TCR_Public/030128.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

             Tuesday, January 28, 2003, Vol. 7, No. 19

                           Headlines

A NOVO BROADBAND: Further Delays Filing Annual Report
ABRAXAS PETROLEUM: Closes Canadian Asset Sale for $138 Million
ALASKA COMMS: Will Publish Fourth Quarter Results on March 6
ALLETE INC: December 31 Working Capital Deficit Tops $80 Million
ALTERRA HEALTHCARE: Gets $68-Mil. Commitment from Senior Housing

AMERICAN AIRLINES: Fitch Assign CCC+ Rating to Sr. Unsec. Debt
AMERICAN COMMERCIAL: JPMorgan Delivers Cross-Default Notice
AMERICAN TOWER: Asks Lenders for Consent to Convertible Buy-Back
AMERIGAS PARTNERS: Look for 1st Fiscal Quarter Results Tomorrow
AMI SEMICONDUCTOR: S&P Ratchets Bank Loan Rating Up a Notch

ANCHOR GLASS CONTAINER: S&P Assigns B+ Corporate Credit Rating
ARCH COAL INC: S&P Rates $150 Million of Conv. Preferreds at B+
ASIA GLOBAL CROSSING: Wants to File Part of Sale Pact Under Seal
ATA HOLDINGS: Names Charles T. Cleaver Vice Pres. & Treasurer
AVCORP INDUSTRIES: Sept. 30 Working Capital Deficit Tops C$11MM

BASIS100: Appoints Robert J. Smith as New Chief Fin'l Officer
BELL CANADA INT'L: Fourth Quarter Net Loss Reaches $71 Million
BUDGET GROUP: Wants Nod for $20-Mill. Asset Sale Pact with Avis
CALPINE: Caps Price of Secondary Offering in Power Income Fund
CANNONDALE CORP: Files for Voluntary Chapter 11 Reorganization

CASCADES: S&P Rates $325M Proposed Senior Unsecured Notes at BB
CMS ENERGY: Suspends Dividend Payment to Bolster Financial Plan
COMDISCO: Opts to Redeem $50 Million of 11% Notes
COMMUNICATION DYNAMICS: Continues Using Lenders' Cash Collateral
CONE MILLS: S&P Places Junk L-T Corp. Rating on Watch Negative

CONSECO: Finance Debtor Wants Nod to Preserve Pooling Agreements
DOCTORS COMMUNITY: Health Care REIT Believes It's Oversecured
DOMAN INDUSTRIES: Court-Appointed Monitor Files December Report
DYNAMOTIVE ENERGY: Begins Restructuring of European Operations
EL PASO CORP: Unit Sells CE Generation to TransAlta for $240MM

ENCOMPASS SERVICES: BofA Balks at Houlihan Lokey's Fee Structure
ENRON CORP: Court Approves FTI's Engagement as Financial Advisor
EOTT ENERGY: Court Moves Confirmation Hearing to February 4
ESSENTIAL THERAPEUTICS: Shareholders Nix Preferred Conversion
EVERCOM INC: 11% Senior Note Exchange Offer Extended to Jan 31

FREEPORT-MCMORAN: Caps Price for $500-Million Sr. Notes Offering
GEMSTAR-TV: Intends to Further Restate Financial Statements
GENTEK INC: Court Tinkers with Shipping Claims Payment Order
GENUITY INC: Asking Court to Clarify Tax Payment Order
GEORGIA-PACIFIC CORP: Prices $1.5 Billion Senior Debt Offering

GRUMMAN OLSON: Wants to Continue Alvarez & Marsal's Engagement
HANGER ORTHOPEDIC: Applauds S&P's Corp. Credit Rating Upgrade
HEXCEL CORP: Dec. 31 Net Capital Deficit Narrows to $127 Million
HOLLYWOOD ENTERTAINMENT: Will Publish Recent Results on Feb. 20
INTEGRATED HEALTH: Abe Briarwood Pitches Best Bid at Auction

INTEGRATED HEALTH: Divesting Seattle Skilled Nursing Facility
INTERLIANT INC: Brings-In Urbach Kahn to Replace Ernst & Young
INT'L TOTAL: Wins Creditors' Approval of Liquidation Plan
KAISER ALUMINUM: Nine New Debtors Hire Logan as Claims Agent
KEY3MEDIA GROUP: Closes VON Events Division Sale to pulver.com

LIFESMART NUTRITION: Ability to Continue Operations Uncertain
LTV: Court OKs Stipulation with USWA re Tubular Plant Benefits
MATLACK SYSTEMS: Trustee Has Until Feb. 28 to Decide on Leases
MCMS INC: Secures Exclusivity Extension Until February 12, 2003
METAWAVE COMMS: Will Likely File for Bankruptcy Protection

ML CBO VII: S&P Puts Junk-Rated Class A Notes on Watch Negative
N2H2 INC: Balance Sheet Insolvency Widens to $1.9MM at Dec. 31
NATIONAL CENTURY: US Trustee Balks at Bricker's Engagement
NET2000 COMMS: Trustee Gets Court Okay to Hire BTB as Consultant
NEXT LEVEL COMMS: Appeals Nasdaq Panel's Delisting Determination

NEXTWAVE: It's Over & U.S. Supreme Court Says FCC Was Wrong
NEXTWAVE: Company Cheers in Response to Supreme Court Decision
NORTH STAR EXPLORATIONS: Voluntary Chapter 7 Case Summary
ORYX TECHNOLOGY: Capital Insufficient to Meet Cash Requirements
OWENS CORNING: Plan to Create FB Asbestos Property Damage Trust

PRECISION SPECIALTY: Will File Monthly Operating Reports Soon
PREMCOR INC: Caps Price of 12.5 Million-Share Public Offering
PREMCOR REFINING: S&P Affirms Lower-B Level Ratings
PRUDENTIAL STRUCTURED: Fitch Keeps Watch on Two BB- Note Classes
RIBAPHARM INC: Names Kim D. Lamon as New President and CEO

ROWECOM INC: Selling Worldwide Subscription Business to EBSCO
SEITEL INC: Noteholder Standstill Agreement Expires Today
SEVEN SEAS: Chapter 11 Trustee Hires Floyd Isgur as Counsel
SUN MEDIA: S&P Places Various Low-B Ratings on Watch Negative
TELSCAPE: Court Approves $8.6-Mil. Financing for Mexico Business

TESORO PETROLEUM: Holding Q4 Earnings Conference Call Tomorrow
TRANSTECHNOLOGY: Selling Norco Unit to Marathon Power for $52MM
UNITED AIRLINES: Court Okays McKinsey as Management Consultant
UNITED PAN-EUROPE: S&P Drops Credit Rating to D after Bankruptcy
US AIRWAYS: U.S. Trustee Amends Unsecured Creditors' Committee

U.S. WIRELESS: Secures Court Nod to Hire FTI as Fin'l Advisors
USG CORP: Reduces DIP Facility to $100 Million from $350 Million
USG CORP: Asks Court to OK Proposed Dispute Resolution Protocol
VALENTIS INC: Shareholders Okay Proposed Capital Restructuring
VOICEFLASH: Begins Liquidation Under Ch. 727 of Florida Statues

WADE COOK FINANCIAL: Voluntary Chapter 11 Case Summary
WESTPOINT STEVENS: NYSE Will Suspend Trading Effective Jan. 30
WHEELING-PITTSBURGH: Sets-Up Avoidance Suits Settlement Protocol
WORLDCOM: Committee Wins Nod to Hire Pearl Meyer as Consultant
WORLDPORT COMMS: WCI Extends Tender Offer for All Shares to Fri.

W. R. GRACE: Peninsula Investment Discloses 5.1% Equity Stake
ZAMBA SOLUTIONS: Dec. 31 Balance Sheet Upside-Down by $2.3 Mill.

* CBIZ Valuation Group Appoints Todd Poling as Regional Manager

* Large Companies with Insolvent Balance Sheets

                           *********

A NOVO BROADBAND: Further Delays Filing Annual Report
-----------------------------------------------------
A Novo Broadband, Inc., (OTCBB:ANVBE) reported that the filing
of its Annual Report on Form 10-KSB for the year ended
September 30, 2002 with the Securities and Exchange Commission
would be further delayed.

The Company previously announced that it intended to file the
Annual Report by January 14, 2003, the extended due date for the
filing of the report pursuant to SEC rules.

The further delay is necessitated because the Company's
independent public accountants have resigned due to the
Company's inability to pay their fees, and because management
has not had adequate resources to complete other aspects of the
Annual Report in light of the efforts being devoted to the
Company's efforts to reorganize its finances in its pending
Chapter 11 proceeding.

The Company is currently seeking another firm to serve as its
independent public accountants for the 2002 and 2003 fiscal
years, but is unable to predict when it will be in a position to
file the Annual Report.


ABRAXAS PETROLEUM: Closes Canadian Asset Sale for $138 Million
--------------------------------------------------------------
Abraxas Petroleum Corporation (AMEX:ABP) and its wholly owned
subsidiaries, Canadian Abraxas Petroleum Limited and Grey Wolf
Exploration Inc., announced the following transactions:

      --  The closing of the sale of the capital stock of
Canadian Abraxas and Grey Wolf to a Canadian royalty trust for
approximately $138 million. The sale of Canadian Abraxas and
Grey Wolf represents the sale of approximately 60 Bcfe of net
proved reserves and 4,500 Boepd of production at a purchase
price of approximately $2.30 per Mcfe and over $30,000 per
Boepd. Significant assets remain in Canada and will be operated
under a new wholly owned Canadian subsidiary, retaining the name
Grey Wolf Exploration Inc.

      --  The closing of a new senior secured credit facility
consisting of a term loan facility of $4.2 million and a
revolving credit facility of up to $50 million with an initial
borrowing base of $45.5 million, of which $42.5 million was used
to fund the exchange offer described below and $3.0 million of
which will be available to fund the continued development of our
existing crude oil and natural gas properties.

      --  The closing of Abraxas' exchange offer, pursuant to
which Abraxas will pay $264 in cash, and issue $610 principal
amount of new 11-1/2% Secured Notes due 2007, Series A, and
approximately 31.36 shares of Abraxas common stock for each
$1,000 in principal amount of the outstanding 11-1/2% Senior
Secured Notes due 2004, Series A, and 11-1/2% Senior Notes due
2004, Series D, issued by Abraxas and Canadian Abraxas, which
were tendered and accepted in the exchange offer. An aggregate
of approximately $180 million in principal amount of the notes
were tendered in the exchange offer and the remaining notes not
tendered were discharged.

      --  The repayment and discharge of Abraxas' 12-7/8% Senior
Secured Notes due 2003, principal amount of $63.5 million, out
of the proceeds of the transactions described above.

      --  The repayment of Grey Wolf's senior secured credit
facility with Mirant Canada Energy Capital Ltd. in the amount of
approximately $46.3 million.

These transactions reduced the Company's total proved reserves
(as of Dec. 31, 2001) by 36%, reduced our long-term debt (pro
forma as of Sept. 30, 2002) by 45% and reduced our cash interest
expense (pro forma as of Sept. 30, 2002) by 90%.

The notes and shares of Abraxas common stock issued in the
exchange offer have not been registered under the Securities Act
of 1933, as amended, and may not be offered or sold in the
United States without registration under the Securities Act or
pursuant to an exemption from registration.

CIBC World Markets and BMO Nesbitt Burns acted as co-lead
financial advisors to the Company in connection with the sale of
Canadian assets.

Jefferies & Company Inc., acted as dealer manager of the
exchange offer and Mellon Investor Services LLC acted as
information agent for the exchange offer.

Abraxas Petroleum Corporation is a San Antonio-based crude oil
and natural gas exploitation and production company that also
processes natural gas. The Company operates in Texas, Wyoming
and western Canada.

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

Abraxas Petroleum Corp.'s 12.875% bonds due 2003 (ABP03USR1) are
trading at about 45 cents-on-the-dollar, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ABP03USR1for
real-time bond pricing.


ALASKA COMMS: Will Publish Fourth Quarter Results on March 6
------------------------------------------------------------
Alaska Communications Systems Group, Inc., (Nasdaq:ALSK) the
leading integrated communications provider in Alaska, will
release financial results for the quarter ended December 31,
2002 immediately following the close of market on Thursday,
March 6, 2003. The Company will host a conference call and live
webcast at 5:00 p.m. Eastern Time to discuss the results.

ACS will also offer a live webcast of the conference call,
accessible from the "Investor Relations" section of the
Company's Web site -- http://www.alsk.com  The webcast will be
archived for a period of 45 days. A telephonic replay of the
conference call will also be available 2 hours after the call
and will run until Saturday, March 8, 2003 at 7:00 p.m. ET. To
hear the replay, parties in the United States and Canada should
call 800/405-2236 and enter pass code 522486. International
parties should call 303/590-3000 and enter pass code 522486.

ACS is the leading integrated communications provider in Alaska,
offering local telephone service, wireless, long distance, data,
and Internet services to business and residential customers
throughout Alaska. ACS currently serves approximately 330,000
access lines, 80,000 cellular customers, 67,000 long distance
customers and 47,000 Internet customers throughout the State.
More information can be found on the Company's Web site at
http://www.alsk.com

As reported in Troubled Company Reporter's January 20, 2003
edition, Standard & Poor's lowered its corporate credit ratings
on diversified communications company Alaska Communications
Systems Group Inc., and subsidiary Alaska Communications Systems
Holdings Inc., to 'BB-' from 'BB'.

The downgrade is based on competitive pressure that has
materially weakened ACS's business profile, impaired operating
performance, and resulted in credit measures that have not met
Standard & Poor's expectations for the ratings.

The ratings were removed from CreditWatch, where they were
placed on July 31, 2002. The outlook is negative. Anchorage,
Alaska-based ACS had $606 million debt as of Sept. 30, 2002.

Standard & Poor's also said that without stabilization of the
local exchange business, the ratings could be lowered further.


ALLETE INC: December 31 Working Capital Deficit Tops $80 Million
----------------------------------------------------------------
ALLETE, Inc., (NYSE:ALE) reported 2002 earnings of $1.68 per
share, compared with earnings of $1.81 in 2001. Excluding one-
time events, earnings were $1.80 per share in 2002 and $1.87 in
2001. Net income was $137.2 million in 2002 on revenue of $1.507
billion, compared with $138.7 million net income on revenue of
$1.526 billion in 2001.

At December 31, 2002, the Company's balance sheet shows that
total current liabilities exceeded total current assets by about
$80 million.

"We navigated through a challenging year while accomplishing
several important goals," said Dave Gartzke, ALLETE's chairman,
president and CEO. "We simplified our company by exiting non-
strategic businesses. This strengthened our balance sheet and
allowed us to focus on our two core businesses. We continued our
efforts to communicate this new focus to investors."

One-time events in 2002 include final exit charges related to
the automotive transport and Electric Odyssey retail businesses,
as well as a charge related to the indefinite delay of an
electric generation project in Superior, Wis. In 2001, ALLETE
recognized a portion of the exit charge from the automotive
transport business.

Automotive Services grew net income by 24% in 2002 despite
relatively flat auction vehicle sales. At ADESA, growth was due
to mandated goodwill accounting changes, lower interest expense
and increased auction efficiency. Automotive Finance Corporation
financed 42,000 more vehicles - an increase of 5%.

At Energy Services, total kilowatt-hour sales were up 11% for
the year in part due to sales from nonregulated generation that
began in 2002. Low wholesale prices, however, resulted in net
income declining by 8%, excluding the Superior generation
project.

Investments and Corporate Charges declined by $19.5 million from
2001, mainly due to the liquidation of the company's securities
portfolio during the year and the largest real estate sale in
the company's history which improved earnings in 2001.

Net income from Discontinued Operations increased by $9.8
million in 2002, largely from the suspension of depreciation
expense at the company's Water Services businesses. The pending
sale of Florida Water Services for $492.5 million is expected to
close in mid-February.

"The proceeds from the sale will give us the ability to reduce
debt, which will further strengthen our balance sheet and keep
us financially well-positioned," Gartzke said. "Our two core
businesses remain strong and are poised for earnings growth in
their respective markets as economic conditions improve."

Gartzke expects earnings at Automotive Services to grow by about
15% in 2003. Earnings at Energy Services are expected to
decrease from 2002 levels. "If wholesale power prices improve,
so too will our profitability at Energy Services," he added.

ALLETE's corporate headquarters are located in Duluth,
Minnesota. ALLETE's holdings include ADESA, the second largest
wholesale vehicle auction network in North America; AFC, the
leading provider of independent auto dealer financing; Minnesota
Power, a low-cost electric utility that serves some of the
largest industrial customers in the United States; and
significant real estate holdings in Florida. For more
information about ALLETE, visit the company's Web site at
http://www.allete.com


ALTERRA HEALTHCARE: Gets $68-Mil. Commitment from Senior Housing
----------------------------------------------------------------
Senior Housing Properties Trust (NYSE: SNH), agreed to provide
$67.9 million to Alterra Healthcare Corporation to facilitate a
bankruptcy plan of reorganization by Alterra.

SNH's commitment is to a sale-leaseback transaction and a first
mortgage financing on the following terms:

   Sale Leaseback:

      -- Amount: $61 million.

      -- Properties: 18 properties in 10 states with 894 living
         units.

      -- Term: to December 31, 2017, plus renewal options for up
         to 30 years.

      -- Rent: $7,015,000/year (i.e., 11.5% of the Purchase
         Price), plus percentage rent beginning in 2004.

   Mortgage Financing:

      -- Amount: $6.9 million.

      -- Collateral: first mortgage on 6 properties in two states
         with 202 living units.

      -- Maturity: June 30, 2004.

      -- Interest: $552,000/year (i.e., 8%).

      -- Principal Payments: at Maturity or as collateral
         properties are sold.

All of the Alterra properties involved in this transaction are
assisted living facilities built between 1996 and 1999. As of
December, these properties have a combined occupancy of 87% (91%
for the lease properties and 66% for the mortgage properties),
and 100% of all rent and service charges are paid by residents
from private resources. Alterra's obligations under the lease
and mortgage will be subject to cross default and cross
collateralization. On a combined basis the financial results of
the properties' operations, before subordinated expenses,
covered the pro forma rent and interest by approximately 1.5x
during the calendar year of 2002 (1.5x at the lease properties
and 1.4x at the mortgage properties).

On Wednesday, January 22, 2003, Alterra filed for reorganization
under Chapter 11 of the Bankruptcy Code. The Closing of the
transactions announced today is expected to occur in late
February or early March 2003, before Alterra's plan of
reorganization is finally approved. However, SNH's commitment to
close is subject to approval of this transaction by the Alterra
Bankruptcy Court, including a ruling that the rent and mortgage
payments due to SNH will be accorded priority status under the
Bankruptcy Code.

Senior Housing Properties Trust is a real estate investment
trust headquartered in Newton, MA which owns 119 senior living
properties, including independent living apartments, assisted
living facilities, nursing homes and hospitals, located in 29
states which are leased to various health care and senior living
operating companies.


AMERICAN AIRLINES: Fitch Assign CCC+ Rating to Sr. Unsec. Debt
--------------------------------------------------------------
Fitch Ratings initiated coverage of American Airlines, Inc., a
subsidiary of AMR Corp., and has assigned a rating of 'CCC+' to
the company's senior unsecured debt. The Rating Outlook for
American is Negative.

The 'CCC+' rating reflects deepening concerns over American's
ability to respond to the continuing industry revenue crisis by
quickly overhauling its labor costs and renegotiating union
contracts. American management has made it clear that the
current cost structure is unsustainable in light of the weak
revenue environment and the changing competitive structure of
the airline industry. This conclusion is reinforced by the
magnitude of the losses seen in the fourth quarter and the
dismal outlook for 2003.

The industry revenue environment, characterized by persistent
weakness in business travel demand and poor passenger yields,
led American to report a discouraging 2% increase in revenue per
available seat mile in the fourth quarter on a 6% reduction in
passenger yields. This performance fell short of the RASM
performance of the other U.S. major carriers in the fourth
quarter and reflected the vulnerability of American's network to
low-fare competition in the domestic market and weak
macroeconomic conditions in Latin America and the Caribbean,
where the airline has a leading market share position. In the
domestic market, overlap with low-cost carriers such as
Southwest, JetBlue and AirTran has now risen to approximately
82% of the U.S. routes that American serves. This does not
reflect the route overlap with a potentially "new" United
Airlines, against which American would be at a significant cost
disadvantage following United's restructuring of labor and
aircraft ownership costs under Chapter 11 bankruptcy protection.
In light of the structural weaknesses of the American network,
the outlook for meaningful improvement in unit revenue during
2003 appears poor.

Following a reported net loss of $529 million in the fourth
quarter, American has indicated that losses of a similar
magnitude are likely in the seasonally weak first quarter of
2003. Additional revenue risk tied to demand shocks following a
potential war with Iraq presents American with further
complications in building a recovery plan that reduces the large
operating cash flow shortfalls that will result if far-reaching
changes in unit labor costs are not forthcoming. Above and
beyond the risks associated with a fall-off in traffic
(particularly on international routes) following a new Gulf War,
American is vulnerable to further jet fuel price spikes.
American is currently 40% hedged against fuel price swings in
the first quarter and 32% hedged for the remainder of the year
(both periods hedged at an average crude oil price of $23 per
barrel). This hedging position compares somewhat unfavorably to
the other non-bankrupt major carriers (Continental, Northwest,
Delta and Southwest), which have a larger portion of their jet
fuel exposure hedged.

On the cost side, American management has repeatedly stated its
intention to pull approximately $4 billion in pre-2001 expenses
out of the system by 2004. Clearly this implies a substantial
contribution in the form of wage, benefit and work rule
concessions as part of an effort to bring American's unit labor
costs closer to the new competitive standard being set by US
Airways and United as a result of cost restructuring undertaken
in the Chapter 11 reorganization process. With the wage and
benefits expense line now representing almost 50% of American's
total operating revenues, it is no surprise that deep cuts in
wages and benefits will become the top priority of the airline's
management as it seeks to avoid a significant decline in
liquidity by mid-year. Management has noted that weekly meetings
with unions are leading to a full and frank exchange of
financial information; however, there have been few public signs
of progress in recent weeks to suggest that the necessary labor
cost restructuring effort is moving ahead. In light of the
achieved and prospective concessions seen at US Airways and
United, Fitch believes that unit labor cost reduction in the
range of 20 to 25 percent will be essential if American is to
remain on track to meet its broader cost reduction targets while
lowering the cost premium over its restructured major airline
competitors.

Non-labor cost saving initiatives announced by the company in
the months after September 11 appear to be gaining some
traction, as seen in the 5% year-over-year decline in cost per
available seat mile (holding fuel prices constant) in the fourth
quarter. Improved asset utilization associated with the "de-
peaking" of American's Chicago-O'Hare and Dallas-Fort Worth
hubs, along with lower distribution costs, are contributing to
unit cost reduction. However, as American senior management has
been quick to point out, the most straightforward sources of
savings have already been identified. Despite savings achieved
through capacity adjustments and headcount reduction since late
2001, the critical drivers of labor costs (pay rates, benefits
and work rules) have not been addressed.

The damage done to American's operating profile as a result of
weak pricing and high costs has been compounded by a rapid
deterioration of its balance sheet over the past two years. As
part of an effort to shore up liquidity in anticipation of a
revenue rebound, American has tapped the debt markets on several
occasions since September 2001. In 2002 alone, the airline
issued almost $3 billion in new debt--including a $675 million
enhanced equipment trust certificate offering in December. In
all, balance sheet debt at the AMR Corp., consolidated level
rose from approximately $6.3 billion at year-end 2000 (prior to
the TWA acquisition) to $12.5 billion at 9/30/02. On top of off-
balance sheet aircraft and facilities leases, this leaves the
airline with a lease-adjusted debt load of approximately $26.5
billion at 9/30/02, as compared with $16.7 billion at the end of
2000. With higher interest expense (up by about $100 million in
2003), substantial fixed lease obligations, and rising pension
funding requirements, the increased liquidity associated with
recent capital market transactions comes at a high price in the
context of reduced capacity and substantially lower cash
generation potential.

Following the most recent EETC transaction, American's total
unencumbered asset base has been reduced to approximately $2.9
billion, of which only about $700 million represents Section
1110-eligible aircraft. Given the weakness of the aircraft
securitization markets, this means that American's further
access to the capital markets is in question. Indeed, even if
another deal can be completed, the amount of debt issued may be
rather low in comparison with recent transactions. The obvious
conclusion is that American's capacity for establishing more
liquidity buffers is very limited and the company will have to
rely very heavily on cash flow from operations to meet liquidity
needs in 2003. With maturities of about $800 million in 2003,
$471 million in 2004 and $1.3 billion in 2005, refinancing risk
is very high.

American faces a fixed charge coverage covenant test related to
its $834 million secured revolving credit facility on June 30.
At this time, it appears likely that the company will fail that
test, leading to an event of default on the facility and the
potential acceleration of repayment on the bank facility.
Considering the weakness of the used aircraft market and the
reluctance of American's banks to repossess pledged aircraft
collateral in a default scenario, we believe that the
negotiation of a waiver related to the covenant test is
probable.

Most of American's near-term mainline aircraft purchase
commitments have been pushed back to 2006 and beyond as a result
of a delivery deferral agreement with Boeing. However, 11
aircraft (9 B767-300s and 2 B777-200s) must be taken this year.
In light of its capacity reduction and the easy availability of
parked aircraft, American has made it clear that it has no
desire to take these 2003 deliveries. Boeing has agreed to
provide backstop financing, presumably in the form of operating
leases with Boeing Capital as the lessor. American Eagle,
American's regional feeder, is on track to take a steady stream
of Embraer and Bombardier regional jets over the next few years.
Regional jets continue to offer the best economics of any
aircraft in the American/American Eagle route network.

Like the other majors, American faces a large and growing
underfunded pension liability that forced it to book a $1.1
billion charge to shareholders' equity on the year-end 2002
balance sheet. Fitch believes that the underfunded pension
obligation is in excess of $3 billion on a projected benefit
obligation basis. While American's required cash contribution to
its pension plans in 2003 is estimated to be only $200 million
(versus booked pension expense of approximately $700 million on
the income statement), the size of the funding gap suggests that
annual cash contributions well above $200 million will be
required in 2004 and beyond. In addition to pension expense,
American has identified employee and retiree medical expenses as
a major source of rising costs in 2003. Management estimates
that employee medical costs could rise by as much as 15% this
year, while retiree costs (influenced more closely by
prescription drug price trends) will grow by as much as 25%.
These benefit trends represent significant risk items that may
undo some of the potential savings associated with labor
contract restructuring later this year.

One event-driven opportunity for American would appear if one or
both of the bankrupt majors were to liquidate as a result of
failure to reorganize successfully under Chapter 11. In the
event of a United Chapter 7 filing, American would clearly see a
large market share shift at Chicago-O'Hare, where it overlaps
significantly with United. Revenue gains tied to a US Airways
liquidation would be less dramatic, but under any such scenario
a reduction in overall industry ASM capacity would certainly
lead to a better unit revenue outlook for 2003.

This rating was initiated by Fitch as a service to users of its
ratings and is based on public information.

American Airlines' 10.430% bonds due 2008 are presently trading
at about 60 cents-on-the-dollar.


AMERICAN COMMERCIAL: JPMorgan Delivers Cross-Default Notice
-----------------------------------------------------------
As previously announced, American Commercial Lines LLC elected
to utilize the 30-day grace period with respect to the $7.7
million interest payment on its 11-1/4 percent senior notes and
the $0.3 million interest payment on its 10-1/4 percent senior
notes, both of which interest payments were scheduled for
December 31, 2002.  Subsequently, ACL received letters from
JPMorgan Chase Bank, the agent under its senior credit facility,
and Bank One, N.A., the provider of its receivables facility,
noticing a cross-default related to ACL's failure to pay
interest on its notes and reserving their respective rights
under the credit agreement and receivables facility. ACL is
actively engaged in discussions with its lenders regarding a
possible restructuring.

In late December, the Company submitted a financial
restructuring plan to its senior lenders.  Richard Weingarten &
Company, Inc. and Huron Consulting Group are assisting the
Company in evaluating its financial restructuring alternatives.
Also, Danielson Holding Corporation (Amex: DHC), ACL's parent,
has formed a special committee of its board of directors to
consider ACL's financial restructuring. The DHC special
committee has retained Credit Suisse First Boston as its
financial advisor and  Pillsbury Winthrop LLP as special legal
counsel.

Danielson Holding Corporation traces its history back to Mission
Insurance Group, Inc., and that insurer's predecessor.  SZ
Investments LLC, the Commissioner of Insurance of the State of
California, and Martin J. Whitman are significant shareholders.
Mr. Whitman and Samuel Zell have seats on Danielson's Board.
DHC is a holding company with two major subsidiaries:

      * National American Insurance Company of California, and
        its subsidiaries; consisting principally of insurance
        operations in the western United States, and primarily in
        California; and

      * American Commercial Lines Holdings LLC, the parent
        company of ACL, following a May 29, 2002, acquisition and
        recapitalization of the company.

American Commercial Lines LLC is an integrated marine
transportation and service company. ACL provides barge
transportation and ancillary services throughout the inland
United States and Gulf Intracoastal Waterway Systems, which
include the Mississippi, Ohio and Illinois Rivers and their
tributaries and the Intracoastal canals that parallel the Gulf
Coast.  In addition, ACL is the leading provider of barge
transportation services of the Orinoco River in Venezuela and
the Parana/Paraguay River System serving Argentina, Brazil,
Paraguay, Uruguay and Bolivia.


AMERICAN TOWER: Asks Lenders for Consent to Convertible Buy-Back
----------------------------------------------------------------
American Tower Corporation (NYSE:AMT) agreed to sell units
consisting of (1) 12.25% senior subordinated discount notes due
2008 of American Tower Escrow Corporation, a newly formed wholly
owned, direct subsidiary of the Company; and (2) warrants to
purchase 11.4 million shares of Class A common stock of American
Tower Corporation at $0.01 per share through an institutional
private placement for aggregate gross proceeds of approximately
$420 million.

No cash interest will accrue on the notes. Instead, the accreted
value of each note will increase between the date of original
issuance and the maturity date at a rate of 12.25% per annum
calculated on a semi-annual bond equivalent basis. The warrants
represent 5.5% of the Company's outstanding common stock
(assuming exercise of all warrants issued in this offering) and
are not exercisable for three years from the closing date of the
offering. The closing of the offering is expected later this
month.

Subject to receipt of the consents referred to below, the
Company intends to use the net proceeds of this offering in the
following manner: to refinance a portion of term loans
outstanding under its credit facilities and to replace a portion
of the revolving loan capacity thereunder; to fund repurchases
of its outstanding 2.25% convertible notes, whether as a result
of holders of the 2.25% convertible notes exercising their put
right on October 22, 2003 or the Company repurchasing such notes
at its discretion before that date; and for general corporate
purposes.

At closing, the net offering proceeds will be held in escrow for
Escrow Corp., pending receipt of certain consents of the lenders
under the Company's credit facilities. Upon receiving consents
of the lenders under the Company's credit facilities, the funds
will be released to, and the notes will become the obligation
of, American Towers, Inc., a wholly owned, direct operating
subsidiary of the Company, and will be subordinated to the
senior secured credit facilities and structurally senior to all
existing and future indebtedness of the parent American Tower
Corporation. If such consents are not received within 60 days
after the closing, the notes will be repaid and the warrants
will expire.

The Company is seeking an amendment to the Company's credit
facility which would give the necessary consents including
permitting the Company to use up to $217 million, consisting of
cash on hand and a portion of the net offering proceeds, to
repurchase its 2.25% convertible notes. Pursuant to this
proposed amendment, the Company expects that it would repay no
less than $200 million of the term loans outstanding under its
credit facilities and replace no less than $200 million of
availability under its revolving credit facility, resulting in
aggregate reduction in credit facility capacity of no less than
$420 million. The actual amount of the permanent reduction in
the lenders' credit facility commitments and the other terms of
the amendment will depend on negotiations with the lenders. The
Company can provide no assurances as to whether it will be able
to obtain the consent of its lenders and the terms of any such
amendment.

The units have not been registered under the Securities Act of
1933, as amended, or any state securities laws, and are being
offered only to qualified institutional buyers in reliance on
Rule 144A under the Securities Act. Unless so registered, the
notes may not be offered or sold in the United States except
pursuant to an exemption from registration requirements of the
Securities Act and applicable state securities laws.

As previously reported, Standard & Poor's placed its single-'B'-
plus corporate credit ratings on American Tower Corp., and Crown
Castle International Corp., and its single-'B' corporate credit
rating on SBA Communications Corp., on CreditWatch with negative
implications.


AMERIGAS PARTNERS: Look for 1st Fiscal Quarter Results Tomorrow
---------------------------------------------------------------
On Wednesday, January 29, 2003, AmeriGas Partners, L.P., will
report earnings for the first fiscal quarter ended December 31,
2002. Lon R. Greenberg, Chairman, will host a live
teleconference on the Internet at
http://www.shareholder.com/ugi/medialist.cfmto discuss the
Partnership's earnings and current activities. The webcast of
the teleconference will begin at 4:00 PM eastern time. The
webcast will be archived through February 28, 2003.

In addition, a telephonic replay of the teleconference will be
available at 6:00 PM eastern time on January 29, 2003 through
midnight eastern time on February 2, 2003 and can be accessed by
dialing 1-888-203-1112, Passcode 150311. International replay
access is 1-719-457-0820, Passcode 150311.

                          *     *     *

As reported in Troubled Company Reporter's November 28, 2002
edition, AmeriGas Partners, L.P.'s $88 million senior notes due
May 2011, issued jointly and severally with its special purpose
financing subsidiary AP Eagle Finance Corp., are rated 'BB+' by
Fitch Ratings.

The Rating Outlook is Stable.

AmeriGas' rating reflects the subordination of its debt
obligations to $569.5 million secured debt of the OLP including
the OLPs $559.4 million privately placed 'BBB' rated first
mortgage notes. In addition, Fitch's assessment incorporates the
underlying strength of AmeriGas' retail propane distribution
network.


AMI SEMICONDUCTOR: S&P Ratchets Bank Loan Rating Up a Notch
-----------------------------------------------------------
Standard & Poor's Ratings Services raised its senior secured
bank loan rating to 'BB' from 'BB-' for AMI Semiconductor Inc.,
following the closing of the company's $200 million senior
subordinated notes issue. Part of the notes proceeds will be
used to repay $112 million of AMI's bank term loan, leaving $48
million outstanding. At the same time, The 'BB-' corporate
credit and the 'B' subordinated debt ratings were affirmed.

Pocatello, Idaho-based AMI supplies customized semiconductor
chips, called application-specific integrated circuits, for
industrial, communications, military, and other applications. It
has about $250 million of debt outstanding.

AMI's senior secured credit facility is rated one notch above
AMI's corporate credit rating, reflecting a strong likelihood of
full recovery of principal in the event of default or
bankruptcy. A default scenario for AMI would likely follow a
material drop in sales volumes, as pricing is contractually set.

The bank loan package is contractually senior to all other debt
issues and includes $48 million in secured term loans and a $75
million secured revolving line of credit. It is secured by a
first-priority security interest in all domestic assets of the
company and a first-priority pledge of the capital stock of AMI
and all material domestic affiliates, as well as 65% of the
capital stock of foreign affiliates. The facility has
upstream and downstream guarantees from all material affiliates.

Standard & Poor's reviewed the company's likely enterprise value
in a distress scenario, as the security consists of assets that
are likely to remain a going concern, as AMI is a sole-source
provider of semiconductor chips under long-term contractual
arrangements with a diverse group of customers. Standard &
Poor's believes the company's enterprise value in default or
bankruptcy would cover the entire bank loan.


ANCHOR GLASS CONTAINER: S&P Assigns B+ Corporate Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to glass container producer Anchor Glass Container
Corp. The outlook is stable.

Standard & Poor's said that at the same time it assigned its
'B+' rating to the company's proposed $300 million senior
secured notes due 2013.

With annual revenues of about $720 million, Tampa, Fla.-based
Anchor is the third-largest producer of glass containers for
beer, beverages and foods in the U.S. Pro forma debt outstanding
will be about $367 million.

"The ratings on Anchor reflect a weak business profile,
aggressive debt leverage, and improved financial flexibility
following the issuance of its proposed secured notes" said
Standard & Poor's credit analyst Liley Mehta. Standard & Poor's
noted that Anchor's leading position in the glass container
segment, well-established customer relationships, and relatively
recession-resistant end markets limit downside ratings risk.
Conversely, its narrow product scope, high customer
concentration and aggressive debt leverage restrain upside
ratings potential.


ARCH COAL INC: S&P Rates $150 Million of Conv. Preferreds at B+
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' preferred
stock rating to Arch Coal Inc.'s $150 million of perpetual
cumulative convertible preferred stock.

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

St. Louis, Mo.-based Arch Coal had approximately $747 million of
debt outstanding at Dec. 31, 2002.

The company plans to pay down its revolving credit facility with
a portion of the proceeds from the preferred issuance. The
remainder will be used for working capital and general corporate
purposes.

"The ratings on Arch Coal Inc. reflect the company's diversified
base of reserves in each of the major coal producing regions in
the U.S., its high percentage of low-sulfur and compliance coal
deposits, and high costs of production in the eastern U.S.",
said Standard & Poor's credit analyst Dominick D'Ascoli.

Arch Coal is the second-largest coal producer in North America,
accounting for approximately 10% of United States production.


ASIA GLOBAL CROSSING: Wants to File Part of Sale Pact Under Seal
----------------------------------------------------------------
Richard F. Casher, Esq., at Kasowitz Benson Torres & Friedman
LLP, in New York, relates that in connection with the Sale
Agreement, Asia Global Crossing Ltd., and its debtor-affiliates
are required to provide Asia Netcom with certain information
concerning their non-Debtor subsidiaries, including sensitive
information regarding customer and supplier relationships and
employee compensation that otherwise would not be publicly
available.  The Subsidiary Information is set forth in the
"Disclosure Schedule" annexed to the Sale Agreement.  Because of
the commercially sensitive nature of the Subsidiary Information,
the AGX Debtors have determined that the Subsidiary Information
should only be made available to parties that qualify to
participate in the Auction as a "Qualified Bidder" and execute
an appropriate confidentiality agreement.

Thus, the Debtors ask the Court to direct the Clerk of Court to
file under seal specified portions of the Disclosure Schedule
that set forth the Subsidiary Information.

The specific sections of the Disclosure Schedule that contain
the Subsidiary Information and that the Debtors are seeking to
file under seal and the nature of the information set forth in
these sections are:

   Section 3.08(8)        Lists customer and supplier information
                          in connection with the Debtors' core
                          network business, including pricing
                          information.

   Section 3.11(b)        Non-Debtor intercompany operational and
                          business information.

   Sections 3.16(a)&(b)   Lists customer contracts; including
                          those with non-Debtor subsidiaries.  On
                          a limited basis, the status of certain
                          contracts is disclosed.  Contracts
                          listed in Section 3.16(a) to which one
                          or more of the Debtors is a party are
                          listed in the Schedules of Assets and
                          Liabilities filed with the Court by
                          each of the Debtors on December 12,
                          2002.

   Section 3.18(b)(ii)    Non-Debtor intercompany operational and
                          business information.

   Section 3.19(a)        Lists customer and other information
                          about the Debtors' core network
                          business.

   Section 3.19(d)        Sensitive network operational
                          information.

   Sections 3.20 & 3.21   Lists customer and supplier information
                          in connection with the Debtors' core
                          network business, including pricing
                          information.

   Sections 3.23(c)& 3.24 Information regarding compensation of
                          employees of the Debtors and non-Debtor
                          subsidiaries that would not otherwise
                          be publicly available.  To the extent
                          that any of the information included in
                          Sections 3.23(c) and 3.24 is required
                          to be made public, whether in
                          connection with each of the Debtors'
                          Statements of Financial Affairs filed
                          with the Court on December 12, 2002,
                          the filing of the Debtors' voluntary
                          petitions or as required by a publicly
                          traded company under federal securities
                          laws, this information has been made
                          public.

   Section 5.01           Sensitive operational and business
                          information of Debtors and non-Debtor
                          entities, including planned
                          negotiations.
(Global Crossing Bankruptcy News, Issue No. 32; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

Asia Global Crossing's 13.375% bonds due 2010 (AGCX10USR1) are
trading at about 12 cents-on-the-dollar, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AGCX10USR1
for real-time bond pricing.


ATA HOLDINGS: Names Charles T. Cleaver Vice Pres. & Treasurer
-------------------------------------------------------------
ATA Holdings Corp., parent company of ATA (American Trans Air,
Inc.)(Nasdaq:ATAH), the nation's 10th largest passenger airline,
named Charles T. Cleaver Vice President and Treasurer.

"Charley brings over 25 years of aviation experience that will
prove invaluable to the Company as we confront the many
challenges still facing this impetuous and turbulent industry,"
said George Mikelsons, ATA Chairman and Chief Executive Officer.
"He is fully prepared to step into this leadership role, and I
am confident that he will continue to serve the Company well."

Cleaver's appointment as Vice President at ATA follows an
extensive and accomplished career in aviation, most recently as
Director of Aircraft Programs. He was instrumental in obtaining
financing for 27 Boeing 757 and 40 737-800 aircraft, and played
a key role in initiating ATA's fleet restructuring program which
resulted in significant cost savings for the Company.
Additionally, he negotiated 38 new and used aircraft
acquisitions, initiated interim and permanent financing for
ATA's $1.9 billion aircraft order, while overseeing the re-
fleeting of ATA's commuter subsidiary, ATA Connection (Chicago
Express Airlines, Inc.).

Before joining ATA in 1996, Cleaver served as Treasurer and
Sales Finance Director for International Aero Engines AG, a
five-nation commercial jet engine manufacturer. He also served
as Director-Sales Finance for Fairchild Aircraft, a regional
aircraft manufacturer.

A graduate of Vanderbilt University in Nashville, Tenn., he
completed his graduate studies earning a M.B.A. from the
University of Texas at Austin.

Cleaver has a son, Stewart, and a daughter, Grace.

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

                          *     *     *

As reported in Troubled Company Reporter's January 22, 2003
edition, Standard & Poor's affirmed its 'B-' corporate credit
ratings on ATA Holdings Corp., and subsidiary American Trans Air
Inc., and removed them from CreditWatch, where they were placed
September 13, 2001. However, Standard & Poor's lowered its
ratings on various enhanced equipment trust certificates. The
outlook is negative.

"The ratings were affirmed due to ATA's improved liquidity after
receipt of proceeds from a $168 million loan that was 90% backed
by a federal loan guarantee that closed in November 2002," said
Standard & Poor's credit analyst Betsy Snyder. Although the
company's liquidity has been enhanced, its fate will still
depend on the expected recovery in the airline industry.
Prolonged weakness in the industry would negatively affect ATA
and could result in a downgrade. "The downgrades of ATA's
enhanced equipment trust certificates reflect the substantial
deterioration in market values of the Boeing 757-200 aircraft
which form their collateral," Ms. Snyder noted. These planes,
while efficient and widely used, have been under pressure
following the shutdown of discount carrier National Airlines
(which operated solely B757's), US Airways Inc.'s bankruptcy
rejection and renegotiation of financings on its B757-200's, and
bankrupt United Air Lines Inc.'s attempts to reduce debt service
costs on many of its aircraft-backed obligations, including
those that finance B757-200's.

The ratings reflect ATA Holdings' substantial and growing debt
and lease burden and the price competitive nature of the markets
it serves.


AVCORP INDUSTRIES: Sept. 30 Working Capital Deficit Tops C$11MM
---------------------------------------------------------------
Avcorp Industries Inc., (AVP on the Toronto Stock Exchange)
announced results for the quarter and twelve months ended
September 30, 2002. The company has previously announced a
change of its year end to December 31; the results are presented
on an interim, unaudited basis and should be read in conjunction
with SEDAR filings.

For continuing operations, revenue for the period reduced 34%
compared to the prior year quarter and reduced 27% from the
prior 12-month period, due to the reduction in production rates
of new aircraft. A period loss of C$5.2 million and a 12-month
loss of C$6.1 million reflect the reduced revenue, continued
expenses associated with productivity improvements, and certain
one-time costs. The company is in breach of certain ratio
covenants with its bank and the bank has waived these breaches
up to January 30, 2003. The company's credit agreements with its
bank expire on January 30, 2003. The company is pursuing several
asset-based financing opportunities to finance ongoing
operations.

The Company's September 30, 2002 balance sheet shows that total
current liabilities eclipsed total current assets by about C$11
million.

Based on contracts at September 30, 2002, the company expects to
generate a total of C$487 million future sales, up from C$322
million at June 30, 2002. The increase results mainly from the
previously announced contract for the Cessna Citation CJ3
business jet.

The company does not expect further overall production rate
reductions from its customers and expects to generate additional
revenue as new contracts enter their production phase over the
coming months. There remains, however, significant uncertainty
due to the overall economy, geopolitical situation and airlines
operating under protection of bankruptcy laws. The company
continues to reduce costs and working capital in line with
revenue, and to invest in productivity and working capital
improvement initiatives.

Specifically, the company has:

      -- reduced the number of employees by 58 to 379 since
         September 30, 2002,

      -- optimized a number of key manufacturing processes and
         signed new long-term supply agreements for expected
         savings of C$2.7 million in 2003,

      -- signed new supply chain contracts that are expected to
         reduce inventory by C$2.5 million in 2003,

      -- secured new orders for metal processing work and expects
         further new orders throughout 2003, and

      -- continued to work with the International Association of
         Machinists and Aerospace Workers on signing a new labor
         contract to replace the current contract that expired on
         September 30, 2002.

Avcorp Industries Inc., is a Canadian aerospace industry
manufacturer. The company is a single-source supplier for
engineering design, manufacture and assembly of subassemblies
and complex major structures for aircraft manufacturers.


BASIS100: Appoints Robert J. Smith as New Chief Fin'l Officer
-------------------------------------------------------------
Basis100 Inc. (TSX: BAS), a technology solutions provider for
the financial services industry, announced the appointment of
Robert J. Smith, Basis100's former USA President, to the role of
Chief Financial Officer, effective immediately. Interim CFO,
Mr. James Pavlonnis, of Jacksonville, FL., will resume his
duties as Vice President of Finance for USA operations.

"I am very pleased that Bob Smith has accepted the role of Chief
Financial Officer in Basis100 Inc." states Mr. Joseph Murin,
CEO, Basis100 Inc. "Not only for the first time in the company's
history will we have a CFO that completely understands the
intricacies of the mortgage industry, but his strong financial
background and Wall Street Capital Markets experience will be a
huge asset for Basis100 as we look to expand our capital markets
reach and shareholder base into the USA."

Mr. Smith joined Basis100 in April of 2002, assuming the role as
President of Basis100 Corp. (USA) and successfully managed the
restructuring of Basis100's USA operations. This included
technology transfer to Toronto and moving the operations/support
center from Irvine, CA to Jacksonville, FL. In addition, Mr.
Smith managed the deployment of our new Quantum AVM (automated
valuation model) technology and the retooling of the AVM
delivery infrastructure from Microsoft Windows NT to Sun
Unix/Java, giving Basis100 the scale it needs to meet the
growing demand for AVMs.

Along with a complete understanding of Basis100s business and
his background with Cendant Mortgage Corporation (2001-2002) and
Merrill Lynch Credit Corporation (1992-2001) in the capital
markets, Mr. Smith is a Certified Public Accountant in Florida.
He was in public practice from 1984-1992, as a Senior Manager,
Audit Services for Deloitte & Touche.

Basis100 Inc., with a working capital deficit of about $9
million at September 30, 2002, is a technology solutions
provider for the financial services industry, which enables
businesses to build, distribute, buy and sell products and
services in more efficient and innovative ways. Basis100's lines
of business include: Lending Solutions for consumer credit,
mortgage origination and processing; Data Warehousing and
Analytics Solutions for automated property valuations, property
data-warehousing, data products and analytics support; and
Capital Markets Solutions for fixed income trading. For more
information about Basis100, please visit http://www.Basis100.com


BELL CANADA INT'L: Fourth Quarter Net Loss Reaches $71 Million
--------------------------------------------------------------
As a result of the adoption on July 17, 2002 of the Plan of
Arrangement, and the completion of the sale of Bell Canada
International Inc.'s interest in Telecom Americas Ltd., on
July 24, 2002, BCI's consolidated statements of earnings and
cash flows for the fourth quarter of 2002 reflect only the
activities of BCI as a holding company. Axtel S.A de C.V., and
Canbras Communications Corp., are recorded under Investments on
the balance sheet at the lower of carrying value and estimated
net realizable value and their operating results are not
reflected on BCI's consolidated statements of earnings.

                     Fourth Quarter Results

BCI's balance sheet as at December 31, 2002, includes cash and
temporary investments of $149.1 million, down $4.4 million from
September 30, 2002. The reduction is mainly due to the payment
of administrative expenses during the quarter. Current assets
also include a $268.5 million note receivable, being the
equivalent of US$170 million, which represents the remaining
proceeds to be received on March 1, 2003 from the payment of the
balance due under the America Movil S.A. de C.V. note.  The
carrying value of the America Movil Note declined by $1 million
in the quarter reflecting a decline in the US dollar exchange
rate. On July 25, 2002, BCI purchased a foreign currency option
to protect against adverse currency fluctuations related to the
US dollar denominated America Movil Note. The FX Option will
ensure that the proceeds from the America Movil Note in Canadian
dollars will not be less than $264 million.

BCI's interests in Axtel and Canbras are recorded on the balance
sheet at $25 million, reflecting a write-down in the quarter of
$71.6 million. The write-down is based on management's best
estimates of net realizable value taking into account prevailing
market conditions.

Total liabilities include BCI's 11% senior unsecured notes due
September 2004 in the amount of $160 million and accrued
liabilities of $23.3 million.

The net loss for the fourth quarter was $71.1 million, or $1.78
per share, reflecting the write-down of investments,
administrative expenses, accrued interest expenses and
unrealized foreign exchange losses on the America Movil Note and
on cash and temporary investments held in US dollars, partially
offset by the reduction of accrued liabilities for future costs
related to discontinued operations.

Cash outlays from January 1, 2003 to December 31, 2003 are
estimated at approximately $40 million, including accounts
payable, accrued liabilities, net interest and administrative
expenses. The foregoing estimate excludes any amounts that may
be required to settle contingent liabilities such as law suits,
the Vesper guarantees and the Comcel voice over IP claim.

                Update on Assets Held for Disposition

BCI is actively seeking to dispose of its remaining assets,
Canbras and Axtel. The following is a summary of the fourth
quarter financial and operational results of both companies.

      -- Canbras' revenues reached $13.1 million in the quarter,
down $1.9 million or 13% compared to the fourth quarter of 2001.
This decrease is mainly as result of a devaluation of 45% in the
Brazilian real compared to the Canadian dollar, partially offset
by cable and internet access subscriber growth and price
increases. EBITDA was $4 million, up from $0.5 million in the
fourth quarter of 2001, primarily due to a reduction in
operating expenses driven by the devaluation in the Brazilian
real and a reduction in programming costs as a result of
favourable price negotiations with programmers, partially offset
by lower revenues. For the full year, revenues reached $62
million, an increase of $6 million, or 11%, relative to 2001.
This growth was achieved despite a devaluation in the Brazilian
real compared to the Canadian dollar of 20%. EBITDA in 2002 was
$12 million up from nil in 2001. Debt at the end of 2002 was $29
million. As existing cash and cash generated from operations are
not expected to be sufficient to meet current liabilities over
the next 12 months, Canbras is pursuing refinancing alternatives
as well as new sources of financing. There can be no assurance
that such refinancing alternatives or any new financing can be
arranged on acceptable terms or at all.

      -- Axtel's revenues were $99 million for the quarter, an
increase of $5 million over the fourth quarter of 2001 driven by
higher revenue per subscriber. EBITDA reached $31 million, up
$27 million over the same quarter last year due primarily to
reduced general, administrative and bad debt expenses. For the
full year, revenues reached $384 million compared to $326
million in 2001. EBITDA for 2002 was $98 million compared to $6
million in 2001. Debt at the end of 2002 was $838 million. Axtel
is pursuing refinancing alternatives as well as new sources of
financing. For example, Axtel is currently in discussions with
its major supplier with respect to the terms of its supply and
financing contracts. There can be no assurance that such
refinancing or any new financing can be arranged on acceptable
terms or at all.

                     Plan of Arrangement Update

      -- On December 2, 2002, the Ontario Superior Court of
Justice approved a Claims Identification Process for BCI. The
Claims Identification Process establishes a procedure by which
all claims against BCI will be identified within a specified
period. This period will begin following the Court's decision
with respect to the certification as a class action of the
lawsuit filed by Mr. Wilfred Shaw, a BCI shareholder, which
certification decision is expected in the second quarter of
2003. BCI intends to contest the certification of Mr. Shaw's
action.

      -- On the same day, the Court also ruled on certain
procedural steps with respect to the class action lawsuit filed
by certain former holders of BCI's 6.75% convertible unsecured
subordinated debentures. In accordance with an agreement reached
among the parties to this lawsuit, the Court has ordered that
the lawsuit be certified as a class action within the meaning of
applicable legislation. The certification order does not
constitute a decision on the merits of the class action, and BCI
continues to be of the view that the allegations contained in
the lawsuit are without merit and intends to vigorously defend
its position. As part of the agreement among the parties, the
plaintiffs in the class action have abandoned their claim for
punitive damages (the statement of claim originating the lawsuit
sought $30 million in punitive damages). The plaintiffs have
also agreed to the dismissal of the class action as against BMO
Nesbitt Burns, Inc., one of the original defendants in the
proceeding.

BCI is operating under a court supervised Plan of Arrangement,
pursuant to which BCI intends to monetize its assets in an
orderly fashion and resolve outstanding claims against it in an
expeditious manner with the ultimate objective of distributing
the net proceeds to its stakeholders and dissolving the company.
BCI is listed on the Toronto Stock Exchange under the symbol BI
and on the NASDAQ National Market under the symbol BCICF. Visit
the Company's Web site at http://www.bci.ca


BUDGET GROUP: Wants Nod for $20-Mill. Asset Sale Pact with Avis
---------------------------------------------------------------
Budget Group Inc., and its debtor-affiliates seek the Court's
authority to sell certain international assets free and clear of
all liens, claims, interests and encumbrances, pursuant to an
asset purchase agreement with Avis Europe PLC -- subject to
higher and better offers.

Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor LLP,
in Wilmington, Delaware, relates that Budget's Europe, Middle
East and Africa Operations are operated through a wholly owned
debtor subsidiary of BRAC Rent A Car Corporation -- BRAC Rent A
Car International, Inc., and its debtor and non-debtor
subsidiaries. BRACII's international headquarters is located in
Hemel Hempstead, England.  On January 7, 2003, BRACII filed a
petition for administration with the High Court of Justice,
Chancery Division, in London, England.

The largest component of the EMEA Operations is the Debtors'
European operations.  Within the Debtors' European operations,
there is significant interdependence between the major European
travel markets.  Although the Debtors' European franchisees
operate as independent units, they are joined together by the
Budget trademark and a substantially common operating agreement
that sets forth standards of operations signage and other terms
that give the appearance of one cohesive unit throughout Europe.
The ability to both exchange reservations among European
countries and regions to provide a consistent standard of
operation, regardless of location, are key to market share and
franchise support.  In the Debtors' judgment, maintenance of a
comprehensive European network is essential to the preservation
of franchise royalty and the consequent franchise royalty income
stream and ultimately the value of the EMEA Operations.

Due to a weak global travel economy, the diverse European
business operations and the costs associated with a shift by the
Debtors to a more integrated European business management model
in 2000 and 2001, the EMEA Operations were plagued with severe
liquidity problems and increased operating debt throughout 2001
and 2002.  Faced with economic problems of their own, BRACC and
the other Debtors were unable to immediately provide the
financial support required to alleviate the EMEA Operations'
worsening financial condition.  As a consequence, BRACII and its
subsidiaries, including Budget France, experienced severe
business disruption.

According to Mr. Brady, the Debtors and the Committee explored
both a stand alone reorganization of the EMEA Operations and a
going concern sale and ultimately concluded that a going concern
sale of the EMEA Operations would yield the maximum value for
the estates.  Mr. Brady informs the Court that the Debtors and
the Committee entered into negotiations with various parties-in-
interest for the sale of the EMEA Operations.  These
negotiations resulted in the execution of a Master Franchise
Agreement with BRACII and Verwaltung Dovenhof Leasing AG and NL
Nordleas AG for a sale of the EMEA Operations in Germany, which
was approved by the Court on December 23, 2002.

"While the Debtors and the Committee have been exploring
alternatives to maximize the value of the EMEA Operations
remaining after the German Sale, Budget France and the remaining
EMEA Operations have required cash infusions to meet their
minimum obligations," Mr. Brady relates.  Accordingly, the Court
approved a $1,000,000 equity infusion to Budget France and, on
an interim basis, a $1,200,000 equity infusion to BRACII and its
subsidiaries.

After marketing the EMEA Operations to potential buyers and
equity investors, the Debtors identified Avis Europe as the
buyer willing to pay the highest price for the remaining EMEA
Operations.  Soon after the closing of the North American Sale,
the Debtors and the Committee intensified their negotiations
with Avis Europe over the sale of the Purchased Assets.  On
January 9, 2003, the Debtors and the Committee agreed to the
Term Sheet in anticipation for:

   A. the sale of BRACC's rights under the Trademark License
      Agreement between Budget Rent A Car System, Inc. --
      formerly known as Cherokee Acquisition Corporation -- and
      BRACC for the "Budget" trademark;

   B. a transfer by the Debtors of those third party franchisee
      or licensee agreements to which the Debtors are a party in
      the European, Middle Eastern and African markets and
      certain other agreements relating to BRACII's operations in
      Austria and Switzerland;

   C. the sale of incidental tangible property, books and
      records, permits and other assets of the Debtors;

   D. the option to purchase the share capital of Societe
      Financiere et de Participation and Financiere Milton II,
      both wholly owned subsidiaries of BRACII, for no additional
      consideration in a manner provided in the Purchase
      Agreement; and

   E. the sale of certain assets of Budget France.

Pursuant to the Term Sheet and as contemplated in the Purchase
Agreement, Avis Europe will acquire the Purchased Assets in
exchange for $20,000,000, plus amounts forgiven under the DIP
financing provided by Avis Europe -- EMEA Financing Facility,
plus the assumption of certain liabilities including BRACII's
liabilities relating to its employees as of the closing of the
Sale.

The salient terms of the Term Sheet are:

   A. Consideration:  Avis Europe will acquire the Purchased
      Assets for $20,000,000 in cash plus and minus certain
      obligations forgiven under the EMEA Financing Facility
      provided by Avis Europe and the assumption of Assumed
      Liabilities;

   B. Purchased Assets:

      -- the right, title and interest as the Debtors may have
         under the Trademark License Agreement and those third
         party franchise or license agreements to which the
         Debtors are a party in the EMEA markets, and certain
         other agreements relating to BRACII's operations in
         Austria and Switzerland;

      -- incidental tangible property, books and records and
         other assets to be described in the Purchase Agreement;

      -- certain assets of Budget France; and

      -- the option to purchase the share capital of SFP and
         FMII for no additional consideration to Avis Europe
         and in a manner to be set forth in the Purchase
         Agreement;

   C. Assumed Liabilities:  Avis Europe will assume certain
      specified liabilities of the Debtors, including those
      liabilities expressly contained in any Assumed Contracts
      arising after the closing date of the Sale, certain
      liabilities of Budget France, and certain Employee
      Liabilities relating to specified employees of BRACII;

   D. Excluded Liabilities:  Avis Europe will not assume or be
      obligated for those liabilities not expressly included
      within the definition of Assumed Liabilities and Employee
      Liabilities, including postpetition liabilities,
      administrative expense liabilities or intercompany
      liabilities;

   E. Conditions to Closing:

      -- the acquisition by BRACII of the Licensee Confirmation
         Letters;

      -- compliance with various foreign competition laws;

      -- closing the French Purchase Agreement simultaneously
         with the closing of the Sale;

      -- Cendant, the Debtors and Avis Europe entering into a
         Support Services Agreement;

      -- entering into various transition services agreements
         specified in the Term Sheet; and

      -- entry of the Sale Order and order approving the EMEA
         Financing Facility.

      Additionally, both the Debtors and Avis Europe's
      obligations under the Purchase Agreement are conditioned on
      compliance with all covenants, representations and
      warranties contained in the Term Sheet; and

   F. Termination:  The Purchase Agreement may be terminated at
      any time prior to the Closing Date by Avis Europe if:

      -- there is an acceptance by the Debtors of a Competing
         Proposal, or

      -- the Debtors fail to materially satisfy the conditions in
         the Term Sheet.

      Avis Europe is permitted to terminate the Purchase
      Agreement for a variety of reasons, including, the Debtors'
      breach of representations, warranties and covenants and
      failure of the Debtors to achieve certain milestones,
      including approval of the French Purchase Agreement,
      obtaining entry of the Sale Procedures Order by January 15,
      2003, and failure to close the Purchase Agreement by
      February 18, 2003 -- unless extended by Avis Europe.

Mr. Brady asserts that ample business justification exists to
sell the Purchased Assets to Avis Europe or to the Successful
Bidder.  Avis Europe's proposal to acquire the EMEA Operations
yields far greater value to the Debtors' estates than any other
proposal submitted to date.  However, Avis Europe is not
prepared to proceed unless it can acquire the Purchased Assets
in the manner contemplated by the Purchase Agreement.  Thus, the
Debtors' ability to capture the highest value solution for the
EMEA Operations is contingent on embracing the procedures
required by Avis Europe.  Moreover, because the Debtors'
businesses are inextricably tied to the highly competitive
leisure and business airline travel markets, Mr. Brady is
concerned that there is a significant risk of losing customers
by operating their businesses in Chapter 11 and foreign
insolvency proceedings for an extended period of time.  Fearing
a disruption in services provided by the Debtors or a potential
liquidation of the current EMEA Operations, customers could take
their business to competing companies that are not in
bankruptcy.  The sale is justified because it is necessary to
avoid deterioration in the value of Purchased Assets.

Furthermore, Mr. Brady insists that the sale of the assets
pursuant to the Purchase Agreement is in exchange for fair and
reasonable value.  The $20,000,000 cash purchase price, the
forgiveness of the EMEA Financing Facility and the assumption of
the Assumed Liabilities and Employee Liabilities provides
significant value for the Purchased Assets and the Debtors'
estates.  The Debtors believe that it is unlikely that any other
potential purchasers exist for all the EMEA Operations because
of the economic conditions of the Debtors' EMEA operations.
(Budget Group Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


CALPINE: Caps Price of Secondary Offering in Power Income Fund
--------------------------------------------------------------
Calpine Corporation (NYSE: CPN), a leading North American power
producer, and Calpine Power Income Fund (Toronto: CF.UN) entered
into a firm underwriting agreement to sell 17,034,234 Warranted
Units of the Calpine Power Income Fund at a price of Cdn $9.00.
The Warranted Units were sold to a syndicate of underwriters led
by Scotia Capital Inc., and CIBC World Markets Inc.  The
transaction is expected to close on or about February 13, 2003.

The Warranted Units consist of one Trust Unit owned by Calpine
combined with one-half of one Trust Unit Purchase Warrant issued
by the Fund to purchase additional Trust Units of the Fund
acquired from Calpine.  One full Trust Unit Purchase Warrant
will enable the holder to further acquire one Trust Unit of the
Fund on or before December 30, 2003 at the price of C$9.00.  The
Trust Unit Purchase Warrants will trade separately from the
Trust Units.

An amended and restated preliminary prospectus relating to these
securities has been filed with securities commissions or similar
authorities in certain provinces and territories of Canada but
has not yet become final for the purpose of a distribution to
the public.

The securities offered have not been registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or
sold in the United States absent registration or an applicable
exemption from the registration requirements.  This news release
shall not constitute an offer to sell or a solicitation of an
offer to buy these securities in any state of the United States
or province or territory of Canada.

Calpine Power Income Fund is an unincorporated open-ended trust
that invests in electrical power generation assets.  The Fund
indirectly owns interests in two power generating facilities in
British Columbia and Alberta and has a loan interest in a third
power generating facility in Ontario.  The Fund is managed by
Calpine Canada Power Ltd., which is headquartered in Calgary,
Alberta.  The Trust Units of the Calpine Power Income Fund are
listed on the Toronto Stock Exchange under the symbol CF.UN, and
the Trust Units have the second-highest Canadian stability
rating of 'SR-2' with a stable outlook from Standard & Poor's.
For more information about the Fund, please visit its Web site
at http://www.calpinepif.com

Based in San Jose, Calif., Calpine Corporation is an independent
power company that is dedicated to providing wholesale and
industrial customers with clean, efficient, natural gas-fired
and geothermal power generation.  It generates power through
plants it owns, operates, leases and develops in 23 states in
the United States, three provinces in Canada and in the United
Kingdom.  Calpine also owns approximately 1.0 trillion cubic
feet equivalent of proved natural gas reserves in Canada and the
United States.  The company was founded in 1984 and is publicly
traded on the New York Stock Exchange under the symbol CPN.  For
more information about Calpine, visit its Web site at
http://www.calpine.com

As reported in Troubled Company Reporter's December 11, 2002
edition, Calpine Corp.'s senior unsecured debt rating was
downgraded to 'B+' from 'BB' by Fitch Ratings. In addition,
CPN's outstanding convertible trust preferred securities and
High TIDES were lowered to 'B-' from 'B'. The Rating Outlook was
Stable. Approximately $9.3 billion of securities were affected.

Calpine Corp.'s 10.500% bonds due 2006 (CPN06USR2) are trading
at about 53 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CPN06USR2for
real-time bond pricing.


CANNONDALE CORP: Files for Voluntary Chapter 11 Reorganization
--------------------------------------------------------------
Cannondale Corporation (Nasdaq: BIKE) intends to file a
voluntary petition for reorganization under Chapter 11 of the
U.S. Bankruptcy Code today.

Cannondale and its lenders, The CIT/Business Credit, Inc., and
Pegasus Partners II, L.P., have reached an agreement in
principle that, subject to Bankruptcy Court approval, will
provide the Company with interim financing to fund post-petition
operating expenses and to meet supplier and employee
commitments. "The interim financing will be used to continue the
operation of our bicycle business," said Cannondale Founder and
President Joe Montgomery.

Cannondale has also reached an agreement in principle with
Pegasus Partners II, L.P., to sell substantially all of its
assets to Pegasus Partners II, L.P., pursuant to Section 363 of
the Bankruptcy Code, subject to better and higher offers and
court approval. Pegasus would operate the bicycle business as a
going concern with the involvement of current management and
would purchase separately the Company's motorsports assets,
including the intellectual property related to the design of
Cannondale's motorsports products. In the meantime, management
continues to work with other potential interested buyers for
either or both of these businesses.

Because the Company has obtained interim post-petition
financing, Cannondale will be able to pay vendors for goods and
services received after the filing in the ordinary course of
business.

Montgomery explained that difficulties with Cannondale's
motorsports business made the filing necessary, and that the
Company has determined to suspend operations of the motorsports
division pending a potential sale. "The motorsports division was
threatening the bicycle division," explained Montgomery.
"Although we believe in the value of our motorsports products,
we did not have sufficient financial resources to make the
additional investments necessary. We look forward to bringing a
renewed focus to our core bicycle business and to working
through this present challenge with the greatest possible
speed."

The suspension of operations of the motorsports division will
mean that production workers who had been furloughed from
Cannondale's motorsports factory in Bedford, Pennsylvania in
December will not be recalled. Production workers at
Cannondale's Bedford bicycle factory, who have been idled during
a recent shutdown, are scheduled to return to work in the near
future.

The Company's foreign subsidiaries are not included in the
filing. Business done through Cannondale subsidiaries in Europe,
Japan and Australia accounted for approximately 42% of the
Company's total sales in fiscal 2002.


CASCADES: S&P Rates $325M Proposed Senior Unsecured Notes at BB
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' rating to
Cascades Inc.'s proposed senior unsecured US$325 million note
issue, and withdrew the rating on a proposed US$450 million
issue rated on Jan. 9, 2003. In addition, the 'BB+' long-term
corporate credit rating and 'BBB-' senior secured debt rating on
the company were affirmed. The outlook is stable.

At the same time, the ratings on subsidiary Cascades Boxboard
Group Inc., were removed from CreditWatch with positive
implications, where they were placed on Jan. 9, 2003. The
outlook is stable.

"These ratings actions stem from Cascades' termination of its
offer to exchange part of the US$450 million notes for Cascades
Boxboard's 8.375% senior notes outstanding," said Standard &
Poor's credit analyst Clement Ma. "The rating on the new notes
is now one notch lower than the corporate credit rating, which
reflects the structural subordination of the senior unsecured
notes to the indebtedness and liabilities of Cascades Boxboard,
as well as to the secured creditors of the company."

The affirmation on the corporate credit rating on Kingsey Falls,
Que.-based Cascades reflects its good product diversity in
paper, packaging, and tissue; its leading market positions in
several geographic and product markets; and its relatively
stable earnings and cash flow generation through the industry
cycle. These strengths are offset by the company's use of debt
to support an aggressive growth strategy.

Cascades is 38% owned by the Lemaire family, who are actively
involved in the management of the company. The stable ownership
and management of Cascades, under the guidance of the Lemaires,
is reflected in the company's longstanding growth strategy and
steady rates of returns.

Cascades' stable earnings and free cash generation, due to its
strong product diversity and exposure to less-cyclical commodity
markets, should enable it to pursue a disciplined acquisition
strategy without substantially affecting credit measures.


CMS ENERGY: Suspends Dividend Payment to Bolster Financial Plan
---------------------------------------------------------------
CMS Energy (NYSE: CMS) is suspending its dividend to bolster its
ongoing financial improvement plan, updating its earnings
guidance for 2002, and providing earnings guidance for 2003.

The Board of Directors decided to suspend the common stock
dividend. CMS Energy expects the dividend suspension will boost
liquidity by more than $100 million in 2003.

Commenting on the dividend change, Ken Whipple, CMS Energy's
chairman and chief executive officer, said: "While not easy, we
believe that the Board's decision to suspend the dividend is the
most appropriate at this time. By conserving cash, our liquidity
is strengthened, and we are in a better position to meet the
challenges facing our company and our industry. We will keep our
focus on aggressive cost management and on actions to improve
our balance sheet and further strengthen our financial
flexibility. Our Board of Directors recognizes the importance of
a dividend to a company like ours, and the Board intends to
reinstate it as soon as it is financially prudent to do so."

The Company updated its 2002 guidance, announcing reported
earnings per share in accordance with Generally Accepted
Accounting Principles are expected to be a loss in the range of
$4.25 to $4.75. The increased loss from prior guidance largely
reflects additional non-cash writedowns associated with CMS
Field Services and certain independent power projects. The
Company expects ongoing earnings per share will be in the $1.50
to $1.55 range, unchanged, including CMS Panhandle Companies
operating earnings. Management believes that ongoing earnings
provide a key measure of the Company's current operating
financial performance, unaffected by losses or gains caused by
asset impairments and sales, one-time expenses, and other
accounting items that are not reasonably likely to recur.

The Company also said that for 2003 it projects reported
earnings per share will be roughly break even, dependent largely
on the timing and proceeds from planned asset sales. The Company
expects ongoing earnings will be in the range of 80 cents to 90
cents per share.

Key factors negatively affecting the 2003 versus 2002 ongoing
earnings outlook include the loss of income resulting from the
sale of the CMS Panhandle Companies and other assets, higher
interest and depreciation costs at CMS Energy's principal
subsidiary, Consumers Energy, and lower electric sales at
Consumers associated with Michigan's electric restructuring law.

The principal variances between the projected reported and
ongoing earnings for 2002 and 2003 are set forth in the attached
schedule.

Whipple noted the Company's financial improvement plan has
reached significant milestones. "We are continuing to take the
steps necessary to strengthen our balance sheet, preserve our
liquidity, and increase our financial flexibility, which is
paramount in today's economy," he said. "The Company continues
to focus on liquidity, with the goal of maintaining a
consolidated cash balance of approximately $400 million, split
about equally between CMS Energy and Consumers Energy. Executing
our plan also eliminates the need for CMS Energy to access the
capital markets in 2003."

Financial plan milestones include:

      * Selling or signing definitive agreements in 2002 for
        asset sales totaling $3.6 billion, including debt assumed
        by the purchasers. That total includes the $1.828 billion
        CMS Panhandle Companies sale, which is targeted to close
        in the first quarter of 2003, subject to regulatory
        approvals.

      * Reducing debt by $800 million in 2002, including paying
        down $260 million in bank debt.

      * Cutting capital expenditures in 2003 by $350 million, or
        39 percent, from 2002. This follows a $540 million
        reduction in 2002 from 2001 levels.

The Company's aggressive asset sales program continues. It is in
the process of selling:

      * The Centennial and Guardian pipelines

      * CMS Field Services

      * The wholesale electric "book" of CMS Marketing, Services
        and Trading

      * International distribution companies and selected power
        plants.

CMS Energy is an integrated energy company, which has as its
primary business operations an electric and natural gas utility,
natural gas pipeline systems and independent power generation.
For more information on CMS Energy, please visit its Web site
at: http://www.cmsenergy.com

As previously reported, ratings for CMS Energy by Fitch are:
Senior unsecured debt 'B+'; Preferred stock/trust preferred
securities 'CCC+'. Outlook is negative.


COMDISCO: Opts to Redeem $50 Million of 11% Notes
-------------------------------------------------
Comdisco Holding Company, Inc., (OTC:CDCO) will make an optional
partial redemption of $50 million principal amount of its 11%
Subordinated Secured Notes due 2005. The outstanding principal
amount of the Subordinated Secured Notes prior to this
redemption is $285 million. Comdisco previously redeemed $65
million, $200 million, and $100 million principal amounts of the
11% Subordinated Secured Notes on November 14, 2002,
December 23, 2002, and January 9, 2003, respectively.

The $50 million of Subordinated Secured Notes will be redeemed
at a price equal to 100% of their principal amount plus accrued
and unpaid interest to the redemption date. The partial
redemption will occur on February 10, 2003.

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

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


COMMUNICATION DYNAMICS: Continues Using Lenders' Cash Collateral
----------------------------------------------------------------
Communication Dynamics, Inc., the parent company of TVC
Communications, received Bankruptcy Court approval to continue
using cash collateral and to purchase inventory in the amount of
$60 million through May 30, 2003.

"The Court's four-month extension of our use of cash collateral
is the longest extension we have been granted since we filed,"
said Robert W. Ackerman, CDI's president and chief executive
officer. "This illustrates that our Company has been operating
successfully and is well positioned to continue doing so as we
work toward emergence from Chapter 11."

The Company also reported that it has been operating in excess
of $2 million ahead of budget since announcing its
reorganization in September 2002. Additionally, many vendors
have extended open credit terms to TVC and customers continue
placing substantial orders.

"Because of our supportive vendors, customers and employees our
business has stabilized, and we can now begin to turn our
efforts toward completing our restructuring," said Ackerman. "In
fact, we recently submitted a term sheet for a plan of
reorganization to our major creditors and are looking forward to
working with them to take the plan-formulation process to the
next level."

Communication Dynamics, Inc., is the parent company of TVC
Communications. TVC provides the products and services that have
helped build the communications infrastructure in the United
States, Canada, South America and Europe.

Founded in 1952, TVC is backed by close working relationships
with top manufacturers and a deep understanding of the
technology behind the products it sells. TVC has proven itself
to be a valued partner to both the broadband cable and
telecommunications industries.


CONE MILLS: S&P Places Junk L-T Corp. Rating on Watch Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'CCC+' long-term
corporate credit and senior secured debt ratings on textiles
manufacturer Cone Mills Corp., on CreditWatch with negative
implications.

Greensboro, North Carolina-based Cone Mills had about $155.2
million in debt outstanding at September 29, 2002.

The CreditWatch placement reflects Cone Mills' plan to initiate
an offer exchanging an equal principal amount of its new notes
for any and all of its $100 million notes due March 15, 2005.
The bondholders will be asked to extend maturities and make
other modifications to their agreements.

"Although the proposed terms were not publicly disclosed,
Standard & Poor's expects that Cone Mills may not be able to
meet all of its obligations as originally promised under the
note issue and fund its Mexican expansion strategy at the same
time," said Standard & Poor's credit analyst Susan Ding.

The proposal to exchange notes was contemplated as part of Cone
Mills' overall plan to recapitalize its balance sheet, and it
gives current common stock holders the right to purchase up to
$27 million of convertible notes, which will bear interest at
12% per year and be convertible into common stock at $1 per
share.

Standard & Poor's will monitor the situation for additional
information and details to evaluate the financial impact on the
company and its debt holders.

Cone Mills is a leading manufacturer and marketer of denim
fabrics and is the largest commission printer of home furnishing
fabrics in North America.


CONSECO: Finance Debtor Wants Nod to Preserve Pooling Agreements
----------------------------------------------------------------
Conseco Finance Corp., and U.S. Bank, N.A., as Trustee for the
Securitization Trusts, jointly seek the Court's authority to
preserve the servicing platform that supports approximately
$24,000,000,000 in manufactured housing contracts served by the
Trustee in securitization trusts.  The CFC Debtors have a 55%
market share with an operation three times as large as the
nearest competitor.  CFC has informed the Trustee that it can no
longer incur the large losses that result from acting as
Servicer and would be compelled to reject the Servicing
Agreements.  This would cause disruption and irreparable damage
to the value of individual trusts.

CFC, formerly Green Tree Financial Corp., is a financial
services holding company that originates, securitizes and
services manufactured housing, home equity, home improvement,
retail credit and floor plan extension loans throughout the
United States.  The CFC Debtors collectively manage receivables
of $43,000,000,000, as of December 31, 2001.  The CFC Debtors
sold Housing loan contracts it originated to trusts created
under pooling and servicing agreements.  The trusts purchased
the loan contracts using proceeds from sales of certificates.
These are pass through securities backed by assets in the
Trusts.  Payment of principal and interest constitute the
primary source of payment for Certificate holders.

The CFC Debtors receive a monthly servicing fee of 1/12th of the
product of 0.50% of the Pool's Scheduled Principal Balance.  The
Fee is payable at the same time as payments are made on the
Certificates.  The Servicing Fee is very low in priority and is
only paid from remaining funds after all other payments have
been made.  If the cash flow, after all other payments have been
made, is insufficient to pay the entire Servicing Fee, the
Servicer receives only what is left over or nothing.  Amounts
not paid do not accrue for future payment.  The CFC Debtors
calculate that they are currently receiving only 12 basis points
on average. Assuming a servicing cost of 125 basis points, the
CFC Debtors lose approximately $271,000,000 per year.

The CFC Debtors have advanced nearly $100,000,000 to cover costs
of repossessing, marketing and selling repossessed manufactured
homes.  Each month payments are late on as much as 35% of the
total portfolio Contracts or $8,500,000,000.

Unless the Servicing Fee and its priority are enhanced, the CFC
Debtors will seek to reject the Servicing Agreements.  This will
make it impossible for the Trustee to adequately replace CFC as
the Servicer because, with the Fee fixed at a money-losing 50
basis points, no other party will likely assume this role.  Even
if a servicer signs up for the huge potential losses, there
simply are few entities that have the experience and
infrastructure to service the loans on the required scale.
Throw in the difficulties in transferring millions of records,
cash management systems, notification to debtors, computer
issues and loss of employees, and it becomes increasingly
doubtful that a replacement would be found.

To address CFC's financial problems and the problems that the
rejection of the Servicing Agreements would cause to the
Securitization Trusts, CFC desires to enter into negotiations
with the Trustee to provide adequate compensation to the
Servicer and effective continuity of servicing for the Trusts.

To enable CFC, the Certificate Holders and the Trustee to
discuss a compromise and settlement with respect to the
servicing issues, CFC and the Trustee have reached an interim
agreement for an enhanced Servicing Fee and for a lien to
adequately protect the Trustee and the Securitization Trusts for
any increase in the Servicing Fee and for the continued handling
of cash proceeds of the Trusts.  Under the interim agreement,
the monthly servicing fee payable to the Servicer in each
Securitization Trust will be increased to a monthly fee of 1/12
of 125 basis points per annum. A lien will be granted to protect
the Trustee and the Securitization Trusts.  Wells Fargo, as
Trustee for other MH Trusts, may opt-in to the interim agreement
and any final resolution.

The CFC and the Trustee will attempt to negotiate a long-term
solution to the servicing issues. (Conseco Bankruptcy News,
Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900)


DOCTORS COMMUNITY: Health Care REIT Believes It's Oversecured
-------------------------------------------------------------
Health Care REIT, Inc., (NYSE:HCN) provided commentary on the
potential impact of the recent bankruptcy filing by Doctors
Community Health Care Corporation and five subsidiaries. On
November 20, 2002, Doctors filed for Chapter 11 bankruptcy
protection. Doctors has stated that the bankruptcy filing was
due to the bankruptcy of National Century Financial Enterprises
and affiliates, which resulted in NCFE halting payments to
health care providers, including Doctors.

HCN has provided mortgage financing to Doctors in the form of a
loan secured by Pacifica Hospital of the Valley in Sun Valley,
CA, a property that is owned by one of the debtor subsidiaries.
The outstanding principal balance of the loan is approximately
$18.8 million. The mortgage carries a non-default interest rate
of 12.83% with quarterly interest payments of $603,000 and
matured on January 1, 2003. The loan was originally made in
December, 1996 for a total of $21.5 million. The quarterly
interest payment due on December 31, 2002 was paid through a
draw on Doctors' letter of credit. Pacifica had payment coverage
in excess of 2.0x for the quarter ended September 30, 2002.

Yesterday, HCN received a report on the valuation of the
Pacifica property by an independent appraiser with expertise in
acute care hospitals. Based upon the appraisal and historical
performance of Pacifica, HCN expects to receive payment in full
of the outstanding principal and accrued interest, which HCN
believes it is entitled to as an oversecured creditor. HCN does
not currently intend to recognize any interest on the loan if
payment is not received. If no interest is recognized or
received in 2003, HCN would expect funds from operations to
decrease by $0.06 per share for the year. Accordingly, HCN would
anticipate 2003 FFO to be between $2.78 and $2.83 per share.

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. More information
is available on the Internet at http://www.hcreit.com


DOMAN INDUSTRIES: Court-Appointed Monitor Files December Report
---------------------------------------------------------------
Doman Industries Limited announced that KPMG Inc., the Monitor
appointed by the Supreme Court of British Columbia under the
Companies Creditors Arrangement Act filed with the Court its
report for the period ended December 31, 2002.  The report -- a
copy of which may be obtained by accessing the Company's Web
site at http://www.domans.comor the Monitor's Web site at
http://www.kpmg.ca/doman-- contains selected unaudited
financial information prepared by the Company for the period.


DYNAMOTIVE ENERGY: Begins Restructuring of European Operations
--------------------------------------------------------------
DynaMotive Energy Systems Corporation (OTCBB:DYMTF) released an
update of the restructuring of operations in Europe and its
intention to divest from Border Biofuels Limited. The decision
to divest has been ratified by DynaMotive's Board in December
2002 and is part of a consolidation program that the Company
announced in May 2002.

DynaMotive Europe Ltd., has relocated its European Headquarters
in London to Rotch Limited as part of its strategic alliance
agreement. The Company is currently finalizing settlement on the
release of its European Headquarters. The Company has also
reduced staff, with Mr. Antony Robson and consultant, Mr. Gaby
Dadoun now responsible for European operations.  Mr. Robson
continues in his role as Managing Director Europe. Through these
changes, the Company has achieved cost reductions in excess of
US$350,000 for the year 2003.

In regard to BBL, the decision to divest follows changes in
market conditions in the UK and the restructuring of operations
in Europe. DynaMotive and Rotch Ltd., continue to cooperate in
the restructuring of DynaMotive's operations in the UK. As part
of this program, Rotch has been granted an exclusive first
negotiation right to acquire DynaMotive's controlling interests
in BBL. DynaMotive will in such event still provide technology
and BioOil for the development of BBL projects on commercial
terms, without any adverse impact on the licensing and royalty
potential for DynaMotive.

With regard to the previously announced commercial demonstration
of the technology, the Company has evaluated the cost of
demonstrating in the UK compared with achieving the same
objectives in Canada. By shifting the program to Canada,
financing requirements could be reduced by as much as
US$4,000,000 over a foreseeable future.

In addition to the reduction in costs and investment
requirements, the divestiture and restructuring of operations
will allow for a further simplification of reporting and of the
groups' compliance costs.

Commenting on the restructuring developments in regard to the
European Operations, Mr. Kingston President & CEO of DynaMotive
said, "Our objective for 2003 is to enhance shareholder value
and to meet our goal of reaching a cash flow positive position
by year end, thus limiting dilution to our shareholder base.
DynaMotive's management is fully focused in the achievement of
this goal. The restructuring of our operations in Europe is just
one of the various initiatives that the Company has taken to
enhance DynaMotive's position."

DynaMotive is an energy systems company that is focused on the
development of innovative energy solutions based on its patented
pyrolysis system. Through the application of pyrolysis, the
Company has shown how to unlock the natural energy found in the
world's abundant organic resources that have been traditionally
discarded by the agricultural and forest industries in a
wasteful and costly manner, and to economically convert them
into a renewable and environmentally friendly fuel. Proven
applications include forestry residues such as wood and bark,
and agricultural residues such as sugar cane bagasse and corn
stover. The Company has successfully demonstrated conversion of
each of these residues into fuel known as BioOil, as well as
valuable char, making these residues a renewable and
environmentally friendly energy reserve.

                            *    *    *

In its most recent SEC Form 10-K filing, the Company reported:

"In May 2001, the Company announced its intention to divest its
metal cleaning subsidiary, DynaPower, Inc., to focus all of its
resources on its BioOil production technology. This divestiture
was completed April 11, 2002.

"These financial statements have been prepared on the going
concern basis, which presumes the Company will be able to
realize its assets and discharge its liabilities in the normal
course of operations for the foreseeable future.

"As at December 31, 2001, the Company has a working capital
deficiency of $2,069,212, has incurred a net loss of $6,838,264
for the year-ended December 31, 2001, and has an accumulated
deficit of $25,773,048.

The ability of the Company to continue as a going concern is
uncertain and is dependent on achieving profitable operations,
commercializing its BioTherm(TM) technology and continuing
development of new technologies, the outcome of which cannot be
predicted at this time. Accordingly, the Company will require,
for the foreseeable future, ongoing capital infusions in order
to continue its operations, fund its research and development
activities, and ensure orderly realization of its assets at
their carrying value. The consolidated financial statements do
not reflect adjustments in carrying values and classifications
of assets and liabilities that would be necessary should the
Company not be able to continue in the normal course of
operations.

"The Company is not expected to be profitable during the ensuing
twelve months and therefore must rely on securing additional
funds from government sources and by the issuance of shares of
the Company for cash consideration. The Company has received
commitments from the Canadian and UK governments and subsequent
to the year-end, the Company has received a subscription
agreement for up to $1.6 million in equity financing."


EL PASO CORP: Unit Sells CE Generation to TransAlta for $240MM
--------------------------------------------------------------
El Paso Merchant Energy, a business unit of El Paso Corporation
(NYSE: EP), sold its 50-percent interest in CE Generation L.L.C.
to TransAlta USA Inc., a wholly owned subsidiary of TransAlta
Corporation (NYSE: TAC; Toronto: TA) for $240 million, including
the rights to a 50-percent interest in a geothermal development
project.  Should TransAlta decide to participate in building the
geothermal development project, it will compensate El Paso an
additional $30 million.  MidAmerican Energy Holdings Company
will continue to own the other 50-percent interest in both CE
Generation L.L.C. and the associated development project.

CE Generation L.L.C., holds 820 megawatts of operating capacity
(756 MW net), including 330 MW of geothermal generation in
California and 490 MW of gas-fired cogeneration in New York,
Texas, and Arizona.  CE Generation L.L.C. is financed with
approximately $1 billion of project debt.

The transaction is part of El Paso's continuing asset
divestiture program. It is expected to close by the end of
January.

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

El Paso Corp.'s 7.125% bonds due 2009 (EP09USN1), DebtTraders
reports, are trading at about 70 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=EP09USN1for
real-time bond pricing.


ENCOMPASS SERVICES: BofA Balks at Houlihan Lokey's Fee Structure
----------------------------------------------------------------
Bank of America, as agent to the Lenders, objects to:

     (a) Houlihan Lokey's compensation structure and the proposed
         payment terms;

     (b) the proposed indemnification terms for services
         performed with Encompass Services Corporation and its
         debtor-affiliates' bankruptcy cases; and

     (c) Houlihan Lokey's request that Bank of America consent to
         the payment of its fees and expenses free and clear of
         Bank of America's liens.

R. Michael Farquhar, Esq., at Winstead Sechrest & Minick PC, in
Dallas, Texas, asserts that the payment of a $1,000,000 flat
Transaction Fee without regard to the result achieved from the
sale risks the very real possibility of unreasonable and
excessive compensation and is therefore improperly structured.
Mr. Farquhar notes that the Debtors' current proposed
compensation scheme provides motivation for Houlihan Lokey to
sell the Cleaning Services Group as quickly as possible without
any regard for the consideration received by the estate, which
is unethical to the basic bankruptcy policy.  Mr. Farquhar
reminds the Court that the Debtors' Cleaning Systems Group is
one of their most valuable assets and, therefore, it is
essential that the sale transaction yields significant proceeds.

Mr. Farquhar contends that Houlihan Lokey's compensation terms
should be restructured.  The firm should be compensated in a
manner that is directly tied to the proceeds generated from the
transaction.  "Tying Houlihan Lokey's compensation to the amount
of the sale proceeds ensures that the Cleaning Systems Group
will sell for the maximum amount possible," Mr. Farquhar points
out. Bank of America proposes that the firm receive a 3% cut of
the gross sale proceeds resulting from the transaction.

Bank of America also refutes the indemnity provisions Houlihan
Lokey has demanded, which is unreasonably broad in light of the
firm's vast expertise and experience in assisting troubled
companies and the generous compensation Houlihan Lokey requests
for its services.  "Houlihan Lokey is attempting to reap great
benefits from the transaction, while refusing to accept the
potential burdens that go hand-in-hand with performing the
services," Mr. Farquhar notes.

The request asking Bank of America to consent to the payment of
Houlihan's fees and expenses free and clear of liens is also
unreasonable and unfounded, Mr. Farquhar says.  Bank of America
will not consent to this request.  "Houlihan Lokey is not
entitled to a claim that is senior to the claim of Bank of
America.  Their fees and expenses should be treated as
administrative costs of the Debtors' estates," Mr. Farquhar
tells Judge Greendyke.

           Creditors' Committee Doesn't Like it Either

The Official Committee of Unsecured Creditors also wants the
Court to deny Houlihan's M&A Transaction Fee.  The Committee
believes that the $1,000,000 Fee, plus a 5% fee of the
consideration exceeding $35,000,000, is excessive and should not
be paid.  The Committee also objects to the indemnity provision
under the firm's employment agreement.  The Committee asserts
that the unlimited amount and unlimited claims clause in the
indemnity agreement against Houlihan is overbroad and
unjustified. (Encompass Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


ENRON CORP: Court Approves FTI's Engagement as Financial Advisor
----------------------------------------------------------------
Enron Corporation and its debtor-affiliates obtained the Court's
authority to employ FTI Consulting Inc., pursuant to Section
327(a) of the Bankruptcy Code, nunc pro tunc to August 31, 2002,
to serve as its financial advisors and continue to provide the
BRS Services previously provided to the Debtors by PwC.

The scope, terms and conditions of FTI's proposed retention and
employment are identical to those set forth in the Original PwC
Application and approved in the PwC Retention Order.

The Debtors will pay FTI the customary hourly BRS Practice rates
that were in place at the time of the Closing, subject to
periodic adjustments and to reimburse FTI according to its
customary reimbursement policies.  FTI's regular hourly rates
are:

            Partners                          $525 - 595
            Managers/Directors                 370 - 525
            Associates/Senior Associates       185 - 345
            Administration/Paraprofessionals    85 - 150

As successor to the BRS Practice, FTI will be responsible for
filing appropriate fee applications regarding previously
unbilled services provided by PwC prior to the Closing Date, and
will be entitled to all payments to be made by the Debtors after
the Closing Date for any outstanding receivables related to pre-
Closing Date services.  Furthermore, FTI assumes the
responsibility for filing a single final fee application for
pre-Closing Date PwC services and post-Closing Date FTI services
at the conclusion of these proceedings. (Enron Bankruptcy News,
Issue No. 54; Bankruptcy Creditors' Service, Inc., 609/392-0900)

Enron Corp.'s 9.875% bonds due 2003 (ENRN03USR3), DebtTraders
reports, are trading at about 14 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ENRN03USR3
for real-time bond pricing.


EOTT ENERGY: Court Moves Confirmation Hearing to February 4
-----------------------------------------------------------
The Confirmation Hearing on EOTT Energy Partners, L.P., and its
debtor-affiliates Second Amended Reorganization Plan originally
set for January 30, 2003 has been reset for Tuesday, February 4,
2003 at 10:00 a.m. and will be held before the Honorable Richard
S. Schmidt, U.S. Bankruptcy Court at 1133 N. Shoreline Blvd.,
2nd Floor in Corpus Christi, Texas 78401. (EOTT Energy
Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


ESSENTIAL THERAPEUTICS: Shareholders Nix Preferred Conversion
-------------------------------------------------------------
Essential Therapeutics, Inc., (Nasdaq: ETRX) announced the
results of its Special Meeting of Stockholders convened January
23, 2002, for the purpose of considering proposals to (1)
approve the conversion of its Series B Preferred Stock into
common stock, (2) increase the authorized capital stock of the
Company and (3) approve an amendment to its Restated Certificate
of Incorporation to effect any of certain specified reverse
stock splits.  With respect to proposals (1) and (2), the
Company did not receive the affirmative vote of stockholders
holding a majority of the outstanding shares of common stock,
and therefore proposals (1) and (2) were not approved.  Proposal
(3) was approved by the holders of the requisite number of
shares of common stock and Series B Preferred Stock.  The
Company intends to reconvene its Special Committee of the Board
of Directors to discuss the options available to the
Company.

Essential Therapeutics is committed to the development of
breakthrough biopharmaceutical products for the treatment of
life-threatening diseases. With an emerging pipeline of product
candidates, Essential Therapeutics is dedicated to
commercializing novel small molecule products addressing
important unmet therapeutic needs.  Additional information on
Essential Therapeutics can be obtained at
http://www.essentialtherapeutics.com

As reported in Troubled Company Reporter's January 17, 2003
edition, the Company currently does not have the funds available
to redeem all of the outstanding shares of Series B Preferred
Stock, and in the face of a redemption election by sufficient
holders of its Series B Preferred Stock, the Company would
likely need to consider taking action that may result in the
Company's dissolution, insolvency or seeking protection under
bankruptcy laws or similar actions.


EVERCOM INC: 11% Senior Note Exchange Offer Extended to Jan 31
--------------------------------------------------------------
Evercom, Inc., is extending the offer period for its exchange
offer for up to all of its outstanding 11% Senior Notes due
2007, which commenced December 24, 2002.  The exchange offer, as
extended, will expire at 5:00 p.m., New York City time, on
January 31, 2003.

Based on information available to the company, as of today,
approximately 80% of the $115,000,000 in outstanding Notes have
been tendered for exchange. The tender of Notes may be revoked,
in accordance with the terms and conditions of the exchange
offer, prior to the expiration of the exchange offer.

Offers to exchange Notes are made only by the Confidential
Exchange Offer and Solicitation of Consents dated December 24,
2002, which can be obtained by calling The Bank of New York, the
exchange agent, at (212) 815-5788, attention Mr. William
Buckley.

Evercom is a provider of inmate telecommunications systems,
serving approximately 2,000 correctional facilities throughout
the United States.  The company has become a recognized leader
in providing comprehensive, innovative technical solutions and
responsive value-added service to the corrections industry.

As reported in Troubled Company Reporter's December 9, 2002
edition, Evercom took the next important step in its efforts to
restructure.  Progress has been continuing in an orderly way and
now an overall agreement in principle has been reached between
its senior lenders, the ad hoc committee of subordinated
bondholders and Evercom's Board to restructure its balance
sheet.


FREEPORT-MCMORAN: Caps Price for $500-Million Sr. Notes Offering
----------------------------------------------------------------
Freeport-McMoRan Copper & Gold Inc., (NYSE:FCX) has priced $500
million of senior notes due 2010. The senior notes have an
interest rate of 10.125% per year. The offering will generate
net proceeds of approximately $486 million, which FCX will use
to repay borrowings under its bank credit facilities, with the
excess invested in short term investments. FCX plans to use its
available cash to provide for the redemption of its Series I
Gold-Denominated Preferred Stock (NYSE: FCX PRB), which has a
mandatory redemption date of August 1, 2003, and for its other
2003 debt obligations, including its 7.20% Senior Notes in
November 2003. FCX also intends to enter into a new bank credit
facility, which JPMorgan will arrange. When FCX enters into the
new credit facility, FCX intends to terminate its existing bank
credit facilities.

The notes will not be registered under the Securities Act of
1933 or the securities laws of any other jurisdiction and may
not be offered or sold in the United States absent registration
or an applicable exemption from registration requirements. FCX
plans to issue the notes only to qualified institutional buyers
under Rule 144A and to persons outside the United States under
Regulation S.

As reported in Troubled Company Reporter's Monday Edition,
Standard & Poor's assigned its 'B-' rating to Freeport-McMoRan
Copper & Gold Inc.'s $250 million of senior unsecured notes.

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

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.


GEMSTAR-TV: Intends to Further Restate Financial Statements
-----------------------------------------------------------
Gemstar-TV Guide International, Inc., (Nasdaq:GMSTE) said that,
as a result of the previously disclosed review of its accounting
policies and its recent engagement of a new independent
accounting firm, Gemstar intends to further restate its
financial statements.

As a result of these restatements, an aggregate of $19.0 million
in previously reported licensing revenues will not be
recognized, an aggregate of $8.2 million in previously reported
interactive programming guide advertising revenues will not be
recognized, an aggregate of $26.8 million in previously reported
licensing revenues will be reclassified as either a reduction of
operating expenses or as other income, and an aggregate of $47.0
million in previously reported revenues will be recognized over
the remaining terms of the licensing agreement.

The periods affected by the restatements will include the fiscal
periods ended March 31, 2000, December 31, 2000 and December 31,
2001, and the fiscal quarters ended March 31, 2002, June 30,
2002 and September 30, 2002. The restatements will not have an
impact on the Company's cash position in any of the affected
periods.

In connection with the Company's filings with the Securities and
Exchange Commission on November 14, 2002, the Company disclosed
that it had engaged a new independent accounting firm to audit
its annual financial statements and to review its unaudited
interim financial statements and that, as a result of that audit
and review and the Company's ongoing review of its accounting
policies and the application of those policies to various types
of transactions, the Company expected further restatements of
the financial statements contained in those reports.

The Company believes it is likely that, as a result of the
continuing audit and review by its new independent accounting
firm, and the Company's ongoing review of its accounting
policies and the application of these policies to various types
of transactions, the Company may announce additional adjustments
which will be included in the anticipated restatements of its
historical financial statements. Such additional adjustments may
be material. The Company intends to file restated financial
statements with the Securities and Exchange Commission in March
2003. The information presented in or derived from the Company's
financial information previously filed for the fiscal periods
ended December 31, 2001 and 2000, March 31, 2000, and for the
fiscal quarters ended March 31, 2002, June 30, 2002 and
September 30, 2002, do not reflect the adjustments described
herein or any additional adjustments which may be required.
Accordingly, investors should not rely on the financial
information contained in the Company's Annual Report on Form 10-
K, as amended, for the fiscal year ended December 31, 2001 or in
the Company's quarterly report on Form 10-Q, as amended, for the
quarter ended March 31, 2002 or in the Company's quarterly
reports on Form 10-Q for the quarters ended June 30, 2002 and
September 30, 2002.

The adjustments announced are expected to include:

      --  The reversal of an aggregate of $18.1 million in
licensing revenues previously recognized in connection with the
Company's licensing agreement with AOL/Time Warner;

      --  A change in the timing of recognition of revenues under
certain expired license agreements, with a $0.9 million
cumulative reduction in previously reported revenues through
September 30, 2002.

      --  The reversal of an aggregate of $8.2 million in
revenues previously recognized in connection with advertising on
the Company's interactive programming guide; and

      --  In connection with the Company's arbitration award and
related settlement agreement with a certain set-top box
manufacturer, $26.8 million in previously reported licensing
revenues will be reclassified as either a reduction of operating
expenses or as other income. Additionally, $47.0 million in
licensing revenues previously recognized in connection with a
concurrent 10-year licensing agreement with the same set-top box
manufacturer will be recognized over the remaining term of the
licensing agreement.

Gemstar-TV Guide International, Inc., is a leading media and
technology company focused on consumer television guidance and
home entertainment. The Company's businesses include: television
media and publishing properties; interactive program guide
services and products; and technology and intellectual property
licensing. Additional information about the Company can be found
at http://www.gemstartvguide.com

                            *    *    *

As reported in Troubled Company Reporter's Sept. 9, 2002
edition, Standard & Poor's lowered its corporate credit
and bank loan ratings on Gemstar-TV Guide International Inc., to
double-'B' from double-'B'-plus.

Standard & Poor's said that all of the ratings remain on
CreditWatch with negative implications, where they were placed
on August 15, 2002.


GENTEK INC: Court Tinkers with Shipping Claims Payment Order
------------------------------------------------------------
At GenTek Inc., and its debtor-affiliates' request, the Court
modified the final order authorizing the payment of certain
prepetition shipping, warehousing and distribution charges.
Judge Walrath removed the 30-day time period within which the
Debtors are required to make the payments.

The Final Order originally authorized the Debtors to make up to
$3,600,000 with respect to the prepetition distribution charges
and import/export obligations within 30 days after the Order was
entered, or until November 16, 2002.  The Debtors believe that
this is impracticable.  "If such payments cannot continue to be
made, many shippers, distributors, warehousemen and parties to
whom import/export obligations are still owed may assert
possessory lien or other liens on goods or refuse to perform
additional services for the Debtors," Mark S. Chehi, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, contends.  Mr. Chehi
explains that the service interruption and the imposition of
liens will result in significant additional expenses and delays
in the delivery of goods to the Debtors' plants and to their
customers, which in turn severely, if not irreparably, damages
the Debtors' business and their prospects for a successful
reorganization.

As of November 26, 2002, the Debtors have paid $2,500,000 on
account of the distribution charges and import/export
obligations.  The Debtors still have $1,100,000 remaining from
the $3,600,000 cap to pay other outstanding claims. (GenTek
Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


GENUITY INC: Asking Court to Clarify Tax Payment Order
------------------------------------------------------
D. Ross Martin, Esq., at Ropes & Gray, in Boston, Massachusetts,
recounts that on the Petition Date, Genuity Inc., and its
debtor-affiliates filed the Tax Payment Motion, under which they
sought authority to pay so-called "trust-fund" taxes as well as
other taxes.  In a discussion with the Debtors' proposed counsel
at that time, the Court itself noted the importance of paying
even non-trust-fund taxes in the ordinary course, in order to
relieve the estate of potential penalties and additional costs
from any tax lien filings and other tax litigation.

On review of the transcript of the first-day hearings, Mr.
Martin relates that the Debtors became aware that the in-court
discussion may have suggested that only trust-fund taxes were
the subject of the Tax Payment Motion, and that a statement was
made in the hearing that the total amount of taxes to be paid
pursuant to the Tax Payment Motion was about $11,000,000.  That
amount referred only to the approximate amount of trust-fund
taxes.

In light of the colloquy, the Debtors wish to clarify that the
Tax Payment Motion sought authority to pay all trust-fund taxes
and all priority taxes.  Mr. Martin tells the Court that these
payments, if made in the ordinary course, will preserve estate
assets due to avoidance of tax penalties and reduction of
needless tax litigation.  In addition to the $11,000,000 of
trust-fund taxes, the Tax Payment Motion sought payment of an
additional $18,000,000 of other priority taxes, especially real
estate taxes.

Thus, the Debtors request entry of an order under Section 105 of
the Bankruptcy Code clarifying that the Tax Payment Order
authorizes them to pay both trust-fund and non-trust fund taxes,
estimated to be $28,000,000, on the terms set forth in the Tax
Payment Order.

The Debtors wish to ensure that this Court is apprised of these
facts in light of the colloquy at the first-day hearings and the
relief actually requested in the Tax Payment Motion, especially
in light of the Court's concern with minimizing tax penalties
and other costs that would unnecessarily diminish the estate.
The Debtors have discussed this matter with the Office of the
United States Trustee and the Official Creditors Committee in
these cases, and neither has any objection to entry of an order
clarifying that the Tax Payment Order authorized the payment of
both trust fund taxes and non-trust-fund priority taxes.
(Genuity Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


GEORGIA-PACIFIC CORP: Prices $1.5 Billion Senior Debt Offering
--------------------------------------------------------------
Georgia-Pacific Corp., (NYSE: GP) priced its $1.5 billion senior
notes offering, consisting of $800 million of 9.375 percent
notes due in 2013 and $700 million of 8.875 percent notes due in
2010.  The 9.375 percent notes due in 2013 will be callable at
the company's option beginning in 2008.  The company expects to
close the offering on or before Jan. 30, 2003.

Proceeds from the offering will be used to repay approximately
$500 million outstanding under Georgia-Pacific's capital markets
bridge facility, which matures Aug. 16, 2003, and approximately
$1 billion of bank debt outstanding under the company's
revolving credit facility.

Following this offering, Georgia-Pacific will have $1.7 billion
outstanding under its revolving credit facility and
approximately $1.3 billion of available liquidity under this
facility.

"We are very pleased to successfully complete this important
financing and to have increased it significantly from its
original size of $500 million due to attractive terms and strong
investor confidence in Georgia-Pacific," said A.D. "Pete"
Correll, Georgia-Pacific chairman and chief executive officer.
"We believe the offering addresses any possible liquidity
concerns that investors may have had.  The market's positive
reaction reaffirms the strength of Georgia-Pacific's businesses
and its solid long-term fundamentals."

The notes were offered in an unregistered offering pursuant to
Rule 144A and Regulation S under the Securities Act of 1933.
Georgia-Pacific will offer to exchange the unregistered notes
for substantially identical registered senior notes following
the completion of the offering.  The senior notes will not be
registered under the Securities Act of 1933 or the securities
laws of any state and may not be offered or sold in the United
States absent registration or an applicable exemption from the
registration requirements under the Securities Act and any
applicable state securities laws.

Goldman, Sachs & Co., and Banc of America Securities LLC served
as joint bookrunning managers of the offering.

Headquartered at Atlanta, Georgia-Pacific is one of the world's
leading manufacturers of tissue, packaging, paper, building
products, pulp and related chemicals.  With 2002 annual sales of
more than $23 billion, the company employs approximately 65,000
people at 400 locations in North America and Europe.  Its
familiar consumer tissue brands include Quilted Northern(R),
Angel Soft(R), Brawny(R), Sparkle(R), Soft 'n Gentle(R), Mardi
Gras(R), So-Dri(R), Green Forest(R) and Vanity Fair(R), as well
as the Dixie(R) brand of disposable cups, plates and cutlery.
Georgia-Pacific's building products distribution segment has
long been among the nation's leading wholesale suppliers of
building products to lumber and building materials dealers and
large do-it-yourself warehouse retailers.  For more information,
visit http://www.gp.com

DebtTraders reports that Georgia-Pacific's 8.250% bonds due 2023
(GP23USR1) are trading at about 87 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=GP23USR1for
real-time bond pricing.


GRUMMAN OLSON: Wants to Continue Alvarez & Marsal's Engagement
--------------------------------------------------------------
Grumman Olson Industries, Inc., wants the U.S. Bankruptcy Court
for the Southern District of New York to allow the continued
retention of Alvarez & Marsal, Inc., as restructuring
professionals.

The Debtor relates that Alvarez has provided the Debtor with two
individuals who have been serving as restructuring officers.
Sajan P. George serves as the Chief Restructuring Officer and
Martin Borders serves as the Restructuring Officer.  Alvarez has
also agreed to make available such additional personnel as may
be required to assist in rendering the services described below.

These officers have been responsible for:

      (a) preparation of a financial review of the Debtor;

      (b) assistance in the identification of cost reduction,
          operations improvement, and cash generation
          opportunities;

      (c) assistance in developing restructuring plans or
          strategic alternatives for maximizing the Debtor's
          enterprise value;

      (d) service as principal contact with the Debtor's
          creditors, customers, and employees with regard to
          financial and operational matters; and

      (e) performance of such other services as requested by the
          Debtor's Board and agreed to by Alvarez.

Under the Prepetition Alvarez Agreement, Alvarez has been
compensated at a flat monthly rate of $75,000 for the services
of Messrs. George and Borders.  Alvarez is also entitled to
incentive compensation in the amount of $350,000 payable on the
earlier of the sale of the Debtors' assets or the consummation
of a plan of reorganization.

For the services of other officers, these billing rates apply:

           Managing Director     $450 per hour
           Director              $325 per hour
           Associate             $200 per hour
           Analyst               $125 per hour

Grumman Olson Industries, Inc., a business which derives its
operating revenues primarily from the sale of truck bodies,
filed for chapter 11 protection on December 9, 2002. Sanford
Philip Rosen, Esq., at Sanford P. Rosen & Associates, P.C., and
James M. Matthews, Esq., and Carl A. Greci, Esq., at Baker &
Daniels, represent the Debtor in its restructuring efforts.
When the Company filed for protection from its creditors, it
listed $30,022,000 in total assets and $38,920,000 in total
debts.


HANGER ORTHOPEDIC: Applauds S&P's Corp. Credit Rating Upgrade
-------------------------------------------------------------
On January 23, 2004, Standard & Poor's Health Care Ratings Team
announced a ratings increase for Hanger Orthopedic Group, Inc.,
(NYSE: HGR) Corporate Credit Rating from "B" to "B+."  They are
quoted as saying, "The upgrade results from consistent
improvements in Hanger's operating efficiency, profitability,
and capital structure during the past several quarters."  The
Corporate Credit Rating increase also positively affected the
balance of our ratings as follows:

                                     To:      From:
     Corporate Credit Rating          B+        B
     Senior Bank Loan Rating          B+        B
     Senior Unsecured Debt            B         B-
     Subordinated Debt                B-        CCC+

Chairman and CEO, Ivan R. Sabel stated, "The ratings increase
further validates the success of the operational and financial
initiatives illustrated in last year's performance improvement
plan.  This success continues to motivate our entire
organization to achieve future goals through continuous
process improvement."

Headquartered in Bethesda, Maryland, Hanger is the nation's
largest provider of orthotics and prosthetics patient care
services.  The Company provides its services through patient-
care centers located in 44 states and the District of Columbia.
It is also a leading distributor of O&P supplies and components.


HEXCEL CORP: Dec. 31 Net Capital Deficit Narrows to $127 Million
----------------------------------------------------------------
Hexcel Corporation (NYSE/PCX: HXL) reported results for the
fourth quarter and full year 2002.

Net sales for the fourth quarter of 2002 were $206.5 million as
compared to $239.1 million for the fourth quarter of 2001.
Operating income for the fourth quarter of 2002 was $12.3
million versus an operating loss $357.4 million for the fourth
quarter of 2001. Net loss for the fourth quarter of 2002 was
$6.1 million, compared to a net loss of $413.8 million for the
fourth quarter of 2001. As of January 1, 2002, the Company
adopted FAS 142 and ceased amortizing goodwill. The Company's
fourth quarter of 2001 net loss would have been $411.0 million
had FAS 142 been in effect at that time.

Fourth quarter 2001 results included $51.1 million in business
consolidation and restructuring expenses, and $349.5 million in
charges representing impairment of goodwill, certain purchased
intangibles, a minority equity investment and U.S. deferred tax
assets. Excluding business consolidation and restructuring
expenses and the impairment charges, and assuming that the
Company ceased amortizing goodwill in 2001, the Company's pretax
losses for the fourth quarter of 2002 and 2001 were $2.3 million
and $9.2 million, respectively.

For the full year of 2002, net sales were $850.8 million as
compared to $1,009.4 million in 2001. Operating income for the
year was $60.2 million versus an operating loss of $316.2
million in 2001. Net loss for 2002 was $13.6 million, compared
to a net loss of $433.7 million for 2001. The Company's net loss
for 2001 would have been $421.2 million had the Company ceased
amortizing goodwill during the period. Excluding business
consolidation and restructuring charges, the litigation gain
reported in 2002 and the impairment charges reported in 2001,
and assuming that the Company ceased amortizing goodwill in
2001, the Company's pretax loss in 2002 was $1.6 million, as
compared to a pretax loss of $3.7 million in 2001.

Adjusted EBITDA for the fourth quarter of 2002 was $25.7 million
versus $19.9 million for the fourth quarter of 2001. For the
full year, Adjusted EBITDA was $109.4 million in 2002 and $119.2
million in 2001. The Company reports Adjusted EBITDA as defined
by the Company's senior credit facility, as it is used in the
computation of all of the financial covenants in that facility.

Hexcel Corporation's December 31, 2002 balance sheet shows a
total shareholders' equity deficit of about $127 million.

                   Chief Executive Officer Comments

Commenting on Hexcel's fourth quarter results, Mr. David E.
Berges, Chairman, President and Chief Executive Officer, said,
"In the quarter, the Company continued to benefit from the
results of its cost reduction programs launched in November
2001. Throughout the year, we have exceeded our goals for
reductions in cash fixed costs. This quarter, those cost
reductions permitted us to achieve a more normalized level of
operating income as a percentage of sales, despite revenues
being $32.6 million, or 13.6%, lower when compared to the fourth
quarter of 2001."

Mr. Berges added, "I am particularly pleased to report that once
again we were able to reduce our total debt during the quarter.
During the fourth quarter of 2002, our total debt, net of cash,
decreased $22.5 million to $613.5 million. Reductions in
inventories by a further $13.5 million to $113.6 million
contributed to this reduction in debt. Inventories are now at
the lowest point since we acquired the Ciba Composites business
in 1996 and yet our on-time delivery performance improved in the
year. Net debt is now $60.8 million lower than a year ago
despite $24.3 million in cash restructuring costs to right-size
our Company."

Mr. Berges continued, "The year 2002 was a year of significant
accomplishment for Hexcel. Despite a dramatic sales decline due
to difficult market conditions, we met all of our financial
commitments. For the most part, this was a result of the
benefits derived from the restructuring program announced in
November of 2001."

Mr. Berges concluded, "This performance in the face of
adversity, combined with Hexcel's strong market position in the
Company's long-term growth markets, facilitated the recently
announced agreement to raise $125.0 million in equity. Armed
with this new capital commitment, we expect to refinance our
senior credit facility with the maturity of the new senior debt
set well into the expected recovery cycle."

                         Revenue Trends

Consolidated revenues of $206.5 million for the fourth quarter
of 2002 were 13.6% lower than 2001 fourth quarter revenues of
$239.1 million, driven overwhelmingly by the sharp reduction in
sales to the commercial aerospace market. Had the same U.S.
dollar, British pound and Euro exchange rates applied in the
fourth quarter of 2002 as in the fourth quarter of 2001,
revenues for the fourth quarter of 2002 would have been $199.1
million, reflecting the weakening of the U.S. dollar over the
prior year.

      -  Commercial Aerospace. Sales to aircraft producers and
their subcontractors continued to reflect the sharp impact of
reducing aircraft build rates in 2002 compared to 2001. Revenues
for the 2002 fourth quarter were $96.3 million, 22.5% lower than
the 2001 fourth quarter revenues of $124.2 million. For the full
year, revenues were $391.1 million, 27.4% lower than revenues of
$538.9 million in the prior year, reflecting the four to six
month lead times in which Hexcel's deliveries precede build
schedules.

      -  Industrial Markets. Sales for the 2002 fourth quarter of
$59.9 million were 5.8% lower than the $63.6 million reported in
the fourth quarter of 2001. The Company saw lower demand for its
reinforcement fabrics used in military body armor applications.
Sales were impacted by delays in funding for military body armor
programs and pending product transition within the military
services. Demand for the Company's products used in other non-
aerospace applications, including architectural, automotive,
civilian body armor, recreation equipment, and wind energy
applications, continued to show strength. In particular, sales
of composite materials used in wind energy applications achieved
record quarterly revenues. Industrial sales for 2002 were $253.9
million, up slightly from $250.2 million in 2001. Due to the
lack of clarity in military soft body armor demand, the
Company's Industrial revenues may fluctuate for several quarters
even though the prospects for growth from wind energy,
automotive, and other applications remain strong.

      -  Space & Defense. Revenues of $37.2 million for the
fourth quarter of 2002 were 6.3% lower than the unusually strong
fourth quarter of 2001. While the Company's space & defense
revenues tend to vary quarter to quarter due to military
procurement schedules, sales associated with military aircraft
and helicopters continue to trend upwards as the new generation
of military aircraft in the United States and Europe ramp up in
production. For the full year, revenues were $147.5 million,
2.9% higher than revenues of $143.3 million in the prior year.

      -  Electronics. Sales for the 2002 fourth quarter were
$13.1 million, up 12.9% from the fourth quarter of 2001.
Although sales showed some improvement over the lower sales
experienced in the fourth quarter of 2001, sales continue to be
affected by a severe industry downturn in the global electronics
market that began in 2001 and has persisted throughout 2002. The
Company still sees no evidence of a substantial near term
recovery in this market. Sales for 2002 were $58.3 million, or
24.3%, lower than 2001 primarily because the industry downturn
mentioned above did not begin until late in the first quarter of
2001.

Based, in part, on the factors discussed above, the Company
currently estimates that its 2003 net sales are likely to be in
the range of $800 million to $850 million.

               Gross Margin and Operating Income

Gross margin for the fourth quarter of 2002 was $39.6 million,
or 19.2% of sales, compared with $35.2 million, or 14.7% of
sales, for the same period last year. For the year, gross margin
was $161.3 million, or 19.0% of sales, compared with $190.8
million, or 18.9%, for 2001, as the Company's cost reduction
programs took effect and operations adjusted to lower levels of
production.

Operating income for the 2002 fourth quarter was $12.3 million,
or 6.0% of sales, compared to an operating loss of $357.4
million for the 2001 fourth quarter. Operating income for the
full year was $60.2 million, or 7.1% of sales. Full year
operating income, as a percentage of sales, achieved by the
Company in 2002 is at a more normalized level despite a $158.6
million drop in revenues. Included in selling, general and
administrative expenses for the 2002 fourth quarter were $1.5
million of expenses incurred in connection with the announced
equity investment. Excluding these expenses and the $12.5
million benefit of adopting the new accounting standard for the
amortization of goodwill, selling, general and administrative
expenses in the year 2002 were $24.0 million lower than in 2001.

              Investments in Affiliated Companies

Equity in losses of affiliated companies was $1.5 million for
the fourth quarter of 2002, reflecting primarily losses reported
by the Company's joint ventures in China and Malaysia as they
ramp up production of aerospace composite structures. Equity in
losses of affiliated companies was $10.1 million in the fourth
quarter of 2001, and included a $7.8 million write-down of the
Company's carrying value of its equity investment in an
affiliated company. These losses by affiliated companies do not
affect the Company's cash flows.

                              Debt

Total debt, net of cash, decreased by $22.5 million to $613.5
million as of December 31, 2002, compared to September 30, 2002.
Operating cash flow in the quarter benefited from reductions in
working capital. The Company had undrawn revolver and overdraft
revolver availability under its senior credit facility of $87.9
million as of December 31, 2002 after having made a voluntary
reduction in revolver commitment of $21.2 million in December.
This reduction reduces the spread the Company will pay on
advances in 2003 and fees payable for unutilized commitments.
The total commitment under the senior credit facility as of
December 31, 2002 after scheduled amortization and the voluntary
commitment reductions, and including a letter of credit facility
of $30.0 million, was $297.6 million.

In January 2002, the senior credit facility was amended,
relaxing the quarterly financial maintenance covenants to
accommodate the Company's revised business plans and projections
for 2002. As of December 31, 2002, the Company was in compliance
with the revised financial covenants. The January 2002 amendment
did not change the financial covenant test values for 2003.
While the Company intends to refinance the senior credit
facility in conjunction with the announced $125.0 million equity
investment in the first half of 2003, it is not known if the
transaction will close before the end of the first quarter. The
Company is therefore planning to seek an amendment to the
existing senior credit facility so that the financial covenants
will accommodate the Company's expected financial performance in
the first two quarters of 2003.

The $125.0 million equity investment is subject to customary
closing conditions, including regulatory approvals and the
approval of Hexcel's stockholders as well as a refinancing of
its senior credit facility for a term of four or more years with
certain threshold maturity and covenant requirements. If this
equity investment were not to be completed, the Company would
require further amendment of the financial covenants under the
existing senior credit facility, and would need to arrange
financing for the maturity of its convertible subordinated
notes, due August 1, 2003. While the Company believes that it
will successfully complete the $125.0 million equity investment,
there can be no assurances that the transaction will be
completed. If the transaction has not closed by the time of the
filing of the Company's Annual Report on Form 10-K for the year
ended December 31, 2002, the Company's independent accountants'
opinion will likely include an explanatory paragraph
highlighting the liquidity uncertainties.

Hexcel Corporation is the world's leading advanced structural
materials company. It develops, manufactures and markets
lightweight, high-performance reinforcement products, composite
materials and engineered products for use in commercial
aerospace, space and defense, electronics, and industrial
applications.


HOLLYWOOD ENTERTAINMENT: Will Publish Recent Results on Feb. 20
---------------------------------------------------------------
Hollywood Entertainment Corporation (Nasdaq: HLYW), owner of the
Hollywood Video chain of over 1800 video superstores, announced
further guidance with respect to the Company's fiscal 2003
outlook.  For 2003, the Company is targeting its increase in
comparable store sales to be in the range of 12% to 14%.  As
previously announced, the Company is targeting its adjusted
diluted earnings per share for fiscal 2003 to be in the range of
$1.40 to $1.45 per share.  For the first, second, third and
fourth quarters the Company is targeting comparable store sales
increases to be equal to or greater than 10%, 9%, 12% and 16%
respectively by quarter and adjusted diluted earnings per
share to be at least $0.35, $0.28, $0.30, $0.47 respectively by
quarter.

Included in these estimates is the timing of openings and
related one-time costs associated with the Company's growth
plans, specifically its Game Crazy re-merchandising initiative
and new store openings.  Not included are any special charges
related to the Company's recently completed refinancing of its
existing debt.  Adjusted diluted earnings per share represents
income before taxes and special charges, less an assumed
normalized effective income tax rate.

EBITDA for fiscal 2003, excluding special charges, is expected
to be between $255 and $265 million.  The Company plans to use
its cash flow to open up to 200 new stores and increase its
number of Game Crazy departments by not less than 300.
Approximately 20 new stores and 75 new Game Crazy departments
are expected to be added in the first quarter. Total investment
expenditures for fiscal 2003, inclusive of working capital
requirements associated with new stores and Game Crazy
departments, is expected to be in the range of $140 million and
$150 million.  As a result the Company expects its free cash
flow for fiscal 2003 to be in the range of  $30 million to $40
million.

Commenting on the release, Mark Wattles, CEO and Founder, said,
"We are excited about the Company's outlook for fiscal 2003.
Our business is benefiting from the rollout of Game Crazy which
leverages our existing traffic and real estate.  In addition,
contrary to what has been reported in the press, DVD has and is
driving growth in our rental business.  We have a great
selection of new releases and library titles on both DVD and
VHS.  Based on our experience for the last two years with
millions of DVD rental households, our average customer
increases their rental spending after buying a DVD player.  We
believe as DVD hardware penetration continues to grow so will
our rental revenues."

The Company also announced that on Thursday, February 20, 2002,
it expects to release its earnings and hold a conference call to
review its operating results for the fourth quarter and fiscal
year ended December 31, 2002.

Hollywood Entertainment owns and operates the second largest
video store chain in the United States.  Hollywood Entertainment
and Hollywood Video are registered trademarks of Hollywood
Entertainment Corporation.

As previously reported, Hollywood Entertainment's September 30,
2002 balance sheet shows that total current liabilities exceeded
total current assets by about $130 million.


INTEGRATED HEALTH: Abe Briarwood Pitches Best Bid at Auction
------------------------------------------------------------
Integrated Health Services, Inc., concluded its Bankruptcy
Court-approved auction process.

At the auction, which was held on Wednesday, January 22, 2003,
IHS, in consultation with the Committee of Unsecured Creditors
and their respective advisors, determined that the highest and
best bid was submitted by Abe Briarwood Corp.  Briarwood is
financially sponsored by Cammeby's International Limited, a
privately held diversified real estate holding company with
significant assets under management. Cammeby's owns, leases,
manages and develops commercial and residential properties
located primarily along the eastern seaboard. Cammeby's also
makes investments in other operating businesses where it sees
opportunities.

This successful offer by Briarwood is subject to final
Bankruptcy Court approval. A hearing to approve Briarwood's
offer is expected to be held on January 29, 2003. A hearing to
consider approval of the Disclosure Statement is scheduled to be
held on February 7, 2003. Following a period during which votes
of creditors will be solicited to approve the Plan of
Reorganization, a hearing will be held to confirm the Plan of
Reorganization in March 2003. These critical steps help to
affirm the IHS' previously anticipated time frame for emergence
from bankruptcy early in the second quarter.


INTEGRATED HEALTH: Divesting Seattle Skilled Nursing Facility
-------------------------------------------------------------
Integrated Health Services, Inc., and its debtor-affiliates ask
the Court to:

   -- approve and authorize the implementation of a certain
      Operations Transfer Agreement with SunBridge Healthcare
      Corporation, as transferee, which provides a framework for
      the orderly transition to the New Operator of the
      operations of that certain skilled nursing facility known
      as "Integrated Health Services of Seattle" located at 820
      NW 95th Street in Seattle, Washington; and

   -- approve and authorize the assumption and assignment of
      the Medicare and Medicaid provider reimbursement numbers
      and associated provider reimbursement agreements.

James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor
LLP, in Wilmington, Delaware, relates that on October 27, 1995,
Omega Healthcare Investors, Inc., as lessor, and the Debtors, as
lessee entered into an Amended and Restated Lease, pursuant to
which Omega leased the Facility to the Debtors.  Within a short
period of time after entering into the Lease, it became apparent
to the Debtors that the heating system at the Premises was
inadequate. The Premises had been expanded prior to the time
that the Debtors became a tenant, and the antiquated HVAC system
was inadequate to meet the increased demand for heat and air
conditioning, which was caused by the expansion.  A variety of
solutions to the problem were considered, and the Debtors
received quotes from a number of different contractors.
However, no action was taken because of the complexity of the
construction work, which would have been required to meet the
requirements set by city, county, and state agencies, and
applicable building codes.  Rather than expose the residents of
the Facility to unhealthy conditions, the Debtors "banked" a
certain number of beds in the wing of the building where the
heating problems were most acute.

Following the Petition Date, Mr. Patton relates that the
Debtors' management evaluated the financial performance of the
Facility, its proximity to other Debtor-operated facilities, and
the condition of its physical plant, and concluded that it would
not be prudent to maintain the Facility's operations.  The
Debtors' analysis indicated that the Lease did not add
sufficient value to their estates.  The Facility's projected
year 2002 EBITDAR is $620,300, but after payment of annual rent
amounting to $1,485,320, the Facility's pro-forma earnings
before interest, taxes, depreciation and amortization is
negative $865,020.

The Transfer Agreement between the Debtors and the New Operator
is intended to govern the transition of the operations of the
Facility to the New Operator in accordance with applicable state
and federal law.  More specifically, the Transfer Agreement
governs:

   -- the transfer of the Debtors' personal property located at
      the Facility to the New Operator, including inventory,
      furniture, fixtures, equipment and supplies, as well as
      resident lists and records;

   -- the assumption and assignment of the Debtors' rights to the
      Medicare Provider Agreements;

   -- the transfer of Resident Trust Funds;

   -- the employment of the Debtors' employees;

   -- the disposition of unpaid accounts receivable;

   -- prorations of utility charges, real and personal property
      taxes, and any other items of revenue or expense
      attributable to the Facility; and

   -- access to records.

According to Mr. Patton, the New Operator has the option of
assuming vendor, service or other agreements and must notify the
Debtors within ten days following the Execution Date of any
contract that it wants to assume.  The Debtors have also agreed
to leave one set of its operating procedures manuals at the
Facility. In addition, the Debtors have agreed to undertake a
nursing home bed banking conversion so as to reinstate the 21
banked beds, which is not set forth in the Transfer Agreement.

In September 2002, Mr. Patton relates that the Debtors requested
information from the United States Department of Justice
relating to the Facility, with respect to the amount of money,
if any, which was due and owing from the Centers for Medicare
and Medicaid Services to the Debtors, and due and owing from the
Debtors to the Centers.  In an e-mail dated October 2, 2002,
Matthew J. Troy, Esq., counsel to the Justice Department,
presented a preliminary analysis to the Debtors' counsel, which
indicated that there was a substantial net underpayment balance
owed to the Debtors exceeding $480,000.  While the net
underpayment balance is subject to change, and the Justice
Department has reserved its right to recalculate the
underpayment balance, the Debtors believe that they may assume
and assign the Medicare Provider Agreement with no liability
flowing to the New Operator.  The net underpayment will remain
as a credit or entitlement of the Debtors, and notwithstanding
the assumption and assignment of the Medicare Provider
Agreement, will not inure to the benefit of the New Operator.

Since October 2002, Mr. Patton reports that the Debtors have
been engaged in negotiations with CMS concerning a global
settlement of all under and overpayment amounts relating to
facilities that the Debtors have operated or presently operate.
In conjunction with that global settlement, the Debtors have
agreed with CMS that any amounts due and owing from CMS to the
Debtors in connection with the facilities which are the subject
of the Settlement Motion, including the Seattle Facility, will
be retained by CMS and credited toward the global settlement.

With respect to the Debtors' Medicaid Provider Agreement, the
Debtors are willing to assume and assign their Medicaid Provider
Agreement to the New Operator on the condition that the New
Operator assume and satisfy any associated prepetition
liability, which is due and owing by the Debtors to the State of
Washington, Department of Health & Human Services.  The Debtors,
in turn, have agreed to satisfy any postpetition overpayment
liability, which is owed to HHS.

As of December 23, 2002, HHS has not yet liquidated the
postpetition amounts, if any, which are due from the Debtors, to
HHS.  To the extent that HHS cannot liquidate the postpetition
overpayment balance which the Debtors have agreed to pay, the
Debtors may be required to post a bond in an estimated amount,
or the New Operator could assume the Debtors' Medicaid Provider
Agreement, and the Debtors could agree to indemnify the New
Operator for any amounts which the New Operator is required to
pay to HHS, which are attributable to the Debtors' postpetition
operation of the Facility.

The soundness of the Debtors' decision to transfer the Facility
to the New Operator is manifest in the result, which the
Debtors' estates will realize -- the divestiture of an
unprofitable facility that the Debtors have been unable to turn
around and the elimination of significant ongoing administrative
liabilities. Should the transfer of operations which is
contemplated by the Transfer Agreement fail to occur, Mr. Patton
notes that the Agreement allows the Debtors to close down the
Facility if a transition to a new operator is not achieved, or
continue its operations rent-free.  Accordingly, the Debtors
contend that the transfers of property and the Transfer
Agreement are prudent and appropriate, and that entering into
the agreements represents an exercise of sound business
judgment. (Integrated Health Bankruptcy News, Issue No. 49;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


INTERLIANT INC: Brings-In Urbach Kahn to Replace Ernst & Young
--------------------------------------------------------------
At a meeting held on January 10, 2003, the Board of Directors of
Interliant, Inc., approved the engagement of Urbach Kahn &
Werlin LLP as its independent auditors for the fiscal year
ending December 31, 2002, to replace the firm of Ernst & Young
LLP who were dismissed as auditors of the Company effective
January 21, 2003. The audit committee of the Board of Directors
approved the change in auditors on January 10, 2003. This
retention is subject to the approval of the United States
Bankruptcy Court for the Southern District of New York, which
approval the Company shall seek and expects to obtain.

As previously reported, Interliant, Inc., completed the sale of
its Oracle professional services business to SchlumbergerSema, a
subsidiary of Schlumberger (NYSE:SLB), through an asset sale
transaction. This sale completed the planned divestitures of
non-core businesses which Interliant announced on August 5,
2002, when the company filed for reorganization under Chapter 11
of the U.S. Bankruptcy Code.

The sale of the assets of the Dallas, Texas-based consulting
group was closed on December 20, 2002, for cash and the
assumption by SchlumbergerSema of certain debt related to the
Oracle business. Additionally, SchlumbergerSema has hired all of
the employees of the business.

Interliant, Inc., (OTCBB:INIT) is a leading provider of managed
infrastructure solutions, encompassing messaging, security, and
hosting plus an integrated set of professional services that
differentiate and add customer value to these core solutions.
The company makes it easier and more cost-effective for its
customers to acquire, maintain, and manage their IT
infrastructure via selective outsourcing. Headquartered in
Purchase, New York, Interliant has forged strategic alliances
and partnerships with the world's leading software, networking
and hardware manufacturers, including Check Point Software
Technologies Inc., IBM and Lotus Development Corp., Microsoft,
and Sun Microsystems Inc. For more information about Interliant,
visit http://www.interliant.com


INT'L TOTAL: Wins Creditors' Approval of Liquidation Plan
---------------------------------------------------------
International Total Services, Inc.'s independent voting agent,
Poorman-Douglas Corporation, announced the results of the
creditor vote on the company's plan of liquidation.  The final
tabulation showed that the ITS plan was approved by 98.35% of
the unsecured creditors voting, representing 99.74% of the
dollar value of the claims voted. A court hearing to confirm the
plan of liquidation is scheduled for February 13, 2003 in the
United States Bankruptcy Court for the Eastern District of New
York.

"The creditors have spoken, and we are gratified that our plan
has received overwhelming support," said Mark Thompson, chief
executive officer of ITS. "The amounts that unsecured creditors
will recover under the plan are far greater than anyone could
have rationally expected when the company filed for bankruptcy
protection in September 2001.  The patience and cooperative
approach of our creditors, both secured and unsecured, are being
duly rewarded with an outstanding recovery."

Under the liquidation plan, the company projects approximately
$10.6 million will be available for distribution to creditors.
The company projects that approximately $2.75 million will be
used to pay administrative expenses, priority debts and taxes.
The remaining funds will be used to pay general unsecured
creditors, who the company projects will receive approximately
60.4 cents on the dollar.

ITS was a leading provider of airport service personnel and
staffing and training services and commercial security services
for a wide variety of industries. During the first half of 2002,
the company sold all of its operating assets that were not
needed to fulfill its contract with the Transportation Security
Administration for preboard screening.  The company ceased all
remaining operations on December 23, 2002, when its contract
with TSA terminated, and has since disposed of virtually all
remaining assets, mostly office equipment and furniture.
Pending confirmation, the company intends to wind up its affairs
and make distributions to creditors as expeditiously as
practicable.


KAISER ALUMINUM: Nine New Debtors Hire Logan as Claims Agent
------------------------------------------------------------
The Nine New Kaiser Aluminum Corporation debtor-affiliates will
have Logan & Company, Inc., as their claims and noticing agent.
Logan's employment terms will identical with its employment with
the Existing Debtors.

Paul N. Heath, Esq., at Richards, Layton & Finger, points out
that "it would make no sense for the New Debtors to have a
different claims agent."  Mr. Heath also notes that Logan's
employment will assist with the efficient administration of the
New Debtors' cases.

                          *     *     *

Under the terms and conditions of the Logan Agreement, the
Debtors anticipate Logan will:

A. prepare and serve required notices in these chapter 11 cases,
      such as:

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

      b. notice of the claims bar date;

      c. notice of objection to claims;

      d. notice of any hearings on disclosure statement and
           confirmation of a plan of reorganization; and,

      e. such other miscellaneous notices as the Debtors or the
           Court may deem necessary or appropriate for an orderly
           administration of these cases;

B. within five days after the mailing of a particular notice,
      file with the clerk of court's office a certificate or
      affidavit of service that  includes a copy of the served
      notice, an alphabetical list of persons upon whom the
      notice was served and the  ate and manner of service;

C. maintain copies of all proofs of claims or proofs of
      interests filed in these cases;

D. maintain official claims registers in these cases by
      docketing all proofs of claims and interest in a claims
      database that includes the following information for each
      claim or interest asserted:

      a. the name and address of the claimant or interest holder
           and any agent thereof, it the proof of claim or
           interest was filed by an agent;

      b. the date the proof of claim or interest was received by
           Logan and, if applicable, the Court;

      c. the claim number assigned to the proof of claim or
           interest;

      d. the asserted amount and classification of the claim;
           and,

      e. the applicable Debtor against which the claim or
           interest is asserted;

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

F. transmit to the clerk's office a copy of the claims registers
      on a weekly basis, unless requested by the clerk's office
      on a more or less frequent basis;

G. maintain an up-to-date mailing, list for all entities that
      have filed proofs of claim or interest in these cases and
      make the list available upon request to the clerk's office
      or at  the expense of any party in interest;

H. provide access to the public for examination of copies of the
      proofs of claim or interest filed in these cases without
      charge during the regular business hours;

I. record all transfers of claims pursuant to Bankruptcy Rule
      3001(e) and provide notice of such transfers to the extent
      required by the said rule;

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

K. promptly comply with such further conditions and requirements
      as the clerk's office or the Court may at any time
      prescribe; and,

L. provide such other claims processing, noticing and related
      administration services as may be requested from time to
      time by the Debtors.

In addition, Logan will assist these Kaiser Aluminum debtor-
affiliates with:

A. preparation of the Debtors' assets and liabilities schedule,
      statement of financial affairs and master creditor lists
      and any amendments thereto;

B. the reconciliation and resolution of claims;

C. the preparation, marking and tabulation of ballots and other
      related services for the purpose of voting to accept or
      reject a plan or plans of reorganization; and,

D. technical support in connection with the foregoing. (Kaiser
Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


KEY3MEDIA GROUP: Closes VON Events Division Sale to pulver.com
--------------------------------------------------------------
Key3Media Group, Inc., (OTCBB:KMED) sold its VON events division
to pulver.com.

Key3Media purchased VON events from pulver.com in September of
2001. The company is a leader in the IP communications
information field. Its assets include VON events and the Pulver
Report. The VON sale is part of a larger strategic focus by
Key3Media, which owns COMDEX, NetWorld+Interop, Seybold Seminars
and other leading IT events.

"At this time, we feel its best to focus on the core assets of
the company," said Fredric D. Rosen, chairman and CEO of
Key3Media Group. "And this move helps allow us to do so."

Jeff Pulver, chairman and CEO of pulver.com, complimented
Key3Media for its stewardship of the brand and said he looked
forward to further success in the future.

"The IP communications story is just beginning to unfold,"
Pulver said. "And VON remains committed to being the number one
meeting place and information source for the IP industry."

Key3Media Group, Inc., produces information technology
tradeshows and conferences. Key3Media's products range from the
IT industry's largest exhibitions such as COMDEX and
NetWorld+Interop to highly focused events featuring renowned
educational programs, custom seminars and specialized vendor
marketing programs. For more information about Key3Media, visit
http://www.key3media.com

As reported in Troubled Company Reporter's December 19, 2002
edition, Standard & Poor's lowered its corporate credit and
subordinated debt ratings on technology trade show organizer
Key3Media Group Inc., to 'D' following the company's failure to
make the scheduled interest payment on its $300 million 11.25%
senior subordinated notes due 2011.

Los Angeles, California-based Key3Media had $370 million in
total debt on September 30, 2002.

Key3Media's senior secured debt rating remains on CreditWatch
with negative implications.


LIFESMART NUTRITION: Ability to Continue Operations Uncertain
-------------------------------------------------------------
Because of recurring operating losses, the excess of current
liabilities over current assets, and the stockholders' deficit,
there is substantial doubt about Lifesmart Nutrition
Technologies Inc.'s ability to continue as a going concern.  The
Company's ability to continue as a going concern is dependent on
attaining profitable operations, restructuring its financing
arrangements, and obtaining additional outside financing.
However, there can be no assurance the Company will be
successful in this regard.

The Company was originally organized in Utah on January 30, 1986
under the name Upland Investment Corporation, to engage in the
acquisition and/or development of assets, properties or
businesses of any kind.

In November 1993, the Company acquired G.S. & C., Inc., a Nevada
corporation in a stock for stock transaction. GSC was organized
under the laws of Nevada on September 1, 1993. In connection
with the transaction, the name of the Company was changed from
Upland Investment Corporation to Upland Energy Corporation to
better reflect the Company's business activities at that time.

The Company has been engaged in the business of exploring for
and developing oil and gas reserves through its subsidiary, GSC.
GSC sold certain oil and gas assets in August 1999, and the
Company's focus shifted to its oil and gas operations in the
Hittle field in central Kansas.

On February 15, 2002, the Company entered into a reverse
acquisition with LifeSmart Nutrition, Inc., a Utah corporation
engaged in the development and sale of nutraceutical products.
In connection with the reverse acquisition of LifeSmart
Nutrition, Inc., the following occurred: (a) the Company amended
its Articles of Incorporation to change its name to LifeSmart
Nutrition Technologies, Inc. to better reflect the Company's
present primary business activities and to add 10,000,000 shares
of preferred stock to the Company's authorized capitalization;
(b) the Company's common stock was reverse split on a 1 for 2
share basis; (c) the former officers and directors of the
Company resigned, and the directors of LifeSmart Nutrition, Inc.
were elected as directors of the Company; (d) shares of
LifeSmart Nutrition, Inc. common stock were converted to shares
of the Company's common stock on the basis of seven-tenths of
one (0.7) share of the Company's common stock for one (1) share
of LifeSmart Nutrition, Inc. common stock.  LifeSmart Nutrition,
Inc. is now a wholly-owned subsidiary of the Company.  The
Company now focuses its efforts on the nutraceutical business of
LifeSmart Nutrition, Inc.

As a negotiated term of the LifeSmart Nutrition, Inc.,
acquisition agreement, the Company agreed to either spin off its
oil and gas operations to its shareholders or sell its oil and
gas operations.  Under the terms of the acquisition agreement,
all of the Company's oil and gas operations will be transferred
to GSC.  The spin off, if accomplished, will not be on a pro
rata basis.  Instead, the former Upland Energy Corporation
shareholders of record as of February 14, 2002 will receive one
share of GSC common stock for every ten shares of Upland Energy
Corporation they then held.  As a result, the former Upland
Energy Corporation shareholders will receive approximately
873,859 shares of GSC common stock.  Every former LifeSmart
Nutrition, Inc. shareholder of record as of February 14, 2002
will receive one hundredth of one (0.01) share of GSC common
stock for every one share of the Company's common stock held by
such shareholders immediately after the acquisition of
LifeSmart.  As a result, former LifeSmart Nutrition, Inc.
shareholders will receive an aggregate of approximately 80,794
shares of GSC common stock.

If the Company does not complete the spin off of GSC by February
15, 2003, Lee Jackson and Maven Properties, LLC have an option
to purchase GSC from the Company for one hundred thousand
dollars ($100,000).  The spin off plan and option were entered
into to provide a mechanism to help dispose of the Company's oil
and gas properties which LifeSmart Nutrition, Inc.'s management
did not want to operate after the acquisition.  The oil and gas
properties had not proven profitable in the past and the
LifeSmart Nutrition, Inc. management does not want the oil and
gas operations to be a drain on its business and management's
time.

At November 30, 2002, the Company had total current assets of
$1,138,645, comprised of $769,807 in accounts receivable, net,
and $368,838 in inventories.  The Company's remaining assets
represented property and equipment, net of $18,868, intangibles,
net of $30,010, and other assets of $61,051.  As of November 30,
2002, the Company had total current liabilities of $4,004,119,
comprised of accounts payable of $2,199,167, accrued expenses of
$791,827, related party notes payable of $700,879, related party
advances of $170,000, a line of credit in the amount of $134,690
secured by accounts receivable, and a bank overdraft of $7,556.
During the three and six month periods ended November 30, 2002,
the Company was able to largely fund operations with cash
provided by operations.

LifeSmart's most significant cash needs in its present fiscal
year include raising funds to pay existing accounts payable and
accrued expenses, pay off some existing notes payable, increase
inventories to meet the demands of the increasing sales which
the Company anticipates, and to cover other operating expenses
until such time as revenues are sufficient to cover all
operating expenses. As of November 30, 2002, LifeSmart had no
cash on hand. LifeSmart has been able to continue operations
since November 30, 2002, largely due to an arrangement with its
primary manufacturer/supplier to manufacture LifeSmart's
products then ship the products to selected customers who pay
the manufacturer/supplier direct for the products.  The
manufacturer/supplier then deducts its costs to manufacture
before paying the net proceeds to LifeSmart.  In the event that
the manufacturer/supplier decides to terminate this arrangement
before LifeSmart raises substantial additional capital or
obtains another financing source, LifeSmart may not be able to
continue in business.  There can be no assurance that the
Company will be successful in its efforts to raise such capital
or obtain other financing sources.


LTV: Court OKs Stipulation with USWA re Tubular Plant Benefits
--------------------------------------------------------------
LTV Steel Company, Inc., represented in this matter by David G.
Heiman, Esq., Heather Lennox, Esq., and Nicholas M. Miller,
Esq., at Jones Day Reavis & Pogue, and the United Steelworkers
of America, AFL-CIO, represented by David M. Fusco, Esq., with
Schwarzwald & McNair in Cleveland, are parties to collective
bargaining agreements covering workers at LTV's tubular products
plants in Youngstown, Ohio; Elyria, Ohio; Ferndale, Michigan;
and Counce, Tennessee.  The Debtor intends to complete a sale of
the LTV Tubular Plans as a going concern to maximize their value
for the benefit of these estates.

The Asset Purchase Agreement with Maverick Tube Corporation
obligates the Debtors to negotiate under the National Labor
Relations Act and take into account the effect of the Maverick
sale on the employees of these plants.  As a result of these
negotiations, the Debtors and the Union signed a Memorandum of
Agreement Regarding the Sale of LTV Tubular Facilities.  Counsel
for each of the Official Committees signed-off on the Agreement
too.  The principal terms of that Agreement are:

      (1) Employees of the Tubular Facilities who are not
          employed by Maverick at the Closing, including those
          on layoff status, workers compensation status, long-
          or short-term disability, or sickness and accident,
          shall, until the earlier of their employment by
          Maverick or eight weeks from the date of Closing of
          The sale of the Tubular Facilities, be eligible to
          Receive benefits coverage for health, life insurance,
          dental and vision.

      (2) Employee-paid optional coverage for life, accidental
          death and dismemberment, and disability will cease as
          of the Closing Date.

      (3) The Supplemental Unemployment Benefit Plan is modified:

            (i) SUB Plan benefits payable for employees of the
                Tubular Facilities are limited solely to benefits
                payable to employees who are not employed by
                Maverick and are payable for the 8-week period
                After closing, and will thereafter cease.

           (ii) The amount of SUB Plan Weekly Benefit payable
                to eligible employees will be one-half of the
                full weekly SUB benefit.

          (iii) The SUB Plan Weekly Benefit will cease before
                the end of the 8-week period if an employee is
                employed by Maverick, or obtains other
                employment, effective on the date of the
                employment.

      (4) Service Bonus for Employees in the Clerical and
          Property Protection bargaining units are limited
          to the Service Bonus payable in November 2002 for the
          period of August 1, 2001, through July 31, 2002.

      (5) The Debtor and the Union will meet and use their
          best efforts to resolve all outstanding grievances
          relating to the Tubular Facilities.

      (6) The parties agree that the Agreement does not
          constitute a "plant closing".  The Debtor has no
          obligation to pay any severance allowances under any
          agreements as a result of the Debtor's termination
          of employees at the Tubular Facilities.

                          *   *   *

Keeping the sale moving along, Judge Bodoh put his stamp of
approval on a Stipulation memorializing this Agreement. (LTV
Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service,
Inc., 609/392-00900)


MATLACK SYSTEMS: Trustee Has Until Feb. 28 to Decide on Leases
--------------------------------------------------------------
The Chapter 7 Trustee for Matlack Systems, Inc., and its debtor-
affiliates obtained an extension of time from the U.S.
Bankruptcy Court for the District of Delaware to decide whether
it wants to assume, assume and assign, or reject the Estate's
unexpired nonresidential real property leases and executory
contracts.  The Chapter 7 Trustee has until February 28, 2003,
what to do with the executory contracts and unexpired leases.

Before filing for chapter 11 protection, Matlack Systems, Inc.,
North America's No. 3 tank truck company, provides liquid and
dry bulk transportation, primarily for the chemicals industry.
The Debtors converted their chapter 11 cases to cases under
Chapter 7 Liquidation of the Bankruptcy Court on October 18,
2002.  Richard Scott Cobb, Esq., at Klett Rooney Lieber &
Schorling represents the Debtors as they wind up their assets.


MCMS INC: Secures Exclusivity Extension Until February 12, 2003
---------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, MCMS Inc., and its debtor-affiliates obtained an
extension of their exclusive periods.  The Court gives the
Debtors, until February 12, 2003, the exclusive right to file
their plan of reorganization, and until April 12, 2003, to
solicit acceptances of that Plan from creditors.

Following the sale of its business and associated trade names
and trade marks, MCMS, Inc., changed its name to Custom
Manufacturing Services, Inc.  Debtor MCMS Customer Services,
Inc., has also changed its name to CMS Customer Services, Inc.
The Debtors filed for Chapter 11 protection on September 18,
2001. Eric D. Schwartz, Esq., and Donna L. Harris, Esq., at
Morris, Nichols, Arsht & Tunnell represent the Debtors in their
restructuring efforts.  When the company filed for protection
from its creditors, it listed $173,406,000 in assets and
$343,511,000 in debt.


METAWAVE COMMS: Will Likely File for Bankruptcy Protection
----------------------------------------------------------
Metawave(R) Communications Corp., (Nasdaq:MTWV) as a result of
the continued decline in capital spending for telecommunications
equipment, will begin the orderly wind down of its business
operations. In addition, it announced the reduction in force of
the majority of its employees.

Over the past 12 months, the company has worked to maximize
business efficiencies and minimize operating expenses, pursue
new business opportunities and examine its business options. At
this point, the company plans to sell the majority of its
assets, including its patent portfolio and other intellectual
property assets, finished products, service operation, inventory
and capital equipment.

"I am disappointed that the business climate unfavorably
affected our ability to sell our products to customers," said
Gary Flood, Metawave's chief executive officer. "A combination
of factors has prevented us from achieving our business
objectives and, as a result, we have taken these actions today.
The telecommunications equipment market has been extremely
challenging over the last year and we have limited visibility
into when the market might improve. We truly feel that we
conducted a lengthy, thorough and thoughtful process to try to
maximize enterprise and shareholder value. In particular, I
would like to thank our extremely talented and dedicated
employees for the tremendous efforts they have put into the
company over the past eight years."

The company will likely file a petition under the United States
Bankruptcy Code. In addition, the earnings conference call
scheduled for February 4, 2003, has been cancelled.


ML CBO VII: S&P Puts Junk-Rated Class A Notes on Watch Negative
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its rating on class A
notes issued by ML CBO VII 1997-C-3, an arbitrage CBO
transaction originated in March 1997, on CreditWatch with
negative implications. The rating had previously been lowered in
March 2002.

The CreditWatch placement reflects factors that have negatively
affected the credit enhancement available to support the notes
since March 2002. These factors include continuing par erosion
of the collateral pool securing the rated notes, a decline in
the interest from the collateral pool available for hedge and
interest payments on the liabilities, and a negative migration
in the credit quality of the performing assets in the pool.

The transaction experienced $ 14.01 million worth of defaults
since March 2002. Standard & Poor's noted that as a result of
such defaults, the overcollateralization ratios for the
transaction have suffered. According to the most recent trustee
report (January 2003), the class A overcollateralization is at
91.3% versus the required ratio of 116%, and compared to a ratio
of 98.8% in March 2002.

According to the January trustee report, the weighted average
coupon has deteriorated to 9.47%, versus the minimum required
weighted average coupon of 10.8% and a weighted average coupon
of 10.12 % in March 2002. The deal is currently failing seven
out of the nine Standard & Poor's issuer rating distribution
tests.

Standard & Poor's will be reviewing the results of current cash
flow runs generated for ML CBO VII 1997-C-3 to determine the
level of future defaults the rated class can withstand under
various stressed default timing and interest rate scenarios,
while still paying all of the interest and principal due on the
notes. The results of these cash flow runs will be compared with
the projected default performance of the performing assets in
the collateral pool to determine whether the ratings currently
assigned to the notes remain consistent with the credit
enhancement available.

             Rating Placed on Creditwatch Negative

                       ML CBO VII 1997-C-3

                      Rating
      Class    To               From     Current Bal. (Mil. $)
      A      CCC+/Watch Neg     CCC+     86.14


N2H2 INC: Balance Sheet Insolvency Widens to $1.9MM at Dec. 31
--------------------------------------------------------------
N2H2, Inc. (OTC Bulletin Board: NTWO.OB), a global Internet
monitoring and filtering company, announced financial results
for its first quarter ended December 31, 2002. Revenue was $3.0
million for the three months ended December 31, 2002, an
increase of 5 percent over 2001's first quarter results. For the
first time in company history, N2H2 was cash flow positive for
two consecutive quarters.

Operating expenses were $3.5 million for the quarter ended
December 31, 2002, an improvement over the $4.6 million in
expenses during 2001's first quarter. Net loss for the quarter,
including depreciation and amortization, was the lowest in
company history at $429,000, a 74 percent reduction from the net
loss during last year's first quarter of $1.7 million.

N2H2, Inc.'s December 31, 2002 balance sheet shows a working
capital deficit of about $2 million, and a total shareholders'
equity deficit of about $1.9 million.

"We began the fiscal year with a solid quarter, were cash flow
positive for the second consecutive quarter and continued our
steady progress toward profitability," said Philip Welt,
president and CEO of N2H2.  "During the last 18 months, we have
made important changes to our sales strategy by establishing a
new line of software-only solutions that are sold through a
full-line distributor as well as security-focused resellers. It
took time for this strategy to work, but 63 percent of all
billings for the quarter came from our software-only products,
so we believe that these changes have taken hold."

Welt added, "While we have dramatically reduced expenses, this
has only increased our focus on what matters most to our
customers, as independent laboratory tests have concluded that
N2H2 has the best database in the industry for filtering
pornography."

In December the Kaiser Family Foundation published a study in
the prestigious Journal of the American Medical Association,
which found that N2H2 was superior at blocking pornography to
all our major competitors, including Websense, SurfControl,
SmartFilter, Symantec, and 8e6 Technologies. These findings
confirm the results of the Department Of Justice/eTesting Labs
study last year."

Among the highlights for the quarter:

     -- Increased our presence in the enterprise market by adding
corporate accounts, including Syncrude, Canada's largest energy
producer.

     -- Continued our growth in international markets by signing
a large deal through Unisys Australia to provide filtering for
1.2 million users in Australia.

     -- Broadened the availability of our software with a new
filtering solution for Netopia, a leading supplier of broadband
equipment, software and services for carriers and service
providers.

     -- Strengthened our management team with the addition of
Richard D. Weisberg as vice president of sales.  Weisberg is
responsible for overall sales for the company, including N2H2's
resellers and distributors. Weisberg brings 20 years of
experience in sales and sales management in the software
industry.

"The first quarter results show that we are making progress
toward our goal of becoming profitable -- revenues increased
again, and expenses were down for the fourth straight quarter,"
said Paul Quinn, CFO of N2H2.  "We came within $430,000 of being
profitable.  N2H2 is now a lean, efficient company that we
believe is poised for growth and profits."

N2H2 is a global Internet content filtering company. N2H2
software helps customers control, manage and understand their
Internet use by filtering Web content, monitoring Internet
access and delivering concise reports on user activity. These
safeguards enable organizations of any size to limit potential
legal liability, increase user productivity and optimize network
bandwidth.

N2H2's Bess and Sentian product lines are powered by N2H2's
premium-quality filtering database -- a list consistently
recognized by independent and respected third-parties as the
most effective in the industry. Based in Seattle, WA and serving
millions of users worldwide, N2H2's software products are Cisco
Verified, Microsoft Gold Certified and Check Point OPSEC
compliant and are available for major platforms and devices.
Additional information is available at http://www.n2h2.com


NATIONAL CENTURY: US Trustee Balks at Bricker's Engagement
----------------------------------------------------------
On behalf of Saul Eisen, the U.S. Trustee for Region 9, Dean
Wyman, Esq., Senior Trial Attorney, at the Office of the U.S.
Trustee, in Cleveland, Ohio, observes that National Century
Financial Enterprises, Inc., and its debtor-affiliates disclosed
that Bricker & Eckler has acted as legal counsel to Lance K.
Poulsen and Barbara L. Poulsen, NCFE officers, in three pending
matters.  In the disclosure, Bricker & Eckler is noted to be
withdrawing from its representation of Mr. Poulsen in those
matters.

The Debtors also reported that they made several payments to
Bricker & Eckler in November 2002:

     --$50,000 on November 4, 2002,
     --$50,000 on November 5, 2002,
     --undisclosed amount on November 4, 2002, and
     --$50,000 on November 15, 2002.

Bricker & Eckler applied all of these payments, Mr. Wyman adds,
except for the last $50,000 payment, which is held as a
retainer. Bricker & Eckler also holds a prepetition claim for
$258,772.

Bricker & Eckler seeks to perform services that are broad in
nature, that directly impact the administration of the case, and
that involve bankruptcy issues.  Consequently, Mr. Wyman notes,
the Debtors' application to employ Bricker & Eckler is to be
judged under the standards of Section 327(a) of the Bankruptcy
Code.  Section 327 mandates that the legal counsel should be
disinterested.  Hence, Mr. Wyman contends, Bricker & Eckler
cannot be disinterested because it has rendered legal services
prepetition to the Debtors' insiders.  The services were
described as "estate planning" and litigation-related, which may
carry broad import.

The Poulsens are at the center of this bankruptcy.  It may be
expected that the Poulsens provided confidential financial
information to Bricker & Eckler as part of legal services
related to estate planning.  The monetary value to the Debtors
and creditors of any information contained in Bricker & Eckler's
legal files maintained for the Poulsens cannot be evaluated.

As counsel, Bricker & Eckler has a duty of loyalty to the
Poulsens as well as professional and legal obligations to
maintain the confidences and secrets of the Poulsens.  Because
of these relationships, Mr. Wyman points out, it is highly
questionable whether Bricker & Eckler can act independently in
the best interests of the estates.  Mr. Wyman asserts that there
is too great a risk that its judgment will be colored by its
past professional obligations to the Poulsens.

A law firm holds an interest adverse to the estate where it has
received potentially preferential payments from a debtor.
Bricker & Eckler received prepetition payments for $175,000 on
the eve of the bankruptcy filing.  Bricker & Eckler applied
$125,000 of these payments.  At that time, the Debtors owed
Bricker & Eckler more than $200,000.  Consequently, a
substantial issue raises whether the receipt and application of
payments of $125,000 on the eve of filing constituted avoidable
preferences. This creates an adverse interest between the
estates and Bricker & Eckler.

Moreover, the Debtors have sought to employ the Jones Day firm
as general bankruptcy counsel.  The U.S. Trustee is concerned
that the proposed services to be rendered by Bricker & Eckler
may duplicate the services provided by Jones Day.

The Debtors imply they and Jones Day will coordinate the
services to be rendered by Bricker & Eckler.  However, this
proposal is general, and does not clearly address who will be
providing direction to counsel, whether Jones Day or Bricker &
Eckler.

For these reasons, the U.S. Trustee contends that Bricker &
Eckler is not disinterested and holds interests adverse to the
estates.  Accordingly, Mr. Eisen asks the Court to deny the
Debtors' application. (National Century Bankruptcy News, Issue
No. 6; Bankruptcy Creditors' Service, Inc., 609/392-0900)


NET2000 COMMS: Trustee Gets Court Okay to Hire BTB as Consultant
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware put its
stamp of approval on an application by the Chapter 7 Trustee
overseeing the liquidation of Net2000 Communications, Inc., and
its debtor-affiliates, to retain BTB Associates LLC to replace
McShane Group as Liquidation Consultants.

On May 13, 2002, the cases were converted to cases under
chapter 7 of the Bankruptcy Code, and Michael B. Joseph was
appointed Chapter 7 Trustee of the Debtors' Estates.

The Trustee relates that Robert F. Troisio and David Paddy, the
principal consultants who were designated for McShane to serve
the Trustee are no longer employed by McShane.  Instead, Messrs.
Troisio and Paddy will be employed by BTB Associates LLC.

BTB Associates will:

      a. complete the collection of preferential transfers;

      b. provide litigation support to the Trustee's counsel on
         preference litigation to the extent necessary, including
         potential services as an expert witness;

      c. review and analyze claims, making recommendations to the
         Trustee for allowance and objection to various claims;

      d. meet with and advise the Trustee and/or his counsel on
         matters concerning case administration that require its
         specific review; and

      e. render such other assistance as the Trustee and his
         counsel may deem appropriate.

The Trustee agreed to pay BTB its customary hourly rates:

           Robert F. Troisio          $225 per hour
           David Paddy                $200 per hour
           Clerical                   $ 45 per hour

Mr. Troiso's billing rate is anticipated to increase to $250 per
hour after July 2003.

Net2000 Communications, Inc., providers of state-of-the-art
broadband telecommunications services to high-end customers,
obtained Court approval to convert these cases to chapter 7
Liquidation proceedings on May 13, 2002. Michael G. Wilson, Esq.
and Jason W. Harbour, Esq., at Morris, Nichols, Arsht & Tunnell,
represent the Debtors as they wind up their operations.


NEXT LEVEL COMMS: Appeals Nasdaq Panel's Delisting Determination
----------------------------------------------------------------
Next Level Communications (Nasdaq:NXTV) requested a hearing
before a Nasdaq Listing Qualifications Panel in order to appeal
a delisting notification the Company received from Nasdaq
regarding the continued trading of the Company's common stock on
The Nasdaq National Market.

The delisting proceedings will be stayed and the Company's
common stock will continue to be listed on The Nasdaq National
Market pending resolution of this appeal. There can be no
assurance that the Panel will grant the Company's request for
continued listing on The Nasdaq National Market.

On January 17, 2003, Next Level received notification from
Nasdaq that the Company's common stock will be delisted from The
Nasdaq National Market because the Company did not comply with
Nasdaq's minimum bid price and stockholders' equity
requirements. The Company initially received notification from
Nasdaq on October 14, 2002 that, under Marketplace Rule
4450(a)(5), the bid price of the Company's common stock had
closed at less than $1.00 per share for 30 consecutive trading
days. Next Level was then not able to regain compliance in
accordance with Marketplace Rule 4450(e)(2) during the 90-day
period ending January 13, 2003. In addition, Nasdaq has notified
the Company that it is deficient in the minimum stockholders'
equity requirement of $10 million under Marketplace Rule
4450(a)(3).

With respect to the $1.00 per share minimum bid price deficiency
noted above, as of the close of the market on January 24, 2003,
the closing bid price of the Company's common stock exceeded
$1.00 per share for eight consecutive days. With respect to the
$10 million stockholders' equity requirement, the Company
believes that stockholders' equity as of December 31, 2002 was
greater than $10 million, and the Company is formulating plans
to maintain that level going forward.

If Next Level's appeal is unsuccessful, the Company may
nevertheless apply to transfer its common stock to The Nasdaq
SmallCap Market. Although there can be no assurances that it
will do so, if Nasdaq approves the transfer to the SmallCap
Market, shares of Next Level common stock would continue to be
listed under their existing ticker symbol, NXTV. As with The
Nasdaq National Market, the SmallCap Market requires listed
companies to have a minimum closing bid price of $1.00 per
share. As of the close of the market on January 24, 2003, the
closing bid price of the Company's common stock exceeded $1.00
per share for eight consecutive days. On the SmallCap Market,
however, Next Level would be eligible for additional grace
periods, ending as late as October 11, 2003, to achieve
compliance with the minimum closing bid requirements.

If during these SmallCap grace periods, the closing bid price of
Next Level's common stock is $1.00 per share or more for 30
consecutive trading days, the Company will have regained
compliance with Nasdaq's minimum bid price requirements and may
also be eligible to transfer its common stock back to The Nasdaq
National Market, provided that the Company has maintained
compliance with other continued listing requirements on that
market.

Next Level is a world leader in integrated broadband access
platforms for delivering any combination of voice, high-speed
data and multi-stream digital video services into the home or
office. Next Level offers a unified multi-service, multi-band
platform that lets communications service providers enter a more
profitable broadband market segment by delivering a virtual
communications and entertainment center over existing copper
telephone lines. Next Level's highly scalable networking
products, management tools and support assistance allow
communications service providers to deliver a range of
subscriber services, and realize significant new revenue
streams. Founded in 1994 and headquartered in Rohnert Park,
Calif., the company has deployed its state-of-the-art systems
for more than 100 communications service providers worldwide.
For additional information, visit http://www.nlc.com/

Next Level Communications' September 30, 2002 balance sheet
shows a total shareholders' equity deficit of about $58 million,
as compared to a deficit $8 million recorded at December 31,
2001.


NEXTWAVE: It's Over & U.S. Supreme Court Says FCC Was Wrong
-----------------------------------------------------------
The United States Supreme Court handed down its decision
yesterday morning to answer the question of whether Federal
Communications Commission regulations rules trump the Bankruptcy
Code or whether the Bankruptcy Code trumps FCC regulations.
NextWave, operating as a chapter 11 debtor-in-possession, and
its creditors prevail, the High Court said in its 8-1 ruling,
and the Government, having violated 11 U.S.C. Sec. 525, loses.

The U.S. Supreme Court considered two appeals captioned:

       * Federal Communications Commission v. NextWave Personal
         Communications Inc., et al., Case No. 01-653, on appeal
         from the United States Court of Appeals for the District
         of Columbia Circuit, and

       * Arctic Slope Regional Corporation, et al. v. NextWave
         Personal Communications Inc., et al., Case No. 01-657,
         on appeal from the United States Court of Appeals for
         the District of Columbia Circuit.

                     Years of Litigation

As widely reported, NextWave bought certain wireless spectrum
licenses at an FCC auction for $4+ billion in 1996, but
defaulted on payment.  NextWave then sought chapter 11
protection, and initiated an adversary proceeding asserting
fraudulent conveyance claims under 11 U.S.C. Sec. 544 to knock
the FCC's $4.7 billion secured claim down to $1 billion.  That
effort failed when appeals reached the Second Circuit.

On the heels of that Second Circuit ruling, NextWave filed a
plan of reorganization that proposed to pay the FCC the $4+
billion plus interest plus late fees.

The FCC balked at that plan, seized NextWave's licenses and
proceeded to re-auctioned them for a whopping $16 billion.
NextWave petitioned the FCC to reconsider the license
cancellation, but that appeal fell on deaf ears.  NextWave then
turned to the United States Court of Appeals for the D.C.
Circuit two years ago, arguing that the cancellation was
arbitrary and capricious, and contrary to law, in violation of
the Administrative Procedure Act, 5 U. S. C. Sec. 706, and the
Bankruptcy Code.  NextWave won a ruling that the FCC's seizure
was improper and that the FCC violated the Bankruptcy Code's
automatic stay provisions.  The FCC, in turn, appealed to the
U.S. Supreme Court.

                         The Attorneys

Thomas G. Hungar, Esq., at Gibson Dunn & Crutcher, represented
NextWave and Jonathan Saul Franklin, Esq., at Hogan & Hartson
represented Arctic Slope before the U.S. Supreme Court.

                          The Opinion

A full-text copy of the opinion is available for free at
http://www.supremecourtus.gov/opinions/02pdf/01-653.pdf

                    The 8-1 Majority View

Justice Antonin Scalia, writing for the majority, says that 11
U.S.C. Sec. 525 is crystal clear on its face:

      "[A] governmental unit may not . . . revoke . . . a
      license . . . to . . . a person that is .. . a debtor
      under this title . . . solely because such . . . debtor
      . . . has not paid a debt that is dischargeable in the
      case under this title. . . ."

No one disputes that the Commission is a "governmental unit"
that has "revoke[d]" a "license," nor that NextWave is a
"debtor" under the Bankruptcy Code.  The Government argues that
the FCC didn't revoke NextWave's licenses "solely because" of
nonpayment, and that, in any event, NextWave's obligations are
not "dischargeable" "debt[s]" within the meaning of the
Bankruptcy Code.  The Government additionally argues that a
contrary interpretation would unnecessarily bring Sec. 525 into
conflict with the Communications Act.

"We find none of these contentions persuasive," the majority
says, holding that Sec. 525 of the Bankruptcy Code prohibits the
FCC from revoking licenses held by a debtor who failures to make
timely payments to the FCC for the purchase of a license.

"The whole issue before us," Justice Scalia says, "can be
described as asking what the Bankruptcy Code's promise of a
'fresh start' consists of."

                   Justice Breyer's Dissent

Justice Stephen G. Breyer, nominated by President Clinton in
1994, disagrees with his colleagues "just read what Sec. 525
says" approach.  "It is dangerous," Justice Breyer writes, "to
rely exclusively upon the literal meaning of a statute's words
divorced from consideration of the statute's purpose."  Justice
Breyer suggests that the FCC should have been allowed to
repossess the licenses pledged as collateral to secure repayment
of the original $4+ billion . . . just as any other private
commercial seller, car salesman, residential home developer, or
appliance company with a valid, perfected and enforceable
security interest can repossess its collateral.  "Why should the
government (state or federal), and the government alone, find it
impossible to repossess a product, namely, a license, when the
buyer fails to make installment payments," Justice Breyer asks?


NEXTWAVE: Company Cheers in Response to Supreme Court Decision
--------------------------------------------------------------
The United States Supreme Court said that federal bankruptcy law
protected NextWave Telecom Inc. from having its PCS licenses
cancelled by the Federal Communications Commission while the
company was successfully reorganizing its business affairs in
Chapter 11 proceedings. The Court's decision, announced in an
opinion filed by Justice Scalia, upholds a June 2001 ruling to
the same effect by the U.S. Court of Appeals for the District of
Columbia Circuit and denies requests for reversal filed by the
FCC and two of NextWave's wireless competitors, Arctic Slope
Regional Corporation and VoiceStream Communications (Nos. 01-
653, 01-657).

"We are extremely pleased with the decision because it clears
the way for us to move forward and complete our reorganization,"
said NextWave Chairman and CEO Allen Salmasi. "This has been a
difficult and arduous process for NextWave and its creditors and
shareholders, as well as for the government. Everyone will
benefit from achieving finality, putting the litigation behind
us, and getting the licenses into use as quickly as possible to
provide service to the public and help fuel economic recovery.
We look forward to a constructive working relationship with the
FCC as those goals are finally achieved."

NextWave already has paid the government over $500 million for
licenses on which the company was the high bidder at FCC
spectrum auctions. During the period 1999-2001, NextWave
submitted to the bankruptcy court overseeing its reorganization
three fully financed plans providing for complete payment of all
the company's debts, including all spectrum payments to the
government, but implementation of each of those plans was
deferred due to continued litigation. Using funds raised from
private sources, the company deployed an initial network of
wireless facilities during 2001-2002 in all 95 markets in which
it is licensed to provide service.

                        About NextWave

NextWave Telecom Inc. was formed in 1995 to provide high-speed
wireless Internet access and voice communications services to
consumer and business markets.  For more information about
NextWave, visit http://www.nextwavetel.com


NORTH STAR EXPLORATIONS: Voluntary Chapter 7 Case Summary
---------------------------------------------------------
Lead Debtor: North Star Exploration, Inc.
              12600 West Colfax Avenue, Suite C-500
              Lakewood, CO 80215-3735

Bankruptcy Case No.: 03-11023

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      North Star Zeus                            03-11025
      Blue Star Sustainable Technologies Corp.   03-11026
      North Star Platinum, Inc.                  03-11029

Type of Business: The Debtors are affiliates of EMEX Corp.

Chapter 7 Petition Date: January 22, 2003

Court: District of Colorado

Judge: Howard R. Tallman

Debtors' Counsel: Donald Salcito, Esq.
                   Perkins Cole LLP
                   1899 Wynkoop St.
                   Suite 700
                   Denver, CO 80202
                   Tel: 303-291-2300

Chapter 7 Trustee: Tom H. Connolly
                    287 Century Cir.
                    Suite 200
                    Louisville, CO 80027
                    Tel: 303-661-9292

                               Total Assets:      Total Debts:
                               -------------      ------------
North Star Corp.                 $1,908,649       $20,136,710
Blue Star Corp.                  $1,513,392        $7,576,500
North Star Zeus                     $17,842          $115,739
North Star Platinum                  $5,757          $250,778


ORYX TECHNOLOGY: Capital Insufficient to Meet Cash Requirements
---------------------------------------------------------------
Oryx Technology Corporation does not have sufficient capital to
meet its anticipated working capital requirements through fiscal
year 2004. The Company must raise additional capital through
public or private  financings or other arrangements in order to
sustain its business.  In addition, the Company did not meet
Nasdaq's minimum stockholders' equity requirement for the
quarter ended November 30, 2002. Consequently, on January 10,
2003, the Company's stock was delisted from The Nasdaq SmallCap
Market and is now traded on the OTC Bulletin Board.  The Company
indicates that it is actively exploring financing opportunities,
however, there can be no assurance that such transactions can be
effected in time to meet the Company's needs, if at all, or that
any such transaction would be on terms acceptable to the Company
or in the best interest of the Company's stockholders.  If the
Company cannot raise additional capital, when needed and on
acceptable terms, it will not be able to achieve its business
objectives and continue as a going concern. As a result of these
circumstances, the Company's independent accountants' opinion
with respect to its consolidated financial statements included
in its Form 10-KSB for the year ended February 28, 2002 includes
an explanatory paragraph indicating that these matters raise
substantial doubt about the Company's ability to continue as a
going concern.

The Company is a technology licensing and investment and
management services company with two primary focuses: collecting
royalties for its SurgX technology from its SurgX licensees,
Cooper Electronics  Technologies, Inc. and IRISO Electronics
Company, Ltd.; and maintaining its current investment and
providing management services primarily to one portfolio
company, S2 Technologies, through its investment and management
services company, Oryx Ventures, LLC.

For the quarter ended November 30, 2002, revenues decreased by
$40,000, or 13%, from $298,000 for the quarter ended November
30, 2001, to $258,000 ended for the quarter November 30, 2002.
Revenues for the nine months ended November 30, 2002 decreased
$154,000, or 29%, from $525,000 for the nine months ended
November 30, 2001 to $371,000 for the nine months ended
November 30, 2002.  The decrease in revenue for the three  and
nine month periods ended November 30, 2002 is primarily
attributed to a decrease in the recognition of SurgX royalty
revenue from IRISO and management services fees generated from
Oryx Ventures.  In the quarter ended November 30, 2002, this
decrease in revenue was partially offset by an increase in
revenue recognized for $70,000 one time final royalty payment
received from OAMI for Oryx' Intragene technology.  Future
revenue will be based solely upon the successful sales,
marketing, manufacturing and development efforts of its SurgX
licensees and to a lesser extent Oryx Ventures' ability to
charge fees for management services.  To date, sales of SurgX
products by its licensees are significantly lower than expected
and there can be no assurances that sales of SurgX products will
increase in the  future, if at all.  In addition, due to the
lower than expected sales of SurgX products, there can be no
assurances that the Company's licensees will continue to invest
in SurgX related sales, marketing and research and development
activities.

Working capital decreased by $1,510,000 from a surplus of
$2,025,000 at February 28, 2002 to a surplus of  $515,000 at
November 30, 2002.  Cash and cash equivalents decreased by
$1,481,000 from $2,053,000 at February 28, 2002 to $572,000 at
November 30, 2002.  This decrease in cash and cash equivalents
for the nine months ended November 30, 2002 is primarily due to
the Company's investment of $938,000 in S2  Technologies'
Series B Preferred Stock financing and from net losses from
operations.

As stated above, the Company does not have sufficient capital to
meet its anticipated working capital requirements through fiscal
year 2003. It must raise additional capital through public or
private  financings or other arrangements in order to have
sufficient cash to continue its business operations.  Due to
recent cost reductions based upon its internal forecast and
assumptions, the Company currently estimates that it will have
to cease operations if it does not raise additional funding on
or before July 2003.  In addition, the Company's stock has been
delisted from the Nasdaq SmallCap Market and is now being traded
on the OTC Bulletin Board.  Delisting of its common stock will
make it more difficult for the Company to issue stock to raise
additional funding. If Oryx cannot raise additional capital on
or before July 2003 on acceptable terms, it will not be able to
achieve its business objectives and continue as a going concern.


OWENS CORNING: Plan to Create FB Asbestos Property Damage Trust
---------------------------------------------------------------
The Fibreboard Asbestos Property Damage Trust will be created,
under Owens Corning and its debtor-affiliates' proposed Plan of
Reorganization, effective as of the later of:

   -- the date the FB Asbestos Property Damage Trustees have
      executed the FB Asbestos Property Damage Trust Agreement;
      and

   -- the Effective Date.

The FB Asbestos Property Damage Trust is intended to be a
"qualified settlement fund" within the meaning of Treasury
Regulation Section 1.46813-1, et seq., promulgated under Section
468B of the Internal Revenue Code.  The purpose of the FB
Asbestos Property Damage Trust will be to:

   -- process, liquidate, and pay all FB Asbestos Property Damage
      Claims in accordance with the Plan, the FB Asbestos
      Property Damage Trust Distribution Procedures, and the
      Confirmation Order; and

   -- preserve, hold, manage, and maximize the assets of the FB
      Asbestos Property Damage Trust for use in paying and
      satisfying FB Asbestos Property Damage Claims.

On the Confirmation Date, the Bankruptcy Court will appoint the
individuals selected jointly by the Plan Proponents, to serve as
the FB Asbestos Property Damage Trustees for the FB Asbestos
Property Damage Trust.

On the Effective Date, or as soon as is practicable, at the sole
cost and expense of the FB Asbestos Property Damage Trust and in
accordance with written instructions provided to the Reorganized
Debtors by the FB Asbestos Property Damage Trust, the
Reorganized Debtors will transfer and assign to the FB Asbestos
Property Damage Trust copies of all books and records of the
Debtors that pertain directly to FB Asbestos Property Damage
Claims that have been asserted against the Debtors and the
Fibreboard Insurance Settlement Trust.  The Debtors will ask
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 these books and records.

On the later of the Effective Date and the date by which all the
FB Asbestos Property Damage Trustees have executed the FB
Asbestos Property Damage Trust Agreement, the Reorganized
Debtors will transfer and assign to the FB Asbestos Property
Damage Trust the FB Asbestos Property Damage Insurance Assets.

In consideration for the property transferred to the FB Asbestos
Property Damage Trust, and in furtherance of the purposes of the
FB Asbestos Property Damage Trust and the Plan, the FB Asbestos
Property Damage Trust will assume all liability and
responsibility for all FB Asbestos Property Damage Claims, and
the Reorganized Debtors will have no further financial or other
responsibility or liability.  The FB Asbestos Property Damage
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 FB
Asbestos Property Damage Insurance Assets as a result of FB
Asbestos Property Damage Claims, asbestos-related property
damage claims against Persons insured under policies included in
the FB Asbestos Property Damage Insurance Assets by reason of
vendors' endorsements, or under the indemnity provisions of
settlement agreements that the Debtors made with any insurers
prior to the Confirmation Date to the extent that those
indemnity provisions relate to FB Asbestos Property Damage
Claims, and the Reorganized Debtors will have no further
financial or other responsibility or liability; provided,
however, that the liability of the FB Asbestos Property Damage
Trust will be limited to the extent of the benefits of the
Trust, so that the Trust may elect to terminate the liability in
the event that the Trustees determine the benefits of
maintaining the insurance policies are no longer worth the
costs. (Owens Corning Bankruptcy News, Issue No. 44; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


PRECISION SPECIALTY: Will File Monthly Operating Reports Soon
-------------------------------------------------------------
As previously reported in the Trouble Company Reporter on
November 14, 2002, the United States Trustee wanted Precision
Specialty Metals, Inc.'s chapter 11 case be converted to a case
under Chapter 7 of the Bankruptcy Code.  In his Motion, the UST
complained to the U.S. Bankruptcy Court for the District of
Delaware that the Debtor has not filed monthly operating reports
since May 2002 through September 2002.  Precision still hasn't
. . . but says it will very soon.

The Debtor reminds the Court that that it sold substantially all
of its assets to Brady Investment Company, Inc.  As a result,
the Debtor is no longer operating its business.

Nevertheless, the Debtor assures the Court that it is in the
process of compiling the necessary information to compile the
monthly operating reports.  The Debtor further anticipates that
its reporting obligations will be current as soon as it is able
to collect various pieces of information, including bank
statements for the relevant time period, from Brady.  The Debtor
has contacted Brady and has asked for the information.  However,
the Debtor remains uncertain whether the information is correct
and sufficient to complete the operating reports.

The Debtor assures the UST and the Court that it will continue
to endeavor to complete these reports and will file the reports
as soon as possible.

Precision Specialty Metals was a specialty steel conversion mill
engaged in re-rolling, slitting, cutting and polishing stainless
steel and high-performance alloy hot band into standard or
customized finished thin-gauge strip and sheet product.  The
Company filed for Chapter 11 protection on June 16, 2001, in the
U.S. Bankruptcy Court for the District of Delaware.  Laura Davis
Jones, Esq., at Pachulski, Stang, Ziebl, Young & Jones P.C.,
represents the Debtor.


PREMCOR INC: Caps Price of 12.5 Million-Share Public Offering
-------------------------------------------------------------
Premcor Inc., (NYSE: PCO) priced its common stock offering of
12,500,000 shares at a public offering price of $20.00 per
share.  All of the shares constituting the offering are being
sold by Premcor Inc.  The common stock is expected to be
delivered on Wednesday, January 29, 2003, subject to customary
closing conditions.

Premcor expects to receive estimated net proceeds of $239.0
million from the offering and intends to use the net proceeds to
finance, in part, the recently announced acquisition of the
Williams Memphis refinery and related supply and distribution
assets located in and around Memphis, Tennessee from The
Williams Companies.

The offering is being lead-managed by Morgan Stanley as sole
bookrunner. In connection with the offering, Premcor has granted
the underwriters an option for a period of 30 days to purchase
up to an additional 1,875,000 shares of common stock to cover
over-allotments.

The public offering is being made by means of a prospectus, a
copy of which can be obtained from Morgan Stanley at 1585
Broadway, New York, NY 10036.  This press release shall not
constitute an offer to sell or a solicitation of an offer to
buy, nor shall there be any sale of these securities in any
state or jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under
the securities laws of any such state or jurisdiction.

Premcor Inc., is one of the largest independent petroleum
refiners and marketers of unbranded transportation fuels and
heating oil in the United States.

As reported in Troubled Company Reporter's December 4, 2002
edition, Fitch Ratings affirmed the ratings of Premcor USA,
Premcor Refining Group and Port Arthur Finance Corp., in the
low-B ranges.  Fitch says the Rating Outlook for the debt of
PUSA, PRG and PAFC remains Positive.


PREMCOR REFINING: S&P Affirms Lower-B Level Ratings
---------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on
independent petroleum refiner Premcor Refining Group Inc.,
(PRG; BB-/Stable/--) and parent company Premcor USA Inc.,
(BB-/Stable/--) and at the same time, assigned its 'BB-' rating
to PRG's proposed $400 million senior unsecured notes due 2010
and 2013. The outlook is stable.

Premcor, based in Old Greenwich, Connecticut, has about $1.045
billion of debt outstanding, pro forma for its acquisition of
the Williams Companies Inc.'s (B+/Watch Neg/--) Memphis,
Tennessee refinery for about $515 million (including $200
million for inventory at current prices) expected to close in
first-quarter 2003.

"The proceeds of the notes offering, combined with expected
equity proceeds of at least $250 million, will be used to
finance the Memphis refinery acquisition and refinance $240
million of PRG's floating rate loans due 2003 and 2004 and $42
million of Premcor USA's subordinated notes due 2009," noted
Standard & Poor's credit analyst Steven K. Nocar.

In connection with the acquisition, Premcor intends to enter
into a two-year crude oil supply and product off-take agreement
with Morgan Stanley Capital Partners under which MSCP will own
the crude and product inventories associated with the Memphis
acquisition. This agreement will allow Premcor to defer initial
financing of the inventory for the Memphis refinery and avoid
the need for Premcor to issue letters of credit to support
purchases of crude inventory.

The ratings on Premcor reflect its aggressive debt leverage and
the company's position as a midsize, independent petroleum
refiner operating in a very competitive, erratically profitable
industry. The business is burdened by excess capacity and high
fixed-cost requirements for refinery equipment and environmental
regulation compliance.

Mitigating these factors somewhat are Premcor's ability to
process high volumes of heavy-sour crude at its Port Arthur,
Texas facility, which should lead to improved profitability over
the intermediate term and maintenance of cash balances, which
provide the company with liquidity during cyclical troughs.

Premcor is expected to continue its expansion through selective
acquisitions of refineries that geographically complement its
existing assets and, depending on margin conditions, undertake
discretionary capital expenditure projects to expand existing
refinery capacity. Standard & Poor's believes that Premcor will
continue to finance such transactions conservatively. However,
somewhat limiting Premcor's growth strategy is the company's
high level of capital expenditures over the next four years.

The stable outlook on Premcor reflects the expectation that
Premcor will maintain an appropriate liquidity position and
financial profile for its rating. Standard & Poor's believes
that Premcor's management is committed to improving its credit
ratings, but, without further deleveraging transactions,
positive ratings actions will be highly dependent on the
company's ability to comfortably meet its expected peak capital
expenditures.

Premcor USA Inc.'s 11.500% bonds due 2009 (PREM09USR1) are
trading at about 99.5 cents-on-the-dollar, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=PREM09USR1
for real-time bond pricing.


PRUDENTIAL STRUCTURED: Fitch Keeps Watch on Two BB- Note Classes
----------------------------------------------------------------
Fitch Ratings placed the following classes of Prudential
Structured Finance CBO I on Rating Watch Negative:

Prudential Structured Finance CBO I:

      --Class A-2L notes 'A-';

      --Class B-1L notes 'BBB-';

      --Class B-1 notes 'BBB-'

      --Class B-2L notes 'BB-';

      --Class B-2 notes 'BB-'.

Prudential Structured Finance CBO I is a collateralized debt
obligation managed by Prudential Investment Corporation, a
wholly-owned subsidiary of The Prudential Insurance Company of
America. The CDO was established in October 2000 to issue $306.7
million in debt and equity securities.

Fitch takes these actions after a review of the performance of
the transaction. The rating actions are based on the decreasing
credit quality of the portfolio collateral. The transaction is
currently failing its Fitch weighted-average rating factor test
with an actual WARF of 33.86 compared to a WARF trigger of 33.0.
The portfolio contains a number of securities whereby default is
probable, although no defaults have occurred to date. In
particular, the portfolio contains exposure to a number of
distressed assets including mutual fund fee securitizations
(8.6%) and collateralized debt obligations (7.7%).

In addition, the current interest rate environment has placed
increased pressure on excess spread. Fitch is reviewing the
impact of these factors and the adequacy of available credit
enhancement.

Fitch is currently reviewing the performance of the transaction
in detail, and will evaluate the impact of the credit migration
in due course pending completion of the valuation process.
Further action will be taken when the analysis has been
completed.


RIBAPHARM INC: Names Kim D. Lamon as New President and CEO
----------------------------------------------------------
Ribapharm Inc., (NYSE: RNA) announced that its board has elected
the following individuals to serve as directors effective
immediately: Daniel J. Paracka, Santo J. Costa, Gregory F. Boron
and James J. Pieczynski, CPA.  Mr. Paracka was also elected to
serve as Chairman.  The new directors join Roberts A. Smith,
Ph.D., who continues in his role as a Ribapharm director.

The Ribapharm board also announced the appointment of Kim D.
Lamon, M.D., Ph.D., to the position of President and Chief
Executive Officer.  Dr. Lamon has more than 20 years of
experience in the pharmaceutical, biotechnology and diagnostics
industries, where his teams have been responsible for the
development and approval of numerous drugs, including several
whose current individual sales exceed $1 billion.  Dr. Lamon
most recently served as President of SciPharma Consulting, LLC,
a company that provides consulting services to healthcare
companies.  Dr. Lamon announced that he will be resigning from
the board of ICN Pharmaceuticals, where he currently serves as
a director.

Ribapharm noted that its newly reconstituted board has
considerable depth in the pharmaceutical, healthcare and
biotechnology industries, and significant experience with legal,
financial and scientific issues.  The new directors have no
prior affiliation with Ribapharm or ICN.

Dr. Lamon commented: "I am honored to be joining Ribapharm,
whose outstanding team of scientists have been responsible for
the development of ribavirin, the preeminent medicine for
hepatitis C.  Our strategy going forward will be to leverage and
grow our discovery and development expertise to gain approval of
unique medicines of value and other exciting new compounds."

Mr. Paracka has more than 20 years of pharmaceutical experience
and an extensive financial controls and management background.
He has served on the boards of several pharmaceutical companies,
including chairman of the board for Lidak Pharmaceuticals, and
chairman of the finance and executive committees for Celotex
Corp.  Mr. Paracka's management experience includes senior
positions in Rhone-Poulenc Rorer, where he served as Senior Vice
President and Chief Financial Officer; Rorer Group, where he
served as Senior Vice President of Finance; and Revlon
Healthcare Group (comprised of nine healthcare companies), where
he served as Vice President and Controller.

Mr. Costa has more than 30 years of business experience,
including 23 years in the pharmaceutical industry.  He recently
served as Vice Chairman of Quintiles Transnational Corp, after
having spent several years as President and Chief Operating
Officer.  He was previously Senior Vice President,
Administration and General Counsel of Glaxo Inc. where he also
served on the company's board of directors.  Mr. Costa sits on
the boards of several pharmaceutical and healthcare companies
and has lectured on food and drug law issues and a wide variety
of legal and policy issues affecting the pharmaceutical
industry.

Mr. Boron has more than 15 years of experience in the healthcare
and pharmaceutical industries, having recently been a partner at
Boron and LePore Group Companies, a New Jersey-based healthcare
communications, marketing and pharmaceutical services company.
There, he also held several senior management positions,
including Chief Operating Officer, Chief Financial Officer and
Executive Vice President of Marketing and Sales.  Prior to his
extensive business experience, Mr. Boron had a distinguished
military career, having served as a major in the U.S. Army and
on the faculty of the U.S. Military Academy at West Point and
the Royal Military College at Sandhurst, England.

Mr. Pieczynski is a certified public accountant and has nearly
20 years of financial control and management experience, having
served in senior capacities in the healthcare and real estate
industries, including President, Chief Financial Officer and
Chief Strategic Officer of LTC Properties, Inc. He has also
served on the board of directors at LTC Properties.
Mr. Pieczynski is currently the Director of Long-Term Care
Investments for CapitalSource Finance.

Dr. Smith has more than 40 years of experience in the
pharmaceutical and biotech industries and is a preeminent
scientist in the field of virology.  He is one of the original
scientists who developed the ribavirin molecule and one of the
pioneers in the field of nucleoside analog exploration.
Dr. Smith was previously President of Viratek, Inc, and Vice-
President, Research and Development of SPI Pharmaceuticals,
Inc., both past subsidiaries of ICN.  Dr. Smith also had an
illustrious academic career and was Professor of Chemistry and
Biochemistry at the University of California at Los Angeles for
more than 11 years.  Dr. Smith has continued as a senior
scientific advisor and board member since the inception of
Ribapharm.

Dr. Lamon is currently a director of Pan Pacific
Pharmaceuticals, Inc., and is on the scientific advisory board
of VivoMetrics, Inc.  He also serves as Adjunct Assistant
Professor of Pharmacology at his alma mater, Thomas Jefferson
University School of Medicine.  Prior to founding SciPharma in
1999, Dr. Lamon was Corporate Senior Vice President and Group
President of Covance Clinical and Periapproval Services, where
he had operating responsibility for the worldwide clinical
division of Covance, Inc.  He has held senior research and
clinical positions at Corning Clinical Laboratories, Corning
Life Sciences, Inc., and Rhone Poulenc Rorer (now Aventis, Inc).

Ribapharm, which reported a total shareholders' equity deficit
of about $349 million at September 30, 2002, is a
biopharmaceutical company that seeks to discover, develop,
acquire and commercialize innovative products for the treatment
of significant unmet medical needs, principally in the antiviral
and anticancer areas.


ROWECOM INC: Selling Worldwide Subscription Business to EBSCO
-------------------------------------------------------------
RoweCom, Inc., doing business as RoweCom, Faxon or divine
Information Services, signed a non-binding letter of intent with
EBSCO Industries, Inc., the global leader for the delivery of
integrated information systems and services, for the proposed
purchase of the RoweCom worldwide subscription agent business.
The proposed transaction was also endorsed by the steering
committee of the ad-hoc group of publishers and library
customers of RoweCom. The committee, including the publisher
members the American Institute of Physics, the Association of
Learned & Professional Society Publishers, Elsevier, Oxford
University Press and Wiley, will endeavor to expand the group of
publishers supporting this transaction as they believe the
contemplated agreement is a significant step forward for
customers and publishers.

The proposed transaction is subject to due diligence and
definitive documentation, among other customary conditions to be
satisfied prior to completing the transaction, including
regulatory approval and the like. Additionally, the proposal
will require publishers and libraries to work with EBSCO
regarding the fulfillment of prepaid RoweCom orders. The U.S.
transaction will be implemented through a chapter 11 bankruptcy
filing of RoweCom.

This announcement follows the December 20, 2002 press release by
RoweCom's parent company, divine inc., which indicated that
divine had decided to no longer support the Business. Since late
December there has been considerable concern and uncertainty
among RoweCom's customers and publishers with respect to orders
placed with RoweCom, most of which have not been placed with
publishers. However, a number of publishers had agreed to grace
RoweCom customers while investigations and negotiations ensued
over a possible restructuring of the RoweCom business.

What does this mean for RoweCom customers and publishers if the
transaction is completed?

For customers of RoweCom's European operations, all orders
placed with RoweCom will be fulfilled. The parties intend to
execute definitive purchase documents within 10 days subject to
French regulatory filings as required by French law. divine has
agreed to provide working capital funding for RoweCom's European
operations in the interim. Once the transaction receives French
regulatory approval and the transaction closes, EBSCO will remit
payment to publishers in full. Until that time, EBSCO is asking
publishers to continue to fulfill subscriptions. EBSCO has
already secured participation from the majority of the
publishers and is optimistic the remaining publishers will
agree, now that the situation appears to be clarified.

For customers of RoweCom operations outside Europe (i.e., U.S.,
Canada, Australia, etc.), there are basically three situations:

      (1) For a customer who has paid RoweCom and RoweCom has
          forwarded this payment on to the publishers, the
          customer will receive journals from the publishers.

      (2) For a customer who has not paid RoweCom, the customer
          will receive their journals once orders are confirmed
          to EBSCO. Upon confirmation, EBSCO will make the
          appropriate payment to publishers.

      (3) For a customer who has paid RoweCom and RoweCom has not
          forwarded this payment to the publishers, the customer
          will receive journals from publishers who participate
          in this transaction.

RoweCom, EBSCO and the ad-hoc committee appreciate the continued
consideration and understanding of RoweCom's library customers
during this most difficult period.

RoweCom is a subsidiary of divine, inc. (Nasdaq: DVN). This
press release contains certain forward-looking statements with
respect to RoweCom that are subject to risks and uncertainties.
For example, such risks and uncertainties include the closing of
the transactions summarized herein; the ability of RoweCom to
implement a restructuring plan to maximize the amount realized
for stakeholders; continued cooperation of RoweCom's publishers;
the availability of strategic alternatives for RoweCom; the
adequacy and availability of cash to operate its business;
RoweCom's ability to maintain sufficient cash flow and
liquidity; the availability and accessibility of financing at
affordable levels for RoweCom and the ability of RoweCom to
tightly control expenditures.

EBSCO Industries, Inc., is a global corporation with sales,
service and manufacturing subsidiaries at work in 19 countries
around the world. EBSCO's business interests include information
management services, journal and periodical subscription
services, real estate development, commercial printing and more.
EBSCO, an acronym for Elton B. Stephens Company, is based in
Birmingham, Alabama and employs 4,000 people around the world.
Additional information on EBSCO Industries is available from
http://www.ebscoind.com


SEITEL INC: Noteholder Standstill Agreement Expires Today
---------------------------------------------------------
Seitel, Inc., (NYSE: SEI; Toronto: OSL) and its Noteholders
agreed to extend the date by which an agreement in principle for
the restructuring of the Company's $255 million of Senior Notes
must be reached, until today, January 28, 2003. The Company's
Standstill Agreement with its Noteholders previously had
required an agreement in principle for this restructuring to be
reached by January 24, 2003.

The Company also stated that it continues to keep the New York
Stock Exchange informed of its ongoing discussions with the
Noteholders.

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


SEVEN SEAS: Chapter 11 Trustee Hires Floyd Isgur as Counsel
-----------------------------------------------------------
Ben B. Floyd, Chapter 11 Trustee of the Bankruptcy Estate of
Seven Seas Petroleum, Inc., asks for permission from the U.S.
Bankruptcy Court for the Southern District of Texas, to retain
Floyd, Isgur, Rios & Wahrlich, P.C., as his general bankruptcy
counsel to assist him in performing his duties in the Debtor's
bankruptcy case effective as of January 3, 2003.

The Trustee has also filed an application seeking to retain
Andrews & Kurth, LLP as his special counsel.  Although the two
firms will work closely together in representing the Trustee,
they will not perform duplicative services.  Within their
separate areas of responsibility, the two firms will be required
to coordinate their efforts to ensure consistency and to
implement common strategies and objectives.  Consistent with his
duties as Chapter 11 trustee, the Trustee intends to monitor and
direct the services provided by the two firm to insure they are
in the best interest of the Debtor's estate.

Floyd Isgur will be employed to:

      a. analyze the records of the Debtor and assist the Trustee
         in preparing the financial schedules and statement of
         financial affairs;

      b. analyze and assist the Trustee in proposing a plan of
         reorganization;

      c. assist the Trustee, where necessary, to negotiate and
         consummate non-routine sales of assets of the Estate,
         including sales free and clear of liens, claims and
         encumbrances, and to institute any proceedings related
         thereto;

      d. assist the Trustee, where necessary to negotiate and/or
         prosecute non-routine objections to claims;

      e. prepare, where appropriate, necessary motions,
         applications, answers, orders, reports, and papers in
         connection with the foregoing enumerated services;

      f. perform any and all other legal services for the Trustee
         that the Trustee determines is necessary and appropriate
         after advice and consultation.

Floyd Isgur's billing rates for legal services are:

           Shareholder/Partner       $440 to $300 per hour
           Counsel                   $295 per hour
           Associate                 $230 to $175 per hour
           paralegal                 $110 to $70 per hour

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.


SUN MEDIA: S&P Places Various Low-B Ratings on Watch Negative
-------------------------------------------------------------
Standard & Poor's Ratings Services said its ratings on media
company Quebecor Media Inc., and its subsidiaries, including Sun
Media Corp., and Videotron Ltee, remain on CreditWatch with
negative implications, where they were placed Sept. 16, 2002.

The CreditWatch update follows Standard & Poor's review of Sun
Media's refinancing plan. Following completion of the announced
refinancing at Sun Media, which is Quebecor Media's newspaper
subsidiary, the ratings on Quebecor Media and its subsidiaries,
including the 'B+' long-term corporate credit ratings, will be
removed from CreditWatch and affirmed, with an expected stable
outlook.

At the same time, Standard & Poor's assigned its 'BB-' rating to
Sun Media's proposed bank facility, consisting of a C$75 million
five-year revolving tranche and a US$200 million six-year term
loan tranche, and its 'B-' rating to the company's proposed
US$200 million senior unsecured notes due 2013. Proceeds from
the transactions will be used to refinance Sun Media's existing
bank and senior subordinated indebtedness and to pay a C$220
million dividend to Quebecor Media, of which C$150 million will
be used to reduce debt at Videotron.

The Sun Media refinancing, once completed, will improve Quebecor
Media's consolidated financial flexibility.

"Sun Media's new bank facility and senior notes do address our
concerns about cash flow restrictions and covenant pressures at
Sun Media and, to some extent, at Videotron," said Standard &
Poor's credit analyst Barbara Komjathy.

Moreover, in December 2002, Quebecor Media's 54.7% equity
shareholder, Quebecor Inc. (unrated), repaid its pro rata share
of Quebecor Media's nonrecourse C$429 million term loan due
April 2003. The remainder of the C$429 million term loan is
expected to be redeemed by Quebecor Media's 45.3% equity
shareholder, CDP Capital, a subsidiary of the Caisse de depot
et placement du Quebec (AAA/Stable/--).

Videotron has indicated that, on a pro forma basis, its bank
debt has been lowered by about C$280 million from cash on hand
and the Sun Media special dividends.

"We continue to view Videotron's financial flexibility as
constrained, particularly as its leverage covenant is expected
to remain relatively tight for the next several quarters, with
improvements anticipated from cash flow expansion following the
resolution of its long-standing labor dispute, but the ratings
recognize the comfort provided by Quebecor Media's consolidated
year-end pro forma cash position of close to C$250 million," Ms.
Komjathy continued.

Sun Media's new secured bank facility is rated one notch higher
than the long-term corporate credit rating on the company to
reflect Standard & Poor's high degree of confidence in the
recovery prospects (100% of principal) of the fully drawn
facility under a stress scenario. Sun Media's proposed US$200
million senior unsecured notes are rated two notches below the
long-term corporate credit rating to reflect the notes' junior
position in right of payment relative to Sun Media's secured
debt, which,  considering a fully drawn credit facility, exceeds
30% of Sun Media's asset base, adjusted for goodwill and the
Quebecor Media preferred shares.


TELSCAPE: Court Approves $8.6-Mil. Financing for Mexico Business
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
the request of David Neier, Chapter 11 Trustee of Telscape
International, Inc., and its debtor-affiliates, to obtain
postpetition financing for the Mexico Business.

Mr. Neier relates that General Electric Capital Corporation, the
Debtors' senior secured creditor, including Telereunion, refused
to provides additional financing to the Debtors, even on a
secured post-petition basis.  The Debtors owe GECC about $70
million and GECC is undersecured.

Up until now, the Debtors' shareholders in Mexico have refused
to relinquish control over the Company, even though the Business
has been cash flow negative since its inception.

However, now that Telereunion is out of money, facing lawsuits
by creditors and missing payroll, the shareholders in Mexico
have indicated they will now remove the impediment to a sale of
the Business by allowing for a change in control.  As previously
reported in the Troubled Company Reporter on December 26, 2002,
Lambco USA will acquire stock in Telereunion S.A. de C.V., for
$18,750,000.

Without the DIP loan, the Mexico Business will not survive until
it can be sold.  The DIP Loan represents the only hope to
maintain the operations of the business.  The Trustee discloses
that the business is in dire need of funds to maintain
operations.  The delay caused by the refusal of the Telereunion
shareholders in Mexico to relinquish control has caused
substantial damage to the Business.

As agreed, Lambco Telecommunications U.S.A., Inc., will lend up
to $8,600,000 and that loan will mature at the earlier of:

      (i) termination of the Asset Purchase Agreement,

     (ii) closing of the Asset Purchase Transaction,

    (iii) the date when the Collateral, and

     (iv) December 31, 2003.

Telscape International is a leading integrated communications
provider serving the Hispanic markets in the United States,
Mexico and Central America, offering local and long distance
telephone, internet and pre-paid calling card services. The
Company filed for Chapter 11 protection on April 27, 2001, in
the District of Delaware.  Brendan Linehan Shannon, Esq., at
Young, Conaway, Stargatt & Taylor, represents the Debtors.
Victoria W. Counihan, Esq., and Scott D. Cousins, Esq., at
Greenberg Traurug, LLP, represent the Chapter 11 Trustee.


TESORO PETROLEUM: Holding Q4 Earnings Conference Call Tomorrow
--------------------------------------------------------------
Tesoro Petroleum Corporation (NYSE:TSO) scheduled its fourth
quarter 2003 earnings conference call for 2 p.m., CST, tomorrow,
Jan. 29, 2003.

Interested parties may listen to the live conference call over
the Internet by logging on to Tesoro's Internet site at
http://www.tesoropetroleum.comat the scheduled time. This
presentation will be archived on Tesoro's Internet site until
its next earnings conference call is held.

Individuals wishing to listen to Tesoro's conference call from
its Internet site will need Windows Media Player, which can be
downloaded free of charge from http://www.tesoropetroleum.com
Please allow at least 15 minutes to complete the download.

Tesoro Petroleum Corporation, a Fortune 500 Company, is an
independent refiner and marketer of petroleum products and
provider of marine logistics services. Tesoro operates six
refineries in the western United States with a combined capacity
of nearly 560,000 barrels per day. Tesoro's retail-marketing
system includes approximately 600 branded retail stations, of
which over 200 are company operated under the Tesoro(R) and
Mirastar(R) brands.

As reported in Troubled Company Reporter's Monday Edition, Fitch
Ratings lowered the debt ratings of Tesoro Petroleum
Corporation. The rating action reflects Tesoro's constrained
capital structure and weak credit protection in a weak refining
margin environment in recent quarters.

Fitch has downgraded Tesoro's senior secured credit facility to
'BB-' from 'BB' and the company's subordinated debt to 'B' from
'B+'. The Rating Outlook remains Negative due to the continued
volatility and uncertainty in global crude markets and the U.S.
refining sector as the company works to repair its balance
sheet.


TRANSTECHNOLOGY: Selling Norco Unit to Marathon Power for $52MM
---------------------------------------------------------------
TransTechnology Corporation (NYSE:TT) entered into a definitive
agreement to sell the business and substantially all of the
assets of its Norco, Inc., subsidiary to Marathon Power
Technologies Company, a division of TransDigm, Inc., of
Cleveland, Ohio, for total cash consideration of $52 million.

The sale, subject to completion of customary closing conditions,
is expected to be completed in the next few weeks.

The company said that it expects to report a pretax gain of
approximately $30.0 million from the transaction in its fourth
fiscal quarter ending March 31, 2003. Because the gain will be
fully sheltered from federal income taxes by the company's net
operating loss carryforward, all of the net proceeds, which
include a $1 million reimbursement for state income taxes
payable on the transaction, or approximately $50.0 million after
transaction expenses, will be used to pay down the company's
senior and subordinated debt, which currently stands at
approximately $96 million.

Michael J. Berthelot, Chairman, President and CEO of the
company, said, "As we stated in [the other] week's earnings
release, we have determined to focus our efforts on the military
and government markets. As a result, we decided to divest our
Norco, Inc., subsidiary, which generates most of its business
from the commercial aerospace markets. Following this
divestiture, our company will be comprised of a single business
unit; Breeze-Eastern, which is the world's leading designer and
manufacturer of helicopter rescue hoists and cargo hooks while
also emerging as a leader in the development of weapons loading
systems and cargo winches for the military markets.
Approximately 95% of our revenues will be derived through direct
or indirect sales to military or government agencies throughout
the world."

Joseph F. Spanier, the Vice President and Chief Financial
Officer of TransTechnology, said, "We intend to apply a portion
of the proceeds of the Norco divestiture to reduce our senior
debt, including most of the revolver and the entire Term A and
Term B tranches of that debt. In addition, we expect to use
approximately $32 million of the proceeds to reduce our
subordinated debt. As a result of these anticipated reductions
in our senior and subordinated debt, we expect to pay prepayment
penalties of approximately $1.8 million during the quarter in
which the prepayments occur. Upon conclusion of the Norco
divestiture and the concurrent debt repayment, we expect that
our debt will consist of approximately $1 million of senior debt
and $49 million of subordinated debt. We are presently in
discussions relative to a new credit facility that we expect
would, in conjunction with other sources of capital, enable us
to completely retire or replace the remaining subordinated
debt."

TransTechnology Corporation, with a total shareholders' equity
deficit of about $26 million at Dec. 29, 2002, is the world's
leading designer and manufacturer of sophisticated lifting
devices for military and civilian aircraft, including rescue
hoists, cargo hooks, and weapons-lifting systems. The company,
which employs approximately 190 people, reported sales from
continuing operations of $47.8 million in the fiscal year ended
March 31, 2002.


UNITED AIRLINES: Court Okays McKinsey as Management Consultant
--------------------------------------------------------------
UAL Corporation and its debtor-affiliates obtained from the
Court to employ McKinsey & Co., as their management consultant.

McKinsey will provide services in connections with three
projects:

       Project 1: Continuation of pre-bankruptcy services
                  through December 20, 2002, focused on
                  financial assessment of and refinement of
                  the implementation plans for nonlabor profit
                  improvement projects.  Compensation for this
                  Project is a flat $460,000 fee.

       Project 2: Help develop the Debtors' profit improvement
                  efforts for their sales to corporate
                  accounts.  This effort is focused on driving
                  best-in-class pricing, sales and marketing
                  practices for corporate accounts.
                  Compensation for this Project is a flat
                  $400,000 fee.

       Project 3: Assist the Debtors in development of a
                  comprehensive and integrated turnaround
                  plan -- at a cost of $600,000 per month.

Gerhard J. Bette at McKinsey discloses that his Firm received a
$1,000,000 retainer which has been applied as of the filing date
against unpaid prepetition amounts owed.  The balance will be
applied to post-petition services. (United Airlines Bankruptcy
News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-
0900)

United Airlines' 10.670% bonds due 2004 (UAL04USR1) are trading
at about 6 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=UAL04USR1for
real-time bond pricing.


UNITED PAN-EUROPE: S&P Drops Credit Rating to D after Bankruptcy
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on United Pan-Europe Communications N.V., to 'D' from
'SD' following the company's recent bankruptcy filing. Standard
& Poor's also lowered its senior unsecured debt rating on the
company's four remaining debt issues to 'D' from 'C', and
removed these ratings from CreditWatch with negative
implications.

Furthermore, Standard & Poor's revised its CreditWatch
implications for its 'C' corporate credit and senior secured
bank loan ratings for subsidiary UPC Distribution Holding B.V.
to developing from negative.

"The company obtained waivers and amendments that eliminate the
cross default provision under the bank agreement and UPC
Distribution Holding continues to service the bank facility.
Upon UPC's emergence from bankruptcy, the rating on this bank
facility would be raised," said Standard & Poor's credit analyst
Catherine Cosentino.


US AIRWAYS: U.S. Trustee Amends Unsecured Creditors' Committee
--------------------------------------------------------------
The U.S. Trustee amends the membership of the Official Committee
of Unsecured Creditors of US Airways Group Inc., and debtor-
affiliates, by replacing State Street Bank & Trust Company with
the U.S. Bank, N.A.  In addition, First Union National Bank's
name has been changed to Wachovia National Bank.

     1. Airbus North American Holdings, Inc.
        198 Van Buren Street, Suite 300
        Herndon, VA 20170-5335
        703-834-3402
        Attn: R. Douglas Greco

     2. Air Line Pilots Association International
        660 Lakeside Dock Drive
        Kingsport, TN 37663
        423-279-0226
        Attn: Captain Kelly Ison

     3. Charles E. Smith Commercial Realty
        2345 Crystal Drive
        Arlington, VA 22202
        703-769-1215
        Attn: Michael T. Crehan

     4. Electronic Data Systems Corporation
        2345 Crystal Drive, Suite H300
        Arlington, VA 22227
        703-872-6400
        Attn: Mitchell B. George

     5. Wachovia National Bank
        401 S. Tryon Street, 12th Floor
        Charlotte, NC 28288
        704-715-3021
        Attn: Robert L. Bice, II

     6. Honeywell International
        1140 W. Warner Road
        Mail Stop 1233-M
        Tempe, AZ 85284
        480-592-4506
        Attn: Gerald W. Harris

     7. International Assoc. of Machinists & Aerospace Workers
        9000 Machinists Place, Suite 118B
        Upper Marlboro, MD 20772-2687
        301-962-4560
        Attn: James T. Varsel

     8. J.P. Morgan Trust Company acting by HSBC Bank U.S.A.
        10 East 40th Street
        New York, NY 10016
        212-525-1324
        Attn: Russ Paladino

     9. LSG Sky Chefs, Inc.
        524 E. Lamar Blvd.
        Arlington, TX 76011
        817-792-5553
        Attn: Janice L. Kiraly

    10. Pension Benefit Guaranty Corporation
        1200 K Street, NW, Suite 270
        Washington, DC 20005-4026
        202-326-4020
        Attn: Craig Yamaoka

    11. Rolls-Royce North America, Inc. and affiliates
        14850 Conference Center Drive
        Chantilly, VA 20151
        703-621-2816
        Attn: Kevin T. Lowdermilk

    12. U.S. Bank, N.A.
        2 Avenue de Lafayette
        Boston, MA  02111
        Attn: E. Decker Adams

    13. Wilmington Trust Company
        Rodney Square North
        1100 N. Market Street
        Wilmington, DE 19890
        302-636-6058
        Attn: Steven M. Cimalore
(US Airways Bankruptcy News, Issue No. 22; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


U.S. WIRELESS: Secures Court Nod to Hire FTI as Fin'l Advisors
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave its
nod of approval to U.S. Wireless Corporation and its debtor-
affiliates' application to employ FTI Consulting, Inc., as their
Financial Advisors.

The Debtors previously retained PricewaterhouseCoopers LLP to
provide financial advisory services. Subsequently, FTI
Consulting, Inc., purchased the Business Recovery Services
practice and related assets and receivables from PwC.  The
primary PwC partner providing the Business Recovery Services,
along with substantially all of the other members of the BRS
engagement team, became employees of FTI.

Consequently, the Debtors want to employ and retain FTI to serve
as its financial advisor to continue receiving the Business
Recovery Services under the same terms and conditions PwC's BRS
Engagement provided.

Specifically, FTI will:

      a) assist in the preparation of a rolling cash receipts and
         disbursement forecast;

      b) assisting the Debtors' management in fulfilling
         requirements resulting from the Chapter 11 filing,
         including but not limited to preparing bankruptcy
         statements and schedules, separating prepetition and
         postpetition liabilities, restructuring the Debtors'
         treasury and accounting systems, and preparing Monthly
         Operating Reports;

      c) assist in the preparation and/or analysis of business
         plan and other necessary and/or desirable special
         projects;

      d) assist in any negotiations or discussions with any
         Official Committee of Unsecured Creditors appointed in
         this case, the Committee's advisors, investors, and
         other potential buyers of the Debtor's assets, and other
         parties in interest;

      e) assist in the preparation of any plans of
         reorganization; and

      f) perform such other services as may be requested by the
         Debtors or their counsel to aid the Debtors in the
         operation and reorganization of the Debtors' business.

FTI's customary hourly rates for professionals are:

      Partners                            $500 to $595 per hour
      Managers/Directors                  $350 to $495 per hour
      Associates/Senior Associates        $175 to $325 per hour
      Administration/Paraprofessionals    $ 85 to $150 per hour

U.S. Wireless Corporation is a research and development of
wireless location technologies, designs and implements wireless
location networks using proprietary "location pattern matching"
technology. The Company filed for chapter 11 protection on
August 29, 2001.  David M. Fournier, Esq., at Pepper Hamilton
LLP, represents the Debtor in their restructuring effort. When
the Company filed for protection from its creditors, it listed
$17,688,708 in assets and $22,239,832 in liabilities.


USG CORP: Reduces DIP Facility to $100 Million from $350 Million
----------------------------------------------------------------
USG Corporation (NYSE: USG) reduced the amount of its Debtor-In-
Possession credit facility to $100 million from $350 million.
The facility is provided by a syndicate of lenders led by
JPMorgan Chase Bank, as agent.

As of September 30, 2002, the company reported $748 million of
cash, cash equivalents and marketable securities, providing
sufficient liquidity to permit the company to reduce the size of
the facility.

There are currently no borrowings under the facility, although
$16 million of standby letters of credit are outstanding under
the facility.

USG Corporation is a Fortune 500 company with subsidiaries that
are market leaders in their key product groups:  gypsum
wallboard, joint compound and related gypsum products; cement
board; gypsum fiber panels; ceiling panels and grid; and
building products distribution.  For more information about USG
Corporation, visit the USG home page at http://www.usg.com


USG CORP: Asks Court to OK Proposed Dispute Resolution Protocol
---------------------------------------------------------------
USG Corporation and its debtor-affiliates propose to implement
an alternative dispute resolution procedures to assist them in
resolving selected disputed claims filed against their Chapter
11 estates.  Paul N. Heath, Esq., at Richards, Layton & Finger,
clarifies that the proposed ADR procedures would only apply to
claims subject to the January 15, 2003 bar date.

The Debtors will deliver a notice to a claimant explaining that
the disputed claim is being submitted for resolution through the
ADR Procedures.  The claim will be subject to the ADR Procedures
without further Court order unless the claimant objects within
30 days of notice service, and proves to the Court why the claim
should not be resolved in this manner.

The ADR notice will contain a copy of the order approving this
motion and an ADR Claim Information Response form so the
claimant may provide specific claim information and make a
settlement offer.  Subsequently, within 30 days of the service
date, the ADR claimant must return a completed ADR Claim
Information Response Form and submit a settlement offer.

Mr. Heath explains the settlement offer may not exceed the
amount or improve the priority of the claimant's most recent,
timely filed proof of claim.  The Debtors will have 60 days to
respond to the claimant, either by:

     a) accepting the settlement offer;

     b) making a counter-offer -- which may be $0;

     c) requesting additional information or documentation so the
        Debtors may respond in good faith;

     d) stating that the ADR claim will proceed to mediation; or

     e) stating that the ADR claim will proceed to binding
        arbitration.

Mr. Heath notes that the Court is authorized to approve the ADR
Procedures pursuant to Section 105(a) of the Bankruptcy Code,
under which "the Court may issue any order, process, or judgment
that is necessary or appropriate to carry out the provisions of
this title."  Mr. Heath contends that the ADR Procedures are
necessary:

   -- for the efficient administration of the Debtors' estates,

   -- the liquidation of the ADR claims, and

   -- to save the Debtors litigation costs for the benefit of
      their estates and creditors.

Mr. Heath points out that ADR programs have been implemented in
other Chapter 11 cases in this District, like the cases of
Loewen Group International, Inc., Montgomery Ward Holding Corp.,
R.H. Macy & Co., among others.

Thus, the Debtors ask Judge Newsome to approve the ADR
Procedures and authorize them to take all necessary or
appropriate steps necessary to implement the ADR Procedures.

                         Zurich N.A. Objects

Zurich N.A., represented by William D. Sullivan, Esq., at
Elzufon Austin Reardon Tarlov & Mondall, P.A., in Wilmington,
Delaware, is the insurer for various homebuilders and general
contractors who have installed the Debtors' exterior insulation
and finishing systems product in homes across the country.

Zurich's insureds have been named defendants in homeowners'
lawsuits claiming "substantial damage" as a result of EIFS
defects.  These insureds have sought USG's contribution and
indemnification by virtue of a cross-claim or third-party claim
or third party complaint against USG in the state court
lawsuits. Some insureds have settled with the homeowner-
plaintiffs in these lawsuits.  Zurich is now the subrogee
pursuing the cross-claims or third-party complaints.  Other
suits have not reached resolution because of the Chapter 11
automatic stay.

Zurich concedes that the ADR procedures may be beneficial to all
parties in a case this immense, with the pending claims subject
to all sorts of litigation.  However, Mr. Sullivan complains
that the ADR procedures are one-sided in favor of the Debtors
and would only serve to delay or hinder claims resolution.

Mr. Sullivan argues that the motion should be denied to the
extent it provides for the disallowance of claims by default.

The demand-offer exchange procedure provides for the opportunity
to exchange settlement offers.  According to Mr. Sullivan, (i)
the 30-day return required for the Notice, (ii) the disallowance
of a claim if the Notice isn't returned in that time period, and
(iii) the consequential automatic allowance of a claim-related
counteroffer by USG -- is objectionable and should not be
allowed.

Furthermore, Mr. Sullivan asserts, the motion should be denied
to the extent it provides for geographically inconvenient
mediations.

The mediation parameters in the claims resolution procedures are
vague.  There is no indication how mediators will be selected,
where it will take place or what time frame within which it must
occur.  The mediations should take place in multiple
jurisdictions, at locations convenient to both parties and
within a specified time.

Moreover, Mr. Sullivan continues, the motion should be denied to
the extent it seeks an injunction of unspecified duration.

The Debtors ask the Court to enter an injunction against any ADR
claimant from continuing any action or proceeding until the ADR
procedures have been completed.  Mr. Sullivan notes that there
is no mention of when the ADR procedures must be completed.  Any
injunction included in the provisions must be of an
appropriately limited duration.  Zurich also contends that the
end result must be the lifting of the stay to liquidate the
claim on the procedures' completion, for all unresolved,
unsettled claims. "If there is no required end, there is no
incentive for the Debtors to participate in ADR procedures in
good faith, and allows the Debtors to delay claims resolution at
their discretion," Mr. Sullivan says.

In addition, Zurich believes that applicable insurance
information must be disclosed.  Mr. Sullivan points out that the
Debtors did not elaborate which, if any, of their insurance
policies are applicable to the ADR claims and whether the
applicable insurer consents to the proposed mediation.  "This
type of information would help a potentially settling party
evaluate the treatment of its claim," Mr. Sullivan relates.

Zurich wants the Court to require:

   -- the Debtors to disclose the insurance relevant to any claim
      subject to an ADR Notice by including the insurance
      information with the Notice;

   -- the Debtors to provide additional insurance information
      upon request during the demand/offer stage; and

   -- any insurer providing coverage for part or all of a claim
      in the mediation process to participate in the mediation,
      so that any settlement reached is a final settlement. (USG
      Bankruptcy News, Issue No. 41; Bankruptcy Creditors'
      Service, Inc., 609/392-0900)


VALENTIS INC: Shareholders Okay Proposed Capital Restructuring
--------------------------------------------------------------
Valentis, Inc., (Nasdaq: VLTS) which has a total shareholders'
equity deficit of about $14 million at Sept. 30, 2002, received
stockholder approval for its proposed capital restructuring and
that the restructuring activities have been completed.
Specifically, the Company has effected the conversion of all
outstanding shares of its Series A Convertible Redeemable
Preferred Stock into Common Stock and, immediately thereafter, a
reverse stock split of its Common Stock at a ratio of one-for-
thirty.

The conversion and reverse stock split were approved by the
holders of the Company's Common Stock at the Company's Annual
Meeting of Stockholders held on January 23, 2003. At the Annual
Meeting, the stockholders approved the Company's Amended and
Restated Certificate of Incorporation, which provided for the
following: (i) an increase in the authorized shares of Common
Stock from 65 million to 190 million; (ii) the elimination of
all redemption rights of the Series A Preferred Stock; (iii) an
adjustment of the conversion price of the Series A Preferred
Stock from $9.00 to $0.242; (iv) the automatic conversion into
Common Stock of all outstanding shares of Series A Preferred
Stock (plus accrued and unpaid dividends and arrearage interest
on unpaid dividends) at 5:00 p.m. EST on the filing date of the
Restated Certificate; and (v) a reverse stock split of the
Company's outstanding Common Stock at 5:01 p.m. EST on the
filing date of the Restated Certificate, in the range of 1:5 to
1:40, as determined at the discretion of the Board of Directors
of the Company. The Restated Certificate was previously approved
by Company's Board of Directors and the holders of the Company's
Series A Preferred Stock.

The Company filed the Restated Certificate this morning, and the
conversion of Series A Preferred Stock and the reverse stock
split occurred today at 5:00 p.m. EST and 5:01 p.m.,
respectively. As a result of the conversion of the Series A
Preferred Stock (and the payment of accrued and unpaid dividends
and arrearage interest on unpaid dividends), the Company issued
129,759,051 shares of Common Stock. As a result of the reverse
stock split, each outstanding share of Common Stock
automatically converted into one-thirtieth of a share of Common
Stock, respectively, thereby reducing the number of shares of
Common Stock outstanding from approximately 166.7 million to 5.6
million. In lieu of fractional shares of Common Stock,
stockholders will receive a cash payment based on the closing
price of the Common Stock on January 23, 2002 of $0.18 per
share. The par value of the Common Stock remains at $.001, and
the number of authorized shares of Common Stock remains at 190
million.

The Company's Common Stock will begin trading on a split-
adjusted basis when the market opens on January 27, 2003, with
the interim ticker symbol "VLTSD." After twenty trading days,
the Company expects that the "D" designation (signifying the
reverse stock split) will be removed, and its ticker symbol will
revert to "VLTS." The Company's transfer agent, Equiserve, L.P.,
will mail instructions to stockholders of record regarding the
exchange of certificates for Common Stock.

Additional business transacted at the Annual Meeting included
the election of Patrick Enright and Alan Mendelson to the
Company's Board of Directors and the ratification of the
selection of Ernst & Young as the Company's auditors for the
current fiscal year.

Valentis is converting biologic discoveries into innovative
products. Valentis has three product platforms for the
development of novel therapeutics: the gene medicine,
GeneSwitch(R) and DNA vaccine platforms. The gene medicine
platform includes a comprehensive array of proprietary nucleic
acid delivery systems, including a broad cationic lipid
portfolio from which appropriate formulations and modalities may
be selected and tailored to fit selected genes, indications, and
target tissues. The del-1 gene medicine therapeutic which is the
lead product for the gene medicine platform of non-viral gene
delivery technologies. Del-1 is an angiogenesis gene that is
being developed for peripheral arterial disease and ischemic
heart disease. The EpoSwitch(TM) therapeutic for anemia is the
lead product for the GeneSwitch(R) platform and is being
developed to allow control of erythropoietin protein production
from an injected gene by an orally administered drug. The
Company has developed synthetic vaccine delivery systems based
on several classes of polymers and proprietary PINC(TM) polymer-
based delivery technologies for intramuscular administration
provide for higher and more consistent levels of antigen
production. Additional information is available at
http://www.valentis.com


VOICEFLASH: Begins Liquidation Under Ch. 727 of Florida Statues
---------------------------------------------------------------
Voiceflash Networks, Inc., (Other OTC:VFNXE) will liquidate by
filing with the Clerk of the Circuit Court in Broward County,
Florida, an Assignment for the Benefit of Creditors under
Chapter 727 of the Florida Statutes, pursuant to an action by
its board of directors. The Assignment, which the company filed
on January 24, 2003, on behalf of Voiceflash and its wholly
owned subsidiaries, United Capturdyne Technologies, Inc., and
Value Stream Systems, Inc., names Michael Phelan of Michael
Moecker & Associates, Inc., as Assignee. The company determined
that its liabilities exceeded its assets and that its current
cash flow was insufficient to meet the obligations of the
company and its subsidiaries to their respective creditors.

President Robert J. Kaufman was authorized by the board to
execute and file all petitions and documents pertinent to the
company's insolvency on behalf of shareholders, creditors, and
other interested parties.

The company has retained the law firm of Tew Cardenas Rebak
Kellogg Lehman DeMaria Tague Raymond & Levine, L.L.P., of Miami,
Florida, as counsel in this Assignment proceeding.

Lawrence Cohen and Maxwell Jeffrey Korbin II have resigned as
directors, citing differences with management and alleging that
the company's financial statements for the fiscal year ended
July 31, 2002, may be materially false and misleading, and that
the company may have improperly recognized and accounted for
fiscal 2002 revenues and reserves. Management disagrees with the
characterization.

Voiceflash Networks, Inc., (dba The DataFlash Corporation)
through its subsidiary, United Capturdyne Technologies, Inc.,
processed Automated Clearing House transactions for merchants.
The company's other subsidiary, Value Stream Systems, Inc.,
marketed pre-paid MasterCard(tm) product to consumers. The
company's stock trades on the OTC Bulletin Board under the
symbol VFNXE.OB.


WADE COOK FINANCIAL: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Wade Cook Financial Corporation
         14675 Interurban Ave South
         Seattle, Washington 98168
         dba Profit Financial Corp

Bankruptcy Case No.: 02-25434

Type of Business: Wade Cook Financial Corporation is a holding
                   company whose core business is financial
                   education, which it conducts through its
                   seminar and publishing segments.

Chapter 11 Conversion Date: January 17, 2002

Court: Western District of Washington (Seattle)

Judge: Thomas T. Glover

Debtor's Counsel: Darrel B Carter, Esq.
                   CBG Law Group PLLC
                   800 Bellevue Wy NE #400
                   Bellevue, WA 98004
                   Tel: 425-990-5580

                          -and-

                    H Troy Romero, Esq.
                    Romero Montague P.S
                    155 108th Ave NE #202
                    Bellevue, WA 98004
                    Tel: (425) 450-5000

Total Assets: $19,158,000

Total Debts: $18,981,000


WESTPOINT STEVENS: NYSE Will Suspend Trading Effective Jan. 30
--------------------------------------------------------------
WestPoint Stevens Inc. (NYSE: WXS) --
http://www.westpointstevens.com-- has been informed by the New
York Stock Exchange, Inc., that, prior to the market opening on
January 30, 2003, the NYSE will suspend trading of WestPoint
Stevens' common stock. The NYSE indicated that it will
thereafter commence proceedings with the Securities and Exchange
Commission to delist the security. As previously announced, the
NYSE in October 2002 notified WestPoint Stevens that it was not
in compliance with the NYSE's continued listing requirements and
that WestPoint Stevens common stock could be subject to
delisting.

Holcombe T. Green, Jr., Chairman and Chief Executive Officer of
WestPoint Stevens, said, "We are working with the NYSE to ensure
a smooth transition to the OTCBB and do not anticipate the
change in trading venue to affect our financial or operational
performance. In fact, our performance in the fourth quarter 2002
has exceeded our expectations, and we remain in compliance with
all financial covenants and continue to enjoy strong liquidity."

WestPoint Stevens now expects fourth quarter 2002 sales growth
of roughly 8% and approximately $55-$57 million of EBITDA, ahead
of its prior guidance of modest sales growth and $50-$55 million
of EBITDA. Fourth quarter 2002 earnings are scheduled to be
released on the morning of February 11, 2003. WestPoint Stevens
anticipates that its common stock will be quoted on the OTC
(over-the-counter) Bulletin Board beginning on January 30, 2003,
under a new ticker symbol. The OTCBB is a regulated quotation
service that displays real-time quotes, last-sale prices and
volume information in OTC equity securities. Additional
information about the OTCBB may be found at http://www.otcbb.com
WestPoint Stevens intends to issue a press release when its new
ticker symbol has been assigned. Investors should be aware that
trading in WestPoint Stevens common stock through market makers
and quotation on the OTCBB may involve risk, such as trades not
being executed as quickly as when the issues were listed on the
NYSE.

WestPoint Stevens Inc., is the nation's premier home fashions
consumer products marketing company, with a wide range of bed
linens, towels, blankets, comforters and accessories marketed
under the well-known brand names GRAND PATRICIAN, PATRICIAN,
MARTEX, ATELIER MARTEX, BABY MARTEX, UTICA, STEVENS, LADY
PEPPERELL, VELLUX and CHATHAM -- all registered trademarks owned
by WestPoint Stevens Inc. and its subsidiaries -- and under
licensed brands including RALPH LAUREN HOME, DISNEY HOME,
SANDERSON, DESIGNERS GUILD, GLYNDA TURLEY and SIMMONS
BEAUTYREST.  WestPoint Stevens is also a manufacturer of the
MARTHA STEWART and JOE BOXER bed and bath lines.

As reported in the Troubled Company Reporter on January 9, 2003,
Standard & Poor's Ratings Service, following a review of
WestPoint Stevens' operations, has removed it from CreditWatch
status and affirmed the Company's "B" corporate credit rating
and its "CCC+" senior unsecured debt rating.

Westpoint Stevens Inc.'s 7.875% bonds due 2005 (WXS05USR1) are
trading at about 31 cents-on-the-dollar, DebtTraders says. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WXS05USR1for
real-time bond pricing.


WHEELING-PITTSBURGH: Sets-Up Avoidance Suits Settlement Protocol
----------------------------------------------------------------
Michael E. Wiles, Esq., and Richard F. Hahn, Esq., with the New
York firm of Debevoise & Plimpton, lead counsel for Wheeling-
Pittsburgh Steel Corporation, joined by local counsel James M.
Lawniczak, Esq., and Scott N. Opincar, Esq., with Calfee Halter
& Griswold, asks Judge William T. Bodoh to sign an order
establishing procedures for the settlement or dismissal of
avoidance adversary proceedings commenced by WPSC to recover
certain  preferential or fraudulent transfers received by
various entities or individuals from WPSC, and to disallow
claims of recipients of preferential or fraudulent transfers
against WPSC's estate.

Mr. Opincar reminds Judge Bodoh that, by order on November 12,
2002, Judge Bodoh established procedures for the Avoidance
Actions.  The Order permitted WPSC to commence the Avoidance
Actions by the filing of a complaint and permitted WPSC to delay
presenting a summons to the Clerk of this Court for the Court's
issuance of a summons to WPSC, for service on each defendant,
until on or before February 13, 2003.

On November 13th and 14th of 2002, Debtor WPSC filed 366
Avoidance Actions against 366 different defendants, but has not
served any of the 366 complaints under the procedures provided
in the Order.  WPSC, however, has sent a written letter to each
defendant explaining its intention to continue litigation
against the defendant absent any settlement or other resolution
between the parties.  WPSC enclosed with the letter a copy of
the complaint against that specific defendant, along with a copy
of the Order and an excerpt from the Bankruptcy Code listing
available defenses.

                     Procedure for Settlements or
                    Dismissals of Avoidance Actions

WPSC now seeks approval of these procedures for the settlement
or dismissal of the Avoidance Actions:

      (a)  Where the total amount of the claim at issue is less
           than $75,000.01, or where the settlement amount is
           within $75,000.01 of the claim amount, WPSC shall
           have the authority to settle or dismiss the Avoidance
           Action without court approval.

      (b)  WPSC will provide notice of all such settlements or
           dismissals to each of the Official Committees
           quarterly.  The Official Committees will receive the
           Quarterly Notices no later than one month following
           the close of the quarter and such notices shall
           provide a brief summary of the terms of all
           settlements and dismissals entered during that
           quarter.

           For purposes of this procedure, a quarter shall
           mean:
                 (i)  January 1 through March 31
                (ii)  April 1 through June 30
               (iii)  July 1 through September 30
                (iv)  October 1 through December 31

      (c)  Where the total amount of the claim at issue is
           between $75,000.01 and $250,000.00, or where the
           claim amount exceeds the settlement amount by more
           than $75,000.01 but less than $250,000.01, WPSC
           shall, before finalizing the proposed settlement or
           dismissal, provide written notice to each of the
           Official Committees briefly summarizing the terms
           of the settlement or dismissal.  Upon that notice,
           the Official Committees will have ten days from the
           date of receipt of the notice to object to the terms
           of the settlement or dismissal.

      (d)  If WPSC receives a written objection to the proposed
           settlement or dismissal from either of the Official
           Committees within the ten-day period, WPSC will not
           enter into the settlement or dismiss the claim, but
           will have the option to seek court approval of the
           proposed settlement or dismissal.

      (e)  If WPSC does not receive a written objection to the
           proposed settlement or dismissal from either of the
           Official Committees within the ten-day period, WPSC
           shall have authority to settle or dismiss the dispute
           without court approval; and

      (f)  Where the total amount of the claim at issue is
           greater than $250,000.00, and where the claim amount
           exceeds the proposed settlement amount by more than
           $250,000.00, WPSC shall be required to obtain court
           approval of the settlement or dismissal.

WPSC submits that the Settlement and Dismissal Procedures are
reasonable and will facilitate the settlement or dismissal of
the Avoidance Actions where the amount at stake is not
substantial, or where the settlement amount is close to the
claim amount.  WPSC asserts that obtaining separate court
approval for each settlement or dismissal, especially a
settlement or dismissal where less than $75,000.00 is at stake,
would be unduly expensive and time-consuming.

Mr. Opincar argues that, under the terms of Code Sec. 105(a),
Judge Bodoh has the authority to issue any order, process, or
judgment that is necessary or appropriate to carry out the
provisions of the Bankruptcy Code, and that authority includes
the ability to approve and implement the procedures outlined in
this motion.  Bankruptcy Rule 9019 further provides that the
bankruptcy court may approve a compromise or settlement upon
motion of the Debtor and after notice and a hearing. The Rules
further provide that when notice is to be given, the court shall
designate, if not otherwise specified in the statute, the time
within which, the entities to whom, and the form and manner in
which the notice shall be given.  Thus, this Court has the
authority to establish the Settlement and Dismissal Procedures
requested by the Debtors. The proposed Settlement and Dismissal
Procedures are in full compliance with the provisions of the
Bankruptcy Code and the Bankruptcy Rules.  If adopted, the
Settlement and Dismissal Procedures will satisfy the Bankruptcy
Rules, while eliminating the expense and burden associated with
filing numerous motions for court approval. (Wheeling-Pittsburgh
Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


WORLDCOM: Committee Wins Nod to Hire Pearl Meyer as Consultant
--------------------------------------------------------------
The Official Committee of Unsecured Creditors, appointed in the
chapter 11 cases involving Worldcom Inc., and debtor-affiliates,
sought and obtained the Court's authority to retain Pearl Meyer
& Partners as its executive compensation consultant in
connection with the Debtors' Chapter 11 cases, nunc pro tunc to
December 2, 2002.

Committee Chairperson Van Greenfield explains that they need an
executive compensation consultant to:

   -- advise and assist them in connection with finalizing the
      compensation arrangement and employment agreement for
      WorldCom Chairman & CEO Michael D. Capellas; and

   -- provide essential consultation services in connection with
      future management changes and changes to the Debtors' Board
      of Directors, including preparing an expert report on the
      reasonableness of Mr. Capellas' compensation and providing
      testimony.

As a result of the Committee's careful deliberations, the
Committee determined that Pearl Meyer's broad experience would
serve the interests of the Committee and the creditors in these
cases.

According to Mr. Greenfield, Pearl Meyer is one of the leading
executive compensation consulting firms, specializing in the
creation of innovative compensation programs to attract, retain,
motivate and reward key employees and directors.  Founded in
1989, Pearl Meyer has been a leader in executive compensation
consulting -- providing counsel to senior managements and Boards
of Directors and advising on matters of executive compensation,
performance and organization.  Pearl Meyer frequently serves as
outside consultant to Board Compensation Committees in the
discharge of their fiduciary duties.  Pearl Meyer is
distinguished by its clients, which range from Fortune 500
industries and service corporations, domestically and
internationally, to smaller and private firms.  Mr. Greenfield
adds that Pearl Meyer has pioneered major innovations in
compensation design, particularly in the area of equity
incentives, including omnibus stock plans, long-term performance
incentives, career shares, equity options, performance
management systems, stock grants for Directors, protection of
SERPs and other unfunded executive benefits, as well as deferral
arrangements including the tax shelter of option profits.  Pearl
Meyer's comprehensive annual surveys of trends in executive pay,
Board compensation and use of corporate equity are widely cited
and the firm is regularly quoted by the general and business
media including The New York Times.

As the executive compensation consultant to the Committee, Pearl
Meyer is also expected to provide services related to:

     -- board compensation programs;

     -- salary programs;

     -- annual incentives;

     -- value creation and performance measurement systems;

     -- long-term incentives;

     -- special situation incentives;

     -- change-in-control protection;

     -- development, negotiation and drafting of senior executive
        employment contracts and severance agreements; and

     -- similar services in connection with any subsequent
        proposed senior management changes and changes to
        WorldCom's Board of Directors.

In addition, Pearl Meyer will be actively involved with members
of the Committee in connection with the interview process and
evaluation of any proposed future additions to the Debtors'
senior management team and nominees for WorldCom's Board of
Directors.

Pearl Meyer will coordinate any services performed at the
Committee's request with the Committee's other professionals to
avoid unnecessary duplication of effort.

Pearl Meyer has been providing critical services to the
Committee, including reviewing the proposed terms of Mr.
Capellas' compensation package and meeting with the Committee to
advise the Committee on the continued negotiation of Mr.
Capellas' compensation, since December 2, 2002.

PM&P Chairman Pearl Meyer assures the Court that the firm is a
"disinterested person" as that term is defined in Section
101(14) of the Bankruptcy Code, as modified by Section 1107(b).
In addition, Pearl Meyer does not hold or represent an interest
adverse to the Debtors' estates that would impair the firm's
ability to objectively perform professional services for the
Committee in the matters on which the firm is to be engaged in.

However, Mr. Meyer says, the firm has provided services,
currently provides services, and may provide services in the
future for these entities in matters totally unrelated to the
Debtors:  ABN Amro Bank NV, Aetna Inc., American International
Group, Arnold C. Chavkin, AXA Financial Inc., Bear Stearns,
Deutsche Bank, Donaldson Lufkin & Jenrette, Elliott Management
Company, Fleet National Bank, Fortis Capital Corporation,
JPMorgan Chase Bank, Metropolitan Life Insurance Company, New
York Life Insurance Company, New York Investment Management LLC,
Paine Webber Inc., Pershing/DLJ, Putnam Investment, Salomon
Smith barney, Teachers Insurance & Annuity Association, and Weil
Gotshal & Manges LLP.

All fees and related costs and expenses incurred by the
Committee on account of services rendered by Pearl Meyer in
these cases will paid as administrative expenses of the Debtors'
estates pursuant to Sections 328, 330(a), 331 and 503(b).  The
firm will charge for its services on an hourly basis in
accordance with its ordinary and customary hourly rates in
effect on the date these services are rendered.  The current
hourly rates charged by Pearl Meyer are:

        Partners                         $600 - 900
        Consultants                       125 - 550

Mr. Meyer relates that the Debtors' estates will be required to
indemnify and hold Pearl Meyer harmless from and against any and
all loss, claim, damage, liability or expense whatsoever,
arising out of or based on the firm's engagement by the
Committee or the performance of services in connection with this
engagement unless the loss, claim, damage, liability or expense
is the result of gross negligence or willful misconduct on the
part of the firm in the performance of services in connection
with the engagement. The Debtors' estates, however, will not be
required to make reimbursement or payment with respect to any
settlement effected by Pearl Meyer without the Debtors' prior
written consent, which should not be unreasonably withheld.  If
any proceeding is brought against Pearl Meyer in respect of
which indemnity may be sought against the Debtors' estates, the
firm, promptly after receiving actual notice that the proceeding
has formally commenced, should notify the Debtors and the
Committee in writing, or by telephone, confirmed reasonably
promptly in writing, of the institution of the proceeding.
However, Mr. Meyer emphasizes that any failure by Pearl Meyer to
give notice will not reduce the Debtors' estates' indemnity
obligations, unless and except to the extent that the failure
increases the Debtors' estates' obligations or results in the
loss of any defenses or rights that the Debtors' estates would
otherwise have had in the proceeding.  Following notice, the
Debtors' estates will be entitled to assume the defense at their
expense with any counsel as it may choose; provided, however,
that Pearl Meyer may at its own expense retain separate counsel
to participate in the proceeding.  The indemnity will survive
the completion of Pearl Meyer's performance of services for the
Committee and the term of any other agreement, and will be in
addition to any obligation or liability, which the Debtors'
estates might otherwise have to the firm. (Worldcom Bankruptcy
News, Issue No. 18; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


WORLDPORT COMMS: WCI Extends Tender Offer for All Shares to Fri.
----------------------------------------------------------------
W.C.I. Acquisition Corp., extended the expiration date of its
offer to purchase any and all of the outstanding shares of
common stock of WorldPort Communications, Inc., at a price of
$0.50 per share. W.C.I.'s offer was originally scheduled to
expire at 5:00 p.m., New York City Time, on Friday, January 24,
2003. W.C.I. has extended its offer so that it will now expire
at 5:00 p.m., New York City Time, on Friday, January 31, 2003,
unless otherwise extended.

On January 24, 2003, as of 5:00 p.m., New York City Time,
7,162,372 shares of WorldPort common stock had been validly
tendered and not withdrawn pursuant to the Offer.

Questions and requests for assistance with respect to the offer
to purchase for the WorldPort shares may be directed to the
Information Agent for the transaction, Georgeson Shareholder
Services, at (212) 440-9800 (for banks and brokers), or, for all
others, toll free at (866) 328-5441.

                          *   *   *

As reported in Troubled Company Reporter's November 14, 2002
edition, the Company said it was "currently operating with a
minimal headquarters staff while we complete the activities
related to exiting our prior businesses and determine how to use
our cash resources. We will have broad discretion in determining
how and when to use these cash resources. Alternatives being
considered include potential acquisitions, a recapitalization
which might provide liquidity to some or all shareholders, and a
full or partial liquidation. Upon any liquidation, dissolution
or winding up of the Company, the holders of our outstanding
preferred stock would be entitled to receive approximately $68
million prior to any distribution to the holders of our common
stock."


W. R. GRACE: Peninsula Investment Discloses 5.1% Equity Stake
-------------------------------------------------------------
Peninsula Investment Partners, L.P. and Peninsula Capital
Advisors, LLC, beneficially own 3,091,500 shares of the common
stock of W. R. Grace & Co., representing 5.1% of the outstanding
common stock of the Company.  The holders share voting and
dispositive powers over the stock.

The company is a leading global supplier of catalysts and silica
products, especially construction chemicals and building
materials, and container products. The Company filed for Chapter
11 protection on April 2, 2001, in the U.S. Bankruptcy Court for
the District of Delaware.


ZAMBA SOLUTIONS: Dec. 31 Balance Sheet Upside-Down by $2.3 Mill.
----------------------------------------------------------------
ZAMBA Solutions (OTCBB:ZMBA) announced its results for the
fourth quarter and year ended December 31, 2002. Annual revenues
before reimbursement of direct costs for 2002 were $10,184,000,
compared to $33,302,000 for 2001. Net loss for the year was
$6,613,000, including a $5,199,000 gain on sales of a portion of
our NextNet shares, compared to a net loss of $9,529,000 for
2001. Revenues for the fourth quarter before reimbursement of
direct costs were $2,504,000 compared to $5,803,000 for the
fourth quarter of 2001. Quarterly net income was $1,803,000 for
the fourth quarter of 2002, including a $2,234,000 gain on sale
of a portion of our NextNet shares, compared to a net loss of
$2,224,000 for the fourth quarter of 2001.

At December 31, 2002, the Company's balance sheet shows a
working capital deficit of about $3 million, and a total
shareholders' equity deficit of about $2.3 million.

"We continued to make good progress in the fourth quarter." said
Norm Smith, President and Chief Executive Officer at ZAMBA. "For
the second quarter in a row, we recorded revenue growth and
improved our operating results by over 50 percent, beating our
original estimates. These results demonstrate our progress
towards our goal of becoming profitable in 2003. We also entered
into a $2.5 million loan agreement with Entrx, of which $1
million had been received as of December 31, 2002, that
significantly improves our access to capital to support our
operations. During the quarter, I had the opportunity to spend
time with some of our key clients, and received great feedback
on the exceptional quality of the services we continue to
provide. These clients, supported by our dedicated team, create
the foundation upon which we will build our future success."

ZAMBA Solutions is a premier customer care services company. We
help our clients be more successful in: acquiring, servicing,
and retaining their customers. Having served over 300 clients,
ZAMBA is focused exclusively on customer-centric services by
leveraging best practices and best-in-class technology to enable
insightful, consistent interactions across all customer
touchpoints. Based on the Company's expertise and experience,
ZAMBA has created an end-to-end CRM Blueprint - a framework of
interdependent processes and technologies that addresses each
aspect of customer care, including strategy, analytics and
marketing, contact center, content and commerce, field sales,
field service and enterprise integration.

ZAMBA's clients have included ADC, Aether Systems, Best Buy,
Canon ITS, GE Medical Systems, Enbridge Services, Hertz, General
Mills, Microsoft Great Plains, Northrop Grumman, Symbol
Technologies, Towers Perrin, Union Bank of California, and
Volkswagen of America. The company has offices in Minneapolis,
San Jose and Toronto. For more information, contact ZAMBA at
http://www.ZAMBAsolutions.com


* CBIZ Valuation Group Appoints Todd Poling as Regional Manager
---------------------------------------------------------------
CBIZ Valuation Group (Nasdaq:CBIZ), a leading national valuation
company, appointed Todd Poling, CPA, Managing Director of the
West region, overseeing valuation offices in Los Angeles and San
Diego.  Mr. Poling has significant experience valuing numerous
types of businesses, with particular focus on financial
instruments, including stock, options, warrants, and other
derivative instruments and partnership interests.

CBIZ Valuation appointed four other regional directors. The
appointments support the new structure of the company, which was
formed through the merger of CBIZ Valuation Counselors and
Business Valuation Services that occurred last year.

Ray Nicholson has been appointed Managing Director of the
Southeast Region, which includes offices in Atlanta, Georgia and
Charlotte, North Carolina. With 20 years of diversified business
valuation experience, Mr. Nicholson has appeared as an expert
witness in federal and state courts. Prior to joining CBIZ
Mr. Nicholson served as a Director of Valuation Services at KPMG
Consulting, Inc.

Raymond Ghelardi, ASA, has been appointed Managing Director of
the Northeast Region, which includes offices in Princeton, New
Jersey and in New York City. A valuation professional for 20
years, Mr. Ghelardi is an experienced litigation support
professional, and has testified in numerous state and federal
courts, including the Supreme Court of the State of New York.
Mr. Ghelardi focuses on mergers and acquisitions, healthcare,
high-technology, and real estate feasibility.

An additional appointment was made in the Princeton office
designating Domenic J. Falcone National Industry Director-
Energy.  Mr. Falcone will be responsible for business
development in valuation, litigation support, management
consulting and mergers and acquisitions in the energy and power
industries.

Gregory Scheig, CFA, CPA, has been named Managing Director of
the Southwest Region working from the Valuation Group's Dallas
office. Formerly a senior manager at Deloitte Consulting, and
prior to that a managing associate with FINANCO, Inc.,
Mr. Scheig is experienced with value-based management, merger
and acquisition analyses, business valuation, and litigation
support, particularly in the energy industry.

Beth Smoots, who has practiced valuation industry for 20 years,
has been appointed Managing Director of the Midwest region,
overseeing offices in Chicago, St. Louis, and Grand Ledge,
Michigan.  Ms. Smoots has consulted in a broad array of
valuation settings and industries, and specializes in valuation
for the health care industry.

CBIZ Valuation Group is made up of over 100 employees with
extensive expertise in the valuation of tangible and intangible
assets, contracts, securities, debt instruments, partnership
interests and litigation claims. CBIZ Valuation Group has
assisted many Fortune 500 and innumerable middle-market clients
in valuing aspects of their business for internal planning
purposes, tax planning, financial reporting, merger and
acquisition planning and due diligence, litigation support and
bankruptcy proceedings in many different industries.

CBIZ (Century Business Services, Inc.) (Nasdaq:CBIZ) is a
provider of outsourced business services to small and medium-
sized companies throughout the United States. As the largest
benefits specialist, the eighth largest accounting company, and
one of the ten largest valuation and medical practice management
companies in the United States, CBIZ provides integrated
services in the following areas: accounting and tax; employee
benefits; wealth management; property and casualty insurance;
payroll; IS consulting; and HR consulting. CBIZ also provides
valuation; litigation advisory; government relations; commercial
real estate; wholesale insurance; healthcare consulting; medical
practice management; worksite marketing; and capital advisory
services. These services are provided throughout a network of
more than 170 Company offices in 33 states, the District of
Columbia, and Toronto, Canada.

For further information regarding CBIZ, call the Investor
Relations Office at (216) 447-9000 or visit http://www.cbiz.com


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

                           *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices
are obtained by TCR editors from a variety of outside sources
during the prior week we think are reliable.  Those sources may
not, however, be complete or accurate.  The Monday Bond Pricing
table is compiled on the Friday prior to publication.  Prices
reported are not intended to reflect actual trades.  Prices for
actual trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy
or sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies
with insolvent balance sheets whose shares trade higher than $3
per share in public markets.  At first glance, this list may
look like the definitive compilation of stocks that are ideal to
sell short.  Don't be fooled.  Assets, for example, reported at
historical cost net of depreciation may understate the true
value of a firm's assets.  A company may establish reserves on
its balance sheet for liabilities that may never materialize.
The prices at which equity securities trade in public market are
determined by more than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.

Bond pricing, appearing in each Thursday's edition of the TCR,
is provided by DebtTraders in New York. DebtTraders is a
specialist in global high yield securities, providing clients
unparalleled services in the identification, assessment, and
sourcing of attractive high yield debt investments. For more
information on institutional services, contact Scott Johnson at
1-212-247-5300. To view our research and find out about private
client accounts, contact Peter Fitzpatrick at 1-212-247-3800.
Real-time pricing available at http://www.debttraders.com/

Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                           *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard
Group, Inc., Washington, DC USA. Yvonne L. Metzler, Bernadette
C. de Roda, Donnabel C. Salcedo, Ronald P. Villavelez and Peter
A. Chapman, Editors.

Copyright 2003.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.  Information
contained herein is obtained from sources believed to be
reliable, but is not guaranteed.

The TCR subscription rate is $675 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each.  For subscription information, contact Christopher
Beard at 240/629-3300.

                 *** End of Transmission ***