TCR_Public/021226.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

           Thursday, December 26, 2002, Vol. 6, No. 254    

                          Headlines

ACC ACQUISITION: Sept. 30 Working Capital Deficit Tops $1.6 Bil.
AKORN: John Kapoor Resigns as CEO but Stays as Board Chairman
ALLIANCE PHARMACEUTICAL: Capital Insufficient to Continue Ops.
AMERCO: Executes Term Sheets for New $650-Million Financing
AMERICAN PAD: Case Summary & 20 Largest Unsecured Creditors

AMES DEPARTMENT: Wants Nod to Sell 7 Store Leases to Landlords
ANC RENTAL: Court Extends Cash Collateral Use Until February 16
APPLIED EXTRUSION: Will Restate Fin'l Statements for 1998 - 2001
ARMSTRONG HOLDINGS: AWI Files Disclosure Statement in Wilmington
ARMSTRONG: Summary of AWI's Proposed Disclosure Statement

ARTEMIS ASSOCIATES: Case Summary & 13 Largest Unsec. Creditors
ASIA GLOBAL CROSSING: All Bids to Acquire Assets Due by Jan. 9
AVANTAGE LINK: Raymond Chabot Appointed Receiver to Sell Assets
AVAYA INC: Names Louis J. D'Ambrosio to Lead Services Business
BETHLEHEM STEEL: Court Approves Columbus Restructuring Loan Pact

CELLSTAR CORP: Completes Mandatory Conversion of 5% Senior Notes
CENDANT CORP: SEC Completes Review of 2001 Annual Report
CHESAPEAKE ENERGY: Board Declares Common and Preferred Dividends
CLARENT CORPORATION: Voluntary Chapter 11 Case Summary
CMS ENERGY: Inks Pact to Sell Panhandle Companies for $1.8 Bill.

COMMUNICATION DYNAMICS: Gets Go-Signal to Hire AlixPartners
COVANTA ENERGY: Wins Nod to Renew & Modify AIG Insurance Program
CTC COMMS: Gets Final Court Nod to Use Lenders' Cash Collateral
DANA CORP: Completes Sale of FTE Brake & Clutch Actuation Assets
DLJ MORTGAGE: S&P Junks Class B-2 Note Rating at CCC

EL PASO: Closes Over $3.6-Billion in Sales Transactions in 2002
ENCOMPASS SERVICES: Honoring Obligations to Critical Vendors
ENRON CORP: Court Approves Proposed Overhead Allocation Formula
EOTT ENERGY: Intends to Assume 2 Premium Financing Agreements
EXTREME NETWORKS: S&P Junks $200MM 3.5% Conv. Sub. Note Rating

FEDERAL-MOGUL: Signs-Up DoveBid as Lighting Business Auctioneer
FLOWER FOODS: Fitch Expects Company to be Cash Flow Neutral
FONIX CORP: Limited Capital Raises Going Concern Doubt
FRIEDE GOLDMAN: Court Approves Offshore Division Asset Sale
GENUITY INC: Turning to Lazard Freres for Financial Advice

GLOBAL CROSSING: Wants Go-Signal to Dissolve Two UK Subsidiaries
HAYES LEMMERZ: Plan's Classification and Treatment of Claims
HERCULES INC: Consummates $200-Mill. Credit Facility Refinancing
INTEGRATED TELECOM: Unsecured Claims To Be Paid in Full
INTEGRATED TELECOM: Signs-Up BSI as Claims and Noticing Agent

KEMPER INSURANCE: S&P Hatchets Sub. Debt Rating to BB from BBB+
KMART CORP: Secures Okay to Transfer $2 Million to S.F.P.R. Inc.
LTV: LTV Steel Wins Nod to Pay Covington on Contingency Basis
METROMEDIA INT'L: John Kluge Steps Down from Board of Directors
MIRANT: Reports Year-to-Date Net Loss Topping $227 Million

MUTUAL RISK: Files Proposed Creditors' Arrangement in Bermuda
MYRIENT INC: Delays Filing SEC Form 10-K for Fiscal Year 2002
NATIONAL STEEL: St. Paul Wants to File Late Proof of Claim
NATIONSLINK: S&P Affirms Low-B Ratings on Four Classes of Notes
NATIONSRENT: Asks Court to Deem CIT Master Pact Not True Leases

NRG ENERGY: Contests Rogue Ex-Executives' Involuntary Petition
NSI GLOBAL: Unit Files for Assignment in Bankruptcy in Canada
OM GROUP: Realigns Corporate and Management Structures
OWENS CORNING: Obtains Okay to Restructure Chinese JVs' Debts
PACIFIC GAS: Wants to Procure Power to Meet Year 2003 Shortage

PACIFICARE HEALTH: Selling $10MM of 3% Conv. Subordinated Notes
PEGASUS COMMS: Won't Pay Dividend on 12-3/4% Preferred Shares
PERMAGRAIN PRODUCTS: Voluntary Chapter 11 Case Summary
PERSONALCARE: AM Best Says B+ Rating Unaffected by Asset Sale
PETROLEUM GEO-SERVICES: Deferring Distributions on Preferreds

PHILLIPS-VAN HEUSEN: S&P Affirms BB Rating over CKI Acquisition
PILLOWTEX: Receives Waiver of Compliance from Term Loan Lenders
POLYONE CORP: Selling Majority Stake in Techmer to TPM Holdings
PROVIDIAN FINANCIAL: Completes $750-Million Term Securitization
PUBLIC SERVICE: Enters into New 3-Year $350MM Credit Facility

REGENERATION TECHNOLOGIES: Inks $15-Mill. BofA Credit Agreement
RFS ECUSTA: Delaware Court Fixes February 7 as Claims Bar Date
RIVIERA TOOL: Deloitte & Touche Expresses Going Concern Doubt
ROHN INDUSTRIES: Wins Major Shareholder's Approval of Asset Sale
SCIENTIFIC GAMES: Completes 2002 Debt Workout Plan's Final Phase

SEVEN SEAS PETROLEUM: AMEX Will Delist Shares Effective Tomorrow
SHILOH INDUSTRIES: Reports Improved Results for Fourth Quarter
SMARTSALES INC: DataMirror Intends to Acquire Certain Assets
TELSCAPE INT'L: Trustee Selling Telereunion Assets to Lambco   
TESORO PETROLEUM: Completes Sale of 23 Retail Outlets to Nella

TRICO MARINE: Secures New $50-Million Revolving Credit Facility
TXU: Inks Pact to Provide Energy Services to Rio Grande Electric
UNITED AIRLINES: Appoints Executive Leadership Team
UNITED AIR: Realigns Responsibilities in Revenue-Producing Divs.
UNITED AIRLINES: Hires Rothschild Inc. as Investment Banker

UNITED AUSTRALIA: Castle Harlan Sponsors Plan of Reorganization
US AIRWAYS: Flight Attendants Agree to Cost-Cutting Plan
US AIRWAYS: Machinists Agree to Cost-Cutting Plan
U.S.I. HOLDINGS: Names Thomas O'Neil as VP & Chief Ops. Officer
VIASYSTEMS: Gets Final Nod to Obtain $37.5 Million DIP Financing

VISKASE COMPANIES: Illinois Court Confirms Prepackaged Plan
WARNACO GROUP: Obtains Approval of Speedo Settlement Agreement
WARREN ELECTRIC: Signs-Up Littler Mendelson as Special Counsel
WICKES INC: Commences Exchange Offer for 11-5/8% Senior Notes
WORLDCOM INC: Gets Green Light to Reject 30 Circuits with 4 LECs

WYNDHAM INT'L: Completes Sale Transaction with Sunstone Hotels

* DebtTraders' Real-Time Bond Pricing

                          *********

ACC ACQUISITION: Sept. 30 Working Capital Deficit Tops $1.6 Bil.
----------------------------------------------------------------
ACC Acquisition LLC is a limited liability company equally owned
by AT&T Wireless and Dobson Communications Corporation; it was
originally formed on February 15, 2000, to acquire the
operations of American Cellular Corporation and its
subsidiaries. On February 25, 2000, the Company acquired
American for $2.5 billion, including fees and expenses. American
is a provider of rural and suburban wireless telephone services
in portions of Illinois, Kansas, Kentucky, Michigan, Minnesota,
New York, Ohio, Oklahoma, Pennsylvania, West Virginia and
Wisconsin.

On February 8, 2002, two of the Company's wholly-owned, indirect
subsidiaries completed the sale of Tennessee 4 RSA for a total
purchase price of $202.0 million to Verizon Wireless. Proceeds
from this transaction were primarily used to pay down bank debt.
The Tennessee 4 RSA covered a total population of approximately
290,800 and had a subscriber base of approximately 24,900.

For the three months ended September 30, 2002, the Company's
total operating revenue increased $7.6 million, or 6.6%, to
$124.2 million from $116.6 million for the comparable period in
2001.

For the three months ended September 30, 2002, Company net
income was $4.3 million. Net income increased $34.6 million from
a net loss of $30.3 million for the three months ended September
30, 2001. The increase in net income was primarily attributable
to the increase in operating income, which resulted from
decreases in interest expense and depreciation and amortization
expense.

For the nine months ended September 30, 2002, Company total
operating revenue increased $27.0 million, or 8.6%, to $339.9
million from $312.9 million for the comparable period in 2001.

For the nine months ended September 30, 2002, ACC's net loss was
$659.5 million. The Company's net loss increased $557.7 million
from $101.8 million for the nine months ended September 30,
2001. The increase in  net loss was primarily attributable to
impairment of goodwill and the cumulative effect of change in
accounting principle related to the implementation of SFAS No.
142.

The Company has required, and will likely continue to require,
substantial capital to further develop, expand and upgrade its
wireless systems and those it may acquire. ACC has financed its
operations through cash flows from operating activities, bank
debt, which may not be available to it in the future, the sale
of debt securities and infusions of equity capital from one of
its parents and its affiliates. Neither Dobson Communications
nor AT&T Wireless is obligated to contribute equity capital or
other financing to ACC's subsidiaries or to ACC.

At September 30, 2002, ACC had a working capital deficit of $1.6
billion, a ratio of current assets to current liabilities of
0.08:1 and an unrestricted cash balance of $6.0 million, which
compares to a working capital deficit of $10.5 million, a ratio
of current assets to current liabilities of 0.9:1 and an
unrestricted cash balance of $6.0 million at December 31, 2001.
The working capital deficit and ratio of current assets to
current liabilities have both been negatively impacted as a
result of reclassification of long-term debt to current.

The Company's credit facility includes a financial covenant
requiring that it not exceed a total debt leverage ratio ranging
from 9.25 to 1.00 in the first quarter to 7.75 to 1.00 in the
fourth quarter 2002. At June 30, 2002 and September 30, 2002,
ACC failed to comply with this covenant. It has had and will
continue to have discussions with its lenders regarding the
credit facility. The lenders presently have the right, but not
the obligation, to accelerate the repayment of the entire amount
outstanding under the credit facility. Acceleration under the
credit facility would allow the holders of American's Senior
Subordinated Notes to declare the principal and interest of the
Senior Subordinated Notes immediately due and payable. The
Company would then be required to either refinance the debt or
repay the amounts due. If this were to occur, the Company would
attempt to renegotiate the debt with the holders to provide,
among other things, for an extended repayment term. However, ACC
can provide no assurance that it would be able to renegotiate
the debt under these conditions or meet its obligation under the
accelerated repayment terms. Therefore, as of June 30, 2002 and
as of September 30, 2002, the Company classified all of its
long-term debt as current. Unless such non-compliance is
resolved, there continues to be substantial doubt about ACC's
ability to continue as a going concern, as expressed in the
independent auditors report on the Company's 2001 financial
statements. Also as a result of its non-compliance, subsequent
to September 30, 2002, all borrowings under the credit facility
are only available based on prime rate, which will increase the
Company's borrowing rate in the future.


AKORN: John Kapoor Resigns as CEO but Stays as Board Chairman
-------------------------------------------------------------
Akorn, Inc., announced that Dr. John N. Kapoor has submitted his
resignation as Chief Executive Officer of the Company effective
December 18, 2002.  Dr. Kapoor, who will continue as Chairman of
the Board of Directors, had served as CEO of Akorn since March
2001.

Mr. Art Przybyl, President and Chief Operating Officer of Akorn,
stated, "The Company greatly appreciates the many contributions
that Dr. Kapoor has made to the Company as CEO, and looks
forward to continuing to work closely with Dr. Kapoor as we
restructure and rebuild the Company for the future."

In September of this year, as part of the Forbearance Agreement
entered into by the Company with its Senior Lenders, the Company
retained the firm of AEG Partners, LLC to assist in the
development and execution of a restructuring plan for the
Company's financial obligations and to oversee the Company's
day-to-day operations. In executing these responsibilities, the
Consultant works with the Governance Committee of the Board of
Directors, which is composed of two of the Company's independent
directors. In light of the role being played by the Consultant,
Dr. Kapoor believed it was the appropriate time to step away
from the day-to-day operations of the Company. The Company has
no immediate plans to fill the vacancy left by Dr. Kapoor's
resignation.

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


ALLIANCE PHARMACEUTICAL: Capital Insufficient to Continue Ops.
--------------------------------------------------------------
Since commencing operations in 1983, Alliance Pharmaceutical
Company has applied substantially all of its resources to
research and development programs and to clinical trials. The
Company has incurred losses since inception and, as of
September 30, 2002, has an accumulated deficit of $477.5
million. The Company expects to incur significant losses over at
least the next few years as the Company continues its research
and product development efforts and attempts to commercialize
its products.

The Company's revenues have come primarily from collaborations
with corporate partners, including research and development and
milestone payments. The Company's expenses have consisted
primarily of research and development costs and administrative
costs. To date, the Company's revenues from the sale of products
have not been significant. The Company believes its future
operating results may be subject to quarterly fluctuations due
to a variety of factors, including the timing of future
collaborations and the achievement of milestones under
collaborative agreements, whether and when new products are
successfully developed and introduced by the Company or its
competitors, and market acceptance of products under
development.

Alliance Pharmaceutical believes it lacks sufficient working
capital to fund operations for the entire fiscal year ending
June 30, 2003 and cannot fund its current obligations.
Therefore, substantial additional capital resources will be
required to fund the ongoing operations related to the Company's
research, development, manufacturing and business development
activities. The Company's current financial condition raises
substantial doubt about its ability to continue as a going
concern.

Management believes there are a number of potential alternatives
available to meet the continuing capital requirements such as
public or private financings or collaborative agreements. In
September, October and November 2002 the Company received a
total of $1.1 million through the issuance of 8% Convertible
Secured Promissory Notes to institutional investors. The Company
is negotiating the issuance of comparable notes of up to $1.9
million to provide additional funding for operations. An
Imagent-related financing is also being negotiated, however
there can be no assurance that either of these financing
arrangements will be consummated in the necessary time frames
needed for continuing operations or on terms favorable to the
Company.

On October 18, 2002, Alliance's common stock was delisted from
the NASDAQ National Market for failure to meet the National
Market continued listing requirements. The Company's common
stock is now trading on NASDAQ's Over-the-Counter Bulletin Board
under the symbol ALLP.OB.


AMERCO: Executes Term Sheets for New $650-Million Financing
-----------------------------------------------------------
AMERCO (Nasdaq: UHAL), the parent company for U-Haul
International, Inc., has received proposals and has executed
term sheets with two major financial institutions for up to $650
million in connection with the Company's planned debt
restructuring. "We have entered the standard contract for due
diligence and will continue to work expeditiously to meet the
objectives of the company," said Joe Shoen, president and
chairman of AMERCO.

This financing is the keystone in AMERCO's overall
recapitalization, which began on October 15, 2002. The Company's
bank group has already entered into a standstill agreement
during the pendency of the new financing. Standstill agreements
with other lenders to the Company are being negotiated and are
expected to be in place as part of the total restructuring
picture.

The Company is working constructively towards finalizing a
standstill agreement with the members of the ad hoc committee of
bondholders. This committee is comprised of holders of, among
other bonds, the $100 million in [BBATS] that matured on
October 15, 2002. Under the standstill agreement, it is
anticipated that bondholders will agree not to take any action
with respect to the Company's nonpayment of the bonds for a
period of time while the Company completes its refinancing. The
Company is also in the final stages of completing a standstill
agreement with certain other real estate lenders.

"Under the guidance of Crossroads LLC, a nationally recognized
restructuring firm, we are making significant progress in
restructuring the Company's balance sheet," said Joe Shoen. "Not
all creditors are on board yet, but we are pleased to report
this progress and hope that the others will soon come along."
AMERCO anticipates that the restructuring, including the new
financing will be in place by the end of the Company's fiscal
year on March 31, 2003.

AMERCO is the parent company of U-Haul International, Inc.,
Republic Western Insurance Company, Oxford Life Insurance
Company and Amerco Real Estate Company. U-Haul is the largest
do-it-yourself moving and storage operator in North America.

For more information about AMERCO, visit http://www.uhaul.com


AMERICAN PAD: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: American Pad & Paper, LLC
        3000 Plano Parkway
        Plano, Texas 75074

Bankruptcy Case No.: 02-46551

Type of Business: Manufacturer and distributor of writing pads,
                  filing supplies, retail envelopes and
                  specialty papers

Chapter 11 Petition Date: December 20, 2002

Court: Eastern District of Texas (Sherman)

Judge: Donald R. Sharp

Debtors' Counsel: Deirdre B. Ruckman, Esq.
                  Gardere & Wynne, L.L.P.
                  3000 Thanksgiving Tower
                  1601 Elm Street
                  Dallas, TX 75201
                  Tel: (214) 999-3000

Estimated Assets: $10 to $50 Million

Estimated Debts: $50 to $100 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Greenwich Insurance         Unsecured Loan         $10,500,000  
One Exchange Place
Suite 501
Jersey City, NJ 07302

Actrade Capital, Inc.       Unsecured Loan          $8,431,982
200 Cottontail Lane    
NJ 08874

International Paper Co.     Trade Debt              $2,082,143
PO Box 676565
Dallas, TX 75267-6565

Strategic Paper Group LLC   Trade Debt                $912,968

Mafcote Industries, Inc.    Trade Debt                $711,555
PO Box 5646
Hartford, CT 06102

Bell Packaging Corp.        Trade Debt                $649,570
c/o Pratt Industries
PO Box 406882

Appleton Papers, Inc.       Trade debt                $539,078
PO Box 359
Appleton, WI 54912

Chapco Carton Co.           Trade Debt                $381,951
Dept. 77-2962
Hicago, IL 60678-2062

Vanguard Tool & Mfg. Co.    Trade Debt                $357,974
Inc.
8338 Utica Avenue
Rancho Cucamonga, CA 91730

Lafayette Steel Sales       Trade Debt                $311,962
PO Box 4337
2407 N. 9th Street
Lafayette, IN 47903-4337

Durango-Georgia             Trade Debt                $309,191
Drawer CS 198106
Atlanta, GA 30384-8106

Franklin Boxboard Corp.     Trade Debt                $249,251
Et al

Mid-Indiana                 Trade Debt                $246,058
Transportation    

Dupont, E.I. De Nemoura &   Trade Debt                $231,293
Co.

Kruger, Inc.                Trade Debt                $202,123

J.J. Collins                Trade Debt                $200,541

Kingery Printing            Trade Debt                $183,304

Creative Printing           Trade Debt                $176,566

Wausau Papers               Trade Debt                $157,908    

Premium Funding Associated  Unsecured Loan            $119,642


AMES DEPARTMENT: Wants Nod to Sell 7 Store Leases to Landlords
--------------------------------------------------------------
During the wind-down process of their operations, Ames
Department Stores, Inc., and its debtor-affiliates discussed
with various landlords the consensual disposition of their
leases, their obligations under each of the leases, and all
of the claims that the landlords assert against them.
Subsequently, the negotiations concluded in separate buy-out
agreements with seven landlords:

    Landlord                  Store No.   Location
    --------                  ---------   --------
    Javit Asset Partners         736      Vernon, CT
    Big Y Trust                  215      East Longmeadow, MA
    Pinewood Realty Trust        264      Great Barrington, MA
    Preferred Merchant Hood      439      Derry, NH
    Chester Mall, LLC            706      Chester, NY
    Burr Plaza Limited           732      Manchester, CT
    Mansfield-Eastbrook          734      Willimantic, CT

Pursuant to the agreements, the parties assent that the Debtors
will sell the leases to the landlords, while the landlords will
waive all of their claims against the Debtors.  The salient
terms of the purchase agreement are:

A. Purchase Price:

   The landlords agree to pay for each store:

                  Store No.   Purchase Price
                  ---------   --------------
                      736         $735,741
                      215        1,750,000
                      264          850,000
                      439          100,000
                      706          200,000
                      732           90,000
                      734          675,000

     (i) The purchase price for Store No. 736 consists of
         $725,000 cash plus $10,741 credit bid of all monetary
         defaults under the Vernon lease; and

    (ii) The purchase price for Store No. 706 will be deducted
         by any unpaid postpetition rent, additional rent and
         costs Chester Mall incurred for the repair of the store
         ductwork caused by the removal of a mezzanine from the
         Chester Mall store, if not already paid.  The amount
         will also be deducted by the costs Chester Mall
         incurred for the removal of storage trailers and trash,
         if not done by Ames.

B. Termination of Lease; Delivery of Premises

   -- The Debtors and Javit agree to execute a short form of
      lease termination agreement in recordable form.  The
      Debtors will deliver the Vernon premises broom clean and
      otherwise in the condition required by the lease;

   -- Chester Mall also requires the Debtors to surrender the
      premises vacant and in broom clean condition;

   -- the Debtors and Big Y and Pinewood decide that the lease
      will be deemed rejected the date the Debtors surrender and
      deliver possession of the Longmeadow Store to Big Y and
      the Great Barrington Store to Pinewood; and

   -- the Willimantic store lease will also be deemed rejected
      when the Debtors surrender possession of the premises in a
      broom-swept condition.

C. Releases and Waiver of Claims

   Upon the termination of the leases, the landlords will be
   deemed to waive any and all filed or asserted claims they may
   have against the Debtors under or relating to the leases and
   any defaults, monetary arrears, and all maintenance or repair
   obligations of the Debtors under the leases.

   (a) Store No. 736

       The lease termination agreement between the Debtors and
       Javit, is subject to the Debtors' responsibility to pay
       the costs of removing any property that has been
       abandoned at the premises.  Javit will also waive any
       claims against the Debtors and their estate for rejection
       and lease termination damages.

       Javit will also hold the Debtors responsible for, and at
       closing will pay, all obligations of the tenant under the
       lease from the Petition Date through the date of closing;

   (b) Store No. 215

       On March 27, 2002, Big Y filed these proofs of claim:

       Claim No.        Amount   Nature of Claim
       ---------        ------   ---------------
          5220         $16,121   prepetition base rent
          5221         130,435   prepetition taxes & CAM charges
          5215    unliquidated   potential rejection damages

       To reflect Big Y's waiver of its claims, its will be
       reduced to, or expunged as of the Termination Date:

       Claim No.        Amount
       ---------        ------
          5220         $12,565
          5221          54,212
          5215        expunged

   (c) Store No. 264

       On March 27, Pinewood filed these proofs of claim:

       Claim No.        Amount   Nature of Claim
       ---------        ------   ---------------
          5214    unliquidated   potential rejection damages
          5218          15,731   prepetition taxes & CAM charges
          5219           9,545   prepetition rent

       All of Pinewood's claims will be expunged; and

   (d) Store No. 439

       The Debtors have scheduled Preferred Merchant Hood as
       having a $6,313 general unsecured claim for the
       prepetition rent due and owing under the Derry lease.  
       The claims, however, is not contingent, unliquidated or
       disputed.  Preferred Merchant Hood has not filed a claim
       against the Debtors relating to the lease or the Derry
       store.  Nonetheless, Preferred Merchant Hood agrees to
       waive any claim it may have against the estate;

   (e) Store No. 706

       Chester Mall requires the Debtors to satisfy their
       remaining postpetition rent and additional rent
       obligations through November 30, 2002, by a credit
       against the $200,000 Purchase Price at the closing.  
       However, Chester Mall will not collect additional rents
       for December 2002.  Both parties, nonetheless, reserve
       all claims that they may have, independent of, the
       agreement, for indemnification to the extent of any claim
       for damages asserted against the other by any third party
       relating to the Debtors' occupancy and operation of the
       Chester Store;

   (f) Store No. 732

       Burr Plaza waives any and all scheduled, filed or
       asserted claims it may have against the Debtors under or
       relating to the lease or the Manchester Store.  Any filed
       claims will be subsequently expunged.  However, both Burr
       Plaza and the Debtors reserve all claims that each may
       have, independent of, the agreement, for indemnification
       against the other to the extent of any claim for damages
       asserted against the other by any third party relating to
       the Debtors' occupancy and operation of the Manchester
       Store;

   (g) Store No. 734

       On March 19, 2002, Mansfield filed these proofs of Claim:

       Claim No.        Amount   Nature of Claim
       ---------        ------   ----------------
          3533         $65,239   prepetition base rent, CAM &
                                 real estate tax escrow
                                 deficiencies

          3534          65,239   guaranty obligation

       On the termination date, the Mansfield claims will be
       deemed expunged.  Mansfield also waives any and all
       claims for defaults, monetary arrears, and all
       maintenance or repair obligations of the Debtors under
       the lease, including, the claim for:

               Misc. Obligations         Amount
               -----------------         ------
               rent arrears              $65,239
               repair of roof            350,000
               repair of HVAC system     200,000

       Nevertheless, both parties reserve all claims that they
       may have, independent of, their agreements, for
       indemnification against the other to the extent of any
       claim for damages asserted against the other party by any
       third party relating to the Debtors' occupancy and
       operation of the Willimantic Store.

Consequently, the Debtors presented the agreements to Judge
Gerber and, after some deliberation, obtained his approval.

Ames Senior Vice President and General Counsel, David H. Lissy,
Esq., asserts that the Debtors' decision to sell the leases is
warranted.  According to Mr. Lissy, the Debtors' interests in
their real estate assets are collectively among the most
valuable assets of the estates.  Maximizing the value of these
assets therefore is of paramount importance to the Debtors,
their creditors, and their estates.

As a result of the Debtors' decision to wind down their
business, Mr. Lissy maintains that any recovery to the creditors
will primarily be from the proceeds of the sale of the assets.  
In reaching the conclusion to sell the real estate assets, the
Debtors and their advisors have determined, among other things,
that the landlords' offers represent an economically
advantageous means of relieving themselves of an unnecessary
administrative burden.  The overall value to be obtained by the
Debtors, which includes cash purchase plus the waiver of claims,
represents a significant recovery for the benefit of the
estates. (AMES Bankruptcy News, Issue No. 30; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


ANC RENTAL: Court Extends Cash Collateral Use Until February 16
---------------------------------------------------------------
Judge Mary F. Walrath authorizes ANC Rental Corporation and its
debtor-affiliates to continue to use their lender's cash
collateral through February 16, 2003, on the same terms and
conditions set forth in previous cash collateral orders. (ANC
Rental Bankruptcy News, Issue No. 24; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


APPLIED EXTRUSION: Will Restate Fin'l Statements for 1998 - 2001
----------------------------------------------------------------
Applied Extrusion Technologies, Inc., (NASDAQ NMS: AETC) will
restate its financial statements for fiscal years 1998 through
2001 and the first three fiscal quarters of fiscal 2002. The
financial impact of the restatement is due primarily to the
accounting for three sale-leaseback transactions and the 1998
restructuring. In addition to these adjustments, additional
items will have to be restated in the interim financial
statements for fiscal 2002. The Company anticipates that the
five-year cumulative effect of all of these adjustments from
1998 through the end of fiscal 2002 (including the fourth-
quarter impact of these items) will decrease retained earnings
by approximately $18,000,000 to $20,000,000. None of the
adjustments will have an impact on the Company's cash position
or increase obligations requiring a future use of cash.

The Company will reflect the restated periods in its Annual
Report for the current year and will file amended Form 10-Qs for
the first three quarters of fiscal 2002. As a result of the
foregoing, the full year 2002 loss will be significantly greater
than earlier expectations.

All of the aforementioned information and adjustments are
approximate and subject to changes, which could be significant.
The Company's auditors have not yet completed their audit work,
and the Company's management and the Audit Committee of its
Board of Directors are involved in bringing the Company's year-
end review to conclusion. Upon completion of their review and
finalization of the financial statements, the Company will
schedule a conference call to discuss the events of fiscal year
2002 and the restatement.

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

                         *    *    *

As reported in Troubled Company Reporter's October 11, 2002
edition, Standard & Poor's affirmed its single-'B' corporate
credit rating on Applied Extrusion Technologies Inc., and
removed the rating from CreditWatch, where it was placed on
July 8, 2002. The outlook is now negative.

Peabody, Mass.-based Applied Extrusion is the leading oriented
polypropylene films producer in North America, with total debt
outstanding of $278 million as at June 30, 2002.

"The removal of the rating from CreditWatch follows the
company's announcement that it has concluded a review of its
strategic options, which indicates that the company will not be
sold at this time," said Standard & Poor's credit analyst Liley
Mehta. Applied Extrusion had hired a financial advisor in July
2002 to evaluate options to maximize shareholder value.

The rating reflects the company's below-average business risk
profile, very aggressive debt leverage, and limited financial
flexibility. The company enjoys a leading share of the OPP
market and benefits from a low-cost position.


ARMSTRONG HOLDINGS: AWI Files Disclosure Statement in Wilmington
----------------------------------------------------------------
Armstrong World Industries, Inc., (OTC Bulletin Board: ACKHQ)
has filed a proposed Disclosure Statement for its Chapter 11
Plan of Reorganization with the U.S. Bankruptcy Court in
Wilmington, Delaware.

The Court must approve the proposed Disclosure Statement, which
provides additional details to the POR, before AWI can solicit
votes on its POR. The POR was filed with the Court on
November 4, 2002, with the support of the asbestos personal
injury claimants' committee, the representative for future
asbestos personal injury claimants and the unsecured creditors'
committee. The POR will only become effective after a vote of
various classes of creditors and with the approval of the Court.
The Court has not yet scheduled a hearing on the proposed
Disclosure Statement.

The proposed Disclosure Statement, along with AWI's POR and
related press releases, is available at
http://www.armstrongplan.com In the proposed Disclosure  
Statement, AWI estimates that, based upon an assumed effective
date of the POR of July 1, 2003, the total value of
consideration to be distributed to the asbestos personal injury
trust, other than the insurance asset, will be approximately
$2.1 billion, and the total value of consideration to be
distributed to holders of allowed unsecured claims (other than
convenience claims) will be approximately $1.1 billion. Based
upon the estimated value of the POR consideration and AWI's
estimate that allowed unsecured claims (other than convenience
claims) will total approximately $1.7 billion, AWI estimates
that holders of allowed unsecured claims (other than convenience
claims) will receive a recovery having a value equal to
approximately 66.5% of their allowed claims. AWI's estimates of
value and potential recoveries are based upon a number of
assumptions, which are set forth more fully in the proposed
Disclosure Statement.

Armstrong World Industries, Inc., a subsidiary of Armstrong
Holdings, Inc., is a global leader in the design and manufacture
of floors, ceilings and cabinets. In 2001, Armstrong's net sales
totaled more than $3 billion. Founded in 1860, Armstrong has
approximately 16,000 employees worldwide. More information about
Armstrong is available on the Internet at
http://www.armstrong.com

Armstrong Holdings Inc.'s 9.0% bonds due 2004 (ACK04USR1) are
trading at about 58 cents-on-the-dollar, DebtTraders says. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ACK04USR1for  
real-time bond pricing.


ARMSTRONG: Summary of AWI's Proposed Disclosure Statement
---------------------------------------------------------
Armstrong World Industries, Inc., delivered a Proposed
Disclosure Statement -- with a number of blanks to be filled in
and with tons of exhibits and appendixes to follow -- in support
of its previously filed Plan of Reorganization.

     Value of Consideration to Be Distributed under the Plan

In the proposed Disclosure Statement, AWI estimates that, based
upon an assumed Effective Date of the Plan of July 1, 2003, the
total value of consideration to be distributed to the Asbestos
PI Trust, other than the Insurance Asset, will be approximately
$2.1 billion.  The total value of consideration to be
distributed to holders of allowed unsecured claims (other than
convenience claims) will be approximately $1.1 billion.

Based on the estimated value of the Plan consideration and AWI's
estimate that allowed unsecured claims (other than convenience
claims) will total approximately $1.7 billion, AWI estimates
that holders of allowed unsecured claims (other than convenience
claims) will receive a recovery having a value equal to
approximately 66.5% of their allowed claims.

In estimating the value of distributions under the Plan, AWI
assumes that:

       (i) cash has a value equal to its face amount,

      (ii) the New Notes have a value equal to their face
           amount,

     (iii) the New Warrants have an aggregate value of
           $40-50 million, or $11.10 to $13.90 per New
           Warrant (with a midpoint of $12.50 per warrant), and

      (iv) the New Common Stock will have an aggregate value of
           approximately $2.030 billion, or $30.00 a share.

                   $300 Million Exit Facility

AWI expects to enter into a $300 million syndicated bank credit
facility at the time of emergence to provide for liquidity
through short-term borrowings for working capital and other
general corporate purposes and to permit the issuance of letters
of credit.  This credit facility will include covenants and
terms and conditions that are expected to be similar to
comparably rated industrial companies obtaining similarly
structured credit facilities at that time.

The Debtors expect that "the syndicated credit facility will be
unsecured, multi-year in maturity, and permit borrowings in both
U.S. Dollars and Euros, priced at applicable margins over the
lenders' cost of funds.  No significant borrowings are expected
immediately post-emergence, but AWI will use the facility to
replace the Letters of Credit issued under the DIP Credit
Facility."

The Debtors indicate that their yet-to-be filed financial
projections assume that AWI will draw $49.7 million under the
credit facility to increase Available Cash to $350 million on
the Effective Date, and those borrowings will be repaid by the
end of 2003.

                     Restructuring of AWI

The major points of AWI's restructuring outlined in the Proposed
Disclosure Statement are:

       * All asbestos-related liabilities are to be assumed
         by one of two Trusts.

       * The Trusts will be funded and unsecured creditors
         paid as described in the Plan.

       * Armstrong Holdings, AWI's present parent and a
         non-debtor, will be dissolved and liquidated.

       * Reorganized AWI will become a holding company.
         Its business operations will be divided in a
         yet-to-be described manner, into 4 entities.
         One or more of these entities, referred to now
         Only as AWI Progeny, is to be a limited liability
         entity.  All of these will be Pennsylvania
         corporations.

       * Reorganized AWI and its Progeny will be protected
         from future asbestos-related claims through a
         channeling injunction.

The Asbestos PI Permanent Channeling Injunction -- barring the
assertion of "future" Asbestos Personal Injury Claims against
AWI and the other PI Protected Parties -- is "the cornerstone of
the Plan" the Proposed Disclosure Statement emphasizes.

                Listing of the New Common Stock

As soon as practicable after the Effective Date, Reorganized AWI
will apply to have its common stock listed on a national
securities exchange or quoted on a national interdealer
quotation system and will use its best efforts to obtain and
maintain such listing or quotation.

               Dissolution of Armstrong Holdings

Armstrong Holdings, Inc., is the parent company of Armstrong
World Industries, Inc.  Holdings became the publicly held
holding company of AWI on May 1, 2000.  Stock certificates that
formerly represented shares of AWI were automatically converted
into certificates representing shares of Holdings.

Holdings has no significant assets or operations apart from its
equity interest in AWI. In connection with the implementation of
AWI's Plan, the dissolution and winding up of Holdings will be
proposed for approval by Holdings' shareholders.

If Holdings' shareholders approve the Holdings Plan of
Liquidation before the first anniversary of the Effective Date,
the New Warrants will be delivered to Holdings for distribution
pursuant to the Holdings Plan of Liquidation.

                     AWI's Plan of Division

On or as soon as practicable after the Effective Date, AWI
intends to effect a division under a the Plan of Division
through which Reorganized AWI will divide into four or more
Entities organized under the laws of Pennsylvania and/or of
other jurisdictions permitting such a division, with Reorganized
AWI surviving as the parent holding company of all the other
entities.

The actions to be taken by Reorganized AWI in furtherance of the
Plan of Division will include:

    * Certain wholly owned, non-operating subsidiaries of AWI
      will merge with and into AWI on or as soon as practicable
      after the Effective Date.

    * AWI will file the Amended and Restated Articles of
      Incorporation with the Secretary of State for the
      Commonwealth of Pennsylvania.

    * AWI will divide into the AWI Progeny.

However, AWI has not yet identified these Progeny, nor described
the business purposes and functions for each.

All assets and certain Administrative Expenses, executory
agreements and unexpired leases to be assumed by Reorganized AWI
under the Plan, and all post-petition AWI contracts will be
allocated among or in common with the AWI Progeny through the
Plan of Division in accordance with the terms of the Plan.

Following the Division, each employee of AWI as of the Effective
Date will become an employee of one of the AWI Progeny.  One or
more of the AWI Progeny will convert from a corporation to a
limited liability company.

               Corporate Reorganization Actions

On or as soon as practicable after the Effective Date,
Reorganized AWI will, without further action under applicable
law, regulation, order, or rule, including any action by the
stockholders or directors of AWI or Reorganized AWI, carry out
these restructurings:

    * Reorganized AWI's businesses will be reorganized under
      the Plan of Division.

    * The existing AWI Common Stock will be cancelled.

    * The New Note Indenture will become effective, and the
      New Common Stock, New Warrants, and the New Notes will be
      issued.

    * Reorganized AWI and/or the AWI Progeny will enter into
      a working capital, or Exit, facility.

    * Reorganized AWI will enter into the New Management
      Incentive Plan.

For purposes of compliance with the Internal Revenue Code, AWI
will seek to include in the Confirmation Order a finding that a
majority of the votes cast by Creditors in Classes 6 and 7 of
the Plan will constitute a vote of the shareholders of
Reorganized AWI on a New Management Incentive Plan.  A majority
of the votes cast by the holders of Asbestos Personal Injury
Claims will determine the vote of the Asbestos PI Trust for
these purposes.

                     The Asbestos PI Trust

AWI has repeatedly ascribed the necessity of its chapter 11
filing to the numbers and amounts of claims and litigation
related to asbestos exposures.  The creation and funding of two
asbestos-related Trusts are, the Debtors say, the "cornerstone"
of AWI's Plan and Disclosure Statement.

Effective as of the later of:

       (i) the date the Asbestos PI Trustees have executed
           the Asbestos PI Trust Agreement, and

      (ii) the Effective Date of the Plan,

the Asbestos PI Trust will be created. The purposes of the
Asbestos PI Trust will be to:

     (i) assume the liabilities of AWI and its predecessors and
         successors in interest for all Asbestos Personal Injury
         Claims,

    (ii) pursue recoveries from the Asbestos PI Trust Insurance
         Asset,

   (iii) direct the processing, liquidation, and payment of all
         Asbestos Personal Injury Claims in accordance with the
         Plan, the Asbestos PI Trust Distribution Procedures,
         and the Confirmation Order in such a way that such
         holders of Asbestos Personal Injury Claims are treated
         fairly, equitably, and reasonably in light of the
         limited assets available to satisfy Asbestos Personal
         Injury Claims,

    (iv) preserve, hold, manage, and maximize the assets of the
         Asbestos PI Trust for use in paying and satisfying
         valid Asbestos Personal Injury Claims, and

     (v) otherwise comply in all respects with the requirements
         of a trust set forth in the Bankruptcy Code.

                        The Trustees

On the Confirmation Date, effective as of the Effective Date,
Judge Newsome will appoint the trustees from a group of
individuals selected jointly by the Asbestos PI Claimants'
Committee and the Future Claimants' Representative to serve as
the Asbestos PI Trustees for the Asbestos PI Trust; however, any
such individual will be appointed after consultation with AWI.

                The Trustees' Advisory Committee

The Asbestos PI Trust Agreement provides for the establishment
of a Trustees' Advisory Committee with which the Asbestos PI
Trustees are required to consult, and the consent of which is
required, on certain matters under the Asbestos PI Trust
Agreement.  As with the initial Asbestos PI Trustees, the
initial members of the TAC will serve staggered terms, with
five-year terms thereafter.  The identity of the individuals who
will serve as the initial TAC members will be disclosed at the
Confirmation Hearing.

             Transfer of Reorganization Consideration

On the later of the Effective Date and the date by which all the
Asbestos PI Trustees have signed the Asbestos PI Trust
Agreement, AWI will transfer to the Asbestos PI Trust the
Asbestos PI Insurance Asset and the assets consisting of money,
New Common Stock and New Notes as described in the Plan.

              Asbestos PI Trust Termination Provisions

The Asbestos PI Trust will terminate automatically 90 days after
the first to occur of these events:

    (1)  the Asbestos PI Trustees decide to terminate the
         Asbestos PI Trust because:

            (i) they deem it unlikely that new Asbestos
                Personal Injury Claims will be filed against
                the Asbestos PI Trust;

           (ii) all Asbestos Personal Injury Claims duly filed
                with the Asbestos PI Trust have been liquidated
                and paid to the extent provided in the Asbestos
                PI Trust Agreement and the Asbestos PI Trust
                Distribution Procedures or disallowed by a
                final, non-applicable order, to the extent
                possible based upon the funds available through
                the Plan, and

         (iii) 12 consecutive months have elapsed during
               which no new Asbestos Personal Injury Claim has
               been filed with the Asbestos PI Trust; or

    (2)  if the Asbestos PI Trustees have procured and have in
         place irrevocable insurance policies and have
         established claims handling agreements and other
         necessary arrangements with suitable third parties
         adequate to discharge all expected remaining
         obligations and expenses of the Asbestos PI Trust
         in a manner consistent with the Asbestos PI Trust
         Agreement and the Asbestos PI Trust Distribution
         Procedures, the date on which the Bankruptcy Court
         enters an order approving such insurance and other
         arrangements and such order becomes a Final Order; or

    (3)  to the extent that any rule against perpetuities is
         deemed applicable to the Asbestos PI Trust, 21 years
         less 91 days pass after the death of the last survivor
         of all of the descendants of the late Joseph P.
         Kennedy, Sr., father of the late President John F.
         Kennedy, living on the date the Trust is created.

               Compliance with IRS QSF Regulations

AWI promises it will timely seek a private letter ruling from
the IRS substantially to the effect that, among other things,
the Asbestos PI Trust will be a "qualified settlement fund"
within the meaning of section 468B of the Internal Revenue Code
and the Treasury Regulations thereunder, or AWI will receive an
opinion of counsel with respect to the tax status of the
Asbestos PI Trust as a "qualified settlement fund" reasonably
satisfactory to AWI, the Asbestos PI Claimants' Committee, the
Future Claimants' Representative, and, if Class 6 votes to
accept the Plan, the Unsecured Creditors' Committee.

                     The Asbestos PD Trust

AWI has always claimed that there are no colorable claims
against it for property damage related to asbestos.  
Nonetheless, to put these disputes behind it, AWI includes an
Asbestos PD Trust which is created and functions on the same
terms as the Asbestos PI Trust, with these exceptions:

The purposes of the Asbestos PD Trust will be to:

     (i) direct the processing, liquidation, and payment of all
         Asbestos Property Damage Claims in accordance with the
         Plan, the Asbestos PD Claims Resolution Procedures, and
         the Confirmation Order, and

    (ii) preserve, hold, manage, and maximize the assets of the
         Asbestos PD Trust for use in paying and satisfying
         Asbestos Property Damage Claims.

                     The Asbestos PD Trustees

If Class 4 votes to accept the Plan, the Asbestos PD Trustees
will be selected by the Asbestos PD Committee.  If Class 4 votes
to reject the Plan, a single individual, who will be identified
by AWI before or at the Confirmation Hearing, will be selected
to serve as the Asbestos PD Trustee.

             Asbestos PD Claims Resolution Procedures

If Class 4 votes to accept the Plan, the Asbestos PD Trustees
will develop procedures governing the allowance and payment of
Asbestos Property Damage Claims. If Class 4 votes to reject the
Plan, the Asbestos PD Trustee will be bound to use the Asbestos
PD Claims Resolution Procedures written by AWI to determine the
allowance and payment of Asbestos Property Damage Claims.  Under
AWI's Asbestos PD Claims Resolution Procedures, to qualify for
compensation, the holder of an Asbestos Property Damage Claim
must submit:

       (i) evidence of asbestos content of the material for
           which a claim is made, whether already removed or
           in place, and

      (ii) evidence of friable material releasing fibers into
           the air in excess of the OSHA PEL.

A holder of an Asbestos Property Damage Contribution Claim must
demonstrate all the evidence that the underlying claimant would
be required to prove, as well as demonstrate that it has made
payment to the claimant in satisfaction of such claimant's claim
against AWI.

           Discharge of Asbestos Property Damage Claims

AWI is not seeking a channeling or other injunction with respect
to Asbestos Property Damage Claims.  Instead, AWI will rely upon
the general discharge and injunction against the assertion of
pre-confirmation claims that the Bankruptcy Code makes
applicable to all Claims, whatever their nature.

              No Asbestos PD Claim Trading Injunction

AWI does include the same type of Claims Trading Injunction
against the holders of Asbestos PD Claims, staying each of them
from, directly or indirectly, purchasing, selling, transferring,
assigning, conveying, pledging, or otherwise acquiring or
disposing of their respective Asbestos Property Damage Claim.  
AWI includes the same exceptions for inheritance and other
required dispositions, and provides the same voiding language,
as that applied to PI Claims. (Armstrong Bankruptcy News, Issue
No. 33; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


ARTEMIS ASSOCIATES: Case Summary & 13 Largest Unsec. Creditors
--------------------------------------------------------------
Debtor: Artemis Associates, L.L.C.
        1400 Smith Street
        Houston, Texas 77002

Bankruptcy Case No.: 02-16441

Type of Business: The Debtor is a holding company for ownership
                  of Enron Facility Services, Inc.

Chapter 11 Petition Date: December 23, 2002

Court: Southern District of New York (Manhattan)

Judge: Arthur J. Gonzalez

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

Total Assets: $1,138,082,725

Total Debts: $1,018,179,728

Debtor's 13 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Enterprise Solutions Div.   Trade debt                  $3,785

PCPC Incorporated           Trade debt                  $3,279

Future Computing Solutions, Trade debt                  $2,337
Inc.

Netview Technologies, Inc.  Trade debt                  $1,448

United Computing Group      Trade debt                    $456

Verizon Midwest             Trade debt                    $356

AT&T                        Trade debt                    $329

Bowne Business Solutions    Trade debt                    $301

Worldcom, Inc.              Trade debt                    $258

Verizon Communications,     Trade debt                     $83
Inc.

Worldcom, Inc.              Trade debt                     $51

Verizon                     Trade debt                     $45

MCI                         Trade debt                      $9


ASIA GLOBAL CROSSING: All Bids to Acquire Assets Due by Jan. 9
--------------------------------------------------------------
Judge Bernstein sets the Bid Deadline on January 9, 2003 at 4:00
p.m. (prevailing Eastern Time).  If Asia Global Crossing Ltd.,
and its debtor-affiliates receive one or more Qualified Bids
from Qualified Bidders on or before the Bid Deadline, the
Debtors are authorized and directed to conduct the Auction in
respect of the Acquired Assets at the offices of Kasowitz,
Benson, Torres & Friedman LLP, 1633 Broadway in New York, New
York 10019, on January 16, 2003 commencing at 10:00 a.m.
(prevailing Eastern Time), or at any other location or time as
may be timely disclosed by AGX to Qualified Bidders. (Global
Crossing Bankruptcy News, Issue No. 31; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


AVANTAGE LINK: Raymond Chabot Appointed Receiver to Sell Assets
---------------------------------------------------------------
The Board of Directors of AVANTAGE LINK INC., (TSX Venture:AVK)
has filed with the Quebec Superior Court a motion to authorize
the sale of its assets to 4123654 Canada Inc. The sale was
authorized by the Court on December 18, 2002 and will generate
proceeds of $415,000 for the benefit of secured and ordinary
creditors. Consequently Raymond Chabot Inc., was appointed as
interim receiver with the power to sell the assets.

Also, Mr. Jean-Luc Landry of the Board of Directors has resigned
from the Board as of Friday, December 13th ,2002.

AVANTAGE LINK -- http://www.avantagelink.com-- is a publicly  
traded Canadian company listed on the TSX Venture exchange under
the symbol AVK.


AVAYA INC: Names Louis J. D'Ambrosio to Lead Services Business
--------------------------------------------------------------
Avaya Inc. (NYSE: AV), a leading global provider of
communications networks and services to businesses, has named
Louis J. D'Ambrosio, group vice president, worldwide services,
reporting to Don Peterson, Avaya chairman and CEO.

D'Ambrosio will be responsible for sales, marketing, product
development and operations for Avaya Services, an organization
of more than 8,000 professionals worldwide that design, build
and manage communications networks for businesses.

Avaya Services, with $2 billion in annual revenues, provides the
most comprehensive full life-cycle services in the industry
including network consulting and assessment; multi-vendor
services; security; integration; and implementation as well as
maintenance and management.  Avaya Services supports customers
in more than 90 countries through 30 network operations centers
worldwide.

D'Ambrosio joins Avaya after a 16-year career at IBM where he
held senior executive positions in Software, Customer Units, and
Global Services.  Most recently, he was vice president,
Worldwide Marketing, Sales, and Operations for IBM's profitable,
$11 billion software business.  In that capacity, he led a
12,000-person team  --- across sales, services, brand
management, advertising, channels, and operations - to industry
leading growth and market share gains.

Prior to this, D'Ambrosio held other key leadership roles
including vice president, Marketing Development and Execution,
where he led the optimization of IBM's go-to-market model;
general manager of a 20-country industry unit in Asia Pacific
based in Tokyo; and director of worldwide strategy for Global
Services when it was formed, where he led the original strategy
and execution plan to integrate and grow IBM services to $20
billion.  D'Ambrosio was a member of IBM's worldwide management
committee, comprised of the company's top executives.

"Services is at the core of our value proposition to the
marketplace and critical to our growth," said Don Peterson,
chairman and CEO of Avaya.  "We are fortunate to have Lou
D'Ambrosio join our team.  Lou's leadership, strategic and
analytical thinking, and proven track record in building
profitable, growth-oriented businesses will be essential as we
accelerate our plans to expand Avaya's voice and data management
services business."

"I am delighted to join the Avaya team and excited about the
impact Avaya could have in the marketplace," said D'Ambrosio.  
"Avaya is in an enviable position of having one million
customers and an outstanding technology and services portfolio.  
I believe Avaya is uniquely positioned to deliver
communications-driven services and solutions to help enterprises
reduce costs and win in the marketplace."

D'Ambrosio received a Bachelor of Science from Pennsylvania
State University, summa cum laude and valedictorian, and M.B.A.
from Harvard Business School.

Avaya Inc., designs, builds and manages communications networks
for more than 1 million businesses worldwide, including 90
percent of the FORTUNE 500(R). Focused on businesses large to
small, Avaya is a world leader in secure and reliable Internet
Protocol telephony systems and communications software
applications and services. Driving the convergence of voice and
data communications with business applications -- and
distinguished by comprehensive worldwide services -- Avaya helps
customers leverage existing and new networks to achieve superior
business results.  For more information, visit the Avaya Web
site at http://www.avaya.com

                           *   *   *

As previously reported in Troubled Company Reporter, Standard &
Poor's Ratings Services lowered its corporate credit rating on
enterprise communications equipment and services provider Avaya
Inc., to double-'B'-minus from double-'B'-plus, lowered its
senior secured debt rating to single-'B'-plus from double-'B'-
minus, and lowered its senior unsecured debt rating to single-
'B' from double-'B'-minus. At the same time, Standard & Poor's
removed the ratings from CreditWatch, where they were placed on
July 31, 2002. The outlook is negative.


BETHLEHEM STEEL: Court Approves Columbus Restructuring Loan Pact
----------------------------------------------------------------
Under the Restructuring Loan, the Court grants Bethlehem Steel
Corporation, and its debtor-affiliates the authority:

  (a) as of the closing of the Restructuring Loan, to contribute
      to Columbus Coatings the sum of $2,000,000, or a lesser
      amount as necessary, together with the proceeds of the
      Restructuring Loan, to repay the Modernization Loan in
      full.  This constitutes a contribution by Bethlehem to the
      Columbus Coatings' equity capital;

  (b) to cause Columbus Coatings to use the contribution to
      equity and the proceeds of the Restructuring Loan to repay
      existing loans of Columbus including, without limitation,
      the Modernization Loan.  The Debtors are further
      authorized, prior to and after the closing of the
      Restructuring Loan, to continue providing additional
      cash to Columbus Coatings and Columbus Processing as may
      be required to support their respective debt service and
      working capital requirements, which will constitute
      capital contributions to Columbus Coatings and Columbus
      Process, respectively;

  (c) to cause Columbus Coatings, Columbus Process, Buckeye
      Coatings and Buckeye Steel to provide guaranties with
      respect to the DIP Credit Agreement and to grant security
      interests in, and liens on, their assets in favor of the
      DIP Agent on behalf of the DIP Lenders, subject to
      applicable non-bankruptcy law, including the July 23, 1999
      Hot-Dip Galvanized Steel Tolling Agreement between
      Bethlehem and Columbus Coatings.

With respect to all of the obligations and indebtedness of:

  (a) Alliance and Ohio Steel arising under the Restructuring
      Loan and the Financing Documents, the Restructuring Agent
      and the Restructuring Lenders are granted allowed claims
      against Alliance and Ohio Steel with priority over any and
      all administrative expenses of the kind specified in
      Sections 503(b) and 507(b) of the Bankruptcy Code, subject
      to the DIP Order Carve-Out; and

  (b) the Debtors, other than Alliance and Ohio Steel, arising
      under the Restructuring Loan and the Financing Documents,
      the Restructuring Agent and the Restructuring Lenders are
      granted allowed claims against the Debtors having priority
      over any and all administrative expenses of the kind
      specified in Sections 503(b) and 507(b) of the Bankruptcy
      Code, subject to the DIP Order Carve-Out.

The Debtors' allowed claims are further subject to allowed
claims granted to the DIP Agent, Chase Manhattan Bank and the
Inventory Agent pursuant to paragraphs 10 and 19(a) of the DIP
Order and the allowed claims granted to the CCR Agent and the
CCR Lenders pursuant to the CCR Order.

Except as provided in the DIP Order and the CCR Order, no other
claim having a priority superior to or pari passu with that
granted by this Order to the Restructuring Agent or the
Restructuring Lenders will be granted while any portion of the
Restructuring Loan or the commitment remains outstanding.

As security for all of the Debtors' obligations and indebtedness
owing to the Restructuring Agent and the Restructuring Lenders
under the Financing Documents, the Restructuring Agent, on
behalf of the Restructuring Lenders, Judge Lifland grants,
effective on the closing of the Restructuring Loan and without
the necessity of the execution by the Debtors of mortgages,
security agreements or otherwise, subject to the priority
scheme,  fully perfected security interests in and liens on all
existing and after-acquired real and personal, tangible and
intangible assets of the Debtors, including without limitation,
all cash, cash equivalents, bank accounts, accounts, other
receivables, chattel paper, contract rights, inventory,
instruments, documents, securities, equipment, fixtures, real
property interests, franchise rights, patents, trade names,
trademarks, copyrights, intellectual property, general
intangibles, investment property and all substitutions,
accessions and proceeds of the foregoing.

The security interests and liens granted under the Financing
Documents will have these respective priorities:

(a) The security interests and liens granted to the
    Restructuring Lenders in these provisions and under the
    Financing Documents with respect to all of the Debtors'
    property will be valid and perfected security interests
    junior only to:

      (i) valid, perfected and non-avoidable liens in
          existence on the date of the filing of each of the
          Cases or to valid and non-avoidable liens in existence
          on the Commencement Date that were perfected
          subsequent to the Commencement Date as permitted by
          Section 546(b) of the Bankruptcy Code;

     (ii) the liens on the assets of the Debtors granted
          pursuant to the DIP Order, including without
          limitation the liens granted to the DIP Agent, Chase
          Manhattan and the Inventory Agent, all of which liens
          which will have the respective priorities set forth in
          the DIP Order; and

    (iii) the liens on the assets of CCR granted pursuant to the
          Final Order Regarding Use of Cash Collateral by
          CCR and Providing Adequate Protection and Other
          Relief, including the liens granted to the Chicago
          Cold Agent and the Chicago Cold Lenders.

On the other hand, the security interests and liens granted to
the Restructuring Lenders in these provisions and under the
Financing Documents with respect to all of Debtors' direct and
indirect equity interests in Columbus Coatings and Columbus
Process, including all of:

    (i) Bethlehem's equity interest in Alliance;
   (ii) Alliance's equity interest in Columbus Coatings;
  (iii) Bethlehem's equity interest in Ohio Steel;
   (iv) Ohio Steel's equity interest in Columbus Process;
    (v) Bethlehem's equity interest in Buckeye Coatings; and
   (vi) Bethlehem's equity interest in Buckeye Steel;

as well as with respect to all other assets of Alliance and Ohio
Steel will be valid, perfected, first priority security
interests subject only to the Existing Liens.

The DIP Agent, on behalf of the DIP Lenders, will have, and, to
the extent applicable, is granted, valid and perfected security
interests, junior only to the Existing Liens and the liens of
the Restructuring Lenders, in the Equity Collateral.

The security interests and liens granted to the Restructuring
Lenders and under the Financing Documents with respect to
"Martin Tower," the Debtors' headquarters building in Bethlehem,
Pennsylvania, will be valid and perfected security interests
subject only to:

  (i) Existing Liens, including the Chicago Cold Rollings Martin
      Tower Lien and Permitted Encumbrances; and

(ii) liens granted pursuant to the DIP Order, including without
      limitation the liens granted to CMB and the Inventory
      Agent, other than the liens granted to the DIP Agent.

Notwithstanding any other provisions, all liens granted pursuant
to this Order will be at all times junior and subordinate to the
liens of RZB Finance LLC on the RZB Collateral and the Post-
Petition RZB Collateral.

The security interests and liens granted in these provisions and
under the Financing Documents to the Restructuring Agent on
behalf of itself and the Restructuring Lenders will not be:

  (i) subject to any lien or security interest which is avoided
      and preserved for the benefit of the Debtors' estates
      under Section 551 of the Bankruptcy Code; or

(ii) except as provided, subordinated to or made pari passu
      with any other lien or security interest under Section
      364(c) or (d) of the Bankruptcy Code.

The Court makes it clear that the Debtors' Collateral will not
include any of the Debtors' avoidance actions under Sections 544
through 549 of the Bankruptcy Code.  The Debtors' Collateral
will also be limited, solely to the extent provided in the
Restructuring Credit Agreement, in the case of an entity that is
a controlled foreign corporation under Section 957 of the
Internal Revenue Code, to 66% of the voting stock of the entity.

To the extent that any Debtor makes aggregate payments to the
Restructuring Lenders in excess of the Debtor's pro-rata share
of the aggregate amount of all loans and advances received by
Columbus Coatings from the Restructuring Lenders during the
pendency of the Cases, then the Debtor, after the payment in
full of all obligations of Columbus Coatings in respect of the
Restructuring Loan and the DIP Financing and the termination of
the Restructuring Loan and the DIP Financing, will be entitled
to a claim under Section 364(c)(1) of the Bankruptcy Code
against each other Debtor, in the amount as may be determined by
the Court taking into account the relative benefits received by
each Debtor.

The claims of the Debtors are deemed subordinate and junior in
all respects both to the liens and superpriority claims of the
Restructuring Agent, the Restructuring Lenders, the DIP Agent,
the DIP Lenders, the CCR Agent, the CCR Lenders, Chase Manhattan
Bank, the Inventory Agent and the Inventory Lenders provided for
hereunder and in the DIP Order and the CCR Order.

Prior to the Commencement Date, the Debtors granted a lien, the
"CCR Martin Tower Lien," on Martin Tower to the CCR Agent to
secure Bethlehem's prepetition guaranty of CCR's obligations to
the CCR Agent and the CCR Lenders under the CCR Credit
Agreement. As of the repayment in full of the Modernization
Loan, the CCR Martin Tower Lien will automatically be deemed,
without further action by the Court, a first priority lien on
Martin Tower, senior to all other liens with respect to Martin
Tower.

Each of the Debtors and CCR is authorized to:

    (i) enter into the:

        (a) Amendment to Rollings Services Agreement between
            CCR and Bethlehem;

        (b) Agreement among Chicago Cold Rolling, Bethlehem and
            the CCR Agent; and

        (c) Agreement between Bethlehem and the CCR Agent -- the
            "CCR Mortgage Agreement" and, together with the CCR
            Services Amendment and the CCR Interest Rate
            Agreement, the "New CCR Agreements"; and

   (ii) engage in other actions and enter into other agreements
        incident to the New CCR Agreements.

Nothing in these provisions or in the New CCR Agreements will
constitute the assumption or rejection by Bethlehem or CCR of
the RSA as an executory contract, all rights in respect of which
are expressly reserved.

The CCR Order is hereby amended solely to include the:

  (i) CCR Services Amendment in the definition of the term
      "RSA," as used in the CCR Order; and

(ii) CCR Interest Rate Agreement in the definition of the term
      "Loan Documents," as used in the CCR Order.

None of the Restructuring Agent, the Restructuring Lenders, the
DIP Agent, the DIP Lenders, Chase Manhattan Bank, the Inventory
Agent, the Inventory Lenders, the Chicago Cold Rollings Agent or
the CCR Lenders will be required to file or record financing
statements, mortgages, notices of lien or similar instruments in
any jurisdiction or take any other action in order to validate
and perfect the security interests and liens granted to them
pursuant to this Order. If any party, will, in its business
judgment, choose to file financing statements, mortgages,
notices of lien or similar instruments or otherwise confirm
perfection of security interests and liens, all documents will
be deemed to have been filed or recorded at the time and on the
date of entry of this Order, but subject in all respects to the
priorities set forth in this Order and the DIP Order.

Each of the Debtors is authorized and directed to do and perform
all acts, to make, execute and deliver all instruments and
documents, including, without limitation, the execution of
security agreements, mortgages and financing statements, and to
pay fees, which may be reasonably required or necessary for the
Debtors' performance under the Restructuring Loan, including:

  (i) the execution of the Financing Documents; and
(ii) the execution of one or more amendments to the
      Restructuring Credit Agreement for the purpose of adding
      additional financial institutions as Restructuring Lenders
      and reallocating the commitment for the Restructuring Loan
      among the Restructuring Lenders, in each case in a form
      as the Debtors, the Restructuring Agent and the respective
      financial institutions may agree. (Bethlehem Bankruptcy
      News, Issue No. 27; Bankruptcy Creditors' Service, Inc.,
      609/392-0900)

Bethlehem Steel Corp.'s 10.375% bonds due 2003 (BS03USR1) are
trading at about 2 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BS03USR1for  
real-time bond pricing.


CELLSTAR CORP: Completes Mandatory Conversion of 5% Senior Notes
----------------------------------------------------------------
On November 30, 2002, CellStar Corporation (Nasdaq: CLST), a
value-added wireless logistics services leader, completed the
mandatory conversion of its 5% Senior Subordinated Convertible
Notes.  The Notes were convertible into shares of CellStar
common stock at a ratio of 200 shares for each $1,000 in
principal amount of the Notes.  The conversion increased the
total shares outstanding to 20,354,365 from 12,623,765.  
Nasdaq.com incorrectly reflects the old number of shares
outstanding.  CellStar has requested Nasdaq.com to correct its
Web site to accurately reflect CellStar's total shares
outstanding.

CellStar Corporation is a leading global provider of
distribution and value-added logistics services to the wireless
communications industry, with operations in Asia-Pacific, North
America, Latin America and Europe.  CellStar facilitates the
effective and efficient distribution of handsets, related
accessories and other wireless products from leading
manufacturers to network operators, agents, resellers, dealers
and retailers.  In many of its markets, CellStar provides
activation services that generate new subscribers for its
wireless carrier customers.  For the year ended November 30,
2001, CellStar generated revenues of $2.4 billion.  Additional
information about CellStar may be found on its Web site at
http://www.cellstar.com

                         *    *    *

As previously reported in Troubled Company Reporter, Standard &
Poor's lowered its corporate credit rating on CellStar Corp., to
'SD' (selective default) from 'CCC-' and removed its ratings
from CreditWatch, where they had been placed with negative
implications on Sept. 6, 2001.

At the same time, Standard & Poor's lowered its rating on the
subordinated debt to 'D' for the distributor of wireless
communications products. As of Aug. 31, 2001, total outstanding
debt was about $200 million.


CENDANT CORP: SEC Completes Review of 2001 Annual Report
--------------------------------------------------------
Cendant Corporation (NYSE: CD) announced the completion of the
review of the Company's 2001 Form 10-K by the Division of
Corporation Finance of the U.S. Securities and Exchange
Commission.  The SEC required no change to the Company's
reported or adjusted earnings per share in connection with such
review.  The Company had previously announced the review in
August 2002 as part of the SEC's review of all Fortune 500
companies.

As a result of such review, the Company has filed amendments to
its Form 10-K for the year ended December 31, 2001 and its Form
10-Q for the quarter ended September 30, 2002 reflecting certain
modifications and expanded disclosures.  The Company has made
available on its Web site, at http://www.cendant.com marked  
versions of its Form 10-K/A and its Form 10-Q/A, which reflect
the modifications from the most recently filed forms.

Cendant Corporation is primarily a provider of travel and
residential real estate services. With approximately 90,000
employees, New York City-based Cendant provides these services
to business and consumers in over 100 countries. More
information about Cendant, its companies, brands and current SEC
filings may be obtained by visiting the Company's Web site at
http://www.cendant.com   

At September 30, 2002, Cendant's balance sheet shows that total
current liabilities exceeded total current assets by about $1.3
billion.


CHESAPEAKE ENERGY: Board Declares Common and Preferred Dividends
----------------------------------------------------------------
Chesapeake Energy Corporation (NYSE: CHK) announced that its
Board of Directors has declared a $0.03 per share quarterly
dividend that will be paid on January 15, 2003 to common
shareholders of record on January 2, 2003. Chesapeake has
approximately 190 million common shares outstanding.

In addition, Chesapeake's Board has declared a quarterly cash
dividend on Chesapeake's 6.75% Cumulative Convertible Preferred
Stock, par value $.01. The dividend for the preferred stock is
payable on February 17, 2003, to preferred shareholders of
record on February 3, 2002, at the quarterly rate of $0.84375
per share. Chesapeake has 2.998 million shares of preferred
stock outstanding with a liquidation value of $150 million.

Chesapeake Energy Corporation is one of the largest independent
natural gas producers in the U.S. Headquartered in Oklahoma
City, the company's operations are focused on developmental
drilling and property acquisitions in the Mid-Continent region
of the United States. The company's Internet address is
http://www.chkenergy.com

                         *     *     *

As reported in Troubled Company Reporter's December 9, 2002
edition, Fitch Ratings affirmed the 'BB-' rating of Chesapeake
Energy's senior unsecured notes. Fitch also affirms the 'BB+'
rating on Chesapeake's senior secured bank facility and the 'B'
rating on the convertible preferred stock. The Rating Outlook
for Chesapeake is Stable.

Chesapeake previously announced that it had agreed to acquire
$300 million of Mid-Continent gas assets through an acquisition
of a wholly-owned subsidiary of Tulsa-based ONEOK. Chesapeake
will fund the transaction with $150 million of equity and upon
completion of that component it will issue $150 million of debt.
The ONEOK acquisition fits well with CHK's existing Mid-
Continent assets and with Chesapeake's business strategy of
creating value by acquiring and developing low-cost, long-lived
natural gas assets in the Mid-Continent region of the U.S. This
transaction will increase its proved reserves by 8% to almost
2.5 tcfe and its production by 12% to over 565,000 mcfe per day.
Since Dec. 31, 2001, CHK has increased its reserve base by
approximately 40%.

The ratings reflect the conservative nature in which the
transaction is being funded, Chesapeake's long-lived, focused
natural gas reserve base and its modest credit profile.
Chesapeake's proved reserves, pro forma for the latest
acquisition are nearly 2.5 Tcfe, which provide a reserve life of
close to 11 years. Additionally, approximately 90% of
Chesapeake's proved reserves are natural gas and are primarily
located in the very familiar Mid Continent region. Fitch expects
Chesapeake to achieve synergies through its recent acquisition
and to expand upon the current production from those properties.


CLARENT CORPORATION: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Clarent Corporation
        dba ACT Networks, Inc., and Jones
        dba Peak Software Solutions
        700 Chesapeake Drive
        Redwood City, California 94063

Bankruptcy Case No.: 02-33504

Type of Business: Provider of voice solutions for next
                  generation networks.

Chapter 11 Petition Date: December 13, 2002

Court: Northern District of California (SanFrancisco)

Judge: Thomas E. Carlson

Debtor's Counsel: Debra I. Grassgreen, Esq.
                  Pachulski, Stang, Ziehl, Young & Jones
                  3 Embarcadero Center #1020
                  San Francisco, CA 94111
                  Tel: 415-263-7000

Total Assets: $402,393,000 (as of June 30, 2001)

Total Debts: $101,539,000 (as of June 30, 2001)


CMS ENERGY: Inks Pact to Sell Panhandle Companies for $1.8 Bill.
----------------------------------------------------------------
Southern Union Company (NYSE: SUG) along with AIG Highstar
Capital, L.P., a private equity fund sponsored by American
International Group, Inc., (NYSE: AIG) have reached a definitive
agreement with CMS Energy Corporation (NYSE: CMS) to acquire the
CMS Panhandle Companies.

The agreement calls for a newly formed entity, Southern Union
Panhandle Corporation, owned by Southern Union and AIG Highstar
to pay approximately $1.8 billion, which includes $1.166 billion
in gross debt. The transaction has been approved by the boards
of directors of all companies and will close following clearance
by the Federal Trade Commission under the Hart-Scott-Rodino Act
and certain state regulatory approvals.

"We are extremely pleased to be acquiring CMS Panhandle," said
George L. Lindemann, Southern Union's Chairman and CEO. "This
acquisition further delivers on our stated strategy to re-deploy
our assets and capitalize on opportunities in the energy
market."

Thomas Karam, President and COO of Southern Union, added, "CMS
Panhandle is a well run and stable business, which will be
accretive to our earnings in the first year. We expect to
execute a smooth and seamless transition. We welcome the chance
to work with the Panhandle's dedicated and experienced
management team."

AIG Highstar's Managing Partner Christopher H. Lee stated,
"Investment in Southern Union Panhandle will be an excellent
addition to AIG Highstar's portfolio of energy infrastructure
assets, which include power transmission and generation and
natural gas storage and transportation."

The CMS Panhandle Companies include CMS Panhandle Eastern Pipe
Line Company, CMS Trunkline Gas Company, CMS Trunkline LNG
Company, which operates an LNG terminal complex at Lake Charles,
La., and CMS Sea Robin Pipeline Company. The CMS Panhandle
Companies operate almost 11,000 miles of mainline natural gas
pipeline extending from the Gulf of Mexico to the Midwest and
Canada. These pipelines access the major natural gas supply
regions of the Louisiana and Texas Gulf Coasts as well as the
Midcontinent and Rocky Mountains. The pipelines have a combined
peak day delivery capacity of 5.4 billion cubic feet per day, 88
billion cubic feet of underground storage capacity and 6.3
billion cubic feet of above ground LNG storage facilities.

Southern Union recently announced plans to sell its Southern
Union Gas division and related Texas assets to ONEOK, Inc., for
$420 million in cash. The transaction is expected to close in
early January. Proceeds from the Texas assets sale and other
funds, including the AIG Highstar investment, will fund the
equity purchase price of the CMS Panhandle Companies.

Berenson Minella and Lehman Brothers acted as financial advisors
to the buyer in this transaction.

CMS Energy Corporation -- whose senior unsecured debt is
currently rated by Fitch at B+ -- is an integrated energy
company, which has as its primary business operations in
electric and natural gas utilities, natural gas pipeline systems
and independent power generation.

AIG Highstar Capital, L.P., is a private equity fund sponsored
by American International Group, Inc. to make structured equity
investments in infrastructure-related projects and operating
companies.

Southern Union Company is an international energy distribution
company serving approximately 1.5 million customers through its
natural gas operating divisions in Texas, Missouri,
Pennsylvania, Rhode Island, Massachusetts and Mexico. In
addition to controlling several intrastate natural gas pipelines
in Texas, Southern Union also owns and operates electric
generating facilities in Pennsylvania. For further information,
visit http://www.southernunionco.com  


COMMUNICATION DYNAMICS: Gets Go-Signal to Hire AlixPartners
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
the appointment of AlixPartners, LLC, as claims, noticing and
balloting agent for the chapter 11 cases of Communication
Dynamics, Inc., and its debtor-affiliates

As claims, noticing and balloting agent, AlixPartners will:

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

     (b) file with the Clerk's Office a certificate of service,
         within 10 days after each service, which includes a
         copy of the notice, a list of persons to whom it was
         mailed (in alphabetical order), and the date mailed;

     (c) maintain an up-to-date mailing list of all entities
         that have requested service of pleadings in these cases
         and a master service list of creditors and other
         parties in interest, which lists shall be available
         upon request of the Clerk's Office;

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

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

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

     (g) furnish a notice of bar date approved by the Court for
         the filing of a proof of claim (including the
         coordination of publication, if necessary) and a form
         for filing a proof of claim to each creditor notified
         of the filing; maintaining all proofs of claim filed;
         maintaining an official claims register by docketing
         ail proofs of claim on a register containing certain
         information;

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

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

     (n) record all transfers of claims pursuant to Bankruptcy
         Rule 3001(e) and provide notice of the transfer as
         required by Bankruptcy Rule 3001(e);

     (o) record court orders concerning claims resolution; (p)
         making all original documents available to the Clerk's
         Office on an expedited, immediate basis;

     (q) promptly comply with such further conditions and
         requirements as the Clerk's Office may hereafter
         prescribe; and

     (r) provide balloting services in connection with the      
         solicitation process for any chapter 11 plan to which a
         disclosure statement has been approved by the Court.

     (s) assist the Debtors with the preparation of their
         schedules and statements of financial affairs.

The hourly billing rates for AlixPartners professionals are:

          Principal            $365 per hour
          Senior Associate     $285 per hour
          Associate            $245 per hour
          Consultant           $200 per hour
          Analyst              $145 per hour
          Paraprofessional     $90 per hour

Communication Dynamics, Inc., together with its Debtor and non-
Debtor affiliates, is one of the largest multinational suppliers
of infrastructure equipment to the broadband communications
industry. The Debtors filed for chapter 11 protection on
September 23, 2002.  Jeffrey M. Schlerf, Esq., at The Bayard
Firm, represents the Debtors in their restructuring efforts.  
When the Company filed for protection from its creditors, it
listed more than $100 million both in estimated assets and
debts.


COVANTA ENERGY: Wins Nod to Renew & Modify AIG Insurance Program
----------------------------------------------------------------
Covanta Energy Corporation and non-debtor affiliate Covanta
Energy Group, Inc. -- Insured Parties --  obtained Judge
Blackshear's permission to renew and modify their insurance
arrangement with American International Group and its affiliates
to provide primary casualty insurance covering their potential
casualty liabilities, including, among other things, workers'
compensation liability.

Specifically, the Renewal Insurance Program provides that:

1. The Renewal Insurance Program will be effective from October
   20, 2002 to October 20, 2003;

2. The Renewal Insurance Program covers "primary casualty"
   liabilities related to the Debtors' energy businesses.  The
   primary casualty liabilities comprise of workers'
   compensation, general liability, products and completed
   operations liability, and automobile liability;

3. The premium due and payable under the Renewal Insurance
   Program is $3,629,375.  Covanta has complied with the
   requirements set forth in the Renewal Insurance Program with
   respect to the timing of the premium payments;

4. Covanta is required to provide collateral totaling $4,600,000
   in the form of cash or letter of credit using AIG's approved
   format and approved banks.  The collateral secures the
   Insured Parties' obligations to pay to AIG the self-insured
   retention provided under the policy.  Covanta has complied
   with the requirements set forth in the Renewal Insurance
   Program with respect to the substance and timing of the
   collateral payment by making a $2,000,000 cash payment to AIG
   and obtaining a $2,000,000 letter of credit;

5. Self-insured retentions at $250,000 per accident apply to
   each claim under the Renewal Insurance Program; and

6. The Renewal Insurance Program is contingent on the Court's
   approval pursuant to an order satisfactory to American Home
   Assurance Company -- an AIG affiliate -- on or before
   December 4, 2002. (Covanta Bankruptcy News, Issue No. 19;
   Bankruptcy Creditors' Service, Inc., 609/392-0900)    


CTC COMMS: Gets Final Court Nod to Use Lenders' Cash Collateral
---------------------------------------------------------------
CTC Communications Group, Inc., and CTC Communications Corp.,
obtained approval from the U.S. Bankruptcy Court for the
District of Delaware to use their Lenders' Cash Collateral and
grant the Lenders adequate protection of the prepetition liens
securing the Debtors' obligations.

Prior to the Petition Date, the Debtors owed $225,000,000 under
a credit agreement with Toronto Dominion (Texas), Inc., as
administrative agent, Lehman Brothers, Inc., Credit Suisse First
Boston and TD Securities (USA) Inc.

The Debtors agree to limit their use of the Lenders' cash
collateral to expenses itemized in a Budget that will be
delivered to the Lenders.  

The Debtors argue that they need to use Cash Collateral to
maintain the value of the Prepetition Collateral and to provide
the working capital necessary to maintain operation of their
business.  Absent the use of Cash Collateral, the value of the
Lenders' and other creditors' collateral will be seriously
diminished.

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


DANA CORP: Completes Sale of FTE Brake & Clutch Actuation Assets
----------------------------------------------------------------
Dana Corporation (NYSE: DCN) -- whose new $250 million debt
issue has been rated by Standard & Poor's at 'BB' -- has
completed the sale of its FTE brake and clutch actuation systems
operations to HgCapital, a European private equity finance
company.

The transaction included FTE's five manufacturing facilities in
Germany, Mexico, and Brazil, as well as its 14 sales offices.  
The Ebern, Germany-based FTE operations employ approximately
2,850 people.

Net cash proceeds for the transaction total approximately $150
million. Dana will record an after-tax gain of approximately $24
million in the fourth quarter of 2002 related to the
transaction.

Dana Chairman and CEO Joe Magliochetti said, "FTE is a respected
business with solid product and brand reputation.  But in the
larger view, this move reinforces our desire to focus Dana's
energies on core businesses and technologies, which are more
central to our strategy of growth through innovation."

FTE's primary brake products include master cylinders, wheel
cylinders, brake boosters and hoses, and anti-lock brake modules
and systems.  Its major clutch products include master
cylinders, slave cylinders, concentric slave cylinders, hoses
and lines, pipe assemblies, and servos.

The investment banking firm of Deutsche Bank advised Dana on the
transaction.

Dana Corporation 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


DLJ MORTGAGE: S&P Junks Class B-2 Note Rating at CCC
----------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
classes B-1 and B-2 of DLJ Mortgage Acceptance Corp.'s
commercial mortgage pass-through certificates series 1997-CF1.
Concurrently, the ratings on classes A-1A, A-1B, A-2, and A-3
are affirmed.

The lowered ratings are due to anticipated deterioration in
credit enhancement levels upon the eventual liquidation of the
specially serviced assets, and the susceptibility of both
classes to interest shortfalls.

The affirmations reflect credit enhancement levels that should
adequately support the current ratings upon liquidation of the
specially serviced assets and the pools weighted average debt
service coverage of 1.53x. The weighted average DSC was reported
by the master servicer, GMAC Commercial Mortgage Corp. The DSC
is based upon available preceding fiscal year financial data,
primarily year-end 2001.

There are nine specially serviced assets. Seven are REO with a
combined balance of $17.2 million and a total exposure of $24.5
million. $13 million of the $17 million balance is represented
by limited service hotels, all of which have been experiencing
occupancy problems. According to discussions with the special
servicer, all but one of the lodging properties had occupancy
levels below 40% during September or October 2002, and average
daily rates that were under $50.00. Appraisal reduction amounts
of $7.5 million have been realized against the lodging assets.
According to the special servicer, five of the six assets may be
liquated by Spring 2003. The remaining REO asset is secured by a
mixed-use industrial/warehouse property formerly tenanted by
Roberds. The asset has been REO since June 2000 and has a
balance of $4.7 million. An appraisal reduction of $4.6 million
has been realized against the asset. The remaining specially
serviced assets are two 90-plus day delinquent loans with a
combined balance of $7.3 million. The loans have a total
combined exposure of $7.8 million. Appraisal reductions of $2.3
million have been realized against the 90-plus day delinquent
assets, one of which is a multifamily property in Dayton, Ohio,
and the other is a limited service hotel in Beafort, South
Carolina. No other loans are specially serviced. The remaining
loans in the pool are current, with the exception of two crossed
loans tenanted by Kmart, which are 30 days delinquent. The loans
have a combined principal balance of $6.10 million.

In addition to the specially serviced assets, Standard & Poor's
is concerned about the performance of two of the top 10 assets.
The first is the fifth largest loan in the pool ($8.6 million),
which reported a 0.72x DSC for the first six months of 2002.
September 2002 occupancy was reported at 73.3%. The loan is
secured by a property consisting of 10 buildings, five of which
contain 157 apartment units, and five buildings contain 531 quad
units (common kitchen and bath). The property is experiencing
decreased demand due to newer multifamily product in the area,
as well as dependency on declining student enrollments at the
nearby University of Oregon. Concerns also exist regarding the
ninth largest loan in the pool ($6.7 million), which is secured
by a 300-unit apartment complex in Austin, Texas, which reported
a DSC of 0.74x for the first six months of 2002. Occupancy at
Sept. 25, 2002 was 81%. The property, which is located close to
University of Texas, has largely been converted to student
housing.

There are 101 loans in the pool with an aggregate balance of
$354.2 million, down from 118 loans with a balance of $448
million at issuance. Significant property concentrations include
multifamily (49%); retail (27%); lodging (11%); and office
(10%). The lodging exposure consists of 12 loans, six of which
are REO and one that is 90-plus days delinquent. The properties
are located in 23 states with significant concentrations in
Texas (19%), California (15%), and Georgia (12%). To date, nine
assets have been liquated. Losses expressed as a percentage of
principal balance at the time of liquation ranged from 71% to
100%.

Based on available information, various loss scenarios were
considered, which resulted in the lowered ratings due to
anticipated credit support deterioration. While the credit
enhancement levels of classes senior to the B-1 also experienced
deterioration under the loss scenarios, they still supported the
existing ratings.
   
                      Ratings Lowered
   
               DLJ Mortgage Acceptance Corp.
      Commercial mortgage pass-thru certs series 1997-CF1
   
      Class         Rating              Credit Support (%)
      B-1     BB+             BBB-      12.03
      B-2     CCC             B         8.86
   
                      Ratings Affirmed
   
               DLJ Mortgage Acceptance Corp.
      Commercial mortgage pass-thru certs series 1997-CF1
   
      Class     Rating              Credit Support (%)
      A-1A      AAA                 35.43
      A-1B      AAA                 35.43
      A-2       AA                  28.46
      A-3       A                   19.62
   
               Ratings Previously Lowered To 'D'
   
               DLJ Mortgage Acceptance Corp.
      Commercial mortgage pass-thru certs series 1997-CF1
   
      Class     Rating              Credit Support (%)
      B-3       D                   1.92
      B-4       D                   0.00


EL PASO: Closes Over $3.6-Billion in Sales Transactions in 2002
---------------------------------------------------------------
El Paso Corporation (NYSE: EP) provided an update on its
liquidity, asset sales program, and business plans.  The
collateral requirements associated with the recent ratings
actions on El Paso's debt have been consistent with
expectations, and the company's liquidity remains strong.  As of
December 18, 2002, El Paso had $3.4 billion of available
liquidity.

    Sources                                   ($ billions)
         Available cash                           $1.3
         364-day bank facility                     3.0
         Multi-year bank facility                  1.0
              Subtotal sources                    $5.3
    Uses
         Commercial paper outstanding            ($0.0)
         364-day facility outstanding             (1.5)
         Multi-year facility letters of credit    (0.4)
              Subtotal uses                      ($1.9)
    Net available liquidity                       $3.4

El Paso continues to make excellent progress on asset sales,
having closed more than $3.6 billion in sales transactions thus
far in 2002.  The company expects to close approximately $1.4
billion of additional non-core asset sales by the end of the
first quarter 2003, with another approximate $1 billion of
asset sales expected to close during the remainder of 2003.  All
of these sales are part of El Paso's strategy to sell non-core
assets to reduce debt and enhance liquidity.

The company's core businesses -- pipeline, production,
midstream, and non-merchant power -- continue to perform well.  
In addition, the strengthening natural gas price environment and
growing need for new infrastructure provide a solid base for
these businesses in 2003 and beyond, and highlight El Paso's
position as North America's leading provider of natural gas
services.  The company is implementing its plan to exit the
trading business and will adopt the new accounting rules for
that business in the fourth quarter. Additionally, El Paso is
reviewing its other businesses as it rationalizes its non-core
holdings.  The analysis of the financial impact of these changes
on trading and other businesses in the fourth quarter 2002 and
full-year 2003 is ongoing.  In February 2003, El Paso will
provide an update on its capital investment program, asset sale
progress, financing plan, and 2003 earnings and cash flow
outlook.

El Paso Corporation is North America's leading provider of
natural gas services.  The company has core businesses in
natural gas production, gathering and processing, and
transmission, as well as liquefied natural gas transport and
receiving, petroleum logistics, power generation, and merchant
energy services.  El Paso Corporation, rich in assets and fully
integrated across the natural gas value chain, is committed to
developing new supplies and technologies to deliver energy to
communities around the world.  For more information, visit
http://www.elpaso.com

As reported in Troubled Company Reporter's December 3, 2002
edition, Standard & Poor's lowered its long-term corporate
credit rating on energy company El Paso Corp., and its
subsidiaries to 'BB' from 'BBB'.

Standard & Poor's also lowered its senior unsecured debt rating
at the pipeline operating companies to 'BB' from 'BBB' and the
senior unsecured rating on El Paso to 'BB-' from 'BBB-',
reflecting structural subordination relative to the operating
companies. All commercial paper ratings were withdrawn. All
ratings on El Paso and its subsidiaries remain on CreditWatch
with negative implications, where they were placed
September 23, 2002.


ENCOMPASS SERVICES: Honoring Obligations to Critical Vendors
------------------------------------------------------------
Judge Greendyke authorizes Encompass Services Corporation and
its debtor-affiliates to satisfy Critical Vendor Claims on an
interim basis.  The Debtors are authorized to use available
funds, when feasible and appropriate in their sole and absolute
discretion, based on the liquidity available to them.

By accepting the payment under these terms, Judge Greendyke
makes it clear that each Critical Vendor accepting payment
agrees to continue extending credit and supplying materials,
equipment, goods and services to the Debtors under the ordinary
and acceptable terms and conditions that are at least as
favorable or better than those provided to the Debtors 120 days
before Petition Date.

                         *    *    *

Encompass Services estimates they owe roughly $180,000,000 in
trade accounts payable and that of these outstanding accounts
payable, approximately $160,000,000 is owed to Critical Vendors
-- suppliers of materials, equipment, goods and services with
whom the Debtors continue to do business and whose materials,
equipment, goods and services are essential and critical to the
Debtors' reorganization.  (Encompass Bankruptcy News, Issue No.
3; Bankruptcy Creditors' Service, Inc., 609/392-0900)


ENRON CORP: Court Approves Proposed Overhead Allocation Formula
---------------------------------------------------------------
Subject to these provisions, Judge Gonzalez approves Enron
Corporation's proposed overhead allocation formula:

1. With respect to ENA and any other economic entity in which
   ENA has the primary economic interest, for the period between
   the Petition Date through November 25, 2002, to the extent
   Enron Corp. has incurred direct expenditures and direct and
   indirect allocable overhead expenses on behalf of ENA Group,
   the funding will be re-paid by ENA to Enron Corp. by reducing
   the amount of the ENA Loan;

2. With respect to the ENA Group, for the period after November
   25, 2002, to the extent Enron Corp. has incurred direct
   expenditures only on behalf of the ENA Group, the funding
   will be re-paid in cash directly to Enron Corp. by ENA on its
   own behalf and on behalf of any subsidiary in the ENA Group
   which cannot fund its own allocation of overhead or other
   expenses; and any subsidiary in the ENA Group, which can fund
   its own allocation of overhead or other expense will make the
   payments in cash directly to Enron Corp.;

3. With respect to the ENA Group, for the period after
   November 25, 2002, to the extent Enron Corp. has incurred or
   will incur expenditures for overhead costs that are directly
   and indirectly allocable to the ENA Group, the funding will
   be re-paid by reducing the amount of the ENA Loan, until the
   ENA Loan has been paid in full;

4. In the event a determination of whether ENA has a primary
   economic interest in a particular entity cannot be made in a
   reasonable time, Enron Corp. will fund the allocation
   obligation until the Debtors, in their business judgment and
   in consultation with the Creditors' Committee and the ENA
   Examiner, are able to make the determination;

5. As an additional source of cash to fund allocations and other
   expenses of the Debtors' estates, Enron Corp. is authorized
   to borrow $250,000,000 from the New Energy Trading Company;
   provided, however, that NETCO is granted a Junior
   Reimbursement Claim as provided in the Amended CMS Order;

6. In the event a Non-Debtor is unable to fund its allocation
   of overhead or other expenses, including, without limitation,
   the Dissolution Expenses, Enron Corp. and ENA  are authorized
   to fund the allocation pursuant to the Allocation Formula on
   behalf of the Non-Debtor and the Amended CMS Order is
   modified to that extent so that the funding of the allocation
   will not be in violation or contravention of any provision of
   the Amended CMS Order, including, without limitation the
   solvency tests and Intercompany Loan limits of the Amended
   CMS Order; provided, however, the funding of the allocation
   will result in Intercompany Loans payable by the Non-Debtor
   to Enron Corp. or ENA;

7. In the event a Debtor is unable to fund its allocation of
   overhead or other expenses, including, without limitation,
   the Dissolution Expenses, Enron Corp. and ENA  are authorized
   to fund the allocation pursuant to the Allocation Formula on
   behalf of the Debtor and the Amended CMS Order is modified to
   that extent so that the funding of the allocation will not be
   in violation or contravention of any provision of the Amended
   CMS Order, including, without limitation, of the Amended CMS
   Order; provided, however, the funding of any allocation will
   result in Junior Reimbursement Claims held by Enron Corp. or
   ENA against that Debtor as provided by the Amended CMS Order;

8. The Debtors are authorized to pay up to $5,500,000 in respect
   of the Dissolution Expenses; and the Debtors may pay amounts
   above $5,500,000 in respect of Dissolution Expenses without
   seeking further Court approval; provided, however, the
   Debtors obtain the written agreement of the Creditors'
   Committee and the ENA Examiner; and

9. The Debtors, in consultation with the ENA Examiner and the
   Creditors' Committee, will revisit the allocation of vacant
   space in their Houston headquarters building once 25% of the
   currently occupied space is vacated.

                         *    *    *

Enron Corporation and its debtor-affiliates, in compliance with
the Amended Cash Management System Order, proposed to implement
the Allocation Formula, for allocation of shared overhead and
other expenses among the Debtors and Non-Debtors from and after
the Petition Date.

The Amended Cash Management System Order, the Debtors were
directed to develop a formula to allocate shared overhead
expenses.  Thus, in consultation with the Creditors' Committee
and the ENA Examiner, the Debtors and their professionals,
developed certain principles to guide their efforts in
formulating the most appropriate method of shared overhead
allocation.  These principles include, without limitation:

    -- developing a flexible, simplified and streamlined
       allocation process;

    -- providing for the allocation of clearly defined expenses
       to the respected beneficiary entities;

    -- identifying Enron Corp. staff positions 100% dedicated to
       the Debtors' Chapter 11 reorganization process;

    -- using Cost Accounting Standard 403 of the Federal Cost
       Accounting Standards as a guide for allocating shared
       overhead expenses; and

    -- providing procedures for monitoring and modification of
       allocations due to changes in circumstances.

Under the Allocation Formula, shared overhead expenses include,
but not limited to: salaries and benefits, employee expenses,
outside services, payroll taxes, depreciation and general
business expenses like supplies, rents and computer related
costs.  The Allocation Formula also provides for the allocation
of other expenses not directly related to overhead, including
expenses for professional services, employee-related expenses
and expenses related to the dissolution or wind-down of certain
of the Enron Companies.

                   Allocation Methodologies

Each month, the Debtors will calculate an amount for each
Department based on the last known month's actual results and
adjusted for any expected material differences.  The methodology
for allocation of Department Overhead Expense varies from one
Department to another, depending on whether the expense may be
categorized as an indirect expense or direct expense.

A. Allocation of indirect overhead expenses

   The methodology for allocating the Department Overhead
   Expense in this category to a particular entity requires a
   determination of that entity's average assets and revenues
   and, if the entity is a Debtor, also that entity's average
   assets and liabilities.

   AAR is determined by calculating the average of:

    (a) the percentage of assets held by the particular legal
        entity at a given month's end as compared to all legal
        entities to receive allocations; and

    (b) the percentage of the average absolute value of revenues
        generated by a particular legal entity over the trailing
        three months from the date the allocation factor is set
        as compared to all legal entities to receive allocations
        over the same trailing three months.

   AAL is determined by calculating the average of:

    (a) the percentage of assets held by a particular Debtor at
        a given month's end as compared to all Debtors in the
        same month; and

    (b) the percentage of liabilities owed by a particular
        Debtor at a given month's end as compared to all Debtors
        in the same month.

   For a Department consisting of indirect expenses, the
   Department Overhead Expense is made up of:

    (a) expenses associated with Enron staff positions
        identified as 100% dedicated to the Debtors' Chapter 11
        cases -- Dedicated Bankruptcy Expenses; and

    (b) all other expenses -- Net Department Expenses.

   The allocable amount of the Department Overhead Expense for a
   particular legal entity depends on whether it is a Debtor or
   Non-Debtor.  If a legal entity is a Debtor, the allocable
   amount of the Department Overhead Expense is calculated by
   adding the product of the Debtors entity's AAL and the
   Dedicated Bankruptcy Expense.  If the legal entity is a Non-
   Debtor, then the allocable amount of the Department Overhead
   Expenses is calculated by multiplying the Non-Debtor entity's
   AAR times the Net Department Expense.

B. Allocation of direct overhead expenses

   Direct expenses are those related to the use or benefit of
   some corporate service by a legal entity and are allocated
   directly to that legal entity based on use or benefit.
   Similarly, Risk Management property insurance premiums will
   be directly allocated to the entity holding the property.

C. Allocation of professional services expenses

   Professional services expenses relate to costs incurred by
   retained legal and other professionals and are allocated by
   utilizing AAL.  With respect to expenses for professional
   services directly attributable to a legal entity whether
   Debtor or Non-Debtor, the expense will be allocated directly
   to the entity.  With respect to expenses for professional
   services not directly attributable to one particular entity:

   (a) expenses attributable to more than one Debtor will be
       allocated based on an average of the percentage of assets
       and liabilities of the attributable Debtors;

   (b) expenses attributable to more than one Non-Debtor will be
       allocated based on an average of the percentage of assets
       and liabilities of the attributable Non-Debtors; or

   (c) expenses that cannot be split between the Debtors and
       Non-Debtors will be allocated to all attributable Debtors
       and Non-Debtors based on the overall proportional split
       of all other expenses in that period by each entity.

D. Allocation of employee-related expenses

   Retention expenses for employees of Enron Corp., ENW and EPSC
   will be charged to the department to which the person is
   assigned; these expenses will then be allocated based on the
   department's proposed allocation process.  Retention payments
   to all other Enron employees will be charged directly to the
   entity that picks up the expenses for that employee.
   Similarly, severance expenses relating to employees of Enron
   Corp., ENW and EPSC will be allocated to the department
   incurring the severance expenses, then allocated based on the
   proposed methodology.  Certain payroll expenses of ENW are
   indirect and will be allocated to the Enron Companies'
   wholesale and retail businesses, as they relate solely to
   those businesses, based on the AAR/AAL methodology.

E. Allocation of dissolution or wind-down expenses

   The Dissolution Expenses for subsidiaries of ENA will be
   allocated directly to ENA; and the Dissolution Expenses for
   all other subsidiaries will be allocated directly to Enron
   Corp.  The Debtors estimate that the maximum aggregate amount
   of the Dissolution Expenses is $5,500,000 through the end of
   2003.

              Funding and Monitoring of Allocations

For the provision of funds for allocation with respect to
monthly cash settlements of allocated overhead:

    (a) escrowed amounts will be available to fund overhead
        allocated to the entity holding the escrow account;

    (b) as an additional source of cash to fund allocations and
        operations of the estate, Enron Corp. will borrow
        $250,000,000 from the New Energy Trading Company;

    (c) generally, all entities will fund their own allocation
        to the extent they are able give these criteria:

        -- insolvency and liquidity constraints;

        -- regulation and rate base constraints;

        -- repatriation restrictions for foreign subsidiaries;

        -- absence of contractual right to charge entities not
           wholly owned;

    (d) ENA will fund in lieu of ENA subsidiaries that are
        unable to meet their allocation obligations, and Enron
        Corp., will fund in lieu of all other subsidiaries that
        are unable to meet their allocation obligations;

    (e) ENA-specific provisions:

        -- With respect to ENA, its subsidiaries, Enron Power
           Marketing Inc. and Enron Natural Gas Marketing Corp,
           and ENA subsidiaries unable to fund their own
           allocation obligations, for the period between the
           Petition Date through July 31, 2002, to the extent
           Enron Corp. has incurred direct expenditures and
           direct and indirect allocable overhead expenses on
           behalf of ENA, EPMI, ENGM or the ENA Non-Funding
           Subs, the funding will be re-paid by ENA to Enron
           Corp., by reducing the amount of the ENA Loan;

        -- With respect to ENA, EPMI, ENGM, and the ENA-Non-
           Funding-Subs, for the period following July 31, 2002,
           to the extent Enron Corp. has incurred direct
           expenditures (only) on behalf of ENA, EPMI, ENGM or
           the ENA-Non-Funding-Subs the funding will be re-paid
           in cash by ENA, EPMI and/or ENGM to Enron Corp.; and

        -- With respect to ENA, EPMI, ENGM, and the ENA-Non-
           Funding-Subs, for the period following July 31, 2002,
           to the extent Enron Corp. has incurred or will incur
           expenditures for directly and indirectly allocable
           overhead expenses on behalf of ENA, EPMI, ENGM or the
           ENA-Non-Funding-Subs, such funding will be re-paid by
           reducing the amount of the ENA Loan, until such Loan
           has been paid in full.  Thereafter, the amounts will
           be paid in cash by ENA.

Furthermore, the Debtors will institute a monitoring process
involving the Creditors' Committee and the ENA Examiner to
ensure that the proposed Allocation Formula protects the rights
and interests of the Debtors, Non-Debtors and their respective
creditors.  The Debtors will continue to work with the
Creditors' Committee and the ENA Examiner to oversee and
evaluate the allocation of shared overhead and other expenses,
and verify data accuracy and application of the allocation
methodology.  In addition, a quarterly review of the Allocation
Formula and the application thereof will be conducted by the
Debtors, in consultation with the Creditors' Committee and the
ENA Examiner, to assess and determine the need for modification.
(Enron Bankruptcy News, Issue No. 51; 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.


EOTT ENERGY: Intends to Assume 2 Premium Financing Agreements
-------------------------------------------------------------
One of the U.S. Trustee's requirements is that EOTT Energy
Partners, L.P., and its debtor-affiliates must maintain
insurance customary in their business as well as casualty
insurance, workers' compensation insurance, general liability
insurance and product liability insurance, and make all premium
payments on these insurance when due.

Prior to the Petition Date, Robert D. Albergotti, Esq., at
Haynes and Boone LLP, in Dallas, Texas, relates, the Debtors
financed their general liability, property and casualty, and
workers' compensation insurance premiums through Imperial A.I.
Credit Companies and Cananwill, Inc.

Accordingly, the Debtors seek the Court's authority to assume
the Premium Financing Agreements to give Imperial and Cananwill
the assurances they need to continue doing business with them.

Mr. Albergotti contends that the assumption is necessary because
pursuant to the terms of the Premium Financing Agreements, in
the event the Debtors default, Imperial or Cananwill may cancel
the policies and may receive and apply the unearned or return
premiums to the Debtors' account.  In the event monies still
remain due to Imperial or Cananwill, the deficiency will be
recognized as an administrative expense claim pursuant to
Section 503(b) of the Bankruptcy Code.

Moreover, Mr. Albergotti asserts, the assumption of the Premium
Financing Agreement is based on valid business justifications:

    (a) this method of financing insurance policy premiums is
        ordinary and customary in the Debtors' industry;

    (b) the Debtors are required to maintain insurance by the
        U.S. Trustee and make payments of the insurance
        premiums; and

    (c) the Premium Financing Agreements obviate the Debtors'
        need to pay the entire premium for each policy at one
        time, enabling them to better manage their use of cash.

The Debtors may be required during these Chapter 11 cases to
enter into similar premium financing agreements on new policies
to renew or replace existing policies.  Thus, the Debtors
further seek the Court's authority to enter into new premium
financing agreements from time to time, as appropriate, without
further Court order.

Mr. Albergotti proposes that instead of filing a new motion to
the Court, the Debtors will notify the U.S. Trustee, the
Official Committee of Unsecured Creditors and secured lenders in
writing of their intention to enter into a new premium financing
agreement.  If no objection is received within five business
days after notice, the Debtors will enter into the new premium
financing agreement without further Court order.  Otherwise, the
Debtors will file a motion with the Court requesting authority
to enter into the new premium financing agreement.  Mr.
Albergotti contends that this procedure provides sufficient
safeguard to the Debtors' creditors while permitting the Debtors
freedom to enter into new premium financing agreement without
the expense of filing and serving motions for approval of
premium financing agreements. (EOTT Energy Bankruptcy News,
Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-0900)


EXTREME NETWORKS: S&P Junks $200MM 3.5% Conv. Sub. Note Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating and stable outlook to Extreme Networks Inc. At the
same time, Standard & Poor's assigned its 'CCC+' rating to the
company's $200 million 3.5% convertible subordinated notes due
2006.

Santa Clara, California-based Extreme Networks makes data
networking switches for enterprise customers and metropolitan-
area networks, using the Ethernet technology originally designed
for local-area networks. The company had $227 million of debt
outstanding at September 30, 2002.

Extreme Networks holds a second-tier position in the networking
switch industry and has adequate financial flexibility, offset
by very aggressive industry conditions, weak profitability, and
constrained free cash flows.

"Competitive marketplace challenges are substantial, while
growth in the company's target market could well be
substantially delayed," said Standard & Poor's credit analyst
Bruce Hyman. "Still, the company is expected to retain
sufficient financial flexibility to continue product development
over the intermediate term."

Extreme competes against a number of networking companies, some
of which have far greater financial flexibility. In addition, a
number of companies in adjacent markets have the technologies
and resources to enter the enterprise Ethernet market,
potentially further challenging the company's prospects.


FEDERAL-MOGUL: Signs-Up DoveBid as Lighting Business Auctioneer
---------------------------------------------------------------
Two years ago, Federal-Mogul Corporation and its debtor-
affiliates began implementing an investment strategy initiative
that focused on their core competencies.  As part of that
process, the Debtors marketed non-core businesses, including
their lighting business, and closed plants that formerly housed
the lighting business.

One of the plants the Debtors closed is the lighting facility
located in Franklin Park, Illinois.  The Franklin Park Facility
formerly produced lighting products for General Motors.  
However, GM has contracted with Samlip America, Inc., to produce
those products in the future.

The equipment at the Franklin Park Facility falls into roughly
two categories:

1. Those equipment relevant to the work that the Debtors did for
   GM.  At the onset of their Chapter 11 cases, the Debtors sold
   the equipment as de minimis assets to Samlip for $162,300
   since Samlip would be performing the work for GM, in their
   place; and

2. The remaining lighting equipment suited for general industry
   use.  This equipment have not been sold.

By this application, the Debtors seek the Court's authority to
employ DoveBid, Inc. to act as their auctioneer in connection
with the sale of the remaining lighting equipment.

James E. O'Neill, Esq., at Pachulski Stang Ziehl Young & Jones,
P.C., tells Judge Newsome that DoveBid was selected from a pool
of a half-dozen different auctioneers who made proposals to sell
the equipment.  The Debtors chose DoveBid because it has
extensive experience and expertise in marketing and selling
industrial equipment and was able to provide high quality
services at a price that is in line with what the other
auctioneers were offering.

As auctioneer, DoveBid will render these services:

  (a) Consult with the Debtors and their advisors to create and
      implement an appropriate strategy to sell the equipment;

  (b) Prepare, advertise and conduct public auctions of the
      equipment -- in person and through the use of internet
      resources;

  (c) Collect the sale proceeds and applicable taxes from the
      purchasers of the equipment and remit those proceeds, less
      the allowed compensation and expenses, to the Debtors.

Based on the estimates by DoveBid and other auctioneers, the
Debtors could sell the remaining lighting equipment for between
$300,000 and $400,000.

Mr. O'Neill relates that DoveBid has specialized in sales and
auctions to businesses worldwide.  Having spent 63 years in the
business, DoveBid is the global leader in the disposition of
idle, surplus and obsolete capital assets.  Mr. O'Neill also
states that DoveBid's wide-ranging experience also extends to
transactions involving financially troubled assets, including
numerous transactions within the confines of chapter 11 and its
Canadian equivalent.  Its professionals enjoy an excellent
reputation for the services that they have rendered in large and
complex chapter 11 cases throughout the United States.

DoveBid also maintains a sophisticated Internet website enabling
it to market assets to millions of individuals who otherwise may
not have had access to those assets and conduct both live
auction and broadcast auction over the internet to encompass a
broader audience of buyers than a conventional auction.  Among
others, DoveBid has conducted auctions and private asset sales
on behalf of AT&T, Boeing, DaimlerChrysler, Hewlett-Packard,
Levi Strauss, Lockheed Martin and Warner Brothers.

On December 10, 2002, the Debtors and DoveBid held an auction
for the lighting equipment at the Franklin Park Facility and
over the Internet.  Pursuant to an Exclusive Auction Agreement
dated November 13, 2002, Mr. O'Neill reports that DoveBid
retained the proceeds of the auction in a client trust account
until both parties have accounted for all sales and sales
proceeds.  Once DoveBid has collected all of the sales proceeds,
and the Bankruptcy Court has authorized its employment, DoveBid
will remit the net proceeds of the auction to the Debtors.  The
parties also agreed that, rather than having the Debtors pay
DoveBid a commission on the equipment sold, the successful
purchasers of equipment would pay a "Buyer's Premium" directly
to DoveBid equal to 15% of the successful bid price, 1% of
Buyer's premium, however, will go to the Debtors.  The Buyer's
Premium is further subject to:

    * a 3% reduction if the buyer pays in cash, cashier's check,
      company check or wire transfer; and

    * an additional 2% reduction if the buyer bids in person
      rather than over the Internet.

The Debtors will reimburse DoveBid up to $36,200 for marketing
expenses, labor and travel expenses.

James Sklar, Associate General Counsel of DoveBid, discloses
that certain parties-in-interest in the Debtors' proceedings
invest or hold equity interests in DoveBid: GE Capital,
Comdisco, DataStream, GoneTrader, TradeOut, Sun Microsystems,
and Ford Motor Credit.  However, Mr. Sklar assures the Court
that DoveBid:

  -- is not and was not a creditor, equity security holder or
     insider of the Debtors;

  -- is not and was not an investment banker for any outstanding
     security of the Debtors;

  -- is not and was not, within three years before the Petition
     Date, an investment banker for a security of the Debtors,
     or an attorney for any investment banker in connection with
     the offer, sale or issuance of any security of the Debtors;

  -- is not and was not, within two years before the Petition
     Date, a director, officer or employee or of any investment
     banker for any security of the Debtors; and

  -- has no interest materially adverse to the interest of the
     Debtors' estates or of any class of creditors or equity
     security holders. (Federal-Mogul Bankruptcy News, Issue No.
     28; Bankruptcy Creditors' Service, Inc., 609/392-0900)


FLOWER FOODS: Fitch Expects Company to be Cash Flow Neutral
-----------------------------------------------------------
Flowers Foods, Inc.'s announcement that Mrs. Smith's Bakeries'
fourth quarter earnings will be significantly below plan and
that the board approved a share repurchase plan for five million
shares does not have rating implications, according to Fitch
Ratings. Fitch rates Flowers' senior secured credit facilities
'BB+'. The Rating Outlook is Positive, reflecting expectations
for improving cash flow and stable debt levels.

Although Mrs. Smith's Bakeries' earnings were below plan, the
division's performance has improved significantly from prior
years and is expected to be cash flow neutral. Additionally,
Fitch anticipates that the share repurchase program, which is
expected to cost about $100 million and be implemented over 3
years, will be funded with internally generated cash flow and
will not have a significant impact on Flowers' credit
statistics.

Total debt at Oct. 5, 2002, was $245 million, a reduction of $87
million since the March 2001 spin-off of Flowers. For the latest
twelve months ended Oct. 5, 2002, total debt-to-EBITDA improved
modestly to 2.0 times from 2.2x for the year ended Dec. 29, 2001
and EBITDA-to-interest incurred grew to 5.4x from 3.2x.


FONIX CORP: Limited Capital Raises Going Concern Doubt
------------------------------------------------------
Fonix Corporation's revenues increased from $132,713 for the
three months ended March 31, 2001, to $298,785 for the three
months ended March 31, 2002. However, the Company has incurred
significant losses since inception, including a loss of
$5,244,640 for the three months ended March 31, 2002. The
Company incurred negative cash flows from operating activities
of $4,810,053 during the three months ended March 31, 2002.
Sales of products and revenue from licenses based on the
Company's technologies have not been sufficient to finance
ongoing operations. As of March 31, 2002, the Company had
negative working capital of $4,611,713 and an accumulated
deficit of $179,353,995. The Company has limited capital
available under its equity lines of credit. These matters raise
substantial doubt about the Company's ability to continue as a
going concern. The Company's continued existence is dependent
upon several factors, including the Company's success in (1)
increasing license, royalty and services revenues, (2) raising
sufficient additional funding and (3) minimizing operating
costs.

Since inception, Fonix has devoted substantially all of its
resources to research, development and acquisition of software
technologies that enable intuitive human interaction with
computers, consumer electronics, and other intelligent devices.
Through March 31, 2002, the Company has incurred significant
cumulative losses, and losses are expected to continue until the
effects of recent marketing and sales efforts begin to take
effect, if ever. The Company has experienced slower development
of markets for speech applications than had been anticipated due
to several factors. First, the limited resources with which the
Company has been operating (due to the delay in accessing funds
from the third equity line) have hampered the Company's ability
to aggressively support marketing and sales as originally
anticipated. Additionally, time and resources required to
develop certain applications have been greater than originally
anticipated, and, with limited resources available, the Company
has not been able to expedite such development. Further, the
ongoing U.S. economic slowdown has slowed customer acceptance in
target markets, especially in the telecommunications sector
where previously expected recovery has yet to materialize, but
has deteriorated further. Each of these factors had a
significant impact on the Company's ability to achieve
significant growth in the markets it has chosen to develop. The
occurence of these conditions has caused the Company to (i)
reduce its emphasis on consumer applications because of the
significant resources required to develop retail markets, (ii)
reduce its development and marketing efforts in the computer
telephony and server-based markets, and (iii) increase its
emphasis and focus on mobile and wireless applications,
automotive speech interface solutions and assistive markets,
where management believes the Company enjoys the greatest
technological and market advantage.

The Company must raise additional funds to be able to satisfy
its cash requirements during the next 12 months. Research and
development, corporate operations and marketing expenses will
continue to require additional capital. Because the Company
presently has only limited revenue from operations, the Company
intends to continue to rely primarily on financing through the
sale of its equity and debt securities to satisfy future capital
requirements until such time as the Company is able to enter
into additional third-party licensing, collaboration or co-
marketing arrangements such that it will be able to finance
ongoing operations from license, royalty and services revenues.
There can be no assurance that the Company will be able to enter
into such agreements. Furthermore, the issuance of equity or
debt securities which are or may become convertible into equity
securities of the Company in connection with such financing
could result in substantial additional dilution to the
stockholders of the Company. At March 31, 2002, the Company had
$2,000,000 available to draw under its equity lines of credit.


FRIEDE GOLDMAN: Court Approves Offshore Division Asset Sale
-----------------------------------------------------------
Friede Goldman Halter, Inc., (OTCBB: FGHLQ) has received
approval from the United States Bankruptcy Court for the
Southern District of Mississippi, Southern Division, for the
sale of substantially all of the assets of the Friede Goldman
Offshore Division based in Pascagoula, Mississippi, and in
Orange and Port Arthur, Texas, to ACON Offshore Partners, LP and
its affiliates.

The sale to ACON, which is expected to close in early January
2003, includes US$18 million in cash and the assumption of US$43
million in debt. "We greatly appreciate the cooperation of the
secured lenders, GE Capital Public Finance and the US Maritime
Administration in agreeing to the assumption of their secured
claims by ACON," said Jim Decker, Director of Houlihan Lokey
Howard & Zukin, the Financial Advisor to FGHLQ who arranged the
asset sale.

"We are pleased and expect that ACON will offer employment to
substantial numbers of former employees of the Friede Goldman
Offshore Division. We expect that ACON will be a significant
player in the offshore industry," Decker said.

The new company will operate its acquired assets in Pascagoula,
Miss. and Port Arthur, Texas under the name of Signal
International, LLC. Signal will provide new construction,
upgrade and repair of all types of offshore drilling rigs,
floating production units, and inland and offshore drilling and
derrick barges.

Friede Goldman Halter has been advised by ACON Investments that
ACON is an international private equity investment firm, which
manages investments in the United States, Europe and Latin
America. ACON's partnerships typically include sophisticated
institutional investors from the U.S., Europe and Latin America.
Among its activities, ACON is affiliated with Texas Pacific
Group. TPG manages over $5.7 billion worldwide. Friede Goldman
Halter is further informed that ACON typically utilizes a
thematic investment approach to identify investments at times of
inflection points and that ACON's investment philosophy is to
identify opportunities in industries with attractive dynamics
and to pursue those opportunities in partnership with
established management teams.

"We are about to bring to a close a very challenging period in
our company's history," said Ron Schnoor, President of Friede
Goldman Offshore, who will continue as a member of Signal's
senior management team.

Schnoor continued, "We are very excited about the opportunities
that the new company, Signal International, will have upon
exiting the bankruptcy. I am confident we will return this very
committed and talented organization to its pre-eminent position
in our industry."

Having received Bankruptcy Court approval of the sale of the
Offshore Division, Friede Goldman Halter intends to turn now to
promulgation of a plan of reorganization. The Company expects to
file its plan early in the first quarter of 2003. As previously
reported, the company does not expect that existing equity
security holders will receive any recovery under the plan.


GENUITY INC: Turning to Lazard Freres for Financial Advice
----------------------------------------------------------
Genuity Inc., and its debtor-affiliates ask the Bankruptcy Court
for permission to employ and retain Lazard Freres & Co., LLC as
their financial advisors and investment bankers.  The Debtors
agree, under the terms of an engagement letter dated July 25,
2002, to pay Lazard roughly $9,000,000 for its expert advice.

According to Lazard Managing Director Barry Ridings, the Firm
was founded in New Orleans, Louisiana, in 1848 and is a private
investment banking firm with 2,700 employees, and 25 offices in
16 countries, including U.S. offices in New York, Chicago and
San Francisco.  Lazard's focus is on providing financial and
investment banking advice and transaction execution on behalf of
its clients.  Lazard's broad range of corporate advisory
services includes services pertaining to:

    -- general financial advice;

    -- domestic and cross-border mergers and acquisitions;

    -- divestitures;

    -- privatization;

    -- special committee assignments;

    -- takeover defenses;

    -- corporate restructurings; and

    -- strategic partnerships/joint ventures.

In addition, Lazard maintains a presence in capital markets and
has a significant asset management business.  Lazard is a
registered broker-dealer and an investment adviser with the
United States Securities and Exchange Commission and is also a
member of the New York, American and Chicago Stock Exchanges,
the National Association of Securities Dealers and the SIPC.

J. Gregory Milmoe, Esq., at Skadden Arps Slate Meagher & Flom
LLP, in New York, explains that the Debtors seek to retain
Lazard as their financial advisors and investment bankers
because the Firm and its senior professionals have an excellent
reputation for providing high quality financial advisory and
investment banking services to debtors and creditors in
bankruptcy reorganizations and other debt restructures, and its
knowledge of the Debtors' financial and business operations.  
Specifically, Lazard has developed its knowledge of the Debtors'
financial and business operations in connection with its
assistance to the Debtors in preparing for the commencement of
these proceedings, including:

  A. Advise and meet with management, the Board of Directors and
     its committees with respect to various financial matters;

  B. Assist the Debtors and their counsel in evaluating their
     businesses, assets and operations;

  C. Assist the Debtors in negotiating and communicating with
     the holders of the Debtors' various debt issues with
     respect to various matters.

In addition to Lazard's understanding of the Debtors' financial
history and business operations and the telecommunications and
Internet industries, Lazard and its senior professionals have
extensive experience in the reorganization and restructuring of
troubled companies, both out-of-court and in Chapter 11
proceedings.  Lazard's employees have advised debtors,
creditors, equity constituencies and government agencies in many
complex financial reorganizations.  Since 1990, these
professionals have been involved in over 200 restructurings,
representing over $300,000,000,000 in restructured debt.

Mr. Milmoe points out that the professionals of Lazard have been
employed as financial advisors and investment bankers in a
number of troubled company situations, including the Chapter 11
cases of Adelphia Communications, Hayes Lemmerz, Kaiser
Aluminum, Metrocall, 360networks, Exodus Communications,
Teleglobe, National Steel, Formica, Owens Corning, Fruit of the
Loom, Vlasic Foods International, Armstrong Worldwide
Industries, Loews Cineplex, American Pad & Paper, Stone &
Webster, Safety-Kleen, Inc and WorldCom, Inc.

Mr. Milmoe believes that Lazard is familiar with the Debtors'
business and financial affairs and is well-qualified to provide
the services required.  Prior to the Petition Date, the Debtors
engaged Lazard to provide advice in connection with the
preparation for the commencement of these cases.  In providing
prepetition services to the Debtors in connection with these
matters, Lazard's professionals have worked closely with the
Debtors' management and other professionals and have become
well-acquainted with the Debtors' operations, debt structure,
business and operations and related matters.  Accordingly,
Lazard has developed significant relevant experience and
expertise regarding the Debtors that will assist it in providing
effective and efficient services in these cases.

Mr. Milmoe believes that the resources, capabilities, and
experience of Lazard in advising the Debtors are crucial to the
Debtors' successful restructuring.  An experienced financial
advisor like Lazard fulfills a critical need that complements
the services offered by the Debtors' other restructuring
professionals.  Lazard will concentrate its efforts on:

    -- formulating strategic alternatives;

    -- negotiating with the Debtors' banks, bondholders, and
       other creditor constituencies; and

    -- assisting the Debtors to formulate and implement a viable
       Chapter 11 reorganization plan.

Neither law firms nor accounting firms have the experience or
resources to do this kind of work.

Prior to retaining Lazard, Mr. Milmoe tells the Court that the
Debtors' senior management interviewed senior personnel of, and
considered proposals from, other financial advisory and
investment banking firms.  The Debtors evaluated each firm on a
number of criteria, including:

    -- the overall restructuring experience of each firm and
       their professionals;

    -- the overall financial advisory and investment banking
       capabilities of the firm;

    -- the firm's experience in advising large companies in
       Chapter 11;

    -- the likely attention of the senior personnel of the firm;
       and

    -- the compensation to be charged.

After due consideration of these criteria, the Debtors concluded
that Lazard was best qualified to provide financial advisory and
investment banking services to the Debtors at a reasonable level
of compensation.

Specifically, Lazard will:

    A. Review and analyze the Debtors' business, operations and
       financial projections;

    B. Evaluate the Debtors' potential debt capacity in light of
       its projected cash flows;

    C. Assist in the determination of a capital structure for
       the Debtors;

    D. Determine a range of values for the Debtors on a going
       concern basis;

    E. Advise the Debtors on tactics and strategies for
       negotiating with the holders of the Existing Obligations;

    F. Render financial advice to the Debtors and participating
       in meetings or negotiations with the Stakeholders and
       rating agencies or other appropriate parties in
       connection with any restructuring, modification or
       refinancing of the Debtors' Existing Obligations;

    G. Advise the Debtors on the timing, nature, and terms of
       new securities, other consideration or other inducements
       to be offered pursuant to the Restructuring;

    H. Assist the Debtors in preparing documentation within
       their expertise required in connection with the
       Restructuring;

    I. Advise and attend meetings of the Debtors' Boards of
       Directors and their committees;

    J. Provide testimony, as necessary, in any proceeding before
       the Bankruptcy Court;

    K. Provide the Debtors with other general restructuring
       Advice;

    L. Assist the Debtors in the preparation of a liquidation
       analysis in connection with a proposed Chapter 11 plan of
       reorganization; and

    M. Assist the Debtors in finding bidders for all or part of
       the Debtor's business.

Mr. Ridings assures the Court that neither Lazard nor any
professional employee of Lazard has any connection with or holds
any interest adverse to, the Debtors, their significant
creditors, or any other party-in-interest, or their attorneys or
accountants, or the Office of the United States Trustee or any
person employed in the Office of the United States Trustee, in
the matters for which Lazard is proposed to be retained.  In
addition, Lazard is a "disinterested person," as defined in
Section 101(14) of the Bankruptcy Code.  However, Lazard
currently represents or in the past has represented in unrelated
matters these parties: Arthur Andersen LLP, Chase Manhattan
Bank, Citicorp USA Inc., Credit Suisse First Boston, Bank of New
York, SBC, Comdisco, State Street bank, CAP Gemini, Philippe
Dauman, Sita Foundation, WorldCom, AOL Time Warner, KPNQwest,
Nortel Networks, AT&T, Cisco Systems, Prudential Plaza
Associates, RREEF USA Fund-II, and Robertson Stephens.

Pursuant to the Engagement Letter, Mr. Ridings relates that the
Debtors paid $1,250,000 to Lazard in monthly advisory fees --
the Monthly Advisory Fee of $250,000 for five months from
July 25, 2002 through November 25, 2002.  The Debtors also paid
Lazard a $25,000 retainer which is to be credited against any
unpaid prepetition invoices and unbilled fees, charges, and
disbursements.  The unused portion of the retainer will be held
by Lazard and applied against any of the fee applications filed
and approved by the Court.  During the prepetition period, the
Debtors paid Lazard in full for all prepetition fees and billed
expenses.

The Debtors have agreed that fees for the services rendered in
these cases will be:

    A. A monthly fee of $250,000, payable in advance of each
       month's service, the first payment of which will be due
       on the 25th day of each month thereafter until the
       earlier of the completion of the Restructuring or the
       termination of Lazard's engagement; and

    B. A cash fee equal to $9,000,000 payable on the final
       consummation of a Restructuring, provided, however, that
       commencing with the payment due on November 25, 2002, any
       monthly fees will be credited against any Restructuring
       Fee, provided, further, that in no event will the Debtors
       be required to pay the Restructuring Fee more than once.

As part of the overall compensation payable to Lazard under the
terms of the Engagement Letter, the Debtors have agreed to
certain indemnification and contribution obligations as
described in the Indemnification Letter.  Lazard and the Debtors
believe that these provisions are customary and reasonable for
financial advisory and investment banking engagements, both out-
of-court and in Chapter 11.

The Debtors acknowledge and agree that Lazard's restructuring
expertise, as well as its capital markets knowledge, financing
skills and mergers and acquisitions capabilities, some or all of
which may be required by the Debtors during the term of Lazard's
engagement, were important factors in determining the amount the
Monthly Advisory Fees and the Restructuring Fee, and that the
ultimate benefit to the Debtors of Lazard's services likely
could not be measured merely by reference to the number of hours
to be expended by Lazard's professionals in the performance of
these services.

According to Mr. Milmoe, the contingent Restructuring Fee has
been agreed on by the parties in anticipation that a substantial
commitment of professional time and effort will be required of
Lazard and its professionals, and in light of the fact that this
commitment may foreclose other opportunities for Lazard and that
the actual time and commitment required of Lazard and its
professionals to perform services may vary substantially from
week to week or month to month, creating "peak load" issues for
the firm.

The Debtors believe that the fee structure and indemnification
provisions set forth in the Engagement Letter and
Indemnification Letter are reasonable terms and conditions of
employment and should be approved under Bankruptcy Code Section
328(a).  The fee structure and indemnification provisions
appropriately reflect:

    -- the nature of the services to be provided by Lazard; and

    -- the fee structures and indemnification provisions
       typically utilized by Lazard and other leading financial
       advisory and investment banking firms, which do not bill
       their clients on an hourly basis and generally are
       compensated on a transactional basis.

In particular, the Debtors believe that the proposed fee
structure creates a proper balance between fixed, monthly fees
and contingency fees based on the successful consummation of the
Restructuring.

The Debtors submit that the fee structure and indemnification
provisions are reasonable terms and conditions of employment in
light of:

    -- industry practice;

    -- market rates charged for comparable services both in and
       out of the Chapter 11 context;

    -- Lazard's substantial experience with respect to financial
       advisory and investment banking services; and

    -- the nature and scope of work already performed by Lazard
       prior to the Petition Date and to be performed by Lazard
       in these Chapter 11 cases. (Genuity Bankruptcy News,
       Issue No. 3; Bankruptcy Creditors' Service, Inc.,
       609/392-0900)


GLOBAL CROSSING: Wants Go-Signal to Dissolve Two UK Subsidiaries
----------------------------------------------------------------
Global Crossing Ltd., and its debtor-affiliates seek the Court's
authority to dissolve certain foreign Global Crossing entities
and to enter into related transactions pursuant to Section 363
of the Bankruptcy Code.

Michael F. Walsh, Esq., at Weil Gotshal & Manges LLP, in New
York, explains that the GX Debtors seek this relief because the
affiliates they are seeking to dissolve -- debtor Global
Crossing Holdings UK Limited and non-debtor Global Crossing
Marketing (UK) Ltd. -- were unable to file their "Statutory
Accounts," as required by the laws of the United Kingdom.

"Statutory Accounts" refer to the accounts that must be filed
with the Companies House -- the corporate regulatory agency for
England and Wales -- annually.  Each company must prepare a
profit and loss account and a balance sheet.  Where a company
has subsidiaries, the accounts must also be prepared on a
consolidated basis.  The accounts are filed along with reports
from the directors and the auditors of the company confirming
their accuracy.  Filing of Statutory Accounts is required under
laws of the United Kingdom.  The "Companies House" is an entity
in the United Kingdom similar to the Securities and Exchange
Commission.  The Companies House monitors the activities of
corporations and companies in the United Kingdom.

Failure to file Statutory Accounts could result in fines,
penalties and even criminal liability for the directors.  A
director may be banned from serving as a director of another
company for as long as five years as punishment for failing to
file.  The directors of all 20 Global Crossing UK subsidiaries,
including Holdings UK and Marketing UK are, with few exceptions,
identical.

Because of the ongoing threat of civil and criminal liability
for failure to file Statutory Accounts, Mr. Walsh relates that
the Debtors filed an application to "strike Holdings UK and
Marketing UK off the register."  Essentially, this filing means
that the GX Debtors are seeking to dissolve Holdings UK and
Marketing UK and remove these entities from their corporate
structure.  A result of this dissolution, if approved by this
Court, will be to relieve the directors of Holdings UK and
Marketing UK of any potential liability resulting from failure
to file Statutory Accounts.

According to Mr. Walsh, an application to strike a company off
the record requires a 3-month notice period after the Companies
House provides publication notice of the application before the
company is stricken off the list of registered companies.  Any
time prior to the terminations of the three-month period, an
application to strike off can be withdrawn.  For Global
Crossing, the three-month notice period terminates for Holdings
UK and Marketing UK on January 1 and January 8, 2003.

Mr. Walsh contends that the GC UK Subsidiaries are under
considerable pressure to dissolve Holdings UK and Marketing UK.
Absent the dissolution of Holdings UK and Marketing UK, some or
all of the directors of the GC UK Subsidiaries may resign,
creating uncertainty for the Debtors' UK operations.  The
dissolution will protect current directors of the GC UK
Subsidiaries from the threat of sanctions for failure to file
Statutory Accounts on behalf of Marketing UK and Holdings UK.
Protecting these directors in this way will stabilize the
Debtors' operations in the United Kingdom. (Global Crossing
Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


HAYES LEMMERZ: Plan's Classification and Treatment of Claims
------------------------------------------------------------
Hayes Lemmerz International, Inc., and its debtor-affiliates
present this table summarizing the classification and treatment
of the principal prepetition Claims and Interests under the
proposed Chapter 11 Plan and in each case reflects the amount
and form of consideration that will be distributed in exchange
for these Claims and Interests and in full satisfaction,
settlement, release and discharge of these Claims and Interests:

Class  Description            Treatment
-----  ---------------------  ----------------------------------
1    Other Priority Claims   On the first Periodic Distribution
                              Date occurring after the later of
                              the date an Other Priority Claim
                              becomes an Allowed Other Priority
                              Claim or the date an Other
                              Priority Claim becomes payable,
                              the holder of an Allowed Other
                              Priority Claim will receive:

                              -- Cash equal to the amount of
                                 the Allowed Other Priority
                                 Claim; or

                              -- any other treatment as to which
                                 the applicable Debtor and the
                                 Claimholder will have agreed in
                                 writing.

2    Administrative          On the first Periodic Distribution
      Convenience Claims      Date occurring after the later of
                              the date an Administrative
                              Convenience Claim becomes an
                              Allowed Admin. Convenience Claim
                              or the date an Admin. Convenience
                              Claim becomes payable pursuant to
                              any agreement between a Debtor and
                              the holder of the Claim, the
                              holder of an Allowed Admin.
                              Convenience Claim will receive,
                              cash equal to:

                              -- the amount of the Allowed
                                 Administrative Convenience
                                 Claim if the amount is less
                                 than or equal to $1,500; or

                              -- $1,500 if the amount of the
                                 Allowed Administrative
                                 Convenience Claim is greater
                                 than $1,500.

3    Prepetition Credit      On the Effective Date or as soon
      Facility Secured        as practicable after it becomes an
      Claims                  Allowed Claim, each holder of an
                              Allowed Prepetition Credit
                              Facility Secured Claim will
                              Receive:

                              -- a portion of the New Senior
                                 Notes with each Claimholders'
                                 percentage distribution of New
                                 Senior Notes to be determined
                                 by the relation of its Allowed
                                 Prepetition Credit Facility
                                 Secured Claim to all Allowed
                                 Prepetition Credit Facility
                                 Secured Claims; and

                              -- a distribution of shares of New
                                 Common Stock with a value equal
                                 to the difference between the
                                 Claimholders' Allowed
                                 Prepetition Credit Facility
                                 Secured Claim less the amount
                                 of the New Senior Notes to be
                                 distributed to the Claimholder.

4a   BMO Synthetic Lease     On the Effective Date, the holder
      Secured Claims          of an Allowed BMO Synthetic Lease
                              Secured Claim will:

                              -- receive deferred cash payments
                                 totaling at least the allowed
                                 amount of the Allowed BMO
                                 Synthetic Lease Secured Claim;

                              -- after abandonment by the
                                 Debtors, receive the BMO
                                 Synthetic Lease Properties;

                              -- receive payments or liens
                                 amounting to the indubitable
                                 equivalent of the value of the
                                 Claimholder's interest in the
                                 Estates' interest in the BMO
                                 Synthetic Lease Properties;

                              -- be Reinstated; or

                              -- receive any other treatment as
                                 the Debtors and the Claimholder
                                 will have agreed in writing as
                                 announced at or prior to the
                                 Confirmation Hearing.

4b   CBL Synthetic Lease     On the Effective Date, the holder
      Secured Claims          of an Allowed CBL Synthetic Lease
                              Secured Claim will:

                              -- receive deferred cash payments
                                 totaling at least the allowed
                                 amount of the Allowed CBL
                                 Synthetic Lease Secured Claim;

                              -- after abandonment by the
                                 Debtors, receive the CBL
                                 Synthetic Lease Properties;

                              -- receive payments or liens
                                 amounting to the indubitable
                                 equivalent of the value of the
                                 Claimholder's interest in the
                                 Estates' interest in the CBL
                                 Synthetic Lease Properties;

                              -- be Reinstated; or

                              -- receive any other treatment as
                                 the Debtors and the Claimholder
                                 will have agreed on in writing
                                 as announced at or prior to the
                                 Confirmation Hearing.

4c   Dresdner Synthetic      On the Effective Date, the holder
      Lease Secured Claims    of an Allowed Dresdner Synthetic
                              Lease Secured Claim will:

                              -- receive deferred cash payments
                                 totaling at least the allowed
                                 amount of the Allowed Dresdner
                                 Synthetic Lease Secured Claim;

                              -- after abandonment by the
                                 Debtors, receive the Dresdner
                                 Synthetic Lease Properties;

                              -- receive payments or liens
                                 amounting to the indubitable
                                 equivalent of the value of the
                                 Claimholder's interest in the
                                 Estates' interest in the
                                 Dresdner Synthetic Lease
                                 Properties;

                              -- be Reinstated; or

                              -- receive any other treatment as
                                 the Debtors and the Claimholder
                                 will have agreed on in writing
                                 as announced at or prior to the
                                 Confirmation Hearing.

5    Miscellaneous Secured   The legal, equitable, and
      Claims                  contractual rights of Allowed
                              Miscellaneous Secured Claimholders
                              will be reinstated.

6    Senior Note Claims      On the first Periodic Distribution
                              Date occurring after the later of
                              the date a Senior Note Claim
                              becomes an Allowed Senior Note
                              Claim or the date a Senior Note
                              Claim becomes payable pursuant to
                              any agreement between a Debtor and
                              the holder of the Senior Note
                              Claim, the Disbursing Agent will
                              deliver to the Claimholder:

                              -- a portion of the remaining New
                                 Common Stock available for
                                 distribution to creditors on
                                 the Effective Date after
                                 deduction the shares of New
                                 Common Stock reserved to be
                                 distributed in respect of the
                                 Prepetition Credit Facility
                                 Secured Claims; and

                              -- the right to receive a portion
                                 of the distributions from the
                                 HLI Creditor Trust.

                              The amount of each of the
                              distributions to the holder of a
                              Senior Note Claim of the Plan will
                              be determined by the Allowed
                              amount of the Claimholders' Senior
                              Note Claim in relation to the sum
                              of the Allowed amounts of all
                              Senior Note Claims, Subordinate
                              Note Claims and General Unsecured
                              Claims.

7    Subordinated Note       On the first Periodic Distribution
      Claims                  Date occurring after the later of
                              the date a Subordinated Note Claim
                              becomes an Allowed Subordinated
                              Note Claim or the date a
                              Subordinated Note Claim becomes
                              payable pursuant to any agreement
                              between a Debtor and the holder of
                              the Subordinated Note Claim, the
                              Disbursing Agent will deliver to
                              the Claimholder:

                              -- a portion of the Remaining New
                                 Common Stock; and

                              -- the right to receive a portion
                                 of the distributions from the
                                 HLI Creditor Trust.

                              The amount of each of the
                              distributions to the holder of a
                              Subordinated Note Claim will be
                              determined by the Allowed amount
                              of the Claimholders' Subordinated
                              Note Claim in relation to the sum
                              of the Allowed amounts of all
                              Senior Note Claims, Subordinated
                              Note Claims and General Unsecured
                              Claims.  In addition, assuming
                              that Class 7 Subordinated Note
                              Claims votes to accept the Plan,
                              each Claimholder will receive a
                              portion of the Warrants with the
                              amount of the Claimholders'
                              distribution to be determined by
                              the Allowed amount of the
                              Claimholder's Subordinated Note
                              Claim in relation to all Allowed
                              Subordinated Note Claims.

8    General Unsecured       On the first Periodic Distribution
      Claims                  Date occurring after the later of
                              the date a General Unsecured Claim
                              becomes an Allowed General
                              Unsecured Claim or the date a
                              General Unsecured Claim becomes
                              payable pursuant to any agreement
                              between a Debtor and the holder of
                              the General Unsecured Claim, the
                              Disbursing Agent will deliver to
                              the Allowed General Unsecured
                              Claimholder:

                              -- a portion of the Remaining New
                                 Common Stock; and

                              -- the right to receive a portion
                                 of the distributions from the
                                 HLI Creditor Trust.

                              The amount of each of the
                              distributions to the holder of a
                              General Unsecured Claim will be
                              determined by the Allowed amount
                              of the Claimholder's General
                              Unsecured Claim in relation to the
                              sum of the amounts of all Allowed
                              Senior Note Claims, subordinated
                              Note Claims and General Unsecured
                              Claims.

9    Subordinated            These claims will be cancelled,
      Securities Claims       released and extinguished, and
                              holders of these claims will
                              receive no distributions under the
                              Plan.

10    Interests               These claims will be cancelled,
                              released and extinguished, and
                              holders of these claims will
                              receive no distributions under the
                              Plan.
(Hayes Lemmerz Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

Hayes Lemmerz Intl Inc.'s 11.875% bonds due 2006 (HLMM06USS1)
are trading at 54 cents-on-the-dollar, DebtTraders says. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=HLMM06USS1
for real-time bond pricing.


HERCULES INC: Consummates $200-Mill. Credit Facility Refinancing
----------------------------------------------------------------
Hercules Incorporated (NYSE:HPC) has successfully completed the
refinancing of its existing $200 million senior secured
revolving credit facility with a new senior secured credit
facility consisting of a 4-year $125 million revolving credit
facility and a 4-1/2-year $200 million term loan.

Consistent with previously disclosed financing objectives, the
proceeds from this financing will be used to satisfy the
company's obligations under the $125 million principal amount of
the 6.625% senior notes due June 1, 2003, as well as to fund
working capital and provide ongoing liquidity.

Credit Suisse First Boston and Wachovia Securities served as
joint lead arrangers for the syndication of the refinancing.

Hercules manufactures and markets chemical specialties globally
for making a variety of products for home, office and industrial
markets. For more information, visit the Hercules Web site at
http://www.herc.com

                         *    *    *

As reported in Troubled Company Reporter's December 9, 2002
edition, Standard & Poor's assigned its 'BB' bank loan
rating to specialty chemical producer Hercules Inc.'s proposed
$350 million senior secured credit facilities.

Standard & Poor's said that at the same time, it has affirmed
its 'BB' corporate credit rating on the company. The outlook
remains positive.


INTEGRATED TELECOM: Unsecured Claims To Be Paid in Full
-------------------------------------------------------
Integrated Telecom Express, Inc., tells the U.S. Bankruptcy
Court for the District of Delaware it continues to anticipate
there will be sufficient funds to pay all unsecured claims in
full and to make a distribution to its stockholders as well.
Accordingly, the Debtor anticipates that it will solicit votes
from its stockholders in connection with the acceptance or
rejection of any liquidating plan proposed by the Debtor.

In the Bankruptcy Case, the Company has proposed a plan to
liquidate and dissolve the Company. The Chapter 11 Plan is
subject to approval by eligible voting parties, including
unsecured creditors and stockholders of the Company, and
confirmation by the Bankruptcy Court.  

Integrated Telecom Express, Inc., provides integrated circuit
and software products to the broadband access communications
equipment industry. On October 8, 2002, the Company filed a
voluntary chapter 11 petition in the United States Bankruptcy
Court for the District of Delaware (Bankr. Case No. 02-12945
(PJW)).  When the Debtor filed for protection from its
creditors, it listed $115,969,000 in total assets and $4,321,000
in total debts.  Laura Davis Jones, Esq., at Pachulski, Stang,
Ziehl, Young & Jones represents Integrated Telecom in its
chapter 11 proceeding.


INTEGRATED TELECOM: Signs-Up BSI as Claims and Noticing Agent
-------------------------------------------------------------
Integrated Telecom Express, Inc., asks the U.S. Bankruptcy Court
for the District of Delaware to appoint Bankruptcy Services LLC
as its notice, claims, and balloting agent.

The Debtor's creditor matrix filed with its voluntary petition
contains approximately 590 potential creditors.  The Debtor
believes that it is best to appoint an outside agent to take
charge of all noticing, claims processing, and balloting.

Specifically, BSI will:

  a. prepare and serve required notices in this chapter 11 case,
     including:

     (1) notice of the initial meeting of creditors under
         section 341(a) of the Bankruptcy Code;

     (2) notice of the claims bar date;

     (3) notice of objections to claims;

     (4) notice of any hearings on a disclosure statement and
         confirmation of a plan of reorganization; and

     (5) other miscellaneous notices to any entities, as the
         Debtor or the Court may deem necessary or appropriate
         for the orderly administration of this chapter 11 case;

  b. after the mailing of a particular notice, file with the
     Clerk's Office a certificate or affidavit of service that
     includes a copy of the notice involved, an alphabetical
     list of persons to whom the notice was mailed and the date
     and manner of mailing;

  c. maintain copies of all proofs of claim and proofs of
     interest filed;

  d. maintain official claims registers, including:

     (1) the name and address of the claimant and any agent
         thereof, if the proof of claim or proof of interest was
         filed by an agent;

     (2) the date received;

     (3) the claim number assigned; and

     (4) the asserted amount and classification of the claim;

  e. implement necessary security measures to ensure the
     completeness and integrity of the claims registers;

  f. transmit to the Clerk's Office a copy of the claims
     registers on a weekly basis, unless requested by the
     Clerk's Office on a more or less frequent basis;

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

  h. provide access to the public for examination of copies of
     the proofs of claim or interest without charge during
     regular business hours;

  i. record all transfers of claims pursuant to Bankruptcy Rule
     3001(e) and provide notice of such transfers as required
     by Bankruptcy Rule 3001(e);

  j. comply with applicable federal, state, municipal, and local
     statutes, ordinances, rules, regulations, orders, and other
     requirements;

  k. provide temporary employees to process claims, as
     necessary;

  l. receive, record and tabulate any votes solicited by the
     Debtor in connection with a chapter 11 plan and provide an
     affidavit in connection with such tabulation services and
     results;

  m. provide such other claims processing, noticing, balloting,
     and related administrative services as may be requested
     from time to time by the Debtor; and

  n. promptly comply with such further conditions and
     requirements as the Clerk's Office or the Court may at any
     time prescribe.

BSI will charge its regular rates for its services.  For any
additional professional services, BSI's hourly rates are:

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

Integrated Telecom Express, Inc., provides integrated circuit
and software products to the broadband access communications
equipment industry. On October 8, 2002, the Company filed a
voluntary chapter 11 petition in the United States Bankruptcy
Court for the District of Delaware (Bankr. Case No. 02-12945
(PJW)).  When the Debtor filed for protection from its
creditors, it listed $115,969,000 in total assets and $4,321,000
in total debts.  Laura Davis Jones, Esq., at Pachulski, Stang,
Ziehl, Young & Jones represents Integrated Telecom in its
chapter 11 proceeding.


KEMPER INSURANCE: S&P Hatchets Sub. Debt Rating to BB from BBB+
---------------------------------------------------------------
Standard & Poor's Ratings Services removed from CreditWatch its
counterparty credit and financial strength ratings on the
members of Kemper Insurance Cos. Intercompany Pool and lowered
them to 'BBB-' from 'A' based on the good business position of
Lumbermens, the pool's lead insurer.

Standard & Poor's also said that it removed from CreditWatch and
lowered its subordinated debt rating on Lumbermens Mutual
Casualty Co.'s $700 million surplus notes to 'BB' from 'BBB+'.

The outlook on all these companies is stable.

The members of the Illinois-based property/casualty pool are
Lumbermens Mutual Casualty Co. (77%), American Motorists
Insurance Co. (15%), and American Manufacturers Mutual Insurance
Co. (8%). Lumbermens is one of the top 10 players in the U.S.
workers' compensation market.

"Kemper remains committed to maintaining balance-sheet strength,
customer focus, and a strong workers' compensation franchise,"
said Standard & Poor's credit analyst Frederic A. Sklow. The
company is exposed to execution risk as it exits business units
that account for a significant part of its book. In 2001 and
into 2002, Kemper continued to report weak operating results
despite management's ongoing efforts to realign the book of
business to focus on bottom-line profitability in recent years.
Capital adequacy is at the 'BBB+' level, which reflects a
continual decline in policyholders' surplus since year-end 1999.
Standard & Poor's expects that capital will be further reduced
by year-end 2002 as it continues to address the challenges
associated with a restructured book of business.


KMART CORP: Secures Okay to Transfer $2 Million to S.F.P.R. Inc.
----------------------------------------------------------------
Kmart Corporation and its debtor-affiliates obtained the Court's
authority:

    -- to transfer $2,000,000 to S.F.P.R. Inc.; and

    -- for S.F.P.R. to ultimately pay the fine.

To recall, the Debtors entered into a Plea Agreement with the
U.S. Government, as a result of U.S. Attorney's investigation
with regard to the Debtors' casualty loss, the actions of the
employees in determining damages as a result of the loss, and
the ensuing insurance claims arising from Hurricane Georges.  

Pursuant to the Plea Agreement, on October 28, 2002, Debtor
S.F.P.R. Inc., pled guilty in the U.S. District Court of Puerto
Rico to mail fraud in violation of 18 U.S.C. Sections 1341 and
1342.  On the same date, the Puerto Rico District Court
sentenced S.F.P.R. to the agreed upon and recommended fine of
$2,000,000, plus a 3-year probation period.

As part of the Plea Agreement, S.F.P.R. agreed to pay the
$2,000,000 fine.  Kmart Corporation also agreed to transfer the
funds necessary for S.F.P.R. to pay the fine. (Kmart Bankruptcy
News, Issue No. 39; Bankruptcy Creditors' Service, Inc.,
609/392-0900)

DebtTraders reports that Kmart Corp.'s 9.0% bonds due 2003
(KM03USR6) are trading at about 14 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=KM03USR6for  
real-time bond pricing.


LTV: LTV Steel Wins Nod to Pay Covington on Contingency Basis
-------------------------------------------------------------
LTV Steel Company, Inc., obtained Judge Bodoh's approval of the
contingency terms of compensation for Covington & Burling as
special counsel in seeking to secure a negotiated resolution of
the Debtor's claims for coverage of environmental liabilities
under LTV Steel's Youngstown line of coverage.  

To recall, LTV Steel and Covington had initially agreed that the
Firm was to be paid 75% of its customary hourly rates, plus an
incentive payment if the results of its settlement-related
efforts exceed a performance threshold.  With respect to the
Firm's other insurance-related work for the Debtors, their prior
agreement directed payment at Covington's customary hourly
rates.

Because LTV Steel lacked the necessary funding to pay for
Covington's services on an hourly or modified hourly basis,
Covington agreed to charge less than its usual rates.
Thereafter, in an effort to continue to obtain Covington's
assistance in their ongoing effort to realize the value of its
insurance coverage for environmental and other liabilities, LTV
Steel asked whether Covington would be willing to modify the
original fee arrangement and instead perform its services on a
straight contingency fee basis for much of the remaining work.
To this end, LTV Steel and Covington negotiated a revised fee
and expense agreement, effective June 1, 2002 .

This revised fee agreement only affects services by Covington
in:

   -- representing the Debtors in their joint effort with
      ISG to secure a negotiated resolution of insurance
      coverage for environmental and other liabilities; and

   -- advising the Debtors regarding their rights and
      obligations under the June 2002 settlement agreement
      with The Travelers Indemnity Company and Travelers
      Casualty and Surety Company, and any negotiations in
      connection with that settlement.

Covington will have a first-priority lien and security interest
in the settlement proceeds in an amount equal to the unpaid
amount of its contingency fee.  

Under the Revised Fee Agreement, Covington is entitled to a fee
for representing the Debtors and ISG on or after June 1, 2002,
as a contingency of 30% of the gross proceeds of all settlement
entered into as a result of the Settlement Project, regardless
of when those proceeds are recovered.  Covington will pay its
own expenses, including any consultants.  If there are no
proceeds as a result of the Settlement Project, Covington will
receive no payment or reimbursement of expenses. (LTV Bankruptcy
News, Issue No. 41; Bankruptcy Creditors' Service, Inc.,
609/392-00900)


METROMEDIA INT'L: John Kluge Steps Down from Board of Directors
---------------------------------------------------------------
Metromedia International Group, Inc., AMEX:MMG) the owner of
various interests in communications and media businesses in
Eastern Europe, the Commonwealth of Independent States and other
emerging markets, announced that John W. Kluge, Chairman of
Metromedia Company, had resigned from the Board of Directors of
MIG.

Metromedia International Group, Inc., is a global communications
and media company. Through its wholly owned subsidiaries and its
business ventures, the Company owns and operates communications
and media businesses in Eastern Europe, the Commonwealth of
Independent States and other emerging markets. These include a
variety of telephony businesses including cellular operators,
providers of local, long distance and international services
over fiber-optic and satellite-based networks, international
toll calling, fixed wireless local loop, wireless and wired
cable television networks and broadband networks and FM radio
stations.

                         *   *  *

As previously reported, the Company continues to hold
negotiations with representatives of holders of its Senior
Discount Notes in an attempt to reach an agreement on a
restructuring of its indebtedness in conjunction with proposed
asset sales and restructuring alternatives.

To date, the Company and representatives of note holders have
not reached an agreement on terms of a restructuring. The
Company cannot make any assurance that it will be successful in
raising additional cash through asset sales or through cash
repatriations from its business ventures, nor can it make any
assurance regarding the successful restructuring of its
indebtedness.


MIRANT: Reports Year-to-Date Net Loss Topping $227 Million
----------------------------------------------------------
Mirant (NYSE: MIR) reported a net loss of $1 million, or less
than one cent per diluted share for the quarter. The company's
third quarter adjusted earnings were $149 million, or 33 cents
per diluted share. These adjusted earnings exclude the
following:

     -- $204 million in pre-tax write-downs related to cancelled
        projects in Norway and Korea, and the loss on the sale
        of Mirant's gas production company;

     -- $10 million of pre-tax write-downs on minority-owned
        affiliates;

     -- $8 million of pre-tax, operational restructuring costs
        incurred during the quarter, primarily due to employee
        reductions; and,

     -- $10 million of deferred income tax expense associated
        with the announced sale of Mirant's interest in Shajiao
        C in China.

The net after-tax impact of these charges was $150 million.

Mirant reported a year-to-date net loss of $227 million.
Adjusting for significant operational restructuring and asset-
sale related charges taken during the nine-month period, year-
to-date adjusted earnings were $412 million or 98 cents per
diluted share.

Mirant reported $330 million in net cash from operating
activities during the third quarter for a total of $683 million
through the nine-months ended Sept. 30.

Mirant has adopted the provisions of the Financial Accounting
Standards Board's Emerging Issues Task Force Issue 02-03 with
respect to netting revenues and expenses on energy trading
contracts. The reclassification, required upon adoption, reduced
both revenues and the cost of fuel, electricity and other
products by approximately $7 billion for the third quarter, and
by approximately $17 billion through the nine-months ended Sept.
30. The adoption of the new accounting provisions did not change
Mirant's gross margin or results from operations.

        Quarterly Review of Operations by Business Segment

North America

     -- reported net income of $123 million, and adjusted
        earnings of $191 million;

     -- earned gross margins of $578 million from assets; and,

     -- earned gross margins of $77 million from energy      
        marketing and risk management activities.

International

     -- reported a net loss of $72 million, and adjusted
        earnings of $13 million; and,

     -- ceased international greenfield power plant development
        projects in Italy, Norway and Korea.

"We had a solid quarter despite poor market conditions and made
excellent progress in further strengthening Mirant," said Marce
Fuller, president and chief executive officer, Mirant. "We
brought more than 1,100 megawatts of generation on-line, moved
aggressively to preserve liquidity, reduced trading and
marketing activity, and eliminated rating triggers during the
quarter. Since then, we negotiated a bilateral agreement with
the Philippine government that affirmed our existing power
contracts, and we resolved insurance requirements associated
with our Philippines businesses. These actions continue to
position us well for the future."

                         Liquidity

Mirant ended the third quarter with liquidity of $1.9 billion.
The company's current liquidity is $1.3 billion and it projects
ending the year at approximately $1.4 billion. The year-end
liquidity estimate reflects the following approximate figures
for the fourth quarter:

     -- $400 million in capital expenditures, including $200
        million related to turbine cancellations;

     -- $250 million in collateral, resulting from the recent
        credit downgrades;

     -- $50 million for debt repayment; and,

     -- $200 million in expected proceeds from asset sales.

The company's collateral posted to support trading and marketing
activity is approximately $850 million, reflecting recent rating
agency downgrades that were offset to some extent by collateral
reductions accomplished during the third and fourth quarters.
Mirant expects to continue reducing its collateral position
during 2003 by further scaling back its gas marketing
activities.

Mirant anticipates using the proceeds from the sale of its
Shajiao C interest in China (expected to close by year-end) to
eliminate a $254 million loan at its Asia holding company. This
action would remove a previously disclosed dividend block from
Mirant's Philippine businesses.

               Guidance: Lowered for 2002

Mirant is lowering its guidance for 2002 as a result of ongoing
adverse market conditions in North America (which include
significantly reduced market liquidity), a reduction in its gas
business to decrease collateral requirements, and a higher
effective-tax rate on the earnings of its Asia businesses.

The company now expects full-year adjusted earnings of $1.00 to
$1.05 per diluted share. This guidance implies fourth quarter
adjusted earnings per share of five to ten cents, and takes into
account the dilutive effects of the company's convertible
offering in July 2002. Adjusted earnings for the fourth quarter
do not reflect charges related to asset sales or restructuring
activity that will be finalized by the time the company reports
its full-year results.

                    Form 10-Q Filings

Mirant will file its third quarter Form 10-Q and quarterly
filings for its subsidiaries, Mirant Americas Generation, LLC
and Mirant Mid-Atlantic, LLC, after 6:00 p.m. EST, Dec. 20,
2002. These filings will be available at http://www.mirant.com

The subsidiary filings consist of second and third quarter Forms
10-Q, and amended, first-quarter Forms10-Q/A. Mirant notes that
these filings represent the conclusion of the quarterly reviews
conducted by its independent auditors for the first, second and
third quarters of 2002.

                    Analyst Call Information

Mirant will host a call for analysts on January 10, 2003 to
provide a general business update. The time of the call, and
other associated details, will be made public in the near
future.

                         *    *    *

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

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


MUTUAL RISK: Files Proposed Creditors' Arrangement in Bermuda
-------------------------------------------------------------
Mutual Risk Management Ltd., filed a proposed Scheme of
Arrangement with creditors on December 16, 2002 with the Supreme
Court of Bermuda.

On December 19, 2002, the Bermuda Court gave directions for the
holding of meetings of Scheme creditors in Bermuda on
February 5, 2003 for the purpose of considering and, if thought
fit, approving the proposed Scheme. Assuming a positive vote,
MRM will then apply to the Supreme Court for an Order approving
the Scheme.

The principle purpose of the Scheme is to restructure MRM's
senior debt. The principal amount of the debt is approximately
$198 million, comprised of approximately $110 million owing
under the Company's credit facility and approximately $88
million owing to holders of the Company's 9-3/8% debentures.
Under the proposed restructuring, the senior debt holders would
exchange their existing debt for cash, preferred stock and
warrants to purchase 15% of the common stock of the Company on a
fully diluted basis as well as debt, preferred stock and 74.7%
of the common stock, on a fully diluted basis, of the Company's
subsidiary, MRM Services Ltd.  MRM Services (currently doing
business as IAS Park and soon to be renamed IAS Park Ltd.) holds
the Company's fee-based businesses.

IAS Park has approximately 300 employees with the major units in
the group being the captive management division, which will
operate under the IAS banner, and the insurance/reinsurance
broking division, which will operate under the Park banner. The
Group will be headquartered in Bermuda where some 150 staff are
located and will also have offices in the U.K., the U.S., Cayman
Islands, Amsterdam, Guernsey and Barbados.


MYRIENT INC: Delays Filing SEC Form 10-K for Fiscal Year 2002
-------------------------------------------------------------
Myrient (OTCBB:MYNTE), an Outsourced IT solutions provider, has
not filed its form 10-K Annual Report for the fiscal year ended
8/31/2002 with the Securities and Exchange Commission within the
required time period, and may not be able to timely file it
within the appropriate extended deadlines, according to Bryan
Turbow, its President and CTO.

Turbow said, "It is well known that our resources are severely
limited during this time of thorough corporate restructure.
Understandably, our auditors did not agree to take a credit risk
with respect to getting paid for their year-end audit, which
forced us to chose between: (1) keeping current with our
reporting requirements or (2) completing the restructuring of
our product line. Of course, we will do everything we can to
complete the audit and file as soon as finances allow", Turbow
added.

With respect to the company's significant liabilities, Turbow
said, "In the last four months especially, we have made
significant progress in reducing our debt-load and litigation
costs through across-the-board negotiations with our major
creditors. These efforts resulted in settlement agreements which
generally provide for: (1) significant compromise of the debt
amounts; (2) no payment requirements generally for a year or
more; (3) a long-term payment schedule starting with minimal
quarterly payments that increase each year thereafter and (4)
mutual, full releases to cut litigation costs and the
possibility of additional future litigation."

He added, "It is gratifying to have seen the co-operation we
received from most of our creditors during this restructure
period, which enabled us to: (1) avoid bankruptcy, (2) downsize
the company in an orderly manner, (3) extricate ourselves from
most long term, unprofitable contracts and most importantly, (4)
start a restructuring of our product line to serve as the
foundation for potential future profitability.

Myrient is an Outsourced IT solutions provider that enables
customers to outsource all of their IT infrastructure needs,
while ensuring the highest level of security and reliability.
Myrient offers unparalleled value through proprietary network
design and enabling technologies, which efficiently leverage its
partners' network capacity. Founded on principles of integrity
and excellence, Myrient has developed a reputation for
uncompromised quality and service. By focusing on solving real
business problems, Myrient's success is dependent on helping
clients become more successful.


NATIONAL STEEL: St. Paul Wants to File Late Proof of Claim
----------------------------------------------------------
St. Paul Insurance Company asks the Court for permission to file
a late proof of claim against National Steel Corporation's
estates.  St. Paul explains that it was not able to fail a claim
by the General Bar Date because it did not receive any Bar Date
notice from the Debtors.  The Debtors also failed to list St.
Paul as a creditor on any of their schedules.

T. Scott Leo, Esq., in Chicago, Illinois, asserts that the
Debtors are very much aware of St. Paul's contingent claim,
since:

  1. before the Petition Date, St. Paul issued six surety bonds
     aggregating $49,800,000 to National Steel Corporation, as
     principal, to satisfy various financial requirements
     imposed on National Steel by St. Paul's obligees.  The
     issued bonds remain outstanding as of the Petition Date;

  2. before the Petition Date, National Steel executed a general
     agreement of indemnity in favor of St. Paul for any surety
     bonds including the prepetition bonds whenever issued at
     National Steel's request, its subsidiaries or affiliates.
     The National Steel Indemnity Agreement requires the Debtors
     to pay St. Paul:

     (a) all loss and expense, including reasonable attorney
         fees, St. Paul incurred by reason of having executed
         the prepetition bonds or on account of National Steel's
         breach of the National Steel Indemnity Agreements;

     (b) an amount sufficient to discharge any claim made
         against St. Paul on the prepetition bonds; and

     (c) all premiums due for the prepetition bonds until the
         time as St. Paul is discharged from any liability under
         the prepetition bonds; and

  3. on May 20, 2002, the Court approved an Agreed Order
     authorizing the surety credit program between the Debtors
     and St. Paul as well as extending the secured surety credit
     and granting St. Paul liens and superpriority
     administrative expense claim with respect to its interests
     in the issued bonds.

Mr. Leo relates that St. Paul only learned of the Claims Bar
Date though random inquiry of the bankruptcy court docket in
this case on October 28, 2002.

If St. Paul is denied permission to file a late proof claim, Mr.
Leo proposes that the Court extends the Claims Bar Date as to
St. Paul so it may file its claim.

                         Debtors Respond

The Debtors acknowledge that they did not serve a copy of the
bar date notice directly to St. Paul or on its counsel.  They
also acknowledge having entered into the Agreed Order continuing
the surety credit program.

Given that, the Debtors consent to St. Paul's filing of a late
claim.  Mark P. Naughton, Esq., at Piper Marbury Rudnick &
Wolfe, however, emphasizes that the Debtors consent is limited
to the timing of the filing of the proof of claim and not to the
merits of the issue.  In that regard, the Debtors reserve all
rights to object to St. Paul's claim on any grounds except for
timeliness. (National Steel Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

National Steel Corp.'s 9.875% bonds due 2009 (NSTL09USR1) are
trading at about 40 cents-on-the-dollar, DebtTraders says. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NSTL09USR1
for real-time bond pricing.


NATIONSLINK: S&P Affirms Low-B Ratings on Four Classes of Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on the B,
C, and D classes of NationsLink Funding Corp.'s commercial
mortgage pass-through certificates series 1998-2. At the same
time, ratings are affirmed on the remaining classes from the
same transaction.

The rating actions reflect the improved overall operating
performance and increased subordination levels since issuance.
Standard & Poor's has determined that the weighted average
coverage for the pool has increased to 1.68x from 1.48x at
issuance. Financial reports supplied by Midland Loan Services
Inc. (Midland/Strong ranking), the master servicer, includes
2001 year-end information for 90% of the pool. Seven specially
serviced mortgages totaling $46.7 million (3.0% of pool) offset
the performance of the pool. Two of these mortgages ($23.6
million) are identified as REO.

Lennar Partners Inc., (Lennar/Strong ranking) services the seven
specially serviced mortgages in the pool. Midland has advanced a
total of $796,000. The REO loans are as follows:

     -- A $15.6 million office mortgage located in Santa Clara,
        California, which is in the Silicon Valley. Santa Clara,
        and the surrounding area, is experiencing a severe
        market depression. Vacancy rates in the area are
        hovering around 22% (as of June 2002), up from 7.4%
        during the same time last year. The office is 100%
        vacant, due to the fact that Advanced Micro Devices, the
        sole tenant, moved out in January 2001. Lennar has
        applied appraisal reductions of $8.0 million, based on a
        March 2002 appraisal valuing the property at $9.25
        million.

     -- An $8.0 million mortgage secured by a 221-multifamily
        property located in New Orleans, La. The mortgage became
        delinquent in January 2001. Lennar has been marketing
        the property for sale at an asking price of $6.1
        million, with no prospective interest. In response,
        Lennar obtained a permit from the City of New Orleans
        for "Conditional Use" with intent to convert the
        building into a hotel, which could improve the
        appeal of the property. The special servicer has applied
        appraisal reductions of $5.2 million, based on a
        February 2001 appraisal valuing the property at $5.5
        million.

The remaining specially serviced loans are current. They are
with the specially servicer for the following reasons: two for
technical default; two for loan restructuring; and one is
reaching the final stages of its rehabilitation period. The
largest is an $11.9 million multifamily mortgage, whose property
is located in Las Vegas, Nevada, which has a debt service
coverage ratio of 0.95x. The borrower violated the loan
documents by selling the property without lender consent. Lennar
has retained legal counsel to resolve the matter. The next
largest loans are two mortgages totaling $5.7 million, which are
cross-collateralized and cross-defaulted. Each is secured by two
multifamily properties located in Dalton, Alabama with DSCRs of
1.01x ($3.6 million) and 1.35x ($2.1 million). The borrower is
negotiating possibly restructuring the mortgages with Lennar.

There are 10 mortgages on the watchlist, which total $62.8
million. Of particular concern are four mortgages totaling $45.7
million. First is a $25.5 million industrial property located in
Durham, N.C. The property, totaling 631,252 net rentable square
feet, has experienced a significant decline in occupancy to
25.1% from 85% following IBM Corp.'s decision to vacate the
premises. However, IBM continues to make partial rental
payments, resulting in a DSCR of 1.05x. Second are two mortgages
secured by nursing homes that total $9.3 million. Each mortgage
is cross-collateralized and cross-defaulted, and both are
located in the state of Texas ($5.8 million): one in Atlanta,
Texas ($3.5 million) and the other in Quitman, Texas. Both
nursing homes are Medicaid payor dominated, which has
experienced severe federal reimbursement cuts during the past
few years, resulting in DSCRs of 0.99x and 1.40x, respectively.
Third is an $8.9 million industrial mortgage located in
Hawthorne, California. A major tenant who comprised 42% of the
net rentable area has declared bankruptcy, leaving an occupancy
level of 57% with a DSCR of 0.69x. The borrower is marketing the
property for sale. Fourth is a $2.0 million retail mortgage
located in Cayce, California. The owner of the property has been
30-days delinquent for the past few months because of a property
tax dispute.

Appearing on the watchlist, but expecting to be removed in the
short term, is the Gateway Commerce Center I. Combined, the
Gateway Commerce Center I and II mortgages total $60 million
(4.1% of the pool), and are secured by industrial properties
located in Columbia, Maryland. The borrowers are related, but
the loans are not crossed. Gateway I has experienced fluctuating
occupancy levels during the past year, resulting in year-end
2001 DSCR of 1.06x. Occupancy has improved more recently,
resulting in a DSCR of 1.36x as of June 2002. Gateway II
maintained stable performance with a current occupancy level of
100%, resulting in a DSCR of 1.21x.

Realized losses total $3.0 million. The losses are the result of
the disposition of an assisted living care facility located in
Tampa, Florida. The disposition resulted in a loss severity of
75%.

As of November 2002, the pool consisted of 373 fixed-rate
mortgages with an outstanding pool balance of $1.456 million,
compared to 376 mortgages with an outstanding pool balance of
$1.581 million at issuance. The pool has changed little since
issuance, and only three mortgages have been paid off. The
pool's property type concentration remains multifamily (33.8%),
retail (28.8%), office (14.8%), industrial (12.4%), lodging
(4.5%), and an assortment of other property types (5.8%).
Geographically diverse, this pool includes 35 states, with a
concentration in excess of 10% only in California (28.2%).
   
                      Ratings Raised
   
                  NationsLink Funding Corp.
         Commercial Mortgage Securities Series 1998-2
   
                      Rating
        Class    To          From    Credit Support (%)
        B        AA+         AA      27.03
        C        A+          A       20.49
        D        BBB+        BBB     14.77
      
                      Ratings Affirmed
   
                  NationsLink Funding Corp.
        Commercial mortgage securities series 1998-2
    
        Class     Rating        Credit Support (%)
        A-1       AAA           32.47
        A-2       AAA           32.47
        E         BBB-          12.32
        F         BB            6.33
        G         BB-           5.51
        H         B             3.34
        J         B-            2.79


NATIONSRENT: Asks Court to Deem CIT Master Pact Not True Leases
---------------------------------------------------------------
NationsRent Inc., and its debtor-affiliates ask Judge Walsh to
declare that a Master Agreement and four related equipment
schedules with CIT Group/Equipment Financing, Inc., are actually
financing agreements that created a security interest and not
"true leases."  The Debtors also seek a declaration that they
are the sole owner of, and hold all rights, title and interest
in the scheduled equipment, subject to perfected security
interest.

While labeled a "lease," Joanne P. Pinckney, Esq., at Bouchard,
Margules & Friedlander, in Wilmington, Delaware, argues that the
Master Agreement and the schedules are a secured financing
agreement within the meaning of the Uniform Commercial Code
Section 1-201(37) because, among other reasons, the Debtors are
economically compelled to purchase the scheduled equipment at
the conclusion of the term for each applicable schedule.  Ms.
Pinckney explains that, under the Uniform Commercial Code, as
adopted in the State of Maryland, determining whether a
transaction is a true lease or a financing arrangement requires
a review of the economic realities of the transaction.  In this
case, she points out that the Master Agreement obligates the
Debtors to pay CIT Group the total amount of rent due for the
entire term of the applicable schedule, making the lease non-
cancelable.  The Agreement also requires them to maintain and
return the leased equipment in the same operating condition as
when originally delivered.  The Debtors must also pay all the
costs of redelivery of the scheduled equipment to places CIT
Group specified.

According to Ms. Pinckney, Rider No. 1 of the Master Agreement
requires the Debtors to either exercise the option to purchase
at the end of the lease term -- and any renewal term -- or
return all of the scheduled equipment.  On the expiration of the
original term of each schedule, the Debtors may:

  (a) elect to purchase the equipment for the greater of 25% of
      its original invoice cost or its then fair market value;
      or

  (b) choose to return the equipment at their own expense.

If they return the equipment, the Debtors must refurbish it by
steam-cleaning and de-greasing, painting excessive corrosion and
replacing any tires, transmissions, engines, brakes, etc.  In
addition, the Debtors must pay a return fee to CIT Group
equaling:

  -- 15% of the original invoice cost of the equipment for
     schedules 3, 7, and 48; and

  -- 7.33% of the original invoice cost of the equipment for
     schedule B-2.

Ms. Pinckney contends that refurbishing, assembling and then
transporting four entire schedules of equipment would be very
costly and would impair and disrupt the Debtors' business.  By
returning the scheduled equipment, the Debtors also would be
forced to acquire replacement equipment so as to assure an
adequate inventory of equipment to satisfy their customers'
rental needs and demands.

"By its terms the Master Agreement compels NationsRent to
exercise the option to purchase the equipment," Ms. Pinckney
points out.  She further notes that, "The costs associated with
performing all of the obligations required by the Master
Agreement in the event of the return of the scheduled equipment
. . . is more costly than exercising the option to purchase,
making the purchase option price "nominal" under Maryland's
Commercial Code."

With respect to the purchase option, section 1-201(37)(c)(1) of
the Maryland Commercial Code provides that, "[a]dditional
consideration is nominal if it is less than the lessee's
reasonably predictable cost of performing under the lease
agreement if the option is not exercised."

The Debtors also ask Judge Walsh to direct CIT Group to disgorge
all payments they made under the Master Agreement and schedules
since the Petition Date. (NationsRent Bankruptcy News, Issue No.
23; Bankruptcy Creditors' Service, Inc., 609/392-0900)


NRG ENERGY: Contests Rogue Ex-Executives' Involuntary Petition
--------------------------------------------------------------
Adam P. Merrill, Esq., at Kirkland & Ellis in Chicago, tells the
U.S. Bankruptcy Court for the District of Minnesota that the
involuntary petition filed against NRG Energy, Inc., smacks of
bad faith and should be dismissed.  In the alternative, the
"rogue group of disgruntled executives" filing the Involuntary
Petition should be required to post a $10 million bond, pursuant
to 11 U.S.C. Sec. 303(e), to "protect NRG and its creditors from
the damage that has been caused and could be caused if these
proceedings continue."

Since late last summer, Mr. Merrill relates, NRG has been
developing and negotiating a comprehensive restructuring with
the holders of approximately $7 billion of bank debt and bond
obligations.  This effort is particularly complicated and time
consuming because of the complex and capital intensive nature of
NRG's business.

Restructuring negotiations are ongoing among NRG, its parent
company, Xcel Energy Inc. and ad-hoc committees of NRG's lenders
and noteholders, Scott J. Davido, Esq., NRG's Senior Vice
President and General Counsel relates.  Specifically, NRG is
holding regular meetings with:

     * an ad hoc committee of parent company noteholders
       represented by:

         -- Bingham McCutchen LLP and

         -- Houlihan, Lokey, Howard & Zulkin;

     * an ad hoc committee of project level bondholders
       represented by:

         -- Akin Gump Strauss Hauer & Feld LLP and

         -- Ernst & Young Corporate Finance LLC; and

      * its bank group represented by:

         -- Simpson Thatcher & Bartlett and

         -- FTI Consulting/Policano & Manzo.

The negotiations with these holders of approximately $7 billion
of debt, Mr. Merrill continues, have intensified and accelerated
in recent weeks. Recently, NRG and Xcel Energy, Inc. (NRG's
parent company) proposed a comprehensive restructuring proposal.
A counter proposal is currently under consideration. At present,
it is not clear whether it will be necessary for NRG to commence
a chapter 11 case in order to consummate the yet to be agreed
upon restructuring. Nevertheless, NRG does not believe that the
commencement of a reorganization case at this time will enhance
the likelihood of a successful reorganization.

During the summer, NRG determined that it needed to undertake a
financial restructuring and operational reorganization,
Consequently, NRG dismissed a number of the officers that
formulated and implemented the strategy that led to NRG's
current difficulties. On October 3, 2002, six of these former
executives sued NRG for severance and other benefits. NRG
refused to pay the alleged benefits pending a complete
investigation of alleged mismanagement and misconduct by the
former executives. Just seven weeks later, five of these former
executives filed an involuntary chapter 11 petition against NRG.
The petitioners allege just $23.5 million in claims against NRG,
compared with $7 billion in total outstanding debt. No other
creditors have joined the petition, Mr. Merrill notes.

Until NRG and its major creditor constituencies complete their
restructuring discussions and determine a means for
implementation, Mr. Merrill argues, a reorganization case is not
in the best interests of NRG or its creditors. In fact, Mr.
Merrill says, the commencement of a chapter 11 case by or
against NRG without the support of its major creditor
constituencies and access to the additional working capital
required to operate its business as a debtor in possession,
likely would cause substantial harm to NRG's business. Thus, the
present petition should be dismissed pursuant to Bankruptcy Code
Section 305(a)(1).

Mr. Merrill urges the Minnesota court to look at the
petitioners' motives for filing the petition -- which courts
have held are relevant to a 305(a)(1) analysis.  Those motives
"do not appear to be pure," Mr. Merrill says.  In conversations
with the media, for example, petitioners have asserted that they
filed the petitions out of "frustration," to insert the court
into the out-of-court restructuring process currently underway,
and to wrest the decision of whether and when to commence a
chapter 11 case away from NRG and its other creditors.  In view
of these reported comments, NRG charges that the petitioners'
conduct smacks of bad faith and abuse of section 303 of the
Bankruptcy Code. The petition should be dismissed so that NRG
and its creditors can fully explore how best to restructure.
Then, if a Chapter 11 filing is appropriate, NRG and its
creditors as a whole - not some rogue group of disgruntled
former executives -- can decide when and where to file it.


NSI GLOBAL: Unit Files for Assignment in Bankruptcy in Canada
-------------------------------------------------------------
NSI Global Inc. (TSX: NGL), a global provider of satellite-based
communications systems, said that the Board of Directors of its
wholly owned broadband networks subsidiary, NSI Communication
Systems Inc., has authorized the filing of an assignment in
bankruptcy under the Canadian Bankruptcy and Insolvency Act
(BIA).

NSI Global plans to make arrangements for the support of the
Broadband division's customer base and deployed networks, and is
in discussion with several organizations to this effect.

NSI Communication Systems sells specialized satellite terminals
(known as Very Small Aperture Terminals or VSATs) that allow
corporate and government customers to securely communicate
(voice, data, video) with branch locations anywhere in the
world.

"This filing has no direct effect on NSI Global's Mobile Data
operations, which have grown to become the largest part of our
business with the greatest potential for growth and
profitability," said David Ben-David, President and Chief
Executive Officer of NSI Global. "NSI Communication Systems'
decision to file for bankruptcy is regrettable but reflects the
reality of the extremely competitive and difficult market
conditions that have developed during the past couple of years
and that show no encouraging signs of improving in the near
term."

The decision to exit the broadband business will mean the
termination by NSI Communication Systems of its 130 employees,
of which 105 are located in Montreal and the remainder are in
international offices.

The financial impact on NSI Global, including write-offs, will
be recorded in the fourth-quarter 2002 financial results. The
total amount depends on what will be recovered from the
realization of NSI Communication Systems' assets.

To achieve profitability for Mobile Data in 2003, NSI Global
will transfer the Mobile Data division's North American network
operations from Virginia to its facilities in Ottawa as well as
take other cost-reduction measures. Following a restructuring
charge of $1.1 million for severance, lease termination, and
other costs in the fourth-quarter 2002, Mobile Data will benefit
from an annual cost reduction of $3 million. In addition, NSI
Global's customers will benefit from stronger customer support
capability due to the resulting proximity of the Mobile Data
engineering team to network operations.

"We believe that the tough decision to withdraw from the
broadband business will prove a positive one for NSI Global,"
said Mr. Ben-David. "It enables us to focus all our attention
and resources on a growing business with considerable potential
to create value for our shareholders."

NSI Global's Mobile Data (Vistar) division sells satellite-based
wireless systems and equipment that permit customers to remotely
monitor and manage assets, such as trucks, trailers, boats, oil
and gas well head and pipeline facilities, chemical storage
tanks, and intermodal containers. Vistar's Datacom unit sells
GlobalWave MT2000 data terminals directly to customers and
through Value-Added Resellers and collects airtime revenues from
operating the GlobalWave satellite-based wireless network in
North and Central America. Vistar also has licensed the
GlobalWave technology to service providers outside of North
America.

Headquartered in Montreal, NSI's common shares are traded on the
Toronto Stock Exchange under the symbol NGL. Additional
information about NSI is available on the company's Web site at
http://www.nsiglobal.com


OM GROUP: Realigns Corporate and Management Structures
------------------------------------------------------
OM Group, Inc., (NYSE: OMG) announced that, in conjunction with
the restructuring program it unveiled on December 12, the
Company has realigned its corporate and management structure.

Effective immediately, the Company will consist of three
business units -- Cobalt, Nickel, and Precious Metals -- which
will be run by Todd Romance, Mark Bak and Rick Adante,
respectively, who were named global vice presidents of the
Company. Each will have full responsibility for the operating,
marketing and financial functions of their business units and
will report directly to James P. Mooney, OMG's chairman and
chief executive officer.

Steve Dunmead will continue to oversee the Company's Research
and Development function and Bill Lohman will continue to run
the Company's Metals Management operation. Both will now also
report directly to Mooney.

"Realigning our corporate structure and management team will
allow us to streamline our organization and further enhance our
performance accountability," Mooney said.

According to Mooney, the Company also has reduced the size of
its executive committee from four members to two -- himself and
Thomas R. Miklich, the Company's chief financial officer -- to
further simplify the corporate structure.

"Tom Miklich will play a critical role in our strategic
evolution and will have influence well beyond that of a typical
CFO," said Mooney. "In addition to overseeing the Company's
finance function, Tom will be responsible for our legal, human
resources, information technology and communications
departments."

                    Biographical Information

Romance has served as vice president - global sales and
marketing, for OM Group's nickel products unit since April 2000.
He joined the Company in 1984 as Midwest sales representative.
During his tenure with the Company, he has held a variety of
positions, including national sales manager; business manager -
Americas; vice president - Americas; and vice president - global
sales & marketing, metal carboxylates. Romance attended the
University of Wisconsin, where he graduated with a BBA in
marketing, finance and economics.

Since 1997, Bak has served as the director of operations for OMG
Americas, overseeing the operations at all four of the Company's
North American production facilities. He joined the Company in
1993 after holding various positions with Sachem, Inc. Bak began
his career as a sale representative for Inco Alloys. He holds a
BS in chemical engineering from Case Western Reserve University
and earned his Executive MBA from the Weatherhead School of
Management.

Adante has been OMG's vice president of operations since June
2000, responsible for the Company's corporate information
systems, process engineering, strategic planning and its
carboxylates and specialty chemicals manufacturing facilities.
Prior to joining OMG, he held various positions with the
Goodyear Tire and Rubber Company, ultimately serving as its vice
president, materials management, North America tires. Adante
earned his BS in industrial management from Akron University.

Dunmead, OMG's vice president of technology, is responsible for
setting the Company's strategic direction for new product
development, applied technology, innovation and intellectual
property. He joined the Company in 1998 as its director of
research and development when OMG acquired his then employer,
the Advanced Materials Laboratory of The Dow Chemical Company.
Dunmead graduated Summa Cum Laude with BS and MS degrees in
ceramic engineering from The Ohio State University. He earned
his Ph.D. in materials sciences and engineering, with minors in
thermodynamics/kinetics and applied statistics from the
University of California, Davis.

Lohman joined the Company as group vice president, metals
management in February 2002 after serving as a consultant to
various corporations in materials supply strategies and general
management. A graduate of New York University with an MBA in
finance, Lohman also holds a BS in math.

OM Group, Inc., through its operating subsidiaries, is a
leading, vertically integrated international producer and
marketer of value-added, metal-based specialty chemicals and
related materials. OMG is a recognized leader in manufacturing
products from base and precious metals and managing metals
procurement related to these activities. The Company supplies
more than 1,700 customers in 50 countries with more than 3,000
product offerings.

Headquartered in Cleveland, Ohio, OMG operates manufacturing
facilities in the Americas, Europe, Asia, Africa and Australia.
For more information on OMG, visit the Company's Web site at
http://www.omgi.com

                        *     *     *

As reported in Troubled Company Reporter's November 18, 2002
edition, Standard & Poor's lowered its corporate credit rating
on metal-based specialty chemical and refined metal products
producer OM Group Inc., to 'B+' from 'BB-' based on an expected
diminished business profile following management's announcement
that it is exploring strategic alternatives for its precious
metals operations.

Standard & Poor's said that its ratings on OM Group remain on
CreditWatch with negative implications where they were placed
October 31, 2002. Cleveland, Ohio-based OM Group has about $1.2
billion of debt outstanding.


OWENS CORNING: Obtains Okay to Restructure Chinese JVs' Debts
-------------------------------------------------------------
Owens Corning and its debtor-affiliates obtained the Court's
approval:

A. of the Standstill and Amendment Agreement by and among Owens
   Corning, Owens-Corning (Guangzhou) Fiberglas Co. Ltd., Owens-
   Corning (Shanghai) Fiberglas Co., Ltd., and certain lenders
   consisting of Standard Chartered Bank, Societe Generale and
   KBC Bank NV;

B. of the consummation of the transactions and the execution of
   the agreements contemplated in the Standstill Agreement; and

C. to grant the Lenders an allowed, prepetition general
   unsecured claim against the Debtors for $22,000,000,
   conditioned on the closing of the Standstill Agreement.
   (Owens Corning Bankruptcy News, Issue No. 42; Bankruptcy
   Creditors' Service, Inc., 609/392-0900)   


PACIFIC GAS: Gets OK to Procure Power to Meet Year 2003 Shortage
----------------------------------------------------------------
Pacific Gas and Electric Company sought and obtained the Court's
authority to enter into power procurement transactions for year
2003, including procurement to meet the Residual Net Short
Position of its retail customers and power, procurement-related
services.

To successfully exit bankruptcy, Julie B. Landau, Esq., at
Howard, Rice, Nemerovski, Canady, Falk & Rabkin, PC, argues that
PG&E will need to have the financial strength to support power
procurement for its customers, among other things.  PG&E's Plan
of Reorganization addresses this central concern by identifying
five requirements for its resumption of the procurement
function.

The first is the requirement that PG&E return to an investment
grade credit rating before it starts procuring power for its
customers again.  Ms. Landau, however, notes that PG&E will not
regain an investment grade credit rating by January 1, 2003,
when the CPUC has ordered it to resume procurement.  But under
current and forecast 2003 conditions, PG&E anticipates that it
can resume the procurement function on an interim basis.  Ms.
Landau maintains that PG&E's ability to resume the power
procurement function and to meet the Residual Net Short Position
is based on:

(i) the recent California Senate Bill 1976 that requires the
     California Public Utilities Commission to implement timely
     rate recovery mechanisms and eliminate after-the-fact
     reasonableness reviews associated with power procurement;

(ii) the present conditions that indicate the Residual Net Short
     Position will be small and wholesale prices will remain
     relatively stable during 2003, consistent with the current
     conditions;

(iii) the adoption by the CPUC of PG&E's procurement plan or a
     plan that otherwise fully complies with and implements SB
     1976 and the continuing effectiveness of the various
     elements of the procurement plan;

(iv) the limited procurement-related collateral requirements in
     order to protect against any adverse impact to PG&E and its
     estate; and

(v) the transactions limited to calendar year 2003 only.

Ms. Landau explains that the 2003 Residual Net Short Position is
expected to be small, unlike the substantially larger net short
position in 2000 and 2001.  Also, wholesale power prices are at
much lower levels than California experienced during the height
of the energy crisis in 2000 and 2001.

On October 24, 2002, the CPUC issued Decision 02-10-062 which
requires PG&E and the other investor-owned utilities to resume
power procurement responsibilities, including procurement of the
Residual Net Short Position, effective January 1, 2003.  This is
regardless of whether PG&E has regained an investment-grade
credit rating, by posting collateral or providing letters of
credit with the California Independent System Operator and
suppliers where required.  The October 24 Decision sets forth
requirements for PG&E and the other IOUs' future procurement
activities and requires each utility to file a short-term
procurement plan for 2003 on November 12, 2002 for the CPUC's
review and approval.  PG&E expects that the CPUC will act on its
procurement plan no later than December 19, 2002.

PG&E's Procurement Plan consists of various elements, including:

  (1) a risk management;

  (2) identification of the types of products to be procured,
      and types and quantities of transactions proposed to meet
      the Residual Net Short Position and to offset the Residual
      Net Long Position;

  (3) an assessment of price risks across the utility portfolio;

  (4) use of a competitive bid system for new power contracts;
      and

  (5) standards and criteria to guide procurement transaction
      cost recovery.

"With the operational allocation to PG&E of the DWR Contracts,
PG&E's existing power resources, and the new power procurement
contracts obtained in connection with the CPUC's August 22
Decision -- with the California Department of Water Resources
having legal and financial responsibility until PG&E regains its
investment-grade credit rating -- PG&E anticipates that it will
have sufficient energy to satisfy the bulk of its customers'
power needs in 2003," Ms. Landau says.  "For some time periods
in 2003, however, a Residual Net Short Position is likely to
remain, primarily during peak periods . . .  Depending on actual
conditions during the year, at times PG&E will likely have a
Residual Net Long Position and be in a position to dispose of
surplus power."

Ms. Landau lists the assumptions and conditions critical to
PG&E's ability to resume and continue procurement on an interim
basis, including meeting the Residual Net Short Position and
managing the Residual Net Long Position:

(a) Procurement Limited to 2003

    Since PG&E does not have an investment-grade credit rating,
    it does not have the access to external credit needed to
    support long-term procurement contracts and new facility
    projects.  Thus, PG&E is seeking authority to procure power
    solely for 2003.  PG&E will not be entering into any long-
    term procurement contracts beyond 2003;

(b) Timely Cost Recovery and Prospective Reasonableness
    Standards

    PG&E's resumption of procurement is based on the assumption
    that the CPUC will timely and fully comply with SB 1976 and
    will approve its Procurement Plan or otherwise approve a
    procurement plan that fully complies with and implements SB
    1976, which includes:

    -- timely cost recovery, including both revenue requirements
       and rate adjustments to enable PG&E to collect its
       generation and power procurement costs from ratepayers on
       a timely basis; and

    -- clear, up-front, achievable standards to determine the
       acceptability and eligibility for rate recovery of the
       costs of the proposed transactions, including no after-
       the-fact reasonableness review except as allowed by
       SB 1976 to verify compliance with contract terms and
       reasonable resolution of contract disputes.

    Consistent with SB 1976, PG&E's resumption of procurement
    must be pursuant to a CPUC-approved procurement plan so
    that:

    * PG&E's actions may be in compliance with the approved
      procurement plan; and

    * the CPUC can determine if a feature or mechanism of the
      procurement plan would impair PG&E's restoration to
      creditworthiness.

    PG&E's Procurement Plan incorporates the necessary elements
    to ensure implementation of timely cost recovery consistent
    with the requirements of SB 1976.

    It is critical that the CPUC order approving PG&E's
    Procurement Plan authorizes and implements, effective on
    January 1, 2003, a ratemaking cost recovery mechanism that
    satisfies the requirements of SB 1976, including, without
    limitation, the "trigger" mechanism that requires the CPUC
    to adjust rates to the extent that current revenues are
    inadequate to recover actual procurement costs.  Ms. Landau
    contends that if the CPUC deviates from any material aspect
    of the Procurement Plan, PG&E will need to carefully
    consider whether the decision satisfies SB 1976 and other
    conditions necessary to protect the bankruptcy estate and to
    support its return to an investment grade credit rating;

(c) Limited Residual Net Short Position and Market Stability

    PG&E's current forecast of power resources and customer
    loads produces a relatively small Residual Net Short
    Position of no greater than 2% of its total load
    requirements based on current assumptions and projections.  
    PG&E is also assuming that the power market will remain
    relatively stable through 2003, both as to supply
    availability and price; and

(d) Limited Collateral Requirements

    PG&E anticipates that its collateral requirements will not
    exceed $150,000,000.

Pursuant to the Procurement Plan, PG&E will enter into these
types of transactions:

1. Purchases and Sales through CPUC-Approved Markets

   PG&E intends to balance its Residual Net Short and Residual
   Net Long Positions with these types of transactions:

   -- purchases and sales of day-ahead and hour-ahead spot
      energy and gas, and electric and gas transmission rights;

   -- purchases and sales of forward contracts for electricity
      and gas, and electric and gas transmission rights; and

   -- purchase of electricity and gas options and swaps.

   Examples of the types of markets contemplated include
   bilateral contracts done through brokers or individual
   negotiations, or transactions executed via transaction
   processing services or electronic exchanges like the
   Automatic Power Exchange or the Intercontinental Exchange.  
   Examples of an option may include either a physical or
   financial option; a physical option would give PG&E the right
   but not the obligation to take physical delivery of
   electricity or gas at a fixed price, while a financial option
   would provide for an equivalent cash flow without the need
   for physical delivery;

2. Transactions, Purchases and Sales through the ISO

   Since PG&E lost its investment grade credit rating, DWR has
   been the creditworthy party transacting with the ISO to
   secure services under the ISO's Federal Energy Regulatory
   Commission approved tariffs that are necessary for the
   transmission of power to serve PG&E's retail customers and to
   meet its wholesale obligations.  Beginning January 1, 2003,
   DWR will cease to procure the ISO services to support PG&E's
   customers and wholesale obligations.  Instead, PG&E
   anticipates resuming the responsibility for obtaining the ISO
   services to serve all its customer load, including but not
   limited to the Residual Net Short Position.  PG&E also
   expects purchasing and selling limited amounts of real time
   energy through the ISO daily markets.  However, PG&E will
   satisfy its ancillary service needs through its own
   resources;

3. Inter-Utility Exchanges

   Any exchanges between utilities may be used to swap power
   resources to each utility's benefit.  The exchanges of peak
   for off-peak, or seasonal peak for peak exchanges may be
   executed by PG&E if a suitable exchange counter-party can be
   secured and the exchange provides cost/benefit ratios
   consistent with the Procurement Plan; and

4. Purchases through Contracts with Suppliers for Gas &
   Electricity

   PG&E anticipates entering into contracts with suppliers and
   other counter parties through the process of competitive
   bidding in order to purchase or sell power, gas or related
   services for transactions where delivery will begin more than
   six months from the competitive bidding solicitation date;

PG&E also sought and obtained the Court's permission to post
collateral to secure its obligations in connection with the
procurement.  PG&E estimates that up to $150,000,000 in cash may
be utilized during 2003 for purposes of posting collateral with
the ISO and with counterparties to contracts.  PG&E expects to
fund its collateral requirements from revenues generated on and
after January 1, 2003 and, therefore, funds needed for
implementation of the reorganization plan should not be
jeopardized.  The only exception to the use of going-forward
revenues will be for any cash deposits to be made with the ISO
to cover transactions for January 2003 only. (Pacific Gas
Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service,
Inc., 609/392-0900)    


PACIFICARE HEALTH: Selling $10MM of 3% Conv. Subordinated Notes
---------------------------------------------------------------
PacifiCare Health Systems Inc., (Nasdaq:PHSY) announced the sale
of $10 million aggregate principal amount of 3% convertible
subordinated debentures due 2032 in connection with the exercise
in part by the initial purchasers for PacifiCare's recent
private placement of $125 million aggregate principal amount of
such debentures of their option to purchase additional
debentures.

The debentures, which are convertible into shares of
PacifiCare's common stock, will be due in October 2032.

PacifiCare intends to use a portion of the estimated net
proceeds of this sale of debentures to permanently repay
indebtedness under its senior credit facility and the remainder
for general corporate purposes.

As reported in Troubled Company Reporter's December 4, 2002
edition, Standard & Poor's assigned its 'B' rating to PacifiCare
Health Systems Inc.'s $125 million 3% convertible subordinated
debentures, which are due in 2032 and are being issued under SEC
Rule 144A with registration rights.

Standard & Poor's also said that it revised its outlook on
PacifiCare to stable from negative.

"The rating is based on PacifiCare's good business position as a
regional managed care organization and improved earnings
performance," said Standard & Poor's credit analyst Phillip C.
Tsang. "Offsetting these strengths are PacifiCare's marginal
capitalization and high percentage of goodwill in its capital."
PacifiCare expects to use the net proceeds from the issue to
permanently repay indebtedness under its senior credit facility,
with the remainder for general corporate purposes.


PEGASUS COMMS: Won't Pay Dividend on 12-3/4% Preferred Shares
-------------------------------------------------------------
Pegasus Communications Corporation (NASDAQ:PGTV) announced that
its subsidiary, Pegasus Satellite Communications, Inc., is not
declaring the semiannual dividend payable January 1, 2003 with
respect to Pegasus Satellite Communications' 12-3/4% Series A
Cumulative Exchangeable Preferred Stock and 12-3/4% Series B
Cumulative Exchangeable Preferred Stock.

In accordance with the terms of the 12-3/4% Preferred Stock's
Certificate of Designation, the declaration and payment of the
dividend is subject to the discretion of Pegasus Satellite
Communications' Board of Directors.

Pegasus Communications Corporation -- http://www.pgtv.com--  
provides digital satellite television to rural households
throughout the United States. Pegasus owns and/or operates
television stations affiliated with CBS, FOX, UPN and The WB
networks.


PERMAGRAIN PRODUCTS: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Permagrain Products, Inc.
        4789 West Chester Pike
        Newtown Square, Pennsylvania 19073

Bankruptcy Case No.: 02-37895

Type of Business: Operated a flooring manufacturing business
                  and used radioactive cobalt-60 to mold
                  plastics with wood to harden and extend the
                  life of commercial flooring. The company
                  ceased operations November 11, 2002.

Chapter 11 Petition Date: December 17, 2002

Court: Eastern District of Pennsylvania (Philadelphia)

Judge: Diane W. Sigmund

Debtor's Counsel: Jeffrey Kurtzman, Esq.
                  Klehr, Harrison, Harvey, Branzburg & Ellers
                  260 South Broad Street
                  4th Floor
                  Philadelphia, PA 19102
                  Tel: (215) 568-6060


PERSONALCARE: AM Best Says B+ Rating Unaffected by Asset Sale
-------------------------------------------------------------
A.M. Best Co., announced that the financial strength ratings of
PersonalCare Insurance of Illinois (Champaign, IL) and Coventry
Health Care, Inc., (NYSE:CVH) (Bethesda, MD) are unaffected by a
recent acquisition announcement.

A.M. Best Co., views the proposed acquisition of PersonalCare
Health Management, Inc., by Coventry as an opportunity to
provide synergies for both companies. The acquisition is
expected to be paid for entirely in cash. Pending regulatory
approval, the transaction is likely to close in the first
quarter 2003 and is anticipated to be accretive to earnings in
2003.

For Coventry, the expansion into the Central/Southern Illinois
region is an extension of its existing market in neighboring
Missouri. For PersonalCare, Coventry's system and administrative
efficiencies along with its pricing discipline should help to
lower expenses and improve operating performance. PersonalCare
serves approximately 78,000 members via its HMO, PPO and POS
networks.

The acquisition is consistent with Coventry's strategy for
growth, which has been the acquisition of HMOs with poor
performance and restoring their profitability over the next 18
to 24 months. A.M. Best expects the earnings from the
PersonalCare operations to improve as the business is integrated
into Coventry's systems and changes are rapidly implemented to
increase profitability.

PersonalCare has a financial strength rating of B+ (Very Good),
and Coventry's members carry financial strength ratings of B++
(Very Good) and B+.


PETROLEUM GEO-SERVICES: Deferring Distributions on Preferreds
-------------------------------------------------------------
Petroleum Geo-Services ASA (NYSE:PGO) (OSE:PGS) is deferring
distribution payments on the preferred securities issued by its
wholly owned trust subsidiary PGS Trust I (PGO PrA), commencing
with the December 31, 2002 distribution payment. Under the terms
of the securities, PGS has the option to defer distributions for
up to 20 consecutive quarterly periods without causing a
default.

Petroleum Geo-Services is a technologically focused oilfield
service company principally involved in two businesses:
Geophysical Operations and Production Operations. PGS acquires,
processes and markets 3D, time-lapse and multi-component seismic
data. These data are used by oil and gas companies in the
exploration for new reserves, the development of existing
reservoirs, and the management of producing oil and gas fields.
PGS' advanced geophysical technologies allow oil and gas
companies to better characterize and monitor their reservoirs in
order to enhance production and ultimate recovery of
hydrocarbons. In its Production Operations business, PGS owns
four floating production, storage and offloading systems. FPSOs
permit oil and gas companies to produce from offshore fields
more quickly and cost effectively. PGS operates on a worldwide
basis with headquarters in Oslo, Norway.

                         *    *    *

               Capital Resources and Liquidity

In its report for the quarter ended September 30, 2002, the
Company stated: "As a result of our current financial situation,
we are highly dependent on our current cash and cash equivalent
($86.8 million at September 30, 2002), improved cash flow and
proceeds from assets sales to meet our financial obligations.

"[W]e have engaged financial advisors to assist us with
evaluating our financial condition and making recommendations to
our Board of Directors regarding alternatives for enhancing or
preserving value to our stakeholders. These financial advisors
are also expected to assist us with the possible extension of
our upcoming debt maturities and/or other restructuring
alternatives. We have approximately $1.1 billion of debt and
other contractual obligations maturing in 2003. In connection
with the one-time impairment charges described above, we are
currently in violation of certain financial covenants in various
bank credit and leasing agreements and have commenced
discussions with various creditors to obtain waivers of such
financial covenant defaults. There can be no assurance that any
such extension of debt maturities or required waivers will be
obtained. The Company notes that the breaches that have been
triggered are restricted to certain financial creditors only and
these breaches of themselves will not cross default contracts
with other financial creditors. The Company is current on all
payment obligations under its indebtedness.

"During November 2002, Standard & Poor's Ratings Services, a
division of the McGraw-Hill Companies, Inc., downgraded our
corporate credit rating, as well as our rated obligations, to
CCC. The ratings have been removed from credit watch with
developing implications (where they were placed during September
2002) and the outlook is negative.

"During November 2002, Moody's Investor Service, Inc.,
downgraded our issuer rating to Caa1 and our senior unsecured
debt rating to Caa3, stating that the credit rating outlook was
negative.

"Also during November 2002, Fitch IBCA, Duff & Phelps downgraded
our senior unsecured debt rating to CCC.

"If one or more of these rating agencies continue to rate our
debt or trust preferred securities below investment grade, we
may have difficulty obtaining, and we may not be able to obtain,
financing and our cost of obtaining any additional financing or
refinancing existing debt will likely be increased
significantly. Additionally, since our credit ratings are below
investment grade, we are obligated to provide up to 35.7 million
pounds (approximately $56.0 million) in collateral/credit
support to the lessors under existing UK leasing arrangements.
Based on recent discussions with these UK lessors, we currently
do not believe that cash collateral will be required."


PHILLIPS-VAN HEUSEN: S&P Affirms BB Rating over CKI Acquisition
---------------------------------------------------------------  
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit rating on Phillips-Van Heusen Corp., following the
company's December 17, 2002 announcement that it plans to
acquire Calvin Klein Inc., for total considerations of between
$550 million and $600 million.

The outlook is stable. New York, New York-based Phillips-Van
Heusen is a vertically integrated manufacturer, marketer, and
retailer of men's and women's apparel and footwear. Principal
brands include Van Heusen, Arrow, Izod, Geoffrey Beene, and
Bass.

"We believe the acquisition of CKI represents a unique
opportunity for Phillips-Van Heusen and that credit measures
will be restored within a year of the acquisition," said
Standard & Poor's credit analyst Diane Shand. "In recent years,
Phillips-Van Heusen has been successful at developing acquired
brands by leveraging its strong position in dress shirts to
expand its penetration in department stores and utilizing its
good infastructure (sourcing, information technology, logistics,
and warehousing). Phillips-Van Heusen should be able to grow
CKI's existing business and has plans to launch better men's and
women's sportswear and accessories lines under the Calvin Klein
name."

Standard & Poor's also said that the company's operating
performance should remain relatively stable due to the
streamlining of operations during the past few years, which has
kept cash flow protection measures satisfactory for the rating.
Nevertheless, the company remains vulnerable to the competitive
specialty retail market, the U.S. economy, and integration risk
related to the CKI acquisition, which could hamper performance.

CKI is a licensing and design company with a small wholesale
business and a chain of four full priced retail stores in the
U.S. and abroad. CKI, together with its network of licensing
partners, generates over $3 billion in annual retail sales
worldwide, and the royalty stream is estimated to be $120
million.


PILLOWTEX: Receives Waiver of Compliance from Term Loan Lenders
---------------------------------------------------------------
Pillowtex Corporation (OTC Bulletin Board: PWTX) has received a
waiver of compliance from its term loan lenders with the
interest coverage ratio and leverage ratio covenants contained
in its term loan agreement for the fiscal quarter ending
December 28, 2002.  The agreement entered into with the term
loan lenders also extends through the end of the first fiscal
quarter of 2003 the effectiveness of the asset coverage ratio
test and the minimum availability requirement, which were two
additional financial covenants that were added to the term loan
in September 2002.

Pillowtex's President Michael T. Gannaway stated,  "We are
pleased that our term loan lenders have approved this amendment,
and as we go into 2003, we remain focused on our core business
and on aligning our business strategies with our retail
partners."

Pillowtex Corporation, with corporate offices in Kannapolis,
N.C., is one of America's leading producers and marketers of
household textiles including towels, sheets, rugs, blankets,
pillows, mattress pads, feather beds, comforters and decorative
bedroom and bath accessories.  The Company's brands include
Cannon, Fieldcrest, Royal Velvet, Charisma and private labels.
Pillowtex currently employs approximately 8,000 people in its
network of manufacturing and distribution facilities in the
United States and Canada.

Pillowtex Corp.'s 10% bonds due 2006 (PWTX06USR1), DebtTraders
reports, are trading at about a penny on the dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=PWTX06USR1
for real-time bond pricing.


POLYONE CORP: Selling Majority Stake in Techmer to TPM Holdings
---------------------------------------------------------------
PolyOne Corporation (NYSE: POL), a leading global polymer
services company, and TPM Holdings, LP, a limited partnership,
have reached an agreement for PolyOne to sell to TPM Holdings
its majority interest in the joint venture company Techmer PM,
LLC.

Under the agreement -- which concludes an arbitration filed by
TPM Holdings, PolyOne will sell its 51 percent position no later
than January 31, 2003. Specific terms of the agreement and the
purchase price were not disclosed. TPM Holdings, which owns the
remaining 49 percent of Techmer PM, is headed by John R. Manuck,
who will continue as manager and president.

Techmer PM , LLC has production facilities in California,
Tennessee, Georgia and Kansas, where it produces high-quality
color and additive concentrates. Its proprietary dispersions are
particularly well suited to the fiber and value-added films
markets.

PolyOne and Techmer PM stressed that no customer disruptions
will result from PolyOne's divestiture. Both companies will
continue to serve their respective customers.

Their relationship dates to 1997 when TPM Holdings (then known
as Techmer PM, LP) and M.A. Hanna Company, which is now part of
PolyOne, formed Techmer PM, LLC as a joint venture limited-
liability company. PolyOne reported financial results from
Techmer PM, LLC within its Plastic Compounds and Colors segment.

PolyOne Corporation, with revenues approximating $2.6 billion,
is an international polymer services company with operations in
thermoplastic compounds, specialty resins, specialty polymer
formulations, engineered films, color and additive systems,
elastomer compounding and thermoplastic resin distribution.
Headquartered in Cleveland, Ohio, PolyOne has employees at
manufacturing sites in North America, Europe, Asia and
Australia, and joint ventures in North America, South America,
Europe, Asia and Australia. Information on the Company's
products and services can be found at http://www.polyone.com  

Techmer PM, LLC operates five manufacturing facilities in North
America. It designs and produces colorant and additive
concentrates with a focus on high-performance applications where
quality, technical support and problem solving are critical. The
500 employees of Techmer PM, LLC service customers in market
segments of the plastic industry that fabricate everything from
thin films and fibers to extrusions and moldings. Information on
Techmer PM, LLC's products and services can be found at
http://www.techmerpm.com  

                           *   *   *

               S&P Credit Rating Remains at BB+

As reported in the September 20, 2002 issue of the Troubled
company Reporter, Standard & Poor's Ratings Services lowered its
corporate credit and senior unsecured debt ratings on PolyOne
Corp., to double-'B'-plus from triple-'B'-minus, citing slower-
than-expected progress in improvement to the financial profile.
The outlook is negative.

"The rating action reflects the deterioration in operating and
financial performance stemming from adverse business conditions,
and the likelihood that needed improvement to the financial
profile could take longer than anticipated," said Standard &
Poor's credit analyst Peter Kelly. The continuation of
challenging industry fundamentals has weakened the financial
profile and is likely to limit the improvement anticipated in
the prior rating. Standard & Poor's recognizes the company's
efforts to reduce costs and manage cash flow, as well as recent
modest improvement in earnings.


PROVIDIAN FINANCIAL: Completes $750-Million Term Securitization
---------------------------------------------------------------
Providian Financial Corporation (NYSE: PVN) announced that on
December 17, 2002,  Providian National Bank completed the
previously announced sale of $750 million in three-year Series
2002-B floating rate class A asset backed certificates issued by
the Providian Gateway Master Trust.

In addition, the Company announced that Providian National Bank
has received commitments for additional funding of $1.15 billion
under the Series 2002-A variable funding facility issued by the
Providian Gateway Master Trust. These commitments are in
addition to the initial $1 billion in commitments obtained when
the Series 2002-A facility was established in October 2002.  In
connection with the October closing, $500 million of Series
2002-A certificates were funded by investors.

The Providian Gateway Master Trust certificates described above
have not been and will not be registered under the Securities
Act of 1933 or any state securities law and may not be offered
or sold in the United States absent registration or an
applicable exemption from registration requirements.

San Francisco-based Providian Financial is a leading provider of
credit cards and deposit products to customers throughout the
U.S.  One of America's largest bankcard issuers, Providian has
over $19 billion in managed receivables and more than 12 million
customer relationships.

As previously reported, Moody's Investors Service confirmed the
ratings of Providian Financial Corporation and its unit
Providian National Bank.

Outlook is stable.

                   Ratings Confirmed:

* Providian Financial Corporation

  - senior unsecured debt rating of B2.

* Providian Capital I

  - the preferred stock rating of Caa1.

* Providian National Bank

  - bank rating for long-term deposits of Ba2

  - ratings on senior bank notes and other senior long-term
    obligations of Ba3;

  - issuer rating of Ba3;

  - subordinated bank notes rating of B1, and

  - bank financial strength rating of D.

The ratings confirmation reflects the numerous measures the
company has taken just to strengthen its financial position,
including portfolio sales, facility closings, and the
implementation of conservative underwriting and marketing plans.

Providian Financial's 3.25% bonds due 2005 are currently trading
at about 73 cents-on-the-dollar.


PUBLIC SERVICE: Enters into New 3-Year $350MM Credit Facility
-------------------------------------------------------------
Public Service Enterprise Group has entered into a new three-
year revolving credit facility for $350 million, replacing the
five-year $150 million facility set to expire on December 22.  
The new facility will expire on December 19, 2005.

"This new facility enhances PSEG's already strong financial
profile and improves our overall liquidity position," said
Thomas O'Flynn, PSEG's chief financial officer.  "The credit
facilities available to PSEG and its subsidiaries now add up to
$2.47 billion, of which approximately $2.0 billion is currently
available to support the operations of the companies."

O'Flynn added:  "We are pleased that we were able to upsize this
facility for a three-year period on terms consistent with our
prior transactions."

J.P. Morgan Securities and Salomon Smith Barney were the lead
arrangers on the transaction, which involved a total of nine
banks.

PSEG (NYSE: PEG), a diversified energy holding company with more
than $25 billion in assets has its headquarters in Newark, NJ.  
PSEG's primary subsidiaries are Public Service Electric and Gas
Company (PSE&G), New Jersey's largest electric and gas
distribution utility; PSEG Power, one of the nation's leading
independent energy producers; and PSEG Energy Holdings which
operates PSEG's other non-regulated businesses.

At September 30, 2002, Public Service Enterprise's balance sheet
shows that total current liabilities exceeded total current
assets by about $1.4 billion.


REGENERATION TECHNOLOGIES: Inks $15-Mill. BofA Credit Agreement
---------------------------------------------------------------
Regeneration Technologies, Inc. (Nasdaq: RTIX) (RTI), the
Florida-based processor of precision-tooled orthopedic
allografts, has signed a $15.1 million credit agreement with
Bank of America.

The one-year term loan, which is fully collateralized by cash
and investments, will be used to pay off current mortgage loans
outstanding to Bank of America, including $12.6 million under a
construction loan and $2.5 million under a term loan. RTI will
continue pursue longer term financing alternatives.

"This financial flexibility will allow us to continue to focus
our efforts on our core business of developing innovative
technologies and products while continuing to provide high-
quality service to our partners," said Thomas F. Rose, chief
financial officer of RTI.

As previously disclosed in October 2002, RTI entered into a 90-
day extension of its forbearance agreement and the maturity date
of its loans with its commercial lender, Bank of America, which
was set to expire December 31, 2002. All obligations under the
forbearance agreement have been satisfied with the proceeds from
the new credit agreement.

RTI processes allograft tissue into shaped implants for use in
orthopedic and other surgeries. By processing allograft tissue
into forms that can be used in many types of surgical procedures
(orthopedic, urologic, craniofacial and cardiovascular surgery),
RTI enables patients to benefit from the gift of donated
tissues. Allografts processed by RTI include the patented MD-
Series(TM) threaded bone dowels, Cornerstone-SR(TM) blocks,
Opteform(R) and Optefil(TM) allograft pastes,
Osteofil/Regenafil(TM) injectable bone paste, FasLata(TM) fascia
lata tissue, and cortical bone pins and interference screws. RTI
also holds the patent on the BioCleanse(TM) process, the only
proven tissue sterilization process validated to eliminate
viruses, bacteria, fungi and spores from tissue without
impacting the structural or biomechanical integrity of the
allograft.


RFS ECUSTA: Delaware Court Fixes February 7 as Claims Bar Date
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware orders
that February 7, 2003, is the deadline by which all creditors of
RFS Ecusta Inc., and RFS US Inc., who wish to assert a claim
against the estates, must file a proof of claim or be forever
barred from asserting that claim.

Any creditor whose claim has been previously allowed or paid by
order of the Court, need not file proofs of claim in these
cases, and holders of the Debtors' equity securities need not
file a proof of that interest.  

All original proofs of claim must be received on or before 4:00
p.m. on the Bar Date at:

          Delaware Claims Agency, LLC
          RFS Ecusta Inc. and RFS US Inc. Claims Agent
          P.O. Box 515
          Wilmington, DE 19899

RFS Ecusta Inc., and RFS US Inc., were leading manufacturers of
high quality premium paper products for the tobacco and
specialty and printing paper products.  The Company filed for
chapter 11 protection on October 23, 2002.  Christopher A. Ward,
Esq., at The Bayard Firm and Joel H. Levitin, Esq., at Dechert,
represent the Debtors in their restructuring efforts.  When the
Debtors filed for protection from its creditors, they listed
estimated debts and assets of more than $10 million each.


RIVIERA TOOL: Deloitte & Touche Expresses Going Concern Doubt
-------------------------------------------------------------
Riviera Tool Company is a designer and manufacturer of large
scale, complex stamping die systems used to form sheet metal
parts. Most of the stamping die systems sold by the Company are
used in the production of automobile and truck body parts such
as roofs, hoods, fenders, doors, door frames, structural
components and bumpers. Major customers are, DaimlerChrysler,
Ford Motor Company and General Motors Corporation.

During 2002, the Company sustained a loss from operations of
$2,289,114 and a net loss of $3,001,557. This loss resulted in
an accumulated deficit of $3,305,059 as of August 31, 2002.  
Also during 2002, the Company was not in compliance with certain
covenants of its long-term loan agreement causing a significant
portion of the Company's debt to be classified as current in the
financial statements. The Company's agreement expired
September 1, 2002 and has been renewed monthly thereafter.

Management believes the Company will be able to refinance the
debt as the Company has completed negotiations with its current
bank and another lender to obtain long-term financing. The
Company has received Commitment Letters from these financial
institutions, however, such commitments are subject to
conditions yet to be fulfilled. Management believes that such
conditions should be fulfilled within sixty days. Additionally,  
Riviera Tool has a backlog of $21 million, is anticipating other
significant long-term contracts with customers, and believes
this backlog and projected cash flow from operations together
with the anticipated debt financing will be sufficient to
finance the Company's operations in 2003.

Riviera Tool's independent auditors, Deloitte & Touche, LLP,
said, in the December 9, 2002 comment on Note 2 in the Company's
current financial statements: "The accompanying financial
statements have been prepared assuming that Riviera Tool Company
will continue as a going concern...[T]he Company was not in
compliance with certain covenants of its long-term loan
agreement. The Company is negotiating with its bank and another
lender to obtain long-term financing. The Company's difficulties
in meeting its loan agreement covenants and obtaining financing
as discussed in Note 2 raise substantial doubt about its ability
to continue as a going concern. Management's plans in regards to
these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from
the outcome of this uncertainty."


ROHN INDUSTRIES: Wins Major Shareholder's Approval of Asset Sale
----------------------------------------------------------------
ROHN Industries (Nasdaq: ROHN), a provider of infrastructure
equipment for the telecommunications industry, announced that
its majority stockholder, the UNR Asbestos-Disease Claims Trust,
has executed a written consent to the previously announced sale
of substantially all of the Company's assets to an affiliate of
Platinum Equity LLC, a Los Angeles-based private equity firm.
The Trust's consent is subject to the satisfaction of various
conditions, including the execution of documentation providing
for the payment to ROHN's stockholders of an aggregate of $3.5
million, or approximately 8 cents per share, of the proceeds
from the sale of assets to Platinum Equity and the tax refund
the Company expects to receive as a result of the transaction.
Although the Company expects that this condition, as well as the
other conditions to the Trust's consent, will be satisfied,
there can be no assurance that the transaction will be
consummated.  Even if the transaction is consummated, there can
be no assurance as to the total amount and timing of any
payments to the Company's stockholders.  There are ongoing
discussions among the Company, the Trust and the Company's bank
lenders regarding these matters.

ROHN has entered into an amendment to its bank credit facility.  
Under this amendment, the bank lenders have increased the
availability under the revolving portion of the credit facility
from $18 million to $21 million for the period from December 17,
2002 through December 31, 2002.  In addition, the bank lenders
have agreed to permit $750,000 of the proceeds from the expected
sale of the Company's facilities located in Casa Grande, Arizona
to be used to repay outstanding revolving loans rather than term
loans, which will have the effect of preserving that amount of
availability under the revolving portion of the credit facility.
The bank lenders have also agreed to defer until December 31,
2002 a $1.5 million principal payment that would have been due
on December 1, 2002.

ROHN Industries, Inc., is a manufacturer and installer of
telecommunications infrastructure equipment for the wireless
industry. Its products are used in cellular, PCS, radio and
television broadcast markets. The company's products and
services include towers, design and construction, poles and
antennae mounts. ROHN has ongoing manufacturing locations in
Peoria, Illinois and Frankfort, Indiana along with a sales
office in Mexico City, Mexico.

                          *    *    *

As reported in Troubled Company Reporter's November 13, 2002
edition, the Company is experiencing significant liquidity
and cash flow issues which have made it difficult for the
Company to meet its obligations to its trade creditors in a
timely fashion.  The Company expects to continue to experience
difficulty in meeting its future financial obligations.

At September 30, 2002, the Company's balance sheet shows a
working capital deficit of about $1 million.

On November 7, 2002, the Company entered into an amendment to
its credit and forbearance agreements with its bank lenders.
The amendment to the credit agreement, among other things,
further limits the Company's borrowing capacity by modifying the
definition of the borrowing base to decrease the amount of
inventory included in the borrowing base.  Additionally, the
amendment modifies the definition of the borrowing base to
provide additional borrowing capacity of varying amounts during
this period.  The amendments also provide for a series of
reductions in the Company's revolving credit facility that
reduce the availability under that facility from $23 million
currently to $16 million on and after December 31, 2002.  In
addition, the amendment also provides for additional term loan
payments through January 1, 2003. Furthermore, the amendment
provides for additional bank fees, some of which will be waived
if the Company achieves a significant reduction in the aggregate
loan balance at December 31, 2002.  Finally, the current
amendment also includes covenants measuring revenues, cash
collections and cash disbursements.  Under the amendment to the
forbearance agreement, the bank lenders have agreed to extend
until January 31, 2003 the period during which they will forbear
from enforcing any remedies under the credit agreement arising
from ROHN's breach of financial covenants contained in the
credit agreement except for the covenants added to the credit
agreement as a result of this new amendment.  If these financial
covenants and related provisions of the credit agreement are not
amended by January 31, 2003, and the bank lenders do not waive
any defaults by that date, the bank lenders will be able to
exercise any and all remedies they may have in the event of a
default.

The Company continues to experience difficulty in obtaining
bonds required to secure a portion of anticipated new contracts.
These difficulties are attributable to the Company's continued
financial problems and an overall tightening of requirements in
the bonding marketplace.  The Company intends to continue to
work with its current bonding company to resolve its concerns
and to explore other opportunities for bonding.


SCIENTIFIC GAMES: Completes 2002 Debt Workout Plan's Final Phase
----------------------------------------------------------------
Scientific Games Corporation (Nasdaq: SGMS) -- whose corporate
credit rating is maintained by Standard & Poor's at 'double-B-
minus' -- completed the final phase of its 2002 debt
restructuring plan with the replacement of its existing senior
secured credit facility with a new facility consisting of a
revolving credit facility due 2006 that is initially $50 million
and that can be increased to $70 million and a $290 million Term
Loan B due 2008. As of the closing of this transaction, the
company is undrawn on the revolver and has approximately $24
million in cash and equivalents. The facility is guaranteed by
all current and future, direct and indirect, wholly-owned
domestic subsidiaries and is secured by a first priority
security interest in all present and future tangible and
intangible assets of those subsidiaries. Had this new agreement
been in place in 2002, the Company would have saved
approximately $10 million in interest. Together with the
previously announced repayment of subordinated notes, the
Company expects its annual interest cost in 2003 will be
approximately $26 million compared to approximately $41 million
in 2002.

As a result of the debt restructuring, Scientific Games raised
its guidance for 2003 for fully diluted earnings per share to
between $0.50 and $0.60 on approximately 90 million weighted
average shares outstanding. Such guidance is based on a maximum
anticipated tax rate of 35% and does not reflect any benefits
from the planned acquisition of MDI Entertainment, Inc., which
is expected to add at least $.03 per share upon completion of
the acquisition. In addition, the Company confirmed its guidance
for 2002 of earnings per share per fully diluted share of $0.41
to $0.44, before cash and non-cash debt restructuring charges
currently estimated at approximately $25 million, based on an
effective tax rate of 12% and on approximately 80 million
weighted average shares outstanding.

Scientific Games Corporation is the leading integrated supplier
of instant tickets, systems and services to lotteries, and the
leading supplier of wagering systems and services to pari-mutuel
operators. It is also a licensed pari-mutuel gaming operator in
Connecticut and the Netherlands and is a leading supplier of
prepaid phone cards to telephone companies. Scientific Games'
customers are in the United States and more than 60 other
countries. For more information about Scientific Games, visit
its Web site at http://www.scientificgames.com  


SEVEN SEAS PETROLEUM: AMEX Will Delist Shares Effective Tomorrow
----------------------------------------------------------------
Seven Seas Petroleum Inc., (Amex: SEV) announced the American
Stock Exchange had issued a decision to delist the Company's
shares. The Company has until today, December 26, 2002, to
appeal the ruling. As previously announced, Seven Seas cannot
meet the listing standards and therefore does not expect to
appeal the decision. The Company's shares will cease trading on
the Amex on December 27, 2002. The Company plans to pursue
quotation of shares on the OTC Bulletin Board.

Seven Seas Petroleum Inc., is an independent oil and gas
exploration and production company operating in Colombia, South
America.

                         *     *     *

As previously reported, Seven Seas Petroleum Inc., is in default
under its 12-1/2% $110 Million Senior Subordinated Notes due to
a failure to make the $6,875,000 semiannual interest payment on
November 15, 2002. The full principal plus accrued and unpaid
interest will be due and payable immediately upon notice by the
Trustee or holders of 25% of the Senior Notes.

Also, the Company is currently in default under its 12% Senior
Secured $45 Million Notes as a result of cross-default
provisions in the governing documents relating to the Company's
failure to meet the obligations owed to the Senior Notes. On
December 13, 2002, Chesapeake Energy accelerated all amounts
owing to Chesapeake Energy, including principal, accrued
interest, fees, costs, and expenses, and as a result, such
amounts are immediately due and payable. Additionally, under the
terms of the $22.5 million CHK Note (one-half of the $45 Million
Notes) the rate of interest has been increased from 12% to a
default rate of 13%.


SHILOH INDUSTRIES: Reports Improved Results for Fourth Quarter
--------------------------------------------------------------
Shiloh Industries, Inc., (Nasdaq: SHLO) reported results for the
fourth quarter and fiscal year ended October 31, 2002.

                    Fourth Quarter Results

For the fourth quarter ended October 31, 2002, the Company had
revenues of $173.3 million, an increase of $15.1 million or 9.6%
from the same period in fiscal 2001. Reported operating loss for
the quarter was $9.4 million, which included a non-cash pretax
asset impairment charge of $10.0 million related to a facility
leased to Valley City Steel, LLC. Charges of $4.2 million were
also taken in the fourth quarter of fiscal 2002 to reflect the
increase in defined benefit plan expenses stemming from
curtailment charges. The operating loss for the comparable
quarter in fiscal 2001 was $39.6 million. Net loss for the
fourth quarter ended October 31, 2002 was $18.9 million or $1.28
net loss per share. The $18.9 million net loss includes $21.6
million of pretax non-cash charges as a result of Valley City
Steel, LLC filing for protection under Chapter 11 of the United
States Bankruptcy Code on November 27, 2002. The fourth quarter
2001 reported net loss per share was $2.12.

                         Year End Results

For the year ended October 31, 2002, the Company had revenues of
$625.6 million, a decrease of $36.9 million or 5.6% from the
prior year, which is primarily due to operations that were
divested or closed during the fiscal year. Operating loss for
the fiscal year 2002 decreased by $22.4 million to $6.9 million
from an operating loss of $29.3 million for the prior year ended
October 31, 2001. Net loss for the year improved by $8.7 million
to $26.8 million, or a net loss of $1.81 per basic and diluted
share, compared to a net loss of $35.5 million, or a net loss of
$2.40 per basic and diluted share in fiscal 2001.

                        Changes in Revenues

The increase in revenue for the fourth quarter of fiscal 2002 is
primarily due to an increase in industry volumes in automotive
and heavy truck compared to the fourth quarter of fiscal 2001.
The decrease in annual revenues was primarily the result of the
Valley City Steel Division transaction in July 2001 and the
closures of the Romulus Blanking Division, Wellington Die
Division and Canton Die Division during the first quarter of
fiscal 2002.

                         Operating Results

The operating loss, including the $10.0 million asset impairment
charge, improved by $30.1 million for the fourth quarter and by
$22.4 million for the year when compared to the similar periods
in fiscal 2001. The improvements are a result of continuing
operational improvements and cost reductions. "The Company is
continuing to identify cost reductions and improve operational
efficiencies using our '6 Sigma' disciplines and process
characterization/process optimization practices," said Theodore
K. Zampetis, President and CEO. Mr. Zampetis added, "Excluding
the impact of the Valley City Steel non-cash pretax charges of
$21.6 million and defined benefit plan curtailment pretax
charges of $4.2 million, the Company has shown significant
progress and exceeded our business plan for the year."

      Impact of Bankruptcy Filing by Valley City Steel, LLC

The controlling owner of Valley City Steel, LLC unilaterally
filed a voluntary petition for protection under Chapter 11 of
the United States Bankruptcy Code on behalf of Valley City
Steel, LLC on November 27, 2002. The bankruptcy filing resulted
in the Company recording $21.6 million of pretax non-cash fourth
quarter charges. The Company recorded a $11.6 million charge to
recognize the losses associated with the minority equity
investment in Valley City Steel, LLC which is reflected in the
Equity in net earnings (losses) of affiliated company line in
the Condensed Consolidated Statements of Operations. In
addition, a $10.0 million charge was recorded for Shiloh owned
land and building that is leased by Valley City Steel, LLC and
is encumbered as a result of debt incurred by Valley City Steel,
LLC. The $10.0 million is included in the Asset impairment
charge (recovery) line in the Condensed Consolidated Statements
of Operations. Liquidity

The Company ended the year with $209.1 million of borrowings
under the revolving line of credit, a reduction of $55.4 million
from the $264.5 million outstanding at October 31, 2001.
Availability at October 31, 2002 was $47.8 million. "We continue
to execute our plan to generate cash from operations and by
managing working capital, capital spending and tooling costs,"
Mr. Zampetis said, "and debt reduction is a priority for the
Company." Mr. Zampetis added, "The operating results for the
quarter and fiscal year were better than our expectations. We
improved our gross margins throughout the year, finishing at
7.4% of revenues compared to 5.1% in fiscal year 2001. We
lowered our administrative costs for fiscal 2002 as compared to
fiscal 2001 by 2.6% of revenues and reduced our interest expense
by $3.9 million. As we look to the future, we continue our focus
on cost reductions, process optimization, improving our balance
sheet and our commitment to strategically position Shiloh to
differentiate ourselves by offering product and process
innovation through Leadership, Technology and Process
Ownership."

Headquartered in Cleveland, Ohio Shiloh Industries is a leading
manufacturer of engineered welded blanks, first operation
blanks, stamped components and modular assemblies for the
automotive and heavy truck industries. The Company has 16 wholly
owned subsidiaries at locations in Ohio, Georgia, Michigan,
Tennessee and Mexico, and employs approximately 2,800.

A conference call to discuss fiscal 2002 fourth quarter results
will be held on Thursday, January 9, 2003 at 10:30 a.m. (EST).
To listen to the conference call, dial (800) 374-0915
approximately 5 minutes prior to the start time and request the
Shiloh Industries Fourth Quarter Conference Call. A replay of
the conference call will be available from 2 p.m. (EST),
Thursday, January 9, 2003, through 5 p.m. (EST) Thursday,
January 16, 2003. To access the replay, call (800) 642-1687 and
enter conference code 7324092.

                         *    *    *

As previously reported in Troubled Company Reporter, the
international rating agency, Standard & Poor's lowered its
ratings on Shiloh Industries Inc. At the same time, the ratings
remain on CreditWatch with negative implications, where they had
been placed December 12, 2001.

According to the report, the rating actions reflect Standard &
Poor's increased concern over the company's near-term operating
outlook and the belief that the company's financial flexibility
has become quite constrained.

     Ratings Lowered; Remain on CreditWatch Negative

     Shiloh Industries Inc.             TO      FROM
       Corporate credit rating          B-      BB-
       Senior secured debt              B-      BB-


SMARTSALES INC: DataMirror Intends to Acquire Certain Assets
------------------------------------------------------------
DataMirror Corporation (Nasdaq:DMCX) (TSX:DMC), a leading
provider of enterprise application integration and resiliency
solutions, intends to acquire certain assets of SmartSales Inc.,
from the trustee in bankruptcy of the estate of SmartSales.
DataMirror expects to market its family of real-time data
integration and resiliency tools to SmartSales' existing CRM
software customers.

SmartSales' OutSmart CRM software is an effective Sales Force
Automation and Pipeline Management tool that is simple to
install, intuitive to use and quick to yield results. The
solution works within Microsoft(R) Outlook(R), eliminating the
steep learning curve associated with new technologies and
delivering an ease of use that results in a high rate of user
acceptance and requires minimal support resources.

SmartSales has over 100 customers who represent immediate
potential new market opportunities for DataMirror software.
SmartSales customers include The Royal Bank, Rogers, AT&T,
Fujitsu and Qunara.

                    Terms of the Transaction

Under the terms of the accepted purchase offer, DataMirror will
acquire certain assets of SmartSales in a cash transaction and
will account for the acquisition under the purchase method. The
assets being acquired consist of computer equipment, office
furniture, customer lists, accounts receivable, and software and
related technology and intellectual property. DataMirror will
not be assuming any liabilities or obligations of SmartSales
pursuant to the transaction. DataMirror expects the purchase to
be of benefit to it, but does not expect the transaction to have
a material impact on its financial results or on its business
and affairs. The transaction is subject to certain conditions
including court approval under the Bankruptcy and Insolvency Act
(Canada) and is expected to close in early January. The expected
date of closing may be less than 21 days from the date of this
press release in order to allow the bankruptcy trustee to
minimize the cost of winding up the estate of SmartSales.

                    Related Party Disclosure

The President, CEO and Chairman of DataMirror, Mr. Nigel Stokes,
is a former director and Chairman of SmartSales and he holds
approximately 20% of the common shares of SmartSales. Based on
the known liabilities of SmartSales and the amount of the
purchase price, DataMirror does not expect that Mr. Stokes will
receive any of the proceeds of the sale from the Trustee as a
result of his shareholding in SmartSales. The former directors
of SmartSales including Mr. Stokes may benefit indirectly from
the transaction because the Trustee's use of the proceeds of the
sale may reduce certain potential liabilities of the former
directors with respect to unpaid taxes. At the request of Mr.
Stokes the nature and extent of his interest has been recorded
in the minutes of the proceedings of the directors of
DataMirror. The terms of the offer and this press release have
been reviewed and approved unanimously by the board of directors
of DataMirror. The board of directors is of the view that the
assets to be acquired and the immediate potential for collecting
accounts receivable and generating revenue will benefit
DataMirror.

DataMirror (Nasdaq: DMCX; TSX: DMC), a leading provider of
enterprise application integration and resiliency software,
gives companies the power to manage, monitor and protect their
corporate data in real-time. DataMirror's comprehensive family
of LiveBusiness(TM) solutions enables customers to easily and
cost-effectively capture, transform and flow data throughout the
enterprise. DataMirror unlocks the experience of now(TM) by
providing the instant data access, integration and availability
companies require today across all computers in their business.

1,700 companies have gone live with DataMirror software
including Debenhams, Energis, GMAC Commercial Mortgage, the
London Stock Exchange, OshKosh B'Gosh, Priority Health, Tiffany
& Co., and Union Pacific Railroad. DataMirror is headquartered
in Toronto, Canada, and has offices around the globe. For more
information, visit http://www.datamirror.com


TELSCAPE INT'L: Trustee Selling Telereunion Assets to Lambco   
------------------------------------------------------------
As previously reported, Telscape International, Inc., a Delaware
corporation, together with its affiliated debtors, filed
voluntary Petitions for Relief under the provisions of Chapter
11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for
the District of Delaware, Case No. 01-1563 (Jointly
Administered), on April 27, 2001. David Neier has been appointed
Chapter 11 Trustee for the Debtors.

On November 29, 2002, the Trustee, on behalf of the Debtors,
Lambco Telecommunications, U.S.A., Inc., and its affiliate,
Lambco Telecommunicaciones de Mexico, S.A. de C.V., entered into
an asset purchase agreement under which Lambco USA will acquire
stock in Telereunion S.A. de C.V., the principal remaining asset
of the Debtors, and Lambco Mexico will acquire the assets of
Telereunion and related stock of affiliated non-Debtor and
Debtor companies. Telereunion and certain of the Telscape
Companies operate a fiber optic network and provide
telecommunications and other services in Mexico and, through the
Debtors, in the United States. The $18,750,000 purchase price
for the stock and assets was arrived at through arms-length
negotiations between the parties. In addition, pursuant to a
Secured Debtor In Possession Credit and Security Agreement
between the Trustee, on behalf of the Debtors, and Telereunion,
as borrowers and Lambco USA, as lender, the Borrowers seek to
obtain up to $8,600,000 in debt financing from Lambco USA. The
Purchase Agreement, the DIP Loan Agreement and pleadings
concerning these agreements and the sale are publicly available
at http://www.deb.uscourts.govor may be obtained by contacting  
either the United State Bankruptcy Court, 824 Market Street, 6th
Floor, Wilmington, DE 19801 or the Trustee, David Neier, Winston
& Strawn, 200 Park Avenue, New York, NY 10166; (phone) (212)
294-5318, (fax) (212) 294-4700; email: dneier@winston.com.

In connection with the transaction described above, on
December 4, 2002, the Trustee, on behalf of the Debtors, filed
the following motions with the Bankruptcy Court:

     (1) Trustee's Motion for an Order Authorizing the Trustee
         to (a) Sell the Telereunion Assets Free and Clear of
         All Liens and Encumbrances, and (b) Assume and Assign
         Certain Executory Contracts and Unexpired Leases;

     (2) Trustee's Emergency Motion for an Order (a) Approving
         Bidding Producers and Manner of Notice in Connection
         with the Sale of the Debtors' Telereunion Assets Free
         and Clear of All Liens, Claims and Encumbrances and the
         Assumption and Assignment of Executory Contracts
         and Unexpired Leases, (b) Approving Payment of Break-Up
         Fee and Expense Reimbursement in Connection Therewith,
         Scheduling Date, Time and Place for Auction, and (c)
         Approving Form of Notice of the Bid Procedures,
         Sale Hearing and Auction;

     (3) Trustee's Emergency Motion for Interim and Final Orders
         Pursuant to 11 U.S.C. ss.ss.105, 361, 362 and 364, (a)
         Approving Postpetition Financing and Related Relief and
         (b) Setting Final Hearing Pursuant to Bankruptcy Rule
         4001(c); and

     (4) Motion to Expedite Hearing and to Shorten Notice of Bid
         Procedures and Interim Debtor-In-Possession Financing
         Motions.

The Sale Motion, Sale Bid Procedure Motion, DIP Financing Motion
and Expedited Hearing Motion are publicly available at
http://www.deb.uscourts.govor may be obtained by contacting  
either the United States Bankruptcy Court, 824 Market Street,
6th Floor, Wilmington, DE 19801 or the Trustee, David Neier,
Winston & Strawn, 200 Park Avenue, New York, NY 10166; (phone)
(212) 294-5318, (fax) (212) 294-4700; email: dneier@winston.com.


TESORO PETROLEUM: Completes Sale of 23 Retail Outlets to Nella
--------------------------------------------------------------
Tesoro Petroleum Corporation (NYSE:TSO) -- whose Corporate
Credit Rating has been downgraded by Standard & Poor's to
'double-B-minus' -- company completed the sale of 23 retail
outlets in Northern California to Nella Oil Company and Flyers
L.L.C., for $23 million, including working capital.

This transaction completes the previously announced sale of 70
of the company's Northern California retail outlets for total
proceeds of $67 million, of which $33 million will be used to
pay down term debt.

Tesoro Petroleum Corporation, a Fortune 500 Company, is an
independent refiner and marketer of petroleum products and
provider of marine logistics services. Tesoro operates six
refineries in the western United States with a combined capacity
of nearly 560,000 barrels per day. Tesoro's retail-marketing
system includes nearly 600 branded retail stations, of which
over 200 are company operated under the Tesoro(R) and
Mirastar(R) brands.


TRICO MARINE: Secures New $50-Million Revolving Credit Facility
---------------------------------------------------------------
Trico Marine Services, Inc., (Nasdaq: TMAR) has entered
into a new $50 million revolving credit facility to refinance
its previous $45 million credit facility.

The new facility will mature on December 18, 2005, and is
structured as a senior secured revolving credit facility.  
Proceeds from the facility will be used for working capital
needs, capital expenditures and other general corporate
purposes.  The facility will be secured by mortgages on
substantially all of the company's Gulf of Mexico class supply
boats and crew boats.  The new facility, containing customary
terms and conditions, replaces the previous facility, which was
scheduled to expire in June 2003.

Nordea acted as lead arranger and book runner for the new
facility and will serve as administrative agent.  Bank of
Scotland and Hamburgische Landesbank acted as co-arrangers.

Trico Marine provides a broad range of marine support services
to the oil and gas industry, primarily in the Gulf of Mexico,
the North Sea, Latin America, and West Africa.  The services
provided by the Company's diversified fleet of vessels include
the marine transportation of drilling materials, supplies and
crews, and support for the construction, installation,
maintenance and removal of offshore facilities.  Trico has
principal offices in Houma, Louisiana, and Houston, Texas.

                           *   *   *

As previously reported in Troubled Company Reporter, Standard &
Poor's affirmed its single-'B'-plus corporate credit rating on
Trico Marine Services Inc., and at the same time, assigned its
single-'B' debt rating to the company's proposed $250 million
senior unsecured notes issue.

The ratings on Trico Marine reflect the company's participation
in the volatile offshore support segment of the petroleum
industry and aggressive financial leverage. Trico Marine
operates 85 offshore support vessels stationed in the Gulf of
Mexico, the North Sea, South America, and West Africa drilling
markets. Roughly half of the company's revenues are derived from
the Gulf of Mexico, a market that typically operates on short-
term contracts. The recent weakness of the Gulf of Mexico market
has been tempered by the company's exposure to the relatively
stable international markets. Cash flow stability is underpinned
by the contract position of the company's international fleet; a
high percentage of the company's 2002 projected revenue is under
contract.


TXU: Inks Pact to Provide Energy Services to Rio Grande Electric
----------------------------------------------------------------
TXU Energy, a subsidiary of TXU (NYSE: TXU), has signed a multi-
year contract, effective Jan. 1, 2003, to provide energy and
related services to Rio Grande Electric Cooperative Inc.  Under
the agreement, TXU Energy will expand an existing relationship
to provide wholesale power services to Rio Grande in the
Electric Reliability Council of Texas region.

"By using TXU Energy's services, we're able to enhance service,
manage our risk and provide energy cost savings to our members,"
said Dan Laws, general manager and chief executive officer, Rio
Grande.

Peter Greenberg, vice president of origination, TXU Energy,
added:  "We look forward to continuing our longstanding
relationship with Rio Grande, and are pleased that they have
chosen TXU Energy as a supplier in the ERCOT region."

Rio Grande Electric Cooperative has in excess of 5,000 members,
and serves a diverse customer base in 18 West Texas counties and
two New Mexico counties, including residential, small commercial
and industrial consumers, as well as a large number of
agricultural operations.  Rio Grande's service area spans more
than 27,000 square miles, roughly one tenth of the state land
mass, as it follows the river, from which it gets its name, for
some 750 miles.  For more information on Rio Grande Electric
Cooperative, go to http://www.riogrande.coop

TXU is a major energy company with operations in North America
and Australia.  TXU's energy business in North America is the
largest power generator and electricity retailer in Texas with
19,000 megawatts of competitive generation and 2.7 million
electric customers.  TXU also has the largest electricity and
natural gas utilities in Texas, delivering over 100 million
megawatt hours of electricity and over 140 billion cubic feet of
natural gas annually.  TXU's business in Australia includes both
electricity and natural gas delivery and energy operations with
1,280 megawatts of generation and almost 1 million electricity
and natural gas customers.  TXU serves over five million
electricity and natural gas customers in North America and
Australia.  Visit http://www.txu.comfor more information about  
TXU.

                         *    *    *

As reported in Troubled Company Reporter's December 16, 2002
edition, Fitch downgrades TXU Corp.'s senior notes to 'BBB-',
preference stock 'BB+', and commercial paper to 'F3' from 'BBB',
'BBB-', and 'F2', respectively. Also downgraded were the
outstanding ratings on TXU US Holdings, Oncor Electric Delivery
Co., TXU Energy Co. LLC, TXU Gas Co., Pinnacle One Partners,
L.P., TXU Australia Holdings Limited Partnership and TXU
Electricity Limited as outlined below. The Rating Outlook of all
the companies listed above has been revised to Stable from
Negative.

The downgrade of the parent, TXU, takes into account TXU's
already high leverage and the increased debt burden resulting
from recent borrowings under new financing arrangements and
existing credit facilities to maintain liquidity for potential
collateral calls or accelerated repayment of debt associated
with Pinnacle One Partners, and the related increase in interest
expense. Fitch expects that TXU will have to maintain large cash
reserves for an extended period as a precaution against
potential collateral calls or accelerated maturities, pushing up
the cost of capital and potentially delaying a needed reduction
in debt leverage. The Stable Outlook for TXU and the maintenance
of investment grade ratings recognize the existence of
sufficient liquidity to meet expected refinancing and potential
collateral requirements, after the painful but necessary
decision to terminate support for TXU Europe, resulting in the
ailing subsidiary going into administration. The Stable Outlook
for TXU also factors in Fitch's view that TXU Corp. will not
have a material liability for TXU Europe obligations.

DebtTraders reports that TXU Corp.'s 6.375% bonds due 2006
(TXU06USR1) are trading at about 90 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=TXU06USR1for  
real-time bond pricing.


UNITED AIRLINES: Appoints Executive Leadership Team
---------------------------------------------------
UAL Corp., (NYSE: UAL) announced its leadership team as the
company moves to transform itself into a more competitive,
customer-focused airline. The leadership team reports directly
to Chairman, President and Chief Executive Officer Glenn Tilton.

"This leadership structure gives a clear line of sight to
accountability and responsibility, and I have every confidence
that this is the right team for the job," Tilton said. "As the
leadership team, we will focus on outstanding customer service,
operational excellence and strategy innovation - built on the
firm foundation of a cost base that is competitive in the
marketplace. We will manage the process and work of Chapter 11
separately and we will deliver superior functional support to
the entire organization."

The leadership team reporting to Glenn Tilton includes the
following individuals:

Operational and Customer Service Excellence.

Pete McDonald, executive vice president-Operations, has
responsibility for Maintenance and Engineering, Flight
Operations, Onboard Service, System Operations Control, Airport
Operations and Safety. McDonald is leading United's efforts to
deliver outstanding customer service, consistent reliability and
safe and on-time performance.

Innovative Strategic Planning.

Doug Hacker, executive vice president-Strategy, has
responsibility for corporate strategy and revenue-producing
functions, including Corporate Strategic Development, Network
Development (Planning), Project and Cost Management, United
Loyalty Services, Cargo, and Information Systems. Hacker is
directing the development of short- and long-term strategies
that will ensure United's long-term success in meeting the needs
of customers and the demands of the marketplace.

Innovative Sales and Marketing.

An external search is under way to find an executive vice
president-Customer who will have responsibility for Marketing,
Sales and Reservations, International and Alliances. This person
will focus United on attracting customers and building loyalty.
Doug Hacker temporarily is leading this effort.

Successfully Emerging from Chapter 11.

Jake Brace, executive vice president and chief financial
officer, will lead and have primary responsibility for our
successful navigation of the process and work of Chapter 11, and
the critical financial restructuring of the company. He also
will continue to oversee the company's financial functions.

Employee Support and Development.

Sara Fields, senior vice president-People Services, has
responsibility for Human Resources and Labor Relations. She is
directing the company's organization redesign and the
transitions in the workforce during Chapter 11. Longer term,
Fields also will focus on employee training and development
necessary to succeed in United.

Legal Expertise and Guidance.

Fran Maher, senior vice president, general counsel and corporate
secretary, has responsibility for all of United's and UAL's
legal affairs. In the Chapter 11 process, she works closely with
Brace, who has overall responsibility, and oversees the
development and execution of the complex legal strategies to
accomplish the company's short- and long-term business
objectives.

Effective Communication.

Rosemary Moore, senior vice president-Corporate and Government
Affairs, has responsibility for open communications with
employees, including providing timely information about the
company's progress in Chapter 11. Externally, she manages the
reputation of the company and supports business objectives
through communications with key external audiences, and
interaction with governmental, international and regulatory
organizations.

"The experience of the past months and our current situation
have left me in no doubt of what it will take to succeed in the
year ahead," Tilton said. "This leadership team understands what
we need to do to work our way through the challenges immediately
ahead and to establish a strong foundation for the future. But
make no mistake, in addition to committed leadership, this will
need the participation and support of our entire organization."

News releases and other information about United Airlines can be
found at the company's Web site at http://www.united.com


UNITED AIR: Realigns Responsibilities in Revenue-Producing Divs.
----------------------------------------------------------------
United Airlines (NYSE:UAL) announced a realignment of
responsibilities within its revenue-producing divisions
supporting the corporate-wide effort to transform United into a
more resilient and competitive airline.

Doug Hacker, who recently was named executive vice president-
Strategy, said, "The new organizational alignment will sharpen
the airline's focus in key marketing areas while gaining
efficiency by eliminating two officer-level positions."

The marketing organization reports to Hacker temporarily until a
vacant position of executive vice president-Customer is filled.
An external search is under way.

Hacker announced these new responsibilities:

Scott Praven will become senior vice president-Marketing. He
will be responsible for advertising and promotions, brand
management and marketing programs. Praven has been chief
operating officer of UAL Loyalty Services, responsible for
united.com(R) and the operations of Mileage Plus(R). Since
joining United in 1979, Praven has served in a variety of
management positions in pricing, interline marketing and sales
planning, as well as in brand and product development.

Chris Bowers will be senior vice president-Sales and
Reservations and will focus on selling United's services and
communicating its policies directly with United's corporate
customers and travel agents. Previously senior vice president-
Marketing and Sales, Bowers has been with United since 1973 and
has served the company in various capacities including senior
vice president-North America and senior vice president-
International.

Dan Walsh will assume the responsibilities of vice president-
Sales. Walsh had been vice president-North American Sales-East
for United based in New York, a position that has been
eliminated under the new, streamlined organization. He will
report to Bowers and will be responsible for United's sales
organization in the United States and accountable for more than
$10 billion in annual revenue generation. Also reporting to
Bowers will be Tony Bedalov, director of reservations sales.

As a result of the restructuring, Frank Kent, vice president-
North America Sales, has elected to take early retirement. The
position held by Sean Donahue, vice president-North America
Sales-West, has been eliminated, and he will be leaving the
company.

"Frank has been an invaluable contributor to United during his
35-year career and a real force in the industry," said Hacker.
"Sean has held a variety of positions in management during his
18 years with the company, and has made his mark in both sales
and operations. We thank Frank and Sean for their dedicated
service to United, and we wish them well."

Rick Poulton was named president of UAL Loyalty Services, the
wholly owned subsidiary of UAL Corp., taking the position
vacated by Hacker's recent elevation. As president, and as a
United vice president, Poulton will be responsible for the
development and administration of loyalty programs including
Mileage Plus(R), Silver Wings(R) and MyPoints.com(R). ULS also
manages united.com(R), United Vacations(R), United Cruise4Miles,
and many of United's media assets. Poulton has been chief
financial officer at ULS since August of 2000 and has been
responsible for its strategic direction as well as all financial
functions of the company.

News releases and other information about United Airlines can be
found at the company's Web site at http://www.united.com


UNITED AIRLINES: Hires Rothschild Inc. as Investment Banker
-----------------------------------------------------------
At a cost of $225,000 per month for the first 12 months
following the Petition Date and $200,000 per month thereafter,
plus payment of a $15,000,000 Completion Fee if a Transaction
(confirmation of a chapter 11 plan, a merger, or a sale of
substantially all of the company's assets) is completed within
24 months, UAL Corporation/United Airlines Inc., asks the Court
for permission to hire Rothschild, Inc., as its Investment
Banker.

Rothschild will credit all Monthly Fees paid after seven months
of bankruptcy against the Completion Fee.  After eighteen
months, either the Debtors or Rothschild may initiate talks
about additional credit for monthly fees paid.

Executive Vice President and Chief Financial Officer Frederic F.
Brace tells the Court that Rothschild has a wealth of experience
in providing investment banking services in reorganization
proceedings and has an excellent reputation for the services it
has rendered in Chapter 11 cases on behalf of debtors and
creditors.  Rothschild is recognized for its expertise because
it has served as investment banker in several cases including
Trans World Airlines, FINOVA Group and Federal-Mogul
Corporation, to name a few.

Rothschild's rendered investment banking services to the Debtors
in connection with their restructuring efforts, pursuant to an
engagement letter dated August 16, 2002.  Since that time,
Rothschild has become familiar with the Debtors' operations.

Specifically, Rothschild will:

      a) identify and/or initiate potential Transactions;

      b) review and analyze the Debtors' assets and the
         operating and financial strategies of the Debtors;


      c) review and analyze the Debtors business plans and
         financial projections by testing assumptions and
         comparing them to historical data and industry trends;

      d) evaluate the Debtors' debt capacity in light of
         projected cash flows and assist in determining an
         appropriate capital structure;

      e) review the terms of any proposed Transaction and
         evaluate alternative proposals;

      f) determine a range of values for the Debtors and any
         securities offered by the Debtors in a Transaction
         or otherwise;

      g) advise Debtors on the risks and benefits of a
         Transaction and other strategic alternatives to
         maximize the business enterprise value;

      h) review and analyze proposals the Debtors receive
         from third parties, including proposals for debtor-
         in-possession financing;

      i) assist in negotiations with parties in interest
         including creditors and/or shareholders;

      j) advise and attend meetings of the Debtors Board of
         Directors, creditor groups, official constituencies
         and other interested parties;

      k) participate in hearings before the Bankruptcy Court
         and provide testimony with miscellaneous matters or
         in connection with a proposed Plan; and

      l) render other investment banking services as agreed
         upon by Debtors and Rothschild.

Rothschild may provide additional services at the Debtors'
request.  Rothschild has agreed to assist the Debtors in
preparing and presenting testimony on financial matters, the
feasibility of a plan of reorganization, the value of
reorganization securities and other matters.

The Debtors agree to indemnify all persons affiliated with
Rothschild from and against any losses, claims or proceedings
arising out of its investment banking services.

Todd R. Snyder, a Rothschild Managing Director based in New
York, Additionally, Mr. Snyder assures the Court that Rothschild
is a "disinterested person" as that term is used in 11 U.S.C.
Sec. 101(14).  Out of an abundance of caution, Mr. Snyder
discloses six relationships:

      (a) Rothschild provided services to Trans World
          Airlines in connection with its Chapter 11 case,
          including with respect to the sale by TWA of
          substantially all of its assets to American
          Airlines. That sale closed on April 9, 2001, and
          the plan of reorganization in that case was
          confirmed on June 15, 2002. Rothschild's
          engagement terminated upon the effective date of
          that plan. Rothschild does not currently provide
          financial advisory or investment banking services
          to TWA.

      (b) Rothschild is currently providing services to BP
          Amoco with respect to the sale of assets in the
          Republic of Singapore. Additionally, Rothschild
          provided services to BP Amoco with respect to the
          sale of certain refining facilities. However,
          Rothschild's involvement in that matter has ended.
          None of the services Rothschild currently provides
          to BP Amoco relate to these Chapter 11 cases.

      (c) Prior to commencement of these cases, Rothschild
          rendered pre-petition services to the Debtors.

      (d) Rothschild is a large investment banking firm and
          has likely provided services unrelated to the
          Debtors for companies and individuals that have
          conducted business in the past and/or currently
          conduct business with the Debtors, and who may be
          creditors of the Debtors. "To the best of my
          knowledge, information and belief," Mr. Snyder
          says, "Rothschild's services to these parties were
          and are wholly unrelated to the Debtors, their
          estates and these Chapter 11 cases."

      (e) As part of its practice, Rothschild appears in
          numerous cases, proceedings and transactions
          involving many different professionals, some of
          which may represent claimants and parties in
          interest in the Debtors' Chapter 11 cases.
          Furthermore, Rothschild has in the past and will
          likely in the future be working with or against
          other professionals involved in these cases in
          matters unrelated to these cases.  "Based on my
          current knowledge of the professionals involved,
          and to the best of my knowledge and information,
          none of these business relationships represents an
          interest materially adverse to [United]," Mr.
          Snyder says.

      (f) Rothschild, through the equity owners of its
          parent company, Rothschild North America Inc., has
          indirect affiliate relationships with numerous
          investment banking institutions located worldwide
          "However, none of the Affiliated Entities is being
          retained in connection with this engagement and
          none of the professionals or employees of the
          Affiliated Entities will provide services to the
          Debtors in connection with this engagement," Mr.
          Snyder says.  "None of the professionals or
          employees of Rothschild has discussed or will
          discuss the Debtors' cases with any professional
          or employee of the Affiliated Entities. Thus,
          there has not been and will not be any flow of
          information between Rothschild and any Affiliated
          Entity with respect to any matter pertaining to
          the Debtors or their Chapter 11 cases. Rothschild
          can make no representation as to the
          disinterestedness of the professionals or
          employees of the Affiliated Entities in respect of
          the Debtors' Chapter 11 cases."

Mr. Snyder discloses that within the one-year period prior to
the petition date, Rothschild received $1,462,898 from the
Debtors. (United Airlines Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   

United Airlines' 9.0% bonds due 2003 (UAL03USR1) are trading at
about 9 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=UAL03USR1for  
real-time bond pricing.


UNITED AUSTRALIA: Castle Harlan Sponsors Plan of Reorganization
---------------------------------------------------------------
Australian private-equity investment firm Castle Harlan
Australian Mezzanine Partners Pty. Ltd., is sponsoring, on
behalf of the CHAMP I funds, a plan of reorganization for United
Australia Pacific, Inc., which was filed Sunday in U.S.
Bankruptcy Court in New York. If approved, the plan would make
CHAMP beneficially the largest shareholder in publicly traded
Austar United Communications Ltd. (ASX: AUN.AX).

Austar is the only provider of satellite pay TV in non-urban
Australia, with more than 400,000 subscribers, and has exclusive
pay television rights in all but the major Australian cities
(i.e. excluding Sydney, Melbourne, Adelaide, Brisbane and Perth,
in addition to all of the sparsely settled state of Western
Australia). Austar reported A$241.0 million in revenue for the
nine months ended September 30, 2002.

Under the plan, CHAMP is offering US$34.5 million (approximately
A$61 million) for UAP's majority interest in United Austar, Inc.
(a Colorado company that beneficially owns 80.7 percent of
Austar). The offer represents approximately seven percent of the
face value of UAP's outstanding bonds.

The plan has been recommended by the UAP secured creditors'
committee. It is expected that a creditors' vote on the plan
will occur in late February 2003. The plan's acceptance is
subject to approval by Australia's Foreign Investment Review
Board and by Austar's bank lenders.

"Assuming the UAP plan is approved, CHAMP and UnitedGlobalCom,
Inc. (Nasdaq: UCOMA), a publicly traded U.S. firm and the other
major beneficial shareholder in Austar, will then together
beneficially own 80.7 percent of Austar. The balance of Austar
will still be owned by the public," CHAMP Chairman Bill Ferris
said.

Following acceptance of the UAP plan of reorganization, CHAMP
will appoint representatives to the Austar board. John Porter
will continue as Austar's chief executive officer.

As a condition of its approval for the transaction, the
Australian Securities and Investments Commission has required
that, following approval of the UAP plan, probably in early
March 2003, CHAMP make a follow-on offer for the remainder of
Austar that is publicly owned. The follow-on offer price will be
equivalent to the price CHAMP will have paid to UAP bondholders
for the Austar shares they control. At today's exchange rate,
that price would be A$0.17 per share.

After completion of the follow-on offer to shareholders, CHAMP
and UnitedGlobalCom will fully underwrite an Austar equity
rights issue of A$63.5 million, also priced at the follow-on
price referred to above. Austar will use the proceeds for
working capital.

CHAMP manages and advises more than A$830 million in private-
equity capital in several funds available for investment in
LBO's, growth and development opportunities and venture capital
in Australia, New Zealand and the broader Australasian region.
The CHAMP I Funds have approximately A$550 million for
investment in larger buyouts.

CHAMP is one of Australia's oldest and most successful private-
equity firms. It is 50 percent owned by Castle Harlan, Inc., the
New York merchant bank, and 50 percent by the founders of
CHAMP's predecessor firm.

Since the final closing of the CHAMP I Funds in mid-2000, its
Australian acquisitions have included Australian Pacific Paper
Products, a leading Australian maker of diapers and adult
incontinence products; Penrice Soda Products, the only
Australian manufacturer of soda ash and sodium bicarbonate;
Sheridan Australia, the leading Australian manufacturer,
designer and marketer of bed and bath linens; and Bradken,
Australia's leading manufacturer of ground-engaging tools used
by the mining and construction sectors and also Australia's
largest producer of bogey systems for railway freight cars.

Castle Harlan was founded in 1987 by John K. Castle, former
president and chief executive officer of Donaldson, Lufkin &
Jenrette, the investment banking firm, and Leonard M. Harlan,
founder and former chairman of The Harlan Company.

Since its inception, Castle Harlan has completed acquisitions
exceeding US$5 billion. It is currently raising its fourth
investment fund, targeted at US$1.25 billion.


US AIRWAYS: Flight Attendants Agree to Cost-Cutting Plan
--------------------------------------------------------
The Association of Flight Attendants, representing more than
7,500 US Airways flight attendants, reached a tentative
agreement on cost-cutting measures to support the company's
restructuring and planned emergence from bankruptcy.

The agreement requires ratification by AFA's membership, with a
vote expected by Jan. 10, 2003.

"Our flight attendant leadership again has demonstrated that it
is resolute in its commitment to US Airways and we commend them
for their foresight in reaching this agreement," said Jerry A.
Glass, US Airways senior vice president of employee relations.

The Air Line Pilots Association's Master Executive Council last
week ratified its cost-cutting agreement and on Wednesday, the
Communications Workers of America -- reservations sales
representatives and airport ticket counter and gate agents, and
the Transport Workers Union -- dispatchers and simulator
engineers, reached tentative agreements on the restructuring.
Yesterday, the TWU's flight crew training instructors also
reached tentative agreements with US Airways on cost savings and
today, tentative agreements were reached with the International
Association of Machinists -- mechanics and related and fleet
service workers.


US AIRWAYS: Machinists Agree to Cost-Cutting Plan
-------------------------------------------------
US Airways and the International Association of Machinists,
Districts 141 and 141-M, representing approximately 6,200
mechanics and related employees and 4,900 fleet service workers,
reached tentative agreements on new cost-cutting measures to
support the company's restructuring. Both tentative agreements
require ratification by the IAM's membership.

"The IAM leadership met this challenge head on and worked
vigorously with us to hammer out agreements to support our
restructuring plan. We are grateful for their enormous
contributions," said Jerry A. Glass, US Airways senior vice
president of employee relations.

US Airways' Air Line Pilots Association Master Executive Council
last week ratified their agreement. The company currently has
agreements in place with the Communications Workers of America
-- reservations sale representatives and airport ticket counter
and gate agents; Transport Workers Union -- dispatchers,
simulator engineers, flight crew training instructors; and
Association of Flight Attendants.


U.S.I. HOLDINGS: Names Thomas O'Neil as VP & Chief Ops. Officer
---------------------------------------------------------------
David L. Eslick, Chairman, President, and CEO of
U.S.I. Holdings Corporation (Nasdaq: USIH) announced that the
Board of Directors has named Thomas E. O'Neil Senior Vice
President and Chief Operating Officer and Jeffrey L. Jones
Senior Vice President and Chief Marketing Officer.

As Chief Operating Officer, Mr. O'Neil will be responsible for
all of USI's operating companies and USI's Regional CEOs and
Regional Presidents will now report to him.  Most recently, Mr.
O'Neil served as Regional CEO, USI Northeast Region, where he
developed USI's regional operation integration strategy.  He has
over 22 years of industry experience, and he joined USI in 1996.

As USI's Chief Marketing Officer, Mr. Jones will be responsible
for the company's sales and marketing efforts including sales,
sales management, strategic relationships, cross-selling
strategies, and recruiting sales professionals.  Most recently,
Mr. Jones served as Regional CEO, USI West Coast Region.  He has
over 25 years of industry experience, and he joined USI in 1994.

Commenting on the promotions, Mr. Eslick said, "Tom and Jeff
have made significant contributions to USI's growth and
development.  Tom has been a leader in driving USI's regional
integration strategy and has developed the Northeast into not
only USI's largest region but also its most profitable.  He
will now be able to dedicate his time to implementing those same
strategies throughout USI's other regions.  Jeff has been a
leader in the development of USI's 'best practices' for sales
management, cross selling, and strategic marketing partnerships,
which has enabled the West Coast Region to deliver USI's highest
level of organic revenue growth."

With these promotions USI has also promoted James M. Butler to
President of the Northeast Region and Kevin P. Mencarelli to
President of the West Coast Region.  Most recently, Mr. Butler
has been CEO, USI New York.  In his new role as President of the
Northeast Region, he will be responsible for USI's retail
operations throughout New York, New England, Pennsylvania,
Connecticut and New Jersey.  Mr. Butler has over 15 years of
industry experience in banking and insurance, and he joined USI
in 1997.

Mr. Mencarelli has been President, USI Northern California.  In
his new role as President of the West Coast Region, he will be
responsible for USI's retail operations in California,
Washington, and Oregon.  He has over 14 years of industry
experience, and he joined USI in 1998.

Commenting on Mr. Butler and Mr. Mencarelli's promotions, Mr.
Eslick said, "For the past three years, Jim and Kevin have been
participants on USI's Leader Team, which is a program for
identifying and mentoring future leaders. They have shown strong
performance capabilities and have earned the opportunity to
accept additional management responsibilities.  As USI moves
forward, we expect to continue to develop additional
opportunities for other members of our Management and Leader
Team."

Founded in 1994, USI is a leading distributor of insurance and
financial products and services to small and mid-sized
businesses throughout the United States.  USI is headquartered
in San Francisco and operates out of 58 offices in 20 states.

As previously reported, Standard & Poor's Ratings Services
removed from CreditWatch and affirmed its single-'B'-plus
ratings on USI Holdings Corp., after the company successfully
completed its IPO, selling 9 million shares for total gross
proceeds of $90 million.

Standard & Poor's also said that the outlook on USI is positive.

At September 30, 2002, the Company's balance sheet shows a
working capital deficit of about $12 million.


VIASYSTEMS: Gets Final Nod to Obtain $37.5 Million DIP Financing
----------------------------------------------------------------
The Honorable Allan L. Gropper of the U.S. Bankruptcy Court for
the Southern District of New York gave his final nod of approval
to Viasystems Group, Inc., and its debtor-affiliates' motion to
enter into a Postpetition Financing arrangement and continue
using their Lenders' Cash Collateral to fund day-to-day
expenses.

The Court gave the Debtors authority to obtain up to $37,500,000
of Postpetition Financing from JPMorgan Chase Bank and Deutsche
Bank Trust Company Americas, including a $10,000,000 letter of
credit subfacility.

The Court finds that:

(a) the Debtors have an immediate need to obtain financing and
     use the Cash Collateral to permit, among other things, the
     orderly continuation of the operation of their business, to
     maintain business relationships with vendors and suppliers,
     to make certain strategic capital expenditures and to
     satisfy other working capital needs;

(b) the Debtors are unable to obtain adequate unsecured credit
     allowable under Section 503(b)(1) of the Code as an
     administrative expense;

(c) a facility in the amount provided by the DIP Financing is
     unavailable to the Debtors without the Debtors granting to
     the DIP Agent and the DIP Lenders super priority claim
     status;

(d) the ability of the Debtors to obtain sufficient working
     capital and liquidity through the incurrence of new
     indebtedness for borrowed money and other financial
     accommodations and the use of the Cash Collateral is vital
     to the Debtors; and

(e) the preservation and maintenance of the going concern
     values of the Debtors is integral to a successful
     reorganization of the Debtors pursuant to the provisions of
     Chapter 11 of the Code.

The Debtors relate that they owe the Prepetition Lenders, J.P.
Morgan Chase Bank Canada and J.P. Morgan Europe Limited in the
aggregate principal amount of $525,219,821.51 (plus $1,462,083
interest accrued and unpaid.  Additionally, the Debtors was
contingently liable to the Prepetition Lenders in the aggregate
amount of approximately $9,000,000 in respect of letters of
credit issued pursuant to the Pre-Petition Credit Agreement and
which remained undrawn and outstanding as of the Petition Date.

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


VISKASE COMPANIES: Illinois Court Confirms Prepackaged Plan
-----------------------------------------------------------
Viskase Companies, Inc., said that Judge John D. Schwartz of the
U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, confirmed Viskase's Prepackaged Plan of
Reorganization as Modified. Viskase expects to consummate the
Prepackaged Plan of Reorganization during January 2003 subject
to finalization of a post-confirmation credit facility.

F. Edward Gustafson, Chairman of the Board, President and Chief
Executive Officer of Viskase stated, "Viskase is pleased that
its Prepackaged Plan of Reorganization was confirmed by the
Bankruptcy Court so quickly. We look forward to building upon
our excellent relationships with our customers and suppliers and
to continuing our long-standing commitment to the meat and
poultry industry."

Viskase Companies, Inc., has its major interests in food
packaging. Principal products manufactured are cellulosic and
nylon casings used in the preparation and packaging of processed
meat products.

Harold L. Kaplan, Esq., and Jeffrey M. Schwartz, Esq., at
Gardner, Carton, & Douglas in Chicago, and Allan S. Brilliant,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, represent Viskase.  
The Plan compromises $163 million of bond debt by swapping that
old debt for a basket of New Senior Notes and New Common Stock.  
Old shareholders receive warrants to purchase the new shares at
a nominal $0.20 per share exercise price.


WARNACO GROUP: Obtains Approval of Speedo Settlement Agreement
--------------------------------------------------------------
The Warnaco Group, Inc., and its debtor-affiliates obtained the
Court's approval of the Settlement Agreement by and among
Authentic Fitness Corporation, Authentic Fitness Products, Inc.,
Warnaco, Inc., The Warnaco Group, Inc., and Speedo International
Limited; and to assume the Amended License Agreements.

AFC uses the Speedo trademarks through certain license
agreements with Speedo.  The current license agreements were
entered into on May 10, 1990 and amended at various times
subsequently.  More than half of AFC's revenue comes from
Speedo-branded products.

The principal terms of the Settlement Agreement are:

   (a) Speedo will withdraw all pending claims, objections and
       actions, and dismiss with prejudice all litigation,
       against AFC, Warnaco Group and Warnaco, Inc., including
       the District Court Action.  The Parties will be bound by
       mutual general releases;

   (b) AFC will pay Speedo $2,057,866 to resolve all royalty and
       other claims relating to the Speedo Licenses to and
       through June 30, 2002;

   (c) AFC will reimburse Speedo $500,000 in legal fees;

   (d) AFC will assign to Speedo its SPEEDO.com and other Speedo
       domain names.  AFC will, after a reasonable transition
       period, rename its web sites to another Speedo
       derivative.  Speedo will provide "a hot link" from its
       new SPEEDO.com site to AFC's renamed web site;

   (e) Effective July 2003, the percentage royalty rate on New
       Sales under the Speedo Licenses will increase by 0.5% on
       New Sales exceeding $125,000,000;

   (f) AFC will be granted the right to sell fashion swimwear
       under its Ralph Lauren and Anne Cole brands and to sell
       non-Speedo apparel, accessories and other products in its
       Speedo Authentic Fitness Retail Stores;

   (g) The License Amendments will amend the Speedo Licenses to,
       inter alia, clarify certain rights and obligations and
       implement certain procedures to avoid future
       controversies including, among other things, changing the
       governing law of the Speedo License for the law of New
       South Wales, Australia and other specified jurisdictions
       to New York law; and

   (h) AFC will assume the Speedo Licenses, as amended, and
       supplemented by the License Amendments, and Speedo will
       not object to the assumption. (Warnaco Bankruptcy News,
       Issue No. 39; Bankruptcy Creditors' Service, Inc.,
       609/392-0900)  


WARREN ELECTRIC: Signs-Up Littler Mendelson as Special Counsel
--------------------------------------------------------------
Warren Electric Group, Ltd., asks for permission from the U.S.
Bankruptcy Court for the Southern District of Texas to employ
Littler Mendelson, P.C., as Special Litigation Counsel.

The Debtor tells the Court that it requires the advice and
services of Special Litigation Counsel to defend it in
connection with three lawsuits:

      a. Dina Gallegos v. Warren Electric Group, Ltd., in the
         189th Judicial District Court, Harris County, Texas;

      b. Mike Regitz v. Warren Electric Group, Ltd., d/b/a
         Warren Electric Group, in the County Civil Court at Law
         No. 4 of Harris County, Texas; and

      c. Douglas B. Clements v. Warren Electric Group, Ltd., in
         the 159/217th Judicial District Court of Angelina
         County, Texas.

The Debtor selected Littler Mendelson, P.C., because the Firm
possesses substantial experience in matters of this nature.
Linda Ottinger Headley, Esq., is the attorney in charge.  Ms.
Headley's billing rate is $245 per hour. However, the Debtors
and the Firm agree that Ms. Headley's rate for the defense of a
fourth lawsuit brought by Michael J. Valentine against Warren
will be $200 an hour and will be billed to Warren's Insurance
carrier, Lexington Insurance Company.  The rates for lawyers and
paralegals range from $70 to $325 per hour.

Warren Electric Group, Ltd., filed for chapter 11 protection on
September 27, 2002. Harlin C. Womble, Jr., Esq., at Jordan Hyden
Womble and Culbreth, represents the Debtor in its restructuring
efforts. When the Company filed for protection from its
creditors, it listed estimated debts and assets of over $50
million each.


WICKES INC: Commences Exchange Offer for 11-5/8% Senior Notes
-------------------------------------------------------------
Wickes Inc., (NASDAQSC: WIKS) a leading distributor of building
materials and manufacturer of value-added building components,
has commenced an offer to exchange an equal principal amount of
its new Senior Secured Notes due July 29, 2005, for any and all
of its $63,956,000 aggregate principal amount of outstanding
11-5/8 percent Senior Subordinated Notes due December 15, 2003.
The Exchange Offer, which is being made to holders of the
existing Subordinated Notes pursuant to an Offering Memorandum
and Solicitation of Consents, is not subject to any minimum
amount of Subordinated Notes being exchanged.

In addition, the Exchange Offer contemplates a $4.98 million
mandatory redemption in cash scheduled for the new Senior
Secured Notes' first interest payment date, March 17, 2003, as a
result of the previously announced Lanoga sale proceeds. The
mandatory redemption proceeds, which will be applied to the new
Senior Secured Notes based upon the 85 percent applicable
optional redemption price, will be shared pro-rata based on the
aggregate principal amount of Senior Subordinated Notes
exchanged. The closing of the Exchange Offer, however, is
subject to the Company obtaining the consent of its senior
lenders or the refinancing of its senior debt with a new senior
lender who consents to the Exchange Offer. There can be no
assurance that such consent or refinancing will be obtained,
although discussions have commenced with a potential new senior
lender to refinance the senior debt.

Wickes will accept for exchange any and all Subordinated Notes
validly tendered and not withdrawn prior to the expiration date.
The expiration date of the Exchange Offer is 5:00 p.m., Eastern
Standard Time, on Wednesday, January 22, 2003, unless extended.

The new Senior Secured Notes will be the Company's general
senior obligations and will rank equally with the Company's
revolving credit agreement and will rank senior to the
Subordinated Notes. The new Senior Secured Notes will be secured
by liens on the Company's owned real estate and equipment,
subject to the priority of the liens to the Company's senior
lenders.

The new Senior Secured Notes will bear interest at 11-5/8
percent per annum from the date of issuance through December 15,
2003 and at 18 percent per annum thereafter. Interest at 11-5/8
percent will be paid currently in cash, and the balance will be
paid currently in cash to the extent the Company has excess cash
flow, as defined in the indenture governing the new Senior
Secured Notes, and will accrue to the extent not paid in cash.
The Company is also soliciting, pursuant to the Offering
Memorandum, consents from holders of the Subordinated Notes to
amendments to the indenture governing the Subordinated Notes to
eliminate most of the covenants contained therein. The three
largest holders, representing approximately 40 percent of the
outstanding Subordinated Notes, have agreed to exchange their
notes pursuant to the Exchange Offer and to consent to such
amendments. In order for such amendments to become effective,
consents must be obtained from the holders of a majority of the
outstanding Subordinated Notes.

Wickes Inc., is a leading distributor of building materials and
manufacturer of value-added building components in the United
States, serving primarily building and remodeling professionals.
The Company distributes materials nationally and
internationally, operating building centers in the Midwest,
Northeast and South. The Company's building component
manufacturing facilities produce value-added products such as
roof trusses, floor systems, framed wall panels, pre-hung door
units and window assemblies. Wickes Inc.'s Web site,
http://www.wickes.comoffers a full range of valuable services  
about the building materials and construction industry.

                          *    *    *

As reported in Troubled Company Reporter's November 6, 2002
edition, Standard & Poor's lowered its corporate credit
rating on Wickes Inc., to triple-'C' from triple-'C'-plus. The
downgrade was based on the company's weak liquidity and Standard
& Poor's concern that Wickes will be challenged to improve
operations and liquidity significantly after it completes the
sale of its Wisconsin and Northern Michigan operations.


WORLDCOM INC: Gets Green Light to Reject 30 Circuits with 4 LECs
----------------------------------------------------------------
Bankruptcy Court Judge Arthur Gonzalez authorizes Worldcom Inc.,
and its debtor-affiliates to reject the Service Orders effective
as of November 1, 2002.

However, with respect to the Verizon Service Orders, the
effective date of rejection will be deemed the effective date of
the disconnection orders submitted for the Verizon Service
Orders.

In addition, with respect to the Service Orders for the purchase
of circuits by the Debtors from Qwest Corporation, the effective
date of rejection for the Service Order related to the OC-192
circuit will be November 22, 2002 and the effective date of
rejection for the Service Order related to the OC-12 circuit
will be December 15, 2002; provided, however, that the Debtors
will be required to submit a disconnection order for the OC-12
circuit on or before December 5, 2002.

                         *    *    *

To recall, the Debtors purchased certain telecommunications
services pursuant to tariffs filed by incumbent and competitive
local exchange carriers in accordance with the
Telecommunications Act of 1996.  Tariffs are schedules of rates,
terms and conditions, by which the LECs agree to provide
services to their customers.  Tariff services are purchased by
submitting a contract known as an access service order to the
LEC.

Since the Petition Date, the Debtors have reviewed the operating
capacity of its network, which is an ongoing, integral component
of the Debtors' long-range business plan.  The Debtors
determined that it does not require the capacity relating to 30
circuits purchased through service orders purchased under
tariffs.  The Circuits and associated Service Orders are with
these LECs or their affiliates:

                              No. of      Annual       Total
                             Circuits    Savings      Savings
                             --------   ----------   ----------
       Southwestern Bell          7       $519,430     $907,420
       Verizon                   20        709,080    1,862,060
       Qwest                      2      1,008,000    3,780,000
       Bell South                 1        582,000    2,183,250

In determining to reject the Service Orders, the Debtors
considered network overcapacity, costs, overlap and other
inefficiencies, as well as WorldCom's ability to move traffic to
alternative circuits in a more cost-effective manner.

In the course of reviewing their network capacity needs and
costs, the Debtors analyzed the Circuits and determined that
that they are no longer of any value or utility to them.  By
rejecting the Service Orders, the Debtors save the estates
$2,800,000 in administrative expenses per annum, or $8,700,000
for the remainder of the terms of the Service Orders for
capacity that the Debtors do not need or use. (Worldcom
Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   

Worldcom Inc.'s 8.0% bonds due 2006 (WCOM06USN1), DebtTraders
reports, are trading at about 23 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCOM06USN1
for real-time bond pricing.


WYNDHAM INT'L: Completes Sale Transaction with Sunstone Hotels
--------------------------------------------------------------
Wyndham International Inc., (AMEX:WBR) has closed the sale of
two properties for $102.7 million to Sunstone Hotels and
Westbrook Hotel Partners IV, LLC.

The closing completes the agreement reached by the two parties
in September that outlined the sale of 12 non-proprietary assets
and one Wyndham-branded asset, which will retain the Wyndham
flag pursuant to a ten-year franchise agreement, for
approximately $447 million. On Dec. 5, Wyndham announced the
closing of 11 of the 13 properties for $344.7 million. The
company said it would use the net proceeds from the sales to pay
down debt.

"We are pleased that we have completed this transaction as it
continues our strategic plan to become a proprietary branded
hotel operating company. We intend to continue our strategy to
sell the remaining 34 non-strategic assets as we enter the New
Year," stated Fred J. Kleisner, chairman and chief executive
officer of Wyndham International Inc.

The two properties sold in this transaction include:

        Embassy Suites            Chicago
        Wyndham Greenspoint       Houston

All 13 properties will be managed or asset managed by Sunstone
Hotel Investors, LLC. Sunstone currently operates 61 upscale and
mid-scale hotels with 14,838 rooms throughout the United States
with approximately 90 percent being full-service hotels.
Westbrook Hotel Partners IV, LLC is a newly formed entity of
Westbrook Partners Real Estate Fund IV.

Bear, Stearns & Co. Inc., and J.P. Morgan Securities Inc.,
served as financial advisors to Wyndham in connection with the
transaction.

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

As previously reported, Standard & Poor's assigned a B- rating
to Wyndham's $750 million debentures and B corporate credit
rating.


* DebtTraders' Real-Time Bond Pricing
-------------------------------------

Issuer               Coupon   Maturity  Bid - Ask  Weekly change
------               ------   --------  ---------  -------------
Federal-Mogul         7.5%    due 2004    14 - 16        0
Finova Group          7.5%    due 2009  33.5 - 35.5      0
Freeport-McMoran      7.5%    due 2006    92 - 94        +2
Global Crossing Hldgs9 .5%    due 2009     3 - 4         +1
Globalstar            11.375% due 2004   8.5 - 9.5       +0.5
Lucent Technologies   6.45%   due 2029    43 - 45        +1
Polaroid Corporation  6.75%   due 2002     3 - 5         0
Terra Industries      10.5%   due 2005    90 - 92        0
Westpoint Stevens     7.875%  due 2005    29 - 31        +4
Xerox Corporation     8.0%    due 2027    55 - 57        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 ***