TCR_Public/030107.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Tuesday, January 7, 2003, Vol. 7, No. 4

                          Headlines

ADVANCED GLASSFIBER: Appoints Trumbull Services as Claims Agent
ALLEGHENY ENERGY: Sells 2 Units' Assets to Constellation Energy
AMERICA WEST: Achieves 80.6% On-Time Performance for November
AMERICA WEST: Revenue Passenger Miles Up by 26.2% in December
AMERICAN AIRLINES: December System-Wide Traffic Slides-Up by 14%

AMERICAN PAD: US Trustee Appoints Official Creditors' Committee
AMERIPOL SYNPOL: Section 341(a) Meeting Convenes on January 24
ANNUITY & LIFE: Unit Meets Portion of XL Collateral Requirements
ARI MUTUAL INSURANCE: S&P Cuts Financial Strength Rating to Bpi
AVADO: S&P Revises Credit Rating to SD After Interest Payment

BETHLEHEM STEEL: Receives ISG Proposal to Acquire All Assets
BETHLEHEM STEEL: ISG Bids to Purchase Assets for $1.5 Billion
BOUNCEBACK TECHNOLOGIES: Funds Insufficient to Meet Cash Needs
BUDGET GROUP: Obtains 1st Exclusivity Extension Until January 31
CHILDTIME LEARNING: Fails to Satisfy Nasdaq Listing Requirement

COMDISCO INC: Enters Stipulation Resolving Labe's Claim Dispute
CONSECO: Look for CFC's Statements & Schedules by February 14
CONSOLIDATED CONTAINER: Revolving Loan Facility to Mature Today
CONSTELLATION 3D: Creditors' Meeting to Convene on January 17
CONTINENTAL AIRLINES: Flies 4.8B Revenue Passenger Miles in Dec.

COVANTA ENERGY: Court Approves Asset Sale to Allied Aviation
EL PASO CORPORATION: EVP Ralph Eads III Leaves Company
ELAN: S&P Ratings Unaffected by Antegren's Promising Dev't Data
ENCOMPASS SERVICES: Court Approves KPMG as Debtor's Accountants
ENRON CORP: Secures Nod to Reclassify Kelley Drye's Engagement

FORD MOTOR COMPANY: U.S. Sales Climb 8.2% in December 2002
FRIENDLY ICE CREAM: Won't Yield to Blake's Request
FURR'S RESTAURANT: Files for Chapter 11 Relief in Dallas, Texas
GENTEK INC: Committee Hires Stroock & Stroock as Lead Counsel
GENUITY INC: Intends to Continue Employee Retention Program

GLIATECH INC: Hires Adams Harkness to Auction-Off ADCON Assets
GOLDFARB CORP: Lenders Exploring Alternatives for Fleming Unit
HAWK CORP: NYSE Accepts Proposed Continued Listing Business Plan
HEALTH MANAGEMENT: Completes Acquisition of Acute Care Hospital
HOUGHTON MILLS: S&P Ratchets Corporate Credit Rating Down to BB-

IMPSAT FIBER NETWORKS: S&P Withdraws D Corporate Credit Rating
INSILCO: Wants Approval to Employ Ordinary Course Professionals
INTEGRATED HEALTH: Has Until March 3 to Remove Pending Actions
KULICKE & SOFFA: Will Publish Fiscal Q1 2003 Results on Jan. 22
LEVEL 3 COMMS: Sells Interest in California Toll Road for $46MM

LISANTI FOODS INC: Case Summary & Largest Unsecured Creditors
LUCENT TECHNOLOGIES: Settles Legal Dispute with Nina Aversano
LTV CORP: Wants to Hire Towers Perrin as Insurance Auditors
MANITOWOC CO.: Completes Sale of Boom Trucks to Quantum Heavy
MEDICALCV INC: Fails to Comply with Nasdaq Listing Requirements

MERCURY AIR: Completes Refinancing Transaction with Foothill
METRO ELEVATOR: Case Summary & 20 Largest Unsecured Creditors
MICROCELL: Firms-Up Recapitalization Plan to Cut Debt by C$1.7BB
MICROCELL: Quebec Court Approves CCAA Recapitalization Plan
NATIONAL CENTURY: Wants Nod to Implement Employee Retention Plan

NCS HEALTHCARE: Omnicare Ordered to Deposit $13.5-Mil. in Escrow
NETZEE INC: Completes Sale of Substantially All Assets for $10MM
NEXTERA: Lexecon Inks Long-Term Contracts with Key Principals
POLAROID CORP: Wants to Bring Back Kroll Zolfo as Consultants
POLYMER GROUP: Court Confirms Chapter 11 Plan of Reorganization

RFS ECUSTA: Committee Hires Moses & Singer as Co-Counsel
R.H. DONNELLEY: Tender Offer for 9-1/8% Sr. Sub. Notes Expires
SAFETY-KLEEN: Myers Wants Prompt Decision on Asset Purchase Pact
SAIRGROUP FINANCE: Signs-Up Lazard to Render Financial Advice
SALON MEDIA: Issues Convertible Promissory Note for $200,000

SERVICE MERCHANDISE: Plan Filing Exclusivity Extended to Feb. 5
SOUTHERN UNION: Closes Texas Asset Sale to ONEOK for $420 Mill.
SOUTHERN UNION: Settles Southwest Gas Legal Issues with ONEOK
STEEL DYNAMICS: Resolves Qualitech Steel Purchase Litigation
TANDYCRAFTS INC: Sells Frame Operations to Pinnacle Frames

THINKPATH INC: Achieves Major Debt Reduction through Morrison
TIDEL TECHNOLOGIES: Renews Senior Credit Line with JP Morgan
TIGER TELEMATICS: Restructures European Ops. to Reduce Costs
TRANSTECHNOLOGY: Sells All TCR Business Assets for $10M + Debts
UNITED AIRLINES: Implements Additional Cost-Reduction Programs

UNITED AIRLINES: Wants More Time to File Schedules & Statements
UNIVERSAL BROADBAND: Completes Tax-Free Merger with FoneFriend
US AIRWAYS: Comcast Files Notice as Substantial Claimholder
USG CORP: Seeks Court Approval to Hire FTI as Claims Consultant
WARNACO: Stipulation Determining Hilco's Guaranteed Amount Ok'd

WILLIAMS CONTROLS: Appoints Donn Viola to Board of Directors
WORLD AIRWAYS: Inks New $22MM Contract with Ritetime Aviation
WORLDCOM INC: Obtains Approval to Join SmartWorld/Juno Mediation

* Manatt Phelps Completes Merger Deal with Kalkines Arky

* Large Companies with Insolvent Balance Sheets

                          *********

ADVANCED GLASSFIBER: Appoints Trumbull Services as Claims Agent
---------------------------------------------------------------
Advanced Glassfiber Yarns LLC and its debtor-affiliates
anticipate that there will be thousands of entities that will
need to receive various notices, pleadings and other documents
filed in the companies' Chapter 11 cases and that will file
claims against the estates.  Consequently, the Debtors ask for
authority from the U.S. Bankruptcy Court for the District of
Delaware to appoint Trumbull Services, LLC as the official
Claims, Noticing and Balloting Agent.  The Debtors believe
Trumbull will expedite the distribution of notices and relieve
the Clerk's Office of the administrative burden of processing
thousands of notices.

Specifically, Trumbull will:

(a) Prepare and serve required notices in these Chapter 11
     cases, including:

       i) a notice of the commencement of these Chapter 11 cases
          and the initial meeting of creditors under section
          341(a) of the Bankruptcy Code;

      ii) a notice of the claims bar date;

     iii) notices of objections to claims;

      iv) notices of any hearings on a disclosure statement and
          confirmation of a plan or plans of reorganization; and

       v) such other miscellaneous notices as the Debtors or
          Court may deem necessary or appropriate for an orderly
          administration of these Chapter 11 cases.

(b) Within five business days after the service of a particular
     notice, file with the Clerk's Office a certificate or
     affidavit of service that includes

       i) a copy of the notice served,

      ii) an alphabetical list of persons on whom the notice was
          served, along with their address, and

     iii) the date and manner of service;

(c) Maintain copies of all proofs of claim and proofs of
     interest filed in these cases;

(d) Maintain official claims registers in these cases by
     docketing all proofs of claim and proofs of interest in a
     claims database that includes the following information for
     each such claim or interest asserted:

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

      ii) the date the proof of claim or proof of interest was
          received by Trumbull and/or the Court;

     iii) the claim number assigned to the proof of claim or
          proof of interest; and

      iv) the asserted amount and classification of the claim.

(e) Implement necessary security measures to ensure the
     completeness and integrity of the claims registers;

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

(g) Maintain an up-to-date mailing list for all entities that
     have filed proofs of claim or proofs of interest and make
     such list available upon request to the Clerk's Office or
     any party in interest;

(h) Provide access to the public for examination of the proofs
     of claim or proofs of interest filed in these cases without
     charge during regular business hours;

(i) Record all transfers of claims pursuant to Rule 3001(e) of
     the Federal Rules of Bankruptcy Procedure and provide
     notice of such transfers as required by Bankruptcy Rule
     3001(e), if directed to do so by the Court;

(j) Comply with applicable federal, state, municipal and local
     statues, ordinances, rules, regulations, orders and other
     requirements;

(k) Provide temporary employees to process claims, as
     necessary;

(l) Promptly comply with such further conditions and
     requirements as the Clerk's Office or the Court may at any
     time prescribe; and

(m) Provide such other claims processing, noticing, balloting,
     and relating administrative services as may be requested
     from time to time by the Debtors.

Trumbull Services will bill the Debtors at customary rates:

     Creditor Set-Up                     $50 per hour
     Schedule of Liability Preparation   $190 per hour
     Claims Docketing                    $65 per hour
     Document Management                 $50 per hour
     Standard Reporting                  $75 per report
     Bankruptcy Analyst                  $65 to $80 per hour
     Bankruptcy Administration Manager   $100 per hour
     Automation Consultant               $100 to $140 per hour
     Sr. Automation Consultant           $165 to $170 per hour
     Bankruptcy Consultant               $175 to $195 per hour
     Sr. Bankruptcy Consultant           $200 to $265 per hour

Advanced Glassfiber Yarns, LLC and its debtor-affiliate, AGY
Capital Corp., are affiliates of Owens Corning.  They are one of
the largest manufacturers and global suppliers of glass yarns.
The Company field for chapter 11 protection on December 10,
2002.  Mark E. Felger, Esq., at Cozen O'Connor and Alan B.
Hyman, Esq., at Scott K. Rutsky, Esq., represent the Debtors in
their restructuring efforts.  When the Company filed for chapter
11 protection, it listed $194.1 million in total assets and $409
million in total debts.


ALLEGHENY ENERGY: Sells 2 Units' Assets to Constellation Energy
---------------------------------------------------------------
Constellation Energy Group (NYSE: CEG) and Allegheny Energy,
Inc., (NYSE: AYE) reached an agreement resulting in the purchase
by Constellation Energy of two Allegheny Energy subsidiaries:
Alliance Energy Services, a provider of gas supply and
transportation services, and Fellon-McCord & Associates, an
energy consulting business.  Under the terms of the agreement,
Constellation acquired 100% ownership of both companies.

On a combined basis, the acquired companies serve approximately
1,000 customer facilities in North America.  "We are pleased to
reach this arrangement which significantly expands our large
commercial and industrial business," said Mayo A. Shattuck III,
President, Chief Executive Officer and Chairman of the Board of
Constellation Energy Group.  "This acquisition continues our
focus on serving the energy cost management needs of large
energy users while extending our reach along the energy value
chain."  During 2002, the expansion of Constellation's load
serving business, the acquisitions of NewEnergy, Alliance and
Fellon-McCord have combined to transform the company into the
nation's largest competitive supplier of energy to large
customers.

A Fortune 500 company based in Baltimore, Constellation Energy
Group owns energy-related businesses, including a merchant power
business that serves electrical load for wholesale and
commercial and industrial customers in North America, and the
Baltimore Gas and Electric Company, a regulated energy delivery
company which serves more than 1.1 million electric customers
and more than 600,000 natural gas customers in central Maryland.
At year-end 2001, Constellation Energy Group reported revenues
of $3.9 billion and assets of $14.1 billion.

With headquarters in Hagerstown, Md., Allegheny Energy is an
integrated Fortune 500 energy company with a balanced portfolio
of businesses, including Allegheny Energy Supply, which owns and
operates electric generating facilities and supplies energy and
energy-related commodities in selected domestic retail and
wholesale markets; Allegheny Power, which delivers low-cost,
reliable electric and natural gas service to about three million
people in Maryland, Ohio, Pennsylvania, Virginia, and West
Virginia; and a business segment offering fiber-optic and data
services, energy procurement and management, and energy
services.

As reported in Troubled Company Reporter's Friday Edition,
Allegheny Energy's subsidiaries, Allegheny Energy Supply
Company, LLC, and Allegheny Generating Company, received
extensions on waivers from bank lenders under their credit
agreements.

The waivers have been extended through January 14, 2003.
Allegheny Energy said that it and its subsidiaries are
continuing discussions with bank lenders under these and other
facilities, as well as with other lenders and trading
counterparties, regarding outstanding defaults, required
amendments to existing facilities, and additional secured
financing. As the Company noted earlier this month, if it is
unable to successfully complete negotiations with these lenders,
including arrangements with respect to inter-creditor issues, it
would likely be obliged to seek bankruptcy protection.

Allegheny Energy Inc.'s 7.75% bonds due 2005 (AYE05USR1) are
trading at about 72 cents-on-the-dollar, DebtTraders says. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AYE05USR1for
real-time bond pricing.


AMERICA WEST: Achieves 80.6% On-Time Performance for November
-------------------------------------------------------------
As reported in the Department of Transportation's monthly Air
Travel Consumer Report, America West Airlines (NYSE: AWA)
completed 80.6 percent of its flight on time. The airline
operated 83.4 percent of its flights in Phoenix on time and
remains the number one airline for on-time performance year-to-
date in its primary hub.

"We're very pleased that during the extremely busy Thanksgiving
travel period our dedicated employees continued to operate a
reliable airline with 84.1 percent of our flights arriving on
time and just 0.7 percent of our flights cancelled during the
peak travel period," said Jeff McClelland, executive vice
president, operations.

America West continues to show significant improvement in
customer complaints with 0.89 complaints per 100,000 passengers
in November, which is a 45 percent improvement from November
2001. America West's percentage of cancelled flights was 0.8
percent in November 2002 and the number of mishandled bags was
3.16 per 1,000 passengers.

America West Airlines is the nation's largest low-fare, hub-and-
spoke airline. Founded in 1983, it is the only carrier formed
since deregulation to achieve major airline status. Today,
America West is the nation's eighth-largest carrier and serves
93 destinations in the U.S., Canada and Mexico. America West is
a wholly owned subsidiary of America West Holdings Corporation,
an aviation and travel services company with 2001 sales of $2.1
billion.

As reported in Troubled Company Reporter's June 6, 2002 edition,
Standard & Poor's raised America West's junk corporate credit
rating to 'B-'.


AMERICA WEST: Revenue Passenger Miles Up by 26.2% in December
-------------------------------------------------------------
America West Airlines (NYSE: AWA) reported traffic statistics
for the month of December, fourth quarter and year-end 2002.
Revenue passenger miles for December 2002 were a record 1.7
billion, an increase of 26.2 percent from December 2001.
Capacity for December 2002 was 2.3 billion available seat miles,
up 14.6 percent from December 2001.  The passenger load factor
for the month of December was a record 74.0 percent versus 67.2
percent in December 2001.

The load factor for the fourth quarter 2002 was a record 73.1
percent, up 4.6 points from fourth quarter 2001.  Revenue
passenger miles for the quarter increased 25.6 percent to a
record 5.1 billion and ASMs increased 17.6 percent in the
quarter to a record 6.9 billion versus 5.9 billion in the fourth
quarter of 2001.

Year-to-date load factor was a record 73.6 percent, up 1.7
points from 2001.  Year-to-date RPMs were a record 19.9 billion,
a 4.2 percent increase from 2001.  Available seat miles
increased 1.8 percent for the current year to 27.0 billion.

The December 2001 results were significantly impacted by the
events of Sept. 11, 2001, and a subsequent reduction in America
West capacity due to reduced demand.  Compared to December 2000,
RPMs increased 7.5 percent, ASMs decreased 1.4 percent and load
factor increased 6.1 points from 67.9 percent to 74.0 percent.

"America West, like other low-fare carriers, continues to
experience impressive year-over-year gains in market share,"
said Scott Kirby, executive vice president, marketing and sales.
"Our 26 percent increase in traffic is well in excess of the
industry average and is driven by tremendous consumer response
to our business-friendly fare structure."

America West Airlines is the nation's second largest low-fare
airline. Founded in 1983, it is the only carrier formed since
deregulation to achieve major airline status.  Today, America
West is the nation's eighth-largest carrier and serves 93
destinations in the U.S., Canada and Mexico.  America West is a
wholly owned subsidiary of America West Holdings Corporation, an
aviation and travel services company with 2001 sales of $2.1
billion.


AMERICAN AIRLINES: December System-Wide Traffic Slides-Up by 14%
----------------------------------------------------------------
American Airlines reported its systemwide traffic for December
increased 14.0 percent from December 2001, on a capacity
increase of 4.6 percent.  This is a decrease in traffic of 5.7
percent and a decrease in capacity of 11.4 percent compared to
the same month in 2000.  The system load factor was 73.3, up 6.1
points from a year ago and up 4.4 points from 2000.

Due to the events of Sept. 11 of 2001, comparisons of 2002
versus 2001 do not provide a good historical benchmark.  In
order to provide a more meaningful comparison, the attached
chart also includes a comparison of December 2002 traffic
results with December 2000.

International traffic in December was up 17.2 percent year over
year but down 7.9 percent compared to December 2000.
International capacity was up 6.1 percent over December 2001,
but down 15.1 percent from 2000.  Domestic traffic was up 12.8
percent year over year for December on a capacity increase
of 4.0 percent, but domestic traffic was down 4.8 percent from
December 2000 on a capacity decrease of 9.9 percent.

American's on-time performance in December was 81.4 percent,
compared to 80.2 in December 2001.  The airline's completion
factor -- the number of flights flown expressed as a percentage
of the number of flights scheduled -- was 98.3 percent, compared
to 95.7 percent in the same month last year.

American boarded 8.0 million passengers in December, up 11.4
percent from December 2001 and down 6.4 percent from December
2000. For more information, visit http://www.amrcorp.com

AMR Corp.'s 10.20% bonds due 2020 are currently trading at about
44 cents-on-the-dollar.


AMERICAN PAD: US Trustee Appoints Official Creditors' Committee
---------------------------------------------------------------
William T. Neary, the United States Trustee appointed an
Official Unsecured Creditors Committee in American Pad & Paper,
LLC's chapter 11 proceeding.  The Committee's membership
consists of:

      (1) International Papers
          Attention: Eric G. Johannessen, Esq.
          6400 Poplar Ave.
          Memphis, TN 38197
          (901) 419-3810; facsimile (901) 419-3831
          email: eric.johannessen@ipaper.com

      (2) Actrade Capital, Inc.
          Attention: Rick McCormick, C.E.O.
          200 Cottontail Lane
          Somerset, N.J. 08874
          (732) 868-3100; facsimile (732) 868-0456
          email: rmccormick@actrade.com

      (3) Appleton Papers, Inc.
          Attention: Jeff Watt, Credit & Collections Supervisor
          P.O. Box 359
          Appleton, WI 54912
          (920) 734-9841; facsimile (800) 826-1140
          email: jwatt@appletonpapers.com

      (4) Chapco Carton Co.
          Attention: Jerry N. Poch, Treasurer
          515 W. Crossroads Pkwy
          Bolingbrook, IL 60440
          (630) 771-0900; facsimile (630) 771-0522
          email: jpoch@chapcocarton.com

      (5) JJ Collins
          Attention: James H. Collins, President
          7125 James Ave.
          Woodridge, Ill. 60517
          (630) 960-2525
          email: jcollins@jjcollins.com

      (6) Kingery Printing Co.
          Attention: Terry L. Probst, Treasurer
          3012 South Banker; P.O. Box 727
          Effingham, Ill. 62401
          (217) 347-5151; fax (217)540-5400
          email: terryp@kingeryprinting.com

      (7) Lafayette Steel Sales
          Attention: Roger Carnes, C.F.O.
          P.O. Box 4337
          Lafayette, Indiana 47903-4337
          (765) 742-1102; fax (765) 742-5815
          email: carnesr@oscarwinski.com

The UST appointed International Papers as the Chairman of the
Committee.

American Pad & Paper, LLC, a manufacturer and distributor of
writing pads, filing supplies, retail envelopes and specialty
papers, filed for chapter 11 petition on December 20, 2002 in
the U.S. Bankruptcy Court for the Eastern District of Texas.
Deirdre B. Ruckman, Esq., at Gardere & Wynne, L.L.P., represents
the Debtor in its restructuring efforts.  When the Company filed
for protection from its creditors, it listed an estimated assets
of over $10 million and estimated debts of over $50 million.


AMERIPOL SYNPOL: Section 341(a) Meeting Convenes on January 24
--------------------------------------------------------------
The United States Trustee for Region 3 will convene a meeting of
the creditors of Ameripol Synpol Corporation on January 24,
2003, at 11:30 a.m., in the J. Caleb Boggs Federal Building, 844
N. King Street, Room 2112, in Wilmington, Delaware.  This is the
first meeting of creditors required under 11 U.S.C. Sec. 341(a)
in all bankruptcy cases.

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

Ameripol Synpol Corporation filed for chapter 11 petition on
December 16, 2002, in the U.S. Bankruptcy Court for the District
of Delaware. Joseph A. Malfitano, Esq., and Robert S. Brady,
Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtor
in its restructuring efforts.  When the Company filed for
protection from its creditors, it listed an estimated assets of
more than $100 million and estimated debts of over $50 million.


ANNUITY & LIFE: Unit Meets Portion of XL Collateral Requirements
----------------------------------------------------------------
Annuity and Life Re (Holdings), Ltd.'s (NYSE: ANR) subsidiary,
Annuity and Life Reassurance, Ltd., reached an agreement with a
subsidiary of XL Capital Ltd pursuant to which the Company has
transferred certain blocks of life reinsurance business to XL,
enabling the Company to satisfy a substantial portion of the
collateral requirements under its reinsurance contracts. Under
the agreement with XL, the Company has transferred five blocks
of life reinsurance business to XL, which has in turn entered
into a 50% quota share reinsurance contract with the Company
with respect to four of those blocks of business. In addition to
certain expenses associated with completing this transaction,
the Company expects to record a non-cash charge in the fourth
quarter of 2002 of at least $20 million in connection with the
write down of deferred acquisition costs associated with the
contracts transferred to XL. Following the transfer of these
blocks of life reinsurance to XL, the Company expects to have
approximately $125 billion of in-force life reinsurance as of
December 31, 2002. In an effort to further reduce the Company's
year-end collateral requirements, the Company and XL have also
discussed the assumption by XL of certain additional small
blocks of life reinsurance subject to the completion of due
diligence by XL and other conditions.

The agreement with XL provides that XL will receive an
additional payment of $5 million if, during the next 18 months,
the Company receives new capital funding of at least $35 million
and the Company's stock price trades at or above $5.00 per share
for a period of 20 out of any 30 consecutive trading days. In
connection with the transaction, the Company's collateral
funding facility has been terminated and the Company has repaid
the amounts it owed under that arrangement. The transaction was
reviewed and approved by a special committee of disinterested
directors.

Frederick S. Hammer, non-executive Chairman of the Board of
Directors of the Company and Co-Chairman of its Transition
Committee, commented: "This transaction, together with other
actions taken by the Company in the fourth quarter, is an
important first step in our continuing efforts to stabilize our
business and address the challenges that confront us. The
transaction with XL will allow the Company to meet a substantial
portion of its year-end collateral obligations and to reduce
those obligations in future periods on satisfactory terms. In
addition to the collateral requirements associated with the
additional blocks of life reinsurance the Company has discussed
transferring to XL, we continue to negotiate with one of our
ceding companies regarding the satisfaction of its year-end
collateral requirements, which such ceding company has indicated
are approximately $50 million. During 2003, the Company will
continue its efforts to raise capital and otherwise address the
ongoing collateral requirements of its business."

Annuity and Life Re (Holdings), Ltd., provides annuity and life
reinsurance to insurers through its wholly owned subsidiaries,
Annuity and Life Reassurance, Ltd., and Annuity and Life
Reassurance America, Inc.

As reported in Troubled Company Reporter's December 12, 2002
edition, Standard & Poor's lowered its counterparty credit and
financial strength ratings on Annuity & Life Reassurance Ltd.,
and its subsidiary, Annuity & Life Reassurance America Inc.
(collectively referred to as Annuity & Life Re), to 'BBB-' from
'BBB+' following a review of the company's recent operating
results as well as its plans to raise capital and secure
collateral facilities to back statutory reserves ceded by U.S.-
based life insurers.

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

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


ARI MUTUAL INSURANCE: S&P Cuts Financial Strength Rating to Bpi
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty
credit and financial strength ratings on ARI Mutual Insurance
Co., and its affiliate, ARI Casualty Co., to 'Bpi' from 'BBpi'.
ARIC operates under a reinsurance pooling arrangement.

"The rating actions reflect the group's very weak operating
performance, low liquidity, high leverage, reinsurance
recoverables, and agent's balances relative to surplus," said
Standard & Poor's credit analyst Alan Koerber.

Headquartered in Lawrenceville, N.J., the group writes mainly
commercial auto liability, workers' compensation, and auto
physical damage in New Jersey. Its products are distributed
primarily through independent agents and it is licensed in 11
states. An affiliated company, ARI Indemnity Co., is not active
and is not rated.

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.


AVADO: S&P Revises Credit Rating to SD After Interest Payment
-------------------------------------------------------------
Standard & Poor's Ratings Services revised its corporate credit
rating to 'SD' (selective default) from 'D' on casual dining
restaurant operator Avado Brands Inc., and raised its senior
unsecured debt rating on the company to 'CC' from 'D'. At the
same time, Standard & Poor's affirmed its 'D' rating on Avado
Brands' subordinated notes.

The rating actions are the result of the company's payment of
interest to holders of its 9.75% senior unsecured notes. The
interest payment was originally due on Dec. 1, 2002. Avado has
not remitted its December 15, 2002 interest payment on its
subordinated notes.

"Avado's financial flexibility continues to be limited. On
December 27, 2002, the company executed an amendment to its $75
million credit facility whereby its lenders agreed to forbear
from exercising their remedies with respect to existing events
of default until May 31, 2003. The amendment also revised
certain financial covenants and requires the company to reduce
its obligations under the facility to zero by May 25, 2003,"
said Standard & Poor's credit analyst Diane Shand.

At September 29, 2002, Avado had $36 million of cash borrowings
and $15 million of letters of credit outstanding under the
credit facility. During the third quarter of 2002, the company
fell out of compliance with certain EBITDA requirements
contained in its credit facility and master equipment lease.

Avado needs to obtain sources of capital to meet its cash needs
and debt obligations. The company only had $309,000 of cash and
cash equivalents on the balance sheet as of Sept. 29, 2002.


BETHLEHEM STEEL: Receives ISG Proposal to Acquire All Assets
------------------------------------------------------------
Bethlehem Steel Corporation received a proposal from
International Steel Group to acquire all of Bethlehem's
steelmaking assets that, combined with ISG's assets, would
create the largest steel company in North America.

Monday marked the end of a 60-day period of exclusivity between
the two companies. Bethlehem will review the proposal with its
and ISG's advisers to determine if it is in the best interests
of Bethlehem's creditors and other constituents. The review of
the proposal could take several weeks.

"Receipt of a proposal from ISG is certainly a positive
development, and I am hopeful that we can reach an agreement in
the near future," said Robert S. Miller, Chairman and CEO of
Bethlehem Steel. "A combination of Bethlehem and ISG would
create a formidable new competitive player in the steel
industry, with 16 million tons of annual shipment capacity. The
transaction structure is designed to ensure a seamless
continuity of operations for the benefit of employees,
customers, suppliers and our communities."

The combination would be a major step toward the consolidation
and rationalization of America's steel industry. "President
Bush's courageous decision last March to grant the domestic
steel industry temporary import relief has bought us the time to
pursue this kind of restructuring," Mr. Miller commented.

The basic elements of ISG's recently concluded six-year labor
agreement with the United Steelworkers of America would apply to
the Bethlehem plants. "ISG has established a working
relationship that sets a new standard for productivity in the
integrated steel industry," he said.

"While I enthusiastically endorse the concept of a business
combination with ISG along the lines proposed, it is premature
to comment on the specific terms of the proposal. I look forward
to discussing it with ISG and with our creditors committee," Mr.
Miller added.

Bethlehem has been making substantial progress on a standalone
plan of reorganization, and will continue to pursue that
alternative until a combination with ISG has been approved by
Bethlehem's board of directors, its creditors committee and the
bankruptcy court.

"For the past 15 months, we have been working to ensure that
Bethlehem's facilities will be valued and enhanced. At the same
time, we have tried to achieve the best outcome for Bethlehem's
many constituencies. We continue to work with the USWA to
provide some assistance, through a new labor agreement like the
one reached with ISG and the union, for retiree health care.
Based on the financial challenges that Bethlehem has faced, we
believe this merger with ISG would be the best avenue toward
achieving those goals," Mr. Miller said.

If the merger is realized, the new company would have fully
integrated steelmaking operations in Cleveland, Ohio; Burns
Harbor, Ind.; East Chicago, Ind., and Sparrows Point, Md. and
electric furnaces in Coatesville and Steelton, Pa. Finishing
facilities will be located in Ohio, New York, Pennsylvania and
Indiana. The finishing facilities include those with the widest
range of high-value coating lines of any North American steel
company. In addition, ISG would succeed Bethlehem as the joint
venture partner for Bethlehem's current interests in Illinois,
Indiana, Mississippi and Florida.


BETHLEHEM STEEL: ISG Bids to Purchase Assets for $1.5 Billion
-------------------------------------------------------------
International Steel Group Incorporated is seeking to acquire
substantially all of the steel-making and related assets
currently operated by Bethlehem Steel Corporation. The
approximate value of ISG's proposal, including some assumed
liabilities, is $1.5 billion.

ISG announced in early November that it had entered into a 60-
day period of exclusive due diligence investigation of the
Bethlehem facilities. With that period of exclusivity expired
Monday, ISG said that it has completed its due diligence, has
presented an asset purchase agreement to Bethlehem, and is
presently negotiating definitive terms with Bethlehem
management.

ISG management said it believes its proposed acquisition will
have the active support of both Bethlehem management and the
United Steelworkers of America. ISG management also indicated
that it anticipates working closely with Bethlehem's key
creditors, including the Pension Benefit Guaranty Corporation.

"Upon the purchase of Bethlehem's facilities, we anticipate a
quick and orderly transition to the ISG business model and
culture, and the application of our new USWA labor agreement,"
stated Rodney B. Mott, ISG's President and CEO.

"We would like to express our thanks to all the employees of
Bethlehem, both management and hourly staff, which have assisted
us in the very accelerated due-diligence process we have now
completed. Throughout this effort, we have been mindful of the
need to act quickly to preserve the value of Bethlehem's steel-
making, steel finishing and related facilities. We are committed
to completing this transition while meeting the highest
expectations of the customers who rely on the steel produced in
the facilities we intend to purchase," stated Mott.

ISG management also indicated that it anticipates the
transaction will be facilitated by a "transition assistance
program" for those current hourly Bethlehem employees who choose
early retirement at the time of the change in ownership of
Bethlehem's facilities. Mott emphasized the important role of
the USWA in helping ISG in its effort to consolidate major
American steel making facilities. "We are very grateful to the
leadership of the USWA for the thoughtful and constructive way
they have responded to our vision of a new future for
Bethlehem's facilities. From the beginning we have viewed the
Union as a key participant in all of our endeavors and we expect
that to continue and grow as we move forward," said Mott.

"We also want to acknowledge the importance of the states and
communities in which Bethlehem's facilities are located. We plan
to work closely with these governments to help ensure the future
viability and success of the steel facilities we are seeking to
purchase," stated Mott. "We know they will be pleased with our
vision to operate all the facilities we purchase and to reinvest
in these facilities in response to market demands," he added.

"The shareholders and board of ISG are very pleased with the
progress achieved by our management team, and we have committed
the financial resources to ensure that they can continue their
successful consolidation of the steel industry," stated Wilbur
L. Ross, Jr., Chairman of ISG's board of directors and Chairman
and CEO of the WL Ross & Co. LLC, ISG's founder and largest
stakeholder.

ISG expects negotiations for the purchase of Bethlehem's assets
to be completed within the next week to ten days. The offer must
then be accepted by Bethlehem's board of directors before being
submitted to the Bankruptcy Court.

ISG was organized by WL Ross & Co. LLC in April 2002 to acquire
world- class steel making assets and, in full cooperation with
the USWA, restructure those facilities to be internationally
competitive. ISG purchased the principal steel making and steel-
finishing assets of The LTV Corporation in April 2002, including
integrated facilities in Cleveland, Ohio and East Chicago,
Indiana; a finishing facility in Hennepin, Illinois; and coke-
making facilities in Warren, Ohio. In October 2002, ISG
purchased a sheet mini-mill in Riverdale, Illinois, which was
previously operated by Acme Steel Company. The acquisition of
Bethlehem's assets, if consummated, would make ISG the largest
integrated producer of steel in North America, with over 16
million tons of annual shipments.


BOUNCEBACK TECHNOLOGIES: Funds Insufficient to Meet Cash Needs
--------------------------------------------------------------
BounceBackTechnologies.com, Inc., is a Minnesota corporation
organized in 1969.  The Company's ticker symbol for its common
stock is "BBTC" and the common stock is traded on the NASD
OTCBB.

Prior to January 4, 2000, the Corporation conducted its business
under the name of Casino Resource  Corporation.  The name change
was to reflect the Company's intent to focus on marketing, sales
and business  solutions to the Internet and e-commerce
industries.  The Company acquired all of the assets of Raw Data
Inc., a privately owned California company.  Upon the
acquisition on December 31, 1999, the Company changed the name
of its new 80%-owned subsidiary to BounceBackMedia.com, Inc.  As
BBM has been unable to generate sufficient revenue to offset its
fixed and variable expenses, the Company announced in August
2002 its intent to liquidate BBM's business operation.

The Company, through its 85%-owned subsidiary, CRC of Tunisia,
S.A., leases and operates a casino and 500-seat theatre in
Sousse, Tunisia, North Africa.  The 42,000-square foot casino
resort,  which opened October 18, 1997, has over 10,000 square
feet of gaming space with approximately 281 slot  machines and
21 table games.  CRC of Tunisia also operates a gourmet
restaurant, gift shop and additional food and bar service on the
property.

The Company was also previously in the hospitality and
entertainment industries.  In March 1994, the Company purchased
CRC of Branson, a wholly owned subsidiary, doing business as the
"Country Tonite Theatre" in Branson, Missouri, which was sold to
On Stage Entertainment on January 31, 2001.  In March 1997,
another venue for CTE, Inc., a wholly owned Nevada subsidiary
which produced the Country Tonite Show, which opened in Pigeon
Forge, Tennessee. Country Tonite Theatre, LLC, was a joint
venture between the Company and Burkhart Ventures, LLC. On
December 31, 1998, the Company sold its interest in Country
Tonite Theatre, LLC to its minority partner, Burkhart Ventures,
LLC. The Company's Country Tonite show continued to perform
under contract in the Pigeon Forge Theatre until April 20, 2000,
when the Company granted Country Tonite Theatre, LLC a license
to perform the show for $1.3 million for a 40-year term.

The Company has no current sources of revenue.  Its technology
subsidiary has essentially ceased all operations.  Its foreign
subsidiary, CRC Tunisia, had negative working capital of
($1,372,405).  Accordingly, the Company anticipates no revenues
until and unless Lakes Gaming, Inc. (NASDAQ: LACO) opens the
Pokagon Michigan Casino.

Revenue for fiscal 2002 was $33,718 compared to $273,581 for the
same period ending September 30, 2001. Operating expenses,
including cost of goods sold, wages, marketing, promotional
expense and office expenses were $210,734 for 2002 compared to
$714,956 for fiscal 2001. Net operating loss for Fiscal 2002 was
$190,767 compared to a loss of $441,944 for Fiscal 2001,
respectively. In January 2002, the Company contracted SG
Partnership to operate BBM and reduce BBM's overhead and cost of
sales expense. The parties mutually agreed to terminate their
agreement this August 2002. Due to BBM's poor revenue
performance, the Company recognized a loss of $70,167 in
reducing the carrying value of BBM's assets to their estimated
net realizable value this June 2002.

BBM has been unable to maintain a revenue stream or to generate
revenues sufficient to offset its fixed and variable expenses.
The Company has begun to liquidate BBM's business operation.

As of September 30, 2002, the Company had cash available
domestically of $36,120 compared to $1,313,125 as of September
30, 2001, respectively. During 2002 and 2001, the Company
received management fees from its foreign subsidiary, CRC of
Tunisia, S.A., of $0 and $265,000, respectively. Although
contracted to earn $40,000 per month (a total of $480,000 per
year), the management fee is paid on a monthly basis based on
sufficient available cash flow from operations. Total cash and
cash equivalent reflected on the Balance Sheet, including
domestic and foreign, totals $689,685 and $1,863,359 at
September 30, 2002 and 2001, respectively.

The Company is in the process of obtaining $500,000 bridge
financing from a private lender this December 2002 - January
2003. These monies will be utilized to support the Company's
short term operating needs, however, the Company can make no
assurances that this transaction will be completed, and if so,
management believes that current cash balances will not be
sufficient to meet the Company's operating needs. Additionally,
management believes that if the transaction is completed,
current cash balances and the funds from a $500,000 bridge loan,
will not be sufficient to meet the Company's currently
anticipated cash requirements for its operations for the next
twelve months. The Company's inability to obtain funds from the
private sales of securities, a loan from a conventional lender,
or discounting of certain receivables would have a material
adverse effect on the Company's operating results, financial
condition and ability to satisfy long-term debt and continue as
a going concern.


BUDGET GROUP: Obtains 1st Exclusivity Extension Until January 31
----------------------------------------------------------------
Judge Walrath extends Budget Group Inc., and its debtor-
affiliates' exclusive periods to file a plan to January 31, 2003
and to solicit acceptances of that plan to April 1, 2003.
(Budget Group Bankruptcy News, Issue No. 13; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

Budget Group Inc.'s 9.125% bonds due 2006 (BD06USR1), reports
DebtTraders, are trading at about 22 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BD06USR1for
real-time bond pricing.


CHILDTIME LEARNING: Fails to Satisfy Nasdaq Listing Requirement
---------------------------------------------------------------
Childtime Learning Centers, Inc., (Nasdaq: CTIME) received
notice that in addition to the previous filing delinquency, the
failure to file the Company's Form 10-Q for the period ended
October 11, 2002, as required for continued inclusion by
Marketplace Rule 4310(c)(14), the Company also failed to timely
file a Form 8-K/A containing audited financial statements in
connection with its acquisition of the assets of Tutor Time
Learning Systems, Inc., as required by Nasdaq Marketplace Rule
4310(c)(14). The Company was formally notified that this
additional issue will be considered at the Company's oral
hearing, which is scheduled for Friday, January 10, 2003.  As a
result of the Company's filing delinquency, trading symbols for
the Company's securities was changed from CTIM to CTIME at the
opening of business on December 5, 2002.

The Company has requested and has been granted a hearing before
a Nasdaq Listing Qualifications Panel to review the Staff
determination on January 10, 2003.  During the pendency of the
appeal process, the Company's securities will remain listed on
The Nasdaq SmallCap Market.  Although there are no assurances
that an appeal by the Company would be successful, the Company
is currently in the process of preparing the Company's Form 10-Q
for the period ended October 11, 2002 and the Form 8-K/A, as
required for continued inclusion on The Nasdaq SmallCap Market
by Marketplace Rule 4310(c)(14).  The Company expects that the
delinquent reports will be filed prior to the January 10, 2003
hearing.

Childtime Learning Centers, Inc., of Farmington Hills, MI
acquired Tutor Time Learning Systems, Inc., on July 19, 2002 and
is now the nation's third largest publicly traded child care
provider with operations in 30 states, the District of Columbia
and internationally.  Childtime Learning Centers, Inc., has over
7,500 employees and provides education and care for over 50,000
children daily in over 450 corporate and franchise centers
nationwide.

Childtime Learning's total working capital deficit as of
July 19, 2002, tops $16.5 million.


COMDISCO INC: Enters Stipulation Resolving Labe's Claim Dispute
---------------------------------------------------------------
James P. Labe has asserted these claims against Comdisco, Inc.:

  -- a claim for $43,758,000 for amounts due under certain
     incentive compensation plans;

  -- a claim for $7,077,045 for wrongful termination;

  -- a claim for $7,077,045 for wrongful termination and breach
     of contract; and

  -- a claim for $2,593,387 for wrongful termination.

On February 22, 2002, the Debtors objected to Mr. Labe's Claims.
Several months later, the Debtors also objected to the claims of
the SIP lenders party to the Facility and Guaranty agreement,
dated as of February 2, 1998 between the Debtors, the First
National Bank of Chicago and the financial institutions party.

On July 17, 2002, Mr. Labe objected to the confirmation of
Comdisco's plan, which was subsequently withdrawn after the
parties reached an agreement in principal as announced at the
Confirmation Hearing.

For good and valuable consideration, pursuant to the stipulation
between the Reorganized Debtors and Mr. Labe, the Court orders
that:

(a) The Reorganized Debtors and Mr. Labe have agreed to allow
    Mr. Labe's claim in the reduced amount of $2,500,000 and to
    satisfy the claim by way of a cash distribution in the
    agreed amount rather than the treatment provided in the
    Plan.  Upon making the payment, all of Mr. Labe's claims
    will be deemed dismissed with prejudice and withdrawn, and
    the reserve currently held for the claim will be reduced
    from $2,500,000 to $0;

(b) The Reorganized Debtors agree to place an additional
    $400,000 in an escrow account set up by the Debtors to be
    used for the benefit of Mr. Labe in satisfaction of any SIP
    loan liability.  Any money remaining in the escrow account
    after satisfaction of Mr. Labe's SIP loan liability will be
    distributed evenly between the Reorganized Debtors and Mr.
    Labe;

(c) The Reorganized Debtors and Mr. Labe agree to enter into a
    settlement agreement, detailing, among other things,
    releases and covenants not to sue, non-disparagement
    provisions, the terms of Mr. Labe's agreement to provide
    consulting services to the Reorganized Debtors, the
    Reorganized Debtors' agreement to provide Mr. Labe a record
    of his investment transactions and confidentiality
    provisions; and

(d) Nothing contained in the parties' stipulation will effect
    the rights of the Reorganized Debtors or any insurer with
    respect to any available insurance proceeds related to Mr.
    Labe's SIP Claims or any other SIP claim. (Comdisco
    Bankruptcy News, Issue No. 41; Bankruptcy Creditors'
    Service, Inc., 609/392-0900)


CONSECO: Look for CFC's Statements & Schedules by February 14
-------------------------------------------------------------
Under Section 521 of the Bankruptcy Code and Rule 1007 of the
Federal Rules of Bankruptcy Procedure, debtors are required
to file their schedules of assets and liabilities, statements of
financial affairs, and schedules of executory contracts and
unexpired leases within 15 days after the Petition Date.

The Conseco Finance Corp., Debtors have approximately 170,000
creditors, Anne Marrs Huber, Esq., at Kirkland & Ellis informs
the Court.  Given the size and complexity of their operations
and since certain prepetition invoices have not been received or
entered into the CFC Debtors' financial accounting systems, Ms.
Huber explains that the information needed for the Schedules and
Statements have not been compiled yet.

Accordingly, the CFC Debtors sought and obtained a Court order
extending the deadline to file their schedules and statements
until February 14, 2003. (Conseco Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


CONSOLIDATED CONTAINER: Revolving Loan Facility to Mature Today
---------------------------------------------------------------
On December 20, 2002, Consolidated Container Company LLC entered
into an amendment to its existing credit agreement with its bank
lenders. The amendment, among other things, delayed the
repayment of certain term loan principal from December 31, 2002,
to January 7, 2003, extended the maturity date of a revolving
loan facility from January 5, 2003, to January 7, 2003, and
waived compliance with certain financial covenants through
January 7, 2003.

Consolidated Container Company is a leading U.S. developer,
manufacturer and marketer of blow-molded rigid plastic
containers for the beverage, consumer and industrial markets.
The company was created in 1999 through the merger of Reid
Plastics Holdings with the domestic plastic packaging operations
of Suiza Foods Corporation.

As previously reported in Troubled Company Reporter, Standard &
Poor's placed its single-'B'-minus corporate credit rating on
Consolidated Container Company LLC and its wholly owned
subsidiary, Consolidated Container Capital Inc., on CreditWatch
with negative implications.

"The CreditWatch listing reflects heightened concerns regarding
the company's liquidity position (including tightening financial
covenants and increasing debt maturities) in light of its
ongoing operating challenges and more stringent credit
standards," said Standard & Poor's credit analyst Liley Mehta.


CONSTELLATION 3D: Creditors' Meeting to Convene on January 17
-------------------------------------------------------------
The United States Trustee will convene a meeting of
Constellation 3D, Inc.'s creditors on January 17, 2003, at 2:30
p.m., at the Office of the United States Trustee, 80 Broad
Street, Second Floor, in New York City.  This is the first
meeting of creditors required under 11 U.S.C. Sec. 341(a) in all
bankruptcy cases.

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

Constellation 3D, Inc., a research and development of data
storage technology company, filed for chapter 11 petition on
December 13, 2002 in the U.S. Bankruptcy Court for the Southern
District of New York (Manhattan).  Scott R. Kipnis, Esq., at
Hofheimer Gartlir & Gross, LLP, represents the Debtor in its
restructuring efforts.  When the Company filed for protection
from its creditors, it listed $1,041,020 in total assets and
$13,957,200 in total debts.


CONTINENTAL AIRLINES: Flies 4.8B Revenue Passenger Miles in Dec.
----------------------------------------------------------------
Continental Airlines (NYSE: CAL) reported a 2002 systemwide
mainline jet load factor of 74.1 percent, 1.7 points above the
2001 load factor.  For December 2002, Continental reported a
record December systemwide mainline jet load factor of 74.0
percent, 1.3 points above the previous record reported for
December 2001. The airline reported a record December domestic
mainline jet load factor of 75.4 percent and an international
mainline jet load factor of 71.9 percent for December 2002.

The movement of the busy Thanksgiving return days, Sunday and
Monday, from November to December this year accounted for an
increase of about two points for the December domestic mainline
jet load factor.  In the attached charts, Continental provides
traffic results for 2002, 2001 and 2000 because the events of
Sept. 11, 2001 skew year-over-year comparisons of 2002 to 2001.

For 2002, Continental reported a record on-time arrival rate of
83.5 percent and a record completion factor of 99.7 percent.
For December 2002, the airline's on-time arrival rate was 76.4
percent and its completion factor was 99.3 percent for its
mainline jet operations.

In December 2002, Continental flew 4.8 billion mainline jet
revenue passenger miles and 6.5 billion mainline jet available
seat miles systemwide, resulting in a traffic increase of 7.0
percent and a capacity increase of 5.0 percent as compared to
December 2001.  Domestic mainline jet traffic was 3.1 billion
RPMs in December 2002, up 5.9 percent from December 2001, and
December 2002 domestic mainline jet capacity was 4.0 billion
ASMs, up 1.9 percent from December 2001.

Systemwide December 2002 mainline jet passenger revenue per
available seat mile is estimated to have increased between 9 and
11 percent compared to December 2001 and decreased between 5 and
7 percent compared to December 2000.  For November 2002, RASM
decreased 1.7 percent as compared to November 2001 and declined
18.4 percent as compared to November 2000.

While the preliminary December year-over-year and year-over-2000
RASM numbers are encouraging, two factors accounted for the
improvement over previous months.  First, the very strong Sunday
and Monday Thanksgiving return days fell in December this year,
unlike the previous two years.  Continental estimates that this
contributed 3 points to the RASM improvement.  Second, the
holiday period from the Saturday before Christmas to New Year's
Eve was particularly strong, and while that strength may spill
into the first few days of January, the airline does not expect
those trends to continue for all of January.

Consolidated breakeven load factor for January 2003 is estimated
to be 84 percent.  Consolidated breakeven load factor for
December 2002 is estimated to have been 79 percent.  Actual
consolidated breakeven load factor may vary significantly from
these estimates depending on actual passenger revenue yields,
fuel price and other factors.  Month-to-date consolidated load
factor information can be found on Continental's Web site at
http://www.continental.comin the Investor Relations-
Financial/Traffic Releases section.

ExpressJet Airlines, a subsidiary of Continental Airlines doing
business as Continental Express, separately reported a record
December load factor of 67.6 percent for December 2002, 5.8
points above last year's December load factor.  ExpressJet flew
384.0 million RPMs and 568.2 million ASMs in December 2002,
resulting in a traffic increase of 36.9 percent and a capacity
increase of 25.2 percent versus December 2001.

DebtTraders says, Continental Airlines' 8.0% bonds due 2005
(CAL05USR1) are trading at about 57 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CAL05USR1for
real-time bond pricing.


COVANTA ENERGY: Court Approves Asset Sale to Allied Aviation
------------------------------------------------------------
Since no other bid was received for the Aviation Assets and
Covanta Energy Corporation and its debtor-affiliates have
consensually resolved all objections, Judge Blackshear finds
that the sale to Aviation Assets to Allied Aviation Holdings
Corporation in accordance to the terms of the Acquisition
Agreement is in the Debtors' best interest.  Hence, the Court
approves the Debtors' motion in all respects with these special
provisions:

  -- The bankruptcy cases filed by Ogden Aviation Service
     Company of New Jersey, Inc. (Case No. 02-40840), Ogden
     Aviation Service Company of New York, Inc. (Case No.
     02-40842), LaGuardia Fuel Facilities Corporation (Case No.
     02-40831) and Newark Automotive Fuel Facilities
     Corporation (Case No. 02-40833) will be dismissed on the
     closing of the sale contemplated by the Acquisition
     Agreement.  Upon Closing, the Debtors will file a notice
     informing the Court and the creditors that bankruptcy cases
     of the Acquired Companies have been dismissed.  No further
     notice will be required;

  -- The assignment of the Revocable Consent Agreement will be
     subject to the consent of the New York City Department of
     Transportation, which consent will not be unreasonably
     withheld;

  -- In connection with the sale of the Shares, upon Closing,
     any and all liens, claims and encumbrances on the assets
     of the Acquired Companies will be released and the
     Security Agreement, dated as of March 14, 2001, by and
     among certain of the Debtors and Bank of America, N.A.,
     will be terminated as to the Acquired Companies;

  -- Neither the assets nor the shares of LaGuardia Fuel
     Facilities Corporation or Newark Automotive Fuel Facilities
     Corporation will be pledged or encumbered in connection
     with Allied Aviation's financing of the proposed
     acquisition or otherwise; and

  -- The Acquisition Agreement is amended to provide that:

      (i) the term "Excluded Business" will not include the
          Debtors' fixed based operations at Kennedy Airport;
          and

     (ii) the term "Ogden NY Environmental Damages" will
          include only those items referenced in the letter to
          Jay Selcov, Esq., the Port Authority, from Seth E.
          Zuckerman, Saiber Schlesinger Satz & Goldstein, LLC,
          dated December 17, 2002.

                         *    *    *

The salient terms of the Debtors' Acquisition Agreement with
Allied Aviation are:

A. Purchase Price.  If the Court dismisses the Acquired
   Companies' bankruptcy cases -- Ogden Aviation Service Company
   of New Jersey, Inc., Ogden Aviation Service Company of New
   York, Inc., LaGuardia Fuel Facilities Corporation and Newark
   Automotive Fuel Facilities Corporation -- on or prior to
   December 31, 2002, the purchase price would be $8,000,000,
   consisting of $5,800,000 in cash and $2,200,000 in the form
   of a promissory note.  If the closing order is entered by the
   Court after December 31, 2002, the purchase price would be
   $6,000,000, consisting of $3,800,000 in cash and $2,200,000
   in the form of a promissory note.  The Purchase Price is
   subject to adjustment based on changes in the working capital
   of the Acquired Companies and Ogden New York from June 30,
   2002 to the Closing of the Sale.  In addition, Allied
   Aviation will waive any claims it or its affiliates may have
   with respect to the rejection of any agreements with the
   Debtors;

B. Purchased Businesses.  The Acquisition Agreement provides
   for the sale of all of the shares and assets owned by PA
   Aviation and Ogden New York, specifically, the shares of
   capital stock of Ogden Aviation Service Company of New
   Jersey, Inc., Ogden Aviation Service Company of New York,
   Inc., LaGuardia Fuel Facilities Corporation and Newark
   Automotive Fuel Facilities Corporation -- Acquired Companies;
   and the shares of capital stock of the Acquired Companies
   that are currently owned by PA Aviation.  Other assets to be
   sold include all of Ogden New York's rights, title and
   interest under its agreements and permits with the Port
   Authority and its collective bargaining agreements, and any
   additional contracts with airlines and suppliers, which may
   be identified by Allied Aviation;

C. Conditions to Closing.  Prior to Closing, the Debtors will
   receive Court approval of the Proposed Sale and, if
   necessary, a Break-up Fee and will secure receipt of the
   Port Authority consent and arrange with Allied Aviation the
   assumption or replacement of the Acquired Companies' and
   Ogden New York's contractors' pollution liability insurance;

D. Port Authority Consent.  To obtain the Port Authority's
   consent of the Proposed Sale, Allied Aviation will replace
   the existing $3,000,000 letter of credit related to the
   operations at LaGuardia Airport; provide an additional
   $2,000,000 letter of credit related to operations at JFK
   airport; pledge to the Port Authority all accounts receivable
   arising from operations at Newark; and provide a guaranty
   from Tampa Pipeline Corporation and Allied Aviation to cover
   its subsidiaries' obligations at JFK and Newark;

E. Assumed Liabilities.  Allied Aviation will assume all
   liabilities and obligations:

   -- of the Acquired Companies;

   -- arising out of the ownership or operation of the Ogden New
      York assets;

   -- all liabilities and obligations under the executory
      contracts and unexpired leases assigned to Allied Aviation
      pursuant to the Acquisition Agreement; and

   -- all obligations with respect to any customer deposits and
      credits under the executory contracts and unexpired leases
      assigned to Allied Aviation pursuant to the Acquisition
      Agreement;

F. Excluded Liabilities.  Allied Aviation will not assume or
   pay, discharge or perform, and will not be liable for any
   liability, claim, commitment, or obligation of the Debtors or
   any other person, disclosed or undisclosed, related or
   arising out of:

   -- any contract or lease of Ogden New York that is not
      selected by Allied Aviation as a contract or lease to be
      assigned to Allied Aviation;

   -- any Ogden New York Environmental Damages;

   -- any of the Debtors' reorganization expenses; or

   -- any employee benefit plan, program or policy that is
      maintained by, contributed to or to which there is or was
      an obligation to contribute by Covanta or any of its
      affiliates, other than certain company plans as provided
      in the Acquisition Agreement;

G. Contract or Lease.  Allied Aviation will be liable for all
   cure costs under the contracts or leases assigned to it;

H. Termination.  Termination of the Acquisition Agreement will
   occur:

   -- if either Allied Aviation or Sellers fails to fulfill its
      respective performance obligations under the Acquisition
      Agreement; or

   -- upon the selection by Sellers of an alternative
      Successful Bidder; or

   -- by mutual consent;

   -- if the Proposed Sale has not closed on or prior to the
      45th business day after the date of Court order approving
      the sale or upon the consummation of an Alternative
      Transaction;

I. Break-Up Fee.  If the Debtors accept a bid other than that
   of Allied Aviation and consummate a sale of all or
   substantially all of the Aviation Assets to this bidder
   within six months of the date of the Acquisition Agreement or
   November 14, 2002, the Debtors will pay Allied Aviation a
   $500,000 break-up fee as reimbursement of its expenses in
   respect of the transaction and for the value Allied Aviation
   added for serving as the stalking horse bidder;

J. Deposit.  Allied Aviation will pay to the Debtors a
   $2,000,000 cash deposit to be held in escrow and be applied
   against the Purchase Price at the completion of the sale,
   provided that if the Debtors consummate a sale to an
   alternative bidder, or if the Acquisition Agreement
   terminated other than as a result of a breach on the part of
   Allied Aviation, the deposit will be refunded to Allied
   Aviation;

K. Representations and Warranties.  Representations and
   warranties have been made as provided in Prepetition
   Agreement, with appropriate modifications to reflect the new
   structure of the transaction and the bankruptcy cases against
   the Debtors and Acquired Companies.  Sellers will be deemed
   to have breached a representation if Allied Acquisition knew
   of the breach before the Acquisition Agreement was executed;
   and

L. Indemnification.  The Acquisition Agreement provides that
   Allied Aviation will be indemnified for certain breaches of
   representation or warranties as described in the Acquisition
   Agreement.  The maximum potential indemnification liability
   of the Debtors is $2,200,000 and can be satisfied only by way
   of offset against the promissory note Allied Aviation will
   provide as part of the Purchase Agreement. (Covanta
   Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service,
   Inc., 609/392-0900)


EL PASO CORPORATION: EVP Ralph Eads III Leaves Company
------------------------------------------------------
El Paso Corporation (NYSE: EP), whose long-term corporate credit
rating is currently placed by Standard & Poor's at 'BB', said
that Ralph Eads III, executive vice president, left the company
effective the end of December 2002 to pursue other
opportunities.  Mr. Eads, who joined the company in 1999, was
responsible for the company's power, petroleum, trading, and
production businesses.  Mr. Eads' departure follows management
changes announced in September 2002 and the company's announced
intention to exit the energy trading business.

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

El Paso Corp.'s 5.75% bonds due 2006 (EP06USN1), DebtTraders
reports, are trading at about 63 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=EP06USN1for
real-time bond pricing.


ELAN: S&P Ratings Unaffected by Antegren's Promising Dev't Data
---------------------------------------------------------------
Standard & Poor's said that the ratings and outlook on Elan
Corp., PLC (B-/Negative) would not be affected by promising
development data on the company's drug Antegren, a prospective
autoimmune treatment for multiple sclerosis and Crohn's disease.

The U.S. multiple sclerosis market is estimated to be $2 billion
annually. Antegren, a humanized monoclonal antibody, works via a
different mechanism of action than existing treatments. However,
Elan and its development partner, Biogen Inc. (unrated), must
still conduct larger Phase III trials on the drug.

Meanwhile, Dublin, Ireland-based Elan continues to face
significant upcoming debt maturities; the company has
approximately $1 billion in LYONs securities that can be put to
the company at the end of 2003 as well as $840 million coming
due in 2004 and 2005. The company has raised more than $600
million from asset divestitures in the past two quarters.
Nevertheless, the success of Elan's ongoing restructuring
program and the strength of its cash flows from operations
remain highly uncertain.


ENCOMPASS SERVICES: Court Approves KPMG as Debtor's Accountants
---------------------------------------------------------------
The Official Committee of Unsecured Creditors, appointed in the
chapter 11 cases involving Encompass Services Corporation and
its debtor-affiliates, believes that any order approving KPMG as
auditors should clarify exactly what bankruptcy advisory
services it is to provide since the Debtors have already filed
applications to retain Conway, Del Genio, Gries & Co., LLC as
restructuring professionals, and Deloitte & Touche as tax
consultants.

James Donnell, Esq., at Andrews & Kurth LLP, in Houston, Texas,
also points out that there is no engagement letter attached to
the KPMG Application, hence, KPMG is presumably not seeking
indemnity.

                           *     *     *

After reviewing the merits of the case, Judge Greendyke approves
the Debtors' employment of KPMG.  However, Judge Greendyke
emphasizes that KPMG's services must not duplicate those of the
Debtors' other professionals including Conway, Del Genio, Gries
& Co., LLC and Deloitte & Touche.

In turn, the Debtors will pay KPMG pursuant to its customary
hourly rates as well as reimburse its for the actual and
necessary out-of-pocket expenses.  KPMG's customary hourly
rates are:

           Professional                        Rate
           ------------                        ----
           Partners                         $450 - 600
           Managing Directors/Directors      450 - 510
           Senior Managers/Managers          325 - 425
           Senior/Staff Accountants          175 - 330
           Associate                         180 - 240
           Paraprofessionals                 120

The professional services KMPG will render include:

  (a) Accounting and auditing services, including:

      -- audit and review of the Debtors' financial statements;

      -- analysis of accounting issues and advice to Debtors;
         and

      -- assistance in the preparation and filing of documents
         required by the Securities and Exchange Commission;

  (b) Bankruptcy advisory services, including:

      -- assistance in the preparation and review of reports or
         filings as required by the Court or the U.S. Trustee;

      -- review of and assistance in the preparation of
         financial information for distribution to creditors and
         other parties-in-interest; and

      -- assistance with the implementation of bankruptcy
         accounting procedures as required by the Bankruptcy
         Code and the Generally Accepted Accounting Principles,
         including, but not limited to, Statement of Position
         90-7;

  (c) Performance of other accounting or auditing services for
      the Debtors as may be necessary or desirable. (Encompass
      Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
      Service, Inc., 609/392-0900)


ENRON CORP: Secures Nod to Reclassify Kelley Drye's Engagement
--------------------------------------------------------------
Enron Corporation and its debtor-affiliates sought and obtained
a Court order reclassifying Kelley Drye & Warren LLP from being
their special counsel to an ordinary course professional in
order for the firm to collect its outstanding fees and expenses
in accordance with the Court-approved procedures.

Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, in New
York, relates that when the Debtors obtained Court approval to
employ Kelley Drye, the Ordinary Course Professional Application
had not been filed yet.  The OCP Order authorizes the Debtors to
pay compensation and expense reimbursements of up to $50,000 per
month per OCP, on average over a rolling six-month period,
provided that it does not exceed $500,000 in the aggregate in
the Debtors' Chapter 11 cases.  Mr. Rosen contends that Kelley
Drye's fees and expenses fall within the OCP Order Guidelines.

Mr. Rosen insists that the reclassification is warranted
because:

    (a) it will alleviate the need for Kelley to expend further
        fees, at the expense of the Debtors' estates, in
        connection with the preparation and review of a formal
        fee application; and

    (b) the total amount of fees and expenses the Debtors owed
        to Kelley is only $90,2687 -- far below the monthly and
        aggregate cap established by the OCP Order. (Enron
        Bankruptcy News, Issue No. 52; 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.


FORD MOTOR COMPANY: U.S. Sales Climb 8.2% in December 2002
----------------------------------------------------------
U.S. customers purchased or leased 304,293 cars and trucks from
Ford, Mercury, Lincoln, Jaguar, Volvo, and Land Rover dealers in
December, up 8.2 percent compared with a year ago.

        U.S. Market Share and First Quarter Production

"We're encouraged by our steady progress in winning back U.S.
market share," said Jim O'Connor, Ford Group Vice President,
North America Marketing, Sales and Service.  "We're a stronger
company than we were a year ago when we announced the
Revitalization Plan.  Our goal in 2003 is to build on the
foundation we laid in 2002."

The company announced it was increasing its first quarter 2003
North American production plan to 1.01 million vehicles.  "As a
result of higher than expected December sales, we're raising our
first quarter production by 10,000 units," said O'Connor.

              2002 Calendar Year Sales Highlights

The Ford F-Series was America's best-selling vehicle in 2002
with sales of 813,701.  It was the 21st year in a row that
Ford's legendary truck has topped the U.S. sales charts and the
fifth year in a row that sales exceeded 800,000.

"The Ford F-Series is the foundation of the franchise," said
O'Connor. "The all-new F-150, which debuts at the North American
International Auto Show, takes 'Built Ford Tough' to a higher
level with improved performance and function, a new exterior
design, and beautiful interiors."

Ford Division, which markets the Ford F-Series, is the largest
of Ford Motor Company's brands, and has been the best selling
brand of cars and trucks in America for 16 years in a row.

Another Ford product, Explorer, was America's best selling sport
utility vehicle in 2002 with sales of 433,847.  It was the 12th
year in a row that Explorer has been the top selling SUV and the
fifth year in a row that sales exceeded 400,000.

Ford Division's other segment leading products include the
Mustang, Ranger compact pickup, and Econoline full-size van.

Jaguar and Land Rover each set new calendar year sales records
in 2002. Jaguar dealers delivered 61,204 cars, up 37 percent
from a year ago.  It was the fourth straight year of record
sales for Jaguar.  Land Rover dealers delivered 40,987 sport
utility vehicles, up 51 percent from a year ago.  The previous
Land Rover sales record (29,380) was set in 1999.

              December 2002 Sales Highlights

In December, the company's year-to-year sales improvement
primarily reflected higher sales of sport utility vehicles and
higher retail and fleet sales for cars.

At Ford Division, sales of the all-new Expedition were 19,371,
up 31 percent from a year ago and the highest sales for any
month since October 2000.  Explorer sales were 38,645, up 25
percent from a year ago, and Escape sales were 14,447, up 30
percent.  At Lincoln Mercury, the Mountaineer set a December
sales record (4,662) and sales of the all-new Lincoln Navigator
were 3,257, up 31 percent from a year ago.  In addition, sales
of the all-new Lincoln Aviator were 1,166 -- almost double its
introductory month sales in November.  Land Rover reported
December sales of 3,653.  Finally, Volvo's all-new XC90 achieved
December sales of 3,208.

In addition to the Navigator and Aviator, Lincoln benefited from
higher sales of the Town Car and LS.  The 2003 Town Car had
December sales of 4,331, up 28 percent from a year ago.  LS
sales were 4,190, up 80 percent.  Overall, Lincoln's December
sales were 43 percent higher than a year ago.

"There has never been a newer lineup of products in Lincoln's
storied history," said O'Connor.  "We believe the momentum
generated by these new Lincoln products will help maintain our
improving market share trend as we begin 2003."

Ford Motor Company's 6.625% bonds due 2028 are trading at about
75 cents-on-the-dollar.


FRIENDLY ICE CREAM: Won't Yield to Blake's Request
--------------------------------------------------
Mr. Blake is a significant shareholder of Friendly Ice Cream
Corporation seeking to review Company records not ordinarily
available to shareholders. The Company has offered Mr. Blake the
opportunity to review the requested records provided that he
does so in good faith and for the purpose of advancing the
interests of all of the Company's shareholders. Mr. Blake is
unwilling to commit to such an undertaking after several
attempts by the Company to accommodate his requests.
Specifically, he has refused the Company's proposal to conduct
the review under the supervision of an impartial, independent
expert with directly relevant expertise, insisting instead on
the exclusive use of his personally paid advisor. The Company is
fully prepared to defend its rights and the rights of all the
Company's shareholders in denying Mr. Blake's request to
selectively disclose corporate records to him simply to advance
his personal agenda.

Friendly Ice Cream Corporation, with a total shareholders'
equity deficit of about $89 million, is a vertically integrated
restaurant company serving signature sandwiches, entrees and ice
cream desserts in a friendly, family environment in more than
550 company and franchised restaurants throughout the Northeast.
The company also manufactures ice cream, which is distributed
through more than 3,500 supermarkets and other retail locations.
With a 68-year operating history, Friendly's enjoys strong brand
recognition and is currently revitalizing its restaurants and
introducing new products to grow its customer base. Additional
information on Friendly Ice Cream Corporation can be found on
the Company's Web site at http://www.friendlys.com


FURR'S RESTAURANT: Files for Chapter 11 Relief in Dallas, Texas
---------------------------------------------------------------
Furr's Restaurant Group, Inc., (Amex: FRG), together with its
principal operating subsidiary, Cafeteria Operators, L.P., filed
a voluntary petition for Chapter 11 relief in the United States
Bankruptcy Court for Northern District of Texas, Dallas
Division. Voluntary petitions and requests for joint
administration were filed on behalf the Company, COLP and their
subsidiaries. The Company's restaurants remain open and the
Company continues to operate as a debtor in possession of its
assets.

The Company operates 75 cafeterias under the Furr's and Bishop's
names in nine Midwestern, southwestern and western states. The
Company also operates Dynamic Foods, its food preparation,
processing and distribution division, in Lubbock, Texas. In
August 2002, the Company announced that it had suffered a
serious decline in same store revenues and operating results
during the second quarter of the year based upon a combination
of factors, including continued downward trends in the cafeteria
segment of the restaurant industry and the failure of the
Company's effort to increase its customer counts by
repositioning and actively advertising its service offering and
pricing scheme beginning in April 2002. In the face of these
unfavorable trends, the Company has been working to increase its
customer traffic and revenues, and to implement significant cost
reductions. While these measures have encountered some success,
they have not been sufficient at this time to return the Company
to a sustainable level of operating profit, culminating in this
announcement.


GENTEK INC: Committee Hires Stroock & Stroock as Lead Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors needs a bankruptcy
counsel to prosecute their interest in GenTek Inc., and its
debtor-affiliates' cases. Accordingly, the Committee sought and
obtained the Court's permission to retain Stroock & Stroock &
Lavan LLP as their primary counsel, effective October 28, 2002.

The Creditors' Committee needs Stroock to:

  (a) assist, advice and represent the Committee with respect to
      the administration of these cases, as well as issues
      arising from or impacting the Debtors, the Committee or
      the Chapter 11 cases;

  (b) provide all necessary legal advice with respect to the
      Committee's powers and duties;

  (c) assist the Committee in maximizing the value of the
      Debtors' assets for the benefit of all creditors;

  (d) pursue confirmation of a plan of reorganization;

  (e) investigate, as the Committee deems appropriate, among
      other things, the Debtors' assets, liabilities, financial
      condition and operations;

  (f) commence and prosecute necessary and appropriate actions
      and proceedings on the Committee's behalf that may be
      relevant to these cases;

  (g) review, analyze or prepare, on the Committee's behalf, all
      necessary applications, motions, answers, orders, reports,
      schedules and other legal papers;

  (h) communicate with the Committee's constituents and others
      as the Committee may consider desirable in furtherance of
      its responsibilities;

  (i) appear in court to represent the Committee's interests;

  (j) confer with professional advisors the Committee retained
      so as to more properly advise the Committee; and

  (k) perform all other legal services for the Committee that
      are appropriate and necessary in the Chapter 11 cases.

Committee Chairman Thomas G. Boucher, Jr., of Ingalls & Snyder
Value Partners, L.P., relates that the Committee chose a counsel
with considerable experience in representing unsecured
creditors' and noteholders' committees in Chapter 11
reorganization cases and other debt restructuring scenarios.
Stroock currently represents or has represented creditors' and
noteholders' interests in, among other, the Chapter 11
proceedings of: Acme Metals Incorporated; Barney's, Inc.;
Burlington Motor Holding Inc.; Federated Department Stores,
Inc.; Forstmann & Company, Inc.; The Beloit Corporation;
Hillsborough Holdings Corporation; Orion Pictures Corporation;
Wheeling-Pittsburgh Steel Corporation; and W.R. Grace & Co. Inc.
Stroock also represented the debtors in many large, complex
cases including: Anchor Glass Container Corporation; Coleco
Industries, Inc.; Planet Hollywood International, Inc.; and The
Columbia Gas System, Inc.

Stroock will seek compensation for its services in accordance
with the firm's customary hourly rates.  Stroock will also seek
reimbursement of its actual necessary out-of-pocket expenses.
Stroock's hourly rates are:

             Professional                     Rate
             ------------                     ----
             Partners                      $450 - 750
             Associates/Special Counsel     185 - 550
             Legal Assistants/Aides          65 - 210

Wendell H. Adair, Jr., a member of the firm, assures Judge
Walrath that Stroock neither holds nor represents any interests
adverse to the Debtors, their estates as well as to the
creditors.  Stroock is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code. (GenTek
Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


GENUITY INC: Intends to Continue Employee Retention Program
-----------------------------------------------------------
William F. McCarthy, Esq., at Ropes & Gray, in Boston,
Massachusetts, informs the Court that Genuity Inc., and its
debtor-affiliates adopted an Employee Retention Program on
May 29, 2002, to encourage the Participants to remain in the
Company's employ and to ensure that the Company's business
operations could continue with the least amount of disruption to
their major customers, vendors and suppliers.  The Retention
Program was created in anticipation of Verizon taking control of
the Genuity Group, and in response to the repeated reductions-
in-force and other cost cutting measures that Genuity's
employees had endured over the preceding year. The Retention
Program was an effort to encourage retention of key employees
who were critical to the achievement of publicly stated
financial and operational objectives as well as those who might
be considered redundant on what appeared to be the inevitable
integration of the Genuity Group into Verizon, and to bolster
key employee morale, which had been devastated by more than a
year of multiple layoffs and two years during which salaries had
for the most part been frozen.

Mr. McCarthy explains that the Retention Program covers:

     333 key participants, including

          13 top executives,
          36 vice presidents,
          66 directors and
         218 technical, sales, operations and administrative

Participants.  As original formulated, the Retention Program
became effective on July 1, 2002 and had four quarterly payments
consisting of:

    -- a 15% payment in October;

    -- a 20% payment in January 2003;

    -- a 25% payment in April 2003; and

    -- a 40% final payment in July 2003.

As originally set up, if a participant of the Retention Program
was involuntary terminated after July 1, 2002, the participant
was entitled to the outstanding balance of the bonus.

On July 24, 2002, Verizon informed the Debtors that it would not
be exercising its option and was converting all but one of its
Class B shares into Class A shares totaling just under 10% of
the common stock of Genuity.  The effect of this action was that
Verizon was relinquishing its option to regain control of
Genuity.

At this point, Mr. McCarthy relates that the Debtors began
focusing on various restructuring alternatives, which included
strategic opportunities, asset sales and seeking relief under
the Bankruptcy Code.  Exploring the workout options necessarily
increased the workload of certain key employees.  Moreover, due
to the uncertain future, already fragile employee moral began to
deteriorate even further.  As evidenced by rising turnover
rates, attrition at the Debtors increased dramatically.

To combat these problems, the Compensation Committee of the
Debtors' Board of Directors adjusted the payment schedules of
the Retention Program after the 15% first payment was made on
October 1, 2002.  Half of the 20% January payment was made in
the last pay period of October and the other half of the 20%
January payment was made in the last pay period of November.  As
of the Petition Date, 35% of the Retention Program bonus has
been paid and 65% of the Retention Program bonus, $11,200,000,
remains to be paid.

Mr. McCarthy insists that the Retention Program is integral to
the Debtors' efforts to minimize key employee turnover during
this critical period.  The Debtors believe that the Retention
Program has been designed to provide the incentives necessary to
ensure that a sufficient number of key employees, including
officers and senior management, will remain in the Debtors'
employ as they work towards a successful sale of the Debtors'
assets to Level 3 or other successful bidder.

By this Motion, the Debtors seek authority under Sections 105(a)
and 363(b)(1) of the Bankruptcy Code to continue an existing
employee retention program that provides bonuses to encourage
the retention of specific key employees who are essential to the
operation of the Chapter 11 cases and implement a severance
benefits program for 12 senior executives.

            Summary of the Modified Retention Program

The Retention Program incentive targets are based on each
Participant's role in the Company as well as each Participant's
expected contribution during the Chapter 11 process:

    A. the chief executive officer will receive a Retention
       Program bonus equal to 100% of his annual base
       compensation;

    B. executive vice presidents and senior vice presidents will
       receive a Retention Program bonus equal to 65%-75% of the
       individual's annual base compensation;

    C. vice presidents will receive a Retention Program bonus
       equal to 65%-75% of the individual's annual base
       compensation;

    D. directors will receive a Retention Program bonus equal to
       50% of the individual's annual base compensation;

    E. technical participants will receive a Retention Program
       bonus equal to 45% of the individual's annual base
       compensation;

    F. sales participants will receive a Retention Program bonus
       equal to 30% of the individual's annual base
       compensation;

    G. operations participants will receive a Retention Program
       bonus equal to 30% of the individual's annual base
       compensation; and

    H. administrative processes participants will receive a
       Retention Program bonus equal to 30% of the individual's
       annual base compensation.

The total outstanding cost of the Retention Program will be
capped at $11,200,000.

                         Eligibility

In order to be eligible to receive any installment under the
Retention Program the Participant must, in the sole discretion
of the Debtors' management:

    -- satisfactorily perform all duties of his or her job; and

    -- keep participation in the Retention Program confidential.

Receipt of any payment under the Retention Program also will be
conditioned on the execution by Participants of a standard
release and waiver of any claims.

Mr. McCarthy states that any Participant who voluntarily leaves
the Company's employment or is terminated for Cause will forfeit
his right to continued participation in the Retention Program.
A Participant who is involuntarily separated from employment
with the Debtors, will only receive the balance of the current
installment period.  If, however, a Participant is involuntarily
separated from employment with the Company within 30 days of the
close of a sale of all or substantially all the Debtors' assets
or confirmation of the Debtors' Chapter 11 plan, the total
balance owed under the Retention Program will be paid.

Any amounts that would have otherwise been payable to a
Participant under the Retention Program, but are not paid due to
his voluntary resignation or termination for Cause may be made
available to individuals that are not participating in the
Retention Program.  The identification of these additional
Participants will be within the sole discretion of the Debtors'
management.

         Payments to Be Made under the Retention Program

If the eligibility requirements are met, the Participant will be
entitled to receive outstanding payments under the Retention
Program.  Installments 4 through 7 of the Retention Program
bonus will be paid in accordance with this schedule:

    A. Installment Four: after Court approval of the Retention
       Program, the Participant will be entitled to receive a
       lump-sum payment equal to 10% of the Retention Program
       bonus, with the payment to be made as soon as is
       administratively practical;

    B. Installment Five: within 30 days of the Initial Payment
       Date, the Participant will be entitled to receive a lump-
       sum payment equal to 15% of the Retention Program bonus,
       with the payment to be made as soon as is
       administratively practical;

    C. Installment Six: within 60 days of the Initial Payment
       Date, the Participant will be entitled to receive a lump-
       sum payment equal to 15% of the Retention Bonus, with the
       payment to be made as soon as is administratively
       practical; and

    D. Installment Seven: within 30 days of the close of a sale
       of all or substantially all of the Debtors' assets or
       confirmation of the Debtors' Chapter 11 plan, the Debtors
       will pay the Participant a lump-sum payment equal to 25%
       of the Retention Bonus; provided, however, that the
       Debtors may decide, in its sole and exclusive discretion,
       to extend the date of this payment for a period of up to
       90 days.

               Need for Employee Retention Program

Mr. McCarthy believes that the Debtors' ability to preserve
their business operations and assets would be substantially
hindered if the Debtors are unable to retain the Participants.
The Participants have the institutional knowledge and experience
necessary to efficiently assist the Debtors through the
remainder of these Chapter 11 cases.  In addition, the fact that
the Debtors are in an active process to sell their business
makes it extremely difficult for the Debtors to attract
employees at this time.  The Retention Program will provide
Participants with a greater sense of financial security, thereby
minimizing the need to seek other employment, which would
distract Participants from tasks performed for the Debtors.

The recent, significant turnover in personnel has resulted in
many current employees acting in broader and more senior roles.
Moreover, if current key employees resign there are fewer
replacements available from within the Company because of the
significant reductions in personnel and this could in turn cause
breach of the companies covenants under the Purchase Agreement.

Mr. McCarthy contends that offers of employment from debtors-in-
possession are not highly desirable.  In that way, some of the
Debtors' employees are truly irreplaceable and as a result, the
Debtors require the implementation of the Retention Program to
retain those employees necessary to continue to operate the
Debtors' business.

It is imperative that the Debtors retain Participants to
maintain operational integrity during the remainder of the
Chapter 11 process.  Without a retention program in place, the
Debtors' ability to do so is severely compromised.

               Severance for 11 Senior Executives

The chief executive officer and the compensation committee of
Genuity Inc.'s board of directors have nominated and the
Compensation Committee has approved 12 senior executives to
receive Severance Benefits.

Senior Executives are classified into three groups and are
entitled to receive severance benefits:

    A. Tier 1 Senior Executives with Agreements are entitled to
       two times annual base salary plus target bonus and 24
       months of continued benefits coverage;

    B. Tier 2 Senior Executives with Agreements are entitled to
       one times annual base salary plus target bonus and 12
       months of continued benefits coverage;

    C. There is one additional senior executive who is covered
       under the Debtors' general severance program, but for the
       purpose of these proceedings, Genuity has included him in
       this motion.  That senior executive does not have an
       employment agreement and is entitled to one times his
       annual base salary and continued benefits coverage.

A Senior Executive is entitled to Severance Benefits after
involuntary termination other than for Cause, or resignation as
a result of:

    A. a 50-mile change in principal work location; or

    C. a material reduction in compensation opportunities,
       including a reduction in annual base salary or target
       bonus.

Mr. McCarthy tells the Court that Level 3 Communications has
agreed to assume the executive employment agreements of all
Senior Executives in the severance portion of this KERP.  As a
result, if the proposed transaction between the Debtors and
Level 3 is completed, these Senior Executives will not be
entitled to the severance portion of this KERP, thereby reducing
the cost of this program by $6,400,000.  The total cost of
Severance Benefits will be capped at $6,400,000.

The Debtors have determined that the costs associated with
adoption of the Retention Program and Severance Benefits program
are more than justified when weighed against the turmoil and
loss of value that would be attendant to mass defection by the
employees generally, but especially the Participants that have
been asked to participate in the Retention Program and Senior
Executives included in the Severance Benefits program.
Moreover, the Purchase Agreement provides that the Debtors
covenant to keep key personnel available. (Genuity Bankruptcy
News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


GLIATECH INC: Hires Adams Harkness to Auction-Off ADCON Assets
--------------------------------------------------------------
Gliatech Inc., (GLIAQ.PK) entered into a definitive agreement to
sell its ADCON(R) Gel assets to Wright Medical Group, Inc.,
(Nasdaq: WMGI) for $8.4 million and future royalties. Such
agreement is subject to Bankruptcy Court approval, and the
transaction is expected to close in the first quarter of 2003.
Gliatech is conducting an auction of its ADCON(R) assets as part
of the Company's Bankruptcy Proceedings announced May 9, 2002.
The Company continues to have discussions with interested
parties regarding the sale of its ADCON(R) Solution assets.
Adams, Harkness & Hill, Inc., serves as Gliatech's investment
advisor to conduct and manage the auction of the Company's
ADCON(R) assets.

Gliatech Inc., is engaged in the discovery and development of
biosurgery and pharmaceutical products. The biosurgery products
include ADCON(R) Gel (ADCON(R)-L & T/N) and ADCON(R) Solution,
which are biopolymer medical devices designed to inhibit
scarring and adhesions following surgery. Gliatech's
pharmaceutical product candidates include proprietary monoclonal
antibodies designed to inhibit inflammation.


GOLDFARB CORP: Lenders Exploring Alternatives for Fleming Unit
--------------------------------------------------------------
The Goldfarb Corporation (TSX: GDF.A) and its subsidiary Fleming
Packaging Corporation received notice from Fleming's Lenders
that certain ongoing events of default under Fleming's loan
agreement continue. However, the Lenders have also confirmed in
writing that they will continue to explore with Fleming and the
Company alternatives for the restructuring or sale of Fleming.


HAWK CORP: NYSE Accepts Proposed Continued Listing Business Plan
----------------------------------------------------------------
Hawk Corporation (NYSE: HWK) -- whose Corporate Credit Rating
has been upgrade by Standard & Poor's to 'single-B' -- said the
New York Stock Exchange (NYSE) has accepted the Company's
business plan for its continued listing on the exchange.  As a
result, Hawk will continue to be listed on the NYSE, subject to
quarterly monitoring to the goals outlined in its plan presented
to the NYSE.

The Company's plan includes steps to comply with the NYSE's
continued listing criteria of maintaining stockholders' equity
of not less than $50.0 million and an average market
capitalization of not less than $50.0 million over a 30 trading-
day period.  The Company will work with the NYSE to achieve the
plan's goals by March 2004.

The Company's equity market capitalization, based on the 8.6
million shares of its common stock outstanding and the $2.32
closing price of the Company's common stock on December 31, 2002
was approximately $20.0 million. Stockholders' equity at
September 30, 2002 was $48.9 million.

Hawk Corporation is a leading worldwide supplier of highly
engineered products. Its friction products group is a leading
supplier of friction materials for brakes, clutches and
transmissions used in airplanes, trucks, construction equipment,
farm equipment and recreational vehicles.  Through its precision
components group, the Company is a leading supplier of powder
metal components for industrial applications, including pump,
motor and transmission elements, gears, pistons and anti-lock
sensor rings.  The Company's performance automotive group
manufactures clutches and gearboxes for motorsport applications
and performance automotive markets.  The Company's motor group
designs and manufactures die-cast aluminum rotors for fractional
and subfractional electric motors used in appliances, business
equipment and HVAC systems.  Headquartered in Cleveland, Ohio,
Hawk has approximately 1,600 employees and 16 manufacturing
sites in five countries.


HEALTH MANAGEMENT: Completes Acquisition of Acute Care Hospital
---------------------------------------------------------------
Health Management Associates, Inc., (NYSE: HMA) completed the
transaction to acquire Madison County Medical Center, a 67-bed
acute care hospital located in Canton, Mississippi.  This is the
first hospital acquisition HMA has completed in fiscal year
2003.

"We are very pleased to welcome Madison County Medical Center
into the HMA family of excellence, and we are very excited about
the opportunity to serve a growing service area in and around
Canton, Mississippi," said Joseph V. Vumbacco, President and
Chief Executive Officer of Health Management Associates.
"Madison County continues to experience dynamic growth as
Mississippi's fastest-growing county, and with Nissan Motor
Company's new North American manufacturing plant opening in
Canton, Mississippi in 2003, we expect this growth to continue.
Madison County Medical Center offers HMA the opportunity to
expand services and increase the level of high quality
healthcare to a growing area with a proven demographic need."

HMA is the largest non-urban hospital operator of general acute
care hospitals in communities situated primarily in the
Southeast and Southwest. HMA operates 44 hospitals in 14 states
with 5,987 licensed beds, and has experienced 14 years of
uninterrupted operating earnings growth.

Health Management Associates' 0.25% bonds due 2020 are currently
trading at about 66 cents-on-the-dollar.


HOUGHTON MILLS: S&P Ratchets Corporate Credit Rating Down to BB-
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on educational publisher Houghton Mifflin Co., to 'BB-'
from 'BB'. The downgrade reflects the December 31, 2002 $1.66
billion leveraged acquisition of the company by Thomas H. Lee
Partners L.P., Bain Capital Partners LLC, and the Blackstone
Group.

Houghton Mifflin also has pledged collateral that puts its
existing senior unsecured notes due 2006 and 2011 on an equal
basis with the senior secured borrowings under its credit
facilities. As a result, Standard & Poor's has revised its
listing of these notes to senior secured from senior unsecured,
and raised the ratings on the notes to 'BB-' from 'B+'. The
ratings on the senior unsecured notes due 2004 were withdrawn as
nearly all of the issue has been redeemed.

At the same time, Standard & Poor's removed all its ratings on
Houghton Mifflin from CreditWatch with developing implications
where they were placed on October 17, 2002.

The outlook is stable. Boston, Mass-based Houghton Mifflin had
total debt of about $1.0 billion as of December 31, 2002.

"The company is the fourth-largest U.S. educational publisher,
with long-standing, solid market shares in elementary and
secondary school publishing. The industry has significant
barriers to entry, as high start-up costs and long lead times
are required to develop and market educational programs. The
company is well positioned to take advantage of increasing
school enrollments and significant adoption opportunities over
the intermediate term," said Standard & Poor's credit analyst
Hal F. Diamond.

"The company's favorable operating outlook supports its debt
burden. We expect that Houghton Mifflin will maintain its credit
measures at levels consistent with the current ratings," added
Mr. Diamond.

The purchase was financed with a $600 million equity
contribution and about $1.0 billion in debt. Pro forma EBITDA
less amortization of capitalized plate costs divided by interest
expense was 2.3x for the 12 months ended September 30, 2002. The
company has higher leverage and remains smaller than its peers,
which could put it at a competitive disadvantage.


IMPSAT FIBER NETWORKS: S&P Withdraws D Corporate Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services withdrew all its ratings,
including the 'D' local and foreign currency corporate credit
ratings, on Impsat Fiber Networks Inc., at the company's
request.

Impsat provides private network, integrated data, and voice
telecommunications services in Latin America.


INSILCO: Wants Approval to Employ Ordinary Course Professionals
---------------------------------------------------------------
Insilco Technologies, Inc., and its debtor-affiliates request
authority from the U.S. Bankruptcy Court for the District of
Delaware to retain those professionals that are utilized in the
ordinary course of business without the submission of separate
employment applications, affidavits, and the issuance of
separate retention orders for each individual professional.

The Debtors also seek authority to pay each Ordinary Course
Professional 100% of the fees and disbursements incurred, up to
the lesser of:

     (a) $25,000 per month per Ordinary Course Professional or

     (b) $300,000 per month, in the aggregate, for all Ordinary
         Course Professionals.

Although certain of the Ordinary Course Professionals may hold
prepetition unsecured claims against the Debtors, the Debtors do
not believe that any such Ordinary Course Professionals has an
interest adverse to the Debtors, their creditors or other
parties in interest on the mattes for which they would be
employed.

The Debtors explain that the Ordinary Course Professionals will
not be involved in the administration of the chapter 11 cases
but, rather, will provide services in connection with the
Debtors' ongoing business operations or services ordinarily
provided by in-house counsel to a corporation. These
professionals render a wide range of legal, accounting, tax,
real estate, environmental and other services for the Debtors
that impact the Debtors' day-to-day operations. It is essential
that the employment of the Ordinary Course Professionals, many
of whom are already familiar with the Debtors' affairs, be
continued on an ongoing basis so as to avoid disruption of the
Debtors' normal business operations.

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 HEALTH: Has Until March 3 to Remove Pending Actions
--------------------------------------------------------------
Integrated Health Services, Inc., and its debtor-affiliates
obtained extension of their time to file notices to remove
prepetition lawsuits and other actions in which they are
involved to the District of Delaware for continued litigation.
The removal period is extended through March 3, 2002.
(Integrated Health Bankruptcy News, Issue No. 48; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


KULICKE & SOFFA: Will Publish Fiscal Q1 2003 Results on Jan. 22
---------------------------------------------------------------
Kulicke & Soffa Industries, Inc., (Nasdaq:KLIC) will be
releasing its 2003 first fiscal quarter ended December 31, 2002
results on Wednesday January 22, 2003 at approximately 7:00 AM
(EST).

Full text of the earnings release and summary financial
statements will be available on the K&S Web site at
http://www.kns.com/investorsor by calling 215/784-6750 for a
faxed copy. A conference call and simultaneous audio webcast
will follow at 9:00 AM (EST).

C. Scott Kulicke, chairman and chief executive officer will host
the call. Clifford G. Sprague, senior vice president and chief
financial officer will also be present.

Interested participants may dial 416/695-5259 between 8:50 AM
and 9:00 AM (EST).

For a live audio stream of the call, log on to
http://www.kns.com/investorsto access the links for Windows
Media and Real Player. These are listen only connections.

For a digital replay of the call, participants may dial toll
free 888/509-0082 or 416/695-9137 shortly after the conclusion
of the call.

An audio stream replay of this call will be available at
http://www.kns.com/investorsapproximately 1 hour after the
conclusion of the call.

Replays will be available through 6:00 PM (EST) on January 29,
2003.

Kulicke & Soffa is the world's leading supplier of semiconductor
assembly and test interconnect equipment, materials and
technology. Assembly solutions combine wire bonding equipment
with bonding wire and capillaries.

Test interconnect solutions include standard and vertical probe
cards; ATE interface assemblies and ATE boards for wafer
testing; and test sockets and contactors for all types of
packages. Kulicke & Soffa's Web site address is
http://www.kns.com

Kulicke & Soffa's 5.25% bonds due 2006 are currently trading at
about 59 cents-on-the-dollar.


LEVEL 3 COMMS: Sells Interest in California Toll Road for $46MM
---------------------------------------------------------------
Level 3 Communications, Inc., (Nasdaq: LVLT) received
approximately $46 million in cash from the sale of the "91
Express Lanes" toll road in Orange County, Calif. In addition,
the company's long-term debt will be reduced by approximately
$139 million.

On Friday, the Orange County Transportation Authority completed
its purchase of the toll road from the California Private
Transportation Company, for $207.5 million in cash and assumed
debt. Level 3 received proceeds from the sale because it is a 65
percent owner of CPTC.

"We are pleased to have finalized the sale of this non-core
asset, which both lowers debt and generates cash for our core
communications and information services businesses," said Sureel
Choksi, Level 3's chief financial officer.

The 91 Express Lanes road runs for 10 miles between the Costa
Mesa Freeway and the Orange County-Riverside County line. When
it debuted in December 1995, it was the first privately financed
toll road to open in the United States in more than 50 years.
Since then, the road has logged more than 50 million vehicle
trips. The Orange County Transportation Authority purchased
the road as part of its ongoing effort to better manage traffic
congestion in the region.

Level 3's ownership interest in the road dates to 1992. At the
time, Level 3 was operating as Kiewit Diversified Group, a
subsidiary of Peter Kiewit Sons', Inc., the private construction
company headquartered in Omaha, Neb. Kiewit was a principal
investor in CPTC, along with partners Granite Construction Inc.
and Cofiroute Corporation, a France-based builder and operator
of highway systems.

Level 3 (Nasdaq: LVLT) 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. Its Web address is
http://www.Level3.com

Level 3 Communications' September 30, 2002 balance sheet shows a
total shareholders' equity deficit of about $254 million, as
compared to a deficit of about $65 million, recorded at
December 31, 2001.


LISANTI FOODS INC: Case Summary & Largest Unsecured Creditors
-------------------------------------------------------------
Lead Debtor: Lisanti Foods, Inc
             922 Riverview Drive
             Totowa, New Jersey 07512-0000

Bankruptcy Case No.: 02-44067

Debtor affiliates filing separate chapter 11 petitions:

   Entity                                     Case No.
   ------                                     --------
   Lisanti Foods of Texas Inc.                02-44065
   Lisanti Foods of Arizona Inc.              02-44066

Type of Business: Pizza restaurant distributor.

Chapter 11 Petition Date: November 20, 2002

Court: District of New Jersey (Newark)

Judge: Novalyn L. Winfield

Debtors' Counsel: Boris I. Mankovetskiy, Esq.
                  Gail B. Cooperman, Esq.
                  Jack M. Zackin, Esq.
                  Sills Cummis Radin Tischman Epstein &
                   Gross, P.A.
                  One Riverfront Plaza
                  Newark, New Jersey 07102
                  Tel: (973) 643-6391
                  Fax: (973) 643-6500

Estimated Assets: $30 million

Estimated Debts: $33 million

A. Lisanti Foods Inc.'s 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Suprema Specialties Inc.                              $746,621
PO Box No. 280
Paterson, NJ 07543-0280

Quality Sausage Comp. Ltd.                            $320,461
PO Box 910134
Dallas, TX 75391-0134

Weyauwega Milk Products                               $214,002

C & M Fine Pack, Inc.                                 $190,073

Perdue Farms, Inc.                                    $190,073

C&F Packing Company, Inc.                             $179,686

Lucille Farm                                          $153,577

Sorrento Lactalis                                     $142,269

Letica Corporation                                    $130,382

Foremost Farms USA                                    $125,128

Bay State Milling Company                             $116,882

Global Brands Inc.                                    $101,984

Chumy Company                                          $98,786

Dopaco, Inc.                                           $92,228

Landstar Logistics                                     $77,580

Saputo Chesse USA Inc.                                 $71,570

Masson Cheese Corp.                                    $70,870

Sunny Dell Foods, Inc.                                 $70,748

Rogazzino                                              $69,966

Superwin Enterprises                                   $67,912

B. Lisanti Foods Texas Inc.'s 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Suprema Specialties                                   $412,918
PO Box No. 280
Paterson, NJ 07543-0280

Quality Sausage Comp., Ltd.                           $282,866
PO Box 910134
Dallas, TX 75391-0134

Masson Cheese Corp.                                   $185,848

Sorrento Lactalis                                      $87,573

Villa Enterprises                                      $69,712

General Mills, Inc.                                    $69,417

Bay State Milling Company                              $57,502

Letica Corporation                                     $56,716

Escalon Premier Brands                                 $55,192

GCR Irving Truct Tire CNT                              $46,209

Dopaco, Inc.                                           $45,891

Landstar Logistics                                     $42,473

Tyson Foods, Inc.                                      $41,628

Dr. Pepper Company                                     $41,220

C&M Fine Pack, Inc.                                    $40,997

Foremost Farms USA                                     $39,430

Horizon Milling, LLC                                   $36,308

Wonton Food Inc.                                       $34,096

Carolina Turkeys                                       $33,457

C. Lisanti Foods Arizona Inc.'s 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Suprema Specialties                                   $572,091
510 East 35th Street
PO Box No. 280
Paterson, NJ 07543-0280

Willamette Industries Phoenix Corrugated              $324,495
File No. 91302
Los Angeles, CA 90074

Muncie Novelty                                        $237,600

La Nova                                               $196,060

Diedrich Coffee                                       $159,777

Quality Sausage Comp., Ltd.                           $152,232

Tyson Foods, Inc.                                     $103,343

Leprino Foods                                         $103,343

Dopaco, Inc.                                           $91,678

Masson Cheese Corp.                                    $91,388

C&M Fine Pack, Inc.                                    $85,909

Party Direct                                           $80,304

Coca Cola USA                                          $69,086

Escalon Premier Brands                                 $61,350

Sunny Dell Foods, Inc.                                 $60,240

A&J Foods of Las Vegas                                 $52,709

Kingsmill Foods Company                                $49,724

F&A Cheese Corporation                                 $46,261

Bay State Milling Company                              $41,460

Dr. Pepper Company                                     $41,220


LUCENT TECHNOLOGIES: Settles Legal Dispute with Nina Aversano
-------------------------------------------------------------
Lucent Technologies (NYSE: LU) and Nina Aversano reached a
settlement on the breach of contract claim brought by Ms.
Aversano against Lucent.  The terms of the settlement are
confidential.  Ms. Aversano's claim under New Jersey's
Conscientious Employee Protection Act has been dismissed for no
consideration. There will be no further comment by either party.

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


LTV CORP: Wants to Hire Towers Perrin as Insurance Auditors
-----------------------------------------------------------
The LTV Corporation and its debtor-affiliates tell the Court
that it is necessary to have experienced, professional claim
auditors to audit sample claims.  Accordingly, the Debtors seek
the Court's authority to employ Towers Perrin Forster & Crosby,
Inc. as insurance claim auditors and employee consultants for
these Chapter 11 cases.

Towers Perrin has already performed services for some of these
Debtors before and during these Chapter 11 cases.  Before the
Petition Date, Towers Perrin performed various consulting
services, including recommendations related to the design and
administration of LTV Steel's health care plans, executive
compensation, and auditing of the administration of health care
plans.  The Debtors have continued to use Towers Perrin to
perform certain services as an ordinary course professional
postpetition, including services related to the Copperweld
Debtors' compensation plans.  The Copperweld Debtors anticipate
that they will need Tower Perrin's compensation services on a
"going-forward" basis.  To date, the Debtors have paid Towers
Perrin a total of $291,647.

                 The Insurance Audit Services

The Debtors' efforts to enhance recovery for their estates in
connection with the implementation of the APP include, among
other things, the review of the Debtors' expenses to identify
claims that may have been overpaid.  In that connection, the
Debtors have concluded that an audit of the claims administered
by the Aetna and Highmark Blue Cross and Blue Shield plans is in
their best interests.  The Debtors understand that the expected
industry error rate for the administration of the Plans is
approximately 1% of the total paid benefits.  In 2000, the
Debtors spent approximately $58,000,000, and $35,000,000 with
Aetna and Highmark.  In 2001, these figures increased to
$73,000,000 and $46,000,000.  Accordingly, the Debtors believe
that the potentially substantial economic recovery -- even
assuming a 1% error rate -- mandates, at the very least, a
preliminary audit of the Plans.

Even without consideration of industry averages, the Debtors'
discovery of substantial overpayments during the course of these
Chapter 11 proceedings suggests that the Debtors should, in the
furtherance of their fiduciary duties, investigate payments
under the Plans to ensure that no systemic overpayments exist,
or, if these systemic problems are present, to recover the
overpayments for the benefit of the estates.

As a specific example, the Debtors cite the week ending July 12,
2002, during which the weekly payment review of Highmark
revealed an overpayment of approximately $285,000.  This
overpayment was discovered because the July 12, 2002 weekly
payment was substantially larger than other weekly payments at
that point in the APP Period.  Due to the size and the dramatic
fluctuations in the amount of the weekly payments before the APP
period, however, such an overpayment would not have been
discovered during the 2000 and 2001 calendar years without an
audit.

Although the Debtors strongly believe that an audit of these
plans is required under the circumstances, the Debtors lack the
necessary manpower and expertise to conduct such an audit.
After consideration of the different auditing services
available, the Debtors asked Towers Perrin to review the volume
and type of health care claims processed by each of the Debtors'
claims administrators and recommend a targeted, cost-effective
audit plan that balances the Debtors' need to conserve funds
with the need to uncover any potential overpayments.
Accordingly, the audit plan does not include those
administrators that process a smaller dollar volume of claims or
claims that are not likely to be significantly overpaid.

The Debtors believe that the total cost of the audit and
compensation services will likely exceed the $25,000 average
monthly fee limitation per fee reporting period established for
ordinary course professionals.

Towers Perrin will perform the audit in two primary stages.
First, Towers Perrin will review 300 of the highest-cost claims
in calendar year 2000 from each of the Plans, and will record
any overpayments and additional information required to pursue
recovery of those overpayments.  Towers Perrin will also look
for any patterns or systemic errors that may require additional
targeted reviews.  Second, in the event that the 2000 Audit
uncovers material recoveries, Towers Perrin will audit the
claims in calendar year 2001 from each of the Plans in the same
fashion as the 2000 Audit.  The Debtors also anticipate that
Towers Perrin will continue to perform the Copperweld Services.

In this connection, Towers Perrin will be:

       (a) acquiring data from both claim administrators;

       (b) manipulating data and selecting samples;

       (c) retrieving supporting documentation from claim
           administrators;

       (d) conducting on-site audits; and

       (e) identifying overpayments and error patterns for
           all samples.

                          Compensation

Towers Perrin will charge the Debtors for its services on an
hourly basis, plus an "administrative load" of 6.5% to cover
expenses like toll and other charges, mail delivery, and will
seek reimbursement of other actual and necessary expenses.
Without quoting any specific hourly fees, Towers Perrin
estimates that its fees will be approximately $40,000 to $45,000
for each 300-claim sample reviewed in connection with the audit.

Thomas Farley, a principal of Towers Perrin, assures Judge Bodoh
that the firm has no connection with the Debtors, their
creditors, the U.S. Trustee or any other party with an actual or
potential interest in these Chapter 11 cases, except that before
and after the Petition Date, Towers Perrin performed services
for the Debtors as an ordinary course professional.  The Debtors
owe Towers Perrin approximately $138,604 for services performed
before the Petition Date.  Furthermore, Mr. Farley discloses
that Towers Perrin has provided and will continue to provide
services to certain creditors of the Debtors and various parties
adverse to the Debtors, but only in matters unrelated to these
Chapter 11 cases. (LTV Bankruptcy News, Issue No. 42; Bankruptcy
Creditors' Service, Inc., 609/392-00900)


MANITOWOC CO.: Completes Sale of Boom Trucks to Quantum Heavy
-------------------------------------------------------------
The Manitowoc Company, Inc., (NYSE: MTW) completed the sale of
Manitowoc Boom Trucks, Inc., to Quantum Heavy Equipment, LLC, a
Delaware limited liability company, for cash. The sale was
required by the Department of Justice in order for Manitowoc to
acquire Grove Worldwide. The final sales price was not
disclosed.

As part of the transaction, all of Manitowoc Boom Trucks' assets
and liabilities were transferred to Quantum Heavy Equipment,
which, as required under the consent decree with the Department
of Justice, has the right to use the "Manitowoc Boom Trucks"
brand name for up to three years after the closing.

"While we are disappointed to sell this business, with the
completion of this transaction all matters relating to the Grove
acquisition are now complete," said Terry D. Growcock,
Manitowoc's chairman and chief executive officer.

Quantum Heavy Equipment is a subsidiary of Quantum Value
Partners, LP. Quantum Value Partners acquires equity interests
in small- and middle-market North American companies operating
in the manufacturing, distribution, and service industries, with
the goal of achieving long-term capital growth. In addition to
acquiring Manitowoc Boom Trucks, Quantum Heavy Equipment was
organized to create a strategic platform for additional
acquisitions and future growth in the equipment marketplace.

The Manitowoc Company previously announced its intent to sell
its boom-truck business on July 29, 2002, in response to an
agreement reached with the Department of Justice concerning the
Grove acquisition. Salomon Smith Barney advised Manitowoc on the
transaction.

The Manitowoc Company, Inc., is the world's largest provider of
lifting equipment for the global construction industry,
including lattice-boom cranes, tower cranes, mobile hydraulic
cranes, and boom trucks. As a leading manufacturer of ice-cube
machines, ice/beverage dispensers, and commercial refrigeration
equipment, the company offers the broadest line of cold
foodservice equipment in the industry. In addition, the company
is a leading provider of shipbuilding, ship repair, and
conversion services for government, military, and commercial
customers throughout the maritime industry.

                         *    *    *

As previously reported, Standard & Poor's assigned its single-
'B'-plus rating to The Manitowoc Company Inc.'s proposed
offering of $175 million senior subordinated notes due 2012.

At the same time, the double-'B' corporate credit rating was
affirmed on the Manitowoc, Wisconsin-based company. In addition,
the rating was removed from CreditWatch where it was originally
placed on March 19, 2002, following the company's announcement
of the acquisition of Grove Investors Inc. The outlook is
negative.


MEDICALCV INC: Fails to Comply with Nasdaq Listing Requirements
---------------------------------------------------------------
MedicalCV, Inc., (Nasdaq: MDCVU) a Minnesota-based heart valve
company, received a notice from Nasdaq regarding its non-
compliance with the $2.5 million minimum shareholders' equity
requirement stated in Marketplace Rule 4310(C)(2)(B).

MedicalCV is in the process of preparing its plan to achieve and
sustain compliance with all The Nasdaq SmallCap Market listing
requirements. It plans to submit such documentation to Nasdaq on
or before January 10, 2003. If Nasdaq determines that
MedicalCV's plan does not adequately address the noted non-
compliance, or if MedicalCV fails to maintain compliance with
any other listing requirement, MedicalCV will receive notice
that its securities will be delisted from The Nasdaq SmallCap
Market. At that time, MedicalCV would have the ability to appeal
the decision to a Nasdaq Listing Qualifications Panel.

If MedicalCV's securities do not continue to be listed on The
Nasdaq SmallCap Market, such securities would become subject to
certain rules of the SEC relating to "penny stocks." Such rules
require broker-dealers to make a suitability determination for
purchasers and to receive a purchaser's prior written consent
for a purchase transaction, thus restricting the ability to
purchase or sell the securities in the open market. In addition,
trading, if any, would be conducted in the over-the-counter
market in the so-called "pink sheets" or on the OTC Bulletin
Board, which was established for securities that do not meet
Nasdaq listing requirements. Consequently, selling MedicalCV's
securities would be more difficult because smaller quantities of
securities could be bought and sold, transactions could be
delayed, and security analyst and news media coverage of
MedicalCV may be reduced. These factors could result in lower
prices and larger spreads in the bid and ask prices for
MedicalCV securities. There can be no assurance that MedicalCV
securities will continue to be listed on The Nasdaq SmallCap
Market.

MedicalCV, Inc., is a Minnesota-based heart valve manufacturer
with a fully integrated manufacturing facility, where it
designs, tests and manufactures all of its products. Based on
its OmnicarbonT heart valve's 18 years of excellent clinical
results in Europe, Japan and Canada, the U.S. Food and Drug
Administration gave premarket approval for the Omnicarbon valve
in July 2001 for use in the United States, without requiring
additional U.S. clinical trials. To date, more than 30,000
Omnicarbon valves have been implanted in patients in more than
30 countries. The company's securities are traded on The Nasdaq
SmallCap Market under the symbol "MDCVU." For more information
on the company, visit its Web site at http://www.medcvinc.com

                         *    *    *

               Liquidity and Capital Resources

In its SEC Form 10-Q for the period ended October 31, 2002, the
Company reported:

"Cash and cash equivalents decreased to $210,032 at October 31,
2002, from $2,781,675 at April 30, 2002.  The decrease in cash
in the current fiscal year was attributable primarily to funding
operating losses and working capital requirements.  Net cash
used in operating activities was $882,680 in the second quarter
ended October 31, 2002, and $558,221 in the same period last
year. Net cash used in operating activities for the six-month
period in fiscal 2003 was $2,412,438 compared to $1,302,895 in
the prior year.

"Net cash used in operating activities increased $324,459 in the
quarter and $1,109,543 in the six-month period over the same
periods in the prior year due primarily to funding higher
operating losses and increases in inventory .  Inventories
increased $254,189 in the current quarter and $486,559 in the
six-month period due primarily to carrying additional Omnicarbon
3000 inventory to support the U.S. product launch.

"Net cash used in investing activities was $97,768 and $86,006
for the six-month periods ended October 31, 2002 and 2001,
respectively.  We invested $97,768 in property, plant, and
equipment in the six-month period ended October 31, 2002,
compared to $45,006 in the same period last fiscal year.

"Net cash used in financing activities was $61,437 in the six-
month period ended October 31, 2002, and consisted of principal
payments on long-term debt and capital leases.  In the six-month
period ended October 31, 2001, net cash provided by financing
activities was $1,434,808.  In that period, we borrowed an
additional $1,522,305 on our bank line of credit, and $500,000
in convertible bridge notes, partially offset by $526,882 of
principal payments on our bank line of credit, long-term debt,
and capital leases combined with $61,115 in deferred financing
costs.

"From March 1992 through July 2002, our primary source of
funding has been private sales of equity securities, which
totaled $9,775,704 in gross cash proceeds.  We have also funded
our operations through collateralized equipment financing term
loans and equipment leases.  In addition, we financed our
operations since fiscal year 2000 through a bank line of credit
collateralized by our real estate, tangible and intangible
property and a guarantee by a principal shareholder.  This line
of credit, which was scheduled to mature in November 2002, has
been extended to February 2003.  Amounts borrowed under this
line of credit currently bear interest at 6.5 percent per year.
As of October 31, 2002, we had borrowed the maximum amount
available of $2,500,000 under this line of credit.

"As part of our credit agreement with Associated Bank Minnesota,
we were required to maintain a minimum tangible net worth of not
less than $3,000,000, measured as of the last day of each fiscal
quarter.  At April 30, 2001, we failed to comply with the
minimum tangible net worth covenant.  On August 24, 2001,
Associated Bank Minnesota waived such covenant defaults, and we
amended our credit agreement, which now provides that we must
maintain a minimum tangible net worth of not less than
$1,000,000, measured as of the last day of each calendar month.
We were in compliance with our debt covenants as of October 31,
2002.  However, absent an infusion of equity capital during the
quarter ending January 31, 2003, our tangible net worth will
fall below the required $1,000,000 minimum.

"As of October 31, 2002, we had cash and cash equivalents of
$210,032 and had borrowed the maximum $2,500,000 under our line
of credit with Associated Bank.  In November 2002, the maturity
date of our revolving line of credit was extended to February
2003.  In November 2002, we also obtained access for up to
$500,000 of temporary financing from a principal shareholder
intended as a bridge loan for the next 90 days or until we are
able to obtain permanent financing, whichever comes first.  In
addition, we received a $60,000 unsecured advance from an
executive officer in December 2002.

"We are currently pursuing the refinancing of our revolving line
of credit and are seeking other financing to fund our operations
and working capital requirements.  However, we cannot provide
any assurance that such additional financing will be available
on terms acceptable to the Company or at all.  We will need to
obtain additional capital prior to the maturity date of our
revolving line of credit to continue operations.

"Subject to the uncertainties surrounding our need for financing
as described above, we expect to continue developing our
business and to build market share in the U.S. now that we have
FDA premarket approval of our Omnicarbon 3000 heart valve for
sales in the U.S.  These activities will require significant
expenditures to develop, train and supply marketing materials to
our independent sales representatives and to build our sales and
marketing infrastructure.  As a result, we anticipate that our
sales and marketing and general and administrative expenses will
continue to constitute a material use of our cash resources.
The actual amounts and timing of our capital expenditures will
vary significantly depending upon the speed at which we are able
to expand our distribution capability in domestic and
international markets and the availability of financing.

"We expect that our operating losses and negative operating cash
flow will continue in fiscal years 2003 and 2004 as we expand
our manufacturing capabilities, continue increasing our
corporate staff to support the U.S. roll-out of our Omnicarbon
3000 heart valve, and add marketing programs domestically and
internationally to build awareness of and create demand for our
Omnicarbon heart valves.  As described above, we will need to
obtain additional capital prior to the maturity date of our
revolving line of credit to continue operations.  We anticipate
that we will need to raise between $2,000,000 and $3,000,000 of
additional equity or debt financing to fund operations and
working capital requirements in the next 1 to 6 months.  This is
in addition to refinancing our current $2,500,000 of bank debt
which matures in February 2003. We also anticipate the need to
raise a minimum of $1,500,000 in new financing within 6 to 9
months.  We may also seek to dispose of certain assets and enter
into a sale / leaseback arrangement involving our corporate
headquarters and manufacturing facility as a means to improve
liquidity. We expect to face substantial difficulty in raising
funds in the current market environment and we have no
commitments at this time to provide the required financing.  If
we obtain $2,000,000 to $3,000,000 of additional financing and
refinance our bank debt, we believe we will have sufficient
capacity to operate and fund the growth of our business for the
remainder of fiscal year 2003.  Our capital requirements may
vary depending upon the timing and the success of the
implementation of our business plan, regulatory, technological
and competitive developments, or if:

     -- operating losses exceed our projections,

     -- our manufacturing and development costs or projections
        prove to be inaccurate,

     -- we determine to license or develop additional
        technologies,

     -- we experience substantial difficulty in gaining U.S.
        market acceptance or delays in obtaining FDA clearance
        of our proprietary carbon coating process for heart
        valves sold in the U.S. market, or

     -- we make acquisitions.

"We cannot assure you that we will be able to raise sufficient
capital on terms that we consider acceptable, or at all.  If we
are unable to obtain adequate financing on acceptable terms, we
may be unable to continue operations."


MERCURY AIR: Completes Refinancing Transaction with Foothill
------------------------------------------------------------
Mercury Air Group (Amex: MAX; PCX) completed the refinancing of
its senior secured credit facilities with Foothill Financial
Corporation, a division of Wells Fargo Bank (NYSE: WFC), for a
five-year term.  In addition, Mercury and J. H. Whitney Co.
Mezzanine Fund revised the terms of their subordinated loan
facility, which will mature on December 31, 2005.  Both
agreements were executed on December 30th with funding occurring
on December 31, 2002.

The Foothill facility provides a $42.5 million revolving and
term loan secured by Mercury's assets and the revised agreement
on Whitney's existing $24 million loan provides incentives for
full debt retirement by the end of 2004, a year in advance of
its scheduled maturity.

"Mercury Air Group has a laser like focus on reducing long-term
debt and strengthening our balance sheet while enhancing our
core businesses and profitability," said Joseph A. Czyzyk,
President & CEO of Mercury Air Group, Inc.  "Mercury has reduced
long term debt by over $25 million since 2000 and we look
forward to our new and expanded banking relationships to
continue enhancing and protecting shareholder value and position
our company to take advantage of growth opportunities in the
future.  These new agreements provide a more flexible senior
revolving facility with Foothill and a continued business
relationship with Whitney as our lender, which we have enjoyed
since 1998."

Los Angeles-based Mercury Air Group (Amex: MAX; PCX) provides
aviation petroleum products, air cargo services and
transportation, and support services for international and
domestic commercial airlines, general and government aircraft
and specialized contract services for the United States
government.  Mercury Air Group operates four business segments
worldwide: Mercury Air Centers, Inc., MercFuel, Inc., Maytag
Aircraft Corporation and Mercury Air Cargo, Inc.  For more
information, please visit http://www.mercuryairgroup.com

Mercury Air Group's September 30, 2002 balance sheet shows that
total current liabilities exceeded total current assets by about
$17 million.


METRO ELEVATOR: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Metro Elevator LLC
        58 Clinton Road
        Fairfield, New Jersey 07004-0000

Bankruptcy Case No.: 02-45722

Type of Business: Elevator repair, maintenance and
                  modernizations

Chapter 11 Petition Date: December 26, 2002

Court: District of New Jersey (Newark)

Judge: Novalyn L. Winfield

Debtor's Counsel: Leonard C. Walczyk, Esq.
                  Wasserman, Jurista & Stolz
                  225 Millburn Avenue
                  Suite 207
                  POB 1029
                  Millburn, NJ 07041
                  Tel: (973) 467-2700

Total Assets: $1,910,000

Total Debts: $5,291,000

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Joint Industry Board                                  $823,487
158-11 Harry Van Arsdale
Jr. Avenue
Fresh Meadows, NY 11365
Tel: 718-591-2000

National Elevator Cab       Trade debt                $218,358
and Door

Commerce Bank               Trade debt                $180,204

New York Sales Tax          Sale taxes                $141,309

O. Thompson Company         Trade debt                $106,724

Benfield Electric Supply    Trade debt                 $98,666
Corporation

Motion Control Engineering  Trade debt                 $92,558

Elevator Doors, Inc.        Trade debt                 $84,447

Accurate Door &             Trade debt                 $79,468
Construction, Inc.

Hollister-Whitney Elevator  Trade debt                 $78,691

Fleet Insurance Services,   Trade debt                 $70,500
LLC

G.A.L. Manufacturing Corp.  Trade debt                 $58,871

C and K Elevator Doors, Inc. Trade debt                $50,000

Monitor Controls, Inc.      Trade debt                 $42,491

American Express            Credit card purchases      $42,401

New York City Dept. of                                 $39,683
Finance

Putnam Investments          401(k) contributions       $36,519

Elevator Div. Retirement                               $34,418
Benefit Fund

Fein, Such, Kahn and        Legal services             $34,000
Shepard, PC

Reuland Electric            Trade debt                 $25,041


MICROCELL: Firms-Up Recapitalization Plan to Cut Debt by C$1.7BB
----------------------------------------------------------------
Microcell Telecommunications Inc., (TSX: MTI.B) reached an
agreement on a recapitalization plan with its secured lenders
and unsecured noteholders. The Company has received signed
commitments to vote in favor of the proposed recapitalization
plan from its secured lenders holding in face amount C$443
million, representing approximately 75% of the outstanding
secured debt, and from holders of its unsecured notes holding in
face amount C$833 million, representing approximately 55% of the
outstanding notes. Once effective, the proposed recapitalization
plan will significantly reduce the Company's debt obligations by
approximately C$1.7 billion and its annual interest obligations
by approximately C$200 million, which should help to ensure the
Company's future as a strong and growing competitor in the
Canadian wireless industry.

"The successful completion of the negotiations with our
debtholders has resulted in a consensual agreement on a
recapitalization plan, which represents a significant
endorsement of our Company," stated Andre Tremblay, President
and Chief Executive Officer of Microcell Telecommunications.
"Working together, we achieved a solution that was best for
Microcell and its stakeholders, both in the short and long term.
We believe that we will emerge from this process not only
financially stronger, with a vastly reduced debt load, but also,
and more importantly for the long term, operationally sound,
with a wireless PCS business that is very competitive and that
generates positive and growing EBITDA. I want to especially
acknowledge our employees, our customers and our suppliers for
their support throughout this process."

The Company intends to continue conducting its operations in its
usual fashion, providing normal service to its customers, as it
works towards implementing the plan. The Company intends to pay
its suppliers for all goods and services in the ordinary course
of business, and all employees will continue to be paid
according to their normal schedules. With more than C$100
million in cash, short-term investments and marketable
securities currently, the Company anticipates having adequate
financial resources to operate normally.

Jefferies & Company, Inc., which served as financial advisor to
an ad hoc committee of Microcell's unsecured noteholders
commented, "The committee has worked hard to reach what it
believes is a viable recapitalization plan. This plan should
strengthen Microcell's financial footing and position the
Company for success in the Canadian wireless market, while
providing noteholders with a structure that should allow for
meaningful recovery on their claims."

Under the terms of the proposed recapitalization plan, the
Company will emerge with C$350 million in debt obligations and
expects to raise an additional C$75 million of working capital
financing. This represents a significant reduction from the
Company's current debt level of over C$2.0 billion.

Other key elements of the plan are as follows:

     -- All of Microcell's current secured debt, in the amount
of approximately C$600 million, will be exchanged for C$350
million of new secured debt, and for first and second preferred
shares, which together will represent, after the conversion of
preferred shares, 68% of the common equity in the recapitalized
Company before the exercise of warrants and management options.

     -- All of Microcell's current unsecured notes, in the face
amount of approximately C$1.4 billion, will be exchanged, on a
pro rata basis, for second preferred and new common shares,
which together will represent, after the conversion of preferred
shares, 31.9% of the common equity in the recapitalized Company
before the exercise of warrants and management options. In
addition, two-year and five-year warrants will be issued to the
unsecured noteholders to purchase additional shares,
representing, in the aggregate, 10.7% of the new common shares
on a fully-diluted basis before management options. The exercise
prices of the warrants will exceed current trading values and
are designed to reflect the Company's future growth prospects.
The warrants, once fully exercised, will dilute all equity
holders equally.

     -- The existing shareholders will retain 0.1% of the common
equity in the recapitalized Company before the exercise of
warrants and management options in the form of new common
shares. In addition, two-year and five-year warrants will also
be issued to the existing shareholders to purchase additional
shares, representing, in the aggregate, 21.3% of the new common
shares on a fully-diluted basis before management options. The
exercise prices of the warrants will exceed current trading
values and are designed to reflect the Company's future growth
prospects. The warrants, once fully exercised, will dilute all
equity holders equally.

     -- All Canadian secured lenders, unsecured noteholders, and
shareholders will receive voting shares. Non-Canadian secured
lenders and unsecured noteholders will receive voting shares in
accordance with the limits established by Canadian foreign
ownership and control provisions of the Telecommunications Act
and its regulations, and will receive the balance in non-voting
shares.

     -- In order to establish a period of corporate stability,
for two years following implementation of the recapitalization
plan and subject to certain exceptions, no shareholder will be
permitted to cast, either alone or as part of a group, more than
20% of the votes at any meeting of shareholders of the Company.
A shareholder rights plan will also be established to help
ensure that all shareholders are treated equally and fairly in
connection with any take-over offer for the recapitalized
Company.

To ensure that the recapitalization plan is implemented in an
orderly fashion and for the benefit of all stakeholders,
Microcell will file for an Order of the Superior Court of the
Province of Quebec under the Companies' Creditors Arrangement
Act. The secured lenders and ad hoc committee of unsecured
noteholders support the Company's filing under the CCAA and are
working with the Company to successfully implement the plan
within a short period of time. From today's date, and until the
recapitalization plan becomes effective, the Company will not
make any further payments of principal or interest on its
secured debt or unsecured notes, including the interest payment
on its Senior Discount Notes due 2006, which had been due
December 1, 2002, and quarterly principal repayments on its
secured term loans due December 31, 2002.

In order for the Company's proposed recapitalization plan to
become effective, a Court-supervised vote is required to obtain
consent from a majority of both the secured lenders and
unsecured noteholders who are present and voting and who
represent, in aggregate, not less than 66-2/3% of the principal
amount of both the secured debt and unsecured notes, each being
voted as a separate class. In addition, implementation of the
recapitalization plan is subject to the execution of definitive
documentation and to other customary conditions, and is also
conditional upon receiving all required Court, Industry Canada,
and other approvals. The Company expects to receive all
necessary approvals by the end of the first quarter of 2003.

Further details setting out the terms of the recapitalization
and the voting commitments will be addressed in the Plan of
Arrangement and Information Circular, which the Company expects
to file with the Court in January 2003.

Microcell has retained Rothschild to act as its financial
advisor and will propose, in its Court application, that Ernst &
Young Inc. serve as Court-appointed monitor during the CCAA
process to assist the Company in the implementation of the
recapitalization plan. About the Company

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: Quebec Court Approves CCAA Recapitalization Plan
-----------------------------------------------------------
Microcell Telecommunications Inc., (TSX: MTI.B) obtained a court
order from the Superior Court of the Province of Quebec under
the Companies' Creditors Arrangement Act to ensure that the
negotiated recapitalization plan is implemented in an orderly
fashion and for the benefit of all stakeholders.

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.


NATIONAL CENTURY: Wants Nod to Implement Employee Retention Plan
----------------------------------------------------------------
Prior to the Petition Date, National Century Financial
Enterprises, Inc., and its debtor-affiliates were forced to
reduce their workforce from 340 employees to 95 to cut operating
expenses and to address their liquidity crisis.  The Debtors
need the services of their remaining Employees to continue to
operate the servicing platform, support the refinancing
activities of providers, prepare recommendations and analyses to
support cash collateral hearings, all of which are to the
benefit of the estate.  These Employees are uniquely qualified
to perform these functions due to experience and familiarity
with the company's systems, processes and provider base.  Under
the current circumstances, the Employees, who are critical to
the collection process, have significant incentives to terminate
their employment with the Debtors and transition to other jobs
not least of which include two continuing regulatory
investigations. The Employees' continued employment with the
Debtors in many instances will be limited, since the refinancing
and servicing functions will be completed within the next 150
days.  Moreover, given the workforce reductions as well as the
commencement of the these Chapter 11 cases, the work demands
imposed on the remaining Employees are exceptionally high.

By this Motion, the Debtors seek the Court's authority to
implement an Employee Retention Plan.

Paul E. Harner, Esq., at Jones, Day, Reavis & Pogue, in
Columbus, Ohio, relates that one of the keys to the Debtors'
ability to maximize value for stockholders in their bankruptcy
cases will be to capitalize on the specialized knowledge
possessed by the Employees who remain employed by the Debtors.
"Given the time sensitive nature of the task of accounts
receivable collection, reconciliation, refinance and analysis,
it is imperative that the Debtors retain the Employees to aid in
this recovery effort," Mr. Harner explains.  Moreover, the
Debtors do not have the time nor the resources available to
recruit and train new employees.  It would also be very hard to
recruit new employees with the impending winddown of much of the
Debtors' business operations. Therefore, retaining the talent
and service of the Employees during the next several months is
critical to the Debtors' efforts to preserve the value of their
estates in an effective and expeditious manner.

The Debtors believe that the Retention Plan will meet the dual
goals of providing the incentives necessary to retain the
Employees while taking into account the Debtors' financial
constraints and obligations to creditors.  Mr. Harner informs
the Court that the Retention Plan has been designed to offer
retention incentives to the Employees with the objective of
assuring the retention of the Employees to the maximum extent
possible at the lowest possible cost.

The Retention Plan divides the Employees into four tiers:

    (i) Tier I-A consisting of five Employees;

   (ii) Tier I-B consisting of 15 Employees;

  (iii) Tier II consisting of 29 Employees; and

   (iv) Tier III Employees consisting of 46 Employees.

The receipt of benefits by an Employee under the Retention Plan
is subject to the Employee being in good standing under the
Debtors' employment policies.

The Retention Plan includes these components:

(a) Salary Enhancements

    The Plan provides for salary enhancements ranging from 10%
    to 25% to certain tiers of Employees retroactive to the
    Petition Date.

(b) Retention Incentives

    The Plan provides for quarterly retention incentive
    payments ranging from 10%-25% of Employees' annual salaries
    with the first payment being due on February 17, 2003.
    Employees would only earn a Retention Incentive payment if
    they were employed at the end of a particular quarter.

(c) Salary Guaranty

    The Plan provides that certain tiers of Employees will
    receive a salary guaranty for 60 or 90 days after the
    Petition Date if they do not leave voluntarily and are not
    terminated for cause prior to the end of the guaranty
    period.

(d) Severance

    The Plan provides severance benefits ranging from one to
    six weeks for all Employees, plus payout of accrued vacation
    at the time an Employee is severed.  The Debtors' customary
    severance policy was one week for each year of service with
    a minimum of two weeks severance, plus payout of accrued
    vacation.

(e) Legal Fee Benefit

    The Plan provides that the Debtors will reimburse Tier I-A
    and Tier II-B Employees up to amounts of $5,000 and $2,500,
    respectively, for the expenses of an independent attorney of
    their choosing in conjunction with any interviews by the
    Federal Bureau of Investigation or the Securities and
    Exchange Commission.  Reimbursement will be made upon
    presentation of an invoice setting forth incurred fees and
    expenses and is contingent upon the affected Employees being
    employed by the Debtors at the time the fees are incurred.
    Currently, the FBI has requested interviews with five Tier
    I-A and six Tier I-B Employees.  The Debtors also reserve
    the right, in their sole discretion, to cease to provide
    Employees the Legal Fee Benefit.

The Retention Plan benefit parameters are summarized as:

                    Tier I-A               Tier I-B
Item               Employees              Employees
----               ---------              ---------
Number of
Employees               5                    15

Salary             25% increase           12.5% increase
Enhancement        over prepetition       over prepetition
                   day                    day

Retention          25% of annual          15% of annual
Incentive          salary of each         salary of each
                   quarter                quarter

Salary             Guaranty of payment    Guaranty of payment
Guaranty           for first 90 days      for first 60 days
                   of these cases         of these cases

Severance          4 weeks of severance   4 weeks of severance
                   in the first 89 days   in the first 89 days
                   of these cases and     of these cases and
                   6 weeks of severance   6 weeks of severance
                   thereafter; accrued    thereafter; accrued
                   vacation paid out      vacation paid out

Legal Fee
Benefit            $5,000                 $2,500


                     Tier II               Tier III
Item               Employees              Employees
----               ---------              ---------
Number of
Employees               29                    46

Salary              10% increase              N/A
Enhancement         over prepetition
                    Day

Retention           10% of annual             N/A
Incentive           salary of each
                    Quarter

Salary              Guaranty of payment       N/A
Guaranty            For first 60 days
                    Of these cases

Severance           1 week of severance   1 week of severance
                    Per year of service   per year of service
                    With 1 minimum and    with 1 minimum and
                    4 weeks maximum in    4weeks maximum in
                    the first 89days      the first 89 days
                    of these cases and    of these cases and
                    1.5 weeks of          1.5 weeks of
                    severance per year    severance per year
                    of service with a     of service with a
                    2-week minimum and    2-week minimum and
                    6-week maximum        6-week maximum
                    thereafter; accrued   thereafter; accrued
                    vacation paid out     vacation paid out

Legal Fee
Benefit                  N/A                   N/A


If all of the Employees remain employed by the Debtors for the
first 120 days of the case, the cost of the Retention Plan will
be approximately $900,000.  The Debtors may later seek the
approval of an incentive compensation plan for Tier I-A and Tier
I-B Employees based on asset recovery performance after
consultation  with their credit constituencies, including the
Creditors' Committee.

Mr. Harner contends that the Retention plan will accomplish a
"sound business purpose" and is necessary because:

    (a) it will achieve its intended purposed, at the lowest
        cost possible, of retention of the Employees focused on
        preserving the value of the Debtors' estates, for the
        benefit of all stakeholders; and

    (b) the $900,000 estimated cost is reasonable. (National
        Century Bankruptcy News, Issue No. 4; Bankruptcy
        Creditors' Service, Inc., 609/392-0900)


NCS HEALTHCARE: Omnicare Ordered to Deposit $13.5-Mil. in Escrow
----------------------------------------------------------------
Omnicare, Inc. (NYSE: OCR), a leading provider of pharmaceutical
care for the elderly, said that, on January 2, 2003, the
Delaware Chancery Court ordered Omnicare to place a portion of
the amount being paid to the stockholders of NCS HealthCare,
Inc., (NCSS.OB) pursuant to the Agreement and Plan of Merger
between Omnicare and NCS in escrow pending a determination of
the Chancery Court as to the amount of fees and expenses owed to
the NCS stockholder-plaintiffs' attorneys.

The Chancery Court ordered Omnicare to deposit $13,500,000 of
the amount to be paid to NCS stockholders in Omnicare's tender
offer and merger in an escrow account within three business days
of the closing of Omnicare's tender offer pending a further
order of the Chancery Court regarding the amount of the fees and
expenses owed to the NCS stockholder-plaintiffs' attorneys.  The
Chancery Court further ordered that the escrow amount be
withheld from the amount to be paid with respect to each share
of NCS class A common stock and class B common stock acquired by
Omnicare in its tender offer and the merger on a pro rata basis.

The NCS stockholder-plaintiffs had filed a complaint seeking,
among other things, the order requiring Omnicare to escrow
$13,500,000 of the amount to be paid to NCS stockholders in
Omnicare's tender offer and merger.  This amount, the
stockholder-plaintiffs claim, is required to pay the fees and
expenses owed to the stockholder-plaintiffs' attorneys.

Omnicare is reviewing the Chancery Court's order and currently
intends to revise its tender offer documents to reflect the
Court's order.

Omnicare, based in Covington, Kentucky, is a leading provider of
pharmaceutical care for the elderly.  Omnicare serves
approximately 746,000 residents in long-term care facilities in
45 states, making it the nation's largest provider of
professional pharmacy, related consulting and data management
services for skilled nursing, assisted living and other
institutional healthcare providers.  Omnicare also provides
clinical research services for the pharmaceutical and
biotechnology industries in 28 countries worldwide.  For more
information, visit the company's Web site at
http://www.omnicare.com

NCS Healthcare's September 30, 2002 balance sheet shows a total
shareholders' equity deficit of about $111 million.


NETZEE INC: Completes Sale of Substantially All Assets for $10MM
----------------------------------------------------------------
Netzee, Inc. (OTCBB:NETZ), a leading provider of integrated
Internet banking and bill payment products and services,
announced that on December 31, 2002, it completed its previously
announced sale of substantially all of its assets to a
subsidiary of Certegy Inc., (NYSE:CEY) for a total purchase
price of $10.4 million in cash, of which $800,000 was placed
into escrow to secure Netzee's indemnification obligations.

Netzee's shareholders approved the asset sale at a special
meeting held on December 30, 2002. At the special meeting,
Netzee's shareholders also approved the liquidation and
dissolution of Netzee. As previously announced, Netzee intends
to make a liquidating distribution to holders of Netzee common
stock of up to $0.50 per share in the liquidation. Netzee
intends to begin its liquidation and to commence dissolution
proceedings as soon as practicable.

At September 30, 2002, Netzee's balance sheet shows a total
shareholders' equity deficit of about $10 million.


NEXTERA: Lexecon Inks Long-Term Contracts with Key Principals
-------------------------------------------------------------
Nextera Enterprises, Inc. (NASDAQ: NXRA), which consists of
Lexecon, one of the world's leading economics consulting firms,
said that Lexecon has executed long-term employment agreements
with certain key Lexecon principals, President Dan Fischel and
Dennis Carlton.

By agreeing to contract extensions with these senior advisors,
the Company has secured top talent to continue leading the 25
year-old economics consulting firm into its next phase of
development.

Nextera also announced that its Board of Directors has voted to
change the Nextera name to Lexecon Enterprises, Inc., in early
2003. This proposal will be submitted to the Company's
shareholders for approval at the 2003 annual meeting.

"This is truly an exciting time for Nextera and we are extremely
pleased to have executed contract extensions with Dan and
Dennis," said David Schneider, Chairman and Chief Executive
Officer of Nextera. "With Lexecon's world-renowned and respected
thought leaders committed to building the Company, we believe
that we have a strong foundation from which to further
strengthen our existing litigation consulting practice, while
expanding our emerging business advisory service offering."

Schneider concluded, "Since 1977, the Lexecon brand has enjoyed
a strong reputation for providing independent, objective
consulting advice to its law firm, government and Fortune 500
client base. We believe that rebranding the firm as Lexecon will
allow our shareholders and clients to strongly identify with our
business."

In connection with the execution of the new employment
agreements, Nextera also announced that it has amended its
senior credit agreement with Fleet National Bank and Bank of
America, the senior lenders, to extend the senior credit
facility to January 1, 2005 and to modify the principal
amortization of the senior credit facility. Also, Knowledge
Universe, Inc., an affiliate of Nextera's largest investor and
controlling shareholder, loaned an additional $5.0 million to
the Company under a Junior Credit Participation Agreement in the
senior credit facility with the senior lenders.

Under the new terms of the senior credit facility, Nextera will
permanently reduce the borrowings outstanding by $4.7 million in
2003 and by $4.7 million in 2004. The Company was previously
required to permanently reduce borrowings outstanding under the
credit facility by $8.0 million in 2003. The maturity dates of
the Company's existing subordinated debt with affiliates of
Knowledge Universe were also extended to January 1, 2005.

"We believe that the long-term employment agreements, coupled
with the extensions to the senior credit facility and
subordinated debt, will enable us to generate solid and
consistent returns for shareholders in the coming years," said
Michael Muldowney, Chief Financial Officer.

As of September 30, 2002, Nextera had approximately $27.8
million outstanding under its senior credit facility and
approximately $46.6 million of outstanding subordinated debt.

Nextera Enterprises Inc., through its wholly owned subsidiary,
Lexecon, provides a broad range of economic analysis, litigation
support, regulatory and business consulting services. One of the
nation's leading economics consulting firms, Lexecon assists its
corporate, law firm and government clients reach decisions and
defend positions with rigorous, objective and independent
examinations of complex business issues that often possess
regulatory implications. Lexecon has offices in Cambridge and
Chicago. More information can be found at http://www.nextera.com
and http://www.lexecon.com

                          *    *    *

                Liquidity And Capital Resources

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

"Consolidated working capital was $1.0 million on September 30,
2002, compared to a working capital deficit of $5.1 million on
December 31, 2001. Included in working capital were cash and
cash equivalents of $1.5 million and $4.5 million on September
30, 2002 and December 31, 2001, respectively.

"Net cash used in operating activities was $2.4 million for the
nine months ended September 30, 2002. The primary components of
net cash used in operating activities was a decrease of $7.9
million in accounts payable and accrued expenses, due primarily
to bonus payments and restructuring payments, and an increase of
$5.7 million in accounts receivable. These cash outflows were
primarily offset in part by net income of $5.6 million, an
increase in other long-term liabilities of $1.8 million and non-
cash items relating to depreciation and interest paid-in-kind of
$3.6 million.

"Net cash provided by investing activities was $12.0 million for
the nine months ended September 30, 2002, substantially
representing proceeds of $14.7 million received from the sale of
the human capital consulting business offset by restricted cash
of $2.1 million and the purchase of fixed assets of $0.6
million.

"Net cash used in financing activities was $12.5 million for the
nine months ended September 30, 2002. The primary components of
net cash used in financing activities were $10.6 million of
repayments under the Company's Senior Credit Facility and $2.5
million of payments of other debt and capital leases
obligations.

"Effective March 29, 2002, the Company entered into the Senior
Credit Facility with the Company's senior lenders. Under the
Senior Credit Facility, the Company agreed to permanently reduce
the borrowings outstanding under the facility by $6.5 million in
2002 and by $8.0 million in 2003. The Senior Credit Facility
matures on January 2, 2004. Borrowings under the facility will
bear interest at the lender's base rate plus 2.0%, with the
potential for the interest rate to be reduced 100 basis points
upon Nextera achieving certain financial and operational
milestones. In connection with the Senior Credit Facility, the
Company agreed to pay a $0.9 million fee to the senior lenders
over the next two years and issued the senior lenders additional
warrants to purchase 400,000 shares of the Company's Class A
Common Stock at an exercise price of $0.60 per share,
exercisable at the senior lenders' sole discretion at any time
prior to 18 months after payment in full of all of the Company's
obligations due under the Senior Credit Facility. The senior
lenders can elect in their sole discretion to require the
Company to redeem the warrants for a $0.2 million cash payment.
An affiliate of Knowledge Universe, an entity that indirectly
controls Nextera, has agreed to continue to guarantee $2.5
million of the Company's obligations under the Senior Credit
Facility. The Senior Credit Facility contains covenants related
to the maintenance of financial ratios, extending employment
agreements with certain key personnel (which begin to expire on
December 31, 2002) by January 1, 2003, operating restrictions,
restrictions on the payment of dividends, restrictions on cash,
and disposition of assets. The covenants were based on the
Company's operating plan for 2002 and 2003. The Company is
engaged in ongoing discussions with the senior lenders with
respect to its future liquidity requirements, debenture
subordination terms and related matters. As of September 30,
2002, the Company was in compliance with the covenants contained
in the Senior Credit Facility.

"There is no assurance that the Company will be able to meet all
future financial covenants or obtain extensions of the
employment agreements of certain key personnel by January 1,
2003. Failure to achieve either of the above will place the
Company in default of its bank covenants and could have a
material adverse effect on the financial position of the
Company. Moreover, if we are able to obtain extension of these
employment contracts, the cost associated with the extensions
could have a material adverse impact on the financial condition
of the Company.

"The terms of the Senior Credit Facility require the Company to
restrict a portion of its cash on a monthly basis based on
earned bonus amounts in order that a certain percentage of
projected earned bonus amounts is escrowed or paid by the end of
2002. The escrowed funds may only be used by the Company to pay
specified bonuses and the restrictions on cash reduce the
Company's liquidity. At September 30, 2002, Nextera had $2.1
million of cash subject to these escrow arrangements."


POLAROID CORP: Wants to Bring Back Kroll Zolfo as Consultants
-------------------------------------------------------------
Pursuant to Section 327(a) of the Bankruptcy Code, Kevin Pond,
the President and Secretary of Polaroid Corporation's Bankruptcy
Estate, seeks the Court's authority to re-employ Kroll Zolfo
Cooper LLC, successor-in-interest to Zolfo Cooper LLC, as
bankruptcy consultants and special financial advisors to the
bankruptcy estate representative, as the successor to the
Debtors, nunc pro tunc to September 6, 2002.  Except as noted in
this motion, the scope, terms and conditions of the proposed re-
employment would be identical to those set forth in the Original
Application and approved by the Court's November 5, 2001 Order.

Mr. Pond recalls that on September 5, 2002, Zolfo Cooper, LLC
closed on a transaction whereby all of the membership interests
of Zolfo Cooper Management, LLC and Zolfo Cooper Capital, LLC
were transferred to Zolfo Cooper, LLC.  The members of Zolfo
Cooper, LLC then transferred all of the membership interests in
that company to Kroll, Inc.

On November 8, 2002, Zolfo Cooper, LLC changed its name to Kroll
Zolfo Cooper, LLC.  In the interim, since September 6, 2002,
Zolfo Cooper, LLC was authorized to do business under the
alternate name of Kroll Zolfo Cooper.  In the future, Zolfo
Cooper Capital, LLC and Kroll Zolfo Cooper Management LLC intend
to merge their interests into Kroll Zolfo Cooper LLC.

According to Mr. Pond, after the closing on the transaction with
Kroll, Inc., Zolfo Cooper, LLC asked Kroll, Inc. and its
subsidiaries to disclose its connections with parties-in-
interest in this case.  Kroll, Inc. has informed Kroll Zolfo
Cooper that it had conducted a review of its professional
connections in this Chapter 11 case.  Steven G. Panagus,
Managing Director at Kroll Zolfo Cooper LLC, accordingly assures
the Court that except as those previously disclosed by Zolfo
Cooper LLC in its affidavit, Kroll Zolfo Cooper LLC:

    -- has no connection with the Debtors, their creditors or
       other parties-in-interest in this case;

    -- does not hold any interest adverse to the Debtors'
       estates; and

    -- is a "disinterested person" as defined within Section
       101(14) of the Bankruptcy Code. (Polaroid Bankruptcy
       News, Issue No. 29; Bankruptcy Creditors' Service, Inc.,
       609/392-0900)


POLYMER GROUP: Court Confirms Chapter 11 Plan of Reorganization
---------------------------------------------------------------
Polymer Group, Inc., (OTC Bulletin Board: PMGPQ) said that the
Company's Joint Second Amended Modified Plan of Reorganization
has been approved by the United States Bankruptcy Court in
Columbia, South Carolina. The Company expects to emerge from
bankruptcy within approximately 50 days, or by February 22,
2003. PGI's plan received the requisite support from all classes
of creditors and shareholders eligible to vote for the plan.

The Joint Second Amended Modified Plan of Reorganization and the
accompanying disclosure statement are available at the Company's
Web site at: http://www.polymergroupinc.com/investors.htm

Polymer Group, Inc., the world's third largest producer of
nonwovens, is a global, technology-driven developer, producer
and marketer of engineered materials. With the broadest range of
process technologies in the nonwovens industry, PGI is a global
supplier to leading consumer and industrial product
manufacturers. The Company employs approximately 4,000 people
and operates 25 manufacturing facilities throughout the world.

Polymer Group Inc.'s 9.00% bonds due 2007 (PMGP07USR1) are
trading at about 19 cents-on-the-dollar, DebtTraders says. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=PMGP07USR1
for real-time bond pricing.


RFS ECUSTA: Committee Hires Moses & Singer as Co-Counsel
--------------------------------------------------------
The Official Committee of Unsecured Creditors of RFS Ecusta
Inc., and RFS US Inc., seeks to retain Moses & Singer LLP as its
Co-Counsel.

The Committee relates to the U.S. Bankruptcy Court for the
District of Delaware that its members unanimously voted to
retain Moses & Singer as its co-counsel based on the firm's
extensive expertise in representing Creditors' Committees and
other parties in bankruptcy cases.

The Committee anticipates that Moses & Singer will provide:

     a) consultation with the Debtors' counsel concerning the
        administration of these cases;

     b) assisting the Committee in its investigation of the
        acts, conduct, assets, liabilities and financial
        condition of the Debtors, the operation of the Debtors'
        businesses and any other matter relevant to these cases;

     c) representing the Committee before the Court and advising
        the Committee regarding any pending litigation,
        hearings, motions, and decisions of the Court;

     d) reviewing, analyzing and advising the Committee
        concerning applications, orders, statements of
        operations and schedules filed with the Court by the
        Debtors or third parties;

     e) assisting the Committee in preparing applications and
        orders in support of positions taken by the Committee,
        as well as preparing witnesses and reviewing documents
        in this regard;

     f) assisting the Committee in plan negotiations, plan
        formulation and solicitation and the filing with the
        Court of acceptances and rejections of a Chapter 11
        plan, of one is filed;

     g) assisting the Committee in connection with any sale of
        the Debtors or their assets; and

     h) performing such other legal services as may be required
        in the interest of the creditors represented by the
        Committee;

The professionals who will be primarily responsible for Moses &
Singer's representation of the Committee and their rates are:

     Alan M. Gamza        Partner       $400 per hour
     Alan Kolod           Partner       $550 per hour
     Howard R. Herman     Partner       $450 per hour
     Mark N. Parry        Partner       $450 per hour
     Diane M. Anderson    Associate     $295 per hour
     Elizabeth Sawyer     Associate     $200 per hour
     Deean Fontaine       Paralegal     $130 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.


R.H. DONNELLEY: Tender Offer for 9-1/8% Sr. Sub. Notes Expires
--------------------------------------------------------------
R.H. Donnelley Inc. -- whose senior secured $1.5 billion
facility has been rated by Standard & Poor's at BB -- said that
the tender offer and consent solicitation related to its $150
million aggregate principal amount of 9 1/8% senior subordinated
notes due 2008 expired Friday, January 3, 2003, at 10 a.m., New
York City time.

The Company has received tendered notes and related consents
from holders of approximately 85.8% of the 2008 Notes pursuant
to the terms of the tender offer and consent solicitation. The
Company has accepted for payment all 2008 Notes validly tendered
before 10 a.m., New York City time, on January 3, 2003.

R.H. Donnelley, the nation's largest public stand-alone
publisher of yellow pages directories, publishes 260 Sprint
Yellow Pages(R) directories in 18 states, with major markets
including Las Vegas, Orlando and Ft. Myers. The Company also
serves as the exclusive sales agent for 129 SBC directories in
Illinois and Northwest Indiana through DonTech, its perpetual
partnership with SBC, and provides pre-press publishing
services. In total, R.H. Donnelley serves more than 250,000
local and national advertisers. For more information, please
visit R.H. Donnelley at http://www.rhd.com


SAFETY-KLEEN: Myers Wants Prompt Decision on Asset Purchase Pact
----------------------------------------------------------------
S.D. Myers, Inc., joined by Dana Stanley Myers, Scott David
Myers, Seth James Myers and David Paul Myers, individually, ask
the Court to:

      (1) compel Debtor Safety-Kleen (PPM), Inc., to assume
          or reject an executory Asset Purchase Agreement dated
          February 19, 1999, between the Debtor and SD and the
          Myerses; and

      (2) compel the immediate payment of their administrative
          expense claims for $1,350,000.

William D. Sullivan, Esq., and Charles J. Brown, III, Esq., at
Elzufon Austin Reardon Tarlov & Mondell, P.A., in Wilmington,
Delaware, explain that SD Myers is an Ohio corporation that,
prior to March 1999, was engaged in the business relating to
polychlorinated biphenyl waste management, PCB field service
activity, and PCB transportation and disposal activity.

                   The Asset Purchase Agreement

In February 1999, SD and the Debtor entered into the Purchase
Agreement providing that the Debtor would purchase the regulated
portion of SD's PCB waste management business and related assets
and undertakings for $7,000,000 and pay SD Myers and the Myerses
$1,000,000 in exchange for a non-compete agreement.

               The Myers' Non-Competition Agreement

The Purchase Agreement required SD and each of the Myerses to
execute a Non-Competition Agreement.  Under SD's Non-Competition
Agreement, SD and the Myerses agreed not to compete with the
business that the Debtor purchased for a five-year period --
from March 8, 1999 to March 7, 2004 -- anywhere within the
United States and Canada.  SD Myers's Non-Competition Agreement
is incorporated into the Purchase Agreement.

             Safety-Kleen's Non-Competition Agreement

The Purchase Agreement also required that the Debtor execute a
Non-Competition Agreement relating to that non-regulated portion
of SD Myers' business that the Debtor was not purchasing.

                The Cooperative Services Agreement

The Purchase Agreement also required the parties to enter into a
certain Cooperative Services Agreement dated March 8, 1999.

                          The Payments

Payments under the Purchase Agreement were scheduled to be made:

        (1) $4,200,000 at Closing to be allocated between the
            purchased assets ($4,000,000) and SD Myers'
            Non-Competition Agreement ($200,000);

        (2) $2,000,000 to be paid within 5 business days of
            written notice that the Debtor was free to remove
            certain purchased assets from SD Myers' Tallmadge,
            Ohio facility, including any required release from
            the appropriate regulatory agency;

        (3) $1,000,000 to be paid within 5 business days of
            written notice that SD Myers had received a
            certified closure report from an independent
            EPA-approved Professional Engineer that SD Myers
            had complied with the requirements of SD's facility
            closure plan; and

        (4) non-competition payments of:

               (i) $350,000 at the first anniversary of the
                   Closing,

              (ii) $200,000 at the second anniversary of the
                   Closing,

             (iii) $150,000 at the third anniversary of the
                   Closing, and

              (iv) $100,000 at the fourth anniversary of the
                   Closing.

Postpetition, the Debtor has failed to pay SD the $1,000,000
payment that was to follow the notice of the certified closure
report.  The report was obtained and notice was sent in
September 2000.

Postpetition, the Debtor has failed to pay SD and the Myerses
for the non-competition payments that came due on March 7, 2001
($200,000) and March 7, 2002 ($150,000).  The last non-
competition payment of $100,000 has not yet come due.

Despite the fact that the Debtor has yet to assume the Purchase
Agreement, despite the fact that the Debtor has failed to comply
with its obligations under the Purchase Agreement, and despite
the fact that Clean Harbors purchased Safety Kleen's Chemical
Services Division without having the Contract assigned to it,
Clean Harbors has advised SD Myers and the Myerses that it is
able to enforce SD's Non-Competition Agreement and prevent SD
and the Myerses from competing in the PCB waste management
industry.

According to the Myerses, the Debtor has been reaping the
benefit of owning and controlling the regulated PCB waste
management business as well as SD's Non-competition Agreement
without paying the postpetition amounts due under the Purchase
Agreement.

Executory contracts are defined as contracts "under which the
obligation of both the bankrupt and the other party to the
contract are so far unperformed that the failure of either to
complete performance would constitute a material breach excusing
performance of the other." At the Petition Date, both parties to
the Purchase Agreement had unperformed obligations, the non-
performance of which would constitute a material breach.
Therefore, the Purchase Agreement was executory within the
meaning of the Bankruptcy Code.  A continuing obligation to
refrain from action can render a contract executory.  Indeed,
courts have specifically held that a contract under which the
non-debtor party owes a duty to refrain from competition, is
executory.

The Myerses acknowledge that the Debtor should be allowed a
reasonable time to assume or reject its executory contracts.
Reasonableness depends on the circumstances of each case.  Here,
the Debtor has already sold the business to which the Contract
relates.  Under these circumstances, the Debtor does not need
any more time to decide whether to assume or reject the
Contract.

       The Debtor Should Be Compelled To Immediately Pay
           The Administrative Claims Of The Myerses

The Bankruptcy Code provides that a creditor will be allowed an
administrative expense claim in the bankruptcy case for, among
other things, "the actual, necessary costs and expenses of
preserving the estate . . ."  SD Myers is entitled to a
$1,000,000 administrative claim for obtaining the certified
closure report.  That report enhanced the regulated PCB
business, which SD Myers sold to the Debtor.

Moreover, the Myerses are entitled to an administrative claim
for refraining from competition postpetition with the Debtor.
Their non-competition enhanced the Debtor's business and the
Debtor's ability to sell that business to Clean Harbors.  The
Debtor set the value of their refraining from competition in the
Contract.  The value conferred postpetition value now totals
$350,000 (the $200,000.00 that was to be paid on March 7, 2001,
and the $150,000 that was to be paid on March 7, 2002. (Safety-
Kleen Bankruptcy News, Issue No. 50; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


SAIRGROUP FINANCE: Signs-Up Lazard to Render Financial Advice
-------------------------------------------------------------
SAirGroup Finance (USA), Inc., asks for authority from the U.S.
Bankruptcy Court for the Southern District of New York to retain
Lazard Brothers & Co., Limited and Lazard Freres & Co., LLC, as
Financial Advisors, nunc pro tunc to September 3, 2002.

The Debtor relates that the Ad Hoc Committee previously
requested that the composition of the Board of Directors of the
Debtor be reconstituted to include independent directors.
Subsequently, Myron Kaplan and James Shinehouse (who were not
affiliated with SAirGroup) were appointed to the Board and
formed a Special Committee.  The Special Committee participated
in negotiations and discussions regarding the Gate Gourmet Group
sale process.  During the negotiations, the Special Committee
engaged Lazard Brothers in dialogue.  Subsequently, the Special
Committee and the Ad Hoc Committee jointly retained Lazard
Brothers as financial advisors in connection with the Gate
Gourmet Group sale process.

Since the Ad Hoc Committee recognizes that its interests are
aligned with those of the Debtor, it supports the retention of
Lazard by the Debtor. As such, the Ad Hoc Committee has
consented to Lazard's postpetition engagement as exclusive
financial advisors to the Debtor and to the termination of
Lazard Brother's prior representation of the Ad Hoc Creditors'
Committee.

Lazard Brothers' pre-petition employment by the Ad Hoc Committee
and the Special Committee formed by the independent directors
has permitted it to become well acquainted with the Debtor's
operations, debt structure, creditors and other related matters.

Lazard Brothers is a UK-based investment banking company
authorized and regulated by the United Kingdom Financial
Services Authority which, together with various London-based
affiliates, provides a broad range of corporate and financial
advisory services. Lazard Freres is an investment banking firm
and a registered broker-dealer and investment adviser with the
United States Securities and Exchange Commission. Lazard Freres
is also a member of the New York, American and Chicago Stock
Exchanges, the National Association of Securities Dealers and
the SIPC.

Accordingly, Lazard has developed significant relevant
experience and expertise regarding the Debtor that will assist
it in providing effective and efficient services in this case.
Should the Court approve the Debtor's retention of Lazard as
financial advisors, Lazard will continue, without interruption,
to perform the services for the Debtor:

      (a) Advise the Special Committee and the Ad Hoc Committee
          on the sales process undertaken by SAirGroup, KPMG and
          Gate Gourmet management in connection with the
          contemplated sale by SAirlines of the shares of Gate
          Gourmet Holdings AG and the sale of certain loans
          extended to members of the Gate Gourmet Group by the
          Debtor, the Swiss Debtors and SAirGroup Finance (NL)
          BV;

      (b) Conduct a valuation analysis of the US Gate Gourmet
          operations as a stand alone business and the Gate
          Gourmet Group global operations as a whole;

      (c) Assist in negotiations with respect to the allocation
          of the purchase price payable to the Debtor;

      (d) Advise and met with the Special Committee and the Ad
          Hoc Committee with respect to various alternatives and
          their implementation.

In this chapter 11 case, Lazard will:

      (i) Participate in hearings and offer testimony before the
          Bankruptcy Court with respect to matters upon which
          Lazard has provided financial expertise to the Debtor;
          and

     (ii) Participate in any other activities that the Debtor
          may reasonably deem appropriate and as Lazard agrees
          to in writing.

Lazard will be entitled to:

      (a) A Monthly Financial Advisory Fee of $150,000;

      (b) If the Debtor consummates a Transaction that is any
          sale, of all or a portion of Gate Gourmet Inc. or the
          US Gate Gourmet Group, Lazard shall be paid a fee in
          US$ equal to 2.25% of the portion of Aggregate
          Consideration, not to be less than US$1,000,000; and

      (c) If the Debtor consummates any Transaction other than a
          Sale Transaction, the Debtor shall pay Lazard a
          negotiated amount not less than US$1,000,000;

The Engagement Letter defines a "Transaction" as either a
Business Combination, a Sale Transaction or a Restructuring and
"Business Combination" to mean any transaction or series of
transactions involving:

      (i) an acquisition, merger, consolidation, or other
          business combination pursuant to which the business or
          assets of the US Gate Gourmet Group or the Company are
          directly or indirectly combined with a non-affiliated
          company or a subsidiary of a non-affiliated company,

     (ii) the acquisition, directly or indirectly by a buyer of
          equity interests or options, or any combination
          thereof constituting a controlling interest in the
          then outstanding stock of any member of the US Gate
          Gourmet Group or the Company or possessing a
          controlling interest in the then outstanding voting
          power of any member of the US Gate Gourmet Group or
          the Company;

    (iii) any other purchase or acquisition by a third party of
          all or a material portion of the assets of the US Gate
          Gourmet Group or the Company; or

     (iv) the formation of a joint venture or partnership by any
          member of the US Gate Gourmet Group or the Company
          with a third party or the direct investment by a third
          party in Gate Gourmet Inc. or the Company that has the
          effect of transferring a controlling or significant
          minority interest in Gate Gourmet Inc. or the Company
          to such third party.

Furthermore, "Restructuring" means any restructuring,
reorganization or recapitalization of the Company's existing
obligations, trade claims, leases, and other liabilities by
means of a solicitation of waivers and consents, rescheduling of
debt maturities, changes in interest rates, repurchase,
settlement or forgiveness of debt, conversion of debt and/or
other liabilities into equity, exchange offer involving new
securities.

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


SALON MEDIA: Issues Convertible Promissory Note for $200,000
------------------------------------------------------------
On December 18, 2002, Salon Media Group, Inc., sold and issued a
convertible promissory note and warrants in a financing
transaction in which it raised gross proceeds of approximately
$200,000. The terms of the Financing are set forth in the Note
and Warrant Purchase Agreement entered into between the Company
and an investor, Shea Ventures LLC. The Note may be convertible
at a future date into equity securities of the Company at a
conversion price to be determined. The Warrants grant the
holders thereof the right to purchase an aggregate of
approximately 300,000 shares of the Company's common stock at an
exercise price of $0.0575 per share. The Company will use the
capital raised for working capital and other general corporate
purposes.

The Note automatically converts upon the closing of the
Company's first sale of its preferred or common stock following
December 18, 2002, with aggregate gross proceeds to the Company
of at least $2,000,000 (including the conversion of the
outstanding principal of all Notes and other converted
indebtedness of the Company), and, if no Subsequent Financing
shall have occurred by the close of business on September 30,
2003, then the Note shall automatically convert into shares of
the Company's common stock. In the event of an automatic
conversion of the Note upon a Subsequent Financing, the number
of shares of preferred or common stock to be issued upon
conversion of this and other notes shall equal the aggregate
amount of the Note obligation divided by the price per share of
the securities issued and sold in the Subsequent Financing. In
the event of an automatic Note conversion into common stock
absent a Subsequent Financing, the number of shares of the
common stock to be issued upon conversion of Notes shall equal
the aggregate amount of the Note obligations divided by the
average closing price of the Company's common stock over the
sixty (60) trading days ending on September 30, 2003, as
reported on such market(s) and/or exchange(s) where the common
stock has traded during such sixty trading days.

In connection with the Financing, the Company granted the
Investors a security interest in the Company's assets, subject
to the rights of any Senior Indebtedness.

Neither the Note, Warrants, nor the shares of common stock
underlying the Warrants have been registered for sale under the
Securities Act of 1933, as amended, and may not be offered or
sold in the United States absent registration under such act or
an applicable exemption from registration requirements.

With columnists such as Allen Barra and Camille Paglia, Salon
Media Group hopes to satisfy Web surfers weary of run-of-the-
mill Internet schlock. The online publication, Salon.com, has
branched out from its original magazine format and now offers 10
Web sites focusing on topics such as arts and entertainment,
politics, and sex. Once free, Salon is converting to a primarily
subscription-based business model. It also offers two online
communities (Table Talk and subscription-based The Well) and has
plans for a weekly radio show. The company syndicates its
content and is developing TV programming.

Salon Media Group's September 30, 2002 balance sheet shows that
total current liabilities eclipsed total current assets by about
$2.2 million.

In its SEC Form 10-Q filed on November 13, 2002, the Company
reported:

"As of September 30, 2002, Salon had approximately $0.3 million
in available cash remaining from the issuance of convertible
redeemable notes issued in July 2002. Salon also had $0.5
million of restricted cash held primarily as deposits for
various lease arrangements.

"Net cash used in operations was $1.9 million for the six months
ended September 30, 2002, compared to $3.3 million for the six
months ended September 30, 2001. The principal use of cash
during the six months ended September 30, 2002 was to fund the
$3.1 million net loss for the period and a $0.1 million decrease
in liabilities, offset partly by non-cash charges of $1.1
million. The principal use of cash during the six months ended
September 30, 2001 was to fund the $5.3 million net loss for the
period and a $0.6 million decrease in liabilities, offset partly
by non-cash charges of $2.2 million.

"No cash was used in investing activities for the six months
ended September 30, 2002, compared to an immaterial amount for
the six months ended September 30, 2001. Salon does not expect
any significant capital expenditures during the current fiscal
year.

"Net cash provided from financing activities was $0.6 million
for the six months ended September 30, 2002, compared to $3.1
million for the six months ended September 30, 2001. The
principal source of funds for the six months ended September 30,
2002 was $0.7 million from the issuance of convertible
redeemable notes, offset by $0.1 million of lease payments. The
principal source of funds for the six months ended September 30,
2001 was $3.2 million from the issuance of Series A convertible
preferred stock, offset by $0.1 million of lease payments.

"As of September 30, 2002, Salon's available cash resources were
sufficient to meet working capital needs for approximately one
month. Subsequent to September 30, 2002, Salon received gross
proceeds of $0.2 million from the issuance of an unsecured
promissory note to a member of Salon's Board of Directors. Salon
believes with this cash, together with collections of accounts
receivable, that it will be able to fund working capital needs
through November 2002. Copies of the relevant documents relating
to the issuance of the unsecured promissory note were filed with
the Securities and Exchange Commission on October 15, 2002.

"In October 2002, Salon entered into an Accounts Receivable
Purchase Agreement with a bank. Under the terms of the
agreement, the bank can purchase acceptable receivables from
Salon for which Salon can receive 60% or 80% of the face value
of the receivables, depending on the nature of the receivable.
The aggregate purchase receivables outstanding under the
agreement cannot exceed $1.0 million, however the amount is
capped at $0.3 million until such time that Salon has $2.5
million of unrestricted cash. Salon has not received any funds
under this agreement as of this filing and estimates that it may
be able to receive approximately $70,000 during the month of
November 2002.

"Salon's independent accountants have included a paragraph in
their report for the fiscal years ending March 31, 2002 and 2001
indicating that substantial doubt exists as to Salon's ability
to continue as a going concern because it has recurring
operating losses and negative cash flows, and an accumulated
deficit. Salon has eliminated various positions, not filled
positions opened by attrition, implemented a wage reduction of
15% effective April 1, 2001, and has cut discretionary spending
to minimal amounts, and predicts it may reach cash-flow break
even for its quarter ending September 30, 2003.

"Salon needs to raise additional funds and is currently in the
process of exploring financing options. If it is unable to
complete the financial transactions it is pursuing or if it is
unable to otherwise fund its liquidity needs, then it may not be
able to continue as a going concern. Liquidity continues to be a
constraint on business operations, including Salon's ability to
react to competitive pressures or to take advantage of
unanticipated opportunities. If Salon raises additional funds by
selling equity securities, or instruments that convert into
equity securities, the percentage ownership of Salon's current
stockholders will be reduced and its stockholders will most
likely experience additional dilution. Given Salon's recent low
stock price, any dilution will likely be very substantial for
existing stockholders."


SERVICE MERCHANDISE: Plan Filing Exclusivity Extended to Feb. 5
---------------------------------------------------------------
Paul G. Jennings, Esq., at Bass, Berry and Sims PLC, in
Nashville, Tennessee, relates that Service Merchandise Company,
Inc., its debtor-affiliates, and the Official Committee of
Unsecured Creditors are still trying to negotiate a settlement
with various parties.  Mr. Jennings explains that the Debtors
need more time to finalize these settlement discussions. The
settlement is necessary to resolve certain issues that are
important to streamline the plan confirmation process.

Accordingly, pursuant to Rule 9075-1(a) of the Local Rules of
the Bankruptcy Court of the Middle District of Tennessee, the
Debtors sought and obtained a sixth extension of their Exclusive
Plan Filing Period through and including February 5, 2003 and
their Exclusive Solicitation Period through and including
May 30, 2003.

Additionally, Judge Paine rules that, if the Debtors file a plan
of reorganization by February 5, 2003 and that plan is later
withdrawn, the Debtors' Exclusive Filing Period may be extended
for 30 days after the withdrawal date. (Service Merchandise
Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

DebtTraders says that Service Merchandise's 9% bonds due 2004
(SVCD04USR1) are trading at about 6 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=SVCD04USR1
for real-time bond pricing.


SOUTHERN UNION: Closes Texas Asset Sale to ONEOK for $420 Mill.
---------------------------------------------------------------
Southern Union Company (NYSE:SUG) closes the sale of Southern
Union Gas Company, its Austin-based natural gas operating
division, and other related assets to ONEOK, Inc., for
approximately $420 million in cash.

Southern Union plans to re-deploy substantially all the sale
proceeds in interstate pipeline and other energy-related
investments - such as the Company's pending acquisition of the
CMS Panhandle Companies.

As announced on December 22, 2002, Southern Union and AIG
Highstar Capital, L.P. reached a definitive agreement with CMS
Energy Corporation to acquire CMS Panhandle, headquartered in
Houston, Texas, for approximately $1.8 billion.

Founded in 1929, Southern Union Gas Company was Southern Union's
pioneer natural gas operating division. It serves approximately
535,000 customers, including the cities of Austin, El Paso,
Brownsville, Galveston and Port Arthur.

Related assets also sold to ONEOK through this transaction
include SUPro Energy Company, Southern Transmission Company,
Mercado Gas Services, Inc., Norteno Pipeline, and the Company's
investments in natural gas distribution in Piedras Negras,
Mexico.

Southern Union Company, with a working capital deficit of about
$227 million at September 30, 2002, remains an active energy
distribution company serving approximately 1 million natural gas
customers through its operating divisions in Missouri,
Pennsylvania, Rhode Island and Massachusetts. Southern Union
also owns and operates electric generating facilities in
Pennsylvania. For further information, visit
http://www.southernunionco.com


SOUTHERN UNION: Settles Southwest Gas Legal Issues with ONEOK
-------------------------------------------------------------
ONEOK, Inc., (NYSE: OKE) completed a definitive settlement
agreement on legal issues stemming from a terminated ONEOK offer
to acquire Southwest Gas Corp.

Under terms of the settlement, ONEOK will pay $5 million to
Southern Union Company.  ONEOK and affiliated parties are
released from any claims against them brought by Southern Union
related to Southwest Gas acquisition activities in 1999, which
were the subject of such proceedings.  An order dismissing the
lawsuits was signed by U.S. District Judge Roslyn Silver and
filed of record Friday last week.

David Kyle, chairman of the ONEOK board, president and chief
executive officer, said, "ONEOK is pleased to finally resolve
all of the legal disputes brought by Southern Union.  This
settlement agreement puts all these remaining legal issues among
the parties behind us as we head into the New Year."

Previously, ONEOK had settled with Southwest Gas Corp.

ONEOK, Inc., is a diversified energy company involved primarily
in oil and gas production, natural gas processing, gathering,
storage and transmission in the mid-continent areas of the
United States.  The Company's energy marketing and trading
operations provide service to customers in 28 states.  The
Company is also the largest natural gas distributor in Kansas
and Oklahoma, operating as Kansas Gas Service and Oklahoma
Natural Gas Company, serving 1.4 million customers.  ONEOK is a
Fortune 500 company. For information about ONEOK, Inc. visit the
Web site: http://www.oneok.com

Southern Union Company, with a working capital deficit of about
$227 million at September 30, 2002, remains an active energy
distribution company serving approximately 1 million natural gas
customers through its operating divisions in Missouri,
Pennsylvania, Rhode Island and Massachusetts. Southern Union
also owns and operates electric generating facilities in
Pennsylvania. For further information, visit
http://www.southernunionco.com


STEEL DYNAMICS: Resolves Qualitech Steel Purchase Litigation
------------------------------------------------------------
Steel Dynamics, Inc., (Nasdaq: STLD) whose corporate credit is
rated by Standard & Poor's at 'BB-', said that the litigation
involving its acquisition of the assets of the former Qualitech
Steel special bar quality mill in Pittsboro, Indiana has been
resolved.  Under the terms of the settlement, Steel Dynamics
will continue to own the facility, which it formally acquired on
September 6, 2002.

In announcing the settlement, Keith E. Busse, Steel Dynamics'
president and chief executive officer, said:  "We are pleased
that all parties to this dispute were able to reach an amicable
settlement. We can now focus all of our attention and resources
on accomplishing the necessary engineering, as well as equipment
ordering and installation that will be required in order to
begin production in Pittsboro.  We look forward to this
challenge and to the opportunity to work with and become part of
the Pittsboro and Hendricks County community."

The litigation, commenced in August 2002 in the Hendricks
County, Indiana Superior Court, questioned Steel Dynamics' right
to purchase the Pittsboro assets. The settlement fully resolves
all such issues.

Steel Dynamics manufactures a variety of hot- and cold-rolled
steel products at its Butler, Indiana, flat-roll mini-mill and
has recently begun initial beam production at its new Columbia
City, Indiana, structural steel and rail facility.

For more information about Steel Dynamics, Inc., please
visit http://www.steeldynamics.com


TANDYCRAFTS INC: Sells Frame Operations to Pinnacle Frames
----------------------------------------------------------
Pinnacle Frames and Accents, Inc., recently formed by Newcastle
Partners, L. P., a Dallas-based investment fund, completed the
acquisition of the frame and wall decor operations of
Tandycrafts Inc., and its wholly owned subsidiaries, Tandyarts,
Inc., and TAC Holding, Inc., under section 363 of the United
States Bankruptcy Code.

Funding for the acquisition was provided through an equity
investment made principally by Newcastle and through a revolving
credit facility and term loan provided by PNC Bank National
Association.

Mark Schwarz, Managing Partner of Newcastle and Chairman of the
Board of Pinnacle, said: "We are very pleased to own Pinnacle
and to be associated with the employees of the company. Pinnacle
has well-developed capabilities and many long standing customer
relationships. We believe that the financial stability that
Newcastle brings will help Pinnacle continue in a leadership
role in the photo frame and decorative accessories industry."

Michael J. Walsh, Pinnacle's Chief Executive Officer and
President, said: "We are extremely pleased to have completed the
transaction and we would also like to acknowledge the strong
support and loyalty of our customers, creditors and fellow
employees. Our balance sheet, liquidity and capital resources
are significantly improved and we are well positioned to
implement our business strategy. We are delighted to be partners
with Newcastle, which is well funded and has deeply experienced
people."

In connection with the acquisition, Newcastle has retained the
existing management team naming the following individuals to
serve as executive officers:

  Mark Schwarz  - Chairman of the Board
  Michael Walsh - Chief Executive Officer and President
  Jeff Pecora   - Chief Operating Officer and
                  Executive Vice President
  Nathan New    - Chief Financial Officer and
                  Executive Vice President
  Tim Charon    - Senior Vice President Sales and Marketing
  Bob Howard    - Senior Vice President Manufacturing
  Doug Magee    - Vice President Manufacturing

Pinnacle Frames and Accents is a leading manufacture and
distributor of photo frames, wall decor and other accents for
the home decor market. The Company's product offering includes a
full line of wall and desk frames, portrait and collage frames
as well as numerous styles of mirrors which are being sold to
over 350 different customers, including mass merchandisers,
specialty retailers, discount stores and niche markets
throughout the United States and in Canada and Puerto Rico.


THINKPATH INC: Achieves Major Debt Reduction through Morrison
-------------------------------------------------------------
Thinkpath Inc., (OTCBB:THTHF) a market leader in Engineering
Knowledge Management solutions, said that, on December 19, 2002,
its senior lender, Morrison Financial Services Limited,
completed a transaction wherein it purchased, at a discount,
Thinkpath's debt with the Business Development Bank of Canada.

Under Morrison Financial's arrangements with Thinkpath,
Thinkpath will realize debt-forgiveness savings of approximately
C$414,000 from this transaction.

"We are very pleased with Morrison Financial's expertise in
helping us achieve our goal of restructuring a large portion of
Thinkpath's debt," said Declan French, Chairman & Chief
Executive Officer of Thinkpath Inc. "A strong financial partner
is a significant asset during challenging times. Morrison
Financial's outstanding results have further reduced the
Company's debt in addition to the previous forgiveness resulting
from negotiations with our former bank as mentioned in the
December 11, 2002 press release."

Thinkpath (OTCBB:THTHF) is a global provider of technological
solutions and services in engineering knowledge management
including design, drafting, technical publishing, e-learning,
technical training and staffing. Thinkpath enables corporations
to reinvent themselves structurally; drive strategies of
innovation, speed to market, globalization and focus in new and
bold ways. We are experts in the aerospace, automotive,
manufacturing and health care industries.

Headquartered in Toronto, Canada, Thinkpath has 330 employees in
6 offices across North America. Further information about the
company, its services and products can be found at
http://www.thinkpath.com


TIDEL TECHNOLOGIES: Renews Senior Credit Line with JP Morgan
------------------------------------------------------------
Tidel Technologies, Inc., (Nasdaq: ATMS) renewed its senior
revolving credit facility with JP Morgan Chase until June 30,
2003. The other terms of the facility remained unchanged.

Tidel Technologies, Inc., is a manufacturer of automated teller
machines and cash security equipment designed for specialty
retail marketers. To date, Tidel has sold more than 40,000
retail ATMs and 150,000 retail cash controllers in the U.S. and
36 other countries. More information about the company and its
products may be found on the company's Web site at
http://www.tidel.com

At June 30, 2002, Tidel Technologies' balance sheet shows a
working capital deficit of about $4 million, and that its total
shareholders' equity further diminished to about $54,000 from
about $5 million (as at Sept. 30, 2001).


TIGER TELEMATICS: Restructures European Ops. to Reduce Costs
------------------------------------------------------------
Tiger Telematics, Inc. (OTC Bulletin Board: TIGR) --
http://www.tigertelematics.com-- headquartered here and with
offices in London, UK, completed phase one of a restructuring of
its European operations. The Company created late last year a
new subsidiary, Tiger Telematics Europe, Ltd., to concentrate
specifically on completing the development of its next
generation telematics product, the completion of outstanding
product trials with customers in England, and to market
exclusively for England and Western Europe. Tiger Europe will
focus on fleet including the rental car market and expects to
announce trials in the next few weeks from two major firms as
soon as the oral agreements can be documented.

"This restructure was completed to reduce costs and improve our
speed in coming to the market with large fleet and rental car
providers in London," advised Michael Carrender, President and
Chief Executive Officer of Tiger Telematics, Inc. He said, "We
also expect to relocate a portion of our staff to a lower cost
facility closer to our customers. This restructuring is another
step in our core strategy of signing multi-year agreements with
wireless carriers and major fleet operators under our fleet
service partnership program that enables fleet operators to gain
the benefits of telematic products with little or no upfront
costs. Fleet operators pay a monthly fee-per-vehicle in the
range of $30-$45 to their wireless carrier, who in turn share a
major portion of that revenue with us."

Tiger Telematics, Inc., is a designer, developer and marketer of
mobile telematic systems and services that combine global
positioning and voice recognition technology to locate and track
vehicles and people down to street level in countries throughout
the world. The systems are designed to operate on GSM, which is
the standard operating system for wireless carriers in the UK
and in Continental Europe, and are currently being marketed to
GSM current and potential subscribers, primarily by the
company's various London-based subsidiaries.

At September 30, 2002, Tiger Telematics' balance sheet shows a
working capital deficit of about $700,000 and a total
shareholders' equity deficit of about $2.6 million.


TRANSTECHNOLOGY: Sells All TCR Business Assets for $10M + Debts
---------------------------------------------------------------
TransTechnology Corporation (NYSE:TT) completed the sale of
substantially all of the assets and business of its TCR
Corporation subsidiary for cash consideration of $10.0 million,
plus the assumption of certain liabilities, to a newly formed
affiliate of MidMark Capital LLC, of Morristown, New Jersey.

Proceeds from the sale were used to reduce senior debt.

The company had previously announced a restructuring program
under which it would divest all of its specialty fastener
businesses and focus solely upon its aerospace products
operations. The sale of TCR is the final divestiture under that
restructuring program. TransTechnology is now the world's
leading designer and manufacturer of sophisticated lifting
products for military and government applications and hold open-
rods for aircraft engine nacelles used in commercial and
military aircraft. As such, the company generates approximately
80% of its revenues through direct and indirect sales to
government and military agencies.

TransTechnology Corporation - http://www.transtechnology.com-
headquartered in Union, New Jersey, designs and manufactures
aerospace products through its Breeze Eastern and Norco
operations at its facilities in New Jersey and Connecticut.

TransTechnology's September 29, 2002 balance sheet shows a total
shareholders' equity deficit of about $23 million.


UNITED AIRLINES: Implements Additional Cost-Reduction Programs
--------------------------------------------------------------
United Airlines (NYSE: UAL) announced that by Jan. 19, 2003, the
company will furlough nearly 1,500 management and salaried
employees as part of its organizational redesign intended to
optimize the performance of the airline while reducing United's
cost structure. These furloughs will also help the airline meet
the strict requirements of its Chapter 11 financing. All
affected employees will be notified as soon as these decisions
are finalized.

"These changes are part of the process of creating a new
business that is competitive, customer-focused and sustainable,"
said Sara Fields, United's senior vice president-People. "Our
People Division has prepared transition services to assist these
employees in every way possible during this very difficult
time."

United Airlines also announced that as part of the company's
efforts to reduce its operating costs and return to financial
stability, the airline will close its remaining 32 City Ticket
Offices effective Jan. 28. The closures will result in the
furlough of 188 employees.

"Our research has shown that an increasing percentage of our
customers are utilizing more cost-effective methods to buy their
tickets. Rather than traveling to a CTO, more and more customers
are buying tickets online or calling United Reservations," said
Dan Walsh, vice president-Sales. "However, United sincerely
regrets the necessity of making this decision because of the
impact it will have on our CTO employees and their families.

"It's important for our customers to know that they will still
have around-the-clock access to United via United Reservations
(800-UNITED1) and united.com," Walsh continued.

A number of previously announced organizational changes and
employee reductions will also be taking effect in the coming
days. These include:

               Station Conversions/Closings

Effective Jan. 7, 2003 United will convert mainline flying to
United Express service at the following five stations: Eugene,
Ore.; Medford, Ore.; Cedar Rapids, Iowa; White Plains, N.Y.; and
Syracuse, N.Y. United Express carriers - SkyWest, Air Wisconsin
and Atlantic Coast Airlines - can more efficiently serve these
stations. This action will result in the furlough of
approximately 150 employees.

Also on Jan. 7, 2003, United will close stations in Caracas,
Venezuela; Santiago, Chile; and Dusseldorf, Germany. The
closings will affect 69 employees in Caracas, 110 in Santiago,
and four in Dusseldorf.

The last flights will depart Dusseldorf, Caracas and Santiago on
January 6, 2003.

                    Reservation Centers

Because of a 25 percent year-over-year drop in call volume to
United's reservations line, the company on Jan. 4, 2003, will
close its reservation offices in San Francisco, Long Beach and
Indianapolis. This will result in the furlough of 686 employees.
United will continue to serve customers through its remaining
nine reservations centers.

The company said that it will continue to look at every aspect
of its operations and make changes that will ensure United
continues to be a major player in the global airline industry.

Other information about United Airlines can be found at the
company's Web site at http://www.united.com

United Airlines' 9.00% bonds due 2003 (UAL03USR1) are trading at
about 8 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=UAL03USR1for
real-time bond pricing.


UNITED AIRLINES: Wants More Time to File Schedules & Statements
---------------------------------------------------------------
UAL Corporation and its debtor-affiliates sought and obtained
additional time to file their schedules of assets and
liabilities, list of equity security holders, schedules of
executory contracts and unexpired leases and statements of
financial affairs required under 11 U.S.C. Sec. 521(1) and Rule
1007 of the Federal Rules of Bankruptcy Procedure.

James H.M. Sprayregen, Esq., at Kirkland & Ellis says the
Debtors have over 300,000 creditors, approximately 80,000
employees, and are party to over 160,000 executory contracts.
This does not include the 40 million members of the Mileage Plus
frequent flyer program.  Given the size and complexity of their
businesses and the fact that prepetition invoices have not yet
been received or entered into the financial accounting systems,
the Debtors have not had the opportunity to gather all of the
information to prepare and file the Schedules and Statements.

Mr. Sprayregen assures Judge Eugene R. Wedoff that the process
of compiling the information necessary to complete the Schedules
and Statements is well underway.  Currently, the Debtors are
filing a list of the known holders of claims without claim
amounts.

The Debtors' business operation requires the maintenance of
voluminous books and records and a complex accounting system.
The Debtors are in the process of assembling the information
necessary to complete the Schedules and Statements.

Extensions of the time to file the Schedules and Statements are
routinely granted in large Chapter 11 cases and will result in
the filing of more accurate Schedules and Statements.  At this
juncture, the Debtors estimate that 60 additional days after the
Petition Date will provide sufficient time to prepare and file
the Schedules and Statements.

The Debtors obtained an extension until February 21, 2003.  The
Debtors request that the Court grant the extension to file all
Schedules and Statements without prejudice to the Debtors' right
to seek further extensions as necessary or to seek waivers for
filing portions of various schedules. (United Airlines
Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


UNIVERSAL BROADBAND: Completes Tax-Free Merger with FoneFriend
--------------------------------------------------------------
FoneFriend, Inc. (OTC: FFRD), a provider of Voice over IP
communications services and products based in Carlsbad,
California and Universal Broadband Networks, Inc. (OTC: UBNTQ),
a wireless and wire line communications services provider based
in Irvine, California, completed a tax free reorganization
pursuant to an agreement to acquire the assets of FoneFriend and
the Chapter 11 Plan of Reorganization confirmed by the United
States Bankruptcy Court in UBNT's case.

As part of this definitive agreement, UBNT will cancel all of
its outstanding common stock and issue 2.2 million shares of new
common stock to acquire the assets of FoneFriend. FoneFriend
will then distribute these shares to its existing shareholders
prior to its dissolution. Additionally, the company will issue
shares of its preferred stock in exchange for FoneFriend
preferred stock held by FoneFriend investors who participated in
its private placement offering. The reorganized company will be
named FoneFriend, Inc., will remain incorporated in the State of
Delaware and the new trading symbol issued by NASDAQ for the
Company effectively immediately will be "FFRD".

The announcements were made today by Jackelyn Giroux, Chief
Executive Officer of FoneFriend, Inc., and Brandon Powell, sole
officer of UBNT during its bankruptcy reorganization. Mr. Powell
will resign as an officer following closing of the
reorganization and completion of related administrative work.
Under the Merger Agreement and Plan of Reorganization, UBNT's
Committee of Unsecured Creditors will retain 5% of the common
stock and may appoint one member of the Committee as a member of
the board of directors of the new company. The United States
Bankruptcy Court, the directors and a majority of the shares of
FoneFriend's common stock have approved the sale of FoneFriend's
assets and its reorganization with UBNT. Approval of UBNT's
shareholders was not necessary in light of the fact that their
shares are cancelled pursuant to the Merger Agreement and Plan.

FoneFriend provides state of the art Voice over Internet
Protocol communications services over its international network
by way of the FoneFriend(TM) proprietary and patented technology
licensed by FoneFriend from Fonefriend Systems, Inc. The
FoneFriend product is a communication appliance that routes
long-distance calls from any touch tone telephone securely over
the Internet without the need for a computer or any specialized
telecom equipment resulting in substantial savings for
FoneFriend's customers. Universal Broadband Networks, Inc. is an
inactive telecommunications services provider that has been in
Chapter 11 bankruptcy reorganization since October, 2000.


US AIRWAYS: Comcast Files Notice as Substantial Claimholder
-----------------------------------------------------------
Comcast Corporation informs the Court overseeing US Airways
Group Inc.'s chapter 11 cases that it has become a Substantial
Claimholder through its purchase of the assets of MediaOne
Financial Services Inc., formerly known as US West Financial
Services.  Comcast reports that its known aggregate principal
amount of claims total $174,772,859.  Comcast notes that it has
not yet ascertained the full amount of its subsidiaries' claims
against the Debtors and additional claims may exist. (US Airways
Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

US Airways Inc.'s 9.625% bonds due 2003 (U03USR1) are trading at
about 10 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=U03USR1for
real-time bond pricing.


USG CORP: Seeks Court Approval to Hire FTI as Claims Consultant
---------------------------------------------------------------
Paul N. Heath, Esq., at Richards, Layton & Finger, reminds the
Court that the bar date for all prepetition claims against USG
Corporation and its debtor-affiliates, other than asbestos
personal injury claims, is January 15, 2003.

The Debtors have received thousands of proofs of claim and will
likely receive thousands more by the bar date.  When the bar
date passes, the Debtors will begin reviewing the filed claims,
comparing the claims to their books and records, and objecting
to or otherwise resolving them.

The claims reconciliation and objection process could be a
substantial undertaking, Mr. Heath explains.  The Debtors
believe that they will be required to reconcile and object to a
significant number of claims, since they are comprised of three,
separate core operating companies, U.S. Gypsum, USG Interiors,
Inc. and L&W Supply Corporation, as well as several other active
business entities.

Claims to which the Debtors will ultimately be required to
object may include:

      (1) claims filed for amounts due as of the Petition Date,
          but paid afterwards due to various first-day or other
          court orders;

      (2) claims filed asserting security or priority to which
          the claimant is not entitled;

      (3) claims filed for amounts arising after the Petition
          Date; and

      (4) claims lacking sufficient factual basis or documentary
          support.

The Debtors believe that it is critical that they be authorized
to retain a firm with expertise in the claims management process
to assist them in the time-consuming and complex task of
reconciling the thousands of proofs of claim that will be filed
in these cases.  Using an advisory firm will help the Debtors'
internal accounting staff continue to focus on operating the
Debtors' business while undertaking the claims reconciliation
process, while maximizing the Debtors' value to all parties-in-
interest.

By this application, the Debtors seek the Court's authority to
employ FTI Consulting, Inc. as their claims management
consultants, pursuant to Section 327(a) of the Bankruptcy Code,
to perform claims management advisory services, nunc pro tunc to
November 18, 2002.

Mr. Heath tells the Court that FTI has a "wealth of experience"
in providing claims management advisory services in recent large
and complex commercial and mass tort cases, for corporations
like Enron, US Airways Group, Inc., Dow Corning, The Babcock &
Wilcox Company, and Federal-Mogul Global, Inc.

FTI will provide claim management advisory services, which
include, but may not be limited to:

     (a) loading scheduled liabilities and proof of claim data
         into FTI's claims management system as collected by the
         claims agent retained in these cases;

     (b) assisting the Debtors in the development of claims
         reconciliation protocols and consulting on the
         implementation and management of the claim
         reconciliation process;

     (c) implementing and supporting the Debtor's use of the
         CMS in their claim reconciliation process, including
         supporting access to the CMS, generating claim reports
         and performing claims analysis, including assistance
         with the identification of claims to schedule matches;

     (d) assisting the Debtors in property damage claims
         resolution;

     (e) assisting the Debtors in classifying claims for
         reorganization plan purposes;

     (f) assisting in the claims objection process, including
         identifying and tracking invalid claims including
         duplicate claims;

     (g) assisting the Debtors in transferring claims objection
         data to the claims agent for notice purposes;

     (h) assisting the Debtors' claims agent in the balloting
         processes, including identification of the eligible
         voting population;

     (i) assisting the Debtors with fund distributions to
         holders of allowed claims, as necessary; and

     (j) assisting the Debtors with other claims management
         issues, including assistance with personal injury
         claims as necessary.

Though Logan & Company, the Debtors' claims and noticing agent,
performs many claims-related services, Mr. Heath assures the
Court that FTI and Logan's services will not be duplicative, nor
will any of FTI's services substitute for those for those of the
Clerk's Office.

In return for FTI's services, it will charge these customary
hourly rates:

      Senior Managing Director           $525 - 595
      Directors/Managing Directors        350 - 490
      Associates/Consultants              175 - 325
      Administration/Paraprofessionals     75 - 150

The Debtors estimate that FTI's fees will likely be in the range
of  $75,000 to $125,000 per month, although fees may exceed that
amount in any given month, particularly in the months soon after
the bar date.

After a thorough records search, FTI assures the Court that it
is a "disinterested person" as defined within Section 101(14) of
the Bankruptcy Code. (USG Bankruptcy News, Issue No. 40;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


WARNACO: Stipulation Determining Hilco's Guaranteed Amount Ok'd
---------------------------------------------------------------
On October 21, 2002, Warnaco Inc., Outlet Holdings Inc., Calvin
Klein Jeanswear Company and Hilco Merchant Resources LLC entered
into a Store Closing Sale Agreement.  Pursuant to the Agreement,
Hilco agreed to pay Warnaco a guaranteed amount based on the
aggregate Cost Value of Merchandise.

On October 24, 2002, Hilco completed the Inventory Taking and
the sale commenced on October 25, 2002.  Pursuant to the
Agreement, Hilco was required to wire transfer to Warnaco's bank
account 80% of the Guaranteed Amount as a Guaranty Advance.
However, a disagreement arose between the Parties as to the
method of calculating the Guaranteed Amount with respect to
Clearance Merchandise, Seasonal Merchandise and Promotional
Priced Jeans.

To commence the Sale on a timely basis, the Parties agreed that
Hilco make, and in fact made, a wire transfer to Warnaco's bank
account the Guaranty Advance minus the disputed portion.  The
Parties further agreed to cooperate with each other to resolve
their disagreement over the proper approach to determine the
Guaranteed Amount.

To avoid the expense and time required to litigate the issues,
the Parties reached an agreement memorialized in this
Stipulation and Order, which states:

1. The Inventory Taking and Inventory Reconciliation have been
   completed, the Parties agreed with the results and neither
   Party will contest or dispute the results of the Inventory
   Taking or the Inventory Reconciliation;

2. As a result of the Inventory Taking and Inventory
   Reconciliation, the Guaranteed Amount for all Merchandise
   will be $11,529,836 and neither of the Parties will ever
   contest or dispute this Stipulated Guaranteed Amount;

3. On November 14, 2002, Hilco wire transferred to Warnaco's
   bank account $1,223,399, representing the difference between
   the amount Hilco wire transferred to Warnaco on October 24,
   2002 and the Stipulation Guaranteed Amount.

Judge Bohanon gave his approval to the Stipulation, for it to be
effective, on December 17, 2002. (Warnaco Bankruptcy News, Issue
No. 39; Bankruptcy Creditors' Service, Inc., 609/392-0900)


WILLIAMS CONTROLS: Appoints Donn Viola to Board of Directors
------------------------------------------------------------
Williams Controls, Inc., (OTC: WMCO) announced that Donn Viola
has been elected a member of the Williams Controls Board of
Director.  He fills a vacancy created by the resignation of
Timothy Itin in late December.

Mr. Viola has over 30 years experience in the automotive and
heavy truck industries, in increasingly senior management
positions.  Most recently, he was Chief Operating Officer of the
automotive parts supplier Donnelly Corporation until July 31,
2002.  Donnelly was acquired by Magna International on
October 1, 2002.  Prior to Donnelly, he was Chief Operating
Officer and a member of the Board of Directors of Mack Trucks,
Inc.  Additionally, Mr. Viola has held management positions with
Masco Industries, Volkswagen of America, Inc., and General
Motors Corporation.  Mr. Viola holds a bachelor's degree in
mechanical engineering from Lehigh University.

Commenting on Mr. Viola's appointment to the Board, Williams
Controls' Board Chairman Eugene Goodson stated, "We are
extremely fortunate to have an individual of Donn's stature join
our board.  Donn brings just the right mix of management and
industry expertise to Williams."  He concluded, "I, as well as
all of the members of the Board, look forward to working with
Donn."

Commenting on Mr. Itin's resignation, Mr. Goodson stated, "The
Company appreciates Tim's service on the Board, particularly
during the transition to the new capital structure facilitated
by the AIP investment."  Tim Itin is the son of former Williams
Chairman of the Board and CEO, Tom Itin, who is no longer
affiliated with the Company.

Williams Controls is a designer, manufacturer and integrator of
sensors and controls for the transportation industry.  For more
information, you can find Williams Controls on the Internet at
http://www.wmco.com

Williams Controls, Inc.'s September 30, 2002 balance sheet shows
a total shareholders' equity deficit of about $13 million.


WORLD AIRWAYS: Inks New $22MM Contract with Ritetime Aviation
-------------------------------------------------------------
World Airways, Inc., (Nasdaq: WLDAC) announced a new contract
with Ritetime Aviation and Travel Services, Inc., an Atlanta-
based aviation and travel services company, to provide weekly
non-stop air services between both Atlanta, Georgia, and JFK
Airport in New York to Lagos, Nigeria. The inaugural flight is
scheduled for February 28, and flying will start on a full-time
basis on March 21 and continue through December 30, 2003.  The
initial contract is valued at approximately $22 million for the
10-month period.

Hollis Harris, chairman and chief executive officer of World
Airways, said, "We are very pleased to add Ritetime to our
client roster, and we hope this is the start of a long-term
relationship."

Under the terms of the agreement, World Airways will provide
non-stop passenger air transportation twice a week, with a
Friday departure from Atlanta and a Sunday departure from JFK.
The flights, using MD-11 aircraft and offering both business and
economy class service, will arrive in Lagos approximately 11
hours after take off.  Flight information and reservations
for this service can be obtained by going to Ritetime's Web site
at http://www.flyritetime.comor by contacting the company at
(770) 613-0011.

World Airways will be the first U.S. registered carrier to re-
establish passenger flight service to Nigeria.

Utilizing a well-maintained fleet of international range,
widebody aircraft, World Airways has an enviable record of
safety, reliability and customer service spanning 54 years.  The
Company is a U.S. certificated air carrier providing customized
transportation services for major international passenger and
cargo carriers, the United States military and international
leisure tour operators.  Recognized for its modern aircraft,
flexibility and ability to provide superior service, World
Airways meets the needs of businesses and governments around the
globe.  For more information, visit the Company's Web site at
http://www.worldair.com

World Airways' September 30, 2002 balance sheet shows a total
shareholders' equity deficit of about $22 million.


WORLDCOM INC: Obtains Approval to Join SmartWorld/Juno Mediation
----------------------------------------------------------------
SmartWorld Technologies, LLC asks the Court to modify or annul
the automatic stay and allow Worldcom Inc., and its debtor-
affiliates to participate in the SmartWorld/Juno Online
Services, Inc., mediation and to pay for its proportionate share
of the costs of same as "ordinary course."

Douglas T. Tabachnik, Esq., at Tabachnik & Wyne, in Manalapan,
New Jersey, informs the Court that prior to filing for
bankruptcy, one of SmartWorld's products was an Internet Service
Provider called Freewwweb.com which operated free of charge to
customers.  During May and June 2000, SmartWorld determined that
it would solicit bids for the purchase of its stock or assets,
which eventually led to an agreement dated June 29, 2000, with
appended confirmation letter for the sale of SmartWorld's assets
to Juno.  As a condition precedent to the Asset Sale, Juno
required that SmartWorld file for Chapter 11 Bankruptcy
Protection.  Accordingly, SmartWorld filed a Chapter 11
Proceeding on June 29, 2000.

According to Mr. Tabachnik, the Asset Sale to Juno was
provisionally approved in the SmartWorld bankruptcy at a hearing
held on July 19, 2000.  However, no formal order approving the
Asset Sale has been entered in the SmartWorld Court.
Thereafter, disputes arose between SmartWorld and Juno in
connection with the Asset Sale which led to the Juno Adversary
Proceeding.

Both prior to and immediately following the SmartWorld
Bankruptcy, Mr. Tabachnik states that the Debtors provided
telecommunications services to SmartWorld.  The Debtors have
asserted a general unsecured claim in excess of $10,000,000
against SmartWorld, which SmartWorld estimates is at least 1/2
of the projected total allowable unsecured claims.
Additionally, WorldCom has asserted a $10,000,000 secured claim,
which SmartWorld contends is unsecured and worth $190,000.
Furthermore, by virtue of the amounts advanced by the Debtors to
SmartWorld, the Debtors may have a super-priority claim in the
SmartWorld Bankruptcy.

Mr. Tabachnik recounts that on August 16, 2000, Juno commenced
an adversary proceeding against SmartWorld.  On December 19,
2000, SmartWorld filed its answer and counterclaims, seeking
$100,000,000 in damages for:

    -- Juno's destruction of SmartWorld's business assets;

    -- Juno's breach of its commitment to purchase the assets of
       SmartWorld; and

    -- Juno's interference with SmartWorld's existing
       contractual relationships.

Mr. Tabachnik relates that during the discovery stage of the
Juno Adversary, the Debtors and Juno reached a tentative
agreement on a settlement wherein the Debtors would receive the
lion's share of a $5,000,000 payment from Juno.  On February 28,
2001, Judge Blackshear ordered a stay of the Juno Adversary in
order to encourage conclusion of settlement negotiations between
the Debtors, Juno and the SmartWorld Official Committee of
Unsecured Creditors.

Mr. Tabachnik informs the Court that despite the parties'
failure to consummate the settlement, and despite repeated
requests by SmartWorld to recommence the Juno Adversary, Judge
Blackshear maintained a stay on the Juno Adversary and permitted
the Debtors, Juno and the SmartWorld Committee to continue to
negotiate a settlement until a hearing held before the
SmartWorld Court on October 23, 2002.  At the October 23rd
Hearing, Judge Blackshear lifted the stay on the Juno Adversary,
but indicated that prior to recommencing the litigation, he
would direct SmartWorld, Juno, the Debtors and the SmartWorld
Committee to participate in a mediation to attempt to settle the
Juno Adversary.

According to Mr. Tabachnik, the SmartWorld Court directed that
the Debtors, as a substantial creditor of SmartWorld with
potential super-priority and secured claims, and as a party that
has been a central figure in the ongoing settlement
negotiations, should participate in the Mediation.  In
accordance with Judge Blackshear's direction at the October 23rd
Hearing, the parties, including WorldCom, must bear the costs of
the Mediation. Although representatives for SmartWorld, Juno and
the Debtors have all agreed to participate in the Mediation, and
have further agreed on two prospective mediators, out of an
abundance of caution, modification of the automatic stay is
requested to permit the Debtors to participate in and pay for
its fair share of the cost of the Mediation.

Mr. Tabachnik asserts that cause exists to modify the automatic
stay in this matter because:

    -- the Debtors, as a creditor of SmartWorld, is a potential
       beneficiary of the Mediation;

    -- there will be little impact on the Debtors' estate as the
       only real cost will be the Debtors' share of the
       mediation costs; and

    -- SmartWorld, Juno and the Debtors all agree to participate
       in the Mediation, and have agreed on two potential
       mediators.

                            *   *   *

Judge Gonzalez authorizes the Debtors to participate in the
SmartWorld/Juno Mediation and pay its proportionate costs of the
mediator, with these payments to be considered "ordinary course"
within the meaning of Section 363 of the Bankruptcy Code.
(Worldcom Bankruptcy News, Issue No. 16; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

Worldcom Inc.'s 7.875% bonds due 2003 (WCOE03USR1), DebtTraders
reports, are trading at about 26 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCOE03USR1
for real-time bond pricing.


* Manatt Phelps Completes Merger Deal with Kalkines Arky
--------------------------------------------------------
Manatt, Phelps & Phillips, LLP, a 285-professional legal,
consulting and policy firm headquartered in Los Angeles, and
Kalkines, Arky, Zall & Bernstein LLP, a 42-professional legal,
consulting and policy firm headquartered in New York City,
announced the consummation of their merger, effective January 1,
2003. The resulting firm, Manatt, Phelps & Phillips, LLP,
provides services to clients from offices in Albany; Los
Angeles; Mexico City; Monterrey, Mexico; New York City; Orange
County; Palo Alto; Sacramento; and Washington, D.C.

"The New York market is the next step in our evolution, and KAZB
is the perfect partner to grow with us there," said Paul H.
Irving, Manatt's Chief Executive and Managing Partner. "With
significant resources in California, one of the world's most
important economies; in New York, the world's financial capital;
and in Washington, D.C., the center of government, we are
positioned to provide our clients unparalleled legal, strategic
and business advice. KAZB's professionals share our commitment
to quality without compromise and to client service, providing
exceptional legal work in transactions and trials, and solutions
capabilities based on governmental advocacy, policy expertise
and unique industry knowledge."

Reacting to the merger, Dan Doctoroff, Deputy Mayor of New York
City, said, "New York City welcomes the announcement by Manatt
that it is merging with the New York City-based firm of
Kalkines, Arky, Zall & Bernstein LLP. Manatt's entry into the
New York City market signals the continuing strength of this
important sector of the City's economy, and reinforces the
City's strong relationship with Los Angeles and the important
role these unique cities play in our nation's business."

Founded in 1988, KAZB is one of New York's pre-eminent legal and
policy boutiques, with a healthcare practice among the most
successful in the region. The merger creates one of the nation's
most significant healthcare, life sciences and pharmaceutical
practices, combining KAZB's New York resources with Manatt's
extensive West Coast, Washington, D.C. and international reach.

In addition to healthcare, KAZB's strengths include public
infrastructure, corporate and finance, exempt organizations,
insurance and tax expertise, as well as litigation and real
estate capabilities. KAZB professionals practice in an exclusive
niche, with outstanding credentials, a longstanding and loyal
institutional client base, a sophisticated industry focus, and
an outstanding reputation in the development of large-scale
public projects.

"Joining with Manatt presents us with the opportunity to expand
our capabilities to new industries," said Steven Polan, KAZB's
Managing Partner. "This combination provides our clients first-
class representation in Washington and internationally, along
with a full range of corporate and litigation expertise."

Manatt was founded in 1965 by Charles T. Manatt, former Chairman
of the Democratic National Committee and former U.S. Ambassador
to the Dominican Republic, who remains active in the firm's
Washington, D.C. office. The firm provides complex litigation
services and transactional, governmental and strategic counsel
to clients in the energy, healthcare, financial services,
entertainment, technology, venture capital and real estate
industries. Manatt's strengths include antitrust, bankruptcy and
financial restructuring, corporate and finance, employment and
labor, intellectual property, internet and e-commerce,
specialized litigation and tax. During the past five years,
Manatt added to its Los Angeles and Washington, D.C. presence by
developing offices in Palo Alto (Silicon Valley); Sacramento and
Orange County, Calif.; and Mexico City and Monterrey, Mexico.

Manatt also provides global consulting services through its
wholly owned subsidiary, Manatt Jones Global Strategies, LLC.
Manatt Jones, headed by James R. Jones, former U.S. Ambassador
to Mexico and Chairman and CEO of the American Stock Exchange,
provides business expansion advice and project supervision to
major U.S. companies and multi-nationals. The immediate past
President of Costa Rica, Miguel Angel Rodriguez, chairs the
Manatt Jones International Advisory Board, which includes a
former Deputy Foreign Minister of Mexico, Andreas Rozental, and
former Canadian Ambassador to Mexico and Guatemala, David J.S.
Winfield. Other members of Manatt Jones include former U.S.
Ambassador to Guatemala, Donald J. Planty, former U.S.
Ambassador to Portugal, Elizabeth Frawley Bagley, and
internationally recognized foreign policy adviser Maurice
Sonnenberg.

In addition to deep and broad legal expertise, both Manatt and
KAZB have recognized governmental advocacy practices that blend
regulatory, administrative, legislative and policy experience
and business consulting capabilities. Following the merger,
Manatt continues its focus on governmental relationship building
for clients -- utilizing its Washington office and specialty
offices in the state capitals of California and New York -- a
value proposition unavailable from any competing firm.

"This merger involves the combination of two very successful
firms -- both dominant in their practice areas and markets, both
creative and innovative in their delivery of client services and
solutions," said William S. Bernstein, a KAZB founder. "It is
truly a situation in which the whole is greater than the sum of
its parts, and we are only beginning."


* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
                                Total
                                Shareholders  Total     Working
                                Equity        Assets    Capital
Company                 Ticker  ($MM)          ($MM)     ($MM)
-------                 ------  ------------  -------  --------
Actuant Corp            ATU         (44)         294       18
Advisory Board          ABCO        (16)          48      (20)
Air Canada              AC         (938)       8,901     (634)
Alaris Medical          AMI         (47)         573      129
Alliance Resource       ARLP        (47)         291       (2)
Amazon.com              AMZN     (1,440)       1,637      286
American Standard       ASD         (90)       4,831      208
Amylin Pharm Inc.       AMLN         (3)          63       47
Anteon Int'l. Corp.     ANT          (3)         307       27
Arbitron Inc.           ARB        (169)         127       17
Avon Products           AVP         (46)       3,193      428
Campbell Soup Co.       CPB        (114)       5,721   (1,479)
Caremark Rx, Inc.       CMX        (772)         874      (31)
Chippac Inc.            CHPC        (23)         431      (18)
Choice Hotels           CHH         (64)         321      (28)
Dun & Brad              DNB         (20)       1,431      (82)
Echostar Comm           DISH       (778)       6,520    2,024
Expressjet Holdings     XJT        (214)         430       52
Gamestop Corp.          GME          (4)         607       31
Gartner Inc             IT           (5)         824       18
Graftech International  GTI        (307)         797      112
Hollywood Casino        HWD         (92)         553       89
Hollywood Entertainment HLYW       (113)         718     (271)
Imclone Systems         IMCL         (5)         474      295
Inveresk Research Group IRGI         (7)         302     (115)
Journal Register        JRC         (36)         711      (26)
Kos Pharmaceuticals     KOSP        (58)          83       27
Level 3 Comm Inc.       LVLT        (65)       9,316      642
Ligand Pharm            LGND        (58)         117       22
Medical Staffing        MRN         (33)         162       55
Mega Blocks Inc.        MB          (37)         106       56
Moody's Corp.           MCO        (304)         505       12
MTC Technologies        MTCT          0           26       10
Petco Animal            PETC        (86)         473       68
Playtex Products        PYX         (44)       1,105      108
Proquest Co.            PQE         (45)         628     (140)
RH Donnelley            RHD        (111)         296        0
Saul Centers Inc.       BFS         (24)         346      N.A.
Sepracor Inc.           SEPR       (314)       1,093      727
Solutia Inc.            SOI        (113)       3,408     (495)
United Defense I        UDI        (166)         912      (55)
Valassis Comm.          VCI         (66)         363       10
Ventas Inc.             VTR         (91)         942      N.A.
Weight Watchers         WTW         (87)         483      (24)
Western Wireless        WWCA       (274)       2,370     (105)

                          *********

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 2003.  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 $675 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 ***