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        T R O U B L E D   C O M P A N Y   R E P O R T E R

           Thursday, December 12, 2002, Vol. 6, No. 246

                          Headlines

ABRAXAS PETROLEUM: Receives Commitment for New Credit Facility
ADVANCED GLASSFIBER: Files for Chapter 11 Reorg. in Delaware
ADVANCED GLASSFIBER: Case Summary & 20 Largest Unsec. Creditors
ADVOCAT INC: Appoints L. Glynn Riddle as New Chief Fin'l Officer
AIR CANADA: Revenue Passenger Miles Climb 0.5% in November

ALTAIR NANOTECHNOLOGIES: Gets 6-Month Nasdaq Listing Extension
AMERICAN TRANS AIR: Closes Two-Stage Pre-Funded Debt Offering
AMES DEPARTMENT: Wins Nod to Sell Designation Rights to Shaw's
ANC RENTAL: Court Okays Stauback Realty as New York Broker
ANNUITY & LIFE: S&P Hatchets Counterparty Credit Rating to BB-

ARMSTRONG HOLDINGS: Gets Okay to Amend Postpetition Credit Pact
ASIA GLOBAL: Wants to Assign Contracts & Lease to Asia Netcom
ASSET SECURITIZATION: Rating on Ser. 1997-D5 Class B-1 Cut to D
ATLAS AIR WORLDWIDE: CFO Douglas A. Carty Resigns from Company
AVATEX CORP: Files for Chapter 11 Protection in Dallas, Texas

BATTERY TECHNOLOGIES: Swedish Unit Receives Bankruptcy Petition
BROADWING INC: Goldman Sachs to Bring-In $200-Million Investment
BUDGET GROUP: Wants to Up Equity Contribution to German Unit
CABLEVISION SYSTEMS: Will Pay Quarterly Dividend on Preferreds
CELL TECH: Independent Auditors Express Going Concern Doubts

CHARTER COMMS: Streamlining Organization into Five Divisions
CONDOR TECHNOLOGY: Sells Certain Assets to Answerthink for $1MM
COVANTA ENERGY: Court OKs Dissolution of 2 Spanish Subsidiaries
CROWN CLO: S&P Assigns BB+ Rating to Ser. 2002-1 Class E Notes
DANA CORP: Appoints Cheryl W. Grise to Board of Directors

DDI CORP: Commences Trading on Nasdaq SmallCap Market Wednesday
DECRANE AIRCRAFT: S&P Places B+ Rating on CreditWatch Negative
DELHAIZE AMERICA: Cash Flow Issues Spur S&P to Cut Rating to BB+
DOMAN INDUSTRIES: Canadian Court Extends CCAA Stay Until Feb. 28
ECHOSTAR COMMS: Pulls Plug on Proposes Merger Pact with Hughes

ECONNECTIONS INC: Court Fixes Jan. 10, 2003 Claims Bar Date
ENCOMPASS SERVICES: Signs-Up Weil Gotshal as Chapter 11 Counsel
ENRON: Court Approves Sale of Natural Gas Liquids Inventories
ENVIRONMENTAL OIL: Files for Chapter 11 Reorganization in Idaho
EXIDE TECH.: Asks Court to Further Extend Exclusive Periods

FEDERAL-MOGUL: U.S. Trustee Questions FTI's Disinterestedness
FOAMEX INT'L: Elects CEO Thomas E. Chorman to Board of Directors
GASEL TRANSPORTATION: Sept. 30 Working Capital Deficit Tops $5MM
GENUITY INC: Hires Skadden Arps to Prosecute Chapter 11 Cases
GLOBAL CROSSING: Wins Approval of Settlement with 360networks

GLOBAL CROSSING: Achieves Major VoIP Milestone with Sonus
GOLDMAN INDUSTRIAL: Wants to Extend DIP Financing Until Feb. 22
HASBRO INC: Board Declares Quarterly Cash Dividend on Shares
HASBRO INC: Ted Philip Joins Company's Board of Directors
HOCHHEIM PRAIRIE CASUALTY: Fin'l Strength Rating Down to Bpi

HOCHHEIM PRAIRIE CASUALTY: Fin'l Strength Rating Lowered to Bpi
HOCHHEIM PRAIRIE FARM: S&P Downgrades FS Rating to Bpi
IESI CORP: Commences Exchange Offer for 10-1/4% Sr. Sub. Notes
IL ANNUITY: S&P Slashes Financial Strength Ratings to BB+
INTEGRATED HEALTH: Exclusive Period Hearing Continues Next Weds.

INTERLEUKIN GENETICS: Request for Continued Nasdaq Listing Nixed
ISLE OF CAPRI: Arbitrators Rule Company Liable for $4.5M Damages
KMART CORP: Seeks Approval of HTC Global Purchase Agreement
LAIDLAW INC: Douglas A. Carty Appointed as SVP and CFO
LAIDLAW INC: Court Approves Fee Applications of 3 Professionals

LERNOUT: L&H N.A. Sues L&H Investment to Recover Pref. Transfer
LUBY'S INC: Will Publish Fiscal First Quarter Results on Tuesday
MDS INC: Firming-Up $311-Million Private Debt Placement
MEDISOLUTION: Closes Up to $5-Mill. Credit Facility with Trilon
MICROCELL: Renegotiates Terms of Major Contract with Vendor

MILLICOM: Taps Lazard Freres to Review Strategic Alternatives
MOODY'S CORP: Board Declares Quarterly Common Stock Dividend
NATIONAL CENTURY: Wants to Continue Using American Express Tax
NAVISITE INC: Will Publish First Quarter 2003 Results on Monday
NAVISTAR: Issuing $190MM of Senior Conv. Bonds to Repay Debts

NOMA CO.: Canadian Court Grants Relief Under CCAA's Section 18.6
PACIFIC GAS: Makes $75MM in Property Tax Payments in California
PARK PHARMACY: Case Summary & 20 Largest Unsecured Creditors
PEREGRINE SYSTEMS: Hires Yetter & Warden for Motive Litigation
PIONEER COMPANIES: Appoints Gary Pittman as Chief Fin'l Officer

PROTEIN DESIGN: S&P Revises Outlook on Low-B and Junk Ratings
ROYAL HAVEN: Case Summary & 20 Largest Unsecured Creditors
SEITEL INC: Brings-In Larry E. Lenig as New Chief Exec. Officer
SLI INC: Gets Court Nod to Hire Asset Appraisal as Consultant
SOVEREIGN SPECIALTY: S&P Rates $40MM Term Loan Facility at BB-

SPX CORP: S&P Assigns Lower-B Ratings to New Loans & Sr. Notes
STUDENT ADVANTAGE: Fails to Meet Nasdaq Listing Requirements
SUN MEDIA: S&P Ratchets Senior Secured Debt Rating Up a Notch
TRI-STATE OUTDOOR: Plan Voting Draws to a Close Tomorrow
TRI-STATE OUTDOOR: Court to Consider Committee's Plan on Dec. 19

TRENWICK GROUP: Third Quarter Operating Loss Widens to $135 Mil.
UNIROYAL TECH: Wants Case Converted to Chapter 7 Liquidation
UNITED AIRLINES: Receives Court Approval of 'First Day' Motions
UNITED AIRLINES: The Details of the Bank One $300MM DIP Facility
UNITED AIRLINES: The Details of the $1.2 Billion DIP Facility

WARNACO GROUP: Asks Court to Approve Esprit Settlement Agreement
WINSTAR: Trustee Wants to Make Final Payment to Professionals
WORLDCOM INC: Court Approves KPMG's Engagement as Accountants

* Alan D. Scheinkman Joins DelBello, Donnellan as Partner
* DebtTraders' Real-Time Bond Pricing

                          *********

ABRAXAS PETROLEUM: Receives Commitment for New Credit Facility
--------------------------------------------------------------
Abraxas Petroleum Corporation (AMEX:ABP) has received a
commitment from a lender for a new senior credit agreement for
up to $50 million.

The borrowing base will be determined from time to time based
upon the value of our crude oil and natural gas reserves. Based
on current calculations of the value of our crude oil and
natural gas reserves, if the exchange offer, announced on Dec.
9, 2002 by the Company, was consummated and the senior credit
agreement was closed by Jan. 8, 2003, the initial borrowing base
would be approximately $45.5 million, of which, approximately
$40.5 million will be available for use by Abraxas to fund the
restructuring transactions.

Subject to earlier termination or the occurrence of events of
default or other events, the stated maturity date under the
senior credit agreement will be the third anniversary of the
closing date of the senior credit agreement. The applicable
interest charged on the outstanding balance under the senior
credit agreement will be the prime rate announced by Wells Fargo
Bank, N.A. plus 4.5%, provided that portions of accrued interest
may be capitalized and added to the principal amount of the
outstanding balance under the senior credit agreement. Any
amounts in default under the senior credit agreement will accrue
interest at the current rate, plus an additional 4%. At no time
will any amounts outstanding under the senior credit agreement
accrue interest at a rate less than 9%.

Under the terms of the senior credit agreement, the Company will
be required to establish deposit accounts at financial
institutions acceptable to our new lender and we will be
required to direct our customers to make all payments into these
accounts. The amounts in these accounts would be transferred to
the lender upon the occurrence and during the continuance of an
event of default under the senior credit agreement.

The obligations of Abraxas under the senior credit agreement
will be guaranteed by Sandia Oil & Gas Corp., Sandia Operating
Company, and Wamsutter Holdings Inc., all current subsidiaries
of the Company and Newco Canada (a subsidiary of the Company
that will be established upon closing of the Company's
previously announced sale of Canadian assets) and all future
subsidiaries. Obligations under the senior credit agreement will
be secured by a first lien security interest in substantially
all of Abraxas' and the guarantors' assets, including all crude
oil and natural gas properties and natural gas processing
plants.

Under the senior credit agreement, Abraxas will be subject to
customary covenants and reporting requirements. Certain
financial covenants will require Abraxas to maintain minimum
levels of consolidated EBITDA, minimum ratios of consolidated
EBITDA to cash interest expense and a limitation on annual
capital expenditures. To the extent amounts outstanding under
the facility exceed the borrowing base, Abraxas will be required
to make a mandatory repayment. In addition, at the end of each
fiscal quarter, if the aggregate amount of our cash and cash
equivalents exceeds $2.0 million, we will be required to repay
the loans under the senior credit agreement in an amount equal
to such excess. Abraxas is also obligated to use its best
efforts to assist the lender with syndication of the senior
credit agreement, which syndication may result in the alteration
of the terms of the senior credit agreement.

The closing of the senior credit agreement is subject to the
closing of Abraxas' proposed exchange offer and customary and
certain other conditions, including the following: the lender
must be satisfied that it will have a perfected first lien on
substantially all of the assets of Abraxas and the guarantors
upon closing of the senior credit agreement; the lender must be
satisfied that Abraxas has deposited funds sufficient to effect
a redemption and/or defeasance of the first lien notes, and
immediately upon deposit of such funds the trustee under the
indenture for the first lien notes shall have terminated,
discharged and/or released its liens and mortgages on all of our
assets; and we must have entered into hedging agreements on not
less than 25% or more than 75% of our projected oil and gas
production.

Upon consummation of the exchange offer and closing of the
senior credit agreement, we expect to have approximately $5
million in cash available under the senior credit agreement to
be used for the continued development of our existing crude oil
and natural gas properties.

In addition to a commitment for the senior credit agreement
described above, the Company has received an alternative
commitment from the same lender for a maximum of up to $68
million. The proceeds of this alternative senior credit
agreement would be used to redeem our first lien notes in the
event that we cannot successfully complete the exchange offer
and if we do not complete our previously announced sale of
Canadian assets. This alternative senior credit agreement would
mature in May 2004, and would otherwise have substantially the
same terms, conditions and covenants of the senior credit
agreement described above.

Abraxas Petroleum Corporation is a San Antonio-based crude oil
and natural gas exploitation and production company that also
processes natural gas. The Company operates in Texas, Wyoming
and western Canada. Please visit www.abraxaspetroleum.com for
the most current and updated information. The Web site is
updated daily to comply with the SEC Regulation FD (Fair
Disclosure).

As reported in Troubled Company Reporter's November 27, 2002
edition, Standard & Poor's Ratings Services withdrew its 'CC'
corporate credit rating on Abraxas Petroleum Corp. In addition,
the ratings on Abraxas' $63.5 million first lien notes and $191
million second lien notes were also withdrawn.

Abraxas Petroleum Corp.'S 12.875% bonds due 2003 (ABP03USR1) are
trading at about 54 cents-on-the-dollar, DebtTraders reports.
See http://www.debttraders.com/price.cfm?dt_sec_ticker=ABP03USR1
for real-time bond pricing.


ADVANCED GLASSFIBER: Files for Chapter 11 Reorg. in Delaware
------------------------------------------------------------
Advanced Glassfiber Yarns LLC, one of the largest global
suppliers of glassfiber yarns used in a variety of electronic,
industrial, construction and specialty applications, and its
wholly-owned subsidiary, AGY Capital Corp., filed voluntary
petitions for reorganization under Chapter 11 of the U. S.
Bankruptcy Code Tuesday evening. The Company's international
operations are excluded from the filing. The Company also
announced that it has received a commitment for up to $15
million of debtor-in-possession financing, subject to Court
approval, from Wachovia Bank National Association, which will be
used to fund ongoing working capital needs, employee
obligations, and other expenses.

The Company, which previously announced that it was in
restructuring discussions with its senior secured lenders
regarding approximately $180 million of indebtedness under a
term loan and revolving credit facility, as well as certain
holders of the Company's $150 million of 9-7/8% senior
subordinated notes, intends to utilize the protections and
benefits of the Chapter 11 process to continue such
restructuring discussions and further implement its
restructuring plan. Chief Restructuring Officer Marc Pfefferle
said, "This filing represents a further step in the Company's
restructuring efforts."

Mr. Pfefferle emphasized that during the Chapter 11 process, the
Company's commitment to fulfill its obligations to its customers
remains strong. "Daily operations of our facilities will
continue as usual, and our employees will continue to be paid
and receive benefits without interruption. The options afforded
through the Chapter 11 process, coupled with access to DIP
financing, will enable the Company to pursue and implement its
restructuring plan in an efficient manner, and will help ensure
that the Company is positioned to fulfill ongoing obligations to
its employees, customers and vendors throughout the world. This
restructuring process will not alter our commitment to provide
the highest quality yarns and services to our customers,"
Pfefferle said.

The Company's reorganization case was filed in the U.S.
Bankruptcy Court for the District of Delaware in Wilmington.
Information regarding this case can be obtained by dialing a
toll free hotline at 866-262-9949. The Company will also be
establishing an information link on its Web site at
http://www.agy.comin the near future.


ADVANCED GLASSFIBER: Case Summary & 20 Largest Unsec. Creditors
---------------------------------------------------------------
Lead Debtor: Advanced Glassfiber Yarns, LLC
             2558 Wagener Road
             Aiken, SC 29801

Bankruptcy Case No.: 02-13615

Debtor affiliates filing separate chapter 11 petitions:

     Entity                                     Case No.
     ------                                     --------
     AGY Capital Corp.                          02-13616

Type of Business: The Debtors, affiliates of Owens Corning, are
                  one of the largest manufacturers and global
                  suppliers of glass yarns.

Chapter 11 Petition Date: December 10, 2002

Court: District of Delaware

Judge: Judith K. Fitzgerald

Debtors' Counsel: Mark E. Felger, Esq.
                  Cozen O'Connor
                  1201 North Market Street,
                  Suite 1400
                  Wilmington, DE 19801
                  Tel: 302-295-2087
                  Fax : 302-295-2013

                         -and-

                  Alan B. Hyman, Esq.
                  Scott K. Rutsky, Esq.
                  Proskauer Rose LLP
                  1585 Broadway
                  New York, NY 10036
                  Tel: 212-969-3000

Total Assets: $194.1 million

Total Debts: $409 million

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Bank of New York            Sr. Subordinated      $162,960,937
101 Barclay Street, 21W     Noteholders
New York, NY 10286
Attn: Corporate Trust Department
212-815-5915 - Fax

Enron Energy Services       Trade                     $994,427
Operations, Inc.
PO Box 846064
Dallas, TX 75284
Gayle Muench
713-345-8692

BOC Gases                   Trade                     $126,305

Sonoco Crellin              Trade                      $54,589

Cameron & Barkley Co.       Trade                      $51,886

National Starch & Chemical  Trade                      $50,916

Day International Inc.      Trade                      $44,045

Unimin Corporation          Trade                      $37,002

AOC LLC                     Trade                      $35,755

Xpedx                       Trade                      $26,256

Precision Machine Works     Service                    $25,926

Crompton Corporation        Trade                      $25,550

Kosa                        Trade                      $24,394

US Silica                   Trade                      $23,721

Loders Croklaan             Trade                      $22,362

Univar USA Inc.             Trade                      $20,369

Dougherty Equipment Co.,    Equipment Lessor           $19,189
Inc.

Rockwell Automation         Trade                      $17,172

Ferguson Industries         Trade                      $15,904

Thyssen Elevator Corporation Service                   $15,368


ADVOCAT INC: Appoints L. Glynn Riddle as New Chief Fin'l Officer
----------------------------------------------------------------
Advocat Inc., (OTC Bulletin Board: AVCA) has appointed L. Glynn
Riddle as Chief Financial Officer of Advocat.  The Company also
announced the appointment of Richard M. Brame as a new Director.
With the appointment of Mr. Brame, Advocat's Board of Directors
increases to five members.

Commenting on the appointments, Chief Executive Officer William
R. Council, III, said, "We are extremely pleased with the
addition of Glynn Riddle to our management team.  Mr. Brame is
also a welcome addition to our Board with his wealth of
experience in the long-term care industry."

A Certified Public Accountant, Mr. Riddle (age 43) came to
Advocat from Envoy, a division of WebMD Corporation and a
leading provider of healthcare transaction processing services,
where he was Vice President of Finance from February 1998
through March 2001.  Prior to that, Mr. Riddle served as Senior
Vice President and Controller of Comdata, a subsidiary of
Ceridian Corporation, for ten years.

Mr. Brame (49) is the Chief Executive Officer of Regency Health
Management, LLC, a privately held senior living management
company based in Ooltewah, Tennessee.  He has served in this
capacity since July 1999.  Regency manages facilities in
Florida, and Mr. Brame owns and manages other communities in
Georgia, Tennessee, and Texas.  Prior to forming Regency,
Mr. Brame served as Chief Executive Officer, Chief Operating
Officer and Chief Financial Officer of a number of Southeast-
based senior living companies.

Advocat Inc., operates 100 facilities including 37 assisted
living facilities with 3,664 units and 63 skilled nursing
facilities containing 7,198 licensed beds as of September 30,
2002.  The Company operates facilities in 10 states, primarily
in the Southeast, and three provinces in Canada.

For additional information about the Company, visit Advocat's
Web site at http://www.irinfo.com/avc

At September 30, 2002, Advocat's balance sheet shows a working
capital deficit of about $58 million.


AIR CANADA: Revenue Passenger Miles Climb 0.5% in November
----------------------------------------------------------
Air Canada flew 0.5 per cent more revenue passenger miles (RPMs)
in November 2002 than in November 2001, according to preliminary
traffic figures. Capacity increased by 1.6 per cent, resulting
in a load factor of 67.1 per cent, compared to 67.8 per cent in
November 2001; a decrease of 0.7 percentage points.

In comparison to November 2000, revenue passenger miles declined
7.9 per cent while capacity was reduced by 14.9 per cent. Load
factor improved 5.1 percentage points.

"The traffic results for November 2001 were significantly
elevated by the return of customers who had postponed travel
from September 11th through October. In addition, the high
traffic levels of last year, particularly within Canada,
reflected the cessation of operations by Canada 3000 in early
November 2001," said Rob Peterson, Executive Vice President and
Chief Financial Officer.

"Domestic traffic levels for November of this year were affected
by the large capacity increase, especially on the transcon,
mounted by our domestic competitors. Transborder traffic was
stable and a 4.4 per cent cut in capacity pushed up our load
factor 2.7 percentage points. Transatlantic demand, particularly
on the United Kingdom route, continues to be strong while
traffic on our Pacific services turned in an exceptional
performance. Traffic to and from Japan close to doubled from
November of last year."

Air Canada's September 30, 2002, balance sheet reported a total
shareholders equity deficit of about $1.5 billion.


ALTAIR NANOTECHNOLOGIES: Gets 6-Month Nasdaq Listing Extension
--------------------------------------------------------------
Altair Nanotechnologies Inc., (Nasdaq:ALTI) said that its common
stock would continue to be listed on the Nasdaq SmallCap Market
through June 2, 2002 by the granting of a 180-day extension by
Nasdaq.

This extension provides the company an opportunity to comply
with Marketplace Rule 4310 (C)(8)(D), requiring that the
company's common stock has a minimum $1 bid price per share.
Altair must maintain all other Nasdaq SmallCap Market listing
criteria to retain the 180-day extension.

"We now expect that our common stock price will better reflect
the value of the company," commented Dr. Rudi E. Moerck. "Over
the last six months we have made significant strides with our
nanoparticle-based pharmaceutical product as well as within the
pigment industry. We are in discussions with seven
pharmaceutical companies interested in the possibility of
developing and eventually seeking FDA and foreign approvals for
RenaZorb(TM), Altair's new drug candidate for phosphate control
in kidney dialysis patients.

"We recently announced that the drug has entered into animal
stage testing and we are in the process of negotiating a testing
agreement with another pharmaceutical company to asses
RenaZorb(TM) in a different animal species."

RenaZorb should not be considered an early stage drug. Altair
fully expects testing to proceed to full human clinical trials
in a relatively short period of time.

"Since the award of a patent pertaining to our Altair
Hydrochloride Pigment Process in April 2002, the company has
entered into two contracts to determine the suitability of
existing mineral ore concentrates for making white titanium
dioxide pigment with our process," continued Moerck.

"The pigment extraction and iron removal work phase of the
agreement for the first pigment company has proceeded very well
and the purification and pigment production steps will begin
shortly. A second agreement, based on an ore body located in
Vietnam, was recently signed. The Altair Hydrochloride Pigment
Process is environmentally friendly and can potentially save
millions in investment and operating costs for pigment
manufacturers who license our process.

"Altair has already produced acceptable white pigment and is
sampling pigment manufacturers with pigment grade TiO2 using the
Altair Hydrochloride Process. The pigment is targeted to be
suitable for semi-durable coatings without further pigment
finishing steps."

"We have an excellent relationship with our term lender and have
recently restructured an outstanding note with them," noted
Moerck. "Under the terms of the amended note agreement, the
principal amount of the note was reduced from $2 million to $1.4
million and the note was extended one year, to March 31, 2004."

Details of the restructuring are outlined in the company's Form-
8K filed with the Securities and Exchange Commission Nov. 27,
2002.

"Management believes the significant strides made during the
past several months should provide the vehicle for profitability
in 2003," said Moerck. "Profitability and continued success from
just within the pharmaceutical and pigment industries should
create additional interest from the investment community."

Nanotechnology is rapidly emerging as a unique industry sector.
Altair Nanotechnologies is positioning itself through product
innovation within this emerging industry to become a leading
supplier of nanomaterial technology and nanomaterials worldwide.
Altair owns a proprietary technology for making nanocrystalline
materials of unique quality both economically and in large
quantities.

The company is currently developing special nanomaterials with
potential applications in pharmaceuticals, batteries, fuel
cells, solar cells, advanced energy storage devices, thermal
spray coatings, catalysts, cosmetics, paints and environmental
remediation. For additional information on Altair and its
nanoparticle materials, visit http://www.altairnano.com

                         *    *    *

At June 30, 2002, Altair NanoTechnologies Inc., had cash and
cash equivalents of $274,531, an amount that would be sufficient
to fund its basic operations through July 31, 2002.  In order to
extend operations through at least August 31, 2002, it has
reduced cash expenditures to the extent possible without
significantly affecting development efforts with respect to the
titanium processing technology.  The Company anticipates it will
receive the remaining $642,877 of the purchase price owed under
the amended and restated stock purchase agreement on, or before,
August 31, 2002.  If it received the remainder of the purchase
price during August 2002, the Company expected this additional
capital would be sufficient to fund its basic operations through
at least October 31, 2002. If it did not receive the remainder
of the purchase price during August 2002, the Company would
require additional financing during August 2002 in order to
provide working capital to fund its day-to-day operations.

In order to reduce the rate at which it is using cash Altair has
taken several cost cutting measures, the most significant of
which is the reduction of expenditures on the Tennessee mineral
property and the jig to the minimum amount necessary to maintain
these assets with no ongoing development activity.

Nevertheless, even with such cost cutting measures, the Company
will need additional financing to fund basic, day-to-day
operations sometime between August 31, 2002 and October 31,
2002.  Because its projected near-term sales of nanoparticle
products are minimal, the Company expects to generate such funds
through additional private placements of its common stock and
warrants to purchase its common stock or other debt or equity
securities.  As of August 13, 2002, it had no commitments to
provide  additional financing or to purchase a significant
quantity of nanoparticle products.  If the Company is unable to
obtain financing on a timely basis, it may be forced to more
significantly curtail and, at some point, discontinue
operations.


AMERICAN TRANS AIR: Closes Two-Stage Pre-Funded Debt Offering
-------------------------------------------------------------
ATA (American Trans Air, Inc.), the principal subsidiary of ATA
Holdings Corp. (Nasdaq:ATAH), closed the final part of a $260
million enhanced equipment trust certificate (EETC) debt
offering that financed nine new Boeing 737-800 aircraft
delivered in 2002. The ATA 2002-1's were a private placement
issued in two tranches: 2002-1A and 2002-1B. Morgan Stanley
acted as the placement agent. All nine aircraft have been
delivered to ATA and placed under leveraged leases.

The second stage of the EETC, valued at $117 million was funded
in October. The funding was used to finance four new Boeing 737-
800's that were delivered between October 15 and December 3.
During the summer, ATA closed the first part of the financing
for $143 million. The 2002-1A final maturity is August 2014;
average life is 7.6 years. The 2002-1B final maturity is August
2009 with a 3.4-year average life.

This unusual two-stage funding, an industry first, enabled ATA
to avoid significant pre-funding carrying costs. The fundings
matched ATA's 2002 Boeing 737-800 delivery schedule. The note
purchasers agreed to common pricing for their committed portions
of the $260 million issue.

ATA Executive Vice President and Chief Financial Officer Ken
Wolff said, "We are pleased with the completion of this
transaction in the difficult post September 11 capital markets
for airlines".

ATA Holdings Corp., common stock trades on the NASDAQ Stock
Market under the symbol "ATAH". ATA has a fleet of 28 Boeing
737-800's, 16 Boeing 757-200's, 10 Boeing 757-300's, and 10
Lockheed L1011's. Chicago Express Airlines, Inc., the wholly
owned commuter airline based at Chicago-Midway Airport, operates
17 SAAB-340B's.

Now celebrating its 30th year of operation, ATA is the nation's
10th largest passenger carrier based on revenue passenger miles.
ATA operates significant scheduled service from Chicago-Midway
and Indianapolis to over 40 business and vacation destinations.
To learn more about the Company, visit the Web site at
http://www.ata.com


AMES DEPARTMENT: Wins Nod to Sell Designation Rights to Shaw's
--------------------------------------------------------------
Federal Realty complains that Ames Department Stores, Inc.'s
proposed sale of their rights to Shaw's Supermarkets, Inc.,
adversely affect a multitude of tenants including itself because
the disposition is not permissible under the Bankruptcy Code.
There is no specific provision in the Bankruptcy Code, which
permits the sale of designation rights in the manner
contemplated by the Debtors.

"There is no language in the Bankruptcy Code that permits, or
even suggests, that debtors may sell to a non-debtor third party
the right to choose the identity of the entities to which
debtors will be contractually obligated to attempt to assume and
assign leases," David L. Pollack, Esq., at Ballard Spahr Andrews
& Ingersoll, LLP, in Philadelphia, Pennsylvania, argues.

Federal Realty owns the Dedham Plaza Shopping Center in Dedham,
Massachusetts where the Debtors previously operated a retail
store pursuant to a written lease.

But should the Court determine that the "sale" of the Debtors'
designation rights is appropriate, Mr. Pollack proposes that the
sale must be conditioned on the Debtors' payment of all
postpetition amounts owing and due under the Dedham lease.  The
Debtors currently owe Federal Realty $220,525 in lease
obligations.  The Debtors should also pay the property taxes
required under the lease directly to Federal Realty, on a
monthly basis, during any "Designation Period".

Federal Realty also asks the Court for permission to terminate
the lease in the event the premises went "dark" for more than
180 days.  Mr. Pollack contends that this provision is contained
on the Dedham lease and serves to assure that Federal Realty can
prevent a continuously dark anchor store.  Mr. Pollack explains
that since the Debtors currently have until the Confirmation
Date to decide on the leases, the "go dark" period as proposed
in the Designation Rights Motion may stretch to two years or
maybe more. Federal Realty does not want the store to "go dark"
for that length of time because some of the other tenants'
leases have provisions that will be triggered by the closure of
the Debtors' store.  Those provisions include rent reduction or,
more significantly, giving the tenants the right to terminate
their leases if the Debtors' stores are dark for a period of
time.

Federal Realty also refutes Shaw's unfettered rights to perform
alterations and remodeling on the premises.  While the Dedham
lease allows the tenant to make non-structural alterations
without Federal Realty's consent, Mr. Pollack points out that
any structural alterations require its consent.

Mr. Pollack also argues that it is premature for the Debtors to
direct counterparties, like Federal Realty, to submit
depositions on two-business days prior written notice.  "Whether
or not such a procedure is appropriate depends entirely on the
nature of the discovery contemplated, including but not limited
to, a prior review of the information provided by Debtors and
the proposed designee regarding adequate assurance of future
performance," Mr. Pollack says.

Federal Realty also objects to the Debtors' waiver of the Rule
6004(g) of the Local Rules for the Southern District of New
York.  Mr. Pollack observes that the proposed Designation Rights
Order shifts the burden of obtaining a stay of that Order to
Federal Realty, without the Debtors or the Designation Rights
Purchaser introducing any evidence indicating that a stay would
be inappropriate.  "The enactment of Rule 6004(g) was obviously
an acknowledgment that a stay of proceedings during the appeal
period is appropriate when property of the estate is sold or
leases are assumed and assigned," Mr. Pollack points out.
"There is no reason to waive the rule and a stay without the
Debtors or the purchaser of the designation rights convincing
the Court that it would be absolutely necessary to do so."

2. Land Acquisition Resources Limited Partnership

Land Acquisition objects to the provisions in the Designation
Rights Motion which:

  (1) permits the designee to perform alterations and
      remodeling to the extent necessary to operate their retail
      operations; and

  (2) allows the leased premises to remain "dark" for up to an
      additional 12 months after the proposed assignment.

Land Acquisition leases the premises for the Debtors' Store No.
211 in Derby, Vermont pursuant to a lease agreement dated June
28, 1994.  The Shopping Center consists of two store locations:
the Ames store and a Shop & Save outlet.  The Debtors operate a
general merchandise store while Shop & Save operates a food
supermarket.

Scott D. Talmadge, Esq., at Clifford Chance US LLP, in New York,
contends that the Debtors' propositions are not valid for
several
reasons:

  (a) The parties' lease allows Land Acquisition to terminate
      the lease if the store goes "dark", subject to the limited
      exception that the premises may go dark for a period not
      to exceed 120 days while the tenant diligently pursues the
      completion of renovation and remodeling;

  (b) The lease does not permit the tenant to make structural
      alterations, and an assignee acting diligently can easily
      complete non-structural renovations and remodeling and re-
      open for business within the 120 day period permitted by
      the lease; and

  (c) The lease expressly provides that "the Tenant shall not
      have the right to use or occupy all or any part of the
      demised premises for the operation of a food supermarket."

Mr. Talmadge notes that the presence of Shaw's will disrupt the
tenant mix in the Shopping Center.  Shaw's operate 185 Shaw's
Supermarkets and Star Markets and competes with Shop & Save,
which, by contrast, is a small business.  If permitted to
operate, Shaw's will drive Shop & Save out of business.

Shop & Save has the right to operate as a supermarket at the
Center until 2009.  Shop & Save occupies 20,000 square feet of
the premises while the present Ames store, which Shaw's might
take over, sits on 60,000 square feet of leased premises.

Mr. Talmadge tells Judge Gerber that Shaw's also operate a
supermarket in nearby Newport, Vermont.  The Shaw's Newport
outlet is five miles from the Derby, Vermont premises.  Mr.
Talmadge contends that if the Debtors' store remains "dark" for
an extended period of time, Shaw's would in effect be protecting
its existing supermarket in Newport.

"Those customers who were drawn to the [Derby] Shopping Center
by the presence of a big box tenant like the Debtors or the
combination of a big box tenant and a [Shop & Save] supermarket,
may no longer find it more convenient to do their food shopping
at the Shop & Save," according to Mr. Talmadge.

3. Fall River Shopping Center North, LLC

Fall River leases to the Debtors the premises for Ames Store No.
2122 located at the Fall River Shopping Center in Fall River,
Massachusetts.  Ames is the Shopping Center's anchor tenant.

Fall River objects to the sale of the Debtors' Designation
Rights with respect to the Store No. 2122 lease because the
Debtors failed to cure, or provide adequate assurance that they
will promptly cure, any default under the lease.  The Debtors
also did not compensate or provide adequate assurance that they
will promptly compensate any actual pecuniary loss resulting
from a default.  Sanford P. Rosen, Esq., in New York, argues
that the Designation Rights Order must preserve a landlord's
right and interest with respect to percentage rent, cross
default and tenant mix issues.

Mr. Rosen also contends that the Designation Rights Motion
violates the Alteration Provision under the lease.  The Debtors'
abrogation of the Alteration Provision is premature because
neither the Debtors nor Shaw's have identified a prospective
assignee.  Thus, they have no knowledge whether or not the
eventual assignee will seek unreasonable, unsafe or otherwise
objectionable alterations.

Mr. Rosen explains that, under the Alteration Provisions, Fall
River's consent is required every time a tenant initiates
structural changes to the premises.  Mr. Rosen asserts that this
provision gives a landlord the means of protecting, preserving
and maintaining the structural integrity, aesthetics and value
of premises, both in and of itself and as a part of the overall
Center.  It also allows a landlord to ensure that any
alterations comply with all local ordinances and regulations.

4. King's Highway Realty Trust L.P

King's Highway echoes the arguments of Land Acquisition and Fall
River.

King's Highway leases the premises for Ames Store No. 70 at
King's Highway Shopping Center in Stratham, New Hampshire.  The
term of the Ames lease presently expires in January 2007.  The
Debtors currently owe King's Highway $43,000 in postpetition
rent.

The Debtors share the Shopping Center premises with other well-
known national retail stores, like Radio Shack, Blockbuster,
Fashion Bug, and General Nutrition Center.

5. High Lea Properties, LLC & High Lea Properties II, LLC, for
   itself and as Trustee of KVC Associated Realty Trust

High Lea refutes the revocation of the Alteration Provisions of
its lease with the Debtors and presents the same arguments as
Fall River.

High Lea owns the Frenchtown Plaza Shopping Center located in
North Kingstown, Rhode Island.  The Debtors operate Ames Store
No. 2192 at the Center pursuant to the parties' April 26, 1968
lease agreement.

                     Debtors Talk Back

The Debtors ask the Court to overrule the objections because
they lack merit.  According to the Debtors:

  -- certain of the lease provisions are tantamount to anti-
     assignment clauses and are unenforceable;

  -- to the extent the lease provisions relied on are
     enforceable, the remedy for their breach is money damages.
     The lease termination is not required because it is a
     punitive and not a compensatory remedy;

  -- the Objecting Landlords' objections to the lack of
     operations for an extended period of time is nothing but a
     complaint that they are not receiving the proceeds from the
     sale of the leases.  Manifestly, by virtue of the Debtors'
     wind down, all their stores will be dark until new tenants
     remodel and move in.  Thus, the Objecting Landlords are in
     the same position -- having no operations -- whether they
     find a new tenant or Shaw's or the Debtors do.  The only
     difference is whether the Debtors must forfeit the leases'
     value;

  -- Shaw's is purchasing the Designation Rights, not the
     leases.  Therefore, during the Designation Period, Shaw's
     has the exclusive right to designate which leases will be
     assumed and assigned, and to whom, and which properties
     will be excluded.  Thus, any Objections to the assumption
     and assignment of the leases is premature.

                           *     *     *

After considering the arguments presented, Judge Gerber
authorizes the Debtors to sell the Designation Rights with
respect to the 16 leases and the two fee-owned properties to
Shaw's Supermarket on the terms and conditions set forth in the
Designation Rights Agreement.  All objections are overruled.

Judge Gerber rules that Shaw's designee may perform alterations
and remodeling to the extent necessary to operate its retail
operations at the leased premises and to replace and modify
existing signage.  According to Judge Gerber, the extension or
renewal options contained in the leases which purport to be
"personal" only to the Debtors or to be exercisable only by the
Debtors constitute an unenforceable restriction on assignment
and may be freely exercised by Shaw's or the designees to its
full extent.  Consequently, any leased premises may "go dark"
during the applicable Extension Periods.  The leased premises
assigned to a Designee may also remain "dark" for up to an
additional 12 months after the date of the assignment.

Notwithstanding, Judge Gerber gives the Affected Parties 10 days
from their receipt of an Assignment Notice to file an objection
to the proposed assignment.

                         *    *    *

To recall, the salient provisions of the Designation Rights
Agreement are:

A. Purchase and Sale

   Shaw's will purchase the Designation Rights for these Leased
   Premises free and clear of all interests, liens,
   encumbrances:

             Lease location                Store No.
             --------------                ---------
             Dayville, Connecticut             233
             Beverly, Massachusetts           2117
             Dedham, Massachusetts            2148
             Fall River, Massachusetts        2122
             Stoneham, Massachusetts           737
             Sturbridge, Massachusetts           1
             Waltham, Massachusetts           2128
             Worcester, Massachusetts         2105
             Saco, Maine                      2165
             Wiscasset, Maine                  257
             Peterborough, New Hampshire        43
             Stratham, New Hampshire            70
             North Kingstown, Rhode Island    2192
             Barre, Vermont                     44
             Derby, Vermont                    211
             Springfield, Vermont              301

B. Owned Real Property

   -- This includes the Debtors' right, title and interest in,
      to and under the real properties owned by the Debtors that
      are located in:

             Location                      Store No.
             --------------                ---------
             Woodsville, New Hampshire         432
             Lewiston, Maine                  2139

   -- Shaw's will pay the Carrying Costs for the Owned Real
      Property to the Debtors.

C. Purchase Price

   -- $48,500,000;

   -- Shaw's has deposited $5,000,000 to a title insurance
      company specified by the Debtors, which will be
      non-refundable, except pursuant to the terms of the
      Designation Rights Agreement;

   -- At the Closing, the Debtors will be entitled to receive
      the Deposit from the escrow agent and Shaw's will pay the
      remaining $43,500,000;

   -- Interest on the Deposit will be disbursed by the escrow
      agent to Shaw's.

C. Designation Properties

   -- During the Designation Period, Shaw's will have the
      exclusive right to select, identify, and designate:

      (a) which Leases will be assumed and assigned or subleased
          and to whom;

      (b) which Properties will be excluded; and

      (c) any Purchaser Affiliate or any other party as
          designee;

   -- The Designation Rights will expire with respect to each
      Property on the later of:

      (a) the date of expiration of the extension period for the
          assumption or rejection of the applicable Lease; or

      (b) June 1, 2003.

      Until the expiration of the Designation Period, the
      Debtors will not reject any Lease unless it is excluded
      from this transaction by Shaw's;

   -- Within 5 days after the Debtors receive a written notice
      of assumption and assignment of a particular lease from
      Shaw's, the Debtors will notify the Affected Parties to
      the Lease.  The Notice will:

      (a) state the identity of Shaw's designee;

      (b) state the proposed use of the Lease by the designee;

      (c) provide documentation from the designee relating to
          "adequate assurance of future performance" by the
          designee; and

      (d) set forth:

          (1) a list of the Lease and any documents amending the
              Lease;

          (2) a list of any subleases and any documents amending
              the Subleases; and

          (d) a list of any reciprocal easement agreements to
              which the Debtors are a party and any documents
              amending the agreements;

   -- If an objection is filed which would prohibit or prevent a
      Property Closing from occurring, the Debtors will request
      a hearing on the objection.  If the objection is:

      (a) overruled or withdrawn, the Property Closing Date will
          occur;

      (b) upheld by Bankruptcy Court, Shaw's will retain the
          Designation Rights to that Property and the Purchase
          Price will not be reduced; and

   -- If a Sale Order includes a finding that there are any
      amendments to any Lease or Sublease or Seller Party
      Reciprocal Easement Agreement that are not listed in the
      notice sent to Affected Parties and those amendments
      adversely affect Shaw's or its designees' ability to
      operate the Property, Shaw's may terminate the Agreement
      with respect to that Property.  Consequently, the Purchase
      Price will be reduced to account for the price of that
      Property.

E. Designation Rights

   To the extent any of Shaw's designees fail to close on the
   assignment of a Lease, Shaw's will have the right to direct
   the Debtors to assume and assign or sublease a Lease directly
   to an alternate designee.  The Designation Rights Agreement
   does not preclude the Debtors from confirming a Chapter 11
   plan during the Designation Period, provided the plan is
   consistent with the Designation Rights.

F. Exclusion of Property

   -- Shaw's will have the right to exclude any Property by
      providing written notice to the Debtors and the Unsecured
      Creditors Committee.  The Purchase Price will not be
      reduced by that exclusion unless it was a result of the
      Debtors' failure to satisfy a Property Closing Condition;
      and

   -- After a Property has been excluded, the Debtors will be
      entitled to retain all proceeds from the disposition of
      that Property.

G. Additional Consideration

   -- Shaw's will be responsible for all obligations
      specifically attributed to the Properties from the date
      that is one day after the Auction occurs -- Carrying Cost
      Date -- provided Shaw's has been selected as the
      successful bidder for all the Properties at the Auction;

   -- The obligations include the rent, ground lease rent,
      common area maintenance, utilities, real estate taxes,
      insurance, security, and other actual out-of-pocket costs
      under any Lease or REA incurred by the Debtors for each of
      the Properties for the period commencing on the Carrying
      Cost Date;

   -- Shaw's obligation for Carrying Costs will terminate on the
      earliest of:

      (a) the expiration of the Lease Decision Period;

      (b) the rejection date of the applicable Lease;

      (c) 10 days after an Exclusion Notice is given to the
          Debtors, plus two business days after that; or

      (d) the Property Closing provided Shaw's designee is
          responsible for all Carrying Costs thereafter;

   -- During the period Shaw's is paying Carrying Costs, Shaw's
      will be entitled to receive and retain all lease rentals,
      sublease rentals, and other income generated from the
      Properties when received by the Debtors until the
      Properties are sold, assigned, or excluded.  The amounts
      will accounted for by Shaw's and constitute an offset
      against Carrying Costs; and

   -- Shaw's Carrying Cost obligations will not include debt
      service or adequate protection payments on any
      indebtedness secured by any of the Properties or any tax
      obligations incurred prior to the Carrying Cost Date --
      regardless of when the bill for payment may be received
      for the taxes.

H. Cure Costs

   The Debtors will cure all monetary defaults arising before
   the Carrying Cost Date under each of the Leases.

I. Default and Remedies

   -- In the event of a material breach or default under the
      Designation Rights Agreement before the Closing by:

      (a) the Debtors, Shaw's will be entitled to seek specific
          performance or terminate the Agreement and obtain the
          immediate return of the Deposit; or

      (b) Shaw's, the Debtors will be entitled to terminate the
          Agreement and retain the Deposit as liquidated damages
          or seek specific performance; and

   -- If the breach or default occurs by either parties after
      the Closing, the aggrieved party will be entitled to seek
      specific performance.

J. Taxes, Recording Charges

   -- The Debtors will shoulder all taxes or special assessments
      and all other costs of operation and maintenance relating
      to the Properties which arise or are attributable before
      the Carrying Cost Date -- whether the obligations are due
      and payable before or after the applicable Property
      Closing; and

   -- Taxes or special assessments and all other costs of
      operation and maintenance that are attributable to the
      period on or after the Carrying Cost Date will be the
      responsibility of Shaw's or its designee.

K. Increase to Purchase Price

   Shaw's acknowledges that the Debtors will conduct an auction
   sale of the Designation Rights.  Hence, after a competitive
   bidding at the Auction, should the Debtors accept Shaw's or
   its affiliate's bid, which is higher than the Purchase Price
   under the Agreement, the Agreement will remain in full force
   and effect and the Purchase Price will be deemed to increase.

L. Post-Closing Lease Expenses

   All obligations with respect to each Lease assigned to Shaw's
   designees will be the sole responsibility of Shaw's designee
   from and after the Property Closing Date.  But other than
   with respect to the Carrying Costs, Shaw's designees will not
   be liable for any monetary obligations or liabilities
   relating to the Properties, which are attributable to the
   period prior to the Property Closing Date.

M. Conditions to Assignment

   The Debtors must cure any prepetition default in base rental
   or additional rental payments and all other monetary defaults
   under the Lease that are not in dispute.  However, the
   Debtors will not be obligated to cure any default that is in
   dispute as of the Property Closing Date if an escrow is
   established pursuant to a Bankruptcy Court order.

N. Brokerage Commissions and Fees

   The parties warrant that no brokerage commissions or fees are
   due any real estate broker. (AMES Bankruptcy News, Issue No.
   29; Bankruptcy Creditors' Service, Inc., 609/392-0900)


ANC RENTAL: Court Okays Stauback Realty as New York Broker
----------------------------------------------------------
ANC Rental Corporation and its debtor-affiliates obtained
permission from the Court to employ Staubach Realty Services as
their real estate brokers, nunc pro tunc to October 24, 2002.
The Debtors want Staubach to assist them in the market review
and lease negotiations for their properties located at:

      -- 305 East 80th Street, New York, New York;

      -- 142 East 31st Street, New York, New York;

      -- 445 East 63rd Street, New York, New York;

      -- 17 East 12th Street, New York, New York; and

      -- 21 East 12th Street in New York, New York.
(ANC Rental Bankruptcy News, Issue No. 22; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


ANNUITY & LIFE: S&P Hatchets Counterparty Credit Rating to BB-
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty
credit and financial strength ratings on Annuity & Life
Reassurance Ltd. and its subsidiary, Annuity & Life Reassurance
America Inc. (collectively referred to as Annuity & Life Re), to
'BBB-' from 'BBB+' following a review of the company's recent
operating results as well as its plans to raise capital and
secure collateral facilities to back statutory reserves ceded by
U.S.-based life insurers.

Standard & Poor's also said that it lowered its counterparty
credit rating on Annuity & Life Re (Holdings) Ltd. to 'BB-' from
'BB+'.

The ratings remain on CreditWatch with negative implications,
where they were placed on Nov. 20, 2002.

"Although Annuity & Life Re has made progress on the capital and
collateral issues, continued execution risk exists," said
Standard & Poor's credit analyst Rodney A. Clark. "The company's
capital remains adequate for the current rating, but failure to
raise additional capital and to maintain existing collateral
facilities would restrict the company's ability to issue
additional profitable new business in 2003."

In addition, there is concern that downgrade triggers associated
with certain contracts could cause more profitable contracts to
be recaptured by ceding companies or assumed by a third party.
The recapture of certain contracts would help the company to
manage its capital and collateral issues but would leave the
company with reduced profitability and increased volatility on
remaining business. Standard & Poor's will continue to monitor
the Annuity & Life Re's efforts to raise capital as well as the
adequacy of its collateral facilities. If these issues are
resolved satisfactorily by year-end and no significant downgrade
triggers are exercised, the ratings are likely to be removed
from CreditWatch and affirmed at the current level. If these
issues are not resolved, or if downgrade triggers substantially
reduce the company's profitable contracts, the ratings on
Annuity & Life Re could be lowered into the 'BB' category.


ARMSTRONG HOLDINGS: Gets Okay to Amend Postpetition Credit Pact
---------------------------------------------------------------
Nitram Liquidators, Inc., Armstrong World Industries, Inc., and
Desseaux Corporation of North America, obtained the Court's
authority to sign another amendment to their DIP Credit
Agreement.

As previously reported, the Fourth Amendment to the DIP
Financing Agreement extends the Maturity Date to December 8,
2003, and reduces the DIP Lenders' Total Commitment to
$75,000,000.

                       The Fourth Amendment

Under the Fourth Amendment, the parties agree to:

-- extend the Maturity Date under the Credit Agreement until
   December 8, 2003;

-- reduce the Total Commitment from $200,000,000 to $75,000,000
   with the Total Commitment to be allocated among the Banks;

-- terminate all obligations of the Banks to make loans or
   advances to the Borrower and limit the Commitments under the
   DIP Facility to issuances of Letters of Credit;

-- in the case of AWI and JPMorgan Chase, enter into an
   amendment to the Fee Letter; and

-- suspend certain reporting requirements under the Credit
   Agreement.

The Fourth Amendment further provides:

  (x) for the payment of a $75,000 amendment fee to the Banks;

  (y) that the Fourth Amendment will become effective as of the
      Effective Date; and

  (z) other than these modifications, the terms of the Credit
      Agreement remain in effect.

                                More Fees

Under the Fee Letter Amendment:

-- AWI will pay to JPMorgan Chase a $50,000 arrangement fee once
   the Fourth Amendment is effective;

-- JPMorgan Chase will reduce the annual agent administration
   fee from $150,000 to $50,000 annually (commencing on the
   Effective Date), payable on a quarterly basis in advance; and

-- JPMorgan Chase agrees that collateral monitoring fees payable
   to JPMorgan Chase will be reduced from $24,000 to $9,000
   annually (commencing on October 7, 2002), payable quarterly
   in advance. (Armstrong Bankruptcy News, Issue No. 32;
   Bankruptcy Creditors' Service, Inc., 609/392-0900)


ASIA GLOBAL: Wants to Assign Contracts & Lease to Asia Netcom
-------------------------------------------------------------
Richard F. Casher, Esq., at Kasowitz Benson Torres & Friedman
LLP, in New York, notes that the Sale Agreement requires Asia
Global Crossing Ltd., and affiliated debtors to assume and
assign to Asia Netcom certain executory contracts and unexpired
leases.  Pursuant to sections 365(a), (b) and (f)(2) of the
Bankruptcy Code, the AGX Debtors requests that, as part of the
Approval Order, the Court approve the assumption and assignment
to Asia Netcom of the Assigned Contracts, effective after the
Closing of the Sale.

As of the Petition Date, Mr. Casher contends that the AGX
Debtors are not in default under any of the Contracts proposed
to be assumed and assigned to Asia Netcom.  Accordingly, Section
365(b) does not govern the Debtors' request to assume and assign
to Asia Netcom the Assigned Contracts.  Nevertheless, each non-
debtor party to an Assigned Contract or an Additional Assigned
Contract will have an opportunity to contest the Debtors'
assertion that it is not in default under these agreements.  The
AGX Debtors propose that, after consummation of the Sale
Agreement, or the Alternative Sale Agreement, as the case may
be, each non-debtor party to an Assigned Contract or an
Additional Assigned Contract will be forever barred from
asserting cure or other amounts with respect to the Assigned
Contracts.

Mr. Casher assures the Court that the assumption and assignment
of the Assigned Contracts to Asia Netcom will provide each non-
debtor counterparty to an Assigned Contract with adequate
assurance of the future performance.  As set forth in the Sale
Agreement, to the extent any defaults exist under any Assigned
Contracts, the Debtors will cure the default.  In respect of
Asia Netcom's financial credibility, in respect of its future
performance, Asia Netcom's corporate parent, CNC, will be
capitalizing Asia Netcom with $120,000,000 of equity capital and
has arranged for a $150,000,000 bank debt financing to be
available to Asia Netcom.  In addition, CNC will execute at
closing a guaranty of the payment and performance by Asia Netcom
of its obligations under the Sale Agreement.

Furthermore, Mr. Casher points out that the Bidding Procedures
that the Debtors have proposed pursuant to the Bidding
Procedures Motion would require any bidder for the Acquired
Assets to provide the Debtors with sufficient and adequate
information to demonstrate, to the satisfaction of the Debtors,
in consultation with any statutory committee appointed in the
Chapter 11 Case and the JPLs, that the bidder:

    -- has the financial wherewithal, experience and ability to
       consummate the transaction proposed by it within a time
       frame acceptable to the Debtors if the entity is selected
       as the Successful Bidder; and

    -- can provide all non-debtor contracting parties to the
       Assigned Contracts with adequate assurance of future
       performance as contemplated by Section 365 of the
       Bankruptcy Code.

At the Sale Hearing, Mr. Casher states that the Debtors will
produce additional evidence of the financial credibility, and
experience in managing the Assigned Contracts and ability to
perform under the contracts, of Asia Netcom or the Successful
Bidder.  The Sale Hearing, therefore, will provide the Court and
other interested parties the opportunity to evaluate and, if
necessary, challenge the ability of Asia Netcom or the
Successful Bidder to provide adequate assurance of future
performance under the Assigned AGC Contracts, as required under
Sections 365(b)(1)(C) and 365(f)(2)(B) of the Bankruptcy Code.
(Global Crossing Bankruptcy News, Issue No. 28; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

Asia Global Crossing's 13.375% bonds due 2010 (AGCX10USN1),
DebtTraders says, are trading at 11 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AGCX10USN1
for real-time bond pricing.


ASSET SECURITIZATION: Rating on Ser. 1997-D5 Class B-1 Cut to D
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on class
B-1 of Asset Securitization Corp.'s commercial mortgage pass-
through certificates series 1997-D5 to 'D' from 'BB-'. At the
same time, ratings are affirmed on remaining nine classes from
the same transaction.

The downgrade reflects the interest shortfalls of class B-1 due
to several severely delinquent mortgages, one of which includes
one of the top 10 mortgages in the pool, the Doctor's Hospital.
Interest shortfalls derived from appraisal reductions applied to
some of the delinquent mortgages impact both the rated B-1 class
and several un-rated classes. Cumulatively, the interest
shortfalls total $13.9 million, $602,000 of which affects the
class B-1 certificates.

The affirmations on the remaining classes reflect the slightly
improved overall operating performance of the pool and increased
subordination levels since issuance. Standard & Poor's has
determined that the weighted average coverage for the pool has
increased to 1.62x from 1.60x during the last review (March
2000) and 1.50x at issuance. Financial information supplied by
CapMark Services L.P. (CapMark/STRONG ranking), the master
servicer, includes 2001 year-end information for 76.6% of the
pool (10.5% of the pool are credit tenant lease transactions).

There are six delinquent mortgages in the pool totaling 78.1
million (4.8% of the pool). All six mortgages have a total
exposure of $97.1 million with cumulative appraised values of
$27.3 million. Three of the mortgages are in excess of 90-days
delinquent, and three are classified as "other real estate
owned."

The largest delinquency is the $45.2 million loan (2.7% of the
pool) secured by a mortgage on a hospital located in Chicago,
Ill. The Doctor's Hospital closed in April 2000 after the
operator filed for bankruptcy protection and the borrower
defaulted on the loan. Lend Lease Asset Management (Lend
Lease/STRONG ranking), the special servicer, alleges that
the loan is not a qualified mortgage loan because of issues
related to the collateral valuation at issuance, and has asked
the depositor to repurchase the loan. The trust filed a suit
against the depositor and loan seller in November 2000 citing
breach of contract for failure to repurchase the loan. The
depositor is challenging that assertion. Based on an appraisal
dated October 2001, the property is valued at $7.2 million.
The master servicer has advances of $5.8 million outstanding,
and has stopped any further advancing.

The remaining two delinquent mortgages total $11.8 million
(0.72% of the pool). The first is an $8.7 million mortgage
secured by a retail property located in Dayton Beach, Florida.
Kmart vacated in March 2002 after the bankruptcy court rejected
its lease. Based on an appraisal dated July 2002, the property
was valued at $ 4.0 million. CapMark has outstanding advances of
$642,000 against the loan. The second is a $3.1 million
mortgage secured by four mobile home parks located in
Pennsylvania. The mortgage, categorized as in foreclosure,
became delinquent when one of the four mobile home parks began
to incur additional expenses associated with its water supply,
due to the drought. Lend Lease has been unable to obtain current
financial information. The property was appraised at $ 2.9
million at an appraisal dated April 30, 2002. CapMark advanced
$487,000 to the mortgage.

Three retail mortgages, totaling $21.1 million (1.3% of the
pool), are categorized as REO. Two of the properties were
tenanted by Kmart, which filed for bankruptcy protection in
August 2002. In each of the two mortgages, the Kmart lease was
rejected. The first is a $7.7 million mortgage secured by a
property located in San Antonio, Texas. An appraisal dated April
2002 valued the property at $5.7 million, and CapMark has
advances of $928,000. The second is a $7.6 million mortgage
secured by a property located El Paso, Texas. Currently, a
contract for sale in the amount of $3.5 million has been
executed with an anticipated closing date of December 2002.
Master servicer advances of $727,000 are outstanding, based upon
a March 2002 appraisal valuing the property at $3.5 million.
Third is a $5.8 million mortgage secured by a property located
in Lancaster, South Carolina. Wal-Mart, one of two anchors in
the strip, vacated the store but continues to pay rent. A Bi-Lo
Grocery Store is the second anchor at the center. Including the
vacant Wal-Mart space, occupancy levels for the center total
93%. Lend Lease is looking for a new tenant to facilitate a sale
of the site. The July 2002 appraisal valued the property
at $4.0 million, and CapMark has made advances of  $37 thousand
to mortgage.

Two mortgages totaling $12.0 million (0.73% of the pool) are
current, but are being specially serviced. The mortgages are
secured by retail properties, and located in San Antonio, Texas
($9.9 million) and Billings, Montana ($2.1 million). Kmart is a
tenant at both properties. The Kmart store in San Antonio has
not had its lease rejected. However, the borrower has fallen
behind on real estate taxes. The store in Billings did have its
lease rejected but intends to make "out of pocket payments" to
keep the mortgage current.

There are a total of 27 mortgages, totaling $206 million, on
CapMark's watchlist. Of particular concern are eight mortgages
totaling $23.5 million. These mortgages, which are secured by
assets of varying property types, were stressed in Standard &
Poor's analysis.

Realized losses total $12.1 million (0.73% of the pool) and
consist of two disposed of properties. First was a $13.7 million
mortgage secured by six healthcare facilities, resulting in a
$9.1 million loss. A judgment is pending for an amount not to
exceed $1.1 million, which could result in a credit to the trust
and reduce the loss to $8.0 million. Second was a $2.3 million
mortgage secured by a medical office, resulting in a $3.0
million loss (30.0% loss severity).

As of November 2002, the loan pool consisted of 156 fixed-rate
mortgages with an outstanding pool balance of $1.639 billion,
compared to 158 mortgages with an outstanding pool balance of
$1.785 billion at issuance. The pool has changed little since
issuance, except for a total of $20 million (1.2% of the pool)
in mortgages that have been defeased during the life of the
transaction.

                      Rating Lowered

                Asset Securitization Corp.
      Commercial mortgage pass-through certs series 1997-D5

                      Rating
        Class      To       From     Credit Support
        B-1        D        BB-      6.97%

                      Ratings Affirmed

                Asset Securitization Corp.
      Commercial mortgage pass-through certs series 1997-D5

        Class      Rating                  Credit Support
        A-1A       AAA                     29.74%
        A-1B       AAA                     29.74%
        A-1C       AAA                     29.74%
        A-1D       AAA                     29.74%
        A-1E       AA+                     26.53%
        A-2        A+                      21.18%
        A-3        A-                      17.97%
        A-4        BBB+                    16.37%
        A-5        BBB                     13.96%
        A-6        BBB-                    11.29%
        A-8Z       BBB-                    9.38%


ATLAS AIR WORLDWIDE: CFO Douglas A. Carty Resigns from Company
--------------------------------------------------------------
Atlas Air Worldwide Holdings (NYSE: CGO) announced that Douglas
A. Carty is leaving the company to take a position at Laidlaw,
Inc.

Carty, chief financial officer for Atlas Air Worldwide Holdings
and Atlas Air, Inc, joined Atlas in mid-2001. He will hold the
same position at Laidlaw.

Carty said, "This was an extremely difficult decision for me,
but Laidlaw made me an offer that I felt compelled to accept.
After a great deal of thought, and after discussing the matter
with my family, I accepted the position, and I will join Laidlaw
in January, 2003. Despite the challenges that Atlas has faced
over the past year, I believe that the company has a bright
future, and wish it great ongoing success."

Richard Shuyler, Atlas Air Worldwide Holdings chief executive
officer, said, "We wish Doug well in his new position. He has
made significant contributions to Atlas during his tenure and
will certainly be missed."

Atlas is conducting a search for a new CFO.

Atlas Air Worldwide Holdings, Inc., is the parent company of
Atlas Air, Inc., and of Polar Air Cargo, Inc.  Atlas Air offers
its customers a complete line of freighter services,
specializing in ACMI (Aircraft, Crew, Maintenance, and
Insurance) contracts, utilizing its fleet of B747 aircraft.
Polar's fleet of Boeing 747 freighter aircraft specializes in
time-definite, cost-effective, airport-to-airport scheduled
airfreight service.

As reported in Troubled Company Reporter's May 17, 2002,
edition, Standard & Poor's downgraded its rating on Atlas Air
Worldwide Holdings' corporate credit rating to B+.

Atlas Air Inc.'s 10.75% bonds due 2005 (CGO05USR1) are trading
at about 35 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CGO05USR1for
real-time bond pricing.


AVATEX CORP: Files for Chapter 11 Protection in Dallas, Texas
-------------------------------------------------------------
Avatex Corporation (OTC Bulletin Board: AVAT) and five
subsidiaries each filed a voluntary petition for relief under
chapter 11 of the Bankruptcy Code in the United States
Bankruptcy Court for the Northern District of Texas, Dallas
Division. The names of the companies that filed and their
bankruptcy case numbers are as follows:

     Avatex Corporation Case No. 02-81268-11

     Avatex Funding, Inc. Case No. 02-81274-11

     Davenport, Inc. Case No. 02-81287-11

     National Aluminum Corporation Case No. 02-81281-11

     Natmin Development Corporation Case No. 02-81278-11

     US HealthData Interchange, Inc. Case No. 02-81284-11

Avatex and the subsidiaries also intend to file a proposed Joint
Liquidating Plan of Reorganization and a proposed Disclosure
Statement for the Plan within the next few days. Under the
proposed Plan, the companies will not continue to operate any
business; instead, they will liquidate their assets and
distribute cash to their creditors. As soon as practicable after
the Effective Date of the Plan, cash will be distributed to
certain classes of creditors and the companies' assets will be
transferred to a liquidating trust. The trustee of the
liquidating trust shall, in an expeditious but orderly manner,
liquidate and convert the assets to cash in manner that, in his
reasonable business judgment, maximizes the value of the assets
while not unduly prolonging the duration of the trust.

Prior to the bankruptcy filing, Avatex's Board of Directors
elected Robert H. Stone to the Board and named him to the
additional position of Chief Restructuring Officer.  Mr. Stone
continues to serve as Avatex's Vice President, General Counsel
and Secretary. The Board also terminated without cause the
employment of all of company's other officers, including its Co-
Chief Executive Officers, Abbey J. Butler and Melvyn J. Estrin.
Following these actions, all of the directors except Mr. Stone
resigned from the Board.

Avatex also announced its new business address will be as
follows:

               17000 Preston Road
               Suite 310
               Dallas, TX 75248


BATTERY TECHNOLOGIES: Swedish Unit Receives Bankruptcy Petition
---------------------------------------------------------------
Battery Technologies Inc., (OTC-BB:BTIOF) (TSX:BTI) (BERLIN:BTM)
announced operations have ceased at its Demacell facility in
Oskarshamn, Sweden, part of the Battery Technologies Sweden
Group. Demacell held responsibility for the sales and marketing
of the Demacell brand of batteries and energy saving lightbulbs
and contributed approximately 10% of the total revenues of BTS.
Demacell received a petition of bankruptcy by its banker,
Svenska Handelsbanken AB, and the company elected not to defend
the action.

The other BTS division, Dema, which has accounted for
approximately 90% of total 2002 sales of BTS and has been
profitable on a year-to-date basis, manages sales of the Toshiba
line of batteries for BTS throughout Scandinavia.

Dema has embarked on an aggressive program to sell its full
inventory of Toshiba batteries in the market at this opportune
time so as to maximize its income and return. This action is
being undertaken voluntarily, consistent with the previously
announced new strategic initiative and direction being pursued
by BTI with the support of Northern Securities Inc.

J. Bruce Pope, President and CEO of BTI said: "As part of our
previously announced new strategic initiative, we have elected
to allow operations at Demacell to terminate. The decision comes
as a result of insufficient funds to maintain all elements of
our business and a decision to focus on core elements only. We
regret that we have had to take this action, but it is in the
best longer term interests of both BTS and BTI, as it will
result in less complex banking arrangements and a reduction in
overheads, eliminating a cash drain for the company."

The investment announced November 26, 2002 by the Directors,
Executives and other outside investors in a private placement
expected to result in an infusion of $397,000 to BTI treasury
continues, with an anticipated closing late December. These
funds are for the purpose of financing the company through its
strategic repositioning.

BTI is the inventor, developer and owner of the unique, patented
rechargeable alkaline manganese (RAM(TM)) battery technology on
which it holds 43 patents related to chemistry, product design
and manufacturing processes. BTI is engaged in the worldwide
commercialization of the RAM(TM) technology and other portable
energy products through its licensees and the Dema Group, a
wholly owned subsidiary based in Scandinavia engaged in the
sales, marketing and distribution of battery and energy related
products to European markets.


BROADWING INC: Goldman Sachs to Bring-In $200-Million Investment
----------------------------------------------------------------
Broadwing Inc., (NYSE:BRW) has signed an agreement with
investment funds managed by Goldman, Sachs & Co., to provide
$200 million in financing to Broadwing in the form of Senior
Subordinated Discount Notes due in 2009.

"This financing will be used to pay down bank debt as part of
Broadwing's five-point plan to strengthen the company's
financial position," said Kevin Mooney, Broadwing's chief
executive officer. "Raising new sources of capital and amending
the maturities of our existing credit facility are key elements
of the plan. Having achieved a positive free cash flow position
for Broadwing Inc., in the third quarter, this financing
represents another solid step in executing our plan."

The commitment of financing, which the company expects to close
during the first quarter of 2003, is contingent upon Broadwing
successfully renegotiating its current bank credit facility and
the satisfaction of other customary closing conditions. To this
end, Broadwing has engaged Banc of America Securities and Lehman
Brothers to serve as financial co-advisors to the company. The
firms will assist Broadwing with its analysis of new sources of
capital, address certain amendments to Broadwing's credit
facility, review strategies for building shareholder value, and
analyze steps needed to de-leverage the company.

Muneer Satter, a managing director of Goldman Sachs, said, "We
believe Broadwing is on the right track. This investment
reflects our confidence in management's strategy and the value
of the company's core businesses."

In October, Mooney and his management team began executing on a
five-point plan designed to build long-term shareholder value.
Beyond strengthening the company's financial position, the plan
involves a focus on maintaining the strength and stability of
its Cincinnati Bell businesses, restructuring its Broadwing
Communications unit to reduce expenses and improve cash flow by
approximately $200 million annually, continuing to review
strategic alternatives to enhance shareholder value, and
reducing the company's debt balances over time.

Broadwing remains on track to achieve its 2002 financial
projections, which include revenue of $2.15 billion, EBITDA of
$640 million, and capital expenditures of $190 million. The
company also expects to remain in compliance with its existing
financial covenants package throughout 2003.

Broadwing Inc., (NYSE: BRW) is an integrated communications
company comprised of Broadwing Communications and Cincinnati
Bell. Broadwing Communications is an industry leader as the
world's first intelligent, all-optical, switched network
provider and offers businesses nationwide a competitive
advantage by providing data, voice and Internet solutions that
are flexible, reliable and innovative on its 18,500-mile optical
network and its award-winning IP backbone. Cincinnati Bell is
one of the nation's most respected and best performing local
exchange and wireless providers with a legacy of unparalleled
customer service excellence. For the second year in a row,
Cincinnati Bell was ranked number one in customer satisfaction
by J.D. Power and Associates for local residential telephone
service and residential long distance among mainstream users. It
also received the number one ranking in wireless customer
satisfaction in its Cincinnati market. Cincinnati Bell provides
a wide range of telecommunications products and services to
residential and business customers in Ohio, Kentucky and
Indiana. Broadwing Inc., is headquartered in Cincinnati, Ohio.
For more information, visit http://www.broadwing.com

Goldman Sachs is a leading global investment banking, securities
and investment management firm that provides a wide range of
services worldwide to a substantial and diversified client base
that includes corporations, financial institutions, governments
and high net worth individuals. Founded in 1869, it is one of
the oldest and largest investment banking firms. The firm is
headquartered in New York and maintains offices in London,
Frankfurt, Tokyo, Hong Kong and other major financial centers
around the world. Media inquiries for Goldman Sachs should be
directed to Andrea Raphael at 212-357-0025.

As reported in Troubled Company Reporter's Tuesday Edition,
Standard & Poor's lowered its corporate credit and bank loan
ratings of integrated telecommunications services provider
Broadwing Inc. to 'B-' from 'BB'. The downgrade reflects a
potential liquidity shortfall starting in the second half of
2003 and the increased risk of bank covenant violation if the
company's long-haul data subsidiary, Broadwing Communications
Inc., continues to perform below expectations in the absence of
an amendment to Broadwing's bank credit agreement.

The ratings on Broadwing and its subsidiaries remain on
CreditWatch with negative implications. At the end of September
2002, the Cincinnati, Ohio-based company's total debt was about
$2.5 billion.


BUDGET GROUP: Wants to Up Equity Contribution to German Unit
------------------------------------------------------------
For the second time, Budget Group Inc., and its debtor-
affiliates seek the Court's authority to loan funds to Budget
Rent A Car International Inc., and for BRACII to make a
$2,000,000 equity contribution to Budget Deutschland GmbH,
Autovermietung Westfehling GmbH, and Autohansa Autovermietung E.
Seubert GmbH.

Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor LLP,
in Wilmington, tells the Court that the equity contribution is
necessary to avoid the liquidation of Budget Germany under
German law.

Mr. Morton explains that the Debtors are making this request as
a contingency measure to preserve Budget Germany and the value
of the Debtors' retained business in the event the Official
Committee of Unsecured Creditors declines to support the
Verwaltung Master Agreement and the Debtors subsequently elect
to withdraw the Agreement.

The Committee, Mr. Morton adds, has indicated that it will
support this request if it declines to support the motion on the
Verwaltung Master Agreement. (Budget Group Bankruptcy News,
Issue No. 12; Bankruptcy Creditors' Service, Inc., 609/392-0900)

Budget Group Inc.'s 9.125% bonds due 2006 (BD06USR1) are trading
at around 21 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BD06USR1for
real-time bond pricing.


CABLEVISION SYSTEMS: Will Pay Quarterly Dividend on Preferreds
--------------------------------------------------------------
Cablevision Systems Corporation (NYSE:CVC) -- whose corporate
credit rating has been downgraded by Standard & Poor's to BB --
announced quarterly dividends on CSC Holdings, Inc.'s two series
of preferred stock:

     --  11-3/4% Series H Redeemable Exchangeable Preferred
         Stock - ($2.9375 per preferred share paid in cash)

     --  11-1/8% Series M Redeemable Exchangeable Preferred
         Stock - ($2.78125 per depositary share paid in cash)

The record date for dividends on the two issues of preferred
stock will be December 24, 2002. The payment date will be
January 2, 2003.

Cablevision Systems Corporation is one of the nation's leading
entertainment and telecommunications companies. Its cable
television operations serve 3 million households located in the
New York metropolitan area. The company's advanced
telecommunications offerings include its Lightpath integrated
business communications services; its Optimum-branded high-speed
Internet service and iO: Interactive Optimum, the company's
digital television offering. Cablevision's Rainbow Media
Holdings, Inc. operates programming businesses including
American Movie Classics, The Independent Film Channel and other
national and regional services. In addition, Rainbow is a 50
percent partner in Fox Sports Net. Cablevision also owns a
controlling interest and operates Madison Square Garden and its
sports teams including the Knicks and Rangers. The company
operates New York's famed Radio City Music Hall and owns and
operates THE WIZ consumer electronics stores in the New York
metropolitan area. Additional information about Cablevision
Systems Corporation is available on the Web at
http://www.cablevision.com


CELL TECH: Independent Auditors Express Going Concern Doubts
------------------------------------------------------------
Cell Tech International Incorporated and The New Algae Company,
Inc., are engaged in producing and marketing food supplement
products made with blue-green algae harvested from Klamath Lake,
Oregon. The Company uses a multi-level distributor network
throughout the United States and Canada to distribute its
products.  Independent distributors make up the Company's sales
force. Cell Tech markets its products through distributors in
all fifty states, the District of Columbia, Guam, Puerto Rico,
American Samoa, the Virgin Islands and Canada. The Company
encourages its distributors to recruit new distributors into the
network. It places recruited distributors beneath the recruiting
distributor in the Company's network of distributors. The
distributors are paid commissions based on their personal sales
and the sales of distributors beneath them. Cell Tech assists
distributors in establishing their own businesses and provide
them with support programs such as audio and videotapes for
training, seminars and an annual convention at Company
headquarters. There are approximately 42,083 active distributors
as of September 30, 2002 compared to approximately 51,360 active
distributors as of September 30, 2001. Active distributors are
those who have purchased products in the last six months.

Net sales for the three months ended September 30, 2002 were
$6.45 million, a decrease of $0.8 million, or 11.4%, from net
sales of $7.2 million for the three months ended September 30,
2001. The decrease in sales is directly related to a 14.7%
decrease in orders. Average order size increased to $122.76 from
$115.00 over the same period. The average number of distributors
for the three months ended September 30, 2001 decreased to an
average of 42,635, which was 17.9% lower than the average of
51,964 distributors for the three months ended September 30,
2001. The number of distributors directly effects sales.

Gross profit decreased to 27.2% of net sales in the three months
ended September 30, 2002, from 68% of net sales in the three
months ended September 30, 2001. The decrease is due to the
recording of an additional reserve of $3.1 million for
potentially unsaleable inventories. Cell Tech determined that
the sales of its plant food and agricultural products was less
than previously anticipated and recorded this reserve against
the carrying value of inventory designated for plant food and
agricultural uses.

Commission expense for the three months ended September 30, 2002
and 2001 was $2.8 million, or 43.7% of net sales, and $3.4
million, or 47.3% of net sales, respectively, representing a
decrease of $0.6 million, or 18.1%. During the three months
ended September 30, 2001, the Company implemented a new
commission structure in an attempt to attract and retain
distributors. It revised this commission structure on July 1,
2002, which had the effect of reducing the commission paid to
distributors.

Net loss increased $2.5 million to $2,971,264 for the three
months ended September 30, 2002 from $423,908 for the comparable
period in 2001. As a percentage of net sales, net loss increased
to 46% for the three months ended September 30, 2002 from 6% for
the comparable period in 2001. The increase was due to the
recording of an additional reserve of $3.1 million for
potentially unsaleable inventories offset by decreases in
general and administrative expenses and commission expenses.
Cell Tech recorded this reserve to reflect the reduced
marketability of a portion of its inventory that was better
suited for the agricultural market.

Net sales for the nine months ended September 30, 2002 were
$20,311,470, representing a decrease of 11.5% from net sales of
$22,944,017 for the nine months ended September 30, 2001. The
decrease in sales is directly related to a 14.4% decrease in
orders for the same period. Average order size increased to $120
from $116 over the same period. The average number of
distributors for the nine months ended September 30, 2002
decreased to an average of 33,646, which was 27.6% lower than
the average of 46,491 distributors for the nine months ended
September 30, 2001.

Gross profit decreased to 57.8% for the nine months ended
September 30, 2002 from 68% for the nine months ended September
30, 2001. The decrease is due to the recording the additional
reserve for potentially unsaleable inventories.

Commission expense for the nine months ended September 30, 2002
and September 30, 2001 was $9.3 million, or 45.9% of sales, and
$11.1 million, or 48.5% of sales, respectively, representing a
decrease of $1.8 million, or 16.1%.

Net loss increased 26.5% to $2.8 million for the nine months
ended September 30, 2002 from a loss of $2,220,766 for the
comparable period in 2001. As a percentage of net sales, net
loss increased to 13.8% for the nine months ended September 30,
2002 from 10% for the comparable period in 2001. Again, the
dollar increase in the loss was due to the recording of a $3.1
million reserve for potentially unsaleable inventories, offset
by the curtailment of various operating expenses.

Cell Tech had net losses of approximately $5,015,350, $2,783,939
and $4,140,824 for the years ended December 31, 2001, 2000 and
1999, respectively and had a working capital deficit of
$6,437,186 and $7,341,964 at December 31, 2001 and 2000,
respectively. As a result, the Company's independent certified
public accountants have included in the annual report on the
Company an explanatory paragraph covering those periods, which
expresses substantial doubt about Cell Tech's ability to
continue as a going concern.

Working capital deficit at September 30, 2002, amounted to
$5,528,721, which represents an increase in working capital of
$908,465 from a working capital deficit of $6,437,186 as of
December 31, 2001. At September 30, 2002, Cell Tech had a bank
overdraft of $101,008 versus a bank overdraft of $763,105 as of
December 31, 2001.


CHARTER COMMS: Streamlining Organization into Five Divisions
------------------------------------------------------------
In a move to improve customer relationships, eliminate
redundancies, provide alignment around common goals and enhance
communications, Charter Communications, Inc., (Nasdaq: CHTR)
announced sweeping changes to its operating structure. The
company will consolidate operations into five geographically
clustered divisions, and focus on customer-oriented execution
within key markets that serve an average of 250,000 customers
within those five divisions.

At the same time, changes in the St. Louis-based corporate
office will enable the company to eliminate redundant practices,
streamline reporting structures, better leverage technology and
information systems and take advantage of its size and national
scope.

Charter President and CEO Carl Vogel said this announcement is
the next natural step following the consolidation and rebuild of
systems that were acquired by Charter as part of 14 acquisitions
over the last three years. As a result, Charter is now the
nation's third-largest cable television company with some 6.7
million customers.

"Having rebuilt and upgraded about 87 percent of our plant, it's
necessary now to identify and capitalize on efficiencies in our
operating organization," Mr. Vogel said. "These changes are the
result of an internal review of every department, staff and
group within Charter's organizations during the last two months.
This flattened organization will eliminate management layers and
reduce redundancy, allowing decisions to be made closer to the
customer and resulting in streamlined operations, improved
communication and more effective execution."

Mr. Vogel said Charter will reorganize the company's operating
structure into five new geographically clustered divisions. Each
division head will report directly to Charter's newly appointed
Executive Vice President of Operations, Margaret A. "Maggie"
Bellville, who also has responsibility for marketing,
programming, and customer care.

"Maggie has been immediately tasked to oversee the staffing of
the new operating divisions," Mr. Vogel said. "We're very
fortunate to have recruited this proven leader in
telecommunications. Her more than 20 years of broad-based
experience in operations, business development, marketing and
sales at Cox Communications, Century Communications, and
GTE/Contel Cellular have allowed her to hit the ground running
with this initiative."

"Our challenge will be to retain our best internal talent,
recruit top talent and put together a team that will execute
with excellence and focus," Ms. Bellville said. "This is a
tremendous opportunity to re-energize Charter and align every
employee around common goals that focus on the customer."

Mr. Vogel indicated the workforce reductions would be
significant and determined by year-end. Estimated savings from
this streamlining will be announced along with fourth-quarter
results in February 2003. "It is very important that we complete
this restructuring as soon as possible so we can focus our
attention on our customers," Mr. Vogel said. "It is our
expectation that the large majority of the restructuring will be
completed within the first quarter of 2003."

Charter Communications, A Wired World Company(TM), serves
approximately 6.7 million customers in 40 states. Charter
provides a full range of advanced broadband services to the
home, including cable television on an advanced digital video
programming platform via Charter Digital Cable(R) brand and
high-speed Internet access marketed under the Charter
Pipeline(R) brand. Commercial high-speed data, video and
Internet solutions are provided under the Charter Business
Networks(TM) brand. Advertising sales and production services
are sold under the Charter Media(TM) brand. More information
about Charter can be found at http://www.charter.com

                      *    *    *

As reported in Troubled Company Reporter's October 31, 2002
edition, Moody's Investors Service downgraded the debt ratings
of Charter Communications Inc., and its indirect subsidiary
Charter Communications Holdings. The ratings are still under
review for possible downgrade.

   Rating Actions                       From             To

Charter Communications Inc.

* Convertible Senior Debt                B3             Caa2

* Shelf Registration                   (P)B3/          (P)Caa2/
  for prospective                     (P)Caa1/         (P)Caa3/
  Senior/Subordinated/Preferred       (P)Caa2          (P)Ca
  issuances;

* Senior Unsecured Issuer Rating         B3             Caa2

* Senior Implied Rating                  Ba3             B1

* Liquidity Rating - SGL-2 (unchanged);

Charter Communications Holdings, LLC

* Senior Debt                            B2              B3

Charter Communications Operating, LLC

* Senior Secured Bank Debt               Ba3             B1

CC VIII Operating, LLC

* Senior Secured Bank Debt               Ba3             B1

Falcon Cable Communications, LLC

* Senior Secured Bank Debt               Ba3             B1

CC VI Operating, LLC

* Senior Secured Bank Debt               Ba3             B1

CC V Holdings, LLC (formerly Avalon Cable LLC)

* Senior Unsecured Debt                     B2 (unchanged)

Renaissance Media Group LLC

* Senior Unsecured Debt                     B2 (unchanged)

The rating action reflects the company's disappointing operating
performance. Moody's believed that cash flow growth will
fall below expectations with respect to affecting targeted
deleveraging and balance sheet strengthening by 2004. However,
liquidity profile can still be characterized as good as the
company's still expects to be in compliance with covenants.


CONDOR TECHNOLOGY: Sells Certain Assets to Answerthink for $1MM
---------------------------------------------------------------
Effective November 30, 2002, Condor Technology Solutions, Inc.,
sold certain assets comprising the enterprise resource software
reseller business to Answerthink, Inc., a Florida corporation,
for a purchase price of approximately $1,000,000, including a
cash payment to the Company in the amount of approximately
$615,000 and the assumption of debt.  The assets being sold to
Answerthink, Inc., primarily located in Iselin, New Jersey,
comprised approximately 6% of the total assets of Condor
Technology Solutions and its subsidiaries and approximately 22%
of the consolidated revenue of the Company and its subsidiaries
for the three months ended September 30, 2002.

Pursuant to a Plan of Liquidation adopted by Condor on October
30, 2002, the Company contemplates the sale of its remaining
business, the Infrastructure Services Division located primarily
in Langhorne, Pennsylvania, as part of an orderly disposition of
its remaining assets. As a result of the size of the Company's
debt obligations (even after repayment of certain debts with the
proceeds of the SAP Re-seller Business Transaction) and the
Company's projection of the amount it is likely to receive for
its remaining business unit, if and when such unit is sold, no
funds generated by the liquidation of Condor Technology
Solutions, Inc.'s remaining assets will be available for
distribution to stockholders.


COVANTA ENERGY: Court OKs Dissolution of 2 Spanish Subsidiaries
---------------------------------------------------------------
Ogden International Europe Inc., one of Covanta Energy
Corporation's debtor-affiliates, obtained the Court's authority
to consent to the voluntary filing for bankruptcy of Ogden
Spain, S.A. and liquidation of Ogden Entertainment Services
Spain, S.A. pursuant to Section 363(b)(1) of the Bankruptcy Code
and Rules 2002(a), 9006(f), 6004(g) and 7062 of the Federal
Rules of Bankruptcy Procedure.

Judge Blackshear authorizes Ogden International Europe, Inc., to
approve the voluntary bankruptcy proceedings of its Spanish
subsidiary Ogden Spain S.A. and the liquidation of Ogden
Entertainment Services Spain, S.A.  Furthermore, the Debtors and
their subsidiaries are authorized to incur costs not to exceed
$225,000 in connection with the voluntary proceedings of Ogden
Spain and not to exceed $30,000 in connection with the
liquidation of Ogden Entertainment, which amount have been
included in the Debtors' DIP budget. (Covanta Bankruptcy News,
Issue No. 18; Bankruptcy Creditors' Service, Inc., 609/392-0900)


CROWN CLO: S&P Assigns BB+ Rating to Ser. 2002-1 Class E Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to CROWN CLO 2002-1's $960 million floating-rate notes
due 2012.

The preliminary ratings are based on information as of Dec. 10,
2002. Subsequent information may result in the assignment of
final ratings that differ from the preliminary ratings.

     The preliminary ratings reflect:

     -- The credit enhancement provided to the each class of
        notes through the subordination of cash flows to more
        junior classes;

     -- The transaction's cash flow structure, which has been
        subjected to various stresses requested by Standard &
        Poor's;

     -- The experience of the servicer;

     -- The basis swap incorporated to mitigate basis risk; and

     -- The legal structure of the transaction, including the
        bankruptcy-remoteness of the issuer.

                 PRELIMINARY RATINGS ASSIGNED

                        CROWN CLO 2002-1

     Class                            Rating   Amount (mil. $)
     A-1 (variable funding notes)     AAA      Up to $600 mil.
     A-2                              AAA                272.5
     B                                AA                  32.6
     C                                A+                  10.9
     D                                BBB                 35.0
     E                                BB+                  9.0
     Issuer beneficial interests
     and administrator beneficial
     interests                        N.R.                40.0

     N.R.-Not rated.


DANA CORP: Appoints Cheryl W. Grise to Board of Directors
---------------------------------------------------------
Cheryl W. Grise, President - Utility Group for Northeast
Utilities (NYSE: NU) and Chief Executive Officer of its
principal operating subsidiaries, has been elected to the Dana
Corporation (NYSE: DCN) Board of Directors, Dana Chairman and
CEO Joe Magliochetti announced.

"Cheryl Grise's administrative experience and operations
leadership represents a great addition to the Dana Board," Mr.
Magliochetti said.  "Her broad experience will provide a rich
perspective on behalf of our shareholders."

Ms. Grise joined Northeast Utilities in 1980 as a Counsel in the
Legal Department.  She was elected to the additional position of
Assistant Secretary in 1981 and was promoted to Senior Counsel
in 1985.  She was promoted to Assistant Vice President of Human
Resources in 1988, to Vice President of Human Resources in 1991,
to Senior Vice President of Human Resources and Administrative
Services in 1994, to Senior Vice President and Chief
Administrative Officer in 1995, to Senior Vice President,
Secretary, and General Counsel in 1998.

She was named President of Northeast's Utility Group in 2001.
In this role, she is responsible for all gas and electric
utility business operations within the Northeast Utilities
system, as well as regulatory relations and policies.
Connecticut-based Northeast Utilities operates New England's
largest energy delivery system, serving nearly two million
electric power and natural gas customers.

Ms. Grise received a Bachelor of Arts degree from the University
of North Carolina at Chapel Hill and a Juris Doctor degree from
Western State University in San Diego.  She has also completed
the Yale Executive Management Program.

Ms. Grise is a member of the State Bar of California, Chair of
the Board of Directors of the Hartford Chapter of the American
Red Cross, a member of the Boards of Directors of the
Southwestern Area Commerce and Industry Association, the
University of Connecticut Foundation, Inc., MetroHartford
Alliance, and The New England Council.  She is a member of the
Advisory Council of the Urban League of Greater Hartford, Inc.
She serves as a Corporator of Saint Francis Hospital and is a
senior fellow of the American Leadership Forum.

Dana Corporation -- whose new $250 million debt issue has been
rated by Standard & Poor's at 'BB' -- is one of the world's
largest suppliers of components, modules, and complete systems
to global vehicle manufacturers and their related aftermarkets.
Founded in 1904 and based in Toledo, Ohio, the company operates
some 300 major facilities in 34 countries and employs
approximately 70,000 people.  The company reported sales of
$10.3 billion in 2001.  Dana's Internet address is
http://www.dana.com


DDI CORP: Commences Trading on Nasdaq SmallCap Market Wednesday
---------------------------------------------------------------
DDi Corp., (Nasdaq: DDIC) a leading provider of time-critical,
technologically advanced, interconnect services for the
electronics industry, has been approved to transfer the listing
of its common stock from The Nasdaq National Market to The
Nasdaq SmallCap Market.

DDi's common stock was transferred to The Nasdaq SmallCap Market
at the opening of business Wednesday, December 11, 2002, and
will continue to trade under the ticker symbol DDIC. DDi had
applied for the market transfer after it was notified by Nasdaq,
as previously disclosed, that it did not meet the minimum bid
price requirement for continued listing on the Nasdaq National
Market.

DDi currently meets all the continued inclusion requirements for
listing on the Nasdaq SmallCap Market except for the $1.00
minimum bid price per share requirement. As a result of the
transfer, DDi will have until February 3, 2003, to meet the
$1.00 minimum bid price requirement to remain listed on The
Nasdaq SmallCap Market. DDi may also be eligible for an
additional 180 day grace period after February 3, 2003, provided
that it meets certain of the initial Nasdaq SmallCap Market
listing criteria at that time.

There can be no assurance that DDi will qualify for an extended
grace period, will be able to meet the $1.00 minimum bid price
requirement before February 3, 2003 or during the extended grace
period (if available) or that DDi will remain in compliance with
other applicable listing requirements. If DDi has not met the
minimum bid price requirement at the expiration of all
applicable grace periods or it fails to meet other applicable
listing requirements, the common stock may be subject to
delisting from the SmallCap Market, in which event DDi's
securities might be quoted in the over-the- counter market.

DDi is a leading provider of time-critical, technologically
advanced, design, development and manufacturing services.
Headquartered in Anaheim, California, DDi and its subsidiaries,
with design and manufacturing facilities located across North
America and in England, service approximately 2,000 customers
worldwide.

                         *    *    *

As reported in Troubled Company Reporter's November 6, 2002
edition, Standard & Poor's Ratings Services lowered its
corporate credit and senior secured bank loan ratings on
circuit-board-maker DDi Corp., to triple-'C'-plus from single-
'B' and lowered the subordinated note rating to triple-'C'-minus
from 'CCC+'.

The rating action was based on vulnerable credit measures and
weak operating performance.

The outlook is negative on the Anaheim, California-based
company, which has total debt outstanding of about $305 million.

At the same time, Standard & Poor's lowered the coporate credit
rating on Details Capital Corp., a ratings family member, to
'CCC+' from 'B', and its senior note ratings were lowered to
'CCC-' from 'CCC+'. The outlook is negative.


DECRANE AIRCRAFT: S&P Places B+ Rating on CreditWatch Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings,
including its 'B+' corporate credit rating, on El Segundo,
California-based DeCrane Aircraft Holdings Inc., on CreditWatch
with negative implications.

"The CreditWatch placement reflects the company's deteriorating
financial profile due to the continued weakness in the
commercial aerospace market, especially the business jet
segment," said Standard & Poor's credit analyst Christopher
DeNicolo. Poor operating results may also result in the
violation of financial covenants in the company's $318 million
secured credit facility in the near term.

Revenues through the first nine months of 2002 have declined 17%
due to the downturn in the corporate aircraft market and lower
production of commercial jetliners. Recovery in both corporate
and commercial aircraft production is not expected until at
least 2004. DeCrane has attempted to address the impact of lower
volumes on profitability by closing facilities and reducing
personnel. However, operating income still declined 37% in the
first nine months of 2002. The firm remains highly leveraged,
with total debt to capital of almost 80%.

Liquidity is likely to be adequate for operational needs and
near-term debt maturities (approximately $15 million in 2003),
with modest, internal cash flow generation, $25 million in cash,
and $29 million available under the company's revolving credit
facility as of September 30, 2002. Standard & Poor's expects to
meet with management in the near future to discuss DeCrane's
business prospects and plans to restore the company's credit
profile. Ratings on DeCrane will likely be lowered if the sharp
downturn in the commercial aerospace and business aircraft
markets leads to credit protection measures that are no longer
appropriate for current ratings.


DELHAIZE AMERICA: Cash Flow Issues Spur S&P to Cut Rating to BB+
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Delhaize America Inc., to 'BB+' from 'BBB-', and
removed the rating from CreditWatch with negative implications.

The downgrade is based on disappointing cash flow protection
measures, which had been expected to improve incrementally over
time from pro forma levels at the time of the company's
acquisition of supermarket operator Hannaford Bros. Co.
Coverage ratios are now expected to be at or below 2001 levels.

The outlook is stable. The rating was originally placed on
CreditWatch on September 26, 2002. Salisbury, N.C.-based
Delhaize America operates more than 1,470 supermarkets on the
East Coast under the Food Lion, Hannaford, and Kash n' Karry
banners. There was about $3.8 billion in debt outstanding as
of September 28, 2002.

"The below-average credit measures reflect debt incurred in the
2000 acquisition of Hannaford, exacerbated by a competitive
climate that is hindering recovery," said Standard & Poor's
credit analyst Mary Lou Burde. "Although profitability over the
past few years has been good, same-store sales and EBITDA
margins faltered somewhat in 2002."

"This reflects intensified competition from both traditional and
nontraditional food retailers, such as supercenters, which are
rapidly expanding their presence--as well as economic softness,
particularly in the Southeast where Food Lion, the company's
largest banner, is concentrated," added Ms. Burde.

Given its solid market position and efficient operations,
Delhaize America should be able to maintain credit ratios
despite the current challenging climate for supermarkets.
Moreover, management is sharpening execution at Food Lion, which
should mitigate competitive pressures and enhance sales and
margins as the economy improves. The expectation that internal
cash flow will cover fixed and working capital needs and the
dividend provides additional cushion.


DOMAN INDUSTRIES: Canadian Court Extends CCAA Stay Until Feb. 28
----------------------------------------------------------------
Doman Industries Limited announced that, on December 6, 2002,
the interim order, granted by the Supreme Court of British
Columbia on November 7, 2002 pursuant to the Companies Creditors
Arrangement Act providing for a stay of proceedings and certain
ancillary matters, was continued by the Court and extended until
February 28, 2003.

The Company expects to file a plan of compromise and arrangement
with the Court, for consideration by Creditors, early in
January, 2003.


ECHOSTAR COMMS: Pulls Plug on Proposes Merger Pact with Hughes
--------------------------------------------------------------
EchoStar Communications Corporation (Nasdaq:DISH) and General
Motors and its subsidiary, Hughes Electronics Corporation (NYSE:
GM, GMH), have reached a settlement to terminate the proposed
merger of Hughes and EchoStar, effective immediately.

Under terms of the settlement, EchoStar has paid to Hughes $600
million in cash, and Hughes will retain its 81 percent ownership
position in PanAmSat (Nasdaq:SPOT).

The companies reached this settlement because the proposed
merger could not be completed within the time allowed by the
merger agreement. This was due to action taken by the Department
of Justice, 23 states, the District of Columbia and Puerto Rico
to block the merger as well as the Federal Communications
Commission's decision to send the merger application to a
hearing.

"We are appreciative of all the support we received and the
opportunity to present the merger proposal to regulators.
Obviously, we are disappointed in the final outcome. However,
EchoStar will continue to seek alternative, innovative ways to
provide competition to the rapidly consolidating cable industry
and to provide more choices for all consumers," said EchoStar
Chairman and Chief Executive Officer Charles Ergen.

"We continue to believe that the proposed merger would have been
a victory for consumers nationwide, and for our shareholders. We
worked hard on it to get the required regulatory approval and
are disappointed that we were not able to complete the merger,"
said Hughes President and Chief Executive Officer Jack A. Shaw.
"However, since the merger couldn't be completed, we concluded
that this settlement is the best alternative for Hughes and
places us in the best position to move ahead with our business."

As a result of the merger termination, EchoStar will take an
approximate $700 million write off in the fourth quarter for the
merger breakup fee and other related merger expenses.

EchoStar Communications Corporation and its DISH Network
satellite TV system provide over 500 channels of digital video
and CD-quality audio programming as well as advanced satellite
TV receiver hardware and installation nationwide. EchoStar is
included in the Nasdaq-100 Index which contains the largest non-
financial companies on the Nasdaq Stock Market. Visit EchoStar's
Investor Relations website at www.echostar.com. DISH Network
currently serves 8 million customers in the United States. DISH
Network is located on the Internet at http://www.dishnetwork.com

At September 30, 2002, Echostar's balance sheet shows a total
shareholders' equity deficit of close to $1 billion.

HUGHES, a world-leading provider of digital television
entertainment, broadband services, satellite-based private
business networks, and global video and data broadcasting, is a
unit of General Motors Corporation. The earnings of HUGHES are
used to calculate the earnings attributable to the General
Motors Class H common stock (NYSE:GMH).

General Motors (NYSE: GM), the world's largest vehicle
manufacturer, designs, builds and markets cars and trucks
worldwide, and has been the global automotive sales leader since
1931. GM employs about 355,000 people around the world. More GM
information can be found at http://www.gm.com


ECONNECTIONS INC: Court Fixes Jan. 10, 2003 Claims Bar Date
-----------------------------------------------------------
Econnections, Inc., has duly filed a Certificate of Dissolution
under the provisions of Section 275 of the General Corporation
Law of the State of Delaware, and that certificate took effect
on October 28, 2002.

Anyone who believes they have a claim against the Debtor must
submit that claim to:

      Henry W. Chin
      Executive Vice-President
      Econnections, Inc.
      P.O. Box 439
      Pasadena, CA 91102

before 5:00 p.m. on January 10, 2003, or will be forever barred
from asserting it.

Entities who currently hold shares of equity in the Company do
need not file a claim on account of that equity interest.


ENCOMPASS SERVICES: Signs-Up Weil Gotshal as Chapter 11 Counsel
---------------------------------------------------------------
Encompass Services Corporation and its debtor-affiliates ask
Judge Greendyke for permission to employ Weil, Gotshal & Manges
LLP as their attorneys in connection with the commencement and
prosecution of their Chapter 11 cases.

Gray H. Muzzy, Encompass' Senior Vice President, Secretary and
General Counsel, explains that the Debtors selected Weil Gotshal
as their attorneys because of the firm's knowledge of their
business and financial affairs, as well as its extensive general
experience and knowledge in debtors' protections and creditors'
rights and in business reorganizations under Chapter 11 of the
Bankruptcy Code.

Mr. Muzzy tells the Court that Weil Gotshal has been actively
involved in major Chapter 11 cases, including representing the
debtors in WorldCom, Inc.; Global Crossing Ltd.; Enron Corp.;
APW Ltd.; Bethlehem Steel Corporation; Pioneer Companies, Inc.;
Regal Cinemas, Inc.; Armstrong Worldwide Industries, Sunbeam
Corporation, Ames Department Stores, Inc., Genesis Health
Services Corp., Carmike Cinemas, Inc., DIMAC Holdings, Inc., Sun
Healthcare Group, Inc., Bruno's, Inc., United Companies
Financial Corporation; Olympia & York Development Limited;
Texaco Inc.; P.A. Bergner & Co. Holding Company; and The Drexel
Burnham Lambert Group, Inc., among others.

The Debtors anticipate Weil Gotshal will:

    (a) Take all necessary action to protect and preserve the
        Debtors' estates, including:

        -- the prosecution of actions on the Debtors' behalf;

        -- the defense of any actions commenced against the
           Debtors;

        -- the negotiation of disputes in which the Debtors are
           involved; and

        -- the preparation of objections to claims filed against
           the Debtors' estates;

    (b) Prepare on behalf of the Debtors, all necessary motions,
        applications, answers, orders, reports, and other papers
        in connection with the administration of their estates;

    (c) Negotiate and prepare on behalf of the Debtors a plan of
        reorganization and all related documents; and

    (d) Perform all other necessary legal services in connection
        with the prosecution of these Chapter 11 cases.

Mr. Muzzy asserts that if Encompass were to retain another law
firm, the Debtors, their estates, and all parties-in-interest
would be unduly prejudiced by the time and expense needed to
familiarize the attorneys to the intricacies of their business
operations.

The Debtors propose to compensate Weil Gotshal for its services
in accordance with the firm's customary hourly rates plus
reimbursement of actual necessary expenses.  The firm's
customary hourly rates are:

                  Rate      Professional
                  ----      ------------
              $390 - 750    members & counsel
               220 - 475    associates
               120 - 215    paraprofessionals

Mr. Muzzy also discloses that, within the year before the
Petition Date, Weil Gotshal received a $2,118,054 payment from
the Debtors for professional services and expenses.  Since
September 5, 2002, the firm also received a $1,350,000 retainer
from the Debtors.  Mr. Muzzy elaborates that the retainers were
applied to charges to the firm's professional services as well
as reimbursement of its expenses relating to a variety of
matters, including corporate affairs, the restructuring of the
Debtors' financial obligations, and the commencement of these
Chapter 11 cases.  In addition, as of the Petition Date, Weil
Gotshal held an $800,000 retainer for postpetition services.

Alfredo R. Perez, Esq., a member of the firm, assures the Court
that Weil Gotshal is a "disinterested person," as that term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any party-in-interest other than the Debtors in these
chapter 11 cases.  Further, Weil Gotshal does not hold or
represent any interest adverse to the Debtors' estates.
(Encompass Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


ENRON: Court Approves Sale of Natural Gas Liquids Inventories
-------------------------------------------------------------
Enron Gas Liquids, Inc., obtained the U.S. Bankruptcy Court for
the Southern District of New York's authority to sell its
natural gas liquids inventories currently stored at a storage
facility located in Mont Belvieu, Texas, free and clear of any
liens and encumbrances.  The NGL Inventories are composed of:

                         Quantity       Price
   Product              in Barrels     per Bbls      Value
   -------              ----------     --------      -----
   Ethane                127,012        $12.81       $1,627,024
   Propane                49,892         20.37        1,016,295
   Isobutane               9,418         26.88          253,156
   Normal Butane          95,861         25.20        2,415,697
   Natural Gasoline       11,225         28.14          315,872
                                                    ------------
   TOTAL                                             $5,628,044
(Enron Bankruptcy News, Issue No. 50; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

Enron Corp.'s 9.875% bonds due 2003 (ENRN03USR3), DebtTraders
reports, are trading at about 13 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ENRN03USR3
for real-time bond pricing.


ENVIRONMENTAL OIL: Files for Chapter 11 Reorganization in Idaho
---------------------------------------------------------------
Environmental Oil Processing Technology Corporation (OTC:EVOP)
announced that on December 6, 2002, the company filed a
voluntary petition for relief under Chapter 11 of the U.S.
Bankruptcy Code in the United States Bankruptcy Court, District
of Idaho (Case No. 02-04054).

Additionally, on December 9, 2002, the corporation filed
similarly on behalf of its wholly owned operating subsidiary,
Environmental Oil Processing Technology, Inc. In the petition
the corporation listed its address as 2801 Brandt Avenue, Nampa,
ID 83687 and named William Lyman Belnap, of the firm of Belnap &
Curtis, PLLC, 1401 Shoreline Drive, Suite 2, P.O. Box 7685,
Boise, ID 83707 (phone 108-345-3333; fax 208-345-4461) as its
attorney in the proceeding.

The petition indicated total assets of $12,266,286 and total
indebtedness of $13,822,120 and listed the following business
entities as subsidiaries or DBAs used within the last six years:
TMI Holding Corporation; Environmental Oil Services, Inc.;
Environmental Oil Processing Technology, Inc; EOPT Refining of
Nevada, Inc.; EOPT Power Group of Nevada, Inc.; EOPT Oil
Recovery, Inc.; and EOPT ProTech, Inc. EVOP, which had
73,220,116 shares of common stock outstanding at the time of the
filing, intends to file a Plan or Reorganization with the Court
as soon as practicable.

Environmental Oil Processing Technology Corporation, with its
headquarters in Nampa, Idaho, has developed a process and
facilities, which minimize waste oil disposal, as it is known
today. The company's plant utilizes proven technology to convert
waste oil into environmentally friendly products such as naphtha
(gasoline), #2 diesel, residuum, burner fuel and cogeneration.
For more information, visit the company's Web site at
http://www.environmentaloil.com


EXIDE TECH.: Asks Court to Further Extend Exclusive Periods
-----------------------------------------------------------
Exide Technologies and its debtor-affiliates' exclusive period
to file a plan of reorganization under Section 1121 (b) of the
Bankruptcy Code is currently set to expire on December 11, 2002,
while their exclusive period to solicit acceptances of that plan
pursuant to Section 1121(e) will expire on February 10, 2003.

By this motion, the Debtors ask the Court to extend their
exclusive periods to file a plan until June 9, 2003 and to
solicit acceptances of that plan until August 9, 2003.

According to Laura Davis Jones, Esq., at Pachulski Stang Ziehl
Young & Jones P.C., in Wilmington, Delaware, the Debtors and
their professionals have worked to ensure that these cases
proceed at a rapid rate to maximize the best interest of the
Debtors, their estates and their creditors, and are "on-track"
with these goals.  Since the Petition Date, the Debtors:

  -- have prepared and filed their Summary of Schedules and
     Statement of Financial Affairs and finalized amendments to
     the Schedules and Statements of Financial Affairs;

  -- continue to develop a comprehensive analysis of the
     Debtors' leases and other executory contracts;

  -- negotiated and implemented a court-approved key employee
     retention program, which creates incentive milestones for a
     prompt and consensual conclusion of these Chapter 11 cases,
     in particular by December 2003 when the Prepetition
     Lenders' Standstill Agreement expires;

  -- opposed the establishment of a Equity Security Holders
     Committee; and

  -- negotiated with their lending constituencies and the
     Creditors' Committee a number of issues related to the
     Cybergenics decision.

To that end, the Debtors and their professional advisors
explored restructuring alternatives and mechanisms including the
sale and consolidation of certain business segments of the
Debtors' business.  Furthermore, the Debtors have held
continuing discussions with the Committee and the Prepetition
Lenders regarding these restructuring alternatives.

In light of the size and complexity of the Debtors' business,
Ms. Jones believes that an extension of the exclusive periods is
justified.  Not only do the Debtors have 19 manufacturing
facilities in the United States and employ 6,500 persons, but
they are also attempting to coordinate their operational and
restructuring efforts with the ongoing operational restructuring
of the Debtors' European non-debtor subsidiaries.

Ms. Jones tells the Court that the Debtors seek the requested
extensions in good faith, and contend that there is no risk of
harm to the Debtors' creditors if the Court grants these
extensions.  The Debtors are not seeking the extensions to delay
administration of their cases or to pressure creditors to accept
unsatisfactory plans.  On the contrary, these requests are
intended to facilitate an orderly, efficient and cost-effective
plan process for the benefit of all creditors.  Accordingly,
extending the exclusive periods as requested by the Debtors is
reasonable and appropriate under the circumstances of these
cases.

The Debtors believe that the additional time requested to
formulate their plan will be beneficial to their estates and
will result in a more efficient use of estate assets and
resources.

The Court will convene a hearing on December 18, 2002 to
consider the Debtors' request.  By application of Del.Bankr.LR
9006-2, the deadline for the Debtors to propose a plan is
automatically extended through the conclusion of that hearing.
(Exide Bankruptcy News, Issue No. 15; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


FEDERAL-MOGUL: U.S. Trustee Questions FTI's Disinterestedness
-------------------------------------------------------------
Donald F. Walton, the Acting U.S. Trustee for Region 3, asserts
that FTI Consulting is not qualified to be retained as a
professional for Federal-Mogul Corporation and its debtor-
affiliates, since it has been serving even before the Petition
Date as consultant to the Prepetition Lenders.  Mr. Walton notes
that the interests of the lenders, who are among the Debtors'
largest creditors, are structurally and inherently adverse to
those of the Debtors and the estates, even though the lenders
and the Debtors:

    (a) may share some common goals;

    (b) do not necessarily openly disagree on particular issues.

Mr. Walton argues that the interest of the lenders is to protect
their collateral, assert the broadest lien rights possible and
recover their claims in full; they acknowledge no duty to any
other creditor.  The Debtors, on the other hand, have multiple
creditor constituencies to address and have an interest, on
behalf of the estate, in minimizing the reach of the lenders'
control and in preserving the availability of assets for
distribution to unsecured creditors.  These interests remain
adverse even if the Debtors have agreed to waive direct
challenges to the liens.

Mr. Walton also contends that FTI's billing rates, which ranges
up to $595 per hour indicate that the work they are doing for
the lenders -- and, for that matter, for the Debtors -- is not
ministerial or trivial.  The lenders have engaged a firm of
expensive highly trained professionals to have access to their
skills, knowledge, experience and analytical abilities to assist
them in advancing their interests in the Debtors' cases.

"It is reasonable to presume that FTI knows, when it is
rendering services to the lenders, that the lenders want to know
how the information, event or decision in question will impact
on the lenders' position," Mr. Walton says.  "Therefore, there
can be no question that FTI is a consultant representing the
lenders' position, which is adverse to the estate."

Mr. Walton also questions the purported confidential nature of
FTI's engagement with the lenders, which was not disclosed.  Mr.
Walton asserts that the Debtors have no way of knowing whether
FTI is being placed into the position of having one group of FTI
professionals review the work of another group of FTI
professionals if they do not know what FTI is doing for the
lenders.  The Court also has no way of determining that FTI is a
disinterested person if it cannot be told what FTI is doing for
some of the largest creditors in these cases.

"If FTI's work for the lenders cannot even be described to the
Court or the U.S. Trustee or to the Debtors, there is no
question that FTI holds an interest adverse to the estate -- so
adverse, indeed, that it cannot even cooperate in making
appropriate disclosures in its own retention application," Mr.
Walton speculates.

                 Debtors Restate FTI Application

The Debtors now seek to limit FTI Consulting's employment solely
to perform claims management-related services.  FTI will assist
the Debtors' in-house personnel in addressing claims management
issues.

Laura Davis Jones, Esq., at Pachulski Stang Ziehl Young & Jones
P.C., explains that the modification of FTI's employment is a
result of the Debtors' discussions with the U.S. Trustee and in
consideration of the Court's comments.  Ms. Jones explains that
relegating the BRS Group as claims management consultant
eliminates the prospect of an actual or potential disqualifying
conflict of interest while preserving substantial and valuable
elements of the experience and institutional knowledge with
respect to the Debtors' claims process that the BRS Group has
developed to date.  The BRS Group's services will be similar to
those they previously performed when they were still part of
PricewaterhouseCoopers LLP.  The Debtors will seek another
professional to perform the financial advisory services formerly
performed by the BRS Group.

Ms. Jones reports that the former BRS Group has been essential
in:

    (a) formulating and implementing the Debtors' claims
        management protocol and claims databases;

    (b) analyzing claims asserted against the Debtors to date;

    (c) assisting the Debtors in their calculation of actual and
        potential damages that may result from the rejection of
        executory contracts and unexpired leases and performing
        cost/benefit analyses with respect to the executory
        contracts;

    (d) gathering factual information and data in connection
        with the reclamation and similar claims asserted against
        the Debtors for the purpose of informing the Debtors'
        final determinations with respect to the claims; and

    (e) assisting the Debtors in reconciling their intercompany
        claims and in the preparation of a matrix of those
        claims.

Ms. Jones asserts that the BRS Group's continued services, this
time as part of FTI, are essential to the smooth operation of
the Debtors' claims administration process as the March 3, 2003
general claims bar date approaches.  Ms. Jones assures the Court
that the BRS Group will still adopt the information barrier
procedures put in place. (Federal-Mogul Bankruptcy News, Issue
No. 27; Bankruptcy Creditors' Service, Inc., 609/392-0900)

Federal-Mogul Corp.'s 8.80% bonds due 2007 (FMO07USR1),
DebtTraders says, are trading at 14 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=FMO07USR1for
real-time bond pricing.


FOAMEX INT'L: Elects CEO Thomas E. Chorman to Board of Directors
----------------------------------------------------------------
The Board of Directors of Foamex International Inc.
(NASDAQ:FMXI), the leading manufacturer of flexible polyurethane
and advanced polymer foam products in North America, elected
Thomas E. Chorman, President and Chief Executive Officer of
Foamex, to the board effective immediately.  Mr. Chorman's
election brings the number of Foamex directors to eleven.

"I am excited to welcome Tom to the Board of Directors," said
Marshall Cogan, Chairman and Founder of Foamex. "Tom is a superb
businessman. He has made great contributions to the Company in
his roles as CFO and now CEO, and his election to the Board will
be of enormous benefit to the Foamex Board and our
shareholders."

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

At September 29, 2002, Foamex's balance sheet shows a total
shareholders' equity deficit of about $157 million, as compared
to a deficit of about $181 million at December 31, 2001.


GASEL TRANSPORTATION: Sept. 30 Working Capital Deficit Tops $5MM
----------------------------------------------------------------
Gasel Transportation Lines earned approximately $100,796 in
1999, and sustained losses of $1,045,402 and $870,583 in 2000
and 2001, respectively, as well as a loss of $678,167 during the
nine months ended September 30, 2002.  At September 30, 2002,
current liabilities exceed current assets by approximately
$4,806,434.  The Company had an accumulated deficit of
approximately $1,187,285 at December 31, 2001, and $1,865,452 at
September 30, 2002. These factors raise substantial doubt about
the ability of the Company to continue as a going concern for a
reasonable period of time.

Prior to September 11, 2002, the Company had a line of credit
agreement with CitiCapital Business Credit, expiring in May,
2003. The agreement allowed the Company to borrow up to
$2,000,000, subject to borrowing base restrictions. Interest was
due monthly at 1% over prime. The outstanding balance was
secured by accounts receivable.

During 2002, the Company received advances in excess of the
amount available under its borrowing base. CitiCapital notified
the Company of its default under the line of credit agreement
and indicated its right to terminate the relationship. On
September 11, 2002, the Company entered into a Forbearance
Agreement with CitiCapital which established terms for the
issuance of a new line of credit agreement. The terms included
the assignment of accounts receivable and establishment of a
collection agreement.

Under the collection agreement, CitiCapital collects and
processes the assigned accounts receivable for a fee of .7% of
invoiced amounts. The funds collected are used to make payments
on the CitiCapital over advance. The Company receives a weekly
allowance for budgeted and necessary items as approved by
Citicapital as described in the Forbearance Agreement.

The new line of credit agreement expires in September, 2003. The
agreement allows the Company to borrow up to $2,000,000, subject
to borrowing base restrictions. Interest is due monthly at 2%
over prime. The outstanding balance of $1,869,036 at September
30, 2002, is secured by accounts receivable and all fixed
assets.

Freight revenues for the nine months ended September 30, 2002,
decreased $2,980,842 (21.5%) to $10,879,264 from $13,860,106 at
the end of the nine months period ending September 30, 2001.
Training school revenues for the nine months ended September 30,
2002, decreased $317,554 to $378,221 (45.6%) from $695,775 for
the nine months period ended September 30, 2001. The decrease in
freight revenues was basically attributable to the reduction in
the number of power units and increase in the number of empty
trucks resulting from a higher driver turnover.

The net results were that the Company had a net loss after
provision for income taxes for the nine months period ended
September 30, 2002, of $678,16) compared to a net loss of
$581,934 for the same period of 2001, which is an increase of
$96,233 (16.5%) from the prior year's loss. The net loss, as
well as the increase in net loss from the prior year is
basically attributable to a significant drop in revenue with
general and administrative expenses remaining relatively fixed
in dollar amount.

Although improved from the end of last year, the Company
continues to carry a negative working capital position. Further,
the net losses in the third quarter of 2002 have caused the
Company to be insolvent in that its liabilities now exceed its
assets. This issue is trying to be rectified by the Company
continuing its efforts to generate equity through the sale or
placement of its equity securities and its efforts to operate
profitably.


GENUITY INC: Hires Skadden Arps to Prosecute Chapter 11 Cases
-------------------------------------------------------------
Genuity Inc., and its debtor-affiliates seek the Court's
authority to employ the firm of Skadden Arps Slate Meagher &
Flom LLP, nunc pro tunc to the Petition Date, as their
bankruptcy counsel in connection with the prosecution of their
Chapter 11 cases.

According to J. Gregory Milmoe, Esq., at Skadden Arps Slate
Meagher & Flom LLP, in New York, Skadden Arps was retained in
July 2002 to provide legal advice to the Debtors in connection
with its continuing review of strategic alternatives.  Since
then, Skadden Arps has performed extensive legal work for the
Debtors in connection with their ongoing restructuring efforts.
Prior to July 2002, Skadden Arps represented a non-debtor
foreign affiliate of Genuity on certain matters unrelated to
these cases.

Mr. Milmoe relates that Skadden Arps has become familiar with
the Debtors' business affairs and many of the potential legal
issues that may arise in the context of the Debtors' Chapter 11
cases. Skadden Arps has assisted the Debtors in the preparation
of these Chapter 11 cases, various first-day motions and other
documents and pleadings.  The Debtors believe that the continued
representation by their prepetition restructuring and bankruptcy
counsel is critical to their efforts to restructure their
businesses.

Mr. Milmoe notes that another reason why the Debtors selected
Skadden Arps as their attorneys is because of the firm's
experience and knowledge in the field of debtors' and creditors'
rights and business reorganizations under Chapter 11 of the
Bankruptcy Code.  The Debtors want to employ Skadden Arps under
a general retainer because of the extensive legal services that
will be required in connection with their Chapter 11 cases.

As bankruptcy counsel, Skadden Arps will:

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

  B. attend meetings and negotiate with representatives of
     creditors and other parties-in-interest and advise and
     consult on the conduct of the case, including all of the
     legal and administrative requirements of operating in
     Chapter 11;

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

  D. prepare motions, applications, answers, orders, reports and
     papers on the Debtors' behalf necessary to the
     administration of the estates;

  E. negotiate and prepare on the Debtors' behalf plans of
     reorganization, disclosure statements and related
     agreements and documents and take any necessary action on
     the Debtors' behalf to obtain confirmation of these plans;

  F. advise the Debtors in connection with any sale of assets,
     including the proposed sale of substantially all of the
     Debtors' assets to an affiliate of Level 3 pursuant to the
     Asset Purchase Agreement dated as of November 27, 2002;

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

  H. perform other necessary legal services and provide other
     necessary legal advice to the Debtors in connection with
     these Chapter 11 cases.

Given the size, complexity, scope and international implications
of their businesses, and the large number of parties-in-
interest, the Debtors believe that it is necessary and essential
that they employ attorneys under a general retainer to render
these professional services.

Mr. Milmoe assures the Court that the members, counsel and
associates of Skadden Arps:

  -- do not have any connection with any of the Debtors, their
     affiliates, their creditors or any other party-in-interest,
     or their attorneys and accountants, the United States
     Trustee or any person employed in the office of the United
     States Trustee;

  -- are "disinterested persons," as that term is defined in
     Section 101(14) of the Bankruptcy Code; and

  -- do not hold or represent any interest adverse to the
     estates.

However, Skadden Arps has in the past represented, currently
represents, and likely in the future will represent certain
parties-in-interest in these cases in matters unrelated to the
Debtors, the Debtors' Chapter 11 cases, or these entities'
claims against or interests in the Debtors.  These parties
include:

  A. Prepetition Lenders and Bank Agent: Citigroup Inc., and JP
     Morgan Chase;

  B. Secured Creditors: Comdisco Inc., and Cisco Systems;

  C. Indenture Trustees: State Street Trust & Bank Co.;

  D. Contract Parties: Allegiance Telecom Company Worldwide, AOL
     Time Warner Inc., Qwest Communications Corporation, MCI
     WorldCom and several of its subsidiaries, including
     WorldCom Advanced Networks Inc., WorldCom Communications,
     Inc., WorldCom Technologies, Inc., MCI WorldCom Network
     Services, Inc., and UUNET Technologies, Inc.;

  E. Professionals: Arthur Andersen LLP, Ernst & Young LLP,
     PricewaterhouseCoopers LLP, Donlin Recano & Co., Baker &
     McKenzie, Kirkland & Ellis, Wilmer Cutler & Pickering, and
     Sideman & Bancroft;

  F. Underwriters: Morgan Stanley, Salomon Smith Barney, Bear
     Stearns, Credit Suisse First Boston, Goldman Sachs, Merrill
     Lynch, Deutsche Bank, J.P. Morgan Chase & Co. and UBS
     Warburg;

  G. Litigation Parties: Catalina Marketing Corp., Infonet
     Services Corp. and Black Box Corporation;

  H. Insurance Carriers: ACE USA Insurance Company, American
     International Underwriters, American Guarantee and
     Liability Ins. Co., American Home Assurance Co., American
     Int'l. Specialty Lines Ins. Co., Endurance Specialty
     Insurance Ltd., Federal Insurance Company, Greenwich
     Insurance Company, Gulf Insurance Company, Hartford Life
     and Accident Insurance Company, Illinois National Insurance
     Co., Insurance Company of the State of Pennsylvania,
     Industrial Risk Insurers, National Union Fire Insurance
     Co., St. Paul Fire and Marine Insurance Company, Unum Life
     Insurance Company of America, Westchester Fire Insurance
     Company, XL Insurance (Bermuda) Ltd. and XL Specialty
     Insurance Company;

  I. Lessors: Fireman's Fund Insurance Company, Kaiser Center,
     Inc., Metropolitan Life Insurance Company, Mony Life
     Insurance Company, Nokia Networks Inc., Reilly Industries
     Inc., RREEF USA Fund-II, Sun Life Assurance Company of
     Canada, and Union Pacific Railroad Company; and

  J. Unsecured Creditors: QWEST Communications, Nortel Networks,
     WorldCom, BellSouth, SBC Communications, Cisco Systems,
     Comdisco, Inc., State Street Bank and Trust Company,
     Sprint, AT&T, XO Communications, PricewaterhouseCoopers
     LLP, EMC Corporation, Level3 Communications LLC, NextLink,
     Ameritech, e.spire, Lucent Technologies, Southwestern Bell
     and Pacific Bell.

Mr. Milmoe discloses that on July 29, 2002, Skadden Arps was
paid a $250,000 retainer for professional services and expenses
charged.  Prior to the Petition Date, Skadden Arps submitted
invoices to the Debtors on a regular, periodic basis, for
professional fees and expenses, including estimated unposted
professional fees and expenses through the Petition Date.  In
the ordinary course of business, the Debtors paid $4,226,229.89
for the services rendered and as reimbursement for charges and
disbursements, all of which was attributable to legal services
performed and charges and disbursements incurred in
contemplation of or in connection with these cases.

Mr. Milmoe adds that when Skadden Arps represented a non-debtor
foreign affiliate of the Debtors on matters unrelated to these
cases, the firm submitted invoices and received $1,499,663.16 as
payment, the last installment of which was received on August 7,
2002.

As promptly as practicable after all fees and charges accrued
prior to the Petition Date have been finally posted, Skadden
Arps will issue a final billing statement for the actual fees,
charges, and disbursements for the period prior to the Petition
Date.  The Final Billed Amount will be paid from amounts
presently held by Skadden Arps and the balance will be held as a
postpetition retainer to be applied against any unpaid fees and
expenses approved by the Court with respect to Skadden Arps'
final fee application in these cases.

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

       Partners and Of-Counsel                $495 - 725
       Associates and Counsel                  240 - 485
       Legal Assistants and Support Staff       80 - 195

These hourly rates are subject to periodic increases in the
normal course of the firm's business, often due to the increased
experience of a particular professional. (Genuity Bankruptcy
News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


GLOBAL CROSSING: Wins Approval of Settlement with 360networks
-------------------------------------------------------------
Global Crossing Ltd., and its debtor-affiliates obtained the
Court's approval of a settlement agreement with 360networks
(USA), Inc.

To recall, the salient terms of the Settlement Agreement are:

    -- The Montreal-Buffalo IRU Agreement is amended to reduce
       the number of dark fibers from twelve to six;

    -- The June 2000 Collocation Agreement is amended to reflect
       the amendments to the Montreal-Buffalo IRU Agreement;

    -- The June 2000 Capacity Agreement is amended to reduce the
       circuit capacity to be utilized by 360 to an amount equal
       to $6,000,000 commencing on October 1, 2002.  This
       capacity will be available to 360 until the earlier of:

        * $6,000,000 actual usage, or

        * June 30, 2003;

    -- The June 2000 Maintenance Agreement is amended to reflect
       the amendments to the June 2000 Capacity Agreement;

    -- The Debtors and 360 will assume these Original
       Agreements, as amended:

        * The Montreal-Buffalo IRU Agreement;

        * The June 2000 Collocation Agreement;

        * The June 2000 Capacity Agreement; and

        * The June 2000 Maintenance Agreement;

    -- No cure payments will be paid by either the Debtors or
       360 in connection with the assumption of the Assumed
       Agreements;

    -- Both the Debtors and 360 will reject these Original
       Agreements:

        * The Seattle-Portland IRU Agreement;

        * The Portland-Klamath Falls IRU Agreement;

        * The July 2000 IRU Agreement;

        * The July 2000 Collocation Agreement;

        * The Atlantic Capacity Agreement; and

        * The North American Capacity Agreement;

    -- The Settlement Agreement will become effective five
       business days after a final order has been entered by
       this Court, the Bankruptcy Court administering 360's
       Chapter 11 proceedings, and the Canadian Court
       administering 360networks' Companies' Creditors
       Arrangement Act petition;

    -- Within two business days after the execution of the
       Settlement Agreement, 360 is required to pay $500,000
       into an escrow account.  The funds in the escrow account
       will be paid to the Debtors on the Effective Date; and

    -- The Debtors and 360 agree to release each other from any
       and all past and future claims relating to, and arising
       from, the Original Agreements, including any claims
       arising under any guaranties and any rejection damage
       claims in connection with the rejection of the Rejected
       Agreements, except claims arising after the Effective
       Date under any Assumed Agreement.  360 expressly releases
       the Debtors from any past and future claims relating to
       the Master Agreement and the Global Crossing Ltd.
       Guaranty. (Global Crossing Bankruptcy News, Issue No. 28;
       Bankruptcy Creditors' Service, Inc., 609/392-0900)


GLOBAL CROSSING: Achieves Major VoIP Milestone with Sonus
---------------------------------------------------------
Global Crossing and Sonus Networks (Nasdaq: SONS) announced that
Global Crossing has reached a significant milestone in the
operation of its next-generation voice over Internet Protocol
network, which is supported by Sonus Networks' voice
infrastructure solutions. In the month of November alone, the
Global Crossing VoIP network carried more than one billion
minutes of voice traffic for carrier and enterprise customers.
As a reference point, the Global Crossing VoIP network carried
2.3 billion minutes of traffic during the entire third quarter.

"We built our global, IP-based network to meet the growing
communications needs of enterprise and carrier customers around
the world with elegant, converged solutions," said Carl Grivner,
Global Crossing's COO. "Customers are embracing the quality and
reliability of calls over our VoIP platform, enabling us to
reach this important milestone. Sonus' architecture has been an
integral part of this success, and they continue to be a valued
partner. We look forward to hitting new targets very soon."

Global Crossing went into production on its carrier-class VoIP
network in September 2000, with seven VoIP gateway centers in
North America. Today, the Global Crossing VoIP network comprises
26 VoIP gateway centers in 12 countries throughout Europe, Asia,
and Latin America, providing connectivity to enterprise and
carrier customers worldwide. At the heart of the Global Crossing
network is Sonus' Open Services Architecture(TM) (OSA) and
packet voice infrastructure solutions, including the GSX9000(TM)
Open Services Switch, the Insignus(TM) Softswitch and the Sonus
Insight(TM) Management System. The Sonus-based VoIP
infrastructure provides Global Crossing's customers with the
same quality and reliability as a traditional circuit-switched
network, and enables the quick delivery of enhanced IP services
to meet evolving communications requirements across industries.
By Managing its own VoIP platform, Global Crossing ensures
corporate-quality service that is unaffected by public Internet
delays, providing customers the benefits of reliability and lack
of congestion cost-effectively.

"Global Crossing is recognized as a pioneer in the deployment of
VoIP technologies, having been one of the first carriers to
introduce an IP-based voice infrastructure," said Hassan Ahmed,
president and CEO, Sonus Networks. "Since going live two years
ago, Global Crossing has expanded the reach of its network and
has driven increasing minutes of traffic over the network to
attain the significant milestone we are marking today. We are
extremely proud of the work we've done together to build this
world-class VoIP infrastructure, and look forward to helping
Global Crossing continue the success of its network."

The Global Crossing suite of voice products provide 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
worldwide fiber optic network using either VoIP packet-based or
conventional Time Division Multiplexing technology. Both
platforms are fully interoperable.

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 Ltd., and certain of its
subsidiaries (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. Additional Global Crossing subsidiaries
commenced Chapter 11 cases on April 23, August 4 and August 30,
2002, with the Bermuda incorporated subsidiaries filing
coordinated insolvency proceedings in the Bermuda Court. 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 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.

On November 18, 2002, Asia Global Crossing Ltd., and its
subsidiary, Asia Global Crossing Development Company, 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. Asia Global Crossing Ltd. is a
majority-owned subsidiary of Global Crossing. However, Asia
Global Crossing's bankruptcy proceedings are being administered
separately and are not being consolidated with Global Crossing's
proceedings. Asia Global Crossing has announced that no recovery
is expected for Asia Global Crossing's shareholders.

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) are
trading at about 2 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=GBLX08USR1
for real-time bond pricing.


GOLDMAN INDUSTRIAL: Wants to Extend DIP Financing Until Feb. 22
---------------------------------------------------------------
Goldman Industrial Group, Inc., and its debtor-affiliates ask
the U.S. Bankruptcy Court for the District of Delaware to
approve an extension of their post-petition financing agreement
through February 22, 2003.

The Debtors remind the Court that it entered an order allowing
the Company to obtain Postpetition Financing through September
30, 2002, so long as the aggregate outstanding principal amount
of Postpetition Loans does not exceed $8,000,000.

When the Amended DIP Stipulation was agreed to by the Debtors
and the Postpetition Lenders, it was understood that
Postpetition Financing would be necessary until such time as the
Debtors had either consummated a plan of reorganization or sold
substantially all their assets.

Substantially all the assets of six Debtors - FC, BF, JCV, JLM,
HL, and BMI - have been sold.  The liquidation of the remaining
assets of the Debtors, in particular the remaining inventory and
real property of BMI, are the focus of the Debtors' efforts at
this time.

The Parties to the Amended DIP Stipulation recognize that the
Cases cannot be completed before February 22, 2003 and, subject
to order of this Court, have therefore agreed to extend the End
Date for the Post-Petition Financing until February 22, 2003 in
order to insure that maximum value is realized from the Debtors'
estates for the benefit of constituents of the Debtors' estates.

Consequently, the Debtors also want the Court to deem the
extension effective nunc pro tunc to September 30, 2002, and
decrease the Debtors' Professionals' Carve-Out from $750,000 to
$250,000.

The Debtors say that without the extension of the Postpetition
Financing, they will not be able to obtain financing to maintain
their remaining business operations and will be unable to
preserve or realize the value of their assets.

The decrease in the Debtors' Professionals' Carve-Out reflects
the lowered exposure of Debtors' professionals to full
compensation and reimbursement for expenses, in light of the
lower level of professional activity now required to administer
the Cases.

Goldman Industrial Group, Inc., with its affiliates, provide
metalworking machinery to manufacturers; marketing and selling
original equipment primarily to the aerospace, automotive,
computer, defense, medical, farm, construction, energy,
transportation and appliance industries. The Company filed for
chapter 11 protection on February 14, 2002. Victoria W.
Counihan, Esq., at Greenberg Traurig, LLP represents the Debtors
in their restructuring efforts.


HASBRO INC: Board Declares Quarterly Cash Dividend on Shares
------------------------------------------------------------
Hasbro, Inc., (NYSE:HAS) announced that its Board of Directors
has declared a quarterly cash dividend of $.03 per common share.
The dividend will be payable on February 14, 2003, to
shareholders of record at the close of business on January 31,
2003.

Hasbro is a worldwide leader in children's and family leisure
time entertainment products and services, including the design,
manufacture and marketing of games and toys ranging from
traditional to high-tech. Both internationally and in the U.S.,
its PLAYSKOOL, TONKA, MILTON BRADLEY, PARKER BROTHERS, TIGER,
and WIZARDS OF THE COAST brands and products provide the highest
quality and most recognizable play experiences in the world.

                          *   *   *

As previously reported, Fitch Ratings affirmed Hasbro, Inc.'s
'BB' senior unsecured debt rating. In addition, the company's
new $380 million secured bank credit facility was rated 'BB+'.
The new facility, which replaced its previous 'BB+' rated
$650 million facility, continues to be secured by receivables,
inventories and intellectual property.

The ratings reflect the company's strong market presence and its
diverse portfolio of brands balanced against the cyclical and
shifting nature of the toy industry. The ratings also consider
the challenges the company continues to face in refocusing its
strategy on its core brands and its weak financial profile. The
Negative Outlook reflects uncertainty as to the company's
ability to successfully execute its strategy and its ability to
achieve revenue targets for its core brands as well as Star Wars
in 2002.


HASBRO INC: Ted Philip Joins Company's Board of Directors
---------------------------------------------------------
Hasbro, Inc., (NYSE:HAS) said that Ted Philip has been elected
to the Company's Board of Directors.

"Ted Philip is a very successful and highly respected business
leader who brings tremendous experience and business insight to
our Board of Directors," said Alan G. Hassenfeld, Hasbro's
Chairman and CEO. "We are pleased to welcome him to our Board."

In 1995, Mr. Philip joined Lycos, Inc. as one of its founding
members. At various times, Mr. Philip held the positions of
President, Chief Operating Officer and Chief Financial Officer
of Lycos. During his tenure, he was one of the driving forces
behind Lycos' growth from a start-up venture with a little over
$1 million in funding to a global public company with operations
in 42 countries. In 2000, Mr. Philip helped engineer the multi-
billion dollar sale of Lycos to Terra Networks. Mr. Philip
remains a member of the Board of Directors of the combined
entity, Terra Lycos.

Previously, he was Vice President, Finance for the Walt Disney
Company, responsible for the Company's internal and external
financial affairs. In this role, he helped orchestrate the
financing of the multi-billion dollar acquisition of Capital
Cities/ABC, Miramax Pictures and The Mighty Ducks hockey
franchise.

Earlier in his career, Mr. Philip was an Investment Banker in
corporate finance at Morgan Stanley. He was also an Investment
Banker in mergers and acquisitions/real estate finance at
Salomon Brothers. He is a graduate of the Harvard School of
Business and Vanderbilt University.

Hasbro is a worldwide leader in children's and family leisure
time entertainment products and services, including the design,
manufacture and marketing of games and toys ranging from
traditional to high-tech. Both internationally and in the U.S.,
its PLAYSKOOL, TONKA, MILTON BRADLEY, PARKER BROTHERS, TIGER,
and WIZARDS OF THE COAST brands and products provide the highest
quality and most recognizable play experiences in the world.

                          *   *   *

As previously reported, Fitch Ratings affirmed Hasbro, Inc.'s
'BB' senior unsecured debt rating. In addition, the company's
new $380 million secured bank credit facility was rated 'BB+'.
The new facility, which replaced its previous 'BB+' rated
$650 million facility, continues to be secured by receivables,
inventories and intellectual property.

The ratings reflect the company's strong market presence and its
diverse portfolio of brands balanced against the cyclical and
shifting nature of the toy industry. The ratings also consider
the challenges the company continues to face in refocusing its
strategy on its core brands and its weak financial profile. The
Negative Outlook reflects uncertainty as to the company's
ability to successfully execute its strategy and its ability to
achieve revenue targets for its core brands as well as Star Wars
in 2002.


HOCHHEIM PRAIRIE CASUALTY: Fin'l Strength Rating Down to Bpi
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its 'BBBpi' financial
strength rating on Hochheim Prairie Casualty Insurance Co., to
'Bpi' based on the company's marginal capitalization, poor
operating performance, and high geographic concentration.

"The company's capitalization at year-end 2001 is marginal,"
said Standard & Poor's credit analyst Tom Taillon. "Operating
performance continues to be weak and the company's geographic
and product line concentration is high, exposing it to economic,
legal, and regulatory risk."

Based in Yoakum, Texas, Hochheim writes private passenger auto
liability, auto physical damage, and other liability-occurrence
policies in support of its parent company, Hochheim Prairie Farm
Mutual Insurance Assn. Texas constitutes 100% of its total
revenue and its products are distributed through independent
general agents to customers primarily in rural towns with
populations of less than 10,000. The company, which began
business in 1979, is a member of Hochheim Prairie Group, a
small-size insurance group with 2001 surplus of $23.6 million.

Though the company is a member of the Hochheim Prairie Group,
the rating does not include credit for implied group support.

Ratings with a 'pi' subscript are insurer financial strength
ratings based on an analysis of an insurer's published financial
information and additional information in the public domain.
They do not reflect in-depth meetings with an insurer's
management and are therefore based on less comprehensive
information than ratings without a 'pi' subscript. Ratings
with a 'pi' subscript are reviewed annually based on a new
year's financial statements, but may be reviewed on an interim
basis if a major event that may affect the insurer's financial
security occurs. Ratings with a 'pi' subscript are not subject
to potential CreditWatch listings.

Ratings with a 'pi' subscript generally are not modified with
"plus" or "minus" designations. However, such designations may
be assigned when the insurer's financial strength rating is
constrained by sovereign risk or the credit quality of a parent
company or affiliated group.


HOCHHEIM PRAIRIE CASUALTY: Fin'l Strength Rating Lowered to Bpi
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its 'BBBpi' financial
strength rating on Hochheim Prairie Casualty Insurance Co. to
'Bpi' based on the company's marginal capitalization, poor
operating performance, and high geographic concentration.

"The company's capitalization at year-end 2001 is marginal,"
said Standard & Poor's credit analyst Tom Taillon. "Operating
performance continues to be weak and the company's geographic
and product line concentration is high, exposing it to economic,
legal, and regulatory risk."

Based in Yoakum, Texas, Hochheim writes private passenger auto
liability, auto physical damage, and other liability-occurrence
policies in support of its parent company, Hochheim Prairie Farm
Mutual Insurance Assn. Texas constitutes 100% of its total
revenue and its products are distributed through independent
general agents to customers primarily in rural towns with
populations of less than 10,000. The company, which began
business in 1979, is a member of Hochheim Prairie Group, a
small-size insurance group with 2001 surplus of $23.6 million.

Though the company is a member of the Hochheim Prairie Group,
the rating does not include credit for implied group support.

Ratings with a 'pi' subscript are insurer financial strength
ratings based on an analysis of an insurer's published financial
information and additional information in the public domain.
They do not reflect in-depth meetings with an insurer's
management and are therefore based on less comprehensive
information than ratings without a 'pi' subscript. Ratings
with a 'pi' subscript are reviewed annually based on a new
year's financial statements, but may be reviewed on an interim
basis if a major event that may affect the insurer's financial
security occurs. Ratings with a 'pi' subscript are not subject
to potential CreditWatch listings.

Ratings with a 'pi' subscript generally are not modified with
"plus" or "minus" designations. However, such designations may
be assigned when the insurer's financial strength rating is
constrained by sovereign risk or the credit quality of a parent
company or affiliated group.


HOCHHEIM PRAIRIE FARM: S&P Downgrades FS Rating to Bpi
------------------------------------------------------
Standard & Poor's Ratings Services lowered its 'BBBpi' financial
strength rating on Hochheim Prairie Farm Mutual Insurance Assn.,
to 'Bpi' based on the company's weak capitalization, declining
level of surplus, geographic concentration, and poor earnings.

"The company's capitalization as of year-end 2001 is weak," said
Standard & Poor's credit analyst Tom Taillon. "In 2001, the
company's policyholders' surplus declined 32% to $23.6 million
and it had a net loss of $9.3 million. This poor performance has
continued through the first half of 2002. In addition, the
company's geographic and product line concentration is high,
exposing it to economic, legal, and regulatory risk."

Yoakum, Texas-based Hochheim Prairie, began operations in 1892.
It writes fire policies and is a leading provider of property
insurance for towns in Texas with populations of less than
10,000. Texas constitutes 100% of its total revenue and its
products are distributed through independent general agents. The
company is licensed exclusively in Texas and is a member of
Hochheim Prairie Group, a small insurance group with 2001
surplus of $23.6 million.

Though the company is a member of the Hochheim Prairie Group,
the rating does not include credit for implied group support.

Ratings with a 'pi' subscript are insurer financial strength
ratings based on an analysis of an insurer's published financial
information and additional information in the public domain.
They do not reflect in-depth meetings with an insurer's
management and are therefore based on less comprehensive
information than ratings without a 'pi' subscript. Ratings
with a 'pi' subscript are reviewed annually based on a new
year's financial statements, but may be reviewed on an interim
basis if a major event that may affect the insurer's financial
security occurs. Ratings with a 'pi' subscript are not subject
to potential CreditWatch listings. Ratings with a 'pi' subscript
generally are not modified with "plus" or "minus" designations.
However, such designations may be assigned when the insurer's
financial strength rating is constrained by sovereign risk or
the credit quality of a parent company or affiliated group.


IESI CORP: Commences Exchange Offer for 10-1/4% Sr. Sub. Notes
--------------------------------------------------------------
IESI Corporation has commenced an exchange offer to exchange up
to $150,000,000 aggregate principal amount of its registered
10-1/4% Senior Subordinated Notes due 2012 (exchange notes) for
$150,000,000 aggregate principal amount of its outstanding,
unregistered 10-1/4% Senior Subordinated Notes due 2012
(outstanding notes). The Company's registration statement
relating to the exchange offer became effective on December 9,
2002.

The exchange offer is contemplated in the Registration Rights
Agreement, dated June 7, 2002, under which the Company agreed to
register the exchange notes, including unconditional guarantees
from the Company's subsidiaries, and offer to exchange the
exchange notes for the outstanding notes, which were sold by the
Company in a private placement in June 2002.

The exchange notes are substantially identical to the
outstanding notes, except that the exchange notes have been
registered under the U.S. Securities Act of 1933, as amended,
and will not be subject to restrictions on transfer. The
exchange notes will bear a different CUSIP number from the
outstanding notes. Any outstanding notes not exchanged will
continue to have restrictions on transfer.

The Company will accept for exchange any and all outstanding
notes that are validly tendered and not withdrawn on or before
5:00 p.m., New York City time, on January 9, 2003, unless the
exchange offer is extended by the Company.

Copies of the prospectus and transmittal materials governing the
exchange offer may be obtained from the Exchange Agent, The Bank
of New York, by calling William Buckley at (212) 815-5788.

The Company is one of the leading regional, non-hazardous solid
waste management companies in the United States. The Company
provides collection, transfer, disposal and recycling services
to 244 communities, including more than 400,000 residential
customers and approximately 50,000 commercial and industrial
customers, in nine states.

As previously reported, the Company's September 30, 2002 balance
sheet shows a total shareholders' equity deficit of about $31
million.


IL ANNUITY: S&P Slashes Financial Strength Ratings to BB+
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty
credit and financial strength ratings on IL Annuity Insurance
Co., to 'BB+' from 'A' following the review of support from its
ultimate parent, AmerUs Group Co.

Standard & Poor's also said it removed the ratings from
CreditWatch, where they were placed on Feb. 20, 2002. The
outlook is stable.

"The company ceased writing new business in 2002," said Standard
& Poor's credit analyst Kevin Maher, "and the downgrade reflects
the inherent uncertainty relating to this closed block of
business."

Despite the runoff nature of the business, IL Annuity has
indicated that under certain severe liquidation scenarios, the
company will have sufficient assets and capitalization to
support a surrender of all fixed-annuity policy reserves.

Based on the financial statements as of Sept. 30, 2002, IL
Annuity has total capital and surplus of $42 million and
liabilities excluding reserves ceded to reinsurers and separate
accounts of $637 million. AmerUs has contributed more than $20
million in capital to IL Annuity in the past two years since it
was acquired as part of Indianapolis Life Insurance Group in
2001. AmerUs Group Co., ceased writing new business in IL
Annuity because its product design with convertible bond asset
features did not fit AmerUs' long-term plans.

Standard & Poor's expects IL Annuity to continue collecting
surrender charge fees on the annuities that surrender at a pace
of about 20%-25% per year.


INTEGRATED HEALTH: Exclusive Period Hearing Continues Next Weds.
---------------------------------------------------------------
The hearing on Integrated Health Services, Inc.'s 8th Motion to
Extend its Exclusive Periods is continued to December 18, 2002
at 11:30 a.m.  By application of Del.Bankr.LR 9006-2, the
deadline for the Debtors to propose a plan is automatically
extended through the conclusion of that hearing.

Integrated struck a deal this month to sell substantially all of
its assets to Trans Healthcare Inc. for approximately
$200,000,000 in a transaction that will serve as a cornerstone
for a plan of reorganization.  The Exclusivity Hearing was
adjourned multiple times to allow this transaction to be
negotiated behind the scenes.  (Integrated Health Bankruptcy
News, Issue No. 47; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


INTERLEUKIN GENETICS: Request for Continued Nasdaq Listing Nixed
----------------------------------------------------------------
Interleukin Genetics, Inc. (Nasdaq: ILGN), a personalized
healthcare company, has received notification from the Nasdaq
Listing Qualifications Panel that the Panel has denied
Interleukin's request for continued listing on the Nasdaq Stock
Market and that its common stock will be delisted at the opening
of business on December 10, 2002. Interleukin's common stock was
eligible to trade on the Over-the-Counter Bulletin Board
(OTCBB), and began trading on the OTCBB Tuesday under the symbol
ILGN.

Interleukin had previously reported that it had received
notification of its non-compliance with Nasdaq's $1.00 minimum
bid price requirement (Marketplace Rule 4310(c)(4)) and
$2,500,000 minimum stockholders' equity requirement (Rule
4310(c)(2)). These matters were addressed at a hearing before
the Nasdaq Listing Qualifications Panel on November 14, 2002,
and on December 9, 2002, the Panel issued its decision to delist
Interleukin's common stock. Interleukin is considering
requesting a review of this decision by the Nasdaq Listing and
Hearing Review Council.

The OTCBB is a regulated quotation service that displays real-
time quotes, last sale prices and volume information in over-
the-counter equity securities. OTCBB securities are traded by a
community of registered market makers that enter quotes and
trade reports through a computer network. Information regarding
the OTCBB, including stock quotes, can be found at
http://www.otcbb.com Investors should contact their broker for
further information about executing trades in Interleukin's
common stock on the OTCBB.

"This decision by Nasdaq and the move to the OTCBB does not
change our strategic plan and will not affect our operations,"
stated Philip R. Reilly, MD, Ph.D., Chairman and Chief Executive
Officer of Interleukin. "We continue to execute aggressively
against our plan to close a strategic alliance over the next
couple of months and to be one of the first companies to
commercialize personalized healthcare."

Interleukin Genetics is a biotechnology company focused on
inflammation. The company uses functional genomics to develop
diagnostic, therapeutic and nutraceutical products based on the
genetic variations in people to help prevent or treat diseases
of inflammation. Interleukin's TARxGET (Translating Advanced
Research in Genomics into more Effective Therapeutics) programs
focus on the areas of cardiovascular disease, rheumatoid
arthritis and osteoporosis and include the development of
nutrigenomic products as preventive healthcare. We develop tests
to assess a person's risk for heart disease and osteoporosis as
well as a test to help doctors and patients choose the best
course of therapy for rheumatoid arthritis. These products will
result in prolonged wellness, improve patient care, and may lead
to better allocation of healthcare resources. In addition to its
research partnerships with numerous academic centers in the U.S.
and Europe, Interleukin's corporate collaborators include the
leading healthcare organizations, Kaiser Permanente and
UnitedHealth Group. For more information about Interleukin and
its ongoing programs, please visit http://www.ilgenetics.com

As previously reported, Interleukin's September 30, 2002 balance
sheet shows a total shareholders' equity deficit of about
$308,000.


ISLE OF CAPRI: Arbitrators Rule Company Liable for $4.5M Damages
----------------------------------------------------------------
Isle of Capri Casinos, Inc., (Nasdaq: ISLE) learned after the
close of business on Friday, December 6, 2002, that a panel of
arbitrators in St. Louis, Missouri issued an award that the
company was liable for $4.5 million in damages in conjunction
with a lease of real estate located in Jefferson County,
Missouri.  The company has filed a motion in the United States
District Court for the Eastern District of Missouri seeking to
vacate the arbitration award.  Notwithstanding the motion to
vacate, the company is required by FASB Statement No. 5,
"Accounting for Contingencies," to record the entire loss
contingency during the quarter ended October 27, 2002.  The
company has therefore accrued an additional $1.8 million as a
result of this award as of October 27, 2002 (the last day of the
company's second fiscal quarter), in addition to the $2.7
million previously accrued.  Accordingly, the company has
revised net income for the quarter ended October 27, 2002, for
the additional $1.8 million pre-tax accrual.  For the three
months ended October 27, 2002, net income, net income per common
share-basic and net income per common share-diluted changed from
$7.9 million, $0.27 and $0.26, respectively, to $6.8 million,
$0.24 and $0.22, respectively.  For the six months ended October
27, 2002, net income, net income per common share-basic and net
income per common share-diluted changed from $20.1 million,
$0.70 and $0.66, respectively, to $19.0 million, $0.66 and
$0.62, respectively.  These changes are reflected in the
company's Form 10-Q for the quarter ended October 27, 2002, that
was filed today.

Isle of Capri Casinos, Inc., owns and operates 13 riverboat,
dockside and land-based casinos at 12 locations, including
Biloxi, Vicksburg, Lula and Natchez, Mississippi; Bossier City
and Lake Charles (two riverboats), Louisiana; Black Hawk,
Colorado; Bettendorf, Davenport and Marquette, Iowa; and Kansas
City and Boonville, Missouri. The company also operates Pompano
Park Harness Racing Track in Pompano Beach, Florida.  More
information on Isle of Capri Casinos' locations can be found at
http://www.theislecorp.com

                           *   *   *

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


KMART CORP: Seeks Approval of HTC Global Purchase Agreement
-----------------------------------------------------------
Kmart Corporation and its debtor-affiliates inform Judge
Sonderby that HTC Global Services has the financial resources
required to consummate the sale of the Sheffield Property.  John
Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom,
reports that the Debtors have received a letter dated October
31, 2002 from Comerica Bank regarding its extension of HTC
Global's Unsecured Working Capital Facility.  Mr. Butler also
notes that HTC Global has not borrowed any amount under this
line of credit.

"The Debtors have no indication that [HTC Global] would be
unable or unwilling to consummate the transactions contemplated
by the [parties'] purchase agreement," Mr. Butler maintains.

Thus, the Debtors ask the Court to approve their purchase
agreement with HTC Global.

The salient terms of the Purchase Agreement are:

Property:   All of Kmart's right, title and interest in and to:

            * the real property;

            * the 115,000 gross square feet office building
              located at 3270 Big Beaver Road in Troy, Michigan;

            * certain unexpired non-residential real property
              leases;

            * certain executory contracts relating to the
              maintenance and operation and the use and
              occupancy of the property;

            * certain office property, including:

                Qty    Property
               -----   --------
                400    6' x 6' cubicles & storage units
                 93    6' x 9' cubicles & storage units
                 35    6' x 12' cubicles & storage units
                130    chairs located on the 2nd floor
                160    lateral files located on the 2nd floor

               Excluded in the sale are:

                Qty    Property
               -----   --------
                  8    54" round oak tables
                  6    48" round oak tables
                  8    30" x 60" classroom tables
                All    30" x 60" reference tables
                All    24" x 42" work tables
                All    30" x 30" work tables
                All    conference tables 8', 10' and 12'-6"
                All    office visitor chairs
                All    lobby visitor chairs
                All    file cabinets -- letter, legal and
                       lateral
                 15    managers desk and credenzas
                 12    oak sets
                 20    single PED desk LH
                 20    single PED desk RH
                 30    Double PED desk

            Additionally, HTC Global will not assume any
            liabilities.

Price:      $7,300,000 in cash

            -- $730,000 was due on November 18, 2002 as an
               earnest money deposit; and

            -- the remainder, plus or minus pro-rations, is
               payable at closing.

Closing:    The Closing will take place no more than five days
            after a Court order is entered.

Condition
of Property:

            Kmart will deliver good and marketable fee simple
            title to the Land and Improvements, free and clear
            of liens, other than Permitted Exceptions.  The
            Property is sold "AS-1S, WHERE-1S", with no
            representations or warranties.

Lease
Assignment: Kmart will assign to HTC Global certain leases,
            operating agreements and property agreements.

Termination
Fee:        If Debtors consummate the sale with another party,
            HTC Global will be entitled to a $146,000 fee plus
            $50,000 maximum reimbursement of its actual
            expenses. (Kmart Bankruptcy News, Issue No. 39;
            Bankruptcy Creditors' Service, Inc., 609/392-0900)

DebtTraders reports that Kmart Corp.'s 9% bonds due 2003
(KM03USR6) are trading at about 17 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=KM03USR6for
real-time bond pricing.


LAIDLAW INC: Douglas A. Carty Appointed as SVP and CFO
------------------------------------------------------
The Laidlaw Board of Directors have confirmed the appointment of
Douglas A Carty as Senior Vice President and Chief Financial
Officer of the Company.  Mr. Carty will assume his new duties
early in January 2003.

Mr. Carty is currently Chief Financial Officer of Atlas Air
Worldwide Holdings in Purchase, New York, one of North America's
largest aviation transportation companies. In 1990 Mr. Carty
joined Canadian Airlines in a senior financial position and
served as chief financial officer from 1996 until the sale of
the company to Air Canada in 2000.

"I am delighted that we have been able to attract Doug," said
Kevin Benson, President and CEO of Laidlaw. "His strong
financial background and extensive experience in the capital
markets are exactly the skills that Laidlaw needs as we emerge
from bankruptcy protection. I have worked closely with him in
the past and know that he will be a key member of the new senior
management team, as we demonstrate the real values that exist in
the Corporation."

Laidlaw Inc., is a holding company for North America's largest
providers of school and inter-city bus transportation, public
transit, patient transportation and emergency department
management services.

Laidlaw Inc.'s 7.65% bonds due 2006 (LDM06USR1) are trading at
about 47 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=LDM06USR1for
real-time bond pricing.


LAIDLAW INC: Court Approves Fee Applications of 3 Professionals
---------------------------------------------------------------
Three of Laidlaw Inc.'s professionals applied for the interim
allowance of compensation and reimbursement of their expenses
for the services they have performed:

(1) PricewaterhouseCoopers:

    -- for completion of the FY 2001 Audit and the Q1 and Q2
       Quarterly Reviews.

(2) Miller Buckfire Lewis & Co.:

    -- for the period June 1, 2002 through and including
       September 30, 2002 as financial advisor and investment
       banker.

(3) Jones, Day, Reavis & Pogue:

    -- for the period March 1, 2002 though June 30, 2002.

Accordingly, Judge Kaplan finds that the requests are reasonable
and appropriate under Sections 330(a)(1)(A) and 331 of the
Bankruptcy Code and approves the fee applications.  Judge Kaplan
directs the Debtors to pay:

   (a) PricewaterhouseCoopers:

       -- $110,000 and GST of $7,700 for conducting the FY 2001
          audit of Debtors and its non-debtor affiliates;

       -- $150,000 and GST $7,000 for completing the Q1 and Q2
          2002 reviews of the Debtors; and

       -- $369,660 in fees, expenses of $87,934 and GST of
          $2,892 that have not previously been paid pursuant to
          the PwC Canada Monthly Statements for the First
          Compensation Period.

   (b) Miller Buckfire Lewis & Co.:

       -- $200,000 for fees and $7,238 of expenses for a total
          payment of $207,238.

   (c) Jones, Day, Reavis & Pogue:

       -- an interim allowance of compensation of $3,323,853 and
          reimbursement of related expenses of $2,370,009; and

       -- the fees and expenses that have not been previously
          paid pursuant to Jones Day's Monthly Statements for
          the Third Compensation Period. (Laidlaw Bankruptcy
          News, Issue No. 27; Bankruptcy Creditors' Service,
          Inc., 609/392-0900)


LERNOUT: L&H N.A. Sues L&H Investment to Recover Pref. Transfer
---------------------------------------------------------------
Lernout & Hauspie Speech Products N.A. brings a suit against L&H
Investment Corporation to recover money paid for the acquisition
of a subsidiary as either a preferential or fraudulent transfer.

According to Luc A. Despins, Esq., and Matthew S. Barr, Esq., at
Milbank Tweed Hadley & McCloy LLP, in New York, and William H.
Sudell, Jr., Esq., Donna L. Culver, Esq., and Donna L. Harris,
Esq., at Morris Nichols Arsht & Tunnell, in Wilmington,
Delaware, L&H Investment originally purchased the subsidiary and
sold it to L&H NA for an inflated price.

                       Fraudulent Transfer

Before January 2000, L&H Investment Corporation acquired Applied
Voice Recognition, Inc.  As a result of its close insider status
with L&H NA, L&H Investment "influenced L&H to invest
$3,000,000" into AVRI.  In the summer of 2000, L&H NA acquired
AVRI from L&H Investment for $7,500,000 for the purpose of
obtaining AVRI's medical transcription assets.  The
consideration included $5,500,000 in cash and approximately
$2,000,000 related to L&H's stock ownership.

As of the Acquisition Date, AVRI was worth substantially less
than the total consideration paid by L&H.  As a result, L&H's
estate and creditors suffered a substantial loss.

                            Preference

Mr. Sudell tells the Court that within one year prior to the
Petition Date, L&H NA made a $333,332.46 transfer directly to or
for the benefit of L&H Investment, an insider of L&H NA.  L&H
Investment was a creditor of L&H NA at this time, and was
benefited by this transfer far beyond what L&H Investment would
have received on the debt if this were a case under Chapter 7
and L&H Investment received a distribution on the debt as a
claim.

As a consequence of these allegations, Mr. Sudell asserts that
Judge Wizmur should set aside these transfers and award L&H NA a
judgment against L&H Investment in an amount equaling both
transfers, together with interest.  If L&H Investment does not
return the money, Mr. Sudell contends that any claim L&H
Investment may have against the bankruptcy estate of L&H NA be
disallowed. (L&H/Dictaphone Bankruptcy News, Issue No. 33;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


LUBY'S INC: Will Publish Fiscal First Quarter Results on Tuesday
----------------------------------------------------------------
Luby's, Inc., (NYSE: LUB) confirmed it will release results for
the first quarter ended November 20, 2002, on Tuesday,
December 17, 2002.

Interested investors are invited to listen to Luby's
teleconference with financial analysts on Wednesday,
December 18, 2002, at 10:00 a.m., Central time.  To access the
call, domestic callers may dial 888-456-0280; the required pass
code is Luby's.  Please call ten minutes prior to the beginning
of the call to ensure that you are connected before the start of
the presentation.  A replay of the call will be available
following the call through 12:00 a.m., Central time, December
28, 2002.  The replay number for domestic callers is 402-998-
0855; a pass code is not required.

Luby's, Inc., headquartered in San Antonio, Texas, operates 194
Luby's restaurants in ten states, and its stock is traded on the
New York Stock Exchange (symbol LUB).

As reported in Troubled Company Reporter's November 29, 2002
edition, Luby's, Inc., entered into an agreement with its bank
lenders amending the company's credit facility.  Further, the
company stated that it had accepted a commitment letter from
another lender, which would provide $80 million to refinance a
major portion of its existing debt.  This 15-year financing more
closely matches the economic life and long-term basis of the
assets securing the debt.

The principal provisions of the amendment to the credit facility
waive the previously announced violation of a quarterly EBITDA
covenant, change the financial covenants from quarterly and
annual EBITDA measurements to measurements of liquidity and
future debt service, increase the applicable interest rate, and
extend the maturity date of the debt to October 31, 2004. The
amendment also requires the company to use the entire $80
million long-term financing described in the commitment letter
to reduce the existing debt on January 31, 2003.


MDS INC: Firming-Up $311-Million Private Debt Placement
-------------------------------------------------------
MDS Inc., (NYSE:MDZ; TSX:MDS) is in the process of finalizing a
private debt placement. The debt placement totals approximately
US$311 million and has terms ranging from 5 to 12 years, in five
different series. The placement, which is expected to close next
week, will be used to repay existing bank debt.

MDS Inc., (TSX: MDS; NYSE: MDZ) is an international health and
life sciences company. In many of its products and services, it
is among the largest and most respected companies in the world.
MDS's focus is on advancing health through science. It does this
by providing: laboratory testing, imaging agents for nuclear
medicine testing, sterilization systems for medical and consumer
products, research services to speed discovery and development
of new drugs, therapy systems for planning and delivery of
cancer treatment, analytical instruments to assist in the
development of new drugs, and medical/surgical supplies. MDS
employs more than 10,000 highly skilled people at its global
operations on five continents. Detailed information about the
company is available at the MDS Web site at
http://www.mdsintl.com


MEDISOLUTION: Closes Up to $5-Mill. Credit Facility with Trilon
---------------------------------------------------------------
MediSolution Ltd., (TSX:MSH) completed a transaction with Trilon
Bancorp Inc., in respect of a new revolving credit facility that
provides for borrowings of up to a maximum amount of $5 million
at an interest rate of one percent above prime. MediSolution
intends to use this facility for general corporate purposes.

MediSolution Ltd., is a leading Canadian healthcare information
company with offices in Canada and the United States. The
company offers a comprehensive suite of information systems and
professional services to the healthcare industry.

As of September 30, 2002, Medisolution reported a total
shareholders' equity deficit of about C$4.6 million while total
working capital deficit tops C$11.1 million.


MICROCELL: Renegotiates Terms of Major Contract with Vendor
-----------------------------------------------------------
As part of its ongoing restructuring process announced in August
2002, Microcell Telecommunications Inc., (TSX: MTI.B) will lay
off 149 employees across Canada. This represents approximately
6% of the Company's total current workforce. This measure is the
result of increased productivity from the consolidation of
certain administrative and operating support services, and the
suspension of certain projects due to difficult financial market
conditions. Microcell also announced that it has renegotiated
the terms of a major contract with a vendor in order, among
other things, to avoid being in default under this contract.

"Our objective is to ensure that we have a realistic and viable
business plan for the coming years," said Andre Tremblay,
President and Chief Executive Officer of Microcell
Telecommunications Inc. "Although it is always a difficult
decision to lay off employees, we believe that the reduction of
our operating costs is a necessary step to enable us to remain
an effective competitor on the market and to ensure our future
growth."

Mr. Tremblay also stated that the measures announced today do
not target Microcell's front line sales and customer service
teams. "We maintain our full ability to continue acquiring
subscribers and to provide our customers with high quality
network and service," he said. Most of the layoffs announced
today are effective immediately, with a small number to take
place by the second quarter of 2003. In keeping with Company
policy, laid-off employees will receive severance packages in
line with best industry practices.

Furthermore, as announced in its third quarter 2002 financial
results release, the Company entered into a forbearance and
amending agreement with its secured bank lenders in which they
agreed to forbear until December 23, 2002, subject to certain
conditions, the exercise of any rights with respect to certain
possible defaults. One of the possible defaults to which the
forbearance agreement applies relates to non-payment to a vendor
under a material contract. Microcell announced it has
renegotiated the terms of this contract in order, among other
things, to avoid being in default under such contract.

Microcell Telecommunications Inc., is a major provider of
telecommunications services in Canada dedicated solely to
wireless. The Company offers a wide range of voice and high-
speed data communications products and services to more than 1.2
million customers. Microcell operates a GSM network across
Canada and markets Personal Communications Services and General
Packet Radio Service under the Fido(R) brand name. Microcell
Telecommunications has been a public company since October 15,
1997, and is listed on the Toronto Stock Exchange under the
stock symbol MTI.B.

Fido is a registered trademark of Microcell Solutions Inc.

For more information on the Microcell, visit its Web site at
http://www.microcell.ca

                         *    *    *

As reported in Troubled Company Reporter's December 6, 2002
edition, Standard & Poor's lowered its long-term corporate
credit rating on wireless communications service provider
Microcell Telecommunications Inc., to 'D' from 'CC'. In
addition, the rating on the US$418 million notes due 2006 was
lowered to 'D' from 'C'. The unsecured debt rating on the
company's 2007 and 2009 issues are unchanged at 'C', and remain
on CreditWatch with negative implications. These ratings actions
are in response to the company's announcement on Dec. 2, 2002,
that it did not make a scheduled interest payment on its 2006
bonds.

The ratings action was based on a US$29.3 million default on
Montreal, Quebec-based Microcell's US$418.0 million senior
unsecured bonds that mature in 2006.


MILLICOM: Taps Lazard Freres to Review Strategic Alternatives
-------------------------------------------------------------
Millicom International Cellular S.A., (Nasdaq:MICC) the global
telecommunications investor, has entered into separate
discussions with third parties for the disposal of its cellular
operations in The Philippines (Extelcom) and Colombia
(Celcaribe). There can be no assurance that either transaction
will occur.

Extelcom, Millicom's business in The Philippines, has continued
to experience a number of difficult operational and trading
issues, which have adversely impacted its financial performance.
The board of Millicom has therefore concluded that the most
appropriate course of action is to pursue a sale of Extelcom.
Discussions with a potential buyer are ongoing and it is
currently anticipated that the sale of Extelcom will be made for
little consideration. It is expected that the sale of Extelcom
will result in Millicom incurring a book write-off of
approximately U.S. $50 million.

Separately, Millicom is in discussions with a third party
regarding the potential sale of Celcaribe, Millicom's business
in Colombia. In the context of this transaction, the third party
potential purchaser is currently conducting due diligence of
Celcaribe's operations. It is currently anticipated that the
sale of Celcaribe will result in Millicom incurring a book
write-off of approximately U.S.$125 million.

Millicom also announces that it has retained Lazard to assist it
in reviewing strategic alternatives to address Millicom's
ongoing liquidity needs, including other potential asset sales
and divestitures, the availability of new debt and equity
financing and potential debt restructuring alternatives.

Millicom has, directly or through its affiliates, repurchased
from time to time over the past year a portion of its
outstanding debt securities at a discount from par and may
continue to do so in the future depending upon market conditions
and its other liquidity needs.

Millicom is a global telecommunications investor with cellular
operations in Asia, Latin America and Africa. It currently has a
total of 18 cellular operations and licenses in 17 countries.
The Group's cellular operations have a combined population under
license (excluding Tele2) of approximately 444 million people.
Millicom also has a 7.0% interest in Tele2 AB, the leading
alternative pan-European telecommunications company offering
fixed and mobile telephony, data network and Internet services
to over 16 million customers in 21 countries. Millicom's shares
are traded on the Nasdaq Stock Market under the symbol MICC.

Visit the Company's Web site at http://www.millicom.comfor more
information.


MOODY'S CORP: Board Declares Quarterly Common Stock Dividend
------------------------------------------------------------
The Board of Directors of Moody's Corporation (NYSE: MCO)
declared a quarterly dividend of 4.5 cents per share of Moody's
common stock.

The dividend will be paid on March 10, 2003 to shareholders of
record at the close of business on February 20, 2003.

Moody's Corporation (NYSE: MCO), has total shareholders' equity
deficit of about $304 million, is the parent company of Moody's
Investors Service, a leading provider of credit ratings,
research and analysis covering debt instruments and securities
in the global capital markets, and Moody's KMV, a credit risk
management technology firm serving the world's largest financial
institutions. The corporation reported revenue of $797 million
in 2001. Further information is available at
http://www.moodys.com


NATIONAL CENTURY: Wants to Continue Using American Express Tax
--------------------------------------------------------------
According to Matthew A. Kairis, Esq., at Jones, Day, Reavis &
Pogue, in Columbus, Ohio, American Express Tax & Business
Services, Inc., provides receivables servicing and related
services to National Century Financial Enterprises, Inc., and
its debtor-affiliates.  Mr. Kairis relates that most of the
Debtors' previous management team resigned from their positions
prior to the Petition Date.  The Debtors have retained
individuals from Alvarez & Marsal to stabilize and manage their
operations.  In consultation with their creditor constituencies,
the Debtors have concluded that it is desirable to retain an
expert in receivables servicing to assist in collecting their
outstanding account receivables.

After consultations with several of their major creditor
constituencies, the Debtors propose American Express to do the
services required.  Mr. Kairis tells the Court that the Debtors
and American Express have negotiated the terms of a letter
agreement pursuant to which American Express will provide
receivables servicing to the Debtors.  Under the Agreement,
American Express will provide Michael Lane, an expert in health
care receivables financing, to serve as President and Chief
Operating Officer of Debtor National Premier Financial Services,
Inc., subject to the direction and control of NPFS's Board of
Directors and the President of National Century Financial
Enterprises, Inc.  NPFS conducts the Debtors' receivables
servicing operations.  Mr. Lane will utilize the services of
other American Express personnel, as he deems appropriate in the
performance of his duties, including American Express' and his
good faith efforts to carry out these services:

  (a) direct the employees of, and other consultants to, NPFS
      and coordinate with NCFE's officers and employees related
      to the servicing functions performed by NCFE and NPFS;

  (b) negotiate appropriate fees to be paid to NPFS for the
      services performed under any new or any existing or
      amended sales and subservicing agreements where NPFS
      becomes or is a party;

  (c) in coordination with NCFE and the Chief Executive Officer,
      provide written and oral reports:

      -- to the entities where NPFS performs servicing
         functions; and

      -- as NPFS of NCFE may otherwise be contractually
         obligated;

  (d) hire additional employees as necessary to fulfill Mr.
      Lane's duties under the Agreement;

  (e) approve for budgeting, incurring and payment of
      expenditures of NPFS;

  (f) serve as the Chairman of the Credit Committee of NPFS,
      which will be an operating committee of NPFS with
      authority to:

      -- approve financing and accounts receivable purchase
         decisions for NPF VI, NPF XII and NPFS relating to
         healthcare providers that have entered into sales and
         subservicing agreements with NPF VI and NPF XII; and

      -- the negotiation and settlement of claims held by NPF VI
         and NPF XII against the sellers of healthcare
         receivables and all other parties owing money to NPF VI
         and NPF XII; and

  (g) review the financial and operating status of healthcare
      providers that are parties to sales and subservicing
      agreements with NPF VI and NPF XII.

Mr. Kairis asserts the Court that American Express is well
suited to provide the Debtors with receivables servicing and
related services because it has extensive experience and has
provided operational assistance to companies in distressed
situations and recovering maximized values from assets.
Moreover, Mr. Kairis contends that Mr. Lane is also an expert in
his field.  Mr. Lane serves as the Director of the Healthcare
Recovery Practice of American Express and has over 23 years of
healthcare experience in public accounting, banking as Chief
Financial Officer.  Mr. Lane's entire career has been focused on
the healthcare industry.

As provided in the Agreement, American Express will be
compensated in two distinct ways:

  -- at its standard hourly rates, as may be adjusted from
     time to time under American Express' standard practices;
     and

  -- through an incentive compensation plan to be negotiated
     between the parties within 30 days of entry into the
     Agreement.

Mr. Lane's rate is $425 per hour while the billing rate of Scott
Peltz, who is also taking a lead role in American Express'
engagement, is $450 per hour.  Accordingly, the hourly rates for
other American Express personnel who may provide services range:

      Senior Managers      $275 to 300
      Managers              250 to 270
      Other consultants     150 to 225

Aside from the hourly rates, American Express will also seek
reimbursement for reasonable out-of-pocket expenses and will be
entitled to a $300,000 retainer, which will be maintained and
applied to their final invoice.  The fees and expenses will be
billed and payable on a weekly basis.

Furthermore, the Agreement provides that NCFE, NPF VI and NPF
XII, will indemnify Mr. Lane, American Express, its managing
directors, directors, employees and agents from and against all
claims, liability, loss, cost, damage or expenses asserted
against or incurred by American Express except to the extent
that it results from the willful misconduct, dishonest,
fraudulent act or omission, or gross negligence of American
Express or any other person or agent.

Scott Peltz, Managing Director of American Express Tax &
Business Services, informs Judge Calhoun that American Express
has initially identified 16 potential conflicts of interest with
its affiliates.  American Express promises that it will report
to the Court any additional conflicts, as information becomes
available. Due to this disclosed conflicts, American Express or
NPFS may terminate this engagement upon advise of the conflict.
Otherwise, Mr. Peltz contends, NPFS is deemed to have consented
to, and waived any claim arising out of, the conflict.

Accordingly, the Debtors seek the Court's authority to continue
using American Express to provide receivables servicing under
the terms of the Agreement. (National Century Bankruptcy News,
Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-0900)


NAVISITE INC: Will Publish First Quarter 2003 Results on Monday
---------------------------------------------------------------
NaviSite, Inc. (NASDAQ: NAVI), a provider of "Always On Managed
Hosting(SM)", will release First Fiscal Quarter 2003 results for
the quarter ended October 31, 2002. In conjunction with this
release on Monday, December 16th, 2002, NaviSite will host a
conference call to be simultaneously broadcast live over the
Internet. The call will be broadcast in listen-only mode. Tricia
Gilligan, President and Chief Executive Officer, will host the
call.

                  Monday, December 16th, 2002
                5:30 P.M. Eastern Standard Time
           http://www.navisite.com/investors/call.cfm
                     and at 1-800-966-6338
             Reference NaviSite and ID number 56025

Please allow extra time before the call to visit the site and
download the streaming media software required to listen to the
Internet broadcast. The online archive of the broadcast will be
available for replay after the live call.

NaviSite, Inc., a leader in "Always On Managed Hosting(SM)" for
companies conducting mission-critical business on the Internet,
including enterprises and other businesses deploying Internet
applications. The Company's goal is to help customers focus on
their core competencies by outsourcing the management and
hosting of their Web operations and applications, allowing
customers to fundamentally improve the ROI of their web
operations. NaviSite's solutions provide secure, reliable, co-
location and high-performance hosting services, including high-
performance Internet access, and high-availability server
management solutions through load balancing, clustering,
mirroring and storage services. In addition, NaviSite's enhanced
management services, beyond basic co-location and hosting, are
designed to meet the expanding needs of businesses as their Web
sites and Internet applications become more complex and as their
needs for outsourcing all aspects of their online businesses
intensify. The Company's application services, which include
application hosting and management, provide cost- effective
access to, as well as rapid deployment and reliable operation
of, business- critical applications. For more information about
NaviSite, please visit http://www.navisite.comor by phone on
the East Coast call 888-298-8222, on the West Coast call 888-
755-5525. NaviSite is headquartered at 400 Minuteman Road,
Andover, MA 01810.

                         *    *    *

In its Form 10-Q for the quarter ended April 30, 2002, Navisite
reported:

     "WE MAY NEED TO RAISE ADDITIONAL FUNDS, AND SUCH FUNDING
MAY NOT BE AVAILABLE TO US ON FAVORABLE TERMS, IF AT ALL. We
currently anticipate that our available cash resources at April
30, 2002 will be sufficient to meet our anticipated needs,
barring unforeseen circumstances and subject to the impact of
the factors noted below, for working capital and capital
expenditures over the next twelve months. Our projected cash
usage could be significantly impacted by: (1) our ability to
maintain our current revenue levels through retaining existing
customer accounts and acquiring revenue growth at levels greater
than customer revenue churn; (2) our ability to achieve our
projected operating results; (3) our ability to collect amounts
receivables in a timely manner; (4) our ability to collect
amounts due from Engage related to the termination of our
contract with them; (5) our ability to achieve expected cash
expense reductions; and (6) our ability to sell our assets which
are held for sale at fair-market value. However, we may need to
raise additional funds in order to develop new, or enhance
existing, services or products, to respond to competitive
pressures, to acquire complementary businesses, products or
technologies or to continue as a going concern, and we cannot
assure you that the additional financing will be available on
terms favorable to us, if at all. In addition, pursuant to our
financing arrangements with CFS as of October 29, 2001, we may
need to obtain approval from CFS for incremental funding, and we
may not obtain this approval from CFS."


NAVISTAR: Issuing $190MM of Senior Conv. Bonds to Repay Debts
-------------------------------------------------------------
Navistar International Corporation (NYSE:NAV) plans to issue
$190 million in senior convertible bonds, subject to market and
certain other conditions.

Of the net proceeds, $100 million will be used to repay the
aggregate principal amount of existing 7.0 percent senior notes
due February 1, 2003. The remaining funds will be used to repay
other existing debt.

The securities offered will not be or have not been registered
under the Securities Act of 1933 and may not be offered or sold
in the United States absent registration or an applicable
exemption from registration requirements.

Simultaneous with the issuance of the convertible bonds,
Navistar plans to enter into two derivative contracts, the
consequences of which will be to eliminate share dilution
associated with the convertible debt from the conversion price
of the bond up to a 100 percent premium over the share price at
issuance. The maturity and terms of the derivatives match the
maturity of the convertible bonds. These contracts are not
expected to affect earnings per share.

In connection with this arrangement, the seller of the
derivative has informed Navistar that it intends to purchase
Navistar common shares in open-market transactions upon
completion of the distribution of the convertible bonds.

Headquartered in Warrenville, Ill., Navistar International
Corporation (NYSE:NAV) is the parent company of International
Truck and Engine Corporation, a leading producer of mid-range
diesel engines, medium trucks, heavy trucks, severe service
vehicles and a provider of parts and service sold under the
International(R) brand. IC Corporation, a wholly owned
subsidiary, produces school buses. The company also is a private
label designer and manufacturer of diesel engines for the pickup
truck, van and SUV markets. Additionally, through a joint
venture with Ford Motor Company, the company builds medium
commercial trucks and sells truck and diesel engine service
parts. International Truck and Engine has the broadest
distribution network in the industry. Financing for customers
and dealers is provided through a wholly owned subsidiary.
Additional information can be found on the company's Web site at
http://www.internationaldelivers.com

As reported in Troubled Company Reporter's Wednesday Edition,
Standard & Poor's lowered its corporate credit rating on
Warrenville, Illinois-based Navistar International Corp., a
leading producer of heavy- and medium-duty trucks in North
America, to 'BB-' from 'BB'. Standard & Poor's said that in
addition, the corporate credit rating on Navistar's subsidiary,
Navistar Financial Corp., was lowered to 'BB-' from 'BB'. All
ratings were removed from CreditWatch, where they were placed on
Oct. 31, 2002. The outlook is stable.


NOMA CO.: Canadian Court Grants Relief Under CCAA's Section 18.6
----------------------------------------------------------------
Noma Company said the Superior Court of Justice in Ontario has
made an order that recognizes the Chapter 11 proceedings
commenced by Noma in the United States as "foreign proceedings"
under Section 18.6 of the Companies' Creditors Arrangement Act
(CCAA). Since Noma is bound by U.S. bankruptcy laws as a result
of the U.S. filing, the Canadian Court recognition of the U.S.
Chapter 11 filing provides additional certainty to Noma and its
creditors, thereby allowing Noma to continue to run its business
in the ordinary course and to facilitate the restructuring
process.

The Ontario Court has also declared that certain orders made in
the U.S. Chapter 11 proceedings are effective in Canada. This
means that the orders are binding on Noma, its creditors and
other interested parties in Canada. Noma, a manufacturer of a
broad range of wire and wire-based electromechanical assemblies
primarily for the automotive, appliance and electronics
industries and industrial markets, believes that the
supplemental protection afforded by the Ontario Court order best
preserves its ability to deal with its creditors in the United
States and Canada in a consistent and equitable manner during
the Chapter 11 process.

Noma believes the Ontario Court's order is a positive
development for the Company, as it will help to clarify the
legal effect in Canada of Noma's U.S. Chapter 11 filing. The
Order entered by the Ontario Court pursuant to Section 18.6 of
the CCAA imposes a "stay" on any legal enforcement or collection
actions in Canada against Noma or its assets. The Ontario Court
order also makes certain orders entered by the U.S. Bankruptcy
Court, including orders relating to the treatment of employees,
vendors and other creditors and the continuance of customer
programs, effective and binding in Canada.

On Oct. 11, 2002, Noma Company, its ultimate parent, GenTek Inc.
(OTC Bulletin Board: GNKIQ) and 30 of its U.S. affiliates filed
voluntary petitions for relief under Chapter 11 of the U.S.
Bankruptcy Code in the United States Bankruptcy Court for the
District of Delaware to facilitate a restructuring of GenTek and
certain of its U.S. affiliates. Noma commenced its Chapter 11
process in the United States because its other Chapter 11
affiliates are all either obligors or guarantors under GenTek's
senior secured credit facility. Noma is a borrower under
GenTek's credit facility. Since the Chapter 11 filings, GenTek
and its affiliates, including Noma, have continued to operate
their businesses as debtors in possession under the provisions
of U.S. bankruptcy code and will continue their business
operations in the ordinary course.

Noma plans to continue to use its positive cash flow and
existing cash balances to fund day-to-day operations. Noma's
ultimate parent company, GenTek, is currently working with its
creditors to develop a Chapter 11 reorganization plan to
restructure the company's debt. During the U.S. Chapter 11
process, Noma's Canadian creditors will have the right to file
proofs of claim, to vote and otherwise to participate in the
U.S. Chapter 11 proceedings in the same manner as Noma's U.S.
creditors.

Headquartered in Halifax, Noma is an unlimited liability
corporation under the laws of the Province of Nova Scotia. Noma
operates five manufacturing facilities, three of which are
located in Southern Ontario. The other manufacturing facilities
are in Tillsonburg, Ontario, and in Valcourt, Quebec. Noma
Company constitutes the Canadian operations of a larger
multinational enterprise known as the Noma Group. The companies
in Noma Group have common senior management based in Southfield,
Mich., and are managed as an integrated enterprise. The Noma
Group is an industry leader in the manufacture of a broad range
of wire and wire-based electromechanical assemblies, primarily
for the automotive, appliance and electronics and industrial
markets. These products include engineered wire harnesses for
various automotive and heavy-duty vehicle applications,
including engines, ignitions, air bag systems and weather
systems, and appliance applications including, ovens,
microwaves, stoves, refrigerators, washing machines and dryers.
The Noma Group also provides a wide range of technical services
including advanced design, applied engineering and product
integration.

GenTek Inc., is a technology-driven manufacturer of
telecommunications and other industrial products. Additional
information about the company is available on GenTek's Web site
at http://www.gentek-global.com


PACIFIC GAS: Makes $75MM in Property Tax Payments in California
---------------------------------------------------------------
Pacific Gas and Electric Company made property tax payments
totaling $75.3 million to the 49 counties in which it operates.
This amount represents full and timely payment of property taxes
due for the period from July 1 to December 31, 2002.

"[Tues]day, Pacific Gas and Electric Company met its commitment
to local government in paying more than $75 million in property
taxes, which will help fund vital public services - public
safety, education, health care and environmental protection,"
said Gordon R. Smith, president and chief executive officer of
Pacific Gas and Electric Company. "In these times of tight
budgets, PG&E's payment of property taxes, franchise fees and
other taxes and fees remain a stable source of revenue for local
governments."

Since filing for Chapter 11 bankruptcy protection in April of
2001, Pacific Gas and Electric Company has continued to meet its
obligations to local governments by paying timely property
taxes, franchise payments and other fees.

This is the fourth property tax payment Pacific Gas and Electric
Company has made to California counties since its Chapter 11
bankruptcy filing. The last of these twice-yearly payments was
made on April 10, 2002. At that time, the utility paid $67.8
million in property taxes.


PARK PHARMACY: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Park Pharmacy Corp.
        fka Power-Cell, Inc.
        c/o Craig Mackey, President
        10711 Preston Road, Suite 250
        Dallas, Texas 75230

Bankruptcy Case No.: 02-80896

Type of Business: Holding company for various companies
                  providing pharmacy services in retail
                  pharmacy, infusion pharmacy, institutional
                  pharmacy, and wholesale pharmacy
                  distribution.

Chapter 11 Petition Date: December 2, 2002

Court: Northern District of Texas (Dallas)

Judge: Steven A. Felsenthal

Debtor's Counsel: Alan S. Trust, Esq.
                  Trust Law Firm P.C.
                  1201 Elm St., Suite 5270
                  Dallas, TX 75270
                  Tel: 214-720-0632

Total Assets: $5,310,286

Total Debts: $13,539,754

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Arter & Hadden LLP          Goods or services          $45,453
                             Performed

Hein & Associates, LLP                                 $10,145

SBC Datacomm                                            $8,660

SM Berger Company                                       $6,972

Screening Backgrounds Investig                          $6,660

Vollmer                                                 $6,237

Texas Moving Company, Inc.                              $6,218

Adair Printing                                          $3,320

International Voice and Date                            $2,807

Jason's Deli                                            $2,537

Bowne of Dallas                                         $2,386

David Childs, Tax Assessor/Col.                         $1,684

Amerisuites Dallas North   Goods or Services            $1,530

Lohf Shaiman Jacobs & Hyman PC                          $1,004

Lavinski Allan & Associates                               $640

Terrell & Terrell                                         $626

North Dallas Bank & Trust                                 $546

Courtyard Marriot                                         $322

Castlebrook Realty Blgd Fund I                            $235

Blakeman & Associates                                     $222


PEREGRINE SYSTEMS: Hires Yetter & Warden for Motive Litigation
--------------------------------------------------------------
Peregrine Systems, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware for permission to
retain Yetter & Warden LLP as their Special Litigation Counsel
to defend certain claims brought against the Debtors by Motive
Communications, Inc.

Motive Communications filed a petition for a temporary
restraining order and an application for a temporary injunction
in the 261st District Court of Travis County, Texas against
Peregrine, Remedy and two former officers and directors.  Among
the allegations, Motive asserts that the Debtors defrauded
Motive when entering into a license agreement and thereafter
misappropriated certain alleged trade secrets belonging to
Motive.  Peregrine in turn, filed a counterclaim.

Prior to the Petition Date, Yetter & Warden was retained to
represent Debtors in connection with Motive's efforts to obtain
injunctive relief.  As a result of Yetter & Warden's
representation of the Debtors in that proceeding, it has
extensive knowledge of the claims made by Motive against the
Debtors.

The professionals primarily responsible in this case and their
current hourly rates are:

          R. Paul Yetter        $380 per hour
          Autry W. Ross         $260 per hour
          Julee A. Prentice      $75 per hour

Peregrine Systems, Inc., the leading global provider of
Infrastructure Management software, filed for chapter 11
protection on September 22, 2002. Laura Davis Jones, Esq., at
Pachulski, Stang, Ziehl Young & Jones represent the Debtors in
their restructuring efforts.  When the Company filed for
protection from its creditors, it listed estimated debts and
assets of more than $100 million.


PIONEER COMPANIES: Appoints Gary Pittman as Chief Fin'l Officer
---------------------------------------------------------------
Pioneer Companies, Inc., (OTC Bulletin Board: PONR) has
appointed Gary L. Pittman as Vice President and Chief Financial
Officer.  Mr. Pittman, 47, succeeds Philip J. Ablove, who is
retiring at the end of the year.  David N. Weinstein,
Pioneer's Chairman, stated, "Pioneer has been extremely
fortunate to receive the benefit of Phil Ablove's advice and
leadership during the last seven years.  He and Gary Pittman,
who joined the Company in September 2002, have had the
opportunity to prepare for a smooth transition, and I am pleased
that Phil has agreed to continue to assist in that effort."

Mr. Pittman has over 15 years experience in working with
publicly-held companies to improve their financial performance
and operations.  His most recent assignment was as Vice
President and Chief Financial Officer of Coho Energy, Inc., in
Dallas.  Mr. Pittman received B.A. and M.B.A. degrees from the
University of Oklahoma.

Michael Y. McGovern, Pioneer's President and Chief Executive
Officer, stated, "From my previous experience working with Mr.
Pittman, I know that he brings to his new position strong
credentials for optimizing the financial performance of Pioneer.
We are pleased he chose to accept the challenge."

Pioneer, based in Houston, manufactures chlorine, caustic soda,
hydrochloric acid and related products used in a variety of
applications, including water treatment, plastics, pulp and
paper, detergents, agricultural chemicals, pharmaceuticals and
medical disinfectants.  The Company owns and operates four
chlor-alkali plants and several downstream manufacturing
facilities in North America.  Other information and press
releases of Pioneer Companies, Inc., can be obtained from its
Internet Web site at http://www.piona.com

                         *    *    *

At June 30, 2002, Pioneer had cash of $5.4 million and a
borrowing base under its revolving credit facility of
approximately $22.3 million.  At that date, borrowings under the
revolver were $5.4 million.  Borrowing availability, after
borrowings, letters of credit and reserves, was $12.3 million
which, when added to the cash position, resulted in liquidity of
$17.7 million.

Pioneer adopted fresh start accounting in connection with its
emergence from bankruptcy on December 31, 2001.  Accordingly,
financial statements for periods after emergence are not
comparable to those of prior periods.  The Company's financial
statements are prepared on a going concern basis.  As noted in
Pioneer's Annual Report on Form 10-K for the year ended December
31, 2001, and its Quarterly Reports on Form 10-Q for 2002, the
Company's emergence from bankruptcy, its financial condition and
other items disclosed in its recent SEC filings raise concern
about the Company's ability to continue as a going concern.  The
financial statements included in those filings do not include
any adjustments that may result from the outcome of the
uncertainties.


PROTEIN DESIGN: S&P Revises Outlook on Low-B and Junk Ratings
-------------------------------------------------------------
Standard & Poor's revised its outlook on Protein Design Labs
Inc., to stable from positive. At the same time, Standard &
Poor's affirmed its 'B-' corporate credit and 'CCC' subordinated
debt rating on Protein Design Labs.

The outlook revision reflects the uncertainty regarding the
strategic direction of the company after the appointment of two
new officers in key management positions, and also reflects
Standard & Poor's belief that cash usage is likely to accelerate
as candidate drugs in the company's pipeline enter the latter,
more expensive stages of development.

"The low, speculative-grade ratings on Fremont, California-based
Protein Design Labs reflect the large risks inherent to drug
discovery and the company's unpredictable future royalty-based
revenues," said Standard & Poor's credit analyst Arthur Wong.
"These negative factors are partially offset by the company's
proven patented technologies to humanize monoclonal antibodies,
technologies, used by other companies, that have provided
Protein Design Labs with a consistent royalty stream."

Protein Design Labs participates in the niche area of humanized,
murine-derived monoclonal antibodies. The company's proprietary
technologies humanize monoclonal antibodies, thereby reducing
the risk of adverse reactions in patients and increasing the
effectiveness of treatments. Specifically, Protein Design
receives licensing revenue from four humanized monoclonal
antibodies developed by other pharmaceutical companies using
Protein Design Labs' proprietary technology. These products
include Synagis, a treatment sold by MedImmune Inc. to prevent
respiratory viral disease in infants; Herceptin, a treatment for
breast cancer, sold by Genentech Inc.; and Mylotarg, a
chemotherapy treatment sold by Wyeth. In addition Protein Design
Labs receives sales royalties on Zenapax, its own humanized
antibody product, which has been licensed to Roche Holdings AG.
Royalty payments currently make up the bulk of Protein Design's
revenue base, (about 93% for the nine months ended September
2002).

While royalties provide Protein Design Labs with an increasing
source of cash flows, the growth of the company's research and
development expenditures are expected to accelerate, especially
as Protein Design Labs' pipeline products progress into the
latter, more expensive stages of development. In addition to the
four therapies in Phase I clinical trials, Protein Design Labs'
proprietary pipeline consists of Zenapax, in Phase II trials for
asthma; Nuvion, in Phase II for graft-versus-host disease; and
Anti-Gamma Interferon, in Phase II for Crohn's disease.


ROYAL HAVEN: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Royal Haven Builders, Inc.
        5201 East U.S. 36, #150
        Avon, Indiana 46123

Bankruptcy Case No.: 02-21301

Type of Business: General construction contractor, builder and
                  developer.

Chapter 11 Petition Date: December 3, 2002

Court: Southern District of Indiana

Judge: James K. Coachys

Debtor's Counsel: John W. Graub II, Esq.
                  Rubin & Levin, P.C.
                  500 Marott Center
                  342 Massachusetts Avenue
                  Indianapolis, IN 46204
                  Tel: 317-634-0300
                  Fax: 317-263-9411

Estimated Assets: $10 to $50 Million

Estimated Debts: $10 to $50 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                                            Claim Amount
------                                            ------------
Republic Bank                                       $8,210,164
Dennis Hill
306 W. Michigan
Jackson, MI 49201
Tel: 1-517-789-4352

First Indiana Bank                                  $7,991,364
Mike Rigsby
1900 First Indiana Plaza
Indianapolis, IN 46204
Tel: 1-317-269-1218

Irwin Union Bank                                    $3,087,910
Greg Everling
10080 E. US 36 Suite C
Avon, IN 46123

Americana Bank                                      $1,944,553
Tom Girton
1311 Broad Street
New Castle, IN 47362
Tel: 1-765-521-7550

Monroe Bank                                         $1,703,784
Bob Krupka
111 S. Lincoln
Bloomington, IN 47408
Tel: 1-812-331-3541

Landmark Savings Bank                                 $995,606
CP Profetti
1099 N. Meridian Street
Indianapolis, IN 46204
Tel: 1-317-269-1218

Jack Dalton                                           $525,000
Grover Davis
Tel: 1-317-721-0800

Liberty Savings Bank FSB                              $490,522
12276 SanJose Blvd., Suite 108
Jacksonville, FL 32223

GMAC                                                  $342,744
PO Box 57003
Irvine, CA 92619

The MacKenzie Corporation                             $328,512
Greg Bruzas
8355 Rockville Road
Indianapolis, IN 46234
Tel: 1-317-271-8868

Swinney                                               $325,000

Eaton Excavating                                      $201,017

Lumber One                                            $192,323

Busey Bank                                            $158,335

Citizens Bank                                         $158,335

Lee Whitten                                           $151,000

R&R Products                                          $136,863

American Electric Co.                                 $118,400

Indiana Hardwood Mills                                $114,921

941 dep (Jan 1- 10-04-02)                             $105,851


SEITEL INC: Brings-In Larry E. Lenig as New Chief Exec. Officer
---------------------------------------------------------------
Seitel, Inc., (NYSE: SEI; Toronto: OSL) has hired Larry E.
Lenig, Jr., as the Company's new CEO and president, effective
immediately.  Mr. Lenig brings to Seitel 25 years of operating
experience in the geophysical industry. Most recently, Mr. Lenig
served as President, North American Operations, of Paradigm
Geophysical Corporation, the largest independent developer and
supplier of integrated software for exploration and production
(1999-2002), as CEO of Grant Geophysical, Inc., one of the
largest providers of onshore and transition zone seismic
services (1997-1999), and previously as CFO and COO of Digicon
Inc., a seismic industry pioneer and now a part of Veritas DGC,
Inc. (1976-1994).  With Mr. Lenig's appointment, Fred Zeidman
will revert to his prior position serving as Seitel's Chairman.

Fred Zeidman, Chairman of Seitel, stated, "We are extremely
pleased to have Larry join Seitel in this leadership position.
Larry's extensive experience and knowledge of the industry,
together with his keen strategic intellect, strong leadership
characteristics and unique set of team-building skills will
serve the Company well as we continue to move forward."

Larry Lenig added, "I am excited about the opportunity to work
together with the entire Seitel team and with our customers,
noteholders, suppliers and shareholders toward long-term
success.  The Company has made great progress during the past
few quarters, and we look forward to sustaining and building
on this momentum.  Seitel's extensive U.S. and Canadian database
of 3D and 2D seismic coverage, enhanced by an impressive suite
of added value processing and attribute packages, and coupled
with aggressive and creative initiatives to expand coverage
areas, provides exceptional opportunity for future growth."

As previously disclosed, the Securities and Exchange Commission
and United States Attorney's Office for the Southern District of
Texas are investigating alleged improprieties committed by the
Company's former CEO and CFO.  In that regard, the Company has
recently been advised that the SEC has opened a formal
investigation into such matters.  The Company continues to fully
cooperate with the governmental investigations.

Seitel markets its proprietary seismic information/technology to
more than 400 petroleum companies, licensing data from its
library and creating new seismic surveys under multi-client
projects.

As reported in Troubled Company Reporter's December 5, 2002
edition, Seitel, Inc., reached an agreement with its Noteholders
to extend the previously announced standstill agreement. Under
the terms of the extension, the Senior Noteholders have agreed
to forebear from exercising any rights and remedies they have
against the Company related to the previously reported events of
default under the Senior Note Agreements until June 2, 2003.  In
addition, the extended standstill agreement provides for the
deferral, until June 2, 2003, of the $10 million principal
payment previously scheduled to be due to certain of the
Noteholders on December 30, 2002. Interest on the Notes
continues to be payable on a monthly basis.

As with the previous agreement, the amended standstill agreement
will terminate prior to June 2, 2003, in the event of, among
other things, a default by the Company under the standstill
agreement or any subsequent default under the existing Senior
Note Agreements; a default in the payment of any non- excluded
debt of $5,000,000 or more; the termination or expiration of the
Company's existing term or revolving credit lines with the Royal
Bank of Canada (the Company is currently in discussions with the
Royal Bank of Canada and the Noteholders regarding the terms for
the proposed extension of these facilities); or after five
business days written notice from Noteholders owning a majority
in interest of the outstanding principal amount of the Notes.
The standstill agreement will also terminate in the event the
Company does not present to the Noteholders a proposal for
restructuring the Notes by December 11, 2002; an agreement in
principle for the restructuring is not reached by January 24,
2003; or the documents necessary for the restructuring are not
substantially completed by February 28, 2003.


SLI INC: Gets Court Nod to Hire Asset Appraisal as Consultant
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave its
nod of approval to SLI, Inc., and its debtor-affiliates'
application to employ Asset Appraisal Corporation as a
consultant to handle the disposition or liquidation of non-core
businesses and assets.

More that a year prior to the Petition Date, the Debtors
discontinued their Power Lighting Products division, a business
line operated through one of the Debtors, SLI Lighting Products,
Inc. and through non-debtor subsidiary, CCC de Mexico.

The Debtors made a number of attempts to market the PLP business
as a going concern, and retained the services of Asset Appraisal
to assist in the marketing effort.  These attempts were not
successful and the Debtors were forced to close the PLP business
in May of 2001.  The Debtors conducted a public auction of the
PLP business assets in August 2002 with a national auction firm,
Michael Fox International, under the direction of the Debtors
and Asset Appraisal.  Although the items utilized in the PLP
business were sold, there still remain to be sold or disposed of
various items of machinery, equipment and other personality
owned by Lighting Products and CCC.

Generally, the Property is not usable in the Debtors' other core
operations.  The Debtors are presently evaluating the best
method of disposing of the Property.  In order for this effort
to succeed, the Debtors require the services of Asset Appraisal
and its principal, Larry L. Perdue.

Asset Appraisal is an independent asset evaluation, valuation,
and liquidation consulting company that has provided independent
related services.

Asset Appraisal has had significant responsibility in
administering the auction process, including coordination of
tasks with the auctioneer, solicitation of potential bidders,
determining values for sale items, overseeing the preparation of
items for the auction itself, and many other duties, and as a
result has gained invaluable knowledge and familiarity with the
Debtors' remaining assets of the PLP CCC businesses.

Asset Appraisal will charge the Debtors:

(a) $200 per hour for services rendered by Mr. Perdue within
     his Edmond, OK office and $300 per hour outside his Edmond,
     OK office; and

(b) 10% of the gross amount actually paid if Asset Appraisal
     acts as either consultant, sales agent or auctioneer.

SLI, Inc., and its affiliates operate in multi-business segments
as a vertically integrated manufacturer and supplier of lighting
systems, which includes lamps, fixtures and ballasts. The
Company filed for chapter 11 protection on September 9, 2002 in
the U.S. Bankruptcy Court for the District of Delaware. Gregg M.
Galardi, Esq., at Skadden, Arps, Slate, Meagher represents the
Debtors in their restructuring efforts. When the Company filed
for protection from its creditors, it listed $830,684,000 in
total assets and $721,199,000 in total debts.


SOVEREIGN SPECIALTY: S&P Rates $40MM Term Loan Facility at BB-
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' senior
secured bank loan rating to Sovereign Specialty Chemicals Inc.'s
$40 million tranche B term loan facility maturing 2008.

Standard & Poor's said that at the same time it has affirmed its
'B+' corporate credit, 'BB-' senior secured, and 'B-'
subordinated debt ratings on the company. The outlook remains
stable.

Chicago, Illinois-based Sovereign, with sales of more than $350
million and approximately $233 million of outstanding debt, is a
focused specialty chemicals producer.

"The rating affirmation incorporates recognition that the
proposed tranche B term loan will improve the company's debt
maturity schedule," said Standard & Poor's credit analyst Peter
Kelly. Proceeds of the tranche B term loan will be used to
prepay a portion of the tranche A term loan.

The tranche B term loan, along with the existing revolving
credit facility and remaining portion of Sovereign's tranche A
term loan, is rated one notch higher than the corporate credit
rating. The facilities are secured by substantially all the
assets of the company and its domestic subsidiaries, as well as
the capital stock of the company and its domestic subsidiaries,
and 66% of the stock of major foreign subsidiaries. The security
interest in the collateral offers strong prospects for full
recovery of principal. In evaluating recovery prospects,
Standard & Poor's employed its enterprise value methodology.
Cash flows were significantly discounted to simulate a default
scenario and capitalized at an EBITDA multiple reflective of
Sovereign's peer group. Under this simulated downside case,
Standard & Poor's expects that the collateral package would
retain sufficient value to cover the fully drawn revolving
credit, tranche A term loan and tranche B term loan facilities.

Standard & Poor's said that its ratings on Sovereign continue to
reflect the firm's below-average business profile and very
aggressive financial risk.


SPX CORP: S&P Assigns Lower-B Ratings to New Loans & Sr. Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' ratings to
SPX Corp.'s new $500 million senior secured revolving credit
facility and new $175 million senior secured tranche A term
loan, both maturing in 2008, and its 'BB-' rating to SPX's $250
million senior unsecured notes due 2012. Proceeds from the
offerings will be used to reduce bank borrowings, and for
general corporate purposes.

At the same time Standard & Poor's affirmed its 'BB+' corporate
credit rating on Charlotte, N.C.-based SPX, a diversified
manufacturing firm. Total outstanding debt at Sept.30, 2002, was
about $2.4 billion. The outlook is a stable.

"The ratings on SPX reflect the firm's above-average business
profile whose products generally enjoy leading or solid market
positions, partially offset by a somewhat aggressive financial
policy, and fair cash flow protection," said Standard & Poor's
credit analyst Dan DiSenso.

SPX's operations are included in four segments: technical
products and systems; industrial products and services; flow
technology; and service solutions. The firm serves a wide
variety of markets, including industrial, power, construction,
life sciences, computer networks, radio and television, and
automotive. The business is diversified by end-market, customer,
and geography, with nearly 30% of sales coming from outside the
U.S. Moreover, a sizable portion of sales goes to the more
stable replacement market. These factors, along with aggressive
cost-cutting actions, and a focus on profitable growth and real
improvement in EVA (economic value added), enables the firm to
mitigate cyclical exposure and generate strong free cash flow.

SPX's bank credit facility, including new term loan A and the
revolver, along with existing term loans B and C, are rated the
same as the corporate credit rating. The facility is secured by
a first-priority security interest in all tangible and
intangible assets, and all capital stock of SPX's direct and
indirect subsidiaries (limited to 66% of such capital stock in
the case of material first-tier foreign subsidiaries). Also, the
facility is guaranteed by each of SPX's direct and indirect U.S.
subsidiaries, subject to certain exceptions. Key financial
covenants include a minimum consolidated interest coverage
ratio, and a maximum consolidated debt leverage ratio, net of
cash in excess of $50 million. Standard & Poor's used its
enterprise value methodology in analyzing recovery prospects of
a fully utilized bank facility at the point of default or
bankruptcy. In Standard & Poor's view, secured lenders would
likely experience a meaningful recovery of principal in the
event of a default or bankruptcy, despite potentially
significant loss exposure.


STUDENT ADVANTAGE: Fails to Meet Nasdaq Listing Requirements
------------------------------------------------------------
Student Advantage, Inc., (Nasdaq: STAD) received a Nasdaq Staff
Determination on December 4, 2002, indicating that the company
fails to comply with the market value of publicly-held shares
requirement for continued Nasdaq National Market listing set
forth in Marketplace Rule 4450(a)(2), and that its securities
are therefore subject to delisting from the Nasdaq National
Market. The company intends to appeal the Staff's determination
to the Nasdaq Listing Qualifications Panel which will stay the
delisting until the appeal has been heard and the Panel has
rendered its decision. There can be no assurance the Panel will
grant the company's request for continued listing.

The company also received notice on November 21, 2002 from the
Staff that the company did not comply with the minimum $10
million stockholders' equity test for continued inclusion in the
Nasdaq National Market as required by Marketplace Rule
4450(a)(3). The company expects to address this deficiency with
the Panel.

                         Recent Events

The company is continuing discussions with a group of existing
stockholders including its president and chief executive officer
regarding a possible acquisition of the company or assets of the
company or the restructuring of its indebtedness. The company is
also pursuing other strategic alternatives.

The company also learned that the liquidating trustee of the
CollegeClub bankruptcy estate has brought suit against the
company and another party regarding payments received under an
agreement the company purchased in 2000. The company believes
that the trustee's allegations are factually incorrect and are
inconsistent with the terms of its acquisition agreement with
CollegeClub.com and intends to defend the matter vigorously. If,
however, the company is found to have significant liability to
the liquidating trustee, its financial condition and liquidity
would suffer significant harm.

Student Advantage, Inc., (Nasdaq: STAD) is a leading integrated
media and commerce company focused on the higher education
market. Student Advantage works with more than 1,000 colleges,
universities and campus organizations, and more than 15,000
merchant locations to develop products and services that enable
students to make purchases less expensively and more
conveniently on and around campus. The company's university and
business relationships allow it to sell campus-specific consumer
products and licensed collegiate sports memorabilia directly to
parents, students and alumni. The company reaches its consumer
base offline through the Student Advantage Membership and Campus
Services and online through its highly-trafficked Web sites
studentadvantage.com, CollegeClub.com and CollegeSports.com, the
hub site for its Official College Sports Network.


SUN MEDIA: S&P Ratchets Senior Secured Debt Rating Up a Notch
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its senior secured
debt rating on publishing company Sun Media Corp., to 'BB-' from
'B+'. The rating action affects the company's C$376.8 million
senior secured bank facility. In addition, the ratings on
Quebecor Media Inc., including the single-'B'-plus long-term
corporate credit rating, and its subsidiaries, including Sun
Media and Videotron Ltee, remain on CreditWatch with negative
implications.

The ratings on Toronto, Ontario-based Sun Media are equal to
those on its 100% parent, Quebecor Media, reflecting the parent-
subsidiary relationship between the two entities, including
Quebecor Media's control over Sun Media's business strategy,
financial policies, and application of free cash flows.

The ratings upgrade on Sun Media's secured debt to one notch
above the corporate credit rating reflects Standard & Poor's
review of recovery prospects and potential causes of default
relative to the reduced size of the credit facility and the
value of Sun Media's assets. In particular, given Sun Media's
moderately strong business and financial profile, the risk of
default is partially driven by the relatively high leverage of
the Quebecor Media group.

"The one-notch uplift of Sun Media's bank facility above the
corporate credit rating reflects Standard & Poor's expectation
that there is a strong likelihood of full recovery of principal
in the event of default or bankruptcy," said Standard & Poor's
credit analyst Barbara Komjathy.

The ratings on Quebecor Media were placed on CreditWatch with
negative implications on September 16, 2002, to reflect
increased concerns over tight leverage covenants at Quebecor
Media's two key operating subsidiaries, Sun Media and Videotron,
particularly at the end of 2002 and in light of dividend
upstream requirements at the holding company level. As a first
step, Quebecor Inc., Quebecor Media's 54.7% equity shareholder,
announced on November 25, 2002, the sale of 6.8 million
subordinate voting shares of its printing subsidiary, Quebecor
World Inc., for gross proceeds of C$245 million. Standard &
Poor's expects net proceeds will be used to repay Quebecor
Inc.'s 54.7% share of Quebecor Media's C$429 million of
nonrecourse debt due April 2003. Resolution of the CreditWatch
placement is dependent on Quebecor Media's continued success in
easing its covenant restrictions on its subsidiaries.


TRI-STATE OUTDOOR: Plan Voting Draws to a Close Tomorrow
--------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of Tri-State Outdoor Media Group, Inc., is soliciting
acceptances of its Amended Plan of Reorganization from holders
of impaired claims who are receiving distributions under the
Committee's Chapter 11 Plan.

Tomorrow is the last day for filing and serving motions seeking
temporary allowance of claims and interests for the purpose of
accepting or rejecting the Committee Plan. Holders of unimpaired
claims are presumed to have voted to accept the Plan and holders
of interests are presumed to have voted against the Plan.
Therefore, both are not entitled to vote on the Plan.

To be counted, ballots to accept or reject the Plan must be
received before 5:00 p.m. tomorrow, Dec. 12, by the solicitation
agent, at:

      Tri-State Outdoor Media Group, Inc.
      c/o Trumbull Services Company, LLC
      4 Griffin Road North
      Windsor, CT 06095

Tri-State Outdoor Media filed for Chapter 11 protection on April
25, 2002. Grant Stein, Esq., and Jason Watson, Esq., at Alston &
Bird LLP represent the Debtors in their restructuring efforts.


TRI-STATE OUTDOOR: Court to Consider Committee's Plan on Dec. 19
----------------------------------------------------------------
On November 14, 2002, the U.S. Bankruptcy Court for the Middle
District of Georgia approved the Disclosure Statement prepared
by the Official Committee of Unsecured Creditors in the Chapter
11 cases of Tri-State Outdoor Media Group, Inc.  The Court found
that the disclosure document contains adequate information to
explain the Committee's Plan and allow creditors to make
informed decisions about whether to vote to accept or reject the
Plan.

A hearing to consider confirmation of the Committee Plan will
commence on December 19, 2002, at 10:00 a.m. prevailing Eastern
time or as soon thereafter as Counsel can be heard before the
Honorable John T. Laney III.

The last day for filing to the Court objections to the
confirmation of the Committee Plan is tomorrow, Dec. 12, at 5:00
p.m. Objections must also be served upon:

      i. Counsel for the Debtor
         Alston & Bird LLP
         1201 West Peachtree Street
         Atlanta, Georgia 30309-3424
         Attn: Grant Stein, Esq.
               Jason Watson, Esq.

     ii. Counsel for the Committee
         Orrick Herrington & Sutcliffe LLP
         666 Fifth Avenue
         New York, NY 10103
         Attn: Anthony Princi, Esq.
               Thomas Kent, Esq.

                 -and-

         Katz, Flatau, Popson & Boyer, LLP
         355 Cotton Avenue
         Macon, Georgia 31201
         Attn: William R. Flatau, Esq.
               Wesley J. Bower, Esq.

    iii. the United States Trustee
         Mark W. Roadamel, Esq., Asst. U.S. Trustee
         Middle District of Georgia
         Suite 501
         433 Cherry Street
         Macon, Georgia 31201

Tri-State Outdoor Media filed for Chapter 11 protection on April
25, 2002. Grant Stein, Esq., and Jason Watson, Esq., at Alston &
Bird LLP represent the Debtors in their restructuring efforts.


TRENWICK GROUP: Third Quarter Operating Loss Widens to $135 Mil.
----------------------------------------------------------------
Trenwick Group Ltd., was formed as a holding company in Bermuda
on December 10, 1999 to acquire two publicly held companies and
the minority interest in a subsidiary of one of those companies.
That transaction was completed on September 27, 2000. Trenwick's
principal subsidiaries underwrite specialty insurance and
reinsurance.

Trenwick recorded an operating loss of $135.0 million in the
three months ended September 30, 2002 compared to an operating
loss of $94.4 million recorded in the three months ended
September 30, 2001. Trenwick's operating loss for the third
quarter of 2002 resulted principally from $90.7 million of loss
reserve increases recorded in Trenwick's United States operating
subsidiaries and Trenwick International Limited. The loss
reserve increases emanate from reported loss activity with
related increases in incurred but not reported reserves,
predominantly for accident years 1997 through 2000, as well as a
reassessment of reserve levels. In addition, Trenwick fully
reserved its $57.0 million U.S. net deferred tax asset in the
third quarter of 2002, when Trenwick determined that its
cumulative financial accounting losses do not currently support
a position that Trenwick will be able to realize the tax
benefits of past losses in the future. The operating loss in the
third quarter of 2001 was mainly due to the recording of
catastrophe losses of $99.0 million arising from the September
11th terrorist attacks.

Trenwick produced an underwriting loss of $87.8 million in the
third quarter of 2002 compared to an underwriting loss of $120.9
million in the third quarter of 2001.  Gross premiums written
for the three months ended September 30, 2002 were $389.8
million compared to $367.5 million for the three months ended
September 30, 2001, an increase of $22.2 million, or 6.0%

Trenwick recorded an operating loss of $142.6 million in the
nine months ended September 30, 2002 compared to an operating
loss of $133.2 million recorded in the nine months ended
September 30, 2001. As shown above, the greater loss in 2002 is
principally the result of the establishment of a reserve of
$57.0 million against Trenwick's U.S. deferred tax asset during
the third quarter of 2002, $90.7 million of loss reserve
increases recorded in Trenwick's United States operating
subsidiaries and Trenwick International Limited in the third
quarter of 2002 and $23.0 million of additional September 11th
loss reserves recorded at LaSalle Re Limited in the first
quarter of 2002. Trenwick's third quarter loss reserve increases
resulted from reported loss activity with related increases in
incurred but not reported reserves, predominantly for accident
years 1997 through 2000, as well as a reassessment of reserve
levels. Trenwick's valuation reserve on its U.S. deferred tax
asset in the third quarter of 2002 occurred when Trenwick
determined that its cumulative financial accounting losses do
not currently support a position that Trenwick will be able to
realize the tax benefits of past losses in the future. The
operating loss in the first nine months of 2001 was mainly due
to $99.0 million of September 11th catastrophe losses and $76.7
million of loss reserve strengthening recorded in the second
quarter of 2001.

Trenwick produced an underwriting loss of $137.7 million in the
first nine months of 2002 compared to an underwriting loss of
$225.3 million for the same period of 2001.

Trenwick's total debt to capital ratio (total indebtedness
divided by total indebtedness, preferred capital securities,
preferred shares and common shareholders' equity) decreased to
14.9% at September 30, 2002, from 31.2% on December 31, 2001,
due to the repayment of the $195 million in principal amount
outstanding under the term loan portion of Trenwick's bank
credit facility.

The continuation of an event of default under the credit
facility, the restrictions on Trenwick's ability to pay
dividends to preferred and common shareholders and the potential
demand for cash collateral by the letter of credit providers may
cause additional events of default to occur under the
instruments governing the outstanding indebtedness and preferred
shares of Trenwick and its subsidiaries.

Trenwick's ability to refinance its existing letter of credit
obligations or raise additional capital is dependent upon
several factors, including financial conditions with respect to
both the equity and debt markets and the ratings of its
securities as established by the rating agencies. During the
past year, Trenwick's senior and preferred share debt ratings
have been downgraded significantly by Standard & Poor's
Corporation and by Moody's Investors Service. At this time,
Trenwick's senior debt rating from Standard & Poor's Corporation
is CCC+ and Moody's Investors Service is B3. Trenwick's ability
to refinance its outstanding letter of credit and debt
obligations, as well as the cost of such borrowings, could be
adversely affected by these ratings downgrades or if its ratings
were downgraded further.

Should Trenwick's subsidiaries be unable to meet any letter of
credit reimbursement obligations as they fall due, and such
repayments are not refinanced, Trenwick would become liable for
such repayments under the terms of the guarantees. Because
Trenwick America Corporation, Trenwick Holdings Limited and
Trenwick are holding companies, their principal source of funds
consists of permissible dividends, tax allocation payments and
other statutorily permissible payments from their respective
operating subsidiaries. As a result of recent losses incurred by
Trenwick's operating subsidiaries, their cash distribution
capacities have been significantly reduced.


UNIROYAL TECH: Wants Case Converted to Chapter 7 Liquidation
------------------------------------------------------------
Uniroyal Technology Corporation and its debtor-affiliates ask
the U.S. Bankruptcy Court for the District of Delaware to
convert their Chapter 11 case to a liquidation proceeding under
Chapter 7 of the Bankruptcy Code.

The Debtors point out that voluntary conversion is governed by
Section 1112(a) of the Bankruptcy Code, which provides that a
debtor may convert a chapter 11 case to a case under chapter 7
at any time as a right.  The Debtor UTC is eligible to be a
debtor under chapter 7 and desires to convert its chapter 11
case to a case under chapter 7.  UTC possesses an absolute right
to convert its case to a case under chapter of the Bankruptcy
Code, and consideration of the factors relevant to deciding
"cause" is not necessary.

Uniroyal Technology Corporation and its subsidiaries are engaged
in the development, manufacture and sale of a broad range of
materials employing compound semiconductor technologies, plastic
vinyl coated fabrics and specialty chemicals used in the
production of consumer, commercial and industrial products. The
Company filed for chapter 11 protection on August 25, 2002 Eric
Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at The Bayard
Firm represent the Debtors.  When the Debtors filed for
protection from its creditors, it listed $85,842,000 in assets
and $68,676,000 in debts.


UNITED AIRLINES: Receives Court Approval of 'First Day' Motions
---------------------------------------------------------------
UAL Corp. (NYSE:UAL), the parent company of United Airlines,
received approval from the U.S. Bankruptcy Court for a series of
the company's "first day" motions that help ensure United
Airlines' operations can continue throughout the reorganization
proceeding.

"The Court's approval of our first day motions will ensure that
United can continue operations around the world and remain
focused on serving our customers as we go through this process,"
said Glenn F. Tilton, Chairman, President and Chief Executive
Officer of UAL.

At Monday's hearing, the court approved, among other things,
motions related to:

     --  Normal payment of employee salaries, wages and
         benefits;

     --  Continued normal operation of the Mileage Plus program,
         Red Carpet Clubs and other customer programs;

     --  Continued payment to fuel vendors;

     --  Payment to overseas suppliers for the delivery of good
         and services;

     --  Assumption of interline agreements; and

     --  Continued honoring of obligations to travel agents.

The court approved, under an interim order, access to $800
million of the debtor-in-possession (DIP) financing for use by
the company. These funds, in addition to approximately $800
million in unrestricted cash-on-hand, will be available to fund
ongoing operations. In connection with its Chapter 11 filing,
UAL arranged commitments for $1.5 billion in DIP financing. The
DIP financing is structured as a $300 million facility from Bank
One, and a $1.2 billion loan from a group led by J.P. Morgan
Chase and Citibank, and includes CIT Group and Bank One.

                   Business Operates Smoothly

The company reported that, as expected, it was business as
usual. Flights continued as scheduled and customers continued to
receive reliable and safe service in the U.S. and abroad. In
fact, more than 90 percent of United's flights were on time,
with a 99 percent completion rate.

"These results show that United employees pulled together to
focus on serving our customers to the best of their abilities.
All of us are committed to providing customers with the safe and
reliable service they expect from United. Every day during this
process, we will work to prove to them and our other
stakeholders that United will emerge from this process stronger
and better positioned to meet their needs for the long term,"
said Pete McDonald, EVP - Operations.

As announced yesterday, UAL Corp., United Airlines and 26 direct
and indirect U.S. subsidiaries filed for protection under
Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy
Court for the Northern District of Illinois, Eastern Division.

United Airlines operates nearly 1,800 flights a day on a route
network that spans the globe. News releases and other
information about United Airlines can be found at the company's
Web site at http://www.united.com

United Airlines' 10.67% bonds due 2004 (UAL04USR1) are trading
at about 12 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=UAL04USR1for
real-time bond pricing.


UNITED AIRLINES: The Details of the Bank One $300MM DIP Facility
----------------------------------------------------------------
It is essential to the success of these Chapter 11 cases that
United Airlines immediately obtain access to new post-bankruptcy
financing.  Without it, the Debtors tell Judge Wedoff, United
will be unable to continue to operate or generate income,
purchase necessary goods and services, meet ongoing operational
schedules, or pay ordinary course operating expenses.

United has talked to potential lenders for months now, and
there's not a long line of lenders anxious to lend new money.
United's business plan was heavily criticized by the Air
Transportation Stabilization Board when the company's $1.8
billion loan guarantee application was denied.  Every commercial
lender United's talked to has shared similar criticism.

Long conversations and many through-the-night negotiating
sessions have produced a workable post-bankruptcy financing
plan. Bank One has stepped up to the plate with a first-in,
last-out financing deal that will provide $300 million in fresh
working capital to United.

The Debtors ask the Court to approve that deal . . . and all of
the strings that are attached.  James H.M. Sprayregen, Esq., at
Kirkland & Ellis, makes it clear to Judge Wedoff that United
doesn't have another game plan and this is the best deal United
knows.

Bank One has agreed to provide United a stand-alone $300,000,000
amortizing term loan agreement with that will be secured by,
among other things, revenue from certain Co-Branded Card
Agreements.  Bank One will make the $300 million immediately
available to the Debtors upon the expiration of the ten-day
appeal period (assuming no appeals) following United's
assumption of the Co-Branded Card Agreements

Bank One won't lend the money unless loan is secured by the
revenue stream from the Co-Branded Card Agreements and
conditioned its loan on the Debtors' assuming (1) an Umbrella
Agreement, (2) a Mileage Plus Operating Agreement, (3) a License
Agreement, (4) a Domestic Customer Service Outsourcing
Agreement, and (5) a Side Letter between UAL and UAL Loyalty
Services.

Mr. Sprayregen steps Judge Wedoff through the details of these
five agreements:

                 The Co-Branded Card Agreements

The Debtors formed UAL Loyalty Services in October 2000 with the
intention that ULS would (a) operate as a sales agent for non-
airline partners of the Mileage Plus Program and (b) manage and
develop the Debtors' branded Web sites, including
http://www.united.com

In early 2002, the Debtors determined that the Debtors' primary
customer loyalty and promotion programs should be united in one
organization to reduce administrative duplication and foster a
focused management team to assist in the development of these
important customer programs. Accordingly, in March 2002, through
a series of transactions, the Debtors transferred certain assets
and liabilities relating to numerous loyalty programs from
United to ULS.

UAL, ULS, and Bank One Delaware are parties to the Co-Branded
Card Agreements pursuant to which Bank One Delaware issues co-
branded credit cards with United which cardholders can accrue
mileage credit for travel awards redeemable through the Mileage
Plus program for purchases made with the credit cards.
The Co-Branded Card Agreements are ULS' single largest source of
cash flow. Under the Co-Branded Card Agreements, Bank One
Delaware is required to purchase a designated minimum amount of
miles from ULS on a periodic basis. The designated amount of
miles Bank One Delaware is obligated to purchase from ULS
increases each year for the term of the contract.

The recent amendments to the Co-Branded Card Agreements include,
among other things, additional metrics to gauge the financial
health of United. For example, a specified deterioration of
United's financial health will result in a faster reduction of
guaranteed cash flows to ULS, and a massive deterioration allows
Bank One to terminate the Co-Branded Card Agreements.

                   The Credit Card Agreements

Although ULS is a stand-alone entity, the value of ULS' loyalty
programs is inextricably linked to the Debtors' airline business
because ULS' programs and services (a) support the Debtors'
existing air travel customer base, (b) provide awards redeemable
for credit on the Debtors' airline through the Mileage Plus
program; and (c) generate ticket sales through the Debtors'
branded website. These synergies are particularly apparent with
respect to the Co-Branded Card Agreements. The Co-Branded Card
Agreements not only provide significant revenue for ULS, but
also foster increased air travel on United. Consequently, the
Co-Branded Card Agreements, together with the related Credit
Card Agreements, form an integral piece of the Debtors' business
plan that should remain in place throughout these Chapter 11
proceedings.

The importance and value of the Co-Branded Card Agreements,
however, depends on the existence of the Credit Card Agreements
between United and ULS because the Credit Card Agreements govern
the obligations of ULS and United with respect to the operation,
maintenance, and development of the Debtors' Mileage Plus
program and branded websites, including http://www.united.com

The Umbrella Agreement, for example, contains provisions
governing the Mileage Plus Operating Agreement, that include,
but are not limited to, exclusivity, confidentiality,
warranties, indemnities, termination and dispute resolution.
Pursuant to the Umbrella Agreement, United agrees to continue to
operate its airline business, and ULS agrees to continue
operating the Mileage Plus program, United's branded website and
its other businesses. More specifically, United maintains the
exclusive right to market products and services uniquely
consumed as part of the air travel experience to certain
customers, subject to certain restrictions in the Mileage Plus
Operating Agreement and other Agreements.

In addition, the Mileage Plus Operating Agreement establishes
the relationship between United and ULS in connection with the
Mileage Plus Program. Among other things, the Mileage Plus
Operating Agreement precludes United from using any loyalty
program other than the Mileage Plus program. It also grants
United a license from ULS to issue and sell miles redeemable for
air travel under the Mileage Plus program.

The License Agreement supports the Co-Branded Card Agreements by
providing ULS with irrevocable, nonexclusive, worldwide,
royalty-free licenses to use, among other things, certain United
domain names, trademarks, software, and systems in connection
with the relationships contemplated by the Credit Card
Agreements. In exchange, the License Agreement provides United
with irrevocable, nonexclusive, worldwide, royalty-free licenses
to use certain ULS domain names, software, systems, etc., and
with an irrevocable, near exclusive, worldwide, royalty-free
license to use certain ULS trademarks.

Lastly, the United/ULS Side Letter provides assurances to Bank
One Delaware that UAL, United, ULS, and other named Debtors will
maintain the Umbrella Agreement, Mileage Plus Operating
Agreement, License Agreement, and Domestic Customer Service
Outsourcing Agreement and that the terms of those agreements
will remain in full force and effect. Furthermore, the
United/ULS Side Letter limits the rights of UAL, United, ULS,
and the other named Debtors to make amendments to the
aforementioned agreements.

                 The Relevant Legal Standards

        This is the Only Deal United Has & It's Reasonable

The Debtors propose to obtain financing under the Post-Petition
Financing by providing security interests and liens as set forth
in the attached exhibits pursuant to section 364(c)(1)-(3) of
the Bankruptcy Code. The statutory requirement for obtaining
postpetition credit under Section 364(c)(1), (c)(2), and (c)(3)
of the Bankruptcy Code is a finding that the debtors are "unable
to obtain unsecured credit allowable under section 503(b)(1) of
[the Bankruptcy Code] as an administrative expense." 11 U.S.C.
Sec. 364(c); see In re Ames Dep't Stores, Inc., 115 B.R. 34, 37
n.3 (Bankr. S.D.N.Y. 1990) ("A court . . . may not approve any
credit transaction under subsection (c) unless the debtor
demonstrates that it has reasonably attempted, but failed, to
obtain unsecured credit under sections 364(a) or (b)."); In re
Crouse Group, Inc., 71 B.R. 544, 549 (Bankr. E.D. Pa. 1987)
(same).

To obtain financing pursuant to Section 364(c) of the Bankruptcy
Code, some courts apply a three-part test, requiring the debtor
in possession to show that:

    (a) It could not obtain unsecured credit under section
        364(b) -- i.e., by allowing a lender an administrative
        claim;

    (b) The credit transaction is necessary to preserve the
        assets of the estate; and

    (c) The terms of the credit transaction are fair,
        reasonable, and adequate given the circumstances of the
        debtor-borrower and the proposed lender.

In re Crouse Group, Inc., 71 B.R. at 550. When scrutinizing a
debtors' business decision, such as the type and scope of a DIP
facility, bankruptcy courts routinely defer to the debtor's
judgment, including the decision to borrow money on certain
terms, so long as the decision at issue "involve[d] a business
judgment made in good faith, upon a reasonable basis, and within
the scope of [such debtor's] authority under the [Bankruptcy]
Code." In re Curlew Valley Assocs., 14 B.R. 506, 513-14 (Bankr.
D. Utah 1981); accord Group of Institutional Investors v. Chi.
Mil. St. P. R. Co., 318 U.S. 523, 550 (1943); In re Simasko
Prod. Co., 47 B.R. 444, 449 (D. Colo. 1985) ("Business judgments
should be left to the board room and not to this Court.").

United's Board and management are convinced the Bank One deal is
the only realistic was the company will obtain financing to
survive and that the terms are reasonable under the
circumstances.  The Debtors ask Judge Wedoff to ratify their
business judgment and approve the Bank One financing package.

            Assuming the Agreements Makes Sense Too

The Post-Petition Financing is conditional upon the Debtors'
assuming the Co-Branded Card Agreements and the Credit Card
Agreements.  Under Section 365(a) of the Bankruptcy Code, a
debtor, "subject to the court's approval, may assume or reject
an executory contract or unexpired lease." 11 U.S.C. Sec.
365(a); see Borman's Inc. v. Allied Supermarkets, Inc., 706 F.2d
187, 189 (6th Cir. 1983). An executory contract is a "contract
under which the obligation of both the bankrupt and the other
party to the contract are so far unperformed that the failure of
either to complete performance would constitute a material
breach excusing performance." Sharon Steel Corp. v. Nat'l Fuel
Gas Distrib. Corp., 872 F.2d 36, 39-40 (3d Cir. 1989) (citations
omitted). Here, there can be no dispute that the contracts at
issue are executory agreements, in that failure to perform them
by any party would constitute a material breach. Thus, as
discussed below, the primary legal issue is whether the Debtors'
assumption of the Co-Branded Card Agreements and the Credit Card
Agreements satisfies the "business judgment" standard.

Similar to the Section 364 analysis, the assumption or rejection
of an executory contract by a debtor in possession is subject to
review under the business judgment standard. If such business
judgment has been reasonably exercised, the court should approve
the proposed assumption or rejection. See, e.g., NLRB v.
Bildisco & Bildisco, 465 U.S. 513, 523 (1984); In re Taylor, 913
F.2d 102, 107 (3d Cir. 1990) (the decision to assume or reject
an executory contract or unexpired lease is a matter within the
"business judgment" of the debtor); Sharon Steel, 872 F.2d at
39-40; In re Minges, 602 F.2d 38, 42 (2d Cir. 1979) (same).

Again, United's Board and management are convinced the assuming
the Bank One Agreements is a reasonable exercise of their
business judgment.  The Debtors ask Judge Wedoff to ratify their
business judgment and authorize (but not direct) them to assume
the Bank One Agreements. (United Airlines Bankruptcy News, Issue
No. 1; Bankruptcy Creditors' Service, Inc., 609/392-0900)

             Assuming the Credit Card Agreements

At the First Day Hearing, Judge Wedoff authorized, but did not
direct, the Debtors to assume Credit Card Agreements -- and all
of those contracts' burdens and benefits.  Judge Wedoff's ruling
on this discrete matter is a final order -- provided no appeal
is taken to the U.S. District Court for the Northern District of
Illinois by December 19, 2002.

Managing Director Todd R. Snyder at Rothschild, Inc., provided
Judge Wedoff with a brief description of the Agreements and why
they have value.  Bank One Delaware, formerly known as First USA
Bank, N.A., issues credit cards to consumers that are co-branded
with United's name.  These cards allow cardholders to accrue
mileage credit for travel awards redeemable through the Mileage
Plus program for purchases when they make purchases.  First USA
buys miles from UAL Loyalty Services that are then transferred
to cardholders.  While being careful not to disclose the precise
economic terms, Mr. Snyder confirmed that the First USA
Agreement "provides a significant source of revenue to United."
Bank One is willing to extend more DIP Financing to United, Mr.
Snyder explains, because the Agreements are "valuable and
important" to Bank One and Bank One doesn't want them to
terminate.

When United assumes the Agreements, all of the Debtors'
obligations will be accorded administrative expense priority in
United's chapter 11 cases.  In the event the Debtors default on
their obligations, Bank One Delaware may enforce any of its
contractual rights under the Agreements (including termination)
without further conversation in the Bankruptcy Court.

               Bank One DIP Financing Documentation

James H.M. Sprayregen, Esq., at Kirkland & Ellis, advises Judge
Wedoff that no definitive DIP Financing Agreement with Bank One
exists at this time.  The negotiations moved so swiftly in the
week prior to the Chapter 11 filing that there simply weren't
enough hours available to draft the document.  According to Mr.
Sprayregen, the draft be delivered to the Courthouse within a
matter of days . . . which is plenty of time to allow creditors
and the Court to read, digest and object to the deal.

Mr. Sprayregen outlines the principal terms of the Bank One
Financing:

Borrower:          United Air Lines, Inc.

Guarantors:        UAL Corporation and each debtor-subsidiary

Agent:             Bank One, N.A.

Lenders:           Bank One, N.A., and any other entity
                   acceptable to the Agent

Sole Lead
Arranger:          Bank One Capital Markets, Inc.

Book Manager:      Bank One Capital Markets, Inc.

Facility:          A $300,000,000 amortizing term credit
                   facility payable:

                   Installment Amount        Due Date
                   ------------------        --------
                      $60,000,000          March 1, 2004
                      $60,000,000          April 1, 2004
                      $60,000,000          May 1, 2004
                      $60,000,000          June 1, 2004
                      $60,000,000          July 1, 2004

Maturity Date:     July 1, 2004, at which time all amounts
                   outstanding are due and payable.

Purpose:           For general working capital and other
                   corporate purposes.

Interest Rate:     At the Borrower's option:

                   (A) Bank One's Base Rate plus 3.5%; or

                   (B) LIBOR plus 4.5%;

                   and in the event of a default, the
                   Interest Rate increases by 200 basis
                   points.

Fees:              Bank One will receive:

                   (A) a $15,000,000 Closing Fee;

                   (B) a $1,500,000 Arrangement Fee;

                   (C) a $3,000,000 Commitment Fee;

                   (D) an annual $125,000 Agent's Fee; and

                   (E) daily $750 fees per auditor when
                       requested by the Administrative Agent.

Priority:          All borrowings from Bank One constitute
                   superpriority administrative claims
                   against the Debtors' estates pursuant to
                   11 U.S.C. Sec. 364(c)(1), pari passu with
                   the $1,200,000,000 DIP Facility lenders'
                   claims.

Postpetition
Liens:             The Debtors' obligations to repay amounts
                   borrowed from Bank One are secured,
                   pursuant to 11 U.S.C. Secs. 364(c)(2) and
                   (3), by perfected first-priority liens on:

                   (A) all of the Debtors' right, title and
                       interest in the Co-Branded Credit
                       Marketing Services Agreement;

                   (B) all assets of:

                       * UAL Loyalty Services, Inc.,
                       * Mileage Plus Holdings, Inc.,
                       * Mileage Plus Marketing, Inc., and
                       * Mileage Plus, Inc.,;

                   (C) all call centers, customer lists,
                       systems, programs, software, Mileage
                       Plus tradenames (and any derivations)
                       and trademarks related to the Affinity
                       Programs;

                   and a junior superpriority lien on all
                   otherwise unencumbered assets securing
                   the $1,200,000,000 DIP facility.

Financial
Covenants:         Identical to the Financial Covenants that
                   contained in the $1,200,000,000 DIP
                   Facility.

                    Interim Borrowing Approved

Judge Wedoff is convinced that the Debtors need the money, it
isn't available from another source, and the terms of the Bank
One DIP Facility are fair and reasonable at first glance.

Actual borrowings, Mr. Sprayregen explains, won't happen until:

     * the final documentation is signed and delivered to the
       Bankruptcy Court;

     * the time to appeal assumption of the Co-Branded Marketing
       Agreements expires;

     * the $400,000,000 Term Loan under the $1,200,000,000 DIP
       Facility is funded; and

     * $100,000,000 of the Revolver under the $1,200,000,000 DIP
       Facility is made available to United.

                    Final DIP Financing Hearing

Judge Wedoff will convene a Final Hearing on December 30, 2002,
at 1:30 p.m. in Chicago to consider entry of an order approving
the Bank One DIP Financing on a final basis.  Objections must be
filed with the Court by 4:00 p.m. on December 23, 2002.

David S. Heller, Esq., and Timothy A. Barnes, Esq., at Latham &
Watkins, in Chicago, represent Bank One in United's cases.
(United Airlines Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


UNITED AIRLINES: The Details of the $1.2 Billion DIP Facility
-------------------------------------------------------------
Subject to concomitant approval of the $300 million stand-alone
financing pact with Bank One, conditioned on assumption of the
Co-Branded Card Agreements and secured by the revenue stream
those agreements produce,

     * Bank One,
     * JP Morgan,
     * Citicorp, and
     * CIT Group

on a pro rata basis, agree to extend:

     $500,000,000 of post-bankruptcy financing immediately; and

     $700,000,000 of post-bankruptcy financing if and when
                  United achieves positive cumulative
                  consolidated EBITDAR (earnings before
                  interest, taxes, depreciation, amortization,
                  RENT and restructuring charges) and can report
                  some additional cost reductions.

"As one might expect in view of the size of the DIP loan and the
rate at which the Debtors have been burning cash," James H.M.
Sprayregen, Esq., at Kirkland & Ellis tells Judge Wedoff, "the
DIP lenders have taken numerous steps to protect their
interests."

As is customary with DIP financings, the DIP lenders demand
post-petition liens on the Company's otherwise unencumbered
assets -- all aircraft, spare parts, international route
authorities, and certain airport slots -- as collateral.  But
this collateral package, which was essentially the same package
offered by United to the ATSB, was not enough. Like the ATSB,
the Debtors disclose, the DIP lenders did not believe that the
business plan presented by the Debtors to the ATSB had a
reasonable chance of succeeding. According to the DIP lenders,
regardless of the size of the DIP loan, the Debtors' cost
structure precluded them from achieving profitability. The
Debtors then went back to the DIP lenders with a revised
business plan that contained significant cost reductions. Based
on these estimated reductions, the lenders ultimately agreed to
provide DIP financing for the Debtors. But before doing so, the
lenders insisted on several significant loan covenants.

  * First, if the Debtors fail to achieve the financial
    targets (subject to a relatively small margin of error) in
    the business plan upon which the DIP loans were based, the
    Debtors will breach the covenants and face a possible
    default on the loans.  A default would allow the lenders
    to foreclose on the collateral, which in turn will spell
    the end for the Debtors.  Consequently, the Debtors will
    need to achieve significant cost savings within the first
    few months of the bankruptcy process to avoid defaulting
    on the DIP loans.

  * Second, to be eligible for the second phase of funding
    from the DIP Lenders (i.e., the $700 million), the Debtors
    must achieve positive cumulative consolidated EBITDAR,
    calculated from the beginning of the bankruptcy filing, as
    well as some additional cost savings. Without substantial
    labor savings, the Debtors' current business plan will not
    meet this threshold period.

Without access to the additional financing, the Debtors will not
be able to meet their financial targets and would thus default
on the DIP loans under this scenario as well. In short, absent
significant cost reductions in the next few months, the Debtors
will not be able to access the capital they need to survive.

Importantly, the Debtors' ability to reach agreement with the
lenders on each facility was conditioned upon approval of both
facilities. Bank One was unwilling to make its substantial
initial loan without the significant "back-end" financing of the
second facility.

Specifically, Bank One made it plain that, unless the Debtors
had access to a sufficient amount of capital for the Debtors'
business plan to have a reasonable chance to succeed, Bank One
was unwilling to participate in any financing package. Likewise,
the three additional lenders participating in the $1.2 billion
DIP refused to provide a significant "back-end" loan without
Bank One's substantial initial loan.

Here's the bottom line from United's perspective: Absent near
immediate access to the DIP Facilities, the Debtors will not
survive. Based on their current business plan, the Debtors will
need to begin accessing the DIP Facilities almost immediately
upon their availability. Any delay in the granting of this
Motion
would be devastating. The Debtors' businesses are service
businesses, and their most valuable assets are their customers.
It is crucial to the Debtors' reorganization efforts that the
public maintain confidence in the Debtors' present and future
ability to provide reliable services.  Because of the Debtors'
commencement of these Chapter 11 cases, the Debtors must be
allowed to take immediate, active steps to preserve their
customer base and essential relationships with, among others,
the traveling public, tour operators, cargo and travel agents,
other airlines with which they have agreements, fuel suppliers
and other essential trade creditors, and certain other business
entities. The Debtors must be allowed to continue their
operations in a manner unaffected by the commencement of these
Chapter 11 cases, for even a short disruption will
generate substantial uncertainty and seriously impair the
Debtors' ability to successfully reorganize.

Mr. Sprayregen argues that this Second DIP Facility should be
approved because:

     A. The Debtors Could Not Obtain Unsecured
        Credit Under Section 364(b)

It is clear that a working capital facility of the type and
magnitude needed here could not have been obtained on an
unsecured basis. As detailed above, the Debtors explored
numerous alternatives to bankruptcy. First, the Debtors
significantly lowered expenses and costs by decreasing the
number of daily flights, grounding a number of airplanes,
reducing new aircraft deliveries, closing certain facilities,
canceling or suspending major construction plans, downsizing
workforce, cutting compensation, suspending dividends and
interest payments, eliminating base commissions, changing
corporate structure, and negotiating concessions from vendors
and suppliers. The Debtors then canvassed the private and public
financing markets, unable to obtain financing from twenty-four
different financial institutions.  Next, the Debtors exhausted
every possible one-time source of liquidity.  Lastly, the
Debtors tried, albeit unsuccessfully, to obtain financial help
from the federal government. In short, all efforts to obtain
additional, sustained liquidity were unsuccessful because of the
financial condition of the Debtors. And no member of the
potential lending market was willing to provide funds on
unsecured terms.

The courts have made clear that "[t]he statute imposes no duty
to seek credit from every possible lender before concluding that
such credit is unavailable." Bray v. Shenandoah Fed. Sav. & Loan
Ass'n, 789 F.2d 1085, 1088 (4th Cir. 1986). Rather, a debtor
need only demonstrate "by a good faith effort that credit was
not available without" the protections of Section 364(c) of the
Bankruptcy Code. Id.; see also In re Plabell Rubber Prods.,
Inc., 137 B.R. 897, 900 (Bankr. N.D. Ohio 1992). In a case like
this one, where there are few lenders likely to be able and
willing to extend the necessary credit to the debtor, "it would
be unrealistic and unnecessary to require [the debtor] to
conduct an exhaustive search for financing." In re Sky Valley,
Inc., 100 B.R. 107, 113 (Bankr. N.D. Ga. 1988). Thus, unsecured
credit simply was unavailable to the Debtors.

     B. The DIP Facilities Are Necessary to Preserve
        Assets of the Debtors' Estates

The Debtors need immediate access to the Post-Petition
Financing. Indeed, no party in interest can seriously contend
that the Debtors do not need such access. As with most large
businesses, the Debtors have significant cash needs. Access to
substantial credit is necessary to support the inherently
capital reserve nature of the Debtors' domestic and
international flight operations, purchase inventory, and
services, and to meet the
substantial day-to-day operating costs associated with operating
and distributing goods to their customers. Access to sufficient
cash is therefore critical to the Debtors' survival. In the
absence of immediate access to cash and credit, the Debtors'
suppliers will refuse to sell critical supplies and services to
the Debtors, and the Debtors will be unable to meet current
production and distribution schedules. In turn, many of the
Debtors' otherwise loyal customers are likely to look elsewhere
to purchase the services that the Debtors provide.

The success of these reorganization cases depends on the
confidence of the Debtors' suppliers and customers. If that
confidence were destroyed by, for example, the denial of this
Motion, then the Debtors' operations would likely collapse. In
contrast, once the Post-Petition Financing is approved, the
Debtors are confident that they can stabilize their businesses
and achieve an improved financial performance, thereby
preserving their operations.  In reaching this conclusion, the
Debtors are mindful that suppliers and customers often respond
favorably to approval of a comprehensive debtor in possession
financing. See In re Ames Dep't Stores, Inc., 115 B.R. at 36
("It is given that most successful reorganizations require the
debtor-in-possession to obtain new financing simultaneously with
. . . the commencement of the Chapter 11 case.").

The Debtors cannot wait for the beneficial effects of the Post-
Petition Financing; any substantial delay would have the same
effect as a denial of this Motion. The Debtors' need for access
to the Post-Petition Financing is therefore immediate.

     C. The Terms of the Post-Petition Financing Are
        Fair, Reasonable, and Appropriate

The proposed terms of the Post-Petition Financing are fair,
reasonable, and appropriate in that these terms neither (a) tilt
the conduct of these cases and prejudice the powers and rights
that the Bankruptcy Code confers for the benefit of all
creditors, nor (b) prevent motions by parties in interest from
being decided on their merits. Like the facility approved in
Sky Valley, the purpose of the facilities here is to enable the
Debtors to maintain the value of their estates while formulating
a confirmable plan of reorganization. Accord In re First S. Sav.
Ass'n, 820 F.2d 700, 710-15 (5th Cir. 1987). (United Airlines
Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

                  DIP Financing Documentation

James H.M. Sprayregen, Esq., at Kirkland & Ellis, outlined the
principal terms of this $1,200,000,000 Debtor-in-Possession
Financing Facility at the First Day Hearing:

Borrower:          United Air Lines, Inc.

Guarantors:        UAL Corporation and each debtor-subsidiary

Co-Administrative
Agents:            JPMorgan Chase Bank
                   Citicorp USA, Inc.

Co-Collateral
Agents:            JPMorgan Chase Bank
                   Citicorp USA, Inc.

Lenders:              DIP Lender            Commitment
                      ----------            ----------
                   JPMorgan Chase Bank     $300,000,000
                   Citicorp USA, Inc.      $300,000,000
                   Bank One, N.A.          $300,000,000
                   The CIT Group           $300,000,000

Co-Arrangers:      Bank One, N.A.
                   The CIT Group/Business Credit, Inc.

Joint Lead
Arrangers:         J.P. Morgan Securities, Inc.
                   Salomon Smith Barney Inc.

Joint
Book Managers:     J.P. Morgan Securities, Inc.
                   Salomon Smith Barney Inc.

Facility:          A $1,200,000,000 senior secured
                   superpriority debtor-in-possession
                   facility providing United with access to:

                     $600,000,000 of revolving credit;

                     $100,000,000 to back letters of credit;

                     $100,000,000 that must be reserved for
                                  collateral maintenance and
                                  liquidation expenses and
                                  only advanced in the sole
                                  discretion of the Initial
                                  Lenders; and

                     $400,000,000 in the form of a Term Loan.

Borrowing Base:    Total borrowings under the DIP Facility
                   are limited to 55% of Eligible Collateral
                   as determined by the DIP Lenders in their
                   sole discretion and on aircraft appraisal
                   data provided to the DIP Lenders by
                   Simat, Helliesen & Eichner, Inc.

Availability:      Subject to the limitation imposed by the
                   Borrowing Base, the Lenders make a
                   $400,000,000 Term Loan plus $100,000,000
                   of revolving credit available almost
                   immediately.

                   Stage II access to the next $500,000,000
                   is conditioned on:

                   (a) United reporting positive cumulative
                       EBITDAR measured from December 1, 2002
                       and

                   (b) United delivering an updated Business
                       Plan to the Initial Lenders that:

                       (1) the Lenders find acceptable;

                       (2) is not premised on revenue
                           projections lower than those
                           contained in a December 2, 2002
                           Business Plan delivered to the
                           Initial Lenders; and

                       (3) reflects United has achieved
                           incremental cost savings of no
                           less than $300,000,000 in addition
                           to the aggregate cost savings
                           reflected in the December 2, 2002
                           Business Plan.

Maturity Date:     July 1, 2004

Purpose:           For general working capital and other
                   corporate purposes, but not for the
                   investigation or prosecution of any claims
                   against the DIP Lenders.

Interest Rate:     At the Borrower's option:

                   (A) JPMorgan Chase's Alternate Base Rate
                       plus 3.5%; or

                   (B) LIBOR (subject to a 2% floor) plus
                       4.5%;

                   and in the event of a default, the
                   Interest Rate increases by 200 basis
                   points.

Fees:              (A) All fees described in a [non-public]
                       Fee Letter;

                   (B) An Unused Line Fee payable as a
                       percentage of every dollar available
                       under the Revolving Facility that is
                       NOT borrowed:

                                       If the average amount
                          Applicable   of borrowing under the
                          Percentage   Revolver is less than
                         ----------    ---------------------
                            1.00%         Less than 1/3
                            0.75%         Less than 2/3
                            0.50%         More than 2/3

                   (C) 4.5% annual letter of credit fees
                       based on the total amount of
                       outstanding L/Cs; and

                   (D) Reimbursement of all out-of-pocket
                       expenses, including the DIP Lenders'
                       professionals' fees.

Priority:          All borrowings constitute superpriority
                   administrative claims against the Debtors'
                   estates pursuant to 11 U.S.C. Sec.
                   364(c)(1), pari passu with Bank One's DIP
                   Financing claims.

Postpetition
Liens:             The Debtors' obligations to repay amounts
                   borrowed are secured, pursuant to
                   11 U.S.C. Secs. 364(c)(2) and (3), and
                   subject only to the Carve-Out, by
                   perfected first-priority liens on:

                   (A) all unencumbered aircraft, spare
                       engines, and spare parts inventory;

                   (B) accounts receivable;

                   (C) all Pacific and Atlantic routes;

                   (D) slots at LaGuardia Airport and Reagan
                       National Airport;

                   (E) QEC kits;

                   (F) certain flight simulators;

                   (G) airport gate leaseholds; and

                   (H) trademarks, tradenames, and all other
                       property not subject to an existing or
                       permitted lien or pledged to secure
                       repayment of the Bank One DIP
                       Facility.

Carve-Out:         The DIP Lenders agree, in the event of a
                   default, to a $35,000,000 carve-out from
                   their liens to allow for payment of
                   professionals retained by the Debtors, any
                   Official Committees, and fees imposed by
                   the United States Trustee or the Court
                   Clerk.

CapEx
Covenant:          The Debtors covenant with the DIP Lenders
that
                   they will limit their capital expenditures
                   (including capitalized leases) to:

                   For the Fiscal Quarter Ending    CapEx Limit
                   -----------------------------    -----------
                   March 31, 2003                  $110,000,000
                   June 30, 2003                   $110,000,000
                   September 30, 2003              $116,000,000
                   December 31, 2003               $142,000,000
                   March 31, 2004                  $100,000,000
                   June 30, 2004                   $100,000,000

                   with the understanding that these amounts can
                   be increased by a 50% roll-forward of unused
                   amounts from the previous quarter.

EBIDTAR
Covenant:          The Debtors covenant that they will not
permit
                   EBITDAR -- which means consolidated net
income
                   under GAAP plus depreciation, amortization,
                   non-cash charges, taxes, interest, AIRCRAFT
                   RENT EXPENSE, extraordinary losses, and non-
                   recurring charges or restructuring charges --
                   to fall below:

                                                    Minimum
                   For the Period Beginning       Cumulative
                   December 1, 2002 and ending      EBITDAR
                   ---------------------------    -----------
                   February 28, 2003             ($964,000,000)
                   March 31, 2003                ($881,000,000)
                   April 30, 2003                ($849,000,000)
                   May 31, 2003                  ($738,000,000)
                   June 30, 2003                 ($585,000,000)
                   July 31, 2003                 ($448,000,000)
                   August 31, 2003               ($219,000,000)
                   September 30, 2003             ($98,000,000)
                   October 31, 2003                $46,000,000
                   November 30, 2003              $112,000,000

                                                    Minimum

                   For the Rolling 12-Month       Cumulative
                   Period Ending                    EBITDAR
                   ------------------------       ----------
                   December 31, 2003             $575,000,000
                   January 31, 2004              $901,000,000
                   February 28, 2004           $1,084,000,000
                   March 31, 2004              $1,196,000,000
                   April 30, 2004              $1,297,000,000
                   May 31, 2004                $1,383,000,000

Minimum Cash
Covenant:          The Debtors covenant with the DIP Lenders
                   that they will not permit cash and cash
                   equivalents to fall below $200,000,000
                   at any time.

Operational
Covenants:         The Debtors agree that certain to-be-agreed
                   and to-be-documented operational defaults
                   will constitute immediate events of default
                   that will cause the DIP Facility to
                   terminate.

Assignments:       The DIP Facility contemplates syndication and
                   assignment of the DIP Lenders' commitments in
                   minimum $1,000,000 increments to Assignees
                   acceptable to the Agent for which the Agent
                   will collect a $3,500 fee.

Lender Consents
to Modifications:  Material modifications to the DIP require
                   acceptance by Lenders holding varying
                   percentages of the outstanding Commitments:

                                                 Required
                      Type of Modification      Acceptance
                      --------------------      ----------
                      Release of a material
                      portion of collateral        66-2/3%

                      Modification of the
                      Stage II Borrowing
                      Requirements                   90%

                      Waivers of the
                      Financial Covenants            50%

                      Extensions of interest
                      payment dates, fee
                      reductions, maturity date
                      extensions, changes in
                      priority or a release of
                      substantially all of the
                      collateral                    100%

                    Interim Borrowing Approved

Judge Wedoff is convinced that the Debtors need the money made
available under this financing pact, financing isn't available
from another source, and the terms of DIP Facility are fair and
reasonable at first glance.

Judge Wedoff believes that without continued financing, the
Debtors will be unable to continue the orderly operation of
their businesses, maintain business relationships with vendors,
suppliers and customers, make payroll, make capital
expenditures, and satisfy other working capital needs.  The
financing, Judge Wedoff says, "is vital to the preservation and
maintenance of the going concern values of the Debtors and to a
successful reorganization of the Debtors."

"The terms of the Post-Petition Financing are fair and
reasonable, reflect the Debtors' exercise of prudent business
judgment consistent with their fiduciary duties, and are
supported by reasonably equivalent value and fair
consideration," Judge Wedoff continues.

Accordingly, Judge Wedoff authorizes the Debtors to execute and
deliver definitive DIP Financing documentation, and to borrow up
to $500,000,000 -- $100,000,000 must be held in reserve under
the terms of the Bank One DIP Facility -- from the DIP Lenders
pending a final DIP financing hearing.

                   Final DIP Financing Hearing

Judge Wedoff will convene a Final Hearing on December 30, 2002,
at 1:30 p.m. in Chicago to consider entry of an order approving
the $1,200,000,000 DIP Financing pact on a final basis.
Objections must be filed with the Court by 4:00 p.m. on December
23, 2002.

Robert H. Scheibe, Esq., and Jay A. Teitelbaum, Esq., at Morgan,
Lewis & Bockius LLP, in New York, and Michael B. Soloway, Esq.,
at Kaye Scholer, in Chicago, represent the Co-Administrative
Agents in United's cases.  (United Airlines Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900)


WARNACO GROUP: Asks Court to Approve Esprit Settlement Agreement
----------------------------------------------------------------
The Warnaco Group, Inc., and its debtor-affiliates ask the Court
to approve the Settlement Agreement executed between Authentic
Fitness Corporation and Global Esprit, Inc.

Kelly A. Cornish, Esq., at Sidley Austin Brown & Wood LLP, in
New York, relates that AFC holds the exclusive right in North
America to manufacture, distribute and sell among other things,
swimming goggles under the Speedo trademark.  Particularly, AFC
makes and sells swim goggles under the trademarks Speedo
Hydrospex (SR) and Junior Hydrospex.  Prior to December 1999,
certain styles of goggles AFC sold were manufactured by Global
Esprit for AFC and sold by AFC under the trademarks Speedo
Hydrospex and Speedo Junior Hydrospex.

On December 8, 2000, Global Esprit filed a Civil Action No. CV
00-12915 FMC against AFC in the U.S. District Court for the
Central District of California, Los Angeles Division on grounds
of infringement.  Global Esprit sought the issuance of a
preliminary and permanent injunction against AFC, the payment of
damages and the disgorgement of AFC's profits relating to the
sale of the AFC-Manufactured Goggles.  The Action is stayed by
virtue of the Debtors' Chapter 11 cases.

On December 28, 2001, Global Esprit filed 38 proofs of claim,
numbers 1395 through 1432, one against each of the Debtors, in
an unspecified amount arising out of the Alleged Infringement.
Consequently, Global Esprit commenced an adversary proceeding
against AFC alleging that since the Petition Date, AFC continues
to sell the AFC-Manufactured Goggles, whether or not modified,
which allegedly continue to infringe one or both of the Global
Esprit Patents.  Moreover, Global Esprit sought payment of an
administrative claim for royalties to compensate it for AFC's
alleged continuing infringement of the Global Esprit Patents
during these cases.

AFC denies all of the material allegations contained in the
California Action, the Proofs of Claim, the Adversary
Proceedings and the Request for Payment.  AFC asserts that it
has no liability to Global Esprit with respect to the Alleged
Infringement or otherwise.

Nonetheless, Ms. Cornish points out, the parties have come to
mutual agreement to resolve the disputes between them amicably
by entering into and executing a Settlement Agreement to avoid
the costs and risks of protracted patent infringement
litigation, and without any admission of wrongdoing by any
party.

Under the Settlement Agreement, Ms. Cornish reports:

  (i) AFC will pay an undisclosed Settlement Amount to Global
      Esprit and Global Esprit will withdraw with prejudice the
      California Action, the Adversary Proceeding and the
      Request for Payment;

(ii) AFC and Global Esprit agree that the Proofs of Claim will
      be expunged with prejudice;

(iii) AFC will promptly take all necessary steps to change the
      clip on any AFC Goggles so as not to infringe Global
      Esprit Patents; and

(iv) AFC and Global Esprit will resume their research and
      development relationship and Global Esprit will fulfill
      all of AFC's current orders for non-AFC Manufactured
      Goggles.

Ms. Cornish contends that the Settlement Agreement should be
approved because:

1. Probability of success in litigation

   AFC believes that there is some risk that it may not entirely
   succeed in defending against Global Esprit's claims based on
   these considerations:

   -- the almost identical design of the goggles might be
      decided on a subjected factual determination and is by no
      means certain; and

   -- if patent infringement is determined, the Court may award
      the claimant damages adequate to compensate for the
      infringement, "but in no event less than a reasonable
      royalty for the use made of the invention by the
      infringer, together with interest and costs as fixed by
      the Court."  In addition, Global Esprit is likely to seek
      damages and attorney's fees based on allegations of
      willfulness.  A significant amount of sales of AFC-
      Manufactured Goggles continued after the Petition Date
      which, if awarded, would also be entitled to
      administrative claim status;

2. The complexity of the litigation, the expense, inconvenience
   and delay

   Continuing the litigation would be distracting and require
   extensive time away from work for AFC's witnesses, as well as
   the incurrence of substantial attorneys' fees and expenses.
   Thus, even a favorable trial result would impose extensive
   costs and burdens disproportionate to the benefits in light
   of the settlement reached; and

3. The paramount interests of creditors

   As a result of this dispute, Global Esprit has threatened to
   terminate its supply agreement with AFC immediately and
   cancel current orders for over 500,000 units.  The
   cancellation would be extremely disruptive of AFC's business
   and may have an impact on AFC's relationship and dealings
   with its licensors.  Hence, the settlement will allow the
   Debtors to permanently resolve all disputes relating to the
   Alleged Infringement and for AFC to resume its business
   relationship with Global Esprit.  In addition, it enables the
   Debtors to maintain important relationships with suppliers
   and licensors, avoid business disruption and employee
   activities, and maintain uninterrupted sales. (Warnaco
   Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service,
   Inc., 609/392-0900)


WINSTAR: Trustee Wants to Make Final Payment to Professionals
-------------------------------------------------------------
Winstar Communications, Inc.'s Chapter 7 Trustee Christine
Shubert seeks the Court's authority to:

  -- make a distribution to the professionals holding claims for
     services rendered during the pendency of the Debtors'
     Chapter 11 cases pursuant to the Carve-Out provision of the
     DIP Financing facility; and

  -- settle preference claims against certain Professionals.

Michael G. Menkowitz, Esq., at Fox Rothschild O'Brien & Frankel
LLP, in Wilmington, Delaware, reminds the Court that the Carve-
Out provision in the DIP Financing Order allowed professionals'
claims for services rendered to the Debtors or any statutory
committee during the Chapter 11 cases to be paid ahead of the
DIP Lenders' superpriority claim.  The Carve-Out, as defined in
the DIP Order, specifically provides that:

   ". . . (i) the unpaid fees of the clerk of the Bankruptcy
   Court and of the United States Trustee pursuant to 28 U.S.C.
   1930(a) and (b), and (ii) the aggregate allowed unpaid fees
   and expenses payable under Section 330 and 331 of the
   Bankruptcy Code to professional persons retained pursuant to
   an order of the Court by the Debtors or any statutory
   committee appointed in these Chapter 11 cases (other than
   fees and expenses, if any, of any such professional persons
   incurred, directly or indirectly, in respect of, arising from
   or relating to, the initiation or prosecution of any action
   for preferences, fraudulent conveyances, other avoidance
   power claims or any other claims or causes of action against
   the Agents or the Lenders or with respect to the Post-
   petition Indebtedness or the Prepetition Indebtedness), not
   to exceed the sum of (x) $3,250,000, and (y) the aggregate
   amount of fees and expenses referred to in the immediately
   preceding clause (ii) of this paragraph 11 to the extent such
   fees have been incurred prior to the occurrence of an Event
   of Default but have not been paid (whether or not such fees
   and expenses have been allowed prior to such Event of
   Default)."

Mr. Menkowitz relates that on October 1 and 17, 2002, the
Chapter 7 Trustee sent letters to the professionals believed to
be covered under the Carve-out requesting information in support
of their claims, including payment history with the Debtors, fee
applications and Orders approving their requested compensation.
The Chapter 7 Trustee has determined, based on the information
received and available, that the unpaid professionals' fees
subject to payment under the Carve-Out is $10,200,000.  The
amount is expected to increase since the Chapter 7 Trustee still
has to receive invoices from the Clerk of Court.

The Chapter 7 Trustee intends to pay the professionals after the
professionals establish their firm's financial stability.  The
Chapter 7 Trustee will then make the payment with a 15% holdback
of the Net Proposed Payment, with the holdback to be paid to the
professional after the entry of a Court Order approving the
professional's fee application.  The Chapter 7 Trustee proposes
to make these payments to the professionals:

       Firm                               Net Proposed Payment
       ----                               --------------------
    Akin Gump Strauss Hauer & Feld              $351,220
    Alvarez & Marsal                             374,263
    Arent Fox                                     26,615
    Bayard Firm, The                             129,930
    Cadwalader Wickersham & Taft                 413,183
    Carolina Financial Group LLC                  37,500
    Connolly Bove Lodge                           30,946
    Impala Partners                              265,022
    Kelly Drye & Warren                           17,830
    LeBoeuf Lamb                                  18,302
    McShea Tecce                                   2,175
    Orrick Herrington                              4,508
    Shearman & Sterling                        3,500,000
    United States Trustee                         97,500
    Young Conaway                                682,542
                                             ------------
    Total Net Proposed Payment                $5,951,834

           Professionals With Preferential Payments

Mr. Menkowitz informs the Court that the Chapter 7 Trustee and
her professionals have identified payments made to certain
professionals during the preference period.  Several months ago,
the Chapter 7 Trustee began a dialogue with all of the
professionals claiming a payment under the Carve-Out.  The
purpose of the dialogue was two-fold.  First, the Chapter 7
Trustee reviewed fee applications, motions and orders regarding
the gross amount due to each Carve-Out claimant.  Second, when
the Estate's records indicated a potential preference claim
against a claimant, the Chapter 7 Trustee reviewed additional
materials that enabled her to consider any new value or other
defenses that might reduce the estate's preference claim.

Mr. Menkowitz relates that the Chapter 7 Trustee's negotiations
with the claimants subject to a potential preference claim are
ongoing.  The Chapter 7 Trustee intends to continue to negotiate
and finalize stipulations settling the estates' preference
claims with these firms:

                                              Gross
                               Net Claim    Preference
                               ----------   ----------
    The Blackstone Group       $1,503,070     $105,000
    Swidler Berlin                345,532      100,978
    Willkie Farr & Gallagher      200,938      161,899

With respect to those certain Professionals against whom the
estate has a preference claim, the Trustee seeks the Court's
authority to give effect to the proposed settlements of the
estates' preference claims against certain professionals and
make the Net Proposed Payment to the professionals subject to
the disgorgement of the payments in the event that the parties
to the proposed settlements do not:

    -- memorialize the settlement through a stipulation;

    -- file the stipulation and settlement with the Court; and

    -- obtain Court approval within 60 days of the entry of the
       proposed Order.

The Chapter 7 Trustee intends to pay these professionals after
the professionals establish their professional firm's financial
stability.  By that time, the Chapter 7 Trustee will make the
payment with a 15% holdback of the Net Proposed Payment.  The
holdback will be paid to the professional after entry of an
Order approving the professional's settlement stipulation
pursuant to Rule 9019.

Mr. Menkowitz notes that the proposed settlements:

    -- enable the estates to avoid lengthy, burdensome and
       expensive litigation;

    -- represent a reasonable compromise of the value of the
       claims resolved thereby; and

    -- are well within the range of litigation possibilities.

                         Objections

(1) Lucent Technologies

Rebecca L. Booth, Esq., at Richards Layton & Finger, in
Wilmington, Delaware, argues that there is no legal or factual
basis for the motion.  The Court has not yet made a
determination on the secured creditors' rights in these cases or
made an allocation of the estates' assets among the secured
creditors.

Ms. Booth insists that until and unless the Court has already
determined each creditor's rights, the distribution to the
professionals covered under the Carve-Out will substantially
prejudice the rights of Lucent and the other secured creditors
by depleting the assets available to pay secured creditors.

(2) General Motors Acceptance Corp.

Mark Minuti, Esq., at Saul Ewing LLP, in Wilmington, Delaware,
tells the Court that General Motors Acceptance Corporation will
not object to the Debtors' request so long as appropriate steps
are taken to protect and preserve GMAC's secured claim.

Prior to April 18, 2001, Mr. Minuti informs the Court that GMAC
financed debtor Winstar Wireless, Inc.'s purchase of 52 vehicles
pursuant to a number of contracts.  GMAC holds a valid, first
priority, perfected security interest in each of the Vehicles.
The total fair value of the Vehicles is between $635,000 and
$760,000.  The balance due GMAC under the Installment Sale
Contracts is $484,727 plus interest, costs and fees. (Winstar
Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


WORLDCOM INC: Court Approves KPMG's Engagement as Accountants
-------------------------------------------------------------
Worldcom Inc., and its debtor-affiliates sought and obtained the
Court's authority to employ KPMG LLP as their accountants,
auditors, and tax advisors in these Chapter 11 cases, nunc pro
tunc to July 21, 2002.

The Debtors anticipate that KPMG LLP may render these services:

  A. Accounting and Auditing Services:

     -- Audit and review examinations of the Debtors' financial
        statements as may be required from time to time,
        including the consolidated financial statements of the
        Company for the prior years ended December 31, 2001 and
        2000;

     -- Audits of the financial statements of WorldCom's
        employee benefit plans as may be required from time to
        time;

     -- Research, analysis, and advice with regard to a variety
        of audit, accounting, tax planning, and regulatory
        compliance issues;

     -- Assistance to the Debtors in their development of
        responses to information requests anticipated to be
        received from the Examiner appointed by this Court and
        from various other regulatory and supervisory
        authorities;

     -- Consultation with the Debtors relative to their
        implementation of Chapter 11 accounting procedures as
        required by the Bankruptcy Code and generally accepted
        accounting principles including, but not limited to,
        AICPA Statement of Position 90-7; and

     -- Performance of other accounting and auditing services
        for the Debtors as may be necessary or desirable, to the
        extent permitted under professional standards.

  B. Tax Services

     -- Prepare or review any tax returns, including value added
        tax returns, and other tax compliance filings as may be
        required in the various jurisdictions in which the
        Debtors operate;

     -- Advice and assistance to the Debtors regarding tax
        planning issues, including, without limitation,
        assistance in estimating net operating loss carry-
        forwards;

     -- Assistance in developing and implementing tax
        minimization strategies arising from the Debtors'
        specific request or KPMG LLP's identification of
        possible tax planning opportunities;

     -- Provide advice and assistance with Federal, State, Local
        and Value Added Tax affirmative and refund claims as
        determined by Debtors;

     -- Provide advice and assistance on the tax consequences of
        any proposed plans of reorganization, and in the
        preparation of any Internal Revenue Service ruling
        requests regarding the future tax consequences of
        alternative reorganization structures;

     -- Provide advice and assistance with the IRS Pre-Filing
        Agreement with respect to Internal Revenue Code Sections
        165(g)(3) and 166 and the related integration of
        Debtors' foreign operating companies;

     -- Assistance required regarding existing and future IRS,
        state and local tax examinations;

     -- Expatriate tax services; and

     -- Other tax advice and assistance as may be requested from
        time to time by the Debtors.

WorldCom Chief Financial Officer John S. Dubel explains that the
Debtors have selected KPMG LLP as their accountants, auditors
and tax advisors because of the firm's diverse experience and
extensive knowledge in the fields of accounting, taxation and
bankruptcy.  KPMG LLP has, both in the past and currently,
provided the Debtors with a range of tax services.  Prior to the
Petition Date, KPMG LLP had been retained as external auditors
for the Debtors.

KPMG Partner Farell Malone assures the Court that the Firm is a
"disinterested person" as defined in Section 101(14) of the
Bankruptcy Code.  In addition, KPMG LLP does not hold or
represent any interest adverse to the Debtors' estates that
would impair KPMG LLP's ability to objectively perform
professional services for the Debtors, in accordance with
Section 327.  KPMG LLP has not provided, and will not provide,
professional services to any of the creditors, other parties-in-
interest, or their attorneys with regard to any matter related
to these Chapter 11 cases.

Mr. Malone relates that KPMG LLP's requested compensation for
professional services rendered to the Debtors will be based on
the hours actually expended by each assigned staff member at
each staff member's customary hourly billing rate.  The
customary hourly rates for accounting, auditing and tax advisory
services to be rendered by KPMG LLP are:

                Accounting and Auditing Services

    Partners                                     $500 - 650
    Directors/Senior Managers/Managers            325 - 500
    Senior/Staff Associates                       175 - 325
    Paraprofessionals                             120

                          Tax Services

    Partners/Principals/Managing                 $500 - 750
    Directors                                     375 - 675
    Senior Managers/Managers                      175 - 350
    Senior/Staff Consultants/Paraprofessionals    120

Mr. Malone asserts that KPMG LLP has not received an advance
payment for services to be rendered to the Debtors.  In
addition, KPMG LLP is not a prepetition creditor of the Debtors.
(Worldcom Bankruptcy News, Issue No. 15; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

Worldcom Inc.'s 11.25% bonds due 2007 (WCOM07USR4) are trading
at about 46 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCOM07USR4
for real-time bond pricing.


* Alan D. Scheinkman Joins DelBello, Donnellan as Partner
---------------------------------------------------------
Alan D. Scheinkman of White Plains has joined DelBello,
Donnellan, Weingarten, Tartaglia, Wise & Weiderkehr as a partner
in the White Plains-based law firm.

Mr. Scheinkman will oversee the law firm's Litigation
Department, which will focus on litigation for small and mid-
sized companies, the real estate community, and governmental
entities.

Mr. Scheinkman served as County Attorney from 1998-2001, during
Westchester County Executive Andrew Spano's first term. During
this time, Mr. Scheinkman represented the county on several
notable transactions, including the successful handling of a
spin-off agreement between Westchester County and its former
public hospital into a separate state public benefit
corporation, which is now Westchester Medical Center. He also
led the establishment of a financial framework for the new
Children's Hospital and Trauma Center at the Medical Center.

As Westchester's top attorney, Mr. Scheinkman spearheaded the
securitization of Westchester County's share of the National
Tobacco Settlement, and in 2000, was lead counsel for the County
on the sale of the Indian Point 3 Nuclear Power Plant from the
New York Power Authority to Entergy.

Mr. Scheinkman joins DDWT from Epstein, Becker and Green (EBG),
a New York City-based firm, where he was a partner in the
practice area of Health Law. While at EBG, he successfully
defended the Village of Port Chester in federal litigation and
represented Westchester County in energy transactions and
litigation involving electric rates and construction of a
natural gas pipeline.

Mr. Scheinkman doesn't view his new role as a return to
Westchester, though. "I've never really left," he said. "Two
years ago, I moved to New York City because I thought it was
time to take a break from Westchester." The County then
approached Mr. Scheinkman's firm, in Manhattan to provide legal
services. "No matter where my office was located, my work
developed into a Westchester-based practice. I've formed unique
relationships here, so it made sense to return full-time and
join DDWT," he said.

At DDWT, Mr. Scheinkman is currently representing Westchester
County on the Millennium Pipeline project, as well as an energy-
related rate dispute.

Although he had been away from the County for just 2 years, Mr.
Scheinkman observed a change in Westchester's legal landscape
since his time as Westchester County Attorney. "There's more
litigation, When the economy slows down, people tend to become
more contentious and more adversarial," he said.

Prior to serving as Westchester County Attorney, Mr. Scheinkman
was in private practice with the firm Scheinkman, Fredman and
Kosan LLP. He has taught at several area law schools and is
presently adjunct professor at St. John's University School of
Law in Jamaica, Queens.  Mr. Scheinkman holds a J.D. from St.
John's School of Law, and received his BA from George Washington
University.

Mr. Scheinkman is a well-known legal writer and commentator, and
has addressed a variety of groups including the New York State
Office of Court Administration, the New York State Supreme Court
Justice's Association, the New York State Surrogate's
Association, the American Bar Association and the Association of
the Bar of the City of New York.

DelBello, Donnellan, Tartaglia, Wise and Weiderkehr, LLP, one of
the region's most prominent law firms, integrates legal and
business strategy to serve clients' needs. The firm's core
practice areas include Litigation, Bankruptcy and Creditor's
Rights, Acquisitions and Sales, Environmental issues,
Governmental, Land Use and Zoning Construction, Contracts,
Family Law, Personal Injury, Real Estate, Trusts and Estates,
Banking, Finance, Franchising, Mergers and Acquisitions, and
Technology. In his free time, Mr. Scheinkman plays ice hockey.

He lives in White Plains with his wife, Debbie, who is an active
member of the Westchester community, and a 2002 Hadassah honoree
(Westchester Chapter). They have two children.


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

Issuer               Coupon   Maturity  Bid - Ask  Weekly change
------               ------   --------  ---------  -------------
Federal-Mogul         7.5%    due 2004    14 - 16        -1
Finova Group          7.5%    due 2009  32.5 - 34.5      -1<
/TT>
Freeport-McMoran      7.5%    due 2006    90 - 92        +1
Global Crossing Hldgs9 .5%    due 2009  2.25 - 3.25      -0.25
Globalstar            11.375% due 2004     7 - 8         +0.5
Lucent Technologies   6.45%   due 2029    47 - 49        -1
Polaroid Corporation  6.75%   due 2002     3 - 5         -0.5
Terra Industries      10.5%   due 2005    90 - 92        0
Westpoint Stevens     7.875%  due 2005  22.5 - 24.5      +1.5
Xerox Corporation     8.0%    due 2027    54 - 56        0

Bond pricing, appearing in each Thursday's edition of the TCR,
is provided by DebtTraders in New York. DebtTraders is a
specialist in global high yield securities, providing clients
unparalleled services in the identification, assessment, and
sourcing of attractive high yield debt investments. For more
information on institutional services, contact Scott Johnson at
1-212-247-5300. To view our research and find out about private
client accounts, contact Peter Fitzpatrick at 1-212-247-3800.
Real-time pricing available at http://www.debttraders.com

                          *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices
are obtained by TCR editors from a variety of outside sources
during the prior week we think are reliable.  Those sources may
not, however, be complete or accurate.  The Monday Bond Pricing
table is compiled on the Friday prior to publication.  Prices
reported are not intended to reflect actual trades.  Prices for
actual trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy
or sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies
with insolvent balance sheets whose shares trade higher than $3
per share in public markets.  At first glance, this list may
look like the definitive compilation of stocks that are ideal to
sell short.  Don't be fooled.  Assets, for example, reported at
historical cost net of depreciation may understate the true
value of a firm's assets.  A company may establish reserves on
its balance sheet for liabilities that may never materialize.
The prices at which equity securities trade in public market are
determined by more than a balance sheet solvency test.

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 ***