for
permission to employ and compensate certain professionals for
services rendered to the Debtors in the ordinary course of
business.

The Debtors want to continue the Ordinary Course Professional's
Engagement and agree to cap payments to any individual
Professional at $40,000 per month and $160,000 in the aggregate
during the Company's chapter 11 cases.  

The Debtors assure that Court that the Ordinary Course
Professionals maintain no adverse interest against the Debtors,
creditors and parties in interest.  The Debtors will furnish the
Court with quarterly reports summarizing the fees and expenses
that have been paid to all Ordinary Course Professionals.

The Debtors believe that the relief they are requesting will
save the substantial expense of applying separately for the
employment of each professional.  The Debtors further point out
that the Ordinary Course Professionals will not be involved in
the administration of the chapter 11 cases, rather, will provide
services in connection with the Debtors' ongoing business
operations or services ordinarily provided by in-house counsel
to a corporation.

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.


PG&E CORP: Obtains New Waiver Extension Until October 18, 2002
--------------------------------------------------------------
The lenders under PG&E Corporation's (NYSE: PCG) term loan
agreement have agreed to extend through October 18, 2002, the
waiver of the requirement that PG&E National Energy Group
maintain an investment grade credit rating from either Standard
and Poor's or Moody's Investors Service.  The waiver was
otherwise due to run through October 4, 2002.  The extension
includes no additional financial consideration for the lenders.  
The full terms and conditions of the new waiver extension are
detailed in an 8-K filed with the U.S. Securities and Exchange
Commission.

During the extended term of the waiver, PG&E Corporation intends
to continue negotiating with its lenders for the elimination of
the PG&E NEG credit rating requirement from the term loan
agreement or for such other amendments as may be needed.

On August 30, 2002, the Corporation fully repaid the principal
and interest on Tranche A of the term loan to General Electric
Capital Corporation, totaling $606 million.  The remaining
Tranche B is for $420 million.

Please visit http://www.pgecorp.comfor more information about  
the Company.


POPE & TALBOT: Terminates Exchange Offer for 8-3/8% Senior Notes
----------------------------------------------------------------
Pope & Talbot, Inc., (NYSE: POP) announced that all of its
outstanding 8-3/8% Senior Notes due 2013 have been tendered in
exchange for registered, publicly tradable notes with
substantially identical terms.  The exchange offer terminated at
5 p.m., New York City time, on October 2, 2002.  The notes had
been issued on July 30, 2002 in a Rule 144A offering to
qualified institutional buyers.

Pope & Talbot is dedicated to the pulp and wood products
businesses.  The Company is based in Portland, Oregon and traded
on the New York and Pacific stock exchanges under the symbol
POP.  Pope & Talbot was founded in 1849 and produces market pulp
and softwood lumber at mills in the US and Canada. Markets for
the Company's products include the US, Europe, Canada, South
America, Japan and other Pacific Rim Countries.  For more
information on Pope & Talbot, please check the Web site:  
http://www.poptal.com

                         *   *   *

As reported in the July 18, 2002 edition of Troubled Company
Reporter, Standard & Poor's assigned its double-'B' rating
to pulp and lumber producer Pope & Talbot Inc.'s $50 million
senior unsecured notes due 2013.

Standard & Poor's also affirmed its existing ratings on the
company, including its double-'B' corporate credit rating. The
outlook remains stable. Debt outstanding at the company at March
31, 2002, totaled $230 million.


PPL CORP: Will Expense Future Stock Options Starting January 1
--------------------------------------------------------------
PPL Corporation (NYSE: PPL) announced that, beginning Jan. 1,
2003, it will expense the value of any new stock options granted
to PPL employees. This decision does not change the company's
2003 earnings forecast.

"PPL has a long-standing commitment to clearly communicate its
financial results, including the value of stock options granted,
to its shareowners," said William F. Hecht, PPL's chairman,
president and chief executive officer. "That commitment led us
to review our practices and to conclude that recording the value
of options as an expense will provide investors with an even
clearer picture of PPL's financial results."

Hecht said that, although PPL will be expensing options
beginning in 2003, the company will not be changing its 2003
forecast of between $3.60 and $3.80 per share in earnings from
core operations. Hecht also reaffirmed the company's 2002
forecast of $3.30 to $3.50 per share from core operations. Over
the longer term, PPL also is reaffirming its forecast of 5 to 8
percent compound annual growth in core earnings per share, using
the midpoint of its existing 2002 forecast of earnings from core
operations as the starting point.

PPL's stock options give the owner the right to purchase company
stock in the future at the actual price on the date the options
are granted. Therefore, an option only has value to the owner if
the stock price rises above this fixed price in the future.
Stock options are a part of employee compensation at PPL because
they directly tie the employee's interest with that of the
company's shareowners.

Because the actual value of stock options cannot be known at the
time the option is granted, it is necessary to make a number of
assumptions to determine their value. PPL, following guidance
provided by the Financial Accounting Standards Board, will
expense any new options granted based on a widely used formula,
called the Black-Scholes valuation model. The Black-Scholes
formula, which takes into account a number of factors including
the historic performance of the stock on which the option is
offered, will be used to establish an estimated value for the
options at the time they are granted.

PPL has decided to make no change in the accounting for
previously awarded stock options.

PPL Corporation, headquartered in Allentown, Pa., controls
nearly 11,500 megawatts of generating capacity in the United
States, sells energy in key U.S. markets, and delivers
electricity to customers in Pennsylvania, the United Kingdom and
Latin America.

At June 30, 2002, PPL Corp.'s balance sheet shows that its total
current liabilities exceeded its total current assets by about
$79 million.


RELIANCE GROUP: Wins Fourth Extension of Exclusive Periods
----------------------------------------------------------
Judge Gonzalez finds that cause exists under Section 1121(d) to
grant Reliance Group Holdings, Inc., and its debtor-affiliates a
fourth extension of the exclusive periods. The Court is not
persuaded by High River's arguments in favor of opening-up the
plan process to non-debtor parties.  Accordingly, Judge Gonzalez
extends the Debtors' exclusive period during which to file a
Chapter 11 plan to November 4, 2002, and extends the Debtors'
time to solicit acceptances of that plan until January 6, 2003 -
- all without prejudice to the Debtors' right to request further
extensions from the Court.

Judge Gonzalez notes that the Debtors' estate contains only 3
primary assets: cash, tax attributes, and potential recoveries
through litigation.  All of those assets are "tied up" with RIC,
which is in liquidation in Pennsylvania.

Judge Gonzalez reviews the litigation he's been told about as
the Debtors and Pennsylvania Insurance Department have traipsed
through the Federal and state courts in Pennsylvania:

-- On May 29, 2001, the Commonwealth Court entered an order
   granting the petition of Pennsylvania Insurance Department,
   with RIC's consent, for the rehabilitation of RIC;

-- On June 4, 2001, the Rehabilitator filed in the Commonwealth
   Court an "Emergency Petition for Preservation of Insurance
   Policy Assets" that seeks, inter alia, to declare that any
   proceeds of certain liability insurance policies covering RGH
   as the "Assured," its affiliates, directors and officers, are
   property of the rehabilitation estate and enjoin RGH and
   others from advancing claims on policies;

-- On June 11, 2001, the Rehabilitator filed a complaint in the
   Commonwealth Court seeking a declaratory judgment to impose a
   constructive or resulting trust on $95,000,000 of RGH cash
   and to enjoin any disbursements of the cash.  The Debtors
   dispute the assertions in the Insurance Policy Action and the
   Trust Action;

-- On June 29, 2001, RGH removed the Insurance Policy Action and
   the Trust Action to the United States Bankruptcy Court for
   the Eastern District of Pennsylvania and moved to transfer
   these actions to this Court;

-- On July 12, 2001, the Rehabilitator filed a motion asking the
   Pennsylvania Bankruptcy Court to abstain from exercising
   jurisdiction and remand the actions to the Commonwealth
   Court;

-- On October 3, 2001, the Commonwealth Court entered an order
   granting the petition of Pennsylvania Insurance Department
   for the liquidation of RIC.  The Liquidation Order, inter
   alia, finds that RIC is insolvent, terminates the
   Rehabilitation Order and appoints the Liquidator.  The
   Liquidator of RIC, was substituted for the Rehabilitator as
   plaintiff in the Insurance Policy Action and the Trust
   Action;

-- On November 16, 2001, this Court entered an order
   establishing December 21, 2001 as the last date for filing
   proofs of claim. This Court's order excepted the Liquidator's
   RIC claims from the Bar Date, pending a ruling on the
   Liquidator's objection to the application of the Bar Date to
   such claims.  A hearing on the Liquidator's objection was
   held on November 27, 2001;

-- On February 22, 2002, the Pennsylvania Bankruptcy Court
   denied the Liquidator's motion to abstain and remand in the
   Insurance Policy Action, and granted RGH's motion to transfer
   the action to this Court.  The Liquidator has moved the
   United States District Court for the Eastern District of
   Pennsylvania for leave to appeal the Pennsylvania Bankruptcy
   Court's order. RGH has opposed the motion for leave to
   appeal, which remains pending;

-- Also on February 22, 2002, the Pennsylvania Bankruptcy Court
   granted in part the Liquidator's motion to abstain and remand
   in the Trust Action, remanded certain issues to Commonwealth
   Court, and purported to lift the automatic stay as to those
   issues.  The Pennsylvania Bankruptcy Court transferred
   certain remaining issues to this Court.  RGH and the
   Committees have appealed the Pennsylvania Bankruptcy Court's
   decision to the Pennsylvania District Court;

-- On February 28, 2002, RGH moved before the Pennsylvania
   Bankruptcy Court for a stay of the decision pending appeal.
   The Pennsylvania Bankruptcy Court denied the stay at a
   hearing on March 1, 2002, and RGH has now sought the same
   relief from the Pennsylvania District Court;

-- By consent of the parties, the Pennsylvania Bankruptcy
   Court's decision has been temporarily stayed to allow the
   Pennsylvania District Court to consider RGH's motion for stay
   pending appeal;

-- On March 13, 2002, the Liquidator, RGH and the Creditors'
   Committees of Debtors' estates agreed to a temporary
   standstill of litigation on the issues raised by the Trust
   Action and the Bar Date objection.  By subsequent agreements,
   the standstill period was extended, and the Standstill
   Agreement was expanded to include the issues raised by the
   Insurance Policy Action.  The Standstill Agreement was set to
   expire, upon the earlier of either, August 9, 2002, or the
   first business day after the date on which the Pennsylvania
   District Court hears argument of the Emergency Motion by RGH
   for a Stay Pending Appeal.

                     The Request For Extension

Pursuant to the third Order extending exclusivity dated May 14,
2002, the Bankruptcy Court extended the Debtors' Exclusivity
Period up to and including August 6, 2002.  The Debtors brought
this fourth Motion to Extend the Exclusivity Period dated July
18, 2002 seeking to extend the Exclusivity Period for another 90
days to November 4, 2002.  One of the Debtors' creditors, High
River Limited Partnership, objected to the Debtors' motion.  
High River Limited Partnership is controlled by Carl Icahn.

To recall, the High River Limited Partnership, commenced an
action against RGH in New York Supreme Court on March 15, 2001,
seeking to recover $75,095,000 plus interest, on senior notes of
which it claims to be the beneficial owner.

                         The Potential Plan

In open court proceedings with representatives from High River
present, the Debtors' Counsel, Lorna Schofield, Esq., at
Debevoise & Plimpton explained:

  "What's been happening is that there are negotiations with RFC
  [RIC] between the creditors . . . it's clear that that's going
  to go one way or the another at some point in the relatively
  near future.  As Your Honor may recall, at the very beginning
  of the process when we filed our Chapter 11 petition, there
  was a consensual understanding in place among the Debtors and
  Creditors' Committees and there's every possibility that if
  the negotiations with RFC [RIC] fall apart, that we would
  revert back to something like that and the Debtor's [sic]
  plan. The only instance in which we can't have a Debtor's
  [sic] plan is if the plan itself purports to allocate or
  divide up the assets.  If there is a plan with the liquidator
  and understanding with the liquidator and that plan purports
  to address the D&O policies and somehow dividing up the rights
  under the D&O policies, then there would not be a Debtor's
  [sic] plan.  If that plan does not include essentially
  whacking up the D&O policies, then it's possible that it could
  be a Debtor's [sic] plan because the anti-collusion provision
  would not play any role.  And there have actually been
  discussions very recently about whether those assets should be
  included as a part of the agreement."

Through the High River Objection, Mr. Icahn opposes the Debtors'
motion for a fourth extension of the exclusivity period.  A
hearing on the Exclusivity Motion was held on September 12,
2002. Counsel for Mr. Icahn cited two main grounds why the
Debtors' motion should be denied:

   1) the Debtors' have failed to show "cause" under Section
      1121(d) of the Bankruptcy Code for an extension of
      exclusivity; and

   2) the Exclusivity Motion is really for the benefit of the
      Debtors' two Committees.

At the September 12, 2002 hearing, this matter was taken under
advisement.  Also, this Court extended the exclusivity period
pending a decision on this matter.

                      Three Possible Outcomes

RGH represented that due to certain anti-collusion terms in the
Debtors' Directors and Officers Insurance Policy, which is an
asset of their estate, they are not engaged in immediate
discussions currently underway between the Committees and
Pennsylvania Insurance Department (the "PID").

According to Debtors' Counsel, there are three possible
scenarios regarding a plan proposal.  Two of those scenarios may
result in a plan proposed by the Debtors, and one of the
scenarios may result in a plan proposed by the Committees.

First scenario:  If the negotiations with PID are fully
                 successful in that the plan provides for a
                 resolution of all litigation with PID, then
                 there would not be a Debtors' plan because of
                 the anti-collusion provision in the D&O policy,
                 referred to as the Committees' Plan.  Under
                 this scenario the Committees would likely then
                 file a motion seeking to expand the Debtors'
                 exclusivity to the Committees.

Second scenario: If the negotiations with PID are unsuccessful,
                 the Debtors' would propose a plan similar to
                 the version that was negotiated prepetition and
                 pre-litigation.

Third scenario:  If the negotiations with PID are partially
                 successful and the success does not include a
                 resolution of the litigation involving the
                 allocation of the D&O coverage, then a Debtors'
                 plan is possible because the anti-collusion
                 provision would not be implicated.  Under the
                 second and third scenarios, litigation would
                 continue post confirmation.

Judge Gonzalez acknowledges that the Debtors' insurance business
operations and relationships with its subsidiary business
entities are substantial and complex.  The Debtors are also
entangled in complex litigation in several courts that may
affect these bankruptcy proceedings.  This Court recognizes that
the issues involved are indeed complex and require that the
Debtors have more time.  Additionally, the Debtors made progress
toward a plan prior to the Petition Date, but due to the
Pennsylvania litigation, that progress was interrupted.  Counsel
for the Unsecured Creditor's Committee stated, in remarks
supported by Counsel for the Bank Committee, that the Committees
have "encountered nothing but extreme cooperation with the
Debtor [sic]."  In light of the Committee Counsel's statements,
Debtors' have not been engaging in "delay," as that term is
understood in the legislative history of Section 1121(d).

The Court is required to evaluate whether the debtor has
demonstrated reasonable prospects for filing a viable plan.
Unique to the Debtors' case is that there exists the possibility
that following the end of Debtors' exclusivity period, there may
be a plan proposed by the Committees and not the Debtors.
However, the Debtors have demonstrated that they possess
reasonable prospects for filing a viable plan.  But Judge
Gonzalez points out that reasonable prospects are not synonymous
with absolute certainty.  In the circumstances of this case,
this Court is persuaded that the Debtors' prospects for filing a
viable plan are indeed reasonable.  This Court finds that the
Debtors have reasonable prospects for filing a viable plan based
upon two factors:

   (1) the statements to the effect that a prepetition agreement
       was in place; and

   (2) two of the two plan scenarios involve a plan that could
       be proposed by the Debtors.

This Court is persuaded that in light of positive developments
-- like the settlement of the IRS matters -- the Debtors need
the continuation of the "breathing room" of a further extension
to enable them to develop and propose a viable plan.  Although
the plan may not be as comprehensive as a plan proposal by the
Committees, if the Committees were successful in resolving all
disputes with the PID; nonetheless, a Debtors' plan may be the
best course of action then available under the circumstances.

Because one of the three scenarios includes a possible Committee
plan, it should not cause the other two possible scenarios to
yield or be denied the opportunity to develop.  Judge Gonzalez
explains that the analysis under this factor involves an
examination of whether the debtor has demonstrated reasonable
prospects for filing a viable plan.  Independent of the
possibility that there could be a Committee plan, the Debtors in
this case have made a showing that supports a finding that they
possess reasonable prospects for filing a viable plan. Denying
an extension of exclusivity in these circumstances would be
inequitable, and imprudent in light of the complexities of this
case.  Also, both Committees support the extension, each with
fiduciary duties to their respective constituencies.

The Court notes that Mr. Icahn is a member of each of these
constituencies.  The factors that have stalled the plan process
thus far have been events external to the Debtors' immediate
control, but are now being effectively addressed.

Judge Gonzalez addresses Mr. Icahn's concerns that the Debtors
are using exclusivity to harm creditors.  Judge Gonzalez remarks
that further extensions of exclusivity does not pressure Mr.
Icahn to accept a plan that he may feel is unsuccessful, since
he argues that because of the size of his claims in each of the
Committees constituencies that he can block any plan that is
unsatisfactory to him.  In essence, Mr. Icahn's argument is that
extending exclusivity is a waste of estate assets -- a
conclusion this Court does not find warranted under the
circumstances.

Judge Gonzalez asserts that the key question for this Court is
whether a fourth extension of exclusivity will function to
facilitate movement towards a fair and equitable resolution of
the case, taking into account all the divergent interests
involved.  This Court finds that a fourth extension of the
exclusivity will serve that function.  Rather than take a path
that surely leads to additional delay, Judge Gonzalez believes
that permitting the exclusivity period to be the format in which
a plan can be developed is the best course.  This factor is a
"practical call" and is an "overriding factor" that weighs
decidedly in favor of granting the Exclusivity Motion. (Reliance
Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service,
Inc., 609/392-0900)     


SAMSONITE CORP: Artemis Bows-Out of Proposed Recapitalization
-------------------------------------------------------------
Samsonite Corporation (OTC Bulletin Board: SAMC) announced that
Artemis S.A., which currently owns approximately 30% of the
Company's outstanding common stock, has withdrawn its proposal
to participate in a deleveraging or recapitalization transaction
involving the Company.  As previously announced, Artemis
submitted a proposal jointly with Ares Management, L.P., a
holder of the Company's preferred stock, and the Company entered
into an agreement with Artemis and Ares pursuant to which, among
other things, the Company agreed to negotiate exclusively with
them for a specified period which has expired.

The Company emphasized that the decision by Artemis to withdraw
its proposal was not the result of any business, accounting or
legal due diligence issues regarding the Company, but rather the
failure to reach an agreement with the Company on the terms of a
transaction.

The Company is continuing to pursue a deleveraging or
recapitalization transaction with Ares and continues to explore
its other alternatives.  No assurance can be given, however, as
to timing or likelihood of entering into definitive agreements
or completing any possible transaction.

Samsonite is one of the world's largest manufacturers and
distributors of luggage and markets luggage, casual bags,
backpacks, business cases and travel-related products under
brands such as SAMSONITE(R), AMERICAN TOURISTER(R), LARK(R),
HEDGREN(R) and SAMSONITE(R) black label.


SERVICE MERCHANDISE: Keeps Plan Filing Exclusivity Until Nov. 12
----------------------------------------------------------------
Judge Paine extends Service Merchandise Company, Inc., and its
debtor-affiliates' Exclusive Plan Filing Period through November
12, 2002 and the Exclusive Solicitation Period to February 28,
2003.  However, this is without prejudice to the Debtors' right
to seek additional and further extensions for the Exclusive
Periods.  This Extension Order is also without prejudice to
other parties' interest to reduce the Debtors' Exclusive Periods
for a cause.

In addition, Judge Paine explains that if the Debtors file a
plan of reorganization by November 12, 2002 and that plan is
later on withdrawn, the Debtors' Exclusive Filing Period may be
extended for 30 days after the withdrawal date. (Service
Merchandise Bankruptcy News, Issue No. 39; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

DebtTraders says that Service Merchandise's 9% bonds due 2004
(SVCD04USR1) are trading at 6.75 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=SVCD04USR1
for real-time bond pricing.


SMITHWAY MOTOR: Commences Trading on Nasdaq SmallCap Market
-----------------------------------------------------------
Smithway Motor Xpress Corp. (Nasdaq: SMXC) announced that its
shares of Class A Common Stock have been approved for listing on
the Nasdaq Small Cap Market.  Based on this approval, Smithway
has withdrawn its appeal of the Nasdaq National Market delisting
notice previously announced on September 24, 2002.  Trading of
Smithway's Class A Common Stock was transferred from the Nasdaq
National Market to the Nasdaq Small Cap Market effective as of
the opening of business on October 7, 2002.

Smithway is a truckload carrier that hauls diversified freight
nationwide, concentrating primarily on the flatbed segment of
the truckload market.


SPECIAL METALS: Bank Group Waives Default Under Credit Agreement
----------------------------------------------------------------
Special Metals Corporation (OTCBB: SMCXQ) announced that the
Company did not meet its August 31, 2002 cumulative sales
revenue covenant contained in its Postpetition Credit Agreement
but has obtained the agreement of its bank group to waive the
technical default.

The Company's revenue for the period from April 1, 2002 through
August 31, 2002 was $220.5 million, which was $11.7 million less
than the amount required by the terms of the credit agreement at
August 31, 2002. Special Metals met the five remaining financial
covenants for the month of August. The waiver provided by the
bank group is unopposed by the Creditors' Committee and has been
approved by the court.

The Company continues to maintain substantial cash resources
and, other than obtaining various letters of credit of
approximately $6.3 million, has not drawn on its availability
under the $60 million postpetition revolving credit facility. In
addition, the Company does not anticipate a need in the near
term to borrow funds under the credit facility.

Special Metals is the world's largest and most-diversified
producer of high-performance nickel-based alloys. Its specialty
metals are used in some of the world's most technically
demanding industries and applications, including: aerospace,
power generation, chemical processing, and oil exploration.
Through its 10 U.S. and European production facilities and a
global distribution network, Special Metals supplies over 5,000
customers and every major world market for high-performance
nickel-based alloys.


TELIGENT: Wants November 15 Admin. & General Claims Bar Date Set
----------------------------------------------------------------
Teligent, Inc., and its debtor-affiliates want the U.S.
Bankruptcy Court for the Southern District of New York to
establish Claims Bar Date.  The Debtors want to fix November 15,
2002 as the Bar Date for filing certain administrative expense
claims and all proofs of secured, priority and general unsecured
claims, for all remaining creditors to file their proofs of
claims.

Now that the Third Amended Plan has been confirmed, the Debtors
tell the Court that they must determine the magnitude of the
claims asserted before they can determine what distributions
will be made under the Plan.

Proofs of claims to be deemed timely-filed must be received by
Bankruptcy Management Corporation on or before 5:00 p.m. of the
Claims Bar Date at this address:

          Teligent
          c/o BMC
          PO Box 864, El Segundo
          CA 90245-0864

Administrative claims exempted from filing are:

     i) administrative expense claims of professionals retained
        pursuant to sections 327 and 328 of the Bankruptcy Code;

    ii) expenses of members of any statutory committee in these
        chapter 11 cases; and

   iii) all fees payable and unpaid under 28 U.S.C. Section
        1930.

The General Claims Bar Date applies to all unpaid secured,
priority and general unsecured claims that arose before the
Petition Date except:

     a) claims listed in the debtors' Schedules of Assets and
        Liabilities which are not listed as "contingent,"
        "unliquidated" or "disputed," and which are not disputed
        by the creditor holding such claim as to amount or
        classification;

     b) claims already been properly filed with the Court; and

     c) claims previously allowed by order of the Court.

Teligent, Inc., a provider of broadband communication services
offering business customers local, long distance, high-speed
data and dedicated Internet services over its digital SmartWave
local networks in major markets throughout the United States,
filed for chapter 11 protection on May 21, 2001. James H.M.
Sprayregen, Esq., Matthew N. Kleiman, Esq., and Lena Mandel,
Esq., at Kirkland & Ellis represent the Debtors in their
restructuring effort. When the Company filed for protection from
its creditors, it listed $1,209,476,000 in assets and
$1,649,403,000 debts.


TESORO PETROLEUM: S&P Cuts Corp. Credit Rating One Notch to BB-
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Tesoro Petroleum Corp., to double-'B'-minus from
double-'B' and removed the company's ratings from CreditWatch,
where they were placed on August 28, 2002 with negative
implications.

San Antonio, Texas-based Tesoro is an independent petroleum
refiner and marketer with $2 billion of debt outstanding. The
outlook is negative.

"The ratings downgrade reflects the effect of dismal refining
crack spreads throughout 2002 on Tesoro's cash flow, at a time
when the company has been attempting to delever its balance
sheet," noted Standard & Poor's credit analyst John Thieroff.
"Reduced cash flow in 2002 and 2003 will likely result in
material delay in the execution of Tesoro's debt reduction plan
announced in June 2002," he continued. However, Standard &
Poor's expects the company to ultimately accomplish its target
of $500 million in debt repayment, albeit over a longer period
of time. Delayed deleveraging has resulted in a weakened
financial profile and could expose Tesoro to potential liquidity
constraints, should refining margins fail to recover to midcycle
ranges by mid-2003.

Tesoro's ratings reflect its position as a highly leveraged
independent oil refiner and marketer operating in a very
competitive, erratically profitable industry that is burdened by
high fixed costs. These weaknesses are partly offset by strong
asset quality, advantaged operating locations, and a degree of
retail-derived margin stability.

As of June 30, 2002, Tesoro's total debt-to-total capital stood
near 70%. Leverage has been greatly exacerbated by weak cash
flow; expected debt to EBITDA for 2002 will likely exceed 20
times. Recovery to midcycle refining margins by mid-2003,
combined with debt reduction achieved from the proceeds expected
from asset sales, should improve this measure to around 3.5x and
restore the company to profitability. While Tesoro's debt levels
would likely be manageable under midcycle conditions, the
extreme volatility of crack spreads and the resultant effect on
cash flow make the current debt burden excessive.

Tesoro currently has minimal cash on its balance sheet, although
inventory typically is over $500 million and consists of readily
saleable crude oil and refined products. The company has
essentially full availability under its $225 million revolving
credit facility, maturing September 2006. The facility has
numerous financial covenants, although many have been suspended
through the second quarter of 2003 to allow the company a
measure of flexibility during what is expected to be a very low-
margin environment. Standard & Poor's believes the company's
liquidity is adequate to sustain itself through the trough based
on current expectations for a second quarter 2003 refining
recovery.

The negative outlook reflects the challenges facing Tesoro as it
undertakes much-needed deleveraging during an extended trough in
the refining cycle. While liquidity is expected to be adequate
to weather a continuation of weak margins through the first
quarter of 2003, greater-than-expected margin deterioration,
failure to execute asset sales or increased working capital
needs beyond current expectations could result in a downgrade.


TRANSWESTERN PIPELINE: S&P Ups Credit Rating to BB from CCC
-----------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Transwestern Pipeline Co., to double-'B' from double-
'C'. The CreditWatch implications were changed to positive from
developing.

About $550 billion of total debt is outstanding at the Houston,
Texas-based natural gas pipeline company, which is a wholly
owned subsidiary of Enron Corp.

"The higher rating reflects increased confidence that
Transwestern will not be drawn into the bankruptcy proceedings
of its parent company," noted Standard & Poor's credit analyst
Todd Shipman. Ratings are still not based solely on the stand-
alone credit quality of Transwestern because of the uncertainty
surrounding the company's future. Enron has started a process
that could lead to either the sale of Transwestern or to a
reorganized holding company that concentrates on operating
energy infrastructure assets in the natural gas and electricity
industries. Transwestern would be a natural part of such a
strategy either at Enron or another company.

Transwestern's regulated pipeline operations are characterized
by a relatively stable base of contracted revenues, flexible
operations, competitive rates, and manageable recontracting
risk. Increasing throughput volumes and a constructive
regulatory environment regarding rates add to credit quality.
Offsetting these strengths are the high degree of competition in
the company's core California market, exposure to customer
concentration (the top-10 shippers represent the bulk of
Transwestern's business), and the prospect that the company's
ties to Enron will affect its relationships with customers and
regulators.

The positive CreditWatch listing is based on the stand-alone
credit profile of Transwestern and the possibility that the
company will emerge from under Enron's influence after the
issues in the parent company's bankruptcy proceedings are
resolved. Transwestern's business profile is capable of
supporting an investment-grade rating if the company is properly
capitalized in accordance with standard ratemaking principles.


TRANSWESTERN PIPELINE: Applauds S&P's Upgrade of Credit Rating
--------------------------------------------------------------
Transwestern Pipeline Company announced that its Standard &
Poor's credit rating has been raised to double B from triple C.
In addition, Transwestern's CreditWatch listing advanced to
"Positive" from "Developing."

"The rating and outlook improvement from Standard & Poor's
reinforces our belief that Transwestern is a solid, well
performing business," said Stan Horton, chairman and CEO of
Transwestern Pipeline Company. "The new rating supports our
confidence in Transwestern's strong operating future. We are
proud of the quality of operations and people who are continuing
to work on Transwestern and her sister businesses, and
appreciate Standard & Poor's recognition of the strength of the
company."

According to Standard & Poor's, the rating reflects reduced
concerns about Transwestern being drawn into bankruptcy.
Standard & Poor's also indicated that the positive CreditWatch
listing was based upon Transwestern's stand-alone credit profile
and the prospects for the company to emerge from under the
difficulties of its parent.

Transwestern Pipeline, which is a wholly owned subsidiary of
Enron Corp., consists of approximately 2,500 miles of pipeline
with 1.2 Bcf/d of capacity to markets in Arizona and California.
With the pipeline originating in the San Juan, Permian and
Anadarko Basins, Transwestern can move gas east to Texas or west
to the California border. Information is available on the
Internet at http://www.tw.enron.com


US AIRWAYS: Various Creditors Move for Adequate Protection
----------------------------------------------------------
Six parties-in-interest ask the Court for adequate protection of
their interests in various aircraft used by US Airways Group
Inc., and its debtor-affiliates.  The parties and their
respective counsels are:

   1) ABN AMRO -- Bradford F. Englander, Esq., at Linowes &
      Blocher;

   2) Bank One, Seventh HFC & Keystone Equipment Finance -- Jon
      Yard Arnason, Esq., of Vedder, Price, Kaufman & Kammholz;

   3) Wachovia -- Peter A. Ivanick, Esq., of LeBoeuf, Lamb,
      Greene & MacRae;

   4) State Street Bank and Trust -- Robert M. Borden, Esq., of
      Bingham & McCutchen.

   5) Marubeni America Corporation -- Leo T. Crowley, Esq., of
      Pillsbury & Winthorp;

   6) Wilmington Trust Company -- Stephen E. Herrmann, Esq., of
      Richards, Layton & Finger.

Prior to the Petition Date, the Aircraft Parties and US Airways
entered into leveraged lease agreements or Operative Agreements
whereby aircraft were leased to US Airways.  The Debtors
continue to use these Aircraft in their business operations.

While the Debtors continue to use the Aircraft to generate
significant revenues, the Aircraft depreciate and diminish in
value, without any payments.  The value of a commercial jet
aircraft is directly and materially impacted by the aircraft's
hours of use relative to the next required maintenance event.
Maintenance events for commercial jet aircraft such as "C
Checks" typically cost well over $1,000,000 for a single
aircraft. Accordingly, every hour that the Debtors use the
Aircraft push them closer to the next required maintenance
event, and further jeopardize the value of Aircraft Parties'
only collateral.

The Aircraft Parties relate that the Aircraft are subject to an
above-market lease and is encumbered by debt substantially in
excess of its value.  Moreover, while the Debtors continue to
use the Aircraft, there is a heightened danger that valuable
parts of the Aircraft may be removed, swapped or replaced with
older or less valuable parts on other aircraft that are not
subject to the Aircraft Parties' security interests,
significantly increasing the risk that the Aircraft's value will
diminish drastically.  In fact, the Aircraft Parties are aware
of allegations of such cannibalization of similar aircraft in
other airline insolvencies.

Thus, the Aircraft Parties ask Judge Mitchell to order US Air
to:

(a) make immediate and periodic cash payments to the Aircraft
     Parties for the postpetition depreciation in the value of
     their Aircraft beginning from the Petition Date and
     continuing for as long as the Aircraft remains in the
     possession and control of the Debtors, with the Aircraft
     Parties being granted an administrative expense claim under
     Section 507(b) of the Bankruptcy Code for postpetition
     depreciation in value;

(b) provide the Aircraft Parties with proof that the Aircraft
     are and will remain insured in accordance with the Debtors'
     requirements under the Operative Agreements;

(c) refrain from, and enjoin, any actions to swap, remove or
     replace any parts on any of the Aircraft except as
     specifically provided under the Operative Agreements; and

(d) comply with all terms and conditions of the Operative
     Agreements relating to the use, maintenance, and operations
     of the Aircraft. (US Airways Bankruptcy News, Issue No. 8;
     Bankruptcy Creditors' Service, Inc., 609/392-0900)


US AIRWAYS: Revenue Passenger Miles Up 10.4% in September 2002
--------------------------------------------------------------
US Airways reported that revenue passenger miles for September
2002 increased 10.4 percent compared to September 2001, while
available seat miles for the month were up 2.8 percent compared
to the same period last year.  The passenger load factor for
September 2002 was 60.3 percent, a 4.2 percentage-point increase
compared to September 2001.

The terrorist attacks of September 11, 2001, which included the
three-day shutdown of the air traffic system, have affected the
year-over-year comparisons.

Revenue passenger miles for the third quarter 2002 decreased
11.9 percent compared to the same period in 2001, while
available seat miles were down 12.8 percent year over year.  The
passenger load factor for the period was 71.8 percent, an
increase of 0.7 percentage points compared to the same period in
2001.  Revenue passenger miles for September 2002, when compared
to September 2000, decreased 26.4 percent, while available seat
miles decreased by 18.4 percent and load factor decreased by 6.6
percent points.

Year-to-date, US Airways' revenue passenger miles decreased 15.6
percent compared to the first nine months of 2001, while
available seat miles decreased 17.3 percent.  The year-to-date
passenger load factor was 71.8 percent, an increase of 1.4
percentage points compared to the same period in 2001.

The three wholly owned subsidiaries of US Airways Group, Inc. --
Allegheny Airlines, Inc., Piedmont Airlines, Inc., and PSA,
Inc., -- reported that revenue passenger miles for September
2002 increased 52.2 percent compared to September 2001, while
available seat miles increased 33.7 percent.  The passenger load
factor for the month was 48.6 percent, an increase of 5.9
percentage points compared to the same period in 2001.

Revenue passenger miles for the third quarter 2002 increased
13.8 percent compared to the same period in 2001, while
available seat miles increased 15.7 percent year-over-year.  The
passenger load factor for the period was 53.1 percent, a
decrease of 0.9 percentage points compared to the same period in
2001.

Year-to-date revenue passenger miles for the three wholly owned
US Airways Express carriers increased 7.2 percent compared to
the first nine months of 2001, while available seat miles
decreased 12.2 percent.  The year-to-date passenger load factor
was 52.7 percent, a decrease of 2.5 percentage points compared
to the same period in 2001.

Operationally, US Airways ended the month by completing 99.1
percent of its scheduled flights and broke a decade-old internal
record with 91.9 percent of its flights arriving on time.

"Our customers expect and deserve outstanding service and again
our employees have risen to the occasion," said US Airways
President and Chief Executive Officer David Siegel.

Mainline passenger unit revenue for September 2002 is expected
to increase between 12.5 and 13.5 percent compared to September
2001, which is a decrease of between 25 and 26 percent compared
to September 2000.

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.


US TIMBERLANDS: Fails to Maintain Nasdaq Listing Standards
----------------------------------------------------------
U.S. Timberlands Company, L.P., (Nasdaq: TIMBZ) received a
Nasdaq Staff Determination on September 27, 2002 indicating that
the company fails to comply with the net tangible assets
requirement for continued listing set forth in Nasdaq
Marketplace Rule 4450(a)(3), and that its securities are,
therefore, subject to delisting from the Nasdaq National Market.  
The company has requested a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination, although
there can be no assurance that the Panel will grant the
company's request for continued listing.  The delisting has been
stayed, pending the Panel's decision.

The company had previously announced that it had received an
offer from a management group to take the company private at a
per unit price of $2.75 in cash.  The company is continuing to
make progress in its negotiations with the management group
regarding the proposal to take the company private, although
there can be no assurance that a final agreement will be reached
or that such a transaction will be consummated.

U.S. Timberlands Company, L.P., and its affiliate, own 670,000
fee acres of timberland and cutting rights on 3,000 acres of
timberland containing total merchantable timber volume estimated
to be approximately 1.9 billion board feet in Oregon and
Washington, east of the Cascade Range.  U.S. Timberlands
specializes in the growing of trees and the sale of logs and
standing timber. Logs harvested from the timberlands are sold to
unaffiliated domestic conversion facilities.  These logs are
processed for sale as lumber, molding products, doors, millwork,
commodity, specialty and overlaid plywood products, laminated
veneer lumber, engineered wood I-beams, particleboard,
hardboard, paper and other wood products.  These products are
used in residential, commercial and industrial construction,
home remodeling and repair and general industrial applications
as well as a variety of paper products. U.S. Timberlands also
owns and operates its own seed orchard and produces
approximately five million conifer seedlings annually from its
nursery, approximately half of which are used for its own
internal reforestation programs, with the balance sold to other
forest products companies.


USG CORP: Has Until March 31, 2003 to Remove Prepetition Actions
----------------------------------------------------------------
USG Corporation and its debtor-affiliates obtained approval from
the Court extending their removal period to March 31, 2003,
without prejudice to any position the Debtors may take regarding
whether Section 362 of the Bankruptcy Code applies to stay any
Proceedings and their right to seek further extension regarding
any and all Proceedings. (USG Bankruptcy News, Issue No. 34;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


VENCOR INC: Seeks Okay to Assume Hyperbaris Management Contract
---------------------------------------------------------------
The Reorganized Vencor, Inc. Debtors filed a motion to assume
the contract between Debtor Transitional Hospital Corporation of
Nevada, doing business as THC Las Vegas, and Hyperbaric
Management Systems, Inc., on May 1, 2001.  That motion is still
pending on the Court's docket.  The parties are arguing, among
other things, whether HMS is entitled to cure amounts for
purported lost profits allegedly due to the Debtors' failure in
securing a sufficient number of payor contracts.  HMS asserts a
cure claim exceeding $2,000,000.

A continued hearing on this matter is set for October 26, 2002.

Meanwhile, discovery is not going smoothly.  The Reorganized
Debtors want to know the basis, methodology and assumptions
underlying HMS' calculation of amounts relevant to HMS' asserted
cure claim.  They have made requests for documents and served
interrogatories.  HMS has objected to these.  The Reorganized
Debtors accuse HMS of blocking discovery.  They ask the Court to
compel HMS to produce documents responsive to requests and to
provide complete answers to interrogatories.

                          Background

As previously reported, HMS provides hyperbaric treatment and
wound healing services to THCLV patients in a Wound Healing
Center established at THCLV's medical facility in Las Vegas,
Nevada.

The Debtors originally obtained Court approval to reject the
Contract because participation in it resulted in losses to
THCLV. After HMS filed a rejection claim in excess of
$9,000,000, the Debtors changed their mind.  The amount of the
rejection claim was much more than that expected and the Debtors
were not successful in disputing it or obtaining a consensual
resolution.  After a revaluation of costs and benefits, the
Debtors determined to assume the HMS Contract because the cost
of performance under the contract could be less than the
potential liability for damages due to the rejection of it.  The
Debtors' cost of performing under the HMS Contract has
historically been $20,000 per month.  Moreover, by assuming the
contract, the Debtors would retain their ability to continue to
obtain revenues from it.

HMS objected to the Motion to Assume on the grounds that:

(a) The Debtor defaulted on its obligations under the Contract
    by, inter alia, failing to obtain the third party payor
    contracts necessary to ensure payment for the hyperbaric and
    related services provided by HMS under the Contract, which
    resulted in very few patients being eligible for treatment
    and treated at the Las Vegas facility; and

(b) The Debtor is obligated to pay HMS what it would have
    received from operation of the hyperbaric treatment center
    had the Debtor put in place the third party payor contracts
    that it could have obtained, from the outset of the
    Contract.

At the conclusion of the hearing on the Assumption Motion on
September 12, 2001, the Court instructed the Reorganized Debtors
to designate a representative to work with HMS in acquiring
additional third-party provider contracts for the hyperbaric
program.  The Court also ordered HMS to cooperate with the
Debtors in this effort.

At the status hearing on March 21, 2002 to review the parties'
progress, the Reorganized Debtors detailed their efforts in
acquiring third-party provider agreements and in marketing the
hyperbaric program.  The Reorganized Debtors had been able to
obtain additional third party payor contracts and the hyperbaric
program had experienced an increase in patient treatments in the
several months preceding the hearing.  The Reorganized Debtors
point out that they had made efforts above and beyond what was
required of them under the Agreement.

HMS, on the other hand, contends that the result shows that the
Debtors could have obtained these, and more, payor contracts
than they actually had since the beginning of the relationship,
and the Debtors' failure to do so was a default under the
Contract.  HMS argues that, if the additional payor contracts
obtained in those several months had been in place from the
beginning of the relationship, additional amounts would have
been payable by the Debtors to HMS under the Contract due to the
increased pool of patients eligible to be treated at the
facility.  HMS, therefore, asserts that it is entitled to a cure
claim in an amount equal to purported lost profits due to this
alleged breach.

The Reorganized Debtors point out that the plain, unambiguous
language of the Agreement merely required that the Debtors
cooperate with HMS in marketing the hyperbaric program and
obtaining third-party provider contracts but imposed no
affirmative obligation of the Debtors to obtain third-party
provider agreements.  The Reorganized Debtors maintain that the
additional contracts secured in those several months are the
result of efforts made above and beyond what was required of
them under the Agreement.

Over the Reorganized Debtors' objection, HMS presented evidence
of its purported lost profits.  Recognizing that HMS' evidence
was outside the scope of the Status Hearing, the Court allowed
the Debtors an opportunity to investigate HMS' information and
to respond to the alleged evidence for cure amount presented by
HMS at the Status Hearing.

At the close of the March 21, 2002 hearing, the Reorganized
Debtors asked for an opportunity to take some discovery.  The
Court granted it and the Reorganized Debtors served their first
set of interrogatories and document requests.

The Reorganized Debtors subsequently served a second set of
interrogatories and document requests on HMS.

This was met with resistance.  Within an allowed extended period
of time, HMS filed its responses objecting to the discovery
requests.  HMS tells the Court that the discovery requests are
overly broad, unduly burdensome and vague.

          Reorganized Debtors Ask the Court to Compel HMS
                 to Respond to Discovery Requests

The Reorganized Debtors ask the Court to compel HMS to produce
documents responsive to their Second Request For Production Of
Documents and to provide complete answers to their Second Set Of
Interrogatories.

Pursuant to Rule 37 of the Federal Rules of Civil Procedure, a
party, upon reasonable notice to other parties and all persons
affected, may apply for an order compelling disclosure or
discovery.

Such an order to compel is appropriate, Michael G. Busenkell,
Esq., at Cleary, Gottlieb, Steen & Hamilton, asserts, if a party
fails to answer an interrogatory submitted under Rule 33, or if
a party fails to produce documents responsive to a request under
Rule 34. In this case, HMS' unilateral blockade of discovery
based on its non-specific objections is clearly improper, Mr.
Busenkell tells the Court.

"HMS, as the party resisting discovery, must show specifically
how each discovery request is irrelevant, immaterial, unduly
burdensome or overly broad," Mr. Busenkell points out.  But HMS
has made no effort to meet that burden.  Mr. Busenkell asserts
that HMS should at least make a search it considered in good
faith to be reasonable, produce the documents thus located and
indicate the basis for the search that was undertaken so that it
could be objectively evaluated by the Debtors and the Court.

Furthermore, Mr. Busenkell reminds the Court that HMS is a
company with substantial resources and has asserted over
$2,000,000 as a cure claim.

These facts are in favor of ordering the requested discovery,
Mr. Busenkell asserts.

                      HMS Objects To Discovery

HMS tells Judge Walrath that, contrary to the Debtors'
allegation, HMS has fully and properly responded to each of the
discovery requests.

Either the request has been met, or the burden to HMS in
providing additional material will not be outweighed by the
speculative probative value of the material, John D. Demmy,
Esq., at Stevens & Lee, P.C., tells Judge Walrath.

Mr. Demmy asserts that HMS should not be forced to produce
confidential business information to Kindred, a potential
competitor, especially when the information is not probative of
the issues in this matter.

Mr. Demmy points out that Rule 26(b)(1) of the Federal Rules of
Civil Procedure, made applicable to this matter by Rule 7026 of
the Federal Rules of Bankruptcy Procedure, permits parties to
obtain discovery of "any matter, not privileged, which is
relevant to the subject matter involved in the pending action,"
but the scope of discovery and relevance is not unlimited.  
Under Rule 26(b)(2), discovery may be limited when the burden or
expense of the proposed discovery outweighs its likely benefit,
Mr. Demmy adds.

In particular, Mr. Demmy points out that the Debtors requested
documents, which "reflect, pertain or relate" to patient volume,
actual changes, account collections and all third-party payors
in Las Vegas.

These requests are overly broad, Mr. Demmy says.  It would be an
extreme burden in time, cost, and disruption of its business,
for HMS to produce each document that fairly meets these
requests. HMS has produced summaries of its general ledger in
response, Mr. Demmy advises.  HMS' full set of general ledger
consists of hundreds, if not, thousands, of pages, containing
all of the various transactions, the vast majority of which is
extraneous, irrelevant to the issues involved in this matter,
and, in some cases, consists of confidential business
information, Mr. Demmy tells the Court.  Providing all
documents, which "reflect, pertain or relate," would include
virtually every piece of accounting paper generated, received or
maintained by HMS, and would be extremely burdensome to HMS
without corresponding probative value Mr. Demmy contends.

According to Mr. Demmy, the information requested by the
Reorganized Debtors is contained in the Excel spreadsheets (the
general ledger summaries) attached to HMS' response to
Reorganized Debtors' Second Set of Discovery.  The summaries are
easier to read and use than the various bits of information that
may be contained in HMS's mass of accounting information or in
its general ledger, Mr. Demmy explains.

HMS suggests that, if Debtors are concerned about the accuracy
of the information on the spreadsheets, the most cost effective
and least intrusive method of corroboration would be to spot-
check the data -- pick six months' worth of checks, which HMS
would be willing to pull and provide, to allow Debtors to check
the data.

As another example, Mr. Demmy notes that the Debtors seek all of
HMS' contracts, whether relating to vendors or other service
providers, doctors, employees, or otherwise, relating to HMS
programs at five other facilities.

This request clearly is overbroad and not relevant to the issues
involved here, Mr. Demmy says.  There is no need for Kindred, in
certain respects a competitor of HMS, to have copies of all of
these contracts, HMS protests.  These contracts contain
confidential business information, and the Reorganized Debtors
have not shown why such information is relevant in this matter,
Mr. Demmy tells Judge Walrath.

Accordingly, HMS asks the Court to deny the Debtors' Motion to
Compel.

The Reorganized Debtors have served a Third Set of
Interrogatories and Request for Production of Documents on HMS.
(Vencor Bankruptcy News, Issue No. 38; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


VENTAS INC: Will Publish Third Quarter Results on October 29
------------------------------------------------------------
Ventas, Inc., (NYSE:VTR) will issue its third quarter earnings
on Tuesday, October 29, 2002. A conference call to discuss those
earnings will be held that morning at 10:00 a.m. Eastern Time
(9:00 a.m. Central Time.) The call will be webcast live by CCBN
and can be accessed at the Ventas Web site at
http://www.ventasreit.comor at http://www.companyboardroom.com   

Ventas, Inc., is a healthcare real estate investment trust whose
properties include 43 hospitals, 215 nursing facilities and
eight personal care facilities in 36 states. For further
information about Ventas, please visit its Web site at
http://www.ventasreit.com  

As of June 30, 2002, Ventas reported a total shareholders'
equity deficit of about $95 million.


VENTURE HOLDINGS: S&P Keeps Watch on Rating on Unit's Insolvency
----------------------------------------------------------------
Standard & Poor's Ratings Services said that its triple-'C'
corporate credit rating on Venture Holdings Co., LLC remains on
CreditWatch with negative implications where it was placed
December 19, 2001. Venture, a Fraser, Michigan-based
manufacturer of automotive components, had total debt of about
$877 million on March 31, 2002.

On October 1, 2002, the German Municipal Court began formal
insolvency proceedings against Venture's European subsidiary,
Peguform GmbH, and other related entities. Peguform accounted
for about 70% of Venture's 2001 sales. Venture had opposed the
commencement of insolvency proceedings as it pursued a global
restructuring and recapitalization plan.

"It now appears that Peguform could be sold to a third party,
although the potential magnitude and ultimate distribution of
sale proceeds are unclear. Nevertheless, Venture does not have
access to Peguform's cash flow, which severely constrains its
ability to meet its debt service requirements," said Standard &
Poor's analyst Martin King.

Venture's liquidity position is unclear because access to the
company's bank credit facility may be restricted as a result of
the Peguform insolvency proceedings. A potential bankruptcy
filing of Venture's domestic operations is possible.

Standard & Poor's will monitor events as they develop. The
rating could be lowered should Venture file for bankruptcy or
restructure debt in a way that impairs credit quality.


VIASYSTEMS GROUP: Files Prepackaged Reorg. Plan in Delaware
-----------------------------------------------------------
Viasystems Group, Inc., and Viasystems, Inc., filed their
Prepackaged Chapter 11 Plan of Reorganization and the
accompanying Disclosure Statement with the U.S. Bankruptcy Court
for the Southern District of New York.  For full-text copies of
the Plan and the Disclosure Statement, go to:

  http://www.researcharchives.com/bin/download?id=021003004905

                             and

  http://www.researcharchives.com/bin/download?id=021003005501

The Debtors tell the Court that the primary purpose of the Plan
is to effectuate the Restructuring of the Debtors' capital
structure to align it with the Debtors' present and future
operating prospects, likewise providing the Debtors with greater
liquidity. The Debtors disclose that the funds expected to be
generated by the Debtors' and their Subsidiaries will not be
sufficient to meet their debt service requirements and satisfy
its debt obligations unless the Restructuring is consummated.

The Restructuring, the Debtors explain, will reduce the
principal amount of Viasystems' outstanding indebtedness by
approximately $738 million by converting a substantial portion
of such indebtedness into equity of Reorganized Group through:

     i) the transfer of Senior Note Claims and DTI Guaranty
        Claims to Group in exchange for shares of New Junior
        Preferred Stock and New Common Stock,

    ii) the transfer of Subordinated Note Claims to Group in
        exchange for shares of New Common Stock,

   iii) the transfer of a portion of the Existing Bank Debt to
        Group in exchange for shares of New Senior Convertible
        Preferred Stock pursuant to the Rights Offering,

    iv) Group's contribution of cash proceeds from the issuance
        of New Senior Convertible Preferred Stock in the Rights
        Offering to the capital of Viasystems for the repayment
        of outstanding indebtedness under the Existing Credit
        Agreement, and

     v) the transfer of a portion of the Existing Bank Debt to
        Group in exchange for shares of New Common Stock
        pursuant to the Hicks Muse Exchange

The Existing Group Preferred Stock will be exchanged for New
Warrants. All other Equity Interests in Group, including
Existing Group Common Stock, will be cancelled and the holders
of such Equity Interests will not receive or retain any property
or interest on account of such Equity Interests, the Debtors
add.

Viasystems Group, Inc. is a holding company whose principal
assets are its shares of stock of Viasystems, Inc. Viasystems,
through its direct and indirect subsidiaries, is a leading,
worldwide, independent provider of electronics manufacturing
services to original equipment manufacturers primarily in the
telecommunication, networking, automotive, consumer, industrial
and computer industries. The Debtors filed for chapter 11
protection on October 1, 2002. Alan B. Miller, Esq., at Weil,
Gotshal & Manges, LLP represents the Debtors in their
restructuring efforts. When the Companies filed for protection
from its creditors, it listed $1.6 Billion in total assets and
$1.025 Billion in total debts.


VIASYSTEMS: Bankruptcy Filing Prompts S&P to Lower Ratings to D
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior secured bank loan ratings on Viasystems Group Inc.,
to 'D' following the company's filing of a voluntary petition
for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
Viasystems is in the process of a recapitalization that involves
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
about $1.1 billion to about $380 million.

Credit measures for the St. Louis, Missouri-based company
deteriorated as operating performance declined over the past
year because of the downturn in the telecommunications and
networking end markets. Operating losses widened as sales fell
by more than one-third in the first half of 2002 from the like
period in 2001. Viasystems, formed in 1996, is a major provider
of printed circuit boards and had nearly $1.1 billion in debt
outstanding prior to the bankruptcy filing.


WARNACO GROUP: Classification & Treatment of Claims Under Plan
--------------------------------------------------------------
In accordance with Section 1123(a)(1) of the Bankruptcy Code,
Administrative Claims and Priority Tax Claims have not been
classified and will be paid in full.  The Warnaco Group, Inc.,
and its debtor-affiliates' Plan outlines the treatment of these
unclassified Claims:

1. Administrative Claims:

   -- A holder of an Allowed General Administrative Claim,
      except with respect to:

      (a) the Alvarez Incentive Bonus,
      (b) the Designated Postpetition Loans, and
      (c) the claims of the Debt Coordinators and the
          Prepetition Collateral Trustee payable under the DIP
          Order,

      will be paid in full in Cash at the sole option of the
      Debtors in the ordinary course of business as the Claims
      becomes due and owing or on the Initial Distribution Date
      or on other date as the Bankruptcy Court ay order.
      Estimated aggregate amount for the claims is $1,900,000;

   -- On the Effective Date, Administrative Claims for fees
      payable pursuant to Section 1930 of the Judiciary
      Procedures Code, as determined by the Bankruptcy Court at
      the Confirmation Hearing, will be paid in Cash in an
      amount equal to the amount of the Administrative Claims.
      All these fees payable after the Effective Date will be
      assumed and paid by the Reorganized Debtors;

   -- On the Effective Date, the Reorganized Debtors will make
      the payments in Cash and distributions of New Warnaco
      Senior Subordinated Notes and New Warnaco Common Shares
      in satisfaction of the Alvarez Incentive Bonus, which
      specifically consists of:

      Cash                                         $1,950,000
      New Warnaco Senior Subordinated Notes           940,000
      New Warnaco Common Shares                     2,810,000
                                                  ------------
      Total                                        $5,700,000

   -- The Designated Postpetition Loans will be satisfied in
      full by the payments and distributions to be made to the
      Prepetition Secured Lenders.

2. Priority Tax Claims

   Unless otherwise agreed by the holder of the Allowed Priority
   Tax Claim, each holder of an Allowed Priority Tax Claim will
   receive, on the Initial Distribution Date, at the Reorganized
   Debtors' option, cash equal to the amount of the Allowed
   Priority Tax Claim or cash in six equal annual installments,
   together with interest thereon at the legal rate required for
   the Claims in Chapter 11 cases, which interest will be paid
   annually in arrears.  Estimated aggregate amount of these
   Claims is $2,500,000.

3. DIP Facility Claim

   On the Effective Date, the DIP Facility Claim will be paid
   in full in Cash or otherwise satisfied in a manner acceptable
   to the DIP Lenders; provided, however, that all letters of
   credit under the DIP Facility as of the Effective Date will
   remain outstanding as of the Effective Date and will be
   paid, in the event drawn, through a borrowing by the
   Reorganized Debtors under the Exit Financing Facility.

All other Claims and Interests against the Debtors are grouped
into eight classes pursuant to 11 U.S.C. Sec. 1122:

Class 1:  Class 1 consists of all Priority Non-Tax Claims which
          include claims for wages, salaries or commissions
          earned within 90 days before the Petition Date up to
          $4,650 per individual or corporation and contributions
          to employee benefit plans like pension or health or
          life insurance plans arising from services rendered
          within 180 days prior to the Petition Date, subject to
          certain limits.  The Debtors believe that these claims
          have been fully paid pursuant to orders entered by the
          Bankruptcy Court.  Therefore, the aggregate estimated
          amount of Allowed Class 1 claims as of the Petition
          Date is $0.  Otherwise, each Allowed Class 1 Claim
          will be paid in full in cash on the later of the
          Initial Distribution Date and a date that is soon as
          practicable after the date upon which the Claim
          becomes Allowed Priority Non-Tax Claim.

Class 2:  Class 2 consists of all Senior Secured Bank Claims.
          These Claims will be allowed in the aggregate amount
          of $2,185,400,000, which amount is inclusive of all
          amounts, including, without limitation, accrued and
          unpaid interest, owing in respect of the Original
          Foreign Facilities Guaranty Claims.  On the Effective
          Date, each holder of a Class 2 Claim will receive in
          full satisfaction of its Senior Security Bank Claim
          its pro rata share, to be distributed by the
          Administrative Agent in accordance with the
          Prepetition Facility and Intercreditor Agreements:

          (a) cash equal to the amount of the balance due on the
              Original Foreign Facilities Guaranty Claims, which
              will be applied to repay in full satisfaction of
              any outstanding amounts owing by the Debtors under
              the Original Foreign Facilities as of the Petition
              Date;

          (b) New Warnaco Senior Subordinated Notes in the
              aggregate principal amount of $200,000,000; and

          (c) 96.263% of the New Warnaco Common Shares, subject
              to dilution.

          In the event that holders of Class 6 Claims are not
          Entitled to receive distribution, on Effective Date,
          each holder of a Class 2 Claim will receive its pro
          rata share of an additional 0.5821% if the New Warnaco
          Common Shares, subject to dilution.

Class 3:  Class 3 consists of GE Capital Secured Claims under
          the 1997 MLA.  As provided in the GE Capital
          Settlement Agreement, in satisfaction of obligations
          arising under the 1997 MLA, GE Capital will receive
          $15,200,000, less all amounts the Debtors paid to GE
          Capital from the Petition date through and including
          the Effective Date, which amount will be payable
          without interest at the rate of $750,000 per month
          from and after the Effective Date until the GE
          Settlement Amount is paid in full.  Other provisions
          of the GE Capital Settlement Agreement will apply to
          the GE Capital Secured Claim under the 1997 MLA.

Class 4:  Class 4 consists of Other Secured Claims estimated to
          be totaling $1,800,000.  These Claims, at the sole
          option of the Debtors, be:

          -- paid in full in cash on the Initial Distribution
             Date;

          -- reinstated according to the terms of the relevant
             instrument;

          -- paid on other terms as the Debtors and the holder
             of Claims may agree; or

          -- satisfied though the surrender by the applicable
             Debtors or the collateral securing the Claim to the
             holder thereof.

Class 5:  Class 5 consists of Unsecured Claims estimated to be
          totaling $169,200,000.  Each holder of the Allowed
          Unsecured Claim will receive its pro rata share of
          2.529% of the New Warnaco Common Shares, subject to
          dilution.  In the event that holders of Class 6 Claims
          are not entitled to receive a distribution as provided
          in the Plan, each holder of an Allowed Unsecured Claim
          will receive its pro rata share of an additional
          0.015% of the New Warnaco Common Shares, subject to
          dilution.

Class 6:  Class 6 consists of Trust Originated Preferred
          Securities -- TOPrS -- Claims, including Claims
          under the TOPrS Indenture, the TOPrS Supplemental
          Indenture, the TOPrS Guarantee or any documents
          executed in connection with or related to the issuance
          by the TOPrS.  The Claims will be allowed under the
          Plan in an aggregate amount of $125,200,000.  In the
          event that the holders of the Class 6 Claims vote to
          reject the Plan or objects to confirmation of this
          Plan, the Class 5 Claims holders will not receive or
          retain any interest or property under this Plan, and
          no distribution will be made on account of the TOPrS
          Claims.  The New Warnaco Common Shares that would
          otherwise be distributed to the TOPrS Trustee on
          account of the TOPrS Claims will instead be
          distributed pro rata to holders of Allowed Class 2 and
          Allowed Class 5 Claims.  Otherwise, in full
          satisfaction of the TOPrS Claims, on the Initial
          Distribution Date, the Reorganized Debtors will
          distribute to the TOPrS Trustee, on behalf of the
          Designer Finance Trust, 0.596% of the New Warnaco
          Common Shares, subject to dilution, and in addition
          will pay the amount of up to $300,000 to the TOPrS
          Trustee on account of its actual and reasonable fees
          and expenses incurred under the TOPrS Indenture,
          subject to receipt and review of invoices detailing
          the fees and expenses.  All New Warnaco Common Shares
          distributed to or for the benefit of Designer Finance
          Trust will be distributed by the TOPrS Trustee to the
          holders of TOPrS.

Class 7:  Class 7 consists of Intercompany claims, which will
          be discharged.  The Intercompany Claims holders will
          not be entitle to receive or retain any property on
          account of those Claims.

Class 8:  Class 8 consists of Common Stock Claims and Interests.
          Interests will be cancelled and the holders of Class
          8 Claims will not be entitled t receive or retain any
          property on account of their Claims and Interests.

Only holders of claims in Class 2, 5, 6, and 8 can vote on the
plan.  Classes 1, 3 and 4 are deemed to accept the plan because
they are paid in full.  For smooth sailing through the
confirmation process, the Debtors are looking for affirmative
votes to accept the plan from holders of 2/3 of the dollar
amount of claims and 50% of the number of claims in Class 5.
(Warnaco Bankruptcy News, Issue No. 34; Bankruptcy Creditors'
Service, Inc., 609/392-0900)  


WORLDCOM INC: Proposes Uniform Claims Settlement Procedures
-----------------------------------------------------------
Worldcom Inc., and its debtor-affiliates seek the Court's
authority to settle certain threatened or actual claims and
causes of action asserted by or asserted against their Chapter
11 estates pursuant to certain settlement procedures.

According to Marcia L. Goldstein, Esq., at Weil Gotshal & Manges
LLP, in New York, the Debtors' management team, with the
assistance of in-house and outside counsel, investigated,
evaluated and attempted to resolve claims or potential causes of
action asserted by or against the Debtors.  Depending on the
specific facts and the risks involved in engaging in litigation
with respect to these claims, the Debtors would make appropriate
offers to settle these claims.

During the course of these Chapter 11 cases, Ms. Goldstein
believes that the Debtors will be required to liquidate numerous
claims asserted against them.  As of the Petition Date, the
Debtors are party to over 1,000 lawsuits as plaintiffs and over
2,000 lawsuits as defendants.  The Debtors have already asserted
and may assert various additional claims for recovery against
other parties postpetition.  In many cases, engaging in
litigation over disputed claims will require the Debtors to
expend significant funds.  When the Debtors, consistent with its
prepetition practices, evaluates the probabilities of success in
challenging or asserting claims against the potential cost of
litigating these claims, it often determines that a compromise
and settlement is appropriate.

Without a settlement procedure, Ms. Goldstein fears that the
Debtors would be required to seek specific Court approval for
each individual compromise and settlement.  Given the number of
claims that the Debtors believe can be settled for relatively
small settlement amounts when compared to the overall operation
of its businesses, holding individual hearings, filing
individual pleadings, and sending notice of each proposed
settlement to every one of the numerous creditors and interested
parties entitled to receive notice in these cases would be an
expensive, cumbersome and highly inefficient way to resolve many
of the disputed claims.

Accordingly, the Debtors propose to implement certain guidelines
and procedures with respect to the compromise and settlement of
disputed Settlement Procedures Claims asserted both by and
against the Debtors.  Ms. Goldstein explains that the Debtors'
estates will be spared the expense, delay and uncertainty that
otherwise would be associated with resolving Settlement
Procedures Claims, while preserving an oversight function for
key parties-in-interest.

The Debtors seek to implement a three-tier Settlement
Procedures, based on the proposed settlement amount agreed to by
the parties and the documented difference.  The Documented
Difference is the difference between:

-- with respect to claims asserted against the Debtors, the
   estimated value of the claim as determined in good faith by
   the Debtors or, with respect to claims asserted by the
   Debtors, the amount initially sought to be recovered, and

-- the proposed amount for which the Debtors are seeking to
   settle the claim.

The terms of the settlement procedures are:

A. With Respect To Claims Asserted By Worldcom:

   1. If the Documented Difference is less than $1,000,000, the
      Debtors will be authorized to settle the claim without
      prior approval of the Court or any other party-in-
      interest.

   2. If the Documented Difference is greater than or equal to
      $1,000,000 but less than $5,000,000:

       -- WorldCom will provide:

          a. the U.S. Trustee,
          b. the attorneys for the postpetition lenders, and
          c. the attorneys for the Committee,

          a summary of the terms of a proposed settlement.

       -- A Settlement Summary should set forth:

          a. the Settlement Amount,

          b. the name of the parties to the settlement,

          c. a summary of the dispute, including a statement of
             the Debtors' Amount and the basis for the
             controversy,

          d. an explanation of why the settlement of the claim
             is favorable to the Debtors, its estates, and its
             creditors, and

          e. a copy of any proposed settlement agreement.

       -- If any of the Notification Parties object within 10
          days after the date of transmittal of the Settlement
          Summary, the Debtors, in their sole discretion, may:

          a. seek to renegotiate the proposed settlement and may
             submit a revised Settlement Summary in connection
             therewith, or

          b. file a motion with the Court pursuant to Bankruptcy
             Rule 9019 requesting approval of the proposed
             compromise and settlement.

       -- In the absence of an objection to a proposed
          settlement by the Notification Parties, the Debtors
          will be deemed authorized, without further order of
          the Court, to enter into an agreement to settle the
          claim at issue, as provided in the Settlement Summary.

    3. If the Documented Difference is greater than or equal to
       $5,000,000, WorldCom will file a Rule 9019 Motion.

B. With Respect To Claims Asserted Against WorldCom:

   1. If the Settlement Amount is less than $1,000,000, the
      Debtors will be authorized to settle the claim without
      prior approval of the Court or any other party-in-
      interest.

   2. If the Documented Difference is greater than or equal to
      $1,000,000 but less than $5,000,000:

       -- The Debtors will provide the Notification Parties a
          Settlement Summary;

       -- If any of the Notification Parties objects within 10
          days after the date of transmittal of the Settlement
          Summary, the Debtors, in its sole discretion, may:

          a. seek to renegotiate the proposed settlement and may
             submit a revised Settlement Summary, or

          b. file a Rule 9019 Motion with the Court seeking
             approval of the proposed settlement; and

       -- In the absence of an objection to a proposed
          settlement by the Notification Parties, the Debtors
          will be deemed authorized, without further order of
          the Court, to enter into an agreement to settle the
          claim at issue, as provided in the Settlement Summary.

   3. If the Documented Difference is greater than or equal to
      $5,000,000, the Debtors will file a Rule 9019 Motion.

   4. If the Settlement Amount with respect to any individual
      proposed settlement is equal to or greater than
      $10,000,000, the Debtors will file a Rule 9019 Motion.

WorldCom seeks the Court's authority to pay and to issue
customer credits on account of the settled claim, in the
ordinary course of operating its businesses, if the Settlement
Amount is $10,000 or less.

For the compromise or settlement of any claims by or against an
insider, the Debtors will be required to file a motion with the
Court requesting approval of the compromise and settlement
pursuant to Bankruptcy Rule 9019.

The Debtors will also file with the Court reports of all
settlements entered into.  The Debtors will serve copies of
these reports on:

-- the U.S. Trustee,
-- the attorneys for the Debtors' postpetition lenders, and
-- the attorneys for the Committee. (Worldcom Bankruptcy News,
Issue No. 9; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


WYNDHAM INT'L: Closes Sale of Ramada Beachwood to Pay Down Debt
---------------------------------------------------------------
Furthering its strategy to become a proprietary-branded hotel
operating company, Wyndham International, Inc., (NYSE:WYN) has
closed the sale of the Ramada Beachwood, Ohio. All net proceeds
from the sale will be used to pay down debt. This follows last
week's announcement of a definitive agreement with Westbrook
Hotel Partners IV, LLC to sell 13 hotel properties for
approximately $447 million, expected to close within three to
four months.

"This most recent sale is another important step in our
strategic plan to sell all non-strategic assets and to lower our
leverage. As our plan moves ahead, we are continuing to grow and
strengthen the Wyndham brand through management and franchise
agreements," said Fred J. Kleisner, chairman and chief executive
officer of Wyndham International.

At the beginning of 1999, Wyndham International identified 152
non-strategic, owned assets. With this sale, the Company will
have successfully disposed of 99 of those properties, raising
approximately $1.4 billion. In addition, Wyndham International
has converted another 16 to the proprietary Wyndham brand,
leaving 37 non-strategic assets to sell. Wyndham International
is continuing to discuss the sale of the remaining non-strategic
assets with Westbrook and other parties.

As previously announced, Wyndham International has eliminated
all $287 million in debt maturities coming due during 2002.
Wyndham has already begun addressing the subsequent maturities
due June 2003 and beyond. The Company's liquidity remains strong
despite the sluggish economy. As announced on Sept. 3, 2002,
after payment of all required expenses, including debt service
obligations and capital expenditures, the Company has
approximately $255 million in excess liquidity.

"Although we are pleased with the progress we have made with
non-strategic asset dispositions and with our business plan, we
remain frustrated with the trading price of our common stock,"
added Kleisner. "During an uncertain economic environment, our
Company remains focused on the implementation of our plan."

Previously, Wyndham International announced that it had received
notification from the New York Stock Exchange (NYSE) that the
Company's share trading price has fallen below the continued
listing criteria for an average closing price of a security of
less than $1.00 over a consecutive 30 trading day period.
Wyndham International's management has met with NYSE
representatives. The NYSE's Listing and Compliance Committee has
agreed to continue the listing of the Company's common stock
through Nov. 15, 2002, subject to certain conditions. At that
time, the Exchange Committee will reevaluate the Company's
listing status.

The Company stated in its June 2002 Proxy that it had filed a
listing application with the American Stock Exchange to provide
an alternative in the event that the NYSE continued listing
criteria is not met. The Company will continue to evaluate all
available alternatives in the best interest of its shareholders.

Wyndham International offers upscale and luxury hotel and resort
accommodations through proprietary lodging brands and a
management services division. Based in Dallas, Wyndham
International owns, leases, manages and franchises hotels and
resorts in the United States, Canada, Mexico, the Caribbean and
Europe. For more information, visit http://www.wyndham.com For  
reservations, call 800-Wyndham.

                          *********

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 ***