TCR_Public/030411.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Friday, April 11, 2003, Vol. 7, No. 72    


ACME METALS: Has Until May 5 to Make Lease-Related Decisions
AIR CANADA: Seeking Access to US$700 Million CCAA Financing
AIR CANADA: Revenue Passenger Miles Tumble 10% in March
ALLIED WASTE: Raises $825 Million from Three Public Offerings
ALTERNATIVE FUEL: Files for CCAA Protection in Canada

AMERICREDIT CORP: Prices $1 Billion Asset-Backed Securitization
AMPHENOL CORP: S&P Rates Proposed $750MM Bank Facility at BB+  
AQUILA INC: Will Hold Q4 Earnings Conference Call on Tuesday
ASIA GLOBAL: Court Grants BNY Stay Relief to Disburse $27MM Fund
BEAR STEARNS: S&P Assigns Low-B Prelim Ratings to 6 Note Classes

BEVSYSTEMS: Weak Financial Position Raises Going Concern Doubt
BRIGHTPOINT INC: S&P Affirms B Corporate Credit Rating
BUDGET GROUP: Wants More Time to Make Lease-Related Decisions
CABLE SATISFACTION: Bankers Further Extend Waivers to April 23
CASCADES: Unit Under Investigation for Collusion Allegations

CASCADIA CAPITAL: Ability to Meet Current Cash Needs Uncertain
CHESAPEAKE ENERGY: Expects to Exceed Previous Q1 2003 Guidance
COMMSCOPE: Will Publish First Quarter Results on April 29, 2003
CONSECO FINANCE: Files Liquidation Plan and Disclosure Statement
CONSECO INC: Court Okays Korn/Ferry's Engagement as Consultant

CONSOLIDATED FREIGHTWAYS: Terminates LOI to Sell Canadian Assets
CONSTELLATION BRANDS: Reports Improved Fiscal 2003 Performance
COVANTA ENERGY: Pushing for Further Exclusivity Period Extension
COX COMMS: Will Publish First Quarter Earnings Report on May 5
CRESCENT REAL ESTATE: Look for Q1 2003 Earnings Results on May 6

DIMENSIONS HEALTH: Fitch Cuts $80 Mil. Revenue Bond Rating to B-
DIRECTV LATIN AMERICA: Signs-Up Protiviti Inc. as Auditors
DIRECTV: Says Hughes Split-Off from GM Won't Affect Operations
ENRON CORP: EPMI Sues City of Palo Alto to Recover $40M Property
FANSTEEL: Turning to Executive Sounding for Financial Advice

FEDERAL-MOGUL: Wins Approval to Sell UK Property for GBP$3.4MM
FLEMING: Heritage Property Demands Prompt Decision on Leases
FLEMING: Honoring Up to $16M of Prepetition Customer Obligations
FOCAL COMMUNICATIONS: Committee Retains Klett Rooney as Counsel
FS CONCEPTS: FAS Co. Wants to Acquire Assets Out of Bankruptcy

GENESEE CORP: Receives $2.4MM Escrow from Sale of Foods Division
GLASSTECH HOLDING: Delaware Court Closes Chapter 11 Proceedings
GLOBAL CROSSING: Court Clears Settlement Agreement with Pegasus
GUITAR CENTER: Improved Performance Triggers Outlook Revision
HEARTLAND SECURITIES: Hires Piper Rudnick as Bankruptcy Counsel

HUGHES: S&P Keeps Ratings Watch over News Corp.'s Equity Buy-Out
INTERSTATE BAKERIES: S&P Concerned About Weak Performance
IP SERVICES: Bankruptcy Trustee Takes Legal Action vs AGD Mining
J. CREW: Moody's Further Downgrades Debt Ratings to Low-B/Junks
KAISER ALUMINUM: Court Grants Clark Public Limited Stay Relief

KENNY INDUSTRIAL: Committee Balks at Scope of AEG's Retention
KEY3MEDIA: Committee & Thomas Weisel Agree to Plan Outline
MAGELLAN HEALTH: Court Approves Interim Compensation Procedures
MASSEY ENERGY: Brings-In Thomas Dostart as New General Counsel
MERRIMAC PAPER: Asks Court to Extend Schedule Filing Deadline

MESABA HOLDINGS: Aviation Unit Slashes 33 Management Positions
MIRANT CORP: S&P Lowers Credit & Sr. Unsec. Debt Ratings to B
NATIONAL CENTURY: Court Approves Stipulation with Silver Moves
NATIONAL STEEL: U.S. Steel Reaches New Labor Agreement with USWA
NATIONAL STEEL: ISG Chairman Ross Applauds New Labor Agreement

NORTHWEST AIRLINES: Will Hold Q1 Earnings Conference Call Wed.
PACIFIC GAS: Fitch Keeps Watch on Defaulted Securities' Ratings
PEABODY ENERGY: Will Publish First Quarter Results on Wednesday
PEGASUS AVIATION: Fitch Drops Several Series 2000 Note Ratings  
PENTON MEDIA: Will Publish First Quarter Results on May 1, 2003

PHILIP MORRIS: Bonding Requirement Ups Credit Insurance Cost
PHOTRONICS INC: S&P Rates $125-Mill. Convertible Sub. Notes at B
PHYAMERICA PHYSICIAN: All Proofs of Claim Due Monday
POLAROID CORP: Examiner Mandarino Hires Pachulski as Co-Counsel
RURAL/METRO: Southwest Ambulance Div. Wins New $25-Mil. Contract

SAGE LIFE: A.M. Best Hatchets Financial Strength Rating to B++
SIX FLAGS INC: S&P Assigns B Rating to $430-Million Senior Notes
SLEEPMASTER: Requests for Payment of Admin. Claims Due April 28
SOLUTIA INC: Urges Court to Certify Alabama Court Jury Awards
SPIEGEL: Earns Nod to Continue Prepetition Customer Programs

SUN CITY: Receives $30,000 Cash Offer to Buy Public Shell
SWEETHEART HLDGS: S&P Drops Unit's Corporate Credit Rating to SD
TEREX CORP: Pitches Winning Bid for Supply Contract with Israel
TESORO PETROLEUM: Prices Sr. Secured Term Loan & Note Offering
THOMAS GROUP: Elects Charles M. Harper to Board of Directors

TRENWICK GROUP: Reaches Definitive Pact with Senior Noteholders
UNITED AIRLINES: Flight Attendants Set Vote on Tentative Pact
UNIVERSAL ACCESS: CityNet Brings-In $16 Mill. in Cash Investment
US AIRWAYS: S&P's B Credit Rating Reflects Weak Revenue Outlook
US SEARCH CORP.COM: Needs New Funding to Meet Cash requirements

USG CORP: Plan Filing Exclusivity Extended Further Until Sept. 1
VALCOM INC: Independent Auditors Express Going Concern Doubt
VENTURE HOLDINGS: Voluntary Chapter 11 Case Summary
WORLDCOM INC: Wants More Time to File Schedules and Statements

* BOOK REVIEW: From Industry to Alchemy: Burgmaster, A Machine
               Tool Company


ACME METALS: Has Until May 5 to Make Lease-Related Decisions
Acme Metals Incorporated and its debtor-affiliates sought and
obtained an extension from the U.S. Bankruptcy Court for the
District of Delaware of their lease decision period under 11
U.S.C. Sec. 365(4)(4).  The Court gives the Debtors until May 5,
2003, to decide whether to assume, assume and assign, or reject
unexpired nonresidential real property leases.

Acme Metals and its debtor-affiliates are engaged in the
business of steel manufacturing and fabricating. The Company
filed for chapter 11 bankruptcy protection on September 28, 1998
(Bankr. Del. Case No. 98-2179).  Brendan Linehan Shannon, Esq.
and James L. Patton, Esq. at Young, Conaway, Stargatt & Taylor
represent the Debtors in their restructuring efforts. The
Debtors' consolidated balance sheet as of December 31, 2000
reports total assets of $654,421 and liabilities of $362,737.

AIR CANADA: Seeking Access to US$700 Million CCAA Financing
Air Canada intends to remain in possession and control of its
assets and business during the course of the CCAA Proceeding.  
To finance the carrier's on-going working capital needs, General
Electric Capital Canada Inc. offered to provide up to
US$700,000,000 of senior secured financing to the Applicants,
subject to the terms and conditions of a commitment letter dated
on April 1, 2003.

Prior to the CCAA Petition Date, the Applicants turned to GE
Capital Canada for help bridging a potential liquidity shortfall
for the period from April 1 through May 2, 2003.  Air Canada
projected that its cash disbursements would exceed cash receipts
by more than C$350,000,000 during this period.  In addition to
C$375,000,000 of unrestricted cash on hand, the CCAA financing
will provide adequate liquidity to meet all of the Applicants'
anticipated needs to continue normal operations throughout the
CCAA process.

Mr. Justice Farley, in his Initial Order, grants Air Canada
permission to tap the GE Capital Canada-backed financing

                     CCAA Financing Facility

The CCAA Financing Term Sheet among Air Canada, as borrower, GE
Capital as Administrative and Collateral Agent, for itself and a
potential syndicate of other lenders, provides funds in two

   * a Tranche A revolving term credit facility in a principal
     amount not to exceed US$300,000,000 (including a Letter of
     Credit Sub-Facility in an amount to be determined) and

   * a Tranche B non-revolving term loan facility in a principal
     amount of up to US$400,000,000.

The CCAA Facility provides Air Canada with working capital
financing until the earliest of October 1, 2004, and the
effective date of a plan of arrangement in the CCAA Proceeding.

                  Tranche A Revolver Availability

The availability of the Tranche A Facility is subject to the
maintenance of a maximum loan to to-be-negotiated collateral
ratio that based on the sum of:

  * the orderly liquidation value of the Applicants' aircraft;

  * the fair market value of the Applicants' fee simple real
    estate; and

  * the orderly liquidation value of the Applicants' equipment.

The value of the collateral will be determined by GE Capital
Aviation Services, Inc. or another appraiser acceptable to GE
Capital.  The face amount of all letters of credit issued under
the Letter of Credit Sub-facility will constitute a loan for
purposes of the loan to collateral ratio.

                Tranche B Term Loan Availability

The outstanding amount of the Tranche B Facility will be subject
to the maintenance of maximum loan to to-be-determined
collateral ratios.  For the purposes of those ratios, the
collateral will include Applicants' accounts receivable and
Spare Parts inventory.  GECAS or another appraiser acceptable GE
Capital will determine the collateral's value.  GE Capital or an
outside auditor will determine the value of the receivables.

                  Borrowing and Interest Options

At Air Canada's option, the Tranche A Facility and the Tranche B
Facility will be available:

  (A) in U.S. dollars:

        (i) at a floating rate equal to the US$ Index Rate
            plus the Applicable US$ Index Margin; or

       (ii) absent a default, a 1, 2 or 3-month LIBOR Rate plus
            the Applicable LIBOR Margin; or

  (B) in Canadian dollars at:

        (i) a floating rate equal to the Cdn.$ Index Rate plus
            the Applicable Cdn.$ Index Margin; or

       (ii) absent a default, a 30, 60 or 90 day BA Rate plus
            the Applicable BA Margin.

  -- "LIBOR Rate" will be the rate per annum equal to the
     offered rate for deposits in U.S. dollars for the
     applicable interest period that appears on Telerate Page
     3750 as of 11:00 a.m. (London time) two Eurodollar business
     days before the beginning of the interest period.  Interest
     on LIBOR loans will be payable and adjusted at the end of
     each applicable LIBOR period.  LIBOR breakage fees and
     borrowing mechanics will be provided in the final CCAA
     Facility documents.

  -- "US$ Index Rate" will be the higher of (i) the prime rate
     per annum as most recently reported in the "Money Rates"
     column of The Wall Street Journal or (ii) the overnight
     Federal funds rate per annum plus 50 basis points.
     Interest on US$ Index Rate loans will be payable monthly in
     arrears and will be adjusted as of each change in the US$
     Index Rate.

  -- "BA Rate" will be the rate per annum determined by GE
     Capital Canada by reference to the average rate quoted on
     the Reuters Monitor Screen Page CDOR (displaying Canadian
     interbank bid rates for Canadian dollar bankers'
     acceptances) applicable to bankers' acceptances for the
     applicable term as of 11:00 a.m. (Toronto time) two
     business days before the beginning of the term.  Intserest
     on BA Rate loans will be payable at the end of each
     applicable BA period.  BA Rate loan breakage fees and
     borrowing mechanics will be set forth in the final CCAA
     Facility documents.

  -- "Cdn.$ Index Rate" will be defined as the higher of (i) the
     annual rate of interest quoted from time to time in the
     "Report on Business" section of The Globe and Mail as being
     "Canadian prime", "chartered bank prime rate" or words of
     similar description and (ii) the BA Rate in respect of a BA
     period for 30 days, plus, 1.75%.  Interest on Cdn.$ Index
     Rate loans will be payable monthly in arrears and will be
     adjusted as of each change in the Cdn.$ Index Rate.

All interest and fees will be calculated on the basis of a 360-
day year and actual days elapsed.

These margins will apply so long as any loan remains

    * Applicable US$ Index Margin               5.0%
    * Applicable LIBOR Margin                   6.5%
    * Applicable Cdn.$ Index Margin             5.0%
    * Applicable BA Margin                      6.5%
    * Applicable L/C Margin                     4.0%
    * Applicable Unused Facility Fee Margin:

      Aggregate Unused
      Tranche A                       Applicable Unused
      Facility Level                  Facility Fee Margin
      ----------------                -------------------
      at most US$100,000,000                 0.50%

      greater than US$100,000,000            0.75%
      and at most US$200,000,000

      at least US$200,000,000                1.00%

                      CCAA Financing Fees

The CCAA Financing Facility requires Air Canada to pay a variety
of fees:

1. US$5,000,000 Commitment Fee

   The Commitment Fee will be due and payable to GE Capital
   Canada in U.S. dollars upon Air Canada's acceptance of the
   Commitment Letter.  The Commitment Fee will be fully earned
   and non-refundable when due and payable.

2. US$35,000,000 Closing Fee

   The Closing Fee will be due and payable to GE Capital Canada
   in U.S. dollars at the time that the conditions precedent to
   the Tranche B Facility have been satisfied and the Tranche B
   Facility is available for usage.  The Closing Fee will be
   fully earned and non-refundable when due and payable.

3. Letter of Credit Fee

   The L/C Fe is equal to the Applicable L/C Margin on the face
   amount of letters of credit.  The L/C is payable to the Agent
   monthly in arrears, plus any charges assessed by the issuing

4. Unused Facility Fee

   The Unused Facility Fee is equal to the Applicable Unused
   Facility Fee Margin on the average unused daily balance of
   the CCAA Facility, payable to Agent monthly in arrears.

5. US$500,000 Annual Collateral Monitoring Fee

   The Monitoring Fee will be payable to the Agent yearly in
   advance on the Closing and on the first anniversary date of
   the Closing.  But if a plan of arrangement in the CCAA
   Proceeding becomes effective during the 12-month period in
   respect of which the Monitoring Fee has been paid, the
   Collateral Agent will refund -- by credit or payment -- the
   Monitoring Fee amount that has been paid based on the number
   of days in the year following the effective date of the plan.

In the event of a default, all interest rates increase by 2%.

Air Canada will also pay all out-of-pocket expenses incurred in
connection with the Commitment Letter, prior communications, the
CCAA Facility, and a field examination fee per person per diem
plus actual out-of-pocket expenses in connection with the
conduct of GE Capital Canada's field audit and the evaluation
and documentation of the CCAA Facility.

Air Canada has already paid GE Capital a non-refundable
US$1,000,000 Underwriting Deposit.

Events of default include, but are not be limited to:

(i) the appointment of a receiver, interim receiver, receiver
     and manager or trustee in bankruptcy with powers to operate
     or manage any Applicant's affairs;

(ii) the dismissal or conversion of CCAA Proceeding, or granting
     relief from the stay in favor of third parties except as
     contemplated by the definitive CCAA Facility documentation;

(iii) a post-CCAA Proceeding judgment liability or event that
     will, in GE Capital Canada's judgment, significantly impair
     the Applicants' financial condition, operations, or ability
     to perform under the CCAA Facility or any CCAA Court or US
     Bankruptcy Court order;

(iv) a threatened or actual seizure or detention of any aircraft
     by any airport or navigation authority or airline or
     airport-related servicer or other material property of the

(v) any violation or breach of any representation or warranty
     in any material respect, or covenant; or

(vi) any amendment or modification of the CCAA Order that
     adversely affects GE Capital Canada's or the Lenders'
     rights without GE Capital Canada's prior consent.


Subject only to a consensual C$10,000,000 first-priority
Administrative Charge to cover legal and professional fees, Air
Canada's obligations to repay all existing and future
obligations under the CCAA Facility and under any agreements
with GE Capital Aviation are secured by second-priority liens on
all of the Applicants' unencumbered assets.  In particular, GE
Capital Canada, on behalf of itself and as Collateral Agent, the
Lenders and GE Capital Aviation, on behalf of itself and the
Lease Obligees, will receive a fully perfected first priority
security interest in, and first ranking charge on, subject only
to, in terms of priority, Permitted Liens, all of the existing
and after acquired real and personal, tangible and intangible,
property of the Applicants and their subsidiaries.

The Permitted Liens include those liens created under the CCAA
Order and the existing validly perfected liens granted by the
Applicants before April 1, 2003.

Air Canada's subsidiaries will guarantee its obligations.  GE
Capital Canada will receive a first ranking pledge of all of the
issued and outstanding capital stock of each subsidiary and
affiliate of the Applicants.  GE Capital Canada will have the
discretion to determine, as between the Tranche A Facility and
the Tranche B Facility, the relative priorities of the Liens on
the Collateral securing the facilities.

If Air Canada receives from Canadian Imperial Bank of Commerce
up to C$350,000,000 cash as a prepayment of CIBC's accounts
payable for Aeroplan points with respect to the Aerogold feature
of Aeroplan, and Air Canada grants CIBC a security interest in
the revenues receivable for the 12 months under its agreements
with CIBC regarding Aerogold and the licenses and trademarks
CIBC used in connection with Aerogold, GE Capital Canada agrees
that those revenues, licenses and trademarks will not be subject
to the Lien.  However, before receiving any cash from CIBC, Air
Canada must provide GE Capital Canada with an updated advice
from Solomon Smith Barney showing at least C$50,000,000 in
increased annual revenue pursuant to Air Canada's amended
agreements with CIBC regarding Aerogold.

GE Capital also requires certain mandatory prepayments from the
net proceeds of any sale or other disposition of any of the
Applicants' assets and, subject to exceptions for repairs and
replacements and satisfaction of prior-ranking liens and court-
ordered charges, all net insurance proceeds or other awards
payable in connection with the loss, destruction or condemnation
of any of the Applicants' assets.

               GECC Hunting for Other Lenders

GECC Capital Markets Group, Inc. will initiate discussions with
potential lenders regarding their participation in the CCAA
Facility.  However, the success of the syndication is not a
condition precedent to the CCAA Facility being made available.
Air Canada and its management agree to assist GECC in its
syndication efforts and GECC Capital Markets Group may provide
industry trade organizations information necessary and customary
for inclusion in league table measurements.

           GE Capital May Provide Exit Financing

GE Capital Canada will work with Air Canada's existing senior
management to convert a minimum of US$200,000,000 and up to
US$300,000,000 of the principal amount of the obligations
outstanding under the CCAA Facility into a senior secured credit
facility upon Air Canada's emergence from its restructuring
proceedings.  At GE Capital Canada's option, GE Capital Aviation
will purchase, at par, the obligations under the senior secured
Exit Facility.  GE Capital Aviation will assist in the
facilitation of a consensual restructuring of leases to the
Applicants, including those leases GE Capital Aviation managed
or serviced, so that the Applicants may emerge successfully from
the CCAA Proceeding.

            Air Canada Will Indemnify GE Capital

Air Canada agrees to indemnify and hold GE Capital, its
affiliates, harmless from and against all suits, actions,
proceedings, claims, damages, losses, liabilities and expenses,
which may be incurred or asserted against them in connection
with, or arising out of, the Commitment Letter, any Prior
Communications, the CCAA Facility, any other related financing,
documentation, disputes or environmental liabilities, or any
related investigation, litigation, or proceeding.

Each party also waives any right to a trial by jury or any claim
or cause of action arising in connection with the Commitment
Letter, the CCAA Facility or any other related financing. (Air
Canada Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

AIR CANADA: Revenue Passenger Miles Tumble 10% in March
Air Canada mainline flew 10.1 per cent fewer revenue passenger
miles in March 2003 than in March 2002, according to preliminary
traffic figures. Capacity decreased by 5.5 per cent, resulting
in a load factor of 74.3 per cent, compared to 78.1 per cent in
March 2002; a decrease of 3.8 percentage points.

Jazz, Air Canada's regional airline subsidiary, flew 0.8 per
cent more revenue passenger miles in March 2003 than in March
2002, according to preliminary traffic figures. Capacity
decreased by 7.9 per cent, resulting in a load factor of 60.2
per cent, compared to 55.0 per cent in March 2002; an increase
of 5.2 percentage points.

"While North American competitive conditions continue to be
difficult, the war in Iraq together with Severe Acute
Respiratory Syndrome have further suppressed the demand for air
travel, particularly internationally. Current concern over the
SARS outbreak in Toronto is having a material impact on traffic
levels to and through Toronto. The timing of Easter this year,
in April rather than March, also accounted for some of the year
over year traffic decline," said Rob Peterson, Executive Vice
President and Chief Financial Officer.

"To better match supply with demand we are reducing our system
ASM capacity by 12% in April and 16% in May," said Mr. Peterson.

DebtTraders reports that Air Canada's 10.250% bonds due 2011
(AC11CAR1) are trading at about 24 cents-on-the-dollar. See  
real-time bond pricing.

ALLIED WASTE: Raises $825 Million from Three Public Offerings
Allied Waste Industries, Inc., (NYSE: AW) announced that its
recent successful public offering of common stock and Series C
senior mandatory convertible preferred stock, together with the
successful public debt offering of Allied Waste North America,
Inc., a wholly-owned subsidiary of Allied Waste, raised net
proceeds of approximately $825 million. Allied Waste intends to
use the net proceeds from these financing activities to repay
amounts outstanding under its existing bank credit facility as
stated in its previously announced financing plan.

Allied Waste sold approximately 12 million shares of common
stock at $8.30 per share and 6 million 3-year mandatory
convertible preferred shares at $50 per share. The mandatory
convertible preferred stock will have a dividend yield of 6.25
percent and a conversion premium of approximately 22 percent
over the stock price of $8.30 per share. Allied Waste granted
the underwriters a 15% over-allotment option in each offering.
Allied Waste North America has sold $450 million of its 7-7/8%
senior notes due 2013.

Allied Waste has also commenced the refinancing of its existing
credit facility, which is expected to close and fund by the end
of April. The new $3 billion credit facility is expected to be
comprised of a $1.5 billion revolver and a $1.5 billion term
loan. The revolver has been fully committed.

Proposed terms of the new credit facility include the following:

* Maturities -- Maturity of the revolver is expected to move
  from 2005 to 2008 and the new term loan is expected to move   
  amounts maturing 2004 through 2007 to 2010, decreasing
  maturities over the next five years by over $2 billion.

* Liquidity -- Revolver capacity is expected to increase from
  $1.3 billion to $1.5 billion, increasing available liquidity
  for the company.

* Covenants -- Financial covenants are expected to be consistent
  with those in the existing credit facility, including an
  Interest Coverage covenant (EBITDA/Interest) and a Leverage
  covenant (Debt/EBITDA). The proposed covenants should give the
  company a significant amount of EBITDA cushion on its most
  restrictive covenant over the life of the credit facility.

* Allied Waste is expected to have the ability to make
  significant cash dividend payments on the Series A Preferred
  Stock if the Leverage Ratio remains at specified levels after
  July 30, 2004. This mitigates the risk of an increase in the
  dividend rate on the Series A Preferred Stock if dividends are
  not paid in cash.

* Expected terms will increase Allied Waste's flexibility to
  accelerate certain bond maturities with free cash flow should
  it be financially attractive to do so.

"We are pleased to be in a position to commence the refinancing
of our credit facility with more favorable terms and increased
flexibility," said Tom Ryan, Executive Vice President and CFO of
Allied Waste. "We are also gratified with having the $300
million mandatory convertible preferred stock offering being
priced at the favorable end of the indicative ranges, the $100
million common equity offering being successfully completed and
the $450 million bond offering being upsized by 50% and priced
at a yield of 7-7/8%. With the improvements in debt maturities,
liquidity, and covenants, and given the strong, supportable cash
flow of this business, we have mitigated the perceived leverage
risk at Allied Waste."

Allied Waste Industries, Inc., a leading waste services company,
provides collection, recycling and disposal services to
residential, commercial and industrial customers in the United
States. As of December 31, 2002, the Company operated 340
collection companies, 175 transfer stations, 169 active
landfills and 66 recycling facilities in 39 states.

                         *     *     *

As previously reported, Allied Waste Industries, Inc.'s $450
million of senior notes due 2013 at 7-7/8% have been rated BB-,
Ba3 and BB- by Standard & Poor's, Moody's and Fitch,

ALTERNATIVE FUEL: Files for CCAA Protection in Canada
Alternative Fuel Systems Inc., (TSX:ATF) has filed for creditor
protection under the Companies' Creditors Arrangement Act (CCAA)
in order to facilitate a corporate restructuring. AFS believes
that the CCAA process provides the best opportunity for the
Company to continue to operate in light of the previously
announced dramatic decrease in sales to its major European

AFS has retained the services of Network Capital Inc., to assist
in the reorganization. Network has worked with a number of
companies in similar circumstances.

The reorganization of the Company will need to be approved by a
vote of its creditors, and depending upon the structure
selected, may also require approval by the Shareholders. As a
result, the Company's Annual and Special Meeting of
Shareholders, originally scheduled for May 7, 2003, will be
postponed to a later date. The new meeting date will be
announced to the Shareholders once it has been determined.

Jim Perry, AFS President and CEO, stated, "[W]e have looked at
many options for the Company in light of our sales level and
current operating cost structure. We believe the CCAA
restructuring process provides the best opportunity for AFS to
continue to operate while enhancing value for our creditors,
shareholders and other stakeholders going forward. The
reorganization we are undergoing is necessary to ensure we
become financially viable and can continue to serve our current
customers as well as to support growth initiatives such as our
Mexican Monza project and the introduction of our new gaseous
fuel injector".

AFS is a Canadian environmental technology company providing
innovative and cost-effective solutions to the growing global
problem of harmful exhaust emissions from internal combustion
engines. AFS has commercialized electronic engine management
systems enabling diesel and gasoline engines to operate on
cleaner burning natural gas. AFS' natural gas systems and
components are installed worldwide in new vehicles manufactured
by Original Equipment Manufacturers, or retrofitted in existing
fleets. AFS is headquartered in Calgary, Canada and trades on
the Toronto Stock Exchange under the trading symbol ATF.

AMERICREDIT CORP: Prices $1 Billion Asset-Backed Securitization
AmeriCredit Corp., (NYSE:ACF) announced the pricing of a $1.0
billion offering of automobile receivables-backed securities
through lead managers Deutsche Bank Securities and Barclays
Capital and co-managers Credit Suisse First Boston, J.P. Morgan,
Lehman Brothers, and Wachovia Securities.

The bond insurer for this transaction is MBIA Insurance
Corporation (NYSE:MBI). AmeriCredit uses net proceeds from
securitization transactions to provide long-term financing of
automobile retail installment contracts.

The securities will be issued via an owner trust, AmeriCredit
Automobile Receivables Trust 2003-A-M, in seven classes of

Class     Amount        Average Life     Price    Interest Rate
-------  ----------    --------------  ----------  -------------
A-1      $188,000,000      0.20 years   100.00000   1.2975%
A-2-A    $186,000,000      1.00 years    99.99886   1.67%
A-2-B    $186,000,000      1.00 years   100.00000   Libor + .27%
A-3-A     $73,500,000      2.00 years    99.99759   2.37%
A-3-B     $73,000,000      2.00 years   100.00000   Libor + .37%
A-4-A    $146,500,000      3.06 years    99.99745   3.10%
A-4-B    $146,500,000      3.06 years   100.00000   Libor + .47%

The weighted average coupon is 2.6%.

The Note Classes are rated by Standard & Poor's, Moody's
Investors Service, Inc. and Fitch, Inc. The ratings by Note
Class are:

          Note Class Standard & Poor's   Moody's     Fitch
          ---------- ------------------ --------- ----------
             A-1             A-1+         Prime-1      F1+
            A-2-A            AAA            Aaa        AAA
            A-2-B            AAA            Aaa        AAA
            A-3-A            AAA            Aaa        AAA
            A-3-B            AAA            Aaa        AAA
            A-4-A            AAA            Aaa        AAA
            A-4-B            AAA            Aaa        AAA

Initial credit enhancement on this trust will total 10.5% of the
original receivable pool balance building to the total required
enhancement level of 18% of the pool balance. This transaction
represents AmeriCredit's 38th securitization of automobile
receivables in which a total of more than $28 billion of
automobile receivables-backed securities has been issued.

AmeriCredit Corp. is one of the largest independent middle-
market auto finance companies in North America. Using its branch
network and strategic alliances with auto groups and banks, the
company purchases retail installment contracts entered into by
auto dealers with consumers who are typically unable to obtain
financing from traditional sources. AmeriCredit has more than
one million customers and $16 billion in managed auto
receivables. The company was founded in 1992 and is
headquartered in Fort Worth, Texas. For more information, visit

As reported in Troubled Company Reporter's February 3, 2003,
Fitch Ratings lowered AmeriCredit Corp.'s senior unsecured
rating to 'B+' from 'BB'. The ratings have been lowered and
removed from Rating Watch Negative where they were placed on
January 17, 2003. The Rating Outlook is now Negative.
Approximately $375 million of senior unsecured debt is affected
by this rating action.

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

AMPHENOL CORP: S&P Rates Proposed $750MM Bank Facility at BB+  
Standard & Poor's Ratings Services affirmed its 'BB+' corporate
credit rating on Amphenol Corp. and assigned a 'BB+' rating to
Amphenol's proposed $750 million senior secured bank credit
facility. The outlook is stable.

Wallingford, Connecticut-based Amphenol manufactures connectors,
cable and interconnect systems for the electronics, cable
television, telecommunications, military/aerospace,
transportation and industrial applications. As of Dec. 31, 2002,
the company had $644 million of debt outstanding.

"We expect that current good operating performance will continue
and strengthen the company's financial profile. Still, the
ratings are limited in the near-to-intermediate term by the
company's leveraged capital structure," said Standard & Poor's
credit analyst Joshua Davis.

The proposed $750 million bank facility consists of a $125
million Tranche A term loan, due in five years (2008), a $500
million Tranche B term loan due in seven years (2010), and up to
$125 million of revolving credit, maturing in five years (2008),
which is expected to be undrawn at closing. The Tranche A term
loan amortizes at a graduating rate starting at $5 million in
the first year. The Tranche B term loan amortizes at a rate of
1% of principal each year for years one through six with the
balance due in year seven.

The bank facility is rated 'BB+', the same as the corporate
credit rating. The bank facility is secured by a first-priority
perfected pledge of the capital stock of Amphenol's domestic
subsidiaries and 65% of the capital stock of the company's
foreign subsidiaries. Standard & Poor's does not regard capital
stock of subsidiaries as having material value in a distressed
scenario. The facility includes a springing lien provision
that makes the facility secured by effectively all the assets of
the company if the corporate credit rating or senior equivalent
rating falls to 'BB-' or the Moody's Investor Service
equivalent. Even though the loans are secured, recovery
prospects in default are still mediocre, as nearly
half of the company's assets are goodwill, which is why the
corporate credit and bank credit facilities are rated the same.

AQUILA INC: Will Hold Q4 Earnings Conference Call on Tuesday
Aquila, Inc., (NYSE:ILA) will conduct a conference call and
webcast to discuss 2002 fourth quarter and year-end results on
April 15 at 9 a.m. Eastern Time. Participants will be Chief
Executive Officer Rick Green, Chief Operating Officer Keith
Stamm and Interim Chief Financial Officer Rick Dobson.

To access the live webcast, go to Aquila's Web site at
http://www.aquila.comand click on Investors to find the webcast  
link. Listeners should allow at least five minutes to register
and access the presentation.

For those unable to access the live broadcast, replays will be
available for two weeks, beginning approximately two hours after
the presentation. Web users can go to the Investors section of
the Aquila Web site at and choose  
Presentations & Webcasts.

Replay will also be available by telephone through April 22 at
800/405-2236 in the United States, and at 303/590-3000 for
international callers. Callers must enter the access code 534824
when prompted.

Based in Kansas City, Missouri, Aquila operates electricity and
natural gas distribution networks serving customers in seven
states and in Canada, the United Kingdom, and Australia. The
company also owns and operates power generation assets. More
information is available at

Aquila Inc.'s 6.625% bonds due 2011 are currently trading at
about 70 cents-on-the-dollar.

ASIA GLOBAL: Court Grants BNY Stay Relief to Disburse $27MM Fund
The Bank of New York, as successor Indenture Trustee under an
Indenture dated October 12, 2000 between Asia Global Crossing
Ltd., and the United States Trust Company of New York, asks the
Court to:

    (i) modify the automatic stay, to the extent applicable, to
        permit the Indenture Trustee under the Indenture
        governing the 13-3/8% senior notes issued by Asia Global
        Crossing Ltd. to disburse $27,285,000 presently held
        subject to the terms of the Indenture by the Indenture
        Trustee for the benefit of the holders of record as of
        November 12, 2002, of the Notes; and

   (ii) release the Indenture Trustee from any potential
        liability for making the Disbursement.

Glenn E. Siegel, Esq., at Dechert LLP, in New York, explains
that pursuant to the Indenture, Noteholders are entitled to
semi-annual interest payments.  An interest payment came due,
but was not paid, on October 15, 2002.  After negotiation with
certain holders of the Notes, pursuant to an agreement among the
parties, on October 28, 2002, AGX paid $27,285,000 to the
Indenture Trustee, to be held in trust for the sole benefit of
the Noteholders until the earliest possible date on which the
Disbursement could be made.  The Disbursement date was set as
November 22, 2002, due to a provision of the Indenture requiring
that a "special record date" be established with respect to any
late interest payment -- even one less than two weeks late, as
was the case here.

Following the Petition Date, on November 21, 2002, Mr. Siegel
recounts that the Indenture Trustee informed the Noteholders
that, due to AGX's bankruptcy filing, it would not make the
Disbursement on November 22.  The Indenture Trustee continues to
hold the Funds pursuant to the terms of the Indenture for the
sole benefit of the Noteholders.  The Indenture Trustee has
informed the Noteholders that it believes it cannot make the
Disbursement pursuant to the Indenture unless this Court enters
an Order:

   (i) modifying the automatic stay imposed pursuant to Section
       362 of the Bankruptcy Code, to the extent applicable, to
       permit the Disbursement; and

  (ii) releasing the Indenture Trustee from any potential
       liability for making the Disbursement.

Mr. Siegel insists that the Funds are not property of AGX's
bankruptcy estate.  When they were transferred pursuant to the
Indenture to the Indenture Trustee for the sole benefit of the
Noteholders, AGX lost all rights and interests in the Funds, and
the automatic stay imposed with respect to property of the AGX
estate is therefore wholly inapplicable to the Funds.

Mr. Siegel believes that the only possible interest that AGX
might assert with respect to the Funds would be through an
action for recovery of the Funds as a preferential transfer
under Sections 547 and 550 of the Bankruptcy Code.  The
Indenture Trustee does not believe that there is any viable
action against it for its receipt of the Funds; nonetheless, it
is conceivable that AGX might seek to recover the Funds from the
Bank of New York as an "initial transferee" under Section 550 of
the Bankruptcy Code.  But even if a preference action could be
brought, it is clear that the Funds are not property of the
estate, AGX's transfer of the Funds was made in the ordinary
course of its business -- an interest payment which came due at
a regular interval every six months over a significant period
prior to the Petition Date, and the Indenture Trustee is a mere
conduit for payment of these non-estate funds.  The payment was
made within a substantially timely manner under the applicable
grace period.

Since AGX has no interest, even contingent, in the Funds, Mr.
Siegel asserts that there is no possibility for harm to AGX's
estate or its creditors arising from the Indenture Trustee
making the Disbursement.  Moreover, the Indenture Trustee
believes that it is significant that both AGX and the Official
Committee of Unsecured Creditors have indicated that they do not
presently intend to object to this request.

                  Pacific Crossing Objects

Beth E. Levine, Esq., at Pachulski Stang Ziehl Young Jones &
Weintraub P.C., in New York, argues that the Bank of New York's
request is procedurally defective because proceedings to obtain
declaratory judgments must be brought as adversary proceedings
under the Federal Rules of Bankruptcy Procedure.  If the Court
looks beyond this fundamental procedural defect, the request
must still be denied because:

  -- the filing of the Motion belies the Indenture Trustee's
     assertion that the Funds are not property of AGX's estate;

  -- if the Funds are property of AGX's estate, no cause exists
     to lift the stay; and

  -- the Court should not allow AGX to release the Indenture
     Trustee from any potential liabilities for disbursing the
     Funds, as the transfer of the Funds from AGX to the
     Indenture Trustee falls squarely within preferential
     transfers avoidable under Section 547(b) of the Bankruptcy
     Code; moreover, there is no consideration for the release.
     (Global Crossing Bankruptcy News, Issue No. 37; Bankruptcy
     Creditors' Service, Inc., 609/392-0900)

BEAR STEARNS: S&P Assigns Low-B Prelim Ratings to 6 Note Classes
Standard & Poor's Ratings Services assigned its preliminary
ratings to Bear Stearns Commercial Mortgage Securities Trust
2003-TOP10's $1.22 billion commercial mortgage pass-through
certificates series 2003-TOP10.

The preliminary ratings are based on information as of
April 9, 2003. Subsequent information may result in the
assignment of final ratings that differ from the preliminary

The preliminary ratings reflect the credit support provided by
the subordinate classes of certificates, the liquidity provided
by the trustee, the economics of the underlying loans, and the
geographic and property type diversity of the loans. Classes A-
1, A-2, B, C, and D are currently being offered publicly.
Standard & Poor's analysis determined that, on a weighted
average basis, the pool has a debt service coverage ratio of
2.10x, a beginning loan-to-value ratio (LTV) of 72.4%, and an
ending LTV of 57.9%. Unless otherwise indicated, all
calculations in the presale report, including weighted averages,
include only the A2 note of the 1290 Avenue of the Americas pari
passu loan, the A1 and A2 notes of the Federal Center Plaza pari
passu loan, and the $14.5 million pari passu note of the
Perryville I Corporate Park loan.

  Bear Stearns Commercial Mortgage Securities Trust 2003-TOP10
     Commercial mortgage pass-thru certs series 2003-TOP10
      Class              Rating              Amount ($)
      A-1                AAA                303,370,000
      A-2                AAA                752,722,000
      B                  AA                  35,001,000
      C                  A                   38,043,000
      D                  A-                  12,174,000
      E                  BBB+                15,218,000
      F                  BBB                  9,130,000
      G                  BBB-                 7,609,000
      H                  BB+                 10,652,000
      J                  BB                   4,565,000
      K                  BB-                  6,087,000
      L                  B+                   4,566,000
      M                  B                    3,043,000
      N                  B-                   3,044,000
      O                  N.R.                12,174,188
      X-1*               AAA             1,217,398,188
      X-2*               AAA             1,121,407,000
    *Interest only class. Notional amount. N.R.-Not rated

BEVSYSTEMS: Weak Financial Position Raises Going Concern Doubt
BevSystems International, Inc.'s primary source of liquidity has
historically consisted of sales of equity securities and debt
instruments. The Company is currently engaged in discussions
with numerous parties with respect to raising additional
capital. The Company has incurred operating losses, negative
cash flows from operating activities and has negative working

These conditions raise substantial doubt about the Company's
ability to continue as a going concern. The Company has
initiated several actions to generate working capital and
improve operating performances, including equity and debt
financing. There can be no assurance that the Company will be
able to successfully implement its plans, or if such plans are
successfully implemented, that the Company will achieve its

Furthermore, if the Company is unable to raise additional funds,
it may be required to reduce its workforce, reduce compensation
levels, reduce dependency on outside consultants, modify its
growth and operating plans, and even be forced to terminate
operations completely. The Company does not intend to
manufacture bottled water products without firm orders in hand
for its products. The Company intends to expend costs over the
next twelve months in advertising, marketing and distribution.
These costs are expected to be expended prior to the receipt of
significant revenues. There can be no assurance that the company
will generate significant revenues as a result of its investment
in advertising, marketing and distribution and there can be no
assurance that the company will be able to continue to attract
the capital required to fund its business plan. However, the
Company has no definitive plans or arrangements in place with
respect to additional capital sources at this time. The Company
has no lines of credit available to it at this time. There is no
assurance that additional capital will be available to the
Company when or if required.

BRIGHTPOINT INC: S&P Affirms B Corporate Credit Rating
Standard & Poor's Ratings Services revised its outlook on
Brightpoint Inc., to stable from negative. The outlook revision
reflects the company's improved profitability and financial

Standard & Poor's also affirmed its 'B' corporate credit rating
on this Indianapolis, Indiana-based distributor and provider of
value-added logistics services in the wireless communications
products distribution market. Total debt outstanding is about
$10 million.

The company reported revenues of $1.3 billion for the fiscal
year ended December 2002, essentially flat with the prior year.
While Brightpoint reported a net loss of $42.4 million in fiscal
2002, the company has maintained positive EBITDA for the past
three quarters ended December 2002.

"Although revenue growth is likely to remain weak in the near
term, profitability in fiscal 2003 is expected to benefit from
cost reductions," stated Standard & Poor's credit analyst Martha
Toll-Reed. In addition, the company has repurchased
substantially all of the zero-coupon convertible notes due 2018.
As a result, Brightpoint has materially improved its capital
structure and effectively eliminated the financial risk of the
convertible noteholders exercising their put option in March

The stable outlook reflects an improved capital structure, and
Standard & Poor's expectation that Brightpoint will maintain
operating profitability.

BUDGET GROUP: Wants More Time to Make Lease-Related Decisions
Budget Group Inc., and its debtor-affiliates ask the Court to
extend their deadline to assume or reject unexpired leases
through and including May 30, 2003.

According to Edmon L. Morton, Esq., at Young Conaway Stargatt &
Taylor LLP, in Wilmington, Delaware, the Debtors have largely
completed the process of evaluating each of the unexpired leases
of non-residential property for their economic desirability and
compatibility with their Chapter 11 process.  In addition, the
Debtors have already obtained Court approval authorizing
assumption and assignment of rejection for the vast majority of
their unexpired leases of non-residential property.  In
particular, the Debtors expended considerable time and resources
on consummating the North American Sale, which included the
assumption and assignment of more than 7,000 contracts,
including a majority of the Debtors' unexpired leases of non-
residential real property.  In addition, the Debtors sought and
obtained the Court's authority to reject several unnecessary and
economically improvident leases.  Accordingly, the Debtors have
made considerable progress in evaluating their executory
contracts and unexpired leases of non-residential real property
as part of their overall Chapter 11 process.

Although the Debtors have made tremendous progress in evaluating
their unexpired leases of non-residential real property, Mr.
Morton relates that the extension of time will provide the
Debtors with the means to complete that process.  Currently, the
Debtors are a party to a small number of Unexpired Leases, which
remains to be evaluated.  However, given the inherent fluidity
in the operation of a large, complex multinational business
enterprise, there may be additional Unexpired Leases that have
not yet been identified by the Debtors.  As a result, the
Debtors need more time to evaluate their remaining Unexpired
Leases and ensure that all Unexpired Leases have been

In addition, Mr. Morton tells the Court that granting an
extension of time will allow the Debtors to verify that they
have identified and evaluated any other Unexpired Leases and
determine if, in fact, each lease has been properly assumed and
assigned or rejected.  Notably, since the sale of substantially
all of their assets, the Debtors continue to manage and resolve
certain administrative, corporate and bankruptcy issues that
have accompanied the going concern sale of the Debtors' multi-
billion dollar operations, including the myriad issues arising
in connection with their executory contracts and unexpired
leases. For example, in connection with the North American Sale,
the Debtors have previously identified in their records certain
executory contracts and unexpired leases not originally
identified in the ASPA and, as a result, have had to prepare and
file subsequent motions with the Court seeking either the
assumption and assignment or rejection of various executory
contracts and unexpired leases.

Pending their election to assume or reject the Unexpired Leases,
Mr. Morton assures the Court that the Debtors will perform all
of their obligations arising from and after the Petition Date in
a timely fashion, including payment of postpetition rent due, as
required by Section 365(d)(3) of the Bankruptcy Code.  As a
result, there should be no prejudice to the Lessors under the
Unexpired Leases as a result of the requested extension.  An
extension affords the Debtors the maximum flexibility in their
Chapter 11 process while preserving the Lessors' rights under
the Bankruptcy Code, and thus should be approved.

In enacting Section 365(d)(4) of the Bankruptcy Code, Congress
recognized "that in some cases, sixty days will not be enough
time for bankrupt lessees to decide whether to assume or reject
leases.  In those circumstances, after adequate demonstration of
cause, bankruptcy courts may grant lessees extensions of time in
which to assume or reject."  In deciding whether to assume or
reject the Unexpired Leases, the Debtors are required to use
their business judgment to determine whether assumption or
rejection is in the best interests of their estates.  In view of
this requirement, the United States Court of Appeals for the
Third Circuit has held that cause exists for granting an
extension of time under Bankruptcy Code Section 365(d)(4) when
"a particular debtor needs additional time to determine whether
the assumption or rejection of particular leases is called for
by the plan of reorganization that it is attempting to develop."

The United States Court of Appeals for the Second Circuit held
that these factors, among others, would establish whether
"cause" existed to extend the Section 365(d)(4) period:

  A. whether the leases are an important asset of the estate to
     the extent that the decision to assume or reject would be
     central to any plan of reorganization;

  B. whether the case is complex and involves large numbers of

  C. whether the debtor has had insufficient time to
     intelligently appraise each lease's value to a plan of
     reorganization; or

  D. whether the lessor will be prejudiced by the Debtors
     continued occupation of the premises.

Mr. Morton asserts that cause exists to extend the time within
which the Debtors must assume or reject the Unexpired Leases.

The Court will consider the Debtors' request at the April 21,
2003 hearing.  By application of Del.Bankr.LR 9006-2, the lease
decision deadline is automatically extended through the
conclusion of that hearing. (Budget Group Bankruptcy News, Issue
No. 18; Bankruptcy Creditors' Service, Inc., 609/392-0900)    

CABLE SATISFACTION: Bankers Further Extend Waivers to April 23
Cable Satisfaction International Inc., announced that its
bankers have extended the waivers pertaining to the maturity
date of the credit facility of its subsidiary Cabovisao -
Televisao por Cabo, S.A., until April 23, 2003, subject to
certain conditions.

The Company is pursuing constructive discussions with secured
lenders, noteholders, suppliers and potential investors to reach
a consensual agreement on a long-term solution to its financial
requirements and those of Cabovisao. There can be no assurance
as to the outcome of these discussions.

Csii builds and operates large bandwidth (750 Mhz) hybrid fibre
coaxial networks and, through its subsidiary Cabovisao -
Televisao por Cabo, S.A. provides cable television services,
high-speed Internet access, telephony and high-speed data
transmission services to homes and businesses in Portugal
through a single network connection.

The subordinate voting shares of Csii are listed on the Toronto
Stock Exchange under the trading symbol "CSQ.A".

CASCADES: Unit Under Investigation for Collusion Allegations
The Canadian Competition Bureau is presently investigating
allegations of collusion among certain Canadian paper merchants
including Cascades Resources, a division of Cascades Fine Papers
Group Inc. Cascades Fine Papers Group Inc. is a wholly owned
subsidiary of Cascades Inc. The allegation is based on the
assumption that Cascades Resources and its competitors would
have colluded to unduly reduce market competition between paper
merchants in Canada.

Given that this investigation is still in its early stages the
company can make no further comment on this matter at this time.

Cascades Resources and its representatives will cooperate fully
with the Canadian Competition Bureau throughout the  
investigation. As soon as the results of the inquiry are known,
they will be communicated to the public by means of press

                          *   *   *

As reported in Troubled Company Reporter's February 7, 2003
edition, Standard & Poor's Ratings Services raised its rating on
Cascades Inc.'s US$450 million senior unsecured notes to 'BB+'
from 'BB'. At the same time, the 'BB+' long-term corporate
credit rating and 'BBB-' senior secured debt rating on the
diversified paper and packaging producer were affirmed. The
outlook is stable.

The rating change stems from the redemption of the US$125
million 8.375% senior notes outstanding of Cascades' operating
subsidiary, Cascades Boxboard Group Inc. This redemption will be
financed by the senior unsecured notes offering, which was
increased to US$450 million from the proposed US$325 million.

CASCADIA CAPITAL: Ability to Meet Current Cash Needs Uncertain
Cascadia Capital Corporation was incorporated in the state of
Nevada on October 29, 1999.  Since its incorporation, it was in
the business of the exploration and development of mineral
properties.  Its mining properties consisted of a placer claim
and two blocks of hardrock mineral claims administered by the
British Columbia Ministry of Energy, Mines and Petroleum
Resources.  These claims comprised approximately 1,100 acres in
size.  The Company's properties were without known reserves.  
Its programs had been exploratory in nature.  It had completed
some exploration on both of its properties but has decided to
abandon further exploration after the acquisition of its new

On August 9, 2002, the Company entered into an Agreement and
Plan of Share Exchange with DKJ Technologies Inc., Storage
Alliance Inc. and the shareholders of DKJ Technologies Inc.  
Under the terms of the share exchange agreement, Cascadia
Capital acquired 100% of the issued and outstanding shares of
Storage Alliance Inc., a company incorporated in the Province of
Alberta, Canada, from DKJ Technologies Inc. and its
shareholders.  In consideration for acquiring all of the shares
of Storage Alliance Inc., Cascadia issued an aggregate of
2,500,000 shares of its common stock to the shareholders of DKJ
Technologies Inc. and to certain creditors of Storage Alliance
Inc.  As a result of the share exchange transaction, Storage
Alliance Inc. became Cascadia Capital's wholly-owned subsidiary
as of September 19, 2002.  For financial statement purposes,
Storage Alliance Inc., the acquired subsidiary, is the

Cascadia Capital Corporation company was incorporated in Nevada
on October 29, 1999.  It changed its name from "Cascadia Capital
Corporation" to "Storage Alliance, Inc." effective on
November 12, 2002.  It has one wholly-owned subsidiary, Storage
Alliance Inc., which was incorporated in the Province of
Alberta, Canada on April 18, 2000. For the purposes of the
Company's annual report, it refers to Cascadia Capital
Corporation as "Storage Alliance" and to Storage Alliance Inc.,
the acquired corporation, as "Storage Alliance Alberta".

The Company designs, markets and deploys content and storage
management solutions and professional services for customers in
the petroleum exploration and production and other data-
intensive industries.  Its data storage and content management
solutions protect and manage seismic and related petroleum
exploration and production data and delivers this data with
analytical software applications and tools.  These solutions
enable upstream petroleum industry customers to focus more
resources on their core competency, cost effectively finding and
producing oil and gas, and less on information management and
infrastructure, the result of which should shorten analysis and
decision-making cycles.  For example, in the petroleum industry,
seismic data libraries are now often measured in petabytes (one
million gigabytes), making it difficult for companies to store
and manage such volumes of data.  Certain companies recognize
that designing and managing increasingly complex storage
solutions is not their core competency, and is best outsourced
to an independent entity while they concentrate on operating
their business.  Generic data storage, content management, and
business process solution providers lacking specific market
expertise are typically unable to fulfil customer needs in
specific industries such as the petroleum exploration and
production industry because their solutions focus on horizontal
markets and not vertical markets like upstream petroleum.  
Storage Alliance specializes in petroleum information
technology, seismic data, and storage.

The Company has continued to finance its activities primarily
through the issuance and sale of securities.  It has incurred
recurring losses from operations in each year since inception
and its current liabilities exceed its current assets.  Its net
loss for the year ended October 31, 2002 was $293,945, compared
to $73,618 for the year ended October 31, 2001.  As of October
31, 2002, the Company had an accumulated deficit of $372,365 and
a working capital deficiency of $205,222. Its cash position at
October 31, 2002 was $nil as compared to $28,880 at October 31,
2001.  This decrease was due to the net loss from its operating,
financing and investing activities.

Due to the uncertainty of Cascadia's ability to meet its current
operating and capital expenses, in their report on the annual
consolidated financial statements for the year ended October 31,
2002, the Company's independent auditors included an explanatory
paragraph regarding concerns about the Company's ability to
continue as a going concern.  There is substantial doubt about
its ability to continue as a going concern as the continuation
of its business is dependent upon obtaining further financing,
successful and sufficient market acceptance of its current
service offerings and any new service offerings that it may
introduce, the continuing successful development of its service
offerings and related technologies, and, finally, achieving a
profitable level of operations.  The issuance of additional
equity securities by Cascadia could result in a significant
dilution in the equity interests of its current stockholders.  
Obtaining commercial loans, assuming those loans would be
available, will increase its liabilities and future cash
commitments.   There are no assurances that it will be able to
obtain further funds required for continued operations.  The
Company is pursuing various financing alternatives to meet its
immediate and long-term financial requirements.  There can be no
assurance that additional financing will be available to it when
needed or, if available, that it can be obtained on commercially
reasonable terms.  If Cascadia Capital Corporation is not able
to obtain the additional financing on a timely basis, it will
not be able to meet its other obligations as they become due.  

CHESAPEAKE ENERGY: Expects to Exceed Previous Q1 2003 Guidance
Chesapeake Energy Corporation (NYSE: CHK) has increased its
projected range of first quarter 2003 production guidance to
55.0 - 55.5 billion cubic feet of natural gas equivalent (bcfe),
an increase of 8% from its February 25, 2003 guidance.  For the
quarter, daily production is expected to average 611 - 617
million cubic feet of gas equivalent (mmcfe), 90% of which will
be natural gas.

Chesapeake's new first quarter 2003 guidance is an increase of
4.0 bcfe over the previous range of 51.0 - 51.5 bcfe, or daily
production of 567 - 572 mmcfe.  Of this increase, 50% is
attributable to the El Paso transaction closing one month
earlier than expected and 50% is associated with Chesapeake's
drilling programs generating better than forecasted production

Chesapeake is also announcing an increase in its second quarter
2003 and full-year 2003 production guidance to 60.0 - 60.5 bcfe
and 237 - 243 bcfe, increases of 5% and 3% from the previous
ranges of 57.0 - 57.5 bcfe and 230 - 235 bcfe.  Of the projected
full-year 2003 increase of 7-8 bcfe, 25% is attributable to the
early El Paso closing with 75% related to Chesapeake's better
than forecasted drilling success.  As a result of this recent
drilling success and an increasing number of newly identified
high-potential exploration prospects developed by the company's
geoscientists, Chesapeake has decided to increase its drilling,
land and seismic capital expenditure budget to $575-600 million
from previous guidance of $525 million.

                         Management Comments

Aubrey K. McClendon, Chesapeake's Chief Executive Officer,
commented, "We are very pleased to announce updated production
guidance generated by the success of our Mid-Continent focused,
deep-gas drilling program.  Chesapeake's production growth
trends are significant, sustainable and being driven by teams of
geoscientists, engineers and landmen that are unmatched in their
Mid-Continent talent and experience.  Although Chesapeake is
only the 18th largest producer of gas in the U.S. (and the 8th
largest independent gas producer), the company is conducting the
3rd most active drilling program and is drilling the deepest
wells in the country on average.  In fact, 14 of Chesapeake's
33 operated rigs are targeting formations deeper than 15,000
feet.  In addition, 4 of the 10 deepest wells currently being
drilled in the U.S. are operated by Chesapeake.

"Chesapeake is committed to the exploration of gas targets
between 15-25,000 feet because of our conviction that it is at
these depths where large new reserves of natural gas are most
likely to be found in the U.S.  Our deep drilling programs have
been successful because of the company's unrivaled commitment to
leading-edge geoscience and to building an inventory of
leasehold that is second to none in the Mid-Continent.  
Chesapeake owns over 2.2 million net acres of leasehold and
8,000 square miles of 3-D seismic, much of which is proprietary
to Chesapeake.  In addition, the company will continue building
the foundation for future growth by committing $100 million this
year to new land and 3-D seismic acquisition and evaluation.

"Although our acquisition activity during the first quarter was
extraordinary and increased our proven reserves and production
by more than 20%, the size of the acquisitions and the related
financings have obscured the strength of the company's
underlying organic production growth.  In an industry where 13
of the 20 largest gas producers experienced U.S. gas production
declines in 2002, Chesapeake's ability to generate significant
growth through the drillbit is increasingly distinctive."

           Press Release and Conference Call Information

Chesapeake has scheduled its first quarter 2003 earnings release
after the close of the NYSE trading on Monday afternoon, April
28, 2003.  A conference call is scheduled for Tuesday morning,
April 29 at 9:00 a.m. EDT to discuss the earnings release.  The
telephone number to access the conference call is 913.981.5533.  
For those unable to participate in the conference call, a
replay will be available from 12:00 pm EDT on Tuesday, April 29
through midnight Monday, May 12, 2003.  The number to access the
conference call replay is 719.457.0820 and the passcode is
643335.  The conference call will also be simulcast live on the
Internet and can be accessed at http://www.chkenergy.comby  
selecting "Conference Calls" under the "Investor Relations"
section.  The webcast of the conference call will be available
on the Web site indefinitely.
Chesapeake Energy Corporation is one of the 8 largest
independent natural gas producers in the U.S. Headquartered in
Oklahoma City, the company's operations are focused on
exploratory and developmental drilling and producing property
acquisitions in the Mid-Continent region of the United States.  
The company's Internet address is

As reported in Troubled Company Reporter's March 4, 2003
edition, Standard & Poor's assigned its 'B+' rating to
independent oil and gas exploration and production company
Chesapeake Energy Corp.'s proposed $300 million senior unsecured
notes due 2013. At the same time, Standard & Poor's assigned its
'CCC+' rating to Chesapeake's $200 million convertible preferred

All of Chesapeake's ratings remain on CreditWatch with positive
implications where they were placed on Feb. 25, 2003 following
Chesapeake's announcement that it has signed agreements to
purchase oil and gas exploration and production assets from El
Paso Corp. and Vintage Petroleum Inc. for a total consideration
of $530 million.

The CreditWatch with positive implications reflect that:

      -- Chesapeake is acquiring properties with low cost
         structures in its core Mid-Continent operating area
         that have a high degree of overlap with Chesapeake's
         operations, which should provide cost-reduction

      -- Chesapeake intends to fund the transactions with a high
         percentage of equity; Chesapeake has announced an
         offering of eight million common shares (about $160
         million of net proceeds are expected) and $200 million
         of convertible preferred securities with the balance
         funded with debt.

COMMSCOPE: Will Publish First Quarter Results on April 29, 2003
CommScope, Inc., (NYSE: CTV) plans to release its first quarter
2003 financial results at 4:00 p.m. Eastern Time on Tuesday,
April 29, followed by a 5:00 p.m. conference call. You are
invited to listen to the conference call or live webcast with
Frank Drendel, Chairman and CEO; Brian Garrett, President and
COO; and Jearld Leonhardt, Executive Vice President and CFO.

To participate in the conference call, domestic and
international callers should dial 212-346-6473. Please plan to
dial in 10-15 minutes before the start of the call to facilitate
a timely connection. The live, listen-only audio of the
conference call will also be available via the Internet at:

If you are unable to participate on the call and would like to
hear a replay, you may dial 800-633-8284. International callers
should dial 402-977-9140 for the replay. The replay ID is
21139704. The replay will be available through Friday, May 2. A
webcast replay will also be archived for a limited period of
time following the conference call via the Internet on
CommScope's Web site at

CommScope is the world's largest manufacturer of broadband
coaxial cable for Hybrid Fiber Coaxial (HFC) applications and a
leading supplier of high- performance fiber optic and twisted
pair cables for LAN, wireless and other communications

As reported in Troubled Company Reporter's March 18, 2003
edition, Standard & Poor's Ratings Services placed its 'BB+'
corporate credit rating on Hickory, N.C.-based CommScope Corp.,
the leading U.S. manufacturer of broadband cable products, on
CreditWatch with negative implications. The CreditWatch listing
is the result of weakened operating performance over multiple
quarters, reflected in sequential declines in revenues and lower

CommScope had $183 million of debt outstanding at Dec. 31, 2002.

"We are concerned that weak demand for broadband cable products
from cable operators will persist, resulting in profitability
and debt protection metrics that are substandard for the rating
level," said Standard & Poor's credit analyst Joshua Davis.

CONSECO FINANCE: Files Liquidation Plan and Disclosure Statement
The Conseco Finance Corp. Debtors' Plan and Disclosure Statement
provides for the orderly liquidation of substantially all the
property of the Finance Company Debtors' Estates, including
certain retained causes of action.  The Plan also provides for
the determination of all Claims and the distribution of the
proceeds of the assets to creditors.  Cash on hand and Cash
generated from the sale, disposition or collection of property
and any recovery from the retained actions, will be used to pay
Allowed Claims under the Plan.  These assets will be held in a
Post-Consummation Estate.

The Finance Company Debtors will execute a Post-Consummation
Estate Agreement and take all other steps necessary to establish
the Post-Consummation Estate.  This Estate will be established
to liquidate the assets with no objective to continue or engage
in business.  It will not be deemed a successor-in-interest of
the Finance Company Debtors, but is intended to qualify as a
"grantor trust" for federal tax purposes with the Beneficiaries
treated as grantors and owners of the trust.

The CFC Debtors disclose that the CFN Asset Purchase Agreement
requires that Green Tree Residual Finance Corp. 1 and Green Tree
Finance Corp. 5 file Chapter 11 petitions before the closing of
the CFN Sale Transaction.  Similarly, as a closing condition of
the GE Asset Purchase Agreement, the CFC Debtors are to cause
Mill Creek Servicing Corporation and Conseco Finance Credit Card
Corp. to file Chapter 11 petitions prior to the closing of the
GE Sale Transaction.  Both filings are expected by May 2003.

On the Effective Date, each of the Finance Company Debtors and
their estates will be substantially consolidated, pursuant to
Section 105(a) of the Bankruptcy Code.

After the Sale Transactions and after paying the Lehman Secured
Claims, DIP Claims and Administrative Claims, the Debtors
estimate that there will be approximately $343,500,000 to
distribute to creditors.  Distributions will be made using this

Unclassified   Projected
Claims         Claims      Treatment                    Recovery
------------   ---------   ---------                    --------
DIP Claims     Unknown     Paid in full in cash from     100%
                            Sale Proceeds

Administrative Unknown     Paid in full; Does not        100%
Claims                     include Claims against
                            Holding Co. Debtors or
                            Post-Consummation Estate

Priority Tax   Unknown     Paid in full immediately or   100%
Claims                     over 6-year period, with 4%
                            Interest, at option of Debtor

Class   Claim     Amount   Plan Treatment               Recovery
-----   -----     ------   --------------               --------
  1      Other     $1.75M   Paid in full in cash         100%

  2      Other      $15M    1) Paid in full in cash;     100%
         Secured            2) Payment of proceeds from
                               Sale of collateral;
                            3) Surrender of collateral
                               to Holder;

  3      Lehman    $704M    Paid in full in cash         100%

  4      93/94     $93.7M+  Paid in full in cash         100%
         Notes     interest
                   & fees

  5      General   Unknown  Pro Rata share of Residual   Unknown
         Unsecured          Cash Balance

  6      Equity    N/A      Cancelled                      0%

Holders of Claims in Classes 3, 4 and 5 will be entitled to vote
on the Plan at the Confirmation Hearing.  Class 6 is deemed to
reject the Plan.

Executory Contracts and Unexpired Leases not assumed and
assigned or rejected are deemed rejected as of the Effective

Interested parties desiring further information about the Plan
should contact counsel for the CFC Debtors:

      Roger Higgins, Esq.
      Kirkland & Ellis
      200 East Randolph Street
      Chicago, Illinois  60601
(Conseco Bankruptcy News, Issue No. 16; Bankruptcy Creditors'
Service, Inc., 609/392-0900)    

CONSECO INC: Court Okays Korn/Ferry's Engagement as Consultant
The Conseco Holding Company Debtors and the Official Committee
of Unsecured Creditors jointly obtained the Court's authority to
employ and retain Korn/Ferry International to assist in locating
and hiring a new Chairman and other members of the Board of
Directors of reorganized Conseco.

Upon Court's approval, Korn/Ferry will:

   a) meet with the Debtors and the Committee to articulate
      expectations for potential candidates;

   b) develop a detailed position specification based on
      Korn/Ferry's knowledge of the business;

   c) construct a search strategy and prioritize candidate
      locations, position levels and other elements;

   d) conduct an intensive search using Korn/Ferry's insurance
      networks and knowledge of the marketplace to locate
      qualified individuals;

   e) interview candidates;

   f) present the best-qualified and interested individuals
      -- expected three to five candidates per position;

   g) assist with the final compensation package and other terms
      of employment;

   h) conduct reference checks of successful candidates, which
      includes verbal interviews with references and background
      checks to verify information like academic degrees and
      professional qualifications; and

   i) conduct periodic progress reviews to discuss any pertinent

Pursuant to an engagement letter, Korn/Ferry's fee will be 33.3%
of the Chairman's total first year's cash compensation, which
includes base salary, sign-up and incentive bonus payments.
Korn/Ferry's retainer will be $450,000, billed in three equal
installments.  Korn/Ferry will cap its total fees for the
Chairman search at $900,000.

For directors, Korn/Ferry will bill $75,000 per placement.  Its
retainer for this process will be $150,000.  For both pursuits,
Korn/Ferry will be reimbursed for expenses that qualify as out-
of-pocket. (Conseco Bankruptcy News, Issue No. 15; Bankruptcy
Creditors' Service, Inc., 609/392-0900)    

DebtTraders says that Conseco Inc.'s 10.750% bonds due 2008
(CNC08USR1) are trading at about 13 cents-on-the-dollar. See  
real-time bond pricing.

CONSOLIDATED FREIGHTWAYS: Terminates LOI to Sell Canadian Assets
Consolidated Freightways Corporation has exercised its right to
terminate a letter of intent to sell substantially all of the
assets owned and used by its Canadian subsidiaries, Canadian

John Brincko, Consolidated Freightways CEO, said that CF is
currently evaluating other potential investment opportunities
for its Canadian operations, in conjunction with the Canadian
Freightways management team.

Canadian Freightways is financially and operationally
independent from CF and is not part of CF's U.S. bankruptcy
proceedings. Canadian Freightways continues to offer the high-
quality customer service for which it has become known and its
operations are highly profitable under its experienced Canadian
management team. The company is currently pursuing various
options designed to continue and enhance its strong profit,
financial and operational position.

Darshan Kailly, CFL President, commented: "The Canadian
Freightways team remains completely committed to providing the
industry's best customer service."

Canadian Freightways operations include less-than-truckload
(LTL), full load (TL), and parcel transportation, sufferance
warehouses, customs brokerage, international freight forwarding,
fleet management and logistics management. The company won the
2002 Consumers Choice Award as best transportation provider.

Consolidated Freightways' investment bankers are Chanin Capital
Partners, in Los Angeles, CA.

CONSTELLATION BRANDS: Reports Improved Fiscal 2003 Performance
Constellation Brands, Inc., (NYSE: STZ and STZ.B; ASX: CBR)
reported record financial results for its full year and fourth
quarter ended February 28, 2003.  For fiscal 2003, net income on
a comparable basis increased $35 million, or 22 percent, to
reach a record $192 million and diluted earnings per share on a
comparable basis increased 16 percent to reach $2.07.  For the
fourth quarter, net income on a comparable basis increased seven
million dollars, or 21 percent, to reach $41 million and diluted
earnings per share on a comparable basis increased 19 percent to
reach $0.44.

Net income and diluted earnings per share as reported under  
generally accepted accounting principles for the full year
increased 49 percent to reach $203 million and 41 percent to
reach $2.19 versus $136 million and $1.55, respectively.  Net
income and diluted earnings per share as reported under
generally accepted accounting principles for the fourth quarter
increased 93 percent to reach $52 million and 87 percent to
reach $0.56 versus $27 million and $0.30, respectively.

Net income on a comparable basis and diluted earnings per share
on a comparable basis excludes restructuring charges and a gain
on change in fair value of derivative instruments for Fiscal
2003, and excludes an extraordinary charge in Fiscal 2002 and
reflects the impact of SFAS 142 as if it had been adopted as of
March 1, 2001.  

Richard Sands, Chairman and Chief Executive Officer of
Constellation, said, "Constellation's results for fiscal 2003
were excellent.  We achieved solid beer sales growth, in part
from a successful price increase within a strong overall beer
pricing environment; generated good wine results by focusing on
growth areas and profitability; had steady spirits performance;
and grew our U.K. business."  Mr. Sands added, "Our revenues
increased to over $2.7 billion and we leveraged those sales to
generate earnings above the targets we set at the beginning of
the year.  In addition, we generated $482 million of adjusted
EBITDA, $265 million in net cash provided by operating
activities and $165 million free cash flow from operations,
which we used to reduce our debt."

Mr. Sands noted, "Constellation's performance demonstrates that
our strategy of operating across the beer, wine and spirits
categories, with a decentralized organization staying close to
markets and customers, produces consistent sales and earnings
growth. I am pleased that our focus has translated to superior
overall performance."

Mr. Sands concluded, "Having just completed our acquisition of
BRL Hardy, Constellation is poised to build upon fiscal 2003 and
produce excellent results again in fiscal 2004.  Through this
strategic acquisition, we have increased our scale, expanded our
product breadth while creating the world's leading wine
business, and will accelerate our overall sales and earnings
growth rates. We believe the prospects for our businesses are
tremendous and we intend to leverage all of our growth

                   Consolidated Results

For the fiscal year ended February 28, 2003, net sales grew five
percent, reaching $2.7 billion.  Excluding the $51 million
favorable impact of currency and the four-month benefit from the
Ravenswood acquisition of $14 million, net sales increased two
percent for the fiscal year.  The increase was attributed to
growth in fine wine, imported beer, U.K. wholesale and spirits,
partially offset by declines in popular and premium wine and
U.K. brands.

For the three months ended February 28, 2003 net sales increased
six percent to reach $653 million compared to the three months
ended February 28, 2002.  Excluding the $21 million favorable
impact of currency, net sales increased two percent for the
quarter. The increase was driven by growth in fine wine,
imported beer, spirits and U.K. wholesale, partially offset by
declines in popular and premium wine and U.K. brands.

Fiscal 2003 gross profit increased nine percent to $761 million
and gross profit margin improved 110 basis points compared to
the prior year period. Gross profit for the fourth quarter
increased nine percent to reach $177 million and gross margin
improved 70 basis points.  The increase in gross profit for both
the year and quarter resulted primarily from: a favorable mix
of sales towards higher margin wine and spirits brands; lower
average wine costs; and higher average imported beer prices;
partially offset by higher average imported beer costs.

Fiscal 2003 selling general and administrative expenses on a
comparable basis increased $26 million.  The increase was
primarily the result of higher advertising costs on imported
beer, higher selling costs to support growth in U.K. wholesale
and a gain on the sale of an asset in the prior year.  As a
percent of net sales, selling, general and administrative
expenses on a comparable basis were 12.8 percent compared to
12.5 percent for the prior year.

For the quarter, selling, general and administrative expenses on
a comparable basis increased $7 million.  The increase was
primarily the result of higher advertising costs on imported
beer and higher selling costs to support growth in U.K.
wholesale.  As a percent of net sales, selling, general and
administrative expenses on a comparable basis were 13.3 percent
compared to 13.0 percent in the prior year period.

Selling, general and administrative expenses under generally
accepted accounting principles for Fiscal 2003 and Fourth
Quarter 2003 declined $2 million and $1 million, respectively.

Selling, general and administrative expenses on a comparable
basis is a non-GAAP (Generally Accepted Accounting Principles)
financial measure.   

Operating income on a comparable basis increased 11 percent for
the fiscal year and nine percent for the quarter due to
increased sales and improving gross profit margins.

Operating income reported under generally accepted accounting
principles increased 18 percent for the fiscal year and 14
percent for the quarter.

Operating income on a comparable basis is a non-GAAP (Generally
Accepted Accounting Principles) financial measure.  

Equity in earnings from Pacific Wine Partners, an equally owned
joint venture with BRL Hardy at February 28, 2003, was $12
million for the full year.  Fourth Quarter 2003 equity in
earnings was two million dollars versus one million dollars for
Fourth Quarter 2002.  Growth of the joint venture continues to
be driven by strong demand for both the Banrock Station and
Blackstone brands.

Net interest expense for the year declined nine million dollars
to $105 million due to both lower average debt levels and a
lower average borrowing rate.  Net interest expense for Fourth
Quarter 2003 declined three million dollars as a result of lower
average debt levels.

As a result of these factors, net income and diluted earnings
per share on a comparable basis for Fiscal 2003 increased 22
percent and 16 percent, respectively, reaching $192 million and
$2.07.  Net income and diluted earnings per share on a
comparable basis for Fourth Quarter 2003 increased 21 percent
and 19 percent, respectively, reaching $41 million and $0.44.

Net income and diluted earnings per share on a reported basis
for Fiscal 2003 increased 49 percent and 41 percent,
respectively, reaching $203 million and $2.19.  Net income and
diluted earnings per share on a reported basis for Fourth
Quarter 2003 increased 93 percent and 87 percent, respectively,
reaching $52 million and $0.56.

Adjusted EBITDA reached $482 million, an increase of 12 percent
for Fiscal 2003.  Free cash flow from operations rose to $165
million for the fiscal year, an increase of 16 percent.

              Imported Beer and Spirits Results

Imported beer and spirits net sales for Fiscal 2003 grew six
percent to reach $1.1 billion and operating income on a
comparable basis grew 17 percent to reach $218 million.  
Imported beer sales increased seven percent primarily due to a
price increase on the Company's Mexican brands, which took
effect during the first quarter of Fiscal 2003.  Spirits sales
were up three percent for the year, on a slight increase in
branded sales and growth in bulk sales.

Fourth Quarter 2003 net sales were $224 million, an increase of
three percent compared to Fourth Quarter 2002.  Imported beer
sales increased three percent versus 38 percent in Fourth
Quarter 2002.  The increase in imported beer sales was driven by
the price increase on the Company's Mexican brands, partially
offset by slightly lower volume.  Spirits net sales growth for
the quarter of four percent resulted primarily from increased
volume in the Company's vodka and Canadian whisky brands,
particularly Skol vodka and Black Velvet Canadian whisky.

Operating income on a comparable basis increased 17 percent for
the year and 13 percent for the quarter compared to the prior
year periods.  The growth in operating income was primarily the
result of higher sales, favorable beer pricing and lower average
spirits costs, particularly tequila, partially offset by
increased imported beer costs and imported beer advertising.

Operating income reported under generally accepted accounting
principles increased 22 percent to reach $218 million for the
fiscal year and 19 percent to reach $42 million for the quarter.

              Popular and Premium Wine Results

Net sales for Fiscal 2003 were $749 million compared to $778
million the prior year, a decline of four percent.  Lower bulk
wine and concentrate sales contributed to half of the sales
decline.  The decline in branded sales was primarily volume
related as the Company continues to be selective in its
promotional activities, focusing instead on growth areas, long-
term brand building initiatives and increased profitability.  
Despite the lower sales, operating profit on a comparable basis
declined only slightly and operating margin on a comparable
basis improved 40 basis points.

Net sales for the quarter declined three percent due to a two
percent decline in branded wine sales, and lower grape
concentrate sales.  Operating income on a comparable basis
improved slightly as lower average costs offset lower volumes.

Operating income reported under generally accepted accounting
principles for Fiscal 2003 was $108 million, an increase of 3
percent.  For Fourth Quarter 2003, operating income reported
under generally accepted principles declined four percent to $28

              U.K. Brands and Wholesale Results

Net sales increased 10 percent to reach $790 million for Fiscal
2003.  The increase was due to growth in the U.K. wholesale
business and a positive currency impact, partially offset by
lower branded sales.  Excluding the $51 million favorable impact
of currency, net sales for Fiscal 2003 increased three percent.  
Fiscal 2003 operating income on a comparable basis increased six
percent to reach $57 million due to a favorable impact from
currency partially offset by increased selling expenses to
support growth in the U.K. wholesale business.

Net sales for Fourth Quarter 2003 were $201 million versus $176
million reported for the comparable quarter a year ago, an
increase of 14 percent. Excluding the $21 million favorable
impact of currency, net sales increased three percent attributed
to growth in the U.K. wholesale business partially offset by
declines in U.K. brands.  For the quarter, operating income on a
comparable basis increased two million dollars to reach $10

Operating income reported under generally accepted accounting
principles increased nine million dollars to $57 million for
Fiscal 2003 and three million dollars to $10 million for Fourth
Quarter 2003.

                      Fine Wine Results

Net sales for Fiscal 2003 increased $24 million, or 18 percent
to reach $156 million.  The increase was due primarily to
increases on the Ravenswood and Simi brands.  Excluding the $14
million four-month benefit from the Ravenswood brand, which was
acquired July 2001, net sales increased seven percent for Fiscal

Driven by volume gains from the Ravenswood, Simi, Estancia and
Franciscan brands, fine wine net sales for Fourth Quarter 2003
increased 19 percent compared to the prior year.

Operating profit on a comparable basis increased 28 percent for
both the fiscal year and fourth quarter to reach $56 million and
$15 million, respectively.  The increase is a result of higher
sales and leveraging selling, general and administrative

Operating income reported under generally accepted accounting
principles increased 42 percent to reach $56 million for the
fiscal year and 40 percent to reach $15 million for Fourth
Quarter 2003.

                   Restructuring charges and
                gain from derivative instruments

In connection with the acquisition of BRL Hardy Limited, which
closed April 9th (Australia), the Company had put in place a
collar to lock in a range for the cost of the transaction in
U.S. dollars.  As a result of this hedge, the Company was
required to recognize a gain of $23 million under GAAP, based on
the change in fair value of the instrument on February 28, 2003.
However, due to the movement of exchange rates between February
28th and April 9th, the Company will record a loss of
approximately two million dollars under GAAP from the change in
fair value of derivative instruments in the first quarter of
fiscal 2004.

Also in connection with the BRL Hardy acquisition, the Company
expects to take a one-time charge in fiscal 2004 for bank fees
related to the transaction of approximately nine million

Constellation also had restructuring charges in the amount of
five million dollars, resulting from the realignment of business
operations in the Company's popular and premium wine division,
as a result of the decision to close two facilities during
fiscal 2004.  This realignment was undertaken to further improve
productivity and is not expected to have an impact on brand
sales.  As part of its realignment, the popular and premium wine
division expects to incur an additional six million dollars in
charges during the course of Fiscal 2004.

Also in Fiscal 2004, in connection with the BRL Hardy
acquisition, the Company expects to take a restructuring charge
related to the integration of BRL Hardy in the amount of three
million dollars.

Constellation Brands, Inc., is a leading international producer
and marketer of beverage alcohol brands, with a broad portfolio
across the wine, spirits and imported beer categories. The
Company is the largest multi-category supplier of beverage
alcohol in the United States; a leading producer and exporter of
wine from Australia and New Zealand; and both a major producer
and independent drinks wholesaler in the United Kingdom.  Well-
known brands in Constellation's portfolio include: Corona Extra,
Pacifico, St. Pauli Girl, Black Velvet, Fleischmann's, Estancia,
Simi, Ravenswood, Blackstone, Banrock Station, Hardys, Nobilo,
Alice White, Talus, Vendange, Almaden, Arbor Mist, Stowells of
Chelsea and Blackthorn.

As previously reported, Standard & Poor's Ratings Services
assigned its 'BB' rating to beverage alcohol producer
Constellation Brands Inc.'s $1.6 billion senior secured credit
facilities and its $450 million senior unsecured bridge loan.

At the same time, Standard & Poor's affirmed its 'BB' corporate
credit and senior unsecured debt ratings on Constellation
Brands, as well as the 'B+' subordinated debt rating on the
company. Ratings for the bank facilities are based on
preliminary documentation and subject to review once final
documentation is received.

The Fairport, New York-based Constellation Brands has about
$1.35 billion of total debt outstanding.

COVANTA ENERGY: Pushing for Further Exclusivity Period Extension
Pursuant to a Court order, Covanta Energy Corporation and its
debtor-affiliates' motion to extend their exclusive periods is
deemed re-filed.  An additional 120-day extension is sought for
the deadline to file a plan until November 21, 2003 and to
solicit acceptances until January 21, 2004.  The Court will
convene a hearing on July 30, 2003 at 2:00 p.m. to consider the
Debtors' request.  Objections must be in writing and filed and
received by the Court by 4:00 p.m., Prevailing Eastern Time, on
July 23, 2003. (Covanta Bankruptcy News, Issue No. 26;
Bankruptcy Creditors' Service, Inc., 609/392-0900)    

COX COMMS: Will Publish First Quarter Earnings Report on May 5
Cox Communications (NYSE:COX) announced its first quarter 2003
financial results will be released prior to the market-open on
Monday, May 5, 2003.

A conference call discussing the company's first quarter results
will be held on May 5 at 10:30 a.m. EST.

A live webcast of the conference call will be available on the
Cox Communications Web site at An  
archived recording of the conference call will remain on the
company's Web site for two weeks following the conclusion of the
call. To automatically receive Cox financial news by email,
please visit subscribe to Email  

To participate in this teleconference please call: 973-321-1020  
The replay number is: 877-519-4471 (U.S.) or 973-341-3080
(Int'l).  Reservation code for replay: 3865739

Cox Communications, whose December 31, 2002 balance sheet shows
a working capital deficit of about $110 million, is a full-
service telecommunications provider, serving 537,000 customers
and employing 2,400 individuals throughout San Diego County. The
company offers an array of services, including Cox Cable, Cox
Digital Cable, Cox High Speed Internet, local and long distance
telephone through Cox Digital Telephone, Entertainment on
Demand, Cox High Definition Cable, Home Networking, and Cox
Business Services. Cox Communications also owns and operates
Channel 4 San Diego, the television home of the Padres and
award-winning local programming. To date, the company has
deployed more than 70,000 glass miles of fiber optic cable. The
nation's fourth-largest cable television company, Cox
Communications serves approximately 6.3 million customers
nationwide. It has been operating in San Diego County since

CRESCENT REAL ESTATE: Look for Q1 2003 Earnings Results on May 6
Crescent Real Estate Equities Company (NYSE:CEI) will release
its first quarter 2003 earnings results before the market opens
on Tuesday, May 6, 2003. The Company will also host a conference
call and audio webcast, both open to the general public, at
10:00 A.M. Central Time on Tuesday, May 6, 2003, to discuss the
first quarter results and provide a Company update.

To participate in the conference call, please dial (800) 818-
4442 domestically or (706) 679-3110 internationally, or you may
access the audio webcast on the Company's Web site at --
http://www.crescent.comin the Investor Relations section.  
During the call, reference will be made to a presentation that
will also be posted on the Company's Web site.

A replay of the conference call will be available through
May 12, 2003 by dialing (800) 642-1687 domestically or (706)
645-9291 internationally with a passcode of 9085975. The webcast
and presentation will be available on Crescent's website for 30

Crescent Real Estate Equities Company (NYSE:CEI) is one of the
largest publicly held real estate investment trusts in the
nation. Through its subsidiaries and joint ventures, Crescent
owns and manages a portfolio of 73 premier office properties
totaling 29.5 million square feet located primarily in the
Southwestern United States, with major concentrations in Dallas,
Houston, Austin and Denver. In addition, the Company has
investments in world-class resorts and spas and upscale
residential developments.

                         *    *    *

As previously reported in Troubled Company Reporter, Standard &
Poor's affirmed its ratings on Crescent Real Estate Equities
Co., and Crescent Real Estate Equities L.P., and removed them
from CreditWatch, where they were placed on Jan. 23, 2002.  The
outlook remains negative.

          Ratings Affirmed And Removed From CreditWatch

     Issue                           To            From

Crescent Real Estate Equities Co.
  Corporate credit rating            BB            BB/Watch Neg
  $200 million 6-3/4%
     preferred stock                 B             B/Watch Neg
  $1.5 billion mixed shelf   prelim B/B+   prelim B/B+/Watch Neg

Crescent Real Estate Equities L.P.
   Corporate credit rating           BB            BB/Watch Neg
   $150 million 6 5/8% senior
      unsecured notes due 2002       B+            B+/Watch Neg
   $250 million 7 1/8% senior
      unsecured notes due 2007       B+            B+/Watch Neg

DIMENSIONS HEALTH: Fitch Cuts $80 Mil. Revenue Bond Rating to B-
Fitch Ratings downgrades approximately $79.3 million Prince
George's County, MD, project and refunding revenue bonds, series
1994, issued on behalf of Dimensions Health Corp to 'B-' from
'B+'. The Rating Outlook is Negative. Fitch's 'B' rating
category indicates that significant credit risk is present, but
a limited margin of safety remains. Financial commitments are
currently being met; however, capacity for continued payment is
contingent upon a sustained, favorable business and economic

The downgrade to 'B-' reflects continued operating losses, very
light liquidity, and significant challenges related to physician
recruitment given DHC's large percentage of indigent care.
Operating margins continue to be negative, equal to a negative
3.3% through eight months of fiscal 2003 ended Feb. 28, 2003.
Although Prince George's County is expected to approve a one-
time cash infusion of $3 million from the county that will be
matched with an additional $2 million from the State of
Maryland, the contribution will likely not be enough to restore
bottom line profitability in fiscal 2003 (June 30). Debt service
coverage from EBITDA remains light, equal to 0.9 times through
Feb. 28, 2003. Management has implemented changes in revenue
cycle systems which increased cash flow in fiscal 2002, although
days in accounts receivable have increased slightly over the
past three fiscal years and bad debt remains equal to
approximately 10% of total revenue.

The high amount of bad debt reflects DHC's large indigent
population, which Fitch believes is a key hurdle to achieving
long-term operating stability. The unfavorable payor mix makes
practicing at DHC unattractive for physicians. Therefore, DHC
must provide subsidies at great expense in order to attract and
retain physicians which are not part of the rate reimbursement
system. Since management believes expenses related to physicians
and other inflationary pressures prevent further cost cutting
opportunities, the only way to improve profitability is through
volume increases. Light liquidity and limited access to capital
have made it difficult to increase capacity and accommodate
additional volume, and have resulted in declining market share,
especially in areas that are most profitable. Through eight
months of fiscal 2003 ended Feb. 28, 2003, unrestricted cash
represented 15 days operating expenses and 13% of outstanding

One option currently being considered is the sale of DHC's lease
rights, possibly combined with the sale of hospital assets, to
another provider. Since the county owns the hospital assets, any
sale would be subject to Prince George's County Commission
approval. Management expects to present a potential bidder to
the county for approval later this year. Although the ultimate
sale of the hospital, which could include transfer of assets and
repayment of outstanding debt, is a real possibility, multiple
levels of governmental approval would likely take at least a
year to complete.

The negative outlook is based on the belief that sufficient
additional ongoing financial support from the state and county
appears unlikely given the current budgetary environment.
Fundamental challenges related to the hospital's large indigent
population and costs associated with attracting and retaining
physicians provide limited upside potential. Continued operating
losses could result in further rating pressure, especially given
the organization's limited liquidity.

DHC includes Prince George's Hospital Center, a 276-bed acute
care teaching facility, two miles north of Washington D.C.;
Greater Laurel Regional Hospital, a 125-bed acute care community
facility, midway between D.C. and Baltimore; Spellman Nursing
Center a 110-bed long term care facility located on PGHC's
campus; and Bowie Health Center, an outpatient facility
approximately ten miles northeast of PGHC. DHC had $310 million
in total revenues in fiscal 2002.

DIRECTV LATIN AMERICA: Signs-Up Protiviti Inc. as Auditors
DirecTV Latin America seeks the Court's authority to employ
Protiviti, Inc. as its auditing consultants, nunc pro tunc to
March 18, 2003.

DirecTV believes that Protiviti is well qualified and uniquely
able to provide it with auditing support services.  Moreover,
Protiviti has an excellent reputation for the highest quality of
service in connection with the types of matters for which
DirecTV seeks to retain it.

Joel A. Waite, Esq., at Young Conaway Stargatt & Taylor LLP, in
Wilmington, Delaware, informs the Court that as auditing
consultants, Protiviti will:

  (a) provide assistance to DirecTV's management in various
      areas including, but not limited to, providing additional
      staff as needed to prepare accounting and other
      information related to the bankruptcy filing;

  (b) analyze accounting information DirecTV's systems
      produced and processes for completeness and accuracy and
      render a report regarding the same; and

  (c) perform internal auditing to identify potential
      weaknesses in internal accounting controls and develop
      recommendations for improvement.

Phillip Fretwell will be the primary Protiviti professional for
this engagement.

In exchange for the auditing services, DirecTV will pay
Protiviti on these hourly rates:

    Managing Directors         $450
    Directors                   350
    Managers                    275
    Seniors                     150 - 200
    Staff                       115 - 135

Protiviti will also seek reimbursement of their actual,
necessary expenses and charges.

Mr. Waite tells Judge Walsh that Protiviti received a $250,000
retainer as advance payment of certain services performed in
connection with the prepetition engagement and in preparation of
DirecTV's Chapter 11 case and as security for future services to
be performed.  The Retainer is payment for any remaining fees
and expenses accrued prior to the Petition Date.  In addition,
Protiviti received $50,764 in payments for work performed.  A
part of the Retainer has been applied to the outstanding
balances.  Protiviti has not yet been paid though for one day of
prepetition work totaling $4,330.  The Retainer balance will be
applied against fees, expenses and cost incurred after the
Petition Date with the unused portion to be returned to DirecTV.

Mr. Fretwell assures the Court that the firm does not hold any
interest adverse to DirecTV or the estate.  Furthermore,
Protiviti is a "disinterested person" as that term is defined in
Section 101(14) of the Bankruptcy Code. (DirecTV Latin America
Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

DIRECTV: Says Hughes Split-Off from GM Won't Affect Operations
DIRECTV Latin America, LLC, said the proposed acquisition of 34
percent of Hughes Electronics Corporation by News Corporation
will have no immediate effect on DIRECTV Latin America's
operations or its customers and employees. DIRECTV Latin
America, LLC is majority owned by DIRECTV Latin America
Holdings, Inc., a subsidiary of Hughes Electronics Corporation.

General Motors Corporation announced Wednesday that it intended
to sell its 19.9 percent interest in HUGHES to News following
the split-off of Hughes from General Motors. News will acquire
an additional 14 percent stake in HUGHES through a mandatory
exchange of News ADRs and/or cash with the holders of HUGHES
Common Stock. However, the proposed transaction does not provide
for a combination of DIRECTV Latin America with Sky Latin
America and is not contingent on such a combination. Any
opportunities to improve operational efficiencies and reduce
costs associated with the Latin American operations will be
considered by the management and board of HUGHES after the
completion of the transaction, which is subject to certain
regulatory and other approvals, among other closing conditions.

Larry Chapman, President and Chief Operating Officer of DIRECTV
Latin America, LLC, said, "Our management and employees continue
to face significant challenges, however we are confident that
these challenges are being successfully addressed and we are
focused on maintaining DIRECTV's outstanding programming and
service to current and prospective customers. We remain as
committed as ever to being the best and only pan-regional pay
television service in Latin America and the Caribbean."

Eddy W. Hartenstein, Chairman of DIRECTV Latin America and
Corporate Senior Executive Vice President of HUGHES, said,
"Despite the political and economic challenges, we continue to
believe that the Latin American market holds great promise for
our business. We intend to continue to aggressively pursue
opportunities for profitable growth now and in the future."

DIRECTV(TM) is the leading pay television service in Latin
America and the Caribbean with approximately 1.6 million
subscribers in 28 countries. The Company will continue providing
high-quality programming and broadcast services to DIRECTV
subscribers across Latin America and the Caribbean without
interruption. DIRECTV is currently available in: Argentina,
Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador,
Guatemala, Honduras, Mexico, Nicaragua, Panama, Puerto Rico,
Trinidad & Tobago, Uruguay, Venezuela and several Caribbean
island nations.

DIRECTV Latin America, LLC is a multinational company owned by
DIRECTV Latin America Holdings Inc., a wholly-owned subsidiary
of Hughes Electronics Corporation; Darlene Investments, LLC, an
affiliate of the Cisneros Group of Companies, and Grupo Clarin.
DIRECTV Latin America has offices in Buenos Aires, Argentina;
Sao Paulo, Brazil; Cali, Colombia; Mexico City, Mexico;
Carolina, Puerto Rico; Fort Lauderdale, USA; and Caracas,
Venezuela. For more information on DIRECTV Latin America please

Hughes Electronics Corporation, a unit of General Motors
Corporation, is a world-leading provider of digital television
entertainment, broadband satellite networks and services, and
global video and data broadcasting. The earnings of HUGHES are
used to calculate the earnings attributable to the General
Motors Class H common stock (NYSE: GMH).

ENRON CORP: EPMI Sues City of Palo Alto to Recover $40M Property
Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft, in
New York, relates that Enron Power Marketing, Inc. and the City
of Palo Alto, California, entered into a Master Power Purchase
and Sale Agreement on May 7, 2001.  Pursuant to the Master
Agreement, the Parties could engage in subsequent individual
Transactions to buy or sell wholesale electric power at a
specified price and for a fixed term.

According to Mr. Ellenberg, the Master Agreement provides a list
of Events of Default, including, inter alia:

    (i) the failure to make, when due, any payment required
        pursuant to the Master Agreement if the failure is not
        remedied within three business days after written notice
        of the failure;

   (ii) any representation or warranty made by a Party will at
        any time prove to be false or misleading in any material

  (iii) the failure to perform any covenant set forth in the
        Master Agreement;

   (iv) the bankruptcy of a Party; and

    (v) the failure of a Party to satisfy the creditworthiness
        or collateral requirements pursuant to the Master

If one Party's conduct triggers an Event of Default, the Master
Agreement provides that if an Event of Default occurs at any
time during the term of the Master Agreement, the Non-Defaulting
Party may, for so long as the Event of Default is continuing,
designate an Early Termination Date on which all Transactions
will terminate.  When an Early Termination Date has been
designated, one party owes the other a Termination Payment.  The
Termination Payment is determined by calculating a Settlement
Amount for each Terminated Transaction and netting all
Settlement Amounts together with other amounts due under the
Master Agreement.  Importantly, the Master Agreement expressly
provides that the Termination Payment must be paid to whoever it
is owed, regardless of which party created an Event of Default
within two business days after the notice is effective.

Mr. Ellenberg reports that the Master Agreement expressly
contemplates that either Party's credit position could be
downgraded.  In the event of a downgrade, Palo Alto may require
EPMI to provide Palo Alto with Performance Assurance in an
amount determined by Palo Alto in a commercially reasonable
manner.  If EPMI fails to provide the requested Performance
Assurance, an Event of Default will be deemed to have occurred
and Palo Alto is entitled to the remedies set forth in the
Master Agreement.

In one Transaction dated May 7, 2001, EPMI agreed to sell, and
Palo Alto agreed to buy, wholesale power at a specified price
during the period of June 1, 2001 through January 31, 2005.

On November 29, 2002, Palo Alto sent a letter to EPMI stating
that EPMI was in default of the Master Agreement.  Thus, Palo
Alto was voluntarily terminating the Master Agreement and
designating November 29, 2001 as the Early Termination Date.
However, in the same letter, Palo Alto advised EPMI that it was
not going to calculate or pay the Termination Payment in
contradiction to the terms of the Master Agreement.

As a result of Palo Alto's refusal to calculate the Termination
Payment, EPMI made its own calculation and determined that,
because the forward price curve for wholesale power had declined
between the date the Transaction was executed and the Early
Termination Date, EPMI was entitled to a Termination Payment in
the amount of at least $40,056,022, plus interest at the
Interest Rate from the Early Termination Date.

On August 9, 2002, EPMI notified and demanded from Palo Alto
this Termination Payment.  Pursuant to the Master Agreement,
Palo Alto was required to pay the Termination Payment within two
business days after receipt of the notice.  However, to date,
Palo Alto has failed and refused to pay the Termination Payment
of at least $40,056,022, plus interest at the Interest Rate.  
Palo Alto will attempt to justify its refusal to honor its
contractual obligations to pay EPMI the Termination Payment
based on a claim that the Master Agreement is void and
unenforceable as a result of EPMI's fraudulent inducement of
Palo Alto.

Accordingly, by this Complaint, EPMI asks the Court to:

    (a) compel Palo Alto to turnover the property --
        $40,056,022, plus interest -- of the Estate pursuant to
        Section 542(b) of the Bankruptcy Code;

    (b) declare that Palo Alto violated the automatic stay
        provided for by Section 362 of the Bankruptcy Code when
        it exercised control over property of the estate by
        wrongfully suspending performance under the Master

    (c) declare that Palo Alto breached the Master Agreement,
        which resulted in a damage of at least $40,056,002 to
        EPMI, plus interest at the interest rate from the Early
        Termination Date;

    (d) declare that EPMI incurred damages in an amount to be
        determined at trial when Palo Alto withheld the
        $40,056,022 due to EPMI, thus unjustly enriching itself;

    (e) declare that any claim by Palo Alto for fraud in the
        inducement and rescission of the Master Agreement is a
        core issue involving property of the estate under
        Section 541(c) of the Bankruptcy Code;

    (f) declare that Palo Alto is not entitled to rescission of
        the Master Agreement since it cannot establish -- the
        elements of fraud in the inducement, that it is entitled
        to the equitable remedy of rescission and that it has
        not ratified the Master Agreement and waived any right
        to rescission after receiving knowledge of the alleged
        fraudulent acts;

    (g) declare that the arbitration provision in the Master
        Agreement should not be enforced since core issues and
        Bankruptcy Code provisions implicated by the default
        provisions require the application of fundamental
        principles of bankruptcy law that should not be decided
        by arbitrators; and

    (h) award to EPMI its attorneys' fees and other expenses
        incurred in this action. (Enron Bankruptcy News, Issue
        No. 61; Bankruptcy Creditors' Service, Inc., 609/392-

FANSTEEL: Turning to Executive Sounding for Financial Advice
The U.S. Bankruptcy Court for the District of Delaware gave its
stamp of approval to Fansteel, Inc.'s application to hite
Executive Sounding Board Associates Inc., as its Restructuring
Consultants and Financial Advisor.

The Debtors expect Executive Sounding to

     a. continue to:

          i) assist the Debtors' management with the Chapter 11
             bankruptcy process,

         ii) minimize costs associated with that process,
        iii) assist the Debtors' in their development and
             negotiation of a plan of reorganization, and (iv)
             facilitate the Debtors' communication with parties-

     b. continue to provide guidance as to compliance with all
        requirements of the Court, as requested;

     c. continue to review overhead costs and expenses of the
        Debtors and propose actions necessary to reduce costs
        where possible in connection with the business plan;

     d. assist with the preparation of projections, including
        feasibility analyses and schedules, if required, in
        connection with the business plan and plan of

     e. assist the Debtors in the development and negotiation of
        a plan of reorganization;

     f. with the approval of the designated officer of the
        Debtors, continue to consult with all other retained
        parties, the DIP lender, Committee, and other parties-
        in-interest in connection with the bankruptcies, the
        business plan, and the plan of reorganization;

     g. continue to assess of Debtors' operations and cash flow,
        with particular emphasis on feasibility;

     h. continue to monitor the Debtors' end-user markets for
        potential effect on the business plans;

     i. continue to monitor the Debtors' implementation of each
        operation's business plan;

     j. continue to analyze and assess changes in assumptions
        and revisions to the Debtors' business plans including
        the Debtor's projections;

     k. monitor the orderly liquidation of terminated
        operations, if any;

     l. assist the Debtors' with their exit financing needs;

     m. continue to assist the Debtors' with their liquidation

     n. continue to meet with the Debtor's executive, financial
        and operations management regarding various aspects of
        business operations, reorganization issues, cash
        management and financial and operational performance;

     o. participate in Court hearings, if needed.

The Executive Sounding professionals who are expected to
continue to work on this engagement and their current standard
hourly rates are:
     William H. Henrich   Managing Director      $365
     Michael DuFrayne     Managing Director      $325
     James Fox            Director               $345
     Bert Weil            Senior Associate       $325
     Tracy Yun            Financial Analyst      $285
     Rulonna Neilson      Financial Analyst      $285
     Louise Jane Bell     Financial Analyst      $285

Fansteel Inc., a specialty metal manufacturer of engineered
metal components and tungsten carbide products, filed for
chapter 11 protection on January 15, 2002 (Bankr. Del. Case No.
02-10109).  Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl
Young Jones & Weintraub represents the Debtors in their
restructuring efforts.  When the Company filed for protection
from its creditors, it listed $64,805,176 in total assets and
$91,585,665 in total debts.

FEDERAL-MOGUL: Wins Approval to Sell UK Property for GBP$3.4MM
Federal-Mogul Corporation and its debtor-affiliates sought and
obtained the Court's authority to sell a real property in
Ilminster, England to Daido Industrial Bearings Europe, Ltd.  
The Debtors will sell the Ilminster property free and clear of
all liens, claims and encumbrances for GBP3,450,000 pursuant to
an agreement with Daido Industrial.

The Debtors believe that the Ilminster property had become a
"surplus asset".  Thus, the Debtors want to liquidate the
property for their creditors' benefit.

Daido Industrial is a tenant of the Ilminster property since
1998.  Daido Industrial currently leases 60% of the Ilminster
property for GBP200,000 per year.

The Ilminster Property consists of two large industrial
facilities, a foundry, and an office block located on 11 acres
of land at Ilminster, Somerset in the Southwest of England.  The
Debtors used the Ilminster property, largely in connection with
a joint venture with Daido Metal Company, Ltd., one of the
worldwide leaders in the manufacture of bearings, to manufacture
bearings and friction products.  The Ilminster property is owned
by Debtors Federal-Mogul Engineering Limited, T&N Limited and
Wellworthy Limited.

A number of years ago, Federal-Mogul Corporation and Daido
Metal, had formed a joint venture, Federal-Mogul Daido Hwb,
Ltd., the predecessor-in-interest to Daido Industrial to
manufacture bearings largely for use in the European market.  
Federal-Mogul originally owned 60% of the joint venture.  Over
the years, Federal-Mogul had decreased its ownership share.  
Since 2001, Federal-Mogul has retained only a 10% ownership
interest in Daido Industrial and has a very limited role in its

                Marketing Of The Ilminster Property

After having reduced its ownership interest, Federal-Mogul
became largely a landlord to Daido Industrial.  But perceiving
that the Ilminster property had become a "surplus asset" that
could be liquidated for their creditors' benefit, the Debtors
consulted with Nelson Bakewell, a national property consulting
firm in the United Kingdom, regarding the Ilminster property.  
Based in part upon the information received from Nelson
Bakewell, the Debtors, under the supervision of the
administrators of the UK proceedings, retained Nelson Bakewell
to list the Ilminster property for sale in the beginning of

Unlike in the United States, where commercially zoned land is
generally more costly than land zoned for residential uses, the
Debtors relate that in England, the opposite is true.  The local
zoning authorities in England, rather than trying to preserve
the residential areas from the spread of industry, often attempt
to preserve industrial areas from the developers who wish to
build residences on such sites.  The Ilminster property, having
the potential of significantly more value as a residential site
than as an industrial location, is an example of this

As a result of their marketing efforts, the Debtors received
numerous offers for the Ilminster Property in the range of
GBP2,000,000 to GBP3,000,000.  But because the current lease
provides for a GBP200,000 yearly rent, an investor that obtained
the Ilminster property for GBP2,000,000 could expect a 10%
return on investment per year.

Nevertheless, a few investors believed that they could obtain
the local zoning authorities' approval to rezone the Ilminster
property for residential use and, consequently, obtain a
significantly higher return on their investment.  After
preliminary discussions with the local zoning authorities, one
investor tendered a GBP3,450,000 non-contingent offer.
Subsequently, the Debtors and the U.K. Administrators advised
Daido Industrial that they were prepared to accept the
GBP3,450,000 offer.  However, Daido Industrial matched that

The Debtors inform the Court that none of the investors chose to
increase their bid.  As a result, the Debtors and the U.K.
Administrators proceeded to consummate a sale with Daido

               Daido Industrial Purchase Agreement

The Ilminster Property consists of three separate contiguous
parcels of land owned jointly by T&N and either F-M Engineering
or Wellworthy.  To reflect the nominal division in the ownership
of the three different parcels, the parties' purchase agreement
consists of three separate documents that apportion the
GBP3,450,000 Purchase Price based solely on the square footage
contained in each parcel:

    -- there is an agreement between F-M Engineering and T&N, on
       one hand, and Daido Industrial, on the other hand,
       pursuant to which Daido Industrial will acquire one acre
       for GBP342,930; and

    -- there are two agreements between Wellworthy and T&N, on
       one hand, and Daido Industrial, on the other hand,
       pursuant to which Daido Industrial will acquire six acres
       for GBP1,868,865 and another four acres for GBP1,238,205.

The Debtors and the U.K. Administrators do not believe that
there is a substantial difference in the value per square foot
of any of the three parcels.  The Debtors note that each of the
parcels contains some amount of improvements and at least one
building stretches across the boundary line dividing two

The Purchase Agreement requires Daido Industrial to close the
transaction on May 30, 2003.

                 Parties' Supplement Agreement

The Debtors and Daido Industrial are also entering into an
ancillary agreement to limit the Debtors' environmental
liability for the Ilminster property.  Pursuant to the
Supplemental Agreement, the Debtors and Daido Industrial will
escrow GBP159,000 from the sale as a reserve for environmental
remediation work on the Ilminster property.  To the extent that
it must remediate the Ilminster property, Daido Industrial may
use the funds in the Environmental Reserve in accordance with
the Supplemental Agreement to do so.  The Supplemental Agreement
caps the Debtors' liability for environmental matters at 67% of
the total amount of the Environmental Reserve.  In other words,
if Daido Industrial does not need to remediate the Ilminster
property, the Debtors will receive the full GBP159,000 from the
Reserve.  But in any event, the Debtors' liability for
environmental matters will be capped at GBP106,530. (Federal-
Mogul Bankruptcy News, Issue No. 35; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

FLEMING: Heritage Property Demands Prompt Decision on Leases
Heritage Property Investment Trust, Inc. (NYSE: HTG) commented
on recent developments concerning the Chapter 11 bankruptcy
filing of Fleming Companies. On April 1, 2003, Fleming filed for
Chapter 11 bankruptcy protection.

On April 3, 2003, Fleming filed a motion to reject certain
unexpired leases, including three of Heritage's leases. The
three store locations represented by these leases are not
physically occupied and accounted for approximately $1.2 million
in annualized base rent, or 0.6 percent of Heritage's annualized
base rent as of December 31, 2002. A hearing with respect to
Fleming's motion will be held on April 21, 2003. Heritage leases
space to Fleming-owned supermarkets in 10 other Heritage
shopping centers, all of which are physically occupied and
accounted for approximately 1.6 percent of Heritage's total
annualized base rent as of December 31, 2002. The total square
footage of these 10 grocery stores is approximately 0.5 million
square feet.

On April 8, 2003, Heritage filed with the Bankruptcy Court for
an order allowing and directing immediate payment of rent owed
by Fleming to Heritage for April 2003. A decision with respect
to this motion has not yet been rendered by the Bankruptcy

Fleming has not yet announced any other plans to reject or
affirm leases. While operating in bankruptcy, Fleming may decide
to reject other leases, including leases at other Heritage-
leased locations. Heritage is not currently revising its
estimates with respect to the impact of Fleming's bankruptcy
filing on its 2003 earnings and FFO per share until a hearing on
Fleming's motion is held and additional information as to
Fleming's plans with respect to its other store locations
becomes available.

Heritage is a fully integrated, self-administered and self-
managed REIT traded on the New York Stock Exchange under the
symbol "HTG". Heritage acquires, owns, manages, leases and
redevelops primarily grocer-anchored neighborhood and community
shopping centers in the Eastern and Midwestern United States. As
of December 31, 2002, the Company had a portfolio of 152
shopping centers, located in 26 states and totaling
approximately 30 million square feet of total gross leasable
area, of which 25.9 million square feet is company-owned gross
leasable area. Our shopping center portfolio was approximately
93% leased as of December 31, 2002.

Heritage is headquartered in Boston, Massachusetts and has 14
regional offices located in the Eastern and Midwestern United

FLEMING: Honoring Up to $16M of Prepetition Customer Obligations
In the ordinary course of their businesses, Fleming Companies,
Inc., and its debtor-affiliates engage in certain customer
programs and practices to develop and sustain a positive
reputation in the marketplace for their services.  In view of
their Chapter 11 filing, the Debtors believe that continuing
these Customer Programs postpetition is necessary to preserve
their critical business relationships and goodwill for their
estates' benefit.

Against this backdrop, the Debtors seek the Court's authority
to, in their sole discretion:

    (a) perform and honor their prepetition obligations related
        to the Customer Programs; and

    (b) continue, renew, replace, implement new, or terminate
        the Customer Programs, without further Court approval.

"Continuing the Debtors' historical Customer Programs is crucial
to the future of the Debtors' businesses.  The Debtors' success
in reorganizing their businesses depends significantly on their
reputation as reliable and retaining the goodwill of their
customers.  The Debtors' customers rely on the fair and honest
customer programs," Christopher J. Lhulier, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., says.

Mr. Lhulier points out that the Debtors' inability to honor
their Customer Programs would place them at a severe
disadvantage relative to their competitors in the marketplace,
potentially resulting in a fatal imbalance between the Debtors
and their competitors.  Failing to continue the Customer
Programs will harm the Debtors' reputation irreparably and
influence current and potential customers to do business with
their competitors.  Those consequences would undermine severely
the Debtors' reorganization efforts.

"The Debtors are seeking to continue the Customer Programs
because these programs have been successful business strategies
in the past and have generated valuable goodwill, repeat
business and net revenue increases.  Maintaining these benefits
throughout the Debtors' Chapter 11 cases is essential to the
continued vitality of their businesses, and ultimately to their
prospects for a successful reorganization," Mr. Lhulier

The Customer Programs consist of five separate categories:

    * the Facility Standby Agreement Rebate Programs,
    * the Volume Based Rebate Programs,
    * the PCRA Program,
    * the Vendor Ad Funds Programs, and
    * the Merchandise on Hand Programs.

            Facility Standby Agreement Rebate Programs

Pursuant to the Facility Standby Agreement Rebate Programs, the
Debtors enter into facility standby agreements to provide credit
to a retailer in order to capture or retain that retailer's
business for a defined period of time.  The retailer is
encouraged to purchase more products from the Debtors to obtain
a greater rebate.  Consequently, the Rebate Programs result in
larger net revenue for the Debtors.

On the Petition Date, Mr. Lhulier relates that many
participating retailers had accumulated substantial purchases.  
Several of those retailers are approaching the purchase level
that would trigger a rebate.  In view of that, if the Rebate
Programs were discontinued, Mr. Lhulier maintains that the
participating retailers would lose any rebate credit for their
prepetition purchases.  As a consequence, the retailers would
likely refuse to continue distributing goods from the Debtors
and initiate a business relationship with the Debtors'

"The Debtors believe that maintaining the Facility Standby
Agreement Rebate Programs will demonstrate management's
confidence in the Debtors and, therefore, enhance the public's
confidence in the continued reliability and operations of the
Debtors.  In that regard, the Debtors believe that the rebates
during the Chapter 11 Cases will be more than offset by the
revenue from sales made because the Facility Standby Agreement
Rebate Programs remain in place," Mr. Lhulier says.

                Volume-Based Rebate Programs

The Debtors implement various volume-based rebate programs that
offer payments to retailers based on certain levels of product
purchases.  Under the Programs, retailers are encouraged to
purchase more products from the Debtors to obtain a greater
rebate.  However, the retailers' entitlements to rebates
pursuant to the Volume-Based Rebate Programs can vary
substantially among the customers.  The timing of the required
payment to the retailers varies as well.  The payments may be
due on a monthly, quarterly or annual basis.

Like the Facility Standby Agreement Rebate Programs, many
retailers have acquired prepetition credits under the Volume-
Based Rebate Programs.  Thus, if the Volume-Based Rebate
Programs were discontinued, these retailers would lose their
credits, which would likely cause them to purchase from the
Debtors' competitors.

On an annual basis, the Debtors estimate paying $27,300,000 in
satisfying rebates earned under the Facility Standby Agreement
Rebate Programs and Volume-Based Rebate Programs.

            Product Cost Reduction Account Program

The PCRA Program is a program where the Debtors allocate funds
issued by their vendors to be distributed to retailers that
carry the vendors' products.  The funds include vendor discounts
and slotting fees the Debtors receive.  At times, vendor
discounts may not occur until after the retail customer has been
invoiced for the product.  Rather than re-invoice the customer
for the product, the Debtors will credit the amount of the
discount to the customer's PCRA account.  Slotting fees are
those amounts that the vendor will pay the Debtors to carry its
product that the Debtors will pass along to the customer through
the PCRA.

According to Mr. Lhulier, the PCRA Program applies only to those
retail customers who utilize the Debtors' FlexPro marketing
program.  Under the FlexPro programs, grocery, frozen and dairy
products are priced at their net acquisition value, which is
generally comparable to the net cash price paid by the Debtors'
operations.  FlexPro customers, in turn, pay fees for specific
activities related to product selection and distribution, and
vendor allowances and service income are passed through to the

The Debtors receive funds from the vendors once every four
weeks. The Debtors then reconcile the PCRA funds owed to the
retailers to the retailer fees owed to the Debtors for the
FlexPro program.

As of March 21, 2003, the Debtors estimate that the amounts to
which their retail customers are entitled pursuant to the PCRA
Programs total $4,600,000.

                   Vendor Ad Funds Programs

The Vendor Ad Funds Program is part of the Debtors' advertising
circular program for their retail customers.  Vendors pay the
Debtors' advertising dollars -- Vendor Ad Funds -- to receive
advertising space in various retail circulars.  Any portion of
the Vendor Ad Funds remaining after the Debtors have offset
their costs to complete the advertisement circulars are paid to
the Debtors' retailers.  The Debtors receive the Vendor Ad Funds
on a weekly basis and pay any residual amounts to the retailers
on a monthly basis.

The Debtors estimate that they receive $36,000,000 per year from
the vendors.  The Debtors turn over 80% of these amounts to
their retail customers pursuant to the Vendor Ad Funds Program.

             The Merchandise on Hand Programs

Pursuant to the merchandise on hand programs, certain retail
customers prepay the Debtors for goods at reduced prices.  The
Debtors maintain the goods in their inventory until such time as
the retail customer needs the product.  At any one time, the
Debtors have substantial obligations under the Merchandise on
Hand Programs to their retail customers.

Though relatively small in scale, the Merchandise on Hand
Programs create incentives for retail customers of certain of
the Debtors' distribution centers to purchase a greater volume
of the Debtors' product thereby generating additional revenue
for the Debtors.  If the Merchandise on Hand Programs are
discontinued, the Debtors believe that the retailers entitled to
products for which they previously paid would lose their
credits, causing a reduction in goodwill toward the Debtors --
likely causing them to purchase from the Debtors' competitors.

The Debtors estimate that as of March 19, 2003, the credits to
which their retail customers are entitled pursuant to the
Merchandise on Hand Programs is $1,700,000.

                     *     *     *

On an interim basis, Judge Walrath allows the Debtors to perform
on their prepetition obligations under the Customer Programs, as
the Debtors deem appropriate, for the next 30 days.  However,
Judge Walrath indicates that the payments must not exceed
$16,000,000 without further Court order.  The Debtors are also
permitted to continue, renew, replace, implement, new or
terminate the Customer Programs, as they deem appropriate.

Judge Walrath will convene a final hearing to consider the
Debtors' request, any last minute changes or objections on
April 21, 2003 at 12:30 p.m.  Interested parties have until
April 14, 2003 to file and serve objections. (Fleming Bankruptcy
News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-

Fleming Companies' 10.625% bonds due 2007 (FLM07USR1) are
trading at about a penny on the dollar, says DebtTraders. See
real-time bond pricing.

FOCAL COMMUNICATIONS: Committee Retains Klett Rooney as Counsel
The Official Committee of Unsecured Creditors of Focal
Communications Corporation and its debtor-affiliates, sought and
obtained approval from the U.S. Bankruptcy Court for the
District of Delaware to retain Klett Rooney Liebre & Schorling
as its Counsel.

Klett Rooney will:

     a) advise the Committee with respect to its rights, duties
        and powers in these cases;

     b) assist and advise the Committee in its consultations
        with the Debtors relative to the administration of these

     c) assist the Committee in analyzing the claims of the
        Debtors' creditors and in negotiating with such

     d) assist with the Committee's investigation of the acts,
        conduct, assets, liabilities and financial condition of
        the Debtors and of the operation of the Debtors'
        businesses and any other matters relevant to these

     e) assist the Committee in its analysis of and negotiations
        with the Debtors or any third party concerning matters
        related to, among other things, the terms of a plan of
        reorganization or other conclusion of these cases;

     f) assist the Committee in requesting the appointment of a
        trustee or examiner, should such action become

     g) assist and advise the Committee as to its communications
        to the general creditor body regarding significant
        matters in these cases;

     h) represent the Committee at all hearings and other

     i) review and analyze all applications, orders, statements
        of operations and schedules filed with the Court and
        advise the Committee as to their propriety;

     j) assist the Committee in preparing agreements, motions,
        applications, orders, complaints, answers, briefs and
        pleadings as may be necessary in furtherance of the
        Committee's interests and objectives; and

     k) perform such other legal services as may be required
        under the circumstances of these cases and are deemed to
        be in the interests of the Committee in accordance with
        the Committee's powers and duties as set forth in the
        Bankruptcy Code.

The Debtors relate that Klett Rooney has discussed a delegation
of duties and responsibilities with lead counsel, Akin Gump
Strauss Hauer & Feld, to ensure that efforts will not be
duplicated to avoid needless expenses.

Klett Rooney will charge for its legal services on an hourly
basis in its ordinary and customary hourly rates. The attorneys
who will primarily represent the Committee and their standard
hourly rates are:

          Teresa K.D. Currier      $445 per hour
          Mary F. Caloway          $350 per hour
          Kerri K. Mumford         $180 per hour

Focal Communications Corporation other related Debtors are
national communicational providers of voice and data services to
communications-intensive users in major cities and metropolitan
areas in the United States.  The Debtors filed a chapter 11
petition on December 19, 2002 (Bankr. Del. Case No. 02-13709).  
Laura Davis Jones, Esq., and Christopher James Lhulier, Esq., at
Pachulski Stang Ziehl Young & Jones PC represent the Debtors in
their restructuring efforts.  When the Company filed for
protection form its creditors it listed $561,044,000 in total
assets and $609,353,000 in total debts.

FS CONCEPTS: FAS Co. Wants to Acquire Assets Out of Bankruptcy
The Seidler Companies has been retained by FAS Company, LLC, a
consortium of regional owners of Fantastic Sams, to act as
financial adviser in connection with the consortium's objective
to purchase, out of bankruptcy, the assets of FS Concepts, a
subsidiary of Santa Ana, Calif.-based Opal Concepts, and certain

In this three-tiered franchise system, FS Concepts is the
"master franchiser" and licensor of Fantastic Sams hair salons.
FS Concepts sells regions to regional owners, who each own the
exclusive rights to sell Fantastic Sams franchises in their
region. In return, these regional owners provide day-to-day
operational, marketing, advertising, product promotion,
recruitment and management support to the franchisees of the
individual Fantastic Sams salons.

Along with 22 affiliates, FS Concepts and its parent, Opal
Concepts, have been the subject of a Chapter 11 Bankruptcy
pending in Santa Ana since July 2002. Daniel Harrow, Managing
Director of Restructuring Services at Seidler, said the regional
owners of Fantastic Sams have suffered in recent years as owner
after owner of the master franchiser, in this case Opal
Concepts, has failed financially. On the other hand, the
underlying components of the franchise are strong. The
individual franchisee-owned salons are profitable and the
regions are financially sound.

"The bankruptcy has created tremendous uncertainty and has
detrimentally impacted the regional owners' ability to sell
franchises to salon owners," Harrow said. "Most regional owners
are angered by the distraction that their failed master
franchiser has caused and believe long-term certainty and
stability can only be achieved if their consortium buys the
assets from FS Concepts. They strongly believe that the
acquisition will result in substantial benefits to their

Harrow stated: "The regional owners are the backbone of the
organization. They maintain the relationships with the salon
owners. They write the checks and they feel like they have been
taken for granted by the past master franchisers. Given all the
problems with this master franchiser, we are surprised that the
regional owners have not simply 'flipped the signs' and
continued business under a new trade name."

Continuing, Harrow said, "More than 80 percent of the Fantastic
Sams regional owners support a sale to FAS Company, an entity
majority-owned by these regional owners. Frankly, the support of
the regional owners is essential to any deal. These regional
owners oppose a sale to anyone else because they do not want to
deal with yet another master franchiser that would jeopardize
their operations. The regional owners want to protect the
businesses they have built and their valued relationships with
their franchisees. In short, they want to control their own
destiny," Harrow said.

Harrow, a bankruptcy and restructuring expert, concluded, "I
don't think these assets are really worth much without the
cooperation and support of the regional owners."

Established in 1969, The Seidler Companies is a leading regional
middle-market, NYSE-member investment bank and securities firm.
Along with investment banking services for corporations, the
firm serves the financial needs of institutions, municipalities
and high-net-worth individuals. Headquartered in Los Angeles,
the firm also has California offices in Fresno, Irvine and
Redlands, along with its latest office in Scottsdale, AZ. For
more information visit  

The Seidler Companies' restructuring unit focuses on in-and out-
of-court restructurings, recapitalizations, distressed mergers
and acquisitions, as well as analysis of potentially distressed
businesses. Daniel Harrow, a restructuring and bankruptcy
specialist formerly with Chanin & Co., leads the unit. Harrow's
background includes 20-plus years of restructuring experience on
numerous high-profile deals such as Carter Hawley-Hale, Orange
County, Greyhound, C&R Clothiers, Carolco Pictures and Hamburger

FAS Company, LLC, a consortium of a majority of the regional
owners of Fantastic Sams, was formed in March 2003, with the
objective of purchasing the assets of FS Concepts, the bankrupt
master franchiser of Fantastic Sams. Founded in 1974, Fantastic
Sams is one of the largest of the national haircare franchise
organizations in the United States.

GENESEE CORP: Receives $2.4MM Escrow from Sale of Foods Division
Genesee Corporation (Nasdaq: GENBB) received $2.4 million upon
the expiration of an escrow account established in connection
with the sale of its Foods Division in October 2001.  A balance
of $25,000 remains in escrow for claims presented by the buyer
of the Foods Division against the escrow, which the Corporation
expects to resolve in the near future.

The Corporation also announced that its Board of Directors has
declared a partial liquidating distribution of $1.50 per share,
payable on April 28, 2003 to Class A and Class B shareholders of
record on April 22, 2003. The partial liquidating distribution
announced today is the seventh paid by the Corporation pursuant
to the plan of liquidation and dissolution approved by the
Corporation's shareholders in October 2000 and brings the total
of liquidating distributions paid to date to $62.8 million, or
$37.50 per share. Distributions totaling $36.00 per share were
paid to shareholders on March 1, 2001, November 1, 2001, May 17,
2002, August 26, 2002, October 11, 2002 and March 17, 2003.

Taking into account the $1.50 per share liquidating distribution
payable April 28, 2003 and the $2.50 per share liquidating
distribution paid on March 17, 2003, the Corporation has updated
its estimate of net assets in liquidation to $8.8 million, or
$5.28 per share, compared to net assets in liquidation at
January 25, 2003 of $15.5 million, or $9.28 per share.

GLASSTECH HOLDING: Delaware Court Closes Chapter 11 Proceedings
After determining that the estates have been fully administered,
the U.S. Bankruptcy Court for the District of Delaware issued a
final decree closing Glasstech Holding Co., and Glasstech,
Inc.'s chapter 11 cases.  The Debtors report that they have
substantially consummated the chapter 11 Plan.  Consequently,
the Debtors' chapter 11 cases are closed effective March 12,

Glasstech Holding Co., designs and assembles glass bending and
tempering systems that are used by glass manufacturers and
processors in the conversion of flat glass into safety glass.
The Company filed for Chapter 11 protection on January 30, 2002
(Bankr. Del. Case No. 02-10281).  Laura Davis Jones, Esq., at
Pachulski, Stang, Ziehl Young Jones & Weintraub represent the
Debtors in their restructuring efforts.  When the Company filed
for protection from its creditors, it listed over $50 million in
both estimated assets and liabilities.

GLOBAL CROSSING: Court Clears Settlement Agreement with Pegasus
Global Crossing Ltd., and its debtor-affiliates obtained
approval from the Court of its Settlement Agreement with Pegasus
Telecom S.A.

The salient terms of the Amendment are:

  A. Purchase Price: The prepaid purchase price of the capacity
     and services purchased under the CPAs and available as
     credits to both parties for capacity and services will be
     reduced from $26,000,000 to $5,000,000.  As a result of
     this modification and the capacity already taken down by
     each party, the Debtors will have $4,400,000 of capacity
     and services available to be drawn down, and Pegasus will
     have $2,600,000 of capacity and services available to be
     drawn down.  Based on current commitments and outstanding
     orders aggregating $2,600,000, Pegasus will have consumed
     its full $5,000,000 credit commitment by December 31, 2003.

  B. Term: The term for consumption of credits of capacity and
     services is revised from September 1, 2006 to December 31,

  C. Representations and Warranties:  GX acknowledges that
     Pegasus is entitled to reimbursement for certain taxes
     incurred for the period from September 3, 2001 until
     July 31, 2002 amounting to $238,057, which will be paid in
     three equal installments of $79,352.33 payable on the 15th
     of August, September and October 2002.

  D. Cross Default Provisions: The CPAs are amended so that
     defaults by a party under one CPA entitle the other party,
     subject to certain conditions, to suspend the provision of
     capacity and services under the other CPA for the duration
     of the disruption.


In September 2001, certain of the Global Crossing Debtors
entered into two separate Commitment Purchase Agreements with
Pegasus Telecom S.A. By entering into the CPAs, the GX Debtors
sought to:

    -- reduce the need to build out planned local and domestic
       networks by outsourcing Brazilian connectivity
       requirements to Pegasus;

    -- minimize the cost of access by securing a discount to
       market rates for all future purchases from Pegasus; and

    -- establish a long-term relationship with Pegasus, a
       company that at the time was controlled by the same
       parties that control Telemar, one of the largest fixed-
       line operators in Latin America. (Global Crossing
       Bankruptcy News, Issue No. 37; Bankruptcy Creditors'
       Service, Inc., 609/392-0900)

GUITAR CENTER: Improved Performance Triggers Outlook Revision
Standard & Poor's Ratings Services revised its outlook on
specialty music retailer Guitar Center Inc., to positive from
stable. The outlook revision is based on the company's improved
operating performance and credit measures.

Standard & Poor's also affirmed its 'B+' corporate credit rating
on the company. Agoura Hills, California-based Guitar Center had
$150 million of debt outstanding as of Dec. 31, 2002.

"Guitar Center has been able to improve its credit protection
measures while expanding its store base and significantly
upgrading its infrastructure and technology systems," stated
Standard & Poor's credit analyst Robert Lichtenstein. The
company increased lease-adjusted EBITDA to $83 million in 2002
from $73 million in 2001. As a result, EBITDA coverage of
interest rose to 3.3x from 2.9x the year before.

Guitar Center is the nation's largest retailer of music products
in a highly fragmented industry. Nevertheless, the company's
market position has been enhanced by the liquidation of
competitor MARS Music, which filed for federal bankruptcy in
September 2002. Moreover, Guitar Center plans to continue to
accelerate its expansion in 2003 through new store openings
and acquisitions.

Same-store sales rose 6% in both 2002 and 2001, after climbing
7% in 2000. Same-store sales in 2002 benefited from the closure
of 11 competing Mars Music stores in the company's markets.
Operating margins were unchanged in 2002 at about 9% despite
higher expenses related to the company's new distribution center
and an increase in wages and insurance costs.

Leverage declined in 2002 even though additional capital was
required to support the company's expansion plan, acquisitions,
infrastructure improvements, and new distribution center. For
the 12 months ended Dec. 30, 2002, total debt to EBITDA
decreased to 3.3x from 3.7x the year before.

Guitar Center has demonstrated strong execution, with overall
improvement in operating and financial performance. Continued
improvement of credit protection measures could lead to an
upgrade during the next 24 months despite Guitar Center's use of
debt to finance its store expansion, infrastructure
improvements, and possible acquisitions.

HEARTLAND SECURITIES: Hires Piper Rudnick as Bankruptcy Counsel
Heartland Securities Corp., wants to hire and retain Piper
Rudnick LLP as its counsel in its on-going chapter 11 case.  The
Debtor tells the U.S. Bankruptcy Court for the Southern District
of New York that when it became apparent that a bankruptcy
filing was likely, it asked Piper Rudnick to provide advice
regarding preparation for the commencement and prosecution of a
case under chapter 11 of the Bankruptcy Code.

Piper Rudnick is expected to:

     a) advise the Debtor with respect to its powers and duties
        as debtor and debtor-in-possession in the continued
        management and operation of its business and property;

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

     c) advise the Debtor in connection with any contemplated
        sales of assets or business combinations, including
        negotiating any asset, stock purchase, merger or joint
        venture agreements, formulating and implementing any
        bidding procedures, evaluating competing offers,
        drafting appropriate corporate documents with respect to
        the proposed sales, and counseling the Debtor in
        connection with the closing of any such sales;

     d) advise the Debtor in connection with postpetition
        financing and cash collateral arrangements, negotiate
        and draft documents relating thereto, provide advice and
        counsel with respect to the Debtor's prepetition
        financing arrangements, provide advice to the Debtor in
        connection with issues relating to financing and capital
        structure under any plan or reorganization, and
        negotiate and draft documents relating thereto;

     e) advise the Debtor on matters relating to the evaluation
        of the assumption or rejection of unexpired leases and
        executory contracts;

     f) advise the Debtor with respect to legal issues arising
        in or relating to the Debtor's ordinary course of
        business, including attendance at senior management
        meetings, meetings with the Debtor's financial and
        turnaround advisors, and meetings of the board of
        directors, advise the Debtor on employee, workers'
        compensation, employee benefits, labor, tax,
        environmental, banking, insurance, securities,
        corporate, business operation, contract, joint ventures,
        real property, press/public affairs and regulatory
        matters, and advise the Debtor with respect to
        continuing disclosure and reporting obligations, if any,
        under securities laws;

     g) take all necessary action to protect and preserve the
        Debtor's estate, including the prosecution of actions on
        its behalf, the defense of any actions commenced against
        this estate, any negotiation concerning litigation in
        which the Debtor may be involved, and the prosecution of
        objections to claims filed against the estate;

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

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

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

     k) appear before this Court and any appellate courts, and
        protect the interests of the Debtor's estate before such
        courts; and

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

Piper Rudnick's bankruptcy and creditors' rights attorneys that
are likely to represent the Debtor in this case, and their
standard hourly rates are:

          David B. Buss                $525 per hour
          Thomas R. Califano           $500 per hour
          Garry P. McCormack           $495 per hour
          Jeremy R. Johnson            $325 per hour
          Vincent J. Roldan            $325 per hour

Heartland Securities Corp., provider securities brokerage
services for professional day traders, filed for chapter 11
protection on March 26, 2003 (Bankr. S.D.N.Y. Case No.
03-11817).  Thomas R. Califano, Esq., Piper Marbury Rudnick &
Wolfe LLP, represents the Debtors in their restructuring
efforts.  When the Company filed for protection from its
creditors, it listed $13,386,000 in total assets and $25,833,000
in total debts.

HUGHES: S&P Keeps Ratings Watch over News Corp.'s Equity Buy-Out
Standard & Poor's Ratings Services revised its CreditWatch
listing on Hughes Electronics Corp. and related entities to
positive from developing following the company's announcement
that News Corp. Ltd., (BBB-/Stable/--) will acquire 34% of the
company. The ratings had been on CreditWatch developing,
reflecting uncertainty regarding Hughes' future ownership.

"Standard & Poor's views Hughes' DirecTV unit as a strategic
element of News Corp.'s global satellite direct-to-home
platform," said Standard & Poor's credit analyst Eric Geil.
"News Corp. has been interested in DirecTV for an extended time
and should provide operating and financial support, based on its
track record with international DTH investments in the U.K. and

Subscribers, revenue, and EBITDA at the U.S. DirecTV business
continue to grow at double-digit percentage rates. The unit is
also close to producing positive free cash flow as it focuses on
acquiring more profitable customers with higher credit quality.
DirecTV is expanding availability of local broadcast signals and
is emphasizing sales of multiple set subscriptions as keys to
its revenue and EBITDA growth strategy. However, rival DTH
operator EchoStar Communications Corp. is following a similar
plan, while also competing on price. In addition, neither
DirecTV nor EchoStar are able to competitively provide the
enhanced two-way digital services being aggressively offered by
cable operators over recently rebuilt systems.

Despite the positive operating momentum at DirecTV, Hughes has
been facing challenges and ongoing external cash needs at the
corporate level, at the DirecTV Latin America unit, and at
Hughes Network Systems. The new senior secured credit facility
and senior unsecured notes at DirecTV Holdings LLC address these

Hughes owes Boeing Co., a purchase-price adjustment of roughly
$200 million cash related to Boeing's purchase of Hughes'
satellite manufacturing business. Boeing also believes it is due
an additional $670 million adjustment that Hughes is contesting
through arbitration.

DLA generated a $202 million EBITDA loss in 2002 due to regional
economic weakness and currency devaluation. Hughes filed DLA for
bankruptcy protection to help it renegotiate U.S. dollar-
denominated programming contracts and reduce a November 2003
$195 million cash put obligation by another shareholder.

Hughes also needs cash for HNS, including $400 million to launch
its Spaceway broadband communications platform in the 2004 first
quarter. Although HNS generates negative EBITDA, cost controls
helped this unit pare the loss to $87 million in 2002 from $112
million in 2001.

Following a review of Hughes' operating and financial prospects
under its new ownership structure, a ratings upgrade could occur
once the deal is completed. However, the magnitude of a
potential upgrade may be constrained in light of News Corp.'s
minority stake.

Ratings List:              To                   From

Hughes Electronics Corp.  
  Corporate credit       B+/Watch Pos/--      B+/Watch Dev/--

DirecTV Holdings LLC
  Senior secured debt    BB-/Watch Pos/--
  Senior unsecured debt  B/Watch Pos/--

PanAmSat Corp.
  Corporate credit       B+/Watch Pos/--      B+/Watch Dev/--
  Senior secured debt    BB-/Watch Pos/--     BB-/Watch Dev/--
  Senior unsecured debt  B-/Watch Pos/--      B-/Watch Dev-

INTERSTATE BAKERIES: S&P Concerned About Weak Performance
Standard & Poor's Ratings Services placed its 'BBB-' corporate
credit and bank loan ratings on fresh baked bread manufacturer
Interstate Bakeries Corp. on CreditWatch with negative
implications. The 'BB+' preliminary subordinated shelf ratings
on Interstate Bakeries were also placed on CreditWatch with
negative implications.

The Kansas City, Missouri-based company had about $587 million
of total debt outstanding at March 8, 2003.

The CreditWatch listing reflects Interstates Bakeries' current
weak operating performance, which has resulted in credit
measures below the current rating level. Furthermore, due to the
weak operating results, Interstate Bakeries' is in negotiation
with its lenders to amend the financial covenants on its secured
revolving credit facility. The drop in earnings reflects the
impact of higher energy costs, health care benefits payments,
and lower sweet goods sales.

"Standard & Poor's plans to meet with management and discuss
Interstate Bakeries' earnings and cash flow expectations, market
conditions, and the prospects for recovery in the remainder of
fiscal 2003 and 2004," said Standard & Poor's credit analyst
Ronald Neysmith.

Interstate Bakeries Corporation is the largest U.S. wholesale
baker and distributor of fresh baked bread and sweet goods. The
company operates 62 bakeries throughout the U.S. and employs
more than 35,000 people. The company's sales force delivers
baked goods to more than 200,000 food outlets on approximately
9,500 delivery routes.

IP SERVICES: Bankruptcy Trustee Takes Legal Action vs AGD Mining
A.G.D. Mining Ltd.'s Directors advise that the company, together
with a north American telecommunications company, has been
served with a summons issued in Denver, Colorado, by the trustee
in bankruptcy for IP Services Inc, raising various allegations
in relation to the involuntary bankruptcy of IP Services.

AGD Mining entered into an agreement to acquire IP Services Inc,
a Denver-based telephone company, through the exchange of AGD
Mining shares for existing shares in IP Services. The agreement
was rescinded when a local court order prevented IP Services
from operating its telephone network in Colorado. Subsequently,
IP Services was placed in involuntary bankruptcy.

Preliminary advice from the company's US lawyers is that the
claims of the bankruptcy trustee are without foundation, and AGD
will vigorously defend the claims if they are pursued

As previously advised to the market, most recently in last years
annual report, the bankruptcy trustee for IP Services had
queried the validity of the rescission of the Plan of Share
Exchange (under which AGD was to acquire all the outstanding
shares in IP Services), and also the validity of security taken
by AGD over IP Services assets for loans made to IP Services.

The summons issued by the bankruptcy trustee claims:

(a) that the security held by AGD for its loans to IP Services
    is invalid, and that the loans (which total US$992,426)
    should be subordinated to the unsecured creditors.

    AGD has previously advised it did not anticipate any
    repayment of this debt [which has been written off].

(b) that no rescission of the Plan of Share Exchange has
    occurred, apparently to support a claim that because of the
    Plan of Share Exchange, AGD became liable for all the debts
    of IP Services [certified at US$2,687,726 in June, 2001,
    including AGDs loans] as its successor. This claim is based
    on a number of incorrect allegations of fact, and AGD has
    been advised by its US lawyers that no such claim of
    successor liability is known to Colorado law.

(c) that AGD agreed to, or acquiesced in (which AGD denies), the
    transfer of IP Services customer base to another US
    telecommunications company, for inadequate consideration and
    is liable to the extent of the value of the customer base in
    an amount of not less than US$330,000 and damages.

AGD has instructed its US lawyers to investigate the possibility
of having the summons dismissed and to provide a more
comprehensive review of the allegations.

J. CREW: Moody's Further Downgrades Debt Ratings to Low-B/Junks
Moody's Investors Service drops several debt ratings of J. Crew
Group and its operating unit, J. Crew Operating Corp down to
low-Bs and junks. The downgrade follows the announcement of a $9
million write down on its previously reported net income.

                  Rating Actions
                                                To      From
J. Crew Group:

    Senior implied                              B3      B2
    13.125% Senior Discount Notes due 2008      Ca      Caa3
    Issuer rating                               Ca      Caa3

J. Crew Operating Corp.:

    10.375% senior subordinated notes due 2007  Caa3    Caa1

The downgrade reflects a very high leverage and the expectations
of a weak performance and operating profitability in the coming
months. Other factors considered are the seasonality and
volatility associated with the company's apparel business.

Rating outlook is still negative due to J. Crew's limited

Headquartered in New York City, J. Crew Group and its
subsidiaries is a specialty apparel retailer operating through
stores and direct catalog / Internet sales.

KAISER ALUMINUM: Court Grants Clark Public Limited Stay Relief
Public Utility District No. 1 of Clark County, doing business as
Clark Public Utilities, wants the automatic stay, in Kaiser
Aluminum Corporation's bankruptcy proceeding, lifted so it can
appear and participate in a reopened "generic" rate-setting and
refund proceeding pending before the Federal Energy Regulatory

The FERC Commissioners issued an order on December 19, 2002
reopening an action initiated by the FERC in 2001 on a complaint
by Puget Sound Energy, Inc. against all jurisdictional sellers
of power in the Pacific Northwest.  The FERC determined that new
evidence came to light regarding market manipulation in the
Western United States power market warranting the reopening the
Puget Sound Proceeding for further investigation into that
evidence.  Clark Public Utilities and the Debtors participated
in the Proceeding.

In June 2002, Clark Public Utilities filed a motion seeking to
lift the automatic stay so it can participate in the Puget Sound
Proceeding.  But the Court denied the request without prejudice
because, at that point, the Puget Sound Proceeding was closed
and it was unclear whether and for what purpose the Proceeding
would be reopened by the FERC.  However, the Court also stated
that, in the event the FERC reopened the record, Clark Public
Utilities could re-file its request.

Christopher F. Graham, Esq., at Thacher Proffitt & Wood, in New
York, explains that the failure to participate could result in
the improper liquidation of Clark Public Utilities' claim in the
Debtors' bankruptcy cases.  Mr. Graham tells the Court that the
FERC will make its ruling on the price cap or otherwise without
all of the relevant information before it and Clark Public
Utilities will be bound by that ruling.  Mr. Graham relates that
Clark Public Utilities, along with the other purchasers of power
involved in the Puget Sound Proceeding, has not had the
opportunity to fully develop its case in the Proceeding, in part
due to the fact that the original administrative law judge in
the Proceeding set an expedited discovery schedule which
prevented the parties from taking discovery regarding market
manipulation in the Pacific Northwest.  The original
Administrative Law Judge artificially grouped the parties in the
Proceeding and only allowed participation through a designated
group counsel.  As a result, certain parties with unique
interests, like Clark Public Utilities, were not heard.

"There is already a substantial record before [the] FERC in the
Puget Sound Proceeding and [the] FERC is giving the parties to
the Puget Sound Proceeding the opportunity to complete the
record," Mr. Graham says.

Clark Public Utilities intervened in the Puget Sound Proceeding
and alleged that the Debtors violated the Federal Power Act by
charging unjust and unreasonable rates for the power it
purchased pursuant to an agreement in February 2001.  The
Debtors charged Clark Public Utilities $325 per Megawatt-hour or
$64,080,603 -- a rate over 15 times more than the $4,228,561 the
Debtors actually paid the Bonneville Power Administration for
the same power -- and required Clark Public Utilities to pay for
the power more than five months in advance of its delivery.  The
Debtors purchase power from Bonneville, a federal agency charged
with operating various power production facilities in the
Pacific Northwest.  The Debtors sold 140 Megawatts of power to
Clark Public Utilities from August 1, 2001 through September 30,
2001. Clark Public Utilities believes that it is entitled to a

Mr. Graham also asserts that the FERC has exclusive jurisdiction
to determine whether the Debtors charged a "just and reasonable"
rate when they sold electricity to Clark Public Utilities.
Therefore, the FERC is the appropriate forum to liquidate Clark
Public Utilities' claim against the Debtors with respect to the
Puget Sound Proceeding.

Clark Public Utilities is a customer-owned municipal corporation
operating under the laws of the State of Washington and provides
electricity to 160,000 customers throughout Clark County,

                       Debtors Object

"[Clark Public Utilities] simply seeks to conduct a fishing
expedition under the guise of obtaining additional evidence to
submit to the [FERC]," Patrick Leathem, Esq., at Richards,
Layton & Finger, tells Judge Fitzgerald.

Mr. Leathem points out that the Motion is, in reality, an
attempt to conduct additional discovery so Clark Public
Utilities can re-litigate claims it lost in the hearing before
the Administrative Law Judge and to pursue additional claims
against the Debtors. Instead, Mr. Leathem suggests that Clark
Public Utilities file a claim in the Debtors' cases so that the
Bankruptcy Court, if necessary, can determine the amount of
Clark Public Utilities' claim based on the FERC's decision.

Mr. Leathem explains that Clark Public Utilities' and the
Debtors' versions of facts were already presented to the FERC at
an evidentiary hearing in the Puget Sound Proceeding.  Clark
Public Utilities had full opportunity to conduct discovery --
which it did -- prior to the Administrative Law Judge's
recommendation, which was based on the evidentiary presentations
as well as a voluminous record developed at that hearing.  The
Administrative Law Judge's recommendations indicate that no
refunds were due Clark Public Utilities.  Mr. Leathem further
contends that Clark Public Utilities has not raised anything in
the Motion that has not been raised before the FERC or of which
the FERC is not well aware of.

"[Clark Public Utilities] has not even attempted to show that
additional or new evidence it believes it can obtain from the
Debtors, let alone why this additional discovery might be
necessary or helpful to the FERC," Mr. Leathem points out.

Contrary to Clark Public Utilities' assertion, Mr. Leathem
informs the Court that the Debtors were not the seller of the
electricity.  Pursuant to their Power Sales Agreement with
Bonneville, if the Debtors desired to curtail their purchases,
they had to provide Bonneville with a notice of the amount and
duration of the curtailment.  In conjunction with the reduced
consumption, the Debtors could request Bonneville to sell the
excess power to another entity.  The Debtors also had the option
to identify a designated third party that was willing to pay a
specified price for the power.

Therefore, Mr. Leathem asserts, the Debtors did not have a
right, statutorily, contractually or otherwise, to dictate
whether Bonneville would sell the power to a third party or
retain it for their own use.  Likewise, the Debtors did not have
the right to determine to whom Bonneville would sell the power
if it chooses to sell to another party.  The Debtors also had no
right to establish the price at which Bonneville would sell the

Mr. Leathem clarifies that the notice the Debtors sent to
Bonneville only served to identify Clark Public Utilities as a
potential purchaser.  After receiving the notice, Bonneville
elected to sell power to Clark Public Utilities.  The two
parties executed an agreement that unambiguously identifies
Bonneville as the seller and Clark Public Utilities as the Buyer
for a term commencing on August 1, 2001 and terminating on
September 30, 2001.

Additionally, Mr. Leathem reminds the Court that there will be
enormous cost to the Debtors if Clark Public Utilities is
allowed to start down the trail of re-litigation.

"There will be the costs of filing appropriate pleadings,
conducting and responding to discovery, including discovery from
parties aside from Clark Public Utilities, possibly filing of
testimony and the like," Mr. Leathem cites.  "All of this extra
cost and effort will be for naught if the FERC issues a decision
in the Puget Sound Proceeding finding that [Kaiser] was not the
seller of electricity or finds that Clark Public Utilities is
not entitled to a refund," Mr. Leathem says.

          Creditors' Committee Doesn't Like It Either

The Official Committee of Unsecured Creditors also asks the
Court to deny Clark Public Utilities' request for several

  (a) The FERC's actions do not fall under the police power
      exception noted in Section 362(b)(4) of the Bankruptcy
      Code.  It is simply undeniable that Clark Public Utilities
      is only seeking monetary relief in the Puget Sound
      Proceeding.  In addition, Clark Public Utilities has not
      provided any reasons why their claim should be treated any
      differently than the thousands of other prepetition claims
      against the Debtors' estates;

  (b) Clark Public Utilities has not demonstrated that it will
      prevail on the merits in the Puget Sound Proceeding if the
      stay is lifted and it is allowed to undertake discovery;

  (c) The Debtors will be prejudiced if the stay is lifted.  If
      Clark Public Utilities is allowed to undertake discovery,
      the Debtors will be forced to incur costs and expend
      resources to respond to Clark Public Utilities' discovery

                       *     *     *

Judge Fitzgerald allows Clark Public Utilities to move for the
limited purpose of seeking clarification from the FERC on
whether the December 19, 2002 Discovery Order was intended to
include the consideration of the sale of electricity to Clark
Public Utilities that is at issue in the Puget Sound Proceeding.
Otherwise, the Motion is denied. (Kaiser Bankruptcy News, Issue
No. 24; Bankruptcy Creditors' Service, Inc., 609/392-0900)   

KENNY INDUSTRIAL: Committee Balks at Scope of AEG's Retention
The Official Committee of Unsecured Creditors of Kenny
Industrial Services, LLC and its debtor-affiliates objects to
the scope of employment of AEG Partners, LLC.  The Committee
clarifies that it does not object, per se, to the retention of
AEG as a financial consultant to the Debtors.  However, the
scope of AEG's retention should reflect the goals of the Debtors
in these cases -- to liquidate their assets and maximize
recoveries for creditors.

Specifically, the Committee objects and notes that:

(A) the scope of AEG's retention should be limited to
     overseeing the sale process and managing the business in
     the interim period prior to the sale.

     All references in Adelman's affidavit of disinterestedness
     and in the Motion to "prospects," "long-term business
     plan," "alternative capital structures," "potential
     restructuring," "restructuring scenarios," "valuing
     securities, and "negotiation of a restructuring," must be
     deleted because these are not appropriate in these cases
     given the liquidating posture of these companies and the
     pending sale.

(B) the Debtors must determine whether AEG is an officer of the
     Debtors or is being retained as a professional.   As a
     professional, the indemnity provisions of the retention
     agreement may not be appropriate.

(C) the Committee objects to the confidentiality provision of
     the retention agreement since confidentiality has not been
     extended to the Committee, or its advisors and counsel.

     The Committee requests that the provision be modified to
     that confidentiality flows to the Committee.

(D) the Committee requests that AEG's weekly invoices be served
     upon Committee counsel, and the Order should reflect that
     the Committee specifically reserve their rights to object
     to any fees of AEG which the Committee deems to be
     unreasonable, excessive or for services beyond the scope of
     AEG's retention.

Kenny Industrial Services is a provider of comprehensive
industrial preservation and maintenance services, including
chemical cleaning, waste separation and minimization,
fireproofing, insulation, identification and tagging, and
concrete restoration.  The Company with its debtor-affiliates
filed for chapter 11 protection on February 3, 2003 (Bankr. N.D.
Ill. Case No. 03-04959).  James A. Stempel, Esq., and Ryan
Blaine Bennett, Esq., at Kirkland & Ellis represent the Debtors
in their restructuring efforts.  When the Company filed for
protection from its creditors, it listed $70,189,327 in total
assets and $102,883,389 in total debts.

KEY3MEDIA: Committee & Thomas Weisel Agree to Plan Outline
Key3Media Group, Inc. (OTCBB: KMEDQ.OB), the world's leading
producer of information technology tradeshows and conferences,
announced that the Company and Thomas Weisel Capital Partners
have reached an agreement in principle with the Official
Committee of Unsecured Creditors concerning the terms of the
Company's reorganization plan.

Under the terms of the agreement, general unsecured creditors
will receive a pro rata distribution of $2.5 million in cash,
40% of the net proceeds of an insurance claim up to a maximum of
$4 million, warrants to purchase up to 5% of the reorganized
company's equity with a strike price at the reorganization
value, and potential additional minor assets that remain subject
to final negotiation.  Thomas Weisel Capital Partners further
has agreed to forego its pro rata share of the foregoing
distributions, to which it otherwise would be entitled by reason
of its holding approximately $110 million face amount of the
Company's subordinated notes.

On March 26, 2003, Key3Media and Thomas Weisel Capital Partners
reached agreement with holders of Key3Media's senior secured
bank debt on the terms of a plan of reorganization. With the
approval of the Committee of Unsecured Creditors, Key3Media now
has the support of substantially all of its creditor
constituencies and will file its amended reorganization plan
shortly for the Court's approval at a hearing in early June

"With the full support of our secured creditors and the Official
Committee of Unsecured Creditors now in place, we have cleared
the last major hurdle to a successful reorganization of the
Company and expect to receive Court approval of our plan within
60 days," said Fredric D. Rosen, Chairman and CEO of Key3Media.
"In parallel with our progress in reorganizing the Company, we
are securing solid participation from customers for all our
conferences and tradeshows and continuing to deliver the highest
value to all exhibitors and attendees."

Commenting on the reorganization process, Lawrence B. Sorrel,
Managing Partner of Thomas Weisel Capital Partners, said, "We're
pleased that Key3Media and substantially all of its creditors
have reached agreement, paving the way for a smooth and swift
reorganization of the Company. Key3Media will emerge from
Chapter 11 with renewed financial strength and well positioned
for long-term growth in the global IT tradeshow and conference

All Key3Media tradeshows and conferences are continuing as
scheduled, including NetWorld+Interop Las Vegas (April 27-May
2), JavaOne San Francisco (June 9-13), Seybold Seminars San
Francisco (September 22-25), and COMDEX Fall in Las Vegas
(November 15-20).

On February 3, 2003, Key3Media announced a plan of
reorganization, backed by investment funds managed by Thomas
Weisel Capital Partners, which own approximately 68% of
Key3Media's bank debt and approximately 38% of its bonds (11.25%
senior subordinated notes due 2011). Through the reorganization,
Key3Media will reduce its total debt by 87% from approximately
$372 million to $50 million and eliminate all of its existing
preferred stock and common equity. Annual interest expense will
be cut from approximately $38 million to $3.4 million.

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

Thomas Weisel Capital Partners is the merchant banking affiliate
of the investment firm Thomas Weisel Partners LLC. TWCP's
flagship fund, Thomas Weisel Capital Partners, L.P., is a $1.3
billion private equity fund with backing from leading
institutional investors and a current portfolio of over 30
companies primarily focused in the growth sectors of the
economy, including media and communications, information
technology and healthcare.

MAGELLAN HEALTH: Court Approves Interim Compensation Procedures
Magellan Health Services, Inc., and its debtor-affiliates sought
and obtained a Court order establishing an orderly, regular
process for allowance and payment of interim compensation and
reimbursement of expenses for attorneys and other professionals
whose services are authorized by the Court pursuant to Sections
327 or 1103 of the Bankruptcy Code and who will be required to
file applications for allowance of compensation and
reimbursement of expenses pursuant to Sections 330 and 331 of
the Bankruptcy Code.  In addition, the Debtors also obtained an
order establishing a procedure for reimbursement of reasonable
out-of-pocket expenses incurred by members of any statutory
committees appointed in these cases.

Stephen Karotkin, Esq., at Weil Gotshal & Manges LLP, in New
York, informs the Court that there are two categories of
professionals who will be required to submit interim and final

  A. separately retained Chapter 11 professionals; and

  B. those ordinary course professionals whose fees and expenses
     exceed the limitations set forth in the Ordinary Course

Payment of compensation and reimbursement of expenses of
Professionals will be structured as:

  A. On or before the 20th day of each month following the month
     for which compensation is sought, each Professional seeking
     compensation will serve a monthly statement, by hand or
     overnight delivery, on:

       (i) Magellan, 6950 Columbia Gateway Drive, Columbia,
           Maryland 21046 (Attn: Megan M. Arthur, Esq.);

      (ii) counsel to the Debtors, Weil, Gotshal & Manges LLP,
           767 Fifth Avenue, New York, New York 10153 (Attn:
           Stephen Karotkin, Esq.);

     (iii) the Office of the United States Trustee, 33 Whitehall
           Street, 21st Floor, New York, New York 10004;

      (iv) counsel to any statutory committee appointed in these
           cases; and

       (v) counsel to the Debtors' prepetition lenders.

  B. The monthly statement need not be filed with the Court and
     a courtesy copy need not be delivered to chambers, as this
     procedure is not intended to alter the fee application
     requirements outlined in Sections 330 and 331 of the
     Bankruptcy Code.

  C. Notwithstanding the submission of the interim monthly fee
     statements, all professionals will serve and file interim
     and final applications for approval of fees and expenses in
     accordance with the relevant provisions of the Bankruptcy
     Code, the Federal Rules of Bankruptcy Procedure, and the
     Local Rules for the United States Bankruptcy Court,
     Southern District of New York.

  D. Each monthly fee statement must contain a list of the
     individuals and their titles -- e.g., attorney, accountant,
     or paralegal -- who provided services during the statement
     period, their billing rates, the aggregate hours spent by
     each individual, a reasonably detailed breakdown of the
     disbursements incurred and contemporaneously maintained
     time entries for each individual in increments of 1/10 of
     an hour.

  E. Each party receiving a statement will have at least 15 days
     after its receipt to review it and, in the event that the
     party desires to interpose an objection to the compensation
     or reimbursement sought in a particular statement, the
     party should, by no later than the 35th day following the
     month for which compensation is sought, serve on the
     Professional whose statement is objected to, and the other
     persons designated to receive statements, a written "Notice
     Of Objection To Fee Statement," setting forth the nature of
     the objection and the amount of fees or expenses at issue.

  F. At the expiration of the 35-day period, the Debtors will
     promptly pay 80% of the fees and 100% of the expenses
     identified in each monthly statement to which no objection
     has been served.

  G. If the Debtors receive an objection to a particular fee
     statement, they will withhold payment of that portion of
     the fee statement to which the objection is directed and
     promptly pay the remainder of the fees and disbursements.

  H. Similarly, if the parties to an objection are able to
     resolve their dispute following the service of a Notice Of
     Objection To Fee Statement and if the party whose statement
     was objected to serves on all of the parties a statement
     indicating that the objection is withdrawn and describing
     in detail the terms of the resolution, then the Debtors
     will promptly pay that portion of the fee statement which
     is no longer subject to an objection.

  I. All objections that are not resolved by the parties will
     be preserved and presented to the Court at the next interim
     or final fee application hearing to be heard by the Court.

  J. The service of an objection will not prejudice the
     objecting party's right to object to any fee application
     made to the Court in accordance with the Bankruptcy Code on
     any ground whether or not raised in the objection.
     Furthermore, the decision by any party not to object to a
     fee statement will not be a waiver of any kind or prejudice
     that party's right to object to any fee application
     subsequently made to the Court in accordance with the
     Bankruptcy Code.

  K. Commencing with the period ending June 30, 2003 and at
     four-month intervals thereafter or at any other time
     convenient to the Court, each of the Professionals will
     file with the Court and serve on the parties a request for
     interim Court approval and allowance, pursuant to Section
     331 of the Bankruptcy Code, of the compensation and
     reimbursement of expenses sought in the fee statements
     filed during the period.  Each Professional will file its
     Interim Fee Application within 45 days after the end of the
     Interim Fee Period for which the request seeks allowance of
     fees and reimbursement of expenses.  Each Professional will
     file its first Interim Fee Application on or before
     August 15, 2003, and the first Interim Fee Application
     should cover the Interim Fee Period from the Petition Date
     through and including June 30, 2003.

  L. Any Professional who fails to file an application seeking
     approval of compensation and expenses previously paid under
     this Order when due:

      (i) will be ineligible to receive further monthly payments
          of fees or expenses as provided until further Court
          order; and

     (ii) may be required to disgorge any fees paid since
          retention or the last fee application, whichever is

  M. The pendency of an application to the Court requesting a
     determination that payment of compensation or reimbursement
     of expenses was improper as to a particular statement, or
     entry of an order to this effect, will not disqualify a
     Professional from the future payment of compensation or
     reimbursement of expenses, unless otherwise ordered by the

  N. Neither the payment of, nor the failure to pay, in whole or
     in part, monthly compensation and reimbursement will have
     any effect on this Court's interim or final allowance of
     compensation and reimbursement of expenses of any

  O. Counsel for each official committee may, in accordance with
     the procedure for monthly compensation and reimbursement of
     Professionals, collect and submit statements of expenses,
     with supporting vouchers, from members of the committee it

Each Professional may seek, in its first request for
compensation and reimbursement of expenses, compensation for
work performed and reimbursement for expenses incurred during
the period beginning on the date of the Professional's retention
and ending on March 31, 2003.  Accordingly, the initial monthly
statements seeking payment of interim compensation and
reimbursement of expenses must be served on or before April 20,

Mr. Karotkin believes that the procedures will enable the
Debtors to closely monitor the costs of administration, maintain
a level cash flow, and implement efficient cash management
procedures. Moreover, these procedures will also allow the Court
and the key parties-in-interest to insure the reasonableness and
necessity of the compensation and reimbursement sought pursuant
to these procedures. (Magellan Bankruptcy News, Issue No. 4:
Bankruptcy Creditors' Service, Inc., 609/392-0900)  

Magellan Health Services' 9.375% bonds due 2007 (MGL07USA1) are
trading at about 83 cents-on-the-dollar, says DebtTraders. See  
real-time bond pricing.

MASSEY ENERGY: Brings-In Thomas Dostart as New General Counsel
Massey Energy Company (NYSE: MEE) has hired Thomas J. Dostart,
47, to fill the positions of Vice President, General Counsel &
Secretary.  Mr. Dostart currently serves as General Counsel &
Assistant Secretary for Alliance Coal, LLC and its subsidiaries
in Lexington, Kentucky.  Mr. Dostart will replace R. Eberley
Davis, who has chosen to continue residing in Lexington,
Kentucky for personal reasons.

Mr. Dostart received his law degree from The University of Iowa
in 1980, where he served as Managing Editor for the Iowa Law
Review.  He received his undergraduate accounting, finance and
economic degrees in 1977 from Iowa State University, and is a
Certified Public Accountant.  Mr. Dostart's career prior to
joining Alliance in 1997 included serving as Vice President,
General Counsel & Secretary for National Auto Credit, Inc.
(formerly Agency Rent-A-Car), as an attorney with Amoco
Corporation and Diamond Shamrock, Inc., as an attorney with the
law firms of Jones, Day, Reavis & Pogue and Arter & Hadden,
and as a law clerk for the Iowa Supreme Court.

Mr. Dostart will report to James L. Gardner, Massey's Executive
Vice President & Chief Administrative Officer, and will be based
in the Charleston, West Virginia offices of Massey Coal
Services.  While Mr. Dostart will assume his new positions
effective May 5, Mr. Davis has agreed, at the request of the
Company, to remain for a brief transition period.  "We are sorry
to lose Eb Davis," said Don L. Blankenship, Massey Chairman and
CEO, "and we wish him the very best.  We are very pleased to
welcome Tom to Massey and believe we will benefit significantly
from the breadth of his legal and other experience, including
the years he has spent in the coal industry."

Massey Energy Company, headquartered in Richmond, Virginia, is
the fourth largest coal producer by revenue in the United

As reported in Troubled Company Reporter's December 4, 2002
edition, Standard & Poor's lowered its long-term corporate
credit rating on coal mining company Massey Energy Co., to non-
investment-grade 'BB' from 'BBB-' based on concerns regarding
the Richmond, Virginia-based company's access to capital
markets. Standard & Poor's said that it has also withdrawn its
'A-3' short-term corporate credit and commercial paper ratings
on the company.

The company has $585 million in debt outstanding. The current
outlook is developing. A developing outlook indicates that the
ratings could be raised, lowered, or affirmed.

Standard & Poor's said that at the same time it has assigned its
'BB+' senior secured bank loan rating to Massey's $400 million
of secured revolving credit facilities.

Massey Energy Co.'s 6.950% bonds due 2007 (MEE07USR1) are
trading at about 85 cents-on-the-dollar, DebtTraders says. See
real-time bond pricing.

MERRIMAC PAPER: Asks Court to Extend Schedule Filing Deadline
Merrimac Paper Company, Inc., and its debtor-affiliates need
more time to prepare and deliver comprehensive and coherent
schedules of assets and liabilities, statements of financial
affairs and lists of executory contracts and unexpired leases
required under 11 U.S.C. Sec. 521(1).  

The Debtors believe that due to the size and complexity of the
Debtors' operations and the volume of the information required,
they will not be able to complete the Schedules and Statements
within the current deadline.  Consequently, the Debtors ask the
U.S. Bankruptcy Court for the District of Massachusetts to give
them until April 16, 2003 to file their Schedules and

Merrimac Paper Company, Inc., makes a wide range of Kraft
specialty and technical papers in any color.  The Company files
for chapter 11 protection on March 17, 2003 (Bankr. Mass. Case
No. 03-41477).  Andrew G. Lizotte, Esq., at Hanify & King
represents the Debtors in their restructuring efforts.  When the
Company filed for protection from its creditors, it listed debts
and assets of over $100 million.

MESABA HOLDINGS: Aviation Unit Slashes 33 Management Positions
Mesaba Aviation, Inc., a subsidiary company of Mesaba Holdings,
Inc. (Nasdaq:MAIR), announced the elimination of 33 management
positions as a result of declining flight activity from Fiscal
Year 2003 to what is forecasted in Fiscal Year 2004. This
decline reflects the current economic conditions in the airline
industry and lower consumer demand.

The positions affected include both staffed and open positions.
The airline has reduced its management headcount to 312 from
345, a reduction of nearly 10 percent. All affected employees
were assisted through a package of severance pay, benefits and
outplacement services.

Mesaba also plans to eliminate approximately 50 positions from
its non-management workforce over the next six months, through a
combination of furloughs and voluntary leaves. In addition,
Mesaba is also freezing all management base pay in Fiscal Year
2004, which began on April 1, 2003.

"We made these difficult choices based on our forecasted flight
activity," said John Spanjers, Mesaba Aviation's president and
chief operating officer. "The decisions are an acknowledgement
of the challenges the industry faces and our need to survive
amid a very difficult environment."

Mesaba Aviation, Inc., d/b/a Mesaba Airlines, operates as a
Northwest Jet Airlink and Northwest Airlink partner under
service agreements with Northwest Airlines. Currently, Mesaba
Aviation serves 111 cities in 26 states and Canada from
Northwest's and Mesaba Aviation's three major hubs, Detroit,
Minneapolis/St. Paul, and Memphis. Mesaba Aviation operates an
advanced fleet of 106 regional jet and jet-prop aircraft,
consisting of the 69 passenger Avro RJ85 and the 30-34 passenger
Saab SF340.

Mesaba Holdings, Inc., is traded under the symbol MAIR on the
NASDAQ National Market. More information about Mesaba Airlines
is available on the Internet at:

MIRANT CORP: S&P Lowers Credit & Sr. Unsec. Debt Ratings to B
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured debt ratings on energy provider Mirant
Corp., and its subsidiaries to 'B' from 'BB'. The ratings were
placed on CreditWatch with negative implications.

Atlanta, Georgia-based Mirant has about $9.7 billion in debt,
including lease-related debt.

"The rating actions follow Standard & Poor's conclusion that
Mirant's creditworthiness has deteriorated materially due to
depressed power prices, high leverage, and insufficient cash
resources to meet debt obligations over the next two years,"
said Standard & Poor's credit analyst Terry Pratt.

The CreditWatch placement reflects uncertainty about the outcome
of Mirant's efforts to restructure debt in advance of the mid-
July 2003 maturity of a $1.125 billion term loan. The continuing
delay in the release of Mirant's audited financial statements is
also a factor in the placement of the company on CreditWatch
with negative implications.

Standard & Poor's assigns the same ratings to Mirant, Mirant
Americas Generation Inc., Mirant Americas Energy Marketing L.P.,
and Mirant Mid-Atlantic LLC given the limited structural
separation between the entities and the integration of

Standard & Poor's expects to resolve the CreditWatch over the
next three months, pending release of the company's audited
statements and developments in the company's efforts to
restructure its debt to improve its financial position and

Mirant is among the world's largest competitive energy
developers and providers. Mirant owns or controls more than
21,500 MW of electricity generation capacity in the U.S., the
Caribbean, and Asia. Mirant is among the largest suppliers of
electric power in the U.S. and one of the largest marketers of
natural gas in the U.S.

NATIONAL CENTURY: Court Approves Stipulation with Silver Moves
On December 4, 2002, the Silver Moves Debtors obtained an order
from the Florida Bankruptcy Court granting them authority to use
certain cash collateral.  The Order provides that the Silver
Moves Debtors were entitled to use the proceeds of certain non-
purchased accounts receivable and postpetition accounts
receivable and postpetition accounts from the applicable lockbox
accounts maintained at The Huntington National Bank on behalf of
the Silver Moves Debtors.

Furthermore, the December 4 Order is subject to a final hearing
on the Silver Moves Debtors' Motion, and subject to review of
the Bankruptcy Court for the Southern District of Ohio.

The National Century Financial Enterprises Debtors and the
Silver Debtors have reached an agreement as to the Silver Moves
Debtors' interim use of cash collateral. The agreement is set
forth in the Order Granting Debtors' Emergency Motion for
Authority to use Cash Collateral to be entered in the Florida
Bankruptcy Court.

Also, the Silver Moves Debtors have filed an Emergency Motion to
Modify the Automatic Stay in the NCFE Debtors' Chapter 11 cases.
The Motion seeks relief from automatic stay and other orders of
the Court as it deems necessary to implement the terms of the
Interim Cash Collateral Order on an emergency basis from the

The parties entered into a stipulation to allow the Silver Moves
Debtors' use of the cash collateral.  Upon consideration, the
Court approves these terms:

  (1) The NCFE Debtors are authorized to take all actions
      necessary or appropriate to implement the Interim Cash
      Collateral Order; and

  (2) The automatic stay imposed by Section 362 of the
      Bankruptcy Code, and any other orders or injunctions that
      have been or may be entered by the Court are modified to
      the extent necessary to allow the parties to implement
      the Interim Cash Collateral Order.  Neither any provision
      of this Stipulation and Agreed Order nor the Silver Moves
      Debtors' entry into this Stipulation and Agreed Order will
      be deemed a submission by the Silver Moves Debtors to the
      jurisdiction of the Court. (National Century Bankruptcy
      News, Issue No. 13; Bankruptcy Creditors' Service, Inc.,

NATIONAL STEEL: U.S. Steel Reaches New Labor Agreement with USWA
United States Steel Corporation (NYSE: X) and the United
Steelworkers of America (USWA) announced a tentative agreement
on a new progressive labor contract covering the USWA-
represented plants of both U. S. Steel and the facilities now
owned by bankrupt National Steel Corporation. The agreement,
which is subject to ratification, is modeled after a pattern
contract developed by the USWA that has been adapted to U. S.
Steel's unique circumstances.

Commenting on the announcement, U. S. Steel Chairman and Chief
Executive Officer Thomas J. Usher said, "This innovative
agreement builds value for our employees and the employees of
National Steel while providing us the flexibility to staff and
operate our facilities on a world competitive basis. The
agreement also allows us to address critical issues related to
steel companies in bankruptcy in a humane way. The leadership of
the USWA was instrumental in reaching this agreement at this
critical stage in the domestic steel industry's history.

"This groundbreaking agreement moves us another step closer to
acquiring National Steel. With this labor contract, antitrust
clearance and our strong liquidity position, we look forward to
participating in the upcoming bankruptcy auction. We continue to
believe that our acquisition of National's assets is the best
solution for National's employees, communities, customers,
suppliers and other stakeholders."

The new agreement, which expires September 2008, creates a more
variable and world competitive cost structure. It provides for a
workforce restructuring through which U. S. Steel expects to
achieve productivity improvements of at least 20 percent. The
agreement also enables U. S. Steel to significantly reduce its
employee and retiree healthcare expenses through the
introduction of variable cost sharing mechanisms. U. S. Steel
also anticipates realigning its non-represented staff in the
near-term so as to achieve significant productivity gains.
Implementation of the new agreement and related actions will
involve some upfront cash costs primarily for early retirement
incentives and will result in the recognition of significant
accounting charges related to pensions and other postretirement

In addition, the company has confirmed that ratification of the
contract would result in termination of the previously announced
letter of intent to sell its raw materials and transportation

Further details about the tentative agreement will not be made
available until after the ratification process is complete.

For more information about U. S. Steel, visit the Company's Web
site at

NATIONAL STEEL: ISG Chairman Ross Applauds New Labor Agreement
Wilbur L. Ross, Chairman of International Steel Group, Inc.,
congratulated the United Steelworkers of America and US Steel
Corp on their tentative labor agreement regarding National Steel

Mr. Ross said: "This is another step toward the industry
rationalization that President Bush requested when he announced
the steel tariffs last year. Over the next 24 months a few large
and globally competitive integrated steel companies will evolve
and the less efficient facilities will be closed. Our relatively
unleveraged and legacy-free financial position and already
successful implementation of our new labor agreement assure that
ISG will continue to be the lowest cost integrated steel
producer in the United States."

NORTHWEST AIRLINES: Will Hold Q1 Earnings Conference Call Wed.
Northwest Airlines (NASDAQ:NWAC) will conduct a live audio
webcast of its conference call with the financial community and
news media on Wednesday, April 16, 2003 at 11:30 a.m. EDT to
discuss the company's first quarter financial and operating
results. The webcast can be accessed at

The webcast replay will be available through April 23, 2003.

Northwest Airlines is the world's fourth largest airline with
hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and
Amsterdam, and approximately 1,500 daily departures. With its
travel partners, Northwest serves nearly 750 cities in almost
120 countries on six continents. In 2002, consumers from
throughout the world recognized Northwest's efforts to make
travel easier. A 2002 J.D. Power and Associates study ranked
airports at Detroit and Minneapolis/St. Paul, home to
Northwest's two largest hubs, tied for second place among large
domestic airports in overall customer satisfaction. Business
travelers who subscribe to OAG print and electronic flight
guides rated as the best airline Web site. Readers of
TTG Asia and TTG China named Northwest "Best North American

For more information pertaining to Northwest, media inquiries
can be directed to Northwest Media Relations at (612) 726-2331
or to Northwest's Web site at

Northwest Airlines' 10.150% bonds due 2005 (NWAC05USR2) are
trading at about 85 cents-on-the-dollar, says DebtTraders. See
for real-time bond pricing.

PACIFIC GAS: Fitch Keeps Watch on Defaulted Securities' Ratings
Fitch Ratings placed the credit ratings of Pacific Gas &
Electric Company's outstanding securities on Rating Watch
Positive pending a detailed review that will focus on the
outlook for continuing current payments and ultimate recovery.
Although PG&E has been in Chapter 11 bankruptcy proceedings
since April 2001, the debtor in possession has made current
payments on first mortgage bonds, senior unsecured notes, and
junior subordinated debentures that provide the credit support
for trust preferred securities since May 2002. Over the course
of its Chapter 11 proceedings, the utility amassed unrestricted
cash reserves of $3.3 billion as of Dec. 31, 2002. Two plans of
reorganization are currently under consideration by the US
Bankruptcy Court. Barring a settlement agreement emerging from
court ordered negotiations to achieve a compromise plan of
reorganization, it is unlikely that a reorganization plan will
be confirmed until late in the third quarter of 2003, at the
earliest. However, both plans of reorganization, contemplate
that all secured and unsecured debt and trust preferred
instruments would be paid in full.

The following ratings are affected:

      -- First mortgage bonds 'DDD';

      -- Preferred stock 'D'.

PEABODY ENERGY: Will Publish First Quarter Results on Wednesday
On Wednesday, April 16, 2003, Peabody Energy will announce the
results for the first quarter ended March 31, 2003.  A
conference call to review the results has been scheduled for
10 a.m. CDT on Wednesday, April 16.  The call will be open to
the public.

Participants may dial the following phone numbers:

             U.S. & Canada       (888) 428-4479
             International       (612) 288-0318

The call, replays and other investor data are also available
through the internet at

Peabody Energy (NYSE: BTU) is the world's largest private-sector
coal company, with 2002 sales of 198 million tons of coal and
$2.7 billion in revenues.  Its coal products fuel more than 9
percent of all U.S. electricity generation and more than 2
percent of worldwide electricity generation.

                          *    *    *

As previously reported in Troubled Company Reporter, Fitch
Ratings assigned a 'BB+' to Peabody Energy's proposed $600
million revolving credit facility and a new $600 million bank
term loan and a 'BB' to its proposed issuance of $500 million of
senior unsecured notes due 2013. The Rating Outlook remains
Positive. A portion of the proceeds from the new credit facility
and senior unsecured note offering will be used to fund the
repurchase of the company's existing 8-7/8% senior notes and
9-5/8% senior subordinated notes, which the company is seeking
to acquire through a tender offer commenced on Feb. 27, 2003. At
the completion of Peabody's refinancing the rating on its senior
subordinated notes, currently rated 'B+', will be withdrawn.

Since March 31, 1999, Peabody has reduced its total debt by over
$1.5 billion. At the end of FY2002 Peabody has a Debt/EBITDA of
approximately 2.5 times and an EBITDA/Interest of 4.0x.
Internally generated funds will be used for further debt
reduction. The ratings also incorporate the likelihood of tuck-
in acquisitions as the industry continues to consolidate.
However, any large acquisition that would substantially increase
leverage could affect the company's financial flexibility and
negatively impact Peabody's credit quality. Peabody's legacy
postretirement health care and pension liabilities are
significant but Fitch feels that these are manageable.

PEGASUS AVIATION: Fitch Drops Several Series 2000 Note Ratings  
Fitch Ratings has taken the following rating actions for Pegasus
Aviation Lease Securitization II, Series 2000 (PALS II) as
outlined below:

      -- Class A-1 notes are downgraded to 'BB-' from 'A';

      -- Class A-2 notes are downgraded to 'BB-' from 'A';

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

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

      -- Class D notes are downgraded to 'D' from 'CC';

All classes are removed from rating watch.

The downgrades reflect Fitch's expectation that PALS II's
aircraft lease cash flows will likely suffer further impairment.
In addition, current levels of cash flow are not sufficient to
pay interest on the class B, C and D notes. The class C and D
notes have already exhausted reserves, while the class B notes
have less than six months of reserves remaining.

PALS II originally issued $938 million of notes in March 2000,
while as of March 2003 $880 million of notes were outstanding.
PALS II is a Delaware trust formed to conduct limited
activities, including the buying, owning, leasing and selling of
commercial jet aircraft with a current portfolio of 28
commercial jet aircraft. Servicing is being performed by Pegasus
Aviation, Inc.

The ability of PALS II and many aircraft lessors to generate
lease cash flows has been impaired by depressed lease rates.
These rates are primarily the result of weak air travel markets,
resulting from the events of September 11th and the downturn in
the global economy.

The war with Iraq will likely further impair lease rates,
especially for certain Boeing and McDonnell Douglas aircraft.
PALS II cash flows have already been affected by its
concentrated exposure to some of these aircraft, including
B757s, B747s, B737 classics and the MD80 series. Although PALS
II collections have fallen almost one third from pre- 9/11
levels, Fitch expects collections to continue to fall in the
next 12-24 months. Primary risks include financially vulnerable
lessees in North and South America, as well as lease renewals in
2003 and in 2004 which will be subject to continued falling
lease rates. Contact: Donald H. Powell +1-212-908-0570 or Wendy
Cohn +1-212-908-0681, New York.

PENTON MEDIA: Will Publish First Quarter Results on May 1, 2003
Penton Media, Inc. (NYSE: PME) -- whose December 31, 2002
balance sheet shows a net capital deficit of about $61 million
-- will release first-quarter 2003 earnings on Thursday, May 1,
before the market open. Penton plans to hold a conference call
to discuss its results and business outlook on May 1 at 11 a.m.
Eastern Time. The call dial-in number is 973-633-1010. A
telephone replay of the conference call will be available
beginning the afternoon of May 1 until 6 p.m. Eastern Time,
Friday, May 8, by calling 1-402-220-1156 (no access code is

A live audio webcast of the phone call will be available through
the Investors section of Penton's Web site at The call also will be archived on the  

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

PHILIP MORRIS: Bonding Requirement Ups Credit Insurance Cost
The annual premium to insure $10 million of receivables owed by
Altria Group, Inc. (the parent company for Philip Morris USA,
Philip Morris International and Kraft Foods) against default for
a five-year term has bounced around in the $450,000 to $550,000
range over the past 10 days.  This is four to five times what
insurers charged a month ago according to pricing data J.P.
Morgan Chase & Co. distributes via Bloomberg.  In March, J.P.
Morgan and other insurers were asking $140,000 per year to
underwrite 5-year credit-default swaps.  

                   $10 Billion Judgment

On March 21, 2003, following a bench trial in Madison County,
Illinois, the Honorable Nicholas G. Byron entered a judgment in
Price (f/k/a Miles) v. Philip Morris, Cause No. 00-L-112 (Ill.
Cir. Ct. Mar. 21, 2003), finding that the tobacco company
violated the Illinois Consumer Fraud Act by misleading Illinois
consumers into thinking that "light" cigarettes described as
having "lowered tar and nicotine" were safer than their full-
flavored brethren and awarding:

     $7,100,500,000 to a class consisting of all persons
                    who purchased Philip Morris' Cambridge
                    Lights and Marlboro Lights cigarettes
                    in Illinois for personal consumption,
                    between the first date Philip Morris
                    placed those cigarettes into the stream
                    of commerce in 1971 and February 8,
                    2001, as compensatory damages
                    (including a 5% non-compounded
                    prejudgment interest component totaling

     $3,000,000,000 in punitive damages payable to the
                    State of Illinois;

            $11,385 to Plaintiff Sharon Price --
                    representing 92.3% of her total
                    Cambridge Lights purchases;

            $17,812 to Plaintiff Michael Fruth --
                    representing 92.3% of his total
                    Marlboro Lights purchases.

Judge Byron also approved a Verified Application of Class
Counsel for an Award of Attorney's Fees giving the Plaintiffs'
lawyers a 25% slice of the compensatory damage award after
finding that figure well within the range of what's normal in a
case like this.  

In summary, according to a report appearing in the Class Action
Reporter, the Price lawsuit claimed Philip Morris defrauded 1.1
million Illinois smokers by leading them to believe Marlboro
Lights and Cambridge Lights are safer than regular cigarettes.  
The plaintiffs argued that light cigarettes actually are more
harmful; partly, because of the way people smoke them to get
more nicotine per puff, and partly because the air vents on
light cigarettes affect their toxicity.  Expert witnesses were
called in the course of the seven-week trial to testify about
how bad light cigarettes are and to quantify Illinois consumers'
economic damages.  Philip Morris attorneys argued that the
company has never claimed light cigarettes are safer than
regular cigarettes.  Philip Morris claims the government labeled
light cigarettes safer, based on government testing.  The
company further contended that the smokers of light cigarettes
should not be awarded any money since they lost none, because
light cigarettes cost the same as regular cigarettes.  

              $13,100 Per Hour For the Lawyers

Class Action Reporter editors Enid Sterling and Aurora Fatima
Antonio sifted through the Fee Application and tabulate 135,500
lawyer-hours invested in the Price lawsuit by attorneys at
Korein and Tillery in St. Louis and Chicago, and Richardson,
Patrick, Westbrook & Brickman in Charleston, South Carolina,
over the past three years.  The Fee Application requested a 29%
slice of a $21 billion common fund -- compensation at a rate of
$44,280 per hour.  Philip Morris, the Class Action Reporter
relates, relied on a legal compensation expert who reviewed
detailed time records, awards in similar cases and interviewed
two attorneys at plaintiff firm Korein and Tillery, to suggest
that a lodestar approach (a reasonable hourly rate (in the $600
to $700 range for Mr. Tillery and his fellow senior partners)
multiplied by the number of hours spent providing actual,
reasonable and necessary legal services) would be more
appropriate.  Judge Byron's $1,775,125,000 award of attorneys'
fees proposes to pay the lawyers $13,100 per hour for their
work, Ms. Antonio calculates.  

"During the seven-week trial, a team of 17 lawyers and 30 staff
members worked seven days a week, usually for 18 hours a day,
including the time they spend in the courtroom," Ms. Sterling

In the event that any portion of the compensatory damage award
should remain unclaimed, Judge Byron, invoking the doctrine of
cy pres, directs that those funds be distributed to various law
schools, charities and the Illinois Bar Foundation.

A full-text copy of Judge Byron's 51-page Judgment is available
at no cost at:

               $12 Billion Supersedeas Bond

Judge Byron stayed execution of his Judgment for 30 days.  That
period expires Monday, April 21.  If Philip Morris wants a
further stay pending appeal, the tobacco company is required to
post a $12 billion bond in accordance with Illinois Supreme
Court Rule 305 according to Judge Byron's March 21 Judgment.  

"Philip Morris USA is not financially able to post the enormous
bond that the Madison County court has demanded," Denise F.
Keane, Senior Vice President and General Counsel for Philip
Morris says.

Stephen Tillery, Esq., at Korein and Tillery, says Philip Morris
is blowing smoke.  "Philip Morris would like the world to focus
on their financial woes rather than the court finding that more
than a million consumers of light cigarettes were defrauded,
many of whom will pay with their lives," Tillery says.

Illinois Attorney General Lisa Madigan was quoted in published
reports pointing out that "the bankruptcy threat is hollow and
that the proposed change to state law would unfairly privilege
the company."

"I think Philip Morris is doing all that they can to prevent
paying out money in verdicts and to the State of Illinois," Ms.
Madigan said. "If you look at the stock market and you look at
the stock price for Philip Morris, you'll see that they are not
on the verge of bankruptcy, and they continue to be a healthy
company -- although [it is] not healthy for us to use their

Philip Morris has pushed the Illinois General Assembly for
emergency legislation to limit the size of the bond it must
post.  While the legislature's taken no positive action, it
hasn't rejected Philip Morris' lobbying efforts to limit
Illinois' supersedeas bonding requirements to 10% of amounts
awarded in excess of $1 billion.  The Illinois Senate adjourned
yesterday until April 15.

George Lombardi, Esq., and Jeffrey Wagner, Esq., at Winston &
Strawn, serving as national defense counsel to Philip Morris,
have asked Judge Byron to reconsider and reduce the bonding
requirement.  In the event the Madison County Court refuses to
reduce the $12 billion bond, Messrs. Lombardi and Wagner have
asked for an additional 15-day stay after the trial court's
final rulings on its post-trial motion.  Those extra days are
necessary "to pursue appellate relief on the bond issue free
from the grave risk that immediate enforcement of the judgment
in this case will force a bankruptcy," Philip Morris says.

Messrs. Lombardi and Wagner outline their five-point legal
argument about why the $12 billion bond requirement is too high:

     (1) A stay of enforcement based upon terms with which
         PM USA can comply is required by the due process
         clauses of the federal and state constitutions and
         the Illinois Constitution's guarantee of the right
         to appeal a final judgment. [U.S. Const. amend.
         XIV; Ill. Const. art. I, Sec. 2; Ill. Const. art.
         VI, Sec. 6.]  PM-USA enjoys a right of appeal in
         connection with the judgment entered in this case,
         and the federal constitution prevents that right,
         once created, from being burdened to the extent
         that it becomes no more than a "meaningless
         ritual."  See Texaco Inc. v. Pennzoil Co. 784 F.2d
         at 1154.  

     (2) Illinois, "[s]ections 5 and 7 of article VI of the
         constitution of 1870 and section 6 of article VI
         of the constitution of 1970 confer upon an
         aggrieved litigant a constitutional right to an
         appeal from all final judgments of the trial
         court."  Hamilton Corp. v. Alexander, 53 Ill. 2d
         175, 177, 290 N.E.2d 589, 590 (1972) (emphasis
         added) (citing Braden & Cohn, The Illinois
         Constitution, an Annotated and Comparative
         Analysis, at 346).  Therefore, under Illinois law,
         PM-USA possesses a substantive right to appellate
         review of the judgment in this case -- a right that
         . . .  may not be unduly burdened.

     (3) Once a right to appeal has been created, the
         United States Constitution limits the ways in
         which that right may be abridged.  In short, the
         due process clause "impose[s] constitutional
         constraints on States when they choose to create
         appellate review."  Smith v. Robbins, 528 U.S.
         259, 270 (2000).  Having created a right to
         appeal, Illinois must "act in accord with the
         dictates of the Constitution-and in particular, in
         accord with the Due Process Clause" -- so as to
         ensure that an appeal is not reduced to the status
         of a "meaningless ritual."  Evitts v. Lucey, 469
         U.S. 387, 393-94, 401 (1985).  Although a state-
         created right of appeal may, of course, be
         regulated by various procedural requirements,
         those "[p]rocedural limitations may not . . .
         irrationally or arbitrarily impede access to the
         courts."  Carlson, Mandatory Supersedeas Bond
         Requirements -- A Denial of Due Process Rights?,
         39 Baylor L. Rev. 29, 31 (1987).  

     (4) As recognized by the Second Circuit, the
         application of a bankrupting security requirement
         effectively "render[s] [the] right to appeal . . .
         an exercise in futility" and a "meaningless ritual
         . . . robbed of any effectiveness."  Texaco, 784
         F.2d at 1154; see also Lindsey v. Normet, 405 U.S.
         56, 65 (1972) (otherwise valid security
         requirements might prove unconstitutional as
         "applied . . . in specific situations").  Here,
         because the threatened "injury pending appeal" is
         "bankruptcy or liquidation, a reversal [on appeal]
         will not undo the injury, which cannot be measured
         in damages and would in no event be recoverable."  
         Texaco, 784 F.2d at 1153.  "It is self-evident
         that an appeal would be futile if, by the time the
         appellate court considered [the] case, the appeal
         had by application of a bonding law been robbed of
         any effectiveness."  Id. at 1154.

     (5) Further, additional and entirely independent due
         process principles are implicated insofar as the
         judgment at issue includes a punitive damages
         component.  As a result of plaintiffs' punitive
         award, PM-USA enjoys an independent right to
         appellate review arising under federal law.  
         Because punitive damages "pose an acute danger of
         arbitrary deprivations of property," the United
         States Supreme Court has held that due process
         demands meaningful "judicial review" of punitive
         awards prior to a deprivation of property.  Honda
         Motor Co., Ltd. v. Oberg, 512 U.S. 415, 432
         (1992).  Just as it would unduly burden PM-USA's
         rights under state law, a refusal to stay
         enforcement would also place an undue burden on
         PM-USA's constitutional right to judicial review
         of the punitive damages award.  See Armstrong v.
         Manzo 380 U.S. 545, 552 (1965) (due process
         requires that an opportunity to be heard be
         satisfied by a hearing conducted "at a meaningful
         time and in a meaningful manner").  Given that the
         punitive damages award here presents a risk of
         bankruptcy, that award is inherently suspect under
         Illinois law and clearly warrants meaningful
         review.  See Hazelwood v. Illinois Central Gulf
         Railroad, 114 Ill. App. 3d at 713, 450 N.E.2d at
         1207 (punitive damages "award which bankrupts the
         defendant is excessive").

Judge Byron has made it clear from the bench that he doesn't
want to kill the company.  Before closing his courtroom to the
public earlier this week, Judge Byron encouraged the parties to
reach a consensual resolution of the bonding issue.  "I see some
possibilities for resolving this matter.  What will be reached
will be reached on a consensual basis," Judge Byron said Tuesday
afternoon.  Security other than a traditional bond, perhaps a
pledge or guarantee of some kind from Altria, is one possible
option being talked about.  Another option may be placing
company assets into escrow.  

A hearing to consider knocking-down the bonding requirement
continues resumes today in Madison County.  

                    Potential MSA Default

"[B]ecause of the extraordinary amount of the bond presently
required by the Madison County trial judge," Ms. Keane
continues, "it is . . . uncertain whether Philip Morris USA will
be able to make" the $2.5 billion installment payment due on
April 15, 2003, pursuant to Section IX(c) of the Master
Settlement Agreement with 46 states, the District of Columbia,
the Commonwealth of Puerto Rico, Guam, the U.S. Virgin Islands,
American Samoa and the Northern Marianas, dated November 23,
1998 to settle the asserted and unasserted health care cost
recovery and certain other claims of those states (similar
claims brought by Mississippi, Florida, Texas, and Minnesota
were settled prior to 1998).  A full-text copy of the MSA is
available at no charge at:

                  Credit Ratings Hammered

Fitch Ratings, citing concerns about the Companies' immediate
financial flexibility and the introduction of a bankruptcy risk,
yanked its A ratings this week.  Standard & Poor's downgraded
its ratings on $23.3 billion of Altria Group debt and says it'll
cut the ratings further -- below investment grade -- unless the
bonding requirement is reduced.  

Fitch rates Altria Group, Inc., Kraft Foods, Inc., and Philip
Morris Capital Corp. senior unsecured obligations at BBB+, and
hung its F2 rating on all commercial paper obligations,
including commercial paper issued by Altria Finance (Cayman
Islands) Ltd.  S&P assigned its BBB+ corporate credit ratings to
Altria and Philip Morris Capital -- three nitches above junk
bond status.  S&P cut Kraft Foods' rating to A-.

                    Kraft Taps Bank Lines

Kraft Foods Inc. (NYSE:KFT), in the wake of its rating
downgrade, lost access to the commercial paper market. Kraft has
started tapping into its revolving credit facilities to finance
its day-to-day working capital requirements and repay commercial
paper obligations as they become due.  Information obtained from
http://www.LoanDataSource.comshows that Kraft and its  
subsidiaries maintain two major credit lines with various
lending syndicates:

     * a $3.0 billion 364-day revolving credit facility
       expiring in July 2003; and

     * a $2.0 billion, 5-year revolving credit facility
       expiring in July 2006.

These credit facilities, http://www.LoanDataSource.comreports,  
require Kraft to maintain a minimum net worth of $18.2 billion.  
There are no other financial tests, credit rating triggers or
any provisions that could require Kraft to post collateral for
the benefit of the Lenders.  

Kraft says it is not a party to, and has no exposure to, its
sister company's tobacco litigation problems.  Kraft is
approximately 84% owned by Altria.  Altria provides Kraft with
various services, including planning, legal, treasury,
accounting, auditing, insurance, human resources, office of the
secretary, corporate affairs, information technology and tax
services, and receives about $300 million each year for those
services.  In December, 2000, Kraft acquired Nabisco at a cost
of approximately $19.2 billion.

Kraft is highly profitable and projects 2003 full year results
to be in the $2.10 to $2.15 range.  

               Nixing the Punitive Damage Award

Judge Byron says that an award of punitive damages is
appropriate in this case.  The Plaintiffs asked for $14.2
billion and Judge Byron awarded $3 billion.  

Judge Byron says his computation is based on Philip Morris'
"true net worth" . . . and "a straightforward accounting
calculation based upon Philip Morris USA's operating income
[establishes Philip Morris'] true net worth to be $50 billion.
The Plaintiffs offered expert testimony that, based on Altria's
market capitalization, the value is closer to $25 billion.  
Judge Byron finds that the true value or worth is somewhere
between those two numbers.

Philip Morris doesn't care what number Judge Byron picked.  Any
amount of punitive damages payable to the State of Illinois is
barred, the company says, because all of the States claims were
settled, once and for all, under the MSA.  Philip Morris has
taken this discrete issue to the Cook County Circuit Court
(which has exclusive jurisdiction over such matters) and
obtained a preliminary indication from Judge James F. Henry that
any punitive damage award payable to the State is improper.  At
a brief hearing last Tuesday, Judge Henry said, "I believe, as a
preliminary matter, the claim (for damages) was released" by the
state as a result of its 1998 agreement with Philip Morris USA
and other major U.S. cigarette companies to settle its Attorney
General's lawsuit.

A full-text copy of the MSA is available at no charge at:

Under the MSA, each Settling State (including, but not limited
to, such settling state's agencies, subdivisions and officials),
as well as other releasing parties as specified in the
agreement, released all participating manufacturers and their
past, present and future affiliates, the respective officers,
directors, employees, retailers, and distributors of the
foregoing, and other released parties as specified in the
agreement: (i) with respect to past conduct, acts or omissions,
from any and all civil claims in any way related to the use,
sale, distribution, manufacture, development, advertising,
marketing or health effects of, to the exposure to, or to
research, statements or warnings regarding, tobacco products
(with the exception of certain specified tax or license-fee
related claims as specified in the agreement); and (ii) with
respect to future conduct, acts or omissions, from monetary
civil claims in any way related to the use of or exposure to
tobacco products manufactured in the ordinary course of
business, including without limitation any future claims for
reimbursement of health-care costs allegedly associated with the
use of or exposure to tobacco products.

Meyer G. Koplow, Esq., at Wachtell, Lipton, Rosen & Katz in New
York, represents Philip Morris in connection with the MSA.  R.J.
Reynolds Tobacco Company (represented by Arthur F. Golden, Esq.,
at Davis Polk & Wardwell); Brown & Williamson Tobacco
Corporation (represented by Stephen R. Patton, Esq., at Kirkland
& Ellis); Lorillard Tobacco Company; Liggett Group Inc.
(represented by Aaron Marks, Esq., at Kasowitz, Benson, Torres &
Friedman, LLP); and Commonwealth Brands, Inc. (represented by
William Jay Hunter, Jr., Esq., at Middleton & Reutlinger)
participate with Philip Morris under the MSA.  Each Original
Participating Manufacturer is severally liable for its
obligations under the MSA.  Philip Morris is not required under
the MSA to pay any portion of any payment greater than its
Relative Market Share.

                    The Bankruptcy Threat

William S. Ohlemeyer, Philip Morris USA vice president and
associate general counsel, says a $1.2 billion surety bond is
the largest PM USA can likely obtain.  Maybe, Mr. Ohlemeyer
suggests, that can be stretched to $1.5 billion, but certainly
no more.

Under rules adopted by the Illinois Supreme Court, Judge Byron
has the authority to reduce the amount of the bond that must be
posted in order to stay execution of the judgment and allow the
company to proceed with its appeal. Philip Morris stands firm on
the principle that the right to appeal an adverse verdict is
guaranteed by the U.S. Constitution and the Illinois

"Philip Morris USA is not the only one concerned about its
constitutionally-guaranteed due process rights. Numerous other
groups -- including some of the nation's most respected media --
have questioned why the company should be required to post a
potentially-bankrupting bond," Mr. Ohlemeyer said earlier this

"This is a case where Judge Byron, at one point in the trial,
observed he might have to flip a coin to decide the outcome.  
It's clearly a case where the company deserves to have its
appeal considered on the merits of the case.

"All we are seeking is the right guaranteed to any defendant who
receives an adverse verdict to have that decision reviewed by
appellate courts. Basic fairness, and the law, demands that we
receive such an opportunity in this case," Mr. Ohlemeyer

"The $12 billion appeal bond . . . is fair and reasonable and
should not be lowered," Stephen Tillery, Esq., lead plaintiffs'
attorney in the Price case, says in response to Philip Morris'
attempts to reduce the bond to a maximum of $1.5 billion.  
"Every other company that loses a suit at trial in Illinois has
to post such a bond to ensure that the plaintiffs eventually
receive compensation, and there is no reason to grant Philip
Morris special treatment in this case. Furthermore, despite
Philip Morris' financial scare tactics, the court took into
account the company's ability to pay, based on confidential
financial documents Philip Morris filed with the court, when
determining the amount of the judgment.  The reason Illinois for
decades has required appeal bonds is to ensure that defendants
can pay when their appeals are exhausted.  If the judgment in
the Miles consumer fraud suit is appealed, we are confident that
we will prevail. We need to guarantee that Philip Morris will
have the wherewithal to pay the plaintiffs when we win, and the
only way to do that is through a bond," Mr. Tillery said.  

Mr. Tillery relates that based on confidential financial
documents filed with the court -- which Philip Morris refuses to
make public -- and independent analysis of its public financial
statements -- the judge clearly believed that parent company
Altria can pay the $12 billion bond and make its payments to
states under the Master Settlement Agreement.  He called Philip
Morris's threats to suspend payments to states and possibly file
for bankruptcy "financial scare tactics designed to win special
judicial treatment or special interest legislation for the

Altria has no legal obligation to post a bond for Philip Morris
or otherwise guarantee and of Philip Morris' obligations.  

Attorneys general from 37 states and U.S. territories filed a
friend-of-the-court brief Monday, asking Judge Byron to relax
the bonding requirement.  The States don't want their annual
payouts under the MSA to be jeopardized.  

           Looking Ahead to an Appeal on the Merits

Philip Morris raised 27 affirmative defenses in the Madison
County trial court.  Judge Byron rejected and dismissed each
one.  Two issues will take center stage if and when Philip
Morris gets the opportunity to take an appeal to a higher court:

     (A) Federal Preemption.  The Federal Cigarette
         Labeling and Advertising Act, 15 U.S.C. Sec. 1331,
         et seq., sets forth the precise warning that must
         be printed on each package of cigarettes sold in
         the United States, and in advertisements for those
         cigarettes.  The Federal Trade Commission
         regulates, and enforces, what may and may not be
         said in cigarette advertising.  Other courts,
         including the U.S. Supreme Court, have ruled that
         the federal labeling law prohibits states from
         requiring additional warnings, including those
         suggested by the plaintiffs in the Price case.  
         Philip Morris says that Judge Byron's conclusion
         that it has an "independent duty not to deceive
         under state law" improperly conflicts with FTC
         regulations and policies.  

     (B) Improper Class Certification.  Federal and state
         courts have almost uniformly rejected class
         actions in cigarette cases.  Since the landmark
         Castano decision in 1996, courts have rejected
         class actions in 27 separate decisions, while
         allowing only three cases to go to trial.  

                     Carbon Copy Lawsuit

Michael Brickman, Esq., at Richardson Patrick, observes that the
Philip Morris Judgment is the first ruling of its kind and will
"pave the way" for other similar cases currently pending across
the country.

Korein and Tillery and Richardson Patrick have a carbon copy
lawsuit against R.J. Reynolds Tobacco Company and R.J. Reynolds
Tobacco Holdings, Inc., pending before Judge Moran in Madison
County.  That case, captioned Turner v. R.J. Reynolds (a/k/a
Wallace v. R.J. Reynolds), Cause No. 00-L-113 (Ill. Cir. Ct.),
was tendered to the Madison County clerk a minute after the
Price complaint was filed.  

The RJR lawsuit is scheduled to go to trial in October, 2003, on
behalf of a class comprised of all persons who purchased Doral
Lights, Winston Lights, Salem Lights and Camel Lights, in
Illinois, for personal consumption, between the first date that
the tobacco companies sold Doral Lights, Winston Lights, Salem
Lights and Camel Lights through November 14, 2001.  Daniel F.
Kolb, Esq., Anne Berry Howe, Esq., and Matthew B. Stewart, Esq.,
at Davis, Polk & Wardwell, represent R.J. Reynolds Tobacco
Holdings, Inc., and Elizabeth Grove, Esq., at Jones, Day, Reavis
& Pogue represents R.J. Reynolds Tobacco Co.

PHOTRONICS INC: S&P Rates $125-Mill. Convertible Sub. Notes at B
Standard & Poor's Ratings Services assigned its 'B' rating to
Photronics Inc.'s pending sale of $125 million in convertible
subordinated notes due 2008. The new issue is expected to repay
outstanding higher-coupon debt, thereby reducing the company's
interest expense, and extending its maturity schedule, while
moderately increasing its cash balances. The company's banks are
likely to relax the covenants in Photronics' revolving credit

At the same time, Standard & Poor's affirmed its 'BB-' corporate
credit rating and its other ratings on Photronics. The outlook
is negative.

Photronics, which has the leading worldwide market share in the
semiconductor photomask industry, is based in Brookfield, Conn.
It had $308 million of debt outstanding, including capitalized
operating leases, at Jan. 31, 2003.

Photronics has a strong position in North America and Asia,
although its European presence is somewhat weaker than that of
competitors. Photomask's demand is somewhat less volatile than
that of other semiconductor sectors. "Still, increasing
complexity and higher costs of advanced masks have caused
chipmakers to reduce prototyping activity and their use of
backup "mask" sets, while industrywide pricing has become more
aggressive," stated Standard & Poor's credit analyst Bruce

Revenues have declined, to $81 million in the January 2003
quarter from $96 million in the year-earlier quarter. Still, the
company has controlled costs well, with EBITDA for the January
2003 quarter around $18 million, compared to $27 million in the
January 2002 period, also reflecting a continuing shift toward
higher-end products. Sales are expected to be flat, or up
moderately in the April quarter.

In general, profitability remains subject to the challenges
smaller companies can face in managing a global enterprise, the
inefficiencies of maintaining multiple small operating sites,
and increasingly aggressive competition between industry
leaders. Debt of $308 million including capitalized operating
leases increased to about 4.3x EBITDA for the January 2003
quarter, from 3.4x one year earlier, even though the company
repurchased moderate amounts of debt in the past few quarters.

Very limited marketplace visibility and rising pricing pressures
have led to declining revenues, weaker cash flows, and debt
protection measures that are marginal for the current rating.
Should weak financial measures continue beyond the near term,
ratings could be lowered.

PHYAMERICA PHYSICIAN: All Proofs of Claim Due Monday
The U.S. Bankruptcy Court for the District of Maryland directs
all creditors of PhyAmerica Physician Group, Inc., and its
debtor-affiliates to file their proofs of claim against the
Debtors on or before April 11, 2003, or be forever barred from
asserting their claims.

All Proofs of Claim must be received by the Debtors' Claims
Agent, AlixPartners LLC, before 4:00 p.m. on Monday.  Mailed or
hand-carried proofs must be addressed to:

      Baltimore Emergency Services/PhyAmerica
      c/o AlixPartners, LLC
      2100 McKinney Avenue, Suite 800
      Dallas, Texas 75201

Claims need not be filed if they are on account of:

      a. Claims already properly filed with the Clerk of the
         Bankruptcy Court;

      b. Claims not listed as disputed, contingent or

      c. Administrative expense claims on the Debtors;

      d. Claims already paid in full;
      e. Claims based exclusively upon ownership of Debtors'

      f. Claims by the Debtors' employees;

      g. Claims of one Debtor against another Debtor;

      h. Claims of any direct or indirect subsidiary of a debtor
         against another Debtor;

      i. Claims of any professional whose retention has been
         approved by the Court;

      j. Claims previously allowed by order the Court; or

      k. Claims by persons solely against any of the Debtors'
         non-debtor affiliates.

The Claims Agent may be contacted by telephone at 972-455-5559
for assistance with any questions concerning the filing, amount,
nature or processing of a proof of claim.   

PhyAmerica provides management services to physicians,
hospitals, and other health care entities. The company takes
care of business-related concerns such as billing and
collection; it also provides physician staffing, primarily to
emergency rooms. The debtors filed for Chapter 11 protection on
November 11, 2002, (Bankr. MD Case No. 02-67584). Martin T.
Fletcher, Esq., Paul M. Nussbaum, Esq., at Whiteford, Taylor &
Preston L.L.P and Thomas E. Lauria, Esq., John K. Cunningham,
Esq., and Frank L. Eaton, Esq., at White & Case LLP represent
the Debtors in their restructuring efforts. When the Debtors
filed for protection from its creditors, it disclosed total
assets of about $79 million and total debts of $248.6 million.

POLAROID CORP: Examiner Mandarino Hires Pachulski as Co-Counsel
Pursuant to Local Rule 83.5(c) and because the attorneys at
Proskauer which will appear in Polaroid Corporation and its
debtor-affiliates' Chapter 11 cases are yet to be admitted to
practice before the Delaware Bankruptcy Court, Examiner Perry M.
Mandarino needs to retain a Delaware local counsel. Accordingly,
the Examiner selected Pachulski, Stang, Ziehl, Young, Jones &
Weintraub, PC.

Mr. Mandarino states that Pachulski is uniquely able to act as
co-counsel to the Examiner because of its expertise, experience
and knowledge in practicing before this Court, its proximity to
the Court and its ability to respond quickly to emergency
hearings.  Pachulski's attorneys have played significant roles
in many of the largest and most complex cases involving
reorganization issues, including representing various trustees
and examiners.

By this application, Mr. Mandarino seeks the Court's authority,
pursuant to Section 327(a) of the Bankruptcy Code, to retain
Pachulski as co-counsel, nunc pro tunc to February 24, 2003.

As co-counsel, Pachulski will:

(a) provide legal advise with respect to its powers and duties
     as Examiner;

(b) prepare necessary applications, motions, answers, orders,
     reports and other legal papers on the Examiner's behalf;

(c) appear in Court and protect the interest of the Examiner
     before the Court; and

(d) perform all other legal services for the Examiner which
     may be necessary and proper in these proceedings.

To compensate Pachulski for its services, it will bill the
Debtors based on these hourly rates:

    Laura Davis Jones          $560
    Marc A. Beilinson           560
    Ellen M. Bender             425
    Rachel Lowy Werkheiser      280
    Camille E. Ennis            120

Laura Davis Jones, Esq., a shareholder in Pachulski, Stang,
Ziehl, Young, Jones & Weintraub PC, relates that these hourly
rates are subject to periodic adjustments to reflect economic
and other conditions.  Moreover, Pachulski will charge the
Debtors for certain expenses, which include, among other things,
telephone and telecopier toll, mail and express mail charges,
special or hand delivery charges, document retrieval,
photocopying charges, travel expenses, computerized research,
transcription costs and secretarial overtime.

Ms. Jones assures the Court that, except as disclosed in Court,
Pachulski has not represented the Debtors, their creditors,
equity security holders, or any other parties-in-interest, or  
its attorneys, in any matter relating to the Debtors or their
estates.  Accordingly, Pachulski is a "disinterested person" as
that term is defined in Section 101(14) of the Bankruptcy Code.
(Polaroid Bankruptcy News, Issue No. 35; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

RURAL/METRO: Southwest Ambulance Div. Wins New $25-Mil. Contract
Rural/Metro Corporation's (Nasdaq:RURL) Southwest Ambulance
division has been awarded a new multi-year contract to become
the exclusive ambulance provider for Dona Ana County, New
Mexico, including the greater Las Cruces area.

Under the four-year contract, which begins July 1, 2003,
Southwest Ambulance will provide all emergency and non-emergency
medical transportation services throughout the county. The
contract is valued at approximately $25 million over its four-
year term.

Jack Brucker, Rural/Metro President and Chief Executive Officer,
said, "This contract is another important step in the execution
of our growth strategy and reflects our ability to gain
favorable new market share while growing our existing service
areas. We look forward to expanding our Southwest division into
neighboring New Mexico and to serving the medical transportation
needs of this rapidly growing county."

Dona Ana County occupies approximately 3,800 square miles in
south-central New Mexico and is home to more than 180,000
residents. The county seat, Las Cruces, has been ranked as one
of the fastest-growing communities in the United States for the
past decade.

Dona Ana County Board of Commissioners voted unanimously Tuesday
to approve Southwest Ambulance's bid to replace the current
provider following a competitive bidding process. The contract
marks a significant expansion for Southwest Ambulance outside
the state of Arizona.

Barry Landon, President of Southwest Ambulance, said, "This
contract improves the ambulance system in Dona Ana County,
providing residents with additional ambulances and faster
response times. As a community partner, we'll work closely with
county and local fire departments to explore innovative ways to
improve public safety and enhance the delivery of emergency
services to residents."

Dona Ana County RFP Selection Committee Chairman Mark Frietze
said, "We chose Southwest because they will be a true community
partner and will improve the emergency response resources for
our residents. The proven experience and record of their team
will ensure that county residents receive the highest levels of

Rural/Metro Corporation, whose December 31, 2002 balance sheet
shows a total shareholders' equity deficit of about $160
million, provides emergency and non-emergency medical
transportation, fire protection, and other safety services in
approximately 400 communities throughout the United States. For
more information, visit the Rural/Metro Web site at  

Rural/Metro Corp.'s 7.875% bonds due 2008 (RURL08USR1) are
trading at about 70 cents-on-the-dollar, says DebtTraders. See
for real-time bond pricing.

SAGE LIFE: A.M. Best Hatchets Financial Strength Rating to B++
A.M. Best Co., has downgraded the financial strength rating to
B++ (Very Good) from A- (Excellent) of Sage Life Assurance of
America Inc (Wilmington, DE) and placed the rating under review
with negative implications.

This rating action follows Sage Life's reported sharp decline in
its statutory capital and surplus position as of December 31,
2002, along with its lack of financial flexibility. Sage Life
reported a net loss of $22.3 million for 2002, which was driven
primarily by operating losses, provisions for severance costs of
$4.8 million and the establishment of non-recurring reserves of
$7.7 million earmarked to cover run-off expenses for the next -
two decades.

Although the capital position is still strong from a regulatory
perspective, A.M. Best has placed the rating under review due to
Sage Life's reduced financial cushion to cover any unforeseen
adverse developments and lack of financial flexibility. Future
costs have been provided for, and future operating results are
expected to be at or near a break-even level. However, the
rating will remain under review over the next several quarters
while A.M. Best monitors Sage Life's run-off results against
expectations. A.M. Best will re-evaluate the rating should any
material change occur in Sage Life's business profile or
financial condition.

The current rating continues to recognize Sage Life's limited
operating profile--whereby no new business is accepted--and A.M.
Best's expectation that risk-adjusted capitalization will remain
at current levels as its block of separate account annuity
business runs-off.

The rating also considers Swiss Re Life & Health's role as a
minority shareholder and strategic partner. Additionally, Sage
Life reinsures mortality risks and other contract guarantees
with highly rated reinsurers.

In conclusion, Sage Life's management maintains its belief that
Sage Life has adequate capital resources to meet its contract
benefit and servicing obligations to existing contract holders.

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

SIX FLAGS INC: S&P Assigns B Rating to $430-Million Senior Notes
Standard & Poor's Ratings Services assigned its 'B' rating to
Six Flags Inc.'s $430 million senior notes due 2013. Proceeds
from the offering will be used to refinance its $401 million 10%
senior discount notes due 2008.

At the same time, Standard & Poor's affirmed its ratings,
including its 'BB-' corporate credit rating, on the company.
Oklahoma City, Oklahoma-based Six Flags is the largest regional
theme park operator and the second-largest theme park company in
the world. Total debt and preferred stock as of December 31,
2002, was $2.6 billion.

"The ratings on Six Flags reflect the company's relatively weak
credit measures and modestly declining operating performance,
offset by good geographic and cash flow diversity," said
Standard & Poor's credit analyst Hal Diamond.

Broad geographic diversity helps to protect cash flow from
unfavorable weather, accidents, and other local factors that can
negatively affect the performance of theme parks. Same park
EBITDA declined 3% in 2002, with performance declines
concentrated in four large markets, which did not have a new
attraction. Overall attendance declined 8% in 2002, and group
attendance has been hurt in certain markets where local
businesses have been particularly hard hit by the weak economy.
Nevertheless, Six Flags expects EBITDA to increase roughly 2% in
2003, largely through adding new rides in the four large parks
that had disappointing seasons last year.

SLEEPMASTER: Requests for Payment of Admin. Claims Due April 28
On January 23, 2003, the U.S. Bankruptcy Court for the District
of Delaware confirmed the Second Amended and Restated Joint Plan
of Reorganization of Sleepmaster Finance Corp., and its debtor-

All conditions necessary for the Effective Date of the Plan have  
occurred and the Official Committee of Unsecured Creditors
declared the Plan effective on Feb. 25, 2003.

Consequently, all applications for payment of Administrative
Expenses including professional fees must be filed with the
Bankruptcy Court on or before 4:00 p.m. Eastern Time on
April 28, 2003 or be forever barred from asserting these claims.
Copies must also be served on:

      i. Counsel for the Creditors Committee
         Anderson Kill & Olick, P.C.
         1251 Avenue of the Americas
         New York, NY 10020
         Attn: J. Andrew Rahl, Jr., Esq.

         Monzack & Monaco, P.A.
         1201 N. Orange Street
         Suite 400
         Wilmington, DE 19801
         Attn: Francis A. Monaco, Esq.

     ii. Counsel for the Debtors
         Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C.
         919 North Market Street
         16th Floor
         PO Box 8705
         Wilmington, DE 19899
         Attn: Laura Davis Jones, Esq.

    iii. Office of the United States Trustee
         J. Caleb Boggs Federal Bldg.
         844 King Street
         Suite 2313
         Wilmington, DE 19801
         Attn: Julie L. Compton, Esq.

     iv. Counsel for National Bedding Company
         Sonnenschein Nath & Rosenthal
         8000 Sears Tower
         233 South Wacker Drive
         Chicago, IL 60606
         Attn: Fruman Jacobson, Esq.


         Young Conaway Stargatt & Taylor
         1000 West Street
         17th Floor
         Wilmington, DE 19801
         Attn: Michael R. Nestor, Esq.

      v. Creditor Representative
         3774 Interstate Park Road North
         Riviera Beach, FL 33044
         Attn: Darryle Burnham

Sleepmaster Finance Corporation filed for Chapter 11 protection
on November 16, 2001, disclosing estimated assets of $50,000 and
estimated debts of $1 to $10 million. Laura Davis Jones, Esq.,
at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C.,
represents the Debtors in their restructuring efforts.         

SOLUTIA INC: Urges Court to Certify Alabama Court Jury Awards
The jury in the Abernathy v. Monsanto trial has returned
compensatory damage awards for the first 17 plaintiffs in phase
one of the trial that began in January 2002.

Solutia Inc., (NYSE: SOI) asked the court to certify the
findings of the jury to the Alabama Supreme Court, so the
parties can use the damage awards as a basis for settlement or
appeal of the case.  The Court denied this request.

The court has indicated that it will continue requiring counsel
for plaintiffs and defendants to present the additional property
damage claims to the jury.  The company will comply with the
court's directive in this matter, although it believes appellate
review of the existing verdicts is appropriate at this time.

Thus far, the jury has awarded $4 million for cleanup costs,
$1.6 million for mental anguish and $230,000 for reduction in
property value. The company does not believe that awards for
cleanup costs or mental anguish are either appropriate or are
supported by the facts or by Alabama law.

The Company believes that awarding cleanup costs to plaintiffs
is inappropriate since the company has already agreed to clean
up properties in the community required by the U.S.
Environmental Protection Agency (EPA).

In addition, the Company is awaiting approval in federal court
for a comprehensive Consent Decree that provides for an
expedited cleanup of residential properties in and around

Solutia remains committed to an effective cleanup of PCBs in
Anniston and surrounding areas and has already spent $54 million
on that work.  The company believes the best and quickest way to
achieve the cleanup is the Consent Decree.

For more information on Solutia's cleanup work in Anniston, as
well as its economic revitalization and community development
activities, please visit

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

As reported in Troubled Company Reporter's February 7, 2003
edition, Moody's Investors Service raised the debt ratings of
Solutia Inc., and its affiliate Solutia Europe SA/NV, after the
sale of the company's resins, additives and adhesives
businesses. Total consideration is $510 million, with $10
million as exclusivity fee.

The rating upgrade mirrors the improved financial profile of
Solutia as a result of the sale. Proceeds from the transaction
will be used to pay debts and revolving credit bank loans.

Outlook is stable.

                    Ratings actions

Solutia Inc.                                   To       From
                                               --       ----
   * Senior implied rating:                    Ba3       B1
   * Issuer rating:                            B1        B2
   * Secured credit facility and term loan;    Ba2       Ba3
   * Guaranteed senior unsecured notes;        Ba3       B1
   * Senior unsecured notes and debentures;    B1        B2
   * Universal shelf (gtd. senior unsecured   (P)Ba3  (P)B1

Solutia Europe SA/NV:

   * Guaranteed senior unsecured Euro notes;   B1        B2

SPIEGEL: Earns Nod to Continue Prepetition Customer Programs
The Spiegel Inc., and its debtor-affiliates obtained the Court's
authority to continue their prepetition customer programs and
honor prepetition obligations owed to their warranty service

With the approval, the Debtors will continue receiving,
processing and honoring charge and credit card transactions and
continue paying processing and related fees to credit card
companies and processors.  In addition, the Debtors ask the
Court to authorize and direct all banks and other financial
institutions to receive, process, honor and pay any and all the
checks and make any wire transfers or other methods of payment.

The customer programs are:

A. Gift Certificates

   Before the Petition Date, the Debtors sold in the ordinary
   course of business gift certificates and gift cards for the
   purchase of merchandise in the Debtors' retail stores,
   catalog and online retail businesses.  As of the Petition
   Date, certain customers had not yet redeemed certain of these
   prepetition Gift Certificates for goods.  At the time that
   these Gift Certificates were purchased by the customers, they
   had every expectation that they would be redeemable.  The
   Debtors estimate that their outstanding obligations on Gift
   Certificates totaled $50,000,000 as of December 31, 2002.

B. Award Certificates

   Prepetition, the Debtors sold award cards and web
   certificates to businesses for rewarding their employees for
   use in the Debtors' businesses.  However, certain recipients
   had not yet redeemed certain of these prepetition award
   certificates for goods.  The Debtors estimate that
   outstanding obligations on award certificates total
   $4,100,000 as of the Petition Date.

C. Merchandise Certificates and Coupons

   The Debtors have issued merchandise certificates in respect
   of certain returned items and in certain cases in lieu of a
   cash refund for overpayments less than $1.95.  The Debtors
   have also issued merchandise certificates and coupons as
   promotional items to both existing customers and as
   incentives to other individuals to build their customer base.  
   Certain of the Merchandise Certificates remain unredeemed.  
   In the fiscal year ended 2002, Newport News issued $54,000 in
   Merchandise Certificates.  The Debtors inform the Court that
   the unused portions of the Merchandise issued by Newport News
   are redeemed for cash.

D. Discount Club Certificates

   The Debtors offer customers a 10% discount on all Newport
   News merchandise purchases for a 12-month period for $25.  If
   the Discount Club customers do not get back the $25 in
   merchandise discounts during the 12-month period, they will
   receive a merchandise certificate for the unused portion
   rounded up to the nearest increment of $5.  The Debtors
   estimate that $1,300,000 in Discount Club certificates are
   outstanding and could be redeemed.

E. Promotional Codes

   The Debtors issue promotion, offer and discount codes to be
   presented by customers at the time of purchasing goods from
   the Debtors' catalog and online retail businesses.  The want
   to honor the Promotional Codes in accordance with their terms
   regardless of whether the Promotional Codes were issued by
   the Debtors before or after the Petition Date and regardless
   of whether the customers presented the Promotional Codes to
   the Debtors before or after the Petition Date.

F. Complimentary and Sales Price Adjustment Certificate

   In the ordinary course of business, the Debtors issue
   complimentary certificates to those customers who have
   experienced a significant customer service inconvenience.  
   The Debtors also issue sales price adjustment certificates to
   those customers who demand credit for purchased items that
   were offered at a lower price in one of the Debtors'
   catalogs. The Price Adjustment Certificates expire one year
   from the date of issuance.  During fiscal year ended 2002,
   the Debtors issued $39,000 in Price Adjustment Certificates.

G. Points Offers

   The Debtors offer promotional points to 38,000 customers
   enrolled in a loyalty program in connection with their
   Spiegel IndulgenceCard, a private-label credit card they
   issue.  The Loyalty Program awards 4 points for every $1 in
   net purchases from Spiegel Catalog or  For each
   1,000 points awarded, the Debtors award a $10 merchandise
   certificate redeemable on purchases of Spiegel Catalog or merchandise.  The Debtors also award additional
   items like chocolates and other gift items in accordance with
   certain threshold points levels.  The Debtors estimate that
   28,000 enrolled customers have under 1,000 points.

   While they are no longer accepting their Spiegel
   IndulgenceCards as form of payment, the Debtors,
   nevertheless, believe that continuing to honor the Points is
   an essential component to maintaining their relationships
   with their customers.  Hence, the Debtors intend to:

    (1) award Indulgence Certificates to each of the 28,000
        customers who have accumulated between 4 and 1,000

    (2) transfer the Points balance of each customer in the
        Loyalty Program to new Spiegel private-label credit
        cards to the extent the New Cards are issued by the
        Debtors and new accounts are opened by Loyalty Program
        customers in respect of the New Cards;

    (3) continue the Loyalty Program in connection with any New
        Cards issued; and

    (4) honor the points in connection with any New Cards
        whether the Points were earned before or after the
        Petition Date.

H. Pre-Approved Credit Offers

   The Debtors make pre-approved offers of credit through their
   catalogs and through direct mailings.

I. Returns, Refunds and Exchanges

   Certain customers hold contingent claims against the Debtors
   for refunds, returns, exchanges, substitutions, price
   adjustments and other credit balances relating to goods sold
   or services rendered prepetition.  For the fiscal year ending
   December 31, 2002, the Debtors expect to process $516,100,000
   in returns.

J. Warranties

   The Debtors sold various extended warranties, which are
   offered by item for either two- or three-year extensions, on
   selected products covering certain items not covered by the
   manufacturer's warranty.  The warranty features include:

      (i) 100% parts and labor to restore the unit to normal
          operating condition, including required and preventive
          maintenance whenever necessary;

     (ii) carry-in service;

    (iii) unlimited service;

     (iv) replacement of unit with one of like quality if the
          item cannot be repaired, if cost of repair exceeds the
          value of the covered unit or if item fails three times
          from the same problem; and

      (v) protection against operational failure if caused by a
          power surge when a properly installed and functioning
          UL-approved surge protector is in use.

   The Debtors do not believe they owe any prepetition amounts
   in respect of Warranty obligations.  But the ability to
   continue providing warranties is vital to the Debtors'
   commitment to customer satisfaction and ongoing relationship
   with their customers. (Spiegel Bankruptcy News, Issue No. 2;
   Bankruptcy Creditors' Service, Inc., 609/392-0900)   

SUN CITY: Receives $30,000 Cash Offer to Buy Public Shell
Soneet Kapila, the Chapter 7 trustee overseeing the liquidation
of Sun City Industries, Inc., tells the U.S. Bankruptcy Court
for the Southern District of Florida that there's a market for
clean, publicly traded shell corporations . . . and the estate
has a $30,000 cash offer in hand from Glenin Bay Equity, LLC.  
Sun City was a publicly traded entity, reporting to the United
States Securities and Exchange Commission prior to 1998, with
3,000,000 shares authorized and 2,276,116 shares outstanding
with 298 shareholders of record.

Glenin bay Equity, LLC, based in Apopka, Florida, agrees to take
the corporate shell as is, where is, and without any
representation or warranty from the Trustee as to good standing,
reinstatment of good standing, or adequacy or timeliness of
filing requirements.  No other estate assets are included in the
sale transaction, and the sale will be free and clear of all
liens and encumbrances pursuant to 11 U.S.C. Sec. 363.

The Sale Agreement provides, at Closing, that:

     (1) Sun City's existing directors will be deemed terminated
         and removed from office;

     (2) Glenin will appoint a single and sole member to Sun
         City's Board of Directors;

     (3) the New Directors will amend Sun City's Articles of
         Incorporation to increase the authorized number of
         shares of common stock by 87,000,000, to 90,000,000;

     (4) the New Director will amend Sun City's Articles
         of Incorporation to reduce the par value of the shares
         from ten cents ($0.10) to one mil ($0.001);

     (5) Sun City will issue 1,000,000 new shares to its new

     (6) Sun City will implement a 1-for-100 reverse-split,
         rounding-up all fractions to the next whole 100 shares;

     (7) Sun City will cancel and extinguish every common stock
         conversion right of every kind; and

     (8) Sun City will cancel every preferred security and every
         preferred security conversion right.

The Sale Agreement is subject to competitive bidding.  Any
entity willing to offer $35,000 or more, in cash, should
contact, without delay:

     The Chapter 7 Trustee:

         Soneet Kapila
         1000 S. Federal Highway, Suite 200
         Ft. Lauderdale, FL 33316
         Telephone (954) 761-8707

     Counsel to the Chapter 7 Trustee:

         Geoffrey S. Aaronson, Esq.
         Adorno & Yoss, P.A.
         2601 South Bayshore Drive, Suite 1600
         Miami, FL 33133
         Telephone (305) 858-5555

Sun City was in the egg and poultry business.  On February 2,
1998, Sun City and eight of its subsidiaries filed for chapter
11 protection (Bankr. S.D. Fla. Case No. 98-20679-BKC-RBR).  On
March 20, 1998, Soneet Kapila was appointed Chapter 11 Trustee
of one subsidiary, Sheppard Foodservice, Inc.  Thereafter, on
March 27, 1998, the nine estates were substantively
consolidated.  On April 9, 1998, the Bankruptcy Court entered an
order conversing the substantively consolidated cases to Chapter
7 liquidation proceedings and confirmed Soneet Kapila's
continued appointment as the Chapter 7 Trustee.

SWEETHEART HLDGS: S&P Drops Unit's Corporate Credit Rating to SD
Standard & Poor's Ratings Services lowered its corporate credit
ratings on Owings Mills, Maryland-based Sweetheart Holdings Inc.
and its wholly owned subsidiary Sweetheart Cup Co. Inc., to
'SD', or selective default, from 'CC' and removed them from
CreditWatch following completion of Sweetheart's exchange offer
for its subordinated notes due 2003. The rating on these notes
has been lowered to 'D' and will be withdrawn soon.

"The rating actions follow the consummation of Sweetheart Cup's
offer to exchange its 12% senior subordinated notes for new
senior notes due in July 2004", said Standard & Poor's credit
analyst Cynthia Werneth. "The amount of the notes tendered and
exchanged equals $93.375 million, or approximately 85% of the
aggregate principal amount of notes outstanding. Standard &
Poor's deems this a distressed exchange, tantamount to a
default. Standard & Poor's will not maintain a rating on the
$16.625 million of 2003 notes that were not tendered and

Standard & Poor's said that it expects to assign new corporate
credit ratings and a senior unsecured debt rating to the new
notes within the next month. Even though the new notes are
senior notes, they will be rated two notches below the new
corporate credit rating, reflecting the fact that they are
structurally subordinated to a significant amount of secured
debt and operating leases.

Standard & Poor's said that its 'CCC-' subordinated debt rating
on the Fonda Group Inc.'s $120 million notes due 2007 remains on
CreditWatch with positive implications, reflecting the
likelihood that the rating on this debt will ultimately be the
same or slightly higher than it currently is. (The Fonda Group
merged into Sweetheart Cup last year.) The Fonda notes
and the new Sweetheart notes are expected to have the same
rating, both two notches below the corporate credit rating.

TEREX CORP: Pitches Winning Bid for Supply Contract with Israel
Terex Corporation (NYSE: TEX) announced that its joint venture,
American Truck Company, has been selected as the preferred
bidder by the Ministry of Defense of Israel to supply the Israel
Defense Forces with 315 medium tactical trucks and associated

The anticipated order value is in excess of $50 million. The
announcement follows the conclusion of a lengthy competition
between ATC and other U.S. truck manufacturers that included
extended testing of vehicles and an evaluation of after-market
support capabilities. ATC will immediately enter into formal
discussions with IMOD to finalize the contract details, which
are expected to be completed during the first half of 2003. The
parties anticipate that the contract will be funded under the
United States Foreign Military Sales program.

The procurement includes a combination of cargo carriers (some
with material handling cranes) incorporating ATC's high mobility
11.5 metric ton payload 6x6 tactical vehicles. Additionally, ATC
would provide extensive driver and maintenance training, in-
country service and spare parts. Delivery of trucks and training
materials would be performed over the next 18-24 months.

ATC trucks are based on the proprietary design developed and
tested over many years by Czech truck manufacturer, Tatra a.s.,
and features a "central backbone" chassis design with an all-
wheel drive suspension that can be configured as 4x4, 6x6, 8x8,
10x10, and even 12x12. This modularity of the chassis and
suspension design lends itself to a diverse range of vehicle
configurations, including cargo carriers, load handling systems,
weapon platforms, tankers, firefighting vehicles, aerial work
platforms and more in a payload range from 5 to 40 tons.

"This selection represents a significant and exciting
opportunity for Terex, ATC and Tatra, in which Terex has an
equity investment," commented Ronald M. DeFeo, Terex's Chairman
and Chief Executive Officer. "ATC is the United States' newest
producer of heavy-duty off-road trucks. ATC brings to market a
full range of tactical wheeled vehicles for the military and
severe duty commercial applications. ATC's vehicles offer
leading off-highway mobility, payload-to-weight ratios, and
outstanding durability and reliability at competitive prices and
backed by excellent after-sales service."

"We have made strategic investments over the past year to better
serve and penetrate the government and military markets, and now
we see these initiatives starting to pay off," continued Mr.
DeFeo. "In 2002, we had success selling our crushing equipment
and rough terrain material handlers to the U.S. military, but
this opportunity now opens the door for ATC into the tactical
vehicle market. We believe this is an important first step for
Terex, ATC and Tatra, as we were selected over experienced
competitors. We believe the Terex value proposition of high
quality products at reduced cost will provide us with a
competitive edge in further penetrating this market."

Terex Corporation is a diversified global manufacturer based in
Westport, Connecticut, with 2002 annual revenues of $2.8
billion. Terex is involved in a broad range of construction,
infrastructure, recycling and mining-related capital equipment
under the brand names of Advance, American, Amida, Atlas,
Bartell, Bendini, Benford, Bid-Well, B.L. Pegson, Canica,
Cedarapids, Cifali, CMI, Coleman Engineering, Comedil, CPV,
Demag, Fermec, Finlay, Franna, Fuchs, Genie, Grayhound, Hi-
Ranger, Italmacchine, Jaques, Johnson-Ross, Koehring, Lectra
Haul, Load King, Lorain, Marklift, Matbro, Morrison, Muller,
O&K, Payhauler, Peiner, Powerscreen, PPM, Re-Tech, RO, Royer,
Schaeff, Simplicity, Square Shooter, Telelect, Terex, and Unit
Rig. Terex offers a complete line of financial products and
services to assist in the acquisition of Terex equipment through
Terex Financial Services. More information on Terex can be found

                        *     *     *

As previously reported in the Troubled Company Reporter,
Standard & Poor's assigned its double-'B'-minus secured bank
loan rating to Terex Corp.'s proposed $210 million new term loan
C maturing in December 2009. Proceeds from this loan and about
$60 million in Terex common stock will be used to finance the
acquisition of Genie Holdings Inc., for $270 million. In
addition, the double-'B'-minus corporate credit rating was
affirmed on Westport, Connecticut-based Terex, a manufacturer of
construction and mining equipment. Total rated debt is $1.6
billion. The outlook is stable.

The bank loan was rated the same as the corporate credit rating.
The total senior secured credit facility of $885 million is
comprised of a revolving credit facility of $300 million, a term
loan B of $375 million, and the new term loan C of $210 million.
The facility is secured by substantially all of the company's
assets. Under Standard & Poor's simulated default scenario, the
company's cash flows were stressed and the resulting enterprise
value would not be sufficient to cover the entire bank loan in
the event of a default. However, there is reasonable confidence
of meaningful recovery of principal, despite potential loss

TESORO PETROLEUM: Prices Sr. Secured Term Loan & Note Offering
Tesoro Petroleum Corporation (NYSE:TSO) has negotiated the sale
of $375 million in new senior secured notes and $200 million in
new senior secured term loans both maturing in 2008 and sharing
in a common collateral package.

The purpose of these transactions, along with the company's
previously announced proposed senior secured revolving credit
facility, are to refinance a portion of the company's existing
long-term debt. The senior secured notes and senior secured term
loans are scheduled to close on April 17, 2003, simultaneously
with the company's proposed senior secured revolving credit

The $375 million senior secured notes will be issued at a
discount with a coupon rate of 8 percent and a yield to maturity
of 8.25 percent. The senior secured notes have a 3-year no call
period, after which they are callable with a call premium of 4
percent in year four and at par in year five.

The $200 million senior secured term loan has an interest rate
calculated by using the London Interbank Offered Rate (LIBOR)
plus 5.5 percent. Using current LIBOR rates, the total interest
rate on the loan is 6.84 percent. The senior secured loans have
a 1-year no-call period, after which they are callable with a
call premium of 3 percent in year two, 1 percent year three and
at par thereafter. The amount of senior secured term loans was
increased by $50 million from $150 million to $200 million to
take advantage of the lower interest rate on the senior secured
term loans relative to the senior secured notes and give greater
flexibility for future debt repayment.

The senior secured notes and senior secured term loans are being
offered in private offerings and have not been registered under
the Securities Act of 1933 and may not be offered or sold in the
United States without registration or an applicable exemption
from the registration requirements. This press release shall not
constitute an offer to sell or the solicitation of an offer to
buy nor shall there be any sale of the securities referred to
herein in any state in which such offer, solicitation or sale
would be unlawful.

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

                         *     *     *

As previously reported, Fitch Ratings assigned a senior secured
debt rating of 'BB-' to Tesoro Petroleum Corporation's $400
million senior secured note offering, proposed $650 million
senior secured credit facility and proposed $150 million senior
secured term loan. Fitch also rates the company's subordinated
debt 'B'. The Rating Outlook remains Negative.

Proceeds from the $400 million note offering, the new term loan
and borrowings under the new credit facility will be used to
repay the company's tranche A and B term loans. At Dec. 31,
2002, Tesoro had $918 million outstanding on the Term Loans, no
cash borrowings on the revolver and $60 million in outstanding
letters of credit. Balance sheet debt totaled $2.0 billion at
year-end with total adjusted debt of approximately $2.8 billion.

Tesoro's ratings and outlook reflect the company's significant
leverage combined with the continued volatility in global crude
markets and the U.S. refining sector. The company's financial
flexibility has been hampered by the significant debt added to
finance the company's acquisitions.

THOMAS GROUP: Elects Charles M. Harper to Board of Directors
Thomas Group, Inc., (OTCBB:TGIS) has expanded the size of its
Board of Directors from 5 to 6, and that Charles M. "Mike"
Harper has been elected as the company's sixth director.

Mr. Harper was Chief Executive Officer of ConAgra Inc. for 17
years and, after his retirement from ConAgra, was Chairman and
CEO of RJR Nabisco for nearly three years. Mr. Harper has been
recognized as "CEO of the Year" by Financial World magazine, and
has received many community, industry, and national service
awards over the course of his career.

Jack Chain, Chairman of Thomas Group, commented on the election
of Mr. Harper: "Mike's accomplishments in business have been
underscored by the enormous success of the Fortune 500 companies
he has led, and by the extraordinary breath and depth of Mike's
experience. For these reasons and many more we are very, very
pleased to see Mike join the Board of Directors of Thomas Group.
Mike brings a new and valuable perspective to our Board, and I
believe Mike's experience and insights will be helpful to

John Hamann, President and CEO of Thomas Group, said, "I am
delighted that Mike Harper has joined our Board of Directors.
Mike's deep understanding of business processes in major
corporations, along with his strong leadership qualities, will
be enormously helpful to management. All of us at Thomas Group
look forward to working with Mike in the coming years."

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

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.

TRENWICK GROUP: Reaches Definitive Pact with Senior Noteholders
Trenwick Group Ltd., (OTC: TWKGF) has reached a definitive
agreement with the beneficial holders of the 6.70% Senior Notes
of its wholly owned subsidiary, Trenwick America Corporation, to
extend the maturity date of the Senior Notes until August 1,
2003 and to waive the default occasioned when Trenwick America
failed to pay principal and interest on the Senior Notes on
April 1, 2003.

Under the terms of the agreement, Trenwick America has paid to
the Senior Noteholders all interest accrued through April 1,
2003, in the amount of $2,512,500.00.

Trenwick also stated that the terms of the agreement have been
approved by the banks that have issued letters of credit on
behalf of subsidiaries of Trenwick in support of its Lloyd's
operations under a senior secured credit facility. In addition,
Trenwick stated that the letter of credit banks have waived the
default under the senior secured credit facility which arose as
a result of Trenwick America's failure to pay principal and
interest on the Senior Notes on April 1, 2003.

Trenwick is a Bermuda-based specialty insurance and reinsurance
underwriting organization with two principal businesses
operating through its subsidiaries located in the United States,
the United Kingdom and Bermuda. Trenwick's reinsurance business
provides treaty reinsurance to insurers of property and casualty
risks from offices in the United States. Trenwick's operations
at Lloyd's of London underwrite specialty insurance as well as
treaty and facultative reinsurance on a worldwide basis. In
2002, Trenwick voluntarily placed into runoff its U.S. specialty
program business and its specialty London market insurance
company, Trenwick International Limited, and sold the in-force
business of LaSalle Re Limited, its Bermuda based subsidiary.

UNITED AIRLINES: Flight Attendants Set Vote on Tentative Pact
The United Airlines Master Executive Council of the Association
of Flight Attendants, AFL-CIO, unanimously voted to send the
tentative agreement on cost cuts that was reached last week out
for a ratification vote of the members, with a recommendation
that flight attendants vote "FOR" the agreement.

"After painstaking consideration and extensive discussion over
the tentative agreement and state of our company in bankruptcy,
the United Master Executive Council unanimously approved the
agreement and endorsed it for ratification," said AFA United MEC
President Greg Davidowitch. "The burden of sacrifices being
placed on United flight attendants through this tentative
agreement is extensive, but flight attendants have repeatedly
affirmed our commitment to United's successful restructuring,
security for flight attendant jobs, and preservation of the
contractual provisions that define our jobs.

"This tentative consensual agreement will provide protection for
our membership that court imposed changes would not,"
Davidowitch said.

Details will be provided to the flight attendants before being
released to the public. AFA representatives will mail the
tentative agreement to each flight attendant. Flight attendants
around the world will also be able to view an Apr. 15 live web
cast of a Chicago-area meeting discussing the terms of the
tentative agreement. Meetings will also be held in San
Francisco, Los Angeles, Denver, Washington, DC, and New York

Voting will be conducted electronically, via telephone and
internet, beginning Apr. 16, with ballots being counted on Apr.
29. Complete meeting and voting information can be viewed at  

More than 50,000 flight attendants, including the 24,000 flight
attendants at United, join together to form AFA, the world's
largest flight attendant union. Visit the Company's Web site at

UNIVERSAL ACCESS: CityNet Brings-In $16 Mill. in Cash Investment
Universal Access Global Holdings Inc., (Nasdaq: UAXS) has
reached an agreement with CityNet Telecommunications, Inc., for
a cash investment. The funding will bolster the company's
balance sheet in addition to providing capital for expansion of
services to existing customers and growth into selected new
vertical markets.

Under the agreement, CityNet will invest $16 million in cash and
will contribute fiber optic network assets in exchange for a 55%
fully-diluted stake in Universal Access. CityNet has funded $5
million of its total investment immediately in the form of
secured debt, which will be repaid upon the earlier of the
closing of the equity transaction or April 6, 2004. CityNet will
have the right to appoint five Directors to the Board of
Directors, while Universal Access will appoint four Directors,
one of which will include CEO Lance Boxer. The new team of
experienced senior executives recruited by Universal Access will
continue to lead the company.

"This new investment will strengthen our balance sheet and
provide additional capital to expand our overall marketing and
sales efforts in key market segments," said Lance Boxer, CEO of
Universal Access. "These include cable companies, foreign
carriers and the government. This transaction also will allow us
to benefit from the experience and resources of CityNet and its
shareholders." CityNet's investors include Telecom Partners,
Crescendo Ventures, CIBC, The Carlyle Group, and Great Hill

After accounting for transaction-related costs, net cash
proceeds from both the equity investment and the loan are
estimated to be approximately $14.5 million. Universal Access,
which was previously debt free, will also assume a $2 million
debt obligation of CityNet in connection with the equity
investment. Despite very difficult market conditions, Universal
Access continues to see strong demand for its services from a
wide range of industry leaders, including BCE Nexxia, Teleglobe
and AOL. Building upon recent improvements in its operating
results, Universal Access believes that this capital will allow
it to enter select new market segments in order to increase its
revenues and achieve profitability.

"We have been looking for strategic investment opportunities in
the telecom market that will help us diversify into new
sectors," said Emilio Pardo, Chief Executive Officer of CityNet.
"We were impressed with Universal Access' restructuring efforts
over the past year and the new management team's success in
creating a leaner operating structure and a stronger, more
diversified customer base. When you couple this with CityNet's
strategic relationships in the industry, marketing expertise and
government relationships, this is a great long-term investment
for us."

"Procurement and provisioning of off-net circuits continue to
represent a large market opportunity that Universal Access'
business model and strong value proposition readily address. We
believe CityNet's additional capital will be integral to helping
the company capitalize on this opportunity," said William J.
Elsner, Chairman of CityNet and Managing Member of Telecom

The equity investment is subject to a vote of Universal Access'
shareholders, regulatory approval and other closing conditions.
Subject to receipt of these approvals and satisfaction of these
conditions, the investment is expected to close by July 2003.

Universal Access (Nasdaq: UAXS) specializes in
telecommunications procurement services for carriers, service
providers, cable companies, system integrators and government
customers worldwide. The company is dedicated to alleviating
communication bottlenecks by leveraging its proprietary
information databases in combination with its strategically
deployed network interconnection facilities. By provisioning
across multiple networks of competing global service providers,
Universal Access provides its clients with a timely and cost-
effectively means of extending their network reach and
maximizing the utilization of their own network assets.
Universal Access' customers include a wide range of leading
companies. Universal Access is headquartered in Chicago, IL.
Additional information is available on the company's Web site at  

At December 31, 2002, Universal Access' balance sheet shows a
working capital deficit of about $12 million, while total
shareholders' equity has further shrunk to about $9 million from
about $100 million a year ago.

CityNet is a broadband infrastructure construction company that
has pioneered deployment of last-mile fiber optic networks
through in-city sewer systems. The company began operations in
2000, and quickly developed a unique position and reputation in
the industry for its innovative methods of building fiber
networks, and for its partnerships with city governments across
the U.S. and Europe. CityNet is focused on building dark fiber
networks and point-to- point fiber connections that fill the
gaps in existing (fragmented) fiber optic networks within
cities, without the need to trench roads and walkways. The
networks are deployed using a combination of state-of-the-art
robotics for small, non-man-accessible pipes, and man-accessible
technologies for larger pipes. CityNet's customers include cable
companies, telecom carriers, enterprises, institutions and
government agencies/departments. CityNet is headquartered in
Silver Spring, MD. For further information on CityNet, please
visit the CityNet Web site at  

US AIRWAYS: S&P's B Credit Rating Reflects Weak Revenue Outlook
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to US Airways Group Inc. and unit US Airways Inc.
The outlook is negative. Ratings on aircraft-backed debt that
had not defaulted during the airline's Chapter 11 bankruptcy
reorganization were variously affirmed or upgraded and removed
from CreditWatch.

"The corporate credit rating on US Airways reflects the current
very weak airline revenue outlook and resulting likelihood of
further losses, but benefits from the company's improved cost
structure and reduced debt and lease burden achieved in its
bankruptcy reorganization," said Standard & Poor's credit
analyst Philip Baggaley. The Arlington, Virginia-based airline
emerges from Chapter 11 with improved liquidity and increased
flexibility to use regional jets, but still faces challenges
from risks relating to the Iraq war and potential renewed
terrorism, as well as from rising low-cost competition. The
company previously forecast a pretax and net loss of $225
million in 2003, and that loss is likely to deepen with the
effects of the Iraq war. US Airways has cash and available bank
lines of about $1.3 billion, having received a $240 million
equity investment, a 90% federally guaranteed $1 billion credit
line, and a $360 million facility provided by General Electric
Capital Corp.

US AIRWAYS: Intends to Reject Various Contracts Pursuant to Plan
Several executory contracts were not assumed under US Airways
Group Inc.'s First Amended Joint Plan of Reorganization and,
pursuant to Section 8.2 of the Plan and Paragraph 18 of the
Confirmation Order, are rejected effective on the earlier of:

    (a) the date the Rejected Agreement expires or is terminated
        in accordance with the terms of the agreement, or

    (b) January 5, 2004.

The Debtors took this action as a result of the growing
instability in the airline industry and the unknown impact of
the Iraqi war.  Prior to the effective rejection date, the
company entity will fully perform its obligations under the
executory contracts to the extent required by applicable law and
will seek to negotiate new agreements to reduce operating costs
and utilize facilities to best suit its business plan and
operational needs or make other arrangements.

The list of contracts to be rejected is available at:  

(US Airways Bankruptcy News, Issue No. 31; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

US SEARCH CORP.COM: Needs New Funding to Meet Cash requirements
US SEARCH is an individual locator and risk management services
company, which uses its proprietary software platform and web-
based systems to supply consumer and small business clients with
services such as individual location, identity verification,
criminal record checks, employment and education verifications.
US SEARCH, through its wholly-owned subsidiary, Professional
Resource Screening, provides employment screening services,
including identity verification, criminal record checks,
employment and education verifications professional reference
checks, credit and motor vehicle record checks, and drug
screening. Professional Resource Screening has more than 500
large business clients, including AT&T Wireless, The AIG Life
Companies, Bell South Corporation, Charles Schwab and DHL
Worldwide Express.

On December 13, 2002, US SEARCH agreed to be acquired by First
Advantage Corporation, a new company formed by The First
American Corporation to acquire US SEARCH and the several
subsidiaries of First American comprising the First American
Screening Technologies division. First American is a diversified
provider of business information and related products and
services. Its FAST division is comprised of American Driving
Records, Inc., First American Registry, Inc. SafeRent, Inc.,
HireCheck, Inc., Employee Health Programs, Inc. and Substance
Abuse Management, Inc., and is a leading provider of risk
management services to companies, non-profit organizations and
governmental agencies throughout the United States. The
combination  of US SEARCH and the FAST division, expected to be
consummated in the second quarter of 2003, will be achieved by
merging separate, newly-formed subsidiaries of First Advantage
into US SEARCH and the subsidiaries of First American comprising
the FAST division. Upon completion of the mergers, each share of
US SEARCH common stock outstanding immediately before the
effective time of the mergers will be cancelled and extinguished
and automatically converted into the right to receive 0.04 of a
share of First Advantage Class A common stock.

The shares of First Advantage Class A common stock received by
US SEARCH stockholders will represent approximately 20% of the
capital stock of First Advantage immediately following the
closing of the mergers. As consideration for the mergers of the
companies comprising the FAST division, First American will
receive shares of First Advantage Class B common stock
representing approximately 80% of the shares of capital stock of
First Advantage immediately following the closing. The First
Advantage Class B shares to be issued to First American are
substantially the same as shares of Class A common stock, but
have ten votes per share (comparable to one vote per share of
Class A common stock) and are convertible into an equal number
of shares of Class A common stock. Consequently, immediately
following the mergers, First American will control approximately
98% of the voting power of First American, and US SEARCH
stockholders will control the remaining 2%.

On March 31, 2003, US SEARCH received a written notice from The
First American Corporation, which alleged that US SEARCH had
breached the merger agreement. The notice of breach concerned US
SEARCH's award of bonuses to certain executive officers of US
SEARCH for services performed in 2002. Representatives of US
SEARCH and First American discussed the concerns raised in First
American's notice and reached agreement as to how and when such
bonuses will be paid during the pendency of the merger
agreement. On April 1, 2003, US SEARCH and First American
entered into a letter agreement relating to such bonuses and
pursuant to which First American formally withdrew its notice of

If the proposed combination with the FAST division is not
completed, US SEARCH may be subject to a number of material
risks, including the following:  

* its business may suffer from the fact that substantial
management time and attention has been diverted from attending
to the Company's business to focus on preparing for integration
with First Advantage;

* the Company is expending unplanned resources on integration
efforts designed to ensure a smooth transition if and when the
proposed combination is completed, which efforts will be wasted
if US SEARCH does not complete the combination;

* the Company may be required to pay First American a
termination fee of $2.8 million if it does not complete the
combination for certain reasons;

* the current market price of US SEARCH's common stock may
decline to the extent that it reflects an assumption that the
combination will be completed;

* the Company will have to repay up to $1.4 million plus
interest that it has borrowed from First American during the
period before closing the combination, pursuant to a
subordinated secured promissory note due June 30, 2003; and

* substantial costs related to the combination, such as legal
and accounting fees and expenses and financial advisor expenses,
must be paid even if the combination is not completed.

There is no assurance that US SEARCH will have sufficient
liquidity to satisfy the obligations described above. As a
result, it may need to seek additional financing to satisfy such
obligations. There is no assurance that such financing will be
available on terms favorable to the Company, or at all. Further,
if the merger agreement with First American is terminated and US
SEARCH's Board of Directors seeks another business combination,
management says there is no assurance that it will be able to
find a party willing to pay an equivalent or higher price than
that which will be paid in the proposed combination with the
FAST division. In addition, while the merger agreement is in
effect, subject to limited exceptions, US SEARCH is prohibited
from soliciting, initiating, knowingly encouraging or
facilitating the submission of proposals or offers relating to a
takeover proposal or endorsing or entering into any agreement
with respect to any takeover proposal.

There is no current public market for First Advantage Class A
common stock, and there will not be a public market for First
Advantage Class A common stock until the closing. As a result,
there is no way to predict the trading price of the shares of
First Advantage Class A common stock US SEARCH stockholders will
receive in exchange for their US SEARCH common stock if the
proposed combination is completed. As stated above, if the
proposed combination with the FAST division is completed, US
SEARCH stockholders will have the right to receive 0.04 of a
share of First Advantage Class A common stock for each share of
US SEARCH common stock they own. US SEARCH's Board of Directors
has determined that the consideration to be received by the US
SEARCH stockholders pursuant to the merger agreement with First
American is fair and in the best interests of US SEARCH and its
stockholders. The market price of First Advantage Class A common
stock immediately following the closing of the proposed
combination may vary from the value attributed to it by the
Board of Directors of US SEARCH when it determined to enter into
the merger agreement. This variation may be caused by a number
of factors, including market perception of the value of First
Advantage, changes in the businesses, operations or prospects of
US SEARCH, the FAST division or First Advantage, the timing of
the mergers, regulatory considerations and general market and
economic conditions. If the proposed combination is completed,
there can be no assurance that an active trading market for
First Advantage Class A common stock will develop or, if a
trading market does develop, that it will continue. In the
absence of such a market, US SEARCH stockholders may be unable
to readily liquidate their investment in First Advantage Class A
common stock.

The closing sale price of US SEARCH common stock on March 14,
2003 was $0.64 per share. To maintain listing on The Nasdaq
National Market System the Company must maintain a trading price
per share of more than $1.00. If the trading price per share of
its common stock remains below $1.00, it may be delisted from
the Nasdaq National Market. If delisted from the Nasdaq National
Market System, trading in the Company's common stock, could
occur, if at all, in the Nasdaq SmallCap Market, in the over-
the-counter market in so-called "pink sheets", or, if then
available, the OTC Bulletin Board. As a result, the holders of
US SEARCH common stock would find it more difficult to dispose
of, or to obtain accurate quotations as to the market value of
the Company's common stock.

The Company has incurred significant net losses and may never
achieve profitability. It incurred significant net losses of
approximately $26.4 million in 1999, $29.4 million in 2000,
$11.9 million in 2001 and $24.1 million in 2002. As of December
31, 2002, it had an accumulated deficit of approximately $98.6
million. If its revenue does not grow as expected or capital and
operating expenditures exceed its plans, its business, operating
results and financial condition will be materially adversely
affected. Management indicates that there is no certainty if or
when the Company will be profitable or if or when it will
generate positive operating cash flow.

US SEARCH's financial statements have been prepared on the
assumption that it will continue as a going concern, which
contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The independent
accountants' report on the Company's financial statements as of
and for the fiscal year ended December 31, 2002, includes an
explanatory paragraph which states that since inception, US
SEARCH has incurred net operating losses and negative cash
flows, and has a working capital deficit and stockholders'
deficit, that raise substantial doubt about the ability of the
Company to continue as a going concern.

USG CORP: Plan Filing Exclusivity Extended Further Until Sept. 1
USG Corporation and its debtor-affiliates obtained Court
approval to extend their exclusive periods:

     -- to file a reorganization plan until September 1, 2003;

     -- to solicit acceptances of that plan until
        November 1, 2003. (USG Bankruptcy News, Issue No. 45;
        Bankruptcy Creditors' Service, Inc., 609/392-0900)

VALCOM INC: Independent Auditors Express Going Concern Doubt
ValCom, Inc., and subsidiaries, formerly SBI Communications,
Inc., was originally organized in the State of Utah on
September 23, 1983, under the corporate name of Alpine Survival
Products, Inc.  Its name was subsequently changed to Supermin,
Inc., on November 20, 1985.  On September 29,1986, Satellite
Bingo, Inc.  became the surviving corporate entity in a
statutory merger with Supermin, Inc.  In connection with the
above merger, the former shareholders of Satellite Bingo, Inc.
acquired control of the merged entity and changed the corporate
name to Satellite Bingo, Inc.  On January 1, 1993, the Company
executed a plan of merger that effectively changed the Company's
state of domicile from Utah to Delaware. Through shareholder
approval dated March 10, 1998, the name was changed to SBI
Communications, Inc.

In October 2000, the Company was issued 7,570,997 shares by SBI
for 100% of the shares outstanding in  Valencia Entertainment
International, LLC , a California limited liability company.
This acquisition was  accounted for as a reverse acquisition
merger with VEI as the surviving entity. The corporate name was  
changed to ValCom, Inc. effective March 21, 2001.  The Company
is a diversified entertainment company.

The Company had a net loss of $776,726 and a negative cash flow
from operations of $376,342 for the three months ended
December 31, 2002, and a working capital deficiency of
$1,070,305 and an accumulated deficit of $8,902,916 at
December 31, 2002, respectively. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.

In December 2002, an unaffiliated company offered to purchase up
to an 85% equity interest in the Company in exchange for
contributing equity financing. The Company and the unaffiliated
company signed a non-binding letter of intent. The closing of
the transaction is subject to various conditions. There is no
assurance  that the transaction will ever be consummated, or if
it is consummated, that it will be consummated on the terms set
forth in the letter of intent.

On January 14, 2003, the Company's subsidiary, Valencia  
Entertainment International, LLC, entered into an Exclusive
Sales Listing Agreement with a commercial real estate broker to
sell the real property serving as the Company's headquarters
located at 26030 Avenue Hall in Valencia, California. The
Exclusive Sales  Listing Agreement lists the property at
$11,850,000. The Exclusive Sales Listing Agreement requires  
Valencia Entertainment International, LLC to pay a commission to
the broker of four percent of the gross sales price if the
broker sells the real property.  The Company intends to engage
in a sale-leaseback transaction with respect to its real
property to generate funds for working capital and payment of
debts. However, there is no assurance that the Company's
property will be sold or that it will be sold for $11,850,000,
or on terms otherwise favorable to the Company.

On January 18, 2003, the Company entered into a Memorandum of
Understanding with PTL Productions, Inc. (dba Brentwood
Magazine) to cancel the Agreement and Plan of Reorganization
dated August 2, 2002, pursuant to which the Company acquired PTL
Productions, Inc.and sell PTL Productions, Inc. back to the
seller. In connection with the sale, the Company will receive
back 200,000 shares of its Series C Preferred Stock and $300,000
of trade credit.

Valcom's net working capital (current assets less current
liabilities) was a negative $1,070,305 as of  December 31, 2002
compared to $594,990 as of September 30, 2002.  The Company will
need to raise funds  through various financings to maintain its
operations until such time as cash generated by operations is
sufficient to meet its operating and capital requirements.  
There can be no assurance that the Company  will be able to
raise such capital on terms acceptable to the Company, if at
all.  Long-term debt as of December 31, 2002 and 2001 was
$6,663,190 and $6,702,593 and related primarily to the Company's
owned real  estate.

VENTURE HOLDINGS: Voluntary Chapter 11 Case Summary
Debtor: Venture Holdings Company LLC
        33662 James J. Pompo
        Fraser, Michigan 48026

Bankruptcy Case No.: 03-48939

Type of Business: Venture Holdings Company is a worldwide
                  manufacturer and supplier of automotive
                  components and systems.

Chapter 11 Petition Date: March 28, 2003

Court: Eastern District Of Michigan (Detroit)

Judge: Thomas J. Tucker

Debtor's Counsel: Judy A. O'Neill, Esq.
                  Dykema Gossett
                  400 Renaissance Center,
                  35th Floor
                  Detroit, MI 48243
                  Tel: 313-568-6800

Total Assets: $1,459,834,000 (as of March 31, 2002)

Total Debts: $1,382,369,000 (as of March 31, 2002)

WORLDCOM INC: Wants More Time to File Schedules and Statements
Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New
York, informs the Court that Worldcom Inc., and its
debtor-affiliates still need more time to complete and file
their Schedules of Assets.

Thus, the Debtors ask the Court to extend the deadline for
filing their Schedules of Assets to and including May 31,
2003, without prejudice to their right to request a further
extension, for cause shown, should it become necessary.

Although the Debtors have made substantial progress toward
completing the restatement of their financials and being able to
file accurate Schedules of Assets, Ms. Goldstein relates that
the restatement process is not yet complete.  Specifically, the
Debtors have been working with their auditors, KPMG LLP, to
obtain audited financial statements.  They are also cooperating
fully with all federal and state law enforcement authorities
toward this end.  The process of restating the financial
statements is a labor-intensive process.  Because the
investigations into the Debtors' prepetition accounting
practices continue to reveal irregularities, Ms. Goldstein
explains that the process of completing the financial
restatements has taken longer than the Debtors originally
anticipated.  Moreover, the Debtors' employees and professionals
are facing competing demands on their time, as they are
dedicated to strengthening the Debtors' business operations at
this crucial time and preparing a plan of reorganization.

The hearing on the Debtors' request is scheduled on April 15,
2003.  Accordingly, the Court extends the Debtors' time to file
schedules until the conclusion of that hearing. (Worldcom
Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   

* BOOK REVIEW: From Industry to Alchemy: Burgmaster, A Machine
               Tool Company
Author:     Max Holland
Publisher:  Beard Books
Softcover:  335 pages
List Price: $34.95
Review by Gail Owens Hoelscher

Order your personal copy today at

"From Industry to Alchemy" tells the story of people caught in
the middle of global competition, the institutional restraints
within which smaller companies had to operate after the Second
World War, the rise of Japanese industry, and the conglomeration
frenzy of the 1980s. The author's goal in writing this book was
to chronicle the decline in American manufacturing through the
story of that company.

Burgmaster was the culmination of the dream of a Czechoslovakian
immigrant, Fred Burg, who described himself as a "born
machinist." After coming to America in 1911, he learned the
tool-and- die trade, becoming so adept that he "could not only
drill the hole, but also make the drill." A life-long inventor,
he designed an electric automatic transmission that was turned
down by GM's Charles Kettering; GM came out with a hydraulic
version six years later. Forced by finances to work in
retailing, after World War II he retired, moved to California
and set up a machine-tool shop with his son and son-in-law to
manufacture the turret drill, his own design. With the help of
the Korean War, and a previous shortage of machine tools,
business took off. It was a hands-on operation from the start
and remained that way. Burg once fired an engineer who didn't
want to handle a machine part because his hands would get dirty.
Management spent time on the shop floor, listening to employee
ideas. Burg lived and breathed research and development,
constantly fiddling to devise new machines and make old ones
better. Between 1955 and 1962, sales grew 13-fold and employees
from 62 to 272. Burg Tool was featured on Richland Oil Company's
broadcast Success Stories.

By 1965, however, Fred Burg was getting old and the three
partners knew that Burgmaster needed to fund another expensive,
risky expansion to fill back orders or lose market share.
Although companies had made offers before, Houdaille, a company
named for the Frenchman who invented recoilless artillery during
World War I, seemed a good match. The two had similar origins,
it seemed.  Houdaille had begun an ambitious acquisition
program, and saw Burgmaster fitting into an unfilled niche. With
a merger, new capacity would be financed, and "Burgmaster would
continue to operate under present management, personnel and
policies but as a Houdaille division."

What comes next is management by numbers rather than hands-on
decisionmaking; alienation of skilled blue-collar workers;
pushing aside of management; squelching of innovation; foreign
and domestic competition; bitter trade disputes; leveraged
buyouts; the politics of U.S. trade policy; Japan-bashing; and
the inevitable liquidation of Burgmaster and loss of livelihood
of more than 400 employees.

This book was originally titled When the Machine Stopped: A
Cautionary Tale from Industrial America," published in 1989. It
was named by Business Week as one of the ten best business books
of 1989. The Chicago Tribune said that "anyone who wants to
understand American business must read When the Machine
Stopped.Holland has written the best business book in years."

The author explains trade regulations, the machine-tool
industry, and detailed corporate buyouts with equal clarity.
This down-to-earth book provides valuable insight into the
changes within an industry. It combines fascinating, creative
characters; number crunchers; growing corporate disdain for
manufacturing; and tangible consequences of Washington and Wall
Street gone crazy.

Max Hollandis a writer and research fellow at the Miller Center
of Public Affairs at the University of Virginia. His father
worked for 29 years as a tool-and-die maker, union steward, and
machine shop foreman for Burgmaster.


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-
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are $25 each.  For subscription information, contact Christopher
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