TCR_Public/030205.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

           Wednesday, February 5, 2003, Vol. 7, No. 25    

                          Headlines

ADVANCED TISSUE: Terminates License & Supply Pact with Biozhem
AIRGATE PCS: Plans to Appeal Nasdaq Delisting Determination
AIRTRAN AIRWAYS: Revenue Passenger Miles Up 41% in January
ALLMERICA FINANCIAL: Full-Year 2002 Net Loss Stands at $306 Mil.
ALTERRA HEALTHCARE: Seeks Nod to Obtain Postpetition Financing

ANC RENTAL: Request to File Sabre Settlement Under Seal Nixed
ARCH COAL: Completes 5% Convertible Preferred Share Offering
ARMSTRONG: Has Until July 31 to Move Actions to Delaware Court
ASIA GLOBAL CROSSING: Gets Court's Final Nod to Hire Gibson Dunn
BETHLEHEM STEEL: Will Conduct NJ Asset Sale Auction on Monday

BILLSERV INC: Commences Trading on OTCBB Effective February 4
BROOKS-PRI AUTOMATION: Hire Edward C. Grady as President and COO
BUDGET GROUP: Has Until March 31 to Make Lease-Related Decisions
BURGER KING: Launches Franchisee Financial Workout Initiative
CINEMARK USA: Issuing $150M Sr. Sub. Notes via Private Placement

CONSECO INC: Court Okays Gregory P. Joseph as Special Counsel
COVANTA ENERGY: Secures Stay Relief to Resolve OSHCC Interests
CROWN CORK: S&P Assigns B Rating to $3.1-Billion Bank Facility
DE KALB COUNTY: S&P Hatchets Housing Bond Ratings to Low-B Level
DENNY'S CORP: George W. Haywood Discloses 8.4% Equity Stake

DYNEGY INC: Names Jim Horsch as Vice President of Internal Audit
ECHOSTAR COMMS: Completes Early Redemption of 9.25% Senior Notes
EMERGENT GROUP: Dec. 31 Working Capital Deficit Tops $2 Million
FAO INC: Files Reorg. Plan and Disclosure Statement in Delaware
FEDERAL-MOGUL: Gets Removal Period Extension Until June 1, 2003

FISHER SCIENTIFIC: Full-Year 2002 Results Show Solid Performance
FLAVIUS LTD: Fitch Downgrades Four Note Classes to Junk Level
FRIENDLY ICE CREAM: FleetBoston Discloses 10.63% Equity Stake
GARDENBURGER INC: Dec. 31 Net Capital Deficit Widens to $48 Mil.
GCI INC: Meets Performance Targets for Fourth Quarter 2002

GENUITY: Completes Asset Sale Transaction with Level 3 Comms.
GENUITY INC: Obtains Lease Decision Deadline Extension to May 5
GEOWORKS: Enters Mutual Release with Teleca to Cease UK Business
GLOBAL CROSSING: Resolves Claims Dispute with Alcatel Entities
HELLER: Fitch Rates Four Note Classes at Low-B & Junk Levels

INLAND RESOURCES: Inks Workout Pact with Banks, TCW & Smith
INTEGRATED HEALTH: Rotech Wants More Time to Challenge Claims
KEY3MEDIA: S&P Drops Sr. Sec. Rating to D after Chap. 11 Filing
KMART CORP: Pulls Plug on Supply Arrangement with Fleming Cos.
KMART CORP: SEC Has Until April 29, 2003 to File Proofs of Claim

LAIDLAW INC: Confirmation Hearing is Scheduled for February 24
LERNOUT: Sues 7 Prepetition Professionals to Recover Transfers
MERITAGE CORP: S&P Revises B+ Credit Rating Outlook to Positive
METROCALL: Asks Court to Delay Final Decree Until September 29
METROMEDIA INT'L: Taps CEA as Cable TV Asset Sale Representative

MISSION RESOURCES: Fails to Comply with Nasdaq Listing Standards
MOBILE SERVICES: S&P Withdraws Ratings over Failure to Sell Debt
NATIONAL CENTURY: Seeks First Extension of Exclusive Periods
NAVIGATOR GAS: Creditors' Meeting Convenes Tomorrow
NETZEE INC: Will Make Liquidating Distribution This Week

NEWCOR INC: Successfully Emerges from Chapter 11 Proceeding
OWENS CORNING: Proposes Uniform Property Damage Claim Procedures
PACIFIC GAS: Hires Century 21 Alliance as Real Estate Broker
PENINSULA GAMING: S&P Revises Outlook on Low-B Rating to Stable
PENTON MEDIA: Expects to Fall Short of Fourth Quarter Guidance

PETROLEUM GEO-SERVICES: Fitch Affirms C Senior Unsecured Rating
PHAR-MOR: Follows Marsico to McGuireWoods as Litigation Counsel
RECIPROCAL OF AMERICA: Ratings Revised to R After Receivership
REGUS BUSINESS: Turns to FTI Consulting for Financial Advice
REPTRON: S&P Drops Corporate Credit & Sub. Note Ratings to D

RESOURCE AMERICA: Board Approves Payment of Cash Dividend
RITE AID: Offering $200-Million of Senior Secured Notes Due 2011
SASKETCHAWAN WHEAT: Noteholders Back Modified Workout Proposal
SERVICE MERCHANDISE: Wants Nod for Lighton Compromise Agreement
SIERRA PACIFIC: Inks Debt Swap Pact to Enhance Balance Sheet

SOUTHERNERA RES.: Secures New Financing to Support Debt Workout
SYSTECH RETAIL: Brings-In Genovese Joblove as Bankruptcy Counsel
T&W FUNDING: Fitch Further Cuts Junk Ratings on 4 Note Classes
TAUNTON CDO: Fitch Puts BB+/CCC+ Note Ratings on Watch Negative
TAYLOR GROUP: Year 2002 Results Swing-Down to $41MM in Net Loss

TRANSWESTERN PIPE: Fitch Ups Sr. Unsecured Rating to B+ from CC
TRENWICK GROUP: Loss Reserves Spur AM Best to Downgrade Ratings
UNITED AIRLINES: Court Okays Babcock to Render Financial Advice
UNIVERSAL BROADBAND: Dennis Johnston Reports 5.53% Equity Stake
US AIRWAYS: Narrows Fourth Quarter 2002 Net Loss to $794 Million

US AIRWAYS: Earns Approval to Reject 9 More Aircraft Leases
U.S. ENERGY CORP: Grant Thornton Expresses Going Concern Doubt
U.S. STEEL: Commences $200-Mill. Convertible Preferred Offering
USEC INC: Red Ink Flowed in Stub Year and Fourth Quarter 2002
WARNACO: Emerges from Bankruptcy Proceeding Effective February 4

WARNACO: Stipulation Allows Setoff with U.S. Customs Service
WHEREHOUSE: Seeking Court's Nod to Pay Critical Vendors' Claims
WKI HOLDING: S&P Rates Sr. Secured & Subordinated Debt at B/CCC+
WORLD KITCHEN: Successfully Emerges from Chapter 11 Proceeding
WORLDCOM INC: Initiates Action to Reduce Cost Structure by $2.5B

W.R. GRACE: Wants Plan Filing Exclusivity Extended to August 1

* Kirkpatrick Brings-In Martin Allen as New Partner in Boston

* Meetings, Conferences and Seminars

                          *********

ADVANCED TISSUE: Terminates License & Supply Pact with Biozhem
--------------------------------------------------------------
Advanced Tissue Sciences, Inc., (OTC BB: ATISQ) terminated its
license and supply agreement with Biozhem Cosmeceuticals, Inc.,
related to NouriCel.

The contract, which entitled Biozhem to use NouriCel in skin
care products in the direct response market, was terminated due
to Biozhem's default on certain obligations, including failure
to pay minimum royalties and a $1 million milestone due to
Advanced Tissue Sciences on Nov. 30, 2002. Biozhem owes the
company a total of about $2.5 million.

On Jan. 6, 2003, the company announced it had entered into an
agreement to sell its NouriCel product line and related
intellectual property to SkinMedica, Inc., subject to the
approval of the bankruptcy court, satisfactory due diligence
review by SkinMedica as well as standard closing conditions.

Advanced Tissue Sciences plans to file its formal plan of
reorganization within the exclusivity period which ends Friday,
February 7, 2003.  

Advanced Tissue Sciences, Inc., develops and manufactures human-
based tissue products for tissue repair and transplantation.  
The company sought chapter 11 protection on October 10, 2002
(Bankr. Case No. 02-09988, S.D. Calif.) in San Diego.  Eric J.
Fromme, Esq., at Gibson, Dunn & Crutcher LLP, serves as lead
counse.  The company reported $32,200,000 in assets and
$16,900,000 in total debt at the time of the Chapter 11 filing.
Consistent with the decision to liquidate assets, the company is
marketing its remaining assets.  Eureka Capital Markets, LLC,
the company's financial and liquidation advisors, are actively
involved in the marketing of those assets.  Those interested in
purchasing assets should contact George Kidd, Managing Director,
Eureka Capital Markets, at (414) 332-8075.


AIRGATE PCS: Plans to Appeal Nasdaq Delisting Determination
-----------------------------------------------------------
AirGate PCS, Inc. (NASDAQ/NM: PCSA), which reported a total
shareholders' equity deficit of about $293 Million (as at
Sept. 30, 2002), received a Nasdaq Staff Determination letter
dated January 28, 2003, indicating that because of the Company's
failure to regain compliance with the minimum $1.00 bid price
per share requirement for continued listing contained in
Marketplace Rule 4450(a)(5), its securities are subject to
delisting from the Nasdaq National Market at the opening of
business on February 6, 2003, unless it appeals this
determination. Additionally, Nasdaq has determined that the
Company does not comply with the minimum $10 million
stockholders' equity requirement under Maintenance Standard 1,
as set forth in Marketplace Rule 4450(a)(3), or the market value
of publicly held shares and minimum bid requirement under
Maintenance Standard 2, as set forth in Marketplace Rule
4450(b)(3) and (4), for continued listing on The Nasdaq National
Market.

The Company intends to file an appeal and request a hearing
before a Nasdaq Listing Qualifications Panel to review the Staff
Determination. There can be no assurance the Panel will grant
the Company's request for continued listing.

Until the Panel reaches its decision, AirGate's common stock
will remain listed and will continue to trade on the Nasdaq
National Market.

AirGate PCS, Inc., including its unrestricted subsidiary iPCS,
is the PCS Affiliate of Sprint with the exclusive right to sell
wireless mobility communications network products and services
under the Sprint brand in territories within seven states
located in the Southeastern and Midwestern United States. The
territories include over 14.5 million residents in key markets
such as Grand Rapids, Michigan; Charleston, Columbia, and
Greenville-Spartanburg, South Carolina; Augusta and Savannah,
Georgia; Champaign-Urbana and Springfield, Illinois; and the
Quad Cities areas of Illinois and Iowa. AirGate PCS is among the
largest PCS Affiliates of Sprint.

Sprint operates the nation's largest all-digital, all-PCS
wireless network, already serving more than 4,000 cities and
communities across the country. Sprint has licensed PCS coverage
of more than 280 million people in all 50 states, Puerto Rico
and the U.S. Virgin Islands. In August 2002, Sprint became the
first wireless carrier in the country to launch next generation
services nationwide delivering faster speeds and advanced
applications on Vision-enabled phones and devices. For more
information on products and services, visit www.sprint.com/mr.
Sprint PCS is a wholly-owned tracking stock of Sprint
Corporation trading on the NYSE under the symbol "PCS." Sprint
is a global communications company with approximately 75,000
employees worldwide and $26 billion in annual revenues and is
widely recognized for developing, engineering and deploying
state-of-the art network technologies


AIRTRAN AIRWAYS: Revenue Passenger Miles Up 41% in January
----------------------------------------------------------
AirTran Airways, a subsidiary of AirTran Holdings, Inc.,
(NYSE:AAI) reported record traffic results for the month of
January 2003.

AirTran Airways' traffic, measured by revenue passenger miles,
increased by 41.0 percent for the month of January 2003 versus
the prior year on 39.8 percent more capacity, measured by
available seat miles, resulting in a load factor of 63.4
percent, compared to 62.8 percent for January 2002. The airline
enplaned a record 813,541 passengers in the month of January
2003, a 27.6 percent increase from January 2002.

"We are very pleased with our continued strong traffic growth,"
states Kevin Healy, vice president of planning and sales.

AirTran Airways is America's second-largest low-fare airline -
employing 5,000 professional Crew Members and serving 420
flights a day to 41 destinations. The airline never requires a
roundtrip purchase or Saturday night stay, and offers an
affordable Business Class, assigned seating, easy online booking
and check-in, the A-Plus Rewards frequent flier program, and the
A2B corporate travel program. AirTran Airways also is a
subsidiary of AirTran Holdings, Inc., (NYSE:AAI), and the
world's largest operator of the Boeing 717, the most modern,
environmentally friendly aircraft in its class. For more
information and reservations, visit http://www.airtran.com

As previously reported in Troubled Company Reporter, Standard &
Poor's affirmed its single-'B'-minus corporate credit ratings on
AirTran Holdings Inc., and subsidiary AirTran Airways Inc., and
removed all ratings from CreditWatch, citing the airline's
relatively good operating performance amid difficult industry
conditions. The ratings were placed on CreditWatch on
September 13, 2001. Approximately $166 million of rated debt is
affected. The outlook is negative.

"Ratings have been affirmed and removed from CreditWatch due to
AirTran's relatively good operating performance, within an
industry that continues to incur massive losses," said Standard
& Poor's credit analyst Betsy Snyder.


ALLMERICA FINANCIAL: Full-Year 2002 Net Loss Stands at $306 Mil.
----------------------------------------------------------------
Allmerica Financial Corporation (NYSE: AFC) reported net
operating income and net income for the fourth quarter and a net
operating loss and a net loss for the full-year 2002.

Fourth quarter summary:

     -- Net operating income per share was $0.42, or $21.9
million compared to $0.64 per share, or $34.0 million in 2001.
Net operating income and loss exclude certain items which
management believes are not indicative of overall operating
trends, including net realized investment gains and losses and
certain other items, net of taxes.

     -- Risk Management pre-tax operating earnings were $35.2
million, up from $29.0 million reported in the fourth quarter of
2001.

     -- Asset Accumulation pre-tax operating earnings were $7.8
million, as compared to pre-tax operating earnings of $25.9
million for the same period in 2001.

     -- Net income was $14.9 million, or $0.28 per share in the
fourth quarter of 2002 versus a net loss of $70.7 million, or
$1.34 per share in the same period of 2001. In the fourth
quarter, net income included a gain on the retirement of long-
term funding agreements of $66.7 million, or $1.26 per share,
gains on derivatives of $6.5 million, or $0.12 per share, net
realized investment losses of $45.8 million, or $0.87 per share,
a loss on the sale of the Company's universal life insurance
business of $20.3 million, or $0.38 per share, and restructuring
and reorganization costs of $14.1 million, or $0.27 per share.
Net loss for the same period of 2001 included losses from
selected property and casualty exited agencies, policies,
groups, and programs of $44.4 million, or $0.84 per share,
losses on derivatives of $24.4 million, or $0.46 per share,
increased voluntary pool asbestos and environmental reserves of
$21.5 million, or $0.41 per share, net realized investment
losses of $12.6 million, or $0.24 per share, and restructuring
costs of $1.8 million, or $0.03 per share.

Full-year summary:

     -- Net operating loss per share was $5.21, or $275.4
million, as compared to net operating income of $3.10 per share
or $164.5 million in 2001.

     -- Risk Management pre-tax operating earnings for the year
were $184.3 million, up significantly from $93.5 million for the
full year 2001.

     -- Asset Accumulation reported a pre-tax operating loss of
$600.6 million, as compared to $163.7 million of pre-tax
operating income in 2001.

     -- The Company reported a net loss of $306.1 million, or
$5.79 per share in 2002 versus a net loss of $3.1 million, or
$0.06 per share in 2001. In 2002, the net loss included a gain
on the retirement of long-term funding agreements of $66.7
million, or $1.26 per share, gains on derivatives of $26.2
million, or $0.50 per share, net realized investment losses of
$89.4 million, or $1.69 per share, a loss on the sale of the
Company's fixed universal life insurance business of $20.3
million, or $0.38 per share, restructuring and reorganization
costs of $14.1 million, or $0.27 per share, a contingency
payment received from the sale of the defined contribution
business of $2.3 million, or $0.04 per share, a benefit of $1.6
million, or $0.03 per share, from the release of a reserve
related to sales practice litigation which was settled in 1998,
and a charge reflecting the cumulative effect of a change in
accounting principle of $3.7 million, or $0.07 per share. In
2001, net loss included net realized investment loss of $78.8
million, or $1.48 per share, losses from selected property and
casualty exited agencies, policies, groups, and programs of
$44.4 million, or $0.84 per share, losses on derivatives of
$22.9 million, or $0.43 per share, increased voluntary pool
asbestos and environmental reserves of $21.5 million, or $0.41
per share, restructuring costs of $1.8 million, or $0.03 per
share, a benefit of $5.0 million, or $0.09 per share, related to
the release of reserves for the aforementioned sales practice
litigation, and a charge reflecting the cumulative effect of a
change in accounting principle of $3.2 million, or $0.06 per
share.

"We achieved solid results in both the Asset Accumulation and
Risk Management segments of our business in the fourth quarter,"
said Edward J. Parry, III, president of Allmerica's Asset
Accumulation Companies and Allmerica Financial Corporation's
chief financial officer. "We successfully completed a series of
transactions which significantly improved the year-end statutory
capital and surplus positions in our life insurance companies.
In addition, we are pleased with our progress in VeraVest
Investments Inc., our recently introduced broker-dealer." Robert
P. Restrepo, Jr., president of Allmerica's Property and Casualty
Companies added, "Risk Management, our property and casualty
business, ended 2002 with good fourth quarter operating results
and completed the year with substantially improved earnings. Our
increased profits reflect rate increases and the continuing
positive effects of our agency management initiatives."

                         Segment Results

Allmerica Financial operates in two primary businesses: Risk
Management and Asset Accumulation. Risk Management markets
property and casualty insurance products on a regional basis
through The Hanover Insurance Company and Citizens Insurance
Company of America. Asset Accumulation consists of Allmerica
Financial Services and Allmerica Asset Management. Allmerica
Financial Services markets non-proprietary insurance and
retirement savings products and services primarily to
individuals through VeraVest Investments, Inc. (formerly named
"Allmerica Investments, Inc.") and manages a portfolio of
proprietary life insurance and annuity products previously
issued through Allmerica's two life insurance subsidiaries.
Allmerica Asset Management markets investment management
services to institutions, pension funds, and other organizations
through Opus Investment Management, Inc. (formerly named
"Allmerica Asset Management, Inc.").

                         Risk Management

Risk Management pre-tax operating earnings were $35.2 million in
the fourth quarter of 2002, up from $29.0 million in the fourth
quarter of 2001. Full-year Risk Management pre-tax operating
earnings were $184.3 million in 2002, up significantly from
$93.5 million in 2001. Earnings were higher in both periods due
to continued rate increases, primarily in commercial lines,
decreased commercial lines losses, and lower pre-tax catastrophe
losses. These items were partially offset by increased losses in
personal auto, lower net investment income, and increased
expenses.

Property and Casualty highlights:

     -- Net premiums written were $543.5 million in the fourth
quarter of 2002, as compared to $550.2 million in the fourth
quarter of 2001. Full-year net premiums written were $2.3
billion in both 2002 and 2001.

     -- Net premiums earned were $575.0 million in the fourth
quarter of 2002, as compared to $560.8 million in the fourth
quarter of 2001. Full-year net premiums earned were $2.3 billion
in 2002 versus $2.2 billion in 2001.

     -- The statutory loss ratio was 69.5 percent in the fourth
quarter of 2002, as compared to 68.2 percent for the fourth
quarter of 2001. For the year 2002, the statutory loss ratio was
65.8 percent, as compared to 71.0 percent for all of 2001.

     -- The statutory expense ratio was 29.5 percent in the
fourth quarter of 2002, versus 27.5 percent in the same period
in 2001. The full-year statutory expense ratio was 28.7 percent
in 2002, as compared to 26.7 percent in 2001.

     -- In the fourth quarter of 2002, pre-tax catastrophe
losses were $7.5 million, as compared to $13.3 million in the
comparable period one year earlier. Pre-tax catastrophe losses
were $31.3 million for the full year of 2002, as compared to
$51.0 million for all of 2001.

                    Asset Accumulation

Allmerica Financial Services reported a pre-tax operating loss
of $0.7 million in the quarter, as compared to $21.7 million of
pre-tax operating earnings in the fourth quarter of 2001.
Earnings for the quarter decreased principally due to the
increased amortization of deferred policy acquisition costs,
which more than offset increased surrender fee income.

For the full year, this segment reported a pre-tax operating
loss of $625.0 million in 2002, as compared to net operating
earnings of $143.0 million in 2001. The loss for the full year
of 2002 was principally due to significant charges and increased
expenses related to the Company's decision in the third quarter
to restructure its Allmerica Financial Services business unit.
This action included ceasing the manufacture and sale of
proprietary variable annuity and variable life insurance
products and reflected the continued decline in equity market
valuations through the first nine months of the year. Third
quarter charges related to this decision included $487.5 million
related to a write-off of deferred policy acquisition costs,
$106.7 million related to guaranteed minimum death benefit
reserves partially offset by a related decrease in deferred
acquisition cost amortization of $67.6 million, and $29.8
million related to the write-off of certain capitalized hardware
and software development costs. In addition, the full-year loss
included a $141.9 million write-off of deferred policy
acquisition costs in the second quarter, higher amortization of
deferred policy acquisition costs in the fourth quarter of $33.7
million, and increased net guaranteed minimum death benefit
costs of $27.5 million for the full year.

In the fourth quarter, individual annuity surrenders increased
to $1.2 billion following the third quarter ratings downgrades,
as compared to $427.1 million for the third quarter of the year
and $903.6 million for the first six months of 2002.

Allmerica Asset Management's fourth quarter pre-tax operating
earnings were $8.5 million, as compared to $4.2 million in the
same period in the prior year. In the fourth quarter, earnings
increased over the prior year primarily due to increased
guaranteed investment contract earnings, which benefited from
favorable movements in interest rates and foreign exchange
rates. Full-year pre-tax operating earnings in 2002 were $24.4
million, versus $20.7 million in 2001. Full-year earnings
increased in this segment primarily due to the inclusion of
AMGRO Inc., the Company's property and casualty premium
financing business, partially offset by lower interest margins
on guaranteed investment contracts. Previously, AMGRO had been
included as part of the Risk Management segment.

During the fourth quarter, the Company retired approximately
$550 million in statutory par value of long-term funding
agreements at amounts below face value that resulted in a net
increase in statutory surplus of the combined life insurance
subsidiaries of approximately $84 million. Total funding
agreements outstanding at December 31, 2002 were $1.4 billion,
as compared to $2.7 billion at December 31, 2001 and $2.2
billion at September 30, 2002.

                         Corporate

Corporate segment net expenses were $14.4 million in the fourth
quarter of 2002, as compared to $16.3 million in 2001. Full-year
corporate net expenses were $63.5 million in 2002, versus $63.8
million in 2001.

                    Investment Results

Net investment income was $137.3 million for the fourth quarter
of 2002, as compared to $154.1 million in the same period in
2001. For the year 2002, net investment income was $590.2
million, as compared to $655.2 million in 2001. In both periods,
net investment income decreased principally due to lower average
outstanding spread-based assets in the guaranteed investment
contract business, lower portfolio yields driven by a shift in
the portfolio to higher credit quality bonds, the effect of
defaults on certain fixed income securities and lower prevailing
interest rates.

Fourth quarter pre-tax net realized investment losses were $78.4
million, as compared to $34.3 million of pre-tax net realized
investment losses in 2001. Full-year 2002 pre-tax net realized
investment losses were $162.3 million, versus $123.9 million of
pre-tax net realized investment losses in 2001. In each period,
pre-tax net realized investment losses were principally related
to impairments on fixed income securities. In the current
quarter, pre-tax net realized investment losses from impairments
of $122.3 million and losses from derivative investments of
$19.9 million were partially offset by gains of $60.1 million
from sales of other fixed income securities. In the fourth
quarter of 2001, pre-tax net realized investment losses from
impairments of $62.2 million were partially offset by gains of
$36.1 million from the sales of other fixed income securities.
For the year 2002, pre-tax net realized investment losses from
impairments of $238.5 million and losses from derivative
investments of $53.1 million were partially offset by gains of
$120.9 million from sales of other fixed income securities. In
2001, pre-tax net realized investment losses from impairments of
$185.3 million and losses from derivative investments of $32.9
million were partially offset by gains of $68.4 million from
sales of other fixed income securities.

                    Balance Sheet and Other

Shareholders' equity was $2.1 billion, or $39.12 per share at
December 31, 2002, as compared to $2.4 billion, or $45.19 per
share at December 31, 2001. Excluding accumulated other
comprehensive income, book value was $39.83 per share at the
close of the fourth quarter, as compared to $45.44 per share at
December 31, 2001.

In the fourth quarter of 2002, the Company recorded a $78.7
million after tax increase in its minimum pension liability
related to its qualified pension plans. This increase is
reflected as a decrease to accumulated other comprehensive
income.

Total assets were $26.5 billion at December 31, 2002, as
compared to $30.3 billion at year-end 2001. Separate account
assets were $12.3 billion at December 31, 2002, versus $14.8
billion at December 31, 2001. The declines in total and separate
account assets were principally the result of the decline in the
equity markets throughout 2002 and increased surrenders of
individual variable annuities.

At December 31, 2002, the Company had available tax benefits
from net operating loss carryforwards of approximately $77
million, and alternative minimum tax credits and other tax
credits of approximately $149 million. These items may be used
to offset taxes due on future earnings in either the life
insurance or property and casualty companies.

       Improved Life Insurance Company Capital Position

On January 8, 2003, the Company announced a series of
transactions, effective December 31, 2002, that significantly
improved the statutory capital positions of its life insurance
companies.

Statutory capital is the measure of capital utilized by
insurance industry regulators. The specific transactions
included the sale of its fixed universal life insurance block of
business, retirement of long-term funding agreements at amounts
less than statutory carrying values, implementation of a new
guaranteed minimum death benefit mortality reinsurance program,
and the redomestication and reorganization of the internal
ownership structure of its life insurance subsidiaries.

Including the benefit of these actions, total adjusted statutory
capital at December 31, 2002 was approximately $480 million for
the combined life insurance subsidiaries, an increase of 47
percent from the September 30, 2002 level of $326 million. In
addition, the Risk Based Capital ratio of Allmerica Financial
Life Insurance and Annuity Company, the lead life insurance
company as of December 31, 2002, increased from 133 percent as
of September 30, 2002 to approximately 250 percent as of
December 31, 2002. RBC is a regulatory method of measuring the
minimum amount of capital appropriate for an insurance company.
The first level of regulatory involvement required as a result
of RBC levels, the so-called "Company Action Level", is between
100 percent and 125 percent. Regulated insurance companies with
RBC ratios which fall below the Company Action Level are
required to prepare and submit an RBC plan which is acceptable
to the insurance commissioner of the state of domicile.

Allmerica Financial Corporation's Fourth Quarter Statistical
Supplement is also available at http://www.allmerica.com

Allmerica Financial Corporation is the holding company for a
diversified group of insurance and financial services companies
headquartered in Worcester, Massachusetts.

                         *    *    *

As previously reported in Troubled Company Reporter, Fitch
Ratings revised its Rating Watch on the insurer financial
strength ratings of First Allmerica Financial Life Insurance
Co., Allmerica Financial Life Insurance and Annuity Co., and
Allmerica Global Funding LLC's $2 billion global debt program
rating to Positive from Negative.

Fitch has also revised its Rating Watch on Allmerica Financial
Corporation's senior debt rating and Allmerica Financing Trust's
capital securities to Positive from Negative.

Fitch's actions reflect the significant increase in statutory
capitalization for AFC's life operations as a result of the
execution of several fourth quarter transactions, including the
definitive agreement to sell its interest in a $650 million
block of universal life insurance to John Hancock Life Insurance
Company, the retirement of $551 million in funding agreement
liabilities below face value through open market purchase/
tender offer and the implementation of a new guaranteed minimum
death benefit mortality reinsurance program.

          Entity/Issue Type/Action/Rating/Rating Watch

First Allmerica Financial Life Insurance Co.
     --Insurer financial strength Rating Watch - 'BB-'/Rating
       Watch - Positive

Allmerica Financial Life & Annuity Co.
     --Insurer financial strength 'BB-'/ Rating Watch Positive.

Allmerica Global Funding LLC $2 billion global note program
     --Long-term issuer rating 'BB-'/ Rating Watch Positive.

Allmerica Financial Corp.
     --Long-term issuer 'BB'/ Rating Watch Positive;
     --Senior debt rating 'BB'/ Rating Watch Positive;
     --Commercial paper rating 'B'.

Allmerica Financing Trust
     --Capital securities rating  'B+'/ Rating Watch Positive.


ALTERRA HEALTHCARE: Seeks Nod to Obtain Postpetition Financing
--------------------------------------------------------------
Alterra Healthcare Corporation and its debtor-affiliates asks
the U.S. Bankruptcy Court for the District of Delaware to
approve a postpetition secured financing arrangement with
Holiday Retirement Consulting Services LLC, as agent, and a
consortium of Lenders.

The Debtors require access to funds in order to ensure
sufficient liquidity for the duration of this case. In
particular, the administrative costs associated with this case
compel the Debtors to access additional funds not ordinarily
needed for its operations.  Absent postpetition financing, the
Debtors could face a cash-crunch and would be unable to fund
actual and necessary working capital needs.

Pending final approval from the Court, Alterra asks to
immediately borrow and obtain financial and credit
accommodations up to an aggregate principal amount of
$15,000,000.  The Financing will enable Alterra to purchase
necessary goods, including insurance, the funding of payroll
obligations, the operation of their facilities and other working
capital needs. It is essential that Alterra has access to these
funds in order to pay expenses, stabilize cash flows and
maintain the confidence of its suppliers and residents.  A
Final Hearing is scheduled for February 18, 2003.

The DIP Loans will bear interest at an amount equal to the
greater of:

     (i) 10% per annum; and

    (ii) the prime rate of interest published from time-to-time
         in the Wall Street Journal, National Edition, plus 4
         percentage points.

On the closing date, Alterra will pay a facility fee equal to
1-1/2% of the total Commitment Amount and a $30,000 closing fee.

The Postpetition Indebtedness shall be secured pursuant to
section 364(c)(2) of the Bankruptcy Code, by a priority
perfected Lien on all present and after acquired Collateral and
secured pursuant to section 364(c)(3) of the Bankruptcy Code, by
a junior lien on all present and after acquired Collateral of
the Debtor.

The Debtor discloses that a working capital facility of the type
and magnitude needed in this case could not have been obtained
on an interim basis.  The Debtor assures the Court that it has
negotiated the terms of the Credit Agreement with the Lenders at
arm's length and in good faith.

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


ANC RENTAL: Request to File Sabre Settlement Under Seal Nixed
-------------------------------------------------------------
Jason W. Staib, Esq., at Blank Rome Comisky McCauley LLP, in
Wilmington, Delaware, informs the Court that Debtors National
Car Rental Systems, Inc. and Alamo Rent-A-Car, Inc.,
subsidiaries of ANC Rental Corporation, each have an agreement
with Sabre, Inc., pursuant to which Sabre provides the Debtors
with GDS-related services for their automobile rental
operations, including computerized booking and reservation
services.

Mr. Staib explains that Sabre provides services that allow
travel agencies and consumers to research, shop for and reserve
car rentals, airline seats, hotel rooms, and cruises.  Within
the industry, these services are generally referred to as
"Global Distribution Systems."

Mr. Staib recounts that Sabre filed a proof of claim on
February 8, 2002 in the Debtors' cases asserting a $2,716,951.65
general unsecured claim for prepetition services Sabre allegedly
provided to the Debtors.  The Debtors dispute the asserted
amount of Sabre's general unsecured claim.

In the weeks leading up to, and culminating on November 15,
2002, the parties engaged in protracted, arm's-length
negotiations and settlement discussions in an attempt to resolve
informally their pending disputes.  Those discussions culminated
in a mutual understanding between the parties as to the general
framework for a global settlement, including the terms under
which the parties will conduct business going forward.  The
Debtors believe that the Settlement contains favorable financial
terms.

Mr. Staib explains that the parties are still in the process of
negotiating a final term sheet and other documents in connection
with the Settlement.  The Settlement Documents are highly
confidential.  The Debtors propose to file the Settlement
Documents under seal.

But Judge Walrath denied the Debtors' request for reasons stated
in open court. (ANC Rental Bankruptcy News, Issue No. 26;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


ARCH COAL: Completes 5% Convertible Preferred Share Offering
------------------------------------------------------------
Arch Coal, Inc., (NYSE: ACI) completed the sale of 2,875,000
shares of its 5% Perpetual Cumulative Convertible Preferred
Stock, which includes the underwriters' full over-allotment
option of 375,000 shares, at a price of $50.00 per share. The
net proceeds from the offering, estimated at approximately
$139.1 million, are being used to reduce indebtedness under Arch
Coal's $350 million revolving credit facility, to repay lines of
credit, and for working capital and general corporate purposes.

As previously announced, dividends on the preferred stock will
be cumulative and will be payable quarterly at the annual rate
of 5% of the liquidation preference. Each share of the preferred
stock will be initially convertible, under certain conditions,
into 2.3985 shares of the company's common stock.

Arch Coal is the nation's second largest coal producer with
subsidiary operations in West Virginia, Kentucky, Virginia,
Wyoming, Colorado and Utah. Through these operations, Arch Coal
provides the fuel for approximately 6% of the electricity
generated in the United States.

As previously reported in Troubled Company Reporter, Standard &
Poor's assigned its 'B+' preferred stock rating to Arch Coal
Inc.'s $150 million of perpetual cumulative convertible
preferred stock.

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

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


ARMSTRONG: Has Until July 31 to Move Actions to Delaware Court
--------------------------------------------------------------
Armstrong World Industries, Inc., Nitram Liquidators, Inc., and
Desseaux Corporation of North America obtained permission from
the U.S. Bankruptcy Court for the District of Delaware to
further extend the deadline to file notices to remove
prepetition litigative and administrative matters through and
including the later of:

    (i) July 31, 2003, or

   (ii) 30 days after entry of an order terminating the
        automatic stay with respect to any particular action
        sought to be removed. (Armstrong Bankruptcy News, Issue
        No. 35; Bankruptcy Creditors' Service, Inc., 609/392-
        0900)   


ASIA GLOBAL CROSSING: Gets Court's Final Nod to Hire Gibson Dunn
----------------------------------------------------------------
Asia Global Crossing Ltd., and its debtor-affiliates obtained
final approval from the Court to employ Gibson, Dunn & Crutcher
LLP as their special corporate, litigation and tax counsel in
these Chapter 11 cases.

The professional services that Gibson Dunn will render to the
Debtors include:

    -- representation in commercial transactions;

    -- litigation;

    -- arbitration;

    -- asset dispositions;

    -- securities laws;

    -- merger and acquisition matters,

    -- tax matters; and

    -- other general corporate matters.

The Debtors will compensate Gibson Dunn on an hourly basis and
will reimburse the firm for actual, necessary expenses and other
charges incurred.  The current standard hourly rates of Gibson
Dunn's professionals are:

       Partners                         $420 - 720
       Senior Counsel                    400 - 671
       Associates                        190 - 460
       Legal Assistants                   95 - 270

The Debtors have provided Gibson Dunn a $500,000 retainer for
professional services to be rendered and expenses to be charged
by the Firm postpetition. (Global Crossing Bankruptcy News,
Issue No. 32; Bankruptcy Creditors' Service, Inc., 609/392-0900)

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


BETHLEHEM STEEL: Will Conduct NJ Asset Sale Auction on Monday
-------------------------------------------------------------
For the purpose of entertaining competing bids for the New
Jersey Property, the Court authorizes Bethlehem Steel
Corporation and its debtor-affiliates to conduct an auction
following uniform bidding procedures on February 10, 2003, at
11:00 a.m.

The New Jersey property, as previously reported, is a 45.6-acre
parcel of unimproved property located in North Arlington and
Kearny, New Jersey to Russo Development LLC, subject to higher
or better offers.  The Debtors intend to sell the Property free
and clear of all liens, claims, security interests and
encumbrances.

Additionally, Judge Lifland directs that if the Successful
Bidder is a party other than Russo, they must file papers with
the Court outlining the identity of the Successful Bidder, the
relevant terms of the proposed sale agreement, and the purchase
price received for the Property within two business days after
the Auction.

The Sale Hearing, to confirm the results of the Auction, will be
held before the Honorable Burton R. Lifland at the United States
Bankruptcy Court for the Southern District of New York, One
Bowling Green, New York, New York, on February 13, 2003, at
10:00 a.m.

The Court orders that any objections to the approval of the
Debtors' sale of the Property must be received no later than
February 10, 2003, at 4:00 p.m., which should be:

  (i) be in writing;

(ii) set forth the name of the objectant, the nature and amount
      of claims or interests held or asserted by the objectant
      against the Debtors' estates or property;

(iii) specify with particularity the basis of the objection and

(iv) be filed with the Court electronically in accordance with
      General Order M-182, which can be found at
      http://www.nysb.uscourts.govby registered users of the  
      Court's case filing system and, by all other parties in
      interest, on a 3.5 inch disk, preferably in Portable
      Document Format, WordPerfect, or any other Windows-based
      word processing format, with a hard copy delivered
      directly to Chambers, served in accordance with General
      Order M-182, and will further be served upon:

        -- the attorneys for the Debtors:

              Weil, Gotshal & Manges LLP
              767 Fifth Avenue, New York
              New York 10153
              Attn: Jeffrey L. Tanenbaum, Esq.

        -- the attorneys for Russo:

              Schiffman, Berger, Abraham, Kauffman & Ritter PC
              3 University Plaza, P.O. Box 568, Hackensack
              New Jersey 07602
              Attn: Richard G. Berger, Esq.

        -- the Office of the United States Trustee:

              33 Whitehall Street
              21st floor, New York
              New York 10004
              Attn: Tracy H. Davis, Esq.

        -- the attorneys for the statutory committee of
           unsecured creditors:

              Kramer Levin Naftalis & Frankel LLP
              919 Third Avenue, New York
              New York 10022
              Attn: Thomas M. Mayer, Esq.; and

         -- the attorneys for the Debtors' lenders:

               Davis Polk & Wardwell
               450 Lexington Avenue, New York
               New York 10017
               Attn: John Fouhey, Esq.

                      and

               Sidley Austin Brown & Wood LLP
               787 Seventh Avenue, New York
               New York 10019
               Attn: Lee S. Attanasio, Esq.
(Bethlehem Bankruptcy News, Issue No. 30; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

Bethlehem Steel Corp.'s 10.375% bonds due 2003 (BS03USR1) are
trading at about 3 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BS03USR1for  
real-time bond pricing.


BILLSERV INC: Commences Trading on OTCBB Effective February 4
-------------------------------------------------------------
Nasdaq Listing Qualifications Panel delisted Billserv, Inc.'s
(Nasdaq: BLLS) common stock from the Nasdaq National Market at
the open of business Tuesday, February 4, 2003. The Company did
not meet the requirements for continued listing on the Nasdaq
National Market.

The Company's common shares immediately began trading on the OTC
Bulletin Board (OTCBB) effective at open of business February 4,
2003. The Company keeps the letters BLLS as its ticker symbol.

The Nasdaq Listing and Hearing Review Council may decide to
review the Panel's determination on or before March 13, 2003,
and the Company would be notified of any such review. Review by
the Nasdaq Listing and Hearing Council will not delay the
delisting.

Michael R. Long, Billserv's Chairman and CEO stated, "The
transition to the OTCBB does not affect the strategic
positioning of the Company. We will continue to pursue internal
and external strategic alternatives in order to ensure the long-
term success of our business model."

                         *    *    *

                  Going Concern Uncertainty

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

"Due to a material shortfall from anticipated revenues and the
inability to access its funds held as collateral to guarantee
certain executive margin loans, the Company believes that its
current available cash and cash equivalents and investment
balances along with anticipated revenues may be insufficient to
meet its anticipated cash needs for the foreseeable future.
Accordingly, the Company reduced its workforce by 36 employees
in November 2002 and is currently aggressively pursuing
strategic alternatives, including investment in or sale of the
Company. The sale of additional equity or convertible debt
securities would result in additional dilution to the Company's
stockholders, and debt financing, if available, may involve
restrictive covenants which could restrict operations or
finances. There can be no assurance that financing will be
available in amounts or on terms acceptable to the Company, if
at all. If the Company cannot raise funds, on acceptable terms,
or achieve positive cash flow, it may not be able to continue to
exist, conduct operations, grow market share, take advantage of
future opportunities or respond to competitive pressures or
unanticipated requirements, any of which would negatively impact
its business, operating results and financial condition."


BROOKS-PRI AUTOMATION: Hire Edward C. Grady as President and COO
----------------------------------------------------------------
Brooks-PRI Automation, Inc. (Nasdaq: BRKS), which delivers total
automation for semiconductor manufacturing, hired Edward C.
Grady, 55, as president and chief operating officer.
Robert J. Therrien will remain as the chief executive officer
and will become chairman of the board of directors, pending
final approval from the board of directors.

"I am pleased that Ed Grady has accepted our offer to take
responsibility of running the day-to-day operations of Brooks-
PRI as president and chief operating officer," said Mr.
Therrien. "Ed has already been consulting for Brooks-PRI on a
part-time basis and we have been impressed with his knowledge
and contributions. We especially value his outstanding track
record of running large, profitable divisions at KLA-Tencor and
helping lead their growth in market share and industry
prominence. We are confident that Ed's industry experience and
his familiarity with Brooks-PRI's objectives for profitable
growth will enable him to successfully lead the Company. I feel
very fortunate to have an executive of Ed's caliber to help run
the Company."

Mr. Grady successfully ran several divisions at KLA-Tencor,
including the largest revenue- and profit-producing group,
helping grow the business to a level in excess of $1 billion in
revenues. Prior to KLA-Tencor, he served as president and CEO of
Hoya Micro Mask for three years, driving restructuring and cost
reduction initiatives to transform the business from a loss to a
profit in two years. He started his career as an engineer for
Monsanto/MEMC, and during his 14 years with the company, rose to
the position of vice president of worldwide sales for EPI, the
most profitable division in MEMC. During his 30 years in the
industry, Mr. Grady held a number of responsibilities that
included engineering, sales, product marketing, strategic
marketing and management of profit and loss operations.

Brooks-PRI (Nasdaq: BRKS) delivers automation solutions to the
global semiconductor industry. The company's hardware,
factory/tool management software, and professional services can
manage every wafer, reticle and data movement in the fab,
helping semiconductor manufacturers optimize throughput, yield
and cost reduction, while reducing their time to market. Brooks-
PRI products and capabilities are used in virtually every fab in
the world. For information, visit http://www.brooks-pri.com

Brooks-PRI Automation's 4.750% bonds due 2008 are currently
trading at about 74 cents-on-the-dollar.


BUDGET GROUP: Has Until March 31 to Make Lease-Related Decisions
----------------------------------------------------------------
Budget Group Inc., and its debtor-affiliates obtained an
extension of time within which they must assume, assume and
assign, or reject all of their unexpired leases of non-
residential real property through and including March 31, 2003.
(Budget Group Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service, Inc., 609/392-0900)    


BURGER KING: Launches Franchisee Financial Workout Initiative
-------------------------------------------------------------
Burger King Corporation launched the Burger King Franchisee
Financial Restructuring Initiative to address the financial
challenges of financially distressed franchisee operations. The
initiative will assist a number of franchisees as they
restructure their business so they can meet their financial
obligations, focus on restaurant operational excellence,
reinvest in their business and return to profitability.

"Clearly one of the most pressing issues facing the BURGER
KING(R) system today is the financial distress of a number of
our franchisees," said Brad Blum, chief executive officer,
Burger King Corporation. "Addressing this issue and turning it
into an opportunity to recapitalize these franchisees and enable
them to emerge stronger with more robust financial structures
will set us up for success. This is a top priority to enable us
to focus on quality and on delivering an outstanding experience
to our customers."

To accelerate this process, the company has hired Trinity
Capital, LLC to work with BURGER KING franchisees, their
creditors and Burger King Corporation.

"[Mon]day I am pleased, truly pleased, to announce the launch of
the Burger King Franchisee Financial Restructuring Initiative,"
said Mr. Blum. "To help our franchisees bring resolution to
these issues -- which include short-term liquidity, the ability
to meet franchisee obligations and the need to reinvest in their
business -- we have hired Trinity Capital, whose expertise in
these areas is widely recognized. Burger King Corporation is
working in cooperation with the National Franchise Association
on this initiative."

Trinity Capital has an excellent track record in assisting
franchisees to restructure their companies. Trinity will act as
a neutral third party and negotiate the quickest possible
resolution among the franchisees, lenders and Burger King
Corporation. As part of this arrangement and service to its
franchisees, Burger King Corporation is paying the professional
and administrative fees for Trinity's services.

Blum stressed that the implementation of this program is an
important first step in enabling the company's franchisees to
meet their financial and capital spending obligations and focus
on delivering operational excellence to the consumer.

"Franchisees must reinvest in their restaurants to keep them
fresh and relevant for our customers. We must significantly
improve the quality and the consistency of what we offer the
consumer, as well as upgrade the appearance of our restaurants
in order to be successful. The aim of this program is to help
franchisees with financial restructuring so they can meet their
obligations and become profitable again," Blum said.

"We welcome this timely initiative to further strengthen our
franchisee operations," said Julian Josephson, chairman of the
National Franchise Association. "This is a significant step for
the future of the BURGER KINGr brand, and a win-win opportunity
for everyone involved. The leadership of the NFA applauds our
new CEO, Brad Blum and the Sponsor Equity Group for their
immediate attention and response to this important matter. Now,
all of us in the Burger King system can focus our attention on
satisfying our customers."

Trinity Capital is a Los Angeles based financial services firm
that specializes in restructuring financially troubled franchise
companies. Trinity Capital has helped restructure more than
3,000 restaurants and approximately $2.5 billion of franchise
related obligations for other companies.

Burger King Corporation and its franchisees operate more than
11,450 restaurants in all 50 states and 58 countries and
territories around the world, with 91% of BURGER KING(R)
restaurants owned and operated by independent franchisees. Since
the company's founding in Miami in 1954, the BURGER KING(R)
brand has become recognized for the great taste of FLAME-
BROILING, HAVE IT YOUR WAY(R) and the WHOPPER(R). In fiscal year
2002, ending June 30, 2002, the BURGER KING(R) system had
system-wide sales of $11.3 billion. Burger King Corporation is
owned by the equity sponsor group comprised of Texas Pacific
Group, Goldman Sachs Capital Partners and Bain Capital. To learn
more about the BURGER KING(R) system, please visit the company's
Web site at http://www.burgerking.com  


CINEMARK USA: Issuing $150M Sr. Sub. Notes via Private Placement
----------------------------------------------------------------
On January 30, 2003, Cinemark USA, Inc., a Texas corporation,
announced that it intends to issue, subject to market and other
conditions, approximately $150 million of Senior Subordinated
Notes due 2013 by means of a private placement. The notes will
be offered only to qualified institutional buyers in reliance on
Rule 144A under the Securities Act of 1933, as amended, and to
non-U.S. persons in reliance on Regulation S under the
Securities Act.

The Company will use the net proceeds from the offering to
refinance a portion of its existing senior indebtedness.

Cinemark is one of the leading movie theater operators in the
U.S. with 2,203 screens in 188 theaters and also has a
significant presence in three Latin American countries as part
of its 811 international screens in 91 theaters.

As previously reported in Troubled Company Reporter, Standard &
Poor's revised its outlook on movie exhibitor Cinemark USA Inc.,
to stable from positive following the company's postponement of
its planned IPO and bank loan refinancing.

Standard & Poor's withdrew its double-'B'-minus bank loan rating
on the company's proposed $250 million bank facility. All other
ratings, including the single-'B'-plus corporate credit rating,
are affirmed. The Plano, Texas-based company had $784 million in
debt outstanding as of March 31, 2002.


CONSECO INC: Court Okays Gregory P. Joseph as Special Counsel
-------------------------------------------------------------
Conseco Inc., and its debtor-affiliates obtained the Court's
authority to employ the Gregory P. Joseph Law Office as Special
Litigation Counsel.  GJ will represent Conseco in these matters:

    a) Porter v. Conseco, Inc. et al., 1:02-CV-1332 DFH;

    b) Conseco Inc., et al. v. Royal Insurance Co. of America,
       et. al., Cause No. 49C010106CP001467;

    c) In re Conseco, Inc. Derivative Litigation, IP 00-655-Y/S;

    d) Schweitzer v. Hilbert, et al., Cause No. 29D01-0004-CP-
       0251;

    e) In re Green Tree Financial Corp. Stock Litigation, Civil
       No. 97-2666 (JRT/RLE); and

    f) In re Conseco Inc. Securities Litigation, No. IP-00-0585-
       C.

GJ is recognized for its expertise in all aspects of litigation,
federal securities litigation and commercial litigation.  GJ has
been representing the Debtors in various actions since 1997.  GJ
will provide services based on all aspects of litigation,
arbitration or mediation related to these lawsuits.  GJ will not
represent the Debtors in connection with these Chapter 11 cases.

Compensation will be payable to GJ on an hourly basis, plus
reimbursement of actual, necessary expenses.  The primary
lawyers and staff responsible for the Engagement, with their
current hourly rates, are:

          Gregory P. Joseph          $700
          Pamela Jarvis               550
          Honey L. Kober              450
          Peter R. Jerdee             415
          Sandra M. Lipsman           415
          Eric B. Fisher              415
          Susan M. Davies             415
          Meredith McGrady            195
          Jeffrey H. Zaiger           120
(Conseco Bankruptcy News, Issue No. 5 & 6; Bankruptcy Creditors'
Service, Inc., 609/392-0900)    

DebtTraders reports that Conseco Inc.'s 10.750% bonds due 2008
(CNC08USR1) are trading at about 13 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CNC08USR1for  
real-time bond pricing.


COVANTA ENERGY: Secures Stay Relief to Resolve OSHCC Interests
--------------------------------------------------------------
OSHCC asks Judge Blackshear to declare that no relief is
necessary from this Court to permit the Ottawa Senators Hockey
Club Corporation Debtors to proceed in their CCAA case, or in
the alternative, grant the OSHCC Debtors and their postpetition
lenders relief from the stay to conduct the CCAA Proceeding and
carry out all provisions of all orders entered by the Canadian
Court.

Neal D. Colton, Esq., at Cozen O'Connor, in Philadelphia,
Pennsylvania, relates that, initially, OSHCC does not agree with
Covanta Energy Corporation and its debtor-affiliates' position
that they must first obtain stay relief from this Court to
obtain financing in their own CCAA Proceedings.  Indeed, no case
law dealing with a similar fact situation was cited in support
of this proposition by the Debtors.  OSHCC is not a subsidiary
or an affiliate of the Debtors.  In fact, the Debtors are merely
subordinated, junior, undersecured creditors of OSHCC.

"The Debtors' assertion that stay relief is necessary from this
Court in order for OSHCC to restructure their businesses appears
to be nothing more than an attempt to gain leverage in the CCAA
Proceedings," Mr. Colton says.  To permit the Debtors to
effectively control the OSHCC CCAA Proceedings would be contrary
to the common rehabilitative goals of both the Bankruptcy Code
and CCAA.

In the event this Court determines that the stay must be lifted
to allow an unrelated, foreign debtor to proceed with its own
insolvency proceedings in a competent court, Mr. Colton asserts
that the stay should be lifted because:

  (a) the Debtors' junior, undersecured, subordinated liens are
      not necessary to an effective reorganization of the
      Debtors by the Debtors' own admission;

  (b) depriving a foreign debtor of financing or the ability to
      conduct a sale of its franchise will cause irreparable
      harm through, among other things, further losses and
      disruption of business; and

  (c) the Canadian bankruptcy law contains procedural
      safeguards similar to those under the U.S. bankruptcy
      law, and the rights of all creditors, including the
      Debtors would be protected in the CCAA Proceedings.

2. Canadian Imperial Bank of Commerce, Fleet National Bank and
   National Hockey League

To the extent the automatic stay is applicable, CIBC, Fleet and
NHL join in the OSHCC's response to the motion for the same
reasons.

                          *     *     *

After considering the motion and the responses, the Court rules
that:

A. The automatic stay is modified nunc pro tunc to January 9,
   2003, solely with respect to amounts advanced and to be
   advanced to OSHCC under and pursuant to the terms of the CCAA
   Order up to a maximum aggregate amount of $2,700,000;

B. Effective on the amendments set in this order, the automatic
   stay is modified to permit:

     (i) enforcement of orders of the Canadian Court in OSHCC's
         CCAA proceedings as to which Covanta has had notice and
         an opportunity to be heard, including the CCAA Order,
         nunc pro tunc to January 9, 2003; and

    (ii) the conduct of proceedings before the Canadian Court in
         OSHCC's CCAA proceedings;

C. The amendment of the relevant transactional documents to
   reflect these points and confirmation thereof in the CCAA
   Order to the reasonable satisfaction of Covanta, the
   Committee, the agents of the Lenders and the 9.25% Committee
   are conditions precedent to the modification of the automatic
   stay:

    (a) Arrangement for a weekly reconciliation of all amounts
        owed after the entry of the CCAA Order on January 9,
        2003 between OSHCC and Palladium under the License
        Agreement or other commercial arrangements among the
        parties in the ordinary course.  Any net payments due to
        Palladium pursuant to the weekly reconciliation will be
        deemed included in OSHCC's budget, as provided for in
        OSHCC's postpetition financing agreements, and OSHCC
        will undertake to make all net payments due from it
        promptly on a weekly basis;

    (b) Statement of Covanta's reservation of all of its rights,
        subject to the CCAA Order, under its pre-filing
        documents and applicable law;

    (c) Amendment of the Agreement on the Sales Process to
        provide that information supplied pursuant to the
        agreement will be shared with Covanta, including its
        creditors, contemporaneously with the information being
        supplied to OSHCC's postpetition lenders, provided that
        the Monitor will have the right to withhold information,
        where it considers Covanta to have a conflict, only
        upon:

         (i) prompt notice to Covanta; and

        (ii) the prompt filing of a motion with the Canadian
             Court upon notice to, and opportunity to be heard
             by, Covanta;

    (d) Agreement of the Monitor to meet with Covanta, and, as
        appropriate and consistent with the Monitor's duties as
        an officer of the Court and responsibilities to the
        OSHCC estate, to discuss possibilities of conducting a
        joint marketing process with respect to the Arena and
        the Team;

D. This Order does not rule on the jurisdiction in which claims,
   if any, by and against the Debtors and OSHCC will be
   adjudicated, and neither the Debtors nor OSHCC will commence
   a proceeding to adjudicate or exercise any remedy in contract
   or in law to pursue any claim without further Court order;

E. Covanta and the Debtors are authorized to take all necessary
   actions to assert, protect, enforce and resolve Covanta's
   interests in and claims against OSHCC and Palladium in
   connection with any insolvency, reorganization or security
   enforcement proceeding pursuant to Canadian law, provided
   that with respect to any material action to Covanta's estate,
   Covanta will act subject to these procedures:

    (a) Covanta will determine, in its best business judgment
        and discretion, how it should proceed or respond with
        respect to any material application, motion, request,
        pleading or initiative in any Canadian insolvency,
        reorganization or enforcement proceeding involving
        Covanta's interests in or claims against OSHCC and
        Palladium;

    (b) Covanta will serve, by facsimile or electronic mail, a
        written notice describing the relevant Proposed Action
        to: (a) counsel to the Committee; (b) counsel to the
        agents of the Lenders; and (c) counsel to the 9.25%
        Committee, within five business days prior to the taking
        of the Proposed Action;

    (c) The Committee, the Lenders or the 9.25% Committee may
        object to the Proposed Action by serving its objection
        to the Debtors' counsel, by facsimile or electronic
        mail, within four business days after receipt of the
        Notice of Proposed Action; and

    (d) In the event that a written objection is served to the
        Debtors' counsel by one of the creditor constituencies
        within the given period that cannot be resolved
        consensually, Covanta will to proceed with respect to
        the relevant Proposed Action without further Court order
        for which the Debtors may seek a hearing on shortened
        notice;

F. Information regarding the CCAA proceedings identified by the
   Monitor as confidential to be filed by the Court in this
   matter will be filed as otherwise determined by the Court or
   in a sealed envelope or other appropriate sealed container on
   which will be endorsed the caption of this action, and
   indication of the nature of the contents of the sealed or
   other container the word "Confidential";

G. This Order does not modify the Debtors' obligations under the
   DIP Credit Agreement dated April 1, 2002, as amended.
   (Covanta Bankruptcy News, Issue No. 22; Bankruptcy Creditors'
   Service, Inc., 609/392-0900)    


CROWN CORK: S&P Assigns B Rating to $3.1-Billion Bank Facility
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' bank loan
rating to Crown Cork & Seal Co. Inc.'s proposed $1.05 billion
senior secured bank credit facility.

In addition, Standard & Poor's assigned its 'CCC+' rating to
Crown's proposed $1.25 billion second-priority senior secured
notes due 2011 and its 'CCC' rating to the company's proposed
$500 million third-priority senior secured notes due 2013 and
its $250 million convertible notes due 2008.

All of these ratings were placed on CreditWatch with positive
implications. The ratings are based on preliminary terms and
conditions and subject to review once final documentation is
received. Standard & Poor's said that all of its existing
ratings on Crown Cork, including its 'B-' corporate credit
rating, remain on CreditWatch with positive implications where
the were placed January 29, 2003.

Philadelphia, Pennsylvania-based Crown Cork & Seal had
outstanding debt of about $4 billion at Dec. 31, 2002.

"The positive CreditWatch implications reflect the potential
improvement in Crown's financial profile following completion of
the refinancing," said Standard & Poor's credit analyst Paul
Vastola. "The proposed debt refinancing will significantly
extend Crown's substantial near-term debt maturities and improve
its liquidity." Mr. Vastola said that following the completion
of the refinancing, Standard & Poor's will raise Crown's
corporate credit rating to 'BB-' and its existing senior
unsecured debt ratings would be raised to 'B'. Accordingly, its
senior secured bank credit facility rating would be raised to
'BB' and its second-priority senior secured notes would be
raised to 'B+' and its $500 million third-priority senior
secured notes and its $250 million convertible notes would be
raised to 'B'. At the same time all ratings will be removed from
CreditWatch. These rating actions will be dependent on Crown
successfully completing the refinancing as planned.


DE KALB COUNTY: S&P Hatchets Housing Bond Ratings to Low-B Level
----------------------------------------------------------------  
Standard & Poor's Ratings Services lowered its ratings on De
Kalb County Housing Authority, Georgia's $12.6 million
multifamily housing bonds series 1996A and $1.3 million series
1996C to 'BB' and 'B' from 'BBB' and 'BB', respectively.
The outlook is negative.

The downgrades reflect the trustee's draw on the respective debt
service reserve funds for each series in order to make the
Jan. 1, 2003 debt service payments on the bonds, failure to make
a mandatory sinking fund payment due on January 1, 2003,
continued weakness of senior and subordinate debt service
coverage ratios at 1.32x and 1.19x, respectively, and low
occupancy rates of 85% at Regency I and 87% at Regency II as of
Dec. 29, 2002.

The draws on the senior and subordinate debt service reserve
funds were necessitated by the borrower's 2002 request that
bondholders enter into a forbearance agreement.  The agreement,
which has not been conclusive, would allow the borrower to
suspend mortgage payments to the trustee and instead use the
funds to make emergency repairs on the property, requiring
a draw on reserve funds to make debt service payments.  
Additionally, the trustee was requested to forebear taking
remedies under the loan agreement in the event that the borrower
did suspend payments on the mortgage, which would normally place
the borrower in default.  The borrower did suspend some payments
in 2002.  It is not clear what action bondholders and,
consequently, the trustee will take in response.  The trustee
opted not to draw on the debt service reserve fund to make the
mandatory sinking fund payment.

Unaudited financial reports for 2002 indicate debt service
coverage of 1.32x maximum annual debt service and 1.19x on the
senior and subordinated debt, down from 1.35x and 1.22x in 2001,
respectively. However, the debt service coverage levels on the
2001 financial statements assumed the subordination of 50% of
management fees to debt service. Without the subordination of
50% of management fees the debt service coverage levels
would have been 1.31x and 1.18x, respectively.

The projects' occupancy rates remain very low, though consistent
with the Atlanta market, through the end of 2002. Rates were 85%
at Regency I and 87% at Regency II as of Dec. 29, 2002, compared
to 87% and 83% in May 2002, when Standard & Poor's conducted its
last review.


DENNY'S CORP: George W. Haywood Discloses 8.4% Equity Stake
-----------------------------------------------------------
George W. Haywood beneficially Owns 3,372,500 shares of the
common stock of Denny's Corporation (formerly Advantica
Restaurant Group, Inc.). The amount held represents 8.4% of the
outstanding common stock of Denny's Corporation, subsidiary of
Advantica Restaurant Group, Inc.  Mr. Haywood holds sole power
to vote or to direct the vote, sole power to dispose or to
direct the disposition of the entire 3,372,500 shares held.

Included as shares for which there exist sole voting and
dispositive power are 34,500 shares owned by a minor child of
Mr. Haywood, which child would have the right to the receipt of
dividends from, and the  proceeds from the sale of, such shares.

As reported in Troubled Company Reporter's December 30, 2002
edition, Standard & Poor's assigned its 'BB-' senior secured
bank loan rating to family dining restaurant operator Denny's
Corp.'s $125 million senior secured revolving credit facility.
The new facility will be used to refinance the existing credit
facility.

At the same time, Standard & Poor's raised its corporate credit
rating on the company to 'B' from 'B-'. The outlook is stable.
Spartanburg, South Carolina-based Denny's had total debt of $606
million as of September 25, 2002.


DYNEGY INC: Names Jim Horsch as Vice President of Internal Audit
----------------------------------------------------------------
Dynegy Inc., (NYSE:DYN) named Jim Horsch vice president of
internal audit, effective immediately. In this capacity, Horsch
is responsible for assessing Dynegy's system of internal
controls and business unit compliance with the policies and
procedures of the company. He will report directly to Nick
Caruso, Dynegy's executive vice president and chief financial
officer.

Horsch, 50, joins Dynegy from BJ Services Company in Houston,
where he most recently served as corporate controller,
responsible for all accounting and internal and external
reporting, including SEC filings and annual reports to
shareholders. From 1995 through 2000, Horsch served as BJ
Services' director of internal audit, where he was responsible
for planning, managing and reporting results of audit projects.

"One of Dynegy's primary objectives is to demonstrate our
commitment to integrity through internal practices that ensure
accurate financial reporting," said Bruce A. Williamson, Dynegy
Inc. president and chief executive officer. "With more than 20
years of experience in various accounting fields and six years
as director of internal audit with a leading energy services
company, Jim's guidance will be critical as we refine processes
for providing accurate financial disclosure to stakeholders."

A certified public accountant, Horsch earned a bachelor's degree
in accounting from the University of St. Thomas. Prior to
joining BJ Services in 1995, he served as a senior audit manager
with the accounting firm PricewaterhouseCoopers.

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.

As reported in Troubled Company Reporter's Tuesday Edition,
Dynegy said that its financial results for the fourth quarter
2002 reflect additional restatements to the company's previously
reported results for 1999 through 2001 and for the first three
quarters of 2002.

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.

Dynegy Holdings Inc.'s 8.750% bonds due 2012 (DYN12USR1) are
trading at about 54 cents-on-the-dollar, DebtTraders says. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=DYN12USR1for  
real-time bond pricing.


ECHOSTAR COMMS: Completes Early Redemption of 9.25% Senior Notes
----------------------------------------------------------------
EchoStar Communications Corporation (Nasdaq:DISH) confirmed that
effective Feb. 1, 2003, its subsidiary, EchoStar DBS
Corporation, completed the previously announced repurchase of
all of its 9-1/4% Senior Notes due 2006.

The redemption occurred three years early in accordance with the
company's early redemption right.

EchoStar Communications Corporation (Nasdaq:DISH), through its
DISH Network(TM), is a leading U.S. provider of satellite
television entertainment services to homes and businesses with
more than 8 million customers. Headquartered in Littleton,
Colorado, EchoStar has been a leader for 23 years in digital
satellite TV equipment sales and support worldwide. EchoStar is
included in the Nasdaq-100 Index (NDX) and is a Fortune 500
company. Visit EchoStar's Investor Relations Web site at
http://www.dishnetwork.com

At September 30, 2002, Echostar's balance sheet shows a total
shareholders' equity deficit of close to $1 billion.


EMERGENT GROUP: Dec. 31 Working Capital Deficit Tops $2 Million
---------------------------------------------------------------
Emergent Group Inc., is the parent company of Medical Resources
Management, Inc., its wholly owned and only operating
subsidiary. MRM was acquired by Emergent in July 2001. MRM
primarily conducts its business through its wholly owned
subsidiary Physiologic Reps. Emergent, MRM and PRI are referred
to collectively hereinafter as the "Company." PRI is a provider
of surgical equipment on a fee for service basis to hospitals,
surgical care centers and other health care providers. PRI
serves both large and small health care providers, including: 1)
smaller independent hospitals and physicians who cannot afford
to buy surgical equipment because of budget constraints or
cannot justify buying due to limited usage; and 2) larger, well-
financed hospitals that may be able to purchase equipment for
use in their own facility but may choose not to because
reimbursement or utilization rates for many procedures do not
warrant a capital commitment. Additionally, infrequent
utilization may not justify the cost of training and retention
of technicians to operate such equipment. PRI is also able to
provide its technicians to support hospital-owned surgical
equipment on a fee for service basis, thus improving efficiency
and reducing costs for the hospital. Reduced operating costs and
improved flexibility for hospitals are elements of the PRI value
proposition to its customers.

Prior to Emergent's acquisition of MRM, Emergent was a merchant
banking firm. Merchant banks are essentially in the business of
finding opportunities and sources of funding and, with
investors' money and their own capital, financing growth and
facilitating transactions for, and among their clients. The
distinguishing characteristics of a merchant bank are that it
commits its own capital, or the capital of its principals, to a
transaction, either in the form of debt, typically short-term
bridge financing, or equity, and that it generally receives an
equity position in the client company as part or all of the
compensation for its services. In late 2000 Emergent made
convertible loans to MRM. Since July 2001 it has ceased merchant
banking activities in order to concentrate the Company's
management and resources on developing the mobile
surgical services business of MRM.

As of December 31, 2001, Emergent had a deficiency in working
capital of $1,837,584 and incurred a net loss of $9,720,221 for
the year then ended. In order to avoid ceasing operations, or a
possible bankruptcy filing and in an effort to improve its
financial condition, during the first quarter of 2002 the
Company began the process of renegotiating substantially all of
its outstanding debt, lease, and trade obligations with its key
creditors. As of December 31, 2002, it has substantially
completed this process whereby it has renegotiated outstanding
debt and lease obligations with principal balances outstanding
as of December 31, 2001 of approximately $5.1 million and has
recorded $2.1 million in net gains on forgiveness of debt. The
restructured debt and lease obligation agreements provide in
some cases for the return of equipment used to collateralize
such obligations, if applicable, and certain periodic and
monthly installments for the balance of such obligations. In
connection with the renegotiations with creditors Emergent
returned equipment with a net book value of approximately $1.5
million. Generally, in the event of default by the Company
Emergent is required to repay all amounts previously forgiven
and all amounts then outstanding are accelerated and become
immediately due and payable. In addition, Emergent has
renegotiated outstanding trade debt with its major vendors in
the amount of approximately $446,000 and has recorded gains on
forgiveness of vendor debt in the amount of $335,000. As of
January 30, 2003 the Company is in compliance with the terms and
conditions of its renegotiated debt agreements. However, as of
December 31, 2002 the Company continues to be in default under
certain note and lease obligations with aggregate principal
balances outstanding of $162,000. It intends to continue
negotiations with these creditors until these disputes are
resolved and satisfactory resolutions are reached. No assurances
can be given that these negotiations will be completed on terms
satisfactory to the Company, if at all.

At December 31, 2001, Emergent had a bank loan outstanding in
the amount of $867,000. The loan agreement provides for monthly
payments of principal of $33,333 and interest at the prime rate
plus 4.00%. Pursuant to the loan agreement principal and
interest are due in 60 monthly installments through May 2004. As
of December 31, 2001 the Company was in default under the loan
agreement and as a result all principal and interest were
accelerated and became immediately due and payable. However, in
connection with the renegotiation of its debt obligations the
due date for the principal and interest was extended to March
31, 2003. In addition, the lender has agreed to accept reduced
principal payments of $16,667 per month through March 31, 2003.
The Company assumed this loan obligation in July 2001 in
connection with its acquisition of MRM. It also has an
outstanding bank line of credit in the amount of $1,108,700 with
the same lender. This Bank Line of Credit provides for interest
at the prime rate, plus 2.75%, with borrowings based upon
eligible accounts receivable as defined. The amount outstanding
under the Bank Line of Credit exceeded the eligible borrowing
base as of December 31, 2001, and the Company was in default
under the credit agreement. As a result this facility is not
available for use as of January 30, 2003. Emergent has agreed
with the lender to pay down the Bank Line of Credit using 50% of
proceeds from the sale of medical rental equipment, not pledged
to other lenders, as such transactions occur. No amounts have
been repaid from such sales as of December 31, 2002. The Bank
Line of Credit has been extended to March 31, 2003.  The Company
intends to continue its renegotiation efforts with the lender in
order to reach favorable repayment terms and conditions
regarding these two bank credit facilities.  No assurances can
be given that these negotiations will be completed on terms
satisfactory to the Company, if at all.

The Bank Line of Credit and Bank Term Loan prohibit the payment
of cash dividends and require Emergent to maintain certain
levels of net worth and to generate certain ratios of cash flows
to debt service. Notwithstanding the modified terms and
conditions of the Bank Line of Credit and Bank Term Loan as
discussed above, as of December 31, 2001, and January 30, 2003,
Emergent was not in compliance with certain financial covenants
of such agreements. As a result, all of the bank loan facilities
are classified as current liabilities on the Company's balance
sheet as of December 31, 2001.

Emergent net loss of $9,720,221 for the year ended December 31,
2001 was due to a number of factors including impairment charges
for property and equipment and goodwill of $4,420,129, a
realized loss of on investments of $2,306,428 due to the
permanent impairment of such investments and an increase in
administrative and selling expenses as of result of the
acquisition of MRM in July 2001. However, the report of the
Company's independent auditors for the year ended December 31,
2001 contains a going concern opinion as a result of continuing
net losses, a deficiency in working capital as of December 31,
2001 and defaults under certain debt and lease agreements. These
matters raise substantial doubt about Emergent's ability to
continue as a going concern. While many of these losses were
primarily attributed to the matters noted here, there is no
assurances that Emergent will achieve profitability in the
future.


FAO INC: Files Reorg. Plan and Disclosure Statement in Delaware
---------------------------------------------------------------
FAO, Inc. (Nasdaq: FAOOQ), a leader in children's specialty
retailing, filed its Plan of Reorganization and Disclosure
Statement with the U.S. Bankruptcy Court for the District of
Delaware. The hearing on the adequacy of the Company's
Disclosure Statement has been set for February 28, 2003.

"The timely filing of the Plan of Reorganization and Disclosure
Statement represent significant progress in our Chapter 11
proceeding," stated Jerry R. Welch, FAO's Chief Executive
Officer. "We continue to be appreciative of the support that we
have received during this period from our vendors, employees and
customers, all of whom have allowed us to use this process to
lay the foundation for our future success."

The Company stated that it is continuing to discuss specifics of
the Plan with its various creditors and expects some changes
before the Plan is confirmed. The Plan as filed reflects the
Company's intention to raise new equity capital to fund the
reorganization and future growth of the company and to have
current equity holders remain holders in the reorganized
company. In this regard, the Company's Board of Directors is
working closely with senior management and its investment
bankers to source those investors who would be compatible in
pursuing the Company's long-term goals and objectives. The
Company noted, however, that it would not know the final
treatment of current equity until it has negotiated the final
terms of the new investment. The Company announced earlier that
it had hired Morgan Joseph & Co., to assist it in obtaining the
new investment.

Upon Court approval of the adequacy of the Disclosure Statement,
the Company will commence solicitation of votes for confirmation
of the Plan.

In addition the Company announced that it had obtained an order
allowing it to continue to use cash collateral of the Company's
lenders to fund its operations through April 4, 2003.

FAO, Inc., (formerly The Right Start, Inc.) owns a family of
high quality, developmental, educational and care brands for
infants, toddlers and children and is a leader in children's
specialty retailing. FAO, Inc., owns and operates the renowned
children's toy retailer FAO Schwarz; The Right Start, the
leading specialty retailer of developmental, educational and
care products for infants and toddlers; and Zany Brainy, the
leading retailer of development toys and educational products
for kids.

FAO, Inc., assumed its current form in January 2002. The Right
Start brand originated in 1985 through the creation of the Right
Start Catalog. In September 2001, the Company purchased assets
of Zany Brainy, Inc., which began business in 1991. In January
2002 the Company purchased the FAO Schwarz brand, which
originated 141 years ago in 1862.

For additional information on FAO, Inc., or its family of
brands, visit http://www.irconnect.com/faoo


FEDERAL-MOGUL: Gets Removal Period Extension Until June 1, 2003
---------------------------------------------------------------
Judge Randall Newsome extends, to and including June 1, 2003,
Federal-Mogul Corporation and its debtor-affiliates' removal
period with respect to civil actions pending as of the Petition
Date as well as all matters specified in Federal Rule
9027(a)(2)(A), (B) and (C). (Federal-Mogul Bankruptcy News,
Issue No. 30; Bankruptcy Creditors' Service, Inc., 609/392-0900)


FISHER SCIENTIFIC: Full-Year 2002 Results Show Solid Performance
----------------------------------------------------------------
Fisher Scientific International Inc. (NYSE: FSH), the world
leader in serving science, reported record sales and earnings
for the full year ended Dec. 31, 2002, reflecting solid
performance across all its business segments.

"We concluded our centennial year on a high note, achieving
record sales, earnings and operating cash flow for 2002," said
Paul M. Montrone, chairman and chief executive officer. "We are
well positioned to achieve our objectives for 2003."

                     2002 Reported Results

Sales for the fourth quarter increased 8.9 percent to $822.1
million compared with $754.7 million in the corresponding period
of 2001. Excluding the effect of foreign exchange, sales totaled
$811.9 million in the fourth quarter, a 7.6 percent increase
over the same quarter in 2001. Fourth-quarter net income
increased to $26.9 million, compared with $11.0 million in the
fourth quarter of 2001.

For the year ended Dec. 31, 2002, sales totaled $3,238.4
million, a 12.4 percent increase from sales of $2,880.0 million
in 2001. Excluding the effect of foreign exchange, sales totaled
$3,221.4 million in 2002, an 11.9 percent increase from
comparable 2001 sales. Full-year net income increased to $50.6
million, compared with net income of $16.4 million in 2001. Cash
from operations totaled $159.3 million, consistent with the
prior year, and capital expenditures increased slightly to $43.9
million.

                    Pro Forma Financial Results

To facilitate comparison with the prior-year periods in the
following discussion, goodwill amortization has been excluded
from the results of the prior-year periods. In addition, the
discussion excludes previously disclosed nonrecurring and
restructuring charges and credits for both periods, and goodwill
write-off in 2002. These items are outlined in the attached
tables.

Income from operations for the quarter increased 10.4 percent to
$61.4 million from $55.6 million in the fourth quarter of 2001.

Fourth-quarter net income increased 33.8 percent to $26.5
million compared with net income of $19.8 million in the
corresponding period of 2001, reflecting an improvement in
operating income and a reduction in both interest expense and
the effective tax rate.

Income from operations for the full year increased 16.2 percent
to $242.9 million from $209.0 million during 2001.

Net income for the full year increased 47.8 percent to $102.4
million compared with net income of $69.3 million in 2001.

                    Business-Segment Results

Domestic distribution sales increased 7.0 percent to $688.9
million in the fourth quarter of 2002 compared with the same
period in 2001. Operating income increased to $51.6 million from
$46.7 million in the corresponding period of 2001. For full-year
2002, domestic distribution sales reached $2,776.0 million
compared with $2,439.9 in 2001, a 13.8 percent increase.
Operating income for 2002 grew to $210.8 million, a 16.3 percent
increase over the previous year.

Excluding foreign-exchange effects, international distribution
sales totaled $111.3 million in the latest quarter, a 5.8
percent increase compared with the prior year's quarter.
Reported sales totaled $119.5 million in the fourth quarter, a
13.6 percent increase from the fourth quarter of 2001. For the
latest quarter, operating income totaled $5.8 million, in line
with the same period in 2001, reflecting margin improvement,
offset by integration costs related to the acquisition of Retsch
and Emergo. Sales for the full year increased to $448.4 million
compared with $425.4 million in 2001, while operating income in
2002 increased to $21.4 million from $18.6 million in 2001.
Excluding foreign-exchange effects, sales were $435.4 million,
representing a 2.4 percent increase over the prior year.

Fourth-quarter sales of the laboratory-workstations segment
increased 25.4 percent to $58.3 million from $46.5 million in
the prior year, while operating income was $4.3 million compared
with $2.5 million in the corresponding quarter of 2001. Fourth-
quarter revenue was positively affected by a homeland-security
project not expected to be repeated in 2003. Full-year sales
rose to $193.9 million, up 8.6 percent from $178.6 million the
prior year. Operating income for the year was $11.7 million
compared with $8.7 million in 2001.

Order activity in the laboratory-workstations segment continued
to be stable in the fourth quarter, with backlog at
approximately $108 million.

Special Items

     -- As previously announced, in November, Fisher acquired
Maybridge Chemical Holdings Limited and Mimotopes Pty. Ltd.
Maybridge is a United Kingdom-based provider of organic
compounds and combinatorial libraries for use in drug discovery.
Mimotopes is an Australia-based manufacturer of custom peptides
and peptide libraries used in conducting scientific research.
The results of Maybridge and Mimotopes have been included in the
domestic distribution segment.

     -- Shortly, Fisher expects to close a new $550 million
senior secured credit facility, which includes a five-year, $150
million revolving credit facility and a seven-year, $400 million
term-loan facility. On Jan. 14, the company issued $200 million
of senior subordinated notes at a price to yield 7.4 percent.
The net proceeds from the term-loan facility and the notes
offering will be used to refinance the company's 9 percent
senior subordinated notes due in 2008, which were callable after
Jan. 31. Excluding approximately $45 million of one-time charges
associated with the refinancing, of which $27 million is cash,
the company estimates that this refinancing will provide $12
million to $14 million of pretax savings this year.

                         Company Outlook

For 2003, Fisher expects revenue growth, excluding foreign-
exchange effects, of approximately 5 percent to 6 percent, and
operating margins in the 7.7 percent to 7.9 percent range versus
7.5 percent in 2002.

Excluding the aforementioned nonrecurring charges, Fisher is
raising its 2003 EPS guidance to a range of $2.20 to $2.30 from
its previously announced range of $2.10 to $2.15, based on an
estimated weighted average of approximately 59.2 million diluted
shares outstanding and a 30 percent tax rate.

Operating cash flow for 2003 is expected to be in the $180
million to $190 million range, and total depreciation and
amortization for the year is estimated to be approximately $78
million. Capital expenditures are estimated at approximately $60
million, reflecting continued facility consolidation and
increased investment in chemical manufacturing and
pharmaceutical services.

                    Upcoming Presentations

Fisher Scientific will present at the following conferences:

-- Merrill Lynch Global Pharmaceutical and Medical Device
Conference at 2:10 p.m. EST on Feb. 6 at the Grand Hyatt Hotel
in New York City.

-- Lehman Brothers Global Healthcare Conference at 2 p.m. EST on
March 3 at the Loews Miami Beach Hotel in South Beach, Fla.

-- Deutsche Banc Securities HealthCare Conference, May 6-7 at
the Marriott Waterfront Hotel in Baltimore, Md.

-- Goldman Sachs HealthCare Conference, June 9-12 at the Ritz-
Carlton Laguna Niguel Hotel in Dana Point, Calif.

As the world leader in serving science, Fisher Scientific
International Inc., (NYSE: FSH) offers more than 600,000
products and services to more than 350,000 customers located in
approximately 145 countries. As a result of its broad product
offering, electronic-commerce capabilities and integrated global
logistics network, Fisher serves as a one-stop source of
products, services and global solutions for its customers. The
company's primary target markets are life science, clinical
laboratory and industrial-safety supply. Additional information
about Fisher is available on the company's Web site at
http://www.fisherscientific.com  

As reported in Troubled Company Reporter's December 23, 2002
edition, Standard & Poor's placed its ratings on Fisher
Scientific International Inc., on CreditWatch with positive
implications. The ratings action reflects Fisher's strong
performance in a difficult market environment and the expected
benefits of a planned refinancing.

The company's total debt outstanding is $900 million.

Standard & Poor's estimates that a proposed refinancing of high-
cost debt issued to finance the company's 1998 leveraged buyout
should save at least $10 million of interest expense annually.
If the refinancing is completed as anticipated in early 2003,
Standard & Poor's expects to raise the corporate credit and
senior debt ratings to 'BB' from 'BB-' and subordinated debt
ratings to 'B+' from 'B'.


FLAVIUS LTD: Fitch Downgrades Four Note Classes to Junk Level
-------------------------------------------------------------
Fitch Ratings has downgraded the following ratings of Flavius
CDO Ltd., a collateralized bond obligation (CBO).

The following securities have been downgraded:

     -- $159,999,725 class A-1 senior secured fixed-rate notes
        due 2011 to 'A-' from 'AAA';

     -- $25,000,000 class A-2A senior secured fixed-rate notes
        due 2017 to 'BBB' from 'AAA';

     -- $25,000,000 class A-2B senior secured fixed-rate notes
        due 2017 to 'CCC' from 'BBB+';

     -- $10,000,000 class B senior secured fixed-rate notes due
        2017 to 'C' from 'BB+';

     -- $7,500,000 class C secured fixed-rate notes due 2017 to
        'C' from 'CC';

     -- $6,250,000 class D secured fixed-rate notes due 2017
        affirmed 'C'.

These actions reflect deterioration in the credit quality of the
portfolio and several referenced obligors becoming subject to
credit events. These obligations include, but are not limited
to, Savannah II CDO class C and Embarcadero Aircraft
Securitization Trust class C which became eligible for credit
events under the terms of their respective credit linked note
programmes following downgrades to 'CCC' on both securities.

Flavius CDO Ltd. has experienced $17,500,000 (7%) defaults to
date. Its weighted average rating factor has also increased
significantly since the deal's inception. As a result of failing
overcollateralization tests, Flavius CDO Ltd.'s class C and D
notes deferred interest on the last two payment dates.

The issuer has 49.2% of its portfolio in the form of CLNs. The
issuer's assets are comprised of 14.9% corporate CLNs, 15.5% ABS
CLNs, 18.7% CDO CLNs, 10.4% sovereign emerging market
securities, and 40.5% corporate debt.

Due to volatility in the portfolio, the ratings of class A-1, A-
2A, and A-2B notes are placed on Rating Watch Negative


FRIENDLY ICE CREAM: FleetBoston Discloses 10.63% Equity Stake
-------------------------------------------------------------
FleetBoston Financial Corporation beneficially owns 785,753
shares of the common stock of Friendly Ice Cream Corporation,
representing 10.63% of the outstanding common stock of Friendly.
FleetBoston may exercise sole power to vote, or to direct the
vote of, 572,553 such shares, sole power to dispose of, or to
direct the disposition of, 783,753 such shares, and shared power
to dispose or to direct the disposition of 2000 shares.  The
FleetBoston subsidiaries also acquiring the stock are Fleet
National Bank and Fleet Investment Advisors, Inc.

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

DebtTraders says Friendly Ice Cream Corp.'s 10.500% bonds due
2007 (FRN07USR1) are trading at about 87 cents-on-the-dollar.
See http://www.debttraders.com/price.cfm?dt_sec_ticker=FRN07USR1
for real-time bond pricing.


GARDENBURGER INC: Dec. 31 Net Capital Deficit Widens to $48 Mil.
----------------------------------------------------------------
Gardenburger, Inc.,(OTC Bulletin Board: GBUR) reported financial
results for the Company's first quarter of fiscal 2003. Net
revenues were $9.0 million for the quarter ended December 31,
2002, compared to $10.8 million for the quarter ended
December 31, 2001. The first quarter net loss available for
common shareholders was $3.6 million; and includes a $411,000
write-off of goodwill from a 1996 acquisition. The net loss
available for common shareholders for the first quarter of
fiscal 2002 was $1.2 million and included the benefit of a
$300,000 reversal of a restructuring reserve deemed no longer
needed.

At December 31, 2002, the Company's balance sheet shows a total
shareholders' equity deficit of about $48 million, up from a
deficit of about $45 million recorded at September 30, 2002.

"We are disappointed with our sales results for the first
quarter of fiscal 2003," said Scott Wallace, Chairman of the
Board, President and Chief Executive Officer of Gardenburger,
Inc. "We saw a softening in our food service sales which we are
currently addressing. Additionally, we continue to see pressure
in the competitive veggie burger segment of the grocery channel.
On a positive note, our new product sell-in is going well for
our new Herb Crusted Cutlet and Crispy Nugget products. We are
also launching two additional products, Barbecued Chicken and
Meatless Meatloaf, which should be on shelf this spring."

                    First Quarter Results

For the first quarter of fiscal year 2003, Gardenburger posted a
gross margin of 37 percent, compared to 39 percent during the
comparative quarter last year. The reduced gross margin is
attributable to a shift in the mix of product sales as the
Company's non-burger products represent a greater portion of
quarterly sales and their costs of production are currently
higher than veggie burgers.

Selling and marketing expense for the first quarter was $3.2
million, compared to $3.0 million for the first quarter of
fiscal year 2002. General and administrative costs for the
quarter decreased to $1.0 million from $1.1 million in the
comparative quarter of fiscal 2002. The decrease is a direct
result of reduced overhead costs at Gardenburger's
administrative offices.

In the quarter ended December 31, 2002, the Company expensed
$411,000 representing the write-off of the unamortized portion
of goodwill related to the acquisition of two companies in
January 1996. New accounting standard SFAS 142, "Goodwill and
Other Intangible Assets," changed the accounting for goodwill
from an amortization method to an impairment approach. The
remaining goodwill was deemed impaired and therefore expensed.
Amortization of goodwill in fiscal 2002 totaled $123,000 or
$31,000 per quarter.

The first quarter of fiscal 2002 included the benefit of a one-
time reversal of the remaining portion of a restructuring
reserve of $300,000. Other expense for the quarter ended
December 31, 2002 was $1.1 million versus $393,000 for the
quarter ended December 31, 2001. The $709,000 increase was a
result of higher interest costs and fees associated with the
refinancing of the Company's debt and the addition of an $8.0
million term loan related to the purchase of manufacturing
equipment in January 2002.

Founded in 1985 by GardenChef Paul Wenner(TM), Gardenburger,
Inc., is an innovator in meatless, low-fat food products. The
Company distributes its flagship Gardenburger(R) veggie patty to
more than 30,000 food service outlets throughout the United
States and Canada. Retail customers include more than 24,000
grocery, natural food and club stores. Based in Portland, Ore.,
the Company currently employs approximately 180 people.


GCI INC: Meets Performance Targets for Fourth Quarter 2002
----------------------------------------------------------
GCI, Inc. (Nasdaq: GNCMA) -- whose $325 million senior secured
credit facility and corporate credit rating are rated by
Standard & Poor's at BB+ and BB, respectively -- expected
results for the year 2002 with revenues growing to approximately
$367.8 million, an increase of 2.9 percent over 2001. Earnings
before interest, taxes, depreciation and amortization (EBITDA)
is expected to total $102.1 million, a 5.6 percent increase over
2001. The year 2001 results included revenue and EBITDA of $19.5
million and $7.3 million, respectively, from the sale of fiber
capacity in the first quarter of 2001. The expected results
represent revenue and EBITDA increases of 8.9 percent and 14.2
percent, respectively, after excluding the fiber capacity sale
in 2001. GCI's expected results for 2002 will represent the
sixth consecutive year of record revenues and EBITDA.

Fourth quarter revenues are expected to total approximately
$92.3 million as compared to $86.8 million reported in the
fourth quarter of 2001, an increase of 6.3 percent. EBITDA for
the fourth quarter is expected to total $28.1 million, an
increase of 21.1 percent over the reported 2001 fourth quarter
EBITDA of $23.2 million. Fourth quarter revenues and EBITDA, as
expected, decreased sequentially by $2.3 million and $2.2
million, respectively. The sequential decrease in revenues is
attributable to seasonality in the company's message toll
service, decrease in MTS carrier traffic, and an incentive
credit provided to a carrier customer, partially offset by
increases in revenues from satellite broadband, private line and
the company's other business segments. The sequential decrease
in EBITDA is due primarily to the seasonal decline in higher
margin long distance revenues, the carrier customer credit and a
slight increase in operating costs.

The fourth quarter 2002 net income is expected to be $0.5
million or $0.00 per share on a diluted basis and, compares to
net income of $0.5 million or $0.00 per share on a diluted basis
for the fourth quarter of 2001. Net income in the fourth quarter
of 2002 is flat due to the write off of $2.3 million of
unamortized loan costs and higher interest rates incurred as a
result of the senior bank facility refinancing which closed
during the quarter. GCI will record estimated net income of $6.7
million or $0.08 per share on a diluted basis for the year. The
expected net income is primarily attributable to an increase in
customers, new products and services, cost management, and an
accounting change requiring the discontinuance of amortization
of goodwill and cable television certificates. The 2002
estimated net income of $6.7 million compares to net income of
$4.6 million, or $0.05 per share on a diluted basis for 2001.

"The year 2002 held many challenges for GCI," said Ron Duncan,
GCI president. "Restricted capital markets and corporate
governance issues weighed heavily on the telecom and cable
industries this past year. The company worked hard to not let
these challenges distract us and, the results speak in the form
of another record year. We couldn't be more pleased to report
our sixth consecutive year of record high revenues and EBITDA,
especially considering that the results reflect an $11.0 million
charge due to the WorldCom bankruptcy filing.

The company's local services business added approximately 4,000
access lines during the fourth quarter. During the quarter GCI
completed a data base upgrade and clean up program which shows
that the company has more than 96,000 access lines in service
representing a 20 percent market share of the total access lines
in Alaska. GCI's statewide Internet platform added 500 net new
customers during the fourth quarter and now serves 71,700
customers. More than 36,200 of these Internet customers are
using GCI cable modem service. GCI cable television services
pass 196,927 homes and serve 136,055 basic subscribers. Basic
subscribers increased 3.1 percent for the year 2002 and
increased sequentially by 1,474 subscribers from the third
quarter of 2002. GCI added 2,000 digital customers during the
third quarter and now serves 30,500 digital customers in
Anchorage, Fairbanks, Juneau and Kenai.

The expected fourth quarter 2002 revenues of $92.3 million and
EBITDA of $28.1 million compares favorably to the company's
guidance for fourth quarter 2002 revenue of $92 million to $94
million and EBITDA in excess of $27.5 million.

Further detailed results and financial tables for the year 2002
and fourth quarter of 2002 will be released on February 26,
2003. GCI will also hold an institutional investor and analyst
conference call on February 27, 2003. Details will be posted on
http://www.gci.com


GENUITY: Completes Asset Sale Transaction with Level 3 Comms.
-------------------------------------------------------------
Genuity Inc., announced that Level 3 Communications (Nasdaq:
LVLT) completed the acquisition of substantially all of its
assets and operations for $60 million in cash plus $77 million
in cash for prepayments to vendors for network services to be
utilized in 2003, subject to further adjustments after the
closing of the acquisition under the asset purchase agreement
between the companies. In addition, Level 3 will assume certain
of Genuity's long-term operating agreements.

In accordance with the asset purchase agreement, Level 3's cash
consideration at closing was adjusted from the previously
announced amount of $242 million, including adjustments related
to the timing of closing, employee severance reimbursements, and
other adjustments relating to decisions made to date regarding
Genuity's operating agreements.

After the closing of the transaction, and as part of the Chapter
11 process, the Genuity Estate will continue to finalize its
distributions to creditors. Ira Parker, Genuity's former
executive vice president and general counsel, has been elected
president and CEO of the Genuity Estate.

During the coming months, the Genuity Estate will prepare and
file its plan of reorganization. Under the terms of the asset
purchase agreement with Level 3, the cash paid by Level 3 for
Genuity's assets and additional cash remaining on Genuity's
balance sheet will ultimately be distributed to the company's
creditors.

Genuity also announced that Paul R. Gudonis has stepped down as
chairman and CEO of the company.  Mr. Gudonis will join Level 3
as executive vice president, working with Level 3's senior
management on the Genuity transition and integration. He will
also be involved in the company's corporate strategy as well as
mergers and acquisitions.

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

Genuity currently trades on the Over the Counter Bulletin Board
under the symbol OTC BB: GENUQ.


GENUITY INC: Obtains Lease Decision Deadline Extension to May 5
---------------------------------------------------------------
Genuity Inc., and its debtor-affiliates estimate that as of the
Petition Date, they were parties to 450 unexpired leases of non-
residential real property, including lease agreements for office
space, storage space and points of presence, as well as co-
location agreements, fiber leases and indefeasible rights of
use, and conduit leases and licenses.  At this point in time,
the Debtors have not had a sufficient opportunity to make final
determinations regarding the assumption or rejection of all the
Unexpired Leases.

Section 365(d)(4) of the Bankruptcy Code provides:

  "[I]f the trustee does not assume or reject an unexpired lease
  of non-residential real property under which the debtor is the
  lessee within 60 days after the date of the order for relief,
  or within such additional time as the court, for cause, within
  such 60-day period, fixes, then such lease is deemed rejected,
  and the trustee shall immediately surrender such
  non-residential real property to the lessor."

Thus, the Debtors ask the Court to extend the time to assume or
reject their Unexpired Leases for 95 days, through and including
May 5, 2003.

D. Ross Martin, Esq., at Ropes & Gray, in Boston, Massachusetts,
asserts that cause exists to extend the lease decision period.
Since the Petition Date, the Debtors have been consumed with
handling a vast number of crucial administrative and business
matters and working diligently to continue to operate their
businesses.  Moreover, the Debtors have been deeply involved in
the process of preparing to sell substantially all of their
assets through these bankruptcy proceedings.  As a result of
these postpetition activities, the Debtors simply have not had
an adequate opportunity to review completely each of their 450
Unexpired Leases and to determine the economics of each
Unexpired Lease, whether or not the Unexpired Lease is
burdensome to the estate, and how the Unexpired Lease will fit
in with the Asset Sale to Level 3.

According to Mr. Martin, the Unexpired Leases represent assets
of the Debtors' estates subject to the Bidding Procedures.  It
is not until after a successful bidder has been established,
therefore, that the Debtors will be in a position to know which
Unexpired Leases should be assumed and which should be rejected.
Thus, if the Debtors assume the Unexpired Leases without further
review and subsequently discover that the successful bidder has
no interest in these leases, the Debtors will risk either:

    -- jeopardizing the sale by attempting to force the buyer to
       assume the Unexpired Leases; or

    -- incurring substantial administrative claims against the
       bankruptcy estates by rejecting or breaching the
       Unexpired Leases.

Alternatively, if the Debtors reject the Unexpired Leases prior
to selecting the successful bidder and subsequently discover
that the successful bidder was interested in these leases, the
Debtors may have inadvertently undermined their ability to sell
the business and greatly reduced the value of the enterprise.

"The Debtors intend to continue to pay all amounts due under the
Unexpired Leases in the ordinary course of business.  Thus, the
requested extension will not result in any harm or prejudice to
the other parties to the Unexpired Leases, but will relieve the
Debtors from having to make a premature decision with respect to
these leases," Mr. Martin explains.

                       *     *     *

After due deliberation, Judge Beatty grants the Debtors' motion
subject to these limitations:

  A. The Sublease executed by and between Century Cellular
     Network, Inc. and GTE Mobilenet of Indianapolis, Inc.,
     dated December 3, 1996, for the premises located at 4529
     West 96th Street in Indianapolis, Indiana will be deemed
     rejected by operation of law, effective as of January 26,
     2003;

  B. The time period for the Debtors to assume or reject the
     unexpired lease executed by and between Genuity Solutions
     Inc., and The Realty Associates for 76,314 square feet of
     commercial property located at 750 State Highway 121 in
     Lewisville, Texas, which lease is guaranteed by Genuity
     Inc., is extended through January 31, 2003;

  C. The Realty Associates Lease will be deemed rejected
     effective as of January 31, 2003;

  D. As a condition to the extension granted with respect to the
     various co-location agreements executed by and between
     MCI/WorldCom and the Debtors, the Debtors will segregate
     $1,500,000, which is alleged by MCI/WorldCom Network
     Services, Inc. and affiliates to be owed by the Debtors for
     postpetition amounts due under the WorldCom Agreements; and

  E. The Debtors will continue to segregate the MCI/WorldCom
     Reserve Amount until the parties make a final determination
     of the status and amount of the postpetition obligations
     allegedly due to MCI/WorldCom by the Debtors. (Genuity
     Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
     Service, Inc., 609/392-0900)


GEOWORKS: Enters Mutual Release with Teleca to Cease UK Business
----------------------------------------------------------------
Geoworks Corporation (OTC Bulletin Board: GWRXE) is ceasing its
UK operations. In efforts to minimize its liabilities and to
satisfy its outstanding obligations, the company entered into a
mutual release agreement with Teleca Ltd., that allows Teleca to
hire the company's former employees and do business with the
company's customers. In consideration of this release, Teleca
has agreed to pay the company approximately $500,000. Also,
Teleca separately agreed to assume Geoworks UK subsidiary's
remaining facilities lease obligations in exchange for use of
the subsidiary's equipment.

"We had planned to sell our UK subsidiary and its professional
services business to Teleca pursuant to our September share
transfer agreement, but our efforts to get required shareholder
approval failed because we were unable to obtain a quorum for
the special shareholders meeting, despite an extensive proxy
solicitation process and an 8 to 1 favorable shareholder vote,"
noted Tim Toppin, Vice President and Chief Financial Officer.

Toppin further explained, "Geoworks' weak financial position has
made it increasingly difficult to maintain a viable ongoing
business in the UK. This action is necessary in order to satisfy
our legal obligations to our employees, our creditors and our
primary customer. As a result, we expect to be able to minimize
significant liabilities for legally required employee severance
payments and for our UK subsidiary's long-term facilities lease,
which we estimated to total over $700,000. Although no
intellectual property or customer contracts are being assigned,
we have encouraged our customers to work with Teleca to satisfy
all of our outstanding service obligations."

Geoworks Corporation has been a provider of leading-edge
software design and engineering services to the mobile and
handheld device industry. Based in Emeryville, California, the
Company has maintained a European development center in the
United Kingdom prior to this announcement. Additional
information about Geoworks can be found on the World Wide Web at
http://www.geoworks.com  

                         *     *     *

As reported in Troubled Company Reporter's January 10, 2003
edition, Geoworks Corporation cancelled its January 8, 2003,
special stockholders meeting due to a lack of a quorum.

"Since the votes cast were overwhelmingly in favor of the
company's proposals to sell its UK professional services
business and to liquidate, we are very disappointed that there
were simply not enough votes cast despite numerous mailings and
phone calls," said Steve Mitchell, president and CEO of the
company. "We thank those shareholders who did return their
ballots and our proxy solicitors for all of their efforts. The
company must now rapidly assess its alternatives, including
seeking bankruptcy protection."


GLOBAL CROSSING: Resolves Claims Dispute with Alcatel Entities
--------------------------------------------------------------
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 the Global Crossing Debtors'
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)

Global Crossing Holdings' 9.825% bonds due 2008 (GBLX08USR1) are
trading at about 4 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=GBLX08USR1
for real-time bond pricing.


HELLER: Fitch Rates Four Note Classes at Low-B & Junk Levels
------------------------------------------------------------
Fitch takes the following rating actions on Heller Equipment
Asset Receivables Trust (HEART) 1999-1 and Heller Equipment
Asset Receivables Trust 1999-2.

  Heller Equipment Receivables Trust 1999-1(HEART 1999-1)

--  Class A-4 Receivable-Backed Notes affirmed at 'AAA';  

--  Class B Receivable-Backed Notes affirmed at 'A+';  

--  Class C Receivable-Backed Notes are rated 'BBB' and are      
    removed from Rating Watch Negative;  

--  Class D Receivable-Backed Notes are rated 'BB' and are
    removed from Rating Watch Negative.  

      Heller Equipment Receivable-Backed Trust 1999-2
                       (HEART 1999-2)

-- Class A-4 Receivable-Backed Notes are rated 'AAA' and are
   removed from Rating Watch Negative;

-- Class B Receivable-Backed Notes are rated 'A' and are removed
   from Rating Watch Negative;

-- Class C Receivable-Backed Notes are rated 'BB' and removed
   from Rating Watch Negative;

-- Class D Receivable-Backed Notes are rated 'B' and remain on
   Rating Watch Negative;

-- Class E Receivable-Backed Notes are rated 'CCC' and remain on
   Rating Watch Negative.

In its recent review of the HEART 1999-1 transaction, Fitch
noted that default rates have stabilized and that recoveries on
previously defaulted contracts have increased the level of
credit enhancement available to all classes of notes. Based on
this review, the class A-4 notes remain rated 'AAA,' the class B
notes remain rated 'A+,' the class C notes remain rated 'BBB'
and are removed from Rating Watch Negative, and the class D
notes remain rated 'BB' and are removed from Rating Watch
Negative. In its review of the HEART 1999-2 transaction, Fitch
noted that default rates have stabilized and that credit
enhancement available to all classes of notes has increased due
to the higher than expected recoveries on defaulted contracts.
Based on this review, the class A notes remain rated 'AAA' and
are removed from Rating Watch Negative, the class B notes remain
rated 'A' and are removed from Rating Watch Negative, the class
C notes remain rated 'BB' and are removed from Rating Watch
Negative. The class D and E notes remain significantly
undercollateralized due to prior adverse collateral performance.
However, Fitch believes that future recoveries on defaulted
contracts may be sufficient enough to reduce the current
underwater position of these notes. Therefore, the class D and E
notes are affirmed at 'B' and 'CCC' respectively and both
classes remain on Rating Watch Negative.

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


INLAND RESOURCES: Inks Workout Pact with Banks, TCW & Smith
-----------------------------------------------------------
Inland Resources Inc., (OTCBB:INLN) Inland Resources Inc.
entered into an Exchange and Stock Issuance Agreement with
Inland Holdings, LLC ("Holdings"), an entity managed by an
affiliate of Trust Company of the West ("TCW"), and SOLVation,
Inc. ("Smith"), an affiliate of Smith Management, LLC, as the
holders of the Company's subordinated debt securities, to
exchange $103,968,964 in aggregate principal amount of such
securities plus accrued interest (a total of $120,097,000 as of
November 30, 2002) for newly issued shares of the Company's
Common and Series F Preferred Stock.  The principal terms of the
Exchange Agreement and an agreement between Holdings and Smith
will be executed concurrently in four steps:

STEP 1: EXCHANGE OF HOLDINGS SUB NOTE AND SMITH JUNIOR SUB NOTE
        INTO COMMON STOCK AND SERIES F PREFERRED STOCK

EXCHANGES:         Holdings will exchange a subordinated
                   note in the principal amount of
                   $98,968,964, plus all accrued and unpaid
                   interest thereon, for 22,053,000 shares
                   of the Company's common stock and that
                   number of shares of Series F Preferred
                   Stock equal to 911,588 shares plus 338
                   shares for each day after November 30,
                   2002 up to and including the closing date
                   (the "Holdings Exchange"). Smith will
                   exchange its Junior Subordinated Note in
                   the principal amount of $5,000,000, plus
                   all accrued and unpaid interest thereon,
                   for that number of shares of Series F
                   Preferred Stock equal to 68,854 shares
                   plus 27 shares for each day after
                   November 30, 2002 up to and including the
                   closing date (the "Smith Exchange").

TERMS OF SERIES
F PREFERRED STOCK:

Securities:        1,100,000 shares of the Company's Class A
                   Preferred Stock will be designated Series
                   F Preferred Stock, and the Company
                   contemplates issuing approximately
                   1,000,000 shares of Series F Preferred
                   Stock, in the aggregate, pursuant to the
                   Holdings Exchange and Smith Exchange
                   (together, the "Exchange").

Holders:           Holdings and Smith

Liquidation
Preference:        In the event of a voluntary or
                   involuntary liquidation, dissolution or
                   winding up of the Company, the holders of
                   the Series F Preferred Stock shall be
                   entitled to receive, in preference to the
                   holders of the common stock but only
                   after payment in full of the senior bank
                   credit facility, a per share amount equal
                   to $100, as adjusted for any stock
                   dividends, combinations or splits with
                   respect to such share, plus all accrued
                   or declared but unpaid dividends on such
                   share.

Automatic
Conversion:        Each share of Series F Preferred Stock
                   will be automatically converted into 100
                   shares of the Company's common stock
                   when sufficient shares of Common Stock
                   have been authorized.

STEP 2: MODIFICATION OF THE COMPANY'S
        SENIOR BANK CREDIT FACILITY

                   *** The Banks gave their consent to these
                   *** transactions earlier this week.

                   The Exchange is conditional upon the
                   Company's senior bank lenders agreeing to
                   the modifications in the senior credit
                   facility outlined below:

                   The banks will allow all transactions
                   contemplated by the Exchange Agreement.

                   The banks will extend the Company's
                   borrowing base of $83.5 million through
                   July 31, 2003 and provide a credit
                   commitment of $5 million for letters of
                   credit to support certain commodity
                   pricing hedging obligations and secure
                   certain EPA bonding obligations.

                   The banks will extend the date on which
                   the revolving facility converts to a term
                   loan to September 30, 2004 and permit the
                   term loan to be paid in installments with
                   a final maturity date of December 31,
                   2008, if the Company obtains $15 million
                   of equity, debt or other property
                   approved by the banks by December 31, 2003.

                   The banks will modify financial
                   covenants.

                   The banks will grant a 10-day notice and
                   grace period upon a breach of a negative
                   covenant (before acceleration can
                   commence) except for defaults in the
                   payment of obligations to the Lenders.
                   All existing defaults will be waived.

                   The Company will agree to hedge specified
                   percentages of its aggregate projected
                   oil and gas production by specified
                   dates.

STEP 3:  MODIFICATION OF THE SMITH SENIOR SUBORDINATED NOTE

                   The terms of the Senior Subordinated Note
                   Purchase Agreement dated as of August 2,
                   2001 (regarding the Senior Subordinated
                   Note held by Smith in the principal
                   amount of $5,000,000) will be amended (i)
                   to extend the maturity date to be six
                   months after the banks' maturity date (or
                   earlier repayment in full) but no later
                   than July 1, 2009, provided that if the
                   Company enters into any additional
                   borrowings during the term period of the
                   bank credit facility, the Senior
                   Subordinated Note must be repaid in full,
                   and (ii) to amend and conform certain
                   affirmative and negative covenants.

STEP 4: GOING PRIVATE TRANSACTION

Formation
of Newco:          Holdings, Smith and an affiliate of Smith
                   which currently owns a majority of the
                   common stock of the Company (Smith and
                   such affiliate, together, the "Smith
                   Parties") will form a new Delaware
                   corporation to be known as Inland
                   Resources Inc. ("Newco"). Immediately
                   following completion of Steps 1, 2 and 3
                   above, Holdings will contribute to Newco
                   all of Holdings' interests in the
                   Company's common stock and Series F
                   Preferred Stock in exchange for 92.5% of
                   the common stock of Newco, and each of
                   the Smith Parties will contribute to
                   Newco all of their respective interests
                   in the Company's common stock and Series
                   F Preferred Stock in exchange for an
                   aggregate of 7.5% of the common stock of
                   Newco. Newco will then own 99.7% of the
                   Company's common stock and common stock
                   equivalents.

Short Form Merger: Upon the formation of Newco and closing
                   of the Exchange, the Board of Directors
                   of Newco will meet to pass a resolution
                   for the Company to merge with and into
                   Newco, with Newco surviving as a Delaware
                   corporation (the "Merger"). No action is
                   required by the Company's shareholders or
                   Board of Directors under the relevant
                   provisions of Washington and Delaware law
                   in order to effect a "short-form" merger
                   of a subsidiary owned more than 90% by
                   its parent corporation. All outstanding
                   shares and options to purchase shares of
                   the Company will be cancelled in the
                   Merger, and shareholders of the Company
                   other than Holdings, Smith and their
                   affiliates will receive $1.00 per share
                   in cash in payment of their cancelled
                   shares.

Appraisal Rights:  Shareholders of the Company will have the
                   right to dissent from the Merger and have
                   a court appraise the value of their
                   shares. Shareholders electing this remedy
                   must comply with the procedures of
                   Section 23B.13 of the Washington Business
                   Corporation Act. Shareholders electing to
                   exercise their right of appraisal will
                   not receive the $1.00 per share paid to
                   all other public shareholders, but will
                   instead receive the appraised value,
                   which may be more or less than $1.00 per
                   share.

Effect of
the Merger:        The Merger will result in the Company
                   terminating its status as a reporting
                   company under the Securities Exchange Act
                   of 1934 and its stock ceasing to be
                   traded on the over-the-counter bulletin
                   board. Its successor, Newco, will be a
                   private company owned by two
                   shareholders. Newco will assume all
                   obligations of the Company in the Merger.

Management
Options:           Marc MacAluso and Bill I. Pennington,
                   executive officers of the Company, will
                   each receive an amendment to their
                   Employment Agreements with the Company,
                   which will survive and be assumed by Newco.
                   Such agreements will provide that Mr.
                   MacAluso and Mr. Pennington receive stock
                   options to purchase 4% and 3%, respectively,
                   of the common stock of Newco for an exercise
                   price equivalent to the exchange value in
                   the Exchange.

Details of the Exchange and Merger, including financial
statements and pro forma financial statements, will be included
in a Schedule 13E-3 Transaction Statement which will be filed
with the Securities and Exchange Commission and disseminated
to shareholders in the near future.

Inland Resources Inc., is an independent energy company with
substantially all of its producing and non-producing oil and gas
interests in the Monument Butte Field in the Uinta Basin of
Northeastern Utah.


INTEGRATED HEALTH: Rotech Wants More Time to Challenge Claims
-------------------------------------------------------------
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor LLP,
in Wilmington, Delaware, reminds the Court that the deadline
originally established by the Rotech Plan to file objections to
Claims was July 24, 2002.  On November 11, 2002, this Court
extended the deadline to file objections as per the Rotech
Debtors' request to January 22, 2003.  While the claims
administration process is largely complete, there are still
disputed Claims that have not been resolved or litigated and the
Reorganized Rotech Debtors intend to complete a final review of
the claims register to determine if any additional objections
need to be filed.

Thus, the Reorganized Rotech Debtors seek the entry of an order
extending the Claims Objection Deadline in these chapter 11
cases for 90 days, through and including April 22, 2003.  The
Reorganized Rotech Debtors further request that the extension
proposed be without prejudice to their right to seek further
extensions of the Claims Objection Deadline.

Prior to and since the Effective Date, Mr. Brady states that the
Reorganized Rotech Debtors and their professionals have worked
diligently and closely in an effort to analyze each of the
14,000 proofs of claim and interest filed in these Chapter 11
cases.  The Reorganized Rotech Debtors have already filed 19
omnibus objections to Claims with respect to both the Rotech and
IHS debtors.  While the Reorganized Rotech Debtors included the
substantial majority of disputed Claims in the previously filed
objections, these objections are likely not exhaustive as to all
remaining objectionable Claims.

Mr. Brady points out that the Rotech Plan expressly provides
that this Court has the authority to extend the deadline by
which the Reorganized Rotech Debtors may object to Claims.  The
Reorganized Rotech Debtors have undertaken substantial efforts
to date in evaluating and objecting to most of the Claims filed
against them. However, many factors support the Reorganized
Rotech Debtors' request to extend the Claims Objection Deadline.

The Reorganized Rotech Debtors believe that a relatively small
number of the Claims filed against the estates still require a
filed objection but are currently under review.  The Reorganized
Rotech Debtors anticipate filing several additional objections
before the present Claims Objection Deadline but those
objections are not likely to place before the Court the entire
universe of objectionable Claims.

According to Mr. Brady, the Reorganized Rotech Debtors are
continuing to reconcile the claims register and the filed Claims
to the applicable debtor in these cases.  Given that these cases
were jointly administered under the lead debtor, many of the
Claims that were filed in these cases have been filed against
the lead debtor or a different debtor, but are actually Claims
against the Reorganized Rotech Debtors.  The Reorganized Rotech
Debtors submit that the reconciliation process is substantially
complete but believe that an extension of the Claims Objection
Deadline is proper out of an abundance of caution. (Integrated
Health Bankruptcy News, Issue No. 50; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   


KEY3MEDIA: S&P Drops Sr. Sec. Rating to D after Chap. 11 Filing
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its senior secured
debt rating on technology trade show organizer Key3Media Group
Inc., to 'D' following the company's pre-negotiated Chapter 11
bankruptcy reorganization filing. At the same time, this rating
was removed from CreditWatch. The bankruptcy filing will
eliminate most of the Los Angeles, California-based firm's $370
million in debt and all of its preferred and common stock.


KMART CORP: Pulls Plug on Supply Arrangement with Fleming Cos.
--------------------------------------------------------------
Kmart Corporation (Pink Sheets: KMRTQ) and Fleming Companies,
Inc., (NYSE: FLM) terminated their supply relationship by means
of a rejection of the parties' 2001 contract through Kmart's
Chapter 11 reorganization. The companies determined that the
continuation of the supply arrangement was not in either of
their best interests. Kmart and Fleming are continuing their
ongoing discussions regarding transition arrangements and
resolution of outstanding claims under the agreement.

Kmart President and Chief Executive Officer Julian Day said, "At
this critical juncture in our chapter 11 cases, as we move
forward with the plan confirmation process and, soon thereafter,
emergence from chapter 11 altogether, we have determined that
given the change in our store base, among other things, the
Fleming supply arrangement no longer meets our needs and the
rejection of the contract at this time is appropriate."

Fleming Chairman and Chief Executive Officer Mark Hansen said,
"Despite our mutual efforts to negotiate modifications to the
supply agreement, it was clear to both parties that termination
was the right solution. The basis on which the parties entered
into the agreement have substantially changed, warranting an end
to the relationship."

Kmart said that the termination of the Fleming relationship was
supported by the Plan Investors under the Company's proposed
Plan of Reorganization and that the action was permitted under
both the Company's DIP financing and exit financing facilities
as approved by the Bankruptcy Court on January 28, 2003. The
supply agreement would have otherwise expired in February 2011
and could not have been clearly terminated by Kmart without
cause until the first quarter of 2007.

Fleming said that the termination of the Kmart relationship is
consistent with its expectations announced last month. Fleming
intends to release its revised business implications after the
parties finalize a transition arrangement.

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

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

DebtTraders reports that Kmart Corp.'s 9.00% bonds due 2003
(KM03USR6) are trading at about 13 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=KM03USR6for  
real-time bond pricing.


KMART CORP: SEC Has Until April 29, 2003 to File Proofs of Claim
----------------------------------------------------------------
The U.S. Securities and Exchange Commission needs more time to
determine how large a claim, if any, it may file in Kmart
Corporation and its debtor-affiliates' cases.  In another
stipulation signed by Judge Sonderby, the SEC and the Debtors
agree to extend the bar date with respect to the SEC' claims to
April 29, 2003. (Kmart Bankruptcy News, Issue No. 46; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


LAIDLAW INC: Confirmation Hearing is Scheduled for February 24
--------------------------------------------------------------
Laidlaw Inc., is one step closer to emerging from bankruptcy.

On January 23, 2003, Judge Kaplan approved the Debtors' Third
Amended Disclosure Statement, overruling various objections
filed by Safety-Kleen Stockholders, Rollins Shareholders, and
Michael Haggerty.  The Court also scheduled a hearing on
February 27, 2003 to consider the confirmation of the Plan.  
Confirmation objections are due on or before February 24, 2003.

James D. Wareham, Esq., at Jones, Day, Reavis & Pogue, told
Bloomberg News that Laidlaw expects to emerge by March 31.

The Debtors' Third Amended Plan provides for the full payment of
Laidlaw's secured creditors and suppliers.  Bondholders and
other unsecured creditors will be given cash, new notes and
almost all of Laidlaw's new shares to divide among themselves in
exchange for Laidlaw's debts.  The existing shares will be
written off.

Free copies of Laidlaw's Third Amended Plan and Disclosure
Statement are available at:

      http://bankrupt.com/misc/3rdAmendedDisclStatement.pdf

          and

      http://bankrupt.com/misc/3rdAmendedPlan.pdf  

The Plan requires the U.S. Securities and Exchange Commission's
approval of Laidlaw's new shares for listing on the New York
Stock Exchange.  (Laidlaw Bankruptcy News, Issue No. 31;
Bankruptcy Creditors' Service, Inc., 609/392-0900)  


LERNOUT: Sues 7 Prepetition Professionals to Recover Transfers
--------------------------------------------------------------
Lernout & Hauspie Speech Products, Inc., represented by Kathleen
M. Miller, Esq., at Smith, Katzenstein & Furlow, LLP, seeks to
recover preferential transfers made to seven professionals and
firms within the 90-day period prior to the company filing for
bankruptcy:

           1)  KPMG Consultants                 $83,729.43
           2)  Goldman Sachs & Company        5,058,700.78
           3)  Morgan Stanley Dean Witter    16,421,111.11
           4)  Arthur Anderson                  540,000.00
           5)  VISA International               101,200.14
           6)  Hale & Dorr LLP                  744,217.83
           7)  Chase Mellon                      42,258.94

(L&H/Dictaphone Bankruptcy News, Issue No. 35; Bankruptcy
Creditors' Service, Inc., 609/392-0900)  


MERITAGE CORP: S&P Revises B+ Credit Rating Outlook to Positive
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on Meritage
Corp.'s $155 million of senior unsecured notes to 'B+' from 'B'.
At the same time, the corporate credit rating on Meritage is
affirmed and the outlook is revised to positive from stable.

The rating actions acknowledge Meritage's conservative financial
risk profile relative to the present ratings, as well as the
improved financial flexibility provided by the company's new
unsecured revolver. Management has demonstrated the ability and
willingness to finance a rapidly growing homebuilding business
in a manner that will preserve below average levels of debt and
very strong interest coverage measures. Furthermore, the
integration of acquired homebuilding companies appears to have
proceeded smoothly as evidenced by the maintenance of solid
margins and inventory turnover levels. However, these strengths
are tempered by Standard & Poor's assumption that Meritage will
continue to aggressively pursue acquisitions in familiar and
possibly unfamiliar markets, potentially challenging a lean
corporate infrastructure.

Scottsdale, Arizona-based Meritage is a mid-sized regional
homebuilder, with 4,574 home deliveries in 2002. The company has
been operating as a publicly traded homebuilder since Dec. 31,
1996, expanding on its Arizona divisions to include operations
in Texas, Northern California and, more recently, Las Vegas. The
company generally focuses on the first- and second-time move up
buyer, but also offers entry-level and semi-custom homes, with
the average home selling for $248,000 in 2002.

Over the past three years Meritage has been one of the nation's
fastest growing homebuilders. During that period total assets
have increased at a compound annual growth rate of approximately
61% while homebuilding revenues have similarly risen at an
annual pace of 43%, topping $1 billion for the first time in
2002. To date, the company has invested its capital effectively
as evidenced by a 24.3% return on permanent capital. This higher
level of profitability has been generated by consistently strong
homebuilding margins (presently 20%) and above average inventory
turnover (1.8x). With a lean corporate structure and relatively
narrow geographic focus, Meritage has been able to keep selling,
general, and administrative costs (9.6% of homebuilding
revenues) below those of other regional homebuilding peers.
Meritage purchases only entitled land and focuses on smaller
parcels that can be sold out within three years. This, along
with a comparatively aggressive use of options to control land,
contributes to the higher rate of inventory turnover. As of Dec.
31, 2002, the company controlled approximately (26,000) lots,
which equates to about a four- to five-year supply. Twenty
percent of these lots are directly owned, with the remaining 80%
controlled through options, which are secured by about $78
million in deposits. Roughly 20% of the lots that are controlled
by options are controlled through financial intermediaries. Lot
positions are generally well balanced among the various
divisions. The company has about $482 million in inventories on
its balance sheet, about 47% of which comprises homes in
progress. Model homes and speculative homes account for about
11% of total inventories.

                         Liquidity

Meritage has demonstrated the ability to access the unsecured
debt markets and a willingness to match additional debt issuance
with appropriate amounts of equity, leaving ample capacity to
meet near-term land acquisition needs. Since the rating was
initially assigned in May 2001, the company successfully issued
$165 million of senior unsecured notes. These notes fixed a good
portion of what had previously been an entirely floating-rate
debt structure and extended the weighted average maturity to
over five years. Importantly, the company issued additional
common equity, reducing leverage to a fairly conservative 40%
(for this rating level) of total capital on a book-value basis.
The carrying costs of this debt are presently covered by a
comfortable margin, with EBITDA covering interest by over 6x,
and debt to EBITDA hovering just less than 2.0x. In addition,
Standard & Poor's estimates that potential liquidation of
existing inventory would cover total debt by roughly 1.8x,
indicating that current inventories would have to be discounted
by 45% before materially jeopardizing repayment capacity.
Finally, the company recently obtained a $250 million unsecured
line of credit that will mature in 2005. This new line has a
borrowing base tied largely to inventory levels. With $110
million presently drawn on the facility, approximately $90
million is available based upon existing inventory levels.
Because this new facility replaced previously existing secured
credit agreements, Standard & Poor's no longer views a one-notch
distinction between the corporate credit rating and the senior
unsecured notes to be necessary.

                     Outlook: Positive

With improved flexibility, and a track record to date of
successfully integrating acquired companies, Meritage appears
well positioned to pursue further growth opportunities. An
improvement in the ratings would be warranted should Meritage
continue to profitably execute its growth strategy, while
maintaining a conservative financial profile. Implicit in
this outlook is the expectation that the company will
demonstrate that it has both the corporate level infrastructure
and division level management talent to manage a rapidly growing
and increasingly diversified business.   
   
              Rating Affirmed And Outlook Revised

                         Meritage Corp.

                                              Rating
                                        To               From
Corporate credit                     B+/Positive      B+/Stable
   
                         Rating Raised

                         Meritage Corp.

                                              Rating
                                        To               From
$155 mil. 9.75% sr unsecd nts due 2001  B+               B


METROCALL: Asks Court to Delay Final Decree Until September 29
--------------------------------------------------------------
Metrocall, Inc., and Metrocall Holdings, Inc., ask the U.S.
Bankruptcy Court for the District of Delaware to extend their
time to file final reports and delay automatic entry of a final
decree.

The Bankruptcy Code provides that after an estate is fully
administered, the court shall enter a final decree closing the
case.

As previously reported in the Troubled Company Reporter on
September 27, 2002, the Court confirmed Metrocall's Chapter 11
Plan.  Since confirmation of the Plan and the subsequent
Effective Date, the Debtors have devoted a substantial amount of
time to the review and reconcile approximately 4,300 claims
filed in these Chapter 11 Cases. The Debtors have made all
Initial Distributions required under the Plan, and substantially
all distributions required pursuant to the Plan, including cash
distributions on account of Convenience Class Claims, Allowed
Subsidiary General Unsecured Claims, Administrative Expense
Claims and Cure payments, a number of post-confirmation matters
remain to be addressed by the Reorganized Debtors and this
Court. These open items primarily involve the resolution of
remaining Disputed Claims which, until resolved, prohibit any
final distributions to be made from the reserves established in
accordance with the Plan.

Notwithstanding these efforts, the Debtors have not had
sufficient time to fully resolve all Disputed Claims and to make
final distributions under the Plan.  In addition to resolution
of Disputed Claims, either by 5 objection or through settlement,
there is currently a continued dispute with GECC pending before
the Court, scheduled to continue through April 15, 2003 and well
beyond the current deadline for closing these Chapter 11 Cases.

The Debtors must have sufficient opportunity to resolve the
outstanding Disputed Claims and any additional remaining
administrative matters, before they will be in a position to
file a final report and close these Chapter 11 Cases.

Thus, the Debtors seek until September 29, 2003, the automatic
entry of a final decree closing these cases.  The Debtors also
wish to extend the deadline by which they must file final
reports, until August 25, 2003.

Metrocall, Inc., is a nationwide provider of one-way and two-way
paging and advanced wireless data and messaging services. The
Company filed for chapter 11 protection on June 3, 2002 (Bankr.
Del. Case No. 02-11579).  Laura Davis Jones, Esq., at Pachulski
Stang Ziehl Young Jones & Weintraub, PC, represents the Debtors
in their restructuring efforts. When the Company filed for
protection from its creditors, it listed $189,297,000 in total
assets and $936,980,000 in total debts.


METROMEDIA INT'L: Taps CEA as Cable TV Asset Sale Representative
----------------------------------------------------------------
Metromedia International Group, Inc., (AMEX:MMG) the owner of
various interests in communications and media businesses in
Eastern Europe, the Commonwealth of Independent States and other
emerging markets, today announced the engagement of
Communications Equity Associates (CEA) as its exclusive
representative associated with the potential sale of the
Company's Cable TV and Radio station businesses.

In making the announcement, Carl Brazell, Chairman, President
and Chief Executive Officer of MMG, commented, "We feel that
CEA, which has 30 years experience and a significant presence in
both Europe and the US, is eminently qualified to provide the
necessary services and to assist us in maximizing the value of
these businesses."

Rick Michaels, Chairman and Chief Executive Officer of
Communications Equity Associates, commented, "We're pleased to
be selected by Metromedia International Group, Inc. for this
mandate. Metromedia's 11 cable TV networks with over 400,000
subscribers and 22 radio stations with revenues in excess of US$
15 million form a sizeable portfolio of assets with a
significant market position in 14 Central and Eastern European
countries. We are looking forward to handling this transaction
through our Munich office."

Metromedia International Group, Inc., is a global communications
and media company. Through its wholly owned subsidiaries and its
business ventures, the Company owns and operates communications
and media businesses in Eastern Europe, the Commonwealth of
Independent States and other emerging markets. These include a
variety of telephony businesses including cellular operators,
providers of local, long distance and international services
over fiber-optic and satellite-based networks, international
toll calling, fixed wireless local loop, wireless and wired
cable television networks and broadband networks and FM radio
stations.

                         *      *      *

As reported in Troubled Company Reporter's January 8, 2003
edition, the Company said it did not believe that it would be
able to fund its operating, investing and financing cash flows
during the next twelve months, without additional asset sales.
In addition, the Company would be required to make another semi-
annual interest payment of $11.1 million on March 30, 2003, on
its 10-1/2 % Senior Discount Notes. As a result, there is
substantial doubt about the Company's ability to continue as a
going concern.

The Company has consummated certain asset sales, continues to
explore possible asset sales to raise additional cash and has
been attempting to maximize cash repatriations by its business
ventures to the Company.

                    Noteholder Discussions

The Company has also held periodic discussions with
representatives of holders of its Senior Discount Notes in an
attempt to reach agreement on a restructuring of its
indebtedness in conjunction with any proposed asset sales or
restructuring alternatives. To date, the representatives of the
holders of its Senior Discount Notes and the Company have not
reached any agreement on terms of a restructuring.

The Company cannot make any assurance that it will be successful
in raising additional cash through asset sales or through cash
repatriations from its business ventures, nor can it make any
assurance regarding the successful restructuring of its
indebtedness.

If the Company were not able to resolve its liquidity issues,
the Company would have to resort to certain other measures,
including ultimately seeking bankruptcy protection.


MISSION RESOURCES: Fails to Comply with Nasdaq Listing Standards
----------------------------------------------------------------
Mission Resources Corporation (Nasdaq:MSSN) requested a hearing
before a Nasdaq Listing Qualifications Panel to appeal an
earlier Nasdaq Staff Determination to delist the Company's
common stock from The Nasdaq National Market.

Mission Resources received a Nasdaq Staff Determination on
Jan. 28, 2003, indicating that the Company had failed to comply
with Nasdaq's minimum bid price requirement of $1.00 per share
for continued listing of the Company's common stock on The
Nasdaq National Market as set forth in Nasdaq Marketplace Rule
4450(a)(5). As a result, the Company's common stock is subject
to delisting from The Nasdaq National Market at the opening of
business on Feb. 6, 2003. Following procedures set forth in the
Nasdaq Marketplace Rule 4800 Series, the Company has requested
an oral hearing before a Nasdaq Listing Qualifications Panel to
review the Nasdaq Staff Determination. While the date for the
hearing has not yet been established, hearings typically occur
within 45 days of a company's request. The hearing request will
stay the delisting of the Company's common stock, pending the
Panel's decision, allowing it to continue to trade on The Nasdaq
National Market under the symbol "MSSN." The Company intends to
present a comprehensive plan to the Nasdaq Listing
Qualifications Panel for achieving and sustaining compliance
with the Nasdaq Marketplace Rules, but there can be no assurance
that the Panel will grant the Company's request for continued
listing.

Mission Resources Corporation is a Houston-based independent
exploration and production company that acquires, develops and
produces crude oil and natural gas in the Permian Basin of West
Texas, along the Texas and Louisiana Gulf Coast and in the Gulf
of Mexico.

As reported in Troubled Company Reporter's November 15, 2002
edition, Standard & Poor's lowered its corporate credit rating
on Mission Resources Corp. to 'B' from 'B+', its subordinated
debt rating to 'CCC+' from 'B-', and its senior secured debt
rating to 'BB-' from 'BB' and removed the ratings from
CreditWatch, where they were placed with negative implications
on March 12, 2002. The outlook is negative. Houston, Texas-based
Mission, a small, independent oil and gas exploration and
production company, has about $232 million of debt outstanding.

"The ratings downgrade reflects Mission's burdensome debt
leverage with limited, near-term prospects for significant
deleveraging, an eroding financial profile, and a likely decline
in production through 2003, because of reduced capital spending
and asset sales completed during 2002," noted Standard & Poor's
credit analyst Steven K. Nocar.

The ratings on Mission reflect its participation in the
volatile, cyclical, and capital-intensive E&P segment of the
petroleum industry, with aggressive financial leverage, a small
reserve base, and high operating expenses.


MOBILE SERVICES: S&P Withdraws Ratings over Failure to Sell Debt
----------------------------------------------------------------  
Standard & Poor's Ratings Services withdrew its 'B+' corporate
credit rating and other ratings on Mobile Services Group Inc.

"The rating actions follow the company's unsuccessful attempt to
sell the debt securities that had been rated by Standard &
Poor's in July 2002." said Standard & Poor's credit analyst
Betsy Snyder. The company has no debt outstanding.

Burbank, California-based Mobile Services provides portable
storage solutions through the rental and sale of portable
storage containers, over-the-road trailers, and portable office
units in the U.S. and U.K.


NATIONAL CENTURY: Seeks First Extension of Exclusive Periods
------------------------------------------------------------
Charles M. Oellermann, Esq., at Jones, Day, Reavis & Pogue, in
Columbus, Ohio, relates that since these cases were filed,
National Century Financial Enterprises, Inc., and its debtor-
affiliates have worked vigorously to preserve their assets and
business in face of the financial crisis.  The Debtors have
devoted particular effort to stabilizing and maintaining their
accounts receivable servicing and collection business,
notwithstanding a significantly reduced workforce, and
protecting the value of the Debtors' claims against their
provider customers.  Hence, the Debtors have successfully
negotiated, documented and obtained Court approval of a number
of transactions under which the providers have agreed to buy out
or pay in full their obligations under the Debtors' financing
programs.  In other instances, the Debtors have negotiated or
litigated with providers in their bankruptcies, in the Debtors'
role as a major creditor in those bankruptcies.

Mr. Oellermann notes that pursuant to Section 1121(d) of the
Bankruptcy Code, a debtor has the exclusive right to file a plan
during the first 120 days after the commencement of a Chapter 11
case.  If a debtor files a plan during this exclusive filing
period, Section 1121(c)(3) of the Bankruptcy Code grants the
debtor an additional 60 days during which the debtor may solicit
acceptances of that plan, and no other party-in-interest may
file a competing plan.

The current deadline for Debtors to:

    -- file a plan is on March 18, 2003, and

    -- solicit acceptances of that plan is on May 17, 2003.

According to Mr. Oellermann, the Debtors have made substantial
progress in executing an orderly plan of business winddown and
asset preservation.  Given this progress, and the substantial
remaining items that must be completed before a plan may be
formulated in these cases, the Debtors need an extension of
their exclusive periods.

By this motion, the Debtors ask the Court to:

  (a) extend the period during which they have the exclusive
      right to file a plan to July 16, 2003; and

  (b) extend the period during which they have the exclusive
      right to solicit acceptances of that plan to September 16,
      2003.

Mr. Oellermann points out that the governing statute and case
law make plain that, in large and complex Chapter 11 cases like
National Century, exclusivity should be extended where the
debtor has made, and is continuing to make, progress toward a
plan.

Mr. Oellermann reports that the Debtors have devoted the thrust
of their efforts during the initial phase of these Chapter 11
cases to:

  (a) stabilizing their remaining business operations;

  (b) selling those assets that are no longer necessary to their
      operations;

  (c) preserving the value of their claims against their
      provider clients, either by negotiating buyouts or
      protecting these estates' interests in the provider
      bankruptcies that are pending;

  (d) negotiating and obtaining interim Court approval of the
      terms of access to cash collateral to fund these cases;
      and

  (e) restoring credibility and a functioning working
      relationship with their major creditor constituencies.

More specifically, the Debtors have engaged in, among others:

  (1) obtaining "first day" relief from the Court to facilitate
      their transition into Chapter 11;

  (2) obtaining approval of their employment of A&M to provide
      crisis management services;

  (3) completing and filing their schedules of assets and
      liabilities and statements of financial affairs;

  (4) negotiating and obtaining interim Court approval of the
      terms of access to cash collateral to fund their
      operations during these cases;

  (5) responding to the numerous bankruptcies filed by the
      Debtors' provider clients, including the negotiation of or
      litigation regarding cash collateral orders in the
      providers' cases and obtaining relief from the automatic
      stay in the Debtors' Chapter 11 cases to implement the
      cash collateral orders;

  (6) negotiating and documenting cash buyouts with certain
      provider clients to terminate the business relationship
      with those entities;

  (7) responding to numerous formal and informal requests for
      relief from the automatic stay brought by providers and
      other creditors;

  (8) responding to motions to dismiss the Chapter 11 cases of
      NPF VI and NPF XI and conducting related discovery;

  (9) participating in litigation relating to the "true sale"
      nature of the purchase of the providers' accounts
      receivable by the Debtors;

(10) obtaining access to their headquarters and resuming their
      business operations after the November 16, 2002 seizure of
      books and records by the Federal Bureau of Investigation;

(11) cooperating with the FBI and the Securities and Exchange
      Commission in their ongoing investigations of the Debtors'
      Business activities prior to the Petition Date; and

(12) negotiating the sale of certain of the Debtors' excess
      real estate properties and retaining a real estate broker
      to assist in selling their real estate assets.

Mr. Oellermann relates the Debtors have not been able to assess
fully the extent and value of their assets, including claims
against third parties, that will be available to satisfy the
creditors' claims.  Mr. Oellermann informs the Court that the
Debtors intend in the next 120 days to proceed along three
fronts, in close consultation with their creditor
constituencies:

  -- The Debtors will continue the controlled winddown of their
     operations, taking appropriate steps to preserve and
     maximize the value of their assets by, among other things,
     collecting purchased accounts receivable and selling
     unnecessary assets.  As part of this process, the Debtors
     will continue to evaluate their operations and take steps
     to retain those employees necessary to accomplish the
     remaining tasks of the business winddown, while eliminating
     those positions that are no longer needed;

  -- The Debtors will continue to devote effort to maximizing
     these estates' recoveries on the Debtors' claims against
     their provider clients, including those that have filed for
     bankruptcy and those that have not.  The Debtors intend to
     continue to negotiate cash buyout transactions with as many
     non-bankrupt providers as possible.  The Debtors intend to
     assert vigorously their rights as creditors in providers'
     bankruptcies and, where appropriate, to negotiate
     consensual arrangements regarding the use of cash
     collateral, replacement financing or the treatment of the
     Debtors' claims; and

  -- The Debtors intend to put in place and commence an agreed
     process for investigating the Debtors' business activities
     prior to the Petition Date and the other matters that may
     have given rise to the Debtors' current financial
     circumstances.  The Debtors currently are engaged in active
     discussions with their major creditor constituencies
     regarding the appropriate approach to this investigatory
     process.

Mr. Oellermann contends that cause exists to extend the Debtors'
exclusive periods because:

A. The Requested Extension of the Exclusive Periods Is Justified
   By the Size and Complexity of the Debtors' Chapter 11 Cases

   Mr. Oellermann notes that both Congress and the courts have
   recognized that the size and complexity of a debtor's case
   alone may constitute cause for the extension of a debtor's
   exclusive periods.  These jointly administered Chapter 11
   cases, Mr. Oellermann asserts, are among the largest ever
   filed in the Ohio Court and among the larger cases currently
   pending in the country.

   Prior to the Petition Date, the Debtors were one of the
   largest purchasers of the healthcare accounts receivable in
   the United States.  Particularly in the light of the
   allegations and investigations regarding the Debtors'
   prepetition financial dealings and the large number of
   bankruptcies filed by the Debtors' provider clients, these
   cases pose difficult practical and legal issues.

   Given the size of these cases and the number of complex
   issues that must be addressed, it is unlikely that any party-
   in-interest will be in a position to complete the plan
   process prior to the requested extension of the Exclusive
   Periods, let alone prior to the currently scheduled
   expiration of the Exclusive Filing Period on March 18, 2003.

   Under these circumstances, Mr. Oellermann maintains, the size
   and complexity of the Debtors' Chapter 11 cases compel the
   requested extension of the Exclusive Periods for four months.
   The requested extension falls far short of the exclusivity
   extensions granted by this and other courts in large,
   complex, reorganization cases comparable to the Debtors'
   Chapter 11 cases.

B. The Debtors' Progress in These Cases Warrants an Extension of
   the Exclusive Periods

   An extension of the Debtors' exclusive period also is
   justified by the progress in the resolution of issues facing
   the Debtors' creditors and estates.  Mr. Oellermann
   reiterates that in the first two months of these Chapter 11
   cases, the Debtors have made substantial progress in
   stabilizing and winding down their business operations,
   obtaining access to cash collateral, filing their schedules
   of assets and liabilities and statement of financial affairs,
   selling excess assets and numerous other tasks necessary for
   the process of these cases.  This progress warrants the
   requested extension of the Exclusive Periods.

C. The Requested Extension of the Exclusive Periods Will Not
   Harm the Debtors' Creditors or Other Parties-In-Interest.

   Accordingly, the requested extension will not result in a
   delay of the plan process.  To the contrary, the requested
   extension will permit the plan process to move forward in an
   orderly fashion. (National Century Bankruptcy News, Issue No.
   7; Bankruptcy Creditors' Service, Inc., 609/392-0900)


NAVIGATOR GAS: Creditors' Meeting Convenes Tomorrow
---------------------------------------------------
Carolyn S. Schwartz, the United States Trustee for Region II,
will convene a meeting of Navigator Gas Transport PLC's
creditors tomorrow -- February 6, 2003 -- at 1:00 p.m. in the  
Office of the United States Trustee, 80 Broad Street, Second
Floor, New York, New York.  This is the first meeting of
creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy
cases.

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

Navigator Gas Transport PLC's business consists of the transport
by sea of liquefied petroleum gases and petrochemical gases
between ports throughout the world. The Company filed for
chapter 11 protection on January 27, 2003 at the U.S. Bankruptcy
Court for the Southern District of New York (Bankr. S.D.N.Y.
Case No. 03-10471).  Adam L. Shiff, Esq., at Kasowitz, Benson,
Torres & Friedman LLP, represents the Debtors in their
restructuring efforts.  When the Company filed for protection
from its creditors, it listed $197,243,082 in assets and
$384,314,744 in liabilities.


NETZEE INC: Will Make Liquidating Distribution This Week
--------------------------------------------------------
Netzee, Inc., announced that on or about February 7, 2003, it
will make a liquidating distribution of $0.50 per share to
record holders of Netzee common stock as of the close of
business on February 6, 2003. As previously announced, this will
be the only distribution made to record holders of Netzee common
stock, and will be in complete liquidation of all shares of
Netzee common stock outstanding.

Promptly after this liquidating distribution is made, Netzee
will cause its stock transfer books to be closed and no further
transfers of Netzee common stock will be recorded.


NEWCOR INC: Successfully Emerges from Chapter 11 Proceeding
-----------------------------------------------------------
EXX INC (Amex: EXX-A, EXX-B) announced that the Plan of
Reorganization of its subsidiary, Newcor, Inc., became effective
on January 31, 2003.

As part of the plan, EXX paid $5,938,500 to purchase 98.975% of
the new shares of common stock of Newcor Inc., pursuant to a
rights offering to shareholders which was part of Newcor's plan
of reorganization. As a result of EXX's purchase of Newcor's
stock, Newcor ceased to be a stand-alone public reporting
company and became a subsidiary of EXX. Newcor initially filed a
petition under Chapter 11 of the United States Code in the
United States Bankruptcy Court in the District of Delaware on
February 25, 2002.

Under the plan, Newcor's unsecured creditors also received an
aggregate principal amount of $28,000,000 in new notes and
$20,000,000 in cash, $6,000,000 of which was funded by the
rights offering.

EXX, through its subsidiaries, designs, produces and sells
electric motors geared toward the original equipment market and
designs, produces and sells cable pressurization equipment for
the telecommunications industry. It also designs, produces and
sells "impulse" toys and kites. Newcor, now a subsidiary of EXX,
is headquartered in Royal Oak, Michigan and designs and
manufactures precision-machined parts, molded rubber and plastic
products, as well as custom machines and manufacturing systems.


OWENS CORNING: Proposes Uniform Property Damage Claim Procedures
----------------------------------------------------------------
Owens Corning and its debtor-affiliates propose that the Court
implement case management order requiring each property damage
claimant to produce the relevant evidence to establish a prima
facie case against Owens Corning and Fibreboard.  This will
enable the Debtors to evaluate any limitations defenses and to
determine the value of any valid claims.

J. Kate Stickles, Esq., at Saul Ewing LLP, in Wilmington,
Delaware, informs the Court that the establishment of the Bar
Date at April 15, 2002 through a Court Order attracted claims
and claim values far in excess of the Debtors' historical
experience. In all, 593 asbestos property damage proofs of claim
were filed against the Debtors asserting claims in excess of
$738,000,000. Of those claims, 314 claimants asserted claims
against Owens Corning for more than $727,000,000; and 276
claimants asserted claims against Fibreboard for more than
$11,000,000.  All but one of these claims are unliquidated,
contingent claims that the Debtors dispute.

Ms. Stickles is concerned that the claimed value of
$738,000,000, while greatly out of proportion to the Debtors
historical experience, is apparently only the start.  That is
the case because it corresponds to only 92 of the 593 claims,
while 501 proofs of claims failed to indicate a claim amount.  
In addition, the asbestos property damage claimants provided
virtually no documentation to support their claims.  69
claimants provided no supporting documentation whatsoever.  The
other claimants merely promised to provide supporting
information in the future, but have yet to do so.

Ms. Stickles notes that 372 claimants provided the same one page
statement asserting that "the supporting documentation is not
available at this time but is being located by and obtained from
the creditor . . . the supporting documentation will be
supplemented as soon as possible."  Another 99 claimants
provided an almost identical two page addendum stating that
"[s]upporting documentation will be provided as claims are
estimated and liquidated."   To date, none of these claimants
has provided a single piece of supporting information.

The Debtors are unable to assess the validity of any property
damage claim without basic supporting information demonstrating:

    A. that the claimant had the Debtors' asbestos-containing
       products in its buildings;

    B. that the claim is not barred by an applicable statute of
       limitations or statute of repose; and

    C. the amount of damages allegedly suffered by the claimant.

Ms. Stickles asserts that the Debtors are unable to meaningfully
value or evaluate any of these claims on the current record.
Given the Debtors' historical experience with asbestos property
damage claims, the Debtors submit that it is not in the best
interest of their estates, their creditors or other parties-in-
interest to file substantive objections and initiate litigation
against these remaining 524 asbestos property damage claimants.

Specifically, the Debtors request entry of an order requiring
each Asbestos Property Damage Claimant to submit to the Debtors,
by no later than April 15, 2003, these supporting evidence of
their claim against Owens Corning and Fibreboard:

    A. the name and address of each building alleged to contain
       asbestos-containing products manufactured or sold by the
       Debtors for which a property damage claim is asserted;
       and

    B. for each building or discrete location:

       1. the type of asbestos containing product for which a
          property damage claim is asserted;

       2. the basis, including all supporting documentation and
          test results, on which the asbestos property damage
          claimant has identified the asbestos-containing
          product:

          a. as a product manufactured or sold by the Debtors;

          b. as a product that contains asbestos;

          c. for each the building or discrete location,
             information demonstrating when the claimant became
             aware of its claim for asbestos property damage,
             including information relating to when the Debtors'
             asbestos-containing products were installed, and
             when the Debtors' asbestos-containing products were
             removed or if they have not been removed, when the
             claimant determined it was necessary to remove
             them; and

          d. the amount of damages claimed for each the building
             or location and the basis for the calculation.

The Supporting Evidence should be provided separately for Owens
Corning and Fibreboard, depending on the particular Debtor named
in each claim.  The Debtors also request that the Court direct
that all Supporting Evidence be served on counsel to the
Debtors, Debevoise & Plimpton, 919 Third Avenue, New York, New
York 10022 (Attn: Mary Beth Hogan); and that each claimant file
an appropriate Certificate of Service with the United States
Bankruptcy Court for the District of Delaware, 824 Market
Street, Wilmington, Delaware 19801 demonstrating service on the
Debtors of the Supporting Evidence in accordance with the case
management order.

The Debtors further request that the Court order that any
property damage claim for which the Supporting Evidence is not
provided in compliance with the terms of the Case Management
Order be disallowed in its entirety and the asbestos property
damage claimant be forever barred from asserting the property
damage claim against the Debtors, their estates or property or
any trust established through these bankruptcy cases.  In
addition, that each property damage claim be limited solely to
the buildings for which the Supporting Evidence is provided and
be disallowed with respect to all other buildings included in
the Property Damage claim.

The Debtors submit that the proposed order is necessary and
reasonable to enable the Debtors to evaluate the property damage
claims and determine their treatment under a plan of
reorganization.  Without the order, Ms. Stickles fears that the
Debtors would be compelled to file substantive objections to
each of the property damage claims, initiate over 500 contested
matters, and engage in individual discovery on a claim-by-claim
basis.  These efforts would surely delay the bankruptcy cases,
distract the Debtors from their ongoing efforts to negotiate and
confirm a plan of reorganization, and waste estate assets.

Moreover, Ms. Stickles believes that the proposed Order will
provide an orderly and equitable procedure to enable the
claimants to provide support for their claim and for the Debtors
to analyze the claims and determine the most fair and efficient
manner to resolve these claims, whether it be by estimation or
by litigation.  The proposed Order requires the asbestos
property damage claimants to provide only the minimum amount of
information that will enable the Debtors to evaluate their
claims.  The proposed Order also allows the claimant at least
one year from the date of filing their claim to provide this
basic information in support of their claim -- information which
the majority of claimants indicated in riders to their proofs of
claim would be provided.  The Debtors submit that the proposed
case management order is in the best interests of their estates,
their creditors, and other parties-in-interest and provides a
fair and efficient manner to resolve hundreds of claims
asserting hundreds of millions of dollars. (Owens Corning
Bankruptcy News, Issue No. 45; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


PACIFIC GAS: Hires Century 21 Alliance as Real Estate Broker
------------------------------------------------------------
In December 2001, Pacific Gas and Electric Company employed 11
real estate appraisers and 15 brokers in the ordinary course of
business.  PG&E requires real estate appraisers and brokers to
facilitate lease, purchase, and sale transactions and to give
advice on real estate strategy and planning.  Now, PG&E needs
another broker for purposes of an exclusive listing to sell
property on its behalf.  To this end, PG&E chose Century 21
Alliance.

Century 21 is well experienced in providing brokerage services.
Its experience includes 25 years of working in the field of real
estate, handling land, commercial, retail, and residential
building sales, and leasing transactions.  From a single person
office, Century 21 has grown into a sales force of 130 qualified
licensed sales associates and a 21-member management team.
Century 21's agents close over 1,800 transactions of all types
of real estate every year.  Thus, Century 21 is very much
qualified to provide real estate brokerage services for PG&E.

In accordance with the Court order approving the employment of
real estate appraisers and brokers dated December 6, 2001, PG&E
seeks Judge Montali authority to employ Century 21.

PG&E also proposes to give Century 21 broker commissions to
compensate for its services:

    * 10% of the sale price for rural property with a value of
      $50,000 or less; and

    * 6% of the sale price for all other property.

Patricia A. Provost, owner of Century 21, tells the Court that
the firm:

  -- has not previously performed real estate services for PG&E
     and, therefore, does not hold claim against it;

  -- does not hold or represent any interest adverse to PG&E's
     estate.  Century 21 does not have any connection with PG&E,
     its creditors, or any other interested parties, or their
     attorneys or accountants, or the U.S. Trustee, or any
     person employed by the U.S. Trustee;

  -- as well as its employees, are or never were an equity
     security holder, insider, director, officer, or employee of
     PG&E, or an investment banker for any security of PG&E;

  -- is a "disinterested" person under Section 101(14) of the
     Bankruptcy Code;

  -- has no agreement with any other person or entity other than
     PG&E to share any compensation received in connection with
     its employment; and

  -- acknowledges and understands that it cannot act as a dual
     agent for any buyer and PG&E, as the seller, in a
     transaction unless prior approval from the Court is
     obtained. (Pacific Gas Bankruptcy News, Issue No. 52;
     Bankruptcy Creditors' Service, Inc., 609/392-0900)    


PENINSULA GAMING: S&P Revises Outlook on Low-B Rating to Stable
---------------------------------------------------------------
Standard & Poor's Rating Services revised its outlook for
Peninsula Gaming Co., LLC to stable from negative.

In addition, Standard & Poor's affirmed its 'B' corporate credit
rating on the Dubuque, Iowa-based company. Total debt
outstanding at September 30, 2002, was approximately $107
million, inclusive of approximately $20 million associated with
PGC's unrestricted subsidiary debt at The Old Evangeline Downs
LLC.

"The outlook revision reflects steady operating results during
the last few years at the company's Diamond Jo riverboat casino
and the expectation that this trend will continue as the Ice
Harbor (where Diamond Jo operates) redevelopment project
attracts additional visitors to the area," said Standard &
Poor's credit analyst Peggy Hwan. She added, "The recent
purchase of the OED racetrack is expected to provide an
additional source of cash flow in the form of a management fee."

Diamond Jo's operating performance has been relatively stable in
the past few years because it captures more than 50% of the
Dubuque market's gaming revenues. Benefiting from its good
location, improved gaming mix, and refined marketing programs,
it outperforms its lone competitor, the Dubuque Greyhound Park.
In addition, with no new competition permitted, operating
results are expected to continue to steadily improve.

Ice Harbor is currently undergoing a major redevelopment
project. In December 2002, a third party private investor
completed the construction and development of the Grand Harbor
Resort Hotel and Waterpark for $26 million, which includes 194
rooms and 31 suites. In 2003, the city government plans to spend
an additional $162 million to construct the Mississippi River
Discovery Center, River Walk, and Conference Center. Standard &
Poor's expects that these development projects will attract
additional customer traffic to the Diamond Jo riverboat casino.  

The acquisition of the OED racetrack diversifies the company's
cash flow base, and similar to the Diamond Jo, the racetrack
possesses limited direct competition. PGC is planning on
developing and constructing a new casino and contiguous
racetrack (racino) in Opelousas, Louisiana, which is expected to
include approximately 1,600 slot machines. Despite OED being
designated as an unrestricted subsidiary, PGC will receive a
management fee based on revenues and EBITDA, subject to covenant
restrictions. Through its ownership of OED, PGC should benefit
from positive cash flow due to the predictable and high-margin
nature of slot machine operations.


PENTON MEDIA: Expects to Fall Short of Fourth Quarter Guidance
--------------------------------------------------------------
Penton Media, Inc. (NYSE:PME), a diversified business-to-
business media company, announced that its fourth-quarter 2002
revenue and adjusted EBITDA results will fall short of earlier
guidance. Continuing weakness of Penton's technology and
manufacturing properties as well as generally weak advertising
results in December caused the shortfall to earlier guidance.

In its guidance of November 1, 2002, Penton stated that fourth-
quarter revenues would decline at a rate similar to the
Company's third-quarter 2002 year-on-year revenue decline of
approximately 21%. Penton also estimated that adjusted EBITDA
would be modestly below fourth-quarter 2001 adjusted EBITDA of
$11.5 million. However, revenues in the fourth quarter declined
by more than 25% from the fourth quarter of 2001, and adjusted
EBITDA will be approximately half of fourth-quarter 2001
adjusted EBITDA.

"Visibility for a business recovery in the near term continues
to be elusive as customers remain cautious about the future
direction of the economy and concerned about the threats of
war," said Thomas L. Kemp, chairman and chief executive officer.
"Penton's technology and manufacturing products continued to
struggle in the fourth quarter, reflecting the depressed
conditions that persist in these markets."

As a result of its softer-than-expected performance in the
fourth quarter, Penton drew $6.0 million against its revolving
credit facility in December to accommodate working capital needs
and interest obligations on its bonds.

During the fourth quarter, the Company also completed the sale
of non-strategic assets, including the A/E/C SYSTEMS and
Computers for Construction trade shows; Boardwatch magazine and
its related Web site and directory; the ISPCON/Service Provider
trade shows; Streaming Media trade shows and related Web site;
and assets of Penton Media Australia (primarily magazines
serving the IT market). The Company also closed the sale of
Professional Trade Shows (regional manufacturing events) on
January 24. Proceeds from the sales totaled less than $5 million
as a result of difficult conditions in the business-to-business
media mergers and acquisitions market. Furthermore, last week
the Company received its 2002 tax refund of $52.7 million, which
reflects the full benefit of its net tax loss carryback capacity
for 2002.

Penton expects to provide the date of its fourth-quarter
earnings release and information on its investor conference call
in the near future. The Company is observing a quiet period, and
will not be providing any additional information beyond the
contents of today's announcement until it issues fourth-quarter
earnings.

Penton Media is a diversified business-to-business media company
that produces market-focused magazines, trade shows and
conferences, and a broad offering of online media products.
Penton's integrated media portfolio serves the following
industries: Internet/broadband; information technology;
electronics; natural products; food/retail; manufacturing;
design/engineering; supply chain; aviation;
government/compliance; mechanical systems/construction; and
leisure/hospitality.

                          *    *    *

As previously reported in Troubled Company Reporter, Standard &
Poor's revised its outlook on business-to-business media company
Penton Media Inc., to negative from developing due to additional
concerns about the company's profitability in light of continued
revenue declines and the operating difficulties of key end
markets. Standard & Poor's also affirmed its existing ratings on
Penton, including its single-B-minus corporate credit rating.

                        Outlook

Ratings could be lowered if Penton fails to maintain adequate
liquidity to fund its operations during this difficult operating
environment.

Ratings List:                            To:             From:

Penton Media Inc.

* Corporate credit rating          B-/Negative/--      B-/Dev/--
* Senior secured debt rating              B-
* Subordinated debt rating               CCC


PETROLEUM GEO-SERVICES: Fitch Affirms C Senior Unsecured Rating
---------------------------------------------------------------
Fitch Ratings has affirmed Petroleum Geo-Services ASA senior
unsecured debt rating at 'C'. The ratings remain on Rating Watch
Negative. This affirmation follows the payment by PGO of
interest related to PGO's 6-5/8% senior notes due 2008 and its
7-1/8% senior notes due 2028. PGO finds itself in the same
situation it was in last month as it has utilized a 30-day grace
period to make an $8.2 million interest payment on its 8.15%
senior notes due 2029. This grace period expires Feb. 15, 2003.

Failure to make such payment within the 30-day grace period will
be considered to be an event of default, and the rating will be
lowered to 'D'. Should the coupon payment default be cured in
the grace period, a new rating will be assigned, but reflective
of the just cured default.

PGO is a technologically focused oilfield service company
principally involved in two businesses: geophysical seismic
services and production services. PGO acquires, processes,
manages and markets 3D, time-lapse and multicomponent seismic
data. This data is used by oil and gas companies in exploration
for new reserves, development of existing reservoirs and
management of producing oil and gas fields. In its production
services business PGO owns and operates four FPSOs and operates
numerous offshore production facilities for oil and gas
companies to produce from offshore fields more cost effectively.


PHAR-MOR: Follows Marsico to McGuireWoods as Litigation Counsel
---------------------------------------------------------------
Phar-Mor, Inc., and its debtor-affiliates ask for authority from
the U.S. Bankruptcy Court for the Northern District of Ohio to
retain and employ McGuireWoods LLP as their Special Litigation
Counsel.

The Debtors McGuireWoods' employment to be effective as of
April 19, 2002, the date on which Leonard J. Marsico, Esq., left
the employ of DKW Law Group, PC and joined McGuireWoods.

The Debtors the Court that they need to continue to employ Mr.
Marsico in connection with certain real estate lease disputes
and lawsuits that were pending in the Court of Common Pleas of
Allegheny County, Pennsylvania, and in the Court of Common Pleas
of Westmoreland County, Pennsylvania, prior to the Petition
Date.

The Lease Litigation involves the interpretation and
enforceability of three similar lease provisions.  In the
Allegheny County actions, Phar-Mor filed two declaratory
judgment actions and opposing parties Giant Eagle, Inc., 35th
Strouss Associates, Deer Leasing Company and New Ken Associates
also filed three separate actions.  All of these actions were
ultimately consolidated.  In the Westmoreland County action,
plaintiff Gary W. Wheatley filed an action against Phar-Mor and
M&J Partners, L.P.

Since April of 2002, McGuireWoods has represented the Debtors in
litigation and bankruptcy matters.  In addition, Mr. Marsico, a
partner at McGuireWoods, has represented Phar-Mor in litigation
and bankruptcy matters since March of 2000.  Thus, Mr. Marsico
and McGuireWoods are uniquely familiar with the issues involved
in the Lease Litigation and more generally familiar with
Phar-Mor's business and personnel.

The professional services that McGuireWoods will render to the
Debtors will include litigation services in connection with the
Lease Litigation, continuing through final judgment or
settlement of the litigation.

The present billing rates of professionals who most likely will
work on the matter are:

          Leonard J. Marsico          $350 per hour
          Gerald J. Stubenhofer, Jr.  $210 per hour
          David J. Swan               $210 per hour
          Christopher J. Hess         $200 per hour
          Tammy L. Ribar              $170 per hour
          Anne G. Muhl                $105 per hour

Phar-Mor, Inc., a retail drug store chain, filed for Chapter 11
protection on September 24, 2001, (Bankr. N.D. Ohio Case No.
01-44007).  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.  Phar-Mor's Plan to return
roughly 18 cents-on-the-dollar to unsecured creditors is slated
for review at a March 11, 2003, Confirmation Hearing before
Judge Bodoh.


RECIPROCAL OF AMERICA: Ratings Revised to R After Receivership
--------------------------------------------------------------
Standard and Poor's Ratings Services revised its counterparty
credit and financial strength ratings on Reciprocal of America
to 'R' from 'Bpi' after The State Corporation Commission of
Virginia was named as receiver of ROA by the circuit court of
the City of Richmond.

After an examination, ROA and its attorney-in-fact--The
Reciprocal Group--were found to be in hazardous financial
condition. ROA recently experienced financial difficulties
because of poor claims experience and the inability of its
Bermuda-based reinsurer, First Virginia Reinsurance Ltd., to
honor its reinsurance obligations.

ROA is a reciprocal insurance company that provides workers'
compensation and other liability coverages for health systems,
hospitals, health professionals, managed care organizations, and
other health care providers. Based in Richmond, Va., the company
is licensed in 42 states and operates in 18 states and the
District of Columbia. In 2001, the company assumed the assets
and liabilities of Coastal Insurance Enterprise, Coastal
Insurance Exchange, and Alabama Hospital Association and
Healthcare Workers' Compensation Trust Fund.

"On Nov. 21, 2002, Standard & Poor's lowered its counterparty
credit and financial strength ratings on ROA to 'Bpi' from
'BBBpi' based on deteriorating operating performance and
profitability and weak surplus," noted Standard & Poor's credit
analyst Darryl Brooks.

An insurer rated "R" is under regulatory supervision owing to
its financial condition. During the pendency of the regulatory
supervision, the regulators may have the power to favor one
class of obligations over others or pa some obligations and not
others. The rating does not apply to insurers subject only to
nonfinancial actions such as market conduct violations.


REGUS BUSINESS: Turns to FTI Consulting for Financial Advice
------------------------------------------------------------
Regus Business Center Corp., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Southern District of New York for
permission to retain FTI Consulting as their Financial Advisors.

FTI is expected to provide the Debtors with:

     a) Assistance to the Debtors in the preparation of
        financial related disclosures required by the Court,
        including the Schedules of Assets and Liabilities, the
        Statement of Financial Affairs and Monthly Operating
        Reports;

     b) Assistance to the Debtors with information and analyses
        required pursuant to the Debtors' Debtor-In-Possession
        financing including, but not limited to, preparation for
        hearings regarding the use of cash collateral and DIP
        financing;

     c) Assistance with the identification and implementation of
        short-term cash management procedures;

     d) Advisory assistance in connection with the development
        and implementation of key employee retention and other
        critical employee benefit programs;

     e) Assistance and advice to the Debtors with respect to the
        identification of core business assets and the
        disposition of assets or liquidation of unprofitable
        operations;

     f) Assistance with the identification of executory
        contracts and leases and performance of cost/benefit
        evaluations with respect to the affirmation or rejection
        of each;

     g) Assistance regarding the valuation of the present level
        of operations and identification of areas of potential
        cost savings, including overhead and operating expense
        reductions and efficiency improvements;

     h) Assistance in the preparation of financial information
        for distribution to creditors and others, including, but
        not limited to, cash flow projections and budgets, cash
        receipts and disbursement analysis, analysis of various
        asset and liability accounts, and analysis of proposed
        transactions for which Court approval is sought;

     i) Attendance at meetings and assistance in discussions
        with potential investors, banks and other secured
        lenders, the Creditors' Committee appointed in these
        Chapter 11 Cases, the U.S. Trustee, other parties in
        interest and professionals hired by the same, as
        requested;

     j) Analysis of creditor claims by type, entity and
        individual claim, including assistance with development
        of a database to track such claims;

     k) Assistance in the preparation of information and
        analysis necessary for the confirmation of a Plan of
        Reorganization in these Chapter 11 Cases;

     l) Assistance in the evaluation and analysis of avoidance
        actions, including fraudulent conveyances and
        preferential transfers;

     m) Litigation advisory services with respect to accounting
        and tax matters, along with expert witness testimony on
        case related issues as required by the Debtors;

     n) an extranet site for internal use by the Debtors,
        counsel to the Debtors, FTI and any other
        parties or professionals designated by the Debtors.  The      
        extranet site will allow for the Debtors, FTI and other
        individuals designated at a later date to share
        communication, key documents, and establish deadlines,
        tasks, responsibilities and post news in a secure
        environment; and

     n) other general business consulting services or
        other assistance as Debtors' management or counsel may      
        deem necessary that are consistent with the role of a
        financial advisor and not duplicative of services
        provided by other professionals in this proceeding.

The current customary hourly rates charged by FTI personnel
assigned to this case are:

          Senior Managing Director            $525-595 per hour
          Directors / Managing Directors      $370-525 per hour
          Consultants                         $290-345 per hour
          Associates                          $175-265 per hour
          Administration / Paraprofessionals  $ 85-150 per hour

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

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


REPTRON: S&P Drops Corporate Credit & Sub. Note Ratings to D
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Reptron Electronics Inc. to 'D' from 'B-' and its
subordinated note rating to 'D' from 'CCC'. The company did not
make the semiannual interest payment due on Feb. 1, 2003, on its
6 3/4% convertible bonds. Reptron is in default of its loan and
security agreement with secured lenders, as operating results
did not meet certain financial covenants for 2002.

Tampa, Florida-based Reptron has total debt of about $120
million.

Sales and profitability were severely depressed in 2002 due to
challenging business conditions in both of Reptron's major
business lines, electronics components distribution, and
electronics manufacturing services.


RESOURCE AMERICA: Board Approves Payment of Cash Dividend
---------------------------------------------------------
Resource America Inc., (NASDAQ:REXI) announced that its Board of
Directors has authorized the payment of a cash dividend on
February 28, 2003 in the amount of three and one-third cents per
share of the Company's common stock to all holders of record at
the close of business on February 14, 2003.

This dividend payment will make the 31st consecutive quarter
that the Company has paid a cash dividend to its stockholders.

The Company currently has approximately 17.2 million shares of
common stock outstanding.

Resource America Inc., is a proprietary asset management company
that uses industry specific expertise to generate and administer
investment opportunities for its own account and for outside
investors in the energy, real estate and equipment leasing
industries.

For more information please visit the Company's Web site at
http://www.resourceamerica.com

As reported in Troubled Company Reporter's November 28, 2002
edition, Standard & Poor's lowered its rating on Resource
America Inc.'s 12% senior notes due 2004 to 'B-' from 'B'
following a review of the company's capital structure and the
likelihood that high levels of secured bank debt would not be
reduced materially in the near-term. The outlook is stable.

Standard & Poor's rating criteria requires a one-notch
difference between the senior unsecured debt rating and the
corporate credit rating when outstanding secured obligations
exceed more than 15% of total assets, which now is the case for
Resource America. If Resource materially reduces reliance on
secured debt on a sustained basis, Resource's senior unsecured
debt issue rating could be raised.


RITE AID: Offering $200-Million of Senior Secured Notes Due 2011
----------------------------------------------------------------
Rite Aid Corporation (NYSE, PCX:RAD) is planning to offer $200
million of eight-year senior secured notes due 2011.

The company intends to use the proceeds from the offering for
general corporate purposes, which may include capital
expenditures and repayments or repurchases of outstanding
indebtedness.

The offering is subject to market and other customary conditions
and contingent upon the company obtaining consent to certain
amendments to its senior credit and synthetic lease facilities.

The notes due 2011 will be offered in the United States to
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended, and outside the United
States pursuant to Regulation S under the Securities Act. The
notes have not been registered under the Securities Act and may
not be offered or sold in the United States without registration
or an applicable exemption from the registration requirements.

Rite Aid Corporation, with a total shareholders' equity deficit
of about $105 million (as of November 30, 2002), is one of the
nation's leading drugstore chains with annual revenues of more
than $15 billion. On December 28, 2002 Rite Aid operated 3,407
stores compared to 3,581 stores in the like period a year ago.


SASKETCHAWAN WHEAT: Noteholders Back Modified Workout Proposal
--------------------------------------------------------------
A Committee representing the holders of a significant principal
amount of secured medium term notes issued by the Saskatchewan
Wheat Pool welcomed the enhanced restructuring proposal
announced by the SWP this morning.

A significant number of Noteholders who are members of the
Committee have indicated their support of the modified proposal
and their intention to approve it at the rescheduled Noteholder
meeting on February 4, 2003.

The revised proposal reflects the Committee's stated objective
of a consensual plan that accommodates the legal rights of
stakeholders and strengthens the financial position of the SWP.
The Committee is pleased that significant and fundamental
amendments to the Company's proposal could be achieved on a
consensual basis for the benefit of all stakeholders. The
Committee believes that the modified proposal provides a more
appropriate capital structure and achieves a more fair and
reasonable balancing of rights.

The Committee believes that the implementation of the modified
proposal will allow the Company to strengthen its position in
the future.


SERVICE MERCHANDISE: Wants Nod for Lighton Compromise Agreement
---------------------------------------------------------------
Service Merchandise Company, Inc., and its debtor-affiliates ask
the Court to approve a compromise with Lighton, Colman, Brohn &
Davis.

Under the compromise, Paul Jennings, Esq., at Bass, Berry and
Sims PLC, in Nashville, Tennessee, tells the Court that Lighton
agreed to release a $1,079,040 administrative expense claim in
consideration for the Debtors':

  (a) dismissal with prejudice of the lawsuit entitled, "Service
      Merchandise Company, Inc. v. Lighton Colman, Inc.",
      pursuant to which the Debtors seek the turnover of $84,817
      in preferential payments; and

  (b) release of any claim against Lighton relating to their
      alleged overpayment for prepaid advertising, including the
      $260,000 the Debtors overpaid.

Mr. Jennings explains that the compromised resolution of the
contested litigation is very favorable for the Debtors'
creditors.  The settlement resolves two separate contested
proceedings, thereby preserving the Debtors and the Court's
resources. (Service Merchandise Bankruptcy News, Issue No. 44;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


SIERRA PACIFIC: Inks Debt Swap Pact to Enhance Balance Sheet
------------------------------------------------------------
Sierra Pacific Resources (NYSE: SRP) reached agreements to
exchange 30% of its mandatorily convertible securities into
common stock as part of its strategy to strengthen the Company's
balance sheet and liquidity. The exchange of these securities --
known as Premium Income Equity Securities -- effectively
accelerated their conversion.

As a result, Sierra Pacific Resources will reduce its
outstanding parent company debt by approximately $105 million.
Additionally, it will reduce by approximately $26 million the
interest expense that would have been paid to PIES holders by
Sierra Pacific Resources through the November 2005 conversion
date. The exchanges were executed at a substantial discount to
the PIES stated value.

Under the terms of the privately negotiated agreements reached
with a limited number of investors, Sierra Pacific Resources
will issue approximately 13.66 million shares of common stock in
exchange for a total of 2,095,650 of the mandatorily convertible
securities. The exchanges are expected to settle February 5,
2003. The Company has no plans to retire additional outstanding
securities through the issuance of common stock.

Walter Higgins, chairman, president and CEO of Sierra Pacific
Resources, said, "This is a significant development in
strengthening our financial position. During the first quarter
of this year, we intend to pursue further actions that will
continue to improve our balance sheet and liquidity. Those
actions will be announced promptly as they occur."

The PIES exchanges accelerate by two years and 10 months the
conversion of approximately 30% of the outstanding securities,
which were mandatorily convertible into approximately 7.6
million common shares. Any incremental dilution resulting from
these exchanges is significantly mitigated by the combination of
interest savings and a 30% discount from the PIES' stated value.

Headquartered in Nevada, Sierra Pacific Resources is a holding
company whose principal subsidiaries are Nevada Power Company,
the electric utility for most of southern Nevada, and Sierra
Pacific Power Company, the electric utility for most of northern
Nevada and the Lake Tahoe area of California. Sierra Pacific
Power Company also distributes natural gas in the Reno-Sparks
area of northern Nevada. Other subsidiaries include the
Tuscarora Gas Pipeline Company, which owns 50 percent interest
in an interstate natural gas transmission partnership, Sierra
Pacific Communications, a telecommunications company, and Sierra
Pacific Energy (e-three), an energy conservation services
company.

                          *    *    *

As reported in Troubled Company Reporter's October 14, 2002
edition, Standard & Poor's Ratings Services reaffirmed its
single-'B'-plus corporate credit ratings on Sierra Pacific
Resources and its utility subsidiaries Nevada Power Co., and
Sierra Pacific Power Co.  Standard & Poor's also affirmed the
double-'B' ratings on the senior secured debt at the two
utilities. All ratings remain on CreditWatch with negative
implications.


SOLUTIA: Asset Sale Spurs S&P to Upgrade Bank Loan Rating to BB+
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its senior secured
bank loan rating on specialty chemical maker Solutia Inc., to
'BB+' from 'BB' and removed the rating from CreditWatch where it
was placed Dec. 4, 2002.

Standard & Poor's said that it has affirmed its 'BB' corporate
credit rating on the company. Solutia, based in St. Louis, Mo.,
is a manufacturer and marketer of specialty and industrial
chemical products, including nylon fibers and polymers, and has
more than $800 million of debt, excluding the capitalization of
operating leases.

"The senior secured bank loan rating is being raised following
the sale of Solutia's resins, additives, and adhesives
businesses to UCB S.A. for $500 million," said Standard & Poor's
credit analyst Peter Kelly. "Given the significant reduction in
secured bank debt as a result of the sale, Standard & Poor's
expects that the bank loan collateral package would retain
sufficient value in a default scenario to cover a fully drawn
revolving credit facility."

Standard & Poor's said that its ratings continue to reflect
Solutia's average business risk profile, tempered by relatively
sizable debt levels and significant long-term liabilities.


SOUTHERNERA RES.: Secures New Financing to Support Debt Workout
---------------------------------------------------------------
The Board of Directors of SouthernEra Resources Ltd., accepted a
bought deal equity proposal to sell 9 million common shares at
C$7.75/share for gross proceeds of $69.75million to a syndicate
led by Griffith's McBurney & Partners. The syndicate also has
the option to acquire an additional 3 million shares on the same
terms and conditions at closing which is expected to occur on or
before February 20th, 2003.

The proceeds of the financing will be used to support debt
restructuring, further develop the greater Messina platinum
group metal mine, working capital requirements and for general
corporate purposes. Completion of the offering is subject to all
necessary regulatory and other approvals.

The securities offered have not been registered under the U.S
Securities Act of 1933, as amended, and may not be offered or
sold in the United States absent registration or applicable
exemption from the registration requirements. This press release
shall not constitute an offer to sell or the solicitation of an
offer to buy nor shall there be any sale of the securities in
any State in which such offer, solicitation or sale would be
unlawful.

SouthernEra Resources is an independent producer of platinum
group metals and diamonds. The company also has an extensive PGM
and diamond exploration program. The common shares are listed on
the Toronto Stock Exchange and the London Stock Exchange AIM.


SYSTECH RETAIL: Brings-In Genovese Joblove as Bankruptcy Counsel
----------------------------------------------------------------
Systech Retail Systems (U.S.A.), Inc., and its debtor-affiliates
seek the U.S. Bankruptcy Court for the Eastern District of North
Carolina's approval to retain the law firm of Genovese Joblove &
Battista, PA as Co-Counsel in the Company's on-going chapter 11
cases.

The Debtors relate that before the Petition Date, they sought
the services of Genovese Joblove for advice about restructuring
matters and preparation for the potential commencement and
prosecution of their Chapter 11 cases.  The Debtors believe that
continued representation by their pre-Petition Date
restructuring counsel, Genovese Joblove, is critical to their
efforts to restructure their businesses.  Genovese Joblove has
extensive experience and expertise in complex commercial
reorganization cases and has become familiar with the Debtors'
business, legal and financial affairs.

As Co-Counsel, Genovese Joblove will:

     (a) advise the Debtors with respect to their powers and
         duties as debtors and debtors-in-possession in the
         continued management and operation of their businesses
         and properties;

     (b) attend meetings and negotiate with representatives of
         creditors and other parties-in-interest and advise and
         consult on the conduct of the case, including all of
         the legal and administrative requirements of operating
         in Chapter 11;

     (c) advise the Debtors in connection with any contemplated
         sales of assets or business combinations, including the
         negotiation of asset, stock purchase, merger or joint
         venture agreements, formulate and implement bidding
         procedures, evaluate competing offers, draft
         appropriate corporate documents with respect to the
         proposed sales, and counsel the Debtors in connection
         with the closing of such sales;

     (d) advise the Debtors in connection with post-Petition
         Date financing and cash collateral arrangements,
         provide advice and counsel with respect to prepetition
         financing arrangements, and provide advice to the
         Debtors in connection with the emergence financing and
         capital structure, and negotiate and draft documents
         relating thereto;

     (e) advise the Debtors on matters relating to the
         evaluation of the assumption, rejection or assignment
         of unexpired leases and executory contracts;

     (f) provide advice to the Debtors with respect to legal
         issues arising in or relating to the Debtors' ordinary
         course of business including attendance at senior
         management meetings, meetings with the Debtors'
         financial and turnaround advisors and meetings of the
         board of directors, and advice on certain aspects of
         employee, workers' compensation, employee benefits,
         labor, tax, banking, insurance, securities, corporate,
         business operation, contracts, joint ventures, real
         property, press/public affairs and regulatory matters;

     (g) take all necessary action to protect and preserve the
         Debtors' estates, including the prosecution of actions
         on their behalf, the defense of any actions commenced
         against those estates, negotiations concerning all
         litigation in which the Debtors may be involved and
         objections to claims filed against the estates;

     (h) prepare on behalf of the Debtors all motions,
         applications, answers, orders, reports and papers
         necessary to the administration of the estates;

     (i) negotiate and prepare on the Debtors' behalf, plan of
         reorganization, disclosure statements) and all related
         agreements and/or documents, and take any necessary
         action on behalf of the Debtors to obtain confirmation
         of such plan;

     (j) attend meetings with third parties and participate in
         negotiations with respect to the above matters;

     (k) appear before this Court, any appellate courts, and
         protect the interests of the Debtors' estates before
         such courts; and

     (l) perform all other necessary legal services and provide
         all other necessary legal advice to the Debtors in.
         connection with these Chapter 11 cases.

The attorneys who will be principally working on this case are:

          Paul J. Battista     $365 per hour
          Craig P. Rieders     $340 per hour

Some professionals may render their services in this case.  
Genovese Joblove professionals' hourly rates range from:

          Attorneys            $150 to $240 per hour
          Legal Assistants     $ 75 to $100 per hour

Systech Retail Systems (USA) Inc., along with two other
affiliates filed for chapter 11 protection on January 13, 2003,
(Bankr. E.D.N.C. Case No. 03-00142).  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.


T&W FUNDING: Fitch Further Cuts Junk Ratings on 4 Note Classes
--------------------------------------------------------------
Fitch Ratings downgrades the following classes of securities:

    --T&W Funding Company VII, LLC, T&W Lease-Backed Notes,
      Series 1997-A Class A notes are downgraded to 'C' from
      'CCC'.

    --T&W Funding Company IX (Lehman Receivables III LLC), T&W
      Lease-Backed Notes, Series 1998-A Class A notes are
      downgraded to 'C' from 'CCC'.

    --T&W Funding Company X (Lehman Receivables IV LLC), T&W
      Lease-Backed Notes, Series 1998-B Class A notes are
      downgraded to 'C' from 'CCC'.

    --T&W Funding Company XII, LLC, T&W Lease-Backed Notes,
      Series 1999-A Class A notes are downgraded to 'C' from
      'CCC'.

These rating actions are the result of the continued severe
underwater collateral position in all four transactions. Fitch
has taken a series of rating actions on these securities
beginning in January, 2000 when asset quality issues first
emerged and performance triggers were hit. On the subsequent
dates of May 8th and August 31st, and November 17th, 2000, Fitch
downgraded both the class A and B bonds of each transaction.

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


TAUNTON CDO: Fitch Puts BB+/CCC+ Note Ratings on Watch Negative
---------------------------------------------------------------
Fitch Ratings has placed the following classes of notes issued
by Taunton CDO Ltd. on Rating Watch Negative:

-- $216,091,705 class A-1 floating-rate notes due 2031 'AA+';

-- $78,578,802 class A-2 fixed-rate notes due 2031 'AA+';

-- $26,000,000 class B floating-rate notes due 2031 'A';

-- $24,000,000 class C floating-rate notes due 2031 'BB+';

-- $16,000,000 class D floating-rate notes due 2031 'CCC+'.

These actions reflect continued deterioration in the credit
quality of Taunton CDO Ltd.'s reference portfolio. Reference
obligations that have contributed to such deterioration include,
but are not limited to, Flavius CDO Ltd. class A-2B. The
downward rating migration of this and other obligations has
increased the credit risk of the notes to a point where the risk
may no longer be consistent with their respective ratings. Fitch
is currently reviewing the transaction in detail. Appropriate
action will ensue upon completion of its analysis.


TAYLOR GROUP: Year 2002 Results Swing-Down to $41MM in Net Loss
---------------------------------------------------------------
Taylor Capital Group, Inc. (Nasdaq: TAYC), the holding company
for Cole Taylor Bank, announced a net loss for the year ended
December 31, 2002 of $41.4 million, compared to net income of
$17.6 million during 2001. The net loss reported in 2002 was the
result of a charge of $61.9 million to settle litigation
associated with the Company's acquisition of the Bank in 1997.

Net income for the fourth quarter of 2002 was $3.9 million, as
compared to $3.9 million in the fourth quarter of 2001.

In addition to the litigation settlement charge, the adoption of
a new accounting standard on January 1, 2002, which eliminated
the amortization of goodwill, also impacted the comparability of
the quarterly and year-to-date earnings. Without considering the
settlement charge in 2002 and amortization expense of goodwill
during 2001, pro forma 2002 net income would have been $20.5
million, compared to $19.9 million during 2001. The increase in
net income was produced by an increase in net interest income,
partly offset by lower noninterest income and higher noninterest
expense.

Pro forma net income for the fourth quarter of 2002 would have
been $3.9 million, compared to $4.5 million, during the fourth
quarter of 2001. In the quarterly comparison, higher noninterest
expense and lower noninterest income, partly offset by an
increase in net interest income, caused the decrease in pro
forma net income.

"In 2002 we continued to grow our company during a year that was
marked by transition and numerous changes," said Jeffrey W.
Taylor, Chairman and Chief Executive Officer of Taylor Capital
Group. "We moved forward on a refocused business plan, settled
costly and distracting litigation, and recapitalized the
company, including completing a successful IPO. The net effect
is that our entire company has entered 2003 with momentum
focused on customer acquisition, retention and profitable
growth."

"Despite our optimism about our own prospects, we can do little
to control geo political events and their effects on the
economy. Against that backdrop of uncertainty, our expectations
are that we will proceed conservatively."

Net Interest Income:

During 2002 net interest income was $101.3 million compared to
$91.7 million during 2001, an increase of $9.6 million or 10.5%.
Net interest income benefited from an increase in average
earning assets as well as a higher net interest margin. The net
interest margin during 2002 was 4.44% compared to 4.22% in 2001.
During the decline in market interest rates between 2002 and
2001, the decline in the cost of interest-bearing liabilities
was larger than the decline in yield of the interest-earning
assets. Average interest-earning assets increased $100.0
million, or 4.5% during 2002. Most of the increase in interest-
earning assets was produced by higher average loan balances.

During the fourth quarter of 2002, net interest income was $25.0
million, which is $725,000, or 3.0%, higher than during the
fourth quarter of 2001. Net interest margin was 4.27% in the
fourth quarter of 2002, as compared to 4.41% during the same
quarter in 2001. Net interest income during the fourth quarter
of 2002 benefited from a $134.5 million, or 6.0%, increase in
average interest-earning assets as compared to the fourth
quarter in 2001. However, the issuance of $45.0 million of 9.75%
trust preferred securities caused the lower net interest margin
during the fourth quarter of 2002.

Provision for loan losses was $9.9 million during 2002 compared
to $9.7 million during 2001. Provision for loan losses was $2.5
million during the fourth quarter of 2002 compared to $3.0
million during the same quarter of 2001. The Company's ratio of
the allowance for loan losses to total loans was 1.81% at
December 31, 2002 compared to 1.79% at December 31, 2001.

Noninterest Income:

During 2002 noninterest income was $22.0 million, a decrease of
$2.3 million, or 9.5%, compared to noninterest income of $24.3
million during 2001.

During the fourth quarter of 2002, noninterest income was $4.5
million, which is $857,000, or 15.9%, lower than the $5.4
million of noninterest income during the fourth quarter of 2001.

For both the year-to-date and quarterly comparisons, the reduced
noninterest income was due to lower revenues from mortgage-
banking activities and trust operations. These changes resulted
from our more focused strategic business plan, adopted in the
fall of 2001, to concentrate on the Company's small and middle-
market business banking customers.

Noninterest Expense:

During 2002, noninterest expense was $143.2 million. Without the
$61.9 million litigation settlement charge recorded during 2002,
noninterest expense would have been $81.3 million, an increase
of $2.1 million, or 2.7%, when compared to $79.1 million of
expense in 2001. Higher salaries and benefits, legal fees,
advertising and other operating expenses caused the increase in
pro forma noninterest expense.

During the fourth quarter of 2002, noninterest expense was $21.0
million, an increase of $227,000, or 1.1%, as compared to the
$20.8 million of expense during the fourth quarter of 2001. The
increase in the quarterly comparison was primarily due to higher
legal fees, advertising and other operating expenses.

Balance Sheet:

Total assets of the Company were $2.54 billion at December 31,
2002, compared to $2.39 billion December 31, 2001. At
December 31, 2002, total loans were $1.88 billion, total
deposits were $1.96 billion, and stockholders' equity was $168.7
million. In comparison, at December 31, 2001, total loans were
$1.74 billion, total deposits were $1.83 billion, and
stockholders' equity was $170.9 million.

Completion of Initial Public Offering:

On October 21, 2002, the Company completed a concurrent initial
public offering of common stock and trust preferred securities.
In the common stock offering, the Company issued 2,250,000
shares of $0.01 par value common stock at an offering price of
$16.50 per share. On November 6, 2002, the Company's
underwriters exercised an option to purchase 337,500 additional
shares to cover over-allotments. This option was granted in
connection with our initial public offering.

In the trust preferred securities offering, TAYC Capital Trust
I, a Delaware statutory trust formed by the Company for purposes
of offering the trust preferred securities, issued $45.0 million
of trust preferred securities. Owners of the trust preferred
securities are entitled to quarterly cumulative cash
distributions on the securities at an annual rate of 9.75% and
the securities have a $25.00 liquidation amount per security.
After allowing for the underwriter's discount and offering
expenses, the Company received net proceeds of $80.3 million
from the concurrent offerings and exercise of the underwriters'
over-allotment option. The Company used $61.9 million of the net
proceeds from the offerings on October 21, 2002 to fully satisfy
its obligations under the litigation settlement agreements
related to the 1997 acquisition of the Bank. The Company used
$17.0 million of the net proceeds to reduce outstanding
indebtedness. The remainder of the net proceeds will be used for
general corporate purposes.

At December 31, 2002, the Company would be considered "well
capitalized" under regulatory capital adequacy guidelines.

Taylor Capital Group, Inc. is a bank holding company
headquartered in Wheeling, Illinois, a suburb of Chicago. The
Company derives virtually all of its revenue from its
subsidiary, Cole Taylor Bank, which presently operates 11
banking centers throughout the Chicago metropolitan area.

As previously reported in Troubled Company Reporter, Fitch
downgraded the ratings of Taylor Capital Group and removed the
company from Rating Watch Negative. At the same time Fitch
affirmed the ratings of TCG's main operating subsidiary Cole
Taylor Bank. Fitch's action was taken in conjunction with TCG's
final settlement of longstanding litigation and an initial
public offering related to that settlement. In addition, Fitch
assigned new ratings to TAYC Capital Trust I, an entity
established to issue capital securities.

                    Ratings Lowered and Removed
         From Rating Watch Negative, Rating Outlook Stable:

                       Taylor Capital Group

    --Long-term Senior Debt from 'BBB-' to 'BB+';
    --Individual Rating from 'B/C' to 'C';
    --Preferred Stock from 'BB+' to 'BB-';

                   Ratings Affirmed and Removed
         From Rating Watch Negative, Rating Outlook Stable:

                      Taylor Capital Group

    --Support '5'.

                        Cole Taylor Bank

    --Long-term Senior Debt 'BBB-';
    --Long-term Deposits 'BBB';
    --Short-term Deposits 'F2';
    --Short-term senior debt 'F3';
    --Individual Rating 'B/C';
    --Support '5'.

              New Rating Assigned, Rating Outlook Stable:

                        TAYC Capital Trust I

    --Trust Preferred Securities 'BB-'.


TRANSWESTERN PIPE: Fitch Ups Sr. Unsecured Rating to B+ from CC
---------------------------------------------------------------
Fitch Ratings has upgraded Transwestern Pipeline Co.'s
indicative senior unsecured debt rating to 'B+' from 'CC'.
Transwestern currently has no senior unsecured debt outstanding.
The Rating Watch has been changed to Evolving from Negative.
Transwestern owns and operates a 2,600-mile FERC regulated
interstate natural gas pipeline extending from West Texas,
Oklahoma, and the San Juan Basin into California. Transwestern
is an indirect subsidiary of Enron Corp. Transwestern's rating
had been lowered to 'CC' and placed on Rating Watch Negative on
Nov., 28, 2001 following termination of Enron's agreement to
merge with Dynegy Inc. and shortly before Enron filed for
bankruptcy on Dec. 2, 2001. Under Section 363 of the Bankruptcy
Code, Enron has been proceeding with a plan to sell or
reorganize certain of its operating assets, including
Transwestern. A second round of bids for selling Transwestern
was completed in mid-January 2003, however results have not been
made public yet.

The rating upgrade reflects Transwestern's operating status
outside the Enron bankruptcy and its standalone credit measures
which are generally consistent with investment grade. Based on
Transwestern's legal structure and other practical and economic
considerations, consolidation into Enron's bankruptcy is not a
likely scenario. In addition, creditors are protected by
Transwestern's collateral value which Fitch estimates at between
1.5 times - 2x the amount of its outstanding debt. Cash flow
from operations was 3.8 times cash interest for 2002 and debt is
currently less than 50% of capitalization and should reduce in
2003. Under present operating plans the pipeline system should
continue to generate positive free cash flow. Moreover,
Transwestern is prohibited under its current bank agreement from
making upstream distributions to Enron and limited in incurring
incremental debt. Operating performance remains stable and has
not been materially impaired by the burden of Enron's bankruptcy
as shippers and vendors continue to contract with Transwestern
under normal terms.

The indicative senior unsecured rating considers the
subordinated position of senior unsecured creditors to $535
million of secured debt. The rating also reflects the
uncertainty concerning the Enron bankruptcy. While the sale of
Transwestern to a creditworthy purchaser is a reasonable
possibility, Enron's bankruptcy issues are complex and the
ultimate ownership and structure is unresolved. If Transwestern
and Enron's other assets are not sold, they could emerge from
bankruptcy as an operating entity under the proposed Section 363
structure or, alternatively, Enron could distribute the assets
under a plan of reorganization. The rating also recognizes
Transwestern's limited financial flexibility. Transwestern's
lenders renewed its secured 364-day facility in November 2002.
However, Transwestern cannot borrow under the revolver and must
manage its liquidity needs with cash on hand and free cash flow.
Mitigating this exposure is Transwestern's strong cash position.
Transwestern ended 2002 with nearly $40 million in cash and
prospects for strong and stable funds from operations and
limited future working capital and maintenance capital
expenditure requirements.

The Evolving Rating Watch recognizes the potential for a ratings
upgrade pending Transwestern's sale or restructuring out of
bankruptcy. However, the timing and ultimate resolution is
uncertain at this time.


TRENWICK GROUP: Loss Reserves Spur AM Best to Downgrade Ratings
---------------------------------------------------------------
A.M. Best Co., downgraded the financial strength ratings to C
(Weak) of Trenwick Group Ltd.'s (NYSE: TWK) ongoing operating
subsidiaries and has withdrawn the financial strength ratings of
Trenwick's operating companies--which are now in runoff--and
assigned each a NR-3 rating (Rating Procedure Inapplicable).

Prior to the withdrawal of these ratings, A.M. Best had
downgraded the financial strength ratings of the runoff
companies to C (Weak). Concurrent with these actions, all debt
ratings relating to securities issued by Trenwick's various
holding companies have also been downgraded and assigned debt
ratings of "c". All ratings remain under review with negative
implications.

These rating actions follow the company's announcement that it
has strengthened loss reserves by $107 million in fourth quarter
2002. That action follows Trenwick's $90.7 million strengthening
in third quarter 2002 and further depletes the low levels of
surplus still remaining within the operating companies and
elevates operating leverages to unacceptable levels.

Additionally, Trenwick has no capacity to settle and is in
renegotiation discussions with its creditors related to its $75
million senior note obligations, which are due April 1, 2003.
Failure to renegotiate this note by March 1 will put Trenwick in
default of its Letter of Credit facility, which is necessary to
support its Lloyd's operations. If the LOC facility goes into
default, A.M. Best believes that this may impede the group's
ability to sustain its remaining underwriting operations over
the long term, which includes its Lloyd's facility and a
fronting arrangement between Trenwick America Corporation and
Chubb Re. These ongoing businesses are Trenwick's only
operations potentially capable of generating revenue and
improving the group's weak financial position.

A.M. Best will continue to monitor Trenwick's ability to meet
near-term debt obligations, adequacy of the company's loss
reserves as well as any further operating issues, which may
arise. Due to the considerable uncertainties all ongoing ratings
remain under review with negative implications.

For a complete listing of Trenwick's financial strength and debt
ratings, visit http://www.ambest.com/press/020303trenwick.pdf  

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


UNITED AIRLINES: Court Okays Babcock to Render Financial Advice
---------------------------------------------------------------
UAL Corporation and its debtor-affiliates obtained the Court's
authority to employ Babcock & Brown LP as their financial
advisor, with an emphasis on aircraft financing.

Babcock & Brown will provide financial advisory services as
deemed appropriate and feasible to assist the Debtors in the
course of these Chapter 11 cases.  Specifically, Babcock & Brown
is expected to:

  (a) develop a general economic restructuring strategy for all
      of the Debtors' secured debt and lease obligations;

  (b) advise and assist in structuring and effecting the
      financial aspects of transactions in the context of the
      Debtors' bankruptcy cases;

  (c) provide contact information for bank and insurance company
      lenders and lessors, assist in the organization of
      information to be disseminated, draft proposals and
      arrange meetings and discussions with the parties;

  (d) assist in the preparation of any offering materials or
      requests for proposals for lenders and lessors;

  (e) finalize and confirm all lease rental, debt amortization,
      stipulated loss and termination value schedules; and

  (f) assist the Debtors and its counsel in negotiating the
      final documentation of the leases, mortgages and related
      transactions, with the understanding that Babcock & Brown
      would not "lead" the negotiations but rather would be
      available for strategic and technical advice and would
      assist in the facilitation of negotiation and final
      agreements.

Babcock & Brown does not bill its services on an hourly basis,
but rather, as is customary in its industry, bills its clients
at a negotiated fixed monthly rate.  The Debtors have agreed to
pay Babcock & Brown a fixed monthly fee, payable in advance each
month. (United Airlines Bankruptcy News, Issue No. 7; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   

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


UNIVERSAL BROADBAND: Dennis Johnston Reports 5.53% Equity Stake
---------------------------------------------------------------
Dennis H. Johnston may be deemed to have beneficial ownership
of, and sole voting and dispositive power with respect to
423,000 shares of FoneFriend common stock. Accordingly, Mr.
Johnston might be deemed to beneficially own approximately 5.53%
of the outstanding shares of FoneFriend common stock based upon
the 7,646,000 shares of FoneFriend common stock outstanding on
November 20, 2002, or 4.99% of the 8,471,000 outstanding shares
of FoneFriend common stock as of January 17, 2003.

Mr. Johnston has the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of, the
423,000 shares of FoneFriend common stock beneficially owned by
him. No other person is known to have the right to receive or
the power to direct the receipt of dividends from, or the
proceeds from the sale of, such securities.

On June 12, 2002, FoneFriend and FF Nevada entered into an
Amended and Restated Agreement and Plan of Merger. The Merger
provides, among other things, for the sale of all FF Nevada
assets to FoneFriend in exchange for 2,200,000 shares of
FoneFriend common stock, pursuant to IRC 368, which stock was
then distributed, on a pro rata basis, to the shareholders of FF
Nevada.

On November 20, 2002 Mr. Johnston acquired 423,000 shares of
FoneFriend common stock as payment for his services rendered in
connection with preparation, monitoring and execution by
FoneFriend of an Amended and Restated Agreement and Plan of
Merger, dated June 12, 2002), wherein FoneFriend issued shares
of common stock to acquire the assets of FoneFriend, Inc., a
privately held Nevada corporation.

Mr. Johnston is a licensed attorney in California and was
retained to draft and oversee the implementation of the Merger.
As stated above, Mr. Johnston was issued 423,000 shares of
FoneFriend common stock in consideration for legal services
rendered.

Mr. Johnston is presently a Director and the Secretary of
FoneFriend, a provider of Voice over IP communications services
and products. Its address is 2722 Loker Ave. West, Suite G,
Carlsbad, CA 92008.

As provided by the Merger, all prior officers and directors
resigned at the Effective Time. Jackelyn Giroux became a
director and the new President of FoneFriend, Dennis H. Johnston
became a director, Secretary and Treasurer of FoneFriend, and
Francois Van Der Hoeven became a director and Vice President of
FoneFriend.

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

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


US AIRWAYS: Narrows Fourth Quarter 2002 Net Loss to $794 Million
----------------------------------------------------------------
US Airways Group, Inc., reported a net loss of $794 million for
the fourth quarter 2002, on operating revenues of $1.61 billion,
compared to a net loss of $1.16 billion on operating revenues of
$1.57 billion for the fourth quarter 2001. Net loss per diluted
share for the quarter was $11.67 compared to $17.07 for the
fourth quarter 2001, while the net loss excluding unusual items,
which are described in the notes to the financial tables, was
$295 million compared to $552 million for the same period in
2001.

For the full year 2002, US Airways Group, Inc. reported a net
loss of $1.65 billion on operating revenues of $6.98 billion,
compared to a net loss of $2.12 billion on operating revenues of
$8.29 billion for the same period in 2001. Excluding unusual
items in both years, which are described in the notes to the
financial tables, the net loss for the full year 2002 was $1.05
billion compared to $1.17 billion for the same period in 2001.

"Our disappointing results reflect an industry that continues to
operate in uncertain economic times with weak passenger demand,
escalating fuel prices, and the threat of war," said David
Siegel, US Airways president and chief executive officer.
"Despite these challenging conditions, we have made great
progress in our efforts to restructure our company and remain on
track for emerging from Chapter 11 reorganization at the end of
March 2003. We are gaining momentum and are achieving the cost
position, regional jet growth and alliance network necessary to
compete more aggressively," said Siegel.

Since the beginning of the fourth quarter 2002, US Airways has
taken a number of important and necessary steps towards Chapter
11 emergence in March 2003. Among those steps are:

     * Secured additional cost savings, which increased the
company's expected savings to approximately $1.9 billion in
average annual savings over the next seven years. This includes
additional participation from all employees, aircraft lessors
and lenders, and other vendors.

     * Received U.S. Bankruptcy Court approval to present the
reorganization plan to creditors for voting. A confirmation
hearing on the plan is set for mid-March.

     * Continued to "right-size" the business to be in line with
industry demand by decreasing capacity. This resulted in an 8.8
percent reduction in available seat miles for the quarter
compared to the same quarter in 2001.

     * Reduced cost per available seat mile by 3.1 percent for
the current quarter (4.3 percent excluding fuel), versus the
same quarter 2001, driven primarily by a 16.8 percent decrease
in personnel costs.

     * Unit revenue for the fourth quarter 2002 increased by 7.7
percent to 10.30 cents per available seat mile, compared to the
same period last year.

     * Introduced code sharing with alliance partner United
Airlines, offering seamless ticketing and baggage handling.
Customers for both US Airways and United now can travel on 459
code-share flights, with significantly more markets expected to
be introduced this year.

     * Reached agreements with US Airways Express affiliate
carriers Mesa, Chautauqua and Midway on regional jet growth.
Also established the terms for operating regional jets at a new
MidAtlantic Airways operation with a regional cost structure.
Finally, employees at US Airways' wholly owned subsidiaries
ratified agreements on regional jet flying upon emergence from
Chapter 11.

     * Reached global restructuring agreements with two major
partners, GE and Airbus. The Airbus agreement remains subject to
Bankruptcy Court approval.

US Airways has shown significant improvement in nearly all
operations quality measurements. The company's completion factor
for 2002 was 99.4 percent, up 2.7 percentage points year over
year. Departure and arrival performance improved in nine of the
12 months of 2002, while the completion factor improved in each
of the 12 months. US Airways ranked number one in on- time
arrivals among the 10 carriers in November 2002, according to
the U.S. Department of Transportation (DOT) Air Travel Consumer
Report. US Airways also ranked first in arrival performance for
the months of August and September.

"Our employees have not lost focus on the most important facet
of our business -- our customers. We continue to rank in the top
tier of consumer indexes in terms of operational performance.
This would not have been possible if not for the resolve and
dedication of our more than 33,000 employees," said Siegel.

Looking forward, US Airways expects decreased revenue as a
result of recent reductions in business fares initiated by its
competitors. "While we have fewer routes than most of our
competitors that were impacted by these lower fares, we have
estimated that our revenues will be reduced by approximately $10
million per month. It also appears that customers are purchasing
these fares for future travel, suggesting that buyers are taking
full advantage of the lower fares and simply pulling forward
sales from future months," said B. Ben Baldanza, US Airways
senior vice president of marketing and planning.

The company also continues to face challenges related to its
pension plans. In the fourth quarter of 2002, the company
recognized a $742 million charge to stockholders' equity in
connection with its increased minimum pension liability. On
Jan. 30, 2003, the company filed formal notice with the Pension
Benefit Guaranty Corporation of its intent to terminate its
defined benefit pension plan for its pilots effective March 31,
2003, and to replace that plan with a defined contribution plan.
A hearing on the company's distress termination motion is
scheduled in the Bankruptcy Court on Feb. 20, 2003.

               Financial and Operating Performance

Operating revenues for the fourth quarter 2002 were $1.61
billion, up 3.1 percent over the same period in 2001, while
operating expenses of $2.22 billion were down by 3.2 percent.
The operating loss for the fourth quarter 2002 was $603 million,
compared to an operating loss of $725 million for the fourth
quarter 2001.

For the quarter, US Airways, Inc., carried 10.4 million
passengers, a decline of 7.1 percent compared to the same period
of 2001. Revenue passenger miles for the quarter declined 1.5
percent while available seat miles declined 8.8 percent,
resulting in a passenger load factor of 68.3 percent, a year-
over-year increase of 5.1 percentage points. The yield of 13.35
cents for the fourth quarter 2002 was down 0.8 percent from the
same period in 2001, while revenue per available seat mile of
10.30 cents was up 7.7 percent. Cost per available seat mile of
12.45 cents for the quarter decreased 3.1 percent versus the
same period of 2001. The cost of aviation fuel per gallon for
the period was 83.67 cents, up 9.3 percent from 2001. The cost
per available seat mile, excluding fuel, decreased by 4.3
percent.

US Airways Group ended the year with total restricted and
unrestricted cash of $1.15 billion, including $633 million in
unrestricted cash, cash equivalents and short-term investments.
This cash balance includes $300 million drawn on the company's
$500 million Debtor-in-Possession (DIP) facility.

                         Full Year 2002

Operating revenues for 2002 were $6.98 billion, down 15.8
percent from 2001. Operating expenses were $8.29 billion, down
16.8 percent. Available seat miles for US Airways, Inc. for the
full year 2002 declined 15.5 percent year-over-year, reflecting
US Airways' capacity reductions resulting from the ongoing
sluggish economic environment. US Airways carried 47.2 million
passengers during 2002, a 16.0 percent decline compared to the
56.1 million passengers carried during the previous year.
Revenue passenger miles declined 12.9 percent compared to 2001,
while the passenger load factor increased by 2.1 percentage
points to 71.0 percent. Revenue per available seat mile was
10.38 cents for 2002, a decrease of 4.9 percent compared to
2001, while the cost per available seat mile was 12.10 cents, a
decrease of 2.9 percent year- over-year (0.8 percent excluding
fuel).

In light of the company's continuing restructuring efforts,
which includes an ongoing active solicitation period through
March 10, 2003, of acceptances to its First Amended Plan of
Reorganization pursuant to a related Disclosure Statement, both
dated as of Jan. 17, 2003, US Airways will not hold a conference
call to discuss these results.

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

DebtTraders reports that US Air Inc.'s 10.375% bonds due 2013
(UAWG13USR2) are trading at about 10 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=UAWG13USR2
for real-time bond pricing.


US AIRWAYS: Earns Approval to Reject 9 More Aircraft Leases
-----------------------------------------------------------
Judge Stephen S. Mitchell permits US Airways Group Inc., and its
debtor-affiliates to reject 9 additional aircraft Leases:

   Tail Numbers      New Monthly Rate        Annual Cost Savings
   ------------      ----------------        -------------------
    N404US            $360,000                $7,052,608
    N405US            ($90,000 per plane)
    N417US
    N418US
    (Boeing 737)

    N406US            $450,000                $9,739,831
    N409US            ($90,000 per plane)
    N425US
    N532US
    N533US

The Court rules that nothing in the Order pertaining to the
transactions involving the Manufacturers Hanover Aircraft will
be construed as affecting or limiting the claims of the Owner
Participants.  Nothing in the Order pertaining to the
Manufacturers Hanover Transactions constitutes a finding of fact
or conclusion of law as to whether the Equipment Trust Trustee
has the right vis-a-vis the Owner Trustee and/or the Owner
Participants to enter into the New Leases and related
transactions in accordance with the terms and conditions of the
Existing Leases, Equipment Trust Agreements, the related
intercreditor agreements or applicable law or whether the Owner
Participants or Owner Trustees are properly objecting to any
action by the Equipment Trust Trustee. (US Airways Bankruptcy
News, Issue No. 23; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


U.S. ENERGY CORP: Grant Thornton Expresses Going Concern Doubt
--------------------------------------------------------------
U.S. Energy Corp., is a Wyoming corporation (formed in 1966) in
the business of acquiring, exploring, developing and/or selling
or leasing mineral properties. Its fiscal year ends May 31.

In fiscal 2002, most of the Company's business activity was
devoted to the coalbed methane, i.e., acquiring acreage,
drilling exploratory wells, testing the wells, and negotiating
the purchase of a coalbed methane producing field. The coalbed
methane gas activities are conducted through Rocky Mountain Gas,
Inc., a Wyoming corporation owned 51.2% by USE and 40.5% by
Crested Corp.  As of May 31, 2002, Crested is a 70.5% majority-
owned subsidiary of USE. Properties of RMG are held in Wyoming
and southeastern Montana and RMG holds approximately 280,486
gross mineral acres of coalbed methane properties.

USE also holds commercial properties, most of which are located
in Utah that were acquired as part of a uranium property and
mill acquisition. In fiscal 2002, only the commercial properties
produced revenues. For financial statement presentation
purposes, the Company has two segments of business; minerals and
commercial operations (motel, real estate and airport), however,
presently the Company's business priority is focused mainly on
CBM.

Operations for the fiscal year ended May 31, 2002, resulted in a
net loss of $6,267,600. The major noncash components of the net
loss for the year were: Depreciation of $541,500; impairment of
goodwill of $1,622,700; services which were paid for with
Company common stock $787,700; gain on the sale of assets of
$812,700; provision for bad debts of $171,200; noncash
compensation of $535,200; and the net change in assets and
liabilities of $115,200.

The primary sources of U.S. Energy's capital resources are cash
on hand; collection of receivables; receipt of monthly payments
from CCBM for the purchase of an interest in RMG's coalbed
methane properties; CCBM funding of drilling and development
programs; projected production from RMG's coalbed methane
properties; sale of excess mine, construction and drilling
equipment; sale of real estate properties which are no longer
needed in the core business of the Company; sale of partial
ownership interest in mineral properties; proceeds under the
line of credit; equity financing of the Company's subsidiaries;
and the final determination of the Sheep Mountain Partners
arbitration/litigation. It will also continue to receive
revenues from its motel and real estate operations in southern
Utah.

Drilling and development capital requirements will be satisfied
for the majority of fiscal 2003 from the CCBM work commitment of
which there is $2,755,000 remaining as of May 31, 2002.
Approximately one-half of this amount will be paid by CCBM on
behalf of RMG for its obligations for drilling and property
development of coalbed methane properties. There is also a
balance of $6,375,000 due from CCBM under its purchase
agreement. Under the terms of the promissory note, this amount
will continue to be paid at the rate of $125,000 per month plus
interest until November 2004 at which time a balloon payment of
$2,375,000 is due. CCBM's interest in RMG's coalbed methane
properties is pledged as security for the note to RMG. After
CCBM has paid $2,500,000 (33%) of the principal amount of the
promissory note, RMG will release 25% of the undivided interest
in the coalbed methane properties purchased by CCBM; another 25%
when $5,000,000 (66.6%) of the principal is paid, and the
balance of the total 50% undivided interest when all of the
principal amount of $7,500,000 of the purchase price has been
paid.

Under the agreement with CCBM, CCBM also agreed to use its best
efforts to obtain financing to raise no less than $20 million to
be used by RMG to acquire more coalbed methane properties. CCBM
has not been successful in raising these funds within the terms
of the agreement due to market conditions for coalbed methane
gas. RMG has extended the time for CCBM to raise the funds to
June 30, 2003. If CCBM is unsuccessful in raising the funds to
purchase additional coalbed methane properties or for any reason
determines to discontinue participation in the exploration and
development of RMG's coalbed methane properties, RMG will
continue to seek equity or industry funding to develop its
properties.

The Company has shut down it mines and has discontinued its
mining and construction operations. It therefore has surplus
equipment and buildings from these operations. During fiscal
2001 and 2002, the Company sold the majority of its surplus
equipment. In addition, the Company owns various raw land which
is held as investment property or were intended to be used in
mining operations. These properties are no longer needed for the
core business of the Company and will be sold. The Company
currently has an offer to sell a piece of property in California
which was previously held for the development of a mill tailings
site for its subsidiary Sutter Gold Mining Company. This
property was never developed for a tailings site so has no
reclamation liability.

The Company continues to market home and mobile home lots in
southern Utah. These fully developed properties are not
important to the operations of the Company. The lots were a
portion of the assets that the Company acquired when it
purchased the Shootaring uranium mill and Ticaboo Townsite. The
Company has also listed the commercial operations at Ticaboo for
sale. It is the intention of management of the Company to sell
this commercial property. The Company also has determined to
sell the Shootaring uranium mill. It is the goal of the
Company's management to sell the mill as a unit but proposals to
sell the mill parts have also been considered. No firm proposal
is currently being considered on the mill.

To assist in financing the holding costs of the SGMC properties
(which are shut down), the Company developed a mine tour
business. After operating the mine tour business for
approximately one year, it was determined to lease out the tour
business. Proceeds under the lease agreement partially defray
the holding costs of the mine property. The Company is currently
discussing the potential of either a sale of the property to an
industry partner or a possible joint venture agreement to
operate the property. Equity financing will be required to
develop the mine and mill complex. A decision to further develop
the property at Sutter is contingent on the price of gold.

U.S. Energy currently have a $750,000 line of credit with a
commercial bank. As of May 31, 2002, this line of credit has
been drawn down by $200,000. The line of credit was to be
renewed in September of 2002. Due to the sale of mining
equipment, which was held as collateral for the line of credit,
the limit of the line of credit may be reduced. The Company also
has a $500,000 line of credit through its affiliate Plateau
Resources. This line of credit is for the development of the
Ticaboo Townsite in southern Utah. Plateau has drawn down
$300,000 of this financing facility which is repayable over 10
years. All payments on these lines of credit are current as of
January 30, 2003.

According to the independent auditing firm of Grant Thornton
LLP, in Denver, Colorado, "the Company has experienced recurring
losses from operations and has a substantial accumulated
deficit. These factors raise substantial doubt about the ability
of the Company to continue as a going concern."  This statement
was contained in the July 18, 2002 Auditor's Report to the Board
of Directors of U.S. Energy.


U.S. STEEL: Commences $200-Mill. Convertible Preferred Offering
---------------------------------------------------------------
United States Steel Corporation (NYSE: X) will offer publicly 4
million shares of Series B Mandatory Convertible Preferred
Shares (liquidation preference $50 per share). The company also
will grant the underwriters an over-allotment option to purchase
up to an additional 600,000 preferred shares. The Mandatory
Convertible Preferred Shares will be issued under U. S. Steel's
shelf registration. JPMorgan is serving as bookrunning manager
for the offering.

Proceeds from the offering will be used for general corporate
purposes, including funding working capital, financing potential
acquisitions, debt reduction and voluntary contributions to
employee benefit plans.

United States Steel Corporation is an integrated steel producer
with annual raw steelmaking capability of 17.8 million tons.
U. S. Steel is engaged in the production, sale and
transportation of sheet, plate, tin mill and tubular steel mill
products, coke, taconite pellets and coal; the management of
mineral resources; real estate development; and engineering and
consulting services in the United States; and, through its
subsidiary U. S. Steel Kosice, the production and sale of steel
products and coke in Central Europe.

Copies of the prospectus and prospectus supplement related to
the public offering may be obtained from J.P. Morgan Securities
Inc., Prospectus Department, One Chase Manhattan Plaza, New
York, NY 10081 (Telephone Number 212-552-5121).

                         *     *     *

As reported in Troubled Company Reporter's January 13, 2003
edition, Standard & Poor's placed its 'BB' corporate credit
rating on United States Steel Corp., on CreditWatch with
negative implications following the company's announcement that
it plans to acquire substantially all of bankrupt National Steel
Corp.'s steelmaking and finishing assets.

"Although the acquisition of National Steel would improve the
United States Steel's market position and result in annual
synergies of $170 million in two years", said Standard & Poor's
credit analyst Paul Vastola, "Standard & Poor's is concerned
that these benefits may be more than offset by weaker credit
protection measures given the increase in debt leverage,
declining steel prices and increasing pension costs at USS". Mr.
Vastola added that the acquisition of National and the expected
sale of United States Steel's more stable mining and
transportation assets to Apollo Management LP would be somewhat
detrimental to the company's business profile.


USEC INC: Red Ink Flowed in Stub Year and Fourth Quarter 2002
-------------------------------------------------------------
USEC Inc., (NYSE:USU) reported a loss of $14.7 million for the
six-month period ended December 31, 2002, compared to earnings
of $4.8 million in the same period last year. As previously
announced, the Company changed to a calendar fiscal year
effective January 1, 2003. This report covers the six-month stub
period ended December 31, 2002.

In comparison to the same six-month period last year and the
Company's previous guidance, earnings were reduced by lower SWU
and uranium sales volume, lower average SWU prices billed to
customers, accelerated spending on advanced technology,
increased SG&A, and an accrual for the environmental cleanup of
a bankrupt contractor's disposal facility. Additionally, the
lack of a definitized contract for cold standby services at the
Portsmouth plant continued to negatively impact earnings for
this period.

For the quarter ended December 31, 2002, USEC reported a loss of
$15.9 million, compared to earnings of $9.5 million in the same
quarter last year.

"Although we recorded a loss for the six-month period, we've
taken a number of steps to lower our costs, and we've begun to
invest more heavily for our future - the American Centrifuge
technology," said William H. Timbers, USEC president and chief
executive officer.

"These steps include lower, market-based prices that we
negotiated under the Russian Contract took effect in January and
will lower our purchase costs significantly. Second, we have
substantially reduced production costs and additional steps are
expected to be completed this year. Third, the market price for
our product has rebounded from the lower levels experienced when
our competitors were engaging in unfair pricing practices. We
are signing commitments for future deliveries at today's
improved prices. Fourth, we have a clear path for deploying an
advanced uranium enrichment technology that will ensure our
long-term competitive position. Our investment in the American
Centrifuge technology during the stub year was equivalent to $10
million in earnings. These fundamental changes should position
us to improve our profitability," Timbers said.

"Despite the significant downturn in the stock market during
2002, particularly in the energy sector, USEC's total return to
shareholders for the year continued to outperform all of the
major indexes," Timbers said. "We will continue our strategy for
reducing costs and investing in the future through advanced
uranium enrichment technology - the American Centrifuge
technology that will maintain USEC's leadership position in the
nuclear fuel industry."

                           Revenue

Revenue for the six-month period ended December 31, 2002, was
$707.8 million, compared to $860.6 million in the same period
last year. As anticipated, sales volume was lower as a result of
reduced commitments from domestic customers, and the timing and
movement of customer orders that is typical in the nuclear fuel
industry. The trend in recent years of lower average SWU prices
billed to customers continued during the six-month period. Most
of USEC's sales are under long-term contracts, and new contracts
being signed at today's higher prices will help to offset lower
priced contracts in USEC's backlog. Sales of natural uranium are
included in revenue and totaled $49.3 million for the six-month
period, compared to $84.8 million in the previous year. The
difference between the two periods was due to the timing of
deliveries.

Unit production costs improved by 13 percent reflecting more
efficient operations and a more rapid return to full production
following the summer of 2002. Cost of sales for the six-month
period declined by 16 percent due to lower SWU and uranium sales
volume, compared to the same period a year earlier. Cost of
sales was increased by an accrual for an environmental cleanup
caused by the bankruptcy of a contractor operating a depleted
uranium disposal facility. The gross profit margin was 4.6
percent compared to 6.3 percent in the same period last year.

Because USEC's customers place orders under their long-term
contracts generally on a 12- to 24-month cycle, quarterly or
six-month comparisons of USEC's financials are not necessarily
indicative of the Company's longer-term results.

At December 31, 2002, USEC's cash balance was $171.1 million.
For the quarter, cash flow from operating activities was $65.8
million. During the six-month period, net cash outflow from
operating activities amounted to $69.5 million. The Company has
no short-term debt or near-term plans to access its bank credit
facility, and the debt to total capitalization remained a modest
35 percent.

          Further Progress Made on Advanced Technology

USEC is moving forward in its plan to deploy the American
Centrifuge technology by the end of the decade. In December, the
Company selected its Portsmouth, Ohio plant site as the location
for its Lead Cascade centrifuge demonstration facility. The
Company will showcase USEC enhancements to U.S. centrifuge
uranium enrichment technology at a building that was built
specifically for centrifuge machines. Hundreds of centrifuges
operated in the building during the 1980s.

In addition, USEC leased two facilities in Oak Ridge, Tennessee
for testing and fabrication of the American Centrifuge. The
Company has begun refurbishing the buildings, which contain
centrifuge test equipment and related infrastructure. USEC has
fabricated a key component of the new centrifuge machines and
has begun testing it, which marks the completion of the second
in a series of USEC milestones. The next milestone is the
submission of a license application to the U.S. Nuclear
Regulatory Commission for the Lead Cascade. USEC expects to
submit the application in the first quarter of 2003.

       Production Costs Reduced, Labor Agreement Expired

As part of its continuing effort to reduce production costs at
its Paducah, Kentucky plant, USEC announced a voluntary early
retirement program in November 2002. USEC intends to reduce
employee headcount at the plant by 200 in early 2003.
Approximately 90 employees volunteered for the early retirement
program and the remaining workforce reduction will be
accomplished through layoffs this spring. In order to support
needed increases in productivity, the Company has taken a
variety of steps to increase operational efficiency and cost
effectiveness that will allow it to operate the Paducah plant
safely with fewer employees.

The labor agreement with the Paper, Allied-Industrial, Chemical
and Energy Workers International Union, Local 5-550 ("PACE")
expired on January 31, 2003. On January 31, after several weeks
of negotiations, the bargaining unit which represents
approximately 635 Paducah employees or about half of the Paducah
workforce voted not to accept the Company's latest offer for a
new contract. In the event that the bargaining unit decides to
strike, the Company will continue to operate its Paducah
facility at current levels under a production continuity plan,
which maintains safe operations by using trained employees. USEC
is prepared to continue negotiations with PACE to reach a new
contract. USEC does not expect any interruption of its product
deliveries to its customers.

              Lower-Priced Russian Purchases Begin

According to the terms of the Russian HEU Agreement, during
calendar 2002 USEC purchased 5.5 million SWU from its Russian
partner, Tenex. Under terms of the new pricing agreement that
went into effect January 1, 2003, USEC will pay Russia a
discounted market-based price established each year. The full
effect of the lower purchase costs on average inventory costs
and cost of sales will come in future periods due to the
Company's average inventory cost methodology and significant SWU
inventories.

                          Outlook

For calendar year 2003, the Company expects revenue to be
approximately $1.3 billion, including natural uranium sales of
about $110 million. Due to lower priced contracts signed in the
past, average prices billed to customers are expected to decline
about 1.5 percent compared to calendar 2002. USEC remains
focused on signing contracts at today's higher market prices to
reverse this decline.

USEC reiterates its calendar 2003 earnings guidance of $14 to
$16 million. This forecast reflects a continued emphasis on
controlling production costs and realizing lower purchase costs
from Russia that will improve the Company's gross margin. In
addition, USEC will continue its investment in advanced
technology that will position the Company to deploy the American
Centrifuge technology by the end of the decade.

USEC is investing a substantial portion of its profits in this
advanced uranium enrichment technology program that will
position the Company to deploy the world's most efficient
enrichment technology. These costs are being expensed for
accounting purposes through the demonstration phase of the
program. Therefore, USEC's earnings guidance for 2003 would be
approximately $20 million greater without this investment in the
American Centrifuge technology.

USEC expects quarterly earnings patterns in 2003 to be
approximately breakeven in the first quarter, roughly equal net
income in the second and fourth quarters, and a loss in the
third quarter. Earnings in 2003 will be driven by business
performance and are dependent upon a number of key factors,
including:

     -- Meeting targets for revenue; a substantial amount of the
        projected revenue is under contract.

     -- Continuing to reduce production costs at the Paducah      
        plant in a timely manner.

     -- Concluding the definization of the cold standby contract
        at the Portsmouth plant, including fee negotiations; and
        legislative approval of DOE funding levels for cold
        standby work.

     -- Maintaining costs according to plan.

Net cash provided by operating activities in 2003 is expected to
be in a range of $60 million to $80 million. USEC expects
capital spending to be in a range of $20 million to $25 million,
and anticipates ending 2003 with a cash balance of at least $150
million.

"During 2003 and over the next few years, USEC will make a
substantial investment in the American Centrifuge. It will be
several more years after that before we reap the fruits of these
investments, but we are confident the rewards will be worth the
investment of time and resources," Timbers said. "We are
committed to continue as a leader in the nuclear industry and to
our leadership role for the increasingly important Megatons to
Megawatts non-proliferation program. We believe in the nuclear
industry and its growing potential."

                    Annual Meeting Date Set

USEC's 2003 annual meeting of shareholders will be held on
April 28, 2003 in Bethesda, Maryland. In accordance with USEC's
bylaws, proposals intended to be brought before the annual
meeting of shareholders must be received by USEC no later than
February 13, 2003 in order to be considered timely. More
information on the time and location of the annual meeting will
be included in USEC's proxy statement to be mailed to
shareholders.

As previously reported, Standard & Poor's affirmed its double-
'B' corporate credit rating on uranium processor USEC Inc. The
outlook remains negative.

At the same time, Standard & Poor's assigned its triple-'B'-
minus bank loan rating, to the primary operating subsidiary of
USEC, United States Enrichment Corp's new $150 million senior
secured revolving credit facility due Sept. 2005. The bank loan
rating is two notches higher than the corporate credit rating.

Standard & Poor's said that it has also lowered its unsecured
debt rating on USEC to double-'B'-minus from double-'B',
reflecting the disadvantaged position the unsecured debt now
holds in the capital structure due to security granted to the
bank facility. Bethesda, Maryland-based USEC has $500 million in
total debt.


WARNACO: Emerges from Bankruptcy Proceeding Effective February 4
----------------------------------------------------------------
The Warnaco Group, Inc., announced that its Plan of
Reorganization became effective Tuesday and the Company has
formally emerged from Chapter 11 under the Bankruptcy Code. As
previously announced, the U.S. Bankruptcy Court for the Southern
District of New York confirmed the Company's Plan on January 16,
2003.

The Company said that in connection with its emergence from
Chapter 11, it closed on a $275 million exit financing facility.
The initial draw on the facility was approximately $39 million.
The exit financing will fund the cash distributions under the
Plan as well as Warnaco's ongoing operating needs. The Company's
emergence debt totals approximately $247 million, including the
initial $39 million draw, $201 million in second lien notes
issued primarily to the Company's pre-petition lenders and
approximately $7 million of capital leases. Warnaco's pre-
petition secured debt totaled approximately $2.4 billion.

Tony Alvarez, president and chief executive officer of Warnaco,
said, "We are extremely pleased to exit Chapter 11. [Tues]day,
Warnaco is beginning life as a new company with a solid capital
structure, greatly reduced debt, disciplined and improved
operations, a strengthened management team and an incredible
portfolio of brands. Warnaco today is a lean, strong competitor
with bright prospects. We are excited to now redirect our
attention from the turnaround toward growth and profitability."

Alvarez continued, "Warnaco's swift and successful turnaround is
the product of a close collaborative effort between the Company,
its Board of Directors and its creditor constituencies. I would
therefore like to personally thank the Board, the Steering
Committee of the Company's Pre-petition Secured Lenders and the
Official Committee of Unsecured Creditors for their support and
close partnership with me and our entire management team. Our
success is a reflection of the skill and commitment of those
involved and the collective desire to strengthen Warnaco."

As previously announced, the Company said that it continues the
search process for a permanent CEO and CFO, as well as
candidates for the Board of Directors. Until the search is
concluded and an orderly transition has occurred, Alvarez and
James P. Fogarty of Alvarez & Marsal will continue to serve as
CEO and CFO, respectively.

Warnaco also announced that it expects its new common stock will
begin trading on February 5, 2003 on the NASDAQ National Market
under the symbol WRNC.

The Warnaco Group, Inc., headquartered in New York, is a leading
manufacturer of intimate apparel, menswear, jeanswear, swimwear,
men's and women's sportswear, better dresses, fragrances and
accessories sold under such owned and licensed brands as
Warner's(R), Olga(R), Lejaby(R), Bodyslimmers(R), Chaps by Ralph
Lauren(R), Calvin Klein(R) men's and women's underwear, men's
accessories, and men's, women's, junior women's and children's
jeans, Speedo(R)/Authentic Fitness(R) men's, women's and
children's swimwear, sportswear and swimwear accessories, Polo
by Ralph Lauren(R) women's and girls' swimwear, Anne Cole
Collection(R), Cole of California(R) and Catalina(R) swimwear,
and A.B.S. (R) Women's sportswear and better dresses.


WARNACO: Stipulation Allows Setoff with U.S. Customs Service
------------------------------------------------------------
Prior to the Petition Date, certain of the The Warnaco Group
Debtors were, and continue to be, importers of various goods
associated with their manufacturing, distribution and retail
businesses.  Accordingly, the Debtors become obligated to pay
duties to the United States Customs Service at the time the
goods arrive at a Customs port.

In certain instances, post-entry action taken by the Debtors may
result in reduction of the duty amount found due by the Customs.
As an importer of merchandise from the Caribbean Basin Trade
Partner Act beneficiary countries, Warnaco initiated an
extensive analysis of its manufacturing and sourcing practices.  
Warnaco had determined that certain of its imported goods,
entered on or after October 1, 2000, for which it had tendered
duties at applicable General Column duty rate, qualified for
duty free treatment under CBTPA.  Accordingly, Warnaco filed
protests with Customs against the liquidation of the prepetition
Entries where duties were erroneously assessed at applicable
General Column 1 duty rate, and asked Customs to re-liquidate
the subject Entries and refund to Warnaco the overpaid duties.

As of November 29, 2002, the Customs has approved protests that
entitle Warnaco to receive refunds totaling $2,256,111 relating
to Entries occurring prior to the Petition Date.  Similarly,
Warnaco contends that it may receive approvals from Customs of
other protests that will entitle Warnaco to receive future
refunds relating to additional Entries occurring on or before
the Effective Date.

In addition, Authentic Fitness Products, Inc. is an importer of
goods that, under certain circumstances, are qualified for duty
free entry pursuant to the North American Free Trade Agreement.
In December 2001, AFPI received notification from a supplier
that NAFTA origin certificates for certain fabrics has been
issued in error.  Thereafter, AFPI initiated a review of all
Entries covering goods using the fabric.  On June 7, 2002, AFPI
notified the Customs of the issue and provided it with an
analysis of all additional duties resulting from this matter.  
According to AFPI, the underpayments can be divided into three
categories:

    (i) entries for which there is no additional duty owing
        because the Entries properly qualify for duty free entry
        under another tariff provision;

   (ii) 461 Entries occurring during the year immediately
        preceding the Petition Date and liquidated after the
        Petition Date that give rise to a priority tax claim.
        The duties and merchandise processing fees resulting
        from these Entries is $614,343 plus interest; and

  (iii) 1,544 Entries liquidating after the Petition Date that
        give rise to an administrative claim.  The duties and
        merchandise processing fees resulting from these entries
        is $1,554,626 plus interest.

Similarly, the Debtors also filed reconciliation entries related
to their entries of merchandise, which from time to time may
result in the assessment of liquidated damages by Customs.
Currently, Customs has not determined that the Debtors are
liable for any sum for certain prepetition debt other than what
is identified.  At this time, all other prepetition debt is
contingent or unliquidated.

A.B.S. Clothing Collection and, to the extent applicable, Calvin
Klein Jeanswear Company, also pay duties to Customs in the
ordinary course of its business, but currently, only CKJC might
owe Customs duties accruing prior to the Petition Date.

Customs has been withholding payment of the Refund on the ground
that the Debtors may owe Customs additional duties relating to
Entries occurring prior to the Petition Date that the Customs
would seek to set off against the Refunds.  On December 28,
2001, Customs filed four Proofs of Claim against ABS Clothing,
AFPI, Warnaco and CKJC on account of unliquidated or contingent
claims. On October 28, 2002, Customs Amended the AFPI Proof of
Claim.

On December 16, 2002, through an Omnibus Objection, the Debtors
objected to the first amended AFPI Proof of Claim, the CKJC
Proof of Claim and the Warnaco Proof of Claim.  On January 9,
2003, Customs amended the Warnaco Proof of Claim.

To avoid the expense and time required to litigate the issues,
the Parties agreed to enter into a stipulation containing these
terms:

A. The Stipulation will become effective on February 7, 2003;

B. The Debtors' objection to the three claims filed by Customs
   are withdrawn with prejudice and without costs or attorneys'
   fees to either the Debtors or Customs;

C. The Warnaco Proof of Claim is withdrawn;

D. The First Amended Warnaco Proof of Claim, the First Amended
   AFPI Proof of Claim, the CKJC Proof of Claim and the ABS
   Clothing Proof of Claim are allowed and will be satisfied
   pursuant to the terms of this Stipulation;

E. With respect to any Entry made or accruing to the Effective
   Date, amounts owing by one or more of the Debtors on a
   consolidated basis to Customs may be set off against the
   Refunds or any other pre-Effective Date debt owing by Customs
   to one or more of the Debtors on a consolidated basis;

F. With respect to any Entry made prior to the Effective Date
   that, prior to or after the Effective Date, becomes finally
   liquidated or deemed to be liquidated by operation of law
   pursuant to Section 1504 of the Customs Duties Code or
   becomes the subject of a "prior disclosure" or that results
   in liquidation damages beings assessed by Customs in
   connection with the reconciliation of entries pursuant to
   Section 1484(b) of the Customs Duties Code, and results in
   additional amounts owing to Customs by any of the Debtors,
   each of the Reorganized Debtors will be jointly and severally
   liable for the prompt payment in full of the Liquidated
   Indebtedness;

G. Customs will immediately set off $614,343 against the Refunds
   and apply the appropriate portion to pay duties and
   merchandise processing fees;

H. Customs will immediately apply the total amount already paid
   by Authentic Fitness by means of various payments received by
   Customs before the Effective Date to pay $1,554,626 in duties
   and merchandise processing fees plus interest due in
   connection with the 1,544 entries;

I. On the Effective Date, Customs will set off against the
   Refunds an amount equal to the difference between $1,554,626
   plus interest and the Prior Payments applied;

J. After Customs applies the Prior Payments and sets off against
   the Refunds, Customs will refund the remaining portion of the
   Refunds, if any, to the Debtors with interest pursuant to
   Section 1505 of the Customs Duties Code to the Friday prior
   to the Monday or Tuesday upon which each refund check is
   issued;

K. Customs will not withhold payment of any Future Refunds;
   however, should Customs inadvertently delay payment of any
   Future Refunds, the Debtors expressly agree that their sole
   and exclusive remedy will be to promptly notify Customs of
   what the Debtors believe to have been the nature and amount
   of the unpaid refund, and to receive the additional interest
   pursuant to Section 1505, if any, associated with the delay,
   if any, in effecting the refund.  However, Customs will not
   be liable for any interest accruing after an original check
   is either lost, stolen, destroyed in any way, or defaced so
   that the value to the owner is impaired, or the original
   check is undeliverable by the U.S. Postal Service due to the
   Debtors' failure to provide Customs with its current mailing
   address; and

L. The Debtors have represented that the only Custom bonds
   covering the Entries that are the subject of this Stipulation
   are issued by:

    (a) XL Reinsurance America Inc. in the face amount of
        $3,600,000 identified as Bond No. 390105402 covering the
        Period from June 4, 2001 through the present;

    (b) Great American Insurance Company in the face amount of
        $3,600,000 identified as Bond No. 390102915 covering the
        period from March 30,2 001 through June 3, 2001;

    (c) American Casualty Co. of Reading in the face amount of
        $3,600,000 identified as Bond No. 049704126 covering the
        period from December 15, 1997 through March 29, 2001;

    (d) Greenwich Insurance Company in the face amount of
        $750,000 identified as Bond No. 390111794 covering the
        period from December 19, 2001 through the present;

    (e) Washington International Insurance Company in the face
        amount of $750,000 identified as Bond No. 109755800
        covering the period from December 19, 1997 through
        December 18, 2001;

    (f) Greenwich Insurance Company in the face amount of
        $600,000 identified as Bond No. 39105004 covering the
        period from May 28, 2001 through the present;

    (g) Great American Insurance Company in the face amount of
        $600,000 identified as Bond No. 390102812 covering the
        period from April 12, 2001 through May 27, 2001; and

    (h) American Casualty Co. of Reading in the face amount of
        $600,000 identified as Bond No. 109604972 covering the
        period from February 9, 1996 through April 11, 2001.
        (Warnaco Bankruptcy News, Issue No. 42; Bankruptcy
        Creditors' Service, Inc., 609/392-0900)  


WHEREHOUSE: Seeking Court's Nod to Pay Critical Vendors' Claims
---------------------------------------------------------------
Wherehouse Entertainment, Inc., and its debtor-affiliates ask
for permission from the U.S. Bankruptcy Court for the District
of Delaware to pay the prepetition claims of their Critical
Vendors in the ordinary course of business.

The Debtors relate that they receive goods through various forms
of shipment, and much of the Debtors' pricing policies,
marketing strategies and fundamental business operations rely on
their ability to obtain and sell goods at competitive prices.
The sale of prerecorded music, videocassettes, DVDs, video
games, personal electronics, blank audiocassettes and
videocassettes and accessories and other items is the essence of
the Debtors' business.

The Debtors' ability to timely receive, distribute and return
goods depends on the maintenance of a successful and efficient
system of transportation, and any disruption of the delivery or
return of Retail Merchandise would have an immediate and
devastating impact on the Debtors' operations.  Likewise, any
disruption in the Debtors' ability to sell Retail Merchandise
would have an equally immediate and devastating impact on the
Debtors' operations.  Thus, the Debtors' business operations and
the success of their reorganization depends on the maintenance
of reliable and efficient transportation and sale processing
systems for Retail Merchandise, and these two related and
important systems involve the use of the Common Carriers and
Sales and Shipping Processors.

The Debtors have identified a core group of Common Carriers that
consists of, without limitation, Dart International, United
Parcel Service, USF Reddaway, Pacific Transportation, DI-IE/DLS,
APDS, Special Dispatch L.A., Special Distribution/Houston, Gold
Coast and Pilot Air. The Debtors have determined that each of
the Common Carriers is absolutely necessary to the continued
shipping, delivery and return of goods used or sold in the
ordinary course of the Debtors' business.

The Debtors have also identified a core group of Sales and
Shipping Processors that consist of Omega Business Products, a
supplier of unique labels specifically produced for the Debtors'
inventory and equipment and used in the shipping and transport
of such goods, and NDC, a credit card and check processor that
provides all of the sale processing services for the Debtors'
sale of Retail Merchandise. The Debtors have determined that the
services of Omega Business Products and NDC are absolutely
necessary to the continued shipping and sales of Retail
Merchandise, and without their services the Debtors will be
unable to timely ship goods or process sales of Retail
Merchandise that involve credit card and check purchases which
are a substantial source of payment for all of the Debtors'
retail sales.

The Debtors disclose that their Retail Merchandise being shipped
is currently valued at $37.8 million.  The total estimated
amount owed to all Common Carriers and the maximum amount
required to obtain or deliver the Retail Merchandise is
approximately $425,000.  Additionally, the total estimated
amount owed to all Sales and Shipping Processors for shipping
and sales processing services is approximately $275,000.

Clearly, the value of the Retail Merchandise in the possession
of the Common Carriers and the potential harm to the Debtors'
business if the goods are not released, exceeds the amount of
such Shipping Charges and Sales and Shipping Processor Charges.

Accordingly, the Debtors want the Court to give them authority
to make certain payments to the Common Carriers and Sales and
Shipping Processors as the Debtors determine in their business,
judgment that are necessary or appropriate. The Debtors
anticipate that such payments shall not exceed in the aggregate
amount of $700,000.

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


WKI HOLDING: S&P Rates Sr. Secured & Subordinated Debt at B/CCC+
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to houseware manufacturer and marketer WKI Holding
Co. Inc.

At the same time, Standard & Poor's assigned its 'B' senior
secured debt rating to the company's proposed $315 million
senior secured credit facilities and its 'CCC+' subordinated
debt rating to the company's proposed $123 million senior
subordinated notes due 2010. The ratings are based on
preliminary documentation, and are subject to review once final
documentation is received. Proceeds from the bank loan and
subordinated notes will be used as part of the exit financing
under the company's November 15, 2002, proposed plan of
reorganization.

The outlook is stable. Pro forma for the reorganization, Reston,
Virginia-based WKI would have about $385 million of total debt
outstanding at December 31, 2002.

"The ratings reflect WKI's significant debt leverage,
participation in the highly competitive housewares industry,
customer concentration risk, seasonality, and the potential
lingering impact of its bankruptcy filing on its relationships
with customers and suppliers. Somewhat mitigating these risks
are the company's solid market position in the mature housewares
industry and portfolio of recognized brands," stated Standard &
Poor's credit analyst David Kang.

Following two major acquisitions in 1999, WKI had significant
debt, integration issues (supply chain management and plant
rationalization), and difficulties with implementing its
corporate wide computer system. While the company attempted
several operating restructuring initiatives, the firm was
hampered by the high debt servicing requirements and the weak
economy. In May 2002, the company filed for bankruptcy
protection under Chapter 11. WKI emerged from bankruptcy on Jan.
31, 2003, and its previous bank lenders will now own about 80%
of the company.

With major restructuring activities behind them, the company's
new management team is focused on developing strategic internal-
growth opportunities, as well as improving customer service
levels and operating efficiencies. However, the company faces
significant near-term challenges, particularly the potential
impact of the company's recent bankruptcy filing on its
relationships with key customers and suppliers.

Pro forma for the reorganization, WKI will be highly leveraged.
Lease-adjusted EBITDA coverage of interest expense will be about
2.8x and lease-adjusted total debt to EBITDA will be about 4.7x
for fiscal 2002. Standard & Poor's expects credit protection
measures to improve in 2003 due to better profitability, with
lease-adjusted EBITDA coverage of interest of about 3x and
lease-adjusted total debt to EBITDA in the 4 to 4.5x range.

Liquidity should be adequate for the rating given the company's
availability under the proposed revolving credit facility.
However, WKI's liquidity position fluctuates throughout the year
given the business' seasonal nature and the high concentration
of revenues and operating profits in the second half of the
year. Borrowing needs typically peak during the third fiscal
quarter at which time liquidity under the revolving facility
will be limited.

Standard & Poor's expects WKI to maintain credit protection
measures appropriate for the rating.


WORLD KITCHEN: Successfully Emerges from Chapter 11 Proceeding
--------------------------------------------------------------
WKI Holding Company, Inc. (WKI), which operates principally
through its subsidiary World Kitchen, Inc., completed its
financial restructuring and emerged from chapter 11 bankruptcy
protection. WKI and all of its direct and indirect wholly owned
U.S. subsidiaries filed voluntary petitions for reorganization
under chapter 11 of the United States Bankruptcy Code on May 31,
2002, and the Court approved WKI's Plan of Reorganization on
December 23, 2002. WKI's funded debt has now been reduced by
more than 50 percent, providing the Company with increased
financial flexibility to implement its business strategy.

James A. Sharman, WKI's president and chief executive officer,
said: "We are proud to have successfully completed our
restructuring through the Chapter 11 process in just eight short
months. Most important, we significantly reduced our debt,
thereby strengthening our balance sheet and ability to invest in
our brands and achieve our business objectives. As a result, our
Company will continue to provide leading-edge brands and
products to our customers, be a reliable partner for our
suppliers and be an even better place for our employees to build
a career. The success of our financial reorganization is a
credit to many people -- both within the company and outside --
who worked extremely hard and demonstrated considerable
willingness to cooperate in order to achieve a positive outcome.
We are grateful for their efforts and look forward to a bright
future for World Kitchen."

WKI also announced the appointment of a new Board of Directors
that will lead the reorganized company in partnership with the
senior management team. The Board of Directors is comprised of:

     -- John L. Mariotti (Chairman), president and chief
        executive officer of The Enterprise Group;

     -- David R. Jessick (Audit Committee Chair), former senior
        executive vice president and chief administrative
        officer of Rite Aid Corporation;

     -- James R. Craigie, president and chief executive officer
        of Spalding Sports Worldwide;

     -- C. Robert Kidder, chairman and chief executive officer
        of Borden Chemical, Inc.;

     -- Terry R. Peets, former chairman of Bruno's Supermarkets,
        Inc.;

     -- William E. Redmond, Jr., chairman, president and chief
        executive officer of Garden Way Incorporated; and

     -- James A. Sharman, president and chief executive officer
        of WKI.

Mr. Mariotti said: "This is a new beginning for World Kitchen.
World Kitchen has emerged from chapter 11 as a much stronger
company, prepared to enhance its well-known brands by serving
its customers and delighting its consumers both in the U.S. and
around the world. I look forward to working with Jim Sharman,
his management team, the new Board of Directors and everyone at
World Kitchen to build value for all of the Company's
stakeholders."

World Kitchen's principal products are glass, glass ceramic and
metal cookware, bakeware, tabletop products and cutlery sold
under well-known brands including CorningWare(R), Pyrex(R),
Corelle(R), Revere(R), EKCO(R), Baker's Secret(R), Chicago
Cutlery(R) and OXO(R). The Company currently employs
approximately 3,200 people and has major manufacturing and
distribution operations in the United States, Canada, South
America and Asia-Pacific regions.


WORLDCOM INC: Initiates Action to Reduce Cost Structure by $2.5B
----------------------------------------------------------------
WorldCom, Inc., (WCOEQ, MCWEQ) achieved a key milestone in its
100-Day Plan announced three weeks ago. As promised, the company
laid out its cost reduction plan that will reduce line costs by
an additional 12.5 percent and sales, general and administrative
(SG&A) expense by 13 percent. Once completed, these actions will
bring annualized cost savings to $2.5 billion. The plan ensures
customers will continue to experience the same level of "best in
class" service they have come to expect.

"This plan is an important milestone in our efforts to
restructure WorldCom, file our plan of reorganization in April
and emerge from Chapter 11 protection later this year," said
Michael Capellas, WorldCom chairman and CEO. "The steps we are
taking will not only produce significant savings for the company
but will benefit our customers by optimizing network performance
and eliminating redundancies. We continue to have the best
service levels in the industry."

Highlights of WorldCom's 2003 cost reduction plan include:

     * Line cost savings of $1.5 billion, primarily generated
through network integration and efficiencies, improved
technologies, and the renegotiation of more than 2,600 supplier
contracts.

     * Facility consolidation, reducing total square footage by
8.7 million square feet -- a 26 percent reduction. The company
will maintain a major presence in Alpharetta, Ga.; Ashburn, Va.;
Cary, NC; Clinton, Miss.; Denver and Colorado Springs, Co.; Hong
Kong; Reading, UK; Richardson, Tex.; and Tulsa, Okla., and
continue to have a significant presence throughout the world.

     * Workforce reduction of 5,000 positions, primarily from
corporate and administrative functions. The reduction does not
affect the company's quota-bearing sales force or essential
Operations & Technology functions.

"While we are moving aggressively and responsibly to reduce our
line costs and consolidate facilities, it is also necessary for
us to reduce our workforce to meet the difficult demands of our
industry and the global economy as a whole," said Capellas. "A
workforce reduction is always a difficult decision, but we are
confident that our overall cost reduction plan will help us
emerge from Chapter 11 and make us more competitive in the
marketplace in the long run."

WorldCom, Inc., (WCOEQ, MCWEQ) is a leading global
communications provider, delivering advanced communications
connectivity to businesses, governments and consumers. With one
of the world's most expansive, wholly-owned data networks,
WorldCom provides innovative data and Internet services that are
the foundation for commerce and communications in today's
market. With products such as The Neighborhood built by MCI and
the award-winning WorldCom Connection -- the industry's first
comprehensive managed voice and data network service -- WorldCom
continues to lead the industry in converged communications
solutions for the 21st century. For more information, go to
http://www.worldcom.com

Worldcom Inc.'s 8.000% bonds due 2006 (WCOE06USR2) are trading
at about 23 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCOE06USR2
for real-time bond pricing.


W.R. GRACE: Wants Plan Filing Exclusivity Extended to August 1
--------------------------------------------------------------
For the fourth time, W.R. Grace & Co., and its debtor-affiliates
ask Judge Fitzgerald to extend their exclusive period to file a
plan of reorganization until August 1, 2003 and to solicit
acceptances of that plan until October 1, 2003.

David W. Carickhoff, Esq., at Pachulski Stang Ziehl Young &
Jones, in Wilmington, Delaware, reminds the Court that these
Chapter 11 cases were filed as a result of mounting asbestos-
related litigation liabilities rather than as a result of
difficulties with the Debtors' core businesses.  Defining these
liabilities, then providing for payment of valid claims on a
basis that preserves the Debtors' core business operations is a
complex process.  Given its nature, this process could require
significant litigation, which will take time.

Considering the strength of their core businesses, the Debtors
contend that they will be able to file a viable plan of
reorganization in due course as the procedures for addressing
the asbestos-related claims unfold.  Amid intense opposition
from the Asbestos Committees over the process to be employed,
the Debtors have put into place a case management schedule that
will establish a system to efficiently manage the adjudication
of the myriad of asbestos-related claims against their estates.

A further extension of the Debtors' exclusive periods will not
harm creditors and other parties-in-interest, Mr. Carickhoff
assures the Court.  Indeed, Mr. Carickhoff says, a termination
of the exclusive periods would defeat the very purpose behind
Section 1121 of the Bankruptcy Code, which is to afford the
Debtors a meaningful and reasonable opportunity to negotiate
with their creditors and to then propose and confirm a
consensual plan of reorganization.  Mr. Carickhoff contends that
termination of the exclusive periods would signal a loss of
confidence in the Debtors and their reorganization efforts.  
"The Debtors' core businesses would deteriorate, value would
evaporate, and everybody would lose," Mr. Carickhoff says.

Mr. Carickhoff notes that extensions of the exclusive periods
are typical in multi-billion-dollar Chapter 11 cases in
Delaware, like In re Harnischfeger Industries, Inc., Bankr. Case
No. 99-2171 (PJW) (multiple extensions totaling 20 months); In
re Loewen Group Int'l, Inc., Bankr. Case. No. 99-1244 (PJW)
(exclusive periods extended for 19 months); In re Montgomery
Ward Holding Corp., Bankr. Case No. 97-1409 (PJW) (exclusive
periods extended for 21 months); and In re Trans World Airlines,
Inc., Bankr. Case No. 02-115 (HSB) (exclusivity extended for 20
months).

By application of Del.Bankr.L.R. 9006-2, the Debtors' exclusive
period to file a plan of reorganization is automatically
extended through the conclusion of the February 24, 2003 hearing
on the Debtors' request. (W.R. Grace Bankruptcy News, Issue No.
36; Bankruptcy Creditors' Service, Inc., 609/392-0900)


* Kirkpatrick Brings-In Martin Allen as New Partner in Boston
-------------------------------------------------------------
The national law firm of Kirkpatrick & Lockhart LLP announced
the expansion of its Boston office with the addition of Martin
Allen as a partner in the business law and tax area.  Mr. Allen,
formerly of Hill & Barlow joins his former Hill & Barlow
colleagues Michael S. Greco, Thomas A. Hickey III, Nicholas S.
Hodge and Michael Sacco at K&L.

Mr. Allen maintains a practice area concentrated in tax and
business law with extensive experience in most areas of federal
and state income taxation, including acquisitions and
dispositions of business in taxable and tax-free transactions,
private equity investments, bankruptcy reorganizations and
workouts, business and personal tax planning and defense and
administrative appeals of tax audits.

Mr. Allen is a member of the Boston Tax Forum, Boston Bar
Association and American Bar Association. Since 1986 he has been
an Adjunct Professor of Law in the Graduate Tax (LL.M.) Program
at Boston University Law School, and throughout his professional
career has published numerous articles and served as a speaker
and lecturer on a variety of issues involving tax and taxation.

A member of the bars of Massachusetts and Illinois, Mr. Allen.
received his B.A. in history, with honors, from Northwestern
University in 1969, and his J.D. from Columbia University Law
School in 1972.

Mark E. Haddad, K&L Boston's administrative partner noted, "We
are delighted that Martin has joined K&L. Hiss extensive
knowledge and experience in the area of taxation provide
additional and needed support to the increasingly complex
business transactions we're handling for our corporate clients
in Boston, and enhance the broad range of tax services K&L
provides to individuals and businesses throughout the country. "

Kirkpatrick & Lockhart is a national law firm with approximately
700 lawyers in Boston, Dallas, Harrisburg, Los Angeles, Miami,
Newark, New York, Pittsburgh, San Francisco and Washington. K&L
serves a dynamic and growing clientele in regional, national and
international markets, currently representing over half of the
Fortune 500.


* Meetings, Conferences and Seminars
------------------------------------
February 20-21, 2003
   AMERICAN CONFERENCE INSTITUTE
      Commercial Loans Workouts
         Marriott East Side, New York
            Contact: 1-888-224-2480 or 1-877-927-1563
                         http://www.americanconference.com

February 22-25, 2003
   NORTON INSTITUTES ON BANKRUPTCY LAW
      Litigation Institute I
         Marriott Hotel, Park City, Utah
            Contact: 1-770-535-7722 or
                     http://www.nortoninstitutes.org

February 25-26, 2003
   EURO LEGAL
      Run-Off and Commutations
         Radisson Edwardian Hampshire Hotel, London UK
            Contact: +44-20-7878-6897 or
                     http://www.www.euro-legal.co.uk

March 6-7, 2003
   ALI-ABA
      Corporate Mergers and Acquisitions
         San Francisco
            Contact: 1-800-CLE-NEWS or http://www.ali-aba.org

March 20-21, 2003
   AMERICAN CONFERENCE INSTITUTE
      Outsourcing In Financial Services
         Marriott East Side, New York
            Contact: 1-888-224-2480 or 1-877-927-1563
                     http://www.americanconference.com

March 27-30, 2003
   NORTON INSTITUTES ON BANKRUPTCY LAW
      Litigation Institute II
         Flamingo Hilton, Las Vegas, Nevada
            Contact: 1-770-535-7722
                     or http://www.nortoninstitutes.org

March 31 - April 01, 2003
    RENAISSANCE AMERICAN MANAGEMENT, INC. & BEARD GROUP
       Healthcare Transactions: Successful Strategies for
          Mergers, Acquisitions, Divestitures and Restructurings
               The Fairmont Hotel Chicago
                   Contact: 1-800-726-2524 or fax 903-592-5168
                            or ram@ballistic.com

April 10-11, 2003
   AMERICAN CONFERENCE INSTITUTE
      Predaotry Lending
         The Westin Grand Bohemian, Florida
            Contact: 1-888-224-2480 or 1-877-927-1563
                     http://www.americanconference.com

April 10-13, 2003
   AMERICAN BANKRUPTCY INSTITUTE
      Annual Spring Meeting
         Grand Hyatt, Washington, D.C.
            Contact: 1-703-739-0800 or http://www.abiworld.org

April 28-29, 2003
   AMERICAN CONFERENCE INSTITUTE
      Credit Derivatives
         Waldorf Astoria, New York
            Contact: 1-888-224-2480 or 1-877-927-1563
                     http://www.americanconference.com

May 1-3, 2003
   ALI-ABA
      Chapter 11 Business Organizations
         New Orleans
            Contact: 1-800-CLE-NEWS or http://www.ali-aba.org

May 8-10, 2003
   ALI-ABA
      Fundamentals of Bankruptcy Law
         Seattle
            Contact: 1-800-CLE-NEWS or http://www.ali-aba.org

June 19-20, 2003
     RENAISSANCE AMERICAN MANAGEMENT, INC. & BEARD GROUP
          Corporate Reorganizations: Successful Strategies for
              Restructuring Troubled Companies
                 The Fairmont Hotel Chicago
                    Contact: 1-800-726-2524 or fax 903-592-5168
                             or ram@ballistic.com

June 26-29, 2003
   NORTON INSTITUTES ON BANKRUPTCY LAW
      Western Mountains, Advanced Bankruptcy Law
         Jackson Lake Lodge, Jackson Hole, Wyoming
            Contact: 1-770-535-7722
                         or http://www.nortoninstitutes.org

July 10-12, 2003
   ALI-ABA
      Partnerships, LLCs, and LLPs: Uniform Acts, Taxation,
         Drafting, Securities, and Bankruptcy
            Eldorado Hotel, Santa Fe, New Mexico
               Contact: 1-800-CLE-NEWS or http://www.ali-aba.org

December 3-7, 2003
   AMERICAN BANKRUPTCY INSTITUTE
      Winter Leadership Conference
         La Quinta, La Quinta, California
            Contact: 1-703-739-0800 or http://www.abiworld.org

April 15-18, 2004
   AMERICAN BANKRUPTCY INSTITUTE
      Annual Spring Meeting
         J.W. Marriott, Washington, D.C.
            Contact: 1-703-739-0800 or http://www.abiworld.org

December 2-4, 2004
   AMERICAN BANKRUPTCY INSTITUTE
      Winter Leadership Conference
         Marriott's Camelback Inn, Scottsdale, AZ
            Contact: 1-703-739-0800 or http://www.abiworld.org

The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday.  Submissions via
e-mail to conferences@bankrupt.com are encouraged.  

                          *********

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

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

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

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

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

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

                          *********

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

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

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

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

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

                *** End of Transmission ***