TCR_Public/021227.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

             Friday, December 27, 2002, Vol. 6, No. 255

                           Headlines

21ST CENTURY HOLDING: AM Best Reaffirms Units' Low-B Ratings
360NETWORKS: Retail Plazas Pitches Best Bid for Dallas POP Site
ADVANCED TISSUE: Turns to Eureka Capital for Financial Advice
AGRIFOS FERTILIZER: Wants DIP Facility Extended through Jan. 6
AGWAY INC: Selling Telmark Unit Assets to Wells Fargo Financial

AMERICAN PAD & PAPER: Court Approves $40 Million DIP Financing
AMERICAN UNDERWRITERS: S&P Affirms BBpi Fin'l Strength Rating
AMES DEPARTMENT: 8 Landlords Balk at Wind-Down Auction Protocol
ANC RENTAL: Keeps Plan Filing Exclusivity Until March 8, 2003
APYRON TECHNOLOGIES: Involuntary Chapter 7 Case Summary

ASIA GLOBAL: Court Approves $12-Million Asia Netcom Breakup Free
ASIACONTENT.COM: Pulls Plug on Joint Venture with MTV Networks
ATINERA: Files for Chapter 11 Protection in San Francisco, CA
ATINERA LLC: Voluntary Chapter 11 Case Summary
AUGMENT SYSTEMS: Must Raise New Capital to Continue Operations

BETHLEHEM STEEL: Gets Go-Signal to Amend $450-Mil. DIP Financing
BETHLEHEM STEEL: Calls ISG Contract Model for Labor Agreements
BORDEN CHEMICALS: Court to Consider Liquidation Plan on Jan. 24
BRITISH ENERGY: Wants to Sell 82.4% Interest in Bruce Power LP
CASUALTY UNDERWRITERS: S&P Hatchets Counterparty Rating to BBpi

CEATECH USA: Viability Uncertain Due to Insufficient Capital
CENTENNIAL HEALTHCARE: Files for Chapter 11 Reorg. in Georgia
CENTENNIAL HEALTHCARE: Case Summary & 30 Unsecured Creditors
CHARTER COMMS: Names Margaret Bellville as New EVP and COO
CHARTER COMMS: S&P Cuts Rating Due to Lowered Revenue Guidance

CHASE MORTGAGE: Fitch Rates Class B-3 & B-4 Notes at Low-B Level
COMDISCO: Completes Sale of French Units to Econocom for $70MM
CONSECO FINANCE: S&P Drops Various Related Transactions to D
CORVUS INVESTMENTS: Fitch Junks Ratings on Four Classes of Notes
COVANTA ENERGY: Aramark Taps Deloitte & Touche as Tax Auditors

CTC COMMUNICATIONS: Committee Hires Brown Rudnick as Counsel
CYNET INC: Case Summary & 20 Largest Unsecured Creditors
DATA SYSTEMS: Falls Below Nasdaq Continued Listing Requirements
DIAL CORP: Selling Argentina Business to Southern Cross Entity
ECHOSTAR COMMS: Completes Repurchase of Ser. D Conv. Preferreds

ENCOMPASS SERVICES: Joe Ivey Resigns as President and CEO
ENCOMPASS SERVICES: Seeks Injunction Against Utility Companies
ENRON CORP: AEGIS Wants ENA's Prompt Decision on Contract
EOTT ENERGY: Environmental Claimants Want Committee Appointment
EUROTECH LTD: AMEX Delists Shares Effective December 24, 2002

FAO INC: Reaches Standstill Agreement with Bank Lenders
FEDERAL-MOGUL: Future Representative Hires Bederson & Company
GENESEE CORP: Files Prelim. Proxy Statement for Reverse Split
GENUITY INC: Asset Sale to Level 3 Earns Federal Antitrust Nod
GENUITY INC: Brings-In Morrison & Foerster as Special Counsel

GLOBAL CROSSING: Will Provide Conferencing Services to DSCI
GLOBAL CROSSING: Wins Nod to Expand Ernst & Young's Engagement
HAYES LEMMERZ: Asks Court to Further Extend Exclusive Periods
HEAFNER TIRE: S&P Withdraws SD Corporate Credit Rating
HOLIDAY RV SUPERSTORES: Fails to Meet Nasdaq Listing Standards

INTEGRATED TELECOM: Committee Hires Baker & McKenzie as Counsel
INTERTAPE POLYMER: Amends Financial Covenants Under Credit Pacts
KEMPER INSURANCE: A.M. Best Slashes Fin'l Strength Rating to B+
KMART CORP: Third Quarter Losses Top $4 Million Per Week
KMART CORP: Asks Court to Fix Special Jan. 22 Claims Bar Date

MICROCELL: Secured Lenders Okay Terms of Recapitalization Plan
MILLERS INSURANCE: S&P Junks Financial Strength Rating at CCCpi
MINNETHAN LAND: Look for Schedules and Statements by January 25
MSX INT'L: Bank Group Waives Certain Loan Financial Covenants
NAT'L CENTURY: Baltimore Emergency Wants to Use Cash Collateral

NATIONAL LAMPOON: Liquidity Issues Raise Going Concern Doubt
NATIONAL STEEL: Reports $10-Million Net Loss for November 2002
NATIONAL STEEL: Bags Nod to Sell Indiana Port Assets for $4.5MM
NATIONSRENT INC: Files Consensual Plan of Reorganization in Del.
NEON COMMS: Completes Workout and Exits Chapter 11 Bankruptcy

NETIA HOLDINGS: Completes Subscription for Series H Shares
NETIA: Extends Polish Prospectus Validity for Ser. J & K Shares
NTL INC: Publishes Supplementary Prospectus Under UK Regulations
PACIFIC GAS: Gets Go Signal to Use $110M for Diablo Canyon Proj.
PEACE ARCH: August 31 Balance Sheet Upside-Down by C$5 Million

PERKINELMER: Fitch Assigns BB- Senior Subordinated Debt Rating
PHOENIX INDEMNITY: S&P Junks Ratings at CCCpi from Bpi
PLYMOUTH RUBBER: Completes Debt Workout & Settles Loan Default
QWEST: FCC Clears Re-Entry into 9-State Long-Distance Business
QWEST COMMS: Private Debt Exchange Offer Cuts Debt by $1.9 Bill.

RFS ECUSTA: Wants Approval to Hire Deloitte for Financial Advice
SCIENTIFIC GAMES: S&P Rates $340-Mil. Sr. Credit Facility at BB-
SEVEN SEAS: Noteholders File Involuntary Chapter 7 Petition
SEVEN SEAS PETROLEUM: Involuntary Chapter 7 Case Summary
SHELBOURNE PROPERTIES: Closes Sutton Square Sale for $17 Million

SKAGIT PACIFIC: Case Summary & 20 Largest Unsecured Creditors
SOUTHERN STATES POWER: Auditors Express Going Concern Doubt
STANDARD MUTUAL: S&P Hatchets Counterparty Credit Rating to BBpi
TALK AMERICA: Restructures 8% Convertible Notes due 2011
UNITED AIRLINES: S&P Hatchets Down Selected P-T Certs. Ratings

UNITED AIRLINES: Wants Nod to Hire McKinsey & Co. as Consultant
UPLAND MUTUAL: S&P Downgrades Ratings to Lower-B Level
US PLASTIC LUMBER: Closes New $13 Million Senior Credit Facility
VIASYSTEMS GROUP: Gets Court Nod to Appoint BSI as Claims Agent
WASHINGTON MUTUAL: Fitch Rates Cl. B-4, B-5 Notes at Low-B Level

WORKFLOW MANAGEMENT: Finalizing Long-Term Agreement with Lenders
WORLD KITCHEN: Illinois Court Confirms Plan of Reorganization
WORLDCOM INC: Asks Court to Approve EDS Settlement Agreement
W.R. GRACE: U.S. Request for Partial Summary Judgment Approved

* BOOK REVIEW: Creating Value through Corporate Restructuring:
                Case Studies in Bankruptcies, Buyouts, and
                Breakups

                           *********

21ST CENTURY HOLDING: AM Best Reaffirms Units' Low-B Ratings
------------------------------------------------------------
21st Century Holding Company (Nasdaq:TCHC), a vertically
integrated financial services holding company, said that AM Best
is reaffirming ratings for Federated National Insurance Company
("B" rated) and American Vehicle Insurance Company ("B+" rated)
and changing their outlook from negative to stable.

21st Century Holding Company manages its insurance underwriting,
distribution and claims process through its subsidiaries.

      --  The Company's wholly owned subsidiaries, Federated
National Insurance Company and American Vehicle Insurance
Company, underwrite standard and non-standard personal
automobile insurance in the state of Florida. Federated National
also has authority to underwrite flood insurance, mobile home
insurance, and homeowners property and casualty insurance in the
state of Florida.

      --  The Company's wholly owned managing general agent,
Assurance Managing General Agents, Inc., has underwriting
authority for Federated National, American Vehicle, and third-
party insurance companies.

      --  The Company's wholly owned claims adjusting company,
Superior Adjusting, Inc., processes claims made by the insureds
of Federated National, American Vehicle, and third party
insurance companies which contract with Superior.

      --  Federated Premium Finance, Inc., another wholly owned
subsidiary, offers premium financing to insureds of Federated
National and American Vehicle, as well as to third party
insureds.

      --  Express Tax Service, Inc., an 80% owned subsidiary,
licenses its tax preparation software products to retail tax
preparers nationwide.

      --  EXPRESSTAX(R) Franchise Corporation, a wholly owned
franchiser subsidiary of Express Tax Service, Inc., offers
franchise opportunities to individuals to own and operate their
own business under the name and support of EXPRESSTAX(R).

      --  The Company offers other ancillary services including
electronic income tax filing, tax preparation and tag & title
transfer services through Federated Agency Group, Inc., also a
wholly owned subsidiary.

      --  Fed USA, Inc., a wholly owned franchiser company,
offers single and master franchise opportunities to individuals
to own and operate their own business under the name and support
of Fed USA Insurance/Financial Services.


360NETWORKS: Retail Plazas Pitches Best Bid for Dallas POP Site
---------------------------------------------------------------
Retail Plazas, Inc., as trustee of to-be-formed Texas limited
partnership, was the successful Alternative Buyer of 360networks
inc.'s point-of-presence site assests in Dallas, Texas, at the
Auction. Retail Plazas has formed Dallas Exchange Ltd, a Texas
limited partnership, to acquire the Purchased Assets.

While the Debtors don't tell the Court the exact amount of the
winning bid, Judge Gropper authorizes the sale of the Purchased
Assets to Retail Plazas pursuant to the Purchase Agreement.  The
Court also authorizes the Debtors to pay the Expense
Reimbursement to the Highgate Entities when due in accordance
with the Bid Procedures Order. (360 Bankruptcy News, Issue No.
40; Bankruptcy Creditors' Service, Inc., 609/392-0900)


ADVANCED TISSUE: Turns to Eureka Capital for Financial Advice
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of
California gave its nod of approval to Advanced Tissue Sciences,
Inc., and its debtor-affiliates' application to employ Eureka
Capital Markets, LLC as Operations and Financial Advisor.

Eureka is expected to:

   a) assist the Debtors in assessing its current financial
      condition, financial strategy and business plan;

   b) assist the Debtors and its other professionals in
      evaluating potential dispositions of businesses or assets
      and the impact of such dispositions on the Debtors;

   c) assist the Debtors and its other professionals in
      developing a business plan, financial forecasts and capital
      structure for purpose of the chapter 11 proceedings;

   d) assist the Debtors and its other professionals in any
      operational restructuring of the Debtors required to meet
      its go-forward business plan;

   e) assist the Debtors and its other professionals and
      negotiating a chapter 11 plan of reorganization or plan of
      liquidation;

   f) advise the Debtor in connection with any transaction
      involving, directly or indirectly, any business combination
      whether by acquisition, merger, consolidation, negotiated
      purchase, tender or exchange offer, reorganization,
      recapitalization of otherwise, or any direct or indirect
      sale, transfer or other disposition, whether in one or a
      series of transactions, of all or any portion of the
      capital stock or assets of the Debtors or any subsidiary of
      the Debtors, whether pursuant to a chapter 11 plan of
      reorganization, order of the Bankruptcy Court, or
      otherwise;

   g) advise the Debtors regarding any proposed private sale or
      placement of the Debtors' equity of debt securities or
      obligations with one or more lenders or investors, or any
      other loan of financing arrangements undertaken during the
      course of the chapter 11 proceedings or in connection with
      the implementation of any chapter 11 plan of
      reorganization, including any "exit financing" or rights
      offering;

   h) assist the Debtors and its other professionals in
      communicating with any official committees in the chapter
      11 proceedings regarding matters within the scope of
      Eureka's retention;

   i) provide testimony, as necessary, in any proceedings before
      the Bankruptcy Court regarding matters within the scope of
      Eureka's retention; and

   j) render such other advisory services incidental to the
      chapter 11 proceedings as may be agreed upon by Eureka and
      the Debtors.

The current range of customary hourly rates for Eureka's
professionals is:

           Managing Directors     $525 per hour
           Executive Directors    $350 to $450 per hour
           Associates             $250 to $350 per hour

Advanced Tissue Sciences, Inc., is engaged in the development
and manufacture of human-based tissue products for tissue repair
and transplantation. The Company filed for chapter 11 protection
on October 10, 2002 at the U.S. Bankruptcy Court for the
Southern District of California (San Diego).  Craig H. Millet,
Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP,
represent the Debtor in its restructuring efforts.  When the
Company filed for protection from its creditors, it listed
$32,200,000 in total assets and $16,900,000 in total debts.


AGRIFOS FERTILIZER: Wants DIP Facility Extended through Jan. 6
--------------------------------------------------------------
Agrifos Fertilizer L.P., and its debtor-affiliates seek a
further extension of their Postpetition Financing with Air
Products L.P., through January 6, 2003.

The Debtors remind the U.S. Bankruptcy Court for the Southern
District of Texas that the original DIP Air Products DIP
Facility provided $3 million in working capital and $5 million
for equipment acquisition and repair and was secured by:

    (1) senior liens on:

         (i) all equipment acquired by the Debtors using the
             proceeds of any loan or advance pursuant to the
             Original Air Products DIP Facility; and

        (ii) all proceeds of the Debtors business interruption
             and casualty insurance payable due to the Sulfuric
             Acid Plant upset

    (2) an option on all of the Debtors interest in their NOx
        credits, and

    (3) a junior lien on all of all assets of the borrowers,
        subject only to the liens of Congress, Wachovia and the
        Duke Entities.

The Debtors disclose that as of December 9, 2002, borrowings
under the Air Products DIP Facility were $8 million.

The Debtors are producers of phosphate fertilizers that operate
a 600,000 thousand ton per year phosphate fertilizer processing
plant in Pasadena, Texas and a 1.2 million ton per year
phosphate rock mine located in Nichols, Florida. They filed for
chapter 11 protection on May 8, 2001. Christopher Adams, Esq.,
and H. Rey Stroube, III, Esq., at Akin, Gump, Strauss, Hauer &
Feld, LLP, represent the Debtors in their restructuring efforts.


AGWAY INC: Selling Telmark Unit Assets to Wells Fargo Financial
---------------------------------------------------------------
Wells Fargo Financial Leasing, Inc., Telmark LLC and Agway Inc.,
signed a definitive agreement in which Wells Fargo Financial
Leasing, Inc., would purchase substantially all of the assets of
Telmark LLC, Agway's agricultural lease financing subsidiary.
The purchase is expected to close by March 1, 2003.

The acquisition includes approximately $650 million in lease
receivables and is subject to obtaining appropriate approvals,
including the approval of the U. S. Bankruptcy Court for the
Northern District of New York. On October 1, 2002, Agway Inc.,
and certain of its subsidiaries filed voluntary petitions for
reorganization under Chapter 11 of the U.S. Bankruptcy Code.
Telmark was not included in Agway's Chapter 11 filing.

Telmark, based in Syracuse, NY, offers lease financing for
equipment, buildings and vehicles within the contiguous 48
states and serves approximately 20,000 farmers, related
agricultural businesses and numerous segments of the commercial
business marketplace. Telmark is a wholly owned subsidiary of
Syracuse-based Agway Inc., an agricultural cooperative owned by
69,000 Northeast farmer-members.

Wells Fargo Financial Leasing, Inc., is a subsidiary of Wells
Fargo Financial, Inc., an $18 billon company providing consumer
installment and home equity lending, automobile financing,
consumer and private label credit cards, leasing to businesses
and the medical community and receivables financing to consumers
and businesses in 47 U. S. states, the 10 provinces of Canada,
the Caribbean and the Pacific Islands. Both companies are
headquartered in Des Moines, IA and are subsidiaries of Wells
Fargo & Company.


AMERICAN PAD & PAPER: Court Approves $40 Million DIP Financing
--------------------------------------------------------------
American Pad & Paper LLC said that the bankruptcy court has
approved a number of its first day orders including approval of
$40 million of Debtor-in-Possession (DIP) financing and
continued payment of employee wages and benefits.

Ampad's existing bank group, led by Bank of America, is
providing the $40 million DIP financing. Additionally, Ampad
will be able to use its existing bank accounts, rather than
establish new accounts.

It is the Company's intention to present a reorganization plan
to the bankruptcy court that will allow it to finalize new
equity sponsorship, make an orderly ownership transition and
emerge from Chapter 11 as rapidly as possible. As part of its
reorganization plan, Ampad will seek to pay its pre-petition
vendor obligations as quickly and fully as possible.

Ampad is a leading manufacturer and distributor of writing pads,
filing supplies, retail envelopes and specialty papers and
serves many of the largest and fastest growing office products
retailers and distributors in North America. Additional
information is available on the Company's Web site at
http://www.ampad.com


AMERICAN UNDERWRITERS: S&P Affirms BBpi Fin'l Strength Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BBpi'
counterparty credit and financial strength ratings on American
Underwriters Life Insurance Co.

"The affirmation is based on the company's extremely strong
capitalization and profitability, offset by limited operating
scope," observed credit analyst Alan Koerber.

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

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


AMES DEPARTMENT: 8 Landlords Balk at Wind-Down Auction Protocol
---------------------------------------------------------------
Eight landlords dispute the proposed procedures for the
disposition of Ames Department Stores, Inc., and its debtor-
affiliates' unexpired real property leases, fee-owned
properties, and Designation Rights:

   1. Carousel Center Company L.P.
   2. Eastpoint Partners, L.P.
   3. Associates of Lebanon;
   4. New Paltz Properties, L.P.
   5. TP Associates Limited Partnership
   6. Mark Troy L.P.
   7. Acadia Realty Limited Partnership
   8. Eden Center, Inc.
   9. Supervalu Holdings-PA, LLC
  10. Harbor Holdings, Ltd.
  11. Hyde Park Mall
  12. Finard & Company, LLC
  13. The Druker Company
  14. Manley-Berenson Associates
  15. Samuels & Associates
  16. TA Associates
  17. Benderson Development Co., Inc.
  18. Northgate Shopping Center Limited Partnership
  19. Coliseum Vickery Realty Co. Trust
  20. Hanover Rich Associates
  21. Salt Pond Shopping Center, L.L.C.

The Objections basically raise these issues:

A. Adequate Assurance

     (1) The Asset Disposition Procedures should include a
         provision that the Debtors provide the landlords with
         evidence of a bidder's adequate assurance;

     (2) The landlords should have more than two business days
         notice of a hearing on the disposition of Assets; and

     (3) The Asset Disposition Procedures should allow for
         discovery with respect to a successful bidder's adequate
         assurance;

B. Cure Amounts

     (1) A mechanism should be established to provide for cure
         amounts that are not yet determined as of the date a
         sale hearing takes place with respect to an Unexpired
         Lease; and

     (2) Prepetition Cure Amounts should be provided in advance
         of the auction of a specific Unexpired Lease;

C. Credit Bids

     Where the cure amount is disputed, the landlord's credit bid
     should be calculated based on the amount according to the
     landlord's books and records, not the Debtors;

D. Rejection Procedures

     The Rejection Procedures establish a retroactive rejection
     date;

E. Abandonment and Removal of Fixtures

     (1) Abandonment of property with no net value is permitted
         only "to any party with a possessory interest in the
         property abandoned";

     (2) Any costs associated with a landlord's removal of
         abandoned property should be an administrative expense;
         and

     (3) The Debtors should only be able to remove fixtures that
         are property of the estate;

F. Designation Rights

     (1) The Asset Disposition Procedures do not include
         procedures for the ultimate assumption, assignment, and
         sale of an Unexpired Lease to a designee; and

     (2) The sale of a Chapter 11 debtor's assets may take place
         through the Designation Rights mechanism;

G. Miscellaneous

     Several Objectors assert that the Debtors should:

     (1) not be allowed to provide stalking horse agreements and
         other bidding protections at this time;

     (2) not be allowed to vary the Asset Disposition Procedures
         at their discretion;

     (3) not be given unilateral authority to waive the
         requirement of separate allocations of bids for each
         Asset; and

     (4) provide written notice of an adjournment of an auction.

                          Debtors Retort

Deryck A. Palmer, Esq., at Weil, Gotshal & Manges LLP, contends
that the Objections are premature as the Objectors will have
ample time to object to any proposed assumption, assignment, and
sale of their Unexpired Leases:

     -- when the property is scheduled for an auction and appears
        in an exhibit to an Auction Notice;

     -- when the Debtors determine the highest and best offer for
        their Unexpired Leases or Designation Rights with respect
        to the Unexpired Leases through the auction process; and

     -- if their Unexpired Lease is part of a Designation Rights
        package sold at an auction, when the Unexpired Lease is
        ultimately assumed, assigned, and sold to a designee of
        the Designation Rights purchaser.

With respect to the Objections relating to the Rejection
Procedures and abandonment, Mr. Palmer states that the rejection
and abandonment procedures already contemplate a mechanism
whereby lessors may object to the rejection and abandonment and
hearings would be scheduled to determine the objections.

Mr. Palmer informs the Court that these clarifications or
modifications to Asset Disposition Procedures will resolve
several of the issues being raised:

1. Adequate assurance information with respect to an Unexpired
    Lease will be provided to landlords as soon as the Debtors
    determine the successful bidder of that Unexpired Lease at an
    auction;

2. If a landlord demands discovery with respect to adequate
    assurance, the sale hearing will be scheduled later than two
    business days to accommodate all reasonable requests for
    discovery;

3. A schedule of Prepetition Cure Amounts will be available to
    landlords at the time the Debtors serve the Auction Notice
    scheduling an auction;

4. In cases where there is a dispute with respect to the cure
    amounts or cure amounts are undetermined at the time of the
    sale hearings, a provision for escrowing the disputed amounts
    will be established.  Any disputes related to the amounts to
    be escrowed will be determined at the sale hearings; and

5. With respect to the removal of fixtures, the Debtors will
    remove only those fixtures that are property of the estate
    and will do so in a manner that allows for the supervision by
    the landlord, if he or she so desires.

Mr. Palmer asserts that the contested Disposition Procedures are
critical to the success of the Debtors' sale of their assets:

A. Hearings as Early as Two Days After an Auction

    Mr. Palmer explains that the daily carrying costs for all the
    Debtors' remaining Assets is $115,000.  Therefore, a delay in
    the closing the sales of the Assets of up to ten days could
    potentially result in a $1,150,000 loss to the Debtors'
    estates.  In addition, Mr. Palmer notes that many potential
    acquirors would be reluctant to leave deposits with the
    Debtors for long periods of time.  This would have the effect
    of reducing the number of potential buyers, causing less
    demand for the Assets, which in turn would decrease the sale
    price of the Assets;

B. Credit Bid

    The Landlords' assertion that their credit bid on their
    Unexpired Lease should be calculated based on the amount
    according to their books and records, not the Debtors, is
    without merit.  Mr. Palmer argues that the conduct of a sale
    is within the discretion of the Debtors.

    The Debtors also are obligated to endeavor to obtain the
    highest and best offer for its Assets.  If a landlord would
    be allowed to credit bid based on its larger disputed cure
    amount, this would have the effect of chilling, rather than
    enhancing, competitive bidding on an Unexpired Lease, as less
    cash would be offered;

C. Designation Rights

    The Debtors assert that the proposed sale of their
    Designation Rights is a common occurrence in the bankruptcy
    context, contrary to the landlords' argument;

D. Abandonment

    Mr. Palmer also notes that the landlords' allegations that
    the abandonment of properties is only "to any party with a
    possessory interest in the property abandoned," and that, the
    Debtors may not abandon property to the lessors of the
    Unexpired Leases completely misconstrues the statute and case
    law and ignores the numerous instances where an abandonment
    to landlords takes place.  The landlords' contentions ignore
    longstanding case law like Farber v. Wards Co., In re
    Alexander's Inc., and In re Cardinal Export which clearly
    indicate the appropriateness of a debtor's abandonment to a
    lessor of property that is of inconsequential value or is
    burdensome to the estate. (AMES Bankruptcy News, Issue No.
    30; Bankruptcy Creditors' Service, Inc., 609/392-0900)


ANC RENTAL: Keeps Plan Filing Exclusivity Until March 8, 2003
-------------------------------------------------------------
ANC Rental Corporation and its debtor-affiliates obtained the
Court's approval to further extend their exclusive period to
file a Chapter 11 Plan to March 8, 2003, and their exclusive
period to solicit acceptances of that plan to May 7, 2003 --
without prejudice to their right to seek further extensions.
(ANC Rental Bankruptcy News, Issue No. 24; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


APYRON TECHNOLOGIES: Involuntary Chapter 7 Case Summary
-------------------------------------------------------
Alleged Debtor: Apyron Technologies, Inc.
                 4030 Pleasantdale Road
                 Atlanta, Georgia 30340
                 aka Project Earth Industries, Inc.
                 aka PEI

Involuntary Petition Date: December 4, 2002

Case Number: 02-74350                    Chapter: 7

Court: Northern District of Georgia      Judge: James Massey
        (Atlanta)

Petitioners' Counsel: Jennifer Meir Meyerowitz, Esq.
                       Alston & Bird, LLP
                       1201 W. Peachtree Street
                       Atlanta, Georgia 30309
                       Tel: 404-881-4791
                       Fax : 404-881-7777

Petitioners: Charles H. Walsh, Jr.
              Attn: Gerald Munitz
              55 East Monroe Street
              Suite 3700
              Chicago, IL 60603

              Sophia Walsh
              Attn: Gerald Munitz
              55 East Monroe Street
              Suite 3700
              Chicago, IL 60603

              Kenneth Wegner
              Attn: Gerald Munitz
              55 East Monroe Street
              Suite 3700
              Chicago, IL 60603

              John Luka, Jr.
              Attn: Gerald Munitz
              55 East Monroe Street
              Suite 3700
              Chicago, IL 60603

Amount of Claim: $1,950,000


ASIA GLOBAL: Court Approves $12-Million Asia Netcom Breakup Free
----------------------------------------------------------------
Judge Bernstein approves the Revised $12,000,000 Break-up Fee
and the Purchaser Fees and Expenses Reimbursement, in relation
to Asia Global Crossing Ltd.'s proposed asset sale to Asia
Netcom.  AGX's obligation to pay the Revised Break-up Fee or the
Purchaser Fees and Expenses Reimbursement, as the case may be,
will survive termination of the Sale Agreement and, until
indefeasibly paid in full in cash, will constitute an
administrative expense of its bankruptcy estate, ranking pari
passu with all other administrative expenses of the kind
specified in Sections 503(b) and 507 of the Bankruptcy Code.

The Break-Up Fee is designed to compensate Asia Netcom for its
substantial investment of time and resources and incurring
substantial out-of-pocket expenses in connection with entering
into the Sale Agreement.  The AGX Debtors agree to pay Asia
Netcom either:

    -- a $12,000,000 Break-up Fee, which is inclusive of the
       $7,000,000 Purchaser Fees and Expenses Reimbursement or

    -- the Purchaser Fees and Expenses Reimbursement.

These payments will constitute an administrative expense in the
Chapter 11 Case.  The Break-up Fee in its entirety is payable
after the occurrence of certain termination events in accordance
with the Sale Agreement.  Asia Netcom will receive the Break-up
Fee if:

    -- the Debtors agrees to or accepts an Acquisition Proposal
       from a party other than Asia Netcom;

    -- the Bankruptcy Court enters an order approving an
       Acquisition Proposal or a sale of the Acquired Assets to a
       party other than Asia Netcom;

    -- a plan of reorganization for the Debtors is filed that
       materially conflicts with the provisions of the Sale
       Agreement;

    -- there is a material breach by the Debtors that is
       incurable or uncured after 30 days; or

    -- a Subsidiary Bankruptcy Case is commenced by a Filing
       Subsidiary under Chapter 7 of the Bankruptcy Code, in
       which a trustee or an examiner with expanded powers is
       appointed or without specific amendments to the Sale
       Agreement. (Global Crossing Bankruptcy News, Issue No. 31;
       Bankruptcy Creditors' Service, Inc., 609/392-0900)

Asia Global Crossing's 13.375% bonds due 2010 (AGCXUS10R1) are
trading at about 11 cents-on-the-dollar, DebtTraders says. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AGCXUS10R1
for real-time bond pricing.


ASIACONTENT.COM: Pulls Plug on Joint Venture with MTV Networks
--------------------------------------------------------------
Asiacontent.com, Ltd., (OTC Bulletin Board: IASIF.OB) had
reached agreement with MTV Networks, its joint venture partner,
to terminate the parties' joint venture. The joint venture, Asia
On-Line Entertainment, Ltd., has provided on-line promotions to
youth in Korea, China, Taiwan, Southeast Asia and India since
2000. MTV Networks is a division of Viacom International, Inc.

Pursuant to the agreement between the Company and MTV Networks,
MTV Networks will transfer its shares in the joint venture to
the Company. The joint venture entity will then enter voluntary
liquidation in its jurisdiction of incorporation. Closing on the
share transfer, and the entry of the joint venture entity into
voluntary liquidation, are expected to occur within the next
several weeks.

After the closing of the share transfer, BDO International, the
Company's liquidator, expects to deliver a progress report to
shareholders concerning the status of the liquidation.

As previously announced, the Company commenced voluntary winding
up and liquidation on July 10, 2002.


ATINERA: Files for Chapter 11 Protection in San Francisco, CA
-------------------------------------------------------------
Atinera, a provider of technology solutions for the leisure
travel industry, is making its technology assets available for
auction under Chapter 11 Bankruptcy proceedings. These assets
feature an exclusive, global license, field IP for hosted
operations, and source code for Contour software that is the
basis of the Atinera Travel Solution.

Contour is the leading leisure travel management and
distribution system currently in use by major travel companies
worldwide. The complete Atinera Travel Solution and technology
assets, including Contour, is designed to support the following
core system requirements of leisure travel companies:

-- Advanced reservations/inventory management

-- FIT, Package, Tour, Cruise, Charter and Group travel modules

-- Real-time product and pricing control

-- Electronic distribution

-- Consumer and agency database, commission tracking

-- Automated advising/documentation

-- Performance tracking and reporting

The Atinera Travel Solution also includes an Enterprise
Application Integration middleware solution for standards-based
Web services and multi-channel vendor and distribution
connectivity.

Interested parties should contact Julia Davidson at 415/276-5441
or jdavidson@atinera.com for more information. The Atinera
administration offices are closed the week of Dec 23, reopening
Dec. 30, 2002. The sale takes place Jan. 17, 2003.

Atinera has filed a petition for protection under Chapter 11 of
the Bankruptcy Code, case # 02-33440 TC in the U.S. Bankruptcy
Court for the Northern District of California.


ATINERA LLC: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Atinera, LLC
         615 Battery Street, 2nd Floor
         San Francisco, California 94111

Bankruptcy Case No.: 02-33440

Type of Business: Online travel software maker.

Chapter 11 Petition Date: December 9, 2002

Court: Northern District of California (San Francisco)

Judge: Thomas E. Carlson

Debtors' Counsel: Patricia S. Mar, Esq.
                   Law Offices of Morrison and Foerster
                   425 Market Street
                   San Francisco, California 94105-2482
                   Tel: 415-268-7000


AUGMENT SYSTEMS: Must Raise New Capital to Continue Operations
--------------------------------------------------------------
AUG Corp., was incorporated in 1990 to develop and distribute
fiber optic printed circuit boards in the publishing and
printing markets. The fiber optic products had limited success
and in fiscal 1994 the Company began phasing out the fiber optic
operations and began the transition into a systems integration
and engineering consulting business. In 1995, the Company made a
strategic shift in its business operation into the server
market.

In September 2001, the Board of Directors and a majority of the
stockholders of the Company voted to change the name of the
Company to AUG Corp. The name change became effective on
October 29, 2001.

Effective August 31, 2001, the Company entered into a Stock
Purchase Agreement with the purchaser, a Curacao, Netherlands
Antilles corporation. Under this Agreement, the purchaser
purchased 2,000,000 shares of the Company's Series A Preferred
Stock, par value $.01 and 670,854 shares of the Company's common
stock (post 100:1 reverse stock split) for the sum of $400,000.
The preferred shares were converted into an aggregate of
40,000,000 common shares, par value $.0001, upon the completion
of a 100:1 reverse stock split of the Company's common stock.

In January 2002, the Company acquired 100% of the common stock
of Synthesys Secure Technologies, Inc.  The purchase price of
the investment amounted to $20,181,948, and was comprised of a
cash payment of $600,000 made in December 2001, and the issuance
of 5,350,259 shares of restricted common stock valued at
$19,581,948. The shares were valued at the average quoted
trading price during the acquisition period. The fair value of
the investment at the acquisition date was determined to be
$204,480. The excess of the purchase price over the fair value
of the investment in the amount of $19,977,469 was accounted for
as goodwill.

Synthesys was formed on May 18, 2001 in the State of Florida.
Synthesys is a global security solutions company specializing in
security access to computer networks, buildings, offices, and
other secure areas. Synthesys develops and markets a variety of
innovative security-based products that are used to secure
databases, to authenticate people over the phone, over the
computer, and via camera.

For the three months ended March 31, 2002, the Company has a net
loss of $1,024,361, a negative cash flow from operations of
$782,076, and a working capital deficiency of $463,145 and
accumulated deficit of $23,304,575 at March 31, 2002. These
circumstances raise substantial doubt as to the Company's
ability to continue as a going concern.  The ability of the
Company to continue as a going concern is dependent on the
Company's ability to raise additional capital, and implement its
business plan.


BETHLEHEM STEEL: Gets Go-Signal to Amend $450-Mil. DIP Financing
----------------------------------------------------------------
The DIP Order is deemed modified, Judge Lifland rules, to the
extent provided in the proposed amendment agreed to by Bethlehem
Steel Corporation and its debtor-affiliates and the DIP Lenders.
The Debtors are authorized to make, execute and deliver all
instruments and documents necessary to amend the DIP Credit
Agreement so as to be consistent with the terms of the Order,
without the need to apply to, or receive further approval from
the Court.

The DIP Order is amended for all purposes to include all of the
Equity Collateral in the definition of the term "Collateral" as
used in the DIP Order, regardless of whether these interests
were or are at any time listed on Schedule 2.23(b) of the DIP
Credit Agreement.

Unless otherwise ordered by the Court, the Debtors will not
permit Alliance, Buckeye Coatings, Ohio Steel and Buckeye Steel
to engage in any business other than owning their respective
interests in Columbus Coatings and Columbus Process or incurring
any indebtedness other than as authorized pursuant to these
provisions.

Except to the extent of the Carve-Out specified in paragraph 10
of the DIP Order, no expenses of administration of the Cases or
any future proceeding or case that may result, including
liquidation in bankruptcy or other proceedings under the
Bankruptcy Code, will be charged against the Debtors'
Collateral, pursuant to Section 506(c) of the Bankruptcy Code or
otherwise, without the prior written consent of the
Restructuring Agent and the Debtors, and no consent will be
implied from any other action, inaction, or acquiescence by the
Restructuring Agent, the Restructuring Lenders or the Debtors.

The Debtors, the Restructuring Agent and the Restructuring
Lenders may amend, modify, supplement or waive any provision of
the Financing Documents if the amendment, modification,
supplement or waiver is permitted under the terms of the
Financing Documents and is not material, in the good faith
judgment of the Debtors and the Restructuring Agent, without the
need to apply to, or receive further approval from, the Court,
or provide notice to any parties.

Subject only to the provisions of the Restructuring Credit
Agreement, Judge Lifland informs the parties concerned that
automatic stay provisions of Section 362 of the Bankruptcy Code
are vacated and modified to the extent necessary so as to permit
the Restructuring Agent and the Restructuring Lenders to
exercise, upon the occurrence of an Event of Default and the
giving of five business days prior written notice to counsel for
the Debtors, counsel to the DIP Agent, counsel to the Inventory
Agent, the United States Trustee for the Southern District of
New York, and counsel for the Official Committee of Unsecured
Creditors in these Cases, all rights and remedies
provided for in the Financing Documents.

Unless all obligations and indebtedness owing to the
Restructuring Agent and the Restructuring Lenders under the
Restructuring Credit Agreement will have been paid in full, the
Debtors will not seek, and it will constitute an Event of
Default if any of the Debtors seek, or if there is entered, an
order dismissing any of the Cases.

If an order dismissing any of the Cases under Section 1112 of
the Bankruptcy Code or otherwise is at any time entered, that
order will provide in accordance with Sections 105 and 349(b) of
the Bankruptcy Code that:

   (i) the superpriority claims, liens and security interests
       granted pursuant to this Order will continue in full force
       and effect and will maintain their priorities as provided
       in this Order until all obligations in respect thereof
       will have been paid and satisfied in full and that these
       superpriority claims, liens and security interests, will,
       notwithstanding the dismissal, remains binding on all
       parties-in-interest; and

  (ii) the Court will retain jurisdiction, notwithstanding the
       dismissal, for the purposes of enforcing the claims, liens
       and security interests referred to.

If any or all of the provisions are reversed, stayed, modified
or vacated, the reversal, stay, modification or vacation will
not affect:

   (i) the validity of any obligation, indebtedness or liability
       incurred by the Debtors to the Restructuring Lenders in
       connection with the Restructuring Loan, prior to written
       notice to the Restructuring Agent of the effective date of
       the reversal, stay, modification or vacation; or

  (ii) the validity and enforceability of any lien or priority
       authorized or created hereby or pursuant to the
       Restructuring Credit Agreement with respect to any
       obligations, indebtedness or liability.

Notwithstanding any reversal, stay, modification or vacation,
any indebtedness, obligation or liability incurred by the
Debtors to the Restructuring Lenders in connection with the
Restructuring Loan, prior to written notice to the Restructuring
Agent of the effective date of reversal, stay, modification or
vacation will be governed in all respects by the original
provisions of this Order, and the Restructuring Lenders will be
entitled to all of the rights, remedies, privileges and
benefits, granted herein and/or pursuant to the Restructuring
Credit Agreement with respect to the indebtedness, obligation or
liability.  The obligations of the Debtors under this Order and
the Restructuring Loan will not be discharged by the entry of an
order confirming a plan of reorganization in any of the Cases
and, pursuant to Section 1141(d)(4) of the Bankruptcy Code, the
Debtors have waived the discharge.

In the event that the Debtors, the Restructuring Agent and the
Restructuring Lenders do not execute the Financing Documents,
Judge Lifland rules that these provisions will be null and void.
(Bethlehem Bankruptcy News, Issue No. 27; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


BETHLEHEM STEEL: Calls ISG Contract Model for Labor Agreements
--------------------------------------------------------------
The following statement is attributable to Robert S. Miller,
chairman and chief executive officer, Bethlehem Steel
Corporation, on the agreement between the United Steelworkers of
America (USWA) and the International Steel Group (ISG):

"The new agreement between the USWA and ISG is certainly good
news for those parties. The new agreement appears to improve
ISG's cost structure and productivity, thereby increasing its
competitiveness. I believe the agreement will be viewed as a
model for future labor contracts at some domestic steel
companies, including at Bethlehem.

"Bethlehem is still actively pursuing the mutual due diligence
with ISG to determine if a combination of the two companies is
in the best interests of all of our constituents, including our
customers, employees and retirees. This new labor agreement with
ISG should help advance Bethlehem's discussions with the union
as a necessary component to either a combination with ISG or as
a viable, stand-alone company.

"The abrupt termination last week of Bethlehem's pension plan by
the Pension Benefit Guaranty Corporation will change the path
Bethlehem takes to complete its labor contract, but it will not
be the sole determining factor deciding Bethlehem's ability to
consolidate with either ISG or another company. Bethlehem
continues its discussions with ISG and looks forward to reaching
a similar contract in the near future with the USWA."

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


BORDEN CHEMICALS: Court to Consider Liquidation Plan on Jan. 24
---------------------------------------------------------------
Borden Chemicals and Plastics Limited Partnership (OTCBB:BCPUQ)
filed its Form 10-Q for the quarterly period ended September 30,
2002. The Partnership is a holding entity that has no
independent operations. Its only activity has been ownership of
the sole limited partnership interest in Borden Chemicals and
Plastics Operating Limited Partnership, which filed a voluntary
petition under Chapter 11 of the Bankruptcy Code for the
District of Delaware on April 3, 2001, and engaged in the PVC
resin business prior to the sale or shutdown of its facilities
during the first half of 2002.

The Operating LP and BCP Management, Inc., the general partner
of both the Operating LP and the Partnership, which filed
bankruptcy on March 22, 2002, have filed a joint plan of
liquidation with the Bankruptcy Court, which has been submitted
to creditors for approval. Under the liquidation plan, the
Partnership's sole asset -- its limited partnership interest in
the Operating LP -- would be extinguished. A court hearing on
the plan of liquidation is scheduled for January 24, 2003. The
expectation at present is that the plan of liquidation will be
confirmed and consummated during the first quarter of 2003.

Neither the Partnership nor the Partnership's unitholders would
receive any distribution from the Operating LP bankruptcy under
the plan of liquidation because sales of the Operating LP's
assets have not generated enough cash to satisfy all of the
Operating LP's debts. In addition, the bankruptcy of the general
partner and the sale of substantially all of the Operating LP's
assets trigger the dissolution and winding up of the Partnership
pursuant to provisions of the Partnership's amended and restated
agreement of limited partnership and Delaware law.

Accordingly, the Partnership further announced that, following
confirmation of the joint plan of liquidation, it intends to
file a certificate of cancellation with the Delaware Secretary
of State terminating the Partnership's existence as a Delaware
limited partnership. Thereafter, transfers of units would no
longer be permitted. At that time, the Partnership also intends
to file a certificate on Form 15 with the Securities and
Exchange Commission terminating registration of its common units
and suspending the Partnership's duty to file further reports
with the SEC.

For federal income tax purposes, unitholders must take into
account their allocable share of income, gains, losses,
deductions and credits of the Operating LP (which flow to them
through the Partnership), even if they receive no cash
distribution. The sales of Operating LP assets may, and
discharge of indebtedness income resulting from the nonpayment
of certain Operating LP debts will, result in the allocation of
ordinary income and/or capital gain to unitholders in 2002, or
later, without the receipt of a cash distribution to pay any tax
liability. A unitholder's tax liability attributable to such
income and/or gain may exceed any tax benefits resulting from
any losses attributable to the unitholder's allocable share of
Operating LP operating losses or the unitholder's disposition or
write-off of Partnership units. The actual tax impact to a
unitholder is dependent on the unitholder's overall tax
circumstance. Unitholders should consult with their personal tax
advisors regarding the tax consequences of purchasing, holding
or disposing of units.


BRITISH ENERGY: Wants to Sell 82.4% Interest in Bruce Power LP
--------------------------------------------------------------
The Board of British Energy announces that British Energy and
certain of its subsidiaries have entered into binding Heads of
Agreement to dispose of British Energy's entire 82.4% interest
in Bruce Power Limited Partnership as follows: 79.8% to a
consortium made up of Cameco Corporation, BPC Generation
Infrastructure Trust and TransCanada PipeLines Limited; and 2.6%
to the Power Workers' Union Trust No. 1 and The Society of
Energy Professionals Trust. The Consortium will also acquire
British Energy's 85% interest in Bruce Power Inc., the general
partner of Bruce Power.

In addition, the Consortium will acquire the 50% interest that
British Energy holds in Huron Wind Limited Partnership through
its subsidiary British Energy Canada Investments Inc. The
disposal of British Energy's interest in Bruce Power, BPI and
Huron Wind will be effected through the sale of British Energy
(Canada) Limited.

Cameco already holds a 15% interest in Bruce Power and BPI
through its subsidiary Cameco Bruce Holdings Inc., and the
Unions together hold a 2.6% interest in Bruce Power. The
Consortium members will each own a 31.6% interest in Bruce Power
and a 16.7% interest in Huron Wind as a result of the disposal.
PWU will own a 4% interest in Bruce Power and the Society will
own a 1.2% interest in Bruce Power as a result of the disposal.
BPI will be entirely owned by the Consortium as a result of the
disposal.

British Energy's decision to sell BECL is a key element in the
proposed restructuring announced on 28 November 2002.

British Energy expects to receive a maximum aggregate
consideration of C$770m, subject to various contingencies and
potential adjustments. Of this aggregate consideration, British
Energy will receive C$630m in cash at closing subject, inter
alia, to the pre-closing adjustments in respect of material
adverse change and early termination of trading contracts which
are described below.

In addition, British Energy expects to receive up to:

      - C$100m, contingent on the restart of the two Bruce A
        units as set out below; plus

      - C$20m, which will be retained for two months following
        closing against a potential adjustment in respect of any
        pension fund deficit; plus

      - C$20m, which will be retained to cover any successful
        claims in respect of customary representations and
        warranties until any claims raised against British Energy
        or certain of its subsidiaries within two years from the
        date of closing are resolved.

In addition, C$80m will be retained to cover the estimated
outstanding tax liabilities of BECL and its subsidiaries.

Any balance of the retained sums not applied to cover the
outstanding tax liabilities of BECL and its subsidiaries,
pension fund deficit or any successful claim for breach of
representations and warranties will be paid to British Energy at
the end of the relevant period for retention subject to
confirmation from the Consortium, based upon written input from
their auditors, actuaries, tax or legal advisors to the extent
necessary, and in consultation with Ontario Power Generation,
Inc., that such a release is appropriate. In the event that sums
due in respect of outstanding tax liabilities, any pension fund
deficit or claims under the representations and warranties
exceeds the amount held back for that purpose, British Energy
would be required to pay the amount of such excess to the
Consortium.

The purchase price is subject to adjustment pre-closing if an
event, change or development in or affecting the business of
Bruce Power which is materially adverse to such business or,
inter alia, the prospects or operation of the Bruce facility
occurs prior to closing. In the event of a MAC with a value of
more than C$20m, there will be an adjustment to the purchase
consideration calculated by reference to the impact on the value
of the interest in Bruce Power acquired by the Consortium on a
net present value basis. For a MAC with a value of up to C$350m,
the sole remedy for the Consortium shall be an adjustment to the
purchase price. If a MAC with a value of more than C$350m
occurs, the parties will not be obliged to complete the proposed
transaction.

In addition the purchase price may be adjusted pre-closing in
the event that contracts for the sale of electricity or the
hedging of electricity prices (the "Trading Contracts") are
terminated early prior to closing. The principal events of
default under the Trading Contracts which could give rise to
early termination are non-payment or insolvency of either party
to the agreement or their affiliates or associates. In the
majority of Trading Contracts, the insolvency of British Energy
would be an event of default which could lead to early
termination. The purchase price will be reduced dollar for
dollar if there is a net loss to Bruce Power from the
termination of a Trading Contract, and increased dollar for
dollar if there is a net gain. The amount of such net loss or
net gain shall be calculated at closing taking into account any
replacement contracts entered into by Bruce Power and any
payments made in connection with letters of credit associated
with the relevant Trading Contract. A net loss resulting from
the early termination of a Trading Contract will not constitute
a MAC.

Of the C$100m receivable by British Energy contingent on the
restart of the two Bruce A units, C$50m will be released to
British Energy provided the first unit is restarted by 15 June
2003 and an additional C$50m will be released to British Energy
if the second unit is restarted by 1 August 2003. Delays in the
restart of each unit would result in the payments reducing by
10% per month. Any amounts forfeited by British Energy under
this arrangement would be paid to the Provincial Government of
Ontario.

In addition to the consideration referred to above, the
Consortium will pay C$100m to British Energy at closing to fund
a one-off estimation and restructuring fee of C$100m to the
Province in consideration of the Province consenting to the
transaction. Subject to adjustment, therefore, the total
consideration payable by the Consortium is expected to be
C$950m.

Closing of the proposed transaction is subject to a number of
conditions precedent including, inter alia, receipt of certain
confirmations from the Canadian Nuclear Safety Commission
("CNSC"), receipt of favourable Canadian tax rulings, consent of
the Province to the proposed transaction, Canadian Competition
Act clearance and the approval of British Energy's shareholders.

The Secretary of State for Trade and Industry has consented to
the proposed sale under the DTI credit facility entered into on
26 September 2002 and amended on 28 November 2002, and the
Province has agreed in principle to give its consent. The Unions
have consented to the transaction under the Bruce Power limited
partnership agreement in consideration of Bruce Power
Investments Inc, a subsidiary of British Energy, forgiving loans
of approximately C$14.6m made to the Unions to allow them to
acquire their initial 2.6% interest in Bruce Power and fund
subsequent capital calls, and the transfer to the Unions of an
additional 2.6% interest in Bruce Power immediately prior to
closing.

As detailed above, the parties will not be obliged to complete
the transaction if a MAC with an aggregate value of greater than
C$350m occurs. In addition, the Consortium may elect not to
close the transaction if certain senior employees of Bruce Power
leave the employment of Bruce Power or announce their intention
to do so prior to closing and it is a further condition of
closing that certain senior employees enter into employment
agreements with Bruce Power for at least five years subject to
death, disability, normal retirement arrangements and dismissal
for cause.

The DTI has agreed to provide certain credit support to Bruce
Power under the Facility in the period prior to closing, which
it is anticipated will occur prior to 14 February 2003 in
accordance with the restructuring proposal announced on 28
November 2002. If closing has not occurred by 14 February 2003
the parties are not obliged to complete the proposed
transaction.

At closing, the Consortium will assume responsibility for all of
British Energy's obligations as credit support provider and/or
guarantor under Bruce Power's existing Trading Contracts. The
Consortium will also take over British Energy's financial
assurance obligations to Bruce Power in respect of the CNSC
licence at closing. In addition, the Consortium will assume
responsibility for the C$175m guarantee granted by British
Energy to OPG under the lease of the Bruce facility and pay the
C$225m of deferred rent payments due by Bruce Power to OPG at
closing. British Energy will have no further obligation to OPG
in respect of deferred rent payments.

The proceeds of the transaction will initially be paid into an
account approved by and charged in favor of the DTI as security
for British Energy's obligations to the DTI and are expected to
be used to repay the sums made available to British Energy under
the Facility. The disposal will considerably reduce the cash and
collateral requirements of British Energy going forward under
the Facility.

A break fee of C$15m will be payable by British Energy in the
event that the transaction is not completed as a result of the
Board accepting an unsolicited offer for its entire interest in
Bruce Power. The break fee shall also be payable if the Board
fails to recommend the transaction or varies its recommendation
to the shareholders and the shareholders do not approve the
transaction and, in the event that an insolvency official is
appointed, the insolvency official does not affirm and agree to
be bound by the heads of agreement within five days of his or
her appointment.

The parties have agreed to work expeditiously and in good faith
to negotiate, settle and execute a definitive agreement
embodying the foregoing and further provisions in terms
satisfactory to the parties acting reasonably.

The net book value of the net assets (after adjustment for
minorities and financing and taking into account the nature of
the lease of the Bruce facility under UK GAAP) which are the
subject of the proposed transaction was C$96m as at 31st March
2002. The profits (pre-tax and post-minorities) attributable to
the net assets which are the subject of the proposed transaction
were C$74m for the 10 1/2 month period from 12 May 2001 to 31
March 2002.

British Energy's decision to sell BECL is a key element in the
proposed restructuring intended to achieve the long-term
financial viability of the British Energy group. As previously
announced, the DTI has confirmed its intention to support the
proposed restructuring and has agreed to extend the Facility
until 9 March 2003 in order to provide financial stability and
security while British Energy seeks the support of certain
significant creditors.

The Board believes that the restructuring of the group offers
the best available opportunity to achieve the long term
financial viability of the British Energy Group. However, the
proposed restructuring requires British Energy to reach formal
agreement with a large number of creditors with respect to
diverse financial interests, as well as a successful disposal of
British Energy's interests in Bruce Power and AmerGen Energy
Company, LLC.

If the transaction is not completed, such agreements with
creditors cannot be reached, the required approvals for the
restructuring are not forthcoming, the assumptions underlying
the restructuring proposal are not fulfilled or the conditions
to the Facility or restructuring are not satisfied or waived
within the timescales envisaged, British Energy may be unable to
meet its financial obligations as they fall due and therefore,
British Energy may have to take appropriate insolvency
proceedings, in which case the distributions to unsecured
creditors may represent only a small fraction of their unsecured
liabilities and there is unlikely to be any return to
shareholders.

Bruce Power is a subsidiary undertaking of British Energy which
operates the Bruce Power nuclear facility. The facility is
located in a 2,300 acre site which houses two power stations,
plus supporting infrastructure, a training centre, maintenance
facility, emergency power facilities and a visitors' center. The
facility is situated on the shores of Lake Huron between the
towns of Kincardine and Saugeen Shores. Bruce Power leases eight
reactors at the site. The four operating reactors in Bruce B
have a generating capacity of around 3,200 MW. The four reactors
in Bruce A were removed from service between 1995 and 1998.
Subject to CNSC approval, Unit 4 of Bruce A is expected to
return to service in April 2003 followed by Unit 3 of Bruce A
before next summer's period of peak demand. The environmental
assessment hearing, which is a necessary requirement of the
Bruce A restart was held on December 12th 2002. The CNSC staff
recommended that the Commission accept the report presented to
them and allow the Bruce A restart to progress to the licensing
stage. Further hearings for additional steps in the restart
process are scheduled for 16 January 2003 and 26 to 27 February
2003.

Huron Wind is a limited partnership between British Energy and
OPG which owns a wind farm comprising five 1.8 MW wind turbines
with a capacity of 9.0MW. Each party owns a 50% interest in
Huron Wind and will share the power output equally. The Huron
Wind site, which is located adjacent to the Bruce Power Visitors
Centre, commenced commercial operation in mid-November 2002.

Cameco, with its head office in Saskatoon, Saskatchewan, is the
world's largest producer of uranium and the largest supplier of
combined uranium and conversion services. Cameco's uranium
products are used to generate clean electricity in nuclear power
plants around the world including Ontario, where the company has
an interest in Bruce Power. The company also mines gold and
explores for uranium and gold in North America, Australia and
Asia. Cameco's shares trade under the symbol CCO on the Toronto
stock exchange and CCJ on the New York stock exchange.

TransCanada is a leading North American energy company. It is
focused on natural gas transmission and power services. The
company's network of approximately 38,000 kilometers of pipeline
transports the majority of western Canada's natural gas
production to the fastest growing markets in Canada and the
United States. With today's announcement, TransCanada owns or
has interests in, controls, manages or is constructing
facilities for approximately 4,150 megawatts of power, an amount
of power that can meet the needs of about four million average
households. The company's common shares trade under the symbol
TRP on the Toronto and New York stock exchanges.

BPC Generation Infrastructure Trust, based in Toronto, Ontario,
is established by Ontario Municipal Employees Retirement Board,
one of Canada's largest pension funds with C$34bn in assets
under management. OMERS, which was established in 1962, has
grown into one of the most competitive and cost-effective
pension plans in Canada, providing guaranteed retirement
security, competitive benefits and efficient service to 312,000
members and close to 1,000 employers across Ontario.

Cameco and TransCanada will be making announcements on the
Toronto stock exchange concurrent with this release.


CASUALTY UNDERWRITERS: S&P Hatchets Counterparty Rating to BBpi
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty
credit and financial strength ratings on Casualty Underwriters
Insurance Co., to 'BBpi' from 'BBBpi'.

"The downgrade reflects the company's limited operating scope
and marginal operating performance, offset in part by very
strong capitalization," observed credit analyst Alan Koerber.

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

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



CEATECH USA: Viability Uncertain Due to Insufficient Capital
------------------------------------------------------------
Ceatech USA has sustained net losses since inception and
presently does not have sufficient committed outside sources of
capital to fund such losses. Therefore, doubt must be expressed
regarding Ceatech's continuing viability. For the quarter and
nine months ended October 31, 2002, Ceatech incurred a net loss
of $933,033 and $2,582,577, respectively, and at October 31,
2002, Ceatech had an accumulated deficit of $10,011,401, which,
along with the insufficiency of committed outside capital to
fund any future losses, raises substantial doubt about its
ability to continue as a going concern. In addition, during the
nine months ended October 31, 2002, Ceatech used cash in
operations of $282,238 and used cash for capital expenditures of
$309,023 and, therefore, had to rely on outside sources of cash
to fund operations and capital expenditures.

The Company's continuation as a going concern is dependent upon
its ability to generate sufficient cash flow internally to meet
its obligations on a timely basis, to comply with the terms of
its existing loan agreements, to obtain additional financing or
refinancing as may be required, and ultimately to attain
positive operating cash flow. Although Ceatech has finished
construction on the second phase of growout ponds, the existing
forty growout ponds may not be sufficient to enable the Company
to generate positive cash flow.

During the quarter ended October 31, 2002, Ceatech began to
recover from serious production problems it had been
experiencing in its hatchery which prevented restocking of all
of it's farm grow-out ponds in a timely and orderly manner. The
interruptions in the supply of good quality seed to the farm had
a material adverse impact on Ceatech's financial and operating
performance during the prior quarter and continued to adversely
impact performance in the third quarter.  The Company currently
believes that the hatchery production problems have been
mitigated to the point of providing more than adequate seed of
improved quality to the farming operation. However, it will take
until the end of the fiscal year to produce enough juvenile
shrimp to stock all of the Company's existing forty grow-out
ponds and return to a normal harvest schedule.

The Company also intends to lease additional land and to
construct more growout ponds. Such expansion would be financed
through the issuance of debt or equity. However, there is no
assurance that such debt or equity can be obtained on terms
acceptable to the Company. The inability to obtain additional
debt financing or equity capital will have an adverse impact on
the ability of the Company to continue operations.

All of the factors that affect the quantity and/or quality of
postlarvae produced by a marine shrimp hatchery such as
Ceatech's are not known or completely understood. In the shrimp
industry, any hatchery may occasionally encounter production
problems and if typical corrective measures prove ineffective,
it is industry practice either to temporarily discontinue
hatchery operations altogether, or to expand production in order
to overcome the sub-standard performance. Because of the ongoing
requirement of supplying the Company's farm with seed and the
limited size of its hatchery, Ceatech could not address the
production problems by employing either of these solutions.
Instead, the Company developed new and innovative solutions that
have not only eliminated the need to suspend production for
lengthy periods of time but have also resulted in improved
hatchery production performance. The Company currently believes
that the hatchery production problems have been mitigated to the
point of providing more than sufficient seed of improved quality
to the farming operation. However, it will take until the end of
the fiscal year to produce enough juvenile shrimp to stock all
of the Company's existing forty growout ponds and return to a
normal harvest restocking schedule.


CENTENNIAL HEALTHCARE: Files for Chapter 11 Reorg. in Georgia
-------------------------------------------------------------
Centennial HealthCare Corp., and its affiliates have filed for
Chapter 11 reorganization on December 20, 2002, in the U.S.
Bankruptcy Court for the Northern District of Georgia (Atlanta
Division).

Health Care Property Investors Inc., (NYSE:HCP) on Dec. 2, 2002,
sent default and lease termination notices to Centennial
HealthCare Corp., and certain of its subsidiaries in November
2002 for non-payment of rent under 17 leases and non-payment of
interest and principal under a secured loan.

At or about the same time Health Care also sent default and
lease termination notices to third party lessees of three
facilities managed by Centennial.

Including amounts due for December 2002, Health Care has net
rent and interest receivables due from Centennial and the third
party lessees of three facilities managed by Centennial of
approximately $4.3 million. Letters of credit provided by an
independent financial institution secure rent and loan payments
due from Centennial up to $4.4 million.

The total obligations of Centennial and the third party lessees
under the 20 leases and the loan are approximately $900,000 per
month. Health Care's gross investment in the 20 leased
facilities and the facility subject to the secured loan was
approximately $67 million and the current book value, net of
depreciation, is approximately $42 million.

Health Care continues to evaluate its alternatives with regard
to the 21 facilities, including leasing the affected facilities
to other operators or negotiating new lease and loan contracts
with Centennial, or a combination of both.

As previously announced, Health Care anticipates that initial
monthly payments under new leases will be approximately one-half
of the current required monthly payments under the existing
leases, but will increase over time.

Health Care Property Investors is a self-administered equity
real estate investment trust that invests directly or through
joint ventures in health-care facilities. The company's
investment portfolio, as of Sept. 30, 2002, consists of 442
facilities in 42 states.

Health Care's investments include 183 long-term care facilities,
88 assisted living facilities, 85 medical office buildings, 21
acute-care hospitals, 35 physician group practice clinics, nine
freestanding rehabilitation facilities, seven health-care
laboratory and biotech research facilities and 14 retirement
living communities.

For more information on Health Care Property Investors, visit
the company's Web site at http://www.hcpi.com


CENTENNIAL HEALTHCARE: Case Summary & 30 Unsecured Creditors
------------------------------------------------------------
Lead Debtor: Centennial HealthCare Corporation
              400 Perimeter Terrace
              Suite 650
              Atlanta, GA 30346

Bankruptcy Case No.: 02-74974

Debtor affiliates filing separate chapter 11 petitions:

   Entity                                               Case No.
   ------                                               --------
   Hilltopper Holding Company                           02-75002
   Carebridge, Inc.                                     02-75004
   Centennial Acquisition Corporation                   02-75005
   Centennial Employee Management Corporation           02-75006
   Centennial HealthCare Acquisition Corporation        02-75007
   Centennial HealthCare Hospital Corporation           02-75009
   Centennial HealthCare Investment Corporation         02-75010
   Centennial HealthCare Management Corporation         02-75011
   Centennial HealthCare Properties Corporation         02-75014
   Centennial HealthCare Property Services Corporation  02-75015
   Centennial Professional Therapy Services Corporation 02-75017
   Centennial/Ashton Properties Corporation             02-75018
   Coastal Administrative Services Corporation          02-75020
   Jennings Nursing Home Investors, LLC                 02-75023
   Jennings Property Services Company, LLC              02-75024
   Oak Grove of Rutherford Limited Partnership          02-75025
   Paragon Rehabilitation, Inc.                         02-75026
   Probitas Real Property Management, LLC               02-75027
   Parkview Partnership                                 02-75028
   Probitas Claims Management, LLC                      02-75029
   THS Partners I, Inc.                                 02-75030
   Probitas Consulting Services, LLC                    02-75031
   THS Partners II, Inc.                                02-75032
   Probitas Health Management Solutions, LLC            02-75033
   Total Care Consolidated, Inc.                        02-75034
   Probitas Procurement Services, LLC                   02-75035
   Total Care of the Carolinas, Inc.                    02-75037
   Transitional Health Partners                         02-75038
   Total Care, Inc.                                     02-75040
   Transitional Health Services, Inc.                   02-75041
   Total Health Care Services, Inc.                     02-75043
   Transitional Financial Services, Inc.                02-75045
   WelCare HealthCare Acquisition Corporation           02-75046
   WelCare Investment Company, LLC                      02-75047

Type of Business: Operates and manages 86 nursing homes in 19
                   states.

Chapter 11 Petition Date: December 20, 2002

Court: Northern District of Georgia (Atlanta)

Judge: James Massey

Debtors' Counsel: Brian C. Walsh, Esq.
                   Sarah Robinson Borders, Esq.
                   King & Spalding
                   191 Peachtree Street
                   Atlanta, GA 30303-1763
                   Tel: (404)572-4600
                   Fax : (404) 572-5149

Estimated Assets: More than $100 Million

Estimated Debts: More than $100 Million

Debtor's 30 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Medline Industries          Trade                   $4,112,643
Bill Abington
One Medline Place
Mundelein, IL 60060
Tel: 847-949-2002

OmniCare, Inc.                                      $2,945,596
Joel Gemunder
100 East Rivercenter Blvd.
Suite 1500
Covington, KY 41011
Tel: 859 392-3300

West Bend Mutual Insurance  Surety                  $2,750,000
  Company
1900 South 18th Street Avenue
West Bend, WI 53095
Attn: Greg Syvrud
3113 W. Beltline Hwy.
Madison, WI 53708

Indiana HCP, LP             Lease                   $2,130,784
James Reynolds
4675 Macarthur Court 9th Floor
Newport Beach, CA 92660
Tel: 949-221-0600

Ernst & Young LLP           Professional Fees       $1,250,071
Tony Bielawski
600 Peachtree St.,
Suite 2800
Atlanta, GA 30308-2215
Tel: 404 814 5828

Health Care Property        Lease                   $1,011,165
  Investors, Inc.
James Reynolds
4675 Macarthur Court 9th Floor
Newport Beach, CA 92660
Tel: 949 221-0600

Institutional Distributors, Trade                     $636,854
  Inc.
Chief Financial Officer
2742 Hwy 25 N
PO Box 520
East Bernstadt, KY 40729

Health Care Property        Lease                     $585,571
  Partners
James Reynolds
4675 Macarthur Court 9th Floor
Newport Beach, CA 92660
Tel: 949 221-0600

Royal & Sun Alliance        Insurance                 $476,745
  Insurance Company
945 East Paces Ferry Rd.,
Suite 1890, Atlanta, GA 30326
Ken Johnson
5 Concourse Pky. Suite 500
Atlanta, GA 30348

Direct Supply Healthcare    Trade                     $471,158
  Equipment
Bob Hillis
6767 N. Industrial Rd.
Milwaukee, WI 53223
Tel: 800-405-3774

Gordon Food Service         Trade                     $378,776
Greg Penn
20212 Wagon Trail Drive
Noblesville, IN 46060
Tel: 800-968-6577

General Star Management     Insurance                 $361,131
  Company
75 Remittance Dr Ste 1036
Chicago, IL 60675-1036
Tel: 203-328-5800
Rebecca Trief & Steve Leone

CareSouth                   Trade                     $358,488
John Southern
PO Box 200
Augusta, GA 30903
Tel: 800 241 3363

Hunton & Williams           Professional Fees         $293,762
Sylvia Kochler
600 Peachtree St. NE
Atlanta, GA 30308-2216
Tel: 404-888-4119

HCPI Knightdale Inc.        Lease                     $255,482
James Reynolds
4675 Macarthur Court
9th Floor
Newport Beach, CA 92660
Tel: 949-221-0600

Popular Leasing              Lease                    $249,856

National Union Fire          Insurance                $215,000
  Insurance Company

EG Forrest Company           Trade                    $177,193

Ken Owens                    Severance                $158,333

American Airlines            Trade                    $155,929

Magnolia Management Company  Trade                    $154,060

Willkie Farr & Gallagher     Professional Fees        $150,365

United States Laboratory     Trade                    $143,703
  Corp.

Cirelli Foods                Trade                    $112,583

Anatomic Concepts, Inc.      Trade                    $107,237

Reznick Fedder & Silverman   Professional Fees        $100,000

Elderberry Manor Of          Lease                     $94,900
  Mecklenburg, Limited Partnership

Wells Fargo Equipment        Lease                     $90,333
  Finance, Inc.

AT&T                         Trade                     $83,971

Blue Cross Blue Shield Of GA Trade                     $79,149


CHARTER COMMS: Names Margaret Bellville as New EVP and COO
----------------------------------------------------------
Charter Communications, Inc., (Nasdaq:CHTR) reported that,
following a meeting of its Board of Directors, the Company has
determined to make a number of changes related to its senior
management. The Company also said it is proceeding with the re-
audit of its 2000 and 2001 financial statements. The Company
also presently anticipates the growth rate of fourth quarter
revenue to be at or near the low end of its prior revenue
guidance of 8 to 9%, and fourth quarter operating cash flow to
be less than previous guidance. The re-audits of 2000 and 2001,
as well as the audit of 2002 results, are expected to be
completed in the first quarter of 2003. Accordingly, the Company
is not planning to provide further specific guidance until the
completion of its 2002 audit.

Margaret A. "Maggie" Bellville has been named Executive Vice
President and Chief Operating Officer. In this capacity, Ms.
Bellville will apply her more than 20 years of cable industry
experience in operations, business development, marketing, and
sales to Charter's business and strategy development efforts.
Her expertise includes serving as a former Executive Vice
President of Operations for Cox Communications, Inc., the
nation's fourth-largest cable television company.
Ms. Bellville's joining Charter was announced earlier this
month. She succeeds David G. Barford, who had been placed on
leave and is now being terminated.  Mr. Barford had been
Executive Vice President and Chief Operating Officer since July
2000.

Steven A. Schumm, Charter's Executive Vice President and Chief
Administrative Officer, has been named interim Chief Financial
Officer. Kent D. Kalkwarf, who had held the position of
Executive Vice President and Chief Financial Officer since July
2000, is also being terminated. Mr. Schumm will serve in this
interim capacity pending selection of a permanent Chief
Financial Officer. He is a certified public accountant with a
strong financial background having, among other things, been
managing partner of the St. Louis office of Ernst & Young, where
he worked for approximately 25 years.

The terminations of Messrs. Barford and Kalkwarf follow a review
by the Company of various matters, including those relating to
the previously disclosed Grand Jury investigation. The Company
has been advised by the U.S. Attorney's office that no member of
its Board of Directors, including the Chief Executive Officer,
is a target of the investigation. The Company is actively
cooperating with the investigation.

Carl Vogel, Charter's President and Chief Executive Officer,
stated, "These actions with respect to the management changes
and the re-audit of the Company's financials are necessary so
that Charter Communications can move forward as we focus on
building the Company for the future. Maggie Bellville will
complement me in setting the course and direction for Charter as
we strive to improve our operating metrics and financial
performance in the future. Steve Schumm has served the Company
in an executive capacity since 1998 and is completely familiar
with Charter's business and accounting functions, and he
understands the initiatives we are undertaking, both
operationally and financially.

"The re-audits of the Company's 2000 and 2001 financial
statements as well as the audit for 2002 will provide a clear
picture of Charter Communications financial position. This
picture will enhance both our ability and flexibility in moving
the company forward, particularly with respect to our balance
sheet.

"We are moving as rapidly as practicable to ensure that Charter
is on the right track. We intend to take the appropriate
corrective actions - both operationally and financially - as we
undertake strategic initiatives to capitalize on Charter's
sizable market share and industry-leading technology," Mr. Vogel
said.

Mr. Vogel also indicated that, at the direction of the Company's
Board of Directors, the Company will be instituting a rigorous
corporate compliance program. This program will include the
appointment of a corporate compliance officer, the establishment
of a compliance hotline, and the adoption of a comprehensive
expanded employee code of conduct. These measures are designed
to ensure that the Company's employees, from top-to-bottom, will
adhere to the highest standards.

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

                       *    *    *

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

    Rating Actions                       From             To

Charter Communications Inc.

* Convertible Senior Debt                B3             Caa2

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

* Senior Unsecured Issuer Rating         B3             Caa2

* Senior Implied Rating                  Ba3             B1

* Liquidity Rating - SGL-2 (unchanged);

Charter Communications Holdings, LLC

* Senior Debt                            B2              B3

Charter Communications Operating, LLC

* Senior Secured Bank Debt               Ba3             B1

CC VIII Operating, LLC

* Senior Secured Bank Debt               Ba3             B1

Falcon Cable Communications, LLC

* Senior Secured Bank Debt               Ba3             B1

CC VI Operating, LLC

* Senior Secured Bank Debt               Ba3             B1

CC V Holdings, LLC (formerly Avalon Cable LLC)

* Senior Unsecured Debt                     B2 (unchanged)

Renaissance Media Group LLC

* Senior Unsecured Debt                     B2 (unchanged)

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


CHARTER COMMS: S&P Cuts Rating Due to Lowered Revenue Guidance
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on cable television system operator Charter
Communications Inc., to 'B' from 'B+'.

The rating remains on CreditWatch with negative implications,
where it was placed on October 29, 2002, based on the company's
weak operating performance. The St. Louis, Missouri-based
company had about $18.5 billion total debt outstanding as of
September 30, 2002.

"The downgrade follows Charter's issuance of lower revenue and
cash flow guidance for the 2002 fourth quarter. We are concerned
that the competitive pressure that has eroded the company's
basic subscriber base could continue. Charter may be challenged
to achieve operating improvement needed to stabilize
deteriorating credit measures and generate break-even free cash
flow in 2003," said Standard & Poor's credit analyst Eric Geil.

The rating remains on CreditWatch primarily due to uncertainty
surrounding the ongoing federal grand jury subpoena into
Charter's subscriber accounting practices.

In an action related to the grand jury investigation, the
company terminated its chief financial officer. Charter also
terminated its chief operating officer, who had earlier been
placed on leave. Although management changes may likely benefit
the company in the longer term, they could be disruptive in the
near term.

Standard & Poor's is also concerned about the possibility of
public debt restructuring transactions, given depressed debt
trading levels. Completion of a subpar exchange offer could be
considered coercive to bondholders and tantamount to a default
on initial debt issue terms.

Charter lost about 86,000 basic subscribers in the 2002 third
quarter, which slowed revenue and operating cash flow growth to
12.6% and 8.7%, respectively. This performance was short of that
delivered by other cable operators.

Barring further, material operating setbacks, Standard & Poor's
will likely resolve the CreditWatch listing on completion of the
grand jury investigation.


CHASE MORTGAGE: Fitch Rates Class B-3 & B-4 Notes at Low-B Level
----------------------------------------------------------------
Chase Mortgage Finance Trust's $288.7 million mortgage pass-
through certificates, series 2002-S8 classes IA-1, IIA-1, IA-X,
IIA-X, IA-P, IIA-P and A-R (senior certificates) are rated 'AAA'
by Fitch Ratings. In addition, Fitch rates class M ($2.1
million) 'AA-', class B-1 ($0.6 million) 'A-', class B-2 ($0.6
million) 'BBB-', class B-3 ($0.3 million) 'BB-' and class B-4
($0.3 million) 'B'.

The 'AAA' rating on the senior certificates reflects the 1.40%
subordination provided by the 0.70% class M, the 0.20% class
B-1, the 0.20% class B-2, the 0.10% privately offered class B-3,
the 0.10% privately offered class B-4 and the 0.10% privately
offered class B-5 certificate.

Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults as well as bankruptcy, fraud and
special hazard losses in limited amounts. In addition, the
ratings also reflect the quality of the underlying mortgage
collateral, strength of the legal and financial structures and
the servicing capabilities of Chase Manhattan Mortgage
Corporation servicing capabilities (rated 'RPS1' by Fitch) as
primary servicer.

The mortgage loans have been divided into two pools of mortgage
loans. Pool I consists of conventional, fully amortizing, 15-
year fixed-rate mortgage loans secured by first liens on one- to
four-family residential properties. The mortgage pool has a
weighted average original loan-to-value ratio of 55.70% with a
weighted average mortgage rate of 5.842%. Loans originated under
a reduced loan documentation program account for approximately
4.3% of the pool, cash-out refinance loans 21.1%, condominium
properties are 4.4%, co-ops are 2.8%, and second homes are 4.1%.
The average loan balance is $529,056 and the loans are primarily
concentrated in California (39%), New York (11.3%), and Florida
(7.2%).

Pool II consists of conventional, fully amortizing, 30-year
fixed-rate mortgage loans secured by first liens on one- to
four-family residential properties. The mortgage pool has a
weighted average OLTV of 73.38% with a weighted average mortgage
rate of 7.243%. Loans originated under a reduced loan
documentation program account for approximately 10.6% of the
pool, cash-out refinance loans 16.2%, condominium properties are
0.8%, co-ops are 5.4%, and second homes are 4.9%. The average
loan balance is $369,258 and the loans are primarily
concentrated in California (23.6%), New York (17.4%), and
Georgia (8%).

Chase, a special purpose corporation, deposited the loans in the
trust, which issued the certificates. For federal income tax
purposes, an election will be made to treat the trust fund as
one or more real estate mortgage investment conduits.


COMDISCO: Completes Sale of French Units to Econocom for $70MM
--------------------------------------------------------------
Comdisco Holding Company, Inc., (OTC:CDCO) has received all
necessary regulatory approvals and has completed the sale of its
French leasing operations, Comdisco France S.A., and Promodata
SNC, to Belgium-based computer services provider Econocom Group
for approximately $70 million. Comdisco previously announced the
sale to Econocom on October 18, 2002.

The Company also announced that it will make an optional partial
redemption of $100 million principal amount of its 11%
Subordinated Secured Notes due 2005. The outstanding principal
amount of the Subordinated Secured Notes prior to this
redemption is $385 million. Comdisco previously redeemed $65
million and $200 million principal amount of the 11%
Subordinated Secured Notes on November 14, 2002 and December 23,
2002 respectively.

The $100 million of Subordinated Secured Notes will be redeemed
at a price equal to 100% of their principal amount plus accrued
and unpaid interest to the redemption date. The partial
redemption will occur on January 9, 2003.

Wells Fargo Bank will serve as the paying agent for this
redemption. A notice of the redemption containing information
required by the terms of the indenture governing the
Subordinated Secured Notes will be mailed to holders. This
notice will contain details of the place and manner of surrender
in order for holders to receive the partial redemption payment.

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


CONSECO FINANCE: S&P Drops Various Related Transactions to D
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
various corporate guaranteed B-2 classes of Conseco Finance
Corp.-related transactions to 'D'. In addition, the ratings on
all classes above B-2 from the transactions originated between
1995 and 2002 remain on CreditWatch with negative implications,
where they were placed on Oct. 21, 2002.

The lowered ratings reflect the unlikelihood that investors will
receive timely interest payments and the ultimate repayment of
their original principal investment. As reported in the December
2002 distribution reports, the subordinate B-2
certificateholders of the affected trusts experienced interest
shortfalls totaling $4,340,843. These interest shortfalls
represent rating defaults on the basis that these transactions
failed to pay timely interest to certificateholders.
Additionally, without the guarantee payments deposited by
Conseco, Standard & Poor's believes that B-2 interest shortfalls
will continue to be prevalent in the future for all of the
guaranteed certificates, given the adverse performance trends
displayed by the underlying pools of collateral that secure
these classes and the location of B-2 interest at the bottom of
the transaction payment priorities (after distributions of
senior principal). Furthermore, as a result of the high level of
losses experienced by the underlying collateral pools, some
subordinated certificates have been written down significantly.

Conseco announced on Dec. 2, 2002 that it failed to make
approximately $4.7 million in guarantee payments related to its
manufactured housing securitization trusts. The company also
announced that it intends to suspend all such guarantee payments
relating to manufactured housing trusts until it has undergone a
successful restructuring of its manufactured housing business.

Conseco filed for Chapter 11 bankruptcy protection on Dec. 18,
2002 and announced that it has reached an agreement in principle
with CFN Investment Holdings LLC to sell its assets and
operations. In addition, the company is currently seeking to
increase the servicing fee to 125 basis points (bps) from 50 bps
and to move the fee to a senior position (currently subordinate)
in the monthly transaction payment priority defined for each
manufactured housing transaction.

On Oct. 21, 2002, the ratings on all manufactured housing
classes (except the guaranteed B-2 classes, which were weak-
linked to the rating of Conseco as guarantor) issued between
1995 and 2002 were placed on CreditWatch with negative
implications following Conseco's announcement that it would
discontinue its conventional chattel paper financing business
and focus on its land-home business while continuing to support
chattel paper lending exclusively through the FHA Title I
program. Subsequently, on Nov. 25, 2002, the company announced
that it suspended all of its manufactured home financing and
assumption programs. Standard & Poor's lowered its long- and
short-term counterparty credit ratings on Conseco to 'D' on
Dec. 4, 2002.

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

                          Ratings Lowered

       Green Tree Financial Corp. Manufactured Housing Trust

                                       Rating
                Series    Class       To      From
                1996-3    B-2         D       CCC-
                1996-4    B-2         D       CCC-
                1996-5    B-2         D       CCC-
                1996-6    B-2         D       CCC-
                1996-8    B-2         D       CCC-
                1996-9    B-2         D       CCC-
                1997-6    B-2         D       CCC-
                1997-7    B-2         D       CCC-
                1997-8    B-2         D       CCC-
                1998-2    B-2         D       CCC-
                1998-3    B-2         D       CCC-
                1998-5    B-2         D       CCC-
                1998-6    B-2         D       CCC-
                1998-8    B-2         D       CCC-

            Manufactured Housing Senior/Sub Pass Thru Trust

                                       Rating
                Series    Class       To      From
                1999-1    B-2         D       CCC-
                1999-2    B-2         D       CCC-
                1999-3    B-2         D       CCC-
                1999-4    B-2         D       CCC-
                1999-5    B-2         D       CCC-

       Manufactured Housing Contract Senior/Sub Pass Thru Trust

                                       Rating
                Series    Class       To      From
                1999-6    B-2         D       CCC-

         Green Tree Recreational, Equipment & Consumer Trust

                                       Rating
                Series    Class       To      From
                1996-D    B           D       CCC-
                1997-D    Certs       D       CCC-
                1998-B    B-2         D       CCC-
                1998-C    B-2         D       CCC-
                1999-A    B-2         D       CCC-

Conseco Finance Tr III's 8.796% bonds due 2027 (CNC27USR1) are
trading at about 20 cents-on-the-dollar, DebtTraders says. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CNC27USR1for
real-time bond pricing.


CORVUS INVESTMENTS: Fitch Junks Ratings on Four Classes of Notes
----------------------------------------------------------------
Fitch Ratings has downgraded the following classes of notes
issued by Corvus Investments Ltd., Savannah II CDO Ltd., and
Taunton CDO Ltd.:

                     Corvus Investments Ltd.

           --$540,175,871 class A-1 notes to 'A+' from 'AAA';

           --$200,000,000 class A-2 notes to 'A+' from 'AAA';

           --$65,000,000 class B notes to 'BBB' from 'AA';

           --$60,000,000 class C notes to 'CCC+' from 'A';

           --$40,000,000 class D notes to 'CC' from 'BBB';

           --$25,000,000 class E notes to 'C' from 'BB';

           --$10,000,000 class F notes to 'C' from 'B'.

                     Savannah II CDO Ltd.

           --$295,198,218 class A notes to 'A-' from 'AAA';

           --$18,450,000 class B notes to 'BB+' from 'AA';

           --$22,500,000 class C notes to 'CCC' from 'BBB';

           --$6,750,000 class D notes to 'C' from 'BB';

           --$5,250,000 class E notes to 'C' from 'B'.

                      Taunton CDO Ltd.

           --$216,091,705 class A-1 notes to 'AA+' from 'AAA';

           --$78,578,802 class A-2 notes to 'AA+' from 'AAA';

           --$26,000,000 class B notes to 'A' from 'AA';

           --$24,000,000 class C notes to 'BB+' from 'A';

           --$16,000,000 class D notes to 'CCC+' from 'BBB';

           --$10,000,000 class E notes to 'C' from 'BB';

           --$4,000,000 class F notes to 'C' from 'B'.

All classes excluding Corvus Investments Ltd.'s class A-1 and
Taunton CDO Ltd.'s class A-1 and A-2 notes were previously
placed on Rating Watch Negative and are removed from Rating
Watch Negative.

The above referenced securities have been downgraded as a result
of credit deterioration, higher than expected default rates, and
lower recovery expectations.

As of their most recent trustee reports, each dated Nov. 30,
2002, Corvus Investments Ltd., was failing its E and F OC tests.
Savannah II CDO Ltd., was failing it's A/B, C, D, and E OC
tests. Taunton CDO Ltd., was failing its D, E, and F OC tests.
Corvus Investments Ltd., was failing its weighted average rating
factor test, with a WARF of 37.13 versus a trigger of 32.
Savannah II CDO Ltd., was failing its WARF test, with a WARF of
42.93 versus a trigger of 34, and Taunton CDO Ltd., was failing
its WARF test with a WARF of 38.70 versus a trigger of 32. Fitch
will continue to monitor these transactions and take additional
action if warranted.

All three transactions have exposure to under performing sectors
such as manufactured housing, aircraft securitizations and
collateralized debt obligations. As such, all three transactions
have exposure to distressed credits that were material in
Fitch's analysis. In the case of Corvus Investments Ltd., these
distressed credits include, but are not limited to, subordinate
class(es) of Dorset CDO Ltd., Tullas CDO Ltd., Savannah II CDO
Ltd., and Taunton CDO Ltd., (note: the latter two exposures are
subject to this rating action) as well as a mezzanine class of
both INA CBO 1999-1 Ltd. and Juniper CBO 2000-1 Ltd.. Savannah
II CDO Ltd.'s distressed credits include, but are not limited
to, a subordinate class of both Tullas CDO Ltd., and Triton CDO
IV Ltd.. Taunton CDO Ltd.'s distressed credits include, but are
not limited to, a mezzanine class of both INA CBO 1999-1 Ltd.,
and Juniper CBO 2000-1 Ltd..


COVANTA ENERGY: Aramark Taps Deloitte & Touche as Tax Auditors
--------------------------------------------------------------
Pursuant to that certain Ogden Food and Beverage Concessions &
Venue Management Acquisition Agreement dated as of March 29,
2000, Covanta sold the Ogden Entertainment, Inc. (now known as
Aramark Entertainment Inc.), stocks to Aramark Corporation.  The
Acquisition Agreement provided that certain tax liabilities
relating to the sold assets incurred prior to the closing of the
Acquisition Agreement on June 2, 2000 would be a continuing
obligation of Covanta.

The New York State Department of Taxation and Finance is
performing a sales tax audit of Aramark Entertainment in
connection with the Woodstock Festival 99.  The Canadian taxing
authority has performed an income tax audit of Aramark Canada
for the three-year period to the Closing Date.  Pursuant to the
Acquisition Agreement, Aramark asserts that the Debtors are
obligated to indemnify it for all costs, expenses and
liabilities arising from or in connection with, among other
things, the Tax Audits, including, without limitation,
settlement of Tax Audits, and legal, accounting and other
professional fees incurred in connection with the Tax Audits.
The Debtors reserve the right to dispute any claims Aramark
asserts with respect to the Acquisition Agreement.

On August 9, 2002, Aramark filed a proof of claim against the
Debtors' estate to assert an unliquidated claim for Tax Audit
Liabilities and other indemnified claims arising under the Sales
Agreement.

The Debtors and Aramark asserts that Deloitte & Touche is
familiar with the history of the Tax Audits.  Deloitte is
currently retained by the Debtors as their accountants.

Aramark seeks to retain Deloitte in connection with its defense
of the Tax Audits pursuant to the terms previously agreed in
between Aramark and Deloitte.  The Parties believe that
Aramark's retention of Deloitte may serve to reduce the
potential Tax Audit Liabilities, thus in the best interest of
the Debtors' estate.

Accordingly, by the parties' agreement, the Debtors and Aramark
stipulate:

1. Aramark reserves the right to amend its Proof of Claim, for
    among other reasons, to assert, solely as a prepetition
    general unsecured claim, any Tax Audit Liabilities which it
    may incur by virtue of the Tax Audits;

2. The Debtors reserve the right to object to any claims
    asserted by Aramark in the Proof of Claim or any amendments
    thereto;

3. The interest of Aramark and the Debtors are aligned in
    minimizing any potential Tax Audit Liabilities;

4. Given Deloitte's familiarity with the matters relating to the
    Tax Audits, the Deloitte Engagement is in the best interest
    of both the Debtors' estates and Aramark;

5. Aramark is responsible for paying Deloitte the fees and
    expenses incurred pursuant to the terms of the Deloitte
    Engagement; provided, however, that Aramark specifically
    reserves the right to amend its Proof of Claim to include any
    fees and expense as Tax Audit Liabilities, which claims may
    be filed solely as prepetition general unsecured claims; and
    the Debtors reserve the right to object to the claims; and

6. Solely in connection with the Tax Audits, the Debtors and
    Aramark consent and waive any objection which they may have
    to retention by the other of Deloitte; except that in the
    event there is a dispute between Aramark and the Debtors
    involving the Tax Audit Liabilities, Aramark consents and
    waives any objections which it may have to the Debtors'
    retention of Deloitte in connection with the dispute and the
    Debtors reserve the right to object to Aramark's retention
    of Deloitte in connection with the dispute.

Judge Blackshear put his stamp of approval on a Stipulation
memorializing the parties' agreement. (Covanta Bankruptcy News,
Issue No. 19; Bankruptcy Creditors' Service, Inc., 609/392-0900)


CTC COMMUNICATIONS: Committee Hires Brown Rudnick as Counsel
------------------------------------------------------------
The Official Committee of Unsecured Creditors of CTC
Communications Group, Inc., and its debtor-affiliates sought and
obtained approval from the U.S. Bankruptcy Court for the
District of Delaware to employ Brown Rudnick Berlack Israels LLP
as its counsel, nunc pro tunc to October 15, 2002.

The Committee selected Brown Rudnick because of the Firm's
extensive experience and knowledge of bankruptcy matters, and
believes that Brown Rudnick is well qualified to represent the
Committee in the Cases.

The professional services to be rendered by Brown Rudnick to the
Committee will include:

   a. assisting and advising the Committee in its discussions
      with the Debtors and other parties in interest regarding
      the overall administration of the Cases;

   b. representing the Committee at hearings to be held before
      this Court and communicating with the Committee regarding
      the matters heard and the issues raised as well as the
      decisions and considerations of this Court;

   c. assisting and advising the Committee in its examination and
      analysis of the conduct of the Debtors' affairs;

   d. reviewing and analyzing pleadings, orders, schedules and
      other documents filed and to be filed with this Court by
      interested parties in these cases; advising the Committee
      as to the necessity, propriety and impact of the foregoing
      upon the Cases; and consenting or objecting to pleadings or
      orders on behalf of the Committee, as appropriate;

   e. assisting the Committee in preparing such applications,
      motions, memoranda, objections, oppositions, proposed
      orders and other pleadings as may be required in support of
      positions taken by the Committee, including all trial
      preparation as may be necessary;

   f. conferring with the professionals retained by the Debtors
      and other parties in interest, as well as with such other
      professionals as may be selected and employed by the
      Committee;

   g. coordinating the receipt and dissemination of information
      prepared by and received from the Debtors and the Debtors'
      professionals, as well as such information as may be
      received from professionals engaged by the Committee or
      other parties in interest in the Cases;

   h. participating in such examinations of the Debtors and other
      witnesses as may be necessary in order to analyze and
      determine, among other things, the Debtors' assets and
      financial condition, whether the Debtors have made any
      avoidable transfers of property, or whether causes of
      action exist on behalf of the Debtors' estates and
      creditors;

   i. negotiating and formulating a plan of reorganization for
      the Debtors or other restructuring or sales of the Debtors'
      businesses and/or assets; and

   j. assisting the Committee generally in performing such other
      services as may be desirable in connection with or required
      for the discharge of the Committee's duties pursuant to
      section 1103 of the Bankruptcy Code.

Brown Rudnick will render its services on an hourly fee basis.
It is anticipated that the primary attorneys who will represent
the Committee are:

           William R. Baldiga     $525 per hour
           Anthony L. Gray        $425 per hour
           Todd A. Feinsmith      $425 per hour
           Regina C. Cheung       $285 per hour

Other BRBI attorneys and paralegals will from time to time
provide legal services on their current hourly rates::

           Attorneys      $120 to $600 per hour
           Paralegals     $100 to $210 per hour

CTC Communications Group, Inc., a source provider of voice,
data, and Internet Communications services to medium and larger
sized business customers, filed for chapter 11 protection on
October 3, 2002. Pauline K. Morgan, Esq., at Young, Conaway,
Stargatt & Taylor, 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.


CYNET INC: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Cynet Inc
         12777 Jones Road Suite 400
         Houston, Texas 77070

Bankruptcy Case No.: 02-44686

Type of Business: Provider of enhanced communications services.

Chapter 11 Petition Date: December 9, 2002

Court: Southern District of Texas (Houston)

Judge: Manuel D. Leal

Debtor's Counsel: Samuel C. Beale, Esq.
                   12777 Jones Road
                   Suite 400
                   Houston, Texas 77070-7700
                   Tel: 281-897-8317

U.S. Trustee: Ellen Maresh Hickman
               US Trustee
               515 Rusk Street
               Suite 3516
               Houston, Texas 77002
               Tel: 713-718-4650

Total Assets: $1,151,715

Total Debts: $13,485,838

Debtor's 20 Largest Unsecured Creditors:

Entity                                            Claim Amount
------                                            ------------
Thomas Kelly Software                                 $908,800
  Association
c/o Stanley E. Rauhut
195 South Belt Industrial Drive
Houston, Texas 77047

Reliance U.K.                                         $723,124

Northern Neck Outfitters, Inc.                        $500,000

Smith, Bennie                                         $500,000

Augustine Fund, LP                                    $450,000

AT&T                                                  $346,373
c/o Eric R. Benton
Lorance & Thompson
2900 North Loop West, #500
Houston, TX 77092

Chamberlain, Hrdlicka, White                          $312,342
1200 Smith Street, Suite 1400
Houston, TX 77002-4310

Southwestern Bell Telephone                           $267,043

Teligent                                              $239,276

Qwest Communications                                  $212,216

Global Crossing Telecom                               $207,930

Comsys Information Technology                         $186,877

CTI Industries, Inc.                                  $150,000

Digital Consulting & Software                         $108,971

Wen, Hubert                                           $105,000

Blue Cross Blue Shield                                 $87,996

Denmark House Investment Ltd.                          $77,000

Clearfax, Inc.                                         $76,000

Business Telecom, Inc.                                 $72,000

Cypress Fairbanks I.S.D.                               $69,934


DATA SYSTEMS: Falls Below Nasdaq Continued Listing Requirements
---------------------------------------------------------------
Data Systems & Software Inc., (Nasdaq NNM: DSSI) has received a
Nasdaq Staff Determination notifying the Company that it fails
to comply with the minimum stockholders' equity requirement of
$10 million for continued listing, as set forth in Marketplace
Rule 4450(a)(3), and that its common stock is, therefore,
subject to delisting from the Nasdaq National Market. The
Company has requested a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination.
According to Nasdaq procedures, the hearing date will be set, to
the extent practicable, within 45 days of the request, and DSSI
will continue to trade on the Nasdaq National Market pending the
Panel's decision.

DSSI currently meets all the requirements for listing on The
Nasdaq SmallCap Market and would transfer its listing to The
Nasdaq SmallCap Market if the Staff Determination is not
reversed by the Panel.

Data Systems & Software Inc., is a provider of software
consulting and development services, and is an authorized direct
seller and value added reseller of computer hardware. Through
its Comverge Technologies subsidiary, the Company provides
energy intelligence solutions to utilities.

                          *     *     *

                 Liquidity and Capital Resources

In its SEC Form 10-Q filed on November 14, 2002, the Company
stated:

"As of September 30, 2002 we had working capital of
approximately $2,359,000 including $2,107,000 in non-restricted
cash, cash equivalents and debt security investments.  Of the
total working capital, $462,000 was in our majority-owned
Israeli subsidiary dsIT and, due to Israeli tax and company law
constraints as well as the significant minority interest in
dsIT, such working capital is not available to finance US
activities. Net cash used in operating activities during
the third quarter of 2002 was $2,334,000 in addition to
$2,617,000 net cash used in the first half of this year.  The
primary factors for our net cash usage during the third quarter
of 2002, were (i) Comverge's additional investment in inventory
of $855,000 (bringing its total inventory to $3,074,000), (ii)
Comverge's loss for the period of $597,000 (iii) a reduction of
non-restricted cash, due to the deposit of $900,000 which
secured a deferred payment obligation in the financing of
Comverge's additional inventory purchases and (iv) the
$276,000 decrease in accounts payable and other liabilities.
These uses of cash were offset in part by a decrease of
$1,069,000 in our accounts receivable and other current asset
balances during the third quarter of 2002.

"As of October 31, 2002 our US operations had an aggregate of
approximately $1,900,000 in cash, cash equivalents and short-
term debt securities, reflecting a $2,000,000 decrease from the
balance as July 31, 2002. This decrease resulted from the
following cash payments by us: (i) making the October  payment
on account of the Laurus convertible debenture for $215,000 in
cash, (ii) a final payment of $193,000 pursuant to the
settlement agreement with Bounty Investors, (iii) a payment of
$650,000 for Comverge's settlement with its former main
contract manufacturer for inventory and accounts payable and (v)
$942,000 to fund other Comverge and corporate activities. During
this period our computer hardware and domestic software
consulting activity was close to breakeven, and consequently did
not provide any funds to support US corporate activity.  Since
October 31, 2002 we paid in cash to Laurus also the second
principal and interest payment of $215,000 under the convertible
debenture.

"Our liquidity and ability to continue as a going concern is
contingent on a number of factors:

      -- Need to achieve positive cash flow in computer  hardware
segment: In the last four quarters the computer hardware segment
operations have been breakeven, not providing any cash to
support US corporate activities. We believe this segment will
increase its sales significantly as a result of a couple of
large transactions already completed and others  currently
being negotiated.  As a result, the level of sales in the
computer hardware segment is expected to increase from an
average of $4,300,000 in the last four quarters to over
$7,000,000 in the fourth quarter and an average of more than
$6,000,000 per quarter in 2003. This increase in sales together
with reductions in overhead expenses in the segment are
expected to generate over $700,000 in cash flow in the fourth
quarter of this year and an average of $320,000 in each quarter
of 2003.

         Although these sales objectives reflect an increase of
almost 50% over average per quarter sales in the last four
quarters, we are reasonably confident that it will meet these
projections, as a substantial portion of the orders projected
for the fourth quarter of 2002 and the first quarter of 2003
have already been received.

      -- Need to implement additional reduction of corporate
expenses: Over the last four quarters, we have been successful
in reducing corporate overhead expenses by more than 20% from an
average of $846,000 per quarter in 2001 to $651,000 in the third
quarter of 2002. We achieved this decrease in costs primarily
by reducing salary expenses and professional fees, including a
10% cut in management salaries since August 2002, negotiation
of reduced legal billing rates and a cap on quarterly legal
expenses. In order to maintain sufficient liquidity for the
coming 12 months, we wish to reduce corporate  expenses by an
additional 10%, from the level in the third quarter of 2002, to
less than $600,000 per quarter.

      -- Need to minimize our investment in Comverge: Except for
the additional investment in raw material inventory noted above,
Comverge's operating cash flow continued to improve in the third
quarter of 2002. As projected in the past, we expect that
Comverge will be cash flow positive in the fourth quarter of
2002.  The expected improvement in operating cash flow in the
fourth quarter of this year results primarily from (i) increases
in sales from contracts in hand, resulting also from shipments
delayed from the third quarter and (ii) expected utilization  of
the raw material inventory purchased by Comverge in the second
and third quarters.  However, if Comverge is unable to reach an
agreement to amend the contract and shipments are as a result
suspended or the contract is terminated, sales in the fourth
quarter of 2002 would be significantly lower than currently
expected having a materially adverse impact on Comverge's cash
flow, financial condition and its operations in that quarter.

         Comverge is in the process of negotiating a $2,000,000
line of credit, secured by its accounts  receivables and
inventory, guaranteed by us. The line of credit, if obtained,
will provide temporary relief to Comverge's cash flow concerns
but will not solve comverge's longer term liquidity needs. In
addition, the amount available to Comverge under this  facility
would be negatively impacted if its customer suspends or
terminates its agreement.

          We have has not been  successful in attracting  outside
equity funding for Comverge to date, and the current state of
the capital markets is not favorable for raising such funds.
However, our long-term strategy remains to  establish
independent outside funding to finance its activities. There can
be no assurance that we or Comverge will be able to raise
additional capital or secure  alternative  financing or raise
amounts sufficient to meet the long-term needs of the business;
we are therefore not including proceeds of any such possible
financing in our current liquidity projections.

      -- Payments under the Laurus  Convertible Note: Since
September 30, 2002, we have made the first two principal
payments on the convertible note described in Note 3, in cash.
Unless cash flow improves substantially, the remaining payments
will be made by delivering shares of its common stock, thereby
conserving cash.  Payments using the Company's common stock,
however, would involve substantial dilution and could have a
negative impact on the price of our common stock."


DIAL CORP: Selling Argentina Business to Southern Cross Entity
--------------------------------------------------------------
The Dial Corporation (NYSE: DL) has reached an agreement to sell
its Argentina business to an entity designated by Southern Cross
Group, a private equity investor in Argentina. The transaction
is structured as a sale of the assets of Dial Argentina, S.A.,
which includes the stock it holds of its two subsidiaries,
Sulfargen, S.A., and The Dial Corporation San Juan, S.A. The
sale is subject to satisfaction of negotiated closing conditions
and receipt of approvals under Argentina's antitrust and bulk
transfer laws. The sale is expected to close late in the first
quarter or early in the second quarter of 2003.

The after-tax loss from this transaction in the fourth quarter
currently is expected to be in the range of $50.0 to $60.0
million. This non-cash loss includes the reversal of the $95.1
million currency translation adjustment that previously had been
recorded as a reduction in equity. In the first quarter of 2002,
the Company recorded an after-tax impairment charge of $43.3
million for the Argentina business as a result of adopting the
Financial Accounting Standards Board Statement No. 142,
"Goodwill and Other Intangible Assets." The transaction is
expected to yield positive cash flow from the sales proceeds of
$6.0 million and tax benefits of approximately $55.0 million.
Additionally, because Argentina's earnings are being
reclassified to a discontinued operation, estimated 2002
earnings per share from continuing operations before special
items is expected to decline by $0.04 to $1.18 (diluted). The
Company's Argentina business lost $0.03 per share (diluted) in
2001 excluding special items. A reconciliation of the foregoing
pro forma earnings per share numbers to earnings per share under
generally accepted accounting principles for 2001 and 2002 is
attached.

"Although our in-country business remained relatively strong,
Argentina is not a good fit for us. Our business is primarily a
North American business and Argentina has been a management
distraction and challenge," said Herbert M. Baum, Dial's
chairman, president and CEO.

Sales in Argentina, on a dollar basis, declined from $63.0
million in the first nine months of 2001 to $39.4 million in the
same period in 2002, largely because of the devaluation of the
peso.

The Dial Corporation entered the Argentina market in 1997 when
it purchased personal care products maker Nuevo Federal, S.A.
and several Procter & Gamble soap brands. The Company also
purchased the Plusbelle hair care brand from Revlon in 2000. The
sale is consistent with the strategy Baum announced shortly
after his selection as CEO in 2000 to fix or jettison businesses
that were not performing up to expectations.

The Dial Corporation, headquartered in Scottsdale, Ariz., is one
of America's leading manufacturers of consumer products,
including Dial soaps, Purex laundry detergents, Renuzit air
fresheners and Armour Star canned meats. Dial products have been
in the American marketplace for more than 100 years. For more
information about The Dial Corporation, visit the Company's Web
site at http://www.dialcorp.com

                          *    *    *

As previously reported, The Dial Corp.'s Sales have steadily
declined since 1999 and losses have followed.  At June 29, 2002,
this billion-dollar company's balance sheet showed $72 million
in total shareholder equity.  Standard & Poor's rates the
Company's $250,000,000 of 7% Notes due August 15, 2006, and
$250,000,000 of 6-1/2% Notes sue September 15, 2008, in low-B
territory.


ECHOSTAR COMMS: Completes Repurchase of Ser. D Conv. Preferreds
---------------------------------------------------------------
EchoStar Communications Corporation (Nasdaq:DISH) has completed
the previously announced purchase of Vivendi Universal's stake
in EchoStar in accordance with terms previously announced on
Dec. 18, 2002.

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

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


ENCOMPASS SERVICES: Joe Ivey Resigns as President and CEO
---------------------------------------------------------
Encompass Services Corporation (Pink Sheets: ESVN) announced
that Joe Ivey, President and Chief Executive Officer, has
resigned from the Company to pursue other interests.

Hank Holland, Chief Operating Officer, will assume additional
operational responsibilities as interim President of Encompass.

"On behalf of the Board of Directors, I would like to thank Joe
for the dedication and commitment that he has shown to
Encompass," said Michael Gries, Chairman and Chief Restructuring
Officer. "Joe provided his leadership at a very critical time
for this Company, and we sincerely appreciate all of his
efforts."

Mr. Gries added, "Hank's experience with Encompass will be
instrumental to me in managing the operational side of the
business as we complete both the divestiture of non-core
operations and continue to move forward with completing the
restructuring plan."

"We expect to announce our plan of reorganization within the
next 30 days. We have a core group of businesses with a long
history of profitability and remain confident in their future
prospects."

Encompass Services Corporation is one of the nation's largest
providers of facilities systems and services. Encompass provides
electrical technologies, mechanical services and cleaning
systems to commercial, industrial and residential customers
nationwide. Additional information and press releases about
Encompass are available on the Company's Web site at
http://www.encompass.com


ENCOMPASS SERVICES: Seeks Injunction Against Utility Companies
--------------------------------------------------------------
Encompass Services Corporation and its debtor-affiliates seek to
prohibit various utility providers from altering, refusing or
disconnecting their service pending further order of the Court.
The Debtors need telephone, electric, water and similar services
for the ongoing operation of their businesses.  If a utility
company is permitted to terminate its services, the Debtors
point out that their operations will be severely impacted,
resulting in a loss of sales and profits.

In view of their Chapter 11 filing, the Debtors note that these
utilities will be asking for adequate assurance of future
payments through deposits or securities in exchange for their
uninterrupted services.  To this end, the Debtors ask the Court
to declare that the utility companies already have "adequate
assurance of payment" within the meaning of Section 366 of the
Bankruptcy Code, without the need for payment of additional
deposits or security.

According to Lydia T. Protopapas, Esq., at Weil Gotshal & Manges
LLP, the Debtors will provide adequate assurance to these
providers in the form of administrative expense payment of their
Chapter 11 estates pursuant to Sections 503(b) and 507(a)(1) of
the Bankruptcy Code.  Notwithstanding, a utility may seek
additional assurance for itself.  If the Debtors find the
request for additional assurance reasonable, Ms. Protopapas says
the Debtors will file a Motion for Determination of Adequate
Assurance of Payment with the Court.  Any utility requesting
additional assurance will be prohibited from discontinuing,
altering or refusing service to the Debtors and will be deemed
to have adequate assurance of payment unless and until the Court
issues a final order to the contrary in connection with a
Determination Hearing. (Encompass Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


ENRON CORP: AEGIS Wants ENA's Prompt Decision on Contract
---------------------------------------------------------
Associated Electric & Gas Insurance Services Ltd., asks the
Court to compel Enron North America Corp., to decide whether to
assume or reject the ISDA Heating Degree Day Floor Policy it
entered with AEGIS on October 1, 1999.

Chester B. Solomon, Esq., at Salomon Green & Ostrow PC, in New
York, relates that the ISDA Policy will expire on September 30,
2004.  The ISDA Policy was designed to allow AEGIS to transfer
some of the risk it assumed under a heating degree day weather
insurance policy.  Under the ISDA Policy, AEGIS is required to
pay ENA $1,282,500 on October 14, 2002 and October 14, 2003.

Mr. Solomon informs the Court that ENA's maximum exposure is
$10,800,000 annually.  Hence, AEGIS believes that it is unlikely
that ENA would want to assume the ISDA Policy risk.

Some or all of the assets which the ISDA Policy was designed to
protect involved Enron's Wholesale Services, a business that
encompassed the marketing of, and making of markets for, natural
gas and electricity, as well as any swap, cap, floor, collar,
futures contract, forward contract, option and any other
derivative instrument contract or arrangement based on natural
gas and electricity, in the United States and related risk
management and financial services -- ENA Wholesale Business.

Mr. Solomon notes that the ENA Wholesale Business was sold to
UBS PaineWebber.  However, the sale was silent on its effect on
the ISDA Policy.  AEGIS has not been given any notice of a
proposed assignment of the ISDA Policy.

Accordingly, Mr. Solomon contends, the Debtors should be
compelled to decide whether to assume or reject the ISDA Policy
because:

     -- Section 365 of the Bankruptcy Code allows a debtor to
        assume or reject any executory contract;

     -- the potential risk to the Debtors under the ISDA Policy
        is quite extensive given the high premium;

     -- dragging the decision period will impose continued
        financial burden on AEGIS; and

     -- the ISDA Policy does not appear to be necessary for an
        effective reorganization.

In addition, AEGIS asks the Court to vacate the automatic stay
to the extent necessary or appropriate so that AEGIS may wind up
the policies. (Enron Bankruptcy News, Issue No. 51; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

DebtTraders reports that Enron Corp.'s 9.875% bonds due 2003
(ENRN03USR3) 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: Environmental Claimants Want Committee Appointment
---------------------------------------------------------------
Pursuant to Section 1102 of the Bankruptcy Code and Rules 2020
and 9014 of the Federal Rules of Bankruptcy Procedure, the
Environmental Claimants -- Darr Angell, Ray Anthony, J.R. Byrd,
C&C Land Farm Inc., Jimmy B. and Shryl Cooper, Jimmie T. and
Betty T. Cooper, D.K. Boyd Oil & Gs Co., Robert Durham, buster
Goff, Christie Reynolds, Robert Rogers and G.P. Sims and Aline
Sims -- ask the Court to direct the U.S. Trustee to form a
Creditors Committee of Unsecured Environmental Claimants in the
chapter 11 cases involving EOTT Energy Partners, L.P., and
debtor-affiliates.  The Committee will consist of persons and
entities that have claims against the Debtors generally stemming
from environmental contamination and damages to claimant's real
and personal property as a result of the Debtors' ownership and
operation of oil transmission and gathering pipelines.

Louis Puccini, Jr., Esq., at Puccini & Meagle PA, in
Albuquerque, New Mexico, relates that the Environmental
Claimants are "nonconsensual claimants" in that they did not
agree to extend credit to the Debtors.  Due to the unique
situation of the environmental claimants, they informally asked
the U.S. Trustee to appoint a creditors' committee consisting of
environmental claimants only.

On November 22, 2002, in open court, the U.S. Trustee promised
to form an environmental claimants creditors' committee.
However, on November 25th, at the commencement of the telephone
conference with three potential members of that committee, the
U.S. Trustee stated that after a discussion with counsel for the
existing Unsecured Creditors' Committee, the U.S. Trustee had
changed its decision and decided not to form a new environmental
creditors' committee but allowed that one environmental claimant
could join the existing Unsecured Creditors' Committee.

Mr. Puccini explains that the Environmental Claimants have
prepetition, ongoing and postpetition monetary and non-monetary
claims.  All of the Environmental Claimants, not just the
Movants, may have claims on environmental insurance policies and
bonds, against co-obligors and others, like servicing companies.
No other creditors have similar claims.

Moreover, Mr. Puccini continues, the Environmental Claimants
constitute a significant number of claimants, which would have
monetary claims amounting to tens of millions of dollars and are
accruing postpetition as the damages are ongoing.  However, Mr.
Puccini notes, the Debtors' Plan has made no separate provision
for environmental claimants.  There is also no environmental
clean-up trust proposal under the Debtors' Plan.

The Debtors have informed the Environmental Claimants that the
insurance policy limits may have already been reached or will
soon be reached.  Thus, Mr. Puccini fears, there may be no
insurance coverage left for these claimants.  But Mr. Puccini
points out that the insurance policies may obligate the
insurance companies to provide a defense to the claims.  Mr.
Puccini notes that the Debtors have not obtained any additional
environmental insurance coverage.

Accordingly, Mr. Puccini contends, the creation of a separate
environmental creditors' committee is warranted because:

     (a) the existing committee has provided no tangible benefit
         to environmental claimants and none is expected;

     (b) the majority of the members of the Unsecured Creditors'
         Committee participated in negotiating the Enron
         Settlement, which made no provision for environmental
         claims;

     (c) the existing Unsecured Creditors' Committee filed no
         objection to the Disclosure Statement despite the fact
         that the Debtors have not provided adequate information
         to environmental claimants to make an informed decision
         why they should accept less than full payment;

     (d) the unique nature of environmental claims being
         unliquidated may disenfranchise them from voting on the
         Plan;

     (e) the existing committee membership has interests to
         secure future payment and equity ownership from the
         reorganized Debtors, which are inimical to the Debtors
         fulfilling their obligations for remediation and payment
         of environmental claims against a reorganized Debtor;

     (f) the existing committee has found the Reorganization Plan
         acceptable, but it is not to the Environmental
         Claimants;

     (g) the Plan seems to provide for substantial consolidation
         of the Debtors and the Environmental Claimants failed to
         determine whether their interests will be adversely
         affected by maintaining their separate claims against
         each separate Debtor or not;

     (h) third party proceeds, if any, will not be used for
         remediation or to pay environmental damages but will be
         a "windfall" to the new reorganized Debtors and the
         equity holders, principally, the bondholders;

     (i) the Debtors have not identified a procedure to liquidate
         environmental claims for voting or other purposes; and

     (j) the existing committee is not representative of the
         interests of environmental claimants.

"The Environmental Claimants should be allowed every opportunity
and consideration in protecting their legal rights, since their
claims are more than mere monetary claims but involve ongoing
contamination of their real and personal property, human and
livestock health hazards, substantial loss of value of their
real estate, the threat of further contamination of public and
private lands and water sources, safety hazards, and the
apparent refusal of the Debtors to properly maintain and repair
its pipeline system, which will inevitably result in even more
damage claims," Mr. Puccini emphasizes.  Moreover, the high cost
of remediation could jeopardize some of the environmental
claimants' own financial stability and could ultimately force
them into insolvency proceedings as well.  Inevitably, "the
government will require these contaminated sites to be cleaned-
up, and the significant cost could be borne by the owners or
governmental agencies at the taxpayers' expense as the result of
the Debtors' failure and refusal to do so," Mr. Puccini says.
(EOTT Energy Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


EUROTECH LTD: AMEX Delists Shares Effective December 24, 2002
-------------------------------------------------------------
Eurotech, Ltd., (AMEX:EUO) announced that, effective as of the
close of trading Tuesday, December 24, 2002, the company's
common stock had been delisted from trading on the American
Stock Exchange and would be quoted on the Pink Sheets Electronic
Quotation Service.

Information regarding such service is available at
http://www.pinksheets.com

Eurotech's common stock will be listed on the Pink Sheets
pending Eurotech's continued pursuit of obtaining approval by
the OTC Bulletin Board for the quotation of the company's common
stock on the OTC BB.

The OTC BB has indicated to the company that approval of the
company's common stock for trading on the OTC BB will only occur
following a review by the OTC BB of Eurotech's filings with the
Securities and Exchange Commission and certain other information
which the OTC BB has requested supplementary.

No assurances can be given that the OTC BB will be satisfied
with such information or that the OTC BB will approve Eurotech's
common stock for trading on the OTC BB.

On December 12, 2002, Eurotech announced that the company had
received a notice of delisting from Amex and that Eurotech's
board of directors had voted not to appeal the Amex's decision
to delist the company's common stock and to commence efforts to
cause the company's common stock to trade on the OTC BB.

Eurotech is a corporate asset manager seeking to acquire,
integrate and optimize a diversified portfolio of manufacturing
and service companies in various markets. Our mission is to
build value in our emerging technologies and in the companies we
acquire and own, providing each with the resources it needs to
realize its strategic business potential.

Eurotech's emerging technology business segment develops and
markets chemical and electronic technologies designed for use in
Homeland and Environmental Security. The Homeland Security
segment of Eurotech's business is conducted through its 80%
owned subsidiary, Markland Technologies, Inc. (OTCBB:MKLD).

Eurotech's portfolio of technologically advanced products
includes: (i) proprietary materials created to specifically
solve the serious problems of how nuclear and other hazardous
wastes are cost effectively contained; (ii) advanced performance
materials for use in industrial products such as coatings and
paints; (iii) automatic detection of explosives and illicit
materials though its Markland Technologies subsidiary, and; (iv)
cryptographic systems for secure communications, all of which
can be used in Homeland and Environmental Security.

At September 30, 2002, Eurotech's balance sheet shows that total
current liabilities exceeded total current assets by about $2
million.


FAO INC: Reaches Standstill Agreement with Bank Lenders
-------------------------------------------------------
FAO, Inc. (Nasdaq: FAOO), a leader in children's specialty
retailing, has reached a standstill agreement with Wells Fargo
Retail Finance LLC, the agent for the syndicate of banks that
form FAO Inc.'s bank lending group. Under the terms of the
standstill agreement, FAO's bank group, has agreed not to take
any action relating to the Company's credit facility through
January 10, 2003; however, the parties have the right to
terminate the agreement upon three days notice unless earlier
terminated in accordance with its terms.

FAO, which last week announced that it was facing a potential
liquidity crisis, said that the standstill agreement would give
the Company an opportunity to work with its bank lenders and its
trade suppliers to improve its liquidity and its prospects for
long term success.

As part of its initiatives to continue to improve the business
and transform FAO into a profitable company, the Company also
announced that it will close as many as 70 underperforming
stores. The Company anticipates the stores will close by the end
of March. Approximately 55 of the 70 anticipated store closings
are Zany Brainy stores. The Company stated that more than 30 of
the 55 locations were opened in 1999 or 2000 just prior to the
Company's acquisition of Zany Brainy out of bankruptcy in
September 2001. In the current retail environment, these
locations have simply not developed to an economically viable
level.

FAO, Inc., (formerly The Right Start, Inc.) owns a family of
high quality, developmental, educational and care brands for
infants, toddlers and children and is a leader in children's
specialty retailing. FAO, Inc., owns and operates the renowned
children's toy retailer FAO Schwarz; The Right Start, the
leading specialty retailer of developmental, educational and
care products for infants and toddlers; and Zany Brainy, the
leading retailer of development toys and educational products
for kids.

FAO, Inc., assumed its current form in January 2002 and operates
a total of 253 retail stores nationwide. The Right Start brand
originated in 1985 through the creation of the Right Start
Catalog and is currently used in 61 retail stores nationwide. In
September 2001, the Company purchased assets of Zany Brainy,
Inc., which began business in 1991, and currently operates 169
Zany Brainy brand stores throughout the country. In January the
Company purchased the FAO Schwarz brand, which originated 140
years ago in 1862, and certain related assets and currently
operates 23 FAO stores nationwide.


FEDERAL-MOGUL: Future Representative Hires Bederson & Company
-------------------------------------------------------------
Eric D. Green, Esq., the Legal Representative for Future
Asbestos-Related Claimants of Federal-Mogul Corporation and
debtor-affiliates, asks the Court for authority to hire Bederson
& Company, LLP to replace Zolfo Cooper, LLC as his bankruptcy
consultants and special financial advisors, nunc pro tunc to
December 13, 2002.

After the sale of Zolfo Cooper to Kroll, Inc., Mr. Green filed
an application with the Court to re-employ the advisory firm,
this time under the name Kroll Zolfo Cooper.  But about a month
later, Mr. Green decided to abandon that and turn to another
bankruptcy advisory firm.

James L. Patton, Esq., at Young Conaway Stargatt & Taylor, LLP,
in Wilmington, Delaware, informs the Court that the Future
Representative has selected Bederson because of its experience
in chapter 11 matters and its exemplary qualifications to
perform the services required in the Debtors' cases.  Bederson
specializes in assisting and advising debtors, creditors,
investors and court-appointed officials in bankruptcy
proceedings and out-of-court workouts.  The firm has been
retained in numerous nationally prominent bankruptcy proceedings
including the chapter 11 cases of G-1 Holdings, Inc.; Twin
County Grocers; Yugo America, Inc.; Pepe Auto Dealerships;
Miller and Hartman; J.P. Fyfe, Inc.; Ames Department Stores; and
Phar-Mor.

Mr. Patton relates that the Future Representative are presently
engaged in lengthy and detailed negotiations with the Debtors,
the Official Committee of Unsecured Creditors, the Official
Committee of Asbestos Claimants, the Debtors' prepetition
lenders, and the Official Committee of Equity Security Holders
over the contours of a global settlement that may form the basis
of a consensual plan of reorganization.  The settlement
negotiations are now at a critical juncture.

In view of that, Mr. Patton asserts that the services that
Bederson will provide will be invaluable to the Future
Representative during the course of the negotiations.  The
Future Representative anticipates Bederson to provide these
services:

   (a) Monitor the Debtors' cash flow and operating performance,
       including:

         (i) comparing actual financial and operating results to
             plans;

        (ii) evaluating the adequacy of financial and operating
             controls;

       (iii) tracking the status of the Debtors' and their
             professionals' progress relative to developing and
             implementing programs like the preparation of a
             business plan, identifying and disposing of
             non-productive assets, and other activities;

        (iv) preparing periodic presentations to the Future
             Representative summarizing findings and observations
             resulting from the firm's monitoring activities;

   (b) Analyze and comment on the operating and cash flow
       projections, business plans, operating results, financial
       statements, other documents and information provided by
       the Debtors and their professionals, and other information
       and data pursuant to the Future Representative's request;

   (c) Perform an enterprise valuation or analyze any evaluations
       of the Debtors' estate or estates which are pertinent to
       the Future Asbestos-Related Claimants;

   (d) Advise the Future Representative in connection with and in
       preparation for meetings with the Debtors, other
       constituencies and their respective professionals;

   (e) Prepare for and attend meetings with the Future
       Representative;

   (f) Analyze claims and perform investigations of potential
       preferential transfers, fraudulent conveyances, related-
       party transactions and other transactions as the Future
       Representative may request;

   (g) Analyze and advise the Future Representative about any
       reorganization plan proposed by the Debtors, the
       underlying business plan, including the related
       assumptions and rationale, and the related disclosure
       statement; and

   (h) Provide other services as the Futures Representative may
       request.

The Future Representative proposes to compensate Bederson for
its services in accordance with the firm's standard hourly rates
plus reimbursement of actual, necessary expenses.  The
professionals that will primarily be involved in these cases and
their hourly rates are:

                 Professional               Rate
                 ------------               ----
                 Edward P. Bond             $350
                 Timothy J. King             300
                 Matthew Schwartz            275
                 P. Dermot O'Neill           275

From time to time, Bederson may also tap the assistance of its
other professionals.  The general billing rates for other
Bederson professionals are:

                 Professional               Rate
                 ------------               ----
                 Edward P. Bond             $350

                 Partners                $275 - 350
                 Managers                    185
                 Senior Accountants          170
                 Semi-Senior Accountants     145
                 Staff Associates            110
                 Paraprofessionals         60 -85

Edward P. Bond, a partner at Bederson, attests that his firm is
not related to or connected with and neither holds nor
represents any interest adverse to the Debtors, their respective
estates, their creditors or any other parties-in-interest in
these cases. Bederson is a "disinterested person," as that term
is defined in Section 101(14) of the Bankruptcy Code. (Federal-
Mogul Bankruptcy News, Issue No. 28; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

Federal-Mogul Corp.'s 8.80% bonds due 2007 (FMO07USR1) are
trading at about 15 cents-on-the-dollar, DebtTraders reports.
See http://www.debttraders.com/price.cfm?dt_sec_ticker=FMO07USR1
for real-time bond pricing.


GENESEE CORP: Files Prelim. Proxy Statement for Reverse Split
-------------------------------------------------------------
Genesee Corporation (Nasdaq: GENBB) has filed with the
Securities and Exchange Commission a preliminary proxy statement
for a proposed 1 for 500 reverse split of the Corporation's
Class A and Class B common stock. The reverse stock split is
intended to reduce the number of shareholders of Class B common
stock to less than three hundred, which would allow the
Corporation to terminate its status as a reporting company under
the Securities Exchange Act of 1934. Termination of reporting
company status will allow the Corporation to avoid the
administrative costs and operating expense associated with being
a public company as the Corporation winds up its affairs under
the plan of liquidation and dissolution adopted by shareholders
in October 2000.

Under the terms of the preliminary proxy statement, the
Corporation would pay cash to shareholders who own less than 500
shares of Class A or Class B common stock in lieu of issuing
them fractional shares. The Corporation currently expects to pay
$8.60 per share on a pre-split basis for each share of Class A
and Class B common stock repurchased in lieu of issuance of
fractional shares. This amount is based on a determination of
the fair value of the Corporation's Class A and Class B common
stock as of December 13, 2002 prepared by an independent
valuation expert. This amount differs from the net assets in
liquidation per share of $9.10 reported by the Corporation as of
October 26, 2002 under SEC rules and generally accepted
accounting principles governing the liquidation basis of
accounting utilized by the Corporation. The valuation analysis
and determination at fair value per share will be updated prior
to the proxy solicitation, which may result in adjustment of the
amount payable to shareholders in lieu of fractional shares.

The Corporation currently expects to complete the reverse stock
split and repurchase of stock in lieu of issuance of fractional
shares in the fourth quarter of its fiscal year ending May 3,
2003.


GENUITY INC: Asset Sale to Level 3 Earns Federal Antitrust Nod
--------------------------------------------------------------
Genuity Inc., announced that the waiting period required under
the Hart-Scott-Rodino Antitrust Improvement Act in connection
with Level 3's (Nasdaq:LVLT) proposed acquisition of Genuity's
assets has expired. The expiration of the 15-day review period
means that the proposed transaction satisfies antitrust
requirements, and that the Federal Trade Commission and the U.S.
Department of Justice determined that they did not need to issue
a request for additional information in connection with the
transaction.

"[Tues]day's announcement is a significant milestone as we
continue to make progress toward the completion of Level 3's
acquisition," said Ira Parker, Genuity's executive vice
president and general counsel. "Upon the closing of this
transaction, we will be a part of a stronger, more financially
stable company, which will continue to provide a high level of
service to our enterprise and service provider customers."

On November 27, 2002, Genuity and Level 3 announced that the two
companies reached a definitive agreement in which Level 3 will
acquire substantially all of Genuity's assets and operations for
$242 million, subject to adjustments, and assume a significant
portion of Genuity's existing long-term operating agreements. To
facilitate the transaction, Genuity filed voluntary petitions
for reorganization under Chapter 11 of the Bankruptcy Code.

Genuity and Level 3 anticipate that the acquisition will be
completed in the first quarter of 2003, pending approval of the
bankruptcy court and certain government regulatory agencies.

Genuity (OTCBB:GENUQ) is a leading provider of enterprise IP
networking services. The company combines its Tier 1 network
with a full portfolio of managed Internet services, including
dedicated and broadband access, Internet security, Voice over IP
(VoIP), and Web hosting to provide converged voice and data
solutions. With annual revenues of more than $1 billion, Genuity
is a global company with offices and operations throughout the
U.S., Europe, Asia and Latin America. Additional information
about Genuity can be found at http://www.genuity.com

Based in Broomfield, Colo., Level 3 is an international
communications and information services company. The company
offers a wide range of communications services over its 20,000
mile broadband fiber optic network including Internet Protocol
services, broadband transport, colocation services, and patented
Softswitch-based managed modem and voice services. The company
offers information services through its wholly-owned
subsidiaries, (i)Structure and Software Spectrum. (i)Structure
provides managed IT infrastructure services and enables
businesses to outsource costly IT operations. Software Spectrum
is a global business-to-business software services provider
specializing in enterprise software management, licensing and
support.


GENUITY INC: Brings-In Morrison & Foerster as Special Counsel
-------------------------------------------------------------
Genuity Inc., and its debtor-affiliates ask the Court for
authority to employ and retain Morrison & Foerster LLP, as of
the Petition Date, to represent them as Special Counsel in their
Chapter 11 cases.

Sally McDonald Henry, Esq., at Skadden Arps Slate Meagher &
Flom, in New York, explains that the Debtors chose Morrison &
Foerster as their Special Counsel because of the firm's
prepetition experience with and knowledge of the Debtors and
their businesses, as well as its experience and knowledge in the
fields of:

     -- labor law;

     -- communications regulation, litigation and transactional
        work; and

     -- bankruptcy law, as applied to various creditor-side
        matters on the Debtors' behalf.

The Debtors assert that continued representation of the Debtors
by Morrison & Foerster is critical to the success of the
Debtors' reorganization because Morrison & Foerster is uniquely
familiar with the Debtors' business and legal affairs.

Since June 2000, Ms. Henry states that Morrison & Foerster has
performed extensive legal work for the Debtors in connection
with certain regulatory, transactional, general litigation and
creditor-side bankruptcy matters.  As a result of representing
the Debtors on these matters, Morrison & Foerster has acquired
extensive knowledge of the Debtors and their businesses.

Subject to further order of this Court, Morrison & Foerster will
be required to render various services to the Debtors including:

   A. Regulatory Matters: Specifically, Morrison & Foerster is
      representing the Debtors, and has in the past represented
      the Debtors as federal, state and international regulatory
      counsel concerning communications regulation compliance and
      regulatory strategy associated with the Debtors':

      -- wholesale and retail communications products and
         services;

      -- contemplated commercial transactions; and

      -- corporate structure.

   B. Business and Dispute Resolution Matters: Morrison &
      Foerster is representing the Debtors, or has in the past
      represented the Debtors, in the negotiation and drafting of
      numerous purchase agreements with communications vendors
      including AT&T Corp., WorldCom, Inc., Verizon Corporation
      and others.  Pursuant to each vendor agreement, the Debtors
      purchase communications services, which comprise the
      underlying components of the Debtors' own retail and
      wholesale communications products and services.  This work
      includes providing legal counsel to Debtors' Vendor
      Management Division regarding the numerous vendor
      contracts, executed or under negotiation, as part of the
      day-to-day operations and ensuring conformance with
      Debtors' provisioning, technical and other business
      requirements.  Morrison & Foerster also provides the
      Debtors with advice and representation with respect to
      their potential claims, liabilities and obligations
      associated with Debtors' vendors, customers and other
      third-parties.  Specifically, Morrison & Foerster provides
      litigation and dispute resolution support and
      recommendations concerning:

      -- the Debtors' claims against third-parties for damages to
         the fiber optic network and other assets of Debtors;

      -- the Debtors' disputes with respect to the quality of
         services they receive from their communications services
         vendors;

      -- the Debtors' disputes associated with the
         appropriateness and accuracy of billing by their
         communications services vendors; and

      -- the Debtors' potential claims, liabilities and
         obligations in the context of various other contractual
         relationships.

   C. Creditor-Side Bankruptcy Matters: Morrison & Foerster is
      representing Debtors in numerous "creditor-side" matters,
      i.e., insolvency and bankruptcy cases where one or more of
      the Debtors:

      -- is or was a provider of services to the debtor;

      -- acquired an indefeasible right of use in
         telecommunications fibers from the debtor;

      -- is a party to an executory contract or unexpired lease
         with the debtor; and

      -- is a creditor of the debtor.

      Certain pending Creditor- Side Matters include:

        a. Metromedia Fiber Network, Inc.;

        b. WorldCom, Inc.;

        c. Teleglobe Communications Corporation;

        d. CTC Communications Corp.; and

        e. e.spire Communications, Inc.

      The services rendered to Debtors by Morrison & Foerster in
      these matters include legal counsel regarding the Debtors'
      rights as a creditor, including:

      -- adequate assurance under Bankruptcy Code Section 366;

      -- relief from the automatic stay of Section 362 to
         terminate contracts or assert setoff rights;

      -- cure and assumption under Bankruptcy Code Section 365;

      -- rights in connection with plan confirmations under
         Chapter 11 and liquidations under Chapter 7 of the
         Bankruptcy Code; and

      -- otherwise advising the Debtor with respect to protecting
         and preserving its legal, economic and other interests;

   D. Labor Matters: Morrison & Foerster is representing the
      Debtors, and has in the past represented the Debtors, in
      various employment-related litigation matters.
      Additionally, Morrison & Foerster advises the Debtors from
      time to time on labor law issues including employment
      wages, commission payments and overtime questions.

Morrison Partner Cheryl A. Tritt assures the Court that the
members, counsel and associates of the Firm do not hold or
represent any interest adverse to the Debtors' estates.
However, Morrison & Foerster has represented various entities in
matters unrelated to these Chapter 11 proceedings.

For professional services, Morrison & Foerster's fees are based
in part on its guideline hourly rates, which are periodically
adjusted.  Morrison & Foerster will be providing professional
services to the Debtors under its ordinary rate schedules, which
include separate rates for certain professional staff and
clerical personnel who record time spent working on matters for
Debtors.  Presently, Morrison & Foerster's rates range from:

     Attorneys                                       $215 - 675
     Legal assistants and other professional staff     80 - 210

The attorneys that will be primarily representing the Debtors
pursuant to the engagement are and their corresponding hourly
rates are:

              Cheryl Tritt                  $495
              Kenneth W. Irvin               475
              Steven M. Kaufmann             435
              Scott Silverman                450

On October 22, 2002, Ms. Tritt informs the Court, the Debtors
paid Morrison & Foerster a $200,000 retainer in connection with
defending it and several co-defendants in a pending action by a
former employee alleging claims for unpaid commissions and
wrongful discharge.  Throughout the time that Morrison &
Foerster has been providing legal services to the Debtors, the
Firm submitted invoices to the Debtors on a regular, periodic
basis, for professional fees and expenses, and the Debtors paid
these invoices in the ordinary course of business.  Since
November 24, 2001, the Debtors have paid $1,863,095.22 to
Morrison & Foerster for professional fees and expenses through
November 25, 2002. Pursuant to the Engagement Agreement, the
Debtors paid Morrison & Foerster an additional $150,000 general
retainer. (Genuity Bankruptcy News, Issue No. 3; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


GLOBAL CROSSING: Will Provide Conferencing Services to DSCI
-----------------------------------------------------------
Global Crossing has signed a two-year contract to provide
wholesale conferencing services to DSCI Corporation, an
integrated provider of complete, customized telecommunications
services. Global Crossing will provide DSCI with reservationless
audio and Web-based conferencing and event services, allowing it
to offer U.S.-based customers virtual meeting capabilities via
the telephone or Internet without calling an operator for
reservations.

DSCI Corporation, based in Lexington, Massachusetts, serves
medium-to-large businesses with integrated telecommunications
services. The company already resells Global Crossing's
dedicated Internet access, private line, frame relay, and local
and long-distance voice services.

"This agreement enables us to add a valuable service to our
portfolio, and offer our customers an efficient, cost-effective
alternative to business travel that is available at a moment's
notice, without the inconvenience of having to call an operator
for setup or assistance," said Jeff Kubick Director of Marketing
for DSCI Corporation. "Global Crossing continues to provide us
with a comprehensive suite of proven, reliable and scalable
service options that our customers will wholeheartedly embrace."

Global Crossing's audio conferencing services provide 24 x 7,
on-demand conferencing. Web-based conferencing options offer the
added flexibility of document collaboration and presentation and
application sharing in a secure online environment with the ease
of use that has made Global Crossing's audio conferencing the
industry standard. Streamlined solutions allow large numbers of
callers to dial in to a presentation, supporting companies'
special events.

"We know that DSCI's customers will derive great value from our
conferencing services, and that they will appreciate the
flexibility our reservationless service offers," said Donald
Poulter, president of Global Crossing Conferencing. "We're
pleased to be counted among the top-tier vendors providing DSCI
with the flexible, integrated solutions their customers desire,
and look forward to further expanding the relationship over the
years."

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

On January 28, 2002, Global Crossing Ltd., and certain of its
subsidiaries (excluding Asia Global Crossing and its
subsidiaries) commenced Chapter 11 cases in the United States
Bankruptcy Court for the Southern District of New York
(Bankruptcy Court) and coordinated proceedings in the Supreme
Court of Bermuda (Bermuda Court). On the same date, the Bermuda
Court granted an order appointing joint provisional liquidators
with the power to oversee the continuation and reorganization of
the Bermuda-incorporated companies' businesses under the control
of their boards of directors and under the supervision of the
Bankruptcy Court and the Bermuda Court. Additional Global
Crossing subsidiaries commenced Chapter 11 cases on April 23,
August 4 and August 30, 2002, with the Bermuda incorporated
subsidiaries filing coordinated insolvency proceedings in the
Bermuda Court. The administration of all the cases filed
subsequent to Global Crossing's initial filing on January 28,
2002 has been consolidated with that of the cases commenced on
January 28, 2002. Global Crossing's Plan of Reorganization,
which was conditionally confirmed by the Bankruptcy Court on
December 17, 2002, does not include a capital structure in which
existing common or preferred equity would retain any value.

On November 18, 2002, Asia Global Crossing Ltd., and its
subsidiary, Asia Global Crossing Development Co., commenced
Chapter 11 cases in the United States Bankruptcy Court for the
Southern District of New York and coordinated proceedings in the
Supreme Court of Bermuda. Asia Global Crossing's bankruptcy
proceedings are being administered separately and are not being
consolidated with Global Crossing's proceedings. Asia Global
Crossing Ltd. is a majority-owned subsidiary of Global Crossing.
However, Asia Global Crossing has announced that no recovery is
expected for Asia Global Crossing's shareholders.

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

Global Crossing Ltd.'s 9.125% bonds due 2006 (GBLX06USR1) are
trading at about 3 cents-on-the-dollar, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=GBLX06USR1
for real-time bond pricing.


GLOBAL CROSSING: Wins Nod to Expand Ernst & Young's Engagement
--------------------------------------------------------------
Global Crossing Ltd., and its debtor-affiliates obtained
permission from the Court to expand the retention and employment
of Ernst & Young LLP to provide certain tax-related services to
the Debtors, on the terms and conditions as set forth in the
Letter of  Understanding dated June 11, 2002 between the Debtors
and E&Y.

Specifically, E&Y is expected to:

A. advise on the impact of cancellation of indebtedness income
    on the tax attributes -- e.g. net operation losses "NOLs",
    etc. -- of the company;

B. advise on the impact of Section 382 of title 26 of the Tax
    Code on any potential ownership change of the company;

C. review and modeling the tax implications of the Debtors'
    emergence from its chapter 11 cases, under different
    emergence scenarios;

D. review the various consolidated returns and the impact of
    the bankruptcy on these returns; and

E. advise the company on any miscellaneous tax matter that may
    be impacted by Global Crossing being in bankruptcy; and

F. perform other tax-audit-related matters.

As proposed, the Debtors will compensate E&Y on an hourly basis
at rates charged by E&Y in non-bankruptcy matters of this type.
The firm's current hourly rates range from:

     Partners and Principals       $550 - 700
     Senior Managers                390 - 545
     Managers                       325 - 440
     Seniors                        200 - 320
     Staff                          165 - 220

These rates are subject to periodic adjustments to reflect
economic and other conditions. (Global Crossing Bankruptcy News,
Issue No. 31; Bankruptcy Creditors' Service, Inc., 609/392-0900)


HAYES LEMMERZ: Asks Court to Further Extend Exclusive Periods
-------------------------------------------------------------
Hayes Lemmerz International, Inc., and its debtor-affiliates ask
the Court to further extend their exclusive periods to:

   -- file a plan through and including the earlier of April
      15, 2003 or 30 days after an order is entered by the Court
      denying confirmation of the Debtors' plan, and

   -- solicit and obtain acceptances of a plan through and
      including the earlier of June 16, 2003 or 90 days after an
      order is entered by the Court denying confirmation of the
      Debtors' plan.

Anthony W. Clark, Esq., at Skadden Arps Slate Meagher & Flom
LLP, in Wilmington, Delaware, assures the Court that the Debtors
do not seek the requested extension for any improper purpose or
delay.  On the contrary, the Debtors timely filed a plan of
reorganization and disclosure statement.

Moreover, the Debtors are committed to emerging from Chapter 11
in the first half of 2003, consistent with the timetable
outlined to the Court and all interested parties at the outset
of these cases.  However, certain challenges have been raised by
the Committee to some of the liens and security interests of the
Debtors' prepetition lenders.  As a result, resolution of these
issues may slightly impact the timetable applicable to the
Debtors' prosecution of confirmation of the Plan.

"The brief extension requested by the Debtors will permit them
to retain the benefit of plan filing and solicitation
exclusivity during the time it takes to resolve the lien
challenges," Mr. Clark explains.  "This extension will also help
the parties accommodate various other scheduling issues that may
be incurred in connection with prosecution of confirmation of
the Plan."

"This case is large and complex as manifested in certain issues
that the Debtors, Prepetition Lenders and Committee are still
negotiating in connection with the plan," Mr. Clark points out.
"With the validity of the Prepetition Lenders' liens potentially
at issue, the Debtors' allocation of value among their various
constituents will no doubt be subject to challenge.  Resolution
of this issue may be necessary prior to plan confirmation."

In light of the size and complexity of these cases, Mr. Clark
believes that the Debtors' request for a brief extension of the
Exclusive Periods is modest relative to the extensions granted
in other large and complex Chapter 11 reorganization cases.
Courts have previously recognized the benefits and practical
necessities of extending a debtor's exclusive periods in large
and complex cases when there is no indication that the debtor is
attempting to abuse the Chapter 11 process through extensions.
Additional time is needed to resolve the final terms of the
filed plan without the potential distraction of competing plans
filed by other parties-in-interest.

Mr. Clark relates that the Debtors have filed a plan and
disclosure statement.  The Debtors, with the assistance of their
advisors, have been actively negotiating the terms of the plan
with the Prepetition Lenders and the Committee.  No
party-in-interest credibly could assert that the Debtors have
not made substantial progress.  The requested extension will
allow the Debtors to solicit acceptances of their plan in an
orderly fashion while maintaining their strategic reorganization
timeline.

In the event that the plan filed by the Debtors is not
confirmed, the Debtors would promptly file an amended plan.
Accordingly, the Debtors believe an extension of the Exclusive
Periods is necessary and appropriate.

Mr. Clark assures the Court that the Debtors continue to be
administratively solvent and pay all undisputed postpetition
obligations in the ordinary course of business.  Thus, neither
liquidity nor solvency is at issue in these cases.

The objectives of a Chapter 11 reorganization case include the
rehabilitation of the debtor's business, and the negotiation,
formulation, development, confirmation and consummation of a
consensual plan of reorganization.  The exclusive periods
provided in Section 1121 of the Bankruptcy Code were intended to
afford a debtor a full and fair opportunity to achieve its
objectives without the business disruption that might be caused
by the filing of competing plans of reorganization by non-debtor
parties.  By filing a plan and simultaneously seeking an
extension of the Exclusive Periods, the Debtors are seeking to
advance their reorganization efforts and avoid the potentially
confusing, costly and time-consuming process that competing
plans of reorganization might create.

Specifically, absent an extension of the Exclusive Periods as
requested, Mr. Clark fears that a protracted and contentious
confirmation process could occur.  A contentious confirmation
hearing would increase administrative expenses, decrease
creditor recoveries and delay the Debtors' reorganization
efforts.  The Debtors believe that the requested extension
affords the best opportunity for a streamlined, largely
consensual, plan confirmation hearing.

A hearing on the Debtors' request is scheduled on January 3,
2003.  By application on the Local Bankruptcy Rules applicable
in Delaware, the exclusive period to file a plan is extended
through the conclusion of that hearing. (Hayes Lemmerz
Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


HEAFNER TIRE: S&P Withdraws SD Corporate Credit Rating
------------------------------------------------------
Standard & Poor's Rating Services has withdrawn its ratings,
including the 'SD' (selective default) corporate credit rating,
on Huntersville, North Carolina-based tire distributor Heafner
Tire Group Inc., now known as American Tire Distributors Inc.

In March 2002, the company completed a tender offer for up to
$126 million of its $150 million 10% senior notes due 2008.
About $121 million in principal amount of the notes were
tendered for $535 per $1,000 principal amount. "The purchase
price represented a deep discount to the face value of the
notes, resulting in impairment of the bondholders," said
Standard & Poor's credit analyst Martin King.


HOLIDAY RV SUPERSTORES: Fails to Meet Nasdaq Listing Standards
--------------------------------------------------------------
Holiday RV Superstores, Inc., (Nasdaq: RVEE) has received a
Staff Determination from the Listing Qualifications unit of the
Nasdaq Stock Market that its common stock is subject to
delisting, pending the outcome of the hearing described below.
The delisting determination was based on the failure of the
Company to comply with (i) the minimum $2,500,000 stockholders'
equity requirement for continued listing set forth in Nasdaq
Marketplace Rule 4310(C)(2)(B), and (ii) the minimum $1,000,000
market value of publicly held common shares for continued
listing set forth in Nasdaq Marketplace Rule 4310(C)(7). The
Company has requested an oral hearing before the Nasdaq Listing
Qualifications Panel to appeal the Staff determination and seek
continued listing. When Nasdaq receives the hearing request, the
delisting of the common stock will be automatically stayed
pending the outcome of the hearing. The common stock of the
Company will continue to trade on the Nasdaq SmallCap Market
under the symbol "RVEE," pending the outcome of these
proceedings.

While there can be no assurance that the Listing Qualifications
Panel will grant the Company's request for continued listing,
the Company is in the process of restructuring its balance sheet
to regain compliance with the minimum stockholders' equity
requirement as well as the minimum market value of publicly held
shares requirement.

Recreation USA operates retail stores in Florida, Kentucky, New
Mexico, South Carolina, and West Virginia. Recreation USA, the
nation's only publicly traded national retailer of recreational
vehicles and boats, sells, services and finances more than 90 RV
brands.

                          *    *    *

In its SEC Form 10-Q filed on September 23, 2002, the Company
reported: "[T]he Company's primary floor plan agreement entered
into in fiscal year 2001 expired on November 30, 2001. Through
March 15, 2002, the Company financed its new and used marine and
vehicle inventory at eight of its locations under a forbearance
agreement that expired March 15, 2002 at which time the parties
agreed to amend the expired agreement essentially under the same
terms through October 31, 2002 lowering the maximum borrowing to
$20,000,000.

"On May 15, 2002, the maximum borrowing commitment was further
reduced to $19,032,679 as the result of the sale of real
property, which served as additional collateral for the floor
plan agreement. The reduced borrowing level does not provide the
Company sufficient capacity to meet its business plan
requirements. Additionally, as of July 31, 2002, the Company was
not in compliance with certain covenants contained within the
floor plan agreement and has not received waivers for such
events of defaults. On September 18, 2002 the lender has
provided notification preserving their rights with respect to
the events of default. Through September 20, 2002, the lender
has not communicated any intention relating to the violation of
the covenants. However, there can be no assurance that the
lender will not call the loan. These circumstances raise
substantial doubt about the Company's ability to continue as a
going concern. The Company is in discussions with other lenders
to provide a new alternative floor plan agreement to meet all of
the Company's floor plan capacity and to meet its business plan
requirements. While the Company has retained the ability to
floor plan its inventory, failure to come to terms with its
alternative floor plan lenders or obtain sufficient floor plan
financing could have a material adverse effect on the Company
and raises substantial doubt about the Company's ability to
continue as a going concern and to achieve its intended business
objectives.

"The Company's transfer to the Nasdaq Small Cap Market and
period of non-compliance with listing requirements, which also
raises substantial doubt regarding the Company's ability to
continue as a going concern.

"Additionally, the Company incurred a net loss of $15,093,903,
$18,021,656 and $3,204,775 for the nine month period ended July
31, 2002, fiscal 2001 and 2000, respectively, and incurred net
cash outflows from operations of $5,436,043, $2,504,120 and
$568,465 for the nine month period ended July 31, 2002, fiscal
2001 and 2000, respectively. As of October 31, 2001 certain
inventory initiatives coupled with restrictions placed on the
Company's ability to order new product by its primary floor plan
lender resulted in a 42.7% reduction in the year-over-year
inventory levels with an additional 35.9% reduction since
October 31, 2001. In addition, the short-term performance and
the long-term potential for each retail location were reviewed
together with each dealership's management team. As a result,
three dealerships that were under-performing or competing in the
same markets were closed and/or consolidated into other Company
dealerships during the fiscal year ended October 31, 2001 and an
additional three more dealerships were closed and consolidated
during the nine month period ended July 31, 2002. Three more
stores have been identified as underperforming either due to the
demographics in the geographic market in which they operate or
due to a competitive disadvantage. Management anticipates that
two of the stores will be closed and consolidated into other
stores within the geographic region prior to September 30, 2002.
The Company continues to evaluate the viability of the third
dealership and if the Company can relieve itself of certain
obligations associated with the third dealership it will decide
to exit that market. Management believes that with the
restructuring of its dealerships and the focus on managing its
inventory to optimum levels and turns, the continuation of rigid
expense control, the infusion of additional capital and the
continued support of its primary floor plan lender under more
favorable terms, improved revenues, profits and cash flows from
operations of remaining stores will result in the fourth quarter
of fiscal year 2002, provided that sufficient floor plan funding
is available. However, there can be no assurance that the
Company's business plan will be achieved or the Company will be
able to obtain sufficient floor plan availability. While
management believes that the remaining same store operating
performance will improve in the remainder of the fourth quarter
of fiscal year 2002, the Company will be required to obtain
additional outside funding to fund operating deficits.
Management further believes that additional financing will be
made available to support the Company's liquidity requirements
and that certain costs and expenditures could be reduced further
should any needed additional funding not be available. Failure
to raise additional capital, generate sufficient revenues or
continue to restrain discretionary spending could have a
material adverse effect on the Company and raises substantial
doubt about the Company's ability to continue as a going concern
and to achieve its intended business objectives."


INSILCO: UST Wants to Convene Sec. 341(a) Meeting on January 24
---------------------------------------------------------------
Donald F. Walton, the Acting U.S. Trustee for Region III, will
convene a meeting of creditors of Insilco Technologies Inc., and
its debtor-affiliates, pursuant to 11 U.S.C. Sec. 341(a), on
January 24, 2003, at 10:00 a.m. at J. Caleb Boggs Federal
Building, 2nd Floor, Room 2112, in Wilmington, Delaware.

Insilco Technologies, Inc., a leading global manufacturer and
developer of highly specialized electronic interconnection
components and systems, serving the telecommunications, computer
networking, electronics, automotive and medical markets, filed
for chapter 11 petition on December 16, 2002. Pauline K. Morgan,
Esq., Sharon M. Zieg, Esq., Maureen D. Luke, Esq., at Young,
Conaway, Stargatt & Taylor and Constance A. Fratianni, Esq.,
Scott C. Shelley, Esq., at Shearman & Sterling, represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from its creditors, it listed $144,263,000 in
total assets and $611,329,000 in total debts.


INTEGRATED TELECOM: Committee Hires Baker & McKenzie as Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of Integrated
Telecom Express, Inc., sought and obtained approval from the
U.S. Bankruptcy Court for the District of Delaware to retain
Baker & McKenzie as its general counsel.

The hourly billing rates of professionals presently designated
in this case are:

      Ali M. Mojdehi           Partner       $425 per hour
      Peter W. Ito             Partner       $365 per hour
      Christopher V. Hawkins   Associate     $250 per hour
      Catherine Chapple        Paralegal     $125 per hour

The professional services that Baker & McKenzie will provide,
include:

      a) advising the Committee with respect to its statutory
         powers and duties in this case;

      b) advising the Committee and consulting with the Debtor
         concerning the administration of this case;

      c) advising the Committee regarding the formulation of a
         plan of reorganization for the Debtor;

      d) preparing on the Committee's behalf, any and all
         necessary and appropriate legal papers;

      e) representing the Committee in matters before this Court;
         and

      f) performing any and all other and further legal services
         as may be necessary and appropriate to protect and
         advance the position of the Committee and its
         constituents.

Integrated Telecom Express, Inc., provides integrated circuit
and software products to the broadband access communications
equipment industry. The Company filed for chapter 11 protection
on October 8, 2002. When the Debtor filed for protection from
its creditors, it listed $115,969,000 in total assets and
$4,321,000 in total debts.


INTERTAPE POLYMER: Amends Financial Covenants Under Credit Pacts
----------------------------------------------------------------
Intertape Polymer Group Inc., (NYSE:ITP)(TSX:ITP) said an
agreement has been reached with its bankers and the holders of
its senior secured notes with respect to certain covenants in
its bank indebtedness and credit facilities. The modifications
take effect immediately and address fiscal 2003 and onwards.

Intertape Polymer Group Chairman and CEO, Melbourne F. Yull,
said the changes are a result of the Company's better than
expected debt reduction performance. "Improvements made during
the current year were highlighted in our annual reviews with our
bankers and noteholders. The Company expects total debt
reduction to reach approximately $70 million for fiscal 2002. As
a result, our bankers and noteholders have rewarded the
Company's efforts by agreeing to amend our financial covenants.
These revised financial covenants afford the Company greater
flexibility."

The credit agreements were originally concluded during the
fourth quarter of 2001 and contain financial covenants including
limitations on debt as a percentage of tangible net worth,
maintenance of tangible net worth above predefined levels and
fixed charge coverage ratios.

IPG's Chief Financial Officer, Andrew M. Archibald, C.A.,
indicated that enhanced balance sheet management throughout 2002
has resulted in reduced debt levels which were incurred in prior
years to support heavy capital expenditures and acquisitions.
"The Company's effective debt reduction program gave our bankers
and noteholders the confidence to relax the financial covenant
requirements. We have completed our capital expenditure programs
and are now focused on maximizing all aspects of debt reduction
and plant utilization. This will result in lower interest costs
as the Company draws upon less costly bank facilities and
reduces the various interest rate spreads over both prime and
LIBOR. The $17 million cost reduction programs announced this
past September are well underway. These programs should be
completed by June 2003."

Mr. Yull further commented that the changes are a clear
indication of the confidence of the Company's bankers and
noteholders. "These modifications provide the Company with
greater financial and operating flexibility to open up
additional opportunities for Intertape Polymer Group. This is a
positive message from the Company's bankers and noteholders."

IPG is a recognized leader in the development and manufacture of
specialized polyolefin plastic and paper based packaging
products and complementary packaging systems for industrial and
retail use. Headquartered in Montreal, Quebec and
Sarasota/Bradenton, Florida, the Company employs approximately
2,800 employees with operations in 21 locations, including 15
manufacturing facilities in North America and one in Europe.


KEMPER INSURANCE: A.M. Best Slashes Fin'l Strength Rating to B+
---------------------------------------------------------------
A.M. Best Co., has lowered the financial strength rating to B+
(Very Good) from A- (Excellent) of the participants in the
Kemper Insurance Companies intercompany pool, Long Grove, Ill.

In addition, A.M. Best has lowered the rating of the surplus
notes issued by Lumbermens Mutual Casualty Company, the lead
member of the group, to "bb-" from "bbb-". All ratings have been
placed under review with negative implications.

These rating actions follow the recently announced business
decision to repurchase $125 million of Berkshire Hathaway's
minority equity investment in a Kemper subsidiary company and
its implications for Kemper's overall capitalization and
liquidity. A.M. Best is also concerned with the potential for
additional charges, including the potential for further adverse
development in loss reserves in more recent accident years
across most major lines of business.

The decision to repurchase the minority equity investment in the
subsidiary comes shortly following Berkshire Hathaway's
investment of $125 million in Kemper's portfolio of commercial
casualty and specialty insurance operations through a newly
formed stock subsidiary. After considering current
capitalization, the impact of the repurchase, the potential for
additional charges and the impact of continued restructuring on
future operating performance, A.M. Best expects capitalization
will no longer support an Excellent rating. Accordingly, the
overall financial strength of the pool faces increased risk
considering Kemper's limited financial flexibility.

The ratings have been placed under review given the uncertainty
of Kemper's financial strength. A.M. Best will be meeting with
Kemper management early in 2003 and will closely monitor
Kemper's financial results in the near-term. Depending upon the
impact of operating performance on future capitalization, the
financial strength rating of Kemper could be lowered further.


KMART CORP: Third Quarter Losses Top $4 Million Per Week
--------------------------------------------------------
Kmart Corporation (Pink Sheets: KMRTQ) announced the financial
results for its third quarter of fiscal 2002 and the filing of
its Quarterly Report on Form 10-Q and monthly operating reports
for October and November 2002.

For the 13 weeks ended October 30, 2002, Kmart reported a net
loss of $383 million versus a restated net loss of $249 million
for the 13 weeks ended October 31, 2001. Excluding non-
comparable items, discontinued operations and reorganization
items, the Company's net loss was $390 million in the third
quarter of 2002, compared with a net loss of $152 million in the
third quarter of 2001.

The reported results reflect the restatement of the 26-week
period ended July 31, 2002, as well as prior fiscal years. Kmart
announced on December 9, 2002, that it would be restating its
financial results for these prior periods to reflect certain
adjustments identified as a result of the Company's ongoing
review of its accounting practices and procedures.

Net sales for the 2002 third quarter were $6.73 billion,
compared with $8.02 billion in the same quarter a year ago. As
previously reported, Kmart closed 283 underperforming stores in
the second quarter of 2002. On a same- store basis, sales
declined 7.6 percent from the third quarter of 2001. Comparable
store sales for the four-week period ended October 30, 2002,
were 3.9 percent lower than the same period a year ago.

The Company passed the peak borrowing period for its seasonal
inventory build in early December and has now fully repaid all
of it DIP borrowings. As of December 19, 2002, Kmart had no
borrowings outstanding and had utilized $326 million of its
Debtor in Possession (DIP) credit facility for letters of
credit. Its total DIP availability as of that date was $1.57
billion.

James B. Adamson, Chairman and Chief Executive Officer of Kmart,
said, "We continue to make good progress in many areas. Our
reorganization team is hard at work finalizing a comprehensive
business plan, analyzing our store base and taking other actions
necessary to fulfill our goal of filing a proposed plan of
reorganization with the court and emerging from Chapter 11 court
protection as early as practicable in 2003."

                November Results and Holiday Outlook

In its monthly operating report for the four-week period ended
November 27, 2002, Kmart reported a net loss of $40 million on
net sales of $2.47 billion. Comparable store sales during this
period were 17.2 percent lower than the same period a year ago.
In contrast to many other retailers, Kmart's fiscal period ends
on the last Wednesday of the month. Accordingly, the reporting
period for November 2002 does not include the sales results of
Thanksgiving weekend, as it did in 2001, which resulted in an
unfavorable comparison.

Kmart's 2002 Thanksgiving weekend sales will be included in the
December monthly results. As a result, the Company expects its
comparable sales trend for December to improve from November.
However, the Company's overall results for the fourth quarter of
2002 may be adversely impacted by the fact that there are
significantly fewer shopping days between Thanksgiving and
Christmas this year as compared with 2001. In addition, the
Company noted that the U.S. retail environment has generally
been described as weak this holiday season.

Julian Day, Kmart President and Chief Operating Officer, said,
"The Company's performance over Thanksgiving weekend was
encouraging. The post-Thanksgiving period also started strong,
but sales in the last two weeks have been softer than we had
anticipated."

Day continued, "In addition to concentrating on our same store
sales performance, we remain very focused on improving our gross
margin management process, working on our cost base and
increasing our inventory turns. Our challenge as a promotional
retailer is to use aggressive event and pricing strategies aimed
at driving store traffic and winning our customers back, while
also providing a merchandise assortment that allows us to
generate an acceptable margin rate. We are encouraged by
consumer reaction to our exclusive merchandise offerings --
including the new JOE BOXER and Martha Stewart Everyday Holiday
collections -- that were available to our customers this holiday
season."

Selling, General and Administrative expenses (SG&A) for the
third quarter of 2002 decreased by $233 million from the year-
ago quarter. SG&A as a percent of sales was 22.5 percent in the
third quarter of 2002, compared with 21.8 percent in the third
quarter of 2001. The decrease in SG&A from the previous year is
due primarily to lower payroll and benefits resulting from the
closure of 283 stores in the second quarter of 2002, a reduction
in electronic media and direct mail advertising, the employee
reductions at headquarters in the third quarter of 2002, and
lower depreciation expense due to an impairment charge recorded
in the fourth quarter of fiscal 2001 and lower current year
capital spending.

Gross margin as a percentage of sales decreased to 17.0 percent
for the 13 weeks ended October 30, 2002, from 20.2 percent in
the third quarter of 2001. This decrease is primarily related to
an increase in promotional markdowns designed to bring customers
back into Kmart's stores, an increase in clearance markdowns to
improve sell-through on seasonal apparel, and a decrease in
vendor allowances. This decrease was partially offset by
increased margin as a result of the reduction in the BlueLight
Always program.

                       Nine Month Results

For the 39 weeks ended October 30, 2002, Kmart reported a net
loss of $2.12 billion versus a net loss, as restated, of $796
million for the 39 weeks ended October 31, 2001. Excluding non-
comparable items, discontinued operations and reorganization
items, the Company's net loss was $1.06 billion in the first
nine months of 2002, compared with a net loss of $611 million in
the same period in 2001.

Net sales for the 39-week period ended October 30, 2002 were
$21.89 billion, compared with $25.27 billion in 2001. On a same-
store sales basis, sales declined 10.2 percent from the first
nine months of 2001.

                   Restatement of Prior Periods

As discussed above (and as previously announced), as part of the
review and preparation of its Form 10-Q for the 13 and 39 weeks
ended October 30, 2002, the Company identified certain out-of-
period adjustments. In addition, in its second quarter report on
Form 10-Q, filed with the SEC on September 16, 2002, the Company
had previously identified and described certain other out- of-
period adjustments. Upon review of the aggregate impact of the
new, as well as the previously disclosed and recorded
adjustments, Kmart concluded that restating its financial
statements for the prior periods was appropriate because the
aggregate adjustment was material to its 2002 fiscal year
results.

The aforementioned adjustments relate primarily to:

a) An understatement of historical accruals for certain leases
with varying rent payments and a related understatement of
historical rent expense.

b) A software programming error in Kmart's accounts payable
system that resulted in some paid invoices awaiting a store
report of delivery not being appropriately treated in the
Company's financial statements. This error, restricted to a
single vendor with unique billing arrangements, resulted in an
understatement of "Cost of sales, buying and occupancy" since
1999.

c) Adjustments, as previously disclosed in Kmart's 2002 second
quarter report on Form 10-Q, for certain costs formerly
capitalized into inventory. Inventory included amounts added for
internal purposes to analyze gross margin on a comparable basis
across all business units and to optimize purchasing decisions.
These amounts are commonly referred to in the retail industry as
"inventory loads," and should have been eliminated for external
reporting purposes to the extent the related inventory remained
unsold at the end of the period.

d) The premature recording, as previously disclosed in Kmart's
2002 second quarter report on Form 10-Q, of vendor allowance
transactions in fiscal year 2000 and prior fiscal years.

In addition, given the restatement for the items noted above,
Kmart is also adjusting previously reported financial results
for miscellaneous immaterial items that were identified and
previously recorded in the ordinary course of business. These
items are now being recorded in the appropriate fiscal periods.

The net impact of the restatement on prior fiscal years was to
reduce reported earnings by $28 million in fiscal 2001, $24
million in fiscal 2000, and $40 million in fiscal 1999. The
restatement also had the effect of reducing the retained
earnings on the Company's balance sheet at January 30, 1999 by
$138 million. More detailed information concerning these
adjustments can be found in the Company's Quarterly Report on
Form 10-Q.

The Company is in the process of preparing an amended Annual
Report on Form 10-K/A for the 2001 fiscal year and amended
Quarterly Reports on Form 10- Q/A for the first two quarters of
the 2002 fiscal year and will file such reports as soon as
practicable.

                          Other Matters

In its Quarterly Report on Form 10-Q for the third quarter,
filed with the SEC today, the Company notes that in light of
returns in the equity markets, the Company presently expects
that it will likely be required to commence making contributions
to its defined benefit pension plan in 2005. Kmart's pension
plan was frozen in January 1996. Given that the plan is frozen,
the timing for the commencement of future funding requirements
will depend, in large part, on the future investment performance
of the plan's assets. Further information about this matter is
available in the Form 10-Q report.

Kmart Corporation is a mass merchandising company that serves
America with more than 1,800 Kmart and Kmart SuperCenter retail
outlets. Kmart in 2001 had sales of $36 billion. The Company's
common stock is currently quoted on the Pink Sheets Electronic
Quotation Service -- http://www.pinksheets.com-- under the
symbol KMRTQ.

DebtTraders says that Kmart Corp.'s 9% bonds due 2003 (KM03USR6)
are trading at about 13 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=KM03USR6for
real-time bond pricing.


KMART CORP: Asks Court to Fix Special Jan. 22 Claims Bar Date
-------------------------------------------------------------
Pursuant to the Bar Date Order, on April 1, 2002, Kmart
Corporation and its debtor-affiliates sent notice of the July
31, 2002 Bar Date to 1,000,000 potential claimants including:

A. all employees who had worked for them within two years of the
    Petition Date;

B. thousands of vendors who had done business with them in the
    months leading up to the Petition Date, regardless of whether
    the Debtors' books and records listed a balance owing to
    those vendors;

C. thousands of parties to executory contracts and unexpired
    leases, including roughly 5,000 landlords and subtenants; and

D. roughly 20,000 personal injury and related claimants,
    including 3,500 claimants who were involved in pending
    litigation against the Debtors as of the Petition Date.

In preparing the lists, the Debtors' employees and their
financial advisors spent a significant amount of time carefully
reviewing and compiling computer and other files to ensure that
the lists were as complete as possible.

Despite their best efforts, the Debtors recently learned that
the names and addresses of 4,000 personal injury and related
litigation claimants were omitted from the Schedules of Assets
and Liabilities and Statement of Financial Affairs they filed
with the Court on April 15, 2002.  As a consequence, those
claimants were not sent direct mail notice of the Bar Date.

To compensate for their mistakes, the Debtors have prepared --
and will soon file -- an amendment to Schedule F of their
Schedules to reflect the general unsecured creditors that were
previously overlooked.  The Debtors propose to give the
claimants another opportunity to file their claims.

Against that backdrop, the Debtors ask Judge Sonderby to:

   1. establish January 22, 2003 as the deadline for all
      claimants listed on the amendment to the schedules and
      holding or wishing to assert a claim against any of the
      Debtors to file a proof of their claim in these cases; and

   2. establish the later of the Supplemental Bar Date or 30
      days after an amendment notice is served as the deadline
      for current claimants to revise their scheduled claims.

John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher &
Flom, asserts that the Supplemental Bar Date is necessary as it
affords the Debtors complete and accurate information regarding
the nature, amount and status of all claims that will be
asserted in these Chapter 11 cases.  Complete and accurate
information is necessary to develop a comprehensive, viable plan
of reorganization.

"The Debtors intend to file a plan of reorganization on or
before February 25, 2003.  [Therefore the] establishment of the
Supplemental Bar Date at this time will advance this process by
affording the Debtors and their constituents ample opportunity
to conduct a preliminary review of any new claims that are filed
as part of their ongoing negotiations over the terms of a plan
of reorganization," according to Mr. Butler.

             Parties Required to File Proofs of Claim

The Supplemental Bar Date would apply to any person or entity:

   (a) newly listed in the Amended Schedules whose claim is
       listed as "disputed," "contingent," or "unliquidated" and
       that desires to participate in any of these Chapter 11
       cases or share in any distribution in these Chapter 11
       cases;

   (b) whose claim is improperly classified in the Amended
       Schedules or is listed in an incorrect amount and that
       desires to have its claim allowed in a classification or
       amount other than as set forth; and

   (c) whose claim against is not listed in the Amended
       Schedules.

In addition, any person or entity whose claim arises:

   * from, or as a consequence of a further amendment to the
     Amended Schedules subsequent to service of the Supplemental
     Bar Date Notice; or

   * as a result of any further amendment to the schedules
     subsequent to service of the amendment notice,

may file its proof of claim within 30 days after the amendment
notice is served or be forever barred from doing so.

Mr. Butler advises that those persons or entities required to
file a proof of claim by the Supplemental Bar Date but fails to
do so in a timely manner will be forever barred, estopped, and
enjoined from:

   -- asserting any claim that:

        (i) exceeds the amount, if any, that is set forth in the
            Schedules or the Amended Schedules; or

       (ii) is of a different nature or in a different
            classification -- Unscheduled Claim; and

   -- voting, or receiving distributions under, any
      reorganization plan with respect to an Unscheduled Claim.

                       Claims Not Applicable

These entities need not file their proofs of claim:

   (a) those:

       (1) who agree with the nature, classification, and amount
           of their claim as set forth in the Amended Schedules
           and

       (2) whose claim is not listed as "disputed," "contingent,"
           or "unliquidated" in the Amended Schedules;

   (b) any entity that has already properly filed a proof of
       claim against the correct Debtor;

   (c) any entity asserting a claim allowable under Sections
       503(b) and 507(a)(1) of the Bankruptcy Code as an
       administrative expense of the Debtors' Chapter 11 cases;
       and

   (d) any entity whose claim previously has been allowed by, or
       paid pursuant to, a Court Order.

Nevertheless, the Debtors retain the right to:

     -- dispute, or assert offsets or defenses against any filed
        claim or any claim listed or reflected in Amended
        Schedules as to the nature, amount, liability,
        classification, or otherwise; or

     -- subsequently designate any claim as disputed, contingent,
        or unliquidated.

              Supplemental Bar Date Notice Procedures

Mr. Butler, relates that the Debtors' claims agent, Trumbull
Services LLC, have already sent all known potential claimants
including the additional claimants a notice of the Supplemental
Bar Date together with a Proof of Claim Form on December 19,
2002.  The Proof of Claim Form states:

     * whether the claimant's claim is listed in the Amended
       Schedules;

     * the dollar amount of the claim, if listed;

     * the Debtor for which the claim is scheduled; and

     * whether the claim is listed as disputed, contingent or
       unliquidated.

The Debtors believe that a 30-days minimum lead-time is more
than enough to allow the claimants to respond to the Notice.
"This time frame is more than adequate given the fact that these
Chapter 11 cases have now been pending for almost a year, and
all personal injury claimants therefore should have, at a
minimum, constructive notice of the pendency of these cases,"
Mr. Butler tells Judge Sonderby.  Mr. Butler also contends that
those personal injury claimants who have not yet filed proofs of
claim clearly should be aware by now of the Chapter 11 cases.

For any Proof of Claim Form to be validly and properly filed:

   -- a signed original of the completed Proof of Claim Form,
      together with accompanying documentation, must be delivered
      so as to be received by the Claims and Noticing Agent no
      later than 4:00 p.m., Eastern Standard Time, on the
      Supplemental Bar Date at either of these addresses:

        All Mailings:

                    Kmart Corporation, et. al.
                    c/o Trumbull Services LLC
                    P.O. Box 426
                    Windsor, CT 06095

        Overnight Packages Only:

                    Kmart Corporation, et. al.
                    c/o Trumbull Services LLC
                    Griffin Center
                    4 Griffin Road North
                    Windsor, CT 06095

   -- the creditors must submit the proofs of claim in person or
      by courier service, hand delivery or mail.  Facsimile
      submissions will not be accepted.  Proofs of claim will be
      deemed filed when actually received by the Claims and
      Noticing Agent.  If a creditor wishes to receive
      acknowledgment of receipt of its proof of claim, it must
      submit a copy of the proof of claim and a self-addressed,
      stamped envelope;

   -- all persons and entities who wish to assert claims against
      more than one Debtor must file a separate Proof of Claim
      Form for each Debtor.  This is to avoid confusion as well
      as facilitate the maintenance of separate Claim registers
      for each Debtor; and

   -- the creditor must identify on each Proof of Claim Form the
      particular Debtor against which its claim is asserted if
      the claim is against multiple Debtors.  This is to expedite
      the Debtors' review of proofs of claim in these cases.
      (Kmart Bankruptcy News, Issue No. 40; Bankruptcy Creditors'
      Service, Inc., 609/392-0900)


MICROCELL: Secured Lenders Okay Terms of Recapitalization Plan
--------------------------------------------------------------
Microcell Telecommunications Inc., (TSX:MTI.B) said its secured
lenders, holding approximately 74% of the outstanding secured
debt, have agreed on the terms of a recapitalization plan. In
this regard, the Company's secured lenders have agreed to
forbear until January 6, 2003, the exercise of any rights with
respect to a default resulting from the non-payment of interest
on the Company's 14% senior discount notes due 2006. The Company
also continues to have constructive discussions regarding the
plan with an ad hoc committee of unsecured noteholders. The
Company anticipates being able to make a further announcement
regarding the recapitalization plan on or before January 6,
2003.

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

Microcell Telecommunications' 14% bonds due 2006 (MICT06CAR1),
DebtTraders says, are trading at about a penny on the dollar.
For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=MICT06CAR1


MILLERS INSURANCE: S&P Junks Financial Strength Rating at CCCpi
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty
credit and financial strength ratings on The Millers Insurance
Co., to 'CCCpi' from 'Bpi'.

It also said it withdrew its 'Bpi' counterparty credit and
financial strength ratings on Millers Casualty Insurance Co., a
former inter-affiliate pool member of Millers, because the two
companies have merged.

"The rating action reflects very low capitalization ratios and
surplus base, high one-year loss development, and very weak
earnings and liquidity," observed credit analyst Alan Koerber.

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

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


MINNETHAN LAND: Look for Schedules and Statements by January 25
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
granted Minnethan Land Investors Company an extension of time to
compile their Schedules of Assets and Liabilities and Statements
of Financial Affairs and file them with the Court.  The
financial disclosure documents are due by January 25, 2003.

Minnethan Land Investors Company filed for chapter 11 protection
on October 28, 2002.  Scott R. Kipnis, Esq., Hofheimer Gartlir &
Gross, LLP, represents the Debtor in its restructuring efforts.
Upon filing for protection from its creditors, the Company
listed an estimated assets of over $10 million and debt of less
than $10 million.


MSX INT'L: Bank Group Waives Certain Loan Financial Covenants
-------------------------------------------------------------
MSX International has received an interim waiver at the end of
its fiscal year of certain financial covenants in its $150
million, bank-syndicated credit agreement. The waiver agreement,
signed on December 20, 2002, is in effect through February 17,
2003. The Company expects to revise the terms of its credit
agreement with the bank group before that date.

Under the terms of the waiver, MSX International will
temporarily reduce the revolving portion of our credit facility
from $85 million to $65 million. As of September 29, 2002, the
Company had $46.6 million of availability under its credit
facility. "After giving effect to the temporary reduction in our
revolver, our unused borrowing capacity would be $26.6 million,
which management believes is adequate for current operating
requirements."

MSX International, headquartered in Southfield, Mich., combines
innovative people, standardized processes and today's
technologies to deliver a collaborative, competitive advantage
on a global basis. With annual sales of more than $800 million,
MSX International has 8,600 employees in 26 countries. Visit the
Company's Web site at http://www.msxi.com


NAT'L CENTURY: Baltimore Emergency Wants to Use Cash Collateral
---------------------------------------------------------------
On November 8 and 11, 2002, Baltimore Emergency Services II, LLC
and its affiliates filed for Chapter 11 protection in the United
States Bankruptcy Court for the District of Maryland.

Under a series of financing agreements, National Century
Financial Enterprises, Inc., provided working capital to
Baltimore by financing the health care receivables generated
under Baltimore's various Provider Contracts.  As a consequence,
Baltimore was entirely dependent on National Century to provide
sufficient funding in order to continue operating.

However, Thomas E. Luria, Esq., at White & Case, LLP, in Miami,
Florida, recounts that on October 18, 2002, Baltimore began
experiencing severe a liquidity crisis due to delays, and
ultimately, the complete cessation of funding from National
Century.  Hence, Baltimore's bankruptcy filing was brought on by
National Century's failure to provide Baltimore with critical
funding necessary to maintain operation.

On November 14, 2002, after an evidentiary hearing and with the
Debtors' consent, the Maryland Bankruptcy Court granted a Cash
Collateral Motion authorizing Baltimore to use, on an interim
basis, cash on hand and the proceeds from the Provider Contracts
deposited into their accounts through December 13, 2002.
However, despite the authorization, many of the Baltimore's
depository banks expressed uncertainty as to how to proceed and
were unwilling to make Baltimore's funds available to them.  The
Maryland Bankruptcy Court rejected National Century's bid to
prohibit Baltimore from using cash collateral.

After the circulation of the Maryland Bankruptcy Court orders to
each depository bank, Mr. Luria relates, all of the Debtors'
banks have substantially complied except Huntington Bank and
Provident Bank.

As a result of Baltimore's inability to access the accounts, the
healthcare provider is in real danger of not meeting its revenue
projections.  Mr. Luria maintains that without access to the
Accounts and the funds deposited therein from time to time,
Baltimore's chance of survival is being significantly
jeopardized.

Baltimore asks the Ohio Bankruptcy Court for emergency relief
from the automatic stay applicable in National Century's
proceedings to permit the use of Cash Collateral by Baltimore
contained in the Accounts, on an interim basis, subject to
adequate protection of the Debtors' interest in the Cash
Collateral, in accordance with the Cash Collateral Order issued
by the Maryland Bankruptcy Court.  Furthermore, Baltimore asks
the Ohio Bankruptcy Court to direct Huntington and Provident to
make the Accounts and any funds deposited therein available to
them.

Mr. Luria contends that Huntington and Provident's failure to
release the Cash Collateral will cause irreparable harm to
Baltimore -- to the point of shutting down their operations.  In
addition, Mr. Luria assures Judge Calhoun that the Cash
Collateral Order safeguards any interest the Debtors may claim
in the Cash Collateral, thereby minimizing any prejudice to the
Debtors. (National Century Bankruptcy News, Issue No. 4;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


NATIONAL LAMPOON: Liquidity Issues Raise Going Concern Doubt
------------------------------------------------------------
Since the consummation of National Lampoon's Reorganization
Transactions, the Company has initiated a number of new business
activities, and significantly increased its overhead by the
hiring of new employees and consultants. To date, these
operations have provided limited operating revenue, and Natinal
Lampoon has been relying on capital received from NLAG Group in
connection with the securities purchased in connections with the
Reorganization Transactions, and the subsequent investment by
the NLAG Group, and Messrs. Laikin, Skjodt and Durham or
warrants received in that transaction, to fund operations. Since
the consummation of the transaction, in which the Company
received $2,085,318, subsequent warrant exercises have provided
it with $1,305,000, although $200,000 of this amount was
allocated for the Burly Bear transaction. National Lampoon is
currently exploring other transactions to secure additional
financing, although in the near term expect to continue to rely
on the funding provided by NLAG and its affiliates. The
Company's financial statements are subject to a going concern
qualification, which could make any additional financing
transaction more difficult to consummate.

For the quarter ended October 31, 2002 trademark revenues were
$72,274 compared to $151,947 for the quarter ended October 31,
2001, representing a decrease of 52%. This decrease resulted
primarily from the receipt in the prior year of $115,000 for
royalties for the feature film "Animal House". In fiscal 2003,
the "Animal House" royalty payment should be received in the
second fiscal quarter instead of the first fiscal quarter. Book
royalties of $27,891 in fiscal 2003 represent an increase of
$20,173 from fiscal 2002 book royalties of $7,808. $25,000 was
received in fiscal 2003 as the initial payment for the use of
the National Lampoon name by a company involved in gaming.
Television royalties received during fiscal 2003 were $19,167
versus $25,782 received during the first fiscal quarter of 2002,
representing a decrease of 26%. First quarter fiscal 2003
Internet revenues of $1,867 increased by 273% over fiscal 2002
Internet revenues of $501. Increased merchandise sales accounted
for this change.

For the three months ended October 31, 2002, the Company had a
net loss of $1,580,283 versus a loss of $222,861 for the quarter
ended October 31, 2001. This increase in the loss resulted
primarily from significantly increased personnel and related
costs associated with the increase in activity since the NLAG
Transaction, as well as no SAR benefit during the current fiscal
year.

Since the completion of the Reorganization Transactions, Company
operations have been characterized by ongoing capital shortages
caused by expenditures in initiating several new business
ventures. The Company is also actively seeking private sources
of financing, establishing bank lines and obtaining additional
equity from third party sources. There is no assurance that such
financing will be available on commercially acceptable terms, if
at all. Natinal Lampoon is not certain if its existing capital
resources are sufficient to fund its activities for the next six
to twelve months. Unless revenues from new business activities
significantly increase during that period, the Company will need
to raise additional capital to continue to fund its planned
operations or, in the alternative, significantly reduce or even
eliminate certain operations. There can be no assurance that it
will be able to raise such capital on reasonable terms, or at
all. As of December 15, 2002, the Company had cash on hand of
$21,849, and no significant receivables. This amount is not
sufficient to fund current operations, which is estimated to be
approximately $480,000 per month. National Lampoon anticipates
that any shortfall will be covered by the additional exercise of
the Series B Warrants held by the NLAG Group or other
investments by NLAG. If NLAG declines to make additional
investments, or should National Lampoon be unable to secure
additional financing, it could be forced to immediately curtail
much, if not all, of its current plans. The Company's financial
statements for the fiscal year ended July 31, 2002 contain an
explanatory paragraph as to its ability to continue as a "going
concern". This qualification may impact its ability to obtain
future financing.


NATIONAL STEEL: Reports $10-Million Net Loss for November 2002
--------------------------------------------------------------
National Steel Corporation (OTC Bulletin Board: NSTLB) filed a
Form 8-K for the entities that filed Chapter 11 and reported a
net loss for November of $9.9 million. Including all of the
entities that did not file Chapter 11, National Steel had a net
loss of $10.2 million. The November loss was attributed to
higher planned maintenance outage costs and lower shipments due
to seasonal reductions. Average selling prices continued to
remain strong primarily as a result of a better mix of
shipments. As indicated in the third quarter 2002 10-Q and
associated press release, the fourth quarter 2002 is projected
at a net loss due to significant maintenance outage costs and
the seasonal reduction in demand.

EBITDA for November was $6.0 million, which brings the year to
date EBITDA to $39.6 million. Additionally, borrowings decreased
during the month by $6 million, to $71 million at November 30,
2002. Total liquidity from cash and availability under the
Company's DIP credit facility remained strong at $253 million at
month-end, as compared to $237 million at September 30, 2002.

"The fourth quarter 2002 is proceeding as we had planned.
Although increased costs associated with planned maintenance
outages and a seasonal reduction in our shipments will generate
a net loss for the quarter, we continue to have a strong
liquidity position as we look to 2003," stated Mineo Shimura,
chairman and chief executive officer.

Headquartered in Mishawaka, Indiana, National Steel Corporation
is one of the nation's largest producers of carbon flat-rolled
steel products, with annual shipments of approximately six
million tons. National Steel Corporation employs approximately
8,200 employees. Please visit the Company's Web site at
http://www.nationalsteel.comfor more information on the Company
and its products and facilities.

National Steel Corp.'s 8.375% bonds due 2006 (NSTL06USR1) are
trading at about 40 cents-on-the-dollar, DebtTraders says. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NSTL06USR1
for real-time bond pricing.


NATIONAL STEEL: Bags Nod to Sell Indiana Port Assets for $4.5MM
---------------------------------------------------------------
Bankruptcy Court Judge Squires authorizes National Steel
Corporation and its debtor-affiliates to sell the Portage,
Indiana, assets for $4,500,000 in accordance with the purchase
agreement.  The Debtors are directed to pay the proceeds of the
sale -- net of closing costs and prorations -- to HSBC Bank USA,
as indenture trustee.  Judge Squires decrees that the payment
will be applied provisionally to the Debtors' obligations as of
the Petition Date to HSBC.

Judge Squires also directs the Debtors to set aside funds form
the proceeds sufficient to satisfy disputed liens and claims.
The reserved amount, however, will not exceed 125% of the
aggregate face amount of the liens.

                          *    *    *

The Portage, Indiana Property consists of:

(1) 46.37 acres of land;

(2) 4.8 acres of land and dock; and

(3) five or six acres along the south shore of Lake Michigan
     contiguous to the 46.37 parcel.

The Property is on the far east edge of the Midwest Operations
and is adjacent to the International Port/Burns Harbor at
Portage, a part of the Great Lakes/St. Lawrence Seaway system.
The IPC operates the Port.

National Steel Corporation built the dock located at the
Property in the mid-1960s but has not used it for any productive
purpose for at least 25 years.  During the last ten years,
National Steel leased the dock and 9.415 acres of the Property
to the IPC for a current annual rent of $12,000.  The IPC uses
the dock for mooring vessels.

The salient terms of the parties' purchase agreement include:

Price:      $4,500,000 in cash

              The Buyer will pay the entire price at the closing.

Possession: The Seller may retain possession of the Property
             will the closing of the transaction and the Buyer
             assumes no liability with respect to the Property
             until it takes possession of the Property.  At the
             closing of the transaction, the Seller will deliver
             exclusive possession of the Property to the Buyer.

Railroad
Issues:     The parties agree to these provisions regarding
             railroad use and operations:

             -- An exclusive, perpetual easement, designated
                Easement F(1) will be established to allow the
                Seller to continue to use the East/West
                connecting track segment at the North end of
                Lakefront Ladder Track, a Pad track System.  The
                Lakefront Ladder Track is located along the
                Northern portion of the Property:

                (a) The Easement F(1) will be 100 feet in width
                    to allow the Seller to safely operate
                    railroad equipment on the track located
                    within the easement area, including the re-
                    railment of the cars and locomotives and the
                    performance of necessary maintenance;

                (b) The Seller will be responsible for any
                    maintenance or repair expenses incurred to
                    operate, maintain, or repair the railroad
                    tracks; and

                (c) Easement F(1) will be a permanent easement
                    which will last in perpetuity unless it is
                    terminated by the Buyer and the Seller
                    after executing and recording a document of
                    termination with the Office of the Recorder
                    of Porter County in Indiana.

             -- An exclusive, perpetual easement, designated
                Easement F(2) will be established to allow the
                Buyer to construct railroad tracks and switches
                between the Property parallel to the Seller's
                existing track and the Seller's connection to the
                Norfolk Southern railroad tracks, located to the
                South of Seller's real estate:

                (a) The railroad improvements to be constructed
                    by the Buyer will also include a crossover
                    connection to the existing Chicago South
                    Shore and South Bend Railroad tracks;

                (b) Easement F(2) will be of a sufficient width
                    to allow the Buyer to safely operate the
                    railroad equipment on the track located
                    within the easement area;

                (c) The Buyer will be responsible for any
                    maintenance or repair expenses incurred to
                    construct, operate, maintain, or repair the
                    railroad tracks; and

                (d) Easement F(2) will be a permanent easement
                    which will last in perpetuity unless it is
                    terminated by either the Buyer and Seller
                    after executing and recording a document of
                    termination with the Office of the Recorder
                    of Porter County, Indiana.

             -- The Buyer will construct a new railroad track, at
                its expense, from the existing Norfolk Southern
                railroad line into the Seller's plant.  The
                Seller will convey its existing access railroad
                track to the Buyer so that Buyer may use the
                existing access track to provide railroad service
                to the Property.

             -- The Buyer will construct a crossover railroad
                track from its railroad tracks to the Seller's
                railroad tracks to provide the Seller with an
                alternate railroad access to be used in emergency
                situations or as agreed upon between the parties.

             -- On or before the closing date, both the Buyer and
                Seller will execute a Memorandum of Understanding
                concerning the Rail Access issues.  The MOU will:

                (a) identify potential operational and congestion
                    problems;

                (b) establish switching priorities that give
                    precedence to the Seller's traffic;

                (c) provide that the Seller, under certain
                    conditions, will have access to the Buyer's
                    track; and

                (d) address any other operational issues, which
                    may adversely affect the Seller.

Inspection: The Buyer has not received any disclosure forms from
             the Seller.  The Buyer will be permitted access to
             the Property to conduct a Phase I environmental
             survey, at its own expense.  The Buyer reserves the
             right to conduct any geotechnical or Phase II
             testing of the Property, still at its own expense,
             to determine the presence of any environmental
             pollution or conditions.

             The Buyer will have the right to withdraw this
             Purchase Agreement, at any time prior to the closing
             of this transaction, if the parties are not able to
             agree on the terms for the removal or remediation of
             any environmental encumbrance or condition disclosed
             through the Phase I environmental survey, Phase II
             environmental testing, or geotechnical testing.

             The Seller will be provided a copy of all
             Environmental and Geotechnical reports promptly
             after they are received by the Buyer.

"As Is
Where Is"   Buyer acknowledges and agrees that EXCEPT AS
             OTHERWISE EXPRESSLY PROVIDED HEREIN, THE PROPERTY
             WILL BE CONVEYED AND ACCEPTED IN ITS "AS IS, WHERE
             IS" CONDITION ON THE CLOSING DATE AND WITH NO
             OBLIGATION ON THE SELLER TO CLEAN UP, REMEDIATE OR
             REPAIR ANY ENVIRONMENTAL ENCUMBRANCE OR CONDITION.

Right Of
First
Refusal:    The Seller has the right of first refusal to
             purchase the Property on the same terms proposed by
             a bona fide purchaser, which are acceptable to the
             Buyer and for which Buyer has received a written
             offer.  The Seller will have a 30-day period after
             receiving a copy of the written offer and
             notification by the Buyer to agree in writing to
             purchase the Property.

             In the event the Seller does not exercise its right
             of first refusal within the 30-day period, this
             right of first refusal will expire as to that
             proposal only and the Buyer will proceed to sell the
             Property on those terms.  If for any reason the
             Buyer does not sell the Property to the bona fide
             purchaser or if the terms of the proposal change
             from those originally proposed and provided to the
             Seller, this right of first refusal will remain in
             full force and effect.

             In the event the Seller exercises its right of first
             refusal, the Seller and the Buyer will enter into a
             contract for the purchase of the Property on the
             same terms proposed by the bona fide purchaser
             within 21 days after the date on which Seller
             exercised its right of first refusal.  They will
             close the purchase of the Property within 60 days
             after the date of the agreement.  This Right of
             First Refusal will expire on the date, which is 21
             years after the death of the youngest grandchild of
             former President George Bush.

Closing
Fee:        The Buyer pays any settlement and closing fees.

Hazardous
Wastes:     The Buyer will not transport any hazardous materials
             on or across any of the Seller's real estate.  This
             includes any material or substance, which is:

               (i) designated as a "hazardous substance" pursuant
                   to Section 311 of the Federal Water Pollution
                   Control Act, as amended;

              (ii) defined as a "hazardous waste" under Section
                   3004 of the Federal Resource Conservation and
                   Recovery Act, as amended; and

             (iii) defined as a `hazardous substance" pursuant to
                   Section 101 of the Comprehensive Environmental
                   Response, Compensation and Liability Act.

Notices:    Any notice required or contemplated in this
Agreement
             will be in writing and sent by registered or
             certified mail, return receipt requested, postage
             prepaid, or recognized overnight courier service at
             this address:

             -- if to the Buyer:

                       150 West Market Street
                       Suite 100
                       Indianapolis, Indiana 46204

             -- if to the Seller:

                       4100 Edison Lakes Parkway
                       Mishawaka, Indiana 46545
(National Steel Bankruptcy News, Issue No. 19; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


NATIONSRENT INC: Files Consensual Plan of Reorganization in Del.
----------------------------------------------------------------
NationsRent, Inc., (NRNQE) has taken a significant step toward
completion of its restructuring by filing a consensual plan of
reorganization. The plan has been developed, and is supported
by, the Company's prepetition senior secured lenders and the
official committee of unsecured creditors.

The next step is a hearing scheduled for January 27, 2003, to
approve a disclosure statement for the purpose of soliciting
approval of the proposed plan. Under the proposed plan,
substantially all of the claims of the Company's prepetition
senior secured lenders and general unsecured creditors will be
converted into equity.

"With this milestone behind us, we are well on our way toward
completion of our restructuring, with the target to emerge from
chapter 11 by the end of March 2003," stated D. Clark Ogle, the
Company's Chief Executive Officer. "NationsRent has made
substantial progress within the last year as a result of the
dedicated efforts of the Company's employees and the support of
our valued customers and vendors. The Company is extremely
grateful for the hard work and commitment shown by the
NationsRent team."

The consensual plan of reorganization was facilitated, in large
part, by a new group of investors that have established a
leadership role in the Company's prepetition senior secured
lender group. This group of investors is led by Boston-based
Phoenix Rental Partners and The Baupost Group. With the support
of this new group, the proposed plan positions the Company for
growth with a well-financed, conservative balance sheet.

Headquartered in Fort Lauderdale, Florida, NationsRent is one of
the country's leading construction equipment rental companies
and operates 247 locations in 26 states. NationsRent branded
stores offer a broad range of high-quality construction
equipment with a focus on superior customer service at
affordable prices with convenient locations in major
metropolitan markets throughout the U.S. More information on
NationsRent is available on its home page at
http://www.nationsrent.com

Phoenix Rental Partners, L.L.C., was formed in 2001 for the
specific purpose of acquiring debt securities of NationsRent in
the secondary markets. In 2002, Phoenix formed an investment
alliance with Baupost to leverage the combined talents and
capital of each organization as it relates to distressed
investment opportunities in the construction equipment rental
industry. Phoenix is majority owned and managed by Bryan Rich
and Douglas Suliman who have over 30 years of operating and
financing experience in the construction equipment rental
industry. CONTACT: Bryan Rich and Douglas Suliman, Phoenix
Rental Partners, (508) 351-1573.

The Baupost Group, L.L.C., was established in 1982, and today
manages approximately $3.5 billion of equity capital for a
diverse group of clients. The firm employs a value oriented
investment philosophy, and is an experienced investor in a broad
range of asset classes, including securities and trade claims of
companies in financial distress as well as performing and non-
performing bank loans. CONTACT: Thomas Blumenthal and James
Mooney, The Baupost Group, L.L.C., (617) 210-8388.


NEON COMMS: Completes Workout and Exits Chapter 11 Bankruptcy
-------------------------------------------------------------
NEON(R) Communications, Inc., a leading provider of advanced
optical networking solutions and services in the northeast and
mid-Atlantic markets, has completed its financial restructuring
and has emerged from Chapter 11 proceedings. Its Plan of
Reorganization was approved by the United States Bankruptcy
Court for the District of Delaware on November 13, 2002, and
became effective on December 20, 2002.

Under the Company's Plan of Reorganization, existing shares of
NEON Communications stock (NOPTQ-pk) have been cancelled. The
Company has issued new shares of common stock, 12% cumulative
convertible preferred stock and warrants to execute the Plan and
raise approximately $15.9 million in new equity financing from
former major creditors, including Northeast Utilities. NEON's
new Board of Directors consists primarily of representatives
from its former major creditors and new investors. The
management team in place during the restructuring will continue
to guide the Company and position it for continued long-term
growth.

Stephen Courter, NEON's chairman and CEO said: "NEON's timely
emergence from Chapter 11 and our ability to grow our business
during the restructuring period reflects the overwhelming
support we received from our creditors, the loyalty of our
customers and the commitment of our employees." Mr. Courter went
on to say "NEON emerges as a financially stronger company. We
are debt free, EBITDA positive and we have new financing in
place that we believe fully funds our business plan. We are well
positioned to grow our business and to continue providing
reliable service to our customers."

NEON Communications is a wholesale provider of high bandwidth,
advanced optical networking solutions and services on intercity,
regional and metro networks in the twelve-state northeast and
mid-Atlantic markets.


NETIA HOLDINGS: Completes Subscription for Series H Shares
----------------------------------------------------------
Netia Holdings S.A. (WSE: NET), Poland's largest alternative
provider of fixed-line telecommunications services (in terms of
value of generated revenues), announced that the subscription
for series H shares and issuance of EUR 50 million Senior
Secured Notes due 2008 were successfully completed.

There were 312,626,040 series H shares allocated out of a total
of 317,682,740 series H shares offered to Netia's creditors in
accordance with the agreed terms of Netia's restructuring. The
price of the series H shares was PLN 1.0826241 per share.

In addition, Netia Holdings B.V., Netia's Dutch subsidiary
issued EUR 49,482,000 of its 10% Senior Secured Notes due 2008
in exchange for the existing notes of Netia Holdings B.V. and
Netia Holdings II B.V. in accordance with the agreed terms of
the restructuring and the composition plans for each of Netia's
Dutch subsidiaries.

Wojciech Madalski, President and CEO of Netia, commented: "The
issuance of series H shares and new notes constitute the most
important final milestones in the implementation of the
Restructuring Agreement reached with our creditors in March
2002. I am glad that we have concluded these phases of the
restructuring successfully. Over 98% of entitled creditors took
the opportunity to swap their liabilities into series H shares
and will acquire the shares representing over 91% of Netia's
share capital following this issuance. Currently the listing of
series H shares on the Warsaw Stock Exchange is subject to the
required registration by the court of the capital increase and
an approval by the Warsaw Stock Exchange."

DebtTraders says that Netia Holdings SA's 13.5% bonds due 2009
(NETH09NLN2) are trading at about 17 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NETH09NLN2
for real-time bond pricing.


NETIA: Extends Polish Prospectus Validity for Ser. J & K Shares
---------------------------------------------------------------
Netia Holdings S.A. (WSE: NET), Poland's largest alternative
provider of fixed-line telecommunications services (in terms of
value of generated revenues), extended the validity of its
Polish prospectus, published on December 2, 2002, until
April 30, 2003.

This extension is necessary under Polish law in connection with
the proposed issuances in early 2003 of series I and series II
warrants, which authorize their holders to subscribe for series
J shares (subscription warrants), and series III warrants, which
authorize their holders to subscribe for series K shares.

The issuances of series I, series II and series III warrants
constitute the next phase of Netia's ongoing restructuring and
are aimed at facilitating the issuance of shares representing
15% of Netia's share capital post restructuring (series J
shares) to holders of record of Netia's shares on the end of the
day preceding the day of subscription for Series H shares and
implementation of the stock option plan (series K shares).


NTL INC: Publishes Supplementary Prospectus Under UK Regulations
----------------------------------------------------------------
NTL Incorporated (OTC BB:NTLDQ; NASDAQ Europe:NTLI) - NTL
Communications Corp., announced that a further supplementary
prospectus has been published under the UK Public Offers of
Securities Regulations 1995 in relation to the proposed offering
to persons in the UK of warrants in connection with the Second
Amended Joint Reorganization Plan confirmed by the United States
Bankruptcy Court for the Southern District of New York on
September 5, 2002.

Copies of the further supplementary prospectus are available
free of charge at NTL's offices at Bartley Wood Business Park,
Hook, Hampshire, RG27 9UP, UK, during normal business hours on
any weekday (excluding Saturdays and public holidays) until the
effective date of the Reorganization Plan.


PACIFIC GAS: Gets Go Signal to Use $110M for Diablo Canyon Proj.
----------------------------------------------------------------
The Diablo Canyon Power Plant is a nuclear power plant located
in San Luis Obispo County, California.  The plant is the largest
generating station on Pacific Gas and Electric Company electric
system and provides power for over 2,000,000 northern and
central Californians from its two 1,100-megawatt units.  The two
units at the Diablo Canyon Power Plant utilize six-low pressure
turbines and two high-pressure turbines to generate electricity.
The six installed LP turbines were purchased in the late 1960s
from Westinghouse Electric Corporation as part of the plant's
construction.  PG&E also purchased three location-specific LP
turbine rotor spares in 1979.  Each spare is interchangeable
with one location in either unit.

Jeffrey L. Schaffer, Esq., at Howard, Rice, Nemerovski, Canady,
Falk & Rabkin, PC, reports that all nine rotors are presently
experiencing stress corrosion cracking (SCC) in the blade
attachment area.  To address this problem, PG&E has been
performing major inspections, analyses and maintenance on the
existing nine rotors.  At each outage, PG&E removes one rotor
and replaces it with a spare.  The removed rotor is inspected
for cracks, analyzed for estimated time to failure and repaired
as necessary to restore a minimum level of short-term
reliability. The repaired rotor is then used to replace the next
rotor of identical design when that rotor is, in turn, removed
for inspection, analysis and repair.

The maintenance program, however, merely monitors, and
sometimes, postpones the time to failure.  It does not provide a
long-term solution to the SCC problem.  Mr. Schaffer indicates
that a long-term refurbishment fix for the SCC design defect
would cost more than $44,000,000 for the nine rotors.

Additionally, because of the geometric constraints of the
existing turbines, Mr. Schaffer maintains that a long-term
refurbishment fix may not be possible in addressing high cycle
fatigue (HCF) design defect in the blade roots, where the blades
attach to the rotor.  Mr. Schaffer explains that HCF cracking
could result in one or more blades separating from the rotor.
This would most likely result in forced shutdown and outage of
60 days or longer.

For the short term, PG&E has undertaken a program of increased
inspections and major, temporary repairs, as necessary to
restore minimum level of acceptable reliability.  The temporary
repairs consist of complete replacement of selected rows of
blades on each turbine rotor.  According to Mr. Schaffer, this
program reduces, but does not eliminate, the probability of a
forced outage.  While the program restarts the clock relative to
time to failure, it does not fix the underlying problem.  Mr.
Schaffer represents that the continued plant operation without
LP turbine replacement would require periodic, repeated full row
blade replacements.  The estimated cost of a re-blading program
is $35,000,000.

In view of the limitations of the ongoing maintenance program,
the Debtors started a Diablo Canyon Turbine Retrofit Project,
which provides for the design, fabrication, delivery and
installation of six LP Turbine retrofits.  Mr. Schaffer asserts
that the LP turbines must be retrofitted to avoid forced outages
and to ensure the reliability of this critical generating
resource.  If the retrofitting is not done, he contends that
there will be a significantly higher risk of forced outages.
Mr. Schaffer explains that the retrofitting will bring the added
benefit of increased efficiency and is anticipated to increase
the Diablo Canyon Power Plant's output by 50 megawatts.

Thus, PG&E sought and obtained the Court's authority to enter
into contractual commitments and incur capital expenditures
not exceeding $110,000,000 in connection with the Turbine
Retrofit Project.  Mr. Schaffer relates that PG&E has conducted
a competitive bidding process and its team of engineering,
business and technical experts have thoroughly evaluated various
proposals.

"At the moment, PG&E is in final contract negotiations with a
highly regarded multinational firm," Mr. Schaffer adds. (Pacific
Gas Bankruptcy News, Issue No. 50; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


PEACE ARCH: August 31 Balance Sheet Upside-Down by C$5 Million
--------------------------------------------------------------
Peace Arch Entertainment Group Inc., (AMEX: "PAE"; TSE: "PAE.A",
"PAE.B") announced its results for three months and year ended
August 31, 2002.

During the fourth quarter, the Company delivered eight episodes
of our new 13-episode series Whistler Stories. Production
commenced on its documentary special Fantasy Lands set to air on
Discovery in the US. As well, the Company was in production of
the third 13-episode season of its prime-time series, Animal
Miracles (Miracle Pets in the US).

In the fourth quarter, the Company's revenue totaled C$820,000,
compared with C$6.2 million in the fourth quarter of FY2001. The
Company reported a net loss of C$4.2 million for the three
months ended August 31, 2002, compared with a net loss of C$12.3
million in the fourth quarter of FY2001. Diluted earnings per
share was calculated on 3,887,844 weighted average shares
outstanding in the most recent quarter and in the same quarter
of the prior year. The loss for the quarter was largely due to
an increase in amortization of investment in television
programming, due to a reduction in the Company's estimates of
ultimate revenues, and to a C$1.7 million bad debt. The bad debt
relates to the Company's guarantee of a third party loan, which
is currently in default. As well, during the quarter, the
Company wrote-off the remaining balance of goodwill of
C$166,000.

Selling, general and administrative (SG&A) expenses decreased by
46% to C$747,000 for the quarter, compared with C$1.4 million in
the prior-year period, reflecting the Company's initiative to
reduce overhead costs.

Earnings before interest, taxes, depreciation and amortization
(EBITDA) for the three months ended August 31, 2002 totaled a
deficit of C$4.1 million, compared with a deficit of C$11.5
million in the comparable quarter of last year.

For the first quarter of 2003, the Company anticipates a
decrease in revenue when compared to the comparable quarter of
fiscal 2002, due to a reduction in production services revenue
for dramatic programming. However, the Company anticipates that
its revenue from proprietary programming will double, due to the
delivery of episodes that were in production at the end of the
fourth quarter.

For the year ended August 31, 2002, the Company's revenue
declined to C$6.5 million, compared with C$54.9 million in the
prior year. Increased amortization of the Company's investment
in television programming also contributed to a net loss of
C$7.0 million for the year ended August 31, 2002, compared with
a net loss of C$14.3 million in the prior year. Diluted earnings
per share were calculated on 3,887,844 weighted average shares
outstanding for both the current and prior year.

During the year the Company repaid a C$7.4 million of
subordinated debt and, to date, has fully repaid such debt prior
to its due date of December 31, 2002. As well, in the first
quarter of FY 2002, the Company restructured a C$7.8 million
unsecured liability into 10% term debt.

The Company had a working capital deficiency at August 31, 2002
due in part to non-payment by a US broadcaster and poor sales
results due to the weak US syndication market. The Notes to the
Company's financial statements for the year ended August 31,
2002, reflect the Company's requirement for additional capital
to enable it to continue operations. The Company has entered
into the following agreements which, subject to their closing,
will correct its working capital deficiency.

At August 31, 2002, the Company's balance sheet shows a total
shareholders' equity deficit of about C$5.2 million.

On December 18th, the Company announced that it has entered into
an agreement to acquire a business and certain related assets
and to complete a $1.5 million private placement financing, the
proceeds of which will be used for working capital of the
combined entity. The acquisition transaction is expected to
contribute additional working capital of approximately $2.5
million within eighteen months. The Company has also entered
into agreements to issue convertible instruments in
consideration for restructuring a $1.6 million loan guarantee
and $7.3 million of term debt. The agreements provide that there
are no set repayment dates and that payment and security for
such amounts shall be restricted to the assets and undertaking
of the Company prior to closing the acquisition and financing
transactions. These transactions are scheduled to close in
January, subject to shareholder approval.

Juliet Jones, President of Peace Arch Entertainment Group Inc.
commented, "This has been a challenging year for the Company,
however, I believe that we have made some significant
accomplishments. We have substantially reduced our debt,
continued to build our factual programming subsidiary, despite
these financial challenges, and have negotiated a series of
transactions that I believe will not only put the Company on
solid financial ground, but will also substantially increase our
business. I believe 2003 will be an excellent year for the
Company."

The Company also announced that effective December 17, 2003, due
to his retirement, Derek Douglas, Senior Vice President of
Growthworks Capital, has resigned from the Board of Directors.
Juliet Jones commented, "I would like to wish Derek Douglas all
the best for his retirement, and to thank him for supporting
Peace Arch over the two years that he has served on our Board."

Peace Arch Entertainment Group Inc., one of Canada's foremost
entertainment companies, creates, develops, produces and
distributes proprietary television programming for worldwide
markets. Peace Arch is headquartered in Vancouver, British
Columbia.

For additional information on Peace Arch Entertainment Group,
please visit the Company's new Web site at
http://www.peacearch.com


PERKINELMER: Fitch Assigns BB- Senior Subordinated Debt Rating
--------------------------------------------------------------
Fitch Ratings assigned a 'BB-' credit rating to PerkinElmer's
senior subordinated debt rating. The rating applies to the
issuance of $300 million in senior subordinated notes (8.875%)
due 2013. Fitch also confirmed the 'BB+' bank loan rating, which
is applicable to the proposed senior secured credit facilities,
consisting of a $100 million revolving credit facility expiring
in December 2007 and a six-year term loan of up to $345 million.

PerkinElmer currently maintains a $200 million revolving credit
facility that expires in March 2003 and a $100 million revolving
credit facility that expires in March 2006. Additionally, Fitch
affirmed the 'BB+' senior unsecured credit rating. The debt
rating of 'BB+' applies to $115 million of outstanding unsecured
notes due 2005, and approximately $404 million of zero coupon
convertible debentures due 2020. The commercial paper debt
rating has been withdrawn. The credit ratings of PerkinElmer
have been removed from Rating Watch Negative. The Ratings
Outlook is Stable.

Since the placement on Negative Rating Watch on August 12, 2002,
PerkinElmer has successfully executed steps to address immediate
liquidity concerns by amending the credit facilities in
September to avoid a possible violation in a financial covenant,
re-negotiating the terms of the receivables securitization
program to stop an accelerated termination, repaying operating
leases due in February 2003, and refinancing the capital
structure to pre-fund the zero convertible debt mitigating the
probable exercise of an upcoming put option and to pay down the
senior notes containing a restrictive covenant to be secured.
These actions support Fitch's removal from Rating Watch
Negative.

On December 26, 2002, the company expects to close the private
placement of the $300 million in senior subordinated notes, and
the proposed senior secured credit facilities. The proceeds from
the senior subordinated issuance and a portion of the term loan
under the senior secured credit facilities will be placed in an
escrow account to fund the cash tender offer for all outstanding
zero convertible debt. The pay down of the zero convertibles is
contingent on obtaining the funding from the senior subordinated
issuance and the senior secured facilities, as well as the
payment of a $30 million operating lease. The final amount of
the term loan will be reduced on a dollar-for-dollar basis by
the amount of senior notes outstanding after expiration of the
cash tender offer on December 26.

The company had cash and cash equivalents of approximately $97
million at the end of the third quarter, with additional
liquidity from the proposed $100 million revolving credit
facility, to be used for working capital needs. The one-year
$200 million and five-year $100 million revolving credit
facilities will be terminated as part of the refinancing plan.
At the end of the third quarter, approximately $73 million was
outstanding against the credit facilities. Leverage, determined
by debt-to-EBITDA, is expected to increase over anticipated
levels after completion of the refinancing transactions, but
remains appropriate for the current credit rating. Fitch expects
that improvement in credit metrics will occur in the
intermediate term, as excess cash flows are applied to debt
reduction.

Fitch will monitor the progress of debt refinancing plan, and
overall sales performance through the fourth quarter, typically
strongest for revenue generation. The current rating accounts
for weakness in various industrial markets, and continued
cautiousness in capital spending from the pharmaceutical and
biotechnology industries. The current rating also reflects the
strong reputation and market leading positions in
instrumentation, in addition to the benefit of the aggressive
efforts of PerkinElmer to increase operating margins through
working capital improvements, headcount reductions, facility
rationalization, and Asian manufacturing and raw materials
sourcing.


PHOENIX INDEMNITY: S&P Junks Ratings at CCCpi from Bpi
------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty
credit and financial strength ratings on Phoenix Indemnity
Insurance Co., to 'CCCpi' from 'Bpi'.

"The rating action reflects the implied rating on Millers
American Group Inc., of which Phoenix is a member, and Phoenix's
marginal operating performance," explained Standard & Poor's
credit analyst Alan Koerber.

Based in Fort Worth, Tex., and domiciled in Arizona, Phoenix
writes mainly private passenger auto insurance. Business in the
company's major states of operations--Arizona, New Mexico, Utah,
Nebraska, and Nevada--constitutes nearly 90% of its total
revenue, and its products are distributed primarily through
independent agents.

The company, which began business in 1988, is licensed in 24
states and is a member of Millers American Group Inc., a very
small insurance group with year 2001 surplus of $5.8 million.
Insurance affiliates include The Millers Insurance Co. ('CCCpi'
counterparty credit and financial strength ratings).


PLYMOUTH RUBBER: Completes Debt Workout & Settles Loan Default
--------------------------------------------------------------
Plymouth Rubber Company, Inc., (Amex: PLR.A, PLR.B) has
completed the restructuring of its indebtedness following
extensive negotiations with its lenders to refinance its
existing debt and to resolve the Company's default under its
existing loan agreements. The Company had previously announced
that it had reached an agreement in principle with these same
lenders, subject to the execution of mutually satisfactory
documentation.

As previously reported, the restructuring will improve the
Company's overall financial position providing immediate benefit
in the form of reduced cash flow required for debt service.

Under the new arrangements, the equipment lenders have agreed to
(i) reduce principal payments on debt from approximately
$9,200,000 to $4,100,000 for the period April 1, 2002 through
September 30, 2005; (ii) establish the maturity dates of the
remaining debt, approximately $4,500,000 on October 1, 2005, and
$1,300,000 between October 1, 2005 and May 1, 2008; (iii)
eliminate financial covenants; (iv) waive existing defaults; and
(v) rescind prior demands for accelerated payments.

As part of these arrangements, the Company is granting to the
lenders (i) a mortgage on its manufacturing facility in Canton,
Massachusetts and (ii) security interests in all of its patents,
trademarks, intangibles, accounts, fixtures, products and
proceeds.

Plymouth Rubber Company, Inc., manufactures and distributes
plastic and rubber products, including automotive tapes,
insulating tapes, and other industrial tapes and films. The
Company's tape products are used by the electrical supply
industry, electric utilities, and automotive and other original
equipment manufacturers. Through its Brite-Line Technologies
subsidiary, Plymouth manufactures and supplies highway marking
products.


QWEST: FCC Clears Re-Entry into 9-State Long-Distance Business
--------------------------------------------------------------
Qwest Communications International Inc., (NYSE: Q) received
unanimous approval from the Federal Communications Commission
(FCC) to re-enter the long-distance business in nine states:
Colorado, Idaho, Iowa, Montana, Nebraska, North Dakota, Utah,
Washington and Wyoming. Qwest provides local service to more
than nine million customer lines in those states.

"This is a great day for Qwest and a great day for millions of
our customers," said Steve Davis, Qwest senior vice president of
policy and law. "We're going to offer our customers simplified
long-distance service and the convenience of getting all of
their telecommunications services from one company."

Qwest will soon announce details of its long-distance plans and
packages and will begin taking customer orders by mid-January.
Additionally, Qwest will file an application to re-enter the
long-distance business in three additional states, Oregon, New
Mexico and South Dakota, in January. Qwest anticipates filing
applications for its final two states, Arizona and Minnesota, in
early 2003.

"We commend the FCC for its comprehensive and exhaustive review
of our long-distance application," Davis added. "Today's
approval definitively proves that our markets are open to
competition and that we have met the requirements of the
Telecommunications Act of 1996."

Residential and business customers in Qwest's region could save
more than $1 billion annually with Qwest's re-entry into the
regional long-distance business, according to a study by
Professor Jerry A. Hausman, director of the Massachusetts
Institute of Technology Telecommunications Research Program.

Qwest has spent more than $3 billion to open its local markets
to competitors and comply with the act. Qwest provides long-
distance services outside of its 14 state local service
territory. Under the act, Qwest can re-enter the long-distance
business in states in its local service territory once its
application to the FCC has been approved.

Qwest Communications International Inc., (NYSE: Q) is a leading
provider of voice, video and data services to more than 25
million customers. The company's 53,000-plus employees are
committed to the "Spirit of Service" and providing world-class
services that exceed customers' expectations for quality, value
and reliability. For more information, please visit the Qwest
Web site at http://www.qwest.com

                          *     *     *

As reported in Troubled Company Reporter's November 22, 2002
edition, Standard & Poor's Ratings Services lowered its
corporate credit rating on diversified telecommunications
provider Qwest Communications International Inc., to 'CC' from
'B-' and its rating on the senior unsecured debt issues at
funding entity Qwest Capital Funding Inc., to 'C' from 'CCC+'.
Qwest Capital Funding's public debt is guaranteed by Qwest
Communications International. The rating action affects about
half of the total $26 billion of debt outstanding as of
September 30, 2002.

At the same time, Standard & Poor's placed these ratings on
CreditWatch with negative implications. In addition, Standard &
Poor's affirmed its existing 'B-' corporate credit and senior
unsecured debt ratings on telephone operating subsidiary Qwest
Corp. The outlook for the ratings on Qwest Corp., continues to
be developing.


QWEST COMMS: Private Debt Exchange Offer Cuts Debt by $1.9 Bill.
----------------------------------------------------------------
Qwest Communications International Inc., (NYSE: Q) announced the
successful results of its offer to exchange $12.9 billion
aggregate principal amount of outstanding debt securities of
Qwest Capital Funding, Inc., a wholly-owned subsidiary of QCII,
in a private placement for new debt securities. As of the
expiration of the offer on Friday, December 20, 2002,
approximately $5.2 billion in total principal amount of the QCF
notes had been validly tendered and accepted for exchange. This
will reduce Qwest's total debt by over $1.9 billion -- from
approximately $24.5 billion to approximately $22.6 billion --
and extend some near-term maturities.

Over the past six months, Qwest's new leadership team has
accomplished a number of steps to reduce debt and improve
liquidity, including closing the sale of the first phase of its
directory publishing business, QwestDex; amending the company's
credit facility; and completing a new term loan.

"The successful results of this private exchange offer mark
another significant step in our plans to improve liquidity, and
delever and strengthen our balance sheet, which we have
undertaken to benefit all of the company's constituencies," said
Oren Shaffer, Qwest vice chairman and CFO. "We continue to make
progress on improving Qwest's financial position to ensure the
long-term success of the company."

The settlement date for issuance of the new notes will be
December 26, 2002. The numbers contained in this release are
subject to final settlement calculations.

The offer was made only to qualified institutional buyers and
institutional accredited investors inside the United States and
to non-U.S. investors located outside the United States. The new
notes will not, upon issuance, be registered under the
Securities Act of 1933, as amended, and may not be offered or
sold in the United States absent registration or an exemption
from registration.

Qwest Communications International Inc., (NYSE: Q) is a leading
provider of voice, video and data services to more than 25
million customers. The company's 53,000-plus employees are
committed to the "Spirit of Service" and providing world-class
services that exceed customers' expectations for quality, value
and reliability. For more information, please visit the Qwest
Web site at http://www.qwest.com

Qwest Communications' 7.50% bonds due 2008 (QUS08USR4), says
DebtTraders, are trading at about 77 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=QUS08USR4for
real-time bond pricing.


RFS ECUSTA: Wants Approval to Hire Deloitte for Financial Advice
----------------------------------------------------------------
RFS Ecusta Inc., and RFS US Inc., ask for authority from the
U.S. Bankruptcy Court to retain and employ Deloitte & Touche LLP
as their Financial Advisor.

The Debtors believe that they will require the assistance of an
experienced financial consultant such as Deloitte during their
Chapter 11 cases. Deloitte has extensive experience in
reorganization cases and enjoys an excellent reputation for
services it has rendered in large and complex Chapter 11 cases
on behalf of debtors, creditors, and creditors' committees
throughout the United States. The Debtors submit that Deloitte
is well-qualified to advise the Debtors.

In its capacity as the Debtors' financial advisor, Deloitte is
prepared to:

   A. assist, as requested by the Debtors, in evaluating
      reorganization strategies and alternatives available to the
      Debtors;

   B. assist, as requested by the Debtors, with the arrangement
      of alternative DIP financing and exit financing;

   C. assist the Debtors with respect to strategic alternatives
      to maximize business enterprise value, consult with the
      Debtors to evaluate the appropriate debt capacity in light
      of its projected cash flows, and assist the Debtors in
      developing a plan of reorganization;

   D. assist, as requested by the Debtors, with the arranging of
      a sale of their business;

   E. provide assistance, as requested by the Debtors, with
      reconciling the schedules and statements to creditor proof
      of claims, with preparing objections to proof of claims,
      and with analyzing assumption and rejection issues
      regarding executory contracts and leases;

   F. attend and provide assistance to the Debtors at meetings
      with the Committee and its counsel and representatives, or
      with the Debtors' pre-petition lender, its counsel, and
      representatives; and

   G. provide such other services, as requested by the Debtors,
      and agreed to by Deloitte.

The normal hourly rates of Deloitte are:

           Partner & Managing Director       $510-$600
           Senior Manager & Manager          $300-$500
           Senior & Staff                    $200-$350
           Paraprofessionals                 $75

Deloitte has agreed to cap its professional fees at the lesser
of actual hourly fees incurred or a maximum blended average
hourly rate of $300 per hour.

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.


SCIENTIFIC GAMES: S&P Rates $340-Mil. Sr. Credit Facility at BB-
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' rating to
lottery and pari-mutuel operator Scientific Games Corp.'s $340
million senior secured credit facility. Proceeds from the new
bank facility will be used to refinance outstanding debt under
the company's existing bank facility.

At the same time, Standard & Poor's affirmed its 'BB-' corporate
credit rating on the company. The ratings on the company's
existing bank facility were withdrawn.

The outlook is stable. The New York, New York-based company's
total debt outstanding as of September 30, 2002 was
approximately $345 million.

"We expect that the company will maintain its leading market
positions and that its solid financial profile will provide
financial flexibility to pursue new contracts and to seek out
other strategic growth opportunities," said Standard & Poor's
credit analyst Michael Scerbo.

The ratings on Scientific Games reflect the company's leadership
position in the pari-mutuel gaming and instant-ticket lottery
industries, long-term customer contracts, a diversified customer
base, and improved credit measures. These factors are tempered
by competitive market conditions, and the mature nature and
capital intensity of the lottery industry.

EBITDA for the nine months ended September 30, 2002 was $93
million, an approximately 16% increase over the prior-year
period, due to the continued strength of the lottery and pari-
mutuel businesses despite the adverse general economic
conditions.

New York, New York-headquartered Scientific Games is the leading
supplier of instant tickets, systems, and services to lotteries,
and the leading supplier of wagering systems and services to
pari-mutuel operators.


SEVEN SEAS: Noteholders File Involuntary Chapter 7 Petition
-----------------------------------------------------------
Seven Seas Petroleum Inc., (Amex: SEV) has received notice that
the holders of a majority of the Company's Senior Subordinated
$110 Million Notes have filed an involuntary bankruptcy
petition, Chapter 7, with the United States Bankruptcy Court,
Southern District of Texas, Houston Division.

As previously announced, the Company is in default under its
Senior Notes due to a failure to make a scheduled $6,875,000
interest payment on November 15, 2002.

Seven Seas will consider various responses and alternatives
prior to taking any action with respect to the petition. The
Company's subsidiaries intend to continue operations in the
ordinary course and proceed with the closing of the previously
announced sale of their 57.7% participating interest in the
shallow Guaduas Oil Field and related assets.

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


SEVEN SEAS PETROLEUM: Involuntary Chapter 7 Case Summary
--------------------------------------------------------
Alleged Debtor: Seven Seas Petroleum Inc
                 5555 San Felipe Suite 1700
                 Houston, Texas 77056

Involuntary Petition Date: December 20, 2002

Case Number: 02-45206                 Chapter: 7

Court: Southern District of Texas     Judge: Wesley W. Steen
        (Houston)

Petitioners' Counsel: James Franklin Donnell, Esq.
                       Andrews & Kurth
                       600 Travis
                       Suite 4200
                       Houston, Texas 77002
                       Tel: 713-220-4251

Petitioners: FamCo Value Income Partners LP
              121 Outrigger Mall
              Marina del Rey, CA 90292

              Merced Partners Limited Partnership
              601 Carlson Parkway
              Minnetonka, MN 55305

              Tamarack International LLC
              601 Carlson Parkway
              Minnetonka, MN 55305

              Simplon Partners LP
              630 Fifth Avenue Suite 1956
              New York, NY 10111

              SP Offshore Limited
              630 Fifth Avenue Suite 1956
              New York, NY 10111

              Pamco Cayman Ltd
              13455 Noel Road Suite 1300
              Dallas, TX 75240

              Pam Capital Funding LP
              13455 Noel Road Suite 1300
              Dallas, TX 75240

              ML CBO IV (Cayman) Ltd
              13455 Noel Road Suite 1300
              Dallas, TX 75240

              Wholesale Realtor Supply
              509 Spring Avenue
              Elkins Park, PA 19027-2616

              Alma Elias
              509 Spring Avenue
              Elkins Park, PA 19027-2616

Amount of Petitioners' Claims: $65,367,000


SHELBOURNE PROPERTIES: Closes Sutton Square Sale for $17 Million
----------------------------------------------------------------
Shelbourne Properties II, Inc., (Amex: HXE) sold its property
located in Raleigh, North Carolina commonly referred to as
Sutton Square for a purchase price of $16,750,000. After
satisfying the debt encumbering the property, closing
adjustments and other closing costs, net proceeds were
approximately $10,000,000.

The Board of Directors and Shareholders of Shelbourne Properties
II, Inc., have previously approved a plan of liquidation for
Shelbourne Properties II, Inc.  For additional information
concerning the proposed liquidation including information
relating to the properties being sold please contact Andy
Feinberg at (617) 570-4620 or John Driscoll at (617) 570-4609.


SKAGIT PACIFIC: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Skagit Pacific Corporation
         500 Metcalf Street Bldg A1
         Sedro Woolley, Washington 98284

Bankruptcy Case No.: 02-25027

Type of Business: Modular housing manufacturing facility.

Chapter 11 Petition Date: December 11, 2002

Court: Western District of Washington (Seattle)

Judge: Philip H. Brandt

Debtor's Counsel: Larry B. Feinstein, Esq.
                   Vortman & Feinstein
                   500 Union St #500
                   Seattle, WA 98101
                   Tel: (206) 223-9595

Total Assets: $2,265,736

Total Debts: $2,608,915

Debtor's 20 Largest Unsecured Creditors:

Entity                                            Claim Amount
------                                            ------------
Engineered Panels Systems                             $299,849
500 Metcalf St.
Sedro Woolley, WA 98282

Doug Peterson                                         $205,388

Bayview Construction                                  $157,701

OSO Lumber & Hardware                                  $74,488

Westmark Products                                      $67,970

Alaska West Express                                    $67,861

Fidelity Contract Services                             $65,519

Fidelity Contract Services                             $65,519

Trane Co.                                              $60,701

Olsen Fire Protection NW                               $52,415

Doug Peterson                                          $48,363

Tip Top Construction                                   $45,958

Tip Top Constrictuion                                  $45,958

Carney Badley Smith & Spellman                         $42,932

Northland Furniture Co.                                $23,566

Angelo Bellizzi                                        $21,363

Jean Peterson Business Services                        $17,700

Peak Oilfeild Service                                  $14,377

Greer Steel                                            $12,413

Frontier Bank                                          $11,862


SOUTHERN STATES POWER: Auditors Express Going Concern Doubt
-----------------------------------------------------------
Southern States Power Company, Inc., is a business development
company that has elected to be regulated pursuant to Section 54
of the Investment Company Act of 1940.  A business development
company is an investment company designed to assist eligible
portfolio companies with capital formation. Business development
companies are required to offer, and many times do render,
substantial and continuing management advice.

On July 31, 2002, the Company's Board of Directors voted to be
regulated as a business development company.  The decision to
become a business development company was made primarily to
better reflect the Company's  anticipated future business and
developing relationships.  The Company intends to focus its
investments in companies engaged in the production, sale and
distribution of biodiesel fuel and other alternative energy
solutions.  Biodiesel is a diesel fuel made from a vegetable
oil, rather than petrochemical oil, and is officially designated
by the EPA as an alternative fuel under the Energy Policy Act.
Biodiesel is a unique alternative fuel because it can be used in
diesel engines without any change or modifications to the
engines, vehicles, or ground fueling equipment.

Since its designation as a business development company,
Southern States has made investments in the following companies:
Agua Mansa Bioenergy, LLC; Biofuel Exchange Corporation; Buckeye
Biofuels, LLC; and  U.S. Fuel Partners, LLC.

In November 2002, the Company raised a total of $60,000 through
the issuance of convertible debentures.  The debentures mature
in November 2003 and bear interest at the rate of eight percent
(8%).  Of these debentures, $30,000 are convertible into common
stock of the Company at a price of $0.005, and $30,000 are
convertible at a price of $0.0075. The value of the beneficial
conversion feature, approximately $30,000,  will be expensed
either when the debenture is converted or over the life of the
obligation.

On November 11, 2002, the Company filed a Form 1-E notifying the
Securities & Exchange Commission of its intent to sell $750,000
of the Company's common stock pursuant to a Regulation E
exemption.  This notification became effective on November 22,
2002 and the Company subsequently issued 4,700,000 shares of
common stock to repay $23,500 on a convertible debenture, and
1,300,000 shares of common stock to repay $6,500 on a second
convertible debenture.  As a result of these transactions, the
Company recorded approximately $15,000 in beneficial conversion
costs in the subsequent period.

For the three months ended October 31, 2002 the company
generated revenues in the amount of $12,000 from operations as
compared to $230,000 for the same period a year earlier ending
October 31, 2001.  Revenues for the 2001 quarter included
$181,000 in fees from the rental of power generation equipment.
During the  fiscal year ended April 30, 2002, the Company ceased
operating the rental equipment and intends to sell  the
equipment.  Accordingly, no fees were generated from the rental
of power generation equipment in the quarter ending October 31,
2002.  Fuel sales declined in the quarter ended October 31, 2002
owing to the  Company's focus on developing its business model
as a business development company.

The Company incurred a loss of $1,570,000 for the quarter ended
October 31, 2002, compared to a loss of $419,000 for the first
quarter of the prior year, an increase of $1,151,000.

For the six month period ended October 31, 2002 the company
generated revenues in the amount of $31,000 from operations as
compared to $429,000 for the same  period a year earlier ending
October 31, 2001.  Revenues for the 2001 six month period
included $369,000 in fees from the rental of power generation
equipment.

The Company incurred a loss of $2,036,000 for the six month
period ended October 31, 2002, compared to a loss of $1,500,000
for the same six month period of the prior year, an increase of
$536,000.

The Company has incurred operating losses from inception and has
generated an accumulated deficit of  $17,221,000.  The Company
requires additional capital to meet its operating requirements.
These factors raise substantial doubt regarding the Company's
ability to continue as a going concern.  Management plans to
increase cash flows through the sale of securities and,
eventually, through the investment in profitable operations.
There are no assurances that such plans will be successful.

As of October 31, 2002, the Company had a bank overdraft of
$4,000 and current liabilities exceeded current assets by
$2,308,000.  The Company's primary available source for
generating cash for operations is through the issuance of common
stock and notes payable. On August 16, 2002, the Company filed a
Form 1-E notifying the Securities and Exchange Commission of its
intent to sell $500,000 of the Company's common stock pursuant
to a Regulation E exemption.  This notification became effective
on August 30, 2002 and the Company subsequently raised
approximately $339,000 through the issuance of 13,014,400 shares
of common stock.  This offering was closed on November 11, 2002.
As indicated above, the Company filed a second Form 1-E on
November 11, 2002, notifying the Securities and Exchange
Commission of its intent to sell an additional $750,000 of the
Company's common stock pursuant to a Regulation E exemption at
prices ranging from $0.005  to $0.05.  This notification became
effective on November 22, 2002 and the Company subsequently
issued  4,700,000 shares to repay convertible debentures of
$23,500. The Company is limited to raising a total of $5,000,000
through Regulation E per 12-month period.  The Company's ability
to raise money through the issuance of common stock is
conditional upon the market for the Company's stock.  Management
has no assurance that any funds will be available under the Form
1-E, or that any funds made available will be adequate for the
Company to continue as a going concern.  If the Company is not
able to generate positive cash flow from operations, or is
unable to secure adequate funding under acceptable terms, there
is doubt that the company can continue as a going concern.


STANDARD MUTUAL: S&P Hatchets Counterparty Credit Rating to BBpi
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty
credit and financial strength ratings on Standard Mutual
Insurance Co., to 'BBpi' from 'BBBpi'.

"The rating action reflects Standard's recent poor operating
performance, elevated reinsurance recoverables, geographic and
product concentration, and decline in surplus," said Standard &
Poor's credit analyst Alan Koerber. "This was offset, in part,
by Standard's continued strong capitalization."

Based in Springfield, Ill., this mutual company writes mainly
private passenger auto and homeowners insurance through
independent agents in Illinois and Indiana. The company, which
began business in 1921, is licensed in Illinois, Indiana, and
Iowa.

The company is not affiliated with any other insurance company
and is rated on a stand-alone basis.


TALK AMERICA: Restructures 8% Convertible Notes due 2011
--------------------------------------------------------
Talk America (NASDAQ:TALK), an integrated communications
provider, has restructured its 8% Convertible Notes due 2011.

The principal terms of the restructuring are as follows: the new
maturity date will be September 19, 2006, the pay-in-kind
interest option will be eliminated and interest will be required
to be paid entirely in cash, and the Company will be provided
additional flexibility to purchase subordinated debt and common
stock.

As a result of the restructuring, the Company expects to record
an extraordinary non-cash gain of approximately $25.4 million
from the decrease in future accrued interest relating to the 8%
Convertible Notes which will be reflected as a $25.4 million
reduction in long-term debt.

In addition, the Company will begin recording interest expense
associated with the 8% Convertible Notes on its income
statement.

As of December 23, 2002, and reflecting the restructuring, the
Company had $100.9 million in total debt outstanding including
$30.1 million principal amount of the 8% Convertible Notes.

Talk America is an integrated communications provider marketing
a bundle of local and long distance services to residential and
small business customers utilizing its proprietary "real-time"
online billing and customer service platform. Talk America has
added local service to its offerings, after ten years as a long
distance provider.

The Company delivers value in the form of savings, simplicity
and quality service to its customers based on the efficiency of
its low-cost, nationwide network and the effectiveness of its
systems that interface electronically with the Bell Operating
Companies. For further information, visit the Company online at:
http://www.talk.com

Talk America's September 30, 2002 balance sheet shows a total
shareholders' equity deficit of about $43 million.


UNITED AIRLINES: S&P Hatchets Down Selected P-T Certs. Ratings
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
selected United Air Lines Inc. (D) pass-through certificates and
an airport revenue bond, reflecting diminished payment prospects
in the airline's bankruptcy.

"The downgrades of pass-through certificates were determined by
the timing of near-term interest payments, while the downgrade
of the Indianapolis Airport Authority revenue bonds was based on
factors relating to the facility those bonds financed," said
Standard & Poor's credit analyst Philip Baggaley. The 1993C1 and
1993C2 pass-through certificates were lowered to 'D' from 'CCC',
as the airline did not make its scheduled December 17, 2002,
interest payment (these are not enhanced equipment trust
certificates, so there is no dedicated liquidity facility
available to fund missed interest payments). Section 1110 of the
Bankruptcy Code allows an airline a 60-day period after filing
for bankruptcy during which payments on aircraft obligations are
stayed. Ratings on various other pass-through certificates
(1991A, 1993A3-A4, and 1996A1-A2) were lowered to 'CC', and
remain on CreditWatch with negative implications, because
upcoming interest payments will also fall within that 60-day
period and are not expected to be paid.

Standard & Poor's rating on the $220.7 million Indianapolis
Airport Authority 6.5% special facility revenue bonds, series
1995A were lowered to 'CC' from 'CCC-' and the CreditWatch
status revised to developing. These bonds financed United's
large maintenance facility at Indianapolis, which is currently
underutilized (the airline announced on December 19 that it had
further reduced B757 maintenance work there) and operated at
high cost to United (due to the unionized mechanics who work
there and the underutilization). Although Standard & Poor's
expects that United may well wish to continue using this
facility, it is possible that the lease to the airport
authority, whose rental revenues pay debt service on and provide
security for the bonds, will be renegotiated at a lower rate.
United also guarantees the bonds, but that represents only an
unsecured claim against United. Because payments are made from
United under a lease, United will likely pay at least
postpetition rent while determining its plans for the facility
(the Bankruptcy Code provides a 60-day period for such
determination, but that can be extended by the court). The
decision will likely be influenced by United's negotiations with
its mechanics' union and by the overall costs (including
rentals) of operating the facility. Ratings could be raised
modestly if the lease is assumed or lowered to 'D' if it is
rejected.

United Airlines' 9.0% bonds due 2003 (UAL03USR1), says
DebtTraders, are trading at about 9 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=UAL03USR1for
real-time bond pricing.


UNITED AIRLINES: Wants Nod to Hire McKinsey & Co. as Consultant
---------------------------------------------------------------
UAL Corporation and its debtor-affiliates, pursuant to 11 U.S.C.
Sections 327(a) and 328(a), asks the Court for permission to
employ McKinsey & Co., as their management consultant.

James H.M. Sprayregen, Esq., at Kirkland & Ellis, says that the
Debtors have endured dramatic changes to their business plan in
recent months.  It is necessary that the Debtors retain McKinsey
to continue evaluating the strategic, operational and
organizational issues facing the Company.

McKinsey has considerable experience working with airlines,
airports and other players in the aviation industry.  Since
1997, McKinsey has completed 250 engagements for more than 35
aviation-related clients.  This experience, Mr. Sprayregen
claims, has given McKinsey a unique understanding of industry
trends and key strategic and operational success factors.

For example, McKinsey's Travel and Logistics practice includes
general consultants, dedicated practice consultants and experts
with relevant industry experience and academic backgrounds.  The
practice is backed by research experts who provide insight into
industry structure and dynamics and ensure that teams have
access to the latest thinking, approaches and analyses on
financial, market, operational and organizational matters for
the consulting teams.  The practice members engage in frequent
internal airline conferences, sponsors knowledge-building
projects and publishes articles in reputable journals.

McKinsey will provide services in connections with three
projects:

      Project 1: Continuation of pre-bankruptcy services
                 through December 20, 2002, focused on
                 financial assessment of and refinement of
                 the implementation plans for nonlabor profit
                 improvement projects.  Compensation for this
                 Project is a flat $460,000 fee.

      Project 2: Help develop the Debtors' profit improvement
                 efforts for their sales to corporate
                 accounts.  This effort is focused on driving
                 best-in-class pricing, sales and marketing
                 practices for corporate accounts.
                 Compensation for this Project is a flat
                 $400,000 fee.

      Project 3: Assist the Debtors in development of a
                 comprehensive and integrated turnaround
                 plan -- at a cost of $600,000 per month.

Gerhard J. Bette at McKinsey discloses that his Firm received a
$1,000,000 retainer which has been applied as of the filing date
against unpaid prepetition amounts owed.  The balance will be
applied to post-petition services.

McKinsey sent a memo to its over 100 North American-based
directors as well as the leaders of its Travel & Logistics,
Banking & Securities and Insurance practices requesting that
individuals immediately inform the office of the general counsel
if support for any of their clients focused on a direct
commercial relationship or transaction with the Debtors.
McKinsey is still in the process of collecting responses, but at
this time believes it satisfies the disinterestedness standard.

United Airlines agrees to indemnify anyone associated with
McKinsey from any and all losses, provided they are not the
result of gross negligence, willful misconduct or bad faith.
(United Airlines Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


UPLAND MUTUAL: S&P Downgrades Ratings to Lower-B Level
------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty
credit and financial strength ratings on Upland Mutual Insurance
Inc. to 'BBpi' from 'BBBpi'.

"The rating action is due to the company's limited operating
scope, geographic concentration with exposure to catastrophes,
and volatile reserve and operating results, offset in part by
strong capitalization," said credit analyst Alan Koerber.

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

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


US PLASTIC LUMBER: Closes New $13 Million Senior Credit Facility
----------------------------------------------------------------
U.S. Plastic Lumber Corp., (Nasdaq:USPL) has obtained a new
senior credit facility with Guaranty Business Credit Corporation
with a maximum amount of $13 million, including an equipment
term loan of $3 million and new working capital line of up to
$10 million.

The new Credit Agreement replaces the working capital line that
USPL had with Bank of America, N.A. as Administrative Agent.

Mark S. Alsentzer, CEO, stated: "This new credit facility
completes the balance sheet restructuring USPL has been
diligently working on since the closing of the sale of our
environmental division in September. This is a critical step in
the success of USPL and should provide the Company with adequate
working capital for the foreseeable future." Alsentzer added:
"With this refinancing in place, a solid financial foundation
has been put in place with a very healthy balance sheet from a
standard ratio analysis. For example, our Debt to Equity ratio
should approximate .65 to 1 and out Debt to Capitalization ratio
should approximate 41%."

A summary of significant events relating to his closing include
the following:

      --  Credit Line of up to $10 million and $3 million term
loan (36 month term) with Guaranty Business Credit upon terms
and conditions as described in the loan documents.

      --  Refinance of Bank of America relationship, including
the forgiveness of approximately $2.2 million in deferred fees
and interest otherwise due to Bank of America, N.A., as
Administrative Agent. USPL has entered into a 36 month Note,
interest only during the term, with Bank of America to repay
$1,000,000 plus interest and profit participation fees as
described in the loan documents.

      --  USPL executed an Amended and Restated Waiver and
Modification Agreement with GE Capital Corporation, and its
syndicate lenders, extending the Note for 42 months and
restructuring the principal amortization due during the term of
the Note. This also results in approximately $10.8 million being
moved into a long term liability from a current liability.

USPL was assisted in the refinancing and negotiations of the
above transactions by Imperial Capital LLC. John McNamara of
Imperial Capital LLC stated, "This was a very complex and
challenging transaction, but we were glad to play a part in it
because of our strong belief in the upside opportunity that lies
ahead for USPL."

U.S. Plastic Lumber Corp., is a manufacturer of plastic lumber,
packaging and other value added products from recycled plastic.
USPL is a highly integrated, nationwide processor of a wide
range of products made from recycled plastic feedstocks. USPL
creates high quality, competitive building materials,
furnishings, and industrial supplies by processing plastic waste
streams into purified, consistent products. Its products include
but are not limited to decking, railing systems, railroad ties,
truck flooring and scoffing, components for door manufacturers,
packaging products for the beer industry and produce industry,
components for the hot tub industry, site amenities for parks,
such as benches, picnic tables and trash receptacles, parts for
the steel industry, and much more. USPL's products are
environmentally responsible and are both aesthetically pleasing
and maintenance friendly. They include such brand names as
Carefree Decking(R), Carefree Xteriors(R), SmartDeck(R),
RecycleDesign(TM), Trimax(R), Earth Care(TM), and OEM products
including Cyclewood(R). USPL currently operates three plastic
manufacturing and recycling facilities.


VIASYSTEMS GROUP: Gets Court Nod to Appoint BSI as Claims Agent
---------------------------------------------------------------
Viasystems Group, Inc., and Viasystems, Inc., secured authority
from the U.S. Bankruptcy Court for the Southern District of New
York to appoint Bankruptcy Services, LLC, as the claims agent in
connection with its on-going chapter 11 cases.

BSI will provide:

   (A) Claims Agent Services:

       a) electronically transfer creditor database into the BSI
          Claims Management System;

       b) assist the Debtors with their schedules of liabilities;

       c) print and mail the first day orders, 341 notices, bar
          date notice and proof of claim form to all potential
          claimants, provide certificate of mailing, and
          coordinate placement of newspaper notices as requested;

       d) coordinate receipt of filed claims with the Court, and
          provide secure storage for all original proofs of
          claim;

       e) enter filed claims into the BSI database, and match
          scheduled liabilities and filed claims by creditor
          number;

       f) provide copies of the claims register as required
          (frequency to be determined by the Court);

       g) if requested, provide exhibits and distribute materials
          in support of applications to allow, reduce, amend and
          expunge claims; and

       h) update claims register to reflect court orders
          affecting claims resolutions and transfers of
          ownership.

   (B) Claims Tracking Services:

       a) establish database and provide periodic updates via
          electronic means;

       b) customize PC-based software to meet the specific
          business needs of the case;

       c) provide on-site hardware and software support at
          Debtors' and attorney's offices; and

       d) work directly with Debtors' management and staff to
          facilitate the claims reconciliation process. These
          procedures include:

           (i) matching scheduled liabilities to filed claims;

          (ii) identifying duplicate and amended claims

         (iii) categorizing claims within "plan classes"

          (iv) coding claims and preparing exhibits for omnibus
               claims motions to be filed by attorneys.

   (C) Disbursement Services:

       a) After confirmation of the plan of reorganization, BSI
          will calculate the disbursement amounts for cash and
          securities to holders of allowed claims.


       b) BSI will develop customized reports to meet the
          Debtors' requirements. Prior to processing any
          payments, the disbursement report will be submitted to
          the Debtors and their counsel for review and approval.

       c) Upon approval of the disbursement report, payments will
          be made to allow claim holders by check or wire
          transfer on an account established and funded by the
          client. Simultaneously, BSI will coordinate the
          issuance of new securities with a Transfer
          Agent/Trustee selected by the client. BSI will
          distribute the shares along with the cash payment and a
          letter of transmittal defining the payment. One or more
          escrow accounts will be established for the cash
          portion of the disputed claims reserves.

The Debtors are also retaining Innisfree M&A Incorporated as the
noticing and information agent. The services to be rendered by
Innisfree will not duplicate or overlap with the services being
provided by BSI.  BSI will continue to serve as the Debtors'
general noticing agent while Innisfree will assist the Debtors
in connection with the issues relating to the mailing of notices
to the Debtors' bondholders and other publicly held securities.

BSI's professionals hourly rates are:

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

Viasystems Group, Inc., is a holding company whose principal
assets are its shares of stock of Viasystems, Inc.  Viasystems,
through its direct and indirect subsidiaries, is a leading,
worldwide, independent provider of electronics manufacturing
services to original equipment manufacturers primarily in the
telecommunication, networking, automotive, consumer, industrial
and computer industries. The Debtors filed for chapter 11
protection on October 1, 2002. Alan B. Miller, Esq., at Weil,
Gotshal & Manges, LLP, represents the Debtors in their
restructuring efforts. When the Companies filed for protection
from its creditors, it listed $1.6 Billion in total assets and
$1.025 Billion in total debts.


WASHINGTON MUTUAL: Fitch Rates Cl. B-4, B-5 Notes at Low-B Level
----------------------------------------------------------------
Washington Mutual Mortgage Securities Corp.'s mortgage pass-
through certificates, series 2002-MS12 classes A, P, X and R
($244,285,098) certificates, are rated 'AAA' by Fitch Ratings.
In addition, Fitch rates the class B-1 ($3,903,000) certificate
'AA', class B-2 ($1,385,000) certificate 'A' and class B-3
($881,000) certificate 'BBB'. Classes B-4, B-5 and B-6 are being
offered privately. Fitch rates the class B-4 certificate
($504,000) 'BB' and class B-5 certificate ($378,000) 'B'.

The 'AAA' rating A,P, X, and R senior certificates reflects the
3% subordination provided by the 1.55% class B-1, 0.55% class
B-2, 0.35% class B-3 and 0.55% provided by classes B-4, B-5 and
B-6.

Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults as well as bankruptcy, fraud and
special hazard losses in limited amounts. In addition, the
ratings reflect the quality of the mortgage collateral and the
strength of the legal and financial structures.

The mortgage pool consists of 559 conventional, fully amortizing
30-year fixed-rate, mortgage loans secured by first liens on
one- to four-family residential properties with an aggregate
original principal balance of $251,840,406.19. The average
unpaid principal balance as of the cut-off date is $450,520. The
weighted average original loan-to-value ratio (LTV) is 68%.
Cash-out refinance loans represent 28.93% of the loan pool.
Approximately 57.98% and 7.38% of the mortgage loans possess
FICO Scores greater than or equal to 720 and less than 660,
respectively. The three states that represent the largest
portion of the mortgage loans are California (50.53%),
Washington (4.39%) and New York (4.32%).

The certificates are issued pursuant to a pooling and servicing
agreement dated Dec. 1, 2002, among Washington Mutual Mortgage
Securities Corp., as depositor and master servicer; and State
Street Bank and Trust Company, as trustee.


WORKFLOW MANAGEMENT: Finalizing Long-Term Agreement with Lenders
----------------------------------------------------------------
Workflow Management, Inc. (NASDAQ: WORK), one of the nation's
leading outsourcers of printed products, announced its second
quarter results.

Second quarter revenues for the period ended October 31, 2002
increased 2.6% to $164.6 million compared to $160.3 million in
the prior year. Revenues in the Solutions Division improved 2.8%
to $81.2 million and revenues in the Printing Division increased
1.8% to $86.4 million. Second quarter operating income before
restructuring costs was $8.7 million compared to $5.8 million
last year. Workflow generated $11.4 million in EBITDA before
restructuring costs in the second quarter, versus $8.5 million
in the same period last year. Including restructuring costs,
Workflow produced $10.6 million in EBITDA for the quarter versus
$8.5 million in the prior year.

Tom D'Agostino, Sr., Chairman and Chief Executive Officer,
commented, "Workflow's attention to controlling costs, combined
with our focus on adding new customers, resulted in improved
financial performance despite tough economic and competitive
forces. With the diverse Workflow platform, we are able to
provide a myriad of cost saving solutions for our customers."

Net income before non-recurring items in the second quarter of
fiscal 2003 was $1.9 million, an increase of $473,000 from the
same period of fiscal 2002. In the quarter, the Company incurred
non-recurring items totaling $2.1 million after taxes. After the
charges, the Company generated net income of $517,000. The non-
recurring items included $1.1 million of expense related to the
loss on the Company's interest rate swap agreement which must be
marked to market quarterly as the swap can no longer be
designated as a cash flow hedge of variable rate debt due to the
Company's borrowings under its credit facility bearing a non-
LIBOR based fixed interest rate of 12%. In addition, $810,000
was incurred for continued restructuring costs and $174,000 was
incurred in connection with the abandoned private placement of
senior secured notes.

Revenues for the six months ended October 31, 2002 increased
1.7% to $320.8 million compared to $315.5 million during the
same period in fiscal 2002. Revenues in the Company's Solutions
Division increased 2.0% to $157.9 million and the Printing
Division rose 0.7% to $169.3 million.

For the six months ended October 31, 2002, operating income
before restructuring costs increased 19.2% to $15.7 million
versus $13.2 million during the same period last year. Before
restructuring costs, Workflow generated $21.0 million in EBITDA
for the six months ended October 31, 2002 versus $18.7 million
in the same period last year. Net income before non-recurring
items for the first six months of fiscal 2003 was $3.6 million
as compared to $3.7 million in the same period of fiscal 2002.
In the first six months of fiscal 2003, the Company incurred
non-recurring items totaling $8.4 million after taxes. After the
charges, the Company generated a net loss of $1.9 million.

The Company also announced that it is in the process of
finalizing a new long-term relationship with its lending group
and looks forward to completing that process by January 15,
2003, the end of the current waiver period. The goal is to
stabilize the Company's relationship with its lenders and
strengthen its balance sheet.

Workflow Management, Inc., is a leading provider of end-to-end
print outsourcing solutions. Workflow services, from production
of logo-imprinted promotional items to multi-color annual
reports, have a reputation for reliability and innovation.
Workflow's complete set of solutions includes document design
and production consulting; full-service print manufacturing;
warehousing and fulfillment; and iGetSmart(TM) - the industry's
most comprehensive e-procurement, management and logistics
system. Through custom combinations of these services, the
Company delivers substantial savings to its customers -
eliminating much of the hidden cost in the print supply chain.
By outsourcing print-related business processes to Workflow,
customers streamline their operations and focus on their core
business objectives. For more information, go to the Company's
Web site at http://www.workflowmanagement.com


WORLD KITCHEN: Illinois Court Confirms Plan of Reorganization
-------------------------------------------------------------
WKI Holding Company, Inc., which operates principally through
its subsidiary World Kitchen, Inc., said that the joint Plan of
Reorganization filed by the Company and its affiliated debtors
was approved by the U.S. Bankruptcy Court for the Northern
District of Illinois, setting the stage for the Company to
emerge from Chapter 11 in early 2003. WKI and its affiliated
debtors solicited and received the approval of an overwhelming
majority of its creditors on the Plan of Reorganization.

The Plan of Reorganization contains significant cash recoveries
to unsecured creditor groups of the subsidiary debtors through
agreement with various secured lenders. Under terms of the Plan
of Reorganization, WKI's funded debt will be reduced by
approximately 50 percent, from $811 million, providing the
company with more financial flexibility to implement its
business strategy.

James A. Sharman, WKI's president and chief executive officer,
said: "This is a great day for World Kitchen, our customers,
business partners and employees. With our Plan of Reorganization
confirmed, we are now positioned to emerge from chapter 11 as a
much stronger company. Once we do, we will have increased
financial flexibility to support our growth plans, which include
expanding into new markets and channels, strengthening our
brands and supporting them with a stream of innovative new
products, some of which will be introduced at next month's
International Housewares Show in Chicago.

"While the last several months have been challenging for
everyone affiliated with WKI, the restructuring process has
brought focus to the strength of our brands, our business
relationships and our people. I am proud of the exceptional
performance of the company throughout this process.

"I look forward to working with our new Board of Directors and
our leadership team to realize the full potential of World
Kitchen. We have a solid, experienced leadership team and
talented individuals throughout our organization, which gives me
great confidence in our future."

World Kitchen's principal products are glass, glass ceramic and
metal cookware, bakeware, tabletop products and cutlery sold
under well-known brands including CorningWare(R), Pyrex(R),
Corelle(R), Revere(R), EKCO(R), Baker's Secret(R), Chicago
Cutlery(R) and OXO(R). The Company currently employs
approximately 3,200 people and has major manufacturing and
distribution operations in the United States, Canada, South
America and Asia-Pacific regions.


WORLDCOM INC: Asks Court to Approve EDS Settlement Agreement
------------------------------------------------------------
Worldcom Inc., and its debtor-affiliates seek approval of a
settlement agreement with Electronic Data Systems Corporation
and EDS Information Systems, LLC; and modifications to the GNOA
and GITSA.

                     The Settlement Agreement

Timothy W. Walsh, Esq., at Piper Rudnick LLP, in New York,
informs the Court that on December 2, 2002, WorldCom and EDS
executed a certain "Letter Agreement Regarding Resolution of
Various Issues", subject in principal part to the entry of an
Order approving the Settlement Agreement.  The Settlement
Agreement is intended to resolve all of the issues raised in the
Minimums Arbitration, the Price Reset Arbitration, the
Bankruptcy Court Motions, and all other disputes between EDS and
MCI WorldCom under the GNOA that might currently exist.

The principal terms of the Settlement Agreement are:

   A. The Settlement Agreement contains these provisions relating
      to the Network Payment:

      -- within ten days following the Effective Date, EDS will
         pay to MCI WorldCom $31,000,000;

      -- on or before June 30, 2003, EDS will pay to MCI WorldCom
         $31,000,000; and

      -- on or before January 5, 2004, EDS will pay to MCI
         WorldCom $30,000,000, although EDS will effectively
         receive a $15,000,000 credit against the third Payment;

   B. MCI WorldCom and EDS agree that the total amount of past
      due, unpaid and undisputed postpetition invoices under the
      GNOA is $99,630,011.69.  EDS has disputed $9,206,625 in
      invoices in good faith.  EDS agrees in the Settlement
      Agreement to pay these Undisputed Amounts:

        -- EDS will pay MCI WorldCom $20,000,000 within 10 days
           following the date the Letter Agreement is executed by
           all Parties;

        -- EDS will pay MCI WorldCom $20,000,000 within 30 days
           following the Letter Agreement Date;

        -- EDS will pay MCI WorldCom $20,000,000 within 60 days
           following the Letter Agreement Date;

        -- EDS will pay MCI WorldCom $20,000,000 within 90 days
           following the Letter Agreement Date;

        -- EDS will pay MCI WorldCom the remainder of the
           Undisputed Amounts, plus any and all unpaid
           accumulated interest, within 120 days following the
           Letter Agreement Date; and

        -- the Parties will resolve the Disputed Amounts in
           accordance with the provisions of the GNOA.

   C. With respect to the funds held pursuant to an
      Indemnification Escrow Agreement in place related to EDS'
      purchase of MCI Systemhouse Corp., EDS and MCI WorldCom
      agree to instruct the Escrow Agent to:

        -- release to MCI WorldCom $10,000,000 held in
           Systemhouse Escrow;

        -- Release to EDS 50% of all Distributions held in the
           Systemhouse Escrow or about $800,000; and

        -- Release to MCI WorldCom 50% of all Distributions held
           in the Systemhouse Escrow or about $800,000;

   D. MCI WorldCom agrees to pay up to $14,741,415.77 in LEC
      invoices submitted by EDS within 30 days following MCI
      WorldCom's receipt of a schedule of LEC invoices from EDS;

   E. The Settlement Agreement contains these provisions relating
      to EDS's Minimums obligation under the GNOA:

        -- the Settlement Agreement establishes new Minimums that
           are lower than the current Minimums set forth in the
           GNOA;

        -- "Cumulative Network Minimums" are removed from the
           GNOA. "Cumulative Minimums" are also removed from the
           GITSA.

        -- the Parties agree that there will be no Annual Take-
           or-Pay Minimum for Year 3 (2002), and that EDS will
           not have any obligation or liability with respect to
           any Network Revenue shortfall for Year 3 (2002);

        -- at the end of each Year beginning in Year 4 (2003),
           EDS will be liable for 100% of the amount by which the
           Annual Network Take-or-Pay Minimum in effect for the
           year exceeds 100% of the actual Network Revenues paid
           during the year; and

        -- the parties agree to delete the existing section 6.10
           of the GNOA, and replace it with a new section 6.10
           that only permits an equitable adjustment to the
           Minimums in two scenarios related to the size, scope,
           and nature of WorldCom's business;

   F. The Settlement Agreement contains these provisions relating
      to the rates charged by MCI WorldCom to EDS:

        -- MCI WorldCom will have no obligation to reset the EDS
           Pricing for Existing Business on the second Network
           Reset Date (12/31/02), but EDS Pricing for New Network
           Business will continue to be reset on an annual basis;

        -- for New Network Business ordered in Year 4 (2003), EDS
           will be charged the EDS Pricing set forth in the
           Settlement Agreement, which are lower than EDS'
           current rates under the GNOA;

        -- for New Network Business ordered in Year 6 (2005),
           Year 8 (2007) and Year 10 (2009), EDS will be charged
           the lower of the then-effective Network CC Rate or the
           then-effective Network MFN Rate;

        -- for New Network Business ordered in Year 5 (2004),
           Year 7 (2006), Year 9 (2008) and Year 11 (2010), EDS
           will be charged the lower of the then-effective New
           Business CC Rate or the then-effective New Business
           MFN Rate; and

        -- the Settlement Agreement establishes a new definition
           of "New Network Business" that is broader than the
           definition of "New Network Business" in the GNOA;

   G. The Settlement Agreement contains mutual releases between
      MCI WorldCom and EDS for all claims arising under the GNOA,
      other than:

        -- claims relating to the disputed payments, and

        -- claims relating to any potential rejection of the GNOA
           by MCI WorldCom;

   H. The Settlement Agreement contains mutual releases between
      MCI WorldCom and EDS for all claims relating to the Stock
      Purchase Agreement dated February 10, 1999 by and among
      Electronic Data Systems Corporation, E.D.S. of Canada,
      Ltd., MCI WorldCom, Inc., MCI Telecommunications
      Corporation; MCI Systemhouse L.L.C., SHL Systemhouse Co.,
      and MCI Systemhouse Corp.;

   I. EDS and MCI WorldCom agree that certain contractual price
      reductions related to personnel changes will be deferred
      until certain future events have occurred; and

   J. The Settlement Agreement alters the manner in which damages
      are calculated if MCI WorldCom terminates the GNOA.

Mr. Walsh believes that approval of the Settlement Agreement is
important and beneficial to the WorldCom bankruptcy estate.
Under the terms of the Settlement Agreement, EDS agrees to pay
MCI WorldCom over $187,000,000 in cash over the next twelve
months.  It also agrees to release numerous alleged claims
against MCI WorldCom.  In exchange for these payments and
releases, MCI WorldCom agrees to new rates and a new schedule of
Minimums, and agrees to pay $14,700,000 in postpetition LEC
invoices under the GNOA.

The Settlement Agreement offers these benefits to WorldCom:

   A. The Debtors obtain on an accelerated basis the return of
      $92,000,000 of the Network Payment paid to EDS at the
      beginning of the GNOA.  The re-payment is to be paid in
      three installments over the next year.  The Debtors would
      have had a future claim against EDS for the return of the
      Network Payment in 20% increments to be paid after the end
      of Years 5-9.  EDS, however, would have contested the
      Debtors' right to the return of the Network Payment on the
      same grounds that it has contested the Debtors' rights to
      shortfall payments.  In addition, there can be no guarantee
      of EDS's ability to re-pay the $100,000,000 Network Payment
      claim in 2005-09.  The Settlement Agreement enables the
      Debtors to recover its Network Payment within the next
      year, far sooner and at a higher present value than
      contemplated by the GNOA;

   B. The Debtors obtain EDS' agreement to pay promptly all
      undisputed postpetition GNOA invoices.  The Debtors will
      receive $99,630,011.69, plus interest, in five payments
      over 120 days.  EDS also agreed to address the remaining
      $9,206,625 of disputed invoices within the dispute
      resolution procedures of the GNOA.  EDS had claimed a right
      to recoup the entire $108,836,636.69 in postpetition
      invoices against prepetition payments due and owing under
      the GITSA, on the theory that the GNOA and the GITSA
      constitute a single agreement.  This Settlement Agreement
      eliminates any risk that the Debtors would not be able to
      collect any of the amounts due and owing under the GNOA on
      the basis of equitable recoupment or other defenses;

   C. The Settlement Agreement allows the Debtors to avoid any
      GNOA price reset obligations regarding existing business
      from EDS until 2005.  Imposition of a contractual
      obligation to reset prices would have dramatically reduced
      rates under the GNOA and resulted in a substantial decrease
      in the revenue received by the Debtors;

   D. The Settlement Agreement contains a general commitment by
      EDS not to move the existing base of its telecommunications
      business away from the Debtors in 2003 and 2004.  This
      commitment is documented in EDS's new Minimums obligation.
      The new Minimums applicable to EDS contemplate that EDS
      will continue to generate the Network Revenue from its
      existing base;

   E. The Debtors receive $10,000,000 in funds that had been
      escrowed as part of the EDS/SHL transaction.  In addition
      to the $10,000,000, the Debtors also receive 50% of the
      accrued escrow interest or about $800,000;

   F. The Debtors receive a broad release from EDS of all claims
      against it under the GNOA;

   G. The Debtors receive a broad release of all claims against
      it relating to the SHL transaction, including potential
      litigation, indemnification, and escheat liability
      exposure;

   H. The Settlement Agreement eliminates the Cumulative Minimums
      in the GITSA.  Accordingly, the Debtors' potential exposure
      for shortfall payments under the GITSA is reduced;

   I. The Settlement Agreement will result in significant cost
      savings in terms of legal fees and related expenses.  At
      the time of the Settlement Agreement, EDS and the Debtors
      had three separate disputes pending before the Bankruptcy
      Court and the District Court, and two disputes pending
      Before arbitration.  In the prior arbitration between the
      parties, the cost to the Debtors for litigation expenses,
      including legal fees, expert fees, and other costs, was
      several million dollars; and

   J. The Settlement Agreement will remove the uncertainty
      associated with the numerous disputes pending between the
      parties and will allow the parties to move forward with
      their business relationship.  MCI WorldCom and EDS believe
      that the resolution of these disputes, which have plagued
      the relationship since the GNOA was signed, will clear the
      way for new business opportunities and will eliminate or
      greatly reduce any ongoing problems that have adversely
      impacted the GNOA relationship.

In exchange for these benefits, the Debtors made these
concessions to EDS:

   A. EDS obtains an elimination of the Cumulative Minimums under
      the GNOA, as well as a new schedule of Annual Take-or-Pay
      Minimums that will apply starting in 2003.  No Minimums
      apply to EDS for 2002.  The new Minimums are lower than the
      existing Minimums in the GNOA.  EDS, however, had sought,
      and very possibly would have obtained, a reduction in the
      existing Minimums.  The amount of any reduction that EDS
      could have obtained is unknown;

   B. EDS obtained rates for New Network Business that are lower
      than its current rates.  EDS, however, likely was entitled
      to a price reset of the existing rates under the GNOA, and
      EDS had filed an arbitration and a motion before the
      Bankruptcy Court seeking compliance with the price reset
      provisions.  It is possible that any price reset process
      would result in EDS receiving a favorable rate reduction
      comparable to that set forth in the Settlement Agreement;

   C. The Debtors agree to pay $14,741,415.77 in postpetition
      LEC invoices due under the GNOA.  EDS has filed a motion
      before the Bankruptcy Court that seeks to compel the
      Debtors to make these postpetition payments.  It is
      possible that the Debtors would have been ordered to
      process and pay the LEC invoices for EDS;

   D. EDS receives a $15,000,000 reduction in its Network Payment
      obligation in exchange for a $15,000,000 reduction in its
      prepetition claim under the GITSA; and

   E. EDS receives a release from the Debtors of all claims under
      the GNOA.

Mr. Walsh points out that two MCI WorldCom claims are relevant
to this inquiry:

   A. The Debtors' Motion for Payment sought to compel EDS to
      pay over $108,000,000 in postpetition invoices under the
      GNOA.  While the Debtors believe that it was likely to
      succeed on this claim, EDS agrees in the Settlement
      Agreement to pay all undisputed invoices and to address the
      remaining invoices in the GNOA's dispute resolution
      process.  EDS made this concession even though it had taken
      the position that it did not owe any postpetition amounts
      under the GNOA because it was entitled to recoup
      prepetition amounts owed to EDS under the GITSA; and

   B. MCI WorldCom had the future right to seek the return of the
      $100,000,000 Network Payment.  Given the fact that the
      Debtors would not be able to make a claim for this payment
      until 2005-09, it is difficult to assign a probability of
      success on the claim.  EDS, however, has agreed to pay
      $92,000,000 in cash, minus a $15,000,000 reduction of its
      prepetition claim under the GITSA in satisfaction of the
      Network Payment obligation.  The Debtors believe that
      accelerated payment of a substantial portion of the Network
      Payment obligation represents a reasonable resolution,
      given the uncertainty surrounding the future claim.

EDS has raised three disputes that are addressed by the
Settlement Agreement, including:

   A. EDS seeks to compel the Debtors to engage in the price
      reset process required by the GNOA.  The Debtors'
      opposition to the Price Reset Motion conceded that some
      price reset process was required, and it is entirely
      possible that the price reset process would have resulted
      in EDS obtaining the same or better rates as those set
      forth in the Settlement Agreement;

   B. EDS filed an arbitration that sought an equitable reduction
      in the Minimums.  In light of the Debtors' accounting
      disclosures and subsequent bankruptcy filing, as well as
      overall conditions in the telecommunications industry,
      the Debtors recognize the potential that EDS would have
      been successful in obtaining an equitable reduction to the
      Minimums.  At the present time, the Debtors cannot say
      whether EDS would have obtained an equitable adjustment
      that was larger or smaller than the adjustment set forth in
      the Settlement Agreement.  The Debtors, therefore, believe
      that the Minimums set forth in the Settlement Agreement are
      reasonable in light of the attendant risks of this
      arbitration, and the significant costs of defending this
      arbitration; and

   C. Finally, EDS has filed the LEC Motion that seeks to compel
      the Debtors to make $14,741,415.77 in postpetition
      payments under the GNOA.  In its opposition to the LEC
      Motion, the Debtors did not dispute that prepetition, it
      had agreed to make these payments.  The only question was
      whether the amounts owed were prepetition or postpetition
      and, if postpetition, whether the Debtors are entitled to
      recoup this amount against EDS's unpaid invoices.
      Accordingly, the Debtors would possibly have to make these
      payments eventually.  Moreover, since EDS has agreed to pay
      the postpetition invoices, the Debtors no longer have a
      recoupment defense to this claim.

Mr. Walsh notes that the Settlement Agreement provides that EDS
must make over $187,000,000 in cash payments to the Debtors over
the next year, with the great majority of the payments to be
made within six months.  Almost half of this amount is for the
return of the Network Payment.  In the absence of the Settlement
Agreement, the Debtors would not be able to seek the return of
the Network Payment until 2005-09.  The Debtors cannot know with
any certainty whether EDS will be in a position to make this
payment at that time.  The Settlement Agreement, therefore,
avoids the risk that EDS will not be able to make this payment
in the future.

Mr. Walsh admits that the parties have been engaged in disputes
relating to the GNOA almost from its inception.  The parties
have already completed one arbitration that cost both sides
millions of dollars in litigation-related expenses.  There are
currently two arbitrations stayed and three motions pending
before this Court.  These disputes involve complex issues of
contract interpretation, the state of the telecommunications
industry, WorldCom's business, and various economic
calculations, all of which are likely to involve numerous
experts on both sides. Given the parties' experience in the
earlier arbitration, Mr. Walsh believes that hundreds of
thousands, if not millions of pages of documents will need to be
reviewed and exchanged.  It will take several months, or more,
to resolve all of the current disputes between the parties and
would likely cost millions to litigate the current disputes to
completion.  The resulting uncertainty and delay would only
further strain the relationship between the parties.  The
Debtors believe that a definitive resolution of all existing and
potential disputes with EDS, rather than engaging in factually
complex, "paper intensive" litigation, is the most cost
effective path to follow.

Mr. Walsh asserts that approval of the Settlement Agreement is
in the best interests of the creditors because it will result in
the recovery of over $187,000,000 in cash payments by the
Debtors' estate over the next twelve months.  It also requires
EDS to keep its existing base of business with the Debtors by
maintaining substantial Minimums requirements.  As a result, the
Settlement Agreement will ensure that substantial revenues
continue to flow into the estate.  Although the Settlement
Agreement provides for reduced Minimums and reduced rates, the
Debtors believe that EDS was likely to obtain reduced rates and
some reduction of the Minimums without the Settlement Agreement.
In addition, the settlement facilitates contract relationships
with EDS that are beneficial to the Debtors as a provider of
telecommunications services.  The proposed settlement of all
disputes with EDS will bring a prompt, inexpensive,
comprehensive, and favorable resolution to these matters.
(Worldcom Bankruptcy News, Issue No. 16; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

DebtTraders says that Worldcom Inc.'s 8.0% bonds due 2006
(WCOM06USN1) 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.


W.R. GRACE: U.S. Request for Partial Summary Judgment Approved
--------------------------------------------------------------
W. R. Grace & Co., (NYSE:GRA) announced that the U.S. District
Court of Montana has granted the United States' motion for
partial summary judgment on a number of issues in the
government's pending lawsuit against Grace for recovery of
cleanup costs related to previously operated vermiculite mining
and processing sites near Libby, Montana.

As a result of the court's ruling, Grace expects to take a pre-
tax charge of at least $20 million in the fourth quarter to
adjust its accruals to its current estimate of the minimum
probable liability that could result from this lawsuit. Grace
further believes it is likely that additional costs will result
from this matter that cannot be estimated at this time.

The U.S. Environmental Protection Agency claims to have incurred
response costs of approximately $57 million through December 31,
2001, and has estimated that its total costs could exceed $100
million. The trial of this lawsuit is scheduled to begin
January 6, 2003 in Montana.

Grace is a leading global supplier of catalysts and silica
products, specialty construction chemicals and building
materials, and sealants and coatings. With annual sales of
approximately $1.7 billion, Grace has over 6,000 employees and
operations in nearly 40 countries. Visit the Grace Web site at
http://www.grace.com


* BOOK REVIEW: Creating Value through Corporate Restructuring:
                Case Studies in Bankruptcies, Buyouts, and
                Breakups
--------------------------------------------------------------
Author:  Stuart C. Gilson
Publisher:  Wiley
Hardcover:  516 pages
List Price:  $79.95
Review by David M. Henderson

Buy a copy for yourself and one for a colleague on-line at:
http://amazon.com/exec/obidos/ASIN/1893122832/internetbankrupt

Most business books fall into two categories.  The first is very
important. It is like that stuff you have to drink before you
have a colonoscopy.  You keep telling yourself, this is very
good for me, while you would rather be at the beach reading
Liar's Poker or Barbarians at the Gate.

Stuart Gilson, of the Harvard Business School, has managed to
write a book important to everybody in the distressed market
that is also quite enjoyable.  His prose is fluid and succinct
and a pleasure to read.  But don't take my word for it.  The
dust jacket endorsements come from Jay Alix, Martin Fridson,
Harvey Miller, Arthur Newman, and Sanford Sigoloff.  At a
collective gazillion dollars a billing hour, that's a lot of
endorsement.

Be advised that this is designed as a text book.  The case study
format might be off-putting to some.  The effect can be jarring
as you read the narrative history of the case and suddenly
confront the financial statements without any further clue as to
what to do, but this must be what it is like for the turnaround
manager.  Even after reading several of the cases, when I got to
the financials I had that sinking feeling of, what do I do now?
If you read carefully, clues to the solutions are in the
introductions.

The book is divided into three "modules", bizspeek for sections:
Restructuring Creditors' Claims,. Restructuring Shareholders'
Claims, and Restructuring Employees' Claims. The text covers 13
corporate restructurings focusing on debt workouts, vulture
investing, equity spinoffs, tracking stock, assete divestitures,
employee layoffs, corporate downsizing, M & A, HLTs, wage give-
backs, employee stock buyouts, and the restructuring of employee
benefit plans.  That's a pretty comprehensive survey, wouldn't
you say?

Dr. Gilson's chapter on "Investing in Distressed Situations" is
an excellent summary of the distressed market and a good
touchstone even for seasoned vultures.

Even in the two appendices on technical analysis, this book is
marvelously free of those charts and graphs that purport to show
some general ROI of distressed investing.  Those are cute,
aren't they?  As Judy Mencher has famously said, "You can buy
the paper at 50 thinking it's going to 70, but it can just as
easily go to 30 if you are not willing to act on it."  Therein
lies the rub and the weakness, if inevitable, of this or any
book on corporate restructurings.  As Dr. Gilson notes, no two
are alike, and the outcome is highly subjective, in our out of
Court, but especially in Chapter 11. Is the Judge enthralled by
Jack Butler as Debtor's Counsel or intimidated by Harvey Miller
as Debtor's Counsel?  Are you holding "secured" paper only to
discover that when it was issued the bond counsel forgot to
notify the Indenture Trustee of the most Senior debt?    Is
somebody holding Junior paper that you think is out of the money
only to have Hugh Ray read the fine print and discover that the
"Junior" paper is secured?  This is the stuff of corporate
reorganizations that is virtually impossible to codify into a
textbook.

That said, this is an especially valuable text for anybody
working in the distressed market.  As a Duke grad, I tend to be
disdainful of all things Harvard, but having read Dr. Gilson's
book, I am enticed to encamp by the dirty waters of the Charles
long enough to take his course, appropriately entitled,
"Creating Value Through Corporate Restructuring."

                           *********

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 ***