TCR_Public/021010.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

            Thursday, October 10, 2002, Vol. 6, No. 201

                          Headlines

ADELPHIA COMMS: Court OKs 5-Year Buffalo Sabres Broadcast Pact
ADVANCED GLASSFIBER: S&P Drops Senior Secured Debt Rating to D
ALLEGHENY ENERGY: Defaults on Principal Credit Agreements
ALLEGHENY ENERGY: Fitch Cuts & Places Ratings on Watch Negative
AMISTAR CORP: Fails to Maintain Nasdaq Min. Listing Requirements

ANC RENTAL: Has Until December 15, 2002 to Use Cash Collateral
APPLE CAPITOL: Applebee Gets Nod to Acquire 21 Franchise Units
APPLIED EXTRUSION: Completes Review of Strategic Alternatives
AQUILA INC: Appoints Keith Stamm as Chief Operating Officer
AT&T CANADA: Reports Closing of Deposit Receipt Transaction

AT&T CANADA: Brascan Financial Purchases 50% of Equity Stake
BUDGET GROUP: Wants More Time to Make Lease-Related Decisions
BURLINGTON: Pres. & COO Douglas J. McGregor Retiring by Year-End
CHAMPION TECHNOLOGIES: Inks Pact to Sell Assets to Lynch Corp.
CONSOLIDATED CONTAINER: S&P Places B- Corp. Credit on Watch Neg.

CORVU CORP: Virchow Krause Expresses Going Concern Doubt
COVANTA: Committee Attacks 9.25% Noteholders' Secured Position
CTC COMMUNICATIONS: Court Appoints BSI as Claims & Notice Agents
EMPRESA ELECTRICA: Confirmation Hearing Set for October 22, 2002
ENRON CORP: Sempra Asks Court to Hold Considar in Civil Contempt

ENRON: Study Says Fall of EnronOnline Affects Natural Gas Trade
EOTT ENERGY: Receives Court Approval of First-Day Motions
EOTT ENERGY: Case Summary & 2 Largest Unsecured Creditors
EOTT ENERGY: Files for Prepackaged Chapter 11 Reorg. in Texas
FEDERAL-MOGUL: Hiring Secret Professionals to do Secret Work

FORMICA CORP: SDNY Court Fixes October 15, 2002 Claims Bar Date
FOUNTAIN POWERBOAT: External Auditors Raise Going Concern Doubt
FRUIT OF THE LOOM: Resolves Dispute with Farley over Cyra Shares
GADZOOX: Gets OK to Reject Lease Pact and Relocate Headquarters
GEMSTAR-TV GUIDE: Names Jeff Shell as New Chief Exec. Officer

GENEVA STEEL: Seeks Approval to Hire Prebon Energy as Appraiser
GLOBAL CROSSING: Mr. Pascazi Whines About Exclusivity Again
GOLFSMITH: S&P Assigns B Corp. Credit & Sr. Secured Notes Rating
HI-RISE RECYCLING: Donco Acquires Solid Waste Equipment Division
INVENTRONICS: Obtains Forbearance Period after Defaults on Loan

ISLE OF CAPRI: Closes Tunica Property Sale to Boyd Gaming Unit
ISOMET CORP: Bank of America Agrees to Forbear Until October 31
JDN REALTY: Fitch Keeps Watch on BB-Rated Senior Unsecured Notes
KELLSTROM INDUSTRIES: Del. Court Fixes Nov. 10 Claims Bar Date
KOLORFUSION: May Need to Seek New Financing to Fund Operations

LEGAL CLUB OF AMERICA: Pursuing Debt Restructuring Plan in 2003
LYONDELL CHEMICAL: Board Declares Regular Quarterly Dividend
MAGELLAN HEALTH: NYSE to Commence Process to Delist Shares
MAGELLAN HEALTH: S&P Junks Counterpart Credit Rating
METRICOM: Court Fixes October 14 as Final Admin. Claims Bar Date

MOBILE TOOL: Seeks Court Approval of $23 Million DIP Financing
NANOPIERCE TECHNOLOGIES: Obtains Judicial Title to All Patents
NCS HEALTHCARE: Omnicare Extends Exchange Offer Until October 21
NEWCOR INC: Seeks More Time to Make Lease-Related Decisions
NEXTWAVE TELECOM: Awaits Supreme Court's FCC License Ruling

PACIFIC GAS: CPUC & Committee Wins Approval to Hire UBS Warburg
PEMSTAR INC: Lenders Relax Fin'l Covenants Under Credit Pacts
PEREGRINE SYSTEMS: Tally Offers Transition Plan to Customers
PG&E NATIONAL: Moody's Hatchets Senior Unsec. Debt Rating to Ba3
PG&E NATIONAL: Parent Comments on Recent Moody's Downgrade

PHILIPS INT'L: Completes Sale of Sacramento Kmart Store for $6MM
PLANVISTA CORP: Will Publish Third Quarter Results on October 24
REFAC: Sells Product Development Business to Product Genesis
RELIANCE GROUP: Court Approves IRS Claim Settlement Agreement
ROHN INDUSTRIES: Will Commence Trading on Nasdaq SmallCap Monday

SAFETY-KLEEN CORP: Wants to Settle with Carriers & Create Trust
SAMSONITE: S&P Cuts Corp. Credit & Sr. Sec. Rating to B- from B
SC FUNDING: Fitch Affirms BB Rating on Class D P-T Certificates
SHELBOURNE PROPERTIES: Selling Melrose Park Assets for $5.5 Mil.
TECSTAR: Wants to Stretch Exclusivity Until December 4

TELERGY INC: Michael Fox Completes Auction for Remaining Assets
TELEMAIS TELECOM: Board Approves 1-For-20 Reverse Stock Split
TELEVIDEO: Receives Term Sheet for Homebound's Proposed Merger
UNIVIEW TECHNOLOGIES: Grant Thornton Issue Going Concern Opinion
US AIRWAYS: Gets Go-Signal to Hire Ordinary Course Professionals

US INDUSTRIES: Expects to Close Sale of SiTeco Within the Month
US INDUSTRIES: Extends Exchange Offer for 7-1/8% Notes to Nov. 1
VALENTIS INC: Slashes 45 Jobs to Reduce Costs to $7MM Annually
VENTAS INC: Inks Pact to Invest $120 Mill. with Trans Healthcare
VENTURE HOLDINGS: Moody's Junks Ratings Due to Unit's Insolvency

VIASYSTEMS GROUP: Weil Gotshal Serving as Bankruptcy Attorneys
WINSTAR COMMS: Ch. 7 Trustee Hires MCL Associates as Consultants
WORLDCOM: Proposes Procedures to Resolve Disputes with Utilities
XCEL ENERGY: Fitch Has No Plan to Take Any Rating Action

* Sixty CEOs and COOs Form Pinnacle Peak Advisors
* Robert Lindquist Joins Citigate Global Intelligence & Security

* DebtTraders' Real-Time Bond Pricing

                          *********

ADELPHIA COMMS: Court OKs 5-Year Buffalo Sabres Broadcast Pact
--------------------------------------------------------------
Adelphia Communications Corp., and its debtor-affiliates
obtained Court approval of its five-year Buffalo Sabres
Broadcast Rights Agreement.

The salient terms of the License Agreement are:

-- Licensee:  Parnassos LP and other subsidiaries of ACOM as it
   may designate.  The obligations of each Licensee are several
   as to any other Licensee.

-- Guarantor:  ACOM

-- Allocation of the Rights:  At the time an Additional Licensee
   is designated by ACOM, it will make a pro-rata allocation of
   the Rights and the payment obligations to the Additional
   Licensee.

-- Internal Sublicensees and Internal Distributors:  Each
   Licensee will have the right, but not the obligation, to
   sublicense the Rights to any subsidiary of ACOM that is a
   television or radio network.  In addition, each Licenseee and
   Internal Sublicensee may enter into distribution agreements
   with other ACOM subsidiaries that are not Internal
   Sublicensees.  One Internal Sublicensee will, in all events,
   be Empire Network, or if not Empire Network, another ACOM
   subsidiary that replaces Empire Network as the primary sports
   network channel operated by ACOM or its subsidiaries in the
   Western New York area.  Each Licensee and Internal
   Sublicensee will agree upon the terms of the sublicense,
   provided however, that the terms of any sublicense executed
   with an Internal Sublicensee will subject the Internal
   Sublicensee to all terms, conditions and obligations of the
   License Agreement other than the obligations to make Rights
   Fee payments, Production Fee payments, and any other monetary
   obligations to Niagara Hockey.  Notwithstanding the fact that
   there may be multiple Internal Sublicensees, Niagara Hockey
   games broadcast on television will appear on no more than two
   networks or channels.

-- The Rights:  Conventional radio, terrestrial and satellite
   television broadcast distribution rights to all Sabres games
   each Season during the Term.

-- License Rights Fee:  $6,500,000 per Season during the Term.

-- Territory:  Western New York and a portion of the surrounding
   area.

-- Exclusivity:  Licensees will have exclusive rights as to the
   distribution via conventional radio and terrestrial and
   satellite television in the Territory during the Term, and
   Niagara Hockey will not during the Term grant any Rights to a
   third-party for use during the Term.

-- Term:  The Term will be from the date of execution through
   August 31, 2007.  By written notice to Licensees delivered on
   or before July 1, 2003, Niagara Hockey will have the right,
   in its sole discretion, to terminate the Agreement effective
   August 31, 2003.  Upon termination, Niagara Hockey is
   required to pay to Licensees the aggregate sum of $1,000,000,
   and upon payment Niagara Hockey and its subsidiaries and
   affiliates will have no further obligation to Licensees or
   ACOM, other than for liabilities accrued prior to
   termination.

-- Carriage:  Licensees are required to distribute on the Empire
   Sports Network, or a successor, the live television
   broadcasts and on WNSA, or a successor, an audio simulcast of
   all of the licensed games produced by Niagara Hockey.
   Licensees may broadcast and cause the distribution of the
   licensed games on conventional radio and terrestrial and
   satellite television, in each case, in either analogue or
   digital formats.

-- Right to Sublicense:  Subject to certain conditions,
   Licensees will have the right to sublicense broadcast radio
   And television rights for carriage by another television
   network or channel --e.g., another broadcast network or an
   ACOM channel separate from Empire Network.

-- Obligation to Broadcast:  Licensees are required, at all
   times during the Term, to make the licensed games generally
   available on commercially reasonable terms:

   a. to cable and satellite television operators serving
      subscribers throughout the Team Spheres of Influence; and

   b. to at least one radio station serving subscribers
      throughout the Team's radio Territory.

-- Production Fees:  Niagara Hockey, at its sole expense, will
   produce and deliver the game feeds to Licensees at a place
   and in a format as may reasonably be designated by Licensees
   and subject to the prior written consent of Niagara Hockey.
   Niagara Hockey will produce and deliver the game broadcasts
   to Licensees:

    a. not less than one pre-season Team game and

    b. not less than 74 regular season Team games.

   In addition, Niagara Hockey will deliver to Licensees all
   exhibition, pre-season, regular season, and first and second
   round playoff games actually produced by Niagara Hockey.
   Empire Network will remain responsible during the Term for
   the insertion and coordination of all advertising on the
   games produced by Niagara Hockey.  As a contribution to
   production costs, Licensees will pay to Niagara Hockey a
   production fee equal to $2,000,00 per season during the Term.
   Licensees will pay the Production Fee in 8 equal installments
   of $250,000, each installment will due and payable on or
   before the 15th day of each month during the period October
   15th through May 15th inclusive during each Season of the
   Term.

-- Termination of Empire Sales Joint Venture:  The Empire Sales
   joint venture previously operated by the parties in respect
   of certain prior Seasons will not been renewed and will be
   deemed null and void.  In addition, the parties have agreed
   upon a settlement of any remaining receivables from the prior
   operation of the joint venture.

-- Advertising:  Advertising inventory on the licensed game
   broadcasts will remain the property of Licensees, but will be
   sold exclusively by Niagara Hockey as exclusive sales agent
   for Licensees.  Licensees will pay to Niagara Hockey for the
   advertising sales services and traffic and billing operations
   an amount equal to the sum of all of Niagara Hockey's direct
   and indirect costs and expenses incurred in connection with
   the conduct of the advertising sales on Licensees' behalf.

-- Promotional Rights:  Niagara Hockey grants to Licensees
   during the Term the nonexclusive license to use in the
   Territory the name, symbol, seal, emblem and insignia of the
   Team, in each case to the extent owned or licensed by Niagara
   Hockey with the power to license and sublicense as
   applicable. (Adelphia Bankruptcy News, Issue No. 19;
   Bankruptcy Creditors' Service, Inc., 609/392-0900)


ADVANCED GLASSFIBER: S&P Drops Senior Secured Debt Rating to D
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its senior secured
debt rating on Advanced Glassfiber Yarns LLC to 'D' from double-
'C' following the company's announcement that it would not make
a $5.9 million interest payment due September 30, 2002, under
its term loan facility.

Standard & Poor's said that at the same time, it removed the
lowered rating from CreditWatch. Standard & Poor's corporate
credit and subordinated debt ratings on the company were lowered
to 'D' on July 15, 2002.

Aiken, South Carolina-based AGY has total debt of about $330
million. The company's senior lenders have agreed to extend
their forbearance agreement until October 31, 2002, while the
parties continue restructuring discussions. Restructuring
discussions are also continuing with holders of the company's
$150 million 9-7/8% senior subordinated notes.

"Conditions within AGY's end markets, particularly electronics,
remain extremely depressed", said Standard & Poor's credit
analyst Cynthia Werneth. "The company is focusing on cash
generation, mainly through inventory reductions, and expects to
have sufficient liquidity to satisfy its cash obligations in the
near term despite being subject to a borrowing cap of $35
million under its revolving credit facility".


ALLEGHENY ENERGY: Defaults on Principal Credit Agreements
---------------------------------------------------------
Allegheny Energy, Inc., (NYSE: AYE) is in technical default
under its principal credit agreements and those of its
subsidiaries, Allegheny Energy Supply Company, LLC, and
Allegheny Generating Company, after it declined to post
additional collateral in favor of several trading
counterparties.

Those counterparties declared Allegheny Energy Supply in default
under their respective trading agreements, which triggered
cross-default provisions under the credit agreements and other
trading agreements. These collateral calls followed the
downgrading of the Company's credit rating by Moody's Investors
Service last week.

Allegheny Energy is in ongoing discussions with its bank
lenders, with a view toward obtaining required waivers and
additional funding. Allegheny believes that its underlying
businesses remain fundamentally sound, and that it will
ultimately be able to obtain the necessary liquidity to resolve
its current situation. The Company announced, however, that it
has determined not to post additional collateral with trading
counterparties pending resolution of its bank discussions.

Allegheny Energy also announced that, based on preliminary
results for the third quarter and continued weakness in the
wholesale energy market, it anticipates that 2002 and 2003
earnings per share will be lower than previously expected. The
Company anticipates that it will provide revised earnings
guidance no later than the time it releases third quarter
earnings in early November.

With headquarters in Hagerstown, Md., Allegheny Energy is an
integrated Fortune 500 energy company with a balanced portfolio
of businesses, including Allegheny Energy Supply, which owns and
operates electric generating facilities and supplies energy and
energy-related commodities in selected domestic retail and
wholesale markets; Allegheny Power, which delivers low-cost,
reliable electric and natural gas service to about three million
people in Maryland, Ohio, Pennsylvania, Virginia, and West
Virginia; and a business segment offering fiber-optic and data
services, energy procurement and management, and energy
services. More information about the Company is available at
http://www.alleghenyenergy.com


ALLEGHENY ENERGY: Fitch Cuts & Places Ratings on Watch Negative
---------------------------------------------------------------
Fitch Ratings has lowered the ratings of Allegheny Energy, Inc.,
and its subsidiaries Allegheny Energy Supply Co. LLC,
Monongahela Power Company, Potomac Edison Company, West Penn
Power Company, Allegheny Generating Company and AE Supply's
special purpose entity Allegheny Energy Supply Statutory Trust
2001. Fitch has placed the ratings for AYE and it subsidiaries
on Rating Watch Negative.

          The ratings affected are listed below:

                  Allegheny Energy, Inc.

      -- Senior unsecured debt lowered to 'BB' from 'BBB';

      -- Commercial paper lowered to 'B' from 'F2' and
          withdrawn;

      -- Ratings Placed on Rating Watch Negative.

                 West Penn Power Company

      -- Medium-term notes lowered to 'BBB-' from 'A-';

      -- Commercial paper lowered to "B" from "F2" and
          withdrawn;

      -- Ratings Placed on Rating Watch Negative.

                 Potomac Edison Company

      -- First mortgage bonds lowered to 'BBB' from 'A-';

      -- Senior unsecured notes lowered to 'BBB-' from 'BBB+';

      -- Commercial paper remains unchanged at 'F2';

      -- Ratings Placed on Rating Watch Negative.

               Monongahela Power Company

      -- First mortgage bonds lowered to 'BBB' from 'A-';

      -- Medium-term notes/Pollution control revenue bonds
          (unsecured) lowered to 'BBB' from 'BBB+';

      -- Preferred stock lowered to 'BB+' from 'BBB';

      -- Commercial paper remains unchanged at 'F2';

      -- Ratings placed on Rating Watch Negative.

           Allegheny Energy Supply Company LLC

      -- Senior unsecured notes lowered to 'BB-' from 'BBB-';

      -- Commercial paper remains at 'B' and withdrawn;

      -- Ratings Placed on Rating Watch Negative.

              Allegheny Generating Company

      -- Senior unsecured debentures lowered to 'BB-' from 'BBB-

      -- Commercial paper remains at 'B' and withdrawn;

      -- Ratings Placed on Rating Watch Negative.

           Allegheny Energy Statutory Trust 2001

      -- Senior Secured Notes lowered to 'BB-' from 'BBB-';

      -- Ratings Placed on Rating Watch Negative.

The ratings not affected are as follows:

                   West Penn Funding LLC

      -- Transition bonds 'AAA'.

           Allegheny Energy Supply Company LLC

      -- Pollution control bonds (MBIA-Insured) 'AAA'.

AYE is a registered utility holding company, which owns three
regulated utilities, Monongahela Power, Potomac Edison and West
Penn Power and two non-utility subsidiaries. The utilities
deliver electric and gas service to 1.5 million customers in
parts of Maryland, Ohio, Pennsylvania, Virginia, and West
Virginia and 230,000 customers in West Virginia, respectively.
AYE's non-utility subsidiaries consist of AE Supply Co. LLC,
which develops, acquires, owns and operates generating plants
and is a marketer of electricity and other energy products and
Allegheny Ventures which is involved in telecommunications and
energy related projects.


AMISTAR CORP: Fails to Maintain Nasdaq Min. Listing Requirements
----------------------------------------------------------------
Amistar Corporation (Nasdaq: AMTA) reported receiving notice on
October 4, 2002 that it is subject to delisting from the NASDAQ
Small Cap Market for failure to meet the minimum closing bid
price of $1.00 for the prior 30 days. The Company has 180 days
to comply with the minimum closing bid price requirement or
possibly face delisting.  In the event the Company fails to
comply with the minimum bid price requirement at the end of the
180 day period, the Company believes it will receive an 180 day
extension based on the initial inclusion requirements.


ANC RENTAL: Has Until December 15, 2002 to Use Cash Collateral
--------------------------------------------------------------
Judge Walrath grants ANC Rental Corporation and its debtor-
affiliates until December 15, 2002 to use the Cash Collateral on
the same terms and conditions set forth in the previous cash
collateral order.

The Cash Collateral will be used to:

-- fund the payment of all operating expenses of the Debtors,
   including postpetition costs relating to, among others, the
   maintenance of the various vehicles used by the Debtors and
   the payment of rent, taxes, utilities, salaries and wages,
   employee benefits and necessary capital expenditures;

-- pay certain obligations set forth in the various motions
   filed with this Court during the pendency of these Chapter 11
   cases;

-- finance and purchase the automobiles that are rented by the
   Debtors;

-- provide, in the ordinary course of business, liquidity to
   certain of the Debtors' non-debtor foreign subsidiaries on an
   "as-needed" basis to cover working capital shortfalls at
   certain times of the year; and

-- fund other administrative expenses incurred by the Debtors
   during the pendency of their Chapter 11 cases, including,
   without limitation:

   (a) professional fees and expenses allowed by the Court,

   (b) reimbursement of allowed expenses incurred by the members
       of any official committee appointed by the Office of the
       United States Trustee in the Debtors' cases,

   (c) fees payable under Section 1930 of the Judiciary
       Procedures Code and related costs, and

   (d) other charges incurred in administering the Debtors'
       Chapter 11 cases. (ANC Rental Bankruptcy News, Issue No.
       20; Bankruptcy Creditors' Service, Inc., 609/392-0900)


APPLE CAPITOL: Applebee Gets Nod to Acquire 21 Franchise Units
--------------------------------------------------------------
Applebee's International, Inc., (Nasdaq:APPB) that the
Bankruptcy Court for the Southern District of Florida has
entered an order approving the sale of 21 franchise restaurants
located in the Washington, D.C. area operated by Apple Capitol
Group, LLC to Applebee's International.

Applebee's International expects to close under its previously
negotiated purchase agreement to acquire the restaurants in the
fourth quarter of 2002, subject to obtaining operating licenses
and other third-party consents. Under the terms of the purchase
agreement and an agreement entered into with one of Apple
Capitol's secured lenders, the total cost will be $34.3 million,
subject to adjustment.

Applebee's International, Inc., headquartered in Overland Park,
Kan., develops, franchises and operates restaurants under the
Applebee's Neighborhood Grill and Bar brand, the largest casual
dining concept in the world. There are currently 1,461
Applebee's restaurants operating system-wide in 49 states and
eight international countries. Additional information on
Applebee's International can be found at the company's Web site
http://www.applebees.com


APPLIED EXTRUSION: Completes Review of Strategic Alternatives
-------------------------------------------------------------
Applied Extrusion Technologies, Inc., (NASDAQ NMS - AETC)
announced that, after a review of its strategic options, the
Company has concluded that executing its strategic business plan
and recently announced restructuring are in the best interests
of its shareholders.

In June, the Company announced that it had received unsolicited
expressions of interest to acquire the Company and that it would
review all strategic options. "The values inherent in the
expressions of interest were not adequate when compared with the
potential value of the Company based on executing our management
plan," commented Amin J. Khoury, Chief Executive Officer and
Chairman of the Board. "We are optimistic about the long-term
prospects of the business and look forward to returning to
profitability in fiscal 2003," concluded Mr. Khoury.

Applied Extrusion Technologies, Inc., is a leading North
American developer and manufacturer of specialized oriented
polypropylene films used primarily in consumer products labeling
and flexible packaging applications.

                            *    *    *

As previously reported, Standard & Poor's assigned its
single-'B'-plus rating to Applied Extrusion Technologies Inc.'s
newly established $50 million revolving credit facility maturing
in 2004, which replaces the company's $80 million revolving
credit facility due January 2003. The rating was placed on
CreditWatch with developing implications.

In addition, Standard & Poor's raised the rating on the $275
million senior unsecured notes due 2011 to single-'B' from
single-'B'-minus and placed it on CreditWatch with developing
implications due to the reduced amount of priority debt in the
capital structure following the establishment of the smaller-
size bank facility. The single-'B' corporate credit rating
remains on CreditWatch with developing implications (where it
were placed on July 8, 2002) following the announcement that the
firm has hired a financial advisor to evaluate options to
maximize shareholder value.


AQUILA INC: Appoints Keith Stamm as Chief Operating Officer
-----------------------------------------------------------
Aquila, Inc., (NYSE:ILA) announced that Keith Stamm has been
named Senior Vice President and Chief Operating Officer and Mike
Jonagan has been appointed Senior Vice President, Capacity
Services.

Reporting to Stamm, Jonagan will oversee the continuing wind-
down of Aquila's energy trading and will manage the company's
non-regulated generation assets across the United States. Stamm
will also have responsibility for domestic and international
network operations and the sale of the company's non-core
assets.

"Keith Stamm has served Aquila and its affiliates, both foreign
and domestic, and in both regulated and non-regulated
businesses, for nearly 20 years in a variety of positions," said
Richard C. Green, Jr., chairman, president and chief executive
officer. "Mike Jonagan also has a very successful track record
in a variety of positions at Aquila. Both these leaders share my
focus on reestablishing stability in our businesses as quickly
as possible."

Stamm now reports to Green. Following 14 years with the Missouri
Public Service division in various engineering and operating
capacities, Stamm joined Aquila's first power trading group in
1996. In 1997 he became chief executive officer of United Energy
in Australia, an electric and natural gas utility in Melbourne
that is managed and 34 percent-owned by Aquila. He returned to
Kansas City in early 2000 to assume the role of chief executive
officer of the Aquila Merchant Services subsidiary. In November
2001, he was appointed president and chief operating officer of
Aquila's Global Networks Group, which manages all the company's
network operations serving more than 6 million customers in the
United States, Canada, Australia, New Zealand and the United
Kingdom. He became Senior Vice President, Strategic Initiatives,
in August 2002.

Stamm is certified as a professional engineer and has a
bachelor's degree in mechanical engineering from the University
of Missouri and an M.B.A. from Rockhurst College in Kansas City.

Jonagan, a 16-year veteran with the company, has served as chief
executive officer of the U.S. operations of Aquila's Global
Networks Group since April. Prior to that, he completed a two-
year assignment in Australia as chief operating officer of
United Energy. Before going to Australia, Jonagan was vice
president of Aquila's U.S. power supply operations and held
various leadership positions in the company's network generation
and merchant power operations. A licensed professional engineer,
he has a bachelor's degree in mechanical and petroleum
engineering from the University of Missouri-Rolla and a master's
in engineering management from the University of Kansas.

Based in Kansas City, Missouri, Aquila operates electricity and
natural gas distribution networks serving more than six million
customers in seven states and in Canada, the United Kingdom, New
Zealand and Australia. The company also owns and operates power
generation and mid-stream natural gas assets. At June 30, 2002,
Aquila had total assets of $11.9 billion. More information is
available at http://www.aquila.com

                          *    *    *

As previously reported, Aquila Inc.'s current liquidity position
is sufficient relative to scheduled upcoming payments. Cash on
hand was approximately $207 million as of the first quarter
2002, and Aquila has about $570 million of available capacity
under its bank lines. Aquila's credit facilities consist of a
364-day $325 million tranche that expires in April 2003, and a
three-year $325 million tranche that expires in April 2005.
Aquila recently completed a $280 million equity issuance and a
$500 million senior unsecured note offering, the proceeds of
which were used to refinance $675 million of 2002 maturing debt.
Other near-term uses of funds include the $150 million repayment
of a bridge loan related to the acquisition of Midlands, due in
December 2002, and $63 million of common stock dividends, to be
paid in September and December 2002.

Fitch will continue to monitor Aquila's progress in winding down
its energy market exposures, reducing staff and operating
expenses, and monetizing non-core assets. Aquila's future credit
profile will depend upon which ILA assets or businesses are
sold, which are retained, and the amount of debt leverage
remaining after the dispositions.

Fitch currently rates Aquila as follows: senior unsecured
'BBB-', preferred stock 'BB+', and commercial paper 'F3'. The
Rating Outlook is Stable.


AT&T CANADA: Reports Closing of Deposit Receipt Transaction
-----------------------------------------------------------
AT&T Canada Inc., (TSX: TEL.B and NASDAQ: ATTC) reported that
AT&T Corp., together with Brascan Financial Corporation and CIBC
Capital Partners, completed the previously announced purchase of
all outstanding shares of AT&T Canada, that AT&T Corp., does not
already own, for CDN$51.21 per share, in cash, pursuant to the
terms of the deposit receipt agreement entered into at the time
of the creation of AT&T Canada Inc., in June 1999.

As previously indicated, AT&T Canada will use approximately
CDN$200 million of the approximately CDN$240 million in proceeds
it has received from the exercise of employee stock options
prior to the completion of the deposit receipt transaction to
repay its bank credit facility in full. When the balance is
added to the company's cash reserves following the repayment of
the bank facility, the company's cash reserves will be in excess
of CDN$400 million.

John McLennan, AT&T Canada's Vice Chairman and CEO, said, "With
the back-end transaction now complete, AT&T Corp.'s obligation
to our deposit receipt holders has been honored, and AT&T Canada
is in a position to repay our outstanding bank credit facility
in full. This moves us closer to establishing a capital
structure that can support the continued growth of our business.
The closing of the back-end has no impact on our commitment to
customers or on our operations. Our next priority is to achieve
a consensual restructuring of our public debt. On that front,
discussions with our bondholders and AT&T Corp., are progressing
well, and we remain confident that we will achieve this goal by
year end or sooner."

With the back-end transaction now closed, and reflecting AT&T
Corp.'s previously announced arrangement with Brascan and CIBC,
AT&T Corp. still holds a 31 percent economic interest and 23
percent voting interest in AT&T Canada. Tricap Investments
Corporation, a wholly owned subsidiary of Brascan Financial
Corporation, now holds a 63 percent equity interest and a 50
percent voting interest and CIBC Capital Partners holds a six
percent equity interest and a 27 percent voting interest.

As a privately-held company, AT&T Canada has notified the
Toronto Stock Exchange and NASDAQ of its intention to de-list
its shares from those exchanges. Nonetheless, in recognition of
its public debt still outstanding, AT&T Canada will continue to
be subject to all of the disclosure and filing requirements of a
public company.

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. Visit AT&T Canada's Web site,
http://www.attcanada.comfor more information about the company.


AT&T CANADA: Brascan Financial Purchases 50% of Equity Stake
------------------------------------------------------------
Brascan Financial Corporation (NYSE:BNN) (TSX:BNN.A.TO)
announced that a subsidiary of Brascan Financial's wholly-owned
subsidiary, Tricap Investments Corporation, completed the
purchase of 154,532 Class A Voting Shares and 97,106,699 Class B
Non-Voting Shares of AT&T Canada Inc.

This purchase represents approximately a 63% percent equity
interest and a 50% voting interest in AT&T Canada and fulfills
the requirements of a 1999 AT&T Corporation merger agreement
with AT&T Canada shareholders. As previously announced, AT&T
agreed to pay the purchase price for the AT&T Canada shares on
behalf of Tricap's subsidiary.

Brascan Financial Corporation is a financial services company
that provides asset management and merchant banking services.
Brascan Financial also manages the Tricap Restructuring Fund.
Backed by distinguished participants, which include Canada
Pension Plan Investment Board, Toronto Dominion Bank and GE
Capital Corporation, the Tricap Restructuring Fund is the first
of its kind in Canada to focus on restructuring opportunities.
Brascan Financial also provides select business services to its
clients that include governments, institutions and corporations.
Brascan Financial is a wholly owned subsidiary of Brascan
Corporation (TSX, NYSE - BNN. A/BNN).


BUDGET GROUP: Wants More Time to Make Lease-Related Decisions
-------------------------------------------------------------
Budget Group Inc., and its debtor-affiliates are parties to over
740 unexpired non-residential real property leases.

Section 365(d)(4) of the Bankruptcy Code provides that a debtor,
as a lessee, must assume or reject unexpired leases within 60
days of the Petition Date or within the additional time as the
Court fixes.

Joseph A. Malfitano, Esq., at Young Conaway Stargatt & Taylor
LLP, in Wilmington, Delaware, relates that in enacting Section
365(d)(4), Congress recognized that in some cases, 60 days will
not be enough time for bankrupt lessees to decide whether to
assume or reject leases.  In those circumstances, upon adequate
demonstration of cause, bankruptcy courts may grant lessees
extensions of time in which to assume or reject.  In re American
Healthcare Management Inc., 900 F 2d 827, 830 (5th Cir 1990).

The United States Court of Appeals for the Second Circuit, in
South Street Seaport Ltd. Partnership v. Burger Boys Inc. (In re
Burger Boys Inc.), 94 F 3d 755 (2d Cir 1996), held that these
factors, among others, would establish whether "cause" existed
to extend the Section 365(d)(4) period:

(a) whether the leases are an important asset of the estate such
    that the decision to assume or reject would be central to
    any plan of reorganization;

(b) whether the case is complex and involves large numbers of
    leases;

(c) whether the debtor has had insufficient time to
    intelligently appraise each lease's value to a plan of
    reorganization; or

(d) whether the lessor will be prejudiced by the Debtors'
    continued occupation of the premises.

Mr. Malfitano points out that these Chapter 11 cases is
compounded by the overall size of the Debtors' business and by
the large number of unexpired leases to which the Debtors are
lessees.  There are 49 individual debtor entities while there
are over 740 unexpired leases to which the Debtors are a party.

"Because the Debtors have been primarily focused on consummating
the sale of substantially all of their assets pursuant to the
Sales Procedures Motion to Cherokee or such other successful
bidder, the Debtors have not had adequate time to fully evaluate
the Unexpired Leases and determine whether the Unexpired Leases
have value," Mr. Malfitano explains.  The Debtors are currently
in the process of reviewing their vast array of Unexpired Leases
to determine which are beneficial.  The transaction contemplated
in the Sales Procedures Motion will also address the Debtors'
treatment of substantially all of the Unexpired Leases.

Thus, the Debtors ask the Court to extend to their lease
decision period until December 30, 2002.

If the Debtors were compelled to decide whether to assume or
reject the Unexpired Leases at this time, Mr. Malfitano says,
the Debtors would be faced with a choice of either rejecting the
unexpired leases, thereby losing potentially necessary and
profitable lease locations or assuming the unexpired leases and
the long-term liabilities associated with the leases, even
though the particular lease may not be marketable or necessary
for the Debtors' long-term operations.  Similarly, Mr. Malfitano
contends, it is premature to compel the Debtors to decide at
this point which Unexpired Leases to assume or reject because a
prospective buyer, who at this point is still undetermined given
the impending auction and sale process, will likely be involved
in determining which of the Unexpired Leases the Debtors may
eventually assume or reject.

Mr. Brady assures the Court that the lessors under the Unexpired
Leases will not suffer any harm as a result of the extension
because the Debtors are substantially complying with all of
their postpetition obligations under the Unexpired Leases in
accordance with Section 365(d)(3) of the Bankruptcy Code.

By application of Del.Bankr.LR  9006-2, the current deadline is
automatically extended through the conclusion of the October 28,
2002 hearing. (Budget Group Bankruptcy News, Issue No. 9;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


BURLINGTON: Pres. & COO Douglas J. McGregor Retiring by Year-End
----------------------------------------------------------------
Burlington Industries, Inc., (OTC Bulletin Board: BRLG)
announced a new management structure for apparel fabrics that
will further align with and accelerate the organization's global
focus and new business model.

"We have moved aggressively over the last two years to set a new
business direction and expanded capabilities for Burlington,"
said George W. Henderson, III, Chairman and CEO.  "The
organizational team we [announced Tues]day positions the company
for continued progress and future growth.  Through our
developing network of global resources, we are able to increase
our product reach and flexibility while minimizing our cost
structure, enabling us to become a more valuable partner to our
customers."

Henderson continued, ". . . Douglas J. McGregor, our President
and Chief Operating Officer, will be retiring December 31, 2002,
as planned.  In addition to his responsibilities as President
and COO, Doug has been directly overseeing operations for our
apparel fabrics group.  We would like to thank Doug for his
leadership and the key role he has played in the development and
execution of our new business strategy, and we wish him the best
in his retirement."

The company is announcing the following global management
structure for its apparel fabrics group.

Peter Liu, President of Burlington WorldWide, will expand his
responsibilities to include all global commercial activities for
apparel fabrics including sales, marketing and product
development.  Mr. Liu is based in Hong Kong and reports to
George Henderson, Chairman and CEO.  The following will report
to Mr. Liu:

     * Ken Kunberger has been named President Burlington
WorldWide - North America, responsible for the sales, product
management and marketing for apparel fabrics in North America.
The following product and sales senior managers will report to
Mr. Kunberger.

     * Jeff Peck, EVP and General Manager of Synthetic and Wool
       Products

     * Mike Moody, EVP and General Manager of Cotton Products

     * Tom Leonard, EVP Sales, Branded Apparel, Uniform and
       Barrier Markets

     * Lou D'Lando, EVP Sales, New Business Development, Retail
       and Activewear Markets

     * Rick Schneider, VP International Sales

     * Joel Futterman, EVP Product Development, will continue to
       direct all apparel fabric development worldwide.

     * George Edmunds, VP Operations - Burlington WorldWide, is
       based in Hong Kong and will continue to coordinate the
       division's international mill partners with respect to
       supply chain logistics and quality standards.

A search is underway to fill a new position, EVP North American
Operations, reporting to George Henderson.  This position will
directly manage the Burlington Apparel Fabrics plants and
operations to include functional responsibility for the
manufacturing operations in the company's Burlington House and
Lees Carpets divisions.

Jim Sells has been named VP Global Operations Support assuming a
new role to drive the corporation's global logistics plans and
support the growing process and systems requirements for
Burlington WorldWide.  Mr. Sells will report to Judith Altman,
Sr. Vice President - Chief Information Officer and Global
Operations Support.

"I am excited about the future of Burlington and the leadership
we have throughout the company," commented Henderson.  "Our
management team includes individuals who have been instrumental
in our many accomplishments as well as new members who will
bring additional skills and expertise to our organization.  As
we complete our reorganization, we will be a stronger company
whose capabilities are clearly in step with global trends."

With operations in the United States, Mexico and India and a
global manufacturing and product development network based in
Hong Kong, Burlington Industries is one of the world's most
diversified marketers and manufacturers of softgoods for apparel
and interior furnishings.


CHAMPION TECHNOLOGIES: Inks Pact to Sell Assets to Lynch Corp.
--------------------------------------------------------------
M-tron Industries, Inc., a unit of Lynch Corporation (Amex:
LGL), reached an agreement on October 7, 2002, to acquire the
assets of Champion Technologies, Inc., a competitor and
manufacturer of crystals and crystal oscillators, from US Bank.
The companies did not disclose financial details of the
agreement.

Bob Zylstra, president of M-tron, Yankton, S.D., said, "We
believe that we have an excellent opportunity to create value
for our customers by acquiring selected product lines,
technologies, or companies during the business downturn.  In
this case, we are adding advanced technology and innovative
product designs.  We also intend to hire key Champion engineers
and technical and sales employees. Consolidating Champion's
operations into M-tron's will provide a significant reduction in
operating expenses as a percentage of total sales."

"For all these reasons, the acquisition also creates value for
Lynch Corporation investors," said Richard E. McGrail,
president, Lynch Corporation.

"Our most important near-term goal is to ensure a smooth
transition for the former Champion customers, with as few
delivery delays as possible," said Dick Thompson, vice president
of sales and marketing of M-tron.  "The customers of Champion
have grown to expect a reliable supply chain, and we certainly
intend to keep that chain intact."

M-tron does not intend to operate the Champion factory in
Franklin Park, Ill. Lynch expects the creditors of Champion to
manage the final disposition of the factory and other Champion
obligations.

M-tron Industries, Inc., an ISO-9001 registered company, was
founded in 1965.  M-tron is a leading developer of high
frequency oscillators with products available in small, surface
mount packages at frequencies up to 800 MHz and higher.
Additional information can be obtained from Shellee Luchtel at
1-800-762-8800 or sluchtel@mtron.com, or M-tron's Web site,
http://www.mtron.com

Lynch Corporation is listed on the American Stock Exchange under
the symbol LGL. For more information on the company, contact
Richard E. McGrail, President, Lynch Corporation, 50 Kennedy
Plaza, Suite 1250 Providence, RI 02903-2360, (401) 453-2007,
richard.mcgrail@lynch-mail.com or visit the company's Web site:
http://www.lynchcorp.com


CHYPS CBO: Fitch Junks Ratings on Class A-2A & B Notes
------------------------------------------------------
Fitch Ratings downgraded two classes issued by CHYPS CBO 1997-1
Ltd., a collateralized bond obligation backed predominantly by
high yield bonds.

The following securities have been downgraded and removed from
Rating Watch Negative:

      -- $139,621,417 class A-2A notes, due 2010 to 'CCC' from
         'BBB';

      -- $20,217,752 class A-2B notes, due 2010 to 'CCC' from
         'BBB'.

The downgrades reflect continued deterioration in the credit
quality of the pool. As of its September 3, 2002 trustee report,
CHYPS CBO 1997-1 Ltd.'s portfolio contained $56.4 million
(24.9%) of defaulted assets with an additional $71.3 million
(31.5%) of assets rated 'CCC+' or below. The class A and class B
overcollateralization ratios were failing at 87.2% and 72.4%
respectfully, versus their respective triggers of 121% and 104%.

In reaching its rating actions, Fitch reviewed the results of
its cash flow model runs after running several different stress
scenarios. Also, Fitch had conversations with Delaware
Investment Advisors, the collateral manager, regarding the
portfolio.


CONSOLIDATED CONTAINER: S&P Places B- Corp. Credit on Watch Neg.
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its single-'B'-minus
corporate credit rating on Consolidated Container Company LLC
and its wholly owned subsidiary, Consolidated Container Capital
Inc., on CreditWatch with negative implications.

Atlanta, Georgia-based Consolidated is a domestic producer of
rigid plastic containers. Total outstanding debt at June 30,
2002, was about $573 million.

"The CreditWatch listing reflects heightened concerns regarding
the company's liquidity position (including tightening financial
covenants and increasing debt maturities) in light of its
ongoing operating challenges and more stringent credit
standards," said Standard & Poor's credit analyst Liley Mehta.

Since the third quarter of 2001, Consolidated has faced severe
operating challenges at its various plants, particularly in new
product introductions for key customers. In response, management
has been implementing several restructuring measures aimed at
reducing plant labor and repairs and maintenance costs,
containing product quality related issues, and establishing
unified information systems. Although management's ongoing
efforts towards an operational turnaround have led to some
improvement in operating margins in the second quarter of 2002,
lower-than-expected volume growth in key customer contracts and
increasing raw material prices (plastic resins) have pressured
the firm's financial performance.

Under the company's credit agreement, which was amended through
February 2003, $15 million of the revolving credit facilities
mature on January 5, 2003, and the company faces an interest
payment on its 10.125% senior subordinated notes on January 15,
2003. The credit facility and the senior subordinated notes have
cross-default provisions, and financial covenants under the
amended credit agreement tighten considerably in the third and
fourth quarter of 2002. Debt maturities increase significantly,
to about $48 million in 2003, and accelerate further in
subsequent years. Consequently, the company's ability to satisfy
ongoing debt service requirements is highly reliant on
successfully negotiating an amendment with its lenders.

Standard & Poor's will monitor the company's liquidity position
and developments related to management's negotiations with
lenders. If the company is unable to obtain an amendment to its
credit facility in a timely manner, or operating performance
weakens, the ratings could be lowered in the next few months.


CORVU CORP: Virchow Krause Expresses Going Concern Doubt
--------------------------------------------------------
CorVu Corporation is a holding company that develops and sells
business performance management software products and related
professional services through its subsidiaries: CorVu North
America, Inc. (incorporated in Minnesota, responsible for North
and South America); CorVu Plc. (incorporated in England,
responsible for the United Kingdom/Europe); CorVu Australasia
Pty. Ltd. (incorporated in Australia, responsible for the
Australian-Pacific region) and CorVu Software Marketing, Inc.;
CorVu Plc has incorporated one subsidiary, CorVu Benelux B.V.
under the laws of the Netherlands, and another subsidiary, CorVu
Deutschland GmbH, under the laws of Germany. CorVu Software
Marketing, Inc., has incorporated one subsidiary, CorVu
Software, Ltd., under the laws of the United Kingdom.

The Company was incorporated in Minnesota as J.B Goodhouse on
September 29, 1983. On April 28, 1988, it changed its name to
Lockermate Corporation, and on October 20, 1992, it changed its
name to Minnesota American, Inc. Following the merger of CorVu
Corporation, a privately held company, with and into the
Company on January 14, 2000, the Company continued to operate
the business of the privately held company and changed its name
to CorVu Corporation.

CorVu is a provider of Enterprise Performance Management
software products. Enterprise performance management is a
process by which an organization seeks to define its strategy,
measure and analyze its performance, and ultimately manage
improvements to enhance performance.

In recent years several methodologies have arisen for managing
organizational performance; each methodology represents an
approach to measuring an organization's performance against
strategic goals and specific performance targets. While the
Balanced Scorecard has emerged as the premier performance
management methodology, others are certainly valid. CorVu
customers use its products to implement one or more performance
management methodologies of their choice, finding it beneficial
to employ the Balanced Scorecard methodology, but also others,
including Management by Exception, Total Quality Management, Six
Sigma, ISO Certification, Malcolm Baldridge Award for Quality,
President's Award for Quality, and Value Based Management. To
Corvu's knowledge, none of the methodologies supported by CorVu
products are protected under intellectual property law.

CorVu total revenue increased by $190,743 (2%) from $12,151,063
for the year ended June 30, 2001 to $12,341,806 for the year
ended June 30, 2002 and the Company generated net income of
$449,531 for the year ended June 30, 2002 but had incurred a net
loss of $3,309,224 for the year ended June 30, 2001.

Total cash and cash equivalents increased by $201,767 from
$77,409 as of June 30, 2001 to $279,176 as of June 30, 2002.
Net cash provided by operating activities was $260,243 for the
year ended June 30, 2002. Net cash used in investing activities
was $62,603 for the year ended June 30, 2002 reflecting the
acquisition of capital assets. Net cash provided by financing
activities was $1,732 for the year ended June 30, 2002. Proceeds
from the sale of common stock accounted for $54,433. During the
year ended June 30, 2002, the Company repaid $188,123 of an
existing note payable. Additionally, the Company received
borrowings under a note payable with a stockholder of $179,200
and repaid amounts under notes in the amount of $43,778.

During the past year, the Company has made significant
reductions in amounts due to the Internal Revenue Service for
past due payroll taxes (reduced from $772,000 as of June 30,
2001 to $65,000 as of September 15, 2002), amounts due under a
Creditor Settlement Agreement (reduced from $976,000 as of June
30, 2001 to $650,000 as of September 15, 2002) and, has
completely retired a note payable (balance was $188,000 as of
June 30, 2001) that had been outstanding since February 1998.
Payments have been funded with current operating capital. Once
these obligations are retired in full, additional cash
flow will be available for other operating activities. In
addition, the balance of deferred revenue, which represents
unearned maintenance revenue, as of June 30, 2002 is 35% higher
than the same balance as of June 30, 2001. This reflects an
increasing base of maintenance customers under both existing and
new license contracts.

CorVu's management believes that current cash flow from
operations will be sufficient to meet cash requirements for the
next 12 months.

However, in the independent Auditors Report of Virchow, Krause &
Company, LLP, of Minneapolis, Minnesota, dated September 12,
2002, the firm stated: "[T]he Company has a working capital
deficiency and has a stockholders' deficit that raise
substantial doubt about its ability to continue as a going
concern."


COVANTA: Committee Attacks 9.25% Noteholders' Secured Position
--------------------------------------------------------------
The Official Committee of Unsecured Creditors, on behalf of
Covanta Energy Corporation and its debtor-affiliates, seeks to
determine whether, and to what extent the claims of the holders
of certain unsecured bonds issued by Ogden Corporation in 1992,
are secured under the terms of an Indenture dated March 1, 1992
and the terms and conditions of the debentures issued under that
Indenture.  The Committee's goal is to invalidate some of those
liens and transform some of the secured bond debt into general
unsecured claims.

Wells Fargo Bank Minnesota, National Association, is the
successor Trustee to The Bank of New York under the March 1,
1992 Indenture, which governs the rights of the holders of
debentures issued thereunder to a lien on the assets of the
Debtors.  The only debentures issued pursuant to the terms of
the Indenture were $100,000,000 in senior unsecured bonds issued
in 1992 and due in 2022, bearing interest at a rate of 9.25% per
annum.

Michael J. Canning, Esq., at Arnold & Porter, in New York,
relates that under the Final DIP Order, the Debtors and other
parties to the DIP Financing waived any right to challenge the
alleged secured status of the Bondholders' claims.  However, the
Final DIP Order reserves the right of the Committee to challenge
the alleged secured status of the Bondholders' claims and
recognized that the alleged Bondholder lien "could be determined
judicially or otherwise to be unperfected or avoided for any
reason."

In addition, Mr. Canning relates:

  -- The Bondholders are receiving adequate protection payments
     under Section 361, 363 and 364 of the Bankruptcy Code in
     the form of the payment of legal fees to counsel for the
     Bondholders.  The Bonds are listed on the Debtors'
     schedules as disputed and unliquidated, secured claims;

  -- When the Bonds were originally issued in 1992, they
     evidenced only senior unsecured debt obligations of the
     Company.  When the Bonds were issued, no assets of the
     Company or any of its subsidiaries were pledged to secure
     repayment of the Bonds;

  -- Although the Bonds are referred to as secured in the Final
     DIP Order and the Debtors' schedules files in these cases,
     the Debtors has never acknowledged a matured obligation to
     provide, or an entitlement of the Bondholders to, a lien
     to secure the Bonds;

  -- The Bondholders are relying on the Indenture to assert
     that their claim is secured by a lien;

  -- Prior to the negotiation of the Final DIP Order, the
     Debtors never received from the Trustee a demand, request
     or acknowledgment of any obligation of the Debtors or any
     of its subsidiaries to provide or an entitlement of the
     Bondholders to, a lien to secure the Bonds pursuant to the
     Indenture;

  -- None of the Debtors' audited financial statements or its
     filings with the Securities and Exchange Commission
     reflected their obligation to the Bondholders as secured
     by a lien on the assets of the Debtors.

     Section 9.8 of the Indenture governs the circumstances
     under which and, if relevant, the extent to which, the
     Bonds issued under the Indenture may become secured.

     Section 9.8(a) of the Indenture provides:

     If the Company or any of its Subsidiaries will incur,
     assume or, guarantee any indebtedness for borrowed money
     secured by a Lien on any Property or assets of the Company
     or any of its Subsidiaries, the Company will secure, or
     cause such Subsidiary to secure, the Securities equally and
     ratably with (or, at the option of the Company, prior to)
     such Secured Debt, unless after giving effect thereto the
     sum, without duplication, of:

        (i) the aggregate principal amount of all such Secured
            Debt,

       (ii) all Subsidiary Indebtedness incurred by Subsidiaries
            of the Company after the date of this Indenture, and

      (iii) all Attributable Debt in respect of Sale and
            Leaseback Transactions would not exceed 10% of the
            Consolidated Net Tangible Assets of the Company.

     Applicable Obligations mean the aggregate amount of
     obligations of the Debtors in the Section 9.8 of the
     Indenture;

  -- At no time have the Debtors ever provided a notice to the
     Trustee that they or their subsidiaries incurred, assumed
     or guaranteed Secured Debt at a time when Applicable
     Obligations exceeded 10% of the Consolidated Net Tangible
     Assets of the Company; and

  -- At no time has the Trustee ever provided a notice to the
     Debtors that they incurred, assumed or guaranteed Secured
     Debt at a time when Applicable Obligations exceeded the
     Lien Trigger Amount.

Mr. Canning explains that the terms of the Indenture exclude
from the calculation of Applicable Obligations many types of
indebtedness for borrowed money, which could be incurred by the
Debtors and its subsidiaries.  Among the many exclusions are:

(1) Project Debt -- debt obtained by a Subsidiary to construct a
    new facility, which debt is secured only by the facility to
    be constructed;

(2) Performance Obligations -- In the ordinary course of
    business, the Company or its Subsidiaries procured for the
    benefit of third parties, secured and unsecured letters of
    credit to assure the Company's or Subsidiary's performance
    pursuant to performance criteria applicable to completed
    projects, or to assure completion of certain projects under
    construction;

(3) Acquisition, Construction, Refurbishment or Improvements of
    Property -- In the ordinary course of business, the Company
    or its Subsidiaries borrowed money on a secured basis to
    purchase, refurbish or improve property of the Subsidiaries
    or Company; and

(4) Refinancing of Otherwise Excluded Debt -- Under the terms of
    the Indenture, the Company and its Subsidiaries were
    permitted to incur a significant amount and varied types of
    secured debt without triggering the need to grant a lien to
    secure the Bondholders.  By the terms of the Indenture, only
    very specific types of secured indebtedness of the Company
    and/or its Subsidiaries would be considered to trigger a
    determination whether Applicable Obligations exceeded the
    Lien Trigger Amount.

Likewise, Letters of Credit do not constitute secured debt or
subsidiary indebtedness.  Mr. Canning points out that letters of
credit were not payable to the Company or its Subsidiaries.
Rather, the letters of credit were direct obligations of third
party issuers to pay money directly to other third parties under
certain specified circumstances.  The immediate obligation of a
company to reimburse an issuer of letter of credit is an
indemnity obligation.  Thus, the letters of credit do not
constitute an event, which could cause the Debtors to be
obligated to provide a lien to secure the Bonds under the
Indenture.

The Committee contests the legality of the bondholders' liens
based on these facts:

1. Prior to March 14, 2001, the Applicable Obligations of the
   Debtors may not have exceeded the Lien Trigger Amount of
   $144,053,000;

2. The March 2001 Credit Agreement did not create a lien for the
   Bondholders as Letters of Credit are not a secured debt;

3. Since the Debtors executed the Credit Agreement, no draws on
   the letters of credit occurred within 90 days of the filing
   of these bankruptcy cases.  In February 2002, the
   beneficiaries drew two letters of credit amounting to
   $105,000,000, which triggered the Debtors to reimburse an
   indemnity obligation -- not a secured obligation for borrowed
   money;

4. The February 2002 draws were below the Lien Trigger Amount at
   the time of $144,225,000;

5. If a lien was granted to secure the Bondholders within the 90
   days of the Debtors' bankruptcy filing, it constitutes a
   preference claim;

6. The Debtors are not in default under the terms of the
   Indenture; and

7. Postpetition, the beneficiaries have drawn an additional
   $125,000,000 in letters of credit under the Credit Agreement
   but no lien can be granted due to the automatic stay
   provision of the Bankruptcy Code.

Accordingly, the Committee seeks declaratory relief that:

  (a) the Debtors did not incur obligations for borrowed money
      and letters of credit do not constitute incurring,
      assuming or guaranteeing an obligation for borrowed money;

  (b) the applicable obligations may never have exceeded the
      lien trigger amount;

  (c) any lien granted by the Debtors in February 2002, to
      secure the Debtors' pre-existing obligations to the
      bondholders must be set aside as a preference;

  (d) the automatic stay prevented the bondholders from
      receiving any lien after commencement of these cases;

  (e) the automatic stay renders any liens which arose
      postpetition to be null and void; and

  (f) adequate protection payments must be refunded since the
      Bondholders were never secured. (Covanta Bankruptcy News,
      Issue No. 14; Bankruptcy Creditors' Service, Inc.,
      609/392-0900)


CTC COMMUNICATIONS: Court Appoints BSI as Claims & Notice Agents
----------------------------------------------------------------
CTC Communications Group, Inc., and CTC Communications Corp.,
sought and obtained approval from the U.S. Bankruptcy Court for
the District of Delaware to appoint Bankruptcy Services LLC as
agent of the Bankruptcy Court.

The Debtors anticipate several thousand creditors will need to
be served with various notices, pleadings and other documents
filed in these cases.  The sheer size and magnitude of the
Debtors' creditor body makes it impracticable for the office of
Clerk of the United States Bankruptcy Court for the District of
Delaware to serve notice efficiently and effectively without
creating an administrative burden.

As Claims Agent, BSI will:

  a) relieve the Clerk's Office of all noticing under any
     applicable rule of bankruptcy procedure;

  b) file with the Clerk's Office a certificate of service,
     within 5 days after each service, which includes a copy of
     the notice, a list of persons to whom it was mailed, and
     the date mailed;

  c) maintain an up-to-date mailing list for all entities that
     have requested service of pleadings in this case, which
     list shall be available upon request of the Clerk's Office;

  d) comply with applicable state, municipal and local laws and
     rules, orders, regulations and requirements of Federal
     Government Department and Bureaus;

  e) relieve the Clerk's Office of all noticing under any
     applicable rule of bankruptcy procedure relating to the
     institution of a claims bar date and processing of claims;

  f) at any time, upon request, satisfy the Court that the
     Claims Agent has the capability to efficiently and
     effectively notice, docket and maintain proofs of claim;

  g) furnish a notice of the bar date approved by the Court for
     the filing of a proof of claim (including the coordination
     of publication, if necessary) and a form for filing a proof
     of claim to each creditor notified of the filing;

  h) maintain all proofs of claim filed;

  i) maintain an official claims register by docketing all
     proofs of claim on a register containing certain
     information;

  j) maintain the original proofs of claim in correct claim
     number order, in an environmentally secure area, and
     protect the integrity of these original documents from
     theft or alteration;

  k) transmit to the Clerk's Office an official copy of the
     claims register on a monthly basis, unless requested in
     writing by the Clerk's Office on a more or less frequent
     basis;

  l) maintain an up-to-date mailing list for all entities that
     have filed a proof of claim, which list shall be available
     upon request of a party in interest or the Clerk's Office;

  m) be open to the public for examination of the original
     proofs of claim without charge during regular business
     hours;

  n) record all transfers of claim and provide notice of the
     transfers as required by the Bankruptcy Rule 3001(e);

  o) record court orders concerning claims resolution;

  p) assist with voting and balloting, including printing and
     mailing of ballots;

  q) make all original documents available to the Clerk's Office
     on an expedited, immediate basis; and

  r) promptly comply with such further conditions and
     requirements as the Clerk's Office may prescribe.

BSI's professionals' hourly fees are:

          Kathy Gerber          $195 per hour
          Senior Consultants    $175 per hour
          Programmer            $125 - $150 per hour
          Associate             $125 per hour
          Data Entry/Clerical   $ 40 - $ 60 per hour

CTC Communications Group, Inc., a source provider of voice,
data, and Internet Communications services to medium and larger
sized business customers, filed for chapter 11 protection on
October 3, 2002. Pauline K. Morgan, Esq., at Young, Conaway,
Stargatt & Taylor represent the Debtors in their restructuring
efforts. When the Company filed for protection from its
creditors, it listed $306,857,985 in total assets and
$394,059,938 in total debts.


EMPRESA ELECTRICA: Confirmation Hearing Set for October 22, 2002
----------------------------------------------------------------
On September 17, 2002, Empresa Electrica Del Norte Grande, S.A.,
and together with its debtor-affiliates, filed their Proposed
Chapter 11 Plan of Reorganization together with an accompanying
Disclosure Statement with the U.S. Bankruptcy Court for the
Southern District of New York.

The Honorable Allan L. Gropper will convene a hearing to
consider confirmation of the Debtors' Plan of Reorganization on
October 22, 2002, immediately following consideration of the
adequacy of the Debtors' Disclosure Statement.

Objections to Confirmation of the Debtors' Plan, if any, must be
received by the Bankruptcy Court before 5:00 on October 15,
2002. Copies must also be served on:

      (i) Cleary Gottlieb Steen & Hamilton
          One Liberty Plaza
          New York, NY 10006
          Attn: Thomas J. Maloney, Esq.

     (ii) Milbank, Tweed, Hadley & McCloy, LLP
          One Chase Manhattan Plaza
          New York, NY 10005
          Attn: Risa M. Rosenberg, Esq.

    (iii) Hale and Dorr LLP
          60 State Street
          Boston, MA 02109
          Attn: Mark N. Polebaum, Esq.

     (iv) Office of the United States Trustee
          33 Whitehall Street, 21st Floor
          New York, NY 10004
          Attn: Pamela Lustrin

Empresa Electrica del Norte Grande SA is a partially integrated
electric utility engaged in the generation, transmission and
sale of electric power in northern Chile. The Company filed for
chapter 11 protection on September 17, 2002. Lindsee Paige
Granfield, Esq., Thomas J. Moloney, Esq., at Cleary, Gottlieb,
Steen & Hamilton represent the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its
creditors, it listed $612,861,000 in total assets and
$385,483,000 in total debts.


ENRON CORP: Sempra Asks Court to Hold Considar in Civil Contempt
----------------------------------------------------------------
Sempra Metals & Concentrates Corporation asks the Court to:

  (a) hold Considar Metal Marketing and Gregor Leinsdorf,
      Considar's counsel, in civil contempt of the Court's Order
      dated April 24, 2002;

  (b) award Sempra damages, interest, costs, expenses and
      attorneys' fees on this matter; and

  (c) prohibit Considar and Mr. Leinsdorf from encouraging
      further violations of the Order.

Stuart M. Riback, Esq., at Siller Wilk LLP, in New York, relates
that Considar was served with the Notice of Proposed Assumption
and Assignment of Executory Contracts and Unexpired Leases of
Nonresidential Real Property dated April 11, 2002, in accordance
with the Court's Sale Order Establishing Hearing with Respect to
Certain Contracts and Leases and Establishing Noticing
Procedures in Connection Therewith.  Although Considar confirmed
receipt of the Notice, they did not submit an objection in
writing, nor did they appear at the hearing.

Mr. Riback complains that Considar refuses to comply with the
Sale Order's injunction prohibiting assertion of claims against
Sempra.  In addition, Considar refuses to make the payments due
on the contract with Considar that Sempra acquired from the
Debtors.  Considar still has a $491,091 balance remaining due
under Contract 2945A, dated February 26, 2002.  Considar's sole
stated basis for withholding the payment is that it claims that
the Debtors allegedly owe them $1,597,456 and that it might be
entitled to a claim to setoff the amounts.

Mr. Riback argues that Considar's position is baseless because:

  -- the Contract where Considar claims it is owed money was not
     between Considar and the Debtors but with Enron Metals &
     Commodity Ltd., the Debtors' British affiliate whose
     company is based in London, for which the Debtors often
     acted as agent;

  -- granting credence to allow Considar to treat Enron Metals &
     Commodity Ltd.'s obligation as the Debtors', Considar
     terminated its Contract Number 003617 for nonpayment on
     December 3, 2001 after the Debtors filed for Chapter 11.
     Any setoff that Considar may claim to have accomplished
     based on Enron Metals & Commodity Ltd.'s nonpayment under
     the contract is in direct violation of the automatic stay;

  -- Considar has knowledge that the Contract Number 003617 was
     with Enron Metals & Commodity Ltd. based on claims Considar
     submitted to the Trustee overseeing the liquidation in the
     United Kingdom; and

  -- Considar is uniquely informed about Enron Metals &
     Commodity Ltd. and the Debtors' relationship since Mr.
     Leinsdorf's firm, Berkshire Advisers Inc., formerly
     was a consultant to Enron Metals $ Commodity Ltd.

In addition, Sempra President Philip J. Bacon swears that Mr.
Leinsdorf actually conceded that he was well aware that there is
no basis for the theory that the Debtors were the actual
principals in transactions conducted in behalf of Enron Metals &
Commodity Ltd.

"Mr. Leinsdorf conceded that he knew the sale had been effected
through court processes," Mr. Bacon relates.  However, Mr.
Leinsdorf stands by his belief that Sempra's business was just a
continuation of Enron Metal's business under another name, thus,
Sempra had a moral obligation to make good "Enron's" debts, even
if there was no legal obligation to do so.

Moreover, Mr. Leinsdorf made it clear to Mr. Bacon that if
Sempra did not submit to Considar's demands, he would ensure
that Sempra would be blackballed within the metals trading
industry generally and in particular with all of Considar's
affiliates within the Anglo-American Group of Companies, which
includes Hudson Bay Mining & Smelting Co., one of the largest
metals concerns in Canada.

Thus, Mr. Riback concludes that Mr. Leinsdorf has caused
Considar to assert setoff claims that are not only meritless but
also barred by the Sale Order.  Mr. Leinsdorf also solicited
other persons to disobey the Sale Order by asserting setoff
claims against Sempra.

Because of Considar and Mr. Leinsdorf's conduct, Mr. Riback
tells Judge Gonzalez, Sempra has been injured by:

  (a) Considar's non-payment of the contract amount of $491,019
      when due and the entitled interest charges at LIBOR rate
      plus 2%, which totals to $7,473 as of July 31, 2002; and

  (c) time, effort, expense and attorney's fees expended to
      compel Considar to comply with its obligations under the
      Sale Order.  Accordingly, Considar and Mr. Leinsdorf
      should be required to reimburse Sempra for these expenses.
      (Enron Bankruptcy News, Issue No. 44; Bankruptcy
      Creditors' Service, Inc., 609/392-0900)


ENRON: Study Says Fall of EnronOnline Affects Natural Gas Trade
---------------------------------------------------------------
A study of natural gas prices at ten U.S. trading hubs conducted
by Drs. Zhen Zhu and Donald Murry, economists at C. H. Guernsey
& Company, has shown a decline in informational efficiency since
the collapse of Enron and the closing of the EnronOnline
Internet-based trading platform.

Informational efficiency is a measure of a market's ability to
incorporate information into prices. In the gas markets, it also
is a measure of the ease with which arbitrage communicates price
changes among trading hubs and within the futures market.

Using two separate statistical techniques, the economists'
analysis concluded there was a decrease in the randomness of
prices, an increased separation between the spot and futures
prices and a diminished overall market efficiency associated
with the decline in informational efficiency.

Zhu presented the findings of the study at a meeting of the
International Association of Energy Economists in Vancouver,
British Columbia on Oct. 8, 2002. Zhu revealed that EnronOnline,
during its existence from November 1999 until November 2001,
served as a market shaper and a price leader, and during this
period, the measures of informational efficiency improved over
levels from prior periods.

"Because of its central role in the market, it is not surprising
that the closing of EnronOnline, which accompanied Enron's
bankruptcy, should impact the functioning of the natural gas
markets," Zhu said.

The economists also evaluated how price volatility changed from
the period prior to the entry of EnronOnline, during its
existence and since its demise. Although they determined the
collapse of Enron sharply increased price volatility, this
impact was short-lived. Their analysis showed the indices of
price volatility at the ten trading hubs and in the futures
market returned and remained at prior levels after approximately
two weeks.

More information about natural gas storage and its affects on
the nation's economy can be accessed at
http://www.chgeconomics.com

C. H. Guernsey & Company offers high-quality engineering,
architectural and consulting services to clients in the United
States and abroad. The firm has provided innovative solutions
for over 74 years. GUERNSEY has its headquarters in Oklahoma
City with offices in Amarillo, Texas; Atlanta; Dallas; Honolulu;
Tulsa, Okla.; Rock Island, Ill.; and Tallahassee, Fla.


EOTT ENERGY: Files for Prepackaged Chapter 11 Reorg. in Texas
-------------------------------------------------------------
EOTT Energy Partners, L.P., (NYSE: EOT) has commenced a
restructuring plan through a voluntary, pre-negotiated Chapter
11 filing. The voluntary petition has the full support of EOTT's
lenders, a majority of its bondholders and Enron.  The petition
was filed in the United States Bankruptcy Court for the Southern
District of Texas, Corpus Christi Division.  Under the plan,
EOTT will significantly reduce its debt, restructure its
finances, and formalize a complete legal separation from Enron.
EOTT anticipates the restructuring will be completed in early
2003.

As part of the plan, EOTT has received a commitment from its
lenders to provide debtor-in-possession financing totaling $575
million.  This financing represents an increase of approximately
$100 million over the company's current working capital
facility.  The $400 million working capital facilities
(including $325 million for letters of credit) have a six-month
term with commitments for an additional 18 months post
bankruptcy, subject to final covenant negotiations.  The $175
million repurchase/accounts receivable financing has a six-month
term with commitments for an additional six months post
bankruptcy.  Company officials said they believe this financing
should be sufficient for EOTT to work toward achieving the level
of business activities that existed before the Enron bankruptcy.

The company emphasized that the pre-negotiated Chapter 11 filing
is anticipated not to significantly impact day-to-day operations
or affect its customers or employees. First-day motions have
been filed with the Bankruptcy Court requesting that EOTT's
crude oil and feedstock suppliers, critical vendors, and
employee regular pay and benefits be protected, and paid in the
ordinary course of business for both pre-petition and post-
petition claims.

The Enron settlement agreement that is part of the plan provides
for a complete legal separation of EOTT from Enron upon
confirmation of the plan of reorganization and a $1.25 million
payment to Enron.  All of Enron's claims against EOTT, which
exceed $50.0 million, will be eliminated in exchange for a $6.2
million note to Enron.  Additionally, EOTT has agreed it will no
longer pursue claims against Enron Corp., or attempt to recover
any amounts payable to EOTT.

Enron's two members on the board of EOTT's general partner, EOTT
Energy Corp., recently resigned.  The company also disclosed
that, as part of continuing restructuring efforts, Lawrence
Clayton Jr., EOTT's Senior Vice President and Chief Financial
Officer, resigned.

The plan submitted by EOTT and subject to Bankruptcy Court
approval also includes the cancellation of EOTT's outstanding
$235 million of 11% senior unsecured notes in exchange for $100
million of 9% senior unsecured notes, plus the issuance of new
equity units to holders of the unsecured notes.  Upon
confirmation of the plan, EOTT's current publicly traded units
would be cancelled and current holders of these units would
receive up to 10% of the new equity units, consisting of 3% of
the newly issued units and warrants to purchase an additional 7%
of the company's new equity units.  The plan contemplates
conversion of EOTT from a Master Limited Partnership to a
Limited Liability Company structure.

"[Wednes]day's filing was made after a comprehensive and
thorough review of our options," Dana R. Gibbs, EOTT President,
said. "All of the parties involved agree that EOTT is a valuable
business which clearly should be preserved and permitted to
establish itself as an ongoing operation independent of its past
ties to Enron.  Our plan accomplishes all of these objectives."

For current information on the plan of reorganization, please
see updates at http://www.eott.com

EOTT Energy Partners, L.P., is a major independent marketer and
transporter of crude oil in North America.  EOTT also processes,
stores, and transports MTBE, natural gas and other natural gas
liquids products.  EOTT transports most of the lease crude oil
it purchases via pipeline that includes 8,000 miles of
intrastate and interstate pipeline and gathering systems and a
fleet of more than 230 owned or leased trucks.  The
partnership's common units are traded on the New York Stock
Exchange under the ticker symbol "EOT".

DebtTraders reports that Eott Energy Partners's 11% bonds due
2009 (EOT09USR1) are trading at 57 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=EOT09USR1for
real-time bond pricing.


EOTT ENERGY: Case Summary & 2 Largest Unsecured Creditors
---------------------------------------------------------
Lead Debtor: EOTT Energy Partners, L.P.
             2000 West Sam Houston Parkway South
             Suite 400
             Houston, TX 77042

Bankruptcy Case No.: 02-21730

Court: Southern District of Texas (Corpus Christi)

Debtor affiliates filing for separate chapter 11 petitions:

     Entity                                     Case No.
     ------                                     --------

     EOTT Energy Finance Corp.                  02-21731
     EOTT Energy General Partner LLC            02-21732
     EOTT Energy Operating Limited Partnership  02-21733
     EOTT Energy Canada Limited Partnership     02-21734
     EOTT Energy Pipeline Limited Partnership   02-21735
     EOTT Energy Liquids, L.P.                  02-21736


Type of Business: EOTT Energy Partners is a major independent
                  marketer and transporter of crude oil in North
                  America. EOTT also processes, stores and
                  transports MTBE, natural gas and other natural
                  gas liquids products. EOTT transports most of
                  the lease crude oil it purchases via pipeline
                  that includes 8,000 miles of intrastate
                  and interstate pipeline and gathering systems
                  and a fleet of more than 250 owned or leased
                  trucks

Chapter 11 Petition Date: October 8, 2002

Judge: Richard S. Schmidt

Debtors' Counsel: Robert D. Albergotti
                  Trey A. Monsour
                  Haynes and Boone
                  901 Main St.
                  Ste 3100
                  Dallas, TX 75202-9990
                  214-651-5613 / 214-651-5137
                  Fax : 214-200-0350 / 214-200-0532
                  Email: robert.albergotti@haynesboone.com
                  Email: monsourt@haynesboone.com

Total Assets: $316,431

Total Debts: $305,763,476

Debtor's Largest Unsecured Creditors:

Entity                        Nature of Claim     Claim Amount
------                        ---------------     ------------
The Bank of New York          11% Senior Notes    $247,925,000
101 Barclay Street
New York, NY 10286

Enron Corporation             Trade                $55,013,319


EOTT ENERGY: Receives Court Approval of First-Day Motions
---------------------------------------------------------
EOTT Energy Partners, L.P., (NYSE: EOT) announced that the U.S.
Bankruptcy Court for the Southern District of Texas in Corpus
Christi approved the company's first-day motions.

"We are very pleased that the Bankruptcy Court has approved our
first-day motions.  These approvals authorize us to protect our
producers and our crude oil and feedstock suppliers, as well as
our critical vendors and employees, and ensure that we will be
able to implement our restructuring plan in a timely manner,"
said EOTT President Dana R. Gibbs.  "With these issues resolved,
we can now move on to the business of restoring our customers'
confidence in EOTT, work toward achieving the level of business
activities that existed in the past and start our growth
strategies."

The company said reaction to Wednesday's news from EOTT's
customers, vendors and employees has been very positive.  As
announced earlier today and as reviewed with the court, the
company anticipates emerging from restructuring activities in
early 2003.

The Court's first-day orders authorize EOTT to, among other
things:

--  Continue to pay all crude oil and feedstock suppliers
for pre- and post-petition amounts due;

--  Continue to pay critical vendors in the ordinary
course of business, for pre- and post-petition amounts due;

--  Continue employee regular pay and benefits.

The judge's first-day orders will permit EOTT to conduct
business with minimal disruptions during the reorganization
process.  The approval follows EOTT's filing on October 8 for a
voluntary, pre-negotiated restructuring plan under which the
company will reduce its debt, restructure its finances and
formalize a complete legal separation from Enron.

The case has been assigned to the Honorable Richard Schmidt
under case number 02-21730 EOTT Energy Partners, L.P.

For current information on the plan of reorganization, please
see updates at http://www.eott.com

EOTT Energy Partners, L.P., is a major independent marketer and
transporter of crude oil in North America.  EOTT also processes,
stores, and transports MTBE, natural gas and other natural gas
liquids products.  EOTT transports most of the lease crude oil
it purchases via pipeline that includes 8,000 miles of
intrastate and interstate pipeline and gathering systems and a
fleet of more than 230 owned or leased trucks.  The
partnership's common units are traded on the New York Stock
Exchange under the ticker symbol "EOT".


FEDERAL-MOGUL: Hiring Secret Professionals to do Secret Work
------------------------------------------------------------
Federal-Mogul Corporation and its debtor-affiliates obtained the
Court's authority to file under seal an Application to employ a
professional pursuant to Section 327(e) of the Bankruptcy Code.
The identity of the professional sought to be retained and the
nature of the retention will remain confidential, until further
order of the Court.

As previously reported, James E. O'Neill, Esq., at Pachulski,
Stang, Ziehl, Young & Jones P.C., in Wilmington, Delaware,
explained that the proposed retention is of a highly sensitive
and confidential nature, and would be compromised by a public
disclosure.  Hence, the filing of the Application under seal is
warranted.

The Debtors presently anticipate that public disclosure of
matters relating to this professionals' services will be made
within six months.  While the Debtors request that the
Application and its supporting materials remain sealed pending
further order of the Court, the Debtors believe that these
documents will not need to remain under seal for a period in
excess of six months.

To allow for the compensation of the professional without
disclosing its services, the applications for allowance of fees
filed by that professional -- both interim and final -- will
also be filed under seal.  However, Mr. O'Neill says, the fee
applications will be subject to a review by the Court, the
Office of the United States Trustee, and the Court-appointed fee
auditor.  Each of these parties would be, in turn, directed to
maintain the confidentiality of those fee applications, pending
further order of the Court.  The Debtors anticipate that these
fee applications may need to be kept under seal and remain
confidential for the duration of the employment of this
professional. (Federal-Mogul Bankruptcy News, Issue No. 24;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


FORMICA CORP: SDNY Court Fixes October 15, 2002 Claims Bar Date
---------------------------------------------------------------
By Order of the U.S. Bankruptcy Court for the Southern District
of New York, October 15, 2002 is the deadline -- the Claims Bar
Date -- by which creditors of Formica Corporation and its
debtor-affiliates to file their proofs of claims against the
Debtors and their estates or be forever barred from asserting
their claims.

All proofs of claim must be received by the Formica Claims
Docketing Center before 5:00 p.m. Eastern Time on the Claims Bar
Date and addressed to:

      United States Bankruptcy Court
      Southern District of New York
      Formica Claims Docketing Center
      Bowling Green Station
      P.O. Box 5100
      New York, NY 10274-5100

Formica, together with its debtor and non-debtor-affiliates is a
preeminent worldwide manufacturer and marketer of decorative
surfacing materials. The company filed for chapter 11 protection
on March 5, 2002. Alan B. Miller, Esq. and Stephen Karotkin,
Esq. at Weil, Gotshal & Manges LLP represent the Debtors in
their restructuring efforts. As of September 30, 2001, the
Company reported a consolidated assets of $858.8 million and
liabilities of $816.5 million.


FOUNTAIN POWERBOAT: External Auditors Raise Going Concern Doubt
---------------------------------------------------------------
Fountain Powerboat Industries, Inc., through its wholly-owned
subsidiary, Fountain Powerboats, Inc., designs, manufactures,
and sells offshore sport boats, sport fishing boats and sport
cruisers intended for that segment of the recreational power
boat market where speed, performance, and quality are the main
criteria for purchase.   The Company also produces military
support craft for domestic and  international government
agencies, including the United States Customs Service, the
United States Navy and the United States Coast Guard.   The
Company's strategy in concentrating on these segments of the
market is to maximize its use of the reputation of its Chairman
and President, Reginald M. Fountain, Jr., as an internationally
recognized designer and builder of high speed power boats.

The Company's products are sold through a network of authorized
dealers worldwide.  The Company has targeted that segment of the
market in which purchase decisions are generally predicated to a
relatively greater degree on the product's image, style, speed,
performance, quality, and safety.

Fiscal 2002 presented the Company with an assortment of
difficult challenges.   Indicators early in the year led
management to expect a complicated sales scenario for the 2002
fiscal period.  Other challenges faced the Company in the form
of an aging dealer inventory and a sales mix that obliged the
Company to build a heavier percentage of fish boats than ever
before.

Fiscal year sales were down from Fiscal 2001 over 19%, from
$46,081,634 to $37,546,692 in Fiscal 2002.  The Company made the
decision to assist its dealers in retailing their aged
inventory, issuing over $2,000,000 in special discounts,
approximately 23% of the Fiscal 2002 decrease.

Dealer inventory levels were monitored and managed with the
Company ending the year at a dealer inventory level that was the
lowest of the last six years, costing the Company during the
Fiscal 2002  year, but setting the stage for Fiscal 2003 new
product sales.

During the year, the Company completed the tooling and design of
their two newest models in the wide-beam line, the 34' wide-beam
fish boat and the 48' wide-beam cruiser.  These units were first
introduced into the market in February 2002 at the Miami
International Boat Show. These two lines  were well accepted by
the market.  Since their introduction in February 2002, sales of
these two models accounted for approximately 10% of 2002  annual
sales.  Sales from the new lines introduced in the  Miami 2001
Show sold strong during the year, with the 38' wide-beam fish
and the 38' wide-beam cruiser generating over 20% of the Fiscal
2002 total sales.

The sales mix was perhaps the biggest challenge.   While the new
larger fish boats show profitable  margins, the previously
existing fishboat models tended toward a very small profit for
the Company.  Ending the year with total mix at almost 40% fish
boats in an overall low volume fiscal year, the Company faced
significant difficulties operating with low gross margins from
their sales.

The Company completed refinancing its long-term debt in November
2001.  Total proceeds from the note were $10,000,000 which was
used to  payoff an existing note, to provide working capital,
and to complete the cruiser tooling projects.

For the coming year, Fiscal 2003, the Company has established a
management team from its top level, senior managers.   This team
has launched the year with a plan for significant improvement.
The plan requires strict administration of cost savings and
expense cuts, but a new sales strategy provides the essential
basis for the plan's success, hence a profitable and successful
Fiscal 2003.

Fiscal 2002 net loss for the Company was $7,031,593.  This
compares to a net loss of $899,526 for Fiscal 2001.  The
discounts issued to move aging dealer inventory, the low sales
volume and poor sales mix resulted in the Fiscal 2002 loss.

The Company's independent auditors, in their July 26, 2002
statement regarding the Company's financial condition had this
to say, in part: "[T]he Company, has current liabilities in
excess of current assets and has incurred recent losses.  These
factors raise substantial doubt about the ability of the Company
to continue as a going concern."


FRUIT OF THE LOOM: Resolves Dispute with Farley over Cyra Shares
----------------------------------------------------------------
Prior to the Petition Date, Fruit of the Loom established
investment entities, including FTL Investments, which conducted
investment activity.  Farley West Ventures, Farley Industries,
Union Underwear Pension Plan, the Retirement Program of William
Farley and the Fruit of the Loom Senior Executive Officer
Deferred Compensation Plan were all investors.  All the FWV
Investors, with the exception of Farley Industries and the Union
Pension Plan, purchased shares in Cyra Technologies.  FWV was
the registered shareholder of the Cyra shares.

Cyra and Leica Geosystems AG proposed a corporate transaction
that required the consent of Cyra shareholders and also required
that FWV tender its shares to Leica.

In connection with the request to tender the Cyra shares, FTL
Investments, the Escrow Agent and William Farley entered into an
escrow agreement that delineated rights and responsibilities
related to shares in a firm named Cyra, to be received by FWV
Investors.  Additionally, the Escrow Terms provided that the
proceeds payable to Mr. Farley were to be held in the Escrow
Account until the Court approved their release.  The Court
approved the Escrow Agreement on December 13, 2000.

Risa M. Rosenberg, Esq., at Milbank, Tweed, Hadley & McCloy,
reminds the Court that, during and after the Plan was proposed,
there was heated dispute between Fruit of the Loom and Mr.
Farley over the Cyra shares.  However, pursuant to the
Reorganization Plan and through a Stipulation, Mr. Farley's
interest in any remaining funds in the Escrow Account will be
released to the FOL Liquidation Trust.

In a Court-approved Stipulation, the parties agree that the
Escrow Agent will transfer to First American Title Insurance
Company, for ultimate delivery to the Trust, Mr. Farley's liquid
funds in the Escrow Account.  The Escrow Account will be closed
and Mr. Farley will be entitled to receive any further
distribution of cash or stock relating to his Cyra shares.

Robert C. Johnson, Esq., at Sonnenschein, Nath & Rosenthal,
represented Mr. Farley in this agreement. (Fruit of the Loom
Bankruptcy News, Issue No. 60; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


GADZOOX: Gets OK to Reject Lease Pact and Relocate Headquarters
---------------------------------------------------------------
Gadzoox Networks, Inc. (OTC Bulletin Board: ZOOX), a global
supplier of innovative Storage Area Network products, provided
updates on the company's actions towards approved financial
reorganization of the Company and completion of milestones in
the reorganization process.

Just four weeks after filing for debt restructuring, the Company
received approval from the court for a number of motions.  The
motions approved include:  continued payment of salaries and
benefits for employees, the relocation of the company's
headquarters, the termination of the previous lease agreement
and sale of excess inventory, equipment and furniture.
Additionally the Company presented to the court the first phase
of its business plan for moving the Company forward.

"Our growing success with our new FabriCore Engines(TM) product
line, incorporating the solid Fibre Channel technology Gadzoox
Networks was built on, has enabled us to effectively present a
fiscally strong company with exceptional potential for growth,"
said Steve Dalton, President and CEO of Gadzoox Networks.  "We
have set a fast pace for ourselves in order to quickly
reorganize and move this Company to the next phase.  The
relocation of our headquarters is a significant step that
favorably impacts our bottom line enabling us to reduce expenses
and conserve cash reserves."

     Recognizing Results of Financial Reorganization Efforts

The termination of the previous lease agreement, combined with
the relocation of the Company's headquarters, reduces the
Company's operating expenses by approximately $2.7 million
annually.  The Company's headquarters are now located at 2902
Stender Way in Santa Clara, California, in the "center of
Silicon Valley".

"Over the past few weeks our customers and suppliers have
continued to demonstrate support for the Company.  We have
doubled our customer engagements for FabriCore Engines,
validating the demand for our field-proven Fibre Channel
technology," stated Dalton.  "Our relationships with our key
suppliers and strategic partners remain strong as we reorganize
to position the Company for success."

Since 1996 Gadzoox Networks has led the industry in market
"firsts" and continues to drive the Storage Area Network (SAN)
edge market with innovative Fibre Channel switching technology.
The company has consistently delivered a time to market
advantage to major OEM customers enabling them to create clear
business value for their customer base.  Gadzoox Networks is a
voting member of the Storage Networking Industry Association
(SNIA), with corporate headquarters located in San Jose,
California.  For more information about Gadzoox Networks'
products and technology advancements in the SAN industry, visit
the company's Web site at http://www.gadzoox.com


GEMSTAR-TV GUIDE: Names Jeff Shell as New Chief Exec. Officer
-------------------------------------------------------------
Gemstar-TV Guide International, Inc., (NASDAQ:GMSTE) announced
that its Board of Directors has reached an agreement in
principle with Dr. Henry Yuen and Elsie Leung, subject to
completion of definitive documentation. Under the terms of the
agreement reviewed by a Special Committee of the Gemstar Board
of Directors, Dr. Yuen will resign as Chief Executive Officer of
the Company.  Dr. Yuen will continue as Chairman of the Board in
a non-executive capacity and, under a new five-year employment
agreement, will lead a business unit formed to pursue
international business development opportunities. In that role,
Dr. Yuen will also strive to enhance and improve the Company's
interactive program guides and interactive technologies. As part
of the agreement, Dr. Yuen has agreed to assign to Gemstar all
intellectual property relating to the Company's business that he
has developed and develops in the future in his new role. In
addition, he has granted Gemstar the right of first refusal to
certain future inventions related to interactive television and
interactive programming guides for a period of time.

The Company also announced that Jeff Shell will be named Chief
Executive Officer succeeding Dr. Yuen. Additionally, the Company
announced the pending appointment of Paul Haggerty as acting
Chief Financial Officer.  Mr. Haggerty, currently Executive Vice
President for Finance at News Corporation, which owns
approximately 42 percent of the outstanding stock of Gemstar,
will succeed Elsie Leung.  Ms. Leung will remain as a member of
the Board and, under a new three-year agreement, will work with
Dr. Yuen to pursue international opportunities for the Company.
The Company said it will be conducting a search for a permanent
Chief Financial Officer.

The Company said that Dr. Yuen would receive approximately $22
million and Ms. Leung approximately $7 million as termination
payments under their existing contracts. In addition, Dr. Yuen
and Ms. Leung would exchange approximately 20 million
outstanding options for approximately 8 million shares of
restricted stock and approximately 9 million new stock options
in connection with their termination, employment and other
future agreements.

As previously disclosed by the Company, the Company and the SEC
have been in discussions regarding the Company's recently-
completed internal accounting review. During the course of these
discussions, the Company has informed the SEC of the
developments related to this management restructuring. Pursuant
to the recently-enacted Sarbanes-Oxley Act, it is possible that
certain of the payments to Dr. Yuen and Ms. Leung may be
escrowed.

Commenting on Tuesday's announcements, Dr. Yuen said: "My vision
of creating a multi-media company focusing on television
guidance to capture the exciting opportunities of interactive
television and digital convergence has been realized by the
formation of Gemstar-TV Guide International, Inc., which now
reaches more than 100 million television viewers on a daily
basis with its print, television, online and IPG properties. As
I mentioned earlier this year, the Company has embarked on a new
phase of growth which will focus on expanding its win-win
relationship with service providers in the U.S."

Dr. Yuen continued: "Having worked with Jeff Shell for the past
five months, I believe he will be an able successor, leading the
Company through this phase of its development. As for me, I feel
that my highest and best contribution to the Company at this
stage is in the area of technology innovation and business
development."

Rupert Murdoch, Chairman and Chief Executive of News
Corporation, said: "Gemstar is a company of enormous potential,
and it is our hope that today's announcement will foster growth
and stability for the Company and its shareholders. We became,
and remain, significant stakeholders in Gemstar because we
believe deeply in the value of Gemstar's technology and assets
and their vital role in the emerging digital world. Our
challenge now is to convert that potential into reality and an
important step in that direction is the appointment of Jeff
Shell as CEO. His operational skills, industry relationships and
leadership make Jeff the ideal executive to guide Gemstar at
this crucial stage."

Mr. Murdoch continued: "I am pleased that Henry Yuen will
continue to contribute his technological vision and innovative
genius, so essential to the Company's creation and development,
well into the future. I am also delighted that we were able to
structure a relationship through which Gemstar will continue to
benefit from Dr. Yuen's vision for years to come."

Mr. Shell said: "I'm thrilled with the opportunity to lead
Gemstar at this important stage in its development. The TV Guide
brand, our products and technology, and our financial position
give us a rock-solid foundation. Our job now is to focus on
productive, growth-oriented initiatives that capitalize on the
Company's powerful assets. To this end, I am extremely grateful
to the Board of Gemstar for the confidence they have
demonstrated in me, and I look forward to meeting the many
challenges they have laid out for this great company as we chart
a new course together."

                         *    *    *

As reported in Troubled Company Reporter's Sept. 9, 2002
edition, Standard & Poor's lowered its corporate credit
and bank loan ratings on Gemstar-TV Guide International Inc., to
double-'B' from double-'B'-plus.

Standard & Poor's said that all of the ratings remain on
CreditWatch with negative implications, where they were placed
on August 15, 2002. Gemstar is headquartered in Pasadena,
California and had $302.7 million in debt outstanding on March
31, 2002.


GENEVA STEEL: Seeks Approval to Hire Prebon Energy as Appraiser
---------------------------------------------------------------
Geneva Steel LLC asks for permission from the U.S. Bankruptcy
Court for the District of Utah to employ Ryan D. Davies and his
new employer, Prebon Energy Inc., as an emissions reduction
creditors appraiser, effective May 15, 2002.

The Debtors remind the Court that it previously approved the
employment of Mr. Davies as an appraiser while he was working
for the company O2 Blue, Inc.  The Debtors relate that O2 Blue
was dissolved in May 2002 and Mr. Davies is now employed by
Prebon Energy, thus necessitating the employment of Prebon
Energy as the Debtors' new emission reduction credits appraiser.

Given that Mr. Davies is familiar with the Debtors' emission
credits, having assisted in O2 Blue's preparation of an
appraisal of such credits, the Debtors now requests authority to
employ Prebon Energy to take the place of O2 Blue as the
Debtor's emissions reduction credit appraiser.

Prebon Energy is a full service Emissions Reduction Credit,
Allowance, ATU, DERC and environmental credit brokerage company.
Prebon is engaged in the national brokerage of ERCs. A Senior
Broker for Prebon has been intimately involved in the Utah ERC
market since its inception.

Prebon Energy will charge the Debtor:

     a) $250 per hour for direct testimony provided through
        deposition or a trial,

     b) $150 per hour for any other services, including
        appraisal services to prepare for direct testimony, and

     c) actual expenses incurred in connection with any of the
        foregoing services.

Geneva Steel owns and operates an integrated steel mill located
near Provo, Utah. The Company filed for chapter 11 protection on
January 25, 2002. Andrew A. Kress, Esq., Keith R. Murphy, Esq.,
and Stephen E. Garcia, Esq., at Kaye Scholer LLP represent the
Debtor in its restructuring efforts. When the Company filed for
protection from its creditors, it listed $264,440,000 in total
assets and $192,875,000 in total debts.


GLOBAL CROSSING: Mr. Pascazi Whines About Exclusivity Again
-----------------------------------------------------------
Michael S. Pascazi, an equity security holder in Global Crossing
(OTCBB:GBLXQ), filed a renewed objection to the Company's motion
for another extension of the time period in which management has
exclusive right to file a chapter 11 plan.

Mr. Pascazi, also President of Fiber Optek Interconnect Corp.,
filed a similar objection when the Global Crossing made its
first request.  Judge Gerber patiently listened to Mr. Pascazi's
comments in early June and rejected them.  Global Crossing's
case is complex and that alone is cause under Sec. 1121 to
extend the Debtors' exclusive period, Judge Gerber ruled at that
time.

The Court already has granted an extension to October 21, 2002,
Mr. Pascazi says, "but now the company's motion to the Court
requests an additional extension of the exclusivity period to
protect the debtors if they are compelled to withdraw the Plan,
or the Court does not approve the Plan." The motion points out
that the Plan they have filed contains "closing conditions"
which may not be satisfied.

"Clearly," Mr. Pascazi asserts, "Global Crossing is aware of the
possibility that the Plan it has filed will not be confirmed.
Yet its proposed motion would effectively preclude any other
party from filing an alternate Plan until the Court acts on
management's Plan, whenever that may be."

"Management has had plenty of time to formulate and submit their
best Plan," he added, "and I see no reason why others should be
barred for an indefinite period from proposing competing Plans
for the Court's consideration."

A hearing on the company's motion for extension of exclusivity
will be held October 21, 2002, at 9:45 a.m. at the Bankruptcy
Courthouse, 1 Bowling Green in New York City, the Honorable
Robert E. Gerber presiding.

Mr. Pascazi concludes, "I hope all stockholders, creditors and
others who want to see competing Plans given a chance will
attend the hearing and voice their sentiments."

To read Mr. Pascazi's objection, go to http://www.gblxplan.com


GOLFSMITH: S&P Assigns B Corp. Credit & Sr. Secured Notes Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its single-'B'
corporate credit rating to Golfsmith International Inc., and its
single-'B' rating to the company's proposed $75 million senior
secured notes due 2009 to be issued under rule 144a with
registration rights. Concurrently with the closing of this
offering, the company is being acquired by Atlantic Equity
Partners III L.P., in a merger transaction. The net proceeds
from this offering will be used to pay a portion of the cash
merger consideration to existing stockholders under the merger
agreement.

The outlook is stable. Austin, Texas-based Golfsmith, a
multichannel retailer of golf and golf-related products, will
have $75 million of funded debt outstanding upon completion of
the proposed transaction.

"Golfsmith enjoys a good market position in the $6 billion golf
equipment industry. The company holds a 12.6% share of the
specialty off-course golf equipment sector and a 4% share of the
total golf equipment industry," Standard & Poor's credit analyst
Diane Shand said. "The industry is expected to continue to grow
at the historical pace of 1% to 2% per year due to favorable
demographic trends. The largest group of golfers (30- to 44-
year-old age group) is just beginning to enter the 45- to 64-
year-old age group, the peak spending age on golf equipment.
Golfsmith is the only golf company with multichannel
distribution capabilities--superstores, accessory and components
catalogs, and the Internet."

The ratings on Golfsmith reflect the company's relatively small
size, its lack of business diversification, and high leverage.
These risks are somewhat mitigated by the company's good market
position in the golf equipment industry

Ratings stability reflects the expectation that Golfsmith will
maintain its good market position and that the company's overall
financial profile will gradually improve.


HI-RISE RECYCLING: Donco Acquires Solid Waste Equipment Division
----------------------------------------------------------------
Hi-Rise Recycling Companies (Donco Holding Company) announced
its purchase of the Solid Waste Equipment Division from Hi-Rise
Recycling Systems, Inc.  Hi-Rise Recycling Systems filed for
Chapter 11 status in February 2002 in order to implement a pre-
negotiated restructuring plan. As part of the restructuring
plan, the Solid Waste Equipment Division was sold for $35
million in cash plus the assumption of specified company assets,
liabilities and contracts to Donco Holding Company, a private
investment firm. GE Capital, one of the world's leading lenders
is providing the new company with its operating capital.  Now
under the leadership of Dennis B. Donahue, former President and
CEO of Will-Burt, Inc., the newly formed Hi-Rise Recycling
Companies, Inc., will focus on customer service, quality and
competitive prices.

Donahue, an industrial manufacturing veteran with over 35 years
of experience -- including executive positions at Control Data,
AM Datacard, Atari and United Technologies is most recently
credited with turning around operations at Will-Burt, Inc.,
where he still serves as Chairman.  Selected to run Hi-Rise
Recycling because of his proven expertise in operations and
manufacturing, Donahue has already moved the company
headquarters from Florida to Ohio and eliminated inefficiencies
in distribution, leasing and product operations.

The Hi-Rise family of companies now includes Hesco Sales, Bes-
Pac, DeVivo Industries and American Gooseneck.  These regionally
based companies give Hi- Rise a national presence with a local
touch.  "Hi-Rise will continue to leverage its strong reputation
as an industry leader," says Mr. Donahue.  "Our reputation will
be enhanced by focusing on the timely delivery of quality
products and solutions to our customers."  In addition to
enhancing service to existing customers such as Waste Management
Inc, Browning-Ferris Industries, Inc., Casella Waste Systems,
Inc., and Republic Services, Inc., Hi-Rise will expand its
product development efforts and extend coverage of its services
to under served markets.

"Hi-Rise recycling/DeVivo has always provided Casella high
quality, cost effective products and supplement them with
dedicated customer service and marketing support," says Gary
Simmons, VP Fleet Management of Casella Waste Systems, Inc.  "We
look forward to Hi-Rise Recycling/DeVivo Industries continuing
as one of the  primary suppliers to Casella Waste Systems, Inc.
for all sizes of Roll-Off, Front-Load, and Rear-Load Containers
as well as compaction equipment."

Hi-Rise Recycling manufactures, distributes, markets and sells a
diversified line of products and systems used in the collection,
recycling and transportation of solid, liquid and low-risk
hazardous waste materials.


INVENTRONICS: Obtains Forbearance Period after Defaults on Loan
---------------------------------------------------------------
Inventronics Limited (TSX:IVT), a designer and manufacturer of
custom enclosures for the communications, electronics and other
industries, has reached an agreement with the Corporation's
banker in respect to certain defaults under its current credit
arrangements.

Inventronics has agreed to sell surplus equipment at its
manufacturing facility in Sherwood Park, Alberta, with the
proceeds to be used to satisfy the term loan principle payment
of $210,000, which was due September 30, 2002. The balance of
the proceeds will be applied to further reduce the amount owing
under its demand term loan facility. The equipment will be sold
in November for proceeds of more than $1,000,000.

The agreement provides a period of forbearance to allow for the
closing of the previously announced $3.5-million mezzanine debt
arrangement entered into by Inventronics with Mercantile Bancorp
Limited. It also contains a proposal for the Corporation's
banker to provide long-term and operating lending facilities,
which would fulfill one of the major conditions of the mezzanine
debt financing.

"Earlier this year, we established a plan to resolve our
involvement with our British subsidiary, to consolidate our
Canadian manufacturing operations, and to refinance our balance
sheet," said Dan Stearne, President and CEO. "Since then, we
have sold Eurocraft Enclosures Limited in Dudley, England, and
initiated a consolidation of our remaining manufacturing
operations in Brandon, Manitoba, that will be concluded on time
at the end of October. The consolidation is expected to save
Inventronics at least $2 million of operating costs each year.

"The refinancing of our balance sheet is being addressed through
the financing arrangements we are currently negotiating. When
these projects are behind us, we will have aligned our costs
with current revenues such that we will soon return to
profitability and be able to focus all our efforts on profit and
sales growth."

Inventronics designs and manufactures custom metal enclosures
and related products for the telecommunications, electronics,
cable television, utilities, industrial OEM, computer server and
energy resources industries. Inventronics' common shares are
listed on the Toronto Stock Exchange under the symbol "IVT."
Visit www.inventronics.com for additional details.

View IVT's annual and quarterly reports at


http://www.inventronics.com/html/investor_relations/investor_relations_finan
cial_reports.htm


ISLE OF CAPRI: Closes Tunica Property Sale to Boyd Gaming Unit
--------------------------------------------------------------
Isle of Capri Casinos, Inc., (Nasdaq: ISLE) has completed the
sale of its Tunica, Miss. property to a subsidiary of Boyd
Gaming.

In an unrelated matter, the company's effort through a contract
to acquire The State Line and Silver Smith Casino Resorts in
Wendover, Nev., was unsuccessful due to the fact that a higher
bid was accepted by the Federal Bankruptcy Court in a hearing
held Monday in Reno.

Isle of Capri Casinos, Inc., owns and operates 14 riverboat,
dockside and land-based casinos at 13 locations, including
Biloxi, Vicksburg, Lula and Natchez, Mississippi; Bossier City
and Lake Charles (two riverboats), Louisiana; Black Hawk,
Colorado; Bettendorf, Davenport and Marquette, Iowa; Kansas City
and Boonville, Missouri; and Las Vegas, Nevada.  The company
also operates Pompano Park Harness Racing Track in Pompano
Beach, Florida.

                          *   *   *

As reported in the March 26, 2002 edition of Troubled Company
Reporter, Standard & Poor's assigned a single-B rating to Isle
of Capri's $200 million senior subordinated notes. S&P gave the
ratings to reflect the company's diverse portfolio of casino
assets, relatively steady operating performance, lower than
expected capital spending levels, and improving credit measures.
These factors are partly offset by competitive market
conditions, the company's aggressive growth strategy, and its
high debt levels.


ISOMET CORP: Bank of America Agrees to Forbear Until October 31
---------------------------------------------------------------
Isomet Corporation (Nasdaq: IOMT) is negotiating the terms of a
new working capital loan facility totaling $1,500,000.  Subject
to completion of required documentation, the Company estimates
that the facility will be in place on or around October 31,
2002.

The Company has also entered into a forbearance agreement with
Bank of America, NA that extends the repayment date of a
$700,000 loan with the Bank from September 30, 2002 to October
31, 2002.  The Company anticipates repaying this loan from the
proceeds of the new working capital facility referred to above.

In a separate but related issue, the Company is in the process
of discussing terms with Bank of America Leasing and Capital for
the continuance of an equipment leasing program entered into in
fiscal years 2000 and 2001. The subject leases have an aggregate
principal balance of approximately $975,000 as of October 4,
2002 and contain cross default provisions with the Company's
current loan with Bank of America, NA, which may allow Bank of
America Leasing and Capital to accelerate repayment of the
balance currently due on the leasing facility.  The ultimate
outcome of these discussions cannot be predicted at this time.


JDN REALTY: Fitch Keeps Watch on BB-Rated Senior Unsecured Notes
----------------------------------------------------------------
Fitch Ratings placed the 'BB' senior unsecured rating and 'B+'
preferred stock rating for JDN Realty Corporation on Rating
Watch Positive following the announcement that Developers
Diversified Realty has agreed to acquire JDN for approximately
$1.02 billion. The Rating Watch affects $235 million of
unsecured notes issued by JDN Realty Corporation, and $50
million of outstanding preferred stock.

The merger transaction is subject to shareholder approval, and
if approved would provide for an enhanced portfolio
diversification, along with improved financial flexibility and
healthier cost of capital. The properties within the JDN
portfolio may also benefit from a broader access to other
retailers through DDR's leasing efforts, and may modestly
improve JDN's 94% same-store occupancy level and pre-leasing
efforts related to its development pipeline.

A resolution on the ratings will require greater clarity on
bondholder protection features of the proposed transaction and
the intent of DDR's management in terms of its financial and
operating strategies. A ratings resolution will also reflect
Fitch's opinion on how the transaction impacts DDR's credit
profile, which is not explicitly rated by Fitch.

JDN Realty Corporation specializes in the development and asset
management of retail shopping centers anchored by value-oriented
retailers. JDN owns and operates 99 shopping center properties
containing approximately 11 million square feet of gross
leaseable area located within 19 states, as of June 2002. JDN's
debt to un-depreciated book capital is 50%, as of June 30, 2002,
and its interest and fixed charge coverage (including capital
expenditures and capitalized interest) are 2.1 times and 1.8x,
respectively. JDN has a total market capitalization of
approximately $1.1 billion.

DDR currently owns and manages 361 retail properties in 43
states totaling in excess of 62 million square feet. DDR's debt
to un-depreciated book capital is 46%, and its interest and
fixed charge coverage (including capital expenditures and
capitalized interest) are 3.4x and 2.5x, respectively, as of
June 30, 2002. DDR has a total market capitalization of
approximately $3.7 billion. After the acquisition DDR will be
one of the larger retail real estate investment trusts and own
or manage 442 shopping center properties in 44 states,
comprising 77 million square feet.


KELLSTROM INDUSTRIES: Del. Court Fixes Nov. 10 Claims Bar Date
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware directs
that all creditors of Kellstrom Industries, Inc., and its
debtor-affiliates, wanting to assert a claim against the estates
must file their proofs of claim by November 10, 2002, or be
forever barred from asserting the claim.

Proofs of Claim are not required on account of six kinds of
claims:

     a. those already properly filed a proof of claim with the
        Clerk of this Court;

     b. claims not listed as either "disputed," "contingent" or
        "unliquidated;"

     c. claims under sections 503(b) or 507(a) of the Bankruptcy
        Code as an administrative expense of the Debtors'
        Chapter 11 case;

     d. claims already been paid in full by the Debtors;

     e. claims previously allowed by Orders of this Court; and

     f. Claims for equity interests in the Debtors.

All proofs of claim must be filed and received no later than
4:00 p.m. Eastern Daylight Savings Time on the Bar Date by:

          Kellstrom Industries, Inc.
          c/o Robert L. Berger & Associates, LLC
          10351 Santa Monica Boulevard
          Suite 101A
          PMB 1024
          Los Angeles, CA 90025

Kellstrom Industries, Inc., a leader in the aviation inventory
management industry filed for chapter 11 protection on February
20, 2002. Domenic E. Pacitti, Esq., at Saul Ewing LLP represents
the Debtors in their restructuring efforts. When the Company
filed for protection from its creditors, it listed $371,249,106
in total assets and $402,400,477 in total debts.


KOLORFUSION: May Need to Seek New Financing to Fund Operations
--------------------------------------------------------------
Kolorfusion International, Inc., is a Colorado corporation,
formed on May 17, 1995, to develop and market a system for
transferring color patterns to metal, wood, glass and plastic
products. Kolorfusion is a process that allows the transfer of
colors and patterns into coated metal, wood, and glass and
directly into a plastic surface that is not flat; the colors do
not peel, and they are resistant to ultra violet rays.

The coloring and design of the products is designed to enhance
consumer appeal, create demand for mature products, achieve
product differentiation and customization and as a promotional
vehicle. The Company currently has customers such as Daisy - air
guns, Gerber - hand tools, Tru-Glo - bow sights, Allied Wheel
Company - steel wheel rims, Sunrise Medical - wheel chairs,
Master Lock - padlocks, and others. These applications and more
are anticipated as the Company is currently working with
manufacturers of chairs, archery equipment, kitchen appliances,
automobile wheels, ATVs, office furniture, plumbing fixtures,
sports products and various other products.

The process uses a transfer material (Kolortex(TM)) with special
inks that may be any color that the user desires. The end user
may use any color, or combination of colors, and any design or
logo desired that are printed on the Kolortex. The only
limitations are the imagination and desires of the customer.
The Kolortex is placed around the product. The product, wrapped
in the Kolortex, is then placed in a carrier (Kolorclam(TM))
that allows for a total vacuum. The Kolorclam is then placed in
a heating chamber which allows the inks to leave the Kolortex
and penetrate into the coated product. Plastic and aluminum may
be treated directly, steel, glass and other surfaces must first
be coated. Temperature heating ranges from 280 to 400 degrees
Fahrenheit, and the time of heating is dependent on the product
and its characteristics.

The process patents were granted to a French inventor, Mr.
Claveau, by the United States Patent Office on May 3, 1994, and
by the Canadian Patent Office on March 26, 1996. The exclusive
license for the US and Canada was first assigned to the
Company's founders, Steve Nagel and Michael Harrop in May, 1994,
and recorded by the US and Canadian Patent Offices. The
exclusive license was transferred to the Company, and then the
Company purchased the patents from the inventor under a Purchase
Agreement on October 17, 1995. The Company is presently
finalizing a new agreement with the inventor where the Company
will retire its existing debt due to the inventor, acquire the
patents for Japan, Brazil, Russia, and a first right to acquire
the European rights in exchange for 1,000,000 shares of the
Company, a one time payment of approximately $125,000, and a
five year consulting agreement for approximately $90,000 per
year. The United States and Canadian patents expire 20 years
from the date of application, which will be November 16, 2012.
Additional related patents have been developed by the Company
which expire in 2018.

The Company has registered its tradename and trademark design in
the United States, Canada and Brazil. Kolorfusion has
established a processing center at its place of business in
suburban Denver, Colorado, and it is actively using the process
to process products. The Company has dedicated 15,000 square
feet of its 18,000 square feet of space to production, with
three Koloclav processing units.

Management of the Company seeks to have the Company attain a
positive cash flow during fiscal year 2003. The achievement of
this goal will be determined by the rate of acceptance and the
implementation of the technology by its customers and licensees.

Current sales result from initial testing and sampling invoices,
limited production runs and license fees. The Company continued
to increase its quarterly sales for each quarter during the
fiscal year, and anticipates this trend to continue as it adds
more customers and licensees. The Company plans to enter into
processing contracts and additional licensing agreements to
achieve this continuous growth in sales.

Revenues increased in 2002 to $1,443,795 from $566,199 in 2001.
There were increased license and royalty fees and higher sales
in 2002 to account for the difference.  Costs of sales increased
in 2002 to $1,240,443 from $682,611 in 2001 as a result of
higher sales in 2002.  Selling, general and administrative
expenses increased in 2002, to $1,100,875 from $1,039,392 in
2001. The selling, general and administrative expense increased
because of higher sales. Interest expense was more in 2002,
$20,510, from $1,356 in 2001.

The result was that there was a net loss of $940,091 in 2002,
compared to a net loss of $1,131,771 in 2001.

There are no known trends, events or uncertainties that are
likely to have a material impact on the short or long term
liquidity, except perhaps declining sales. The primary source of
liquidity in the future will be increased sales. In the event
that sales should decline the Company may have to seek
additional funds through equity sales or debt. Additional equity
sales could have a dilutive effect. The debt financing, if any,
would most likely be convertible to common stock, which would
also have a dilutive effect. There are no material commitments
for capital expenditures. There are no known trends, events or
uncertainties reasonably expected to have a material impact on
the net sales or revenues or income from continuing operations.
There are no significant elements of income or loss that do not
arise from continuing operations. There are no seasonal aspects
to the business of Kolorfusion International, Inc.

However, Kolorfusion International, Inc., has historically had
more expenses than income in each year of its operations. The
accumulated deficit from inception to June 30, 2002 was
$10,700,210. It has been able to maintain a positive cash
position solely through financing activities. As a result of
this, and the fact that the Company's current liabilities exceed
its current assets, the independent auditor has issued a going
concern opinion.


LEGAL CLUB OF AMERICA: Pursuing Debt Restructuring Plan in 2003
---------------------------------------------------------------
Legal Club of America Corporation was formed in October 1998, as
a result of merging with and into Bird-Honomichl, Inc., a
publicly traded, inactive Colorado corporation. The Company has
three wholly owned operating subsidiaries, LegalClub.com, Inc.,
Einstein Computer Corp., and Legal Club Financial Corp., d/b/a
PeoplesChoice(TM). LCOA operates a national legal referral
service, ECC sells personal computer systems and accessories to
employees at their workplace and LCF is a licensed insurance
agency that will be providing voluntary benefit portfolios to
employer groups.

For the year ended June 30, 2002, the Company's operating loss
decreased $331,000, or 17%, compared with 2001, primarily as a
result of a $4,117,000, or 52.5%, reduction in its operating
expenses during the current fiscal year. The decline in the
Company's net loss of $782,000, or 37.2%, during fiscal 2002,
was attributable to non-recurring non-operating gains and income
recorded in the March and June quarters, as well as the
reduction in operating expenses.

Revenue decreased $3,786,000, or 64.3%, to $2,106,000 in fiscal
year 2002 compared with $5,892,000 in 2001. The reduction in
sales of personal computers by ECC contributed $2,526,000, or
66.7%, to the decline in revenue. LCOA revenue decreased
$1,260,00, or 38.0%, in fiscal year 2002 compared to the prior
year. This decrease was principally the result of lower direct
marketing revenues.

The Company's liquidity and capital resources were negatively
impacted in fiscal year 2002 as a result of the loss of direct
marketing revenue because of more stringent merchant services
regulations, and Gateway's ending of its relationship with ECC
for sales of personal computers through the worksites. The loss
of the Gateway relationship forced the Company to abandon its
payroll deduction program, and the Company has not been able to
obtain the same payment methodology with other vendors. On
August 7, 2002, the U.S. District Court denied Gateway's motion
to dismiss ECC's second amended complaint for damages in excess
of $200 million, brought against Gateway for breach of contract.
The action will now proceed against Gateway for breach of
contract. On September 19, 2002, Gateway and Gateway Companies,
Inc. filed an answer to the second amended complaint, a
counterclaim for damages, and a demand for jury trial. The
Company is in the process of preparing its response. To curtail
the loss of these liquidity sources, the Company has re-focused
its marketing efforts in increasing the penetration of its LCOA
products at the worksite and has started new initiatives to
expand its services at worksites by providing employer groups
with voluntary benefits portfolios.

Cash and cash equivalents, excluding restricted cash, was
$227,000 at June 30, 2002, compared with $39,000 at June 30,
2001.

The Company is at present meeting its current obligations from
its weekly cash flows. However, due to insufficient cash
generated from operations, the Company currently does not have
cash available to pay its previously incurred accounts payable
and other liabilities. Some of these previously incurred
obligations are being met on a week-to-week basis as cash
becomes available. There can be no assurances given that the
Company's present flow of cash will be sufficient to meet future
obligations; however, the Company is, from time to time, able to
raise additional capital from sales of its common stock, as it
did during the March and June 2002 quarters. There can be no
assurances given that the Company will be able to raise
additional capital. During the year, the Company also initiated
efforts to restructure its liabilities and was successful in
restructuring a payable and the commissions due on the Series B
preferred stock issuance. Additionally, the Company eliminated
from its balance sheet and future cash needs, accrued bonuses
for two former executives, pursuant to their resignations. The
Company plans to continue its endeavors to restructure its
balance sheet in fiscal year 2003. There can be no assurance
that the Company will continue to be successful in its efforts
to restructure its debt. As such, if the Company is unsuccessful
with its current revenue initiatives, cost savings strategies
and balance sheet restructuring, the Company's ability to meet
its future cash flows needs and its ability to continue as a
going concern would be in jeopardy.


LYONDELL CHEMICAL: Board Declares Regular Quarterly Dividend
------------------------------------------------------------
On Oct. 2, 2002, the Board of Directors of Lyondell Chemical
Company (NYSE: LYO) declared a regular quarterly dividend of
$0.225 per share of common stock to stockholders of record as of
the close of business on Nov. 25, 2002.

Lyondell has two series of common stock outstanding: Common
Stock and Series B Common Stock.  The regular quarterly dividend
on each share of outstanding Common Stock is payable in cash on
Dec. 16, 2002.  Lyondell has elected to pay the regular
quarterly dividend on each share of outstanding Series B Common
Stock in kind in the form of additional shares of Series B
Common Stock on Dec. 31, 2002.

Lyondell Chemical Company, -- http://www.lyondell.com--
headquartered in Houston, Texas, is the world's largest producer
of propylene oxide; the world's number three supplier of TDI
(toluene diisocyanate); a leading producer of propylene glycol;
a leading producer of other PO derivatives such as BDO
(butanediol) and PGE (propylene glycol ether); and a producer of
styrene monomer and MTBE as co-products of PO production.
Through its 70.5% interest in Equistar Chemicals, LP, Lyondell
also is one of the largest producers of ethylene, propylene and
polyethylene in North America and a leading producer of
polypropylene, ethylene oxide, ethylene glycol, high value-added
specialty polymers and polymeric powder.  Through its 58.75%
interest in LYONDELL-CITGO Refining LP, Lyondell is one of the
largest refiners in the United States, processing extra heavy
Venezuelan crude oil to produce gasoline, low sulfur diesel and
jet fuel.

                           *    *    *

As reported in Troubled Company Reporter's June 21, 2002,
edition, Standard & Poor's assigned its double-'B' rating to
Lyondell Chemical Co.'s proposed $275 million senior secured
notes due 2012 and affirmed its other ratings on the company,
including the double-'B' corporate credit rating. Proceeds of
the notes will be used to prepay $200 million of an existing
term loan. The balance of the net proceeds (approximately $50
million), together with approximately $100 million from a new
equity issue, will be retained on the balance sheet.

Houston, Texas-based Lyondell has about $3.9 billion of debt
outstanding. The outlook is stable.


MAGELLAN HEALTH: NYSE to Commence Process to Delist Shares
----------------------------------------------------------
Magellan Health Services, Inc., (NYSE:MGL) announced that its
shares of common stock will trade on the "Over-the-Counter
Bulletin Board" market. Further information on the Company's new
ticker symbol will be forthcoming. The Company reported that it
has been advised by the New York Stock Exchange that its stock
price and market capitalization do not meet the NYSE's minimum
criteria for continued listing. Accordingly, NYSE trading in the
Company's common stock will be suspended before the opening on
Wednesday, October 9, 2002, and NYSE has informed the Company
that it intends to commence procedures to remove the Company's
stock from the NYSE's trading list.

The Company reported that the NYSE's delisting action is not
expected to affect its current operations or financial position.

As previously reported, the Company's management is working
toward achieving an improved capital structure that will enhance
the long-term potential of Magellan's business, and the Company
has retained Gleacher Partners, LLC to assist it in this effort.
The Company's cash flow from operations is positive and the
Company remains current on all payments to its providers,
vendors, suppliers and lenders. Magellan believes it has the
financial resources to remain current on all operating
obligations and to continue investing in its business while it
works to reduce its debt, absent an acceleration of its debt
maturities. As the Company proceeds with its efforts to reduce
its debt and improve its capital structure, it intends to seek
appropriate covenant waivers from its bank lenders.

The OTCBB is a regulated quotation service that displays real-
time quotes, last sale prices and volume information in over-
the-counter securities. An OTC equity security is generally an
equity that is not listed on NASDAQ, the NYSE or any other
national securities exchange. The OTCBB provides access to over
3,600 securities and includes more than 330 participating market
makers. Quotations and trading information can still be accessed
via websites such as Yahoo and other quotation services or
through a securities broker. Information regarding the OTCBB can
be found at http://www.otcbb.com

Headquartered in Columbia, Md., Magellan Health Services, Inc.
(NYSE:MGL), is the country's leading behavioral managed care
organization, with approximately 68 million covered lives. Its
customers include health plans, government agencies, unions, and
corporations.


MAGELLAN HEALTH: S&P Junks Counterpart Credit Rating
----------------------------------------------------
Standard & Poor's Ratings Services removed from CreditWatch its
counterparty credit rating on Magellan Health Services Inc., and
lowered it to triple-'C' from single-'B'-minus because the
company has discontinued its plan to refinance its bank debt and
because its financial profile has not improved.

Standard & Poor's also said that the outlook on Magellan is
developing because of the company's uncertain future.

Magellan is the largest behavioral health managed care company
in the U.S., with a market share of about 30% of covered lives
nationally. Although it has been able to maintain this position,
the company has been struggling with lower earnings, constrained
cash flow, high expenses, and extremely high leverage, including
a very substantial negative tangible net worth. It had been
attempting to rearrange the bank-sourced part of its debt
financing.

On June 25, 2002, Standard & Poor's lowered the ratings on
Magellan by one notch and placed them on Credit Watch with
negative implications. On Aug. 19, 2002, Standard & Poor's
lowered these ratings by another notch and kept them on
CreditWatch. At that time, Standard & Poor's said that it would
review Magellan's overall business position again by Sept. 30,
2002, and if a satisfactory new financing package was negotiated
and the company maintained a profile indicative of the current
ratings, those ratings would be affirmed. If not, the ratings
would be lowered further.

On Sept. 30, 2002, Magellan had not (and, to date, has not)
negotiated or given evidence that it has the prospect of
negotiating such a package in the near future. Furthermore,
Standard & Poor's has seen no material improvement in the
company's financial profile, the salient characteristics of
which, in addition to those cited above, include a 6%-8% cost-
of-care increase and the need to improve expense control.
Magellan has repeated its warnings that it expects not to be in
compliance with one or more of the financial covenants in its
credit agreement with its bank lenders. As a result, the lenders
will have the right to accelerate the debt maturities of the
agreement, and such acceleration -- if it occurs -- would leave
the company without the liquidity on hand to support its
operations.

The developing outlook reflects Magellan's uncertain future. On
one hand, it has a continuing strong market position in
behavioral health managed care and the reasonable chance that it
could execute a satisfactory restructuring that would allow it
to unburden itself of some of its debt and provide funding to
put infrastructure in place to improve expense control. On the
other hand, there is a material chance that the company might
not conclude such an arrangement. In the latter case, the
company would urgently need to demonstrate to its creditors --
particularly its bank lenders -- that it is capable of improving
its margins and reducing its debt, probably with its existing
funding.


METRICOM: Court Fixes October 14 as Final Admin. Claims Bar Date
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of
California, San Jose Division, establishes October 14, 2002 as
the Final Administrative Claims Bar Date by which entities must
file requests for payment of administrative expenses entitled to
administrative priority treatment under Section 503 of the
Bankruptcy Code.  The Bar Date for creditors to file their
proofs of claims arising from the rejection of executory
contracts or unexpired leases is also set for the same date.

Proofs of Claims must be addressed to the Debtors' Claims Agent:

      Metricom, Inc.
      c/o Robert L. Berger & Associates, LLC
      PMB 1015
      10351 Santa Monica Blvd., Suite 101A
      Los Angeles, CA 90025

Copies must also be sent to the Debtors' Counsel, Murphy
Sheneman Julian & Rogers; the Bondholders Creditors Committee
Counsel, Andrews & Kurth LLP; and the Trade Creditors Committee
Counsel, Pachulski, Stang, Ziehl, Young & Jones.

The Final Administrative Claims Bar Date does not apply to:

      i. Professional fees

     ii. Administrative Tax Claims

    iii. Other Excluded Administrative Claims

Metricom, Inc., filed for Chapter 11 bankruptcy protection on
July 2, 2001. Margaret Sheneman, Esq., Keith McDaniels, Esq.,
and Brian Y. Lee, Esq., at Murphy Sheneman Julian and Rogers
represent the Debtors in its restructuring efforts.


MOBILE TOOL: Seeks Court Approval of $23 Million DIP Financing
--------------------------------------------------------------
Mobile Tool International, Inc., and its debtor-affiliates want
the U.S. Bankruptcy Court for the District of Delaware to
approve a Postpetition Financing Facility.

The Debtors acknowledge that as of the Petition Date, they are
indebted to Fleet Capital Corporation in the aggregate principal
amount of $23,457,338 and approximately $9,614,685 letters of
credit.  The Debtors granted the Prepetition Lender a security
interest in and lien on all of Debtors' real property and all or
substantially all of their personal property, including all
accounts, general intangibles, documents, chattel paper, deposit
accounts, securities, inventory, and equipment.

The Debtors relate to the Court that recently, their trade
vendors and customers have expressed concern regarding the
Company's financial condition and ability to honor its
obligations.  Certain vendors have required cash on delivery or
cash in advance of delivery as a condition to providing goods
and services required by the Debtors to maintain ongoing
operations on an uninterrupted basis.  The Debtors expect that
absent approval of the proposed debtor-in-possession financing
facility, their relationship with their existing vendors,
employees and customers will further deteriorate.

The Debtors urgently need debtor-in-possession financing to
assure their vendors, employees and customers that they have
sufficient resources with which to honor their postpetition
obligations.  The Debtors further tell the Court that despite
diligent effort, they are unable to obtain funds in the form of
unsecured credit allowable under the Bankruptcy Code as an
administrative expense.

Accordingly, the Debtors request authority from the Court to
enter into a postpetition financing agreement that will provide
the Debtors with a $23 million debtor-in-possession financing
facility with Fleet Capital. In this connection, pending final
hearing, the Debtors wish to borrow up to $5 million on an
interim basis.

The Borrowings under the DIP Financing Facility are to be used
for working capital and general corporate purposes.  The DIP
Facility will mature on March 30, 2003.

The Debtors will be caused to pay:

     i) Closing Fee:
        $230,000 of which, 50% is payable on the closing date of
        the Facility and the other half on the Termination Date

    ii) letter of Credit and LC Suport Fees:
        4% per annum due and payable on the first business day
        of each month.

   iii) Unused Line Fee
        0.5% times the difference between $23,000,000 and the
        Average Monthly Revolver Loan Balance.

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.


NANOPIERCE TECHNOLOGIES: Obtains Judicial Title to All Patents
--------------------------------------------------------------
NanoPierce Technologies, Inc., (OTCBB:NPCT) announced that
pursuant to a Settlement Agreement signed by all parties and
enforced by Court Order, it has obtained judicial title to all
Patents relating to the Particle Interconnect Technology. The
Court Order, among other things, declares, "that NanoPierce
Technologies, Inc., owns the entire, exclusive, incontestable
ownership, right, title and interest in the Patents." The Court
Order cannot be appealed.

The same Court Order declares that Louis DiFrancesco owns the
sole, exclusive, and incontestable right, to receive and collect
all royalties and other payments from all licenses outstanding
on September 3, 1996. Should any of these licenses have been or
be terminated, Mr. DiFrancesco would have the right to receive
royalties for the term of any new license granted by NanoPierce
to the same licensees or their respective affiliates within
three (3) years of the date of the Order.  Mr. DiFrancesco has
the right to directly enforce the royalty, maintenance fee,
payment, accounting, audit, default, cure and termination
provisions of all licenses outstanding on September 3, 1996, and
any successor license.

Mr. DiFrancesco was also granted a limited, two year, non-
transferable, with no right to sublicense, royalty-bearing
license to produce all integrated circuit sockets for leaded
package semiconductor parts including the following types of
sockets as generally defined in the industry BGA, DIP, CERDIP,
PLCC, LCC, SOIC, SSOIC, SOP, PGA, LGA, TSOP, TAB, SIP, ZIP, Flat
pack, PQFP, CQFP, QUIP, and DTCP. The foregoing list is not
exclusive and the parties mutually understand and expect that
new socket types will be developed for leaded packaged
semiconductor parts. Without limiting the foregoing, the scope
of the License Agreement shall also include: (i) laminated
interlayer connections; (ii) the right to use Particle
Interconnect Technology in thermally conductive applications not
involving semiconductor heat sinks; and (iii) using Particle
Interconnect Technology non-semiconductor, non-electrical
industrial applications to mechanically join metal plates.
Excluded from the scope of the License Agreement are sockets for
use in the automated handling and testing of ICs, lead frames
and semiconductor heat sinks; provided, however, if the
exclusivity provisions of a certain third-party license is
terminated for any reason, then the License Agreement shall be
deemed automatically expanded to include such sockets as well.
The License Agreement renews automatically for additional,
successive two-year periods provided Mr. DiFrancesco makes
certain minimum royalty payments and otherwise complies with the
terms of the License Agreement. NanoPierce released to Mr.
DiFrancesco all rights to a patent application, unrelated to the
Particle Interconnect Technology, which it had previously
abandoned.

NanoPierce will make a one-time payment of $15,000 to Mr.
DiFrancesco as part of the Settlement Agreement.

The Court Order also contains the following permanent
injunction:

     1. Defendants Louis DiFrancesco and Particle Interconnect
Research & Development, Inc., their agents, servants, employees
and attorneys and those persons in active concert or
participation with any of them who receive actual notice of this
Consent Order and Judgment by personal service or otherwise are
hereby restrained from:

          (a) Contacting any actual or potential customer,
licensee or investor of Plaintiffs or their related entities
under the auspices that DiFrancesco or Particle Interconnect
Research and Development represents, works for, or is associated
with the Plaintiffs other than as a licensee of Plaintiffs,
except that DiFrancesco or his representatives may contact
Exatron, Meyers, Johnson-Matthey or potential successors to
Micromodule Systems and Multiflex pursuant to Section D(8) below
which he has previously assigned to the Plaintiffs for the
purpose of attempting to collect royalty payments, maintenance
fees, and other amounts payable or which may in the future
become payable and for obtaining accountings, exercising audit,
default and cure rights under the licenses outstanding on
September 3, 1996. Nothing herein shall prevent DiFrancesco from
contacting any individual or entity for any legitimate business
or personal purpose provided that DiFrancesco complies with the
provisions of this Paragraph B(1)(a).

          (b) Making any statement to any actual or potential
customer, licensee or investor of Plaintiffs or their related
entities which directly or by implication asserts that:

               (i) With the exception of the Abandoned
Application as described in Section D(6) hereof and any
Improvements owned by DiFrancesco, DiFrancesco owns all or any
portion of the Patents or licenses (except for the right to
collect the monthly payments, maintenance fees and any other
amounts payable from Exatron, Meyers, and Johnson-Matthey or
potential successors to Micromodule Systems and Multiflex
pursuant to Section D(8) below) which he has previously assigned
to the Plaintiffs; or

             (ii) DiFrancesco owns all or any part of any other
intellectual properties invented, developed or owned by
Plaintiffs or any of their successors; or

            (iii) DiFrancesco's consulting agreement with
Particle Interconnect Corporation has not expired.

Nothing in the preceding paragraph shall prohibit DiFrancesco
from making any statement to any actual or potential customer,
licensee or investor of Plaintiffs or their related entities
which directly or by implication asserts that DiFrancesco is the
inventor of the Particle Interconnect Technology or a licensee
of Plaintiffs; provided that, at the time such statement is
made, it is factually correct in all material respects.

     2. Particle Interconnect Corporation, NanoPierce
Technologies, Inc., Intercell International Corporation, and
Paul H. Metzinger, their respective agents, servants, employees
and attorneys and those persons in active concert or
participation with any of them who receive actual notice of this
Consent Order and Judgment by personal service or otherwise are
hereby restrained from:

          (a) Interfering with DiFrancesco's rights to collect
royalties, maintenance fees and other amounts now payable or
accruing and payable in the future under the licenses
outstanding on September 3, 1996, (or any successor license in
connection with which DiFrancesco has a right to receive
royalties pursuant to Section D(8) below) and/or his right to
enforce the accounting, audit, default, cure and other royalty
related provisions of the licenses outstanding on September 3,
1996.

          (b) Assigning, modifying or terminating the royalty,
payment, accounting, default, cure and termination provisions of
any Current Licenses (defined as the Exatron and Meyers
Licenses) or any successor license in connection with which
DiFrancesco has a right to receive royalties pursuant to Section
D(8) below (all other licenses outstanding on September 3, 1996,
having been cancelled or otherwise terminated or expired).

     3. With the exception of the Joint Press Release attached
hereto as Exhibit 5, all parties and their respective agents and
attorneys and those persons in active concert or participation
with any of them who receive actual notice of this Order by
personal service or otherwise are hereby restrained from
disclosing to any person or party the terms of this Consent
Order and Judgment and from making any public comment whatsoever
concerning their respective opposing parties in this action.
Nothing in the preceding sentence shall prohibit either party
from: (i) disclosing that DiFrancesco is a licensee of
NanoPierce, its successors and assigns, provided at the time
made, such statement is true; or, (ii) that DiFrancesco is the
inventor of the Particle Interconnect Technology provided that
in making any such statement, DiFrancesco in no way implies that
he has any ownership interest in the Patents (other then the
Abandoned Patent and improvements made by him) or the licenses
granted thereunder. The Court specifically finds that damages
for violation of this injunction would be substantial but
impossible to calculate with specificity and adopts the parties'
agreement that the appropriate remedy for violation of this
injunction shall be payment of liquidated damages in the amount
of $25,000.00 for the first violation and $50,000.00 for each
succeeding violation.

     4. Upon execution of this Consent Order and Judgment,
NanoPierce shall provide DiFrancesco with a letter executed by
an authorized representative of NanoPierce and notarized that
acknowledges that (i) DiFrancesco is the inventor of the
Particle Interconnect Technology embodied in the Patents which
technology and Patents have been assigned to NanoPierce and,
(ii) DiFrancesco is a duly authorized licensee of NanoPierce.
NanoPierce, its successors and assigns shall also promptly and
truthfully respond to any verbal inquiry by a third-party who
attempts to confirm DiFrancesco's status as the inventor of the
Particle Interconnect Technology embodied in the Patents and as
a licensee of NanoPierce.

     5. The Parties, and each of them have irrevocably waived
any right they may otherwise have had to seek appellate review
of this Consent Order and Judgment and are hereby restrained
from seeking appellate review of this Consent Order and
Judgment.

     6. The Parties, and each of them, irrevocably waive any
right they may otherwise have had from the beginning of time to
the date of this Consent Order and Judgment to bring any action
of any type or description against their respective opposing
parties and are hereby restrained from doing so with the
exception of actions to enforce the terms and conditions
contained in this Consent Order and Judgment. In the event
action is brought to enforce the terms and conditions of this
Consent Order and Judgment, attorneys' fees shall be awarded to
the prevailing party.

Paul H. Metzinger, President & CEO of NanoPierce Technologies,
Inc., said: "We are delighted this long, difficult and expensive
process is over. The Judicial Declaratory Order vesting
unchallengeable ownership of all the Patents in NanoPierce
Technologies, Inc., permits the company to go forward with major
financing and licensing the Particle Interconnect Technology.
The potential lingering cloud of legal doubt in the minds of
prospective investors or licensees whether the Company owned the
Particle Interconnect Technology has been permanently removed.
It is a very important development for the Company."

Louis DiFrancesco said: "I am pleased to resolve this difficult
and consuming dispute in a reasonable and fair manner. I look
forward to proving, through the exercise of my license rights,
the true potential that I, as the inventor, have always known
the Particle Interconnect Technology to have."

NanoPierce Technologies, Inc., of Denver, Colorado, USA, is
traded on the NASDAQ stock market (OTC:BB:NPCT) as well as on
the Frankfurt and Hamburg exchanges (OTC:NPI). In addition to
the 12 patents it owns, NanoPierce has numerous applications
pending, others in preparation, and various other intellectual
properties related to NanoPierce's proprietary NCS(TM)
(NanoPierce Connection System). This advanced system is designed
to provide significant improvement over conventional electrical
and mechanical interconnection methods for high-density circuit
boards, components, sockets, connectors, semiconductor packaging
and electronic systems.

                         *    *    *

As previously reported, the independent auditors' report on the
Company's financial statements as of June 30, 2002, and for each
of the years in the two-year period then ended, includes a
"going concern" explanatory paragraph, that describes
substantial doubt about the Company's ability to continue as a
going concern.


NCS HEALTHCARE: Omnicare Extends Exchange Offer Until October 21
----------------------------------------------------------------
Omnicare, Inc. (NYSE: OCR), a leading provider of pharmaceutical
care for the elderly, has extended its $3.50 per share fully
financed, all cash tender offer for all of the outstanding
shares of Class A common stock and Class B common stock of NCS
HealthCare, Inc. (OTC Bulleting Board: NCSS.OB).  The offer,
which was scheduled to expire at 12:00 Midnight, New York City
time, on Thursday, October 3, 2002, has been extended until
Monday, October 21, 2002, unless further extended.

Omnicare's offer represents more than twice the value of the
proposed transaction between NCS and Genesis Health Ventures,
Inc., (Nasdaq: GHVI) and nearly five times the value of NCS's
closing stock price of $0.74 on July 26, 2002, the last trading
day before Omnicare announced its acquisition proposal.  The
proposed NCS/Genesis transaction, based on yesterday's closing
stock price, is worth approximately $1.70 per share or
approximately 26% below the current value of NCS common stock.

As of the close of business on October 3, 2002, a total of
12,277,488 shares of Class A common stock of NCS had been
tendered, which represents approximately 67% of the outstanding
shares of Class A common stock, and a total of 24,782 shares of
Class B common stock had been tendered, which represents less
than 1% of the outstanding shares of Class B common stock.  Jon
H. Outcalt, chairman of the board of NCS, and Kevin B. Shaw,
president, chief executive officer and a director of NCS, own
approximately 88% of the outstanding shares of Class B common
stock.  Messrs. Outcalt and Shaw have entered into illegal
voting agreements pursuant to which they have agreed, among
other things, to support the proposed NCS/Genesis transaction
and to vote all of their shares of NCS Class A common stock and
Class B common stock in favor of the proposed transaction.

Dewey Ballantine LLP is acting as legal counsel to Omnicare and
Merrill Lynch is acting as financial advisor.  Innisfree M&A
Incorporated is acting as Information Agent.

Omnicare, based in Covington, Kentucky, is a leading provider of
pharmaceutical care for the elderly.  Omnicare serves
approximately 738,000 residents in long-term care facilities in
45 states, making it the nation's largest provider of
professional pharmacy, related consulting and data management
services for skilled nursing, assisted living and other
institutional healthcare providers.  Omnicare also provides
clinical research services for the pharmaceutical and
biotechnology industries in 28 countries worldwide.  For more
information, visit the company's Web site at
http://www.omnicare.com

NCS Healthcare's June 30, 2002 balance sheet shows a total
shareholders' equity deficit of about $108 million.


NEWCOR INC: Seeks More Time to Make Lease-Related Decisions
-----------------------------------------------------------
Newcor, Inc., and its debtor-affiliates ask for more time from
the U.S. Bankruptcy Court for the district of Delaware to decide
whether to assume, assume and assign or reject unexpired
nonresidential real property leases.

The Debtors are in the process of determining whether to move
their Blackhawk Systems Group to the Blackhawk Production
Facility, which is located at 118 Blackhawk Lane, Cedar Falls,
Iowa and owned by Newcor.  The Debtors are analyzing the cost
benefits that would arise from this consolidation. Despite the
presumed cost benefits, any such consolidation is in the best
interests of the Debtors' estates, to complete the consolidation
in an orderly manner.

The Debtors seek this Court's authorization for a further
extension of time to assume or reject the Remaining Lease until
the earlier of

     a) April 1, 2003; or

     b) the date of the order confirming the Debtors' chapter 11
        plan of reorganization.

If the Debtors are forced to make hasty lease-related decisions,
they will either preclude their ability to consolidate Blackhawk
in a cost-effective manner, or consolidate Blackhawk in a forced
and disruptive manner.

Newcor, Inc., along with its subsidiaries, design and
manufacture a variety of products, principally for the
automotive, heavy-duty, capital goods, agricultural and
industrial markets. The Company filed for chapter 11 protection
on February 25, 2002 Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl Young & Jones P.C., represents the Debtors in their
restructuring efforts. When the Debtors filed for protection
from its creditors, it listed $141,000,000 in total assets and
$181,000,000 in total debts.


NEXTWAVE TELECOM: Awaits Supreme Court's FCC License Ruling
-----------------------------------------------------------
"NextWave has strong legal arguments that the U.S. Court of
Appeals ruled correctly last year in holding that the Bankruptcy
Code barred the FCC from canceling spectrum licenses the company
held while successfully reorganizing its business affairs," said
NextWave SVP Michael Wack.  "We believe those arguments were
presented to the Court very effectively [Tues]day at oral
argument.  The company looks forward to the Court's ruling."

NextWave Telecom Inc., was formed in 1995 to provide high-speed
wireless Internet access and voice communications services to
consumer and business markets.  For more information about
NextWave, visit the Web site at http://www.nextwavetel.com


PACIFIC GAS: CPUC & Committee Wins Approval to Hire UBS Warburg
---------------------------------------------------------------
In June 2002, the CPUC engaged UBS Warburg to arrange for the
financings required by its Plan.  UBS Warburg is a subsidiary of
UBS AG, a global integrated investment services firm with
invested assets of approximately $1.47 trillion under
management.

In July, the Court declined the CPUC's motion to use Pacific Gas
and Electric Company estate funds to pay UBS Warburg for CPUC's
Plan.

However, the CPUC continued to engage UBS Warburg to provide
financial and market-related advice and assistance with respect
to the financing of the Commission Plan.  As a result, UBS
Warburg has participated in informal discovery matters with PG&E
and delivered an Expert's Report in connection with the CPUC's
efforts to confirm its competing plan of reorganization.

Now, CPUC and the Official Committee of Unsecured Creditors have
joined forces and become co-proponents of a reorganization plan
for PG&E.

To effectuate their reorganization plan for PG&E, CPUC and the
Committee entered into an Engagement Letter with UBS Warburg
pursuant to which UBS Warburg will provide services as financing
and capital market arranger in connection with the financing of
the Plan.

By this joint application, CPUC and the Committee seek the
Court's authority, pursuant to Sections 1103(a) and 328(a) of
the Bankruptcy Code, to retain and employ UBS Warburg as
financing and capital markets arranger in connection with the
financing of their Reorganization Plan for PG&E, at the expense
of the PG&E estate.

The Proponents tell the Court that the only way to determine
whether the financing required by their Plan is achievable is
for a financing arranger, like UBS Warburg, to structure the
debt and equity instruments to be issued under the Plan, solicit
indications of interest, and eventually solicit commitments to
provide the financing, if necessary.

Pursuant to the Engagement Letter, UBS Warburg is expected to:

(a) assist the Committee and the Commission in analyzing,
    structuring, negotiating and effecting any financing by PG&E
    of the Commission/Committee Plan;

(b) provide financial and market-related advice and assistance
    with respect to the financing of the Commission/Committee
    Plan; and

(c) act as book-running lead manager for any capital markets
    financings of debt, equity, equity-linked and/or preferred
    securities to be executed by the Debtor or by PG&E
    Corporation pursuant to the Commission/Committee Plan.

The engagement term is from the date the Agreement becomes
effective to the consummation of the Plan.

At a time that is mutually agreed by the Proponents and UBS
Warburg in conjunction with the confirmation hearing for the
Plan, UBS Warburg will deliver to the Proponents a highly
confident letter -- the UBS Warburg Financing Proposal -- to
provide or arrange for the financing of the Plan, which:

(1) will be based on reasonably detailed assumptions regarding
    market conditions, rate path and financial performance of
    reorganized Debtor;

(2) include reasonably detailed term sheets describing the
    current terms of each class and series of debt and equity
    securities to be issued and sold in public and private
    transactions; and

(3) will be subject to terms and conditions normally included in
    this kind of arrangements in similar contexts, including but
    not limited to customary market pricing in connection with
    any underwriting.

UBS Warburg is expected to coordinate with the other retained
professionals in PG&E's case to eliminate unnecessary
duplication or overlap of work.

                         Compensation

UBS Warburg is to be paid in stages:

(a) Retainer fees payable in two parts:

    (1) $2,000,000 promptly upon the effectiveness of the
        Engagement Letter; and

    (2) a $150,000 monthly fee, payable on the first day of
        each month, for the period from March 1, 2003 through
        the earlier of December 31, 2003 or the end of the Term.

    In addition, UBS Warburg will receive an additional
    $6,000,000 upon the delivery to the Proponents of the UBS
    Warburg Financing Proposal.

(b) Commitment Fees:

    Following the delivery of the UBS Warburg Financing Proposal
    and the payment of the fee relating to it, the Proponents
    may request that UBS Warburg deliver a binding commitment to
    acquire some or all of the securities to be issued under the
    Commission/Committee Plan that are not sold to third
    parties.

    UBS Warburg will deliver the UBS Warburg Commitment subject
    to, among other things:

     (1) then existing market conditions,

     (2) the financial performance and credit quality of the
         Debtor, and

     (3) the terms and conditions of each class or series of the
         securities to be acquired, being acceptable to UBS
         Warburg.

    Before delivery of the UBS Warburg Commitment, the
    Commitment Fee to be paid to UBS Warburg will be agreed to
    by the Proponents, and approved by the Court.  The UBS
    Warburg Commitment will also be subject to pricing and other
    terms and conditions normally included in this kind of
    arrangements in similar contexts, including compliance with
    applicable law and regulations.  The UBS Warburg Commitment
    will not be delivered prior to the Proponents' obtaining
    Bankruptcy Court approval for it and for the payment of the
    Commitment Fee agreed between UBS Warburg and the
    Proponents.  UBS Warburg reserves the right to syndicate the
    UBS Warburg Commitment.

(c) Consummation Fee:

    At the time of the occurrence of a Consummation Transaction
    with respect to PG&E, UBS Warburg will receive a
    Consummation Fee equal to $60,000,000, minus up to
    $60,000,000 of:

       (i) the cumulative Commitment Fees previously paid to UBS
           Warburg; and

      (ii) the portion of any underwriting commissions retained
           by UBS Warburg in its capacity as lead manager or co-
           manager of any underwritten financing in connection
           with the Consummation Transaction.

    A Consummation Transaction includes the consummation of any
    reorganization or restructuring of the PG&E liabilities
    other than:

     (a) any plan of reorganization that results in the
         disaggregation of PG&E into separate business entities
         with the effect of substantially removing from the
         Commission its authority under current law to regulate
         the rates of those entities; or

     (b) any plan of reorganization with respect to which the
         Commission does not agree or that does not involve the
         sale of debt or equity securities to make distributions
         to holders of allowed claims.

Whether or not any financing transaction is consummated, UBS
Warburg will be entitled to reimbursement of reasonable expenses
incurred by UBS Warburg in entering into and performing services
pursuant to the Engagement Letter, including the reasonable
fees, disbursements and other charges of its legal counsel, and
including expenses incurred in connection with two previous
letter agreements with the Commission.

The Proponents note that the services being provided by UBS
Warburg are primarily transactional in nature, and UBS Warburg's
compensation is structured accordingly.  This is consistent with
UBS Warburg's normal and customary compensation for
transactional work of this type, which requires the level and
scope of services and possible issuance of the types of
financial commitments contemplated by the Engagement Letter.

The Engagement Letter provides that UBS Warburg will apply to
the Court only for final allowance of its compensation at the
time set for final allowance of compensation of professionals in
the case. The compensation will be reviewed subject only to the
provisions and standards set forth in Section 328(a) of the
Bankruptcy Code.

Furthermore, CPUC and the Committee agree:

(1) that none of UBS Warburg, and its affiliates, directors,
    employees and controlling persons, will have any liability
    to the Commission or the Committee, and

(2) to release UBS Warburg and these persons from any losses or
    liabilities in connection with or as a result of its
    engagement, except if a court determines in a judgment that
    has become final that losses or liabilities resulted solely
    from:

     (x) nonperformance of UBS Warburg of its services under the
         Engagement Letter, or

     (y) gross negligence or willful misconduct by UBS Warburg
         in performing the services that are subject of the
         Engagement Letter.

Except for the enforcement of these rights or claims, the
Committee and CPUC covenant that they will not sue or bring any
claim against UBS Warburg or any of its affiliates, directors,
agents, employees or controlling persons.

                            Termination

UBS Warburg's retention pursuant to the Engagement Letter may be
terminated by either party on 30 days written notice.  If
services are terminated by the Proponents, then UBS Warburg will
be entitled to payment of fees with respect to any Consummation
Transaction consummated within 18 months after the termination,
and payment of expenses incurred prior to the termination.

A copy of the UBS Warburg Engagement Letter is available at no
charge at:
http://bankrupt.com/misc/Warburg_Engagement_Letter.pdf

                    Warburg's Disinterestedness

Kenneth S. Crews, UBS Warburg LLC Vice Chairman, notes that
because UBS Warburg acts as a broker, dealer and custodian, and
engages in trading activities on behalf of customers and for its
own account with respect to a variety of securities, UBS Warburg
may engage in transactions in the Debtors' securities, its
subsidiaries and affiliates and other parties-in-interest, and
with some significant creditors or bondholders, in matters
unrelated to PG&E's case.

In this regard, Mr. Crews discloses that:

-- As of September 10, 2002, UBS Warburg held for its own
   account long positions with respect to $20,966,000 face
   amount of the Debtor's debt securities and held short
   positions with respect to $6,063,000 face amount of the
   Debtor's debt securities;

-- As of September 10, 2002, UBS Warburg owned 741,525 shares of
   PG&E Corporation common stock, which represented 0.189% of
   the outstanding common stock of PG&E Corporation; and

-- UBS Warburg may currently, hold for the accounts of
   customers, debt and/or equity securities of the Debtor and
   other parties-in-interest.

Mr. Crews emphasizes that these proprietary and customer
holdings are unrelated to this case and are trading positions
that may change materially from day to day.

In addition, Mr. Crews notes that UBS AG is an administrative
agent under a Reimbursement Agreement, dated May 1, 1996 among
the Debtor, UBS AG as Administrative Agent, and certain banks.
In this capacity, UBS AG has objected to the Plans proposed by
the CPUC and the Debtor.  As of September 13, 2002, UBS AG was
lender of record for $10,000,000 under this agreement.  However,
this entire loan position was sold as of September 26, 2001, and
UBS AG no longer holds any bank debt under this agreement, Mr.
Crews reports.

Mr. Crews adds that UBS AG was a lender to the Debtor or other
subsidiaries of PG&E Corp.:

(1) As of September 13, 2002, UBS AG was a lender of record
    holding two participations under the Amended and Restated
    Credit Agreement, dated as of August 22, 2001, among PG&E
    National Energy Group, Inc., a non-debtor subsidiary of PG&E
    Corp., J.P. Morgan Chase Bank, as Issuing Bank and
    Administrative Agent, the lenders party, the Documentation
    Agents and the Syndication Agents:

    (a) a $20,000,000 participation in the 2-year revolving
        credit facility maturing on August 23, 2003 and of which
        $11,316,559.14 was issued as of September 13, 2002 in
        the form of letters of credit, and

    (b) a $20,000,000 participation in the 364-day revolving
        credit facility maturing on October 21, 2002 and of
        which $17,240,000 was issued in the form of loans as of
        September 13, 2002;

(2) As of September 13, 2002, UBS AG was the lender of record
    for $15,038,440 under the Amended and Restated Credit
    Agreement, dated as of December 1, 1997 among the Debtor,
    Bank of America National Trust and Savings Association, as
    Administrative Agent and the lenders party.  This loan
    position was fully transferred to various third parties by
    November 2001.  In addition, UBS AG had an additional
    $15,038,000 participation in this facility that was also
    fully transferred to various third parties by December 2001.
    As a result of these transfers, UBS Warburg does not have
    any exposure under this credit agreement; and

(3) As of September 13, 2002, UBS AG was a lender of record
    holding a $4,388,060 participation under the Credit
    Agreement, dated September 1, 1988 and maturing on September
    1, 2003, among U.S. General New England Inc., a non-debtor
    subsidiary of PG&E Corp., The Chase Manhattan Bank as
    Administrative Agent and LC Bank, the Co-Syndication Agents,
    the Documentation Agent and the various lenders.  Of UBS
    AG's participation, $3,817,611.98 has been utilized in the
    form of loans and letters of credit.

Mr. Crews also advises that UBS Warburg, or its predecessor
firms or affiliates, have participated in underwritings of
securities of the Debtor or its predecessor firms or affiliates:

A. With Respect To The Debtors' Securities

1. On June 11, 1990, PaineWebber, a firm acquired by UBS
   Warburg's parent UBS AG, acted as a manager for the offering
   of the Debtor's $150,000,000 aggregate principal amount of
   9.300% Refunding Mortgage Bonds Due 2023;

2. On January 10, 1989, UBS Securities Inc., a predecessor firm
   of UBS Warburg, acted as a manager for the offering of the
   Debtor's $200,000,000 aggregate principal amount of 9.950%
   Refunding Mortgage Bonds Due 2022;

3. On July 7, 1987, UBS Securities Inc., a predecessor firm of
   UBS Warburg, acted as a manager for the offering of the
   Debtor's $250,000,000 aggregate principal amount of 10.000%
   Refunding Mortgage Bonds Due 2020; and

4. On December 16, 1986, Swiss Bank Corporation, a predecessor
   firm of UBS Warburg, acted as a manager for the offering of
   the Debtor's $775,000,000 aggregate principal amount of
   8.650% Refunding Mortgage Bonds Due 2020.

B. With Respect To Securities Of The Debtors' Predecessor Firms
   or Affiliates

1. On November 30, 1998, UBS Warburg acted as the co-lead
   manager for the offerings of these debt securities of U.S.
   General New England Inc., a non-debtor affiliate of PG&E
   Corporation:

    * $221,643,000 aggregate principal amount of 7.459% Notes
      Due 2015 and

    * $195,000,000 aggregate principal amount of 8.27% Notes Due
      2020; and

2. On November 21, 1995, PaineWebber, a firm acquired by UBS
   Warburg's parent UBS AG, acted as a manager for the issuance
   of 12,000,000 $1.975 Quarterly Income Preferred Shares for
   PG&E Capital I, a non-debtor subsidiary of PG&E Corporation,
   for an aggregate principal amount of $300,000,000.

On February 8, 2002, UBS Warburg completed a transaction whereby
it obtained from Enron Corp. an exclusive license to the
technology to operate North American natural gas and power
trading operations, formerly operated by Enron Corp., and named
this new business UBS Warburg Energy.  The senior management
team that built the Enron Corp. energy trading operation joined
UBS Warburg in Houston.

Mr. Crews recounts that UBS Warburg was one of the several firms
considered by the Debtor as financial advisor.

In connection with matters unrelated to the Debtor and its
Chapter 11 case, UBS Warburg has business connections with many
entities, including financial advisory, underwriting, brokerage,
custodial, lending and vendor relationships.  Some of the
business connections are of a confidential nature, including
advisory relationships involving mergers and acquisitions,
divestiture or strategic advisory services.  In addition,
because UBS Warburg has over 17,000 employees and is affiliated
with a large international commercial bank and other entities
engaged in financial services businesses, certain of UBS
Warburg's individuals may hold interests in PG&E or other
parties-in-interest, and UBS AG and other UBS Warburg affiliates
may likely have business connections with parties-in-interest.
Mr. Crews notes that these activities are apparently unrelated
to this case or UBS Warburg's services for the Committee and
CPUC.

"To the best of my knowledge, UBS Warburg has not been retained
to assist any entity or person other than the Committee and CPUC
on matters relating to, or in connection with, the case," Mr.
Crews says.  UBS Warburg will not accept any engagement or
perform any service in the case for any party-in-interest other
than the Committee and CPUC, if its employment by the Committee
and CPUC is approved by the Court.

UBS Warburg will, however, continue to provide professional
services to certain parties-in-interest in the Case; provided
however, that these services do not relate to, or have any
direct connection with, the Case.

Mr. Crews assures the Court that UBS Warburg maintains and will
continue to maintain information barriers between those of its
groups that are providing or will provide services to the
Committee and CPUC, and other areas of UBS Warburg.

                        U.S. Trustee Objects

When the CPUC alone submitted the application some months ago,
the United States Trustee pointed out that the fees could range
as high as $176,000,000, and no one seemed to contest that
figure at the time.  William T. Neary, United States Trustee,
observes that the current Application has improved greatly, but
several important issues should prevent it from being approved.

First, Mr. Neary says, it is not possible to determine how the
majority of UBS Warburg's fees will be calculated.  In
particular, the Application provides no independently verifiable
means of determining what the Commitment Fees might be.  Mr.
Neary recounts that the previous CPUC application set forth in
detail by task, and the prior agreement set forth each of the
particular tranches of debt UBS Warburg might have arranged and
the applicable rate of compensation for each type of funding.
However, the current application does not have any specifics.
The amount sought by UBS Warburg for this category last time
ranged as high as $166,000,000. Given the enormous size of this
category, the compensation should be explained carefully, Mr.
Neary asserts.

Second, UBS Warburg is not qualified because it is a creditor of
the estate.  According to Mr. Crews' declaration, UBS Warburg
has a long-term position on PG&E's debt securities of
$20,966,000 and a short-term position of $6,063,000.  Ownership
of a claim by a professional seeking to represent an official
committee of unsecured creditors may disqualify the firm, Mr.
Neary cites Section 1103(b) and 328(c) of the Bankruptcy Code
and Rule 2014 of the Federal Rules of Bankruptcy Procedure.

Third, Mr. Neary contends that the application should not be
approved because it does not require any compliance whatsoever
with local rules and national standards for periodic fee
applications.  Specifically, the Engagement Letter and the
application expressly exempt UBS Warburg from filing any interim
requests for compensation and its final application for
compensation will consist of nothing more than a list of
services provided, without narrative or explanation, and the
names of parties working on the financing.  Furthermore, the
provision in the Engagement Letter for UBS Warburg's fees not be
subject to review except under Section 328(a) further constrains
review by the Court.  "These terms diverge not only from local
practice, but from the practice in this complicated case and the
law itself," Mr. Neary says.  UBS Warburg seems to be saying
that when the final applications are filed, the only permissible
review will be whether the fees are calculated correctly.  Mr.
Neary maintains that the Court must have the right to review the
appropriateness of that fee even if the review is limited to the
standard allowable under Section 328(a).

Fourth, Mr. Neary further points out that certain terms in the
Application and the Engagement Letter are objectionable:

A. The Release provision purports to limit the Committee's right
   to recovery damages resulting from intentional acts or gross
   negligence by UBS Warburg.  Mr. Neary argues that it is
   unjustified and inappropriate for a Chapter 11 professional.
   Mr. Neary notes that neither UBS Warburg nor the Committee
   has proven that the services UBS Warburg will provide to the
   CPUC are unavailable without the proposed indemnity.  Mr.
   Neary believes that the requested release does not reflect a
   market practice;

B. The provisions for choice of law (New York), for the use of
   New York courts, are inconsistent with the Bankruptcy Court's
   supervision of the estate.  Professionals employed under the
   authority of the Bankruptcy Court must rely on federal law
   and the Bankruptcy Court for protection in the first
   instance, Mr. Neary maintains.  Choice of law terms are
   inconsistent with Bankruptcy Code Sections 327-330, which
   give the Bankruptcy Court exclusive control of employment
   terms and fees in bankruptcy cases;

C. UBS Warburg requests that the Committee waive any right to a
   jury trial in connection with any dispute over UBS Warburg's
   professional services.  The right to trial by jury is viewed
   as being so fundamental to the U.S. system of jurisprudence
   that it is part of the Bill of Rights, the Seventh Amendment
   to the United States Constitution, Mr. Neary points out; and

D. The indemnity provision broadly refers to a "dispute of any
   kind or nature whatsoever arising out of or in any way
   relating to this agreement."   The U.S. Trustee is concerned
   this provision would extend to disputes involving parties
   beyond the Committee, the CPUC and UBS Warburg.

                   PG&E Doesn't Like It Either

William J. Lafferty, Esq., at Howard, Rice, Nemerovski, Canady,
Falk & Rabkin, tells Judge Montali that the Application is a
thinly disguised ruse to foist uneconomic and deleterious terms
in the Engagement Letter onto the Debtor, on the basis that the
Committee has a right to engage an investment banker in this
case.

Mr. Lafferty presents four major reasons why the application
should not be approved:

(1) Connections and Conflict of Interest

    a. Mr. Lafferty points out that the application requests
       authorization for the Committee to retain and compensate
       with estate funds a professional to represent a party --
       the CPUC -- which is highly adverse to the Debtor in this
       case.  Mr. Lafferty notes that under the provisions of
       the Engagement Letter, Warburg would be entitled to its
       fees at the Debtor's expense if the confirmed Plan was
       approved by the CPUC, even if the Committee breaks ranks
       with the CPUC.  This provision makes it abundantly clear
       that Warburg is first and foremost responsible to the
       CPUC, and not the Committee, but the Committee is being
       used to secure the retention at Debtor's expenses.  A
       blatant, and continuing, conflict of interest exists, Mr.
       Lafferty cautions; and

    b. Overall, Warburg holds and represents interests adverse
       to the estate, and has a multitude of connections with
       the Debtor that disqualify Warburg from employment at the
       expense of the estate.  In particular, Mr. Lafferty notes
       that, UBS AG has filed objections to both the plan of
       reorganization filed by PG&E and the CPUC's competing
       plan in its role as administrative agent under a
       Reimbursement Agreement dated as of May 1, 1996.  This
       position, Mr. Lafferty notes, renders UBS AG adverse not
       only to the estate, but also to its proposed clients --
       the CPUC and the Committee.

       If it is clear that payment will later be denied under
       Section 328(c), employment should be denied, Mr. Lafferty
       says.  The Engagement Letter provides that upon approval
       of the Application, Warburg will be entitled to receive
       the fees provided in the Engagement Letter without having
       to apply to the Court under Section 330 of the Bankruptcy
       Code.  Mr. Lafferty contends that there is no basis to
       provide Warburg with such an extraordinary dispensation
       from the normal practice.

(2) Excessive Fees

    The Debtor tells the Court that:

    a. the Warburg fees are excessive and above-market for
       financing transactions of this type;

    b. the fee structure makes no sense in the context of this
       case, and provides no real benefit to the Debtor or to
       the estate; and

    c. the Engagement Letter provides for a $60,000,000
       Consummation Fee that Warburg could earn without
       completing, or even participating in, the financing
       necessary for the Debtor to emerge from Chapter 11.

    The Debtor notes that the Engagement Letter provides for
    $8,000,000 in Retainer Fees, $2,000,000 of which are due and
    payable upon the effectiveness of the Engagement Letter, and
    another $6,000,000 of which is due on delivery to the CPUC
    and the Committee of a highly confident letter setting forth
    terms of a proposed financing of the CPUC plan.  Payment of
    a $2,000,000 Retainer Fee at the inception of the
    representation is itself in excess of market, Mr. Lafferty
    remarks.  If the Amended Competing Plan, with the support
    of the Reorganization Agreement, describes a financeable and
    a feasible plan of reorganization, the UBS Financing
    Proposal serves no apparent purpose, Mr. Lafferty continues.

    Mr. Lafferty also notes that there does not appear to be any
    purpose in obtaining a highly confident letter at this
    stage of the Debtor's bankruptcy case.  Mr. Lafferty notes
    that a highly confident letter does not provide a financial
    commitment, but only serves the purpose to convince a third
    party that the company that is the subject of the letter is
    financeable. However, in this instance, because the voting
    closed weeks ago, the only audience for such a letter now is
    the Court.  Indeed, Mr. Lafferty says, the Application
    indicates that the highly confident letter is to be prepared
    and delivered in connection with the confirmation hearing
    although nothing in the Engagement Letter precludes Warburg
    from delivering it earlier.  In this way, the confident
    letter is equivalent to the usual way of demonstrating
    feasibility of a plan of reorganization by expert testimony
    at trial.  It is anomalous, Mr. Lafferty contends, for the
    PG&E estate to pay $6,000,000 just to receive the equivalent
    of testimony that the Amended Competing Plan may be
    feasible.

    PG&E believes that the Amended Competing Plan is not
    feasible due to the uncertainty of cash flow stability and
    revenues, plus the skepticism by the rating agencies and
    institutional lenders concerning the CPUC's reliability.  A
    highly confident letter from UBS Warburg does not appear to
    be responsive to these flaws, Mr. Lafferty points out,
    because Warburg is being engaged to provide financing for a
    plan, not to provide financial advice or to design a
    reliable and feasible regulatory structure that is
    acceptable to capital markets.  Paying Warburg a $6,000,000
    fee to address the wrong problem seems nonsensical, Mr.
    Lafferty points out. The Debtor and its professionals also
    note that, assuming that investment bankers charge higher
    fees in connection with more difficult financing
    transactions, it appears to the Debtor and its professionals
    that the fee structure requested by Warburg reflects either:

    a. a challenge premium associated with the uncertainty of
       being able to complete the financing; or

    b. fees that are materially in excess of market standards.

    Most objectionably, Mr. Lafferty represents, the Engagement
    Letter provides for a $60,000,000 Consummation Fee, payable
    to Warburg upon consummation of any transaction which: (i)
    involves the offering of debt or equity securities of the
    Debtor or affiliates, (ii) does not provide for the
    disaggregation of the Debtor's business with resulting loss
    of regulatory control by the CPUC, and (iii) is acceptable
    to the CPUC, whether Warburg has any involvement with such
    transaction or not, and whether Warburg performs any
    services under the Engagement Letter or not.  Mr. Lafferty
    points out that the Consummation Fee appears excessive in
    any event, and Warburg could be entitled to this fee even if
    it performs no work in relation to the plan that is
    ultimately confirmed;

(3) Inappropriate Terms in the Engagement Letter

    Mr. Lafferty also notes that the Engagement Letter contains
    a number of objectionable terms, which will be detrimental
    to the estate and provides less value to the estate than
    those in the prior version.

    -- The prior version provided for a commitment by Warburg to
       provide or arrange for the financing of the securities to
       be sold pursuant to the CPUC's plan in exchange for the
       Retainer Fee.  This commitment represented some
       undertaking by Warburg to put its balance sheet at risk
       in connection with this financing.  In contrast, the
       present fee structure substitutes this commitment with an
       essentially meaningless highly confident letter, but the
       $8,000,000 fee remains the same.

    -- The current rendition of the Engagement Letter
       references, but does not provide the terms for a
       Commitment Letter, beyond stating that they will be
       acceptable to Warburg.

    -- The prior versions of the Engagement Letter at least
       provided a fee structure for commissions to Warburg in
       connection with the offering to be made pursuant to
       Warburg's Commitment, which would have entitled Warburg
       to receive over $128,000,000 in fees.  The Engagement
       Letter now provides no fixed terms for these fees, but it
       retains provisions that give Warburg the exclusive right
       to provide or arrange for the financing of any plan for
       which the CPUC is a proponent.  It appears foolhardy to
       leave critical terms concerning the fee structure to be
       negotiated later to the satisfaction of Warburg.

    -- The Engagement Letter only describes generically a
       process by which Warburg might be required to deliver a
       commitment to provide financing for the Amended Competing
       Plan.  It does not specify the terms of Warburg's
       proposed commitment, or terms for the securities to be
       issued, such as pricing of the securities, the interest
       rate and maturity of the securities, covenants and events
       of default, and, in the case of equity securities or
       convertible securities, the percentage of the issuer they
       represent.  Moreover, these critical terms are expressly
       not subject to the approval of the Debtor, the issuer.
       Therefore, it is impossible to determine what value, if
       any, the Debtor would receive from the arrangement.  In
       addition, the proposed commitment is still subject to a
       number of highly vague conditions concerning market
       conditions, and Warburg satisfaction, which would render
       any commitment by Warburg entirely illusory at best.

    -- When selecting an investment banker, issuers have the
       ability to negotiate with multiple investment banks at
       the same time, thus imposing a market discipline upon the
       fees being charged for their services.  In large
       underwritings, as this one would be, issuers often elect
       to use joint book-running managers to ensure that this
       market discipline continues until the close of the
       financing.  By agreeing to give Warburg the exclusive
       right to provide or arrange for any financing as book-
       running lead manager prior to negotiating all of the
       terms and conditions of the financing arrangement, there
       is no market discipline imposed.

    -- The commitment referenced in the Engagement Letter is not
       tied in any way to the securities to be issued pursuant
       to the Amended Competing Plan.  The Engagement Letter
       reads as if Warburg will itself decide what type of
       securities it can sell.  This poses a dramatic and
       problematic issue. Warburg is proposing necessarily to
       assist with the financing of the Amended Competing Plan.
       It appears to the Debtor that Warburg is proposing to
       determine what securities are financeable, and then
       presumably the Amended Competing Plan may have to be
       materially amended to incorporate these new provisions;
       and

(4) Approval would have the effect of obligating the estate to
    pay as much as $60,000,000 for no apparent benefit.

    Mr. Lafferty points out that:

    -- Warburg is already employed by the CPUC, and is active in
       this case on behalf of the CPUC's efforts to confirm the
       Amended Plan;

    -- Warburg's first and foremost responsibilities are to the
       CPUC; and

    -- The Engagement Letter clearly notes that Warburg cannot
       earn its fees in connection with any plan not supported
       by the CPUC.

    The Committee, therefore, gets the services of Warburg for
    only so long as it is a co-proponent of a CPUC Plan, but the
    Debtor in any case is being asked to pay the fees.

In addition, Mr. Lafferty notes that a number of other points
that make the engagement of UBS Warburg pursuant to the
Engagement Letter troubling to the Debtor.

-- The joint engagement of Warburg by the Committee and the CPUC
   will lead to confusion.  Is it intended that Warburg would
   continue to be paid by the estate under the terms of the
   Engagement Letter if the Committee decides to terminate its
   role as a co-proponent of the Amended Competing Plan?  That
   result seems bizarre, yet there is no language in either the
   Engagement Letter or the Application prohibiting that
   outcome, or deals directly with the issue of the parties'
   respective rights and obligations in the event that outcome
   occurs.

-- The implications of certain provisions of the Engagement
   Letter appear to create disincentives for the Committee to
   follow any path but that charted by the CPUC.  For example,
   it provides that approval of the Engagement Letter creates an
   entitlement in Warburg to receive at least $60,000,000 in
   Consummation Fees.  This means that the Committee would be
   reluctant to take any action, which would endanger their
   ability to utilize Warburg's services or any action that
   would require it to engage another financial arranger in the
   PG&E case.

-- The exclusivity rights conferred upon Warburg in the
   Engagement Letter give Warburg a substantial veto over
   decisions and negotiations, which might be taken by either of
   the proponents of the Amended Competing Plan.  When one
   considers that the Consummation Fee is payable on
   consummation of any plan which:

    (a) sells securities of the Debtor,

    (b) is approved by the CPUC, and

    (c) doesn't provide for disaggregation of the Debtor's
        business with a resulting loss of regulatory control by
        the CPUC,

   it appears all the less likely that the Committee will
   support any alternative plan that the CPUC does not also
   support.

-- Since the Engagement Letter provides that Warburg cannot
   receive the $60,000,000 Consummation Fee in connection with
   the confirmation of a plan that does not include the CPUC's
   approval, the Engagement Letter essentially prohibits Warburg
   from working for the Committee (or any other proponent) in
   connection with any alternative plan of reorganization,
   including an independent Committee plan, or a plan with the
   Debtor or another party.  And yet the Debtor is being asked
   to finance Warburg's efforts under provision of the
   Bankruptcy Code that would permit only the Committee, and not
   the CPUC, to retain professionals at the Debtor's expense.

-- Courts exercise great caution in approving employment and
   compensation arrangements pursuant to Section 328 of the
   Code, because that Section effectively provides that the
   Court's approval of alternative compensation systems is
   subject to reconsideration only in extremely limited
   circumstances.

-- The Ninth Circuit's recent decision in Southern California
   Edison Co. v. Lynch, No. 01-56879, D.A.R. 11033 (September
   23, 2002) casts extreme doubt over the ability of the CPUC
   and the 0CC to confirm the Amended Competing Plan.  Indeed,
   the CPUC took the position that the effect of the Ninth
   Circuit's decision was to make the Amended Competing Plan and
   the PG&E Plan infeasible as drafted.

Accordingly, PG&E asks the Court to deny the Application:

(1) as a matter of law, because Warburg's connections and
    relationships with the Debtor constitute pervasive and
    continuing conflicts of interest, which will require the
    Court to deny compensation to Warburg under the provisions
    of Section 328(c) of the Code; and

(2) in light of the commercially untenable terms of the
    Engagement Letter, as well as the inappropriate alignment of
    interests between and among the Committee, the CPUC and
    Warburg, which the Engagement Letter would perpetuate.

                  Financial Creditors' Statement

Certain financial creditors comment on the Application: State
Teachers Retirement System of Ohio, the State of Tennessee, the
DC Water and Sewer Authority, Bankers Trust Company, Castlerigg
Master Investments, Ltd., Chandler Asset Management, Deutsche
Banc Alex, Brown, Inc., Franklin Mutual Advisers, LLC, King
Street Capital, M.H. Davidson & Co., L.L.C., OZF Management
L.P., Pacific Investment Management Company L.L.C., Satellite
Asset Management L.P., Security Benefit Life Insurance Co.,
Stark Investments and Appaloosa Management LP.

The Financial Creditors do not object UBS Warburg LLC's
retention, but take issue with certain terms in the Engagement
Letter.

Specifically, the Financial Creditors point out that the recent
Ninth Circuit Decision in Southern California Edison v. Lynch et
al. suggests that the tasks set forth in the Engagement Letter
should be revised.  This recent decision raises serious new
issues as to the feasibility of the Commission/Committee Plan.
The Financial Creditors raise the question, but does not take a
firm position, as to whether the tasks set forth in the
Engagement Letter should be revised to focus UBS Warburg's
efforts on the development of a confirmable plan, instead of
providing capital arrangement services for a plan that, given
the recent Southern California Edison decision, could be dead-
on-arrival.

The Financial Creditors reserve their rights regarding the
Conflict Issue because they have not had time to review the
ramifications of those relationships.

Furthermore, the Financial Creditors note that the Engagement
Letter for UBS Warburg is not consistent with applicable law and
customary practice.

Approval of the Application will have serious implications since
it is brought under Section 328 of the Bankruptcy Code.  If
approved, UBS Warburg's compensation will not be subject to a
subsequent review for its reasonableness under Section 330 at
the conclusion of the proceeding.

Certain terms of the Engagement Letter simply are unacceptable
to the Financial Creditors:

1. The Compensation of UBS Warburg As Proposed in the Engagement
   Letter

   The Financial Creditors, as active participants in the
   capital markets, do not object to the payment of a reasonable
   monthly fee to UBS Warburg, and do not object to a success
   fee in which UBS Warburg is compensated for creating real
   value for the Estate in this case.  But it appears to the
   Financial Creditors that the structure proposed in the
   Engagement Letter compensates UBS Warburg handsomely without
   requiring any concomitant benefit to creditors.  The
   Financial Creditors point out that, because a court must make
   a reasonableness determination based on the services
   performed by the professional, it is generally improper to
   authorize a success fee prior to completion of the
   engagement;

2. The Payment Terms of the Engagement Letter are Unprecedented

   In particular, the Financial Creditors note that:

   -- the Success Fees are not tied to a benefit to the Estate;

   -- it makes no sense to pay the substantial initial amount of
      $2,000,000 simply upon the execution of the Engagement
      Letter, particularly considering that UBS Warburg
      currently performs the same basic functions for the
      Commission;

   -- upon the delivery to the Proponents of a highly confident
      letter, which does not obligate UBS Warburg to underwrite,
      place or purchase any securities, UBS Warburg is to
      receive $6,000,000; the payment of this sizeable sum
      without conferring any tangible benefit on creditors does
      not appear to be justifiable;

   -- the delivery of a binding commitment is to be compensated
      by an additional Commitment Fee, which will be agreed to
      by the proponents and approved by the Court; and

   -- a Consummation Fee equal to $60,000,000 will be payable to
      UBS Warburg upon the occurrence of a Consummation
      Transaction.

  Should a compromise plan be agreed among the Debtor, CPUC, and
  the Committee, UBS Warburg conceivably could be entitled to a
  Consummation Fee even though it was not instrumental in
  bringing the settlement and compromise plan to fruition.  On
  the other hand, the Commission agrees not to become a co-
  proponent of any reorganization plan for the Debtor unless all
  plan proponents agree to UBS Warburg acting as the arranger
  for any financing in connection with the plan.  The Financial
  Creditors are interested in ensuring optimal flexibility for
  all parties so that this matter can be brought to a
  successful, negotiated conclusion.  To the extent that UBS
  Warburg's engagement as financing and capital markets arranger
  as provided by the Engagement Letter could hamstring the
  negotiation process and the emergence of the Debtor from
  Chapter 11 protection, the Financial Creditors object to it;

3. The Law Governing the Release of Third Parties

  The release provision contained in the Engagement Letter is
  also not unlike an indemnification provision for
  professionals.  In essence, both provisions protect
  professionals from the effects of their own negligence.  The
  Financial Creditors point out that, like releases, the
  indemnification of professionals is generally disfavored.

  The Financial Creditors remind Judge Montali that the Court
  sustained the U.S. Trustee's objection to the Debtor's
  indemnity agreement with Dresdner Kleinwort Wasserstein, Inc.
  as a professional in this case.  As a result, the
  indemnification provision in the DrKW employment was removed.
  Judge Montali reasoned that the professional should possess
  sufficient expertise and sophistication that it will not be
  negligent in the performance of its duties; if there is any
  doubt about that, it would be inappropriate for the estate to
  be prohibited from seeking compensation if it suffers as a
  result of such negligence.  The result should be no different
  with respect to UBS Warburg's engagement, the Financial
  Creditors assert.

  Furthermore, the Financial Creditors contend that the
  Committee and CPUC have also not demonstrated that they could
  not have obtained comparable services from UBS Warburg or
  another investment banker without having to agree to the
  release provisions; and

4. The choice of law and forum provisions of the engagement
  letter are inappropriate.

Should the Court deem it appropriate to permit UBS Warburg's
retention, the Financial Creditors assert that the retention
terms:

(1) be subject to further review pursuant to 11 U.S.C. Sec. 330,

(2) be limited to a reasonable monthly payment at this time,

(3) require that any success fee be awarded at the conclusion of
    the case for a real benefit conferred on the Estate,

(4) eliminate any release or indemnity at this time, and

(5) be subject to the jurisdiction of the Bankruptcy Court.

                           *     *     *

According to a Bloomberg news report, Judge Montali approved the
application.  As of press time, a copy of the Court order was
not yet available. (Pacific Gas Bankruptcy News, Issue No. 46;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


PEMSTAR INC: Lenders Relax Fin'l Covenants Under Credit Pacts
-------------------------------------------------------------
PEMSTAR Inc. (Nasdaq:PMTR), a leading provider of global
engineering, manufacturing and fulfillment services to
technology companies, has successfully reached agreements with
its senior secured lenders to amend its credit facilities,
effective September 27, 2002.

The amendment provides PEMSTAR with financial covenant relief
for the duration of its fiscal year ending March 31, 2003. The
financial covenants for the amendment were reset to assume
results consistent with PEMSTAR's prior guidance issued on July
24, 2002, for the fiscal second quarter ended September 30,
2002. PEMSTAR currently expects to release results in line with
prior guidance later this month.

PEMSTAR Inc. -- http://www.pemstar.com-- provides a
comprehensive range of engineering, manufacturing and
fulfillment services to customers on a global basis through
facilities strategically located in the United States, Mexico,
Asia, Europe, South America and the Middle East. The company's
service offerings support customers' needs from product
development and design, through manufacturing to worldwide
distribution and aftermarket support. PEMSTAR has over one
million square feet in 17 facilities in 15 locations worldwide.


PEREGRINE SYSTEMS: Tally Offers Transition Plan to Customers
------------------------------------------------------------
Offering a migration path to Peregrine customers cast adrift by
the company's recent bankruptcy announcement, Tally Systems
announced the Peregrine Transition Plan for customers of
Peregrine's Inventory Services (formerly know as the InfraTools
product line). The program offers Peregrine's Inventory Services
customers a copy of Tally Systems TS.Census asset tracking
software at the cost of one year of software maintenance for
TS.Census. The plan offers Peregrine customers the increased
stability and functionality of Tally Systems TS.Census and
ensures that they can continue to manage their IT assets in a
cost-effective way. Peregrine customers can also use TS.Census
along with AssetCenter and ServiceCenter through Peregrines'
established ConnectIt link.

"Peregrine customers have an opportunity to make some lemonade
out of lemons with this deal," said Tom Cecere, VP of Marketing
and Business Development at Tally Systems. "Migrating to
TS.Census does more than salvage their initial investment - it
creates an opportunity to rapidly implement a world-class asset
tracking system that has proven benefits in reducing the cost of
software licensing and improving management of hardware and
software assets, while plugging directly in to their existing
installations of AssetCenter and ServiceCenter."

                         Program Details

For all current Peregrine Inventory Services customers, Tally
Systems will offer a copy of TS.Census (at the same license
limit as their Peregrine product) at the annual TS.Census
software maintenance plan price. The migration offer expires
December 31, 2002. Peregrine customers interested in the
Peregrine Transition Plan should contact Tally Systems at (800)
262-3877, e-mail us at product.information@tallysystems.com or
visit or Web site at http://www.tallysystems.com

Tally Systems delivers innovative IT asset tracking solutions to
ensure effective technology investment and successful IT
projects. Tally Systems pioneered automated PC inventory over a
decade ago with its patented Census Recognition TechnologyT, and
continues to develop applications, services and integrations to
support critical IT initiatives such as migrations, software
license compliance and end user support. Tally Systems products
- including TS.Census, WebCensus, QuickCensus and PowerCensus -
have been licensed on over 10,000,000 PCs at 15,000 sites
worldwide Visit Tally Systems on the web at:
http://www.tallysystems.com


PG&E NATIONAL: Moody's Hatchets Senior Unsec. Debt Rating to Ba3
----------------------------------------------------------------
Moody's Investors Service lowered the debt and bank debt
facilities of PG&E National Energy Group, Inc.  Ratings are
under review for possible downgrade.

               Downgraded Ratings

       Rating Actions                       To        From

PG&E National Energy Group, Inc.

* Senior Unsecured Debt, Issuer Rating,
  and Syndicated Bank Credit Facilities;    B1         Ba2

* Senior Implied Rating                     Ba3        Ba1

     Ratings under review for possible downgrade

PG&E Gas Transmission Northwest (PGT)

      * Senior Unsecured Debt rated Baa2, Short-term rating for
        Commercial Paper at Prime-2

USGen New England, Inc.(USGenNE)

      * Pass-Thru Certificates and Syndicated Bank Credit
        Facilities rated Baa3

Attala Generating Company, LLC (Attala)

      * Senior Secured Debt rated Baa3

Indiantown Cogeneration, L.P.

      * Senior Secured Debt rated Baa3

Selkirk Cogen Funding Corp.

      * Senior Secured Debt rated Baa3

The rating action reflects the company's weak operating
performance, constrained cash flow, and tight liquidity. Moody's
is also doubtful of NGE's ability to extend its revolving credit
facility that expires on October 21, 2002.

Parent PG&E Corp. continues to explore options for the company
including business and asset sale, debt restructuring and
reorganization of operations.

PG&E National Energy Group, Inc., based in Bethesda, MD, is a
wholly-owned subsidiary of PG&E Corporation.


PG&E NATIONAL: Parent Comments on Recent Moody's Downgrade
----------------------------------------------------------
Moody's Investors Service lowered PG&E National Energy Group's
(PG&E NEG) credit rating from Ba2 to B1.

The company said the downgrade does not trigger any incremental
financial obligations at the Corporation or at PG&E NEG beyond
those associated with previous rating agency downgrades.

PG&E Corporation previously has disclosed that it continues to
explore options for PG&E NEG including sales of assets and
businesses, debt restructuring, and reorganization of existing
operations.

PG&E NEG is a wholly owned subsidiary of PG&E Corporation.


PHILIPS INT'L: Completes Sale of Sacramento Kmart Store for $6MM
----------------------------------------------------------------
Philips International Realty Corp. (NYSE-PHR), a real estate
investment trust, has completed the sale of its Kmart Shopping
Center on Northgate Boulevard in Sacramento, California for
approximately $5.9 million in cash.

Pursuant to the Company's plan of liquidation, its Board of
Directors has declared a fifth liquidating distribution of $0.50
per share which will be payable on October 22, 2002. The record
date is October 15, 2002. However, shareholders must continue to
own their shares up to and including October 22, 2002 in order
to be entitled to the liquidating distribution of $0.50 per
share. Effective October 11, 2002, the Company's shares will be
traded on the New York Stock Exchange with due bills which will
entitle the owner of the stock to receipt of the distribution.
The Company has approximately 7.4 million shares of common stock
and common stock equivalents which will participate in this
distribution.

On October 10, 2000, the stockholders approved the plan of
liquidation, which was then estimated to generate approximately
$18.25 in the aggregate in cash for each share of common stock
in two or more liquidating distributions. The fifth liquidating
distribution declared by the Board of Directors brings the total
payments to date to $ 15.75 per share. Prior distributions of
$13.00, $1.00, $.75 and $.50 per share were paid on December 22,
2000, July 9, 2001, September 24, 2001 and November 19, 2001,
respectively. The Company's three remaining shopping center
properties are currently being offered for sale.

Management expects that the New York Stock Exchange will
commence action to suspend trading and apply to delist the
Company's shares of common stock on the NYSE concurrent with
payment of the fifth liquidating distribution on October 22,
2002. If the Company's shares cease to be traded on the NYSE,
the Company believes that an alternative trading venue may be
available; however there can be no assurance that such an
alternative market will develop. If the Company is delisted from
the NYSE, the Company has no current intention to seek listing
of its common shares on any other securities exchange or on
NASDAQ.


PLANVISTA CORP: Will Publish Third Quarter Results on October 24
----------------------------------------------------------------
PlanVista Corporation (OTCBB:PVST) will release third quarter
earnings before the market opens on Thursday, October 24, 2002,
and will conduct a conference call later that morning at 10:00
a.m. to discuss Q3 2002 results.

The Company will make listen-only telephone conference lines
available for public access to the earnings call. The call-in
numbers will be 800/553-5275 for live access and 800/475-6701
for the recorded line. The recorded line will be available
through October 28 using access code 654764.

PlanVista Solutions is a leading health care technology and
product development company, providing medical cost containment
for health care payers through one of the nation's largest
independently owned full-service preferred provider
organizations. PlanVista Solutions provides network access,
electronic claims repricing, and claims and data management
services to health care payers and provider networks throughout
the United States. Visit the Company's Web site at
http://www.planvista.com

At June 30, 2002, Planvista Corp.'s balance sheets show a total
shareholders' equity deficit of about $20.7 million.


REFAC: Sells Product Development Business to Product Genesis
------------------------------------------------------------
Refac (REF:AMEX) announced the sales of its product development
business to Product Genesis, LLC, an affiliate of Product
Genesis, Inc. -- http://www.productgenesis.com-- a leading
product development and design firm for the technology and
medical devices industries.

The transaction, which closed on September 20, 2002, provides
for a variable purchase price based upon 2-1/2% of net revenues
with a maximum of $300,000. Refac recorded impairment charges in
the second quarter of 2002 relating to its product development
group aggregating $4,633,000 pursuant to SFAS 142 and 144, and
categorized this segment as a "Discontinued Operation".

As part of this transaction, Product Genesis also sublet 8,769
square feet of Refac's office space with a term commencing
November 1, 2002 and terminating November 15, 2009, the date
that Refac's lease for its premises terminates. As a result of
this sublease, commencing January, 2003, Refac's aggregate
monthly cash subleasing income from its three subtenants will
cover its monthly cash rent payment to its landlord. Refac still
has approximately 10,500 square feet of rentable space, which it
is trying to sublease, and it plans on relocating its offices to
smaller facilities.

On September 30, 2002, Refac completed the transfer of the
assets and liabilities of its subsidiary, Refac International,
Ltd., to Refac, excluding the capital stock of Refac Consumer
Products, Inc., (which manufactures a line of consumer
electronics products) and certain trademarks, patents and a
patent application relating to RCP's business. After such
transfers, Refac sold RIL to RCP Products, LLC, a limited
liability company established by a former employee, for $50,000
plus a variable purchase price based upon 2-1/2% of the revenues
received in excess of $1 million from the sale of its consumer
electronics products during the eight year period commencing
January 1, 2003, up to a maximum of $150,000 in any given
calendar year and a cumulative total of $575,000. Refac
categorized RCP's business as a "Discontinued Operation" in its
June 30, 2002 financial statements.

Refac acquired its Product Development Group in 1997 for $6
million and merged it into RIL in December 1998. The Company
expects to generate a capital loss from the sale of RIL which it
expects to be able to carry back against capital gain income
earned during the preceding three tax years. Nevertheless, no
assurance can be given as to whether or to what extent Refac
will derive any tax benefit from this carryback.

OXO's Assumption to Amendment to Royalty Agreement is Approved
by Bankruptcy Court. By Agreement, dated August 23, 2002, RIL
amended its royalty agreement with OXO International, a division
of World Kitchen, Inc.  The amendment was subject to the
approval of the court presiding over OXO's bankruptcy, and such
approval was obtained on September 20, 2002. Under the terms of
the amended agreement, Refac will receive $550,000 from OXO of
which $10,000 is for past due royalties; $180,000 is for
royalties for the six month period ending December 31, 2002 and
$360,000 is for royalties for the year ending December 31, 2003.
RIL is required to provide certain services, most of which have
already been performed and the remainder of which Product
Genesis has undertaken to complete. On September 27, 2002, prior
to the sale of RIL, this agreement and all monies due and to
become due under it were assigned to Refac.

Robert L. Tuchman, Refac's Chairman and CEO, reported that,
"With the transactions reported above, Refac has now disposed of
all of its operating segments with the exception of its
licensing business and it has limited the operations of that
segment to managing certain existing license agreements
(including its agreement with WKI) and related contracts. Today,
our assets principally consist of cash, government securities,
accounts receivable, notes receivable, contract rights
receivable, a claim for a tax refund and agreements related to
its licensing business and its real estate lease, all of which
are held by Refac. We no longer have any subsidiaries that are
active or hold any significant assets. We announced our merger
agreement with Palisade Concentrated Equity Partnership L.P. on
August 20, 2002 and are working to close the merger as soon as
practicable."

                           *   *   *

As reported in Troubled Company Reporter's May 1, 2002 edition,
Refac said that on April 26, 2002 its Board of Directors adopted
a Stockholder Rights Plan in which rights will be distributed as
a dividend at the rate of one Right for each share of common
stock, par value $0.10 per share, of the Company held by
stockholders of record as of the close of business on May 9,
2002.

Previous to that, the Company announced that it would reposition
itself for sale or liquidation. The adoption of the Rights Plan
should enhance the ability of the Company to carry out its plan
in a manner which would be fair to all stockholders.


RELIANCE GROUP: Court Approves IRS Claim Settlement Agreement
-------------------------------------------------------------
Reliance Group Holdings, Inc., and its debtor-affiliates
obtained Court approval of its Proposed Settlement Agreement
with the IRS, to resolve all disputes outlined in the IRS Proof
of Claim.  Although the settlement results in an agreed net tax
liability of $6,372,393, due to the expected receipt of a credit
for $23,000,000 and the effect of interest netting rules,
Reliance Group Holdings estimates that the net result of the
settlement will be a $14,000,000 refund.

                           The Settlement

The three cash flows of the Settlement:

    i) RGH will pay $11,278,409 for the 1988-1991 audit cycle;

   ii) RGH will receive a $4,761,409 refunds for the 1992-1994
       audit cycle;

  iii) RGH will receive a $144,115 refund for the 1995-1999
       audit cycle.

In each case, interest will be included at appropriate rates
prescribed by the Internal Revenue Code for overpayments and
underpayments of tax in a total amount that will be agreed upon
by RGH and the IRS.

                         The Audit Cycles

A) 1988-1991 Audit Cycle

The IRS proposed deficiency assessments for 1988-1991 of
$43,706,859 of net tax exclusive of interest.  RGH and the IRS
have agreed to settle this audit cycle for a tax deficiency of
$11,278,409, plus interest.  The major contested issues involved
in this cycle and the bases for settlement are:

      * Retro Debits: The IRS proposed adjustments for this
cycle by eliminating accrued retrospective premium balances from
the unearned premium reserve and including the amounts as
written premiums.  This increased premiums by 20% of the
reclassified balances with corresponding increases in taxable
income for each year involved.  This issue was settled on a
hazards-of-litigation basis, splitting the issue 75% in favor of
the taxpayer and 25% in favor of the Government.  This amounted
to a net increase in taxable income of $10,874,640.

      * Gain Recharacterization: The IRS proposed to
recharacterize a gain from the 1990 sale of the General Casualty
Companies, resulting in a net increase in taxable income of
$2,187,300.  The Government conceded this issue.

      * Unearned Premium Reserve Phase-In: In connection with
the sale of the General Casualty Companies, the IRS proposed to
accelerate the unearned premium reserve phase-in to 1990,
resulting in a proposed increased taxable income of $7,757,176.
The Government conceded this issue.

      * Statutory Premium Reserve: The IRS proposed to increase
the taxable income of Commonwealth Land Title Insurance Company
by $20,460,732.  This would conform the method of tax accounting
to the change made by Commonwealth Land Title in 1988 in
computing the Special Premium Reserve deduction for Annual
Statement purposes.  The Government conceded this issue.

      * Salvage Recoverable: The Debtor agreed to adjustments to
taxable income in favor of the Government, $490,930 for 1990 and
$478,255 for 1991 relating to computation of salvage recoverable
by Commonwealth Land Title for those years.

      * Unpaid Losses: The IRS proposed to increase the taxable
income of Commonwealth Mortgage Assurance Company by excluding,
as a losses-incurred deduction, unpaid losses for mortgage
guaranty insurance attributable to insured mortgage loans that
are in default, but for which the lender has not yet acquired
title to the property securing the loans.  The adjustment was a
proposed increase in taxable income of $6,069,650.  The
Government conceded this issue.

      * Phelps Dodge Dividends: The IRS proposed an adjustment
of $94,973 and $1,639,496 for 1989 and 1990, respectively,
pertaining to dividends received from Phelps Dodge.  This issue
was settled by an agreed increase in taxable income of $14,246
and $245,924 for 1989 and 1990, respectively.

B) 1992-1994 Audit Cycle

The IRS proposed deficiency assessments for 1992-1994 of
$34,629,213 of net tax exclusive of interest.  Although
calculations are not yet complete, RGH and the IRS have agreed
to settle this audit cycle for a $4,761,901 net refund, plus
interest.  The major contested issues involved in this cycle and
the bases for settlement are:

      * Retro Debits: The IRS proposed adjustments for 1992-1994
that would have resulted in a net increase to taxable income of
$3,076,348.  As in the prior cycle, this issue was split 75%
taxpayer and 25% Government.

      * Special Premium Reserve: The IRS proposed an increase in
taxable income of $35,451,011 for this cycle.  The Government
conceded this issue.

      * Increase in Capital Gain: The IRS proposed to increase
taxable income by $13,002,972 for 1992 as a result of a
transaction involving the F.B. Hall Company.  The Government
conceded this issue.

      * Loss on Sale of Subsidiary: The IRS proposed to disallow
a $60,726,070 loss in connection with the sale of United Pacific
Life Insurance Company.  The Government conceded this issue.

C) 1995-1999 Audit Cycle

The IRS proposed tax deficiencies for 1995-1999 of $22,783,030,
plus interest.  RGH and the IRS have agreed to a settlement for
these tax years for a net refund of $144,115, plus interest.
The major contested issues involved in this cycle and the bases
for settlement are:

      * Special Premium Reserve: The IRS proposed a total
increase in taxable income for this audit cycle of $51,000,000,
of which $37,000,000 was proposed for 1995.  The issue was
settled by keeping the total adjustment at $51,000,0000 but
spreading $35,000,000 of the 1995 adjustment over a four year
period beginning in 1995.

      * Software Costs Disallowance: The IRS proposed to
disallow a $7,000,000 deduction in 1995 and an additional
$12,000,000 in subsequent years relating to costs incurred in
designing and installing software systems.  This issue was
settled on a 50%/50% basis.

      * Retro Debits: This issue was settled on a 75% taxpayer
and 25% Government basis. (Reliance Bankruptcy News, Issue No.
30; Bankruptcy Creditors' Service, Inc., 609/392-0900)


ROHN INDUSTRIES: Will Commence Trading on Nasdaq SmallCap Monday
----------------------------------------------------------------
ROHN Industries, Inc. (Nasdaq: ROHN), a global provider of
infrastructure equipment for the telecommunications industry,
announced that effective at the close of trading on Friday,
October 11, 2002, the Company's common stock will cease trading
on the Nasdaq National Market and effective at the commencement
of trading on the following Monday, October 14, 2002, its common
stock will begin trading on the Nasdaq SmallCap Market.  The
Company's common stock will continue to trade under the symbol
"ROHN".

In addition, the Company announced that in light of the
information contained in its earnings releases and SEC filings
and its limited resources, it will no longer hold conference
calls with investors and others in connection with the release
of its quarterly and annual financial results.

ROHN Industries, Inc., is a leading manufacturer and installer
of telecommunications infrastructure equipment for the wireless
and fiber optic industries. Its products are used in cellular,
PCS, fiber optic networks for the Internet, radio and television
broadcast markets. The company's products include towers,
equipment enclosures, cabinets, poles and antennae mounts, as
well as design and construction services.  ROHN has
manufacturing locations in Peoria, Ill.; Frankfort, Ind.; and
Bessemer, Ala., along with a sales office in Mexico City,
Mexico.


SAFETY-KLEEN CORP: Wants to Settle with Carriers & Create Trust
---------------------------------------------------------------
Safety-Kleen Corporation and its debtor-affiliates ask Judge
Walsh to approve:

    (1) settlement agreements with certain of the Debtors'
        general liability carriers,

   (ii) the establishment of a qualified settlement trust
        to provide funds to pay for, among other things,
        costs and legal fees in connection with bodily
        injury, personal injury and property damage
        claims, and

  (iii) the Debtors' contributions of future settlement
        amounts into the Qualified Settlement Trust.

D. J. Baker, Esq., and J. Gregory St. Clair, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, in New York, and Michael W.
Yurkewicz, Esq., at Skadden Arps, in Wilmington, Delaware,
explain that in the course of the Debtors' operations from the
1960's to the present, third parties have, from time to time,
brought actions and asserted claims against the Debtors claiming
personal injury and property damage arising out of environmental
and other damage allegedly caused by the Debtors' business
operations.  To protect against liability for these claims, the
Debtors maintained comprehensive general liability coverage with
various insurers.  However, these various insurers disputed, and
some continue to dispute, whether or to what extent the
insurance policies provided coverage for third-party claims
arising from solvent recovery and product liability claims.  As
a result of these disputes, the Debtors brought two lawsuits:

      (1) The Solvents Recovery Service of New Jersey, Inc. et
          al v. American Reinsurance Company et al, pending in
          the Superior Court Of New Jersey, Hudson County; and

      (2) Safety-Kleen v. Continental, pending in the Superior
          Court of California, County of Los Angeles.

In the New Jersey Coverage Action, the Debtors seek coverage for
environmental liabilities under certain historical comprehensive
general liability insurance policies.  Specifically, the Debtors
contend that their general liability carriers are obligated to
pay the costs, expenses and liabilities arising out of claims,
demands and suits brought against the Debtors for property
damage, bodily injury, and personal injury arising out of
environmental and related damage caused by Safety-Kleen or
arising out of Safety-Kleen's business.

In the California action, the Debtors seek the same
determination for claims arising out of product liability toxic
tort suits, and claims and similar or related claims, losses and
liabilities asserted against the Debtors out of their
manufacture, distribution, sale or use of solvent products.

Rather than continue to litigate the complex legal and factual
issues in these suits, the Debtors want Judge Walsh to approve
the terms of these settlements reached with these Insurers:

    (1) Hartford Financial Services Group, Inc., set out in
        a Settlement and Release Agreement signed on
        September 2, 2002;

    (2) American Centennial Insurance Company, set out in a
        Settlement and Release Agreement signed August 5, 2002;

    (3) Westport Insurance Company, set out in a Settlement
        and Release Agreement signed on September 3, 2002; and

    (4) Continental Casualty Company, Fidelity & Casualty
        Company of New York, Columbia Casualty, and
        Continental Casualty and certain of their affiliates,
        set out in an Agreement of Settlement, Compromise and
        Release signed September 2, 2002.

The settlement terms are simple.  As part of the settlements,
the Settling Insurers agree to make settlement payments either
to Safety-Kleen, or to be deposited and maintained in the
Qualified Settlement Trust, in exchange for a release of the
Settling Insurers by Safety-Kleen and some of its subsidiaries
from the Insurers' obligations under the policies.

In turn, the Debtors seek Judge Walsh's permission to establish
the Qualified Settlement Trust for the benefit of the Debtors'
estates and creditors.  By establishing the Trust, funds will be
available in a segregated account to pay for, among other
things, costs and legal fees in connection with bodily injury,
personal injury, and property damage claims.  In addition, the
Debtors anticipate settling actions with other Insurers.  The
Debtors seek authorization now to contribute proceeds from these
other settlements into the Qualified Settlement Trust because of
the significant tax advantages provided by contributions into
the Trust.

Mr. Yurkewicz tells Judge Walsh that a Safety-Kleen Trust
Agreement was approved by the Superior Court of New Jersey Law
Division, Hudson County, which has retained continuing
jurisdiction over the trust in accordance with Section 468(B) of
the Internal Revenue Code. Therefore, the Trust qualifies as a
"Qualified Settlement Fund" within the meaning of the Treasury
Regulations.

                        The Settlement Agreement

The Debtors assure Judge Walsh that, before signing these
Settlement Agreements, they evaluated:

    (1) the relative strength of the parties' legal positions;

    (2) the likelihood that the Insurance Policies would be
        implicated to cover third-party claims;

    (3) the extent that the Insurance Policies covered asserted
        and potential claims; and

    (4) the costs and risks associated with continued litigation
        of the coverage claims.

As a result of negotiations and this evaluation, the Debtors
concluded that a consensual resolution of the coverage claims
was the best option.  The aggregate payments under the
Settlement Agreements will be $8,725,000, of which $5,900,000
will be deposited into the Qualified Settlement Trust.

The most significant terms and conditions of these Settlement
Agreements are:

(1) The Hartford Settlement:

     (a) Settlement Amount.  Hartford will pay Safety-Kleen
         $2,000,000 by check or draft made payable to
         the Safety-Kleen Settlement Trust;

     (b) Effective Date. The date there is a final order
         approving the Hartford Settlement;

     (c) Dismissal from New Jersey Coverage Action.  Within
         7 days of receipt of the Settlement Amount, Safety-
         Kleen will seek dismissal with prejudice of its
         complaint against Hartford in this action;

     (d) Dismissal from California Coverage Action.  Safety-
         Kleen will dismiss without prejudice its complaint
         against one of the Hartford companies (First State
         Insurance Company) in this action that asserted
         claims for coverage for product liability suits under
         three excess policies issued by First State;

     (e) Mutual Releases.  The parties will sign mutual
         releases;

     (f) No Admission of Liability.  Execution and delivery of
         the Hartford Settlement is not an admission of any
         liability on the part of any party; and

     (g) Indemnification.  Safety-Kleen will indemnify Hartford
         with respect to:

            (i) Safety-Kleen's total defense and indemnification
                obligations with respect to certain Rollins
                policies will be capped at $36o8,199.00;

           (ii) Safety-Kleen's total defense and indemnification
                obligations with respect to solvent suit
                liability will be limited to the pro rata
                amount allocated to the Hartford insurance
                policies; and

          (iii) to the extent non-solvent suits or claims
                may arise under Hartford policies, other
                than the Rollins Policies, Safety-Kleen
                will be obligated to defend and indemnify
                Hartford with respect to these claims.

(2) The American Centennial Settlement:

     (a) Settlement Amount.  American Centennial will pay
         Safety-Kleen $75,000 within 30 days after Judge
         Walsh's approval of the American Centennial
         Agreement and the expiration of the deadline to file
         any appeals from that approval;

     (b) Dismissal from New Jersey Coverage Action.  Within 10
         days after payment of the Settlement Amount, Safety-
         Kleen will prepare and file the necessary court papers
         to dismiss American Centennial from the New Jersey suit
         with prejudice;

     (c) Mutual Releases.  The parties will exchange releases;
         and

     (d) Indemnification Obligation.  Safety-Kleen and its
         insured affiliates under the American Centennial
         policies will indemnify American Centennial for any
         actions against American Centennial under the
         insurance policies up to the settlement amount,
         plus simple interest accrued at the rate of 5% per
         annum from the date of notification of any claim.

(3) The Westport Agreement:

     (a) Settlement Amount.  Westport will pay to the Qualified
         Settlement Trust $100,000 within 30 days of a final
         order approving the Westport Agreement;

     (b) Dismissal from the New Jersey Coverage Action.  Safety-
         Kleen will seek dismissal with prejudice of its
         complaint against Westport in the New Jersey Coverage
         Action;

     (c) Mutual Releases.  The parties will sign mutual
         releases;

     (d) No Admission of Liability.  Signature and delivery of
         the Westport Agreement is not an admission of any
         liability by any party; and

     (e) Indemnification Obligation.  The Qualified Settlement
         Trust will indemnify Westport up to the settlement
         amount with respect to any claims made against Westport
         policy.  In the event that the Qualified Settlement
         Trust is terminated in accordance with its terms or
         fails in its essential purpose, then Safety-Kleen
         will assume the obligations of the Qualified Settlement
         Trust for indemnification.

(4) The CNA Agreement:

     (a) Settlement Amounts.  CAN will pay up to the aggregate
         amount of $6,550,000 comprised of:

          (i) $3,850,000 to the Qualified Settlement Trust, and

         (ii) up to $2,700,000 to Safety-Kleen in future
              coverage;

     (b) Payment Schedule.  Within 30 days after issuance of a
         final un-appealable order approving the CNA Agreement,
         CNA will pay $1,700,000 into the Qualifying Settlement
         Trust.  Within 120 days of that final order, CNA will
         pay an additional $2,150,000 into the Trust.  In
         addition, CNA will pay 15% of all costs and expenses,
         including defense and investigation costs for trial
         counsel, national counsel and expert witnesses,
         associated with solvent suits, with payments beginning
         no earlier than January 1, 2003, extending for 6
         consecutive annual periods up through and including
         December 31, 2008; provided, however, that CNA's total
         obligation for costs will not exceed:

            (i) $450,000 in any one annual period; and

           (ii) $2,700,000;

     (c) Mutual Releases.  The parties will exchange releases;

     (d) No Admission of Liability.  Signature and delivery of
         the CNA Agreement is not an admission of any
         liability by any party;

     (e) Dismissal from California Coverage Action.  Safety-
         Kleen will dismiss without prejudice its claims
         for coverage under certain excess policies issued
         by one of the CNA companies for product liability
         suits under in this action; and

     (f) Indemnification Obligation.  The Qualified Settlement
         Trust will indemnify and defend CNA under the CNA
         policies and will pay on behalf of CNA up to the
         settlement amount.  In the event that the Qualified
         Settlement fails to qualify or fails in its purpose,
         then Safety-Kleen will assume the obligations of the
         Qualified Settlement Trust for indemnification.

                      The Qualified Settlement Trust

The salient terms and conditions of the Qualified Settlement
Trust are:

(a) Purpose.  The purposes of the Qualified Settlement Trust
    are:

     (1) The provision of funds which may be used to pay
         for costs incurred by the Debtors in connection with
         claims, suits and demands alleging personal injury,
         bodily injury, and property damage claims;

     (2) The provision of funds to be used to pay the legal
         fees of the Debtors and costs in conjunction with
         litigation and other legal proceedings, including
         administrative proceedings, arising from claims;

     (3) The provision of advances to pay for legal fees and
         settlement cost claims asserted against the Debtors
         pending reimbursement or indemnification by other
         responsible parties, including insurers of Safety-
         Kleen;

     (4) The provision of payment for certain contingent
         obligations to some of the Settling Insurers under
         the Settlement Agreements; and

     (5) To do all things necessary or appropriate in these
         connections;

(b) Trustee:  James K. Lehman;

(c) Duration.  The Qualified Settlement Trust will remain in
    existence for a period of 20n years from the date of its
    creation, or until such other earlier date as the Trust
    is exhausted or otherwise terminated;

(d) Payment of Indemnity Obligation.  The Trustee is authorized
    to distribute all or any portion of the Trust, to the
    extent required under the Settlement Agreements, to satisfy
    indemnification obligations under the terms of the
    Settlement Agreements; and

(e) Indemnification.  The Debtors will indemnify and hold
    harmless the trustee (and any successor trustee) from and
    against any and all losses, liabilities, claims, actions,
    damages, and expenses arising out of and in connection with
    the Qualified Settlement Trust.

Mr. Yurkewicz assures Judge Walsh that approval of these
settlement agreements will eliminate the need for further
coverage-related litigation with Settling Insurers within the
scope of the Agreements. (Safety-Kleen Bankruptcy News, Issue
No. 46; Bankruptcy Creditors' Service, Inc., 609/392-0900)


SAMSONITE: S&P Cuts Corp. Credit & Sr. Sec. Rating to B- from B
----------------------------------------------------------------
Standard & Poor's lowered its corporate credit and senior
secured debt ratings on luggage manufacturer Samsonite Corp., to
single-'B'-minus from single-'B'; its subordinated debt rating
to triple-'C' from triple-'C'-plus; and its preferred stock
rating to triple-'C'-minus from triple-'C.'

The ratings were also placed on CreditWatch with negative
implications.

Samsonite had about $430 million of debt and almost $300 million
of preferred stock outstanding at July 31, 2002.

"The downgrade and CreditWatch listing follows Standard & Poor's
heightened concern relating to Samsonite's ability to improve
its financial profile now that Artemis S.A., which currently
owns approximately 30% of Samsonite's common stock, has
withdrawn its proposal to participate in a deleveraging
transaction of the company," said Standard & Poor's analyst Jean
C. Stout.

What's more, Standard & Poor's remains concerned with
Samsonite's ability to improve its cash flows sufficiently in
order to meet its upcoming financial obligations, including
interest payments on its subordinated debt and future debt
maturities, as well as expected required pension plan
contributions. In addition, the company has a large layer of
preferred stock that accretes at 13.875% and becomes cash pay
after June 15, 2003, otherwise the dividend rate will increase
by 2%. This factor has created a growing liability on
Samsonite's balance sheet with the need to make cash payment of
dividends putting additional pressure on future cash flow
coverage measures.

While Samsonite had about $16 million in cash and about $54
million available under its revolving credit facility as of July
31, 2002, its operating performance and credit protection
measures have remained weak. This is largely a result of the
lingering effects on travel and travel-related businesses after
the Sept. 11 attacks, as well as the weak economy.

Standard & Poor's will continue to monitor developments,
including the company's ability to proceed with a potential
deleveraging transaction by the end of the year and its ability
to refinance its bank facilities, which mature in June 2003.

Denver, Colorado-based Samsonite is a leading global provider of
luggage, casual bags, business cases, and travel-related
products.


SC FUNDING: Fitch Affirms BB Rating on Class D P-T Certificates
---------------------------------------------------------------
SC Funding Corporation's commercial mortgage pass-through
certificates, series 1993-1, $3.5 million class A-1, $2.9
million class A-2, the $8.6 million class B and interest only
class I certificates are affirmed at 'AAA' by Fitch. In
addition, the $8.6 million class C is affirmed at 'A' and the
$12.1 million class D at 'BB'. Fitch does not rate the $22.4
million class E certificates. The rating affirmations follow
Fitch's annual review of the transaction, which closed in
November 1993.

The certificates are secured by 14 commercial mortgage loans on
nursing home facilities. The properties are located in eight
different states with significant concentrations in Colorado
(26%), Florida (24%), Michigan (16%), and Washington (10%). The
collateral consists of three separate pools with certain cross-
collateralization and cross-default provisions. The Life Care
pool (52%) is operated by Life Care Centers, while the
Kelletts/Convalescent pool (31%) and the Regency Health Care
pool (17%) are operated by Mariner Post Acute Network (MPA). MPA
emerged from Chapter 11 bankruptcy in March 2002. Twelve loans
(82%) are scheduled to mature in October 2003.

As of the September 2002 distribution date, the transaction's
aggregate certificate balance had declined 66% to $58.2 million.
Currently, all loans are in special servicing. None of the loans
are currently delinquent. Operating performance for the
trailing-twelve months ended March 31, 2002 was available for
all the properties securing the transaction. Based on this
information, the weighted-average debt service coverage ratio
for the TTMs ended March 31, 2002 was 1.0 times, compared to
1.19x during the 2001 annual review and 2.02x at origination.
Without taking into account the crossed nature of the loans, six
loans (49%) had a TTMs ended March 31, 2002 DSCR below 1.0x. One
of the three cross-collateralized and cross-defaulted loan
groups (17%) had a WA DSCR below 1.0x.

Currently, the special servicer, National Health Investors, is
managing all the assets in the transaction. The Life Care pool
was transferred to NHI in May 2002 because three of the eight
properties in the pool failed to meet DSCR covenant in the loan
documents. For the TTMs ended March 31, 2002 these three loans
had a DSCR below 1.0x, compared to DSCRs in excess of 1.82x for
the remaining loans in the Life Care pool. As required by the
loan documents, the borrower recently posted additional
collateral in the form of a letter of credit and NHI expects to
transfer the pool to the master servicer shortly. The
Kelletts/Convalescent pool and the Regency Health Care pool were
transferred to NHI in February 2000 following MPAs Chapter 11
bankruptcy filing. Both pools remain in special servicing due to
continued credit concerns despite MPA's emergence from BK.
Through June of 2002, MPA was not making debt service payments
on the two loans where it is the borrower and operator.

The year-to-year decline in the transaction's WA DSCR generally
reflected the following factors: rising professional liability
insurance costs, rising labor costs, and in some cases, weak
collection of account receivables. It seems that most of the
underperforming facilities are taking steps to keep these costs
under control.

Despite the weakening performance of the transaction, Fitch has
affirmed the ratings given the level of credit enhancement
available to the outstanding classes. Currently, the 'AAA' rated
classes and the 'A' rated class benefit from 74% and 59%
subordination, respectively. These high credit enhancement
levels reflect the significant paydown and amortization of the
transaction. Fitch is concerned, however, by the upcoming
maturity of a significant portion of the transaction. There are
12 loans (84%) that are scheduled to mature in October 2003.
Currently five of these loans (40%) have a DSCR below 1.0x.
Fitch will be carefully monitoring the status of these loans as
their maturity date approaches.

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


SHELBOURNE PROPERTIES: Selling Melrose Park Assets for $5.5 Mil.
----------------------------------------------------------------
Shelbourne Properties II, Inc. (Amex: HXE), and
Shelbourne Properties III, Inc. (Amex: HXF) have each entered
into a contract to sell their respective properties located in
Melrose Park, Illinois commonly referred to as Melrose Park-
Phase I (Shelbourne II) and Melrose Park-Phase II
(Shelbourne III) for an aggregate purchase price of $5,500,000
($3,300,000 for Phase I and $2,200,000 for Phase II).  The
purchase price, exclusive of closing costs, will be paid in cash
(a minimum of $600,000 to Shelbourne II and $400,000 to
Shelbourne III) and by delivery of two notes, one to each of the
Shelbourne REITs for the balance of the purchase price.  The
notes will mature on the first anniversary of their making
(subject to a one-year extension), shall bear interest at 7% per
annum and be secured by both phases of the Melrose Park
property.  It is anticipated that the sale of this property will
occur during the first quarter of 2003.

The Board of Directors of each of the Shelbourne REITs has
previously approved a plan of liquidation for each REIT.  Those
plans are to be voted on at special meetings of stockholders
scheduled to be held on October 29, 2002.

For additional information concerning the proposed liquidation
including information relating to the properties being sold
please contact Andy Feinberg at (617) 570-4620 or John Driscoll
at (617) 570-4609.


TECSTAR: Wants to Stretch Exclusivity Until December 4
------------------------------------------------------
Don Julian, Inc., f/k/a Tecstar, Inc., and its debtor-affiliate
ask the U.S. Bankruptcy Court for the District of Delaware for
more time propose a chapter 11 plan.  The Debtors ask the Court
to extend their exclusive period during which to file a plan
through December 4, 2002, and ask for a concomitant extension of
the time in which they have the exclusive right to solicit
acceptances of that plan through February 3, 2003.

The Debtors tell the Court they have, in fact, developed a plan
to maximize recovery through the liquidation of the Debtors'
assets.  The Debtors have maintained communication with the
secured lenders and the Unsecured Creditors' Committee and have
reached consensus on almost all of the key issues.

Further, the Debtors tell the Court that they have drafted a
proposed disclosure statement and plan, which they anticipate
will be completed and filed within the 60-day extension period
they are requesting.  The Debtors tell the Court that they will
be in a better position to complete the plan only after reaching
full agreement with the secured lenders and the Committee
relative to the terms of the Plan. Any competing plan, the
Debtors point out, would needlessly deflect the attention of the
Debtors and other interested constituencies.

Tecstar, Inc., manufactures high-efficiency solar cells that are
primarily used in the construction of spacecraft and satellite.
The Company filed for chapter 11 protection on February 07,
2002. Tobey M. Daluz, Esq., at Reed Smith LLP and Jeffrey M.
Reisner at Irell & Manella LLP represent the Debtors in their
restructuring efforts. When the company filed for protection
from its creditors, it listed assets of over $10 million and
debts of over $50 million.


TELERGY INC: Michael Fox Completes Auction for Remaining Assets
---------------------------------------------------------------
Michael Fox International, a GoIndustry company and one of the
largest asset management and disposition firms in the world, has
just completed one of the largest, most complex auctions in the
company's 56-year history.

On Sept. 24, MFI liquidated more than 4,000 items, which
represented the remaining assets of the bankrupt telecom company
Telergy.  The spectacular two-day auction included one
auctioneer taking bids from participants in four locations all
connected by a live audio and video feed as well as a real-time
webcast in order to handle the more than 2,500 on-site and on-
line attendees.

Nearly every item remaining at the Syracuse, N.Y.-based site was
auctioned, from 23 spare truck tires and 40 assorted
wastebaskets to a state- of-the-art computer server network and
Telergy's 115,800-square-foot headquarters building.  The
building was sold for $4 million.

Telergy, founded in 1995, built fiber-optic communications
networks.  The company, which once employed 615 people, filed
for bankruptcy in December. Telergy's plush headquarters and
top-of-the-line computer equipment reflects the company's early
success.

Auction items included:

     --  Plush leather couches, executive arm chairs and
         polished mahogany conference tables

     --  Rear and front projection screens and an 8-by-11-foot
         "JumboTron"-style LED display

     --  Plasma and flat screen TVs and numerous DVD and VCR
         players

     --  More than 500 computers

     --  Complete data center and network switching equipment

     --  Mahogany bar, bar stools and tables

"We can honestly say that in 56 years of business handling
literally thousands of auctions, we have never seen anything
like this," said David Fox, CEO of Michael Fox International.
"The quality of the items being auctioned, the variety of items
and the sheer number of lots -- over 4,000 -- made the Telergy
auction a spectacular public event."

Logistics for the auction took MFI staff nearly three months to
organize. Because of space limitations and an overwhelming
participation by bidders, the auction had to be split into four
locations, the building's main lobby, outside of the facility,
at a nearby hotel and via the Internet.  With one auctioneer,
all 4,000 items had to be presented simultaneously to the more
than 2,500 bidders at all of the sites and online.  Live video
and audio feeds connected the three "live" groups, while a real-
time MFI webcast connected online bidders.

In all, more than 1,500 people purchased items.  The bidders
ranged from telecommunication executives to individuals who
hoped to pick up a laptop computer or leather chair at an
auction price.

The crowd swelled so much before the auction even began that MFI
officials were forced to turn bidders away from the on-site
locations and encourage them to participate off-site at the
hotel or via the web.

"The auction was to be completed in one day, but due to the size
of the crowd, the number of lots being sold and the space
constraints, we could not sell everything in a single day," said
MFI auctioneer David Fiegel.

Michael Fox International Inc., is the United States leader in
the liquidation, auction and appraisal of machinery and
equipment, inventories, business assets, and real estate.  Part
of the GoIndustry Group, one of the world's largest industrial
asset sales and service organizations, with over 240 employees
in 16 countries and 31 offices, MFI offers North American
service with global reach.  Serving the corporate, financial and
legal communities, MFI provides asset disposition systems and
services that can be tailored to the unique needs of each
client.  Not only is MFI an expert in traditional auctions, but
it also has the world's leading web-based asset management and
disposition system.  MFI's unique technology enables it to sell
assets via Intranet or Internet using web-based and webcast
sales.  MFI was founded in Baltimore, Maryland, in 1946 by
Michael Fox.


TELEMAIS TELECOM: Board Approves 1-For-20 Reverse Stock Split
-------------------------------------------------------------
Telemais Telecom Inc. (OTC:TMTU), a telecommunications company
with licenses to provide voice, data and Internet services in 69
municipalities in the wealthy southern region of Brazil,
announced that its board of directors has authorized a one-for-
twenty reverse stock split.

Effective, October 11, 2002, the Company's common shares will
commence trading on a twenty-for-one reverse split basis. Under
the terms of the reverse split, 20 shares of common stock will
be exchanged for one share of new common stock. The Company's
stock will trade on a post-split basis under the new trading
symbol of "TLMT".

"After a difficult and disappointing first five months for
Telemais as a public company, The Board of Directors deems a
reverse split as an essential initiative for the long term
health of the Company and its shareholders," said Charles
Frewen, recently appointed President of Telemais Telecom. "Our
goal is to emerge from this market downturn and from our capital
restructuring efforts as a viable, healthy telecommunications
company."

Telemais is a telecommunication company poised to launch voice,
data and Internet services in Brazil using a unique network
configuration from a proven supplier that changes the market
dynamic for Local Loop service providers. With licenses in 69
municipalities in the southeast and southern region of Brazil,
Telemais can provide local, long distance and international call
termination as well as voice and data via wired or wireless
connections. Selection of these towns was based on high demand,
higher than average disposable income and lower than average
penetration of telephone service. The Telemais licenses are in
the four most southern and wealthiest states of Brazil. Telemais
currently trades over-the-counter under the symbol TMTU.

To visit Telemais on the Web go to http://www.telemais.com.br


TELEVIDEO: Receives Term Sheet for Homebound's Proposed Merger
--------------------------------------------------------------
TeleVideo, Inc (OTCBB:TELV.OB), a leader in the development and
manufacturing of thin client hardware and software, received a
term sheet for the proposed merger of Homebound Acquisition,
Inc., a Delaware corporation controlled by Dr. K. Philip Hwang
(TeleVideo's chief executive officer, chairman of the board and
majority stockholder), with and into TeleVideo, Inc. Following
the proposed merger, TeleVideo would be delisted and would
continue operations as a privately held corporation.

Under the terms of the proposed merger, Homebound Acquisition,
Inc., would pay $0.0525 in cash, without interest, for each
outstanding share of TeleVideo's common stock (other than any
shares owned by Dr. K. Philip Hwang). The aggregate value of the
proposed transaction is approximately $220,000.

TeleVideo's board of directors has approved the creation of a
special committee, comprised of two independent directors, to
evaluate the proposed transaction. The special committee has
retained special counsel, and is in the process of engaging
investment bankers, to advise it concerning the proposed
transaction, which is subject to the negotiation of definitive
agreements and the approval of TeleVideo's board of directors
and its stockholders.

A pioneering Silicon Valley company, TeleVideo, Inc.,
(OTCBB:TELV.OB) began in 1975 as the innovator and market leader
of smart text terminals. Today, TeleVideo continues to be
innovative by developing Windows-Based Thin Client hardware and
software solutions for corporate and vertical IT professionals
and end-users. TeleVideo's family of TeleCLIENT products allows
for secured, manageable and cost-effective network computing.
For more information, please visit http://www.televideo.com

Televideo's July 31, 2002 balance sheets shows a total
shareholders' equity deficit of about $319,000.

Homebound Acquisition, Inc., is a Delaware corporation formed by
Dr. K. Philip Hwang, TeleVideo's chief executive officer,
chairman of the board and majority stockholder.


UNIVIEW TECHNOLOGIES: Grant Thornton Issue Going Concern Opinion
----------------------------------------------------------------
uniView Technologies Corporation and its subsidiaries offer
enhanced digital media solutions to customers worldwide.  Its
digital media devices enable the delivery of the highest quality
video, audio and gaming features through the Internet to a
television set.  The Company offers contact center customer
service solutions through CIMphony[TM], a suite of computer
telephony integration (CTI) software products and services.
CIMphony facilitates communication between a customer service
representative and their customer by allowing contact centers to
customize and incorporate voice, data and Internet
communications into their customer interactions.

uniView markets its products and services to hospitality,
utility, banking and telecommunication  companies.   Due to the
open architecture of its products, they can be readily
customized to a  specific customer's requirements.  This feature
is not limited by geographical boundaries and its products can
be configured for international customers, as well as domestic.

The Company was incorporated in Texas on July 13, 1984.   It
filed an S-18 registration statement in  November 1984 and
completed the registered offering in January 1985.  In 1996
uniView introduced its  first uniView[R] digital media device
(set top box), which enables the display of Internet content on
a television.   In 1998 the Company acquired Network America,
which is a full-service infrastructure  provider of design and
cabling services for high-speed voice/data networks in multiple
environments.   In 1999 the Company added CTI capabilities to
its product offerings with full-scale customized  call center
solutions.  In 2002 it acquired a majority-owned subsidiary,
uniView Asia Limited, based in Hong Kong, which it plans to use
as its base of Asian operations and for other business
opportunities in Asia.

Total revenues for fiscal year 2002 decreased to $5.37 million,
as compared to $9.33 million in 2001.  Revenues for fiscal year
2002 are primarily comprised of revenues from the sale of CTI
products and  support services provided by uniView Softgen, as
well as revenues from infrastructure design and cabling services
provided by Network America.

Gross margin for fiscal year 2002 was $3.11 million, as compared
to $4.35 million for 2001.   As a percentage of total revenue,
gross margin increased to 58% in fiscal year 2002, compared to
46.6% in the previous year.  The increase as a percentage of
revenue can be attributed to focusing resources on opportunities
at uniView Softgen and Network America that yield better
margins, as well as to the sale of the source code license to
HSBC.

Cash and cash equivalents at June 30, 2002 were $724,000
compared to $581,000 at June 30, 2001.   Although cash used in
operations decreased substantially over the past year,
uniViewdid not achieve a positive cash flow from operations. Its
plan to reach profitability includes (a) further reduction of
general and administrative expenses, (b) maintenance of its
higher gross margin percentages by  continuing to emphasize
services over product sales, and (c) increased sales of both
products and services in the Asian market through its
subsidiary, uniView Asia Limited.  The Company also  expects to
continue generating revenues from its cabling operations at
Network America, licensing its  digital media technology,
selling digital media devices, and providing CTI services, as
well as  selling other source code licenses of its CTI
technology.  Under this plan, the Company believes that it will
be able to generate sufficient funds to provide it with adequate
liquidity and capital for the next twelve  months.   If unable
to do so from operations, additional financing or equity
placements may be necessary.   uniView has in the past relied on
available borrowing arrangements and sales of its common and
preferred stock to supplement operations.   However,  outside
financial resources may not continue to be available to it or
may not be available on favorable terms.

In September 2002 uniView's securities were delisted from the
NASDAQ SmallCap Market[SM] and are now  traded on the OTC
Bulletin Board.

Grant Thornton, LLP, of Dallas, Texas, September 3, 2002, has
said of the Company's financial condition:  "[T]he Company
incurred net losses of $2,733,434, $6,622,458, and $10,863,875
for the years ended June 30, 2002, 2001 and 2000, respectively.
These factors, among others, raise substantial doubt about the
Company's ability to continue as a going concern."


US AIRWAYS: Gets Go-Signal to Hire Ordinary Course Professionals
----------------------------------------------------------------
US Airways Group Inc., and its debtor-affiliates obtained the
Court's authority to employ the Ordinary Course Professionals
pursuant to Sections 105(a) and 327 of the Bankruptcy Code, and
compensate them for services rendered, without additional Court
approval.

The Debtors propose to pay, without formal application to the
Court, 100% of the postpetition interim fees and disbursements
to each Ordinary Course Professional when an invoice is
submitted providing reasonable detail of the services rendered.
The interim fees and disbursements should not exceed $40,000 per
month per Ordinary Course Professional.  All payments to
Ordinary Course Professionals will become subject to approval
upon application to the Court for allowance of compensation and
reimbursement of expenses pursuant to Sections 330 and 331 of
the Bankruptcy Code if the payments exceed $40,000 per month.

Excluding Key Ordinary Course Professionals, the Debtors
anticipate that the total fees paid to Ordinary Course
Professionals will be between $450,000 and $550,000 per month.

At the present time, the Debtors employ two Key Ordinary Course
Professionals that may receive over $40,000 per month:

    (a) Fried, Frank, Harris, Shriver & Jacobson, and

    (b) Groom Law Group.

When the fees payable to a Key Ordinary Course Professional
exceed the $40,000 monthly limit, on the month following the
invoice, the firm will submit a monthly statement for additional
compensation to:

    * US Airways Group, Inc.
      2345 Crystal Drive
      Arlington, VA 22227
      Attn: Michelle V. Bryan

    * Skadden, Arps, Slate, Meagher & Flom (Illinois)
      333 West Wacker Drive, Suite 2100
      Chicago, Illinois 60606
      Attn: John Wm. Butler, Jr.

    * McGuireWoods LLP
      1750 Tysons Boulevard, Suite 1800
      McLean, Virginia 22102-4215
      Attn: Lawrence E. Rifken

    * The United States Trustee
      115 South Union Street, Plaza Level, Suite 210
      Alexandria, Virginia 22314

    * Counsel to the Debtors' postpetition lenders

    * Counsel to any official committee formed in these cases

These parties will have 20 days to review the Monthly Statement
and object to the fees requested by the Key Ordinary Course
Professionals.  If any of the Parties object, then the Key
Ordinary Course Professionals will be required to submit a
formal application to the Court.

Furthermore, the Debtors obtained the Court approval to exempt
Ordinary Course Professionals from submitting separate
applications for proposed retention.  Instead, the Debtors
propose that each attorney Ordinary Course Professional will
file with the Court and serve upon the Parties an Affidavit. (US
Airways Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


US INDUSTRIES: Expects to Close Sale of SiTeco Within the Month
---------------------------------------------------------------
U.S. Industries, Inc., (NYSE-USI) now expects the sale of its
European lighting division, SiTeco, to funds advised by JPMorgan
Partners, the private equity arm of JPMorgan Chase & Company, to
occur in the second half of October.

The Company also said that it is in discussions with its lenders
and expects to receive a waiver to address the scheduled October
15, 2002 amortization requirement under its credit facilities.

USI separately announced today an amendment and extension of its
offer to exchange all of its outstanding 7-1/8% Senior Notes.

USI previously announced that it has received agreement from
lenders holding a majority of the commitments under its senior
bank facilities to extend the maturity of its bank debt, which
is subject to customary conditions including the execution by
100% of the lenders under USI's senior bank facilities of final
documentation providing for the extension. The amendment will
extend the maturity date of the bank debt from November 30, 2002
to October 1, 2003 with a further automatic extension to October
4, 2004 if the exchange offer is successful. Under the extended
facilities, the interest rate for LIBOR-based borrowings will
start at LIBOR plus 4.75%; then increase to LIBOR plus 6.75% on
the earlier of completion of the exchange offer or November 30,
2002; then increase to LIBOR plus 7.25% on July 1, 2003 and
increase an additional .5% quarterly thereafter.

U.S. Industries owns several major businesses selling branded
bath and plumbing products, along with its consumer vacuum
cleaner company. The Company's principal brands include Jacuzzi,
Zurn, Sundance Spas, Eljer, and Rainbow Vacuum Cleaners.


US INDUSTRIES: Extends Exchange Offer for 7-1/8% Notes to Nov. 1
----------------------------------------------------------------
U.S. Industries, Inc., (NYSE-USI) announced that its offer to
exchange all of its outstanding 7-1/8% Senior Notes due 2003 for
consideration consisting of cash and new notes due 2005 and
related consent solicitation, originally launched on September
9, 2002, has been extended until November 1, 2002.

USI has also amended the terms of the exchange offer and consent
solicitation as follows:

    Terms of 05 Notes. The 05 Notes will bear interest at a rate
of 11-1/4% per annum.

    Amendments to Indenture. The supplemental indenture will
provide that (1) USI will redeem the 05 Notes at par to the
extent the balance allocable to the 05 Notes in the cash
collateral account equals or exceeds 10% of the outstanding
principal amount, (2) USI may redeem the 05 Notes at par with
the cash in the cash collateral account at any time and (3) the
05 Notes will be redeemable at the discretion of USI at the
following percentages of the principal amount redeemed:

     --  103% until the first anniversary of the date the 05
         Notes are issued

     --  102% until December 31, 2004

     --  101% thereafter until maturity

    The Indenture will also be amended to permit payment of the
consideration in this and future exchange or tender offers.

    Consent Payment. Each holder who validly delivers its
consent in the exchange offer by the Consent Date (see below)
will receive a cash payment in the amount of 1.5% of the
principal amount of the 05 Notes issued to it in exchange for
its 03 Notes at the consummation of the exchange offer.

The exchange offer, previously scheduled to expire at 12:00
midnight, New York City time, on October 4, 2002, will now
expire at 12:00 midnight, New York City time, on November 1,
2002 unless extended or terminated by USI. The Consent Date is
12:00 midnight, New York City time, on the later of October 18,
2002 or the date on which holders of a majority in aggregate
principal amount of 03 Notes deliver their consents to the
proposed amendment to the Indenture. Holders who do not deliver
their consents by the Consent Date will not receive the consent
payment. As of October 3, 2002, approximately $6,110,000 of the
$250,000,000 principal amount outstanding of the 03

Notes have been deposited with the depositary for exchange.
Pursuant to the terms of the exchange offer, holders may
withdraw their tenders of 03 Notes and revoke their consents
prior to the Consent Date, but not thereafter.

A revised offering circular and consent solicitation statement
and related consent and letter of transmittal and other offering
materials relating to the exchange offer setting forth all of
the amendments to the exchange offer and consent solicitation
will be distributed to eligible investors. Georgeson Shareholder
Communications Inc. is serving as USI's Information Agent for
the exchange offer and consent solicitation and may be contacted
at 17 State Street, 10th Floor, New York, New York 10004. Banks
and brokers may call collect using (212) 440-9800 and all others
may call toll free using (866) 807-2995. USI's public filings
may also be obtained through the Securities and Exchange
Commission at its website at http://www.sec.gov/ free of
charge.

         Cash Collateral on 7-1/4% Senior Notes due 2006

USI also intends to make a tender offer to purchase at par its
outstanding 7-1/4% Senior Notes due 2006 in an aggregate
principal amount equal to the balance in the cash collateral
account allocable to those notes. USI will simultaneously make a
related consent solicitation to amend the applicable Indenture
to allow USI to pay the tender offer consideration to tendering
holders from the cash collateral account pro rata based on the
amount of notes tendered relative to the outstanding amount of
notes and to provide that USI will make future offers to
purchase 06 Notes with cash from the cash collateral account
when the balance allocable to the 06 Notes equals or exceeds 10%
of the outstanding 06 Notes. The tender offer for the 06 Notes
will be conditioned upon the consummation of the 03 Notes
exchange offer, among other conditions.

Holders of the 06 Notes are urged to read the tender offer
materials regarding the tender offer for the 06 Notes when they
become available because they will contain important
information, including all the terms and conditions of the
offer. Note holders will be able to receive a copy of these
materials free of charge from USI when they become available.

The exchange offer is being made in reliance on the exemption
afforded by Section 3(a)(9) from the registration requirements
of the Securities Act of 1933, as amended. The exchange offer is
being made solely pursuant to the offering circular and consent
solicitation statement dated September 9, 2002 and related
consent and letter of transmittal, each as amended. Investors
and note holders are strongly advised to read both the offering
circular and consent solicitation statement and related consent
and letter of transmittal, each as amended, regarding the
exchange offer because they contain important information. USI
will not pay or give, directly or indirectly, any commission or
remuneration to any broker, dealer, salesman, agent or other
person for soliciting tenders in the exchange offer.

U.S. Industries owns several major businesses selling branded
bath and plumbing products, along with its consumer vacuum
cleaner company. The Company's principal brands include Jacuzzi,
Zurn, Sundance Spas, Eljer, and Rainbow Vacuum Cleaners.


VALENTIS INC: Slashes 45 Jobs to Reduce Costs to $7MM Annually
--------------------------------------------------------------
Valentis, Inc., (Nasdaq: VLTS) has reduced its staff and planned
expenditures to allow it to continue the development of its two
lead products, Del-1 gene medicine for the treatment of
peripheral arterial disease and ischemic heart disease and
EpoSwitch(TM), its lead GeneSwitch(R) product for the treatment
of chronic anemia.  The restructuring resulted in a reduction of
up to 45 people and is expected to reduce the company's cash
expenditures to approximately $7M per year.

As part of the restructuring J. Tyler Martin, M.D. Senior Vice
President, Development will be leaving the Company.  Margaret M.
Snowden, General Counsel will transition out of the Company over
time, but will continue to lead the Company's patent
infringement litigation.

Valentis is converting biologic discoveries into innovative
products. Valentis has three product platforms for the
development of novel therapeutics:  the gene medicine,
GeneSwitch(R) and DNA vaccine platforms. The gene medicine
platform includes a comprehensive array of proprietary nucleic
acid delivery systems, including a broad cationic lipid
portfolio from which appropriate formulations and modalities may
be selected and tailored to fit selected genes, indications, and
target tissues.  The Del-1 gene medicine therapeutic which is
the lead product for the gene medicine platform of non-viral
gene delivery technologies.  Del-1 is an angiogenesis gene that
is being developed for peripheral arterial disease and ischemic
heart disease. The EpoSwitch(TM) therapeutic for anemia is the
lead product for the GeneSwitch(R) platform and is being
developed to allow control of erythropoietin protein production
from an injected gene by an orally administered drug.  The
Company has developed synthetic vaccine delivery systems based
on several classes of polymers and proprietary PINC(TM) polymer-
based delivery technologies for intramuscular administration
provide for higher and more consistent levels of antigen
production. Additional information is available at
http://www.valentis.com

                              *    *    *

As reported in Troubled Company Reporter's October 2, 2002
edition, Valentis received a report from its independent
auditors covering the consolidated financial statements for the
fiscal year ended June 30, 2002 that includes an explanatory
paragraph which states that the financial statements have been
prepared assuming Valentis will continue as a going concern. The
audit report issued by its independent auditors may adversely
impact its dealings with third parties, such as customers,
suppliers and creditors, because of concerns about its financial
condition.  The explanatory paragraph states the following
conditions which raise substantial doubt about its ability to
continue as a going concern:  (i) the Company has incurred
recurring operating losses since inception, including a net loss
of $33.1 million for the year ended June 30, 2002, and its
accumulated deficit was $192.2 million at June 30, 2002; (ii)
its cash and investment balance at June 30, 2002 was $19.1
million, and it had a net capital deficiency of $7.7 million at
June 30, 2002; and (iii) it has been notified that its has not
complied with certain listing requirements of the Nasdaq
National Market, and holders of Series A preferred stock may
require the Company to redeem their shares for cash if its
common stock ceases to be listed on the Nasdaq National Market.
Such redemption could aggregate up to $30.8 million.  Assuming
that the holders of Series A preferred stocks exercise their
redemption rights, the Company will not have sufficient
financial resources to satisfy these redemption obligations.


VENTAS INC: Inks Pact to Invest $120 Mill. with Trans Healthcare
----------------------------------------------------------------
Ventas, Inc., (NYSE: VTR) has entered into an agreement to
invest $120 million with Trans Healthcare, Inc., a privately
owned long-term care and hospital company.  The agreement covers
27 facilities and includes a sale-leaseback transaction, an
investment grade CMBS (collateralized mortgage backed security)
first mortgage loan and a mezzanine loan.

"This is an important, diversifying acquisition with THI -- a
seasoned, quality operator of long-term care and rehabilitation
facilities, led by its President and CEO Anthony Misitano,"
Ventas President and CEO Debra A. Cafaro said.  "The facilities
involved in the transaction are high quality, stabilized assets
with solid cash flows and above average occupancy.  And, they
are located in Ohio and Maryland, two markets which Ventas has
targeted for investment."

The transaction is expected to close in the fourth quarter of
2002 and to be accretive to 2003 Funds From Operation.  Closing
of the transaction is subject to satisfaction of numerous
conditions, including the completion of due diligence.  There
can be no assurance that the transaction will close or, if it
does, when the closing will occur.

Included in the transaction are one rehabilitation hospital, 22
skilled nursing facilities and four assisted living facilities.

"This transaction demonstrates Ventas's ability to underwrite,
structure and fund large transactions that will provide capital
for operators to grow their business," Cafaro said.

Trans Healthcare, Inc., is based in Camp Hill, Pennsylvania.  It
operates 75 facilities with 8,580 beds in ten states, including
Ohio, Maryland and Pennsylvania.  Included in its facilities are
nine specialty hospitals, three of which are under development,
that have a total of 269 beds.  Its facilities offer specialty
programs for patients with Alzheimer's and dementia, behavioral
care, bariatric and ventilator/pulmonary care, and
rehabilitation.

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: Moody's Junks Ratings Due to Unit's Insolvency
----------------------------------------------------------------
Moody's Investors Service downgraded all ratings for Venture
Holdings Company, LLC, following the German District Court's
decision to start formal insolvency proceedings against
Peguform, Venture's largest unit.

Outlook is negative.

                     Rating Actions Taken:

- Downgrade to Caa1, from B2, of the ratings for Venture's
  approximately $390 million of remaining guaranteed senior
  secured bank credit facilities, consisting of:

  (a) $175 million guaranteed senior secured revolving credit
      facility maturing 2004;

  (b) $75 million ($32 million remaining) guaranteed senior
      secured term loan A maturing 2004;

  (c) $200 million ($182 million remaining) guaranteed senior
      secured term loan B maturing 2005

- Downgrade to Caa3, from Caa1, of the rating for $125 million
  of 11% guaranteed senior notes due 2007, issued by Venture and
  guaranteed by its material domestic subsidiaries;

- Downgrade to Caa3, from Caa1, of the rating for $205 million
  of 9.5% senior notes due 2005, issued by Venture together with
  its material domestic subsidiaries;

- Downgrade to Ca, from Caa2, of the rating for $125 million of
  12% guaranteed senior subordinated notes due 2009, issued by
  Venture and guaranteed by its material domestic subsidiaries;

- Downgrade to Caa1, from B2, of Venture's senior implied
  rating;

- Downgrade to Caa3, from Caa1, of Venture's senior unsecured
  issuer rating.

The German court retained the previously appointed temporary
administrator to act as the administrator in the formal
insolvency proceeding. The latter now officially controls
decisions regarding Venture's operations within Germany, France,
Spain, Mexico and Brazil.

The foreign insolvency proceedings triggered an event of default
with the company's US-based senior secured bank credit
agreement. As a result, the bank group now has the ability to
accelerate repayment of all the outstanding guaranteed senior
secured bank debt, a move which, if exercised, would invariably
result in bankruptcy proceedings for the company's US
operations.

Venture is an industry leader and worldwide, full-service
automotive supplier, systems integrator and manufacturer of
plastic components, modules and systems, as well as an industry
leader in applying new design and engineering technology to
develop innovative products, create new applications and reduce
product development time. The company employs approximately
13,000 persons worldwide. Venture has executive officers in
Fraser, Michigan, and operates 63 facilities throughout the
world.


VIASYSTEMS GROUP: Weil Gotshal Serving as Bankruptcy Attorneys
--------------------------------------------------------------
Viasystems Group, Inc., and Viasystems, Inc., seeks approval
from the U.S. Bankruptcy Court for the U.S. Bankruptcy Court for
the Southern District of New York to employ Weil, Gotshal &
Manges LLP as its attorneys under a general retainer to
prosecute their chapter 11 cases.

Viasystems will look to Weil Gotshal to:

  a) take any and all actions to protect and preserve the
     estates 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) prepare on behalf of the Debtors, as debtors in possession,
     all necessary motions, applications, answers, orders,
     reports and other papers in connection with the
     administration of the Debtors' estates; and

  c) perform all other necessary legal services in connection
     with these chapter 11 cases.

Weil Gotshal's hourly rates are:

     members and counsel     $375 to $700 per hour
     associates              $200 to $440 per hour
     paraprofessionals       $ 50 to $175 per hour

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.


WINSTAR COMMS: Ch. 7 Trustee Hires MCL Associates as Consultants
----------------------------------------------------------------
Winstar Communications, Inc.'s Chapter 7 Trustee Christine C.
Shubert seeks the Court's authority to employ MCL Associates
Inc. as special consultants for the recovery of funds from
government entities.

Sheldon K. Rennie, Esq., at Fox Rothschild O'Brien & Frankel
LLP, in Wilmington, Delaware, tells the Court that the Chapter 7
Trustee would like to retain MCL because of its considerable
experience in recovering funds from government entities.  For
its retention, MCL will be authorized to do all things necessary
to recover the funds.  The services that MCL will provide
include, but not will not be limited to, the search and
discovery of the Debtors' undistributed, unclaimed or
undelivered tenders of funds totaling $336,725 that are held by
any federal, provincial, state or government entity or any
agency or subdivision.

Mr. Rennie relates that MCL's compensation will be equal to
$12.5% of its total collection.  Unless a collection is made,
there will not be any charge to the Chapter 7 Trustee.  All
costs, fees, disbursements and out-of-pocket expenses pertaining
to the recovery process will be paid by MCL.

MCL President Michael Carlucci tells the Court that the firm is
one of the most effective research and recovery companies in the
United States.  Unlike others in its field, MCL does not
research on funds that only appear in state abandoned property
lists. Rather, MCL exerts effort by combing through government
archives, bankruptcy courts, federal and municipal agencies as
well as treasury departments.

Mr. Carlucci assures the Court that MCL is a disinterested
person in this particular bankruptcy proceeding, has no interest
adverse to the Debtors, their creditors, any other party-in-
interest, their respective attorneys and accountants, the
bankruptcy estate, and has no relation to any bankruptcy judge
or any relation to the United States Trustee or any person
employed in the Office of the United States Trustee. (Winstar
Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


WORLDCOM: Proposes Procedures to Resolve Disputes with Utilities
----------------------------------------------------------------
The Utilities Order also requires Worldcom Inc., and its debtor-
affiliates to negotiate with the Utility Companies in good faith
to establish expedited alternative dispute resolution procedures
for postpetition billing disputes below a certain value, and to
make a recommendation to the Court regarding the appropriate
maximum value of disputes subjects to these procedures.  The
Debtors' recommendation for the maximum value of disputes
subject to the De Minimis Procedures is $100,000.  The
procedures are established with respect to Disputes involving
postpetition invoices from any Utility Company to the Debtors
where the amount in dispute for any single month of service
involved in the Dispute does not exceed $100,000.  Any amounts
that are not disputed will be paid in accordance with the
Utility Order.

According to Alfredo R. Perez, Esq., at Weil Gotshal & Manges
LLP, in New York, the terms of the dispute resolution procedures
are:

A. A Dispute will exist where the Debtors have, in good faith
   and upon written request from a Utility Company, supplied the
   Utility Company with:

   -- a writing setting forth the reasons for not paying an
      invoice, and

   -- supporting documentation promptly following the request;
      provided, however, that, if the parties' contract, tariff,
      or applicable regulation supplies both a format and a time
      period for disputing an invoice, that format and time
      period will control.

   Because these procedures are intended as additional adequate
   assurance to the Utility Companies, any Utility Company may
   waive the application of these De Minimis Procedures as to a
   particular dispute; provided, however, that Utility Companies
   may not terminate Utility Service to the Debtors except in
   accordance with the 5th ordered paragraph of the Utility
   Order.  A corporate party need not be represented by an
   attorney while participating in these De Minimis Procedures
   at any stage prior to a hearing in the Bankruptcy Court;

B. Any Utility Company having a De Minimis Dispute with the
   Debtors that elects to invoke these De Minimis Procedures
   should send written notice of its desire to initiate
   proceedings regarding the Dispute to the Debtors.  The
   Utility Company should send the De Minimis Dispute Notice
   directly to the Debtors to the attention of the person
   responsible for the account in question, and to:

       Robert W. Rodrigues, Esq.
       WorldCom, Inc.
       1133 Nineteenth Street, Washington, DC 20036
       Phone: (202) 736-6865   Fax: (202) 736-6471
       E-mail:robert.w.rodrigues@wcom.com

       with a copy to:

       Alfredo R. Perez, Esq.
       Weil, Gotshal & Manges LLP
       700 Louisiana, Suite 1600, Houston, Texas 77002
       Phone: (713) 546-5000   Fax: (713) 224-9511
       E-mail:alfredo.perez@weil.com

                   -and-

       Christopher Marcus, Esq.
       Weil, Gotshal & Manges LLP
       767 Fifth Avenue, New York, New York 10153
       Phone: (212) 310-8000   Fax: (212) 310-8007
       E-mail:christopher.marcus@weil.com

C. The De Minimis Dispute Notice should contain these
   information:

   -- Identification of the legal entity on each side of the
      transaction;

   -- Identification of the specific contract or agreement
      pursuant to which the alleged amounts are owed, including
      any account number or other identifying information for
      the account in question;

   -- A concise statement of the amount in dispute; and

   -- Contact information for a person with settlement authority
      to resolve the matter;

D. Promptly after service of the De Minimis Dispute Notice, the
   counterparties should make good faith efforts to provide each
   other with information as the other may reasonably request
   regarding the dispute;

E. Not later than 14 days after service of the De Minimis
   Dispute Notice, the counterparties should participate in a
   mandatory settlement conference, either in person or by
   telephone.  The settlement conference will be attended by
   representatives of the Utility Company and the Debtors who
   have settlement authority to resolve the matter;

F. If a De Minimis Dispute is not resolved at the mandatory
   settlement conference, it should be adjudicated, within 45
   days from the conclusion of the mandatory settlement
   conference, before a special master.  The Special Master will
   conduct an evidentiary telephonic hearing and will have
   authority to make a recommendation to the Court with respect
   to a final resolution of the matter.  To the extent either
   party seeks to introduce testimony at the evidentiary
   telephonic hearing, unless agreed to by the other party, all
   witnesses must testify in the presence of a notary public.
   The Special Master should promptly file a recommendation with
   the Court and both the Debtors and the applicable Utility
   Company will have 10 days to object.  If any party objects to
   the recommendation, the Debtors will set the matter for
   hearing on a regularly scheduled hearing date and serve
   notice of the hearing.  Pending the hearing before the
   Bankruptcy Court, to the extent the Special Master finds that
   the Debtors owe money to the Utility Company, the Debtors
   will, within 10 days of the filing of the Special Master's
   recommendation, place the amounts in an escrow account; and

G. Within 20 days from the date upon which this Notice is filed,
   all parties will have the right to recommend a person to
   serve as Special Master.  Unless agreed to earlier by the
   parties, the Court will appoint a Special Master from among
   those recommended at the first regularly scheduled hearing
   after 30 days after the filing of this Notice.  The Special
   Master will have authority, based upon the amount and
   complexity of any particular Dispute, to determine whether
   and to what extent each party will bear the costs of
   resolving a particular Dispute before the Special Master.

                  Allegheny Power, et. al., Objects

Robert T. Barnard, Esq., at Thompson Hine LLP, in New York,
argues that the Court should not grant the injunctive relief
because it actually deprives the Utilities of their rights under
applicable federal and state law.  Under applicable federal and
state law, the Utilities are entitled to terminate service to
the Debtors for nonpayment of postpetition bills so long as they
comply with their Tariffs.

Furthermore, Mr. Barnard points out, the proposed injunctive
relief imposes a severe hardship on the Utilities by requiring
them to constantly monitor each account and ensure that several
parties, in addition to their customer, receive notices of
default.  Moreover, under the Proposed Procedures, the Utilities
would have the affirmative duty to read the Debtors' minds and
ascertain that nonpayment of a bill may be based on a dispute
that the Utilities need to ask the Debtors to set forth in
writing.

Mr. Barnard contends that there is no need for the injunctive
relief because the normal billing cycles of the Utilities, which
are governed by the Tariffs, provide the Debtors with more than
sufficient protections to address billing or payment disputes.
Under the Utilities' billing cycles, the Debtors receive one
month of utility service before the Utility issues a bill for
the service.  Once a bill is issued, the Debtors have 15 to 30
days to pay the applicable bill.  If the Debtors fail to timely
pay the bill, a past due notice is issued on the account, which
generally provides the Debtors with a week to cure the default.
During either of these time periods, the Debtors are provided
sufficient time to raise and address any billing or payment
disputes that may arise.

If the Debtors fail to cure the arrearage by the applicable cure
period, their service is subject to disconnection.  Mr. Barnard
notes that under the Utilities' regulatory mandated or
contractually agreed billing cycles, the Debtors must be
severely delinquent in the payment of their bills and ignore a
written warning notice before service would be disconnected for
nonpayment of postpetition bills.  Therefore, there is no need
for a Court-supervised billing dispute procedure.  Accordingly,
Allegheny Power, et. al., ask the Court to deny the injunctive
relief sought. (Worldcom Bankruptcy News, Issue No. 9;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


XCEL ENERGY: Fitch Has No Plan to Take Any Rating Action
--------------------------------------------------------
Xcel Energy Inc., announced Thursday last week that it had
applied to the Securities and Exchange Commission for a
temporary waiver of SEC's required minimum requirement of 30%
equity to total consolidated capitalization (including short-
term debt) for companies subject to the 1935 Public Utility
Holding Company Act. Xcel is seeking temporary approval until
June 2003 for a lower minimum common equity ratio of 24%. Absent
an approval from the SEC, expected write-down of NRG investments
would eliminate Xcel's ability to engage in any financing
transactions.

Xcel's senior debt rating remains 'BB+' with a Negative Rating
Outlook, and Fitch Ratings does not plan to take any rating
action at this time. When Xcel's rating was downgraded to the
current level on July 30, 2002, Fitch had already anticipated
that recognition of impaired values of NRG assets might cause
Xcel to fail this common equity test. Fitch anticipates that
Xcel will be granted a temporary waiver, as it would not be in
the public interest for the regulatory process to confound a
regulated company's efforts to maintain its solvency. Xcel has
indicated that at this time it has adequate liquidity with
approximately $250 MM of cash on hand.

Under the Public Utility Holding Company Act of 1935,
administered by the SEC, compliance with the 30 percent common
equity test is a condition to engage in financing transactions
by the parent holding. Xcel has reported that on June 30, 2002,
the ratio stood at 31%. The company filed a request for a waiver
from the SEC to reduce the requirement to 24 percent through
June 2003.

Xcel Energy Inc., is the holding company for six electric
utility companies that serve electric and natural gas customers
in 12 states, together with two transmission companies and two
natural gas pipelines. Xcel also owns a number of non-regulated
businesses, the largest of which is NRG Energy, Inc.


* Sixty CEOs and COOs Form Pinnacle Peak Advisors
-------------------------------------------------
A world class team of 60 former Chairmen, CEOs, Presidents, and
COOs announced the formation of Pinnacle Peak Advisors to
provide turnaround, interim CEO and business consulting
services.

According to Pinnacle Peak Advisors' Chief Executive Officer
Thomas J. Inserra, "Current economic conditions have created a
strong demand for tried and proven business leaders with
considerable P & L experience."  "Our strength is the depth of
operational experience our executives known as 'coaches' have
acquired in running all types of companies in every industry
within 140 countries."

Each coach has had P & L accountability experience ranging from
$50 million to $20 billion in revenues.  Some of the companies
where Pinnacle Peak Advisors' coaches have held top leadership
positions are as follows:

ABC, AIG, ARCO, AT&T, BlockBuster, Boston Chicken, Bristol-Myers
Squibb, Chase, Cigna, Citicorp, Clorox, Coleman, Colgate,
ConAgra, Disney, Equifax, Fidelity, GE, General Mills, GMAC,
ITT, Johnson Controls, Kellogg, Lexmark, McKesson Medical,
Minolta, Multi-Graphics, Nortel, Outboard Marine, Pepsi, Perdue
Farms, Pizza Hut, Procter & Gamble, Prudential, Rockwell,
Shearson-Lehman, Sizzler, SPX, Texas Instruments, Toshiba, TRW,
Unisys and Xerox

There are numerous ways companies can benefit from this proven
leadership experience such as using a Pinnacle Peak Advisors
coach as an interim CEO, on turnaround assignments or leading a
company through a reorganization or bankruptcy.

"Our proven leaders can serve on short notice to immediately
address the most pressing issues such as restoring the company
to profitability while the company undertakes a search for a
permanent CEO," added Inserra.

Small businesses can also benefit from Pinnacle Peak Advisors
talent and expertise by retaining an appropriate coach as a
board member or personal advisor to the company's founder or CEO
at a surprisingly affordable rate.

Thomas D. Rooney, a coach at Pinnacle Peak Advisors who is a
former CEO and President of Multi-Graphics, Inc. and former
Group President with SPX (a Fortune 500 global industrial
products, services and manufacturer), views this venture as a
smart way for companies to profit from the expertise of the
executives on the team.  Another coach Bill Burns, who is the
former Division President at Blockbuster Entertainment Group and
former General Manager and Director of Disney's Magic Kingdom
Park, reiterated the uniqueness of Pinnacle Peak Advisors that
sets it apart from its competition -- all the coaches have run
companies and been held accountable for the P & L of a business.

Headquartered in Scottsdale, Ariz., Pinnacle Peak Advisors
offers U.S. and international turnaround, interim CEO and
advisory services at businesses where the need for proven
leadership experience is at its peak including turnarounds,
reorganizations, bankruptcies, mergers, acquisitions,
divestitures and startups.  For more information, visit Pinnacle
Peak Advisor's Web site at http://www.PinnaclePeakAdvisors.com
or call 1-480-595-8081.


* Robert Lindquist Joins Citigate Global Intelligence & Security
----------------------------------------------------------------
Robert J. (Bob) Lindquist, FCA, CFE, a pioneer in the practice
of forensic and investigative accounting, has joined Citigate
Global Intelligence & Security as a senior managing director and
global practice leader of the Financial Investigation and
Commercial Litigation Support Group in the Investigations
Division.

Mr. Lindquist brings 30 years of experience to his new position
and will report to Ernest Brod, the CEO of CGIS.

The Financial Investigation and Commercial Litigation Support
Group provides professional services to both law firms and
corporate legal departments. Areas of investigative expertise
include: asset tracing, bankruptcy, bribery, commercial
disputes, construction, corruption, financial statement
manipulation, management and investor fraud, internal
investigation, money laundering issues, procurement fraud,
surety and fidelity claims and tax fraud integrated with
business controls consulting.

"Bob Lindquist pioneered the development of sophisticated
forensic accounting techniques," said Brod. "He is well-known
from Toronto to Trinidad-Tobago for his high profile
investigations, asset searches and anti-money laundering cases.
This extensive experience enables him to candidly advise our
clients about all of the information we uncover -- whether
positive or negative -- with an unparalleled degree of
confidence."

Prior to joining CGIS, Mr. Lindquist operated his own
independent forensic accounting firm for two years, after
serving nearly four years as a partner with
PricewaterhouseCoopers. During the previous five years, he was a
founding partner and associate of Lindquist, Avey, Macdonald,
Baskerville, Inc. Mr. Lindquist has successfully conducted
investigations for clients ranging from Fortune 500 corporations
to prime ministers of foreign governments. Some of the more
significant cases he managed in recent years include:

     --  Asset Search: Linked thousands of accounts in Swiss
banks to victims of the Holocaust as an appointee to the Volcker
Commission

     --  Investor Fraud: Investigated a falsely reported gold
strike in Indonesia that boosted the stock price of a Canadian
mining exploration company

     --  Corruption: Conducted investigations globally into
allegations of corruption in loan programs for the World Bank

     --  Family Dispute: Defended a multi-million dollar foreign
company against allegations of management fraud brought by a
family member who is a minority shareholder in the family-
controlled business

     --  Procurement Fraud and Corruption: Investigated
allegations of impropriety for the government of Trinidad-Tobago
regarding the construction of a new international airport
costing in excess of $200 million

Mr. Lindquist, 57, is the author of Accounting as an
Investigative Aid (1977) and co-author of two textbooks, Fraud
Auditing and Forensic Accounting (2d 1995) and The Accounting
Handbook of Fraud and Commercial Crime (1993). In 1992 he was
elected to the Board of Regents for the Association of Certified
Fraud Examiners, based in Austin, Texas, and in 1993, was
elected Chairman of the Board.

Citigate Global Intelligence & Security is a global business
intelligence, corporate investigations and business
controls/security consulting firm focused on helping clients
meet increased intelligence and security needs. Founded by
former senior executives of Kroll Associates and
PricewaterhouseCoopers, CGIS offers clients seamless access to
leading practitioners in the fields of business investigations,
investigative due diligence, hostile takeovers, business and
competitor intelligence, forensic accounting, business controls,
commercial disputes, corporate and computer security, and crisis
management. CGIS is headquartered in New York with offices in
Los Angeles, Boston, Miami, Dallas, Chicago and Reston,
Virginia. For additional information about CGIS, visit the
firm's Web site at http://www.citigategis.com


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

Issuer               Coupon   Maturity  Bid - Ask  Weekly change
------               ------   --------  ---------  -------------
Federal-Mogul         7.5%    due 2004    18 - 20        -4
Finova Group          7.5%    due 2009    28 - 30        -3
Freeport-McMoran      7.5%    due 2006    89 - 91        0
Global Crossing Hldgs 9.5%    due 2009     1 - 2         -0.5
Globalstar            11.375% due 2004  2.25 - 3.25      -0.25
Lucent Technologies   6.45%   due 2029    31 - 33        -2
Polaroid Corporation  6.75%   due 2002     5 - 7         -0.5
Terra Industries      10.5%   due 2005    78 - 80        0
Westpoint Stevens     7.875%  due 2005    30 - 32        0
Xerox Corporation     8.0%    due 2027    39 - 41        -1

Bond pricing, appearing in each Thursday's edition of the TCR,
is provided by DebtTraders in New York. DebtTraders is a
specialist in global high yield securities, providing clients
unparalleled services in the identification, assessment, and
sourcing of attractive high yield debt investments. For more
information on institutional services, contact Scott Johnson at
1-212-247-5300. To view our research and find out about private
client accounts, contact Peter Fitzpatrick at 1-212-247-3800.
Real-time pricing available at http://www.debttraders.com

                          *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices
are obtained by TCR editors from a variety of outside sources
during the prior week we think are reliable.  Those sources may
not, however, be complete or accurate.  The Monday Bond Pricing
table is compiled on the Friday prior to publication.  Prices
reported are not intended to reflect actual trades.  Prices for
actual trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy
or sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.

Bond pricing, appearing in each Thursday's edition of the TCR,
is provided by DebtTraders in New York. DebtTraders is a
specialist in global high yield securities, providing clients
unparalleled services in the identification, assessment, and
sourcing of attractive high yield debt investments. For more
information on institutional services, contact Scott Johnson at
1-212-247-5300. To view our research and find out about private
client accounts, contact Peter Fitzpatrick at 1-212-247-3800.
Real-time pricing available at http://www.debttraders.com/

Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                          *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard
Group, Inc., Washington, DC USA. Yvonne L. Metzler, Bernadette
C. de Roda, Donnabel C. Salcedo, Ronald P. Villavelez and Peter
A. Chapman, Editors.

Copyright 2002.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.  Information
contained herein is obtained from sources believed to be
reliable, but is not guaranteed.

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

                *** End of Transmission ***