TCR_Public/030311.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Tuesday, March 11, 2003, Vol. 7, No. 49    


ACANDS INC: Lawrence Fitzpatrick Taps Young Conaway as Counsel
ADELPHIA BUSINESS: Asks Court to Clear PHT Settlement Agreement
ADELPHIA COMMS: Asks Court to Declare Global Cable Violated Stay
ADEPT TECHNOLOGY: Fails to Comply with Nasdaq Listing Guidelines
AMERICAN SKIING: Continues Real Estate Debt Workout Discussions

AMR CORP.: Reuters Says Carrier's Looking for DIP Financing
AMRESCO: S&P Affirms Low-B Ratings on 4 P-T Certificate Classes
ANC RENTAL: Wants Court Approval of Postpetition Surety Bonding
ARMSTRONG: Disclosure Statement Hearing to Continue on April 4
BRANDAID MARKETING: External Auditors Issue Going Concern Note

BRIDGE INFO: Plan Administrator Wins Nod for Tolling Agreements
BUDGET GROUP: Court OKs Sale of EMEA Operations to Avis for $20M
CABLEVISION SYSTEMS: Declares Quarterly Preferred Dividend
CADENCE RESOURCES: Williams & Webster Airs Going Concern Doubt
COMPUTER SUPPORT: Court Approves Conversion to Chapter 7

CONSECO FINANCE: Court Okays Debtor-Affiliates' Inclusion in DIP
CONSECO: TOPrS Panel Taps Fox-Pitt Kelton for Valuation Services
CORAM HEALTHCARE: Daniel Crowley Will Go . . . on March 31
COVANTA ENERGY: Wants to Extend and Amend DIP Credit Facility
CTC COMMUNICATIONS: Plan Filing Exclusivity Extended Until May 1

DENBURY RESOURCES: Texas Pacific Sells 2.5 Million Shares
DICE INC: Wants Nod to Hire White & Case as Special Counsel
DOMAN INDUSTRIES: Canadian Court Rejects Proposed CCAA Plan
DYNEGY: Fitch Downgrades Senior Debt Ratings To CCC+ From B
EAGLE FOOD: Congress Financial Extends Limited Waiver Agreement

ECHOSTAR COMMS: Dec. 31 Shareholder Deficit Widens to $1.2 Bill.
ENCOMPASS SERVICES: Honoring Postpetition Insurance Obligations
ENRON CORP: Examiner Neal Batson Brings-In 8 Contract Attorneys
EOTT ENERGY: US Trustee Amends Creditors' Committee Membership
EPICEDGE INC: Consents to Delisting from American Stock Exchange

FARMERS HOME: Counterparty & Fin'l Strength Ratings Cut to Bpi
GLIATECH INC: Selling Anti-Inflammatory Program to Solentix
GLOBALSTAR LP: Receives Final Approval of $10-Mil. DIP Financing
GOODYEAR TIRE: S&P Puts BB- Sr. Unsec. Debt Rating on Watch Neg.
HEXCEL CORP: Prices $125-Million Senior Secured Note Offering

HIGHLANDS INSURANCE: Plan Confirmation Hearing Convenes Mar. 17
INBUSINESS SOLUTIONS: Commences $2-Mil. Equity Private Placement
INDYMAC MH: Fitch Further Downgrades Four Junk-Rated P-T Certs.
INTEGRATED HEALTH: Wolfe, et al. Ask Court to Apportion Benefits
INTERPOOL INC: Fitch Affirms BB+ Preferred Share Rating

INTERPUBLIC GROUP: S&P Drops L-T & S-T Credit Ratings to BB+/B
IT GROUP: Committee Hires AlixPartners LLC as Claims Specialist
KAISER ALUMINUM: Court Okays $65-Mill. Kaiser Center Asset Sale
KMART CORP: Says Has Evidence that Ex-CEO Conaway Mislead Board
KNOWLEDGE LEARNING: S&P Assigns B+ Credit & Bank Loan Ratings

LA QUINTA: S&P Revises Outlook over Weak Credit Measure Concerns
LERNOUT: Dictaphone Suspends SEC Reporting on 11.75% Notes
LONGVIEW ALUMINUM: Demands Retraction from Steven Wright of BPA
LTV CORP: Court Okays Copperweld's Insurance Policies with AIG
MEDICALCV INC: Fails to Maintain Nasdaq Listing Requirements

MIDWEST EXPRESS: Outlines Plan to Return to Profitability
MILLENNIUM CHEMS: S&P Cuts Rating Due to Fin'l Profile Concerns
MORTON HOLDINGS: Court Fixes March 31 Admin. Claims Bar Date
MUMA SERVICES: Trustee Wants Critical Vendor Payments Returned
NATIONAL CENTURY: Settles Claims Dispute with OrthoRehab Inc.

NAT'L STEEL: Time Period for New Labor Pact Extended to March 26
NATIONAL STEEL: Wins Nod to Sell Nat'l Robinson Interest for $3M
NATIONSRENT INC: Wants Nod to Access $250-Million Exit Financing
NEON SYSTEMS: Louis R. Woodhill Resigns as President and CEO
NTELOS INC: Says 2002 Operating Cash Flows Exceed Guidance Range

NTELOS INC: Nasdaq to Knock-Off Shares Effective March 13, 2003
OWENS CORNING: Has Until Friday to File Disclosure Statement
P-COM INC: Commences Trading on OTCBB Effective March 10, 2003
PACIFIC GAS: Mar. 10 Settlement Conference with Judge Newsome
PACIFIC MAGTRON: Fails to Comply with Nasdaq Listing Guidelines

PEOPLES HEALTH PLAN: S&P Assigns R Financial Strength Rating
PETSMART: Improving Credit Measures Prompt S&P to Revise Outlook
POTLATCH CORP: Board Declares Regular Quarterly Dividend
RFS ECUSTA: Court Okays CVH Enterprises as Industry Consultants
SAVANNAH II/CORVUS: Fitch Keeps Watch on Low-B and Junk Ratings

SIRIUS SATELLITE: S&P Drops Sr. Ratings to D After Debt Exchange
SORRENTO NETWORKS: Executes Definitive Restructuring Agreement
SPORTS HEROES: Chapter 11 Case is Dismissed
SUPERIOR TELECOM: BSI Appointed as Noticing and Claims Agent
THOMAS GROUP: Dec. 31 Working Capital Deficit Stands at $700,000

TOKHEIM: Closes Sale of North American Assets to First Reserve
ULLICO INC: A.M. Best Ratchets Fin'l Strength Ratings Down to B-
UNITED AIRLINES: Says ESOP's Sunset Provisions Were Triggered
UNITED AIRLINES: Court Approves KPMG as Committee's Accountants
US AIRWAYS: Makes $64.2-Million Payments on Airbus Aircraft

U.S. ENERGY: Grant Thornton Expresses Going Concern Doubt
VANTAGEMED CORP: Dec. 31 Working Capital Deficit Tops $1.1 Mill.
WATERWAYS CRUISES: Case Summary & Largest Unsecured Creditors
WHEELING-PITTSBURGH: Calls PBGC Plan Termination "Premature"
WHEELING-PITTSBURGH: Exclusive Solicitation Extended Until May 9

WIDECOM GROUP: Zafar Husain Doubts Ability to Continue Operation
WIRE ROPE CORP: Enters LOI to Sell Assets to KPS Special
WORLDCOM INC: Court OKs Claims & Interest Transfer Restriction
WORLDPORT COMMS: Completes Repurchase of Preferred Shares
WORLDPORT: Commences Cash Tender Offer for Outstanding Shares

W.R. GRACE: DK Wants to Trade Bank Debt & Serve on Committee
YORK FUNDING LTD: S&P Lowers Ratings on 3 Series 1998-1 Classes
XCEL: Prices 4.875% Debt Financing for Public Service of Colo.
XETEL CORPORATION: Committee Brings-In Cox & Smith as Counsel

* Large Companies with Insolvent Balance Sheets


ACANDS INC: Lawrence Fitzpatrick Taps Young Conaway as Counsel
Prior to the Petition Date, ACandS, Inc., contacted Lawrence
Fitzpatrick about the possibility of serving as the legal
representative for future asbestos claimants in connection with
negotiations surrounding a potential prepackaged plan of
reorganization.  Mr. Fitzpatrick agreed to serve as the futures

In that role, Lawrence Fitzpatrick retained Young Conaway as his
counsel to assist in the performance of his duties as the
Futures Representative.  The Debtor paid Young Conaway a $75,000
retainer as security for the payment of professional fees and
expenses.  Young Conaway earned $53,712 of that retainer prior
to the Petition Date.

The services that Young Conaway will perform will enable the
Futures Representative to execute his duties and
responsibilities in connection with these chapter 11 cases.  
Specifically, Young Conaway will:

  a) provide legal advice with respect to the Futures
     Representative's powers and duties as Futures
     Representative for the Future Claimants;

  b) take any and all actions necessary to protect and maximize
     the value of the Debtor's estates for the purpose of making
     distributions to Future Claimants and to represent the
     Futures Representative in connection with negotiating,
     formulating, drafting, confirming and implementing a
     plan of reorganization, and performing such other functions
     as are set forth in section 1103(c) of the Bankruptcy Code
     or as are reasonably necessary to effectively represent the
     interests of the Future Claimants;

  c) prepare, on behalf of the Futures Representative, necessary
     applications, motions, objections, answers, orders, reports
     and other legal papers in connection with the
     administration of the estates in these cases; and

  d) perform any other legal services and other support
     requested by the Futures Representative in connection with
     these chapter 11 cases.

The attorneys and paralegal presently designated to represent
the Futures Representative and their current standard hourly
rates are:

     James L. Patton, Jr.   Partner       $475 per hour
     Edwin J. Harmn         Associate     $330 per hour
     Joseph M. Barry        Associate     $220 per hour
     Timothy P. Cairns      Associate     $180 per hour
     Stephanie Peterson     Paralegal     $110 per hour

AcandS, Inc., was an insulation contracting company, primarily
engaged in the installation of thermal and mechanical
insulation.  In later years, the Debtor also performed a
significant amount of asbestos abatement and other environmental
remediation work.  The Company filed for chapter 11 protection
on September 16, 2002 (Bankr. Del. Case No. 02-12687).
Laura Davis Jones, Esq., at Pachulski Stang Ziehl Young Jones &
Weintraub represents the Debtor in its restructuring efforts.  
When the Company filed for protection from its creditors, it
listed estimated debts and assets of over $100 million.

ADELPHIA BUSINESS: Asks Court to Clear PHT Settlement Agreement
Adelphia Business Solutions, Inc., and its debtor-affiliates ask
the Court to approve a compromise and settlement by and among
ABIZ of Pennsylvania, PHT Holdings LLC, PECO Energy Company and
PECO Hyperion Telecommunications, a Pennsylvania general
partnership.  PHT Partners alleges they've received
substantially less money from the Partnership than they're
entitled to receive under the Partnership Agreement, in
contravention of the allocation provisions set forth in the
Partnership Agreement.

According to Judy G.Z. Liu, Esq., at Weil Gotshal & Manges LLP,
in New York, ABIZ Pennsylvania and PECO formed a Partnership
under a certain Partnership Agreement dated October 9, 1995.
ABIZ Pennsylvania and PECO each originally owned a 50% interest
in the Partnership.  Out of its 50% interest in the Partnership,
PECO transferred 49% to PHT, one of its affiliates.  PECO
continues to hold a 1% interest in the Partnership.  ABIZ
Pennsylvania continues to hold its original 50% interest in the

The Partnership is a competitive local exchange carrier,
providing local and long distance, point-to-point voice and data
communications, Internet access and enhanced data services for
businesses and institutions in Eastern Pennsylvania.  The
Partnership utilizes a large-scale, fiber-optic cable-based
network that currently extends over 700 miles and is connected
to major long-distance carriers and local businesses.

Ms. Liu relates that ABIZ Pennsylvania, the PHT Partners and the
Partnership want to remedy the Disproportionate Distributions,
and settle their ongoing disputes by permitting the PHT Partners
to receive certain priority payments from the Partnership; and
have entered into a Settlement Agreement dated December 30,
2002. In light of the Disproportionate Distributions, the
Settlement Agreement provides that the PHT Partners will be
entitled to receive certain specified amounts, paid either by
the Partnership or by ABIZ Pennsylvania before ABIZ Pennsylvania
receives any further distributions of any kind from the
Partnership.  Based on the terms of the Settlement Agreement, as
of February 24, 2003:

  (a) the amount of the Partnership Repayment Amount is
      $17,429,723 -- the original aggregate principal amount,
      together with interest accrued through April 30, 2002, had
      been $41,712,718; and

  (b) the amount of the ABIZ Pennsylvania Repayment Amount is
      $8,714,861 -- the original aggregate principal amount,
      together with interest accrued thereon through April 30,
      2002, had been $20,856,359.

As provided in the Settlement Agreement, any payment by the
Partnership of any portion of the Partnership Repayment Amount
also would entitle ABIZ Pennsylvania to a corresponding credit -
equal to one-half of the amount so paid by the Partnership --
against the Repayment Amount.  In addition, any payment by ABIZ
Pennsylvania of any portion of the Repayment Amount also would
entitle the Partnership to a corresponding credit -- equal to
twice the amount so paid by ABIZ Pennsylvania -- against the
Partnership Repayment Amount.  Interest accrues on the unpaid
portion of the PHT Make-Whole Amount at 5% per annum, and by
agreement is compounded monthly.  In certain cases, the PHT
Make-Whole Amount may be increased by an adjustment agreed to by
ABIZ Pennsylvania and the PHT Partners.

Ms. Liu explains that the Settlement Agreement requires that the
full amount of the PHT Make-Whole Amount, whether paid by the
Partnership or by ABIZ Pennsylvania, be paid no later than
June 30, 2003, except for any portion of the PHT Make-Whole
Amount resulting from an adjustment made by ABIZ Pennsylvania
and the PHT Partners after that date.  As further assurance to
the PHT Partners, under the Settlement Agreement, PHT is granted
the right and obligation to compel distributions from the
Partnership, with certain limited exceptions.

The Settlement Agreement provides that the PHT Partners will:

  -- within a commercially reasonable time following the
     completion of an audit of the Partnership for the years
     ended 2001 and 2002, verify the amount of the
     Disproportionate Distributions; and

  -- within a commercially reasonable time after verification,
     evaluate whether the PHT Make-Whole Amount should be
     increased as a result of the actual verified aggregate
     amount of Disproportionate Distributions.

ABIZ Pennsylvania and the PHT Partners have agreed that if it is
reasonably determined that the Disproportionate Distributions
are greater than the amount set forth in the Settlement
Agreement, they will increase the PHT Make-Whole Amount by the
amount as is necessary to make the PHT Partners whole.  Absent
fraud or intentional misrepresentation in the information
delivered to the PHT Partners, the PHT Make-Whole Amount will
become final and will not be subject to further adjustments by
the PHT Partners.

Any increase in the PHT Make-Whole Amount may be made by ABIZ
Pennsylvania and the PHT Partners, jointly, without any further
consent or approval of the ACOM Debtors, Beal or this Court.
However, if any increases aggregate more than $10,000,000 in
principal amount, then the PHT Partners would lose their lien
priority to secure payment of the portion exceeding $10,000,000
except to the extent that:

  -- this increase has been consented to in writing by ACOM or
     otherwise approved by this Court; or

  -- ACOM will have acknowledged in writing, or this Court will
     have acknowledged in a written order, that the PHT Partners
     have provided reasonable evidence that these increases
     represent amounts with respect to which the ABIZ
     Pennsylvania Repayment Amount may be increased pursuant to
     the Settlement Agreement.

After the occurrence of the Claim Determination Date and after
their receipt of the PHT Make-Whole Amount in full, Ms. Liu
relates that the PHT Partners are required promptly to deliver a
release in favor of ABIZ Pennsylvania, ABIZ, each of the other
ABIZ Debtors, ABIZ Capital, the officers and directors of the
ABIZ Companies, the ABIZ shareholders, the Partnership, ACOM and
ACOM's officers, directors, shareholders and subsidiaries as of
December 30, 2002, releasing any claims that the PHT Partners
may have against any of the Released Parties related to the
Disproportionate Distributions.  This Release would become
effective after its execution and delivery, except that, in the
case of ACOM and its officers, directors, shareholders, and
subsidiaries, the Partnership, the officers and directors of
each of the ABIZ Companies, and the shareholders of ABIZ, the
effectiveness would be postponed until the later of:

  -- the expiration of any preference period that may apply to
     the payment of the PHT Make-Whole Amount, during which
     period no preference claim has been asserted with respect
     to this payment; or

  -- if the preference claim is asserted during the preference
     period, a final determination that the claim is without

Notwithstanding the release of ABIZ and ABIZ Pennsylvania, if
any part of the payments of the PHT Make-Whole Amount are
avoided as a preference, the PHT Partners may file a claim
against either ABIZ or ABIZ Pennsylvania or both in any
bankruptcy case in which either or both are the debtor.  
However, the entry of the Order requested is not to have any
effect on the priority of any claim that may be filed against
ABIZ or ABIZ Pennsylvania, and the priority will be the same as
it would have been had the Order requested not been entered.  
Furthermore, this release will not release any of the Released
Parties from any liability for the breach of their
representations and warranties in the Settlement Agreement.

Ms. Liu adds that the Settlement Agreement contains a number of
covenants pertaining to the operation of the Partnership,
reporting requirements, inspections and audits and other
accounting matters.  In addition, ABIZ Pennsylvania and the PHT
Partners agree to use their good faith efforts to jointly market
and sell the Partnership so long as the PHT Make-Whole Amount
remains outstanding.  The obligation to sell is subject to a
number of material conditions, including:

  -- the completion of certain fiber construction projects by
     the PHT Partners;

  -- the approval of ABIZ Pennsylvania and the PHT Partners,
     which will not be unreasonably withheld;

  -- a minimum bid requirement that will allow ABIZ to fulfill
     its duties to maximize the value of its estate as a debtor-
     in-possession; this requirement will be determined by
     Jefferies & Company in its capacity as court-appointed
     financial advisor to ABIZ and be subject to the approval,
     not to be unreasonably withheld, of ABIZ, ABIZ Pennsylvania
     and the PHT Partners; and

  -- this Court's approval.

In addition, ABIZ Pennsylvania's approval of a sale of the
Partnership's assets or equity also will be subject to its
having received Beal's consent under the Beal DIP Credit

Ms. Liu reports that the Settlement Agreement provides for ABIZ
Pennsylvania to reimburse the reasonable fees and costs that PHT
has incurred or may incur as a result of the Disproportionate
Distributions and in connection with the negotiation, execution,
delivery, and to the extent necessary, recordation of a certain
predecessor term sheet, a certain interim letter agreement, the
Settlement Documents and any other documents delivered.  Other
than with respect to any defaults under the Settlement Documents
and other documents delivered, any future costs incurred in
connection with inspecting and auditing the books, records and
properties of the Partnership or otherwise reviewing the
accounting practices used to prepare the Partnership's financial
statements and reports will be paid by the Partnership.

As part of the implementation of the overall settlement and in
furtherance thereof, the Settlement Agreement provides for the
execution and delivery of five other related agreements, namely:

  -- a certain Pledge Agreement, dated as of December 30, 2002,
     between ABIZ Pennsylvania and the PHT Partners;

  -- a certain Security Agreement, dated as of December 30,
     2002, between ABIZ Pennsylvania and the PHT Partners;

  -- a certain Guaranty and Make-Whole Agreement, dated as of
     December 30, 2002, between the Partnership and the PHT

  -- a certain ACOM/PHT Partners Intercreditor Agreement, dated
     as of December 30, 2002, between ACOM and the PHT
     Partners; and

  -- a certain Beal/PHT Partners Intercreditor Agreement, dated
     as of December 30, 2002, between Beal and the PHT Partners.

Pursuant to the Pledge Agreement, ABIZ Pennsylvania is granting
the PHT Partners, as security for ABIZ Pennsylvania's
obligations in respect of the settlement, a lien on and security
interest in the Partnership Interest Collateral.  Pursuant to
the Pledge Agreement, after an Event of Default, other than the
Event of Default described in Pledge Agreement, PHT, as Agent
for the PHT Partners, may sell the applicable percentage of the
Partnership interest owned by ABIZ Pennsylvania.

Pursuant to the Security Agreement, Ms. Liu informs the Court
that ABIZ Pennsylvania is granting PHT, as Agent for the PHT
Partners, a lien on and security interest in the COPA Contract
Collateral as security for ABIZ Pennsylvania's obligations in
respect of the settlement.  Pursuant to the Pledge Agreement and
the Security Agreement, ABIZ Pennsylvania has agreed to
reimburse the PHT Partners and each of their employees,
officers, directors and agents, on demand, for all reasonable
costs and expenses, losses, claims, damages and fees incurred by
any Indemnified Party in connection with the administration and
enforcement of each of the Pledge Agreement and Security
Agreement, including the reasonable fees and costs of its legal
counsel, accountants and other advisers, and agrees to indemnify
and hold these Indemnified Parties harmless from and against any
and all liability incurred unless resulting from the party's own
gross negligence or willful misconduct.  These obligations
survive the termination of the Pledge Agreement and the Security
Agreement and will be deemed "secured obligations" under the
Pledge Agreement and the Security Agreement.

According to Ms. Liu, the Pledge Agreement and the Security
Agreement each terminate after the receipt by PHT, as Agent for
the PHT Partners, of the indefeasible payment in full, in cash,
of the ABIZ Pennsylvania Repayment Amount and the other secured
obligations.  Within 20 days after ABIZ Pennsylvania's written
demand after the Agent's receipt of payment in full of the
Repayment Amount, PHT, as Agent for the PHT Partners, will
deliver UCC termination statements terminating the UCC financing
statements filed by the Agent in respect of the Partnership
Collateral and the COPA Contract Collateral.  Notwithstanding
the payment in full of the PHT Make-Whole Amount, in the event
any payment in respect of the ABIZ Pennsylvania Repayment Amount
is required to be disgorged, surrendered or otherwise returned
by the Agent or either of the PHT Partners to ABIZ Pennsylvania,
the Partnership, or any other person as a result of the payment
being deemed a fraudulent conveyance, a preferential transfer,
or by virtue of any other similar avoidance action, the PHT
Partners may reinstate their liens on the collateral under these
agreements as if these payments had not been received.

Pursuant to the Guaranty Agreement, the Partnership has
guaranteed payment of the Partnership Repayment Amount no later
than June 30, 2003.  Pursuant to the ACOM/PHT Intercreditor
Agreement, ACOM has agreed to subordinate its pre-existing lien
on and security interest in the Partnership Interest Collateral
and the COPA Contract Collateral to the lien and security
interest newly granted to the PHT Partners pursuant to the
Pledge Agreement and Security Agreement.  Pursuant to the
Beal/PHT Intercreditor Agreement:

  -- Beal has agreed to subordinate its newly granted lien on
     and security interest in the Partnership Interest
     Collateral to the lien on and security interest newly
     granted to the PHT Partners pursuant to the Pledge
     Agreement and Security Agreement; and

  -- the PHT Partners have agreed to subordinate their newly
     granted lien on and security interest in the COPA Contract
     Collateral to the pre-existing lien and security interest
     granted to Beal.

The Settlement and the accompanying Settlement Documents are the
product of protracted, arm's-length negotiations among counsel
for the PHT Partners, the Debtors and ABIZ Pennsylvania, and
ADLAC, over a period of 14 months, and of counsel to Beal over
the past several months.  The continued extension of credit by
Beal to the Debtors pursuant to the Beal Final DIP Order has
been made by Beal in good faith.

Ms. Liu contends that ABIZ Pennsylvania and the Partnership both
require PHT's services to complete certain fiber construction
projects for AT&T/ Vanguard and for the Commonwealth of
Pennsylvania under the Pennsylvania Contract.  The Pennsylvania
Contract is among the most valuable of ABIZ Pennsylvania's
assets and the successful completion of all projects is vital to
ABIZ and ABIZ Pennsylvania.  However, ABIZ Pennsylvania is
unable to complete all the projects required by the COPA
Contract without PHT's assistance.  At ABIZ Pennsylvania's
request, and as a show of good faith during the negotiation of
the Settlement Documents, PHT completed certain of the fiber
construction projects due under the Pennsylvania Contract in
contemplation of the settlement proposed.  PHT is willing to
complete the remainder of the fiber construction projects when
the settlement proposed becomes effective.  In addition, and for
the same reasons, PHT completed fiber construction projects for
AT&T/Vanguard in contemplation of the consummation of the
settlement proposed.

Furthermore, Ms. Liu points out that the settlement avoids
possible litigation by the PHT Partners both to recover the
Disproportionate Distributions and to avoid liens on ABIZ
Pennsylvania's partnership interest.  This litigation would be
protracted, expensive, wasteful, and ultimately distracting to
the Debtors and their professionals in their efforts to
reorganize the Debtors' businesses.  Accordingly, given the
inherent uncertainty of litigation, the substantial cost and the
accompanying distraction of management, as well as the
resolution of any further claims relating to the
Disproportionate Distributions by means of the Release, the
Debtors' entry into the Settlement Agreement is justified and
should be approved by the Court. (Adelphia Bankruptcy News,
Issue No. 30; Bankruptcy Creditors' Service, Inc., 609/392-0900)

ADELPHIA COMMS: Asks Court to Declare Global Cable Violated Stay
The Adelphia Communications Debtors ask the Court to declare
that the subpoena served by Global Cable Inc. on ACOM, pursuant
to Rule 30(b)(6) of the Federal Rules of Civil Procedure, in an
action pending in the United States District Court, Middle
District of Pennsylvania entitled Global Cable, Inc. v. Robert
Steven Riley, Case No. 4:CV-02-1436, violates Section 362 of the
Bankruptcy Code and is null and void.  The ACOM Debtors ask
Judge Gerber to enforce and extend the automatic stay to enjoin
prosecution of the Riley Action.

Brian E. O'Connor, Esq., at Willkie Farr & Gallagher, in New
York, contends that Global Cable's service of the subpoena on
the ACOM Debtors constitutes a violation of the automatic stay.  
That subpoena calls for both the production of documents and
testimony by a corporate designee of the ACOM Debtors pursuant
to Rule 30(b)(6) of the Federal Rules of Civil Procedure.  
Global Cable also served subpoenas on two current employees of
the ACOM Debtors, seeking their deposition and the production of
documents that the employees hold, if at all, in their capacity
as employees.  Apart from the burden on the ACOM Debtors and its
employees of preparing for and complying with the subpoenas,
substantial risk of prejudice exists because of the identity of
interest the ACOM Debtors have with the defendant in the Riley
Action, who is himself a current employee.  In the event that
the ACOM Debtors and its employees are required to comply with
the subpoenas and the Riley Action proceeds to judgment, the
ACOM Debtors can expect that Global Cable will seek to invoke
principles of collateral estoppel against them in other fora,
including in the claims allowance process in this Court and in
aid of its continuing effort to set off or recoup its purported
claim for $34,200,000 against a claim for $2,500,000 it owes.

On May 20, 2002, Mr. O'Connor recounts that Global Cable
commenced an action against the Debtors in the United States
District Court, Middle District of Pennsylvania.  The complaint
asserts 12 claims: breach of contract, fraudulent
misrepresentation, promissory estoppel, breach of duty of good
faith and fair dealing, replevin, intentional interference with
contract, negligent interference with contract, intentional
interference with prospective contractual relations, negligent
interference with prospective contractual relations, and
commercial disparagement.  The complaint alleges that these
claims arise from purported contracts with Global Cable,
pursuant to which the Debtors were obligated to sell and Global
Cable to purchase digital converter boxes.  The complaint in the
Prepetition Action seeks $34,200,000 in damages, including lost

The complaint in the Prepetition Action alleges that the
contract was executed by Steven Riley, an employee of the
Debtors.  It further alleges that:

  -- Mr. Riley was "third in command and an authorized agent of

  -- "David Cline, Mr. Riley's superior and the second in
     command at Adelphia, was also present at [the meeting with
     Global Cable]" at which the alleged contracts were
     executed, and

  -- "Adelphia's most senior level management knew of, and
     endorsed, the [purported contracts]."

In the Prepetition Action, Mr. O'Connor relates that Global
Cable filed a motion for a temporary restraining order and
preliminary injunction on May 20, 2002 to restrain and enjoin
Adelphia from selling various converter boxes.  Despite the
complaint's lack of merit, the Debtors agreed to a settlement of
the TRO Motion to avoid further interference with its business
operations.  The TRO Motion Settlement was agreed to by the
parties on May 24, 2002, and an Order of the United States
District Court for the Middle District of Pennsylvania was
entered memorializing the parties' obligations.  Pursuant to the
TRO Settlement Order, the Debtors agreed to provide certain
converter units to Global Cable and:

  "[t]he Terms of payment for the units identified in Paragraphs
  1 through 4, above shall be $50 per unit, net 30 days from the
  date of receipt by [Appellant] of an invoice for said units .
  . . [Appellant] agrees to withdraw all motions for temporary
  restraining order or preliminary injunction, and agrees not to
  seek such relief based upon the facts alleged in its Complaint
  during the pendency of this action. . . . This settlement is
  without prejudice to all claims or defenses which have been
  asserted or may be asserted by any party to this action."

Pursuant to the TRO Settlement Order, the Debtors provided
Global Cable with 49,000 converter boxes, for which is it
entitled to $2,500,000.  Global Cable failed to make any of the
payments required under the TRO Settlement Order.  The
Prepetition Action was later stayed pursuant to Section 362 of
the Bankruptcy Code.

On July 3, 2002, Global Cable sought the Court's permission to
set off or recoup the amount of its disputed claim for
$34,200,000 against the $2,500,000 it owes Adelphia pursuant to
the TRO Settlement Order.  On August 6, 2002, this Court denied
Global Cable's request.  Global Cable then appealed the Order to
the District Court.  That appeal is sub judice.

On August 15, 2002, Mr. O'Connor reports that Global Cable
commenced the Riley Action, which is largely a reprise of the
complaint in the Prepetition Action.  Of the eight claims
asserted in the complaint in the Riley Action, seven are
identical to claims asserted in the Prepetition Action:
fraudulent misrepresentation, promissory estoppel, intentional
interference with third-party contracts, negligent interference
with third-party contracts, intentional interference with
prospective contractual relations, negligent interference with
prospective contractual relations, and commercial disparagement.
Although the complaint in the Riley Action does not seek damages
in a liquidated amount, it requests relief nearly identical to
the prayer for relief contained in the complaint in the
Prepetition Action.

On January 14, 2003, Global Cable served a Rule 30(b)(6)
subpoena on the "Corporate Designee of Adelphia Communications".  
The Rule 30(b)(6) Subpoena calls for the appearance of a
corporate designee at a deposition on February 26, 2003, with
knowledge of 10 identified subject matters -- which matters, if
germane to the claims asserted in the Riley Action, are also
germane to the claims asserted in the Prepetition Action -- and
calling for the production of 20 different categories of
documents on that same date.

Global Cable also served subpoenas on David Kline, Manager of
Materials Management and on Daniel Liberatore, Vice President of
Engineering, on January 14, 2003.  The Subpoenas calls for
Messrs. Kline and Liberatore's appearance at a deposition and
calls for the production of 11 different categories of documents
on that same date.  On January 31, 2003, Adelphia, Messrs. Kline
and Liberatore objected in writing to the Subpoenas, pursuant to
Federal Rule of Civil Procedure 45, to the extent that they call
for the production of documents.  To date, Global Cable has not
moved to compel production of documents in response to the

Mr. O'Connor insists that requiring the Debtors to identify,
prepare and produce a Rule 30(b)(6) witness in the Riley Action
is tantamount to requiring them to be deposed as a party in the
Prepetition Action.  Global Cable seeks binding testimony from
the Debtors with respect to the subject matter of the Riley
Action, which is identical to the subject matter of the
Prepetition Action.  The testimony of the corporate designees
would be binding on the Debtors not only in the Riley Action,
but for other purposes.  Global Cable could seek to use the
Debtors' testimony against it, for example, in the claims
allowance process or in connection with its ongoing effort to
set off or recoup its purported $34,200,000 claim against the
$2,500,000 it owes Adelphia pursuant to the TRO Settlement
Order.  As a result, the Rule 30(b)(6) Subpoena violates the
automatic stay.

Mr. O'Connor contends that the claims asserted in the complaint
in the Riley Action, although nominally asserted against Mr.
Riley, are in reality claims against the Debtors arising from an
alleged breach of contract.  As is evidenced by Global Cable's
efforts in this Court, and now on appeal in the District Court,
to exercise a right of set off or recoupment, Global Cable has
not abandoned its claims against the Debtors.  There can be
little doubt that Global Cable commenced the Riley Action only
because the Prepetition Action, in which Global Cable asserted
virtually identical claims against the Debtors, was stayed after
the Petition Date.  The protection offered a debtor by the
automatic stay cannot be eviscerated, however, by attempts to
circumvent its protections through artful pleading and self-
serving party selection.  See In re Cont'l. Airlines, 177 B.R.
475, 479 (D. Del. 1993) (enforcing the automatic stay and
finding that the debtor was the real party defendant because
class action litigation was commenced against non-debtor
defendants solely to circumvent the automatic stay).  This is
clearly a case of party selection.

Mr. O'Connor alleges that Global Cable has an ulterior motive in
prosecuting the Riley Action.  Nothing is more probative of that
motive than Global Cable's issuance of the Rule 30(b)(6)
Subpoena, pursuant to which it seeks testimony binding on the
Debtors with respect to subject matters as germane to the claims
asserted in the Prepetition Action as to those asserted in the
Riley Action.  The striking similarities between the complaint
in the Riley Action and the complaint in the Prepetition Action
evidence that Global Cable has only re-cast its allegations
against the Debtors as allegations against Mr. Riley.

If Global Cable is permitted to require compliance with the
Subpoenas and the Riley Action is permitted to proceed to
judgment, Mr. O'Connor is concerned that Global Cable's expected
invocation of principles of collateral estoppel may result in
substantial prejudice to the Debtors and its estate.  In these
circumstances, courts have not hesitated to extend the automatic
stay with respect to "actions against non-debtors where an
identity of interest exists between the debtor and nondebtor
defendant such that the debtor is the real party defendant and
the litigation will directly affect the debtor and, more
particularly, the debtor's assets or its ability to pursue a
successful plan of reorganization under Chapter 11."  Cont'l.
Airlines, 177 B.R. at 479.12

Had the Prepetition Action not been stayed, Global Cable would
be seeking the same discovery in the Prepetition Action that it
now seeks by means of the Subpoenas in the Riley Action.  Global
Cable should not be permitted to circumvent the automatic stay
so transparently.

While the Debtors submits that collateral estoppel concerns are
alone sufficient to warrant the extension of the automatic stay
to the Riley Action, Mr. O'Connor believes that the burden of
compliance with the Subpoenas, particularly the Rule 30(b)(6)
Subpoena, also provides a basis for extension of the automatic
stay.  The burden and distraction inherent in responding to
discovery is a factor that has weighed heavily in courts'
decisions to extend the automatic stay to actions against
employees, officers and directors of debtors.  See, e.g., Cont'l
Airlines, 177 B.R. at 479 (enforcing automatic stay where
directors named as defendants would be distracted from
reorganization efforts by the continuation of proceedings).
Messrs. Kline and Liberatore are current employees who should
not be distracted from their responsibilities to provide
discovery in an action that has been commenced primarily as a
vehicle to obtain discovery for later use against the Debtors.

Moreover, Mr. O'Connor asserts that the Rule 30(b)(6) Subpoena
imposes an even greater burden on the Debtors.  Compliance with
that subpoena would require the Debtors to undertake a search
for the individual or individuals who possess testimonial-grade
knowledge of the identified subject matters, interrupt their
duties in connection with reorganization, and prepare and
produce them for testimony that Global Cable will ultimately
seek to use against the Debtors.  To require the Debtors to
engage in this process would make a mockery of the purpose of
the automatic stay -- to provide a debtor with a "breathing
spell" from pursuit by its creditors. (Adelphia Bankruptcy News,
Issue No. 30; Bankruptcy Creditors' Service, Inc., 609/392-0900)

Adelphia Communications' 10.875% bonds due 2010 (ADEL10USR1) are
trading at about 40 cents-on-the-dollar, says DebtTraders. See
for real-time bond pricing.

ADEPT TECHNOLOGY: Fails to Comply with Nasdaq Listing Guidelines
Adept Technology, Inc., (Nasdaq:ADTK) received a Nasdaq Staff
Determination on March 3, 2003 indicating that Nasdaq has not
received the Company's payment of the Nasdaq 2003 annual fee as
required for continued listing by Marketplace Rules 4310(C)(13)
and 4510(C)(01).

The Company previously received a Nasdaq Staff Determination
indicating that the Company's application to transfer the
listing of its common stock from The Nasdaq National Market to
The Nasdaq SmallCap Market was denied as a result of the
Company's failure to comply with the minimum stockholders'
equity requirement and minimum bid price requirement for
continued listing, and that its securities are, therefore,
subject to delisting from The Nasdaq National Market.

The Company requested and has been granted a hearing scheduled
for March 13, 2003 before a Nasdaq Listing Qualifications Panel
to review the delisting decision. Nasdaq has informed the
Company that the delisting of the Company's securities has been
stayed pending the Panel's decision. There can be no assurance
the Panel will grant the Company's request for continued listing
on Nasdaq.

Adept Technology, Inc., designs, manufactures and markets
intelligent production automation solutions for the photonics,
telecommunication, semiconductor, automotive, appliance, food
and life sciences industries throughout the world. Adept
products are used for small parts assembly, material handling
and ultra precision process applications and include robot
mechanisms, real-time vision and motion controls, machine vision
systems, system design software, process knowledge software,
precision solutions and other flexible automation equipment.
Adept was incorporated in California in 1983. More information
is available at

                         *     *     *

               Liquidity and Capital Resources

In its SEC Form 10-Q filed for the period ended December 28,
2002, the Company reported:

"As of December 28, 2002, we had working capital of
approximately $13.0 million, including $8.2 million in cash and
cash equivalents.

"Cash and cash equivalents decreased $13.5 million from June 30,
2002. Net cash used in operating activities of $13.2 million was
primarily attributable to our net loss and decrease in other
accrued liabilities offset in part by a decrease in accounts  
receivable and inventories and increase in accounts payable.  
The decrease in accounts receivable of $2.1 million reflects a
decline in revenues in recent quarters.  Cash provided by
investing activities during the six months ended December 28,  
2002 was $3.8 million, due to the sale of short-term investments  
of $4.3 million, which was partially offset by property and
equipment purchases of $0.3 million and business acquisition
costs of $0.2 million.  Cash provided by financing activities of
$0.2 million was related to proceeds from our employee stock
incentive plan.

"On August 30, 2002, upon the acquisition of Meta, we assumed a  
$500,000 revolving line of credit with Meta's lender, Paragon
Commercial Bank, terminating in September 2003 and bearing  
interest at 1% plus the prime rate announced from time to time
by the Wall Street Journal. Of this line of credit, $494,000 was  
outstanding at the time of acquisition and at December 28, 2002.
The credit facility does not contain any financial covenants and
is secured by a $500,000 cash deposit with Paragon Commercial
Bank.  The cash deposit is classified as other current assets.

"On October 29, 2001, we completed a private placement with JDS  
Uniphase Corporation of $25.0 million in our convertible  
preferred stock consisting of 78,000 shares of Series A
Convertible Preferred Stock and 22,000 shares of Series B  
Convertible Preferred Stock . Both the Series A Preferred and
the Series B Preferred are entitled to annual dividends at a
rate of $15 per share. Dividends are cumulative and are payable
only in the event of certain liquidity events as defined in the
statement of preferences of the Preferred Stock, such as a
change of control or liquidation or dissolution of Adept.  No
dividends on our common stock may be paid until  dividends  for
the fiscal year and any prior years on the  Preferred  Stock  
have been paid or set apart, and the Preferred Stock will  
participate in any dividends paid to the common stock on an
as-converted basis.  The Preferred Stock may be converted into
shares of our Common  Stock at any time,  and in the absence of
a liquidity  event or earlier conversion or  redemption,  will
be converted into common stock upon October 29, 2004.  We  have  
agreed  to  use  our  reasonable  commercial  efforts  to  seek
shareholder  approval to extend this automatic conversion date
for the Preferred Stock until October 29, 2005.  The Preferred  
Stock may be converted into shares of our  Common  Stock  at a
rate of the  initial  purchase  price  divided  by a denominator  
equal to the lesser of $8.18,  or 75% of the 30 day average
closing price of our Common Stock immediately preceding the
conversion date. However, as a result of a waiver of events of
default by the preferred stockholder other than in connection  
with certain liquidity events that are not approved by the
Board of Directors of Adept, in no event shall the denominator  
for the determination  of the conversion  rate with respect to
the Series B Preferred be less than $4.09 and with  respect to
the Series A Preferred  be less than $2.05, other than in
connection with certain  liquidity events that are not approved
by the Board of Directors of Adept.  The Preferred  Stock shall
not be convertible, in the aggregate, into 20% or more of our
outstanding voting securities and no holder of Preferred  Stock
may convert shares of Preferred  Stock if, after the conversion,  
the holder will hold  20% or  more  of our outstanding voting
securities.  Shares not permitted to be converted  remain  
outstanding, unless redeemed, and become  convertible  when such
holder  holds less than 20% of our outstanding  voting  
securities.  The Preferred Stock has voting rights equal to the
number of shares  into  which the  Preferred  Stock  could be  
converted  as determined  in the  designation  of  preferences  
assuming a conversion  rate of $250.00 divided by $8.18.

"In December 2002, Adept and JDS Uniphase agreed to terminate  
the supply, development and license  agreement  entered into by
them in October 2001.  Under this  agreement, we were obligated  
to work with JDS Uniphase's internal automation organization,  
referred to as Optical Process Automation, or OPA, to develop  
solutions for component and module manufacturing processes for
sub-micron tolerance assemblies. JDS Uniphase retained sole  
rights for fiberoptic applications developed  under  this  
contract.  For non-fiberoptic applications of component and
module  manufacturing  processes developed by OPA, we were  
obligated to pay up to $1,000,000  each fiscal  quarter for the
planned five-quarter effort. Due to changing economic and
business circumstances and the curtailment of development  by
JDS  Uniphase  and  termination of their OPA operations,  both
parties  determined  that these development  services were no
longer  in  their  mutual  best interests.  As part of the  
termination,  Adept executed a $1,000,000  promissory note in
favor of JDS Uniphase earning interest at a rate of 7% per year
payable on or before  September 30, 2004.  JDS Uniphase has the
right to require Adept to apply any additional  financing
received prior to maturity first to repayment of the  
outstanding  balance under the promissory note. The payments
made prior to termination  plus the promissory note represent
payment in full by Adept for the development services performed
by JDS Uniphase, and there are no remaining payment obligations  
arising from the agreement.  All licenses,  licensing  rights
and other rights and  obligations  arising from the development  
work performed  under the contract before  termination  survive
its termination.  Adept also agreed to seek  shareholder  
approval to amend the date that the preferred stock held by JDS
Uniphase  automatically converts into Adept common stock from
October 29, 2004 to October 29, 2005.

"Pursuant to the terms of the CHAD acquisition agreement, we
paid $2.6 million to the  shareholders  of CHAD on October 9,
2002.  On December 13,  2002,  CHAD and Adept amended the second
anniversary promissory note due to a former shareholder of CHAD
and  released to Adept the funds held in escrow to secure the
note.  All outstanding  principal of and accrued  interest on
this second  anniversary  was paid in full in January 2003.

"We do not anticipate additional capital expenditures for the
remainder of fiscal 2003. We are currently  pursuing various
debt and equity financing  alternatives in order to improve  our  
liquidity.  If adequate funds are not available on acceptable  
terms or at all, we expect to use substantially all of our cash
during fiscal 2003."

At December 28, 2002, Adept Technology's balance sheet shows
that its total shareholders' equity has further shrunk to about
$1.6 million from about $16 million reported at June 30, 2002.

AMERICAN SKIING: Continues Real Estate Debt Workout Discussions
American Skiing Company (OTC: AESKE) announced that the
previously announced re-audit of the Company's fiscal 2001 and
2000 financial statements has been completed and that its Annual
Report on Form 10-K for the fiscal year ended July 28, 2002 and
its Quarterly Report on Form 10-Q for the quarter ended October
27, 2002, have been filed with the Securities and Exchange
Commission. For more detailed information, please refer to the
Company's Annual Report on Form 10-K and its Quarterly Report on
Form 10-Q.

"As we entered the 2002/2003 ski season, our resort operations
were in a stronger position than at any other time in recent
history," said CEO B.J. Fair. "During the last year, we improved
our cost structure and significantly reduced resort debt through
the sales of Heavenly and Sugarbush resorts.  In addition, the
recent refinancing of our resort credit facility provides even
greater operating flexibility as we move through the current ski
season and beyond."

                     Early Season Results

"Favorable weather conditions in the east and significant
snowfall in Colorado set the stage for a much better start to
the ski season," said Fair. "Almost all of our resorts generated
increases in early season visitation over last year when we were
hampered by poor weather in the east, the impact of the Olympics
on the Utah market and reduced destination travel resulting from
the 9/11 event. Through the end of our second fiscal quarter,
our eastern resorts generated a 14% increase in year-to-date
skier visits with The Canyons showing growth of more than 20%
and Steamboat posting a modest 4% increase."


Thanksgiving results at eastern resorts improved sharply as a
result of favorable weather conditions which allowed the
Company's snowmaking operations to open substantially more
terrain than in the prior year. All of the Company's eastern
resorts were open by November 29th with much better skiing and
riding conditions than in the 2001/2002 ski season. Killington
resort set an all time record for skier visits during
Thanksgiving weekend and other eastern resorts recorded sharply
higher visitation compared to the prior year.

In the west, The Canyons has capitalized on the worldwide
attention generated by the 2002 Winter Olympic Games and NBC's
Today Show, which made its home at the resort during the games.
As a result, The Canyons reported a significant increase in
visitation and, despite less than favorable snow conditions,
performed close to plan.

Holiday Season

Early season momentum continued through the two week Christmas
and New Year's Holiday period with the Company posting an 8%
increase in skier visits. In the east, skier visits for the two
week holiday period were 8% higher than last year with
Killington and Mount Snow reporting a 6% and a 39% increase,
respectively. In the west, The Canyons enjoyed a 39% increase in
visits during the holiday period, despite less than optimal snow
conditions. Skier visits at Steamboat increased moderately over
the same period in the 2001/2002 ski season.

By the close of the holiday period, year-to-date skier visits
for the Company were more than 22% higher than at the same time
last season with eastern resorts showing a 29% improvement.
Total skier visits for The Canyons and Steamboat were up 18% and
7% year-over-year, respectively.

          Season Pass Sales and Reservation Activity

As of January 26, 2003, the Company reported that as a result of
more effective planning and marketing, season pass sales
increased approximately 7% year-over-year with The Canyons
posting a 58% increase. The Company's online multi-day ticket
product, mEticket, continues to grow in popularity among the
Company's loyal customer base of skiers and riders with sales
more than 14% higher year-over-year.

                 Resort Operations Recent Trends

Although the Company's operating results from July 29, 2002
through January 26, 2003 were stronger than the comparable
period of the prior year, the Company has experienced
significant softening in skier visits, call volume and
reservation activity in subsequent weeks which may be
attributable to extreme cold temperatures in the east, the soft
economy, as well as concerns about the potential for war in the
Middle East and terrorist activity in the United States. This
recent trend has partially offset early season improvements in
operating results. Furthermore, consumers continue to book their
reservations closer to the actual date of travel making it
increasingly difficult for the Company to forecast future

                      Real Estate Update

The Company reported that it is continuing negotiations with the
lenders under its senior secured credit facility for its primary
real estate development subsidiary, American Skiing Company
Resort Properties, as part of the Company's ongoing effort to
restructure ASCRP's real estate debt. As previously reported,
ASCRP has been in payment default under its senior secured
credit facility since May 2002. Management believes that it is
close to finalizing an agreement with the lenders that entails
the formation of a new company to hold ASCRP's real estate
development assets. The equity in the new company is expected to
be held by lenders under the senior secured credit facility, and

The ASCRP senior secured credit facility, as previously
reported, remains in default pending completion of these
negotiations. There can be no assurance that negotiations will
be successfully completed, or that the payment defaults pending
under the facility can be satisfactorily resolved, if at all.
For more detail, please refer to the Company's Form 10-K and
Form 10- Q, each filed with the Securities and Exchange
Commission on March 7, 2003.

               Real Estate Operations Recent Trends

Over the past several months, the Company has seen a reduction
in sales volume and sales leads at its Grand Summit properties
at Steamboat and The Canyons. These reduced sales volumes are
below the Company's anticipated levels for this period. The
Company believes that this is primarily the result of continuing
disruptions related to its real estate restructuring efforts,
which have impacted real estate sales interest at both resorts,
as well as weakening economic conditions and difficulty of some
potential buyers in obtaining end loan financing for fractional
real estate purchases. Management is monitoring developing
economic conditions and implementing new and re-energized sales
and marketing programs to take advantage of visitation during
the remaining ski season.

Headquartered in Park City, Utah, American Skiing Company is one
of the largest operators of alpine ski, snowboard and golf
resorts in the United States. Its resorts include Killington and
Mount Snow in Vermont; Sunday River and Sugarloaf/USA in Maine;
Attitash Bear Peak in New Hampshire; Steamboat in Colorado; and
The Canyons in Utah. More information is available on the
Company's Web site,  

AMR CORP.: Reuters Says Carrier's Looking for DIP Financing
Kathy Fieweger and Jon Herskovitz at Reuters say that American
Airlines may be in bankruptcy sooner rather than later.  
"Several [unnamed] sources familiar with the matter," they say,
claim that AMR's looking to Wall Street for $2 billion debtor-
in-possession financing package.  "They're starting out with a
very high, unreasonable expectation to raise $2 billion," one
unidentified source said, adding, "The United DIP was a tough
enough one and they (United) had a much better package of

"We are simply not going to comment on every rumor or every bit
of speculation about American Airlines," spokesman Todd Burke
told Ms. Feiweger and Mr. Herskovitz. "We have said our losses
are not sustainable and we have also said we need to remove $4
billion in operating costs in our company.

"Time is of the essence," Mr. Burke told David Koenig, writing
for Canadian Press.  "American is committed to working with our
union leaders and employee groups to find mutually acceptable
solutions to our situation," Mr. Burke continued.

John Ward, President of the Association of Professional Flight
Attendants is credited with the "sooner rather than later,"
prediction about the timing of American tumbling into chapter

AMR Corp. alerted investors earlier this year that it might seek
chapter 11 protection last month when it asked employees for
$1.8 billion in wage and other concessions as part of a $4
billion cost cutting plan.

AMRESCO: S&P Affirms Low-B Ratings on 4 P-T Certificate Classes
Standard & Poor's Ratings Services raised its ratings on classes
B, C, D, E, and F of AMRESCO Commercial Mortgage Funding I
Corp.'s series 1997-C1. At the same time, the ratings on classes
A-1, A-2, A-3, G, H, J, and K are affirmed.

The raised ratings reflect the large increase in credit support
due to loan payoffs, as well as the steady performance of the
loan pool, which includes only one loan that is delinquent and
specially serviced.

As of March 2003, the trust collateral consisted of 81
commercial mortgages with an outstanding balance of $359.3
million, down from 97 loans totaling $480.1 million at issuance.
The pool has paid down by 25.2% resulting in an increase of
33.6% in subordination levels. The pool has not experienced any
losses to date. The master servicer, CapMark Services L.P.
(master servicer ranking of STRONG), reported either trailing
12-month as of Sept. 30, 2002 or year-end 2002 net cash flow
debt service coverage ratios (DSCR) for the substantial majority
of the pool (68 out of 81 loans). Based on this information,
Standard & Poor's calculated the DSCR for the pool at 1.63x, up
from 1.33x at issuance. The DSCR for the remaining 10 largest
loans totaling $118.2 million, or 32.9% of the pool, is 1.39x,
compared to 1.38x at issuance. The pool has significant
geographic concentrations in Texas (19.0%), Oklahoma (12.1%),
Georgia (9.6%), Florida (9.0%), Virginia (8.0%), and New York
(7.6%). Significant property type concentrations include
multifamily (48.9%), retail (24.8%), and office (11.3%).

The sole specially serviced loan has a current balance of $17.5
million, or 4.7% of the pool balance, with a fixed coupon of
8.97%. The loan, Union Station, is secured by a 334,566-square-
foot retail center located in Tulsa, Okla. and is anchored by a
Builders Square, whose lease has been rejected. Current
occupancy is 41% and the most recent DSCR is 0.67x as of Dec.
31, 2002. The borrower is actively pursuing a new tenant and is
abiding by the terms of the forbearance agreement currently in
place. A recent appraisal (December 2002) valued the property at
$15 million and an appraisal reduction will be taken.

The servicer's watchlist notes eight loans totaling $39.2
million (10.9% of the pool) after taking into account that the
second largest loan on the watchlist, Hideaway Bay Apartments
($11.9 million, or 3.2%), paid off in full on Feb. 20, 2003. The
largest loan on the watchlist, River Oaks Plaza, for $14.1
million (3.9%), has a DSCR of 0.82x as of Dec. 31, 2002, and has
shown improvement since year-end 2001, at which time the DSCR
was 0.59x. The improvement has occurred since Marshall's, a new
tenant, took occupancy in mid November (25% of GLA), raising the
retail center's occupancy to 99%.

Based on discussions with Capmark and the special servicer, Lend
Lease Asset Management L.P. (special servicer ranking of STRONG)
Standard & Poor's stressed various loans in the mortgage pool as
part of its analysis. The expected losses and resultant credit
levels adequately support the rating actions.

                             RATINGS RAISED

               AMRESCO Commercial Mortgage Funding I Corp.
                    Pass-through certs series 1997-C1

               Class   To        From      Credit Enhancement
               B       AAA       AA                   35.41%
               C       AA+       A+                   32.07%
               D       AA        A                    26.05%
               E       A-        BBB                  18.70%
               F       BBB       BBB-                 16.03%

                            RATINGS AFFIRMED

               AMRESCO Commercial Mortgage Funding I Corp.
                    Pass-through certs series 1997-C1

               Class     Rating       Credit Enhancement
               A-1       AAA                      42.09%
               A-2       AAA                      42.09%
               A-3       AAA                      42.09%
               G         BB                        7.35%
               H         BB-                       6.01%
               J         B                         4.01%
               K         B-                        3.34%

ANC RENTAL: Wants Court Approval of Postpetition Surety Bonding
ANC Rental Corporation and its debtor-affiliates seek the
Court's authority to obtain surety credit in the form of surety
bonds from Liberty Mutual Insurance Company, which are
absolutely essential to the Debtors' ability to operate their
businesses and to successfully reorganize.  In addition, the
Debtors seek to provide additional collateral to Liberty in
connection with the issuance and continuation of the surety

Elio Battista, Jr., Esq., at Blank Rome LLP, in Wilmington,
Delaware, informs the Court that the Debtors are required to
support various aspects of their business with surety bonds,
which allow them to operate their business without the
impracticable burden of posting cash collateral to support
certain obligations.  For example, the Debtors' rental
operations maintain a strong presence in airports throughout the
United States and these airport rental locations are operated
pursuant to concession agreements with the airport operators.  
To guarantee the Debtors' performance under the terms of the
concession agreements, the concession agreements obligate the
Debtors to provide and maintain surety bonds in the airport
operator's favor.  It is critical to the Debtors' ability to
operate as a going concern that the Debtors obtain these bonds.

The Debtors require surety bonds to secure these obligations:

  A. In order to operate on-airport and near-airport rental car
     facilities, many airport authorities require the Debtors to
     provide surety bonds guaranteeing their performance of the
     underlying concession agreements between the Debtors and
     the airports, particularly their payment obligations to the

  B. The Debtors' insurers, including their Workers'
     Compensation, Automobile and General Liability Insurers,
     have required that the Debtors secure certain of the
     Debtors' obligations related to those insurance programs
     with sizeable surety "Retro" Bonds.

  C. By law, in various states where the Debtors operate as a
     self-insured entity, they must secure their ability to meet
     their insurance obligations by providing Self-Insurers
     Bonds in the particular state's favor.

  D. In addition, the Debtors need a variety of other statutory,
     or regulatory, or otherwise required bonds to support their
     on-going operations.  Examples include Utility Bonds, which
     enable the Debtors to procure the services of various vital
     utilities, and Motor Vehicle Dealer or Adjusters Bonds,
     which enable a number of the Debtors' motor vehicle dealers
     or insurance claim adjuster to obtain or renew their
     licenses each year from the states in which they are

According to Mr. Battista, Liberty, by issuing these types of
surety bonds to the Debtors, has to date provided the Debtors
with about $120,000,000 in surety credit.  These surety bonds,
most of which run to airport authorities, the Debtors' insurers,
or various states or other regulatory bodies, are critical to
the Debtors' ability to continue to conduct their businesses.  
At any given time, the Debtors have between 300 and 400 surety
bonds outstanding.  The Debtors' surety program is very dynamic,
in that most months, millions of dollars worth of surety bonds
expire, or need to be renewed or continued, or need to be
increased or decreased, or need to cover additional principals,
etc.  The Debtors have relied almost exclusively on Liberty to
issue surety bonds and to maintain this fluid surety program.

The Debtors do not believe that they will be able to procure
commercial surety bonds from a source other than Liberty because
it is obviously difficult for entities in bankruptcy to obtain
new credit from a new source, even if the new source is
collateralized, particularly when several secured creditors
already have prior claims to the Debtors' assets.  Mr. Battista
also notes that the commercial surety market has undergone
significant upheaval in the last few years.  In particular, the
economic downturn and the surety industry's recent large
commercial losses have induced several sureties that were a
formerly major participant to retreat from the commercial surety
market.  Moreover, the Debtors are advised that the lack of
available reinsurance is also contributing to a swiftly
shrinking commercial surety marketplace.

In recognition of the Debtors' critical need for Liberty's
support and future bonding, as well as Liberty's concerns and
requirements, representatives of the Debtors and Liberty have
engaged in lengthy, difficult, but good-faith negotiations over
terms and conditions applicable to Liberty's surety bonds and
its role as a postpetition surety to the Debtors.  The Debtors
are currently negotiating a final term sheet, which will be
filed prior to the hearing to approve this request with respect
to the terms of a 2003 bonding program, along with a proposed
form of order.

Mr. Battista believes that the 2003 Bonding Program will create
a benefit to the estate, and will ultimately be of benefit for
its creditors.  Under and pursuant to the Supplemental Term
Sheet, the Debtors will be able to secure essential bonding --
the proffered terms are unavailable from any other source.  For
its part, Liberty will be given certain protections in
recognition of the financial risks it has taken, continues to
take and will undertake on the Debtors' behalf.  It is an
agreement, which should be approved by the Court.

Without the bonds that Liberty has issued and has agreed to
issue, Mr. Battista is concerned that the Debtors could no
longer sustain their businesses at current levels.  Many of the
Debtors' key contractual relationships require bonds as those
provided by Liberty -- and which the Debtors would not otherwise
be able to replace -- and a termination of the bonds would
trigger a flood of defaults for which no cures could be
provided.  Because their continued rental operations at airports
is essential for the successful reorganization of their
business, the Debtors seek the Court's authority to enter into
the transaction contemplated by the Supplemental Term Sheet.

If the Debtors are successful in finalizing the terms of the
Supplemental Term Sheet:

  A. Liberty will provide the Debtors with a further extension
     of postpetition credit to permit the Debtors to obtain and
     meet their 2003 Bonding Program needs; and

  B. Liberty will consent to subordinate certain of its senior
     liens necessary for the Debtors to obtain debtor-in-
     possession financing.

The summary of the Transaction is intended only to introduce the
Court to the key aspects of the Arrangement and will be
qualified in its entirety by the Supplemental Term Sheet when

To induce Liberty to provide additional postpetition credit; to
renew, continue or issue surety bonds on the Debtors' behalf
that are critical to the Debtors' successful reorganization; and
to subordinate certain of its senior liens to a DIP lender, in
addition to the liens, claims and other protections granted to
Liberty, the Debtors will provide Liberty with additional cash
collateral, and Liberty will be granted certain other
protections. (ANC Rental Bankruptcy News, Issue No. 28;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

ARMSTRONG: Disclosure Statement Hearing to Continue on April 4
Judge Newsome has continued the hearing on Armstrong World
Industries' Disclosure Statement to April 4, 2003.  The Court
will also schedule a hearing on Liberty Mutual's recusal issue
at some date in the next two weeks.

Judge Newsome has already heard, considered and overruled some
objections to the Disclosure Statement, but did not rule on
Liberty's objections, delaying that until the recusal issue is
resolved. (Armstrong Bankruptcy News, Issue No. 37; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   

BRANDAID MARKETING: External Auditors Issue Going Concern Note
BrandAid Marketing Corporation is an in-store marketing services
company that provides manufacturers of consumer products, direct
response products, and entertainment companies, with a cost
effective method of delivering advertising messages, promotional
incentives, samples and CD ROMS directly to consumers.

BrandAid's operating revenues are solely from its marketing
activities, which primarily focuses on the distribution of in-
store advertisements called "Supercards" as well as distributing
client marketing materials. The Company advisory board is made
up by former members of ActMedia an in-store marketing company,
which was sold to News Corporation for in excess of

Total sales revenues for the year were $1,583,589 which is due
to the substantial growth in the number of "supercard"
advertising clients and increase in the total number of
installed supermarkets. There were 34 consumer goods companies
representing 109 different brands that participated in the BAMK
Supercards Network. In addition, there was a significant
increase in the number of participants during the course of the
year. In the first 6 months of 2002 there were a total of 35
brand participants as compared to 74 in the last 6 months of
2002, a 47% increase.

BrandAid completed new store installations in 653 supermarkets
in 10 new DMA's (Designated Market Area). At 2002 year-end,
there are a total of 1,168 supermarkets installed with BrandAid
Supercard Displays. This total represents coverage in 10 out of
the top 20 DMA's. Markets installed with BrandAid include: New
York, Los Angeles, Chicago, Dallas, Houston, Baltimore,
Washington, Atlanta, Austin, Denver, Seattle, Portland, and

BrandAid Marketing has a National contract with Safeway, the
fourth leading supermarket chain in the US and a Southeastern US
contract with Kroeger the second leading supermarket chain in
the US. In the New York metropolitan area, BrandAid has an
alliance with Pathmark, a leading Supermarket chain in that

BrandAid Marketing delivered 45,795,000 Supercards and 2,843,000
CD ROM's to consumers in supermarkets. The number of Supercards
increased significantly between the first and second half's of
2002, in the first 6 months of the year 12,461,000 SuperCards
were distributed compared to 33,334,000 in last 6 months of
2002, a 267% increase.

BrandAid Marketing has a signed partnership with AOL Time-Warner
Global Marketing Services. Under the agreement, AOLTW will sell
BrandAid Marketing as an extension of their sales package for
major CPG and service clients. BAMK will be included in all
AOLTW summer up-front sales. In addition, AOLTW will communicate
with their entertainment divisions that a unique opportunity
exists to advertise directly with BrandAid. Lastly, BrandAid
will receive use of various AOLTW entertainment (ROS movies for
example) for co-branding sales originating on the BrandAid
Marketing side.

For the upcoming fiscal year, BrandAid projects that revenues,
supermarket installation and card distribution will double as
compared to 2002.

The Company's operating revenues reflect the sale of both Gemini
and Futronix, in that the financial statements reflect that both
businesses are discontinued operations, and not going concerns.
On that basis, the Company had no revenues from ongoing
operations in 2001, and sales of $1,583,589 in 2002. The Gross
loss, after calculating cost of goods sold was $268,002. This
was due to the write off of all display purchases in the current
year as part of the Cost of Goods Sold, rather than amortizing
the cost over a number of years. This will lead to a truer
picture of sales, costs, and profits in future years.

General and administrative expenses were $1,631,616 for the
fiscal year ended December 31, 2001, as compared to $2,079,329
for the current year.

The losses incurred as a result of the operations of Gemini and
Futronix (loss from discontinued operations) was $1,067,046 in
the year ended December 31, 2001. The Company also incurred
losses on the disposal of Gemini and Futronix in the sum of
$1,855,655 in the current fiscal year. The majority of this loss
was due to the decrease in value of the stock portion of the
consideration for the sale of Futronix to Trident Systems
International, Inc.

The net loss for the fiscal year ended December 31, 2002 was
$2,939,662, as compared to a net loss for the fiscal year ended
December 31, 2001 of $4,663,750. The net loss for the period is
primarily attributed to start up costs for its new business.
Management feels that the Company will be profitable in its new
business and income should improve considerably in fiscal 2003.

On December 31, 2002, the cash and investment certificate
position of the Company was $4,636. Current assets on December
31, 2002 were $1,234,309.

Nothwithstanding managements prognosis of improved conditions in
the future, the Certified Public Accountants for the Company
included the following in their Auditors Report dated
February 14, 2003: "[T]Company has suffered recurring losses
from operations that raises substantial doubt about its ability
to continue as a going concern."  That statement was made in
reference to the financial statements prepared for the Company
for the year ended December 31, 2002.

BRIDGE INFO: Plan Administrator Wins Nod for Tolling Agreements
Bridge Information Systems, Inc.'s Plan Administrator sought and
obtained the Court's authority to enter into Tolling Agreements
with a limited number of Potential Preference Defendants wherein
the period for him to file preference actions is extended from
February 15, 2003, to and including August 15, 2003.

Salient terms of the Tolling and Waiver Agreement are:

1. Tolling, Suspension, and Waiver of Limitations Periods

    The Parties agree that all statute of limitations or repose
    and any other applicable limitations periods governing or
    relating in any way to the Plan Administrator's Claims,
    including, but not limited to, the statute of limitations
    set forth by Section 546(a) of the Bankruptcy Code, and any
    other defense, doctrine or statute that would bar the
    assertion of the Claims based on or relating to the passage
    of time or delay, are tolled, suspended, and will cease to
    run, and are waived as a defense or bar to the Plan
    Administrator's Claims from February 14, 2003, until the
    termination date of the Period, or as set forth in any
    extension of the Agreement.  In any action commenced by the
    Plan Administrator prior to the termination of the Tolling
    Period, the Potential Preference Defendant agrees not to
    plead or otherwise assert as a defense any statute of
    limitations, statute of repose, defense of laches, or any
    other time-based defense, rule, law or statute, including,
    but not limited to, the statute of the party asserting it as
    of February 14, 2003.  This Agreement is without prejudice
    to any defense based on any statute or period of limitations
    or repose that may have expired prior to February 14, 2003;

2. Tolling Period

    The tolling, suspension, and waiver will remain in effect
    from February 14, 2003 until August 15, 2003.  The
    August 15, 2003 deadline may be extended by further
    agreements by the Parties;

3. Calculation of Limitations Period

    The Parties agree to exclude the Tolling Period from any
    calculation of time in determining the application of any
    statutes of limitations or repose, claim of laches, or other
    provision of statute, case law, rule, or regulation,
    including, but not limited to, the statute of limitations
    set by Section 546(a), otherwise limiting the Plan
    Administrator's right to preserve and prosecute its Claims
    against the Potential Preference Defendant;

4. Commencement of Action by Plan Administrator

    The Parties acknowledge that the Plan Administrator may, in
    his sole and absolute discretion, at any time during the
    operation of this agreement commence a lawsuit against the
    Potential Preference Defendant.  The lawsuit may assert any
    and all Claims and other liabilities the Plan Administrator
    may have against the Potential Preference Defendant and the
    Parties do not intend, nor will this Agreement be
    interpreted to imply, any obligation or agreement to provide
    prior notice to the Potential Preference Defendant or any
    other party or person of the Plan Administrator's intention
    to commence a lawsuit or to pursue any and all Claims;

5. No Admissions

    The Parties acknowledge that this Agreement has been
    executed in an attempt to facilitate the investigation and
    analysis of the Plan Administrator's Claims and that this
    Agreement will not be deemed an admission by any party for
    any purpose.  This Agreement will not be admissible for any
    purpose other than to rebut a defense based on or relating
    to the passage of time or delay; and

6. Representations and Warranties

    Each party represents and warrants to the other Parties

    (a) that Party has carefully read this Agreement;

    (b) that Party understands that this Agreement contains
        binding provisions;

    (c) that Party has consulted his or its own legal counsel
        regarding the terms of, and the appropriateness of
        entering into, this Agreement; and

    (d) that Party is entering into this Agreement of his or its
        own free will, without any threat, duress, or coercion

    Each party further represents and warrants to the other
    Parties that the individual signing this Agreement on that
    Party's behalf has been duly authorized to so sign.

Ms. Mulch contends that the extension of the period for filing
preference actions is supported by the law and in the best
interest of the estate since:

    (a) Pursuant to Section 105(a) of the Bankruptcy Code, the
        Court possesses the requisite power to permit the Plan
        Administrator to enter into Tolling Agreements with the
        Potential Preference Defendants;

    (b) although there is a split of authority among the courts
        of appeals pertaining to this matter, the better view
        is that the statute of limitations in Section 546(a) is
        not jurisdictional in nature.  In the case of Smith v.
        Mark Twain National Bank, "the two-year limitations
        period sets a time frame in which an action brought
        under Section 549 may be commenced; it has nothing to do
        with the jurisdiction of the United States federal

    (c) Bankruptcy Courts have approved the use of Section
        546(a) in the enforcement of Tolling Agreements; and

    (d) Legislative history confirms that the use of Tolling
        Agreement is proper. (Bridge Bankruptcy News, Issue No.
        41; Bankruptcy Creditors' Service, Inc., 609/392-0900)   

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

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

The salient terms of the Term Sheet are:

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

   B. Purchased Assets:

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

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

      -- certain assets of Budget France; and

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

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

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

   E. Conditions to Closing:

      -- the acquisition by BRACII of the Licensee Confirmation

      -- compliance with various foreign competition laws;

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

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

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

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

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

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

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

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

      Avis Europe is permitted to terminate the Purchase
      Agreement for a variety of reasons, including, the
      Debtors' breach of representations, warranties and
      covenants and failure of the Debtors to achieve certain
      milestones, including approval of the French Purchase
      Agreement, obtaining entry of the Sale Procedures Order by
      January 15, 2003, and failure to close the Purchase
      Agreement by February 18, 2003 -- unless extended by Avis
      Europe. (Budget Group Bankruptcy News, Issue No. 16;
      Bankruptcy Creditors' Service, Inc., 609/392-0900)   

CABLEVISION SYSTEMS: Declares Quarterly Preferred Dividend
Cablevision Systems Corporation (NYSE:CVC) announced quarterly
dividends on CSC Holdings, Inc.'s three series of preferred
stock: -- 11-3/4% Series H Redeemable Exchangeable Preferred
Stock - ($2.9375 per preferred share paid in cash) -- 11-1/8%
Series M Redeemable Exchangeable Preferred Stock - ($2.78125 per
depositary share paid in cash)

The record date for dividends on the Series H and M Preferred
stock will be March 21, 2003. The payment date will be April 1,
2003. -- 10% Series A Exchangeable Participating Preferred Stock
- ($15.28 per preferred share paid in kind)

The record date for the initial dividend on the Series A
Preferred will be March 15, 2003. The payment date will be
April 1, 2003.

Cablevision Systems Corporation -- whose corporate credit rating
has been downgraded by Standard & Poor's to BB -- is one of the
nation's leading entertainment and telecommunications companies.
Its cable television operations serve 3 million households
located in the New York metropolitan area. The company's
advanced telecommunications offerings include its Lightpath
integrated business communications services, its Optimum-branded
high-speed Internet service and iO: Interactive Optimum, the
company's digital television offering. Cablevision's Rainbow
Media Holdings, Inc., a wholly-owned subsidiary, operates
programming businesses including AMC, The Independent Film
Channel, WE: Women's Entertainment, and other national and
regional services. In addition, Rainbow is a 50 percent partner
in Fox Sports Net. Cablevision also owns a controlling interest
and operates Madison Square Garden and its sports teams
including the Knicks and Rangers. The company operates New
York's famed Radio City Music Hall and owns and operates THE WIZ
consumer electronics stores and Clearview Cinemas in the New
York metropolitan area.  Additional information about
Cablevision Systems Corporation is available on the Web at

CADENCE RESOURCES: Williams & Webster Airs Going Concern Doubt
"[T]he Company's significant operating losses raise substantial
doubt about its ability to continue as a  going concern," the
Auditors Report prepared by Williams & Webster, P.S., of
Spokane, Washington, says in opining about Cadence Resources
Corporation, L.P.'s financial statements for the year ended
December 31, 2002.

Cadence Resources Corporation (formerly Royal Silver Mines,
Inc.) was incorporated in April of 1969 under the laws of the
State of Utah primarily for the purpose of acquiring and
developing mineral properties.  The Company changed its name
from Royal Silver Mines, Inc. to Cadence Resources Corporation
on May 2, 2001 upon obtaining approval from its shareholders and
filing an amendment to its Articles of Incorporation.  The

On July 1, 2001, Cadence developed a plan for acquisition,
exploration and development of oil and gas properties and
accordingly began a new exploration stage as an energy project
development company.  Prior  to this, Cadence conducted its
business as a "junior" mineral resource company, meaning that it
intended to receive income from property sales or joint ventures
of its mineral projects with larger companies.  The Company
continues to hold several mineral properties.

Celebration Mining Company, currently a wholly owned subsidiary
of Cadence, was incorporated for the  purpose of identifying,
acquiring, exploring and developing mining properties.  
Celebration was organized  on February 17, 1994 as a Washington
corporation.  Celebration has not yet realized any revenues from
its  planned operations.

The Company has had only minimal revenues from operations during
the last two years. It intends to spend its existing cash on
exploration on its existing oil and gas leases in Texas.  The
Company does not intend to acquire any additional oil and gas
leases until it completes exploration operations on its existing
leases  in Texas, Michigan and Louisiana.  The Company intends
to drill at least one additional well in Texas in the first
calendar quarter of 2003.  The Company also intends to fund
drilling activities in Michigan during the same period,
depending on availability of funding.  Its drilling time
schedule is dependant upon raising sufficient capital to fund
the drilling and completion of successful wells, if any.
Currently, the Company does not have adequate funds to commence
all of the drilling operations it contemplates.

The Company will need additional capital to drill wells. The
amount of capital required is dependant on  the success it has
on its earliest wells because the Company anticipates funding
some future drilling of wells from cash flow out of these
earlier wells if they are commercially successful. Further,
drilling  success typically facilitates the raising of
additional capital, although that may not always be the case.
The Company hopes to reduce its dependence on new finances by
completing sufficient wells and establishing sufficient revenues
to fund its operating costs as well as provide capital for new
wells.  That is, because the Company maintains a small overhead
it intends to deploy a majority of the income from the sale of
oil or gas to drill and complete other  wells.  There is no
assurance, however, that the Company's proposed and planned
drilling operations will prove successful.  If they do not prove
successful, the Company will have to rely upon future new
finances from outside funding sources in order to continue its

Cadence may sell a portion of the working interest in one or
several of the new wells to investors in order to raise the
capital to drill the wells.  In this way the Company may be able
to drill the well from capital raised from outside investors and
thus the "dry hole risk" to the Company is reduced if not
totally  eliminated.  The major disadvantage is that the Company
will give up a percentage of its future cash flow to the working
interest investors which will reduce Company revenues and
profits in the future from successful wells. On balance, because
of the overall advantages and benefits of "working interest
financing", the  Board chose to make use of such technique on
its initial two wells, and may continue to use this tool, if  
warranted, in the future.

As stated above, the Company's auditors have issued a going
concern opinion.  This means that the Company's auditors believe
there is substantial doubt that the Company can continue as an
on-going business for the next twelve months unless it obtains
additional capital.  This is because the Company has generated
only minimal revenues from its oil and gas operations and no
additional revenues are assured until it  successfully completes
more oil and/or gas wells. Accordingly, the Company must raise
cash from sources other than the sale of oil or gas found on its
property.  Generally, the Company will seek to raise capital
from outside investors.

COMPUTER SUPPORT: Court Approves Conversion to Chapter 7
Proxity Digital Networks Inc., (Pink Sheets:PDNW) announces the
bankruptcy court has approved subsidiary Computer Support
Associates, Inc., move from Chapter 11 protection to Chapter 7

Proxity Digital CEO Billy Robinson notes, "The Chapter 11
reorganization plan CSA filed in August called for a 100% payout
to creditors in the form of a convertible preferred stock and a
negotiated settlement with the IRS. The loss of the GSA1
contract eliminated the financial viability of moving forward
with this plan. This week's Chapter 7 decision by the court will
remove approximately $1.5 million of CSA related debt from the
balance sheet of Proxity. Revised financials have been posted on
our Web site Since Computer Support  
Associates, Inc. is no longer an operating subsidiary every
Proxity resource has now been allocated to the development and
launch of On Alert GDS(TM) and getting it to market as quickly
as possible."

Proxity Digital Networks, Inc., is a New Orleans based
development company with additional marketing, sales and
business offices in Tulsa, Irvine, and Washington D.C. The
Company's divisions specialize in the deployment and integration
of security protection technology, government contract
fulfillment, high-speed Internet access and Internet web
applications. Proxity is acquiring security technology that will
support a full line of interoperable protection disciplines.
Proxity has the exclusive global license on the patent-pending
On Alert Gunshot Detection System (GDS)(TM) being developed by
Synchros Technologies, Inc. First stage development and testing
is taking place in Oklahoma. Second-generation prototypes are
set for beta testing deployment in early 2003.

CONSECO FINANCE: Court Okays Debtor-Affiliates' Inclusion in DIP
Conseco Finance Corporation and its debtor-affiliates obtained
the Bankruptcy Court's approval to:

* incorporate all terms of the FPS DIP Order;

* authorize the CFC Subsidiary Debtors to execute the necessary
   documents to become parties to that certain Secured Super-
   Priority DIP Credit Agreement among CFC, the Subsidiary
   Guarantors, CIHC, Inc., and FPS DIP LLC;

* deem the CFC Subsidiary Debtors subject to the FPS DIP
   Order; and

* grant to the parties-in-interest in the CFC Subsidiary
   Debtors' Chapter 11 cases all rights granted to the CFC
   Debtors, FPS DIP, LLC, U.S. Bank or any other party under the
   FPS DIP Order. (Conseco Bankruptcy News, Issue No. 11;
   Bankruptcy Creditors' Service, Inc., 609/392-0900)   

CONSECO: TOPrS Panel Taps Fox-Pitt Kelton for Valuation Services
The Official Committee of Conseco Trust Originated Preferred
Debtholders has selected Fox-Pitt, Kelton as its Insurance
Company Valuation Expert because of its expertise and
specialization within the insurance industry.  Fox-Pitt is a
wholly owned subsidiary of Swiss Reinsurance.  Fox-Pit is an
internationally recognized investment banking firm with five
offices located throughout the world employing more than 225
professionals.  Additionally, Fox-Pitt maintains a presence in
the capital markets and has one of the largest coverage of
research in the financial services sector.  Over the last three
years, Fox-Pitt's investment banking group has been involved in
more than 100 assignments with a gross value exceeding

Fox-Pitt has served as an insurance valuation expert or co-
manager in some of the largest transactions in the insurance
industry, including the initial public offerings of Principal
Financial Group, Met Life and John Hancock, to name a few.

Fox-Pitt is expected to:

    a) analyze the Debtors' valuation of their insurance company

    b) prepare valuations of the insurance subsidiaries;

    c) advise the Committee on the analyses performed;

    d) prepare a written report for the Committee on its
       findings; and

    e) provide court testimony on the valuation of the insurance

Fox-Pitt will charge a $175,000 monthly fee and a $500,000
completion fee.  Fox-Pitt will also seek reimbursement for all
reasonable out-of-pocket expenses.

E. Grace Vandecruze, Senior Vice President at Fox-Pitt, relates
that the firm searched its client databases to determine any
relationships with parties-in-interest in these cases.  Swiss
Re, the parent of Fox-Pitt, and its reinsurance affiliates may
engage in transactions with the Debtors, creditors and other
parties in its normal course of business.  Specifically,
Reassure America Life Insurance Company and Swiss Re Life and
Health America -- two reinsurance affiliates, are reinsurers to
the Debtors.  Fox-Pitt has compliance procedures in place to
ensure that confidential information is not available to
employees of Swiss Re or any affiliates.

Given the number of parties comprising the Debtors and their
creditors and investors, it is unlikely that any major
investment banking firm could be found that does not have
relationships with some of the parties.  However, Fox-Pitt is
confident that it is disinterested and holds no materially
adverse interest on matters on which it is to be retained.
(Conseco Bankruptcy News, Issue No. 11; 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  
real-time bond pricing.

CORAM HEALTHCARE: Daniel Crowley Will Go . . . on March 31
Daniel D. Crowley, who served as Coram's Chairman of the Board
of Directors, Chief Executive Officer and President through
November 29, 2002, convinced Arlin M. Adams, Esquire, the
Chapter 11 trustee for the bankruptcy estates of Coram
Healthcare Corporation and Coram, Inc., to continue his
employment for a while and pay him a $1 million termination
fee.  That won't happen, Judge Walrath ruled at a hearing last
week as she denied the Chapter 11 Trustee's Motion.

Coram, a provider of home infusion-therapy services, is
operating as a debtor-in-possession under Chapter 11 bankruptcy
protection from its creditors. Under the supervision of a
Chapter 11 Trustee, the Company operates more than 70 branches
in 40 states and Canada while it restructures its debt. Services
include tube feeding and treatments for transplant patients and
people with infectious diseases and hemophilia. Coram also rents
and sells medical and respiratory therapy equipment and --
through subsidiary CTI Network -- offers support services for
clinical research studies.

Coram filed for bankruptcy protection on August 8, 2000  (Bankr.
D. Del. Case No. 00-03299) in Wilmington.  Judge Walrath denied
confirmation of two chapter 11 plans based on a taint she saw
with Mr. Crowley serving as Coram's CEO, Mr. Crowley doing work
for Cerberus Capital Management LLP in another chapter 11 case,
Cerberus' position as on of Coram's largest creditors, and
allegations that Cerberus would pay Mr. Crowley a bonus in
another deal if the Coram deal was a success.

Sam Zell drives the Equity Committee, represented by Richard F.
Levy, Esq., at Jenner & Block, LLC, in Chicago, and the Zell-
Cerberus struggle to take control of Coram's destiny has been
widely publicized.

On the heels of Judge Walrath's ruling, Mr. Crowley tendered his
resignation to Mr. Adams on March 5, effective as of March 31,

Judge Walrath reserved decision on the Equity Committee's Motion
to force Mr. Crowley to disgorge all amounts paid to him and
Dynamic Healthcare from Coram's estates.

COVANTA ENERGY: Wants to Extend and Amend DIP Credit Facility
Pursuant to Sections 105 and 364 of the Bankruptcy Code, Covanta
Energy Corporation and its debtor-affiliates ask the Court to:

  (a) approve an anticipated amendment to the DIP Credit
      Agreement dated as of April 1, 2002 to provide for, among
      other things:

      -- an extension of the final maturity date of the
         financing through October 1, 2003; and

      -- fees to be paid to Bank of America, N.A. as
         Administrative Agent, to Deutsche Bank AG, New York
         Branch, as Documentation Agent and to the lenders
         under the DIP Agreement; and

  (b) amend the Final DIP Order.

James L. Bromley, Esq., at Cleary, Gottlieb, Steen & Hamilton,
in New York, relates that the Debtors' DIP Agreement will mature
on April 1, 2003.  Unless extended, the DIP Lenders' commitments
will terminate and all outstanding obligations under the DIP
Agreement will have to be paid in full, in cash on that date.

Mr. Bromley states that the availability provided under the DIP
Agreement is important to the successful reorganization of the
Debtors' businesses.  Accordingly, the Debtors entered into
discussions with the DIP Lenders regarding the amendment of the
DIP Agreement and anticipate that the DIP Amendment will provide
for, among other things:

  (i) a six-month extension of the DIP Agreement's termination
      date; and

(ii) fees to be paid to the DIP Agents and the DIP Lenders.

Mr. Bromley contends that the Court should approve the
anticipated DIP Amendment because:

  (a) its terms will be fair and reasonable under the

  (b) it will maintain the Debtors' relationships with their
      clients, suppliers and DIP Lenders;

  (c) it will preserve and enhance the Debtors' operations; and

  (d) it will enable the Debtors to maintain the necessary
      liquidity to operate their business and to make the
      necessary capital expenditures through the remainder of
      their Chapter 11 cases. (Covanta Bankruptcy News, Issue
      No. 24; Bankruptcy Creditors' Service, Inc., 609/392-0900)   

CTC COMMUNICATIONS: Plan Filing Exclusivity Extended Until May 1
By order of the U.S. Bankruptcy Court for the District of
Delaware, CTC Communications Group, Inc., and its debtor-
affiliates obtained an extension of their exclusive periods.  
The Court give the Debtors, until May 1, 2003, the exclusive
right to file their plan of reorganization and until June 30,
2003, to solicit acceptances of that Plan.

CTC Communications Group, Inc., a source provider of voice,
data, and Internet Communications services to medium and larger
sized business customers, filed for chapter 11 protection on
October 3, 2002 (Bankr. Del. Case No. 02-12873).  Pauline K.
Morgan, Esq., at Young, Conaway, Stargatt & Taylor represent the
Debtors in their restructuring efforts. When the Company filed
for protection from its creditors, it listed $306,857,985 in
total assets and $394,059,938 in total debts.

DENBURY RESOURCES: Texas Pacific Sells 2.5 Million Shares
Denbury Resources Inc., (NYSE:DNR) announced the sale of 2.5
million shares of Denbury common stock owned by affiliates of
the Texas Pacific Group, which will reduce TPG's ownership of
Denbury from approximately 36.8% to 32.2%. Closing is expected
to occur on or about March 12, 2003.

Additionally, TPG has granted the underwriter a 30-day option to
purchase up to an additional 375,000 shares to cover over-
allotments, if any. Denbury will not receive any of the proceeds
from the sale of shares by TPG. This offering will not affect
the number of Denbury shares issued and outstanding.

This sale of 2.5 million shares, together with TPG's sale of 7.5
million shares in late 2002, equals the total of 10 million
shares of Denbury common stock that TPG originally announced it
intended to offer in November 2002.

Lehman Brothers Inc. will serve as underwriter for the offering.
When available, copies of the prospectus supplement and
accompanying prospectus may be obtained from Lehman Brothers
Inc. at Lehman Brothers, c/o ADP Financial Services, Integrated
Distribution Services, 1155 Long Island Avenue, Edgewood, NY

Denbury Resources Inc. -- is a growing  
independent oil and gas company. The Company is the largest oil
and natural gas operator in Mississippi, holds key operating
acreage onshore Louisiana and has a growing presence in the
offshore Gulf of Mexico areas.

                            *   *   *

As previously reported, Standard & Poor's raised the corporate
credit rating on Denbury Resources Inc., to double-'B'-minus
from single-'B'-plus and revised its outlook to stable from

The upgrade on Denbury's corporate credit rating reflects:

      -- Management's continuing maintenance of leverage that is
consistent with the double-'B' rating category; since the severe
industry downturn of 1998-1999 when Denbury's financial
resources were strained, the company has operated with a more
disciplined financial philosophy, including protecting cash
flows with commodity price hedges, when appropriate.

      --Expected improvement in the company's financial profile
resulting from likely elevated oil prices in 2002.

      --Expectations for prudent reinvestment of upcycle cash
flows. --Good production growth during the next two years from
Denbury's long lead-time development projects in Mississippi,
which will further enhance the company's debt-service capacity.

DICE INC: Wants Nod to Hire White & Case as Special Counsel
Dice, Inc., asks for permission from the U.S. Bankruptcy Court
for the Southern District of New York to employ White & Case LLP
as its Special Counsel to perform various non-bankruptcy legal
services necessary during this chapter 11 case.

The Debtor relates the since July 17, 2000, White & Case has
served as general outside counsel to the Debtor and certain of
its non-debtor affiliates.  In its role as special counsel, the
Debtor expects White & Case will continue to provide services to
the Debtor in connection with general corporate, corporate
governance, securities and merger and acquisition matters,
pension and employee benefit matters, tax matters, financing
matters, intellectual property matters and other postpetition
transactions and special litigation matters.

White & Case will also continue to represent the Debtor in
ongoing litigation arising from the Debtor's right to
indemnification from Jupitermedia Corporation.

White & Case will not be rendering services typically performed
by a debtor's bankruptcy counsel. Among other things, White &
Case will not ordinarily be involved in the interfacing with
this Court nor will White & Case be primarily responsible for
the Debtor's general restructuring efforts or other matters
involving the conduct of the Debtor's chapter 11 case.
Pachulski, Stang, et al. and White & Case have discussed their
respective duties and responsibilities to ensure that there will
be no duplication of effort.

The Debtor will engage the services of White & Case in exchange
of the firm's current standard hourly rates of professionals
which range from $95 to $750 per hour.

Dice Inc., provides career management solutions to tech
professionals via online job board,, through non-debtor
subsidiary Dice Career Solutions, Inc., and certification
preparation and assessment products through non-debtor
subsidiary MeasureUp, Inc.  The Company filed for chapter 11
protection on February 14, 2003 (Bankr. S.D.N.Y. Case No. 03-
10877). Robert Joel Feinstein, Esq., at Pachulski Stang Ziehl
Young Jones & Weintraub, represents the Debtor in its
restructuring efforts.  When the Company filed for protection
from its creditors, it listed $38,795,000 in total assets and
$82,080,000 in total debts.

DOMAN INDUSTRIES: Canadian Court Rejects Proposed CCAA Plan
Doman Industries Limited's draft Plan of Compromise or
Arrangement recently submitted to the Supreme Court of British
Columbia in connection with proceedings under the Companies
Creditors Arrangement Act was not approved for dissemination to
Creditors based upon objections to the form of the Draft Plan
raised by an ad hoc committee of the holders of Doman's senior
secured notes.  Objections raised by Doman's preferred
shareholders were rejected by the Court at this juncture.  
Doman intends to revise its Draft Plan based upon the Court's
directions and re-submit it to the Court within the next few

Doman expects that a revised Plan will be approved by the Court
for presentation to its Creditors for their approval some time
in April.

KPMG Inc., serves as the Monitor in Doman's Companies Creditors
Arrangement Act proceeding.  KPMG's latest financial reports
concerning Doman are available at:

Doman -- see is an integrated Canadian  
forest products company and the second largest coastal woodland
operator in British Columbia. Principal activities include
timber harvesting, reforestation, sawmilling logs into lumber
and wood chips, value-added remanufacturing and producing
dissolving sulphite pulp and NBSK pulp. All the Company's
operations, employees and corporate facilities are located in
the coastal region of British Columbia and its products are sold
in 30 countries worldwide.

DYNEGY: Fitch Downgrades Senior Debt Ratings To CCC+ From B
Dynegy Holdings Inc.'s (DYNH) senior unsecured debt and Dynegy
Inc.'s (DYN) indicative senior unsecured debt have been lowered
to 'CCC+' from 'B'. In addition, the long-term ratings of
affiliated companies, Illinois Power (IP) and Illinova Corp.
(ILN) have been lowered, as shown below. Short-term debt ratings
at DYN, DYNH, and IP are withdrawn. All ratings for DYN and its
affiliates remain on Rating Watch Negative.

The downgrades and current rating levels at DYN reflect Fitch's
latest assessment of the company's overall credit profile and
anticipates the successful renewal and restructuring on a
secured basis of DYNH's $1.3 billion of maturing bank credit
facilities and a separate $360 million lease financing on
communications assets (Polaris). DYN ratings recognize the
structural subordination of unsecured lenders to its bank
lenders based upon a likely resolution to ongoing negotiations.

However, if the bank facilities are not renewed on a favorable
basis further ratings downgrades would likely be warranted. In
particular, the current downgrade acknowledges the likelihood of
lower recovery levels in a default scenario for the $2 billion
of DYNH-level debt which will remain unsecured following the
conclusion of current bank negotiations.

DYNH's $900 million bank credit facility matures on April 28,
2003 and its $400 million facility matures on May 27, 2003.
Timing of the bank loan restructurings is critical since lenders
on the DYNH $900 million facility have provided a waiver that
remains effective through March 31, 2003 relating to a 3.5 times
(x) EBITDA-to-interest coverage test, without which the company
would be unable to comply with at this time. In addition, the
Polaris lease contains a 65% debt-to-capitalization test that
could possibly be triggered based on year-end 2002 results that
are expected to be finalized by the end of March. A default on
either of these financial covenants could result in lenders
accelerating the outstanding obligations under the credit
facilities, as well as triggering cross default provisions for a
significant portion of DYN's outstanding debt.

Ratings also consider the practical difficulties facing
management in executing a longer-term business plan under
difficult market conditions that is designed to shed poor
performing and cash draining operations and gradually de-
leverage the balance sheet.

DYN's consolidated company liquidity was about $1.5 billion at
Jan. 28, 2003 and with the renewal and extension of the bank
facilities and a favorable restructuring/extension of $1.5
billion of preferred stock held by ChevronTexaco (CVX) that
matures in November 2003, available liquidity should remain
above $1.0 billion for the remainder of 2003. This will provide
time for management to take certain planned actions. However,
even if DYN is able to restructure its tolling arrangements and
exit communications, future cash flows from its remaining core
operations remain weak relative to its high debt burden. Any
financial recovery will be gradual. While management has done a
good job to date in maximizing the value of the businesses it
has sold, future financial flexibility is limited since DYN does
not have a large portfolio of remaining assets outside of core
operations that it can sell to generate cash to pay down debt.
On a consolidated basis, DYN has about $8.4 billion of debt
obligations not counting the $1.5 billion of CVX preferred stock
and payment obligations under its tolling agreements with a net
present value of about $1.3 billion. Furthermore, while recent
efforts to eliminate third-party marketing and trading
activities has helped ease collateral requirements and improve
liquidity, the company must continue to provide substantial
amounts of collateral to support its generation and midstream

The Negative Rating Watch status reflects the execution risk
associated with restructuring the bank credit facilities and the
CVX preferred stock, the expected difficulty in restructuring
tolling arrangements and exiting communications operations, and
the negative overhang from ongoing FERC investigations and
potential litigation.

The downgrades to IP and ILN reflect the large intercompany
loans and the structural and functional ties between the
affiliated companies. IP relies on payments under a $2.3 billion
note receivable from ILN for a large portion of its operating
cash flows. Approximately $170 million of annual interest is
received under the note which is comparable in amount to about
80% of Fitch's estimate of IP's annual 2002 EBITDA excluding
contributions from transmission operations and transition
funding bond related revenues. This loan originally compensated
IP for the transfer of its generating assets to a subsidiary of
ILN that eventually became a subsidiary of DYNH when ILN was
purchased in 1999.

Through another intercompany note with similar terms, DYN
provides the funds to ILN to support its obligations to the
utility, thus the payments to IP effectively track back to DYN.
For its part IP makes payments to DYNH under a power purchase
agreement that currently expires at the end of 2004. In the
event that IP would not receive payments on the note, its
financial condition would be materially adversely impacted. In
October 2002, the Illinois Commerce Commission (ICC) issued an
order establishing a netting arrangement in which IP will not be
obligated to make payments to DYN for general and administrative
costs (G&A) and income taxes should ILN fail to make interest
payments to IP on the intercompany note. The netting agreement
also permits DYN to withhold interest payments if IP fails to
make payments for G&A or income taxes. However, in the event of
a bankruptcy or insolvency of DYN, it is uncertain as to whether
or not the netting agreement would be enforceable. The ICC also
agreed in October 2002 to restrict IP from distributing
dividends to DYN as long as the utility remains below investment

In December 2002, IP issued $550 million of 11.50% first
mortgage bonds due 2010, with proceeds used to repay debt and to
be available for future cash needs. Also, IP has agreed to sell
its electric transmission assets to Trans-Elect, and independent
transmission company, for $239 million. The sale is conditioned
on Trans-Elect receiving FERC approval of its levelized rates
application for a 13% return on equity and the transaction is
being reviewed by the ICC, FERC and the SEC. It is possible that
the purchase price of the assets will be adjusted downward to
meet the 13% return requirement. The available cash remaining
from the IP bond financing combined with proceeds from the
proposed transmission sale should provide adequate liquidity for
the remainder of 2003. However, if the transmission sale is not
approved, IP would likely require financial support from DYN.
IP's $100 million bank facility matures on May 20, 2003 and may
not be renewed. In addition, IP has $276 million of debt
maturities during the remainder of the year, most of them
occurring in the 3rd quarter of the year.

The following ratings have been downgraded and remain on Rating
Watch Negative:


    --  Indicative senior unsecured debt to 'CCC+' from 'B';  
    --  Short-term debt withdrawn;  


    -- senior unsecured debt to 'CCC+' from 'B';

    -- Short-term debt withdrawn;

    Illinois Power Co.

    -- senior secured debt and pollution control bonds to 'B'
       from 'BB-';

    -- indicative senior unsecured debt to 'CCC+' from 'B';

    -- preferred stock to 'CC' from 'CCC';

    -- short-term debt withdrawn;

    Illinova Corp.

    -- senior unsecured debt to 'CCC+' from 'B'.

EAGLE FOOD: Congress Financial Extends Limited Waiver Agreement
Eagle Food Centers Inc., (Nasdaq: EGLE) has received an
extension on the Limited Waiver Agreement with Congress
Financial Corporation. The waiver agreement calls for Congress
Financial Corporation to waive any default rights under the
adjusted net worth covenant in the Second Amended and Restated
Loan Agreement until April 5, 2003.

"We are very pleased with the confidence that Congress Financial
Corporation has exhibited by granting us an additional waiver
extension. We believe that this extension will allow us to
continue to explore all options available to the Company," said
Robert Kelly, Chairman and CEO.

The Company also announced that its current Collective
Bargaining Agreement with UFCW Locals 881 and 1546 has been
extended to August 1, 2003. The Union agreement originally
expired on November 16, 2002 and has been extended by three
prior agreements. "The extension to our Collective Bargaining
Agreement ensures that our employees will continue to provide
our customers with the same high standards of service they have
come to expect from Eagle Food Center stores." Mr. Kelly added.

Eagle Food Centers, Inc. is a leading regional supermarket chain
headquartered in Milan, Illinois, operating 61 stores in
northern and central Illinois and eastern Iowa under the trade
names of Eagle Country Market and BOGO'S Food and Deals.

ECHOSTAR COMMS: Dec. 31 Shareholder Deficit Widens to $1.2 Bill.
Echostar Communications Corporation, through its DISH Network,
is a leading provider of satellite delivered digital television
entertainment services to customers across the United States.
DISH Network provides advanced digital satellite television
services, including hundreds of video, audio and data channels,
interactive television channels, personal video recording, high
definition television, international programming, professional
installation and 24-hour customer service.

The Company started offering subscription television services on
the DISH Network in March 1996. As of December 31, 2002, the
DISH Network had approximately 8.18 million subscribers. It now
has eight direct broadcast satellites in operation that enable
it to offer over 500 video and audio channels to consumers
across the United States. The Company believes that the DISH
Network offers programming packages that have a better "price-
to-value" relationship than packages currently offered by most
other subscription television providers. As of December 31,
2002, there were over 19 million subscribers to direct broadcast
satellite and other direct-to-home satellite services in the
United States. EchoStar believes that there are more than 89
million total pay television subscribers in the United States,
and there continues to be significant unsatisfied demand for
high quality, reasonably priced television programming services.

On December 9, 2002 EchoStar reached a termination, settlement
and release agreement with General Motors and Hughes Electronic
Corporation to terminate its proposed merger with Hughes.  Under
the terms of the settlement, Hughes retained its 81% ownership
interest in PanAmSat, which EchoStar was previously obligated to
purchase at a price of $22.47 per share, or approximately $2.7
billion. The Company also paid a $600 million merger termination
fee to Hughes.

Effective December 23, 2002 the Company repurchased all of its
outstanding Series D Convertible Preferred Stock from Vivendi

Effective February 1, 2003, EDBS redeemed all of its outstanding
9-1/4 % Senior Notes due 2006. In accordance with the terms of
the indenture governing the notes, the $375 million principal
amount of the notes was repurchased at 104.625 percent, for a
total of approximately $392 million. The premium paid of
approximately $17 million, along with unamortized debt issuance
costs of approximately $3 million, have been recorded as charges
to earnings as of February 1, 2003.

Total revenue for the year ended December 31, 2002 was $4.821
billion, an increase of $820 million, or 20%, compared to total
revenue for the year ended December 31, 2001 of $4.001 billion.
The increase in total revenue was primarily attributable to
continued DISH Network subscriber growth. The increase in total
revenue was partially offset by EchoStar's free and reduced
price programming promotions.

Net loss was $882 million during the year ended December 31,
2002, an increase of $667 million compared to net loss of $215
million for the same period in 2001. The increase was primarily
attributable to an increase in other expense. The increase in
net loss was partially offset by an improvement in operating

The Company expects that its future working capital, capital
expenditure and debt service requirements will be satisfied
primarily from existing cash and investment balances and cash
generated from operations. Its ability to generate positive
future operating and net cash flows is dependent upon, among
other things, its ability to retain existing DISH Network
subscribers. There can be no assurance that it will be
successful in achieving any or all of its goals. The amount of
capital required to fund its 2003 working capital and
capital expenditure needs will vary, depending, among other
things, on the rate at which it acquires new subscribers and the
cost of subscriber acquisition, including capitalized costs
associated with its Digital Home Plan. EchoStar's capital
expenditures will also vary depending on the number of
satellites under construction at any point in time. Its working
capital and capital expenditure requirements could increase
materially in the event of increased competition for
subscription television customers, significant satellite
failures, or in the event of continued general economic
downturn, among other factors. These factors could require that
the Company raise additional capital in the future.

As of December 31, the Company's balance sheet shows a total
shareholders' equity deficit of about $1.2 billion.

ENCOMPASS SERVICES: Honoring Postpetition Insurance Obligations
Judge William Greendyke allows Encompass Services Corporation
and its debtor-affiliates to honor all postpetition installments
under their prepetition insurance premium financing agreements
and to maintain the CNA Policies and other existing Insurance
Policies on an uninterrupted basis consistent with their
prepetition practices.  The Debtors are also permitted to enter
into new premium finance agreements or renew the existing
premium finance agreements and insurance policies in the
ordinary course of their business as the terms of the finance
agreements or policies expire.  The Debtors may grant security
interest to the finance companies in any unearned premiums.

                         *    *    *

As previously reported, Encompass Services Corporation and its
debtor-affiliates finance certain premium and loss fund payments
due under their insurance policies.  They pay an initial down
payment and monthly installments thereafter to a finance
company, Canawill, Inc.  The Debtors' obligations to pay
Canawill are secured by the value of any unearned premiums for
the applicable policy.  At present, the Debtors finance premiums
and loss fund payments on these three policies:

      (1) general liability insurance;
      (2) automobile liability insurance; and
      (3) workers' compensation insurance.

The Debtors have combined their loss estimates for the three
lines of coverage included in the CNA Policies and have
established a total of $47,150,000 in annual estimated claims.
This retention amount represents the deductible portion of all
insured claims that the Debtors will be required to fund on an
annual basis.  The Debtors presently maintain a deductible of
$250,000 per claim under the CNA Policies.

The Debtors segregate their $47,150,000 retention amount into
four distinct layers of liability, each of which is subject to
distinct funding methods:

  (a) The first layer consists of all covered claims filed
      against the Debtors up to the total amount of $6,600,000.
      If a claim falls within this first layer of coverage, the
      Debtors' insurance carrier, CNA, pays the claim on their
      behalf.  Then CNA submits an invoice to the Debtors
      seeking reimbursement for the amounts paid;

  (b) The second layer consists of retention amounts of all
      covered claims filed against the Debtors which exceed
      $6,600,000 but which are less than $32,500,000.  If a
      claim falls within this second layer of coverage, CNA
      pays the claim with funds it holds on behalf of the
      Debtors in an offshore escrow account located in Bermuda.
      The Debtors will pay 1/2 of fund used to pay the claims in
      cash on or before the effective date of the CNA Policies,
      while the other half is financed through monthly
      installments of $700,268 to Canawill -- the Canawill Note.
      To date, second layer claims against the Debtors have not
      yet exhausted this coverage.  Accordingly, Canawill
      retains certain funds in escrow on behalf of the Debtors;

  (c) The third layer consists of retention amounts of all
      claims filed against the Debtors which exceed $32,500,000
      but which are less than $35,500,000.  Claim under this
      category will be paid by CNA.  CNA will then submit an
      invoice to the Debtors for reimbursement of the amounts it
      paid; and

  (d) The fourth layer consists of all claims exceeding
      $35,500,000 but less than $47,150,000.  The full amount of
      the claims under this coverage will also be paid by CNA.
      CNA then submits to the Debtors an invoice seeking
      reimbursement for 81% of the amounts it paid.

To maintain coverage under the CNA Policies, the Debtors fund
the loss payment premiums under the Canawill Note.  They also
pay an $8,137,241 annual premium for the CNA Policies.  The
annual premium is not financed through a premium finance company
but is instead paid to Canawill through the Debtors' insurance
broker, Lockton Insurance Agency of Houston, Inc.  To satisfy
the annual premium, the Debtors made an $870,828 initial payment
to Lockton.  They continue to shed $660,583 in monthly,
interest-free installment payments.

                    Other Insurance Policies

In addition to the CNA Policies, the Debtors also maintain
insurance coverage for:

* property and marine liability;
* aviation/aircraft non-ownership liability;
* business auto physical damage liability;
* casualty liability (foreign) package, commercial crime;
* contractors professional and pollution liability;
* directors and officers liability;
* fiduciary liability;
* employment practices liability;
* executive risk liability;
* flood coverage, marine cargo coverage, owners and contractors
  protective liability;
* pollution and remediation, railroad protective liability;
* stop gap coverage for health insurance claims; and
* temporary disability.
(Encompass Bankruptcy News, Issue No. 8; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

ENRON CORP: Examiner Neal Batson Brings-In 8 Contract Attorneys
Enron Examiner Neal Batson notifies the Court that he intends to
retain two additional contract attorneys to perform specific
document review tasks pursuant to the Retention Order.  The
attorneys to be retained are:

    (a) Michael O'Neill, Esq.; and

    (b) Fischer Reed, Esq..

Dennis J. Connolly, Esq., at Alston & Bird LLP, in Atlanta,
Georgia, assures the Court that to the best of Mr. Batson's
knowledge, information and belief, the Attorneys do not hold any
disqualifying interest adverse to the Debtors' estates in any
manner upon which they are to be engaged in. (Enron Bankruptcy
News, Issue No. 58; Bankruptcy Creditors' Service, Inc.,

DebtTraders reports that Enron Corp.'s 9.875% bonds due 2003
(ENRN03USR3) are trading at about 15 cents-on-the-dollar. See
for real-time bond pricing.

EOTT ENERGY: US Trustee Amends Creditors' Committee Membership
Pursuant to Sections 1102(a) and 1102(b)(1) of the Bankruptcy
Code, the United States Trustee for Region 7, Richard W.
Simmons, amends the appointment of EOTT Energy's Official
Committee of Unsecured Creditors to reflect the resignation of
Derek Schrier of Farallon Capital Management, LLC:

       1. John Robert Chambers, Chairman
          Lehman Energy Fund
          600 Travis, Ste 7330
          Houston, Texas 77002

       2. Steven J. Tallmadge
          Northwestern Mutual Life Insurance Co.
          720 E. Wisconsin Ave.
          Milwaukee, Wisconsin 53202

       3. Keith Chan
          The Dreyfus Corporation
          200 Park Ave.
          New York, New York 10166

       4. Max Volmar
          The Bank of New York
          101 Barclay St. 8W
          New York, New York 10286
(EOTT Energy Bankruptcy News, Issue No. 12; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

EPICEDGE INC: Consents to Delisting from American Stock Exchange
EpicEdge, Inc. (AMEX: EDG), an information technology consulting
firm, received a notice from the AMEX Staff on February 28,
2003, indicating that EpicEdge no longer complies with the
Exchange's continued listing standards. EpicEdge has informed
the Exchange that it will not appeal, and will consent to, the
Exchange's decision to remove the listing of the Company's
common stock from the Exchange. This action became necessary
because EpicEdge no longer fully complies with the Exchange's
continued listing requirements. In particular, the Company has
not complied with Section 1003(a)(i) of the AMEX Company Guide,
because shareholders' equity of the Company was less than
$2,000,000 and losses from continuing operations and/or net
losses in two of its three most recent fiscal years. Also, in
light of its inability to meet the continued listing
requirements of the Exchange, the Company has elected not to pay
portions of the Exchange's applicable listing fees in accordance
with Section 1003(f)(iv). The Company has also been informed by
the Exchange that it does not comply with Section 1003(b)(i)(c),
which states that the Exchange will normally consider suspending
dealings in, or removing from the list, a security if the
aggregate market value of shares publicly held is less than
$l,000,000 for more than 90 consecutive days. Finally, under
Section 1003(f)(v), the Company's common stock has been selling
for a substantial period of time at a low share price, recently
closing at $.06 per share. The Exchange has advised the Company
that after the appeals deadline of March 7, 2003, has passed,
the Exchange will suspend trading in EpicEdge's stock and will
submit an application to the SEC to strike the Company's common
stock from listing and registration on the Exchange.

EpicEdge will make an announcement if trading resumes on the OTC
Bulletin Board, the Pink Sheets or any other exchange or market.

EpicEdge, Inc., whose September 30, 2002 balance sheet shows a
total shareholders' equity deficit of about $11 million, is an
information technology consulting firm that helps state and
local government agencies, as well as commercial enterprises,
meet their business goals through implementation and support of
client/server and Internet-enabled PeopleSoft enterprise
resource planning software applications, custom Web application
development, and strategic consulting. We deliver successful IT
project-based services by combining the elements of market-
leading products, highly skilled technical personnel, and proven
project methodologies. Our business technology solutions help
clients maximize ROI and lower their total cost of ownership.

FARMERS HOME: Counterparty & Fin'l Strength Ratings Cut to Bpi
Standard & Poor's Ratings Services lowered its counterparty
credit and financial strength ratings on Farmers Home Mutual
Insurance Co., and Pioneer Insurance Co., to 'Bpi' from 'BBpi'
on March 7, 2003. In addition, the 'Bpi' counterparty credit and
financial strength ratings on Western Home Insurance Co., were

"In 2001, Farmers Home Mutual Insurance Co. Group had a net loss
of $7.2 million, compared with a net loss of $4.1 million in
2000," noted credit analyst Allison MacCullough. She added "The
Group's operating performance for the first nine months of 2002
has also been poor, with a net loss of $1.7 million."

Ratings with a 'pi' subscript are insurer financial strength
ratings based on an analysis of an insurer's published financial
information and additional information in the public domain.
They do not reflect in-depth meetings with an insurer's
management and are therefore based on less comprehensive
information than ratings without a 'pi' subscript. Ratings
with a 'pi' subscript are reviewed annually based on a new
year's financial statements, but may be reviewed on an interim
basis if a major event that may affect the insurer's financial
security occurs. Ratings with a 'pi' subscript are not subject
to potential CreditWatch listings.

Ratings with a 'pi' subscript generally are not modified with
"plus" or "minus" designations. However, such designations may
be assigned when the insurer's financial strength rating is
constrained by sovereign risk or the credit quality of a parent
company or affiliated group.

GLIATECH INC: Selling Anti-Inflammatory Program to Solentix
Solentix BioSciences, Inc., announced the proposed purchase of
an anti-inflammatory research platform from Gliatech Inc.
(GLIAQ.PK). Gliatech entered a motion Thursday in the U.S.
Bankruptcy Court for the Northern District of Ohio to sell
certain patent rights and contracts of its anti-inflammatory
research platform to Solentix. Such agreement is subject to
Bankruptcy Court approval and final corporate approvals, and the
transaction is expected to close at the end of first quarter of

Solentix is a newly formed pharmaceutically-based biotechnology
company located in Cleveland, Ohio. Solentix's core business
strategy is to develop therapeutics for major unmet clinical
needs for chronic central nervous system ("CNS") diseases. The
worldwide market opportunity for CNS therapeutic targets is in
excess of $44 billion. Solentix has initially targeted
development of novel treatments for chronic brain diseases
including depression, schizophrenia, drug addiction and

With the proposed acquisition, Solentix will build on its core
business strategy to include novel therapeutics for acute and
chronic inflammatory conditions. Such conditions may be
associated with cardiopulmonary bypass surgery, heart attacks,
stroke and rheumatoid arthritis. The market potential for
therapeutic targets aimed at preventing inflammation in acute
conditions is expected to grow to $6 billion, and in chronic
conditions to over $7 billion in the next ten years.

Gliatech presently owns certain patents related to the
complement protein, properdin. This protein appears to play an
important role in regulating inflammatory responses in both
acute and chronic conditions. Gliatech and Abgenix, Inc. have an
agreement that provides Abgenix with an exclusive license to
develop and commercialize anti-properdin antibody therapies in
exchange for research funding and other potential payments. The
joint development program under this contract may be terminated
at Abgenix's discretion, whereby Gliatech would have the option
to continue development. The proposed purchase if approved by
the bankruptcy court would assign this contract to Solentix. In
addition, as part of the consideration of the sale, Gliatech
would receive certain milestone payments from Solentix upon
successful development by either Abgenix or Solentix. With the
acquisition, Solentix plans to hire certain Gliatech scientists
to support its internal research and development activities.

"We believe this proposed acquisition is a positive development
for all parties," stated Clark E. Tedford, Ph.D., Solentix
President and CEO. "Solentix will add a new technology platform
to its portfolio and that will provide for additional financing
opportunities for this new venture."

As part of the agreement, Solentix also will assist in the
closure of the Gliatech estate and provide further support to
the sale and transfer of the other Gliatech assets that remain
in the estate or have recently been sold. "The goal is to
maximize value of the Gliatech assets and allow for satisfactory
transition to the new buyers," added Dr. Tedford. "Solentix also
will benefit in being able to establish operations on an
accelerated timeline to create an exciting new biotech
opportunity for Northeast Ohio."

GLOBALSTAR LP: Receives Final Approval of $10-Mil. DIP Financing
Globalstar, L.P., announced that on March 6, 2003, the U.S.
Bankruptcy Court in Delaware granted final approval of the
company's $10 million debtor-in-possession credit facility. The
Court had earlier granted approval on an interim basis, making
an initial $4 million available to the company, and yesterday's
approval will lead to the release of the remaining $6 million,
subject to the terms of the DIP loan agreement.

In the meantime, Globalstar is continuing its process of
identifying potential bidders for the company, with final
selection, subject to court approval, expected to be completed
by early April.

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

GOODYEAR TIRE: S&P Puts BB- Sr. Unsec. Debt Rating on Watch Neg.
Standard & Poor's Ratings Services placed its 'BB-' rating on
certain of Goodyear Tire & Rubber Co.'s senior unsecured debt on
CreditWatch with negative implications. The CreditWatch
placement reflects a likely significant increase in the
proportion of secured debt in the company's balance sheet
once current bank financing negotiations are completed. At the
same time, Standard & Poor's affirmed its 'BB-' corporate credit
rating and negative outlook on Goodyear. Goodyear is expected to
close on its secured bank facilities in late March or early
April 2003.

The new, secured facilities would effectively rank senior to the
unsecured notes. The unsecured notes would likely be lowered to
one notch below the 'BB-' corporate credit rating at that time,
based upon the proposed proportion of secured debt. The
unsecured notes are currently rated equal to the corporate
credit rating, as almost all debt is unsecured.

Akron, Ohio-based Goodyear, the world's largest tire
manufacturer, had total debt of about $5 billion at Sept. 30,

Goodyear's lenders have granted the company waivers until
April 4, 2003, to comply with certain covenants that would have
required Goodyear to contribute about $500 million to its
pension plans in excess of payment requirements arising from
federal mandates. Under the waivers, the company has access to
about $1.1 billion in two revolving credit facilities. The
company has stated it will not announce fourth-quarter 2002
results until negotiations with its lenders are complete.

The ongoing bank negotiations are critical to stabilizing the
company's near-term liquidity situation, so that management can
focus on improving profitability at its North American Tire

"Without certain significant revisions to its credit facilities,
Goodyear could face near-term liquidity issues," said Standard &
Poor's credit analyst Nancy C. Messer.

Expected pension funding through 2005, together with significant
near-term debt refinancing requirements, would exceed internal
cash generation if financial performance fails to improve. Debt
maturities are scheduled to rise significantly in 2004, but
completion of the pending bank financings will minimize
maturities over the next two years.

Also, the company faces labor union contract negotiations in the
spring of 2003 that could raise its ongoing cost structure and
pension obligations. The company's underfunded pension liability
of approximately $2 billion at year-end 2002 adds increased risk
to the capital structure. Goodyear's $700 million accounts-
receivable securitization program in the U.S. (Wingfoot A/R
LLC), with $528 million outstanding at Dec. 31, 2002, expires in
December 2003 but would be replaced by the facilities under
negotiation. The accounts-receivable program has a ratings
trigger requiring the company to maintain a minimum long-term
unsecured debt rating of 'BB-'/'Ba3'.

HEXCEL CORP: Prices $125-Million Senior Secured Note Offering
Hexcel Corporation (NYSE/PCX: HXL) has priced $125.0 million in
principal amount of 9-7/8% Senior Secured Notes due 2008.

The notes will be issued at a slight discount, resulting in an
effective yield of 10-1/8% and gross proceeds to Hexcel of
$123,690,000. The notes will be secured on a first-priority
basis by substantially all of Hexcel's domestic fixed assets and
will be guaranteed by Hexcel's material domestic subsidiaries.
The proceeds from the notes will be used to repay amounts
outstanding under Hexcel's existing senior credit facility.

The offering is conditioned upon the refinancing of Hexcel's
existing senior credit facility and the consummation of Hexcel's
previously announced preferred stock financing. Hexcel expects
this private offering, the previously announced preferred stock
financing and the refinancing of the existing senior credit
facility to close simultaneously on March 19th, 2003.

The notes issued pursuant to this offering will have
registration rights but will not be initially registered under
the Securities Act of 1933 and may not be offered or sold in the
United States absent registration or an applicable exemption
from registration requirements.

Hexcel Corporation and certain persons may be deemed to be
participants in the solicitation of proxies relating to the
issuance of a total of 125,000 shares of a series A convertible
preferred stock and 125,000 shares of a series B convertible
preferred stock to affiliates of Berkshire Partners LLC and
Greenbriar Equity Group LLC, and affiliates of The Goldman Sachs
Group, Inc., for an aggregate of $125.0 million in cash. The
participants in such solicitation may include the Company's
executive officers and directors. Information concerning such
participants is contained in the Company's definitive proxy
statement filed with the Securities and Exchange Commission on
February 14, 2003 on Schedule 14A in connection with such

                         *     *     *

As reported in Troubled Company Reporter's Thursday Edition,
Standard & Poor's assigned its 'B' rating to Hexcel Corp.'s
proposed $125 million senior secured notes due 2008 that are to
be offered under SEC Rule 144a with registration rights. At the
same time, Standard & Poor's affirmed its 'B' corporate credit
rating on the advanced structural materials manufacturer. The
outlook is negative.

The proceeds from the proposed debt offering, in combination
with a portion of the proceeds from the sale of $125 million in
preferred stock to certain investors, will be used to refinance
and pay down the company's existing secured credit facility. The
remaining proceeds from the preferred stock sale will be used to
repay the subordinated notes maturing in August 2003. In
addition, Hexcel is arranging a new credit facility to meet
working capital needs. The notes are secured by substantially
all domestic property, plant, and equipment. The transactions
are expected to close simultaneously by the end of the first
quarter of 2003.

"The refinancing and preferred stock issuance will alleviate
near-term liquidity concerns regarding the return to stricter
bank covenants in the first quarter of 2003 and upcoming debt
maturities. Therefore, the outlook will likely be revised to
stable from negative after the transaction closes," said
Standard & Poor's credit analyst Christopher DeNicolo.

HIGHLANDS INSURANCE: Plan Confirmation Hearing Convenes Mar. 17
The U.S. Bankruptcy Court for the District of Delaware approved
a Disclosure Statement explaining the Joint Plan of
Reorganization filed by Highlands Insurance Group, Inc., and its
debtor-affiliates.  The Bankruptcy Court finds that the
Disclosure Statement complies with 11 U.S.C. Sec. 1125 and
contains adequate information to permit the creditors to make
informed decisions about whether to assume or reject the Plan.

As previously reported in the Troubled Company Reporter's
November 8, 2002 issue, the Debtors filed their Prepackaged Plan
and the accompanying Disclosure Statement with the Court.  The
plan wipes-out equity interests and pays unsecured creditors a
fraction of what they're owed.  

The Bankruptcy Court will convene a hearing to consider
confirmation of the Plan on Monday, March 17, 2003 at 9:30 a.m.

Highlands Insurance Group, Inc., and its debtor-affiliates are
insurance holding companies or insurance service companies which
operate a property and casualty insurance business.  The Company
filed for chapter 11 protection on October 31, 2002 (Bankr. Del.
Case No. 02-13196).  When they filed for protection from its
creditors, the Debtors listed $1,643,969,000 in total assets and
$1,820,612,000 in total debts

INBUSINESS SOLUTIONS: Commences $2-Mil. Equity Private Placement
InBusiness Solutions Inc., (TSX Venture: BIZ.T) has entered into
an agreement with TrekLogic Technologies Inc., (TSX Venture:TKI)
regarding an equity private placement of $2,000,000 in gross
proceeds. Pursuant to the Funding, InBusiness will issue
30,000,000 equity units as follows:

     - $500,000; 10,000,000 common shares at $0.05 per share and
       10,000,000 common share warrants where one warrant plus
       $0.10 will entitle the holder to acquire one share for a
       period of twenty-four (24) months from the Closing Date;

     - $1,500,000; 20,000,000 common shares at $0.075 per share
       and 20,000,000 common share warrants where one warrant
       plus $0.10 will entitle the holder to acquire one share
       for a period of twenty-four (24) months from the Closing

Currently, InBusiness has 18,485,807 common shares issued and

Pursuant to the agreement, TrekLogic will provide InBusiness
with an immediate $500,000 secured working capital loan in the
form of a 12% convertible debenture on the terms noted above.
Subject to TrekLogic closing an equity funding, a further
$1,500,000, 12% convertible debenture on the terms noted above,
will be advanced to the Company prior to March 31, 2003.
Shareholder approval is required to permit the contemplated
transaction to close. The common shares issueable on conversion
of the debenture and exercise of the warrants will then be
subject to a Tier 1 Value Escrow which releases escrowed stock
at various times over an 18 month period. Failure to secure
shareholder approval will result in the convertible debenture
becoming due and payable on May 31, 2003

As previously disclosed, the past twelve months have been a
restructuring year for the Company which has moved aggressively
to optimise its cost structure, dispose of assets and businesses
unrelated to the core Information Technology business and
recapitalize the business operations. As part of the
restructuring, significant changes have been made to the
management and Board of Directors. Advisors, including
investment bankers, were engaged to assist in sourcing and
evaluating options that would provide optimal value for the
Company that would best protect the interests of creditors,
shareholders, employees, consultants and customers alike. After
reviewing various options, the TrekLogic investment was
determined by the Board of Directors, management and advisors to
be the option that was best for all stakeholders.

The core IT services operations of InBusiness have been
consistently profitable from their inception. The financial
difficulties experienced by InBusiness over the past 24 months
were the direct result of a business strategy that expanded the
Company into select media and dot-com based activities. The
current management team and Board are fully committed to the
core IT services business and have worked hard with all of our
employees, consultants and clients in executing a successful
restructuring. This private placement will significantly improve
the immediate working capital position of InBusiness and provide
capital for continued growth.

On receipt of the $500,000 working capital loan, the Board of
Directors of InBusiness will, subject to regulatory approvals,
immediately appoint John McKimm as a Director of InBusiness and
subsidiary companies to fill an immediate vacancy created by the
passing of Director, David Jolley.

As a result of closing the $2,000,000 financing, and upon
shareholder approval and conversion to InBusiness shares,
TrekLogic will have a controlling shareholding in InBusiness.
John McKimm, Chairman and CEO of TrekLogic, states, "InBusiness
fits well with TrekLogic's business strategy. TrekLogic has been
looking to add an Ottawa base, and InBusiness certainly meets
all our requirements. The business mix is very similar and we
expect significant synergies to result during the coming year."
Mark Quigg, President of InBusiness, states, "Mr. McKimm is very
familiar with InBusiness. He was active with our Company from
1987 through 2000 as a Director and Advisor. He left the Board
of Directors with the advent of our media and dot-com strategy.
We are pleased to be working with Mr. McKimm and TrekLogic, and
believe the combination has the potential to create significant
value for our shareholders, employees, consultants and clients
and provide InBusiness with a strong financial and operational
base from which to grow."

Conditional regulatory approval has been received for the
funding. Final approval is subject to shareholder approval,
expected to be obtained over the period to April 30, 2003.
Coincident with reaching the agreement with TrekLogic, the
Company has concluded a Forbearance agreement with its primary
banker effective to May 31, 2003 when it is expected that
further arrangements will be made to repay all outstanding debt
with the Bank of Montreal. Negotiations are ongoing with one
other significant creditor.

InBusiness is an established IT solutions and services company
that delivers technology solutions in business intelligence,
Oracle applications, systems integration and wireless/portal
applications. With a team of over 160 IT professionals,
InBusiness' clients include Fortune 500 corporations and
government departments located in both Canada and the United
States. For more information on InBusiness' IT solutions and
services, please contact the Company's Web site at

TrekLogic is an Information Technology Services company
providing software solutions and IT contract staffing services
to a high profile client base in Canada and the United States.
The software solutions business is primarily in the U.S. and is
built around a number of high value-added specialty practice
areas where TrekLogic has a competitive advantage, either due to
specialized expertise or proprietary software tools used in the
provision of services. The IT contract staffing business is
focused on the Toronto and Ottawa markets. TrekLogic has a
history of strong profitability with a debt-free balance sheet
and a positive working capital position of $1,449,142 at
September 30, 2002. TrekLogic's working capital position as at
December 31, 2002 was further improved to $1,809,675. Pre-tax
profitability for the year ending September 30, 2002 was
$1,704,969 or 26.3% of revenues, translating to $0.08 per common
share. Pre-tax profitability for the first quarter ending
December 31, 2002 was $395,153 or 18.3% of revenue, translating
to $0.018 per common share. The first quarter is traditionally
TrekLogic's weakest quarter due to the Christmas season. Tax
loss carryforwards, from companies acquired, eliminate any
requirement to pay taxes. For more information on TrekLogic,
please contact the TrekLogic Web site at

INDYMAC MH: Fitch Further Downgrades Four Junk-Rated P-T Certs.
Following a review of the underlying collateral, Fitch takes
ratings actions on the following IndyMac Manufactured Housing
Contract pass-through certificates:

Series 1997-1

     -- Classes A-2 - A-6 affirmed at 'AAA';

     -- Class M downgraded to 'BBB' from 'A' and removed from
        Rating Watch Negative;

     -- Class B-1 is downgraded to 'C' from 'CCC'.

Series 1998-1

     -- Classes A-3 - A-5 affirmed at 'AAA';

     -- Class M downgraded to 'BBB' from 'A' and removed from
        Rating Watch Negative;

     -- Class B-1 downgraded to 'C' from 'CCC'.

Series 1998-2

     -- Classes A-2 - A-4 affirmed at 'AAA';

     -- Class M-1 downgraded to 'BBB-' from 'A' and removed from
        Rating Watch Negative;

     -- Class M-2 downgraded to 'BB-' from 'BBB-' and removed
        from Rating Watch Negative:;

     -- Class B-1 downgraded to 'C' from 'CCC';

     -- Class B-2 downgraded to 'D' from 'C'.

These actions are a result of the continued poor performance of
the underlying collateral in the transactions.

Although IndyMac exited the manufactured housing lending
business in mid 1999, it continues to service its loans from
Pasadena where the company's mortgage loan servicing operation
is located. The lack of dealer relationships (as a result of
exiting the origination business) coupled with the oversupply of
repossessed homes in the marketplace, continues to put
significant pressure on recovery rates.

Since IndyMac exited the manufactured housing lending business,
Fitch has taken numerous rating actions on the company's
manufactured housing bonds. These actions are a result of the
continued poor performance of the underlying manufactured
housing loans in the transactions. The higher than expected
losses, has led to the complete depletion of over-
collateralization on all three transactions. As of the February
2003, distribution date, the cumulative loss percentages on
series 1997-1, 1998-1 and 1998-2 are 15.65%, 14.89% and 12.58%,

INTEGRATED HEALTH: Wolfe, et al. Ask Court to Apportion Benefits
Michael R. Lastowski, Esq., at Duane Morris LLP, in Wilmington,
Delaware, reminds the Court that on May 2, 2000, the Court
conducted a hearing on Integrated Health Services, Inc., and its
debtor-affiliates' request to approve a settlement agreement
dated April 11, 2000 among the IHS Debtors and the Senior
Housing Entities, together with all appendices and ancillary
agreements.  The IHS Debtors submitted pleadings concerning the
financial rationale for the Settlement Agreement. The Debtors
indicated that all objections to their request have been
resolved or withdrawn with the exception of the objection filed
by Buchanan/SCC, Inc., Galaxy Pest and Richard W. Wolfe.  It was
only the Wolfe Entities that furthered the interest of the
Debtors who were transferring positive cash flow facilities to
Senior Nursing.  In this regard, the Wolfe Entities objected
because Senior Nursing was paying no consideration to the
estates, which provided the benefits of the Settlement

IHS advised the Court that if the Settlement Agreement were
consummated, the IHS Debtors would enjoy:

    -- projected $16,889,000 in EBITDA after Capital
       Expenditures for the year 2000;

    -- more than $5,000,000 in savings in administrative rent
       payments; and

    -- the release of several millions of dollars of mortgage
       debt and other prepetition claims.

The Debtors believe that the Settlement Agreement presents the
best, indeed the only, feasible alternative for alleviating the
financial burden associated with the Senior Nursing related
facilities.  What the Debtors failed to point-out to the Court
was that the "aggregate improvement" was at the expense of the
estates that contributed positive cash flow facilities, yet they
received nothing in return.

Mr. Lastowski recounts that the Court asked whether the
transfers contemplated by the Settlement Agreement would
disadvantage the IHS Debtors that were transferring profitable
facilities to the Senior Nursing Entities.  In answer to this
inquiry, the Debtors admitted the cost of consummating the
Settlement Agreement would be at the expense of the estates,
which were transferring the profitable facilities.

Mr. Lastowski relates that Mr. Wolfe traveled to Sparks,
Maryland to take the deposition of Daniel Booth who had been
designated by the IHS Debtors as the individual with the most
knowledge of the facts surrounding the Settlement Agreement.  In
pertinent part, Mr. Booth testified that as a result of the
transfer of the facilities to Senior Nursing, one estate would
retain fee simple title to a facility located in Slidell,
Louisiana, and would be released from an $18,000,000 mortgage by
Senior Nursing, but in return was required to pay nothing for
the release.  The forgiveness almost equals the collectively
stated book value according to the balance sheet prepared by the
Debtors, which was produced in response to the discovery request
of the Wolfe Entities.  Mr. Booth further testified that 19
leased facilities would be transferred to the Senior Nursing
entities without any consideration other than a waiver of the
transferring entities obligation to make future payments.  In
actuality, there were 25 leased and managed homes transferred.  
Of the leases transferred, three estates transferred homes that
had combined positive EBTDAX of $994,851 per annum.  Yet, the
estates that contributed these facilities with positive EBTDAX
received no compensation in return for the transfer.  In
addition, the Cannonsburg, Pennsylvania facility received the
benefit of having its lease with Senior Nursing reduced from
$2,000,000 per annum to $1,200,000 while paying absolutely
nothing for the benefit.

Mr. Booth further testified that various estates were
contributing positive cash flow facilities to offset the
negative cash flow of other estates.  In particular Mr. Booth
testified, "This is part of the larger settlement whereby
certain other facilities are going to have either debts forgiven
or lease payments waived."  In addition to the homes leased by
Senior Nursing, all 12 mortgaged homes had a combined positive
EBTDAX of $3,234,568 per annum. Yet, these 6 estates that
transferred these facilities received no consideration for the

Mr. Booth further testified that 90% of the total negative cash
flow was attributable to only three facilities.  These three
homes were managed and had negative EBTDAX of $5,731,111 per
annum. Moreover, the exhibits attached to Mr. Booth's
deposition, conclusively established that nine facilities which
had not been previously leased by or encumbered were transferred
free and clear to Senior Nursing, yet five estates which
contributed these valuable assets, and which had a combined
positive EBTDAX of $876,255 per annum and a net book value of
$9,077,330, received no consideration in return for giving up
these facilities or their positive cash flow.

On July 7, 2000, the Court resumed the hearing on the motion to
approve the transfer to Senior Nursing and had been provided
with a proposed Order by IHS' counsel, which provided that the
estates that owned or leased the facilities being transferred
would receive the proceeds from the sale, if any.  Of course,
there were no proceeds and to this day, the estates have
received no consideration whatsoever in return for transferring
these valuable assets.

The Court noted that the IHS cases had not been substantively
consolidated and the Court expressed its concern with the Senior
Nursing transfer in this regard.  As a result, the Court amended
IHS' proposed order and entered its order reserving jurisdiction
to resolve these matters and ordered that the approval of the
Settlement Agreement was without prejudice to any claims of the
IHS Debtors' creditors or any claims of the IHS Debtors for an
allocation of the benefits conferred or the burdens incurred as
a result of the transactions to be effected under the Settlement
Agreement and transfer to Senior Nursing.

Senior Nursing later reported in a filing with the Securities
and Exchange Commission that:

    "At the beginning of 2000, we leased 27 nursing homes,
    including three with some adjacent senior apartments,
    located in nine states and had mortgage investments secured
    by 12 nursing homes in three states all of which were
    operated by IHS.  IHS stopped paying rent and debt service
    to us in January 2000 and filed for bankruptcy on
    February 2, 2000.  After the IHS bankruptcy, we negotiated a
    settlement of IHS' obligations to us as follows: IHS
    surrendered to us its leasehold interest for 26 of our
    properties, IHS gave us deeds to nine nursing homes
    (including one of which was closed) and various parcels
    of land which it had owned debt free and IHS paid us some of
    our rental arrearages.  In exchange, we released IHS from
    its obligations for the 26 surrendered leaseholds and the
    mortgaged properties, we released our mortgage for one
    property which was retained by IHS and the rent for one of
    our properties which IHS continues to operate was lowered
    and the lease term extended for a new 10-year period".

Senior Nursing further explained that:

    "IHS was unable or unwilling to pay us in money for the
    damages we incurred as a result of its lease terminations
    and mortgage defaults.  As part of the settlement approved
    by the IHS Bankruptcy court, IHS delivered title to nine
    nursing homes, which it previously owned debt free in
    partial satisfaction of our claims against IHS.  Because we
    did not own or mortgage these properties prior to the IHS
    bankruptcy, these properties were not foreclosed properties
    . . ."

As a result of the Settlement Agreement, Senior Nursing reported
that they recorded a $7,100,000 gain on the transaction and a
recovery of expenses amounting to $3,500,000.

Accordingly, the Wolfe Entities ask the Court find that these
benefits have been conferred and burdens incurred, and that the
benefits should be apportioned as that:

    A. The estate which owns the Slidell Louisiana facility
       has benefited $18,000,000 as a result of its mortgage
being released, without paying any consideration for the

    B. The Cannonsburg, Pennsylvania facility received the
       benefit of having its lease with Senior Nursing reduced
       by $800,000 per annum -- from $2,000,000 per annum to
       $1,200,000 -- without paying any consideration for the

    C. The estates have contributed both positive and negative
       cash flow facilities.  Yet, the estates have contributed
       facilities with positive cash flow to the Senior Nursing
       transaction but to date have received no consideration
       for having transferred the valuable assets;

    D. Senior Nursing benefited from the transfers to the
       Detriment of the transferring estates by realizing a
       $7,100,000 gain and recovering $3,500,000 in expenses to
       the detriment of the estates, which received no
       consideration for transferring the positive cash flow

    E. Four times EBTDAX is a reasonable multiple to determine
       the value of a nursing home or a nursing home lease.
       Accordingly, they have conferred a benefit by
       contributing facilities with an annual positive EBTDAX of
       $5,899,893 to the Senior Nursing transaction and after
       applying a multiple of four to the positive EBTDAX; and
    F. Through the efforts of the Wolfe Entities in pursuing the
       proper determination and apportionment of benefits
       conferred, the Wolfe Entities have single-handedly
       conferred a valuable benefit on the estates which
       transferred the positive EBTDAX facilities to Senior
       Nursing, but only if the Court grants the Wolfe Entities'
       request to apportion the proceeds from the sale between
       the IHS estates and THI, Inc.  In this event, the Wolfe
       Entities ask the Court pursuant to Sections 105 and 503
       of the Bankruptcy Code to compensate them for their
       efforts in an amount equal to 25% of the total benefit
       conferred, or $5,898,768, which sum will be paid directly
       at the time of closing from of the proceeds of the sale
       between IHS, the related cases and THI, Inc. if approved
       by this Court.  If the sale between IHS and the related
       cases and THI is not approved by the Court, the Wolfe
       Entities ask the Court to grant them an administrative
       expense in the IHS case and related cases equal to
       $5,898,768. (Integrated Health Bankruptcy News, Issue No.
       53; Bankruptcy Creditors' Service, Inc., 609/392-0900)   

INTERPOOL INC: Fitch Affirms BB+ Preferred Share Rating
Fitch Ratings has affirmed Interpool, Inc.'s 'BBB' senior
secured debt, 'BBB-' senior unsecured debt, and 'BB+' preferred
stock ratings. The Rating Outlook is Stable. Approximately $507
million of outstanding debt securities is covered by Fitch's

The rating affirmations follow Interpool's announcement on
March 6, 2003 that it will restate its full-year 2000 and 2001
financial statements. This will delay the completion of
Interpool's full-year 2002 audited financial statements until
late June 2003. Interpool's new auditors, KPMG LLP, is requiring
that the company restate its financial results due to errors
identified by management in the booking of what is believed to
be a small number of leases. Additionally, Interpool's Personal
Computer Rental will be reclassified as a part of continuing
operations in 2000 and 2001. This business is scheduled to be
fully unwound in 2003 and result in a $10 million write-up of
loans and guarantees to and on behalf of PCR by Interpool.

Minimal impact on Interpool's financial position is expected
from these non-cash adjustments and charges. Interpool is
expected to report a loss for the fourth quarter of 2002, due to
the PCR charges, but remain profitable for the full-year.
According to management, Interpool remains in compliance with
all of its financial covenants and book equity will decline by
$4 million or less, or about 1% of book equity, as a result of
the adjustments and charges.

While Interpool's situation remains manageable based on
currently available information, in contrast to other companies
that have been required to restate prior year financial data,
the company has lost, at least temporarily, much of the momentum
it had in the third quarter of 2002 in reducing financial
leverage. Interpool management, however, remains optimistic
regarding the company's prospects for 2003 as equipment
utilization rates have trended upward since mid-2002. Given the
favorable outlook for the business, Fitch expects that
significant progress will be made in Interpool's capitalization,
leverage, and profitability, especially within the context of
the current ratings.

Fitch's expectation is that financial leverage will decline.
Adjusted debt, defined as all on- and off-balance sheet
consolidated debt, and leases, divided by adjusted equity,
defined as common equity plus 65% of trust preferred securities,
declined to 4.36 times at Sept. 30, 2002 from 4.71x at Dec. 31,
2001. Fitch expects further improvement in this ratio in 2003.
Likewise, Fitch expects that Interpool's return on managed
assets and return on equity will trend upward toward their
historical levels of in excess of 2% and 12.50% in 2003,

Tracing its roots to 1968 and based in Princeton, NJ, Interpool,
Inc. through its subsidiaries is the largest lessor of domestic
chassis and the third largest lessor of marine containers in the

INTERPUBLIC GROUP: S&P Drops L-T & S-T Credit Ratings to BB+/B
Standard & Poor's Ratings Services lowered its long-term and
short-term corporate credit ratings on The Interpublic Group of
Cos. Inc., to 'BB+' from 'BBB-' and to 'B' from 'A-3',
respectively, due to its operating performance challenges,
particularly in the context of a weak economic environment.

At the same time, the ratings remain on CreditWatch with
negative implications where they were placed on Aug. 6, 2002.
New York, New York-based advertising agency holding company
Interpublic had total debt outstanding of approximately $2.6
billion at December 31, 2002.

"The downgrade is based on Interpublic's recent record of weak
profitability and higher debt to EBITDA, and the likelihood that
restoring earnings prospects and a financial profile
commensurate with prior ratings could take longer than
anticipated," said Standard & Poor's credit analyst Alyse
Michaelson. She added, "In addition to the turnaround required
at a number of business units, significant management attention
is being consumed as it strives to rebuild liquidity."

The CreditWatch resolution will depend on the company's plans to
refinance its zero coupon convertible note issue that is put-
able to the company, for cash, on Dec. 14, 2003, at the accreted
vale of $587 million, and the May 2003 expiration of the
company's currently unused $500 million revolving credit
facility. The ratings will be removed from CreditWatch
and affirmed at the 'BB+' level, if management is successful in
executing its anticipated capital markets transaction.

Organic revenue declines, insufficient control over agencies'
variable cost structures, and considerably lower margins
underscore the pressure on operating performance has been more
pronounced for Interpublic than its peers. Further, it is still
uncertain whether financial issues at the corporate level will
affect the pace and profitability of new business wins at the
various agencies within Interpublic. However, agencies, such
as McCann-Erickson, Deutsch, and FCB Worldwide, had significant
wins in the second half of 2002, and media buying unit Universal
McCann was recently named "Media Agency of the Year" for its
2002 performance. A sluggish growth outlook is likely to persist
throughout 2003 that could delay significant improvement in key
credit ratios.

Liquidity is derived from borrowing availability under the
company's credit facilities. Alternate sources of liquidity
include the sale of non-core assets, such as NFO Worldwide,
which is in the process of being sold. Still, asset sales alone
are not likely to provide sufficient liquidity. Dividend
reductions could result in a meaningful debt paydown,
but also would be insufficient alone to bridge liquidity needs.  

Standard & Poor's will monitor Interpublic's plans for
reestablishing earnings predictability and spreading out near-
term maturities, and will assess the company's near-term
operating outlook in resolving the CreditWatch listing. In
addition, the company is still the subject of an SEC
investigation into its earnings restatements.

IT GROUP: Committee Hires AlixPartners LLC as Claims Specialist
The Official Committee of Unsecured Creditors of The IT Group
Debtors seek the Court's permission to retain AlixPartners LLC,
nunc pro tunc to March 4, 2003, as a bankruptcy claims
specialist to assist in the process of bankruptcy claims and
preference recovery resolution.

Eric Sutty, Esq., at The Bayard Firm PA, in Wilmington,
Delaware, informs the Court that AlixPartners' services are
necessary for the evaluation of the potential allowed claims
pool cases, the likely recovery of preferential payments.  
AlixPartners will also assist in the prosecution and resolution
of claims objections and adversary proceedings brought under
Chapter 5 of the Bankruptcy Code.

In particular, AlixPartners will:

    (a) perform an initial assessment of the claims filed and
        scheduled against the Debtors, including the preparation
        of a written report;

    (b) perform an initial assessment of the potential value of
        preference recoveries, including the preparation of a
        written report;

    (c) provide further detailed analyses of all claims filed
        and scheduled in these Cases, and advise and assist in
        preparation of objections to disputed claims;

    (d) provide advice and assistance concerning the claims
        resolution process;

    (e) provide further detailed analyses of recoveries of
        preferential payments and advise and assist in the
        preparation of collection efforts, by demand letters and
        adversary proceedings; and

    (f) provide advice and assistance in connection with
        preference actions litigated before the Court.

AlixPartners will be compensated for its services in accordance
with the firm's discounted hourly rates plus reimbursement of
necessary expenses, subject to a $20,000 limit.  AlixPartners'
discounted hourly rates are:

                   Professional            Rate
                   ------------            ----
                   Principals              $395
                   Senior Associates        305
                   Associates               260
                   Consultants              215
                   Analysts                 150
                   Paraprofessionals        105

Meade A. Monger, a principal at AlixPartners, assures Judge
Walrath that the firm does not hold or represent any other
entity having an adverse interest in connection with the
bankruptcy cases.  AlixPartners is a "disinterested person" as
the term is defined in Section 101(4) of the Bankruptcy Code.  
Mr. Monger attests that:

   (i) AlixPartners is not employed by, and has not been
       employed by, any entity other than the Creditors'
       Committee in matters related to the Debtors' cases;

  (ii) From time to time, AlixPartners has provided services,
       and likely will continue to provide services, to certain
       creditors of the Debtors and various other parties
       adverse to the Debtors in matters unrelated to these
       cases. However, AlixPartners has undertaken a detailed
       search to determine, and to disclose, whether it is
       providing or has provided services to any significant
       creditors, equity security holders, insiders or other
       parties-in-interest in unrelated matters;

(iii) AlixPartners provides services in connection with numerous
       cases, proceedings and transactions unrelated to these
       cases.  These unrelated matters involve numerous
       attorneys, financial advisors and creditors, some of
       which may be claimants or parties with actual or
       potential interests in these cases or may represent those

  (iv) AlixPartners personnel may have business associations
       with certain creditors of the Debtors unrelated to these
       cases. In addition, in the ordinary course of its
       business, AlixPartners may engage counsel or other
       professionals in unrelated matters who now represent, or
       who may in the future represent, creditors or other
       interested parties in these cases; and

   (v) AlixPartners has 240 employees.  It is possible that
       certain employees of AlixPartners hold securities of the
       Debtors or interests in mutual funds or other investment
       vehicles that may own the Debtors' securities.

Mr. Monger also discloses that:

    -- Questor Partners Fund, L.P., a $300,000,000 fund and
       Questor Partners Fund II, L.P., an $865,000,000 fund, are
       private equity funds that invest in special situations
       and under-performing companies.  Neither Questor nor
       Questor II will make an investment in the Debtors for at
       least three years after AlixPartners' engagement

    -- Jay Alix, a principal in AlixPartners, is also the
       President and CEO of Questor Management Company, the
       entity that manages Questor and Questor II;

    -- Questor Management and AlixPartners are separate
       companies. AlixPartners, pursuant to a contract, performs
       certain accounting and back-room services for Questor
       Management. From time to time, Questor Management hires
       AlixPartners as a contractor to advise it regarding a
       potential acquisition.  Occasionally investee companies
       of Questor and Questor II hire AlixPartners.  In
       addition, AlixPartners employees are elected to the
       boards of directors of the investee companies of Questor
       and Questor II, but those employees are not involved in
this engagement;

    -- Mr. Alix owns interests in Questor General Partners, LP
       and Questor General Partner II, LP, the general partners
       of Questor and Questor II.  Albert Koch, Chairman of
       AlixPartners, is a limited partner in Questor General
       Partner II, as are the majority of the AlixPartners
       principals.  AlixPartners principals, except for Mr. Alix
       and Mr. Koch, are passive investors and have no voice in
       approving investments;

    -- Substantially all of the other principals of AlixPartners
       own limited partnership interests in one or more of these

          * Questor Side-by-Side Partners, L.P.,
          * Questor Side-by-Side Partners II, L.P., and
          * Questor Side-by-Side Partners II 3(c)(1), L.P.

       AlixPartners principals, except for Mr. Alix and Mr.
       Koch, are passive investors and have no voice in
       approving investments;

    -- Some of the limited partners of Questor and Questor II
       are affiliates of financial institutions that are also
       lenders to companies that may have retained AlixPartners.  
       The affiliates of those financial institutions are
       passive investors in Questor and Questor II and have no
       voice in approving investments; and
    -- Questor, Questor II, Questor Side-by-Side Partners,
       Questor Side-by-Side Partners II, and Questor Side-by-
       Side Partners II 3(c)(1) are all related entities.  The
       Side-by-Side funds contain, in the aggregate, 6.3% of the
       total Questor funds, which exceed $1,170,000,000. (IT
       Group Bankruptcy News, Issue No. 25; Bankruptcy
       Creditors' Service, Inc., 609/392-0900)  

KAISER ALUMINUM: Court Okays $65-Mill. Kaiser Center Asset Sale
Judge Fitzgerald authorizes Kaiser Aluminum Corporation and its
debtor-affiliates to consummate the sale of the Kaiser Center
assets with Summit Commercial Properties Inc. The Debtors will
apply the net proceeds of the sale in accordance with the DIP
Financing Order.

Simultaneous with the Closing of the sale, Judge Fitzgerald
rules that Summit and Newkirk Kalan, L.P. may execute their
letter agreement, under which Summit will pay $28,000,000 to
Newkirk Kalan in immediately available funds.  Newkirk Kalan
will assign its leasehold and fee interests in the Kaiser Center
to Summit. Summit is also permitted to pay off the outstanding
balances under the promissory notes secured by first and second
priority deeds of trust against the Kaiser Center.  Upon receipt
of the payments, Newkirk Kalan will cancel the notes and deeds
of trust.

In full satisfaction of Newkirk Kalan's remaining claim for the
basic rent under the Master Lease after February 28, 2003, and
without affecting any of the pro-ration provisions of the
Purchase Agreement between the Debtors and Summit, Judge
Fitzgerald further directs Summit to pay to Newkirk Kalan a
$10,136 "net income" settlement per diem beginning on March 1,
2003, and continuing through and including the Closing.  The
failure of Summit or Newkirk Kalan to perform their obligations
will constitute a violation of this Order but will not affect
any other provision or relieve Summit of its obligations to the

                         *    *    *

As previously reported, the salient terms of the purchase
agreement include:

A. Property Interests To Be Sold

   (1) The fee simple interest in the Kaiser Center grounds;

   (2) All lease interests of Kaiser Aluminum & Chemical
       Corporation, Kaiser Center, Inc. and Alwis Leasing, Inc.
       with respect to the Kaiser Center;

   (3) The Parking Lot;

   (4) The Zenith Note and the ReProp Note; and

   (5) The related security agreements and documentation and all
       permits, licenses, contracts, personal property, cash,
       receivables and security deposits related to the
       operation of the Kaiser Center.

B. Purchase Price

   Summit will pay $65,600,000.  Of that amount, $3,100,000 will
   be deposited before the closing.  The remainder will be
   payable at closing.

C. Due Diligence Periods

   Summit is allowed certain property and title due diligence
   periods, each of which is anticipated to expire soon.

   Summit has waived the financing conditions in the Agreement.

D. "As-Is" Condition

   Summit will take the Kaiser Center Assets in "as-is"
   condition, with all faults.  This includes the physical
   condition of the property, as well as the terms, covenants,
   conditions and limitations of all leases, contracts, notes,
   deeds of trust and security interests being acquired.

E. Assumed Executory Contracts & Unexpired Leases

   The Debtors will assume and assign to Summit all of their
   rights, title and interests in and to all executory contracts
   and unexpired leases related to the Kaiser Center Assets.
   Summit may also elect to have one or more of the leases
   rejected by notifying the Debtors in writing to that effect
   before the closing.

F. Permitted Liens

   (a) The First Deed of Trust dated as of August 15, 1983, made
       by Newkirk Kalan and Kaiser Center Inc. for the benefit
       of The Variable Annuity Life Insurance Company to secure
       a $79,575,000 promissory note;

   (b) The Second Deed of Trust dated as of August 15, 1983,
       made by Newkirk Kalan and Kaiser Center for the benefit
       of American General Life Insurance Company of Delaware to
       secure a $9,000,000 promissory note;

   (c) The Third Deed of Trust dated August 15, 1983, which
       encumbers the Kaiser Center Inc.'s and Newkirk Kalan's
       interests in the Kaiser Center;

   (d) The Fourth Deed of Trust dated August 15, 1983 which
       encumbers Newkirk's interests in the Kaiser Center;

   (e) The subordination, non-disturbance and attornment
       agreements dated August 15, 1983 by and among:

         (i) Variable Annuity, Alwis, Kaiser Aluminum, Kaiser
             Center and Newkirk Kalan;

        (ii) Variable Annuity, Alwis, Kaiser center and Newkirk

       (iii) American General, Alwis, Kaiser Aluminum, Kaiser
             Center and Newkirk Kalan; and

        (iv) Alwis, Kaiser Center and Newkirk Kalan.

   (f) Any security interest related to the liens;

   (g) The effect of any recorded leasehold interest in respect
       to the Kaiser Center assets; and

   (h) All other encumbrances deemed accepted by Summit.

G. Claims Indemnity

   Summit must hold and save the Debtors harmless from any and
   all loss, cost, damage, injury or expense arising directly or
   indirectly out of or as a result of the rejection of the
   leases, including but without limitation, any claim, demand
   or liability to Newkirk Kalan or to any tenant under any
   tenant leases in the building.

   At the closing of the sale transaction, Summit will deliver
   to the Debtors a Claims Indemnity.  The Claims Indemnity will
   be secured by a junior lien on the Kaiser Center assets.
   (Kaiser Bankruptcy News, Issue No. 23; Bankruptcy Creditors'
   Service, Inc., 609/392-0900)   

KMART CORP: Says Has Evidence that Ex-CEO Conaway Mislead Board
Charles C. Conaway misled the board, Kmart Corporation's
concludes, after completing its examination of the former Chief
Executive Officer's stewardship of the Company.  The Board
concludes that there is credible and persuasive evidence to
support a finding that Mr. Conaway engaged in conduct that
should support the commencement of trust claims against him and
which may also be subsumed within the contractual definition of
"cause" as that term is defined in the termination provisions of
Mr. Conaway's prior employment agreement with Kmart.

The Board believes that Mr. Conaway participated in the
implementation of a program to systematically suspend vendor
payments in an effort to avert an undisclosed potential
liquidity crisis in the fall of 2001.  Mr. Conaway was aware
that Kmart personnel were taking steps to preclude vendors from
learning the actual reasons why they were not being paid, and
failed to act to prevent it.

Mr. Conaway was behind the Bluelight Always program in 2001,
which was intended to compete with Wal-Mart's low prices.
According to analysts, the effort botched when Wal-Mart matched
Kmart's prices.

On January 22 and 23, 2003, Mr. Conaway testified at a
deposition attended by Skadden and representatives of the
Statutory Committees.  After that deposition, on February 11,
2001, Skadden provided further information to the Board
regarding the results of its investigation into Mr. Conaway's
stewardship of the Company.

The Board explains that the ex-CEO failed to disclose to Kmart's
outside directors and others significant information pertaining
to the nature and extent of the Company's liquidity problems
during the third and fourth quarters of fiscal year 2001.  Mr.
Conaway also failed to perform his duties as Chief Executive
Officer to adequately supervise and direct other Company
executives who reported directly or indirectly to him.  Mr.
Conaway permitted the Company executives to receive millions of
dollars in retention loans and other payments that they would
not have received had all material information been disclosed.

But Mr. Conaway denies these claims.  Mr. Conaway's counsel at
Sidley Austin Brown & Wood says that Mr. Conaway "poured his
heart and soul into trying to turn around the giant retailer."
Scott Lassar, Esq., at Sidley Austin told Bloomberg that the
Board's action "appears to be a misguided attempt to blame Mr.
Conaway for problems which long predated his tenure."

The Board re-affirmed its earlier direction that the Company
would not obtain approval from the Bankruptcy Court of any
employment-related agreements with Mr. Conaway and that the
Company demand repayment of special retention loans paid to all
special loan recipients including Mr. Conaway.  Mr. Conaway
received $5,000,000 in retention loan before parting ways with
Kmart in March 2002.  The Board of Directors also reaffirmed its
earlier conclusion that the appropriate mechanism for pursuing
whatever remedies Kmart may have against Mr. Conaway and other
subjects of Trust Claims is through the Kmart Creditor Trust
established under the Reorganization Plan. (Kmart Bankruptcy
News, Issue No. 49; Bankruptcy Creditors' Service, Inc.,

DebtTraders reports that Kmart Corp.'s 9.000% bonds due 2003
(KM03USR6) are trading at about 13 cents-on-the-dollar. See  
real-time bond pricing.

KNOWLEDGE LEARNING: S&P Assigns B+ Credit & Bank Loan Ratings
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to child-care services company Knowledge Learning
Corp. At the same time, Standard & Poor's assigned its 'B+' bank
loan rating to the company's proposed $235 million senior
secured term loan B and a $25 million senior secured revolving
credit facility.

The San Rafael, California-based KLC plans to use proceeds from
the proposed term loan, along with a $40 million seller note and
an equity investment, to acquire the larger, competing child-
care business of ARAMARK Corp., known as ARAMARK Educational
Resource, for approximately $265 million.

The outlook on KLC is stable. Following the transaction, the
company (a wholly owned subsidiary of Knowledge Schools Inc.)
will be the second-largest for-profit provider of child care and
early childhood education in the U.S., growing substantially
from 273 facilities currently to 897 operating in 33 states.
Total debt outstanding after the transaction will be
approximately $235 million, excluding the $40 million
seller note.

The rating on the secured bank loan is the same as the corporate
credit rating. The bank facility comprises a $25 million
revolving credit facility due 2008 and a $235 million senior
secured term loan B due 2010.

"The speculative-grade ratings on KLC reflect recently weak
demand trends and the company's limited financial resources,"
said Standard & Poor's credit analyst David Peknay. "These
factors overshadow the company's position as the second-largest
provider in the highly fragmented early child-care and
educational services industry."

The ratings also reflect the company's lack of a track record in
successfully operating as a much larger organization.

KLC benefits from the desire of families to find quality child
care emphasizing education and social interaction. It also
benefits from favorable demographic trends creating increased
demand for child-care services, including rising birth rates and
increasing participation of women in the workforce. However,
recent weakness in the national economy has led to softening
demand and an overall industry decline in occupancy rates.

Thus far, modest increases in average weekly tuition rates and
cost containment have mitigated the financial impact of the
occupancy declines. Nevertheless, the sustainability of tuition
increases is uncertain, and reduced enrollments and rising rent
and insurance costs may continue to pressure industry
profitability. For KLC, insurance costs are expected to be
stable for the next few years.

Operating margins are expected to be in the high teens as the
company consolidates its operations and closes underperforming
centers. Nevertheless, KLC's management will be challenged to
integrate the already substantial ARAMARK operation, with its
established culture, into the existing network.

LA QUINTA: S&P Revises Outlook over Weak Credit Measure Concerns
Standard & Poor's Ratings Services revised its outlook on
lodging company La Quinta Corp., to negative from stable due to
Standard & Poor's expectation that La Quinta's financial credit
measures will weaken further during 2003.

At the same time, a 'BB-' rating was assigned to the proposed
$250 million senior notes that will be issued by La Quinta
Properties Inc., the REIT subsidiary of La Quinta Corp. The
notes are guaranteed by La Quinta Corp. Proceeds will be used to
redeem any and all of its 7.82% senior notes (puttable in 2003)
due 2026; 7.51% senior notes due 2003; borrowings under its
revolving credit facility; 7.25% senior notes due 2004; and
7.114% exercisable put option securities due 2004. In addition,
Standard & Poor's affirmed its 'BB-' corporate credit rating on
the Dallas, Texas-based company. At the end of 2002, La Quinta
had $665 million in debt outstanding. Pro forma for the debt
issuance, the company will have had $710 million in debt

For the first quarter of 2003, La Quinta expects a 6% decline in
revenues per available room, compared with the same period in
2002, and $31 million in EBITDA. In addition, the company is
assuming a recovery in the lodging sector will take place in the
second half of the year, and hence, it is projecting flat RevPAR
for the full 2003 and annual EBITDA between $155 million - $160
million. At the end of 2002, La Quinta's total debt to EBITDA
leverage was in the high-3x area and its EBITDA to interest
coverage ratio was in the high-2x area. Based on the company's
forecasts for 2003, debt to EBITDA is expected to be in the mid-
to high-4x area and interest coverage in the mid- to high-2x
area at the end of 2003.

"Given the challenging lodging environment, the ratings may be
lowered in the intermediate term if the company's portfolio
underperforms its lodging peers, if credit measures weaken
beyond Standard & Poor's expectations, and/or if La Quinta
participates in aggressive share repurchases or a sizeable debt-
financed acquisition," said Standard & Poor's credit analyst
Stella Kapur.

LERNOUT: Dictaphone Suspends SEC Reporting on 11.75% Notes
George M. Carpenter, Vice President of Financial Planning and
Reporting for Dictaphone Corporation, invokes SEC Rule 15d-6 as
justification for suspending reporting on Dictaphone's 11-3/4%
Senior Subordinated Notes due 2005.  The Rule permitting this is
issued under the authority of Sections 13 and 15(d) of the
Securities Exchange Act of 1934. (L&H/Dictaphone Bankruptcy
News, Issue No. 37; Bankruptcy Creditors' Service, Inc.,

LONGVIEW ALUMINUM: Demands Retraction from Steven Wright of BPA
Longview Aluminum Chairman Michael Lynch has sent a formal
request for retraction to Bonneville Power Administration
Executive Director Steven Wright following libelous and
defamatory statements made by a BPA spokesperson regarding the
company's use of the proceeds from its curtailment agreement
with BPA. This agreement, crafted by BPA, was implemented to
help the region meet its growing demand for power in the face of
dwindling supply.

Under the terms of this agreement, Longview Aluminum was
compensated at one-half value in exchange for not taking its
allocated supply of power, valued at $452 million. The company's
use of the proceeds from this agreement, totaling approximately
$226 million, were the subject of comments made in media
interviews given by a BPA spokesperson over the past several
days. The other one-half value of the proceeds from the unused
Longview Aluminum power, valued at $226 million, was retained by
BPA, which recouped these funds through sale of the power to
other individual and corporate customers in the Pacific

"Mr. Wright's comments are particularly offensive and puzzling
given the fact that, in fall 2002, BPA itself conducted a full
audit of Longview Aluminum which confirmed that we have fully
complied with the curtailment agreement and its terms for how
the proceeds could be spent," said Lynch.

Of the $226 million Longview Aluminum received for allowing BPA
to sell the company's unused power on the open market,
approximately $167.9 million was used to pay down the company's
debt. Another $35.5 million was used to compensate Longview
Aluminum's Steelworker work force with full salary (up to 40
hours per week) and benefits. Of all the aluminum companies
negotiating such curtailment agreements with BPA, none were as
extensive as Longview's in terms of worker compensation.

The remaining proceeds -- approximately $22.6 million -- were
used to maintain the plant (an estimated $1 million per month or
$13.1 million), to pay other expenses, including fees for
professional services ($4 million) and to purchase BPA power and
transmission ($3.2 million). The balance of approximately $2.3
million remains in reserve to support ongoing maintenance of the
plant and other incidental expenses.

"BPA's energy policies and mismanagement of that agency have led
to unnecessarily high energy prices that have been the catalyst
for a deindustrialization of the region, resulting in massive
job loss," said Lynch. "Rate-payers should demand that BPA
account for its own use of the proceeds from our curtailment

Lynch emphasized that company officials remain committed to
preserving their investment in Longview Aluminum, protecting its
approximately 1,000 manufacturing jobs and contributing to the
economic renewal of the region.

Earlier this week, Longview Aluminum officials filed a petition
for voluntary Chapter 11 bankruptcy protection in Federal Court
in Delaware and expressed intent to reorganize the company to
safeguard its assets, including BPA-provided power and
transmission rights.

Longview Aluminum is a high-purity aluminum smelting facility in
Longview, Washington.

LTV CORP: Court Okays Copperweld's Insurance Policies with AIG
Copperweld Corporation and Welded Tube Co. of America obtained
the Court's authorization to sign insurance policies with
American Home Assurance Company, Inc., and Illinois National
Insurance Company, on behalf of themselves and certain other
member affiliates of American International Group, Inc.

                    The Insurance Program

In connection with the continued operation of the Copperweld
Debtors' businesses, they are required by law to maintain
insurance policies covering specified kinds of losses, including
workers' compensation and automobile insurance.  Further, the
Copperweld Debtors have, in the operation of their businesses,
traditionally insured against other types of losses, including
losses from crime perpetrated against their businesses, losses
from actions brought in tort and certain aircraft-related

The Copperweld Debtors have historically been insured by AIG.
In fact, the Copperweld Debtors and AIG were parties to a
variety of insurance contracts that expired at the end of 2002.
Before this expiration, the Copperweld Debtors' insurance
broker, Marsh USA Inc., approached a variety of well-known
insurers seeking to obtain replacement insurance coverage for
those required by the Copperweld Debtors.  After determining
that AIG could insure the Copperweld Debtors on the most cost-
effective basis, the Copperweld Debtors and AIG have agreed,
subject to Judge Bodoh's approval, to enter into an insurance
policy effective as of January 1, 2003, for various cover ages,
including automobile liability, workers compensation, and
employers liability, general liability (including product
liability) and other coverage. The Insurance Program is intended
to provide the Copperweld Debtors with insurance for the period
from January 2, 003, through December 31, 2003, and in many
cases the premium being charged provides significant cost
savings over the premiums previously paid by the Copperweld
Debtors due to their favorable historical loss experience.

The premium being charged is $764,200. (LTV Bankruptcy News,
Issue No. 45; Bankruptcy Creditors' Service, Inc., 609/392-

MEDICALCV INC: Fails to Maintain Nasdaq Listing Requirements
MedicalCV, Inc. (Nasdaq: MDCVU), a Minnesota-based heart valve
manufacturer, has received a Nasdaq Staff Determination
indicating that it fails to comply with the minimum
stockholders' equity requirement for continued listing set forth
in Marketplace Rule 4310(C)(2)(B), and that its securities are,
therefore, subject to delisting from The Nasdaq SmallCap Market
at the opening of business on March 17, 2003. The staff also
noted that the bid price of MedicalCV's units had been below
$1.00 for 30 consecutive trading days, accordingly the company
is not in compliance with Marketplace Rule 4310(C)(4).

"We are disappointed in the decision," said President and Chief
Executive Officer Blair P. Mowery. "We believe our plans for
regaining short-term and sustained compliance merit continued
listing and we are considering whether to appeal the staff's

If MedicalCV securities do not continue to be listed on The
Nasdaq SmallCap Market, such securities would become subject to
certain rules of the SEC relating to "penny stocks." Such rules
require broker-dealers to make a suitability determination for
purchasers and to receive the purchaser's prior written consent
for a purchase transaction, thus restricting the ability to
purchase or sell the securities in the open market. In addition,
trading, if any, would be conducted in the over-the-counter
market in the so-called "pink sheets" or on the OTC Bulletin
Board, which was established for securities that do not meet
Nasdaq listing requirements. Consequently, selling MedicalCV
securities would be more difficult because smaller quantities of
securities could be bought and sold, transactions could be
delayed, and security analyst and news media coverage of
MedicalCV may be reduced. These factors could result in lower
prices and larger spreads in the bid and ask prices for
MedicalCV securities. There can be no assurance that MedicalCV
securities will continue to be listed on The Nasdaq SmallCap

MedicalCV, Inc., is a Minnesota-based heart valve manufacturer
with a fully integrated manufacturing facility, where it
designs, tests and manufactures all of its products. Based on
its Omnicarbon(TM) heart valve's 18 years of excellent clinical
results in Europe, Japan and Canada, the U.S. Food and Drug
Administration gave premarket approval (PMA) for the Omnicarbon
valve in July 2001 for use in the United States, without
requiring additional U.S. clinical trials. To date, more than
30,000 Omnicarbon valves have been implanted in patients in more
than 30 countries. For more information on the company, visit
its Web site at

                         *    *    *

               Liquidity and Capital Resources

In its SEC Form 10-Q for the period ended October 31, 2002, the
Company reported:

"Cash and cash equivalents decreased to $210,032 at October 31,
2002, from $2,781,675 at April 30, 2002.  The decrease in cash
in the current fiscal year was attributable primarily to funding
operating losses and working capital requirements.  Net cash
used in operating activities was $882,680 in the second quarter
ended October 31, 2002, and $558,221 in the same period last
year. Net cash used in operating activities for the six-month
period in fiscal 2003 was $2,412,438 compared to $1,302,895 in
the prior year.

"Net cash used in operating activities increased $324,459 in the
quarter and $1,109,543 in the six-month period over the same
periods in the prior year due primarily to funding higher
operating losses and increases in inventory .  Inventories
increased $254,189 in the current quarter and $486,559 in the
six-month period due primarily to carrying additional Omnicarbon
3000 inventory to support the U.S. product launch.

"Net cash used in investing activities was $97,768 and $86,006
for the six-month periods ended October 31, 2002 and 2001,
respectively.  We invested $97,768 in property, plant, and
equipment in the six-month period ended October 31, 2002,
compared to $45,006 in the same period last fiscal year.

"Net cash used in financing activities was $61,437 in the six-
month period ended October 31, 2002, and consisted of principal
payments on long-term debt and capital leases.  In the six-month
period ended October 31, 2001, net cash provided by financing
activities was $1,434,808.  In that period, we borrowed an
additional $1,522,305 on our bank line of credit, and $500,000
in convertible bridge notes, partially offset by $526,882 of
principal payments on our bank line of credit, long-term debt,
and capital leases combined with $61,115 in deferred financing

"From March 1992 through July 2002, our primary source of
funding has been private sales of equity securities, which
totaled $9,775,704 in gross cash proceeds.  We have also funded
our operations through collateralized equipment financing term
loans and equipment leases.  In addition, we financed our
operations since fiscal year 2000 through a bank line of credit
collateralized by our real estate, tangible and intangible
property and a guarantee by a principal shareholder.  This line
of credit, which was scheduled to mature in November 2002, has
been extended to February 2003.  Amounts borrowed under this
line of credit currently bear interest at 6.5 percent per year.
As of October 31, 2002, we had borrowed the maximum amount
available of $2,500,000 under this line of credit.

"As part of our credit agreement with Associated Bank Minnesota,
we were required to maintain a minimum tangible net worth of not
less than $3,000,000, measured as of the last day of each fiscal
quarter.  At April 30, 2001, we failed to comply with the
minimum tangible net worth covenant.  On August 24, 2001,
Associated Bank Minnesota waived such covenant defaults, and we
amended our credit agreement, which now provides that we must
maintain a minimum tangible net worth of not less than
$1,000,000, measured as of the last day of each calendar month.
We were in compliance with our debt covenants as of October 31,
2002.  However, absent an infusion of equity capital during the
quarter ending January 31, 2003, our tangible net worth will
fall below the required $1,000,000 minimum.

"As of October 31, 2002, we had cash and cash equivalents of
$210,032 and had borrowed the maximum $2,500,000 under our line
of credit with Associated Bank.  In November 2002, the maturity
date of our revolving line of credit was extended to February
2003.  In November 2002, we also obtained access for up to
$500,000 of temporary financing from a principal shareholder
intended as a bridge loan for the next 90 days or until we are
able to obtain permanent financing, whichever comes first.  In
addition, we received a $60,000 unsecured advance from an
executive officer in December 2002.

"We are currently pursuing the refinancing of our revolving line
of credit and are seeking other financing to fund our operations
and working capital requirements.  However, we cannot provide
any assurance that such additional financing will be available
on terms acceptable to the Company or at all.  We will need to
obtain additional capital prior to the maturity date of our
revolving line of credit to continue operations.

"Subject to the uncertainties surrounding our need for financing
as described above, we expect to continue developing our
business and to build market share in the U.S. now that we have
FDA premarket approval of our Omnicarbon 3000 heart valve for
sales in the U.S.  These activities will require significant
expenditures to develop, train and supply marketing materials to
our independent sales representatives and to build our sales and
marketing infrastructure.  As a result, we anticipate that our
sales and marketing and general and administrative expenses will
continue to constitute a material use of our cash resources.
The actual amounts and timing of our capital expenditures will
vary significantly depending upon the speed at which we are able
to expand our distribution capability in domestic and
international markets and the availability of financing.

"We expect that our operating losses and negative operating cash
flow will continue in fiscal years 2003 and 2004 as we expand
our manufacturing capabilities, continue increasing our
corporate staff to support the U.S. roll-out of our Omnicarbon
3000 heart valve, and add marketing programs domestically and
internationally to build awareness of and create demand for our
Omnicarbon heart valves.  As described above, we will need to
obtain additional capital prior to the maturity date of our
revolving line of credit to continue operations.  We anticipate
that we will need to raise between $2,000,000 and $3,000,000 of
additional equity or debt financing to fund operations and
working capital requirements in the next 1 to 6 months.  This is
in addition to refinancing our current $2,500,000 of bank debt
which matures in February 2003. We also anticipate the need to
raise a minimum of $1,500,000 in new financing within 6 to 9
months.  We may also seek to dispose of certain assets and enter
into a sale / leaseback arrangement involving our corporate
headquarters and manufacturing facility as a means to improve
liquidity. We expect to face substantial difficulty in raising
funds in the current market environment and we have no
commitments at this time to provide the required financing.  If
we obtain $2,000,000 to $3,000,000 of additional financing and
refinance our bank debt, we believe we will have sufficient
capacity to operate and fund the growth of our business for the
remainder of fiscal year 2003.  Our capital requirements may
vary depending upon the timing and the success of the
implementation of our business plan, regulatory, technological
and competitive developments, or if:

     -- operating losses exceed our projections,

     -- our manufacturing and development costs or projections
        prove to be inaccurate,

     -- we determine to license or develop additional

     -- we experience substantial difficulty in gaining U.S.
        market acceptance or delays in obtaining FDA clearance
        of our proprietary carbon coating process for heart
        valves sold in the U.S. market, or

     -- we make acquisitions.

"We cannot assure you that we will be able to raise sufficient
capital on terms that we consider acceptable, or at all.  If we
are unable to obtain adequate financing on acceptable terms, we
may be unable to continue operations."

MIDWEST EXPRESS: Outlines Plan to Return to Profitability
Midwest Express Holdings, Inc., released additional details of a
comprehensive strategic plan to return to profitability and
avoid the actions some of its competitors have been forced to
take. The other week, the airline holding company announced it
was addressing rapidly deteriorating industry conditions by
implementing company-wide cost-reduction measures expected to
generate savings in excess of $4 million monthly.

Company officials said they have been in discussions with
lessors to temporarily suspend aircraft lease and debt payments
associated with DC-9, MD- 80, 328JET and Beech 1900 aircraft
through June 7, 2003. The suspension will give Midwest Airlines,
Inc., and Skyway Airlines, Inc., d/b/a Midwest Connect, the
opportunity to renegotiate terms and conditions of the leases
and other financial obligations to bring them in line with
market conditions and better reflect the reduced market values
of the aircraft. In connection with the negotiations, the
company will present a proposal to its aircraft lessors and
other affected creditors on March 13.

Timothy E. Hoeksema, chairman and chief executive officer, said
that despite an unrestricted cash position of approximately $30
million, record- high fuel prices, the threat of war and the
poor economic environment require the company to take action to
prevent a further decline in its cash position.

"We're hopeful we can come to a mutually beneficial agreement
with our aircraft lessors," Hoeksema said. "In our 19-year
history, we have made every lease and debt payment on time.
However, these are extraordinarily challenging times for the
entire airline industry. With involvement from our customers,
employees, vendors and lessors, the steps we are taking now will
ensure we have a strong future and continue to benefit the
communities we serve."

Midwest Airlines features nonstop jet service to major
destinations throughout the United States. Skyway Airlines, Inc.
-- its wholly owned subsidiary -- operates Midwest Connect,
which offers connections to Midwest Airlines as well as point-
to-point service between select markets on regional jet and
turboprop aircraft. Together, the airlines offer service to 51
cities. More information is available at

MILLENNIUM CHEMS: S&P Cuts Rating Due to Fin'l Profile Concerns
Standard & Poor's Ratings Services lowered its corporate credit
rating on Millennium Chemicals Inc., to non-investment-grade
'BB+' from 'BBB-', citing the company's subpar financial
profile, and the persistent operating pressures that continue to
limit prospects for improvement to the financial profile this
year. The current outlook is negative.

Red Bank-New Jersey-based Millennium, with about $1.6 billion of
annual sales and approximately $1.2 billion of outstanding debt
(excluding adjustments to capitalize operating leases), is
primarily engaged in the production of commodity chemicals.

"The downgrade reflects renewed concerns that substantially
higher raw material costs and lingering economic uncertainties
are likely to limit Millennium's ability to generate the free
cash flow necessary to substantially improve the company's
financial profile," said Standard & Poor's credit analyst Kyle
Loughlin. The financial profile has been stretched by adverse
business conditions during the past couple of years, which has
forestalled Millennium's efforts to reduce its sizeable debt
burden.  Standard & Poor's said that it also recognizes that
adverse business conditions in the petrochemical industry,
including recent escalation in raw materials costs, are likely
to limit cash distributions from 29.5%-owned Equistar Chemicals
LP this year.

Standard & Poor's said that its ratings on Millennium reflect
the company's average business risk profile and aggressive debt
burden, mitigated somewhat by financial policies that strongly
prioritize debt reduction as business conditions improve.  
Positive momentum in titanium dioxide (TIO2, a white pigment
used in coatings, plastics, and paper production), and
meaningful sources of untapped liquidity, in the form of
bank facilities and the ownership stake in Equistar Chemicals,
remain positive factors.

MORTON HOLDINGS: Court Fixes March 31 Admin. Claims Bar Date
The U.S. Bankruptcy Court for the District of Delaware has
imposed a deadline by which creditors of Morton Holdings, LLC
and its debtor-affiliates who wish to assert an administrative
expense claim against the estate must file written proof of that
claim, or be forever barred from asserting that claim.

To be deemed timely-filed, all administrative proofs of claim
must be received on or before 4:00 p.m. of March 31, 2003, by:

          Donlin, Recano & Company
          419 Park Avenue South
          Suite 1206
          New York, NY 10016

Two types of claims are exempted from the Administrative Claims
Bar Date:

     i) claims of professionals retained pursuant to Sections
        327 and 328 of the Bankruptcy Code and

    ii) fees payable and unpaid under 28 U.S.C. Section 1930.

All entities required to file a request for allowance of an
Administrative Claim but fail to do so will not be treated as a
creditor of the Debtors for purposes of allowing that claim.

Morton Holdings, LLC and its debtor-affiliates are in the
contract manufacturing business, specifically in connection with
highly-engineered plastic components and sub-assemblies for
industrial, agricultural and recreational vehicle original
equipment manufacturers.  The Company filed for chapter 11
protection on November 1, 2002 (Bankr. Del. Case No. 02-13224).  
Jeremy W. Ryan, Esq., and Norman L. Pernick, Esq., at Saul Ewing
LLP represents the Debtors in their restructuring efforts.  When
the Company filed for protection from its creditors, it listed
estimated debts and assets of over $10 million each.

MUMA SERVICES: Trustee Wants Critical Vendor Payments Returned
Charles A. Stanziale, Esq., the Chapter 7 Trustee overseeing the
liquidation of MUMA Services, Inc. f/k/a Murphy Marine Services,
Inc., wants creditors who received approximately $32 million --
maybe more -- under the First Day Critical Vendor Order to
return those funds.  Murphy Marine, the Chapter 7 Trustee
relates, told the Creditors' Committee that no more than $4.2
million was going out the door post-petition on account of
pre-petition claims.  The cash budget tendered to the Court in
connection with the Debtors' request to approve post-petition
financing suggested that only $3.7 million would be paid to
critical vendors.  The Chapter 7 Trustee asserts that the
alleged "critical vendors" have received preferential treatment
and this undermines the intent and spirit of the Bankruptcy
Code's priority distribution scheme.

Mr. Stanziale will ask Judge Walrath, at a hearing scheduled for
9:30 a.m. on March 14, 2003, to vacate her Critical Vendor Order
entered at the First Day Hearing, arguing that the Court
retained the right to revisit the Critical Vendor Order at any
time.  Specifically, pointing to page 41 of the First Day
Hearing Transcript, Mr. Stanziale relates that the Court stated,
"I will enter the order on an interim basis.  Again, it is
subject to review by an official committee and any other party
in the case, and my revisiting it at any time."  Prior to the
chapter 7 conversion, the Committee, represented by lawyers at
Faegre & Benson, asked the Court to vacate the Critical Vendor
Order and recharacterize the payments made to those creditors.

Mr. Stanziale says its hard to imagine how these sample payments

      Prepetition Creditor                  Amount
      --------------------                  ------
      Airborne Express                      $3,839
      Connecticut General Life              95,561
      Dun & Bradstreet                     106,236
      Esquire Investigations & Security      9,350
      Federal Express Corporation            9,519
      General Gases & Supplies Co.           9,959
      Mangual's Office Cleaning Services    46,090

fall within the definition of "trade vendors whose cooperation
and willingness to do business with [the Debtors] is absolutely
critical" contemplated by the Critical Vendor Order.  Mr.
Stanziale also points to two payments to creditors who, after
receiving payments under the Critical Vendor Order, stopped
doing business with the Debtors:

      Prepetition Creditor                  Amount
      --------------------                  ------
      SLS Services aka Holt Oversight   $1,221,835
      Southern Maintenance               1,570,721

Murphy Marine Services, Inc., and its affiliated debtors filed
for chapter 11 protection on March 21, 2001 (Bankr. Del. Case
No. 01-00926).  On July 25, 2002, the majority of the Debtors'
chapter 11 cases (excluding Dockside Refrigerated, Inc., and
Emerald Leading, Inc.) were converted to chapter 7 liquidation
proceedings.  Donald J. Crecca, Esq., and Jeffrey T. Testa,
Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano, in
Montclair, New Jersey, represent the Chapter 7 Trustee.

NATIONAL CENTURY: Settles Claims Dispute with OrthoRehab Inc.
Charles M. Oellermann, Esq., at Jones, Day, Reavis & Pogue, in
Chicago, Illinois, recounts that prior to the Petition Date,
National Century Financial Enterprises, Inc., and its debtor-
affiliates provided accounts receivable purchase financing to
OrthoRehab, Inc. under a Sales and Subservicing Agreement under
the NPF XII accounts receivable financing program.

Pursuant to the Receivables Agreement, the Debtors purchased
certain eligible accounts receivable from OrthoRehab.  The
Debtors' books and records indicate that, as of December 16,
2002, OrthoRehab was indebted to the Debtors, net of amounts in
the Debtors' collection account lockbox, amounting to $5,633,158
under the Receivables Agreements.

According to Mr. Oellermann, after the Petition Date, OrthoRehab
approached the Debtors about its "buyout," that is, the payoff
and settlement of OrthoRehab's obligations under the Receivables

After negotiations and reconciling the total amount owed by
OrthoRehab to the Debtors under the Receivables Agreements, the
Debtors and OrthoRehab agreed to enter into a stipulation.  The
Stipulation will facilitate OrthoRehab's entry into a
replacement accounts receivable funding arrangement with SCHSPV,
Inc. -- Factor, and allow OrthoRehab to continue its ordinary
course business operations.

Specifically, the parties stipulate and agree that:

(A) Settlement Amount

     In settlement of NPF XII's claims against OrthoRehab:

     (1) OrthoRehab or Factor must pay NPF XII $3,500,000;

     (2) OrthoRehab must execute a secured promissory note in
         NPF XII's favor, but subordinated to Factor, for
         $2,133,158 -- the Note; and

     (3) The Huntington National Bank will remit to NPF XII all
         funds in the lockbox accounts pertaining to OrthoRehab
         as of December 16, 2002.  This Settlement Amount is the
         full amount that OrthoRehab owes the Debtors under the
         Receivables Agreements, as reflected on the Debtors'
         books and records.

         The Note will have a final maturity date at the
         earlier of:

         -- one year after the date of issuance or the
            completion of a refinancing or other capital raising
            by OrthoRehab exceeding $2,000,000; or

         -- other Event of Default under the Note.

         OrthoRehab will also make payment on the Note with and
         to the extent of the net proceeds of any asset sales by
         OrthoRehab which aggregate $500,000 or more, other than
         sales contemplated under the OrthoRehab Agreements.

(B) Subordination of Security Interest

     Upon delivery of the Settlement Amount, the Debtors will
     assign to Factor their ownership interest in the lockbox
     accounts and the purchased accounts receivable, and
     subordinate their security interest in Ortho's non-
     purchased accounts receivable to Factor's security

(C) Mail Forwarding Instructions

     OrthoRehab or Factor will inform the Debtors where to send
     any payments or correspondence that the Debtors receive
     related to OrthoRehab's accounts receivable.  Any payments
     received by the Debtors after consummation of the
     Stipulation will not be property of the Debtors' estates
     and will be turned over to OrthoRehab or Factor.

(D) Transfer of Liens to Proceeds

     The conclusion of the relationship between the Debtors and
     OrthoRehab under the Receivables Agreements, and the
     assignment of the accounts receivable and subordination of
     the Debtors' security interest relating to the Receivables
     Agreements will bind any and all parties that may assert a
     lien, claim or interest in or to the Receivables
     Agreements, with any liens transferring to the proceeds.

(E) Mutual Releases

     The Stipulation provides for an exchange of mutual releases
     by Debtors NCFE, NPF XII, and National Premier Financial
     Services, Inc. and Bank One, on the one hand, and Ortho, on
     the other hand, of the Receivables Agreements, except for
     the Note and the Continuing Lien, on the terms and subject
     to the conditions set forth in the Stipulation.

(F) Bank Instructions

     The Debtors, Factor and OrthoRehab will direct The
     Huntington National Bank to:

        (i) remit all funds received in the lockbox accounts
            pertaining to OrthoRehab on or before December 16,
            2002 to the collection account designated by the

       (ii) remit all funds received in the lockbox accounts or
            otherwise pertaining to OrthoRehab after
            December 16, 2002 to the credit and direction of
            OrthoRehab or Factor;

      (iii) terminate the zero balance agreement relating to the
            Receivables Agreements; and

       (iv) use reasonable efforts to provide OrthoRehab, Factor
            and their counsel with documents relating to account
            activity in these accounts.

(G) Dismissal of Pending Actions

     OrthoRehab and the Debtors will take whatever actions are
     necessary to dismiss or vacate with prejudice certain
     pending actions between the parties related to the
     Receivables Agreements.

(H) Unaffected Transactions

     Nothing in the Stipulation impairs any party's rights under
     an equipment lease dated July 31, 2001, as amended; a
     July 11, 2001 promissory note, which may or may not have
     been executed; or any further agreements or documents, if
     any, other than the Receivables Agreements entered into by
     any affiliates of the Debtors and OrthoRehab.

Mr. Oellermann points out that the Settlement Amount represents
payment in full of Ortho's obligations to the Debtors under the
Receivables Agreements.  In addition, the settlement, when
consummated, will eliminate the burden on the Debtors' estates
of administering the lockbox accounts relating to OrthoRehab and
reconciling the collection of the accounts receivable purchased
from OrthoRehab.

By contrast, if the settlement is not consummated, OrthoRehab
has advised the Debtors that it will be unable to obtain
replacement financing and may not be able to continue ordinary
course business operations.  If that were to occur, Mr.
Oellermann notes, the Debtors would be required to incur
additional costs to collect Ortho's outstanding obligations
under the Receivables Agreements, and there is a substantial
possibility that those obligations could not be collected in

Accordingly, pursuant to Rule 9019 of the Federal Rules of
Bankruptcy Procedure, the Debtors ask the Court to approve their
Stipulation with OrthoRehab. (National Century Bankruptcy News,
Issue No. 10; Bankruptcy Creditors' Service, Inc., 609/392-0900)

NAT'L STEEL: Time Period for New Labor Pact Extended to March 26
National Steel Corporation announced its agreement with AK Steel
Corporation to extend the date after which either party would
have the right to terminate their previously announced Asset
Purchase Agreement in the event that AK Steel and the United
Steelworkers of America have not entered into a new collective
bargaining agreement covering those represented National Steel
employees becoming employees of AK Steel. The original date of
March 17, 2003 has been extended to March 26, 2003, as expressly
contemplated by the Asset Purchase Agreement.

Pursuant to the APA, National Steel has agreed to sell
substantially all of its principal steelmaking and finishing
assets, as well as its iron ore pellet operations, to AK Steel.
The transaction, which is targeted for completion early in the
second quarter of 2003, is valued at approximately $1.125
billion, consisting of $925 million of cash and the assumption
of certain liabilities approximating $200 million.

Under the terms of the APA, which is subject to the approval of
the bankruptcy court, AK Steel would acquire facilities at
National Steel's two integrated steel plants, Great Lakes in
Ecorse and River Rouge, Michigan, and the Granite City Division
in Granite City, Illinois, the Midwest finishing facility in
Portage, Indiana, the National Steel Pellet Company in Keewatin,
Minnesota, the administrative office in Mishawaka, Indiana,
various subsidiaries and National Steel's share of the Double G
joint venture in Jackson, Mississippi, as well as net working
capital related to the acquired assets.

In addition to the execution and ratification of a new
collective bargaining agreement by the USWA satisfactory to AK
Steel for the National Steel employees who will become employees
of AK Steel, the transaction is subject to a number of
conditions. As previously announced, early termination of the
waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act was granted on February 27, 2003.

Also as previously announced, on February 6, 2003 the bankruptcy
court approved bidding procedures granting AK Steel priority
"stalking horse" status. The APA is subject to higher and better
offers submitted in accordance with the procedures approved by
the Bankruptcy Court under Sections 363 and 365 of the U.S.
Bankruptcy Code.

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

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

National Steel Corp.'s 9.875% bonds due 2009 (NSTL09USR1) are
trading at about 78 cents-on-the-dollar, says DebtTraders. See
for real-time bond pricing.

NATIONAL STEEL: Wins Nod to Sell Nat'l Robinson Interest for $3M
National Steel Corporation and its debtor-affiliates obtained
permission from the Court to sell their membership interest in
National Robinson to Robinson Steel free and clear of any lien,
claim or encumbrance, for $3,472,059.

As previously reported, National Steel Corporation, its debtor-
affiliates, and Robinson Steel Co., Inc. own National Robinson
LLC, a Delaware limited liability company, equally on a 50-50
basis.  The parties formed National Robinson on February 2, 1998
for the purpose of constructing and operating specialty flat-
rolled cold steel processing line.  Robinson Steel acts as the
manager of National Robinson and has been responsible for the
performance of all operational maintenance and repairs of the
National Robinson processing facilities, the supply of all goods
and materials required to operate, the production of all
products manufactured by National Robinson and the delivery of
these products to customers.  In addition, Robinson Steel has
provided all management advisory services to National Robinson,
and all accounting, invoicing, bookkeeping, tax, financial,
personnel and related services.  The Debtors' duties have been
limited to providing marketing and sales support services
relating to the sale of National Robinson's products, including
the establishment of the products' sale price.

The Debtors supply National Robinson's rolled steel requirements
pursuant to the parties' supply agreement dated February 2,
1998. The Debtors also agreed to make quarterly payments to
National Robinson in the event that National Robinson's
aggregate gross margin on all products sold during the calendar
quarter was less than $62 per ton.  Unfortunately, the quarterly
payment provision has resulted in continuing losses for the
Debtors prompting them to sell their 50% membership interest in
National Robinson.

Under the Purchase Agreement, Robinson Steel has agreed that all
of the Debtors' obligations under the Supply Agreement will be
deemed terminated as of December 31, 2002, relieving the Debtors
of the obligation to make future gross margin deficiency
payments.  Similarly, the parties would terminate a support
services agreement and all of the Debtors' rights and interests
under a license agreement and an operation, maintenance and
services agreement that the parties entered into on February 2,

Robinson Steel will also cause National Robinson to pay all
amounts due and owing to the Debtors under the Supply Agreement.
The Purchase Agreement further provides that the $8,719,886 due
to the Debtors will be reduced by any amounts the Debtors owe,
including the $454,457 due to the Debtors under the Supply
Agreement and the Operation, Maintenance and Services Agreement.
(National Steel Bankruptcy News, Issue No. 26; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

NATIONSRENT INC: Wants Nod to Access $250-Million Exit Financing
Consistent with their efforts to emerge from Chapter 11 on an
expedited basis, NationsRent Inc., and its debtor-affiliates
have entered into various discussions with potential lenders to
obtain a $250,000,000 secured credit facility to implement the
reorganization plan that will ultimately be confirmed in these
cases.  As part of this process, the Debtors expect that a
Lender will commence field examinations, legal, business,
environmental and other due diligence to advance the loan
approval process.  But before the Lender conducts due diligence
efforts to determine its willingness to provide the Exit
Financing Facility, the Debtors anticipate that the Lender will
require them to enter into a letter agreement and pay a related
work fee.

To expedite the process of negotiating the ultimate terms of the
Exit Financing Facility, the Debtors seek the Court's authority
to enter into a Letter Agreement and implement its terms,
including the payment of the Work Fee without further Court

The Letter Agreement will provide for:

    -- the payment of a $100,000 Work Fee before the
       commencement of any due diligence.  The reimbursement of
       expenses will be deducted from the Work Fee;

    -- the payment for all reasonable out-of-pocket costs and
       expenses, including the payment of legal fees or third
       party consulting fees, that the Lender incurred in
       connection with the Letter Agreement;

    -- the indemnification of the Lender, its affiliate and
       their officers, directors, employees and agents for any
       actions, suits, losses, claims, damages and liabilities
       arising out of the work performed pursuant to the Letter
       Agreement or otherwise in connection with the Exit
       Financing Facility. However, no party will be indemnified
       for any claims or actions to the extent determined by a
       final judgment to have resulted from its own gross
       negligence or willful misconduct; and

    -- non-binding terms and conditions of the Exit Financing
       Facility.  Any description of the Exit Financing Facility
       contained in the Letter Agreement will not be binding on
       the parties until the execution of a commitment letter
       and the payment of a commitment fee.

The Debtors have been in discussions with Wachovia Bank,
National Association in connection with the Exit Financing
Facility.  In this regard, the Debtors relate that Phoenix
Rental Partners LLC paid Wachovia a $50,000 due diligence
deposit on their behalf. To the extent they enter into a Letter
Agreement with Wachovia, the Debtors intend to reimburse Phoenix
Rental for the $50,000 and pay Wachovia the remaining $50,000 of
the Work Fee.

After the Lender's due diligence review is completed and the
receipt of internal credit approval, the Debtors tell the Court
that they anticipate entering into a letter agreement outlining
the Lender's commitment to provide exit financing.  The
Commitment Letter will require the Debtors to pay the Lender a
commitment fee.  At present, the Debtors do not know the exact
amount of the Commitment Fee, but they believe that the
Commitment Fee will be less than any closing fee required by the
Exit Financing Facility.  The Debtors believe that the Closing
Fee will be equal to no more than 2-1/2% of the total commitment
under the Exit Financing Facility.  The Debtors expect to credit
the Commitment Fee against the Closing Fee.

Nevertheless, the Debtors seek the Court's authority to pay the
Commitment Fee on the execution of the Commitment Letter.

In their Disclosure Statement, the Debtors originally intended
to obtain an Exit Financing Facility that will consist of a
$120,000,000 revolving credit facility.  But the Debtors
maintain that the $250,000,000 proposed financing would be used
to consolidate certain other debt that they expect to incur on
January 1, 2004.

The Debtors elaborate that, pursuant to their business plan and
projections, Boston Rental Partners, LLC would be merged or
otherwise consolidated with the Reorganized NationsRent.  The
Debtors' projections assume that on January 1, 2004, the
Reorganized NationsRent would refinance up to $150,000,000 of
the existing debt.  The existing debt includes $60,000,000 that
will be assumed in conjunction with the Boston Rental
restructuring transaction together with certain purchase money
security interests, capital leases and restructured operating
leases with an estimated $66,700,000 principal balance as of the
Effective Date.

The Debtors assure the Court that the additional Exit Financing
Facility is not an incremental debt to the total proposed
capital structure of the Reorganized NationsRent.  The
availability of the additional Exit Financing Facility is
favorable for the Reorganized NationsRent's business plan
because it eliminates the uncertainty with respect to
Reorganized NationsRent's ability to obtain the anticipated
$150,000,000 in post-Effective Date financing.

The Debtors further assert that the payment of the Lender's
expenses and the Work Fee as well as the indemnification
provisions under the Letter Agreement are reasonable and
appropriate because:

    (a) the Debtors require a binding, unconditional commitment
        for the Exit Financing Facility to confirm the Plan;

    (b) the Debtors' estates require the availability of new
        funds to reorganize successfully;

    (c) the Debtors will be unable to maintain their timetable
        for emerging from bankruptcy on an expedited basis if
        they do not pursue a similar strategy with respect to
        securing the Exit Financing Facility;

    (d) the Lender will expend significant time and effort
        before -- and without any assurance that -- the Debtors
        will receive credit approval from the Court; and

    (e) the potential indemnification obligations under the
        Letter Agreement are limited to liabilities arising out
        of the transactions contemplated by the Letter
        Agreement. (NationsRent Bankruptcy News, Issue No. 28;
        Bankruptcy Creditors' Service, Inc., 609/392-0900)

NEON SYSTEMS: Louis R. Woodhill Resigns as President and CEO
NEON(R) Systems, Inc. (Nasdaq: NEON), a leader in enterprise-
class mainframe adapters, has undergone a corporate and
management reorganization. Louis R. Woodhill has resigned from
his positions as President and Chief Executive Officer and as a
director of NEON Systems to pursue his other commercial and
entrepreneurial interests. Over the past sixteen months Mr.
Woodhill provided strategic leadership while NEON evaluated and
ultimately exited its under-performing businesses and refocused
its operations on its Shadow product line.

Mark Cresswell, NEON's Senior Vice President and General Manager
of NEON's Shadow Division, has been promoted to the position of
President and Chief Operating Officer of NEON Systems. The Board
of Directors of NEON will conduct an executive search to
identify a Chief Executive Officer.

"It is a privilege and an honor to lead NEON in the next phase
of its evolution," said Mr. Cresswell. "I am excited by our
prospects for the coming year. The focus and cost-efficiencies
that result from this reorganization will better position us for
profitability while maintaining our longer-term revenue growth
objectives. We will continue to strengthen our relationships
with our partners and customers and raise the bar even further
on product functionality and customer care."

In connection with the corporate reorganization, NEON undertook
a reduction in workforce of approximately 26% of its overall
employee base. NEON will record the related severance and other
restructuring charges in the fiscal quarter ending March 31,

NEON Systems, Inc., (Nasdaq: NEON) is a leader in enterprise-
class mainframe adapters. NEON's Shadow technology is a leading
industry choice for integrating application platform suites and
IBM zSeries mainframes, delivering high-performance, scalability
and managed interconnectivity. Flexible industry standard APIs
and evolutionary Web Services enable Shadow adapters to unlock
the intrinsic value of mainframe business data and logic for a
new age of applications. For more information on the future of
mainframe integration, see the Company's Web site at

                         *     *     *

               Liquidity and Capital Resources

In its SEC Form 10-Q for the period ended December 31, 2002, the
Company reported:

"NEON's cash and cash equivalents at December 31, 2002 were
$20.3 million, a decline of $14.2 million from $34.5 million at
March 31, 2002. This decrease was due primarily to a net
operating loss of $9.0 million for the nine months ended
December 31, 2002, and advances on a note receivable to PBTC of
$2.2 million and advances to Scalable Software, Inc. of $3.4

"Net cash used in operating activities for the nine months ended
December 31, 2002 was $8.4 million and was primarily due to
NEON's net operating losses. For the nine months ended December
31, 2001 net cash provided by operating activities was $1.7
million and resulted from NEON's $9.3 million trademark
settlement, net of attorney fees, with New Era of Networks,
offset by $7.4 million in operating losses.

"Net cash used in investing activities was $5.9 million and $5.7
million for the nine months ended December 31, 2002 and 2001,
respectively. For the nine months ended December 31, 2002, net
cash used in investing activities represents advances on a note
receivable to Scalable Software of $3.4 million, an advance
on a note receivable to PBTC of $2.2 million and purchases of
property and equipment of $319,000. The principal investing uses
in the nine months ended December 31, 2001 were an advance on a
note receivable to Scalable Software of $4.0 million, an advance
on a note receivable to Enterworks Software, Inc. of $2.0
million, and $577,000 in purchases of property and equipment
partially offset by the maturity of $820,000 in marketable
securities. As of December 31, 2002, NEON had no material
commitment for capital expenditures. As of December 31, 2002,
Scalable had additional funding available of $338,000.

"NEON's net cash provided by financing activities was $29,000
and $100,000 for the nine months ended December 31, 2002 and
2001, respectively. The net cash provided by financing
activities in both periods represents proceeds from the exercise
of employee stock options.

"NEON's future liquidity and capital requirements will depend
upon numerous factors, including the costs, timing and scale of
NEON's product development efforts and the success of such
efforts; the costs, timing and sales of NEON's sales and
marketing activities; the extent to which its existing and new
products gain market acceptance; market developments; the costs
involved in maintaining and enforcing intellectual property
rights; the level and timing of license revenue; and other
factors. NEON believes that its current balance of cash and cash
equivalents will be sufficient to meet its working capital,
funding commitments and anticipated capital expenditure
requirements for at least the next 12 months. Thereafter, NEON
may require additional funds to support its working capital
requirements or for other purposes and may seek to raise
additional funds through public or private equity financing or
from other sources. There can be no assurance that additional
financing will be available at all, or if available, that such
financing will be obtainable on terms acceptable to NEON, or
that any additional financing will not be dilutive.

"NEON is involved in various claims and legal actions arising in
the ordinary course of business. In the opinion of management,
the ultimate dispositions of any of these matters will not have
a material adverse effect on NEON's consolidated financial
position, results of operations or liquidity. On January 29,
2003, NEON received notification that it had been sued in Fort
Bend County, Texas in a lawsuit styled Phoenix Network
Technologies (Europe) Limited vs. NEON Systems, Inc. and
Computer Associates International Inc., 400th District Court,
Ft. Bend County, Richmond Texas, Cause Number 03-CV-127800.
Phoenix Network Technologies (Europe) Limited was a distributor
of the Solve: Diplomat software products prior to NEON's
acquisition of the Solve: Diplomat assets from Sterling
Software. The lawsuit alleges interference with such distributor
relationship among other claims. NEON has not yet evaluated the
claim raised in such case but do not currently believe that the
ultimate disposition of such case will have a material adverse
effect on our consolidated financial position, results of
operations or liquidity."

NTELOS INC: Says 2002 Operating Cash Flows Exceed Guidance Range
NTELOS (Nasdaq: NTLOQ) announced preliminary operating results
highlighting the Company's operating revenues and operating cash
flows for fourth quarter 2002 and disclosed that the Company
preliminarily anticipates recording a significant asset
impairment charge pursuant to SFAS 142 and 144, relating to its
long lived assets.

Preliminary operating revenues for the fourth quarter 2002,
subject to final audit adjustments, were nearly $70 million,
resulting in total operating revenues for the year 2002 of
nearly $263 million. Operating cash flows, (operating income
before depreciation, amortization, and restructuring and asset
impairment charges or EBITDA), subject to final audit
adjustments, were approximately $22 million (approximately $21
million after restructuring charges) for fourth quarter bringing
the total for the year 2002 to more than $60 million. This
amount exceeds the Company's guidance range for the year 2002 of
$52 million to $58 million. Operating cash flows for the fourth
quarter 2001 and the year 2001 were $4.3 million and $20.5
million, respectively.

The Company previously reported year-end 2002 wireless PCS
customers of 266,467, reflecting net subscriber additions for
the fourth quarter 2002 of 15,446. For January and February
2003, net wireless PCS subscriber additions were approximately
10,300, compared to 5,780 for the same period in 2002.

The general slowdown of the entire telecommunications industry
and increased competition experienced in the wireless PCS
industry has resulted in a decrease of several industry
analysts' projections, including subscriber growth, average
revenue per unit, and subscriber churn improvement. This
decrease in industry-wide projections, combined with an economic
environment not conducive to strategic transactions, such as
mergers and acquisitions, has resulted in dramatic decreases in
the value of wireless PCS and other telecommunications assets.

In response, NTELOS performed a comprehensive evaluation of the
Company's long-term business plan and made several modifications
including a reduction in subscriber growth, a decrease in ARPU,
a slower improvement in subscriber churn, and lower wholesale

Based on this business plan, the Company has performed a
preliminary assessment of the value of its long lived assets
including property, plant and equipment, goodwill, radio
spectrum licenses and other intangible assets for the year ended
December 31, 2002. Based on this preliminary assessment, the
Company anticipates recognizing an asset impairment charge
relating to the value of these assets in excess of $350 million,
subject to completion of the testing and our year-end audit. The
final amount of the asset impairment charge could differ
significantly following completion of the testing and year-end

The Company anticipates announcing fourth quarter 2002 and year-
end 2002 financial results and 2003 guidance during the week of
March 24, 2003 in the usual press release format.

To complete development and implementation of a restructuring
plan, NTELOS and certain of its subsidiaries filed voluntarily
petitions for reorganization under Chapter 11 of the U.S.
Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern
District of Virginia on March 4, 2003.

NTELOS Inc., (Nasdaq: NTLOQ) is an integrated communications
provider with headquarters in Waynesboro, Virginia. NTELOS
provides products and services to customers in Virginia, West
Virginia, Kentucky, Tennessee and North Carolina, including
wireless digital PCS, dial-up Internet access, high-speed DSL
(high-speed Internet access), and local and long distance
telephone services. Detailed information about NTELOS is
available online at  

NTELOS INC: Nasdaq to Knock-Off Shares Effective March 13, 2003
NTELOS (Nasdaq: NTLOQ) received a Nasdaq Staff Determination on
March 4, 2003 indicating that the Company's filing of a
voluntary petition for relief under Chapter 11 of the U.S.
Bankruptcy Code and the Company's failure to meet other
requirements for continued listing set forth in Marketplace
Rules 4450(a)(5), 4450(a)(2) and 4310(C)(13) have resulted in
the Company being subject to delisting from the Nasdaq Stock

Nasdaq notified the Company that its common stock will be
delisted from the Nasdaq Stock Market at the opening of business
on March 13, 2003. The Company has determined not to appeal the
delisting. The Company's common stock will be eligible for
trading on the Over the Counter Bulletin Board, subject to
market maker sponsorship. The OTCBB is a regulated quotation
service that displays real-time quotes, last-sale prices and
volume information in over-the-counter equity securities. OTCBB
securities are traded by a community of market makers that enter
quotes and trade reports.

There can be no assurance that the Company's common stock will
continue to be actively traded or that liquidity for the
Company's common stock will not be adversely affected.

NTELOS Inc., (Nasdaq: NTLOQ) is an integrated communications
provider with headquarters in Waynesboro, Virginia. NTELOS
provides products and services to customers in Virginia, West
Virginia, Kentucky, Tennessee and North Carolina, including
wireless digital PCS, dial-up Internet access, high-speed DSL
(high-speed Internet access), and local and long distance
telephone services. Detailed information about NTELOS is
available online at  

OWENS CORNING: Has Until Friday to File Disclosure Statement
Owens Corning and its debtor-affiliates obtained the Court's
approval to extend through March 14, 2003 the time imposed by
Rule 3016(b) of the Federal Rules of Bankruptcy Procedures for
the Debtors to file a disclosure statement with respect to their
Plan. (Owens Corning Bankruptcy News, Issue No. 47; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   

P-COM INC: Commences Trading on OTCBB Effective March 10, 2003
P-Com, Inc., a worldwide provider of wireless telecom products
and services, said that its securities began trading
electronically on the Over-the-Counter Bulletin Board under the
symbol PCOM effective the opening of business March 10, 2003.

The OTC Bulletin Board (OTCBB) is a regulated quotation service
that displays real-time quotes, last-sale prices, and volume
information in over-the-counter equity securities. Information
regarding the OTC Bulletin Board, including stock quotations,
can be found at

P-Com earlier received notice from The Nasdaq Stock Market of
the determination by the Nasdaq Listing Qualifications Panel
that the Company's common stock would no longer be listed by The
Nasdaq SmallCap Market based upon the Company's inability to
satisfy certain quantitative listing standards, including the
minimum $1.00 bid price requirement, as of March 7, 2003.

"This decision by Nasdaq was anticipated and does not affect our
day-to-day operations and does not deter us from our goal of
providing innovative products for telecom operators and
integrators around the world," said P-Com Chairman George
Roberts. "Over the past year, P-Com has made great strides in
improving its balance sheet, in rolling out new products and
attracting new customers."

In 2002, P-Com raised $8.4 million in capital, and completed a
restructuring of $22.4 million in convertible notes obligations,
retired an additional $6.9 million of convertible notes, and
secured a $5 million bank line of credit. In January, P-Com
signed a letter of intent to acquire privately held Procera
Networks Inc. of Sunnyvale, California with the intent to enter
the market for advanced switching products.

P-Com, Inc., whose December 2002 balance sheet shows a total
shareholders' equity deficit of about $15 million, develops,
manufactures, and markets point-to-multipoint, point-to-point,
and spread spectrum wireless access systems to the worldwide
telecommunications market, and through its wholly owned
subsidiary, P-Com Network Services, Inc., provides related
installation support, engineering, program management and
maintenance support services to the telecommunications industry
in the United States. P-Com's broadband wireless access systems
are designed to satisfy the high-speed, integrated network
requirements of Internet access associated with Business to
Business and E-Commerce business processes. Cellular and
personal communications service (PCS) providers utilize P-Com's
point-to-point systems to provide backhaul between base stations
and mobile switching centers. Government, utility, and business
entities use P-Com systems in public and private network
applications. For more information visit  

PACIFIC GAS: Mar. 10 Settlement Conference with Judge Newsome
The Honorable Dennis Montali, overseeing Pacific Gas & Electric
Company's on-going chapter 11 restructuring directs the core
parties-in-interest to convene on March 10, 2002, for a
Settlement Conference before the Honorable Randall L. Newsome.

At a hearing before Judge Montali in late-February, various
parties asked the Court to order Pacific Gas and Electric
Company, the California Public Utilities Commission and other
plan confirmation objectors to attend a judicially supervised
settlement conference to explore whether there differences could
be resolved consensually and the Debtor's chapter 11 case could
culminate in confirmation of a consensual chapter 11 plan.

Judge Montali thinks those requests have merit as Pacific Gas'
case approaches its second anniversary on April 6 and in light
of "the staggering expense . . . of further delay, and the fact
that the two competing plans pay creditors in full and that the
proponents of those plans differ primarily about the environment
within which the Debtor or the disaggregated entities will
function in a post-confirmation world."

"The court is quite aware of the philosophical differences
that separate Debtor and its parent from CPUC and the other
nonprivate objectors in particular," Judge Montali says.  "While
a prior mediation was unsuccessful, there is little to be lost,
and potentially much to be gained, by ordering a judicially
supervised settlement conference.  That being said, the
volunteer settlement judge needs first to assess whether such a
conference should be attempted."

Accordingly, Judge Montali orders that:

    1. On March 10, 2003, at 2:00 p.m., in Courtroom 220, at
       1300 Clay Street, Oakland, California, Hon. Randall L.
       Newsome, United States Bankruptcy Judge, will preside
       over a pre-settlement conference meeting;

    2. The following counsel -- and no others -- are directed
       to attend the March 10 meeting on behalf of their
       clients, as shown:

          Party-in-Interest        Attorney
          -----------------        --------
          Debtor                   Mr. Neal & Mr. Lopes

          PG&E Corporation         Mr. Kessler

          CPUC                     Ms. Kaplan, Mr. Kornberg
                                     and, if desired, Mr.
                                     Cohen or one other
                                     member of the CPUC
                                     legal staff

          Official Committee of
            Unsecured Creditors    Mr. Aronzon

          California Attorney
            General                Mr. Pascuzzi and, if
                                     desired, a Deputy
                                     Attorney General

          City of Palo Alto        Mr. Engel

          Northern California
            Power Agency           Mr. Gorton

          City and County of
            San Francisco          Mr. Baker

          Various California
            Counties               Mr. Crane

          Merced Irrigation
            District               Mr. Ginter or Mr. Carroll

       Any request to have a substitute counsel attend the
       March 10 meeting must be made to Judge Montali no
       later than Thursday, March 6, with a written
       explanation of why the designated counsel is not able
       to attend, and who is named to attend in place of the
       designated person.  Judge Montali reserves the right
       to approve (or deny) any such request.

    3. Except for in-house counsel named above, client
       representatives are not to attend the March 10

    4. Judge Newsome will be familiar with the background of
       the case and the main issues dividing the parties.  No
       written statements should be filed prior to the March
       10 meeting.

    5. The March 10 meeting will be closed to the public and
       will be off the record.  At that meeting Judge Newsome
       will decide whether to proceed with a settlement
       conference.  If he makes that determination, he will
       then establish all procedures for submission of
       settlement conference statements, participation in
       further conferences by client representatives, the
       timing and location of any such conferences, and the
       conduct of those conferences. He will also determine
       which parties other than those identified should
       participate and any other matters pertaining to the
       settlement conference.

    6. The March 10 meeting and any subsequent settlement
       conference will not conclude absent leave of Judge
       Newsome, who may continue the conference from time to
       time at his discretion.  He may issue any order deemed
       appropriate to facilitate settlement or the
       expeditious resolution of the disputes.  Parties and
       their counsel should be prepared to remain beyond
       normal business hours if necessary; travel
       arrangements should be flexible and alternative
       arrangements should be made for routine personal and
       family commitments.  Judge Newsome will not normally
       excuse parties or counsel except in the case of
       emergency or extreme inconvenience.

    7. Other than directing the attendance at the March 10
       meeting and approving any substitutions regarding
       attendance, Judge Montali will not participate in the
       March 10 meeting or any subsequent conferences.  Judge
       Montali will not discuss the conduct of the settlement
       conferences with Judge Newsome or be advised of
       anything other than the ultimate outcome of such
       settlement conference.  The court remains available to
       confer with Judge Newsome regarding background
       matters, including prior rulings, and the schedule of
       future hearings in the case, including the scheduled
       resumption of the confirmation trial on April 8, 2003.

    8. Failure to comply with the terms and spirit of this
       order may lead to the imposition of sanctions under
       Bankruptcy Rule 7016 and Rule 16(f), Fed. R. Civ. P.

PACIFIC MAGTRON: Fails to Comply with Nasdaq Listing Guidelines
Pacific Magtron International Corp., (Nasdaq: PMIC) announced
that, by letter dated Feb. 28, 2003, Nasdaq notified the company
that its common stock had failed to comply with the minimum
market value of publicly held shares requirement of Nasdaq
Marketplace Rule 4310(C)(7). The company's common stock is,
therefore, subject to delisting from the SmallCap Market. The
company has requested a hearing before a Listing Qualifications
Panel, at which it will seek continued listing. The company
expects the hearing to be scheduled within 30 to 45 days.

The company has also been notified by Nasdaq that the company
has not complied with Marketplace Rule 4310(C)(4), which
requires a minimum bid price of $1 per share of common stock.
The company has until Aug. 18, 2003 to comply with Rule
4310(C)(4). The company will detail its plan to comply with both
Rule 4310(C)(4) and the MVPHS requirement at the hearing
referred to above. There can be no assurance that the panel will
grant the company's request for continued listing.

Pacific Magtron International Corp., is an enterprise dedicated
to providing total solutions in the computer marketplace,
including supplying multimedia hardware; providing corporate
information services related to networking and Internet
infrastructure; developing advanced solutions and applications
for Internet users, resellers and service providers; and
providing high-quality electronic commerce and supply chain
solutions. For more information visit the Company's Web site at

                         *     *     *

               Liquidity and Capital Resources

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

"It is our business plan that we finance our operations
primarily through cash generated by operations and borrowings  
under our floor plan inventory loans and line of credit.  The
continued  decline in sales, the continuation of operating
losses or the loss of credit facilities could have a material
adverse effect on the operating cash flows of the Company.

"As of June 30, 2002, the Companies did not meet the revised
minimum tangible net worth and profitability covenants, giving
Transamerica,  among other things, the right to call the loan
and immediately terminate the credit facility. On October 23,
2002, Transamerica issued a waiver of the default occurring on
June 30, 2002 and revised the terms and covenants under the  
credit agreement.  Under the revised terms, the credit facility  
includes FNC as an additional borrower and PMIC continues as a
guarantor.  Effective October 2002, the new credit limit is
$3 million in aggregate for inventory loans and the letter of
credit facility. The letter of credit facility is limited to $1
million.  The credit limits for PMI and FNC are $1,750,000 and
$250,000, respectively. As of September 30, 2002, the Companies
did not meet the revised  covenants relating to profitability
and tangible net worth. This gives Transamerica, among other
things, the right to call the loan and immediately terminate the
credit facility.

"On May 31, 2002 the Company entered into a Preferred  Stock
Purchase  Agreement with an investor.  Under the agreement, the
Company agreed to issue 1,000 shares of its preferred stock at
$1,000 per share. The Company issued 600 shares of its preferred  
stock and warrants for  purchasing  400,000  shares of the  
Company's common stock for a net proceeds of $477,500 on May 31,
2002.  We expect to issue the additional 400 shares for an
estimated  gross  proceeds of $370,000 in the fourth quarter
2002. Even though we have completed the required  registration
of the  underlying  common stock in October 2002, there is no  
assurance these remaining 400 shares will be sold.

"At September 30, 2002, the Company had  consolidated  cash and
cash equivalents totaling $2,667,400 (excluding $250,000 in
restricted cash) and working capital of $3,960,400, a decrease
of $1,774,500 compared to the working  capital at December 31,  
2001.  At December 31, 2001, we had consolidated  cash and cash
equivalents  totaling  $3,110,000 (excluding $250,000) in
restricted cash) and working capital of $5,734,900.  The
decrease in working capital is primarily due to an increase in
accounts payable.

"Net cash used in operating activities during the nine months
ended September 30, 2002 was $233,600,  which principally
reflected the net loss incurred during the period,  and an  
increase  in  inventories, which was partially offset by an
increase in accounts payable and a decrease in accounts
receivable.  On June 12, 2002, the Company received a Federal
income tax refund of $1,034,700.

"Net cash used by investing activities during the nine months
ended September 30, 2002 was  $102,300, resulting  from the  
purchases of property and equipment of $128,000  and an increase
of $22,700 in deposits  and other  assets.  These uses were
partially offset by the proceeds from the sale of property and

"Net cash used in financing  activities  was  $106,700 for the
nine months ended September 30, 2002,  primarily due to net
decreases in the floor plan inventory loans and principal  
payments on the mortgages on our office facility.  This was
partially  offset by the net proceeds of $477,500 from the
issuance of preferred

"On July 13, 2001, PMI and PMIGA obtained  a new $4 million
(subject to credit and borrowing  base limitations) accounts
receivable and inventory  financing facility from Transamerica  
Commercial Finance Corporation.  This  credit  facility  has a
term  of two years,  subject to automatic  renewal  from year to
year  thereafter.  The credit facility can be terminated by
either party upon 60 days' prior written notice and immediately
if the  Companies lose the right to sell or deal in any product
line of inventory. The Companies are subject to an early  
termination  fee equal to 1% of the then established  credit
limit. The facility  includes a $2.4 million inventory line
(subject to a borrowing base of up to 85% of eligible  accounts  
receivable plus up to $1,500,000 of eligible inventories), a
$600,000 working capital line and a $1 million letter of credit
facility used as security for inventory purchased on terms from
vendors in Taiwan. Borrowing under the inventory loans are
subject to 30 to 60 days  repayment,  at which time interest  
begins to accrue at the prime rate,  which was 4.75% at
September 30, 2002.  Draws on the working capital line also
accrue interest at the prime rate.

"Under the agreement, PMI and PMIGA granted Transamerica a
security interest in all of their accounts,  chattel paper,  
cash, documents, equipment, fixtures, general intangibles,  
instruments, inventories, leases, supplier benefits and
proceeds of the foregoing.  The Companies are also required to
maintain certain financial covenants. As of December 31, 2001,
the Companies were in violation of the minimum tangible net
worth covenant. On March 6, 2002, Transamerica issued a
waiver of the default and revised the covenants  under the
credit  agreement retroactively to September 30, 2001. The
revised covenants require the Companies to  maintain  certain   
financial  ratios  and  to  achieve  certain  levels  of
profitability. As of December 31, 2001 and March 31, 2002, the
Companies were in compliance with these revised covenants.  As
of June 30, 2002, the Companies did not meet the revised  
minimum  tangible net worth and  profitability  covenants,
giving  Transamerica,  among  other  things,  the  right  to
call  the  loan and immediately terminate the credit facility.

"On October 23, 2002, Transamerica  issued a waiver of the
default  occurring on June 30, 2002 and revised the terms and  
covenants  under the credit  agreement. Under the revised  
terms,  the credit  facility  includes  FNC as an  additional
borrower and PMIC  continues as a guarantor.  Effective  October  
2002,  the new credit limit was reduced to $3 million in
aggregate for inventory  loans and the letter of credit  
facility.  The letter of credit facility  is limited to $1
million.  The credit limits for PMI and FNC are $1,750,000  and  
$250,000, respectively. As of September 30, 2002, there were
outstanding draws of $990,800 on the credit facility. As of
September 30, 2002, the Companies did not meet the covenants as
revised on October 23, 2002 relating to profitability  and
tangible net worth, constituting a technical  default.  This
gives  Transamerica, among other things,  the right to call the
loan and  immediately  terminate the credit facility.  We are
currently in discussions with  Transamerica to obtain a waiver
of the covenant  default.  There is no assurance  that a waiver
will be obtained from Transamerica nor that the covenants will
be revised with terms favorable to us.

"In March 2001, FNC obtained a $2 million  discretionary  credit  
facility  from Deutsche Financial Services Corporation to
purchase inventory.  To secure payment, Deutsche obtained a
security interest in all of FNC's inventory, equipment,
fixtures, accounts, reserves,  documents, general intangible
assets and all judgments, claims, insurance policies, and
payments owed or made to FNC. Under the loan  agreement,  all
draws matured in 30 days.  Thereafter, interest accrued at the
lesser of 16% per annum or at the maximum lawful contract rate
of interest permitted under applicable law.

"FNC was required to maintain  certain  financial  covenants  to
qualify for the Deutsche  bank credit  line,  and was not in  
compliance  with  certain of these covenants  as of June 30,  
2002 and  December 31, 2001, which  constituted  a technical  
default under the credit line.  This gave Deutsche the right to
call the loan and terminate the credit line.  The credit  
facility was  guaranteed by PMIC and could be terminated by
Deutsche immediately given the default. On April 30, 2002,  
Deutsche  elected to terminate the credit facility  effective
July 1, 2002. Upon  termination,  the  outstanding  balance must
be repaid in accordance with normal terms and provisions of the
financing agreement. As of September 30, 2002, there were  
outstanding  draws of $11,600 on the credit line.  The entire
outstanding balance was repaid on October 9, 2002.

"Pursuant to one of our bank mortgage loans  with  a  $2,393,700  
balance at September 30, 2002, we are required to maintain  
certain  financial  covenants. During 2001, we were in violation
of a consecutive  quarterly  loss covenant and an EBITDA
coverage ratio covenant, which is an event of default under the
loan agreement that gives the bank the right to call the loan. A
waiver of these loan covenant violations  was obtained from the
bank in March 2002,  retroactive to September  30, 2001,  and
through  December 31,  2002.  As a condition for this waiver,  
we transferred  $250,000 to a restricted  account as a reserve
for debt servicing. This amount has been reflected as restricted
cash in the consolidated financial statements.

"We presently have insufficient working capital to pursue our
long-term growth plans with respect to expansion of our  service
and product offerings.  We believe, however, that  our  existing
cash, trade credits from  suppliers, anticipated  income tax  
refunds, and proceeds from issuance of additional preferred
stock will satisfy our anticipated requirements for working
capital to support our present operations through the next 12
months,  provided we are able to maintain our existing credit
lines or obtain  comparable  replacement credit facilities.

"On May 31, 2002 we received  net proceeds of $477,500  from the
issuance of 600 shares of 4% Series A Preferred  Stock.  We
expect an additional 400 shares will be issued in the fourth
quarter 2002. Even though we have completed the required
registration of the underlying common stock in October 2002,  
there is no assurance  these  remaining  400 shares  will be
sold or that we will be able to obtain additional capital beyond
the issuance of these 1,000 shares of Preferred stock.  Upon the  
occurrence of a Triggering  Event,  such as the Company were a
party in a "Change of Control Transaction," among others, as
defined, the holder of the  preferred  stock has the rights to  
require  us to redeem its  preferred stock in cash at a minimum
of 1.5 times the Stated Value.  As of September 30, 2002, the
redemption  value of the Series A Preferred  Stock,  if the
holder had required  us to redeem  the Series A Preferred  Stock
as of that  date, was $912,200. Even though we do not expect
those Triggering Events will occur, there is no assurance  that
those events will not occur.  In the event we are required to
redeem our Series A Preferred Stock in cash, we might  
experience a reduction in our ability to operate the business at
the current level.

"We are actively seeking additional capital to augment our
working capital and to finance our new business. However, there
is no assurance that we can obtain such capital,  or if we can  
obtain  capital that it  will  be on terms that are acceptable
to us."

PEOPLES HEALTH PLAN: S&P Assigns R Financial Strength Rating
Standard & Poor's Ratings Services assigned its 'R' financial
strength rating to Peoples Health Plan of Ohio Inc., after the
Ohio Department of Insurance terminated the insurer's
certificate of authority and put the insurer under regulatory
control on March 3, 2003.

"Peoples had been under regulatory supervision since March 28,
2002, due to its failure to meet the minimum net worth
requirements set by the ODI," said credit analyst James Sung. In
November 2002, the ODI warned Peoples of its intention to revoke
the insurer's license, alleging that the insurer had made false
representations regarding its assets, misrepresented cash
infusions designed to lift supervision, and failed to notify the
ODI of significant changes to its operations.

Peoples, based in Canton, Ohio, reported net premium income of
$7,470,918 in 2002.

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

PETSMART: Improving Credit Measures Prompt S&P to Revise Outlook
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on PetsMart Inc., and revised its outlook on the
company to positive from stable based on improving credit
measures and solid operating performance over the past two

Phoenix, Arizona-based PetsMart is the leading operator of
specialty pet supply stores. The company had $167 million total
debt outstanding as of Feb. 3, 2003.

"PetsMart's better results have significantly improved cash flow
generation, with lease-adjusted EBITDA increasing to about $386
million in 2002 from $244 million in 2001," Standard & Poor's
credit analyst Ana Lai said. "This strengthened cash flow
protection measures in 2002, with EBITDA interest coverage at
about 2.7x in 2002, up from 1.9x in 2001."

Standard & Poor's said the company's debt leverage also improved
with total debt to EBITDA at about 3.6x, down from 5.4x in 2001.
In addition, the conversion of its $172.5 million convertible
subordinated notes into common equity in early 2002 contributed
to a meaningful improvement in its capital structure, with total
debt to capital at 67% in 2002, down from 80% in 2001.

"Sustained improvement in credit measures and good operating
performance could result in an upgrade in the near-to-
intermediate term," Ms. Lai added.

POTLATCH CORP: Board Declares Regular Quarterly Dividend
Directors of Potlatch Corporation (NYSE:PCH) have declared the
regular quarterly dividend on the company's common stock.

The dividend of $0.15 per share is payable June 2, 2003, to
stockholders of record May 9, 2003.

Potlatch is a diversified forest products company with
timberlands in Arkansas, Idaho and Minnesota.

As reported in Troubled Company Reporter's March 6, 2003
edition, Fitch Ratings lowered Potlatch Corporation's debt
ratings of senior secured to 'BBB-' from 'BBB', senior unsecured
to 'BB+' from 'BBB-', senior subordinated to 'BB' from 'BB+',
and commercial paper to 'B' from 'F3'. The Rating Outlook for
Potlatch has changed to Negative from Stable.

This rating action is based on several quarters of weak market
conditions for wood products-prices having hit a 10-year low-and
declining margins in tissue hurt by certain competitors'
strategy to buy market share. Despite strong housing starts and
fair remodel and repair markets in 2002, U.S. lumber companies
have struggled with a multiyear slump in wood prices brought on
by an oversupply of lumber and panel production. Until some
reduction of capacity occurs, Fitch expects overproduction will
continue and is uncertain when and by how much lumber and panel
prices will improve. Tissue markets are also facing substantial
capacity additions which could harm Potlatch's operating
margins. The Resource segment continues to be profitable, and
Fitch estimates that the market value of Potlatch's timberlands
exceeds the company's aggregate debt.

RFS ECUSTA: Court Okays CVH Enterprises as Industry Consultants
The U.S. Bankruptcy Court for the District of Delaware gave its
nod of approval to a request by the Official Committee of
Unsecured Creditors of RFS Ecusta Inc., and RFS US Inc., to
employ CVH Enterprises, Inc., as its Industry Consultants.  

The professional services that the Committee wants CVH to
perform include:

     a) analyzing and advising the Committee regarding the pulp
        and paper industry;

     b) analyzing and evaluating motions filed by the Debtors
        including the Debtors' motion to borrow monies from an
        insider for the purpose of restarting the Mill and the
        Debtors' motion to provide a prepetition rebate to a
        former customer;

     c) analyzing the desirability and feasibility of continuing
        the Debtors' business;

     d) assisting the Committee in its identification of
        potential purchasers and assisting in developing a
        strategy to maximize the net proceeds from a sale;

     e) assisting the Committee in the evaluation of proposals
        received from prospective purchasers and provide
        analysis and advice with respect to the structuring and
        negotiation of any sale or reorganization of the

     f) attending at meetings of the Committee and participation
        in telephonic conferences with members of the Committee
        and/or Counsel;

     g) performing such other consulting and advisory services
        as may be required and in the interest of creditors as
        requested by the Committee or Counsel to the Committee
        which are in the best interest of the creditors.

CVH's compensation will be:

     i) for advisory and consulting services regarding Industry
        and the operations of the Debtor, the fee will be $150
        per hour;

    ii) for identifying potential purchasers to the Committee,
        $10,000; and

   iii) if a person introduced by CVH acquires all or any
        substantial portion of the Debtor or its assets,
        a fee of 1.0% of the consideration paid.

RFS Ecusta Inc., and RFS US Inc., were leading manufacturers of
high quality premium paper products for the tobacco and
specialty and printing paper products.  The Company filed for
chapter 11 protection on October 23, 2002 (Bankr. Del. Case No.
02-13110).  Christopher A. Ward, Esq., at The Bayard Firm
represents the Debtors in their restructuring efforts.  When the
Debtors filed for protection from its creditors, they listed
estimated debts and assets of more than $10 million each.

SAVANNAH II/CORVUS: Fitch Keeps Watch on Low-B and Junk Ratings
Fitch Ratings has placed the following classes of notes issued
by the collateralized debt obligations listed below on Rating
Watch Negative:

      Savannah II CDO Ltd.        Corvus Investments Ltd.
         -- Class A 'A-';            -- Class A-1 & A-2 'A+';
         -- Class B 'BB+';           -- Class B 'BBB';
         -- Class C 'CCC.            -- Class C 'CCC+';
                                     -- Class D 'CC.

The aforementioned classes have been placed on Rating Watch
Negative due to the uncertainty of the timing and ultimate
resolution of current impaired assets and the continuing risk of
deterioration in their respective reference pools.

Both of these transactions have experienced impairment of
certain referenced assets, which are expected to incur losses.
The timing and ultimate recovery value of many of these
referenced assets is uncertain and may be below Fitch's assumed
recovery values. Each of these transactions also contains
certain referenced assets that have experienced credit
deterioration but are not currently impaired. It is unclear
whether the credit quality of these referenced assets has
stabilized, thereby increasing the risk that the reference
pools' credit deterioration will continue.

Barclays Bank Plc is the arranger, portfolio credit swap
counterparty, and portfolio manager for the aforementioned
transactions. Savannah II CDO Ltd. contains exposure to other
Barclays arranged CDOs such as Dorset CDO Ltd. class B (2.67%)
and Tullas CDO Ltd. classes C and D (2.53%). Corvus Investments
Ltd. also contains exposure to other Barclays arranged CDOs such
as Dorset CDO Ltd. classes C and E (2.20%), Savannah II CDO Ltd.
classes C and E (2.03%), Taunton CDO Ltd. class F (0.40%), and
Tullas CDO Ltd. classes D and F (2.25%). Deterioration of all
related party holdings and certain exposures to underperforming
sectors such as CDOs, aircraft securitizations, and manufactured
housing have contributed to the ratings deterioration of
Savannah II CDO Ltd. and Corvus Investments Ltd.

SIRIUS SATELLITE: S&P Drops Sr. Ratings to D After Debt Exchange
Standard & Poor's Ratings Services lowered its senior secured
ratings on satellite radio provider Sirius Satellite Radio Inc.
to 'D' from 'CCC-' following the exchange of most of its debt
and all of its preferred stock for common stock.

At the same time, the ratings were removed from CreditWatch
where they were placed on Aug. 16, 2002. The corporate credit
and subordinated debt ratings on the company were already 'D'
due to a missed interest payment. New York-based Sirius has
about $60 million in debt following the retirement of 91% of its
debt as part of its restructuring.

"Standard & Poor's views the terms and nature of the exchange to
be tantamount to a default," according to Standard & Poor's
credit analyst Steve Wilkinson. He added, "We view the exchange
of debt for equity as a material concession from the original
terms of the debt. Equity does not provide investors with a
contractual repayment commitment or stipulated rate of return,
and the long-term value of the stock is questionable given
the company's uncertain prospects. Failure to complete the
exchange would have prevented the injection of $200 million in
new equity from Sirius' key financial partners, and would likely
have forced the company into bankruptcy."

The restructuring is beneficial to Sirius because it improves
its near-term liquidity and substantially reduces its interest
burden and the size of its repayment obligations. The corporate
credit and debt ratings will be reevaluated based on the
company's new capital structure and its prospects for
successfully establishing its satellite radio business.

SORRENTO NETWORKS: Executes Definitive Restructuring Agreement
Sorrento Networks (Nasdaq:FIBR), a leading supplier of
intelligent optical networking solutions for metro and regional
applications, announced the execution of the definitive
restructuring agreement with its convertible debenture holders
and the Series A preferred stockholders of its optical
networking subsidiary, Sorrento Networks, Inc. The Company also
announced that it filed a preliminary proxy statement with the
Securities and Exchange Commission for shareholder approval of
the capital restructuring, its reincorporation as a Delaware
corporation, and a new employee equity incentive plan.

Commenting on this accomplishment, Phil Arneson, chairman and
chief executive officer, stated: "We are very pleased to have
reached this significant milestone with our convertible
debenture holders and Series A preferred stockholders.
Completion of this transaction will dramatically improve the
Company's balance sheet and will clear the way for us to
continue executing our business plan and provide the financing
flexibility to drive future growth."

            Highlights of the Definitive Agreement

The terms of the definitive agreement with the debenture and
Series A holders are substantially similar to the terms
previously announced by the Company in December 2002. The
Company's $32.2 million in convertible bonds will be converted
into common shares of the Company and into a portion of $12.5
million in secured convertible debentures that pay interest of
7.5% per annum and mature in August 2007. In addition, all
Series A preferred shares will be converted into common shares
of the Company and into a portion of the $12.5 million in
secured convertible debentures. The outstanding Series A "put"
of $48.8 million against SNI will be withdrawn. Certain Series A
preferred stockholders will also receive a total of $600,000 in
additional convertible debentures to pay certain legal fees.

The debenture holders and Series A preferred stockholders will
receive common shares and new convertible debentures, which, in
the aggregate, will represent approximately 87.5% of the
Company's common stock on a diluted basis. This percentage takes
into account the total of the existing shares outstanding, the
shares to be issued to the debenture and Series A holders at the
closing, the shares issuable upon conversion of the new
debentures, and shares issuable upon conversion of warrants to
be issued to existing shareholders. This percentage does not
take into account new employee stock options, shares issuable
upon conversion of $600,000 in convertible debentures to be
issued to certain holders of the Series A preferred stock to pay
certain legal fees, and certain other issuances.

The exact number of common shares that will be issued to the
debenture and Series A holders upon consummation of the
restructuring will depend on the conversion price of the new
debentures, which will not be known until shortly before
closing. The new debentures that will be issued in the exchange
(not including the new debentures to be issued in satisfaction
of legal fees) will be convertible into not less than 8.75%, nor
more than 26.25%, of the Company's common shares, calculated on
the same diluted basis. The Company will file a registration
statement with the SEC to register the resale of the common
shares issued or issuable to the debenture and Series A holders.

Existing shareholders will retain 7.5% of the common stock of
the Company on the same diluted basis and will receive non-
transferable warrants to purchase approximately 5% of the
Company's common stock, exercisable beginning one year after the
closing at a 10% premium over an average closing price of the
Company's stock prior to the closing of the restructuring.
Exercise of the warrants will also be subject to the
effectiveness of a registration statement with respect to the
common shares to be issued upon exercise of the warrants.

As part of the definitive agreement, the Company will
reincorporate in Delaware and, post-closing, will simplify its
corporate structure by merging its operating and non-operating
subsidiaries into the new Delaware corporation. The subsidiaries
include Sorrento Networks, Inc. and Meret Optical
Communications. Sorrento and Meret products will continue to be
marketed under their respective brand names.

The new debentures will limit the Company's ability to incur new
debt, including entering into a new credit facility before the
subsidiary mergers are completed. Accordingly, the Company will
seek to satisfy its near-term liquidity needs through equity

        Filing of Preliminary Proxy Statement with the SEC

Thursday last week, the Company filed a preliminary proxy
statement with the SEC for shareholder approval of the capital
restructuring, its reincorporation as a Delaware corporation,
and a new employee equity incentive plan.

Consummation of the transactions described in the definitive
agreement is subject to shareholder approval and other
conditions, including the effectiveness of a registration
statement covering the resale of the shares to be issued in the
restructuring. The Company will mail the proxy statement to
shareholders promptly following SEC clearance and will notify
them of the specific date of the shareholder meeting for the
approval of the proposed restructuring. The Company anticipates
holding the shareholder meeting in late April 2003.

Mr. Arneson concluded: "With our blue-chip customer base, our
solid product portfolio, and a clean balance sheet, we will be
in an excellent position to prosper from the inevitable
turnaround in our market sector. While challenges remain,
including the need to raise additional capital to satisfy our
liquidity needs, we believe that this transaction is in the best
interest of all of our stakeholders. We anticipate that our
common shareholders will approve the items to be submitted to
them in the proxy statement."

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

                         *     *    *

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

SPORTS HEROES: Chapter 11 Case is Dismissed
Finding that Sports Heroes, Inc., is unable to effectuate a plan
of reorganization under chapter 11 of the U.S. Bankruptcy Code,
Judge Bohanon entered an order dismissing the Company's case.  
The Order of Dismissal was entered on the Court's docket on
February 21, 2003.

Sports Heroes Inc., filed for chapter 11 protection in the U.S.
Bankruptcy Court for the Western District of Oklahoma in 1996
(Case No. 96-14111).  Prior to filing for bankruptcy, revenues
were approaching $15 million annually.  Sports Heroes Inc.
marketed a broad range of memorabilia and collectible products
like sports trading cards, replica signature baseballs, limited
edition sports and non-sports collectibles, authentic game-used
sports equipment, rare Hall of Fame autographs and collectible

SUPERIOR TELECOM: BSI Appointed as Noticing and Claims Agent
The U.S. Bankruptcy Court for the District of Delaware gave its
nod of approval to Superior TeleCom Inc., and its debtor-
affiliates' application to retain Bankruptcy Services LLC as the
Official Claims, Noticing and Balloting Agent in the company's
chapter 11 cases.  

The Debtors have determined that the number of creditors in this
case exceeds 200. Accordingly, the Debtors believe it is
necessary and in the best interests of their creditors and
estates to engage BSI to act as outside agent to the Clerk of
Court.  In its capacity, BSI will:

  a. notify all potential creditors of the fling of the
     bankruptcy petitions and of the setting of the first
     meeting of creditors, pursuant to Section 341(a) of the
     Bankruptcy Code;

  b. file affidavits of service for all mailings, including a
     copy of each notice, a list of persons to whom such notice
     was mailed, and the date mailed;

  c. maintain an official copy of the Debtors' Schedules,
     listing creditors and amounts owed;

  d. furnish a notice of the last date for the filing of proofs
     of claim and a form for filing a proof of claim to
     creditors and parties-in-interest;

  e. docket all claims filed and maintain the official claims
     register on behalf of the Clerk and provide the Clerk an
     exact duplicate;

  f. specify in the claims register for each claim docket:

       (i) the claim number assigned,

      (ii) the date received,

     (iii) the name and address of the claimant,

      (iv) the filed amount of the claim, if liquidated and

       (v) the allowed amount of the claim;

  g. record all transfers of claims and provide notices of the
     transfer as required pursuant to Bankruptcy Rule 3001(e);

  h. maintain the official mailing list for all entities who
     have filed proofs of claim;

  i. mail the Debtors' disclosure statement, plan, ballots and
     any other related solicitation materials to holders of
     impaired claims and equity interests;

  j. receive and tally ballots anal responding to inquiries
     respecting voting procedures and the solicitation of votes
     on the plan; and

  k. provide any other distribution services as are necessary or

BSI's professional services will be charged at its current
hourly rates which are:

          Kathy Gerber                $195 per hour
          Senior Consultants          $175 per hour
          Programmer                  $125 to $150 per hour
          Associate                   $125 per hour
          Data Entry/Clerical         $40 to $60 per hour

Superior TeleCom Inc., a leading manufacturer and supplier of
communications wire and cable products to telephone companies,
distributors and system integrators and magnet wire for motors,
transformers, generators and electrical controls, filed for
chapter 11 protection on March 3, 2003 (Bankr. Del. Case No. 03-
10607).  Laura Davis Jones, Esq., and Michael Seidl, Esq., at
Pachulski, Stang, Ziehl Young Jones & Weintraub represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from its creditors, it listed $861,716,000 in
total assets and $1,415,745,000 in total debts.

THOMAS GROUP: Dec. 31 Working Capital Deficit Stands at $700,000
Thomas Group, Inc., (OTCBB:TGIS) announced net income of $0.1
million, on consulting revenue before expense reimbursements of
$8.6 million for the fourth quarter of 2002. This compares
favorably with a third quarter 2002 net loss of $1.8 million, on
consulting revenue before expense reimbursements of $6.8
million. This marks the first quarterly profit since the second
quarter of 2001.

In addition, the Company continued its trend of improved
operating results by recording its fourth consecutive quarter of
substantial improvements in its core business operations. Core
earnings excludes expenses related to the Company's re-financing
activities and restructuring charges. Core operating results for
the fourth quarter of 2002 improved to a profit of $0.7 million.
This compares with a core operating net loss of $0.6 million for
the third quarter of 2002. The following table shows the
Company's improvements in core operations.

Consolidated operations of the Company for the year 2002
resulted in a net loss of $7.8 million on consulting revenue
before expense reimbursements of $31.7 million. These results
compare favorably to year 2001 net loss of $15.6 million on
consulting revenue before expense reimbursements of $51.7

Attaining Profitability: The positive results for the fourth
quarter reflect the Company's concerted efforts to attain a
positive bottom line despite severe economic conditions, which
negatively impacted the consulting industry during the second
half of 2001 and continued throughout 2002. The Company was able
to maintain quarter over quarter improvement in financial
performance during 2002. The main factors behind the Company's
improved financial performance in 2002 include:

     -- Attaining nearly 100% utilization of its professional
workforce, which resulted in gross margin improvement from 12%
during the fourth quarter of 2001 to 49% in the fourth quarter
of 2002;

     -- Management of costs and facilities, which resulted in
selling, general and administrative costs, including
restructuring, litigation settlement and liquidity related
costs, decreasing $9.4 million, or 33% when comparing 2002 with

     -- Maintaining a viable business pipeline, which has
resulted in increased backlog of 29% when comparing 2002 to

     -- Liquidation of the Company's German subsidiary, which
will save the Company approximately $2.8 million on an
annualized basis;

     -- Successfully renegotiating the Company's credit facility
with the Company's lender, which resulted in $0.5 million of
additional revolving credit and deferred payment on the term
loan; and

     -- Raising $2.0 million of equity and $1.5 million of
subordinated debt, which enabled the Company to address its
liquidity needs during 2002.

At December 31, 2002, the Company's balance sheet shows a
working capital deficit of about $700,000, while its total
shareholders' equity has further shrunk to about $400,000 from
about $5 million recorded a year ago.

Commenting on the Company's fourth quarter and year 2002
performance, John Hamann, Thomas Group's President and CEO said,
"We are very pleased to return to profitability. Our Company has
been able to keep its cost structure relatively fixed, and quite
low, for over eight months, while rebuilding its backlog in a
very difficult economic environment. Though market conditions
remain tough and very uncertain we believe that, with continued
emphasis on cost control and targeted marketing and selling, we
will be able to achieve profitable performance in 2003."

Restructuring Charge: Included in the operating results for the
fourth quarter and year 2002 is $0.1 million and $1.3 million of
restructuring charges, of which $1.1 million is non-cash,
related to write-down costs from the closure and liquidation of
the Company's German subsidiary. Quarterly cost savings from
this action will save the Company approximately $0.7 million per

Business Development: During the fourth quarter of 2002, the
Company continued to win new business in North America and Asia.
These contracts confirm the success the Company has had in
winning business in its selected target markets, despite the
tight market for consulting services.

In North America, the Company continued to expand its
relationship with the United States military by reaching
agreement with the United States Navy on $4.9 million in new
contracts during the fourth quarter of 2002. In addition, the
Company's North America region secured a $0.9 million program
with a global supplier of automotive components and sub-systems.
The development of the business pipeline during 2002 is
beginning to show benefits as new government and commercial
business contracts have already resulted in $6.7 million and
$2.6 million of new business, respectively, in the first two
months of 2003. Combined, this $9.3 million in new business
represents the largest quarterly bookings total since the third
quarter of 2001.

In Asia, the Company added to its two contract wins during the
third quarter of 2002 by reaching agreement with Brilliant China
Automotive during the fourth quarter of 2002. The Company has
received verbal approval on a significant extension with CBA and
expects to begin work with CBA before the end of the first
quarter of 2003.

In Europe, the Company has downsized its operation to facilitate
only the activity of exploring new business opportunities.
Currently, the Company has been actively working several leads
and hopes to win a new program in Europe by the end of the
second quarter of 2003.

Commenting on the recent business wins and the future potential
of business under development, John Hamann said, "We have
successfully invested our marketing and selling resources toward
winning new programs, in both the government and commercial
sectors, in all of our regions. It is particularly pleasing to
see the improvement in the Company's North America region
performance, for a vital North American operation is at the
heart of Thomas Group. We are also encouraged by the improved
performance of our Asia region, which has demonstrated the
ability to win new business, to deliver excellent results to
clients, and to operate cost effectively. In Europe, we are
encouraged by the amount of new business development activities
we are seeing in the first quarter of 2003, though it is clear
that business conditions in Europe for consulting are extremely
difficult as compared to Asia and North America."

Backlog: As of December 31, 2002, the Company had backlog of
$42.0 million, compared to backlog of $28.3 million at September
30, 2002 and $32.6 million at December 2001. The increase in
backlog reflects the contract wins in North America, primarily
in the area of U.S. military contracts.

Financing Activities: During 2002, the Company was able to
address its liquidity needs by raising $2.0 million in equity
and $1.5 million in subordinated debt. Due to these infusions of
cash, combined with the Company's improved financial
performance, the Company currently anticipates the ability to
meet future cash needs through operations supplemented by the
Company's current credit facility.

Founded in 1978, Thomas Group, Inc., is an international,
publicly traded professional services firm (TGIS.OB). Thomas
Group focuses on improving enterprise wide operations,
competitiveness, and financial performance of major corporate
clients through proprietary methodology known as Process Value
Management(TM), process improvement, and by strategically
aligning operations and technology to improve bottom line
results. Recognized as a leading specialist in operations
consulting, Thomas Group creates and implements customized
improvement strategies for sustained performance improvement.
Thomas Group, known as The Results Company(SM), has offices in
Dallas, Detroit, Zug, Singapore, Shanghai and Hong Kong. For
additional information on Thomas Group, Inc., please visit the
Company on the World Wide Web at  

TOKHEIM: Closes Sale of North American Assets to First Reserve
Tokheim Corporation (OTCBB:THMC), effective March 7, 2003, has
completed the sale of the company's Gasboy operating segment to
certain affiliates of Danaher Finance Company and the sale of
its Tokheim North America and MSI operating segments to certain
affiliates of First Reserve Fund IX, L.P.

Tokheim did not receive any additional qualified bids for its
Tokheim International operating segment in accordance with the
procedures required by the United States Bankruptcy Code.
Therefore, the auction scheduled for February 27, 2003, was
cancelled and Tokheim intends to submit the bid of AXA Private
Equity for approval by the Bankruptcy Court.

Tokheim does not believe its shareholders will receive any
distribution upon confirmation of a plan of reorganization.

ULLICO INC: A.M. Best Ratchets Fin'l Strength Ratings Down to B-
A.M. Best Co., has lowered the financial strength ratings to B-
(Fair) from B (Fair) of ULLICO Inc.'s (Wilmington, DE)
life/health subsidiaries, Union Labor Life Insurance Company
(Baltimore, MD) and its wholly-owned subsidiary, ULLICO Life
Insurance Company (Austin, TX).

Also, the financial strength rating of the property/casualty
subsidiaries, Ulico Insurance Group (Wilmington, DE), which
includes two inter-company pooling members, Ulico Casualty
Company (Delaware) and its wholly owned subsidiary, Ulico
Indemnity Company (Arkansas), has been downgraded to B (Fair)
from B++ (Very Good). The stand-alone financial strength rating
of Ulico Standard of America Casualty Co (California) has been
lowered to B- (Fair) from B (Fair). All of the ratings continue
to have negative outlooks.

These rating actions are in response to the reduced level of
Union Labor Life's final 2002 year-end statutory and surplus
position, which was less than A.M. Best's expectations. A.M.
Best remains concerned about the capitalization, liquidity,
asset concentration and invested asset quality at both Union
Labor Life and the parent holding company, as well as the
limited financial flexibility of ULLICO, Inc.

While UIG maintains adequate capitalization, its rating has been
lowered further due to its unfavorable operating results, which
were below management's year-end financial indications.

Current operating earnings are being weighed down by losses in
its core lines of business, fiduciary liability and commercial
lines, with adverse reserve development resulting from increased
claims frequency, as evidenced by the further deterioration in
its returns on revenue at year-end 2002. Additionally, the
significant growth in gross written premium volume during the
year compounded by the decline in policyholders' surplus due to
negative operating earnings has resulted in elevated gross and
net leverage measures.

A.M. Best notes that the assets held in the separate accounts of
Union Labor Life, including separate account J, are insulated
from all liabilities of the company by contract and by law.
Taking into account the ongoing concerns within the
organization, A.M. Best is no longer comfortable maintaining a
secure rating within the group. A.M. Best will continue to
monitor the operating companies' situation.

UNITED AIRLINES: Says ESOP's Sunset Provisions Were Triggered
UAL Corp. (NYSE: UAL), the parent company of United Airlines,
announced that sales of company stock by the company's employee
benefit plans have lowered employee ownership in those plans
below 20 percent, thereby triggering the "Sunset" provisions
contained in the company's certificate of incorporation (as
described in the company's most recent quarterly report on Form
10-Q) that affect UAL's corporate governance structure. The
changes that have occurred due to "Sunset" include:

     -- Elimination of special Board, Board committee and
shareholder votes, such as for acquisitions, divestitures and
CEO appointments, among others;

     -- Elimination of the 55% shareholder voting power of the
Employee Stock Ownership Plan (ESOP);

     -- Board discretion to change its committee structure and
membership; and

     -- Possible changes in Board members, other than those
representing the Air Line Pilots' Association (ALPA),
International Association of Machinists and Aerospace Workers
(IAM) and salaried and management employees. Decisions regarding
potential Board nominees would be made by the Board's outside
public director nomination committee.

UAL Corp., reaffirmed that the triggering of "Sunset" does not
jeopardize tax benefits related to UAL's net operating losses.
Preserving the NOL should generate substantial tax benefits
following UAL's emergence from Chapter 11 protection.

Other information about United Airlines can be found at the
company's Web site at  

United Airlines' 10.670% bonds due 2004 (UAL04USR1) are trading
at about 4 cents-on-the-dollar, DebtTraders reports. See  
real-time bond pricing.

UNITED AIRLINES: Court Approves KPMG as Committee's Accountants
The Official Committee of Unsecured Creditors in the Chapter 11
cases of UAL Corporation/United Airlines Inc., and its debtor-
affiliates obtained the Court's authority to retain KPMG
International as accountants and restructuring advisors.

With the Court's approval of its engagement, KPMG is expected

    (1) review and analyze all reports or filings presented to
        the Bankruptcy Court;

    (2) review and analyze the Debtors' financial information,
        including cash receipts, disbursements and potential

    (3) review and monitor DIP Financing or other arrangements;

    (4) assist in identifying potential cost-containment and
        liquidity enhancement opportunities;

    (5) analyze potential operational improvement and asset
        redeployment opportunities;

    (6) analyze lease rejection issues;

    (7) analyze proposed business plans;

    (8) analyze reorganization strategies and alternatives;

    (9) review the Debtors' financial projections and

   (10) assist in preparing a plan of reorganization;

   (11) advise the Committee in meetings with the Debtors,
        lenders and other parties-in-interest;

   (12) review the Debtors' tax positions;

   (13) evaluate compensation and benefit issues;

   (14) assist with claims analysis and valuation;

   (15) investigate the Debtors' prepetition transactions and
        transfers of cash;

   (16) offer litigation support services and expert witnesses;

   (17) provide other services as requested by the Committee.

In return for its services, KPMG will seek compensation pursuant
to its customary hourly billing rates:

        Partners              $540 - 600
        Directors              450 - 510
        Managers               360 - 420
        Senior Associates      270 - 330
        Associates             180 - 240
        Paraprofessionals      120

KPMG will seek reimbursement for necessary expenses incurred.
KPMH received approximately $215,000 from the Debtors for
prepetition services. (United Airlines Bankruptcy News, Issue
No. 11; Bankruptcy Creditors' Service, Inc., 609/392-0900)   

US AIRWAYS: Makes $64.2-Million Payments on Airbus Aircraft
US Airways has made payments on its 2000-1 and 2000-3 pass
through trust related to Airbus aircraft. These payments,
totaling $64.2 million, were due on Feb. 20, 2003, and March 3,
2003, respectively, and were made prior to the end of the
applicable cure periods.

In addition, US Airways announced that, in connection with the
Airbus aircraft payments, it had drawn down $69 million of the
Retirement Systems of Alabama's debtor-in-possession financing
facility. The remaining $131 million of the RSA DIP continues to
be subject to the applicable closing conditions.

Although US Airways is on track to emerge from Chapter 11 on
March 31, 2003, it first must resolve several remaining issues,
each of which is critical to the company, including:

     * Successful resolution of its pilot pension obligations.
       The company has begun formal negotiations with the Air
       Line Pilots Association (ALPA) following the U.S.
       Bankruptcy Court's approval to terminate the existing
       pension plan.

     * The U.S. Bankruptcy Court must confirm the company's
       proposed Plan of Reorganization. Balloting on the plan by
       the company's creditors closes on March 10, 2003, and a
       confirmation hearing is scheduled for March 18-20, 2003.

     * Defer or make payment on 2001-1 pass through trust
       certificates related to additional Airbus aircraft, due
       on March 20, 2003. Total value is $27 million.

     * Reach agreement on a replacement credit card processor.

US Airways was granted authorization on Jan. 17, 2003, by Judge
Stephen S. Mitchell of the U.S. Bankruptcy Court of the Eastern
District of Virginia, to solicit approval from its creditors on
its plan of reorganization that provides for the airline's
emergence from Chapter 11 protection in March 2003.

Following a four-day hearing, on March 1, 2003, Judge Mitchell
rendered a decision stating that US Airways had met the
financial standards for a distress termination of the defined
benefit pension plan for its pilots. The court's finding was
required for the Pension Benefit Guaranty Corporation (PBGC) to
begin consideration of its separate approval process to formally
terminate the existing pilot pension plan by March 31, 2003, in
conjunction with US Airways' planned emergence from bankruptcy
protection set for that same day. Judge Mitchell also authorized
US Airways to implement a defined contribution pension plan on
terms to be worked out between the company and ALPA.

US Airways has received proposals from and is in negotiations
with potential credit card processors for Visa and MasterCard
transactions, once US Airways emerges from Chapter 11 bankruptcy
protection and transitions its current relationship with
National Processing Corp., a division of National City Bank of
Cleveland. US Airways currently has an agreement with NPC, which
expires March 31, 2003, but which provides for a 45-day
extension if a series of milestones are met.

Specifically, the 45-day extension with NPC requires that US
Airways have a confirmed plan of reorganization and a new credit
card processing agreement in place by March 31, 2003. US Airways
then has to substantially complete the plan and close on the
federal loan guarantee approved by the Air Transportation
Stabilization Board (ATSB) by April 15, 2003, allowing for an
extension of the NPC agreement until May 15, 2003. Assuming
these conditions are met, US Airways would expect to transition
to its new processor in late April or early May.

US Airways also has a debt obligation payable March 20, 2003,
totaling $27 million dollars for 14 Airbus aircraft. The company
currently is in discussions with certain interested parties
regarding these payments and anticipates reaching agreement
during the five business-day cure period, allowing for the
extension of this payment, if necessary.

US Airways is the nation's seventh largest airline and serves
nearly 200 destinations in the U.S., Canada, Mexico, Europe and
the Caribbean. It filed for Chapter 11 protection on Aug. 11,
2002, and has committed to a fast-track reorganization that
targets the company's emergence from bankruptcy protection on
March 31, 2003.

Bankruptcy law does not permit solicitation of votes on a
reorganization plan until the Bankruptcy Court approves the
applicable disclosure statement relating to the reorganization
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 commenced on Jan. 31, 2003, and will
conclude on March 10, 2003. A hearing on confirmation of the
Amended Plan is scheduled to commence in the Bankruptcy Court on
March 18, 2003. Persons who are entitled to vote on the Amended
Plan should obtain and read the Bankruptcy Court-approved
Disclosure Statement prior to voting to accept or reject the
Amended Plan. The company will emerge from Chapter 11 if and
when the Amended Plan receives the requisite creditor approvals
and is confirmed by the Bankruptcy Court.

U.S. ENERGY: 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.  In fiscal 2002, most of its
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. At
May 31, 2002, Crested is a 70.5% majority-owned subsidiary of
USE. Properties of RMG are held in Wyoming and southeastern
Montana. RMG holds approximately 280,486 gross mineral acres of
coalbed methane properties.

U. S. Energy 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.

The Company has conducted exploratory drilling and testing on
certain of the coalbed methane properties, but in general,
additional work (gathering production data from a producing
property, and on other properties, the dewatering of completed
wells, and drilling and dewatering more wells) will have to
occur to establish if U.S. Energy has any proved reserves.
Specifically, the Company expected to make a determination
whether there are proved reserves on its producing property
(Bobcat property) by February 14, 2003, and on another property
(Clearmont, which is not now in production) by April 30, 2003.
The Company did not receive any revenues from coalbed methane
gas sales through the end of the most recent fiscal year (May
31, 2002), although after that date, it has been selling coalbed
methane gas from the producing Bobcat property (bought in June

During fiscal 2002, the Company's cash position increased by
$1,878,800 over the prior balance at May 31, 2001 to a cash
balance of $2,564,300. This increase came as a result of
$1,822,300 and $3,391,300 being generated in investing
activities and financing activities, respectively. This increase
in cash of $5,213,600 was offset by a reduction of $3,334,800
which was consumed in operations.

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 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

U. S. Energy has generated operating losses in each of the last
three years as a result of costs associated with shut down
mineral properties. It has maintained some of its investments in
gold and uranium properties that have not generated operating
revenues. These properties require expenditures for items such
as permitting, care and maintenance, holding fees, corporate
overhead and administrative expenses. Success in the minerals
industry is dependent on the price that a producer can receive
for its minerals, and it cannot be predicted what the long term
price for gold and uranium will be and therefore cannot be
predicted when, or if, U. S. Energy will generate net income
from these operations.

Grant Thornton LLP of Denver, Colorado has included a "going
concern" qualification in its July 18, 2002, Auditors Report on
the financial condition of U. S. Energy.  "[T]he 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," Grant Thornton says.

VANTAGEMED CORP: Dec. 31 Working Capital Deficit Tops $1.1 Mill.
VantageMed Corporation (OTC Bulletin Board: VMDC) announced
financial results for the quarter and year ended December 31,
2002. Total revenue for the quarter ended December 31, 2002 was
$5.7 million compared to revenue of $5.6 million for the fourth
quarter of 2001, an increase of 3%. Consecutively, revenue
increased $400,000 from $5.3 million in the third quarter of
2002, or 7.5%. Net loss for the quarter ended December 31, 2002
was $763,000, compared to a net loss of $9.3 million for the
fourth quarter of 2001 and a net loss of $630,000 in the third
quarter of 2002.

For the year ended December 31, 2002, revenue was $21.7 million
compared to $23.9 million for the year ended December 31, 2001,
a decrease of 9%. Net loss for the year ended December 31, 2002
totaled $7.7 million compared to a net loss of $16.0 million for
the year ended December 31, 2001.

Net loss before interest, taxes, depreciation and amortization
(EBITDA) totaled $480,000 and $6.6 million for the quarter and
year ended December 31, 2002 compared to $8.7 million and $13.2
million for the comparable periods in 2001. We present EBITDA
because we believe it provides an alternative measure by which
to evaluate our performance. EBITDA is not a measurement defined
by GAAP and should not be considered an alternative to, or more
meaningful than, information presented in accordance with GAAP.

Cash provided by operations for the three months ended
December 31, 2002 totaled $63,000 compared to cash used for
operations totaling $2.0 million for the same period in 2001.
Cash used for operations totaled $5.4 million and $7.2 million
for the years ended December 31, 2002 and 2001, respectively.

VantageMed Corporation's December 31, 2002 balance sheet shows
that its total current liabilities exceeded its total current
assets by about $1.1 million. The Company also reported that its
total net capital is further depleted to about $3 million from
about $10 million recorded a year ago.

Richard Brooks, Chairman and Chief Executive Officer, said, "Our
fourth quarter results reflect continued financial and
operational improvement. Fourth quarter revenues and gross
margins exceeded each of the previous quarters in 2002 due to
increased sales of our core products. Additionally, we generated
positive quarterly operating cash flow for the first time in the
Company's history. Although general and administrative expenses
increased sequentially from the third quarter due to incremental
costs related to our restructuring plan and other non-recurring
items, we are pleased with our overall fourth quarter

Mr. Brooks added, "During 2003, we will continue to focus on
core product sales, growth opportunities in EDI transaction
services as well as cost management through initiatives aimed at
reducing the costs of providing customer support for our legacy
products. While we expect a seasonal decrease in revenues for
the first quarter of 2003, we anticipate overall growth for

VantageMed is a provider of healthcare information systems and
services distributed to over 11,000 customer sites through a
national network of regional offices. Our suite of software
products and services automates administrative, financial,
clinical and management functions for physicians, dentists, and
other healthcare providers and provider organizations.

WATERWAYS CRUISES: Case Summary & Largest Unsecured Creditors
Lead Debtor: Waterways Cruises Inc.
             809 Fairview Pl N Ste 110
             Seattle, Washington 98109-4452

Bankruptcy Case No.: 03-12939

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      WCM Classic Catering LLC                   03-12940

Type of Business: Seattle-based cruise company

Chapter 11 Petition Date: March 6, 2003

Court: Western District of Washington (Seattle)

Judge: Samuel J. Steiner

Debtors' Counsel: Bradford Anderson, Esq.
                  Riddell Williams P.S.
                  1001 4th Ave #4500
                  Seattle, WA 98154-1065
                  Tel: (206) 624-3600

                           Estimated Assets:   Estimated Debts:
                           -----------------   ----------------
Waterways Cruises Inc      $100K to $500K      $1MM to $10MM
WCM Classic Catering LLC   $1MM to $10MM       $500K to $1MM

     A. Waterways Cruises' 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Classic Catering LLC        Goods and Services      $1,392,916
407 North 36th Street
Seattle, WA 98103-8630

Waterways Boat Co., Inc.    Boat Charter Rental       $837,888
809 Fairview PI N Ste 110    ($6,533 mo.)
Seattle, WA 98109-4452
Employment Security Dept.                              $63,781

Internal Revenue Service                              $359,394
1201 Pacific Avenue Suite 550
Tacoma, WA 98402-45317

Dept. of Revenue                                      $191,000

Aiken, St. Louis & Siljeg   Goods and Services         $59,902

Tauck World Discover                                   $30,000

Qwest Dex                   Goods and Services         $20,580

Ocean Alexander Investment  Goods and Services         $12,529

City of Seattle             Goods and Services         $10,000

Bravo Publications          Goods and Services          $4,619

Certified Folder Display    Goods and Services          $4,597

Congruent Software          Goods and Services          $6,299

Croft, Ms. Christi                                      $4,900

Mentink, Ms. Judy                                       $4,510

Nextel Communications       Goods and Services          $9,451

Orca Radio (98.9 Smooth     Goods and Services          $6,838

Port of Seattle - AP        Goods and Services          $5,092

Purchase Power              Goods and Services          $8,297

Qwest Interprise Network    Goods and Services          $6,365

     B. WCM Classic's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Internal Revenue Service                              $445,289
1201 Pacific Avenue Suite 5550
Tacoma, WA 98402

Waterways Boat Co., Inc.    Goods and Services        $425,855
Dept. of Revenue                                       $74,516
State of Washington

Abbey Party Rents           Goods and Services         $66,066

Villa Academy                                          $25,000

Event Resources                                         $9,500

American Express            Goods and Services          $1,232

City of Seattle             Goods and Services          $9,822

Cowart, Mr. Mike                                        $3,312

Dept. of Labor and Industries                           $2,781
State of Washington

Employment Security Dept.                               $3,994

McHugh, Ms. Kathleen                                    $2,103  

New England Fin'l. Dept.     Goods and Services         $1,943

Pedersen's Rentals & sales   Goods and Services         $6,039

Qwets Dex                    Goods and Services         $2,949

Safeco Insurance Companies   Goods and Services         $3,949

St. Benedict School                                     $2,000

Support Registry             Goods and Services         $1,746

Support Registry                                        $1,746

HJC Corp.                   Goods and Services            $843

WHEELING-PITTSBURGH: Calls PBGC Plan Termination "Premature"
Wheeling-Pittsburgh Steel Corporation's President and CEO James
G. Bradley said the Pension Benefit Guaranty Corporation (PBGC)
acted prematurely when it announced that it will act to
terminate the WHX Pension Plan. The WHX Pension Plan includes
employees from Wheeling-Pittsburgh Steel.

"We did not anticipate that the PBGC would take this action and
had no advance notice of their announcement," Bradley said. "We
believe this action was premature."

Before the PBGC can act on its announcement, it must obtain
WHX's consent or obtain a court order allowing it to terminate
the WHX Pension Plan and assume responsibility for paying

"The announcement [Fri]day is not a reflection of our long-term
business plan for emerging from bankruptcy," Bradley noted. "I
believe this action is nothing more than the PBGC taking
preemptive action, as it has done with previous steel company
pension plans, in order to limit its potential future
liabilities. In fact, as part of the review process, the
Emergency Steel Loan Board solicited input from the PBGC, which
did not offer any objections to the plan."

Bradley noted that the company has had discussions with the
Emergency Steel Loan Board this week and that Wheeling-
Pittsburgh Steel plans to file an amended application with the
board early next week.

"The PBGC's announcement will not affect our day-to-day
operations and will not change our plans to file an amended
application with the Emergency Steel Loan Board," Bradley said.

WHEELING-PITTSBURGH: Exclusive Solicitation Extended Until May 9
Judge Bodoh grants this Motion, extending Wheeling-Pittsburgh
Steel Corp. and its debtor-affiliates' exclusive period to
solicit acceptances to and including Friday, May 9, 2003.  He
further directs that his order granting this Motion is without
prejudice to the Debtors' right to ask for further extension, or
the rights of the Official Committees, or any other party, to
object to any further request. (Wheeling-Pittsburgh Bankruptcy
News, Issue No. 35; Bankruptcy Creditors' Service, Inc.,

WIDECOM GROUP: Zafar Husain Doubts Ability to Continue Operation
Zafar Husain Siddiqui, Chartered Accountant for Widecom Group,
Inc., has included the following in his Auditors Report to the
Board of Directors of that Company:

        "Substantial doubts existed, especially in view of a
negative net equity as at December 31, 2002, as well as on the
date of this report, as to the Company's ability to continue to
meet its obligations and commitments and also with regards to
its ability to continue to generate sufficient amounts of cash
flows from its operations to maintain its solvency for a
reasonable period  of time without continued, substantial
financial support from the personal resources of two of its
directors and one key employee who is very closely related to
those two directors. Information from management does not
provide definitive confirmation of the related willingness and
ability of the above mentioned individuals."

His Report goes on to say:

        "[T]he Company's ability to continue as a going concern
may also be jeopardized by a decision by a secured creditor (a
financial institution) to enforce its demand for an immediate,
full repayment by the company of its indebtedness even though
such an action might be considered by management to be unlikely,
extreme, unscrupulous, or unwarranted.

        "[T]he Company is committed to issuing 100,000 common
shares to a claimant of alleged infringement of software and
trademark ownership rights as part of an out-of-court
settlement. As of the date of this report, those shares are yet
to be issued. The effects of those to-be-issued shares on the
financial statements have not been included."

His remarks are dated March 03, 2003, at Mississauga, Ontario.

WIRE ROPE CORP: Enters LOI to Sell Assets to KPS Special
KPS Special Situations Fund II has entered into a letter of
intent to acquire the assets of Wire Rope Corporation of
America, Inc., out of bankruptcy.

Based in St. Joseph's, Missouri, WRCA is the nation's leading
producer of high carbon wire and wire rope products and the
largest domestic supplier of wire rope products to the mining,
oil and gas, construction and steel industries. The Company
operates four manufacturing facilities and six distribution
centers across the country.

Under the terms of the letter of intent, KPS will form a new
company to purchase substantially all of the assets of WRCA for
approximately $50 million. KPS will invest substantial equity in
the new company to fund working capital requirements as WRCA
continues to execute a cost-based restructuring. The new company
also expects to enter into revised and extended agreements with
the Company's current senior lenders and the United Steel
Workers of America.

The proposed transaction remains subject to customary legal and
business conditions, including judicial approval of the sales
process and the completion of business and legal due diligence.
KPS and the Company intend to close the transaction in the
second quarter of 2003.

Mr. Ira Glazer, Chief Restructuring Officer of WRCA, said: "We
look forward to working with KPS to take the Company out of
bankruptcy. The KPS team brings the capital and demonstrated
turnaround expertise that will allow us to build on the progress
we have made at Wire Rope Corporation of America over the last
twelve months. We intend to be the lowest-cost, highest-quality
producer of high carbon wire and wire rope products in North
America, and we will achieve that goal with the continued
support of our customers, employees, suppliers, and KPS."

Mr. Stephen Presser, a principal at KPS, said: "We applaud the
fine work of the Company's management, union and employees in
rebuilding the company over the past year. Their dedication and
hard work have positioned WRCA to emerge from bankruptcy as a
strong competitor in a challenging economic environment. We are
excited by the opportunity to join the WRCA team and look
forward to making WRCA a premier supplier of wire rope products
in North America."

The KPS Special Situations Funds are a family of private equity
funds focused on constructive investment in distressed
companies, restructurings and other special situations in
partnership with employees and senior managers. KPS has
purchased operating assets out of bankruptcy; established stand-
alone entities to operate divested assets; and recapitalized
highly leveraged public and private companies through equity
infusions. KPS has completed four recent bankruptcy
transactions, including the creation of Republic Engineered
Products to purchase the principal assets of Republic
Technologies International in 2002.

The acquisition of WRCA falls within the core of the KPS
investment strategy: the Company is a proven market leader and
its restructuring presents an opportunity to execute a cost-
based operational turnaround, negotiate new labor agreements
that simplify the company's cost structure, implement new
commercial lending facilities and eliminate environmental and
other liabilities. The KPS investment strategy and portfolio
companies are described in detail at

WORLDCOM INC: Court OKs Claims & Interest Transfer Restriction
Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New
York, informs the Court that Worldcom Inc., and its debtor-
affiliates' net operating loss carryforwards and tax basis in
their assets are two valuable assets of their estates.  
WorldCom, Inc., and its domestic corporate subsidiaries file a
U.S. consolidated federal income tax return.  As of December 31,
2001, the WorldCom Group had an estimated $6,600,000,000
consolidated NOL for federal income tax purposes.  The NOLs are
valuable because the Internal Revenue Code permits corporations
to carry NOLs forward to offset future income and reduce future
tax liabilities.  Based on current projections, the Debtors
expect to have substantial income, which may be offset by any
NOL carryforwards surviving the Company's reorganization in
bankruptcy and amortization and depreciation deductions so as to
reduce their future federal income tax liability.  Even after
taking account of any cancellation of debt impact on the
Debtors, the Debtors' $6.6 billion of NOL carryforwards
translates into $1.5 billion of potential future tax savings for
the Debtors based on a combined federal and state corporate
income tax rate of 38%.  Additional tax savings are also
expected to result from the Debtors' substantial tax basis,
which is in excess of fair market value of the Debtors' assets.
These savings will enhance the Debtors' cash position and
significantly contribute to the Debtors' efforts toward a
successful reorganization.

Ms. Goldstein states that the ability of the Debtors to use
their NOL carryforwards and certain other tax attributes in this
way is subject to certain statutory limitations.  One limitation
is contained in Section 382 of the Internal Revenu Code, which,
for a corporation that undergoes a change of ownership, limits
the corporation's ability to use its NOLs and certain other tax
attributes to offset future income.  For this purpose, a change
of ownership occurs where the percentage of a loss company's
equity held by one or more percent shareholders increases by
more than 50 percentage points over the lowest percentage of
stock owned by these shareholders at any time during a three-
year rolling testing period.  A change of ownership prior to
confirmation of a plan would effectively eliminate the ability
of the Company to utilize its NOL carryforwards and a portion of
its tax basis.

The limitations imposed by Section 382 in the context of a
change of ownership pursuant to a confirmed Chapter 11 plan are
significantly more relaxed, particularly where the plan involves
the retention or receipt of at least half of the stock of the
reorganized Debtors by shareholders or qualified creditors.
Qualified creditors are, in general:

    -- those creditors who have held their claims continuously
       since at least 18 months prior to the filing of the
       bankruptcy petition; or

    -- those creditors who hold claims that were incurred in the
       ordinary course of the Debtors' business and have held
       these claims continuously since they were incurred.

A creditor who does not meet these requirements for the sole
reason that its claim was not held continuously is still
considered a qualified creditor if the creditor will directly or
indirectly own less than 5% of the reorganized Debtors' equity.

Ms. Goldstein deems it likely that the Debtors' Chapter 11 plan
of reorganization will involve the issuance of a substantial
portion of WorldCom, Inc.'s common stock to creditors in
satisfaction, either in whole or in part, of the Debtors'
indebtedness.  In this event, the Debtors may seek to avail
themselves of the special relief afforded by Section 382 for
changes in ownership under a confirmed Chapter 11 plan.  There
is a danger, however, that if the relief requested is not
granted, the Debtors could lose the substantial benefits of
their NOL carryforwards prior to their emergence from Chapter 11
as a result of trading and accumulation of claims or shares by
creditors in claims against, and stockholders in interests in,
the Debtors.  Accordingly, consistent with the automatic stay in
these cases, the Debtors need the ability to preclude certain
transfers, and monitor and possibly object to other changes in
the ownership of stock and claims, to assure that:

    -- a 50% change of ownership does not occur prior to the
       effective date of a Chapter 11 plan in these cases; and

    -- with respect to a change of ownership occurring under a
       Chapter 11 plan, the Debtors have the opportunity to
       avail themselves of the special relief provided by
       Section 382.

By this Motion, the Debtors seek authorization pursuant to
Sections 362 and 105(a) of the Bankruptcy Code for authorization
to establish procedures to:

    -- notify holders of all Restricted Securities of the
       Debtors of the notification and other procedures that
       must be satisfied at least 20 days before, or in certain
       cases only contemporaneous with, the sale or other
       transfer of these claims; and

    -- notify holders of each class of common stock and
       preferred stock of WorldCom, Inc. of the injunction
       prohibiting the ownership of stock above a certain

Restricted Securities will mean:

    -- general unsecured claims, including claims incurred in
       the ordinary course of business, against the Debtors; and

    -- all preferred securities issued by MCI I, MCI II, MCI III
       and MCI IV, which are treated for federal income tax
       purposes as indebtedness of the Debtors.

Specifically, to ensure the Debtors receive the full benefits of
the automatic stay, the Debtors seek authorization of the notice
which will advise creditors and holders of Stock -- whose
actions could adversely affect the Debtors' ability to use their
NOL carryforwards -- that these procedures were approved:

    A. Any person and any entity within the meaning of Section
       382 is stayed, prohibited, and enjoined, pursuant to
       Sections 362 and 105(a) of the Bankruptcy Code:

       -- in the case of a person or Entity who does not own any
          class of Stock, or who owns less than 4.75% of each
          class of Stock, from purchasing, acquiring, or
          otherwise obtaining Ownership of an amount of any
          class of Stock which, when added to the person's or
          Entity's total Ownership of the class of Stock, if
          any, equals or exceeds 4.75% of the class of Stock; or

       -- in the case of a person or Entity who Owns at least
          4.75% of any class of Stock, from purchasing,
          acquiring, or otherwise obtaining Ownership of any
          additional shares of Stock.

    B. Any person or Entity that proposes to purchase, acquire
       or otherwise obtain Ownership, and any other person or
       Entity who by reason of the transaction would obtain
       Ownership of Restricted Securities that, when added to
       that person's or Entity's prior Ownership of Restricted
       Securities, would own an aggregate amount of Restricted
       Securities that equals or exceeds $750,000,000 must, at
       least 20 days before any transaction, file with this
       Court and serve on the Debtors and their attorneys a
       notice; provided, however, that a person or Entity will
       not be subject to the notice requirement with respect to
       its Ownership of bonds of WorldCom, Inc. issued in May
       2001 if the person or Entity has not acquired and
       retained Ownership of any other Restricted Security since
       January 21, 2001.  The prospective transferor will join
       in the filing or may make a separate filing.  The Debtors
       will then have 20 days after receipt of a joint filing,
       or in the event of separate filings, the later of these
       filings to object to the transaction.  If the Debtors
       file an objection, then the transaction will not be
       effective unless approved by a final and non-appealable
       order of this Court.  If the Debtors do not object within
       the 20-day period, then the transaction may proceed
       solely as set forth in the notice. Further transactions
       must be the subject of additional notices with an
       additional 20-day waiting period.  If the Debtors
       voluntarily advise the person or Entity in writing
       prior to the 20th day that they do not object, the person
       or Entity may proceed then to acquire the subject claims.

    C. If a person or Entity Owns at least $750,000,000 of
       Restricted Securities, the person or Entity must, within
       15 days of this Court's entry of a Final Order approving
       these procedures, file with this Court and serve on
       Debtors and their attorneys a notice containing the
       ownership information.

    D. For purposes of this Motion:

       -- "Ownership" of a claim against, or stock of, the
          Debtors will be determined in accordance with
          Applicable rules under Section 382 and, thus, will
          include direct and indirect ownership (e.g., a holding
          company would be considered to beneficially own all
          shares owned or acquired by its subsidiaries),
          ownership by members of the person's family and
          persons acting in concert, and in certain cases, the
          creation or issuance of an option; and

       -- any variation of the term "Ownership" will have the
          same meaning.

    E. The Debtors may waive, in writing, any and all
       restrictions, stays, and notification procedures
       contained in the this Motion.

Ms. Goldstein contends that the proposed restrictions and notice
and approval procedures are necessary to preserve the Debtors'
NOL carryforwards and certain other tax attributes, which are
valuable assets of the Debtors' estates, while providing
latitude for trading in claims below specified levels.  The
Debtors' ability to meet the requirements of the tax laws in
order to preserve their NOL carryforwards and certain other tax
attributes may be seriously jeopardized unless procedures are
established to ensure that trading in certain claims against and
interests in the Debtors are precluded, and trading in other
claims against the Debtors are closely monitored and made
subject to Court approval.  However, the Debtors recognize that
the trading in claims below specified levels does not, at this
time, pose a serious risk to the NOL carryforwards and certain
other tax attributes.

The Debtors estimate they might be able to use a portion of the
NOL carryforward to offset future income and eliminate
significant income tax liability.  Thus, the NOL carryforward is
clearly a valuable asset of the Debtors' estates and is entitled
to the protection of the automatic stay.  Furthermore, because
maintenance of the NOL carryforward is critical to the Debtors'
prospects for a successful emergence from Chapter 11, the
exercise of this Court's equitable powers under Section 105(a)
is appropriate.

Ms. Goldstein tells the Court that the relief requested is
narrowly tailored to permit certain claims and stock trading to
continue, subject only to Rule 3001(e) of the Federal Rules of
Bankruptcy Procedures and applicable securities, corporate, and
other laws.  The Debtors are seeking to enforce the provisions
of the automatic stay only with respect to certain types of
claims and stock trading which pose a serious risk under the
ownership change tests and to monitor other types of unsecured
claims trading which potentially pose a risk.  The proposed
restrictions on trading are crucial because once a claim or
interest is transferred, it might not be reversible.  
Accordingly, once the transfer acts to limit the NOL and certain
other tax attributes under Section 382, the ability to use a
portion of the NOL and certain other tax attributes may be lost
forever.  The relief requested is, therefore, critical to
prevent an irrevocable loss of the Debtors' NOL carryforwards
that are worth well over a billion dollars.

                            *   *   *

Judge Gonzalez orders that any sale or other transfer in
violation of the procedures set forth in the Motion will be null
and void ab initio as an act in violation of the automatic stay
prescribed in sections 362 and 105(a) of the Bankruptcy Code.
Any sales or other transfers consummated prior to the Entry
Date, and any sales or other transfers initiated on or prior to
February 14, 2003 that are evidenced by a written agreement
legally obligating the proposed purchaser and seller to
consummate the transaction, even if the written agreement is
subject to further documentation to consummate the transaction,
will not be subject to this Order.

Judge Gonzalez also orders the Debtors to send to the Service
List and any indenture trustee or transfer agent for the
Restricted Securities or Stock a notice describing the
authorized procedures.  After receipt of this notice, any
indenture trustees and transfer agents will send this notice to
all holders of the Restricted Securities or Stock registered
with the indenture trustee or transfer agent.  Any registered
holder will, in turn, provide notice to any holder for whose
account the registered holder holds Restricted Securities or
Stock.  Any holder will, in turn, provide notice to any person
or entity for whom the holder holds the Restricted Securities or
Stock.  Additionally, the Debtors will post the notice on the
Independent Website established by the Case Management Order for
posting of documents in the Debtors' cases. (Worldcom Bankruptcy
News, Issue No. 21; Bankruptcy Creditors' Service, Inc.,

WORLDPORT COMMS: Completes Repurchase of Preferred Shares
WorldPort Communications, Inc., (OTCBB: WRDP) has completed the
purchase of approximately 99% of its outstanding preferred stock
from The Heico Companies LLC. The shares were repurchased for
$67.4 million, which represents the aggregate liquidation
preference of the purchased shares, including a 7% dividend that
is required under the terms of the Preferred Stock before any
distributions on or purchase of WorldPort's common stock.
WorldPort is in the process of making a similar purchase offer
to the three remaining preferred stockholders.

                             *   *   *

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

WORLDPORT: Commences Cash Tender Offer for Outstanding Shares
WorldPort Communications, Inc., is commencing a cash tender
offer for all of its outstanding common stock (OTC: WRDP) at an
offer price of $0.50 per share. The offer and withdrawal rights
will expire at 5:00 p.m., New York City time, on Friday,
April 4, 2003. The tender offer is not conditioned upon any
minimum number of shares being offered. However, the tender
offer is subject to certain other conditions set forth in the
Offer to Purchase dated March 7, 2003 and the related Letter of
Transmittal which together constitute the Offer.

The Board of Directors of WorldPort has approved the tender
offer but makes no recommendation to stockholders as to whether
to tender or refrain from tendering their shares. Stockholders
must make their own decision as to whether to tender their
shares and are advised to discuss their decision with their
brokers or other financial and tax advisors.

                             *   *   *

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

W.R. GRACE: DK Wants to Trade Bank Debt & Serve on Committee
The Official Committee of Unsecured Creditors appointed in W.R.
Grace & Co., et al.'s on-going chapter 11 cases, wants
additional large holders of the Debtors' Bank Debt to take seats
on the Committee and bring their expertise in financial
restructurings and reorganizations to the table.  Since the
Committee was formed by the U.S. Trustee on April 13, 2001, Bank
of America, ABN Amro Bank, N.V., Wells Fargo Corporate Trust
Services and Bankers Trust Company, in its role as an indenture
trustee, have resigned.

In particular, the Committee's indicated to DK Acquisition
Partners, L.P., that it would welcome DK's membership and
participation.  DK is a participating lender under (i) the 364-
Day Credit Agreement among W.R. Grace & Co.--Conn., Bank of
America National Trust and Savings Association, as documentation
agent, Chase Manhattan Bank, as administrative agent for the
Banks, and Chase Securities, Inc., as book manager and/or (ii)
the Credit Agreement by and among W.R. Grace & Co., W.R. Grace &
Co.--Conn, Chase Manhattan Bank, as administrative agent, and
Chase Securities, Inc., as arranger.

DK is reluctant to accept a Committee appointment unless it can
obtain an order from the U.S. Bankruptcy Court for the District
of Delaware confirming that it can continue to trade in W.R.
Grace Bank Debt and not violate its fiduciary duty to other
unsecured creditors.  If DK were found to violate its fiduciary
duty, Michael Friedman, Esq., at Richards Spears Kibbe & Orbe
LLP, DK's lead counsel explains, that would subject DK's
claims to disallowance, subordination or other adverse

DK asks Judge Fitzgerald to enter an order determining that DK
won't breach its fiduciary duty to other unsecured creditors  if
it trades Bank Debt while serving on the Committee, provided

      (A) DK discloses its status as a Committee member to its
          counterparty in the trade prior to consummation of
          any trade; and

      (B) the counterparty acknowledges and agreed in the
          purchase and sale agreement that:

          (1) it is aware that DK is a Committee member;

          (2) it is aware that DK may have access to
              information not available to the counterparty;

          (3) notwithstanding this unequal footing, the
              counterparty is prepared to consummate the trade.

Mr. Friedman tells the Court that DK, as a regular part of its
business, trades in debt instruments and has the financial
expertise and experience the Committee wants.  In addition, as
one of the Debtors' larger creditors, DK will devote substantial
time and resources necessary to facilitate the Committee's
activities and participation in W.R. Grace's cases.

Mr. Friedman notes that W.R. Grace's cases are unique in that
the non-asbestos creditor body consists of Bank Debt and Trade
Claims.  The only securities issued by the Debtors are $2
million of public bonds that Sealed Air guaranteed and has paid
and the Debtors' common stock.

Mr. Friedman advises Judge Fitzgerald that DK has already
consulted with the Committee and the Debtors about this request.   
Both say they don't object to this request.  While the facts are
not exactly analogous, Mr. Friedman argues that Bankruptcy
Courts have a long history of entering orders allowing
institutional committee members to trade in a debtor's
securities while serving on a committee.  See, e.g., In re
Federated Department Stores, Inc., et al., No. 1-90-00130, 1991
Bankr. LEXIS 288 (Bankr. S.D. Ohio Mar. 7, 1991), In re The
FINOVA Group, Inc., et al., No. 01-0697 (PJW) (Bankr. D. Del.
Apr. 12. 2001), and In re WorldCom, Inc., et al., No. 02-13533
(AJG) (Bankr. S.D.N.Y. Aug. 6, 2002).

Judge Fitzgerald will review DK Acquisition's request at a
hearing scheduled for 12:00 noon on April 28, 2003.

YORK FUNDING LTD: S&P Lowers Ratings on 3 Series 1998-1 Classes
Standard & Poor's Ratings Services lowered its ratings on York
Funding Ltd.'s $860 million asset-backed notes series 1998-1,
classes I, II, and III. At the same time, the rating on class
III was removed from CreditWatch where it was placed April 6,
2001. This is the fifth downgrade Standard & Poor's has taken
with regard to York's credit-linked notes.

The ratings on classes II and III reflect the losses incurred
due to credit events and associated losses in the portfolio.
There have been a total of more than 10 defaults that have
occurred in the reference portfolio since the original rating
date. Payments on the notes are linked to a pool of reference
credits, and the face amount of the credit-linked notes is
reduced as a result of defaults of those reference credits.

The rating on class I reflects both losses in the pool and the
increased likelihood of an event of default relating to the
credit-linked notes. An event of default could result in an
inability to make full and timely payment on York's credit-
linked notes.

It is Standard & Poor's opinion that the redemption price on the
outstanding credit-linked notes may be less than the face value
of the notes and could result in a default. The ratings take
into account this event's possible occurrence.
                        RATINGS LOWERED
                       York Funding Ltd.
                Asset-backed notes series 1998-1

            Class                                Rating
                                         To                From
            I due July 2005              CC                B
            II due July 2005             D                 CCC
                       York Funding Ltd.
               Asset-backed notes series 1998-1

            Class                                Rating
                                         To                From
            III due July 2005            D         CCC-/WatchNeg

XCEL: Prices 4.875% Debt Financing for Public Service of Colo.
Xcel Energy (NYSE:XEL) has priced $250 million of 10-year First
Collateral Trust Bonds at 4.875% for subsidiary Public Service
of Colorado. The bonds are redeemable at any time pending
various "make whole" provisions.

Closing is scheduled for March 14. Proceeds will be used to
retire $250 million of 6% trust bonds coming due April 15, said
Ben Fowke, Xcel Energy vice president and treasurer.

"We're very pleased with the results of this financing," Fowke
said. "We believe the low interest rate on the bonds reflects
the underlying financial strength of our utility operations and
their business prospects."

The transaction was led by Banc One Capital Markets, Inc. and
UBS Warburg.

Xcel Energy is a major U.S. electricity and natural gas company
with operations in 12 Western and Midwestern states. Formed by
the merger of Denver-based New Century Energies and Minneapolis-
based Northern States Power Co., Xcel Energy provides a
comprehensive portfolio of energy-related products and services
to 3.2 million electricity customers and 1.7 million natural gas
customers through its regulated operating companies. In terms of
customers, it is the fourth-largest combination natural gas and
electricity company in the nation. Company headquarters are
located in Minneapolis. More information is available at

Xcel Energy Inc.'s 7.000% bonds due 2010 (XEL10USR1) are trading
at about 92 cents-on-the-dollar, DebtTraders reports. See  
real-time bond pricing.

XETEL CORPORATION: Committee Brings-In Cox & Smith as Counsel
The Official Committee of Unsecured Creditors of Xetel
Corporation sought and obtained approval from the U.S.
Bankruptcy Court for the Western District of Texas to employ
Cox & Smith Incorporated as its counsel.

Cox & Smith will:

(a) assist and advise the Committee in its consultations with
     the Debtor relative to Debtor's financial situation and
     providing legal advice to the Committee with respect to the
     powers and duties of a Debtor-in-Possession;

(b) represent the Committee at hearings before the Court and
     discuss with the Committee the issues raised and the
     decisions rendered by the Court;

(c) assist the Committee with working with Debtor and Debtor's
     creditors in obtaining confirmation of a plan of
     reorganization which is of maximum benefit to unsecured

(d) assist and advise the Committee in its examination and
     analysis of the conduct of the Debtors' affairs and the
     causes of its filing for relief under Chapter 11; and

(e) perform any and all other legal services on behalf of the
     Committee which may be necessary for the benefit of
     unsecured creditor's of the estate, including the
     preparation of motions, applications, orders or other
     papers for filing with the Court in this case.

The attorneys and paralegals primarily responsible for Cox &
Smith's representation of the Committee and their respective
billing rates are:

     Deborah D. Williamson      Shareholder    $425 per hour
     Patrick L. Huffstickler    Shareholder    $295 per hour
     Thomas Rice                Associate      $210 per hour
     Andrew Sherwood            Associate      $170 per hour
     Sheree Manning             Paralegal      $ 95 per hour

XeTel Corporation filed for chapter 11 protection on October 21,
2002. Mark Curtis Taylor, Esq., at Hohmann & Taube LLP represent
the Debtor in its restructuring efforts. When the Company filed
for protection from its creditors, it listed $37,733,000 in
total assets and $34,271,000 in total liabilities.

* Large Companies with Insolvent Balance Sheets
                                Shareholders  Total     Working
                                Equity        Assets    Capital
Company                 Ticker  ($MM)          ($MM)     ($MM)
-------                 ------  ------------  -------  --------
Advisory Board          ABCO        (16)          48      (20)
Air Canada              AC       (1,888)       7,816     (821)
Alliance Imaging        AIQ         (79)         658      (25)
Alaris Medical          AMI         (47)         573      129              AMZN     (1,353)       1,990      550
Anteon Int'l. Corp.     ANT          (3)         307       27
Arbitron Inc.           ARB        (169)         127      (17)
Alliance Resource       ARLP        (46)         288      (16)
Altiris Inc.            ATRS         (6)          13       (8)
Actuant Corp            ATU         (44)         295       18
Avon Products           AVP         (91)       3,327       73
Saul Centers Inc.       BFS         (24)         346      N.A.
Big 5 Sporting Goods    BGFV        (23)         252       66
Choice Hotels           CHH        (114)         314      (37)
Campbell Soup Co.       CPB        (114)       5,721   (1,479)
Echostar Comm           DISH       (778)       6,520    2,024
Dun & Brad              DNB         (20)       1,431      (82)
Euronet Worldwide, Inc. EEFT         (8)          61        3
Gamestop Corp.          GME          (4)         607       31
Graftech Int'l          GTI        (307)         797      112
Hollywood Casino        HWD         (92)         553       89
Imclone Systems         IMCL         (5)         474      295
Gartner Inc             IT           (5)         824       18
Jostens                 JOSEA      (540)         375      (40)
Journal Register        JRC         (36)         711      (26)
Kos Pharmaceuticals     KOSP        (58)          83       27
Ligand Pharmaceuticals  LGND        (58)         117       22
Level 3 Comm Inc.       LVLT       (240)       8,963      581
Mega Blocks Inc.        MB          (37)         106       56
Memberworks Inc.        MBRS        (21)         281     (100)
Moody's Corp.           MCO        (304)         505       12
Medical Staffing        MRN         (33)         162       55
MicroStrategy           MSTR        (69)         104       23
MTC Technologies        MTCT          0           26       10
Petco Animal            PETC        (86)         473       68
Proquest Co.            PQE         (45)         628     (140)
Per-Se Tech Inc.        PSTI        (50)         203       24
Qwest Communications    Q        (1,094)      31,228   (1,167)
RH Donnelley            RHD        (111)         296        0
Sepracor Inc.           SEPR       (392)         727      430
St. John Knits Int'l    SJKI        (76)         236       86
Talk America            TALK        (74)         165       36
United Defense I        UDI        (166)         912      (55)
UST Inc.                UST         (47)       2,765      828
Valassis Comm.          VCI         (33)         386       80
Ventas Inc.             VTR         (54)         895      N.A.
Western Wireless        WWCA       (274)       2,370     (105)


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

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

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

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

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 Go to order any title today.

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


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

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

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

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

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

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