TCR_Public/021024.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 24, 2002, Vol. 6, No. 211    

                          Headlines

360NETWORKS: Asks Court to Approve NetRail Settlement Agreement
ACTERNA CORP: Will Publish Second Quarter Results on October 30
AGWAY INC: Court Approves Access to $125 Million DIP Financing
AMERICAN HOMEPATIENT: Court OKs McDonald as Committee's Advisor
AMERISERV: Slow Earnings Prompt Fitch to Hatchet Debt Ratings

ANC RENTAL: Consolidating Operations at Minneapolis-St. Paul
AQUILA INC: Will Publish Third Quarter Results on November 14
ARMILLARE TECHNOLOGIES: Auctioning-Off Former Assets on Friday
BALLY TOTAL: Fitch Affirms Senior Credit Facility Rating at BB-
BCE INC: Commences Public Offering to Raise CDN$1.5 Billion

BROADWAY TRADING: Wants to Hire DG Simon as Tax Consultants
BURLINGTON INDUSTRIES: Wins Nod to Amend $125MM DIP Credit Pact
CARAVELLE: Fitch Keeps Watch on Low-B-Rated Class C & D Notes
CENTURY ALUMINUM: Will Suspend Preferred Dividend Payment
COLUMBUS MCKINNON: Reports Improved Results for Second Quarter

COMDISCO INC: Inks Sale Agreements for Several European Assets
CONTOUR ENERGY: Court Okays Weil Gotshal as Committee's Counsel
DAYTON SUPERIOR: Moody's Hatchets Ratings over Weak Performance
DELTA MILLS: First Quarter Net Sales Climb-Up 25% to $46.2 Mill.
DESA HOLDINGS: Taps PwC as Executive Compensation Consultants

DLJ COMM'L: Fitch Affirms Low-B Ratings on Classes B-3 to B-8
ENCHIRA BIOTECHNOLOGY: Nasdaq Knocks-Off Shares Effective Oct 22
ENRON: Proposes Uniform Retail Contract Sale Bidding Procedures
EOTT ENERGY: Gets Okay to Pay $1.5MM of Critical Vendor Claims
EOTT ENERGY CORP: Voluntary Chapter 11 Case Summary

EXODUS COMMS: Has Until Nov. 22 to Remove Prepetition Actions
FAIRCHILD CORP: Commences Tender Offer for 10.75% Sr. Sub. Notes
FLOWER FOODS: Fitch Affirms BB+ Senior Credit Facilities Ratings
FLOWSERVE CORP: Repays $88.3 Million of Debt in Third Quarter
FOAMEX CORP: Moody's Changes Outlook on Ratings to Negative

FOAMEX: Airs Disappointment with S&P & Moody's Rating Actions
FORT WASHINGTON: S&P Hatchets 2nd Priority Senior Rating to BB
FRONTLINE COMMS: Terminates Merger Negotiations with Shecom
GENEVA STEEL: Potential Lender Withdraws from Company Financing
GENTEK INC: Intends to Honor & Pay Prepetition Tax Obligations

GLOBAL CROSSING: Consolidated Net Loss Tops $138 Mill. in August
HAWK CORP: S&P Ratchets Corporate Credit Rating Up a Notch to B
ITC DELTACOM: Brings-In BDO Siedman as Independent Auditors
KINGSLEY COACH: Mantyla McReynolds Expresses Going Concern Doubt
KMART CORP: US Trustee Appoints Gillette to Creditors' Committee

KSAT SATELLITE: Pursuing New Repayment Terms on $3.9 Mill. Loan
LAIDLAW INC: Exit Financing Facility for Reorganized Debtors
LEAR CORP: Posts $700K Working Capital Deficit at Sept. 28, 2002
LOGIC DEVICES: Fails to Meet Nasdaq Min. Listing Requirements
LTV CORP: LTV Steel Settles Disputes re Donner-Hanna Plant

LUCENT TECHNOLOGIES: Seeking Shareholders' Nod for Reverse Split
MARINER POST-ACUTE: Greenlight Capital Reports 7.4% Equity Stake
METALS USA: Court Okays Sale of Harris County Property for $1MM+
NATIONAL STEEL: Wants to Amend Setoff Pact with Metal Building
NEON COMMUNICATIONS: Committee Taps Andrews & Kurth as Counsel

NORTEK INC: Moody's Assigns & Confirms Low-B Level Debt Ratings
OWENS CORNING: Takes Legal Action to Recover Transfers from BofA
PANACO INC: Has Until January 15 to Make Lease-Related Decisions
PERKINELMER INC: Will Publish Third Quarter Results on Tuesday
PERSONNEL GROUP: Renews Georgia Technology Authority Contract

PRIMUS TELECOMMS: Extends VoIP Services for MSN Messenger Users
R.H. DONNELLEY: Equity Deficit Narrows to $44.7M at September 30
RURAL/METRO: Sells Latin American Assets to Local Management
RUSSIAN TEA ROOM: Creditors' Meeting Scheduled for November 20
SMURFIT-STONE: Reports Improved Results for Third Quarter 2002

SONIC FOUNDRY: Falls Short of Nasdaq Continued Listing Criteria
SONUS: Shareholders OK Asset Sale to Amplifon for $38MM + Debts
SOS STAFFING: Has Until April 21 to Meet Nasdaq Requirements
STERLING CHEMICALS: Nov. 13 Special Admin. Claims Bar Date Fixed
TELAXIS COMMS: Look for Third Quarter 2002 Results on Tuesday

TENNECO AUTOMOTIVE: Surpasses Bank Covenant Test Ratios in Q3
TRENWICK GROUP: Fitch Junks Long-Term and Senior Debt Ratings
TRENWICK: Covenant Breach Spurs S&P to Put BB Rating on Watch
TXU EUROPE: Fitch Revises Watch on Junk Sr. Rating to Evolving
UNITED AIRLINES: Flight Attendants Commence Negotiations

U.S. INDUSTRIES: Completes SiTeco Sale for EUR113 Million
USG CORP: Seeks Approval to Hire Leydig Voit as Patent Counsel
WARNACO GROUP: Has Until January 31 to Decide on Milford Lease
WORLDCOM INC: Committee Taps Houlihan Lokey for Financial Advice
WORLDCOM INC: Net Loss Narrows to $98 Million in August 2002

XEROX CORP: GE Entity Agrees to Fund 8-Year U.S. Customer Leases
XETEL CORP: Case Summary & 20 Largest Unsecured Creditors

* Ann Gillin Lefever Joins Clear Thinking Group, Inc.'s Board

* DebtTraders' Real-Time Bond Pricing

                          *********

360NETWORKS: Asks Court to Approve NetRail Settlement Agreement
---------------------------------------------------------------
Alan J. Lipkin, Esq., at Willkie Farr & Gallagher, in New York,
relates that on February 16, 2001, 360networks inc. and 360 Sub
entered into a Merger Agreement with NetRail, Inc.  Pursuant to
the Merger Agreement, NetRail and 360 Sub were to be merged and
owned by 360networks while NetRail's shareholders were to
receive stock in 360networks.

Moreover, Mr. Lipkin adds that 360networks was to provide up to
$5,500,000 in bridge financing to NetRail while the parties
sought to satisfy the conditions precedent to closing.  NetRail
and 360networks also entered into a Promissory Note and a
Security Agreement that provide for advances to NetRail by
360networks or its designated subsidiary, to be secured by a
security interest in substantially all assets of NetRail.
Between April 3, 2001 and May 7, 2001, 360networks (USA) inc.
advanced $3,625,000 to NetRail.

However, Mr. Lipkin reports, the proposed merger transaction
never closed.  Hence, on June 15, 2001, in accordance with the
Merger Agreement, 360networks notified NetRail in writing that
it is no longer willing to proceed with the merger.

NetRail filed for Chapter 11 protection in the Northern District
of Georgia in July 2001.  Consequently, NetRail sold
substantially all of its assets to Cogent Communications Inc.
for $11,700,000.  NetRail continues to hold funds, including
those of 360 USA.

Pursuant to NetRail's bankruptcy proceeding, 360 USA timely
filed a proof of claim asserting a secured claim for $4,066,354
plus interest, fees and costs.  NetRail objects to 360's Claim
on the grounds that:

    (a) it is subject to setoff or recoupment on various
        counterclaims due to alleged breaches of the Merger
        Agreement; and

    (b) it should be re-characterized as either an unsecured
        claim or a capital contribution to NetRail.

Accordingly, 360 USA challenged NetRail's allegations and
further asserted:

    (a) multiple breaches by NetRail of the Merger Agreement and
        the Loan Documents;

    (b) full collateralization for the 360 Claim;

    (c) the passage of the merger termination deadline that
        excused performance under the Merger Agreement by any
        360 entity; and

    (d) substantial other legal and jurisdictional issues
        concerning NetRail's arguments.

Conversely, 360 USA filed a plan of liquidation for NetRail that
provided for the compromise and settlement of all claims between
NetRail and 360 USA in exchange for the allowance of the 360
Claim and payment to 360 USA of a compromise amount equal to
$3,500,000.  NetRail, on the other hand, filed its own plan of
liquidation that provides for NetRail to litigate against 360
USA, 360networks and 360 Sub.  The NetRail Bankruptcy Court
encouraged the parties to pursue mediation of their disputes.

Ultimately, the Parties reached an agreement to settle the
disputes, which generally provides for:

    (a) allowance of the 360 Claim against NetRail as of May 31,
        2002 for $4,428,854;

    (b) satisfaction of the claim through the payment of
        $2,500,000 plus interest accrued thereon from approval
        of the Settlement Agreement by this Court -- the 360
        Distribution Amount;

    (c) payment of the 360 Distribution Amount pursuant to an
        amended plan of liquidation for NetRail; provided,
        however, that in no event will the payment be made later
        than October 30, 2002; and

    (d) the exchange of mutual releases in the forms annexed to
        the Settlement Agreement.

Accordingly, the Debtors seek the Court's authority to perform
under the Settlement Agreement pursuant to Rule 9019 of the
Federal Rules of Bankruptcy Procedure.

Mr. Lipkin contends that the relief should be granted because:

    (a) NetRail has asserted numerous substantial arguments
        challenging the 360 Claim that would require substantial
        time and money to resolve and would be subject to an
        uncertain result;

    (b) at best, 360 USA could recover only $4,500,000, less the
        time value of money and the cost of litigation; and

    (c) the Settlement is in the best interest of the creditors
        and estate. (360 Bankruptcy News, Issue No. 36;
        Bankruptcy Creditors' Service, Inc., 609/392-0900)    


ACTERNA CORP: Will Publish Second Quarter Results on October 30
---------------------------------------------------------------
Acterna Corporation (Nasdaq:ACTR) will report financial results
for its fiscal second quarter ended September 30, 2002, on
Wednesday, October 30, 2002.

The company will host a conference call at 7:30 a.m. (EST) that
day to discuss the quarter's results.

     Date/Time:  Wednesday, October 30, 2002,
                 7:30 - 8:30 a.m. (EST)

     Dial-in information:
     Domestic participant dial number:  800-473-8494
     International participant dial number:  +1-816-650-0757
     Passcode:  acterna earnings

A replay of the call will be available from October 30, 2002, to
November 6, 2002, by dialing 800-252-6030 or +1-402-220-2491.
The replay passcode is 14021203.

A webcast of the call will also be available to all interested
parties on the Acterna Web site at http://www.acterna.comunder  
the "Investor Relations" section.

Based in Germantown, Maryland, Acterna Corporation is the
holding company for Acterna, da Vinci Systems and Itronix.
Acterna is the world's second largest communications test and
management company.

The company offers instruments, systems, software and services
used by service providers, equipment manufacturers and
enterprise users to test and optimize performance of their
optical transport, access, cable, data/IP and wireless networks
and services. da Vinci Systems designs and markets video color
correction systems to the video postproduction industry.

Itronix sells ruggedized computing devices for field service
applications to a range of industries. Additional information on
Acterna is available at http://www.acterna.com

                          *    *    *

As reported in Troubled Company Reporter's September 17, 2002
edition, Standard & Poor's Ratings Services revised its
corporate credit rating on Acterna Corp., to 'CCC+' from 'SD',
its senior secured bank loan rating to 'CCC+' from 'B-', and its
subordinated note rating to 'CCC-' from 'D'. The actions were
based on Standard & Poor's reassessment of Acterna's credit
quality and its associated obligations after the company
completed its tender offer for $109 million of its subordinated
notes at below par.

Standard & Poor's believes sales are likely to continue to
deteriorate as they have since late 2000, as the global
telecommunications industry continues to reduce capital
spending. Moreover, pricing pressures are likely to present a
further obstacle to management's efforts to improve operating
performance. Therefore the timing of a return to profitability
is uncertain.


AGWAY INC: Court Approves Access to $125 Million DIP Financing
--------------------------------------------------------------
Agway Inc., announced that the U.S. Bankruptcy Court for the
Northern District of New York approved the Company's motion for
access to the full amount of the $125 million debtor-in-
possession (DIP) credit facility, provided by a group of
institutions led by GE Commercial Finance.

The credit facility will be used for normal business operations,
including payments to vendors and suppliers for goods and
services received after the company filed for Chapter 11
reorganization on October 1, 2002.  Agway has experienced no
interruption of production, service or distribution and expects
none during the reorganization process.

Agway Chief Executive Officer Donald P. Cardarelli said,
"[Tues]day's final approval of access to the full DIP credit
facility gives Agway and its stakeholders the additional
assurance that operations can continue as normal and that our
vendors will continue to be paid going forward.  We appreciate
the cooperation we have received from our vendors and remain
committed to delivering in full and on time all products and
services to Agway customers."

As announced October 1, Agway Feed and Nutrition, Agway
Agronomy, Seedway, Feed Commodities International, Country Best
Produce, CPG Nutrients, Agway CPG Technologies and Agway General
Agency are included in the Chapter 11 filings.  Four wholly
owned Agway Inc., subsidiaries -- Agway Energy Products LLC,
Agway Energy Services, Inc., Agway Energy Services-PA, Inc., and
Telmark LLC -- are not included in the filings.  Also not
included in the filings is Cooperative Milling, a joint venture
between Agway and Southern States Cooperative.

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


AMERICAN HOMEPATIENT: Court OKs McDonald as Committee's Advisor
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of American
Homepatient, Inc., and its debtor-affiliates obtained approval
from the U.S. Bankruptcy Court for the Middle District of
Tennessee to employ McDonald Investments, Inc., as its financial
advisor.

McDonald is a leading investment banking firm headquartered in
Cleveland, Ohio, with a 12-year track record of successful out-
of-court restructurings and chapter 11 reorganizations.

As the Committee's financial advisor, McDonald will:

  a) assist the Committee with analyzing the Debtors'
     operations, cash flow projections, business strategy,
     competition in relevant markets, and strategic
     alternatives;

  b) assist the Committee with analyzing the financial
     ramifications of significant transactions for which the
     Debtors or other parties in interest seek Bankruptcy Court
     approval, including cash use or postpetition financing,
     assumption or rejection of major executory contracts, and
     employee compensation or retention programs;

  c) advise the Committee on the value of the business of the
     Debtors and/or components thereof on a going concern basis,
     and any consideration of distributions that would be
     accorded to unsecured creditors pursuant to a plan of
     reorganization filed or proposed to be filed with the
     Bankruptcy Court;

  d) advise and assist the Committee in analyzing and evaluating
     any plans of reorganization that may be filed or proposed
     to be filed with the Bankruptcy Court by the Debtors or
     other parties in interest, and in possibly formulating and
     developing an alternative plan of reorganization on behalf
     of the Committee;

  e) advise and assist the Committee in evaluating various
     possible structures, forms, and consideration included in
     any sale or restructuring transactions;

  f) attend and provide advice at meetings of the Committee;

  g) assist the Committee in communications and negotiations
     with representatives of the Debtors and other parties in
     connection with proposed significant transactions or plans
     of reorganization;

  h) participate in hearing before the Bankruptcy Court, if
     required, with respect to any matter as to which McDonald
     has provided advice to the Committee; and

  i) render other investment banking or financial advisory
     services as requested by the Committee or its counsel and
     agreed by McDonald.

McDonald will collect $75,000 per month for its advisory
services.

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


AMERISERV: Slow Earnings Prompt Fitch to Hatchet Debt Ratings
-------------------------------------------------------------
Fitch Ratings downgraded the ratings for AmeriServ Financial,
Inc., as follows: long-term debt rating to 'BB' from 'BB+' and
individual rating to 'C/D' from 'C'. Fitch has also lowered the
long-term deposit rating for ASRV's banking subsidiary,
AmeriServ Financial Bank, to 'BB+' from 'BBB-' and ASRVB's
individual rating to 'C/D' from 'C'. Additionally, Fitch has
downgraded the trust preferred rating for AmeriServ Capital
Trust I to 'B+' from 'BB'. All other ratings for ASRV and its
subsidiaries are removed from Rating Watch Negative where they
were placed on September 23, 2002. The Rating Outlook for all
ratings for ASRV and its subsidiaries has been changed to
Negative.

The rating action reflects Fitch's view that ASRV's liquidity
position, especially at the parent company, has weakened due to
continued lack of earnings momentum. On April 1, 2000, ASRV
(then USBANCORP, Inc.) completed the tax-free spin-off of its
Three Rivers Bank subsidiary. The spin-off was intended to
improve growth prospects and maximize shareholder value of each
entity, with ASRV focusing on leveraging its union affiliation.
However, the spin-off also left ASRV with one less subsidiary
from which to upstream dividends to service its relatively large
$34.5 mln of trust preferred securities. Furthermore, earnings
performance at ASRVB has suffered in recent periods from narrow
margins, increased credit costs due primarily to the commercial
leasing portfolio, and significant prepayments in the mortgage
servicing portfolio at Standard Mortgage Corporation. This,
combined with an above average common dividend, has contributed
to a fairly lean cash position at the parent company level.

Important steps are being taken to improve the company's
financial profile. ASRV recently announced a capital and
earnings improvement program, including a 66% reduction of its
dividend to $0.12/year, and $4 mln in anticipated incremental
(pre-tax) earnings ($3.5 mln from cost savings and $500K from
revenue enhancement) for FY03. The implementation of this
earnings improvement program will result in a 3Q02 loss and
perhaps a loss for FY02 as the company experiences higher credit
costs and additional mortgage servicing rights impairments
associated with increases in prepayment speeds due to lower
mortgage interest rates. The company will also perform a
strategic and efficiency evaluation of its trust, commercial
lending, loan processing, and management information systems
operations. Despite the potential cost, Fitch has taken a
positive view of the earnings improvement plan as well as
management's decision to exit or sell SMC and the commercial
leasing business line (commercial lease portfolio totaled
approximately $37 mln at 08/31/02). However, the Rating Outlook
Negative reflects execution risk in improving the company's
financial profile heightened by uncertainty related to the
economic environment and minimal financial flexibility. The
Rating Outlook would likely be resolved in favor of the current
ratings should management successfully improve earnings
performance over coming quarters and exit non-strategic and
under-performing businesses, while maintaining the company's
sound capital position, solid deposit base, and still adequate
asset quality. Conversely, continued lackluster performance
could result in lower ratings for ASRV and its subsidiaries.

Ratings downgraded, Removed from Rating Watch Negative

                   AmeriServ Financial, Inc.

     -- Long-term to 'BB' from 'BB+' ;

     -- Individual to 'C/D' from 'C' ;

     -- Rating Outlook Negative.

                   AmeriServ Financial Bank

     -- Long-term Deposits to 'BB+' from 'BBB-';

     -- Individual to 'C/D' from 'C';

     -- Rating Outlook Negative.

                   AmeriServ Capital Trust I

     -- Trust Preferred to 'B+' from 'BB';

     -- Rating Outlook Negative.

Ratings affirmed, Removed from Rating Watch Negative:

                   AmeriServ Financial Bank

     -- Long-term 'BB+'.

                    Ratings Affirmed:

                   AmeriServ Financial, Inc.

     -- Short-term 'B';

     -- Support '5';

                   AmeriServ Financial Bank

     -- Short-term 'B';

     -- Short-term deposits 'B';

     -- Support '5'.


ANC RENTAL: Consolidating Operations at Minneapolis-St. Paul
------------------------------------------------------------
Mark J. Packel, Esq., at Blank Rome Comisky & McCauley LLP,
in Wilmington, Delaware, informs the Court that ANC Rental
Corporation and its debtor-affiliates currently are operating
the Alamo and National brand names separately at the
Minneapolis-St. Paul International Airport in Minneapolis-St.
Paul, Minnesota.  The Debtors, however, would like to operate
the two brand names under ANC Rental Corp.

By this motion, the Debtors seek the Court's authority to:

A. reject the Alamo Concession Agreement, the Alamo Consortium
   Agreement and the Alamo Fuel Services Agreement, and

B. assume the National Concession Agreement, the National
   Consortium Agreement and the National Fuel Service Agreement
   and to assign them to ANC.

None of the agreements, which were entered into by the Debtors
with the Metropolitan Airports Commission, prohibit dual
branding by a single concessionaire.

Mr. Packel informs the Court that to date, the Debtors owe the
Airports Commission $152,313 in prepetition expenses.  The
Debtors will pay this amount promptly after the Court approves
this motion.

In order to obtain the Commission's consent to the proposed
consolidation of the Debtors' operations, the Debtors will be
increasing their Minimum Annual Guarantee payment to $3,000,000
per year for the assumed remainder of the National Concession
Agreement term.  The Debtors will also arrange to have a
$1,500,000 replacement bond issued to the Commission in ANC's
name.  The Commission, in turn, will promptly release and return
to Alamo its Performance Bond marked "cancelled".

Mr. Packel asserts that approval of this motion will result in
cost savings up to $3,173,000 per year in fixed facility costs
and other operational cost savings. (ANC Rental Bankruptcy News,
Issue No. 21; Bankruptcy Creditors' Service, Inc., 609/392-0900)


AQUILA INC: Will Publish Third Quarter Results on November 14
-------------------------------------------------------------
Aquila, Inc. (NYSE:ILA) -- whose preferred stock is currently
rated by Fitch at BB+ -- announced that its board of directors
has elected to align the schedule for its future board meetings
and earnings conference calls more closely with the dates for
periodic reporting established by the Securities and Exchange
Commission.

As a result, the next meeting of the Aquila board, which
includes consideration of the quarterly dividend, will now take
place on November 13 instead of November 6 as originally
scheduled. The company's third-quarter earnings announcement and
conference call are planned for November 14.

"After examining all the recent changes in standards for
corporate governance and financial reporting, it was clear that
a new approach would best serve the interests of shareholders
and the investment community," said Aquila Chairman and Chief
Executive Officer Richard C. Green, Jr.

The schedule change eliminates the lag time that historically
has occurred between Aquila's announcements of financial results
and its 10-Q filings with the SEC. Having the announcements on
or close to the filing dates will ensure greater consistency
between earlier drafts received by the Audit Committee and what
ultimately is publicly filed. It will also enable Aquila to make
a smooth transition to new governance and disclosure
regulations.

Aquila has tentatively scheduled its conference call on third-
quarter financial results for 9:00 a.m. Eastern Standard Time,
Thursday, November 14, the day it will release earnings and file
its quarterly 10-Q report.

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


ARMILLARE TECHNOLOGIES: Auctioning-Off Former Assets on Friday
--------------------------------------------------------------
                        UCC AUCTION
                      FORMER ASSETS OF
                ARMILLARE TECHNOLOGIES, INC.
                   BY ORDER OF LANDLORD
                  
                   10411 Motor City Drive
                          4th Floor
                     Bethesda, Maryland

               October 24, 2002 at 11:00 a.m.

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PowerEdge 6450, 2550, 1550, 1440, Sun Enterprise 450, Enterprise
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Switches, Lucent PSAX 2300, PSAX 1250 & Modules. Network/Telecom
Test Equipment including Inet Spectra Emulator (qty 9), Eastern
Research DNX11-AC, Spirent Adtech AX/4000 (qty 2) Digital
Lightwave Network Access Agent, Excel EXS 2002 Switch (qty 2),
Spirent Abacus Advanced Bulk Call Simulator (qty 4).
Computers/Furniture, Gateway Pill Towers w/21" Flat Tube
Monitors (60+), HP LaserJet 8150DN, 8100, High Tech Work
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                   http://www.tranzon.com

BALLY TOTAL: Fitch Affirms Senior Credit Facility Rating at BB-
---------------------------------------------------------------
Fitch Ratings has affirmed its senior secured bank credit
facility rating on Bally Total Fitness Holdings Corp., of 'BB-'.
The rating on the senior subordinated notes has been downgraded
one notch to 'B' from 'B+' reflecting Fitch's current notching
guidelines which require a two notch differential between senior
secured debt and subordinated debt. Of BFT's total balance sheet
debt of $716 million, approximately $300 million is affected by
the downgrade. The Rating Outlook has changed to Negative from
Stable.

BFT has grown via acquisition and the building of new clubs over
the past several years. The combination of acquisitions and the
growth of its financed membership business model have resulted
in an increase in total leverage. Total adjusted leverage has
increased slightly for the LTM 6/30/02 to 6.5 times vs. 6.3x for
FY 2001. EBITDAR/interest plus rents has increased to 1.5x for
the LTM 2002 vs. 1.4x for FY 2001. Softness in new member sign-
ups, which represent approximately 30% of BFT's revenues, as
well as slightly lower operating margins from aggressive club
expansion will likely result in EBITDA for FY 2002 in line with
FY 2001. Going forward, Fitch anticipates that the company will
reduce capital spending in the near term in order to integrate
and focus on recent acquisitions as well as improve operating
margins and EBITDA. The company has several avenues of outside
liquidity including its secured bank line as well as parcel
sales of its receivables portfolio.

The change in Rating Outlook to Negative from Stable reflects a
more challenging retail and economic environment. BFT's
operating margins have been impacted by slower new member sign-
ups as well as a higher proportion of new clubs which take time
to achieve profitability. Somewhat offsetting these risks is the
company's efforts to improve operating margins via the sale of
ancillary products as well as the steady stream of income from
its mature, dues paying clientele. The Rating Outlook also
considers the company's leveraged balance sheet and the
challenge of attracting new members in the current weak economy.


BCE INC: Commences Public Offering to Raise CDN$1.5 Billion
-----------------------------------------------------------
Further to BCE Inc.'s (TSX, NYSE: BCE) August 1st, 2002 shelf
prospectus filing, it has initiated a public offering of BCE
debt securities to raise approximately C$1.5 billion. A draft
prospectus supplement relating to this public offering has been
filed with all Canadian provincial securities regulatory
authorities.

BCE has invited a syndicate of underwriters to place the BCE
public debt offering. TD Securities Inc., will act as lead
manager and book-runner and Merrill Lynch Canada Inc., will act
as co lead-manager.

The net proceeds resulting from this offering will be used to
pay part of the acquisition price of SBC Communications Inc.'s
indirect minority interest in Bell Canada.

BCE is Canada's largest communications company. It has 24
million customer connections through the wireline, wireless,
data/Internet and satellite services it provides, largely under
the Bell brand. BCE leverages those connections with extensive
content creation capabilities through Bell Globemedia which
features some of the strongest brands in the industry 3/4 CTV,
Canada's leading private broadcaster, The Globe and Mail, the
leading Canadian daily national newspaper and Sympatico.ca, the
leading Canadian Internet portal. As well, BCE has extensive e-
commerce capabilities provided under the BCE Emergis brand. BCE
shares are listed in Canada, the United States and Europe.


BROADWAY TRADING: Wants to Hire DG Simon as Tax Consultants
-----------------------------------------------------------
Broadway Trading LLC and its debtor-affiliates tell the U.S.
Bankruptcy Court for the Southern District of New York that they
require the services of DG Simon & Associates PC as tax
consultants in connection with their chapter 11 cases.

DG Simon will be engaged to:

     (a) prepare tax returns for the Debtors; and

     (b) assist and advise the Debtors concerning the terms,
         conditions and impact of any transaction proposed.

The Debtors assure the Court that DG Simon's services won't
duplicate services provided by any other consultants,
accountants or other professionals employed by the Debtors.  
DG Simon and all the Debtors' professionals will undertake every
reasonable effort to avoid any duplication of services.

The Debtors believe that the fees DG Simon charges for tax
consulting services are inherently reasonable, and the Debtors
agree to pay DG Simon:

          Dan Simon             $175 per hour
          staff accountants     $ 45 per hour

DG Simon estimates their tax consulting services at
approximately $4,000 per month.  Thus, the expected total cost
will range from $12,000 to $15,000 for approximately 85 hours of
work.

The primary services of the Company are provided by BTLLC. BTLLC
is an "introducing broker" which provides customers with stock
quote information and Internet trading capability through the
Mach(TM) platform software. William F. Gray, Esq., at Torys LLP
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from its creditors, it listed an
assets and debts of between $10 to $50 million.

   
BURLINGTON INDUSTRIES: Wins Nod to Amend $125MM DIP Credit Pact
---------------------------------------------------------------
Judge Newsome orders that:

    (a) Burlington Industries, Inc., and its debtor-affiliates
        are authorized to enter into the Amendment to their $125
        million DIP Credit Agreement; and

    (b) The Debtors are directed to provide adequate protection
        to the Prepetition Lenders, pursuant to Sections 361,
        362 and 363 of the Bankruptcy Code, which consists of:

        -- $11,300,000 payment from Net Proceeds of the Asset
           Sales, payable in accordance with the Payment
           Schedule; and

        -- a $33,700,000 cash payment payable immediately.

In connection with the increase of the Asset Sale Basket to
$31,300,000 pursuant to the new Section 6.11(vi) of the Credit
Agreement, the Payment Schedule reflects that:

    (a) the first $1,300,000 of the Net Proceeds of the Asset
        Sales will be paid to the Prepetition Lenders;

    (b) the second $10,00,000 of the Net Proceeds of the Asset
        Sales will be retained by the Debtors; and

    (c) the remaining $20,000,000 of the Net Proceeds of the
        Asset Sales will be divided equally among the Debtors
        and the Prepetition Lenders. (Burlington Bankruptcy
        News, Issue No. 20; Bankruptcy Creditors' Service, Inc.,
        609/392-0900)    

Burlington Industries' 7.25% bonds due 2005 (BRLG05USR1),
DebtTraders says, are trading at 28.5 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BRLG05USR1
for real-time bond pricing.


CARAVELLE: Fitch Keeps Watch on Low-B-Rated Class C & D Notes
-------------------------------------------------------------
Fitch Ratings has placed all the classes of notes issued by
Caravelle Investment Fund, LLC, a market value collateralized
debt obligation, on Rating Watch Negative.

The following securities have been placed on Rating Watch
Negative:

     -- $230 million Senior Secured Revolving Credit Facility,
        rated 'A';

     -- $89 million Class A Senior Secured Notes, rated 'A';

     -- $143 million Class B Senior Secured Notes, rated 'BBB';

     -- $78 million Class C Subordinated Secured Notes, rated
        'BB'; and

     -- $52 million Class D Junior Subordinated Participating
        Secured Notes, rated 'B'.

Fitch has taken this action after reviewing the performance of
the CDO and the notice sent to investors regarding the
overcollateralization test failure. As of the October 10, 2002
valuation date, the fund was out of compliance with its
overcollateralization test. If the test is not cured within ten
business days of the failure, the fund will be in default of its
overcollateralization covenant. At that time, the manager may be
forced, at the direction of the Controlling Class (revolving
credit facility and class A note holders), to liquidate
portfolio assets. The fund failed its October 10, 2002
overcollateralization test due to markdowns on publicly traded
loans and bonds as well as additional write downs of special
situation portfolio assets by Trimaran Advisors LLC, the asset
manager for Caravelle Investment Fund, LLC.

As of the most recently distributed Borrowing Base Calculation
Report dated October 3, 2002, Caravelle Investment Fund, LLC had
$3.7 million of cushion on the class D overcollateralization
test. It is unclear at this time, whether Caravelle Investment
Fund, LLC will be able to cure the reported failing
overcollateralization test within the required ten business day
period, how significant the additional write downs will be and
details of any liquidation plan, if needed.


CENTURY ALUMINUM: Will Suspend Preferred Dividend Payment
---------------------------------------------------------
Century Aluminum Company (Nasdaq:CENX) reported a net loss of
$7.8 million after preferred dividends, for the third quarter of
2002. Excluding the following items, Century would have recorded
a loss of $6.2 million:

     --  An after-tax, non-cash charge of $2.1 million, or $0.10
a share, for lower of cost or market inventory write downs;

     --  An after-tax charge of $1.0 million, or $0.05 a share,
to write off direct costs associated with a prospective
acquisition. The company will attempt to complete the
acquisition when financial markets improve;

     --  A benefit of $1.5 million, or $0.07 a share, from a
reduction in estimated income taxes.

Century reported that its cash balance during the quarter ended
September 30, 2002 rose $29.9 million to $50.1 million,
including a $17.5 million income tax refund. On October 15,
2002, the company made its semi-annual interest payment of $19.1
million.

In the third quarter of 2001, Century reported a net loss of
$3.8 million after preferred dividends. The loss in the 2001
quarter included:

     --  An after-tax, non-cash charge of $1.8 million, or $0.09
a share, for lower of cost or market inventory write downs; and

     --  The receipt of insurance settlements equal to $2.1
million, or $0.10 a share, after tax.

Sales in the third quarter of 2002 were $177.0 million compared
with $183.4 million in the third quarter of 2001. Shipments of
primary aluminum in the 2002 quarter were 262.3 million pounds
compared with 259.4 million pounds in the year-ago quarter.

The net loss for the first nine months of 2002 was $15.8
million, or $0.84 a common share after preferred dividends. This
compares with net income of $0.7 million, or a loss of $0.02 a
share, after payment of dividends on preferred shares, in the
comparable period of 2001.

Sales in the first nine months of 2002 were $536.4 million,
compared with $483.0 million in the year-ago period. Shipments
of primary aluminum for the 2002 period were 787.8 million
pounds compared with 663.8 million pounds in the year-ago
period. The financial results for the nine-month period of 2001
do not include the first quarter 2001 performance of Century's
80-percent owned aluminum reduction plant at Hawesville, KY. The
plant was acquired in April 2001.

Century also announced that it will suspend its common and
preferred stock dividends beginning in the current quarter. The
action is being taken because the company is very near the
limits on allowable dividend payments under the covenants in its
bond indenture, and due to current economic conditions.

Commenting on the results, Century Chairman and Chief Executive
Officer Craig A. Davis said: "Conditions in world aluminum
markets remain very depressed. We continue to generate positive
cash flow and to focus on our operating performance and cost-
reduction programs."

Company Description: Century owns 465,000 metric tons per year
(mtpy) of primary aluminum capacity at three locations. It owns
and operates a 168,000-mtpy plant at Ravenswood, WV and owns 80
percent of and operates a 237,000-mtpy plant at Hawesville, KY.
Glencore owns the remainder. Century also owns a 49.67 percent
interest in a 215,000-mtpy reduction plant at Mt. Holly, SC.
Alcoa, Inc., owns the remainder and is the operating partner.
Century's headquarters are in Monterey, CA.


COLUMBUS MCKINNON: Reports Improved Results for Second Quarter
--------------------------------------------------------------
Columbus McKinnon Corporation (Nasdaq: CMCO), announced its
financial results for the fiscal 2003 second quarter, which
ended on September 29, 2002. Prior period results have been
restated to reflect the classification of the business of the
Company's subsidiary, Automatic Systems, Inc., as discontinued
operations.  The sale of the ASI Business, the principal
business unit in the Company's former Solutions -- Automotive
segment, was announced on May 13, 2002 and reported in the
fiscal 2002 financial statements.

Columbus McKinnon's fiscal 2003 second quarter consolidated net
sales from continuing operations were $113.2 million, compared
with $122.5 million a year ago, a decrease of 7.6%.  Income from
continuing operations for the second quarter of fiscal 2003 was
$1.0 million, up $0.7 million from $0.3 million in the second
quarter of fiscal 2002.  The fiscal 2002 quarterly results
included a restructuring charge of $0.7 million related to the
Company's facility and product rationalization initiatives and
goodwill amortization of $2.8 million.

Net sales from continuing operations for the first six months of
fiscal 2003 were $227.1 million, compared with $251.6 million in
the same period last year, a decrease of 9.7%.  The Company's
income from continuing operations before cumulative effect of
accounting change for the six months of fiscal 2003 was $4.5
million, compared with a net loss from continuing operations of
$2.6 million for the first six months of fiscal 2002.  Fiscal
2003 year-to-date results included a $3.5 million pre-tax gain,
approximately $2.1 million after tax, under  "interest and other
expense, net" related to the sale of the equity portfolio of the
Company's captive insurance subsidiary.  Fiscal 2002 year-to-
date results included $9.6 million of restructuring charges
related to the Company's facility and product rationalization
initiatives which were primarily recorded in the fiscal 2002
first quarter and goodwill amortization of $5.5 million.  The
net loss for the first six months of fiscal 2003, which included
a non-cash goodwill impairment charge of $8.0 million, was $3.5
million, compared with a net loss of $6.0 million for the six
months of fiscal 2002.

"Although sales were down from last year, they were ahead of our
internal expectations," said Timothy T. Tevens, President and
Chief Executive Officer. "While industrial market conditions
remain weak, we are seeing some favorable signs with September
being our strongest bookings month in the last year.  We
continue to maintain our leading market share in key product
lines and, despite lower volumes, our margins are holding up
reasonably well due to our initiatives to reduce our cost
structure."

Tevens added, "We remain focused on debt reduction and during
the first half of fiscal 2003 reduced debt by $24.9 million,
with $8.9 million coming from operating funds and the remainder
from the proceeds of the sale of the ASI Business.  In addition,
our overall domestic decrease in inventories of $3.6 million was
more than offset by a temporary $5.0 million increase in
European inventories primarily to support Solutions projects in
process. Going forward, we intend to apply all excess cash
generated to paying down debt."  During the quarter ended
September 29, 2002, the Company violated certain debt covenants
related to its senior credit agreement for which non- compliance
was waived by the lenders.

On September 6, 2002, the Company withdrew its registration
statement for a follow-on offering of common stock due to market
conditions.  Additionally, as previously announced, the Company
is in process of negotiating with its senior banks for a new
credit agreement, which it expects to complete in early November
2002.

During the fiscal 2003 second quarter, the Company completed the
valuation of its intangible assets, conducted in accordance with
its adoption of Statement of Financial Accounting Standard
(SFAS) No. 142, "Goodwill and Other Intangible Assets."  As a
result of this valuation, an impairment charge of $8.0 million
was recorded as a cumulative effect of an accounting change as
of April 1, 2002.  The impairment charge impacted the crane
builder business that is part of the Products segment and the
Univeyor business that is part of the Solutions segment. Based
on its adoption of SFAS No. 142, the Company no longer records
amortization expense for goodwill, which amounted to $2.8
million from continuing operations in the fiscal 2002 second
quarter, and $5.5 million for the first six months of fiscal
2002.

"Although it remains difficult to predict how quickly, and to
what degree, general and industrial economic conditions will
improve, our Lean Manufacturing and product and facility
rationalization initiatives have significantly reduced our cost
structure and will ensure that we remain competitive and are
more profitable at higher volumes," Tevens said.  "We are
encouraged that recent sales have stabilized near the levels of
the first quarter of fiscal 2003 and the fourth quarter of
fiscal 2002.  Our strategy to resume growth and increase
profitability is focused on maintaining Columbus McKinnon's
position as the leading North American producer of hoists and
chain and further reducing costs and debt, while also continuing
to enhance our product offerings and increase our global market
presence."

Columbus McKinnon is a leading worldwide designer and
manufacturer of material handling products, systems and
services, which efficiently and ergonomically move, lift,
position or secure material.  Key products include hoists,
cranes, chain and forged attachments.  The Company is focused on
commercial and industrial applications that require the safety
and quality provided by its superior design and engineering
know-how.  Comprehensive information on Columbus McKinnon is
available on its Web site at http://www.cmworks.com  

As reported in Troubled Company Reporter's September 12, 2002
edition, Standard & Poor's lowered its corporate credit
rating on Columbus McKinnon Corp., to single-'B' from single-
'B'-plus following the company's announcement that it had
withdrawn its registration statement for a follow-on public
equity offering.

Proceeds from the offering were expected to be used to reduce
debt, which would have modestly improved the company's
aggressive financial profile. At the same time, Standard &
Poor's removed the rating from CreditWatch. The rating action
affects about $325 million in outstanding debt securities. The
outlook is stable.


COMDISCO INC: Inks Sale Agreements for Several European Assets
--------------------------------------------------------------
Comdisco Holding Company, Inc., (OTC:CDCO) has entered into an
agreement for the sale of its French operations, Comdisco France
SA and Promodata SNC, to Belgium-based computer services
provider, ECONOCOM Group. The sale is contingent upon French
regulatory approval. Terms were not disclosed.

Comdisco also announced that it has sold its Swiss and Austrian-
based operations. The Swiss operations have been sold to
Comprendium SA, owned by Thomas Flohr, who until January 2001
served as President of Comdisco Europe. Comdisco's Austrian
operations have been sold to PH Holding GmbH, owned by Peter
Huber, who until the sale had been serving as the regional
manager for Comdisco's Austrian and Swiss operations. Terms were
not disclosed for either sale.

Each of the transactions resulted from an extensive offering and
competitive bidding process run by the company's independent
investment banking firm. The operations in France, Switzerland
and Austria comprised approximately 13 percent, 3 percent and 2
percent, respectively, of Comdisco's total European assets as of
June 30, 2002.

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


CONTOUR ENERGY: Court Okays Weil Gotshal as Committee's Counsel
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas
gave its stamp approval to the Official Committee of Unsecured
Creditors' application to employ Weil, Gotshal & Manges LLP as
counsel in the chapter 11 cases involving Contour Energy Co.

Weil Gotshal will:

  a) consult with the Committee, the Debtors and the United
     States Trustee concerning the administration of these
     cases;

  b) review, analyze and respond to all pleadings filed by the
     Debtors with this Court, and to participate in all hearings
     on such pleadings;

  c) investigate the acts, conduct, assets, liabilities and
     financial condition of the Debtors, the operation of the
     Debtors' businesses, and the desirability of proposals to
     restructure such operations, and any matters relevant to
     these cases in the event and to the extent required by the
     Committee;

  d) take all necessary action to protect the rights and
     interests of the Debtors' unsecured creditors, including
     negotiations and preparations of documents relating to the
     Debtors' plan of reorganization and disclosure statement
     and confirming of such plans;

  e) represent the Committee in connection with the exercise of
     its powers and duties under the Bankruptcy Code in
     connection with these chapter 11 cases; and

  f) perform all other necessary legal services in connection
     with these chapter 11 cases.

Weil Gotshal's usual and customary hourly rates in its Houston
offices range from:

          Partners and Counsels      $410 to $665 per hour
          Associates                 $200 to $450 per hour
          Paraprofessionals          $ 50 to $175 per hour

Contour Energy Co., a company engaged in the exploration,
development acquisition and production of oil and natural gas
primarily in south and north Louisiana, the Gulf of Mexico and
South Texas, filed for chapter 11 protection on July 15, 2002.
John F. Higgins, IV, Esq., and Porter & Hedges, LLP represents
the Debtors in their restructuring efforts. When the Company
filed for protection from its creditors, it listed $153,634,032
in assets and $272,097,004 in debts.


DAYTON SUPERIOR: Moody's Hatchets Ratings over Weak Performance
---------------------------------------------------------------
Moody's Investors Service downgraded several ratings of Dayton
Superior Corporation. Outlook is changed to negative.

         Rating Actions                     To           From

* Senior implied rating                     B3            B1

* Senior unsecured issuer rating            Caa1          B1

* $202 million senior secured bank
  facility due 2006-2008                    B2            Ba3

* $170 million of 13% senior
  subordinated notes due 6/15/2009          Caa2          B3

The rating action mirrors the company's heavy debt leverage,
weakened credit protection measures and slowdown of markets.
Moody's also predicts that future transactions of the company
will rely on debt financing.

However, Moody's also took into account the company's strengths:
its leading market share position in its core businesses, low
cost structure and national distribution system, and its 78-year
history.

Dayton is currently in compliance with its bank covenants and is
projected to be in compliance for the rest of the year but
Moody's is concerned that Dayton may not be able to satisfy
future covenants if its markets continue to erode.  
   
Dayton Superior, headquartered in Dayton, Ohio, is the largest
manufacturer and distributor of metal accessories and forms used
in concrete and masonry construction.   

DebtTraders reports that Dayton Superior Corp.'s 13% bonds due
2009 (DSD09USR1) are trading at 99.849 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=DSD09USR1for  
real-time bond pricing.


DELTA MILLS: First Quarter Net Sales Climb-Up 25% to $46.2 Mill.
----------------------------------------------------------------
Delta Mills, Inc., (NYSE-DLW) -- whose corporate credit rating
is currently rated at CCC by Standard & Poor's -- reported net
sales of $46.2 million for the quarter ended September 28, 2002,
an increase of 24.9% when compared to net sales of $37.0 million
for the quarter ended September 29, 2001.

The Company reported an operating profit of $3.1 million
compared to an operating loss of $10.2 million in the previous
year quarter. The operating loss for the previous year quarter
included an $8.7 million loss associated with the closing of the
Furman Plant. The Company reported net income of $1.4 million in
the current year quarter compared to a net loss of $8.2 million
for the quarter ended September 29, 2001. Net income for the  
current year quarter included an after tax gain of $454,000 from
the repurchase by the Company of a portion of its 9-5/8% senior
notes.

Delta Mills, Inc., headquartered in Greenville, South Carolina,
manufactures and sells textile products for the apparel
industry. The Company, which employs about 1,800 people,
operates six plants located in North and South Carolina.


DESA HOLDINGS: Taps PwC as Executive Compensation Consultants
-------------------------------------------------------------
DESA Holdings Corporation and its domestic subsidiary, DESA
International, Inc., obtained court approval from the U.S.
Bankruptcy Court for the District of Delaware to employ and
retain PricewaterhouseCoopers LLP as executive compensation
consultant, nunc pro tunc to July 11, 2002.  PwC is being hired
to help design and implement a Key Employee Retention Program in
DESA's Chapter 11 Cases.

PricewaterhouseCoopers will:

  a) Review the Debtors' proposed key employee retention plan;

  b) Collect, compile and analyze competitive retention and
     severance plan data for similar, court-approved key
     employee retention plans;

  c) Compare competitive bankruptcy key employee retention plans
     to the Debtors' proposed plan; and

  d) Prepare a report setting forth a modified key employee
     retention program supported by comparable data.

PricewaterbouseCoopers will carry out unique functions and will
use reasonable efforts to coordinate with the Debtors' other
retained Professionals to avoid the unnecessary duplication of
services.

PricewaterhouseCoopers will bill for services at the Firm's
current hourly rates:

          Partners               $480
          Directors              $400
          Senior Managers        $400
          Managers               $325
          Senior Associates      $230
          Associates             $175

DESA, a leading manufacturer, distributor and marketer of vent-
free heating appliances, outdoor heaters, motion sensor
lighting, wireless doorbells, lawn and garden electrical
products and consumer fastening systems in the United States,
filed for chapter 11 protection on June 8, 2002. Laura Davis
Jones, Esq., at Pachulski, Stang, Ziehl Young & Jones represents
the Debtors in their restructuring efforts.


DLJ COMM'L: Fitch Affirms Low-B Ratings on Classes B-3 to B-8
-------------------------------------------------------------
DLJ Commercial Mortgage Corp's pass-through certificates, series
1999-CG1, $166.2 million class A-1A, $686.2 million class A-1B,
and interest-only class S are affirmed at 'AAA' by Fitch
Ratings. Also affirmed by Fitch: $58.9 million class A-2 at
'AA'; $65.1 million class A-3 at 'A'; $18.6 million class A-4 at
'A-'; $46.5 million class B-1 at 'BBB'; $15.5 million class B-2
at 'BBB-'; $37.2 million class B-3 at 'BB+'; $21.7 million class
B-4 at 'BB'; $9.3 million class B-5 at 'BB-'; $12.4 million
class B-6 at 'B+'; $12.4 million class B-7 at 'B'; and $12.4
million class B-8 at 'B-'. The $22.0 million class C is not
rated by Fitch. The rating affirmations follow Fitch's annual
review of the transaction, which closed in March 1999.

The certificates are collateralized by 275 fixed-rate mortgage
loans. Significant property type concentrations include
multifamily (36%) and retail (25%). The properties are located
in 36 states and Washington D.C., with significant
concentrations in TX (19%), CA (14%), and FL (10%). As of the
October 2002 distribution date, the pool's aggregate principal
balance has been reduced by 4.3% to $1.20 billion from $1.24
billion at closing. Four loans (1.7%) are currently in special
servicing. Of these, three loans (1.5%) are current and one loan
(0.19%) is 90+ days delinquent. Four loans (4.8%) have exposure
to Kmart. Of the four, only one of the Kmart leases has been
rejected. To date, there have been 3 losses in the transaction
totaling $2.9 million.

GEMSA Loan Services, the master servicer, collected year-end
2001 property financial statements for 99% of the pool. Based on
year-end 2001 information, the pool's weighted average debt
service coverage ratio has improved to 1.50 times from 1.41x at
issuance. Seven loans (1.1%) had a year-end 2001 DSCR below
1.00x, of these; two are already in special servicing. Eleven
loans (11.4%) were on the master servicer watchlist. Fitch
Ratings obtained a copy of the exception report from the
trustee, Wells Fargo, and found six loans with document
deficiencies.

The Winston Hotel Portfolio is the largest loan in the pool
(5.6%) and is credit assessed investment grade by Fitch. The
Winston Loan is secured by mortgages on the fee interests in 14
limited service hotel properties located in nine states. The
portfolio's operating performance continues to show year-to-year
declines; the weighted average DSCR for TTM June 2002 was 2.25x
down from 2.64x TTM June 2001 and 2.90x at issuance. TTM June
2002 occupancy was 66% down from 71% TTM June 2001 and 83% at
issuance. TTM June 2002 ADR was $56.24 down from $86.02 TTM June
2001 and $98.31 at issuance. TTM June 2002 RevPar was $37.22
down from $61.03 TTM June 2001 and $81.27 at issuance.

As part of Fitch's analysis, the loans of concern (specially
serviced loans, loans whose DSCR's were below 1.00x and the
Kmart loans), were assumed to default. The deal's general
overall performance has remained stable. There has been minimal
reduction in the deal's collateral balance and geographic and
property type concentrations are fixed. As a result of this
analysis, subordination levels remained sufficient enough to
affirm the ratings. Fitch will continue to monitor the
transaction as surveillance is ongoing.


ENCHIRA BIOTECHNOLOGY: Nasdaq Knocks-Off Shares Effective Oct 22
----------------------------------------------------------------
Enchira Biotechnology Corp., (Nasdaq: ENBC) announced that the
Nasdaq Listing Qualifications Panel had declined the Company's
request for additional time to regain compliance with the Nasdaq
SmallCap listing requirements. Accordingly, the Panel delisted
the Company's securities from the Nasdaq Stock Market effective
with the open of business October 22, 2002. Efforts are underway
for the stock to begin trading on the OTC Bulletin Board.

The Company further announced its progress in completing the
Asset Redeployment Plan.  In addition to hiring Howard, Frazier,
Barker & Elliott to assist in evaluating strategic alternatives
in the redeployment of assets and seeking merger or acquisition
partners or additional funding sources, the Company has taken
several additional steps to preserve its working capital while
reviewing its strategic alternatives.

In recent months the Company has:

     -- negotiated severance terms with prior top management and
eliminated all full-time employees except Paul G. Brown and Dr.
Daniel J. Monticello, who were retained on special contracts
following the downsizing in May, 2002 as President and Chief
Technology Officer respectively, to manage the substantial
downsizing of the Company and to coordinate efforts to find
merger or acquisition partners, seek additional funding and
redeploy corporate assets in the most efficient and cost
effective manner possible. When those special contract periods
were completed, Mr. Brown and Dr. Monticello agreed to continue
to work for the Company on a part-time basis;

     -- communicated with and evaluated multiple potential
merger partners and terms concerning multiple potential deal
structures, none of which has been found suitable or resulted in
additional funding to-date,

     -- consulted with the Company's outside counsel to identify
and consider alternatives and to review the possible courses of
action;

     -- consolidated laboratory and office space and minimized
associated space costs, including negotiations to sublet some
space and renegotiate terms of the existing lease and assisting
the building owner to reconfigure the space and find replacement
tenants/subtenants;

     -- sold surplus laboratory and office equipment;

     -- sold certain reports and intellectual property related
to the Company's discontinued biodesulfurization research at the
best prices obtainable in the market for this highly specialized
research;

     -- renegotiated and eliminated on-going licensing payments;

     -- screened and hired a replacement auditing firm after
Arthur Anderson ceased operations;

     -- undertaken multiple successful efforts to collect
accounts receivable, minimize operating costs, and preserve
working capital.

"Over the past several months, we have made every effort to
remain listed, preserve our working capital and work in the
interest of all the shareholders. Of course, we are very
disappointed with Nasdaq's decision, which severely limits our
options for the Company.  While we continue to explore
alternatives for the Company, we will in all likelihood proceed
with the dissolution plan we outlined in our last quarterly
report and disclosed in August," said Company President Paul
Brown.

Additional information is available at the Company's Web site at
http://www.enchira.com


ENRON: Proposes Uniform Retail Contract Sale Bidding Procedures
---------------------------------------------------------------
Enron Energy Services, Inc., wishes to subject the sale of the
Retail Contracts to Accent to a higher and better offer through
Auction.  Accordingly, Enron Energy asks the Court to:

  (a) approve the Bidding Procedures with respect to the
      proposed Sale, including, without limitation, the payment
      of a break-up fee to Accent;

  (b) approve the form and manner of the notice of the Sale,
      including the Assumption Notice to be sent to Customers;
      and

  (c) schedule the auctions with respect to the Retail
      Contracts.

On review of the documents presented, Judge Gonzalez approves
these Procedures:

                        Bidding Procedures

1. Initial Requirements:  Potential Bidder must deliver to Enron
   Energy:

   (a) an executed confidentiality agreement in form and
       substance satisfactory to Enron Energy; and

   (b) current audited financial statements.

   A "Qualified Bidder" is a Potential Bidder that delivers the
   Required documents and whose financial information
   demonstrates the financial capability of the Potential Bidder
   to consummate the purchase of the assets contemplated to be
   purchased and that Enron Energy determines, after
   consultation with the Creditors' Committee, is reasonably
   likely to be able to consummate a purchase of the Retail
   Contracts.  Seller will determine, after consultation with  
   the Creditors' Committee, whether any person, other than
   Accent, is a Qualified Bidder;

2. Information and Due Diligence:  Within two business days
   after the Potential Bidder delivers all of the required
   materials Enron Energy will determine, and will notify a
   Potential Bidder in writing, whether it is a Qualified
   Bidder.  At the same time, Enron Energy will deliver to the
   Qualified Bidder:

   (a) confidential information relating to the Retail Contracts
       that the Qualified Bidder is interested in purchasing;
       and

   (b) a copy of the relevant Purchase and Sale Agreement.

   To obtain due diligence access or additional information from
   Enron Energy, a Qualified Bidder must first advise Enron
   Energy in writing of its preliminary, non-binding proposal
   Regarding:

    (a) the assets sought to be acquired,

    (b) purchase price range,

    (c) the structure and financing of the transaction including
        sources of financing,

    (d) any additional conditions to closing that it may wish to
        impose, and

    (e) the nature and extent of additional due diligence it may
        wish to conduct;

3. Bid Deadline and Bid Requirements:  All bids must be    
   submitted to:

    (a) Leslie Ward
        Enron Energy Services, Inc.
        1400 Smith Street
        Houston, Texas 77002

        -- and --

    (b) Irena M. Goldstein, Esq.
        LeBoeuf, Lamb, Greene & MacRae, LLP
        125 West 55th Street
        New York, New York 10019

   not later than October 18, 2002, 4:00 p.m. (EST).  A Bid is a
   letter from a Qualified Bidder stating that:

   (a) the Bidder offers to purchase the Retail Contracts upon
       the terms and conditions of the Purchase and Sale
       Agreement, marked to show those amendments and
       modifications -- the "Marked Agreement" -- including, but
       not limited to price, any escrow or indemnities and the
       time of closing, that the Qualified Bidder proposes; and

   (b) the Bidder's offer is irrevocable until rejected by Enron
       Energy.  Enron Energy will provide a copy of all Bids to
       Accent and the Creditors' Committee;

4. Good Faith Deposit:  A Bidder will accompany its bid with a
   good faith deposit in an amount equal to 10% of its bid.  The
   Good Faith Deposit will be by:

   (a) wire transfer to the account of an escrow agent to be
       provided upon request, or

   (b) issuance, by a money center bank having capital of at
       least $100 million, of an irrevocable letter of credit
       for the benefit of Enron Energy in a form satisfactory to
       Enron Energy in all respects.

   In the case of a wire transfer, the Good Faith Deposit will
   be held by an escrow agent in an escrow account together with
   any interest earned thereon, and will be returned to any
   Bidder whose Bid is not accepted by Enron Energy within three
   business days of the consummation of the proposed sale.  The
   Good Faith Deposit of the successful Bidder, together with
   any interest earned thereon, will be treated in accordance
   with the terms of the escrow agreement in the form to be
   mutually agreed upon by Enron Energy and Bidder and will be
   applied against the purchase price.

   Enron Energy will consider a bid only if the bid:

   (a) provides for consideration having a readily ascertainable
       fair market value of not less than 3% in excess of the
       sum of the Base Purchase Price plus the Termination
       Payment payable to Accent;

   (b) is on terms that, in Enron Energy's business judgment,
       after consultation with the Creditors' Committee, are not
       materially more burdensome to Enron Energy than the terms
       of the Purchase and Sale Agreement;

   (c) is not conditioned on obtaining financing or on the
       outcome of unperformed due diligence by the Bidder;

   (d) does not request or entitle the Bidder to any break-up
       fee, termination fee, expense reimbursement or similar
       type of payment; and

   (e) is likely to receive all governmental approvals.

   A Bid received from a Bidder that meets the requirements is a
   "Qualified Bid."  A Qualified Bid will be valued by Enron
   Energy, after consultation with the Creditors' Committee,
   based upon factors like:

   (a) the amount of the Qualified Bid,

   (b) the value of the assets not being purchased, if any,

   (c) the amount of Enron Energy's liabilities to be assumed,
       and

   (d) the net value provided to Enron Energy;

5. Auction, Bidding Increments, and Bids Remaining Open:  If
   Enron Energy receives a Qualified Bid from an entity other
   than Accent, Enron Energy will conduct auctions at the
   offices of LeBoeuf, Lamb, Greene & MacRae, LLP, 125 West 55th
   Street, New York, New York 10019 on October 22, 2002
   beginning at 10:00 a.m. (EST) or at a later time or other
   place as Enron Energy will notify all Qualified Bidders who
   have submitted Qualified Bids.  Only Accent, Enron Energy,
   representatives of the Creditors' Committee and any Qualified
   Bidders who have timely submitted Qualified Bids will be
   entitled to attend the Auction and only Accent and the
   Qualified Bidders will be entitled to make additional bids at
   the Auction.

   The opening bid at the Auction will not be less than $50,000
   greater than the highest Qualified Bid submitted for the
   Retail Contracts.

   All offers subsequent to the opening bid at the Auction must
   exceed the prior offer by not less than $50,000.  Bidding at
   the Auction will continue until the highest and best offer is
   determined.  Enron Energy may adopt rules for the bidding
   process that, in its judgment, after consultation with the
   Creditors' Committee, will better promote the goals of the
   bidding process and that are not inconsistent with any of the
   provisions of the Bidding Procedures Order.  Upon conclusion
   of the Auction, Enron Energy will review each Qualified Bid
   on the basis of financial and contractual terms and the
   factors relevant to the sale process, including those factors
   affecting the speed and certainty of consummating the sale
   with respect to the Retail Contracts, and after consultation
   with the Creditors' Committee, submit the highest or
   otherwise best bid for approval by this Court; and

6. Modifications:  Enron Energy will determine, in its business
   judgment, after consultation with the Creditors' Committee,
   which Qualified Bid, if any, is the highest or otherwise best
   offer and may reject at any time before entry of an order of
   the Court approving a Qualified Bid, any bid that, in its
   sole discretion, after consultation with the Creditors'
   Committee, is:

   (a) inadequate or insufficient,

   (b) not in conformity with the requirements of the Bankruptcy
       Code, the Bidding Procedures, or the terms and conditions
       of sale, or

   (c) contrary to the best interests of Enron Energy, its
       estate and its creditors.

   At or before the Sale Hearing, the Court or Enron Energy may
   impose other terms and conditions as they may determine
   to be in the best interests of Enron Energy's estate to the
   extent that the terms and conditions do not conflict with the
   terms of the relevant Purchase and Sale Agreement.

                        Notice Procedures

Enron Energy will serve this Motion at least 25 days prior to
the Sale Hearing in accordance with the Case Management Order
on:

    (a) the Office of the United States Trustee for the Southern
        District of New York;

    (b) counsel for Accent;

    (c) counsel for the DIP Lenders;

    (d) all entities known to have asserted any lien, claim,
        encumbrance, right of refusal or other property interest
        in or upon the Retail Contracts;

    (e) counsel for the Creditors' Committee and the Employment-
        Related Issues Committee;

    (f) all federal, state and local regulatory or taxing
        authorities or recording offices which have a reasonably
        known interest in the relief requested by this Motion;

    (g) all parties that have expressed a bona fide interest in
        acquiring the Retail Contracts;

    (h) the United States Attorney's Office;

    (i) all entities that have filed a notice of appearance and
        request for service of papers in these cases;

    (j) the Public Utility Commission for the State of
        California; and

    (k) the Utilities.

Enron Energy will, pursuant to Rule 2002(1) of the Federal Rules
of Bankruptcy Procedure, publish the notice of Sale once in the
national editions of The Wall Street Journal and The New York
Times, on or before five days prior to the Sale Hearing, be
deemed proper notice to any other interested parties whose
identities are unknown to Enron Energy.

At the Sale Hearing, Enron Energy will seek authority to assume
and assign the Retail Contracts to Accent or any successful
Bidder at the Auction.  Enron Energy will serve on each Customer
the Assumption Notice and Enron Energy has already served a
copy of the Sale Motion upon all relevant entities, except for
the Customers, in accordance with the Case Management Order.

To the best of Enron Energy's knowledge, the Customers are not
owed any amounts under the Retail Contracts.  However, if there
are Customers who believe that defaults exist under their Retail
Contracts required to be cured under Section 365(b) of the
Bankruptcy Code or otherwise object to the Sale of their Retail
Contracts are required to file with the Court an objection.

Unless a Customer files an Objection and serves a copy to Enron
Energy on or before 4:00 p.m. (EST) on October 18, 2002, the
Customer will be deemed to have consented to the assignment and
will be forever barred and estopped from asserting or claiming
against Enron Energy, Accent or any purchaser of the Retail
Contracts that any additional amounts are due or defaults exist,
or conditions to assignment must be satisfied under the Retail
Contract.

In the event that an Objection is filed, the Objection must set
forth the amount of the Cure Amount the Customer believes it is
owed or the grounds for objection to the proposed Sale.  In the
event that Enron Energy and the Customer cannot consensually
resolve the Objection, Enron Energy will segregate any disputed
cure amounts, pending the resolution of the disputes by the
Court or by mutual agreement of the parties.  Upon resolution of
each dispute, whether by order of the Court or mutual agreement,
Enron Energy will be authorized to assume, assign and sell the
respective Retail Contracts to Purchaser or other successful
bidder.

Irena M. Goldstein, Esq., at LeBoeuf, Lamb, Green & MacRae LLP,
in New York, relates that under the Purchase and Sale Agreement,
in the event that the Retail Contracts are sold to a third
party, Accent will be entitled to receive from Enron Energy, a
the "Termination Payment" equal to 2% of the Base Purchase Price
under the Purchase and Sale Agreement or, in the case of a
Partial Sale, a pro-rated portion thereof based on the aggregate
Purchase Price represented by the Retail Contracts subject to
the Third-Party Sale.  The Seller's obligation to pay any
Termination Payment will be entitled to administrative expense
claim status under Sections 503(b)(1)(A) and 507(A)(1) of the
Bankruptcy Code. The Termination Payment will be payable
directly from the cash component consideration of the Third-
Party Sale consummated by the Enron Energy.

Ms. Goldstein explains that the Termination Payments and
establishment of the Minimum Overbid Amounts are material
inducements for, and conditions of, Accent's entry into the
Purchase and Sale Agreement.  Enron Energy believes the
Termination Payment is fair and reasonable in view of the
analysis, due diligence investigation, and negotiation
undertaken by Accent in connection with the Sale.

Moreover, Ms. Goldstein asserts, payment of the Termination
Payments will not diminish Enron Energy's estate.  As set forth
in the Bidding Procedures, for a bid to be a Qualified Bid, the
bid must exceed Accent's bid by the Minimum Overbid Amount.
(Enron Bankruptcy News, Issue No. 46; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

Enron Corp.'s 9.125% bonds due 2003 (ENRN03USR1) are trading at
12 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ENRN03USR1
for real-time bond pricing.


EOTT ENERGY: Gets Okay to Pay $1.5MM of Critical Vendor Claims
--------------------------------------------------------------
EOTT Energy Partners, L.P., seeks the Court's authority "to pay
all, a portion of, or none of the Critical Vendor Claims as
determined by the Debtors in their sole discretion in order to
continue the vital goods and services provided by these critical
vendors."

The Debtors propose to condition the payment of any Critical
Vendor Claims on the agreement of each individual critical
vendor to continue supplying goods and services to the Debtors
on the trade terms that such critical vendor provided goods and
services to the Debtors on a historical basis prior to the
Petition Date. The Debtors reserve the right to negotiate new
trade terms with any critical vendor as a condition to payment
of any Critical Vendor Claim.

To ensure that the critical vendors deal with the Debtors on
Customary Trade Terms, the Debtors propose sending a letter to
each critical vendor relating:

    (a) The amount of the critical vendor's estimated Critical
        Vendor Claims, accounting for any setoffs, other credits
        and discounts thereto, which will be mutually
        determined in good faith by the critical vendor and the
        Debtors;

    (b) The Customary Trade Terms between the critical vendors
        and the Debtors, or other terms as the critical vendors
        and the Debtors may agree and the critical vendor's
        agreement to provide goods and services to the Debtors
        based upon Customary Trade Terms or on such other
        favorable terms as the Debtors and the critical vendor
        may otherwise agree;

    (c) The critical vendor's agreement to the extent the
        critical vendor has already obtained or otherwise
        asserted a lien to take whatever actions are necessary
        to remove such lien;

    (d) The critical vendor's acknowledgement that it has
        reviewed the terms and provisions of the Critical Vendor
        Order and consents to be bound by its terms; and

    (e) The critical vendor's agreement that it will not
        separately seek payment for reclamation claims outside
        the terms of the Critical Vendor Order unless the
        critical vendor's participation in the program is
        terminated.

The Debtors further propose that each check used to pay a
Critical Vendor Claim will contain a restrictive endorsement.

Robert D. Albergotti, Esq., at Haynes and Boone, LLP, makes it
clear that the Debtors seek only the Court's authority to enter
into Trade Agreements when the Debtors determine in their
discretion that an agreement is necessary, and not to be
required to do so.  The Debtors seek authority, to make payments
on account of the Critical Vendor's Claims, notwithstanding the
fact that following diligent efforts to enter into a Trade
Agreement with a critical vendor, no Trade Agreement has been
reached, if the Debtors determine, in their business judgment,
that failure to pay the Critical Vendor Claim is likely to
result in irreparable harm to the Debtors' business operations.  
Moreover, Mr. Albergotti says, nothing in this Motion should be
construed as a waiver by any of the Debtors of their rights to
contest any invoice of a critical vendor under applicable non-
bankruptcy law.

The Debtors estimate that they might make payments totaling
$1,500,000 under this Critical Vendor Program.

                          *    *   *

Judge Schmidt authorizes the Debtors to pay the actual
prepetition claims of the Critical Vendor Claims, including:

    Vendor                                       Amount
    ------                                       ------
    A-C Electric Company Inc.                    $62,706
    Beall Trailers of Montana                     10,389
    Cananwill, Inc.                               58,931
    CDW Computer Centers, Inc.                    19,360
    Consolidated Pipe & Supply                    13,870
    Cypress Engineering                           15,437
    D.L. Peterson Trust                           41,839
    Dunican Fuels, Inc.                           16,308
    G.B. Boots Smith Corp.                        60,630
    HDB Ltd.                                      30,710
    MLM Services, LLC                             17,076
    N3 Consulting, Inc.                           42,445
    Spherion Corporation                          21,074
    Sun Coast Resources Inc.                      27,902
    Wright Express Financial Services            462,766
    Brown & Root Industrial                       18,094
    Catalysts Services, Inc.                      23,000
    GE Betz                                       15,139
    Jacobs Engineering Group Inc.                 16,702
    JE Merit Constructors, Inc.                   78,512
    Mobley Industrial Painters, Inc.              45,568
    Philip Reclamation Services                   11,603
    Pinkerton                                     10,503
    Praxair, Inc.                                 31,890
    Reliant Energy Solutions                      34,796
    Shaw Constructors, Inc.                       61,730
    Zak Resources Incorporated                    10,092
(EOTT Energy Bankruptcy News, Issue No. 2 & 3; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


EOTT ENERGY CORP: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: EOTT Energy Corp.
        2000 West Sam Houston Parkway South
        Suite 400
        Houston, Texas 77042

Bankruptcy Case No.: 02-21788

Type of Business: The company is a general partner of EOTT
                  Energy Partners, L.P.

Chapter 11 Petition Date: October 21, 2002

Court: Southern District of Texas (Corpus Christi)

Judge: Richard S. Schmidt

Debtors' Counsel: Robert D. Albergotti, Esq.
                  Haynes and Boone
                  901 Main Street
                  Suite 3100
                  Dallas, Texas 75202-9990
                  Tel: 214-651-5613
                  Fax : 214-200-0350

Total Assets: $100,000 to $500,000

Total Debts: More than $100 Million


EXODUS COMMS: Has Until Nov. 22 to Remove Prepetition Actions
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extends
the deadline within which EXDS Inc., formerly known as Exodus
Communications Inc., and the EXDS Plan Administrator may remove
prepetition State Court actions to the District of Delaware for
continued litigation and resolution, until November 22, 2002.


FAIRCHILD CORP: Commences Tender Offer for 10.75% Sr. Sub. Notes
----------------------------------------------------------------
The Fairchild Corporation (NYSE:FA) announced a tender offer for
any and all of its outstanding 10-3/4% Senior Subordinated Notes
due 2009.

In conjunction with the tender offer, Fairchild also announced a
consent solicitation to eliminate substantially all restrictive
covenants and certain events of default under the indenture
governing these notes.

Under the terms of the tender offer and the consent
solicitation, Fairchild will purchase for cash, tendered notes
at a purchase price for each $1,000 principal amount of tendered
notes equal to $1,000.00 plus accrued and unpaid interest on
such principal amount to the payment date. The purchase price of
$1,000 includes a consent payment of $10.00 for each $1,000
principal amount of notes tendered prior to the consent date.
The consent date will be 5:00 P.M., New York City time, on
November 4, 2002, unless extended. Holders who tender notes
after the consent date will not be paid the consent payment.

The tender offer will expire at 12:01 A.M., New York City time,
on November 20, 2002, unless extended by Fairchild. If the notes
are accepted for purchase, payment for tendered notes and
consents will occur promptly after the expiration of the offer
and concurrently with the closing of the sale by Fairchild of
its fastener business to Alcoa Inc. Consummation of the tender
offer, and payment for tendered notes, is subject to the
satisfaction or waiver of various conditions, including the
condition that there be validly tendered and not validly
withdrawn at least a majority of the outstanding aggregate
principal amount of notes and the condition that the sale by
Fairchild of its fastener business to Alcoa Inc. be consummated.

Banc of America Securities LLC is the Dealer Manager and
Solicitation Agent for the tender offer and the consent
solicitation. Persons with questions regarding the tender offer
and consent solicitation should contact Banc of America
Securities LLC at (888) 292-0070. The Information Agent is D.F.
King & Co., Inc.  Requests for tender offer and consent
solicitation materials should be directed to the Information
Agent at (800) 207-3158.

The Fairchild Corporation is a leading worldwide manufacturer
and supplier of precision fastening systems used in the
construction and maintenance of commercial and military
aircraft, and a distributor of aerospace parts. Fairchild
Fasteners has manufacturing facilities, as well as sales/design
customer teams in the United States, Germany, France, the United
Kingdom, Portugal, Hungary, and Australia. Because of its unique
ability to serve customers worldwide from its manufacturing and
logistics businesses, Fairchild Fasteners offers the market the
most complete and innovative solutions to the delivery,
stocking, and dispensing of fasteners. Banner Aerospace, The
Fairchild Corporation's aerospace distribution segment, provides
aircraft parts and services. The Fairchild Corporation also owns
a significant real estate investment. Additional information is
available on The Fairchild Corporation Web site at
http://www.fairchild.com


FLOWER FOODS: Fitch Affirms BB+ Senior Credit Facilities Ratings
----------------------------------------------------------------
Fitch Ratings affirmed its rating on Flowers Foods, Inc.'s
senior secured credit facilities at 'BB+'. Approximately $180
million of debt is outstanding on the bank facilities. The new
Rating Outlook is Positive, reflecting expectations of lower
leverage and improving cash flow from Mrs. Smith's.

Fitch's ratings for Flowers Foods consider the consistent cash
flow generated by the company's largest division, Flowers
Bakeries which holds the number one position in fresh baked
goods in 16 Southern States (serving 40% of the US population).
The rating is supported by management's conservative financial
policies; improving credit statistics; and low near term capital
requirements following $425 million of capital investment over
the past five years. The rating also reflects the continued
difficulties at Mrs. Smith's, the company's second largest
division as measured by revenue and lowest EBITDA contributor.
While Mrs. Smith's holds the number one retail position in
frozen pies, frozen desserts and cobblers in the United States,
it has experienced operational issues including problems at its
Spartanburg and Stilwell plants, as well as over-capacity. Mrs.
Smith's EBITDA margins are expected to improve, but remain the
weakest of Flower's three divisions, in the near-to-intermediate
term.

Total debt at July 13, 2002, was $260 million, a reduction of
$72 million since the March 2001 spin-off of Flowers Food, Inc.
and $61 million since July 14, 2001. Fitch expects debt to
decline to less than $200 million by the end of 2002. For the
latest twelve months ended July 13, 2002 total debt-to-EBITDA
improved modestly to 2.1x from 2.2x for the year ended December
29, 2001 and EBITDA-to-interest incurred grew to 5.1x from 3.2x.
Flowers Foods, with 2001 sales of $1.629 billion and EBITDA of
$116.1 million, is one of the largest producers and marketers of
bakery and dessert products for retail and foodservice in the
United States. The company is divided into three operating
groups: Flowers Bakeries, Mrs. Smith's, and Flowers Snack Group.
Flowers Bakeries, with 2001 sales of approximately $1.056
billion and EBITDA of approximately $114.8 million, produces and
markets fresh breads and rolls through direct store delivery in
the Southeast. Mrs. Smith's sells frozen baked products
nationally. Flowers Snack Group, previously part of Mrs. Smith's
focuses on the snack cake business. In 2001, combined sales for
Mrs. Smith's and Flowers Snack Group were approximately $573.1
million and EBITDA was approximately $25.8 million. In 2001,
corporate expenses reduced total EBITDA by approximately $24.5
million.

The company's brands include Mrs. Smith's, Nature's Own,
Cobblestone Mill and Mrs. Freshley's. Contact: Susan A. Falk,
CPA, 1-212-908-0745, New York or Wesley E. Moultrie II, CPA 1-
312-368-3186 or Judi V. Malter, CPA/CFA 1-312-368-2077, Chicago.


FLOWSERVE CORP: Repays $88.3 Million of Debt in Third Quarter
-------------------------------------------------------------
Flowserve Corp., (NYSE:FLS) -- which is currently rated by
Standard & Poor's at BB- due to the company's higher financial
risks -- reported net income of 17 cents a share in the third
quarter of 2002, compared with 15 cents a share in the year ago
quarter.

Excluding special items, net income was 31 cents a share in the
third quarter of 2002, in line with the company's recent
guidance, compared with 38 cents in the prior year period.

Third Quarter Highlights (Comparisons are versus third quarter
2001. Pro forma results give effect as if the acquisition of the
Flow Control Division of Invensys plc (IFC) had been completed
on Jan. 1, 2001.)

--  EPS - Up 13 percent.

--  EPS (excluding special items) - Down 18 percent.

--  Operating income (excluding special items) - Down 1 percent,
    down 30 percent pro forma.

--  Sales - Up 25 percent, down 3 percent pro forma.

--  Bookings - Up 19 percent, down 7 percent pro forma.

--  Net interest expense - Down 16 percent.

--  Debt - Repaid $88.3 million, $70 million more than required.

--  Net debt-to-capital ratio - Improves to 60.5 percent from
    80.2 percent.

--  Cash flow from operations - Improves to $45.8 million from
    $0.4 million.

--  DSO - Improves by 3 days compared with second quarter of
    2002.

                    Third Quarter Results

The company reported net income of $9.3 million in the third
quarter of 2002, compared with $5.8 million in the third quarter
of 2001.

Net income, excluding special items, was $16.9 million in the
third quarter of 2002, compared with $14.7 million in the prior
year period.

In the third quarter of 2002, special items generally relate to
the company's May 2, 2002 acquisition of the Flow Control
Division of Invensys plc and had an impact on earnings of 14
cents a share. They include integration and restructuring
expenses of $8.3 million, a negative purchase accounting
adjustment of $2.6 million associated with the required write-up
of inventory, which is included in the cost of sales, and an
extraordinary loss of $0.5 million, net of tax, resulting from
the non-cash write-off of deferred financing fees associated
with the non-mandatory debt prepayment in the quarter. Special
items in 2001 include integration expenses of $13.8 million
associated with the August 2000 acquisition of Ingersoll-Dresser
Pump Co.

                      Operating Income

Operating income, excluding special items, was $50.6 million in
the third quarter of 2002, compared with $51.3 million reported
and $72.5 million pro forma in the prior year period. Operating
margin, before special items, was 8.6 percent in the third
quarter of 2002, compared with 10.9 percent reported and 11.9
percent pro forma in the prior year period.

The declines between periods primarily reflect weakened
conditions in the chemical, general industrial, and power
sectors, particularly affecting higher margin book-and-ship, or
quick turnaround business including industrial pumps, manual
valves and service. Third quarter 2002 results also reflect an
unfavorable mix of lower margin project business compared with
the prior year period. In addition, 2002 results were impacted
by underabsorbed overhead due to decreased throughput at certain
plants due to lower volume and reductions of finished goods
inventories.

IFC continued to enhance consolidated results by generating
approximately $14.2 million of operating income and operating
margin of 11.6 percent in the third quarter of 2002, before
special items.

Company earnings were affected by the $5.5 million, or 7 cents a
share, benefit of compliance with SFAS 141 and 142.

Earnings before interest, taxes, depreciation and amortization,
excluding special items, were $67.9 million in the third quarter
of 2002, compared with $69.6 million reported and $98.1 million
pro forma in the third quarter of 2001.

                       Sales and Bookings

Third quarter 2002 sales were $586.7 million compared with
$469.6 million reported and $607.6 million pro forma in the
prior year period. Third quarter 2002 bookings were $578.0
million compared with $485.6 million and $620.4 million pro
forma in the prior year period. Third quarter 2002 bookings and
sales were adversely affected by weakened market conditions in
the chemical, power, and general industrial sectors, as
previously discussed. Currency translation had little impact on
third quarter 2002 bookings and sales.

        Cash Flow Remains Solid, Working Capital Improves

Cash flow from operations was $45.8 million in the third quarter
of 2002, compared with $0.4 million in the third quarter of
2001. In the third quarter, special items that used operating
cash were $8.0 million in 2002 compared with $19.0 million in
2001. Year-to-date, operating cash flow generated was $125.9
million compared with a use of $72.6 million in the first nine
months of 2001.

Working capital utilization improved as working capital declined
$70.7 million, or 10.3 percent, in the third quarter of 2002
compared with this year's second quarter. Accounts receivable
declined $47.7 million, or 9 percent, to $510.3 million in the
third quarter of 2002 compared with the second quarter of 2002.
Days sales outstanding improved to 78 days in the third quarter
of 2002 compared with 81 days in this year's second quarter.
Inventories declined nearly $1 million, to $485.8 million, in
the third quarter of 2002 compared with the preceding quarter of
2002.

Flowserve Chairman, President and Chief Executive Officer C.
Scott Greer said, "While we are encountering cyclically weak
conditions in our end-user markets, we are concentrating on
generating solid cash flow, aggressively paying down debt and
continuing the IFC integration. We will continue to diligently
implement our cost-cutting programs so that when our key markets
rebound, a much stronger platform will be in place to produce
strong earnings growth."

                 Net Interest Expense Declines

Third quarter 2002 net interest expense fell 16 percent to $23.8
million compared with $28.3 million in the year ago quarter.
This improvement reflects repayments of higher cost debt in the
fourth quarter of 2001, renegotiation of the company's debt
facilities at lower rates, and the decline in market interest
rates.

                         Debt Reduced

The company repaid $88.3 million of debt on Sept. 30, 2002. At
the end of the quarter, net debt was $41.1 million lower
compared with the end of the second quarter of 2002. The
company's net debt-to-capital ratio improved to 60.5 percent at
the end of the third quarter of 2002, from 61.1 percent at the
end of the second quarter of 2002, 71.3 percent at year end
2001, and 80.2 percent at the end of the third quarter of 2001.

"Debt reduction continues to be a primary area of focus," Greer
said. "We again demonstrated this in the third quarter as we
made an optional debt prepayment of $70.0 million, in addition
to the scheduled repayment of $18.3 million. This is
particularly significant in that we are simultaneously funding
the integration costs of IFC. Because of our anticipated strong
cash flow, we expect both to make additional optional
prepayments in future periods and to continue to reduce debt as
rapidly as possible."

                      Comparable Operations

From comparable operations (excluding IFC) and excluding special
items, third quarter 2002 operating income was approximately
$36.5 million. Third quarter 2002 sales from comparable
operations were approximately $465.5 million while bookings were
approximately $468.2 million.

                Realignment of Operating Segments

As previously announced, beginning with the third quarter of
2002, the company realigned its operating segments. Under this
new organization, the Flow Solutions Division (FSD) includes the
seals business only, with the pump and valve service businesses
being included in the Flowserve Pump Division (FPD) and Flow
Control Division (FCD), respectively. Segment information
reflects the organizational changes in all periods.

             Soft Markets, Unfavorable Mix Hinder FPD

FPD reported operating income of $25.2 million in the third
quarter of 2002, compared with $32.0 million, before special
items, in the year ago period. Third quarter 2002 sales were
$291.7 million compared with $280.9 million in the third quarter
of 2001. Third quarter operating margin was 8.6 percent compared
with 11.4 percent, before special items, in last year's third
quarter.

"The declines in operating income and margin despite higher
sales primarily reflect the weaker conditions in the chemical,
general industrial, and power sectors and the unfavorable mix of
project business, which typically carries lower margins than our
quick turnaround and aftermarket business," Greer explained.
"Results were also impacted by underabsorbed overhead at certain
pump plants due to lower production volumes and reductions in
finished goods inventories."

               Weak Markets, Lower Volume Hurt FCD

Operating income, before special items, was $15.8 million in the
third quarter of 2002, compared with $10.8 million reported and
$31.2 million pro forma in the year ago quarter. Third quarter
2002 sales were $218.2 million compared with $112.3 million
reported and $249.8 million pro forma in the prior year period.
Operating margin, before special items, declined to 7.2 percent
compared with 9.6 percent reported and 12.5 percent pro forma in
last year's third quarter.

Similar to the pump business, FCD's results were impacted by the
weakness in certain key markets and underabsorption issues
related to lower volume and reductions in finished goods
inventories. "Because of FCD's relatively higher dependence on
the chemical and general industrial sectors, the weakness in
these markets had a significant impact on sales and, thus, on
income and margins," Greer said. "This was further exacerbated
by the underabsorption."

            FSD Operating Income Increases 9 Percent

FSD third quarter 2002 operating income increased 9 percent to
$17.6 million, compared with $16.2 million in the year ago
quarter. Third quarter 2002 sales increased 2 percent to $86.4
million, compared with $84.8 million in the third quarter of the
prior year. Operating margin improved 130 basis points to 20.4
percent.

"Our seals business is performing well, despite the challenging
market environment," Greer said. "Its results reflect improved
productivity and a sharp focus on costs. In addition, FSD's
results show that it is further along in implementing the
Flowserve business model compared with our other divisions. One
of the linchpins of this model is our customer-first philosophy,
which encompasses market awareness, pre-sales support, product
management, and post-delivery support. This value-added approach
helps us develop and maintain strong customer relationships and
helps reduce the volatility in our business during challenging
market conditions."

                         Outlook

"While our long term outlook for our key end-markets remains
positive, we remain guarded in our short-term view," Greer said.
"The quick turnaround business in the chemical, general
industrial, and power sectors shows few signs of a near-term
rebound, though we are convinced that these depressed levels
cannot continue indefinitely and could begin to improve in 2003.
Water and upstream petroleum-related business continues to hold
up reasonably well. We are continuing to book a fairly good
level of project business in these areas. That said, project
business typically does not generate margins as high as those in
our quick turnaround business. These factors will continue to
affect our operating results in the near term.

"Our current focus is to work hard on things that are within our
control. We are making progress in improving our balance sheet
and working capital, reducing debt, and improving our cost
structure. As we recently announced, the IFC integration is on
track and we have increased our annual run-rate synergy savings
estimates to $15 to 20 million," Greer said.

For the fourth quarter of 2002, the company estimates earnings
per share, excluding special items, in the range of 40 to 50
cents, based on average outstanding shares of approximately 55.3
million. For full year 2002, the company continues to estimate
earnings per share, excluding special items, in the range of
$1.45 to $1.55, based on average outstanding shares of
approximately 52.5 million. The company noted that the sum of
the 2002 quarterly earnings per share figures will not equal the
full year calculation because of the differences in the average
number of outstanding shares in the periods. Flowserve issued
9.2 million shares of common stock in the second quarter of 2002
in conjunction with its acquisition of IFC.

Flowserve Corp., is one of the world's leading providers of
industrial flow management services. Operating in 34 countries,
the company produces engineered and industrial pumps for the
process industries, precision mechanical seals, automated and
manual quarter-turn valves, control valves and valve actuators,
and provides a range of related flow management services.


FOAMEX CORP: Moody's Changes Outlook on Ratings to Negative
-----------------------------------------------------------
The rating outlook of Foamex LP and Foamex Capital Corporation's
was changed by Moody's Investors Service to negative from
positive. Existing ratings are confirmed at:

      * Caa2 for the $148.5 million of 9.875% senior
        subordinated notes, due 2007,

      * Caa2 for the $51.6 million of 13.5% senior subordinated
        notes, due 2005,

      * B3 for the $300 million of 10.75% senior secured notes,
        due 2009,

      * B2 for the $100 million senior secured revolving credit
        facility, due 2005,

      * B2 for the $39.3 million senior secured term loan B, due
        2005,

      * B2 for the $35.7 million senior secured term loan C, due
        2006,

      * B2 for the $51.7 million senior secured term loan D, due
        2006,

      * B2 for the $16.3 million senior secured term loan E, due
        2005,

      * B2 for the $19.2 million senior secured term loan F, due
        2005,

      * B3 senior implied rating, and

      * Caa1 senior unsecured issuer rating.        

The outlook revision reflects the recently announced management
changes and decline in the company's expected earnings for the
third quarter of 2002 due to rising cost and expenses.  

Foamex L.P., the largest manufacturer and distributor of
flexible polyurethane and polymer foam products in North
America, is based in Linwood, Pennsylvania.

Foamex L.P.'s 13.50% bonds due 2005 (FMXI05USR1), DebtTraders
reports, are trading at 21 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=FMXI05USR1
for real-time bond pricing.


FOAMEX: Airs Disappointment with S&P & Moody's Rating Actions
-------------------------------------------------------------
Foamex International Inc. (NASDAQ: FMXI), the world's leading
manufacturer of flexible polyurethane and advanced polymer foam
products, issued the following statement on Moody's decision to
confirm its existing ratings of Foamex L.P., and Foamex Capital
Corporation's debt but change its rating outlook to negative,
and Standard & Poor's decision to place ratings on Foamex L.P.
on CreditWatch with negative implications.

Thomas E. Chorman, Chief Executive Officer of Foamex, commented:
"While we are disappointed with Moody's and S&P's actions
[Tues]day, we are pleased that both agencies' ratings on our
existing bonds and bank debt remain unchanged. Foamex's cash
flow from operations is sufficient to fund operations and
current interest payments. We plan to make the next interest
payment on our bonds of $7.3 million on December 16, 2002,
subject to agreement with our bank lenders." The Company's next
material principal payment is not due until September 30, 2004.

Chorman continued, "While industry-wide raw material price
increases represent the majority of the expected impact to our
third quarter earnings, it is important to note that
approximately $5 million of the impact is due to one-time non-
recurring SG&A expenses, primarily professional fees. The
majority of these one-time expenses were related to planning for
a potential public offering of a minority interest in our
Symphonex division, in order to drive growth in the division and
raise capital to reduce Foamex debt." Majority ownership would
have remained with Foamex shareholders. Originally anticipated
to take place in the fourth quarter of 2002, the offering has
now been delayed. The remainder of the one-time SG&A expenses
were primarily related to the terminated potential sale of
Foamex's carpet cushion business.

"We are making progress off-setting the raw material costs
through a combination of our own price increases, expansion of
our supply base and further cost-cutting. In addition, we are
optimistic about the progress being made in discussions with our
bank lenders to amend the financial covenants. While I
understand and share the frustration of our investors over
Foamex's third quarter performance, I firmly believe that Foamex
has a great deal of untapped potential and I am committed to
delivering much better results by eliminating non-essential
expenses, maximizing operational efficiencies and focusing our
business operations on their core competencies," concluded
Chorman.

On October 16, 2002, Foamex announced that it expects to report
a net loss and EBITDA in the range of $7-$9 million for the
third quarter ended September 29, 2002, excluding any
restructuring charges or credits. The Company also announced
that it had obtained a waiver from its bank lenders of its
financial covenants for the period ended September 29, 2002.
This waiver will be effective until November 30, 2002. The
Company is currently in discussions with its bank lenders to
amend its financial covenants. Foamex expects to receive the
necessary covenant amendments by November 30, 2002, although
there can be no assurance that the covenants will be amended.

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

As reported in Troubled Company Reporter's October 18, 2002
edition, Foamex International obtained a waiver from its bank
lenders of its financial covenants for the period ended
September 29, 2002. This waiver will be effective until November
30, 2002. The Company is currently in discussions with its bank
lenders to amend its financial covenants. Foamex expects to
receive the necessary covenant amendments by November 30, 2002,
although there can be no assurance that the covenants will be
amended.

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


FORT WASHINGTON: S&P Hatchets 2nd Priority Senior Rating to BB
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
senior and second priority senior notes issued by Fort
Washington CBO I, an arbitrage CBO transaction collateralized
primarily by high-yield bonds. At the same time, the rating on
the second priority senior notes is removed from CreditWatch
with negative implications, where it had been placed on May 21,
2002. Standard & Poor's does not rate the senior subordinated
notes tranche of this transaction.

The lowered ratings reflect factors that have negatively
affected the credit enhancement available to support the notes
since the transaction was originated in December of 1998. These
factors include par erosion of the collateral pool securing the
rated notes and a downward migration in the credit quality of
the performing assets within the pool.

As a result of asset defaults and sales of credit risk assets,
the overcollateralization ratios for the transaction have
decreased significantly since the transaction was originated. As
of the most recent monthly trustee report (Sept. 25, 2002), both
the senior par value test and the second priority par value test
were out of compliance. The senior par value ratio was 116.2%,
versus a minimum required ratio of 117%, and an effective date
ratio of approximately 128%; the second priority par value ratio
was 106.7%, versus the minimum required ratio of 111% and an
effective date ratio of approximately 119%. In its par value
ratio calculations, Fort Washington CBO I carries defaulted
assets at 28.7% of their par value, regardless of current market
values. If defaulted assets were carried at the lower of 28.7%
or market value, the senior par value ratio would have been
approximately 114% and the second priority par value ratio would
have been approximately 104.6%.

The credit quality of a number of the performing assets within
the collateral pool has also migrated downward. Currently,
including defaulted assets, approximately 26% of the assets
within the collateral pool come from obligors rated triple-'C'-
plus or lower, and 16.5% of the performing assets within the
collateral pool come from obligors with corporate credit ratings
that are currently on CreditWatch negative.

Standard & Poor's has reviewed the results of current cash flow
runs generated for Fort Washington CBO I to determine the level
of future defaults the transaction can withstand under various
stressed default timing and interest rate scenarios while still
paying all of the interest and principal due on the rated notes.
When the results of these cash flow runs were compared with the
projected default performance of the performing assets in the
current collateral pool, it was determined that the ratings
assigned were no longer consistent with the credit enhancement
available, leading to the lowered ratings. Standard & Poor's
will continue to monitor the performance of the transaction to
ensure that the ratings assigned reflect the credit enhancement
available to support its rated notes.

      Rating Lowered and Removed from Creditwatch Negative

                    Fort Washington CBO I

                       Rating
Class                 To     From             Balance (Mil. $)
2nd Priority Senior   BB     BBB-/Watch Neg   16.250

                       Rating Lowered

                    Fort Washington CBO I

                       Rating
Class                 To     From             Balance (Mil. $)
Senior Notes          A+     AA               183.530


FRONTLINE COMMS: Terminates Merger Negotiations with Shecom
-----------------------------------------------------------
Frontline Communications Corp. (AMEX: FNT) -- http://www.fcc.net
-- announced the termination of negotiations for a definitive
agreement with Shecom Computers Corp., under which Shecom would
have merged into Frontline.

On July 31, 2002, Frontline announced that it had signed a
letter of intent providing for the merger. However, the parties
have been unable to reach a definitive agreement and all
negotiations have ended.

"Despite the amount of time that has passed since the execution
of the letter of intent, we have still not been able to reach a
mutually acceptable final merger agreement," said Stephen J.
Cole-Hatchard, Chairman and CEO of Frontline Communications
Corp. "That not having occurred, we believe it is in the best
interests of our shareholders to discontinue pursuing this
particular deal. We intend to evaluate other prospects that in
the past have expressed an interest in a transaction with our
company."

Founded in 1995, Frontline Communications Corporation provides
high-quality Internet access and Web hosting services to homes
and businesses nationwide. Frontline offers Ecommerce,
programming, and Web development services through its
PlanetMedia group -- http://www.pnetmedia.com

Frontline is headquartered in Pearl River, New York, and is
traded on the American Stock Exchange.

At June 30, 2002, Frontline Communications' balance sheets show
a total shareholders' equity deficit of about $1.5 million.


GENEVA STEEL: Potential Lender Withdraws from Company Financing
---------------------------------------------------------------
Geneva Steel LLC, a wholly owned subsidiary of Geneva Steel
Holdings Corp (OTC: GNVHQ), announced that the potential lender
for the Company's business plan has informed Geneva that it does
not intend to pursue a financing with the Company or file an
application for a federal loan guarantee.  

Under the Company's agreement with its secured lenders for
continued access to cash collateral, a potential lender must
file an application for a loan guarantee under the Emergency
Steel Loan Guarantee Act on or before November 15, 2002.  The
Company does not believe that a replacement lender can be found
in time to meet the deadline.  

In the event that an application is not filed, the Company has
agreed to work with its secured lenders to formulate a plan of
reorganization that is acceptable to the secured lenders.  Such
plan will likely provide for a liquidation of the Company either
in place or in parts.  Absent further agreement with the
Company's secured lenders for access to cash collateral, the
Company will lack sufficient liquidity to continue its limited
operations beyond November 15. In January 2002, the Company
filed a Chapter 11 bankruptcy proceeding.

The Company has been seeking a new $250 million term loan to
repay its existing term loan of approximately $108.4 million and
to finance the Company's electric arc furnace strategy and
working capital requirements.  The Company has been working with
a potential lender for several months, including with respect to
a possible application under the Emergency Steel Loan Guarantee
Program.

Geneva Steel's steel mill is located in Vineyard, Utah.  The
Company's facilities can produce steel plate, hot-rolled coil,
pipe and slabs for sale primarily in the western, central and
southeastern United States.


GENTEK INC: Intends to Honor & Pay Prepetition Tax Obligations
--------------------------------------------------------------
GenTek Inc., and its debtor-affiliates seek the Court's
authority to pay:

  -- any undisputed prepetition tax and fee obligations owing to
     domestic and foreign governmental entities, in the ordinary
     course of business and on their normal due dates; and

  -- taxes relating to prepetition periods, which may become due
     as a result of tax audits currently underway or which may
     commence in the ordinary course of business for prepetition
     periods relating to, but not limited to, income, sales, use
     and property taxes.

The Debtors estimate that their prepetition tax and fee
obligations do not exceed $7,300,000 in the aggregate.

The taxes and fees attributable to the prepetition portion of
the 2002 tax year will not be due until the applicable monthly,
quarterly, or annual payment dates -- in some cases, immediately
and in others not until next year.

Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, points out that the continued payment of prepetition tax
and fee obligations on their normal due dates will ultimately
preserve the resources of the Debtors' estates, thereby
promoting their prospects for a successful reorganization.  If
these obligations are not timely paid, Mr. Chehi fears that the
Debtors will be required to expend time and incur attorneys'
fees and other costs to resolve a multitude of issues related to
these obligations, each turning on the particular terms of each
governmental entity's applicable laws, including:

(a) whether the obligations are priority, secured or unsecured
    in nature;

(b) whether they are proratable or fully prepetition or
    postpetition; and

(c) whether penalties, interest, and attorneys' fees and costs
    can continue to accrue on a postpetition basis, and if so,
    whether the penalties, interest, and attorneys' fees and
    costs are priority, secured or unsecured in nature.

Mr. Chehi further contends that the nonpayment or delayed
payment of tax obligations may also subject the Debtors to
efforts by the governmental entities to revoke the Debtors'
licenses and other privileges either on a postpetition or post-
confirmation basis. The collection efforts by the governmental
entities would also provide obvious distractions to the Debtors
and their officers and directors in their efforts to bring these
Chapter 11 cases to an expeditious conclusion.  In addition, the
Debtors' nonpayment or delayed payment of their taxes and fees
owing to foreign governmental entities may result in forfeiture
of their right to carry on business in the respective
jurisdictions, seizure or impoundment of the Debtors' assets,
and possible civil and criminal liability on their part and
their directors, officers, employees and agents. (GenTek
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


GLOBAL CROSSING: Consolidated Net Loss Tops $138 Mill. in August
----------------------------------------------------------------
Global Crossing continues to meet key goals outlined in its
operating plan, including year-to-date targets for Service
Revenue, cash in bank accounts, operating expenses, third-party
maintenance and Service EBITDA (earnings before interest, taxes,
depreciation, and amortization). The performance targets were
established for Global Crossing (excluding Asia Global Crossing)
in the operating plan presented to its creditors in March.

       OPERATING RESULTS (excluding Asia Global Crossing)

In August 2002, Global Crossing reported $236 million in Service
Revenue, $13 million above the Service Revenue target set forth
in the operating plan. In addition, August 2002 Service Revenue
showed an increase of $5 million from the prior month's reported
Service Revenue.  Service EBITDA continued to improve month-
over-month and was reported at a loss of $5 million, in line
with August 2002 operating plan targets.  Year-to-date Service
EBITDA continues to exceed the target in the operating plan.

"It is clear from our August and year-to-date financials that
our business is stable and we continue to make progress on our
financial recovery," said John Legere, CEO of Global Crossing.  
"In particular, our Service Revenue has exceeded year-to-date
targets by $47 million -- an impressive achievement for any
company in today's market.  In addition, we've made marked
improvements in Service EBITDA, which was reported at a loss of
$65 million in February 2002 and now stands at a loss of $5
million.  We have worked hard to achieve the goals outlined in
the operating plan and are upbeat about our future."

Total cash in bank accounts exceeded targets set forth in the
operating plan, with $744 million as of August 31, 2002,
compared to a plan of $631 million.  Operating expenses held
steady from the previous month and were reported at $63 million
in August 2002, $3 million higher than the target in the
operating plan.  Third-party maintenance costs were also
unchanged from the previous month at $12 million, beating the
operating plan target by $3 million.

                   MOR RESULTS FOR AUGUST 2002

Global Crossing Tuesday filed a Monthly Operating Report (MOR)
for the month of August with the U.S. Bankruptcy Court for the
Southern District of New York, as required by its Chapter 11
reorganization process.  The consolidated results in the MOR
include Asia Global Crossing and revenue from sales of capacity
in the form of IRUs (indefeasible rights of use) that occurred
in prior periods, recognized ratably over the life of the
relevant contracts.

Results reported in the August MOR include the following:

For continuing operations in August 2002, Global Crossing
reported consolidated revenue of approximately $255 million.  
Consolidated operating expenses were $73 million, while access
and maintenance costs were reported at $196 million in August
2002.

In addition, Global Crossing reported a consolidated GAAP
(Generally Accepted Accounting Principles) cash balance of
approximately $1,008 million as of August 31, 2002, including
$292 million of cash held by Asia Global Crossing.  Global
Crossing's $716 million GAAP cash balance (excluding Asia) is
comprised of $339 million unrestricted cash, $333 million in
restricted cash and $44 million of cash held by Global Marine.

Global Crossing reported a consolidated net loss of $138 million
for August 2002. Consolidated EBITDA was reported at a loss of
$14 million.

Global Crossing Monday announced that, based upon advice from
the staff of the Securities and Exchange Commission, it will
restate certain financial statements contained in filings
previously made with the SEC. Global Crossing's restatements
will record exchanges between carriers of leases of
telecommunications capacity at historical carryover basis,
resulting in no recognition of revenue for such exchanges.  
Global Crossing previously reported these capacity exchanges at
fair value, recognizing revenue in its GAAP financial statements
over the lives of the relevant lease contracts. Global Crossing
also announced that, for exchanges that involve service
contracts, it will continue to record revenue over the lives of
the relevant contracts at fair values, but that its balance
sheet will not reflect the entire value of the contracts
received or given in the exchanges. Accordingly, the revenue
contributed by previous exchanges involving service contracts
will not be restated, but the fair values of these exchanges
involving services will be removed from the balance sheets
previously filed. Global Crossing expects to utilize the
accounting treatment described above for exchanges of
telecommunications capacity and service contracts as it reports
results in the future.

Although the detailed application of this accounting treatment
is not complete, the Company estimates that the impact of
recording all such transactions at carrying value rather than
fair value would be to reduce revenue by $7 million, and
depreciation expense by $2 million, from the numbers reported in
the MOR for the month of August. In addition, the change from
fair value to carrying value for these transactions would reduce
Total Assets as well as Total Liabilities and Shareholders'
Equity by approximately $1,200 million as of August 31, 2002,
from the numbers reported on the balance sheet contained in the
August MOR. The restatement will have no impact on cash flow for
the month of August.

As discussed more fully in these MORs, Global Crossing has not
yet filed its Annual Report on Form 10-K for the year ended
December 31, 2001.  Global Crossing has agreed with the
Creditors' Committee in its Bankruptcy proceeding and with the
United States Trustee to the appointment of an examiner in the
Chapter 11 cases, whose role is expected to be limited to
addressing the financial statements of Global Crossing and
companies within its control, including (i) issuing an audit
opinion on Global Crossing's financial statements for the year
ended December 31, 2001, (ii) issuing an audit opinion on
restated financial statements for earlier periods if restatement
is necessary and (iii) issuing a report regarding its findings.  
Global Crossing is currently reviewing the anticipated role of
the examiner with the SEC and expects the order appointing the
examiner to be approved shortly.  Global Crossing's Board of
Directors is currently seeking to retain a new independent
public accounting firm to act as its new auditor, and it is
expected that a member of the new accounting firm would also act
as the examiner in the Bankruptcy proceeding.

In addition, certain matters relating to Global Crossing's
accounting for, and disclosure of, concurrent transactions for
the purchase and sale of telecommunications capacity between
Global Crossing and its carrier customers are being investigated
by the SEC, the U.S. Attorney's Office for the Central District
of California, the House of Representatives Financial Services
Committee and the House of Representatives Energy & Commerce
Committee. In connection with their investigation, a
subcommittee of the House Energy & Commerce Committee held
hearings on September 24, 2002 and October 1, 2002 regarding
Global Crossing.  The House Financial Services Committee has
also requested documents from the company on matters related to
corporate governance and the proposed investment in the company
by Hutchison Telecommunications and Singapore Technologies
Telemedia.  Global Crossing is also cooperating with a similar
inquiry being conducted by the Denver office of the SEC
regarding another telecommunications company, and has provided
and is providing documents in response to three subpoenas it has
received from the New York Attorney General's office relating to
an investigation of Salomon Smith Barney. The U.S. Department of
Labor is conducting an investigation into the administration of
Global Crossing's benefit plans.  These investigations are
described more fully in the August MOR.

Any changes to the financial statements resulting from any of
these investigations and the completion of the 2001 financial
statement audit could materially affect the unaudited
consolidated financial statements contained in these MORs and
the information presented in this press release.

As previously announced, Global Crossing's net loss for the
three months ended December 31, 2001 is expected to reflect the
write-off of the remaining goodwill and other intangible assets,
which total approximately $8 billion. Furthermore, in light of
the terms contained in the previously announced agreement with
Hutchison Telecommunications and Singapore Technologies
Telemedia, Global Crossing has determined that it will write
down its tangible assets by at least $10 billion.  The financial
information included within this press release and the MORs
reflect the write-off of all of the goodwill and other
identifiable intangible assets of $8 billion, but does not
reflect any write-down of tangible asset value.  Global Crossing
is currently in the process of evaluating its financial
forecasts to determine the impairment of its long-lived assets.  
In addition, Global Crossing will write down Asia Global
Crossing's interest in Hutchison Global Crossing by $450
million, representing the difference between the proceeds
received and the carrying value of Asia Global Crossing's
interest in Hutchison Global Crossing, which was sold on April
30, 2002.

The write-off of the intangible assets, and the write-downs of
tangible assets are described more fully in the August MOR.

Global Crossing provides telecommunications solutions over the
world's first integrated global IP-based network, which reaches
27 countries and more than 200 major cities around the globe.  
Global Crossing serves many of the world's largest corporations,
providing a full range of managed data and voice products and
services.  Global Crossing operates throughout the Americas and
Europe, and provides services in Asia through its subsidiary,
Asia Global Crossing.

On January 28, 2002, Global Crossing and certain of its
affiliates (excluding Asia Global Crossing and its subsidiaries)
commenced Chapter 11 cases in the United States Bankruptcy Court
for the Southern District of New York (Bankruptcy Court) and
coordinated proceedings in the Supreme Court of Bermuda (Bermuda
Court).  On the same date, the Bermuda Court granted an order
appointing joint provisional liquidators with the power to
oversee the continuation and reorganization of the Bermuda-
incorporated companies' businesses under the control of their
boards of directors and under the supervision of the Bankruptcy
Court and the Bermuda Court.

On April 23, 2002, Global Crossing commenced a Chapter 11 case
in the Bankruptcy Court for its affiliate, GT UK, Ltd. On August
4, 2002, Global Crossing commenced a Chapter 11 case in the
United States Bankruptcy Court for the Southern District of New
York for its affiliate, SAC Peru Ltd.  On August 30, 2002,
Global Crossing commenced Chapter 11 cases in the Bankruptcy
Court for an additional 23 of its affiliates (as specified in
the July [July or August?] Monthly Operating Report filed with
the Bankruptcy Court) in order to coordinate the restructuring
of those companies with its restructuring. Global Crossing has
also filed coordinated insolvency proceedings in the Bermuda
Court for those affiliates that are incorporated in Bermuda.  
The administration of all the cases filed subsequent to Global
Crossing's initial filing on January 28, 2002 has been
consolidated with that of the cases commenced in Bankruptcy
Court on January 28, 2002.

Global Crossing's Plan of Reorganization, which it filed with
the Bankruptcy Court on September 16, 2002, does not include a
capital structure in which existing common or preferred equity
would retain any value.

Please visit http://www.globalcrossing.comor  
http://www.asiaglobalcrossing.comfor more information about  
Global Crossing and Asia Global Crossing.

Global Crossing Holdings' 9.125% bonds due 2006 (GBLX06USR1) are
trading at 1.25 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=GBLX06USR1
for real-time bond pricing.


HAWK CORP: S&P Ratchets Corporate Credit Rating Up a Notch to B
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Cleveland, Ohio-based Hawk Corp., a manufacturer of
highly engineered components, to single-'B' from single-'B'-
minus. The upgrade follows Hawk's announcement that it has
completed an exchange offer of its $65 million, 10.25% senior
unsecured notes due 2003 and has put in place a new bank credit
facility. As a result, Standard & Poor's has withdrawn its
senior secured and senior unsecured debt ratings on Hawk's old
debt issues. Additionally, Standard & Poor's removed the
corporate credit rating from CreditWatch, where it was placed
August 2, 2002. At the same time, Standard & Poor's assigned its
single-'B'-minus rating to the company's new $65 million, 12%
senior unsecured notes maturing in 2006, and its single-'B'-plus
rating to the company's new $53 million senior secured bank
credit facility. The outlook is now stable.

"With the refinancing of its senior notes and bank credit
facility, Hawk has reduced near-term refinancing risk, including
its debt amortization payments, and has modestly improved the
company's liquidity position," said Standard & Poor's credit
analyst Eric Ballantine.

Hawk designs, engineers, manufactures, and markets specialty
components made principally from powdered metals for use in
aerospace, industrial, and commercial markets. Products include
brake pads, transmission disks, clutch buttons, die-cast
aluminum rotors, and other performance products.

Hawk continues to be negatively affected by soft market
conditions, especially in the aerospace market. In response, the
company has taken steps to improve its cost structure, by
eliminating overhead and by shifting production to its lower
cost China and Mexico facilities. However, Hawk remains
aggressively leveraged with total debt to EBITDA of around 5.6
times and EBITDA to interest of about 2.3x as of June 30,
2002. In the intermediate term, credit measures are expected to
strengthen as a result of Hawk's improving cost structure and as
market conditions gradually improve, with total debt to EBITDA
expected between 4x-5x and EBITDA to interest coverage expected
around 2.5x-3x.

Cyclical end markets, a relatively aggressive financial profile,
and limited liquidity restrict upside ratings potential. Solid
niche market positions, an improving cost structure, and
improving cash generation limit downside risk.  


ITC DELTACOM: Brings-In BDO Siedman as Independent Auditors
-----------------------------------------------------------
ITC Deltacom, Inc., wants to sign-up BDO Siedman, LLP as its
Independent Auditors.  

The Debtors remind the U.S. Bankruptcy Court for the District of
Delaware that prior to August 5, 2002, Arthur Andersen LLP acted
as their independent auditors and tax accountants. As a result
of Arthur Andersen's wind-down of its business, the Debtors'
relationship with Arthur Andersen was effectively terminated.

BDO Siedman will render services including:

  a) performing a review of the consolidated financial statement
     of the Debtor included in its Quarterly Reports on Form
     10-Q for the fiscal quarter ended June 30, 2002 and the
     fiscal quarter ending September 30, 2002;

  b) performing an audit of the Debtor's consolidated balance
     sheet as of December 31, 2002 and the related consolidated
     statements of income, stockholders' equity and cash flow
     for the year then ending; and filing with the Securities
     and Exchange Commission;

  c) providing such other accounting services as may be
     requested by the Debtors from time to time.

BDO Siedman will bill the Debtor at its current hourly rates:

          Partners               $350 to $600 per hour
          Senior Managers        $250 to $420 per hour
          Managers               $195 to $300 per hour
          Seniors                $140 to $220 per hour
          Staff                  $ 90 to $175 per hour

The Debtor assure the Court that BDO Siedman is a "disinterested
person" and has no interest adverse to the Debtors' estates or
other parties in interest.

ITC Delatacom, Inc., an exempt telecommunications company and a
holding company, filed for chapter 11 protection on June 25,
2002. Rebecca L. Booth, Esq., Mark D. Collins, Esq., at
Richards, Layton & Finger, P.A., and Martin N. Flics, Esq.,
Roland Young, Esq., at Latham & Watkins represent the Debtors in
their restructuring efforts. When the Company filed for
protection from its creditors, it listed $444,891,574 in total
assets and $532,381,977 in total debts.


KINGSLEY COACH: Mantyla McReynolds Expresses Going Concern Doubt
----------------------------------------------------------------
The Kingsley Coach, Inc., is engaged in the business of
manufacturing motorhomes under the tradename "Kingsley Coach."  
Until July, 2000 all of the motorhomes that it built were
custom-designed.  The Company now offers a series of standard
models under the tradename "Camelot."

The Kingsley Coach is an R.V. body mounted onto a stretched
truck chassis. The company opens the back of the cab and welds
the living quarters to the open frame, creating a walk-through
vehicle with the safety of uni-body construction. The direct
competitors of the Kingsley Coach are the Type A Motorhomes.   
But the construction and features of the Kingsley Coach are said
to distinguish it from any motorhome on the road today.

Prior to fiscal 2001 Kingsley's operations produced annual
losses, as development costs exceeded  growing revenues.  
Finally, however, during the year ended June 30, 2001, the
Company achieved $4,921,797 in sales, and realized net income of
$152,131. The principal reason for the transition to
profitability in that year was that the Company incurred only
$68,000 in research and development expenses, compared to prior
years in which R&D expense approximated 30% of revenue. Although
Kingsley expects to carry on research and development activities
in the future related to its "second generation products," it
expects that future research and development costs can be held
to a level that will equal between 5% and 10% of sales.  So the
Company entered fiscal 2002 optimistically, knowing that it had
achieved a level of overall operating expense at which it would
need only modest increases in  production volume in order to
sustain profitability.

Its optimism was misplaced.  Sales during the year ended June
30, 2002 fell by 48% to $2,556,409.  There were two primary
causes for the halving of the sales volume: one that will plague
Kingsley until it obtains additional capital financing, another
that it believes it has already remedied:

  *  Kingsley has almost no inventory of finished or near-
finished products. The paucity of capital resources has dictated
that the Company build vehicles only to order.  This situation
(a) limits potential customers to those willing to wait many
months for delivery and (b) eliminates reportable revenue if
there is any interruption in production activities (as occurred
in fiscal 2002), as the Company has no sales from inventory that
can carry it through a trough in production.  This situation
does not preclude it from achieving profitability - it had the
same lack of inventory in fiscal 2001.  But the situation does
put its prospects for profitability at considerable risk.

  *  The Company was dependent until recently on one
subcontractor for the RV bodies that it incorporates into its
vehicles.  And although it began fiscal 2002 with a backlog of
orders for 15 vehicles for immediate delivery, its subcontractor
delivered only 16 vehicles to it during the entire year. The
result was that the Company was able to ship only 16 vehicles
during the year, which caused sales revenue to plummet.  In
addition, Company inability to assure customers of timely
delivery made it difficult to secure new orders.  It was only
the unique quality of its Kingsley Coach that enabled the
Company to end fiscal 2002 with a backlog of 16 units.

The Company cannot remedy the first problem, lack of inventory,
until it achieves significant capital resources.  However, it
has already taken steps to remedy the second problem, and
believes that it is now able to assure customers of a reasonably
firm date for delivery of their vehicles.  In the Spring of
2002, relying primarily on funds loaned by one of its employees,
it initiated a multi-step program to eliminate dependence on
subcontractors:

  *  The Company moved its principal manufacturing facility from
the building it had previously leased at the subcontractor's
premises to a nearby 20,000 square foot plant.  There it
outfitted the production lines which it now uses to manufacture
the entire body and attach it to a truck chassis to create a
Kingsley Coach.  Its recent cost analysis indicates that this
development of an in-house capability has reduced the per-unit
production cost of its vehicles by $16,832.  In addition, the
Company had paid its subcontractor a $5,000 per unit fee under
the terms of its previous relationship.  So total savings is
$21,832 per unit.

  *  The Company has entered into negotiations with the previous
subcontractor for a new relationship.  The subcontractor appears
to be willing to continue to manufacture partial bodies for
Kingsley on terms that will be cost-efficient for the Company.  
If that new relationship is accomplished, it will provide
Kingsley an even more fluid supply of bodies when combined with
its in-house production efforts.
     
  *  The Company has recently employed two new managers, each of
whom has considerable experience in vehicle manufacturing.  They
are already completing analyses of operations which are enabling
the Company to operate much more efficiently.

  *  The Company is focusing a considerable portion of its
marketing effort on the medical and emergency vehicle markets.  
It has already established a relationship with one major
manufacturer of mobile scanning devices, and is in discussions
with others in that industry as well as with government bodies
interested in using its vehicles in their emergency management
programs.  These relationships, if they can be accomplished,
will provide the Company with orders for vehicles that are far
more standardized than those it sells to the traveling public,
and thus more cost-efficient to produce. The marketing effort
involved is also just a fraction of that involved in marketing
to the public.

The Company says the demand for its product has remained strong,
despite its problems, and believes that the program put in place
will enable it to meet the demand and return to profitability.

However, Kingsley Coach currently has no line of credit or other
source of financing.  Until the past summer it was party to an
Agreement for Wholesale Financing that it made with Deutsche
Financing Services on November 1, 1999.  That Agreement
contemplates loans to an aggregate of $500,000 for the purpose
of purchasing inventory and components from vendors approved by
the lender.  The loans are secured by the inventory purchased.
Recently, however, the Company's inability to obtain an
inventory of RV bodies has meant that it finish vehicles shortly
after the RV body arrives at its plant. As a result, it has not
been able to utilize the full value of the credit available to
it from Deutsche Financing Services.  At June 30, 2002, the
Company owed only $103,250 under that agreement, on loans
bearing interest at 12% to 13.5%. After the year-end, Deutsche
Financing Services cancelled the line of credit due to lack of
use.

At June 30, 2002 Kingsley Coach had a working capital deficit of
$1,271,140.  While this represented a significant decline from
its deficit of $776,381 at the end of June 2001, the decline was
relatively modest compared to its net loss of $1,591,958 for the
year.  The relative stability occurred, despite the substantial
loss realized in fiscal 2002, because (1) the non-cash expense
incurred when the Company issued stock for services in July 2001
was a significant component of the loss, and (2) the growth in
its backlog and a recent modification of customer financing
terms resulted in an increase of $640,430 in customer deposits.  
Its actual operations during fiscal 2002 produced $92,551 in
positive cash.  While this is not a stirring result, it does
indicate that Kingsley is capable of sustaining operations even
at a relatively low level of revenue.
we will increase production.

As shown by the Auditors Report of Mantyla McReynolds of Salt
Lake City, on August 30, 2002, the Company has accumulated
losses since inception, has experienced a decline in revenue and
has negative working capital which raise substantial doubt about
its ability to continue as a going concern.


KMART CORP: US Trustee Appoints Gillette to Creditors' Committee
----------------------------------------------------------------
Ira Bodenstein, the United States Trustee for Region 11,
announces the appointment of The Gillette Company to the
Official Committee of Unsecured Creditors of Kmart Corporation
and the resignation of Newell Rubbermaid.   The 13-member
Committee now consists of:

               Euler ACI
               100 East Pratt Street
               Baltimore, Maryland 21202-1008
               Attn: Gary H. Shapiro

               Fuji Photo Film U.S.A., Inc.
               555 Texter Road
               Elmsford, New York 10523
               Attn: Martin Barash

               American Greetings
               One American Road
               Cleveland, Ohio 44144-2398
               Attn: Art Tuttle

               Bridgeford Foods of Illinois
               170 North Green Street
               Chicago, Illinois 60607
               Attn: Richard G. Klaczynski

               20th Century Fox Home Entertainment
               Legal Department
               PO Box 900
               Beverly Hills, California 90213-0900
               Attn: UnJu Paik

               GMAC Commercial Credit
               1290 Avenue of Americas
               New York, New York 10104
               Attn: Esther D. Miller

               The Gillette Company
               Prudential Tower Building
               Boston, MA 02199-8004
               Attn: David M. Brandt

               Kimco Realty Corporation
               3333 New Hyde Park Road
               Suite 100
               New Hyde Park, New York 11042
               Attn: Milton Cooper

               Sara Lee Corporation
               475 Corporate Square Drive
               Winston-Salem, North Carolina 27105
               Attn: David S. Peoples

               PepsiCo
               3501 Algonquin Road
               Rolling Meadows, Illinois 60008
               Attn: Scott Nehs

               Buena Vista Home Video
               500 South Buena Vista Street
               Burbank, California 91521-9750
               Attn: Kenneth E. Newman

               Mattel, Inc.
               333 Continental Boulevard
               El Segundo, California 90245
               Attn: Kathleen Simpson-Taylor

               Pension Benefit Guaranty Corporation
               1200 K Street, N.W.
               Washington, D.C. 20005-4026
               Attn: James J. Keightley
(Kmart Bankruptcy News, Issue No. 36; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

Kmart Corp.'s 9.0% bonds due 2003 (KM03USR6), DebtTraders
reports, are trading at 17 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=KM03USR6for  
real-time bond pricing.


KSAT SATELLITE: Pursuing New Repayment Terms on $3.9 Mill. Loan
---------------------------------------------------------------
KSAT Satellite Networks Inc., (TSX Venture - KSA) reported that
an aggregate amount of approximately US$3.9 million, including
interest, is due by the Corporation to Gilat Satellite Networks
Ltd. and Global Space Investments Limited pursuant to a
shareholder loan agreement dated September 27, 2000.

The Corporation is currently attempting to negotiate new
repayment terms of the amounts due to Gilat and Global. A
further announcement will be made when a conclusion has been
reached.

                        *   *   *

As previously reported, KSAT Satellite has a shareholders'
deficiency of approximately US$9,700,000 at December 31, 2001,
as the result of significant changes and economic pressures in
the Corporation's area of focus, the telecommunications and
satellite industry in China, and the general slowdown in the
economy and the operating climate in China in fiscal 2001.  


LAIDLAW INC: Exit Financing Facility for Reorganized Debtors
------------------------------------------------------------
In conjunction with the Second Amend Plan, Laidlaw Inc., and its
debtor-affiliates will increase the balloon payment due at
maturity for the senior secured six to six one-half year term
loan at the London Interbank Offered Rate, from $822,500,000 to
$897,500,000.  The Debtors indicate that the term loan may be
reduced by an amount equal to the Cash received by New LINC,
after deducting underwriting discounts or commissions and other
customary offering expenses, from the offer and sale of New LINC
Senior Subordinated Notes to qualified institutional investors
on or prior to the Effective Date.

Pursuant to the Confirmation Order, LIL, the New LINC and the
Reorganized Debtors intend to execute and deliver, on or before
the Effective Date, the documents as may be necessary or
appropriate to establish the Exit Financing Facility or, if
issued, offer and sell the New LINC Senior Subordinated Notes.
In addition, all cash necessary for LIL, New LINC, and the
Reorganized Debtors to make payments pursuant to the Plan will
be obtained from the Debtors' cash balances, cash generated from
operations, potential asset dispositions or the Exit Proceeds.
Also, cash payments to be made pursuant to the Plan will be made
by LINC, and by New LINC acting on behalf of the Debtors or
Reorganized Debtors, as appropriate, provided that New LINC, the
Debtors and the Reorganized Debtors will be entitled to transfer
funds between and among themselves as they determine to be
reasonably necessary or appropriate in order to enable New LINC
or the Reorganized Debtors, as applicable, to satisfy their
obligations under the Plan.

Except as otherwise contemplated as part of the Restructuring
Transactions, any Intercompany Claims resulting from the
transfers will be settled and the Claims will be discharged
without any consideration being paid.  This is notwithstanding
any other provision of the Plan that any Intercompany Claims
that are Administrative Claims will be subordinated in right of
payment to New LINC's and the Reorganized Debtors' respective
obligations to make instruments issued under the Exit Financing
Facility and, is issued, in connection with the New LINC Senior
Subordinated Notes.

                     Sources and Uses of Cash

Under the Second Amended Plan, the principal sources and uses of
Cash expected to be available to the Reorganized Debtors on the
Effective Date are:

Sources of Cash

  Cash generated from operations                   $280,000,000
  Proceeds from exit financing term loans
   and revolving credit facility                    983,000,000
                                                ----------------
  Total sources                                  $1,263,000,000
                                                ----------------

Uses of Cash

  Cash distributions in respect of Class 4         $423,000,000
  Cash distributions in respect of Class 5A         611,000,000
  Cash distributions in respect of Class 5B          35,000,000
  Cash distributions in respect of Class 6          116,000,000
  Cash distributions in respect of Class 3                 0
  Administrative claims, financing fees and other
     reorganization expenses                         48,000,000
  Working capital                                    30,000,000
                                                ----------------
  Total uses                                     $1,263,000,000
                                                ----------------

The Debtors anticipate that, on the Effective Date, an
additional $242,000,000 will be available to the Reorganized
Debtors pursuant to the senior secured revolving credit facility
under the Exit Financing Facility.  The Additional Financing
will assist the Reorganized Debtors in:

  (a) meeting their respective working capital needs,

  (b) issuing letters of credit in the expected aggregate amount
      of $110,000,000 on the Effective Date to replace letters
      of credit currently outstanding under the Debtors'
      existing borrowing facilities, and

  (c) paying administrative claims, financing fees and other
      reorganization expenses, including any outstanding
      indebtedness under the DIP Facility and related fees and
      expenses. (Laidlaw Bankruptcy News, Issue No. 25;
      Bankruptcy Creditors' Service, Inc., 609/392-0900)  


LEAR CORP: Posts $700K Working Capital Deficit at Sept. 28, 2002
----------------------------------------------------------------
Lear Corporation (NYSE: LEA), one of the world's leading
automotive interior suppliers, reported its financial results
for the third quarter of 2002.

Third Quarter Highlights

    *  Net sales of $3.3 billion, up 7% from a year ago

    *  EPS of $0.91, up 42% from prior year's adjusted basis

    *  Corporate credit outlook improved by S&P and Moody's

    *  Two senior executives promoted to rank of president and
       chief operating officer

For the third quarter of 2002, Lear posted net sales of $3.3
billion, operating income of $158.9 million and net income of
$61.6 million.  These results compare to net sales of $3.1
billion, operating income of $137.5 million and net income of
$15.7 million in 2001.  Excluding non-recurring items and
goodwill amortization for the third quarter of 2001, Lear had
adjusted operating income of $137.5 million and net income of
$41.8 million.

At September 28, 2002, Lear's total current liabilities exceeded
its total current assets by about $700,000.

"Our goal at Lear is to work in close partnership with our
customers to deliver the highest quality and best value.  We
believe this focus on customer satisfaction and the fundamentals
of our business will deliver superior value to our
shareholders," said Bob Rossiter, President and Chief Executive
Officer.  "During the quarter, the recognition we received from
our customers and the credit rating agencies, combined with our
improving financial results, provide solid evidence that our
customer-focused strategy is working."

Rossiter continued, "The Lear team pulled together to make the
third quarter another success.  The recent promotions of Don
Stebbins to president and chief operating officer - North and
South America and Doug DelGrosso to president and chief
operating officer - Europe, Asia and Africa underscore our
confidence in their abilities to keep the momentum going in the
future."

Net sales and operating income for the quarter rose 7% and 16%,
respectively, compared with 2001, reflecting higher North
American vehicle production and new business globally, offset
partially by lower vehicle production in Western Europe and
South America.  Earnings per share in the recently completed
quarter were $0.91 compared with $0.64 in the third quarter of
2001, excluding non-recurring items and goodwill amortization.  
This improvement reflects both higher operating earnings and
lower interest expense.

During the quarter, Lear received the DaimlerChrysler Interior
Component Award, and five Lear locations earned the
DaimlerChrysler Gold Award.  Lear has now received formal
recognition from all of its major customers worldwide.
In addition, both Standard and Poor's Ratings Service and
Moody's Investors Service raised their credit rating outlook for
Lear.

              Fourth Quarter and Full Year Outlook

"For the fourth quarter, we anticipate net sales to be up 5%-7%
compared with a year ago, reflecting higher vehicle production
in North America and the addition of new business globally,
offset by lower vehicle production in Western Europe.  We expect
earnings per share in the range of $1.52 to $1.67. We estimate
capital spending of approximately $125 million and free cash
flow to be in the range of $75-$125 million.

"For the full year, we anticipate vehicle production volume for
North America of about 16.5 million units and vehicle production
volume for Western Europe in the range of 15.7 million to 15.9
million units.  At these production levels, we expect earnings
per share in the range of $4.40 to $4.55, excluding the goodwill
impairment charge recorded earlier this year. We estimate full
year capital spending to be about $300 million and full year
free cash flow to be in the range of $300 to $350 million.

                  Preliminary 2003 Outlook

"Our initial planning assumption for North American vehicle
production is approximately 16.0 million units.  For Western
Europe and South America, we see industry production in line
with 2002.

"Within this production environment, worldwide net sales are
expected to grow by approximately 4%-6%, primarily reflecting
the addition of new business globally.  We also see our
operating margins continuing to improve.

"We forecast a tax rate of 32%, average shares outstanding for
the year of 68.5 million and capital spending of approximately
$300 million.  We see free cash flow up from 2002, allowing for
continued debt reduction and a further strengthening of the
balance sheet.  Interest expense should approximate $200 million
for the year.  We also plan to begin expensing employee stock
options. This is expected to reduce earnings per share by $0.07
in 2003, assuming a mid-year option grant, consistent with prior
years.

"For 2003, we see earnings per share growth between 10%-15%
compared with 2002."

Lear Corporation, a Fortune 150 company headquartered in
Southfield, Mich., USA, focuses on integrating complete
automotive interiors, including seat systems, interior trim and
electrical systems.  With annual net sales of $13.6 billion in
2001, Lear ranks as one of the world's leading automotive
interior suppliers and the world's fifth-largest automotive
supplier.  Lear's world-class products are designed, engineered
and manufactured by over 115,000 employees in more than 300
facilities located in 33 countries.  Information about Lear and
its products is available on the Internet at http://www.lear.com
    

LOGIC DEVICES: Fails to Meet Nasdaq Min. Listing Requirements
-------------------------------------------------------------
LOGIC Devices Incorporated (NASDAQ: LOGC) received a NASDAQ
Staff Determination on October 17, 2002, indicating the Company
fails to comply with the minimum market value of publicly held
shares of $5,000,000 and the minimum closing bid price per share
of $1.00, which are requirements for continued listing set forth
in Marketplace Rules 4450(a)(2) and 4450(a)(5), respectively,
and, therefore, its securities are subject to delisting from the
NASDAQ National Market.

The Company has requested a hearing before a Listing
Qualifications Panel to review the Staff Determination, and the
Company's securities will continue to be listed on the NASDAQ
National Market pending the results of that hearing. There can
be no assurance the Panel will grant the Company's request for
continued listing. If the Company is unsuccessful in its request
for continued listing, it will apply to transfer to its common
stock listing to the NASDAQ Small Cap Market, under that
Market's continued listing standards. There can be no assurance
the Panel will grant the Company's request for a transfer of its
common stock listing.

The Company believes it has regained compliance with the minimum
MVPHS requirement of $5,000,000, and the Company's common stock
has recently traded near or above $1.00. At the hearing, the
Company will appeal the NASDAQ Staff Determination, based on
these factors and other elements of a comprehensive plan to
maintain the listing requirements. The cornerstone of this plan
is the Company's previously announced Share Repurchase Plan that
was successfully implemented earlier this month. Other factors
that the Company believes warrant the continued listing of its
common stock on the National Market, include: the Company's
belief that its common stock is currently undervalued relative
to comparable companies in its industry, on the basis of price-
to-book value, price-to-sales, and price-to-operating cash flow;
and the Company's belief that the recent share price reflects
the overall market conditions rather than the strength of the
Company's finances.

The Company currently enjoys an exceptionally strong and liquid
balance sheet, with an expected fiscal year-end quick ratio of
approximately 19/1 and a current ratio of approximately 65/1.
Although the semiconductor industry is the longest and most
severe downturn of its history, the Company is continuing to
generate substantial cash flow from operations. Over the past
four years, the Company has eliminated more than 95 percent of
its liabilities, and currently has only approximately $200,000
in total liabilities, compared to approximately $13 million in
assets. In addition, subsequent to the close of its fiscal year
ended September 29, 2002 (not yet released), the Company
collected a large portion of its accounts receivable balance,
and, consequently, enjoys a substantial cash position. During
the 2002 fiscal year, the Company continued to invest over 20
percent of its net revenues in new product development to spur
on future growth.

Based on these factors, the Company decided to appeal the NASDAQ
Staff Determination, and has asked for a hearing before a
Listing Qualifications Panel, pursuant to the NASDAQ Marketplace
Rule 4800 Series.

Established in 1983, LOGIC Devices is a fabless semiconductor
manufacturer providing high-performance, function-specific
integrated circuits that are utilized in smart weapons systems
and in broadcast studio, medical imaging, and digital
telecommunications equipment.


LTV CORP: LTV Steel Settles Disputes re Donner-Hanna Plant
----------------------------------------------------------
LTV Steel asks Judge Bodoh to authorize and approve a compromise
and settlement among:

* LTV Steel,
* Hanna Furnace Corporation,
* Steelfields LLC,
* The City of Buffalo, New York,
* The City of Buffalo Urban Renewal Agency,
* The New York State Department of Environmental Conservation,
* Travelers Indemnity Company, and
* Travelers Casualty and Surety Company.

          The Buffalo Site and Former Steel and Coke Plant

In 1968, LTV entered into the steel business with its
acquisition of Jones & Laughlin Steel Corporation.  In 1978 and
1984, LTV substantially expanded its steel operations with the
acquisition of Youngtown Steel & Tube Company and Republic Steel
Corporation.  In 1984, the companies merged to form LTV Steel.

LTV Steel, through its predecessor Republic, owns certain real
property in Buffalo, New York, on which Republic Steel operated
a steelmaking facility.  In addition, LTV Steel, through its
predecessor Republic, owned 50% of the stock of the Donner-Hanna
Coke Corporation.  The other 50% was owned by Hanna, a
subsidiary of National Steel Corporation. Donner operated a coke
plant in Buffalo, New York from 1920 to 1979. When Donner
dissolved in 1979, LTV and Hanna signed a joint venture
agreement to operate the Donner Coke Plant.  By 1990, the Donner
Coke Plant was demolished and, at present, LTV Steel and Hanna
each maintain their 50% ownership interests in the site where
the Donner Coke Plant was located.

LTV Steel also owns a landfill comprising approximately 70 acres
located on Marilla Street in Buffalo, New York, known as the
August Feine Property.

In 1992, LTV Steel and Hanna transferred certain property in the
vicinity of the Site to the City of Buffalo Urban Renewal
Agency.  This property is adjacent to a residential housing
development commonly known as the Hickory Woods Subdivision, and
additional homes were constructed on the property.  In 1998,
contamination was discovered on certain of the properties that
had been transferred to the BURA. Shortly after that,
contamination was discovered on a berm constructed on the Site
by the BURA under an easement granted by Hanna and LTV Steel to
the BURA.

                  The DEC Remediation Requirements

The DEC has listed a 33-acre portion of the Site as an Inactive
Hazardous Waste Disposal Site under New York Environmental
Conservation Law.  The DEC also threatened to classify the rest
of the Site as an inactive hazardous waste disposal site.  Thus,
LTV Steel is potentially liable for the remediation of the Site
under federal and state environmental laws.  Indeed, since the
1990s, the DEC, LTV Steel and Hanna have been negotiating a
consensual consent decree under which the entire Site would be
cleaned up.

                 The New York Environmental Lawsuits

On September 3, 1999, Hanna and LTV Steel filed a lawsuit with
the United States District Court for the Western District of New
York against Buffalo and the BURA styled "LTV Steel Company et
al v. City of Buffalo Urban Renewal Agency et al.  By this New
York litigation, LTV Steel and Hanna allege that the Defendants
placed hazardous substances within the berm and seek no less
than $4,000,000 to remove the berm. On December 13, 1999, the
Defendants asserted counterclaims against LTV Steel and Hanna,
which allege that LTV Steel and Hanna disposed of wastes both on
the Site and on the properties in Hickory Woods, asking for an
unspecified amount of response costs, compensatory damages,
injunctive relief, and attorney's fees, as well as punitive
damages of $250,000,000 based on environmental claims under
state and federal law.

In March 2002, LTV Steel filed a motion, in which Hanna joined,
asserting that the automatic stay imposed by the Bankruptcy Code
prohibited the Defendants from continuing litigation of the
counterclaims.  That motion was granted to the extent that the
counterclaims sought monetary relief, but denied to the extent
the counterclaims sought to require LTV Steel and Hanna to abate
alleged public nuisance conditions and to remediate
environmental conditions under applicable environmental laws.

In addition to this New York litigation, there are numerous
other prepetition lawsuits pending against LTV Steel and Hanna
that were filed by private residents of Hickory Woods seeking
monetary damages for loss of property value.  These suits are
stayed by the bankruptcy filing.

                     The Travelers Policies

Before the Petition Date, Travelers issued certain insurance
policies to LTV Steel and LTV.  The Debtors contend that the
policies provided coverage for certain environmental liabilities
related to the former Republic Steel facilities, including the
Site at issue.  Disputes among Travelers and the two Debtors
relating to these policies arose, and were settled on June 30,
2000, under terms by which Travelers agreed to make certain
funds available to LTV Steel to reimburse LTV Steel for 75% of
approval environmental expenditures at the Site, subject to
certain funding caps.  The Debtors explain that they can't
disclose further details due to a contractual obligation to keep
the terms confidential.

                          The Settlement

After extensive negotiations over a three-year period, the
parties have agreed to sign:

(a) an Administrative Order on Consent dated September 2002,
    among LTV Steel, Hanna and the DEC, and

(b) a Consent Order logged with the District Court on July 16,
    2002, among Buffalo, the BURA, LTV Steel and Hanna.

The parties further agree to sign several ancillary agreements,
including:

(1) an Escrow Agreement among LTV Steel, Hanna, Travelers, the
    DEC and Steelfields;

(2) a Property Transfer Agreement among Steelfields, LTV Steel
    and Hanna, under which Steelfields will:

     -- acquire title to the Site free and clear of all liens,
        and

     -- undertake the cleanup relating to the Site; and

(3) a Letter Agreement dated as of September 13, 2002, providing
    that LTV Steel and Hanna each will pay 50% of Steelfields'
    cost to acquire the August Feine Property to the extent the
    cost exceeds $250,000, up to a maximum of $75,000 each.

Leah J. Sellers, Esq., at Jones Day, in Cleveland, Ohio, advises
Judge Bodoh that the Illinois Bankruptcy Court supervising
Hanna's case already approved the settlement.  These documents
fully resolve the claims relating to the Site and Hickory Woods,
and -- except with respect to the rights of LTV Steel under the
Insurance Settlement Agreement -- Travelers' obligations.

                          The DEC Consent Order

The DEC AOC reflects the consensual cleanup plan for the Site.  
The DEC AOC provides that, upon the signing of the Escrow
Agreement and the Property Transfer Agreement:

(a) LTV Steel agrees to contribute $2,187,500 to an escrow
    account to fund remediation of the Site;

(b) Hanna agrees to contribute $7,750,000 to the Escrow Account;
    and

(c) LTV Steel agrees to assign to the Escrow Account its rights
    to a portion of the insurance proceeds available to LTV
    Steel under the Insurance Settlement Agreement, equal to
    $6,562,500.

LTV Steel's cash contributions and any contribution it may be
required to make with respect to the August Feine Property will
be funded from funds held in the Government Regulation Reserve
established in connection with the APP.

In exchange for these contributions and the assignment, the DEC
has agreed to release, covenant not to sue, and confer
contribution protection on LTV Steel, Hanna and Travelers, and
each of their directors, officers, employees, agents,
affiliates, parent companies, subsidiaries, secured creditors,
insurers, and successors and assigns, from any and all
liability, claims, actions, suits, demands, relief, remedies
actions and proceedings by the DEC that may arise under
applicable law.

                      The Buffalo Consent Order

The Buffalo Consent Order resolves the New York Litigation.  In
consideration of:

(a) the contributions of LTV Steel and Hanna, and LTV Steel's
    assignment to the Escrow Account;

(b) the transfer of the Site to Steelfields; and

(c) Steelfields' entering into a voluntary Cleanup Agreement
    with the DEC for the cleanup of the Site.

On entry of the Buffalo Consent Order, the Defendants, LTV
Steel, and Hanna are fully and forever discharged from any and
all claims, demands, actions, proceedings, suits, orders and
directives that any of them may have under federal or state law
against each other, in respect of the Site or the properties in
Hickory Woods, and related impacts or conditions arising from
them, including any claims that the Defendants may have against
LTV Steel in its Chapter 11 case.

The Defendants, LTV Steel and Hanna each agree to dismiss with
prejudice their claims and the counterclaims in the New York
Litigation.  The Buffalo Consent Order fully restores and
satisfies the administrative claims filed by Buffalo and the
BURA in LTV Steel's Chapter 11 case.

                       The Escrow Agreement

Under the terms of the Escrow Agreement, Travelers is released,
to the extent permitted by applicable law, from all claims
arising from or in connection with the Site, in consideration of
its agreement to make insurance reimbursement payments
aggregating $6,562,500 to the Escrow Account from the insurance
proceeds made available to LTV Steel under the Insurance
Settlement Agreement.  Except with respect to the rights of LTV
Steel under the Insurance Settlement Agreement, on making these
payments, Travelers will have no further duties or obligations
to provide insurance reimbursement of any nature to any person
or entity with respect to the interest of LTV Steel in the Site,
to the fullest extent permitted by applicable law.

                   Settlement Should Be Approved

The Comprehensive Settlement is beneficial to LTV Steel's estate
and creditors.  Despite LTV Steel's firm belief in the merits of
its position in the New York Litigation, the probability of LTV
Steel's success in that litigation cannot be assured.  The
issues presented in the litigation are exceedingly complex and
fact-intensive.  Indeed, the extensive discovery (including
expert reports) and voluminous pleadings produced over the past
three years bear witness to the complexity of the case and to
the time and great expense that it would take to try the case to
a verdict -- time and money that LTV Steel simply does not have.  
Similarly, the DEC AOC presents a consensual, negotiated
resolution to LTV Steel's potential cleanup liability in respect
of the Site and Hickory Woods, and avoid potential challenges
to, and the additional expense that could be imposed by, a
unilateral cleanup order issued by the DEC.

Ms. Sellers outlines the benefits of the settlement:

* The Environmental Settlement Agreements effect the complete
  release of LTV Steel from possible remediation or cleanup
  liability and liability in respect of the Site and Hickory
  Woods;

* The Environmental Settlement Agreements liquidate the claims
  of the DEC, Buffalo and the BURA with respect to the Site and
  Hickory Woods, without the need for costly litigation or
  adverse enforcement action by those parties;

* The Environmental Settlement Agreements provide that the DEC,
  the State of New York, Buffalo, and the BURA covenant not to
  sue LTV Steel in the future under any federal or state
  environmental law;

* The Buffalo Consent Order specifically provides for the
  consensual resolution and dismissal with prejudice of the New
  York Litigation and the counterclaims, and the resolution of
  Buffalo's and the BURA's claims in LTV Steel's Chapter 11
  case;

* The Ancillary Agreements effect the removal of the Site from
  LTV Steel's estate with the attendant certainty that LTV Steel
  will not be responsible for cleanup costs associated with the
  Site in the future;

* The Comprehensive Settlement liquidates and fully resolves
  certain hotly contested and potentially costly environmental
  claims against LTV Steel's estate;

* The concomitant cost to the estate, exclusive of the insurance
  reimbursement payments to be made by Travelers, only slightly
  exceeds $2,000,000, which amount currently is available in the
  Government Regulation Reserve; and

* LTV Steel and its estate are receiving full releases from the
  government regulatory agencies.

                    But The Residents Don't Like It

Christopher M. Duggan, Esq., at Allen & Lippes, in Buffalo, New
York, tells the Court that this settlement doesn't do much for
the residents of Hickory Woods.

Mr. Duggan reminds Judge Bodoh that the Residents filed a number
of complaints claiming property and personal injuries due to the
contamination and disposal stemming from the former industrial
site owned by LTV and Hanna.  Mr. Duggan argues that the
proposed Orders are "overly broad and beyond the scope of the
proposed order on consent in the New York Litigation."  The
Residents will be negatively affected without an accurate Order.

While the Residents do not object "in principal" to the attempt
by LTV Steel and the other parties to the New York Litigation to
settle, or to the proposed settlement that would remediate the
contaminated Site, and are admittedly not parties to the New
York Litigation, Mr. Duggan explains that the effect of this
settlement terminates rights that the Residents would now have
or have in the future without due process of law.  Mr. Duggan is
concerned that this settlement might eliminate the Residents'
claims.

Mr. Duggan points out that the actual Buffalo Consent Order and
the AOC never envisioned releasing LTV or Travelers from any
claims not directly associated with the administrative claims
brought by the City of Buffalo.

                         *     *     *

After weighing the arguments presented, Judge Bodoh approves the
Debtors' request. (LTV Bankruptcy News, Issue No. 38; Bankruptcy
Creditors' Service, Inc., 609/392-00900)


LUCENT TECHNOLOGIES: Seeking Shareholders' Nod for Reverse Split
----------------------------------------------------------------
Lucent Technologies (NYSE: LU) said its board of directors has
authorized the company to seek shareowner approval for a reverse
stock split at its next annual meeting in February 2003.  The
ratio will be set by the company's board of directors at a level
which would be expected to result in a common share price in the
range of $15-$25.

The company said that as of the close of trading on October 17,
2002, the average closing share price of its common stock over
the past 30 trading days had fallen below $1.00, resulting in
the company being below one of the continued listing standards
of the New York Stock Exchange.

Lucent Technologies, headquartered in Murray Hill, N.J., USA,
designs and delivers networks for the world's largest
communications service providers. Backed by Bell Labs research
and development, Lucent relies on its strengths in mobility,
optical, data and voice networking technologies as well as
software and services to develop next-generation networks.  The
company's systems, services and software are designed to help
customers quickly deploy and better manage their networks and
create new, revenue-generating services that help businesses and
consumers.  For more information on Lucent Technologies, visit
its Web site at http://www.lucent.com

Lucent Technologies' 7.70% bonds due 2010 (LU10USR1) are trading
at 32 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=LU10USR1for  
real-time bond pricing.


MARINER POST-ACUTE: Greenlight Capital Reports 7.4% Equity Stake
----------------------------------------------------------------
Greenlight Capital, L.L.C., David Einhorn and Jeffrey A. Keswin
are the beneficial owners of 1,475,929 shares of the common
stock of Mariner Post-Acute Network Inc., representing 7.4% of
the outstanding common stock of that Company. This percentage is
determined by dividing 1,475,929 by 20,000,000, the number of
shares of common stock issued and outstanding as of August 13,
2002, as reported in the Company's quarterly report filed August
23, 2002.

Greenlight has the sole power to vote and dispose of the
1,475,929 shares of common stock beneficially owned by it. As
the principals of Greenlight, Messrs. Einhorn and Keswin may
direct the vote and disposition of the 1,475,929 shares of
common stock beneficially owned by Greenlight.

Greenlight is a limited liability company organized under the
laws of the State of Delaware. David Einhorn and Jeffrey A.
Keswin are the principals of Greenlight and are United States
citizens.

The shares were purchased by Greenlight for the account of (i)
Greenlight Capital, L.P., of which Greenlight is the general
partner, (ii) Greenlight Capital Qualified, L.P., of which
Greenlight is the general partner and (iii) Greenlight Capital
Offshore, Ltd., to which Greenlight acts as investment advisor.


METALS USA: Court Okays Sale of Harris County Property for $1MM+
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas
approved the sale of Metals USA, Inc.'s real estate property at
2900 Patio Dr., Harris County in Houston, Texas, to Capital
Commercial Development, free and clear of liens, claims and
encumbrances.

The property to be sold consists of a 3.6819-acre land owned by
Debtor Texas Aluminum Industries Inc.  It is a portion of the
Debtors' Texas Aluminum Houston facility and it has a 100,000-
square foot storage warehouse.

After Clay Development backed out of the original sale
transaction, the Debtors entered into a Commercial Contract with
Capital Commercial on August 26, 2002.  Its pertinent terms
include:

A. Property to be purchased: The 2900 Patio Property includes
   3.6819 acres of land in Harris County Texas of real property
   owned by Debtor Texas Aluminum Industries located at 2900
   Patio Drive, Harris County in Houston, Texas.

B. Proposed Buyer: Capital Commercial Development Inc.

C. Purchase Price: $1,125,000 cash at closing

D. Broker Commissions: The Broker's commission is 6% of the
   first $500,000 of the Purchase Price and 3% of the balance of
   the Purchase Price, to be divided equally between Principal
   Broker and Cooperating Broker.  Debtor Texas Aluminum
   Industries has also agreed to pay Capital Commercial
   Consultants a fee in the amount of 2% of the Purchase Price.  
   These fees will be earned upon final closing of the
   Commercial Contract and will be paid at closing. (Metals USA
   Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service,
   Inc., 609/392-0900)


NATIONAL STEEL: Wants to Amend Setoff Pact with Metal Building
--------------------------------------------------------------
According to Metal Building Components, Inc., National Steel
Corporation still owe them $300,000 that should have been
included in Metal Building's prepetition claim and in the
Parties' setoff agreement previously approved by the Court.

On August 12, 2002, the Parties obtained the Court's permission
to setoff Metal Building's $4,590,784 claim against National
Steel Corporation's $4,996,154 claim.  National Steel and Metal
Building are parties to a series of agreements where Metal
Building performs processing services for National Steel and
National Steel sold steel to Metal Building.  Both have asserted
claims against the other pursuant to the agreements.

Mark P. Naughton, Esq., at Piper Marbury Rudnick & Wolfe,
explains that the additional claim was not included in original
agreement because, although the amounts covered prepetition
processing done by Metal Building, the processed materials were
not shipped and invoiced to National Steel until recently in the
postpetition period.  Nonetheless, the sum still constitutes a
prepetition claim or debt.

Because Metal Building has overpaid under the setoff agreement,
the Debtors now owe Metal Building a refund for the claim.
Accordingly, the Debtors seek the Court's consent to amend the
setoff agreement to include the $300,000 additional claim.  The
Debtors also seek to refund Metal Building for its excess
payments. (National Steel Bankruptcy News, Issue No. 16;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


NEON COMMUNICATIONS: Committee Taps Andrews & Kurth as Counsel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of NEON
Communications, Inc., and NEON Optica, Inc., obtained approval
from the U.S. Bankruptcy Court for the District of Delaware to
bring-in Andrews & Kurth LLP, as counsel.

Andrews & Kurth will:

  a) advise and consult with the Committee concerning

      (i) legal questions arising in administering the Debtors'
          estates, and
     (ii) the unsecured creditors' rights and remedies in
          connection with the Debtors' estates;

  b) assist the Committee in preserving and protecting the
     Debtors' estates;

  c) consult with the Debtors concerning the administration of
     the cases;

  d) prepare any pleadings, motions, answers, notices, orders,
     and any reports that are required for the protection of the
     Committee's interests and the orderly administration of the
     Debtors' estates; and

  e) perform any and all other legal services for the Committee
     that the Committee determines are necessary and appropriate
     to faithfully discharge its duties.

The hourly rates of Andrews & Kurth' professionals who presently
expect to work on this matter range from:

          partners           $375 to $575 per hour
          associates         $195 to $400
          paralegals         $125 to $140 per hour

NEON Communications, Inc., owns certain rights to fiber and all
of the outstanding stock of NEON Optica, Inc., which owns and
operates a fiber optic network services. The Company filed for
chapter 11 protection on June 25, 2002. David B. Stratton, Esq.,
at Pepper Hamilton LLP and Madlyn Gleich Primoff, Esq., and
Richard Bernard, Esq., at Paul, Hastings, Janofsky & Walker LLP,
represent the Debtors in their restructuring efforts.  When the
Debtors filed for protection from its creditors, they listed
$55,398,648 in assets $19,664,234 in debts.


NORTEK INC: Moody's Assigns & Confirms Low-B Level Debt Ratings
---------------------------------------------------------------
Moody's Investors Service assigned and confirmed ratings to
Nortek, Inc. Outlook is stable.

                        Rating Actions

* B1 senior implied rating

* B1 Issuer rating

* Ba3 on the $200 million senior secured revolving credit
  facility due 2007

* B1 on $175 million of 9.25% senior notes due 3/15/2007

* B1 on $310 million of 9.125% senior notes due 9/1/2007

* B1 on $210 million of 8.875% senior notes due 8/1/2008

* B3 on $250 million of 9.875% senior subordinated notes due
  6/15/2011   

The ratings confirmation reflects the company's adequate
liquidity, even after the $180 million used in closing the Kelso
transaction.

However, the ratings also reflects Nortek's high debt leverage
due to its acquisition-based growth strategy and its negative
tangible equity of about $370 million at June 29, 2002.   

Nortek, Inc., headquartered in Providence, Rhode Island, is an
international manufacturer and distributor of building,
remodeling, and indoor environmental control products for the
residential and commercial markets.

DebtTraders reports that Nortek Inc.'s 9.875% bonds due 2011
(NTK11USN1) are trading at 97 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NTK11USN1for  
real-time bond pricing.


OWENS CORNING: Takes Legal Action to Recover Transfers from BofA
----------------------------------------------------------------
J. Kate Stickles, Esq., at Saul Ewing LLP, in Wilmington,
Delaware, recounts that in 1997, Owens Corning acquired
Fibreboard Corporation, a company also engaged primarily in the
business of producing and selling building products.  As part of
the Fibreboard Acquisition, Owens Corning paid off a pre-
existing $132,500,000 Fibreboard debt to Bank of America.

On July 29, 2002, this Court issued an opinion in Official
Committee of Asbestos Personal Injury Claimants v. Sealed Air
Corporation (In re: W.R. Grace & Co.), 2002 Bankr. LEXIS 766
(Bankr. D. Del., July 29, 2002) (Wolin, U.S.D.J.), that provided
guidelines for determining the insolvency of an entity facing
asbestos-related tort liability.  Given the latency periods
inherent in the continuing development of asbestos-related
personal injuries, Ms. Stickles says, the Grace opinion makes
clear that entities subject to these claims may have been
insolvent far earlier than previously understood and earlier
than the entities themselves reasonably believed.

Ms. Stickles argues that by applying the holding and rationale
set out in Grace:

  -- Fibreboard was insolvent at the time of the Fibreboard
     Acquisition or the Payment; and

  -- Owens Corning was insolvent at the time of, or was rendered
     insolvent by, and/or had unreasonably small assets or
     capital in relation to its business or the transaction at
     the time or as a result of, the Fibreboard Acquisition or
     the Payment.

At all times relevant to this Complaint, Ms. Stickles notes,
there were actual creditors of Owens Corning with allowable
unsecured claims who could avoid the transactions at issue under
applicable law, including but not limited to the Uniform
Fraudulent Conveyance Act and the Uniform Fraudulent Transfer
Act as adopted by the relevant states.

Ms. Stickles asserts that the Payment is avoidable as a
fraudulent transfer by Owens Corning, among others, and should
be avoided pursuant to Section 544 of the Bankruptcy Code and
applicable state law, including but not limited to the Uniform
Fraudulent Conveyance Act and the Uniform Fraudulent Transfer
Act as adopted by the relevant states.

Pursuant to Section 550 of the Bankruptcy Code, Ms. Stickles
adds, Owens Corning is also entitled to recover from Bank of
America the Payment.

Accordingly, the Debtors ask the Court to:

A. find that the Debtors' payment of $132,500,000 to Bank of
   America is avoidable as a fraudulent transfer;

B. order that Bank of America repay $132,500,000 to the Debtors,
   together with interest; and

C. award the Debtors its attorneys fees and the costs of this
   action. (Owens Corning Bankruptcy News, Issue No. 39;
   Bankruptcy Creditors' Service, Inc., 609/392-0900)   


PANACO INC: Has Until January 15 to Make Lease-Related Decisions
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas
extended Panaco, Inc.'s lease decision period. The Debtor has
until the earlier of:

     i) January 15, 2003 or

    ii) the confirmation of a plan

to determine whether to assume, assume and assign, or reject
unexpired nonresidential real property leases.

Panaco, Inc., is in the business of selling oil and natural gas
produced on properties it leases to third party purchasers. The
Company filed for chapter 11 protection on July 16, 2002. Monica
Susan Blacker, Esq., at Neligan Stricklin LLP represents the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, it listed $130,189,000 in assets
and $170,245,000 in debts.


PERKINELMER INC: Will Publish Third Quarter Results on Tuesday
--------------------------------------------------------------
PerkinElmer, Inc., (NYSE: PKI) announced that on Tuesday,
October 29, the company will release third quarter 2002 results.
At 10:00 a.m. EST, the company will conduct a conference call
hosted by Gregory L. Summe, chairman and chief executive
officer, and Robert F. Friel, chief financial officer.

To listen to the call live, please tune into the webcast via
http://www.perkinelmer.com  A playback of this conference call  
will be available from 1:00 p.m. EST, Tuesday, October 29, 2002,
until 11:59 p.m. EST, Monday, November 4, 2002. The playback
phone number is (719) 457-0820 and the code number is 467644.

PerkinElmer, Inc., is a global technology leader focused in
three businesses - Life Sciences, Optoelectronics and Analytical
Instruments. Combining operational excellence and technology
expertise with an intimate understanding of our customers'
needs, PerkinElmer creates innovative solutions - backed by
unparalleled service and support - for customers in health
sciences, communications and other markets whose applications
demand precision and speed. The company operates in more than
125 countries, and is a component of the S&P 500 Index.
Additional information is available through
http://www.perkinelmer.comor 1-877-PKI-NYSE.  

As reported in Troubled Company Reporter's September 23, 2002
edition, PerkinElmer, Inc., entered into amendments to its
two unsecured credit facilities. As noted in the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended June
30, 2002, the Company was in compliance with these covenants as
they were in effect as of June 30, 2002, but was not certain if
it would be able to comply with the Interest Coverage covenant
as of the end of the fiscal quarter ending September 30, 2002.


PERSONNEL GROUP: Renews Georgia Technology Authority Contract
-------------------------------------------------------------
Personnel Group of America, Inc. (NYSE:PGA), a leading
information technology and professional staffing services
company, announced the renewal of its vendor management contract
with the State of Georgia for an additional one-year term. Under
this contract, PGA's Venturi Technology Partners manages the
procurement of the contingent information technology workforce
for participating state agencies throughout Georgia.

Venturi Technology Partners was awarded the initial contract in
July 2001 to implement a web-based, fully automated staffing
management system. Venturi's Staffing Management Solution blends
the use of web-based technology with a managed services overlay
to assist clients in maintaining precise visibility and control
over both their contingent workforce and their vendors.

"Our contract with Venturi has saved the State of Georgia both
money and time," said Larry J. Singer, state chief information
officer and executive director of the Georgia Technology
Authority. "Besides relieving state agencies of administrative
headaches, the service has enabled the state to reduce the
average cost for temporary IT workers. Agencies are able to
focus their time and funds on their core competencies."

Within the first year of operation, Venturi implemented 17
agencies supported by approximately 100 suppliers. Venturi is
responsible for the management and training of these suppliers
and has trained approximately 1,300 users in the use of
Georgia's Information Technology Staffing Management System.

"We are delighted at the opportunity to continue our
relationship with the State of Georgia," said Larry L.
Enterline, PGA Chief Executive Officer. "We have worked hard to
provide the Georgia Technology Authority with the best
combination of state-of-the-art technology tools and a dedicated
services team. This potent combination is meant to provide them
unparalleled visibility into their staffing processes, as well
as dramatic cost savings."

Personnel Group of America, Inc., is a nationwide provider of
information technology consulting and custom software
development services; high-end clerical, accounting and other
specialty professional staffing services; and technology systems
for human capital management. The Company's IT Services
operations now operate under the name "Venturi Technology
Partners" and its Commercial Staffing operations are being
rebranded "Venturi Staffing Partners" over the balance of 2002.

                          *     *     *

As previously reported in Troubled Company Reporter, Personnel
Group of America has been "working hard to remain in compliance
with the New York Stock Exchange listing standards." The Company
continues to be monitored by the NYSE for compliance with the
business plan we submitted to the NYSE earlier this year. The
weak equity market and the balance sheet reduction in
shareholders' equity caused by the adoption of SFAS 142 have now
resulted in the Company dipping below the NYSE's $1.00 minimum
trading price and $50.0 million total shareholders' equity
requirements.

Additionally, the Company had cash on hand at the end of the
second quarter of $25.3 million, which preserves the Company's
negotiating options during discussions examining alternatives
for debt restructuring. Should those discussions not lead to a
near-term outcome, that cash on hand will be applied to debt
repayment.


PRIMUS TELECOMMS: Extends VoIP Services for MSN Messenger Users
---------------------------------------------------------------
PRIMUS Telecommunications Group, Incorporated (NASDAQ: PRTL) --
that has a balance sheet insolvency of about $151 million at
June 30, 2002 -- has extended its Voice-over-Internet Protocol
(VoIP) services as a selectable option for MSN Messenger Service
customers in Canada, the United Kingdom and the United States.
The multinational expansion occurred less than two months after
PRIMUS announced its agreement with Microsoft Corp. for the
service launch directly to customers in Australia. The service,
which is based on PC-to-Phone technology for making voice calls
on the Internet, is marketed as PrimusTalk(TM).

PrimusTalk integrates with the MSN Messenger Service as a voice
service option. The PRIMUS brand is a selectable voice provider
in the MSN Messenger phone dialer of personal computers of
customers located in Australia, Canada, the United Kingdom and
the United States, four of PRIMUS's largest operating countries.
In these markets, signing up for the service is easy since
PrimusTalk is presented as a direct selection option. In other
countries, only a few additional mouse clicks is all that is
needed to begin making calls. Either way, MSN Messenger
customers around the world now have greater freedom of choice to
communicate with added convenience and enhanced service features
offered at value price points when making calls to anywhere else
in the world. Similar to preparations for the Australian launch,
the service extension went live after PRIMUS satisfied testing
by Microsoft to ensure quality of service and an optimized user
experience.

"We are pleased that the PrimusTalk service is now available in
four of our core markets around the world with MSN providing a
distribution channel," said John Melick, co-President of PRIMUS
Telecommunications, Inc. and one of the principal developers and
implementers of PRIMUS's VoIP initiatives. "With access to MSN
Messenger's large consumer base, we are receiving very positive
customer acceptance during the initial period following our
launch of the service just two months ago."

PRIMUS is expanding through the launch of new products and the
formation of third party relationships to extend its VoIP
services directly to end-user business and consumer customers
who will be able to directly access PRIMUS's global VoIP
network. This network can terminate VoIP calls to virtually any
destination in the world where such termination is not
prohibited by law. PRIMUS also provides customers with secure
and encrypted web-based billing features to include full call
detail and account management information. Convenient payment
options are available to PRIMUS customers around the world.

To subscribe or learn more about the PrimusTalk service, please
go to http://www.iprimus.netor refer to PRIMUS's press release  
of August 12, 2002 which can be found on the Company's Web site
at http://www.primustel.com  

PRIMUS Telecommunications Group, Incorporated (NASDAQ: PRTL) is
a global facilities-based Total Service Provider offering
bundled voice, data, Internet, digital subscriber line, Web
hosting, enhanced application, virtual private network, and
other value-added services. PRIMUS owns and operates an
extensive global backbone network of owned and leased
transmission facilities, including over 300 IP points-of-
presence throughout the world, ownership interests in over 23
undersea fiber optic cable systems, 21 international gateway and
domestic switches, a satellite earth station and a variety of
operating relationships that allow it to deliver traffic
worldwide. PRIMUS has been expanding its e-commerce and Internet
capabilities with the deployment of a global state-of-the-art
broadband fiber optic ATM+IP network. Founded in 1994 and based
in McLean, VA, PRIMUS serves corporate, small- and medium-sized
businesses, residential and data, ISP and telecommunication
carrier customers primarily located in the North America, Europe
and Asia Pacific regions of the world. News and information are
available at PRIMUS's Web site at http://www.primustel.com  


R.H. DONNELLEY: Equity Deficit Narrows to $44.7M at September 30
----------------------------------------------------------------
R.H. Donnelley Corporation (NYSE:RHD), a leading marketer of
yellow pages advertising, announced third quarter 2002 diluted
earnings of $0.83 per share, unchanged from a year ago.

Third quarter 2002 calendar advertising sales (the value of
advertising sold in the quarter, which drives RHD's revenue and
profitability) totaled $171.8 million, down 6.6% from $183.9
million in the same period last year. Operating income in the
third quarter was $46.0 million, down 2.7% from $47.3 million a
year ago. Net income for the quarter totaled $25.1 million, down
2.3% from $25.7 million a year ago. EPS was unchanged due to
lower interest expense and fewer shares outstanding.

At September 30, 2002, R.H. Donnelley's balance sheets show a
total shareholders' equity deficit of about $45 million.

David C. Swanson, President and Chief Executive Officer, said,
"Despite a difficult economic environment, the results in our
Sprint markets were above expectations. Economic conditions in
several of our largest Sprint markets, including Las Vegas,
appear to be improving and we have started to see the benefits
from tighter credit guidelines implemented over the past 18
months. Renewal rates and increased levels of spending in the
Sprint markets appear to be trending towards normal levels and
we are cautiously optimistic that this improvement will continue
in the fourth quarter and next year. While our Sprint markets
showed encouraging gains, results at DonTech were negatively
affected by weaker-than-expected economic conditions in the
Midwest, competition and a very cautious small business market,
particularly in Chicago. In light of this, we are particularly
pleased to have reduced operating costs across the board and
continued to prepay debt."

Swanson continued, "We are very excited about our recently
announced pending acquisition of Sprint's directory publishing
business, which will transform R.H. Donnelley from a sales agent
and pre-press publishing vendor in approximately one-third of
Sprint's markets into a fully integrated yellow pages publishing
company. This new owner/operator model offers R.H. Donnelley a
broader portfolio, which will substantially expand our scale,
and increase our growth and margin potential. Sprint directories
are an extremely attractive business that we know very well,
having served as their partner since 1980."

                    Third Quarter Results

Calendar sales at DonTech were $115.1 million, down 10.8% from
$129.0 million a year ago. Third quarter operating income from
DonTech was $34.4 million down 11.8% from $39.0 million last
year. The decline in both sales and operating income is
attributable to the timing of sales campaigns, continued
advertiser uncertainty from weak economic conditions and the
continuing impact of competition in Chicago. As previously
disclosed, due to the scheduling of sales campaigns, DonTech
serviced, or called on, advertisers representing approximately
10% less revenue in the quarter versus last year. DonTech is
R.H. Donnelley's perpetual partnership with SBC, selling yellow
pages advertising in Illinois and northwest Indiana.

Third quarter calendar sales from the Sprint operation were up
3.3% to $56.7 million from $54.9 million a year ago. Third
quarter operating income at Directory Advertising Services,
which consists of the Sprint operation and the Raleigh pre-press
publishing and information technology center, increased 18.6% to
$14.0 million from $11.8 million a year ago. In the current
quarter, DAS recorded a one-time gain of $2.1 million related to
the final settlement of advertiser receivables generated under
the Cendon relationship prior to its restructuring in 2000. Last
year's third quarter results included a one-time gain of $1.8
million related to a sales allowance adjustment. Net of these
one-time items, DAS operating income in the quarter increased
19.0% to $11.9 million from $10.0 million. This improvement
reflects productivity enhancements and cost savings at the
Raleigh pre-press publishing and information technology center
and improving sales at Sprint.

General and corporate expenses in the third quarter were $2.4
million, down 31.4% from $3.5 million a year ago. Together with
improved DAS operating income, lower general and corporate
expenses helped to partially offset the operating income decline
at DonTech. Nevertheless, RHD's third quarter operating income
declined 2.7% from last year.

Interest expense in the third quarter was $5.1 million, down
17.7% from $6.2 million a year ago, reflecting lower debt
levels. Taxes in the quarter were $15.7 million, compared with
$15.4 million a year ago, reflecting this year's higher
effective tax rate of 38.5%.

                         Nine Month Results

Calendar advertising sales in the first nine months of 2002 were
$474.4 million, down 3.3% from $490.8 million a year ago.
Operating income in the first nine months was $114.0 million,
essentially unchanged from $114.2 million last year. Net income
for the period totaled $59.4 million, essentially unchanged from
$59.2 million last year.

Calendar sales at DonTech for the first nine months of 2002 were
$322.1 million, down 4.6% from $337.7 million in 2001. Operating
income from DonTech for the period was $92.9 million, down 5.3%
from $98.1 million last year. The decline in both sales and
operating income is primarily attributable to both the timing of
third quarter sales campaigns and continued advertiser
uncertainty from weak economic conditions. In the Sprint
operation, calendar sales totaled $152.3 million for the nine
month period, essentially unchanged from $153.1 million a year
ago. Operating income at DAS in the first nine months was $31.6
million, up 15.8% from $27.3 million in 2001. Excluding the
impact of the aforementioned one-time items, operating income at
DAS for the first nine months was $29.5 million up 13.8% from
$25.9 million in the prior year. This growth was primarily
driven by productivity enhancements and cost savings at Raleigh.

General and corporate expenses in the first nine months were
$10.3 million, down 8.0% from $11.2 million a year ago. Interest
expense in the period was $17.0 million, compared with $19.0
million last year due to lower debt levels. Taxes in the first
nine months were $37.3 million, compared to $35.7 million a year
ago.

                              Cash Flow

The company generated $27.4 million of cash flow in the quarter.
This was comprised of cash flow from operations of $28.2
million, capital expenditures and software investment of $1.2
million and proceeds from the exercise of stock options of $0.4
million. The company prepaid $20.0 million of debt in the
quarter. Cash at the end of the period was $9.8 million and debt
was $224.3 million.

The company generated $57.6 million of cash flow in the first
nine months of the year. This was comprised of cash flow from
operations of $66.4 million, restructuring payments totaling
$10.0 million, capital expenditures and software investment of
$2.5 million and proceeds from the exercise of stock options of
$3.7 million. The company prepaid $62.5 million of debt in the
first nine months of the year.

                              Outlook

While yellow pages advertising is less volatile than other
media, yellow pages advertisers, particularly in DonTech's
markets, remain cautious given economic conditions and weak
consumer confidence. We had anticipated some economic
improvement in the second half of the year, but to date this has
only been evident in some of our Sprint markets. Thus, for the
full year, we anticipate declining sales and operating income at
DonTech versus last year. In the DAS segment, we expect flat
sales and modest operating income growth from improving Sprint
markets and the effects of tight cost management at Raleigh.
Consequently, we anticipate full year sales to be down slightly
and operating income to decline by approximately $1.0 million.
We expect 2002 earnings per share to be at the low end of our
previously disclosed range of $2.40 to $2.44 per share.

                       Pub Cycle Ad Sales

Publication cycle advertising sales (a "same-store" sales
metric) in the third quarter were $117.1 million down 5.2% from
$123.5 million a year ago. For the first nine months of 2002,
publication cycle advertising sales decreased 5.5% to $376.9
million from $398.7 million a year ago. This decline was
primarily due to weak 2002 publications whose advertising had
been sold in the fourth quarter of 2001 following September 11.

Publication cycle advertising sales represent the value of
advertising in directories that published in the current period
regardless of when the advertising was sold and the related
revenue and income was reported. Because of the typical one-to-
two quarter time lag between when the advertising is sold and
the publication of a directory, all of the revenue and income
related to these publication cycle advertising sales were
reported in prior periods.

       Acquisition of Sprint Directory Publishing Business

On September 22, 2002, R.H. Donnelley announced that it had
entered into a definitive agreement to purchase Sprint
Corporation's directory publishing business for $2.23 billion in
cash, creating the nation's largest public stand-alone publisher
of yellow pages directories. The transaction, which is subject
to customary regulatory approvals and closing conditions, is
anticipated to close in the first quarter of 2003 and is
expected to be accretive to R.H. Donnelley's cash earnings per
share in 2003 and beyond.

                      Chairman Succession

The Company also announced that its Board of Directors has
elected David C. Swanson to succeed Frank R. Noonan as Chairman
of R.H. Donnelley, effective December 2002. The Company
previously announced Frank Noonan's intentions to step down as
Chairman earlier this year when he turned over his
responsibility as Chief Executive Officer to David Swanson.

"Frank has done an outstanding job leading R.H. Donnelley for
the past 11 years, and his industry and operational expertise
have proved invaluable during our initial phase as an
independent public company, " said David Swanson. "On behalf of
everyone at R.H. Donnelley, I want to thank Frank for his
leadership, inspiration and countless contributions to
Donnelley's success."

R.H. Donnelley is a leading marketer of yellow pages
advertising. The company's businesses include relationships with
SBC and Sprint, as well as its pre-press publishing facility in
Raleigh, N.C. For more information, please visit Donnelley at
http://www.rhd.com  


RURAL/METRO: Sells Latin American Assets to Local Management
------------------------------------------------------------
Effective September 27, 2002, Rural/Metro Corporation -- with a
total shareholders' equity deficit of about $165 million at June
30, 2002 -- sold its Latin American operations (via the sale of
the stock of applicable subsidiaries) to local management for
assumption of net liabilities.  

Due to the deteriorating economic conditions and continued
devaluation of the local currency, the Company  reviewed its
strategic alternatives with respect to the continuation of
operations in Latin America, including Argentina and Bolivia,
and determined that it would benefit from focusing on its
domestic  operations.  

The terms of the transaction were determined based on arms
length negotiation with  reference to deteriorating economic
conditions and outlook and the results of a lengthy marketing
process, which included the efforts of a third party brokering
agent retained in fiscal 2001.  The purchasers were Bangor
Management Corp. and Alasio Business Inc., entities controlled
by the management of Rural/Metro's Latin American operations
immediately prior to the transaction.  

Revenues relating to Rural/Metro's Latin American operations
totaled $25.4 million, $43.1 million and $57.4 million for the
years ended June 30, 2002, 2001 and 2000, respectively.
Excluding asset impairment and restructuring charges, operating
expenses related to Latin American operations totaled $23.8
million,  $44.7 million and $56.2 million for the years ended
June 30, 2002, 2001 and 2000, respectively. Although the Company
has not determined the final accounting, it does not expect
there to be a negative  financial impact from this transaction.


RUSSIAN TEA ROOM: Creditors' Meeting Scheduled for November 20
--------------------------------------------------------------
The United States Trustee will convene a meeting of Russian Tea
Room Realty LLC's creditors on November 20, 2002, at 2:30 p.m.,
at the Office of the United States Trustee, 80 Broad Street,
Second Floor, in Manhattan.  This is the first meeting of
creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy
cases.

All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

The Debtor is a Delaware limited liability company, the owner of
the Russian Tea Room, one of New York City's most famous and
distinguished restaurants.  As of the Petition Date, the Debtor
believes that its aggregate unsecured debt - comprised mostly of
trade debt, banquet deposits, and unsecured loans - is
approximately $6,000,000.


SMURFIT-STONE: Reports Improved Results for Third Quarter 2002
--------------------------------------------------------------
Smurfit-Stone Container Corporation (Nasdaq: SSCC) reported
income of $37 million from continuing operations before
extraordinary item, for the third quarter of 2002, compared with
year ago results of $28 million. The 2002 results include
restructuring and other charges of $0.02 per diluted share,
related to the sale or closure of three facilities. Net income
available to common stockholders was $43 million. This includes
income from discontinued operations of $2 million, a gain from
the company's sale of the industrial packaging group of $22
million, and an extraordinary loss from the early extinguishment
of debt of $16 million. Sales for the third quarter of 2002 were
$2,106 million, compared to $2,059 million a year ago.

For the nine months ended September 30, 2002, Smurfit-Stone
reported income from continuing operations of $70 million,
compared with year ago levels of $62 million. Sales for the nine
months ended September 30, 2002 were $6,027 million, compared
with $6,296 million last year.

Earnings for the third quarter and for the nine months ended
September 30, 2001 included goodwill amortization of $23 million
and $68 million respectively. Goodwill amortization was
eliminated effective January 1, 2002, when the company adopted
Statement of Financial Accounting Standards No. 142, "Goodwill
and Other Intangible Assets".

Commenting on the quarter, Patrick J. Moore, president and chief
executive officer, said that these results reflected improved
shipments, higher containerboard production and improving
prices. "We increased containerboard and container prices
during the quarter. In the third quarter, year-over-year box
shipments were up 4.5 percent, outpacing industry levels," said
Moore. The results for the quarter were negatively impacted by
higher recycled fiber costs.

"The third quarter was eventful for Smurfit-Stone. We divested a
non-core business, the industrial packaging group. In addition,
we completed a major acquisition, the Stevenson, AL, medium mill
and associated operations from MeadWestvaco," said Moore. "With
Stevenson, the company acquired a world-class mill and we expect
to realize a minimum of $40 million in synergies." In late
August, the company also purchased two converting plants from
Packaging Services Group, expanding important high graphics
capabilities in the Northeast, Moore said.

The company's interest expense was $87 million in the third
quarter, compared to $109 million in the third quarter of 2001.
This decline reflects falling interest rates and 2002
refinancing activities. In the third quarter, the company
substantially completed its refinancing program, eliminating all
major debt maturities until 2005. Total debt as of
September 30, 2002, was $5.16 billion, an increase of $332
million during the quarter, principally due to the acquisition
of the Stevenson mill and related assets.

Looking forward, Moore anticipates further debt reduction in the
fourth quarter. He added, "We expect to benefit from improving
corrugated container prices and lower recycled fiber costs. This
will be offset by seasonally lower volumes and higher downtime,
particularly in containerboard, as well as higher interest
expense. This will put pressure on fourth quarter net income
relative to the third quarter."

                          *   *   *

As previously reported, Standard & Poor's affirmed its single-
'B'- plus corporate credit rating on major packaging
manufacturer Smurfit-Stone Container Corp., following the
announcement that it has agreed to purchase a corrugated medium
mill from MeadWestvaco Corp. The outlook remains stable.


SONIC FOUNDRY: Falls Short of Nasdaq Continued Listing Criteria
---------------------------------------------------------------
Sonic Foundry(R) Inc. (Nasdaq:SOFO), a leading digital media
software solutions company, has been notified by The Nasdaq
Stock Market, Inc., that the Company's common stock has closed
for more than 30 consecutive trading days below the minimum
$1.00 per share requirement for continued inclusion on the
NASDAQ National Market under Marketplace Rule 4450(a)(5).

In accordance with NASDAQ rules, the Company has been afforded
90 calendar days, or until January 14, 2003, to regain
compliance with the minimum bid price requirements. If, at
anytime before January 14, 2003, the bid price of the Company's
common stock closes at $1.00 per share or more for a minimum of
10 consecutive trading days, The Nasdaq Stock Market, Inc. will
provide written notification that the Company complies with
Marketplace Rule 4450(a)(5).

The Company may apply to transfer its common stock to the NASDAQ
SmallCap Market. If the Company does so prior to January 14,
2003 and the application is approved, the Company will be
afforded a 180-calendar day SmallCap Market grace period, or
until April 14, 2003, to regain compliance. The Company may also
then be eligible for an additional 180-calendar day grace
period, or until October 13, 2003, to demonstrate compliance
provided that it meets initial NASDAQ listing criteria for the
SmallCap Market. Furthermore, the Company may be eligible to
transfer back to the NASDAQ National Market if, by October 13,
2003, its bid price maintains the $1.00 per share requirement
for 30 consecutive trading days and it has maintained compliance
with all other continued listing requirements.

Management of the Company is evaluating all available options in
order to regain full compliance with the NASDAQ listing
requirements.

Founded in 1991, Sonic Foundry (NASDAQ:SOFO) is a leading
provider of desktop and enterprise digital media software
solutions. Its complete offering of media tools, systems and
services provides a single source for creating, managing,
analyzing and enhancing media for government, business,
education and entertainment.

Sonic Foundry is based in Madison, Wis., with offices in Santa
Monica, Toronto and Pittsburgh. For more information about Sonic
Foundry, visit the company's Web site at
http://www.sonicfoundry.com


SONUS: Shareholders OK Asset Sale to Amplifon for $38MM + Debts
---------------------------------------------------------------
Sonus Corp., (AMEX:SSN) announced that the holders of its common
and preferred shares had voted at a special meeting of
shareholders held earlier today to approve the sale of the
Company's assets to Amplifon (USA), Inc.

The Company announced last June the signing of a definitive
agreement for Amplifon to acquire the business of Sonus for a
total consideration of $38.4 million in cash and the assumption
of certain obligations.

Shareholders also approved, subject to the completion of the
sale of assets to Amplifon, the voluntary liquidation and
dissolution of the Company in accordance with terms of
liquidation presented to shareholders, and a change in the
Company's name from Sonus Corp., to SSN Liquidating Corp.

The Company further announced that, subject to the closing of
the sale of assets to Amplifon, the Company's board of directors
has established October 24, 2002, as the record date for a
liquidating distribution to common shareholders under the terms
for its liquidation and dissolution. The payment date for the
distribution will be October 28, 2002, or the earliest
practicable date thereafter.

Under the Company's terms of liquidation, the liquidating
distribution to holders of its outstanding common shares will be
$1.00 per share. The Company's common shareholders will not be
entitled to any additional amounts with respect to their shares.

The American Stock Exchange has notified the Company that the
listing of its common shares for trading on AMEX will be
suspended as of the close of business on the record date for its
liquidating distribution to common shareholders, expected to be
October 24, 2002. The Company's stock transfer books will be
closed as of the suspension by AMEX.

Amplifon USA is a wholly owned subsidiary of Milan-based
Amplifon S.p.A., a world leader in the distribution and
application of hearing aids. Portland-based Sonus is the largest
audiology-based retailer of hearing instruments in North America
and sells private label and multi-brand products to hearing-
impaired patients through 87 company-owned retail stores and
1,400 licensed network affiliates in the U.S. and Canada.


SOS STAFFING: Has Until April 21 to Meet Nasdaq Requirements
------------------------------------------------------------
SOS Staffing Services Inc., (Nasdaq:SOSS) received an additional
180-day extension, until April 21, 2003, to regain compliance
with the minimum bid price per share requirement of the Nasdaq
SmallCap Market.

On April 22, 2002, the company was notified by Nasdaq that it
was not in compliance with the $1 minimum bid price per share
requirement for continued listing on the Nasdaq National Market.
Accordingly, the company was provided 90 calendar days, or until
July 22, 2002, to regain compliance. On Aug. 12, 2002, the
company transferred to the SmallCap Market and was granted an
additional 90 calendar day grace period, or until Oct. 21, 2002,
to regain compliance with the minimum bid price per share
requirement.

The company has not regained compliance with the $1.00 minimum
bid price per share requirement for continued listing on the
SmallCap Market. However, Nasdaq has determined that the company
met all other initial listing requirements for the SmallCap
Market and has provided the company with an additional 180
calendar days, or until April 21, 2003, to regain compliance
with the minimum bid price per share requirement. If the
company's minimum bid price per share closes at or above the $1
per share minimum required bid price for at least 10 consecutive
trading days, the company will have regained compliance with
such requirement. If during the SmallCap Market grace period the
closing bid price of the company's stock is $1 per share or more
for 30 consecutive trading days, then the company may be
eligible to transfer its common stock back to the NNM, provided
all other requirements for continued listing on that market are
met.

If the company has not met the minimum bid price and all other
listing requirements at the expiration of the grace period, the
common stock may be subject to delisting from the SmallCap
Market, subject to an appeals process, in which event the
company's securities may be quoted in the over-the-counter
market.

SOS Staffing Services Inc., with its subsidiaries, is a full-
service provider of commercial staffing and employment related
services. SOS and its subsidiaries operate a network of
approximately 90 offices.


STERLING CHEMICALS: Nov. 13 Special Admin. Claims Bar Date Fixed
----------------------------------------------------------------
By Order of the U.S. Bankruptcy Court for the Southern District
of Texas all persons and entities who have or assert claims
arising between July 16, 2001 and October 31, 2002 against
Sterling Chemicals Holdings, Inc., and its debtor-affiliates,
must file their requests for payment on or before November 13,
2002 or be forever barred from asserting those claims.

The Honorable William R. Greendyke directs that requests must be
filed with the Bankruptcy Court and served on the Debtors'
Counsel before 4:00 p.m. on Nov. 13.

Requests need not be filed if they are on account of:

      (i) any claim previously paid by the Debtors in the
          ordinary course of their business or pursuant to Court
          order;

     (ii) any claim arising out of post petition date ordinary
          course of business trade payables of the Debtors;

    (iii) any claim to which the Debtors and the holders of such
          claim agree in writing to except from the provisions
          of this notice.   

Sterling Chemicals Holdings, a manufacturer of petrochemicals,
acrylic fibers, and pulp chemicals, filed for Chapter 11
protection on July 16, 2001 in the Southern District of Texas
Bankruptcy Court.  D. J. Baker, Esq., at Skadden, Arps, Slate,
Meagher & Flom, represents the Debtors in their restructuring
effort. As of its September 21, 2001 report to the Securities
and Exchange Commission, the Debtors listed $403,681,000 in
assets and $1,207,403,000 in debt.
  

TELAXIS COMMS: Look for Third Quarter 2002 Results on Tuesday
-------------------------------------------------------------
Telaxis Communications Corporation (Nasdaq:TLXS), which is
subject to delisting from Nasdaq National Market for failing to
comply with the minimum listing requirements, said it will issue
a news release regarding its third quarter 2002 results on
Tuesday, October 29, 2002 at approximately 8:00 a.m. Eastern
Time. Telaxis will then host a conference call to discuss the
release, financial results, developments at the company, and
other matters of interest to investors and others on that same
day starting at 8:30 a.m. Eastern Time. The discussion may
include forward-looking information, such as guidance concerning
anticipated future results and developments.

The conference call will be broadcast live over the Internet.
Investors and others are invited to visit either Telaxis' Web
site at http://www.tlxs.comor http://www.streetevents.comto  
access this broadcast. Replays will be available telephonically
through November 26, 2002 at 11:59 p.m. Eastern Time by dialing
800-428-6051 for domestic callers and 973-709-2089 for
international callers, passcode 265780 for all callers, and over
the Internet at http://www.tlxs.comor  
http://www.streetevents.com  

Telaxis is developing its FiberLeap(TM) product family to enable
direct fiber optic connection to wireless access units and to
transparently transmit fiber optic signals over a wireless link
without the use of conventional modems. Taking advantage of
Telaxis' high-frequency millimeter-wave expertise, the
FiberLeap(TM) product family is being developed to use the large
amounts of unallocated spectrum above 40 GHz to provide data
rates of OC-3 (155 Mbps), OC-12 (622 Mbps), and Gigabit
Ethernet. Telaxis has recently demonstrated its initial
EtherLeap(TM) product, an 802.11-based Ethernet Local Area
Network (LAN) radio operating at millimeter-wave frequencies.
For more information about Telaxis, please visit its Web site at
http://www.tlxs.comor contact the company by telephone at 413-
665-8551 or by email at IR@tlxs.com  


TENNECO AUTOMOTIVE: Surpasses Bank Covenant Test Ratios in Q3
-------------------------------------------------------------
Tenneco Automotive (NYSE: TEN) announced that the company
reported net income of $5 million for the third quarter of 2002
compared with a net loss of $2 million during the third quarter
2001.  The company continued to generate positive cash flow
contributing to a $14 million reduction in total debt in the
quarter and a $108 million reduction in total debt year-to-date.  
The company also again significantly exceeded its bank covenant
test ratios during the quarter.

"We are a cash driven organization and I am very pleased with
our ongoing ability to generate free cash flow," said Mark P.
Frissora, chairman and CEO, Tenneco Automotive. "On a year-to-
date basis, we've generated more than enough free cash to
service our debt, including making $64 million of amortization
payments in the third quarter, while at the same time adequately
funding our strategic initiatives globally."

The company reported revenue for the quarter of $856 million,
compared with $817 million in the third quarter of 2001, a 5
percent increase. Reported EBITDA for the quarter was $75
million, flat compared with the previous year.  However, the
third quarter 2002 results include pre-tax non- accruable
restructuring expenses of $3 million, $2 million after-tax, or
4-cents per share.

"Operationally, we capitalized on the stronger build rates in
North America, delivered stronger results in our European OE
ride control business, and improved our European aftermarket
ride control premium mix in the third quarter," Frissora said.

The company has significantly exceeded its working capital goal
for the year of $50 million, having generated $69 million in
cash flow from working capital year-to-date.  Year-over-year,
working capital improved $136 million, or as a percent of sales,
from 9.6 percent to 5.8 percent, driven by improvement in all
working capital metrics.

The company recorded SGA&E during the quarter of 12 percent of
sales, compared with 12.5 percent in the third quarter 2001.  In
the third quarter, total gross margin adjusted for non-accruable
restructuring expenses was 21.5 percent, compared with 21.9
percent in the third quarter of 2001.  The gross margin decrease
was primarily the result of reduced higher margin aftermarket
sales and increased lower margin catalytic converter pass-
through sales.

"While we are a stronger company today compared with one year
ago, we must maintain our sharp focus on cash management and on
improving our operating fundamentals in order to continue
improving our performance," Frissora said.

                         NORTH AMERICA

Higher overall production volumes including higher Class 8
heavy-duty truck volumes drove a 15 percent increase in North
American original equipment revenue.  The company reported North
American original equipment revenue of $337 million during the
quarter versus $295 million in the third quarter of 2001.  
Excluding catalytic converter pass-through sales, revenue
increased 16 percent.  North American aftermarket revenue for
the quarter was $129 million compared with  $145 million one
year ago.  However, third quarter 2001 revenue was impacted by a
large initial order from a new major aftermarket customer.

North American EBIT increased 64 percent to $36 million versus
$23 million in third quarter 2001.  North American EBIT
improvement was driven by higher OE volumes and improved
manufacturing efficiency in both the OE and aftermarket
businesses, helping offset notable softness in both the ride
control and exhaust segments of the aftermarket.  Third quarter
2002 results included $1 million in non-accruable restructuring
expenses.

                            EUROPE

The company reported European original equipment revenue of $219
million for the quarter, compared with third quarter 2001
revenue of $221 million. Currency exchange rates benefited total
OE revenues by $21 million.  Lower volumes and delayed platform
launches in the exhaust business more than offset stronger ride
control revenue due to new platform launches and stronger sales
on existing platforms.  The company's European aftermarket
revenue increased 7 percent to $86 million, versus $81 million
one year ago.  Excluding the impact of the currency exchange
rate, aftermarket revenues were relatively flat.

European EBIT was a loss of $1 million for the quarter, compared
with income of $9 million reported in the third quarter of 2001.  
Lower OE exhaust volumes, delayed OE exhaust platform launches,
SGA&E expense associated with the launch of the premium
aftermarket Monroe Reflexr shock absorber and $2 million in non-
accruable restructuring expenses impacted the company's European
results.

"We have already taken a number of steps in our European OE
exhaust business to improve our operations including headcount
reductions and implementing processes to improve manufacturing
efficiency and flexibility," said Frissora.  "We are already
seeing improvement as the business unit's gross margins
strengthened both year-over-year and compared with second
quarter 2002. We expect to see continued improvement going
forward."

                         REST OF WORLD

The company's Australian operations reported a 16 percent
increase in revenues to $31 million, versus $27 million one year
ago.  Strong OE market volumes and a favorable currency exchange
rate drove the revenue increase.

In South America, the company reported revenue of $24 million
compared with $32 million in the third quarter of 2001.  
Unfavorable currency exchange rates negatively impacted revenues
by $10 million.

The company's Asian operations reported $30 million in revenue,
an 86 percent increase versus third quarter 2001 revenue of $16
million.  The company's China operations drove revenue growth in
Asia with stronger OE volumes including new exhaust pass-through
business.

Combined EBIT for Australia, South America and Asia was $5
million, flat compared with third quarter 2001.

The company exceeded its bank covenant test ratios during the
quarter.  At September 30, the leverage ratio was 4.20, below
the maximum limit of 5.75; the fixed charge coverage ratio was
1.29, exceeding the minimum required ratio of 0.70; and the
interest coverage ratio was 2.23, exceeding the minimum required
ratio of 1.65.

The attachments provide additional information on Tenneco
Automotive's third quarter 2002 operating results.

Tenneco Automotive is a $3.4 billion manufacturing company with
headquarters in Lake Forest, Illinois and approximately 21,000
employees worldwide.  Tenneco Automotive is one of the world's
largest producers and marketers of ride control and exhaust
systems and products, which are sold under the Monroe(R) and
Walker(R) global brand names.  Among its products are Sensa-
Trac(R) and Monroe(R) Reflex(TM) shocks and struts, Rancho(R)
shock absorbers, Walker(R) Quiet-Flow(TM) mufflers and
DynoMax(R) performance exhaust products, and Monroe(R)
Clevite(TM) vibration control components.

                         *   *   *

As previously reported, Standard & Poor's lowered its corporate
credit rating on exhaust systems and ride control products
manufacturer Tenneco Automotive Inc., to single-'B' from single-
'B'-plus due to the company's continuing poor operating
performance and high debt levels.

The outlook is negative. About $1.5 billion in debt is
outstanding at the Lake Forest, Illinois-based company.

"Despite extensive restructuring actions underway at the
company, intermediate term credit protection measures will
likely remain below levels factored into previous ratings, while
the debt burden will remain substantial," said Standard & Poor's
analyst Lisa Jenkins.


TRENWICK GROUP: Fitch Junks Long-Term and Senior Debt Ratings
-------------------------------------------------------------
Fitch Ratings lowered its long-term and senior debt ratings on
Trenwick Group, Ltd., and its subsidiaries to 'CCC' from 'BB-'.
In addition, Fitch has lowered its ratings on Trenwick's
preferred capital securities to 'CC' from 'B+', its preferred
stock to 'CC' from 'B'. The ratings remain on Rating Watch
Evolving.

Fitch believes that Trenwick's already very limited financial
flexibility has been exacerbated by A.M. Best's recent downgrade
of its primary operating companies' financial strength ratings.
These downgrades trigger an event of default under Trenwick's
bank agreement that give the banks the right to require Trenwick
to collateralize $230 million of letters of credit outstanding
under the agreement.

Fitch also believes that the Best downgrades significantly limit
Trenwick's ability to participate in the reinsurance market
going forward. Many brokers require a minimum of an 'A-' Best
rating to place reinsurance with a particular carrier. In
addition, Trenwick has yet to secure financing for its Lloyds
operation for the 2003 account-year and Fitch believes that the
company's ability to obtain such financing is doubtful. Without
obtaining such financing, Trenwick will be unable to underwrite
at Lloyds in the 2003-account year.

Trenwick has negotiated three amendments and two waivers to its
existing credit facility over the last 18 months. Fitch believes
that the company may be able to negotiate a waiver to this
current violation given the banks' lack of viable options.
However, Fitch also believes that the banks' willingness to
waive events of default and to negotiate amendments to the
existing credit facility has likely declined as the operating
companies' ability to write new business has been impaired.

Entity/Type/Issue          Action     Rating/Rating Watch

Trenwick Group, Ltd.
--Long-term                Downgrade  'CCC'/Evolving.

Trenwick America Corp.
--Long-term                Downgrade  'CCC'/Evolving;
--Senior debt              Downgrade  'CCC'/Evolving.

LaSalle Re Holdings, Ltd.
--Long-term                Downgrade  'CCC'/Evolving;
--Preferred stock          Downgrade  'CC'/Evolving.

Trenwick Capital Trust I
--Preferred capital sec    Downgrade 'CC'/Evolving.


TRENWICK: Covenant Breach Spurs S&P to Put BB Rating on Watch
-------------------------------------------------------------
Standard & Poor's Ratings Services placed its double-'B'
counterparty credit rating on Trenwick Group Ltd., and related
ratings on CreditWatch with negative implications in response to
a covenant breach under Trenwick's credit agreement amended and
restated as of September 24, 2000, under which letters of credit
in the amount of $230 million are issued and outstanding in
favor of Lloyd's. The letters of credit expire on December 1,
2005.

Unless renewed or replaced, Trenwick will no longer be able to
collateralize its capital requirements to continue operating at
Lloyds for the 2003 year of account. Should the letters of
credit be drawn down by Lloyds, repayment in full by Trenwick to
the banks would be due immediately. Under the events of default
to the agreement, the banks may also call for full
collateralization of the outstanding $230 million letters of
credit.

"Standard & Poor's expects to meet with management over the next
few weeks to resolve the CreditWatch status of the ratings,"
said Standard & Poor's credit analyst Karole Dill Barkley. "The
meetings will evaluate the status of the bank facility
renegotiation and cover the implication to Trenwick's liquidity,
business position, and future operating performance from the
covenant breach of the bank facility."

Following the review, Standard & Poor's expects that the ratings
could be affirmed or lowered materially.


TXU EUROPE: Fitch Revises Watch on Junk Sr. Rating to Evolving
--------------------------------------------------------------
Fitch Ratings, the international rating agency, has revised the
Rating Watch on the 'C' Senior Unsecured rating of TXU Europe
Ltd., to Evolving from Negative. This follows Monday's
announcement that TXE has agreed to sell a package of assets,
comprising the majority of its cash-generating UK business, to
Powergen UK plc ('A'/'F1'/Outlook Negative) for GBP1.37bn in
cash, plus the assumption of a related receivables
securitization programme. The Short-term rating remains at 'C'.

The sale follows a precipitous decline in the credit quality of
TXE. While the sale does capture value from part of the UK
business that may otherwise have continued to decline at an
accelerated rate, it is far from clear that the remaining
business of TXE will be able to support the level of liabilities
that Fitch estimates will remain. Fitch's Rating Watch Evolving
indicates that TXE's ratings could go up, stay the same, or go
down.

Further rating changes will be determined by the actions of the
creditor group. Positive rating action could follow some or all
of the following: Payment of the overdue interest on the USD200
million Energy Group Overseas B.V. 7.425% bonds; presentation of
a plausible recovery plan, including successful negotiation of
the above-market PPAs; resolution of the potential put event on
the 2030 GBP275m 7.25% sterling bond; and evidence of continued
access to lending markets. Negative rating action could follow
if the overdue interest payment is not met during the remaining
grace period; if further interest or other payment delays occur;
and/or if a standstill upon which the majority of creditor
parties can agree is not achieved.

The disposal - The sale has completed, with GBP1.37bn already
transferred to the TXE group. Given the time sensitivity, a
derogation has been granted to allow the acquisition to go ahead
before requisite approval from the European Commission has been
obtained. Though the sale requires no approval from creditors,
Fitch understands that certain clauses within existing TXE
obligations may be interpreted as restricting the ability of TXE
to make disposals. The fact that TXE has retained a residual
trading business complicates the interpretation of this point,
and, in the current situation, while such clauses may add modest
leverage in creditor negotiations, they are unlikely to be
decisive.

The assets sold include:

     - the UK retail operations in TXU Energi, Amerada and
Staywarm, which included 5.25m retail customers, together with
associated customer service provision, i.e. the contract to
service these customers by Vertex, a subsidiary of United
Utilities plc ('BBB+'/'F2'/Outlook Positive);

     - a total of 2.9 gigawatts of coal-fired capacity at
Ironbridge, High Marnham and Drakelow power stations, and
interests in the Citigen and Stallingborough combined heating
and power (CHP) stations.

The sale does not represent the sale of a specific legal entity,
but rather a "clean" (from the perspective of PGUK) asset sale.
PGUK has assumed only the customer receivables securitization
debt related to the assets, and this has little impact on ratios
as this financing has historically been netted out of Fitch's
measurement of gross debt. PGUK has also assumed a portion of
TXE's working capital in line with the assets acquired, and TXE
has noted PGUK's acceptance of certain ancillary obligations
typical for the sector, which Fitch excludes in calculating
headline ratios.

The remainder of TXE - TXE has stated that it is still pursuing
options which may see TXE continue as a going concern. A number
of bank, bond and trade creditors are being canvassed for their
views.

The assets which remain within the TXE group include:

     - TXU Europe Energy Trading, which will continue to hold
the trading operations of TXE, and, importantly, the above-
market power purchase agreements which TXE had been attempting
to renegotiate;

     - Certain UK assets not sold to PGUK;

     - TXU Nordic Energy - an 80%-owned joint venture, with
Pohjolan Voima Oy, Finland's second-largest electricity
generator, which engages in generation (c.600 megawatts) and
trading, as one of the largest traders on the Nordpool. TXE also
owns a 40% stake in Savon Voima Oy, Finland's seventh-largest
electricity distribution and supply company, and has access to
about 720MW of physical generation capacity in the region
through its investments in and contracts with companies like
PVO;

     - TXE also owns a 51% stake in Stadtwerke Kiel, and 74.9%
of Braunschweiger Versorgungs AG, two multi-utilities based in
northern Germany. TXU Europe has also operated a central
European trading headquarters in Geneva, Switzerland.

Operational cash flow from the residual assets in the UK is
likely to remain negative at least until the contract
restructuring currently underway has been resolved, with income
from the Nordic and central European assets, at a dividend
level, unlikely to exceed c.GBP100m p.a.

To put this reduced asset base and cash flow in the context of
the liabilities of the group, Fitch estimated net debt at TXE of
c.GBP2.6bn as of the start of October 2002. This included
c.GBP1.8bn of capital markets debt. Bank debt stood at c.GBP770m
earlier in October. TXE reported cash of just below GBP200m on
hand at the beginning of the month - together with other
obligations, this gives a gross debt position of c.GBP2.8bn, and
a net debt position of at least GBP2.6bn.

This gives an outstanding net GBP2.6bn in financial debt, plus
remaining trade creditors. A further liability arises on the
above-market PPAs, which TXE has retained following the asset
sale. The balance sheet value of unfavorable provisions stood at
GBP403m at end June 2002. It should be noted that these
provisions relate to contracts assumed following two
acquisitions - initially from contracts acquired when TXU Corp
acquired the Energy Group plc in 1998, but mostly relating to
the acquisition of Norweb Energi during 2000. They do not
include the contractual liabilities relating to the Drax primary
hedge agreement, or to other contracts entered into by TXUEET.
Contracts where no provisions have been taken thus represent a
further liability which is likely to exceed GBP200m-GBP300m.

Liabilities in Europe, excluding trade creditors other than the
above-market PPAs discussed above, may thus extend to at least
GBP3.4bn (GBP2.8bn in gross effective debt, plus upwards of
GBP600m in above-market PPA obligations). This stands against
cash on sale of GBP1.37bn, the remaining cash within TXE
(unlikely to exceed GBP200m) and the value of the unsold assets.

Two options for creditors - Option 1 - Creditors may press for
liquidation of all or parts of the TXE group, judging it better
to act while they can identify both at least GBP1.37bn of cash
within the group, and the potential for further cash to be
raised from disposing of the Nordic and central European
investments. Creditors may fear that potential continuing
operational cash deficits in the UK could reduce the available
value within the group if they do not act quickly. In order to
assure full recovery for all creditors, Fitch believes that the
sale proceeds on unsold assets would have to approach GBP2bn,
which the agency regards as highly unlikely - Fitch would regard
a figure half this level as optimistic, in line with its earlier
warning that gaining a price which would meet all creditors'
needs would be challenging. The ability of creditors to push for
liquidation may be significantly curtailed should TXE now be
able to avoid payment default on existing bonds and to fund any
put option on the 2030 GBP275m 7.25% bond.

Option 2 - The apparently modest liquidation-scenario recovery
potential under the above, and structural considerations, may
encourage the creditors to pursue a second option, and agree to
a standstill where necessary, granting TXE more time to address
disposals. The presence of the cash infusion from PGUK may
remove the necessity for a formal standstill in the near-term.
TXE may be able to deploy some of the cash receipts to pay out
the above-market PPAs, pay down the 2030 GBP275m sterling bond
which may be subject to a put option, and use the remaining cash
resources to attempt to nurse the European business through to a
future date where sustainable profitability may return. In
effect the receipt of the GBP1.37bn cash from Powergen UK does
give TXE room to manoeuvre, particularly as the current trading
price of TXE's public debt and weak credit position could reduce
the cash cost of restructuring the remaining liabilities. It is
conceivable that TXE may move rapidly from its current negative
operational cash flow position to one of positive operational
cash flow by rebasing the contract portfolio at current market
prices and taking advantage of the widespread weakness of the
generation market.

Fitch nonetheless regards the likelihood of TXE succeeding in
using the funds to recover to a stable financial condition in
the near- to medium-term as subject to considerable execution
risk. TXE had typically made a substantial portion of its
profits from structured products, which typically require stable
and strong credit ratings from the sponsor. The absence of the
retail hedge will increase income volatility, even were TXE to
succeed in rebasing its contract position. In addition, as Fitch
has already highlighted, continuing lack of clarity over the
location and interrelationship of creditor classes at the
different levels of the TXE group may yet hamper speedy
conclusion of a standstill agreement.


UNITED AIRLINES: Flight Attendants Commence Negotiations
--------------------------------------------------------
Representatives of the United Airlines Master Executive Council
of the Association of Flight Attendants, AFL-CIO, began meeting
with airline management recently in hopes of reaching agreement
on changes to the Flight Attendant Contract that will provide
United management with the savings it needs from the Flight
Attendants to avoid bankruptcy.  This is the statement of AFA
United MEC President Greg Davidowitch:

     "The Flight Attendants understand that it will likely take
the participation of all labor groups, creditors, lenders and
lessors for the airline to successfully restructure outside of
bankruptcy.  It is now up to United management to proceed with
the fairness and equity needed in these delicate negotiations,
recognizing the unique characteristics of each labor group and
achieving individual cost savings packages that meet the
airline's needs.  All of this must fall within the framework
developed by the Union Coalition.  The money is there, United
must now show its willingness to work with us to get access to
it and the other strategic initiatives contained in the Union
Coalition Framework.

     "Our goal is to provide stability for our company and to
fix our airline for the long term.  The only way to do that is
through a cooperative relationship.  To that end, the Flight
Attendants have entered into direct negotiations with United.
The goal of the talks is to develop a negotiated solution to the
airline's problems outside the bankruptcy process.   The Flight
Attendants will have the opportunity to vote on any agreement
reached by the parties.

     "Flight Attendants are not entering these negotiations just
for the sake of providing management with concessions.  As part
of any cost savings package, Flight Attendants must be rewarded
with equity and profit sharing for our investment in the airline
that will reward us when the airline turns around.  In the event
United is unable to secure the concessions needed from all
constituencies, including lessors, lenders and creditors, and
bankruptcy becomes necessary, we are also demanding a guarantee
that management will not seek any further concessions if the
Flight Attendant membership ratifies a concessionary agreement.

     "Flight Attendants are the airline's front-line employees.  
This airline has a much better future if we work together to
solve our problems.  Our new CEO, Glenn Tilton, has shown a
desire to work with us.  We are hopeful and have every reason to
believe that relationship will continue.  In the short time
since our new CEO has been at the helm of United, we have been
able to accomplish what once was considered impossible by
working together."

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


U.S. INDUSTRIES: Completes SiTeco Sale for EUR113 Million
---------------------------------------------------------
U.S. Industries, Inc., (NYSE-USI) has completed the sale of
SiTeco, its European lighting division, to funds advised by
JPMorgan Partners, the private equity arm of JPMorgan Chase &
Company.

Total consideration paid at closing was approximately EUR 113
million in cash. The purchase price was reduced from the amount
originally announced in early August by about EUR 7 million due
to financing considerations as a result of softness in SiTeco's
sales during the fourth quarter and a revised forecast as a
result of a lowered outlook for the German economy for 2003.

SiTeco, based in Traunreut, Germany, manufactures and
distributes lighting systems in Germany, Austria, Slovenia and
other countries.

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.

                          *    *    *

As reported in Troubled Company Reporter's September 16, 2002
edition, Fitch lowered its rating on US Industries, Inc.'s
$250 million 7.125% senior secured notes to 'C' from 'B-'
following the company's announcement that it commenced an
exchange offer to exchange cash and notes with a higher interest
rate and longer maturity for all of its outstanding 7.125%
senior secured notes due October 15, 2003. The rating on the
7.125% senior secured notes remains on Rating Watch Negative as
it will be lowered to 'D' following the completion of the debt
exchange.


USG CORP: Seeks Approval to Hire Leydig Voit as Patent Counsel
--------------------------------------------------------------
According to Paul N. Heath, Esq., at Richards, Layton & Finger,
USG Corporation and its debtor-affiliates want to retain and
employ Leydig, Voit & Mayer, Ltd., as Special Patent Counsel in
these Chapter 11 cases, specifically to:

     1) defend USG Interiors in patent infringement litigation
        initiated by Worthington Armstrong Venture in the
        United States District Court for the Eastern District
        of Pennsylvania; and

     2) provide other intellectual property counseling,
        and prosecution services.

     3) provide analysis, advice, and litigation regarding
        patent and other intellectual property matters,
        including, but not limited to, infringement issues.

Mr. Heath points out that LVM has provided legal services to the
USG companies since 1998.  The 100-year-old firm employs more
than 70 attorneys in three domestic offices, plus support staff
and technical advisors.

LVM has been chosen for its extensive experience, specifically
with the WAVE litigation, and its understanding of the Debtors'
patent-related matters and long-standing relationship with the
USG companies.

LVM intends to charge for its legal services on an hourly basis
in accordance with its ordinary and customary rates and seek
reimbursement for actual and necessary out-of-pocket expenses,
while maintaining detailed and contemporaneous time and actual
expense records.

Prior to the Petition Date, Mr. Heath reports that the Debtors
provided LVM with a $150,000 retainer.  In addition, the Debtors
made payments in the year preceding the Petition Date:

        June 28, 2000  --  $83,344.36
        July 10, 2000  --    1,732.83
       August 9, 2000  --    8,415.90
   September 11, 2000  --   12,354.31
      October 4, 2000  --   19,347.65
    November 16, 2000  --   10,248.45
    December  4, 2000  --   24,810.23
    December 26, 2000  --   28,391.24
    January  23, 2001  --      191.00
    February  5, 2001  --   19,893.19
        April 4, 2001  --   37,476.84
         May 18, 2001  --   63,138.69
         June 8, 2001  --   65,318.14
         June 8, 2001  --   37,838.90
         June 8, 2001  --   23,109.79
         June 8, 2001  --  144,959.84

The Debtors' operating cash was used to pay the Retainer and the
Prepetition Payments.

To the best of the Debtors' knowledge, information and belief,
LVM does not hold any interests adverse to the Debtors and their
respective estates.  LVM is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code, Mr. Heath
asserts. (USG Bankruptcy News, Issue No. 35; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

USG Corporation's 8.50% bonds due 2005 (USG05USR1) are trading
at 79 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=USG05USR1for  
real-time bond pricing.


WARNACO GROUP: Has Until January 31 to Decide on Milford Lease
--------------------------------------------------------------
Pursuant to a Stipulation The Warnaco Group, Inc., and its
debtor-affiliates entered into with Crown Milford LLC, they have
until October 31, 2002 to assume or reject a lease of an
administrative office building located at 470 Wheeler Farms Road
in Milford, Connecticut.  The Lease costs $141,867 per month,
which will expire on January 31, 2009.

According to Kelley A. Cornish, Esq., at Sidley Austin Brown &
Wood LLP, in New York, the Debtors currently have 283 employees
working at the Milford Property in these capacities:

    (i) Corporate Finance,

   (ii) Treasury,

  (iii) Tax,

   (iv) Internal Auditing,

    (v) Corporate Control,

   (vi) Manufacturing and Operations for Intimate Apparel,

  (vii) Human Resources,

(viii) Transportation, and

   (ix) Facilities Maintenance.

Pursuant to the Debtors' plan of reorganization, Ms. Cornish
tells Judge Bohanon that the Debtors will need the building
under the Lease after May 31, 2003.

Thus, pursuant to Section 365 of the Bankruptcy Code, the
Debtors ask the Court to extend the deadline to decide on the
Milford Lease through and including the confirmation of the
reorganization plan.

Ms. Cornish explains that the extension will afford the Debtors
to:

    (a) negotiate with the Landlord with respect to a new or
        modified lease for less space;

    (b) identify a tenant to sublet some of the excess leased
        space; or

    (c) identify a party that would take an assignment of the
        Lease for value.

Accordingly, Ms. Cornish contends, the extension of the lease
decision period is warranted.  Moreover, Ms. Cornish adds that:

    (a) the Debtors have enough liquidity to provide adequate
        assurance of future payment under the Lease;

    (b) if the Deadline is not extended, the Debtors may be
        forced to prematurely assume the Lease, which could lead
        to unnecessary administrative claims against their
        estate if the Debtors' negotiations with the Landlord
        and other marketing efforts are unsuccessful and the
        Lease is ultimately terminated.  Conversely, if the
        Debtors precipitously reject the Lease, they may forego
        significant value and create a large unwarranted
        rejection damage claim; and

    (c) the Debtors have made progress on evaluating the
        hundreds of leases since the Petition Date.

                        *     *      *

Crown Milford believes that plan confirmation is too vague to be
the deadline for which the Debtors may assume or reject the
Milford Lease.  Thus, to set a specific date, Crown Milford and
the Debtors entered into a Stipulation resolving the Motion.

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

1. The time to assume or reject the Milford Lese is further
   extended through and including January 31, 2003, without
   prejudice to the Debtors' rights to seek further
   extensions or Crown Milford's rights to object to further
   extensions;

2. Crown Milford has the right to file a motion with this Court
   to shorten the deadline to assume or reject the Milford Lease
   for cause and the Debtors have the right to object to the
   motion; and

3. In the event that the Debtors seek to reject the Milford
   Lease on or before January 31, 2003, the Debtors will
   continue to fulfill all their administrative obligations
   under the Milford Lease, as the case may be, including,
   without limitation, timely payment of rent, as provided
   therein, until the later of:

    (a) the date of the order approving the rejection;

    (b) the rejection effective date set forth in the order
        approving the rejection;

    (c) the 90th day after receipt of rejection notice by
        counsel for Crown Milford; and

    (d) the date the Debtors surrender the property subject to
        the Milford Lease. (Warnaco Bankruptcy News, Issue No.
        35; Bankruptcy Creditors' Service, Inc., 609/392-0900)  


WORLDCOM INC: Committee Taps Houlihan Lokey for Financial Advice
----------------------------------------------------------------
The Official Committee of Unsecured Creditors, appointed in the
chapter 11 cases involving Worldcom Inc., and its debtor-
affiliates, seeks the Court's authority to retain and employ
Houlihan Lokey Howard & Zukin Capital as its financial advisor
nunc pro tunc to July 29, 2002.

Houlihan Lokey has been providing critical services to the
Committee since June 29, 2002, including reviewing extensive
operating information, meeting with the Debtors' management,
analyzing various issues confronting the Debtors and
communicating with the Committee regarding these matters.

Committee Co-Chairperson Scott Cohen relates that the Committee
chose Houlihan Lokey because of its pressing need to retain a
financial advisor to assist it in the critical tasks associated
with analyzing and implementing critical restructuring
alternatives, and to help guide it through the Debtors'
reorganization efforts.  As a result of the Committee's careful
deliberations, the Committee determined that Houlihan Lokey's
broad experience would best serve the interests of the
Committee, its counsel, and the creditors in these cases.

According to Mr. Cohen, Houlihan Lokey is a nationally
recognized investment banking/financial advisory firm with 9
offices worldwide and more than 275 professionals.  Houlihan
Lokey provides investment banking and financial advisory
services and execution capabilities in a variety of areas,
including financial restructuring, where Houlihan Lokey is one
of the leading investment bankers and advisors to debtors,
bondholder groups, secured and unsecured creditors, acquirors,
and other parties-in-interest involved in financially distressed
companies, both in and outside of bankruptcy.  Houlihan Lokey's
Financial Restructuring Group, which has over 75 professionals
dedicated to these types of engagements, will be providing the
agreed-upon financial advisory services to the Committee.  
Houlihan Lokey has served as a financial advisor in some of the
largest and most complex restructuring matters in the United
States, including serving as the financial advisor to the
debtors in the chapter 11 proceedings of XO Communications,
Inc., NII Holdings, Inc. (Nextel International), Covad
Communications, Inc. and AmeriServe Food Distribution, Inc., and
as the financial advisor to the official creditors' committees
in the chapter 11 proceedings of Enron Corporation, Williams
Communications Group, Inc., Laidlaw, Inc., and The Loewen Group,
Inc.  In addition, Houlihan Lokey has provided financial
advisory and investment banking services to over 100
telecommunications and media companies and their creditors
throughout the world, including McLeod USA, Impsat Fiber
Networks, Inc., Flag Telecom Holdings, Ltd., Asia Global
Crossing, Global Telesystems, Inc., GST Telecommunications and
CTI Movil.

Houlihan Lokey is expected to:

A. evaluate the assets and liabilities of the Debtors;

B. analyze and review the financial and operating statements of
   the Debtors;

C. analyze the business plans and forecasts of the Debtors;

D. evaluate all aspects of the Debtors' DIP financing, cash
   collateral usage and adequate protection, and any exit
   financing in connection with any plan of reorganization and
   any related budgets;

E. provide specific valuation or other financial analyses as the
   Committee may require in connection with these cases;

F. help with the claim resolution process and distributions;

G. assess the financial issues and options concerning:

   1. the sale of any assets of the Debtors and the Company,
      either in whole or in part, and

   2. the Debtors' plans of reorganization or any other plans of
      reorganization;

H. prepare, analyze and explain the Plan to various
   constituencies; and

I. provide testimony in court on behalf of the Committee, if
   necessary.

Houlihan Lokey will be entitled to receive, as compensation for
its services:

A. A $350,000 Monthly Fee;

B. Upon the closing or consummation of a Transaction, a
   Transaction Fee equal to:

    -- $5,000,000; plus

    -- a Variable Transaction Fee; plus

    -- $3,000,000 if the Transaction is consensual.

   The Variable Transaction Fee will be calculated as:

    -- 20 basis points (0.20%) of the total enterprise value of
       the Debtors exceeding $6,000,000,000, as of the
       consummation of a Transaction, plus

    -- 35 basis points (0.35%) of the total enterprise value of
       the Debtors exceeding $9,000,000,000, as of the
       consummation of a Transaction.

   The Variable Transaction Fee will not exceed $17,000,000, and
   the Transaction Fee will not exceed $25,000,000.

   A Transaction will be consensual if:

    -- a Plan is confirmed pursuant to Section 1129 of the
       Bankruptcy Code, and

    -- at least 50% in dollar amount of each class of unsecured
       claims that actually voted in favor of the Plan;
       provided, however, that to the extent the Plan provides
       for a single class of unsecured creditors or classifies
       creditors without regard to the Debtor entity against
       which the unsecured claim is held, at least 50% in dollar
       amount of the unsecured claims of each Debtor that
       actually votes in favor of the Plan.

   Any party asserting that the Consensual Transaction Fee has
   not been earned will have the burden of establishing that the
   Requisite Majority was not achieved.  The Transaction Fee
   will be paid on the consummation of a Transaction either:

    -- during the term of the Engagement Letter, or

    -- within 12 months of the effective date of termination
       of the Engagement Letter; and

c. Reimbursement of all reasonable out-of-pocket expenses.  The
   Engagement Letter also provides that the Debtors will
   indemnify and hold Houlihan Lokey harmless against any and
   all losses, claims, damages or liabilities in connection with
   the engagement, except to the extent they arise as a result
   of any gross negligence, willful misconduct, bad faith or
   self-dealing on Houlihan Lokey's part in the performance of
   its services.

Houlihan Lokey Managing Director Alan D. Fragen assures the
Court that the Firm does not represent any of the Debtors'
creditors or other parties to this proceeding, or their
respective attorneys or accountants, in any matter which is
adverse to the interests of any of the Debtors.  Houlihan Lokey
is a "disinterested person" as defined in Section 101(14) of the
Bankruptcy Code.  In addition, Houlihan Lokey does not hold any
interest adverse to any of the Debtors or their estates in the
matters on which Houlihan Lokey is to be engaged.  However,
Houlihan Lokey has provided services to several parties in
unrelated matters including Arthur Anderson, AT&T, Bank of
America Corp., BellSouth, Cerberus Capital Management, Charles
Schwab Corp., Choice Communications Inc., Citizens Telephone
Co., Credit Suisse First Boston, Deutsche Bank Alex Brown,
Electronics Research Inc., First Union National Bank, Fleet
Capital Corp., Florida Power & Light Co., Goldman Sachs & Co.,
Internal Revenue Service, John Hancock Financial Services Inc.,
KPMG LLP, LaSalle Bank, Lehman Bros. Holdings Inc., MCI
Telecommunications Corp., MCI WorldCom Communications Inc.,
MicroStrategy Inc., Morgan Stanley Capital Partners III,
Motorola Inc., Northern Trust Corp., Northern Trust Bank, Piper
Rudnick LLP, PPM America Inc., Prudential Real Estate Investors,
Q Investments LLP, Qwest Communications International Inc.,
Ameritech, Pacific Bell, Satellite Asset Management, Simpson
Thacher & Bartlett, State Street Bank & Trust Co., Verizon
Communications Inc., Wells Fargo, and Wilmer Cutler & Pickering.
(Worldcom Bankruptcy News, Issue No. 10; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   


WORLDCOM INC: Net Loss Narrows to $98 Million in August 2002
------------------------------------------------------------
WorldCom, Inc., filed its July and August 2002 Monthly Operating
Reports with the U.S. Bankruptcy Court for the Southern District
of New York.  During the month of July 2002, WorldCom recorded
$2.464 billion in revenue, $359 million in earnings before
interest, taxes depreciation and amortization and a net loss of
$331 million.  August 2002 revenue was $2.403 billion, EBITDA
was $417 million and the net loss was $98 million.

WorldCom also reiterated that it continues to evaluate its
balance sheet and expects to record further write-offs of
assets, including the likelihood that it may determine
substantially all existing goodwill and other intangible assets,
currently recorded as approximately $50 billion, should be
written off.  The company is also evaluating the carrying value
of existing property, plant and equipment as to possible
impairment of historic values and the adequacy of the allowance
for doubtful accounts receivable.  Until this balance sheet
evaluation is complete, the company will not issue a balance
sheet or cash flow statement as part of the monthly operating
report.

The company has changed its accounting treatment for several
items including the deconsolidation of Avantel and revenue
recognition for reciprocal compensation, presubscribed
interexchange carrier charges, and international settlement
revenues.  Thus, these monthly reports are not comparable with
results from previous periods.  In addition, the company will
consolidate results of Embratel each quarter as Embratel
financial results are publicly released.

WorldCom's Monthly Operating Reports will be available on
WorldCom's Restructuring Information Desk at
http://www.worldcom.com  

Based on current information and a preliminary analysis of its
ability to satisfy outstanding liabilities, WorldCom believes
when the company emerges from bankruptcy proceedings, its
existing preferred stock and WorldCom group and MCI group
tracking stock issues will have no value.

WorldCom, Inc., (WCOEQ, MCWEQ) is a pre-eminent global
communications provider for the digital generation, operating in
more than 65 countries. With one of the most expansive, wholly-
owned IP networks in the world, WorldCom provides innovative
data and Internet services for businesses to communicate in
today's market. In April 2002, WorldCom launched The
Neighborhood built by MCI -- the industry's first truly any-
distance, all-inclusive local and long- distance offering to
consumers for one fixed monthly price. For more information, go
to http://www.worldcom.com

DebtTraders reports that Worldcom Inc.'s 8.0% bonds due 2006
(WCOM06USN1) are trading at 15 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCOM06USN1
for real-time bond pricing.


XEROX CORP: GE Entity Agrees to Fund 8-Year U.S. Customer Leases
----------------------------------------------------------------
Xerox Corporation (NYSE: XRX) and General Electric (NYSE: GE)
announced an eight-year agreement for GE Vendor Financial
Services to become the primary equipment financing provider for
Xerox customers in the United States through monthly advances
against Xerox's new U.S. lease originations.

In addition to the $2.5 billion already funded by GE, which is
secured by portions of Xerox's current U.S. lease receivables,
the new agreement calls for GE to provide Xerox with funding in
the U.S. of up to $5 billion outstanding during the eight-year
term, subject to certain funding conditions.

"We are pleased that our relationship with Xerox continues to
grow and strengthen," said Dan Henson, president and chief
executive officer, GE Vendor Financial Services. "Our two
organizations working together provide an effective combination
with a great value proposition."

"This significant agreement represents a major step forward in
Xerox's well defined strategy to further fortify its financial
position," said Lawrence A. Zimmerman, Xerox senior vice
president and chief financial officer. "We have put the right
processes in place, supported by this long-term contractual
arrangement with GE, to ensure financial flexibility as we
effectively manage and strengthen our balance sheet."

The agreement takes effect immediately and calls for GE to lend
against Xerox's U.S. lease receivables at over-collateralization
rates that are currently about 10 percent. Xerox noted that the
financing debt and the receivables will be consolidated on its
balance sheet with the debt funded by the GE advances.

Earlier this year, the companies together launched Xerox Capital
Services, LLC. XCS, jointly managed by GE and Xerox, is
responsible for Xerox's customer administration operations in
the U.S.

Xerox Corporation's 9.75% bonds due 2009 (XRX09USA1),
DebtTraders reports, are trading at 80 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=XRX09USA1for  
real-time bond pricing.


XETEL CORP: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: XeTel Corporation
        2105 Gracy Farms Lane
        Austin, Texas 78758

Bankruptcy Case No.: 02-14222

Type of Business: Contract manufacturer of electronic
                  assemblies

Chapter 11 Petition Date: October 21, 2002

Court: Western District of Texas (Austin)

Judge: Frank R. Monroe

Debtors' Counsel: Mark Curtis Taylor, Esq.
                  Hohmann & Taube LLP
                  100 Congress #1600
                  Austin, TX 78701
                  (512) 472-5997

Total Assets: $37,733,000

Total Debts: $34,271,000

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Bureau of Engraving         Trade                   $5,412,000
3311 Broadway St. NE
Minneapolis, MN 55413

Raytheon Missile Systems   Customer Contract        $1,288,037
Co.
847 East Dock, Building 807/17
1151 East Hermans Road
Tucson, AZ 85706

Avnet Electronics          Trade                    $1,115,547  
Marketing         
12211 Technology Blvd.
Austin, Texas 78759

GE Capital                 Equipment Lease          $1,030,560  
303 International Circle,
Suite 300
Hunt Valley, MD 21031

Arrow Electronics (CMS)    Trade                      $844,466
9233 Waterford Center Blvd.
Austin, TX 78758

Key Equipment Finance      Equipment Lease            $539,916
54 State Street, 9th Floor
Albany, NY 12207

Tyco Melbourne - AQC       Trade                      $511,424
600 C/D N. John Rodes Blvd.
Melbourne, FL 32934

Vishay/Siliconix           Trade                      $408,300
P.O. Box 846024
Dallas, TX 75284-6024

Ericsson                   Customer Contract          $379,869
701 N. Glenville Drive
Richardson, TX 75081

Hill Partners Management   Lease                      $312,179
Co.
In Trust for Met Life
Ins. Co.
2800 Industrial Terrace
Austin, TX 78758

Valor Computerized         Trade                      $295,455
Systems
25341 Commercentre Drive
Suite 200
Lake Forest, CA 92630

CIT Group                  Equipment Lease            $223,640
1540 West Fountainhood Pkwy
Tempe, AZ 85282

Techwise Circuits Co.      Trade                      $295,455
Limited
Landmark North, Unit 22-23
Level 12 39 Lung Sum Ave.
Sheung Shui NT
Hong Kong

LGS Technologies           Trade                      $212,143  

Duke Realty Corporation    Lease                      $207,568

Teknor Applicom, Inc.      Trade                      $206,224

TI                         Trade                      $201,698

AMD                        Customer Contract          $189,000

MEMEC United               Trade                      $164,268

Citicotp Vendor Finance    Unknown                    $182,420


* Ann Gillin Lefever Joins Clear Thinking Group, Inc.'s Board
-------------------------------------------------------------
Clear Thinking Group, Inc., the retail, consumer products, and
manufacturing consultancy, announced the appointment of Ann
Gillin Lefever to the company's Board of Directors. Lefever is
currently a Senior Vice President in Equity Research at Lehman
Brothers, where she tracks the Household and Personal Care
Industries.

"We are thrilled that Ann will join our Board of Directors. Her
knowledge of and experience in the Food, Beverage, and Consumer
Products industries will be invaluable to the Board and to Clear
Thinking Group," said Stuart Kessler, CEO of Clear Thinking
Group. "With Ann's financial background, global experience, and
in-depth industry knowledge on our team, we can be confident in
the continued growth and success of Clear Thinking Group,"
Kessler added.

Prior to her current position as the Senior Analyst following
the Household and Personal Care Industries at Lehman Brothers,
Lefever was a Principal and Senior Analyst at Sanford C.
Bernstein & Co., for four years. At Bernstein, Lefever was
responsible for introducing and launching coverage of the
international food, beverage, and consumer products companies.
Her work has earned her recognition in the 2002 Institutional
Investor All America Research Team survey, among others. From
1986-1996, Lefever was with Bankers Trust Company, where she
worked in Corporate Finance and in Latin America. Lefever earned
her M.B.A. from The Wharton School, University of Pennsylvania,
and holds a B.S. in Finance from Georgetown University.

Clear Thinking Group is a national consulting organization that
provides trustworthy advice and actionable solutions to its
clients. Their wide range of services help clients achieve their
objectives with innovative operating and financial strategies.
This side-by-side approach drives companies toward growth and
helps accelerate the turnaround process. Clear Thinking Group is
based in Hillsborough, N.J. with offices in Atlanta and Florida.
Clear Thinking Group is a subsidiary of Liquidation World, Inc.
(TSE:LQW) (Nasdaq:LIQWF).


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

Issuer               Coupon   Maturity  Bid - Ask  Weekly change
------               ------   --------  ---------  -------------
Federal-Mogul         7.5%    due 2004    17 - 19        0
Finova Group          7.5%    due 2009    28 - 30        -1
Freeport-McMoran      7.5%    due 2006    87 - 89        -1
Global Crossing Hldgs 9.5%    due 2009   0.5 - 1.5       0
Globalstar            11.375% due 2004     2 - 3         0
Lucent Technologies   6.45%   due 2029    34 - 36        +4
Polaroid Corporation  6.75%   due 2002   3.5 - 5.5       -0.5
Terra Industries      10.5%   due 2005    83 - 85        0
Westpoint Stevens     7.875%  due 2005    28 - 30        -2
Xerox Corporation     8.0%    due 2027    36 - 38        0

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 ***