TCR_Public/030204.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Tuesday, February 4, 2003, Vol. 7, No. 24

                          Headlines

ACCLAIM ENTERTAINMENT: Falls Short of Nasdaq's Listing Standard
AES: Unit Fails to Make $85MM Payment to Brazil National Bank
ALLEGHENY ENERGY: Subs Obtain Extensions of Waivers From Lenders
AMERICAN CLASSIC: Court Extends Solicitation Period Until Feb 25
ASIA GLOBAL CROSSING: Retains PwC for Accounting & Tax Advice

AT&T CORP: Fitch Affirms BBB Rating & Revises Outlook to Neg.
AVCOM: Ceases Operations in Order to Maximize Shareholder Value
BETHLEHEM STEEL: Obtains July 31, 2003 Exclusivity Extension
BOOTS & COOTS: Receives Notice of Loan Default from Checkpoint
BROBECK PHLEGER: Default on $90 Million Citibank Loan Reported

CEDAR BRAKES I & II: Fitch Drops Sr. Secured Bond Rating to BB+
CWMBS: Fitch Takes Various Rating Actions on Series 2003-2 Notes
CONSECO: Court Allows CFC Debtors to Pay Credit Card Merchants
CONSECO FINANCE: 18 Units File Chapter 11 Petitions in Illinois
CONSECO FINANCE: Conseco Agency Case Summary & Largest Creditors

DOW CORNING: Reports Improved Profitability for 4th Quarter 2002
DYNEGY: Restatements May Trigger Financial Covenant Breaches
ENRON: Zipa.com Buys New Orleans Datacenter from Enron Broadband
ESSENTIAL THERAPEUTICS: Receives Delisting Notice from Nasdaq
FEDERAL-MOGUL: Court Approves Dovebid's Retention as Auctioneer

FLOWERS FOODS: S&P Revises Outlook on BBB- Corp Rating to Stable
FMAC EQUIPMENT: Fitch Downgrades Class C Notes to B- from BB
FRIEDE-GOLDMAN: Finalizes $61MM Offshore Asset Sale to ACON
FRISBY TECH: Terminates Duncan Russell's Employment as Pres./CEO
GENUITY INC: Settles Claims Dispute with Deutsche Bank

GLOBAL CROSSING: Wants Court to Approve Alcatel Settlement Deal
GMAC COMM'L: S&P Cuts Ratings on 5 Classes to Junk/Low-B Levels
GOLF TRUST: Closes $40M Sale of Golf Club to Eagle Ridge Resort
HAYES LEMMERZ: Seeks to Pay Exit Financing Facility Expenses
INTEGRATED HEALTH: Asks Court to Okay Employee Severance Program

ITALY FUND: Plan of Liquidation Effective on February 13, 2003
KEY3MEDIA: Commences Pre-Negotiated Chapter 11 Case in Delaware
KEY3MEDIA GROUP: Case Summary & Largest Unsecured Creditors
KMART: Abacus Advisors Group Hired as Store Closing Agent
LAIDLAW: November 2002 Balance Sheet Upside Down by $1 Billion

LENNAR CORP: S&P Ups Subordinated Debt Rating to BB+ from BB-
LENNAR CORP: Closes $350M 5.95% 10-Year Senior Debt Offering
LERNOUT & HAUSPIE: Hiring Smith Katzenstein as Conflicts Counsel
LTV CORP: Implements Reorganization Employee Severance Program
MERRILL LYNCH: Fitch Takes Ratings Actions on Ser. 2003-A1 Notes

MEMC ELECTRONIC: Annual Shareholders Meeting Set for April 25
METALS USA: Settles $5.8 Million Claim Dispute with Nat'l Steel
METAWAVE COMMS: Files for Chapter 11 Protection in Washington
METROLOGIC: Restructured Bank Debt Provides Lower Interest Costs
MOBILE KNOWLEDGE: Richter & Partners Appointed Interim Receiver

OAKWOOD HOMES: Closes Up to $140 Million Revolving Credit Line
OWENS CORNING: Asks Court to Approve Tacoma & Morris Pact
PACIFIC GAS: Hiring ZIA Info & ERS Group for Litigation Support
PHAR-MOR: Court Schedules Plan Confirmation Hearing on March 11
PROBEX CORP: Eyes Bankruptcy Filing if Debt Restructuring Fails

REGUS BUSINESS: Seeks Nod to Pay Critical Vendors' Claims
REPTRON ELECTRONICS: Misses Payment on 6-3/4% Convertible Bonds
RHYTHMS NETCONNECTIONS: S.D.N.Y. Court Confirms Liquidating Plan
RICA FOODS: Deloitte & Touche Resigns as Auditors
SHELBOURNE PROPERTIES: Sells Hilliard, Ohio Property for $4.6MM

SHIMODA RESOURCES: Net Losses Raise Going Concern Doubts
SLATER STEEL: Secures Waiver of Debt Defaults Up to March 2003
SOLUTIA: Reports $21 Million Consolidated 4th Quarter Net Loss
SOLUTIA: Closes Sale of Resins, Additives & Adhesives Businesses
SUN WORLD: S&P Downgrades Rating to D In Wake of Bankruptcy

SYSTECH: Seeks to Extend Schedule Filing Deadline to Feb. 27
TRENWICK GROUP: S&P Further Junks Ratings with Negative Outlook
TYCO INTERNATIONAL: Obtains $1.5 Billion Bank Credit Facility
UNITED AIR: Court Okays Poorman Douglas' Employment as Agent
UAL CORPORATION: Posts $3.2 Billion Loss for Year 2002

US AIR: Delivers First Amended Joint Plan & Disclosure Statement
US AIR: Restructures Aircraft Purchase Agreements with Airbus
VIASYSTEMS: Completes Recapitalization & Emerges from Bankruptcy
WARNACO GROUP: Walking Away from TRI Development Lease
WORLDCOM INC: Rejects America West FlightFund Deal

WORLD HEART: Completes CDN$10MM Financing with Argosy Bridge

* EPIQ Acquires Bankruptcy Services & Enters Chapter 11 Market

* Large Companies with Insolvent Balance Sheets

                          *********

ACCLAIM ENTERTAINMENT: Falls Short of Nasdaq's Listing Standard
---------------------------------------------------------------
Acclaim Entertainment, Inc. (NASDAQ.SC: AKLM), received a letter
from The Nasdaq Stock Market, Inc., stating that, because the
Company's common stock had not closed at or above the minimum
$1.00 per share bid price requirement for 30 consecutive trading
days, it had not met the minimum bid price requirements for
continued listing as set forth in Marketplace Rule 4310(4), and
the Company has until July 23, 2003 in which to regain
compliance. If at any time prior to July 23, 2003 the closing
bid price of the Company's common stock is $1.00 or more for a
minimum of 10 consecutive trading days, the Company will then
again be in compliance with such rule. The letter also states
that if compliance cannot be demonstrated by July 23, 2003,
Nasdaq will determine whether the Company meets the initial
listing standards for The Nasdaq SmallCap Market, and if the
Company meets that criteria it will be granted an additional 180
day grace period in which to demonstrate compliance.

If, after July 23, 2003 compliance cannot be demonstrated and
the Company does not meet the initial listing standards then the
Company's securities would be subject to delisting. At that
time, the Company may appeal such determination. There can be no
assurances that such an appeal would be successful.

                  About Acclaim Entertainment

Based in Glen Cove, New York, Acclaim Entertainment, Inc., is a
leading worldwide developer, publisher and mass marketer of
software for use with interactive entertainment game consoles
including those manufactured by Nintendo, Sony Computer
Entertainment and Microsoft Corporation as well as personal
computer hardware systems. Acclaim owns and operates five
studios located in the United States and the United Kingdom,
which includes a motion capture and recording studio in the
U.S., and publishes and distributes its software through its
subsidiaries in North America, the United Kingdom, Germany,
France and Spain. The Company uses regional distributors
worldwide. Acclaim also distributes entertainment software for
other publishers worldwide, publishes software gaming strategy
guides and issues "special edition" comic magazines
periodically. Acclaim's corporate headquarters are in Glen Cove,
New York and Acclaim's common stock is publicly traded on
NASDAQ.SC under the symbol AKLM. For more information please
visit our Web site at http://www.acclaim.com

As of December 1, 2002, the company's working capital deficit
tops $18.5 million.


AES: Unit Fails to Make $85MM Payment to Brazil National Bank
-------------------------------------------------------------
The AES Corporation's (NYSE:AES) subsidiary AES ELPA S.A. has
failed to make a payment of approximately $85 million due to the
Brazil National Bank for Economic and Social Development under a
financing agreement for the acquisition by AES ELPA of common
shares of Eletropaulo Metropolitana Eletricidade de Sao Paulo
S.A., the electric distribution company serving the City of Sao
Paulo, Brazil.

The approximately $542 million of outstanding debt under this
financing agreement is secured by the common shares of
Eletropaulo owned by the subsidiary and by certain other AES
businesses in Brazil.  Under this financing agreement, BNDES has
the right to call due such outstanding debt as a result of the
failure to pay the amount due.

AES stated that it is in discussions with BNDES to seek to
restructure this debt. As a result of a cross default provision,
BNDES also now has the right to call due approximately $231
million loaned to Eletropaulo under the program in Brazil
established to alleviate the effects of rationing on electricity
companies.

Due to existing financial covenant and other defaults under
Eletropaulo loan agreements, Eletropaulo's lenders have had the
right to call due approximately $608 million of indebtedness.
The right of BNDES to accelerate amounts under the rationing
loan permits other Eletropaulo lenders to accelerate additional
loans aggregating approximately $228 million.

Earlier this week, BNDES and other former holders of Eletropaulo
preferred shares accepted the offer of another AES subsidiary,
AES TRANSGAS EMPREENDIMENTOS LTDA. (AES TRANSGAS), to defer
until February 28, 2003 approximately $336 million due by the
subsidiary in connection with the purchase of Eletropaulo
preferred shares.

The failure of AES ELPA to pay the amount due to BNDES will not
constitute an event of default under AES's parent company
indebtedness. In addition, neither AES ELPA nor AES TRANSGAS is
a material subsidiary for purposes of bankruptcy related events
of default contained in AES's parent company indebtedness.
However, Eletropaulo is a material subsidiary for such purposes.

Given that a bankruptcy proceeding would generally be an
unattractive remedy for Eletropaulo's lenders as it would result
in a termination of Eletropaulo's concession and that
Eletropaulo is in negotiations with its lenders to restructure
its defaulted indebtedness, AES believes such an outcome is
unlikely.  However, there can be no assurance that such an
outcome will not occur, that such negotiations will be
successful or that AES will not have to write off additional
amounts related to its investment in Eletropaulo.

AES is a leading global power company comprised of contract
generation, competitive supply, large utilities and growth
distribution businesses.

The company's generating assets include interests in 176
facilities totaling over 60 gigawatts of capacity, in 33
countries. AES's electricity distribution network sells 108,000
gigawatt hours per year to over 16 million end-use customers.

For more general information visit http://www.aes.comor contact
investor relations at investing@aes.com.

AES Corp. reported a working capital deficit of about $3 billion
as of September 30, 2002.  AES' Sept. 30 balance sheet shows
that shareholder equity's dwindled to $2.4 billion and total
liabilities top $32 billion.

DebtTraders reports that AES Corporation's 10.250% bonds due
2006 (AES06USR1) are trading at 46 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AES06USR1for
real-time bond pricing.


ALLEGHENY ENERGY: Subs Obtain Extensions of Waivers From Lenders
----------------------------------------------------------------
Allegheny Energy, Inc. (NYSE: AYE) subsidiaries Allegheny Energy
Supply Company, LLC, and Allegheny Generating Company, based on
continuing negotiations, sought and received extensions of
waivers from bank lenders under their credit agreements.

The Company previously disclosed that these subsidiaries had
received waivers through January 31, 2003, from their bank
lenders with regard to certain covenants contained in their
credit agreements.  These waivers have now been extended through
February 7, 2003.

Allegheny Energy and its subsidiaries are continuing discussions
with bank lenders under these and other facilities, as well as
with other lenders and trading counterparties, regarding
outstanding defaults, required amendments to existing
facilities, and additional secured financing. As the Company
noted in previous news releases, if it is unable to successfully
complete negotiations with these lenders, including arrangements
with respect to inter-creditor issues, it would likely be
obliged to seek bankruptcy protection.

With headquarters in Hagerstown, Maryland, Allegheny Energy is
an integrated energy company with a balanced portfolio of
businesses, including Allegheny Energy Supply, which owns and
operates electric generating facilities and supplies energy and
energy-related commodities in selected domestic retail and
wholesale markets; Allegheny Power, which delivers low-cost,
reliable electric and natural gas service to about three million
people in Maryland, Ohio, Pennsylvania, Virginia, and West
Virginia; and a business offering fiber-optic and data services.
More information about the Company is available at
http://www.alleghenyenergy.com

Allegheny Energy Inc.'s 7.750% bonds due 2005 (AYE05USR1),
DebtTraders says, are trading between 72 and 75. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AYE05USR1for
real-time bond pricing.


AMERICAN CLASSIC: Court Extends Solicitation Period Until Feb 25
----------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, American Classic Voyages Co., and its debtor-
affiliates obtained an extension of their exclusive solicitation
period.  The Court gives the Debtors until February 25, 2003 the
exclusive right to solicit acceptances of their proposed chapter
11 plan.

After selling most of its assets for cash, American Classic
prepared a liquidating chapter 11 plan and obtained approval of
a disclosure statement explaining that plan from Judge Venters.
That Plan proposes to pay unsecured creditors on a debtor-by-
debtor basis between 1 and 20 cents-on-the-dollar.  American
Classic Voyages Co.'s debtor-subsidiaries are Great Ocean Cruise
Line, L.L.C., Great AQ Steamboat, L.L.C., Cape May Light,
L.L.C., Cape Cod Light, L.L.C., Great River Cruise Line, L.L.C.,
Delta Queen Coastal Voyages, L.L.C., DQSC Property Co., Cruise
America Travel, Incorporated, AMCV Cruise Operations, Inc., CAT
II, Inc., Great Independence Ship Co., The Delta Queen Steamboat
Co., Great Hawaiian Properties Corporation, Ocean Development
Co., AMCV Holdings, Inc., DQSB II, Inc., Great Hawaiian Cruise
Line, Inc., American Hawaii Properties Corporation, and Great
Pacific NW Cruise Line, L.L.C.  Copies of the Debtors' latest
monthly operating reports are available at no charge at:


http://www.sec.gov/Archives/edgar/data/315136/000095014403000785/0000950144-
03-000785-index.htm

American Classic Voyages Co., the world's largest U.S.-flag
cruise company and markets four distinct products that cruise
Hawaii, along the coast of North and Central America and on
America's inland waterways, filed for chapter 11 protection on
October 19, 2001 (Bankr. Case No. 01-10954).  Francis A. Monaco
Jr., Esq., at Walsh, Monzack & Monaco, P.A., and Jeremy W. Ryan,
Esq. at Saul Ewing LLP represent the Debtors in their
restructuring efforts.


ASIA GLOBAL CROSSING: Retains PwC for Accounting & Tax Advice
-------------------------------------------------------------
Asia Global Crossing Ltd., and its debtor-affiliates sought and
obtained permission from the U.S. Bankruptcy Court for the
Southern District of New York to employ PricewaterhouseCoopers
LLP as its accountants, auditors and tax advisors, pursuant to
an engagement letter between the AGX Debtors and PwC, dated as
of October 23, 2002.

Specifically, PwC will:

   A. audit financial statements and related disclosures and
      assist in preparing documents required by the SEC and
      statutory and other regulatory authorities around the
      world;

   B. audit financial statements of any benefit plans as may be
      required by the Department of Labor or by the Employee
      Retirement Income Security Act and provide consultation
      with respect to other employee matters;

   C. review unaudited quarterly financial statements of the
      Debtors as required by applicable law or regulations or as
      requested by the Debtors;

   D. provide other tax consulting and preparation services;

   E. assist in preparing financial disclosures required by the
      Court, including the schedules of assets and liabilities,
      the statement of financial affairs and monthly operating
      reports;

   F. assist in the coordination of responses to creditor
      information requests and interfacing with creditors and
      their financial advisors;

   G. assist the Debtors' legal counsel, to the extent
      necessary, with the analysis and revision of the Debtors'
      plan or plans of reorganization;

   H. attend meetings and assist in discussions with the
      Creditors' Committee, the U.S. Trustee, and other
      interested parties, to the extent requested by the
      Debtors;

   I. consult with the Debtors' management on other business
      matters relating to its Chapter 11 reorganization efforts;
      and

   J. assist with any other matters as the Debtors' management
      or legal counsel and PwC may mutually agree.

The Debtors will compensate PwC on an hourly basis at rates
consistent with the rates charged by PwC in non-bankruptcy
matters of this type.  The hourly rates to be charged by PwC in
connection with this representation are:

      Partner                           $560 - 670
      National Consulting Partner        640 - 670
      Senior Manager                     440 - 620
      Manager                            360 - 510
      Senior Associate                   220 - 350
      Associate                          160 - 190
      Administrative Assistant                  75

These rates are subject to periodic adjustments to reflect
economic and other conditions. (Global Crossing Bankruptcy News,
Issue No. 33; Bankruptcy Creditors' Service, Inc., 609/392-0900)


AT&T CORP: Fitch Affirms BBB Rating & Revises Outlook to Neg.
-------------------------------------------------------------
Fitch Ratings has affirmed AT&T Corp.'s senior unsecured debt
rating at 'BBB+' and the company's 'F2' short-term rating. Fitch
has revised the Rating Outlook on AT&T Corp. to Negative from
Stable.

The revision to the company's Rating Outlook reflects Fitch's
view that the company's operating cash flow will be further
pressured stemming from the expectation that general economic
and industry conditions will continue to affect AT&T Business
Service's operational results and further erode AT&T Consumer
Service's financial performance during 2003.

In particular, AT&T Business Service revenue was impacted by
ongoing pricing pressures within its long distance voice segment
and slowing growth within the company's enterprise data
businesses. Slowing data revenue growth reflects the continued
scaling back of overall IT spending by enterprise customers
during 2002. Fitch does not expect a rebound of IT spending to
occur during 2003, which when coupled with pricing pressures and
increased competition will impact AT&T Business Service's
ability to return to a revenue growth environment in the near
term. From Fitch's perspective, AT&T Business Services will face
escalating competition for business within the regional small
and medium sized business segment from the RBOCSs as they begin
to offer in region voice and data services to this segment. This
increased competition could further pressure pricing within the
industry and negatively impact the company's margins. The
industry's pricing structure could be further disrupted by the
pricing decisions of carriers currently in or recently emerged
from bankruptcy.

Fitch's rating reflects the company's strong capital structure
and credit profile relative to its rating, the company's strong
liquidity position, free cash flow generation capabilities and
the expectation of further debt reduction. The company's
liquidity position is supported by the $8 billion of cash on the
balance sheet at the end of 2002 and approximately $5 billion of
available bank and accounts receivable securitization
facilities. Scheduled maturities consist of $2.4 billion in 2003
including $1.0 billion short-term notes and $2.4 billion in
2004, however after considering the completion of AT&T Corp's
debt repurchase offer, 2004 maturities will stand at
approximately $1.2 billion.

From Fitch's perspective, while its operations will continue to
be under pressure, AT&T Corp. is positioned to generate positive
free cash flow over the intermediate term. AT&T Corp.'s flexible
capital spending budget, which is largely success based, could
further facilitate the company's ability to deliver free cash
flow.


AVCOM: Ceases Operations in Order to Maximize Shareholder Value
---------------------------------------------------------------
AVCOM, considered one of the Nation's leading Valued Added
Resellers of enterprise-class computers, security, storage and
networking solutions is ceasing operations.

               Why is AVCOM ceasing operations?

AVCOM is ceasing operations for a number of economic and
business reasons. The ongoing prospect of running AVCOM's
business at break-even, at best, though endorsed by the Vendors,
is not good enough for AVCOM's shareholders, nor its
stakeholders.  Depressed demand for high-end solutions, the
over-distribution of IT products and services, falling margins
and the vendor's failure to value and reward the high
investments required to be a successful VAR -- all influenced
AVCOM's decision.  As a result, it was unanimously determined to
distribute AVCOM's equity to its shareholders.

The value of AVCOM's engineering, architectural, sales, ERP/SFA
and marketing talents is not protected enough by the vendor
community who thrives off AVCOM's efforts.  Until the IT
marketplace matures to a point where the ill ways of the Channel
are repaired and those Systems Integrators who create
incremental IT solutions are sufficiently rewarded for their
investments of sweat and equity, the road ahead will be paved
with minimal, if any, ROB [Return on Brand].

According to Brad Bishop, AVCOM Founder, President & CEO, "Our
Executive Management team, along with the Board of Directors,
decided to take certain necessary and appropriate actions to
maximize its shareholder value."  In a letter to employees
announcing this decision, Bishop stated, "This was a very
difficult decision.  Unfortunately, the continued downturn in
the economy, the widespread acceptance of gray-market products
and the resulting drop in AVCOM revenues has forced us to take
this action.  As far as we know, AVCOM is the only large
solution provider to hang it up whilst having substantial
positive working capital."

AVCOM will close all of their offices nationwide.  Though the
company will no longer accept new orders after January 31, 2003,
it will continue to ship and invoice all existing open purchase
orders and complete all engineering and Professional Services
Group engagements.  "AVCOM has 1,000's of customers nationwide
and will honor all of our customer commitments and help our
customers to transition to other resources," states Mr. Bishop.

Mr. Bishop goes on to say, "Over the past 20 years, AVCOM has
delivered over a Billion dollars worth of IT solutions to
corporations nationwide.  We are very grateful for the trust and
confidence our customers have had in AVCOM and our certified
team of IT professionals.  We have worked very hard to maintain
the high standards required to be authorized to sell and support
products and IT solutions from Sun Microsystems, Veritas, Cisco,
Oracle, Hitachi Data Systems, and other leading manufacturers
and developers. Unfortunately, the costs associated with
maintaining these high standards, weighed against the eroding
revenues and low margins, make it impossible for us to continue
to deliver the quality of service our customers have come to
expect from AVCOM.  Strong customer and vendor ethics have been
the core to AVCOM's value proposition," states Mr. Bishop.

For a complete listing of all AVCOM assets being sold/auctioned,
interested corporations should go to http://www.avcom.com/ASSETS

AVCOM Technologies, Inc., is an eInfrastructure solutions
provider delivering Information Technology solutions with the
performance, reliability and scalability progressive companies
demand.  AVCOM's comprehensive suite of IT products and
architectural/design services offer single-source convenience,
backed by decades of experience in the high-tech arena.  The
company's renowned certified engineering expertise can be
delivered in a variety of ways to meet individual customer needs
-- from traditional Professional Services engagements to fully
outsourced solutions. With annual revenues peaking at $321
Million, AVCOM has maintained long-standing, high-integrity
partnerships with some of the top-name vendors
in the industry, including Sun Microsystems, Hitachi Data
Systems, Cisco, Oracle, Veritas, Checkpoint, NAI, RSA,
SharkRack, and others.  Founded in 1982, AVCOM has been named
one of Silicon Valley's fastest growing and/or largest privately
held companies every year since 1992.  The company is
headquartered in Sunnyvale, California with offices throughout
the United States.


BETHLEHEM STEEL: Obtains July 31, 2003 Exclusivity Extension
------------------------------------------------------------
Judge Lifland awarded Bethlehem Steel Corporation, and its
debtor-affiliates a six-month extension of their exclusive
periods to prepare and file a plan of reorganization and solicit
acceptances of that plan from creditors at a hearing in
Manhattan last week.  The Debtors have the continuing exclusive
right, without interference from any other party-in-interest, to
file a plan through and including July 31, 2003, and until
September 30, 2003, to solicit creditors' acceptances of that
plan.  These extensions are without prejudice to Bethlehem's
rights to seek additional extensions.

According to George A. Davis, Esq., at Weil, Gotshal & Manges
LLP, in New York, the Debtors have made substantial progress in
the prosecution of their Chapter 11 cases.  However, in an
extremely sensitive and uncertain industry and economic climate,
the Debtors' business and operations are at a critical juncture.
The termination of the Exclusive Periods would likely lead to
unnecessary adversarial situations that will cause a
deterioration in the Debtors' businesses and the value of their
assets.

Mr. Davis explains that the January 6, 2003, ISG Proposal to
acquire substantially all of the Debtors' steelmaking assets is
being given careful analysis and evaluation by Bethlehem's
board.

James Gansalus at Bloomberg News reports that Chief Executive
Robert Miller told participants in a quarterly conference call
this week that Bethlehem management has asked the Board to
accept ISG's offer.  The board's decision, Bloomberg says, will
be announced within a few days.

Until the ISG Proposal is fully analyzed, Mr. Davis notes that
any plan that may be proposed by the Debtors will be premature.
In the event the Debtors find the ISG Proposal to be in their
best interest, an asset purchase agreement will be negotiated
and finalized and presented to the Court for approval.  This,
Mr. Davis remarks, requires time.

Mr. Davis notes that negotiations with ISG are complicated by
the fact that the Pension Benefit Guaranty Corporation filed a
complaint in the U.S. District Court for the Eastern District of
Pennsylvania seeking to terminate Bethlehem's pension plan and
take over responsibility for benefits earned to date -- despite
the fact that the Debtors have not missed any scheduled
contributions to the fund or payments from it to eligible
recipients.

Prior to the filing of PBGC's complaint, the Debtors expended
significant time negotiating with the USWA regarding reducing
their payroll through early retirements.  Under a PBGC takeover,
retirees would continue to receive monthly payments and others
who have earned eligibility for pensions would receive benefits
on reaching retirement age.

This abrupt termination of the Debtors' pension plan has
negatively affected their ability to effectuate an early
retirement plan acceptable to the USWA.

Thus, aside from the ISG issue, an extension of the Exclusive
Periods is also needed for the Debtors to negotiate an agreement
with the USWA and deal with the outstanding issues with the
PBGC.

Besides, Mr. Davis adds, the Debtors are likewise exploring the
possibility of pursuing a stand-alone plan, and other options.

                  Stand-Alone Chapter 11 Plan

Bethlehem tells the Court that it is continuing to develop a
stand-alone Chapter 11 plan premised on:

A. Union Negotiations.

    In an attempt to reduce their staggering employment and
    postemployment related expenses, the Debtors have continued
    to negotiate with the USWA to modify the terms, like those
    related to staffing and using independent contractors, of
    the collective bargaining agreement between them and the
    USWA. Because the USWA's focus has been on the consolidation
    of the steel industry, these discussions have not advanced
    as far as discussions concerning a new labor agreement in
    the context of a Bethlehem/ISG combination.

B. Business Plan.

    The Debtors, with the assistance of its financial advisors,
    have continued the process of preparing a long-range
    business plan to provide a foundation for a Chapter 11 plan.
    As part of this process, the Debtors will consider a leaner
    organizational structure, actions necessary to deal with
    underperforming assets, and a capital expenditure plan with
    sufficient resources to ensure that their  facilities can
    keep up with increasingly stringent customer demands.

Hence, besides the ISG transaction, Mr. Davis points out that
the Debtors need more time to continue negotiations to reduce
its unfunded pension and OPEB liabilities and develop a new
collective bargaining agreement. Until the Debtors achieve
substantial reductions in their pension and OPEB liabilities and
resolve critical elements of a new collective bargaining
agreement, they will not be in a position to negotiate and
propose a viable Chapter 11 plan to address the rights and
interests of other constituents. The Debtors also need to
implement significant cost-saving changes to its health plans
for nonunionized active employees.

Finally, in addition to working on matters directly related to
the scope and contours of a Chapter 11 plan, the Debtors have
communicated regularly with the Committee and continued its
efforts to preserve and enhance the value of its estates by:

    (a) reviewing unexpired leases of nonresidential real
        property and beginning to determine which leases to
        assume or reject;

    (b) selling and leasing certain noncore assets to raise cash
        to fund core business operations;

    (c) reviewing their interests in certain non-Debtor joint
        ventures and protecting their interests in Columbus
        Coatings Company and Columbus Processing Company by
        acquiring full ownership of CCC and CPC and exploring a
        restructuring of CCC's secured debt; and

    (d) reconciling the thousands of proofs of claim filed by
        their creditors.

While Bethlehem received authorization to consummate a
refinancing of CCC's secured debt, the refinancing was prevented
by the PBGC's unexpected termination of Bethlehem's pension
plan.

Failure to extend the Exclusive Periods as requested would
defeat the policy of the Bankruptcy Code to provide a debtor
with a meaningful and reasonable opportunity to negotiate with
creditors and other parties in interest and propose a
confirmable Chapter 11 plan, Mr. Davis says. This third request
for an extension of the Exclusive Periods does not seek to delay
the reorganization for some speculative event or to pressure
creditors to accede to a plan unsatisfactory to them.

               Committee Wants to Take Control

The Official Committee of Unsecured Creditors objects to the
Debtors' motion to further extend its exclusive periods to file
a plan and solicit acceptances.

James C. McCarroll, esq., at Kramer Levin Naftalis & Frankel
LLP, in New York, says the Debtors have had 15 months to
formulate and propose a plan.  They are presently contemplating
a sale of the great bulk of their assets through a deal that, as
presently constituted, will yield little or no recovery to
general unsecured creditors.

Mr. McCarroll remarks that while the Debtors' cases are indeed
large and complex, it is by no means necessary or appropriate to
continue to reserve only to the Debtors the right to propose
plans of reorganization.  There is no reason to restrict third
parties from proposing plans of reorganization for the Debtors.

To the extent that an entity wishes to submit a bid for the
Debtors' assets that would compete with ISG's bid through a
proposed plan of reorganization, there should be no legal
impediment to that happening.  However, continuing the exclusive
period may very well dissuade potential buyers who would be
inclined to bid on the assets only in connection with a proposed
plan of reorganization.

In light of this possibility, Mr. McCarroll tells Judge Lifland
that cause does not exist to further extend the exclusive
period.

The Courts' refusal to extend the Debtors' exclusivity period
does not prevent the Debtors from negotiating with ISG and other
creditors and parties in interest, nor does it prevent the
Debtors from filing a plan.  By contrast, Mr. McCarroll quips,
extension of exclusivity would prejudice the creditors and other
parties in interest who may wish to propose a plan of
reorganization, such as a purchaser of the Debtors' assets.

Thus, the Committee believes that an extension of exclusivity at
this crucial juncture in the case would serve no purpose other
than to deny them the possibility of a potentially beneficial
alternative plan proposal.

Jeff St. Onge at Bloomberg News notes that Bethlehem's been
seeking a buyer or partner for more than a year.  Companies that
have declined to bid for Bethlehem, Mr. St. Onge relates,
include Luxembourg-based Arcelor SA, the world's biggest
steelmaker, and Brazil's Companhia Siderurgica Nacional SA.
U.S. Steel dropped a bid because it didn't want to assume
Bethlehem's pension and health-care obligations of about $6
billion. (Bethlehem Bankruptcy News, Issue No. 30; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


BOOTS & COOTS: Receives Notice of Loan Default from Checkpoint
--------------------------------------------------------------
Boots & Coots International Well Control, Inc. (Amex: WEL)
received a Notice of Default under the Agreement, Note and other
Loan Documents executed December 4, 2002, with its new lender,
Checkpoint Business, Inc., wherein Checkpoint alleges the
occurrence of several alleged defaults under the Agreement.

Boots and Coots entered into a Loan Agreement with Checkpoint
providing for short term working capital up to $1 million.
According to the Loan Documents upon the occurrence of an Event
of Default (i) any obligation of Checkpoint to make advances of
principal under the Note shall immediately terminate, (ii)
Checkpoint may, at its option, without notice to the Company,
declare the principal and interest accrued on the Note and on
all other Obligations to be forthwith due and payable, and (iii)
Checkpoint shall have the right to exercise any and all rights
and remedies available to it under the Loan Documents or at law
or in equity. Checkpoint has not notified the Company that it is
proposing to accelerate the indebtedness outstanding under the
Agreement.

The Company is in communication with Checkpoint and is in the
process of responding to Checkpoint regarding the specific
alleged occurrences of default. The Company believes that it has
resolved all matters relative to the Notice and this fact is the
principal subject of the communications. The Company is unable
to say at this time what further response or action Checkpoint
may take.

Boots & Coots Chairman of the Board, Kirk Krist said, "We are
working through this matter as promptly as possible. The Company
hopes to have a resolution in the very near term. We will
provide appropriate updates as to any material developments in
reference to our ongoing discussions with Checkpoint. Our main
focus remains on our core competencies in well control and risk
management. We are prepared to respond and deliver as incidents
may arise."

In addition, Boots & Coots announced that as part of its
restructuring and cost cutting initiatives they have
consolidated their executive and operations offices to the
Company's North Houston Rosslyn Road location in Houston, Texas.

Boots & Coots International Well Control, Inc., Houston, Texas,
is a global emergency response company that specializes, through
its Well Control unit, as an integrated, full-service,
emergency-response company with the in-house ability to provide
its expanded full-service prevention and response capabilities
to the global needs of the oil and gas and petrochemical
industries, including, but not limited to, oil and gas well
blowouts and well fires as well as providing a complete menu of
non-critical well control services.


BROBECK PHLEGER: Default on $90 Million Citibank Loan Reported
--------------------------------------------------------------
Press reports say that Brobeck, Phleger & Harrison LLP is in
default on a $90 million loan agreement with Citibank and talks
are underway to restructure that loan and other real estate
obligations.  Last week, talks to merge Brobeck's 500 remaining
lawyers into Morgan, Lewis & Bockius LLP fell apart.

Brobeck represented many Internet companies during the 1990s,
played pivotal roles in taking Buy.com, 1-800-Flowers.com and
Stamps.com public, and helped push first-year associate salaries
to the $135,000 mark.  As Brobeck's client base needed to cut
costs or went bust, firm revenues and profits fell sharply:


         Year          Revenues         Profits
         ----          --------         -------
         1997        $213,500,000         N/A
         1998         250,500,000         N/A
         1999         314,000,000         N/A
         2000         476,000,000         N/A
         2001         447,000,000    $107,000,000
         2002         352,000,000      68,000,000

and attorneys left the firm.  Last year, 56 partners jumped
ship.  Former Firm Chairman Tower Snow, Jr., Esq., left in July,
taking 17 Brobeck attorneys with him to open Clifford Chance's
San Francisco office.  Last week, Steven Zager, Esq., the head
of Brobeck's litigation department in Austin, Texas, left for
Akin, Gump, Strauss Hauer & Feld.

Information about how much the firm owes to who is sketchy.
Eric Young at the San Francisco Business Times reports that
Brobeck may have made a $26 million payment recently on the $90
million Citibank loan.  The Financial Times reports that
Brobeck's partners agreed last week "to give up all their pay
for the three months of this year in order to pay off $26
million of the firm's debts."  The extent of each partner's
liability is uncertain.  Some estimates say that after
collections of accounts receivable and liquidation of other
assets, the shortfall may be no greater than $250,000 per
partner.

Brobeck's partners voted Thursday to kill the San Francisco law
firm formed in the 1920s after the break-up of Morrison, Dunne &
Brobeck.  Herman Phleger reportedly persuaded Peter Dunne and
William Brobeck that more money could be made if other partners
were turned out, whereupon the other partners were promptly
fired and locked out of the office.  Hoovers, Inc., adds to this
story that the trio's partners returned with a fire ax, chopped
down the door, and retrieved their papers.  Mr. Morrison formed
Morrison & Foerster LLP.

"Brobeck will likely wind down its operations according to a
process that will be defined in the next few days," spokesman
John Pachtner told staff writers P.J. Huffstutter and Alex Pham
at the Los Angeles Times.  "The continued down economy, the
troubled technology sector and the departure of many of the
firm's partners make it unlikely that Brobeck will be able to
continue as a free-standing law firm."

"There will be transition period during which we will fulfill
all our commitments to our clients," Mr. Pachtner stressed.



CEDAR BRAKES I & II: Fitch Drops Sr. Secured Bond Rating to BB+
---------------------------------------------------------------
Cedar Brakes I LLC's $310.6 million senior secured bonds and
Cedar Brakes II LLC's $431.4 million senior secured bonds have
been downgraded to 'BB+' from 'BBB' by Fitch Ratings. The
ratings remain on Rating Watch Negative where they were
originally placed on October 2, 2002.

The Cedar Brakes transactions are part of El Paso Corp.'s (EP)
Qualifying Facility contract restructuring program. Cedar Brakes
I and II purchase energy from El Paso Merchant Energy (EPM) and
resell that energy to Public Service Electric & Gas Co.
(currently rated 'A-' by Fitch) under long term contracts .
Although Cedar Brakes I and II are bankruptcy-remote, indirect
subsidiaries of EP, their ratings are constrained by the
underlying credit quality of EP due to EP's guarantee of EPM's
performance under the supply contracts.

The downgrades reflect EP's diminished credit quality, including
its heightened debt leverage, weakening credit protection
measures, strained liquidity position, and sizable debt maturity
profile in 2003 and 2004. Furthermore, there are uncertainties
surrounding the future business profile and financial
implications resulting from EP's ongoing asset disposal program
and wind down of energy marketing and trading activities
business. The continued Rating Watch Negative status reflects
the uncertainty surrounding the ultimate outcome of the pending
Federal Energy Regulatory Commission ruling involving EP
subsidiaries' natural gas pipeline availability to California.


CWMBS: Fitch Takes Various Rating Actions on Series 2003-2 Notes
----------------------------------------------------------------
CWMBS, Inc.'s mortgage pass-through certificates, CHL Mortgage
Pass-Through Trust 2003-2 classes A-1 through A-18, PO and A-R
(senior certificates, $485,402,686) are rated 'AAA' by Fitch
Ratings. In addition, Fitch rates class M ($6,998,600) 'AA',
class B-1 ($2,999,400) 'A', class B-2 ($1,749,700) 'BBB', class
B-3 ($999,800) 'BB' and class B-4 ($749,900) is rated 'B'.

The 'AAA' rating on the senior certificates reflects the 2.90%
subordination provided by the 1.40% class M, 0.60% class B-1,
0.35% class B-2, 0.20% privately offered class B-3, 0.15%
privately offered class B-4 and 0.20% privately offered class B-
5 (which is not rated by Fitch). Classes M, B-1, B-2, B-3, and
B-4 are rated 'AA', 'A', 'BBB', 'BB' and 'B', respectively,
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 also reflect the quality of the underlying mortgage
collateral, strength of the legal and financial structures and
the master servicing capabilities of Countrywide Home Loans
Servicing LP, a direct wholly owned subsidiary of Countrywide
Home Loans, Inc.

The certificates represent an ownership interest in a pool of
conventional, fully amortizing, 30-year fixed-rate mortgage
loans, secured by first liens on one- to four-family residential
properties. As of the closing date (Jan. 31, 2002), the mortgage
pool demonstrates an approximate weighted-average original loan-
to-value ratio of 69.46%. Approximately 50.59% of the loans were
originated under a reduced documentation program. Cash-out
refinance loans represent 16.96% of the mortgage pool and second
homes 3.11%. The average loan balance is $457,274. The three
states that represent the largest portion of mortgage loans are
California (63.97%), New Jersey (3.44%) and New York (2.64%).

Approximately 0.36 % of the mortgage loans are secured by
properties located in the State of Georgia, none of which are
covered under the Georgia Fair Lending Act (GFLA), effective as
of October 2002. For additional information on GFLA, please see
the press release issued Dec. 24, 2002 entitled 'Fitch Ratings
Comments on Recent Predatory Lending Legislation', available on
the Fitch Ratings web site at 'www.fitchratings.com'.

Approximately 96.89% and 3.11% of the mortgage loans as of the
closing date were originated under CHL's Standard Underwriting
Guidelines and Expanded Underwriting Guidelines, respectively.
Mortgage loans underwritten pursuant to the Expanded
Underwriting Guidelines may have higher loan-to-value ratios,
higher loan amounts, higher debt-to-income ratios and different
documentation requirements than those associated with the
Standard Underwriting Guidelines. In analyzing the collateral
pool, Fitch adjusted its frequency of foreclosure and loss
assumptions to account for the presence of these attributes.

The collateral characteristics provided are based off the
mortgage loans as of the closing date. Fitch ensures that the
deposits of subsequent loans conform to representations made by
Countrywide Home Loans, Inc.

CWMBS purchased the mortgage loans from CHL and deposited the
loans in the trust, which issued the certificates, representing
undivided beneficial ownership in the trust. For federal income
tax purposes, an election will be made to treat the trust fund
as multiple real estate mortgage investment conduits.


CONSECO: Court Allows CFC Debtors to Pay Credit Card Merchants
--------------------------------------------------------------
The Conseco Finance Debtors sought and obtained Court approval
for an order authorizing them to pay prepetition claims of
critical private label credit card merchants, authorizing
payment of merchant incentive program obligations, and
authorizing the sale of customer accounts in the ordinary course
of business.

The CFC Debtors have entered into private label credit card
agreements, or Merchant Contracts, with retailer merchants where
the non-debtor subsidiaries advance payments to the merchant
whose private label card is used in a purchase.  The CFC Debtors
continue to provide the following support for these functions:

      1) funding credit card balance transfers for customers who
         wish to pay off the balance another charge card using a
         private label credit card issued by the non-debtor
         subsidiaries;

      2) providing refunds to customers owed a credit balance
         refund because they overpaid their private labe charge
         accounts; and

      3) funding checks that are written against the private
         label cards by customers.  These are referred to as
         Non-Debtor Private Label Claims.

The CFC Debtors log the Non-Debtor Private Label Claims as an
intercompany charge on a daily basis.  On average, the Debtors
process $2,500,000 of charges per month of these claims, which
are recouped on a daily basis.

                         *   *   *

As previously reported, the CFC Debtors and their non-debtor
subsidiaries deal with numerous private label credit card
retailer merchants on a daily basis.  An interruption in the
payment flow to these merchants would be devastating not only to
the CFC Debtors, but also their non-debtor subsidiaries, that do
not have the same protections afforded by the automatic stay.
Additionally, if customers of the private label credit card
merchants do not receive basic services such as refunds on
overpayments in a timely manner, there is substantial likelihood
that the CFC Debtors and the non-debtor subsidiaries will lose
long-standing business relationships with these merchants.  All
merchant agreements are structured so that a merchant may
terminate its agreement if funding is not received within a
specific time frame.

                    The Repurchase Provision

Most Merchant Contracts provide the Merchant with the option of
purchasing all outstanding accounts between its customers and
the CFC Debtors upon termination of the agreement, called the
Repurchase Provision.

The CFC Debtors and non-debtor subsidiaries are parties to a
Merchant Contract with Menard Inc., containing a Repurchase
Provision.  Menard formally expressed desire to terminate its
Merchant Contract with the CFC Debtors prepetition and to
exercise its Repurchase Provision.  The Menard Contract expired
on December 31, 2002.  Almost 90% of the outstanding Menard
accounts are held by Mill Creek Bank, Inc.  The remaining 10% is
held by CFC.  The parties have entered into a letter of intent
with a third party servicer to sell the outstanding Menard
accounts for par value.  The third party will pay $520,000,000
for the account held by Mill Creek Bank and $45,000,000 for
those held by CFC.  The CFC-owned Menard accounts represent 8.6%
of the total value of accounts scheduled to be sold.

Any sale of accounts pursuant to the Repurchase Provision is an
ordinary course transaction. Nonetheless, out of an abundance of
caution and due to the size of the transaction, the CFC Debtors
seek Court authorization to execute the sale of the Menard
Accounts.  The sale will return a profit and bring additional
liquidity into the estate. Moreover, it is important that the
CFC Debtors continue to honor obligations under the Contracts,
even with a Merchant terminating its Agreement.

                   Customer Program Obligations

Although the CFC Debtors' non-debtor subsidiaries provide the
primary finding for consumer charges, the CFC Debtors have not
formally assigned the Merchant Contracts to them.

Pursuant to the Merchant Contracts, the CFC Debtors administer
merchant incentive programs designed to provide incentives for
merchants to continue to do business with the CFC Debtors.  For
example, the CFC Debtors contribute marketing funds into a joint
marketing account with merchants that is used to market their
private label credit cards.  Under other Contracts, the CFC
Debtors are required to administer a volume incentive program
where the CFC Debtors pay merchant or dealer partners a portion
of the finance charges collected from private label credit card
consumers upon reaching a volume threshold.  Finally, the CFC
Debtors participate in Rebate Programs where the CFC Debtors
either administers the Program, funds rebates to the merchants
on behalf of consumers when minimum charge amounts are met or
partially funds a direct consumer rebate.

The CFC Debtors have obligations under the Merchant Incentive
Programs of approximately $5,000,000.  If the Merchants do not
receive their contributions in a timely fashion, the CFC Debtors
may lose their long-standing business relationships.  If the
ultimate consumer does not receive a promised rebate due to
CFC's failure to fund the Program, CFC's reputation may be
irreparably damaged and it could be subject to claims asserted.

The CFC Debtors derive much of their revenue directly or
indirectly from operation of their non-debtor subsidiaries.  For
instance, the CFC Debtors' consumer finance division enjoys a
leading position in the private label credit card industry, as
well as in the home improvement and big-ticket recreational
product financing industries.  The private label division is
presently the fourth largest third-party private label credit
card provider in the United States.  The consumer finance
division generated $36,000,000 in pretax profits on receivable
volume of $3,980,000,000 in 2001 and has estimated pretax profit
of $65,000,000 on receivable volume of $3,790,000,000 in 2002,
due to the ongoing commitment of its key retailer merchants and
dealer partners.  Preserving these arrangements will permit the
CFC Debtors to preserve their going concern value to the
greatest extent possible. (Conseco Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


CONSECO FINANCE: 18 Units File Chapter 11 Petitions in Illinois
---------------------------------------------------------------
On Dec. 18, 2002, Conseco Finance Corp., reached an agreement
with CFN Investment Holdings LLC providing for the sale of CFC's
assets and operations. At that time, the company also announced
that to implement the sale agreement and assist the company in
its efforts to restructure, CFC and Conseco Financing Servicing
Corp., had filed voluntary petitions for reorganization under
Chapter 11. Under the terms of the sale agreement, CFN had the
right to request that certain other subsidiaries file Chapter 11
petitions so that all CFC debt obligations would be restructured
through the Chapter 11 process. At the request of CFN, 18
additional CFC subsidiaries filed petitions Monday.

The subsidiaries that filed are expected to continue operating
as usual. Mill Creek Bank and Green Tree Retail Services Bank
were not included in the filing. "Based on the terms of the
agreement with CFN, we anticipated this request," said Chuck
Cremens, president and CEO of CFC. "[Mon]day's filings will
facilitate the overall restructuring of CFC and expedite the
sale process. They were an expected and necessary part of the
process, and there should be no disruption to our business
operations," Cremens added.

CFC has requested that certain "First-Day Orders" granted by the
Bankruptcy Court on Dec. 18, 2002, be extended so that they
provide the same relief to the additional entities that filed
petitions today.

The petitions were filed in the U.S. Bankruptcy Court for the
Northern District of Illinois. The company expects the Court to
grant permission to jointly administer these cases with the
other CFC Chapter 11 proceedings.

For more information about CFC's Chapter 11 proceedings, go to
http://www.bmccorp.net/conseco

Conseco Finance Corp., with managed assets of $38 billion, is
one of America's largest finance companies.


CONSECO FINANCE: Conseco Agency Case Summary & Largest Creditors
----------------------------------------------------------------
Lead Debtor: Conseco Agency Of Alabama Inc
             200 East Randolph Drive
             Chicago, IL 60601

Bankruptcy Case No.: 03-04692

Debtor affiliates filing separate chapter 11 petitions:

     Entity                                     Case No.
     ------                                     --------
     Conseco Agency Of Alabama Inc              03-04692
     Conseco Agency Inc                         03-04693
     Conseco Agency Of Kentucky Inc             03-04694
     Conseco Agency Of Nevada Inc               03-04695
     Conseco Agency Of New York Inc             03-04696
     Conseco Finance Canada Company             03-04698
     Crum - Reed General Agency Inc             03-04697
     Conseco Finance Canada Holding Co          03-04699
     Conseco Finance Corp - Alabama             03-04700
     Conseco Finance Credit Corp                03-04701
     Conseco Finance Consumer Discount          03-04702
     Conseco Finance Loan Company               03-04703
     Conseco Finance Net Interest Margin        03-04704
     Conseco Finance Net Interest               03-04705
     Green Tree Finance Corp Two                03-04707
     Green Tree Floorplan Funding Corp          03-04706
     Landmark Manufactured Housing Inc          03-04708
     Rice Park Properties Corporation           03-04709

Type of Business: The Debtors are affiliates of Conseco Finance
                  Corp.

Chapter 11 Petition Date: February 3, 2003

Court: Northern District of Illinois

Judge: Carol A. Doyle

Debtors' Counsel: James Sprayregen, Esq.
                  Kirkland & Ellis
                  200 East Randolph Street
                  Chicago, IL 60601
                  Tel: 312-861-2000

Debtors' 40 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
U.S. Trust N.A.             Guarantee Payments      $8,036,157
180 East 5th Street, 2nd Fl Payments on Asset
St. Paul, MN 55101          Securitization Bonds

ALLTEL Information          Judgment                $6,745,257
Services, Inc.
4001 Rodney Parham Road
Little Road, AR 72212
Contact: Michael Gravelle
Phone: 501-220-7070

Menards                     Merchant Incentive      $1,171,005
4777 Menard Drive
Eau Claire, WI 54703
Contact: Jeff Scala
Phone: 715-876-2428
Fax: 715-876-2743

U.S. Bank N.A.              Trustee Fees              $304,083
180 East, 5th Street,
2nd Floor

ZC Sterling                 Trade Debt                $236,244
210 Interslate N. Parkway
Suite 400
Atlanta, Georgia 30339
Contract: Bob Davis
Phone: 770-690-8400

American Express Corp.      Trade Debt                $213,666

Corporate Express National  Trade Debt                $208,238

Airborne Express - 91001    Trade Debt                $204,967

Sharp Electronics Financial Trade Debt                $130,951

Sotiroff & Abramczyk, P.C.  Professional Fees         $126,138

Select Comfort Corporation  Trade Debt                $120,224

Syntel Inc.                 Trade Debt                $115,094

Standard & Poor's Rating    Trade Debt                $100,500
Services

Imake Consulting, Inc.      Trade Debt                 $99,950

Iron Mountains, Inc. 60709  Trade Debt                 $95,737

PRG Schultz International   Trade Debt                 $68,950

NCP Solutions, Inc.         Trade Debt                 $64,115

MP Johnson Construction Inc Trade Debt                 $63,486

Comdisco/CNS                Trade Debt                 $62,771

Repossessors, Inc.          Trade Debt                 $60,262

Getsmart.com                Trade Debt                 $59,712

Hewlett-Packard             Trade Debt                 $58,974

De Lage Landen Fin'l        Trade Debt                 $57,400
Services

U.S. Property & Appraisal     Trade Debt               $54,936

Orion Marketing Group, Inc.   Trade Debt               $53,303

Datacomp                      Trade Debt               $52,314

Asset One Marketing Group     Trade Debt               $51,469

David J. Stern, P.A.          Trade Debt               $50,260

Parego, Inc.                  Trade Debt               $47,815

Pitney Bowes Management       Trade Debt               $46,395

Deutsche Financial Services   Trade Debt               $45,050

RDI Marketing Services, Inc.  Trade Debt               $44,245

Brandt Fisher Alward & Roy PC Trade Debt               $42,574

Secured Legal Services Group  Trade Debt               $41,656

Wingate Carpet Mills          Trade Debt               $38,375

Kenney & Solomon, P.C.        Trade Debt               $36,883

Ambassadors Performance       Trade Debt               $36,623

Pierce & Associates, P.C.     Trade Debt               $36,104

Promotional Alliance          Trade Debt               $35,582

Windsor Building, L.L.C.      Trade Debt               $35,573


DOW CORNING: Reports Improved Profitability for 4th Quarter 2002
----------------------------------------------------------------
Dow Corning Corp. reported consolidated net income of $25.5
million for the fourth quarter of 2002, a substantial increase
from the loss of $41.5 million reported in same quarter of 2001,
excluding unusual items in both periods. Net income was $141.6
million for all of 2002, up substantially from net income of
$36.3 million in 2001, excluding unusual items in both periods.

Fourth quarter 2002 sales were $698.2 million, 20 percent higher
than sales in last year's fourth quarter. Sales were $2.61
billion for all of 2002, a 7 percent increase over 2001.

Including unusual items, Dow Corning reported a consolidated net
loss of $17.8 million for the fourth quarter of 2002 and net
income of $58.7 million for all of 2002. Unusual items consisted
of restructuring costs in both years, implant insurance
settlements in 2001, Chapter 11 interest expense adjustments in
2001, and variable compensation program changes in 2002.

"Fourth-quarter sales compared favorably to weak sales reported
in the same period last year," said Dow Corning's vice president
for planning and finance and chief financial officer Gifford E.
Brown. "Unusual fourth-quarter expenses consisted of a $43.3
million after-tax charge to accommodate changes to a variable
compensation program."

"Despite the challenging global economic environment, Dow
Corning was successful in growing revenues by offering customers
innovative solutions to meet their exact needs," said Mr. Brown.
"We also delivered on our long-term commitment to sustained cost
competitiveness."

Dow Corning -- http://www.dowcorning.com-- develops,
manufactures and markets diverse silicon-based products and
services, and currently offers more than 7,000 products to more
than 25,000 customers around the world. Dow Corning is a global
leader in silicon-based materials with shares equally owned by
The Dow Chemical Company (NYSE: DOW) and Corning Inc. (NYSE:
GLW). More than half of Dow Corning's $2.7 billion in annual
sales are outside the United States. Dow Corning filed for
chapter 11 protection in 1995.  Dow Corning's Amended Joint Plan
of Reorganization dated February 4, 1999 (as modified on July
28, 1999 and supplemented on July 30, 1999) was confirmed by the
U.S. Bankruptcy Court for the Eastern District of Michigan on
Nov. 30, 1999.  Four remaining appeals (brought by the
Department of Defense, the Health Care Financing Administration,
the Indian Health Service and the Department of Veterans
Affairs) from the Confirmation Order await resolution by Judge
Hood in the District Court and stand in the way of the Plan
taking effect.  Dow Corning's commercial creditors (whose claims
accrue 6.28% interest day-by-day) await the Effective Date of
that Plan.


DYNEGY: Restatements May Trigger Financial Covenant Breaches
------------------------------------------------------------
Dynegy Inc. (NYSE:DYN) reports a net loss of $2.8 billion for
2002, including after-tax charges totaling $2.5 billion. The
company also reports a net loss of $341 million for the fourth
quarter 2002, including after-tax charges totaling $213 million.

                         Year-end Results

Dynegy's net loss of $2.8 billion for 2002 included the
following significant charges, much of which has been previously
reported:

-- $912 million associated with the impairment of goodwill in
   the Wholesale Energy Network segment;

-- $573 million for the impairment of certain investments,
   including communications, technology and unconsolidated
   generation investments;

-- $543 million for discontinued operations primarily related to
   the loss on the sale of Northern Natural Gas Company (NNG);

-- $234 million for the cumulative effect of a change in
   accounting principle associated with a write-down of goodwill
   in the Dynegy Global Communications segment;

-- $124 million for restructuring costs associated with the
   company's exit from the third-party marketing and trading
   business and severance;

-- $84 million for asset impairments, legal reserves,
   amortization costs and other charges;

-- $33 million for West Coast Power reserves; and

-- $31 million for the cost to date for the company's exit from
   the third-party marketing and trading business, including
   certain tolling arrangements and its agreement with
   ChevronTexaco to end their existing natural gas purchase and
   sale contracts.

"Our results reflect the effects of necessary adjustments based
on past market conditions and business decisions and directions,
all in the name of providing our stakeholders with transparency
around our financial results," said Bruce A. Williamson,
president and chief executive officer of Dynegy Inc. "All
substantive issues identified to date through the re-audit
process are reflected in our 2002 results and have been restated
in our financial statements. These adjustments did not impact
our net cash flow for prior periods or our liquidity.

"We did realize several important accomplishments during the
year, including maintaining our safe operating standards,
steadily improving our liquidity position and meeting all our
customer commitments and obligations," said Williamson.
"Importantly, the management team acted quickly and decisively
during the latter part of 2002 to redirect our business focus,
take responsibility for the past and restructure the company
around our core energy businesses. The new Dynegy will be
positioned for better results in the future," he added.

                    Restatements

Dynegy's financial results reflect additional restatements to
the company's previously reported results for 1999 through 2001
and for the first three quarters of 2002. These further
restatements primarily relate to:

-- Adjustments to forward power curves and liquidity reserves
   used in valuing the company's U.S. power marketing and
   trading portfolio, which changes were made to more closely
   reflect forward power demand and market prices;

-- Changes in the company's accounting for certain generation
   and communications lease arrangements, many of which the
   company voluntarily brought onto the balance sheet in June
   2002. The accounting changes result in the consolidation of
   these arrangements from their respective dates of inception
   and the recognition of depreciation and amortization expense
   for the related assets;

-- A change in the measurement date relating to the implied
   dividend the company previously recorded for the in-the-money
   conversion option on the $1.5 billion in Series B preferred
   stock issued to ChevronTexaco in Nov. 2001. Dynegy originally
   used the stock price on Nov. 7, 2001 (the date the conversion
   price was negotiated and approved), but has now determined
   that Nov. 13, 2001 (the date ChevronTexaco funded its
   preferred stock purchase) is the correct measurement date.
   The company's stock price increased significantly between
   these two dates after the announcement of the proposed Enron
   Corp. merger. As a result of the increase in the implied
   value of ChevronTexaco's discounted conversion right, the
   restated preferred stock dividend amounts reflect a two-year
   amortization of an approximate $660 million special dividend

-- an increase of approximately $595 million over the $65
   million originally reported; and

-- Other adjustments that have arisen during the re-audit
   process.

The aggregate effect of these restatements on Dynegy's net
income, as shown in the attached schedule "Quantification of
Effects of Restatement Items," is estimated to be:

-- Net income for the fourth quarter 2001 changed from $87
   million to $32 million. The reduction relates principally to
   a decrease in the previously reported value of the company's
   marketing and trading portfolio and the addition of
   depreciation and amortization expense associated with the
   consolidation of generation and communications lease
   arrangements;

-- Net income for the year ended 2001 changed from $539 million
   to $432 million. The reduction relates principally to a
   decrease in the previously reported value of the company's \
   marketing and trading portfolio and the addition of
   depreciation and amortization expense associated with the
   consolidation of generation and communications lease
   arrangements;

-- Net income for the first quarter 2002 changed from a loss of
   $127 million to a loss of $405 million. The reduction relates
   principally to a decrease in the previously reported value of
   the company's marketing and trading portfolio and the
   impairment of the communications-related assets brought onto
   the balance sheet upon consolidation of the related lease
   arrangement;

-- Net income for the second quarter 2002 changed from a loss of
   $234 million to a loss of $398 million. The reduction relates
   principally to a decrease in the previously reported value of
   the company's marketing and trading portfolio and the
   impairment of the communications-related assets brought onto
   the balance sheet upon consolidation of the related lease
   arrangement; and

-- Net income for the third quarter 2002 changed from a loss of
   $1.8 billion to a loss of $1.66 billion. The adjustment
   relates principally to the change in previously reported
   values of the company's marketing and trading portfolio.

Net income for 1999 and 2000 changed from $148 million and $484
million to $116 million and $494 million, respectively,
primarily as a result of miscellaneous adjustments that have
arisen during the re-audit process.

The aggregate effect of the restatements on Dynegy's long-term
debt is estimated to be:

-- Long-term debt at the end of the fourth quarter 2001 changed
   from $3.8 billion to $4.5 billion;

-- Long-term debt at the end of the first quarter 2002 changed
   from $4.3 billion to $5.2 billion;

-- Long-term debt at the end of the second quarter 2002 changed
   from $4.8 billion to $5.4 billion; and

-- Long-term debt at the end of the third quarter 2002 changed
   from $4.5 billion to $4.8 billion.

These increases in debt relate principally to the consolidation
of generation and communications lease arrangements as of their
respective dates of inception. The ChevronTexaco implied
dividend is a non-cash item that affects income or loss
available to common stockholders only. The effect of the implied
dividend is reflected in the attached schedules.

Dynegy has previously announced restatements to its results for
1999 through 2001 on Nov. 14, 2002 in a Current Report on Form
8-K. Those restatements related to the Alpha structured natural
gas transaction, balance sheet reconciliations principally
related to the company's natural gas marketing business,
adjustments related to a change in the accounting for certain
contracts from hedge accounting to mark-to-market accounting
under Statement of Financial Accounting Standards No. 133, and
the valuation of the company's 2000 acquisition of
telecommunications company Extant, Inc. The further restatement
items are incremental to these previously reflected restatement
items.

PricewaterhouseCoopers' re-audit of Dynegy's 1999 through 2001
financial statements remains ongoing and is expected to be
completed during the first quarter 2003. Dynegy's announcement
reflects all known significant restatement items. However, as a
result of this re-audit and the completion of the audit of
Dynegy's 2002 financial statements, there may be further
revisions to Dynegy's financial statements, some of which could
be material.

The restatements could affect Dynegy's ability to comply with
the financial covenants in certain credit agreements.
Management will continue to monitor the company's compliance
with these covenants as its 2002 financial statements are
finalized and will notify its lenders if the company is unable
to remain in compliance.

               Year-end Business Segment Results

Year-end results for the company's business segments, which
reflect the restatement items described above, are as follows:

                    Wholesale Energy Network

The Wholesale Energy Network segment consists of power
generation and customer and risk management activities. Customer
and risk management activities are centered on the physical
delivery of and risk management around wholesale natural gas,
power and coal. Dynegy UK storage is now included in
discontinued operations.

The company continues to implement its strategy for exiting the
third-party marketing and trading business. Dynegy's generation
business will continue to manage commodity price risk associated
with fuel procurement and to market and trade around its owned
and controlled assets.

The net loss from continuing operations for the Wholesale Energy
Network segment was $1.5 billion for 2002. Reported results for
this segment included after-tax charges of $1.2 billion. The
total operating loss for the segment consisted of $680 million
for the customer and risk management business and $912 million
of goodwill write-down, less $119 million in operating income
from the asset businesses, which included only the generation
business. The customer and risk management business was impacted
primarily by the loss in value of the marketing and trading
portfolio and the losses associated with the exit from that
business. Results for the generation business were impacted by a
significant decrease in power prices year-over-year.
Discontinued operations included a gain of $28 million related
to the UK storage business.

North American gas marketing sales volumes decreased to 9.7
billion cubic feet per day, compared to 11.3 billion cubic feet
per day for 2001. The end to the ChevronTexaco natural gas
purchase and sale contracts and the exit from the customer and
risk management business will substantially reduce future
volumes. Total physical power sold increased to 418.7 million
megawatt hours for 2002, compared to 414.5 million megawatt
hours for 2001.

               Dynegy Midstream Services

Dynegy Midstream Services is an integrated midstream company
with operations in both the upstream and downstream segments of
the North American energy industry. It ranks as one of the
country's largest natural gas liquids marketers and is engaged
in the gathering, processing, fractionation, storage,
transportation and marketing of natural gas and natural gas
liquids. Dynegy Midstream Services also manages commodity price
risk associated with its operations and markets and trades
around its network of physical assets to deliver products and
services to its customers. The global liquids marketing business
is now included in discontinued operations.

Net income from continuing operations for the natural gas
liquids segment was $3 million in 2002. Reported results for
this segment included after-tax charges of $19 million relating
to restructuring and reorganization costs. Results were also
impacted by lower realized prices. Discontinued operations
included a loss of $7 million related to the sale of the
company's London-based international LPG trading and
transportation business.

Processing volumes increased 10 percent to 91.9 thousand barrels
per day for 2002, compared to 83.8 thousand barrels per day for
2001. Natural gas liquids sold were 498.8 thousand barrels per
day for 2002, compared to 557.4 thousand barrels per day for
2001.

               Transmission and Distribution

Dynegy's transmission and distribution segment includes Illinois
Power, a regulated electric and gas energy delivery company
serving customers across a 15,000-square-mile area of Illinois.
NNG is now included in discontinued operations.

Net income from continuing operations for the transmission and
distribution segment, which includes Illinois Power, was $38
million in 2002. Reported results for this segment included
after-tax charges of $24 million, including restructuring and
reorganization costs and accelerated regulatory asset
amortization for the fourth quarter. Results were positively
impacted by an increase in electric residential and commercial
volumes. Discontinued operations included a loss of $578 million
related to the sale of NNG in the third quarter.

                 Dynegy Global Communications

As previously announced, Dynegy exited the communications
business in Europe earlier this month and expects to exit its
communications business in the United States by the end of the
first quarter 2003. The exit from European communications
eliminated approximately $150 million of the company's $185
million in total contractual obligations.

The net loss from continuing operations for the communications
segment was $548 million in 2002. Reported results for this
segment included after-tax charges of $474 million associated
with the impairment of assets, restructuring and reorganization
costs and other reserves. Results also included $234 million for
the cumulative effect of a change in accounting principle
associated with a write-down of goodwill in the first quarter.

                 Fourth Quarter 2002 Results

Dynegy reported a net loss of $341 million for the fourth
quarter 2002. The operating loss was $283 million for the
quarter.

Dynegy's quarterly results included after-tax charges of $213
million, which consisted of the following:

-- $103 million for restructuring and reorganization costs,
   including severance costs associated with the company's
   October workforce reduction;

-- $33 million for the company's net portion of additional
   reserves at West Coast Power;

-- $29 million for the impairment of a turbine and other
   charges;

-- $16 million for estimated costs to settle certain tolling
   arrangements associated with the company's exit from third-
   party marketing and trading;

-- $15 million for settling the ChevronTexaco natural gas
   marketing contract;

-- $15 million for the accelerated regulatory asset amortization
   at Illinois Power; and

-- $14 million for discontinued operations.

Fourth quarter results also included an after-tax gain of $12
million related to the reversal of a previously recorded accrual
for annual incentive compensation, which will not be paid for
2002. In addition, there was a reduction to equity during the
fourth quarter of approximately $65 million related to an
increase in pension fund reserves.

          Liquidity and Operating Cash Flow

As of Jan. 29, Dynegy's liquidity was $1.673 billion. This
consisted of $1.336 billion in cash, $1.4 billion in bank lines
and $188 million of remaining highly liquid inventories, less
$428 million of draws against bank lines and $823 million in
letters of credit posted for collateral related principally to
third-party aspects of the company's marketing and trading
business. Total collateral posted as of Jan. 29, including cash
and letters of credit, was $1.1 billion.

In addition to maintaining a $1.7 billion liquidity position,
Dynegy reduced its bank exposure and debt by approximately $100
million in January.

Reported net cash use from operations for the year ended 2002
was approximately $26 million, after working capital use of
approximately $955 million. The use of working capital was
impacted by an increase in cash collateral and pre-payments of
approximately $432 million during the year.

                    2003 Guidance Estimates

Management is maintaining its previous 2003 guidance estimates
on the generation, natural gas liquids and regulated energy
delivery segments going forward, which included corporate-level
general and administrative, depreciation, interest and other
expenses.

                       About Dynegy Inc.

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

DebtTraders reports that Dynegy Holdings Inc.'s 8.125% bonds due
2005 (DYN05USR1) are trading between 65 and 67. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=DYN05USR1for
real-time bond pricing.


ENRON: Zipa.com Buys New Orleans Datacenter from Enron Broadband
----------------------------------------------------------------
In a significant victory for Louisiana's technology
Infrastructure, a New Orleans Internet company recently bought a
major computer datacenter, located in downtown New Orleans, from
Enron Broadband Services.

The New Orleans Internet services company, Zipa.com, bought the
facility through federal bankruptcy court, in the face of
Enron's financial problems.

The 6,600-square-foot facility had been reserved mainly for
national Internet telecommunications companies, which are still
housed at the facility. However, Zipa's plans for the facility
call for opening the high-tech resource to the local businesses
and other Internet companies.

A datacenter is a highly secure building that houses thousands
of computer servers and requires specialized climate controls,
fire suppression, redundant power supplies and massive Internet
connections. There are very few in the state, even fewer are
accessible to small businesses. The first-rate Zipa facility is
located on the 10th floor of the Poydras Center.

Zipa is seeking to make the facility one of the premier
commercial webhosting facilities in the South. With the
assistance and expertise of its sister company and collocation
client, Intercosmos Media Group, Inc., Zipa foresees many
opportunities in the high-end hosting industry throughout
Louisiana, particularly in the New Orleans area.

For information on Zipa, LLC or its services, email
info@zipa.com or call Michael Brunson at (504) 679-5170, ext.
124.


ESSENTIAL THERAPEUTICS: Receives Delisting Notice from Nasdaq
-------------------------------------------------------------
Essential Therapeutics, Inc. (Nasdaq: ETRX) received a Nasdaq
Staff determination letter indicating that the Company's
securities will be delisted from the Nasdaq National Market at
the opening of business on February 10, 2003, due to the
Company's failure to comply with the Nasdaq National Market
System listing criteria which require the Company to maintain a
minimum stockholders' equity of $10 million.  The Company has
the right to appeal the Staff's determination to the Nasdaq
Listing Qualifications Panel, and the hearing request will stay
the delisting of the Company's securities pending the Panel's
decision. The Company intends to request such a hearing.

The Staff's determination follows the failure of the holders of
a majority of the outstanding shares of the Company's common
stock to approve the conversion of the Company's Series B
Preferred Stock into common stock at the Special Meeting of
Stockholders convened for such purpose on January 23, 2003. The
conversion of the Series B Preferred Stock into common stock was
the critical element of the Company's comprehensive plan to
secure compliance with Nasdaq's minimum stockholders' equity
requirement for continued listing on the Nasdaq National Market.

As a result of the delisting, the terms of the Series B
Preferred Stock provide that the Series B Preferred Stockholders
have the right to cause the Company to redeem their shares of
Series B Preferred Stock at a price of $1,000 per share. The
redemption of all 60,000 shares of Series B Preferred Stock
would result in the Company being obligated to pay the holders
of the Series B Preferred Stock an aggregate of $60.0 million.
The Company currently does not have the funds available to
redeem all of the outstanding shares of Series B Preferred
Stock, and in the face of valid redemption elections by
sufficient holders of its Series B Preferred Stock, the Company
would likely need to consider taking action that may result in
the Company's dissolution, insolvency or seeking protection
under bankruptcy laws or similar actions.

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

As of September 30, 2002, the company's balance sheet shows a
$12 million total shareholders equity deficit.


FEDERAL-MOGUL: Court Approves Dovebid's Retention as Auctioneer
---------------------------------------------------------------
Two years ago, Federal-Mogul Corporation and its debtor-
affiliates began implementing an investment strategy initiative
that focused on their core competencies.  As part of that
process, the Debtors marketed non-core businesses, including
their lighting business, and closed plants that formerly housed
the lighting business. One of the plants the Debtors closed is
the lighting facility located in Franklin Park, Illinois.

The equipment at the Franklin Park Facility falls into roughly
two categories:

1. Those equipment relevant to the work that the Debtors did for
   GM.  At the onset of their Chapter 11 cases, the Debtors sold
   the equipment as de minimis assets to Samlip for $162,300
   since Samlip would be performing the work for GM, in their
   place; and

2. The remaining lighting equipment suited for general industry
   use.  This equipment have not been sold.

The Debtors sought and obtained the Court's authority to employ
DoveBid, Inc. to act as their auctioneer in connection with the
sale of the remaining lighting equipment.

As auctioneer, DoveBid will render these services:

  (a) Consult with the Debtors and their advisors to create and
      implement an appropriate strategy to sell the equipment;

  (b) Prepare, advertise and conduct public auctions of the
      equipment -- in person and through the use of internet
      resources;

  (c) Collect the sale proceeds and applicable taxes from the
      purchasers of the equipment and remit those proceeds, less
      the allowed compensation and expenses, to the Debtors.

Based on the estimates by DoveBid and other auctioneers, the
Debtors could sell the remaining lighting equipment for between
$300,000 and $400,000.

The Debtors will reimburse DoveBid up to $36,200 for marketing
expenses, labor and travel expenses. (Federal-Mogul Bankruptcy
News, Issue No. 30; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


FLOWERS FOODS: S&P Revises Outlook on BBB- Corp Rating to Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Flowers Foods Inc. to stable from negative. At the same time,
Standard & Poor's affirmed the 'BBB-' corporate credit and
senior secured debt ratings on the fresh and frozen baked bread
manufacturer.

Total debt outstanding for Thomasville, Georgia-based Flowers
Foods at Dec. 28, 2002, was about $250 million.

The outlook change reflects Flowers Foods' decision to sell the
frozen dessert business of Mrs. Smith's Bakeries to The Schwan
Food Company for $240 million in cash. Mrs. Smith's Bakeries has
represented about $350 million in sales and has generated
negative EBITDA for the past couple of years.

The proceeds of the sale will be used to repay about $180
million in bank debt and about $16 million in other debt,
leaving Flowers Foods essentially debt-free. Any remaining cash
will be used primarily to fund future acquisitions and share
repurchases. The transaction is expected to close during the
first quarter of 2003.

"Standard & Poor's expects that Flowers Foods will fund future
acquisitions and share repurchases in a manner that will
maintain credit measures appropriate for the current rating,"
said Standard & Poor's credit analyst Ronald B. Neysmith.

Flowers Foods' average business profile continues to reflect its
leading market position in breads and snacks that hold either a
No. 1 or No. 2 position in the majority of their baking markets.
These factors are partially offset by the highly fragmented and
competitive nature of the fresh baked goods industry and the
thin operating margins in the branded food sector. Standard &
Poor's expects Flowers Foods to continue making strategic
acquisitions in order to expand operations regionally and attain
specialty brands for its snack food and bakery divisions.

                         *   *   *

As previously reported, 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.


FMAC EQUIPMENT: Fitch Downgrades Class C Notes to B- from BB
------------------------------------------------------------
Fitch Ratings has taken the following rating action on FMAC
Equipment Receivables 1998-1, LLC:

     -- Class C notes are downgraded to 'B-' from 'BB';

In addition, the class C notes are placed on Rating Watch
Negative.

This rating action is the result of adverse collateral
performance and deterioration of asset quality outside of
Fitch's original expectations. While recoveries and recent
residual realizations have helped to slow portfolio
deterioration, losses from defaulted leases and loans have
significantly reduced the amount of credit enhancement available
to the Class C notes.

In conjunction with the downgrade, the Class C notes are placed
on Rating Watch Negative as failure to realize expected
recoveries will result in continued erosion in available credit
enhancement. In addition, Fitch remains concerned about certain
concentrations within the portfolio, as the top five obligors
represent 22.41% of the outstanding collateral balance.

Fitch will continue to closely monitor these notes and may take
additional rating action in the event of further deterioration.

The assets of FMAC Equipment Receivables 1998-1 LLC consist
primarily of a pool of non-cancelable, triple-net equipment
leases and loans pertaining to restaurant and automotive service
station equipment.

In 1999, FMAC was purchased by Bay View Bank (Bay View) and the
franchise lending unit was subsequently shut down. Bay View
continues to act as servicer for this FMAC portfolio.


FRIEDE-GOLDMAN: Finalizes $61MM Offshore Asset Sale to ACON
-----------------------------------------------------------
Friede Goldman Halter, Inc. (OTCBB:FGHLQ) completed the sale of
substantially all of the assets of its offshore division to ACON
Offshore Partners LP and its affiliates.  The sale was finalized
for a purchase price of approximately $61 million, consisting of
cash and the assumption of secured debt.

"We are pleased with the outcome in closing this transaction and
we commend the Restructuring Committee of the Board of Directors
and the Unsecured Creditors Committee for their efforts," said
T. Jay Collins, FGH Chairman and CEO.

Now that the sale of the offshore assets is complete, Friede
Goldman Halter intends to concentrate on promulgation of its
plan of reorganization. The Company expects to file its plan
early in the first quarter of 2003. As previously reported, the
company does not expect that existing equity security holders
will receive any recovery under the plan.

ACON's new company will operate its acquired assets in
Pascagoula, Mississippi and Port Arthur, Texas under the name of
Signal International, LLC. Signal will provide new construction,
upgrade and repair of all types of offshore drilling rigs,
floating production units, and inland and offshore drilling and
derrick barges.

The Signal International management team is headed by Dick
Marler, President and CEO. It also includes Ron Schnoor, who
will be President of Signal's Mississippi operations, and John
Haley, who will serve as President of Signal's Texas operations.
Additionally, Robert Shepherd is named as Executive Vice
President for Business Operations and Chris Cunningham will
serve as Chief Financial Officer.

Friede Goldman Halter has been advised by ACON Investments that
ACON is an international private equity investment firm, which
manages investments in the United States, Europe and Latin
America. ACON's partnerships typically include sophisticated
institutional investors from the U.S., Europe and Latin America.
Among its activities, ACON is affiliated with Texas Pacific
Group (TPG). TPG manages over $5.7 billion worldwide.


FRISBY TECH: Terminates Duncan Russell's Employment as Pres./CEO
----------------------------------------------------------------
FRISBY TECHNOLOGIES, INC. (OTC Bulletin Board: FRIZ), announced
the termination of Duncan Russell, the company's president and
chief operating officer.  Mr. Russell started his employment
with the Company in 1998 and has served as president and chief
operating officer since June, 2000.  The Company has no current
plans to fill the open position.  The Company is currently
operating under Chapter 11 (Reorganization) of the Federal
Bankruptcy Code.

According to Mark Gillis, Chief Restructuring Officer, "The
Company is taking steps to reduce its expenses and overhead as
we develop our reorganization plan. I am confident that the
current management team and staff provide the appropriate
resources to execute our business plan during the company's
transition to a re-defined business model."

Frisby Technologies Inc. is a global leader in the development
of temperature balancing materials for the apparel, footwear,
sporting goods, and home furnishings industries. For more
information, contact Frisby Technologies Inc. at 877-444-COMFORT
or visit http://www.comfortemp.com.


GENUITY INC: Settles Claims Dispute with Deutsche Bank
------------------------------------------------------
Genuity Inc. and its debtor-affiliates sought and obtained Court
approval of their Settlement Agreement dated January 16, 2003
with Deutsche Bank AG.

William F. McCarthy, Esq., at Ropes & Gray, in Boston,
Massachusetts, informs the Court that the claims being settled
are Genuity's claims based on Deutsche Bank's failure to fund a
prepetition draw on a credit agreement with a bank syndicate of
which Deutsche Bank is a member.  Under the DB Settlement
Agreement, Genuity will fully release those claims in exchange
for Deutsche Bank not objecting to the sale transaction to Level
3 Communications Inc. and the pending settlement with Verizon
Communications Inc.  The DB Settlement Agreement is reasonable
and is in the best interests of the Debtors, their estates and
their creditors because:

    -- there is significant risk that Genuity's claims against
       Deutsche Bank would be eviscerated because of set-off and
       recoupment that may be available to Deutsche Bank; and

    -- the claims against DB are parent-level Debtor claims, and
       there are virtually no creditors at the parent company
       level other than the other banks who are part of the Bank
       Syndicate.

The Debtors refuse to allow what is essentially an inter-bank
quarrel to place any risk on the closing of the Level 3
Transaction, which has tremendous benefits for these estates.

According to Mr. McCarthy, the release given to Deutsche Bank is
contingent on approval of the Level 3 Transaction or an
alternative transaction that requires that the Verizon
Settlement Agreement is approved.  The release of Deutsche Bank
is not, however, contingent on the closing of this transaction.
The Debtors consider this to be an acceptable risk, given the
likelihood of closing any transaction.

As an ancillary term, the Debtors are agreeing that Deutsche
Bank will have allowed claims amounting to $172,000,000 in the
cases of Genuity, Genuity Solutions, Inc. and Genuity Telecom,
Inc. The Debtors retain all rights to object to these claims,
and to seek subordination, except on the grounds that the claim
does not constitute indebtedness.  All other parties-in-interest
retain all claims objections with respect to Deutsche Bank.

In early June 2000, Mr. McCarthy recounts that prior to the
initial public offering of Genuity stock, Genuity and Verizon
began working to arrange a credit facility.  The Bank Facility
was put in place pursuant to a credit agreement dated as of
September 2000, between Genuity, J.P. Morgan Chase Bank, as
Agent and lender, and eight other lending banks.  Deutsche Bank
has been a lender at all times under the Bank Facility.

The Bank Facility documentation was developed from and is
similar to a prior credit facility that Chase had arranged for
GTE, a much larger, investment grade company.  As a result, the
Bank Facility is an unsecured credit facility with very few
covenants and conditions to draws on the line of credit.  The
Banks insisted on one provision in the Bank Facility that was
different from the prior credit they had extended to GTE -- it
would be an event of default if, at any time, Verizon was no
longer in a position to reacquire Genuity.

On September 24, 2001, Mr. McCarthy relates that Genuity and the
Banks amended the financing structure for Genuity.  The Bank
Facility was amended to give Genuity the ability to have Chase
issue letters of credit as part of the overall $2,000,000,000
commitment.  The other Bank Syndicate members committed to fund
their pro rata shares in the event that the letter of credit was
ever drawn.  In addition, a letter of credit for $1,150,000,000
was immediately issued as credit support for a Genuity bond
financing.  This left $850,000,000 of credit available under the
Bank Facility.

On July 21, 2002, the Genuity Board voted to draw the remaining
$850,000,000 available under the Bank Facility.  Genuity
officers made the draw request to the Banks the next day, July
22, 2002. By July 23, all but one of the Banks had funded its
committed share of the draw request.  The remaining bank,
Deutsche Bank, wrongfully refused to fund its $127,500,000 share
of that draw request, and Genuity commenced a civil action for
damages against Deutsche Bank.

Following the Petition Date, Mr. McCarthy tells the Court that
the Genuity/Chase-Backed Bonds went into default.  The letter of
credit providing credit support for those bonds was drawn, and
the Bank Syndicate was requested to fund Chase for their pro
rata shares of the letter of credit draw.  Deutsche Bank did
fund that draw, its share being $172,500,000.

In deciding that the DB Settlement is in the best interests of
their estates, the Debtors considered two major issues:

    -- whether there might a defense of set-off or recoupment
       available to Deutsche Bank; and

    -- what creditors will benefit from this settlement as a
       practical matter.

The Debtors have not discounted their chances of success on
their case, which at the present time they believe to be
relatively strong.  Because Deutsche Bank is a major financial
institution, the Debtors have not given any discount for lack of
collectibility on the up to $127,500,000 potential judgment.

Mr. McCarthy admits that the Debtors are concerned of the
potential defenses of set-off and recoupment.  Section 553 of
the Bankruptcy Code provides that the Bankruptcy Code does no
affect any rights of a creditor to set off prepetition
obligations. These set-offs and recoupments are, of course,
equitable matters for which the Bankruptcy Court retains
discretion to grant or deny.  E.g., Scherling v. Hellman Elec.
Corp. (In re Westchester Structures, Inc.), 181 B.R. 730, 739
(Bankr. S.D.N.Y. 1995).

Deutsche Bank asserts these possible set-offs:

    -- if Genuity succeeds in its failure-to-fund claims, then
       Deutsche Bank would receive an unsecured claim in these
       cases in the amount of the recovery.  Deutsche Bank then
       asserts that those amounts would be set off, so that
       Deutsche Bank would in fact have no out-of-pocket
       liability; and

    -- it would have set-off and recoupment of any Genuity
       recovery as against the $172,000,000 claim that Deutsche
       Bank has with respect to amounts funded for the letter of
       credit draw.

Mr. McCarthy believes that Deutsche Bank's arguments for set-off
and recoupment should be rejected on equitable grounds.
However, there is substantial uncertainty as to the Debtors'
success.  The Debtors believe that the chances are relatively
good of defeating set-off as to the $127,500,000 claim that
might arise after recovery of a judgment against Deutsche Bank,
because that claim would arise only after a finding that
Deutsche Bank had acted wrongfully when it failed to fund.
However, the set-off and recoupment defense appear to be
stronger as to the $172,000,000 claim, which is for funds
advanced appropriately under the Bank Facility.  The Debtors
believe that this "good" set-off poses a significant risk to
recovery on their causes of action against Deutsche Bank.

In conjunction with this analysis, the Debtors have also asked
themselves who would benefit from any recovery in the DB Action.
Genuity, the parent company Debtor, is the Borrower under the
Bank Facility.  Therefore, the cause of action for failure to
fund is a claim only of the parent Debtor.  To the Debtors'
knowledge, the vast majority of claims at the parent --
essentially the only claims, because they dwarf all others --
are claims of the Bank Syndicate and claims of Verizon under its
credit facility with Genuity.  These claims total over
$3,000,000,000.

The Debtors have concluded is that the members of the Bank
Syndicate would be the only real material beneficiaries of any
recovery in the DB Action.  As this Court is aware, Verizon, in
a separate settlement, has agreed to subordinate its entire
claim at the Genuity level to the Bank Syndicate.  Thus, all
distributions for the bank claims and Verizon would go to the
Bank Syndicate.

The Debtors have determined that they should not take the risks
of losing or reducing the value of a transaction of benefit to
all creditors for the sole benefit of sophisticated parties --
the members of the Bank Syndicate who did fund -- who can defend
their own rights and resolve their own disputes, if any,
directly with Deutsche Bank. (Genuity Bankruptcy News, Issue No.
6; Bankruptcy Creditors' Service, Inc., 609/392-0900)


GLOBAL CROSSING: Wants Court to Approve Alcatel Settlement Deal
---------------------------------------------------------------
Paul M. Basta, Esq., at Weil Gotshal & Manges LLP, in New York,
informs the Court that Alcatel USA, Inc. and Alcatel USA
Marketing, Inc., along with its direct and indirect subsidiaries
supply telecommunications equipment vital to the operation of
the North American portion of Global Crossing Ltd. and its
dentor-affiliates' worldwide fiber-optic telecommunications
network.  Specifically, Alcatel supplies the GX Debtors with
Megahub 600E Tandem Switch products along the North American
portion of the Network and provides maintenance of the
Equipment.  The Equipment (i) receive incoming voice and other
telecommunications data, (ii) determine the destination of data,
and, (iii) based on the destination of the data, determine the
destination path of the data information.

Pursuant to that certain letter agreement dated September 20,
2000 entered into by and between Global Crossing Development Co.
and Alcatel Marketing, GC Development agreed to purchase the
related equipment, subject to certain terms and conditions.

Alcatel asserts that:

    -- title to the equipment provided under the Agreement has
       not been transferred to the GX Debtors; and

    -- the license to use the software that controls the
       operation of the Equipment has not been granted to the GX
       Debtors.

Although the GX Debtors dispute these assertions, absent
settlement or assumption of the Agreement, the GX Debtors cannot
be certain that they hold clear title to the Equipment or that
they have the right to use the Software.

Mr. Basta tells the Court that ownership of the Equipment and
licenses to use the Software are crucial elements of the
Debtors' compliance with the Purchase Agreement.  In the
Purchase Agreement, the Debtors warranted, as a condition of
closing, that the Network would be in good working order.  The
Equipment is currently embedded in portions of the Network and
is essential to the proper functioning of the Network's data
transmission capabilities.  Absent the presence and proper
functioning of the Equipment, the North American portion of the
Network would be inoperable.  Thus, without clear rights and
title to the Equipment and Software, the Debtors' ability to
satisfy a closing condition under the Purchase Agreement may be
jeopardized. Alcatel asserts that the Debtors owe them
$10,600,000 prepetition and $15,500,000 postpetition for
Equipment and maintenance provided.  The Debtors dispute the
existence, amount, extent and priority of Alcatel's claims.
After arm's-length negotiations, the Debtors and Alcatel
executed a settlement agreement to resolve all outstanding
issues.

By this motion, the Debtors ask the Court to approve the
Settlement Agreement to resolve the disputes.  The Debtors
believe that entering into the Settlement Agreement resolves all
claims and issues between the parties.  Thus, the Debtors
believe that approval of their request is significant for their
successful reorganization.

Pursuant to the Settlement Agreement, the parties agreed to:

    -- modify and restate the Agreement and assume it as
       restated;

    -- provide for a schedule of payments to be made by the
       Debtors to Alcatel;

    -- provide for the final resolution of all disputes, claims,
       and issues arising from or relating to the Agreement and
       Alcatel's relationship with the Debtors;

    -- the provision by Alcatel of a warranty on the Equipment
       for 12 months from the Settlement Effective Date;

    -- the transfer of title of the Equipment to the Debtors;

    -- the granting of the Software License to the Debtors; and

    -- the assumption by the Debtors of the Agreement as amended
       by the Settlement Agreement.

In addition, the Debtors agreed to these payments:

    -- $3,000,000 to be paid by Global Crossing North America,
       Inc. to Alcatel Marketing within five business days of
       the Settlement Effective Date; and

    -- $1,000,000 to be paid by GCNA to Alcatel Marketing on the
       Emergence Date.

The salient terms of the Settlement Agreement are:

    A. Global Crossing Parties: Global Crossing Ltd. and all of
       its subsidiaries and affiliates, excluding Asia Global
       Crossing Ltd. and its direct subsidiaries;

    B. AUSA Entities: Alcatel USA and Alcatel Marketing, on
       behalf of its direct and indirect subsidiaries;

    C. Initial Payment: GCNA to pay $3,000,000 to Alcatel
       Marketing within five business days of the Settlement
       Effective Date;

    D. Emergence Payment: GCNA to pay $1,000,000 to Alcatel
       Marketing on the Emergence Date;

    E. Total Cash Consideration: The Initial Payment and the
       Emergence Payment are in full and final settlement of all
       amounts due or to come due under the Agreement and any
       other project, purchase order, agreement or understanding
       arising from or related to the Agreement, except for
       those agreements entered into between any Alcatel Entity
       or any GX Entity subsequent to the Petition Date;

    F. Warranties: Alcatel warrants the Equipment for a period
       of 12 months from the Settlement Effective Date;

    G. Software Licenses: For all software used in conjunction
       with the Equipment, Alcatel grants the Debtors a
       perpetual, royalty-free license;

    H. Indemnity: Alcatel will indemnify the Debtors against any
       claim, action or proceeding brought against the Debtors
       based on a substantive allegation that any Equipment
       infringes any patent, copyright, trade secret or other
       intellectual property right of any third party;

    I. Title: Subject to, and consistent with, the terms and
       conditions of the Settlement Agreement, to the extent not
       previously transferred, Alcatel will take all actions
       required under the Agreement and applicable law to
       effectuate title transfer to the appropriate GX Entity
       for all equipment delivered or otherwise transferred by
       Alcatel to the GX Entities free and clear of liens,
       claims and encumbrances;

    J. Releases: Both parties agree to certain releases with
       respect to the other party and its officers, employees,
       shareholders, agents, representatives, attorneys,
       successors and assigns;

    K. Modifications to Agreement: On and as of the Settlement
       Effective Date, the Agreement is amended and modified and
       is deemed to be restated in its entirety and in effect
       immediately prior to the Settlement Effective Date;

    L. Assumption of Agreement: The Debtors will assume the
       Agreement effective on the Emergence Date;

    M. Assignment of Alcatel Agreements: The Debtors will be
       permitted to assign the Agreement and Alcatel waives any
       right under Section 365 of the Bankruptcy Code with
       respect thereto, except that if the Debtors seek to
       assign the Agreement to a competitor of Alcatel, Alcatel
       is entitled to request from the competitor reasonable
       confidentiality and appropriate restrictions on the use
       of source code, trade secrets and intellectual property
       rights as a condition to assignment; and

    M. Expiration of IXNet Agreement: The parties acknowledge
       that the Network Support Services Agreement dated
       November 1, 1999, as amended, between Alcatel Marketing
       and IXNet Inc. has expired by its terms prior to the
       entry of the Settlement Agreement.  Notwithstanding, any
       warranties or other obligations intended to survive the
       expiration of the IXNet Agreement will in no way be
       released by the Settlement Agreement.

Mr. Basta notes that pursuant to the Settlement Agreement, the
Debtors receive the Warranty, the Software License, clear title
to the Equipment, and release from AUSA of any and all claims
against the Debtors, all at a cost substantially less than that
which the Debtors would incur if they assumed the Agreement
without the benefit of the Settlement Agreement.  In addition,
the Settlement Agreement allows the Debtors to maintain a
positive, ongoing relationship with Alcatel.  This relationship
is very important to the Debtors given the critical nature of
the Equipment supplied by Alcatel and embedded in the North
American portion of the Network.

In addition, the Settlement Agreement:

    -- permits the Debtors to stabilize their business by
       preserving the integrity of the Network's transmission
       capabilities;

    -- provides for a substantial reduction in aggregate cure
       costs; and

    -- lays the foundation for cooperative relationships with
       Alcatel on a going forward basis.

As a result, the Settlement Agreement constitutes an important
element in Global Crossing's ability to emerge successfully from
Chapter 11 and its viability thereafter.

By assuming the Agreement through the Settlement Agreement, the
Debtors, with the payment of negotiated cure costs -- i.e., the
Total Cash Consideration -- will receive the benefit of the
Warranty and the Software License, and will gain clear title to
the Equipment on terms significantly more favorable than would
have been obtained by the assumption of the Agreement absent the
Settlement Agreement.

Mr. Basta insists that the Equipment and Software are essential
for the transmission of data across the North American portions
of the Network.  Indeed, without the Equipment and the Software
required for its operation, the Network's North American
portions would be inoperable, thereby negatively affecting the
Network's value as a whole.  Considering the benefit to the
estates accruing from the assumption of the Agreement as amended
and the reduction in cost to the Debtors through the negotiated
cure amount, the Debtors determined to assume the Agreement
pursuant to the terms of the Settlement Agreement. (Global
Crossing Bankruptcy News, Issue No. 33; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


GMAC COMM'L: S&P Cuts Ratings on 5 Classes to Junk/Low-B Levels
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
classes G, H, and J of GMAC Commercial Mortgage Securities
Inc.'s series 2000-C2. At the same time, the ratings on classes
K and L are lowered and removed from CreditWatch negative. In
addition, the ratings on classes A-1, A-2, B, C, D, E, F, and X
are affirmed.

The lowered ratings primarily reflect the anticipated credit
support erosion upon the disposition of some of the specially
serviced loans. There are five specially serviced loans
comprising $21.75 million, or 3.2% of the pool, all of which are
90-plus days delinquent. In addition to the specially serviced
loans, concerns regarding the servicer's considerable watchlist,
which comprises 30% of the pool balance including a 60-plus day
delinquency, also contributed to the downgrades.

Losses are expected upon the disposition of two specially
serviced loans that are secured by properties single tenanted by
Kmart ('D'). The two loans total $14.6 million (2.2% of the pool
balance). Both Kmart stores are located in Illinois; one is in
Chicago and one is in Aurora. The three other specially serviced
loans total $7.2 million, or 1.1% of the pool balance. The
remaining loans in the pool are current except for a 60-day
delinquent loan of $7.8 million, or 1.0% of the pool balance.
The loan is secured by a 188,981-square-foot retail center
located in Meriden, Conn. and is anchored by an Ames Department
Store, which is dark. The remaining watchlist loans appear due
to low debt service coverage (DSC) and/or low or declining
occupancy. Fourteen watchlist loans, or 11.7% of the pool,
reported DSCs below 1.00x.

As of January 2003, the trust collateral consists of 128
commercial mortgages and a Freddie Mac Multifamily Gold
Participation Certificate. The Freddie Mac PC represents a 100%
beneficial ownership interest in a discrete pool of two cross-
defaulted and cross-collateralized multifamily mortgage loans
secured by five properties located in New Jersey. The trust has
an outstanding balance of $758.9 million. Excluding the Freddie
Mac PC, the master servicer, GMAC Commercial Mortgage, reported
year-end 2001 net cash flow DSC numbers for 92% of the pool.
Based on this information, Standard & Poor's calculated the debt
service coverage ratio (DSCR) for the pool at 1.49x, up from
1.36x at issuance. The DSCR for the top 10 commercial mortgages
(excluding those two commercial mortgages that underlie the
Freddie Mac PC) is 1.45x, versus 1.34x at issuance. The pool has
significant geographic concentrations in California (19.2%), New
Jersey (16.1%), and Texas (5.2%). Significant property type
concentrations include multifamily (30.2%), retail (29.5%),
office (24.1%), and hotels (7.9%).

Based on discussions with the servicer and the special servicer,
Standard & Poor's stressed various loans in the mortgage pool as
part of its analysis. The expected losses and resultant credit
levels adequately support the rating actions.

                        RATINGS LOWERED

              GMAC Commercial Mortgage Securities Inc.
                 Pass-through certs series 2000-C2

                Rating
     Class   To        From          Credit Enhancement (%)
     G       BB        BB+           5.35
     H       BB-       BB            4.59
     J       B+        BB-           3.82

         RATINGS LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE

              GMAC Commercial Mortgage Securities Inc.
                 Pass-through certs series 2000-C2

                Rating
     Class   To        From              Credit Enhancement (%)
     K       B-        B+/Watch Neg      2.68
     L       CCC       B/Watch Neg       2.17

                         RATINGS AFFIRMED

              GMAC Commercial Mortgage Securities Inc.
                Pass-through certs series 2000-C2

     Class     Rating    Credit Enhancement (%)
     A-1       AAA       21.67
     A-2       AAA       21.67
     B         AA        17.59
     C         A         13.89
     D         A-        12.49
     E         BBB       9.94
     F         BBB-      8.67
     X         AAA       N/A


GOLF TRUST: Closes $40M Sale of Golf Club to Eagle Ridge Resort
---------------------------------------------------------------
Golf Trust of America, Inc. (AMEX:GTA), a real estate investment
trust, closed on the sale of Eagle Ridge Golf Club for total
consideration of $40.5 million to Eagle Ridge Resort, LLC, on
January 30, 2003.

The total consideration of $40.5 million includes a promissory
note in the principal amount of $2.5 million. Eagle Ridge Golf
Club has 3.5 golf courses (63-holes of golf) and is located in
Galena, Illinois.

Golf Trust of America, Inc. is a real estate investment trust
engaged in the liquidation of its interests in golf courses in
the United States pursuant to a plan of liquidation approved by
its stockholders. The Company currently owns an interest in
seven properties (11.5 eighteen-hole equivalent golf courses).
Additional information, including an archive of all corporate
press releases, is available over the Company's website at
http://www.golftrust.com

As reported in Troubled Company Reporter's January 6, 2002
edition, Golf Trust of America, Inc., entered into a Second
Amendment to its Second Amended and Restated Credit Agreement
with its senior bank lenders.

The amendment extends the repayment date for all loans
outstanding under the Credit Agreement from December 31, 2002
until June 30, 2003. The current principal balance outstanding
under the Credit Agreement is $69.0 million.

                        *   *   *

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

"On February 25, 2001 our board of directors adopted, and on
May 22, 2001 our common and preferred stockholders approved, a
plan of liquidation for our Company. The events and
considerations leading our board to adopt the plan of
liquidation are summarized in our Proxy Statement dated April 6,
2001, and in our most recent Annual Report on Form 10-K. The
plan of liquidation contemplates the sale of all of our assets
and the payment of (or provision for) our liabilities and
expenses, and authorizes us to establish a reserve to fund our
contingent liabilities. The plan of liquidation gives our board
of directors the power to sell any and all of our assets without
further approval by our stockholders. However, the plan of
liquidation constrains our ability to enter into sale agreements
that provide for gross proceeds below the low end of the range
of gross proceeds that our management estimated would be
received from the sale of such assets absent a fairness opinion,
an appraisal or other evidence satisfactory to our board of
directors that the proposed sale is in the best interest of our
Company and our stockholders.

"At the time we prepared our Proxy Statement soliciting
stockholder approval for the plan of liquidation, we expected
that our liquidation would be completed within 12 to 24 months
from the date of stockholder approval on May 22, 2001. While we
have made significant progress, our ability to complete the plan
of liquidation within this time-frame and within the range of
liquidating distributions per share set forth in our Proxy
Statement is now far less likely, particularly insofar as the
disposition of our lender's interest in the Innisbrook Resort is
concerned. With respect to our dispositions, as of November 8,
2002, we have sold 25 of our 34 properties (stated in 18-hole
equivalents, 31.0 of our 47.0 golf courses). In the aggregate,
the gross sales proceeds of $229.5 million are within the range
originally contemplated by management for those golf courses
during the preparation of our Proxy Statement dated April 6,
2001, which we refer to as the Original Range; however, two of
our properties (2.5 golf courses) that were sold in 2001 were
sold for a combined 1%, or $193,000, less than the low end of
their combined Original Range. The sales prices of the assets
sold in 2002 have been evaluated against Houlihan Lokey Howard &
Zukin Financial Advisors, Inc., or Houlihan Lokey's March 15,
2002, updated range (discussed in further detail below), which
we refer to as the Updated Range. Of the three properties (5.0
golf courses) sold in 2002, one (1.5 golf courses) was below the
low end of the Updated Range by 4%, or $150,000. Nonetheless,
considering the environment in which we and the nation were
operating in at that time, our board determined that the three
transactions closed at prices below the Original Range
(including the one transaction that closed below the Updated
Range) were fair to, and in the best interest of, our Company
and our stockholders.

"The golf industry continues to face declining performance and
increased competition. Two of the economic sectors most affected
by the recession have been the leisure and travel sectors of the
economy. Golf courses, and particularly destination-resort golf
courses, are at the intersection of these sectors. Accordingly,
we believe our business continues to be significantly impacted
by the economic recession. As reported in our most recently
filed Form 10-K, on February 13, 2002, we retained Houlihan
Lokey to advise us on strategic alternatives available to seek
to enhance stockholder value under our plan of liquidation. In
connection with this engagement Houlihan Lokey, reviewed (i) our
corporate strategy; (ii) various possible strategic alternatives
available to us with a view towards determining the best
approach of maximizing stockholder value in the context of our
existing plan of liquidation, and (iii) other strategic
alternatives independent of the plan of liquidation. Houlihan
Lokey's evaluation of Innisbrook valued this asset under two
different scenarios, both of which assumed that we would obtain
a fee simple interest in the asset as a result of successfully
completing a negotiated settlement or foreclosing on our
mortgage interest. Under the first scenario, Houlihan Lokey
analyzed immediate liquidation of the asset, and under the
second scenario, Houlihan Lokey analyzed holding the asset for a
period of approximately 36-months ending not later than December
31, 2005 to seek to regain the financial performance levels
achieved prior to 2001. In a report dated March 15, 2002,
subject to various assumptions, Houlihan Lokey's analysis
concluded that we may realize between $45 million and $50
million for the Innisbrook asset under the first scenario, and
between $60 million and $70 million under the second scenario.

"Following receipt of Houlihan Lokey's letter on March 15, 2002,
and after consideration of other relevant facts and
circumstances then available to us, our board of directors
unanimously voted to proceed with our plan of liquidation
without modification. We currently expect that liquidating
distributions to our common stockholders will not begin until we
sell our interest in the Innisbrook Resort, which might not
occur until late 2005. All of our other assets were valued and
are recorded on our books at their estimated immediate
liquidation value and are being marketed for immediate sale.

"As of November 8, 2002, we owed approximately $70.7 million
under our credit agreement, which matures on December 31, 2002.
We are currently seeking to obtain our lenders' consent to
further extend the term of our credit agreement before it
matures. If our lenders do not consent to our request for a
further extension and we are not able to secure refinancing
through another source, we might be compelled to sell assets at
further reduced prices in order to repay our debt in a timely
manner. We recently obtained a preliminary indication of the
lenders' willingness to extend the term of our credit facility
until June 30, 2003."


HAYES LEMMERZ: Seeks to Pay Exit Financing Facility Expenses
------------------------------------------------------------
Hayes Lemmerz International, Inc., and its debtor-affiliates
seek the Court's authority to pay up to $1,600,000 in expenses
that they may determine, in their sole discretion, are
reasonable and necessary with respect to due diligence to be
conducted by certain prospective lenders, or certain third
parties as the Debtors may designate on the lenders' behalf,
with respect to a potential exit financing facility.

Anthony W. Clark, Esq., at Skadden Arps Slate Meagher & Flom
LLP, in Wilmington, Delaware, tells the Court that to be in a
position to receive a commitment for exit financing prior to the
Confirmation Hearing, the Debtors began soliciting interest from
prospective lenders with respect to a potential exit financing
facility prior to filing the Plan and Disclosure Statement.  The
Debtors received responses and initial proposals from eight
lenders interested in providing exit financing and, to assure
that they continue to have several options available, have
determined to continue negotiations with several of these
lenders.  The Debtors have requested that the Remaining Lenders
submit refined proposals by February 15, 2003, after conducting
initial due diligence that will not be reimbursed by the
Debtors.

Mr. Clark relates that the Debtors have advised the Remaining
Lenders that after receiving the Refined Proposals, the Debtors
will evaluate these proposals and continue further negotiations
only with the lenders submitting the two most favorable
proposals, as determined in the Debtors' sole discretion.
Moreover, the Debtors have informed the Remaining Lenders that
the Debtors will require firm commitment letters from both of
the Potential Lenders prior to the date of the Confirmation
Hearing.

Each of the Remaining Lenders have agreed to the process,
provided that, as is typical in the process of obtaining exit
financing, the Debtors will seek and obtain Court authority to
pay certain of the Potential Lenders' expenses, and certain of
the expenses of third parties utilized by the Potential Lenders,
in conducting diligence as will be necessary for the Potential
Lenders to issue firm commitments for exit financing.  Although
they certainly would prefer to refrain from paying any expenses,
the Debtors have evaluated the likely effects of refusing to pay
these expenses and have determined that their agreement to pay
certain limited due diligence expenses is warranted.

According to Mr. Clark, the Debtors' overall business enterprise
includes operations not only in the United States but also
significant operations in Europe as well as other parts of the
world.  To accommodate their financing needs around the world
and facilitate intercompany cash flows, the Debtors are
interested in, and have requested that the Refined Proposals
include, the option of a multi-national, multi-currency
financing facility for the Reorganized Debtors' overall
enterprise, as an alternative to simply a U.S. facility.
Notwithstanding the due diligence the Debtors expect the
Remaining Lenders to conduct over the next few weeks, the
Debtors believe that the Refined Proposals likely may
contain additional due diligence requirements and contingencies
and that the two Potential Lenders ultimately will be required
to undertake significant time-consuming, intensive and costly
additional due diligence in Europe, in addition to that
otherwise required in the United States, after submitting the
Refined Proposals.  This due diligence goes beyond that
generally involved in typical domestic exit financing
facilities.

Without the agreement of the Debtors at this point in time to
assist in defraying at least a portion of the expenses involved
in the heightened due diligence almost certainly required of the
final two Potential Lenders, Mr. Clark is concerned that certain
or all of the Remaining Lenders may decide to remove themselves
from the process established by the Debtors, which notably
requires the Remaining Lenders to conduct extensive un-
reimbursed due diligence prior to issuing the Refined Proposals.
To the extent that any of the Remaining Lenders remove
themselves from the process, the level of competition between
the Remaining Lenders will certainly decrease, the likelihood of
more burdensome financing terms for the Reorganized Debtors will
increase, and the Debtors ultimately may lose the opportunity
for a multi-national facility.

Mr. Clark adds that the Debtors are very concerned that
declining to pay at least certain due diligence expenses
ultimately may delay their ability to obtain a firm commitment
for exit financing and, therefore, their chances of confirming
the Proposed Plan, quick and successful closing an exit
facility, and emerging from Chapter 11 in a time frame that is
acceptable to the Debtors.  The Confirmation Hearing in these
cases is scheduled for April 9, 2003.  Prior to that date, the
Debtors require a commitment for exit financing that has few
contingencies so that the Debtors may proceed with the
Confirmation Hearing and then consummate the Proposed Plan as
quickly as possible.  If the Debtors do not assist the Potential
Lenders in reducing due diligence costs, at the very least, the
Potential Lenders will seek to minimize the expenses they incur
by utilizing as few people as possible to undertake their due
diligence efforts, which will have the natural consequence of
significantly delaying the date by which the Debtors receive any
firm commitments for potential exit facilities.  The Debtors
cannot tolerate any delay.

Moreover, even if the Potential Lenders were able to submit
commitment letters on a timely basis without assistance from the
Debtors, Mr. Clark believes that it is very likely that any
resulting commitment would include numerous contingencies and
related fees, which could delay confirmation of the Proposed
Plan until any conditions have been satisfied, and almost
certainly would delay the date by which the Debtors would be
able to consummate the proposed financing facility and emerge
from Chapter 11.  The Debtors believe that paying certain
reasonable due diligence expenses of the Potential Lenders will
allow these lenders to:

    -- timely complete the due diligence process;

    -- limit the number of contingencies and fees included in
       any commitments the Debtors may receive; and

    -- reduce the likelihood of unexpected changes in terms,
       particularly after the Confirmation Hearing, due to the
       discovery of facts not otherwise known to the Potential
       Lenders prior to that time.

Simply stated, the Debtors want to limit the universe of
potential variables with respect to exit financing by providing
the best opportunity for the Potential Lenders to fully conduct
their due diligence prior to the Confirmation Hearing.

Accordingly, to encourage the Remaining Lenders to undertake the
due diligence necessary to deliver Refined Proposals, and the
Potential Lenders to deliver firm commitments for financing,
without contingencies and on a timely basis, the Debtors, after
consulting with their advisors, have determined that the payment
of certain reasonable and limited due diligence expenses is
warranted.  However, to minimize the due diligence expenses they
and the Potential Lenders may incur, the Debtors are seeking to
undertake certain cost containment measures.  Specifically, the
Debtors are seeking authority to pay up to $600,000 only to the
Potential Lenders for due diligence expenses incurred that the
Debtors determine, in their sole discretion, are reasonable and
necessary.  Mr. Clark points out that this amount represents
less than 0.1% of the amount of the exit facility requested by
the Debtors and will be shared by two lenders.  The Debtors will
work closely with the Potential Lenders during the due diligence
process and scrutinize the expenses proposed by each Potential
Lender in an effort to contain due diligence expenses for the
Potential Lenders below the amount for which authority is
requested.

Also, to prevent duplication of effort and expenses, Mr. Clark
relates that the Debtors will require the Potential Lenders,
where possible, to share the services and work product of third
parties, including appraisers and collateral agents, designated
by the Debtors that the Lenders otherwise would retain
separately and ask the Debtors to finance.  The Remaining
Lenders have advised the Debtors that, to the extent they are
chosen as Potential Lenders, they will require the services of
third parties to appraise the value of the Debtors' tangible
assets and conduct collateral analyses to support the
calculation of appropriate borrowing levels and a borrowing base
formula for the Reorganized Debtors.  Rather than allow the
Potential Lenders to retain and incur the costs of these
professionals separately, the Debtors propose to retain these
professionals to conduct the necessary services and prepare
work-product that would be shared by the Potential Lenders, and
to the extent useful, by the Debtors.

Mr. Clark informs the Court that the Debtors expect to use
professionals that either have already been retained or which
will be retained as ordinary course professionals in these
cases. To do so, however, the Debtors require a modification of
the Ordinary Course Professionals Order, which currently limits
the amount of compensation payable to any Ordinary Course
Professional to $30,000 during any month and $300,000 for the
duration of these cases.  It is very likely that certain
Ordinary Course Professionals utilized by the Debtors to render
services related to a potential exit financing facility will
exceed the caps in the Ordinary Course Professionals Order due
to the significant amount of services the Debtors will require
in a rather short period of time.

Accordingly, the Debtors seek the Court's authority to pay,
without violating the Ordinary Course Professionals Order, up to
$1,000,000 of compensation and expenses to those professionals
that provide services to the Debtors in support of the Lenders'
due diligence efforts.  This compensation and expenses will be
in addition to the amounts the Debtors otherwise pay to the
professionals for the services currently being rendered to the
Debtors in the ordinary course of business.  The Debtors will
apprise the Creditors' Committee, the agent for their secured
lenders and the United States Trustee of the professionals the
Debtors expect to utilize and the approximate estimated amounts
the Debtors expect to pay each professional.  Moreover, the
Debtors will continue to file with the Court the reports
required by the Ordinary Course Professionals Order with respect
to the amount of compensation paid to Ordinary Course
Professionals. (Hayes Lemmerz Bankruptcy News, Issue No. 25;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


INTEGRATED HEALTH: Asks Court to Okay Employee Severance Program
----------------------------------------------------------------
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor LLP,
in Wilmington, Delaware, tells the Court that at the time the
Severance Plan Motion was filed, Integrated Health Services,
Inc., and its debtor-affiliates faced a high level of anxiety
and declining morale among the Eligible Employees and
believed that the Severance Plan would help to neutralize the
threat of mass resignations.  However, with respect to the
Symphony division, it was the Debtors' view that the then stable
employee morale level could be maintained without a severance
plan, subject to reconsideration at a later time.  Accordingly,
the Severance Plan Motion indicated that the Debtors would seek
to include additional employees in the Severance Plan by a
subsequent motion if it became necessary to do so in the future.

According to Mr. Brady, the Debtors have been engaged in an
extensive marketing process for the sale of the Long Term Care
and Symphony divisions, which led the execution of the Purchase
Agreement and the Court-approved bidding process that is
currently underway, as well as the filing of the Plan and
Disclosure Statement.  Although the Debtors currently
contemplate the occurrence of a confirmation hearing in March
2003, that goal is subject to various contingencies, including
the successful approval of the Purchase Agreement or other bid
on January 29, 2003, as well as approval of the Disclosure
Statement.  The Debtors believe that the degree of anxiety and
uncertainty among Symphony personnel has reached a level that
could lead to resignations and threaten the value of the
Symphony business before the Plan can be consummated.  In
addition, the failure to provide severance benefits to Symphony
personnel has spawned a growing perception of unfairness vis-a-
vis the Long Term Care personnel, which is further exacerbating
morale issues.  Therefore, the Debtors believe that existing
circumstances have rendered it necessary and appropriate to
expand the Severance Plan to include Symphony personnel.

By this Motion, the Debtors seek authority under Sections 105(a)
and 363(b)(1) of the Bankruptcy Code to modify the Severance
Plan, and in particular, the definition of Eligible Employees,
to include 152 non-senior management employees of Symphony who
may be terminated without cause.  Consistent with the existing
Severance Plan, the Debtors further request that any severance
payments made to Symphony employees be afforded administrative
expense status pursuant to Section 503 of the Bankruptcy Code.

Mr. Brady insists that the Debtors' employees are, and have
always been, an essential component of their reorganization
effort, with the requisite experience and knowledge of
operations necessary to maintain the Debtors' performance and
profitability.  The Debtors have used the Severance Plan as a
successful tool in retaining employees throughout these Chapter
11 cases.  The Debtors believe that extending the Severance Plan
to include Symphony personnel has become necessary to address
escalating concerns and frustration that have resulted from the
uncertainty of the reorganization process and the perception of
unfairness caused by failure to provide Symphony personnel with
severance benefits given to similarly-situated Long Term Care
and corporate employees.

"The modification of the Severance Plan will reduce the
likelihood of resignations and provide greater comfort to
Symphony employees who provide integral management and other
necessary services," Mr. Brady contends.  "The Severance Plan is
an important factor which should assist the Debtors in
maintaining the necessary level for its work force though the
conclusion of the sale and reorganization process."

Mr. Brady reports that the proposed modification of the
Severance Plan would add to the definition of Eligible Employees
152 Symphony employees, including employees falling in the
"Management," "Supervising Professional" and "All Other"
categories.  Although no reduction in workforce is being
contemplated at this time, the Debtors note that the average
severance term for the 152 Symphony employees is currently:

    -- 6.7 months for employees in the Management category;

    -- 3.3 months for employees in the Supervising Professional
       category; and

    -- 1.6 months for employees in the All Other category.

If these 152 employees were terminated without cause, there
would be $5,956,000 in annual wage savings to the Debtors and
$1,125,000 in severance cost.

The Debtors submit that the requested modification of the
Severance Plan represents a sound exercise of the Debtors'
business judgment and is essential to preserve and maximize the
value of their assets through the sale and reorganization
process. The Debtors have determined that the costs associated
with the modification are more than justified by the benefits
that are expected to be realized by boosting morale and
discouraging resignations among Symphony employees.

Since extension of the Severance Plan is needed to retain
employees who are necessary for the preservation of the Debtors'
estates, Mr. Brady asserts that the payment rights of the
employees under the Severance Plan are "actual, necessary costs
and expenses of preserving the Debtors' estates," and should be
accorded administrative expense priority under Section
503(b)(1)(a) of the Bankruptcy Code to the extent that they
become due under the Severance Plan. (Integrated Health
Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


ITALY FUND: Plan of Liquidation Effective on February 13, 2003
--------------------------------------------------------------
The Italy Fund Inc., listed on the New York Stock Exchange under
the symbol "ITA", announced that, pursuant to the Plan of
Liquidation and Dissolution approved by shareholders at last
week's Annual Meeting of Shareholders, February 13, 2003 will be
the effective date of the Plan and the transfer agent will close
the books of ITA on that date. The proportionate interests of
shareholders in the assets of the Fund will be fixed on the
basis of their respective shareholdings at the close of business
on February 13, 2003.

Prior to the opening of business on February 14, 2003, ITA will
delist from the New York Stock Exchange and cease trading.

The distribution of the Fund's assets will be made in one or
more cash payments in complete cancellation of all of the
outstanding shares of the Fund on a date or dates to be
determined by the Board of Directors.

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

For more information, please call Client Services as 1-888-735-
6507.


KEY3MEDIA: Commences Pre-Negotiated Chapter 11 Case in Delaware
---------------------------------------------------------------
Key3Media Group, Inc. (OTCBB: KMED), the world's leading
producer of information technology tradeshows and conferences,
filed for chapter 11 protection in Wilmington yesterday and
delivered a pre-negotiated plan of reorganization (but no
disclosure statement) outlining a "comprehensive
recapitalization plan designed to provide a strong financial
foundation for the Company."

The plan is backed by investment funds managed by Thomas Weisel
Capital Partners ("TWCP").  TWCP holds claims against Key3Media
for approximately:

     $56,000,000 on account of bank debt -- approximately 68% of
                 the $81,768,986 total outstanting under the
                 Prepetition Secured Credit Facility; and

    $114,000,000 on account of bond debt -- approximately 38% of
                 the 11.25% senior subordinated notes due 2011.
    ------------
    $170,000,000 TWCP's Claims against Key3Media
    ============

Through the recapitalization, Key3Media will reduce its total
debt by 87% from approximately $372 million to $50 million and
eliminate all of its existing preferred stock and common equity.
Annual interest expense will be cut from approximately $38
million to $3.4 million.

             TWCP Providing $30 Million DIP Facility

Through June 30, 2003, at a 7% interest rate and with fees
totaling nearly $7,000,000, TWCP has agreed to provide Key3Media
$30 million in debtor-in-possession financing.  Key3Media will
ask Judge Walrath to approve borrowing up to $12.5 on an interim
basis.  TWCP has also agreed to fund the Company going forward
on completion of the reorganization.

                  TWCP Proposes to Take Control

Under the proposed reorganization plan, TWCP will own
approximately 99% of the recapitalized company, and the general
unsecured creditors and bondholders will initially own the
remaining 1% of the equity, with the right to buy up to an
additional 10% of the equity. Key3Media will implement the
proposed recapitalization through a plan of reorganization filed
today in the United States Bankruptcy Court for the District of
Delaware. The Company aims to emerge from Chapter 11 within 90
days of filing. During the reorganization proceedings, Key3Media
will operate its business in the ordinary course.

The proposed plan of reorganization will enable the Company to
operate its business with no interruption. Current management
will remain in place during the recapitalization, and with the
support of TWCP, will move forward with an array of plans to
expand programs and services to its clients.

"This comprehensive plan is designed to put Key3Media back on
track to long-term financial health while giving us the capital
strength and operating flexibility we need to hold all of our
scheduled tradeshows and conferences. Our clients will now be
able to sign up for NetWorld+Interop, COMDEX and our other shows
with full confidence," said Fredric D. Rosen, Chairman and CEO.
"After a thorough review of our strategic options, we believe
this is by far the best alternative for all of our
constituencies.  Thomas Weisel Capital Partners is an
accomplished investor with extensive experience in the
technology sector, and with its support, this plan will enable
Key3Media to serve its customers, build on its leadership
position, and realize its full potential when our markets
recover."

Lawrence B. Sorrel, Managing Partner of Thomas Weisel Capital
Partners and Director of Private Equity at Thomas Weisel
Partners, stated, "With a strong portfolio of brands, a large
high-caliber client base, and a leading market position,
Key3Media is a fundamentally sound company that has been hurt by
its capital structure and the declines in the IT and networking
industries. We intend to work closely with the Board, management
and Key3Media's talented workforce to help the Company execute a
successful turnaround, reestablish a strong capital structure
and position itself for long-term growth in the global IT
tradeshow and conference market, a market with great potential
in the years ahead."

Thomas Weisel Capital Partners is the merchant banking affiliate
of investment firm Thomas Weisel Partners LLC.  TWCP's flagship
fund, Thomas Weisel Capital Partners, L.P., is a $1.3 billion
private equity fund with backing from leading institutional
investors and a current portfolio of over 30 companies primarily
focused in the growth sectors of the economy, including media
and communications, information technology and healthcare.  In
total, the private equity business of Thomas Weisel Partners has
over $2 billion in assets under management across its merchant
banking, venture capital and fund of funds activities and a team
of 50 professionals based in San Francisco, New York, Boston,
Menlo Park and London.

                       Key3Media's Business

Headquartered in Los Angeles, Key3Media Group, Inc. (OTCBB:KMED)
is the world's leading producer of information technology
tradeshows and conferences.  Key3Media generates revenue by
renting space to exhibitors, receiving commissions from third-
parties who provide services to exhibitors, charging fees for
conferences, and selling advertising and sponsorships.

In 2002, Key3Media produced 26 owned and operated events that
drew more than 530,000 participants (about half of prior year
traffic counts).  Additionally, the Company licenses its brands
to foreign tradeshow operators for 9 events held outside the
United States.

Key3Media's 300 employees pull together:

   * the IT industry's largest exhibitions:

        -- the annual COMDEX show in Las Vegas;

        -- 15 other COMDEX shows in 13 countries; and

        -- NetWorld+Interop; and

   * other highly focused events like Seybold Seminars,
     SOFTBANK Forums and JavaOne, featuring renowned
     educational programs, custom seminars and specialized
     vendor marketing programs.

COMDEX shows account for 26% of Key3Media's annual revenues and
NetWorld+Interop accounts for another 40% of annual revenue.

Key3Media is an August 2000 spin-off from Ziff-Davis, Inc.
Triax Holdings Ltd. bought SOFTBANK's now-worthless 54% equity
stake in Key3Media on Dec. 20, 2002.

Key3Media stressed that, following the Petition Date, all
tradeshows and conferences will take place as scheduled,
including:

        Event             Location            Dates
        -----             --------            -----
     COMDEX Fall        Las Vegas        November 15-20, 2003
     NetWorld+Interop   Las Vegas        April 27-May 2, 2003
     JavaOne            San Francisco    June 9-13, 2003
     Seybold Seminars   San Francisco    September 22-25, 2003

For additional information about Key3Media tradeshow and
conference schedule and business, see http://www.key3media.com

                  Key3Media's Road to Chapter 11

Key3Media attributes its problems to (i) declines in travel
following September 11, (ii) general weakening in the overall
economy and (iii) its highly leveraged balance sheet.
On January 15, 2003, Key3Media didn't pay the delinquent semi-
annual interest payment due on $300,000,000 of 11.25% senior
subordinated notes due 2011.  This triggered the noteholders'
right to declare an event of default and triggered a cross-
default under the Company's senior bank revolving credit
facility with -- according to data obtained from
http://www.LoanDataSource.com-- a consortium of lenders
comprised of Morgan Stanley Senior Funding, Inc., The Bank of
New York, UBS AG, Stamford Branch, Fleet National Bank, U.S.
Bank National Association, Wells Fargo Bank, N.A., and BNP
Paribas before TWCP's purchase of more than two-thirds of the
Lenders' commitments.

As previously reported in the Troubled Company Reporter,
Key3Media warned creditors in August that "because of the
continuing difficult operating environment, it is likely that
the Company will not be in compliance with these financial
covenants at the end of the third quarter ending September 30,
2002," as the Company initiated talks with its bank lenders and
hired Houlihan, Lokey, Howard & Zukin to explore strategic
alternatives.


KEY3MEDIA GROUP: Case Summary & Largest Unsecured Creditors
-----------------------------------------------------------
Lead Debtor: Key3Media Group, Inc.
             5700 Wilshire Blvd.
             Los Angeles, California 90036

Bankruptcy Case No.: 03-10323

Debtor affiliates filing separate chapter 11 petitions:

     Entity                                     Case No.
     ------                                     --------
     Key3Media Events, Inc.                     03-10324
     Key3Media VON Events, Inc.                 03-10325
     Key3Media BCR Events, Inc.                 03-10326
     Key3Media Advertising Inc.                 03-10327
     Key3Media BioSec Corp.                     03-10328

Type of Business: The Debtor's business consists of the
                  production, management and promotion of a
                  portfolio of trade shows, conferences and
                  other events for the information technology
                  industry.

Chapter 11 Petition Date: February 3, 2003

Court: District of Delaware

Judge: Jerry W. Venters

Debtors' Counsel: John Henry Knight, Esq.
                  Rebecca Lee Scalio, Esq.
                  Richards, Layton & Finger, P.A.
                  One Rodney Square
                  P.O. BOX 551
                  Wilmington, DE 19899
                  Tel: 302-651-7700
                  Fax: 302-651-7701

Total Assets: $241,202,000

Total Debts: $441,033,000

A. Key3Media Group's 7 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Bank of New York            Sr. Sub. Note         $290,000,000
(as Indenture Trustee)
William Powers
101 Barclay St.
NY, NY 10286

Morgan Stanley              Letter of Credit        $1,768,986
Min Lo
1633 Broadway, 25th Floor
New York, NY 10019

The Bank of New York        Interest - Sr. Sub.    $16,312,500
(as Indenture Trustee)      Note
William Powers
101 Barclay St.
NY, NY 10286

Morgan Stanley              Interest - $50 Million    $503,755
Min Lo                      revolver
1633 Broadway, 25th Floor
New York, NY 10019

Morgan Stanley              Interest - $30 Million    $355,625
Min Lo                      revolver
1633 Broadway, 25th Floor
New York, NY 10019

Morgan Stanley              Commitment Fees           $349,979
Min Lo
1633 Broadway, 25th Floor
New York, NY 10019

Morgan Stanley              Interest - Standby         $15,331
                            Letter of Credit

B. Key3Media Events' 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Bank of New York            Sr. Sub. Note         $290,000,000
(as Indenture Trustee)
William Powers
101 Barclay St.
NY, NY 10286

GES Exposition Services,    Trade                   $1,646,413
Inc.
950 Grier Dr.
Las Vegas, NV 89119

Las Vegas Convention Center Trade                   $1,176,250
3150 Paradise Road
Las Vegas, NV 89109

Champion Exposition         Trade                     $839,279
Services
264 Bodwell Street
Avon, MA 02322

Audio Visual Headquarters   Trade                     $509,887
2300 Gladwick St.
Rancho Dominguez, CA 90220

Sands Expo & Convention     Trade                     $495,000
Center
201 E. Sands Ave.
Las Vegas, NV 89109

Quad Graphics               Trade                     $246,057

Equity Office Properties    Trade                     $173,723

American Airlines           Trade                     $116,936

Casual Male Retail Group    Trade                      $72,319

Wall Street Journal         Trade                      $71,163

Exhibit Surveys             Trade                      $63,754

Bluehill Advisors           Trade                      $61,754

Business Week               Trade                      $60,000

Xpedite Systems, Inc.       Trade                      $50,375

Decipher                    Trade                      $47,850

Georgia World Congress      Trade                      $40,905
Center

Dupree Security Group       Trade                      $40,031

Hilton                      Trade                      $29,450

Tactical Telesolutions,     Trade                      $25,750
Inc.

C. Key3Media VON Events' 5 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Bank of New York            Sr. Sub. Note         $290,000,000
(as Indenture Trustee)
William Powers
101 Barclay St.
NY, NY 10286

Cobb Galleria Center        Trade                      $82,812

Pulver.com Productions      Trade                      $38,508

JW Marriott Hotel           Trade                      $29,870

IMHO Consulting Group       Trade                       $1,154

D. Key3Media BCR Events' 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Bank of New York            Sr. Sub. Note         $290,000,000
(as Indenture Trustee)
William Powers
101 Barclay St.
NY, NY 10286

Quad Graphics               Trade                      $44,231

Quebecor Printing           Trade                      $25,316

American Printing           Trade                      $22,478

Inneroworkings LLC          Trade                      $14,596

USA Hosts                   Trade                      $10,500

New York Helmsley           Trade                       $8,479

World Distribution Services Trade                       $8,385

Wyndham Gardens Hotels      Trade                       $7,351

Visual West                 Trade                       $6,490

The Expo Group              Trade                       $5,682

Accountemps                 Trade                       $5,442

Minolta Business Solutions  Trade                       $4,873

Crowne Plaza San Francisco  Trade                       $4,846

Four Points Barcelo Hotel   Trade                       $4,677

Holiday Inn Mart Plaza      Trade                       $4,262

Radisson Hotel              Trade                       $3,743

Crowne Plaza Irvine         Trade                       $3,466

Conference Calls            Trade                       $2,524

Adspec                      Trade                       $2,449

E. Key3Media Advertising's Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Bank of New York            Sr. Sub. Note         $290,000,000
(as Indenture Trustee)
William Powers
101 Barclay St.
NY, NY 10286

F. Key3Media BioSec's 3 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Bank of New York            Sr. Sub. Note         $290,000,000
(as Indenture Trustee)
William Powers
101 Barclay St.
NY, NY 10286

Morgan Stanley              Guarantee              $50,000,000
Min Lo
1633 Broadway
25th Floor
NY,NY 10019

Morgan Stanley              Guarantee              $30,000,000
Min Lo
1633 Broadway
25th Floor
NY, NY 10019


KMART: Abacus Advisors Group Hired as Store Closing Agent
---------------------------------------------------------
To facilitate the Store Closing Sales, Kmart Corporation and its
debtor-affiliates convinced the Court to approve an operating
agreement with Abacus Advisors Group, LLC.  Abacus and certain
other store closing consulting firms designated by Abacus will
participate as the Debtors' Store Closing Agent, pursuant to the
Operating Agreement.

Mark A. McDermott, Esq., at Skadden, Arps, Slate, Meagher &
Flom, contends that allowing a Store Closing Agent to sell
inventory will enable the Debtors to maximize their returns,
while minimizing the distraction that the sale efforts can cause
at this critical stage of their reorganization.  It is also more
cost-effective for the Store Closing Agent, with its substantial
experience, to conduct these sales, rather than the Debtors.

The Debtors believe that Abacus is well-qualified to serve as
Store Closing Agent and otherwise manage the proposed store
closing program.  Mr. McDermott relates that Abacus' principal,
Alan Cohen, has extensive experience and knowledge in retail.
Mr. Cohen has been associated with numerous Chapter 11 cases of
large retailers.  Most recently, Mr. Cohen and Abacus were
retained to provide similar services in the bankruptcies of Ames
Department Stores, Inc., Service Merchandise Company, Inc.,
Montgomery Ward, LLC and Bradlees Stores, Inc.  Mr. Cohen has
also served as a crisis manager and Chapter 11 operating trustee
in several Chapter 11 cases.  Abacus also has served as the
Debtors' inventory consultant pursuant to the Court's March 6,
2002 Order.  Abacus monitored the conduct of the Debtors' 2002
store closing program.  Thus, Abacus has a great deal of
familiarity with the Debtors, their inventory and the conduct of
closings of the Debtors' stores.

According to Mr. McDermott, the primary difference between the
structure of this Operating Agreement and the agreement approved
by the Court last year is that, last year, the store closing
agent guaranteed a minimum recovery from the store closing
sales. That time, the store closing agent undertook substantial
risk, and the Debtors compensated for the risk by allowing the
store closing agent to recover a sizeable success fee in the
event of a superior recovery, which was materialized.  This
year, the Debtors propose to pay a base fee plus certain
incentives in the event of a successful sale.  Because the Store
Closing Agent is not guaranteeing any particular performance,
less compensation is warranted.

"Given the recent experience of last year's store closing sales,
the Debtors' business judgment supports dispensing with the
guarantee of performance in favor of a more cost-efficient
compensation arrangement," Mr. McDermott says.  Mr. McDermott
explains that the fee-based arrangement permits the Debtors to
minimize expenses, while the incentive compensation motivates
the Store Closing Agent to maximize proceeds from the Store
Closing Sales.

The salient terms of the Operating Agreement include:

A. Sale Commencement

    The Store Closing Sale will commence on January 30, 2003.
    The Store Closing Sale will be conducted as a store closing
    sale, as that term is generally understood, and may be
    signed, bannered and advertised as such.  Abacus will
    provide field supervisors to the affected stores to
    implement the Store Closing Sale consistent with the terms
    of the Operating Agreement and other Court orders.

B. Scope of Services

    Abacus will manage the Store Closing Sale at the affected
    stores.  Abacus will:

    (a) determine advertising, pricing of merchandise, staffing
        levels, bonus and incentive programs for the Debtors'
        employees utilized for the Store Closing Sale;

    (b) oversee the display of the merchandise;

    (c) coordinate accounting functions for the Store Closing
        Sale;

    (d) manage the transfer of inventory to the stores;

    (e) manage and control loss prevention; and

    (f) determine the sale termination date for any location.

C. Term

    Abacus will complete the sale at each store and vacate that
    store in broom-clean condition by no later than April 14,
    2003, unless the sale is extended by the Debtors' and
    Abacus' mutual written agreement.

D. Merchandise

    The Store Closing Sale will include all finished merchandise
    salable in the ordinary course at the affected stores as of
    January 30, 2003, as well as certain of the Debtors' on-
    order inventory.  Certain exclusions are specified in the
    Operating Agreement.  The Debtors and Abacus may agree to
    augment the Merchandise provided that any additional
    Merchandise will be of the same type and quality of
    Merchandise typically sold at Kmart stores.  The Debtors
    will be entitled to a 10% commission on gross sales of the
    additional Merchandise, subject to a 7.5% reduction, if
    Abacus incurs expenses less than the agreed $1,400,000,000
    expense cap.

E. Expenses

    The Debtors will pay the expenses of conducting the Store
    Closing Sale.

F. Store Closing Agent's Fee

    (a) A $25,000 base fee per store to ensure the successful
        completion of the Store Closing Sales;

    (b) An additional $2,200,000 for each percent recovery in
        excess of 60% of the aggregate retail price of the
        Inventory, up to 62% of the aggregate retail price;

    (c) 5% of the proceeds in excess of 64% but less than 65% of
        the Aggregate Retail Price and 10% of the proceeds in
        excess of 65% but less than 66% of the aggregate retail
        price.

    All incentive compensation will be subject to offset in the
    amount by which actual expenses exceed the expense cap.  The
    Initial Incentive fee plus the Agent's Base Fee will be
    subject to a $12,500,000 cap.

G. Furniture, Fixture & Equipment

    Abacus may sell furniture, fixtures and equipment at the
    Debtors' request, and will receive an agreed commission on
    all the sales.

H. Miscellaneous

    The Operating Agreement contains provisions relating to
    indemnification, risk of loss, insurance and events of
    default other usual and customary provisions for a
    transaction of this nature.  Abacus will work with Debtors
    to address consumer affairs issues, including processing of
    returns and gift certificates. (Kmart Bankruptcy News, Issue
    No. 46; Bankruptcy Creditors' Service, Inc., 609/392-0900)


LAIDLAW: November 2002 Balance Sheet Upside Down by $1 Billion
--------------------------------------------------------------
Laidlaw Inc.'s revenues for the three months ended November 30,
2002 from the Company's Contract Bus Services, Greyhound and
Healthcare Services segments was $1.162 billion, virtually
unchanged from the previous year.  With the exception of
Greyhound, all subsidiaries achieved planned revenues.
Greyhound has continued to suffer from the delayed recovery of
the leisure travel market and shutdown of a subsidiary.

Earnings before interest, taxes, depreciation and amortization
(EBITDA) was $129.8 million (2001: $147.9 million) after
recording an increase in the provision for accident claims of
$30.9 million. Of this amount, $23.0 million relates to prior
year claims. "These provisions have been taken after reviewing
the latest actuarial valuations of the ultimate settlement costs
of outstanding claims," said Kevin Benson, President and CEO of
Laidlaw. "They are in accordance with our policy of providing
for such costs at the higher end of the actuarial range and
reflect the increase in settlements currently being awarded by
the courts. We believe that we have been conservative in
establishing our reserves and do not expect future quarters to
require provisions at these levels".

The Company has also undertaken a review of its safety and
driver training procedures and is satisfied that they are among
the highest in the industry. "Our accident frequency rate has
decreased significantly in the past four years," said Benson.
"It is therefore all the more disappointing that the financial
benefit of this improvement has been negated by ever increasing
claim awards."

                         Segment Results

                      Contract Bus Services

Revenue from the Company's school bus and municipal bus services
was $526.8 million, almost the same as the $527.0 million
achieved in the prior year. However the mix of contracts was
different, as the Company continued to focus on contracts where
the revenue was commensurate with applicable costs and risks.
Lost revenue was replaced with new business, additional routes,
price increases and a small improvement in the value of the
Canadian dollar. As a result EBITDA, before the increased
accident claim provision described above, increased from $117.7
million to $121.8 million.

                           Greyhound

Greyhound's revenue for the three months was $274.4 million
compared to the $284.2 million achieved in the first fiscal
quarter of the previous year. A number of factors affected this
year's results: the slower recovery of the travel services
market; the cessation of operations by a subsidiary; and the
later timing of American Thanksgiving, which caused return
travel to occur in December. Greyhound's EBITDA, prior to the
apportionment of the increased claim reserve, was $7.4 million,
compared to $5.2 million in the prior year.

                      Healthcare Services

The healthcare transportation and emergency management services
subsidiaries achieved revenue of $361.0 million for the quarter
showing satisfactory growth over the $350.6 million in the same
period in 2001. EBITDA also increased from $25.0 million in 2001
to $31.5 million, before the increased claim reserve. This
increase reflects the substantial management effort that has
gone into increasing revenue per trip or visit and controlling
and reducing costs.

"Overall our operating companies performed satisfactorily in the
quarter, with only Greyhound experiencing difficulty in
achieving improvements in revenue," said Benson. "Insurance and
accident claim costs have risen and we will continue our policy
of accounting conservatively for them. These increases are
applicable to the industry as a whole and will not put us at a
competitive disadvantage when bidding new contracts."

                 Update on Chapter 11 Proceedings

As previously reported, the Company and the Pension Benefit
Guaranty Corporation have agreed to resolve the claims of the
PBGC relating to the funding of Greyhound's US defined benefit
pension plans, subject to negotiation and execution of a
definitive agreement. Following this agreement, the Company
mailed the Third Amended Joint Plan of Reorganization and a
confirmation hearing is scheduled for February 27, 2003 in the
United States Bankruptcy Court. With negotiation of the
necessary exit financing well underway, the Company continues to
contemplate that the effective date of reorganization will be
March 31, 2003.

As of November 30, 2002, Laidlaw reported a total shareholders
equity deficit of about $1 billion.


LENNAR CORP: S&P Ups Subordinated Debt Rating to BB+ from BB-
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Lennar Corp. to 'BBB-' from 'BB+'. At the same time,
ratings are raised on approximately $2.185 billion senior debt,
including bank lines, and on $254 million subordinated debt. The
company's outlook is revised to Stable from Positive.

The ratings and outlook acknowledge Lennar's solid market
position, highly profitable operations, successful track record
of integrating acquisitions, and sound financial risk profile.
These credit strengths, coupled with management's discipline
with regard to debt leverage, should enable Lennar to perform
solidly even if housing demand does soften.

Miami, Florida-based Lennar markets homes to first-time, move-up
and active adult buyers. The company, which maintains operations
in 16 states, including California, Florida, and Texas, has been
in business for more than 48 years and has a long track record
of operating successfully through a number of housing cycles.
With $6.8 billion in fiscal 2002 homebuilding revenues (more
than 27,000 units delivered), Lennar is among the largest
homebuilders in the country. Its market position has been
bolstered in recent years by its aggressive expansion efforts,
which included the acquisition of nine builders in 2002 for an
aggregate $600 million. Lennar continues to successfully
integrate these franchises without leveraging its balance sheet.
The company has effectively managed its broadened business, with
fiscal year 2002 performance benefiting from a significant
increase (roughly 15%) in unit deliveries and a moderate (4%)
increase in average selling prices. Lennar's strong homebuilding
gross and operating margins at 24% and 14%, respectively,
compare very favorably with other larger, national homebuilders.

The company's financial position is appropriate for the raised
rating. Leverage at fiscal year ended November 2002 was 42%
debt-to-book capitalization or 28%, net of a sizable level ($731
million) of cash and equivalents. The company does have off-
balance sheet land financing joint ventures, with an estimated
$1.2 billion in total capitalization, which is just less than
half the size of Lennar's current on-balance sheet inventory
position. However, because the leverage for these ventures is
comparable to that of Lennar, even full consolidation results in
only a modest increase in leverage to a still acceptable 49%
debt-to-book capitalization or 38% net of cash. The company does
control just more than half its 158,000-land lot position
through options and joint ventures, the bulk of which are
nonperformance based. Only a modest portion of Lennar's total
options are financed with financial intermediaries, as these
represent just less than 5% of total lots controlled. The
company's debt maturity schedule is very manageable, and
Lennar's weighted average debt maturity (roughly nine years)
appropriately matches its longer land position (approximately
five years controlled).

                         LIQUIDITY

The company's solid cash flow produced homebuilding
EBITDA/interest coverage of 7.1x and homebuilding debt-to-
homebuilding EBITDA of 1.7x, both of which are above average and
supported by a largely fixed-rate debt structure. In addition to
Lennar's strong internal cash flow and substantial cash on hand
($731 million at fiscal year end), the company has access to
$926 million aggregate bank facilities that were fully available
at fiscal year end. Lennar has been a more aggressive issuer of
zero coupon debt than its rated peers, with two issues
outstanding, the first of which ($272 million estimated balance
in July 2003) can be put/called in July 2003. However, given the
strong appreciation of Lennar's stock since initial issuance
(currently $54/share) relative to the July 2003 accreted
conversion price ($45/share), it is probable that this issue
will convert to equity. (Should the conversion not occur,
Lennar could easily meet this maturity with bank line
availability.) The company does not currently pay a meaningful
dividend, and Standard & Poor's estimates that Lennar's existing
homebuilding inventory, which does appear to be carried at
conservative values, can comfortably cover net debt outstanding
by more than 3.7x.

                        OUTLOOK: Stable

Lennar has performed solidly during the past few years. With
substantial internal and external liquidity, a talented
management team, and a strong track record of integrating
acquisitions, this national homebuilder is well positioned to
pursue other acquisitions and to weather any eventual softening
in home buying demand. The ratings are based on the assumption
that Lennar will continue to pursue acquisitions that provide a
clear strategic benefit to the company, while maintaining a
solid financial profile.

                         RAISED RATINGS
                          Lennar Corp.

                                Ratings
                         To              From
Corporate credit         BBB-/Stable     BB+/Positive
$2.185 bil. sr debt      BBB-            BB+
$254.19 mil. sub debt    BB+             BB-


LENNAR CORP: Closes $350M 5.95% 10-Year Senior Debt Offering
------------------------------------------------------------
Lennar Corporation (NYSE: LEN), one of the nation's largest
homebuilders, completed a public offering of $350 million of
5.95% Senior Notes due 2013. The notes were priced to yield
6.18%.  Lennar expects to use the proceeds from this offering
for general corporate purposes, which may include Company
operations, acquisitions and the purchase or repayment of
indebtedness. Closing of the offering is subject to customary
closing conditions.

Salomon Smith Barney and Banc One Capital Markets acted as
joint-bookrunning managers, Banc of America Securities, Deutsche
Bank Securities and Wachovia Securities acted as joint-lead
managers and Comerica Securities, Credit Lyonnais Securities and
UBS Warburg acted as co-managers of the offering.

Lennar Corporation, founded in 1954, is headquartered in Miami,
Florida and is one of the nation's leading builders of quality
homes for all generations, building affordable, move-up and
retirement homes.  Under the Lennar Family of Builders banner,
the Company includes the following brand names: Lennar Homes,
U.S. Home, Greystone Homes, Village Builders, Renaissance Homes,
Orrin Thompson Homes, Lundgren Bros., Winncrest Homes, Sunstar
Communities, Don Galloway Homes, Patriot Homes, NuHome, Barry
Andrews Homes, Concord Homes, Summit Homes, Cambridge Homes,
Seppala Homes, Genesee and Rutenberg Homes.  The Company's
active adult communities are primarily marketed under the
Heritage and Greenbriar brand names.  Lennar's Financial
Services Division provides residential mortgage services, title,
insurance brokerage and closing services, and its Strategic
Technologies Division provides high-speed Internet access, cable
television and alarm monitoring services for both Lennar
homebuyers and other customers.  Previous press releases may be
obtained at http://www.lennar.com


LERNOUT & HAUSPIE: Hiring Smith Katzenstein as Conflicts Counsel
----------------------------------------------------------------
Lernout & Hauspie Speech Products N.V. seeks Judge Wizmur's
authority to employ Smith Katzenstein & Furlow LLP, nunc pro
tunc to November 26, 2002, to act as the estate's counsel only
for the commencement and prosecution of avoidance actions in
which L&H NV's bankruptcy counsel cannot act for the estate due
to ethical conflicts of interest.

SKF will charge the Debtors on an hourly basis in accordance
with its standard hourly rates in effect on the date the
services are rendered. The SKF attorneys who will primarily
represent L&H NV, and their standard hourly rates, are:

        Professional            Position      Hourly Rate
        ------------            --------      -----------
        Kathleen M. Miller      Partner          $250
        Roger Anderson          Associate         175
        Joelle E. Polesky       Associate         175
        Deborah C. Sellis       Associate         175
        Yaprak Soysal           Paralegal          90
        Ellen Sebastiani        Paralegal          90
        Marianne M. Payne       Paralegal          90

These standard hourly rates are subject to adjustment generally
on January 1 of each year.

Kathleen M. Miller, a principal of SKF, tells Judge Wizmur that
the firm has not represented the Debtor, its equity security
holders, or any other parties-in-interest, or their attorneys,
in any matter relating to the bankruptcy estate, and the firm
does not hold or represent any interest adverse to L&H NV.  SKF
is, therefore, a "disinterested person" as that phrase is
defined in the Bankruptcy Code.

However, Ms. Miller discloses that SKF represents a creditor in
the L&H Holdings (USA) case.  That creditor, Buhl Data, has a
claim against Holdings and has filed an administrative claim
against Holdings, which is the subject of Holdings' Fourth
Omnibus Objection.  SKF also represented the Pension Benefit
Guaranty Corporation in the Dictaphone bankruptcy.  PBGC
withdrew its claim against Dictaphone, and SKF has not
represented PBGC in any matter related to L&H NV since that
time.

Ms. Miller further relates that SKF served as local counsel to a
shareholder of Holdings who brought an appraisal action in the
Chancery Court of the State of Delaware prior to the Petition
Date, at which time this action was stayed.  SKF has not
provided further representation to that creditor in the Holdings
Chapter 11 case. (L&H/Dictaphone Bankruptcy News, Issue No. 35;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


LTV CORP: Implements Reorganization Employee Severance Program
--------------------------------------------------------------
The LTV Corporation and its debtor-affiliates sought and
obtained the Court's authority to implement:

(1) a reorganization administration program for nine LTV Steel
     Company, Inc. employees -- Reorganization Employees -- who
     will provide substantial assistance to Debtor Copperweld
     Corporation and its affiliates in developing, negotiating
     and confirming their plan of reorganization;

(2) an arrangement with respect to the services to be provided
     by the Reorganization Employees; and

(3) a severance program for 14 other LTV Steel employees --
     Severance Employees -- who will not participate in the
     Reorganization Administration Program, but will remain
     beyond the end of the APP Period to assist with the wind
     down of LTV Steel's estate.

                  The Reorganization Services

Specifically, the Reorganization Employees will be authorized to
perform services for Copperweld in connection with:

        (1) claims analysis and reconciliation;

        (2) executory contract and unexpired lease analysis;

        (3) pension, tax and employee benefit analysis;

        (4) development, negotiation and confirmation of the
            Copperweld Plan and preparation of the accompanying
            Disclosure statement; and

        (5) any other function necessary or appropriate to
            effectuate the plan process.

In performing the Reorganization Services, the Reorganization
Employees will have access to, and may utilize, all information,
data and personnel of the Copperweld Debtors that may be
necessary or appropriate for them to perform the Reorganization
Services.  The employees will be obligated to take measures to
maintain the confidentiality of the information obtained.

                     The Employment Programs

The Employment Programs recognize the increase in
responsibilities to be shouldered by the remaining LTV Steel
employees over the next several months in managing the plan
process, and in continuing to wind down the LTV Steel estate.

The Employment Programs include two separate components:

     (1) the Reorganization Administration Program, designed to
         compensate the Reorganization Employees for managing
         and directing the plan process in addition to
         fulfilling their responsibilities to the LTV Steel
         estate; and

     (2) the Severance Program, designed to protect the
         Severance Employees for their continued service to LTV
         Steel, which will now include significant
         responsibilities in connection with the plan process.

              The Reorganization Administration Program

The Reorganization Employee's right to receive payment under the
Reorganization Administration Program will be conditioned on
that employee's execution of an agreement in a form and
substance acceptable to the Debtors.  Each Program Agreement
will provide that, before any payment may be made under the
Reorganization Administration Program, the employee will release
and waive any and all claims that he or she may have against any
of the Debtors or their respective estates by execution of a
release and waiver agreement.

Upon signature of a Program Agreement, each Reorganization
Employee will be entitled to a payment that is 50% of his or her
current annual base salary.  These payments will vest at the
earliest occurrence of any of these conditions (and will become
fully payable upon signature of a Release Agreement):

        (1) the commencement of a confirmation hearing for the
            Copperweld Plan; or

        (2) death; or

        (3) disability; or

        (4) involuntary termination at any time without cause;
            or

        (5) June 1, 2003.

A Reorganization Employee forfeits his or her entire payment
under the Reorganization Administration Program if he or she
resigns before the occurrence of one of the Vesting Events.

The estimated cost for the Reorganization Administration Program
is $1,110,000, exclusive of all applicable payroll taxes.  The
Program Amounts will be paid by the Copperweld Debtors and will
be funded from a carve-out from the Copperweld Lenders' liens in
respect of their postpetition financing facility.  Thus, the
cost of the Reorganization Administration Program will be borne
by the Copperweld Debtors' estates.  In addition, each
Reorganization Employee will have an allowed administrative
claim against Copperweld Corporation's estate equal to his or
her Program Amount.  Finally, if a Reorganization Employee is
required to take legal action to enforce his or her rights
under the Reorganization Administration Program, and without
regard to whether the Reorganization Employee prevails, in that
connection, the Copperweld Corporation will pay and be
financially responsible for 100% of any and all reasonable
attorney's and related fees and expenses incurred by the
employee in connection with any dispute associated with the
interpretation, enforcement or defense of a Reorganization
Employee's rights under the Reorganization Administration
Program by litigation or otherwise as long as, with respect to
that dispute, the Reorganization Employee has not acted in bad
faith or with no colorable claim of success.

                      Severance Program

Similar to the Reorganization Administration Program, the
Severance Employee's right to receive payment under the
Severance Program will be contingent on that employee's
execution of a Program Agreement in favor of LTV Steel.  Upon
the execution of a Program Agreement, a Severance Employee will
be entitled to receive a lump-sum severance payment that is
equal to two months of their current annual base salary.  These
payments will vest at the earliest occurrence of any of these
conditions (and will become fully payable upon signature of a
Release Agreement):

        (1) death; or

        (2) disability; or

        (3) involuntary termination at any time without cause;
            or

        (4) June 1, 2003.

A Severance Employee forfeits his or her entire payment under
the Severance Program if he or she resigns before the occurrence
of one of the Vesting Events.

The estimated cost of the Severance Program is $198,400,
exclusive of all applicable payroll taxes.  The source of these
funds will be the funds that remain in the trust that was
established in connection with the Debtors' prior retention
programs.  Accordingly, no new funds will be required to
implement the Severance Program. (LTV Bankruptcy News, Issue No.
43; Bankruptcy Creditors' Service, Inc., 609/392-00900)


MERRILL LYNCH: Fitch Takes Ratings Actions on Ser. 2003-A1 Notes
----------------------------------------------------------------
Merrill Lynch Mortgage Investors, Inc. $415.1 million mortgage
pass-through certificates, series 2003-A1 classes I-A, I-A-IO,
II-A, II-A-IO, III-A, III-A-1, III-A-2, III-A-3, III-A-4, III-A-
IO and IV-A-IO (senior certificates), are rated 'AAA' by Fitch
Ratings. In addition, Fitch rates the $6 million class M-1
certificates 'AA', $2.6 million class M-2 certificates 'A', $1.5
million class M-3 certificates 'BBB', $854,998 class B-1
certificates 'BB' and $641,249 class B-2 certificates 'B'.

The 'AAA' rating on the senior certificates reflects the 2.90%
subordination provided by the 1.40% class M-1, the 0.60% class
M-2, the 0.35% class M-3, the 0.20% privately offered class B-1,
the 0.15% privately offered class B-2, and the 0.20% privately
offered class B-3 (which is not rated by Fitch). Classes M-1, M-
2, M-3, B-1, and B-2 are rated 'AA', 'A', 'BBB', 'BB' and 'B',
respectively, 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 master servicing
capabilities of Wells Fargo Bank Minnesota, which is rated
'RMS1' by Fitch.

The certificates represent ownership in a trust fund, which
consists primarily of 3 separate mortgage loan groups. The
senior certificates in each certificate group are generally
related to the corresponding loan group and will receive
interest and/or principal from its respective mortgage loan
group. The particular certificate group to which a class of
senior certificates belongs is designated by the first number of
the name of that class. The class IV-A-IO certificates will
receive distributions primarily from the Group III mortgage
loans. If on any distribution date, the available funds from one
loan group is insufficient to make distributions of interest
and/or principal on that related senior certificate group,
available funds from the other loan group, after first making
the interest and/or principal distribution on it's related
senior certificates, will be available to cover shortfalls of
interest and/or principal distributions on the loan group's
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 all three mortgage pools.

The collateral consists of conventional, first lien, one- to
four-family, 30-year adjustable-rate residential mortgage loans.
The loans have been separated into three mortgage loan groups,
Group I, Group II and Group III, with each Group's underlying
mortgage loans having an initial fixed rate for a period of 3,
5, and 7 years, respectively, after which the rates adjust
either annually or semi-annually.

Group I mortgage loans have a weighted average loan-to-value
ratio (LTV) of 66.56%. The average balance of the mortgage loans
is $399,460 and the weighted average coupon of the loans is
4.897%. The weighted average FICO is 739. The three states that
represent the largest portion of mortgage loans are California
(31.49%), Illinois (9.87%) and Colorado (7.01%). All of the
Group I mortgage loans were originated in accordance to the
underwriting guidelines of National City Mortgage Co.

Group II mortgage loans have a weighted average LTV of 68.79%.
The average balance of the mortgage loans is $385,856 and the
weighted average coupon of the loans is 5.376%. The weighted
average FICO is 741. The three states that represent the largest
portion of mortgage loans are California (38.87%), Virginia
(10.38%) and Texas (9.39%). Approximately 18.01% and 81.99% of
the Group II mortgage loans were originated in accordance to the
underwriting guidelines of Cendant Mortgage Corporation and
National City Mortgage Co., respectively.

Group III mortgage loans have a weighted average LTV of 67.59%.
The average balance of the mortgage loans is $435,539 and the
weighted average coupon of the loans is 5.654%. The weighted
average FICO is 748. The three states that represent the largest
portion of mortgage loans are California (21.83%), New Jersey
(8.12%) and Virginia (7.13%). Approximately 67.59% and 32.41% of
the Group III mortgage loans were originated in accordance to
the underwriting guidelines of Cendant Mortgage Corporation and
National City Mortgage Co., respectively.

Approximately 6.10% of the aggregate mortgage loans are secured
by properties located in the State of Georgia, and 0.65% of the
aggregate mortgage loans are covered under the Georgia Fair
Lending Act (GFLA), effective as of October 2002. Of the
mortgage loans covered under GFLA, 84.19% and 15.81% are
purchase money and refinancings, respectively.


MEMC ELECTRONIC: Annual Shareholders Meeting Set for April 25
-------------------------------------------------------------
MEMC Electronic Materials, Inc. will hold its 2003 Annual
Stockholders' Meeting on Friday, April 25, 2003 at a time and
place to be announced in the Company's notice and proxy
statement relating to the meeting. The Board of Directors has
fixed February 28, 2003 as the record date for the determination
of the stockholders entitled to notice of, and to vote at, the
annual meeting and all adjournments thereof. The Company intends
to begin to print and mail proxy materials for the 2003 Annual
Meeting on or about March 17, 2003. Stockholders who desire to
submit a proposal for the 2003 meeting should submit such
proposal a reasonable time before the Company begins to print
and mail its proxy materials.

The Company's December 31, 2002 balance sheet shows a total
shareholders' equity deficit of about $22 million.


METALS USA: Settles $5.8 Million Claim Dispute with Nat'l Steel
---------------------------------------------------------------
Metals USA, Inc., and its debtor-affiliates sought and obtained
Court approval of their stipulation with National Steel
Corporation to settle seven proofs of claim filed by National
Steel totaling $5,840,942.90. These proofs of claim are:

              Claim No.      Claim Amount
              ---------      ------------
                3594           $29,503.65
                3595            22,566.97
                3596           124,008.72
                3597         1,240,813.63
                3598            68,766.43
                3599           624,885.04
                3600         3,730,398.46

After carefully reviewing their books, the Debtors and National
Steel have agreed that the proper aggregate amount for the Class
4 General Unsecured Claim against the Debtors is less than the
Filed Claim Amount.  The Debtors believe that it also has a
claim against National Steel in National Steel's Chapter 11
cases exceeding $173,000 -- also known as the Southcentral
Claim.  Both parties have agreed to set off the Southcentral
Claim as part of the resolution of the amount of National
Steel's claim in the Debtors' Chapter 11 cases.

Under the stipulation, the Debtors and National Steel agree
that:

    A. National Steel will have an Allowed Class 4 General
       Unsecured Claim against the Debtors for $5,410,000;

    B. The Allowed Claim is, and will remain, a valid,
       undisputed, liquidated, non-contingent, general unsecured
       claim against the Debtors, notwithstanding Section 502(j)
       of the Bankruptcy Code and there are no legal or
       equitable defenses, counterclaims or offsets that have
       been or may be asserted by or on the Debtors' behalf to
       reduce the amount of the Allowed Claim or affect its
       validity or enforceability, and the Allowed Claim is not
       and will not be subject to any claim or right of set-off,
       reduction, recoupment, impairment, avoidance,
       disallowance or subordination, including any Remaining
       Claims;

    C. No portion of the Allowed Claim is a claim for
       Reclamation and the Allowed Claim does no arise under an
       "executory contract" within the meaning of that term
       under Section 365 of the Bankruptcy Code;

    D. There are no preference or other avoidance actions
       pending or threatened against the Allowed Claim and the
       holder of the Allowed Claim will not be subject to
       Section 502(d);

    E. The $430,942.90 amount of the Filed Claim Amount in
       excess of the Allowed Claim is disallowed;

    F. The Debtors agree to waive their claims against National
       Steel for steel ordered prior to National Steel's Chapter
       11 petition, including the Southcentral claim, except
       Metals USA Carbon Flat Rolled, Inc.'s timely filed claim
       against National Steel amounting to $137,080.29 provided,
       however, that the Debtors do not waive any claims against
       National Steel for any steel delivered to the Debtors
       during National Steel's bankruptcy case, including any
       claims related to the quality of the material provided;
       and

    G. The Allowed Claim may be assigned by National Steel and
       the Debtors, as of January 28, 2003 and after any
       assignment, will have no right to set off the Remaining
       Claims against the Allowed Claim. (Metals USA Bankruptcy
       News, Issue No. 26; Bankruptcy Creditors' Service, Inc.,
       609/392-0900)


METAWAVE COMMS: Files for Chapter 11 Protection in Washington
-------------------------------------------------------------
Metawave Communications Corp. (Nasdaq:MTWV) filed a voluntary
petition for protection under Chapter 11 of the U.S. Bankruptcy
Code in the United States Bankruptcy Court in the Western
District of Washington and will undertake an orderly liquidation
of its assets.

Effective upon the filing of the petition for Chapter 11, the
following members of the Company's Board of Directors have
resigned: David Hathaway, David Twyver, Robert Hunsberger, Scot
Jarvis and Douglas Reudink. The two remaining members of the
Board of Directors are Bandel Carano, General Partner of Oak
Investment Partners, and Gary Flood, Chief Executive Officer of
Metawave.

The Company has requested that its common stock delisted from
the Nasdaq SmallCap Market.  Metawave's common stock will stop
being electronically traded on the Nasdaq SmallCap Market after
the close of trading on February 5, 2003.

"To date, we have been unable to recover losses sustained from
the business interruption relating to the fire that destroyed
our Taiwan manufacturing facility in May 2001," said Gary Flood.
"As a result, in December 2002, we filed suit against our
insurance carrier and broker. Our efforts to mitigate the
adverse effects of this lack of payment were unsuccessful. We
have worked very hard to maximize efficiencies and minimize
operating expenses during a time when telecommunications capital
spending has been extremely slow. Our efforts to explore
business opportunities and secure equity financing were also
unsuccessful. As part of our goal to maximize assets available
to creditors, we intend to vigorously pursue the claim for
business interruption coverage against St. Paul Fire and Marine
Insurance Company and Woodruff-Sawyer and Company."

On December 10, 2002, Metawave filed suit in California Superior
Court in San Francisco against St. Paul Fire and Marine
Insurance Company and Woodruff-Sawyer and Co., alleging breach
of contract, breach of the covenant of good faith and fair
dealing, negligent misrepresentation and professional negligence
in the defendants' underwriting and claims administration
process surrounding Metawave's claim for business interruption
coverage arising from the fire in its Taiwan factory in May
2001. The suit seeks both actual and punitive damages, as well
as all costs of the suit.

As previously announced and under the supervision of the U.S.
Bankruptcy Court, the Company will sell its assets, including
its patent portfolio and other intellectual property assets,
finished products, services operation, inventory and capital
equipment. Based on the Company's outstanding liabilities and
the $20 million liquidation preference on its outstanding Series
A Preferred Stock, the Company does not expect that there will
be any proceeds available for distribution to holders of its
Common Stock.

As of February 3, 2003, Metawave's new corporate office will
reside at the following address.

    Metawave Communications Corporation
    15231 NE 95th Street
    Redmond, WA 98052 USA
    Tel: 425/702-9349
    E-mail: info@metawave.com


METROLOGIC: Restructured Bank Debt Provides Lower Interest Costs
----------------------------------------------------------------
Metrologic Instruments, Inc. (NASDAQ: MTLG), a leading
manufacturer of sophisticated imaging systems using laser,
holographic, camera and vision-based technologies, high-speed
automated data capture solutions and bar code scanners, has
restructured its bank debt facility with the execution of a
three-year, $17.5 million amended facility with PNC Bank, N.A.

The facility includes a $13 million revolving credit facility
and a $4.5 million term loan.

Commenting on the new facility, Metrologic's Chairman and CEO,
C. Harry Knowles stated, "Metrologic generated $30 million of
positive cash flow from operations over the past 24 months and
has restored the Company to profitability, which has resulted in
reduced bank debt of $10.3 million at the end of 2002.
Consequently, we were able to consider several excellent
proposals from senior lenders and banks to restructure the
previous bank debt facility."

Mr. Knowles continued, "PNC offered to eliminate the other banks
included in the previous bank facility, offered much lower
interest rates and fees, and offered the most flexibility and
expediency to restructure and reduce our other subordinated
debt. I believe this new Facility provides Metrologic the best
opportunity to continue to further reduce our debt, while
providing sufficient financing for the Company's working capital
requirements."

Metrologic designs, manufactures and markets bar code scanning
and high-speed automated data capture systems solutions using
laser, holographic, camera and vision-based technologies.
Metrologic offers expertise in 1D and 2D bar code reading,
portable data collection, optical character recognition, image
lift, and parcel dimensioning and singulation detection for
customers in retail, commercial, manufacturing, transportation
and logistics, and postal and parcel delivery industries. In
addition to its extensive line of bar code scanning and vision
system equipment, Metrologic also provides laser beam delivery
and control systems to semi-conductor and fiber optic
manufacturers, as well as a variety of highly sophisticated
optical systems. Metrologic products are sold in more than 100
countries worldwide through Metrologic's sales, service and
distribution offices located in North and South America, Europe
and Asia.

                         *   *   *

In its Form 10-Q filed with the Securities and Exchange
Commission on August 14, 2002, Metrologic reported:

"At December 31, 2001, March 31, 2002 and June 30, 2002, the
Company was in violation of certain provisions and covenants
included in its Credit Facility and the banks issued a notice of
default as of April 9, 2002 and increased the interest rate by
2% on the outstanding debt in accordance with the agreement. As
reflected in the Company's prior periodic reports filed with the
Securities and Exchange Commission, the Company and its primary
bank had been in discussions with respect to modifying the
Credit Facility. On July 9, 2002, the Company replaced the
Credit Facility by executing an Amended and Restated Credit
Agreement with its lenders. The key terms of the Amended Credit
Agreement include the waiver of all existing defaults under the
Credit Facility and the withdrawal by the banks of the notice of
default and an increase in the original interest rate of the
term note by .25% per annum. The Company granted a security
interest in its assets and properties to the primary bank in
favor of the banks as security for borrowings under the Amended
Credit Agreement. The Amended Credit Agreement contains various
negative and positive covenants, such as minimum tangible net
worth requirements and expires on May 31, 2003. A portion of the
outstanding borrowing under the Amended Credit Agreement is
guaranteed by C. Harry Knowles and Janet Knowles. Additionally,
the Company could be required to make additional prepayments
under the Amended Credit Agreement if there are excess cash
flows, as defined in the Amended Credit Agreement.

"The Amended Credit Agreement also includes a revolving credit
facility of $14,000 that expires on May 31, 2003. Amounts
available for borrowing under this facility are equal to a
percentage of the total of eligible accounts receivable and
inventories, as defined in the agreement, plus an allowable
overadvance of $2,750. The overadvance allowance expires on
January 1, 2003. The Amended Credit Agreement requires the daily
application of Company receipts as payments against the
revolving credit facility and daily borrowings to fund cash
requirements. Interest on outstanding borrowings is at the
bank's prime rate plus 2.5%, and the agreement provides for a
commitment fee of .5% on the unused facility.

"In connection with the Amended Credit Agreement, certain
directors and executive officers have made loans to the Company,
which amounts will be held as cash collateral under the terms of
the Amended Credit Agreement. Specifically, C. Harry Knowles and
Janet H. Knowles, Dale M. Fischer and Hsu Jau Nan have loaned
the Company $400, $125 and $475, respectively. The loans bear
interest at a rate of nine percent (9%) per annum and will be
repaid in full upon the earliest of: (a) the Company's repayment
in full of its obligations under the Amended Credit Agreement or
(b) the release of the security interest held by the Company's
primary bank in such cash being loaned by the above mentioned
directors and executive officers."


MOBILE KNOWLEDGE: Richter & Partners Appointed Interim Receiver
---------------------------------------------------------------
Mobile Knowledge Inc. (TSX:MKN) announced that the application
by its secured debenture holder, Longitude Fund Limited
Partnership, for the appointment of an interim receiver was
approved by the Ontario Superior Court of Justice on January 29,
2003. Richter & Partners Inc. has been appointed interim
receiver. As anticipated in the previous release issued by
Mobile Knowledge Inc., the interim receivership is being
financially supported by Longitude to allow the company to be
restructured.


OAKWOOD HOMES: Closes Up to $140 Million Revolving Credit Line
--------------------------------------------------------------
Oakwood Homes Corporation (OTC Bulletin Board: OKWHQ) closed
last week on the $140 million revolving line of credit tranche
under its $215 million debtor-in-possession financing facility.

Myles E. Standish, President and Chief Executive Officer,
stated: "We are pleased to close the $140 million revolving line
of credit and expect to close the remaining $75 million loan
servicing advance line in the next few weeks.

"The primary purposes of the $140 million revolving line of
credit are to support outstanding letters of credit of $38
million, to repay amounts outstanding under our previous $65
million revolving credit facility and to provide additional cash
borrowing capacity while we complete our reorganization. The new
line is collateralized by substantially all of the Company's
assets, excluding loans held for sale."

Oakwood Homes Corporation and its subsidiaries are engaged in
the production, sale and financing of manufactured housing. The
Company's products are sold through Company-owned stores and an
extensive network of independent retailers.

DebtTraders reports that Oakwood Homes Corp.'s 7.875% bonds due
2004 (OH04USR1) are trading at 23 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=OH04USR1for
real-time bond pricing.


OWENS CORNING: Asks Court to Approve Tacoma & Morris Pact
---------------------------------------------------------
Owens Corning seeks the Court's approval of a settlement
agreement among Debtors Owens Corning and Exterior Systems Inc.,
and two Claimants, the City of Tacoma and Jack Morris.

Norman L. Pernick, Esq., at Saul Ewing LLP, in Wilmington,
Delaware, informs the Court that the City of Tacoma owned real
property in Tacoma, Washington known as Parcel 7.  Pursuant to
local ordinances, on April 30, 1993, the City purchased Lots 1
to 6 inclusive, Block 58, from City Waterways Enterprises, Jack
Morris, general partner.  The City executed two addenda to that
purchase agreement, the first on April 30, 1993, and the second
on April 4, 1997.  As a result of the purchase agreement and
addenda, Morris retained certain defined liability for the
cleanup of contaminants that might exist on Parcel 7.

In December 1996, Mr. Pernick recounts that the City conveyed
title to a portion of Parcel 7 to the Metropolitan Park District
of Tacoma, a municipal corporation organized and existing under
laws of the State of Washington, as trustee for the benefit of
the City.  The City and Morris have incurred remedial action
costs in cleaning up contaminants on the Property as required
under the Model Toxics Control Act and Consent Decree agreement
with the Washington State Department of Ecology.  They may incur
further remedial action costs with respect to the Property.

On March 2, 2000, Mr. Pernick relates that the City and Morris
filed a second amended complaint against Owens Corning, Exterior
Systems and other defendants in Pierce County Superior Court.
On September 22, 2000, the City, Morris, Owens Corning, and
Exterior Systems stipulated to dismiss Owens Corning from the
lawsuit. The City and Morris claimed that Owens Corning,
Exterior Systems and the other defendants released contaminants
at the Property. They seek contribution for remedial action
costs expended or to be expended in the cleanup of the
contaminants.

Owens Corning, Exterior Systems and other defendants have denied
the claims of the City and Morris and dispute any liability for
cleanup costs incurred by the City and Morris.

In Exterior Systems' case, Mr. Pernick notes that Morris filed a
Proof of Claim for $1,883,850, and the City filed a Proof of
Claim in the name of Jack Morris, Co-creditor with City of
Tacoma, for $1,883,850.  On June 26, 2002, the City filed an
amended Proof of Claim for $1,675,696.

On November 20, 2002, Owens Corning, Exterior Systems, the City
and Morris entered into a Settlement, Release & Indemnity
Agreement to settle their differences with respect to the
Property contamination.

The basic terms of the Settlement Agreement are:

    A. Owens Corning, Exterior Systems, the City, and Morris
       agree to the terms of the Settlement Agreement without
       admission of any liability or violation of the law;

    B. the parties agree that the City and Morris will jointly
       have one allowed, nonpriority general unsecured claim in
       Exterior Systems' Chapter 11 case only, amounting to
       $85,000, in full and final settlement of all claims by
       the City and Morris pertaining in any manner to matters
       within the Scope of the Settlement Agreement;

    C. within 14 days after entry of the Final Approval Order,
       the City and Morris:

       -- will file an amended Proof of Claim in the Exterior
          Systems case amounting to $76,978.39, which will amend
          and supersede the previously filed Proof of Claim
          filed by the City; and

       -- will file an amended Proof of Claim in the Exterior
          Systems case amounting to $8,021.61 which will amend
          and supersede the previously filed Proof of Claim
          filed by Morris.

       Payment of the Agreed Claim will be made following
       approval or confirmation by the Bankruptcy Court of a
       plan of reorganization to be submitted to the Bankruptcy
       Court, in accordance with the terms, schedules, and other
       provisions of this confirmed reorganization plan to the
       class of creditors of which the Agreed Claim is a part;

    D. the City and Morris will indemnify, defend, protect and
       hold harmless Owens Corning and Exterior Systems from and
       against any and all claims by third parties or
       governmental agencies resulting from, pertaining to,
       relating to or in any way connected with or arising out
       of, directly or indirectly, matters within the scope of
       the Settlement Agreement;

    E. subject to payment of the Agreed Claim and except as
       necessary to enforce the terms of the Settlement
       Agreement, the parties release, acquit and forever
       discharge the other from any and all claims, cross-
       claims, demands, suits, actions, damages, costs and
       causes of action of any kind or nature that arise out of,
       or are in any way connected with or relating to matters
       within the scope of the Settlement Agreement;

    F. the parties will not bring suit against the other for any
       and all claims, cross-claims, demands, suits, actions,
       damages, costs and causes of action of any kind or nature
       that arise out of, or are in any way connected with or
       relating to matters within the scope of the Settlement
       Agreement; and

    G. the parties agree to dismiss any and all claims and
       counterclaims, against each other in the Lawsuit with
       prejudice not later than 7 days after payment is made by
       Owens Corning and Exterior Systems.  The dismissals will
       be without prejudice for claims or actions against any
       non-
       parties to the Settlement Agreement.

The Debtors believe the Settlement Agreement is favorable to the
estate because:

    A. it resolves the claims of the City and Morris' claim
       against Owens Corning and Exterior Systems for their
       alleged contamination of the Property;

    B. the Debtors' estates are not immediately depleted because
       the City and Morris' prepetition, general, allowed,
       nonpriority unsecured claim amounting to $85,000 will be
       paid pursuant to Exterior Systems' plan of
       reorganization;

    C. the terms of the Settlement Agreement are fair and
       reasonable; and

    D. certain of the allegations in the Settlement Agreement
       are factually complex, and would require significant
       litigation between the parties to resolve absent
       consensual agreement, and could cause the Debtors to
       incur substantial additional legal fees, costs and other
       expenses, without the benefit of certainty as to the
       outcome. (Owens Corning Bankruptcy News, Issue No. 45;
       Bankruptcy Creditors' Service, Inc., 609/392-0900)


PACIFIC GAS: Hiring ZIA Info & ERS Group for Litigation Support
---------------------------------------------------------------
Pacific Gas and Electric Company, and its debtor-affiliates seek
the Court's authority to employ ZIA Information Analysis Group,
Inc., nunc pro tunc to October 4, 2002, to perform litigation
support services related to discovery requests by the City of
Palo Alto in connection with Palo Alto's objection to the
confirmation of PG&E's proposed reorganization plan.  According
to Richard L. Meiss, Esq., at PG&E's Law Department, the
discovery requests cover a broad range of issues, including
power generation, transmission and market redesign issues,
requiring over 300,000 pages of documents to be collected and
reviewed.

The litigation support services include:

   (i) document collection;

  (ii) document review for relevance and privilege screening;

(iii) document management, including assistance with production
       including bates stamping and copying; and

  (iv) electronic maintenance and tracking of documents pursuant
       to a database.

The services also include setting up and conducting interviews
with the custodians of potentially relevant documents and
necessary follow up work in accessing and assembling potentially
relevant documents.

Last year, ZIA has agreed to merge with Economic Research
Services, Inc. to form ERS Group effective January 1, 2003.
As a result, PG&E also asks Judge Montali to approve ERS Group's
employment, as successor to ZIA, nunc pro tunc to January 1,
2003.  ERS Group will continue the services ZIA provided
beginning January 1, 2003.

ZIA also performs other services for PG&E, which consists of
litigation support and information management services on
various regulatory and litigation matters that are not directly
related to PG&E's bankruptcy cases, as well as projects related
solely to the implementation of PG&E's Plan.  These services do
not rise to the level of professional services within the
meaning of Section 327(a) of the Bankruptcy Code due to the
nature of the services provided and the limited role that these
services play in connection with PG&E's bankruptcy proceeding.
Starting January 1, 2003, these Non-Professional Services will
be performed by ERS Group:

    -- City of Santa Cruz, et. al. v. PG&E (Case No. 128936)

       ZIA provides litigation support services to PG&E in
       connection with a litigation brought by certain cities,
       including the City of Santa Cruz, relating to franchise
       fee issues under Section 6231(c) of the Public Utilities
       Code. ZIA has not performed any work on this matter since
       January 2002 but may provide further services in the
       future.

    -- Generation-related Document Management

       ZIA performed management services to PG&E in connection
       with PG&E's valuation of hydroelectric plants and related
       assets.

    -- December 8, 1998 Power Outage
       (CPUC Docket No. I.98-12-013)

       ZIA renders litigation support services to PG&E in
       connection with the CPUC's investigation of the December
       8, 1998 San Francisco power outage.

    -- PG&E v. Lynch, et. al. (Case No. C01-03023 VRW)

       ZIA provides litigation support services to PG&E in an
       action PG&E brought against the Commissioners of the CPUC
       regarding the recovery of wholesale electric procurement
       and purchase transmission costs pursuant to the Filed
       Rate Doctrine.

    -- PG&E Holding Company Investigation
       (CPUC Docket No. I. 01-04-002)

       ZIA provides litigation support services to PG&E in
       connection with the CPUC's investigation into whether
       respondent utilities and their holding companies,
       including PG&E and PG&E Corporation, have complied with
       relevant statutes and CPUC decisions in the management
       and oversight of their companies.

    -- Annual Transition Cost Proceeding
       (CPUC Docket No. A. 01-09-003)

       ZIA renders litigation support services to PG&E in
       connection with the review of PG&E's procurement and
       generation practices in Phase 2 of the 2001 Annual
       Transition Cost Proceeding.

    -- FERC Market Investigation (FERC Docket No. PA02-2-000)

       ZIA provides litigation support services to PG&E in
       connection with FERC's fact-finding investigation of
       potential manipulation of electric and natural gas
       prices. ZIA last performed work on this matter in June
       2002 but may provide further services in the future.

    -- FERC Refund Investigation
       (FERC Docket No. EL00-95-000 et al.)

       ZIA provides litigation support services to PG&E in
       connection with the FERC's investigation of potential
       refunds of prior electric prices.

    -- PG&E v. CBS Corporation (Case No. 998-2663 LGB)

       ZIA provides litigation support services to PG&E in
       connection with PG&E's claims for breach of express
       contractual warranties against Westinghouse.

    -- Plan-Related Document Database and Website

       ZIA has developed and maintains an asset database to
       facilitate the preparation of the asset schedules needed
       for the asset transfer assignment and assumption
       documentation contemplated by the PG&E Plan.  In
       addition, ZIA has developed and maintains a secure
       website for all Plan-related transactional documentation.

    -- Records, Maps & Drawings Database

       ZIA has developed, maintains and updates a database of
       records, maps and drawings relating to PG&E's lines of
       business to facilitate the transfer of these documents in
       connection with implementation of the Plan.

    -- Generation Permits and Licenses Database

       ZIA has developed, and maintains and updates a database
       as well as a document repository of permits and licenses
       related to the electric generation line of business to
       facilitate the transfer or re-issuance of these permits
       and licenses by government agencies in connection with
       the Plan implementation.

PG&E proposes to compensate ZIA for its services in accordance
with the firm's current hourly billing rates ranging from $40 to
$200.  Mr. Meiss tells the Court that ZIA started performing the
discovery-related work on October 4, 2002.  Consequently, ZIA
has incurred $450,000 in fees and costs through December 31,
2002. ZIA has not been paid for its services.

Mr. Meiss discloses that ZIA and PG&E are parties to a Master
Service Agreement dated June 30, 1994, which provides the
general terms and conditions applicable to ZIA's performance of
the services for PG&E.  As part of the Master Agreement, PG&E
and ZIA have entered into an Authorization Letter on December
13, 2002 to govern the current services.  The Master Agreement
and Authorization Letter will also govern ERS Group's
engagement.

Tiffany M. Egan, one-time President of ZIA and now Managing
Director of the San Francisco office of ERS Group, reports that
ZIA has performed services for PG&E since 1994.  ZIA previously
held a claim against PG&E based on the prepetition services.
However, ZIA has sold and assigned the claim in its entirety.

Ms. Egan also ascertains that ZIA and ERS Group have no
connection with PG&E, PG&E's creditors, shareholders or any
other parties-in-interest, or their attorneys and accountants.
ZIA and ERS Group have no connection with the U.S. Trustee or
any person employed in the Office of the U.S. Trustee.  Ms. Egan
attests that ZIA and ERS Group do not hold or represent any
interests adverse to the Debtors' estate, and are "disinterested
persons" under Section 101(14) of the Bankruptcy Code. (Pacific
Gas Bankruptcy News, Issue No. 52; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


PHAR-MOR: Court Schedules Plan Confirmation Hearing on March 11
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Ohio
approved Phar-Mor, Inc., and its debtor-affiliates' Disclosure
Statement.  Judge Bodoh finds that the disclosure document
contains adequate information to allow creditors to decide
whether to accept of reject the Plan.  Phar-Mor's Plan,
according to a report by Rosland Briggs Gammon at Bloomberg
News, will distribute $64.5 million -- about 18 cents-on-the-
dollar -- to unsecured creditors.

In order to be counted, ballots accepting or rejecting the First
Amended Joint Plan must be received by Trumbull Services at:

     if by mail:

       Phar-Mor, Inc.
       c/o Trumbull Services
       PO Box 512
       Windsor, CT 06095-9700

     if by hand delivery or overnight courier:

       Phar-Mor, Inc.
       c/o Trumbull Services
       4 Griffin Road Noth
       Windsor, Connecticut 06095

by 4:00 p.m. Eastern Time on March 3, 2003.

The Plan Confirmation hearing on the First Amended Joint Plan is
scheduled for March 11, 2003 at 9:00 a.m. at the United States
Bankruptcy Court, Federal Building & U.S. Courthouse, 10 E.
Commerce Street, Third Flood, Youngstown, Ohio 44503.

Written objections to confirmation of the First Amended Joint
Plan must be filed with the Clerk of the U.S. Bankruptcy Court
for the Northern District of Ohio and copies must be served on
the Debtors, the Committee and the United States Trustee no
later than March 3, 2003.

Phar-Mor, Inc., a retail drug store chain, filed for Chapter 11
Protection on September 24, 2001.  In July 2002, The Ozer Group
and Hilco Merchant Resources launched GOB sales at the Company's
73 store locations. Michael Gallo, Esq., at Nadler, Nadler and
Burdman represents the Debtors.


PROBEX CORP: Eyes Bankruptcy Filing if Debt Restructuring Fails
---------------------------------------------------------------
Probex Corp. (AMEX:PRB), a technology based, renewable resource
company reported that it has approximately $26.4 million in debt
that becomes due on February 28, 2003 and currently does not
have the ability to repay this debt when due.

The company is continuing to work with potential project lenders
to obtain financing for the construction and start-up of its
proposed Wellsville, Ohio reprocessing facility. However, the
company currently does not anticipate that a funding commitment
will be obtained prior to the date its debt becomes due. The
company presently intends to work with creditors to attempt to
extend the due date or restructure the company's debt. If the
company is unsuccessful in these efforts, it will consider any
other options available to it, including filing for protection
from creditors under the bankruptcy code.

Probex is a technology-based, renewable resource company that is
engaged in the commercialization of its patented ProTerra
process. We have invested the majority of our resources since
inception on research, development and commercialization of our
patented ProTerra technology, which has the ability to reprocess
used lubricating oil into products that we intend to market to
commercial and industrial customers. For more information about
Probex, visit the company's web site at http://www.probex.com


REGUS BUSINESS: Seeks Nod to Pay Critical Vendors' Claims
---------------------------------------------------------
Regus Business Centre Corp., and its debtor-affiliates ask
permission from the U.S. Bankruptcy Court for the Southern
District of New York to pay the prepetition claims of their
critical vendors.

The Debtors want to pay only their prepetition obligations to
vendors who will agree to supply goods and services to Debtors
on either the same credit terms and conditions or such credit
terms as Debtors may deem acceptable and consistent with normal
business practice.

The ongoing cooperation of Debtors' Critical Vendors is
necessary if Debtors are to continue their normal operations.
The Debtors believe that certain vendors may refuse to cooperate
and provide essential goods and services unless they continue to
deal with then on present terms and conditions.

Further, paying pre-petition obligations is critical to certain
service providers. Smaller entities not only rely on Debtors'
continued business as a substantial part of their revenue but
also may not be able to afford to absorb such losses. Failure to
pay the prepetition claims of those suppliers could force a
substantial number of them into bankruptcy and/or out of
business, eliminating a valuable source of goods and services to
Debtors. Accordingly, Debtors want to pay the prepetition
obligations up to an aggregate amount of $500,000.

Regus Business Centre Corp., filed for chapter 11 protection on
January 14, 2003.  Karen Dine, Esq., at Pillsbury Winthrop LLP
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:
                               -------------    ------------
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


REPTRON ELECTRONICS: Misses Payment on 6-3/4% Convertible Bonds
---------------------------------------------------------------
Reptron Electronics, Inc. (Nasdaq: REPT), a leading electronics
manufacturing supply chain services company, didn't make its
semi-annual interest payment to holders of its 6-3/4%
convertible bonds scheduled on February 1, 2003.  The Company
did not achieve operating results during the fourth quarter of
2002 required under the Loan and Security Agreement dated
October 10, 2002, entered into by the Company and its secured
lenders. The Company has taken this action to avoid the
immediate exercise by its secured lenders of those actions
permitted in the event of a default under the Loan and Security
Agreement and related documents. Although the secured lenders
have not waived this default, they are currently providing
financing under the Loan and Security Agreement.

The Company is exploring various options addressing the bond
indebtedness and will be engaging advisors to assist in this
project.  Reptron intends to open a dialogue with the bond
holders in this regard. The Company does not expect any
interruptions in current operations or in payments of its other
obligations as the line of credit used to finance ongoing
operations remains in place.

Paul Plante, Reptron's President and Chief Operating Officer
stated, "We have previously discussed that our convertible debt
due in August, 2004 may require restructuring based on current
business conditions. We believe the timing is right to address
and complete this project." Plante continued, "We believe recent
actions taken in each of our divisions will result in improved
operating results and we remain optimistic about the long term
prospects for the Company."

Reptron plans on reporting its fourth quarter operating results
on or about March 24, 2003. This extended period will enable up-
to-date disclosure of the refinancing activity.

                      About Reptron

Reptron Electronics, Inc. is a leading electronics manufacturing
supply chain services company providing distribution of
electronic components, custom logistics and supply chain
management services, engineering services, electronics
manufacturing services and display integration services. Reptron
Distribution is authorized to sell over 30 vendor lines of
semiconductors, passive products and electromechanical
components and offers a variety of custom logistics and supply
chain management services. Reptron Manufacturing Services offers
full electronics manufacturing services including complex
circuit board assembly, complete supply chain services and
manufacturing engineering services to OEMs in a wide variety of
industries. Reptron Display and System Integration provides
value-added display design engineering and system integration
services to OEMs. For more information, access
http://www.reptron.com


RHYTHMS NETCONNECTIONS: S.D.N.Y. Court Confirms Liquidating Plan
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
confirmed Rhythms NetConnections Inc., and its debtor-
affiliates' Joint Plan of Liquidation after finding that the
Plan complies with each of the 13 standards articulated in
Section 1129 of the Bankruptcy Code:

      (1) the Plan complies with the Bankruptcy Code;
      (2) the Debtors have complied with the Bankruptcy Code;
      (3) the Plan was proposed in good faith;
      (4) all plan-related cost and expense payments are
          reasonable;
      (5) the Plan identifies the individuals who will serve as
          officers and directors post-emergence;
      (6) all regulatory approvals that are necessary have been
          obtained or are respected;
      (7) creditors receive more under the plan than they would
          in a chapter 7 liquidation;
      (8) all impaired creditors have voted to accept the Plan,
          or, if they voted to reject, then the plan complies
          with the absolute priority rule;
      (9) the Plan provides for full payment of Priority Claims;
     (10) at least one non-insider impaired class voted to
          accept the Plan;
     (11) the Plan is feasible and confirmation is unlikely to
          be followed by a liquidation or need for further
          financial reorganization;
     (12) all amounts owed to the Clerk and the U.S. Trustee
          will be paid; and
     (13) the Debtors have never established nor maintained any
          retiree benefit plans, funds or programs, as defined
          in section 1114 of the Bankruptcy Code. Accordingly,
          no such payments will be required to be made.

The Debtors will reserve $200,000 from the Debtors' operating
wind=down budget for professional fees and wind-down costs
itemized in the liquidation analysis annexed to the Disclosure
Statement, which will be used to fund any actions.  Any excess
will be distributed in accordance with the Plan.

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

Rhythms NetConnections provides Internet access and remote
network connections using high-speed digital subscriber line
(DSL) technology.  It filed for Chapter 11 protection on August
1, 2001 (Bankr. S.D.N.Y. Case No. 01-14283).  Paul M. Basta,
Esq., at Weil Gotshal & Manges, represents the company in its
restructuring efforts.  When Rhythms NetConnections filed for
protection from its creditors, it listed $698,527,000 in assets
and $847,207,000 in debt.


RICA FOODS: Deloitte & Touche Resigns as Auditors
-------------------------------------------------
On January 23, 2002, Deloitte & Touche provided the Chairman of
Rica Foods, Inc.'s Audit Committee a letter saying, ". . . the
client-auditor relationship between Rica Foods, Inc. . . . and
Deloitte & Touche, S.A. has ceased on January 23, 2003."

The Company believes Deloitte & Touche has resigned as the
Company's independent accountant.  According to Rica Foods,
Deloitte & Touche began serving as the Company's auditors on
August 5, 2002, reviewed the Company's Form 10-Q for the quarter
ended June 30, 2002 and, until very recently, has been
conducting an audit of the Company and its major operating
subsidiaries.  Between approximately December 18, 2002 and
January 13, 2002, Deloitte & Touche also assisted the Company by
providing it comments to the Company's Form 10-K for the fiscal
year ended September 30, 2002.

At approximately 5:30 PM EST on January 13, 2003 the Company
filed the Form 10-K with the Securities and Exchange Commission.
The Form 10-K contained a number of financial errors. At the
time of filing, the Company's Chief Financial Officer was aware
that "Due from Stockholders" in the amount of $5,495,437 was
classified as an asset account instead of a contra-equity
account and "Preferred Stock" in the amount of $2,216,072 was
classified as part of "Minority Interest" instead of a component
of Stockholders' Equity.

The Board and Audit Committee have indicated that they do not
believe that the CFO thought, at the time the Form 10-K was
filed, that there were material errors in the consolidated
financial statements included in the filing. At the time of
filing, the Company was not aware of the following errors: (i)
Net income applicable to common shareholders for the year 2000
did not tie with the corresponding amount in Statement of
Stockholders' Equity by $17,875; and (ii) Accumulated Other
Comprehensive Loss in the Statement of Stockholders' Equity for
the year 2002 was misstated by $36. In addition, Rica Foods
indicates that the CFO did not realize that the certain changes
to the audit report requested by Deloitte & Touche were not
made.

The Form 10-K also appeared to include a signed audit report
from Deloitte & Touche. The Board and Audit Committee recognize
that it was potentially a violation of Article III of Regulation
S-X for the Company to file a Form 10-K before it received a
signed audit report from Deloitte & Touche. However, until very
shortly after the filing of the Form 10-K, the CFO believed the
Company was in the process of receiving the Signed Audit Report.

The CFO immediately contacted Deloitte & Touche to discuss
filing an amendment to the Form 10-K that evening. The Company
anticipated that the Form 10-K would disclose the errors
associated with the Form 10-K filing and include an audit report
signed by Deloitte & Touche. From the evening of January 13,
2003 until the late afternoon of January 16, 2003, the Company
believed that Deloitte & Touche was in agreement with the Form
10-K Amendment Plan.  At approximately 6 PM EST on January 16,
2003, Mr. Castro and Mr. Danillo Villalta, the managing partner
of Deloitte's office in Costa Rica, spoke with the Chairman of
the Company's audit committee, Mr. Federicio Vargas. During the
meeting, Mr. Castro and Mr. Villalta informed Mr. Vargas of
Deloitte & Touche's intent to send the letter described below.
Mr. Castro also indicated that Deloitte was considering sending
to the SEC a letter comparable to the one described below if
Deloitte & Touche's requests were not met.

At approximately 9 PM EST on January 16, 2003, the Company's
Board of Directors and Audit Committee of the Company received a
letter from Deloitte & Touche which indicated in relevant part:
"The 2002 Form 10-K includes an audit report, dated December 13,
2002, that was purportedly issued and signed by "Deloitte &
Touche" on the Company's consolidated financial statements and
related financial statement schedule as of and for the year
ended September 30, 2002. Deloitte and Touche has not issued any
reports or provided its consent in connection with the Company's
2002 consolidated financial statements and has not provided, and
does not provide, its permission for the Company to use Deloitte
& Touche's name, or reports purportedly signed by "Deloitte &
Touche", in connection with the 2002 Form 10-K.  Deloitte &
Touche hereby requests that you take the appropriate action to
advise all recipients of the 2002 Form 10-K by filing a Form 8-K
with the SEC to state (1) that the use of Deloitte &Touche's
name and the inclusion of the report that was purportedly issued
and signed by Deloitte & Touche was unauthorized; (2) that
Deloitte & Touche has not issued any reports or provided its
consent; and (iii) that Deloitte and Touche is not otherwise
associated in any manner with the 2002 Form 10-K.   Deloitte &
Touche also hereby requests that you cease and desist from (1)
using Deloitte & Touche's name without its prior written
permission, and (2) using any reports or consents not issued and
signed by Deloitte & Touche in any document. As you are aware,
the Company's consolidated financial statements included in the
2002 Form 10-K are incorrect, and we are working with the
Company on the correction of such financial statements. However,
since the Company has not yet issued its correct financial
statements, we are not in a position to report on the Company's
financial statements."

The Board, Audit Committee and Executive Officers were surprised
by Deloitte & Touche's communications since the Company believed
it had been working with Deloitte & Touche to effectuate the
Form 10-K Amendment Plan.  The Board, Audit Committee and
Executive Officers were also surprised that Deloitte & Touche
had specifically requested language to be included in the Form
8-K that, when read in its entirety, strongly suggested that:
(i) Deloitte & Touche had absolutely no involvement in the
preparation of the financial statements included in the Form 10-
K nor in the inclusion of the audit report in the Form 10-K; and
(ii) Deloitte & Touche has provided no indicia of consent to the
Company that it could include the signed audit report in the
Form 10-K.  The Board and Audit Committee believed that the Form
8-K text proposed by Deloitte & Touche was not fair and balanced
disclosure of the historical events. Deloitte & Touche had
clearly been serving as the Company's independent accountant,
reviewing its quarterly reports on Form 10-Q, and providing
comments to the Form 10-K. The Board and Audit Committee also
believe that the actions of Deloitte & Touche leading up to the
filing of the Form 10-K contributed to the CFO's mistaken belief
that the Company was in the process of receiving a Signed Audit
Report.

Nonetheless, the Board and Audit Committee recognized that the
Company had filed a Form 10-K, had not received a signed audit
report from Deloitte & Touche and needed to apprise the
investing public as soon as possible. On January 17, 2003, the
Board and Audit Committee were already concerned that they could
no longer rely on Deloitte & Touche's communications from the
late evening of January 13, 2003 to January 17, 2003 to the
effect that Deloitte & Touche could be in a position to send the
Company a signed audit report within hours or days. Despite
repeated requests, Deloitte & Touche had not provided the
Company with a specific list of remaining open audit items.

The Board and Audit Committee informed Deloitte & Touche in
writing on January 17, 2003 that, given the delays already
experienced, the Company believed it would be best to apprise
the investing public of any errors in the Form 10-K pursuant to
a Form 10-K amendment to be filed on January 20th or 21st of
2003. The Company believed that, relative to a Form 8-K, a Form
10-K Amendment would provide investors far more comprehensive,
detailed and balanced textual and financial information.

At 9:40 PM EST on January 17, 2003, Mr. Castro advised the
General Counsel and the Chairman of the Company's Audit
Committee that unless the Company filed the form of Form 8-K
requested by Deloitte & Touche, Deloitte & Touche would send to
the SEC a copy of a letter comparable to Deloitte & Touche's
January 16, 2003 letter to the Company.

The Company became increasingly suspicious of Deloitte &
Touche's actions when Mr. Castro repeatedly refused to discuss
the Company's proposal that it might be in the best interest of
the investing public, the
Company and Deloitte to announce any Form 10-K deficiencies in a
Form 10-K amendment rather than a Form 8-K.

Despite the growing lack of confidence in Deloitte & Touche by
the Board and Audit Committee, the CFO continued to incorporate
Deloitte & Touche's comments into a draft Form 10-K Amendment.
The Company also continued to speak with Mr. Castro and draft a
Form 8-K.

At approximately 9 PM EST on January 20, 2003 the Company
provided Mr. Castro with a proposed draft of the Form 8-K which
reads in relevant part as follows:  "It has come to the
Company's attention that Deloitte & Touche, the Company's
independent auditors, did not provide the Company with a signed
audit report for inclusion in the Company's Form 10-K.
Accordingly, the independent accountant's report apparently
contained in the Form 10-K should not be relied upon.  The
Company does not intend to file an amendment to its Form 10-K
for the fiscal year ended September 30, 2002 until Deloitte has
completed its audit and provided the Company with a signed audit
report.  The Company has received some preliminary comments from
Deloitte and anticipates correcting some errors that appear in
its financial statements. The Company does not know if the
changes to its financial statements requested by Deloitte will
be material. The Company has requested more definitive guidance
from Deloitte pursuant to Section 10A(k) of the Securities
Exchange Act of 1934 and hopes to hear from Deloitte in the near
future."

At approximately 11 PM EST on January 20, 2003, Mr. Castro
provided the Company with a proposed draft of the Form 8-K which
reads in relevant part as follows:  "The Company wishes to
advise all recipients of its Form 10-K for the year ended
September 30, 2002 filed on January 13, 2003 (1) that the use of
the name of Deloitte & Touche, the Company's independent
auditors, and the inclusion of the audit report that was
purportedly issued and signed by Deloitte & Touche was
unauthorized; (2) that Deloitte & Touche has not issued any
reports or provided its consent; and (3) that Deloitte & Touche
is not otherwise associated in any manner with the 2002 Form 10-
K. The Company does not intend to file an amendment to its Form
10-K for the fiscal year ended September 30, 2002 until Deloitte
& Touche has completed its audit and provided the Company with a
signed audit report.  The Company has determined that there are
material errors in its consolidated financial statements and
will correct those errors in an amended Form 10-K/A as soon as
possible."

The Company had not determined that there were material errors
in its consolidated financial statements at the time of the
filing of the Form 10-K. The Company was also discouraged by
Deloitte & Touche's insistence upon including in the text the
exact same wording that the Company had previously identified to
Deloitte & Touche as less than a fair and balanced disclosure of
historical events. The Company was also discouraged by Mr.
Castro's refusal to provide the Company with the contact
information of the individuals at Deloitte & Touche's national
office who Mr. Castro claimed were dictating the terms of the
proposed Form 8-K.

The Company reiterated its concerns to Deloitte and at
approximately 7:30 AM EST on January 21, 2003, Mr. Castro sent
the Company another proposed draft of the Form 8-K which reads
in relevant part as follows:  "The Company wishes to advise all
recipients of its Form 10-K for the year ended September 30,
2002 filed on January 13, 2003 (1) that the use of the name of
Deloitte & Touche, the Company's independent auditors, and the
inclusion of the audit report that was purportedly issued and
signed by Deloitte & Touche was unauthorized; (2) that Deloitte
& Touche has not issued any reports or provided its consent; and
(3) that Deloitte & Touche is not otherwise associated in any
manner with the 2002 Form 10-K.  The Company does not intend to
file an amendment to its Form 10-K for the fiscal year ended
September 30, 2002 until Deloitte & Touche has completed its
audit and provided the Company with a signed audit report. The
Company is aware that the financial statements that were filed
on January 13, 2003 contain errors. At this time the Company is
not aware of all of the changes to its financial statements that
will be required but will correct all errors in an amended Form
10-K/A as soon as possible."

At approximately 3 PM EST on January 21, 2003, Mr. Castro sent
the Company an email that reads in relevant part as follows
(translated from Spanish): "I confirm to you that the terms in
which the revised phrase "that Deloitte & Touche is not
otherwise associated in any manner with the Company's 2002 Form
10-K" refers to the filing with the errors that were sent on
Monday and in no instance does it mean that we are not involved
with the work to complete the audit for the 2002 10-K.  Also, I
confirm in writing our conversation regarding the fact that the
Form 8-K should be filed no later than one hour prior to the
market closing today. In the event this does not occur, we would
be sending the SEC a letter within the same parameters as the
one sent via fax to Don Federico last Friday."

Based upon conversations between Mr. Castro and the Company
between January 17, 2003 and January 20, 2003, by January 21,
2003 the Company believed that Deloitte & Touche did not intend
to provide the Company with a signed audit report for the
proposed Form 10-K by the close of business by January 21, 2003.
By January 21, 2003, the Company also believed that Deloitte
&Touche was not willing to meaningfully negotiate the terms of
the Form 8-K.

On January 21, 2003, the Company filed a Form 8-K announcing the
following: "It has come to the Company's attention that Deloitte
& Touche, the Company's independent auditors, did not provide
the Company with a signed audit report for inclusion in the
Company's Form 10-K. Accordingly, the independent accountant's
report apparently contained in the Form 10-K should not be
relied upon.  The Company does not intend to file an amendment
to its Form 10-K for the fiscal year ended September 30, 2002
until Deloitte & Touche has completed its audit and provided the
Company with a signed audit report.  The Company has been
working with Deloitte & Touche to finalize the financials to be
included in the Form 10-K amendment. The Company has received
some preliminary comments from Deloitte & Touche and anticipates
correcting some errors that appear in the financial statements
of the Form 10-K. The Company does not know if Deloitte & Touche
will have additional comments to the financial statements or if
the requested changes by Deloitte & Touche will be material."

On the evening of January 22, 2002, the CFO, the General Counsel
and outside counsel to the Company received a phone call from
various representatives of Deloitte & Touche. Deloitte & Touche
notified the Company that it was considering withdrawing from
its relationship with the Company due to Deloitte & Touche's
inability to trust management of the Company and Deloitte &
Touche's perception that the Company had responded
inappropriately to Deloitte's letter of January 16, 2002.
However, Deloitte & Touche confirmed that, prior to the filing
of the Form 10-K, Deloitte & Touche had never called into
question its ability to rely upon or trust management of the
Company.

On the evening of January 22, 2003, the Board and Audit
Committee also received a letter from Deloitte & Touche that
reads in relevant part as follows: "We believe the Form 8-K is
inaccurate and did not take into account (a) our letter to you
dated January 16, 2003, a copy of which is attached, advising
you of the actions we believed the Company should take with
respect to the Form 10-K filed by the Company on January 13,
2003 and (b) the extensive comments we provided to you on your
proposed draft of the Form 8-K.    Contrary to the statements
made in the Form 8-K filed, we believe that the Company was
aware that we had neither issued an auditors' report on the
Company's financial statements for the fiscal year ended
September 30, 2002 nor provided our consent in connection with
the Company's 2002 consolidated financial statements included in
the 2002 Form 10-K filed on January 13, 2003. Also, we believe
that the Company knowingly included an auditors' report
purportedly issued and signed by "Deloitte & Touche".  The
Company was also aware, at the time the 2002 Form 10-K was
filed, that there were material errors in the consolidated
financial statements included in such filing.  As a result of
the above, we are seriously evaluating our existing client-
auditor relationship."

The Company believes that some of the beliefs expressed in
Deloitte's letter of January 22, 2002 are unfounded. The Company
believes the Form 8-K is materially accurate and that the text
proposed by Deloitte & Touche was not a fair and balanced
disclosure of historical events (see discussion above). The
Company further believes that, until very shortly after the
filing of the Form 10-K, the Company's CFO believed the Company
was in the process of receiving the Signed Audit Report. In
addition, the Board and the Audit Committee believe that the
actions of Deloitte & Touche leading up to the filing
contributed to the CFO's belief that the Company was in the
process of receiving a Signed Audit Report from Deloitte &
Touche.

Contrary to Deloitte's statements of January 22, 2003, the Board
and the Audit Committee do not believe that the CFO thought, at
the time the Form 10-K was filed, that there were material
errors in the consolidated financial statements included in such
filing.  Aside from the events described above, the Company does
not believe there were any disagreements with Deloitte & Touche
on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of Deloitte &
Touche, would have caused it to make reference to the subject of
the disagreement in connection with its report.  The Company
anticipates that it will authorize Deloitte & Touche to respond
fully to the inquiries of the Company's prospective successor
accountant concerning any disagreements the Company has had, if
any, with Deloitte & Touche on matters of accounting principles
or practices, financial statement disclosure, or auditing scope
or procedure.  The Company is in the process of interviewing
several accounting firms to serve as the Company's new
independent accountants.

Subsequently:

On January 30, 2003, Rica Foods, Inc. filed an amendment to its
Annual Report on Form 10-K for the fiscal year ending September
30, 2002. The Form 10-K Amendment does not include a signed
audit report with respect to: (i) the consolidated balance
sheets of the Company and its subsidiaries as of September 30,
2002; and (ii) the related consolidated statement of income,
stockholders' equity, and cash flow for the year ended September
30, 2002. Accordingly, the 2002 Financial Statements have been
identified as "unaudited", should not be relied upon as audited
financial statements and do not meet the requirements of a Form
10-K filing.  As a result of the foregoing, the Company's Chief
Executive Officer and Chief Financial Officer did not at the
time of filing the Form 10-K Amendment, provide the Securities
and Exchange Commission with the certification required by
Section 906 of the Sarbanes-Oxley Act of 2002.


SHELBOURNE PROPERTIES: Sells Hilliard, Ohio Property for $4.6MM
---------------------------------------------------------------
Shelbourne Properties II, Inc. (Amex: HXE) and Shelbourne
Properties III, Inc. (Amex: HXF) announced that Tri-Columbus
Associates, a partnership in which Shelbourne Properties II,
Inc. holds a 20.66% interest and Shelbourne Properties III, Inc.
holds a 79.34% interest, sold its property located in Hilliard,
Ohio for a gross sales price of $4,600,000. After satisfying the
debt encumbering the property, closing adjustments and other
closing costs, net proceeds were approximately $2,050,000.

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


SHIMODA RESOURCES: Net Losses Raise Going Concern Doubts
--------------------------------------------------------
Shimoda Resources Holdings, Inc., has incurred net losses from
operations and has negative cash flows from operations.   These
conditions, Shimoda's auditors say, raise substantial doubt
about the Company's ability to continue as a going concern.

Shimoda Resources Holdings, Inc. was incorporated as ElPlata
Mining Corporation under the laws of the State of Nevada on
February 23, 1973 and restated its Articles of Incorporation on
September 30, 1999. The September 30, 1999 restatement changed
the Company's authorized number of shares of common stock from
20,000,000 to 100,000,000 and changed the stated par value per
share from $0.05 per share to $0.001 per share and changed the
Company's corporate name to ElPlata Corporation.  The Company
changed its corporate name to Shimoda Resources Holdings, Inc.
in April 2001. The Company's common stock, which is quoted on
the OTC Bulletin Board, had its ticker symbol changed from
"EPTN" to "SHDA" at that time.  The ticker symbol was
subsequently changed to "SHRH" in August 2001, when the Company
reverse split all issued shares of common stock by a ratio of
30:1, resulting in the Company's issued share capital of
5,000,000 shares of common stock with a par value of US$0.001
becoming 166,893 shares of common stock with a par value of
US$0.001.  In April 2002, the Company issued 111,000 shares of
common stock pursuant to the private  placement exemption
available in Regulation S promulgated under the Securities Act
of 1933, as amended.  The Company again issued a further 261,000
shares of common stock in a like exchange to acquire certain
mining  assets in April 2002 pursuant to the private placement
exemption available in Reglation S promulgated under the
Securities Act of 1933, as amended.

While the Company had been inactive since the close of its
fiscal year August 31, 1989, it re-commenced  operations in
April 2002, with the issuance of the new shares of common stock
and with the acquisition of  shares in two resource companies,
European Nickel plc and Gulf International Minerals, Limited.
It is the intent of the Company's management to execute its
business plan, focusing on the acquisition of resource licenses
and resource companies that are based in Eastern Europe. Its
business objective is to acquire  resource companies and
resource licenses of "Emerging Europe", namely the Russian
Federation ("Russia"),  other former Soviet Union republics or
Newly Independent States ("NIS"), and Central & Eastern Europe.
The NIS is comprised of the following countries:  Armenia,
Azerbaijan, Belarus, Estonia, Georgia, Kazakhstan,
Kyrgyzstan, Latvia, Lithuania, Moldova, Tajikistan,
Turkmenistan, Ukraine, and Uzbekistan.  The Caucasus  republics
are defined as Armenia, Azerbaijan and Georgia.  "Central &
Eastern Europe" means the region, which includes, as determnined
by the Company, Albania, Bulgaria, Czech Republic, Greece,
Hungary, Poland, Romania, Slovakia, Slovenia, Turkey and
countries of Former Yugoslavia.


SLATER STEEL: Secures Waiver of Debt Defaults Up to March 2003
--------------------------------------------------------------
Slater Steel Inc. (SSI) previously announced on December 20,
2002 that it obtained a waiver of any default of its financial
covenants up to March 31, 2003, and was required to secure
binding commitments by January 31, 2003, to enable the Company
to repay a significant portion of its credit facilities.  The
Company also said in December that it was in advanced
negotiations with lenders to secure an asset-based working
capital facility of not less than $200 million and a term
facility of $50 million.

Slater Steel's bankers waived the requirement that the Company
secure binding commitments for new credit facilities by
January 31, 2003 to allow it time to complete negotiations with
lenders. In waiving this condition, the bankers require that
Slater Steel deliver a binding commitment letter providing for a
refinancing of the Company's credit facilities by March 31,
2003.

The Company stated that it continues in advanced negotiations
with lenders regarding the refinancing of its debt and that it
intends to, and believes that it will, satisfy this requirement
by securing new facilities to repay outstanding debt, or by
restructuring its current credit agreement with its existing
bankers.

The waiver has also been amended to require Slater Steel to
maintain positive EBITDA (excluding certain charges) for each
calendar month. The Company confirmed that it is confident that
it will satisfy this condition.

Slater Steel Inc. common shares are listed on The Toronto Stock
Exchange and trade under the symbol SSI.

Slater Steel is a mini mill producer of specialty steel
products. The Company manufactures and markets bar and flat
rolled stainless steels, carbon and low alloy steel bar
products, vacuum arc and electro slag remelted steels, mold,
tool and die steels and hollow drill and solid mining steels.
The Company's mini mills are located in Fort Wayne, Indiana;
Lemont, Illinois; Hamilton and Welland, Ontario; and Sorel-
Tracy, Quebec.


SOLUTIA: Reports $21 Million Consolidated 4th Quarter Net Loss
--------------------------------------------------------------
Solutia Inc. (NYSE: SOI) reported a consolidated net loss of $21
million for the fourth quarter of 2002 versus a net loss of $101
million for the fourth quarter of 2001.  These results are in
line with the Company's guidance provided on January 9, 2003.

Excluding a charge of $4 million in the fourth quarter of 2002
and charges of $96 million in the fourth quarter of 2001,
Solutia reported a net loss of $17 million in the fourth quarter
of 2002 and a net loss of $5 million in the fourth quarter of
2001.

"During the quarter, Solutia experienced significant revenue
growth over the prior year's quarter. However, consolidated
earnings were adversely impacted by lower equity earnings from
joint ventures and higher interest expense resulting from the
Company's refinancing," noted John Hunter, chairman and chief
executive officer.

"Throughout this year, our employees have remained focused on
the actions that will continue to drive this company forward;
strong cash generation, reduction of debt and continued prudent
funding of growth initiatives. Despite the difficult and
uncertain environment in which we have been operating, we
generated in excess of $100 million of free cash flow in 2002
and were able to reduce our debt by $110 million over previous
year-end levels. In addition, the impending sale of the Resins,
Additives and Adhesives businesses, will place Solutia in a
stronger financial position going forward," Hunter stated.

"Looking ahead, difficult market conditions, including
relatively weak demand and elevated energy and raw material
costs will continue to challenge our businesses over the ensuing
months. To combat this difficult operating environment, and in
anticipation of the sale of the Resins, Additives and Adhesives
businesses, Solutia realigned its businesses and management
structure in December 2002 into two operating segments:
Performance Products and Integrated Nylon. This strategic
realignment, in combination with additional downsizing and other
cost cutting actions currently being implemented, will result in
a lower cost structure and a more focused organization, both of
which are critically important as we manage through these
uncertain times," he said.

                    Consolidated Results

On a consolidated basis, Solutia reported a fourth quarter net
loss of $21 million, or 20 cents per share, on net sales of $692
million. The fourth quarter 2002 net loss included a charge of
$4 million, or 4 cents per share, associated with the write-down
of assets in the Flexsys rubber chemicals joint venture. This
compares to a net loss for the fourth quarter of 2001 of $101
million, or 97 cents per share, on net sales of $643 million.
The net loss for the fourth quarter of 2001 included charges of
$96 million, or 92 cents per share, taken during the quarter for
Solutia's share of restructuring costs at its Astaris and
Flexsys joint ventures, increases to environmental and self-
insurance reserves, additional severance costs, and the write-
down of certain non-performing assets.

Excluding charges in both periods, Solutia's consolidated net
loss for the fourth quarter versus the year-ago period increased
$12 million, or 11 cents per share, due to elevated raw material
and energy costs, lower equity earnings from joint ventures and
increased interest expense, offset to some extent by higher
sales prices, continued benefits from cost reductions and lower
amortization expense.

For the full year, Solutia reported a net loss of $151 million,
or $1.44 per share, which included a charge of $167 million, or
$1.59 per share, associated with the adoption of SFAS No. 142
and net charges of $12 million, or 12 cents per share, comprised
of a gain from the sale of the AES joint venture, a charge for a
litigation settlement, a non-cash pension settlement and a
charge associated with an asset write-down in the Flexsys joint
venture. This compares to a net loss of $59 million, or 57 cents
per share, for the full year ended December 31, 2001. The net
loss for 2001 included the aforementioned charges of $96
million, or 92 cents per share, taken during the fourth quarter,
and a $17 million, or 16 cents per share, gain from an insurance
settlement.

Excluding charges in both periods, Solutia's 2002 net income
increased $8 million, or 8 cents per share, versus 2001 due to
lower raw material and energy costs, continued benefits from
cost reductions and lower amortization expense, partially offset
by lower average selling prices and higher interest expense.

            Results from Continuing Operations

For continuing operations, Solutia reported a fourth quarter net
loss of $17 million, or 16 cents per share, on net sales of $562
million. Fourth quarter 2002 net income included the
aforementioned charge of $4 million, or 4 cents per share. This
compares to a net loss from continuing operations for the fourth
quarter of 2001 of $102 million, or 98 cents per share, on net
sales of $518 million. The net loss from continuing operations
for the fourth quarter of 2001 included the aforementioned
charges of $96 million, or 92 cents per share.

For 2002, Solutia reported a net loss from continuing operations
of $8 million, or 8 cents per share, including $12 million, or
12 cents per share, of the aforementioned charges. This compares
to a net loss of $81 million, or 78 cents per share, for the
full year 2001. The net loss from continuing operations for 2001
included aforementioned charges of $96 million, or 92 cents per
share.

                       Segment Data

Performance Products' net sales for the fourth quarter of 2002
increased $3 million compared to the same period of 2001
primarily due to strengthened foreign currencies and higher
volumes, partially offset by lower average selling prices. Net
sales increased in the films' businesses on a quarter over
quarter basis as Solutia continues to enhance its customer base.

For the full year, Performance Products' net sales decreased $15
million primarily due to volume and price weakness in the
chlorobenzenes product line.

Excluding charges of $3 million taken in the fourth quarter
2001, Performance Products' profitability in the quarter
decreased $2 million versus the prior-year quarter primarily due
to higher raw material and energy costs.

On a full year basis, excluding charges taken in the fourth
quarter of 2001, Performance Products' profitability decreased
$2 million versus the prior year due to losses in the
chlorobenzenes product line, partially offset by lower raw
material and energy costs.

Integrated Nylon's net sales for the fourth quarter of 2002
increased $41 million compared to fourth quarter 2001 driven by
higher intermediates volumes and selling prices and stronger
volumes in the nylon plastics and polymers business.

2002 sales for Integrated Nylon decreased $12 million versus
2001 due primarily to lower average selling prices caused by
weakness in the North American economy.

Excluding charges in the prior year, Integrated Nylon's segment
profitability increased $11 million over the prior year quarter.
This improvement was driven primarily by improved selling
prices, favorable manufacturing variances, partially offset by
higher year over year raw material and energy costs.

Excluding charges in both periods, 2002 profitability for
Integrated Nylon increased $11 million versus the prior year due
to lower raw material and energy prices, partially offset by
lower average selling prices.

            Results from Discontinued Operations

For discontinued operations, Solutia reported a fourth quarter
net loss of $4 million, or 4 cents per share. This compares to
net income from discontinued operations for the fourth quarter
of 2001 of $1 million, or 1 cent per share.

For the year, Solutia reported net income from discontinued
operations of $24 million, or 23 cents per share. This compares
to net income from discontinued operations of $22 million, or 21
cents per share, for the full year ended December 31, 2001. The
net income from discontinued operations for 2001 included a gain
of $17 million, or 16 cents per share, from an insurance
settlement.

Full year results from discontinued operations exclude certain
costs previously allocated to these businesses, which were
required to be reported in continuing operations. These costs
are primarily administrative in nature and impacted continuing
operations by $10 million and $12 million pre-tax for 2002 and
2001, respectively. As previously mentioned, the Company is
taking actions to eliminate these costs in 2003. In addition,
interest expense associated with debt that is required to be
paid down with the anticipated transaction proceeds was
allocated to discontinued operations, totaling $26 million and
$20 million on a pre-tax basis for 2002 and 2001, respectively.

                         Cash Flow

Solutia reported consolidated free cash flow (cash flow from
operations less capital expenditures) of $67 million for the
fourth quarter, after funding $17 million of capital
expenditures. Focused working capital management helped deliver
strong free cash flow for the quarter. Solutia reported free
cash flow of $103 million for the full year 2002, after funding
$68 million of capital expenditures. This compares to negative
free cash flow of $50 million in 2001, after funding $94 million
of capital expenditures. The increase from 2001 is primarily
attributable to higher income tax refunds, lower working capital
and lower restructuring costs.

                     Debt Reduction

In the fourth quarter of 2002, Solutia reduced its debt by
approximately $56 million from third quarter levels, in addition
to using $150 million in cash proceeds from the July bond
offering that had been held in escrow to pay off the October
2002 maturity. For the full year, Solutia's debt was reduced by
$110 million.

                     Consent Decree

During the first quarter of 2003, Solutia anticipates approval
of the consent decree between the Company and the Environmental
Protection Agency relating to remediation in the Anniston,
Alabama community. Upon approval of the decree, Solutia plans to
take a charge to increase its environmental reserves to reflect
additional environmental spending needed to perform the work.

                       Outlook

The Company anticipates that uncertain economic conditions will
remain in its marketplaces for the foreseeable future. Volatile
raw material and energy costs will also continue to impact
operating results. Despite these anticipated difficult
conditions, the Company expects to continue generating positive
free cash flow.

                        Corporate Profile

Solutia -- http://www.Solutia.com-- uses world-class skills in
applied chemistry to create value-added solutions for customers,
whose products improve the lives of consumers every day. Solutia
is a world leader in performance films for laminated safety
glass and after-market applications; process development and
scale-up services for pharmaceutical fine chemicals; specialties
such as water treatment chemicals, heat transfer fluids and
aviation hydraulic fluid and an integrated family of nylon
products including high-performance polymers and fibers.
Solutia...Solutions For A Better Life.

The Troubled Company Reporter's December 9, 2002 edition
reported that Fitch Ratings affirmed the ratings of Solutia Inc.
Fitch currently rates Solutia's senior secured bank facility at
'BB-' and senior secured notes at 'B'.  The Rating Outlook's
Negative.

Solutia is selling its resins, additives and adhesives business
to UCB S.A. for $500 million.  Although the application of net
sale proceeds toward debt reduction could be significant, Fitch
sees that Solutia would be loosing a solid EBITDA-contributing
business and interest coverage may only be mildly affected.  In
addition, the company still faces challenging industry
conditions and the unknown impact of the final resolution to
ongoing polychlorinated biphenyl-related litigation.


SOLUTIA: Closes Sale of Resins, Additives & Adhesives Businesses
----------------------------------------------------------------
Solutia Inc. (NYSE: SOI) closed the sale of its resins,
additives and adhesives businesses to UCB S.A. for U.S. $500
million cash.

John C. Hunter, chairman, president and chief executive officer
of Solutia said, "We are pleased that we have been able to
conclude this sale quickly. Solutia will use the proceeds to
substantially pay down debt, which will strengthen our balance
sheet and provide us with greater flexibility to deal with
future business risk and uncertainty."  He added, "This sale
allows Solutia to focus on the growth and market penetration
opportunities that we are pursuing in our remaining businesses."

                    Transaction Details

The transaction is anticipated to be slightly cash accretive and
7 to 9 cents dilutive to earnings per share in 2003.  Upon
closing, a modest accounting gain is expected.  The company
expects approximately $40 million in cash interest savings in
2003.

The agreement includes 10 production sites that make liquid and
powder coatings resins, technical resins, additives products and
pressure-sensitive adhesives. The resins, additives and
adhesives businesses together employ approximately 1,700
individuals in 22 countries and have sales of approximately $560
million for the year ended Dec. 31, 2002.

                   Facilities Involved

Solutia will sell manufacturing facilities in: Wiesbaden,
Frankfurt-Fechenheim and Hamburg, Germany; Werndorf, Austria;
Romano d'Ezzelino, Italy; Dijon, France; Soborg, Denmark; La
Llagosta, Spain; Rayong, Thailand and Suzano, Brazil, as well as
research and development facilities in Graz, Austria, and
Springfield, Mass.

Solutia will continue to manufacture Resimene(R) amino cross-
linking resins for UCB at its LaSalle, Canada, facility, and its
Indian Orchard plant in Springfield, Mass., as well as Gelva(R)
adhesives also at the Indian Orchard facility.  All other
manufacturing assets at Indian Orchard will remain part of
Solutia.  The sale does not include Solutia's industrial
products businesses or its Butvar(R) specials and dispersions
and Santotac(R) thermoplastic resins.

                     Employee Information

As part of the agreement, current employees of the resins,
additives and adhesives businesses will transfer to UCB.  At the
La Salle, Canada, and Springfield, Mass., locations,
manufacturing employees will remain Solutia employees and
manufacture Resimene(R) resins and Gelva(R) adhesives for UCB
under operating agreements.  In a limited number of areas,
Solutia has agreed to provide transition services to UCB.

                     Corporate Profiles

Solutia ( http://www.Solutia.com) uses world-class skills in
applied chemistry to create value-added solutions for customers,
whose products improve the lives of consumers every day.
Solutia is a world leader in performance films for laminated
safety glass and after-market applications; process development
and scale-up services for pharmaceutical fine chemicals;
specialties such as water treatment chemicals, heat transfer
fluids and aviation hydraulic fluid and an integrated family of
nylon products including high-performance polymers and fibers.

UCB -- http://www.ucb-group.com-- with headquarters in Brussels
(Belgium), is a pharmaceutical and specialty chemical company,
which operates on a global scale. It is committed to
pharmaceuticals, as well as to technically innovative products
in surface applications. It employs 10,000 people around the
world. The pharmaceutical research of UCB includes the following
fields: respiratory, including allergy and asthma, and
neurology. UCB Pharma's main products include Zyrtec
(antiallergic), Keppra (antiepileptic), Nootropil (cerebral
function regulator) and Atarax (tranquillizer).


SUN WORLD: S&P Downgrades Rating to D In Wake of Bankruptcy
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on fresh produce grower and marketer Sun World
International Inc. to 'D' from 'CCC' and its senior secured debt
rating to 'D' from 'CCC+'. The ratings are  removed from
CreditWatch where they were placed on Oct. 11, 2002.

Total rated debt is about $115 million.

"The downgrade follows the announcement by Sun World's parent,
Cadiz Inc., that Sun World had filed for Chapter 11 bankruptcy
protection in order to secure financing for the upcoming growing
season," said Standard  & Poor's credit analyst Jayne M. Ross.
By filing for bankruptcy  protection, the company was able to
obtain $40 million in debtor-in-possession financing, which
should be more than sufficient to meet its financing needs.

Prior to the bankruptcy filing, Sun World had tried to obtain
$15 million in working capital funding in addition to the
availability under Sun World's secured revolving credit
facility. This additional funding would have been used to meet
Sun World's seasonal peak borrowing needs from April to June.
Previously, Sun World had relied on an intercompany revolving
credit facility from Cadiz, Sun World's parent, to meet its
seasonal requirements. However, Cadiz had determined it could
not provide  such financing this year. Furthermore, Sun World's
discussions with the  holders of the first mortgage bonds to
restructure the debt in order to  obtain a larger credit
facility were fruitless.

In October, 2002, Cadiz announced entered into an agreement to
extend its $35 million secured bank facility with ING Capital
LLC until Jan. 31, 2006.  As part of the extension, Cadiz issued
new warrants, which allow ING Capital, for nominal
consideration, to acquire 10% of Cadiz's common stock.  The
agreement was subject to the annual renewal of Sun World's
secured revolving credit facility.  In addition, Cadiz entered
into an agreement with the holders of the $12.5 million of
Cadiz's preferred stock to extend the mandatory redemption date
until July 2006 and reduced the conversion rate to $5.25 per
share.  Cadiz's refinancing followed the rejection of the
company's water storage project by the board of directors of the
Metropolitan Water District of Southern California.

Sun World is a participant in the highly competitive California-
based agriculture industry with more than 15,000 acres of owned
land. The company is a grower and marketer of table grapes,
watermelons, sweet peppers, plums, peaches, nectarines,
apricots, and lemons. The company also markets third-party
crops. Sun World is a wholly owned subsidiary of Cadiz, a
California-based organization, whose business strategy is to
create a portfolio of landholdings, water resources, and
agricultural operations within central and southern California.


SYSTECH: Seeks to Extend Schedule Filing Deadline to Feb. 27
------------------------------------------------------------
Systech Retail Systems (U.S.A.), Inc., and its debtor-affiliates
want the U.S. Bankruptcy Court for the District of North
Carolina to give them an extension in their schedules filing
deadline.

Pursuant to Section 521 of the Bankruptcy Code and Bankruptcy
Rule 1007, a debtor is required to file with the court its
schedule of assets and liabilities; statement of financial
affairs; schedule of current income and expenditures; statement
of executory contracts and unexpired leases; and list of equity
security holders.

The Debtors relate that they have several hundred creditors and
parties-in-interest, and operate their businesses in both the
United States and Canada through several corporations. Given the
size and complexity of their businesses, the Debtors have not
had the opportunity to gather the necessary information to
prepare and file their respective Schedules and Statements.

While the Debtors have commenced the task of gathering the
necessary information to prepare and finalize what will be
voluminous Schedules and Statements, the Debtors believe the
fifteen-day automatic extension of time to file such Schedules
and Statements provided by Bankruptcy Rule 1007(c) will not be
sufficient to permit completion of the Schedules and Statements.

The Debtors estimate that an extension until February 27, 2003,
will provide sufficient time to prepare and file the Schedules
and Statements.

Systech Retail Systems (USA) Inc., along with two other
affiliates filed for chapter 11 protection on January 13, 2003.
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.


TRENWICK GROUP: S&P Further Junks Ratings with Negative Outlook
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty
credit ratings on Trenwick Group Ltd. and the sub-holding
companies--LaSalle Re Holdings Ltd. and Trenwick America Corp--
to 'CCC-' from 'CCC+' and removed them from CreditWatch
following the announcement by Trenwick that it added $107
million to reserves as of year-end 2002.

Standard & Poor's also said that it lowered its counterparty
credit and financial strength ratings on Trenwick America
Reinsurance Corp., Dakota Specialty Insurance Co., LaSalle Re
Ltd., and Insurance Corp. of NY to 'CCC' from 'BB-' and removed
them from CreditWatch. In addition, Standard & Poor's lowered
its counterparty credit and financial strength ratings on
Chartwell Insurance Co. and Trenwick International Ltd. to 'CCC'
from 'B+' and removed them from CreditWatch. The outlook is
negative.

"Following the reserve additions, tangible capital at year-end
2002 will be marginally positive, and Trenwick's ability to
service its remaining obligations is increasingly uncertain,"
said Standard & Poor's credit analyst Karole Dill Barkley. "The
reserve additions are expected to bring regulatory capital
adequacy close to regulatory action levels, which further
threatens the likelihood of repayment of senior creditors."

If management does not successfully refinance the April maturity
of $75 million of senior debt, there is a covenant default to
the recently renewed bank letter of credit facility. Although
Trenwick continues to operate through its underwriting
arrangement with The Chubb Corp. and Trenwick America
Reinsurance Co. and through its syndicates at Lloyd's, the
emergence of earnings and dividend capacity to service existing
creditors in the near-term is uncertain.

The outlook on the companies is negative in the absence of
operating earnings and continued uncertainty.


TYCO INTERNATIONAL: Obtains $1.5 Billion Bank Credit Facility
-------------------------------------------------------------
Tyco International Ltd. (NYSE: TYC, BSX: TYC, LSE: TYI)
announced that Tyco International Group S.A., its wholly-owned
subsidiary, has entered into a new 364-day unsecured revolving
bank credit facility.  This new credit facility provides for
borrowing availability of $1.5 billion for general corporate
purposes. Tyco International Group S.A.'s obligations under the
new credit facility will be guaranteed by Tyco International
Ltd. and certain of its material operating subsidiaries.  The
facility was arranged by Banc of America Securities LLC and
Morgan Stanley Senior Funding, Inc.

Chairman and Chief Executive Officer Ed Breen said: "The closing
of this bank credit facility, combined with our recently
announced placement of $4.5 billion in convertible debentures,
eliminates the liquidity gap that the company would have faced
later this year.  With these liquidity issues behind us, we can
now focus all our attention on strengthening the operations of
Tyco's solid businesses."

               About Tyco International Ltd.

Tyco International Ltd. is a diversified manufacturing and
service company.  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 AIR: Court Okays Poorman Douglas' Employment as Agent
------------------------------------------------------------
James H.M. Sprayregen, at Kirkland & Ellis, anticipates that
thousands of creditors and other parties-in-interest involved in
United Airlines' Chapter 11 Cases may impose heavy
administrative and other burdens on the Court and the Office of
the Clerk of the Court.  To relieve the Clerk's Office of these
burdens, the Debtors sought and obtained the court's approval to
engage Poorman Douglas as their notice and claims agent in UAL's
Chapter 11 Cases.

Mr. Sprayregen explains that Poorman is one of the country's
leading Chapter 11 administrators with experience in noticing,
claims processing, claims reconciliation and distribution.
Poorman has substantial experience in large-scale Chapter 11
proceedings.  Poorman has acted or is acting as official notice
agent and claims agent in recent notable cases including:
Harnischfeger Industries, Inc., Flag Telecom, Allegheny Health,
Education and Research Foundation, World Access, Inc.,
Pittsburgh-Canfield Corp., Lodgian, Inc., and ITC Deltacom.

The Debtors' estates and particularly the creditors will benefit
from Poorman's significant experience and the efficient and
cost-effective methods that Poorman has developed.  Poorman is
fully equipped to handle the volume involved in properly sending
the required notices to and processing the claims of creditors
and other interested parties in these cases.  Poorman will
follow the notice and claim procedures that conform to the
guidelines promulgated by the Clerk of the Bankruptcy Court and
the Judicial Conference.

As the Debtors' notice and claims agent, Poorman will:

   1) Prepare and serve 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;

   2) 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
      and manner of mailing;

   3) Maintain copies of all proofs of claim and proofs of
      interest filed;

   4) Maintain official claims registers, including, among other
      things, this information for each proof of claim or proof
      of interest:

         i. the applicable Debtor;

        ii. 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;

       iii. the date received;

        iv. the claim number assigned; and

         v. the asserted amount and classification of the claim;

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

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

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

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

   9) Record all transfers of claims pursuant to Rule 3001(e) of
      the Federal Rules of Bankruptcy Procedure and provide
      notice of such transfers as required;

  10) Comply with applicable federal, state, municipal, and
      local statutes, ordinances, rules, regulations, orders and
      other requirements;

  11) Provide temporary employees to process claims, as
      necessary; and

  12) Promptly comply with other conditions and requirements as
      the Clerk's Office or the Court may at any time prescribe.

In connection with its engagement as notice and claims agent,
Poorman represents that:

   a) it will not consider itself employed or seek compensation
      from the United States government in its capacity as the
      notice agent and claims agent;

   b) by accepting employment in these Chapter 11 Cases, it
      waives any rights to receive compensation from the United
      States government;

   c) in its capacity as the notice and claims agent, it will
      not be an agent of the United States and will not act on
      behalf of the United States; and

   d) it will not employ any past or present employees of the
      Debtors in connection with its work as the notice and
      claims agent.

In addition, the Debtors seek the Court's authority to employ
Poorman to assist them with the reconciliation and resolution of
claims and the preparation, mailing and tabulation of ballots
for the purpose of voting to accept or reject any plans of
reorganization.

The Debtors will pay Poorman fees and expenses upon submission
of monthly invoices summarizing, in reasonable detail, the
services for which compensation is sought.  The Debtors agree to
provide Poorman with a $25,000 retainer to be applied to the
final billing.

Poorman's Bankruptcy Processing Fee Schedule:

Set-Up Fees
-----------
Creditor Data Provided in Electronic Format    $0.10 per record
Creditor Data Key Entered                      55.00 per hour

Notice Printing & Mailing
-------------------------
Notices Printed & Mailed-first image             .25 per notice
Additional Images                                .08 per page

Consulting & Claims Docketing Hourly Rates
------------------------------------------
Account Executive                             150.00 - 200.00
Technical Support                             100.00
Case Manager                                  105.00
Associate Case Manager                         75.00
Claims Processors                              55.00
Data Entry & Document Custody                  55.00
Clerical Support                               35.00

Reports
-------
Printed Reports                                  .15 per page
Web Presented Reports                          75.00 per report

Monthly Data Storage
--------------------
Creditor Records                                 .01 per
creditor
Images                                           .02 per image

Toll Free Customer Support
--------------------------
1-Time Voice Response Unit Set-Up           1,000.00
Message Recording Fee                         250.00
Voice Response Unit                              .39 per minute
                                              (plus line
charges)

Transcription of Messages                        .80 per message
Live Operator Support                          75.00 per hour
Monthly Minimum                               200.00 per month

Newspaper Notice Publishing                    Quote
Disclosure Statement & Reorganization Plan     Quote
Balloting Tabulation                          Hourly Rates

Disbursements
-------------
W-9 or 1099                                      .90 each
Issuance of Checks                              1.75 per check

Labels/Imaging/Copies/Miscellaneous
-----------------------------------
Labels                                           .06 per label
Imaging                                          .16 per image
Copies                                           .15 per copy
CD Creation                                    50.00
    Plus                                          .01 per image

Informational Website
---------------------
Set-Up                                     33,600.00
Monthly base fee                           10,000.00 per month
Access charge                                    .01 per
session
                                       ($5,000 monthly max
                                         charge)

Jeffrey B. Baker, Chief Executive Officer of Poorman-Douglas,
relates that a number of Poorman employees are participants with
open balances in Mileage Plus, the Debtors' frequent flyer
program.  "That certain Poorman employees maintain balances in
Mileage Plus does not affect Poorman's disinterestedness in
these Chapter 11 cases because the Debtors propose to honor
their Mileage Plus Program and individual employees, not Poorman
itself, participate in the Program," Mr. Baker explains.
(United Airlines Bankruptcy News, Issue No. 6; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

United Airlines' 10.670% bonds due 2004 (UAL04USR1), DebtTraders
reports, are Trading between 5.5 and 7.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=UAL04USR1for
real-time bond pricing.


UAL CORPORATION: Posts $3.2 Billion Loss for Year 2002
------------------------------------------------------
UAL Corporation (NYSE: UAL), the holding company whose primary
subsidiary is United Airlines, reported its fourth-quarter
financial results.

The company incurred a fourth-quarter loss of $1.5 billion, or a
loss per basic share of $20.70 (see Note: EPS Calculation). This
loss includes $77 million in special items and a non-cash tax
expense described in the notes to the financial tables. This
performance compares to a fourth-quarter 2001 loss of $308
million, or a loss per basic share of $5.68, including special
items.

UAL's loss for the full year, including the special items,
totals $3.2 billion, or a loss of $53.55 per basic share. This
compares to a full-year 2001 loss of $2.1 billion, or a loss of
$40.04 per basic share.

The company's results reflect an effective tax rate of zero for
2002. At a statutory tax rate of 36%, the net loss for the
quarter would have been $686 million, or a loss per basic share
of $9.65, and a net loss for the full year of $2.1 billion or a
loss of $34.56 per basic share, excluding special items.

"The biggest single challenge United faced in 2002 was to reduce
its costs, the highest in the industry, as the essential
underpinning of becoming a competitive, sustainable airline,"
said Glenn Tilton, chairman, president and chief executive
officer. "And United did everything within its control, slashing
costs in every aspect of the business -- without sacrificing
reliability and safety -- including reducing capital
investments, reducing airline capacity, furloughing employees,
obtaining concessions from vendors and more. Those initiatives
were simply not sufficient to address United's immediate and
long-term issues. We now have the opportunity in Chapter 11 to
make significant additional changes by working with our unions
and others. By making the difficult but critical changes
necessary to create a cost-competitive business, United can
succeed consistently over time.

"As we move forward in 2003, United will continue to compete
aggressively through smart initiatives that take us toward a
more compelling customer value proposition," Tilton continued.
"We'll achieve that by focusing on areas such as superb
operational performance, simplicity of fares, attractive routes,
good connectivity and more. Our employees have clearly
demonstrated their ability to focus relentlessly on operational
excellence and customer service even as we go through the
Chapter 11 process. Despite the distractions of this process,
United's people delivered record operational results, including
record-breaking on-time performance. I am grateful for this
continued, outstanding effort by our employees as they seek to
provide exceptional service to our customers."

                   Operational Performance

During 2002, United's employees set company records and turned
in industry-leading performance in a number of areas of critical
importance to customers. Highlights from the quarter include:

* The U.S. Department of Transportation ranked United #1 in on-
  time performance for the first 11 months of 2002.

* United's flight completion rate for 2002 was 99.3 % - an
  average of only 13 flights per day were cancelled out of
  approximately 1,700, compared to 99 flights cancelled per day
  in 2001.

* United successfully transitioned to 100 % inspection of all
  checked baggage with virtually no direct impact on customers.

* United experienced excellent load factors in 2002, including a
  record 90.7 % on Monday, Dec. 30.

"I can't say enough about the outstanding work our employees are
doing," said Pete McDonald, executive vice president --
Operations. "United's people are stepping up to a tremendous
challenge every day. United's operational performance is at the
top of the industry and it has not gone unnoticed by our
customers. I thank our employees for showing our customers that
we are committed not only to their safety, but to their comfort
as well."

                      Financial Results

UAL's fourth-quarter 2002 operating revenues were $3.5 billion,
up 18% compared to fourth-quarter 2001. Passenger revenue for
the quarter was up 12% from last year on a 6% capacity increase.
System passenger unit revenue was up 5% year-over-year, as
yields were 2% lower and load factor increased by 4 points.

United's load factor for the quarter was 72%, about a point
higher than the average for other network carriers and more than
four points higher than fourth quarter 2001.

Operating expenses for the quarter were up 16%. Excluding
special items, operating expenses of $4.4 billion were up 15%
and the company's unit cost, excluding its fuel subsidiary, was
up 5%. The unit cost increase was largely a result of the
effects of new labor agreements and contractual increases and
higher fuel expense. Average fuel price for the quarter was 86.5
cents per gallon, up more than 10% year-over-year. For the full-
year, fuel averaged 78.2 cents per gallon, down 10% year-over-
year. The company does not have fuel hedges in place for 2003.

During the fourth quarter, UAL recorded a special charge of $67
million for severance related to furloughs announced for various
employee groups. UAL also recorded $10 million in reorganization
items related to its bankruptcy filing, primarily consisting of
professional fees. The company recorded $326 million in
additional non-cash tax expense to achieve a zero effective tax
rate for the year. At year end, the company recorded a
significant minimum pension liability, resulting in an
approximate $2.4 billion non-cash charge to shareholder's
equity. The company's current tax situation does not allow this
charge to be made net of tax. At a statutory tax rate of 36%,
the pension equity charge would have been $1.5 billion.

UAL ended the quarter with a cash balance of $1.9 billion. UAL's
cash balance includes $579 million in restricted cash, including
$117 million in long-term restricted cash. During the quarter,
the company received $700 million in cash from its Debtor-In-
Possession (DIP) financing arrangements.

                     Financial Recovery

On Dec. 9, 2002, UAL filed for Chapter 11 bankruptcy protection
in the U.S. Bankruptcy Court for the Northern District of
Illinois. In connection with its Chapter 11 filing, the company
arranged for and has gained court approval of its $1.5 billion
in DIP financing provided by Bank One, J.P. Morgan Chase,
Citibank and CIT Group. The company has drawn $700 million on
this facility. This financing will help provide UAL with the
liquidity necessary to operate in the normal course throughout
the reorganization process.

Since December, UAL has made steps forward in restructuring its
operations, including reducing 2003 capacity by six percent as
compared to 2002; reorganizing the company's executive team;
realigning divisions; and completing plans to close certain
reservation call centers and all U.S. City Ticket Offices. In
January, the company also closed stations in Latin America and
Europe and announced plans to suspend operations to New Zealand
in March. Overall, the company has to date identified
approximately $1.4 billion in annual non-labor cost savings and
profit improvements.

On the labor side, in December, the company implemented wage
reductions of between approximately three and 11% for United's
salaried and management employees, and was successful in
collaboratively negotiating agreements on interim wage
concessions of nine to 29% with four of its six labor unions.
United also filed a motion under section 1113 of Chapter 11 of
the U.S. Bankruptcy Code in order to achieve interim wage
reductions from its two remaining unions; the court approved the
company's motion on Jan. 10, 2003. The interim wage concessions
from all six unions total approximately $70 million in monthly
labor savings for United effective through May 1, 2003.

                         Outlook

UAL expects to report a significant loss for the first quarter
of 2003. The company's domestic booked load factor is about the
same as it was last year, though United expects that the mix of
business traffic will be down. United's overall international
bookings are somewhat weaker, and the Pacific markets
specifically are being affected by a significant increase in
industry capacity in the region. United's outlook for the
quarter could be affected by the developing situation in Iraq.


US AIR: Delivers First Amended Joint Plan & Disclosure Statement
----------------------------------------------------------------
US Airways Group Inc. presented their First Amended Joint Plan
of Reorganization and Disclosure Statement to the Court.  There
are four material changes from the Original Plan and Disclosure
Statement.

                         Pension Issues

The Pension Benefit Guaranty Corporation's exposure has been
estimated at $200,000,000 to $1,000,000,000.  The Original Plan
listed this amount as "undetermined."  The PBGC is accorded the
same status as General Unsecured Creditors, to receive its pro
rata share of Common Stock, Preferred Stock and Warrants.

The Debtors previously estimated that their Pension Plan would
require a $2,600,000,000 cash infusion.  That figure has been
revised to a $3,100,000,000 cash infusion.

The Debtors tell the Court they have two alternative solutions
to their pension issues in the pipeline and they will pursue
both tracks simultaneously.

First, the Debtors seek legislative relief that would allow 30-
year pension funding.  On January 9, 2003, Senator Rick Santorum
introduced in the U.S. Senate S.119, which would make 30-year
funding of pension liabilities available for the Debtors'
defined benefit pension plans maintained pursuant to a
collective bargaining agreement.  The bill was referred to the
Senate Finance Committee on January 9, 2003.  On January 14,
2003, the Senate Committee on Appropriations Subcommittee on
Labor, Health and Human Services, and Education held a hearing
on the bill.

Based on financial projections, the Debtors could afford to fund
all of their pension plans if S. 119 were enacted, eliminating
the need to terminate the Pilots Plan.

Second, the Debtors may seek Bankruptcy Court approval of a
distress termination of the retirement income plan for Pilots of
US Airways, Inc.  If approved by the Court, the Debtors would be
authorized to terminate the Pilots Plan, which would require
additional notices and filings and processing by the PBGC.
Under ERISA, the PBGC is required to suspend processing of a
termination if the PBGC is notified of a formal challenge to the
termination under a collective bargaining agreement.  The
Debtors will try to negotiate with ALPA to satisfy all legal
requirements for the second alternative with an anticipated
completion of March 2003, including the negotiation and
implementation of a new pension plan for the Pilots consistent
with the funding level in the Debtors' financial projections.

If the Pilots Plan is terminated, the PBGC will have a claim for
the amount of the Pilots Plan's unfunded benefit liabilities, as
well as a claim for any minimum funding contributions due and
unpaid on the date of plan termination.

                     General Unsecured Creditors

General Unsecured Creditors, which includes the PBGC, were
slated to receive their pro rata share of 4,568,720 shares of
Class A Common Stock, 3,448,030 shares of Class A Preferred
Stock and 3,448,030 Class A-1 Warrants.

Under the Amended Plan, Unsecured Creditors stand to receive
400,000 more shares of Common Stock, or 4,968,720 shares.
However, 400,000 shares of Preferred Stock and 400,000 Warrants
are deducted -- bringing their payback to 3,048,030 Preferred
Shares and 3,048,030 Warrants.

                          The Plan Sponsor

Retirement Systems of Alabama, as Plan Sponsor, was to receive
19,784,660 shares of Class A Common Stock.  RSA will now receive
20,652,593 shares.  Labor Groups were to receive 8,238,165
shares.  The Amended Plan provides them with 8,270,232 shares.
Additionally, the Plan Sponsor was to get 3,128,600 shares of
Class A Preferred Stock and 3,128,600 Warrants.  The Amended
Plan gives the RSA 1,380,570 shares and 1,380,570 Warrants.

                                EDS

EDS claim filed a claim that was originally for $1,163,000,000.
Approximately $63,000,000 of this claim relates to invoiced but
unpaid prepetition services for the ITS Agreement and Baggage
Agreement.  The docketed amount incorrectly included a
contingent claim for $1,100,000,000 in case the ITS Agreement or
the Baggage Agreement are rejected.  This error has been
corrected so that the claims registry only reflects a claim for
$63,000,000.  EDS reserves all rights to assert rejection damage
claims if rejections of these contracts occur.

                           *     *     *

The Official Committee of Unsecured Creditors endorses the plan
and recommends that all holders of general unsecured claims and
general unsecured convenience claims vote to accept the plan.
(US Airways Bankruptcy News, Issue No. 24; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

DebtTraders reports that US Air Inc.'s 10.375% ETC due 2013
(UAWG13USR2) are trading between 10 and 20. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=UAWG13USR2
for real-time bond pricing.


US AIR: Restructures Aircraft Purchase Agreements with Airbus
-------------------------------------------------------------
US Airways and Airbus have reached an agreement in principle to
restructure US Airways' existing orders for A330 and A320 family
aircraft. The new agreement will enable US Airways to complement
its existing fleet of A330-300 aircraft with A330-200 aircraft,
and better match its future fleet of A320 family aircraft for
domestic single-aisle operations. It would substitute a new firm
order for 10 A330-200 aircraft and 19 A320 family aircraft for
existing firm orders of one Airbus A330-300 and 37 A320 family
aircraft.

"We have a great partnership with Airbus, as demonstrated by
this agreement," said US Airways President and Chief Executive
Officer David Siegel. "Long-term, we see Airbus playing an
important role in our company's future, and this agreement
confirms our commitment to begin taking delivery of new aircraft
once we are in a better financial position."

Separately, US Airways has filed a motion with the bankruptcy
court seeking relief from lease obligations from a variety of
financial institutions for up to 29 A320 family aircraft
currently operating in the US Airways fleet. If granted, this
will give the airline significant flexibility to complete lease
restructuring negotiations and determine the final make-up of it
fleet upon emergence from bankruptcy.

As part of the company's current fleet plan, US Airways will
continue to operate no fewer than 279 aircraft upon emergence
from bankruptcy.


VIASYSTEMS: Completes Recapitalization & Emerges from Bankruptcy
----------------------------------------------------------------
Viasystems Group, Inc. and Viasystems, Inc. completed their
previously announced recapitalization and have emerged from
their pre-packaged bankruptcy process.  Completion of the
financial recapitalization leaves Viasystems with long-term
debt, net of cash, of less than $400 million and significantly
improved free cash flow through the elimination of nearly $70
million in annual interest charges.

"The announcement marks both the end of our recapitalization
process and the beginning of Viasystems' revival. For the past
two years, Viasystems has grappled with the unprecedented
downturn in the global electronics industry along with a high
debt load," said David M. Sindelar, chief executive officer. "In
response to market conditions, management has taken aggressive
steps to substantially reduce our overall cost position. The
culmination of the recapitalization process eliminates our high
debt load. I'm proud to congratulate all of our team members for
the successful reshaping of Viasystems to meet the current
industry environment. Viasystems and its customers and suppliers
can now turn their attention to business opportunities."

Timothy L. Conlon, president and chief operating officer, added,
"Viasystems today is the company that our customers want --
focused on providing high-quality electronic products and
services to targeted market segments at a competitive cost. We
listened to our customers' needs and delivered on the promises
we made to them. We now begin to build a new legacy for
Viasystems through a global manufacturing footprint with the
industry's highest percentage of facilities in the lowest-cost
regions, a sensible balance sheet and mission focused on working
with customers from the design phase through final production."

Viasystems Group, Inc. is a leading global EMS provider with
more than 18,000 employees worldwide supplying customers in the
automotive, consumer, computing and data communications,
industrial and instrumentation, and telecommunications
industries.


WARNACO GROUP: Walking Away from TRI Development Lease
------------------------------------------------------
Pursuant to Section 365(a) of the Bankruptcy Code, Warnaco
Group, Inc. seek the Court's authority to reject a lease with
TRI Development LLP effective September 30, 2003 and to amend
Plan Schedule 3.2.

Kelley A. Cornish, Esq., at Sidley Austin Brown & Wood LLP, in
New York, relates that Warnaco Inc. and TRI, as successor-in-
interest to TRI Development, are parties to a lease for the
premises located at 105 Genesis Parkway in Thomasville, Georgia,
dated as of August 1, 1996, as amended from time to time.
Pursuant to the Lease, Warnaco leases a commercial space for
manufacturing and storage for their intimate apparel division at
$29,100 per month.  The Lease is set to expire in 2008.

Ms. Cornish reports that under the Debtors' First Amended Plan
of Reorganization, the Lease supposed to be assumed.  However,
upon further analysis of their long-term business plan, the
Debtors have determined that they will not require the use of
the commercial space covered by the Lease beyond September 30,
2003.

Accordingly, Ms. Cornish contends, the lease rejection should be
allowed by the Court to eliminate the unnecessary operating
costs incurred under the Lease on a going forward basis --
totaling $1,900,000 over the life of the Lease.  Furthermore,
with the rejection, Plan Schedule 3.2 should be deemed amended
to exclude the Lease. (Warnaco Bankruptcy News, Issue No. 42;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


WORLDCOM INC: Rejects America West FlightFund Deal
--------------------------------------------------
Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New
York, relates that America West Airlines, Inc., hosts a program
pursuant to which participants are issued frequent flyer miles
for traveling on America West and for purchasing certain goods
and services offered by participating companies in association
with the FlightFund Program.  Worldcom Inc., and its debtor-
affiliates joined with America West in forming a special option
for FlightFund Members who are or become the Debtors' customers.
FlightFund Members enrolled in the joint program are awarded
Frequent Flyer Miles for each dollar spent on those services.

In connection with the FlightFund Program, on May 15, 2000, the
Debtors entered into a Frequent Flyer Mile purchase agreement
with America West.  The initial term of the FlightFund Agreement
expires on August 31, 2003.

In accordance with the terms of the FlightFund Agreement, Ms.
Goldstein explains that the Debtors are required to purchase a
minimum amount of Frequent Flyer Miles.  Specifically, during
the first year of the FlightFund Agreement, the Debtors were
required to purchase at least $4,000,000 worth of Frequent Flyer
Miles. During the second and third years of the FlightFund
Agreement, September 1, 2001 through August 31, 2002 and
September 1, 2002 through August 31, 2003, the Debtors are
required to purchase at least $5,000,000 worth of Frequent Flyer
Miles per year.  The Debtors, however, purchased only $2,500,000
worth of Frequent Flyer Miles in the second year of the
FlightFund Agreement and anticipates a similar shortfall in the
third year as well.

In accordance with the terms of the FlightFund Agreement, Ms.
Goldstein reports that the Debtors are obligated to spend at
least $12,000,000 during the term of the Agreement on marketing
activities associated with the FlightFund Program.  To date, the
Debtors have spent $7,300,000 of the Marketing Commitment.
Finally, the FlightFund Agreement provides that the Debtors will
be the exclusive telecommunications provider associated with the
FlightFund Program.

Thus, the Debtors sought and obtained the Court's authority,
pursuant to Section 365(a) of the Bankruptcy Code and Rule 6006
of the Federal Rules of Bankruptcy Procedure, to reject the
FlightFund Agreement, effective as of April 30, 2003.

Because the Debtors did not meet the Minimum Commitment in year
2 and anticipate it will not meet the Minimum Commitment in year
3, the Debtors have concluded that continued marketing of the
FlightFund Program to its customers is not warranted.

Notwithstanding the rejection, the Debtors would like to
provide, as an accommodation, sufficient notice to its customers
regarding the termination of the FlightFund Program.  The
Debtors believe that a six-month wind-down period is
appropriate.  America West has agreed to this shortened wind-
down period, which has commenced on November 1, 2002.

In exchange for America West's agreement to shorten the wind-
down period, Ms. Goldstein tells the Court that the Debtors will
release America West from the Exclusivity Provision in the
FlightFund Agreement as of November 1, 2002.  Additionally,
America West may not use or disclose to any other entity at any
time any information that identifies the Debtors' FlightFund
Members, and the Debtors may not use or disclose to any other
entity at any time any information that identifies FlightFund
Members.  America West will not uniquely target or uniquely
market any program to Debtors' FlightFund Members, and the
Debtors will not uniquely target or uniquely market any program
to FlightFund Members.

Furthermore, Ms. Goldstein continues that America West will not
use or consent to the use of the Debtors' logos, trademarks,
trade names, or service marks to market the FlightFund Program.
Additionally, as of November 1, 2002, the Debtors will
discontinue enrollment of customers into the FlightFund Program.
During the period of March 1, 2003 to April 30, 2003, the
Debtors will pay a discounted rate for Frequent Flyer Miles
purchased under the FlightFund Agreement.  Specifically, during
the months of March and April 2003, the Debtors will pay $0.0135
per usage mile in lieu of the contract rate of $0.0145 per usage
mile. (Worldcom Bankruptcy News, Issue No. 18; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

DebtTraders says that Worldcom Inc.'s 8.000% bonds due 2006
(WCOE06USR2 ) are trading between 21.875 and 22.375. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCOE06USR2
for real-time bond pricing.


WORLD HEART: Completes CDN$10MM Financing with Argosy Bridge
------------------------------------------------------------
World Heart Corporation (TSX: WHT, OTCBB: WHRTF) completed a
CDN$10 million debt financing transaction last week.  This
closing announcement is incremental to the previously disclosed
CDN$3 million private equity placement for a total transaction
value of CDN$13 million.

The CDN$10 million debt transaction was led by Argosy Bridge
Fund L.P. I (The Bridge Fund(TM)) and consists of a senior loan
totaling CDN$7 million of which The Bridge Fund(TM) loaned CDN$5
million and a subordinated loan of CDN$3 million. The loans will
mature on July 31, 2003 and include a total of 3,000,000
warrants, each exercisable into one WorldHeart share for a
period of five years at a price of $1.60 per share.

WorldHeart intends to use the proceeds of this transaction to
fund sales and marketing expenses relating to its Novacor(R)
LVAS, continue funding the development of its optimized
HeartSaverVAD(TM), to repay an outstanding CDN$2 million credit
facility and for general corporate and operating purposes. The
credit facility was entered into in December 2002 and included
200,000 warrants, each exercisable into one WorldHeart share for
a period of five years at a price of $1.30 per share.

"Our strategy was to secure adequate near-term operating funding
while at the same time limit future dilution to our
shareholders," says WorldHeart Chief Financial Officer Ian
Malone. "We believe we accomplished this by structuring the
transaction through a combination of debt and equity. Continued
delivery of both product and capital market milestones should
allow us to complete a subsequent capital transaction on more
favorable terms than have recently been available to us."

Michael Boyd, Managing Partner of The Bridge Fund(TM) concurs.
"We were being quite selective as to which company would be our
first investment. We set up The Bridge Fund(TM) in order to fund
situations where we perceive there to be an under-recognized
enterprise value and where the company believes that new equity
would be either too expensive or too slow. We view WorldHeart as
having both a world-leading product in Novacor(R) LVAS and a
world-leading development team. If WorldHeart is correct that
their share price going into this transaction was undervalued
and they are able to benefit from an extended period of time
during which to complete a transaction on better terms, then
the use of The Bridge Fund(TM) will have accomplished what it
was set up to do."

              About the Novacor(R) LVAS

WorldHeart's Novacor(R) LVAS is an electromagnetically driven
pump that provides circulatory support by taking over part or
all of the workload of the left ventricle. Novacor(R) LVAS is
approved in Europe without restrictions for use by heart failure
patients; and in the United States and Canada as a bridge to
heart transplantation. It is approved for use in Japan by
cardiac patients at risk of imminent death from non-reversible
left ventricular failure for which there is no alternative but a
heart transplant.

                   About WorldHeart

World Heart Corporation, with a September 30, 2002 shareholders
equity deficit of about C$35.4 million, is a global medical
device company based  in Ottawa, Ontario and Oakland,
California. It is currently focused on the development and
commercialization of pulsatile ventricular assist devices. Its
Novacor(R) LVAS (Left Ventricular Assist System) is well
established in the marketplace and its next-generation
technology, HeartSaverVAD(TM), is a fully implantable assist
device intended for long-term support of patients with end-stage
heart failure.

               About The Bridge Fund(TM)

The Bridge Fund(TM) is a Canadian limited partnership funded by
several large institutional investors and individual investors.
Established to fill the gap between senior debt (operating and
term facilities) and subordinated or mezzanine debt, The Bridge
Fund(TM) provides short-term, high yield financing to companies
whose "going concern" value exceeds their conventional credit
criteria. The General Partner of The Bridge Fund is Argosy
Bridge Management Inc., a private company owned by Michael Boyd
and Argosy Partners Ltd. The Bridge Fund(TM) website is
http://www.bridgefund.com.


* EPIQ Acquires Bankruptcy Services & Enters Chapter 11 Market
--------------------------------------------------------------
EPIQ Systems, Inc. (Nasdaq: EPIQ) has acquired Bankruptcy
Services LLC (BSI), a national leader in Chapter 11 case
management services, for $66 million, consisting of $49.5
million cash and $16.5 million (1.054 million shares) of
restricted EPIQ Systems common stock.

For the nine months ended September 30, 2002, BSI's audited
revenue was $16.3 million. After the closing, EPIQ Systems will
operate BSI as a wholly owned subsidiary with a future profit
margin comparable to that of EPIQ Systems' current bankruptcy
services business unit.

BSI provides technology-based case management services to large,
high profile Chapter 11 cases, including WorldCom, Enron, Global
Crossing and Adelphia Communications. For the twelve-month
period ended September 30, 2002, the number of Chapter 11
bankruptcy filings rose 11% to an unprecedented high. In all,
191 public companies filed for bankruptcy in 2002, citing record
debt levels as the primary cause for their financial duress.

Upon completion of this acquisition, EPIQ Systems will be
ideally positioned to provide end-to-end solutions for
bankruptcies proceeding under every chapter -- including
Chapters 7, 11 and 13 -- and for cases of any size. EPIQ Systems
offers customers -- including debtors, their attorneys, and
bankruptcy trustees -- comprehensive solutions which enable
trustees to manage virtually every aspect of their caseloads.

Tom W. Olofson, chairman and CEO, and Christopher E. Olofson,
president and COO, said, "The BSI acquisition gives us an
immediate leadership position in the Chapter 11 sector and
complements our current penetration in Chapter 7 and Chapter 13.
EPIQ Systems is now the industry's only full-service provider of
technology-based bankruptcy case administration services
spanning every chapter and facet of bankruptcy."

The principle executives of BSI have entered into long-term
employment and consulting agreements to remain with the company.
BSI's offices will remain in New York City, and the company will
retain its existing management team and staff.

Ron Jacobs, president of BSI, commented, "We are very pleased to
align with a national leader in bankruptcy technology systems.
We look forward to enhancing our customer service offerings in
ways that would not have been possible before this transaction.
BSI and EPIQ Systems are committed to providing Chapter 11
customers the highest level of uninterrupted service and the
industry's best technologies."

EPIQ Systems, Inc. develops, markets and licenses proprietary
software solutions for workflow management and data
communications infrastructure that serve the bankruptcy market
and the infrastructure software market. For more information,
visit our Web site at http://www.epiqsystems.com


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


                         *********

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

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

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

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

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

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


                          *********

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

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

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

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

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

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