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        T R O U B L E D   C O M P A N Y   R E P O R T E R

             Monday, February 3, 2003, Vol. 7, No. 23    

                          Headlines

ADELPHIA BUS.: Court Okays $10MM Closed Markets Sale to Gateway
AIRGAS: Fin'l Profile Improvements Prompt S&P's Outlook Revision
ALTERRA HEALTHCARE: Gets Interim Court OK to Use Cash Collateral
AMERICAN COMMERCIAL: Files for Chapter 11 Protection in Indiana
AMERICREDIT CORP: Fitch Lowers Senior Unsecured Rating to B+

ANC RENTAL: Court Okays Payment of Due Diligence Fees to Lenders
ANGEION: Reports Results for 10-Month Period Ended October 2002
ASIA GLOBAL CROSSING: Turns to Kasowitz Benson Torres for Advice
THE AUXER GROUP: Viva Airlines Becomes Wholly-Owned Subsidiary
BIKE ATHLETIC: Russell Corporation Acquires Assets for $16.25MM

BURLINGTON IND.: Urges Court to Approve CD Leasing Master Lease
CANNONDALE CORP: Case Summary & 20 Largest Unsecured Creditors
CANNONDALE CORP: Obtains Court Approval of Interim DIP Financing
CAR RENTAL: Settles Dispute With Ford Motor Credit Company
COMPUTER SUPPORT: General Services Cancels GSA1 Contracts

CONSECO: Finance Debtor Taps Bridge Assoc. as Crisis Managers
CONSECO: Files Joint Plan & Disclosure Statement
DIAMOND BRANDS: Court Confirms Jarden's $90MM Acquisition Plan
DION ENTERTAINMENT: Inks Consultancy Pact with Triple Five Group
DION ENTERTAINMENT: Has Until Jan. 15, 2004 to Solve TSX Issues

EASYLINK: Broker Gets $931K Judgment on Breach of Contract Suit
ENRON CORP: Upstream Energy Seeks Lifting of Automatic Stay
EXIDE TECH: Creditors Committee Retains Sonnenschein as Counsel
FEDERAL-MOGUL: Buying Honeywell's Bendix Friction Materials Biz
FEDERAL-MOGUL: Core Parties-in-Interest Agree on Plan Terms

FIRST HORIZON: Fitch Rates Note Classes B-4 & B-5 at Low-B Level
FLOWERS FOOD: Fitch Places BB+ Rating on Watch Positive
GADZOOX NETWORKS: Records First Profitable Quarter
GENUITY INC: Retains Morrison & Foerster as Special Counsel
GLOBAL CROSSING: Swisscom Settlement Pact Gets Court Approval

GLOBALSTAR: Looking for New Investor After New Valley Ends Pact
IMC GLOBAL: Reports Reduced Q4 2002 Loss From Operations
INTEGRATED HEALTH: Seeks Nod for 2nd DIP Financing Amendment
ISLE OF CAPRI: S&P Assigns B+ Bank Loan & Corp. Credit Rating
ITALY FUND: Shareholders Approve Liquidation & Dissolution Plan

KMART: Unveils 'Savings Are Here To Stay' Marketing Campaign
LERNOUT: Wants More Time to Challenge Claims Until March 29
LTV CORP: Brings-In Towers Perrin as Insurance Auditors
LUMENON: Conv. Noteholders Seek to End LILT's CCAA Protection
MATLACK SYSTEMS: Chapter 7 Trustee Hires Stanford as Consultant

MCCRORY CORP: Files Plan and Disclosure Statement in Delaware
MID-POWER SERVICE: Section 341 Meeting to Commence on Feb. 26
NATIONAL BEDDING: S&P Rates Corporate Credit & Bank Loan at B+
NAT'L CENTURY: Amedisys Demands Prompt Decision on Sale Pact
NATIONAL STEEL: Inks $1.125B Asset Purchase Pact with AK Steel

NATIONAL STEEL: US Steel Reaffirms Interest in Doing a Deal
NATIONAL STEEL: USWA Issues Comments on New Bid Developments
NEXSTAR: S&P Rates Planned $170M & $85M Credit Facilities at B+
NORTHWESTERN CORP: Responds to FERC's Information Request
NTL: New Order Extends Stay Relief for Settlement Adjustments

OHIO CASUALTY: Reports Selected Fourth Quarter 2002 Items
PACIFIC GAS: Wants to Pay $157.5MM FERC-Ordered Refund Dues
P-COM: December 2002 Balance Sheet Upside Down by $15 Million
PEACE ARCH: November 2002 Equity Deficit Tops CDN$5 Million
PENN NAT'L: S&P Assigns B+ Rating to Proposed $1BB Bank Facility

POLYONE CORP: Discloses $17.5MM Net Loss For Fourth Quarter 2002
POTLATCH: S&P Hatchets Credit Rating to BB+ over Weak Financials
PRIMUS TELECOM: Further Reduces Debt by over $64 Million
QWEST COMMS: Files Proposal to Resolve Issues With FCC
REGUS BUSINESS: Seeking Court Nod to Hire Pillsbury Winthrop

SAFETY-KLEEN: Court Approves Settlement Pact with Three Insurers
SIRIUS:  Launches Exchange Offer for Outstanding Debt
SORRENTO NETWORKS: Plans to Appeal Nasdaq's Delisting Decision
SUN WORLD: Files Voluntary Chapter 11 Petition in California
SYSTECH RETAIL: Creditors' Meeting will Convene on Mar. 5

TELESYSTEM: Prepares Prospectus re Offer & Resale of 14% Notes
TEXFI INDUSTRIES: Trustee Hires Verdolino & Lowey as Accountant
TRINITY ENERGY: Files for Chapter 11 Reorganization in Texas
TRANSFIN'L HLDGS: Performance Capital Reports 8.56% Equity Stake
TRISM: Wants to Stretch Plan Filing Exclusivity though April 11

TWEETER HOME: Obtains Waiver of Q4 EBITDA Covenant Violation
TYCO INT'L: Nominates H. Carl McCall to Board of Directors
UNITED AIRLINES: Retains Paul Hastings for Labor Advice
US AIRWAYS: Willard Seeks Stay Relief to Initiate Litigation
US AIRWAYS: Files for Distress Termination of Pilot Benefit Plan

UNIVANCE TELECOMMS: Case Summary & Largest Unsecured Creditors
VENTAS: Debra Cafaro Replaces Bruce Lunsford as Board Chairman
WHEREHOUSE: Berger Appointed as Court Noticing and Claims Agent
WORLDCOM INC: Pulling Plug on Backhaul Agreement with Sprint
WORLDCOM: SBC Reports Customer Complaints Against MCI

XM SATELLITE: Bond Exchange Prompts S&P's Default-Level Ratings

* BOND PRICING: For the week of February 3 - 7, 2003

                          *********

ADELPHIA BUS.: Court Okays $10MM Closed Markets Sale to Gateway
---------------------------------------------------------------
In connection with the downsizing of their business operations
and their exit from certain markets, Adelphia Business
Solutions, Inc., and its debtor-affiliates sought and obtained
Court approval to sell certain assets and to assume and assign
certain executory contracts and unexpired leases to Gateway
Columbus, LLC, for $10,700,000, plus Gateway's assumption of
certain contractual liabilities.  

Other than the liens granted to Beal Bank, as postpetition
lender under the credit agreement dated August 7, 2002, and the
liens granted to ACOM in respect of the limited postpetition
funding provided by ACOM in the credit agreement dated March 27,
2002, the Debtors are not aware of any liens relating to the
Assets, except for certain purchase money security interests
asserted by Lucent Technologies, Inc.  The Assets Sale is free
and clear of any and all liens, claims and encumbrances with any
of liens to be transferred and attached to the net proceeds of
the sale, with the same validity and priority that these liens,
claims and encumbrances had against the Sale Assets. (Adelphia
Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


AIRGAS: Fin'l Profile Improvements Prompt S&P's Outlook Revision
----------------------------------------------------------------
Standard & Poor's Rating Services revised its outlook on
packaged gas distributor Airgas Inc., to positive from stable
based on expectations that the company's financial profile will
continue to strengthen as economic conditions improve. Standard
& Poor's said that it has affirmed its 'BB' corporate credit
rating on the Radnor, Pennsylvania-based company. At
September 30, 2002, the company had total debt of $876 million.

"Meaningful debt reduction has occurred at Airgas, demonstrating
the resilience of its cash flows despite challenging economic
times", said Standard & Poor's credit analyst Wesley E. Chinn.
"Accordingly," he continued, "it is possible that the ongoing
pursuit of strategic acquisitions will not hamper the
strengthening of debt leverage measures to levels appropriate
for a higher rating".

Airgas Inc.'s credit quality reflects its business position as
the leading North American distributor of industrial gases and
related equipment and relatively stable cash flows, offset by
the moderate cyclicality of the manufacturing and industrial
markets served, fragmented industry competition, and an
aggressive financial profile.

Airgas Inc.'s 9.125% bonds due 2011 (ARG11USR1), DebtTraders
reports, are trading at 97 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ARG11USR1for  
real-time bond pricing.


ALTERRA HEALTHCARE: Gets Interim Court OK to Use Cash Collateral
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave its
nod of approval to Alterra Healthcare Corporation's request to
use Cash Collateral on an interim basis.  The Court grants
Alterra permission to draw up to an aggregate principal amount
of $6,500,000 pending a Final Hearing scheduled for February 18,
2003.  At that hearing, the Debtor will request that its be
granted continuing authority to dip into cash collateral through
May 31, 2003.  

The Debtor intends to use the Cash Collateral in accordance with
its operations of the residences in the ordinary course of its
business and to satisfy the obligations necessary to operate and
manage its assets. Without the ability to use Cash Collateral,
the Debtor will suffer immediate irreparable harm and will be
unable to satisfy necessary and ongoing expenses incurred in the
operation of the applicable residences, thus impairing, if not
eliminating, its ability to provide quality care to its
residents.

As adequate protection for their interests in the Collateral,
Alterra proposes to grant the subsidiaries and third parties,
replacement liens, to the extent of diminution in value of the
Collateral from the Debtor's postpetition use, as applicable
based upon the security interests held by such party.

The Debtor asserts that the replacement liens to be granted in
this regard are sufficient to provide adequate protection to the
subsidiaries and third parties to the extent of the diminution,
if any, in the value of the underlying Collateral.

Alterra Healthcare Corporation, one of the nation's largest and
most experienced healthcare providers operating assisted living
residences, filed for chapter 11 protection on January 22, 2003,
(Bankr. Del. Case No. 03-10254). James L. Patton, Esq., Edmon L.
Morton, Esq.. Joseph A. Malfitano, Esq., and Robert S. Brady,
Esq., at Young, Conaway, Stargatt & Taylor LLP represent the
Debtors in their restructuring efforts. When the Company filed
for protection from its creditors, it listed $735,788,000 in
assets and $1,173,346,000 in total debts.


AMERICAN COMMERCIAL: Files for Chapter 11 Protection in Indiana
---------------------------------------------------------------
American Commercial Lines LLC filed a petition with the U.S.
Bankruptcy Court for the Southern District of Indiana, New
Albany Division, to reorganize under Chapter 11 of the U.S.
Bankruptcy Code. The Company said that it filed to reorganize
its capital and debt structure in an orderly fashion while
continuing normal business operations. Included in the filing
are ACL, ACL's Parent American Commercial Lines Holdings LLC,
American Commercial Barge Line LLC, Jeffboat LLC, Louisiana Dock
Company LLC and ten other U.S. subsidiaries.

ACL said that its ability to operate normally will not be
affected by the reorganization. The Company has requested and
expects to receive court permission to continue to pay employee
salaries, wages and benefits and pay suppliers for the post-
petition delivery of goods and services. ACL reiterated that its
top priority remains providing customers with safe, reliable and
on-time delivery service.

Michael C. Hagan, President and Chief Executive Officer of ACL,
said, "This is an important step for ACL to resolve its
financial challenges, put the Company on firm financial footing
and emerge stronger, more competitive and better able to
withstand market fluctuations. During this process, we will work
with our stakeholders to develop a plan to reduce our debt, as
well as examine all aspects of our operations to ensure we are
utilizing our assets in the best possible way. Our operating
priorities remain unchanged: safety of life and limb, safety of
environment, safety of equipment and providing the highest
quality service to our customers at the lowest possible cost.
ACL is a strong company with a great heritage and outstanding
people. We believe that the outcome of this process will provide
us with a solid foundation for our future success."

ACL reported that in conjunction with its filing, it has
arranged commitments for up to $75 million in debtor-in-
possession ("DIP") financing from a group of banks led by
JPMorgan Chase Bank. In addition to normal cash flow from
operations, the DIP financing helps ensure that ACL has
sufficient liquidity to continue normal operations. ACL is
committed to serve its customers and pay post-petition vendors
in the normal course.

Over the past year, ACL has faced a number of unprecedented
challenges that have resulted in the need to restructure its
balance sheet. These challenges include the general economic
slowdown and global economic recession, unforeseen continuing
declining barge rates in 2002, lower commodity shipping volumes,
excess barging capacity, and a ten week strike at the Company's
shipyard. Given these and other factors, ACL determined that its
current debt burden is too high and that a restructuring under
Chapter 11 offered ACL the most viable opportunity to reduce its
debt while continuing operations.

As of December 27, 2002, ACL had assets of $814 million and
liabilities of $769 million. The Company said that over the
coming months, it will work with all of its stakeholders on the
development of a plan of reorganization that will be filed with
the court at a later date. The Company's legal counsel is Baker
& Daniels of Indianapolis, Indiana, and its financial advisors
are Richard Weingarten & Company, Inc., and Huron Consulting
Group LLC.

ACL is a wholly owned subsidiary of Danielson Holding
Corporation (Amex: DHC). ACL is an integrated marine
transportation and service company operating approximately 5,000
barges and 200 towboats on the inland waterways of North and
South America. ACL transports more than 70 million tons of
freight annually. Additionally, ACL operates marine
construction, repair and service facilities and river terminals.

DHC is an American Stock Exchange listed company, engaging in
the financial services, specialty insurance and marine
transportation businesses through its subsidiaries. In
connection with efforts to preserve DHC's net operating tax loss
carryforwards, DHC has imposed restrictions on the ability of
holders of five percent or more of DHC common stock to transfer
the common stock owned by them and to acquire additional common
stock, as well as the ability of others to become five percent
stockholders as a result of transfers of DHC's common stock.


AMERICREDIT CORP: Fitch Lowers Senior Unsecured Rating to B+
------------------------------------------------------------
Fitch Ratings lowers AmeriCredit Corp.'s senior unsecured rating
to 'B+' from 'BB'. The ratings have been lowered and removed
from Rating Watch Negative where they were placed on
January 17, 2003. The Rating Outlook is now Negative.
Approximately $375 million of senior unsecured debt is affected
by this rating action.

Fitch's rating action reflects deterioration in asset quality
beyond expectations coupled with concerns regarding liquidity
and ongoing access to the asset-backed securities markets.
AmeriCredit is experiencing higher net charge-offs due to lower
than expected recovery rates on repossessed vehicles. Fitch
believes that used car prices will remain pressured due to
continued high incentive financing, which indirectly depresses
used car values. Furthermore, given the weaker economic
environment, consumer defaults will likely remain at elevated
levels over the near to intermediate term. As such, Fitch
believes that AmeriCredit will remain challenged to control
credit quality in an environment where structural changes in the
used car market have negatively impacted the company's operating
performance. Fitch's Negative Rating Outlook reflects this
difficulty.

The difficult operating environment will likely pressure the
company's liquidity, at least over the near term. The company's
weaker asset quality measures could make access to term asset-
backed securitization more difficult and costly to obtain.
AmeriCredit's continued reliance on bond insurers to execute its
secured financings, further magnifies its liquidity risk. As a
result, AmeriCredit may face higher credit enhancement
requirements, coupled with higher pricing on its term asset
backed transactions. In addition, Fitch notes that more recent
securitization trusts may trap cash early in the life of the
pool, which was not previously anticipated following the
company's equity offering in September 2002. Fitch had
previously expected pools executed in the 2000 time frame to hit
cumulative loss triggers and trap cash, however, the potential
impact of additional and more recent pools trapping cash is an
unexpected strain on liquidity.

Fitch is mindful that the company is subject to various
performance and financial triggers in its warehouse and term
asset-backed transactions. Warehouse covenants include:
annualized managed net charge-offs must not be greater than 8%,
managed delinquencies (61+ days) must not be greater than 5.5%;
and monthly deferments, calculated on a three-month average, on
warehouse receivables must be less than 5% or 2.5% in some of
their facilities (2% as of December 31, 2002). Given the
circumstances, Fitch believes that AmeriCredit will be
challenged to avoid tripping performance or financial triggers.

In response to asset quality deterioration, AmeriCredit has
tightened underwriting criteria and instituted changes in
servicing and collection practices. While these measures may
improve the performance of loans originated under these more
stringent standards, the company will continue to be impacted by
loans underwritten before these changes. To the company's
credit, it does have a sizable amount of unrestricted cash at
this time, however, AmeriCredit will need to more conservatively
manage its receivable growth and operations to preserve this
liquidity.


ANC RENTAL: Court Okays Payment of Due Diligence Fees to Lenders
----------------------------------------------------------------
Mark J. Packel, Esq., at Blank Rome Comisky & McCauley LLP, in
Wilmington, Delaware, explains that ANC Rental Corporation, and
its debtor-affiliates require postpetition financing primarily
for working capital needs in the ordinary course of business and
to begin the process of acquiring additional vehicles to fleet
up for the peak summer months.  The Debtors have received term
sheets from potential DIP lenders, several of which have
requested reimbursement of due diligence fees and expenses.  
These lenders have indicated that absent the Debtors' ability to
pay these fees and expenses, they would not commence due
diligence.  The reimbursement of due diligence costs for
potential DIP Lenders and the payment of a commitment or up-
front fee after receipt of executed financing commitment letters
are necessary to enable the Debtors to obtain financing and to
continue reorganizing their businesses.

Thus, the Debtors seek the Court's authority to reimburse or pay
potential DIP Lenders for their due diligence costs and to pay
commitment or up-front fees to potential DIP Lenders for
providing a firm commitment to provide them with sufficient DIP
Financing to meet their financing needs.

Mr. Packel relates that after completion of due diligence and
the receipt of a firm proposal, the Debtors will pay the
selected DIP Lender the Commitment or Up-Front Fee and
immediately thereafter submit another motion seeking Court
approval to enter into postpetition financing.  Time is of the
essence with respect to the approval of the Motion and the
ultimate DIP Financing.  The Debtors require the financing to
purchase additional cars for their fleet in advance of the prime
summer travel season.  Absent DIP financing, the Debtors'
ability to successfully reorganize their businesses will be
jeopardized.

According to Mr. Packel, the Debtors have met their daily cash
needs for the past 15 months through the agreed-to use of cash
collateral, and until now, did not have a need for postpetition
DIP financing.  The Debtors forecast that they will require an
additional $75,000,000 liquidity facility to carry them through
2003.  The Debtors' forecasts anticipate that existing cash
collateral will need to be supplemented from time to time with
postpetition financing for working capital needs as well as to
provide fleet over-collateralization to enable the Debtors to
acquire additional vehicles for their peak summer revenue-
generating requirements.  Postpetition financing will improve
the Debtors' long-term profitability and maximize the value of
the Debtors' estates for the benefit of all creditors.  The
Debtors, therefore, began eliciting proposals from qualified
financial institutions for this financing.

Mr. Packel reports that the Debtors have had extensive
discussions with numerous parties, including existing secured
lenders as well as potential new investors and lenders,
regarding additional equity and debt financing.  While several
of these discussions have shown some promise to date, most
potential lenders must conduct extensive due diligence on the
Debtors' business, assets, financial projections, management
personnel, and other matters that would impact the DIP Financing
and the lenders' associated risks prior to making a financing
commitment. To conduct this due diligence, potential lenders
will need to employ professionals and will incur a number of
other expenses.

Mr. Packel asserts that financing commitment fees are viewed as
a "fact of financial life."  Although the Debtors are not
currently in a position to provide the terms of any specific
proposal, when the Debtors are in this position, the Debtors
will provide notice of any proposal to the Office of the United
States Trustee, counsel for the Official Committee of Unsecured
Creditors and counsel for the Secured Creditors and provide them
five days to object to the payment of the fees.

                          *   *   *

Accordingly, Judge Walrath authorizes the reimbursement of
reasonable due diligence fees to potential DIP Lenders provided,
however, that prior to making payment of any fees, the Debtors
will send written notice to these entities which will include a
copy of any DIP financing proposal pursuant to which any fees
would be paid and their amounts:

    -- the Office of the U.S. Trustee;

    -- counsel for the Official Committee of Unsecured
       Creditors;

    -- counsels for Congress Financial;

    -- Lehman Brothers, Inc.; and

    -- Liberty Mutual Insurance Company.

Judge Walrath further orders that the Notice Parties should keep
any proposal confidential and should not share the terms with
any other person, without the Debtors' written express
permission. The Notice Parties will have five business days to
file an objection and, in the event of any objection, no fees
will be paid or payable until the objection has been withdrawn
in writing or a further order is entered following a hearing on
at least two business days to the Notice Parties authorizing the
payments. (ANC Rental Bankruptcy News, Issue No. 26; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


ANGEION: Reports Results for 10-Month Period Ended October 2002
---------------------------------------------------------------
Angeion Corporation (Nasdaq: ANGN) has reported results for the
ten-month period ended October 31, 2002, reflecting a change in
the Company's fiscal year and the "fresh start" accounting rules
that the Company is required to adopt in connection with its
emergence from bankruptcy on October 25, 2002, pursuant to its
Joint Modified Plan of Reorganization under Chapter 11 of the
federal bankruptcy laws.

For the ten-months ended October 31, 2002, total revenue was
$13.4 million compared to $13.2 million for the same ten-month
period in 2001. The net loss for the ten months ended October
31, 2002 was $1.6 million, or $0.44 per share, compared to a net
loss of $5.1 million, or $1.45 per share, for the ten months
ended October 31, 2001. Results for the ten month period ended
October 31, 2002 were favorably affected by the Company's
receipt of $2.9 million in licensing revenues resulting from
settlement of a lawsuit. The Company changed its fiscal year to
coincide more closely with buying patterns in its Medical
Graphics' medical equipment business and its New Leaf health and
fitness product business.

Rick Jahnke, President and Chief Executive Officer of the
Company, stated, "With the implementation of the fresh start
accounting and change in our fiscal year, we have completed our
debt restructuring and the re-positioning of our business. We
look forward to the opportunities ahead. Our core Medical
Graphics products continue to show increases in U.S. demand over
the prior year and we are especially encouraged by the market
response to the recent introduction of our New Leaf health and
fitness weight loss training products at the Club Industry 2002
tradeshow. These products, which are marketed to consumers
primarily through health and fitness clubs, help people achieve
their weight loss goals through accurate measurements of their
bodies' metabolic response to exercise."

Jahnke also noted the strength of the Company's balance sheet at
October 31, 2002. "With over $4.4 million in cash and cash
equivalents, no debt and nearly $18 million of shareholders'
equity, we have the resources to take advantage of our market
opportunities."

A detailed discussion of the Company's financial position,
results of operations and "fresh start" accounting principles is
contained in the Company's Form 10-KSB for the ten months ended
October 31, 2002, which was filed with the SEC on January 29,
2003.

Founded in 1986, Angeion Corporation acquired Medical Graphics
-- http://www.medgraphics.com-- in December 1999. Medical  
Graphics develops, manufactures and markets non-invasive cardio-
respiratory diagnostic systems and related software for the
management and improvement of cardio-respiratory health. The
Company has also introduced a line of health and fitness
products, many of which are derived from Medical Graphics' core
technologies. These products, marketed under the New Leaf Health
and Fitness Brand -- http://www.newleaf-online.com-- help  
consumers effectively manage their weight and improve their
fitness. They are marketed to the consumer primarily through
health and fitness clubs and cardiac rehabilitation centers. For
more information about Angeion, visit http://www.angeion-ir.com  


ASIA GLOBAL CROSSING: Turns to Kasowitz Benson Torres for Advice
----------------------------------------------------------------
Asia Global Crossing Ltd., and its debtor-affiliates sought
court approval pursuant to Bankruptcy Code Section 327(a) to
employ Kasowitz, Benson, Torres & Friedman LLP, under a general
retainer, as their attorneys in connection with the commencement
and prosecution of these Chapter 11 cases to perform the
extensive legal services that will be necessary during their
Chapter 11 cases in accordance with the Firm's normal hourly
rates in effect when services are rendered and normal
reimbursement policies.

Kasowitz will:

  A. render assistance and advice, and represent the Debtors
     with respect to the administration of these cases and
     oversight of the Debtors' affairs, including all issues
     arising from or impacting the Debtors or these Chapter 11
     cases;

  B. take all necessary action to protect and preserve the
     estate of the Debtors, including the prosecution of actions
     on the Debtors' behalf, the defense of any actions
     commenced against the Debtors, the negotiation of disputes
     in which the Debtors are involved, and the preparation of
     objections to claims filed against the Debtors' estates;

  C. assist the Debtors in maximizing the value of its assets
     for the benefit of all creditors, including, if applicable,
     in connection with seeking a potential sale of the Debtors'
     assets;

  D. prepare on behalf of the Debtors, as debtors-in-possession,
     all necessary motions, applications, answers, orders,
     reports, and other papers in connection with the
     administration of the Debtors' estates;

  E. negotiate and prepare on behalf of the Debtors a plan of
     reorganization and all related documents;

  F. appear in Court and representing the interests of the
     Debtors; and

  G. perform all other necessary legal services in connection
     with the prosecution of these Chapter 11 cases.

Kasowitz will be paid its customary hourly rates for services
rendered that are in effect from time to time, and will be
reimbursed according to the Firm's customary reimbursement
policies.  Kasowitz's current customary hourly rates, subject to
change from time to time, are:

          Members                        $475-690
          Counsel and Associates          200-450
          Paraprofessionals                90-150
(Global Crossing Bankruptcy News, Issue No. 33; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

DebtTraders reports that Asia Global Crossing's 13.375% bonds
due 2010 (AGCX10USR1) are trading at 11.75 and 12.75 . See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AGCX10USR1
for real time bond pricing.  


THE AUXER GROUP: Viva Airlines Becomes Wholly-Owned Subsidiary
--------------------------------------------------------------
On January 8, 2003, The Auxer Group, Inc., entered into a Stock
Exchange Agreement and Plan of Reorganization with Viva
Airlines, Inc., pursuant to which The Auxer Group issued
246,000,000 of its shares to the shareholders of Viva Airlines,
Inc. As a result, Viva Airlines, Inc., became a wholly owned
subsidiary of the Company.

The shareholders of Viva Airlines, Inc., who obtained control of
The Auxer Group are as follows: Old Mission Assessment
Corporation, Robert J. Scott, Joan Jolitz, Enterprises D and D,
Lazaro Canto, and Bash, LLC. This group collectively now
controls a little more than 50% of the issued and outstanding
stock of Viva Airlines, Inc.  No other consideration was given
to Viva Airlines, Inc., for the issuance of these shares.

The current officers and directors of the Company, resigned and
Robert J. Scott became the Company's sole Director and
President.

The Auxer Group's September 30, 2002 balance sheet shows a
working capital deficit of about $1.5 million, and a total
shareholders' equity deficit of about $2.5 million.


BIKE ATHLETIC: Russell Corporation Acquires Assets for $16.25MM
---------------------------------------------------------------
Russell Corporation (NYSE: RML) reached an agreement to acquire
Bike Athletic Company for $16.25 million. It is anticipated that
the U.S. Bankruptcy Court for the Eastern District of Tennessee
will approve the agreement in the next few days.

Bike, headquartered in Knoxville, Tenn., filed for bankruptcy on
June 20, 2002 and had been operating under chapter 11
protection. The company had sales of approximately $35 million
in 2002. Bike's products include athletic supporters, knee and
elbow pads, braces, protective equipment, team uniforms and
performance apparel under several brand names including Bike,
Lady Bike, Compression Performance Short, BMS, SXT and Sportfit.

"The Bike brand itself is well-known and respected in the
athletic world, and we believe it is a perfect fit with our
ongoing efforts to expand our business based on our athletic
heritage," said Jack Ward, chairman and CEO.

Bike Athletic was founded in 1874 as the developer of the
original athletic supporter and is known for product innovation
including the development of compression shorts. It has become a
leading provider of athletic-related products sold to the team
sport and individual recreational markets through recreational
team dealers, sporting goods retailers and mass merchants. It
currently employs approximately 100 people at its Knoxville
operation.

Russell Corporation is a leading branded athletic, activewear,
and outdoors company with over a century of success in marketing
athletic uniforms, apparel and accessories for a wide variety of
sports, outdoor and fitness activities. The company's brands
include: Russell Athletic(R), JERZEES(R), Mossy Oak(R), Cross
Creek(R), Discus(R) and Moving Comfort(R). The company's common
stock is listed on the New York Stock Exchange under the symbol
RML and its Web site address is http://www.russellcorp.com


BURLINGTON IND.: Urges Court to Approve CD Leasing Master Lease
---------------------------------------------------------------
Rebecca L. Booth, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, relates that Burlington Industries, Inc.,
leases various types of information technology equipment,
including personal computers, servers, printers, routers and
associated software and licensed products from various lessors.  
The IT equipment is primarily used by the Burlington management,
staff and other workers in the day-to-day operation of its
businesses, including functions like payroll and benefit
administration, inventory tracking and monitoring, purchasing
and shipping and similar tasks.

The IT Equipment is vital to Burlington's ongoing operations and
restructuring efforts.  However, certain of the IT Equipment
will be returned to lessors as:

    -- the applicable lease expires;

    -- the equipment is no longer needed; or

    -- the lessors are unwilling to provide favorable lease
       terms to Burlington on a going forward basis.

To this end, Burlington has searched for alternative lessors to
provide replacement or new IT Equipment.  Ms. Booth informs the
Court that the Debtors have reached an agreement with CD
Leasing, LLC, which is fully described in a letter of intent
dated December 2, 2002 and the proposed master lease agreement
and form of schedule.

Pursuant to the Master Lease, Burlington, as lessee, will
initially lease approximately $3,000,000 worth of IBM computer
and servers, Lexmark and Hewlett Packard printers and Cisco
Routers for three years, subject to automatic monthly renewals
if no further action is taken.  At the end of the Initial Lease
Term, Ms. Booth cites, Burlington will have the option to:

    (a) purchase the Leased Equipment for fair market value;

    (b) renew the Master Lease for the Leased Equipment at a
  fair market value rental rate or;

    (c) return the Leased Equipment to CDL.

Under the Master Lease, Burlington may enter into additional
schedules from time to time, as additional IT Equipment is
required.  To secure Burlington's obligations under the Master
Lease, Burlington will provide CDL with a letter of credit in an
amount equal to the original cost of the equipment leased each
quarter under the Master Lease.

Ms. Booth argues that pursuant to Section 363(b)(1) of the
Bankruptcy Code, a debtor, in general, may use estate assets
outside of the ordinary course of its business, where the
transaction represents an exercise of the debtor's sound
business judgment.  Also, Section 364(b) gives the court "broad
authority to allow a debtor to obtain credit, out of the
ordinary course of business, and allowable as an administrative
expense."  Moreover, extensions of credit for which priority is
sought must be actual and necessary cost and expenses of
preserving the estate.

Ms. Booth maintains that Burlington, in its sound business
judgment, has determined that entry into and performance under
the Master Lease is in the best interest of its estate.  Since
the Petition Date, very few lessors of IT Equipment are willing
to continue to lease large quantities of new IT Equipment to
Burlington.

As the leases for IT Equipment expire or are rejected,
Burlington searched for alternative sources to obtain IT
Equipment at reasonable costs and under reasonable terms to
preserve and continue its business.  CDL has agreed to work with
Burlington to provide for and meet its IT Equipment needs on a
going forward basis, so long as Burlington provides CDL with the
Letter of Credit.

Ms. Booth contends that the entry into and performance under the
Master Lease, including the Letter of Credit, is in the best
interests of, and a necessary expense to preserve, its estate
because:

    (a) CDL is one of the few major IT Equipment lessors that is
        willing to lease IT Equipment to Burlington on
        commercially reasonable terms during these Chapter 11
        cases; and

    (b) a dependable supplier of IT Equipment is vital to
        Burlington's ability to continue its operations in the
        ordinary course.

Accordingly, the Debtors seek the Court's authority to enter
into and perform under the Master Lease Agreement with CD
Leasing, LLC, including the issuance of the proposed Letter of
Credit, pursuant to Sections 363 and 364(b) of the Bankruptcy
Code. (Burlington Bankruptcy News, Issue No. 24; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


CANNONDALE CORP: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Cannondale Corp.
        16 Trowbridge Drive
        Bethel, CT 06801     

Bankruptcy Case No.: 03-50117

Type of Business: The Debtor is a manufacturer and distributor
                  of high performance bicycles, all-terrain
                  vehicles, motorcycles and bicycling and
                  motorsports accessories and equipment.

Chapter 11 Petition Date: January 29, 2003

Court: District of Connecticut (Bridgeport)

Judge: Alan H. W. Shiff

Debtor's Counsel: James Berman, Esq.
                  Zeisler and Zeisler
                  558 Clinton Avenue
                  P.O. Box 3186
                  Bridgeport, CT 06605
                  Tel: 203-368-4234

Total Assets: $114,813,725

Total Debts: $105,245,084

Debtor's 20 Largest Unsecured Creditors:

Entity                                            Claim Amount
------                                            ------------
James R. Pyne                                       $2,028,444   
5 Tennyson Circle
New Hartford, NY 13413
Fax: 315-896-4148

Mizuho Bank, Ltd.                                     $971,481
Mr. Nishiyama
Nanba-ekimae Branch
6-15, Nanba 3-Chrome, Chuo-Ku
Osaka 542-0076, Japan

Lyon & Lyon                                           $932,538
Charles Fowler
1900 Main St., 6th Floor
Irvine, CA 92614
  
Answer Products                                       $704,157
Eva Kemmerer
28209 Avenue Stanford
Valencia, CA 91355
    
Fox Racing Shox                                       $703,015
Elizabeth Fox
130 Hanger Way
Watsonville, CA 95076
Tel: 831-768-1100

Frank Roth Company                                    $456,492
Lou Toffolow
1795 Stratford Ave.
Stratford, CT 06615

Stram Corporation                                     $451,007
Erin Riley
1333 N. Kingsbury, 4th Floor   
Chicago, IL 60622
Tel: 312-664-8800

Alcoa                                                 $433,132
Phyllis Waterbury
3131 East Main St.
Lafayette, IN 47905
Tel: 765-771-3540

N.S. International                                    $398,047
Mike Bonszak
800 Kirts Blvd. #300
Troy, MI 48084
Tel: 248-352-5410

Johnson Control Automotive                            $348,132
Aziza Kheloui
18 Chaususse Juler Cesar
BP 340 Osny, 95526 Cergy
Pontoise Cedex, France      
Tel: 331-53-232-094

Maguro                                                $324,287
Sabina Mai
Stuttgarter StaBe 48
Bad Urach, Germany
D-72574
          
Corry Metal Products                                  $261,287  
Randy Owen
1025 E. Columus Ave.
Corry. PA 16407
Tel: 814-664-7087

Protube, LLC                                          $256,423
Vbruce McGaller
762 River Road
Shelton, CY 06484
Tel: 230-225-9075

Penelec                                               $255,522
Ray Mielnik
PO Box 15152
Reading, PA 19612
Tel: 814-949-4611

Selle Royal SPA                                       $244,145

Crash Crest Co. Ltd.                                  $242,682

Industrial Tire Products                              $236,943

Marzocchi                                             $221,142

W & W Machine                                         $217,339

Mountain Graphix                                      $207,378


CANNONDALE CORP: Obtains Court Approval of Interim DIP Financing
----------------------------------------------------------------
Cannondale Corporation (Nasdaq: BIKE) recently filed a voluntary
petition for reorganization under Chapter 11 of the U.S.
Bankruptcy Code. The Bankruptcy Court has approved the interim
post-petition financing from the Company's lenders, The CIT
Group/Business Credit, Inc., and Pegasus Partners II, L.P., that
will be used to continue the operation of Cannondale's bicycle
business. The Company can use the financing to pay vendors for
goods and services received after the filing in the ordinary
course of business. The Company's foreign subsidiaries are not
included in the bankruptcy. Business done through Cannondale
subsidiaries in Europe, Japan and Australia accounted for
approximately 42% of the Company's total sales in fiscal 2002.

Under the terms of an agreement still subject to court approval,
Pegasus has agreed to act as the "stalking horse" in a Section
363 sale of substantially all of the Company's assets on a going
concern basis. That bid is subject to higher and better offers
at an auction anticipated to occur in mid-March.

Cannondale filed in the U.S. Bankruptcy Court in the District of
Connecticut (Bridgeport Division). Zeisler & Zeisler, PC is
acting as debtor's counsel and, subject to court approval,
Alvarez & Marsal, Inc. is providing the Company's Chief
Restructuring Officer. Legg Mason Wood Walker, Incorporated has
been retained as Cannondale's financial advisor and exclusive
sales agent during the auction process.

Cannondale officials also announced that a first wave of workers
is scheduled to return to its Bedford, Pennsylvania bike factory
in two weeks to resume production. A second wave of workers is
slated to return in early March. The workers had been idled
during a recent factory shutdown. During the shutdown Cannondale
has continued to ship bikes and other products from inventory
while also assisting dealers and customers with normal service
and warranty issues.

Cannondale's dealers have voiced their support of the Company
following Monday's Chapter 11 announcement. Jay Wolff of Helen's
Cycles, a six-store chain in southern California and one of
Cannondale's largest dealers, said: "Helen's Cycles is proud to
be a Cannondale dealer. We believe Cannondale's future will
remain strong, and we will continue to support it as we have in
years past."

Long-time Cannondale dealer George Gatto of Gatto Cycle Shop, a
two-store operation in the Pittsburgh area expressed similar
sentiments. "I certainly wish Cannondale the best, and we'll
definitely continue to support them as they work through this
challenge," said Gatto. "We've been a Cannondale dealer for more
than 20 years. I have great relationships with the people there,
and they've always treated us well."

John Crandall of Old Town Bike Shop in Colorado Springs noted
that he's glad to have Cannondale again focusing exclusively on
bicycles. "After 19 years with Cannondale, and with the best
product line-up ever in 2003, I'm looking forward to Cannondale
giving its full attention to bicycles," said Crandall.

The Company also received heartening news when it learned that
its sponsored road racing team, the Italian Saeco squad, had
been invited to compete at the 2003 Tour de France following a
two-year absence. The Tour de France is regarded as the premier
event in cycling competition, and the Saeco team is sponsored
through Cannondale's European subsidiary.


CAR RENTAL: Settles Dispute With Ford Motor Credit Company
----------------------------------------------------------
CRD Holdings, Inc. (PK:CRDH), and its parent company MAII
Holdings, Inc. (PK:MAII), have entered into a Forebearance
Agreement and Release with Ford Motor Credit Company. Pursuant
to this Agreement, the parties have settled their disputes and
FMCC will continue its credit facility (currently approximately
$13 million) on a restructured, amortizing basis until
December 31, 2003, provided that CRD does not default under the
Agreement.

"We are excited to turn this page in our history and appreciate
FMCC's willingness to work with us to restructure our credit
facility," said Chris Tyler, CEO of Car Rental Direct Holdings.
"The favorable impact on our cash flow puts us on more solid
ground when it comes to seeking additional long term flooring
lines to support our business growth requirements and to replace
the FMCC credit facility by the end of this year."

CRD has retained an investment banking firm to assist CRD in
raising capital through a private placement of equity
securities. This investment firm will also assist CRD in
identifying possible lenders to refinance the FMCC credit
facility and to obtain additional fleet financing facilities.
While management is optimistic about its ability to raise
additional capital and refinance the FMCC credit facility, there
can be no assurance that it will be successful in these efforts.


COMPUTER SUPPORT: General Services Cancels GSA1 Contracts
---------------------------------------------------------
Proxity Digital Networks, Inc. (PinkSheets:PDNW) announced that
its wholly owned subsidiary Computer Support Associates, Inc.,
has received notice from the General Services Administration
canceling GSA1 contracts for 2003. CSA was one of ten companies
awarded the right to market broadband services to the government
under the GSA1 contract. CSA has been operating under Chapter 11
bankruptcy protection and had recently filed a reorganization
plan.

William C. Robinson CEO, Proxity Digital Networks notes, "Since
the GSA1 contracts have been negated, we will not pursue
financial viability for our CSA subsidiary. Every Proxity
resource has now been allocated to the development and launch of
On Alert GDS and getting it to market as quickly as possible."

Proxity's current On Alert GDS version is designed to alert
Police Departments and authorities with accurate information
determining the origination of gunshots, the type of gun used
and number of shots fired. Anticipating completion of successful
testing, it will be clipped on power lines or mounted on light
poles or tall buildings in high crime areas. Once captured by
GDS, the gunshot information can be immediately transferred to
dispatch offices or directly to the "cops on the beat" via hand-
held devices allowing for rapid response and reaction. Upon
deployment of the current version, subsequent models will be
designed to accommodate the U.S. military, especially in urban
warfare situations. One such unit will be a miniature version of
the current model that can be programmed and attached to a
soldier's helmet or belt. When fired upon by a sniper, the unit
will alert the soldier as to the origin of the sniper fire.

Proxity Digital Networks, Inc. -- http://www.proxity.com-- is a  
New Orleans based development company with additional marketing,
sales and business offices in Tulsa, Irvine, and Washington DC.
The Company's two divisions specialize in the deployment and
integration of security protection technology, government
contract fulfillment, high-speed Internet access and Internet
web applications. Proxity is currently acquiring security
technology that will support a full line of interoperable
protection disciplines. Proxity has the exclusive global license
on the patent-pending On Alert Gunshot Detection System(TM) and
is presently conducting first stage development and testing in
Oklahoma. Second-generation prototypes are set for beta testing
deployment in Q1 of 2003. Upon completion of field tests and
release of a commercial production model, On Alert Gunshot
Detection System will be available to Federal, State and Local
governments.


CONSECO: Finance Debtor Taps Bridge Assoc. as Crisis Managers
-------------------------------------------------------------
Conseco Finance Corp., and its debtor-affiliates seek the
Court's authority to employ Bridge Associates, LLC as crisis
managers and operational consultants.

Charles H. Cremens, CFC President and CEO, relates that Bridge
specializes in operating, assisting and advising debtors,
creditors, investors and court-appointed officials in bankruptcy
proceedings and out-of-court restructurings.

As crisis manager and operational consultant, Bridge will:

    a) meet with senior management and financial staff to
       evaluate the CFC Debtors' cash flow and liquidity and
       propose and implement initiatives to improve these
       measures;

    b) work with management to identify cost reduction and
       corporate right-sizing opportunities;

    c) develop and present to the CEO and Board of Directors a
       wind down plan and budget designed to assist in the
       liquidation of the company through Chapter 11;

    d) assist in preparing for a Chapter 11 filing, including
       supervising the preparation of documents and schedules to
       comply with the Bankruptcy Code;

    e) work with financial staff to ensure that senior lenders
       and others have appropriate and timely information;

    f) meet with management to review their assessment of the
       current situation and evaluate their input for wind down;

    g) assist senior management in determining appropriate
       staffing levels;

    h) assist the CEO in implementing a Key Employee Retention
       Program;

    i) assist senior management with developing and executing
       negotiating strategies for dealing with senior debt
       holders, trade debt and other debts;

    j) attend meetings with senior management and the Board; and

    k) provide services on other matters as agreed upon by
       Bridge, the CEO and the Board.

The CFC Debtors have agreed to pay Bridge a $150,000 retainer.
Bridge will be entitled to a $500,000 success fee upon
consummation of a sale of the CFC Debtors' assets and $500,000
upon the effective date of a reorganization plan by the CFC
Debtors.  Mr. Cremens explains that the CFC Debtors will
reimburse Bridge for all reasonable expenses including travel,
lodging, postage, telephone and facsimile.  Jean FitzSimon of
Bridge, to the extent her input is appropriate and necessary,
will bill the Debtors $500 per hour.  The firm's current hourly
rates are:

          Principals                     $300 - 450
          Senior Associates/Consultants   250 - 300
          Associates/Consultants          200 - 275

Prior to the Petition Date, the CFC Debtors made two retainer
payments to Bridge.  The first $100,000 was made on
December 9, 2002.  The second, for $102,500, was made on
December 16, 2002, reflecting $52,000 in reimbursement and
$45,500 in fees.

Anthony H.N. Schnelling, Esq., a founding member and Managing
Director of Bridge, assures the Court that the firm qualifies as
a "disinterested person" within the meaning of Section 101(14)
of the Bankruptcy Code.  Bridge does not hold or represent any
party that holds an adverse interest against the CFC Debtors,
Mr. Schnelling adds. (Conseco Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   


CONSECO: Files Joint Plan & Disclosure Statement
------------------------------------------------
Conseco, Inc. (OTCBB:CNCEQ) filed its Joint Plan of
Reorganization and Disclosure Statement with the Bankruptcy
Court late Friday, taking another key step toward its successful
emergence from Chapter 11.  

The full text of the draft Joint Plan of Reorganization is
available at no charge at:

   ftp://ftp.creditorinfo.com/conseco/docs/ds_plan_w_notice.pdf

A full-text copy of the Debtors' Disclosure Statement explaining
their Plan is available at no charge at:

   ftp://ftp.creditorinfo.com/conseco/docs/ds_sch_ord_and_notices.pdf   

These documents are huge, multi-megabyte pdf files.  An
UNOFFICIAL 16-page EXCERPT extracted from the Debtors'
Disclosure Statement is available at no charge at:

     http://bankrupt.com/misc/BriefConsecoPlanSummary.pdf

Additionally, a copy of Millman USA's actuarial appraisal of
Conseco's insurance company subsidiaries as of June 30, 2002, is
available at no charge at:

   ftp://ftp.creditorinfo.com/conseco/docs/ds_Milliman_Valuation_Report.pdf

The hearing on the adequacy of the Company's Disclosure
Statement has been set for March 5, 2003.

     Conseco, Inc. President and Chief Executive Officer William
J. Shea said that following approval of the Disclosure Statement
by the Court, Conseco will commence the solicitation of votes of
its creditors for the approval of its Plan of Reorganization.

     "We have worked very hard with certain key creditor
constituencies to develop a Plan that will provide the
reorganized Conseco with a capital structure that can be
supported by cash flows from ongoing operations," said Mr. Shea.
Under the terms of the proposed Plan, which are consistent with
the agreement in principle announced on December 18, 2002, CNC
will substantially reduce its debt and future annual interest
expense. Upon emergence from Chapter 11, Conseco, Inc. will be
engaged exclusively in the insurance business.

     The Company's finance subsidiary, Conseco Finance Corp.
(CFC), continues to pursue the sale of its assets through the
Chapter 11 process. The proceeds from this sale are expected to
be used to satisfy the creditors of CFC.  The final sale hearing
is currently scheduled for March 5, 2003.





DIAMOND BRANDS: Court Confirms Jarden's $90MM Acquisition Plan
--------------------------------------------------------------
Jarden Corporation (NYSE: JAH) announced that the United States
Bankruptcy Court for the District of Delaware entered an order
confirming the Joint Plan of Reorganization of Diamond Brands
Operating Corp., and its affiliates.

Pursuant to the Plan, Jarden Corporation and its affiliates will
acquire substantially all of Diamond Brands' business assets and
assume certain liabilities in a transaction valued at
approximately $90 million. The acquisition is anticipated to
close on February 7, 2003.

Jarden Corporation is a leading provider of niche consumer
products used in the home under leading brand names including
Ball(R), Bernardin(R), Diamond Brands(R), FoodSaver(R),
Forster(R) and Kerr(R). In North America, Jarden is the market
leader in several niche categories, including home canning, home
vacuum packaging, kitchen matches, plastic cutlery and
toothpicks. Jarden also manufactures a wide array of plastic
products for third party consumer product and medical companies,
as well as its own businesses.


DION ENTERTAINMENT: Inks Consultancy Pact with Triple Five Group
----------------------------------------------------------------
Dion Entertainment Corp., (TSX:DIO) has pursued its
opportunities in an aggressive manner, and is pleased to
announce that an agreement has been finalized with North
Southern Investments Ltd. This agreement will see NS take an
active role in the affairs of the Company in an advisory
capacity commencing immediately.

NS is a subsidiary of the Triple Five Group, a diverse
conglomerate of successful operations. Currently one of the
largest real estate developers in Las Vegas, Nevada, Triple Five
may be better known to the general public as owners of the West
Edmonton Mall in Edmonton, AB, Mall of America in Minneapolis,
MN, and many other properties. Triple Five truly offers
significant depth and management expertise for Dion
Entertainment.

Triple Five is working with the Company to set up an advisory
board for further support of the Company's business
opportunities and management. The first act by this board will
be to appoint Mr. Marc Vaturi to the Company's Board of
Directors.

Marc Vaturi is a graduate of Osgoode Hall Law School. Marc has
worked as a business acquisitions analyst for the Triple Five
Group of Companies, where he provided infrastructure analysis
services for a small group of venture capitalists with a
specialized practice focusing on high-technology and
bio-technology enterprises.

A significant aspect of the advisory board is its relationship
to the Triple Five Group and the resulting involvement of this
group in the future affairs of the Company. This relationship
signifies a hallmark in the era of Dion Entertainment, and will
pave the way for Dion to become the dominant player in the world
of bingo gaming.

As well, the relationship with Triple Five is also intended to
solidify the Company's role in the completion and re-working of
gaming opportunities with the Venetian Hotel and resort in Las
Vegas, Nevada. This will provide for a re-establishment of
Dions' exclusive World Bingo Championship game in 2003.

The Company also announces that Mr. Louis Dion has been appointd
Chief Executive Officer of the Company and Mr. Christophe X
Taylor will become the Secretary of the Company. Further
appointments will be forthcoming.

These appointments reflect the sincere determination of this
Company's commitment to work towards any opportunities that have
been stated in previous announcements.

                         *   *   *

As previously reported in the Jan. 6, 2003, issue of the
Troubled Company Reporter, Dion received notice of Dave
Wallace's intention to appoint a receiver and in response has
taken action contesting Mr. Wallace's standing to appoint a
receiver.

In a separate proceeding Mr. Louis Dion, a director of the
Company, commenced further action against Mr. Wallace and his
related companies on December 23, 2002, and an interim
injunction was granted by the B.C. Supreme Court (S.C.B.C.
VANCOUVER REGISTRY ACTION NO. S027073) restraining Mr. Wallace
from dealing with all assets of the Company and its
subsidiaries.


DION ENTERTAINMENT: Has Until Jan. 15, 2004 to Solve TSX Issues
---------------------------------------------------------------
Mr. Lyle Rowland, Director of Dion Entertainment Corp.,
(TSX:DIO) provides this update to investors. The Company has
until January 15th, 2004 to remedy the specific concerns of the
TSX underlying its January 16th, 2003 decision to suspend
trading in the common shares of the Company. The new Board of
the Company is taking these recent developments into
consideration with its legal advisors, and is working diligently
to resolve TSX concerns in the best interests of the Company,
and its shareholders as soon as possible.

The recent decision by the Listings Committee of the TSX to
suspend trading was made following a hearing to determine if the
Company was able to meet the continued listing requirements of
TSX given recent developments.  The decision to suspend was made
largely in response to the Committee's concerns that the
Company's assets appear to have been seized on December 20th,
2002 through the instrument appointment of a receiver, which is
acting on behalf of D.A.W. Investments Limited a company
controlled by David Wallace, who is the largest shareholder of
the Company.  Related concerns were also that there might be
insufficient tangible assets to meet the Company's minimum
listing requirements given recent claims by DAW for an amount of
approximately $6 million in debts alleged to be owed to it by
the Company.

In response to these allegations the new Board wishes to advise
the Company's shareholders that it is conducting a comprehensive
forensic review of all past dealings involving Wallace and DAW.  
The focus of this review includes all financial, business and
trading activities by Wallace, DAW, and their nominees, as such
activities relate to a variety of allegations being advanced by
Wallace and DAW against the Company.  It has become apparent
that many discrepancies exist with respect to the various
allegations being made by Wallace and DAW.  The review also
focuses on circumstances surrounding a Consulting Agreement
dated August 1st, 2001 executed by Wallace and the Company after
a loan agreement dated June 17, 1999 and a series of pledge
agreements and amending agreements dating back to January 31,
1996.

Restoration of trading in the common shares of the Company is
largely dependent upon the outcome of the Company's legal action
commenced on December 23rd, 2002 against David Wallace and DAW
in response to their appointment of a receiver under the terms
of the disputed agreements.  The new Board will provide a
further report following a definitive ruling to a variety of
applications presently before the Court.


EASYLINK: Broker Gets $931K Judgment on Breach of Contract Suit
---------------------------------------------------------------
In connection with the termination of an agreement to sell the
portal operations of EasyLink Services Corporation's
discontinued India.com business, the Company brought suit
against a broker that it had engaged in connection with the
proposed sale of the portal operations alleging, among other
things, breach of contract and misrepresentation. The broker
brought a counterclaim against the Company for a brokerage fee
that would have been payable on the closing of the proposed
sale. The court entered a judgment in the amount of $931,000
against the Company. The Company has filed a motion to alter the
judgment and intends to appeal the decision.

                         *   *   *

As previously reported, EasyLink Services Corporation (NASDAQ:
EASY), a leading global provider of services that power the
exchange of information between enterprises, their trading
communities and their customers, is seeking to restructure
substantially all of approximately $86.2 million of outstanding
indebtedness, including approximately $10.7 million of
capitalized future interest obligations. The Company is
currently in discussions with holders of its debt relating to
the proposed restructuring. To date, the holders of
approximately 70% of this debt have expressed interest in
completing a restructuring on the terms discussed.

Management seeks to restructure substantially all of the debt.
If all of the debt were successfully eliminated on the currently
proposed terms, the Company would pay approximately $2.0 million
in cash and issue up to 35 million shares of its Class A common
stock, including the shares issued to fund the cash payment. The
number of shares to be exchanged for each class of debt was
determined based on a deemed per share price of between $2.00
and $3.00.


ENRON CORP: Upstream Energy Seeks Lifting of Automatic Stay
-----------------------------------------------------------
Upstream Energy Service LLC, as agent for certain Texas Natural
Gas Producers, file on July 16, 2002 a secured claim for
$2,863,419, plus postpetition interest and reasonable collection
related attorneys' fees.  Barry A. Brown, Esq., in Houston,
Texas, explains that the UES Secured Claim arises from Enron
North America Corp.'s purchase of natural gas in that amount
through its "EnronOnLine" internet based purchasing vehicle.
This gas, Mr. Brown expounds, produced in Texas, was delivered
in November 2001 and to which gas, ENA was the "First Purchaser"
-- the Texas Production.

Under Section 9.343 of the Texas Business and Commerce Code,
every first purchase of natural gas produced in Texas is a
second transaction, with the seller having an automatically
arising and fully perfected security interest and lien in the
gas, all proceeds, and all rights to payment arising therefrom.  
Thus, Mr. Brown points out, with respect to the First
Production, ENA on the date of bankruptcy, held accounts
receivable or rights to payment and the proceeds thereof, as
collateral to which the security interest securing payment for
the Texas Production attached under Section 9.343 of the Texas
Business and Commerce Code and Section 552(b) of the Bankruptcy
Code.  These accounts and proceeds are cash collateral as
defined by the Bankruptcy Code.

Mr. Brown notes that ENA had allowed its parent, Enron Corp., to
"sweep" cash from ENA's postpetition cash accounts.  The Court
halted this practice.  Upstream sought an order to restrict ENA
from making use of its cash collateral and to restore cash
collateral to the extent of Upstream's claim.  Accordingly, the
Court directed ENA to retain in its cash accounts at least the
amount of Upstream's secured claim and to give notice should
account balances threaten to fall below that amount.  ENA
admitted the facts of the transaction but disputed ore reserved
the lien issues.

By this motion, Upstream asks the Court to lift the automatic
stay in order for it to take all necessary steps for it to
realize on the cash collateral, certain depository accounts
containing proceeds of the sale of natural gas to ENA and held
by ENA, including, without limitation, the cash accounts in the
name of ENA held at JPMorgan Chase or elsewhere -- the
Collateral.

Mr. Brown contends that under Texas law, a debtor owes a duty to
a secured party to provide the creditor, on request after
default, with information regarding the collateral, and to
assemble or turnover the collateral.  Moreover, under Texas law,
hindering a secured creditor's recourse to its collateral after
default is an offense.

Upstream has waited through the initial "fog of war" that is
inherent in early days of every large Chapter 11 to determine
whether the Collateral was "necessary" to an effective
reorganization of ENA.  ENA announced its intention to file a
liquidating plan.  Hence, Mr. Brown concludes, ENA does not have
any equity in the Collateral and the Collateral is not necessary
to reorganized.  The Upstream Secured Claim is either a fully
secured claim to be liquidated from the Collateral -- to the
extent that ENA holds cash collateral sufficient to liquidate
the price of the Texas Production, postpetition interest and
reasonable collection related attorneys' fees provided for by
Texas law, -- or ENA's resale transactions did not produce a
sufficient sum to cover the acquisition, plus interest and
attorneys' fees.

In this context, Mr. Brown asserts, the interpretive gloss
provided by the Supreme C0urt makes it clear that waiting for
the final plan confirmation is unnecessary:

    "Once the Movant under 362(d)(2) establishes that he is an
    undersecured creditor, it is the burden of the debtor to
    establish that the collateral at issue is 'unnecessary to
    an effective reorganization.'  What this requires is not
    merely a showing that if there is conceivably to be an
    effective reorganization, this property will be needed for
    it; but that the property is essential for an effective
    reorganization that is in prospect.  This mean, as many
    lower courts, including the en banc court in this case,
    have properly said, that there must be 'a reasonable
    possibility of a successful reorganization within a
    reasonable time.'808 F.2d, at 370-371, and nn.12-13, and
    cases cited therein.  The cases are numerous in which
    362(d0(2) relief has been provided within less than a year
    from the filing of the bankruptcy petition.  And while the
    bankruptcy courts demand less detailed showings during the
    four months in which the debtor is given the exclusive
    right to put together a plan, see Section 111(b),(c)(2) of
    the Bankruptcy Court, even within that period lack of any
    realistic prospect of effective reorganization will require
    362(d)(2) relief." United Savings of Texas v. Timbers of
    Inwood Forest, 484 U.S. 365,377(1988)

Among other things, Mr. Brown contends, Upstream is not
adequately protected because ENA has not made any postpetition
payments for the use and retention of the Collateral.  Moreover,
ENA's failure to pay for the Texas Production has worked a
hardship on Upstream and its principals. (Enron Bankruptcy News,
Issue No. 55; Bankruptcy Creditors' Service, Inc., 609/392-0900)


EXIDE TECH: Creditors Committee Retains Sonnenschein as Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of Exide Technologies and its debtor-affiliates sought and
obtained Court authority to retain Sonnenschein Nath & Rosenthal
as special litigation counsel nunc pro tunc to December 4, 2002.

Sonnenschein is expected to prosecute the claims and causes of
action with respect to the Debtors' Prepetition Lenders and
Agent including, advising and representing the Committee with
respect to:

   -- analyzing the possible claims of and against the
      Prepetition Lenders and Agent; and

   -- pursuing the Bank Litigation.

The current hourly rates charged by Sonnenschein's professionals
and paraprofessionals are:

      Billing Category            Hourly Rate
      -----------------           -----------
      Partners                     $225 - 775
      Associates                    125 - 400
      Paraprofessionals              70 - 230

These hourly rates are subject to annual adjustments to reflect
economic and other conditions. (Exide Bankruptcy News, Issue No.
17; Bankruptcy Creditors' Service, Inc., 609/392-0900)


FEDERAL-MOGUL: Buying Honeywell's Bendix Friction Materials Biz
---------------------------------------------------------------
Federal-Mogul Corporation (OTC Bulletin Board: FDMLQ) entered
into a letter of intent to acquire Honeywell's (NYSE: HON)
Bendix friction materials business. Consummation of the
acquisition will be conditional upon Honeywell receiving a
bankruptcy court-issued permanent injunction shielding it from
all current and future asbestos liabilities related to
Honeywell's worldwide friction materials business.

The completion of the acquisition is subject to Bankruptcy Court
approval and customary conditions, including obtaining any
governmental approvals, and will occur after Federal-Mogul
emerges from Chapter 11. Federal-Mogul, its United States
subsidiaries, and certain of its United Kingdom subsidiaries
voluntarily filed for financial restructuring under Chapter 11
of the U.S. Bankruptcy Code in October 2001.

Federal-Mogul Chairman and Chief Executive Officer Frank Macher
said: "This acquisition represents a unique way, given our
Chapter 11 status, to grow our core product base and position
Federal-Mogul to emerge from its bankruptcy proceedings a
stronger company."

Under terms of the transaction, Federal-Mogul would acquire
Bendix's worldwide friction materials business, with the
exception of certain U.S.- based assets, subject to certain
liabilities. For up to two years following the closing,
Honeywell will continue to operate certain of its U.S.-based
plants to manufacture friction materials on a contract basis for
Federal- Mogul. Federal-Mogul will obtain the rights to the
Bendix and Jurid brand names for friction products. Honeywell
would retain the right to use the Bendix brand name in its
aerospace business.

The Bendix friction materials business is a part of Honeywell's
Transportation & Power Systems group.

Federal-Mogul is a global supplier of automotive components and
sub- systems serving the world's original equipment
manufacturers and the aftermarket. The company utilizes its
engineering and materials expertise, proprietary technology,
manufacturing skill, distribution flexibility and marketing
power to deliver products, brands and services of value to its
customers. Federal-Mogul is focused on the globalization of its
teams, products and processes to bring greater opportunities for
its customers and employees, and value to its constituents.
Headquartered in Southfield, Michigan, Federal-Mogul was founded
in Detroit in 1899 and today employs 49,000 people in 24
countries. For more information on Federal-Mogul, visit the
company's web site at http://www.federal-mogul.com

Honeywell is a diversified technology and manufacturing leader,
serving customers worldwide with aerospace products and
services; control technologies for buildings, homes and
industry; turbochargers; automotive products; specialty
chemicals; fibers; and electronic and advanced materials. Based
in Morris Township, New Jersey, Honeywell is one of 30 stocks
that make up the Dow Jones Industrial Average and is a component
of the Standard & Poor's 500 Index. Its shares are traded on the
New York Stock Exchange under the symbol HON, as well as on the
London, Chicago and Pacific Stock Exchanges. For more
information about Honeywell, visit http://www.honeywell.com


FEDERAL-MOGUL: Core Parties-in-Interest Agree on Plan Terms
-----------------------------------------------------------
Late Friday, Federal-Mogul Corporation (OTC Bulletin Board:
FDMLQ) announced it has reached an agreement in principle with
its major U.S. creditor constituencies to the terms of a
consensual plan of reorganization.  The Official Committee of
Unsecured Creditors, the Official Committee of Asbestos
Claimants, the Steering Committee of Pre-Petition Lenders, Icahn
Associates (holder of a significant portion of the company's
debt securities) and the Futures Representative have all agreed
to the principal terms of a plan to reorganize the Company and
emerge from Chapter 11 free of asbestos liabilities, with a de-
leveraged balance sheet and a much stronger company.  The
agreement in principle is subject to Bankruptcy Court approval
and certain other terms and conditions.

The company and its U.S. creditor constituencies expect to file
a joint consensual plan of reorganization with the U.S.
Bankruptcy Court by the end of the company's current exclusivity
period in early March 2003.  The agreement in principle
contemplates, among other things, that noteholders and asbestos
claimants will convert all claims, which total in the billions,
into equity in the reorganized company.  Specifically, 49.9% of
the new common stock will be distributed to noteholders and
50.1% will be distributed to a trust established pursuant to
Section 524(g) of the Bankruptcy Code for the benefit of
existing and future asbestos claimants.  U.S. trade creditors
are expected to receive one or more cash distributions under the
plan.  The approximately $1.6 billion in claims of the Pre-
Petition Senior Secured Lenders will be restructured into a
combination of 6.5-year maturity Senior Secured Term Loans and
11-year maturity Junior Secured PIK Notes.

Federal-Mogul Chairman and Chief Executive Officer Frank Macher
said: "We are very pleased to announce that we reached this
important agreement and expect that we will emerge from Chapter
11 later this year with a much stronger balance sheet and with a
full resolution of the company's asbestos liability issues.  
This agreement, combined with our recently announced letter of
intent to acquire Honeywell's Bendix friction materials
business, should position the company to be an even stronger and
more competitive global supplier to the automotive industry.  
The plan will eliminate over $2.5 billion of interest-bearing
indebtedness, remove the taint of asbestos liabilities from the
company, and give customers, suppliers and other stakeholders
the confidence they need in the long-term health and success of
Federal-Mogul."
     

FIRST HORIZON: Fitch Rates Note Classes B-4 & B-5 at Low-B Level
----------------------------------------------------------------
Fitch rates First Horizon Asset Securities Inc. $439.3 million
mortgage pass-through certificates, Series 2003-1 classes I-A-1
through I-A-4, I-A-6 through I-A-10, I-A-12 through I-A-15, I-A-
R, and II-A-1 (senior certificates) 'AAA'. In addition, the $5.6
million class B-1 certificates are rated 'AA', the $2.3 million
class B-2 certificates are rated 'A', the $1.1 million class B-3
certificates are rated 'BBB', the $675,000 class B-4
certificates are rated 'BB' , and the $676,000 class B-5
certificates are rated 'B'.

The 'AAA' rating on the senior certificates reflects the 2.45%
subordination provided by the 1.25% class B-1, the 0.50% class
B-2, the 0.25% class B-3, the 0.15% privately offered class B-4,
the 0.15% privately offered class B-5, and the 0.15% privately
offered class B-6 (which is not rated by Fitch). Classes B-1, B-
2, B-3, B-4, and B-5 are rated 'AA', 'A', 'BBB', 'BB' and 'B'
based on their respective subordination.

Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults as well as bankruptcy, fraud and
special hazard losses in limited amounts. In addition, the
ratings reflect the quality of the mortgage collateral, strength
of the legal and financial structures, and the servicing
capabilities of First Horizon Home Loan Corporation, which is
currently rated 'RPS2' by Fitch Ratings.

The certificates represent ownership interests in a trust fund
that consists primarily of two separate pools of mortgages. The
certificates whose class designation begins with 'I' correspond
to Pool I. The certificates whose class designation begins with
'II' correspond to Pool II. The subordinated certificates
correspond to both mortgage pools. Each of the certificates
generally receive distributions based on principal and interest
collected from mortgage loans in its corresponding mortgage pool
or mortgage pools. If on any distribution date, the available
funds from one pool are insufficient to make distributions of
interest and/or principal on the related senior certificates,
available funds from the other pool will be available to cover
shortfalls of interest and/or principal distributions on that
other pool's senior certificates, after first making the
interest and/or principal distribution on its related senior
certificates, before any distributions of interest and/or
principal are made to the subordinate certificates. The
subordinate certificates will be cross-collateralized and will
receive interest and/or principal from available funds collected
in the aggregate from both mortgage pools.

Pool I consists of conventional, fully amortizing, fixed-rate
mortgage loans secured by first liens on one- to four-family
residential properties, substantially all of which have original
terms to maturity of 30 years. The mortgage pool has a weighted
average original loan-to-value ratio of 66.17%. The weighted
average FICO score is approximately 742. The average principal
balance of the loans in this pool is approximately $477,607.86.
Cash-out refinance loans account for 14.95% of the pool,
investor properties 0.32% and second homes 3.16%. The three
states that represent the largest portion of the mortgage loans
are California (39.75%), Virginia (8.72%), and Maryland (7.08%).

Pool II consists of conventional, fully amortizing, fixed-rate
mortgage loans secured by first liens on one- to four-family
residential properties, substantially all of which have original
terms to maturity of 15 years. The mortgage pool has a weighted
average original loan-to-value ratio of 57.13%. The weighted
average FICO score is approximately 747. The average principal
balance of the loans in this pool is approximately $477,520.91.
Cash-out refinance loans account for 19.88% of the pool,
investor properties 0.39% and second homes 4.18%. The three
states that represent the largest portion of the mortgage loans
are California (23.99%), Virginia (9.24%), and Maryland (8.98%).

Approximately 2.25% and 2.80% of the Group I and Group II
mortgage loans (2.52% of the Group I and Group II mortgage loans
in the aggregate), respectively, are secured by properties
located in the State of Georgia, none of which are covered under
the Georgia Fair Lending Act, effective as of October 2002.

All of the mortgage loans were originated or acquired in
accordance with First Horizon Home Loan Corporation's
underwriting guidelines. The trust, First Horizon Mortgage Pass-
Through Trust 2003-1, was created for the sole purpose of
issuing the certificates. For federal income tax purposes, an
election will be held to treat the trust as a real estate
mortgage investment conduit. The Bank of New York will act as
trustee.


FLOWERS FOOD: Fitch Places BB+ Rating on Watch Positive
-------------------------------------------------------
Fitch Ratings has placed its rating of Flowers Foods, Inc.'s
senior secured credit facilities ('BB+') on Rating Watch
Positive. This action follows Flowers' announcement that it has
agreed to sell Mrs. Smith's frozen dessert business to The
Schwan Food Company for $240 million (pre-tax) in cash. Proceeds
from this sale will be used primarily to pay down debt. Total
debt at Dec. 28, 2002, was approximately $250 million, including
$180 million of bank debt. Flowers' cash balance was $70
million. Fitch expects the Rating Watch Positive to be resolved
upon closing of this transaction. The transaction requires
regulatory approval and is expected to close in March 2003.
The sale is highly beneficial to the company's credit profile.
Mrs. Smith's frozen dessert business is seasonal, has high
working capital requirements and has experienced financial and
operating difficulties. In addition to anticipated debt
reduction, the divestiture should lead to greater cash flow
stability. While risk of significant debt financed acquisitions,
share repurchases or large dividend payments will increase with
the lifting of financial covenants associated with the bank
facilities, a major leveraging event is unlikely in the near
term.

Fitch's rating for Flowers considers the consistent cash flow
generated by the company's largest division, Flowers Bakeries,
which holds the number one position in fresh baked goods in 16
Southern States (serving 40% of the U.S. population). The rating
is supported by management's conservative financial policies,
improving credit statistics and low near term capital
requirements. For the year-ended Dec. 28, 2002 total debt-to-
EBITDA improved modestly to 1.9 times from 2.2x for the year-
ended Dec. 29, 2001 and EBITDA-to-interest incurred grew to 5.8x
from 3.2x.

Flowers Foods, with 2002 sales of $1.65 billion and EBITDA of
$128.8 million (from continuing operations before unusual
items), is one of the largest producers and marketers of bakery
and dessert products for retail and foodservice channels in the
United States.


GADZOOX NETWORKS: Records First Profitable Quarter
--------------------------------------------------
Gadzoox Networks, Inc., (OTC: ZOOX) a global supplier of proven
Fibre Channel technology for storage networking, filed its
operating report with the bankruptcy court and intends to emerge
from bankruptcy.

The Company recognized its first profitable quarter with a
profit of $.07 million based on revenue of $4.9 million and
operating expenses of $2.7 million. Other highlights for the
quarter included the signing of a government and commercial
focused OEM for the Company's 2Gb Slingshot technology and the
addition of another FabriCore Engines Open SAN OS customer.

On January 22, 2003, the Company filed a motion with the
bankruptcy court seeking approval of an asset purchase
agreement. The sale of these assets, coupled with the sale of
the remaining assets via a stock sale to be effectuated through
a plan of reorganization, is contemplated. If approved by the
bankruptcy court, the Company will emerge from bankruptcy.

Based on current information Gadzoox Networks believes when it
emerges from bankruptcy proceedings, its existing stock will
have no value. Additional information is available from Gadzoox
Networks bankruptcy counsel, Levene, Neale, Bender, Rankin &
Brill L.L.P., located in Los Angeles, CA.

Since 1996 Gadzoox Networks has led the industry in market
"firsts" and continues to drive the Storage Area Network (SAN)
market with innovative Fibre Channel switching technology. The
company has consistently delivered a time to market advantage to
major OEM customers enabling them to create clear business value
for their customer base. Gadzoox Networks is a voting member of
the Storage Networking Industry Association (SNIA), with
corporate headquarters located in Santa Clara, California. For
more information about Gadzoox Networks' products and technology
advancements in the SAN industry, visit the company's Web site
at http://www.gadzoox.com  

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

Morrison & Foerster will render various services to the Debtors
including:

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

      -- wholesale and retail communications products and
         services;

      -- contemplated commercial transactions; and

      -- corporate structure.

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

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

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

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

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

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

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

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

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

      -- is a creditor of the debtor.

      Certain pending Creditor- Side Matters include:

        a. Metromedia Fiber Network, Inc.;

        b. WorldCom, Inc.;

        c. Teleglobe Communications Corporation;

        d. CTC Communications Corp.; and

        e. e.spire Communications, Inc.

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

      -- adequate assurance under Bankruptcy Code Section 366;

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

      -- cure and assumption under Bankruptcy Code Section 365;

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

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

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

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

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

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

              Cheryl Tritt                  $495
              Kenneth W. Irvin               475
              Steven M. Kaufmann             435
              Scott Silverman                450
(Genuity Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


GLOBAL CROSSING: Swisscom Settlement Pact Gets Court Approval
-------------------------------------------------------------
Global Crossing Ltd., and its debtor-affiliates sought and
obtained Court approval of their Settlement Agreement with
Swisscom Fixnet AG.

According to Paul M. Basta, Esq., at Weil Gotshal & Manges LLP,
in New York, certain of the GX Debtors are parties to two
separate agreements with Swisscom Fixnet AG and certain of its
subsidiaries.  The first of these agreements, dated December 23,
1999, provided for the sale of network capacity by Global
Crossing Ireland Ltd. to Swisscom.  The other agreement, dated
May 27, 1999, was for the granting of a software license by
Global Crossing North America Inc. to Swisscom.

Under the Fiber Agreement, Mr. Basta tells the Court that the GX
Debtors sold network capacity to Swisscom.  Pursuant to the
Fiber Agreement, Swisscom purchased capacity credit points,
which entitled Swisscom to utilize capacity on various segments
of the GX Debtors' network.  In addition, pursuant to the terms
of the Fiber Agreement, Swisscom was entitled to Credit Points
for delays by the GX Debtors in the provision of network
capacity and other services under the Fiber Agreement.  As of
December 11, 2002, Swisscom holds Credit Points amounting to
$395,000.

Under the Licensing Agreement, Mr. Basta explains that Swisscom
purchased a non-exclusive license to use the Debtors'
proprietary software and documentation relating to the Debtors'
switchless wholesale telecommunications business.  In accordance
with the Terms of the License Agreement, Swisscom made a
$1,500,000 initial payment to the Debtors.  In addition,
Swisscom was required to pay $1,500,000 in royalty fees to the
Debtors over the first 24 months of System use.  However,
Swisscom had the right to terminate the Licensing Agreement
after 180 days written notice in exchange for a $750,000
termination fee.

Mr. Basta reports that a dispute arose as to whether Swisscom
actually terminated the License in accordance with the License
Agreement.  Swisscom maintains that it complied with the
Termination Provision and is, therefore, obligated to pay the
Debtors only the $750,000 termination fee.  The Debtors assert
that Swisscom did not properly terminate the License Agreement
and remains obligated to pay $1,500,000 in royalties.

The Debtors and Swisscom have agreed to a settlement of the
dispute relating to the Licensing Agreement.  The salient terms
of the Settlement Agreement are:

    -- Swisscom will pay the Debtors $750,000 as full and final
       payment for all obligations relating to the Licensing
       Agreement;

    -- Swisscom will waive all rights to its $395,000 in
       accumulated Credit Points;

    -- the Debtors will release and have no further claims
       against Swisscom based on the License Agreement; and

    -- Swisscom releases the Debtors from any claims against the
       Debtors regarding the $395,000 in accumulated Credit
       Points.

Mr. Basta asserts that the Settlement Agreement is fair and
equitable and falls well within the range of reasonableness as
it enables the parties to avoid the costs of litigation to
resolve outstanding issues relating to the License Agreement.

Although the Debtors believe that Swisscom did not comply with
the Termination Provision, the Debtors have determined that it
is more beneficial to enter into the Settlement Agreement than
to face a long, costly and uncertain litigation.  Mr. Basta
points out that the Settlement Agreement provides the Debtors
with an immediate $750,000 cash payment and a $395,000 reduction
in their obligations to Swisscom under the Fiber Agreement.  By
entering into the Settlement Agreement, the Debtors will avoid
any difficulties in both prosecuting their claim and collecting
any potential judgment.

Furthermore, the Debtors believe that it is in the best
interests of their estates to continue their business
relationship with Swisscom.  Mr. Basta informs the Court that
the Debtors and Swisscom are currently involved in numerous
contractual agreements.  The Debtors want to avoid litigation
that might cause a serious deterioration in their business
relationship with Swisscom.  The Settlement Agreement will help
the Debtors foster a harmonious relationship with Swisscom,
which will inure to the benefit of their estates. (Global
Crossing Bankruptcy News, Issue No. 33; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


GLOBALSTAR: Looking for New Investor After New Valley Ends Pact
---------------------------------------------------------------
Globalstar, L.P., confirmed that New Valley Corp., terminated
its agreement with Globalstar under which it would have provided
debtor-in-possession financing and would have acquired a
controlling interest in the company.

Globalstar is now continuing discussions with potential
investors, and the company is confident that another
restructuring plan will be developed in the future. Members of
the Globalstar Creditors Committee have already indicated that
they intend to provide their own debtor-in-possession financing.
Globalstar also will immediately begin to explore investment
possibilities with additional companies.

Globalstar is a provider of global mobile satellite
telecommunications services, offering both voice and data
services from virtually anywhere in over 100 countries around
the world. For more information, visit Globalstar's Web site at
http://www.globalstar.com  


IMC GLOBAL: Reports Reduced Q4 2002 Loss From Operations
--------------------------------------------------------
IMC Global Inc., (NYSE: IGL) reported a loss from continuing
operations of $8.4 million for the fourth quarter ended
December 31, 2002, which was in line with Company expectations
and analysts' consensus estimate. This compared to a loss from
continuing operations of $13.9 million in the year-ago period.

The improved 2002 fourth quarter results were primarily impacted
by higher phosphate prices, a favorable phosphate product mix
and lower rock costs, partially offset by greatly increased raw
material costs; lower phosphate volumes; and slightly reduced
potash prices.

In addition, 2001 fourth quarter results from continuing
operations reflected a net charge of $2.5 million related to the
net impact of marking to market the forward share repurchase
program; increasing reserves primarily consisting of
environmental matters related to non-operating facilities; and
an adjustment to taxes for prior year reserves.

Fourth quarter revenues of $481.0 million fell 9 percent
compared to $525.8 million in 2001 due to reduced phosphate
sales volumes and lower potash prices partially offset by higher
phosphate prices. A 27 percent increase in fourth quarter gross
margins to $52.2 million was primarily the result of the
improvements in phosphate price and product mix, as well as
lower rock costs that resulted from the Company's idling of its
four Florida rock mines for inventory reduction during December
2001. EBITDA from continuing operations for the fourth quarter
of $68.7 million increased 16 percent from $59.4 million last
year. Net capital expenditures for the fourth quarter were $34.2
million, reflecting continued strong spending control
disciplines. Depreciation, depletion and amortization expenses
were $43.4 million.

Including a loss from discontinued operations of $42.3 million,
predominantly for a charge related to a reduced proceeds
estimate on the disposal of the remaining IMC Chemicals assets
and an extraordinary charge of $0.3 million for the early
extinguishment of debt, the Company reported a net loss of $51.0
million for the fourth quarter of 2002. This compared to a 2001
fourth quarter net loss of $24.1 million, which included an
extraordinary charge of $10.2 million from the early retirement
of debt.

The Company posted full-year 2002 earnings from continuing
operations of $11.5 million. This compares to a loss from
continuing operations of $27.9 million in 2001. 2002 gross
margins of $263.0 million and operating earnings of $182.3
million increased 37 and 66 percent, respectively, while
interest expense rose 14 percent to $174.2 million as a result
of debt refinancing activities in 2001. EBITDA in 2002 improved
32 percent to $347.7 million; cost containment measures helped
deliver flat SG&A expenses year-over-year. Included in 2001
full-year results was a net special charge of $15.6 million.

Including a loss from discontinued operations of $96.4 million,
or 84 cents per diluted share, primarily for charges for reduced
proceed estimates for IMC Chemicals asset disposals and $0.6
million for the early extinguishment of debt, 2002 results were
a net loss of $85.5 million. The Company recorded a net loss in
2001 of $66.5 million, including an extraordinary charge from
early debt extinguishment of $14.1 million, and the cumulative
effect of a change in accounting principle of $24.5 million.

IMC PhosFeed

IMC PhosFeed's fourth quarter net sales of $329.0 million
decreased 11 percent compared with $371.5 million last year as
reduced sales volumes more than offset higher prices. Total
concentrated phosphate shipments of 1.5 million short tons were
20 percent below the prior-year level of 1.9 million short tons.
Domestic shipments fell 19 percent as unfavorable weather
conditions and delayed orders from stagnant price expectations
contributed to sluggish demand; a 21 percent reduction in export
volumes was due primarily to lower Chinese imports versus 2001,
when orders accelerated rapidly upon China's admittance into the
World Trade Organization. The average price realization for DAP
of $133 per short ton improved $10 versus a near bottom- of-the-
cycle pricing level of $123 per short ton a year earlier.

Fourth quarter gross margins of $15.1 million increased fivefold
from $3.0 million a year ago. Significantly improved pricing,
favorable product mix and lower idle rock mine costs more than
offset greatly increased raw material costs, reduced phosphate
shipments, and higher concentrate plant operating costs.
Approximately 30 percent of IMC's Louisiana concentrated
phosphate output continued to be idled to balance supply and
current market demand, an operating rate projected to be
maintained throughout 2003.

For the full year 2002, net sales improved 7 percent to $1,338.1
million primarily from higher phosphate prices. A more than
eightfold increase in gross margins to $78.5 million was
principally due to higher phosphate prices and greatly reduced
idle plant and rock mine costs, partially offset by increased
phosphate operating costs. Phosphate shipments in 2002 improved
3 percent to 6.2 million short tons as export and domestic
volumes both increased slightly. Confirming the start of an
anticipated multi-year recovery of global phosphate
fundamentals, the average DAP price per short ton of $137 in
2002 rose 7 percent, or $9 per short ton, from a bottom-of-the-
cycle level of $128 per short ton in 2001 and 2 percent versus
$134 in 2000.

IMC Potash

IMC Potash's fourth quarter net sales of $173.2 million fell 3
percent from last year's $179.3 million due to slightly reduced
selling prices. Sales volumes of 1.7 million short tons were
essentially unchanged versus 2001. The average selling price,
including all potash products, was $74 per short ton compared to
last year's $76 per short ton. While slightly below comparable
2001 levels, domestic and export price realizations improved
sequentially from the third quarter of 2002. A mid-September
domestic price increase held with a more than $2 per short ton
improvement in muriate of potash realizations.

Fourth quarter gross margins of $41.1 million declined 9 percent
from the prior year principally due to the lower prices. IMC
Potash continued to balance supply with demand by taking nearly
12 mine-weeks of shutdowns.

For the full-year 2002, IMC Potash net sales of $805.9 million
were virtually unchanged from $811.2 million in 2001. Sales
volumes rose 3 percent to 7.9 million short tons, while the
average price per short ton of $74 was 4 percent below $77 per
short ton last year. Gross margins fell 3 percent to $200.8
million as improved production costs per ton were more than
offset by the price decline. IMC Potash implemented more than 40
mine-week shutdowns in 2002, nearly equal to the 2001 level.

                 Observations and Outlook

"Our fourth quarter was disappointing considering how well our
results in the first three quarters of 2002 tracked expectations
as the phosphate cycle recovery began to accelerate," said
Douglas A. Pertz, Chairman and Chief Executive Officer of IMC
Global. "As explained in our early December press release, our
much lower fourth quarter results stemmed primarily from
significant phosphate margin compression. Several unanticipated
industry events contributed to an unusually rapid and sharp
decline in DAP prices, which then stagnated at levels well below
the third quarter; at the same time, sulphur and ammonia input
costs increased substantially. Our fourth quarter average DAP
price per short ton fell $12 from the third quarter level and
the benchmark Tampa export spot price dropped from a high of
$171 per metric ton in August to below $150 in December. Sulphur
contract pricing rose $7.50 per long ton and ammonia costs
jumped almost $30 per short ton.

"However, PhosFeed and overall Company profitability and cash
flow improved for both the quarter and the year," Pertz noted.
"Confirming that last year was the start of an anticipated
multi-year recovery in global phosphate fundamentals, our
average 2002 DAP price was $9 per short ton higher than in 2001,
and even above the 2000 level, despite the unusual magnitude of
the fourth quarter decline. Among other positives, the 2002
Chinese DAP import increase of nearly 1 million metric tons to
about 4 million metric tons materialized as projected, and
global pricing, demand and capacity utilization rates improved."

Pertz stated that as a result of reduced DAP pricing and higher
raw material input costs, the Company begins 2003 from a much
lower earnings base than originally anticipated. "We are
encouraged by the more than $10 per metric ton increase in the
Tampa export spot price in January alone, to about $159 per
metric ton, which is a recovery of a significant portion of the
unusually sharp fourth quarter decline. However, only a portion
of this improvement will be reflected in our first quarter
realizations," Pertz said. "As a result of the lagging effect of
the DAP price recovery and the seasonally high levels of ammonia
and natural gas costs, our first quarter results from continuing
operations could be in the range of a loss of 10 to 20 cents per
share. This range includes the unfavorable earnings impact of
the idling of one of our four Florida mines from February
through at least April to reduce rock inventory levels and
improve cash flow."

Global phosphate fundamentals are forecast to improve further in
2003 versus 2002 from a continued tightening of supply and
demand, the Company said. Consistent with the outlook for a
long-term industry cycle recovery, consultants forecast that the
2003 full-year average Tampa DAP export spot price should
increase about $10 per metric ton compared to the 2002 full-year
average price of $158 per metric ton. Pertz emphasized that
current trends are encouraging, noting again the rise in the
Tampa export spot price in January alone from an end-of-the-year
low point of $148 to about $159 per metric ton today.

Much tighter grain markets and generally higher crop prices
provide a solid backdrop for stronger fertilizer demand and
pricing this spring and over the next several years, Pertz said.
He noted that the world grain stocks-to- use ratio is at its
lowest level in 25 years, with grain consumption outstripping
production for the fourth consecutive year.

"In the near-term, we remain optimistic about a strong U.S.
spring planting season with increased phosphate and potash
demand likely in excess of 3 percent, which bodes well for IMC
Global," he said. "Given improved grain prices and lower corn
and wheat ending stocks, forecasters are virtually unanimous in
projecting increased acreage for these crops, which are two of
the most fertilizer-intensive crops."

To meet current business challenges and as part of IMC Global's
drive to be the industry's low-cost producer, the Company
announced two major new cost savings initiatives. An
organizational restructuring program, scheduled to be
implemented before April 1, will focus on reducing overhead
levels and cost through rightsizing and efficiency improvements.
The second initiative, Operational Excellence, is a multi-year
program that will result in increased efficiency, reduced costs
and revenue enhancements through core business process redesign
and maximization. The new programs are targeted to generate a
combined annualized pre-tax savings of $80 million by 2005. In
addition, the Company will continue expansion of its continuous
improvement platform, anchored by Six Sigma, which delivered in
excess of $8 million of savings in 2002 through more than 60
projects.

Turning to the balance sheet, Pertz said the Company has no
scheduled debt maturity until early 2005 as a recent add-on
offering of senior unsecured notes generated net proceeds of
$125 million that were used primarily to refinance outstanding
August 2003 senior notes. He pointed to further progress in
divesting non-core, discontinued IMC Chemicals assets with the
pending sale of sodium bicarbonate operations for nearly $21
million cash. Pertz said the Company is working with its agent
bank on an amendment to its credit agreement to obtain financial
covenant relief and expects to finalize the process in February.

With 2002 revenues of $2.1 billion, IMC Global is the world's
largest producer and marketer of concentrated phosphates and
potash crop nutrients for the agricultural industry and a
leading global provider of feed ingredients for the animal
nutrition industry. For more information, visit IMC Global's Web
site at http://www.imcglobal.com  

As previously reported, Fitch Ratings assigned a 'BB' rating to
IMC Global Inc.'s new 11.25% senior unsecured notes due June 1,
2011. Fitch has affirmed the 'BB+' rating on the senior secured
credit facility, the 'BB' rating on the existing senior
unsecured notes with subsidiary guarantees and the 'B+' rating
on the senior unsecured notes with no subsidiary guarantees. The
Rating Outlook has been changed to Negative from Stable.


INTEGRATED HEALTH: Seeks Nod for 2nd DIP Financing Amendment
------------------------------------------------------------
Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor LLP,
in Wilmington, Delaware, reminds the Court that by Order dated
March 21, 2002, the Court approved a Secured Super-Priority
Debtor-In-Possession Revolving Credit Agreement, dated as of
March 21, 2002, among Integrated Health Services, Inc., as
borrower; The CIT Group/Business Credit, Inc., as Administrative
Agent and Lender, CapitalSource Finance LLC, as Collateral Agent
and Lender.  The DIP Credit Agreement provides for maximum
borrowings up to $75,000,000, of which $50,000,000 is available
for letters of credit, subject to certain conditions precedent,
based on a borrowing base.  The obligations of IHS under the DIP
Credit Agreement are guaranteed by all of the Debtors and are
secured by substantially all the assets of all of the Debtors.  
In addition, the DIP Credit Agreement requires that the Debtors
maintain a Required Cash Collateral Balance.  The DIP Credit
Agreement will terminate by its terms on the earlier of March
21, 2003 or the effective date of a plan of reorganization.

Mr. Morton explains that the DIP Credit Agreement requires that
the Debtors maintain cash collateral in a segregated bank
account for the benefit of the DIP Lenders.  Although the
specific amount required to be maintained in the CITBC
Collateral Account at any given time varies based on covenants
elsewhere in the DIP Credit Agreement, the Required Cash
Collateral Balance was originally defined in the DIP Credit
Agreement as:

   "Required Cask Collateral Balance" shall mean (i) $25,000,000
    from the Closing Date through September 29, 2002, and (ii)
    $40,000,000 from the earlier of (A) the date of the closing
    of the sale of Symphony and (B) September 30, 2002, and
    thereafter."

By Order dated October 24, 2002, Mr. Morton relates that the
Court approved an amendment to the DIP Credit Agreement, which
extended the date of the mandatory increase in the Required Cash
Collateral Balance from $25,000,000 to $40,000,000 from
September 30, 2002, to December 31, 2002.  Specifically,
pursuant to the First Amendment, the definition of Required Cash
Collateral Balance currently provides as:

   "Required Cash Collateral Balance shall mean (i) from the
    Closing Date through December 30, 2002, $25,000,000 plus any
    amount required to be deposited into the CITBC Cash
    Collateral Account pursuant to Section 2.11(b)(i) hereof;
    and (ii) from the earlier of (A) the date of the closing of
    the sale of Symphony and (B) December 31, 2002, and
    thereafter, $40,000,000 plus any amount required to be
    deposited into the CITBC Cash Collateral Account pursuant to
    Section 211 (6)(3)) hereof on or after (and not before)
    December 31, 2002."

As of January 6, 2003, the amount of funds on deposit in the
CITBC Collateral Account is $29,870,368.36

Mr. Morton notes that the Debtors recently filed the Plan and
are seeking to have the sale approved on January 29, 2003.  It
is contemplated that the Debtors will have completed the
solicitation process by early March 2003 and will thereafter
seek confirmation of the Plan on March 12, 2003.  Given these
expectations, the Debtors requested that DIP Lenders agree to a
second amendment of the DIP Credit Agreement to eliminate the
mandatory increase of the cash collateral to $40,000,000 by
December 31, 2002.

Pursuant to a waiver agreement dated December 20, 2002, the DIP
Lenders agreed to waive the Debtors' obligation to increase the
Required Cash Collateral Balance to $40,000,000, subject to
negotiation and Court approval of a satisfactory amendment to
the DIP Credit Agreement on or before January 29, 2003.

Among other things, the Second Amendment modifies the definition
of Required Cash Collateral Balance to provide:

   "Required Cash Collateral Balance shall mean from the Second
    Amendment Closing Date through March 21, 2003,
    $29,870,368.36 plus any amount required to be deposited into
    the CITBC Cash Collateral Account pursuant to Section
    2.11(b)(i) hereof."

Mr. Morton adds that the Second Amendment also requires that the
Debtors pay to the Administrative Agent for itself and as agent
for and on behalf of the DIP Lenders a $50,000 fee and reimburse
the DIP Lenders for any out-of-pocket expenses incurred in
connection with obtaining Court approval of the Second
Amendment. Absent Court approval of the Second Amendment by
January 29, 2003, the Debtors will either be required to deposit
several million dollars into the CITBC Collateral account or
risk a default under the DIP Credit Agreement.

By this Motion, the Debtors seek approval of and authority to
enter into the Second Amendment.

Mr. Morton tells the Court that the Second Amendment is
necessary to eliminate the Debtors' obligation to deposit
several million dollars into the CITBC Collateral Account.  
While the Debtors presently have sufficient cash to meet the
covenants contained in the DIP Credit Agreement, the Debtors
nevertheless believe that the Second Amendment is beneficial to
the estates because it will allow the Debtors to utilize cash to
meet their working capital needs and reduce the Debtors'
likelihood of having to borrow funds from the revolving credit
line under the DIP Credit Agreement. The Debtors believe that
the $50,000 fee required under the Amendment is reasonable,
particularly in view of the fact that the Debtors will be less
likely to incur interest and other fees under the DIP Credit
Agreement if the Second Amendment is approved.

This Court has already approved the DIP Credit Agreement
pursuant to Section 364 of the Bankruptcy Code.  The Debtors
submit that the Second Amendment merely modifies the DIP Credit
Agreement for the Debtors' benefit, and accordingly should be
approved for the same reasons that the DIP Credit Agreement was
approved. (Integrated Health Bankruptcy News, Issue No. 50;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   


ISLE OF CAPRI: S&P Assigns B+ Bank Loan & Corp. Credit Rating
-------------------------------------------------------------  
Standard & Poor's Ratings Services assigned its 'B+' rating to
Isle of Capri Black Hawk LLC's proposed $210 million senior
secured credit facility. Proceeds from the proposed bank
facility will be used to fund the acquisition of two Colorado-
based gaming properties from International Game Technology (BBB-
/Stable/--).

In addition, Standard & Poor's assigned its 'B+' corporate
credit rating to the Black Hawk, Colo.-based company. The
outlook is stable.  

Isle of Capri Black Hawk is 57% owned by Isle of Capri Casinos
Inc., (BB-/Stable/--) and 43% by Nevada Gold & Casinos Inc.
(unrated entity). Upon consummation of the pending acquisition,
the company will own and operate two casino properties in Black
Hawk (Isle Black Hawk and Colorado Central Station; CCS) and one
in Cripple Creek, Colo. The $84 million transaction is expected
to close in the next several months, subject to regulatory
approval and financing.  

"The ratings reflect the company's somewhat more diversified
cash flow base, relatively steady operating performance of the
acquired properties, continued solid results from its existing
Isle Black Hawk property, and solid credit measures for the
rating," said Standard & Poor's credit analyst Michael Scerbo.
He added, "These factors are offset by the company's single
market concentration, potential construction risks, and
the increased near-term capital spending."

Consolidated operating performance at the company's two Black
Hawk properties, Isle of Capri and CCS, have remained relatively
steady during the past few years despite an increasingly
competitive market environment. Isle Black Hawk has been a
strong performer and has benefited from its good location, its
leading market position, and by being one of two operators
offering hotel rooms. While CCS has seen operating results in
the past few years negatively affected by the increased
competitive market environment, its good location, close
proximity to Isle Black Hawk, and niche market position are
expected to mitigate any further downside. Given the close
proximity of Isle Black Hawk and CCS, the company is planning an
expansion project that will connect the properties. The
expansion, expected to cost approximately $75 million, will
include a skywalk connecting the properties, a new parking
garage, additional gaming space, new hotel, and additional
restaurant offerings. Following the completion, the combined
properties will contain the most gaming positions and parking
spaces in the market, both keys to success.


ITALY FUND: Shareholders Approve Liquidation & Dissolution Plan
---------------------------------------------------------------
The Italy Fund Inc., which is traded on the New York Stock
Exchange under the symbol "ITA," announced that, at the Annual
Meeting of Shareholders held on January 30, 2003, shareholders
voted to approve the proposal to liquidate and dissolve the Fund
(Proposal #1).

The Fund also announced that Dr. Paul Hardin and George M. Pavia
were elected as Class I Directors and R. Jay Gerken was elected
as a Class III Director of the Fund (Proposal #2). Under the
oversight of the Board, the Fund will proceed to liquidate and
dissolve pursuant to its Plan of Liquidation and Dissolution.

The Italy Fund Inc., a non-diversified investment company, is
managed by Smith Barney Fund Management LLC, a wholly owned
subsidiary of Salomon Smith Barney Holdings Inc.


KMART: Unveils 'Savings Are Here To Stay' Marketing Campaign
------------------------------------------------------------
Kmart Corporation (Pink Sheets: KMRTQ) announced a nationwide
marketing campaign designed to redirect loyal consumers from
those stores slated to close as part of the Company's recently
filed plan of reorganization, to the next closest Kmart
location.

Beginning Sunday, February 2, Kmart rolled out its "Savings Are
Here To Stay" promotion, which includes $150 coupon savings
books, a series of $500 shopping sprees and special "relocation"
materials developed to make a customer's transition from a
closing store to a new store as easy as possible.

As part of Kmart's "Savings Are Here To Stay" campaign, every
store across the country, including stores scheduled to close,
will receive hand-out coupon books good for up to $150 in
savings on favorite national brands and Kmart exclusives. Using
a coupon, shoppers who transfer prescriptions to a new Kmart
pharmacy will receive a $10 Kmart Gift Card good towards their
next merchandise purchase. Customers also will find savings up
to $5 on Kodak photo processing in their "Savings Are Here To
Stay" coupon books. The coupon books are good only at stores
scheduled to remain open and are available chain-wide while
supplies last.

In addition, closing stores will distribute Register Reward
Receipts (available 2/2 to 3/10) to customers who make a minimum
purchase of $10 or more. The Register Reward Receipts are
redeemable for savings of up to $12 off a purchase of $100 made
at a nearby Kmart store which will remain open. Closing stores
also will pass out maps and address information for the nearest
open Kmart stores in every shopping bag.

"While the closing of Kmart stores in certain markets is a
necessary part of Kmart's drive to emerge from Chapter 11 as
quickly as possible, we understand how it affects our loyal
consumer base," said Julian C. Day, president and CEO, Kmart
Corporation. "The 'Savings Are Here To Stay' campaign is
designed to give our loyal customers the incentive and
information they need to transition to a new store, while
assuring shoppers nationwide that Kmart remains open and ready
for business."

Visitors to Kmart stores that will remain open will get a chance
to enter to win one of 20 Kmart "Savings Are Here To Stay" $500
Shopping Sprees. Entry forms can be picked up at participating
store customer service counters. No purchase is necessary. See
entry forms for official rules and details.

Kmart's "Savings Are Here To Stay" campaign will be supported by
newspaper Run of Print advertising running February 2, and in-
store and parking lot marketing displays.

As part of its efforts to enhance Kmart's operating and
financial performance, on January 14, Kmart announced the
completion of its strategic review of its store base which will
result in the closing of 318 stores. Kmart will continue to
operate more than 1,500 stores in convenient locations across
the United States, the Caribbean and Guam. To find their nearest
Kmart location, consumers can call 1-800-866-0086 or go to
http://www.kmart.com

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


LERNOUT: Wants More Time to Challenge Claims Until March 29
-----------------------------------------------------------
Reorganized Debtor Dictaphone Corporation asks Judge Wizmur to
further extend the deadline by which it must file all of its
claim objections until March 29, 2003.

Dictaphone reports that approximately 2,500 proofs of claim were
filed in its Chapter 11 case.  Dictaphone has implemented the
claim reconciliation process by identifying particular
categories of proofs of claim that may be targeted for
disallowance and expungement.  In addition, to avoid possible
double or improper recovery by claimants and to reduce the
aggregate number and dollar amount of claims, to date,
Dictaphone has filed 11 omnibus objections.

Dictaphone has allowed hundreds of claims and reached numerous
settlements with claimants.  By its own analysis, Dictaphone has
allowed, or will allow, approximately 1,100 claims, and has
expunged, or had the claimant withdraw, or will do so,
approximately 1,400 claims.

Dictaphone filed an amendment to its Schedules E and F to
include or amend approximately 47 scheduled claims.  Claimants
have 30 days to contest the scheduled claim by filing a proof of
claim.  Accordingly, Dictaphone now seeks an order extending the
deadline to file objections, if any, to these 47 claims to the
extent that the claimants file proofs of claim. (L&H/Dictaphone
Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service,
Inc., 609/392-0900)  


LTV CORP: Brings-In Towers Perrin as Insurance Auditors
-------------------------------------------------------
The LTV Corporation and its debtor-affiliates sought and
obtained Court authority to employ Towers Perrin Forster &
Crosby, Inc., as insurance claim auditors and employee
consultants for these Chapter 11 cases.

                The Insurance Audit Services

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

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

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

In this connection, Towers Perrin will be:

       (a) acquiring data from both claim administrators;

       (b) manipulating data and selecting samples;

       (c) retrieving supporting documentation from claim
           administrators;

       (d) conducting on-site audits; and

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

                     Compensation

Towers Perrin will charge the Debtors for its services on an
hourly basis, plus an "administrative load" of 6.5% to cover
expenses like toll and other charges, mail delivery, and will
seek reimbursement of other actual and necessary expenses.
Without quoting any specific hourly fees, Towers Perrin
estimates that its fees will be approximately $40,000 to $45,000
for each 300-claim sample reviewed in connection with the audit.
(LTV Bankruptcy News, Issue No. 43; Bankruptcy Creditors'
Service, Inc., 609/392-00900)


LUMENON: Conv. Noteholders Seek to End LILT's CCAA Protection
-------------------------------------------------------------
Lumenon Innovative Lightwave Technology, Inc. (NASDAQ SC:LUMM),
announced that the holders of its convertible notes, Capital
Ventures International and Castle Creek Technology Partners LLC,
filed a motion in the Superior Court of Quebec requesting that
the Court rescind and annul the Initial Order made by the Court
on January 8, 2003.

The repayment of the convertible notes is secured by a security
interest in all of the present and future property rights and
assets of Lumenon and its wholly-owned Canadian subsidiary, LILT
Canada, Inc. The Initial Order provides LILT with certain
relief, including a stay of proceedings and protection from
creditors under the Companies' Creditors Arrangement Act (CCAA).
The Initial Order is set to expire pursuant to its original
terms on February 7, 2003.

The noteholders' motion was reviewed by the Court on Tuesday,
January 28, 2003. Following that review, the Court decided to
postpone the hearing on the motion until Thursday, February 6,
2003, the day before the Initial Order is set to expire. LILT
intends to file a petition with the Court seeking an extension
of the Initial Order for an additional period of 60 days to
allow LILT more time to continue to explore various options
related to the restructuring of its continuing operations and
obligations.

Lumenon is currently in default under the convertible notes. As
a result, if the Court grants the noteholders' motion, or denies
LILT's request to extend the Initial Order, and the outstanding
principal and all accrued interest under the convertible notes
is not paid to the noteholders within five (5) trading days
after receipt of a demand notice requiring such payment, the
noteholders will have all the rights and remedies of a secured
party under the Uniform Commercial Code of the State of Delaware
or of any jurisdiction in which the property, rights and assets
of Lumenon or LILT are located, as well as any and all of the
rights provided for under Quebec law, including the right to
institute proceedings to take possession of such property,
rights and assets. Until such time, LILT will continue to
explore its options related to the restructuring of its
continuing operations and obligations within the guidelines
established by the Court for LILT and its creditors.

Lumenon Innovative Lightwave Technology, Inc., a photonic
materials science and process technology company, designs,
develops and builds optical components and integrated optical
devices in the form of packaged compact hybrid glass and polymer
circuits on silicon chips. These photonic devices, based upon
Lumenon's proprietary materials and patented PHASICT design
process and manufacturing methodology, offer system
manufacturers greater functionality in smaller packages and at
lower cost than incumbent discrete technologies. Lumenon(TM) is
a trademark of Lumenon Innovative Lightwave Technology, Inc.

For more information about Lumenon Innovative Lightwave
Technology, Inc., visit the Company's Web site at
http://www.lumenon.com   


MATLACK SYSTEMS: Chapter 7 Trustee Hires Stanford as Consultant
---------------------------------------------------------------
Gary F. Seitz, the Chapter 7 Trustee for the estates of Matlack
Systems, Inc., and its debtor-affiliates wants to employ
Stanford Risk Management Services as his Insurance and Risk
Management Consultant, nunc pro tunc to January 6, 2003.

Mr. Sietz tells the U.S. Bankruptcy Court for the District of
Delaware that Stanford will:

     (a) Consult with the Chapter 7 Trustee and/or his retained
         professionals regarding the transfer of liability for
         the environmental conditions related to any assets of
         the Debtors' estates;

     (b) Consult with the Chapter 7 Trustee and/or his retained
         professionals regarding insurance contract
         modifications to coincide with the transfer of any of
         the Debtors' assets;

     (c) Consult with the Chapter 7 Trustee and/or his retained
         professionals regarding insurance coverage for the
         Debtors' estates, the Chapter 7 Trustee, or his
         retained professionals;

     (d) Suggest policy modifications to properly address the
         coverage needs for these estates, the Chapter 7
         Trustee, and his retained professionals;

     (e) Solicit alternative insurance quotations for purchase
         by the Debtors' estates to protect the estates, the
         Chapter 7 Trustee and his retained professionals
         against future environmental liability related to any
         assets of the Debtors' estates;

     (f) Provide any services necessary to reduce the cost and
         liabilities of administering any property of these
         chapter 7 estates that may have an environmental
         condition;

     (g) Evaluate the extent and nature of any potential
         environmental condition of any of the estates' assets
         and the costs associated with remediation of any such
         condition;

     (h) Assist the Chapter 7 Trustee and his other retained
         professionals in taking any reasonable actions
         necessary to remediate any potential environmental
         condition of the estates' assets; and

     (i) Provide any other risk management consulting services
         as requested by the Chapter 7 Trustee and/or his
         retained professionals.

John J. Campanile will be primarily responsible in this
engagement.  Mr. Campanile's billing rate is $130 per hour.

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, (Bankr. Del. Case No. 01-01114).  Richard Scott Cobb,
Esq., at Klett Rooney Lieber & Schorling represents the Debtors
as they wind up their assets.  


MCCRORY CORP: Files Plan and Disclosure Statement in Delaware
-------------------------------------------------------------
McCrory Corp., and its debtor-affiliates filed their First
Amended Liquidating Plan of Reorganization and the accompanying
Disclosure Statement with the U.S. Bankruptcy Court for the
District of Delaware.  The Debtors' Disclosure Statement is
available for a fee at:

  http://www.ResearchArchives.com/bin/download?id=030127220701

Through the Plan, the Debtors seek to liquidate their remaining
assets and complete the wind-up of their respective businesses.
The Debtors believe that confirmation of the Plan and
liquidation of their assets under the Plan will be more
economical and efficient than effecting such a liquidation under
Chapter 7 of the Bankruptcy Code because of the increased casts
and expenses of a liquidation under Chapter 7 of the Bankruptcy
Code.

The Debtor asserts that the Plan provides for the treatment of
Allowed Claims in a fair and equitable manner.  The Plan
designates three Classes of Claims and one Class of Equity
Interest. These Classes take into account the differing nature
and priority under the Bankruptcy Code of the various Claims and
Equity Interests. Professionals' Claims for fees and expenses,
other Administrative Expense Claims, and Priority Tax Claims are
not classified and are excluded from the Classes of Claims and
Equity Interests in accordance with the Bankruptcy Code.

Generally, the Debtors' remaining assets shall be liquidated and
distributed to Holders of Allowed Claims and Equity Interests in
accordance with their priorities.  Any Class of Claims that, as
of the date of the commencement of the Confirmation Hearing,
contains no Allowed Claims shall be deemed deleted from the
Plan.

McCrory Corporation filed for chapter 11 protection on
September 10, 2001, (Bankr. Del. Case No. 01-10365). Laura Davis
Jones, Esq. at Pachulski, Stang, Ziehl, Young & Jones P.C.,
represents the Debtors


MID-POWER SERVICE: Section 341 Meeting to Commence on Feb. 26
-------------------------------------------------------------
The United States Trustee will convene a meeting of Mid-Power
Service Corporation's creditors on February 26, 2003 at 3:00
p.m., in the Bible Building, Room 550, in Las Vegas, Nevada.
This is the first meeting of creditors required under 11 U.S.C.
Sec. 341(a) in all bankruptcy cases.

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

Mid-Power Service Corporation is currently implementing a plan
to acquire oil and gas properties for exploration and
development, to acquire fuel source for power generation, to
develop energy-related technologies, and to generate and trade
electrical power.  The Company filed for protection from its
creditors together Mid-Power Resource Corporation on January 24,
2003, (Bankr. N.V. Case No.03-10874), in the U.S. Bankruptcy
Court for the District of Nevada. Laurel Davis, Esq., at Lionel
Sawyer & Collins represents the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they listed debts and assets of:

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


NATIONAL BEDDING: S&P Rates Corporate Credit & Bank Loan at B+
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit and bank loan ratings to National Bedding Co.

The outlook is positive. Pro forma for the company's acquisition
of Sleepmaster LLC, about $240.5 million in debt was outstanding
on December 31, 2002.

The bank loans include a $60 million revolving credit facility
that matures 2008, a $75 million term loan A that matures 2008,
and a $100 million term loan B that matures 2008. The loans are
secured by substantially all of the assets of the company,
including the rights to license the Serta brand, but not the
brand itself, which is owned by Serta Inc.

The ratings on National Bedding Co., reflect its aggressive debt
leverage, the integration risk of the Sleepmaster acquisition,
and the company's narrow business focus. Mitigating these
concerns are the strong Serta brand franchise, wide domestic
distribution, and management's solid performance record.

"National Bedding faces significant debt leverage and
integration risk as a result of the Sleepmaster acquisition.
However, if the company can obtain cost reductions and improve
credit quality, National Bedding could be upgraded in the medium
term," said Standard & Poor's credit analyst Martin S. Kounitz.

With the acquisition of the bankrupt Sleepmaster LLC, National
Bedding Co. will become the third-largest bedding manufacturer
in the U.S. after Sealy and Simmons. The acquisition gives
National Bedding 27 of 34 domestic Serta licenses, 79% of the
equity of Serta Inc. Serta, a non-profit company formed in 1931,
is owned by its licensees, and under its operating rules, major
company decisions require a two-thirds shareholder majority. Its
well-known brands include Serta and Serta Perfect Sleeper.


NAT'L CENTURY: Amedisys Demands Prompt Decision on Sale Pact
------------------------------------------------------------
Under Section 365(d)(2) of the Bankruptcy Code, the Court may
order a Chapter 11 debtor to determine within a specified period
of time whether to assume or reject an executory contract.

Taking this into consideration, Amedisys, Inc., America Home
Health, Inc. of Georgia, Healthfield Services of Middle Georgia,
Clinical Arts Home Care Services, Inc., Central Home Health
Care, Tugaloo Home Health Agency, North Georgia Home Health
Agency, Coosa Valley Home Health, Amedisys Louisiana, Amedisys
North Carolina LLC, Amedisys Oklahoma LLC, Amedisys Tennessee
LLC, America Home Health Inc. of Virginia, Amedisys Northwest
LLC, Amedisys Specialized Medical Services, Inc., America Home
Health Inc. of South Carolina, Amedisys Quality Oklahoma LLC and
Home Health of Alexandria, Inc., seek to limit the time period
by which National Century Financial Enterprises, Inc., and its
debtors may decide whether to assume or reject 20 sale
agreements.

Prior to the Petition Date, Amedisys financed its business
operation through certain "sales" of accounts receivable to NPF
VI.  To effectuate this program, each of the Amedisys entities
entered into separate Sale and Subservicing Agreements with NPF
VI and NPFS on December 10, 1998.  Under the terms of the Sale
Agreements, NPF VI agreed to purchase certain accounts
receivable from Amedisys.  Pursuant to the Sale Agreements, the
Debtors and their agent JPMorgan Chase have a security interest
in Amedisys' Purchased and Non-Purchased Receivables.

Stephen E. Chappelear, Esq., at Hahn, Loeser, and Parks, LLP, in
Columbus, Ohio, informs the Court that since early 2002,
Amedisys had worked towards reducing its participation in its
facility with NPF VI.  As its financial situation improved
during that year, Amedisys reduced its level of activity in the
program with the knowledge and consent of NCFE and NPF VI.

Despite ongoing transactions between both parties, NPF VI agreed
to not fund or advance according to the terms of the Sale and
Subservicing Agreement.  Consequently, on September 30, 2002,
NPFS only needed to collect an additional $1,882,521 to close
out Amedisys' participation in the program.

Mr. Chappelear relates that Amedisys offered NPF VI accounts
receivable amounting to $10,084,403 in October 2002.  However,
through November 1, 2002, NPF VI paid only $3,259,849 when NPFS
actually collected not less than $12,210,533 on the Amedisys
accounts through November 13, 2002.  Thus, NPF VI did not pay
for sufficient funds under the terms of the Sale Agreements,
leaving NPF VI owing Amedisys not less than $7,000,000.

The sale agreements constitute executory contracts.  The Debtors
have yet to inform Amedisys whether they will assume or reject
the contracts.

Mr. Chappelear reports that the Debtors, NCFE, NPFS or NPF VI
have yet to inform Amedisys as to whether they will resume or
reject the Sale Agreements.

Mr. Chappelear insists that they will be irreparably harmed by
any delay in the Debtors' determination of whether to assume or
reject the Sale Agreements.  The security interest held by the
Debtors and their agent JPMorgan Chase in all of Amedisys'
accounts receivable, leaves Amedisys to continue operations
based solely on ongoing collections from accounts receivable,
which by agreement are no longer being paid into an account
controlled by the Debtors and JPMorgan Chase.  The security
interest in Amedisys' accounts receivable held by the Debtors or
their agent JPMorgan Chase renders Amedisys unable to obtain
alternative financing.  As a result of this lack of financing,
any interruption in cash flow or any unanticipated expense will
leave Amedisys with no option other than to cease critical
patient care service.

Thus, Amedisys asks the Court to compel the Debtors to assume or
reject the Sale Agreements without further delay.  If the
Debtors fail to assume the sale agreements, the sale agreements
will be deemed rejected. (National Century Bankruptcy News,
Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-0900)


NATIONAL STEEL: Inks $1.125B Asset Purchase Pact with AK Steel
--------------------------------------------------------------
AK Steel Corporation (NYSE:AKS) and National Steel Corporation
have signed an Asset Purchase Agreement for AK Steel to acquire
substantially all of the steelmaking and finishing assets of
National Steel Corporation for $1.125 billion. Of the total,
$200 million consists of the assumption of certain liabilities
and the remaining $925 million would be payable to National in
cash, with $450 million of that amount for net working capital.
The AK Steel offer exceeded a counter-offer submitted by a
competing bidder.

AK Steel said it believes the acquisition would give the company
the potential to realize cost-based synergies in excess of $250
million annually.

Under the purchase agreement AK Steel would acquire National's
integrated steel plants in Ecorse and River Rouge, Michigan, and
Granite City, Illinois, as well as the Midwest finishing
facility in Portage, Indiana. AK Steel will also acquire the
assets of National Steel Pellet Company in Keewatin, Minnesota,
the administrative offices in Mishawaka, Indiana, various
subsidiaries, and National's share of the Double G joint venture
in Jackson, Mississippi, as well as net working capital related
to the acquired assets.

AK Steel said its offer is contingent upon regulatory and
bankruptcy court approvals. In addition, the bid contemplates
negotiation of a new contract with the United Steelworkers of
America, which represents most of National's hourly employees.
AK Steel said its bid does not include the assumption of pension
and other post-retirement employee benefits, which consist
primarily of retiree health care liabilities.

"We are pleased that we have reached agreement with the board of
directors of National Steel to acquire these assets," said
Richard M. Wardrop, Jr., chairman and CEO of AK Steel. "This
represents a superior offer for National's creditors and a
tremendous opportunity for AK Steel to broaden its product line.
We look forward to our scheduled meetings with the United
Steelworkers to begin forming the framework of a new,
competitive labor agreement," Mr. Wardrop said.

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

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

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


NATIONAL STEEL: US Steel Reaffirms Interest in Doing a Deal
-----------------------------------------------------------
United States Steel Corporation (NYSE: X) reaffirmed its
interest in acquiring the assets of National Steel Corporation.

Commenting on the developments in the U. S. Bankruptcy Court in
Chicago, U. S. Steel Chairman Thomas J. Usher, said, "We remain
interested in acquiring the assets of National Steel at the
right price and with the right labor agreement. We do not view
an asset purchase agreement or so-called ``stalking horse
status' at this time as particularly important in this
bankruptcy auction. In our view, it is more important for us to
focus on our positive, ongoing discussions with the United
Steelworkers of America. Nobody is going to be able to buy and
operate National Steel successfully without reaching a
constructive and progressive new labor agreement. We are
confident that we can achieve such an agreement.

"We consider the USWA to be partners in this venture. We think
that most of our interests are aligned and continue to believe
that our acquisition of National's assets is the best solution
for National's employees, communities, customers and other
stakeholders."

U. S. Steel believes that, by the end of any auction period
established by the U. S. Bankruptcy Court in Chicago, it will
reach a new labor agreement with the USWA. In any bankruptcy
auction, the value that U. S. Steel may ultimately offer for
National's assets will depend upon conditions in the steel and
financial markets, as well as the nature of its agreement with
the USWA.


NATIONAL STEEL: USWA Issues Comments on New Bid Developments
------------------------------------------------------------
The United Steelworkers of America (USWA) said that National
Steel's disclosure that AK Steel (NYSE:AKS) is expected to
become the stalking horse in pursuit of the steelmaking assets
of the Mishawaka, Indiana-based company "has not diminished the
difficult challenge of reaching a constructive labor agreement
with AK," said USWA International President Leo W. Gerard.

Gerard made his comments in reaction to National Steel's
announcement in federal bankruptcy court that AK Steel has
become the leading bidder for the company.

Since originally bidding $1.05 billion in cash solely for
National's steelmaking facilities, AK Steel has raised its bid
to $1.125 billion in cash, including the purchase of National
Steel Pellet.

"Our primary goal in pursuing a humane consolidation of the
industry continues to be protecting the economic and pension
security of our members and retirees -- and that includes our
members at National Steel Pellet," Gerard said. "That means
we'll consider all the alternatives. We'll take a hard look at
the bargaining records of both bidders, while we continue to
work with National's board and its creditors on a "stand alone"
plan of reorganization of the company.

"Obviously the company that we determine can negotiate the most
constructive labor agreement will have a lot to do with our
decision. And it's no secret," he added, "that AK's record on
that count hasn't exactly been stellar of late. We're also
prepared to continue discussions with US Steel."

In December, AK Steel announced an end to the illegal lockout of
more than three year's duration that it imposed on 620
Steelworkers of USWA Local 169 in Mansfield, Ohio. The USWA has
said that progress in returning its members to work has been
"slow, at best."

Gerard said, nonetheless, that the USWA would keep an open mind
as it applies the principles to its decision making that were
set forth by the Union's Basic Steel Industry Conference in
September of last year.

Primary among the principles laid out by the BSIC for
negotiating with distressed steelmakers was a company's
willingness to:

-- Take the steps necessary to restructure financially in order
   to invest in its facilities and meet its obligations;

-- Maintain existing levels of wages and benefits;

-- Provide medical care for existing retirees to the maximum
   extent possible;

-- Preserve the members' defined benefit pension plans; and,

-- Commit that our members will share in the company's successes
   upon return to profitability.

"Every one of these principles was satisfied in the tentative
agreement that we reached recently with the International Steel
Group," Gerard said. "We intend to apply the same standards in
assessing each of the alternatives under consideration in this
consolidation."


NEXSTAR: S&P Rates Planned $170M & $85M Credit Facilities at B+
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating to
Nexstar Finance LLC's proposed $170 million senior credit
facilities and Mission Broadcasting Inc.'s $85 million senior
credit facilities. This debt will be consolidated at television
station owner and operator Nexstar Broadcasting Group LLC.
Nexstar's consolidated debt includes debt obligations of Mission
Broadcasting that are guaranteed by Nexstar.

Proceeds are expected to be used to refinance existing debt and
help fund the acquisition of four new television stations for an
aggregate purchase price of approximately $100 million.

Standard & Poor's also affirmed all its existing ratings on
Nexstar. The outlook is negative. Based in Irving, Texas,
Nexstar had total debt outstanding of approximately $294.2
million as of September 30, 2002.

"The absence of political and Olympic ad dollars are expected to
constrain cash flow growth in 2003," said Standard & Poor's
credit analyst Alyse Michaelson. "Although favorable trends in
TV advertising are expected to continue, demand could be
vulnerable to economic cycles and escalating political tensions
overseas. The company's covenant cushion is modest, and
generating positive operating momentum will be important for
maintaining compliance with financial covenants this year."

Standard & Poor' also said that a deterioration in key credit
metrics due to either debt-financed acquisition activity or
softening operating performance could pressure financial
covenants and ratings.

Overall TV ad spending increased in 2002 due to strengthening
demand and easier revenue comparisons in the second half of the
year. Political advertising also provided a boost, contributing
a sizeable 15.5% of the company's expected 2002 revenues. Given
election and Olympic cycles, revenue comparisons could be more
difficult in 2003, particularly in the second half of the year.

Assuming Nexstar's stations maintain their market positions and
efficiency gains are made at acquired stations, margins and key
credit ratios are expected to hold up in the near term. However,
additional station purchases could pressure the company's
financial profile.


NORTHWESTERN CORP: Responds to FERC's Information Request
---------------------------------------------------------
NorthWestern Corporation (NYSE: NOR) said it is aware that a
subpoena has been issued from a Federal Energy Regulatory
Commission administrative law judge at the request of several
parties for information that the former Montana Power
Company may have related to the California energy crisis of
2000-2001. NorthWestern is not a party to the proceedings before
FERC and is one of several companies that have received a
subpoena requesting information. The company said it will
provide relevant information and looks forward to clarifying
that it was not involved in purchasing or selling energy into
California during that period.

The request for information relates to the former Montana Power
Company, of which NorthWestern purchased the regulated
transmission and distribution utility operations in February
2002. During the 2000-2001 time period, Montana Power had no
generation available to sell into the wholesale market and was
not active in energy trading. The company supplied its Montana
customers through two energy contracts: a five-year, full-
requirements contract with PPL Montana, which expired in mid-
2002, and an energy balancing contract with Enron Corporation to
support the reliability of Montana Power's transmission control
area.

Montana Power officially cancelled the contract with Enron in
January 2002 and obtained a new contract with a different
provider. The contract is used to balance the load on the
transmission control area on an hourly basis. Electricity flows
across and through the transmission control area on a constant
basis, and the amount of electricity (or load) may vary widely
from hour to hour depending on the usage of the system. The sale
of excess energy on the transmission system or the purchase of
additional energy to meet demand through the balancing contract
is a critical function necessary to maintain reliability for all
Montana customers, as well as maintain system integrity
throughout the interconnected Western transmission grid.

Montana Power sold its generation assets in 1999 to PPL Global
(PPL Montana, LLC) and its electricity trading business to PPL
Resources, and therefore, was not engaged in any energy trading
activity outside of the normal requirements necessary to
maintain the reliability of the transmission system.

NorthWestern Corporation is a leading provider of services and
solutions to more than 2 million customers across America in the
energy and communications sectors. NorthWestern's partner
businesses include NorthWestern Energy, a provider of
electricity, natural gas and related services to customers in
Montana, Nebraska and South Dakota; Expanets, the largest mid-
market provider of networked communications solutions and
services in the United States; and Blue Dot, a leading provider
of air conditioning, heating, plumbing and related services.

As reported in Troubled Company Reporter's January 20, 2003
edition, Northwestern Corp.'s outstanding credit ratings have
been downgraded by Fitch Ratings as follows: senior secured debt
to 'BBB-' from 'BBB+'; senior unsecured notes and pollution
control bonds to 'BB+' from 'BBB' and trust preferred securities
and preferred stock to 'BB' from 'BBB-'. The ratings are removed
from Rating Watch Negative where they were placed on Dec. 13,
2002. The Rating Outlook is Negative. Approximately $1.5 billion
of securities are affected.

The rating action follows Fitch's review of NOR's current and
prospective credit profile including the impact of lower
earnings expectations and anticipated non-cash charges during
the fourth quarter of 2002 at NOR's two primary non-utility
businesses - Expanets (communications solutions) and Blue Dot
(HVAC services). The revised rating levels also take into
consideration NOR's recent execution of a new $390 million five
year secured term loan facility, the proceeds of which will
become available to NOR upon approval of the financing by the
Montana Public Service Commission (expected by early February
2003).


NTL: New Order Extends Stay Relief for Settlement Adjustments
-------------------------------------------------------------
Maxcor Financial Inc., the U.S. broker-dealer subsidiary of
Maxcor Financial Group Inc. (Nasdaq: MAXF), announced that the
United States Bankruptcy Court for the Southern District of New
York has issued a new order in the dispute swirling around the
settlement of when-issued trading contracts effected in the
common stock of NTL Inc. prior to NTL's emergence from
bankruptcy on January 10th.

The new order, issued January 29, extends until 5:00 p.m. on
February 5, 2003 - after which time it dissolves - the interim
relief granted to Maxcor and other participants in the when-
issued market pursuant to the Court's prior order of January 16,
2003. The prior order gave sellers the right to require buyers,
subject to a full reservation of rights, to settle their
transactions on a 1-for-4 reverse split adjusted basis in order
to reflect the three-fourths reduction in capitalization that
NTL effected upon its emergence from bankruptcy. Because the
prior order was entered on an emergency basis, without the
commencement of formal adversary proceedings against all of the
parties affected thereby, the new order extends the duration of
the interim relief for an additional week to provide parties who
wish to seek to continue its provisions on a permanent
injunctive basis or to obtain alternative relief a prior
opportunity to commence the proceedings necessary to do so
before the interim relief ends. The new order states that it
should not "be interpreted as suggesting or implying any
findings of fact or conclusions of law with respect to any
issue," and expressly reserves the rights of all parties.

Maxcor stated that it continues to assess its next actions,
which may include additional proceedings in the Bankruptcy Court
or elsewhere. Although many of Maxcor's counterparties, in
accordance with the January 16th order, have settled their when-
issued transactions on a split-adjusted basis, others have not.
Given that the Court's actions to date expressly reserve the
rights of all parties, Maxcor cautioned that it could not
currently predict with any certainty the ultimate outcome of the
settlement disputes, or whether its previously announced
estimate of their possible financial impact will be mitigated.

Maxcor Financial Inc. is an SEC-registered broker-dealer,
specializing in institutional sales and trading operations in
high-yield and distressed debt, municipal bonds, convertible
securities and equities. Through its Euro Brokers division,
Maxcor is also a leading domestic and international inter-dealer
broker specializing in U.S. Treasury and federal agency bonds
and repurchase agreements, emerging market debt products and
other fixed income securities. Maxcor is a subsidiary of Maxcor
Financial Group Inc. -- http://www.maxf.com-- which employs  
approximately 500 persons worldwide and maintains principal
offices in New York, London and Tokyo.


OHIO CASUALTY: Reports Selected Fourth Quarter 2002 Items
---------------------------------------------------------
Ohio Casualty Corporation (Nasdaq:OCAS) expects to report that
reserve strengthening related to losses and loss adjustment
expenses for accident years prior to 2002 will be approximately
$10 million dollars before tax for the fourth quarter of 2002.

It also expects to report that catastrophe losses for the fourth
quarter 2002 will be approximately $3.5 million before tax. The
Corporation expects to report that statutory surplus as of
December 31, 2002 will be in the range of $715 million and $735
million, well in excess of any covenant amounts related to the
Corporation's revolving credit facility, which had an
outstanding balance of zero as of December 31, 2002. It expects
to report that year 2002 renewal price increases for the
commercial lines operating segment will be approximately 16% and
that commercial umbrella renewal price increases for the year
2002 will be over 30%.

The Corporation also announces it has recently received all
necessary approvals to withdraw its personal lines business from
the states of Florida, Georgia, and Texas, and the Corporation
has renewed its reinsurance program for the year 2003.

The Corporation expects to report complete results for the
fourth quarter and the year 2002 on Wednesday, February 5, 2003.

Ohio Casualty Corporation is the holding company of The Ohio
Casualty Insurance Company, which is one of six property-
casualty subsidiary companies that make up Ohio Casualty Group.
The Ohio Casualty Insurance Company was founded in 1919 and is
licensed in 49 states. Ohio Casualty Group is ranked 40th among
U.S. property/casualty insurance groups based on net premiums
written (Best's Review, July 2002). The Group's member companies
write auto, home and business insurance. Ohio Casualty
Corporation trades on the NASDAQ Stock Market under the symbol
OCAS and had assets of approximately $4.6 billion as of
September 30, 2002.

As reported in the Troubled Company Reporter's November 4, 2002
issue, Standard & Poor's revised its outlook on Ohio Casualty
Corp., which has a double-'B' counterparty credit rating, and
related operating companies to negative from stable following
Ohio Casualty's recent announcement of its third quarter 2002
earnings, in which the group posted a net loss of $69.9 million.


PACIFIC GAS: Wants to Pay $157.5MM FERC-Ordered Refund Dues
-----------------------------------------------------------
Pacific Gas and Electric Company seeks the U.S. Bankruptcy Court
for the Northern District of California's authority to pay its
refund obligations to certain customers in accordance with
several final orders issued by, and two settlement agreements
approved by, the Federal Energy Regulatory Commission.  Each of
these settlement agreements and FERC orders reduced or
reallocated charges previously passed on by PG&E to its
customers and ordered that PG&E refund the customers
accordingly.  Some of these refund obligations can be addressed
by adjustments and credits to customer accounts but others
necessitate actual payment.

PG&E and other state utilities generally pass on charges imposed
by the California Independent System Operator Corporation to
their customers by adjusting rates, William J. Lafferty, Esq.,
at Howard, Rice, Nemerovski, Canady, Falk & Rabkin, explains.  
The FERC provides very strict guidelines as to how the utilities
can pass on these costs and which customers must bear the
increased rates.  The FERC typically issues preliminary
indications subject to later review and, if necessary, customer
refunds.  To settle disputes, the FERC conducts extensive
hearings and issues binding orders.

PG&E's customers are divided into two general categories -- ETC
Customers and TO Tariff Customers.

The ETC Customers are those customers who entered into binding
long-term contracts with PG&E before the creation of the CAL
ISO. These contracts require that PG&E file for authority to
pass on CAL ISO charges to the ETC Customers under Section 205
of the Federal Power Act.  The ETC Customers are primarily
municipal utilities.

The TO Tariff Customers, on the other hand, are subject to a
current tariff that allows the pass-through of certain CAL ISO
costs and are obligated to reimburse PG&E for applicable charges
under the CAL ISO Tariff, and PG&E's TO Tariff.  The TO Tariff
Customers are divided into two groups -- wholesale and retail.

Mr. Lafferty explains that the refund obligations that PG&E
wants to pay reflect charges imposed by the CAL ISO or changes
to various rates or rate structures under its TO Tariff or
Reliability Services Tariff.  "Simply put, the FERC has modified
its preliminary indications and has held that PG&E must adjust
the way it charged -- or failed to charge -- certain of its
customer groups.  Now, the FERC has ordered PG&E to make the
appropriate adjustments," Mr. Lafferty says.

PG&E intends to effect three categories of FERC-ordered refund
obligations before the confirmation of its reorganization plan:

    -- $110,000,000 to its Transmission Owner Tariff customers;

    -- $37,000,000 to its Existing Transmission Contract
       customers; and

    -- $10,500,000 to its Wholesale Transmission Owner Tariff
       Customers.

A. Transmission Revenue Balancing Account Adjustment

In connection with California's electric industry restructuring,
the CAL ISO was established to provide operational control over
most of the state's electric transmission facilities and to
provide open access, on comparable terms and conditions, for
electric transmission service.  Mr. Lafferty relates that PG&E
serves as the scheduling coordinator under the CAL ISO Tariff to
facilitate the continuing transmission service under certain of
the ETC Customer contracts that PG&E entered into before the CAL
ISO was established.  The CAL ISO then bills PG&E, as the
scheduling coordinator, for providing certain services
associated with the contracts.  These CAL ISO charges are
referred to as SC costs.

Since April 1, 1998, PG&E has included the SC Costs in its
calculation of rates for TO Tariff Customers via an accounting
mechanism known as the Transmission Revenue Balancing Account
Adjustment.  Recently, however, the FERC held in its Opinion 16
No. 458, issued on August 5, 2002, that PG&E's use of the TRBAA
mechanism resulted in its TO Tariff Customers paying for all of
the SC Costs.  The FERC concluded that some recovery of these
costs should come from PG&E's ETC Customers.  As a result, the
FERC ordered PG&E to refund the TO Tariff Customers
$110,000,000, of which $75,000,000 reflects prepetition
payments.  This adjustment will not involve any cash layout by
PG&E and will be effected solely through lower transmission
rates to TO Tariff Customers in 2003.

B. Reliability Service Tariff

The CAL ISO also imposes charges on PG&E and the state's other
investor-owned electric utilities for certain expenses that the
CAL ISO incurs in its efforts to ensure reliable electricity
services.  These charges are collectively referred to as
Reliability Service Charges.  Again, there is no dispute as to
PG&E's right to pass the RS Charges on to its customers, Mr.
Lafferty says.  As with the TRBAA, the only contested issue has
been which customers should bear the expenses.

Since June 29, 2000, PG&E has allocated the RS Charges to both
ETC and TO Tariff Customers.  Pursuant to a final order, Opinion
No. 459, issued on August 2, 2002, the FERC held that PG&E
lacked authority to collect the RS Charges from its ETC
Customers. Therefore, PG&E is obligated to refund $37,000,000 in
charges to the ETC Customers.  This amount will be re-allocated
and collected from retail TO Tariff Customers pursuant to a
partial settlement approved by the FERC.

Mr. Lafferty reports that $11,000,000 of the $37,000,000 refund
obligation relates to prepetition payments.  The $37,000,000
refund cannot be effected via account credits and adjustments
and requires PG&E's cash outlay.

C. TO5 Rate Case and TAC Implementation Settlements

On June 26, 2001, the FERC approved a settlement of PG&E's fifth
Transmission Owner Rate case reducing its transmission rates.  
On February 27, 2002, the FERC approved a settlement that had
been entered into by PG&E and all parties to PG&E's Transmission
Access Charge Implementation filing, which made changes to
PG&E's TO Tariff to implement a new rate methodology adopted by
the CAL ISO.  The TAC Settlement incorporates certain changes to
the rate design itself, rather than PG&E's revenue requirement.

"The alterations to the rate design have a direct impact on
customer rates," according to Mr. Lafferty.  Pursuant to the TAC
Settlement, PG&E is obligated to refund $10,500,000 to its
wholesale TO Tariff Customers as a result of the rate design
changes and for the reductions in the transmission rates that
stem from the TO5 settlement.  Mr. Lafferty explains the amount
paid will be recovered through the TRBAA rate mechanism in 2003
rates from TO Tariff Customers.  About $9,000,000 of the
$10,500,000 refund relates to prepetition payments.  This refund
cannot be effected via account credits or adjustments and also
requires PG&E's cash outlay.

"PG&E should be authorized to pay the refund obligations," Mr.
Lafferty asserts.  As a regulated electric utility, PG&E is
obligated to submit to the FERC jurisdiction and obey FERC
orders.  "Even if some net revenue loss results, PG&E is solvent
and has the cash on hand to pay these claims without prejudice
to other creditors," Mr. Lafferty assures the Court. (Pacific
Gas Bankruptcy News, Issue No. 52; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   


P-COM: December 2002 Balance Sheet Upside Down by $15 Million
-------------------------------------------------------------
P-Com, Inc. (Nasdaq: PCOM), a worldwide provider of wireless
telecom products and services, reported net sales of $8.5
million for the fourth quarter ended December 31, 2002, compared
to $7.5 million for the third quarter of 2002, and $7.4 million
for the corresponding quarter a year ago. Net sales for the year
ended December 31, 2002 was $33.0 million, compared to $104.1
million in 2001.

The increase in P-Com's net sales for the current quarter was
due to a significant shipment of our Point-to-Point equipment to
an existing customer. The lower level of sales in 2002 compared
to 2001 was due to the world wide slow down in the
telecommunication equipment market, and the bankruptcy of
Winstar in first quarter of 2001.

Net loss for the quarter before extraordinary items was $22.1
million, compared to a net loss of $17.9 million for the same
period in 2001, and a net loss of $9 million in the third
quarter of 2002. The current quarter net loss of $22.1 million
includes a non-cash write-down of goodwill carrying value
relating to our services business of $11.4 million. Gross profit
margins were minus 47% in the quarter, compared to 11% in the
previous quarter and minus 75% compared to the corresponding
quarter a year ago. The gross margin in this quarter included a
$5.5 million charge to inventory reserve. Excluding the
inventory charge, the gross margin would have been 18.2%,
compared to minus 48% and for the corresponding period in 2001.

Net loss for the year ended December 31, 2002 was $54.3 million
compared to $75.5 million in 2001. Gross profit margins were
minus 3% for the year ended December 31, 2002 compared to minus
14% for the year ended December 31, 2001. Excluding charges to
inventory, gross profit margins were 14% and 15% for the year
ended December 31, 2002 and 2001 respectively. Operating
expenses for the year ended 2002 were $34.6 million, (excluding
goodwill impairment) compared to $69.0 million in 2001.
Operating expenses for the quarter were $6.6 million, (excluding
goodwill impairment), compared to $7.5 million in the third
quarter of 2002, and $11.7 million (excluding goodwill
amortization) for the same period in 2001. The lower level of
loss in 2002 was due to expense savings arising from cost
control measures we undertook in the year, such as facility
consolidations, headcount and salary reductions, and
streamlining of our research and development effort. The 2001
net loss was also impacted by the $10 million charges to
inventory and $11.6 million receivable valuation charges
relating to the bankruptcy of Winstar.

"In 2002, P-Com completed a financial restructuring, a
significant cost-reduction program and two major product
enhancements. When the present funding effort is complete, the
company will be well-positioned to handle uncertain market
conditions in 2003," said P-Com Chairman George Roberts. "I
believe P-Com will emerge as one of the winners in the telecom
industry shakeout because of the strength of our products, our
management team, our business relationships, and our ability to
identify and execute on strategic opportunities, as demonstrated
by our pending acquisition of Procera Networks."

As of December 31, 2002, P-Com's total stockholders' equity
deficit amounts to $15,351,000.

P-Com previously announced the signing of a letter of intent to
acquire privately held Procera Networks Inc. of Sunnyvale,
California in a stock-for-stock transaction. The acquisition
enables P-Com to enter the fast growing market for switching
products with Procera Networks' highly regarded, patent-pending
technology.

P-Com, Inc. develops, manufactures, and markets point-to-
multipoint, point-to-point, and spread spectrum wireless access
systems to the worldwide telecommunications market, and through
its wholly owned subsidiary, P-Com Network Services, Inc.,
provides related installation support, engineering, program
management and maintenance support services to the
telecommunications industry in the United States. P-Com
broadband wireless access systems are designed to satisfy the
high-speed, integrated network requirements of Internet access
associated with Business to Business and E-Commerce business
processes. Cellular and personal communications service (PCS)
providers utilize P-Com point-to-point systems to provide
backhaul between base stations and mobile switching centers.
Government, utility, and business entities use P-Com systems in
public and private network applications. For more information
visit http://www.p-com.com


PEACE ARCH: November 2002 Equity Deficit Tops CDN$5 Million
-----------------------------------------------------------
Peace Arch Entertainment Group Inc. (AMEX: "PAE"; TSX: "PAE.A",
"PAE.B") announced its results for three months ended November
30, 2002.

The Company's revenue totaled $1.6 million for the quarter,
compared with $3.9 million in the first quarter of FY2002.
During the quarter, the Company delivered eight episodes of the
third season of our 13 episode prime-time series "Animal
Miracles" and eight episodes of our new 13-episode series
"Whistler Stories". During the quarter, the Company was in
production of its documentary special Fantasy Lands set to air
on Discovery in the US and its documentary special Raven in the
Sun set to air on SRC (CBC French), APTV, ARTV and CHUM's The
New VI.

The Company reported a net loss of $169,000, for the three
months ended November 30, 2002, compared with a net loss of
$627,000 in the first quarter of FY2002. Diluted loss per share
was calculated on 3,887,844 weighted average shares outstanding
in the most recent quarter and in the same quarter of the prior
year.

Gross margin improved to 20.0% in the most recent three-month
period versus 18.1% in the corresponding period of the previous
year.

Selling, general and administrative (SG&A) expenses decreased by
58% to $367,000 in the most recent quarter, compared with
$868,000 in the prior-year period, reflecting the Company's
initiative to reduce overhead costs.

Earnings before interest, taxes, depreciation and amortization
(EBITDA) for the three months ended November 30, 2002 totaled
$29,000, compared with $45,000 in the comparable quarter of last
year.

As at November 30, 2002, the company posted a total
shareholders' equity deficit of CDN$5,436,000.

The Company has continued its aggressive policy of repaying
subordinated debt in recent months and, to date, has fully
repaid such debt prior to its due date of December 31, 2002.

Juliet Jones, Chief Financial Officer of the Company stated, "We
are pleased to announce our first quarter results, which reflect
a significant decrease in overheads, contributing to a reduction
in net loss for the period. She continued, "We anticipate that
our second quarter results will reflect the recently announced
acquisition, financing and debt restructuring transactions,
which we are currently in the process of completing."

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

For additional information on Peace Arch Entertainment Group,
visit http://www.peacearch.com  


PENN NAT'L: S&P Assigns B+ Rating to Proposed $1BB Bank Facility
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating to
gaming property owner and operator Penn National Gaming Inc.'s
proposed $1 billion senior secured bank credit facility. In
addition, Standard & Poor's affirmed its 'B+' corporate credit
and 'B-' subordinated debt ratings on Penn National.

At the same time, Standard & Poor's lowered its existing senior
secured rating on the company to 'B+' from 'BB-' and removed the
rating from CreditWatch where it was placed on Aug. 8, 2002.

The downgrade reflects the significant amount of senior secured
bank debt in the company's pro forma capital structure. The 'BB-
' rating on the company's existing $75 million bank credit
facility remains on CreditWatch with negative implications. This
rating will be withdrawn once the new facility is in place.

The outlook for Penn National is stable. The Wyomissing,
Pennsylvania-headquartered company had approximately $390
million debt outstanding as of September 30, 2002.

Proceeds from the proposed bank facility, in addition to excess
cash balances, will be used to fund the pending purchase of
Hollywood Casino Corp. and its wholly owned subsidiary Hollywood
Casino Shreveport, refinance the HWCC debt, and for transaction-
related expenses. The transaction is expected to close by the
end of February 2003.

"We expect Penn National to maintain its solid market positions,
despite competitive conditions in many markets served. In
addition, with a pro forma financial profile that is good for
the rating, flexibility exists to pursue potential growth
opportunities," said Standard & Poor's credit analyst Michael
Scerbo.

The ratings on Penn National reflect the company's good market
positions, continued steady operating results, expected free
cash flow generation, improved geographic diversity as a result
of the HWCC acquisition, and a good pro forma financial profile
for the rating. These factors are offset by competitive
conditions in its markets served, the company's relatively
aggressive growth strategy, and potential challenges in managing
a much larger entity.

The 'B' corporate credit and senior secured debt ratings on HWCC
remain on CreditWatch with positive implications. Standard &
Poor's expects to withdraw these ratings upon completion of the
refinancing of the bonds, which is planned by Penn National.


POLYONE CORP: Discloses $17.5MM Net Loss For Fourth Quarter 2002
----------------------------------------------------------------
PolyOne Corporation (NYSE: POL), a leading global polymer
services company, reported sales of $580.3 million and a net
loss of $17.5 million, for the fourth quarter ended December 31,
2002.  For the full year, the Company had sales of $2.5 billion
and a net loss of $58.9 million, which included a write-off of
goodwill of $53.7 million, in connection with a change in an
accounting method.

Net income for fourth-quarter 2002 included special charges
relating to costs of previously announced restructuring
initiatives, impairment of an equity investment and an
impairment of a marketable security.  These charges reduced net
income by $3.1 million.  For the full year, special charges
reduced net income by $9.3 million.  A summary of special
charges incurred during 2002 is attached.

"As expected, customer demand in the fourth quarter slowed
considerably, especially in North America," said Thomas A.
Waltermire, PolyOne chairman and chief executive officer.  
"While the fourth quarter historically reflects the lowest
seasonal demand period, we have seen indications of substantial
inventory reduction by our customers, a reflection of continuing
economic uncertainty.

"This lingering uncertainty and an apparent increase in energy
costs have continued to negatively impact the industry.  In this
environment, it is essential that we improve our competitive
cost position," added Waltermire. "I am confident that the
significant improvements we have made in the past two years,
coupled with the actions we announced in December and January,
should help both our financial performance and our drive for
growth going forward."

On December 17, 2002, PolyOne announced that it had initiated a
thorough assessment of its businesses, its overall cost
structure, the effectiveness of its approach to customers and
its debt level.  As a result of this work, the Company announced
a series of actions designed to contribute to PolyOne's
profitability in 2003:

     * On January 14, 2003, management outlined its plans to
reduce its selling and administrative (S&A) costs to less than
10 percent of sales.  In 2002, S&A costs as reported in the
consolidated income statement were approximately 12 percent of
sales.

     * The Company has targeted a reduction of $200 million to
$300 million in its overall debt level.  This goal complements
management's process of assessing alternatives for non-strategic
assets.

     * Effective with the first quarter of 2003, PolyOne will
suspend payment of its quarterly dividend until its earnings and
operating performance improve.  In 2002, PolyOne paid a $0.0625
per share (approximately $6 million) quarterly dividend.

     * The Company expects to limit capital spending to
approximately $50 million in 2003.

                 Upcoming Investor Meeting

PolyOne will host an investor meeting on Tuesday, February 11,
2003, at The Sheraton New York Hotel and Towers, 811 Seventh
Avenue at 53rd Street. Presenting will be Thomas A. Waltermire,
chairman and chief executive officer; W. David Wilson, chief
financial officer; and V. Lance Mitchell, vice president, global
plastics.  Information on this meeting can be obtained be
contacting Darlene Hampton at 216-589-4376 or
darlene.hampton@polyone.com . The meeting will be broadcast live
and then via replay for two weeks on the Company's Web site:
http://www.polyone.com

PolyOne Corporation, with 2002 revenues of $2.5 billion, is an
international polymer services company with operations in
thermoplastic compounds, specialty resins, specialty polymer
formulations, engineered films, color and additive systems,
elastomer compounding and thermoplastic resin distribution.  
Headquartered in Cleveland, Ohio, PolyOne has employees at
manufacturing sites in North America, Europe, Asia and
Australia, and joint ventures in North America, South America,
Europe, Asia and Australia. Information on the Company's
products and services can be found at http://www.polyone.com

                        *   *   *

            S&P Credit Rating Remains at BB+

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

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


POTLATCH: S&P Hatchets Credit Rating to BB+ over Weak Financials
----------------------------------------------------------------
Standard & Poor's Rating Services lowered its corporate credit
rating on integrated forest products company Potlatch Corp., to
non-investment grade 'BB+' from 'BBB-' following several weak
quarters and concerns about ongoing market conditions. The
current outlook is stable.

Standard & Poor's said that at the same time it lowered its
senior unsecured debt rating on Spokane, Wash.-based Potlatch to
'BB+' from 'BBB-' and its subordinated debt rating to 'BB-' from
'BB+'. Standard & Poor's affirmed its 'BBB-' senior secured bank
loan rating on the company.

"The downgrade was prompted by several quarters of poor
financial performance and prospects that difficult market
conditions and other factors will prevent Potlatch from
strengthening credit measures to levels appropriate for the
former ratings," said Standard & Poor's credit analyst
Cynthia Werneth. "The bank loan rating was affirmed and is now
one notch higher than the corporate credit rating because the
collateral and the borrowing base restrictions should assure
lenders of full recovery in a default scenario."

Standard & Poor's said that ratings reflect Potlatch Corp.'s
below-average business position and a financial profile that
remains stretched even after significant debt reduction with
asset sale proceeds in 2002.


PRIMUS TELECOM: Further Reduces Debt by over $64 Million
--------------------------------------------------------
PRIMUS Telecommunications Group, Incorporated (Nasdaq: PRTL), a
global facilities-based Total Service Provider offering an
integrated portfolio of voice, data, Internet and Web hosting
services, announced that it has purchased $64.15 million
principal amount of its high yield debt for $46.9 million
(excluding accrued interest payments).

In particular, the following high yield debt securities were
purchased: $43.65 million principal amount of the 11.75% senior
notes due 2004, $18.8 million principal amount of the 9.875%
senior notes due 2008, and $1.7 million principal amount of the
11.25% senior notes due 2009. The purchased debt had annual
interest payments of $7.2 million, and represents $19.3 million
in future cash interest savings (assuming the bonds were held to
maturity).

"With these purchases, PRIMUS has reduced the outstanding amount
of high yield bonds to $326 million," stated K. Paul Singh,
Chairman and Chief Executive Officer of PRIMUS. "Significantly,
we have purchased slightly over 50% of the outstanding bond
issue that is due in August 2004. This development directly
addresses the near-term liquidity issues certain investors had
raised. We intend to pursue additional initiatives to reduce our
debt further."

The Company and/or its subsidiaries will evaluate and determine
on a continuing basis, depending upon market conditions and the
outcome of events described as "forward-looking statements" in
this release and our SEC filings, the most efficient use of the
Company's capital, including investment in the Company's network
and systems, lines of business, potential acquisitions,
purchasing, refinancing, exchanging or retiring certain of the
Company's outstanding debt securities in the open market or by
other means to the extent permitted by its existing covenant
restrictions. While the Company has suspended discussions it had
been conducting with certain of its high yield bondholders, it
remains receptive to proposals made by individual holders.

PRIMUS Telecommunications Group, Incorporated (NASDAQ: PRTL),
with a total shareholders' equity deficit of about $183 million
(as of September 30, 2002), is a global facilities-based Total
Service Provider offering bundled voice, data, Internet, digital
subscriber line (DSL), Web hosting, enhanced application,
virtual private network (VPN), and other value-added services.
PRIMUS owns and operates an extensive global backbone network of
owned and leased transmission facilities, including over 300 IP
points-of-presence (POPs) throughout the world, ownership
interests in over 23 undersea fiber optic cable systems, 19
international gateway and domestic switches, a satellite earth
station and a variety of operating relationships that allow it
to deliver traffic worldwide. PRIMUS has been expanding its e-
commerce and Internet capabilities with the deployment of a
global state-of-the-art broadband fiber optic ATM+IP network.
Founded in 1994 and based in McLean, VA, PRIMUS serves
corporate, small- and medium-sized businesses, residential and
data, ISP and telecommunication carrier customers primarily
located in the North America, Europe and Asia Pacific regions of
the world. News and information are available at PRIMUS's Web
site at http://www.primustel.com    

DebtTraders reports that Primus Telecommunications Group's
12.750% bonds due 2009 (PRTL09USR2) are trading at about 70
cents-on-the-dollar. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=PRTL09USR2


QWEST COMMS: Files Proposal to Resolve Issues With FCC
------------------------------------------------------
Qwest Communications International Inc., (NYSE: Q) offered a
breakthrough proposal in resolving competitive issues pending at
the Federal Communications Commission. Demonstrating the
company's Spirit of Service, and commitment to work with state
and federal agencies to generate solutions that benefit
customers, Qwest filed an unbundled switching proposal with the
FCC. The proposal facilitates the shift from Unbundled Network
Element Platform resale to facilities based competition.

The company's proposal has the support of two prominent state
regulatory commissioners in Qwest's local service area -- Oregon
Public Utilities Commissioner Joan Smith and Montana Public
Service Commission Chairman Bob Rowe.

"I support Qwest's effort to propose a framework for
transitioning unbundled switching from the list of required
unbundled network elements," said Smith and Rowe in a joint
statement. "The two-part proposal relies on the expertise of
state commissions to assist in the process. This proposal is a
major step in the right direction and is a meaningful
compromise."

The proposal eliminates the unbundled switching requirement in
areas where multiple competitors, or Competitive Local Exchange
Carriers, have deployed their own switches. It also establishes
a role for state regulatory commissions to determine the
transition timetable for eliminating unbundled switching as a
UNE in all other remaining areas.

"This fair proposal is easily applied and is based on a
conservative assessment of in-place competitive switching," said
Steve Davis, Qwest senior vice president of public policy. "In
creating this compromise solution, we recognized the desire of
the state commissions and the FCC to consider alternative,
workable approaches."

The Telecommunications Act of 1996 requires companies like Qwest
to provide access to unbundled network elements. Qwest offers
CLECs unbundled access to portions of its network -- loop,
transport and switches, and access to signaling databases for
call routing and completion. Because so many CLECs have deployed
their own switches, it is no longer necessary to offer unbundled
switching.

Under the two-part proposal, the FCC would remove unbundled
switching from the UNE list where CLECs have a significant
deployment of owned switches. Specifically, where there are
three or more CLEC switches within a geographic area known as a
LATA, the switching requirement would be removed promptly. In
LATAs where there are fewer than three such switches, the state
commissions, interpreting the guidelines established by the FCC,
would look at additional factors to determine reasonable
timetables to remove switching.

State commissions will have the responsibility to monitor
unbundled switching within a well known industry framework --
the same state approved process that measures incumbent carrier
wholesale performance.

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


REGUS BUSINESS: Seeking Court Nod to Hire Pillsbury Winthrop
------------------------------------------------------------
Regus Business Centre Corp., and its debtor-affiliates ask
permission from the U.S. Bankruptcy Court for the Southern
District of New York to bring-in Pillsbury Winthrop LLP as
Counsel.

Pillsbury Winthrop has been working with the Debtors since early
2002 to provide advice concerning the restructuring of the
Debtors' businesses. Pillsbury Winthrop was retained for the
planning of these Chapter 11 cases on November 7, 2002.  During
this time, in its capacity as counsel to the Debtors, Pillsbury
Winthrop has developed extensive knowledge concerning the
Debtors' businesses and their financial affairs.  The Debtors
believe that it would be in the best interests of their estates
to continue to retain Pillsbury Winthrop to advise the Debtors
throughout the bankruptcy and reorganization process.

Pillsbury Winthrop will:

     a) provide legal advice with respect to their powers and
        duties as debtors-in-possession in the continued
        operation of their business and management of their
        properties;

     b) assist in the formulation of a business plan and the
        negotiation of a resolution of these cases with the
        Debtors' various creditor constituencies;

     c) negotiate and obtain debtor-in-possession financing,
        exit financing and any other form of financing the
        Debtors may require in these cases or in connection with      
        any plan of reorganization;

     d) render any requested pension, tax or labor advice that
        may be required to effectuate or formulate a plan of
        reorganization in these cases;

     e) pursue confirmation of a plan of reorganization and
        approval of a disclosure statement;

     f) prepare on behalf of the Debtors, necessary
        applications, motions, answers, orders, reports and
        other legal papers related to the foregoing duties;

     g) appear in Court and to protect the interests of the
        Debtors before the Court in connection with the
        foregoing duties; and

     h) perform all other legal services for the Debtors which
        may be necessary and proper in furtherance of the
        foregoing duties.

The Debtors will compensate Pillsbury Winthrop on an hourly
basis.  The attorneys and paralegals presently designated to
represent the Debtors and their current standard hourly rates
are:

          Kenneth N. Russak           $475 per hour
          William B. Freeman          $455 per hour
          Karen B. Dine               $450 per hour
          Kalman Steinberg            $415 per hour
          Christopher J. Chaudoir     $350 per hour
          Harry E. Garner             $295 per hour
          Nadine Youssef              $285 per hour
          Eugene M. Kofman            $270 per hour
          Erica L. Edman              $270 per hour
          John L. Castelly            $270 per hour
          Avisha Patel                $250 per hour
          Andre Khansari              $215 per hour
          Gila Jones                  $140 per hour

Regus Business Centre Corp., filed for chapter 11 protection on
January 14, 2003, (Bankr. S.D.N.Y. Case No. 03-20026). Karen
Dine, Esq., at Pillsbury Winthrop LLP represents the Debtors in
their restructuring efforts. When the Debtors filed for
protection from its creditors, it listed debts and assets of:

                               Total Assets:    Total Debts:
                               -------------    ------------
Regus Business Centre Corp.    $161,619,000     $277,559,000
Regus Business Centre BV       $157,292,000     $160,193,000
Regus PLC                      $568,383,000      $27,961,000
Stratis Business Centers Inc.      $245,000       $2,327,000


SAFETY-KLEEN: Court Approves Settlement Pact with Three Insurers
----------------------------------------------------------------
Safety-Kleen Corporation and its debtor-affiliates sought and
obtained Judge Walsh's approval and authority to implement
several settlement agreements reached with three insurers:

       (1) A November 6, 2002 Settlement Agreement and Release
           between:

             (a) Solvents Recovery Service of New Jersey, Inc.,
                 Safety-Kleen, and certain of their affiliates,
                 and

             (b) Royal Indemnity Company and certain of its
                 Affiliates;

       (2) A July 18, 2002 Settlement Agreement and Release
           between:

             (a) SRSNJ, Safety-Kleen, and certain of their
                 affiliates, and

             (b) North Star Reinsurance Corporation and certain
                 of its affiliates; and

       (3) A November 12, 2002 Settlement Agreement and Release
           between:

             (a) Safety-Kleen and certain of its affiliates, and

             (b) Fireman's Fund Insurance Company, the American
                 Insurance Company, National Surety Corporation,
                 And certain of their affiliates.

Various insurers dispute whether or to what extent the
comprehensive general liability insurance policies issued to the
Debtors or their predecessors provide coverage for third-party
claims arising from solvent recovery and product liability
claims.

As a result of the ongoing disputes with the insurers, the
Debtors initiated three actions:

       (1) "The Solvents Recovery Service of New Jersey, Inc.,
           et al v. American Reinsurance Company et al" action
           pending in the Superior Court of New Jersey, Hudson
           County, Law Division;

       (2) "Safety-Kleen Corporation v. Unigard Security
           Insurance Company et al", pending in the Superior
           Court of Washington, King County; and

       (3) "Safety-Kleen v. Continental", pending in the
           Superior Court of California, County of Los Angeles.

In the New Jersey Coverage Action and the Washington Coverage
Action, the Debtors seek coverage for certain environmental
liabilities under various comprehensive general liability
insurance policies. Specifically, the Debtors contend that their
general liability carriers are obligated to pay the costs,
expenses, and liabilities arising out of claims, demands and
suits brought against the Debtors for property damage, bodily
injury and personal injury arising out of environmental and
related damage allegedly caused by the Debtors or arising out of
the Debtors' business operations.

In the California Coverage Action, the Debtors seek coverage
under certain other historical comprehensive general liability
policies for bodily injury and other claims arising out of
product liability toxic tort suits and claims and similar or
related claims, losses and liabilities asserted against the
Debtors arising out of the Debtors' manufacture, distribution,
sale or use of solvent products.

The settlement terms are simple.  The Settling Insurers agree to
make settlement payments either to Safety-Kleen, or to be
deposited and maintained in the Qualified Settlement Trust, in
exchange for a release of the Settling Insurers by Safety-Kleen
and some of its subsidiaries from the Insurers' obligations
under the policies.

                  The Settlement Agreement

The most significant terms and conditions of these Settlement
Agreements are:

(1) The Royal Settlement:

      (a) Settlement Amount.  Royal will pay Safety-Kleen
          $850,000 by check or draft made payable to
          the QST;

      (b) Effective Date.  The date of the final order
          approving the Royal Settlement;

      (c) Dismissal from New Jersey Coverage Action.  Upon
          receipt of the Settlement Amount, Safety-Kleen
          will seek dismissal with prejudice of its
          complaint against Royal in this action;

      (d) Mutual Releases.  The parties will sign mutual
          releases;

      (e) Indemnification.  The QST will indemnify Royal
          up to the Settlement Amount with respect to any
          claim made against Royal under the Royal
          policies; and

      (f) QST Termination.  In the event that the QST is
          terminated in accordance with its terms or the
          indemnification fails in its essential purpose,
          then Safety-Kleen and its insured affiliates will
          assume QST's obligations to Royal.

(2) The North Star Agreement

      (a) Settlement Amount.  North Star will pay Safety-
          Kleen $75,000 by check or draft made payable to
          "Zevnik Horton LLP as attorney in trust for
          Safety-Kleen Corp.";

      (b) Effective Date.  The date of the final order
          approving the North Star Settlement;

      (c) Dismissal from New Jersey Coverage Action.  Upon
          receipt of the Settlement Amount, Safety-Kleen
          will seek dismissal with prejudice of its
          complaint against North Star in this action;

      (d) Mutual Releases.  The parties will sign mutual
          releases; and

      (e) Indemnification.  Safety-Kleen and its insured
          affiliates will indemnify North Star for any
          action made against North Star under the North
          Star policies up to the settlement amount.

(3) The Fireman's Fund Agreement

      (a) Settlement Amount.  Fireman's Fund will pay
          Safety-Kleen $700,000 by check or draft made
          payable to the QST;

      (b) Effective Date.  The date of the final order
          approving the Fireman's Fund Settlement;

      (c) Dismissal from New Jersey and Washington Coverage
          Action.  Upon receipt of the Settlement Amount,
          Safety-Kleen will seek dismissal with prejudice
          of its complaint against Fireman's Fund in each of
          the New Jersey Coverage Action and the Washington
          Coverage Action;

      (d) Mutual Releases.  The parties will sign mutual
          releases;

      (e) Indemnification.  The QST will indemnify Fireman's
          Fund up to the Settlement Amount, less any amounts
          paid under clause (g), with respect to the policies
          and environmental claims at issue in the New Jersey
          Coverage Action and the Washington Coverage Action;

      (f) QST Termination.  In the event that the QST is
          terminated in accordance with its terms or the
          indemnification fails in its essential purpose,
          then Safety-Kleen and its insured affiliates will
          assume QST's obligations to Fireman's Fund; and

      (g) California Coverage Action Indemnification.  Safety-
          Kleen will indemnify Fireman's Fund up to the
          settlement amount, less any amounts paid under
          clause (e) in connection with the policies and
          solvent suit claims at issue in the California
          Coverage Action.

                 National Union Reserves Rights

National Union Fire Insurance Company of Pittsburgh, PA., did
not object to the Debtors' request.  Frederick B. Rosner, Esq.,
at Jaspan Schlesinger Hoffman LLP, in Wilmington, Delaware, and
Michael S. Davis, Esq., at Zeichner, Ellman & Krause, L.L.P,
explain that National Union reserves all rights in the event the
proposed form of order is modified in any way prior to its
submission to the Court for consideration.  If there would be
any change to the proposed order, National Union asks the Court
for an opportunity to be heard in that event. (Safety-Kleen
Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service,
Inc., 609/392-0900)    


SIRIUS:  Launches Exchange Offer for Outstanding Debt
-----------------------------------------------------
SIRIUS (Nasdaq: SIRI), the premier satellite radio broadcaster
and only service delivering uncompromised coast-to-coast music
and entertainment for your car and home, announced that it will
launch an offer on Friday, January 31, 2003, to exchange shares
of its common stock for all of its outstanding debt.  Holders of
approximately 79% in principal amount of SIRIUS' debt securities
have already agreed to tender in the offer.

Debt holders will receive 779.5 shares of common stock for each
$1,000 of obligation  (principal and accrued interest)
exchanged.  Completion of the exchange offer is conditioned
upon, among other things, receipt of valid tenders from not less
than 97% in aggregate principal amount of SIRIUS' outstanding
debt.  This minimum condition may be reduced with the consent of
holders of SIRIUS' debt securities.

Tendering holders will also consent to the adoption of certain
amendments to the indentures under which SIRIUS' outstanding
notes were issued to eliminate substantially all of the
restrictive covenants.

"We are excited to be launching our exchange offer, and are
pleased that 79% of our debt holders are already committed to
our recapitalization," said Joseph P. Clayton, President and CEO
of SIRIUS.  "Once we complete this important transaction, we
will have the strongest balance sheet in this new and exciting
industry to take us forward."

The exchange offer and consent solicitation will expire at 5:00
p.m., New York City time, on Tuesday, March 4, 2003, unless
extended.  The exchange offer and consent solicitation are
elements of the company's previously announced recapitalization.  
As part of this recapitalization, SIRIUS will exchange shares of
its common stock (and warrants to purchase common stock) for all
of its outstanding preferred stock, and sell shares of common
stock for $200 million in cash to affiliates of
OppenheimerFunds, Inc., Apollo Management, L.P. and The
Blackstone Group L.P.

Concurrent with the exchange offer, the company is also
soliciting votes to accept or reject a prepackaged plan of
reorganization, which will attempt to accomplish the
recapitalization on substantially the same terms as the
out-of-court recapitalization.  SIRIUS only expects to file this
prepackaged plan if the minimum tender condition to its exchange
offer is not satisfied or waived.

Separately, SIRIUS announced that it has scheduled a Special
Meeting of Stockholders for 9:00 a.m., New York City time, on
March 4, 2003 to approve the recapitalization transactions.  The
Proxy Statement relating to this Special Meeting of Stockholders
was mailed to stockholders commencing Friday, January 31, 2003.

The terms and conditions of the exchange offer, and other
important information, are contained in the company's Prospectus
and Solicitation Statement dated January 30, 2003.  The dealer
manager for the tender offer is UBS Warburg LLC.  Holders of
debt securities may request additional copies of the Prospectus,
the related Letter of Transmittal and ballots by contacting
MacKenzie Partners, Inc., the information agent, at (212) 929-
5500. Holders may also get copies of the Prospectus at the SEC's
internet Web site, http://www.sec.gov

SIRIUS is the only satellite radio service bringing listeners
100 streams of the best music and entertainment coast-to-coast.  
SIRIUS offers 60 music streams with no commercials, along with
40 world-class sports, news and entertainment streams for a
monthly subscription fee of $12.95.  Stream Designers create and
deliver uncompromised music in virtually every genre to our
listeners 24 hours a day.  Satellite radio products bringing
SIRIUS to listeners in the car, truck, home, RV and boat are
manufactured by Kenwood, Panasonic, Clarion, Audiovox and
Jensen, and are available at major retailers including Circuit
City, Best Buy, Car Toys, Good Guys, Tweeter, Ultimate
Electronics, Sears and Crutchfield.  SIRIUS is the premier OEM
satellite radio provider, with exclusive partnerships with
DaimlerChrysler, Ford and BMW. Automotive brands currently
offering SIRIUS radios in select new car models include BMW,
Chrysler, Dodge, Jeep(R), and Nissan.  Automotive brands that
have announced plans to start offering SIRIUS in select models
include Ford, Lincoln, Mercury, Mercedes-Benz, Jaguar, Volvo,
Mazda, Infiniti, MINI, Audi, Volkswagen, Land Rover and Aston
Martin.


SORRENTO NETWORKS: Plans to Appeal Nasdaq's Delisting Decision
--------------------------------------------------------------
Sorrento Networks (Nasdaq:FIBR), a leading supplier of
intelligent optical networking solutions for metro and regional
applications, announced that it will appeal a decision of the
Nasdaq Staff to delist the Company's securities from the Nasdaq
National Market.

The Company received a letter from the Nasdaq Staff on January
23, 2003 stating that the Company will be delisted because it
was not able to satisfy the deadline provided in an extension
granted by Nasdaq in October 2002. As announced in October, the
Staff had granted the Company until December 9, 2002 to sign
definitive agreements with its debenture holders and the Series
A shareholders of its principal operating subsidiary, Sorrento
Networks, Inc., and until January 8, 2003 to demonstrate
compliance with all continued listing requirements. Until the
capital restructuring is completed, the Company will not comply
with either the minimum $4,000,000 net tangible assets or
$10,000,000 stockholders' equity requirement for continued
listing set forth in Marketplace Rule 4450(a)(3).

The Company believes that it is still possible to complete the
capital restructuring transaction by the end of March 2003,
although it was not able to meet the schedule required by the
initial Nasdaq extension. Accordingly, it has appealed the
Staff's determination to a Listing Qualifications Panel pursuant
to Marketplace Rules 4800 et seq. The Company's securities will
remain listed on the Nasdaq National Market pending the Panel's
decision.

Separately, the Company also announced that 100% of SNI's Series
A preferred shareholders have now agreed to support the capital
restructuring plan, and that definitive agreements are in the
final stages of preparation. The Company previously announced
that 100% of its debenture holders had agreed to the plan.

Commenting on the Nasdaq Staff decision, Sorrento's Chairman and
CEO, Phil Arneson, stated: "While we are disappointed that the
Staff decided that it could not exercise its discretion to grant
us the additional time we need to complete our capital
restructuring plan, we are encouraged that each and every one of
the debenture holders and Series A shareholders have expressed
their commitment to the success of the Company by supporting the
plan, and we are moving forward as rapidly as possible to
complete definitive agreements and obtain shareholder approval.
While challenges remain, we intend to make as much progress as
we can before the hearing on our appeal, and believe that our
arguments before the Panel in support of our continued Nasdaq
listing will be strong. With our excellent product line, strong
customer base, and the continuing uptrend in orders and
shipments, we are all excited at the Company's prospects once
the recapitalization is completed."

No assurance can be given, however, that the appeal will be
successful.

Sorrento Networks, headquartered in San Diego, is a leading
supplier of intelligent optical networking solutions for metro
and regional applications worldwide. Sorrento Networks' products
support a wide range of protocols and network traffic over
linear, ring and mesh topologies. Sorrento Networks' existing
customer base and market focus includes communications carriers
in the telecommunications, cable TV and utilities markets. The
storage area network (SAN) market is addressed though alliances
with SAN system integrators. Recent news releases and additional
information about Sorrento Networks can be found at
http://www.sorrentonet.com

At October 31, 2002, Sorrento's balance sheet shows a working
capital deficit of about $30 million. The Company's total
shareholders' equity deficit widened to about $19.8 million,
from a deficit of about $18 million (Jan. 31, 2002).


SUN WORLD: Files Voluntary Chapter 11 Petition in California
------------------------------------------------------------
Sun World International, Inc. a leader in specialty fresh
produce, announced it has filed a voluntary petition for Chapter
11 Bankruptcy Protection in the United States Bankruptcy Court
for the Central District of California, Riverside Division. As
part of the filing, Sun World will obtain a seasonal financing
package that provides for working capital through the 2003-04
growing seasons. The funding will allow the Company to access to
up to $40 million in "debtor in possession" (DIP) financing.

"The filing was necessary to protect our employees, customers,
growers and licensees, and also to allow Sun World to meet its
seasonal working capital requirements," stated Tim Shaheen, Sun
World's chief executive officer. "This is a healthy company with
a strong core business that performed particularly well in 2002.
However, the demands of seasonal agriculture and the capital
structure of the Company required us to find new financing
through bankruptcy protection."

The filing along with the cash infusion will allow Sun World to
capitalize on the strong demand for its expanding line of
proprietary branded fresh produce. Sun World is a wholly owned
subsidiary of Cadiz Inc.

"The filing should have little if any impact on the Company's
employees or our business relationships. Customers, including
many supermarket chains around the nation as well as our
international clients, can be assured of an uninterrupted supply
of high quality fresh produce," Shaheen said.

Current management will remain in place. Sun World has retained
the highly regarded law firm Klee, Tuchin, Bogdanoff & Stern LLP
as outside counsel to help manage the bankruptcy process.

In recent years, the Company has had success developing, growing
and promoting proprietary fruits such as its popular MIDNIGHT
BEAUTY brand grape, BLACK DIAMOND brand plum, and HONEYCOT brand
apricot. In addition to its own California production, Sun World
licenses others to grow and distribute its fruit varieties in
Europe, South Africa, South America and Australia.

CASE INFORMATION: United States Bankruptcy Court for the Central
District of California, Riverside Division Case Numbers:

   Sun Desert Inc.   RS 03-11369 DN
   Sun World Intl.   RS 03-11370 DN
   Coachella Growers RS 03-11371 DN
   Sun World/Rayo    RS 03-11374 DN

Sun World International is a leading innovator in the research,
production, distribution and promotion of fresh produce. A
division of publicly-held Cadiz Inc., Sun World maintains
integrated agricultural operations throughout central and
southeastern California. More information about Sun World is
available at http://www.sun-world.com

Cadiz Inc., a publicly-held agricultural and water development
firm traded on the NASDAQ National Market System, acquired Sun
World in September 1996.


SYSTECH RETAIL: Creditors' Meeting will Convene on Mar. 5
---------------------------------------------------------
The United States Trustee will convene a meeting of Systech
Retail Systems (USA) Inc.'s creditors on March 5, 2003 at 10:00
a.m., in the USBA Meeting Room, Room 443, at the Century Station
Building located at 300 Fayetteville St. in Raleigh, North
Carolina.  This is the first meeting of creditors required under
11 U.S.C. Sec. 341(a) in all bankruptcy cases.

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

Systech Retail Systems (USA) Inc., along with two other
affiliates filed for chapter 11 protection on January 13, 2003,
(Bankr. Case No. 03-00142), in the Eastern District of North
Carolina (Raleigh).  Systech is an independent developer and
integrator of retail technology, including software, systems and
services to supermarket, general retail and hospitality chains
throughout North America.  N. Hunter Wyche, Esq., at Smith
Debnam Narron Wyche & Story, represents the Debtors in their
restructuring efforts.  When the Company filed for protection
from its creditors, it listed estimated debts and assets of over
$50 million.


TELESYSTEM: Prepares Prospectus re Offer & Resale of 14% Notes
--------------------------------------------------------------
Telesystem International Wireless Inc. has prepared a prospectus
relating to the offer and resale by the holders named in the
prospectus of its 14% Senior Guaranteed Notes due 2003, of up to
$11,775,103 principal amount of the Company's 14% Senior
Guaranteed Notes that it issued to the selling noteholders (1)
as an additional issuance of notes on December 30, 2002, (2) as
payment in kind of the interest owed on the Underlying Notes on
the June 30, 2002 interest payment date, (3) as payment in kind
of the interest owed on the Underlying Notes on the December 30,
2001 interest payment date, and/or (4) as part of the original
issuance of Underlying Notes on September 19, 2001, but have not
been previously registered with the SEC.

The Company does not intend to apply to list the notes on any
national securities exchange or the Nasdaq Stock Market.

Telesystem's wholly-owned subsidiary, Telesystem International
Wireless Corporation N.V., a corporation organized under the
laws of The Netherlands, guarantees Telesystem International
Wireless' obligations with respect to the notes. The guarantee
is secured as and to the extent described in the prospectus.

                           *  *  *

As reported in the Jan. 15, 2003, issue of the Troubled Company
Reporter, Standard & Poor's lowered its long-term corporate
credit rating on telecommunications company Telesystem
International Wireless Inc., to 'CCC+' from 'B-'. The outlook is
negative. At the same time, the rating on TIW's US$220 million
14% senior secured notes was lowered to 'CCC+' from 'B-'.

The ratings actions on the Montreal, Quebec-based company
reflect the refinancing risk of the US$220 million notes, which
mature in December 2003, and the structural subordination of the
debt at the corporate level.


TEXFI INDUSTRIES: Trustee Hires Verdolino & Lowey as Accountant
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave its stamp of approval to Stephen S. Gray, the Chapter 11
Trustee for Texfi Industries, to employ Verdolino & Lowey PC as
his Accountant in this chapter 11 case.

As accountant, Verdolino & Lowey will:

     a) analyze the Debtor's financial operation from the
        Petition Date;

     b) analyze the Debtor's prepetition financial information;
        and

     c) assist the Trustee in any litigation, including by
        providing testimony, against the Debtor's financing
        institutions and insiders and other potential
        adversaries.

Verdolino & Lowey's hourly rates are
     
          Principals          $215 - $275 per hour
          Managers            $145 - $215 per hour
          Staff               $ 85 - $145 per hour
          Bookkeepers         $ 65 - $105 per hour
          Clerical            $ 55 per hour

Texfi Industries, Inc., filed for chapter 11 protection on
February 15, 2000 (Bankr. S.D.N.Y. Case No. 00-10603).  Barbra
R. Parlin, Esq. and David Craig Albalah, Esq. at McDermott, Will
& Emery represent the Debtor in its restructuring efforts. Joel
H. Levitin, Esq. and Stephen J. Gordon, Esq. at Dechert serve as
counsel for the Chapter 11 Trustee.


TRINITY ENERGY: Files for Chapter 11 Reorganization in Texas
------------------------------------------------------------
Pursuant to provisions afforded through the United States
Bankruptcy Code, Trinity Energy Resources, Inc., (OTCBB:TRGC)
filed in the Southern District of Texas a voluntary petition for
protection under Chapter 11 of the Code.

The Company will continue to operate all business units and will
release additional information in the near future as to its
strategies and new focus upon reorganizing and restructuring.
The Company believes this action was in the best interest of all
shareholders and will diligently pursue the course necessary to
operate unencumbered and with maximum possible efficiency.


TRANSFIN'L HLDGS: Performance Capital Reports 8.56% Equity Stake
----------------------------------------------------------------
Performance Capital Group, LLC has reported beneficially
ownership of 281,500 shares of the common stock of
Transfinancial Holdings, Inc., which amount represents 8.56% of
the outstanding common stock of the Company.  Performance
Capital has sole powers of voting and disposition over the stock
held.

TransFinancial Holdings shut down its trucking businesses --
Crouse Cartage and Specialized Transport, which had accounted
for 95% of TransFinancial's revenues -- in 2000 to concentrate
on its financial services operations, but the remaining debt
proved too much for the surviving parent to overcome. The
company's Universal Premium Acceptance unit, which financed
premiums for buyers of commercial property and casualty
insurance and thus allowed customers more time to pay for
insurance, was sold to an undisclosed buyer.


TRISM: Wants to Stretch Plan Filing Exclusivity though April 11
---------------------------------------------------------------
Trism, Inc., and its debtor-affiliates asks the U.S. Bankruptcy
Court for the Western District of Missouri for a third extension
of its exclusive period to file chapter 11 plan and disclosure
statement.

Since the Debtors have been operating as Debtors-in-Possession,
the Debtors believe that they are in a unique position to assess
their economic condition and are best qualified to propose a
plan and develop a comprehensive disclosure statement.

However, in order for Debtors to obtain acceptance by each class
of impaired claims and interests, they must amend the Plan and
Disclosure Statement to include descriptions and projections for
various newly considered Plan features, including modifications
to the alternative dispute resolution process for tort
claimants.

However, at the conclusion of the hearing of Debtors' motion to
approve the ADR Plan, the Court took the ADR Plan under
advisement. Accordingly, Debtors seek to extend the Exclusive
Plan Filing Period to run through April 11, 2003 so that it will
have time to include the provisions of any approved ADR Plan and
Disclosure Statement.

Trism, Inc., the nation's largest trucking company that
specializes in the transportation of heavy and over-dimensional
freight and equipment, as well as material such as munitions,
explosives and radioactive and hazardous waste, filed for
chapter 11 protection on December 18, 2001, (Bankr. W.D.MO. Case
No. 01-31323), in Western District of Missouri. Laurence M.
Frazen, Esq. at Bryan Cave LLP represents the Debtors in their
restructuring efforts. When the Company filed for protection
from its creditors, it listed $155 million in assets and $149
million in debts.


TWEETER HOME: Obtains Waiver of Q4 EBITDA Covenant Violation
------------------------------------------------------------
Tweeter Home Entertainment Group, Inc., (Nasdaq: TWTR) announced
its earnings results for the first fiscal quarter ended
December 31, 2002.

For the quarter ended December 31, 2002, total revenue decreased
0.9% to $250 million from $252 million in the same period last
year. Comparable store sales decreased 10.4%, excluding the two-
store Hillcrest chain, acquired in March 2002. Net income for
the quarter decreased to $5.2 million from $13.5 million for the
same period last year. Earnings per share were $0.22 on a
diluted basis, compared to $0.56 for the same period last year.

Income from operations decreased to $9.1 million from $23.0
million in the same period last year. As a percentage of
revenue, operating income decreased to 3.6% from 9.1% in the
same period last year. This was due to a 340 basis point
increase in selling expenses as well as a 160 basis point
decline in gross margin. Overall gross margin decreased to 34.9%
from 36.5% for the same quarter last year. While pure product
margins were up slightly during the quarter, we received less in
vendor rebates and allowances than planned. This is a result of
under performing on the sales plan with a number of vendors,
which resulted in missing several sales incentive goals.

The large increase in selling expenses as a percent of revenue
is primarily attributable to missing our sales plan by almost
$37 million. This resulted in a leverage reduction in the areas
of compensation, fixed occupancy costs, depreciation and
advertising. Corporate, general and administrative expenses as a
percentage of revenue increased to 4.5% from 4.0% last year, and
this is also attributable to missing the sales plan and higher
corporate infrastructure costs.

Joe McGuire, Chief Financial Officer said, "We expect the
inventory level at the end of January to be about $149 million,
down from the $162 million level at the end of December. Our
plan to reduce our excess holiday season inventory is on track,
and we expect to finish the March quarter with inventory at
approximately $140 million, and debt at $63 million.

McGuire continued, "We previously announced that as a result of
the December quarter's performance, we would breach our EBITDA
covenant on our revolving credit facility. We have received a
waiver of this covenant for the December quarter, but more
importantly, have amended the agreement to adjust the covenants
to match our current forecasts for the balance of the year. Our
pricing structure on the amended credit facility will increase
25 basis points effective with the amendment."

McGuire went on to say, "While we were amending the existing
facility, we also began negotiations on a new credit facility.
As a result, we have received a commitment letter from Fleet
National Bank for a three-year, $110 million revolving credit
facility. This is intended to replace the existing facility, and
we expect to close on this in the next six to eight weeks."

McGuire concluded, "For the quarter ending March 2003, we are
expecting comparable store sales to be in the range of negative
5% to negative 8%, which will put revenue in the range of $193
million to $198 million. We expect EPS to be in the range of
negative $.01 to positive $.03 for the March quarter. Included
in this plan is an assumption that we will fall short on a
number of vendor sales incentive programs, causing gross margin
to be down between 80 and 100 basis points for the March quarter
compared to the same quarter for last year."

Jeffrey Stone, President and CEO said, "Our short- to mid-term
goal is to run the business for profitability and forego store
growth in favor of continuing to reduce our debt. This will
result in strengthening what is already a strong Balance Sheet."

Stone continued, "We have responded to business trends by re-
forecasting our business plan for the balance of the year and in
the process, eliminated roughly $6.6 million in budgeted
expenses. Although we do not expect to perform at a negative
10.0% comparable store sales level for the balance of the year,
if that scenario occurred we believe that we can earn $1 million
in operating income and generate $20 million of EBITDA. Running
the business at flat comps for the balance of the year under our
adjusted expense scenario would produce operating income of
approximately $19 million and EBITDA of $38 million for the
year."

Stone went on to say, "High definition and HD ready televisions
have been driving our business for years and another video
display technology, flat panel is moving to center stage. Our
flat panel TV results met our internal plan for the December
quarter. We had high expectations, we were aggressive in our
product procurement and marketing plans for the category and as
a result, grew the business to 11.6% of revenue."

Stone concluded, "We do not typically report monthly sales, but
as a result of the current economy and our December quarter
results, we are reporting that comp store business is running
down approximately 2.5% through January 28, 2003."

Tweeter Home Entertainment Group, Inc., (NASDAQ: TWTR) was
founded in 1972 by current Chairman Sandy Bloomberg. Based in
Canton, Massachusetts, the Company is a specialty retailer of
mid- to high-end audio and video consumer electronics products.
The Company's fiscal 2002 revenues were $796 million. Tweeter
was named "Consumer Electronics Retailer of the Year" four out
of the past seven years by Audio-Video International, "1999
Retail Leader" by TWICE, and awarded Dealerscope's 1999 Dealer's
Pride award. Tweeter Home Entertainment Group, Inc. now operates
174 stores under the Tweeter, HiFi Buys, Sound Advice, Bang &
Olufsen, Electronic Interiors, Showcase Home Entertainment and
Hillcrest High Fidelity names in the New England, Texas,
Southern California, Mid-Atlantic, Chicago, Southeast, Florida
and Phoenix markets. The Company employs more than 3,700
associates.


TYCO INT'L: Nominates H. Carl McCall to Board of Directors
----------------------------------------------------------    
Tyco International Ltd. (NYSE: TYC, BSX: TYC, LSE: TYI)
announced that H. Carl McCall, former Comptroller of the State
of New York, has been nominated to join the Board of Directors
at or before the Company's next annual general meeting.

In addition to Mr. McCall, three other nominees, Sandra
Wijnberg, Dennis Blair and Brendan O'Neill, have been nominated
to join the Board.  They will become Board members either when
there are additional resignations from existing directors or at
the Company's next annual general meeting.

Mr. Breen said:  "I am pleased to welcome Carl McCall as a
nominee to the Tyco Board.  He brings a wide range of knowledge
to Tyco from his long and distinguished career in public service
and the financial world. Carl is an experienced leader who has
thought deeply about issues facing public companies and I know
he will offer a unique and valuable perspective to the Tyco
Board."

Mr. McCall said:  "With its strong operating businesses,
outstanding management and commitment to the highest standards
of corporate governance, Tyco has the capacity to become one of
the great industrial companies in this country.  I am
enthusiastic about the opportunity to work with Ed Breen in
helping the company fulfill its potential and deliver real value
to shareholders, employees and the communities in which it
operates."

H. Carl McCall began his term as New York State Comptroller in
May 1993, was re-elected to his second term as Comptroller in
November 1998 and served until November 2002, when he became the
Democratic nominee for Governor of the state of New York.  As
Chief Fiscal Officer of the State, he was responsible for
governmental and financial oversight and pension fund
management.  As sole Trustee of the 880,000-member State and
Local Retirement Systems, Mr. McCall was responsible for
investing a pension fund valued at $122 billion.  Under his
leadership, the value of the fund more than doubled.  At the
same time, the fund launched a campaign to improve corporate
governance through regulation, legislation and direct engagement
with corporations.

Previous to his position as Comptroller, McCall was a vice
president of Citicorp for eight years.  He has also served as
the President of the New York City Board of Education,
ambassador to the United Nations, Commissioner of the Port
Authority of New York and New Jersey, Commissioner of the New
York State Division of Human Rights, and was elected to three
terms as New York State Senator.

Mr. McCall is the recipient of numerous awards, including the
1997 Nelson A. Rockefeller Award for Distinguished Public
Service.  He received a bachelor's degree from Dartmouth College
and a master's of divinity from Andover-Newton Theological
School in Andover, Massachusetts.  Mr. McCall is an ordained
minister of the United Church of Christ. He is a member of the
New York Stock Exchange Board of Directors, where he serves as
Chairman of the Board's Audit and Finance Committee.  He also
co-Chaired the Board's Committee on Corporate Accountability.
    
Tyco International Ltd., is a diversified manufacturing and
service company.  Tyco is the world's largest manufacturer and
servicer of electrical and electronic components; the world's
largest designer, manufacturer, installer and servicer of
undersea telecommunications systems; the world's largest
manufacturer, installer and provider of fire protection systems
and electronic security services and the world's largest
manufacturer of specialty valves.  Tyco also holds strong
leadership positions in medical device products, and plastics
and adhesives.  Tyco operates in more than 100 countries and had
fiscal 2002 revenues from continuing operations of approximately
$36 billion.

Tyco International Ltd.'s December 31, 2002 balance sheet shows
a working capital deficit of about $3 billion.


UNITED AIRLINES: Retains Paul Hastings for Labor Advice
-------------------------------------------------------
United Airlines Inc. and its debtor-affiliates sought and
obtained Court authority to employ and retain the law firm of
Paul, Hastings, Janofsky & Walker LLP, as special labor counsel
and special litigation counsel in these Chapter 11 cases.

The Debtors is retaining Paul Hastings to handle the Special
Counsel Matters because of:

    (a) Paul Hastings' extensive experience and expertise with
        labor law issues in the airline industry, especially
        with the Railway Labor Act;

    (b) Paul Hastings' extensive experience and expertise on
        labor law issues in airline bankruptcy proceedings;

    (c) Paul Hastings' extensive experience and expertise in
        general litigation matters and court proceedings; and

    (d) the general knowledge and information that Paul Hastings
        obtained regarding the Debtors and their businesses and
        operations as a result of Paul Hastings' prepetition
        services to the Debtors.

Paul Hastings will provide services as requested by the Debtors
on issues that may arise during the Chapter 11 cases
related to:

    1) all aspects of labor relations, including issues related
       to the International Association of Machinists,
       collective bargaining issues, and issues arising under
       the Railway Labor Act and under Sections 1113 and 1114 of
       the Bankruptcy Code; and

    2) litigation related to such issues.

Regarding compensation, Paul Hastings will:

    a) charge for its legal services on an hourly basis in
       accordance with its ordinary and customary hourly rates
       in effect on the date services are rendered; and

    b) seek reimbursement of actual and necessary out
       of pocket expenses.

Paul Hastings' rates may change from time to time.  Paul
Hastings will maintain detailed, contemporaneous records of time
and any actual and necessary expenses incurred in connection
with legal services and the nature of services.  The Lead
Attorneys who will work on United-related matters are:

            Name                    Hourly Rate
            -----                   -----------
            John J. Gallagher          $475
            Robert S. Span             $490
            Dianne C. Coombs           $360
            Jami L. Copeland           $335
            Scott M. Flicker           $415
            Jon A. Geier               $425
            John S. Gibson             $450
            Douglas C. Griffith        $365
            Neal D. Mollen             $400
            J. Mark Poerio             $495
            John R. Sabatini           $315
            Margaret H. Spurlin        $405
            Alan K. Steinbrecher       $490
            Katherine A. Traxler       $485
            David M. Walsh             $465
            C. Scott Williams          $285
            Ken M. Willner             $415
(United Airlines Bankruptcy News, Issue No. 6; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


US AIRWAYS: Willard Seeks Stay Relief to Initiate Litigation
------------------------------------------------------------
Willard and Willard, Inc./Parker Associates, a joint venture,
seeks relief from the automatic stay to name US Airways Inc., as
a party defendant in a prospective litigation.

On October 26, 1999, Willard entered into two contracts with US
Airways, agreeing to provide electrical construction work at the
Philadelphia International Airport.  Willard/Parker also entered
into a contract with US Airways agreeing to provide
HVAC/mechanical construction work at Terminal One.

The Willard Parties relied on provisions of the Development
Lease, which required payment to contractors that performed work
at the Airport.  The Willard Parties executed waivers of
mechanics' and materialmen's liens prior to starting their work.

As of the Petition Date, US Airways owes the Willard Parties
$14,273,506, plus interest, penalties, attorneys' fees and
expenses.  As a result, the Willard Parties are prepared to file
a complaint to initiate a civil action against the City of
Philadelphia and PAID.  The Complaint will allege unjust
enrichment and other theories to obtain recovery for work
performed.

It is anticipated that the Action will trigger a request by PAID
directed to US Airways for payment of additional rent under the
provisions of the Development Lease.  The additional rent will
likely be equal to amounts asserted by Willard against PAID and
the City.

Robert King, Esq., at Reed & Smith, at Pittsburgh, Pennsylvania,
argues that cause exists to lift the automatic stay to permit
the Willard Parties to prosecute the Civil Action by naming US
Airways as a defendant.  It is clear from the terms of the
Development Lease that US Airways will be affected by the
initiation and outcome of the Prospective Civil Action.  A
judicial determination of amounts due to the Willard Parties
will be a critical component of any cure required in connection
with US Airways' assumption of the Development Lease.

Additionally, Mr. King says, allowing USAI to be joined in the
Prospective Civil Action will promote judicial economy and
permit complete relief to be effectively allocated in one
proceeding (US Airways Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


US AIRWAYS: Files for Distress Termination of Pilot Benefit Plan
----------------------------------------------------------------
US Airways has filed formal notice with the Pension Benefit
Guaranty Corporation of its intent to terminate the existing
defined benefit pension plan for its pilots effective March 31,
2003, and to replace that plan with a defined contribution plan
that will commit the company to invest $850 million in pilot
pension contributions for more than 3,700 pilots over the next
seven years, consistent with an agreement made with the Air Line
Pilots Association in December 2002. Separately, a similar
motion will be filed with the U.S. Bankruptcy Court.

The intent to terminate was the only remaining option for the
company after regulatory and legislative efforts to allow for a
stretch-out of funding obligations for the plan through a
restoration funding proposal were denied, on legal grounds by
the PBGC and defeated by the U.S. Senate. This action initiates
a 60-day process, by which if approved by the Bankruptcy Court
and the PBGC, should result in termination of the current
defined benefit plan in conjunction with US Airways' planned
emergence from Chapter 11 on March 31, 2003, if no legislative
relief is granted by that date.

"We are communicating directly with our pilots on the reasons
for this action, as well as to underscore our commitment to fund
a replacement defined contribution plan under the guidelines of
an agreement that was made with ALPA in December, should a plan
termination be required," said David Siegel, US Airways
president and chief executive officer. "Under that agreement
with ALPA, the company will contribute $850 million over the
next seven years to a new defined contribution plan. While our
preference was to find a way to prevent plan termination of the
existing defined benefit plan -- and we will continue to seek a
legislative solution should Congress address pension funding
issues this year -- we believe we have constructed a replacement
defined contribution plan that provides our pilots with a
competitive pension that targets the equivalent of a $1 million
pension package for a captain retiring after 30 years of
service."

"I have tremendous admiration and appreciation for the
leadership the pilots have shown in leading all employee groups
with pay and productivity concessions, which is why we have
worked so hard to find a solution. We are committing an amount
equal to an average of 27 percent of total pilot wages to be
contributed to new pension accounts that will be at a targeted
contribution level for each pilot, based on age and seniority,"
said Siegel.

Siegel said that the PBGC has indicated that it will not oppose
the proposed follow-on pension plan. The funding levels for the
new pension plan are consistent with the company's plan of
reorganization. Separately, the company is awaiting the final
approval from the Air Transportation Stabilization Board (ATSB)
on its application for a $900 million federal guarantee of a $1
billion loan. The proceeds from the loan, as well as a $240
million investment from the Retirement Systems of Alabama (RSA),
would provide the airline with new capital, available upon
emergence from Chapter 11.

The PBGC regulates pension plan terminations. The company said
that during its discussion with the PBGC on a proposed
replacement plan, it was made clear that a replacement plan must
be a defined contribution plan and cannot replicate current
defined benefit plan benefits. The company expressed
appreciation to the PBGC for its expeditious review of its
proposed replacement plan, and its flexibility in allowing a
plan that takes into account the unique factors of the pilot
work force, including federal regulations that require
commercial airline pilots to retire at age 60.

The company has made adequate contributions to the plan, but the
value of the assets has declined with the prolonged bear market
and the lowest interest rates in 40 years. Those factors led to
future funding obligations the company could not meet under the
emergence business plan contained in its Disclosure Statement
that is being mailed to creditors on Jan. 31, 2003, in
connection with the plan solicitation procedures also approved
by the Bankruptcy Court on Jan. 17, 2003.

The company's motion for termination is scheduled to be heard
before Judge Stephen S. Mitchell at an omnibus hearing on Feb.
20, 2003. Objections to the motion must be filed and served no
later than Feb. 13, 2003.

"In the coming weeks, we will be making more information
available to current pilots and retirees about the proposed
termination," said Siegel. "On an individual level, we will be
able to give each active pilot an estimate of what their defined
benefit from the existing plan will be as administered by the
PBGC, as well as what the target contribution will be for the
new plan. We completely understand how important this matter is
to pilots and their families, which is why we want to quickly
make detailed information available."

On Jan. 17, 2003, US Airways was given authorization by the U.S.
Bankruptcy Court of the Eastern District of Virginia in
Alexandria to solicit approval from its creditors on its plan of
reorganization that provides for the airline's emergence from
Chapter 11 protection in March 2003. On Jan. 31, 2003, the
company will mail notice of the hearing on the final approval of
its plan of reorganization scheduled for March 18, 2003, to more
than 144,000 interested parties. The mailing will initiate a 38-
day process in which qualified claim holders will be allowed to
vote on the company's plan. The disclosure statement and plan of
reorganization assume a solution to the pension-funding
obligation.

Bankruptcy law does not permit solicitation of acceptances of
the Plan until the Bankruptcy Court approves the applicable
Disclosure Statement relating to the Plan as providing adequate
information of a kind, and in sufficient detail, as far as is
reasonably practicable in light of the nature and history of the
debtor and the condition of the debtor's books and records, that
would enable a hypothetical reasonable investor typical of the
holder of claims or interests of the relevant class to make an
informed judgment about the Plan. On Jan. 17, 2003, the
Bankruptcy Court approved the company's Disclosure Statement
with respect to its First Amended Plan of Reorganization and
authorized a balloting and solicitation process that will
commence on Jan. 31, 2003, and conclude on March 10, 2003. A
hearing on confirmation of the First Amended Plan of
Reorganization is scheduled to commence in the Bankruptcy Court
on March 18, 2003. Accordingly, this announcement is not
intended to be, nor should it be construed as, a solicitation
for a vote on the Plan, which can only occur based on the
official disclosure statement package that is being mailed on
Jan. 31, 2003. The company will emerge from Chapter 11 if and
when the Plan receives the requisite creditor approvals and is
confirmed by the Bankruptcy Court.


UNIVANCE TELECOMMS: Case Summary & Largest Unsecured Creditors
--------------------------------------------------------------
Lead Debtor: Univance Telecommunications, Inc.
             373 Inverness Dr. S.
             Suite 100
             Englewood, Colorado 80112
             aka CSI Corp
             aka Univance Corp
             aka Univance Merger Sub, Inc.

Bankruptcy Case No.: 03-11156

Debtor affiliate filing separate chapter 11 petition:

     Entity                                     Case No.
     ------                                     --------
     Univance Marketing Group, Inc.             03-11157

Chapter 11 Petition Date: January 23, 2003

Court: District of Colorado (Denver)

Judge: Elizabeth E. Brown

Debtors' Counsel: Douglas W. Jessop, Esq.
                  303 E. 17th Avenue
                  Suite 930
                  Denver, Colorado 80203
                  Tel: 303-860-7700

Total Assets: $1 to $10 Million

Total Debts: $10 to $50 Million

A. Telecommunications Inc.'s 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
WorldCom                    Trade                   $3,724,223
6929 North Lakewood Mall
Drop 5.2-510
Tulsa, OK 74117
Tel: 918-590-6272         

Global Crossing             Trade                   $2,948,124

Konoxa                      Trade                   $1,201,175
PO Box 7247-6987
Philadelphia, PA 19170
Tel: 610-971-9171

Universal Service ADM Co.   Trade                     $624,647
135 S. La Salle Dept. 1259
Chicago, IL 60674-1259

Deloitte & Touche, LLP      Accounting Services       $558,721
Accounting Services
PO Box 60000
San Francisco, CA 94150

Data General                Trade                     $276,914
Clam Hawkins
21886 Network Place        
Chicago, IL 60873

Sprint Corp.                Trade                     $176,664

Textron                     Trade                     $154,958

Davis Graham & Stubbs       Legal Services            $135,800

Smith Communications        Trade                     $118,852

Amembal                     Trade                     $130,339

Lucent Technologies         Trade                     $117,289

Time Warner Telecom         Trade                     $101,070

Oracle Corp.                Trade                      $77,373

Irwin                       Trade                      $59,945   

CIT Group/EF                Trade                      $53,608

Afferion                    Trade                      $51,000

OFC                         Trade                      $56,645

Touch America                                          $50,580

IPS                         Trade                      $48,099

B. Marketing Group's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Cinguilar                   Trade                     $852,713     
Brian Kerr
12525 Cingular Way,
Suite 3210
Alpharetta, GA 30004

AT&T Wireless               Trade                     $790,162
PO Box 34335
Seattle, WA 93124-1335
Tel: 888-949-2717

QDI                         Trade                     $673,601
2424 South 21st Street
Phoenix, AZ 85034
Tel: 602-258-5201

Spherion                    Trade                     $481,592
4259 Collections Center
Drive
Chicago, IL 60893

Brightpoint                 Trade                     $149,773

Avnet Computer Marketing    Trade                     $132,276

Cricket                     Trade                     $130,213

Afferion, Inc.                                         $81,692

IPS                         Trade                      $54,048

Insight                     Trade                      $40,502

CDW Computer Centers, Inc.  Trade                      $27,166  

Snelling Personal           Trade                      $27,642

Davis Graham & Stubbs       Legal Services             $13,231

Megapath Networks           Trade                      $10,585

Comark Corp.                Trade                       $8,806

Ameritech                   Trade                       $4,138   

Create A Check              Trade                       $3,675

Pacific Ball                Trade                       $3,417

Qwest                       Trade                       $8,862

Verizon                     Trade                       $4,323


VENTAS: Debra Cafaro Replaces Bruce Lunsford as Board Chairman
--------------------------------------------------------------
Ventas, Inc. (NYSE:VTR) said that its Board of Directors named
President and CEO Debra A. Cafaro, 45, to the additional
position of Chairman of the Board, effective immediately.

Cafaro replaces W. Bruce Lunsford, 55, who has resigned from the
Board to review his options for the upcoming gubernatorial race
in Kentucky.

"After committing nearly twenty years to building three
companies that have created more than 50,000 jobs, I am ready to
move forward to a new phase of my life, and I am considering a
return to public service," Lunsford said.

"This is an opportune time for me to make this change because I
am confident that the companies I founded are moving in the
right direction and are in good hands. In particular, Ventas has
benefited since 1999 from the unique strength and character of
its President and CEO Debra Cafaro. We successfully managed the
Company through the extreme difficulties that beset the nursing
home sector brought on by changes in Medicare reimbursement.
Ventas has been a top performing company with average annual
total shareholder return of 56.3 percent from January 1, 2000
through December 31, 2002. Because of the record of the Ventas
management team, I am comfortable stepping away from the Company
that has meant so much to me," Lunsford said.

Cafaro joined Ventas as President and CEO in March 1999. She is
a member of the Board of Governors of the National Association
of Real Estate Investment Trusts (NAREIT(R)) and a member of the
Visiting Committee of the University of Chicago Law School.

"Ventas is a strong and vibrant Company, and is well positioned
for the future. I value the Board's confidence in me, and its
support for our business strategy of disciplined growth and
diversification. We will continue to focus on creating long term
value and superior near term total return for our shareholders,"
Cafaro said.

"Bruce Lunsford has been a great resource during my tenure at
Ventas as we have re-shaped the Company into a reliable and top
performing real estate investment trust," Cafaro added.
"Throughout his 30-year career in business and government in
Kentucky, Bruce has believed in people and new ideas; that is
what has made him an outstanding leader. Now he will consider
focusing his energy and vitality to public service."

Consistent with its adherence to sound corporate governance,
Ventas said that independent director Douglas Crocker II has
been appointed to the newly created board position of "presiding
director," who will lead regularly scheduled executive sessions
among independent members of the Board of Directors. Crocker was
appointed to the Ventas Board in September 1998, and currently
chairs the Ventas audit committee and also sits on the Company's
compensation committee. Most recently, Crocker was CEO of Equity
Residential Properties Trust (NYSE:EQR) and is currently vice
chairman of its Board of Trustees. He is a member of the Board
of Trustees of Prime Group Realty Trust (NYSE:PGE) and a
director of Wellsford Real Properties, Inc. (AMEX:WRP). Crocker
chairs and serves on boards or committees of various multi-
family housing associations, including the National Multi-
Housing Council and the Multifamily Council of the Urban Land
Institute. He is also a member of the Board of Governors of
NAREIT(R).

Ventas said Lunsford's resignation is expected to have no impact
on the Company's earnings.

Ventas, Inc., is a healthcare real estate investment trust that
owns 44 hospitals, 220 nursing facilities and nine other
healthcare and senior housing facilities in 37 states. The
Company also has investments in 25 additional healthcare and
senior facilities. More information about Ventas can be found on
its Web site at http://www.ventasreit.com  

At September 30, 2002, Ventas' total shareholders' equity
deficit widened to about $126 million.


WHEREHOUSE: Berger Appointed as Court Noticing and Claims Agent
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave its
stamp of approval to Wherehouse Entertainment Inc., to hire
Robert L. Berger & Associates, LLC as Noticing, Claims and
Balloting Agent.

Berger, as the Claims and Noticing Agent, at the request of the
Debtors or the Clerk's Office, will:

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

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

      (ii) notice of the claims bar date;

     (iii) notice of objections to claims;

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

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

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

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

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

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

      (ii) the date received;

     (iii) the claim number assigned; and

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

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

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

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

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

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

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

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

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

The services renders will be at Berger's normal hourly rates,
which range from:

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

Wherehouse Entertainment, Inc., sells prerecorded music,
videocassettes, DVDs, video games, personal electronics, blank
audio cassettes and videocassettes, and accessories. The Company
filed for chapter 11 protection on January 20, 2003, (Bankr.
Del. Case No. 03-10224). Mark D. Collins, Esq., and Paul Noble
Heath, Esq., at Richards Layton & Finger represent the Debtors
in their restructuring efforts.  When the Company filed for
protection from its creditors, it listed $227,957,000 in total
assets and $222,530,000 in total debts.


WORLDCOM INC: Pulling Plug on Backhaul Agreement with Sprint
------------------------------------------------------------
Worldcom Inc., and its debtor-affiliates sought and obtained
authority to reject the Backhaul Agreement with Sprint
Communications Company L.P. effective as of December 4, 2002.

Lori R. Fife, Esq., at Weil Gotshal & Manges LLP, in New York,
recounts that on July 7, 2000, debtor MCI International, Inc.,
entered into a Backhaul Agreement with Sprint whereby Sprint
agreed to lease eight STM-1s of backhaul capacity to the Debtors
for ten years.  In exchange, the Debtors agreed to pay Sprint a
$33,287 monthly charge per STM-1 of Sprint Backhaul, plus all
applicable taxes.  Based on the lease of eight STM-1s, the
monthly charge is $266,296 in the aggregate and the annual
charge is $3,195,552.

At the time the Agreement was executed, the Debtors did not own
or have access to sufficient backhaul capacity with respect to
the United States-China Network.  Since that time, over the
course of the past year, the Debtors have completed construction
of their own backhaul for the United States-China network.  The
Debtors' backhaul capacity is sufficient to carry its current
traffic and has ample excess capacity to satisfy any future
requirements.  After completion, the Debtors began to transfer
traffic from the Sprint Backhaul to its own backhaul.  The
transition process was completed on September 10, 2002 and since
that date, the Debtors have not used any of the Sprint Backhaul
capacity under the Agreement. Consequently, the Debtors no
longer need nor utilize the Sprint Backhaul and they have
decided to reject the Agreement. (Worldcom Bankruptcy News,
Issue No. 18; Bankruptcy Creditors' Service, Inc., 609/392-0900)  

DebtTraders reports that Worldcom Inc.'s 7.375% bonds due 2006
(WCOE06USA1) are trading at 21 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCOE06USA1
for real-time bond pricing.  


WORLDCOM: SBC Reports Customer Complaints Against MCI
-----------------------------------------------------
SBC California submitted a memo to the California Public
Utilities Commission and California Attorney General requesting
independent investigations of MCI-WorldCom Communications' sales
and marketing practices in the state and enforcement of those
agencies' March 2002 Final Order and Permanent Injunction in
which MCI agreed to pay the state $8.5 million and cease the
practices that led to the action.

SBC's submission was prompted by receiving numerous slamming and
deceptive sales practice complaints against MCI from SBC's
residential customers throughout California since the filing of
MCI's bankruptcy cases. Slamming is the illegal practice of
changing a consumer's telephone service without permission.

Among the issues highlighted in the document filed with the CPUC
and the Attorney General's office:

     -- Slamming: 5172 complaints of local access line slams
suggest the misconduct is ongoing, despite MCI's claims it has
changed its management and culture.

     -- Deceptive Sales Practices: SBC logged over 280
complaints about deceptive sales practices by several carriers.
Almost half are directed at MCI.

     -- SBC has collected over 80 declarations directed against
MCI, signed under penalty of perjury, from customers.

In the declarations, customers informed SBC they are being told
that "Pacific Bell is going out of business," or "Pacific Bell
has been merged or bought," so they "need to change carriers" or
face the risk of losing their dial tone. Many consumers said MCI
told them "this was a courtesy call to let them know their
service was being switched to MCI because Pacific Bell was going
out of business." These alleged comments are untrue; SBC Pacific
Bell remains part of the SBC Communications family.

"Customers have expressed distress, anger, and frustration as a
result of MCI's deceptive practices and false representations,"
said Carmen Nava, president-Consumer Markets Group, SBC West.
"MCI was warned by both the CPUC and the California Attorney
General's office, and MCI was fined $8.5 million for similar
practices in California, but still MCI continues to telemarket
consumers with false claims and untrue assertions. The customer
declarations reveal that in many cases, MCI doesn't even bother
to solicit or ask consumers if they are interested in changing
providers. They simply tell people, 'this is a courtesy call to
inform you that your phone service is being changed.' It's
outrageous behavior that is threatening freedom of choice. MCI
has publicly stated it has changed its management and its
corporate culture, but we're still hearing the same types of
complaints we heard before."

SBC does not seek any compensation or damages, but asks the CPUC
and the Attorney General to investigate to better protect
consumers by putting an end to these illegal practices.

SBC California is committed to helping customers avoid slamming
and other unethical business practices, and works directly with
its customers who have fallen victim to such practices to
restore legitimate services.

SBC Communications Inc. -- http://www.sbc.com-- is one of the  
world's leading data, voice and Internet services providers.
Through its world-class networks, SBC companies provide a full
range of voice, data, networking and e-business services, as
well as directory advertising and publishing. A Fortune 30
company, SBC is America's leading provider of high-speed DSL
Internet Access services and one of the nation's leading
Internet Service Providers. SBC companies currently serve 57
million access lines nationwide. In addition, SBC companies own
60 percent of America's second-largest wireless company,
Cingular Wireless, which serves 22 million wireless customers.
Internationally, SBC companies have telecommunications
investments in 27 countries.


XM SATELLITE: Bond Exchange Prompts S&P's Default-Level Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
ratings on satellite radio provider XM Satellite Radio Inc., and
its parent company XM Satellite Radio Holdings Inc. (which are
analyzed on a consolidated basis) to 'SD' from 'CCC-'.

At the same time, Standard & Poor's lowered its rating on the
company's $325 million 14% senior secured notes due 2010 to 'D'
from 'CCC-'.

These actions follow XM's completion of its exchange offer on
the senior secured notes, at par, for new 14% senior secured
notes due 2009.

All ratings were removed from CreditWatch with negative
implications where they were placed on Nov. 18, 2002.

"The rating actions are consistent with our prior statements
regarding the exchange offer, the terms and nature of which we
viewed as tantamount to a default," said Standard & Poor's
credit analyst Steve Wilkinson. "While the principal value and
the promised interest rate of the notes did not change, the new
notes are structured with interest payments deferred for three
years, which is viewed as a significant concession from the
original terms."

After completing the exchange offer, XM raised $225 million in
cash, primarily through the sale of 10% senior secured discount
convertible notes due 2009. It also reached an agreement with
General Motors Corp. for up to $250 million in payment deferrals
and related credit facilities.

The completion of the exchange offer and the new financing
transactions have significantly improved XM's near-term
liquidity and capital structure. Standard & Poor's will meet
with XM's management in the near term to reevaluate the company
and will assign new corporate credit and debt ratings based on
the new capital structure and the company's progress in
executing its business plan.


* BOND PRICING: For the week of February 3 - 7, 2003
----------------------------------------------------

Issuer                                Coupon  Maturity  Price
------                                ------  --------  -----
Adelphia Communications                3.250%  05/01/21     8
Adelphia Communications                6.000%  02/15/06     8
Adelphia Communications               10.875%  10/01/10    45
Advanced Micro Devices Inc.            4.750%  02/01/22    60
AES Corporation                        4.500%  08/15/05    55
AES Corporation                        8.000%  12/31/08    62
AES Corporation                        8.750%  06/15/08    65
AES Corporation                        8.875%  02/15/11    62
AES Corporation                        9.375%  09/15/10    67
AES Corporation                        9.500%  06/01/09    68
Akamai Technologies                    5.500%  07/01/07    44
Alaska Communications                  9.375%  05/15/09    72
Alexion Pharmaceuticals                5.750%  03/15/07    68
Allegheny Generating Company           6.875%  09/01/23    73
Alkermes Inc.                          3.750%  02/15/07    64
Alpharma Inc.                          3.000%  06/01/06    74
Amazon.com Inc.                        4.750%  02/01/09    73
American Tower Corp.                   5.000%  02/15/10    70
American & Foreign Power               5.000%  03/01/30    61
Amkor Technology Inc.                  5.000%  03/15/07    57
AMR Corp.                              9.000%  09/15/16    30
AMR Corp.                              9.750%  08/15/21    30
AMR Corp.                              9.800%  10/01/21    30
AMR Corp.                             10.000%  04/15/21    30
AMR Corp.                             10.200%  03/15/20    31
AnnTaylor Stores                       0.550%  06/18/19    61
Aquila Inc.                            6.625%  07/01/11    75
Argo-Tech Corp.                        8.625%  10/01/07    70
Applied Extrusion                     10.750%  07/01/11    65
Aquila Inc.                            6.625%  07/01/11    75
Aspen Technology                       5.250%  06/15/05    67
BE Aerospace Inc.                      8.875%  05/01/11    72
Best Buy Co. Inc.                      0.684%  06?27/21    69
Borden Inc.                            7.875%  02/15/23    56
Borden Inc.                            8.375%  04/15/16    63
Borden Inc.                            9.200%  03/15/21    64
Borden Inc.                            9.250%  06/15/19    57
Boston Celtics                         6.000%  06/30/38    65
Brocade Communication Systems          2.000%  01/01/07    74
Brooks-PRI Automation Inc.             4.750%  06/01/08    74
Building Materials Corp.               8.000%  10/15/07    75
Burlington Northern                    3.200%  01/01/45    53
Burlington Northern                    3.800%  01/01/20    73
Calair LLC/Capital                     8.125%  04/01/08    59
Calpine Corp.                          4.000%  12/26/06    53
Calpine Corp.                          7.625%  04/15/06    52
Calpine Corp.                          8.500%  02/15/11    45
Calpine Corp.                          8.625%  08/15/10    45
Case Corp.                             7.250%  01/15/16    73
CD Radio Inc.                         14.500%  05/15/09    42
Cell Therapeutic                       5.750%  06/15/08    58
Centennial Cellular                   10.750%  12/15/08    53
Champion Enterprises                   7.625%  05/15/09    41
Charter Communications, Inc.           4.750%  06/01/06    20
Charter Communications, Inc.           5.750%  10/15/05    23
Charter Communications Holdings        8.625%  04/01/09    49
Charter Communications Holdings        9.625%  11/15/09    46
Charter Communications Holdings       10.250%  01/15/10    46  
Charter Communications Holdings       11.125%  01/15/11    46
Ciena Corporation                      3.750%  02/01/08    72
Cincinnati Bell Telephone (Broadwing)  6.300%  12/01/28    68
Cincinnati Bell Inc. (Broadwing)       7.250%  06/15/23    70
CNET Inc.                              5.000%  03/01/06    65
Comcast Corp.                          2.000%  10/15/29    23
Comforce Operating                    12.000%  12/01/07    57
Commscope Inc.                         4.000%  12/15/06    74
Conexant Systems                       4.000%  02/01/07    49
Conseco Inc.                           8.750%  02/09/04    17
Continental Airlines                   4.500%  02/01/07    43
Continental Airlines                   8.000%  12/15/05    53
Corning Inc.                           6.750%  09/15/13    74
Corning Inc.                           6.850%  03/01/29    62
Corning Glass                          8.875%  03/15/16    75
Cox Communications Inc.                0.348%  02/23/21    72
Cox Communications Inc.                0.426%  04/19/20    46
Cox Communications Inc.                2.000%  11/15/29    30
Cox Communications Inc.                3.000%  03/14/30    40
Crown Cork & Seal                      7.375%  12/15/26    70
Cubist Pharmacy                        5.500%  11/01/08    48
Cummins Engine                         5.650%  03/01/98    64
CV Therapeutics                        4.750%  03/07/07    74
Dana Corp.                             7.000%  03/15/28    73
Dana Corp.                             7.000%  03/01/29    73
DDI Corp.                              6.250%  04/01/07    16
Delco Remy International              10.625%  08/01/06    55
Delta Air Lines                        7.900%  12/15/09    71
Delta Air Lines                        8.300%  12/15/29    55
Delta Air Lines                        9.000%  05/15/16    65
Delta Air Lines                        9.250%  03/15/22    62
Delta Air Lines                        9.750%  05/15/21    66
Delta Air Lines                       10.375%  12/15/22    69
Dynegy Holdings Inc.                   6.875%  04/01/11    46
EOTT Energy Partner                   11.000%  10/01/09    67
Echostar Communications                4.875%  01/01/07    74
Echostar Communications                5.750%  05/15/08    73
Edison Mission                         9.875%  04/15/11    29
Edison Mission                        10.000%  08/15/08    36
El Paso Corp.                          7.000%  05/15/11    68
El Paso Corp.                          7.750%  01/15/32    59
El Paso Energy                         6.750%  05/15/09    73
El Paso Energy                         8.050%  10/15/30    64
El Paso Natural Gas                    7.500%  11/15/26    57
El Paso Natural Gas                    8.625%  01/15/22    66
Emulex Corp.                           1.750%  02/01/07    72
Energy Corporation America             9.500%  05/15/07    62
Enron Corp.                            9.875%  06/15/03    16
Enzon Inc.                             4.500%  07/01/08    74
Equistar Chemicals                     7.550%  02/15/26    71
E*Trade Group                          6.000%  02/01/07    74
Finisar Corp.                          5.250%  10/15/08    49
Finova Group                           7.500%  11/15/09    36
Fleming Companies Inc.                 9.250%  06/15/10    70
Fleming Companies Inc.                10.125%  04/01/08    71
Fleming Companies Inc.                10.625%  07/31/07    52
Foamex LP/Capital                     10.750%  04/01/09    72
Ford Motor Co.                         6.625%  02/15/28    74
Fort James Corp.                       7.750%  11/15/23    74
General Physics                        6.000%  06/30/04    51
Geo Specialty                         10.125%  08/01/08    71
Georgia-Pacific                        7.375%  12/01/25    74
Goodyear Tire & Rubber                 7.000%  03/15/28    53
Goodyear Tire & Rubber                 7.875%  08/15/11    74
Great Atlantic                         9.125%  12/15/11    66
Great Atlantic & Pacific               7.750%  04/15/07    70
Gulf Mobile Ohio                       5.000%  12/01/56    63
Health Management Associates Inc.      0.250%  08/16/20    67
Human Genome                           3.750%  03/15/07    66
Human Genome                           5.000%  02/01/07    70
I2 Technologies                        5.250%  12/15/06    63
Ikon Office                            6.750%  12/01/25    65
Ikon Office                            7.300%  11/01/27    70
Imcera Group                           7.000%  12/15/13    75
Imclone Systems                        5.500%  03/01/05    69
Inhale Therapeutic Systems Inc.        3.500%  10/17/07    56
Inland Steel Co.                       7.900%  01/15/07    73
Internet Capital                       5.500%  12/21/04    37
Isis Pharmaceutical                    5.500%  05/01/09    69
Juniper Networks                       4.750%  03/15/07    73
Kmart Corporation                      9.375%  02/01/06    14
Kulicke & Soffa Industries Inc.        4.750%  12/15/06    64
LTX Corporation                        4.250%  08/15/06    65
Lehman Brothers Holding                8.000%  11/13/03    65
Level 3 Communications                 6.000%  09/15/09    45
Level 3 Communications                 6.000%  03/15/10    41
Level 3 Communications                 9.125%  05/01/08    66
Level 3 Communications                11.000%  03/15/08    66
Liberty Media                          3.500%  01/15/31    65
Liberty Media                          3.750%  02/15/30    52
Liberty Media                          4.000%  11/15/29    55
LTX Corp.                              4.250%  08/15/06    68
Lucent Technologies                    5.500%  11/15/08    66
Lucent Technologies                    6.450%  03/15/29    54
Lucent Technologies                    6.500%  01/15/28    54
Lucent Technologies                    7.250%  07/15/06    74
Magellan Health                        9.000%  02/15/08    24
Mail-Well I Corp.                      8.750%  12/15/08    69
Mapco Inc.                             7.700%  03/01/27    69
Medarex Inc.                           4.500%  07/01/06    62
Metris Companies                      10.125%  07/15/06    39
Mikohn Gaming                         11.875%  08/15/08    74
Mirant Corp.                           5.750%  07/15/07    45
Mirant Americas                        7.200%  10/01/08    49
Mirant Americas                        7.625%  05/01/06    65
Mirant Americas                        8.300%  05/01/11    43
Mirant Americas                        8.500%  10/01/21    35
Missouri Pacific Railroad              4.750%  01/01/20    74
Missouri Pacific Railroad              4.750%  01/01/30    70
Missouri Pacific Railroad              5.000%  01/01/45    61
Motorola Inc.                          5.220%  10/01/21    63
MSX International Inc.                11.375%  01/15/08    67
NTL Communications Corp.               7.000%  12/15/08    19
National Steel                         9.875%  03/01/09    56
National Vision                       12.000%  03/30/09    50
Natural Microsystems                   5.000%  10/15/05    62
Nextel Communications                  5.250%  01/15/10    72
Nextel Partners                       11.000%  03/15/10    67
NGC Corp.                              7.625%  10/15/26    56
Noram Energy                           6.000%  03/15/12    73
Northern Pacific Railway               3.000%  01/01/47    52
Northern Telephone Capital             7.875%  06/15/26    61
Northwest Airlines                     8.130%  02/01/14    62
NorthWestern Corporation               6.950%  11/15/28    73
Oak Industries                         4.875%  03/01/08    63
OM Group Inc.                          9.250%  12/15/11    67
ON Semiconductor                      12.000%  05/15/08    73
ONI Systems Corporation                5.000%  10/15/05    74
OSI Pharmaceuticals                    4.000%  02/01/09    68
Owens-Illinois Inc.                    7.800%  05/15/18    68
Pegasus Communications                 9.750%  12/01/06    57
PG&E Gas Transmission                  7.800%  06/01/25    61
Providian Financial                    3.250%  08/15/05    74
PSEG Energy Holdings                   8.500%  06/15/11    75
Quanta Services                        4.000%  07/01/07    64
Qwest Capital Funding                  7.000%  08/03/09    75
Qwest Capital Funding                  7.250%  02/15/11    74
RF Micro Devices                       3.750%  08/15/05    74
RF Micro Devices                       3.750%  08/15/05    74
Redback Networks                       5.000%  04/01/07    26
Revlon Consumer Products               8.625%  02/01/08    46
Rural Cellular                         9.750%  01/15/10    61
Ryder System Inc.                      5.000%  02/25/21    71
SBA Communications                    10.250%  02/01/09    62
SC International Services              9.250%  09/01/07    66
Schuff Steel Co.                      10.500%  06/01/08    74
SCI Systems Inc.                       3.000%  03/15/07    74
Sepracor Inc.                          5.000%  02/15/07    69
Sepracor Inc.                          5.750%  11/15/06    72
Silicon Graphics                       5.250%  09/01/04    54
Sotheby's Holdings                     6.875%  02/01/09    74
TCI Communications Inc.                7.125%  02/15/28    74
TECO Energy Inc.                       7.000%  05/01/12    73
Tenneco Inc.                          11.625%  10/15/09    73
Teradyne Inc.                          3.750%  10/15/06    72
Tesoro Petroleum Corp.                 9.000%  07/01/08    66
Tesoro Petroleum Corp.                 9.625%  11/01/08    65
Time Warner Telecom                    9.750%  07/15/08    59
Time Warner                           10.125%  02/01/11    59
Transwitch Corp.                       4.500%  09/12/05    59
Tribune Company                        2.000%  05/15/29    72
US Airways Passenger                   6.820%  01/30/14    73
Universal Health Services              0.426%  06/23/20    64
US Timberlands                         9.625%  11/15/07    61
Vector Group Ltd.                      6.250%  07/15/08    67
Veeco Instrument                       4.125%  12/21/08    72
Vertex Pharmaceuticals                 5.000%  09/19/07    75
Viropharma Inc.                        6.000%  03/01/07    46
Weirton Steel                         10.750%  06/01/05    70
Western Resources Inc.                 6.800%  07/15/18    75
Westpoint Stevens                      7.875%  06/15/08    31
Williams Companies                     7.625%  07/15/19    74
Williams Companies                     7.750%  06/15/31    69
Williams Companies                     7.875%  09/01/21    73
Williams Companies                     8.875%  09/15/12    68
Williams Companies                     9.375%  11/15/21    60
Williams Companies                    10.250%  07/15/20    66
Williams Holdings Delaware             6.500%  12/01/08    69
Witco Corp.                            6.875%  02/01/26    70
Worldcom Inc.                          7.375%  01/15/49    23
Xerox Corp.                            0.570%  04/21/18    64

                          *********

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

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

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

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

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

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

                          *********

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

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

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

This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without
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mail. Additional e-mail subscriptions for members of the same
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are $25 each.  For subscription information, contact Christopher
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                *** End of Transmission ***