TCR_Public/030127.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Monday, January 27, 2003, Vol. 7, No. 18

                          Headlines

ACT MANUFACTURING: In Bank Lawsuit, Committee Turns to DSI
AGERE SYSTEMS: Narrows December Quarter Net Loss by about 60%
AK STEEL: Offers $1 Billion to Acquire National Steel Assets
ALLBRITTON: Reports Improved Operating Results for Fiscal Q1
ALTERRA: HCN Expects Alterra to Remain Current on Rent Payments

ALTERRA: LTC Expects Minimal Impact from Alterra's Bankruptcy
AMERICAN TOWER: S&P Keeps Downgraded Ratings on Watch Negative
AMERICAN MEDIA: Acquires Weider Publications for $350 Million
AMERICA WEST: Fourth Quarter Financial Results Show Improvement
AMR CORP: S&P Keeps Ratings Watch over Losses & Liquidity Issues

AMRESCO RESIDENTIAL: Fitch Rates Classes B-1F & B-2F at BB/CC
APPLIED EXTRUSION: Fiscal 2002 Net Loss Balloons to $32 Million
ASSET SECURITIZATION: Fitch Drops 1997-D5 Class B-6 Rating to D
ATLAS AIR: S&P Downgrades Ratings Following Payment Default
ATMEL CORP: Q4 Results Improve Sequentially and Year-Over-Year

B/E AEROSPACE: Tinkers with Bank Credit Agreement
CALYPTE BIOMEDICAL: Issues 10% Unsec. Convertibles to Mercator
CERES GROUP: Fitch Affirms Units' Low-B Fin'l Strength Ratings
COLD METAL: Earns Nod to Sell Equipment at Ohio & Conn. Plants
CONSECO INC: Wants More Time to Make Lease-Related Decisions

CONSOLIDATED CONTAINER: S&P Affirms B- Corporate Credit Rating
CORNING INC: Fourth Quarter Results within Range of Guidance
CRIIMI MAE: Completes $344 Million Recapitalization Transaction
CROWN CENTRAL: S&P Withdraws B+ Rating Due to Pending Asset Sale
DAIRY MART: Court OKs Wayne R. Walker as Liquidation Consultant

DYNEGY INC: Sells European Communications Assets to Klesch Unit
ENRON CORP: Court Approves Settlement Agreement with Scripps
FANSTEEL INC: Lease Decision Period Extended through March 12
FAO INC: Earns Go-Signal to Appoint Berger as Noticing Agent
FLEMING COS.: Slashes Net Debt to $2BB at Fiscal Year-End 2002

FREEPORT-MCMORAN: S&P Rates $250 Mil. Sr. Unsecured Notes at B-
FRIENDLY ICE CREAM: Donald Smith Discloses 9.6% Equity Stake
GENERAL DATACOMM: Seeks Exclusivity Extension through March 3
GE HOME EQUITY: Fitch Drops Class B-1 Notes Rating to D from CCC
GENCORP INC: Says 2002 Results Reflect Performance Improvements

GENUITY INC: Asks Court to Approve Asset Abandonment Procedures
GENUITY INC: Court Approves Asset Purchase Deal with Level 3
GLASSTECH HOLDING: Delaware Court Confirms Reorganization Plan
GLOBAL CROSSING: Continues to Meet Key Performance Goals in Nov.
GLOBAL IMAGING: S&P Ups Ratings Citing Consistent Performance

GREAT NORTHERN PAPER: Bankruptcy Hurts Minerals Tech.'s Results
HANGER ORTHOPEDIC: S&P Ratchets Corp. Credit Rating Up a Notch
HERBST GAMING: S&P Assigns B Rating to $45M Senior Secured Notes
HOLLYWOOD CASINO: Weak Performance Causes Concern at S&P
HOMELIFE: Seeks Extension of Lease Designation Period for Sears

HUDSON HOTELS: Files for Chapter 11 Reorganization in New York
HYPPCO FINANCE: Fitch Junks Class A-2 Notes Rating at CCC-
IBEAM BROADCASTING: Asks Court to Delay Entry of a Final Decree
INNOVATIVE CLINICAL: Unit's Losses Raise Going Concern Doubts
INTEGRATED HEALTH: Wants Litchfield to Make Amendments to Claim

IRVINE SENSORS: Circulating Prospectus re 3.3MM Share Offering
IT GROUP: Wants Until April 14 to Move Actions to Delaware Court
KAISER ALUMINUM: Can't File Schedules & Statements Until Apr. 14
KEMPER INSURANCE: Inks Renewal Rights Agreement with Argonaut
KENTUCKY ELECTRIC: Will File for Chapter 11 Relief by Month-End

KMART CORP.: Retailer Unveils First Draft of its Chapter 11 Plan
KMART CORP.: Summary, Overview & Analysis of the Retailer's Plan
L-3 COMMS: Names Steve Kantor President, SPD Technologies Group
LEVEL 3 COMMS: Earns Court Approval to Purchase Genuity's Assets
LIBERTY MEDIA: Unit Reaches Pact to Restructure Astrolink Int'l

MAGELLAN HEALTH: Planning for a Chapter 11 Bankruptcy Filing
METATEC: Sells Electronic Software Delivery Business for $1.1MM
METROMEDIA FIBER: Sells Single Conduit to AGL Networks Inc.
METROMEDIA FIBER: Sells French & Dutch Ops. to Management Teams
MID-POWER SERVICE: Files for Chapter 11 Reorganization in Nevada

MID-POWER SERVICE: Case Summary & Largest Unsecured Creditors
MOTO PHOTO: Wins Court Nod to Sell Assets to MOTO Franchise Corp
NATIONAL CENTURY: Court Approves Interim Compensation Procedures
NATIONAL STEEL: Receives AK Steel Proposal to Acquire All Assets
NATIONAL STEEL: USWA Reacts to AK Steel Offer to Purchase Assets

NATIONSRENT INC: Urges Court to Modify Professionals' Fee Cap
NORTEL NETWORKS: Board Sets Shareholders' Meeting for April 24
NORTEL NETWORKS: Board Declares Preferred Share Dividends
NRG ENERGY: Involuntary Petition Stalled Until April 29
OPRYLAND HOTEL: Fitch Puts BB-Rated Class E Notes on Watch Neg.

OWENS CORNING: Plan Creates Asbestos Personal Injury Trust
PETCO ANIMAL: Reaffirms Earnings Guidance for 4th Quarter 2002
PHARMACEUTICAL FORMULATIONS: Makes Interest Payment on 8% Notes
RECOTON CORP: Sells GameShark Brand Name to Mad Catz for $5 Mil.
RICA FOODS: Delays SEC Form 10-K Amendment Filing

SEVEN SEAS: US Trustee Appoints Ben Floyd as Chapter 11 Trustee
SMITHFIELD FOODS: S&P Places BB+ Sr. Debt Ratings on Watch Neg.
SOLID RESOURCES: Completes Implementation of CCAA Plan
STAR GAS PARTNERS: S&P Assigns New BB- Corporate Credit Rating
T. EATON: Canadian Retailer Projects 48% Dividend to Creditors

TEREX CORP: Will Publish Q4 & Full-Year 2002 Results Late Feb.
UBIQUITEL INC: Obtains Time Extension to Meet Nasdaq Standards
UCAR INT'L: Mellon Financial Corp. Discloses 5% Equity Stake
UNITED AIRLINES: Court Okays Kirkland Retention as Lead Counsel
US AIRWAYS: Asks for Court Approval to Assume Virginia Lease

USG CORP: Urges Court to Approve Claims Settlement Procedures
WESTERN GROWERS: S&P Revises Junk Rating to R after Insolvency
WHEELING-PITTSBURGH: Wants to Enter OCC & NSTA Distribution Deal
WICKES INC: Extends Exchange Offer for 11-5/8% Notes to Feb. 19
WORLDCOM INC: Wants Schedule Filing Period Extended to March 31

XM SATELLITE: Majority of Noteholders Tender 14% Senior Notes

* Hill & Barlow Group Joins Ropes & Gray's Private Client Group

* BOND PRICING: For the week of January 27 - 31, 2003

                          *********

ACT MANUFACTURING: In Bank Lawsuit, Committee Turns to DSI
----------------------------------------------------------
The Official Committee of Unsecured Creditors of Act
Manufacturing, Inc., and its debtor-affiliates, asks for
authority from the U.S. Bankruptcy Court for the District of
Massachusetts to retain Development Specialists, Inc., to
provide litigation support, financial analysis and expert
testimony in the adversary proceeding captioned Official
Committee of Unsecured Creditors v. JP Morgan Chase Bank, et
al., and to provide other consulting services in these chapter
11 proceedings.

In June, 2002, the Committee filed suit against the Pre-Petition
Lenders, seeking:

     (i) to have the validity, priority and/or scope of certain
         of the Pre-Petition Lenders' liens determined,
         including a determination that the Liens do not attach
         to certain tax refunds and unearned premiums
         aggregating in excess of $11 million, or to a portion
         of the stock of ACT's Thai subsidiary with a value in
         excess of $35 million;

    (ii) a determination of the amount of any claim for
         diminution of the Pre-Petition Lender's collateral;

   (iii) to avoid certain transfers and liens of the
         Pre-Petition Lenders based, among other things, on an
         improvement in position test;

    (iv) to avoid and recover certain alleged preferential and
         fraudulent transfers made to the benefit of the
         Pre-Petition Lenders,

     (v) to have the Court account and disallow certain charges;
         and

    (vi) to have certain of the Pre-Petition Lenders' claims
         equitably subordinated to the claims of the non-
         priority unsecured creditors.

The Committee estimates the amount at issue in the Litigation
exceeds $40 million. The Litigation represents the primary
source of any dividend for the Debtors' non-priority unsecured
creditors.

The Committee had previously retained PricewaterhouseCoopers to
provide financial consulting services to the Committee. Due to a
conflict of interest, the Committee no longer has access to
PwC's services as an expert or a financial consultant.

Specifically, Development Specialists will provide:

     a. Assistance in the review and/or preparation of
        information and analyses relating to any plan of
        liquidation and/or disclosure statement filed in these
        cases and to any contested proceedings with respect to
        the same;

     b. Testimony and analysis as an expert on the Committee's
        behalf in any disputed matters arising in these chapter
        11 cases relating to, without limitation, the proposed
        substantive consolidation of the Debtors' estates;

     c. Assistance in the review and analysis of the proofs of
        claim filed in these cases for the purposes of objecting
        to the same;

     d. Assistance in the evaluation and analysis of any causes
        of action that may benefit the Committee, the Debtors'
        estates, or unsecured creditors generally, including
        actions against the Debtors' directors and officers and
        avoidance actions, including fraudulent conveyances and
        preferential transfers;

     e. other general business consulting and advisory
        services or such other assistance as to which
        DSI and the Committee or its counsel may deem
        appropriate and necessary that are not duplicative of
        services provided by other professionals in these
        proceedings.

The principal consultant at Development Specialists responsible
for providing and coordinating the services required by the
Committee will be William A. Brandt, Jr., billing at $475 per
hour.  Other consultants and associates at Development
Specialists bill between $395 and $185 per hour.

Act Manufacturing, Inc., is a global provider of value-added
electronic manufacturing services to original equipment
manufacturers in the networking and telecommunications, high-end
computer and industrial and medical equipment markets. The
Debtors filed for chapter 11 protection on December 21, 2001.
Richard E. Mikels, Esq., at Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo, represents the Debtors in their restructuring
efforts. When the Company filed for protection from its
creditors, it listed $374,160,000 in total assets and
$231,214,000 in total debts.


AGERE SYSTEMS: Narrows December Quarter Net Loss by about 60%
-------------------------------------------------------------
Agere Systems (NYSE: AGR.A, AGR.B) reported results for its
first quarter of fiscal 2003, ended December 31, 2002. The
company's recently sold optoelectronic components business is
being reported as discontinued operations. Consequently, the
company's results are not comparable to First Call estimates,
which include results from these operations.

Reported net loss for the December quarter was $146 million an
improvement of $0.14 over reported net loss in the year-ago
quarter, which was $375 million. Reported net loss for the
September quarter of 2002 was $885 million.

Agere reported a pro forma net loss of $121 million in the
December quarter, an improvement of $0.07 over the year-ago
quarter, which was $234 million. Pro forma net loss in the
September quarter was $41 million. Pro forma net loss excludes
income from discontinued operations; net restructuring and other
charges; impairment and amortization of goodwill and other
acquired intangibles; net gain or loss from the sale of
operating assets and cumulative effect of an accounting change.

Revenues for the company's continuing operations were $436
million, down 2 percent compared with revenues of $445 million
in the year-ago quarter. Revenues in the September quarter of
2002 were $491 million.

"With major restructuring initiatives either completed or well
under way, our key priority now is to build a solid foundation
for revenue and market share growth," said John Dickson,
president and CEO, Agere Systems. "We are encouraged by our
strong customer engagements in areas such as GPRS, Wi-Fi,
storage and enterprise networking. Combined with our improving
backlog, this gives us increased confidence that we will see
sequential revenue growth in the latter half of the fiscal year.

"As we continue to strengthen our business, we are solidly on
track to achieving positive pro forma net income and positive
cash flow in the fourth quarter of fiscal 2003," said Dickson.

In August last year, the company had announced plans to exit its
optoelectronics operations. Earlier this month, the company
closed the sale of a substantial portion of that business to
TriQuint Semiconductor, and this week, closed the sale of the
remaining cable TV optical components business to EMCORE for $25
million in cash. With the two sales, the company has now
completed the disposition of its optoelectronic components
business.

Consistent with the guidance provided in October, the company
ended the December quarter with $733 million in cash, with $562
million cash in excess of short-term debt and $91 million cash
in excess of total debt.

                       Results by Segment

Client Systems Group

The Client Systems Group, which includes solutions for Wi-Fi,
storage and GPRS applications, reported revenues of $300 million
for the December quarter, up 9 percent from revenues of $274
million in the year-ago quarter. The group reported revenues of
$330 million in the September quarter of 2002.

Recent highlights from the Client Systems Group include:

     * Agreement with Samsung for $150 million to provide
solutions for Samsung's advanced data and multimedia mobile
phones over a 12-month period. Agere also received Samsung's
"supplier of the year" award for 2002.

     * Agreements with leading original design manufacturers,
such as Ambit, Askey, CyberTAN and USI, to supply them the new
WaveLan(TM) Wi-Fi chip solutions.

     * Demonstration of the industry's first 162Mbits/s high-
speed wireless networking, achieving speeds nearly 15 times
faster than today's 802.11b Wi-Fi data networks.

     * Alliance with Ericsson to develop Wi-Fi solutions for
laptops and handheld devices to access public hot-spots.

     * Agreement with IBM (now Hitachi Global Storage
Technologies) to provide read-channel chips for the company's
new high-capacity hard disk drives for laptops.

     * Introduction of the world's first single-chip serial ATA
solution for hard disk drives.

     * Announcement of a new read-channel integrated circuit
designed to enable the highest capacity desktop and mobile hard
disk drives currently under development. This next-generation
chip, the first in Agere's family of TrueStore(TM) components
for storage applications, delivers increased functionality and
signal integrity, driving higher levels of data storage capacity
for disk drive manufacturers.

Infrastructure Systems Group

The Infrastructure Systems Group reported revenues from
continuing operations of $136 million, down 20 percent from
revenues of $171 million in the year-ago quarter. The group
reported revenues of $161 million in the September quarter of
2002.

Recent highlights from the Infrastructure Systems Group include:

     * Introduction of FlexMap(TM), the industry's broadest
portfolio of flexible, high-performance mappers for access
networks.

     * Introduction of Festino(TM) Wireless, the wireless
infrastructure equipment industry's most comprehensive hardware
and software platform.

     * Introduction of the FlexPHY(TM) integrated circuit, a new
single-chip physical layer (PHY) transceiver that reduces space
and power by more than 50 percent over existing two-chip
solutions.

     * Integration of Agere's Nebula technology into the
industry-leading analog design environment of Cadence Design
Systems, providing microchip designers a fast and highly
accurate tool for design of high-performance analog and mixed-
signal integrated circuits.

                            Outlook

The company expects both revenues and pro forma net loss in the
March quarter to be flat compared with the December quarter. For
fiscal year 2003, the company expects revenues to be about $1.85
billion, consistent with the guidance provided in October. Pro
forma net loss for fiscal 2003 is expected to be in the range of
$0.15 to $0.19 per share, $0.03 better per share than previously
guided. The company expects to exit the fiscal year with more
than $700 million in cash, $100 million higher than previously
expected.

Agere Systems, whose $220 million Convertible Notes are rated by
Standard & Poor's at 'B', is a premier provider of advanced
integrated circuit solutions that access, move and store network
information. Agere's access portfolio enables seamless network
access and Internet connectivity through its industry-leading
WiFi/802.11 solutions for wireless LANs and computing
applications, as well as its GPRS offering for data-capable
cellular phones. The company also provides custom and standard
multi-service networking solutions, such as broadband Ethernet-
over-SONET/SDH components and wireless infrastructure chips, to
move information across metro, access and enterprise networks.
Agere is the market leader in providing integrated circuits such
as read-channel chips, preamplifiers and system-on-a-chip
solutions for high- density storage applications. Agere's
customers include the leading PC manufacturers, wireless
terminal providers, network equipment suppliers and hard-disk
drive providers. More information about Agere Systems is
available from its Web site at http://www.agere.com


AK STEEL: Offers $1 Billion to Acquire National Steel Assets
------------------------------------------------------------
AK Steel Corporation (NYSE: AKS) submitted a proposal to acquire
substantially all of the steelmaking and finishing assets of
National Steel Corporation for $1.025 billion, of which $200
million consists of the assumption of certain liabilities. The
remaining $825 million would be payable to National in cash,
with $450 million of that amount for net working capital.

National has been operating since March of 2002 as a debtor-in-
possession under Chapter 11 of the Bankruptcy Code. AK Steel
said it will seek, in a hearing on January 30, to have the
bankruptcy court declare it the lead bidder in the competitive
bidding process for National's assets. AK Steel said its offer
is contingent upon regulatory and bankruptcy court approvals. In
addition, the bid contemplates negotiation of a new contract
with the United Steelworkers of America, which represents most
of National's hourly employees. AK Steel said its bid does not
include the assumption of pension and other post-retirement
employee benefits, which consist primarily of retiree health
care liabilities.

"This represents a superior bid for the assets of National Steel
and a strategic acquisition for AK Steel," said Richard M.
Wardrop, Jr., chairman and CEO of AK Steel. "The National
operations would further diversify AK Steel's rich product mix
to include tin mill and construction market products, and
presents the opportunity for significant cost-based synergies.
It also presents an opportunity for AK Steel and the USWA to
forge a constructive new labor agreement that helps insure that
a consolidated U.S. steel industry remains competitive with
steelmakers worldwide," Mr. Wardrop said.

AK Steel employees have established numerous world productivity
records, including for blast furnace operations, carbon and
stainless continuous casting, cold rolling and coating.
Headquartered in Middletown, Ohio, AK Steel produces flat-rolled
carbon, stainless and electrical steel products for automotive,
appliance, construction and manufacturing markets, as well as
tubular steel products. The company operates steel producing and
finishing facilities in Ohio, Kentucky, Pennsylvania and
Indiana. Additional information about AK Steel is available on
the company's Web site at http://www.aksteel.com

National Steel, headquartered in Mishawaka, Indiana, filed a
voluntary petition under Chapter 11 of the Bankruptcy Code in
March of 2002, but has continued to operate its facilities.
National operates steel producing and finishing facilities in
Indiana, Illinois and Michigan. More information is available on
the company's Web site at http://www.nationalsteel.com

                         *     *     *

As previously reported, Standard & Poor's assigned its double-
'B' rating to integrated steel producer, AK Steel Corp.'s $550
million senior unsecured notes due 2012. Standard & Poor's also
affirmed its existing ratings on AK Steel Corp., and parent
company AK Steel Holding Corp. The outlook is stable. AK Steel
is based in Middletown, Ohio and has total debt of about $1.4
billion.

The ratings on AK Steel Holding Corp., reflect its fair business
position as a midsize, value-added, integrated steel maker with
high exposure to the automotive market, low sensitivity to spot
prices, and burdensome legacy costs totaling $1.4 billion.


ALLBRITTON: Reports Improved Operating Results for Fiscal Q1
------------------------------------------------------------
Allbritton Communications Company announced its operating
results for the first fiscal quarter ended December 31, 2002.

For the three months ended December 31, 2002, net operating
revenues were $58,509,000 as compared to $52,936,000 for the
same period in the prior year, an increase of 10.5%. Total
operating expenses, including depreciation and amortization and
corporate expenses, were $36,175,000 as compared to $37,153,000
for the same period in the prior year, a decrease of 2.6%.
Depreciation and amortization were $2,589,000 as compared to
$3,301,000 for the same period in the prior year. Corporate
expenses were $1,458,000 as compared to $1,382,000 for the same
period in the prior year. Operating income was $22,334,000 as
compared to $15,783,000 for the same period in the prior year,
an increase of 41.5%. Net income was $4,250,000, as compared to
$2,699,000 for the same period in the prior year, an increase of
57.5%.

Effective October 1, 2002, ACC adopted the provisions of
Statement of Financial Accounting Standards No. 142, "Goodwill
and Other Intangible Assets," requiring that goodwill and
intangible assets deemed to have indefinite lives no longer be
amortized, but rather be subject to impairment tests at least
annually. ACC has completed its impairment review as of October
1, 2002, and as a result, has recorded a non-cash, after-tax
impairment charge of $2,973,000 related to the carrying value of
its indefinite-lived intangible assets. This charge was recorded
as a cumulative effect of a change in accounting principle
during the first fiscal quarter.

During the three months ended December 31, 2001, amortization of
indefinite-lived intangible assets was $1,022,000. Assuming ACC
adopted SFAS No. 142 at the beginning of the prior fiscal year,
operating income for the quarter ended December 31, 2001 would
have been $16,805,000 and net income would have been $3,385,000,
reflecting the elimination of such amortization expense.

ACC and its subsidiaries own and operate ABC network-affiliated
television stations serving seven geographic markets:

     --  WJLA - Washington, D.C.
     --  WBMA/WCFT/WJSU -Birmingham (Anniston and Tuscaloosa),
         Alabama
     --  WHTM - Harrisburg-Lancaster-York-Lebanon, Pennsylvania
     --  KATV - Little Rock, Arkansas
     --  KTUL - Tulsa, Oklahoma
     --  WSET - Roanoke-Lynchburg, Virginia
     --  WCIV - Charleston, South Carolina

In addition, ACC owns and operates a 24-hour cable news channel
in Washington, D.C., NewsChannel 8, which was acquired from
ALLNEWSCO, Inc., on September 16, 2002. ACC and Allnewsco are
treated as if they had always been combined for accounting and
financial reporting purposes and, accordingly, ACC's results for
the quarter ended December 31, 2001 have been restated to
reflect the combined results of ACC and Allnewsco.

                         *     *     *

As reported in Troubled Company Reporter's December 13, 2002
edition, Standard & Poor's assigned its single-'B'-minus rating
to the Allbritton Communication Co.'s $275 million senior
subordinated notes due 2012. Proceeds are expected to be used to
redeem the company's existing $275 million, 9.75% subordinated
notes due 2007.

At the same time, Standard & Poor's affirmed its single-'B'-plus
corporate credit rating on Allbritton. Washington, DC-based TV
station owner and operator had total debt outstanding of
approximately $433.4 million at June 30, 2002. The outlook is
stable.

"The transaction reduces Allbritton's interest expense and
extends the company's debt maturities," said Standard & Poor's
credit analyst Alyse Michaelson.


ALTERRA: HCN Expects Alterra to Remain Current on Rent Payments
---------------------------------------------------------------
Health Care REIT, Inc., (NYSE:HCN) disclosed information on its
portfolio of properties with Alterra Healthcare Corporation,
which filed for Chapter 11 bankruptcy protection yesterday. HCN
has a master lease with Alterra for 45 assisted living
facilities with a depreciated book value of $106 million,
representing approximately 7 percent of HCN's portfolio at
December 31, 2002. The master lease facilities had a rent
payment coverage of 1.51 times for the quarter ending
September 30, 2002. Alterra is current on all rent obligations.

HCN expects Alterra to remain current on rent payments and to
assume the master lease. The properties covered by the master
lease generate approximately $6 million per year of cash flow to
Alterra.

Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a
real estate investment trust that invests in health care
facilities, primarily skilled nursing and assisted living
facilities. At December 31, 2002, the company had investments in
244 health care facilities in 33 states with 44 operators and
had total assets of approximately $1.6 billion. For more
information on Health Care REIT, Inc., via facsimile at no cost,
dial 1-800-PRO-INFO and enter the company code - HCN. More
information is available on the Internet at
http://www.hcreit.com


ALTERRA: LTC Expects Minimal Impact from Alterra's Bankruptcy
-------------------------------------------------------------
Alterra Healthcare Corporation (AMEX:ALI) filed a voluntary
petition with the U.S. Bankruptcy Court for the District of
Delaware to reorganize under Chapter 11 of the U.S. Bankruptcy
Code. ALI is disclosed as a Major Operator by LTC Properties,
Inc., (NYSE:LTC) in LTC's public filings and LTC has disclosed
in its public filings that ALI was pursuing a restructuring
plan.

ALI leases 35 assisted living facilities from LTC. These
facilities represent an original investment of approximately
$84.2 million (approximately 15% of LTC's direct real estate
investment portfolio), generate approximately $8.9 million in
rental income and had a combined rent coverage of 1.22 times
based on December 31, 2002 information provided by ALI.

LTC added that while no assurances can be given in a bankruptcy,
at this time, senior management of ALI has informed LTC that
they expect all leases with LTC will be affirmed and that LTC
will not be adversely impacted by this action taken by ALI.

LTC Properties, Inc., is a self-administered real estate
investment trust that primarily invests in long-term care and
other health care related facilities through mortgage loans,
facility lease transactions and other investments. The Company
has investments in 95 skilled nursing facilities, 96 assisted
living residences and one school in 30 states.


AMERICAN TOWER: S&P Keeps Downgraded Ratings on Watch Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating of wireless tower operator American Tower Corp. to 'B-'
from 'B+'. The rating remains on CreditWatch with negative
implications due to liquidity concerns.

Standard & Poor's also assigned its 'CCC' rating to the
operating company American Towers Inc.'s proposed $400 million
senior subordinated discount notes due 2008 offered under Rule
144A with registration rights.

Proceeds from the new notes will be used to satisfy a put on a
convertible debt issue and pay down bank debt.

The Boston, Massachusetts-based company currently has about $3.6
billion of debt outstanding.

"The downgrade is due to concerns that weak tower industry
fundamentals will make it challenging for American Tower to
reduce its heavy debt burden in the next several years. The
company used substantial debt in the past several years to
acquire and build towers with the anticipation that steep growth
in cash flows resulting from strong carrier demand for towers
would help to quickly deleverage," said Standard & Poor's credit
analyst Michael Tsao.

"With wireless carriers projected to limit tower-related
spending at least through 2004 due to capital constraint,
flattening demand for wireless services, and availability of
additional spectrum capacity resulting from recent network
upgrades, the expectation that American Tower would be able to
achieve substantial debt reduction through increased cash flows
has become unrealistic," added Mr. Tsao.

The ratings remain on CreditWatch due to near-term liquidity
concerns. Without completing the new notes offering and amending
its bank credit agreement, American Tower faces liquidity issues
in the near term.

The resolution of the CreditWatch depends on American Tower's
completing the new proposed notes offering. If the notes are
sold, all ratings will be removed from CreditWatch and have a
negative outlook. Without the offering being completed or a
similar transaction that would allow the company to deal with
its liquidity issues, the ratings could be significantly lowered
in the near term.

DebtTraders says that American Tower Corp.'s 9.375% bonds due
2009 (AMT09USR1) are trading at 83 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AMT09USR1for
real-time bond pricing.


AMERICAN MEDIA: Acquires Weider Publications for $350 Million
-------------------------------------------------------------
American Media, Inc., and Evercore Partners completed the
acquisition of Weider Publications, Inc., and its related
properties for $350 million.

The transaction has been structured to allow for a significant
step-up in the assets for tax purposes. AMI expects this
structure to provide significant incremental cash flow benefits
on an after-tax basis. The transaction will be accretive to
AMI's EBITDA immediately.

"With the acquisition of Weider," Mr. Pecker commented, "AMI
will dramatically expand our consumer magazine division and
transform itself into a major media company with a better
balanced portfolio of revenues between circulation and
advertising. Today, from celebrity journalism to country music,
we have the #1 market share in all of our targeted publication
categories, and the Weider acquisition gives us this same
preeminence in the health & fitness industries."

Weider Publications is comprised of seven magazines, each a
leader in their respective categories of the health & fitness
market, and represents more than 60 years of brand equity. These
properties include:

     -- Muscle & Fitness, Flex, Muscle & Fitness Hers and Men's
Fitness - these titles make up the Weider Enthusiast Group and
are the dominant magazines for serious fitness enthusiasts, both
male & female. Total readership is more than 15 million.

     -- Shape, Fit Pregnancy and Natural Health - these titles
make up the Weider Active Lifestyle Group and are leading titles
in the women's active lifestyle, pre & post natal fitness and
self-care categories. These titles have a readership in excess
of 8 million, with Shape the market leader in both circulation
and advertising.

The company has multiple international editions of its titles
and multi-media properties that complement them. It also has a
significant presence in event marketing through its sponsorship
of the Mr. and Ms. Olympia contests and other competitions
sanctioned by the International Federation of Body Builders, as
well as other non-publishing related fitness enterprises.

Commenting on the transaction, Evercore Partners President
Austin Beutner said, "When we purchased American Media in 1999,
our goal was to make sure that every one of our publications was
the market leader. Evercore Partners is a company committed to
creating shareholder value, and investments like Weider are an
important part of our long-term growth strategy for AMI."

J.P. Morgan Securities Inc. and Bear, Stearns & Co. acted as
financial advisors to AMI and Evercore and are providing
financing in connection with the transaction. Simpson Thacher &
Bartlett provided legal counsel to AMI and Evercore. Rothschild
Inc. acted as exclusive financial advisor and Latham & Watkins
provided legal counsel to Weider.

American Media, Inc., is one of the largest media companies in
the U.S. The company publishes six of the 14 best selling weekly
magazines, including the #2 and #4 titles, the National Enquirer
and Star. The company also publishes the best selling country
music magazines, Country Weekly and Country Music, a Latino
entertainment magazine, Mira!, a mass market automotive
magazine, AMI's Auto World, more than 200 Mini-Mags and Digests,
and recently launched its own book division. Besides print
properties, American Media owns Distribution Services, Inc., the
country's #1 in-store magazine merchandising company.

Evercore Partners, based in New York and Los Angeles, makes
private equity investments through its Evercore Capital Partners
affiliate and venture investments through its Evercore Ventures
affiliate. Evercore also provides strategic, financial and
restructuring advisory services. Evercore Capital Partners'
investments include: American Media, Vertis, Resources
Connection, Energy Partners, Continental Energy Services and
Telenet. Ventures investments include Boingo, Panasas, USBX and
Atheros. Recent advisory work includes advising Readers' Digest
on its recapitalization and General Mills on its acquisition of
Pillsbury from Diageo plc.

As reported in Troubled Company Reporter's January 9, 2003
edition, Standard & Poor's affirmed its 'B+' corporate credit
rating for publisher American Media Operations Inc., following
the company's pending acquisition of Weider Publications LLC for
$350 million.

In addition, Standard & Poor's assigned its 'B+' senior secured
rating to American Media Operations Inc.'s $140 million tranche
C-1 term loan, and 'B-' rating to the company's $150 million
subordinated notes due 2011. The Boca Raton, Florida-based
company has pro forma total debt of $1.02 billion as of
September 23, 2002. The outlook is stable.

"Standard & Poor's expects that the transaction, while largely
debt-financed, will not materially alter credit measures over
the near term due to potential operating synergies and cost-
saving opportunities through the leveraging of American Media's
existing infrastructure," said Standard & Poor's credit analyst
Hal Diamond.


AMERICA WEST: Fourth Quarter Financial Results Show Improvement
---------------------------------------------------------------
America West Holdings Corporation (NYSE: AWA), parent company of
low-fare America West Airlines, Inc., and The Leisure Company,
reported a fourth quarter net loss of $32.5 million. For the
same period a year ago, America West reported a net loss of
$60.9 million.

Excluding unusual items and year-over-year changes in
accounting, the company's net loss was $35.5 million in the
fourth quarter of 2002 and $84.1 million in the fourth quarter
of 2001. A reconciliation of the reported net loss to the net
loss excluding unusual items is included on the attached
statements of operations.

"America West's financial results, although much improved,
reflect the unprecedented and continued economic difficulties
facing the airline industry," said W. Douglas Parker, chairman
and chief executive officer. "It is clear that the economic
rebound we had hoped to see by this time has not yet
materialized."

Operating revenues for the quarter were $522 million, up 30.6
percent from the same period in 2001. Available seat miles
increased 17.6 percent. Revenue passenger miles were 5.1
billion, up 25.7 percent from fourth quarter 2001, consistent
with the increase in capacity. The airline's passenger load
factor for the quarter was 73.2 percent, up from 68.5 percent in
the fourth quarter of 2001. Passenger yields increased 4.3
percent to 9.78 cents, and passenger revenue per available seat
mile improved 11.4 percent to 7.15 cents.

"America West's 11.4 percent improvement in passenger RASM is
well ahead of the industry average, and will likely represent
the largest domestic RASM increase among all major airlines,"
noted Parker. "This is the result of the business-friendly
pricing structure we launched in March of 2002, and is an
encouraging sign in an otherwise discouraging environment."

Operating cost per available seat mile for the fourth quarter of
2002 declined 10.7 percent, excluding special charges in 2001,
to 7.98 cents, due primarily to a decrease in aircraft rents and
travel agent commissions, partially offset by a 34.4 percent
increase in fuel expenditures. Average fuel price excluding tax
was 82.3 cents per gallon versus 71.8 cents in the fourth
quarter of 2001. Excluding fuel and special charges, CASM
decreased 14.2 percent.

America West continued to expand its popular low-fare service
into markets nationwide during the fourth quarter. In October,
the airline launched service between Phoenix and Medford, Ore.,
Billings, Mont., Pittsburgh and Calgary. Additionally, in
December, America West launched service between Phoenix and
Washington D.C. Dulles; Phoenix and Toronto; and Las Vegas and
Toronto. The low-fare carrier also announced during the quarter
that it would begin service to Memphis in April 2003.

For the full year 2002, America West reported a loss before the
cumulative effect of a change in accounting principle of $157.9
million, as revenues for the full year decreased a modest 0.9
percent to $2.05 billion. The company recognized a $272 million
write-down of Excess Reorganization Value in the first quarter
of 2002 upon the mandatory adoption of a new accounting standard
for intangible assets. Including the effect of the accounting
change, America West's net loss for 2002 was $430.2 million.

America West continued its dramatic climb in operating
performance throughout 2002. For the full year, as reported to
the Department of Transportation, 82.9 percent of America West
flights arrived on-time, compared with 74.8 percent in 2001.
Completed flights increased to 99.0 percent from 98.0 percent in
2001. As a result of these improvements, customer complaints to
the DOT dropped by 55 percent in 2002.

"Our employees deserve credit for their continued dedication,
perseverance and commitment to customer service," Parker said.
"Through the outstanding efforts of 13,000 America West
employees, we improved our performance during 2002 in virtually
every operational category. This is particularly significant
when considering our airline is one of the few to have
maintained its pre-September 11 flight levels throughout 2002."

Beginning with the restructuring of its fares in March 2002,
America West continues to lead the industry with innovations
designed to better serve its customers, as well as to improve
its financial performance. Among these initiatives is the
airline's current test of "Buy on Board," in response to
customer demand, where restaurant-quality meals are sold on
selected flights.

America West Holdings Corporation is an aviation and travel
services company. Wholly owned subsidiary America West Airlines
is the nation's second largest low-fare carrier, serving 88
destinations in the U.S., Canada and Mexico. The Leisure
Company, also a wholly owned subsidiary, is one of the nation's
largest tour packagers.

As previously reported in the Troubled Company Reporter,
Standard & Poor's raised America West's junk corporate credit
rating to 'B-'.


AMR CORP: S&P Keeps Ratings Watch over Losses & Liquidity Issues
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB-' corporate
credit ratings and other ratings for AMR Corp., and subsidiary
American Airlines Inc., on CreditWatch with negative
implications, reflecting continuing heavy losses and diminishing
sources of backup liquidity as available collateral is used
for borrowings. AMR reported a net loss of $529 million in the
fourth quarter of 2002, a decline from the $734 million net
loss, before special items, in the prior-year period, and a
full-year 2002 net loss of $3.5 billion ($2.0 billion before
special items), an increase from the $1.4 billion net loss,
before special items, in 2001.

"The CreditWatch placement reflects AMR's continuing heavy
losses, described by the company's CEO as 'unsustainable,' and
the gradual exhaustion of its sources of backup liquidity," said
Standard & Poor's credit analyst Philip Baggaley. "While near-
term cash liquidity remains adequate, American Airlines faces
the potential acceleration of over $800 million of bank debt due
to likely covenant violations by June 30, 2003, and has used up
most of its readily financeable collateral borrowing to cover
cash losses," the analyst continued. American is in talks with
its unions about contract revisions to reduce labor costs, and
hopes to accelerate those negotiations in view of the company's
financial situation. Any war between the U.S. and Iraq, a
prospect that has already raised airline fuel prices, would
likely cause a further erosion of revenues, widening the
company's losses. AMR also reported that it had taken a $1.1
billion after-tax charge directly to equity to reflect pension
underfunding, a move in line with those reported thus far by
several other large, high-cost U.S. airlines.

Standard & Poor's will review AMR's financial and liquidity
outlook, and ongoing measures to stem its losses to resolve the
CreditWatch.


AMRESCO RESIDENTIAL: Fitch Rates Classes B-1F & B-2F at BB/CC
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on AMRESCO
Residential Securities Corp., Mortgage Loan Trust 1997-3's
mortgage loan pass-through certificates series 1997-3 class M-1F
to 'AA+' from 'AA'.

Class M-1F is part of the fixed loan group of this transaction.
Concurrently, ratings are affirmed on 23 other classes of
AMRESCO Residential Securities Corp. Mortgage Loan Trust.

The raised rating reflects an increase in the credit support
percentage to the mezzanine class due to the pay down of the
senior classes, combined with the shifting interest feature of
the transaction. The class is protected from losses by excess
interest cash flow, subordination, and overcollateralization.

The affirmed ratings on the other AMRESCO certificates reflect
the adequate credit support provided to each of the classes,
despite the pools' losses and delinquencies.

As of the December 2002 distribution date, total delinquencies
ranged from 14.82% (series 1997-3 fixed-rate group) to 48.20%
(series 1998-1 adjustable-rate group), and serious delinquencies
ranged from 12.01% (series 1997-3 fixed-rate group) to 44.73%
(series 1998-1 adjustable-rate group) of the current pool
balance. Cumulative losses ranged from 3.99% (series 1997-3
adjustable-rate group) to 6.96% (series 1998-1 fixed-rate group)
of the original pool size.

At issuance, the mortgage collateral backing all of the AMRESCO
certificates consisted of 15- to 30-year, fixed-rate, subprime
loans secured by first liens on owner-occupied, single-family
detached residential properties.

                         Rating Raised

     AMRESCO Residential Securities Corp. Mtg Loan Trust 1997-3
                 Mortgage loan pass-thru certs

                                Rating
                    Class    To        From
                    M-1F     AA+       AA

                         Ratings Affirmed

         AMRESCO Residential Securities Corp. Mtg Loan Trust
                  Mortgage loan pass-thru certs

          Series   Class                            Rating
          1997-3   A-7, A-8, A-9, A-10              AAA
          1997-3   M-1A                             AA+
          1997-3   M-2A, M-2F                       A
          1997-3   B-1A                             BBB-
          1997-3   B-1F                             BB
          1997-3   B-2F                             CC
          1998-1   A-3, A-4, A-5, A-6, M-1A         AAA
          1998-1   M-1F                             AA
          1998-1   M-2A, M-2F                       A
          1998-1   B-1A                             BBB-
          1999-1   A                                AAA
          1999-1   M1                               AA
          1999-1   M2                               A


APPLIED EXTRUSION: Fiscal 2002 Net Loss Balloons to $32 Million
---------------------------------------------------------------
Applied Extrusion Technologies, Inc., (NASDAQ NMS - AETC)
announced financial results for its year ended September 30,
2002.

                   Full Year Fiscal 2002 Results

Sales for fiscal 2002 of $252,092,000 declined $27,748,000
compared with fiscal 2001. Of this decline, $20,258,000 is due
to the sale of the Company's nets and nonwovens business in
September 2001, and the remainder is due to a decline in
oriented polypropylene films sales. Fiscal 2002 OPP films sales
declined by $7,490,000, primarily due to a 5.3 percent decrease
in average selling price resulting from unfavorable industry-
wide conditions, especially during the first half of the year,
partially offset by a 2.6 percent increase in sales volume.
During fiscal 2002 the North American OPP films industry had
substantial excess capacity caused, in part, by inventory de-
stocking throughout the supply chain, which began after
September 11, 2001 and continued throughout 2002.

As previously announced, the Company executed selective
shutdowns of its production lines during the fourth quarter of
fiscal 2002. As a result, the Company recorded a charge to cost
of sales of approximately $3,400,000, representing unabsorbed
overhead costs resulting from the shutdown. In addition, the
Company recorded a $1,492,000 charge to cost of sales for start-
up costs related to a new OPP film line, which, when fully
operational, is expected to be able to produce a number of
unique films.

Gross profit for fiscal 2002 was $43,993,000 or 17.5 percent of
sales, compared with $57,121,000 or 20.4 percent of sales, for
fiscal 2001. Of the $13,128,000 decline, $5,392,000 relates to
the divested nets and nonwovens business, with the remaining
decrease of $7,736,000 attributable to the OPP films business.
For the OPP films business alone, gross margin was 17.5 percent
of sales in 2002 compared with 19.9 percent of sales in 2001.
OPP films gross margin decreased due to a 5.3 percent decline in
average selling price, temporary plant shutdown costs, and
start-up costs associated with a new production line, as
discussed above, all of which was offset in part by lower cost
of goods sold and increased sales volume.

In September 2002, the Company announced a restructuring and
reorganization aimed at significantly reducing its cost
structure. The plan includes closure of the Massachusetts-based
corporate office, a realignment of the Company's business units
and a reorganization of key roles and responsibilities. The
reorganization eliminated 50 full time positions and is expected
to be completed by March 31, 2003. With these actions, the
Company anticipates annualized cost savings of approximately
$5,000,000, the majority of which will begin to be realized in
fiscal 2003. In connection with the cost reduction program, the
Company recorded a charge in the fourth quarter of fiscal 2002
of $9,002,000 comprised primarily of severance costs and lease
obligations.

Operating loss for fiscal 2002 was $4,649,000, compared with
operating profit of $11,600,000 in fiscal 2001. Excluding
charges for the temporary plant shutdown and restructuring both
of which are described above, costs associated with the
restatement and the integration of the QPF acquisition which are
described in the table on page 3, and the loss on sale of assets
related to the nets and nonwovens business ($375,000), operating
profit in fiscal 2002 was $10,445,000. Operating profit for
fiscal 2001 was $19,356,000, excluding the costs related to the
divested nets and nonwovens business ($5,208,000) and QPF
acquisition costs ($2,548,000). The $8,911,000 decline in
adjusted operating profit in fiscal 2002 versus adjusted
operating profit in fiscal 2001 was driven primarily by lower
average selling price which negatively impacted gross profit,
and higher OPP film operating expenses due primarily to an
increase in bad debt expense, and expenses related to the
development of a number of new highly differentiated products.

Net loss for fiscal 2002 was $31,751,000, or $2.55 per share, of
which $16,657,000 was from operations and the remainder was from
restructuring, temporary plant shutdown, acquisition
integration, the loss on sale of assets, and costs associated
with the restatement, all of which are described above or in the
table on page three. Net loss for fiscal 2001 was $26,412,000,
or $2.23 per share, of which $8,392,000 was from operations,
$10,264,000 was related to the deferred tax write-off, and
$7,756,000 were the costs related to the divested nets and
nonwovens business and QPF acquisition.

                         Restatement

This year the Company restated its financial statements for
fiscal 1998 through 2001 and for the first three quarters of
fiscal 2002. The effects of this restatement are detailed in the
Form 10-K for fiscal 2002, which has been filed with the
Securities and Exchange Commission and will be mailed shortly to
the Company's shareholders. As shown there, the cumulative
impact through June 30, 2002 from all restated items was to
decrease our previously reported net assets by approximately
$13,700,000. It also shows the impact on previously reported net
losses in each of the restated periods for each restated item
which led to this decrease. The effect of the change in
accounting for the sale-leaseback transactions alone would have
resulted in a cumulative decrease in our previously reported net
assets of approximately $16,700,000 over these periods. The
cumulative effect of the other restated items taken together
(some of which offset others) would have resulted in an increase
in our previously reported net assets of approximately
$3,000,000. Other than the significant expenses related to the
restatement process, the items underlying the restatement will
not increase the amount of our obligations going forward or
increase future cash needs.

                    Fourth Quarter 2002 Results

Sales for the fourth quarter of fiscal 2002 were $64,770,000.
Compared with sales for the fourth quarter of 2001 of
$71,713,000, sales decreased $6,943,000, of which $4,486,000 was
due to the sale of the nets and nonwovens business. The
remaining decline of $2,457,000 is due to a decrease in OPP film
average selling price primarily as a result of the sale of
excess and obsolete inventory in the fourth quarter, offset in
part by higher sales volume in the fourth quarter of fiscal
2002.

Gross profit for the fourth quarter of fiscal 2002 was
$6,552,0000. Excluding $3,367,000 of plant shutdown costs
discussed above, gross profit was $9,919,000, compared with
$16,556,000 for the fourth quarter of fiscal 2001. Of the
$6,637,000 decline in adjusted gross profit, $1,267,000 related
to the sale of the nets and nonwovens business and $5,370,000
related to the OPP films business. Of the $5,370,000 decline in
OPP film gross profit, $2,457,000 related to the decline in
sales discussed above, and the remainder related to a 16.2
percent increase in raw material costs in the fourth quarter of
fiscal 2002 compared with the same period in fiscal 2001, offset
in part by lower manufacturing costs.

Operating loss for the fourth quarter of fiscal 2002 was
$15,071,000, compared with operating profit of $344,000 in
fiscal 2001. Excluding charges for the temporary plant shutdown,
restructuring, restatement expenses, and the loss on sale of
assets, all of which have been disclosed or are referenced in
the table above, operating loss in the fourth quarter of fiscal
2002 was $927,000.

Operating profit for the fourth quarter of fiscal 2001,
excluding costs related to the divested nets and nonwoven
business of $6,633,000, was $6,977,000. Of the $7,904,000
decline in adjusted operating profit from the fourth quarter of
fiscal 2001 to the fourth quarter of fiscal 2002, $5,370,000 is
due to the decline in OPP films gross profit discussed above,
and the remaining $2,534,000 is due to higher operating
expenses. OPP film operating expenses increased due to expenses
related to the restatement process, an increase in bad debt
expense, and expenses related to the development of a number of
new highly differentiated products.

Net loss for the fourth quarter of fiscal 2002 was $22,590,000
of which $8,446,000 was from operations, and the remainder was
from restructuring, temporary plant shutdown, loss on sale of
assets, and costs associated with the restatement, all of which
are discussed below. Net loss for the fourth quarter of fiscal
2001 was $20,329,000, of which $13,686,000 was attributable to
the deferred tax write-off and $6,633,000 was related to the
divested nets and nonwoven business. Therefore, adjusted net
loss from operations was $10,000 in fiscal 2001. The change in
adjusted net income from fiscal 2001 to fiscal 2002 of
$8,436,000 was driven by all of the factors discussed above and
a $532,000 increase in interest expense.

              Balance Sheet, Cash Flow and Liquidity

On September 30, 2002 the Company had approximately $17,500,000
of cash and cash equivalents and no borrowings under its
revolving credit facility. Net debt (total debt less cash) on
September 30, 2002 was approximately $260,000,000, representing
82 percent of total capitalization. For the twelve months ended
September 30, 2002, the Company generated EBITDA of
approximately $31,200,000, resulting in an interest coverage
ratio of approximately 1.0.

On January 21, 2003, the Company entered into an amended and
restated, $50,000,000 three-year, revolving credit agreement.
This agreement gives the Company the ability to borrow based on
specified percentages of eligible accounts receivable and
inventories. The maximum borrowing availability under this
facility is currently $19,000,000. The Company expects the
borrowing availability to increase to $50,000,000, subject to
syndication and certain reserves, once the banks have completed
their diligence review of the Company's assets.

                         Nasdaq Listing

As a result of the Company filing its 2002 Form 10-K prior to
the January 23, 2003 deadline specified in the previously-
announced delisting notification from the Nasdaq Listings
Qualifications Department received on January 15, 2003, the
Company will not be delisted and the fifth letter "E" will be
removed from its normal trading symbol "AETC".

                         Company Comments

"Fiscal 2002 was a very disappointing year for the Company, as
weak demand and excess industry capacity resulted in lower
average selling prices, decreased margins and substantial
losses," commented Amin J. Khoury, Chairman and Chief Executive
Officer. "More disappointing is the fact that we have incurred
net losses of over $58,000,000 in the past two years. In
addition, we have significantly reduced our liquidity through
heavy spending on capital equipment. Clearly, this performance
is unacceptable. While we believe that market conditions will
improve, we can no longer rely on tightening capacity
utilization and improved market conditions to return the Company
to profitability and generate acceptable returns for our
investors."

"Today we are at a critical juncture as we break from the past
and establish the Company on a new course," continued Mr.
Khoury. "Specifically, we need to effect a turnaround in
profitability and have an intense focus on performance in the
short term, and dramatically increase profitability and return
on investment in the long term. As the Company's Chairman and
now CEO, I accept this challenge, and, with the recent
restructuring, our entire organization is dedicated to achieving
these objectives."

"In 2003, regardless of market supply demand dynamics, our
resolve is to deliver positive free cash flow, which will
require a very substantial improvement in EBITDA over fiscal
2002, careful control of capital expenditures, and continuous
re-evaluation of our cost structure," continued Mr. Khoury. "We
believe that our financial results for the first quarter of
2003, which ended on December 31, 2002, will reflect our
progress towards this goal, with significant increases in both
revenue and EBITDA compared with last year," concluded Mr.
Khoury.

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

                        *    *    *

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

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


ASSET SECURITIZATION: Fitch Drops 1997-D5 Class B-6 Rating to D
---------------------------------------------------------------
Fitch Ratings downgrades Asset Securitization Corp.'s
commercial mortgage pass-through certificates, series 1997-D5
$17.4 million class B-6 to 'D'. In addition, Fitch places the
following classes on Rating Watch Negative: $13.2 million class
B-5, $13.2 million class B-4, $8.8 million class B-3, $39.5
million class B-2 and $39.5 million class B-1, which have
respective ratings of 'C', 'C', 'CC', 'B' and 'B+'. The
downgrade to the class B-6 is a result of the loss in the amount
of $4.5 million that was applied to that class on the January
distribution date. The loss is attributed to the liquidation of
a vacant Builders Square property located in El Paso, Texas. The
total realized loss on the loan was $5.8 million. After applying
the loss to the most subordinate class B-7and B-7H, the
remaining $4.5 million was allocated to the B-6 class.

The five classes were placed on Rating Watch Negative due to the
interest shortfalls that have been accruing on those classes.
The interest shortfalls are primarily due to ASERs that resulted
from appraisal reductions on several specially serviced loans,
including the Hyde Park loan.

Fitch is in the process of gathering information on the credit-
assessed loans and the loans of concern, including the specially
serviced loans and will revisit the ratings of this deal over
the next few weeks.


ATLAS AIR: S&P Downgrades Ratings Following Payment Default
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
Atlas Air Worldwide Holdings Inc., and subsidiary Atlas Air
Inc., following news of a payment default on an operating lease
obligation. Ratings on both entities remain on CreditWatch with
negative implications, where they were placed on
October 17, 2002.

Standard & Poor's lowered the corporate credit rating to 'CCC-'
from 'B-' and senior unsecured debt to 'CC' from 'CCC'. Pass-
through certificates Series 1998-1, Class A were lowered to 'BB'
from 'BBB', Class B to 'B-' from 'BB-', and Class C to 'CCC+'
from 'B+'. In addition, Series 1999-1, Class A-1 were lowered to
'BB' from 'BBB', Class A-2 to 'BB' from 'BBB', Class B to 'B+'
from 'BB+', and Class C to 'CCC+' from 'B+'. Finally, Series
2000-1, Class A were lowered to 'BB+' from 'BBB+', Class B to
'B+' from 'BB+', and Class C to 'B-' from 'BB-'. The downgrades
of the enhanced equipment trust certificates reflect the
downgrade of Atlas Air Inc.

Purchase, New York-based Atlas Worldwide Holdings, which
provides heavyweight air cargo services through its Atlas Air
Inc. subsidiary and scheduled, high-frequency airport-to-airport
cargo services through its Polar subsidiary, has about $2.5
billion of debt (including off-balance-sheet leases).

The rating actions follow Atlas' announcement that it has failed
to make a lease payment on one of its 747-200 series aircraft.
"The rating actions reflect the payment default on the operating
lease and increased concerns about near-term liquidity and the
company's ability to meet debt service requirements as they come
due over the near term," said Standard & Poor's credit analyst
Lisa Jenkins. Atlas is in the process of negotiating with
lessors to reduce or defer operating lease payments relating to
certain 747-200 aircraft and has stated that it may defer other
payments, pending the outcome of its negotiations.

Atlas has been experiencing significant financial stress over
the past year. Liquidity pressures were exacerbated in October
2001 when the company announced that it was initiating a re-
audit of its financial results for 2000 and 2001, following a
determination that certain adjustments must be made to prior-
year results. Completion of the re-audit is expected in early
2003. As a result of the re-audit, the company delayed the
filing of its third-quarter 2002 Form 10-Q, which created an
event of default under its credit agreement. Earlier this month,
Atlas announced that it had entered into an agreement with its
bank lenders to amend its loan agreements and waive certain
events of default. The bank lenders have waived covenant
compliance through the quarter ending March 31, 2003, and have
deferred and reduced the amount of scheduled prepayment. Atlas
expects to discuss covenant levels for the balance of 2003 with
the bank group later this quarter.

Standard & Poor's will continue to monitor Atlas' negotiations
with its lenders and lessors. Failure to successfully conclude
refinancing negotiations would likely lead to a general default
and bankruptcy filing. If Atlas is successful in negotiating new
financing terms with both groups, CreditWatch implications may
be revised, and ratings could be reviewed for possible upgrades.


ATMEL CORP: Q4 Results Improve Sequentially and Year-Over-Year
--------------------------------------------------------------
Atmel Corporation (Nasdaq:ATML) announced financial results for
the fourth quarter and the year ended December 31, 2002.

Revenues for the fourth quarter of 2002 totaled $304,631,000,
versus $298,657,000 in the third quarter of 2002 and
$284,576,000 in the fourth quarter of 2001. Net loss for the
fourth quarter of 2002 totaled $16,207,000. Included in this
quarter's net loss is approximately $2.8 million in
restructuring charges and a gain on early retirement of debt of
$14,700,000. In the third quarter of 2002, the Company reported
a net loss of $102,325,000, reflecting $39.6 million in
restructuring charges associated with asset impairment. In the
fourth quarter of 2001, the Company's net loss was $31,568,000.

Revenues for the full year 2002 totaled $1,193,814,000, versus
$1,472,268,000 in 2001. Net loss for the full year 2002 totaled
$641,796,000, versus net loss of $418,348,000 on a fully diluted
basis in 2001. Included in the 2002 net loss is $383.8 million
in restructuring charges.

"While 2002 was a challenging year in the semiconductor
industry, we are pleased to have made substantial progress in
our restructuring program, and are positioning the Company to
succeed when market conditions improve," stated George Perlegos,
Atmel's President and Chief Executive Officer. "Our ASIC
business has performed well, particularly our wireless LAN, USB,
digital camera and cellular ICs. In addition, our proprietary
AVR microcontroller set a record in bookings during the year,
and we achieved key design wins in our smart card and security
IC businesses."

"During the fourth quarter, sales from the ASIC unit grew 5%
sequentially and accounted for approximately 34% of our
business. This represents the fourth consecutive quarter in
which this segment has grown.

"We also experienced strong sequential growth of 13% in our
microcontroller sales, which now represents 20% of overall
business. This unit continues to be driven by the strength of
our proprietary AVR product.

"Although sales in our RF business unit were relatively flat
from the fourth quarter, representing 18% of total revenues, we
anticipate that this segment will begin to grow based on the
strength of our SiGe technology for both GSM and CDMA platforms.

"During the fourth quarter, sales of memory products continued
to be impacted by pricing pressure, leading to a 5% sequential
decline. However, we are ramping production of high-density
flash, which should lead this unit to a return to growth mid-way
through 2003," concluded Mr. Perlegos.

                             Outlook

Looking ahead to the first quarter of 2003, revenues and
operating earnings should be essentially flat with a positive
EBITDA. Revenues for fiscal 2003 are anticipated to be between
$1.3 billion and $1.4 billion with EBITDA remaining positive
throughout the year.

Founded in 1984, Atmel Corp., is headquartered in San Jose,
Calif., with manufacturing facilities in North America and
Europe. Atmel designs, manufactures and markets worldwide,
advanced logic, mixed signal, nonvolatile memory and RF
semiconductors. Atmel is also a leading provider of system-level
integration semiconductor solutions using CMOS, BiCMOS, SiGe,
and high-voltage BCDMOS process technologies.

                         *    *    *

As previously reported, Standard & Poor's assigned its single-
'B' corporate credit rating to Atmel Corp.  At the same time,
Standard & Poor's assigned a triple-'C'-plus rating to Atmel's
$512 million zero coupon convertible subordinated debentures due
2021.

The current outlook is negative.

The ratings on San Jose, California-based Atmel reflect weak
market conditions, a high cost structure, and substantial near-
term cash obligations, offset in part by the company's moderate
business diversity and currently good liquidity.


B/E AEROSPACE: Tinkers with Bank Credit Agreement
-------------------------------------------------
B/E Aerospace, Inc., (Nasdaq:BEAV) amended its bank credit
agreement.

The amended agreement provides for:

     --  A credit facility of $135 million, decreasing to $120
         million as of December 2004, representing principal
         amortization of $15 million on January 23, 2003 and an
         additional $15 million on December 31, 2004,

     --  no further principal repayments until the bank credit
         facility expires in August 2006, and

     --  an interest rate ranging from 200 to 350 basis points
         over the Eurodollar rate as defined in the agreement,
         depending on the degree of leverage. The current rate
         is 4.5 percent.

Key financial covenants include:

     -- a leverage ratio ranging from 7.50 to 8.25 times EBITDA
        (as defined) during 2003, decreasing to 6.00 to 1 at
        December 31, 2004 with scheduled decreases thereafter,
        and

     -- interest coverage of 1.25 to 1 during calendar 2003,
        increasing to 2.00 to 1 during 2005, and scheduled
        increases thereafter.

Other provisions include limitations on the incurrence of
additional senior debt, as well as limitations on investments
and acquisitions. There were no significant changes to other key
provisions of the credit agreement.

"We believe the amended credit agreement provides the company
with significant operating flexibility," said Mr. Thomas P.
McCaffrey, Senior Vice President and Chief Financial Officer of
B/E Aerospace. "We are pleased to have completed the amendment
process in a timely manner."

On November 23, 2002 B/E had outstanding borrowings of $144.0
million under the facility, letters of credit totaling $5.6
million and cash and cash equivalents of $130.4 million.
JPMorgan Chase Bank is the administrative agent under the credit
agreement.

Data obtained from http://www.loandatasource.comshows that the
members of the lending syndicate are:

     * JPMorgan Chase Bank (formerly The Chase Manhattan Bank);
     * Bank of America, N.A.;
     * Credit Suisse First Boston;
     * First Union National Bank;
     * Merrill Lynch Capital Corporation;
     * The Bank of New York;
     * Credit Lyonnais, New York Branch; and
     * GE Capital Corporation.

B/E Aerospace, Inc., is the world's leading manufacturer of
aircraft cabin interior products, and a leading aftermarket
distributor of aircraft component parts. With a global
organization selling directly to the world's airlines, B/E
designs, develops and manufactures a broad product line for both
commercial aircraft and business jets and provides cabin
interior design, reconfiguration and conversion services.
Products for the existing aircraft fleet -- the aftermarket --
provide almost two-thirds of sales. For more information, visit
B/E's Web site at http://www.beaerospace.com

As previously reported in the Troubled Company Reporter,
Standard & Poor's assigned a BB+ rating to B/E Aerospace's $150
million credit facility.  However, the international rating
agency revised its ratings outlook to negative following the
September 11 terrorist attacks.


CALYPTE BIOMEDICAL: Issues 10% Unsec. Convertibles to Mercator
--------------------------------------------------------------
Calypte Biomedical Corporation issued a 10% Unsecured
Convertible Debenture due on January 14, 2004 in the sum of
$1,000,000 to Mercator Focus Fund LP. The Debenture was executed
on January 14, 2003. The Debenture is convertible at the option
of Mercator at 80% of the market price of the Company's common
stock at the average of the lowest three inter-day trading
prices during the 20 trading days immediately preceding the
applicable conversion date at any time after March 1, 2003. The
conversion price will not be higher than $.10 per share. The
Company and Mercator Focus have also agreed to limit Mercator
Focus’ ownership to below 9.999% of total outstanding
shares on a converted basis.

In connection with the Debenture, the Company granted cost-free
registration rights to Mercator Focus. The Company agreed to
file a registration statement within sixty days (March 14, 2003)
of closing of the debenture and use its best efforts to have the
registration statement declared effective within ninety (90)
days after its initial filing.

The Company paid a fee of $100,000 from the proceeds received in
the financing to Mercator Group, LLC for services rendered.
Additionally, upon funding, the Company redeemed in full a
$300,000 12% debenture dated October 22, 2002 issued to Mercator
Momentum Fund, L.P. and paid accrued interest and pre-paid
expenses for a total payment of $362,352.90 in connection with
the redemption. Upon conversion or exercise of the Debenture,
depending upon the trading price of the Company's common stock
at the time of conversion, the Company may not have sufficient
shares available for issuance to Mercator from its current
200,000,000 shares which are authorized, as the number of shares
reserved based upon prior financings and share commitments
exceed the number of shares authorized by the Company pursuant
to its Amended and Restated Certificate of Incorporation.

The Company has filed a Definitive Proxy Statement with the
Securities and Exchange Commission for a special meeting of
shareholders wherein it has requested stockholders approve an
increase of the 200,000,000 shares that are currently authorized
to 800,000,000 shares of $.001 par value common stock.

                          *   *   *

Subsequent to the above, Calypte Biomedical amended and
supplemented its Form 8-K Reports filed on November 12, 2002 and
December 10, 2002, as of December 23, 2002, with the SEC.

The November 12, 2002 8-K reported that the Company entered into
a financing agreement with Mercator Momentum Fund LP as of
September 12, 2002. The agreement with Mercator provided for a
credit facility up to the sum of $2,000,000 at 12% interest per
annum due on September 12, 2004 or in the event of sale or
merger of the Company. In connection with the Mercator financing
agreement, a debenture was issued to Mercator which further
provides for a conversion feature wherein Mercator could convert
principal and interest due on the debt obligation to shares of
common stock of the Company at the average of the lowest three
inter-day trading prices over the twenty (20) consecutive
trading days immediately prior to the conversion. The conversion
price is equal to eighty-five percent (85%) of the trading
market price, with a floor of $.05 per share. The terms of the
September 12, 2002 financing further provided for the Company to
pay a commitment fee of ten percent (10%) of the total credit
facility on closing of the initial $550,000 traunch.
Additionally, the Company further granted registration rights
for the underlying shares of the debenture and agreed to file a
registration statement within 45 days (October 28, 2002),
registering 200% of the amount of common stock necessary for
conversion of the initial funding ($550,000). The Agreement also
provided that, in the event of a default with respect to the
Company's failure to file a registration statement, which
registration statement is not approved within 90 days
thereafter, the Company shall issue to Mercator 10,000 shares of
the Company's common stock a day for the time of the default
until said default is corrected up to the lower of 18% per annum
or the highest rate permitted by law. The Company subsequently
amended the Mercator Debenture to extend the default in the
registration provision for an additional 45 days (December 11,
2002). The Company and Mercator entered into a further Amendment
to extend that date upon which to file a registration for the
aforementioned shares to January 21, 2003 and, thereafter, have
now agreed to extend the date to file a registration to February
18, 2003 as stated in the Amendment Agreement.

Additionally, and as a part of the Amendment Agreement entered
into with Mercator, the Company and Mercator agreed that the
prior conversion ($250,000) of a portion of the $550,000
Convertible-Debenture issued to Mercator on September 12, 2002
converted by Mercator into 3,726,029 shares of common stock on
October 24, 2002 would be rescinded and an amended Debenture
issued to Mercator in the sum of $250,000, and the 3,726,029
shares of common stock were returned to the Company's authorized
unissued shares, as the Company required the availability of
shares of common stock for corporate purposes. Additionally, the
Amendment sets forth the terms of the agreed to rescission.

The terms of the 12% Convertible Debenture dated October 22,
2002 have also been amended. In the original agreement, the
Company had agreed to file a registration for the underlying
shares for the 12% Convertible Debenture in the sum of $300,000
and for 3,000,000 warrant shares on or before January 21, 2003.
By the terms of the Amended Agreement, the time to file a
registration for the underlying shares has been extended through
February 18, 2003 to coincide with the time for the September
debenture.

As of September 30, 2002, the Company reported a working capital
deficit at about $2.9 million and a total shareholders equity
deficit topping $6.2 million.


CERES GROUP: Fitch Affirms Units' Low-B Fin'l Strength Ratings
--------------------------------------------------------------
A.M. Best Co., affirmed the financial strength ratings of B+
(Very Good) and B (Fair) for the primary insurance subsidiaries
of the Ceres Group Inc (Cleveland, OH) (NASDAQ: CERG).

The first rating applies to Continental General Insurance
Company (Nebraska) and Pyramid Life Insurance Company (Kansas),
while the second applies to Central Reserve Life Insurance
Company (Ohio). The negative rating outlook remains on
Continental General, while Pyramid Life and Central Reserve
Life's outlooks were changed to stable.

These rating actions reflect a reduction in operating losses
over the previous year as a result of recent actions taken by
the new management and the availability of a new source of
capital.

Capitalization at Continental General has been adversely
impacted as a result of operating losses in 2001 and 2002.
Additional capital is expected to be raised through the $56
million sale of Pyramid Life to Universal American Financial
Corp. (NasdaqNM: UHCO). The transaction is expected to close in
the first quarter of 2003 following regulatory approval. The net
proceeds from the sale will be used to improve Continental
General's capital position and repay a portion of the Ceres bank
debt. Failure to complete the sale will immediately impact the
rating as the proposed capital contribution is imperative for
meeting risk-based capital requirements in Nebraska.

Continental General's losses in 2002 stem from the individual
major medical business segment. The company has taken corrective
action by discontinuing new business in certain states. Going
forward, it will focus on selected products and markets that
have been historically profitable. A.M. Best retains a guarded
stance as to Continental General's risk of withdrawing from
these states as it could ultimately impact its capital position
again.

The rating of Central Reserve reflects the low level of capital
maintained at the company in relation to its risk profile.
However, due to the positive results reported through
September 30, 2002, A.M. Best views it as stable in the near
term. Additionally, losses associated with the runoff of the
individual major medical business of Central Reserve's
subsidiaries, United Benefit Life Insurance Company and
Provident American Life & Health Ins Co (both of Ohio) have
declined by reason of certain remedial actions undertaken by the
company.

Ceres expects to use a portion of the proceeds from the Pyramid
Life sale to repay debt on its bank credit facility and improve
the financial position of the holding company. Failure to
complete the Pyramid Life sale could impact Ceres' ability to
make future debt payments on its bank facility.

A.M. Best Co., established in 1899, is the world's oldest and
most authoritative insurance rating and information source. For
more information, visit A.M. Best's Web site at
http://www.ambest.com


COLD METAL: Earns Nod to Sell Equipment at Ohio & Conn. Plants
--------------------------------------------------------------
Cold Metal Products Inc., received U.S. Bankruptcy Court
approval to sell the equipment at its idled plants in New
Britain, Conn., and Youngstown, Ohio. National Machinery
Exchange, Newark, N.J., will purchase the equipment for
$606,000.

The court opened a competitive bidding process for the equipment
on December 17, 2002. No other bids were received.

"We're pleased to finalize this sale," said Raymond P. Torok,
president and CEO. "This is another step forward in our
reorganization process."

Cold Metal announced the closing of its New Britain plant
May 25, 2001. The Youngstown plant was idled August 15, 2002.

A leading North American intermediate strip steel processor,
Cold Metal Products provides a wide range of steel strip
products to meet the critical requirements of precision parts
manufacturers. Through cold rolling, annealing, normalizing,
edge conditioning, oscillate winding, slitting and cutting to
length, the company provides value-added products to
manufacturers in the automotive, construction, cutting tools,
consumer goods and industrial goods markets. Cold Metal Products
operates plants in Ottawa, Ohio; Detroit, Mich.; Indianapolis,
Ind.; Hamilton, Ontario; and Montreal, Quebec. The company
employs approximately 350 people.


CONSECO INC: Wants More Time to Make Lease-Related Decisions
------------------------------------------------------------
Anne Marrs Huber, Esq., at Kirkland & Ellis, relates that
Conseco Inc., and its debtor-affiliates are party to a number of
unexpired leases for non-residential real property.  The Leases
are important to the Debtors' ability to function as a going
concern and will factor into the ongoing process of evaluating
and consolidating their business operations.  The Debtors are
actively examining the Unexpired Leases to determine which ones
to assume or reject.

Under Section 365(d)(4) of the Bankruptcy Code, the initial 60-
day period within which the Debtors must assume or reject non-
residential real property leases expires on February 17, 2003.
However, the Debtors doubt they can finish their evaluation by
the February 17, 2003 deadline.

The Debtors need additional time to make careful and informed
decisions.  Additionally, any Purchaser of the CFC Debtors'
assets will need more time to assess which Unexpired Leases to
take by assignment.

Accordingly, the Debtors ask the Court to extend the lease
decision period to August 14, 2003.

Ms. Huber points out that decisions on Unexpired Leases involve
several factors.  A Lease may contain favorable terms that would
allow the Debtors to assume and assign it for value to the
estates.  Ms. Huber assures Judge Doyle that the extension will
not prejudice landlords because the Debtors will make the
required payments of monthly rent. (Conseco Bankruptcy News,
Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900)

Conseco Inc.'s 10.500% bonds due 2004 (CNC04USR2), DebtTraders
reports, are trading between 37 and 39. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CNC04USR2for
real-time bond pricing.


CONSOLIDATED CONTAINER: S&P Affirms B- Corporate Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' corporate
credit ratings on Consolidated Container Co., LLC and its wholly
owned subsidiary, Consolidated Container Capital Inc., and
removed them from CreditWatch following announcement that the
company has successfully amended its credit agreement.

Atlanta, Georgia-based Consolidated is a domestic producer of
rigid plastic containers for a variety of consumer products,
including dairy, water, foods, beverages, household and
agricultural chemicals, and motor oil. Total debt outstanding as
at September 30, 2002, was about $576 million. The current
outlook is stable.

"The actions follow Consolidated's announcement that it has
obtained an amendment to its credit agreement which provides a
measure of relief from liquidity and financial covenant
pressures, as well as onerous debt maturities", said Standard &
Poor's credit analyst Liley Mehta.

Standard & Poor's said that its ratings on Consolidated reflect
the company's very aggressive financial leverage and limited
financial flexibility, which overshadows its below-average
business position in relatively stable beverage and consumer
product markets.


CORNING INC: Fourth Quarter Results within Range of Guidance
------------------------------------------------------------
Corning Incorporated (NYSE:GLW) announced that its fourth-
quarter 2002 sales from continuing operations were $736 million
and sales from discontinued operations were $65 million.

The company reported a loss from continuing operations of $1.14
billion for the quarter. This loss includes restructuring,
impairment and other charges of $1.46 billion ($1.07 billion
after-tax) for the fourth quarter. In addition, Corning
recognized a pretax gain of $86 million ($53 million after-tax),
on the repurchase of debt during the quarter.

Corning's fourth-quarter income from discontinued operations of
$430 million, included the after-tax gain on the sale of its
precision lens business of $415 million. In total, Corning's net
loss for the quarter was $709 million.

James R. Houghton, chairman and chief executive officer, said,
"We achieved our goals for the fourth quarter. Our sales were in
the range of our guidance for the quarter. We completed a
significant portion of our previously announced restructuring
actions and we bolstered our liquidity position with the sale of
our precision lens business. We believe that these actions are
important building blocks as we drive toward our goal of
profitability in 2003."

                  Previously Announced Charges

In the fourth quarter, Corning recorded restructuring and
impairment charges totaling $1.46 billion ($1.07 billion after-
tax). This included:

     --  Charges of $652 million ($536 million after-tax)
related to restructuring actions for: the permanent closure of
Corning's optical fiber factories in Australia and Germany; the
mothballing of its optical fiber factory in Concord, N.C.; the
reductions in capacity and employment in the company's cable,
hardware and equipment and photonic technologies businesses; and
the impairment of Corning's portfolio of cost investments in the
telecommunications segment. The after-tax amount also included a
$20 million reduction in equity earnings primarily related to
restructuring and impairment charges at Samsung Corning Micro-
Optics Company Limited.

     --  A charge of $409 million ($239 million after-tax and
         minority interest) to impair plant and equipment in the
         company's conventional television tube glass and
         photonic technologies businesses.

     --  A goodwill impairment charge of $400 million ($294
         million after-tax) related to the telecommunications
         segment.

              Fourth-quarter Operating Results

Sales from continuing operations were $736 million compared to
the previous quarter's sales of $762 million. Telecommunications
segment sales were even with the third quarter due to stronger-
than-expected optical fiber shipments to Japan. Optical fiber
volume increased sequentially by approximately 6%. In the
Technologies segment, which combines the remainder of the
Information Display businesses and the Advanced Materials
businesses, sales declined from the third quarter primarily due
to expected seasonal slowdowns in the environmental and life
sciences businesses and lower sales in the conventional
television business.

Corning's Display Technologies business achieved record
shipments of liquid crystal display glass with sequential volume
gains of 6%. These volume increases were offset by the impact of
4% price declines and foreign exchange rates related to the
Japanese yen. The company said that the dramatic increase in LCD
monitor sales, steady growth in notebook computer purchases and
emerging popularity of LCD-TV resulted in a 45% year-to-year
increase in flat panel glass volume shipments. Corning said it
would continue to bring on additional LCD manufacturing capacity
in 2003 to meet anticipated market demand.

                       Full-Year Results

Corning's 2002 sales from continuing operations were $3.16
billion. The year's losses from continuing operations were $1.78
billion, or $1.85 per share. This includes restructuring and
impairment charges of $1.50 billion after-tax and minority
interest, or $1.45 per share, and a $0.12 per share reduction
for preferred dividends declared, offset by after-tax gains of
$108 million from the repurchase of debt. Income from
discontinued operations was $478 million, or $0.46 per share,
and included the gain on sale of the precision lens business of
$415 million after-tax. In total, Corning's net loss
attributable to common shareholders for the year was $1.43
billion, or $1.39 per share.

                        2002 Liquidity

Corning ended the fourth quarter with $2.09 billion in cash and
short-term investments, up from $1.60 billion at the end of the
third quarter. The increase in cash balances quarter-to-quarter
is primarily due to the net proceeds of approximately $800
million from the sale of the precision lens business. Corning
used $125 million in cash during the fourth quarter to retire
debt through open market purchases.

Corning retired $788 million in short, and long-term debt in the
past year and raised net proceeds of $442 million in connection
with the issuance of a 7.00% mandatory convertible preferred
stock offering. Corning ended the year with a debt-to-capital
ratio of 46.7%. Corning continues to have complete access to its
unused $2 billion revolving line of credit.

In January 2003, Corning used $158 million of cash to repurchase
debt through open-market purchase transactions.

                             Outlook

James B. Flaws, vice chairman and chief financial officer, said,
"We are pleased that 2002 is behind us. It was a difficult and
disappointing year for Corning's shareholders, our employees and
the communities in which we operate. The restructuring actions
we took throughout the past year have brought our cost structure
in line with business expectations. These actions will help us
achieve our goal of being profitable in 2003. We will continue
to strengthen our balance sheet by reducing debt. We intend to
invest in research and development in support of existing growth
businesses such as LCD, as well as emerging opportunities
including chemical processing and diesel emissions control."

Flaws said the company will provide first-quarter 2003 financial
guidance at its annual investor conference at the Pierre Hotel
in New York City on Friday, February 7, 2003 and simultaneously
via audio webcast. Investors will hear from Houghton, Flaws,
Corning's President and Chief Operating Officer Wendell P. Weeks
and Corning Technologies President Peter F. Volanakis.
Additional information on the conference can be found at the
company's investor relations site at http://www.corning.com

Established in 1851, Corning Incorporated (www.corning.com)
creates leading-edge technologies that offer growth
opportunities in markets that fuel the world's economy. Corning
manufactures optical fiber, cable and photonic products in its
Telecommunications segment. Corning's Technologies segment
manufactures high-performance display glass, and products for
the environmental, life sciences, and semiconductor markets.

                         *     *    *

As previously reported in the Troubled Company Reporter,
Standard & Poor's lowered its ratings on two synthetic
transactions related to Corning Inc., to double-'B'-plus from
triple-'B'-minus.

The lowered ratings follow the lowering of Corning Inc.'s long-
term corporate credit and senior unsecured debt ratings on July
29, 2002.

The two deals are both swap independent synthetic transactions
that are weak-linked to the underlying collateral, Corning
Inc.'s debt. The lowered ratings reflect the credit quality of
the underlying securities issued by Corning Inc.

                      RATINGS LOWERED

           Corporate Backed Trust Certificates Corning
               Debenture-Backed Series 2001-28 Trust

     $12.843 million corning debenture-backed series 2001-28

                               Rating
                  Class     To        From
                  A-1       BB+       BBB-

          Corporate Backed Trust Certificates Corning
              Debenture-Backed Series 2001-35 Trust

       $25.2 million corning debenture-backed series 2001-35

                               Rating
                  Class     To        From
                  A-1       BB+       BBB-


CRIIMI MAE: Completes $344 Million Recapitalization Transaction
---------------------------------------------------------------
CRIIMI MAE Inc., (NYSE: CMM) completed its $344 million
comprehensive recapitalization transaction that increases
financial flexibility, institutes new leadership and provides
the foundation for renewed growth.

The transaction, which closed in escrow on January 14, 2003,
became final Thursday after the proceeds were released from
escrow following the required five business-day notice under the
terms of the Company's previous secured recourse debt.

The Company used the proceeds of approximately $344 million,
together with available cash and liquid assets, to retire the
remaining $373 million of its recourse debt incurred in
connection with CRIIMI MAE's emergence from Chapter 11 in April
2001.

The recapitalization and refinancing included a total of
approximately $44 million in common equity and subordinated debt
provided by Brascan Real Estate Finance Fund, a private asset
management vehicle established by Brascan Corporation (NYSE:
BNN; Toronto: BNN.A) and a management team led by Barry S.
Blattman, and a $300 million secured financing, structured as a
repurchase transaction, by a unit of Bear, Stearns & Co., Inc.
(NYSE: BSC).

As had been previously announced as part of the closing, Barry
S. Blattman, Managing Partner of BREF, was named Chairman of the
Board and Chief Executive Officer of CRIIMI MAE. William B.
Dockser resigned his positions as Chairman and CEO, but will
remain a Director. H. William Willoughby, previously President
and a Director, resigned both positions.

As part of the closing, the Company's Board of Directors has
been expanded to nine directors. In addition to Mr. Blattman,
two previously announced new directors have joined the Board,
Mark R. Jarrell, Senior Vice President and head of the Debt
Group at The Community Development Trust, Inc., and Joshua B.
Gillon, Executive Vice President and General Counsel of Traffix,
Inc. (Nasdaq: TRFX).

Donald C. Wood, an outside Director, resigned to focus on his
duties as President and CEO of Federal Realty Investment Trust.
As a result of Mr. Wood's resignation, one vacancy currently
exists on the Board.

CRIIMI MAE Inc., is a commercial mortgage company based in
Rockville, Md. CRIIMI MAE holds a significant portfolio of
commercial mortgage-related assets and performs, through its
servicing subsidiary, mortgage servicing functions for $17.4
billion of commercial mortgage loans. During the late 1990s,
CRIIMI MAE was the largest buyer of subordinated commercial
mortgage-backed securities. It also originated commercial real
estate mortgages, pooled and securitized commercial mortgages
and executed three of the commercial real estate industry's
earliest resecuritization transactions.

The Brascan Real Estate Finance Fund is a private asset
management vehicle established by Brascan Corporation and a New
York-based management team led by Barry Blattman to acquire high
yield real estate investments. Brascan Corporation (NYSE: BNN;
Toronto: BNN.A) is a North American based company which owns and
manages assets which generate sustainable cash flows. Current
operations are largely in the real estate, power generation and
financial sectors. Total assets exceed $23 billion and include
55 premier commercial properties and 38 power generating
facilities. In addition, Brascan holds investments in the
resource sector. Brascan's publicly traded securities are listed
on the New York and Toronto stock exchanges.


CROWN CENTRAL: S&P Withdraws B+ Rating Due to Pending Asset Sale
----------------------------------------------------------------
Standard & Poor's Ratings Services has withdrawn its 'B+'
ratings on Crown Central Petroleum Corp.

The ratings for Maryland-based Crown Central were on CreditWatch
with developing implications, pending the sale of the company's
two refineries. Crown Central has recently announced that it is
pursuing the disposition of substantially all of the company's
assets.


DAIRY MART: Court OKs Wayne R. Walker as Liquidation Consultant
---------------------------------------------------------------
Dairy Mart Convenience Stores, Inc., and its debtor-affiliates
secured permission from the U.S. Bankruptcy Court for the
Southern District of New York to retain Wayne R. Walker as their
Liquidation Consultant, nunc pro tunc to January 6, 2003.

The official committee of unsecured creditors in these cases has
already selected Mr. Walker to serve as the trustee under the
Trust charged with implementing the Plan.  However, Dairy Mart
and the Creditors' Committee believe that retaining Mr. Walker
as a liquidation consultant even prior to the effectiveness of
the Plan would be the most efficient way of assuring that the
transition to the Trust under the terms of the Plan occurs as
smoothly as possible and that the distribution to Dairy Mart's
creditors in accordance with the provisions of the Plan commence
expeditiously.

Mr. Walker has extensive experience and expertise as a
liquidation trustee, plan administrator, and disbursing agent.
In this retention, Mr. Walker will be paid $235 per hour.

The Debtors assure the Court that Mr. Walker holds no interest
adverse to Dairy Mart or its estates, and Mr. Walker is a
"disinterested person" within the definition of the Bankruptcy
Code.

Dairy Mart Convenience Stores, Inc., filed for chapter 11
protection on September 24, 2001. Dennis F. Dunne, Esq., at
Milbank, Tweed, Hadley & McCloy LLP, represents the Debtors.
When the Company filed for protection from its creditors, it
listed debts and assets of over $100 million.


DYNEGY INC: Sells European Communications Assets to Klesch Unit
---------------------------------------------------------------
Dynegy Inc., (NYSE:DYN) announced the sale of its European
communications business to an affiliate of Klesch & Company, a
London-based private equity firm specializing in European
restructurings, for an undisclosed sum. Dynegy expects to report
a slight gain in the first quarter 2003 related to the sale.

Klesch & Company is acquiring Dynegy's entire European
communications operations consisting of a high-capacity
broadband network with access points in 32 cities throughout
Western Europe. The sale marks Dynegy's exit from the European
communications market - a business it established through its
purchase of iaxis Limited in early 2001.

"This is a strong first step in Dynegy's strategic commitment to
divest its investment in communications and focus on our core
energy businesses," said Dynegy Inc. President and Chief
Executive Officer Bruce Williamson. "The final phase of this
commitment is the exit from the U.S. portion of our
communications business. We expect full resolution on this issue
in early 2003."

Klesch & Company Chairman A. Gary Klesch said, "We believe that
the European telecommunications arena may be bottoming out.
Going forward, the sector has the potential to create value for
those who are able to restructure to meet current demand."

Dynegy Inc., owns operating divisions engaged in power
generation, natural gas liquids and regulated energy delivery.
Through these business units, the company serves customers by
delivering value-added solutions to meet their energy needs.

Klesch & Company, a private equity firm based in London,
specializes in investing in companies in need of restructuring.
Klesch & Company has, for over 12 years, invested in a variety
of industries from meat processing to cable television and from
paper production to leisure home manufacturing.

                         *     *     *

As previously reported, Dynegy Holdings Inc.'s senior unsecured
debt rating was downgraded to 'BB+' from 'BBB' by Fitch Ratings.
In addition, Fitch downgraded Dynegy Inc.'s indicative senior
unsecured debt to 'BB+' from 'BBB-'. The short-term ratings for
DYNH and DYN' have been lowered to 'B' from 'F3'. The ratings
for DYN and DYNH remain on Rating Watch Negative where they were
originally placed on Nov. 9, 2001. In addition, ratings for
affiliated companies, Illinois Power Co., and Illinova Corp.,
have been lowered and remain on Rating Watch Negative.


ENRON CORP: Court Approves Settlement Agreement with Scripps
------------------------------------------------------------
Enron North America Corp., sought and obtained Court approval of
their:

    (a) Settlement Agreement with E.W. Scripps Company;

    (b) assumption, assignment and sale of the Settlement
        Agreement to Compagnie Papiers Stadacona Ltee free and
        clear of liens, claims, encumbrances and interests.

Edward A. Smith, Esq., at Cadwalader, Wickersham & Taft, in New
York, relates that on May 1, 2001, ENA entered into the Standard
Newsprint Purchase and Sale Agreement -- the Original Agreement
-- with Scripps under which ENA promises to deliver 2000 metric
tons per month of 48.8 gram newsprints for five years ending
April 30, 2006.  In exchange, Scripps promised to pay ENA $585
per metric ton.

On January 28, 2002, Scripps notified ENA that it would
terminate the Original Agreement under the termination
provisions of the Original Agreement based on:

    (i) ENA's bankruptcy,

   (ii) alleged deficiencies in the quality of newsprint
        delivered, and

  (iii) alleged unauthorized shipments of newsprints by ENA.

Accordingly, on February 22, 2002, ENA responded that Scripps'
purported termination of the Original Agreement was invalid.

To resolve the dispute, Mr. Smith reports, ENA and Scripps
negotiated a settlement.  Accordingly, the Parties agreed to
enter into a settlement agreement that supersedes all prior
agreements between them.

The Settlement Agreement incorporates substantially all of the
terms of the Original Agreement, except that the price paid by
Scripps is reduced from $585 per metric ton to $562 per metric
ton, which price is higher than current market price over a
similar contract term, as attested by Eric Holzer, President of
Enron Industrial Markets LLC and an expert in the Newsprint
market.  By its terms, the Settlement cannot be terminated for
deficiencies in performance that precede the term of the
Settlement Agreement.  Furthermore, Scripps waives any right it
might otherwise have to terminate on the basis of ENA's ongoing
bankruptcy proceedings and both of the parties waive any claim
they may have for breach of the Original Agreement.

The Settlement Agreement, like the Original Agreement, provides
that the newsprint supplied will come from one of six specified
companies, including Stadacona.  In seeking an assignee of the
Settlement Agreement, ENA marketed the Agreement to three of the
six suppliers.  Only Stadacona expressed an interest in
receiving the assignment.

According to Mr. Smith, the Settlement Agreement will be
assigned to Stadacona, an indirect wholly owned subsidiary of
Enron Corp. through Sundance Limited Partners, LP, in which
Enron Industrial Markets GP Corp., a wholly owned subsidiary of
Enron Industrial Markets LLC, is the general partner.  ENA and
Stadacona agreed to an assignment of the Settlement Agreement
under the terms of:

    (i) a Newsprint Contract Purchase and Sale Agreement;

   (ii) a Bill of Sale and Assignment and Assumption Agreement
        wherein Stadacona will pay to ENA $1,258,000; and

  (iii) a Deed of Hypothec.

Mr. Smith contends that the Settlement Agreement falls within
the range of reasonableness, on the grounds that:

    (a) it avoids a continuing dispute and potential litigation
        with Scripps regarding whether the Original Agreement
        was validly terminated; and

    (b) it captures value for the estate for its creditors.

Moreover, Mr. Smith asserts, the assumption and assignment of
the Settlement Agreement is warranted because:

    (a) it relieves ENA the obligation to supply the Newsprint
        that has its market risks;

    (b) the assignment value -- 85% of the current mark-to-
        market value of the Settlement Agreement -- is higher
        than the current forward market prices for newsprints in
        the same period;

    (c) ENA is not aware of any lien relating to the Settlement
        Agreement; and

    (d) Stadacona is a good faith purchaser with the assignment
        negotiated at arm's length. (Enron Bankruptcy News,
        Issue No. 54; Bankruptcy Creditors' Service, Inc.,
        609/392-0900)


FANSTEEL INC: Lease Decision Period Extended through March 12
-------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, Fansteel, Inc., and its debtor-affiliates obtained an
extension of their lease decision period.   The Court gives the
Debtors until March 12, 2003, to determine whether to assume,
assume and assign, or reject their unexpired nonresidential real
property leases.

Fansteel Inc., a specialty metal manufacturer of engineered
metal components and tungsten carbide products, filed for
chapter 11 protection on January 15, 2002. Laura Davis Jones,
Esq., at Pachulski, Stang, Ziehl Young & Jones, represents the
Debtors in their restructuring efforts.  When the Company filed
for protection from its creditors, it listed $64,805,176 in
total assets and $91,585,665 in total debts.


FAO INC: Earns Go-Signal to Appoint Berger as Noticing Agent
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware put its
stamp of approval on FAO, Inc., and its debtor-affiliates'
application to appoint Robert L. Berger & Associates, LLC as
claims and noticing agent.

The Debtors submit that the retention of Berger as the claims
and noticing agent in these cases will promote the economical
and efficient administration of their estates. Employing Berger
will allow the Debtors to avoid duplication in claims
administration and in providing notices to their creditors.
Additionally, the large number of creditors and other parties in
interest involved in the Debtors' chapter 11 cases may impose
heavy administrative and other burdens upon the Court and the
Office of the Clerk of the Court. To relieve the Court and the
Clerk's Office of these burdens, the Debtors propose to engage
Berger.

Berger, at the request of the Debtors or the Clerk's Office,
will:

     (a) prepare and serve certain required notices in these
         chapter 11 cases, including:

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

          (ii) notice of the claims bar date;

         (iii) notice of objections to claims;

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

           (v) other miscellaneous notices to any entities, as
               the Debtors or the Court may deem necessary or
               appropriate for an orderly administration of
               these chapter 11 cases;

     (b) within 5 days after the mailing of a particular notice,
         file with the Clerk's Office a certificate or affidavit
         of service that includes a copy of the notice involved,
         an alphabetical list of persons to whom the notice was
         mailed and the date of mailing;

     (c) maintain copies of all proofs of claim and proofs of
         interest filed;

     (d) maintain official claims registers by docketing all
         proofs of claim and proofs of interest on claims
         registers, including the following information:

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

          (ii) the date received;

         (iii) the claim number assigned; and

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

     (e) assist the Debtors in the preparation of monthly
         operating reports to the Office of the United States
         Trustee and of its bankruptcy schedules and statements,
         including the creation and administration of a claims
         database based upon a review of the claims against the
         Debtors' estates and the Debtors' books and records;

     (f) implement necessary security measures to ensure the
         completeness and integrity of the claims registers;

     (g) transmit to the Clerk's Office a copy of the claims
         registers requested by the Clerk's Office on a more or
         less frequent basis;

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

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

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

     (k) comply with applicable federal, state, municipal and
         local statutes, ordinances, rules, regulations, orders
         and other requirements;

     (l) provide temporary employees to process claims, as
         necessary; and

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

Additionally, the Debtors employ Berger to assist with:

     (a) the preparation of amendments to the master creditor
         list;

     (b) administrative tasks relating to the reconciliation and
         resolution of claims; and

     (c) the preparation, mailing and tabulation of ballots for
         the purpose of voting to accept or reject a plan of
         reorganization.

Berger will bill at its normal hourly rates:

          Technical/Consulting &
            Executive Support        $ 95 to $285 per hour
          Programming                $100 to $145 per hour
          Clerical Support           $ 35 to $ 70 per hour

FAO, Inc., along with its wholly-owned subsidiaries, is a
specialty retailer of high-quality, developmental, educational
and care products for infants and children and high quality
toys, games, books and multimedia products for kids through age
12. The Company filed for Chapter 11 protection on January 13,
2003. Rebecca L. Booth, Esq., Mark D. Collins, Esq., and Daniel
J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A. and
David W. Levene, Esq., and Anne E. Wells, Esq., at Levene,
Neale, Bender, Rankin & Brill, represent the Debtors in their
restructuring efforts.  When the Company filed for protection
from its creditors, it listed $257,400,000 in total assets and
$238,374,000 in total debts.


FLEMING COS.: Slashes Net Debt to $2BB at Fiscal Year-End 2002
--------------------------------------------------------------
Fleming Companies, Inc., (NYSE: FLM) reported earnings from
continuing operations of $5.8 million for the fourth quarter of
2002. This compares to earnings from continuing operations for
the fourth quarter of 2001 of $8.6 million, which included
goodwill amortization of $3.4 million. Continuing operations
include Fleming's wholesale distribution business. Discontinued
operations include Fleming's price-impact retail stores, which
the company is in the process of divesting.

As the company reported January 14, 2003, the fourth quarter
results were impacted by numerous factors endemic to the
supermarket industry. A deflationary and promotional retail
environment and general softness in the economy affected
earnings. Operating expenses were negatively affected by higher
employment-related expenses such as pension, healthcare and
insurance costs.

Fleming also experienced certain costs in the fourth quarter,
including impairments associated with customer leases, start-up
costs associated with several new supply arrangements, expenses
associated with the integration of Core-Mark International, and
wind-down costs related to the company's exit from the Oklahoma
City Division. These costs totaled approximately $.19 per
diluted share.

For the full fiscal year 2002, Fleming reported earnings from
continuing operations of $40.2 million. This compares to
earnings from continuing operations for fiscal year 2001 of $9.0
million, which included goodwill amortization of $14.6 million.
EBITDAL (earnings before interest expense, taxes, depreciation,
amortization and LIFO) from continuing operations for the fourth
quarter and full fiscal year 2002 was $71.9 million and $322.3
million, respectively. EBITDAL from continuing operations for
the fourth quarter and full fiscal year of 2001 was $71.0
million and $251.9 million, respectively.

Sales from continuing operations for the fourth quarter and full
year 2002 were $4.08 billion and $15.50 billion, respectively.
This compares to sales from continuing operations for the fourth
quarter and full year 2001 of $3.46 billion and $13.23 billion,
respectively. Full-year 2002 sales from continuing operations
represent a 17 percent increase over 2001, largely due to the
acquisitions of the Core-Mark and Head Distributing businesses
and, to a lesser extent, new supply arrangements with
Albertson's, Target, and more than 100 supermarkets previously
supplied by wholesaler C.B. Ragland.

At fiscal year-end 2002, Fleming's net debt was approximately
$1.95 billion, compared with $2.16 billion at the end of the
third quarter 2002. Cash flow from operations in the fourth
quarter of 2002 was $181 million, compared to $113 million in
the fourth quarter of 2001 and $99 million in the fourth quarter
of 2000. The company intends to continue to focus on
strengthening its balance sheet by paying down debt. Fleming has
no material scheduled debt maturities due until 2007.

Fleming continues to be in compliance with all of its bank
covenants. In light of the fourth quarter EBITDAL results and
the anticipated amount and timing of the proceeds from the
retail store divestiture, the company secured an amendment to
the debt/EBITDA covenant in its credit agreement for the first
quarter of 2003. A copy of this amendment will be filed with the
Securities and Exchange Commission on Form 8-K. The company
plans to continue coordinating with the lenders in its credit
facility for an updated covenant package and structure that
better reflects Fleming's substantial current asset base.

"While our levels of earnings are not where we want them to be,
we did make substantial progress in a number of strategic areas
in 2002," said Fleming Chairman and Chief Executive Officer Mark
Hansen. "A highlight of 2002 was the acquisitions of Core-Mark
and Head Distributing, which allowed us to create a national
distribution footprint that efficiently serves retailers of any
format. Another key event of the year was our strategic decision
to divest our retail stores, allowing us to fully focus
resources on retail customers in our growing distribution
business.

"Operationally, we have continued to grow Fleming's business and
diversify our customer base. We also maintained our focus on
reducing costs and improving productivity to create a more
efficient operation, which we believe creates a competitive
advantage for our company. We are committed to continuing such
necessary improvements, to match the ever-changing needs of our
expanding customer base in today's rapidly evolving
marketplace," said Hansen.

            Kmart Status Update and Guidance Outlook

Kmart recently announced widely anticipated closings of 326
stores. In light of these planned closings, Fleming is currently
analyzing appropriate actions to adjust our distribution network
as well as the resources currently applied to supply Kmart's
stores. Fleming is also continuing discussions with Kmart
regarding necessary modifications to the supply relationship,
reflecting the changing realities of Kmart's business. This
could include amending the agreement on mutually beneficial
terms or the rejection of the contract through Kmart's
bankruptcy court process. Fleming is committed to taking the
appropriate actions that are in Fleming's best interests.

Fleming intends to provide updated sales and earnings guidance
for 2003 upon completion of the analysis and discussions with
Kmart. Guidance will also reflect the current weakness in the
nationwide retail environment, Fleming's previously announced
divestiture of its company-owned retail operations, and the
actions Fleming will take to adjust its internal operations as
appropriate in response to these and other market conditions.

With its national, multi-tier supply chain network, Fleming is
the #1 supplier of consumer package goods to retailers of all
sizes and formats in the United States. Fleming serves nearly
50,000 retail locations, including supermarkets, convenience
stores, supercenters, discount stores, concessions, limited
assortment, drug, specialty, casinos, gift shops, military
commissaries and exchanges and more. Fleming serves more than
600 North American stores of global supermarketer IGA. To learn
more about Fleming, visit its Web site at http://www.fleming.com

Fleming Companies' 5.250% bonds due 2009 are presently trading
at about 48 cents-on-the-dollar.


FREEPORT-MCMORAN: S&P Rates $250 Mil. Sr. Unsecured Notes at B-
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' rating to
Freeport-McMoRan Copper & Gold Inc.'s $250 million of senior
unsecured notes.

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

Proceeds from the offering will be used to repay borrowings
under its bank credit facilities, which would then allow
Freeport-McMoRan to use amounts under its facilities, along with
cash to redeem its gold-denominated preferred stock, which is
mandatorily redeemable in August 2003. "Freeport-McMoRan would
have been restricted under its bank facility from paying
dividends or redeeming any of its preferred stock if it did not
extend the maturity on 80% of the gold-denominated preferred
stocks beyond 2005", said Standard & Poor's credit analyst
Dominick D'Ascoli. "This deal will relieve them of that
restriction".

Standard & Poor's said that its ratings on Freeport McMoRan
reflect the risks of operating in the Republic of Indonesia, its
low production costs, and very aggressive debt leverage.


FRIENDLY ICE CREAM: Donald Smith Discloses 9.6% Equity Stake
------------------------------------------------------------
Donald N. Smith beneficially owns 9.6% of the outstanding common
stock of Friendly Ice Cream Corporation represented in the
707,178 shares of common stock he holds, over which he has sole
voting and dispositive powers.

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

DebtTraders reports that Friendly Ice Cream Corporation's
10.500% bonds due 2007 (FRN07USR1) are trading at 96 and 97. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=FRN07USR1for
real-time bond pricing.


GENERAL DATACOMM: Seeks Exclusivity Extension through March 3
-------------------------------------------------------------
General DataComm Industries, Inc., and its affiliated debtors
ask the U.S. Bankruptcy Court for the District of Delaware to
further extend their time to propose and file a plan of
reorganization and solicit acceptances of that plan from their
creditors -- and bar any other party-in-interest from filing an
alternative plan.

Since the company's previous request for an extension of their
Exclusive Periods, the Debtors say they've been diligently
preparing, revising and finalizing all of the documents
necessary to file and prosecute a consensual plan, and are in
the process of providing those documents to the Committee and
the Lenders for their review and comment.

The Debtors submit that they have made substantial progress
since the commencement of these chapter 11 cases by:

     * stabilizing and rebuilding their operations,

     * implementing substantial cost-cutting measures,

     * improving cash-flow, increasing their collateral base,
       and

     * successfully administrating their chapter 11 cases.

These efforts by management and the professionals have enabled
the Debtors to reach the global settlement with the Lenders and
the Committee, and to pursue a consensual chapter 11 plan.

The Debtors explain that termination of the Exclusive Periods at
this juncture, after the Debtors, the Committee, and the Lenders
have worked so diligently to prepare and finalize a consensual
chapter 11 plan, would inevitably disrupt the Debtors'
businesses and reduce the likelihood of a successful
reorganization.  Accordingly, the Debtors ask the Court to
extend their exclusive plan filing period through March 3, 2003,
and extend the company's exclusive time to solicit acceptances
of that plan through May 3, 2003.

General DataComm Industries, Inc., a worldwide provider of wide
area networking and telecommunications products and services,
filed for Chapter 11 protection on November 2, 2001. James L.
Patton, Esq., Joel A. Walte, Esq., and Michael R. Nestor, Esq.,
represent the Debtors in their restructuring efforts. In their
July 2002 monthly report on form 8-K filed with SEC, the Debtors
account $19,996,000 in assets and $77,445,000 in liabilities.


GE HOME EQUITY: Fitch Drops Class B-1 Notes Rating to D from CCC
----------------------------------------------------------------
Fitch Ratings takes rating actions on the following GE Home
Equity mortgage pass-through certificates:

    GE Home Equity 1997-HE 1:

    --Classes A-4, A-5 affirmed at 'AAA';
    --Class M downgraded to 'A' from 'AA' Rating Watch Negative;
    --Class B-1 downgraded to 'D' from 'CCC'.

These actions are taken due to the level of losses incurred and
the high delinquencies in relation to the applicable credit
support levels as of the Dec. 25, 2002 distribution date.

These deals will again be reviewed within the next 6 months.


GENCORP INC: Says 2002 Results Reflect Performance Improvements
---------------------------------------------------------------
GenCorp Inc., (NYSE: GY) reported net income for 2002 of $30
million compared to net income of $128 million for 2001. Results
for 2002 reflect performance improvements in the Company's
operations, driven by lower cost structures for GDX Automotive
and Fine Chemicals, increased sales for Aerospace and Defense
and Fine Chemicals, and improved production efficiencies at GDX
Automotive and Fine Chemicals. The decline in earnings from 2001
reflects several events that improved earnings in 2001 and
reduced earnings in 2002, and lower income from employee
retirement benefit plans. The most significant of these events
were sales of the Company's space electronics business and 1,100
acres of Sacramento land, both in the fourth quarter of 2001.
Sales for 2002 totaled $1.1 billion compared to $1.5 billion in
2001, which included $398 million in sales from the EIS
business.

Net income for the fourth quarter totaled $13 million for 2002
compared to net income of $106 million for 2001. Sales for the
fourth quarter in 2002 were $317 million, compared to $367
million reported in 2001.

Our guidance for the year was the lower end of $0.90 to $1.00
per share excluding unusual items and restructuring charges,
which totaled $17 million for 2002. On this basis the company
met its guidance at the low end of the range of $0.90 per share.

"We are pleased with our 2002 operating performance and our
earnings, which were in accordance with our earlier guidance,"
said Terry L. Hall, president and CEO. "Both our GDX Automotive
and Fine Chemicals businesses returned to profitability in 2002,
successfully implementing restructuring programs which improved
their cost structures. We anticipate both of these businesses
continuing to improve their profitability in 2003.

"At our Aerospace and Defense business, Aerojet, we saw solid
operating performance with revenues up $63 million when compared
to 2001, excluding sales from our former EIS business and a 2001
real estate sale. In 2002 we took a major step in our goal to
grow this business by acquiring General Dynamics Space
Propulsion and Fire Suppression business. In 2003 we anticipate
continuing to grow our Aerospace and Defense business. We were
pleased this December when Aerojet's liquid propulsion
Exoatmospheric Kill Vehicle as selected by the U.S. Missile
Defense Agency for the nation's first defensive missile
deployment. We are waiting for announcements regarding volume
and production schedules to determine the revenue impact of this
decision.

"In 2002 we reached a major milestone in our real estate
strategy when we completed the successful release of
approximately 2,600 acres from the Aerojet Superfund Site
designation. Our goal is to develop our real property to
maximize the value embedded in these assets by selling or
leasing parcels for development by others or through developing
the property, alone or in conjunction with one or more partners.
During the year, we added real estate professionals to our
management team to help us execute our real estate strategy,"
concluded Mr. Hall.

                       Operations Review

GDX Automotive

GDX Automotive returned to profitability in 2002, with operating
profit improving to $38 million, compared to an operating loss
of $4 million in 2001. Excluding a decrease in income from
employee retirement benefit plans, operating profit for the
segment increased by $48 million in 2002 compared to the prior
year. In 2001, GDX Automotive initiated restructuring programs
to lower production costs and improve efficiency. Benefits from
these programs were realized in 2002 with improvement in
manufacturing costs (labor, overhead and scrap). Also
contributing to improved results were further integration and
consolidation of the Draftex acquisition and improvements in
asset management. Operating income was adversely impacted by a
pricing concession of $21 million to GDX Automotive's major
customers and a $6 million decline in income from employee
retirement benefit plans. Sales were $806 million in 2002,
essentially unchanged from 2001 ($808 million). Sales increases
resulting from favorable exchange rate impacts were offset by
$21 million in pricing concessions to GDX Automotive's major
customers.

Operating profit for the fourth quarter in 2002 was $13 million
compared to a loss of $3 million for the prior year quarter. The
improved earnings reflect the effects of restructuring
activities initiated in 2001. Fourth quarter sales for GDX
Automotive were $217 million compared to $210 million in 2001.

Aerospace and Defense

In October 2002, Aerojet completed the previously announced
acquisition of GDSS from General Dynamics' Ordnance and Tactical
Systems Division for cash of $93 million, including transaction
costs.

Operating profit for the Aerospace and Defense segment was $59
million for 2002, compared to $131 million in 2001. Excluding
results of the EIS business, gain on the real estate sale, and a
decrease in income from employee retirement benefit plans,
operating profit for the segment increased by $5 million in 2002
compared to the prior year. Aerojet's sales totaled $277 million
for 2002, compared to $640 million in 2001. Excluding results of
the EIS business and the real estate sale, sales for the segment
increased $63 million in 2002 compared to the prior year. The
increase is attributable to the delivery of a NASA X-38 DeOrbit
Propulsion Stage, Aerojet's work on the COBRA booster engine,
the GDSS acquisition, and other programs.

Fourth quarter operating profit in 2002 was $15 million compared
to $45 million in 2001. Excluding the results of the EIS
business, gain on a real estate sale, and a decrease in income
from employee retirement benefit plans, the operating profit for
the segment increased by $3 million as compared to the fourth
quarter of 2001. Fourth quarter sales for Aerojet were $76
million as compared to $129 million for the comparable quarter
in 2001. Excluding EIS and the real estate sale, sales for the
fourth quarter of 2002 increased $25 million over fourth quarter
2001, due largely to increased volume in missile defense and
armaments programs, and the GDSS acquisition.

As of November 30, 2002, Aerojet's contract backlog was $773
million. Funded backlog, which includes only the amount of those
contracts for which money has been directly authorized by the
U.S. Congress, or for which a firm purchase order has been
received by a commercial customer, was approximately $416
million as of November 30, 2002. Aerojet was recently notified
that funding for the Titan program will be restructured in 2003
reducing Aerojet's funded backlog by $58 million with no change
to total contract backlog; Aerojet expects this funding to be
incrementally restored in future years.

Fine Chemicals

Fine Chemicals' operating profit for 2002 was $3 million
compared to an operating loss of $14 million for 2001. The
significant improvement in Fine Chemicals' financial performance
reflects its success in recent strategic sales initiatives, the
benefit of volume-related production efficiencies, and a
restructuring of its operations in late 2001. Fine Chemicals'
2001 financial performance was adversely affected by the cost of
start-up activities and production inefficiencies associated
with the launch of several new products.

Sales for Fine Chemicals totaled $52 million in 2002, compared
to $38 million for 2001. The improved sales volume in 2002
results from improved sales and marketing strategies and
increased sales from new products launched in 2001.

Fourth quarter operating profit for Fine Chemicals totaled $4
million compared to $1 million in the prior year, reflecting the
benefit of 2001 restructuring activities and higher margin
products. Sales for the quarter totaled $24 million compared to
$28 million reported in the prior year's fourth quarter.

Other Information

Interest expense decreased to $16 million in 2002 from $33
million in 2001 due to lower debt levels and lower interest
rates. Average debt balances during 2002 were approximately $285
million compared to $408 million during 2001. The Company's
average interest rates decreased to 5.2 percent in 2002 from 7.7
percent in 2001. Long-term debt increased from $214 million as
of November 30, 2001 to $387 million as of November 30, 2002 due
to the acquisition of GDSS and increased working capital
requirements, including requirements for Aerojet programs.

Corporate and other expenses in 2002 were $25 million compared
to $4 million in 2001. The increase in 2002 is due primarily to
$7 million in costs for the accounting review related to the
restatement of prior years' financial results, as announced
March 6, 2002, and lower income from employee retirement plans
of $6 million. Also, corporate and other expenses in 2001
included a gain of $11 million related to the settlement of
foreign currency forward contracts. Corporate and other expenses
included amortization of debt financing costs of $4 million in
2002 and $3 million in 2001.

The Company's effective tax rate in 2002 was 28 percent compared
to 32 percent in 2001. The Company's tax provision in 2002 was
favorably impacted by income tax settlements and a charitable
gift of real property.

                    Business Outlook

The Company expects net earnings in 2003 to be lower than 2002
primarily attributable to the decrease in pre-tax income from
employee retirement benefit plans of $37 million in 2002 to a
minimal amount of income or expense for 2003. The Company
expects diluted earnings per share for 2003 to be in the range
of $0.41 to $0.46 per share and for the first quarter to be in
the range of $0.04 to $0.06 per share. Excluding income from
employee retirement benefit plans, the Company expects 2003 net
earnings from operations to increase by approximately 20 percent
over 2002.

The Company's GDX Automotive segment is forecasting 2003 sales
to be in the range of $700 to $730 million. This forecast
reflects a reduction when compared to 2002 sales, and is driven
primarily by a combination of anticipated OEM price reductions
and the discontinuation of unprofitable platforms. GDX
Automotive expects its segment operating profit margins to be
between 5.5 percent and 7.0 percent in 2003. GDX Automotive
expects to continue realizing production efficiencies from its
continuing consolidation and integration efforts. However,
results are largely dependent on vehicle sales and production
rates associated with platforms for which the segment provides
parts.

The Company's Aerospace and Defense segment is forecasting 2003
sales to be in the range of $265 to $275 million. Expected 2003
sales increases are partially offset by NASA funding issues,
which resulted in the cancellation of the COBRA booster engine
program. In addition, fiscal 2002 sales included sales from a
NASA X-38 De-Orbit Propulsion Stage contract, which was
completed in 2002. Aerojet's projected 2003 segment operating
profit margin is expected to be between 11.0 percent and 13.0
percent.

The Company's Fine Chemicals segment is forecasting 2003 sales
in the range of $52 million to $57 million and operating margins
between 6.5 percent and 8.5 percent. During 2002, Fine
Chemicals' increased production volumes and focus on improving
operational and manufacturing efficiencies yielded improved
operating margins, a trend that is expected to continue into
2003.

Interest expense is forecasted to total $22 million to $26
million in 2003. A portion of the Company's debt carries
variable interest rates; material changes in interest rates
could impact this forecast.

The tax rate for 2003 is expected to be approximately 38 percent
compared to 28 percent in 2002.

Depreciation and amortization is expected to be in the range of
$67 million to $70 million in 2003.

Capital spending is expected to be in the range of $50 million
to $60 million in 2003.

GenCorp is a multi-national, technology-based manufacturer with
operations in the automotive, aerospace, defense and
pharmaceutical fine chemicals industries. Additional information
about GenCorp can be obtained by visiting the Company's Web site
at http://www.GenCorp.com

As previously reported in Troubled Company Reporter, Standard &
Poor's assigned its preliminary double-'B' and single-'B'-plus
ratings to senior unsecured and subordinated debt securities,
respectively, filed under GenCorp Inc.'s $300 million SEC Rule
415 shelf registration.

At the same time, Standard & Poor's affirmed its existing
ratings on GenCorp, including the double-'B' corporate credit
rating. The outlook is stable.


GENUITY INC: Asks Court to Approve Asset Abandonment Procedures
---------------------------------------------------------------
Don S. DeAmicis, Esq., at Ropes & Gray, in Boston,
Massachusetts, tells the U.S. Bankruptcy Court for the Southern
District that Genuity Inc., and its debtor-affiliates fully
intend to take all reasonable steps in selling the De Minimis
Assets for the benefit of their estates.  Nevertheless, certain
De Minimis Assets may be of inconsequential value to the
Debtors' estates where:

    -- these assets are out-dated or broken and non-repairable;

    -- the costs associated with a sale of these assets may
       exceed the economic benefit generated; or

    -- the Debtors are unable to find a buyer for the assets
       because the assets are damaged or located on premises
       which the Debtors no longer occupies.

Under these circumstances, maintaining and storing these De
Minimis Assets would result in undue cost and burden to the
Debtors' estates.  Accordingly, in the event a sale of De
Minimis Assets is not feasible, the Debtors request authority to
abandon De Minimis Assets pursuant to Sections 554 and 105 of
the Bankruptcy Code in accordance with these procedures:

    A. the Debtors will give notice, via e-mail, facsimile or
       overnight delivery service, of each proposed abandonment
       to the Notice Parties and to any and all parties known to
       the Debtors as holding or asserting an interest in the De
       Minimis Assets to be abandoned.  In accordance with Local
       Bankruptcy Rule 6007-1, the notice will describe the De
       Minimis Assets to be abandoned, the reason for the
       abandonment, the parties known to the Debtors as having
       an interest in the property to be abandoned, and the
       entity to which the De Minimis Assets are to be
       abandoned;

    B. the Abandonment Notice Parties will have 5 business days
       from the date on which the Abandonment Notice is sent to
       object to, or request additional time to evaluate, the
       proposed abandonment.  All objections or requests will be
       in writing and delivered to:

          Genuity Inc.
          225 Presidential Way, Woburn, MA 01801
          Attn: Ira H. Parker

                and

          the Debtors' counsel, Ropes & Gray
          One International Place, Boston, MA 02110
          Attn: Don S. DeAmicis.

       If no written objection or request for additional time is
       received by Genuity Inc. and Ropes & Gray within the 5-
       day period, the Debtors will be authorized to abandon the
       De Minimis Assets;

    C. if any Abandonment Notice Party provides a written
       request to Genuity Inc. and Ropes & Gray for additional
       time to evaluate the proposed abandonment, the
       Abandonment Notice Party will have an additional 10
       calendar days to object to the proposed abandonment.  The
       Debtors may abandon promptly abandon the property after
       obtaining approval of the Abandonment Notice Parties who
       have requested additional time;

    D. if any Abandonment Notice Party submits a written
       objection to the proposed abandonment so that the
       objection is received by Genuity Inc. and Ropes & Gray on
       or before the fifth business day after the Abandonment
       Notice is sent, the Debtors and the objecting Abandonment
       Notice Party will use good faith efforts to resolve the
       objection.  If the Debtors and the objecting Abandonment
       Notice Party are unable to achieve a resolution, the
       Debtors will not proceed with the proposed abandonment
       without Court approval, after notice and a hearing; and

    E. nothing will prevent the Debtors, in their sole
       discretion, from seeking the Court's approval at any time
       of any proposed abandonment after notice and a hearing.

The Debtors further request authority to execute and deliver all
instruments and documents, and take all other actions as may be
necessary or appropriate to implement and effectuate the
Abandonment Procedures as approved by this Court.

In the event a sale of the De Minimis Assets is not feasible,
the Abandonment Procedures achieve the same objective by
enabling the Debtors to relieve themselves of burdensome,
useless property that is of inconsequential value to the
Debtors' estates for which the Debtors' would otherwise be
required to incurs the costs of storage and removal.  See 11
U.S.C.  554 (a debtor-in-possession, "after notice and a
hearing... may abandon any property of the estate that is
burdensome to the estate or that is of inconsequential value and
benefit to the estate.")(Genuity Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


GENUITY INC: Court Approves Asset Purchase Deal with Level 3
------------------------------------------------------------
Genuity Inc., announced that the United States Bankruptcy Court
for the Southern District of New York has approved the
acquisition of substantially all of the company's assets and
operations by Level 3 Communications (Nasdaq:LVLT). As part of
the court approval process, a number of outstanding objections
also have been resolved, including the settlement of the lawsuit
between Genuity and Deutsche Bank. With Friday's court decision,
the acquisition is expected to be completed in February.

"This is a major step toward the completion of this
transaction," said Paul R. Gudonis, Genuity's chairman and CEO.
"Now that the court has approved the acquisition of Genuity by
Level 3, we can enter the next critical phase of the transaction
- integration. As we move through the integration process, we
will continue to focus on what we do best - delivering top-
quality Internet services to our thousands of customers."

In addition to gaining court approval, Genuity also announced
its staffing plans as it prepares for integration with Level 3.
By the time the sale closes, Genuity will reduce its employee
headcount by 700-800 of its current 2,300-person work force.
Upon the closing of the transaction, it is expected that
approximately 1,400-1,500 Genuity employees will be offered
positions with Level 3. Employees who join Level 3 will become
part of a transitional organization that is intended to help
facilitate a smooth integration. Final decisions on the number
of permanent positions with Level 3 will be determined once the
organizational structure of the company is formalized.

Additionally, a small number of Genuity employees will continue
to work for the Genuity Estate for a limited period of time
after the sale to Level 3 is complete. During this period, the
Estate will work with the court to finalize its obligations.

"One of Genuity's strengths has always been the talent and
dedication of its employees, which makes the need to reduce our
work force that much more difficult," added Gudonis. "While one
of our priorities has been to find a solution that preserves the
most jobs possible, we also have to deal with the realities of
the Chapter 11 process. That is why we fought very hard to
ensure that all employees included in the upcoming reduction
will receive severance benefits."

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

The transaction remains subject to certain additional regulatory
approvals and other customary closing conditions.

Genuity is a leading provider of enterprise IP networking
services. The company combines its Tier 1 network with a full
portfolio of managed Internet services, including dedicated and
broadband access, Internet security, Voice over IP, and Web
hosting to provide converged voice and data solutions. With
annual revenues of more than $1 billion, Genuity (NASDAQ: GENUQ
and NM: Genuity A-RegS 144) is a global company with offices and
operations throughout the U.S., Europe, Asia and Latin America.
Additional information about Genuity can be found at
http://www.genuity.com


GLASSTECH HOLDING: Delaware Court Confirms Reorganization Plan
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware confirmed
Glasstech Holding Co., and Glasstech, Inc.'s Plan of
Reorganization after finding that the Plan complies with each of
the 13 standards articulated in Section 1129 of the Bankruptcy
Code:

     (1) the Plan complies with the Bankruptcy Code;
     (2) the Debtors have complied with the Bankruptcy Code;
     (3) the Plan was proposed in good faith;
     (4) all plan-related cost and expense payments are
         reasonable;
     (5) the Plan identifies the individuals who will serve as
         officers and directors post-emergence;
     (6) all regulatory approvals that are necessary have been
         obtained or are respected;
     (7) creditors receive more under the plan than they would
         in a chapter 7 liquidation;
     (8) all impaired creditors have voted to accept the Plan,
         or, if they voted to reject, then the plan complies
         with the absolute priority rule;
     (9) the Plan provides for full payment of Priority Claims;
    (10) at least one non-insider impaired class voted to accept
         the Plan;
    (11) the Plan is feasible and confirmation is unlikely to be
         followed by a liquidation or need for further financial
         reorganization;
    (12) all amounts owed to the Clerk and the U.S. Trustee will
         be paid; and
    (13) the Plan provides for the continuation of all retiree
         benefits in compliance with 11 U.S.C. Sec. 1114.

Any executory contracts or unexpired leases, which have not
expired by their own terms shall be deemed rejected by the
Debtors on the Effective Date.  All executory contracts and
unexpired leases listed in the Schedule of Assumed and Assumed
and Assigned Executory Contracts and Unexpired Leases, shall be
deemed assumed by the Debtors on the Effective Date.

On the Effective Date all of the property of the Debtors'
Estates is vested in the Reorganized Debtor.  The Reorganized
Debtor shall continue to exist after the Effective Date as a
separate corporate entity with all the powers of a corporation
under the state of incorporation.

Glasstech Holding Co., designs and assembles glass bending and
tempering systems that are used by glass manufacturers and
processors in the conversion of flat glass into safety glass.
The Company filed for Chapter 11 protection on January 30, 2002.
Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl Young &
Jones, represent the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed over $50 million in both estimated assets and
liabilities.


GLOBAL CROSSING: Continues to Meet Key Performance Goals in Nov.
----------------------------------------------------------------
Global Crossing continued to meet key performance targets during
November 2002. The performance targets were established for
Global Crossing (excluding Asia Global Crossing) in the
operating plan presented to its creditors in March 2002. The
Operating Results that compare to that plan are described in the
following section of this press release.

Consolidated results for the month of November reported in the
Monthly Operating Report filed with the U.S. Bankruptcy Court in
the Southern District of New York are summarized later in this
press release. The MOR includes consolidated results for Asia
Global Crossing Ltd. and its subsidiaries through November 17,
2002. As described in the accompanying notes to this press
release, Global Crossing has deconsolidated the results of
operations of Asia Global Crossing Ltd., and its subsidiaries
effective November 18, 2002.

                     OPERATING RESULTS
              (excluding Asia Global Crossing)

"Global Crossing continues to fulfill the goals we set in our
operating plan last March," said John Legere, CEO of Global
Crossing. "We have posted solid results and look forward to
closing the 2002 books with a positive trend -- one of financial
and operational strength and viability."

In November 2002, Global Crossing reported Service Revenue of
$229 million, $25 million above the monthly Service Revenue
target set forth in the operating plan. In November, Service
EBITDA was reported at a deficit of $9 million, in line with the
operating plan.

"Our cash in bank accounts has increased and stands at $745
million -- the highest month-end balance since July 2002," said
Dan Cohrs, Global Crossing's CFO. "In fact, throughout the past
year we have maintained a secure cash position and stable
revenues, while exercising tight control over our operating
expenses."

Total cash in bank accounts exceeded targets set forth in the
operating plan, with $745 million as of November 30, 2002,
compared to a plan of $551 million. Operating expenses were on
target with the operating plan at $60 million in November, while
third-party maintenance costs were reported at $7 million in
November, beating the operating plan by $8 million.

                  MOR Results for November 2002

Global Crossing today filed a Monthly Operating Report for the
month of November with the U.S. Bankruptcy Court for the
Southern District of New York, as required by its Chapter 11
reorganization process. The consolidated results report revenue
according to accounting principles generally accepted in the
United States of America (US GAAP). US GAAP revenue includes
revenue from sales of capacity in the form of indefeasible
rights of use that occurred in prior periods, recognized ratably
over the lives of the relevant contracts. Beginning on
November 1, 2002, Global Crossing ceased recognizing revenue
from exchanges of leases of capacity.

The MOR includes consolidated results for Asia Global Crossing
Ltd. and its subsidiaries through November 17, 2002. As
described in the accompanying notes to this press release,
Global Crossing has deconsolidated the results of operations of
Asia Global Crossing and its subsidiaries effective November 18,
2002.

Results reported in the November MOR include the following:

For continuing operations in November 2002, Global Crossing
reported consolidated revenue of approximately $239 million.
Consolidated operating expenses were $65 million, while access
and maintenance costs were reported at $184 million in November
2002.

In addition, Global Crossing reported a consolidated US GAAP
cash balance (excluding Asia Global Crossing) of approximately
$714 million as of November 30, 2002. The consolidated US GAAP
cash balance is comprised of $320 million in unrestricted cash,
$333 million in restricted cash and $61 million of cash held by
Global Marine.

Global Crossing reported a consolidated net loss of $32 million
for November 2002. Included in that net loss is non-operating
income of $59 million resulting from the termination of certain
pre-paid long-term lease agreements for services on the Global
Crossing network. These agreements were terminated either
through customer settlement agreements or through the bankruptcy
proceedings of the customers that had purchased such services
from Global Crossing. As a result of these terminations, Global
Crossing is no longer obligated to provide the applicable
services for which the customers had already paid, so deferred
revenue of $59 million, representing Global Crossing's
obligation to provide such services, was realized into income,
but was not recognized as revenue.

Consolidated EBITDA was reported at a loss of $10 million.

On November 18, 2002, Asia Global Crossing Ltd., a majority-
owned subsidiary of Global Crossing, and its subsidiary, Asia
Global Crossing Development Co., commenced Chapter 11 cases in
the United States Bankruptcy Court for the Southern District of
New York and coordinated proceedings in the Supreme Court of
Bermuda. Asia Global Crossing's bankruptcy proceedings are being
administered separately from and are not being consolidated with
Global Crossing's proceedings. Asia Global Crossing has
announced that no recovery is expected for Asia Global
Crossing's shareholders. As a result, effective November 18,
2002, Global Crossing deconsolidated the financial results of
Asia Global Crossing and its subsidiaries and began reporting
the net assets of Asia Global Crossing as an investment using
the cost method. The results of operations reported in the
November MOR include the results of Asia Global Crossing and its
subsidiaries through November 17, 2002. Asia Global Crossing's
operating results subsequent to November 17, 2002 and its
financial position as of November 30, 2002 are not reflected in
Global Crossing's consolidated and consolidating financial
statements included in the November MOR.

On October 21, 2002, Global Crossing announced that it would
restate certain financial statements contained in filings
previously made with the SEC. These restatements, which are more
fully described in footnote one to the financial statements
contained in the November MOR, will record exchanges between
carriers of leases of telecommunications capacity at historical
carryover basis, resulting in no recognition of revenue for such
exchanges. Reflecting this accounting treatment, the November
MOR excludes from revenue amounts previously recognized as
revenue over the lives of the lease contracts governing these
capacity exchanges. However, since the detailed application of
this accounting treatment for exchanges of capacity and services
is not complete, the November MOR does not reflect the reduction
to depreciation expense that will result when such transactions
are recorded at carrying value rather than fair value. As
discussed in greater detail in the November MOR, Global Crossing
estimates that the reduction in depreciation expense for the
month of November would be approximately $2 million. The
restatements have no impact on cash flow.

As previously announced, Global Crossing's net loss for the
three months ended December 31, 2001, which has not yet been
reported, pending the completion of the audit of financial
statements for 2001, is expected to reflect the write-off of the
remaining goodwill and other intangible assets, which total
approximately $8 billion. Furthermore, as previously disclosed,
Global Crossing has determined that it will write down its
tangible assets in light of the terms contained in the
previously announced agreement with Hutchison Telecommunications
and Singapore Technologies Telemedia, and the bankruptcy filings
of Asia Global Crossing and its subsidiary, Pacific Crossing
Ltd. Global Crossing is in the process of evaluating its cash
flow forecasts and other pertinent data to determine the amount
of the impairment of its long-lived tangible assets. The
impairment is anticipated to exceed $8 billion, an estimate that
excludes any impairment attributable to the assets of Asia
Global Crossing and its subsidiaries, which, Global Crossing
deconsolidated effective November 18, 2002, but includes an
estimated $1.2 billion related to the restatement of exchanges
of capacity leases. The financial information included within
this press release and the November MOR reflects the write-off
of all of the goodwill and other identifiable intangible assets
of $8 billion, but does not reflect any write-down of tangible
asset value. Accordingly, the net loss of $32 million for the
month of November 2002 (reported above under "MOR Results for
November 2002") includes $89 million of depreciation and
amortization expense recorded in November 2002. This November
2002 net loss would have been reduced substantially if the
financial statements in the November MOR had reflected the
tangible asset write down.

The write-off of the intangible assets, and the write-downs of
tangible assets are described more fully in the November MOR.

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

On January 28, 2002, Global Crossing Ltd., and certain of its
subsidiaries (excluding Asia Global Crossing and its
subsidiaries) commenced Chapter 11 cases in the United States
Bankruptcy Court for the Southern District of New York
(Bankruptcy Court) and coordinated proceedings in the Supreme
Court of Bermuda (Bermuda Court). On the same date, the Bermuda
Court granted an order appointing joint provisional liquidators
with the power to oversee the continuation and reorganization of
the Bermuda-incorporated companies' businesses under the control
of their boards of directors and under the supervision of the
Bankruptcy Court and the Bermuda Court. Additional Global
Crossing subsidiaries commenced Chapter 11 cases on April 23,
August 4 and August 30, 2002, with the Bermuda incorporated
subsidiaries filing coordinated insolvency proceedings in the
Bermuda Court. The administration of all the cases filed
subsequent to Global Crossing's initial filing on January 28,
2002 has been consolidated with that of the cases commenced on
January 28, 2002. Global Crossing's Plan of Reorganization,
which was confirmed by the Bankruptcy Court on December 26,
2002, does not include a capital structure in which existing
common or preferred equity will retain any value. Global
Crossing expects to emerge from bankruptcy in the first half of
2003.

On November 18, 2002, Asia Global Crossing Ltd., a majority-
owned subsidiary of Global Crossing, and its subsidiary, Asia
Global Crossing Development Co., commenced Chapter 11 cases in
the United States Bankruptcy Court for the Southern District of
New York and coordinated proceedings in the Supreme Court of
Bermuda, both of which are separate from the cases of Global
Crossing. Asia Global Crossing has announced that no recovery is
expected for Asia Global Crossing's shareholders.

Please visit http://www.globalcrossing.comfor more information
about Global Crossing.


GLOBAL IMAGING: S&P Ups Ratings Citing Consistent Performance
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Global Imaging Systems Inc., to 'BB-' from 'B+' and
its subordinated debt rating to 'B' from 'B-'. The outlook is
stable.

The rating actions reflected Global's consistent performance,
despite highly competitive conditions, in the office equipment
distribution market. In addition, the upgrade reflected Tampa,
Florida-based Global's improved cash flow and debt protection
measures.

Global Imaging, a distributor of automated office equipment
solutions, network integration solutions, and electronic
presentation systems to the U.S. middle market, has
approximately $243 million of total debt outstanding, which
includes capitalized operating leases.

"Modest levels of free operating cash flow and the company's
current business profile will limit ratings improvement," said
Standard & Poor's credit analyst Martha Toll-Reed.

Global Imaging is expected to maintain operating margins in the
mid-teens as a percent of sales. The company is expected to use
its decentralized business model to modestly expand the
company's geographic and customer base through acquisitions.
Acquisitions are expected to continue to be funded largely with
debt.


GREAT NORTHERN PAPER: Bankruptcy Hurts Minerals Tech.'s Results
---------------------------------------------------------------
Minerals Technologies Inc., (NYSE: MTX) reported net income of
$12.0 million for the fourth quarter of 2002, a 16-percent
decrease from $14.2 million for the fourth quarter of 2001.

Operating income decreased 23 percent to $16.8 million from
$21.8 million for the fourth quarter in 2001. Diluted earnings
per common share declined 17 percent to $0.59 from $0.71 the
prior year.

The company's operating income for the full year 2002 was $80.9
million compared with $80.6 million for 2001, after a
restructuring charge. Net income for the full year increased 8
percent in 2002 to $53.8 million compared with $49.8 million in
the prior year. Diluted earnings per common share increased 5
percent to $2.61 compared with $2.48 in 2001.

"Our company had been on track for double-digit growth in
earnings through the first three quarters of 2002, but a number
of adverse events in the fourth quarter, primarily in December,
eroded that growth," said Paul R. Saueracker, chairman,
president and chief executive officer. "Two major factors hurt
our financial results for the fourth quarter-- the bankruptcy
filing of one of our paper company customers and the decline in
the performance of our refractories segment late in the
quarter."

On January 10, 2003, Great Northern Paper Inc. of Maine filed a
petition for bankruptcy protection. Minerals Technologies owns
and operates a satellite precipitated calcium carbonate plant
that supplies filler grade PCC to Great Northern's two paper
mills in Millinocket and East Millinocket, Maine. Great Northern
has secured temporary funds for preservation of the facility and
is seeking to reorganize under Chapter 11 of the bankruptcy
laws. Although the outcome of the bankruptcy proceeding and the
long-term future of the Millinocket and East Millinocket mills
are uncertain, the company has taken the precaution of
increasing its bad debt reserve by approximately $3 million, and
will continue to evaluate the prospects for its Millinocket PCC
facility.


HANGER ORTHOPEDIC: S&P Ratchets Corp. Credit Rating Up a Notch
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on medical services provider Hanger Orthopedic Group
Inc., to 'B+' from 'B'. The ratings outlook is stable. Hanger
had approximately $468 million of debt and preferred stock
outstanding at September 30, 2002.

The upgrade results from consistent improvements in Hanger's
operating efficiency, profitability, and capital structure
during the past several quarters.

"The speculative-grade ratings reflect the company's relatively
narrow business focus, cost-management challenges, exposure to
third-party reimbursement policies, and an aggressive capital
structure," said Standard & Poor's credit analyst Jill Unferth.
"Partly offsetting these concerns is Hanger's strong position in
a relatively high-margin niche medical field."

Bethesda, Maryland-based Hanger provides patient care services
for orthotics and prosthetics at 578 centers located throughout
the U.S. In addition, Hanger is the largest distributor of O&P
supplies and components in the U.S. The company offers somewhat
commodity-like external-support braces and devices, third-party
branded and private-label devices, and increasingly advanced
artificial limbs.

In recent years, Hanger has grown considerably. Although the
company has delevered its capital structure as expected, it
remains burdened with much of the debt incurred to acquire
NovaCare Orthotics & Prosthetics Inc. in 1999.


HERBST GAMING: S&P Assigns B Rating to $45M Senior Secured Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating to
Herbst Gaming Inc.'s proposed $45 million 10.75% senior secured
notes due 2008. The proposed note issue will be an add-on to its
existing $170 million senior secured notes due Sept. 1, 2008,
and will therefore have the same terms and conditions. Proceeds
from the proposed bond offering, in addition to excess cash
balances, will be used to fund the pending purchase of Anchor
Coin's route operation business from International Game
Technology (BBB-/Stable/--) and for transaction-related
expenses. The proceeds will be placed in escrow until the deal
closes at the end of February 2003, subject to regulatory
approval.

In addition, Standard & Poor's affirmed its 'B' corporate credit
rating for Las Vegas, Nevada-based Herbst Gaming, one of the
largest slot machine route operators in Nevada. The outlook is
positive. Pro forma total debt outstanding is approximately $215
million.

"The ratings on Herbst Gaming reflect its moderate-size cash
flow base, competitive market conditions, and high debt levels",
said Standard & Poor's credit analyst Peggy Hwan. She added,
"These factors are tempered by the company's strengthened market
position in the Nevada route business as a result of the
acquisition, and the relatively stable cash flow generated from
these route operations."

With the acquisition of Anchor Coin, Herbst Gaming further
expands its presence in the Nevada route business with an
additional 1,100 machines in more than 88 locations, bringing
its total base to approximately 8,100 machines in 620 locations.
This segment benefits from a substantial recurring revenue and
cash flow stream because long-term contracts account for a
majority of revenues and EBITDA, and renewal rates have
historically been extremely high. In addition, this segment
accounts for more than 70% of Herbst Gaming's revenues and
EBITDA, and is expected to grow over time in line with growth of
the Las Vegas market, one of the fastest growing regions in the
country. Herbst Gaming's affiliation with large chain stores
will provide an avenue for this growth.

The ratings could be raised over the intermediate term if Herbst
Gaming is successful in integrating the Anchor Coin business and
in improving its overall financial profile.


HOLLYWOOD CASINO: Weak Performance Causes Concern at S&P
--------------------------------------------------------
Standard & Poor's Ratings Services revised its CreditWatch
implications for Hollywood Casino Shreveport to negative from
positive due to a significant shortfall in cash flow at the
property during 2002 that will be well below Standard & Poor's
previous expectations and below the level needed to meet the
company's cash interest expense.

The Shreveport, Louisiana-based company has approximately $190
million in total debt outstanding.

"The lower-than-expected cash flow is the result of slow market
growth and ongoing competitive market conditions primarily due
to the soft economic environment in the Dallas area, the major
feeder market to Shreveport," said Standard & Poor's credit
analyst Michael Scerbo. Due to HCS's weak performance, the
expectation that the market will remain intensely competitive in
the future, and the significant bridge to the company's fixed
obligations, ratings downside exists, despite the potential for
support from Penn National Gaming, Inc., which is acquiring
HCS and its parent, Hollywood Casino Corp.

The CreditWatch listing will be resolved subsequent to the
release of HCS's fourth quarter earnings, and following a
decision as to whether the HCS notes will remain outstanding
upon completion of the acquisition. HCS is obligated to offer to
repurchase the notes upon a change of control, however, Standard
& Poor's believes the funding of this could be challenging on a
stand alone basis.


HOMELIFE: Seeks Extension of Lease Designation Period for Sears
---------------------------------------------------------------
Homelife Corporation, along with its debtor-affiliates, ask the
U.S. Bankruptcy Court for the District of Delaware to further
extend their period to assume and assign, cancel or terminate,
or reject Leases provided for in the Sale of Designation Rights
and Settlement and Compromise Agreement between the Debtors and
the Sears Entities.

On October 31, 2001, after extensive negotiations, the Debtors
and the Sears Entities executed a Designation Rights and
Compromise Agreement which sets forth the material terms and
conditions under which the Sears Entities agreed to purchase the
Debtors' Designation Rights in exchange for a $9,500,000 cash
payment, among other things.  The Sears Entities include Sears,
Roebuck and Co, Sears National Bank, Sears Roebuck Acceptance
Core., and Sears Logistics Services, Inc.  Pursuant to the
Court-approved Designation Rights and Compromise Agreement,
Sears has used reasonable efforts to expeditiously direct the
Debtors to assume and assign, reject, cancel or terminate all of
the Leases.  Currently, nine Leases have not yet been assumed
and assigned, rejected, cancelled or terminated.

Consequently, the Debtors request an additional extension,
without prejudice, of the period for the Debtors to assume and
assign, cancel or terminate, or reject all of the Leases through
the later of April 30, 2003 or the effective date of any
confirmed chapter 11 plan.

In the absence of an additional extension of time, the Debtors
are obligated under the terms of the Designation Rights and
Compromise Agreement to cause the Leases to be rejected
immediately prior to the expiration of such period.  If that
happens, Sears could lose the full benefit of its bargain under
the Designation Rights and Compromise Agreement with the
Debtors, having already paid millions of dollars in
consideration.  That result would deter parties similarly
situated to the Sears Entities from entering into similar
transactions with other debtors in future cases.

Privately-held HomeLife shut down all of its 128 retail
locations before it filed for chapter 11 bankruptcy protection
on July 16, 2001 in the U.S. Bankruptcy Court for the District
of Delaware.  The Debtors listed both assets and liabilities of
over $100 million each in its petition. Laura Davis Jones, Esq.
at Pachulski, Stang, Ziehl, PC, represents the Debtors in these
proceedings.


HUDSON HOTELS: Files for Chapter 11 Reorganization in New York
--------------------------------------------------------------
Hudson Hotels Corporation, (OTC: HUDS.PK) filed a Chapter 11
proceeding under the U.S. Bankruptcy Code. At the same time, it
has agreed, in principal, with its senior lender, RHD Capital
Ventures, LLC, whereby RHD will purchase substantially all of
the assets of the Company. It is expected that a definitive
Asset Purchase Agreement will be signed and filed with the court
within the next week.

Talking about the current condition of the Company, Thomas W.
Blank, President and CEO, states, "Since 1998, we have worked
hard to trim overhead and debt that was taken on in an effort to
increase the number of our hotel properties as part of an
initial public offering, which new company would eventually
elect real estate investment trust status. The IPO failed when
the credit and equity markets collapsed in the summer of 1998.
Our efforts to reduce overhead and debt were meeting with some
success", Blank goes on, "until the economic downturn in 2001,
compounded by the events of September 11, brought the travel and
tourism industry to a standstill. The bottom of this cycle has
been low and long, and I don't anticipate any recovery until
sometime in 2004."

RHD is the owner of Hudson's mezzanine debt, presently totaling
in excess of $20 million. This purchase by RHD, once ushered
through the bankruptcy court, would create a new operating
company which would continue managing and operating the assets
of Hudson. The sale process is expected to take approximately 60
days. During the pendency of the Chapter 11 case, RHD has agreed
to provide debtor in possession financing to Hudson in order to
sustain its activities until the sale is complete. It is
expected that headquarters for the new company will remain in
Rochester, New York.

"I am confident," states Thomas W. Blank, "that the newly formed
company will be able to persevere through this downturn and be
successful when the economy rebounds and the hotel industry
returns to more normal operating levels. My first priority, now
and after the sale is complete, is to ensure that the owned and
managed hotels continue to receive all of the necessary
attention and service, which they deserve. Thereafter, we hope
to pursue strategic acquisitions of hotel assets and management
contracts."

Hudson Hotels Corporation is a Rochester, New York, based
leading limited-service hotel development and management
company. Hudson manages primarily well-known national hotel
brands pursuant to franchise agreements from Marriott
International, Inc., Hilton Hotels Corporation, Choice Hotels
International, Inc., Red Roof Inns, Inc., and U.S. Franchise
Systems, Inc. The Company owns 25 hotels and manages a total of
44 hotels.


HYPPCO FINANCE: Fitch Junks Class A-2 Notes Rating at CCC-
----------------------------------------------------------
Fitch Ratings has downgraded the rating on one class of notes
issued by HYPPCO Finance Company Ltd., a collateralized bond
obligation backed predominantly by high yield bonds. The current
ratings are as follows:

             HYPPCO Finance Company Ltd.

     -- $211,961,741 class A-2 notes to 'CCC-' from 'BB+'.

According to its Jan. 2, 2003 trustee report, HYPPCO Finance
Company Ltd.'s collateral includes a par amount of $16.47
million (7.57%) defaulted assets. The deal also contains 30.68%
assets rated 'CCC+' or below excluding defaults. The
overcollateralization test is failing at 97.91% with a trigger
of 125%. Currently, the collateral manager is restricted from
trading activity in this transaction.

In reaching its rating actions, Fitch reviewed the results of
its cash flow model runs after running several different stress
scenarios. Also, Fitch had conversations with Delaware
Investment Advisors, the collateral manager, regarding the
portfolios.


IBEAM BROADCASTING: Asks Court to Delay Entry of a Final Decree
---------------------------------------------------------------
The iBEAM Broadcasting Corporation Liquidating Trust, as
successor in interest to the iBEAM Broadcasting Corporation,
asks the U.S. Bankruptcy Court for the District of Delaware to
further extend the Liquidating Trust's time file a consolidated
final report and delay entry of a final decree in iBEAM's
chapter 11 case.

Since the Confirmation Date, the Liquidating Trust has engaged
in substantial analysis and reconciliation of claims and has
completed a substantial portion of the claim objection process
by evaluating claims, and by filing objections to certain
individual claims and an omnibus objections to claims, and by
resolving other claims without objection.  Notwithstanding, the
Liquidating Trust is still in the process of reconciling certain
claims filed in this case.  At a minimum, the claim process will
take several months to complete, the Liquidating Trust
discloses.

Adequate time for completion of the claim reconciliation process
is required in order to determine the correct distribution
amounts to creditors.   Consequently, The Liquidating Trust
points out, it would be premature to close this Chapter 11 case
at this time.  The Liquidating Trust seeks an extension of the
automatic entry of a final decree and the deadline by which it
must file a Final Report through June 30, 2003.

iBeam Broadcasting Corporation delivers streaming media over the
Internet. The Company filed for chapter 11 protection on October
11, 2001.  Aaron A. Garber, Esq., and Adam Hiller, Esq., at
Pepper Hamilton LLP and Thomas G. Macauley, Esq., at Zuckerman
and Spaeder LLP, represent the Debtors in their restructuring
efforts.


INNOVATIVE CLINICAL: Unit's Losses Raise Going Concern Doubts
-------------------------------------------------------------
As previously reported by Innovative Clinical Solutions, Ltd.,
on February 7, 2002, the Company sold its wholly-owned
subsidiary, Clinical Studies, Ltd., to Comprehensive
Neuroscience, Inc.  The sale was effected through the merger of
CSL with a subsidiary of CNS.

Also, as previously reported by the Company on September 23,
2002, subsequent to the Merger, a dispute arose between CNS and
ICSL involving CSL liabilities and post-closing adjustments to
the CNS stock  escrows.  On September 10, 2002, ICSL and CNS
entered into a Settlement Agreement in connection with the
settlement of the Gillheeney litigation providing for settlement
of the Gillheeney litigation and mutual releases by the parties
of all claims except as may be asserted pursuant to the
indemnification and escrow provisions of the Merger Agreement.
In addition, the provisions of the Escrow Agreement entered into
in connection with the Merger were amended to provide that up to
2,330,278 of the 7,767,593 shares of CNS common stock held in
the Litigation Escrow (with a valuation  of $1.5 million for
purposes of the Merger  Consideration) would be available for
satisfaction of any CSL Working Capital Deficiency to the extent
the Working Capital Escrow, Contingent Liabilities Escrow and
General Escrow are insufficient to satisfy such  deficiency.
The CNS Settlement Agreement also provided that, subject to the
closing of a new convertible note financing of at least  $2.5
million by CNS, ICSL would make the following payments to CNS:

     (i) $125,000 upon closing of the New CNS Financing and

    (ii) subject to the resolution of certain ICSL contingent
         liabilities and available cash, $125,000 by March 31,
         2003.

These amounts as well as approximately $142,000 for CSL
liabilities paid or reimbursed by ICSL following the closing of
the Merger  are to be treated as current assets of CSL as of
December 31, 2001 for purposes of determining the CSL  December
Net Working Capital and calculating any CSL Working Capital
Deficiency under the Merger Agreement.  The New CNS Financing
was closed on October 15, 2002, and ICSL made the first $125,000
payment to CNS on October 21, 2002.

Under the CNS Settlement Agreement, subject to the consummation
of the New CNS Financing as described below, ICSL has agreed to
invest all Excess Cash in CNS securities. "Excess Cash" is
defined as all ICSL cash or cash equivalents that are (i)
derived from currently existing ICSL assets and (ii) not needed
to pay or provide for the  payment of ICSL liabilities and
obligations, all as determined in good faith by the ICSL Board.
ICSL shall have no obligation to invest any Excess Cash if CNS
is not solvent or is in default under its senior credit
facility.

On October 15, 2002, CNS consummated the New CNS Financing and
issued $2.8 million of Tranche B1 Convertible Secured Notes and
$2.4 Tranche B2 Convertible Secured Notes.  As part of the New
CNS Financing, each holder of old CNS Notes, which were issued
in connection with the Merger, who purchased New Money Notes
with a value equal to or greater than 50% of such Old Note
investor's preemptive pro rata share of the aggregate  value of
the New Money Notes, exchanged his/her Old Notes for a Swap Note
equal in amount to the face amount plus all accrued and unpaid
interest of the Old Note at closing.  The Notes bear interest at
"Prime" plus 1.75% (currently 6.5%), which will be compounded
semi-annually and payable in cash or accrue, at CNS's option.
The collateral securing the Notes is all current and future
assets of CNS, except those pledged as part of an existing asset
backed lease obligation or equipment or other capital leases
incurred in the ordinary course of business.

The Notes will be subject to redemption by CNS at the higher of
fair market value, as determined by the same appraisal process
as provided under the terms of the Old Notes, on an as converted
basis, or at the Accreted Value on February 7, 2006.  Also, CNS
may repurchase all New Money Notes at any time prior to the
six-month anniversary of the closing of the New CNS Financing at
a price equal to 110% of the face amount of the New Money Notes.

In connection with the New CNS Financing, CNS effected a 10-for-
1 reverse stock split.  As a result of the Reverse Split, the
Notes will be convertible into a number of shares of CNS common
stock determined by dividing the Accreted Value by $0.484831 at
the holder's option at any time.  Prior to the New CNS
Financing, CNS had outstanding Old Notes with a face value of
$3,354,000, which were convertible into 5, 210,502 shares of CNS
common stock based upon the $0.6437 per share conversion ratio
established in connection with the Merger, which resulted in a
conversion ratio for the Old Notes of approximately 1553.5
shares (pre-Reverse  Split) for each $1,000 of Accreted Value.
The conversion ratio of the Swap Notes,  which were exchanged
for Old Notes in the New CNS Financing, is approximately 2062.6
shares (post-Reverse Split) for each $1,000 of Accreted Value
(which equates to 20,626 shares (pre-Reverse Split) for each
$1,000 of Accreted Value). Prior to the issuance of the Notes,
the holders of Old Notes waived any anti-dilution  adjustment
under such notes in respect of future issuances by CNS of equity
securities or equity-linked  securities at a price per share
equal to or greater than $0.484831. Holders of the Notes have
the right to vote with the CNS common stock on an as-converted
basis, and protective provisions relating to debt issued or
incurred, declarations of dividends, changes in the current
business or structure of CNS, and interested party transactions
will require the approval of 66.67% of the holders of the Notes
and Old Notes.

In addition to the Notes, the purchasers of the Notes were
issued seven year warrants which entitle the  holder to purchase
an amount of Series A Preferred Stock equal to 60% of the face
amount of the New Money Notes purchased at an exercise price
equal to the liquidation preference for the Series A Preferred
Stock.  However, in the event that CNS exercises its right to
repurchase the New Money Notes, CNS will have the right to
cancel 50% of these warrants.

CNS presently has outstanding 10,400,000 shares of Series A
Convertible Preferred Stock which, prior to the New CNS
Financing, were convertible into 16,516,918 shares of CNS common
stock based upon the $0.6437 per share conversion ratio
established in connection with the Merger.  In connection with
the New CNS  Financing, the terms of the Series A Preferred
Stock were amended to provide for "full ratchet" rather than
"weighted average" anti-dilution rights, thereby resulting in an
adjusted conversion price of $0.484831  upon the issuance of the
New Money Notes (after giving effect to the Reverse Split).  As
a result, the  Series A Preferred Stock are now convertible into
21,450,773.5 shares of CNS common stock (which equates to
214,507,735 shares pre-Reverse Split).

CNS is also negotiating $600,000 of additional financing from
Heller Healthcare Finance, Inc. In connection with securing such
additional financing, the holders of certain Old Notes have
agreed to guarantee the repayment of up to $1 million of the
Heller Line in excess of the borrowing base. In consideration
for this guarantee, CNS has agreed to issue seven year warrants,
at an exercise price of $0.001 per share, to acquire an
aggregate of 7,200,000 shares of CNS common stock (pre-Reverse
Split) or a proportional number if the initial amount of the
guarantee is other than $600,000. CNS has indicated that it
believes that it will obtain an increase in the Heller Line, but
there can be no assurance that CNS will consummate this
transaction.

Consummation of the New CNS Financing resulted in substantial
dilution of ICSL's equity interest in CNS.  Following the
Reverse Split effected in connection with the New CNS Financing,
ICSL now holds 2,237,406  shares of CNS common stock, of which
1,712,970 shares are held in escrow to satisfy ICSL's
indemnification obligations pursuant to the Merger Agreement and
to satisfy adjustments to the Merger consideration based upon
resolution of certain CSL litigation and any CSL Working Capital
Deficiency.

CNS has advised ICSL that to date, $2.86 million has been
invested in the New Money Notes, and $2.38  million of Old Notes
have been exchanged for Swap Notes. As a result of this
financing, ICSL's equity and voting interest has been
substantially diluted from 42.4% to approximately 5.9% of CNS's
common equity determined on an "as converted" basis. CNS may
issue additional New Money Notes, which will further dilute
ICSL's percentage ownership interest.  In addition, if CNS
issues the common stock Warrants as planned in connection with
the guarantee of the Heller  Line, ICSL's ownership interest
will be further diluted. Furthermore, while the determination of
CSL's working capital will not be made until March 31, 2004,
based upon preliminary numbers, it is likely that there will be
a material working capital deficiency, which will exceed the
shares held in the Working Capital Escrow and result in claims
against the General Escrow, the Contingent Liabilities Escrow,
and possibly the Litigation Escrow, all of which would further
reduce ICSL's percentage ownership interest in CNS.

CNS has informed ICSL that it experienced a serious working
capital shortfall during the second and third quarter of 2002,
which has adversely impacted its operations.  Financial
information provided by CNS in December 2002 indicates that CNS
had total revenues for the three-month and nine-month periods
ended September 30, 2002 of $6.5 million and $18.9 million,
respectively, which resulted in a net loss of $659,000 and $2.5
million, respectively for such periods.  Cash and cash
equivalents decreased by $1.4 million during the nine-month
period from $2.5 million as of December 31, 2001 to $1.1 million
as of September 30, 2002.  Net cash used in operating activities
during the nine-month period totaled $6.3 million, while net
cash provided by investing activities and financing activities
totaled $587,000 and $4.3 million, respectively.  These numbers
do not reflect the New CNS Financing, which was consummated on
October 15, 2002.  CNS has not provided ICSL with any financial
information regarding the fourth quarter of 2002, and
accordingly, ICSL cannot provide more current information with
respect to CNS's operations or financial condition.  However,
CNS did not achieve profitability for the 9-month period ended
September 30, 2002 and there can be no assurance that it has or
will achieve a profitable level of operations or that the funds
from the New CNS Financing will be sufficient to sustain CNS's
operations or grow its business.


INTEGRATED HEALTH: Wants Litchfield to Make Amendments to Claim
---------------------------------------------------------------
On April 9, 2002, Litchfield Investment Company, LLC filed claim
nos. 13735 and 13734 alleging $27,301,483.56 in rejection
damages on account of the rejection of certain leases by the
Debtors Integrated Health Services, Inc., and its debtor-
affiliates.  The Litchfield Claims indicated that they replaced
two proofs of claim previously filed on February 5, 2002.

Consequently, the Debtors ask the Court to compel Litchfield to:

    -- provide a more definite statement concerning the amount
       by which it has mitigated its lease rejection damages
       through re-letting of certain facilities, and

    -- amend proof of claim nos. 13735 and 13734 filed by
       Litchfield against the Debtors on account of alleged
       damages arising out of the Debtors' rejection of certain
       leases so as to deduct the Mitigation Amount.

According to Edmon L. Morton, Esq., at Young Conaway Stargatt &
Taylor LLP, in Wilmington, Delaware, the Litchfield Claims
calculate the amount of Litchfield's damages from the rejection
of the Leases, subject to the limitations of Section 502(b)(6)
of the Bankruptcy Code.  The Section 502(b)(6) statutory cap
used by Litchfield to calculate the Litchfield Claims was 15% of
the rent due under the Leases not to exceed three years of rent.

The Debtors believe that the Litchfield Claims are overstated in
that:

    -- refundable lease deposits would be returned to the
       Debtors and therefore are not a valid component of
       Litchfield's damages; and

    -- damages relating to operating expenses, capital
       improvements and legal and professional fees are clearly
       overstated.

Furthermore, the Litchfield Claims do not take into account
these events, which occurred after the Litchfield Claims were
filed:

    -- the Debtors have timely made their payment obligations
       under the Leases through November 1, 2002; and

    -- Litchfield has mitigated, in part, its lease rejection
       damages after November 1, 2002 through re-letting of the
       Facilities to third parties.

Mr. Morton tells the Court that the Litchfield Claims fail to
provide any documentary support for Litchfield's assertion of
damages relating to Operating Expenses and Capital Improvements
as components of its claims, and it is therefore unclear whether
these elements of the purported claim have been mitigated by re-
letting the Facilities.

What is clear is that based on the Subsequent Events, the
Litchfield Claims must be amended.  Furthermore, it is evident
that based on the extent of Litchfield's mitigation, the Section
502(b)(6) statutory cap of 1.5% of outstanding rent not to
exceed three years will not apply.  Rather, at most,
Litchfield's unsecured claim will not exceed the one-year rent
statutory cap set forth in Section 502(b)(6).  The Debtors
believe that the Litchfield Claims should be zero, and it is
Litchfield that owes money to them.

From the Debtors' perspective, Mr. Morton believes that the
rents and other amounts payable to Litchfield under the New
Operating Agreement are significantly lower than the Rent and
other amounts payable to Litchfield by the Debtors under the
Leases.  However, the New Rents are nevertheless sufficiently
high that the 15% of rent statutory cap in Section 502(b)(6).
The one-year rent statutory cap amount is $14,000,000.  For the
15% statutory cap to apply, Litchfield's damages would need to
exceed $93,0000,000, which is clearly not the case due to the
mitigation resulting from the New Operating Agreements.

The Debtors believe that the points of contention will be
narrowed if Litchfield is directed to file an amended Claim.
The Debtors anticipate that Litchfield will:

    -- recognize that the 15% statutory cap will not apply due
       to the extent of its mitigation;

    -- concede that the one year lent statutory cap will apply;
       and

    -- acknowledge that mitigation has substantially reduced the
       differences in view relating to Refundable Lease
       Deposits, Operating Expenses and Capital Expenditures.

In fact, Mr. Morton believes that the differences in view
between the Debtors and Litchfield may not be meaningful
altogether if both sides agree that the undisputed damages claim
is subject to the one-year rent statutory cap. (Integrated
Health Bankruptcy News, Issue No. 49; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


IRVINE SENSORS: Circulating Prospectus re 3.3MM Share Offering
--------------------------------------------------------------
Irvine Sensors Corporation is circulating a prospectus relating
to the public offering, which is not being underwritten, of a
total of 3,306,053 shares of the common stock of the Company by
selling stockholders.  The price at which the selling
stockholders may sell the shares will be determined by the
prevailing market price for the shares or in negotiated
transactions. Irvine Sensors will not receive any of the
proceeds from the sale of these shares.

The Company's common stock is quoted on the Nasdaq SmallCap
Market under the symbol "IRSN" and is traded on the Boston Stock
Exchange under the symbol "ISC".  On January 13, 2003, the last
reported sale price for the common stock on the Nasdaq SmallCap
Market was $1.65 per share.

At September 29, 2002, Irvine Sensors reported a working capital
deficit of about $1.4 million.


IT GROUP: Wants Until April 14 to Move Actions to Delaware Court
----------------------------------------------------------------
Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in Wilmington, Delaware, reminds the Court that The IT
Group, Inc., and its debtor-affiliates remain parties to over
100 different judicial and administrative proceedings currently
pending in various courts or administrative agencies throughout
the country.  The actions involve a wide variety of claims, some
of which are complex.  The pending actions consist of all forms
of environmental, commercial, tort, employment-related,
trademark and patent litigation.

Mr. Galardi contends that a fourth extension of the Debtors'
removal period is necessary to give the Debtors enough time to
decide which, if any, of the actions should be removed and
transferred to this district.  Thus, the Debtors ask the Court
to extend the removal period through the earlier of:

    (a) April 14, 2003; or

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

Mr. Galardi assures the Court that the Debtors' adversaries will
not be prejudiced by the extension because their adversaries may
not prosecute the actions absent relief from the automatic stay.

A hearing on the Debtors' request is scheduled on January 29,
2003 at 10:30 a.m.  Pursuant to Delaware Local Rule 9006-2, the
Debtors' removal period is automatically extended through the
conclusion of that hearing. (IT Group Bankruptcy News, Issue No.
24; Bankruptcy Creditors' Service, Inc., 609/392-0900)


KAISER ALUMINUM: Can't File Schedules & Statements Until Apr. 14
----------------------------------------------------------------
Pursuant to Rules 1007(b) and (c) of the Federal Rules of
Bankruptcy Procedure, a Chapter 11 debtor must file, within 15
days after the Petition Date, its schedules of assets and
liabilities, a schedule of current income and expenditures, a
schedule of executory contracts and unexpired leases and a
statement of financial affairs.  Under Rule 1007-1(d) of the
Local Rules of Bankruptcy Practice and Procedure of the U.S.
Bankruptcy Court for the District of Delaware, the filing
deadline is automatically extended for an additional 15 days if
the debtor has more than 200 creditors and if the petition is
accompanied by a creditor list.

Since Kaiser Aluminum Corporation, and its debtor-affiliates
filed the creditor list on the Petition Date and have more than
200 potential creditors included in the list, Bankruptcy Rule
1007(c) and Local Rule 10071(d) therefore require the New
Debtors to file their Schedules and Statements within 30 days
after the Petition Date or by February 13, 2003.

For numerous reasons, the New Debtors relate that they were
unable to assemble, before the Petition Date, all the
information necessary to complete and file the Schedules and
Statements by the deadline.  Some of these reasons include:

    -- the Debtors' utilization of decentralized accounting
       systems.  The operations of each of the active New
       Debtors are unique from each other and use separate
       Accounting information systems;

    -- the limited staffing available to:

       (a) perform the required internal review of the New
           Debtors' accounts and affairs;

       (b) assure that information submitted by each of the New
           Debtors' locations is complete and is prepared on a
           consistent basis; and

       (c) combine the separate information into a complete and
           cohesive form;

    -- the necessity for the Debtors' limited financial,
       accounting and legal staff also to meet numerous, ongoing
       reporting obligations:

       (a) as public companies, including the reporting
           requirements under applicable securities laws and
           regulations; and

       (b) to the Debtors' creditor constituencies and the Court
           as debtors in possession; and

    -- the press of business incident to the New Debtors'
       commencement of these Chapter 11 cases.

Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, also
tells the Court that the New Debtors will not be in a position
to complete the Schedules and Statements within 30 days
primarily as a result of the extensive resources that will need
to be devoted to complete the year-end audit process in the next
several weeks. Mr. DeFranceschi explains that the year-end audit
demands significant time from the Debtors' limited accounting
and financial personnel, thus preventing these individuals from
also devoting the necessary time to gather all the detailed
information for the preparation of the Schedules and Statements.
The year-end audit process will also be more complicated and
time-consuming than the previous years because the Debtors were
required to replace their independent auditors, Arthur Anderson
LLP, several months ago.

Mr. DeFranceschi adds that the Debtors' limited financial,
accounting and legal staff are also required to meet the
Debtors' reporting obligations associated with the conduct of
their Chapter 11 cases, like completing monthly operating
reports and timely furnishing year-end information to the
postpetition lenders and the Committees.  This further impedes
the ability of the New Debtors to complete the Schedules and
Statements within a short span of time.

Thus, the New Debtors propose a 60-day extension of the filing
deadline, through and including April 14, 2003.  This will be 14
days after the Debtors' Securities and Exchange Commission
filings are due.

Judge Fitzgerald will convene a hearing on February 24, 2002 to
consider the New Debtors' request.  By application of
Del.Bankr.LR 9006-2, the deadline is automatically extended
through the conclusion of that hearing. (Kaiser Bankruptcy News,
Issue No. 21; Bankruptcy Creditors' Service, Inc., 609/392-0900)

DebtTraders reports that Kaiser Aluminum & Chemicals' 12.750%
bonds due 2003 (KLU03USR1) are trading between 7 and 9. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=KLU03USR1for
real-time bond pricing.


KEMPER INSURANCE: Inks Renewal Rights Agreement with Argonaut
-------------------------------------------------------------
The Kemper Insurance Companies reached a definitive agreement to
sell the renewal rights to its bundled large risk national
accounts to Argonaut Insurance Company, a member of Argonaut
Group, Inc., a national underwriter of specialty insurance
products in niche areas of the property and casualty market
(NASDAQ:AGII).

For the bundled segment of the large risk business, Kemper Risk
Management has provided the underwriting and policy issuance
portions of the programs along with the claims and safety
engineering services.

"This transaction provides Argonaut Insurance with the
opportunity to expand our portfolio of large, upper-middle
market clients by adding superior talent and a book of business
that matches our strategic focus and competency," said John G.
Gantz Jr., president of Argonaut Insurance Company. "We look
forward to maintaining the relationships that Kemper Risk
Management has built so effectively."

The transaction is part of Kemper's commitment to become a
smaller, more profitable insurance company.

"Going forward, Kemper will have a two-pronged strategy," said
David B. Mathis, Kemper chairman and CEO. "First, we will be
primarily a standard commercial lines insurance provider with
deep expertise in the lines of business we offer. The second key
component is leveraging the strength of our service platform,
both in terms of serving existing Kemper customers and selling
our services independently."

In a separate transaction, Kemper recently reached a definitive
agreement with Old Republic Insurance Company, a wholly owned
subsidiary of Old Republic International Corporation (NYSE:ORI),
to sell the renewal rights to its unbundled risk management
accounts.

Although Kemper will no longer underwrite risk management
business, it will continue through its NATLSCO and Kemper
National Services operations to be a premier provider of claim,
medical management and safety engineering services to all market
segments. Those existing Kemper customers renewing with Argonaut
will have the opportunity to continue to receive support
services directly from NATLSCO and KNS in this arrangement.

Kemper large risk customers whose accounts are not compatible
with Argonaut's underwriting appetite will also have the option
to access services from Kemper NATLSCO and KNS regardless of
their underwriting provider.

In addition, Argonaut will consider providing customers with
novations on current, in-force Kemper contracts to facilitate
their transition.

Argonaut will be offering employment to an undisclosed number of
Kemper employees. Other terms of the agreement were not
disclosed.

Headquartered in San Antonio, Texas, Argonaut Group, Inc.,
(NASDAQ:AGII) is a national underwriter of specialty insurance
products in niche areas of the property & casualty market.
Through its operating subsidiaries, Argonaut Group offers high
quality customer service in programs tailored to the needs of
its customers' business and risk management strategies.
Collectively, Colony Insurance, Rockwood Casualty Insurance
Company, Argonaut Insurance Company, Argonaut Great Central, and
Trident Insurance Services underwrite a full line of products in
four primary areas: excess and surplus, specialty commercial,
specialty workers' compensation, and public entity. Information
on Argonaut Group and its subsidiaries is available at
http://www.argonautgroup.com

Argonaut Insurance Company is currently rated A (Excellent) by
A.M. Best and A by Standard and Poor's.

The Kemper Insurance Companies is a leading provider of
property/casualty insurance. Kemper is headquartered in Long
Grove, Ill. For more information about Kemper, visit
http://www.kemperinsurance.com

                         *     *     *

As reported in Troubled Company Reporter's January 9, 2003
edition, Fitch Ratings downgraded the insurer financial strength
ratings  of three primary insurance underwriters of the Kemper
Insurance Companies to 'B+' from 'BBB'. Additionally, Fitch has
downgraded the surplus notes issued by group member Lumbermens
Mutual Casualty Company to 'CCC' from 'BB-'. All ratings remain
on Rating Watch Negative.

The rating actions reflect Fitch's concerns regarding the
prospective financial condition of KIC. Included in these
concerns is the increasing likelihood that future interest
payments on Lumbermen's surplus notes may not be made as
scheduled. Given the regulatory oversight of surplus notes
payments, and the organization's strained capital position,
Fitch is concerned that Lumbermens will have difficulty
maintaining minimum capital requirements and therefore could
experience difficulties in maintaining approvals from regulators
to pay interest on its surplus notes.


KENTUCKY ELECTRIC: Will File for Chapter 11 Relief by Month-End
---------------------------------------------------------------
Kentucky Electric Steel, Inc., expects to file for bankruptcy
protection under Chapter 11 of the U.S. Bankruptcy Code before
the end of January, 2003. As reported on December 27, 2002, the
Board of Directors requested that management begin preparation
of a plan to shut down the Company's production facilities. That
plan is now being implemented by management of the Company. The
Company intends to continue to focus on a strategic exit of its
business while in bankruptcy.

The Company has defaulted on its 7.66% Senior Notes due
November 1, 2005 (approximately $16.7 million currently
outstanding) and under its $18 million revolving line of credit
(approximately $13.3 million currently outstanding). The Company
is continuing discussions with its lenders regarding potential
arrangements involving use of cash collateral, "debtor-in-
possession" financing, and other financial aspects of the
anticipated bankruptcy filing, although at this time there can
be no assurance that arrangements satisfactory to the Company
will be achieved.

The Company also issued an additional WARN Act notice relating
to the layoff of 59 salaried employees. This follows a WARN Act
notice issued on December 27, 2002 relating to the layoff of 267
hourly employees. Jack Mehalko, Interim Chief Executive Officer,
commented, "In spite of the willingness of our salaried and
hourly workforce to make substantial concessions regarding wages
and benefits, our continuing financial distress and lack of
liquidity have required the Company to suspend its manufacturing
operations for the indefinite future. The reduction in the
salaried workforce is commensurate with this reduced level of
operations."

Kentucky Electric Steel, Inc., is a publicly held company which
operates a specialty steel mini-mill, manufacturing special
quality steel bar flats for the leaf-spring suspension, cold
drawn bar conversion, truck trailer support beam, and steel
service center. The Company's common stock is now quoted on the
OTC Bulletin Board under the symbol "KESI.OB".


KMART CORP.: Retailer Unveils First Draft of its Chapter 11 Plan
----------------------------------------------------------------
Kmart Corporation (Pink Sheets: KMRTQ) filed its proposed Plan
of Reorganization and related Disclosure Statement with the U.S.
Bankruptcy Court for the Northern District of Illinois,
consistent with the Company's "fast-track" reorganization
timetable.  Kmart said in its January 22, 2002 announcement of
the commencement of its Chapter 11 cases that it would seek to
reorganize within eighteen months.  With this filing, Kmart is
positioned to emerge from Chapter 11 protection as early as
April 30, 2003.

The proposed Plan of Reorganization, which has been the subject
of extensive negotiations with the Company's statutory
committees in its Chapter 11 cases, calls for a substantial
investment by two Plan Investors -- ESL Investments, Inc. and
Third Avenue Value Fund -- in furtherance of Kmart's financial
and operational restructuring.  Under the terms of an Investment
Agreement entered into today with the Company, the Plan
Investors will invest at least $140 million in exchange for
shares of stock in the reorganized Kmart.  Kmart also has a call
right in the Investment Agreement for up to an additional $60
million of convertible unsecured note financing from ESL
Investments subject to the terms of the Investment Agreement.
In addition, ESL has agreed that the cash that it would receive
under the Plan of Reorganization as a prepetition lender will be
used to purchase additional equity.  Kmart said that it is
continuing to work with its statutory committees on certain
aspects of the Disclosure Statement and Plan of Reorganization,
none of which are expected to materially affect projected
stakeholder recoveries under the reorganization plan.  The
Company is optimistic that its statutory committees will
formally endorse the Plan of Reorganization at or prior to a
hearing on the adequacy of the Disclosure Statement, which has
been scheduled for February 25, 2003, in the Bankruptcy Court.

Kmart President and Chief Executive Officer Julian Day said,
"With the filing of our Disclosure Statement and Plan of
Reorganization, Kmart is moving ever closer to concluding our
reorganization and emerging from Chapter 11 in a stronger and
more financially stable position.  The Chapter 11 reorganization
process is allowing us to achieve many important goals,
including the elimination of hundreds of underperforming stores,
the rejection of costly leases, and the restructuring of our
balance sheet through the conversion of substantially all debt
into equity.  We are intensely focused on emerging from our
reorganization cases this April because we firmly believe that
the further operational improvement we need to implement will be
best achieved outside of Chapter 11."

The Disclosure Statement also includes detailed information
about the Company's five-year business plan; the proposed Plan
of Reorganization; financial estimates regarding the Company's
reorganized business enterprise value including support for the
"best interests" requirements for the Plan of Reorganization
under the Bankruptcy Code; and events leading up to and during
Kmart's Chapter 11 cases.  Approval of the Disclosure Statement
and related voting solicitation procedures, which Kmart will
seek at its February 25, 2003 omnibus hearing in the Bankruptcy
Court, would permit the Company to solicit acceptances for the
proposed Plan of Reorganization commencing in March and to seek
confirmation of the proposed Plan of Reorganization by the
Bankruptcy Court in mid-April 2003.  Assuming that these
milestones can be achieved, Kmart would emerge from Chapter 11
reorganization on or about April 30, 2003.  Kmart's Chapter 11
cases are being presided over by the Honorable Susan Pierson
Sonderby.

Kmart said that the Disclosure Statement filed today included
information regarding the Accounting and Stewardship
Investigations previously disclosed.

Day said, "We have made information public today that there is
credible and persuasive evidence demonstrating that certain
former managers of Kmart violated their stewardship
responsibilities to Kmart, its employees and stakeholders.  We
have previously separated those individuals from employment
relationships with Kmart and today are announcing "for cause"
terminations with respect to ten former managers, with
additional determinations pending the final completion of the
Investigations.  We have agreed with our creditors that a
Creditors' Litigation Trust will be established under our Plan
of Reorganization so that legal actions arising under or related
to these Investigations can be pursued for the benefit of our
creditors.  As important, we are announcing today that we have
established enhanced controls and other measures so that there
can be unquestioned confidence in our new management team's
stewardship of Kmart going forward.  Kmart will stand for
nothing less than the highest standards of honesty, integrity
and professionalism.  We owe this to our stakeholders,
customers, associates and this 103-year-old institution."

          Details of Proposed Plan of Reorganization

Key elements of the Plan of Reorganization, as proposed and
subject to approval by the Bankruptcy Court, include:

     * On the effective date of the Plan of Reorganization, a
new Board of Directors will be appointed.  This Board will
consist of one member of Kmart's senior management, four
directors selected by the Plan Investors, two directors selected
by the Unsecured Creditors' Committee, and two directors
selected by the Financial Institutions' Committee.  There are
limitations on the number of directors that can be an officer,
employee or family member of a Plan Investor and the Plan of
Reorganization requires that the Board shall comply with all
qualification, experience and independence requirements under
any applicable law, including the Sarbanes-Oxley Act of 2002,
and the rules then in effect of the stock exchange or quotation
system on which the Company's new common stock is listed or is
anticipated to be listed.

     * Pre-petition lenders, who are owed approximately $1.08
billion, in settlement and compromise of certain issues, will
receive cash in an amount equal to 40 percent of the principal
amount of their claims in lieu of shares of new common stock of
the reorganized Kmart.

     * A portion of the cash to be utilized by the reorganized
Kmart to make these payments to the lenders will be provided by
two significant creditors -- ESL Investments, Inc. and Third
Avenue Value Fund.  In exchange for this investment, which will
total at least $140 million, these Plan Investors will receive
the shares of stock of reorganized Kmart that would have
otherwise been allocated to the lenders on account of their
claims.  In addition, ESL Investments has agreed to contribute
the cash distribution it would have received under the Plan of
Reorganization as a holder of approximately $380 million of pre-
petition bank debt in order to purchase additional shares of the
Company's new common stock.  ESL will also purchase up to $60
million of convertible secured notes, depending on reorganized
Kmart's liquidity needs.

     * Two other significant groups of unsecured creditors --
holders of pre-petition notes and debentures issued by Kmart in
the total face amount of approximately $2.3 billion and trade
creditors, service providers, and landlords with lease rejection
claims -- will share pro rata in the stock of reorganized Kmart,
other than the shares allocated to the Plan Investors.

     * Personal injury and other litigation claimants,
governmental claimants and other contingent claim holders will
receive a deferred cash payment in an amount that will afford
them a percentage recovery on their claims commensurate with the
estimated percentage recovery to holders of the pre-petition
notes and debentures, trade vendor claims, service provider
claims, and lease rejection claims.

     * Trade vendors meeting appropriate qualifications would
have the benefit for up to two years of a first lien on
substantially all owned real estate that is developed and
unencumbered, as well as a subordination provision to be
included in the Plan of Reorganization regarding future proceeds
of leasehold interests (excluding the current store closing
program and new financings), subject to early termination of the
program in April 2004 by written announcement in January 2004.

     * A Creditors' Trust will be established for the benefit of
the Company's creditors and, subject to the receipt of requisite
votes from classes under the Plan of Reorganization, holders of
trust preferred securities and/or common stock, to pursue all
causes of action arising out of the Company's Stewardship
Investigation.

     * Except for a minor interest of up to 2.5% of the
proceeds, if any, of the Creditors' Trust, current equity
holders would not receive any distributions following emergence
and their equity interests would be cancelled.

     * A "convenience class" will be created for creditors with
claims under $30,000 and creditors who elect to have their
claims allowed in relatively small amounts the option to be paid
a portion of their claim amounts in cash not to exceed $1,875
per claim.

                          Business Plan

Kmart's five-year business plan, a summary of which is included
in the Disclosure Statement, calls for a return to profitability
in fiscal 2004.  Kmart projects that, after a transition year in
fiscal 2003, the business will improve and EBITDA (earnings
before interest, taxes, depreciation and amortization) will grow
to $1.3 billion by 2007.  The business plan assumes moderate
annual increases in comparable store sales.

Day said, "Our business plan is based on our expectation that we
will continue to implement several key operational initiatives,
including our focus on being 'the store of the neighborhood' and
further testing of the 'store of the future' prototype, with the
goal of achieving significant improvements in the customer
experience. We intend to continue to eliminate underperforming
stock-keeping units (SKU's) and reallocate shelf space to more
profitable items.  Our marketing activities will continue to
emphasize our roots as a high/low retailer and the popular
exclusive brands like JOE BOXER, Martha Stewart Everyday, and
Thalia available only at Kmart."

Day concluded, "We are confident that with the continued support
of vendor partners through, among other things, the vendor lien
proposed in our Plan of Reorganization and the $2 billion exit
financing facility we have arranged, we will be able to continue
to improve the shopping experience, win back customers we have
disappointed in the past and return to profitability."

                         Exit Financing

As previously reported, Kmart has received a commitment for up
to $2 billion in exit financing from GE Commercial Finance,
Fleet Retail Finance Inc. and Bank of America, N.A.  This credit
facility, which will be secured by inventory, would replace the
Company's current $2 billion debtor-in-possession (DIP) facility
on the effective date of a Plan of Reorganization.  The
financing is subject to the satisfaction of customary conditions
to closing and would be available to Kmart to help meet its
ongoing working capital needs, including borrowings for seasonal
increases in inventory.

Kmart has filed motions with the Bankruptcy Court for a hearing
on January 28, 2003 to obtain authority to make certain payments
to the exit lenders in connection with its $2 billion exit
facility, to approve an amendment to its $2 billion DIP loan
facility, and to seek approval of the store-closing program
announced earlier this month.  If Court approval is granted,
inventory clearance sales at the closing stores would begin
shortly thereafter.  The distribution center in Corsicana, Texas
is slated to close in March.

                     Reorganization Progress

Kmart Corporation and 37 of its U.S. subsidiaries filed
voluntary petitions for reorganization under Chapter 11 of the
U.S. Bankruptcy Code on January 22, 2002.  In the past year,
Kmart has taken a number of actions intended to strengthen its
business operations and enhance its financial performance.
These steps include the closing of 283 underperforming stores in
the second quarter of 2002, rejecting leases for previously
closed stores, selling three corporate aircraft, streamlining
the Company's management structure, reducing staffing levels at
the Company's headquarters, and introducing more efficient
business practices throughout the organization.

A full-text copy of Kmart's Plan of Reorganization is available
at no charge at:

   http://www.kmartcorp.com/corp/story/pressrelease/PoR.pdf

The full text of Kmart's Disclosure Statement is available at no
charge in five parts at:


   http://www.kmartcorp.com/corp/story/pressrelease/Pages%20from%20Disclosure%20Statement-part%201.pdf
   http://www.kmartcorp.com/corp/story/pressrelease/Pages%20from%20Disclosure%20Statement-part%202.pdf
   http://www.kmartcorp.com/corp/story/pressrelease/Pages%20from%20Disclosure%20Statement-part%203.pdf
   http://www.kmartcorp.com/corp/story/pressrelease/Pages%20from%20Disclosure%20Statement-part%204.pdf
   http://www.kmartcorp.com/corp/story/pressrelease/Pages%20from%20Disclosure%20Statement-part%205.pdf

The documents are huge -- 27.5 megabytes in total.

Kmart Corporation is a mass merchandising company that serves
America through its Kmart and Kmart SuperCenter retail outlets.
The Company's common stock is currently quoted on the Pink
Sheets Electronic Quotation Service (http://www.pinksheets.com)
under the symbol KMRTQ.



KMART CORP.: Summary, Overview & Analysis of the Retailer's Plan
----------------------------------------------------------------
Kmart's Plan of Reorganization calls for a classic 5-step
deleveraging of the company's balance sheet:

     * existing equity interests are cancelled;

     * $7.8 billion of prepetition unsecured debt is wiped out;

     * Reorganized Kmart books $1.567 billion of new
       liabilities;

     * assets, under fresh start accounting principles, are
       written-down by $4.478 billion; and

     * new equity in the new deleveraged company, recorded on
       the balance sheet at $1.299 billion, is transferred to
       Kmart's old creditors in full compromise and settlement
       of their prepetition claims.

                          Kmart Corporation
                  Condensed Projected Balance Sheets
              Assuming an April 30, 2003 Effective Date

                                 Pre-Emergence   Post-Emergence
                                 -------------   --------------
   ASSETS
   Current Assets
      Cash and equivalents         $325,000,000    $300,000,000
      Merchandise inventory       4,053,000,000   4,264,000,000
      Other current assets          585,000,000     805,000,000
                                 --------------  --------------
   Total current assets           4,963,000,000   5,369,000,000
   Property and equipment         4,299,000,000               0
   Other assets                     585,000,000               0
                                 --------------  --------------
   Total Assets                  $9,847,000,000  $5,369,000,000
                                 ==============  ==============
   LIABILITIES & EQUITY
   Current Liabilities
      Accounts payable              923,000,000     923,000,000
      Other current liabilities     939,000,000     994,000,000
                                 --------------  --------------
   Total current liabilities      1,862,000,000   1,917,000,000
   Long-term debt                             0     115,000,000
   Other long-term liabilities      641,000,000   2,038,000,000
                                 --------------  --------------
   Total liabilities not
      subject to compromise       2,503,000,000   4,070,000,000

   Liabilities subject to
      compromise                  7,807,000,000               0

   Shareholders' equity            (463,000,000)  1,299,000,000
                                 --------------  --------------
   Total Liabilities & Equity    $9,847,000,000  $5,369,000,000
                                 ==============  ==============


             Valuing the Enterprise and the New Equity

Miller Buckfire Lewis & Co., LLC and Dresdner Kleinwort
Wasserstein, Inc., Kmart's financial advisors, will provide
expert to Judge Sonderby at the Confirmation Hearing that the
reorganization value of Reorganized Kmart ranges from $2.25 to
$3.0 billion.  Deducting the total amount of long-term net debt
that Reorganized Kmart will be obligated to repay, this means
the value of the New Equity in Reorganized Kmart ranges from
$789 million to $1.539 billion.

                      The Business Plan

The Financial Advisors valuation work is premised on a variety
of projections provided by Kmart's Management:

   Annual Store Count            Annual Net Sales
   ------------------            ----------------
   2002   1,832  +++++++++++++++ 2002 $30,808  ++++++++++++++
   2003   1,513  ++++++          2003 $25,427  +++++++
   2004   1,523  ++++++          2004 $25,614  +++++++
   2005   1,533  ++++++          2005 $26,981  +++++++++
   2006   1,553  +++++++         2006 $28,478  +++++++++++
   2007   1,583  ++++++++        2007 $30,170  +++++++++++++

   Percentage Increase in Sales  Same Store Sales Increases
   ----------------------------  --------------------------
   2003      --  .               2003     1.1% ++
   2004     0.7% +               2004     3.8% ++++++
   2005     5.3% +++++++++++     2005     4.5% ++++++++
   2006     5.5% +++++++++++     2006     4.3% +++++++
   2007     5.9% ++++++++++++    2007     4.0% +++++++

   Gross Margin                  Inventory Turns
   ------------                  ---------------
   2002    18.0% +               2002     4.0  ++++++++
   2003    19.8% +++++           2003     4.2  ++++++++
   2004    20.3% ++++++          2004     4.4  ++++++++
   2005    21.0% ++++++++        2005     4.6  +++++++++
   2006    21.3% ++++++++        2006     4.8  +++++++++
   2007    21.5% +++++++++       2007     5.0  ++++++++++

   SG&A Expense                  Interest Expense
   ------------                  ----------------
   2002  $6,264  +++++++++++++   2002    $147  ++++++++++++
   2003  $5,121  ++++++          2003    $127  +++++++++
   2004  $4,814  ++++            2004     $86  ++++
   2005  $5,066  ++++++          2005     $73  ++
   2006  $5,258  +++++++         2006     $61  +
   2007  $5,409  ++++++++        2007     $51  .

   Net Earnings Projections      EBITDA Projections
   ------------------------      ------------------
   2002 ($3,264) .               2002    ($32) .
   2003   ($286) .               2003     $75  .
   2004    $181  ++++            2004    $424  +++++
   2005    $332  +++++++         2005    $700  ++++++++
   2006    $465  ++++++++++      2006    $955  +++++++++++
   2007    $644  +++++++++++++++ 2007  $1,284  ++++++++++++++++

Kmart explains that net sales will start to climb as 70 new
stores are opened between 2003 and 2007.  Same-store sales will
increase because of improvements in operational execution,
increased promotional productivity and improved product flow.
Improved product flow and allocation, SKU rationalization and
[unspecified] store closures will cause inventory turns to
increase.  The 25% increase in inventory turns from 2002 to 2007
is, Kmart says, a result of right-size purchasing and flow path
optimization.

Gross margin improvements, Kmart says, will come from improved
promotional productivity, favorable product mix and markon
improvement due to increased import purchases.  Additionally,
recently implemented inventory control and loss prevention
programs will help control shrinkage.  Additionally,
reclassifications of credits previously defined as co-op
advertising recoveries to a reduction in cost of sales will
result in improved gross margins.

Selling, general and administrative expenses will be lower
because the Fresh Start Accounting asset value write-downs will
reduce depreciation expenses.  SG&A costs will be further
reduced through improved operating procedures and productivity
at the stores and cost control initiatives at Kmart
Headquarters.


               Classification & Treatment of Claims

The Plan groups and lines-up Kmart's creditors in 12 classes:

Class Description       Amount Owed  Recovery Under the Plan
----- -----------       -----------  -----------------------
1    Secured Claims    $51,000,000  At the Debtors' option:
                                     (a) payment of the secured
                                         claim in full in Cash;
                                     (b) reinstatement of the
                                         debt; or
                                     (c) surrender of the
                                         collateral
2    Priority Claims            $0  Payment in full in Cash

3    PBGC Claims                $0  All claims, if any, are
                                     Reinstated

4    Prepetition    $1,080,000,000  40% in Cash on the
      Lenders'                       Distribution Date,
      Claims                         representing a complete
                                     settlement of all
                                     Guarantee-related disputes,
                                     through a new equity buy-
                                     back program

5    Prepetition    $2,272,611,000  Approximately 15% in the
      Noteholders'                   form of New Common Stock,
      Claims                         including stock that would
                                     be distributed to holders
                                     of the TOPrS if those
                                     obligations were not
                                     subordinated to the
                                     Noteholders by their own
                                     terms

6    Trade Vendor   $4,300,000,000  Approximately 12% in the
      and Lease                      form of New Common Stock
      Rejection                      plus a pro rata share of
      Claims                         any recoveries by the
                                     Litigation Trust

7    Other            $200,000,000  Approximately 12% in the
      Unsecured                      form of New Common Stock
      Claims                         plus a pro rata share of
                                     any recoveries by the
                                     Litigation Trust

8    General            $5,000,000  6.25% in Cash on the First
      Unsecured                      Periodic Distribution Date
      Claims for less
      than $30,000
      or reduced to
      $30,000 to
      qualify for
      for Convenience
      Class Treatment

9    Trust            $648,000,000  No initial recovery as
      Preferred                      claims are subordinated to
      Obligations                    Class 5, but TOPrS holders
                                     will receive a pro rata
                                     share of any recoveries by
                                     the Litigation Trust if
                                     Class 9 votes to accept the
                                     Plan

10    Intercompany             N/A   Kmart will figure it out
      Claims

11    Subordinated             N/A   No initial recovery, but if
      Sec. 510(b)                    all impaired creditors vote
      Securities                     to accept the Plan, a pro
      Fraud Claims                   rata share of 2.5% of
                                     recoveries by the
                                     Litigation Trust, shared
                                     with members of Class 12

12    Equity                   N/A   No recovery, except if all
      Interests                      impaired creditors vote to
                                     accept the Plan, then
                                     equity holders will share
                                     2.5% of recoveries by the
                                     Litigation Trust, pro rata
                                     with Class 11


                       The Litigation Trust

In consultation with the Creditors' Committees, all of Kmart's
Litigation Claims and Causes of Action will be transferred to a
Trust to be managed by whoever the Committees want to manage it.
Those claims include potential lawsuits against former
executives involved in questionable accounting practices, former
executives who received retention loans, and others tagged as
bad guys during the Company's Stewardship Investigation.
Unsecured creditors get 97.5% of what the Litigation Trust
recovers and equity holders get 2.5% provided that everybody
votes to accept the Plan.


                     The Investment Agreement

ESL Investments, Inc. and Third Avenue Value Fund (represented
in Kmart's case by Scott K. Charles, Esq., at Wachtell, Lipton,
Rosen & Katz) are two of Kmart's largest creditors, holding, as
of January 21, 2003:
                                                Third Avenue
                              ESL Investments    Value Fund
                              ---------------   ------------
     Notes & Debentures       $1,161,175,000     $98,860,000
     Trade Claims                 60,799,352      79,251,449
     Preferred Obligations         1,434,100               0
     Bank Debt                   383,514,452               0

The Investment Agreement among Kmart, ESL and Third Avenue calls
for the Plan Investors to invest $293.4 million in exchange for
new shares in Reorganized Kmart.  The investment has three
components:

   $153,400,000 comes from the cash ESL would otherwise receive
                under the Plan in exchange for its bank debt-
                related claims;

   $140,000,000 is an additional cash investment in exchange
                for New Kmart Stock; and

    $60,000,000 is a further cash investment -- if Kmart needs
                the money to satisfy their cash obligations
                under the Plan and the Reorganized Company's
                Cash Balance is less than $300,000,000 or total
                liquidity falls below $1.545 billion within the
                90-day period following the Effective Date --
                in exchange for a callable convertible note.

The Plan Investor will pay $10 per share for their New Common
Stock.  ESL will have a two-year option to purchase up to $86
million of additional shares of New Common Stock at $13 per
share.  During the one-year period following the Effective Date,
ESL agrees that it won't dump more than 20% of its shares.  For
the Plan Investors' comfort, the Investment Agreement requires
that the $2 billion Exit Financing facility be in place,
Reorganized Kmart must have $1.25 billion in Excess Availability
under the Exit Facility, and Adjusted Excess Availability must
total at least $589,000,000.  Also, the Investment Agreement
requires the Effective Date to occur no later than May 30, 2003.
ESL gets two additional cookies under the Investment Agreement:

     (1) a $10,000,000 Commitment Fee payable on the Effective
         Date or payable as a Break-Up Fee if the Investment
         Agreement is terminated because Kmart accepts an
         alternative transaction; and

     (2) reimbursement of up to $5,000,000 of ESL's expenses
         incurred in connection with this transaction.

In the event that ESL and Third Avenue exercise all of their
options available under the Investment Agreement, ESL could hold
more than 40% of the New Common Stock in Reorganized Kmart and
Third Avenue could hold more than 10% of the new equity issued
and outstanding as of the Effective Date.


                      Two-Year Vendor Lien

Vendors who have provided Kmart with credit during their chapter
11 proceedings and who continue to provide trade credit post-
emergence will receive a lien on Reorganized Kmart's assets.
That lien will be subordinate to Reorganized Kmart's obligations
to the Exit Lenders and will expire two years following the
Effective Date.


                Reorganization Beats Liquidation

To confirm their plan of reorganization, the Debtors will
demonstrate at the Confirmation Hearing that the distributions
creditors receive under the Plan are superior to what creditors
would get in the event of a chapter 7 liquidation.  This
demonstration is what's meant by the so-called "best interests"
test under the Bankruptcy Code.

Kmart's Management, with the assistance of AlixPartners LLC, has
prepared a Liquidation Analysis.  If Kmart were liquidated by a
chapter 7 trustee, the Debtors believe their estates would be
reduced to a $4.4 to $5.4 billion pile of cash.  Most of that
value would come from liquidation of the company's merchandise
inventory at 53% to 62% of cost.  The $4.6 billion of property
and equipment [which Reorganized Kmart will write-down to zero]
is valued at $593 to $878 million in a liquidation.  Kmart
projects that a chapter 7 trustee could pull an additional $240
to $405 million into the estate by pursuing avoidance actions.
The Debtors also think a trustee would fetch $152 to $192
million for Kmart's Pharmacy Lists.

Administrative expenses would eat-up $1.2 to $1.3 billion of
that $4.4 to $5.4 pile of cash, and secured creditors would take
their cut, leaving $3.2 to $4.1 billion for payment of unsecured
claims.

The next layer of claims to pay would be those that arose during
the chapter 11 proceedings.  Payment of the chapter 11 claims
would reduce the cash pile to $415 to $1.2 billion.

Priority claim would consume another $200 to $500 million,
leaving $215 to $774 million on the table for prepetition
unsecured creditors and resulting in 2% to 4% dividends on
account of those claims.  Because the Plan delivers more than 2%
to 4% to Kmart's prepetition general unsecured creditors, the
Plan complies with the "best interests" test articulated at
11 U.S.C. Sec. 1129(a)(7).  (Kmart Bankruptcy News, Issue No.
45; Bankruptcy Creditors' Service, Inc., 609/392-0900)


L-3 COMMS: Names Steve Kantor President, SPD Technologies Group
---------------------------------------------------------------
L-3 Communications (NYSE:LLL) announced that Steve Kantor has
joined the company as president of SPD Technologies Group, which
includes L-3's SPD Technologies, Power Paragon, Henschel and
PacOrd units.

In this role, Mr. Kantor will oversee all of SPD Technologies'
operations, with specific emphasis on product integrity,
customer satisfaction, growth and partnering. Mr. Gene Dotson
will assume the position of vice president of Strategic Planning
for the SPD Technologies Group, reporting directly to
Mr. Kantor.

Mr. Kantor, age 58, has over 35 years of experience in the
Defense Electronics industry, serving the U.S. Department of
Defense, prime contractors and OEM's, and foreign allies. Most
recently Mr. Kantor served as president of BAE SYSTEMS'
Reconnaissance and Surveillance Systems, a position he held
since 1998. Prior to that, Mr. Kantor held various executive
positions at Lockheed Martin, Loral and United Technologies.

"Steve is an accomplished executive who has continually
demonstrated his capability to build organizations, achieve
superior performance, satisfy customers and grow a business in
today's competitive and challenging environments," said Frank C.
Lanza, chairman and chief executive officer of L-3
Communications. "We look forward to Steve's contributions as we
guide our SPD businesses back onto the growth track."

Mr. Kantor holds a Bachelor of Science degree in Electrical
Engineering from the New York Institute of Technology.

Headquartered in New York City, L-3 Communications is a leading
merchant supplier of Intelligence, Surveillance and
Reconnaissance products, secure communications systems and
products, avionics and ocean products, training products,
microwave components and telemetry, instrumentation, space and
wireless products. Its customers include the Department of
Defense, selected U.S. government intelligence agencies,
aerospace prime contractors and commercial telecommunications
and wireless customers.

To learn more about L-3 Communications, please visit the
company's Web site at http://www.L-3Com.com

                         *   *   *

As previously reported in Troubled Company Reporter, Standard &
Poor's expected to raise its corporate credit rating on New
York, New York-based L-3 Communications to double-'B'-plus from
double-'B' after the defense company completes its offering of
approximately $900 million in common stock and $750 million in
senior subordinated debt and assuming that any pending
acquisition activity is on a scale that can be accommodated by
the company's enhanced financial resources. At the same time,
the rating on the company's subordinated debt would be raised to
double-'B'-minus from single-'B'-plus. The outlook would be
stable. The company's ratings remain on CreditWatch with
positive implications, where they were placed on June 6, 2002.


LEVEL 3 COMMS: Earns Court Approval to Purchase Genuity's Assets
----------------------------------------------------------------
Level 3 Communications, Inc., (Nasdaq: LVLT) announced that a
federal bankruptcy court in Manhattan has approved its proposed
transaction with Genuity, Inc.

At a hearing on Friday, the judge overseeing Genuity's Chapter
11 proceedings issued an order authorizing Level 3 to purchase
substantially all of Genuity's assets and operations, pursuant
to the companies' previously announced definitive agreement.

As consideration, Level 3 will pay up to $242 million in cash
and assume a significant portion of Genuity's existing long-term
operating agreements. Level 3's cash consideration at closing
could be reduced subject to certain adjustments, which could be
material.

Closing is expected to occur in February. The transaction
remains subject to additional regulatory approval and other
customary closing conditions.

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.

Level 3 Communications Inc.'s 11.000% bonds due 2008
(LVLT08USR1), DebtTraders reports, are trading at 65 cents-on-
the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=LVLT08USR1
for real-time bond pricing.


LIBERTY MEDIA: Unit Reaches Pact to Restructure Astrolink Int'l
---------------------------------------------------------------
Liberty Satellite & Technology, Inc., (OTC Bulletin Board:
LSTTA, LSTTB), a majority owned entity of Liberty Media
Corporation (NYSE: L), reached agreement with Lockheed Martin
Corporation, Northrop Grumman Space & Mission Systems Corp.
(formerly TRW Inc.), and Telespazio S.p.A., in connection with
the previously announced proposed restructuring of ASTROLINK
International LLC. Astrolink was formed in 1999 to establish and
operate a global communications system to deliver next-
generation broadband service. Liberty Satellite currently owns
31.5% of Astrolink, with the remainder owned directly or
indirectly by Lockheed Martin, Northrop Grumman, and Telespazio.

Under the agreement, Liberty Satellite will acquire
substantially all of the assets of Astrolink. Astrolink
simultaneously signed agreements with Lockheed Martin and
Northrop Grumman for completion of two satellites. The parties
also reached agreement on the settlement of all claims related
to the previous termination of Astrolink's major procurement
contracts and all other major third party creditor claims. The
closing of Liberty Satellite's acquisition of the Astrolink
business is subject to regulatory approvals and other closing
conditions, including Liberty Satellite obtaining satisfactory
funding for the business from additional investors, third party
sources of financing, or firm capacity commitments from
prospective customers. Closing is expected to occur on or before
October 31, 2003.

If the closing occurs, Liberty Satellite will pay approximately
$43 million in cash and will issue approximately $3 million in
value of Series A common stock as total consideration for the
Astrolink assets, including certain existing satellite and
launch contracts, and the settlement of all claims against
Astrolink. In addition, Liberty Satellite will provide
additional interim funding for Astrolink pending closing. If the
transactions are consummated, Liberty Media Corporation also
will make a capital contribution to Liberty Satellite in an
amount equal to 10% of the value of Liberty Media's equity
holdings in Liberty Satellite at the time, up to a maximum
commitment of $55 million, in exchange for shares of Liberty
Satellite's Series B common stock at fair market value at
closing.

Liberty Satellite currently plans to pursue a revised operating
plan for the new Astrolink system, taking into account current
financial and market factors. The revised operating plan
currently envisions launching Ka-band satellites to provide
enterprise customers with virtual private networks and related
advanced services, as well as their use in fulfilling the
expanding needs for bandwidth by various government agencies.

This agreement follows Liberty Satellite's announcement on
December 23, 2002, of an agreement, subject to closing
conditions, to increase its investment in Wildblue
Communications. Proceeds from the investment will be used to
continue funding Wildblue's business plan to provide satellite-
delivered, high speed Internet access to residential and small
business customers in areas not currently reached by competing
broadband technologies.

Liberty Satellite and Technology, Inc., known as LSAT, pursues
strategic opportunities worldwide in the distribution of
Internet data and other content via satellite and related
businesses. Through its majority-owned subsidiary, On Command
Corporation, LSAT is a leading provider of in-room movies,
broadband access and other entertainment and business services
to the hotel industry. LSAT also holds strategic ownership
positions in a range of video programming, satellite-delivered
broadband distribution and satellite communication businesses,
including Wildblue Communications, Astrolink International, and
Sky Latin America. LSAT is a consolidated subsidiary of Liberty
Media Corporation.

Liberty Media Corporation (NYSE: L, LMC.B) owns interests in a
broad range of video programming, broadband distribution,
interactive technology services and communications businesses.
Liberty Media and its affiliated companies operate in the United
States, Europe, South America and Asia with some of the world's
most recognized and respected brands, including Encore, STARZ!,
Discovery, QVC and Court TV.

Liberty Media Corp.'s 4.000% bonds due 2029 are presently
trading at about 56 cents-on-the-dollar.


MAGELLAN HEALTH: Planning for a Chapter 11 Bankruptcy Filing
------------------------------------------------------------
Magellan Health Services, Inc., "has undertaken an effort to
restructure its debt, which totaled approximately $1.0 billion
as of September 30, 2002, and to improve its liquidity," the
Company said in its annual report filed with the SEC yesterday.

At Sept. 30, 2002, Magellan's balance sheet shows $1 billion in
assets and $1.5 billion in liabilities.  Magellan's net loss in
Fiscal 2002 topped $700 million on $1.7 billion in revenues.

Headquartered in Columbia, Maryland, Magellan is the country's
leading behavioral managed care organization, with approximately
68million covered lives. Its customers include health plans,
government agencies, unions, and corporations.

                 Credit Agreement in Default

Magellan says its operations can no longer support its existing
capital structure and that it must restructure its debt to
levels that are more in line with its operations.  Although the
Company believes it has sufficient cash on hand to meet its
current operating obligations, the Company does not have
sufficient cash on hand or capacity to borrow under its senior
secured bank credit agreement dated February 12, 1998 (as
amended), to pay scheduled interest and to make contingent
purchase price payments coming due in February 2003.  In
addition, the Credit Agreement is in default.  Magellan says it
is currently in discussions with its bank lenders.

                   Gleacher is Advising

Magellan disclosed that it has retained Gleacher Partners, LLC
as its financial advisor to assist it in its efforts to
restructure its debt.

                Talks with the Noteholders

Magellan is also holding talks with members of an ad hoc
committee formed by the holders of its 9.375% Senior Notes due
2007 and 9.0% Series A Senior Subordinated Notes due 2008.  The
Lenders and the Ad Hoc Committee have each retained separate
financial and legal advisors to assist them in the restructuring
process.

The Company has had discussions with the Lenders, the Ad Hoc
Committee and their separate financial and legal advisors and
has distributed to them a draft term sheet with respect to a
proposed financial restructuring. The proposed financial
restructuring outlined in the term sheet contemplates:

      (1) an exchange of the Subordinated Notes for
          substantially all of the equity of the Company,

      (2) reinstatement of the Senior Notes with
          modification of certain interest payments from
          cash to additional Senior Notes,

      (3) reinstatement of the obligations under the Credit
          Agreement with modified amortization payments, and

      (4) modification of the Company's contingent purchase
          price obligations to Aetna Inc. and an extension
          of the Company's customer contract with Aetna
          which currently expires December 31, 2003.

The term sheet also contemplates that the proposed financial
restructuring will be effected through commencement of a chapter
11 case under the U.S. Bankruptcy Code and the subsequent
consummation of a plan of reorganization.

In addition, the term sheet contemplates that the providers of
behavioral health services with whom the Company contracts, as
well as the Company's customers and employees, will not be
adversely affected by the restructuring, all debts owing to such
persons will continue to be paid in the ordinary course of
business, and that the Company will continue to operate in the
ordinary course of business.

Although the term sheet is based on conversations with the
relevant constituencies, none of the parties has agreed or is
obligated to implement the proposed restructuring or any other
restructuring.

                   Credit Agreement Waivers

On October 25, 2002, the Company entered into an agreement
pursuant to which the Lenders granted the Company a waiver
through December 31, 2002 of any event of default that may exist
as a result of the failure of the Company to comply with any of
the financial covenant requirements for the fiscal quarter ended
September 30, 2002.  Under the October Waiver, the interest
rates and commitment fees increased by 0.5 percent. In addition,
the Company's ability to incur additional indebtedness under the
Credit Agreement is limited to circumstances under which the
Company otherwise does not have available unrestricted cash and
in no event can such additional indebtedness total more than $20
million during the term (or the amount of availability,
whichever is less).

On January 1, 2003, the Company entered into an amendment and
waiver, which extended the agreements provided for in the
October Waiver and which also provided for a waiver of any
events of default with respect to financial covenants for the
quarter ended December 31, 2002 through the new waiver
expiration date of January 15, 2003. In addition, the January
Waiver amended the Credit Agreement such that the London inter-
bank offer rate ("LIBOR") option will no longer be available to
the Company for any loans which are incurred or roll over after
January 1, 2003. The Company's interest expense under the Credit
Agreement will increase, as interest on such loans will now be
based on the prime rate plus the applicable spread rather than
LIBOR rates plus the applicable spread, which have historically
been lower.

The January Waiver expired on January 15, 2003, and has not been
extended and therefore there exist events of default with
respect to certain of the financial covenants under the Credit
Agreement . . .and those events of default prevent the Company
from borrowing more money under the Credit Agreement or getting
backing for letters of credit.  Further, the Lenders have the
ability to accelerate the Company's obligations under the Credit
Agreement and exercise their remedies under other agreements and
documents (including guaranties and security agreements executed
for the benefit of the Lenders).  An acceleration of obligations
under the Credit Agreement would give the holders of the Senior
Notes and the holders of Subordinated Notes the ability to
accelerate the obligations under the those debt instruments and
to exercise their remedies.

                 One More Event of Default

In addition, the State of Tennessee's Department of Commerce and
Insurance sought and received on an ex parte basis from the
Chancery Court of the State of Tennessee (20th Judicial
District, Davidson County), an order of seizure of Tennessee
Behavioral Health, Inc., one of the Company's subsidiaries.  As
a result of the entry of the Tennessee Order, a further default
has occurred under the Credit Agreement which has the effect of
immediately accelerating the obligations under the Credit
Agreement and giving the Lenders the right to exercise their
remedies.  This acceleration also constitutes a default under
the bond indentures governing the Company's Senior Notes and
Subordinated Notes.

The Company is continuing to seek appropriate waivers under the
Credit Agreement. In addition, the Company is seeking to have
the Tennessee Order vacated or withdrawn and is currently in
discussions with the State of Tennessee to resolve the matter.
There can be no assurance that the Company will be successful in
either of these efforts. In the event that the Lenders exercise
their rights with respect to the acceleration of obligations
that has occurred or exercise their right to accelerate the
obligations as a result of the defaults of financial covenants,
or if the bondholders exercise their right to accelerate the
obligations under the Senior Notes or Subordinated Notes due to
either such acceleration under the Credit Agreement, the Company
may need to seek protection under the U.S. Bankruptcy Code.

                 There is a Business Plan

Magellan says that it believes it can reduce administrative
costs and improve customer service by implementing best
practices across the organization and by standardizing and
consolidating processes as appropriate.  To that end, management
approved and implemented business improvement initiatives,
primarily in one of its operating segments, during the first
quarter of fiscal 2002.  In June of 2002, these business
improvement initiatives were extended to the Company as a whole,
and formally termed Accelerated Business Improvement ("ABI").
Under ABI, the Company, along with the aid of an outside
consultant hired by the Company, has critically analyzed its
operations and administrative functions. Based on these
analyses, an action plan to reduce operating inefficiencies was
developed and implemented in fiscal 2002. The Company has
incurred approximately $14.2 million in fiscal 2002 related to
ABI and pre-ABI business improvement initiatives. The Company
continues to explore and implement initiatives under ABI and
expects to incur approximately $10.0 million to $20.0 million of
additional costs in fiscal 2003 with respect to such activities.
The Company expects to fund these costs with internally
generated funds.


METATEC: Sells Electronic Software Delivery Business for $1.1MM
---------------------------------------------------------------
Metatec(R) International, Inc., (OTCBB:META) announced the sale
of its Internet-based electronic software distribution business
to Digital River, Inc., a global e-commerce outsource provider
based in Minneapolis, Minn.

Under the terms of the agreement, Digital River acquired certain
assets and assumed certain liabilities associated with Metatec's
ESD business, and Metatec received approximately $1.1 million in
cash and notes, subject to adjustment based on an earn out
computation.

"The sale of our ESD business is consistent with the other steps
we've taken this past year to direct our focus on the growth of
our supply chain solutions business," said Christopher A. Munro,
Metatec president and chief executive officer. "Our ESD business
is a natural fit with the e-commerce solutions Digital River has
successfully marketed since the company's founding in 1994."

"With our acquisition of Metatec's ESD business, we plan to
extend our target market by moving into the enterprise software
market," said Joel Ronning, Digital River's chief executive
officer. "By integrating Metatec's platform, we can offer large
publishers a highly cost effective and efficient solution for
electronic management, maintenance and distribution of software
for enterprise licensees."

Metatec began offering Web-based software delivery services in
1999 when it acquired the business and technology from a New
Jersey-based company. Metatec's product offering, called Metatec
Express, became one of the earliest products specializing in
secure, managed delivery of software, digital documents and
information products for business customers over the Internet,
corporate Intranets and Extranets.

Digital River, a leading global e-commerce outsource provider
founded in 1994, offers more than 32,000 companies the ability
to cut costs and grow their businesses by using its complete e-
commerce systems and services. Services include e-commerce
strategy, site development and hosting, order and transaction
management, system integration, product fulfillment and returns,
e-marketing and customer service. Digital River's clients
include Symantec, Motorola, 3M, Major League Baseball, H&R
Block, Novell, Autodesk, and Staples.com. For more details about
Digital River, visit the corporate Web site at
http://www.digitalriver.com

Digital River is a registered trademark of Digital River, Inc.
All other company and product names are trademarks,
registrations or copyrights of their respective owners.

Metatec enables companies to streamline the process of
delivering products and information to market by providing
technology driven supply chain solutions that increase
efficiencies and reduce costs. Technologies include a full range
of supply chain solutions and CD-ROM and DVD manufacturing
services. Extensive real-time customer-accessible online
reporting and tracking systems support all services. Metatec
operations are based in Dublin, Ohio.

More information about Metatec is available by visiting the
company's Web site at http://www.metatec.com

At September 30, 2002, the Company's balance sheets show a total
shareholders' equity deficit of approximately $11 million.


METROMEDIA FIBER: Sells Single Conduit to AGL Networks Inc.
-----------------------------------------------------------
Metromedia Fiber Network, Inc., the leading provider of optical
communications infrastructure solutions, sold a single fiber
conduit in portions of MFN's completed network in the Phoenix
market to AGL Networks, LLC, a wholly owned subsidiary of AGL
Resources Inc.

This sale underscores the value of MFN's network topography,
which runs through the major business district in Phoenix and
extends to the outlying Tempe area. MFN remains the only
licensed dark fiber provider in the Phoenix area, providing the
Phoenix business market with an alternative to traditional
telecommunications services.

The remaining conduit will stay under the ownership and
operation of MFN. In keeping with the Company's unique business
model, MFN will continue to lease dark fiber to enterprise and
carrier customers in the Phoenix area. The Company also has
plans to roll out additional services in this market in the near
future.

"MFN's presence offers businesses in the Phoenix metropolitan
area access to our unique value proposition that enables them to
have a secure, reliable and private network with virtually
unlimited capacity," said Bill LaPerch, Senior Vice President of
Network Services, MFN. "Phoenix's growing business market holds
tremendous potential for MFN's service. We are looking forward
to working with more area businesses as they take advantage of
our offering."

MFN is the leading provider of optical communications
infrastructure solutions. The Company combines the most
extensive metropolitan area fiber network with a global optical
IP network, state-of-the-art data centers, award-winning managed
services and extensive peering relationships to deliver fully
integrated, outsourced communications solutions to high-end
enterprise companies. The all-fiber infrastructure enables MFN
customers to share vast amounts of information internally and
externally over private networks and a global IP backbone,
creating collaborative businesses that communicate at the speed
of light.

PAIX.net, Inc., a subsidiary of MFN and the original neutral
Internet exchange, offers secure, Class A co-location facilities
where ISPs and other Internet-centric companies can form public
and private peering relationships with each other, and have
access to multiple telecommunications carriers for circuits
within each facility.

On May 20, 2002, Metromedia Fiber Network, Inc., and most of its
domestic subsidiaries commenced voluntary Chapter 11 cases in
the United States Bankruptcy Court for the Southern District of
New York. For more information on MFN, please visit its Web site
at http://www.mfn.com


METROMEDIA FIBER: Sells French & Dutch Ops. to Management Teams
---------------------------------------------------------------
Metromedia Fiber Network, Inc., the leading provider of optical
communications infrastructure solutions, announced today that
its European strategy will focus on its core markets of UK and
Germany/Austria. In keeping with this strategy, the Company's
European holding company, MFN BV, has sold its operations in
France and the Netherlands to management buyout teams, and its
metropolitan fiber network in four Dutch cities to Global Voice
Network Limited.

These sales will turn over operations of the data centers to the
management teams, along with the Company's collocation and
managed services customers. The acquirers will continue to run
these data centers and metropolitan area networks without any
interruption to customers.

MFN, Inc., and MFN BV will maintain ownership in the Company's
global IP network and continue to provide IP services to the
management buy-out teams for resale to their customers, as well
as to the Company's global customers with a presence in France
and the Netherlands.

"We are looking ahead at a long term strategy that will not only
strengthen our current position, but also allow us to grow. This
sale will allow customers in these data centers and on the
metropolitan area networks to receive the same top-quality
service they demand from the same expert staff, without any
interruptions." said Tom Byrnes, President MFN International.
"Our global IP network will continue to service customers in
these facilities. We are looking forward to working with the
management teams and establishing a mutually beneficial
relationship that will prosper well into the future."

MFN will continue to operate its data centers in London,
Frankfurt and Vienna, and its metropolitan area networks in
London and Germany. These cities will form the foundation of the
Company's European presence.

MFN is the leading provider of optical communications
infrastructure solutions. The Company combines the most
extensive metropolitan area fiber network with a global optical
IP network, state-of-the-art data centers and award winning
managed services to deliver fully integrated, outsourced
communications solutions to high-end companies. The all-fiber
infrastructure enables MFN customers to share vast amounts of
information internally and externally over private networks and
a global IP backbone, creating collaborative businesses that
communicate at the speed of light.

Customers can take advantage of MFN's complete, end-to-end
solution or select individual components to complement their
existing infrastructures. By leasing MFN's metropolitan and
regional fiber, customers can create their own, private optical
network with virtually unlimited, un-metered bandwidth at a
fixed fee. For more reliable, secure and high-performance
Internet connectivity, customers can use MFN's private IP
network to communicate globally without ever touching the
public-switched network. Moreover, MFN's comprehensive managed
services enable companies to create a world-class Internet
presence, optimize complex sites and private optical networks,
and transform legacy applications, all with a single point of
contact.

On May 20, 2002, Metromedia Fiber Network, Inc., and most of its
domestic subsidiaries commenced voluntary Chapter 11 cases in
the United States Bankruptcy Court for the Southern District of
New York. For more information on MFN, please visit
http://www.mfn.com


MID-POWER SERVICE: Files for Chapter 11 Reorganization in Nevada
----------------------------------------------------------------
Mid-Power Service Corp., (OTCBB: MPSC) and a wholly owned
subsidiary, Mid-Power Resource Corp., filed petitions in the
United States Bankruptcy Court for the District of Nevada in Las
Vegas seeking protection under Chapter 11 of the Bankruptcy
Code.

These Chapter 11 petitions were filed following the termination
of settlement negotiations with Edward Mike Davis and prior to
expiration of the temporary restraining order and the hearing on
Mid-Power's motion for a preliminary injunction in the pending
action initiated by Mid-Power against Edward Mike Davis, Mid-
Power Service Corporation, et al. v. Edward Mike Davis, et al.,
in Clark County, Nevada District Court. This state court action,
initiated by Mid-Power in December 2002, included causes of
action for fraud, breach of warranty, and conversion associated
with Mid-Power's acquisition of the Clear Creek, Utah, property
and additional claims related to Colorado and Wyoming oil and
gas ventures with Davis. Davis has also filed lawsuits in
Colorado and Wyoming against Mid-Power respecting those
ventures. The filing of the Chapter 11 petitions automatically
stays further proceedings in the pending Nevada, Colorado and
Wyoming lawsuits.

Davis is Mid-Power's single largest unsecured creditor as a
result of the issuance to him of a $10.0 million promissory note
as partial consideration for the acquisition of the Clear Creek
property in June 2002. Davis also owns approximately 61.2
percent of Mid-Power's outstanding common stock, which he also
received in the Clear Creek acquisition. Mid-Power's second
largest unsecured creditor is SCRS Investors, which is
principally owned by James W. Scott, Mid-Power's president,
chief executive officer and a director.

Mid-Power will continue to manage and operate its properties and
business as a debtor-in-possession under the jurisdiction of the
Bankruptcy Court and in accordance with the applicable
provisions of the Bankruptcy Code. As part of the Chapter 11
proceeding, Mid-Power expects to file a plan of reorganization
for consideration by its creditors and approval by the court.


MID-POWER SERVICE: Case Summary & Largest Unsecured Creditors
-------------------------------------------------------------
Lead Debtor: Mid-Power Service Corporation
             3800 Howard Hughes Parkway, Suite 860-A
             Las Vegas, NV 89109
             Aka Caplan Corporation

Bankruptcy Case No.: 03-10874

Debtor affiliates filing separate chapter 11 petitions:

     Entity                                     Case No.
     ------                                     --------
     Mid-Power Resource Corporation             03-10877

Type of Business: Mid-Power Service is currently implementing a
                  plan to acquire oil and gas properties for
                  exploration and development, to acquire fuel
                  source for power generation, to develop
                  energy-related technologies, and to generate
                  and trade electrical power.

Chapter 11 Petition Date: January 24, 2003

Court: District of Nevada (Las Vegas)

Judge: Robert C. Jones

Debtors' Counsel: Laurel Davis, Esq.
                  Lionel Sawyer & Collins
                  300 S 4th St. #1700
                  Las Vegas, NV 89101
                  Tel: (702) 383-8888

                                   Total Assets: Total Debts:
                                   ------------- ------------
Mid-Power Service Corporation        $47,460,123  $14,713,353
Mid-Power Resource Corporation       $45,812,919   $3,286,485

A. Mid-Power Service's 2 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Rod Lighthipe               Consulting Services         $3,433

Evans, Frey & Walker        Consulting Services         $1,628

B. Mid-Power Resource's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
King Well Service           Trade                     $180,964

Boston Specialties, Inc.    Trade                      $51,666

RN Industries Trucking      Trade                      $51,460

Grosse Tete Well Service,   Trade                      $47,965
Inc.

Dowell a Div. of            Trade                      $39,970
Schiumberger

HTS Inc.                    Trade                      $35,810

Caskids Operating Co.       Trade                      $32,961

Petroleum Experience        Trade                      $32,835

Doyle's Valves, Inc.        Trade                      $22,625

Bourque Vacuum Service,     Trade                      $19,642
Inc.

Rig Tools, Inc.             Trade                      $17,112

Baker Hughes Business       Trade                      $12,953
Support

Howcroft Field Service      Trade                      $11,981

QTS Fishing & Rental Tools  Trade                       $9,915

Splicer Cable Service Inc.  Trade                       $9,745

Graco Fishing Rental Tools  Trade                       $9,015

The St. Paul                Trade                       $8,778

Turner Petroleum Land       Trade                       $5,267
Service

Commercial testing &        Trade                       $5,267
Eng. Co.

Intracoastal Liquid         Trade                       $4,594
Mud. Inc.


MOTO PHOTO: Wins Court Nod to Sell Assets to MOTO Franchise Corp
----------------------------------------------------------------
Moto Photo, Inc., (Pink Sheets:MOTOQ) said that on Tuesday,
January 21, it received the permission of the U.S. Bankruptcy
Court to sell substantially all of its assets to MOTO Franchise
Corporation for $2,661,258 plus or minus certain adjustments,
pursuant to an asset purchase agreement signed November 25,
2002. The asset purchase agreement contemplated that the sale of
the assets would be done under the provisions of section 363 of
the Bankruptcy Code and the Company filed a voluntary petition
under Chapter 11 of the Bankruptcy Code on November 25, 2002.
Under the terms of the asset purchase agreement, the closing on
the sale of the assets must occur on or before January 31, 2003.

"I am extremely pleased with the court's decision," stated Larry
Destro, the Company's President and CEO. "The court found that
the Company had acted in good faith and with fairness throughout
the negotiation process with MOTO Franchise Corporation and
subsequently throughout the process of soliciting additional
bidders. The Court also found that the offer from MOTO Franchise
Corporation was reasonable, within the valuation ranges provided
by an outside valuation expert, and fair."

MOTO Franchise Corporation was formed by Harry Loyle and the
principals of five of the Company's current area developers.
Mr. Loyle is a former director of the Company, owns
approximately 9% of the Company's common shares, and is
currently principal shareholder in and President and CEO of an
entity that is an area developer for the Company.

Upon completion of the sale, the franchise and related
activities will be conducted by MOTO Franchise Corporation with
Harry Loyle as President and CEO. Moto Photo, Inc., will cease
Company store operations and other operating activities by or
shortly after the completion of the sale. MOTO Franchise Corp.,
plans to maintain the Company's corporate headquarters in the
Dayton suburb of Trotwood, Ohio

Moto Photo, Inc., is a Dayton, Ohio based franchisor and
operator of 280 one-hour photofinishing stores in the U.S. and
Canada. More information is available at
http://www.motophoto.com


NATIONAL CENTURY: Court Approves Interim Compensation Procedures
----------------------------------------------------------------
To establish clear and equitable guidelines for employment and
compensation of a professional person, the Court approves these
procedures to apply in the Chapter 11 cases of National Century
Financial Enterprises, Inc., and its debtor-affiliates:

A. Need for Application to Employ and Affidavit

    The debtor-in-possession, trustee, examiner, or creditors'
    committee will not employ any accountant, appraiser,
    auctioneer, attorney, or other professional person unless
    application is made and the employment is specifically
    authorized by the Court.

    The moving party will also tender a proposed order granting
    authority to employ the professional as of the date of the
    application and under the terms set forth in the application
    and affidavit, subject to the provisions of Sections 327 to
    331 of the Bankruptcy Code.

B. Service of Application and Affidavit: Notice of Time to
   Object

    The application and affidavit will be served on the debtor
    or debtor-in-possession, trustee, examiner, any committee
    appointed under the Bankruptcy Code, and the case attorneys
    of each of those parties.  The certificate of service will
    be combined with a notice advising parties that any
    objection to the professional's disinterestedness or
    eligibility, based on the information in the application and
    affidavit or otherwise known to that party, must be
    presented to the Court within 20 days of service of the
    application and affidavit.

C. Application to employ Attorney for Debtor-In-Possession

    An application by the debtor-in-possession to employ an
    attorney may not be considered, and any order authorizing
    the employment may not be effective, until the attorney has
    filed the statement required by Section 329(a) and Rule
    2016(b) of the Federal Rules of Bankruptcy Procedure.

D. Application for Nunc Pro Tunc Order

    An application for a nunc pro tunc order authorizing
    employment of a professional will not be considered absent a
    showing of extraordinary circumstances.

E. Application to Employ Several Professionals

    If the debtor-in-possession, trustee, examiner, or
    creditors' committee proposes to employ more than one
    attorney, accountant, appraiser, auctioneer, or other
    professional person, the application will:

    -- state the specific facts the employment of more than one
       professional;

    -- describe the delineation of duties between or among the
       professionals; and

    -- set forth a method by which duplication of efforts will
       be monitored and eliminated.

F. Contents of Affidavit

    The affidavit of the professional proposed to be employed
    will contain:

    (a) a statement that the professional is not a relative, as
        defined in Section 101(45) of the Bankruptcy Code, of
        any Judge of the U.S. Bankruptcy Court for the Southern
        District of Ohio and a disclosure of any past or present
        connection with any judge as might render approval of
        employment improper;

    (b) a statement that the professional does not hold or
        represent an interest adverse to the estate;

    (c) a statement that, except as otherwise disclosed, the
        professional is a disinterested person, as defined
        Section 101(14)of the Bankruptcy Code;

    (d) a disclosure of the extent, if any, of the
        professional's past or present employment by, or
        representation of, any insider or creditor of the
        debtor, as defined in Section 101(2), (10), and (31) of
        the Bankruptcy Code, and the extent to which employment
  or representation was or is in connection with any
  matter related to this case;

    (e) a disclosure of the extent, if any, of the
        professional's past employment by or representation of
  the debtor;

    (f) a disclosure of the name and occupation of each person
        expected to perform professional or paraprofessional
        services, the hourly rates customarily charged and
        proposed to be charged for each person's services, and
        the proposed division of responsibility among the
        persons;

    (g) if the professional is to be employed as an accountant,
        appraiser, auctioneer, or other professional person, a
        good faith estimate of the amounts which will be
        requested for compensation for services and
        reimbursement of expenses;

    (h) if the professional does not maintain an office or place
        of business within 100 miles of Columbus, Ohio, a good
        faith estimate of anticipated travel time and expenses;

    (i) if the professional is to be employed by the debtor or
        debtor-in-possession, a disclosure of the amount, date,
        and source of any payment received from or on behalf of
        the debtor prepetition for services rendered or to be
        rendered, and expenses incurred or to be incurred in
        contemplation of or in connection with this case, the
        amount of payment applied or rendered prepetition in
        contemplation of or in connection with this case, the
        value and description of any property received for any
        services rendered or to be rendered for or on behalf of
        the debtor, and the amount and nature of any claims held
        against the debtor;

    (j) if the professional is to be employed as an auctioneer
        or appraiser, a statement that the professional is not
        an officer or employee of the Judicial Branch of the
        United States or the United States Department of
        Justice; and

    (k) if the professional is to be employed as an auctioneer,
        a statement that the professional is aware of, and will
        comply with the provisions of Bankruptcy Rule 6004(f)(I)
        and Local Bankruptcy Rule 6004-1.

G. Proposal to Increase Hourly Rates

    If a professional proposes any increase in the hourly rates
    set forth in the affidavit filed with the application to
    employ the professional, notice of the proposed change will
    be filed and served, not less than 20 days prior to the
    proposed change, on the debtor or debtor-in-possession,
    trustee, examiner, the chairperson of the creditors'
    committee.

H. Treatment of Payment of Retainer

    Any prepetition payment or postpetition retainer paid to a
    professional by the debtor, debtor-in-possession, or trustee
    will be fully disclosed, held and accounted for as if in
    trust for the payment of fees or reimbursement of expenses.

    Any payment or retainer may be drawn and applied
    contemporaneously to fees and expenses as appropriate for
    the services rendered without prior Court approval, however,
    an itemized accounting for all fees and expenses charged to
    said payment or retainer must be filed with the Court
    regardless of whether an application is filed under Sections
    5330 or 331.

I. Contents of Application for Compensation

    A professional seeking allowance of interim or final
    compensation for services or reimbursement of expenses
    pursuant to Sections 330, 331, 503(b)(2), 503(b)(l4), or
    5031b)(5), either for immediate or deferred payment, will
    file an application, which includes:

    (a) an itemization of professional and paraprofessional
        services rendered, which will contain the date on which
        each service was performed, a sufficient description of
        each service performed, the name and occupation of the
        person who rendered each service, the amount of time
        spent performing each service, and a disclosure of
        minimum time units attributed to certain services or to
        services generally in preparing time records or the
        itemization;

    (b) an itemization of necessary expenses incurred, which
        will contain a sufficient description of each expense
        and the actual amount of each expense;

    (c) a certification that a review of the itemizations has
        been conducted and that adjustments have been made for
        expenses which were unnecessary or excessive and for
        services which were duplicative or otherwise not
        compensable under the Code or this Order;

    (d) a summary of adjusted professional and paraprofessional
        time, which lists:

          (i) each person who rendered services,

         (ii) total hours expended by each person listed,

        (iii) if compensation is sought on an hourly basis,
              hourly rate of compensation for each person,

         (iv) total compensation requested for each person's
              services, and

          (v) the grand total of hours expended and compensation
              requested;

    (e) a summary of adjusted expenses;

    (f) a statement of the total amount requested for services
        and expenses, and a disclosure of retainers and partial
        payments from whatever source; and

    (g) if the application is for interim compensation, an
        estimate as to what services remain to be performed and
        the amount of compensation, which will be sought for
        those services.

J. Services for Application of Compensation

    A professional's application for allowance of interim or
    final compensation and reimbursement will be served on the
    debtor or debtor-in-possession, trustee, examiner, the
    chairperson of the Creditors' committee, and counsel for
    those parties.

K. Frequency of Applications for Compensations

    A professional's application for allowance of interim
    compensation and reimbursement to the extent possible should
    be filed not more than once every 120 days, and not less
    than once every 12 months after the effective date of the
    professional's employment as set forth in the order
    authorizing employment.

L. Notice of Application for Compensation

    A professional's application for allowance of interim or
    final compensation and reimbursement will be accompanied by
    a proposed notice which identifies the applicant, the nature
    of the services rendered, the amounts requested as
    compensation and reimbursement, and the time period during
    which services were rendered.  If the applicant seeks
    compensation as an attorney, the form of the proposed notice
    will provide proper spacing and wording to schedule the
    application for hearing. If the Court determines that no
    hearing is to be scheduled or if the applicant seeks
    compensation as an accountant, appraiser, auctioneer, or
    other professional person, the proposed notice will contain
    language providing for an opportunity to file and serve,
    within 20 days, specific objections to the application and a
    request for a hearing. All applications for compensation
    will  be noticed by the applicant with proof of service
    filed with the Court.

M. Guidelines for Review

    In conducting the review required, and in preparing time and
    expense itemizations, an applicant should be mindful of the
    these guidelines and standards:

    (a) the time spent preparing a fee application will be
        compensable if the application demonstrates that the
        review was conscientiously conducted, and if the time
        spent is separately disclosed and summarized;

    (b) itemizations are to be based on contemporaneous time and
        expense records, and are to be specific and well
        documented;

    (c) these factors will be considered in determining the
        reasonableness of a fee request:

           (i) the nature, novelty and difficulty of the issues
               presented and the services performed;

          (ii) the extent to which the services benefited the
               estate and contributed to the progress of the
               case;

         (iii) whether, considering the level of experience and
               competence required to perform services, the
               services could have been performed more cost-
               effectively by professional associates and
               paraprofessional personnel; and

          (iv) whether services were unproductive, duplicative,
               or overstaffed in relation to the complexity of
               the case or the issues presented;

    (d) premium compensation, in excess of basic "lodestar"
        fees, may be allowed only in  unusual circumstances when
        exceptional results have been achieved by reason of the
        professional's services;

    (e) no fees will be allowed for:

           (i) filing clerks and other non-paraprofessionals or
               for services which are not professional or
               paraprofessional in nature;

          (ii) general research on law which is well known to
               practitioners in the area of bankruptcy law;

         (iii) review of documents, correspondence, and files,
               unless the review is relevant to a specific issue
               under consideration;

          (iv) conferences with co-counsel or associates, unless
               the necessity for the conferences is explained;
               and

           (v) attendance of more than one attorney at
               depositions, court appearances, meetings of
               creditors, or other meetings, unless the special
               circumstances requiring the attendance of
               additional attorneys are explained;

    (f) if the itemization of services is extensive or complex,
        a summary of adjusted time by major project or subject
        matter may become an appropriate issue for Inquiry by a
        party-in-interest or the Court and may be required;

    (g) travel time may be compensated only for travel during
        normal business hours;

    (h) there will be no reimbursement of expenses which
        constitute items of office overhead such as secretarial
        services, office supplies, word processing charges,
        mileage for intra-city travel, filing clerk or messenger
        clerk time, and local telephone calls;

    (i) charges incurred for reasonable amounts of computer
        research may be a reimbursable expense, if the research
        was efficiently and effectively conducted; and

    (j) any Item of expense in excess of $25 must be supported
        by a receipt or other documentation. (National Century
        Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
        Service, Inc., 609/392-0900)


NATIONAL STEEL: Receives AK Steel Proposal to Acquire All Assets
----------------------------------------------------------------
National Steel Corporation said AK Steel Corporation has
submitted a proposal for the purchase of substantially all of
National Steel's principal steel making and finishing assets for
$1.025 billion, consisting of $825 million in cash and the
assumption of certain liabilities approximating $200 million.

As previously announced, on January 9, 2003, National Steel
entered into an Asset Purchase Agreement with United States
Steel Corporation for the sale of substantially all of National
Steel's principal steel making and finishing assets for
approximately $950 million, primarily consisting of cash but
including up to $100 million of U.S. Steel common stock and the
assumption of certain liabilities approximating $200 million. A
hearing in bankruptcy court to consider the approval of the
bidding procedures relating to the US Steel transaction has
previously been scheduled for January 30, 2003.

The AK Steel proposal, as well as the U.S. Steel transaction, is
subject to a number of conditions, including termination or
expiration of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act and the execution and ratification of
a new collective bargaining agreement by the United Steelworkers
of America.

National Steel Chairman and Chief Executive Officer Mineo
Shimura stated, "We will study this proposal and review it with
our Board of Directors and stakeholders in order to determine
the appropriate course of action. Potentially having multiple
options to consider is positive for our stakeholders. We will
continue to work diligently to optimize the return for our
stakeholders and deliver the best solution for our customers,
employees, vendors and other constituents."

As a result of various contingencies that must be satisfied in
connection with any sale transaction, National Steel will
continue to develop plans to emerge from Chapter 11 bankruptcy
as a stand-alone entity. "We will continue to make plans toward
emerging from Chapter 11 on a stand-alone basis in the event
that a sale transaction is not completed," said Mr. Shimura.
"Our employees are dedicated to the successful emergence from
Chapter 11, and we are grateful for the continued support of our
customers, vendors and stakeholders," he continued.

The Company filed its voluntary petition in the U.S. Bankruptcy
Court for the Northern District of Illinois in Chicago on
March 6, 2002.

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

DebtTraders reports that National Steel Corp.'s 9.875% bonds due
2009 (NSTL09USR1) are trading between 64 and 74. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NSTL09USR1
for real-time bond pricing.


NATIONAL STEEL: USWA Reacts to AK Steel Offer to Purchase Assets
----------------------------------------------------------------
The United Steelworkers of America said that the addition of AK
Steel as a suitor in pursuit of National Steel changes the
number of bidders but not the necessity of negotiating a
constructive labor agreement that would ensure the "humane
consolidation" of the American steel industry, the principle
that the Union has made paramount to its support for
consolidation.

In the announcement of its offer to purchase National, AK
referred to the prospects of negotiating "a constructive new
labor agreement" with the USWA, which represents workers at
National Steel.

"Reaching a constructive agreement with AK Steel would be
extremely difficult," said USWA International President Leo W.
Gerard, "given the number of unresolved issues resulting from
AK's three-year lockout of 600 of our members in Mansfield,
Ohio."

Gerard said the Union would examine AK's offer, as it has the
recent bid made by U.S.Steel, while continuing to work closely
with National management and creditors on a "stand alone" plan
of reorganization of the company.


NATIONSRENT INC: Urges Court to Modify Professionals' Fee Cap
-------------------------------------------------------------
On February 13, 2002, the U.S. Bankruptcy Court for the District
of Delaware entered an order authorizing NationsRent Inc., and
its debtor-affiliates to employ and pay certain professionals in
the ordinary course of their business.  Pursuant to the Order,
the Debtors may employ professionals to assist them in matters
unrelated to the administration of their Chapter 11 cases.
Among other things, the Order:

    1. establishes a limit on the payments or cap that the
       Debtors can make to each Ordinary Course Professional on
       account of services it rendered;

    2. provides a mechanism by which the Debtors may employ
       Ordinary Course Professionals in addition to those
       already identified in the Order, subject to certain
       notice requirements and the establishment of a Cap for
       each additional Ordinary Course Professional; and

    3. limits the Debtors' aggregate payments to all Ordinary
       Course Professionals to $3,000,000 for the duration of
       the Chapter 11 cases.

Recently, the Debtors reviewed their records and determined that
they have underestimated the Cap with respect to certain
Ordinary Course Professionals on account of the services these
Professionals provided to date and their assessment of the
future need for the services.  The Debtors also determined that
they overestimated the Cap with respect to other Ordinary Course
Professionals.  Accordingly, the Debtors ask Judge Walsh to
modify the Caps for certain of their Ordinary Course
Professionals.

Michael J. Merchant, Esq., at Richards, Layton & Finger, tells
the Court that the Debtors have not exceeded the $3,000,000
aggregate case cap and pursuant to the Order, they could retain
additional ordinary course professionals or otherwise shift
their work to other Ordinary Course Professionals to stay within
the current Caps.  The Debtors believe, however, that it is more
cost effective to modify the Caps to allow them to use their
Ordinary Course Professionals as needed.

As the need arises, the Debtors reserve their right to employ
additional Ordinary Course Professionals.  The Debtors further
reserve their right to apply to this Court, as necessary, for
additional modifications to the existing Caps.

The Debtors propose to modify the Caps with respect to these
Ordinary Course Professionals:

                                           New Case     Original
Professional          Services Provided      Cap        Case Cap
------------          -----------------    --------     --------
Agovino & Asselta     collection matters    $60,000      $10,000

Akerman, Senterfitt   Real estate, gen.     800,000    1,200,000
    & Eidson           litigation counsel

Bell, Nunnally        collection matters    200,000      150,000
    & Martin

Collins, Norman       collection matters     30,000      New OCP
    & Basinger

Guest & Associates    collection matters     20,000       80,000

Locke Reynolds LLP    collections matters    15,000      New OCP

Mason, Slovin &       collection matters    150,000      New OCP
    Schilling

Niederman, Stanzel    collections matters    30,000      New OCP
    & Lindsey

Rego & Hagan Co.      collection matters      7,500      New OCP

Schlanger, Mills,     collection matters     30,000      New OCP
    Mayer & Silver

Seiller & Handmaker   collection matters     25,000       10,000

Smith & Sellers       collection matters     25,000        7,500

Winstead Sechrest     collection matters     75,000       80,000
    & Minick PC
                                           ----------
                         TOTAL             $2,813,500
(NationsRent Bankruptcy News, Issue No. 25; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


NORTEL NETWORKS: Board Sets Shareholders' Meeting for April 24
--------------------------------------------------------------
The board of directors of Nortel Networks Corporation (NYSE:NT)
(TSX:NT) called an annual and special meeting of shareholders to
be held on Thursday, April 24, 2003, in Ottawa, Ontario. The
board of directors set the close of business on March 7, 2003,
as the record date for determining the shareholders of the
Corporation entitled to receive notice of the meeting. Details
of the agenda for the annual and special meeting will be
included in Nortel Networks Corporation's proxy circular and
proxy statement, which is expected to be mailed to shareholders
in early March.

Nortel Networks is an industry leader and innovator focused on
transforming how the world communicates and exchanges
information. The company is supplying its service provider and
enterprise customers with communications technology and
infrastructure to enable value-added IP data, voice and
multimedia services spanning Wireless Networks, Wireline
Networks, Enterprise Networks, and Optical Networks. As a global
company, Nortel Networks does business in more than 150
countries. More information about Nortel Networks can be found
on the Web at http://www.nortelnetworks.com

Nortel Networks Corp.'s 7.40% bonds due 2006 (NT06CAR2) are
trading at about 66 cents-on-the-dollar, DebtTraders says. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NT06CAR2for
real-time bond pricing.


NORTEL NETWORKS: Board Declares Preferred Share Dividends
---------------------------------------------------------
The board of directors of Nortel Networks Limited declared a
dividend on each of the outstanding Cumulative Redeemable Class
A Preferred Shares Series 5 (TSX:NTL.PR.F) and the outstanding
Non-cumulative Redeemable Class A Preferred Shares Series 7
(TSX:NTL.PR.G), the amount of which for each series will be
calculated by multiplying (a) the average prime rate of Royal
Bank of Canada and Toronto-Dominion Bank during February 2003 by
(b) the applicable percentage for the dividend payable for such
series for January 2003 as adjusted up or down by a maximum of 4
percentage points (subject to a maximum applicable percentage of
100 percent) based on the weighted average trading price of the
shares of such series during February 2003, in each case as
determined in accordance with the terms and conditions of such
series. The dividend on each series is payable on March 12, 2003
to shareholders of record of such series at the close of
business on February 28, 2003.

Nortel Networks is an industry leader and innovator focused on
transforming how the world communicates and exchanges
information. The company is supplying its service provider and
enterprise customers with communications technology and
infrastructure to enable value-added IP data, voice and
multimedia services spanning Wireless Networks, Wireline
Networks, Enterprise Networks, and Optical Networks. As a global
company, Nortel Networks does business in more than 150
countries. More information about Nortel Networks can be found
on the Web at http://www.nortelnetworks.com


NRG ENERGY: Involuntary Petition Stalled Until April 29
-------------------------------------------------------
Judge Kishel brought the core parties together last week in the
U.S. Bankruptcy Court for the District of Minnesota to talk
about the pending involuntary petition against NRG Energy, Inc.,
brought by a "rogue group of disgruntled executives," as NRG's
lawyers call them, and the Company's request that the Bankruptcy
Court dismiss the involuntary petition with prejudice or abstain
while NRG's real creditors continue to negotiate.  At the
conclusion of that get-together, Judge Kishel announced that
he'll convene another "status conference" at 9:30 a.m. on
Feb. 25 and, if the executives want to proceed to an evidentiary
hearing on their involuntary petition they can -- more than
three months from now -- on April 29.

The key players in NRG's restructuring at this juncture are:

      * Adam P. Merrill, Esq., and James H.M. Sprayregen,
        Esq., at Kirkland & Ellis in Chicago, provide
        outside restructuring advice to NRG Energy and Scott
        J. Davido, Esq. (formerly at Jones Day and in-house
        counsel at Elder-Beerman) serves as NRG's Senior
        Vice President and General Counsel;

      * an ad hoc committee of parent company noteholders
        represented by Bingham McCutchen LLP and Houlihan,
        Lokey, Howard & Zukin;

      * an ad hoc committee of project level bondholders
        represented by Akin Gump Strauss Hauer & Feld LLP
        and Ernst & Young Corporate Finance LLC; and

      * NRG's bank group, consisting of:

        -- Credit Suisse First Boston,
        -- ABN Amro Bank N.V.,
        -- Societe Generale,
        -- Abbey National Treasury Services plc,
        -- Credit Lyonnais,
        -- JPMorgan Chase Bank,
        -- WestLB AG,
        -- Australia and New Zealand Banking Group Limited,
        -- CIBC Inc.,
        -- Bank of America, N.A.,
        -- Deutsche Bank Trust Company Americas,
        -- ING Bank N.V., organizacni slozka,
        -- Bayerische Hypo-Und Vereinsbank AG, N.Y. Branch,
        -- The Bank of Tokyo-Mitsubishi Ltd.,
        -- Royal Bank of Scotland,
        -- TD Securities, and
        -- Citibank,

        represented by Peter V. Pantaleo, Esq., at Simpson
        Thatcher & Bartlett and FTI Consulting/Policano &
        Manzo; and

      * William I. Kampf, Esq., and Jamie R. Pierce, Esq.,
        at Kampf & Associates, P.A., in Minneapolis,
        representing the group of former executives looking
        for payment of their claims.

NRG asserts that the involuntary petition smacks of bad faith
and should be dismissed.  In the alternative, Mr. Merrill says,
the "rogue group of disgruntled executives" filing the
Involuntary Petition should be required to post a $10 million
bond, pursuant to 11 U.S.C. Sec. 303(e), to "protect NRG and its
creditors from the damage that has been caused and could be
caused if these proceedings continue."

For months now, NRG has been developing and negotiating a
comprehensive restructuring with the holders of approximately $7
billion of bank debt and bond obligations.  This effort, Mr.
Davido says, is particularly complicated and time consuming
because of the complex and capital intensive nature of the
company's business.


OPRYLAND HOTEL: Fitch Puts BB-Rated Class E Notes on Watch Neg.
---------------------------------------------------------------
Fitch Ratings places three classes from two single asset CMBS
transactions on Rating Watch Negative due to interest shortfalls
caused by expense reimbursements for each transaction. The
expense reimbursements stem from various terrorism insurance
costs incurred by Wells Fargo Bank, the master servicer for each
of the transactions. Fitch previously placed three classes from
three single asset deals on Rating Watch due to this same issue.
The shortfalls for the Danbury Fair deal are expected to come
through at the next remittance date.

The transactions and classes affected are as follows:

     --  Danbury Fair Mall Trust 2001-DFM $9.0 million class F,
         rated 'BBB-' and $2.5 million class G, rated 'BBB-';

     --  Opryland Hotel Trust, 2001-OPRY $10.0 million class E,
         rated 'BB'.

The transactions will remain on Rating Watch Negative for the
near term until a thorough credit review can be completed.


OWENS CORNING: Plan Creates Asbestos Personal Injury Trust
----------------------------------------------------------
Effective as of the later of the date the Asbestos Personal
Injury Trustees have executed the Asbestos Personal Injury Trust
Agreement or the Effective Date of Owens Corning and its debtor-
affiliates' Plan , the Asbestos Personal Injury Trust will be
created.  The Asbestos Personal Injury Trust is intended to be a
"qualified settlement fund" within the meaning of Section 468B
of the Internal Revenue Code. Pursuant to the Asbestos Personal
Injury Trust Agreement, the Asbestos Personal Injury Trust will
have two separate sub-accounts:

    -- the OC Sub-Account; and

    -- the FB Sub-Account.

The purpose of the Asbestos Personal Injury Trust will be to:

    -- process, liquidate, and pay all Asbestos Personal Injury
       Claims in accordance with the Plan, the Asbestos Personal
       Injury Trust Distribution Procedures, and the
       Confirmation Order; and

    -- preserve, hold, manage, and maximize the assets of the
       Asbestos Personal Injury Trust for use in paying and
       satisfying Asbestos Personal Injury Claims.

The Asbestos Personal Injury Trust will comply in all respects
with the requirements set forth in Section 524(g)(2)(B)(i) of
the Bankruptcy Code.

On the Confirmation Date, the Bankruptcy Court will appoint the
individuals selected jointly by the Asbestos Claimants'
Committee and the Future Claimants' Representative, to serve as
the Asbestos Personal Injury Trustees for the Asbestos Personal
Injury Trust.

On the Effective Date, or as soon as practicable, the
Reorganized Debtors will irrevocably transfer and assign to the
Asbestos Personal Injury Trust for allocation to the OC Sub-
Account:

    -- if Class 4 accepts the Plan, the portion of the Combined
       Net Distribution Package equal to the Class 7 Initial
       Distribution Percentage; or

    -- if Class 4 rejects the Plan, the portion of the Combined
       Distribution Package equal to the Class 7 Initial
       Distribution Percentage, and the OC Asbestos Personal
       Injury Liability Insurance Assets and the OC Insurance
       Escrow.

On or as soon as reasonably practicable after the Final
Distribution Date, the Reorganized Debtors will irrevocably
transfer and assign to the Asbestos Personal Injury Trust for
allocation to the OC Sub-Account:

    -- Cash in an amount equal to the Class 7 Final Distribution
       Percentage of Excess Available Cash;

    -- Excess Senior Notes in an aggregate principal amount
       equal to the Class 7 Final Distribution Percentage of the
       Excess Senior Notes Amount;

    -- Shares of New OC Common Stock in an aggregate number
       equal to the Class 7 Final Distribution Percentage of the
       Excess New OC Common Stock; and

    -- Cash in an amount equal to the Class 7 Final Distribution
       Percentage of the Excess Litigation Trust Recoveries.

The Reorganized Debtors will also execute and deliver to the
Asbestos Personal Injury Trust all documents as the Asbestos
Personal Injury Trustees reasonably request to issue the
Distributable Shares to be distributed to the Asbestos Personal
Injury Trust in the name of the Asbestos Personal Injury Trust
or a nominee and transfer and assign to the Asbestos Personal
Injury Trust all other assets, which constitute the assets of
the Asbestos Personal Injury Trust.

On the Effective Date, the Reorganized Debtors will irrevocably
transfer and assign to the Asbestos Personal Injury Trust for
allocation to the FB Sub-Account:

    -- the FB Reversions;

    -- the Committed Claims Account; and

    -- the FB Sub-Account Settlement Payment.

The Reorganized Debtors will use all commercially reasonable
efforts to cause the trustees of the Fibreboard Insurance
Settlement Trust to irrevocably transfer and assign:

    -- the Existing Fibreboard Insurance Settlement Trust
       Assets; and

    -- any and all of the Fibreboard Insurance Settlement
       Trust's rights in the FB Reversions, to the Asbestos
       Personal Injury Trust, for allocation to the FB Sub-
       Account, on the Effective Date or as soon as practicable
       thereafter.

The Reorganized Debtors will also execute and deliver, or will
use all commercially reasonable efforts to cause the trustees of
the Fibreboard Insurance Settlement Trust to execute and
deliver, to the Asbestos Personal Injury Trust all documents as
the Asbestos Personal Injury Trustees reasonably request in
connection with the transfer and assignment of the Existing
Fibreboard Insurance Settlement Trust Assets and the FB
Reversions.

On the Effective Date, at the sole cost and expense of the
Asbestos Personal Injury Trust and in accordance with written
instructions provided to the Reorganized Debtors by the Asbestos
Personal Injury Trust, the Reorganized Debtors will transfer and
assign, and will use all commercially reasonable efforts to
cause the trustees of the Fibreboard Insurance Settlement Trust
to transfer and assign, to the Asbestos Personal Injury Trust
all books and records of the Debtors and the Fibreboard
Insurance Settlement Trust that pertain directly to Asbestos
Personal Injury Claims that have been asserted against the
Debtors and the Fibreboard Insurance Settlement Trust.  The
Debtors will request that the Bankruptcy Court, in the
Confirmation Order, rule that these transfers will not result in
the invalidation or waiver of any applicable privileges
pertaining to the books and records.

In consideration for the property transferred to the Asbestos
Personal Injury Trust for allocation to the OC Sub-Account, the
OC Sub-Account will assume all liability and responsibility for
all OC Asbestos Personal Injury Claims and the Reorganized
Debtors will have no further financial or other responsibility
or liability.  The Asbestos Personal Injury Trust will also
assume all liability for premiums, deductibles, retrospective
premium adjustments, security or collateral arrangements, or any
other charges, costs, fees, or expenses that become due to any
insurer in connection with:

    -- the OC Asbestos Personal Injury Insurance Assets as a
       result of OC Asbestos Personal Injury Claims;

    -- asbestos-related personal injury claims against Persons
       insured under policies included in the OC Asbestos
       Personal Injury Insurance Assets by reason of vendors'
       endorsements; or

    -- the indemnification provisions of settlement agreements
       that OC made prior to the Confirmation Date with any
       insurers, to the extent that those indemnity provisions
       relate to Asbestos Personal Injury Claims, and the
       Reorganized Debtors will have no further financial or
       other responsibility or liability.

In consideration for the property transferred to the Asbestos
Personal Injury Trustees for allocation to the FB Sub-Account,
and in furtherance of the purposes of the Asbestos Personal
Injury Trust and the Plan, the FB Sub-Account will assume all
liability and responsibility for all FB Asbestos Personal Injury
Claims and the Reorganized Debtors will have no further
financial or other responsibility or liability. (Owens Corning
Bankruptcy News, Issue No. 44; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


PETCO ANIMAL: Reaffirms Earnings Guidance for 4th Quarter 2002
--------------------------------------------------------------
PETCO Animal Supplies, Inc., (NasdaqNM: PETC) reaffirmed its
guidance for fiscal 2002 fourth quarter and full year, ending
February 1, 2003. As previously disclosed, the Company will take
a charge for the settlement of a California overtime lawsuit
which will reduce fiscal 2002 fourth quarter and full year
earnings per share by $0.04. Excluding this charge, the
Company's expectations remain unchanged from the guidance of
$0.35 - $0.36 per diluted common share for fourth quarter
earnings and $0.88 - $0.89 per diluted common share for fiscal
2002 previously set out in the Company's third quarter earnings
release on November 21, 2002. As a direct result of incurring
this charge, the Company continues to expect its fourth quarter
earnings to be in the range of $0.31 - $0.32 per diluted common
share, compared to pro forma diluted earnings per common share
of $0.27 in the prior year quarter, and its pro forma fiscal
2002 earnings to be $0.84 - $0.85 per diluted common share,
compared to pro forma diluted earnings per common share of $0.52
in the prior fiscal year. Consistent with its previous guidance,
the Company expects to achieve a comparable store net sales
increase of approximately 6% for the fourth quarter of fiscal
2002 and approximately 8% for the full year. For fiscal 2003,
the Company currently expects diluted earnings per common share
in the range of $1.07 - $1.10, an increase of over 20% from the
expected pro forma diluted earnings per common share of $0.88 -
$0.89 in fiscal 2002 prior to the above-mentioned charge.

PETCO, which reported a total shareholders' equity deficit of
about $31 million at November 2, 2002, is a leading specialty
retailer of premium pet food, supplies and services. It operates
600 stores in 43 states and the District of Columbia, as well as
a leading destination for on-line pet food and supplies at
http://www.petco.com


PHARMACEUTICAL FORMULATIONS: Makes Interest Payment on 8% Notes
---------------------------------------------------------------
Pharmaceutical Formulations, Inc., made the December 15, 2002,
interest payment due under its 8% Convertible Subordinated
Debentures due 2002.  Such payments were within the 30 day time
period allowed before such nonpayment would become an event of
default under the debenture indenture.

Pharmaceutical Formulations' September 28, 2002 balance sheet
shows a total shareholders' equity deficit of about $17.8
million.


RECOTON CORP: Sells GameShark Brand Name to Mad Catz for $5 Mil.
----------------------------------------------------------------
Recoton Corporation (Nasdaq: RCOT), a leading global consumer
electronics company, sold the GameShark(R) brand name and
GameShark website to Mad Catz Interactive, Inc., (AMEX/TSE: MCZ)
for the sum of U.S. $5 million. Recoton officials stated that
the net proceeds will be used to pay down debt.

The GameShark brand name is the industry leader in video game
enhancement software, which enables players to take full
advantage of the secret codes, short cuts, hints and cheats
incorporated by video game publishers into their game offerings.

This transaction is part of Recoton's previously announced plan
to reduce the Company's overall debt structure, enhance cash
flows and restore profitability through, among other measures,
the sale of certain non-strategic assets. Since December 2002,
Recoton has generated net proceeds of approximately $40 million
through the sale of non-strategic assets. The GameShark name and
website were owned by Recoton's video and computer game
operations, which were treated as discontinued operations for
the period ended September 30, 2002. In the twelve month period
ended December 31, 2002, GameShark products generated revenues
in excess of $30 million.

Robert L. Borchardt, President and CEO of Recoton Corporation,
stated, "We are very pleased to announce this sale, which
further illustrates management's commitment to restoring Recoton
to a sound financial position. We have great respect for Mad
Catz and are confident that they will do an excellent job in
marketing one of the video game industry's most recognizable and
popular brands."

Recoton Corporation is a global leader in the development and
marketing of consumer electronic accessories and audio products.
Recoton's more than 3,000 products include highly functional
accessories for audio, video, car audio, camcorder, multi-
media/computer, home office and cellular and standard telephone
products, as well as 900MHz wireless technology products
including headphones and speakers; loudspeakers and car and
marine audio products including high fidelity loudspeakers, home
theater speakers and car audio speakers and components. The
Company's products are marketed under two business segments:
accessory products and audio products. Accessory products are
offered under the Ambico(R), Ampersand(R), AR(R), Acoustic
Research(R), Discwasher(R), InterAct(R), Jensen(R), Parsec(R),
Recoton(R), Ross(R), Sole Control(R), and SoundQuest(R) brand
names. Audio products are offered under the Advent(R), AR(R),
Acoustic Research(R), HECO(R), Jensen(R), MacAudio(R),
Magnat(R), Phase Linear(R) and Recoton(R) brand names.

                         *     *     *

In its SEC Form 10-Q filed on November 18, 2002, the Company
states:

"Management projects that the Company will require additional
cash and working capital to fund planned continuing operations.
Management is of the opinion that sufficient cash will be
generated from profits of continuing operations, sale of
discontinued operations and sources of external financing.
However, there can be no assurance that such funds will be
available when required to meet the Company's liabilities and
commitments as they become due. The ability of the Company to
continue and realize the carrying value of its assets is
dependent on the successful sale of the discontinued operations,
reduction of the operating costs of its continuing operations
and the ability to pay down the Company's level of debt. The
consolidated financial statements relating to the continuing
operations do not include any adjustments relating to
recoverability or classification of assets and liabilities that
might be necessary should the Company be unable to continue as a
going concern.

"Adjustments have been made in these financial statements
relating to the recoverability of recorded assets and
liabilities relating to discontinued operations for which a loss
on the sale is anticipated and probable. Such losses, based on
estimated fair value less cost of sale, have been recorded based
in part on negotiations with third party potential buyers.

"At June 30, 2002, the Company was in violation of financial
covenants under the senior loan agreement, the subordinated loan
agreement and the securities purchase agreement for the 1999
notes. The Company failed to (i) make payments required due to
overadvances resulting from the imposition of greater reserve
requirements by the lenders, (ii) pay interest on the Senior
Subordinated Notes, and (iii) provide in a timely manner certain
quarterly financial information.

"On August 28, 2002, the Company entered into certain amendments
and waiver agreements with its existing senior lenders,
subordinated lenders and subordinated note holders which waived
the default of financial covenants arising June 30, 2002 and
anticipated defaults arising September 30, 2002 and waived the
default of failure to pay the interest on the senior
subordinated notes. In addition, the senior loan agreement was
amended to allow the Company to borrow up to its existing
overadvance position, to change various definitions and terms
surrounding the borrowing base, to increase interest rates and
to require the Company to sell certain assets by scheduled dates
and to apply portions of the sales proceeds to existing debt.
Amendments were also made to the Company's financial covenants
and timing of required financial reports. A financial committee
of the Board of Directors was established to oversee financial
affairs, and the Company was required to continue to engage the
services of an independent financial advisor. In consideration
for the waivers and amendments, the Company paid fees, repriced
warrants and issued stock to its lenders.

"To assist in the Company's liquidity and operating performance,
the Company substantially restructured its video game segment,
which has produced significant losses over the past 2-3 years,
and retained the services of Jefferies & Company, Inc., an
investment-banking firm, to assist in the sale of the gaming
segment and certain other assets that the Company considers non-
strategic to its business plan going forward. Management
believes that the sale of these assets will allow the Company to
reduce debt and improve liquidity. The assets held for sale have
been reported as discontinued operations under SFAS 144."


RICA FOODS: Delays SEC Form 10-K Amendment Filing
-------------------------------------------------
It has come to the attention of Rica Foods that Deloitte &
Touche, the Company's independent auditors, did not provide the
Company with a signed audit report for inclusion in the
Company's Form 10-K financial statement recently filed with the
SEC. Accordingly, the independent accountant's report apparently
contained in the Form 10-K should not be relied upon.

The Company does not intend to file an amendment to its Form 10-
K for the fiscal year ended September 30, 2002 until Deloitte &
Touche has completed its audit and provided the Company with a
signed audit report.

The Company has been working with Deloitte & Touche to finalize
the financials to be included in the Form 10-K Amendment. The
Company has received some preliminary comments from Deloitte &
Touche and anticipates correcting some errors that appear in the
financial statements of the Form 10-K. The Company does not know
if Deloitte & Touche will have additional comments to the
financial statements or if the requested changes by Deloitte &
Touche will be material.


SEVEN SEAS: US Trustee Appoints Ben Floyd as Chapter 11 Trustee
---------------------------------------------------------------
In response to an Application filed by Richard Simmons, the
United States Trustee for Region 7, the U.S. Bankruptcy Court
for the Southern District of Texas approved the appointment of
Ben Floyd to serve as Chapter 11 Trustee in Seven Seas
Petroleum, Inc.'s chapter 11 case.

Mr. Floyd is an attorney with the law firm of:

          Floyd, Isgur, Rios & Wahrlich, PC
          700 Louisiana, Suite 4600
          Houston, Texas, 77002-2732
          Tel: 713 222 1470
          Fax: 713 222 1475

Mr. Floyd is currently a chapter 7 panel trustee in the Southern
District of Texas and is routinely appointed to chapter 7 cases
in a regular rotation with other chapter 7 trustees.  The UST
assures the Court that Mr. Floyd does not have any connections
with the Debtor, the creditors and persons employed in the
Office of the United States Trustee.

Before naming Mr. Floyd to this post, the U.S. Trustee consulted
with:

     1) Tony Davis, Counsel for the Debtor;

     2) James Franklin Donnell, Counsel for the Petitioning
        Creditors; and

     3) Paul Heath, Counsel for Chesapeake Energy Corporation.

On December 20, 2002, a group of its creditors filed a petition
to involuntarily adjudicate Seven Seas as a chapter 7 debtor.
Seven Seas consequently consented to the Adjudication under
Chapter 11 on January 14, 2003.  Tony M. Davis, Esq., at Baker
Botts LLP, represents the Debtor in its restructuring efforts.
As of September 30, 2002, the Company listed $180,389,000 in
total assets and $185,970,000 in total debts.


SMITHFIELD FOODS: S&P Places BB+ Sr. Debt Ratings on Watch Neg.
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BBB-' corporate
credit rating and bank loan ratings for leading hog producer and
processor Smithfield Foods Inc., on CreditWatch with negative
implications. The 'BB+' senior unsecured and subordinated debt
ratings on Smithfield Foods were also placed on CreditWatch with
negative implications.

The Smithfield, Virginia-based company had about $1.6 billion of
total debt outstanding at October 27, 2002.

The CreditWatch listing follows Smithfield Foods' announcement
that it expects earnings for the third quarter of fiscal 2003 to
be below previous guidance and Standard & Poor's expectations.
The drop in earnings reflects the impact of lower hog prices and
weak fresh meat prices, a decline driven by the excess supply of
all proteins in the marketplace. Furthermore, due to weak
operating results, Smithfield has amended the leverage coverage
covenants in its secured revolving credit facility and certain
senior secured note loan agreements for the four quarters
beginning with the Jan. 26, 2003, quarter.

"Although hog prices have improved somewhat in the last several
weeks, they are still below break-even levels for hog
producers," said Standard & Poor's credit analyst Ronald B.
Neysmith. "In addition, Standard & Poor's is concerned that the
firm's vertically integrated operations have not reduced the
degree of volatility in Smithfield's operations as originally
expected."

Standard & Poor's plans to meet and discuss with Smithfield
Foods' management their earnings and cash flow expectations,
market conditions, and the prospects for recovery in the
remainder of calendar 2003.

Smithfield Foods is the leading processor and marketer of fresh
pork and processed meats in the U.S. The company is also the
largest producer of hogs.


SOLID RESOURCES: Completes Implementation of CCAA Plan
------------------------------------------------------
Alvin Harter, President and CEO of Solid Resources Ltd.,
(TSXV: SRW) concluded the implementation of its Plan of
Arrangement and Compromise, the Monitor has been discharged and
the Company is no longer subject to the provisions of the
Companies Creditors Arrangement Act.

The total number of shares issued pursuant to the Plan was
1,744,723. The total issued and outstanding shares as of the
date hereof is 7,916,367.

Future income taxes:

Future income taxes are provided for to reflect the tax effect
that would be incurred should certain assets and liabilities be
disposed of. This liability is only crystallized on the
disposition of those assets and liabilities.

Income taxes are provided for using the asset and liability
method. Temporary differences arising from the difference
between the tax basis of an asset or liability and its carrying
amount on the balance sheet are used to calculate future income
tax assets or liabilities. Future income tax assets or
liabilities are calculated using tax rates anticipated to apply
in the periods that the temporary differences are expected to
reverse. The effect of a change in income tax rates on future
income tax assets and liabilities is recognized in income in the
period that the change occurs.

Having disposed of all of its wireline and well testing assets,
Solid is moving forward as a mining exploration company. Solid
holds a 49% interest in the Hart Mineral exploration property in
the Northwest Territories, Canada, with a mineral reserve of
silver, zinc, lead and minor amounts of gold. The remaining 51%
is held by a related party which has granted Solid an option to
acquire the remaining 51% of the Hart Mineral exploration
property.

Effective October, 2001, Solid entered into an agreement whereby
it was granted two separate options to acquire a total of a 50%
interest in a Tantalum/Lithium and Tin mineral exploration
venture in Spain. The remaining interest in this venture is held
by two related parties, being Alvin Harter, the CEO of Solid,
and a company controlled by Alvin Harter. Solid must earn its
interest in this venture by contributing its pro rata share of
expenses. As of today, Solid has approximately a 20% interest in
the venture. Failure to contribute its portion of the expenses
in a timely manner will result in Solid's interest being reduced
to a 10% carried interest in the venture.

A private Spanish company, Solid de Espana S.A., will hold three
parcels of land with mining and exploration rights which have
been granted by the Spanish Government. The Golpejas, one of the
properties, is located 25 kilometers west of the City of
Salamanca, Spain. The permit covers 12,473 acres. The other two
concessions are Doade-Presquiera consisting of 15,744 acres and
are located approximately 300 kilometers northwest of Salamanca.
A series of northerly trending pegmatite dykes can be traced for
13 kilometers.

Solid has completed an extensive sampling program on the North
and South Zones within the Doade-Presqueira tantalum, lithium
and tin pegmatite belt. Drilling will begin on the south end of
the thirteen kilometer Doade-Presqueira property in February
2003, as the grades of Tantalum and Lithium were considerably
higher on the southern part of the property. The drilling will
take place south of an area surrounding multiple old abandoned
tin mines. The exploration project will be headed up by Tony
Spat, Solid's Vice President, Mining Exploration and
Development.

Solid has made significant progress over the last 8 months and
appreciates the co-operation and support of all of its clients,
creditors and shareholders during this period of change.


STAR GAS PARTNERS: S&P Assigns New BB- Corporate Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit rating to home heating oil and propane company Star Gas
Partners L.P. At the same time, Standard & Poor's assigned its
'B' rating to the company's proposed $200 million unsecured
notes due 2013. The outlook is stable.

Proceeds from the note offering will be used mainly to refinance
about $151 million of existing debt, with the remaining proceeds
of about $40 million available for future debt amortization and
acquisitions.

As of September 30, 2002, the Stamford, Conn.-based company had
about $490 million of debt outstanding, the majority of which is
privately placed senior secured debt.

"The ratings reflect the company's high leverage and weak
financial profile, coupled with the mature, highly fragmented,
weak growth environment in which it operates, likely
necessitating acquisitions to sustain growth," said Standard &
Poor's credit analyst Brian Janiak.

"These risks are partially offset by the company's relatively
stable and predictable cash flow due to the nondiscretionary
nature of heating oil and propane usage and the company's
margin-based business, which helps mitigate against commodity
risk and allows the company to pass costs through its customer
base," added Janiak.

Star Gas, a master limited partnership, is a diversified home
energy distributor and services provider, primarily focused on
heating oil and propane through its subsidiaries Star Gas
Propane L.P. and Petro Holdings Inc. The stable outlook
indicates Standard & Poor's expectation that Star Gas will
gradually improve its current level of leverage and improve its
cash flow coverage measures with increased stability of cash
flows and by adhering to a selective investment criteria;
pursuing organic growth where possible; continuing to manage
assets efficiently; and funding acquisitions with a balanced mix
of debt and equity.


T. EATON: Canadian Retailer Projects 48% Dividend to Creditors
--------------------------------------------------------------
Richter & Partners Inc., the Liquidator of the assets of The T.
Eaton Company Limited, announces that a further distribution of
6 cents on the dollar on all outstanding approved claims of
employees and creditors has been paid in December 2002. This
brings, to date, the total distribution to employees and
creditors to 46 cents on claims in excess of $240,000,000. It is
anticipated that there will be a further dividend to bring the
total distribution to approximately 48 cents.

Richter & Partners Inc., has continued to realize on the assets
of The T. Eaton Company Limited since its Plan of Arrangement
was accepted by creditors in December 1999. A committee of
creditors, representing the stakeholders, has worked with the
Liquidator throughout the realization process. This committee
includes Alan Abramowicz of Tommy Hilfiger, Andrew Hatney and
Susan Rowland of Koskie, Minsky, Bert Lafford of National
Apparel Bureau (Quebec) Ltd., and Joe Persaud of the Ontario
Ministry of Finance.

Richter & Partners Inc., with offices in Montreal, Toronto and
Calgary, has more than 30 years experience in reorganization and
restructuring and has advised on many of the important
restructurings of Canadian companies.


TEREX CORP: Will Publish Q4 & Full-Year 2002 Results Late Feb.
--------------------------------------------------------------
Terex Corporation (NYSE: TEX) will provide a detailed review of
the fourth quarter and full year 2002 results at the end of
February as the Company has done historically.

                       2002 Restructuring

During the fourth quarter of 2002, Terex initiated restructuring
plans in several businesses, including Terex Compact Equipment,
Demag, Genie, and Terex Mining. The restructuring charge related
to these plans will be approximately $53 million, $51 million of
which will be recorded in the fourth quarter of 2002 and $2
million of which will be future period costs. The cash component
of the restructuring charge will be approximately $18 million.
The annualized savings from these actions is approximately $19
million, $12 million of which is expected to be realized in
2003. The restructuring actions are also expected to have a
positive cash impact of over $20 million in 2003. The
restructuring actions can be grouped into the following three
main areas:

Acquisition related - The recent acquisitions of Demag and Genie
have provided the Company with further opportunities to
rationalize facilities and product lines within the Crane and
Aerial Work Platform business segments. Demag's product range
and capabilities allow the Company to consolidate crane
manufacturing and distribution activities along with product
offerings. The Company's Montceau crane facility will be scaled
back and many of its models will be discontinued, as those
product lines will be integrated with Demag products. Demag's
presence in Germany also provides the opportunity to leverage
its distribution infrastructure in that country. The acquisition
of Genie has provided the Company the opportunity to rationalize
aerial product offerings between Genie and Terex, and the former
Terex models will be discontinued as those product lines are
integrated with Genie products. The acquisition related
restructuring charges are approximately $25 million and consist
of severance (approximately 150 employees - $7 million),
inventory valuation related to discontinued product lines
(approximately $15 million) and various other items including
facility and equipment write-offs (approximately $3 million).

Terex Compact Equipment - In the fourth quarter of 2002, the
Company announced the transfer of the operations of its Warwick,
England, facility which manufactures mini-dumpers, rollers and
soil compactors, into a new facility in Coventry, England. The
new facility has 326,000 sq. ft. of dedicated manufacturing
space. The Company has also presented to local labor unions a
proposed plan to close the Manchester, England, facility which
manufactures loader backhoes, and relocate its operations to
another Terex location. These actions will allow the Company to
leverage manufacturing and infrastructure to further reduce
costs and streamline operations. The restructuring charge
related to these actions is approximately $9 million and
consists of severance (approximately 270 employees - $6 million)
and various other items including facility and equipment write-
offs (approximately $3 million). Of the approximately $9 million
in restructuring charges, approximately $7 million will be
accrued in the fourth quarter of 2002 and $2 million represents
future period costs.

Businesses to be exited and product rationalizations - During
the fourth quarter of 2002, the Company decided to close and
exit its tank container business, CPV, in Clones, Ireland. This
business has been a non-core operation since it was acquired as
part of the Powerscreen acquisition in 1999. CPV had sales of
approximately $12 million in 2002. The Company also decided to
rationalize certain product offerings within its Mining,
Roadbuilding and Tower Crane businesses. In Mining, the Company
made the decision to exit rental activities and to rationalize
the scraper product offering. In Roadbuilding, the Company
continues to integrate CMI and is rationalizing certain product
offerings previously sold under the Standard Havens brand name.
In Tower Cranes, the Company rationalized the product offering
and restructured manufacturing operations. The restructuring
charge related to businesses to be exited and product
rationalization is approximately $19 million (approximately 185
employees - $3 million), inventory valuation related to
discontinued businesses and product lines (approximately $14
million) and various other items including facility and
equipment write-offs (approximately $2 million).

                       Fourth Quarter 2002

"While we continue to work through the closing process, we
expect operating performance for the fourth quarter of 2002 to
be broadly in line with previously announced guidelines. Before
special items, we expect earnings to be in the $0.10 to $0.14
per share range and EBITDA to be in the $40 to $45 million
range. We also improved our cash generation during the quarter,
reducing total debt by approximately $70 million and net debt by
approximately $85 million, from $1,297 million at the end of the
third quarter of 2002 to approximately $1,212 million at the end
of 2002. With respect to our bank covenants, the Company remains
well within our limits for compliance."

                        2003 Outlook

"We remain confident as to our ability to meet or exceed current
market expectations for earnings in 2003. We have built a
stronger company over the past 12 months with the completion of
the strategic acquisitions of Demag and Genie, positioning Terex
to grow in 2003 despite challenging end markets. We will
continue to be aggressive on cost reductions, and the benefits
from the restructuring actions implemented in the fourth quarter
of 2002 will positively impact 2003. Our focus for the upcoming
year is to integrate and execute, particularly with respect to
the integration of our acquisitions of Demag and Genie, and
execute on our cost saving targets. Cash flow generation is a
main focus for management and we have targeted a $200 million
reduction in debt by the end of 2003."

Segment outlook for 2003 is as follows:

    Terex Construction - The Company expects net sales to be in
the range of $1,150 to $1,250 million, with operating margins in
the 6.0% to 7.0% range. Overall end markets remain challenging.
The articulated dump truck market remains very competitive, as
this product category has seen several new entrants over the
past few years. There continues to be opportunity with the Terex
Compact Equipment business to penetrate new market
opportunities, particularly in the U.S. The Powerscreen business
continues to show signs of growth. Continued integration of the
Atlas and Schaeff acquisitions should improve margins, as the
Company continues to pursue cost reductions.

    Terex Cranes - The Company expects net sales to be in the
range of $700 to $750 million, with operating margins in the
6.0% to 7.0% range. The North American market remains depressed,
but the Demag acquisition is opening up new customer
opportunities for the Company's other crane products. The
addition of Demag has allowed the Company to restructure its PPM
Montceau and PPM Germany operations, driving additional costs
out of the business.

    Terex Mining - The Company expects 2003 net sales to be
slightly below 2002 levels. However, the Company expects a
significant improvement in operating results. Overall, the
Company expects net sales to be in the range of $250 to $280
million, with operating margins in the 6.5% to 7.5% range. The
expected improvement in financial performance relates to already
implemented projects, such as the closure of the Tulsa
manufacturing facility, lower warranty and product service costs
and a favorable shift in product mix. Demand for mining shovels
has generally remained positive and quoting activities have
picked up for mining trucks.

    Terex Roadbuilding and Utility Products - The Company
expects net sales to be in the range of $600 to $675 million,
with operating margins in the 6.0% to 7.0% range. The growth in
this segment is driven primarily by the inclusion of the 2002
acquisitions for a full year. The Utility Products business has
begun to see the benefit of the investments made during 2002 in
its distribution network. This trend should continue as investor
owned utility companies provide a significant opportunity. The
increased distribution network has the additional benefit of
cross-selling other Terex products, such as the loader backhoe
and boom trucks. The Terex Roadbuilding business will continue
to face difficult end markets in 2003, as uncertainty
surrounding funding for highway construction at both the federal
and state levels will impact new equipment purchases. In the
near term, however, the Company will continue to focus on cost
control and sizing the business for the current operating
environment.

    Terex Aerial Work Platforms - This segment was created with
the acquisition of Genie in September 2002. For 2003, the
Company expects net sales to be in the range of $475 to $510
million, which represents an approximately 10% decrease from the
2002 run rate. This reduction in net sales is primarily the
result of lower capital expenditures forecasted for the large
rental companies, offset partially by growth opportunities
within Europe. Operating margins are expected to be in the 9.0%
to 10.0% range, reflecting the successful execution of cost
reduction plans.

Other additional financial information:

    Corporate - Interest expense for the year is estimated at
$100 to $105 million and other income/expense is estimated to be
an expense of $5 million. The effective tax rate is expected to
be 32% for 2003 and the average number of shares outstanding for
2003 is estimated at 48.5 million. Depreciation and amortization
for the Company is estimated at $60 million. Capital
expenditures should be approximately $30 to 35 million.

    Working Capital - Effective January 1, 2003, the Company
implemented a new incentive compensation plan within the
Company, which places a greater emphasis on cash generation. The
plan was designed with the goal of reducing working capital and
generating free cash flow in order to reduce the Company's
leverage. The target for 2003 is a reduction in working capital
of $150 million from December 2002 levels.


"As we head into 2003, we are not expecting help from our end
markets," commented Phil Widman, Senior Vice President and Chief
Financial Officer. "There are certainly areas where we believe
we can continue to grow in 2003, such as our continued
penetration of the compact equipment market and our Powerscreen
business, but there are other businesses where we see continued
weakness in 2003, such as the crane business. When you look
across our diversified portfolio there are many puts and takes,
but the growth and earnings improvement in 2003 will be driven
primarily by the integration of acquisitions and execution on
restructuring plans." Mr. Widman continued, "We realize that we
have accomplished a lot in the acquisition area over the past 12
to15 months, and believe that this has made us a stronger
company. We added over $1 billion in pro forma revenues in new
businesses, diversifying both the Terex product offering and
geographic presence. Although our net debt has increased from
December 2001 as a result of the acquisitions, our pro forma net
leverage ratio has stayed relatively flat. We believe the
Company has a tremendous opportunity to reduce working capital
and generate free cash flow, thereby improving leverage, with
the beginnings of this reflected in the fourth quarter of 2002.
Reduction of working capital and generation of free cash flow
will remain a key focus for management in 2003."

Terex Corporation is a diversified global manufacturer based in
Westport, Connecticut. Terex is involved in a broad range of
construction, infrastructure, recycling and mining-related
capital equipment under the brand names of Advance, American,
Amida, Atlas, Bartell, Bendini, Benford, Bid-Well, B.L. Pegson,
Canica, Cedarapids, Cifali, CMI, Coleman Engineering, Comedil,
CPV, Demag, Fermec, Finlay, Franna, Fuchs, Genie, Grayhound, Hi-
Ranger, Italmacchine, Jaques, Johnson-Ross, Koehring, Lectra
Haul, Load King, Lorain, Marklift, Matbro, Morrison, Muller,
O&K, Payhauler, Peiner, Powerscreen, PPM, Re-Tech, RO, Royer,
Schaeff, Simplicity, Square Shooter, Telelect, Terex, and Unit
Rig. Terex offers a complete line of financial products and
services to assist in the acquisition of Terex equipment through
Terex Financial Services. More information on Terex can be found
at http://www.terex.com

                         *     *     *

As previously reported in the Troubled Company Reporter,
Standard & Poor's assigned its double-'B'-minus secured bank
loan rating to Terex Corp.'s proposed $210 million new term loan
C maturing in December 2009. Proceeds from this loan and about
$60 million in Terex common stock will be used to finance the
acquisition of Genie Holdings Inc., for $270 million. In
addition, the double-'B'-minus corporate credit rating was
affirmed on Westport, Connecticut-based Terex, a manufacturer of
construction and mining equipment. Total rated debt is $1.6
billion. The outlook is stable.

The bank loan was rated the same as the corporate credit rating.
The total senior secured credit facility of $885 million is
comprised of a revolving credit facility of $300 million, a term
loan B of $375 million, and the new term loan C of $210 million.
The facility is secured by substantially all of the company's
assets. Under Standard & Poor's simulated default scenario, the
company's cash flows were stressed and the resulting enterprise
value would not be sufficient to cover the entire bank loan in
the event of a default. However, there is reasonable confidence
of meaningful recovery of principal, despite potential loss
exposure.


UBIQUITEL INC: Obtains Time Extension to Meet Nasdaq Standards
--------------------------------------------------------------
UbiquiTel Inc. (Nasdaq: UPCS), a PCS Affiliate of Sprint,
announced net subscriber additions for the fiscal quarter ended
December 31, 2002 were approximately 22,400, which increased the
subscriber base to approximately 257,000. 84% of net adds were
in prime credit classes. Churn for the fourth quarter was 3.9%,
a 40 basis point sequential improvement from the third quarter.

Due primarily to lower sales than expected and improved bad debt
experience, the company now expects to incur a net loss before
interest, taxes, depreciation, amortization and non-cash stock
compensation (EBITDA) in the range of a deficit of $2 million to
$5 million for the fourth quarter ended December 31, 2002. The
company ended the year with cash, cash equivalents and
restricted cash balances of approximately $76 million.

UbiquiTel expects to announce full financial and operating
results for the fourth quarter and fiscal year ended
December 31, 2002, after the market closes on March 26, 2003 and
to hold its conference call with investors at 8:30 a.m. ET on
March 27, 2003.

UbiquiTel also reported that it has received notice from The
Nasdaq Stock Market, Inc. that the company has been provided an
additional 180-day grace period, or until July 18, 2003, to
regain compliance with the Nasdaq SmallCap Market's $1.00
minimum bid price per share requirement. Consequently, in order
for UbiquiTel to maintain its listing on the Nasdaq SmallCap
Market, the bid price of UbiquiTel's common stock must close at
$1.00 per share or more for a minimum of 10 consecutive trading
days before July 18, 2003. If the company is not able to regain
compliance with the minimum closing bid price requirement by
that date, Nasdaq has advised the company that it will provide
written notification to UbiquiTel that its common stock will be
delisted, at which time the company may appeal Nasdaq's
determination to its listing qualifications panel.

UbiquiTel is the exclusive provider of Sprint digital wireless
mobility communications network products and services under the
Sprint brand name to midsize markets in the Western and
Midwestern United States that include a population of
approximately 11.1 million residents and cover portions of
California, Nevada, Washington, Idaho, Montana, Wyoming, Utah,
Indiana and Kentucky.

                         *     *     *

As previously reported, Standard & Poor's Ratings Services
lowered its corporate credit ratings on UbiquiTel Inc., and unit
UbiquiTel Operating Co., to triple-'C'-plus from single-'B'-
minus.

At the same time, Standard & Poor's lowered its bank loan rating
on UbiquiTel Operating to triple-'C'-plus from single-'B'-minus
and its subordinated debt rating on the company to triple-'C'-
minus from triple-'C'. The ratings on both companies were placed
on CreditWatch with negative implications.

"The rating downgrade reflects the continued impact of the Clear
Pay customers on churn rate and cash flow measures in the near
term, together with overall slower subscriber growth anticipated
by Standard & Poor's. Although the company's bank covenants were
modified in July 2002, the CreditWatch placement reflects the
potential for the company not meeting the minimum subscribers
covenant over the next six months due to high churn and lower
net customer additions," said Standard & Poor's credit analyst
Rosemarie Kalinowski.


UCAR INT'L: Mellon Financial Corp. Discloses 5% Equity Stake
------------------------------------------------------------
Mellon Financial Corporation beneficially owns an aggregate of
2,810,632 shares of the common stock of UCAR International,
Inc., representing 5.0% of the outstanding common stock of the
Company.  Mellon holds sole voting power over 1,941,042 shares;
shared voting power over 387,100 shares; sole dispositive power
over 2,788,132 shares; and shared dispositive power over 22,500
shares.

Mellon has appended a disclaimer to the filing with the SEC
indicating that the amount beneficially owned includes, where
appropriate, securities not outstanding which are subject to
options, warrants, rights or conversion privileges that are
exercisable within 60 days.  The filing of Mellon's Schedule 13G
shall not be construed as an admission that Mellon Financial
Corporation, or its direct or indirect subsidiaries, including
Mellon Bank, N.A., are for the purposes of Section 13(d) or
13(g) of the Act, the beneficial owners of any securities
covered by the Schedule 13G.

At December 31, 2002, UCAR International had a total
shareholders' equity deficit of $332 million.


UNITED AIRLINES: Court Okays Kirkland Retention as Lead Counsel
---------------------------------------------------------------
United Airlines and its debtor affiliates sought and obtained
the Court's authority to employ the law firm Kirkland & Ellis as
their lead counsel to prosecute their chapter 11 cases.

Kirkland & Ellis will:

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

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

  (c) advise the Debtors in connection with any contemplated
      asset sales or business combinations, including the
      negotiation of asset, stock purchase, merger or joint
      venture agreements, formulate and implement bidding
      procedures, evaluate competing offers, draft appropriate
      corporate documents with respect to the proposed sales,
      and counsel the Debtors in connection with the closing of
      such sales;

  (d) advise the Debtors in connection with postpetition
      financing and cash collateral arrangements and negotiating
      and drafting related documents, provide advice and counsel
      with respect to prepetition financing arrangements, and
      provide advice to the Debtors in connection with the
      emergence financing and capital structure, and negotiate
      and draft related documents;

  (e) advise the Debtors on matters relating to the evaluation
      of the assumption, rejection or assignment of unexpired
      leases and executory contracts;

  (f) provide advice to the Debtors with respect to legal issues
      arising in or relating to the Debtors' ordinary course of
      business including attendance at senior management
      meetings, meetings with the Debtors' financial and
      turnaround advisors and meetings of the board of
      directors, and advice on employee, workers' compensation,
      employee benefits, executive compensation, tax,
      environmental, banking, insurance, securities, corporate,
      business operation, contracts, joint ventures, real
      property, press/public affairs and regulatory matters and
      advise the Debtors with respect to continuing disclosure
      and reporting obligations under securities laws;

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

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

  (i) negotiate and prepare, on the Debtors' behalf, plan(s) of
      reorganization, disclosure statement(s) and all related
      agreements and/or documents and take any necessary action
      on the Debtors' behalf to obtain confirmation of such
      plan(s);

  (j) attend meetings with third parties and participate in
      negotiations with respect to these matters;

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

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

Subject to periodic adjustments, Kirkland & Ellis will bill
United for legal services at its customary hourly rates.  At the
beginning of 2002, those rates were:

           Position                   Hourly Rates
           --------                   ------------
           Partners                   $390 to $710
           Of-Counsel                 $270 to $685
           Associates                 $225 to $510
           Paralegals                  $55 to $215

Kirkland will also seek reimbursement for all other expenses
incurred in connection with the case including photocopying,
witness fees, travel expenses, filing and recording fees,
telecommunications, postage, messenger charges and other
expenses.

James H.M. Sprayregen, Esq., leads the engagement from Kirkland
& Ellis' offices in Chicago. (United Airlines Bankruptcy News,
Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900)


US AIRWAYS: Asks for Court Approval to Assume Virginia Lease
------------------------------------------------------------
US Airways, Inc., and Charles E. Smith Commercial Realty, a
division of Vornado Realty Trust, as agent for Fourth Crystal
Park Associates, agree that US Air should remain in possession
of the Leased Premises on their emergence from bankruptcy.  In a
stipulation, the Parties agree that Crystal Park will grant
certain concessions in exchange for the Debtors' assumption of
the Lease.

The Lease Amendment provides the reduction in the:

   (a) size of the Leased Premises; and

   (b) monthly rent through both an absolute base rent reduction
       and a decrease in the additional rent.

The reduction in the monthly rent will occur on the date that
the Debtors consummate a confirmed plan or joint plan of
reorganization that reorganizes, rather than liquidates, their
businesses.  On the Consummation Date, Crystal Park Associates
will pay to the Lessee an amount equal to the excess of (a) the
aggregate rent paid by the Lessee to Crystal Park Associates for
the period commencing January 1, 2003, to the Consummation Date,
over (b) the aggregate rent that would have been payable by the
Lessee to Crystal Park Associates if the Consummation Date had
occurred on January 1, 2003.

Crystal Park Associates has agreed to a Tenant Improvement
Allowance equal to $2,200,000.  It will consist of a $1,200,000
Initial Allowance to be provided to the Lessee in three
installments of $400,000 over the next three months, and an
Additional Allowance of up to $1,000,000.  The Additional
Allowance will be repaid to Crystal Park Associates, with
interest at the annual rate of 9%.

If the Debtors confirm a plan, they need not repay the Initial
Allowance.  If the Debtors' Liquidity, as defined in the DIP
Agreement, is less than $175,000,000, the case is converted into
a Chapter 7, or the Debtors do not reorganize as planned, the
outstanding Tenant Improvement Allowance will be payable by the
Debtors immediately upon demand.

The value of the Concessions provided by Crystal Park Associates
to the Debtors pursuant to this lease amendment exceeds
$25,000,000.  As a result, Crystal Park Associates is granted an
allowed prepetition, unsecured claim for the value of the
Concessions, subject to a maximum allowed claim equal to one
year's rent under the Lease or $11,573,062.80. (US Airways
Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


USG CORP: Urges Court to Approve Claims Settlement Procedures
-------------------------------------------------------------
USG Corporation, and its debtor-affiliates ask the Court to
establish settlement procedures with respect to certain proofs
of claim filed, or to be timely filed, against them.

Paul N. Heath, Esq., at Richards Layton & Finger, notes that the
claims bar date in these cases, except asbestos-related personal
injury claims, expired on January 15, 2003.  The Debtors will be
reviewing the proofs of claim filed.  Accordingly, the Debtors
want to establish an appropriate, cost-effective settlement
process to deal with them.

Mr. Heath emphasizes that the proposed Settlement Procedures
will not permit the Debtors to make any payment or transfer on
account of a filed claim, instead it will authorize the Debtors
and the Claim holder to agree on the allowed amount and priority
of a specific claim.

                     The Settlement Procedures

If the Debtors and a claimant agree in writing that a claimant
has an allowed prepetition, general unsecured claim for either
$200,000 or less, or $5,000,000 or less and no greater than 15%
above the undisputed, liquidated non-contingent amount listed on
the Debtors' schedules for that claimant, then that agreement
will be binding on the Debtors' estates without further Court
order or notice to any party.  After June 30, 2003, and
quarterly thereafter, the Debtors will file a written report to
the Court within 45 days after each quarter's end.  The report
will list every settlement consummated during the previous
quarter.

Mr. Heath explains that if the Debtors and the claimant agree in
writing that the claimant has a claim outside the parameters
specified or a claim not exceeding $10,000,000, the Debtors will
serve notice describing the proposed agreement on the "Core
Group Service List," pursuant to the Case Management Order.  The
notice will contain:

    -- a copy of the originally filed proof of claim face page
       and any amendments made;

    -- the filed claim amount and priority according to the
       settlement and the Debtor subject to the claim; and

    -- a brief statement explaining the settlement's
       justification.

If the Debtors receive no objection within 20 days of the
notice's service date, the agreement will be binding on the
Debtors' estates.  If an objection is received, a Court order
will be required before the Debtors and the claimant can
consummate their settlement.

Any proposed claim settlement for an amount outside of these
parameters is not subject to these Settlement Procedures.

Mr. Heath points out that these Settlement Procedures will
reduce expenses -- maximizing the value of the Debtors' estates
and benefiting their creditors and other interested parties --
because the Debtors will be able to avoid the cost of having a
counsel draft and file numerous motions and send out numerous
hearing notices.  The Settlement Procedures will also reduce the
burden on the Court's docket and yet protect creditors'
interests through the notice and objection procedures, Mr. Heath
notes.

                       PD Committee Objects

The Official Committee of Asbestos Property Damage Claimants is
not too happy with the Debtors' proposed Settlement Procedures.

Christopher A. Ward, Esq., at The Bayard Firm, notes that the
Settlement Procedures seek to establish a truncated process for
settling, but not immediately paying, timely filed non-asbestos
unsecured proofs of claim.

Mr. Ward points out that there isn't a procedure for a party-in-
interest to object to any agreement between the Debtors and a
claimant for settlement of a claim less than $200,000, as "such
agreement shall be binding upon the Debtors' estates without
further order of the Court or notice to any party."  In fact,
the proposed Settlement procedures only require a written report
be filed within 45 days after the end of each quarter, and a
listing all settlements reached during the previous quarter.
However, Mr. Ward argues, given that the settlements are binding
on the Debtors' estates without further Court order, the report
is useless to parties-in-interest who have already lost their
ability to object to those claims.  Since the Debtors have not
been able to provide a claims matrix, the PD Committee is unable
to assess the risk of losing the ability to objection to claims
below $200,000.

Mr. Ward believes that the Debtors' request is "premature at
this juncture."  The January 15, 2003 bar date for filing proofs
of claim has just past.  The Debtors and their claims agent,
Logan & Company, Inc., have been unable to provide a claims
matrix of filed general unsecured claims, excluding asbestos
property damage claims, to allow the PD Committee, or any other
interested party to assess the Settlement Procedures' potential
impact on the Debtors' estates.

Furthermore, Mr. Ward continues, the Debtors do not offer a
glimpse of the volume or amount of the filed prepetition, non-
asbestos, general unsecured claims.  Thus, the PD Committee asks
the Court to continue the motion until a claims matrix is
available.

According to Mr. Ward, the Debtors' argument that the Settlement
Procedures "will avoid the cost of having counsel draft and file
numerous motions and send out numerous hearing motions" hardly
serves as a "basis to alter fundamental rights of due process
and notions of fair play."

The PD Committee insists that the Court should deny the Debtors'
request. (USG Bankruptcy News, Issue No. 41; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


WESTERN GROWERS: S&P Revises Junk Rating to R after Insolvency
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its counterparty
credit and financial strength ratings on Western Growers
Insurance Co., to 'R' from 'CCCpi'.

"The ratings were revised after learning that the Orange County
Superior Court of California signed a liquidation order with a
finding of insolvency against the company on Jan. 17, 2003,"
said Standard & Poor's credit analyst James Sung. The court
appointed the California Insurance Commissioner as Liquidator of
the company.

In assigning its previous 'CCCpi' rating on Western Growers,
Standard & Poor's cited concerns about the company's depleted
capital, and the extremely competitive workers' compensation
market in California.

Western Growers, based in Newport Beach, Calif., provides
workers' compensation and group accident and health coverage for
members of the Western Growers Assn., a nonprofit association of
produce growers in California and Arizona. Western Growers
commenced operations in 1986.

An insurer rated 'R' is under regulatory supervision owing to
its financial condition. During the pendency of the regulatory
supervision, the regulators may have the power to favor one
class of obligations over others or pay some obligations and not
others. The rating does not apply to insurers subject only to
nonfinancial actions such as market conduct violations.


WHEELING-PITTSBURGH: Wants to Enter OCC & NSTA Distribution Deal
----------------------------------------------------------------
Wheeling-Pittsburgh Steel Corporation and Wheeling-Pittsburgh
Corporation jointly ask for:

       (1) authorization for WPSC to sign a distribution
           agreement for distribution of tin mill products with
           Ohio Coatings Company and Nippon Steel Trading
           America, Inc., fka Nittetsu Shoji America, Inc.; and

       (2) authorizing WPC to enter into an amendment to the OCC
           Shareholders' Agreement to permit the parties to
           enter into the new distribution agreement.

Mr. Opincar explains that WPSC is the eighth largest integrated
steel manufacturer in the United States.  WPSC, together with
other direct and indirect subsidiaries of WPC (including the
remaining debtors in these cases), produces and sells a broad
array of flat rolled steel products, which are sold to steel
service centers, converters, processors, the construction
industry and the container and appliance industries.

                   Ohio Coatings Corporation

OCC was created as a joint venture of WPC, NSTA and Dong Yang
Tinplate America Corp. pursuant to the Close Corporation and
Shareholders' Agreement, dated as of March 24, 1994.  WPC and
Dong Yang each own 50% of the common stock of OCC, and NSTA
holds $3 million of preferred stock in OCC. OCC is a corporation
organized to build, own and operate a tin coating facility
located in Yorkville, Ohio.  The OCC tin-coating facility is the
only domestic electro-tin plating facility constructed in the
past 30 years and supplies tin plate to the container and
automotive industries.  WPC and its subsidiaries produce all
their tin coated products through OCC.

Through a Distribution Agreement, dated as of February 21, 1995,
between OCC and WPSC, WPSC was the distributor for a maximum of
85% of OCC's total annual prime coating output for prime
production capacities of less than 150,000 tons, plus a maximum
of 65% of the additional prime coating output for prime
production capacities of 150,000 tons or more.  Under the terms
of the Old Distribution Agreement, WPSC purchased tin mill
products from OCC on 30-day terms.  In January of 1999, the Old
Distribution Agreement was orally amended to provide that WPSC
would be the exclusive distributor of OCC tin mill products.

In connection with these arrangements, WPSC made payment for tin
mill products purchased from OCC within 30 days of delivery.
However, under prevailing market practices, WPSC's customers do
not take delivery of these products for 45 to 60 days and do not
make payment for these products until 45 to 60 days after
delivery.  Consequently, while WPSC had to pay OCC within 30
days, it did not itself receive payment from its customers for
90 days or more.

As a result of the terms of the Old Distribution Agreement and
customary payment terms in the tin industry, at any given time a
significant portion of WPSC's liquid capital was committed in
the form of tin inventory and accounts receivable from tin
customers.

In 2001, in order to mitigate the burden on its limited
financial resources caused by the existing distribution
arrangements for OCC's tin mill products, WPSC negotiated a
Distribution Agreement with OCC, dated as of April 1, 2001,
under which OCC appointed WPSC as its authorized exclusive
distributor for, and agreed to sell WPSC, tin mill products.

Contemporaneously, WPSC negotiated a Distribution Agreement with
NSTA, dated as of April 1, 2001.  Under the terms of the NSTA
Distribution Agreement, NSTA has the right to purchase from WPSC
approximately 70% of OCC's entire production of tin mill
products for each calendar year during the term of the
Distribution Agreements and WPSC appointed NSTA as its
authorized exclusive distributor for, and agreed to sell NSTA's
tin mill products to certain specified customers.  The NSTA
Distribution Agreement also provided for payment to WPSC within
30 days.

                   The New Distribution Agreement

OCC is in the process of refinancing its borrowed money debt.
Bank of America, OCC's new source of financing, has required
that OCC's current distribution arrangements be revised.
Consequently, WPSC has negotiated a new Distribution Agreement
with OCC and NSTA under which the NSTA Distribution Agreement is
terminated and the OCC Distribution Agreement is modified to
permit OCC to comply with the provisions of the New Distribution
Agreement.

The essential terms of the New Distribution Agreement are:

       (a)  Term.  The term of the New Distribution Agreement
            begins on its effective date and will continue
            through December 31, 2005.  The New Distribution
            Agreement will be extended for successive one-year
            terms unless either NSTA or OCC gives written notice
            of intent to terminate prior to August 1 of the
            prior year.

       (b)  Effective Date.  The New Distribution Agreement
            shall apply to tin products determined by OCC, WPSC
            and NSTA subsequent to Judge Bodoh's approval of the
            New Distribution Agreement.

       (c)  Distributorship.  OCC appoints NSTA to be its
            authorized, independent exclusive distributor of
            tin mill products with respect to orders
            originating from certain specified accounts.

       (d)  Nominated Quantities.  NSTA has the right to
            purchase from OCC approximately 70% of OCC's entire
            production of tin mill products for each calendar
            year during the term of the New Distribution
            Agreement.

       (e)  Prices . Nominated Quantities.  Prior to the first
            or second period of each calendar year, OCC shall
            notify NSTA of its production forecasts and proposed
            prices for the sale of tin mill products to be sold
            to customers during that period.  OCC shall have the
            right unilaterally to modify its established list
            price and to withdraw any price previously offered,
            unless a purchase order and order acknowledgment
            have been issued.

       (f)  Termination of NSTA Distribution Agreement and
            Amendment of OCC Distribution Agreement.  WPSC and
            NSTA agree that the NSTA Distribution Agreement
            shall terminate with respect to the obligations
            of the parties to solicit orders for and to sell tin
            mill products to customers on and after the
            effective date.

All orders for tin mill products submitted to and accepted by
WPSC prior to the effective date shall continue to be
governed by the terms and provisions of the NSTA Distribution
Agreement.  WPSC acknowledges and consents to the modification
of the OCC Distribution Agreement to permit OCC to comply
with the terms and provisions of the New Distribution Agreement.

The OCC Distribution Agreement between WPSC and OCC shall
otherwise remain in full force and effect unless modified by
WPSC and OCC in a written agreement.

Mr. Opincar points out that WPSC has very few additional duties
under the New Distribution Agreement, including provision of
storage for tin mill products purchased by NSTA at WPSC's
Yorkville storage facility of WPSC at no cost to NSTA.

            Amendment to Shareholders' Agreement

The Shareholders' Agreement obliges OCC to redeem NSTA's
preferred stock upon termination of the NSTA Distribution
Agreement.  The New Distribution Agreement requires the
termination of the NSTA Distribution Agreement.

Redemption by OCC of NSTA's preferred stock is an undesirable
event because it would deplete OCC's cash reserves and thereby
threaten the ongoing production of tin mill products, on which
production OCC, NSTA, and WPSC rely.  Therefore, OCC, NSTA and
WPC wish to enter into the Sixth Amendment to the Close
Corporation and Shareholders' Agreement to permit the NSTA
Distribution Agreement to be terminated without requiring OCC to
buy back NSTA's preferred stock.

Mr. Opincar argues that a transaction proposed by a debtor
pursuant to Section 363(b) of the Bankruptcy Code should be
approved if supported by a sound business justification.  OCC is
in the process of refinancing its borrowed money debt and Bank
of America, OCC's new source of financing, has required a change
to the distribution arrangements between OCC, WPSC and NSTA in
connection with such new financing.  WPC is a 50% shareholder
and a major creditor of OCC.  In addition, WPSC is a major
supplier to OCC.  As shareholder, creditor and supplier, WPC
and WPSC respectfully submit that the New Distribution Agreement
is in the best interests of both debtors. (Wheeling-Pittsburgh
Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


WICKES INC: Extends Exchange Offer for 11-5/8% Notes to Feb. 19
---------------------------------------------------------------
Wickes Inc. (NASDAQSC:WIKS), a leading distributor of building
materials and manufacturer of value-added building components,
announced that the expiration date for its offer to exchange an
equal principal amount of its new Senior Secured Notes due
July 29, 2005, for any and all of its outstanding 11-5/8 percent
Senior Subordinated Notes due December 15, 2003 has been
extended to 5:00 p.m., New York City time, on Wednesday,
February 19, 2003. Wickes will accept for exchange any and all
Subordinated Notes validly tendered and not withdrawn prior to
the expiration date.

The closing of the Exchange Offer, however, is subject to the
Company obtaining the consent of its senior lenders or the
refinancing of its senior debt with a new senior lender who
consents to the Exchange Offer. There can be no assurance that
such consent or refinancing will be obtained, although
discussions have commenced with a potential new senior lender to
refinance the senior debt.

To date, Wickes has received tenders from holders of
approximately 67 percent of the outstanding aggregate principal
amount of Subordinated Notes. This amount includes tenders from
the three largest holders, representing approximately 40 percent
of the outstanding Subordinated Notes, who had previously agreed
to exchange their notes pursuant to the Exchange Offer.

James A. Hopwood, chief financial officer, stated, "We are
pleased that we have received tenders sufficient to amend the
indenture governing the Subordinated Notes. We're working
diligently to complete a refinancing of our senior credit
facility over the next several weeks allowing us to close
simultaneously on the exchange offer and a new revolving credit
facility. Many of the bondholders I have spoken to recently
appreciate the opportunity to improve the structure of their
investment by exchanging their current bonds for a new security.
I am hopeful that Wickes will have the opportunity to discuss
these dynamics with the remaining bondholders in the near
future."

Wickes Inc., is a leading distributor of building materials and
manufacturer of value-added building components in the United
States, serving primarily building and remodeling professionals.
The Company distributes materials nationally and
internationally, operating building centers in the Midwest,
Northeast and South. The Company's building component
manufacturing facilities produce value-added products such as
roof trusses, floor systems, framed wall panels, pre-hung door
units and window assemblies. Wickes Inc.'s Web site,
http://www.wickes.comoffers a full range of valuable services
about the building materials and construction industry.

                          *    *    *

As reported in Troubled Company Reporter's November 6, 2002
edition, Standard & Poor's lowered its corporate credit
rating on Wickes Inc., to triple-'C' from triple-'C'-plus. The
downgrade was based on the company's weak liquidity and Standard
& Poor's concern that Wickes will be challenged to improve
operations and liquidity significantly after it completes the
sale of its Wisconsin and Northern Michigan operations.


WORLDCOM INC: Wants Schedule Filing Period Extended to March 31
---------------------------------------------------------------
Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New
York, informs the U.S. Bankruptcy Court for the Southern
District of New York that Worldcom Inc., and its debtor-
affiliates have finished their schedules of liabilities,
schedules of executory contracts and unexpired leases,
statements of financial affairs, and lists of equity holders.
The Debtors, with the assistance of their professional advisors,
continue to work diligently and expeditiously on the preparation
of their schedules of assets. However, due to the complexity and
diversity of their operations, the Debtors anticipate that they
will be unable to complete and file their Schedules of Assets
prior to the January 31, 2003 deadline.

Accordingly, the Debtors ask the Court to further extend the
deadline to file their Schedules of Assets to March 31, 2003.

In response to the well-publicized allegations of fraud, Ms.
Goldstein reports that the Debtors have instituted continuous
internal reviews and financial investigations and have been
cooperating fully with all federal and state law enforcement
authorities in an effort to fully and accurately restate certain
of their financial statements.  The Debtors will be unable to
file their Schedules of Assets prior to the current deadline
because a lot of work needs to be done in completing the
restatements, including the reassessment of property, plants,
and equipment.  On top of that, the Debtors' employees and
professionals face demands to stabilize the Debtors' business
operations during the initial postpetition period. (Worldcom
Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

DebtTraders says that Worldcom Inc.'s 7.875% bonds due 2003
(WCOE03USR1) are trading at 23 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCOE03USR1
for real-time bond pricing.


XM SATELLITE: Majority of Noteholders Tender 14% Senior Notes
-------------------------------------------------------------
XM Satellite Radio, Inc., (Nasdaq: XMSR) already received
tenders and consents from a majority of the outstanding 14
percent Senior Secured Notes due 2010. Once tendered, there are
no withdrawal rights. In addition, the company announced that it
has received the necessary consents from General Motors and its
investor group, which together have committed $475 million in
financial support and funding, to lower the minimum
participation threshold in the exchange offer to 50.1 percent.
As a result, the company expects to complete the exchange offer
and close the funding package subject to customary closing
conditions.

The deadline for the exchange offer is midnight EST Thursday,
January 23, 2003. Upon completion of the exchange offer and
consent solicitation, significant aspects of the existing notes'
indenture will be amended, which includes the elimination of
many default conditions as well as other remedies and
protections to noteholders. XM is offering a package of cash and
new securities, including new 14 percent Senior Secured Discount
Notes due 2009 and warrants to purchase common stock, to
noteholders electing to participate in the exchange. The new
senior secured notes will also share in an improved collateral
package consisting of substantially all the assets of the
company.

"We are pleased that we have already satisfied the minimum 50.1
percent participation condition in the exchange offer and that
we now have the support to proceed forward and close the funding
package. The increase in our funding commitments announced last
week, mitigated the need for the higher participation percentage
threshold," said XM Chief Financial Officer Joe Euteneuer.

Hugh Panero, Chief Executive Officer, stated, "We believe that
with the completion of this funding package, XM's business plan
will be fully-funded through cash flow breakeven. We are pleased
by the strong encouragement and support from all our
stakeholders and look forward to continuing XM's leadership in
satellite radio, an exciting new entertainment service."

There can be no assurance that the company will be able to
consummate the General Motors transactions, any transactions
with its new investor group or the exchange offer.

                         *     *     *

As reported in Troubled Company Reporter's November 21, 2002
edition, Standard & Poor's placed its triple-'C'-plus corporate
credit rating on XM Satellite Radio Holdings Inc., and XM
Satellite Radio Inc., (which are analyzed on a consolidated
basis) on CreditWatch with negative implications based on unmet
near-term funding needs.

"XM's cash needs remain significant, and current liquid assets
are only expected to fund XM's operations through the first
quarter of 2003," according to Standard & Poor's credit analyst
Steve Wilkinson. He added, "The company's near-term funding
needs are a growing concern, and failure to obtain a binding
commitment for a significant amount of new capital by mid-
December will result in a downgrade."


* Hill & Barlow Group Joins Ropes & Gray's Private Client Group
---------------------------------------------------------------
Ropes & Gray announced that the Trusts & Estates Department and
Private Clients Group of Hill & Barlow will join the firm.
Combined, the new Private Client Group will include 26 lawyers
and an overall total of 100 personnel.

"Boston is a healthy and growing market for private client
services," said Douglass N. Ellis, Jr., Chairman of Ropes &
Gray. "This combination made sense in our overall plan for
'smart growth' at the firm level and for enhancing what we
provide to our clients."

The combined group will be one of the largest of its kind in
Boston and nationally, serving clients who seek a wide range of
coordinated legal and financial advice from one trusted group of
advisors. Private client services include estate and gift
planning, estate settlement and tax services as well as
financial planning, investment management, fiduciary services,
philanthropic advice and family office services.

"We saw Ropes & Gray as an attractive opportunity for many
reasons," said Tom Belknap, Chair of Hill & Barlow's Trusts &
Estates Department. "Some of our client relationships have been
built over generations, and it was important for our group to
find a home that was most closely aligned with our philosophy,
approach, and way of doing business." Added Winifred Li, Chair
of Hill & Barlow's Private Clients Group, "This decision is the
result of a very long and deliberate process of finding the
right match. We were pleased to find a firm that delivers the
highest quality of legal and personal service."

Robert Shapiro, head of the Private Client Group at Ropes &
Gray, will continue in his role with the combined group. "With
our new colleagues, we add even more expertise to the Private
Client Group for the benefit of the families we serve," said
Shapiro. "We will focus on continued expansion of the depth and
breadth of the services we offer at the highest level of
quality."

As trustees, members of the Private Client Group are responsible
for the management of more than $4.5 billion of trust assets.
The trust management services are integrated with each client's
goals and estate plans, with consideration of tax effects and
other factors.

Since 1865, Ropes & Gray has been a leading U.S. law firm
serving the needs of businesses and individuals throughout the
nation and the world. With more than 500 lawyers, Ropes & Gray
creates solutions to complex legal problems across a wide range
of legal disciplines, including: corporate, creditors' rights,
employee benefits, environmental, health care, intellectual
property and technology, labor and employment, life sciences,
litigation, private client services, real estate, and tax. The
firm has offices in Boston; New York; San Francisco; and
Washington, D.C.; and conference centers in Providence and
London. For further information, please visit
http://www.ropesgray.com


* BOND PRICING: For the week of January 27 - 31, 2003
-----------------------------------------------------

Issuer                                Coupon  Maturity  Price
------                                ------  --------  -----
Adelphia Communications                3.250%  05/01/21     8
Adelphia Communications                6.000%  02/15/06     8
Adelphia Communications               10.875%  10/01/10    44
Advanced Micro Devices Inc.            4.750%  02/01/22    61
AES Corporation                        4.500%  08/15/05    55
AES Corporation                        8.000%  12/31/08    60
AES Corporation                        8.750%  06/15/08    61
AES Corporation                        8.875%  02/15/11    62
AES Corporation                        9.375%  09/15/10    66
AES Corporation                        9.500%  06/01/09    66
Agro-Tech Corp.                        8.625%  10/01/07    73
Akamai Technologies                    5.500%  07/01/07    44
Alaska Communications                  9.375%  05/15/09    72
Alexion Pharmaceuticals                5.750%  03/15/07    68
Allegheny Generating Company           6.875%  09/01/23    73
Alkermes Inc.                          3.750%  02/15/07    64
Alpharma Inc.                          3.000%  06/01/06    74
Amazon.com Inc.                        4.750%  02/01/09    73
American Tower Corp.                   5.000%  02/15/10    71
American & Foreign Power               5.000%  03/01/30    61
Amkor Technology Inc.                  5.000%  03/15/07    49
AMR Corp.                              9.000%  09/15/16    51
AMR Corp.                              9.750%  08/15/21    42
AMR Corp.                              9.800%  10/01/21    42
AMR Corp.                             10.000%  04/15/21    43
AMR Corp.                             10.200%  03/15/20    44
AnnTaylor Stores                       0.550%  06/18/19    62
Aquila Inc.                            6.625%  07/01/11    75
Argo-Tech Corp.                        8.625%  10/01/07    70
Applied Extrusion                     10.750%  07/01/11    66
Aspen Technology                       5.250%  06/15/05    66
BE Aerospace Inc.                      8.875%  05/01/11    72
Best Buy Co. Inc.                      0.684%  06?27/21    70
Borden Inc.                            7.875%  02/15/23    56
Borden Inc.                            8.375%  04/15/16    63
Borden Inc.                            9.200%  03/15/21    64
Borden Inc.                            9.250%  06/15/19    57
Boston Celtics                         6.000%  06/30/38    65
Brocade Communication Systems          2.000%  01/01/07    75
Brooks-PRI Automation Inc.             4.750%  06/01/08    74
Building Materials Corp.               8.000%  10/15/07    75
Burlington Northern                    3.200%  01/01/45    53
Burlington Northern                    3.800%  01/01/20    73
Calair LLC/Capital                     8.125%  04/01/08    59
Calpine Corp.                          4.000%  12/26/06    55
Calpine Corp.                          7.625%  04/15/06    52
Calpine Corp.                          8.500%  02/15/11    45
Calpine Corp.                          8.625%  08/15/10    47
Case Corp.                             7.250%  01/15/16    73
CD Radio Inc.                         14.500%  05/15/09    42
Cell Therapeutic                       5.750%  06/15/08    58
Centennial Cellular                   10.750%  12/15/08    53
Champion Enterprises                   7.625%  05/15/09    41
Charter Communications, Inc.           4.750%  06/01/06    20
Charter Communications, Inc.           5.750%  10/15/05    23
Charter Communications Holdings        8.625%  04/01/09    46
Charter Communications Holdings        9.625%  11/15/09    46
Charter Communications Holdings       10.250%  01/15/10    46
Charter Communications Holdings       11.125%  01/15/11    46
Ciena Corporation                      3.750%  02/01/08    72
Cincinnati Bell Telephone (Broadwing)  6.300%  12/01/28    68
Cincinnati Bell Inc. (Broadwing)       7.250%  06/15/23    70
CNET Inc.                              5.000%  03/01/06    65
Comcast Corp.                          2.000%  10/15/29    23
Comforce Operating                    12.000%  12/01/07    57
Commscope Inc.                         4.000%  12/15/06    74
Conexant Systems                       4.000%  02/01/07    48
Conseco Inc.                           8.750%  02/09/04    16
Continental Airlines                   4.500%  02/01/07    45
Corning Inc.                           6.750%  09/15/13    74
Corning Inc.                           6.850%  03/01/29    62
Corning Glass                          8.875%  03/15/16    75
Cox Communications Inc.                0.348%  02/23/21    72
Cox Communications Inc.                0.426%  04/19/20    46
Cox Communications Inc.                2.000%  11/15/29    31
Cox Communications Inc.                3.000%  03/14/30    41
Crown Cork & Seal                      7.375%  12/15/26    70
Cubist Pharmacy                        5.500%  11/01/08    48
Cummins Engine                         5.650%  03/01/98    64
Dana Corp.                             7.000%  03/01/29    75
DDI Corp.                              6.250%  04/01/07    16
Delco Remy International              10.625%  08/01/06    55
Delta Air Lines                        7.900%  12/15/09    67
Delta Air Lines                        8.300%  12/15/29    55
Delta Air Lines                        9.000%  05/15/16    65
Delta Air Lines                        9.250%  03/15/22    62
Delta Air Lines                        9.750%  05/15/21    66
Delta Air Lines                       10.375%  12/15/22    69
EOTT Energy Partner                   11.000%  10/01/09    67
Echostar Communications                4.875%  01/01/07    74
Echostar Communications                5.750%  05/15/08    73
Edison Mission                         9.875%  04/15/11    29
Edison Mission                        10.000%  08/15/08    36
El Paso Corp.                          7.000%  05/15/11    68
El Paso Corp.                          7.750%  01/15/32    59
El Paso Energy                         6.750%  05/15/09    73
El Paso Energy                         8.050%  10/15/30    64
El Paso Natural Gas                    7.500%  11/15/26    57
El Paso Natural Gas                    8.625%  01/15/22    66
Emulex Corp.                           1.750%  02/01/07    72
Energy Corporation America             9.500%  05/15/07    62
Enron Corp.                            9.875%  06/15/03    16
Enzon Inc.                             4.500%  07/01/08    74
Equistar Chemicals                     7.550%  02/15/26    71
E*Trade Group                          6.000%  02/01/07    74
Finisar Corp.                          5.250%  10/15/08    50
Finova Group                           7.500%  11/15/09    36
Fleming Companies Inc.                10.625%  07/31/07    56
Foamex LP/Capital                     10.750%  04/01/09    72
Ford Motor Co.                         6.625%  02/15/28    74
Fort James Corp.                       7.750%  11/15/23    74
General Physics                        6.000%  06/30/04    51
Geo Specialty                         10.125%  08/01/08    58
Georgia-Pacific                        7.375%  12/01/25    74
Goodyear Tire & Rubber                 7.000%  03/15/28    53
Goodyear Tire & Rubber                 7.875%  08/15/11    74
Great Atlantic                         9.125%  12/15/11    66
Great Atlantic & Pacific               7.750%  04/15/07    74
Gulf Mobile Ohio                       5.000%  12/01/56    62
Health Management Associates Inc.      0.250%  08/16/20    68
Human Genome                           3.750%  03/15/07    65
Human Genome                           5.000%  02/01/07    71
I2 Technologies                        5.250%  12/15/06    63
Ikon Office                            6.750%  12/01/25    65
Ikon Office                            7.300%  11/01/27    69
Imcera Group                           7.000%  12/15/13    75
Imclone Systems                        5.500%  03/01/05    71
Inhale Therapeutic Systems Inc.        3.500%  10/17/07    56
Inland Steel Co.                       7.900%  01/15/07    71
Internet Capital                       5.500%  12/21/04    37
Isis Pharmaceutical                    5.500%  05/01/09    72
Juniper Networks                       4.750%  03/15/07    73
Kmart Corporation                      9.375%  02/01/06    18
Kulicke & Soffa Industries Inc.        4.750%  12/15/06    65
LTX Corporation                        4.250%  08/15/06    65
Lehman Brothers Holding                8.000%  11/13/03    72
Level 3 Communications                 6.000%  09/15/09    42
Level 3 Communications                 6.000%  03/15/10    41
Level 3 Communications                 9.125%  05/01/08    66
Level 3 Communications                11.000%  03/15/08    66
Liberty Media                          3.500%  01/15/31    65
Liberty Media                          3.750%  02/15/30    52
Liberty Media                          4.000%  11/15/29    56
LTX Corp.                              4.250%  08/15/06    68
Lucent Technologies                    5.500%  11/15/08    65
Lucent Technologies                    6.450%  03/15/29    53
Lucent Technologies                    6.500%  01/15/28    53
Lucent Technologies                    7.250%  07/15/06    74
Magellan Health                        9.000%  02/15/08    25
Mail-Well I Corp.                      8.750%  12/15/08    70
Mapco Inc.                             7.700%  03/01/27    69
Medarex Inc.                           4.500%  07/01/06    65
Metris Companies                      10.125%  07/15/06    38
Mikohn Gaming                         11.875%  08/15/08    74
Mirant Corp.                           5.750%  07/15/07    50
Mirant Americas                        7.200%  10/01/08    49
Mirant Americas                        7.625%  05/01/06    65
Mirant Americas                        8.300%  05/01/11    43
Mirant Americas                        8.500%  10/01/21    35
Missouri Pacific Railroad              4.750%  01/01/20    74
Missouri Pacific Railroad              4.750%  01/01/30    70
Missouri Pacific Railroad              5.000%  01/01/45    61
Motorola Inc.                          5.220%  10/01/21    63
MSX International                     11.375%  01/15/08    67
NTL Communications Corp.               7.000%  12/15/08    19
National Steel                         9.875%  03/01/09    56
National Vision                       12.000%  03/30/09    50
Natural Microsystems                   5.000%  10/15/05    61
Nextel Communications                  5.250%  01/15/10    72
Nextel Partners                       11.000%  03/15/10    67
NGC Corp.                              7.625%  10/15/26    56
Noram Energy                           6.000%  03/15/12    72
Northern Pacific Railway               3.000%  01/01/47    51
Northern Telephone Capital             7.875%  06/15/26    61
Northwest Airlines                     8.130%  02/01/14    64
NorthWestern Corporation               6.950%  11/15/28    72
Oak Industries                         4.875%  03/01/08    63
ON Semiconductor                      12.000%  05/15/08    73
ONI Systems Corporation                5.000%  10/15/05    74
OSI Pharmaceuticals                    4.000%  02/01/09    70
Owens-Illinois Inc.                    7.800%  05/15/18    68
Pegasus Communications                 9.750%  12/01/06    57
PG&E Gas Transmission                  7.800%  06/01/25    61
Providian Financial                    3.250%  08/15/05    74
PSEG Energy Holdings                   8.500%  06/15/11    75
Quanta Services                        4.000%  07/01/07    56
Qwest Capital Funding                  7.000%  08/03/09    75
Qwest Capital Funding                  7.250%  02/15/11    74
RF Micro Devices                       3.750%  08/15/05    74
RF Micro Devices                       3.750%  08/15/05    74
Redback Networks                       5.000%  04/01/07    26
Revlon Consumer Products               8.625%  02/01/08    46
Rural Cellular                         9.750%  01/15/10    61
Ryder System Inc.                      5.000%  02/25/21    71
SBA Communications                    10.250%  02/01/09    62
SC International Services              9.250%  09/01/07    66
Schuff Steel Co.                      10.500%  06/01/08    74
SCI Systems Inc.                       3.000%  03/15/07    74
Sepracor Inc.                          5.000%  02/15/07    68
Sepracor Inc.                          5.750%  11/15/06    72
Silicon Graphics                       5.250%  09/01/04    54
Sotheby's Holdings                     6.875%  02/01/09    74
TCI Communications Inc.                7.125%  02/15/28    74
TECO Energy Inc.                       7.000%  05/01/12    73
Tenneco Inc.                          11.625%  10/15/09    70
Teradyne Inc.                          3.750%  10/15/06    72
Tesoro Pete Corp.                      9.000%  07/01/08    67
Time Warner Telecom                    9.750%  07/15/08    62
Time Warner                           10.125%  02/01/11    61
Transwitch Corp.                       4.500%  09/12/05    59
Tribune Company                        2.000%  05/15/29    74
US Airways Passenger                   6.820%  01/30/14    74
Universal Health Services              0.426%  06/23/20    64
US Timberlands                         9.625%  11/15/07    65
Vector Group Ltd.                      6.250%  07/15/08    67
Veeco Instrument                       4.125%  12/21/08    72
Vertex Pharmaceuticals                 5.000%  09/19/07    75
Viropharma Inc.                        6.000%  03/01/07    46
Weirton Steel                         10.750%  06/01/05    70
Western Resources Inc.                 6.800%  07/15/18    75
Westpoint Stevens                      7.875%  06/15/08    30
Williams Companies                     7.625%  07/15/19    74
Williams Companies                     7.750%  06/15/31    69
Williams Companies                     7.875%  09/01/21    74
Williams Companies                     8.875%  09/15/12    68
Williams Companies                     9.375%  11/15/21    60
Williams Companies                    10.250%  07/15/20    66
Williams Holdings Delaware             6.500%  12/01/08    69
Witco Corp.                            6.875%  02/01/26    70
Worldcom Inc.                          7.375%  01/15/49    23
Xerox Corp.                            0.570%  04/21/18    64

                          *********

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 ***