TCR_Public/021030.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

           Wednesday, October 30, 2002, Vol. 6, No. 215

                           Headlines

ADELPHIA COMMS: 10 Utilities Ask Court to Vacate Injunction
AES CORPORATION: Exchange Offer for Senior Notes Expires Today
AIR CANADA: September 30 Balance Sheet Upside Down by $1.5 Bill.
AKORN INC: Sets Annual Shareholders' Meeting for Dec. 19, 2002
ALLMERICA FIN'L: S&P Lowers Counterparty Credit Rating to BB-

ALLMERICA FINANCIAL: Third Quarter Net Loss Tops $315 Million
AMERICAN ENTERPRISE: Plan Confirmation Hearing Set for Nov. 20
AMES DEPARTMENT: Gets Okay to Continue Compensation Procedures
ANC RENTAL: Consolidating Operations at George Bush Airport
ANGEION CORP: Minnesota Court Confirms Joint Reorganization Plan

ANTHONY & SYLVAN: Working Capital Deficit Tops $1.2M at Sept. 30
ASBESTOS CLAIMS: All Proofs of Claim Due Tomorrow
ASPEN GROUP RESOURCES: Defaults on Bank Loan Facility
BALDWINS INDUSTRIAL: Panel Hires McClain & Leppert as Counsel
BCE INC: Plans to Raise C$2B in Public Debt to Fund Bell Buyback

BETHLEHEM STEEL: Court OKs Sale of Bethlehem Center to Majestic
BRIGHTPOINT INC: Closes Sale of Certain Mexican Operating Assets
BURNHAM PACIFIC: Trustees to Make Liquidating Distribution Today
CLICKS & FLICKS: Gets Nod to Hire Finkel Goldstein as Counsel
COMM 2000-C1: Fitch Affirms Low-B and Junk Ratings on 7 Notes

COMVERSE: S&P Cuts Corp. Credit & Sr. Unsec. Ratings Cut to BB-
CONTOUR ENERGY: Gets OK to Tap Energy Spectrum as Fin'l Advisors
COVANTA ENERGY: Wants Lease Decision Period Extended to March 27
CYBEX INT'L: Will Hold Third Quarter Conference Call Tomorrow
DOBSON COMMS: Will Report Third Quarter Results on Nov. 14, 2002

EB2B COMMERCE: Winding Down Training & Client Educ'l Services
ENRON CORP: Wins Nod to Hire Blackstone as Financial Advisors
EOTT ENERGY: Taps Andrews & Kurth as Special Litigation Counsel
GENTEK INC: Brings-In Skadden Arps to Prosecute Chapter 11 Cases
GLOBAL CROSSING: NY Court Approves Amended Disclosure Statement

GLOBAL CROSSING: Carries Over 2BB Minutes on VoIP Platform in Q3
GRANT PRIDECO: S&P Keeping Watch on Low-B Credit & Note Ratings
HELLER FINANCIAL: Fitch Affirms Low-B Ratings on Fives Classes
HORIZON NATURAL: Agrees to Restructure Pittston Coal Transaction
HORSEHEAD: FTI Consulting Serves as Committee's Fin'l Advisors

HUNTSMAN POLYMERS: Eliminates $763MM Debt Claims after Workout
HYDROMET ENVIRONMENTAL: Defaults on Two Convertible Debentures
HYPERDYNAMICS: Independent Auditors Express Going Concern Doubt
IFCO SYS: S&P Withdraws Junk-Rated Bank Loan over Restructuring
KELLOGG COMPANY: Working Capital Deficit Tops $981MM at Sept. 28

KENTUCKY ELECTRIC: Will Defer $1.5MM Payment on 7.66% Sr. Notes
KMART CORP: Seeks Okay to Assume Samuel Aaron Consignment Pact
LEGATO SYSTEMS: Red Ink Continues to Flow in Third Quarter 2002
LIONBRIDGE TECHNOLOGIES: Working Capital Deficit Widens to $4MM
LTV CORP: Varco Pruden Selling Miller Interests to Fitex S.A.

M. A. GEDNEY: Case Summary & 20 Largest Unsecured Creditors
MINNETHAN LAND: Case Summary & 3 Largest Unsecured Creditors
MIRANT: Resolves Issues re Electricity Generation in Philippines
MITEC: Will Streamline Activities to Generate Cash & Cut Costs
MORTGAGE CAPITAL: Fitch Rates Five Note Classes at Low-B Level

NERVA/SAVANNAH: Fitch Keeping Watch on Three Low-B-Rated Notes
NETIA HOLDINGS: Dutch Units' Creditors Approve Composition Plans
NPF XII/NPF VI: Fitch Withdraws Ratings Over Operations Concerns
NU-LIFE CORP: Commences Restructuring Proceeding in Canada
OAKWOOD MORTGAGE: S&P Maintains B- Ratings on Sub. B-2 Classes

OCTEL CORP: Working Capital Deficit Tops $14.8 Mill. at Sept. 30
OGLEBAY NORTON: Reports Improved Third Quarter 2002 Results
PANTRY INC: Chilton Investment Discloses 12.4% Equity Stake
PERLE SYSTEMS: May 31 Balance Sheet Upside-Down by $2.25 Million
PETROMINERALS CORP: Considering Reorganization Under Chapter 11

PHILIPS INTERNATIONAL: Double Play Discloses 6.7% Equity Stake
READER'S DIGEST: Q1 2003 Results In Line with Revised Guidance
RELIANCE GROUP: Insurance Commissioner Sells Shopping Center
RELIANCE INSURANCE: Court Fixes Dec. 31, 2003 Claims Bar Date
SAFETY-KLEEN CORP: Wants to Expand Experio Solutions' Engagement

SAIRGROUP FINANCE: SDNY Court Fixes Nov. 22 as Claims Bar Date
SENTRY TECHNOLOGY: Hires Balfour Capital to Raise Fresh Capital
SERVICE MERCHANDISE: Has Until Jan. 31 to Remove Pending Actions
SMTC CORP: 3rd Quarter Results Consistent with Company Estimates
SORRENTO NETWORKS: Board Approves 1-For-20 Reverse Stock Split

SUPERIOR TELECOM: S&P Ups Rating to CCC After Debt Restructuring
TIME WARNER TELECOM: Banks Relax Covenants Under Credit Facility
TRANSCARE: US Trustee Appoints Official Creditors' Committee
TROPICAL SPORTSWEAR: S&P Ratchets Low-B Ratings Up a Notch
UNIFY CORP: Appoints Pete DiCorti as Chief Financial Officer

US AIRWAYS: HSBC Seek Stay Relief to Exercise Contractual Rights
VENCOR: Wants Hearing on Hyperbaric Pact to Continue on Nov. 21
WESTAR AUTO: Bank One Forecloses on Security Interests in Certs.
WORLDCOM: Wins Approval to Implement Proposed Setoff Procedures
WORLDCOM: 80% of Q3 Defaults Results from Company's Bankruptcy

* Shoylekov Named Special Counsel to Cadwalader's London Office

* Meetings, Conferences and Seminars

                           *********

ADELPHIA COMMS: 10 Utilities Ask Court to Vacate Injunction
-----------------------------------------------------------
Allegheny Power, American Electric Power, Baltimore Gas &
Electric Company, Duke Power, Georgia Power Company, National
Fuel Gas Distribution Corporation, New York State Electric and
Gas Corporation, Niagara Mohawk Power Corporation, Southern
California Edison Company and Virginia Electric and Power
Company, ask the Court overseeing the chapter 11 cases involving
the Adelphia Communications Debtors to vacate the Utility Order
entered by this Court on July 17, 2002.

Robert T. Barnard, Esq., at Thompson & Hine LLP, in New York,
tells the Court that the Debtors failed to serve the Utilities
with the Utility Motion.  Under fundamental principles of due
process, the Court should not have granted the Utility Motion
without proof that the Debtors actually served the Utility
Motion on the parties against whom the relief was sought.  The
only pleading that the Debtors sent to some of the Utilities was
a Notice of the Utility Motion, which was not served on the
Utilities in accordance with Rule 7004 of the Federal Rules of
Bankruptcy Procedure.  Accordingly, the Utilities were denied
any meaningful opportunity to contest the relief sought in the
Utility Motion.  Therefore, the Court should vacate the Utility
Order as to the Utilities and permit them to be heard on the
issues raised in the Utility Motion and this Motion.

Mr. Barnard contends that the relief provided in the Utility
Order differs from the relief requested in the Utility Motion
and in the proposed order submitted with the Utility Motion.
Specifically, the Postpetition Default Provision contained in
the Utility Order was not sought in the Utility Motion or the
proposed order.  Through the Postpetition Default Provision in
the Utility Order, the Debtors appear to have obtained
injunctive and equitable relief, which forbids the Utilities
from discontinuing postpetition service to the Debtors without
further Court order.

Furthermore, the Court should vacate the Utility Order because
the Debtors have not set forth any legal or factual support for
the extraordinary injunctive relief they improperly obtained in
the Utility Order.  Presumably the legal basis for the
injunctive relief that is contained in the Utility Order is
Section 366 of the Bankruptcy Code.  However, Section 366 of the
Bankruptcy Code does not authorize the imposition of injunctive
relief.

Mr. Barnard notes that the Utility Motion does not contain any
facts as to why the Debtors need to obtain an injunction to
preclude the Utilities from exercising their state law rights to
terminate service for a postpetition payment default.  In fact,
since the Debtors claim that they will timely pay their
postpetition invoices, it is unclear why they would need the
injunctive relief they slipped into the Utility Order.

In addition, the Court should vacate the injunctive relief in
the Utility Order because it actually deprives the Utilities of
their rights under applicable federal and state law.  Under
applicable federal and state law, the Utilities, in accordance
with their state law tariffs and regulations, are entitled to
terminate service to the Debtors for nonpayment of postpetition
bills without the need to obtain Court approval.

Mr. Barnard argues that there is no need for the injunctive
relief because the normal billing cycles of the Utilities, which
are governed by applicable tariffs, regulations and state laws,
provide the Debtors with more than sufficient protections.
Under the Utilities' state-mandated billing cycles, the Debtors
must be severely delinquent in the payment of their bills and be
sent a written warning notice before service would be
disconnected for non-payment of postpetition bills.

In contrast, the injunctive relief imposes a severe hardship on
the Utilities.  Under the Utilities' state-mandated billing
cycles, the Utilities could provide the Debtors with 2 to 2-1/2
months of unpaid service before the Utilities could begin to
terminate service to the Debtors for nonpayment of postpetition
bills.  The injunctive relief in the Utility Order requires the
Utilities to incur these losses before they are permitted to
move the Court for the "right" to terminate service to the
Debtors for nonpayment of postpetition bills.

In light of the Debtors' uncertain financial condition and the
fact that several of the Utilities have over 1,000 accounts with
the Debtors, requiring the Utilities to request a hearing each
time there is a default on one of accounts after already having
suffered a two-month loss on the account imposes an undue
hardship on the Utilities and an unreasonable risk of
nonpayment.

According to Mr. Barnard, nobody knows the Debtors' true
financial condition, not even the Debtors, as evidenced by their
qualifications to their schedules in these bankruptcy cases.
The Debtors have not filed any financial statements since the
third quarter of 2001.  Moreover, as a result of a series of
revelations made by the Debtors since March this year regarding
mismanagement and previously undisclosed and unauthorized
financial transactions, the Debtors' financial statements for
the last three years are considered to be wholly unreliable and
will be restated by the Debtors.  Even the Debtors' new
accountants anticipate that it will take several months to
untangle the Debtors' financial books and records and provide
any reliable financial data regarding the Debtors.  Accordingly,
nothing is currently truly known regarding the Debtors'
finances, and it is therefore unknown whether the DIP financing
the Debtors have obtained is adequate to sustain their operating
needs for even a short period of time.

With this lack of information, all parties, including the
Debtors themselves, are operating in the dark with respect to
the true state of the Debtors' financial condition.
Accordingly, unless the Utilities are granted the deposits they
are requesting, they will be subjected to an unreasonable risk
of nonpayment from the Debtors for postpetition services.

Mr. Barnard points out that even the Debtors' counsel is
concerned about the Debtors' ability to pay their bills and
those of other professionals employed by the Debtors and
official committees, as they have obtained a $15,000,000 carve-
out in the DIP Order to ensure payment of those postpetition
bills.  If the Debtors' counsel, who has access to inside
information of the Debtors, believes it is necessary to secure
their postpetition fees and those of other professionals, then
it is clear that the Utilities, which do not possess this
information, should be entitled to security for providing the
Debtors with essential postpetition services.

This is not a situation in which the Debtors and the Utilities
owe reciprocal obligations to one another.  Rather, unlike the
facts that were present in In re Adelphia Business Solutions,
Inc., and In re Global Crossing, Ltd., none of the Utilities owe
debts to any of the Debtors.  Thus, the relationship between the
Debtors and the Utilities is strictly one way, with the Debtors
owing obligations to several of the Utilities not only for
utility service, but also for other dealings, including rentals
under pole attachment agreements wherein the Debtors lease space
on poles and other structures owned by the Utilities.

Rather than provide expedited procedures for termination on a
postpetition default, the Utility Order provides that the
Utilities must seek Court approval even after complying with the
normal, lengthy state-mandated default procedures.  Furthermore,
the Utility Order does not even attempt to impose any additional
safeguards, despite the fact that virtually no reliable
information currently exists regarding the Debtors' financial
condition.  As a result of this lack of information, Mr. Barnard
insists that the other "safeguards" employed in the ABIZ case
would not be sufficient to provide the Utilities with adequate
assurance of payment in this case.  Additional financial
reporting requirements would not be of any use because the
Debtors are not currently in a position to provide any accurate
financial reports and, according to their accountants, will not
be in that position for at least several months.  The
opportunity to revisit the issue of adequate assurance in the
event of an adverse material change in the Debtors' liquidity
also would be meaningless because it is unclear when the Debtors
will have access to reliable financial statements and other data
to provide any valid measures or comparisons of the Debtors'
liquidity. Thus, the Utilities cannot be provided adequate
assurance of payment absent payment of deposits or advance
payments.

Under the Utilities' billing cycles the Debtors could receive 2
to 2-1/2 months of unpaid service before their service could be
terminated for a post-petition payment default.  Therefore,
based on the Debtors' anticipated utility consumption in this
case, the minimum period of time the Debtors could receive
service from the Utilities before termination of service for
non-payment of bills ranges from 2 to 2-1/2 months.
Accordingly, the Utilities contend that the two-month security
deposits requested are reasonable.

                          Debtors Object

Following entry of the Utility Order, the Debtors believe they
have reached resolution with nearly all of their utility service
providers regarding the terms of postpetition service.

Paul V. Shalhoub, Esq., at Willkie Farr & Gallagher, in New
York, notes that despite numerous hours of discussions and
correspondence with counsel, the objecting utilities have
refused to agree to any of the proposals made by the Debtors and
instead have insisted on going forward with a hearing before
this Court to reargue the Utility Order, and revisit this
Court's approach to adequate assurance issues generally.
Notwithstanding the existence of the Debtors' as yet unutilized
DIP financing facility, the objecting utilities would require
the Debtors to provide significant postpetition deposits.
"Equally egregious is the objecting utilities' request to impose
hair trigger post-default termination provisions, which would
give them the ability to shut off service to the Debtors upon
the occurrence of any minor payment default," Mr. Shalhoub says.

Rather than ensuring that the Debtors continue to receive
postpetition service and that they receive timely postpetition
payments, Mr. Shalhoub observes that the objecting utilities
seem to be more interested in frustrating the Debtors' efforts
to conduct business as usual.  In addition to demanding
excessive deposits, some of the objecting utilities have refused
to accept payments by check or money order.  The objecting
utilities have removed the Debtors from summary billing
programs, which consolidates thousands of accounts with each
utility company to a single statement.  This action has
generated thousands of monthly invoices per utility company and
has made it even more difficult for the Debtors to comply with
their obligation to pay for postpetition service in a timely
fashion.

Mr. Shalhoub asserts that the Utilities' request should be
denied in their entirety.  The objecting utilities should be
directed to comply with this Court's Utility Order and be
prohibited from imposing billing procedures on the Debtors that
effectively penalize them on account of their status as Chapter
11 debtors. (Adelphia Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

Adelphia Communications' 10.875% bonds due 2010 (ADEL10USR1),
DebtTraders says, are trading at 33.5 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ADEL10USR1
for real-time bond pricing.


AES CORPORATION: Exchange Offer for Senior Notes Expires Today
--------------------------------------------------------------
The AES Corporation (NYSE: AES) has extended from 5:00 p.m., New
York City time, on October 25, 2002, until 5:00 p.m., New York
City time, on October 30, 2002, the deadline by which holders of
its outstanding $300,000,000 8.75% Senior Notes due 2002 and
$200,000,000 7.375% Remarketable and Redeemable Securities due
2013, which are puttable in 2003, must tender in order to be
eligible to receive the early tender bonus payment.  Holders
that tender on or prior to 5:00 p.m., New York City time, on
October 30, 2002, and do not withdraw such securities will, if
the exchange offer is consummated, be entitled to an early
tender bonus payment in the amount of $15 for each $1,000
principal amount of 2002 Notes tendered and $5 for each $1,000
principal amount of ROARs tendered. Consummation of the exchange
offer is subject to a number of significant conditions.

The offering of the new senior secured notes in the exchange
offer is being made only to "qualified institutional buyers" and
"persons other than a U.S. person" located outside the United
States, as such terms are defined in accordance with Rule 144A
and Regulation S of the Securities Act of 1933, as amended.

The new senior secured notes will not be registered under the
Securities Act of 1933, or any state securities laws. Therefore,
the new senior secured notes may not be offered or sold in the
United States absent an exemption from the registration
requirements of the Securities Act of 1933 and any applicable
state securities laws. This announcement is neither an offer to
sell nor a solicitation of an offer to buy the new notes.

                          *    *    *

As reported in Troubled Company Reporter's Monday Edition,
Standard & Poor's lowered its corporate credit rating on AES to
'B+' from 'BB-', reflecting lower-than-expected operating cash
flow and slower-than-expected progress on asset sales, resulting
in AES needing to refinance rather than pay off maturing
obligations. Apparently, banks are uncomfortable with the idea
of some creditors being paid while they wait. The 'B+' rating is
in line with Standard & Poor's expected cash flow compared with
AES' debt burden. AES' corporate credit rating is on CreditWatch
with negative implications because the rating could fall
precipitously if AES were unable to execute this transaction.

Standard & Poor's preliminary 'BB' rating on the bank loan and
exchange notes is two notches above the corporate credit rating.
This reflects Standard & Poor's high degree of confidence that
the collateral package provides enough value for lenders to
realize 100% recovery in a likely default or stress scenario.
This rating assumes that a bankruptcy court would give priority
to the secured creditors in a bankruptcy. The preliminary rating
would become final when the transaction closes and Standard &
Poor's receives final documentation.

AES Corporation's 10.25% bonds due 2006 (AES06USR1) are trading
at 34 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AES06USR1for
real-time bond pricing.


AIR CANADA: September 30 Balance Sheet Upside Down by $1.5 Bill.
----------------------------------------------------------------
For the quarter ended September 30, 2002, Air Canada reported
net income of $125 million a $1.03 billion improvement from the
restated third quarter of 2001. Operating income was $168
million, up $226 million from 2001. Income before foreign
exchange on long-term monetary items and before income taxes was
$205 million, an increase of $374 million from the prior year.

Year over year comparisons of both financial and operational
performance are affected by the adverse impact of the September
11, 2001 terrorist attacks. As well, the Corporation recorded a
number of non-recurring or other significant items in the third
quarter of 2001 and 2002. Please refer to the Adjusted Third
Quarter Results section below and to Attachments One and Two
for further information on the non-recurring or significant
items.

"Air Canada's third quarter results are particularly encouraging
in the context of the crisis facing the North American airline
industry today. Our performance clearly demonstrates that our
focus on disciplined capacity management and cost control in
tandem with our market segmentation strategy is producing
positive results. Air Canada achieved the highest profit among
all carriers in the Americas this quarter," said Robert Milton,
President and Chief Executive Officer.

"Our operating income performance year over year has improved
even when we factor out the impact of September 11th on Air
Canada. For the third consecutive quarter our unit costs, asset
and employee productivity are improved on a year over year
basis. In what is generally recognized as the worst revenue
environment in the industry's history, we generated positive
cash flow and achieved significantly improved operating results
- in part due to our highly effective yield and capacity
management strategy.

"Mainline domestic passenger revenues showed marked improvement
as evidenced by a seven per cent revenue increase and a five per
cent increase in domestic yield per RPM year over year,
including Tango. Our international markets also performed
robustly in the quarter, posting overall a 17 per cent revenue
improvement. Two of our major international markets - the
Atlantic and the Pacific - posted impressive double digit
revenue improvements on single digit ASM increases.

"Our market segmentation strategy is effectively allowing us to
offer customers in various market sectors the level of service
they are willing to pay for. Tango, our separately branded
service that offers price-conscious consumers a no-frills medium
and long-haul alternative, has continued to perform well during
the quarter, posting an 81.4 per cent average load factor,
while our other mainline operations also posted an improved load
factor for the second consecutive quarter. Tango's flexibility
allows us to adjust to shifts in both seasonal and consumer
demand and therefore we have redeployed some of its domestic
flying for the winter and introduced new Tango transborder
leisure flights to Florida and Las Vegas.

"The successful launch of ZIP, our wholly-owned subsidiary
offering low fares and high value on short-haul flights
initially in Western Canada, will allow us to participate more
actively and profitably in the growing discount market. ZIP
replaces Air Canada mainline flying, allowing us to reduce costs
in a marketplace where consumers are increasingly cost
conscious. After a highly successful launch and encouraging
results to date, we plan to increase ZIP's operations gradually
throughout next year until it reaches a complement of 20
aircraft.

"Looking forward to the remainder of the year and into early
2003, we expect to achieve further improvements as a result of
disciplined capacity management, further cost reductions and
increased productivity. Additional efficiencies will be realized
as we continue to simplify our fleet and pursue initiatives that
enhance customer service while contributing positively to our
bottom line.

"Significant challenges lie ahead however, given the fragile
state of the economy and the uncertainty of world events. Fuel
prices are once again close to historically high levels just as
we move into the seasonally weaker quarters. The revenue
environment in the regional and U.S. transborder markets remains
weak with no indication of improvement in the foreseeable
future. Furthermore, it is becoming increasingly clear that
escalating surcharges and fees imposed on the Canadian airline
consumer by government and government created monopolies over
and above the cost of airfare are significantly affecting demand
in short-haul and other markets. Year to date, Jazz has
experienced an almost 30 per cent fall off in traffic and these
surcharges and fees are a contributing factor in this fall off.
Very simply, many consumers are now choosing to drive rather
than fly.

"On an ongoing basis, we will monitor our liquidity requirements
and, as appropriate, will continue to access various financing
alternatives including sale and leasebacks, asset sales and
other transactions. Furthermore, we will take advantage of
opportunities to reduce debt load and de-leverage the airline,
including the purchase of debt.

"With the diligent efforts of our employees to enhance customer
service and improve operational efficiencies and with the
ongoing support of our customers, we will continue to build on
our accomplishments and remain well positioned to meet the
challenges that lie ahead," he concluded.

                    2002 Initiatives:

Air Canada's third quarter 2002 results reflect a number of
important initiatives:

     - ONGOING CAPACITY MANAGEMENT during the quarter resulted in
       a year over year decrease of 11 per cent in Mainline
       capacity from the US transborder short haul market, and an
       increase of two per cent capacity in growing sun and
       leisure markets.

       Given the anomalies of Q3, 2001 as a point of comparison
       due to irregular operations resulting from the events of
       September 11, a more relevant capacity comparison of Q3,
       2002 against Q3, 2000 shows a 21 per cent decrease in
       Mainline capacity from the US transborder short haul
       market and a three per cent increase in capacity to
       growing leisure and sun markets.

     - AIR CANADA'S SEAT RECONFIGURATION PROGRAM added
       approximately two per cent more capacity in Q3, 2002 at
       little additional cost while maintaining industry leading
       seating pitch standards. This program, begun in 2001, has
       added economy class seating on Airbus A320, A319, Boeing
       767 and 737 aircraft and reduced business class seating on
       Airbus A320, A319 and Boeing 737 aircraft in response to a
       decrease in business travel demand.

     - AIR CANADA'S FLEET MODERNIZATION PROGRAM has, since June
       30, 2001, permanently retired or parked over 45 of the
       airline's oldest Boeing 737 aircraft and the entire F-28
       and DC-9 fleets. At the same time, Air Canada's modern,
       highly efficient Airbus fleet has been expanded, saving on
       fuel, maintenance and training costs. The airline took
       delivery of three Airbus A321s, one A319, one A320 and one
       Boeing 767-300 aircraft in the quarter under short and
       long term operating leases. Five Canadair Jets were
       delivered in the quarter to Air Canada Jazz under
       operating leases.

The above programs together with disciplined capacity planning
and the completion of the airline's employee reduction program
produced the following year over year results for the third
quarter:

     - SIGNIFICANT COST SAVINGS AND A TWO PERCENTAGE POINT SYSTEM
       LOAD FACTOR INCREASE by carrying more passenger traffic
       while operating six per cent fewer aircraft flying hours.

     - A NINE PER CENT INCREASE IN MAINLINE EMPLOYEE
       PRODUCTIVITY, as measured by available seat miles per
       employee, on a mainline capacity increase of two per cent.

Additionally, Air Canada announced in the quarter a number of
Initiatives as part of its strategy to transform the airline and
redefine its business model in order to respond more effectively
to the evolving industry environment, while highlighting the
value of the Corporation's assets:

     - THE LAUNCH OF ZIP, the airline's wholly-owned
independently operated low fare carrier, on September 22. ZIP
offers up to 15 daily non-stop return flights on short-haul
routes in Western Canada with connections to and from Air
Canada's extensive network. ZIP operates with a start-up fleet
of six Boeing 737-200 aircraft, with plans to eventually
expand to 20 aircraft.

     - NEW EXECUTIVE FIRST SERVICE ON INTERNATIONAL ROUTES
featuring refined in-flight service, quality Canadian products
and contemporary design to create a complete, innovative travel
experience that sets new standards for Air Canada's
international customers. The new service is currently offered on
flights to Europe, and will be expanded to include flights to
Asia, Australia and South America. Premium service within Canada
and the United States is undergoing a similar re-design planned
to be launched in 2003.

     - THE ANNOUNCEMENT OF NEW TANGO SERVICE TO FLORIDA - THE
FIRST SCHEDULED NO FRILLS, LOW FARE US TRANSBORDER SERVICE, with
new seasonal daily non-stop service between: Montr‚al (Dorval)-
Fort Lauderdale; Montr‚al (Dorval)-Orlando; both Qu‚bec City and
Ottawa and Fort Lauderdale; and daily service between Toronto
and Las Vegas.

     - THE CONFIRMATION OF A $101.7 MILLION FIVE YEAR CONTRACT
for the maintenance and repair of Canada's Department of
National Defence (DND) fleet of Airbus A310 aircraft, including
five one-year options for contract extension which, if
exercised, would bring the total contract term to ten years with
potential revenue to Air Canada Technical Services of $250
million. Air Canada created Air Canada Technical Services with
the mandate to grow its aircraft maintenance repair and overhaul
(MRO) business and improve efficiencies through increased scale.

                       Operating Results

Consolidated passenger revenues were up $128 million or 6 per
cent on a 1 per cent increase to ASM capacity compared to the
2001 quarter. Passenger revenues at the Mainline carrier
increased 8 per cent from the third quarter of 2001.
Consolidated passenger traffic grew 4 per cent and system load
factor at 76.7 per cent improved 2.0 percentage points.
Passenger yield per revenue passenger mile (RPM) increased 2 per
cent. As a result, passenger revenue per available seat mile
(RASM) for the quarter was up 5 per cent (Mainline system RASM
was up 6 per cent) from the third quarter of 2001.

Third quarter consolidated domestic passenger revenues were up
$22 million or 2 per cent with no change to ASM capacity.
Domestic passenger traffic was also unchanged while yield per
RPM improved 3 per cent. Domestic RASM increased 3 per cent from
the third quarter of 2001. Domestic passenger revenues at
Mainline, including Tango, increased $50 million or 7 per cent
on a 3 per cent increase in ASM capacity over the prior year.
Mainline RASM rose 4 per cent due to a 5 per cent increase in
domestic yield per RPM over the 2001 quarter. Domestic revenues
at Air Canada Jazz declined $28 million or 15 per cent due in
part to capacity reductions and continuing traffic weakness in
short haul markets.

US transborder passenger revenues were $25 million or 5 per cent
below the prior year on a 4 per cent reduction to ASM capacity.
US transborder RASM declined 1 per cent (a decline of 2 per cent
for the Mainline carrier) due to continuing business traffic
weakness especially on short-haul routes, greater fare
discounting and a relatively greater proportion of longer haul
flying to Florida and Hawaii which have lower yields and RASM.

Other international passenger revenues grew $131 million or 17
per cent on a 4 per cent increase to ASM capacity. Load factor
on these routes improved 3.2 percentage points and RASM grew by
12 per cent. Atlantic revenues rose 20 per cent with an ASM
capacity increase of 5 per cent. Pacific revenues grew by
14 per cent on a 3 per cent increase to ASM capacity. South
Pacific, Caribbean, Mexico and South America revenues were up 5
per cent due mainly to greater flying on South Pacific and
Mexico routes.

Cargo revenues were $18 million or 13 per cent above 2001
levels. Other revenues increased $13 million or 5 per cent
mainly as a result of greater third party maintenance revenues
from Technical Services.

For the quarter, total operating revenues increased $159 million
or 6 per cent from the prior year.

                        Operating Expenses

Operating expenses declined $67 million or 3 per cent from the
third quarter of 2001 on a 1 per cent increase to ASM capacity.
This was due mainly to favorable fuel expense as well as cost
reductions in most areas including commission expense,
depreciation, aircraft maintenance materials and food, beverages
and supplies. These reductions were partially offset by
increased aircraft rent expense, higher airport and navigation
fees and other expenses including insurance costs.

Salary and wage expense was unchanged from last year. Full-time
equivalent employees were reduced by approximately 2,600
personnel or 6 per cent compared to the third quarter of 2001.
Cost savings from the staff reductions were offset by higher
average salaries due to contractual union wage uplifts and the
effect of having relatively fewer more junior employees
at lower pay scales. Fuel expense declined $63 million or 15 per
cent mainly due to lower fuel prices and favorable fuel hedging
results. The remainder was due to lower flying hours and fuel
volumes, including the use of more efficient aircraft.
Commission expense decreased $31 million or 25 per cent
largely as a result of the elimination of North American base
commission. Aircraft rent expense rose $29 million or 12 per
cent. Of this amount, $15 million was due principally to new
deliveries of leased aircraft, net of retirements and aircraft
provisions taken in 2001, and $14 million was due to
sale/leaseback transactions completed on existing fleet during
the prior year to increase liquidity. Depreciation expense was
down $18 million due largely to 2001 sale and leaseback
transactions and the retirement of owned aircraft. The Other
expense category increased $22 million or 4 per cent mainly as a
result of significantly higher insurance costs.

In the 2002 quarter, Air Canada achieved a significant
improvement in asset and employee productivity. Mainline ASM
capacity increased 2 per cent with a 4 per cent reduction in
flying hours. This was due to a higher proportion of flying by
larger aircraft as well as increased seating on many aircraft
types. With Mainline-related employees down 6 per cent, employee
productivity, as measured by ASMs per FTE employee, improved 9
per cent. Fuel productivity, as measured by ASMs per liter of
fuel consumed, improved 4 per cent due to the increased use of
newer and more fuel efficient aircraft and increased seating on
many aircraft types. Unit cost, as measured by operating expense
per ASM, was down 4 per cent (2 per cent, excluding fuel) from
the prior year for the Mainline-related operations. Operating
expense, net of cargo and other non-ASM revenues per ASM,
declined 6 per cent (4 per cent, excluding fuel).

                       Non-Operating Expense

Non-operating income, excluding foreign exchange on long-term
monetary assets and liabilities, amounted to $37 million in the
quarter. The Corporation recorded, in other non-operating
income, gains of $100 million from the purchase of Air Canada
debt including $92 million from the purchase of Japanese Yen
perpetual debt. Net interest expense at $58 million decreased
$14 million mainly as a result of lower interest rates and the
favorable effect of a swap agreement. One-time non-operating
losses from asset sales and leaseback amounted to $12 million in
2002 as compared to net losses from aircraft writedowns and
asset sales of $121 million in the 2001 quarter. In the 2001
quarter, the Corporation recorded, in other non-operating
income, expected proceeds of $105 million relating to its
Government of Canada assistance claim covering losses due to the
closure of Canada's airspace following the September 11, 2001
terrorist attacks. In the first quarter of 2002, $37 million of
this claim was reversed as the Government disallowed a portion
of the original claim.

         Foreign Exchange on Long-Term Monetary Items

In January 2002, Air Canada adopted accounting standard
amendments related to foreign exchange as prescribed by the
Canadian Institute of Chartered Accountants standard No. 1650 -
Foreign Currency Translation. As expected, the new accounting
standard has increased the volatility of earnings in periods of
significant fluctuation in foreign currency exchange rates
relative to the Canadian dollar. Under the New standard, Air
Canada recorded, in current income for the 2002 quarter, $86
million of foreign exchange losses on long-term monetary assets
and liabilities (January to September, 2002 - $46 million loss).
These foreign exchange losses resulted mainly from the effect of
foreign exchange rate changes on long-term debt denominated in
foreign currencies, net of hedging. A loss of $253 million was
recorded in the 2001 quarter following the CICA 1650
restatement. This and other foreign exchange related adjustments
increased 2001 pre-tax losses by $262 million ($262 million
after tax). Previously under GAAP, foreign exchange gains or
losses on long-term monetary assets and liabilities were
deferred and amortized to income over the life of the
corresponding asset or liability.

                  Adjusted Third Quarter Results

In the third quarter of 2001 and 2002, the Corporation recorded
a number of non-recurring or other significant items including a
major income tax valuation allowance, gains/losses on asset
sales and purchase of debt and an estimated government
assistance claim. Removing 2002 and 2001 non-recurring or other
significant items described in Attachment One, the adjusted (a)
income before foreign exchange on long term monetary items and
income taxes would have been $117 million, a $278 million
improvement from the $161 million adjusted loss in the 2001
quarter.

     (a) Air Canada's adjusted earnings/losses or non-GAAP
         earnings/losses are earnings/losses which have been
         adjusted for the non-recurring or other significant
         items described in Attachments One and Two. In order to
         allow the reader to view financial results on a
         normalized basis, non-recurring or other significant
         items which are not reflective of the underlying
         financial performance of the Corporation from ongoing
         operations have been removed from reported
         earnings/losses. For the third quarter of 2002, these
         items are gains/losses on the sale of assets and the
         purchase of debt. For January to September 2002, these
         items are gains/losses on the sale of assets and the
         purchase of debt and a charge relating to the government
         assistance claim recorded in 2001. For the third quarter
         of 2001, these items are aircraft retirement provisions
         and expected government assistance relating to the
         September 11, 2001 terrorist attacks, gains/losses on
         the sale of assets and the purchase of debt and a major
         tax valuation allowance. For January to September 2001,
         these items are aircraft retirement provisions and
         expected government assistance relating to the September
         11, 2001 terrorist attacks, gains/losses on the sale of
         assets and the purchase of debt and a major tax
         valuation allowance. Adjusted earnings/losses are not
         a recognized measure for financial statement
         presentation under Canadian generally accepted
         accounting principles (GAAP). Non-GAAP earnings measures
         (such as adjusted earnings/losses) do not have any
         standardized meaning and are therefore not likely to be
         comparable to similar measures presented by other
         issuers. Readers should consider the adjusted
         earnings/losses measures in the context of Air Canada's
         GAAP results. Attachment One provides a reconciliation
         between GAAP results and the adjusted earnings/losses
         for third quarter results and Attachment Two provides a
         reconciliation for January to September results.

                            Cash Flow

Cash flows from operations amounted to $89 million, a $107
million improvement from the 2001 quarter. Improved operating
results were the main reason for the cash flow improvement.
Changes in advance ticket sales resulted in a $120 million
greater cash usage compared to the third quarter of 2001.
Changes in accounts payable and accrued liabilities used $140
million less cash than in 2001. With the integration of Canadian
Airlines completed, special payments related to integration,
separation programs and restructuring totaled $6 million in the
2002 quarter as compared to over $100 million recorded in the
2001 quarter. Use of cash for aircraft lease payments in excess
of rent expense declined $49 million due to the timing of cash
lease payments versus accounting rent expense. The Other cash
category recorded a decline of $89 million mainly relating to
the non-cash gain on debt purchases.

On a year-to-date basis, cash flows from operations increased
$794 million as a result of improved operating results, reduced
integration-related payments and lower use of cash for aircraft
lease payments in excess of rent expense.

In the third quarter of 2002, repayments of long-term debt
mounted to $364 million. Proceeds from the sale and leaseback of
assets were $143 million from the sale and leaseback of two CRJ
aircraft and spare engines. Additions to property and equipment
totaled $32 million, mostly for aircraft-related expenditures,
net of $20 million of recovered progress payments. Air Canada
took delivery of three Airbus A321s, one A319, one A320 and one
Boeing 767-300 aircraft in the quarter, under both short and
long-term operating leases. One of the newly delivered Airbus
A321 aircraft will commence scheduled operations in the fourth
quarter. As well, five Canadair Jets were delivered to Air
Canada Jazz, under operating leases. One leased Boeing 737-200
aircraft was returned to the lessor in the quarter.

The Corporation closely monitors its liquidity requirements and
is assessing various financing transactions and initiatives with
the objective of ensuring its future liquidity needs are
addressed. These activities could include additional sale and
leaseback transactions, asset sales or other financing
transactions. As at September 30, 2002, the Corporation's cash
and cash equivalents amounted to $717 million and committed
financing amounted to $180 million.

                             Tax

Effective July 2001, Air Canada ceased to record income tax
recoveries on losses from operations at the Mainline carrier.
Consequently, third quarter 2001 and 2002 results for the
Mainline carrier are recorded on the same basis. However,
because tax recoveries at the Mainline carrier were recorded in
the first six months of 2001, year-to-date after tax results
from operations are not reflected on the same basis as in the
first half of 2001. Please refer to Note 1 to the Consolidated
Financial Statements for more information.

                     Year-to-Date Results

For the nine months ended September 30, 2002, the Corporation
recorded an operating income of $70 million, a $493 million
improvement from 2001. Loss before foreign exchange on long-term
monetary items and income taxes was $25 million, a $566 million
improvement from the prior year. Net loss for 2002 was $64
million or $0.54 per share with an income tax recovery of $7
million as compared to a restated loss of $1,038 million or
$8.64 per share with an income tax provision of $340 million in
2001.

Removing non-recurring or other significant items as described
in Attachment Two, the first nine months of 2002 would have
produced a non-GAAP loss before foreign exchange on long-term
monetary items and income taxes of $83 million, an improvement
of $591 million from the similarly adjusted loss of $674 million
in 2001.

As of September 30, 2002, Air Canada's balance sheet shows a
total shareholders' equity deficit of about $1.5 billion while
total working capital deficit tops $778 million.


AKORN INC: Sets Annual Shareholders' Meeting for Dec. 19, 2002
--------------------------------------------------------------
The Annual Meeting of shareholders of Akorn, Inc., will be held
at 10:00 a.m., local time, on December 19, 2002 in the Read Room
of The Northern Trust Bank, 265 East Deerpath, Lake Forest,
Illinois 60045 for the following purposes:

        1.  To elect four directors to the Board of Directors.

        2.  To consider and vote upon the adoption of the Akorn,
            Inc., 2002 Stock Option Plan for Directors.

        3.  To consider and vote upon approval of certain of the
            conversion features of the subordinated debt issued
            by the Company to a trust controlled by the Company's
            Chairman and Chief Executive Officer.

        4.  To transact such other business as may properly come
            before the Meeting and any adjournments thereof.

The Board of Directors has fixed the close of business on
November 8, 2002 as the record date for the determination of
shareholders entitled to notice of and to vote at the Annual
Meeting and all adjournments thereof.

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

As reported in Troubled Company Reporter on September 26, 2002,
Akorn, Inc., entered into an Agreement with its senior lender,
The Northern Trust Company, under which the Bank had agreed to
forebear from taking action with respect to Akorn's current
default in the payment of principal and interest under its
existing Credit Agreement with the Bank and, subject to the
terms of the Agreement, would continue to forebear from
exercising its remedies under the Credit Agreement until January
3, 2003. The Bank had notified the Company on September 16, 2002
of the payment default, and of its decision to pursue its legal
remedies if an agreement on forbearance could not be reached
prior to September 23, 2002.


ALLMERICA FIN'L: S&P Lowers Counterparty Credit Rating to BB-
-------------------------------------------------------------
Standard & Poor's Ratings Services removed from CreditWatch its
counterparty credit rating on Allmerica Financial Corp., and
lowered it to double-'B'-minus from double-'B' following
discussions with AFC's management regarding capitalization and
liquidity at the consolidated insurance company and holding
company levels.

Standard & Poor's also said that it removed from CreditWatch and
lowered its various ratings on AFC's operating companies.

The outlook on all these companies is negative.

"At the consolidated life insurance company operations,
statutory capitalization is expected to have declined in the
third quarter of 2002 because of the negative impact of equity
market volatility on statutory earnings," explained Standard &
Poor's credit analyst Kevin G. Maher.

"Statutory earnings are depressed because of increased reserve
strengthening for guaranteed minimum death benefit reserves and
lower fee income from reduced assets under management." AFC
indicated in its second-quarter 10Q filing that for each 1%
decline in the S&P 500 index, the expected increase in required
statutory GMDB reserves is about $6 million-$8 million, which
would imply a range of about $102 million-$136 million following
the drop of about 17% in the S&P 500 in the third quarter of
2002. These declines in capital position follow drops in 2001
and in the second quarter of 2002.

Subsequent to a capital contribution from First Allmerica
Financial Life Insurance Co., to Allmerica Financial Life
Insurance & Annuity Co., the primary ariable annuity writer,
risk-adjusted capitalization is well below the triple-'B'-minus
range. Standard & Poor's remains concerned that further weakness
in the equity markets could significantly strain the life
companies' already weakened statutory capitalization. Standard &
Poor's believes AFC's management is committed to maintaining
capitalization at sufficient levels to satisfy Delaware and
Massachusetts insurance regulators.

To facilitate capital management, AFC has initiated expense
reductions by ceasing new underwriting of proprietary life and
annuity products and reducing its workforce, which supported the
variable business. In addition, variable annuity surrender
activity has increased recently, resulting in statutory capital
relief through increased revenues from surrender charges and
release of GMDB reserves. AFC has also been repurchasing
outstanding guaranteed investment contracts backed by funding
agreements, resulting in addition statutory capital.

The rating action at the holding company reflects the potential
capital strain related to life insurance operations and the
balance sheet effect on the increased acceleration of the
amortization of deferred acquisition costs at the life insurance
operations. Because of increased surrenders at the life
operations and equity market effects, AFC is expected to
recognize sizeable non-cash DAC write-off as of the third
quarter of 2002. As for ongoing cash obligations, the
property/casualty companies have historically contributed about
10% of statutory surplus for use at the holding company to
service debt (the 2002 pretax interest expense is about $40.6
million). Standard & Poor's has reviewed cash flow assumptions
and projections with AFC management and believes that the
holding company will be able to support demands for cash
obligations through the remainder of 2002.

Although on a stand-alone basis the property/casualty operations
appear to benefit from improved market conditions, good
operating performance, and increased rates, the challenge facing
AFC is an overall concern. It is Standard & Poor's expectation,
however, that there will be no further contributions from the
property/casualty companies in the form of an extraordinary
dividend in the remainder of 2002.

The outlook continues to reflect the uncertainty surrounding the
effects of equity market volatility on the group's
capitalization.


ALLMERICA FINANCIAL: Third Quarter Net Loss Tops $315 Million
-------------------------------------------------------------
Allmerica Financial Corporation (NYSE: AFC) reported a net
operating loss for the third quarter of $315.0 million, compared
to net operating income of $34.4 million in 2001. For the nine
months ended September 30, 2002, the Company reported a net
operating loss of $297.3 million, as compared to net operating
income of $130.5 million for the same period in 2001.

The Company also reported that it has reached an agreement with
the Massachusetts Division of Insurance whereby it will
indefinitely maintain the Risk Based Capital ratio of its lead
life insurance company, First Allmerica Financial Life Insurance
Company, at a minimum of 100 percent, so long as FAFLIC does not
write new business. This agreement replaces an earlier
commitment that FAFLIC maintain a 225 percent RBC ratio which
would have expired in 2005.

The Company reported a net loss of $313.4 million in the third
quarter of 2002, compared to net income of $31.2 million in
2001. The third quarter 2002 net loss included net realized
after tax investment losses of $0.7 million and a contingency
payment received from the sale of the defined contribution
business, net of tax, of $2.3 million. For the comparable period
in 2001, net income included net realized investment losses of
$2.8 million related primarily to impairments on certain fixed
income securities and a loss of $0.4 million on derivatives. For
the nine months ended September 30, 2002, the Company reported a
net loss of $321.0 million as compared to net income of $67.6
million for the same period in 2001.

Strong results in the Company's property and casualty operations
were more than offset by significant charges related to the
Company's decision to cease the manufacture and sale of
proprietary variable annuity and variable life insurance
products, as well as the impact of the continued decline in the
equity market through September 30, 2002. These charges include
$487.5 million related to a write-off of deferred policy
acquisition costs, $106.7 million related to guaranteed minimum
death benefit reserves partially offset by a related decrease in
deferred acquisition cost amortization of $67.6 million, and
$29.8 million related to the write-off of certain capitalized
hardware and software development costs in the Allmerica
Financial Services business unit.

Net operating loss and income excludes certain items which
management believes are not indicative of overall operating
trends, including net realized investment gains and losses and
certain other items, net of taxes. The net operating loss in the
third quarter of 2002 includes the aforementioned adjustments to
deferred policy acquisition costs, guaranteed minimum death
benefit reserves, and capitalized technology costs.

"The combined effects of the equity market's decline in the
third quarter, the decision by the major rating agencies to
reduce the insurance financial strength ratings of our life
insurance companies, and the accounting for our related decision
to cease sales of proprietary life insurance and annuity
products, led to a significant reported GAAP loss in Allmerica
Financial Services," said Edward J. Parry, III, President of the
Company's Asset Accumulation business. "The actions we are
taking, however, are having a positive effect on our statutory
capital position and related risk based capital ratios and, of
course, these writedowns have no impact on the ability of our
life insurance units to meet obligations to our policyholders,"
said Parry. "Moreover, we are very pleased with the new
agreement we have reached with the Massachusetts Division of
Insurance regarding the reduction in required maintenance of
statutory capital levels in our lead life insurance company."
Robert P. Restrepo, President of Allmerica's property and
casualty operations added, "Risk Management, our property and
casualty business, produced strong earnings for the third
consecutive comparative quarter. These results reflect lower
losses, primarily in our commercial lines, higher earned
premiums, and lower catastrophe losses during the quarter."

                          Segment Results

Allmerica Financial operates in two primary businesses: Risk
Management and Asset Accumulation. Risk Management markets
property and casualty insurance products on a regional basis
through The Hanover Insurance Company and Citizens Insurance
Company of America and Asset Accumulation markets insurance and
retirement savings products and services to individual and
institutional clients through Allmerica Financial Services, and
investment management services to institutions, pension funds,
and other organizations through Allmerica Asset Management, Inc.

                          Risk Management

Risk Management pre-tax operating earnings were $58.5 million,
compared to $6.8 million for the third quarter of 2001. Earnings
increased in the quarter due to continued improvement in loss
ratios. This improvement resulted from the agency management
strategies, re-underwriting actions and rate increases that have
been put into place over the past two years, as well as lower
pre- tax catastrophe losses and favorable development on prior
accident year loss reserves.

Property and Casualty highlights:

      -- Net premiums written were $596.8 million in the third
         quarter compared to $586.7 million in the third quarter
         of 2001.

      -- Net premiums earned for the third quarter were $568.3
         million compared to $552.5 million in 2001.

      -- The statutory loss ratio was 62.7 percent in the third
         quarter of 2002 compared to 73.6 percent in the same
         period in 2001.

      -- In the third quarter of 2002, pre-tax catastrophe losses
         were $4.0 million versus $15.6 million in the third
         quarter of 2001.

      -- The statutory expense ratio was 28.8 percent in the
         third quarter compared to 26.4 percent for the third
         quarter of last year.

                     Asset Accumulation

The reported third quarter pre-tax operating loss for the Asset
Accumulation business was $534.5 million versus pre-tax
operating income of $40.5 million in 2001. Allmerica Financial
Services reported a pre-tax operating loss of $540.2 million in
the third quarter of 2002 compared to pre- tax operating income
of $34.4 million in the third quarter of 2001 due to the
aforementioned adjustments. Effective at the end of the third
quarter of 2002, new sales of life and annuity products issued
by Allmerica Financial Services were essentially terminated.
Allmerica Asset Management's pre-tax operating income was $5.7
million in the quarter compared to $6.1 million in the same
period of the prior year.

                          Corporate

Corporate segment net expenses were $17.5 million in the third
quarter of 2002, compared to $15.7 million in the comparable
period in 2001.

                      Investment Results

Net investment income was $152.8 million for the third quarter
of 2002, compared to $169.6 million in the same period in 2001.
$12.7 million of this decrease was principally related to lower
average spread-based assets in the guaranteed investment
contract business. In addition, net investment income decreased
due to lower portfolio yields driven by an increased emphasis on
higher credit quality bonds, and lower prevailing interest
rates.

Third quarter pre-tax net realized investment losses were $7.8
million, compared to $4.9 million of pre-tax net realized
investment losses in the third quarter of 2001. In the current
period, pre-tax net realized investment losses of $48.8 million
related primarily to impairments on certain fixed income
securities. These losses were largely offset by gains of $40.2
million from sales of other fixed income securities. Net
realized investment losses in the third quarter of 2001 related
primarily to impairments on certain fixed income securities and
losses from derivative instruments, largely offset by gains from
sales of other fixed income securities.

                           Income Taxes

The $181.7 million tax benefit during the quarter was primarily
the result of the significant loss recognized by Allmerica
Financial Services.

                           Balance Sheet

Shareholders' equity was $2.1 billion at September 30, 2002,
compared to $2.4 billion at December 31, 2001. Excluding
accumulated other comprehensive income, book value was $39.47
per share at the close of the third quarter, compared to $45.44
per share at December 31, 2001.

Total assets were $27.5 billion at September 30, 2002, compared
to $30.3 billion at year-end 2001. Separate account assets were
$12.2 billion at September 30, 2002, versus $14.8 billion at
December 31, 2001. The decline in "total" and "separate account"
assets was principally the result of the decline in the equity
markets through September 30, 2002.

           Statutory Capital of Life Insurance Subsidiaries

The Company estimates that each of its life insurance
subsidiaries, First Allmerica Financial Life Insurance Company
and Allmerica Financial Life Insurance and Annuity Company, have
Risk Based Capital ratios that are in excess of the National
Association of Insurance Commissioner's 100 percent Company
Action Level. The Company Action Level is the first level at
which regulatory involvement is specified based upon the level
of capital. Regulated insurance companies with RBC ratios which
fall below the Company Action Level are required to prepare and
submit an RBC Plan which is acceptable to the insurance
commissioner of the state of domicile. The Company expects that
FAFLIC's RBC ratio at September 30, 2002 will be approximately
145 percent of the Company Action Level, and that AFLIAC's will
be approximately 130 percent of the Company Action Level.
AFLIAC's estimated ratio includes a capital contribution of $171
million that FAFLIC made in October, and is accrued in its
September 30, 2002 statutory filing.

The Company also reported that it has reached an agreement with
the Massachusetts Division of Insurance whereby it will
indefinitely maintain the RBC ratio of its lead life insurance
company, First Allmerica Financial Life Insurance Company, at a
minimum of 100 percent, so long as FAFLIC does not write new
business. This agreement replaces an earlier commitment that
FAFLIC maintain a 225 percent RBC ratio which was due to expire
in 2005.

                        Rating Actions

Recently, the Company's ratings were downgraded by A.M. Best,
Moody's, Standard & Poor's and Fitch. The financial strength
ratings of its life insurance companies as well as its holding
company debt ratings are now below investment grade. In
addition, A.M. Best, Moody's and Standard & Poor's reduced the
ratings of the Company's property & casualty companies to "B++",
"Baa3" and "BBB+", respectively.

The ratings actions and the decision to cease selling
proprietary life and annuity products will cause surrender rates
in the Company's life insurance and annuity business to
increase; however, the Company believes that its life insurance
subsidiaries have sufficient assets, liquidity and cash flow to
satisfy policyholder obligations. The decrease in the property &
casualty ratings, in particular the A.M. Best rating, could
negatively impact earnings and growth in this business.

                         Other Items

The Company has decided to suspend payment of its annual common
stock dividend.

Allmerica Financial Corporation's Third Quarter Statistical
Supplement is also available at http://www.allmerica.com


AMERICAN ENTERPRISE: Plan Confirmation Hearing Set for Nov. 20
--------------------------------------------------------------
American Enterprise.Com, Corporation (OTCBB:AMER) announced that
its previously signed Letter of Intent to acquire 100% of the
outstanding stock of HealthCentrics, Inc., after AMER emerges
from Chapter 11 reorganization, is proceeding as planned. All
terms and conditions are the same, including HealthCentrics'
shareholders receiving one share of AMER for each share of
HealthCentrics.

AMER's plan to complete its reorganization this month has been
conditionally approved by the court. The court has set the date
of November 20, 2002 for final approval, subject to hearing and
ruling on any third party objections that may be filed. The Plan
of Reorganization contemplates that AMER will emerge from
reorganization with no significant debt. Further, the existing
publicly traded stock will not be compromised. Accordingly,
there will be no reverse split or cancellation of the existing
AMER stock. The acquisition of HealthCentrics by AMER is subject
to the parties concluding a definitive agreement and approval by
the Bankruptcy Court.

HealthCentrics is a healthcare Application Service Provider that
markets HealthCentrics 3.0, a web-native and browser-based
practice management application to third-party billing
companies, practice management organizations, payers, hospitals,
and physician organizations. For additional information please
visit the Web site at http://www.HealthCentrics.com


AMES DEPARTMENT: Gets Okay to Continue Compensation Procedures
--------------------------------------------------------------
Martin J. Bienenstock, Esq., at Weil, Gotshal & Manges LLP, in
New York, tells Judge Gerber that Delaware Ribbon, Wings
Manufacturing and I. Shalom's objections simply overlooked the
basis on which the professionals were induced to render services
from the outset of Ames Department Stores, Inc.'s Chapter 11
cases.  In contrast to the postpetition trade creditors who hold
unsecured administrative claims, Mr. Bienenstock explains that
professionals have a "superpriority" status by virtue of the
$5,000,000 Carve-out.

Unlike postpetition trade creditors, Mr. Bienenstock explains
that these professionals have had their fees paid at 80% to 90%
of amounts billed to the Debtors.  Postpetition trade creditors,
on the other hand, have, until recently, been paid 100% on their
invoices billed to the Debtors.  In fact, as a class of
creditors, the postpetition trade creditors are paid more than
95% of their invoices billed since the Petition Date.

                            *     *     *

After considering the merits of the case, Judge Gerber
authorizes the Debtors to implement the Compensation Procedures
and pay the professionals employed in these Chapter 11 cases.
The Debtors are authorized and directed to compensate the
professionals, other than the ordinary course professionals, for
the services rendered and the reimbursement of actual and
necessary expenses incurred on a monthly basis.  The Debtors are
to pay:

    50% of the Fees and 100% of the Expenses for July 2002;

    60% of the Fees and 100% of the Expenses for August 2002; and

    74% of the Fees and 100% of the Expenses accrued for
        September 2002 and each month thereafter, until further
        order of this Court. (AMES Bankruptcy News, Issue No. 27;
        Bankruptcy Creditors' Service, Inc., 609/392-0900)


ANC RENTAL: Consolidating Operations at George Bush Airport
-----------------------------------------------------------
To save over $4,720,000 per year in fixed facility costs and
other operational cost savings, ANC Rental Corporation and its
debtor-affiliates seek the Court's authority to:

-- reject the Alamo Concession Agreement, the Future Alamo
    Concession Agreement, the Alamo Facilities Lease, the Alamo
    Members Agreement, the Alamo MOU and the Alamo Operating
    Agreement, and

-- assume and assign to ANC Rental Corp. the National Concession
    Agreement, the Future National Concession Agreement, the
    National Lease, the National Facilities Agreement, the
    National Members Agreement, the National MOU and the National
    Operating Agreement.

The Debtors and the City of Houston are parties to these
agreements that relate to the operation of the Alamo and
National brand names at George Bush Intercontinental Airport in
Houston, Texas.

Bonnie Glantz Fatell, Esq., at Blank Rome Comisky & McCauley
LLP, in Wilmington, Delaware, tells Judge Walrath that all
rental car companies operating at the Houston Intercontinental
Airport must be party to the Members Agreement, the Operating
Agreement and the Memorandum of Understanding to use the
consolidated rental car facility at the airport and to
participate in the bus service.

Ms. Fatell informs the Court that a consolidated rental car
facility is currently being constructed at the Airport, which is
anticipated to be ready for occupancy in March 2003.  The
Members Agreement, dated April 12, 2000, was entered into by
National and Alamo with eight other rental car companies at the
Houston Intercontinental Airport.  Under the Members Agreement,
the car rental companies, through IAH RACS LLC, oversee the
financing, design and construction of the consolidated facility,
purchase certain buses and operate a portion of the consolidated
facility at the Houston Intercontinental Airport.  The MOU,
meanwhile, is for the initial allocation of spaces within the
consolidated car rental facility.  The Operating Agreement sets
forth the obligations of each car rental company to IAH RACS
LLC.

Pursuant to the Facilities Agreement, Ms. Fatell explains that
each rental car company was allocated proceeds from bonds issued
by the City to fund the costs of designing, constructing and
equipping their maintenance-storage facilities and exclusive
space within the consolidated facility based on the total
estimated costs.  Alamo was allocated $2,400,000 to be used for
its space at the consolidated facility and has spent $161,470 to
date in connection with design-related costs.  The remaining
$2,200,000 allocation to Alamo will automatically be eliminated
once the Alamo Agreements are rejected.

Ms. Fatell tells the Court that IAH RACS LLC was notified of the
Debtors' intention to reject the Alamo agreements two months
ago. The Debtors and the other car rental companies have met to
discuss the reallocation of the space and funds previously
allocated to Alamo.  The discussions are currently ongoing. (ANC
Rental Bankruptcy News, Issue No. 21; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


ANGEION CORP: Minnesota Court Confirms Joint Reorganization Plan
----------------------------------------------------------------
Angeion Corporation (Nasdaq: ANGQC) announced that the United
States Bankruptcy Court for the District of Minnesota, Third
Division, has confirmed the Company's Joint Modified Plan of
Reorganization, dated September 4, 2002, to take effect October
25, 2002.

Under the terms of the Plan, the holders of the Company's 7-1/2%
Senior Convertible Notes, due April 2003, agreed to convert the
debt to equity.  The Note holders and other holders of certain
unsecured claims will receive a pro rata share of 95% of
replacement common shares to be issued pursuant to the Plan.  On
October 25, 2002 the conversion took place and all outstanding
notes have been cancelled.  The transaction was implemented as a
voluntary Chapter 11 Bankruptcy for the purpose of enabling the
Company to retain unimpaired utilization of a net operating loss
carryforward of over $125 million.

Holders of the Company's old common stock will receive a pro
rata share of 5% of the replacement common stock.  Each will
receive one share and one warrant to purchase an additional
share of replacement common stock for every 20 shares of the old
common that was owned prior to the effective date. Shareholders
will receive cash in lieu of any fractional shares.  Letters of
transmittal to facilitate the replacement of the old shares are
being mailed commencing October 28, 2002.  Until replacement is
complete, the Company expects the replacement shares will trade
on a "when issued" basis on the Nasdaq Small Cap Market under
the symbol ANGNV.  After, it is expected that the replacement
shares will trade under the Company's traditional symbol ANGN.
Following the replacement of the old shares there will be
3,594,627 shares outstanding.

Angeion's President and Chief Executive Officer, Richard Jahnke,
stated, "We are delighted to have this behind us.  We emerge
with no corporate debt, shareholders' equity of approximately
$20 million and over $4 million of cash and marketable
securities on our balance sheet.

"We are also excited about our prospects going forward," Jahnke
continued. "Our Medical Graphics business is a leading
manufacturer and marketer of non- invasive cardio-respiratory
diagnostic systems and related software.  These systems are
designed for the management and improvement of cardio-
respiratory health, as well as for hospital and physician office
metabolic and nutrition assessments.  And, we are especially
encouraged by the market response to the introduction of our New
Leafr health and fitness products, many of which are derived
from Medical Graphics' core technologies.  These products
include our recently introduced Weight Loss Training program
that is being marketed through health and fitness clubs."

Jahnke also noted that Medical Graphics was not involved in
Angeion's Bankruptcy.

Founded in 1986, Angeion Corporation -- http://www.angeion-
ir.com -- acquired Medical Graphics --
http://www.medgraphics.com-- in December 1999.  Medical
Graphics develops, manufactures and markets non-invasive cardio-
respiratory diagnostic systems and related software for the
management and improvement of cardio- respiratory health.  The
Company has also introduced a line of health and fitness
products, many of which are derived from Medical Graphics' core
technologies.  These products, marketed under the New Leaf
Health and Fitness Brand -- http://www.newleaf-online.com--
help consumers effectively manage their weight and improve their
fitness.  They are marketed to the consumer primarily through
health and fitness clubs and cardiac rehabilitation centers.


ANTHONY & SYLVAN: Working Capital Deficit Tops $1.2M at Sept. 30
----------------------------------------------------------------
Anthony & Sylvan Pools Corporation (Nasdaq: SWIM) announced
results for its third quarter ended September 30, 2002.  Net
sales were $50,626,000, a decrease of 11.4% from the third
quarter 2001 sales of $57,118,000.  Net income for the third
quarter was $177,000 compared with $1,681,000 for the same
period last year. On a per share basis, adjusted for a 10% stock
dividend distributed in May 2002, diluted earnings per share of
$0.03 compares with $0.32 per share recorded in the third
quarter ended September 30, 2001.  For the nine months ended
September 30, 2002, revenues of $142,291,000 compared with
$151,892,000 last year, a 6.3% decrease.  Net income for the
nine months was $310,000 compared with $2,689,000 in the prior
year.  Diluted earnings per share for the nine-month period of
$0.06 compared with $0.51 per share reported last year.

Included in the results for the third quarter and nine months is
a $1,170,000 pre-tax restructuring charge for the previously
announced decision to close its swimming pool installation
divisions in the Orlando and Southeastern Florida markets.  In
addition, those divisions had combined operating losses of
$800,000 and $500,000 for the third quarter ended September 30,
2002 and 2001, respectively, and operating losses of $2,600,000
and $1,500,000 for the nine months ended September 30, 2002 and
2001, respectively.

At September 30, 2002, the Company's balance sheets shows a
working capital deficit of about $1.2 million.

Commenting on the results, Stuart D. Neidus, Anthony & Sylvan's
Chairman and Chief Executive Officer, said, "The wind-down of
the closings of our Orlando and Southeastern Florida swimming
pool installation divisions is going well and should be, for the
most part, completed before the end of the year. At that time,
we will account for those operations as discontinued.  Our
continuing businesses, while still experiencing the effect of
consumer restraint and price sensitivity, saw third quarter
bookings of sales contracts increase over last year."

Mr. Neidus commented on the outlook for the remainder of the
year by stating, "For the fourth quarter, our results will be
affected by the wind- down of operations in the two Florida
divisions that are closing.  Once the wind-down is completed, we
can fully redirect our financial and intellectual assets to
markets and growth strategies that can yield levels of return
consistent with our long-term goal of increasing shareholder
value."  He also noted that the Company continues to maintain a
strong balance sheet, with over $30 million in equity and no
debt at September 30, 2002.

Mr. Neidus also announced that the Company's Board of Directors
has declared a 10 percent stock dividend payable on November 29,
2002 to shareholders of record on November 15, 2002.  Commenting
on the dividend action, Mr. Neidus said, "Our Board again has
indicated its confidence in the long-term potential for Anthony
& Sylvan.  This stock dividend is another step toward increasing
the liquidity of our stock."

Anthony & Sylvan -- http://www.anthonysylvan.com-- operates in
the leisure industry, offering in-ground, concrete residential
swimming pools, spas and related products to its customers.  The
Company serves its customers through a network of over 40 sales
design centers in 23 geographic markets in 16 states. It also
sells pool-related consumables, replacement parts, equipment and
supplies through retail service centers.


ASBESTOS CLAIMS: All Proofs of Claim Due Tomorrow
-------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
fixes October 31, 2002, as the Bar Date for creditors of
Asbestos Claims Management Corporation to file their proofs of
claim or be forever barred from asserting that claim.
Proofs of claim are deemed timely-filed if they are received on
or before 4:00 p.m. of the Bar Date by:

      Asbestos Claims Management Corporation
      c/o Trumbull Services LLC
      4 Griffin Road North, Windsor CT 06095

The Debtors identified five kinds of claims that are exempted to
the Bar Dates:

   a) Claims already been properly filed with this Court;

   b) Claims not listed in the Schedules as "disputed,"
      "contingent," or "unliquidated";

   c) Administrative expense of the Debtor's chapter 11 case;

   d) Claims previously allowed by order of this Court; and

   e) Asbestos-related bodily injury claim, including claims
      based on the rejection or alleged breach of a written
      settlement agreement with respect to such asbestos-related
      bodily injury claim.

The Government Claims Bar Date is February 17, 2003.

Asbestos Claims Management Corporation filed for chapter 11
protection on August 19, 2002 at the U.S. Bankruptcy Court for
the Northern District of Texas. Michael A. Rosenthal, Esq., and
Janet M. Weiss, Esq., at Gibson, Dunn & Crutcher represent the
Debtor in its restructuring efforts.  When the Company filed for
protection from its creditors it listed debts and assets of over
$100 million.


ASPEN GROUP RESOURCES: Defaults on Bank Loan Facility
-----------------------------------------------------
Aspen Group Resources Corporation, (OTCBB: ASPGF; Toronto: ASR)
has appointed Robert Calentine to the position of interim Chief
Executive Officer.  Mr. Calentine has been on the Board of
Directors of Aspen since May, 2002, and was former CEO and
founder of Custom Steel Inc., a leading supplier of custom
fabricated steel products.

Aspen also announced that it has appointed Ron Mercer as Vice-
President of Operations.  Mr. Mercer has been with Aspen since
1999 in various capacities.

Aspen has received the resignation of Jack Wheeler as a director
and officer of Aspen.  Mr. Wheeler has served Aspen in various
capacities as Chairman, President, CEO and a director since
September of 1999. The Board of Directors of Aspen thank Mr.
Wheeler for his years of service and wish him success in his
future endeavors.

Aspen also announced that it has received a notice of default
from its bank with regard to its loan facility. Management of
Aspen is actively pursuing resolutions with its bank to rectify
the events of default and put the loan back in good standing as
soon as possible.


BALDWINS INDUSTRIAL: Panel Hires McClain & Leppert as Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors asks for authority
from the U.S. Bankruptcy Court for the Southern District of
Texas to hire McClain & Leppert, PC, as its Counsel in
connection to the chapter 11 cases involving Baldwins Industrial
Services, Inc., and its debtor-affiliates.

The Committee relates to the Court that during its meeting,
members voted to tap the legal services of McClain & Leppert as
counsel for the Committee with David P. McClain, Esq., as the
attorney in charge of the representation.

The Committee anticipates McClain & Leppert will:

   a) give the Committee legal advice with respect to its powers
      and duties under the Bankruptcy Code in connection with
      this case;

   b) prepare on behalf of the Committee all necessary
      applications, answers, claims, proceedings, orders, reports
      and other legal instruments necessary or advisable to
      represent the interests of the unsecured creditors of
      Baldwins Industrial;

   c) initiate and prosecute any litigation to which the
      Committee may be a party;

   d) assist the Committee in its investigation of the acts,
      conduct, assets, liabilities, and financial condition of
      Baldwins Industrial, the operation of Baldwin Industrial's
      business, and the desirability of the continuation of such
      business, and any other matter relevant to the case or to
      the formulation of a plan of reorganization;

   e) assist the Committee in requesting the appointment of a
      trustee or examiner should such action become necessary;

   f) negotiate with the secured creditors and Baldwins
      Industrial on behalf of the Committee;

   g) review all claims and documentation of collateral or
      security held against Baldwins Industrial or its assets;

   h) institute objections to proofs of claim asserted against
      Baldwins Industrial's estate, and to prosecute all
      contested objection to proofs of claim asserted against the
      estate;

   i) analyze, institute and prosecute actions regarding recovery
      of property of Baldwins Industrial's estate;

   j) assist, advise and represent the Committee in analyzing the
      capital structure of Baldwins Industrial, investigating the
      extend and validity of liens, cash collateral stipulations
      or contested matters;

   k) assist, advise and represent the Committee in any manner
      relevant to preserving and protecting Baldwins Industrial's
      estate;

   l) investigate and prosecute preferences, fraudulent transfers
      and other actions arising under Baldwins Industrial's
      bankruptcy avoiding powers, to the extent the Committee is
      so empowered;

   m) appear in Court and to protect the interests of the
      Committee before the Court;

   n) assist the Committee in administrative matters; and

   o) perform such other legal services as may be required and in
      the interest of the unsecured creditors of Baldwins
      Industrial's estate, including preparation of a plan of
      reorganization and disclosure statement.

McClain & Leppert's bankruptcy-related work will be performed by
David P. McClain, Esq., and Mike Leppert, Esq., at $300 per
hour.  The rates for other professionals are:

           Associates           $150 - $185 per hour
           Legal Assistants     $ 60 per hour

Baldwins, one of the largest crane rental companies in the
Southwestern United States, filed for chapter 11 protection on
August 26, 2002. Jack M. Partain, Jr., Esq., at Fulbright &
Jaworksi represents the Debtors in their restructuring efforts.
When the Company filed for chapter 11 protection it listed
assets of not more than 10 million and estimated debts at not
more than 50 million.


BCE INC: Plans to Raise C$2B in Public Debt to Fund Bell Buyback
----------------------------------------------------------------
BCE Inc., (TSX, NYSE: BCE) announced that further to its August
1st, 2002 shelf prospectus filing, it will file a prospectus
supplement with all Canadian provincial securities regulatory
authorities for the public offering of Cdn $2 billion of BCE
debt securities in three series.

BCE will offer Series A, Series B, and Series C Notes:

        - The $300 million 6.20% Series A Notes will be dated
October 30, 2002, mature on October 30, 2006 and will be issued
at a price of 99.937% of par.

        - The $1,050 million 6.75% Series B Notes will be dated
October 30, 2002, mature on October 30, 2007 and will be issued
at a price of 99.829% of par.

        - The $650 million 7.35% Series C Notes will be dated
October 30, 2002, mature on October 30, 2009 and will be issued
at a price of 99.747% of par.

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

The closing of the offering is scheduled to occur on October 30,
2002, and is subject to certain conditions set forth in the
underwriting agreement.

The debt securities are offered for sale to the public by a
syndicate of underwriters led by TD Securities Inc. as lead
manager and book-runner and Merrill Lynch Canada Inc. as co-lead
manager. The underwriting syndicate also includes BMO Nesbitt
Burns Inc., CIBC World Markets Inc., RBC Capital Markets, Scotia
Capital Inc., Banc of America Securities, National Bank
Financial Inc., Casgrain & Company Ltd., and Societe Generale.

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 - CTV,
Canada's leading private broadcaster, The Globe and Mail, the
leading Canadian daily national newspaper and Sympatico.ca, a
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.


BETHLEHEM STEEL: Court OKs Sale of Bethlehem Center to Majestic
---------------------------------------------------------------
Steven E. Ostrow, Esq., at White and Williams LLP, in
Philadelphia, Pennsylvania, informs the Court that Grubb & Ellis
is a licensed real estate broker in Pennsylvania.  Through its
brokerage services and diligent efforts as dual agent for
Bethlehem Steel Corporation, its debtor-affiliates, and
Majestic, Grubb & Ellis procured Majestic as the ready, willing
and able buyer for the Assets.  Grubb & Ellis agreed to be paid
a commission upon the closing of the sale.  But since the
commission is not payable until closing, the commission is not
"earned" unless and until the actual sale of the Assets occurs
under Pennsylvania law.  Therefore, Grubb & Ellis' claim for a
commission arises postpetition at settlement.  The Debtors and
Majestic are jointly obligated to pay Grubb & Ellis its standard
commission on vacant property equal to 10% of the Purchase Price
or at least $1,298,999, upon the closing of the Agreement.

Instead, the Debtors and Majestic have sought to preclude Grubb
& Ellis from recovering its commission.  Under the Sale Motion,
both the Debtors and Majestic seek:

   (a) to arbitrarily limit Grubb & Ellis' commission to an
       amount not more than $360,000;

   (b) an injunction permanently enjoining and precluding all
       parties and entities asserting any claims against the
       Acquired Assets and the Debtors, including Grubb & Ellis,
       from asserting any claims, or taking any legal action,
       against the Assets and Majestic; and

   (c) to restrict any and all claims and litigation arising out
       of the Sale Motion or the Agreement or any dispute
       relating to the exclusive jurisdiction of the Bankruptcy
       Court.

In addition to its claim against Majestic, Grubb & Ellis asserts
an administrative expense claim for the Commission, which will
accrue or be earned and due and payable under Pennsylvania law
upon the closing of the sale of the Acquired Assets.

               Majestic Disputes Grubb & Ellis' Claim

Majestic Realty Co. asserts that Grubb & Ellis' objection
premature.  According to Michael D. Sirota, Esq., at Cole,
Schotz, Meisel, Forman & Leonard PA, in New York, Grubb & Ellis
itself concedes that any commission or fee to which it may be
entitled is not payable until the Settlement Date.  Thus, since
the settlement date of the transactions contemplated by the
Agreement may not occur for years, if at all, there exist no
legitimate reason to adjudicate the Objection now or to modify
the proposed form of the Sale Order.

Mr. Sirota also argues that Grubb & Ellis' contention that it is
entitled to a commission with respect to the sale of the Assets
has no factual or legal support.  Contrary to Grubb & Ellis'
misinterpretation of the Agreement, neither the Agreement nor
the Parties acknowledge that Grubb & Ellis was the "procuring
broker" for the sale of the Acquired Assets.  In fact, Mr.
Sirota relates, the Agreement only recognizes that Grubb & Ellis
was a broker that the Parties dealt with in connection with the
Agreement.

More damaging to Grubb & Ellis' claim is that neither of the
parties ever signed a written agreement with Grubb & Ellis.  Mr.
Sirota informs the Court that the 1998 revised provisions of the
Real Estate Licensing and Registration Act unequivocally
demonstrate that the Pennsylvania legislature now requires
broker agreements to be in writing or, at least, include a
written memorandum stating the agreement's terms as a condition
precedent to a broker receiving any compensation from a real
estate transaction.  Thus, since a written brokerage agreement
with the Parties or an oral listing agreement with a written
memorandum stating the terms does not exist, Grubb & Ellis is
not entitled to any brokerage fee or commission.

                          Debtors Respond

George A. Davis, Esq., Weil, Gotshal & Manges LLP, at New York,
argues that Grubb & Ellis' request is not a proper objection to
the Sale Motion because nothing in the Sale Motion or the
proposed sale order limits in any way Grubb & Ellis' right to
assert any claims against the Debtors or Majestic for a
brokerage fee.  Any request for payment of a brokerage fee
should be made by separate motion to the Court on proper notice
to the Debtors and parties-in-interest.

In addition, Mr. Davis notes that Grubb & Ellis has not been
retained as a professional in the Debtors' Chapter 11 cases.
All of the activities Grubb & Ellis allege gives rise to a right
to payment of a brokerage commission occurred prepetition.
Hence, any brokerage commission claim is a prepetition unsecured
claim, which will be addressed in a confirmed plan of
reorganization for the Debtors.

Mr. Davis clarifies that the injunction provision merely
complements the "free and clear" component of the sale order and
prevents claimants from asserting the claims they hold against
the Debtors against Majestic.  Therefore, any direct claims
Grubb & Ellis holds against Majestic are unaffected by the
injunction provision of the sale order.  The choice of forum
provision of the Agreement is binding only on the Debtors and
Majestic and does not limit in any way the rights of other
parties-in-interest.

Mr. Davis tells Judge Lifland that Grubb & Ellis misinterpreted
the Agreement. The Debtors and Majestic do not seek to
arbitrarily limit Grubb & Ellis' brokerage fee to not more than
$360,000, as it suggests.  Because Grubb & Ellis' claim is
disputed, the intent of that provision is to limit the Debtors'
liability vis a vis Majestic pursuant to the Agreement to
$360,000 in the event the Debtors or Majestic are found to be
liable to Grubb & Ellis for a brokerage fee.

                            *     *     *

After weighing the arguments presented, Judge Lifland authorizes
the Debtors to sell Bethlehem Center to Majestic in accordance
with the terms of the parties' sale agreement.  The Court
overrules Grubb & Ellis' Objection.

Judge Lifland, however, emphasizes that, nothing in the
Agreement, the Sale Motion or this Order will bar, impair or
preclude any rights, claims or liens, if any, of Grubb & Ellis
in any court of competent jurisdiction against Majestic or the
Debtors for a broker's commission or finder's fee arising out of
or relating to the sale of the Assets.  The Court makes it clear
that:

   -- the title to the Assets will pass to Majestic at the
      Settlement Date free and clear of the Commission Claims;
      and

   -- effective on the settlement date of the transactions
      contemplated by the Agreement, Grubb & Ellis is permanently
      enjoined and precluded from asserting or filing the
      Commission Claims against the Assets themselves.

                           *   *   *

To recall, the Bethlehem Center is located in the City of
Bethlehem and Lower Saucon Township in Northampton County,
Pennsylvania. The Center is comprised of 1,600 acres upon
which Bethlehem operated a steel plant that was shut down in
several phases from 1995 through 1998.  As a result of the
closure of the steel plant, the land on which the vacant plant
is located has only been used by some of Bethlehem's non-debtor
railroad subsidiaries but has not been used by the Debtors since
1998.  Since that time, Bethlehem Steel Corporation and its
debtor-affiliates have been engaged in redeveloping and
marketing the property for sale as a light industrial/commerce
park development.

The salient terms of the Purchase and Sale Agreement are:

Assets:   (a) 452 acres of the Bethlehem Commerce Center

           (b) 18 acres owned by the CENTEC Roll Corporation

               The Debtors do not currently own the CENTEC
               Property.  However, the Debtors and CENTEC Corp.
               are currently discussing the terms and conditions
               under which CENTEC Corp. would sell the CENTEC
               Property to the Debtors.  Accordingly, if acquired
               by the Debtors, the CENTEC Property would be sold
               to Majestic or the successful bidder, if any, for
               the same consideration the Debtors were required
               to pay to acquire the CENTEC Property;

           (c) 19 acres known as "Waylite Tract No. 1"
               Majestic has an obligation to acquire Waylite
               Tract No. 1 if Majestic acquires the Bethlehem
               Center;

           (d) 64 acres known as "Waylite Tract No. 2"

               If Majestic acquires the Bethlehem Center,
               Majestic will have an option to acquire Waylite
               Tract No. 2, which option must be exercised by
               June 30, 2004;

               The Waylite tracts and adjoining property of
               Bethlehem are currently encumbered by the Waylite
               Lease, which expires in June 2006.  The Waylite
               lease is not readily assignable to Majestic.  As a
               result, the parties agree that the sale of the
               Waylite Tracts will close after the expiration of
               the Waylite Lease.

Price:    $12,989,999, which will be allocated as follows:

               -- $9,407,477 for the Property;

               -- $790,000 for the CENTEC Property;

               -- $639,252 for Waylite Tract No. 1;

               -- $2,153,270 for Waylite Tract No. 2; and

               -- $5,800,000 in escrow upon Notice of Termination
                  at settlement of a certain intermodal Lease.

Deposit:   $500,000

            50% of the Deposit becomes non-refundable 180 days
            after the Court enters an Order approving the sale.

Due
Diligence: (a) Majestic has 365 days from the date the Sale
                Order is entered to conduct due diligence,
                including tests, investigations, and studies.

           (b) Majestic has the right to extend the Due Diligence
               Period for two separate periods of three months
               each by notice to Bethlehem accompanied by the
               payment of $200,000 for each extension.

           (c) The Extension Payments are non-refundable, except
               as provided in the Agreement, and are not to be
               applied to reduce the purchase price.

Environ-
mental
Matters:  (a) Within nine months after the Sale Order is
               entered, Bethlehem is to address certain
               environmental issues.

           (b) After the Sale Order is entered, Majestic will
               initiate and diligently proceed to address the
               issues and complete assessments of soil
               contamination at the Property consistent with the
               requirements to obtain:

               -- a release of liability from the Pennsylvania
                  Department of Environmental Protection under
                  Pennsylvania's brownfields law; and

               -- approval from the United States Environmental
                  Protection Agency that the applicable
                  corrective action requirements of the Resource
                  Conservation and Recovery Act have been met.

           (c) Subsequent to the completion of the soil
               assessments, Majestic will develop a remediation
               plan for approval by the DEP and the EPA;

           (e) Bethlehem will perform, at its expense,
               environmental assessments of the groundwater at
               the Property, Waylite Tract No. 1, the CENTEC
               Property -- if acquired by Bethlehem -- and
               Waylite Tract No. 2 -- if the option is exercised;

Notices of
Violation: If Bethlehem receives a notice of violation relating
            to the Property prior to settlement, Bethlehem must
            correct such violation, provided that the cost to
            affect a cure or compliance shall not exceed in the
            aggregate $3,000,000.


Right to
Terminate: Majestic has the right to seek specific performance
            from the Debtors or terminate the Agreement.  In the
            event of a termination, Majestic receives the
            Deposit, other necessary reimbursements, if any, and
            $500,000 as liquidated damages. (Bethlehem Bankruptcy
            News, Issue No. 24; Bankruptcy Creditors' Service,
            Inc., 609/392-0900)

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


BRIGHTPOINT INC: Closes Sale of Certain Mexican Operating Assets
----------------------------------------------------------------
Brightpoint, Inc. (NASDAQ:CELL), whose corporate credit is
currently rated by Standard & Poor's at B, said that it and
certain of its subsidiaries have completed the sale of certain
operating assets of Brightpoint de Mexico, S.A. de C.V., and
their respective ownership interests in Servicios Brightpoint de
Mexico, S.A. de C.V., to Soluciones Inteligentes para el Mercado
Movil, S.A. de C.V., an entity which is wholly-owned and
controlled by Brightstar de Mexico S.A. de C.V.

Pursuant to the transaction, Brightpoint received cash
consideration totaling approximately US$1.7 million and a short-
term promissory note from SIMM totaling approximately US$1.1
million that matures in December 2002. The repayment of the
promissory note is guaranteed by Brightstar. The Company expects
to record a loss in the range of US$4.5 million to US$5.0
million relating to the sale of these operating assets
(including approximately US$3.4 million from a non-cash write-
off of cumulative foreign currency translation losses) during
the fourth quarter of 2002. Additionally, Brightpoint plans to
initiate the liquidation of the remaining assets and liabilities
of its Mexican operations during the fourth quarter of 2002. The
losses and the results of operations of Brightpoint Mexico will
be classified as a part of discontinued operations in
Brightpoint, Inc.'s consolidated statement of operations
beginning in the fourth quarter of 2002.

Brightpoint is one of the world's largest distributors of mobile
phones. Brightpoint supports the global wireless
telecommunications and data industry, providing quickly
deployed, flexible and cost effective third party solutions.
Brightpoint's innovative services include distribution, channel
management, fulfillment, eBusiness solutions and other
outsourced services that integrate seamlessly with its
customers. Additional information about Brightpoint can be found
on its Web site at http://www.brightpoint.com

Founded in 1997, Brightstar Corporation is a solution provider
and value-added distribution and manufacturing services company.
The company provides customers in the wireless industry with
inventory management, logistics, fulfillment, Internet-based
solutions, customized packaging and after-sales support.
Brightstar ranks sixth on the Hispanic Business 500 and number
one on its technology list. Its customer base includes over 100
network operators and nearly 6,000 distributors, agents,
resellers and retailers around the world. Brightstar is one of
Motorola's strategic partners in Latin America and the U.S. and
an authorized distributor for all leading wireless equipment
manufacturers. Brightstar operates 18 facilities in 14 countries
worldwide. Its headquarters is based in Miami, FL, with
operations in Argentina, Bolivia, Brazil, Colombia, Chile, the
Dominican Republic, El Salvador, Guatemala, Mexico, Paraguay,
Peru, the United States and Puerto Rico, Uruguay and Venezuela.
During the year ended December 31, 2001, Brightstar's
consolidated revenues were $631 million. For more details, visit
http://www.brightstarcorp.com


BURNHAM PACIFIC: Trustees to Make Liquidating Distribution Today
----------------------------------------------------------------
The trustees of the Burnham Pacific Properties Liquidating Trust
have determined to make a liquidating distribution in the amount
of $0.50 per unit to the registered unitholders of the Trust.
This distribution is scheduled to be paid today, October 30,
2002. A letter from the trustees of the Trust to the
registered unitholders regarding the distribution and related
matters will accompany the payment of the distribution.

Other recent events include:

      -- On June 28, 2002, the Trust closed on the sale of
Central Shopping Center, located in Ventura, California, for
approximately $3,000,000.

      -- On August 14, 2002, the Trust closed on the sale of the
Palms to Pines shopping center, located in Palm Desert,
California, for approximately $3,200,000.

A lawsuit originally filed in April 2002 by certain individuals
and their investment companies that owned the Lake Arrowhead
Village property immediately before an affiliate of Burnham
Pacific Properties, Inc. acquired the property was settled and
dismissed for a settlement value of approximately $850,000,
which amount was fully reserved for in the most recently filed
financial statements of Burnham Pacific Properties, Inc.


CLICKS & FLICKS: Gets Nod to Hire Finkel Goldstein as Counsel
-------------------------------------------------------------
Clicks & Flicks, Inc., sought and obtained approval from the
U.S. Bankruptcy Court for the Southern District of New York to
employ and retain Finkel Goldstein Berzow Rosenblomm & Nash LLP
as its attorneys in its chapter 11 case.

As bankruptcy counsel to the Debtor, Finkel Goldstein is
expected to:

   a) provide the Debtor with necessary legal advice in
      connection with the operation and rehabilitation of its
      business during the Chapter 11 proceeding;

   b) represent the Debtor in all court proceedings and
      proceedings before the United State Trustee;

   c) prepare on behalf of the Debtor all necessary petitions,
      orders, applications, motions, reports and other legal
      papers and plan documents;

   d) examine into any liens, transfers, and claims and bring
      necessary adversary proceedings or objections in connection
      with this case; and

   e) perform all other necessary legal services for the Debtor.

Mr. Cliff Strome, President of Clicks and & Flicks tells the
Court that Finkel Goldstein is disinterested and qualified to
serve as bankruptcy counsel.

Kevin J. Nash, Esq., at Finkel Goldstein Berzow Rosenbloom Nash
represents Clicks & Flicks, Inc., in its restructuring efforts.
The hourly rates of Finkel Goldstein' professionals who
represent the Debtor, however, is not disclosed.  When the
Company filed for protection from its creditors, it listed an
estimated debts and assets of $1 million to $10 million each.


COMM 2000-C1: Fitch Affirms Low-B and Junk Ratings on 7 Notes
-------------------------------------------------------------
COMM 2000-C1 commercial mortgage pass-through certificates,
series 2000-C1 are affirmed by Fitch Ratings as follows: $130.5
million class A-1, $542.9 million class A-2 and interest-only
class X at 'AAA'; $38.2 million class B at 'AA'; $39.3 million
class C at 'A'; $13.5 million class D at 'A-'; $25.8 million
class E at 'BBB'; $11.2 million class F at 'BBB-'; $26.9 million
class G at 'BB+'; $6.7 million class H at 'BB'; $6.7 million
class J at 'BB-'; $10.1 million class K at 'B+'; $7.9 million
class L at 'B'; $6.7 million class M at 'B-'; and $4.5 million
class N at 'CCC'. Fitch does not rate the $9 million class O
certificates. The affirmations follow Fitch's annual review of
the transaction, which closed in September 2000.

The rating affirmations reflect the conduit loan performance,
the investment grade credit assessments of two loans (14.7%) and
the minimal reduction of the pool collateral balance since
closing. As of the October 2002 distribution date, the pool's
aggregate certificate balance has been reduced by approximately
2%, to $879.9 million from $897.9 million at closing. ORIX Real
Estate Capital Markets, LLC, the master servicer, collected
year-end 2001 financials for 80% of the outstanding pool
balance. The 2001 weighted average debt service coverage ratio
for these loans is 1.61 times versus 1.57x at YE 2000 and 1.52x
at issuance.

Three loans representing 4.8% of the overall pool balance are
currently in special servicing. The largest loan in special
servicing represents 3.5% of the overall pool balance and is
collateralized by the Radisson Hotel in Miami, FL. Though the
loan is only 30 days delinquent, operations at the property
continue to decline with a current occupancy at 60%. According
to GMAC, the special servicer, this loan is expected to be paid
in full in November. The next largest loan in special servicing
is secured by a retail property in Norco, CA and is currently
REO after the sole tenant, Home Base, vacated. Aside from the
loans in special servicing, nine loans representing 4.5% of the
pool balance have YE 2001 DSCRs below 1.00x.

Fitch reviewed the performance and underlying collateral of the
Crowne Plaza (10%) and the Crystal Park (4.7%) loans, which both
have investment grade credit assessments. The DSCR for each of
these loans is calculated using borrower financials less
required reserves and debt service payments based on the
original balance and Fitch stressed refinance constant.

The Crowne Plaza loan is the largest loan in the pool. The loan
is secured by a 46 story, 770-room hotel located in Times Square
area of midtown Manhattan. The trailing twelve month June 30,
2002 DSCR is 1.49x, compared to 1.42x at YE 2001 and 1.73x at
underwriting. The hotel's occupancy and average daily rate as of
June 2002 were 79% and $181, respectively. The Property Market
Metric score for hotels in this area is '5'.

The Crystal Park loan (4.7% of the pool) is secured by an 11-
story office building in Arlington, Virginia. Approximately 74%
of net rentable area is occupied by the U.S. government, with
the Patent and Trademark office occupying 59% of the NRA. The YE
2001 DSCR is 2.01x compared to 1.95x at underwriting. The PMM
score for office properties in Arlington is '1', which is the
highest score possible.

Fitch applied various hypothetical stress scenarios taking into
consideration the specially serviced loans and the other loans
with DSCRs below 1.00x. Even under these stress scenarios,
subordination levels remain sufficient to affirm the ratings.
Fitch will continue to monitor this transaction, as surveillance
is ongoing.


COMVERSE: S&P Cuts Corp. Credit & Sr. Unsec. Ratings Cut to BB-
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured debt ratings on telecommunications software
provider Comverse Technology Inc., to double-'B'-minus from
double-'B.' At the same time, Standard & Poor's removed the
ratings from CreditWatch, where they had been placed on
September 11, 2002.

The action reflected deteriorating profitability, particularly
in Comverse's network services business segment, precipitated by
the sharp slowdown in wireline and wireless telecommunications
carrier capital spending.

The outlook is negative on Woodbury, N.Y.-based Comverse, a
leading supplier of software-driven voicemail and related
messaging systems to telecommunications carriers. It had $434
million of debt outstanding as of July 31, 2002.

"Failure to restore profitability could result in further
lowering of the rating," said Standard & Poor's credit analyst
Joshua G. Davis.

Comverse has been hurt by cutbacks in spending on enhanced
services, such as voicemail, which represent about 57% of total
revenues. The cutbacks have come from telecommunications
carriers, especially wireless operators, which account for more
than half of Comverse's revenues have been the source of the
cutbacks. Comverse has had five consecutive quarters of revenues
declines. Profitability has likewise deteriorated.


CONTOUR ENERGY: Gets OK to Tap Energy Spectrum as Fin'l Advisors
----------------------------------------------------------------
Contour Energy Co., and its debtor-affiliates sought and
obtained permission from the U.S. Bankruptcy Court for the
Southern District of Texas to hire Energy Spectrum Advisors
Inc., as their Financial Advisors in their chapter 11 cases.

Energy Spectrum will:

   a) advise and assist the Debtors in developing, identifying
      and evaluating potential transactions involving asset
      dispositions, arranging senior and subordinated debt
      financing, and merger partners;

   b) provide expert testimony, as needed, in connection with
      hearings relating to matters for which Energy Spectrum has
      advised the Debtors, including any hearing on the
      confirmation of a plan; and

   c) provide other financial advisory and related investment
      banking services in this chapter 11 case as reasonably
      requested by the Debtors.

Energy Spectrum will serve as the Debtors' financial advisors in
exchange for:

      a) a cash retainer of $100,000;

      b) a success fee equal to 0.75% of the Aggregate
         Consideration associated with a Transaction.
         Transaction may include:

         1) the conversion of existing debt into equity of
            Contour;
         2) the placement of equity from new investors into
            Contour;
         3) the sale or merger of Contour to or with a third
            party;
         4) the sale of all or portions of Contour's assets;
         5) the refinancing of existing debt.

      c) a cash retainer of $50,000 for each two possible six
         months extensions of the Engagement Agreement beyond
         July 30, 2002; and

      d) the reimbursement for all the reasonable and necessary
         expenses incurred.

Energy Spectrum's engagement will expire on January 31, 2003.
This retention is led by James P. Benson, a Partner and Managing
Director of Energy Spectrum.

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.


COVANTA ENERGY: Wants Lease Decision Period Extended to March 27
----------------------------------------------------------------
Covanta Energy Corporation and its debtor-affiliates currently
have until November 27, 2002 to decide whether to assume or
reject their 411 unexpired non-residential real property leases.
James L. Bromley, Esq., at Cleary, Gottlieb, Steen & Hamilton,
in New York, explains that the Debtors' decision whether to
assume or reject most, if not all, of the remaining Unexpired
Leases will depend in large part on the nature of the Debtors'
Plan.  Since the Debtors are asking for an extension of time to
file a plan, an extension of time to decide on the Unexpired
Leases is only reasonable.

Accordingly, pursuant to Section 365(d)(4) of the Bankruptcy
Code, the Debtors ask the Court to extend the period to assume
or reject the Unexpired Leases to March 27, 2003, without
prejudice to their right to seek further extension, after notice
and a hearing, and the right of any counter-party to an
Unexpired Lease to request that the period be shortened.

Mr. Bromley tells Judge Blackshear that of the remaining
Unexpired Leases, 386 of them relates to leases of surface and
mineral rights in California -- Heber Leases -- that enable the
Debtors to produce geothermal fluid from the ground and use it
to generate electricity.  Another 24 Unexpired Leases relate to
power generation facilities or the land on which those
facilities are located.  The remaining leases are for leases of
office space.  The Debtors reserve the right to identify more
Unexpired Leases to be covered by the extension.  Mr. Bromley
clarifies that there may be a case that an identified lease may
not actually be a true lease but is included in the list out of
an abundance of caution.

Since the First Extension Motion, Mr. Bromley reports, two
leases have been rejected pursuant to a Court order.  The
Debtors have also recently commenced discussion with the
counter-parties to the Heber Leases in an effort to resolve a
significant dispute concerning the payment amounts owed under
the leases.

Mr. Bromley asserts that the extension sought should be granted
because:

   (a) in compliance with Section 365(d)(3) of the Bankruptcy
       Code, the Debtors fully intend to remain current with
       respect to all outstanding postpetition obligations under
       the Unexpired Leases as they come due;

   (b) the negative effects of an extension on the counter-
       parties to the Unexpired Leases are minimal;

   (c) any counter-party to the Unexpired Lease may request that
       the Court fix an earlier date by which the Debtors must
       assume or reject the Lease, with the Debtors retaining
       the burden of persuasion for any motion so filed;

   (d) the Unexpired Leases are critical assets that are
       integral to the Debtors' reorganization as they cannot
       successfully operate their power generation, water and
       wastewater facilities without the continued use of the
       property underlying the Unexpired Leases;

   (e) in order to make an informed decision regarding whether to
       assume or reject each of the Unexpired Leases in the
       context of the Plan, the Debtors will require substantial
       time to adequately assess the potential value of each
       lease within the marketplace as well as within the
       Debtors' own operations;

   (f) the Debtors have made substantial progress in the
       administration of these complicated cases and have
       resolved a multitude of operational issues that have
       arisen since the Petition Date requiring their full and
       immediate attention, making it virtually impossible for
       the Debtors to devote the resources necessary to complete
       their analysis of the Unexpired Leases in the context of
       a Plan to date; and

   (g) premature rejection of the leases would harm the Debtors'
       estates by resulting in the loss of one or more leases of
       real property that may be essential to the Debtors'
       reorganization.  Likewise, premature assumption of real
       property leases would harm the estates by resulting in
       the Debtors being required to cure prepetition claims and
       the elevation of landlord claims to administrative
       expense status before an informed decision can be made
       and a reorganization ensured. (Covanta Bankruptcy News,
       Issue No. 16; Bankruptcy Creditors' Service, Inc.,
       609/392-0900)


CYBEX INT'L: Will Hold Third Quarter Conference Call Tomorrow
-------------------------------------------------------------
Cybex International, Inc. (AMEX: CYB), a leading exercise
equipment manufacturer, will discuss its third quarter financial
results in a conference call tomorrow, October 31 at 10:00 a.m.
EST.

Those who wish to participate in the conference call may
telephone (888) 335-6674 approximately 15 minutes before the
10:00 a.m. EST starting time. A digital replay of the call will
be available by telephone for 24 hours following completion of
the live call, at (877) 519-4471 toll free in the United States
or (973) 341-3080 for international callers, PIN #3571307.

Cybex International, Inc., is a leading manufacturer of premium
exercise equipment for consumer and commercial use. Cybex and
the Cybex Institute, a training and research facility, are
dedicated to improving exercise performance based on an
understanding of the diverse goals and needs of individuals of
varying physical capabilities. Cybex designs and engineers each
of its products and programs to reflect the natural movement of
the human body, allowing for variation in training and assisting
each unique user - from the professional athlete to the
rehabilitation patient - to improve their daily human
performance. For more information on Cybex and its product line,
please visit the Company's Web site at http://www.eCybex.com

Cybex International's June 29, 2002, balance sheets show a
working capital deficit of about $9 million. In addition, the
Company's total shareholders' equity has further sunk to about
$870,000 at the same date, from about $23 million recorded at
December 31, 2001.


DOBSON COMMS: Will Report Third Quarter Results on Nov. 14, 2002
----------------------------------------------------------------
Dobson Communications Corporation (Nasdaq:DCEL) reported that
net subscriber additions for the third quarter ended September
30, 2002 were approximately 14,300, compared with approximately
26,600 net subscribers for the same period last year. These
totals do not include net subscriber additions for American
Cellular Corporation, which is jointly owned by Dobson and AT&T
Wireless.

Dobson's postpaid customer churn was 2.0 percent for the third
quarter of 2002, compared with churn of 1.9 percent for the same
period last year. Gross subscriber additions (postpaid) were
approximately 58,800 for the third quarter, equal to gross
subscriber additions for the same period last year.

American Cellular's total net subscriber additions were
approximately 15,200 for the third quarter ended September 30,
2002, compared with approximately 25,500 for the same period
last year.

American's postpaid customer churn was 2.0 percent for the third
quarter of 2002, compared with churn of 1.8 percent for the same
period last year. Gross subscriber additions (postpaid) were
approximately 49,900 for the third quarter, compared with 54,300
gross subscriber additions for the same period last year.

Both postpaid and prepaid subscribers are included in net
subscriber additions. Gross subscriber additions and churn are
reported on a postpaid basis only. The totals above give effect
to and thus exclude the results of the five properties that were
sold to Verizon Wireless (NYSE:VZ) by Dobson Communications and
American Cellular during the first quarter ended March 31, 2002.

                          Conference call

Dobson plans to report its full third quarter 2002 results after
the close of regular market trading on Thursday, November 14,
2002. The Company plans to conduct a conference call to discuss
the results the following day, Friday, November 15, beginning at
9 a.m. ET (8 a.m. CT). The call will also be broadcast on the
Internet.

        Those interested may access the call by dialing:
        Conference call     (800) 665-0430
        Pass code            338308

The call may also be accessed via the Internet through the
Investor Relations page of Dobson's web site at
http://www.dobson.net. A replay of the call will be available
later in the day via Dobson's web site or by phone.

        Replay              (888) 203-1112
        Pass code            338308

As part of the conference call, the Company expects to discuss
its operating outlook and other strategic issues.

Dobson Communications is a leading provider of wireless phone
services to rural markets in the United States. Headquartered in
Oklahoma City, the Company owns or manages wireless operations
in 17 states. For additional information on the Company and its
operations, please visit its Web site at http://www.dobson.net.

At June 30, 2002, Dobson Communication's balance sheet shows a
total shareholders' equity deficit of about $389 million.


EB2B COMMERCE: Winding Down Training & Client Educ'l Services
-------------------------------------------------------------
As a result of continuing operating losses during 2001 and 2002,
eB2B Commerce, Inc., determined to discontinue its training and
client educational services business as of September 30, 2002.
This business, which entails the provision of authorized
technical training education services and training seminars to
corporate computer professionals, has been treated as a separate
reportable segment and was not part of the Company's core
transaction processing business.

The Company does not have a buyer for this business and
management is currently winding down its operations. For the
year ended December 31, 2001, the training and client
educational services business segment contributed revenues of
approximately $2.5 million and an EDITDA (Earnings Before
Interest, Taxes, Depreciation and Amortization) loss of $15,000.
For the six months ended June 30, 2002, revenues and EBITDA for
this business segment were $724,000 and a loss of $333,000,
respectively. The net liabilities of this discontinued operation
will be recorded at their net realizable value under the caption
"Net liabilities of discontinued operation" in the September 30,
2002 balance sheet when the Company files its Form 10-Q for the
three months ended September 30, 2002.

                             *    *    *

As previously reported, eB2B Commerce dismissed Deloitte &
Touche LLP as independent auditors for the Company.

The opinion issued by Deloitte & Touche LLP with the Company's
financial statements for the year ended December 31, 2001
included a reference to substantial doubt that exists regarding
the Company's ability to continue as a going concern.

Effective August 6, 2002, the Company engaged Miller Ellin
Company LLP to serve as the Company's independent auditors.


ENRON CORP: Wins Nod to Hire Blackstone as Financial Advisors
-------------------------------------------------------------
Enron Corporation, and its debtor-affiliates obtained permission
from the U.S. Bankruptcy Court for the Southern District of New
York to employ The Blackstone Group, L.P., as their financial
advisors.

Specifically, The Blackstone will:

     (a) Assist in the evaluation of the Debtors' businesses and
         prospects;

     (b) Assist in the development of the Debtors' long-term
         business plan;

     (c) Assist in the development of financial data and
         presentations to the Debtors' Boards of Directors,
         various creditors, any official committees formed in a
         Chapter 11 proceeding, and other third parties;

     (d) Analyze the Debtors' financial liquidity and evaluate
         alternatives to improve such liquidity;

     (e) Analyze various restructuring scenarios and the
         potential impact of these scenarios on the value of the
         Debtors and the recoveries of those stakeholders
         impacted by the Restructuring;

     (f) Provide strategic advice with regard to restructuring or
         refinancing the Debtors' Obligations;

     (g) Evaluate the Debtors' debt capacity and alternative
         capital structures;

     (h) Participate in negotiations among the Debtors and their
         creditors, suppliers, lessors and other interested
         parties with respect to any of the transactions
         contemplated in the Blackstone Agreement;

     (i) Value securities offered by the Debtors in connection
         with a restructuring;

     (j) Advise the Debtors and negotiate with lenders with
         respect to potential waivers or amendments of various
         credit facilities;

     (k) Assist in the arranging of Financings (including a DIP
         Financing), including identifying potential sources of
         capital, assisting in the due diligence process, and
         negotiating the terms of any proposed Financing, as
         requested;

     (l) Assist the Debtors in evaluating and executing both a
         Trading Transaction and a Merger Transaction, including
         identifying potential buyers or parties in interest,
         assisting in the due diligence process, and negotiating
         the terms of any proposed Trading Transaction or Merger
         Transaction, as requested;

     (m) Provide testimony in any Chapter 11 case concerning any
         of the subjects encompassed by Blackstone's financial
         advisory services, if appropriate and as required;

     (n) Assist and advise the Debtors concerning the terms,
         conditions and impact of any transaction proposed by
         Blackstone; and

     (o) Provide such other advisory services as are customarily
         provided in connection with the analysis and negotiation
         of any transactions.

For its services in these chapter 11 cases (incorporating
defined terms included in a yet-to-be-made-public Engagement
Letter dated November 24, 2001), Enron agrees to pay Blackstone:

     (a) a $350,000 Monthly Advisory Fee;

     (b) 1.0% of the aggregate value of the Consideration paid on
         consummation of any Trading Transaction, subject to a
         $10,000,000 floor and subject to a $35,000,000 cap;

     (c) a $35,000,000 transaction fee on consummation of any
         Merger Transaction;

     (d) 1.0% of the aggregate consideration paid on consummation
         of any divestiture of specific assets or subsidiaries;

     (e) 0.5% of the total facility size of any Debt Financing
         arranged by Blackstone -- excluding the $1.5 billion DIP
         Facility being arranged by JPMorgan Chase and Citicorp;

     (f) 3.0% of the gross proceeds to Enron from any new Equity
         Financing Transaction; and

     (g) 0.25% of the face amount of all restructured obligations
         under a plan of reorganization, subject to a $35,000,000
         cap. (Enron Bankruptcy News, Issue No. 46; Bankruptcy
         Creditors' Service, Inc., 609/392-0900)

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


EOTT ENERGY: Taps Andrews & Kurth as Special Litigation Counsel
---------------------------------------------------------------
EOTT Energy Partners, L.P., and its debtor-affiliates seek the
Court's authority to retain Andrews & Kurth, LLP as Special
Litigation Counsel to represent the Debtors' interests in the
John H. Roam Litigation involving Pipeline.

The Litigation includes allegations relating to spills and
releases from pipelines in West Texas and New Mexico.  The Jerry
W. Holmes litigation has been consolidated with this Litigation.
Dana R. Gibbs, President and CEO of EOTT Energy Corp., tells the
Court that Pipeline has asserted in the Litigation an
overarching cross-claim against Texas-New Mexico Pipeline
Company.

Andrews & Kurth was initially retained prepetition to represent
the Debtors in the Litigation and the Debtors seek to continue
to utilize Andrews & Kurth's services.

Ms. Gibbs informs Judge Schmidt that Andrews & Kurth also
represents the Debtors with respect to the reclamation claims in
the Owens Corning bankruptcy case and the Debtors seek to
continue to utilize Andrews & Kurth's services to pursue the
Reclamation Claims.

With Judge Schmidt's approval of Andrews & Kurth's retention, in
accordance with Section 330(a) of the Bankruptcy Code,
compensation will be payable to Andrews & Kurth on an hourly
basis, plus reimbursement of actual, necessary expenses incurred
by Andrews & Kurth.  The hourly rates of Andrews & Kurth
professionals are:

     Paul Bohannon              $450
     Carrick Brooke-Davidson     280
     Allison Comment             225
     Sara Galley                 165
     Wade Jensen                 160
     Letha Walker                 85
     Carl Eatmon                  40
     Sandy Stewart                40

Ms. Gibbs reports that the Debtors have paid to Andrews & Kurth
a $12,000 retainer, which is held in Andrews & Kurth's trust
account.  In addition, Andrews & Kurth was paid $577,080 for
pre-bankruptcy services and expenses in connection with the
Debtors' Litigation and the Reclamation Claim.

Paul Bohannon, Esq., a partner with Andrews & Kurth LLP,
discloses that:

     (a) prior to Enron's bankruptcy, Andrews & Kurth served as
         outside counsel for various matters and continues to
         provide legal service to Enron in its bankruptcy
         proceeding in New York.  Andrews & Kurth has not
         undertaken any Enron bankruptcy representations against
         the Debtors;

     (b) In 1995, Andrews & Kurth represented the underwriters in
         connection with the Debtors' initial public offering of
         stock and perform Blue Sky matters in connection the
         same;

     (c) In 1999, Andrews & Kurth represented the Debtors in
         connection with it credit facility associated with its
         initial public offering of stock;

     (d) Andrews & Kurth presently represents the Debtors on
         other litigation that may be subjected to the bankruptcy
         stay, to wit:

         -- Jimmie B. Cooper, et al. v. EOTT in the U.S. District
            Court of New Mexico; and

         -- Lankford v. EOTT in the County Court at Law of
            Midland County, Texas;

     (e) Andrews & Kurth presently represents the Debtors on
         claims that may evolve into litigation or that have been
         resolved subject to possible continuing actions, to wit:

         -- McCasland Claim (New Mexico),

         -- Jimmie T. Cooper Claim (New Mexico),

         -- Red Byrd Claim (New Mexico),

         -- D.K. Boyd Claim (New Mexico),

         -- Durham-Rogers cleanup (New Mexico),

         -- Oil Conservation Division regulatory matters (New
            Mexico),

         -- Darr Angell cleanup matters (New Mexico),

         -- Winnie Kennann cleanup matters (New Mexico),

         -- Jan Anthony cleanup matters (New Mexico),

         -- Railroad Commission of Texas regulatory matters
            (Texas),

         -- Ft. Stockton cleanup matters (Texas),

         -- Diamond Y Springs cleanup matter (Texas), and

         -- Osborne environmental matters (Texas);

     (f) Andrews & Kurth is representing AIG Insurance in its
         surrogated claim, with the knowledge and consent of the
         Debtors, in the Kniffen matter; and

     (g) Andrews & Kurth performed ERISA pension work for the
         Debtors.

Andrews & Kurth believes that none of these matters would
constitute a conflict of interest in its representation of the
Debtors in the Litigation and Reclamation Claims. (EOTT Energy
Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


GENTEK INC: Brings-In Skadden Arps to Prosecute Chapter 11 Cases
----------------------------------------------------------------
GenTek Inc., and its debtor-affiliates need bankruptcy lawyers
to prosecute their Chapter 11 cases.  Matthew R. Friel, GenTek
Inc., Chief Financial Officer, tells Judge Walrath that the
Debtors chose Skadden, Arps, Slate, Meagher & Flom LLP, because
of the firm's extensive experience with, and knowledge of, the
Debtors and their businesses.  Skadden, Arps also has wide
experience and knowledge in debtors' and creditors' rights and
business reorganizations under Chapter 11 of the Bankruptcy
Code.  The Debtors believe that Skadden, Arps' representation is
critical to the success of their reorganization.

Skadden, Arps is expected to:

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

   (b) attend meetings and negotiate with representatives of
       creditors and other parties-in-interest and advising and
       consulting on the conduct of the cases, including all of
       the legal and administrative requirements of operating in
        Chapter 11;

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

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

   (e) negotiate and prepare, on the Debtors' behalf, plan or
       plans of reorganization, disclosure statements and all
       related agreements and documents and taking any necessary
       action on behalf of the Debtors to obtain confirmation of
       those plans;

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

   (g) appear before this Court, any appellate courts, and the
       United States Trustee, and protecting the interests of the
       Debtors' estates before these courts and the United States
       Trustee; and

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

In consideration for the firm's professional services, the
Debtors propose to pay Skadden, Arps in accordance with the
firm's standard hourly rates.  According to Mr. Friel, Skadden,
Arps' bundled rate structure will apply to these cases.  This
means that Skadden, Arps will not be seeking to be separately
compensated for certain staff, clerical and resource charges.
Presently, the hourly rates under the bundled rate structure
range from:

              Bundled Rate    Professionals
              ------------    -------------
              $495 - 725      partners
               240 - 485      counsel & associates
                80 - 195      legal assistants & support staff

The Debtors will also reimburse Skadden, Arps for actual
necessary expenses incurred in connection with their services in
these cases.

The Debtors and Skadden, Arps also agreed to implement a
retainer program pursuant to which the Debtors paid $1,500,000
as initial retainer for the services rendered or to be rendered
by the firm. As of the Petition Date, based on prepetition fees
and costs that have been identified and accounted for, Skadden,
Arps had $1,370,341 remaining in the Retainer.  Those remaining
funds will be applied by Skadden, Arps to pay prepetition fees
and costs that are subsequently identified and accounted for.

Mr. Friel relates that within the one-year period preceding the
Petition Date, Skadden, Arps billed the Debtors $3,980,084 in
aggregate prepetition services.  Of that amount, $2,419,302 is
attributable to prepetition fees and $89,002 to prepetition
expenses that have been identified and accounted for.  During
the same period, the Debtors paid Skadden, Arps $4,008,304
including payment of the Initial Retainer amount.  This also
covered the $28,220 Chapter 11 filing fees.  Accordingly, the
$1,370,341 balance is the amount of the remaining, unapplied
Retainer funds.

Within the one-year period preceding the Petition Date, Skadden,
Arps' books and records show that the Firm received, in April
and July 2002, two payments totaling $12,919 in connection with
legal services rendered prior to October 11, 2002.  According to
Mr. Friel, Skadden, Arps is waiving any claims that the firm
might have in respect of those amounts.

Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom,
LLP, assures the Court that the firm does not represent or hold
any interest adverse to the Debtors, their estates, creditors,
equity security holders, or affiliates, and is a "disinterested
person" within the meaning of 11 U.S.C. Sec. 101(14).  Mr. Chehi
adds that neither Skadden, Arps nor any attorney at the firm:

     -- holds or represents an interest adverse to the Debtors'
        estates;

     -- is or was a creditor, an equity security holder or an
        insider of the Debtors, except that Skadden, Arps
        previously has rendered legal services to the Debtors for
        which it has been compensated;

     -- is or was an investment banker for any outstanding
        security of the Debtors;

     -- is or was, within three years before the Petition Date,
        an investment banker for a security of the Debtors, or an
        attorney for an investment banker in connection with the
        offer, sale or issuance of any security of the Debtors;

     -- is or was, within two years before the Petition Date, a
        director, officer or employee of the Debtors or of an
        investment banker of the Debtors; and

     -- has any connection with:

        (a) any United States District Judge or United States
            Bankruptcy Judge for the District of Delaware; or

        (b) the United States Trustee for the District of
            Delaware or to any known employee in the office.
            (GenTek Bankruptcy News, Issue No. 3; Bankruptcy
            Creditors' Service, Inc., 609/392-0900)


GLOBAL CROSSING: NY Court Approves Amended Disclosure Statement
---------------------------------------------------------------
To the extent unresolved, the U.S. Bankruptcy Court for the
Southern District of New York overrules all objections to Global
Crossing Ltd.'s Disclosure Statement.  Judge Gerber finds that
the Amended Disclosure Statement contains enough information for
creditors to decide whether to vote to support the Plan or vote
to reject it. (Global Crossing Bankruptcy News, Issue No. 25;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


GLOBAL CROSSING: Carries Over 2BB Minutes on VoIP Platform in Q3
----------------------------------------------------------------
Global Crossing announced that the number of minutes carried
over its seamless, global Voice over Internet Protocol platform
-- one of the world's largest -- grew to more than 2.3 billion
minutes during the third quarter of 2002, a 255% increase over
the first quarter.  The growth in traffic from new and existing
customers across the Americas and in Europe is testament to
Global Crossing's reliable, cost-effective voice services over
its global backbone.

"Global Crossing's VoIP platform allows us to bring the
simplicity and elegance of IP solutions to our clients over a
wide geographic area," said Juan Carlos Canto, CFO of LD
Telecom, which delivers enhanced communications solutions to
small and medium enterprises in shared tenant environments in
Latin America.  Canto continued, "We're very pleased with the
service and continue to grow our customer base at a healthy rate
as we bring intelligence to voice networks in underserved
markets."

Voice traffic is routed over Global Crossing's worldwide fiber
optic network using either packet-based VoIP or conventional
Time Division Multiplexing technology.  Both platforms are fully
interoperable.  By managing a VoIP platform over its own
network, Global Crossing delivers a cost-effective, reliable
solution unaffected by public Internet delays and congestion.
This premier VoIP network also provides users with quality
comparable to that of the traditional Time Division Multiplexing
infrastructure.  The VoIP platform's multi-layered architecture
makes it an ideal choice for IP-based applications, built to
satisfy current and future communications needs.

"Our IP network, connecting over 200 cities in 27 countries, is
truly an exceptional asset, and we continue to reap its
benefits, as do our customers," said John Legere, CEO of Global
Crossing.  "We are migrating increasing amounts of our growing
voice traffic onto our VoIP platform, and customers are
experiencing the quality they expect in their voice services
with the added efficiencies of an all-IP environment.  Our
global network is able to address the connectivity needs of
customers today while providing solutions that match their
future requirements."

Global Crossing's suite of voice products gives carrier and
enterprise customers access to switched and dedicated
origination and termination, both nationally and
internationally, as well as long-distance and toll-free
services, with enhanced routing capabilities over Global
Crossing's secure fiber optic network.  Global Crossing's
comprehensive, end-to-end network management system monitors
traffic 24 x 7 for unsurpassed reliability.

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 and coordinated
proceedings in the Supreme Court of Bermuda.  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 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' 9.625% bonds due 2008 (GBLX08USR1),
DebtTraders reports, are trading at 1.5 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=GBLX08USR1
for real-time bond pricing.


GRANT PRIDECO: S&P Keeping Watch on Low-B Credit & Note Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its corporate credit
and senior unsecured note ratings on oilfield services company
Grant Prideco Inc., (BB/Watch Neg/--) on CreditWatch with
negative implications following the company's announced
acquisition of Reed-Hycalog from Schlumberger Ltd., for $350
million. The acquisition, which is expected to close by year-
end, will be funded with about $255 million in cash, $5 million
of assumed liabilities and $90 million of Grant Prideco common
stock, which will be issued to Schlumberger, in accordance with
the terms of the transaction.

Houston, Texas-based Grant Prideco had approximately $220
million of debt as of June 30, 2002.

The CreditWatch listing for Grant Prideco reflects the potential
for lower ratings given the significantly increased pro forma
leverage to complete the acquisition of Reed-Hycalog, a
manufacturer and marketer of drill bit technology and products,
and the company's ability to generate appropriate financial
measures with the current ratings.

"Although the acquisition diversifies the company's product
lines and lowers the volatility of Grant Prideco's cash flow,
Standard & Poor's may downgrade the company's ratings because
the transaction materially increases Grant Prideco's debt burden
during challenging drilling market conditions," said Standard &
Poor's credit analyst Brian Janiak.

The acquisition of Reed-Hycalog should improve Grant Prideco's
business risk profile by adding a business with profitability
throughout the drilling cycle, in contrast to the company's
current businesses that rank among the most volatile in the
oilfield services sector.

The broader product platform and relatively more stable cash
flow generation ultimately could improve Grant Prideco's credit
quality by improving the consistency of its cash flow.  In
addition, longer term, Grant Prideco's cash flow could increase
on a secular basis as it plans to grow the drill bit business
and should realize synergies in technology, manufacturing and
sales throughout the company.

Nevertheless, the acquisition will be funded though an
aggressive use of debt. Grant Prideco effectively is adding
Reed-Hycalog at a 5.0 times debt to EBITDA transaction multiple,
which will stretch the company's near term credit protection
measures.

Standard & Poor's will resolve the CreditWatch listing after
meeting with management to review the recent acquisition and
discuss the company's future strategic, operating, and financial
plans.


HELLER FINANCIAL: Fitch Affirms Low-B Ratings on Fives Classes
--------------------------------------------------------------
Heller Financial Commercial Mortgage Asset Corp.'s mortgage
pass-through certificates, series 1999 PH-1, $151.4 million
class A-1, $535.6 million class A-2, and interest-only class X
are affirmed at 'AAA' by Fitch. In addition, the $22.7 million
class B is affirmed at 'AAA', the $20.2 million class C at 'AA',
the $53.0 million class D at 'A', the $12.6 million class E at
'A-', the $37.9 million class F at 'BBB', the $17.7 million
class G at 'BBB-', the $35.3 million class H at 'BB+', and the
$20.2 million class J at 'BB'. The $7.6 million class K is
affirmed at 'BB-', the $15.1 million class L at 'B', and the
$7.6 million class M at 'B-'. The $18.8 million class N is not
rated by Fitch. The rating affirmations follow Fitch's review of
the transaction, which closed in May 1999.

The rating affirmations reflect the consistent loan performance,
investment grade credit assessments of two loans (9.30% of the
pool) and minimal reduction of the pool collateral balance since
closing. As of the October 2002 distribution date, the pool's
aggregate certificate balance has decreased by 5.3% since
closing, to $955.7 million from $1.0 billion. The certificates
are collateralized by 187 fixed-rate mortgage loans, consisting
primarily of retail (31% by balance), multifamily (25%), and
office (23%) properties, with concentrations in Texas (13%), New
Jersey (10%), and California (10%).

Wachovia Securities, the master servicer, provided year-end 2001
borrower operating statements for 94% of the pool's outstanding
balance. The weighted average debt service coverage ratio for YE
2001 increased to 1.47 times from 1.39x at closing. Ten loans
(3.14%) reported YE 2001 DSCRs below 1.00x. There are currently
no delinquent loans and only one loan (0.31%) in special
servicing. Since Fitch's previous review, the Trust incurred
approximately $1.4 million in losses due to the disposition of
two assets (one hotel and one office).

Fitch reviewed the performance and underlying collateral of the
South Plains Mall (6.58%) and the Station Plaza Office Complex
(2.72%) loans, which both have investment grade credit
assessments. The DSCR for each of these loans is calculated
using borrower financials less required reserves and debt
service payments based on the original balance and Fitch
stressed refinance constant.

The South Plains Mall, located in Lubbock, Texas, consists of
1.1 million sq. ft., of which 1.0 million sq. ft. is collateral
for the loan. Total mall occupancy is 98% as of 6/30/02, which
is flat to the 98% occupancy at closing. The anchors at the
mall, JC Penney, Dillard's, Dillard's Home, Mervyn's, Beall's,
and Sears, have reported YE 2001 sales per sq. ft. that are
generally consistent with the historical performance at the
property. The trailing-twelve-month 6/30/02 DSCR is 1.87x, up
from 1.70x at TTM 6/30/01 and 1.47x at closing.

The Station Plaza Office Complex consists of three office
buildings (320,477 sf) located in Trenton, New Jersey. Property
occupancy is at 100%, which is flat to closing. The largest
tenant is the State of New Jersey, rated 'AA' by Fitch, which
leases 87% of the buildings under a lease expiring in 2017. The
loan will fully amortize by August 2013. The TTM 6/30/02 DSCR is
1.28x, compared to 1.32x at TTM 6/30/01 and 1.36x at closing.

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


HORIZON NATURAL: Agrees to Restructure Pittston Coal Transaction
----------------------------------------------------------------
The Pittston Company (NYSE: PZB) and Horizon Natural Resources
Company have agreed preliminarily, in the face of delays due to
closing conditions not being satisfied, to restructure their
previously announced transaction.

Subsidiaries of Horizon will acquire certain coal mining assets
of subsidiaries of Pittston in West Virginia (including all
active mining operations in West Virginia) and an option to
acquire certain additional properties (including certain coal
reserves in Kanawha and Fayette Counties, West Virginia).
Consummation of the transaction is subject to completion of
negotiation of definitive agreements, the receipt of various
consents and other typical closing conditions. Pittston remains
confident of completing the process of exiting the coal business
this year.

The Pittston Company is a diversified company with interests in
security services through Brink's, Incorporated and Brink's Home
Security, Inc., global freight transportation and supply chain
management services through BAX Global, Inc. and mining and
minerals exploration through Pittston Coal Company and Pittston
Mineral Ventures. Press releases are available on the World Wide
Web at http://www.pittston.comor by calling toll free (877)
275-7488.

As reported in Troubled Company Reporter's October 21, 2002
edition, Horizon Natural Resources retained Robert M. Miller of
Financo, Inc., as its financial advisor to review strategic
options.

Horizon Natural Resources Company (formerly known as AEI
Resources Holding, Inc.) conducts mining operations in five
states with a total of 42 mines, including 27 surface mines and
15 underground mines:

      --  Central Appalachian operations includes all of the
company's mining operations in southern West Virginia and
Kentucky, currently totaling 36 surface and underground mines,
which produced approximately 12.2 million tons of coal (65
percent of total production) during the first six months of
2002.

      --  Western operations includes mining in Colorado,
Illinois and Indiana, currently totaling six surface and
underground mines, which produced approximately 6.6 million tons
(35 percent of total production) during the first six months of
2002.

                          *   *   *

As reported in Troubled Company Reporter's September 30,
edition, Horizon Natural Resources initiated discussions with
holders of its credit facility and will contact senior secured
debt holders, so as to avoid being in violation of one or more
of its debt covenants.


HORSEHEAD: FTI Consulting Serves as Committee's Fin'l Advisors
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of Horsehead
Industries Inc., obtained Court's authority to engage the FTI
Consulting, Inc., as its financial advisors, effective as of
September 3, 2002.

FTI will provide consulting and advisory services to the
Committee and its legal advisor as appropriate and feasible in
order to advise the Committee in the course of these chapter 11
cases, including:

   -- Assistance to the Committee in the review of financial
      related disclosures required by the Court, including the
      Schedules of Assets and Liabilities, the Statement of
      Financial Affairs and Monthly Operating Reports;

   -- Assistance to the Committee with information and analyses
      required pursuant to the Debtors' Debtor-In-Possession
      financing, if any, including, preparation for hearings
      regarding the use of cash collateral and DIP financing;

   -- Assistance with a review of the Debtors' short-term cash
      management procedures;

   -- Assistance with a review of the Debtors' key employee
      retention and other critical employee benefit programs, if
      any;

   -- Assistance and advice to the Committee with respect to the
      Debtors' identification of core business assets and the
      disposition of assets or liquidation of unprofitable
      operations;

   -- Assistance with a review of the Debtors' performance of
      cost/benefit evaluations with respect to the affirmation or
      rejection of various executory contracts and leases;

   -- Assistance regarding the valuation of the present level of
      operations and identification of areas of potential cost
      savings, including overhead and operating expense
      reductions and efficiency improvements;

   -- Assistance in the review of financial information
      distributed by the Debtors to creditors and others,
      including, but not limited to, cash flow projections and
      budgets, cash receipts and disbursement analysis, analysis
      of various asset and liability accounts, and analysis of
      proposed transactions for which Court approval is sought;

   -- Attendance at meetings and assistance in discussions with
      the Debtors, potential investors, banks and other secured
      lenders in this chapter 11 case, the U.S. Trustee, other
      parties in interest and professionals hired by the same, as
      requested;

   -- Assistance in the review and/or preparation of information
      and analysis necessary for the confirmation of a Plan of
      Reorganization in this chapter 11 case;

   -- Assistance in the evaluation and analysis of avoidance
      actions, including fraudulent conveyances and preferential
      transfers;

   -- Assistance with sale efforts and transactions related to
      the debtors assets;

   -- Litigation advisory services with respect to accounting and
      tax matters, along with expert witness testimony on case
      related issues as required by the Committee; and

   -- Render other general business consulting or other
      assistance as the Committee or its counsel may deem
      necessary.

The customary hourly rates charged by FTI personnel anticipated
to be assigned to this case are:

           Senior Managing Directors           $525-595
           Directors / Managing Directors      $370-525
           Associates / Senior Associates      $185-345
           Administration / Paraprofessionals  $ 85-140

Horsehead Industries, Inc., d/b/a Zinc Corporation of America,
the largest zinc producer filed for chapter 11 protection on
August 19, 2002. Laurence May, Esq., at Angel & Frankel, PC
represents the Debtors in their restructuring efforts. When the
Company filed for protection from its creditors, it listed
$215,579,000 in assets and $231,152,000 in debts.


HUNTSMAN POLYMERS: Eliminates $763MM Debt Claims after Workout
--------------------------------------------------------------
On September 30, 2002, Huntsman Company LLC (formerly known as
Huntsman Corporation) and Huntsman Polymers Corporation
completed a debt for equity exchange. Huntsman Company obtained
the required consent of all its bank lenders to complete the
Restructuring on an out-of-court basis. The Restructuring
involved the following:

Equity Interest in Huntsman Holdings

      -- Members of the Huntsman family who owned equity
interests in Huntsman Company and any of its subsidiaries,
together with certain affiliated entities that owned such equity
interests, contributed all their equity interests in Huntsman
Company and its subsidiaries to a newly established holding
company, in exchange for equity interests in Huntsman Holdings.
Huntsman Holdings now indirectly owns all the stock of Huntsman
Company and certain debt securities of Huntsman International
Holdings. The Huntsman Family will continue to have operational
and board control of Huntsman Company, Huntsman Polymers and
Huntsman International Holdings.

      -- MatlinPatterson Global Opportunities Partners, L.P.
(formerly known as CSFB Global Opportunities Partners, L.P.),
and Consolidated Press Holdings Limited held, in the aggregate,
$763 million principal and accrued interest of Huntsman
Company's and Huntsman Polymers' bonds, which were ultimately
exchanged for equity interests in Huntsman Holdings.

Huntsman Company's and Huntsman Polymers' Bonds

      -- Approximately $59 million in principal amount of
Huntsman Company's and approximately $37 million in principal
amount of Huntsman Polymers' bonds not held by GOP and CPH were
reinstated. The non-payment of interest defaults on these bonds
were cured by paying approximately $4.7 million of interest that
had accrued on Huntsman Polymers' bonds to be reinstated since
December 2001 and approximately $5.4 million of interest that
had accrued on Huntsman Company's bonds to be reinstated since
January 2002.

      -- Pursuant to previously adopted amendments to the
indentures governing the Huntsman Company and Huntsman Polymers
bonds, which became effective upon completion of the
Restructuring, most of the restrictive covenants in these
indentures have been eliminated.

Bank Credit Facilities Amendments

      -- Amendments to Huntsman Company's bank credit facilities
were executed and are comprised of the following:

          * A term loan facility maturing in 2007 which is
            secured by a second lien on substantially all the
            assets of Huntsman Company and its domestic
            restricted subsidiaries; and

          * A $275 million priority revolving credit facility
            maturing in 2006. The revolving credit facility
            replaces Huntsman Company's existing $150 million
            supplemental accounts receivable facility, and is
            available for general corporate purposes.

As a result of the restructuring, Huntsman Company has
eliminated $763 million of consolidated debt claims and has
reduced annual interest expense on such debt claims by
approximately $63 million. These interest savings, together with
in excess of $150 million in annual cost reductions over 2000
levels make a combined annual savings of in excess of $210
million for Huntsman Company.

A subsidiary of the world's largest privately held chemical
firm, Huntsman Corporation, Huntsman Polymers produces commodity
and performance polymers. Its amorphous polymers are used in
adhesives, sealants, and wire. The company also makes
polyethylene and polypropylene, used in a wide variety of
applications. In addition, it's a top maker of expandable
polystyrene resins, produced as small beads and used in drinking
cups, packaging, and insulation. Huntsman Polymers has reported
growing losses since 1997, partly because of higher energy
costs. On February 27, 2002, three creditors of Huntsman
Polymers filed an involuntary Chapter 7 petition in the U.S.
Bankruptcy Court for the District of Delaware.


HYDROMET ENVIRONMENTAL: Defaults on Two Convertible Debentures
--------------------------------------------------------------
Hydromet Environmental Recovery Ltd., (TSX Venture Exchange:
YHM.A) is in default on $2,244,300 of convertible debentures
issued in June 2001 and a further $1,260,000 of convertible
debentures issued in March 2002.  The Company has received a
Notice of Foreclosure on the Newman, Illinois plant from the
$2,244,300 debenture holders, and a demand for repayment in full
from the $1,260,000 debenture holders.

The Company also announces that a forbearance Agreement has been
reached with two of the three debenture holders representing
$1,510,000 of the $2,244,300 debenture total, and all of
$1,260,000 debenture holders, whereby these debenture holders
will not accelerate their legal actions against the Company
prior to January 10, 2003, thereby granting the Company the
necessary time to seek regulatory approval and shareholder
approval for a change in the terms and conditions of the present
debentures.  If the shareholders of the Company and regulators
approve the re-negotiated terms and conditions of the present
debentures, then the debenture holders agree to accept these new
terms and conditions for their debentures, thereby correcting
the current default situation.  The Company has agreed to pay a
one-time fee of $220,000 for this Forbearance Agreement, with
the fee being added to the present debenture total outstanding.

The Board of Directors of the Company proposes to call an
Extraordinary Shareholder Meeting as soon as possible, but in
any event on or before January 10, 2003, to seek shareholders
approval for:

1. A one for six share consolidation.

2. Approval of new conversion terms and exercise dates on the
    $3,504,300 of debentures currently in default.

3. Approval for the issuance of up to $995,000 in new
    convertible debentures.

4. Any other issues relating to the above matters.

The Company also announces that it has received and accepted,
subject to regulatory approval, and if required, shareholder
approval, an Offer to Finance, for a minimum of $380,000 and a
maximum of $995,000, for the purchase of convertible debentures.
The proposed debentures would be convertible into units of
Hydromet at $0.10 per unit on a post consolidation basis of 1:6.
Each unit would be 1 Class A common share and 1 share purchase
warrant.  There would be a 10% finders fee payable, to an arms
length party, on all new funding raised.

The terms of the agreement for the old debentures would be for
an extension of the conversion dates for an additional three
year period at a conversion price of $0.20 per share with the
warrants to be exercisable for a period of two years at $0.21
per share.

The Company also announces that Carolyn Morgan, Charles
Zimmerman and Charles De Rohan have resigned from the Board of
Directors of the Company, to allow the Company the opportunity
to add new Directors with expertise in dealing with the
difficult challenges facing the Company at this time.

The Company also announces that James E. Lalonde, presently in
charge of Investor Relations for the Company, has been elected
to the Board of Directors.


HYPERDYNAMICS: Independent Auditors Express Going Concern Doubt
---------------------------------------------------------------
Out of necessity resulting from a dramatic downturn in the IT
services and related communications  industries, and the design
of a basic diversification strategy, HyperDynamics Corporation
transitioned  its focus this year. In the most general sense, it
leveraged its resources while moving away from the troubled IT
services market. It has diversified to a more clear-cut vertical
focus in the arena of seismic data management within the oil and
gas exploration industry. This shift of focus started with  the
acquisition of SCS Corporation in May of 2001. The result is the
addition of growing and  developing oil and gas industry based
service revenues associated with seismic data management.

The necessity to vertically focus and diversify began when the
Company experienced serious problems  in the transition
regarding the time it took for its mission critical fiber to be
installed at the new facility in 2001. HyperDynamics encountered
unforeseen delays in moving into its new facility while the
entire ITSP industry was encountering major difficulties. The
need for vertical diversification away from general ITSP
services was accented dramatically during the year with the
literal downfall of so many once viable communications companies
including such name brands as Worldcom, as one example.

Revenues decreased to $355,628 for the year ended 2002, from
$426,601 for 2001.  The 16.7 % decrease  was due to the
transitioning from the ITSP services and refocusing and starting
up new contracts in the area of the Company's current focus of
seismic data management services.  Revenues for general IT
services were significantly reduced during the year because of
difficulties related to the implementation of the ITSP business
model.  Additionally, new business contracts in the oil and gas
industry were slow to begin.  However, the Company expects to
deepen its revenue base with the creation and marketing of the
NuData (TM) Management System, which began in early fiscal 2003,
and with seismic data transcription services.

Cost of revenues decreased to $526,197 (148% of revenue) for the
year ended 2002, from $919,538 (215% of revenue) for 2001. The
reason for the significant decrease in cost of sales is related
directly to the decrease in related revenues and the reason cost
of revenues is more than revenues reflects management's decision
to keep core operational infrastructure in place and personnel
on staff during the downturn of the IT services business and
ramp up of its seismic data management services in transition.
The cost of revenues is beginning to decrease as a percentage of
revenues compared to 2001 based on gradually increased service
revenues with higher contribution margins in 2002.

Selling, General and Administrative expenses increased to
$2,832,667 (796% of revenue) for the year ended 2002, as
compared to $2,339,178 (548% of revenue) for 2001.  Consulting
expenses increased to $1,474,432 in 2002 from $380,849 in 2001.
This was primarily due to $1,392,500 in consulting expenses
incurred for product development and sales and marketing for the
Company's new tape transcription  services that were not there
last year. These expenses are not expected to continue at this
level on  an ongoing basis. Also, accounting expenses increased
120% to $58,480 in 2002 from $26,625 in 2001. The increase was
primarily due to increasing complexities and requirements of the
reporting and the hiring of a part-time in-house accounting
consultant. Legal fees dropped 90.46% to $94,749 for 2002
compared to $994,053 for 2001. The decrease was due to the fact
that last year the Company instigated a major lawsuit and this
year those expenses have returned to a more normal level in
2002. Rent increased 55% to $286,701 for 2002 compared with
$184,567 in 2001. The increase in rent was due primarily to the
fact that the company moved into its new leased facility during
2001.  Additionally, depreciation and amortization expense
increased to $250,808 from $122,144 due two factors:
HyperDynamics charged a full year of depreciation and
amortization  in 2002 for the leasehold improvements as opposed
to 3 months in 2001 and it changed the estimated life for the
leasehold improvements from ten years to five years.

The Company's net loss was $3,005,271 for the year ended 2002,
or $0.18 per share, compared to a net loss of $2,809,183, or
$0.21 per share for 2001. The net loss available to shareholders
was $3,180,866. This amount includes the deduction for preferred
stock dividends.  The Company says the negative  results are due
to the factors discussed above.

At June 30, 2002 the Company's current ratio of current assets
to current liabilities was .17.  This compares to .20 for 2001.
It remains management's priority to achieve cash flow from
operations as  quickly as possible. It is critical that
HyperDynamics obtain additional working capital so that it can
continue to meet current cash obligations while it continues to
improve cash flow from operations. It is important to note
however, that deeper analysis of the current ratio reveals
several current obligations that while they reduce the current
ratio, there is no requirement to use cash to satisfy the
obligation. These items include Accrued salaries payable to
officers, Deposits, Dividends Payable,  and Dividends payable to
related party.  Adjusting these amounts not requiring cash would
calculate an adjusted current ratio of .61.

HyperDynamics has been operating with a cash deficit this entire
last year. The Company has taken steps to minimize cash
requirements including the officer's agreement to accept notes
from the  Company in lieu of cash payments for their salaries.
The cash flow statements only show a 6.7% decrease in cash flow
used by operations from 2001 to 2002 (-$881,272 and -$821,822
respectively). While this is a small improvement for the year as
a whole, with cash conservation steps put in place by management
and increasing contribution margins beginning in April 2002, the
Company indicates that it is now  making significant progress in
reducing and ultimately eradicating negative cash flow from
operations. For example, the monthly average of cash used by
operations for fiscal year end 2002 was $68,490 per month.
However, for the  first  nine months of the fiscal year the
average cash used from operations on a monthly basis was $83,989
per month and for the last three months of the fiscal year the
average cash used by operations was approximately $21,972 per
month showing a significant positive trend.

As a public company, the health of the Company's market is
paramount to be able to raise critical working capital and
bridge capital. During continued tough times such as this year,
HyperDynamics only source for obtaining critical capital has
been through its ability to place  private investments with
accredited investors, for restricted stock from several of its
significant long-term shareholders and also from some exercises
of warrants and options. This fiscal year $690,800 was raised as
proceeds from sale of common stock.  Without these funds paid
in, the Company would  have not been able to reasonably meet its
current obligations this last fiscal year.

Now, based on the progress of its most significant tape
conversion contract implemented in April 2002, SCS Corporation,
and other sales forecasted, HyperDynamics has made significant
progress towards cash  flowing from operations.  Based on
contracts in hand, being currently performed, and forecasted
sales  for significant projects associated with the NuDataTM
Management System, HyperDynamics expects to  improve cash flow
operations for the second quarter of fiscal year end June 30,
2003.

In order to bridge itself to a new level of operational success,
management is planning to raise another $250,000. On September
12, 2002, the Company signed a stock subscription agreement to
sell, on a best efforts basis, up to $250,000 of its restricted
144 common stock to IC Investments LTD at $.23 per share.  As of
October 10, 2002 it has raised $10,000 from this agreement.

The Company could obtain additional capital upon the exercise of
previously issued in the money  outstanding warrants and options
for common stock.

Notwithstanding the above, the Company's independent auditors
have issued the following statement in the Auditors Report dated
September 13, 2002: "HyperDynamics has suffered recurring losses
from operations which raises substantial doubt about its ability
to continue as a going concern."


IFCO SYS: S&P Withdraws Junk-Rated Bank Loan over Restructuring
---------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its double-'C' bank
loan rating on IFCO Systems N.V.'s $178 million secured bank
credit facility, as the company is currently in the process of
restructuring the facility, which will likely result in
impairment to current holders of the facility.

At the same time Standard & Poor's withdrew its corporate credit
and subordinated debt ratings on the company, which had been
lowered to 'D' on March 15, 2002, after IFCO failed to make its
interest payment on its 10.625% senior subordinated notes due
2010.


KELLOGG COMPANY: Working Capital Deficit Tops $981MM at Sept. 28
----------------------------------------------------------------
Kellogg Company (NYSE: K) said it generated accelerated sales
and profit growth in its third quarter, resulting in net
earnings that exceeded its previous guidance.

Reported net earnings were $203.5 million, compared to last
year's $150.3 million.  The year-ago quarter's EPS included
$0.03 of adverse impact from specific activities related to
integrating Keebler Foods, as well as $0.08 of amortization.
(The Company adopted SFAS No. 142 in 2002, eliminating most of
its amortization on a prospective basis.)  Excluding these
items, EPS in the third quarter of 2001 was $0.48.

At September 28, 2002, the Company's balance sheets show a
working capital deficit of about $981 million.

"The changes we made to our Company last year were expected to
create accelerated growth in 2002, and this acceleration
continued in the third quarter," said Carlos M. Gutierrez,
Kellogg's chairman and chief executive officer.  "Our 'Volume to
Value' initiatives drove an acceleration in internal net sales
growth, an expansion in gross profit margin, and increased
reinvestment in brand-building.  Meanwhile, our principle of
'managing for cash' continued to result in strong cash flow and
enhanced financial flexibility.  The net result was another
quarter of quality earnings growth."

On a comparable basis, the growth rates for net sales, operating
profit, and EPS were 7%, 15%, and 2%, respectively.  This basis
adjusts year-ago sales and profit to exclude the impact of
factors associated with the integration of Keebler, the
amortization of intangible assets eliminated by SFAS No. 142,
results attributable to the since-divested Bake-Line Products,
and a difference in shipping days created by changing the
interim reporting periods for all business units to uniform 13-
week quarters.  This basis adjusts year- ago EPS to exclude only
the integration impact and the amortization eliminated by SFAS
No. 142.  On a reported basis, net sales were down 2%, primarily
reflecting a fewer number of shipping days, while operating
profit and EPS were up 20%, and 32%, respectively, in part
because of integration costs in the year-earlier quarter and
this year's SFAS 142 elimination of amortization.

The comparable-basis net sales gain of 7% represents an
acceleration of a strong trend that began in late 2001.  Best of
all, this growth was broad- based: U.S. retail cereal was up 6%
on a comparable basis, U.S. retail snacks increased 5%, and the
other U.S. businesses collectively posted an 11% gain.
International grew over 6%, or 5% in local currencies.

"Our sales growth featured continued strong contribution from
mix and average pricing in virtually every business and market,"
said Mr. Gutierrez "This performance reflected improved
execution of innovation and marketing, as well as the Company's
focus on adding value for consumers, rather than discounting
prices."

During the quarter, gross profit margin was up nearly a full
percentage point, excluding value-added promotions that are now
included in cost of goods sold.  Mr. Gutierrez commented, "A
priority for us in 2002 has been to grow our gross profit
margins to levels that allow us to reinvest more in brand-
building.  In the third quarter, this gross profit margin
improvement was again driven by higher sales, an improved sales
mix, and cost savings, and we again increased our advertising
and promotion investment."

Cash flow from operating activities less capital expenditures
was $456 million in the quarter, which was well above the year-
ago period's unusually strong $361 million.  Through the first
nine months of 2002, cash flow is up more than 33% year-over-
year.  This improvement has been driven by higher earnings,
increased discipline in capital expenditure, and continuous
reductions in working capital as a percentage of sales.  Mr.
Gutierrez said, "Debt reduction remains our priority for cash
flow.  However, we did begin to repurchase shares in the third
quarter to offset the dilutive impact of exercised options.  In
addition, our cash flow and financial flexibility have improved
enough that we are considering investing cash into our pension
funds, to provide better security for our earnings and retirees
going forward."

The Company reiterated its EPS guidance of $1.73 for the full
year 2002. Kellogg also indicated that in 2003, strong
underlying business momentum, improved sales mix, and
productivity initiatives should more than offset higher
commodity costs and employee benefits expense.  As a result,
Kellogg expects to achieve its goals of low single-digit net
sales growth, mid-single- digit operating profit growth, and
high single-digit EPS growth in 2003, translating into net
earnings of approximately $1.86 - 1.90 per share.

"The goal of 2002 was to accelerate our growth, and we have
clearly attained that acceleration, as evidenced by our strong
third quarter results," concluded Mr. Gutierrez.  "This
performance is attributable to a better business model, enhanced
capabilities, and improved execution.  Therefore, we are
confident that we can carry this momentum into 2003 and achieve
our targeted growth, even despite cost challenges."

With 2001 sales of about $8 billion, Kellogg Company is the
world's leading producer of cereal and a leading producer of
convenience foods, including cookies, crackers, toaster
pastries, cereal bars, frozen waffles, meat alternatives, pie
crusts, and ice cream cones.  The company's brands include
Kellogg's, Keebler, Pop-Tarts, Eggo, Cheez-It, Nutri-Grain, Rice
Krispies, Murray, Austin, Morningstar Farms, Famous Amos,
Carr's, Plantation, Ready Crust, and Kashi.  Kellogg products
are manufactured in 19 countries and marketed in more than 160
countries around the world.  For more information, visit
Kellogg's Web site at http://www.kelloggs.com


KENTUCKY ELECTRIC: Will Defer $1.5MM Payment on 7.66% Sr. Notes
---------------------------------------------------------------
Kentucky Electric Steel, Inc., (Nasdaq:KESI) has entered into an
agreement with the holders of its 7.66% Senior Notes due
November 1, 2005 to defer the $1.5 million principal payment due
under the notes from November 1, 2002 to January 2, 2003. In
addition, the Company agreed with the lenders under its $18
million revolving line of credit to increase the advance rates
under the revolving credit agreement. The amendment to the
revolving credit agreement provides that the borrowing base will
be the sum of (a) 85% of the Company's net outstanding eligible
accounts receivable and (b) the lesser of $14 million or the sum
of 60% of the net security value of eligible scrap and raw
materials inventory, 50% of the net security value of eligible
billet inventory, and 70% of the net security value of eligible
finished goods inventory.

Each of the agreements announced today provides that on or
before December 16, 2002, the Company must deliver a proposed
agreement to the noteholders and to the lenders under the
revolving credit facility regarding a restructuring of the
Company's indebtedness or other transaction that would enable
the Company to repay the notes and the revolver in full.

Kentucky Electric Steel, Inc., is a publicly held company which
operates a specialty steel mini-mill, manufacturing special
quality steel bar flats for the leaf-spring suspension, cold
drawn bar conversion, truck trailer support beam, and steel
service center markets. Kentucky Electric Steel, Inc.'s common
stock (symbol: KESI) is traded on the NASDAQ Small Cap Market.


KMART CORP: Seeks Okay to Assume Samuel Aaron Consignment Pact
--------------------------------------------------------------
Like M. Fabrikant, Mark A. McDermott, Esq., at Skadden, Arps,
Slate, Meagher & Flom, tells the Court that Samuel Aaron
International, Inc., also provides Kmart Corporation with
moderately priced diamond and precious gem jewelry, like diamond
rings, earrings, and necklaces, on a "perpetual" consignment
relationship.

"This works to the advantage of retailers, such as Kmart,
because the consignment relationship affords a singularly unique
form of financing, namely, the ability of the retailer to obtain
goods without having to pay for them until after they have been
sold to a customer," Mr. McDermott says.

Under that relationship, Samuel Aaron grants the Debtors an
initial, agreed-upon amount of consignment "credit."  As of the
Petition Date, Samuel Aaron has provided the Debtors $2,894,816
in consignment credit.  Through this arrangement, the Debtors
acquired $2,894,816 in consigned jewelry without having to pay
for it until the Agreement is terminated.  Also, the Debtors
could always acquire from Samuel Aaron additional jewelry, but
they must pay for amounts in excess of the credit in accordance
with ordinary trade terms.  Before the Petition Date, the
Debtors had fully utilized the amount of the credit provided to
them.  In particular, Mr. McDermott recounts that the Debtors
had obtained from Samuel Aaron consigned inventory of
$2,894,816.  It is estimated that a total of $1,089,041 of that
inventory had already been sold prepetition, with an additional
$1,805,775 of the inventory on hand.

Being trade partners for more than a decade now, the Debtors and
Samuel Aaron have agreed to amend the consignment agreement on
October 1, 2002.  Samuel Aaron has agreed to increase the
Debtors' consignment credit amount by $1,450,000 from $2,894,816
to $4,347,000.  This credit will persist until the consignment
relationship is either altered or terminated.

"Once the additional consignment credit amount is in place,
Kmart will not owe Samuel Aaron any money until Kmart receives
more than $4,347,000 of merchandise.  As a result, Kmart can
carry and earn revenues on $4,347,000 of merchandise without
paying Samuel Aaron anything," Mr. McDermott emphasizes.

The Agreement will continue until either of the parties elects
to terminate the Agreement on 60 days notice.  No party,
however, may terminate the Agreement until after March 31, 2003.
Samuel Aaron also may not terminate the Agreement during the
Debtors' fiscal fourth quarter.

In the event a party issues a notice of termination, according
to Mr. McDermott, Samuel Aaron must continue to provide
merchandise on consignment for the 60 days preceding the
termination.  After the termination, the Debtors will have 60
more days to continue to sell the Consigned Merchandise.  In
addition, within 30 days after the Closeout Period, the Debtors
may elect to return some or all of the Consigned Merchandise for
credit.  If any amount remains due, then the Debtors will pay
that amount.  The Debtors also, at their sole discretion, may
return Consigned Merchandise for credit throughout the term of
the Agreement.

Thus, the Debtors seek authority to assume the consignment
agreement, as amended.

Mr. McDermott contends that the parties' consignment agreement,
as amended, puts the Debtors in a vantage position; assuming the
agreement enhances the Debtors' ability to provide good quality,
moderately-priced jewelry to their customer and, more
importantly, to increase their sales.  Mr. McDermott reiterates
that the Debtors will receive another $1,450,000 in additional
financing.  The assumption of the agreement also cements a long-
standing relationship with a key jewelry consignor.

Mr. McDermott also reasserts that the Debtors will not have to
"cure" any prepetition defaults, as a condition of the
assumption.  Hence, the Debtors are saved from immediately
paying the $1,089,041 owed to Samuel Aaron on account of
consigned jewelry sold but not paid for prepetition. (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.


LEGATO SYSTEMS: Red Ink Continues to Flow in Third Quarter 2002
---------------------------------------------------------------
LEGATO Systems, Inc. (Nasdaq:LGTO), a worldwide leader in
enterprise content and storage management software, announced
financial results for its third quarter of 2002.

Revenues for the third quarter of 2002 were $68.1 million as
compared to $61.6 million for the second quarter of 2002 and
$57.0 million for the third quarter of 2001.

Net loss, excluding certain items, for the third quarter of 2002
was $5.1 million, as compared to a net loss of $7.6 million for
the second quarter of 2002, and a net loss of $7.5 million for
the third quarter of 2001. The excluded items consist of the
amortization of intangibles (net of tax) in all periods, the
establishment of a valuation allowance against deferred tax
assets in the third quarter of 2002, the write-off of in-process
research and development (net of tax) in the second quarter of
2002, and a reversal of restructuring charges (net of tax) in
the third quarter of 2001. A reconciliation of net loss per
generally accepted accounting principles to this pro forma net
loss is included on the consolidated statements of operations
attached.

Net loss per GAAP for the third quarter of 2002 was $126.2
million, as compared to a net loss of $45.9 million for the
second quarter of 2002, and as compared to a net loss of $13.0
million for the third quarter of 2001. During the third quarter
of 2002, we took a charge to earnings of $119.2 million to
provide a full valuation allowance against our net deferred tax
assets.

For the nine months ended September 30, 2002, the Company
reported revenue of $185.3 million as compared to revenue of
$180.6 million in 2001. Net loss, excluding certain items, was
$18.5 million, as compared to a net loss of $12.4 million in
2001. The excluded items consist of the items listed above plus
a litigation settlement charge (net of tax) in 2002 and a gain
on sale of an equity investment (net of tax) in 2001. For the
nine months ended September 30, 2002, net loss per GAAP was
$218.8 million, as compared to a net loss of $33.6 million in
2001.

At September 30, 2002, the Company's balance sheets show that
its total current liabilities exceeded its total current assets
by about $19 million.

"LEGATO is tracking to deliver profitable growth as we close out
the fourth quarter of 2002," said David B. Wright, chairman and
CEO of LEGATO Systems, "The ongoing expansion of the LEGATO
franchise through channel partners, global resellers and direct
sales is proof positive that our customers are benefiting from
the ROI their budget-constrained IT environments demand today.
Our commitment to the archive, retrieval and recovery of vital
content, applications, and information is why LEGATO continues
to be a growing storage software leader."

"Revenue growth and cost synergies were our focus for the third
quarter, and our financial performance is a result of this
focus," said Andy Brown, CFO of LEGATO Systems, "During the
final quarter of 2002 we are forecasting revenue growth between
8 to10 percent. We are also expecting to be cash flow neutral to
positive during the fourth quarter."

LEGATO Systems, Inc., (Nasdaq:LGTO) delivers worldwide
enterprise class software solutions and services that keep the
world's business-critical information and applications
available. With a direct sales force and through strategic
partnerships and alliances, LEGATO delivers the advantage of
business continuance through enterprise automation with
information protection, application availability as well as
content, message and storage management solutions. The company's
corporate headquarters are located at 2350 West El Camino Real,
Mountain View, CA 94040 650/210-7000, fax: 650/210-7032, Web
site: http://www.LEGATO.com


LIONBRIDGE TECHNOLOGIES: Working Capital Deficit Widens to $4MM
---------------------------------------------------------------
Lionbridge Technologies, Inc., (Nasdaq: LIOX) announced
financial results for the quarter ended September 30, 2002.

Financial highlights for the quarter include:

      * Revenues of $33.9 million, an increase of 15% compared to
revenue of $29.5 million for the second quarter of 2002 and an
increase of more than 30% compared to revenue of $25.9 million
for the third quarter of 2001.  This also represents an increase
over previously provided Company guidance.

      * Earnings before interest, taxes, depreciation and
amortization (EBITDA) of $1.8 million and a net loss of $246,000
on a GAAP basis. The Company also reported a net loss of $0.01
per share based on 31.7 million weighted average common shares
outstanding.  This compares to a net loss of $0.25 per share for
the third quarter of 2001, based on 30.8 million weighted
average common shares outstanding.

      * During the quarter, Lionbridge acquired eTesting Labs, a
small subsidiary of Ziff Davis Media that provides a range of
usability and performance testing services that complement the
Company's VeriTest testing and certification offerings.

      * Excluding losses related to the eTesting Labs
acquisition, the Company reported EBITDA of $2.1 million and
positive net income of $234,000.

Lionbridge's working capital deficit widens to about $4 million
at September 30, 2002.

"Our Q3 results demonstrate that Lionbridge has hit an
inflection point of growth and profitability.  Our strong year-
on-year and quarter-on-quarter organic growth is coming from
customers in both the technology and non- technology segments,"
said Rory Cowan, CEO, Lionbridge.  "We are hitting the numbers
we gave over a year ago and we are doing it the old-fashioned
way - by reducing costs and increasing revenues.  Our ability to
deliver on these expectations shows the resilience of our
business model and proves that Lionbridge has become the partner
of choice for multilingual business process outsourcing."

Lionbridge continued to grow revenue from its top customers.
During the quarter, revenue from the Company's top ten customers
grew 23% compared to the prior quarter.  The Company's strong
recurring revenue was complemented by several new contracts from
leading global companies.

"While the losses associated with the eTesting Labs acquisition
were not in our plans or projections for the second half of this
year, the acquisition presented an immediate, high-value
opportunity for us to enhance our VeriTest business in growth
areas such as usability and performance testing.  As we have
done with other small acquisitions, we expect to get eTesting
Labs integrated into our core business quickly."

Lionbridge also strengthened its fiscal 2002 revenue guidance by
stating that it expects revenue in the upper range of the $115 -
120 million guidance it previously provided, with estimated $5-7
million of operating EBITDA.  The Company also confirmed its
plan for operating profitability, excluding losses related to
the eTesting Labs acquisition, in the second half of 2002.  The
Company also stated that it has increased confidence in its 2003
revenue guidance of approximately $130 million, which would
yield EBITDA in the $12 million range and GAAP net income of
approximately $5 million.

Lionbridge Technologies, Inc., provides solutions for worldwide
deployment of technology and content to Global 2000 companies in
the technology, life sciences and financial services industries.
Lionbridge testing and compatibility services, globalization
solutions, and multilingual content management technologies help
clients reduce cost, speed time to market, and ensure the
integrity of global brands.  Based in Waltham, Mass., Lionbridge
maintains facilities in Ireland, The Netherlands, France,
Germany, China, South Korea, Japan, Brazil and the United
States. To learn more, visit http://www.lionbridge.com


LTV CORP: Varco Pruden Selling Miller Interests to Fitex S.A.
-------------------------------------------------------------
Debtor Varco Pruden International, Inc., notifies the Court that
it intends to sell and assign its interests in Miller Varco
Pruden S.A., a corporation organized under the laws of
Argentina, to Fitex S.A.

(1) The property to be sold consists of:

      (a) all of VPI's equity and other attendant interests in
          MVP; specifically being;

          -- 3,640,000 Class B shares of MVP held by VPI; and

          -- all rights of any nature in relation to MVP that
             VPI may have, which rights may entitle VPI to
             receive any shares of MVP of any nature
             whatsoever, or to participate in any way in
             MVP's net worth, business or assets; and

      (b) an unsecured claim that VPI holds against MVP in the
          insolvency proceedings of MVP filed in the Civil and
          Commercial Court No, 19 of the City of La Plata,
          Province of Buenos Aires, Argentina, which has been
          accepted by the court in the MVP Insolvency Proceedings
          in the amount of US $954,266.51, including all
          accessories to the VPI Credit, as well as all rights
          stemming from the VPI Credit, including but not limited
          to any rights that VPI may have in the MVP Insolvency
          Proceedings.

(2) VPI and Fitex have business relationships by virtue of the
     unsecured claim, and other past business relationships among
     the parties.

(3) The cash purchase price for the Acquired Interests will be
     $2 in the aggregate ($1 as consideration for the Acquired
     Interests assigned by two agreements).

(4) The parties holding liens or other interests or potential
     interests in the Acquired Interests, to the extent known by
     VPI, are The Chase Manhattan Bank and Abbey National
     Treasury Services plc.  VPI believes that all these liens or
     interests can be extinguished, will be waived at the time of
     the sale, or are capable of monetary satisfaction.

(5) In VPI's view, the proposed sale does not require the
     consent of its postpetition lenders. (LTV Bankruptcy News,
     Issue No. 38; Bankruptcy Creditors' Service, Inc., 609/392-
     00900)


M. A. GEDNEY: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: M. A. Gedney Company
         2100 Stoughton Avenue
         Chaska, Minnesota 55318

Bankruptcy Case No.: 02-83631

Type of Business: Manufacturer and marketer of acidified food
                   Products.

Chapter 11 Petition Date: October 22, 2002

Court: District of Minnesota

Judge: Nancy C. Dreher

Debtor's Counsel: William I. Kampf, Esq.
                   Kampf & Associates, P.A.
                   901 Foshay Tower
                   821 Marquette Avenue
                   Minneapolis, MN 55402
                   Tel: 612-339-0522

Total Assets: $15,371,257

Total Debts: $28,954,441

Debtor's 20 Largest Unsecured Creditors:

Entity                                            Claim Amount
------                                            ------------
Texana Pickle Producers                               $802,476
Frank Gonzales
504 S Pleasantview Drive
Box 1013
Weslaco TX 78596
Tel: 956-968-5251

Marbran USA LC                                        $565,400
Carlos Garza
200 S 10th St, Ste 1104
McAllen TX 78501
McAllen TX 78501
Tel: 956-630-2941

Brun Processed FDS                                    $467,645
Guillermo Brun
Colima Mexico 28970
Brun Processed FDS
Colima Mexico 28970

The Revere Group                                      $227,105

Plastican                                             $189,380

Falkner Produce                                       $166,314

PeopleSoft USA                                        $132,483

Burns Philip Food Inc                                  $99,865

Marketing Midwest                                      $70,875

Advantage Sales & Marketing                            $66,440

James P. Smith & Co Inc.                               $65,355

C R England Inc.                                       $61,886

Miller & Smith Foods                                   $58,930

Donald F. Dahlke                                       $58,914

Rea-D-Pak Foods Inc.                                   $54,720

Myakka Brokers                                         $53,006

Smyth Company Inc.                                     $51,806

Masterson Personnel Inc.                               $48,999

Letica Corporation                                     $48,445

Sunoliva Comercio Y Servicios                          $45,486


MINNETHAN LAND: Case Summary & 3 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Minnethan Land Investors Company
         c/o Donald Altman
         Louis Sternbach & Company
         1333 Broadway
         Suite 516
         New York, NY 10018
         Tel: 212 695-6660

Bankruptcy Case No.: 02-15348

Chapter 11 Petition Date: October 28, 2002

Court: Southern District of New York (Manhattan)

Judge: Robert D. Drain

Debtor's Counsel: Scott R. Kipnis, Esq.
                   Hofheimer Gartlir & Gross, LLP
                   530 5th Avenue
                   9th Floor
                   New York, NY 10036
                   Tel: (212) 897-7898
                   Fax : (212) 897-4999

Estimated Assets: $10 to $50 Million

Estimated Debts: $1 to $10 Million

Debtor's 3 Largest Unsecured Creditors:

Entity                                            Claim Amount
------                                            ------------
Corona Meadow Realty Corp.                          $7,600,000
c/o Coby Housing Corp.
c/o Hartman & Craven LLP
Mark R. Kook, Esq.
460 Park Avenue
New York, NY 10022
212-753-7500

STI Realty Corp.                                    $2,000,000
c/o Coby Housing Corp.
c/o Hartman & Craven LLP
Mark R. Kook, Esq.
460 Park Avenue
New York, NY 10022
212-753-7500

Anderson Kill & Olick,                                $250,000
  P.C.
Mark Weyman, Esq.
1251 Avenue of the Americas
New York, NY 10020
212-278-1000


MIRANT: Resolves Issues re Electricity Generation in Philippines
----------------------------------------------------------------
Mirant (NYSE: MIR) has successfully resolved all outstanding
issues related to Mirant's electricity generation in the
Philippines through a bilateral agreement between the company,
the Philippine Department of Energy and the Power Sector Assets
and Liabilities Management Corporation (PSALM).  The agreement
upholds the sanctity of the existing power contracts between
Mirant and the National Power Corporation, the state-run agency
that purchases power for the Philippines.

This agreement includes the following points:

      *  Mirant will decrease by five percent the amount of power
it will provide from its Pagbilao plant and sell to Napocor
under the existing contract, a reduction of approximately $10
million in annual pre-tax revenue.  As a result, Mirant will
have more opportunity to sell additional power generated at
Pagbilao to prospective industrial and commercial customers
through its energy supply business.

      *  The agreement clarified the number of days allowed for
planned outages and unplanned outages related to Mirant's
Pagbilao plant.  This will reduce the potential for penalty
payments to Napocor.

      *  Regarding Mirant's Navotas I and II plants, Mirant will
buy the facilities from Napocor for approximately $22 million
and sell the output to prospective industrial and commercial
customers through its energy supply business.  Control of these
plants had previously been planned to transfer to the government
in 2003 and 2005, respectively.

Napocor will pay Mirant approximately $10 million in 2002 to
cover the balance of the capacity fees over the remaining
contract life.

"Mirant's existing contracts with Napocor are legally sound and
will remain in effect," said Rick Kuester, senior vice
president, international, Mirant.  "The Philippine government
asked that we work with them to resolve power price and
reliability concerns.  Under the voluntary agreement, Mirant's
operational position in the Philippines is reaffirmed and
strengthened, while future energy costs for the Philippines will
be curtailed.  Mirant looks forward to continuing its operations
in the Philippines under this mutually beneficial agreement."

This bilateral agreement will allow Mirant to sell additional
power through its energy supply business, and to continue to
provide private sector assistance in support of the Philippine
government's Project Beacon, a program to provide complete
electrification of all Philippine villages by 2006.

Mirant entered the Philippines in 1997 and invested in the
expedited development of new power generation.  Filipino
consumers and industry continue to benefit from the electricity
that Mirant power plants generate.

Mirant currently operates seven separate power plants in the
Philippines with a combined generation of approximately 2,000
megawatts.

Mirant is among the world's largest competitive energy developer
and providers. Mirant owns or controls 22,184 MW of electricity
generation capacity in the U.S., the Caribbean, Latin America,
and Asia. Visit http://www.mirant.comto learn more about the
Company.

                          *    *    *

As reported in Troubled Company Reporter's October 23, 2002
edition, Standard & Poor's lowered its corporate credit
and senior unsecured ratings on energy merchant Mirant Corp.,
and its subsidiaries to 'BB' from 'BBB-', and its preferred
stock rating to 'B' from 'BB'. The outlook is negative.

Standard & Poor's assigned the same ratings to Mirant, Mirant
Americas Generation Inc., Mirant Americas Energy Marketing L.P.,
and Mirant Mid-Atlantic LLC, given the lack of bankruptcy-remote
structures between the entities and the intermingled cash flow
operations.


MITEC: Will Streamline Activities to Generate Cash & Cut Costs
--------------------------------------------------------------
Maintaining its proactive approach in dealing with the current
weak economy, Mitec Telecom Inc. (TSX: MTM), a leading designer
and manufacturer of wireless network products for the
telecommunications industry, announced further details of its
extensive corporate wide plan to generate cash and slash
operating costs. The announcement to reduce the global workforce
by 150 positions was further to the one made on September 26,
2002 which itemized a number of initiatives including global
staff reductions and the sale of certain Company real estate
and non-core assets. Ken Allstaff, Interim President and Interim
COO said Mitec is moving decisively and rapidly to position the
organization to survive the current telecommunications turmoil.

The staff reduction program will touch all aspects of the
Company's global operations. With a view to reducing costs while
increasing the effectiveness of technology development programs,
engineering functions will be realigned to provide a more
distributed capability throughout the organization. The three
existing teams of engineers within the Suzhou, China, Dunstable,
U.K. and the Montreal, Quebec facilities will continue to
interface with major customers.

The Company's three existing "Centers of Excellence" will remain
in place, becoming an integral part of the customer localization
strategy. These Centers include: Montreal for future integrated
technology; Dunstable for filter advancement; and Tinton Falls,
New Jersey for power amplifier development. "I am determined
that a much higher proportion of our R&D costs will be spent on
differentiating technology to set us apart from our peers in the
years ahead. We have some very exciting technologies and
products to offer to our customers," stated Mr. Allstaff.

The Company is also embarking on a business diversification
program to be centered in Montreal. "Given the serious
challenges that the -Wireless business will continue to face the
Company is also aggressively developing plans to expand its
Defense and Satcom business segments as they promise growth and
high margins. I am confident that having right sized our
Wireless business we can concentrate on developing one of the
largest and most successful high frequency technology companies
in Canada."

Mr. Allstaff said that the mobile communications market will
remain flat for the foreseeable future. "The lack of spending
has been much worse than the informed opinion of 18 months ago.
As such, we are taking a very prudent approach to our Wireless
business in order to be in a stronger position to offer our
customers the most relevant and competitive technology when the
market is rekindled as a result of 3G and 4G acceptance and
infrastructure upgrading."

Quantifying the impact of the changes, Mitec Executive Vice
President, Finance and CFO, Keith Findlay, said that, excluding
severance costs, the staff reductions and engineering
realignment are expected to result in annualized pretax savings
of approximately $6 million. The savings will take effect
immediately.

Mr. Findlay said that the realignment of engineering was
dictated by current market conditions. "Simply put, our
engineering costs were too high for current revenue streams. In
this business we have to meet aggressive pricing targets and our
margins were unable to support the level of R&D spending.

"We are confident that the implementation of this program will
allow us to generate positive EBITDA. The challenge facing us is
this transitional phase. I am comfortable we are doing what is
required to take us through to our next fiscal year," concluded
Mr. Findlay.

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

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

In its recent financial statements filed with SEDAR, Mitec has
experienced recent losses, negative cash flows and it has
violated substantially all of its Canadian debt covenants. As
such, the realization of assets and the discharge of liabilities
are subject to significant uncertainty. The Company's
continuation as a going concern is dependent upon, amongst other
things; the injection of new capital by investors, the
continuing support of the Corporation's lenders which is
dependent on certain conditions including a capital injection by
November 1, 2002, maintaining a satisfactory sales level, the
continued viability of the Corporation's significant customers,
a return to profitable operations and the ability to generate
sufficient cash from operations, financing arrangements and new
capital to meet its obligations as they become due.


MORTGAGE CAPITAL: Fitch Rates Five Note Classes at Low-B Level
--------------------------------------------------------------
Mortgage Capital Funding, Inc.'s mortgage pass-through
certificates, series 1998-MC2 are affirmed by Fitch Ratings as
follows: $123.3 million class A-1, $514.2 million class A-2, and
interest-only class X at 'AAA'; $48 million class B at 'AA'; $58
million class C at 'A'; $60.6 million class D at 'BBB'; $37.9
million class E at 'BBB-'; $12.6 million class F at 'BB+'; $25.2
million class G at 'BB'; $7.6 million class H at 'BB-'; $15.1
million class J at 'B' and $7.6 million class K at 'B-'. Fitch
does not rate the $11.1 million class L certificates. The
affirmations follow Fitch's annual review of the transaction,
which closed June 1998.

As of the October 2002 distribution date, the aggregate
collateral balance has decreased by 8.9% to $919.5 million from
$1 billion at closing. ORIX, as master servicer, provided year-
end 2001 operating statements for 97.7% of the pool balance. The
YE 2001 weighted average debt service coverage ratio is 1.60
times compared to 1.59x as of YE 2000 and 1.54x at issuance.

Fitch maintains an investment grade credit assessment on two
loans, 375 Hudson Street (18.3% of the pool) and Wellpoint
Office Complex (5.2%). The 375 Hudson Street loan is secured by
a class A office building located in Manhattan. The rating of
the loan is dependent upon the rating of the largest tenant in
the building, Saatchi & Saatchi. The rating of Wellpoint Office
Complex loan is also dependent upon the rating of the lease
guarantor, Wellpoint Health Networks, which remains investment
grade. The loan is secured by a 13-story office tower and three
single story buildings.

Fitch lowered its credit assessment of the Minneapolis City
Center to below investment grade due to the decline in DSCR and
the 9% additional vacancy that will occur when Target vacates 6
floors upon lease expiration at the end of 2002.

Twenty loans (7.2%) are in special servicing, including six
(3.2%) that are delinquent as follows: five 90+ days (2.9%) and
one real estate owned (0.3%). A crossed pool of 11 loans was
transferred to special servicing due to non-monetary default.
These loans are expected to return to the master servicer. Loss
estimates on the remaining loans in special servicing are
expected to be fully absorbed by the unrated class L.

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


NERVA/SAVANNAH: Fitch Keeping Watch on Three Low-B-Rated Notes
--------------------------------------------------------------
Fitch Ratings has placed the following classes of notes issued
by Nerva Ltd. and Savannah II CDO Ltd. on Rating Watch Negative:

                               Nerva Ltd.

      -- $513,573,683 class A floating-rate notes due 2014 'AAA';

      -- $12,000,000 class B floating-rate notes due 2014 'AA';

      -- $30,000,000 class C floating-rate notes due 2014 'BBB';

      -- $12,000,000 class D floating-rate notes due 2014 'BB'.

                           Savannah II CDO Ltd.

      -- $300,000,000 class A floating-rate notes due 2012 'AAA';

      -- $18,450,000 class B floating-rate notes due 2012 'AA';

      -- $22,500,000 class C floating-rate notes due 2012 'BBB';

      -- $6,750,000 class D floating-rate notes due 2012 'BB';

      -- $5,250,000 class E floating-rate notes due 2012 'B'.

Continued deterioration in the credit quality of their reference
pools, coupled with a significant amount of reference
obligations that have become subjects of credit events, have
increased the credit risk of both transactions to a point where
their risk may no longer be consistent with their ratings.

As of Sept. 30, 2002, Nerva Ltd. had a weighted average rating
factor of 31.21 versus a trigger of 24. Savannah II had a WARF
of 41.75 versus a trigger of 34. Reference obligations that were
subjects of credit events represented 12.75% and 10.20% of the
total reference pool of Nerva Ltd., and Savannah II CDO Ltd.,
respectively. Both transactions were failing all of their OC
tests. Fitch is currently reviewing these transactions in
detail. Appropriate action will ensue upon completion of its
analysis.

Both Nerva Ltd. and Savannah II CDO Ltd. are Collateralized Debt
Obligations that may have characteristics of both synthetic and
cash flow CDOs. At issuance, both transactions entered into
separate credit default swaps with Barclays Bank PLC as the swap
counterparty. In its capacity as such, Barclays has the option
to settle each swap (in whole or in part), in which case the
respective transactions would become cash flow CDOs.  As of
Sept. 30, 2002, both Nerva Ltd., and Savannah II CDO Ltd., did
not hold any physical assets in their portfolios. Both
transactions' reference pools primarily consisted of asset-
backed securities and corporate debt, with Savannah II CDO Ltd.
also containing emerging market corporate and sovereign debt.


NETIA HOLDINGS: Dutch Units' Creditors Approve Composition Plans
----------------------------------------------------------------
Netia Holdings S.A. (WSE: NET), Poland's largest alternative
provider of fixed-line telecommunications services (in terms of
value of generated revenues), announced that at the creditors'
meetings of its three Dutch finance subsidiaries held today in
Amsterdam, the Netherlands, all creditors present cast their
votes in favor of the composition plans of Netia Holdings B.V.,
Netia Holdings II B.V. and Netia Holdings III B.V.,
respectively.

The hearing on approval of the composition plans will be held on
November 6, 2002.

Netia Holdings BV's 13.75% bonds due 2010 (NETH10NLN1) are
trading at 16 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NETH10NLN1
for real-time bond pricing.


NPF XII/NPF VI: Fitch Withdraws Ratings Over Operations Concerns
----------------------------------------------------------------
Fitch Ratings withdraws its ratings on the following securities
within the NPF XII and NPF VI Healthcare Securitization
Programs:

                  NPF XII, Inc., Series 1999-1

                --  Class A notes 'AA';

                --  Class B notes 'A';

                  NPF XII, Inc., Series 1999-3

                --  Class A notes 'AA';

                --  Class B notes 'A';

                  NPF XII, Inc., Series 2000-2

                --  Class A notes 'AA';

                --  Class B notes 'A';

                  NPF XII, Inc., Series 2001-1

                --  Class A notes 'AA';

                --  Class B notes 'A';

                  NPF XII, Inc., Series 2001-2

                --  Class A notes 'AA';

                --  Class B notes 'A';

                  NPF VI, Inc., series 1998-2

                --  Class A notes 'A';

                --  Class B notes 'BBB';

                  NPF VI, Inc., series 1998-4

                --  Class A notes 'A';

                --  Class B notes 'BBB';

                  NPF VI, Inc., series 2001-1

                --  Variable funding note 'BBB'.

While Fitch lacks the information necessary to make definitive
ratings changes, Fitch believes the ratings on the NPF XII
Master Trust could be as low as 'B'/'CCC' given the reserve fund
depletion as described in more detail below.

With regards to the NPF VI Master Trust transactions, Fitch is
not aware at this time of any credit enhancement deficiencies,
but is concerned that NCFE is not operating in a manner
consistent with a servicer of investment grade rated
transactions regardless of the available credit enhancement. In
addition, Fitch was notified earlier today by the trustee,
JPMorgan Chase Bank, that the sole holder of the Series 2001-1
notes directed the trustee to declare a principal amortization
event with respect to the Series 2001-1 notes. According to the
most recent servicer report, NPF VI reserve levels are in
compliance, however the ramifications related to this principal
amortization are as of yet unknown.

This withdrawal is the result of a series of events that
culminated in Bank One, as trustee for the NPF XII master trust,
declaring an Event of Default on October 25, 2002. The events
that led to this declaration cause Fitch to question the
reliability of the information provided by NCFE, and make it
difficult or impossible for Fitch to accurately maintain the
current ratings. In addition, other than the written notice of
default from the trustee received on October 26, 2002, Fitch's
calls to Bank One and to NCFE seeking to clarify and understand
the situation have not been returned. As indicated in previous
press releases, a primary consideration in Fitch's downgrade of
the NPF XII and VI transactions on July 12, 2002 was the
inconsistent communication between NCFE and Fitch.

On October 26, 2002, Fitch was notified by the trustee that on
October 25, 2002, an Event of Default was declared under the NPF
XII, Inc., Master Indenture, Section 7.01 (j). Specific to
subsection (j), a shortfall in the Equity Account Balance
occurred as of the October payment date, and was not remedied
within the necessary time frame. While the Event of Default
notice was exclusive to NPF XII, ongoing concerns at both the
program and servicer levels place both NCFE sponsored programs
in jeopardy. According to the most recent servicer report for
NPF XII, dated October 23, 2002 and received by Fitch earlier
today, the actual level of cash reserves was 0.06% versus the
specified level of 17.0%. This reserve shortfall results not
only in the aforementioned Event of Default, but severely
impairs the trust's ability to protect against losses and
dilutions.

It has been reported to Fitch by interested parties that NCFE
directed the trustee to re-route certain funds intended for the
NPF XII reserve accounts in order to fund the purchase of new
receivables. The company's apparent willingness to disregard the
documents and commit such a serious breach causes Fitch to
question NCFE's viability. Finally, the cumulative impact of
these actions makes it difficult for Fitch to rely on the
accuracy of the information provided by NCFE. If a diversion of
funds from the reserves did indeed occur and the depleted credit
enhancement levels persist, Fitch expects that its ratings on
the Class A and Class B notes of NPF XII would fall to the 'B'
and 'CCC' category.

Fitch originally placed the NPF XII and NPF VI Healthcare
Programs on Rating Watch Negative on May 23, 2002. On July 12,
2002, Fitch downgraded all securities it rated under the NPF XII
and NPF VI programs because of a decline in collateral
performance, concentrations in excess of Fitch's comfort levels,
NCFE's inability to raise additional debt and equity and NCFE's
delays in providing Fitch with the information necessary to
maintain its ratings.

In the future, if Fitch is able to gather reliable information
as to the performance of the trusts and the viability of NCFE's
operations, it is possible that the ratings may be reinstated at
the then appropriate levels.


NU-LIFE CORP: Commences Restructuring Proceeding in Canada
----------------------------------------------------------
Nu-Life Corp., the supplier of Nu-Life Vitamins, announced that
it and its subsidiary Nu-Life Nutrition Ltd., have each filed a
restructuring application with their respective creditors and
that it has entered into a conditional financial agreement with
Vitaquest International, Inc., estimated to be worth more than
$6.5 million.

"Nu-Life suffered severe operational difficulties caused by its
manufacturing facility shut down in 1998 and never recovered,"
said Mark Couper, Nu-Life's President and CEO. "We're seeking to
re-engineer our business beginning with a hard look at all
infrastructure and operating costs as well as a new strategic
growth plan. We intend to re-establish a strong financial
platform, so that we can quickly meet product demand and achieve
sustainable and profitable sales growth."

The Company's Board of Directors has appointed BDO Dunwoody
Limited as licensed trustee of its and Nu-Life Nutrition Ltd.'s
restructuring application, to be accomplished by way of
proposals under the Bankruptcy and Insolvency Act. Management
believes that this approach will create the most positive
economic advantages for the Company and its subsidiary while
respecting shareholders, creditors, suppliers and customers. All
parties are likely to derive a greater benefit from the Company
and its subsidiary continuing operations versus any recovery
resulting from bankruptcy. As a part of the restructuring, the
Company and its subsidiary will take all appropriate charges.

                     De-listing from TSX

Trading of Nu-Life's shares was suspended by the TSX on July 5,
2002, and the shares were subsequently de-listed as the Company
no longer met the TSX's listing requirements,. The Company may
re-list its shares on a Canadian stock exchange in the future,
but there can be no assurance that it will be able to do so.

"We have dedicated and talented employees, innovative products
and a strong ability to provide added value and marketing know-
how to leading retailers," said Couper. "We are reinforcing our
commitment to independent health food retailers who have
contributed significantly towards our premium brand positioning.
As a result of our strategic plans, we have achieved
distribution of our products in mainstream retail chains such as
Shoppers Drug Mart, Pharma Plus, Pharmasave, Jean Coutu,
Uniprix, Loblaws, Fortino's, Zehr's, Sobey's, Safeway, Save-on-
Foods, A&P and Dominion".

                Vitaquest Financial Support Agreement

Vitaquest has entered into a financial support agreement with
the Company dated October 23, 2002, pursuant to which it has,
subject to certain terms and conditions, agreed to support the
Company's and the Subsidiary's proposals. Vitaquest, the
Subsidiary's primary supplier, is a large privately held vitamin
manufacturer, which sells through retail, direct response and
electronic retail, primarily in the United States, and is also
Nu-Life's principal manufacturer. Additionally, Vitaquest is a
shareholder with 2,335,500 common shares, an approximate 8.5%
interest.

"With the Vitaquest financial support agreement, coupled with
the support of our valued suppliers, we expect that our balance
sheet and cash flow will be substantially enhanced, product
availability assured and operating costs dramatically reduced,
including our banking fees and interest charges, which alone
will be reduced by over $500,000 per year," Couper said.

Contingent upon the success of the proposal, Vitaquest has
agreed to convert its unsecured Subsidiary debt into common
shares of the Company at $0.02 per share and provide US $750,000
of inventory, on a secured basis, without interest, as well as
term out the payments thereof over 15 equal monthly
installments, starting January 1, 2003. Vitaquest has further
agreed to enter into a manufacturing agreement, with appropriate
performance parameters and industry standard terms, subject to
Vitaquest's standard credit requirements and the success of of
the two proposals.

Vitaquest has also agreed, contingent upon the success of the
two proposals, to reduce the interest rate under its existing
secured convertible debentures to the minimal accepted IRS
interest rate, with an offsetting marketing allowance, and to
term out its secured debt position, previously acquired from
Congress Financial, over 15 equal monthly installments, starting
January 1, 2003, at the Canadian bank prime rate.

Most of Vitaquest's commitments are subject to events of default
by the Subsidiary or the Company. Vitaquest will retain its pre-
emptive rights to acquire shares of the Company, but shall waive
them in respect of shares issuable pursuant to the proposal. The
Company has, among other things, agreed to seek to amend its by-
laws to increase its maximum non-Canadian director
representation. As Vitaquest is controlled by Mr. Keith Frankel,
who is a director of the Company, the issuance of common shares
of the Company to Vitaquest and other transactions with
Vitaquest contemplated under the proposals of each of the
Subsidiary and the Company could be viewed as one or more
related party transactions. In addition, Ms. Sharon Leavy,
another director of the Company, is related to Mr. Frankel. The
Company's remaining director is Mr. Mark Couper. A material
change report attaching the two proposals and the Vitaquest
financial support agreement will be filed with Canadian
securities regulators shortly.

The successful completion of the proposals will be subject to
the support of the creditors of the Company and the Subsidiary,
as well as court approval. Meetings are currently scheduled for
November 12, 2002. The effective date is expected to be October
24, 2002, subject to the receipt of applicable approvals.


OAKWOOD MORTGAGE: S&P Maintains B- Ratings on Sub. B-2 Classes
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on various
Oakwood Mortgage Investors Inc.-related transactions issued
between 1995 and 2001 on CreditWatch with negative implications.

The ratings on the subordinate B-2 classes of series 1997-A,
1997-B, 1997-C, and 1998-B, which are dependent on Oakwood Homes
Corp.'s rating as guarantor, are unaffected by this action and
remain at single-'B'-minus. The ratings assigned to these B-2
classes were lowered on Nov. 2, 2000, following the lowering of
Oakwood's long-term credit rating on Oct. 30, 2000.

The CreditWatch placements reflect the worse-than-expected
performance of the underlying pools of manufactured housing
contracts. With pool factors ranging from 26% to 58%, the
transactions originated between 1995 and 1998 display cumulative
net loss rates that range between 6.68% and 10.63% of the
respective original pool balances. Comparatively, Oakwood
transactions issued during 1999 and 2001 display pool factors
ranging between 68% and 98%, and display cumulative net loss
rates ranging from 0.36% to 5.60%. In addition, repossession
inventory, as a percentage of the current pool balance, is
significant for all transactions ranging between 2.4% and
12.50%. Furthermore, the percentage of the collateral pool that
consists of receivables that are 30 or more days delinquent is
between 3% and 10% as of the September 2002 collection period
for all transactions.

Although the cumulative recovery rates on charged off collateral
displayed by these transactions are relatively strong,
recoveries in more recent months have dissipated substantially
as a result of the greater percentage of repossessed
manufactured housing units being liquidated by Oakwood through
wholesale liquidation channels. In fact, during the past 18
months, wholesale liquidations comprised a progressively larger
percentage of total monthly liquidations, while retail based
liquidations have slowly diminished. Retail based liquidations
previously comprised as much as 80% to 90% of Oakwood's total
monthly liquidations, but have since dropped to the current
level of 40% and are expected to decrease further. Due to a
depressed repossession resale market, liquidation proceeds from
wholesale liquidation channels have frequently been insufficient
to cover Oakwood's liquidation expenses and outstanding servicer
advances, resulting in net recoveries of diminutive amounts for
the ABS transactions and, ultimately, higher net losses.
Oakwood's retail based liquidations are currently yielding
recoveries averaging 40%. The future liquidation of repossession
inventory, which is substantial for many transactions as
described above, combined with significantly reduced recovery
rates is expected to further impact the remaining credit support
negatively. In addition, Oakwood has recently announced that it
intends to close approximately 40 of its retail sales centers
and five of its factory-certified stores, leaving approximately
200 company-owned dealerships in addition to its repossession
centers.

Standard & Poor's will complete a detailed review of the credit
performance of the aforementioned transactions relative to the
remaining credit support in order to determine if any rating
actions are necessary.

      Ratings Placed On Creditwatch With Negative Implications

           Oakwood Mortgage Investors Inc. Series 1995-A

                Class           Rating

                         To              From

                A-3      AAA/Watch Neg   AAA
                A-4      AAA/Watch Neg   AAA
                B-1      A-/Watch Neg    A-

           Oakwood Mortgage Investors Inc. Series 1995-B

                Class           Rating

                         To              From

                A-3      AAA/Watch Neg   AAA
                A-4      AAA/Watch Neg   AAA
                B-1      BBB/Watch Neg   BBB

           Oakwood Mortgage Investors Inc. Series 1996-A

                Class           Rating

                         To              From

                A-3      AAA/Watch Neg   AAA
                A-4      AA+/Watch Neg   AA+

           Oakwood Mortgage Investors Inc. Series 1996-B

                Class           Rating

                         To              From

                A-4      AAA/Watch Neg   AAA
                A-5      AAA/Watch Neg   AAA
                A-6      AA/Watch Neg    AA

           Oakwood Mortgage Investors Inc. Series 1996-C

                Class           Rating

                         To              From

                A-5      AAA/Watch Neg   AAA
                A-6      AA+/Watch Neg   AA+

           Oakwood Mortgage Investors Inc. Series 1997-A

                Class           Rating

                         To              From

                A-4      AAA/Watch Neg   AAA
                A-5      AAA/Watch Neg   AAA
                A-6      AA/Watch Neg    AA
                B-1      BBB/Watch Neg   BBB

           Oakwood Mortgage Investors Inc. Series 1997-B

                Class           Rating

                         To              From

                A-4      AAA/Watch Neg   AAA
                A-5      AAA/Watch Neg   AAA
                M-1      AA/Watch Neg    AA
                B-1      BBB/Watch Neg   BBB

           Oakwood Mortgage Investors Inc. Series 1997-C

                Class           Rating

                         To              From

                A-3      AAA/Watch Neg   AAA
                A-4      AAA/Watch Neg   AAA
                A-5      AAA/Watch Neg   AAA
                A-6      AAA/Watch Neg   AAA
                M-1      AA/Watch Neg    AA
                B-1      BBB/Watch Neg   BBB

           Oakwood Mortgage Investors Inc. Series 1998-A

                Class           Rating

                         To              From

                A-4      AAA/Watch Neg   AAA
                A-5      AAA/Watch Neg   AAA
                M-1      AA/Watch Neg    AA
                B-1      BBB/Watch Neg   BBB

           Oakwood Mortgage Investors Inc. Series 1998-B

                Class           Rating

                         To              From

                A-3      AAA/Watch Neg   AAA
                A-4      AAA/Watch Neg   AAA
                A-5      AAA/Watch Neg   AAA
                M-1      AA/Watch Neg    AA
                M-2      A/Watch Neg     A
                B-1      BBB/Watch Neg   BBB

           Oakwood Mortgage Investors Inc. Series 1998-D

                Class           Rating

                         To              From

                A        AAA/Watch Neg   AAA
                A-1ARM   AAA/Watch Neg   AAA

                          OMI Trust 1999-C

                Class           Rating

                         To              From

                A-2      AAA/Watch Neg   AAA
                M-1      AA-/Watch Neg   AA-
                M-2      BBB+/Watch Neg  BBB+
                B-1      BB+/Watch Neg   BB+

                          OMI Trust 1999-D

                Class           Rating

                         To              From

                A-1      AAA/Watch Neg   AAA
                M-1      AA/Watch Neg    AA
                M-2      A/Watch Neg     A
                B-1      BBB/Watch Neg   BBB

                          OMI Trust 1999-E

                Class           Rating

                         To              From

                A-1      AAA/Watch Neg   AAA
                M-1      AA/Watch Neg    AA
                M-2      A/Watch Neg     A

                          OMI Trust 2000-A

                Class           Rating

                         To              From

                A-2      AAA/Watch Neg   AAA
                A-3      AAA/Watch Neg   AAA
                A-4      AAA/Watch Neg   AAA
                A-5      AAA/Watch Neg   AAA
                M-1      AA/Watch Neg    AA
                M-2      A/Watch Neg     A
                B-1      BBB/Watch Neg   BBB

                          OMI Trust 2000-B

                Class           Rating

                         To              From

                A-1      AAA/Watch Neg   AAA
                M-1      AA/Watch Neg    AA
                B-1      BBB/Watch Neg   BBB

                          OMI Trust 2000-C

                Class           Rating

                         To              From

                A-1      AAA/Watch Neg   AAA
                M-1      AA/Watch Neg    AA
                M-2      A/Watch Neg     A
                B-1      BBB/Watch Neg   BBB

                          OMI Trust 2000-D

                Class           Rating

                         To              From

                A-1      AAA/Watch Neg   AAA
                A-2      AAA/Watch Neg   AAA
                A-3      AAA/Watch Neg   AAA
                A-4      AAA/Watch Neg   AAA
                M-1      AA/Watch Neg    AA
                M-2      A/Watch Neg     A
                B-1      BBB/Watch Neg   BBB

                          OMI Trust 2001-C

                Class           Rating

                         To              From

                A-1      AAA/Watch Neg   AAA
                A-2      AAA/Watch Neg   AAA
                A-3      AAA/Watch Neg   AAA
                A-4      AAA/Watch Neg   AAA
                A-IO     AAA/Watch Neg   AAA
                M-1      AA/Watch Neg    AA
                M-2      A/Watch Neg     A
                B-1      BBB/Watch Neg   BBB

                          OMI Trust 2001-D

                Class           Rating

                         To              From

                A-1      AAA/Watch Neg   AAA
                A-2      AAA/Watch Neg   AAA
                A-3      AAA/Watch Neg   AAA
                A-4      AAA/Watch Neg   AAA
                A-IO     AAA/Watch Neg   AAA
                M-1      AA/Watch Neg    AA
                M-2      A/Watch Neg     A
                B-1      BBB/Watch Neg   BBB

                          OMI Trust 2001-E

                Class           Rating

                         To              From

                A-1      AAA/Watch Neg   AAA
                A-2      AAA/Watch Neg   AAA
                A-3      AAA/Watch Neg   AAA
                A-4      AAA/Watch Neg   AAA
                A-IO     AAA/Watch Neg   AAA
                M-1      AA/Watch Neg    AA
                M-2      A/Watch Neg     A
                B-1      BBB/Watch Neg   BBB


OCTEL CORP: Working Capital Deficit Tops $14.8 Mill. at Sept. 30
----------------------------------------------------------------
Octel Corp., (NYSE: OTL) announced financial results for the
third quarter ended September 30, 2002.

         Highlights - Quarter ended September 30, 2002

      -   Earnings per share at $1.44, up by 21% (adjusted for
          FAS 142)

      -   TEL gross profit year to date improves from 49% to 54%

      -   Restructuring charge of $3.1m in third quarter and
          comprehensive review of cost base initiated

The Company has completed the transitional goodwill impairment
tests as required under Statement of Financial Accounting
Standards No. 142 "Goodwill and Other Intangible Assets". In
accordance with the Statement, adopted by the Company effective
January 1, 2002, the carrying value of goodwill is no longer
amortized but instead evaluated for impairment annually. In
connection with that review, the Company determined that the
fair values of its reporting units exceeded their recorded
values. Accordingly, the Company is not required to recognize an
impairment loss at this time. Amortization of goodwill reduced
2001 third quarter net income by $11.6 million after tax, or
$0.92 per share and $34.6 million after tax, or $2.76 per
share, for the first nine months of 2001. All comparisons of
operating and net income in this press release are made on a
post FAS 142 basis.

Net income for the third quarter of 2002 was $18.3 million,
compared with $15.0 million in the third quarter of 2001
(adjusted for FAS 142).

Net income for the nine months ended September 30, 2002 was
$54.4 million, compared with $47.6 million for the nine months
ended September 30, 2001 (adjusted for FAS 142).

At September 30, 2002, the Company's balance sheets show a
working capital deficit of about $14.8 million.

Ongoing tetraethyl lead sales for the September quarter were $66
million, an increase of 12% over the third quarter of 2001. TEL
sales for the nine months to September, 2002 were 7% below the
corresponding period last year due to the continuing decline in
the global market. Due to the closure of the German TEL plant
and a combination of price increases and cost reduction at the
UK plant, the TEL gross profit increased to $102 million or 54%
of sales. Savings in SG&A and intangible amortization costs have
resulted in TEL operating income increasing by $5m over 2001
(adjusted for FAS 142).

Specialty Chemicals sales for the third quarter were $47
million, an increase of 2% over the third quarter of 2001.
Specialty Chemicals operating income in the quarter at $3
million was $1 million less than in 2001, due to reduced gross
margin, but it was $2 million higher than the disappointing
second quarter of 2002.

Cash generated from operating activities was $18 million for the
third quarter and $84 million for the year to date, compared
with $85 million for the nine months to September 2001.

Dennis Kerrison, President and Chief Executive Officer of Octel
Corp. commented: "The third quarter reflects the trend seen at
the half-year. The Lead Alkyls business is performing well.
Although TEL sales have declined 7% year on year, operating
income is up 15% for the quarter and 5% year to date. We would
expect to finish the year ahead of 2001 for TEL, although one
Middle Eastern customer has exited the market about six months
earlier than planned."

"Specialty Chemicals results are clearly disappointing. The
market softness signalled in the first two quarters continues,
with customers attempting to economise on the use of performance
fuel additives. Our objective of exploiting synergies from the
specialties business is our highest priority. To accelerate the
integration process and squeeze costs out of the system, we have
decided to be proactive now in order to obtain meaningful
benefits in 2003."

"As part of this initiative, we have taken a restructuring
charge of $3.1 million in the quarter. This relates mainly to
costs for the chlorine plant closure at Ellesmere Port and
redundancies across the organisation. Despite this charge we
have met market expectations for the quarter."

"Currently we are undertaking a broad and comprehensive review
of our cost base and our infrastructure needs to accelerate our
global growth programme. The first phase has identified a
possible $8 million of further restructuring costs to be
provided in the fourth quarter. We would expect to have this
quantified by the time of our year-end results. We believe this
corporate programme to be critical in terms of our ability to
deliver long-term shareholder value."

Octel Corp., a Delaware corporation, is a global chemical
company specializing in high performance fuel additives and
special and effect chemicals. The Company's strategy is to
manage profitably and responsibly the decline in world demand
for its major product - tetraethyl lead in gasoline - through
stringent product stewardship, to expand its Petroleum
Specialties and Performance Chemicals businesses organically
through product innovation and focus on customer needs, and to
seek synergistic growth opportunities through joint ventures,
alliances, collaborative arrangements and acquisitions.


OGLEBAY NORTON: Reports Improved Third Quarter 2002 Results
-----------------------------------------------------------
Oglebay Norton Company (Nasdaq: OGLE) reported its results for
the third quarter and nine months ending on September 30, 2002.
Results for the quarter and nine months include:

      * Revenues for the quarter were $123.7 million compared to
$120.1 million in the year earlier period.  Revenues for the
nine-month period were $298.6 million compared to $305.4 million
in the prior-year nine-month period.

      * Operating income was $14.5 million compared to operating
income of $10.5 million in the third quarter of 2001.  For the
2002 nine-month period, operating income was $31.5 million
compared to $23.4 million for the 2001 nine-month period.
Adjusted third quarter 2001 operating income was $11.2 million
excluding goodwill amortization of $0.7 million, while adjusted
operating income for the 2001 nine-month period was $29.7
million excluding a special charge of $4.1 million and $2.2
million attributable to goodwill amortization.

      * Net income for the quarter was $2.0 million, compared to
net income of $227,000 for the third quarter last year.  Net
income for the nine months was $74,000, compared to a net loss
of $7.9 million for the same period last year.  Adjusted third
quarter 2001 net income was $0.14 per diluted share excluding
goodwill amortization of $0.09 per diluted share, while adjusted
net loss for the 2001 nine-month period was $0.01 per diluted
share excluding special charges totaling $1.29 per diluted share
and $0.27 per diluted share attributable to goodwill
amortization.

      * Earnings before interest, taxes, depreciation and
amortization (EBITDA) for the quarter were $24.7 million
compared to $21.1 million in the third quarter 2001.  EBITDA for
the nine-month period was $55.8 million compared to $54.5
million in the year-earlier nine months.

Oglebay Norton Chairman and Chief Executive Officer John N.
Lauer said, "Despite a tough economy, we were able to improve
margins in each of our business segments.  Revenue, EBITDA and
operating income contributions from our Great Lakes Minerals and
Global Stone segments all improved from the third quarter of
2001.  Additionally, we were able to maintain the EBITDA and
operating income contribution for our Performance Minerals
segment on revenues that were 13% off last year's third quarter
levels.

"We continue to concentrate our efforts on executing our Great
Lakes Minerals strategy, improving Global Stone's margins and
maintaining our Performance Minerals segment's contributions.
The successfully completed $75 million notes offering and the
extension of our bank group credit facility provides us the
financial flexibility to focus intently on continuing to improve
our operations' profitability," Lauer added.

The Great Lakes Minerals segment's revenues for the quarter
increased to $58.5 million from $54.3 million in the third
quarter 2001.  The increase in revenue is primarily related to
Michigan Limestone Operations selling a higher percentage of its
products at a delivered price including freight. Total freight
sales were up $2.3 million for the quarter compared to last
year's third quarter, while cost of sales increased by a similar
amount. Demand for the segment's limestone is expected to remain
steady through the end of the season.  Cost-control measures and
the efficiencies derived from the pooling agreement with
American Steamship Company helped improve the segment's
operating margins to 14.5% for the quarter compared with 12.2%
for the same period in 2001.  On a year-to-date basis, operating
margins improved for the segment to 13.9% from 10.8% last year.
Operating income for the quarter increased to $8.5 million
compared to $6.6 million for the same period in 2001.

The Global Stone segment's revenues for the quarter were $43.1
million, up from $40.3 million in the 2001 third quarter.  The
increase in revenues is attributable to increased volume for
fillers supplied to the roofing industry, increased sales to the
lawn and garden market and increased volume to the steel
industry. These gains were partially offset by weakened demand
for fillers in the carpet and flooring markets, lower lime sales
in the Oklahoma region and lower aggregate volume in Virginia.
Demand for both lime and fillers is expected to remain flat in
the fourth quarter.  Operating margins improved to 10.4% for the
quarter compared with 6.4% in last year's third quarter.  For
the nine-month period, operating margins were 10.8% compared to
8.6% through nine months in 2001. The margin improvements for
the segment are primarily the result of cost-control measures
initiated as part of the company's restructuring initiatives put
in place late in the fourth quarter of 2001.  Operating income
for the quarter was $4.5 million compared to $2.6 million in
last year's third quarter.

The Performance Minerals segment's revenues for the quarter were
$23.2 million compared to $26.7 million in the same period last
year. The decline in revenues is primarily the result of reduced
demand for fracturing sands caused by a decline in oilfield
activity, reduced demand for sands in the building materials
market, and the closure of three non-strategic abrasives plants.
Restructuring-related cost reductions and productivity
improvements helped improve operating margins to 17.1% for the
quarter compared to 14.4% in the year-earlier period.  Year-to-
date operating margins were 16.5% compared to 14.4% for the 2001
nine-month period.  Operating income for the quarter was $4.0
million compared to $3.9 million in last year's third quarter.

Michael D. Lundin, Oglebay Norton's President and Chief
Operating Officer said, "We have been focusing on the
fundamentals of running our industrial minerals operations and
those efforts were reflected in our improved results. However,
we can still realize further improvements as we continue to move
towards being one company with one vision of being the best.

"Additionally, we have placed a renewed emphasis on our
strategic sales and marketing initiatives.  We have created a
new sales structure to more aggressively develop the collective
synergies of our formerly distinct operating units.  Our goal is
to capture more cross-selling opportunities, more effectively
capitalize on market growth opportunities and develop new
markets for our products," Lundin concluded.

Oglebay Norton Company, a Cleveland, Ohio-based company,
provides essential minerals and aggregates to a broad range of
markets, from building materials and home improvement to the
environmental, energy and metallurgical industries.  Building on
a 149-year heritage, our vision is to be the best company in the
industrial minerals industry.  The company's Web site is located
at http://www.oglebaynorton.com

                          *    *    *

As reported in Troubled Company Reporter's August 8, 2002
edition, Standard & Poor's lowered its corporate credit and bank
loan ratings on Oglebay Norton Co., to single-'B' from single-
'B'-plus due to difficult end-market conditions, the company's
weak financial performance, and its limited free cash-flow
generation, which will continue to result in high debt levels.

The outlook is negative.

The ratings reflect Oglebay's very high debt leverage, cyclical
end markets, high capital spending requirements relative to
operating cash flow, and refinancing risk. The ratings also
reflect the company's diversified business segments and a focus
on productivity and operational improvements.


PANTRY INC: Chilton Investment Discloses 12.4% Equity Stake
-----------------------------------------------------------
Chilton Investment Company, Inc. beneficially owns 2,235,100
shares of the common stock of The Pantry, Inc.  Chilton has sole
voting and dispositive powers over the 2,235,100 shares held.
That amount represent 12.4% of the outstanding common stock of
The Pantry.

The Pantry's shelves are stuffed with convenience stores -- the
company operates more than 1,300. About 85% of them are located
in fast-growing cities and resort areas of the Carolinas and
Florida. Through acquisitions The Pantry has also expanded into
Georgia, Mississippi, Indiana, Virginia, Kentucky, Louisiana,
and Tennessee. Its selection of store chain names include The
Pantry, Big K, Zip Mart, Express Stop, Handy-Way, Lil' Champ,
Smokers Express, ETNA, Sprint, Depot, and Wicker Mart. About 200
locations feature fast-food restaurants. The Pantry generates
60% of its sales from gasoline; tobacco, alcohol, and soft
drinks are its biggest nonfuel sellers.

As previously reported, Standard & Poor's lowered its corporate
credit rating on The Pantry Inc., a leading convenience store
operator in the Southeast, to single-'B'-plus from double-'B'-
minus based on a decline in credit measures in the first quarter
of fiscal 2002 and in the full fiscal year of 2001. Standard &
Poor's also removed the ratings from CreditWatch, where they had
been placed on Jan. 24, 2002. The outlook is stable.


PERLE SYSTEMS: May 31 Balance Sheet Upside-Down by $2.25 Million
----------------------------------------------------------------
Perle Systems Limited (OTCBB:PERL) (TSE:PL), a leading provider
of networking products for Internet Protocol and e-business
access, reported audited financial results for the fiscal year
ended May 31, 2002.

Financial Highlights:

On a US GAAP basis, the Company's revenue for the year ended May
31, 2002 totaled US$30.5 million. Cash earnings per share were
US$0.08 for the year. Net cash earnings or operating profits for
the year were US$759,000 reflecting the continuing improved
productivity from the lower operating cost base of the business.

The net loss for the year was US$5.3 million after the effect of
the (non-cash) write down of US$2,945,000 of goodwill and
intangibles.

Revenue, cash earnings per share and net cash earnings or
operating profits for the year ended May 31, 2001 were US$36.8
million, US$0.12 and US$748,400, respectively. The net loss for
the year ended May 31, 2001 was US$2.5 million.

Net cash earnings or operating profits and cash earnings per
share exclude acquisition-related amortization, capital asset
depreciation and restructuring costs.

At May 31, 2002, the Company's balance sheets show a total
shareholders' equity deficit of about US$2.25 million.

President and Chief Executive Officer's Review:

Joe Perle, President and Chief Executive Officer, stated, "Our
costs are in line with revenues, and we delivered operating
profits in this fiscal year. Subsequent to the year-end we
initiated a strategy to increase demand for our products, by
improving our channel program and expanding marketing activities
as they relate to our VAR's. We also continued our sales push
into the strong Chinese economy."

"During the fiscal year we focused R&D activities on our high
growth product lines. This resulted in releasing the P-series
midsize router product line, and in several high-value product
feature releases such as SSH security on the Perle CS9000
console server family."

"Looking at the progress of these sales growth initiatives in
the current year, I am confident in the opportunities for sales
growth, despite the current market environment. I am therefore
hopeful of increasing profitability from our new product
releases, as well as Perle's increasing base of successful VAR
channel partners."

Chief Financial Officer's statement:

"During the year we continued with our disciplined monitoring of
operating costs and maintained the Company's expenditure levels
in line with the current sales levels, allowing us to deliver
operating profits," stated Derrick Barnett, Perle's Vice
President, Finance and Chief Financial Officer. "We generated
additional internal working capital by further decreasing
inventory and accounts receivables. We took appropriate write
downs in our goodwill and intangible assets, which in large part
contributed to our net loss for the year."

"Notwithstanding this return to operating profitability, the
Company has experienced a substantial downturn in sales and
operating earnings over the last three years, and had both
working capital and shareholder's equity deficiencies for the
year ended May 31, 2002. Should the slowdown in the technology
sector continue, it may not be possible for the Company to meet
its loan covenants and continue to operate as a going concern.
Under these circumstances, the Company may seek to obtain
waivers of its loan covenants and to secure additional
financing. However there can be no assurance that the Company's
lender will agree to any such waivers or that additional
financing will be forthcoming."

"Subsequent to the year end, on October 28, 2002, the Company
entered into a letter of commitment and terms of agreement with
its banker to revise its credit agreement, the terms of which
will include a reduction of interest payments and deferral and
extension of principal payments. As a result additional working
capital will be introduced to the business and will
significantly reduce any concerns about the Company's ability to
continue as a going concern."

"In addition, Perle agreed to issue to its banker warrants to
acquire 2,400,000 of its common shares in addition to repricing
500,000 warrants previously issued to the bank. Perle is
entitled to purchase up to 1,400,000 of these new warrants to
acquire common shares of the Company at a nominal amount and on
a pro rata basis, on early repayment of a portion of its credit
facility at any time prior to May 31, 2006. Perle currently has
approximately 9,600,000 common shares issued and outstanding."

"Because of our improved operating efficiencies together with
the new credit agreement, I remain confident regarding Perle's
long-term growth and profitability strategy."

Perle Systems is a leading developer, manufacturer and vendor of
award-winning networking products. These products are used to
connect remote users reliably and securely to central servers
for a wide variety of e-business and general business
applications. Perle specializes in Internet Protocol (IP)
connectivity applications, with an increasing focus on mid-size
IP routing solutions. Product lines include routers, remote
access servers, serial/console servers, emulation adapters,
multi-port serial cards, multi-modem cards, print servers and
network controllers. Perle distinguishes itself by its ownership
of extensive networking technology, depth of experience in major
network connectivity environments and long-term channel
relationships in major world markets. Perle Systems has offices
and representative offices in 12 countries in North America, The
United Kingdom, Europe and Asia and sells its products through
distribution channels worldwide. Its stock is traded on the
OTCBB (symbol PERL) and the Toronto Stock Exchange (symbol PL).
For more information about Perle and its products, access the
Company's Web site at http://www.perle.com


PETROMINERALS CORP: Considering Reorganization Under Chapter 11
---------------------------------------------------------------
In prior filings Petrominerals Corporation (OTC Bulletin Board:
PTRO) announced that an action was filed against the Company and
a former employee, Daniel H. Silverman, in California, along
with several other defendants by Sole Energy Company.  The
complaint alleges that the defendants, and each of them,
interfered with Sole's contractual relationship, prospective
economic advantage and fraud.  The crux of this matter issued
out of letter of intent negotiations between Sole and Nevadacor
on the purchase of HBOC.  Nevadacor terminated these
negotiations with Sole in writing prior to Company's offer to
purchase HBOC from Nevadacor. However, and notwithstanding the
termination by Nevadacor, Sole joined Petrominerals Corporation
as a Defendant.  A motion for summary judgment in favor of
Company was granted; then reversed and appealed. An amended
complaint naming additional plaintiffs was set for trial over
Company's objection and a jury verdict was entered after a
lengthy trial against Company for a total of $19,257,416.29.

Trial Counsel for Company expressed Company's position in the
following words:

"We believe that this outcome is outrageous. We plan the
following:

      1.  We will object to the entry of any judgment until such
          time as the pending appeal is resolved.  [In response
          to the company's objection, the trial judge recently
          ruled that he will not sign the proposed judgment until
          after he has had an opportunity to rule on post-trial
          motions.]

      2.  We will move for new trial and/or remittitur
          [reduction] of the amount of the judgments.

      3.  We will move for a [Judgment (for Defendant)
          Notwithstanding the Verdict]

      4.  We will appeal on a number of grounds, including, but
          not limited to:

           a.  the plaintiffs lack standing having never been
               parties to the letter of intent and/or assigning
               away any such rights

           b.  there is insufficient evidence of the existence of
               an agreement/prospective economic advantage

           c.  there is no evidence of any wrongful acts by
               either of the defendants [meaning Petrominerals
               Corporation and Petrominerals employee, Daniel H.
               Silverman]

           d.  the lost profits damages are based on speculation
               (as admitted by their expert)

We are disappointed, but not swayed regarding the merits of the
case. "

The Board of Directors is actively considering all of its
options including reorganization under Chapter 11 and has
deferred the date for the Annual Shareholder Meeting until the
Company's status is more certain.

The Board also determined that the office of Company should be
moved to San Clemente, California, to the address set forth
hereinabove.


PHILIPS INTERNATIONAL: Double Play Discloses 6.7% Equity Stake
--------------------------------------------------------------
Double Play Partners Limited Partnership, a Massachusetts
limited partnership, beneficially owns 489,100 shares of the
common stock of Philips International Realty Corporation,
representing 6.7% of the outstanding common stock of that
Company.  Double Play has sole power to vote, or direct the vote
of, and to dispose of, or direct the disposition of, the entire
amount of stock held.

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

As reported in Troubled Company Reporter's October 10, 2002
edition, Philips International's Board of Directors declared a
fifth liquidating distribution of $0.50 per share which was
payable on October 22, 2002, pursuant to the Company's plan of
liquidation.


READER'S DIGEST: Q1 2003 Results In Line with Revised Guidance
--------------------------------------------------------------
The Reader's Digest Association, Inc., (NYSE: RDA, RDB) reported
a loss of $0.05 per share for the first quarter of Fiscal 2003
ended September 30, 2002, in line with revised guidance.
Revenues were $517 million, EBITDA was $18 million and operating
profits were $2 million.  This compares with revenues of
$498 million, EBITDA of $11 million, operating profits of $3
million and a loss of $0.01 per share for the first quarter of
Fiscal 2002.  Free cash flow (cash flow before dividends, share
repurchases and acquisitions) improved by $9 million.

The first-quarter Fiscal 2003 results did not include $25
million in revenues and $16 million in operating profits from
certain book-marketing programs at Reiman Publications that the
company decided to recognize in the second quarter instead of
the first.  This resulted in a one-time shift of $0.10 per share
from the first to the second quarter.  Not including this shift,
EPS would have been $0.05, at the top end of previous guidance.
Due to the absence of such book-marketing profits, the first
quarter of Fiscal 2003 EPS results were unfavorably affected by
($0.04) from Reiman, primarily relating to interest expense on
the debt from the acquisition.  In addition, EPS results
improved by $0.02 in the quarter, principally due to settlement
of a 6-year-old lawsuit on terms more favorable than earlier
estimates.

At September 30, 2002, Reader's Digest's working capital
deficiency widens to about $138 million.

"First quarter operating results were consistent with our
overall expectations," said Thomas O. Ryder, Chairman and Chief
Executive Officer. "The performance of our domestic business
exceeded our expectations, led by significantly reduced losses
and improved performance at U.S. BHE.  These improvements were
offset by reduced activity and a weaker-than-expected
performance in our international operations."

Consolidated revenues grew by 4 percent to $517 million, driven
largely by the addition of Reiman, which contributed $68 million
during the first quarter.  Excluding Reiman, first-quarter
revenues declined by 10 percent, reflecting a major
restructuring at U.S. BHE in April, which resulted in the
elimination of unprofitable businesses and cutbacks in mail
quantity, and planned reductions in mail quantity in
international markets.  Other factors included: the elimination
of unprofitable businesses -- Gifts.com, Inc., New Choices and
Walking magazines -- that had contributed revenue in the Fiscal
2002 quarter; economic softness in most international markets;
the effects of severe floods in Eastern Europe; and lower
advertising and circulation revenues in U.S. Magazines.  This
was partially offset by double-digit revenue growth at Books Are
Fun.

Operating profits for the first quarter were $2 million, a
decrease of $1 million versus the year-ago quarter.  The decline
reflects lower results in International Businesses due to
decreased promotional activity, economic softness in all
markets, investment spending on new customer-acquisition
programs in all markets, as well as advertising and planned
circulation declines in U.S. Magazines.  Offsetting these
declines were dramatically improved results at U.S. Books and
Home Entertainment, which reduced operating losses by more than
$10 million, as well as improved results at QSP and Books Are
Fun.  Reiman contributed $2 million in operating profit and $10
million in EBITDA in the quarter.

"Our international results for the quarter reflect a planned
reduction in mailing activity in Europe to address intensity
issues in some markets. However, our results were also affected
by external events, most notably the soft global economy," Ryder
said.  "To offset the impact of such events, we have stepped up
re-engineering and cost-reduction activity in International
Businesses.  For the remainder of the year we expect
International Businesses to equal or exceed results of the
comparable Fiscal 2002 periods."

                               Outlook

The Company anticipates earnings in the range of $0.88 to $1.00
per share for the second quarter of Fiscal 2003.  This range
excludes the one-time costs related to the company's pending re-
capitalization.  This compares with EPS of $0.78 in the second
quarter of Fiscal 2002.  The company maintains its $1.20 to
$1.30 EPS expectations for full-year Fiscal 2003.

"We expect to see improvement in the second quarter," Ryder
said.  "Our optimism remains cautious, however, as the slowdown
in the global economy has affected all of our businesses in the
United States and abroad."

                       Operating Segment Results

North America Books and Home Entertainment

For the Fiscal 2003 first quarter, North America BHE had
operating profits of $3 million, up significantly from a loss of
$11 million in the first quarter of Fiscal 2002.  The
improvement was mostly driven by dramatically reduced losses in
U.S. operations of BHE, reflecting the elimination of
unprofitable products, as well as overhead savings, lower
promotion costs, and more efficient and profitable mailings.
After a difficult 18 months, U.S. BHE continues to see improved
predictability in its business.  The improvement in operating
profits also was driven by a strong performance by Books Are
Fun, which had double-digit increases in both revenues and
operating profits.

Fiscal 2003 first quarter revenues for the NA BHE segment were
$115 million, down from revenues of $141 million in Fiscal 2002.
The decline largely reflects a planned reduction in sweepstakes-
related marketing activity in U.S. BHE, offset slightly by the
gains at BAF.

International Businesses

International Businesses, comprising BHE and magazines outside
of North America, had revenues of $228 million and an operating
loss of $2 million in the first quarter of Fiscal 2003, compared
with revenues of $242 million and operating profit of $13
million in the year-ago quarter.  Both revenues and profits were
lower primarily due to a planned reduction in marketing
activities in many European markets, business impacts of
flooding in the Czech Republic, Hungary and Germany, and
economic-related softness in Europe and Latin America.  The
planned reduction in marketing activity primarily affected the
company's businesses in the United Kingdom and Poland, and, to a
lesser extent, Germany and France as several single-sales
activities were postponed to later in the year or eliminated.
Response rates were lower in Germany, some markets in Eastern
Europe, and Latin America, while advertising revenues were soft
in many markets.  The company expects performance to strengthen
in the balance of the year as new customer-acquisition and cost-
reduction initiatives gain momentum and mailings are sent that
were postponed in the first quarter.

Around the world, the company continued to invest in new
marketing efforts, including telemarketing, newspaper and
magazine inserts, and outside list acquisition, which
contributed to lower operating profits in the quarter.

U.S. Magazines

The U.S. Magazines segment had revenues of $174 million, up 51
percent from $115 million in the first quarter of Fiscal 2002.
The group had an operating loss of $1 million, versus a profit
of $1 million in the year-ago period.  Reiman contributed $68
million in revenue and $2 million in operating profits in the
quarter.

Excluding Reiman, revenues were off 9 percent and operating
profits fell by $5 million, reflecting the elimination of New
Choices and Walking magazines, advertising and circulation-
related softness at U.S. Reader's Digest magazine, offset
slightly by a modest improvement at QSP.  QSP had an increase in
revenues and reduced operating losses in the quarter.  QSP
historically loses money in the quarter as it ramps up for its
seasonally strong second quarter.

The company has three operating segments:

      * North America Books and Home Entertainment -- Select
Editions, series and general books, music, video and Young
Families products in the United States and Canada; Books Are
Fun; Reader's Digest magazine in Canada; QSP Canada; and
financial services marketing alliances and other strategic
initiatives in the United States and Canada.

      * International Businesses -- Products sold in more than 60
countries outside the United States and Canada, including:
Select Editions, series and general books, music, video and
Young Families products; Reader's Digest magazine in numerous
editions and languages, Special Interest magazines in the Czech
Republic, a personal finance magazine in the United Kingdom; and
financial services marketing partnerships and other strategic
initiatives in more than 30 countries.

      * U.S. Magazines -- Reader's Digest magazine in the United
States; Reiman Media Group, including magazines Taste of Home,
Light & Tasty, Quick Cooking, Birds & Blooms, Country, Country
Woman, Country Discoveries, Reminisce, Farm & Ranch Living, Your
Family and Crafting Traditions, as well as books, cooking
schools, country tours and other enterprises; QSP, Inc.; and The
Family Handyman, American Woodworker, Reader's Digest Large Type
Edition and Selecciones.


RELIANCE GROUP: Insurance Commissioner Sells Shopping Center
------------------------------------------------------------
M. Diane Koken, Insurance Commissioner for the Commonwealth of
Pennsylvania and the Liquidator of Reliance Insurance Company,
has sold a shopping center owned by RIC.  In an effort to raise
cash, RIC initiated the sale process before the Commissioner
assumed control of the estate.  The Commissioner justified the
sale to the Commonwealth Court on the grounds that the price
provided fair value and would bring an immediate influx of cash
into the estate, which was desperately needed at the time.

The shopping center was located on 38.3 acres of land in Fort
Worth, Texas.  The Center was comprised of approximately 317,000
square feet of retail stores.  RPI Ridgmar Town Square, Ltd.
bought the shopping center for $11,200,000.  The closing date of
the sale occurred on September 28, 2001. (Reliance Bankruptcy
News, Issue No. 31; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


RELIANCE INSURANCE: Court Fixes Dec. 31, 2003 Claims Bar Date
-------------------------------------------------------------
Reliance Insurance Company was placed in Liquidation by Order of
the Commonwealth Court of Pennsylvania on October 3, 2001,
pursuant to the provisions of Article V of the Insurance
Department Act of 1921.

In order to Propose an appropriate distribution of assets, the
types and amount of claims against Reliance must be determined.
Therefore, all persons who may have a claim against Reliance
Insurance, against the Liquidator, her agents or
representatives, or in any way affecting or seeking to affect
any of the assets of Reliance must file proofs of claim against
the Debtor before 5:00 p.m. on December 31, 2003, or the claim
may be denied. Proofs of claim must be filed even if the claim
has been the subject of litigation.

Proofs of claim must be addressed to:

       Proof of Claim Department, Statutory Liquidator of
        Reliance Insurance Company
       P.O. Box 13527
       Philadelphia, Pennsylvania 19101-3527


SAFETY-KLEEN CORP: Wants to Expand Experio Solutions' Engagement
----------------------------------------------------------------
Safety-Kleen Corp., and its debtor-affiliates want to expand the
scope of employment and retention of Experio Solutions
Corporation as consulting advisors in connection with the
Debtors' various process improvement initiatives nunc pro tunc
to October 1, 2002.

The Debtors earlier sought and obtained the Court's authority to
employ KPMG Consulting Inc., Lucidity Consulting Group, LP, and
Experio Solutions Corporation as Consulting Advisors to replace
Arthur Andersen LLP in connection with the Debtors' process
improvement initiatives nunc pro tunc to July 1, 2002.

Under the terms of the Initial Retention Order, the Debtors
retained Experio, KPMG and Lucidity to provide:

     (i) assistance in designing and administering a program
         management office through which the Initial Initiatives
         would be managed and administered, and

    (ii) experienced resources to perform and administer the
         individual Initial Initiatives.

Specifically, Experio and the other consulting firms were
initially engaged to address these finance and support services:

     (i) order entry and billing,

    (ii) collections and cash accounting,

   (iii) accounts receivable accounting,

    (iv) procurement-to-payment process,

     (v) payroll and benefits accounting,

    (vi) intercompany accounting,

   (vii) inventory and equipment-at-customers, and

(viii) the account analysis and "close-the-books" processes.

Experio's responsibilities consisted of:

     (i) recommending a design, and

    (ii) providing appropriate staffing for the PMO for the
         Process Improvement Initiatives.

Towards that end, Experio has, through the PMO, tracked the
progress of all process improvement initiatives and worked with
the Debtors' senior management team to:

     (i) address the timely resolution of issues and the resource
         allocations necessary to meet project timelines, and

    (ii) develop the necessary training and implementation plans
         to address material control weaknesses.

Experio and the other consulting firms have substantially
completed the PII Services in connection with the Initial
Initiatives.  During the course of providing the PII Services,
the Debtors and Experio have identified several new initiatives
to improve various other financial processes.  Several of the
New Initiatives relate to the execution and implementation of
the Initial Initiatives.

Specifically, pursuant to an engagement letter between the
Debtors and Experio, dated October 1, 2002, the scope of
Experio's  engagement is being expanded to address these finance
and support initiatives:

     (i) cash acceleration,

    (ii) "Most Valuable Partner" processing (The Most Valuable
         Partner program provides favorable pricing and billing
         for customers who consolidate their environmental and
         waste management services with Safety-Kleen),

   (iii) automated customer action form development,

    (iv) billing standardization,

     (v) training assessment and coordination,

    (vi) inventory processes, and

    (vii) close-the-books.

Additionally, Experio will provide PII Services in connection
with any other initiatives identified by the Debtors during the
course of Experio's engagement.

Certain of the New Initiatives relate to the implementation of
certain Initial Initiatives or are in response to certain issues
identified in connection with the Initial Initiatives.  For
example, the "Inventory Processes" and "Close the Books"
initiatives, both of which are New Initiatives, involve the
post-implementation support of recommendations developed in
connection with certain Initial Initiatives and adopted by the
Debtors (i.e., the Inventory and Equipment-At-Customers and
Account Analysis and "Close-the-Books" initiatives).  Similarly,
the Automated Customer Action Form Development and Billing
Standardization initiatives have been identified to increase the
efficiency and effectiveness of financial processes improved
after implementation of certain recommendations developed in
connection with certain Initial Initiatives, which addresses the
weaknesses and deficiencies of certain financial processes
(i.e., the Order Entry and Billing and Account Analysis and
Collections and Cash Accounting initiatives).

As previously disclosed in the Initial Application and Initial
Affidavit, Experio hired certain Arthur Andersen professionals
that previously provided the PII Services in connection with the
Initial Initiatives.  Due to the enlarged scope of Experio's
retention, although these individuals primarily will be
responsible for providing the PII Services in connection with
the New Initiatives on behalf of Experio, Experio may use its
other professionals who have not previously provided services to
the Debtors.

Experio intends to apply to the Court for the allowance of
compensation and reimbursement of expenses in connection with
providing the PII Services with respect to the New Initiatives
consistent with the compensation structure set forth in the
Engagement Letter.  With certain exceptions, Experio will be
compensated for its professional services and reimbursed for its
expenses in the same manner disclosed in the Initial Application
and Initial Affidavit.

In connection with the implementation of the "Cash Acceleration"
initiative, in addition to compensating Experio on an hourly
basis for its services, the Debtors propose to compensate
Experio based on the increase in collections on certain accounts
receivable realized by the Debtors.

The Cash Acceleration initiative focuses on improving the
collection of aged accounts receivable.  Based on historical
information, the Debtors have estimated that approximately 15%
of their accounts receivable outstanding between 90 and 365 days
and 100% of their accounts receivable outstanding more than 365
days is un-collectible.

Through the implementation of certain elements of the Cash
Acceleration initiative, Experio expects that the Debtors should
be able to increase the amount they collect on account of their
Aged Accounts Receivable. To the extent the Debtors are
successful in collecting more on their accounts receivable than
they have been historically, Experio will be entitled to 30% of
the increased collections realized by the Debtors. Pursuant to
the Engagement Letter, Experio will be entitled to a $1,000,000
maximum Gainshare.

It is the Debtors' understanding that Gainsharing arrangements
are common arrangements with respect to the rendition of similar
accounts receivable collection services.

Experio has been providing PII Services in connection with the
New Initiatives to the Debtors since October 1, 2002, and has
accrued approximately $45,000 in fees and $12,500 in expenses
since that time. Experio intends to seek compensation and
reimbursement for these fees and expenses in the first fee
application following Bankruptcy Court approval of the expanded
scope of its retention.

Except as disclosed, there are no proposed arrangements between
the Debtors and Experio for compensation.

Paul Dunn, Experio Vice-President, assures Judge Walsh that the
firm and its principals and professional employees:

     (a) do not have any connection with the Debtors, their
         creditors, or any other party-in-interest, or their
         attorneys or accountants,

     (b) do not hold or represent an interest adverse to the
         estates, and

     (c) are "disinterested persons" under Section 101(14) of the
         Bankruptcy Code, as modified by Section 1107(b).
         (Safety-Kleen Bankruptcy News, Issue No. 47; Bankruptcy
         Creditors' Service, Inc., 609/392-0900)


SAIRGROUP FINANCE: SDNY Court Fixes Nov. 22 as Claims Bar Date
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
schedules November 22, 2002, as the deadline for all creditors
of SAirGroup Finance (USA) Inc., wishing to assert a claim
against the Debtor, to file their proofs of claim.  Written
proofs of claim must be received by:

      Clerk, United States Bankruptcy Court
      Southern District of New York
      Alexander Hamilton Custom House
      One Bowling Green
      New York, New York 10004

                  and

      Allen & Overy
      1221 Avenue of the Americas
      New York, New York 10020
      Attn: Hugh McDonald, Esq.

to be deemed timely-filed on or before 5:00 p.m. on the Bar
Date.

Holders of claims who need not file their proofs of claim on the
Bar Date are:

   a) Any person or entity whose claim has been paid in full by
      the Debtor;

   b) Any person or entity that has already properly filed a
      proof of claim against the Debtor with this Court;

   c) Any person or entity whose claim has already been allowed
      by Order of this Court; and

   d) Any entity whose claim against the Debtor is not listed as
      disputed, contingent or unliquidated in the schedules.

Prior to the petition date, SairGroup Finance (USA), Inc.,
participated in and assisted with financing transactions on
behalf of its parent and sole shareholder, SAirGroup. The
Company filed for chapter 11 protection on September 3, 2002.
David C.L. Frauman, Esq., at Allen & Overy represents the Debtor
in its restructuring efforts.  When the Company filed for
protection from its creditors, it listed $460,161,000 in assets
and $582,888,000 in debts.


SENTRY TECHNOLOGY: Hires Balfour Capital to Raise Fresh Capital
---------------------------------------------------------------
Balfour Capital Advisors, LLC, a New York-based Financial
Advisory firm which specializes in providing operational and
financial restructuring to highly leveraged and distressed
companies, has been engaged by Sentry Technology Corporation as
Financial Consultant, to assist the Company in conducting an
organized search and evaluation regarding a possible corporate
transaction to gain access to greater resources and to exploit
the Company's products and technological advances. Balfour will
take the lead in attempting to raise up to $5,000,000 in
financing to assist the Company in bringing existing vendor
payables current and to achieve its longer-term goals. There can
be no assurance that any such transaction will be concluded.

Sentry's June 30, 2002, Balance Sheet shows $1.4 million in
shareholder equity -- half what it was at Dec. 31, 2002, after
two unprofitable quarters.  Sentry's seen double-digit
percentage sales declines in domestic revenues caused by "the
post September 11 soft economic environment, resulting in a
slowdown  or delay in new retail store openings  of  some of our
customers," according to the Company's latest quarterly report.

"We are pleased that Balfour is supporting our efforts to grow
Sentry," said Peter L. Murdoch, President and CEO of Sentry
Technology Corporation. "New funding, in combination with our
current [three-year $8-million] banking agreement with CIT
Business Credit and the continuing support of existing vendors,
will provide us with the interim financing necessary until a new
long-term financial partner is found. Our Board of Directors
engaged Balfour to examine the full range of available
alternatives for Sentry. We believe that an additional outside
investment is necessary to properly market the Company's new and
existing product lines."

Sentry Technology Corporation designs, manufactures, sells,
installs and services a complete line of Radio Frequency (RF)
and Electro-magnetic (EM) EAS and Closed Circuit Television
(CCTV) surveillance systems. The CCTV product line features
SentryVision(R), a proprietary, patented, traveling Surveillance
System including our latest generation SmartTrack system. The
Company's products are used by retailers to deter shoplifting
and internal theft, and by industrial and institutional
customers to protect assets and people. The recent partnership
with Dialoc ID Holdings BV expands the Company's product
offerings to include proximity Access Control and Radio
Frequency Identification (RFID) solutions.

Balfour Capital Advisors, LLC -- http://www.balfournyc.com--
provides advisory services to parties involved with highly
leveraged companies and special situations.  Balfour is able to
provide unique capabilities, including financial and operational
restructuring and flexible compensation structures that focus on
success-fee formulas.  The firm has seasoned professionals that
specialize in turnaround and financial advisory services, crisis
management, capital raising and investments, investment banking
and M&A advice, fairness and valuation opinions, accounts
receivables collections, and liquidations. This expertise spans
across various sectors including telecom, media, technology,
food service, aerospace, and general manufacturing.


SERVICE MERCHANDISE: Has Until Jan. 31 to Remove Pending Actions
----------------------------------------------------------------
Service Merchandise Company, Inc., and its debtor-affiliates
sought and obtained a Court order extending the removal period
with respect to pending prepetition civil actions to:

     (a) January 31, 2003; or

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

According to Paul G. Jennings. Esq., at Bass, Berry & Sims PLC,
in Nashville, Tennessee, the Debtors continue to be parties to
numerous proceedings involving a wide variety of claims.  These
proceedings are currently pending in various courts.

Mr. Jennings explains that additional time is required to
determine which of the state court actions will be removed, and
if appropriate, transfer to the Middle District of Tennessee.
This extension sought, Mr. Jennings says, will provide the
Debtors sufficient opportunity to make fully informed decisions
concerning the possible removal of their actions, as well as to
protect their valuable right to economically adjudicate lawsuits
if circumstances warrant removal.

Mr. Jennings assures the Court that the Debtors' adversaries
will not be prejudiced by this extension since prosecution
cannot take place without relief from the automatic stay.
(Service Merchandise Bankruptcy News, Issue No. 40; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


SMTC CORP: 3rd Quarter Results Consistent with Company Estimates
----------------------------------------------------------------
SMTC Corporation (Nasdaq: SMTX) (TSE: SMX), whose corporate
credit and senior secured bank loan are rated by Standard &
Poor's at B, reported third quarter revenue of $153 million, a
22% increase from the third quarter of 2001. The reported net
loss on a GAAP basis for the third quarter of 2002 of $13.4
million, includes restructuring and other charges of $13.7
million. This compares to a net loss on a GAAP basis for the
third quarter of 2001, including discontinued operations,
restructuring and other charges and goodwill amortization of
$39.4 million of $34.2 million. Adjusted net earnings for the
third quarter of 2002 are $0.3 million. This compares to an
adjusted net loss of $6.2 million for the third quarter of 2001.
The financial results demonstrate a return to positive adjusted
net earnings, a result of the Company's continued focus on cost
controls, and improved liquidity management.

Gross profit on a GAAP basis for the third quarter of 2002 was
$1.7 million compared to a loss of $19.5 million for the same
period in the prior year. Gross profit for the third quarter of
2002, excluding restructuring and other charges of $7.2 million,
was $8.8 million or 5.8%, versus $0.3 million or 0.2%, excluding
$19.8 million of restructuring and other charges, for the same
period last year. The improvement in the gross margin is a
result of lower manufacturing expenses.

The operating loss on a GAAP basis for the third quarter of 2002
was $11.3 million compared to $46.4 million for the same period
in the prior year. The operating income, excluding restructuring
and other charges, for the third quarter 2002 was $2.4 million
compared to an operating loss of $10.6 million for the same
period last year.

In response to the continuing weakness in our customers'
business, the Company is taking further steps to realign its
cost structure and plant capacity and announces third quarter
restructuring charges of $13.7 million, and anticipates fourth
quarter restructuring charges of between $11 million and $21
million, related to the cost of exiting equipment and facility
leases, severance costs and inventory exposures.

Effective January 1, 2002, the Company had unamortized goodwill
of $55.6 million. In response to the implementation of new
accounting standards, the Company completed its transitional
goodwill impairment testing in the third quarter and concluded
that a write-off of the entire amount was required as the
cumulative change in accounting principle as at January 1, 2002.

SMTC's President and C.E.O., Paul Walker commented, "I am
pleased with the progress our team has made despite the ongoing
weakness in technology end markets. We have continued to reduce
our costs and improve our efficiency which has resulted in
higher gross and operating margins, a return to profitability on
an adjusted earnings basis, and positive cash flow from
operations."

The Company achieved a net cash cycle of 15 days for the third
quarter of 2002, compared to 63 days for the same period in 2001
as it continues to drive working capital improvements. Days
sales outstanding improved to 42 days at the end of the third
quarter of 2002 from 65 days for the same period in 2001.
Inventory turns improved to 12 times at the end of the third
quarter of 2002, from 6 times for the same period in 2001. Days
payables also improved to 58 days at the end of the third
quarter from 67 days for the same period in 2001.

Frank Burke, Chief Financial Officer of SMTC added, "The third
quarter results are a continued demonstration of our commitment
to restructuring our business and realigning our operations to
the current and anticipated EMS environment. The Company's focus
on working capital and expense management has achieved
substantial benefits over the past twelve months with the
Company now reporting three consecutive quarters of positive
cash flow from operations. The Company has made some very
difficult decisions during the previous year but we have been
committed to aligning our expense structure with our sales
levels to achieve profitability. The Company remains committed
to its goals of effective working capital, manufacturing and
SG&A expense management."

Last year, at this time, the Company and its bank group agreed
to enter into an amendment to the Company's credit facility that
revised the covenants that apply for the year 2002 to correspond
to the Company's business plan. The Company has maintained a
positive working relationship with its lending syndicate and is
currently in the process of negotiating an amendment to its
credit facility to revise the covenants that apply for the
period from January 1, 2003 through June 30, 2004 to correspond
to the Company's current business plan.

                          2002 Outlook

The Company expects lower revenues in the fourth quarter as we
complete our previously announced disengagement with Dell and
our overall cautious view with respect to the current
environment. We expect the lower revenue to be offset by a
reduction in our cost structure resulting in a breakeven run
rate of between $110 million and $120 million.

SMTC Corporation is a global provider of advanced electronic
manufacturing services to the technology industry. The Company's
electronics manufacturing and technology centers are located in
Appleton, Wisconsin, Austin, Texas, Boston, Massachusetts,
Charlotte, North Carolina, San Jose, California, Toronto,
Canada, Donegal, Ireland and Chihuahua, Mexico. SMTC offers
technology companies and electronics OEMs a full range of value-
added services including product design, procurement,
prototyping, printed circuit assembly, advanced cable and
harness interconnect, high precision enclosures, system
integration and test, comprehensive supply chain management,
packaging, global distribution and after-sales support. SMTC
supports the needs of a growing, diversified OEM customer base
primarily within the networking, communications and computing
markets. SMTC is a public company incorporated in Delaware with
its shares traded on the Nasdaq National Market System under the
symbol SMTX and on The Toronto Stock Exchange under the symbol
SMX. Visit SMTC's Web site at http://www.smtc.comfor more
information about the Company.


SORRENTO NETWORKS: Board Approves 1-For-20 Reverse Stock Split
--------------------------------------------------------------
Sorrento Networks Corp. (Nasdaq:FIBR), a leading provider of
metro and regional optical networking solutions, announced that
it its board of directors approved a 1-for-20 reverse stock
split, effective Monday, Oct. 28, 2002.

The move is aimed at bringing the company's stock price into
compliance with Nasdaq listing requirements.

The company also announced that Nasdaq Staff has approved the
company's capital restructuring plan for bringing shareholders'
equity into compliance with listing requirements. The plan calls
for the restructuring of certain financings to equity
securities.

According to the Nasdaq Staff, "the Company provided a
definitive plan evidencing its ability to achieve and sustain
compliance with the Rule, and as such, Staff has determined to
grant an extension of time." Pursuant to the extension, the
company will be required to submit to the Nasdaq Staff, by Dec.
9, 2002, a definitive capital-restructuring plan, and to
implement the plan by Jan. 8, 2003.

"We are pleased that Nasdaq has granted us the time we need to
complete our capital restructuring efforts," said Phil Arneson,
Sorrento's chairman and CEO. "When completed, our restructuring
efforts will provide the necessary strength to our balance sheet
that can position the Company for continued growth and increased
shareholder value," he added.

Sorrento Networks, headquartered in San Diego, is a leading
supplier of intelligent optical networking solutions for metro
and regional applications worldwide. Sorrento Networks' products
support a wide range of protocols and network traffic over
linear, ring and mesh topologies. Sorrento Networks' existing
customer base and market focus includes communications carriers
in the telecommunications, cable TV and utilities markets. The
storage area network market is addressed though alliances with
SAN system integrators. Recent news releases and additional
information about Sorrento Networks can be found at
http://www.sorrentonet.com


SUPERIOR TELECOM: S&P Ups Rating to CCC After Debt Restructuring
----------------------------------------------------------------
Standard & Poor's Rating Services raised its corporate credit
and senior secured debt ratings on Superior Telecom Inc., to
triple-'C' from 'SD', or selective default, following the
company's successful completion of an announced debt
restructuring. The current outlook is negative.

Superior, based in East Rutherford, New Jersey, currently, has
approximately $1.4 billion in debt outstanding.

As a result of the restructuring, Superior has eliminated its
term loan amortization requirements for the remainder of 2002
and for the first six months of 2003. In total, amortization
payments will be reduced by more than $225 million through year-
end 2003. The company negotiated noncash payment-in-kind
interest on its $200 million subordinated notes in 2002 and is
negotiating to have the PIK option extend into 2003. Standard
& Poor's said that it expects that negotiations with the
subordinated note holders will be successful.

"The ratings reflect Superior's position as the largest U.S.
producer of copper cables and wires, a very aggressive financial
profile, an onerous debt maturity schedule, weak end-market
demand, and tight liquidity", said Standard & Poor's credit
analyst Paul Vastola. Superior's operations have been negatively
affected by weak conditions in the telecommunications market,
which are not expected to rebound until the latter half of 2003
at the earliest. Superior is highly dependent on capital
expenditures from the regional Bell operating companies (RBOCs),
all of which have cut back heavily on spending.

Standard & Poor's noted that the ratings could be lowered if
liquidity worsens or if the RBOCs continue to delay or further
reduce capital expenditures, which could lead to further
deterioration in Superior's operations. The ratings would also
be lowered should there be further debt restructurings.


TIME WARNER TELECOM: Banks Relax Covenants Under Credit Facility
----------------------------------------------------------------
Time Warner Telecom Inc. (Nasdaq: TWTC), whose corporate credit
is rated by Standard & Poor's at B, has successfully negotiated
an amendment to its bank credit facility.  The Company, among
other things, relaxed the consolidated leverage and interest
coverage ratios and reduced the total availability by 20% to
$800 million.  In addition, the interest rate spread increased
by 75 basis points on portions of the facility.  In conjunction
with the amendment, the Company intends to increase its net
borrowings by $170 million, while retaining $380 million of
undrawn funding.

"Our solid operating history and credible business plan allowed
us to gain additional covenant flexibility under our secured
credit facility," said David Rayner, Time Warner Telecom's
Senior Vice President and Chief Financial Officer.   "Although
we expected to meet future covenant requirements, we requested
this amendment to provide additional flexibility to our
operations and to remove any question as to the availability of
our undrawn credit lines. By eliminating excess capacity, we are
lowering our overall net interest expense related to this
facility."

Time Warner Telecom has been a leader in its sector, including
its focus on return on investment, positive cash flow and
liquidity.  "While others in the industry are capital
constrained or worse, our expected liquidity position allows us
to continue to deploy infrastructure to serve our customers,"
said Rayner.  "As our business plan is fully funded, we are not
distracted by liquidity concerns.  Our time is devoted to
running the business and providing excellent service to our
customers."

A copy of the amendment will be filed on form 8-K with the SEC.

Time Warner Telecom Inc., headquartered in Littleton, Colo.,
delivers "last-mile" broadband data, dedicated Internet access
and voice services for businesses.  Time Warner Telecom Inc.,
one of the country's premier competitive telecom carriers,
delivers fast, powerful and flexible facilities-based metro and
regional optical networks to large and medium customers.  Please
visit http://www.twtelecom.comfor more information.

Time Warner Telecom Inc.'s 10.125% bonds due 2011 (TWTC11USN1)
are trading at 31.5 cents-on-the-dollar, DebtTraders says. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=TWTC11USN1
for real-time bond pricing.


TRANSCARE: US Trustee Appoints Official Creditors' Committee
------------------------------------------------------------
Carolyn S. Schwatz, the United States Trustee for Region 2,
names five of the largest unsecured creditors of TransCare
Corporation and its debtor-affiliates, to serve on the Official
Committee of Unsecured Creditors in connection with these
chapter 11 cases.  The five appointees are:

      1) Hancock Mezzanine Partners, LP
         800 Clarendon Street, T57
         Boston, MA 02117
         Attn: Stephen J. Blewitt
         Senior Managing Director
         Tel. No.: 617 527-9624

      2) Albion Alliance Mezzanine Fund, LP
         c/o Albion Alliance LLC, General Partner
         1345 Avenue of the Americas, 37th Floor
         New York, NY 10105
         Attn: James C. Oendergast
         Charles Gonzales
         Tel. No.: 212 969-1549
         Tel. No.: 312 596-7906

      3) Gerard C. Schultz
         810 Petem Road
         Kingsville, MD 21087
         Fax No.: 410 391-9502

      4) Anthony J. Brown
         2805 Eagle Ct.
         Baldwin, MD 21013
         Tel. No.: 410 978-1490

      5) Petro, Inc.
         48 Harbor Park Drive
         Port Washington, NY 11050
         Attn: Gloria Fancyk
         Credit Analyst
         Tel. No.: 718 333-8830

TransCare, a privately held corporation, is one of the largest
privately owned providers of ambulance and ambulette services in
the United States, providing both emergency and non-emergency
services, primarily on a fee-for-service basis. The Company
filed for chapter 11 protection on September 9, 2002. Matthew
Allen Feldman, Esq., at Willkie Farr & Gallagher represents the
Debtors in their restructuring efforts. When the Debtors sought
protection from its creditors, it listed an estimated assets of
$10 million to $50 million and debts of over $100 million.


TROPICAL SPORTSWEAR: S&P Ratchets Low-B Ratings Up a Notch
----------------------------------------------------------
Standard & Poor's raised its long-term corporate credit rating
on Tampa, Florida-based apparel manufacturer Tropical Sportswear
International Corp., to double-'B'-minus from single-'B'-plus.
At the same time, the subordinated debt rating was also raised
to single-'B' from single-'B'-minus, and the bank loan rating
was raised to double-'B' from single-'B'-plus.

The company had about $110 million of total debt outstanding on
June 29, 2002. The outlook is stable.

"The upgrade reflects the company's improved financial profile
resulting from a $64 million equity infusion, of which about $32
million was used to reduce outstanding debt," said Standard &
Poor's credit analyst Susan Ding. "In addition, the company's
financial performance and related credit measures have improved
during the past several years, despite the difficult retail
environment and the weak economy."

The bank loan rating is one notch higher than the corporate
credit rating. Significant downward adjustments were made to the
values of accounts receivable and inventory (as well as to
property, plant, and equipment), to reflect the stresses
inherent in a default scenario. Standard & Poor's assessment of
the value of the company's collateral package supports full
recovery of the loan facility if a payment default were to
occur. Furthermore, the security interest in substantially all
the company's assets offers reasonable prospects for full
recovery of principal.

The ratings on Tropical Sportswear International reflect the
company's narrow product portfolio, customer concentration,
participation in the competitive apparel industry, and leveraged
financial structure. Somewhat mitigating these factors is the
low fashion risk associated with many of its products.

Tropical Sportswear produces basic men's and women's casual and
dress apparel under both private labels and the brand names that
it owns. Men's casual and dress pants represent about 67% of the
company's total apparel sales. During the past few years, sales
have directly benefited from the trend toward casual wear in the
U.S. Still, the apparel industry has been characterized by
unpredictable volatility in demand that has affected even such
basic core items as jeans and T-shirts. Moreover, Tropical
Sportswear competes with Levi Strauss' Dockers brand, which has
a larger and leading market position.


UNIFY CORP: Appoints Pete DiCorti as Chief Financial Officer
------------------------------------------------------------
Unify Corporation (OTCBB:UNFY), a leading provider of business
application platform solutions, announced that Pete DiCorti, has
been appointed chief financial officer effective Nov. 1, 2002.
He will succeed David Adams, the Company's current CFO, who is
resigning effective Oct. 31, 2002. As Unify's vice president of
finance and administration, and CFO, DiCorti will be responsible
for accounting, financial planning and analysis, human
resources, order processing, investor relations, and Securities
and Exchange Commission reporting.

DiCorti, 51, brings more than 25 years of national and
international experience in corporate finance, accounting, tax,
legal and human resources management, including 18 years working
with high-tech software and hardware companies. Before joining
Unify, DiCorti served as the business development officer for
JMW Capital Partners where he consulted with executives on
refinancing, restructuring, and mergers and acquisitions. Prior
to that, DiCorti was the vice president and CFO of the Grass
Valley Group, where he assisted in the planning and execution of
a $31 million private placement and refinancing, and built and
led a worldwide finance team. Additionally, DiCorti has held
executive management CFO positions with Pacific Access, Alldata
and Digital Research. DiCorti has a bachelor's degree in
accounting from Santa Clara University.

"We are extremely pleased to have someone of Pete's caliber join
Unify's executive team," said Todd Wille, president and CEO of
Unify. "Pete's extensive experience in developing financial
systems and internal controls, raising capital, and working with
securities analysts, investment bankers and venture capitalists
will be invaluable as Unify continues to execute on its
strategic plan."

Wille added, "Dave was a valued member of the Unify team and was
instrumental in resolving Unify's regulatory and legal issues.
Unify thanks him for his integrity and hard work, and we wish
him all the best."

Unify Corporation is a leading provider of business application
platform solutions that enable companies to deliver J2EE, Web,
graphical and character-based applications productively and
reliably. With more than 2,000 active customers in more than 45
countries, Unify has a well-established customer base of ISVs,
solution integrators and corporate IT departments. Unify's
customers include AT&T, Bear Stearns & Co, Biomeriuex, Boeing,
Credit Lyonnais, Federal Express, Fuji Electric Co., Ltd,
General Dynamics, Glaxo, Lexis/Nexis, Mitsubishi Denki Co.,
Ltd., Nortel Networks, Inc., Sescoi, Sherwood International
Systems and Triple G Systems Group. Headquartered in Sacramento,
Calif., Unify has offices in the UK and France in addition to a
worldwide network of distributors. Further information is
available at http://www.unify.com

                          *    *    *

In Unify's July 31, 2002 financial results on Form 10-Q filed
with the Securities and Exchange Commission on September 13,
2002, the Company said that its condensed consolidated financial
statements (for the quarter ended July 31, 2002) have been
prepared on a going concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the
normal course of business. The Company recorded a net loss of
$285,000 and has an accumulated deficit of $58,152,000. In
addition, the Company has experienced a decline in annual
revenues and decreases in cash and cash equivalents during the
previous three fiscal years. These factors indicate that the
Company may potentially be unable to continue as a going
concern.

The condensed consolidated financial statements do not include
any adjustments relating to the recoverability and
classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should the
Company be unable to continue as a going concern. The Company's
continuation as a going concern is dependent upon its ability to
sustain profitability and generate significant cash flows.
During fiscal 2001 and 2002, management realigned the Company's
operations, aggressively controlled costs, including a reduction
in force, re-focused on selling existing products to the
customer base and worked to resolve the lawsuits described in
Part II, Item 1 of this report. During fiscal 2003, management
plans to continue to sell existing products to the customer
base, aggressively sell and market ACCELL/Web to existing
customers, and launch and sell the Company's next generation
product to existing and new customers. There is no assurance
that management's plans will be successful or if successful,
that they will result in the Company continuing as a going
concern.


US AIRWAYS: HSBC Seek Stay Relief to Exercise Contractual Rights
----------------------------------------------------------------
HSBC Bank USA, successor-in-interest to J.P. Morgan Trust
Company, N.A., as Trustee for the holders of certain revenue
bonds, seeks relief from the automatic stay imposed by Section
362(a) of the Bankruptcy Code.  This will permit HSBC, as
Trustee, to exercise all of its contractual and state law rights
as a secured creditor of US Airways Group Inc., and its debtor-
affiliates.

Eric A. Schaffer, Esq., at Reed Smith, tells Judge Mitchell that
more than two years ago, USAir applied to the Philadelphia
Authority for Industrial Development for assistance in financing
an economic development project consisting of the design,
construction, improvement and/or furnishing of facilities at the
Philadelphia International Airport.

The Authority approved USAir's application.  To finance the
Project, the Authority approved the issuance and sale of
$71,140,000 Special Facility Revenue Bonds, Series 2000.  The
bonds were sold pursuant to the terms of a Trust Indenture dated
June 1, 2000 between the Authority and Chase Manhattan Trust
Company, N.A., as Trustee.

Mr. Schaffer explains that J.P. Morgan Trust Company became a
successor to Chase through a merger consummated at the end of
2000.  Pursuant to the terms of an Instrument Of Resignation,
Appointment And Acceptance, dated September 30, 2002, HSBC
succeeded the interests of J.P. Morgan and is presently the
Trustee under the Indenture.

The Loan Agreement expressly provided that the proceeds
generated from the Bond Sale would be the source of funds for
the Loan. Therefore, after the issuance and sale of the Bonds,
the Authority entered into a Loan Agreement dated June 1, 2000
with USAir, as borrower, whereby the Authority loaned to USAir
$71,140,000.

The Indenture required that the Trustee establish a Construction
Fund and a Debt Service Fund from the proceeds generated by the
sale of the Bonds:

a. Construction Fund -- Article III, Section 3.1 of the
    Indenture required the Trustee "to establish and maintain a
    Construction Fund . . . which shall be held separate and
    apart from all other funds and accounts established under
    this Indenture and from all other monies of the Trustee."

    It further requires the Trustee to "establish an account
    within the Construction Fund designated '2000 Account' for
    deposit of a portion of the 2000 Bond proceeds."  Indenture,
    Section 3.1; and

b. Debt Service Fund -- Article IV, Section 4.4 of the
    Indenture required the Trustee also to "establish a Debt
    Service Fund and shall make available to the Paying Agent the
    amount required to pay the interest on the Bonds when due and
    the principal of the Bonds as they mature upon surrender
    thereof." Indenture, Section 4.4.

    Pursuant to this section, the Trustee was required to
    "initially deposit in the Debt Service Fund from the proceeds
    of the 2000 Bonds an amount equal to the accrued interest on
    the 2000 Bonds received by the Authority as part of the
    purchase price of the 2000 Bonds and in a subaccount, the
    amount of proceeds of the 2000 Bonds to be used to pay
    capitalized interest on the 2000 Bonds. . ." Id.

Pursuant to the Loan Agreement, USAir granted a security
interest in the Construction Fund to the Indenture Trustee.
Pursuant to the Granting Clauses of the Indenture and in order
to secure the obligations under the Bonds, the Authority
expressly assigned, transferred, set over, pledged and granted
to the Trustee "a continuing lien on and security interest in
all of the right, title and interest of the Authority in the
Loan Agreement and the Pledged Authority Revenues."

The Pledged Authority Revenues are defined to include:

-- any payments received by the Authority from USAir pursuant to
    the Loan Agreement,

-- any and all amounts payable to the Authority on account of
    the Loan Agreement, and

-- all income and receipts or investments of the Funds
    established and maintained by the Trustee under the
    Indenture.

Mr. Schaffer relates that the liens and security interests are
made expressly applicable to the Debt Service Fund by Section
4.4 of the Indenture, which provides that "the monies in the
Debt Service Fund shall be held by the Trustee in trust,
deposited and secured or invested as provided in Article VI, and
shall be subject to a lien and charge in favor of, and as
security for the holders of Outstanding Bonds, until paid
out..."

In accordance with the Indenture, the Authority sold the Bonds
to a variety of individuals and institutional investors,
generating $71,400,000 in proceeds.  Subsequently, the Trustee
established the Funds.  The Loan was deemed "fully advanced upon
deposit of the net proceeds from the sale of the 2000 Bonds in
the Construction Fund or Debt Service Fund."

Mr. Schaffer tells the Court that as of the Petition Date, the
Trustee held in the Funds $22,180,975.55, of which
$21,641,111.05 is held in the Construction Fund and $539,864.50
is held in the Debt Service Fund.  The cash contained in the
Funds is part of the Authority Trust Estate, constitute Pledged
Authority Revenues and is subject to the liens and security
interests created by the Loan Agreement and the Indenture.

Mr. Schaffer argues that the Indenture, by its terms and through
the terms of the Loan Agreement, expressly provides that USAir
has no right to use or direct payment of any monies in the
Construction Fund absent a certification that no "Event of
Default" exists.

Pursuant to the Loan Agreement, a voluntary petition filing
under Title 11 constitutes an Event of Default.  Therefore, Mr.
Schaffer asserts that USAir has no right to use or direct
payment of any monies in the Construction Fund and the Trustee
has no obligation to disburse monies from the Construction Fund
pursuant to USAir's direction.

Accordingly, Mr. Schaffer argues that the automatic stay should
be lifted and terminated under the provisions of Section 362
(d)(2).  Under these provisions, a secured creditor is entitled
to relief from the stay if the debtor does not have any equity
in the secured creditor's collateral and the collateral is not
necessary to an effective reorganization.  Mr. Schaffer points
out that USAir has no equity in the funds.  There is no question
that the outstanding balance due under the Loan Agreement
exceeds the aggregate value of the money on deposit in the
Funds, $71,140,000 versus $22,000,000.

Moreover, Mr. Schaffer contends that the funds are not necessary
to an effective reorganization of USAir.  In the absence of
equity in the Funds, the burden of proof shifts to USAir to
demonstrate that the Funds are necessary to an effective
reorganization.  11 U.S.C. Sections 362(d)(2)(B), (g)(2).  Mr.
Schaffer does not believe that USAir can sustain its burden of
proof.

Mr. Schaffer adds that the automatic stay should be lifted and
terminated for "cause" under Section 362(d)(1).  Mr. Schaffer
explains that USAir is prohibited from using the money contained
in the Funds because:

   (i) it is unable to provide adequate protection to the
       Trustee,

  (ii) with respect to the Construction Fund, contractual
       provisions in the Indenture and the Loan Agreement
       expressly forbid their use, and

(iii) with respect to the Construction Fund, disbursements would
       constitute a financial accommodation within the meaning of
       Section 365(c)(2) of the Code.

Under these circumstances, so long as USAir remains a debtor
under the Code, there is no scenario under which USAir would
ever be entitled to use the monies contained in the Funds. As a
result, cause exists to lift the automatic stay to permit the
Trustee to exercise its contractual and state law rights against
the Funds. (US Airways Bankruptcy News, Issue No. 12; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


VENCOR: Wants Hearing on Hyperbaric Pact to Continue on Nov. 21
---------------------------------------------------------------
To recall, Judge Walrath instructed Vencor, Inc., in September
2001 to designate a representative to work with Hyperbaric
Management in acquiring additional third-party provider
contracts for the hyperbaric program.  Moreover, Judge Walrath
scheduled a status conference for a review on the parties'
efforts in obtaining additional third-party contracts.

Consequently, a status hearing was held on March 21, 2002.  The
Debtors presented the testimony of Allison Newlon, who detailed
the Debtors' efforts to acquire third-party provider agreements
and market the hyperbaric program -- efforts above and beyond
what was required of the Debtors under the Agreement.
Hyperbaric Management, on the other hand, presented alleged
evidence of their purported lost profits due to the Debtors'
alleged breach of the Agreement.

Judge Walrath allowed the Debtors an opportunity to investigate
Hyperbaric Management's information and to respond to the
alleged "cure" evidence presented at the Status Hearing.  The
Court is supposed to continue the hearing today, October 24,
2002.

Michael G. Busenkell, Esq., at Morris, Nichols, Arsht & Tunnell,
in Wilmington, Delaware, reports that the Debtors served a set
of interrogatories and document requests on June 12, 2002 to
Hyperbaric Management, who in turn, requested to be given an
extension of time to respond to the requests.  Hyperbaric
Management filed its responses, which consisted mostly of non-
specific objections that the discovery requests were overly
broad, unduly burdensome and vague.  Moreover, Hyperbaric
Management identified two witnesses, in addition to the
principal, that participated in the preparation of their cure
claim analysis.

Mr. Busenkell adds that after the receipt of Hyperbaric
Management's responses, the Debtors advised Hyperbaric
Management of its desire to depose the additional witnesses and
attempted to coordinate a mutually convenient time.  The Debtors
also asked Hyperbaric Management's consent to an adjournment of
the continued hearing on the Assumption Motion, the Objection
and Hyperbaric Management's cure claim to facilitate an adequate
opportunity to depose the witnesses.  However, Mr. Busenkell
tells Judge Walrath that, to date, the Debtors have not received
any response from Hyperbaric Management regarding their request
for an adjournment.

Nevertheless, the Debtors ask the Court to adjourn the hearing
to November 21, 2002 at 9:30 a.m. or other date and time as the
Court determines to be appropriate.

                          *    *    *

                           Background

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

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

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

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

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

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

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

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

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

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

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

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

This was met with resistance.  Within an allowed extended period
of time, HMS filed its responses objecting to the discovery
requests.  HMS tells the Court that the discovery requests are
overly broad, unduly burdensome and vague. (Vencor Bankruptcy
News, Issue No. 41; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


WESTAR AUTO: Bank One Forecloses on Security Interests in Certs.
----------------------------------------------------------------
By virtue of default by Westar Auto Finance, L.L.C., a
Washington limited liability company under a certain Amended
and Restated Revolving Credit Agreement with Bank One, Columbus,
N.A., dated as of July 22, 1997, Bank One will foreclose its
security interest in, and sell at public auction as a single
unit, together with other collaterals, the outstanding "Asset
Specific Trust Interest Certificates" of the company.

The sale shall be held at the King County Courthouse at 10:00
a.m. on November 20, 2002.

The sale is subject to the payment of all expenses and fees of
Bank One. Except as expressly set out with Bank One's ability to
credit bid, all sales will be for cash only.

Sale of the assets will be made in an "as is" and "where is",
without warranty of any kind. Potential bidders are encouraged
to perform such due diligence as they deem necessary, including
but not limited to review of the underlying documentation.

Bank One reserves the right to bid at the sale on its own behalf
and to credit such bid some or all of its secured claims.


WORLDCOM: Wins Approval to Implement Proposed Setoff Procedures
---------------------------------------------------------------
Worldcom Inc., and its debtor-affiliates obtained the Court's
approval of its proposed Prepetition Setoff Procedures and the
Postpetition Setoff Procedures, which are established in good
faith with the Utility Companies.

The terms of the proposed Prepetition Setoff Procedures and the
Postpetition Setoff Procedures with respect to setoffs by
Utility Companies that are both creditors and debtors of
WorldCom are:

A. No Utility Company may file any motion with the Court seeking
    authorization to effectuate a prepetition setoff, and the
    Debtors will not seek to compel a Utility Company to pay
    prepetition amounts due to the Debtors that have been
    withheld based upon a good faith assertion that the amounts
    are subject to the right of setoff against the Debtors,
    without first complying with the following Prepetition Setoff
    Procedures;

B. Any Utility Company seeking to accomplish a prepetition
    setoff should send written notice to the Debtors addressed
    to:

        Robert W. Rodrigues, Esq.
        WorldCom, Inc.
        1133 Nineteenth Street, Washington, DC 20036
        Phone: (202) 736-6865   Fax: (202) 736-6471
        E-mail:robert.w.rodrigues@wcom.com

        with a copy to:

        Alfredo R. Perez, Esq.
        Weil, Gotshal & Manges LLP
        700 Louisiana, Suite 1600, Houston, Texas 77002
        Phone: (713) 546-5000   Fax: (713) 224-9511
        E-mail:alfredo.perez@weil.com

                    -and-

        Christopher Marcus, Esq.
        Weil, Gotshal & Manges LLP
        767 Fifth Avenue, New York, New York 10153
        Phone: (212) 310-8000   Fax: (212) 310-8007
        E-mail:christopher.marcus@weil.com

C. If the Debtors seek to compel a Utility Company to make
    payment of prepetition amounts due that have been withheld on
    account of prepetition claims against the Debtors, they
    should send the Initial Notice to the applicable Utility
    Company, with a copy to any counsel that has filed a notice
    of appearance in these cases on behalf of the Utility
    Company;

D. The Initial Notice should contain this information for each
    claim potentially subject to setoff:

    -- Identification of the legal entity on each side of the
       transaction;

    -- A concise statement of the prepetition amounts alleged to
       be owed to and from the Debtors;

    -- Identification of the specific contract or agreement
       pursuant to which the alleged prepetition amounts are
       owed, including any account number or other identifying
       information for the account in question; and

    -- Contact information for a person with settlement authority
       to resolve the matter;

E. Not later than 20 business days after service of the Initial
    Notice, the counterparties should participate in a mandatory
    settlement conference, either in person or by telephone.  The
    settlement conference should be attended by representatives
    of the Utility Company and the Debtors who have settlement
    authority to resolve the matter.  The purpose of the
    settlement conference will be to determine if agreement can
    be reached on the amount of any prepetition setoff, or to
    determine whether additional information is required.  If
    mutually agreed upon by the parties, the settlement
    conference may consist of a series of actual meetings or
    telephonic conferences.  If an additional exchange of
    information is required, the counterparties should make good
    faith efforts to provide each other with the information as
    the other reasonably requests within 10 business days of the
    settlement conference, and should convene a follow-up
    conference within 20 business days of the initial conference;

F. If the counterparties reach agreement with respect to any
    prepetition setoff, the Debtors should file with the Court a
    summary notice setting forth the essential terms of the
    agreement reached, including the amount of the setoff to be
    effected and the amount of the payment, if any, to be made to
    the Debtors.  The Notice of Setoff should be served on:

     -- the United States Trustee;
     -- counsel for the statutory committee of unsecured
        creditors;
     -- counsel for the Debtors' postpetition lenders; and
     -- counsel for the applicable Utility Company.

    If no objection is received within 7 days of filing and
    service of the Notice of Setoff, the applicable Utility
    Company may effect the setoff without further order of the
    Court and should, within 3 business days, pay to the Debtors
    any net prepetition amounts due and owing to the Debtors
    after application of the setoff.  If a timely objection is
    received, the Debtors will set the matter for hearing on a
    regularly-scheduled hearing date and serve notice of the
    hearing in accordance with the Court's order dated July 29,
    2002, establishing notice procedures.  If no response or
    objection to the Notice of Setoff is timely filed, the Notice
    of Setoff will have the effect of a final order of the Court
    approving a stipulated settlement of the setoff;

G. If, after an initial settlement conference and, to the extent
    applicable, a follow-up conference, the Debtors and a Utility
    Company are unable to reach agreement with respect to a
    prepetition setoff, either counterparty may file a motion
    with the Court seeking appropriate relief; and

H. Nothing herein will be deemed to grant any Utility Company
    the right to setoff any postpetition amounts owing to the
    Debtors against any prepetition amounts owed by the Debtors
    or to eliminate the requirement of mutuality in order to
    assert a right of setoff. (Worldcom Bankruptcy News, Issue
    No. 11; Bankruptcy Creditors' Service, Inc., 609/392-0900)


WORLDCOM: 80% of Q3 Defaults Results from Company's Bankruptcy
--------------------------------------------------------------
Ten high yield issuers defaulted on a combined $4.6 billion in
bonds in September, bringing the volume of defaults in the third
quarter to $33.2 billion. Nearly 80% of the third quarter tally
resulted from WorldCom's bankruptcy filing in July. The number
of issuers defaulting declined substantially in the third
quarter to 28 from 53 in the second quarter but default volume
remained high due almost entirely to WorldCom. This trend is
expected to continue as long as the telecom sector continues to
lead defaults. Excluding telecom, the number of defaulted
issuers in the third quarter was the lowest quarterly level in
nearly two years.

The year to date default rate ended September at 14.3%, or 10.9%
excluding fallen angel defaults. The trailing twelve month
default rate ended September at 16.6%, 13% excluding fallen
angel defaults. Year to date default volume hit $90.5 billion in
September, exceeding full year 2001's $78.2 billion.

Summary of Default Activity through September:

      -- In September, the year to date default rate reached
14.3% on default volume of $90.5 billion;

      -- A total of 136 issuers defaulted on 316 bond issues;

      -- The telecom and cable sectors continued to represent the
biggest concentration of defaults at a combined $66.8 billion or
73.8% of the nine month volume. Excluding the two sectors, the
default rate for the remainder of the high yield market was 5.2%
through September;

      -- The weighted average recovery rate for the first nine
months of the year (excluding fallen angel defaults) was 28% of
par. To date, 2002 has produced a weighted average recovery rate
nearly twice the level of 15% of par recorded in 2001. The
biggest drain on the average recovery rate this year was
telecom. The sector experienced an average recovery rate of 14%
of par through September, up marginally from the 11.5% recovery
rate of 2001;

      -- The top five industry default rates through September
included: Telecommunications (38.5%), Insurance (35.8%), Cable
(34.3%), Metals and Mining (19.3%) and Retail (11.8%). The high
default rate for Insurance was due entirely to Conseco;

      -- Approximately $16.7 billion or 18.5% of default volume
through September came from issuers domiciled outside of the
U.S. Further, 80.1% of these defaults were concentrated in cable
and telecom. In the first nine months of 2001, $8.7 billion or
14.5% of defaults came from non-U.S. issuers (Fitch includes
defaults on yankee issues in its U.S. default index.).

        Overview of the Fitch U.S. High Yield Default Index

Fitch's default index is based on the U.S., dollar denominated,
non-convertible, speculative grade bond market (the rating
equivalent of 'BB+' and below). Fitch includes rated and non-
rated, public bonds and private placements with 144A
registration rights. Defaults include missed coupon or principal
payments, bankruptcy, or distressed exchanges. Default rates are
calculated by dividing the volume of defaulted debt by the
average principal volume outstanding for the period.

Fitch's high yield default studies are available in the 'Credit
Market Research' section on the Fitch Ratings Web site at
http://www.fitchratings.com


* Shoylekov Named Special Counsel to Cadwalader's London Office
---------------------------------------------------------------
Cadwalader, Wickersham & Taft has bolstered its Project Finance
Group by naming Richard Shoylekov, formerly General Counsel of
AGIP, a major oil and gas company based in Milan, as Special
Counsel in the London office.

Mr. Shoylekov's experience includes a wide range of
international upstream oil and gas projects, including
exploration and production contracts, joint ventures, pipeline
transportation and sales, and company and asset acquisitions. He
has a proven track record in the UK and across Europe as well as
in emerging markets including the former Soviet Union and Africa
advising on investment projects as well as handling legal,
transactional and negotiation issues.

"We look forward to having Richard join Cadwalader's London
office. His experience not only complements but also
substantially enhances the capabilities of our highly sought
after Projects Group," said Andrew Wilkinson, Managing Partner
of Cadwalader's London office.

"Richard is well known in the oil & gas and pipeline sectors,"
said Paul Biggs, Head of Cadwalader's European Project Finance
practice in London and Europe. "Having worked on the client side
for several years, his knowledge of what works in the industry
will be valuable to all members of the group as we continue to
develop and act on further major project instructions. His
familiarity with projects in the former Soviet Union is also a
great benefit to the group as we build this geographic
specialization."


"I look forward to collaborating with Paul Biggs, and the strong
team of projects lawyers he has assembled, in particular Bill
Rubin whose experience in Central and Eastern Europe complements
my familiarity with projects in the former Soviet Union," said
Mr. Shoylekov.

Prior to serving as General Counsel for AGIP, Mr. Shoylekov held
various titles with the company including Business Development
and Legal Manager and Head of Legal and Company Secretary. In
1994 he was an Assistant Solicitor for Watson, Farley &
Williams. From 1991 until 1994 he served as a Legal Advisor to
British Gas Exploration and Production where he handled upstream
oil and gas exploration and development matters. He began his
career as a trainee at Freshfields, later serving as an
Assistant Solicitor for the firm. Mr. Shoylekov speaks a number
of languages including Italian, French and Russian.

He received his B.A. from Downing College, Cambridge in 1987 and
graduated form Guildford College of Law in 1988. He was admitted
to practice English law in 1990.

Cadwalader, Wickersham & Taft, established in 1792, is one of
the world's leading international law firms, with offices in New
York, Charlotte, Washington and London. Cadwalader serves a
diverse client base, including many of the world's top financial
institutions, undertaking business in more than 50 countries in
six continents. The firm offers legal expertise in
securitization, structured finance, mergers and acquisitions,
corporate finance, real estate, environmental, insolvency,
litigation, health care, global public affairs, banking, project
finance, insurance and reinsurance, tax, and private client
matters. More information about Cadwalader can be found at
http://www.cadwalader.com


* Meetings, Conferences and Seminars
------------------------------------
November 18-19, 2002
    EUROLEGAL
       Insurance Exit Strategies
          Kingsway Hall, London
             Contact: +44 0 20 7878 6886

November 20, 2002
    New York Institute of Credit
       Bankruptcy
          Contact: info@nyic.org; 212-629-8686; (fax)212-629-8787

November 20th 6:00-7:15pm
    New York Institute of Credit
       4th Trustees Award
          Contact: info@nyic.org; 212-629-8686; (fax)212-629-8787

November 21-24, 2002
    COMMERCIAL LAW LEAGUE OF AMERICA
       82nd Annual New York Conference
          Sheraton Hotel, New York City, New York
             Contact: 312-781-2000 or clla@clla.org
                          or http://www.clla.org/

December 2-3, 2002
      RENAISSANCE AMERICAN MANAGEMENT, INC. & BEARD GROUP
           Distressed Investing 2002
                The Plaza Hotel, New York City, New York
                     Contact: 1-800-726-2524 or fax 903-592-5168
                          or ram@ballistic.com

December 5-7, 2002
    STETSON COLLEGE OF LAW
           Bankruptcy Law & Practice Seminar
                Sheraton Sand Key Resort
                     Contact: cle@law.stetson.edu

December 5-8, 2002
    AMERICAN BANKRUPTCY INSTITUTE
       Winter Leadership Conference
          The Westin, La Paloma, Tucson, Arizona
             Contact: 1-703-739-0800 or http://www.abiworld.org

February 22-25, 2003
    NORTON INSTITUTES ON BANKRUPTCY LAW
       Litigation Institute I
          Marriott Hotel, Park City, Utah
             Contact: 1-770-535-7722 or
                          http://www.nortoninstitutes.org

March 6-7, 2003
    ALI-ABA
       Corporate Mergers and Acquisitions
          San Francisco
             Contact: 1-800-CLE-NEWS or http://www.ali-aba.org

March 27-30, 2003
    NORTON INSTITUTES ON BANKRUPTCY LAW
       Litigation Institute II
          Flamingo Hilton, Las Vegas, Nevada
             Contact: 1-770-535-7722
                          or http://www.nortoninstitutes.org

March 31 - April 01, 2003
      RENAISSANCE AMERICAN MANAGEMENT, INC. & BEARD GROUP
        Healthcare Transactions: Successful Strategies for
           Mergers, Acquisitions, Divestitures and Restructurings
               The Fairmont Hotel Chicago
                  Contact: 1-800-726-2524 or fax 903-592-5168 or
                           ram@ballistic.com

April 10-13, 2003
    AMERICAN BANKRUPTCY INSTITUTE
       Annual Spring Meeting
          Grand Hyatt, Washington, D.C.
             Contact: 1-703-739-0800 or http://www.abiworld.org

May 1-3, 2003
    ALI-ABA
       Chapter 11 Business Organizations
          New Orleans
             Contact: 1-800-CLE-NEWS or http://www.ali-aba.org

May 8-10, 2003
    ALI-ABA
       Fundamentals of Bankruptcy Law
          Seattle
             Contact: 1-800-CLE-NEWS or http://www.ali-aba.org

June 19-20, 2003
      RENAISSANCE AMERICAN MANAGEMENT, INC. & BEARD GROUP
           Corporate Reorganizations: Successful Strategies for
              Restructuring Troubled Companies
                  The Fairmont Hotel Chicago
                     Contact: 1-800-726-2524 or fax 903-592-5168
                              or ram@ballistic.com

June 26-29, 2003
    NORTON INSTITUTES ON BANKRUPTCY LAW
       Western Mountains, Advanced Bankruptcy Law
          Jackson Lake Lodge, Jackson Hole, Wyoming
             Contact: 1-770-535-7722
                          or http://www.nortoninstitutes.org

July 10-12, 2003
    ALI-ABA
       Partnerships, LLCs, and LLPs: Uniform Acts, Taxation,
          Drafting, Securities, and Bankruptcy
             Eldorado Hotel, Santa Fe, New Mexico
                Contact: 1-800-CLE-NEWS or http://www.ali-aba.org

December 3-7, 2003
    AMERICAN BANKRUPTCY INSTITUTE
       Winter Leadership Conference
          La Quinta, La Quinta, California
             Contact: 1-703-739-0800 or http://www.abiworld.org

April 15-18, 2004
    AMERICAN BANKRUPTCY INSTITUTE
       Annual Spring Meeting
          J.W. Marriott, Washington, D.C.
             Contact: 1-703-739-0800 or http://www.abiworld.org

December 2-4, 2004
    AMERICAN BANKRUPTCY INSTITUTE
       Winter Leadership Conference
          Marriott's Camelback Inn, Scottsdale, AZ
             Contact: 1-703-739-0800 or http://www.abiworld.org

The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday.  Submissions via
e-mail to conferences@bankrupt.com are encouraged.

                           *********

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 ***