TCR_Public/030516.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, May 16, 2003, Vol. 7, No. 96

                          Headlines

A NOVO BROADBAND: Court Extends Plan Exclusivity through July 16
AAMES FINANCIAL: Reports Improved Results for March 2003 Quarter
ACTERNA CORP: Honoring $1.4M of Prepetition Employee Obligations
AEGIS COMMS: Obtains Waiver of Defaults Under Credit Agreement
AIR CANADA: Judge Farley Approves New Amended CIBC Agreement

ALLEGIANCE TELECOM: Voluntary Chapter 11 Case Summary
ALTERRA HEALTHCARE: Court Okays KPMG as Accountants & Advisors
AMES DEPARTMENT: Asks Court to Clear Stipulation with Wausau
ARCIS CORP: March 31 Working Capital Deficit Widens to $11 Mill.
BASIS100: Amends Normal Course Issuer Bid for Conv. Debentures

BETHLEHEM STEEL: ISG Reaches Agreement with Pennsylvania DEP
BETHLEHEM STEEL: Wants July 11 Fixed as Employee Claims Bar Date
BROCADE COMMS: Fiscal Q2 2003 Results Show Slight Improvement
CANADIAN HYDRO: Banks Waive Covenant Breach Under Credit Pact
CANNONDALE: Committee Retains KPMG to Provide Financial Advice

CBR BREWING: Full-Year 2002 Net Loss Balloons to $25 Million
CENTERSPAN COMMS: Nasdaq Nixes Request for Continued Listing
COLUMBIA LABS.: Issuing 510K Shares to Biotech Value for $2.5MM
CONGOLEUM CORP: Red Ink Continues to Flow in First Quarter 2003
CONSECO: Anchorage Police et. al. Takes Legal Action vs. Debtors

CONTINENTAL AIRLINES: Elects Ronald B. Woodard as Board Member
CROWN BUTTE: Expects to File Art. of Dissolution Today in Canada
DAISYTEK INC: Wants More Time to File Schedules and Statements
DDI CORP: Net Capital Deficit Balloons to $178 Mill. at March 31
DENNY'S CORP: Deteriorating Performance Spurs S&P's Neg. Outlook

DVI RECEIVABLES: S&P Assigns BB Rating to Class E Notes
ENCOMPASS: Secures Nod to Reject JA Jones Construction Contract
ENRON CORP: Judge Gonzalez Approves Bonneville Settlement Pact
ESSENTIAL THERAPEUTICS: Asks Court to Establish July 11 Bar Date
FOCAL COMMS: March 31 Balance Sheet Upside-Down by $333 Million

FOREST CITY: S&P Assigns BB- Rating to $300 Million Senior Notes
GLOBAL CROSSING: Names Daniel P. O'Brien as Chief Fin'l Officer
GLOBAL IMAGING: BB- Rating Assigned to Proposed $250M Facility
GOODYEAR TIRE: Responds to Continental Carbon Company Lawsuit
HANOVER COMPRESSOR: Terminates PIGAP II Put to Schlumberger

HARD ROCK HOTEL: S&P Rates $140 Million Second Lien Notes at B
HAWAIIAN AIRLINES: Proposes Solution Addressing Trustee Motion
HAYES LEMMERZ: Has Until Aug. 29 to Make Lease-Related Decisions
HAYES LEMMERZ: Seeking Syndication of $575-Mill. Credit Facility
HORIZON PCS: Balance Sheet Insolvency Widens to $341 Million

IRON AGE HOLDINGS: S&P Lowers & Puts Junk Ratings on Watch Neg.
INTEGRATED HEALTH: Judge Walrath Confirms Reorganization Plan
INTERLIANT INC: Navisite Pitches Winning Bid to Acquire Assets
INTERPUBLIC GROUP: Fitch Further Cuts Low-B Level Debt Ratings
INTRAWARE INC: PricewaterhouseCoopers Airs Going Concern Doubt

KLEINERT'S: Gets Nod to Pay Critical Vendors' Prepetition Claims
KMART CORPORATION: Makes $3 Million Lease Payment to Lexington
L-3 COMMS: S&P Assigns BB- Rating to Proposed $300M Senior Notes
LSI LOGIC: S&P Rates $350MM Convertible Subordinated Notes at B
LYONDELL CHEMICAL: S&P Rates $325-Mil Senior Secured Notes at BB

MEDICALOGI: Trust Okays Initial Distribution to Equity Holders
MERRILL LYNCH: S&P Keeps Watch on Low-B & Junk Class Ratings
METROMEDIA FIBER: Launches New Skilled Response Bundled Product
MISSISSIPPI CHEMICAL: Files for Chapter 11 Protection in Miss.
MORGAN STANLEY: Fitch Affirms Ratings on Series 1999-FNV1 Notes

MOSAIC GROUP: Enters Deal to Sell Mosaic Performance for $4.2MM
NAT'L STEEL: Committee Secures Blessing to Hire Hatch Consulting
NATIONSRENT: Reorganized Debtor's Initial Directors & Officers
NETDRIVEN SOLUTIONS: March 31 Net Capital Deficit Tops $1 Mill.
NORTHWEST AIRLINES: Plans to Issue $150MM Convertible Sr. Notes

ORION REFINING: Selling Louisiana Refinery to Valero for $500MM
PLASSEIN INT'L: Case Summary & 20 Largest Unsecured Creditors
PLIANT CORP: Offering $250 Million of Senior Secured Notes
PRIME RETAIL: Liquidity Issues Raise Going Concern Doubt
PRIMUS: Will Present at NY Investor Conferences Later This Month

RURAL/METRO CORP: Will Increase Allowance for Doubtful Accounts
SPECTRUM PHARMA.: Receives Additional $1.56 Million in Financing
SPIEGEL INC: Taps Keen Realty as Special Real Estate Consultant
SAIRGROUP FINANCE: Commences Initial Distribution Under Plan
SALON MEDIA: Sells Convertible Notes and Warrants for $200K

SALTON INC: S&P Places BB- Corp. Credit Rating on Watch Negative
SBA COMMS: First-Quarter 2003 Results Show Improved Liquidity
SINCLAIR BROADCAST: S&P Rates $100 Mil. Senior Sub. Notes at B
STARWOOD HOTELS: Fitch Rates $300MM Convertible Sr. Notes at BB+
TENNECO AUTOMOTIVE: Shareholders Re-Elect Incumbent Board

U.S. STEEL: Prices $450 Million 9-3/4% Senior Notes Due 2010
V-ONE CORP: March 31 Balance Sheet Upside-Down by $2 Million
VENTAS: Selling Fl. & Tex. Skilled Nursing Facilities to Kindred
WHEELING: 2nd Amended Disclosure Statement Hearing on Tuesday
WORLDCOM INC: Wants Blessing to Reject 95 Verizon Service Orders

* Pilots' Union Leads Charge for Workers' Pension Law Reform

* BOOK REVIEW: CHARLES F. KETTERING: A Biography

                          *********

A NOVO BROADBAND: Court Extends Plan Exclusivity through July 16
----------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, A Novo Broadband, Inc., obtained an extension of its
exclusive periods.  The Court gives the Debtor until July 16,
2003, the exclusive right to file their plan of reorganization
and until September 15, 2003, to solicit acceptances of that
Plan from their creditors.

A Novo Broadband, Inc., a business engaged primarily in the
repair and servicing of broadband equipment for equipment
manufacturers and operators of cable and other broadband systems
in North America, filed for chapter 11 petition on December 18,
2002 (Bankr. Del. Case No. 02-13708).  Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., at Young, Conaway, Stargatt &
Taylor represent the Debtor in its restructuring efforts.  When
the Company filed for protection from its creditors, it listed
$12,356,533 in total assets and $10,577,977 in total debts.


AAMES FINANCIAL: Reports Improved Results for March 2003 Quarter
----------------------------------------------------------------
Aames Financial Corporation (OTCBB:AMSF), a leader in subprime
home equity lending, reported results of operations for the
three and nine months ended March 31, 2003, announcing net
income of $6.7 million and $18.7 million, respectively, compared
to net income of $2.2 million and $4.4 million, respectively,
during the comparable three and nine month periods a year ago.

In making the announcement, A. Jay Meyerson, the Company's Chief
Executive Officer, stated, "The financial results for the three
and nine months ended March 31, 2003 reflect continued
improvement in the Company's core operating performance. Our
$1.0 billion of loan production during the March 2003 quarter,
although lower due to seasonal factors than our $1.3 billion of
loan production during the December 2002 quarter, was 30.7%
better than mortgage loan production during the same period a
year ago." Meyerson added, "The Company continues to report
positive trends in its core operations and is making progress in
restructuring its outstanding public debt. These accomplishments
reflect significant steps made by the Company in improving its
strategic position in the subprime sector."

Excluding the $0.1 million of debt extinguishment income during
the three months ended March 31, 2003, operating revenue
increased $7.8 million, or 13.7%, to $65.4 million during the
three months ended March 31, 2003 over the $57.6 million of
operating revenue reported during the same period a year ago.

During the three and nine months ended March 31, 2003, the
Company reported diluted net income to common stockholders of
$6.7 million and $18.7 million, respectively, compared to
diluted net loss to common stockholders of $2.3 million and $8.8
million during the three and nine months ended March 31, 2002,
respectively.

Diluted net income per common share was $0.07 and $0.20 for the
three and nine months ended March 31, 2003, respectively,
compared to diluted net loss per common share of $0.35 and $1.38
during the comparable three and nine month periods in 2002,
respectively.

Total revenue during the three months ended March 31, 2003
increased $7.9 million to $65.5 million from $57.6 million
during the comparable three month period a year ago. Total
revenue during the three months ended March 31, 2003 includes
$0.1 million of debt extinguishment income recognized in
connection with the redemption of $3.0 million of its 9.125%
Senior Notes due November 2003. Excluding the $0.1 million of
debt extinguishment income during the three months ended
March 31, 2003, total revenue decreased $7.8 million during the
three months ended March 31, 2003 from total revenue during the
comparable three month period in 2002. The $7.8 million increase
in total revenue was comprised of $12.7 million increase in gain
on sale of loans, partially offset by decreases of $3.1 million
and $1.8 million in interest income and loan servicing,
respectively.

Total expenses during the three months ended March 31, 2003
increased $3.4 million to $57.9 million from $54.5 million
during the three months ended March 31, 2002. The increase in
expenses during the three months ended March 31, 2003 from
expenses reported during the comparable period a year ago was
attributable primarily to increases of $2.8 million, $1.2
million and $0.8 million in personnel, production and general
and administrative expenses, respectively, partially offset by a
$1.4 million decrease in interest expense.

        Summary of Three and Nine Month Financial Results

Total revenues

Total revenue increased $7.9 million and $31.5 million to $65.5
million and $196.8 million during the three and nine months
ended March 31, 2003, respectively, from total revenue of $57.6
million and $165.3 million during the three and nine months
ended March 31, 2002, respectively. The increase in total
revenue during the three months ended March 31, 2003 from the
same period a year ago resulted primarily from a $12.7 million
increase in gain on sale of loans over amounts reported during
the same period a year ago which was partially offset by
decreases of $3.1 million and $1.8 million in interest income
and loan servicing, respectively. Total revenue during the three
months ended March 31, 2003 also includes the $0.1 million of
debt extinguishment income.

The $31.5 million increase in total revenue during the nine
months ended March 31, 2003 over total revenue during the
comparable nine month period a year ago is due primarily to
higher gain on sale of loans and debt extinguishment income. The
increase was partially offset by an increase in the write-down
to the residual interest of $4.9 million during the 2003 period
over the write-down during the 2002 period, coupled with
decreases in origination fees, loan servicing and interest
income. Gain on sale of loans increased $21.1 million to $99.2
million during the nine months ended March 31, 2003 from $78.1
million during the same nine month period a year ago. Interest,
loan servicing and origination fees declined by $7.4 million,
$3.2 million and $1.3 million, respectively, to $55.9 million,
$6.3 million and $40.1 million during the nine months ended
March 31, 2003 from amounts reported during the same nine month
period a year ago. Excluding the $31.9 million write-down to the
residual interests and the $27.2 million of debt forgiveness
income during the nine months ended March 31, 2003 and the $27.0
million write-down to the residual interests during the nine
months ended March 31, 2002, total revenue increased $9.2
million during the nine months ended March 31, 2003 over total
revenue during the same period a year ago.

Total expenses

Total expenses increased $3.4 million and $16.5 million to $57.9
million and $175.1 million during the three and nine months
ended March 31, 2003, respectively, from $54.5 million and
$158.6 million during the three and nine months ended March 31,
2002, respectively. The $3.4 million increase in total expenses
during the three months ended March 31, 2003 over total expenses
during the comparable period in 2002 was attributable to
increases of $2.8 million, $1.2 million and $0.8 million in
personnel, production and general and administrative expenses,
respectively, partially offset by a decline of $1.4 million in
interest expense. The $16.5 million increase in total expense
during the nine months ended March 31, 2003 over total expense
during the same nine month period in 2002 was attributable to
increases of $14.7 million, $3.8 million and $3.0 million in
personnel, production and general and administrative expenses,
respectively, partially offset by a $5.0 million decline in
interest expense.

Loan Production

Total Production. During the three months ended March 31, 2003,
the Company originated a total of $1.0 billion of mortgage
loans, a decrease of $289.9 million, or 22.2%, from the $1.3
billion of total loan production reported during the three
months ended December 31, 2002, and an increase of $238.6
million, or 30.7% over the $778.2 million of total loan
production during the three months ended March 31, 2002. Total
loan production during the nine months ended March 31, 2003 was
$3.3 billion, an increase of $956.9 million, or 41.0%, over the
$2.3 billion of total mortgage loans originated during the
comparable nine month period in 2002. The Company's loan
origination volumes increased during the three and nine months
ended March 31, 2003 over those reported during the comparable
periods a year ago due to the continuation of the favorable
mortgage interest rate environment and, to a lesser extent, to
the issuance of new uniform underwriting guidelines throughout
the Company designed to improve the Company's competitive
position and to provide greater underwriting consistency among
the retail and broker origination channels.

Total Retail Production. The Company's total retail production
was $394.2 million during the three months ended March 31, 2003,
a decrease of $122.0 million, or 23.6%, from the $516.2 million
reported during the three months ended December 31, 2002, and an
increase of $19.6 million, or 5.2%, over the $374.6 million of
total retail production during the three months ended March 31,
2002. During the nine months ended March 31, 2003, total retail
production increased $196.7 million, or 16.9%, over the $1.2
billion of total retail production during the nine months ended
March 31, 2002.

               Traditional Retail Branch Network

During the three months ended March 31, 2003, loan origination
through the Company's traditional retail branch network
decreased $84.7 million, or 22.7%, to $287.8 million from the
$372.5 million reported during the three months ended December
31, 2002, and decreased $8.2 million, or 2.8%, from the $296.0
million of traditional retail branch production reported during
the three months ended March 31, 2002. During the nine months
ended March 31, 2003, mortgage loan production through the
Company's traditional retail branch network was $982.3 million,
an increase of $30.4 million, or 3.2%, over the $951.9 million
of traditional retail branch production reported during the
comparable nine month period a year ago.

                    National Loan Centers

Loan production through the Company's National Loan Centers,
which originate mortgage loans primarily through affiliations
with certain Internet sites, decreased $37.3 million, or 26.0%,
to $106.4 million during the three months ended March 31, 2003
from $143.7 million reported during the three months ended
December 31, 2002, and increased $27.8 million, or 35.3%, over
the $78.6 million reported during the comparable three month
period a year ago. Mortgage loan production through the
Company's National Loan Centers was $380.4 million during the
nine months ended March 31, 2003, an increase of $166.3 million,
or 77.7%, over the $214.1 million of production during the
comparable nine month period a year ago. The increase in the
National Loan Centers' production during the three months and
nine months ended March 31, 2003 over their production levels
during the comparable periods in 2002 was due, in part, to a
continuation of the generally favorable mortgage interest rate
environment during those periods as compared to the same periods
in 2002. Additionally, the increase in the National Loan
Centers' production during the nine months ended March 2003 over
that of a year ago was due, in part, to the fact that March 2002
period production included loan production from the Company's
second National Loan Center that commenced operation in November
2001.

Total Broker Production. The Company's total broker loan
production during the three months ended March 31, 2003 was
$622.6 million, a decrease of $167.9 million, or 21.2%, from the
$790.5 million of total broker production reported during the
three months ended December 31, 2002, and increased $219.1
million, or 54.3%, over the $403.5 million of total broker loan
production during the three months ended March 31, 2002. Total
broker loan production during the nine months ended March 31,
2003 was $1.9 billion, an increase of $760.3 million, or 65.0%,
over the $1.2 billion of total broker production reported during
the nine months ended March 31, 2002.

The decrease in the Company's total broker production during the
three months ended March 31, 2003 when compared to such
production during the three months ended December 31, 2002 was
due primarily to seasonality factors in the 2003 period. The
increase in the Company's total broker production during the
three and nine months ended March 31, 2002 was attributable to
improved market penetration due to changes in the Company's
underwriting guidelines which improved product availability in
the wholesale channel and increased utilization by brokers of
the Company's broker telemarketing and Internet platform. In
addition, the Company's broker production benefited from the
continuation of the favorable mortgage interest rate
environment.

          Traditional Regional Broker Office Network

Mortgage loan production from the traditional regional broker
office network during the three months ended March 31, 2003 was
$543.8 million, which decreased $159.1 million, or 22.6%, from
$702.9 million of traditional regional broker office network
production during the three months ended December 31, 2002, and
increased $173.8 million, or 47.0%, over the $370.0 million of
traditional regional broker office network production during the
three months ended March 31, 2002. During the nine months ended
March 31, 2003, mortgage loan production through the Company's
traditional regional broker office network was $1.7 billion, an
increase of $626.6 million, or 57.7%, over the $1.1 billion of
traditional regional broker office network production during the
comparable nine month period in 2002.

               Broker Telemarketing and Internet

Broker mortgage loan production through telemarketing and the
Internet was $78.7 million during the three months ended March
31, 2003, a decrease of $8.9 million, or 10.2%, from the $87.6
million reported during the three months ended December 31,
2002, and an increase of $45.2 million over the $33.5 million
reported during the three months ended March 31, 2002.

During the nine months ended March 31, 2003, broker mortgage
loan production through telemarketing and the Internet was
$218.1 million, an increase of $133.7 million over the $84.4
million reported during the nine months ended March 31, 2002.

             Loans dispositions and loan servicing

Loan Dispositions

Total loan dispositions through securitizations and whole loan
sales for cash during the three and nine months ended March 31,
2003 were $1.2 billion and $3.3 billion, respectively, compared
to $0.8 billion and $2.3 billion during the three and nine
months ended March 31, 2002, respectively. The Company's
increased loan dispositions during the three and nine months
ended March 31, 2003 over the comparable periods a year ago are
related to the Company's increased loan origination volumes
during the 2003 periods over production levels reported during
the same periods a year ago.

During the three months ended March 31, 2003, the Company did
not dispose of any of its mortgage loan production through
securitizations, but securitized $132.8 million of mortgage
loans during the comparable three month period a year ago. Whole
loan sales for cash during the three months ended March 31, 2003
were $1.2 billion, double the $624.0 million of whole loan sales
during the three months ended March 31, 2002. During the nine
months ended March 31, 2003, the Company securitized $315.0
million of mortgage loans compared to $542.8 million during the
comparable period a year ago. During the nine months ended March
31, 2003, the Company continued to be more reliant on whole loan
sales, selling $3.0 billion of whole loans for cash compared to
$1.8 billion of whole loan sales for cash during the nine months
ended March 31, 2002.

The Company relied more heavily upon whole loan sales than upon
securitizations as its loan disposition strategy during the
three and nine months ended March 31, 2003 and 2002 due to
attractive pricing conditions prevailing in the whole loan
markets during such periods and, to a lesser extent, due to the
limited capacity in the Forward Residual Sale Facility
("Residual Facility"), which expired on March 31, 2003.

As previously reported, the residual interest created in the
$315.0 million securitization which closed during the nine
months ended March 31, 2003 was sold for $8.7 million of cash to
an affiliate of the Company under its Residual Facility. The
Company sold for cash to an unrelated, third party mortgage
banking company the mortgage servicing rights and the rights to
the prepayment penalties on the underlying mortgage loans in the
securitization.

Loan servicing

At March 31, 2003 and June 30, 2002 the Company's total
servicing portfolio was $2.0 billion and $2.3 billion,
respectively, of which $1.9 billion and $2.2 billion,
respectively, or 95.3% and 94.6%, respectively, was serviced in-
house. Loans in securitization trusts serviced in-house declined
to $852.7 million at March 31, 2003 from $1.2 billion at June
30, 2002 due to mortgage loan run-off. The Company's servicing
portfolio at March 31, 2003 and June 30, 2002 included
approximately $1.1 billion and $991.0 million, respectively, of
loans serviced for others on an interim basis, which includes
loans sold where servicing has yet to be transferred and loans
held for sale. The Company's servicing portfolio was $2.4
billion at March 31, 2002, of which $2.2 billion, or 94.2%, was
serviced in-house.

                    Other announcements

The Company also announced that it renewed two existing $300.0
million committed revolving repurchase facilities with new
maturity dates of July 15, 2003 and September 30, 2003.

As previously reported, on April 25, 2003, the Company executed
a commitment letter with Greenwich Capital Financial Products,
Inc., pursuant to which Greenwich agreed to provide the Company
with a financing facility of up to $82.9 million secured by
certain of the Company's residual interests and servicing
advances, subject to certain conditions, including the
negotiation and execution of a definitive loan agreement. The
Company intends to use the proceeds from this facility, along
with other corporate funds, to redeem the Company's outstanding
9.125% Senior Notes due November 2003. The Company anticipates
completing the financing with Greenwich prior to the maturity of
its 9.125% Senior Notes due November 2003. The Company can give
no assurance that it will be able to successfully negotiate and
execute a definitive loan agreement or satisfy any other
conditions required to complete the financing.

Aames Financial Corporation is a leading home equity lender, and
at March 31, 2003 operated 89 traditional retail branches, 2
National Loan Centers and 4 traditional regional broker offices
throughout the United States.


ACTERNA CORP: Honoring $1.4M of Prepetition Employee Obligations
----------------------------------------------------------------
Acterna Corp., and its debtor-affiliates' employees can be
divided into four different groups:

    (1) full and part time employees who work in the Debtors'
        communications test businesses;

    (2) full and part time employees who work in the Debtors'
        industrial computing and communications businesses;

    (3) full and part time employees who work in the Debtors'
        digital color correction systems businesses; and

    (4) independent contractors providing services relating to
        the operation of the Debtors' businesses.

The Debtors also compensate the independent outside directors
serving on Acterna's Board of Directors.

                      Salaries and Wages

In the ordinary course of their businesses, the Debtors incur
payroll obligations to 1,440 employees, excluding 128
independent contractors, in the United States in connection with
their communications test, industrial computing and
communication, and digital color correction systems business
segments.

Normally, the Debtors pay their Employees other than the
Independent Contractors on the 15th and last day of the month.
As of the Petition Date, the Debtors estimate that their
obligations to the Employees for unpaid salary and wages
aggregate $1,417,500.

                          Commissions

Certain Employees are entitled to receive commissions, aside
from base compensation, if they increase the Debtors' net
revenues through product sales, customer development, or the
retention of current customers.  Depending on the type of
compensation program, the commissions are paid to eligible
Employees on a monthly basis.  The Debtors estimate that
$4,495,387 in commissions is owed to 172 Employees for services
these Employees rendered prepetition.

                       Withheld Tax Payments

The Debtors are required by law to withhold from an employee's
wage amounts related to federal, state and local income taxes,
and social security and Medicare taxes and remit these to the
appropriate tax authorities.  On a monthly basis, the Debtors
remit $3,710,000 in Payroll Taxes.  As of the Petition Date, the
Debtors estimate that the unpaid Payroll Taxes total $577,870.

                      Garnishment Obligations

The Debtors are also required by law to garnish the wages of
certain employees due to child support or other obligations.  As
of the Petition Date, the Debtors estimate that $4,000 has been
withheld but not paid to the appropriate entity on account of
the garnishments.

                Independent Contractor Obligations

Compensation of Independent Contractors varies according to the
terms of each Independent Contractor's agreement with the
Debtors.  The Debtors estimate that $819,991 will be owed to the
Independent Contractors for services rendered through, but
excluding, the Petition Date.  The Debtors have no payroll tax
obligations with respect to the Independent Contractors.

                   Outside Director Obligations

Acterna's Outside Directors' compensation program provides for a
$75,000 annual retainer for each director and $1,500 in
additional payments for each director per board meeting
attended. The payments are made to each Outside Director at the
beginning of each quarter.  Each director receives one fourth of
the annual retainer fee for the services to be rendered during
the prospective quarter, plus the payment for all board meetings
attended in the prior quarter.  As of the Petition Date, the
Debtors estimate that the unpaid compensation to Outside
Directors aggregate $116,250.

All in all, the Debtors expect to pay $7,430,998 in total
Payroll Obligations as of the Petition Date.

                         Employee Benefits

As is customary in most large companies, the Debtors also keep
various employee benefit plans and policies for their Employees.
These benefit plans and policies can be divided into the eight
categories:

    (1) vacation, personal days, sick time and holiday pay;
    (2) medical, health, life and dental insurance;
    (3) severance benefits;
    (4) incentive benefits;
    (5) 401(k) plan benefits;
    (6) tuition reimbursement;
    (7) the automobile allowance plan; and
    (8) relocation benefits.

The Debtors deduct specified amounts from the Employees' wages
in connection with some Employee Benefits, like insurance and
401(k) Plan contributions.

                         FTO Benefits

Under the Debtors' flexible time-off plan, eligible Employees
accrue paid time off, including vacation, personal or sick time,
based on weekly hours worked and length of service at the
Debtors.  All regular full-time and part-time employees are
entitled to FTO Time under the FTO Plan.  Pursuant to the FTO
Plan, eligible Employees accrue FTO Time at a certain rate of
days per year with a limit as to the maximum number of days
which can be carried over to the next year.  For instance,
eligible employees accrue FTO Time at a rate of 15 days per year
and reach the maximum of 25 days per year after 10 years of
service.  For Communications Test Employees, FTO Time may be
carried over to the next year up to 25 days per year per
employee.  Any remaining time is forfeited.  Eligible Employees
are paid their full wage for each vacation, personal or sick
day, up to the maximum number of days accrued by the Employee
under the FTO Plan.

Before the Petition Date, the Debtors incurred $1,023,000 per
month on average in respect of FTO Time.

                 Health and Welfare Benefits

The Debtors sponsor several Health and Welfare Benefits like
insurance plans, including, medical, prescription drug program,
dental, vision care, employee assistance program, short-term
disability, long-term disability, executive long term
disability, life, accidental death and dismemberment, business
travel accident, and flexible medical and dependant spending.

The Debtors estimate that their aggregate monthly expenditure
under the Health and Welfare Plans for Employees is $1,380,000
per month.  Because of the manner in which expenses are incurred
and claims are processed under the Health and Welfare Plans, it
is difficult for the Debtors to determine the accrued
obligations under the Health and Welfare Plans outstanding at
any particular time.  The Debtors estimate that, as of the
Petition Date, the obligations that have accrued but have not
been paid to or on the Employees' behalf under the Health and
Welfare Plans aggregate $501,000.

                      Severance Benefits

The Debtors' severance policy provides for, upon termination,
three-eighth months' pay per year of service with Acterna, with
a minimum of 1-1/2 months' pay and a maximum of 4-1/2 months'.
For employees at or above the director level, an additional
month's pay will be provided although the total amount will not
exceed 4-1/2 months' pay.  The severance amount is paid in one
lump sum in the pay period after the employee's termination.

In addition to the severance pay, limited outplacement services
are provided along with benefits under the Consolidated Omnibus
Budget Reconciliation Act.  The Debtors do not believe that
there are currently any accrued and unpaid obligations in
respect of Severance Benefits.  However, they may incur
severance obligations postpetition.

                      Incentive Benefits

The Debtors make cash payments in respect of Incentive Benefits.
Certain of the Employees participate in a Management Incentive
Plan or an Employee Incentive Plan.  Under the MIP and EIP,
Employees receive payments that are tied to certain financial
benchmarks as set in accordance with competitive market data.
The Debtors' fiscal year commences in April and ends in March of
the following year.  An audit is conducted each May of the
Debtors' books and records to determine payments, if any, due
pursuant to the MIP and EIP.  Due to the positive financial
performance of the Debtors' color correction systems business in
fiscal year 2003, the da Vinci Employees have accrued payments
under the MIP and EIP, subject to the audit.  It is unlikely
that any other Employees have accrued any MIP or EIP payments.
The Debtors estimate that as of the Petition Date, $1,030,000
will be owed to the da Vinci Employees with respect to the MIP
and EIP.

The Debtors have also established bonuses for certain employees
in connection with specified initiatives to either raise revenue
or reduce expenses.  The Debtors owe 178,211 for the prepetition
Miscellaneous Bonuses.

                       401(k) Benefits

The Debtors withhold from the wages of participating Employees
contributions toward the 401(k) Plan.  The Debtors do not
believe that any amounts are due in respect of 401(k) Plan
contributions prepetition.

                       Tuition Benefits

The Debtors maintain a discretionary tuition reimbursement plan
designed to encourage employees to continue their formal
education.  Pursuant to the Educational Assistance Program, and
at the Debtors' sole discretion, eligible Employees are
reimbursed up to $7,500 per benefit year for college tuition and
fees and career-related certificate courses.  The Debtors also
provide for up to ten renewable scholarships of up to $5,000
each year to dependent children of Employees.  Before the
Petition Date, the Debtors paid $30,000 per month with respect
to Tuition Expenses and Scholarship Expenses.  As of the
Petition Date, the Debtors estimate that accrued and unpaid
Tuition Obligations total $90,000.

                        Allowance Plan

The Debtors customarily provide certain Employees, like sales
persons, officers and directors, with a monthly car allowance as
part of their employment packages.  Car Allowances vary from
$500 to $1,000 a month depending on the Employee.  The Debtors
owe $18,936 in unpaid Allowance Plan Obligations as of the
Petition Date.

                      Relocation Benefits

As a global enterprise with operations in some 31 countries, the
Debtors often request their Employees to relocate on a temporary
or permanent basis to other offices in accordance with their
business requirements.  The Employees, including new hires, who
relocate at the Debtors' request are reimbursed for various
expenses, including, rental lease payments, moving and
transportation costs, dependent education assistance and annual
visit privileges.

The Debtors also pay taxes for those Employees working abroad to
the extent the Employees' tax liability exceeds the federal,
state and social security taxes that would have been paid by
that Employees if they were employed only in the United States.
The Debtors also pay certain additional expenses in connection
with their working abroad, including housing allowance,
education allowance, home visitations, and repatriation costs.
Since January 2003, the Debtors have averaged $59,850 per month
in respect of Relocation Obligation payments.  The Debtors
accrued $60,000 in outstanding Relocation Obligations as of the
Petition Date.

                Business Expense Reimbursement

The Debtors customarily reimburse Employees who incur business
expenses in the ordinary course of performing their duties on
the Debtors' behalf.  These Reimbursement Obligations include
travel and entertainment expenses the Employees incurred through
the use of their own funds or credit cards.  Because the
Employees do not always submit claims for reimbursement
promptly, it is difficult for the Debtors to determine the exact
amount of Reimbursement Obligations outstanding at any
particular time.  Nevertheless, the Debtors estimate that
$221,000 in Reimbursement Obligations have accrued as of the
Petition Date.

       Employee Administration & Retiree Benefit Plans

The Debtors utilize the services of medical, dental and vision
plan administrators, 401(k) plan administrators, stock option
plan administrators, employee assistance program administrators,
short and long term disability providers, life and accident
insurance providers, flexible spending accounts administrators,
employee recruiters and temporary agencies, and other outside
professionals to facilitate the administration and maintenance
of their books and records with respect to their Employee
Benefit Plans.  The Debtors estimate that $64,000 in Benefit
Administration Obligations have accrued and remain unpaid as of
Petition Date.

Michael F. Walsh, Esq., at Weil, Gotshal & Manges LLC, in New
York, asserts that the Debtors' payment of their Payroll and
Employee Benefit Obligations at this time is necessary and
appropriate.  Mr. Walsh points out that any delay in paying
their Employee Obligations will adversely impact the Debtors'
relationship with the Employees and will irreparably impair the
Employees' morale, dedication, confidence, and cooperation.  The
Employees' support for the Debtors' reorganization efforts are
critical to the success of those efforts.

"At this early stage, the Debtors simply cannot risk the
substantial damage to their businesses that would inevitably
attend any decline in their Employees' morale attributable to
the Debtors' failure to pay wages, salaries, benefits and other
similar items," Mr. Walsh says.

To ensure the Debtors' continued business operations, Judge
Lifland allows the Debtors to pay outstanding Prepetition
Employee Obligations.  Judge Lifland also directs the
disbursement banks to honor and pay all checks issued or to be
issued, and fund transfers requested or to be requested, by the
Debtors in respect of the Prepetition Employee Obligations.
(Acterna Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


AEGIS COMMS: Obtains Waiver of Defaults Under Credit Agreement
--------------------------------------------------------------
Aegis Communications Group, Inc. (OTC Bulletin Board: AGIS), a
leading provider of multi-channel customer relationship
management to Fortune 1000 and progressive companies, reported
its results for the first quarter of 2003.

                           REVENUES

First quarter 2003 revenues from continuing operations remained
constant at $40.4 million as compared to the same period last
year, but were $7.1 million, or 21.3% better than 2002 fourth
quarter revenues of $33.3 million. The increase in revenues
versus the quarter ended December 31, 2002 was centered
principally in new programs and expansion of work from three
existing clients, each of which increased volumes quarter over
quarter.

                         OPERATING LOSS

Operating loss for the first quarter of 2003 was $2.0 million as
compared to operating losses of $2.5 million in the fourth
quarter of 2002 and $1.0 million in the prior year first
quarter. The decline in operating loss over the quarterly
comparative period of a year ago is primarily attributable to
the increase in cost of services due to data and sales lead
costs for an enhanced pay for performance project that began in
January 2003.

"I am pleased to report our second consecutive quarter of
double-digit revenue growth," commented Herman Schwarz,
President and Chief Executive Officer. "Our improved revenues
are reflective of client confidence and Aegis' improved position
in the market. Our clients are continuing to count on us to
provide critical outsourcing needs and creative solutions for
servicing their customers and growing their revenue base. Our
expanded pay for performance project with a key client, although
temporarily depressing operating profits in its early phases, is
an important step to future revenue and earnings growth of our
company."

                            NET LOSS

The Company incurred a net loss available to common shareholders
of $4.9 million, or $0.09 per common share, for the quarter
ended March 31, 2003. During the prior year comparable quarter,
the Company incurred a net loss available to common shareholders
of approximately $47.3 million, or $0.91 per common share.

Revenue Mix. Together, inbound CRM and non-voice & other
revenues represented 79.1% of the Company's revenues in the
first quarter of 2003 versus 79.5% in the first quarter of 2002.

Cost of Services. For the quarter ended March 31, 2003, cost of
services increased by approximately $2.4 million, or 8.9%, to
$28.8 million versus the quarter ended March 31, 2002. Cost of
services as a percentage of revenues for the quarter ended March
31, 2003 increased to 71.2%, from 65.3% during the comparable
prior year period. The increase in cost of services is mainly
due to data and sales lead costs for an enhanced pay for
performance project that began in January 2003.

Selling, General and Administrative. Selling, general and
administrative expenses were reduced 10.9% to $10.5 million in
the quarter ended March 31, 2003 versus $11.8 million the prior
year first quarter. As a percentage of revenue, selling, general
and administrative expenses for the quarter ended March 31, 2003
were 26.1% as compared to 29.3% for the prior year period. The
reduction in selling, general and administrative expenses over
the three months ended March 31, 2003 is primarily attributable
to the Company's on-going cost optimization efforts that
centered around reducing labor and associated employee benefit
costs, and reducing occupancy costs.

Depreciation and Amortization. Depreciation and amortization
expenses decreased $0.1 million, or 3.2% in the quarter ended
March 31, 2003 as compared to the quarter ended March 31, 2002.
As a percentage of revenue, depreciation and amortization
expenses were 7.7% in the quarter ended March 31, 2003 versus
7.9% in the quarter ended March 31, 2002.

Income Tax Provision. The Company has not provided an income tax
benefit to the operating losses incurred during the quarter
ended March 31, 2003, as such benefit would exceed the projected
realizable deferred tax asset.

Loss from Discontinued Operations. As reported previously, on
April 12, 2002, the Company completed the sale of assets of
Elrick & Lavidge, its marketing research division, to Taylor
Nelson Sofres Operations, Inc., a wholly-owned subsidiary of
United Kingdom based Taylor Nelson Sofres plc. The Company
recognized a gain on disposal of the segment of $8.3 million,
which was reported in its second quarter 2002 results. Elrick &
Lavidge's revenues, reported in discontinued operations, for the
three months ended March 31, 2002 were $4.9 million.

Change in Accounting Principle. In connection with the adoption
of SFAS 142, the Company completed the transitional goodwill
impairment test during the quarter ended September 30, 2002. A
third party engaged by the Company performed the valuation. As a
result of the performance of the impairment test, the Company
concluded that goodwill was impaired, and accordingly,
recognized a goodwill impairment loss of $43.4 million. The non-
cash impairment charge was reported as a cumulative effect of an
accounting change retroactive to January 1, 2002, in accordance
with the provisions of SFAS 142. The goodwill impaired was
related to prior acquisitions for which the perceived
incremental value at time of acquisition did not materialize.

Cash and liquidity. Cash and cash equivalents at March 31, 2003
were $2.2 million as compared to $1.6 million at December 31,
2002. Working capital at March 31, 2003 was $13.5 million as
compared to $4.8 million at December 31, 2002. The increase in
working capital is primarily attributable to improved revenues
for the first quarter of 2003 versus the fourth quarter of 2002,
thus increasing the outstanding balance of accounts receivable
at March 31, 2003. Availability under the Company's revolving
line of credit was $5.4 million at March 31, 2003. Outstanding
bank borrowings under the line of credit at March 31, 2003 were
$15.4 million versus $5.9 million at December 31, 2002.

The Company's revolving line of credit agreement, which was due
to mature in June 2003 was amended on April 14, 2003. The credit
facility now expires on April 16, 2004. Subordinated debt
instruments held by certain shareholders, which were due to
mature in 2003, were also amended on April 14, 2003, and now
mature on April 17, 2004 or later. Based on the trailing twelve-
month covenants for the period ended March 31, 2003, the Company
was in default of certain covenants under the revolving line of
credit agreement. Such covenants, however, were waived under the
new amended agreement.

Aegis Communications Group, Inc. provides multi-channel customer
relationship management and marketing services, including
customer acquisition and retention programs, database
management, analytical services and market intelligence. Aegis'
services are provided to a blue chip, multinational client
portfolio through a network of client service centers employing
approximately 5,000 people and utilizing over 5,100 production
workstations. Further information regarding Aegis and its
services can be found on its Web site at
http://www.aegiscomgroup.com


AIR CANADA: Judge Farley Approves New Amended CIBC Agreement
------------------------------------------------------------
Air Canada provides the following update on the airline's
restructuring under the Companies' Creditors Arrangement Act:

          Court Approval of CIBC Amended New Contract
        on Aerogold and Additional Financing Commitment

Mr. Justice J. Farley of the Superior Court of Justice of
Ontario today granted approval of the amended new contract
between Air Canada and CIBC with respect to the CIBC Aerogold
Visa card program.


ALLEGIANCE TELECOM: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Lead Debtor: Allegiance Telecom, Inc.
       9201 North Central Expressway
             Dallas, Texas 75231

Bankruptcy Case No.: 03-13057

Debtor affiliates filing separate chapter 11 petitions:

Entity                                           Case No.
------                                           --------
Allegiance Telecom of New York, Inc.             03-13055
Allegiance Telecom, Inc.                         03-13057
Adgrafix Corporation                             03-13060
ALGX Business Internet, Inc.                     03-13061
Allegiance Internet, Inc.                        03-13062
Allegiance Telecom Company Worldwide             03-13064
Allegiance Telecom International, Inc.           03-13066
Allegiance Telecom of Arizona, Inc.              03-13067
Allegiance Telecom of California, Inc.           03-13069
Allegiance Telecom of Colorado, Inc.             03-13070
Allegiance Telecom of Florida, Inc.              03-13073
Allegiance Telecom of Georgia, Inc.              03-13074
Allegiance Telecom of Illinois, Inc.             03-13075
Allegiance Telecom of Indiana, Inc.              03-13076
Allegiance Telecom of Maryland, Inc.             03-13077
Allegiance Telecom of Massachusetts, Inc.        03-13078
Allegiance Telecom of Michigan, Inc.             03-13079
Allegiance Telecom of Minnesota, Inc.            03-13080
Allegiance Telecom of Missouri, Inc.             03-13081
Allegiance Telecom of Nevada, Inc.               03-13082
Allegiance Telecom of New Jersey, Inc.           03-13084
Allegiance Telecom of North Carolina, Inc.       03-13085
Allegiance Telecom of Ohio, Inc.                 03-13088
Allegiance Telecom of Oklahoma, Inc.             03-13090
Allegiance Telecom of Oregon, Inc.               03-13092
Allegiance Telecom of Pennsylvania, Inc.         03-13093
Allegiance Telecom of Texas, Inc.                03-13095
Allegiance Telecom of the District of Columbia,  03-13097
Allegiance Telecom of the Virginia, Inc.         03-13098
Allegiance Telecom of the Washington, Inc.       03-13099
Allegiance Telecom of the Wisconsin, Inc.        03-13100
Allegiance Telecom Purchasing Company            03-13101
Allegiance Telecom Service Corporation           03-13103
Coast to Coast Telecommunications, Inc.          03-13104
Hosting.com, Inc.                                03-13105
InterAccess Telecommunications Co.               03-13106
Jump.Net, Inc.                                   03-13107
Shared Technologies Allegiance, Inc.             03-13108
Virtualis Systems, Inc.                          03-13109

Type of Business: Allegiance Telecom, Inc. is a holding company
                  with subsidiaries operating in 36 major
                  metropolitan areas in the U.S. who provide a
                  package of telecommunications services,
                  including local, long distance, international
                  calling, high-speed data transmission and
                  Internet services and customer premise
                  communications equipment sales and
                  maintenance services.

Chapter 11 Petition Date: May 14, 2003

Court: Southern District of New York (Manhattan)

Judge: Robert D. Drain

Debtors' Counsel: Jonathan S. Henes, Esq.
                  Matthew Allen Cantor, Esq.
                  Kirkland & Ellis
                  Citigroup Center
                  153 East 53rd Street
                  39th Floor
                  New York, NY 10022-4675
                  Tel: (212) 446-4972
                  Fax: (212) 446-4900

Total Assets: $1,441,218,000

Total Debts: $1,397,494,000


ALTERRA HEALTHCARE: Court Okays KPMG as Accountants & Advisors
--------------------------------------------------------------
Alterra Healthcare Corporation, sought and obtained approval
from the U.S. Bankruptcy Court for the District of Delaware to
retain KPMG LLP as Accountants and Auditors, Tax Advisors, and
Financial Advisors to the Debtors.

The Debtor anticipates that KPMG may render:

  A) Accounting and Auditing Services

       (i) Audit and review examinations of the financial
           statements of the Debtor as may be required from time
           to time;

      (ii) Analysis of accounting issues and advice to the
           Debtor's management regarding the proper accounting
           treatment of events;

     (iii) Assistance in the preparation and filing of the
           Debtor's financial statements and disclosure
           documents required by the Securities and Exchange
           Commission;

      (iv) Assistance in the preparation and filing of the
           Debtor's registration statements required by the
           Securities and Exchange Commission in relation to
           debt and equity offerings; and

       (v) Performance of other accounting services for the
           Debtor as may be necessary or desirable.

  B) Tax Advisory Services

       (i) Advice and assistance to the Debtor regarding tax
           planning issues, including, but not limited to,
           assistance i11 estimating net operating loss
           carryforwards, federal taxes, and state and local
           taxes;

      (ii) Advice and assistance on the tax consequences of
           proposed plans of reorganization, including, but not
           limited to, assistance in the preparation of Internal
           Revenue Service ruling requests regarding the future
           tax consequences of alternative reorganization
           structures;

     (iii) Assistance regarding transaction taxes and state and
           local sales and use taxes;

      (iv) Assistance regarding tax matters related to the
           Debtor's employee retirement plans;

       (v) Assistance regarding real and personal property tax
           matters, including, but not limited to, review of
           real and personal property tax records, negotiation
           of values with appraisal authorities, preparation and
           presentation of appeals to local taxing jurisdictions
           and assistance in litigation of properly tax appeals;

      (vi) Assistance regarding any existing or future IRS,
           state and/or local tax examinations; and

     (vii) Other advisory, advice, research, review, planning or
           analysis regarding tax issues as may be requested
           from time to time.

C) Financial Advisory Services

       (i) Assistance in the preparation and review of reports
           or filings as required by the Bankruptcy Court or the
           Office of the United States Trustee, including, but
           not limited to, schedules of assets and liabilities,
           statement of financial affairs, mailing matrix and
           monthly operating reports;

      (ii) Review of and assistance in the preparation of
           financial information for distribution to creditors
           and other parties-in-interest, including, but not
           limited to, analyses of cash receipts and
           disbursements, financial statement items and proposed
           transactions for which Bankruptcy Court approval is
           sought;

     (iii) Assistance with implementation of bankruptcy
           accounting procedures as required by the Bankruptcy
           Code and generally accepted accounting principles,
           including Statement of position 90-7;

      (iv) Assistance with issues relating to the confirmation
           of a plan including assistance with the preparation
           of liquidation analyses, or other documents necessary
           for confirmation;

       (v) Assistance with claims resolution procedures,
           including, but not limited to, analyses of creditors'
           claims by type and entity; and

      (vi) Other such functions as requested by the Debtor or
           its counsel to assist the Debtor in its business and
           reorganization.

The Debtor has employed KPMG LLP as its auditor since 1995.
These prior engagements afforded KPMG LLP an intimate
familiarity with the books, records, financial information and
other data maintained by the Debtor and is qualified to continue
to provide accounting and auditing, tax advisory, and financial
advisory services to the Debtor.  As such, retaining KPMG LLP is
an efficient and cost effective manner in which the Debtor may
obtain the requisite services.

As asserted by Reginald C. Reed in his affidavit, KPMG LLP is a
"disinterested person" as that term is defined in the Bankruptcy
Code.

The customary hourly rates for KPMG's accounting and auditing,
tax advisory, and financial advisory services are:

     Accounting and Auditing
          Partners                               $450 - $500
          Managers                               $350 - $400
          Senior Associates                      $250 - $300
          Associates                             $175 - $225

     Tax Advisory Services:
          Partners                                $650
          Directors                               $600
          Senior Managers                         $550 - $580
          Managers                                $420 - $500
          Supervising Seniors/Senior Associates   $330

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

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


AMES DEPARTMENT: Asks Court to Clear Stipulation with Wausau
------------------------------------------------------------
Ames Department Stores, Inc., and its debtor-affiliates obtained
prepetition workers compensation insurance coverage from Wausau
Insurance Company.  In this regard, the Debtors provided certain
collateral for Wausau's benefit, specifically, $2,000,000 in
surety bonds and $1,600,000 in letters of credit.

The Debtors acknowledge that they are currently in default of
their obligations for the paid losses and retrospective rating
adjustments under the Insurance Policies.  They acknowledge that
Wausau is entitled to make immediate calls of the Bonds and
immediate draws on the Letters of Credit.

To provide for an orderly disposition of the Collateral pledged
to Wausau, the Debtors and Wausau stipulate and agree that:

  (a) To recover the outstanding obligations of the Debtors
      under the insurance policies, Wausau will first call the
      Bonds and then exercise its rights under the Letters of
      Credit;

  (b) The Debtors will fully cooperate with Wausau in connection
      with its call of the Bonds and its draw under the Letters
      of Credit;

  (c) Wausau will provide the Debtors with a regular accounting
      of all claims paid under the Insurance Policies from time
      to time; and

  (d) The Debtors acknowledge that the aggregate dollar amount
      of their workers compensation obligations covered by the
      Insurance Policies exceeds the aggregate dollar amount of
      funds available in the Collateral.  Thus, Wausau is
      entitled to exercise its rights against the full
      Collateral amount.

Thus, the Debtors ask the Court to approve the Stipulation.
(AMES Bankruptcy News, Issue No. 37; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


ARCIS CORP: March 31 Working Capital Deficit Widens to $11 Mill.
----------------------------------------------------------------
Arcis Corporation (RKS-TSX) announced its unaudited financial
results for the three months ended March 31, 2003:

                   Financial Highlights
     (000's except per share amounts and percentages)
      -----------------------------------------------
                                   Three Months Ended
                                        March 31
                                   2003         2002     Change
                                    $            $           %

Gross revenue                     24,723       24,428       1%
Net revenue                       14,427       18,725     -23%
Net income before tax              1,892        1,919      -1%
Net income                         1,314        1,357      -3%
EBITDA                             6,962        7,789     -11%
Cash flow from operations          6,476        7,873     -18%

                        FINANCIAL POSITION

Capital expenditures                 152         278      -45%
Data library expenditures         14,237      11,023       29%
Working capital (deficiency)     (11,565)     (8,446)      37%
Long-term debt & capital leases    2,246                  100%
Convertible debentures             6,289       6,161        2%
Shareholders' equity              18,847      18,884         -

                             HIGHLIGHTS

We are pleased to report our Q1 2003 financial results, which
demonstrate ongoing relatively high levels of profitability and
cash flow, resulting from improving industry fundamentals,
effective sales and cost management efforts. Financial
highlights and significant operating achievements include the
following:

- Completion of 365 km(2) of 3D data for our data library,
  focused in North East British Columbia, Northern and Central
  Alberta

- Re-sale revenue in Q1 totalled $2.4 million, representing a
  287% increase over the same quarter in 2002

- Arcis' Processing and Data Marketing business units increased
  revenues by 37% and 24% respectively

- Administrative expense for the three months ended March 31,
  2003 decreased $888 thousand or 34% over the same period in
  2002

- Significant data library projects in progress at March 31,
  2003 contributed to a working capital deficit of $11.5 million
  which will substantially be reversed upon the completion of
  these projects in the months of April and May 2003

- Gross revenue decline of 13% in Q1 2003 compared to the same
  quarter of 2002 primarily due to decreased activity in the
  acquisition group and a higher proportion of data library
  programs being completed in the second quarter of 2003
  compared to 2002

Arcis Surveys continued to achieve success in 2003 with re-sale
revenue reaching $2.4 million in the first quarter, which
represents the second highest re-sale level of any quarter in
Arcis' history. The level of re-sale revenue is attributable to
the careful selection of programs which Arcis has completed
combined with a successful sales strategy and the increasing
size of the data library.

Pre-sale revenue for the first three months of 2003 was $2.9
million lower than the same period in 2002. This decrease is
largely due to the timing of the winter data library projects.
Due to the late onset of the winter, several large data library
programs will not be completed until early Q2. The costs
incurred on these programs were included in the data library at
March 31, and pre-sale revenue on incomplete programs was
included in deferred revenue. At March 31, 2003, deferred
revenue totaled $8.3 million compared to $1.6 million at March
31, 2002.

Arcis Surveys achieved a 63% pre-funding level on projects
completed in the quarter which is below the previously disclosed
minimum requirement of 70%. Once the remainder of 2003 programs
are completed in Q2 2003, the average pre-funding level will
reach approximately 74%.

Since inception, Arcis has invested $59 million of capital in
the data library. At March 31, 2003, cumulative sales, including
both pre-sale and re-sale revenue, on this asset totaled $64
million which represents a payout of 108%.

It is management's policy to have its seismic data library
independently evaluated. At June 30, 2002, the estimated fair
market value of the data library was $64 million, as determined
by a firm registered with APEGGA (Association of Professional
Engineers, Geologists, and Geophysicists of Alberta), which was
approximately twice the net book value of the data library. Fair
market price is defined as the highest price that a willing and
knowledgeable seller could expect to obtain from a willing and
knowledgeable purchaser with whom the seller deals at arm's
length. Management therefore believes the carrying value of the
seismic data library at March 31, 2003 is conservative. There
can be no assurance, however, that the fair market price could
be obtained in a single sale transaction. It is management's
intention to have the data library evaluated in June 2003,
following completion of significant Q1 and Q2 2003 projects.

                         ACQUISITION

The industry challenge that the Acquisition group faced in 2002
continued into the first quarter of 2003, resulting in a
decrease in net income and operating results compared to the
same period in 2002. Management had not expected any material
improvement in the results for 2003 due to ongoing excess
capacity in the seismic acquisition market in Canada. The
results for the first quarter were further hindered, however, by
a late start to the 2003 winter, caused by warm weather in
January, and a downward pricing trend. The winter season has
extended into Q2, on the other hand, resulting in higher than
anticipated activity levels in April and May. Unfortunately, the
increase in Q2 activity is not expected to compensate for the
disappointing results of the first quarter.

During Q1 2003, the Acquisition unit recorded a large
participation survey for the Surveys group. Revenue for these
services (eliminated for accounting purposes) totaled $1.3
million in Q1 2003 compared to $2.2 million in Q1 2002. By using
our own crews to shoot seismic data for the data library, Arcis
is able to reduce the cash outlay required and control the
quality of the data.

Management continues to analyze this business unit and will
adopt appropriate strategies to deal with prevailing industry
conditions.

                         PROCESSING

Arcis Processing achieved strong results in the first quarter of
2003 compared to the same period in 2002. Revenue levels
continued to rise with a 37% increase in Q1 2003 over the same
period in 2002. The group achieved pre-tax profitability of $248
thousand compared to a loss of $38 thousand in Q1 2002. This
increase is directly attributable to higher revenue levels,
restructuring efforts undertaken in 2002 and effective cost
management practices. Management has been able to lower
administrative costs in Q1 2003 compared to 2002 due to its cost
management practices.

Management continues to invest in computer hardware systems
upgrades and the development of proprietary processing software.
The addition of the latest technology in hardware and software
has improved the unit's efficiency and effectiveness of
processing seismic data, particularly on large complex 2D, 3D,
land and marine processing projects. These improvements have
been recognized by the group's client base, proven by a steady
backlog of projects, and four consecutive quarters of
profitability.

                         DATA MARKETING

The data marketing group achieved a strong improvement in both
revenue and profitability in Q1 2003, with revenue increasing by
24% compared to the same quarter in the prior year. Data
brokerage sales levels are influenced by the interest of oil and
gas companies in vintage 2D data. New junior oil and gas
companies have begun to emerge in the wake of significant
industry consolidation; these companies are typical consumers of
this type of data.

                           CORPORATE

Administrative costs for the company decreased by $888 thousand,
or 34%, in Q1 2003 compared to the same period in 2002. This
decrease in administrative costs was primarily due to:

- restructuring and unusual charges in Q1 of 2002 totaling $790
  thousand, compared to $nil in Q1 of 2003

- restructuring initiatives implemented in 2002 are now having
  positive effects on the financial results of the company

- ongoing cost containment practices

Depreciation expense decreased $154 thousand compared to Q1 of
2002 as a result of certain acquisition equipment becoming fully
depreciated.

Interest expense decreased by 15% in Q1 2003 compared to the
same period in the prior year in spite of having higher average
debt levels in Q1 2003. Timely collection of receivables has
allowed Arcis to minimize the use of our line of credit and
interest rates on floating rate debt were also lower in Q1 of
2003 compared to the prior year.

               FINANCIAL CONDITION AND LIQUIDITY

At March 31, 2003, Arcis had a working capital deficit of $11.6
million compared to a deficit of $3.2 million at December 31,
2002. Arcis' working capital deficit has increased primarily due
to the timing of certain data library projects. Contributing to
the working capital deficit is $7 million of deferred survey
advances (included in deferred revenue) relating to data library
projects in progress. When the programs are completed in early
Q2 2003, the deferred revenue will be recognized as revenue,
significantly reducing the working capital deficit.

Pursuant to the accounting standard relating to the
classification of long-term debt which became effective in 2002,
Arcis has included the full amount of its long-term debt
facilities that have a demand repayment feature as a current
liability. The long-term portion which has been classified as a
current liability totals $1.6 million at March 31, 2003.

Management recognizes that the current working capital levels
need to be further strengthened. To continue improvement of
working capital, management will continue to exercise prudence
when making capital spending decisions, balancing growth with
capital stewardship. Data library expenditures for 2003 are
expected to total approximately $17 million, with prefunding
commitments averaging 74%. Management intends to raise debt
capital to improve working capital levels in Q2 or Q3 of 2003.
Future data library expenditures will then be reduced in 2004 to
facilitate further strengthening of the balance sheet.

Arcis had a debt (current and long-term portions of long-term
debt, capital leases and convertible debentures) to equity ratio
of 0.66:1 at March 31, 2003 compared to 0.58:1 at March 31,
2002.

At March 31, 2003, Arcis was not in compliance with the working
capital covenant of the HSBC convertible debenture, however a
waiver of this covenant was provided by the lender. Based on
current projections, the Corporation will likely be in
compliance, with respect to this working capital covenant during
the remainder of 2003 and into 2004. If Arcis does not remain in
compliance with this covenant, the Corporation might find it
necessary to secure alternative financing.

                             OUTLOOK

Data library re-sales, processing revenues, and data marketing
sales all demonstrated marked improvement in Q1 2003 compared to
the first quarter of last year. While this success may be
attributed to increased market share, it also indicates a modest
revival of exploration spending. High commodity prices supported
increased industry activity levels in the first quarter of 2003,
however ongoing political unrest and capital market trepidation
were likely factors constraining exploration spending. Due to
over capacity in the acquisition segment of the seismic
industry, the acquisition business unit was not able to realize
similar increases as Arcis' other businesses. Management planned
for a similar year in 2003 compared to 2002 in terms of revenue,
however the increases in revenue seen in Q1 2003 in three of
Arcis' lines of business may be early indicators of a
strengthening market. Management also remains confident that
improved profitability will be achieved in 2003 resulting from
cost reduction and efficiency initiatives begun in 2002.

Data library expenditures will total approximately $17 million
by the end of Q2 2003. These expenditures are focused in North
East British Columbia, Northern and Central Alberta. By
aggressively growing the data library between 2000 and 2003,
Arcis has developed a large, valuable data base which will
provide long term cash flow for the company. Significantly
reduced data library expenditures are planned for the remainder
of 2003 and 2004, with focus turned to harvesting the data
library asset to return to more positive working capital levels.

Management will continue to seek merger or consolidation
opportunities that could facilitate balance sheet health and
enhance growth prospects. The Board of Directors regularly
discusses and assesses opportunities or strategies with the
potential to achieve higher shareholder values.

Over the past three years, Arcis has achieved a higher average
return on equity than an average of the Toronto Stock Exchange
Oil and Gas Service Index (OGSX) companies; Arcis has averaged a
one hundred and twenty nine percent higher return on equity
compared to the average return on equity for the these
companies. It is management's goal to continue to outperform
this benchmark.


BASIS100: Amends Normal Course Issuer Bid for Conv. Debentures
--------------------------------------------------------------
Basis100 Inc. (TSX: BAS) will be amending the terms of its
proposed Normal Course Issuer Bid for Convertible Debentures,
previously announced on May 12, 2003. Basis100 is undertaking
that - provided the Debentureholders and Shareholders approve
the sale of the Company's Canadian Lending Solutions Business
and the sale is completed - the Company will escrow funds from
the proceeds of the sale for purchases of up to $2 million in
aggregate principal amount of debentures under the NCIB.
However, the maximum price Basis100 will pay for each $1,000
principal amount debenture will not exceed $720.

The NCIB is subject to regulatory approval, and any purchases
under it will be made in accordance with the rules and policies
of the TSX. The NCIB is proposed to commence in late May
following and subject to closing of the sale of the Basis100
Canadian Lending Solutions Business, and will conclude on the
earlier of the date on which purchases under the Issuer Bid have
been completed or one year following the filing, respectively.
The Company will use its best efforts to continue the NCIB for a
second year in order to repurchase additional debentures,
subject to regulatory approval.

The Debentures are listed on the TSX under the symbol "BAS.DB".

A future announcement will be made when the bid it approved and
a start date is set.

Basis100 Inc. is a business solutions provider that fuses
mortgage processing knowledge and experience with proprietary
technology to deliver exceptional services. The company's
delivery platform defines industry-class best execution
strategies that streamline processes and creates new value in
the mortgage lending markets. For more information about
Basis100, please visit http://www.Basis100.com

At March 31, 2003, the Company's balance sheet shows a
working capital deficit of about CDN$5 million.


BETHLEHEM STEEL: ISG Reaches Agreement with Pennsylvania DEP
------------------------------------------------------------
Pennsylvania Department of Environmental Protection Acting
Secretary Kathleen A. McGinty announced an agreement between DEP
and International Steel Group Inc., of Cleveland in which one of
the company's subsidiaries will assume responsibility for the
treatment of mine drainage at six underground mines and three
coal refuse disposal areas in Cambria, Somerset and Butler
counties.

The mines and CRDAs were formerly operated by Bethlehem Steel
Corp. and its subsidiary, BethEnergy Mines Inc. The company also
will reclaim surface features at a seventh underground mining
site and CRDA in Washington County.

A second agreement allows ISG to continue operations at
Bethlehem Steel Corp.'s steel manufacturing facilities while
associated environmental permits are transferred from Bethlehem
Steel to the new ownership. DEP has committed to assisting ISG
in the transfer of these permits.

"We are happy to be working with ISG to treat the polluted mine
drainage left behind at these mine sites and for its willingness
to assume its environmental responsibilities," said McGinty.
"These sites posed a severe threat not only to the local
waterways of Cambria, Somerset, Butler and Washington counties,
but also to a public reservoir in Mineral Point, Cambria County.
We're thrilled that this agreement removes the threat that would
have existed had the mine pools completely flooded and broken
out on the surface."

ISG President and CEO Rodney Mott expressed appreciation for the
Commonwealth's problem-solving approach to these important
issues.

"ISG is committed to meeting our environmental
responsibilities," Mott said. "While the Pennsylvania coal mine
issues were inherited as a part of our recent acquisition of
Bethlehem Steel, we wanted to address them quickly and have been
pleased and impressed with the problem-solving approach and
rapid response of Acting Secretary McGinty and the Pennsylvania
DEP. This agreement will help ensure that we can manage our coal
mine issues in a business-like manner with the full support of
the Commonwealth."

The agreement calls for Bethlehem's permits on the sites to be
transferred to ISG by approximately June 1. It also calls for
the company to establish an operational improvement plan by July
1 through which the company will try to streamline treatment
operations to reduce treatment costs. DEP will thoroughly review
the company's plan to ensure the quality of treatment remains
high.

The plan also calls for ISG to establish a trust or other
financial vehicle to provide for perpetual treatment of the
discharges at the sites once its operational treatment plans are
in place. The company will begin escrowing assets immediately to
accumulate the necessary amount to fund the trust or other
financial vehicle.

"The establishment of the escrow account guarantees that we'll
see funds set aside immediately for treatment while the
company's operational plans are worked out," McGinty said. "The
company will begin by putting $1 million into an escrow fund
within 30 days and an additional $150,000 each month thereafter,
and those funds will be moved into the trust fund once it's
established."

The agreement calls for the pumping and treatment of polluted
mine water at numerous bituminous coal mine sites and for the
completion of land reclamation responsibilities at the Marianna
#58 Mine and CRDA in West Bethlehem Township, Washington County.
At that site, three mineshafts were filled but not permanently
sealed after mining ceased. A slurry pond also needs to be re-
vegetated, and nearly 30 buildings and several erosion and
sedimentation ponds still remain on the surface.

DEP originally estimated the need for a $47 million trust to
provide for perpetual treatment of the mine water, but ISG
believes through streamlining operational costs it can bring
that figure down to approximately $20 million. ISG will detail
its plans through an operational agreement to be presented to
DEP by July 1.

"We will examine the operational plan thoroughly to ensure that
sufficient means are provided by the trust to pump and treat the
water at these sites on a permanent basis in order to protect
the waterways and residents of these counties," McGinty said.
"We will work with the company to ensure enough money is
provided for proper treatment."

The sites are:

-- Mine #31 in Jackson Township, Cambria County.

-- Mine #32 (a/k/a Behula Mine) in Cambria Township, Cambria
   County.

-- Mine #33 (a/k/a Cambria Slope) in Cambria Township, Cambria
   County.

-- Mine #38 in Croyle Township, Cambria County.

-- Mine #77 and a CRDA in East Taylor Township, Cambria County.

-- Windber Mine #78 and a CRDA in Paint Township, Somerset
   County.

-- The Fawn #91 CRDA located in Clinton Township, Butler County.

-- Marianna #58 Mine and a CRDA in West Bethlehem Township,
   Washington County.

There are long-term water treatment obligations at most of these
sites. Groundwater has been flowing into and forming pools in
the large underground voids remaining inside the mines. At some
of these mines, if the mine pools are allowed to rise without
restraint, DEP believes the water will ultimately break through
to the surface, discharging millions of gallons of polluted,
acidic mine water into the surrounding area.

At other mines, DEP believes the mine pools will rise to a level
where they will flow into and impact adjacent mine pools. In
order to prevent these adverse effects and to keep each mine
pool at a safe level, the mine pools must be pumped, and the
pumped mine drainage must be treated before it is discharged to
the receiving streams.

At the CRDAs, acidic water is currently being directed into
either the mine pools and then into treatment facilities or into
a series of surface treatment facilities. If this direction of
the water is discontinued and the water is allowed to flow
freely, it will either contribute to the rise and break out of
some of the mine pools or flow directly into and pollute nearby
waters of the Commonwealth.

In October 2001, BethEnergy Mines Inc. and Bethlehem Steel Corp.
filed for Chapter 11 bankruptcy protection. A year later, DEP
ordered the companies to continue pumping and treating the water
and to complete their land reclamation responsibilities at the
Marianna #58 Mine and CRDA in Washington County.

In the second agreement reached last week, DEP agreed to allow
ISG to continue operations at Bethlehem Steel Corp.'s steel
manufacturing facilities while associated environmental permits
are transferred from Bethlehem Steel to the new ownership.

"By purchasing these facilities and assets for continued
operations, ISG has ensured that the bankruptcy of Bethlehem
Steel Corporation would not result in the shutdown of all these
facilities and the subsequent loss of jobs," McGinty said.

For more information on mine reclamation, visit the PA PowerPort
at http://www.state.pa.us


BETHLEHEM STEEL: Wants July 11 Fixed as Employee Claims Bar Date
----------------------------------------------------------------
Bethlehem Steel Corporation and its debtor-affiliates propose to
establish July 11, 2003, at 5:00 p.m. as deadline for present
and former employees and their beneficiaries to file proofs of
claim.

George A. Davis, Esq., Weil, Gotshal & Manges LLP, in New York,
explains that fixing an Employee Bar Date will enable the
Debtors to conduct their analysis of prepetition employee and
benefits claims in a timely and efficient manner.  The Employee
Bar Date will give Employees ample opportunity to prepare and
file Proofs of Claim.

The Debtors relate that each Employee who asserts a prepetition
Claim must file an original, written Proof of Claim which
substantially conforms to the proposed Proof of Claim or
Official Form No. 10 so as to be received by the Employee Bar
Date. Proofs of Claim may be sent to the Bethlehem Steel Claims
Docketing Center either by:

    -- mailing the original Proof of Claim to:

             United States Bankruptcy Court
             Southern District of New York
             Bethlehem Steel Claims Processing
             P.O. Box 5043, Bowling Green Station
             New York, New York 10274-5043

       or

    -- delivering the original Proof of Claim by messenger or
       overnight courier to:

             United States Bankruptcy Court
             Southern District of New York
             Bethlehem Steel Claims Processing
             One Bowling Green, New York 10004-1408

The Bethlehem Steel Claims Docketing Center will not accept
Proofs of Claim sent by facsimile or telecopy.  Proofs of Claim
are deemed timely filed only if the Claims are actually received
by the Docketing Center by the Bar Date.

These Employees are not required to file a Proof of Claim:

    (1) any Employee that has already properly filed with the
        Clerk of Court a Proof of Claim against the applicable
        Debtor or Debtors utilizing a claim form which
        substantially conforms to Official Form No. 10;

    (2) any Employee:

          (i) whose Claim is listed on the Debtors' Schedules of
              Assets and Liabilities;

         (ii) whose Claim is not described as "disputed,"
              "contingent," or "unliquidated";

        (iii) whose Claim is asserted against a specific Debtor;

         (iv) who does not dispute the specific Debtor against
              which it asserts a Claim; and

          (v) who does not dispute the amount or nature of its
              Claim;

    (3) any Employee having a Claim under Sections 503(b) or
        507(a)(1) of the Bankruptcy Code as an administrative
        expense on any of the Debtors' Chapter 11 cases;

    (4) any Employee whose Claim has been paid or otherwise
        satisfied in full by any of the Debtors; or

    (5) any Employee who has or may have a Claim that has been
        allowed by a Court order entered on or before the
        Employee Bar Date.

With the assistance of Bankruptcy Services LLC, the Debtors
tailored the Official Form No. 10 to conform to their complex
cases.  For each Employee whose Claim is listed in the
Schedules, the Debtors included in the Claim Form a description
of:

    * the amount of an Employee's claim;

    * the specific Debtor against which the Claim is against as
      reflected in the Schedules;

    * the type of Claim held by the Employee -- non-priority
      unsecured, priority unsecured, or secured; and

    * whether the claim is disputed, contingent, or
      unliquidated.

Mr. Davis asserts that the Modified Claim will permit the
Employee to readily ascertain how his Claim is scheduled against
a specific Debtor without having to examine the Schedules.  If
the Proof of Claim does not identify a specific Debtor or
scheduled amount, or the Employee disagrees with the Debtor or
scheduled amount identified on the Proof of Claim, Mr. Davis
says, the Employee is required to file a Proof of Claim
identifying the Debtor against which and the amount for which
the Claim is asserted.

Other modifications to the Official Form include:

    * allowing the Employee to correct any incorrect information
      contained in the name and address portion;

    * modifying the categories in the Basis for Claim and
      Unsecured Priority Claims sections; and

    * instructions for completing and filing the Proof of Claim.

In addition, Mr. Davis notes that each Proof of Claim filed must
be:

    (i) written in English;

   (ii) denominated in lawful U.S. currency; and

  (iii) signed by the claimant or its authorized agent.

Any Employee who fails to file a Proof of Claim by the Bar Date
will be forever barred, estopped, and enjoined from asserting
the Claim against the Debtor.  The applicable Debtor and its
property will be forever discharged from any and all
indebtedness or liability with respect to the Claim, and the
Employee will not be permitted to vote to accept or reject any
Chapter 11 plan or participate in any distribution in the
Debtors' Chapter 11 cases on account of or to receive further
notices regarding the Claim.

Aside from the Proof of Claim Form, the Debtors will mail a
notice of the Bar Date Order and pertinent information on the
filing of Claims.  Bankruptcy Services will be responsible for
mailing the Employee Bar Date Notices and the Proof of Claim
Forms.

Since there are about 90,000 Employees to whom the Debtors
intend to provide notice, Bankruptcy Services has advised the
Debtors that it will be able to complete the mailing of the
Claim Forms and the Notices within 10 business days after the
Court issues the Bar Date Order.  Accordingly, Mr. Davis
maintains that the Employee will have 45 days to prepare and
file a Claim.  This is substantially longer than the 20-day
notice period required by Rule 2002(a)(7) of the Federal Rules
of Bankruptcy Procedure, Mr. Davis notes.

The Debtors also plan to publish the Bar Date Notice in national
editions of The Wall Street Journal and The New York Times at
least 30 days before the Bar Date.  The Bar Date Notice will
also be posted at their Web site, http://www.bethsteel.com
(Bethlehem Bankruptcy News, Issue No. 36; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

Bethlehem Steel Corp.'s 10.375% bonds due 2003 (BHMS03USR1) are
trading at about 4 cents-on-the-dollar, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BHMS03USR1
for real-time bond pricing.


BROCADE COMMS: Fiscal Q2 2003 Results Show Slight Improvement
-------------------------------------------------------------
Brocade Communications Systems, Inc. (Brocade(R)) (Nasdaq: BRCD)
reported financial results for its second quarter of fiscal year
2003, which ended April 26, 2003 (Q2 03). Net revenue for Q2 03
was $130.9 million, which compares to $123.1 million reported in
the first quarter of fiscal year 2003 (Q1 03), and $135.0
million reported in the second quarter of fiscal year 2002 (Q2
02).

Reporting on a Generally Accepted Accounting Principles (GAAP)
basis, net loss for Q2 03 was $146.0 million, or $0.57 per
share. This compares to a GAAP net loss for Q1 03 of $6.9
million, or $0.03 per share, and GAAP net income of $14.0
million or $0.06 per share in Q2 02.

Non-GAAP net loss for Q2 03 was $1.0 million or $0.00 per share,
as compared to non-GAAP net income of $0.3 million or $0.00 per
share in Q1 03. There was no difference between GAAP and non-
GAAP net income in Q2 02. Non-GAAP net income for Q2 03 excludes
in-process research and development, deferred stock compensation
and other acquisition costs related to the acquisition of
Rhapsody Networks, Inc., in Q2 03, and severance, asset
impairment, and other charges related to the restructuring of
business operations that was announced on April 10, 2003. A
reconciliation between GAAP and non-GAAP information is attached
to this press release.

"I am pleased with the results that we have delivered in meeting
our expectations of revenue, gross margin and operating
expense," said Greg Reyes, Brocade Chairman and CEO. "Moving
forward, we remain committed to driving revenue growth and
profitability."

         Q2 03 Financial and Business Highlights

-- Cash and investments were $904.6 million at the end of Q2 03,
   an increase of $11.2 million from Q1 03.

-- Days sales outstanding in accounts receivable at the end of
   Q2 03 were 46 days, compared to 53 days at the end of Q1 03.

-- Brocade announced OEM availability of the Brocade Fabric
   Operating Environment, an array of significant new features
   and capabilities for the Brocade Fabric Operating System
   (Fabric OS).  With this software release, Brocade now offers
   the industry's first fabric-based SAN security, enhanced SAN
   management tools, and new high-availability and connectivity
   features.

-- Brocade completed its acquisition of Rhapsody, acquiring all
   outstanding shares of Rhapsody in exchange for 20.4 million
   shares of Brocade common stock.  In addition, Brocade will
   issue an additional 2.9 million shares of Brocade common
   stock if specified development milestones are satisfied.

-- EMC Corporation announced that they will develop intelligent
   infrastructure software for the new Brocade SilkWorm(R)
   Fabric Application Platform (SilkWorm Fabric AP), enabling
   new levels of data delivery, management, scalability, and
   performance in heterogeneous storage environments.

-- Brocade and VERITAS Software Corporation announced a joint
   development agreement in which VERITAS will develop volume
   management and storage resource management software
   technology for the SilkWorm Fabric AP.

-- Brocade announced that seven storage management companies,
   including Alacritus Software, CommVault Systems, FalconStor
   Software, Incipient, Inc., InterSAN, Inc., StoreAge
   Networking Technologies, Inc., and Topio have selected the
   SilkWorm Fabric AP on which to design new, fabric-based
   storage management software, demonstrating the rapidly
   growing industry support for fabric-based applications.

-- Brocade completed a restructuring program that included a
   workforce reduction of approximately nine percent.

Brocade offers the industry's leading intelligent platform for
networking storage. The world's leading systems, applications,
and storage vendors have selected Brocade to provide a
networking foundation for their SAN solutions. The Brocade
SilkWorm(R) family of fabric switches and software is designed
to optimize data availability and storage and server resources
in the enterprise. Using Brocade solutions, companies can
simplify the implementation of storage area networks, reduce the
total cost of ownership of data storage environments, and
improve network and application efficiency. For more
information, visit the Brocade Web site at
http://www.brocade.com

As reported in Troubled Company Reporter's February 19, 2003
edition, Standard & Poor's Ratings Services assigned its 'B+'
corporate credit and 'B-' subordinated debt ratings to Brocade
Communications Systems Inc. The outlook is stable.

San Jose, California-based Brocade Communications is a provider
of switching solutions for the fiber channel-based storage
networking market. The company has $550 million of rated debt.

"Financial flexibility provides downside ratings protection,
while weak industry conditions and profitability limit upside
potential in the rating," said Standard & Poor's credit analyst
Joshua Davis.


CANADIAN HYDRO: Banks Waive Covenant Breach Under Credit Pact
-------------------------------------------------------------
Canadian Hydro Developers, Inc. (TSX: KHD) reported earnings of
$325,108 ($0.01 per share, diluted) on generation of 60 million
kWh for the first quarter ended March 31, 2003 ("Q1 2003"),
compared to $429,982 on generation of 64 million kWh for Q1
2002. Cash flow from operations was $1,236,105 for Q1 2003,
compared to $1,446,222 for Q1 2002.

While a dramatic 145% improvement in average Power Pool of
Alberta prices received on the Company's merchant plants (Q1
2003 - $76/MWh; Q1 2002 - $31/MWh) improved revenue by 14% and
gross margins by 17%, increased interest on long-term debt and
administrative costs resulted in slightly lower earnings and
cash flow from operations in Q1 2003 compared to Q1 2002.
Approximately 15% of the Company's generation was exposed to the
Pool in Q1 2003 (Q1 2002 - 18%), with the balance being sold
under various long-term sales agreements.

Q1 2003 Achievements:

- Commenced commissioning of the Pingston Hydroelectric Plant
  (15 MW net). The plant began generating electricity on
  April 28, 2003, with commercial operations commencing on
  May 8, 2003;

- Entered into a letter of intent to sell green power for
  approximately 45% of the Alberta Government's power
  requirements, or 110,000 MWh per year, for 20 years. The green
  power to be sold will be from the $56 million Grande Prairie
  EcoPower(TM), which is expected to start construction in Q2
  2003; and

- Readied the Pingston Expansion (7.5 MW net) and Upper Mamquam
  (25 MW) Hydroelectric Projects for construction with
  regulatory approvals expected in Q2 2003.

"We are excited that we have achieved commercial operations at
Pingston," said John Keating, Chief Executive Officer. "This
plant represents a significant achievement for the Company and
will generate predictable, long-term stable cash flow."

On the topic of new projects, Mr. Keating noted, "The Grande
Prairie, Pingston Expansion, and Upper Mamquam projects are
excellent examples of our green growth strategy, which is based
on obtaining long-term contracts for the sale of power. Once
completed, these projects will add to the stable cash flows of
our existing asset base. We continue to develop new projects
that will foster ongoing growth with economic returns to
investors."

With respect to the unfavourable AEUB/NRCB decision on the 80 MW
Dunvegan Hydroelectric Project, Mr. Keating said, "While we were
obviously very disappointed with the Board's decision, we have
indicated to the Board that we expect to provide new evidence to
the Board for a review and variance application. We expect this
process to take up to eight months. We remain hopeful that we
will obtain approval for this green power project that will
benefit all Albertans."

Canadian Hydro is a developer, owner and operator of ten "run of
river" hydroelectric plants, three wind plants and one natural
gas-fired plant, totalling 103.9 MW net to the Company's
interest. In addition, other projects in excess of 215 MW are in
various stages of permitting for construction in the next five
years.

All of the Company's plants and projects are located in British
Columbia, Alberta, and Ontario. Canadian Hydro's wind and water
plants are certified under the EcoLogo(R) program. All of the
Company's future projects, including the Grande Prairie
EcoPower(TM) Centre, Pingston Expansion and Upper Mamquam
Hydroelectric Projects are slated for certification as low-
impact renewable energy facilities.

Canadian Hydro Developers, Inc. is committed to the concept of
low-impact power generation. Through its wind and run-of-river
hydro facilities, Canadian Hydro is demonstrating that
commitment to the benefit of the environment and its
shareholders.

Common shares outstanding: 52,590,539

               MANAGEMENT'S DISCUSSION AND ANALYSIS

The following MD&A should be read in conjunction with the
audited consolidated financial statements and MD&A included in
the Annual Report as at and for the year ended December 31,
2002.

Revenue

For Q1 2003, revenue increased 14% to $4,124,761 on generation
of 60 million kWh compared to $3,623,383 on generation of 64
million kWh in Q1 2002. The increase in revenue was primarily
due to an increase of 145% for average Pool prices received on
the Company's merchant plants (Q1 2003 - $76/MWh; Q1 2002 -
$31/MWh); offset partially by lower hydroelectric and wind
generation for the current quarter. The lower generation in Q1
2003 was the result of lower hydroelectric generation due to a
dry winter in Ontario; offset partially by higher water levels
in Alberta, and lower wind generation due to February being an
exceptionally high wind month in the prior year.

Approximately 85% of the Company's generation was sold pursuant
to long-term sales contracts in Q1 2003 (Q1 2002 - 82%). The
average price received by the Company for electricity from all
operations for Q1 2003 was $69/MWh (Q1 2002 - $57/MWh).

Operating Expenses

Operating expenses increased 6% to $1,036,440 in Q1 2003
compared to $981,880 in Q1 2002. Gross margins (revenue less
operating expenses; expressed as a percentage of revenue)
improved to 75% in Q1 2003 (Q1 2002 - 73%). The increase in
operating expenses was due primarily to capital maintenance
performed on three of the Alberta hydroelectric plants, which is
expensed by the Company. The increase in gross margins was due
primarily to higher revenues over primarily fixed operating
costs.

Interest Expense and Long-Term Debt

Interest on long-term debt (excluding capitalized interest) in
Q1 2003 increased 65% to $1,009,414 compared to $611,341 in Q1
2002. The increase in interest expense was due to increased
average long-term debt on completed projects and increased
interest rates in Q1 2003 compared to Q1 2002, as well as the
restructured debt financing, which closed on December 19, 2002.

Capitalized interest associated with construction-in-progress in
Q1 2003 was $467,000 compared to $270,000 in Q1 2002. The
increase was due to increased long-term debt associated with the
Pingston Hydroelectric Plant, which was completed and
operational in early May 2003.

Long-term debt (including current portion) as at March 31, 2003
was $70,668,136 (March 31, 2002 - $52,436,782) compared to
$71,907,189 as at December 31, 2002. The decrease was due to
regular repayments on the long-term debt during the quarter.

At March 31, 2003, the Company was not in compliance with one of
its Loan covenants, which requires the Company to maintain a
debt service ratio of not less than 1.3:1.0. The Company was not
in compliance with this covenant due to the Pingston
Hydroelectric Plant not being in operation in March 2003 as
originally expected. The Company's corporate bankers have waived
compliance for this covenant. Because the Pingston Hydroelectric
Plant became operational in early May 2003, management has
determined it is likely the Company will be in compliance with
all Loan covenant requirements at June 30, 2003 and will
continue to be for at least one year from the balance sheet
date. Accordingly, the Loan has been classified as a long-term
liability.

Subsequent to March 31, 2003, the Company accepted an offering
letter from its existing and two additional corporate bankers
for additional credit facilities in the amount of $63,900,000.
The credit facilities will consist of 364 day revolving
construction lines of credit in the amount of $59,400,000 and an
increase in the treasury risk line of credit by $4,500,000. The
credit facilities are to assist in the construction of the
Grande Prairie EcoPower(TM) Centre, Pingston Expansion and Upper
Mamquam Hydroelectric Projects. The Company expects to close
this financing by June 30, 2003.

Administration Expense

Administration expense increased 59% to $625,625 in Q1 2003
compared to $393,937 in Q1 2002, reflecting non-recurring costs
and certain expenditures incurred in Q1 2003 that were incurred
in the second quarter in the prior year. The non-recurring costs
of $95,115 consisted of increased legal costs associated with
the First Canadian Electric Inc. dispute (as described in Note
14(a) to the December 31, 2002 audited consolidated financial
statements). Capitalized administration costs associated with
construction-in-progress in Q1 2003 were $155,749 compared to
$113,973 in Q1 2002. The increase was due to costs incurred in
respect of the Pingston Hydroelectric Plant and the Grande
Prairie EcoPower(TM) Centre in Q1 2003 compared to one project
under construction in Q1 2002.

Depreciation Expense

Depreciation expense decreased to $838,584 for Q1 2003 (Q1 2002
- $885,033) due primarily to the Drywood Plant no longer being
depreciated due to its write-down to net recoverable value at
December 31, 2002.

Taxes

The Company does not anticipate paying income tax, other than in
respect of the Cowley Ridge Wind Plant, through its wholly owned
subsidiary, for several years. However, the Company is liable
for the Federal Tax on Large Corporations and Provincial Capital
Taxes in Ontario and British Columbia. The provision for these
taxes comprises the current tax provision.

Future income tax expense was $72,414 in Q1 2003 compared to
$131,207 in Q1 2002. The decrease was due to lower earnings in
the current quarter.

Cowley Ridge Wind Power Inc. is fully taxable, but is entitled
to recover approximately 175% of cash taxes paid annually
(limited to 15% of eligible gross revenue) in accordance with
the Revenue Rebate Regulation of the Alberta Small Power
Research and Development Act. This Regulation will apply until
the associated power sale agreements expire in 2013 (9.0 MW) and
2014 (9.9 MW).

          Net Earnings and Cash Flow from Operations

Net earnings decreased to $325,108 in Q1 2003 from $429,982 for
Q1 2002. The decrease was due to higher operating costs,
interest on long-term debt, and administration expenses; offset
partially by higher average prices received for electricity,
lower depreciation, and lower income taxes, as described above.
Similarly, excluding non-cash items, cash flow from operations
of $1,236,105 in Q1 2003 decreased from $1,446,222 in Q1 2002.

     Capital Expenditures and Prospect Development Costs

Capital expenditures decreased to $1,430,353 in Q1 2003 from
$6,050,651 in Q1 2002, reflecting the near completion of the
Pingston Hydroelectric Plant; offset partially by the readying
for construction of the Grande Prairie EcoPower(TM) Centre.
Prospect development costs in Q1 2003 were $451,977 (Q1 2002 -
$436,857), relating primarily to the Pingston Expansion (7.5 MW
net) and Upper Mamquam (25 MW) Hydroelectric Projects nearing
commencement of construction.

               Capital Resources and Liquidity

The Company currently has adequate capital resources on hand for
the completion of construction of the Pingston Hydroelectric
Plant. The Company anticipates funding the remaining
expenditures on the Grande Prairie EcoPower(TM), and funding the
Pingston Expansion and Upper Mamquam Hydroelectric Projects, as
well as any additional planned growth, through a combination of
cash flow from operations, new debt facilities and equity
issuances.

                              Outlook

The Pingston Hydroelectric Plant began commissioning in April
and achieved commercial operation in early May 2003. The plant
is one of the Company's marquis assets and will generate
predictable, long-term returns for decades to come.

With greater than 95% of the power sold under long-term
contracts, construction of the $56 million Grande Prairie
EcoPower(TM) Centre (25 MW) is expected to commence in Q2 2003
with completion by the end of Q4 2004.

The Company anticipates commencing construction on the Pingston
Expansion Hydroelectric Project (7.5 MW net) in Q2 or Q3 2003,
once regulatory approvals and debt financing have been obtained.
This $4.3 million project (net) involves the installation of a
third 15 MW turbine, expansion to the powerhouse, and 600 metres
of buried penstock. Start-up of this expansion is expected at
the beginning of Q2 2004. The power and green attributes are
sold to BC Hydro for 20 years.

The $35.1 million Upper Mamquam Hydroelectric Project (25 MW) is
nearing commencement of construction. The Company anticipates
regulatory approvals this summer. The power and green attributes
are sold to BC Hydro for 20 years.

On April 25, 2003, the Company gave notice to the Alberta Energy
and Utilities Board and Natural Resources Conservation Board of
its intention to seek a review and variance of the unfavorable
March 25, 2003 Board decision of the Board on the development of
the Dunvegan Hydroelectric Project. The Company anticipates that
it can provide new evidence to the Board within eight months
that may remove the uncertainty that remains with the project,
which would allow the Board to approve the project.

A wet spring combined with normal reservoir levels are positive
signs of a strong Q2 and Q3 for hydroelectric generation in
Alberta. These conditions allowed the Company's Belly River (3.0
MW) and Taylor (6.5 MW, net) hydroelectric plants that are
located on irrigation works to start-up for the season within
one week of last year's start-up. While snow packs were below
average in B.C. this past winter, a wet spring is a positive
sign for hydroelectric generation in Q2 and Q3 in B.C. Ontario
had a dry winter, which has continued into a dry spring and may
lower generation from Ontario in Q2 2003 compared to the same
period last year.

Pool prices continue to be strong in 2003 due to natural gas
supply tightening and demand improving, resulting in higher
natural gas and power prices. The average Pool price for April
2003 was $53/MWh, compared to $45/MWh for the month of April
2002, and $90/MWh for March 2003. The average forward Pool price
for the remainder of 2003 on the Alberta electricity forwards
market is $61/MWh.

In 2003, fluctuations in spot market prices will affect revenues
for the Drywood Plant (6 MW), the Taylor Hydroelectric Plant
(6.5 MW net) and approximately 50% of the Cowley North and
Sinnott Wind Plants (26 MW), which sell their power on the spot
market. Taylor only operates during the irrigation season in
Alberta, which typically runs from May through September.
Approximately 85% of the Company's power generation was sold
under long-term contracts during Q1 2003, which reduced the
Company's exposure to variable spot prices.

The Company's operations are based mainly on power generation
from hydroelectric and wind resources. Because of this, CHD's
financial results in one quarter may not be representative of
all quarters. The Company's hydroelectric plants located in B.C.
and Alberta (39.6 MW), including Pingston, typically have higher
revenue during the second and third quarters due to higher water
levels at the plants that operate all year, as well as the
spring start up of the Belly River and Taylor Hydroelectric
Plants that are located on irrigation works. The hydroelectric
plants located in Ontario (10.9 MW) typically have higher
revenue during the first and fourth quarters due to higher water
levels during the winter in Ontario and higher contract prices
during the October - March period annually. CHD's wind
generation plants (47.4 MW) typically have higher revenue in the
first and fourth quarters, during the "windy season", however,
these plants do not generate as much power as the Company's
hydroelectric facilities. While geographical and technological
diversification results in smaller quarterly fluctuations in
financial results, management expects financial results from the
second and third quarters to be higher than those from the first
and fourth quarters for 2003.

Canadian Hydro's March 31, 2003 balance sheet shows that its
total current liabilities outweighed its total current assets by
about $1 million.


CANNONDALE: Committee Retains KPMG to Provide Financial Advice
--------------------------------------------------------------
The appointed Official Committee of Unsecured Creditors of
Cannondale Corporation's chapter 11 case sought and obtained
approval from the U.S. Bankruptcy Court for the District of
Connecticut to retain and employ KPMG LLP as its financial
advisors.

The Committee is looking to KPMG to provide:

     i) Assistance in the review of reports or filings as
        required by the Bankruptcy Court or the Office of the
        United States Trustee, including schedules of assets and
        liabilities, statement of financial affairs, and monthly
        operating reports;

    ii) Review of the Debtor's financial information, including
        analyses of cash receipts and disbursements, financial
        statement items and proposed transactions for which
        Bankruptcy Court approval is sought;

   iii) Review and analysis of the reporting regarding cash
        collateral and any debtor-in-possession financing
        arrangements and budgets;

    iv) Evaluation of potential employee retention and severance
        plans;

     v) Assistance with identifying and implementing potential
        cost containment opportunities;

    vi) Assistance with identifying and implementing asset
        redeployment opportunities;

   vii) Analysis of assumption and rejection issues regarding
        executory contracts and leases;

  viii) Review and analysis of the Debtor's proposed business
        plans and the business and financial condition of the
        Debtor generally;

    ix) Assistance in evaluating reorganization strategy and
        alternatives available to the creditors;

     x) Review and critique of the Debtor's financial
        projections and assumptions;

    xi) Preparation of enterprise, asset and liquidation
        valuations;

   xii) Assistance in preparing documents necessary for
        confirmation;

  xiii) Advice and assistance to the Committee in negotiations
        and meetings with the Debtor and the bank lenders;

   xiv) Advice and assistance on the tax consequences of
        proposed plans of reorganization;

    xv) Assistance with the claims resolution procedures
        including analyses of creditors' claims by type and
        entity and maintenance of a claims database;

   xvi) Litigation consulting services and expert witness
        testimony regarding confirmation issues, avoidance
        actions or other matters; and

  xvii) Other functions as requested by the Committee or its
        counsel to assist the Committee in this Chapter 11 case.

Leon Szlezinger assures the Court that KPMG is a "disinterested
person" as that phrase is defined in the Bankruptcy Code.  Mr.
Szlezinger further discloses that KPMG's customary hourly rates
for financial advisory services are:

          Partners                      $540 to $600 per hour
          Managing Directors/Directors  $450 to $510 per hour
          Senior Managers/Managers      $360 to $420 per hour
          Senior/Staff Consultants      $270 to $330 per hour
          Associate                     $180 to $240 per hour
          Paraprofessionals             $120 per hour

Cannondale Corp., a leading manufacturer and distributor of high
performance bicycles, all-terrain vehicles, motorcycles and
bicycling and motorsports accessories and equipment, filed for
chapter 11 protection on January 29, 2003 (Bankr. Conn. Case No.
03-50117).  James Berman, Esq., at Zeisler and Zeisler
represents the Debtors in their restructuring efforts.  When the
Company filed for protection from its creditors, it listed
$114,813,725 in total assets and $105,245,084 in total debts.


CBR BREWING: Full-Year 2002 Net Loss Balloons to $25 Million
------------------------------------------------------------
CBR Brewing Company, Inc. (OTC Bulletin Board: CBRAF, CBRAE)
announced the results of its operations for the year ended
December 31, 2002, reporting net sales of $79,203,216 and a net
loss of $25,337,810, as compared to net sales of $80,367,307 and
a net loss of $3,527,352 for the year ended December 31, 2001.
Included in net loss for the year ended December 31, 2002 was a
charge of $17,349,398 for the impairment of property, plant and
equipment.  Included in net loss for the year ended December 31,
2001 was a charge of $3,450,530 for the impairment of and loss
on disposal of property, plant and equipment, restructuring
costs and write-off of investment in a subsidiary.  Net loss per
common share (basic and diluted) was $3.16 in 2002 and $0.44 in
2001. Weighted average common shares outstanding were 8,010,013
in 2002 and 2001 (basic and diluted).

For the years ended December 31, 2002 and 2001, the Company's
affiliate, Noble Brewery, recorded charges for the impairment of
property, plant and equipment and restructuring costs
aggregating $12,228,916 and $1,051,787, respectively.

During the years ended December 31, 2002 and 2001, the Company
sold 170,102 metric tons and 152,967 metric tons of beer,
respectively, an increase of 11.2%.  The increase in sales
volume during the year ended December 31, 2002 as compared to
the year ended December 31, 2001 was mainly attributable to the
increase in the sales volume of local brand beers, whereas the
decrease in net sales value of beer products was primarily
attributable to the lowering of the selling price for some of
the Pabst Blue Ribbon beer products in order to encourage
distributors to increase their respective promotional
activities.

The beer market in China has continued to experience a weakening
in consumer demand for foreign branded premium beers in China
and increasing competition from local and foreign premium brands
of beer.  In response, the Company has overhauled its operations
and marketing programs, reduced costs and introduced several new
local brand beers.  The Company expects that these adverse
market conditions will continue in 2003, resulting in operating
losses at least for the remainder of 2003.

During the three months ended March 31, 2003, the Company and
Noble Brewery experienced significant decreases in sales and
continuing operating losses.  The Company and Noble Brewery are
in the preliminary stages of assessing the potential effect, if
any, that this development may have on the Company's financial
position and results of operations at March 31, 2003, including
a possible further impairment charge with respect to property,
plant and equipment.

The Company, through its subsidiaries and affiliates, is engaged
in the production, distribution and marketing of Pabst Blue
Ribbon beer in China.  As of December 31, 2002, the Company
owned effective interests of 60%, 24% and 33% in three brewing
facilities in China producing Pabst Blue Ribbon beer that are
managed by the Company.  The Company produces Pabst Blue Ribbon
beer under a sub-license agreement with Guangdong Blue Ribbon
Group Co. Ltd., an affiliated company, which expires
concurrently with the expiration of the existing master license
agreement between Guangdong Blue Ribbon Group Co. Ltd. and Pabst
Brewing Company on November 6, 2003.

Licensing Matters:

Noble China Inc., is a Canadian public company that is the 60%
owner of Noble Brewery, a Pabst Blue Ribbon brewing facility
located in the City of Zhaoqing, China, in which the Company has
a 24% net equity interest.  In May 1999, Noble China entered
into a license agreement with Pabst Brewing Company granting it
the right to utilize the Pabst Blue Ribbon trademarks in
connection with the production, promotion, distribution and sale
of beer in China for 30 years commencing November 7, 2003.

To date, the Company and Noble Brewery have not obtained a
renewal of their respective Pabst Blue Ribbon sub-license
agreements, which expire on November 6, 2003.  The inability of
the Company or Noble Brewery to enter into an agreement with
Noble China under acceptable terms and conditions to allow the
Company and Noble Brewery to continue to produce, distribute and
market Pabst Blue Ribbon beer in China subsequent to November 6,
2003 would have a material adverse effect on the Company's
future results of operations, financial position and cash flows.

The Company's controlling shareholder, Zhaoqing City Lan Wei
Alcoholic Beverage (Holdings) Limited, a company controlled by
the City of Zhaoqing, owns a 19.6% equity interest in Noble
China.  On November 12, 2002, a new board of directors of Noble
China was elected, consisting of three candidates nominated by
Lan Wei.

As previously announced, Noble China continues to face serious
liquidity concerns in ongoing funding of its corporate
operations and interest on its CDN$30,000,000 of 9% Convertible
Subordinated Debentures, and as a result is in default of its
obligations under the Debentures.  The holders of the Debentures
are therefore in a position to enforce their rights on default.
If the Trustee or the holders of the Debentures elect to enforce
these rights, Pabst Brewing Company may be in a position to
terminate the Pabst master license agreement previously granted
to Noble China, which becomes effective on November 7, 2003.

Both Noble Brewery and the Company have substantial investments
in property, plant and equipment dedicated to the production of
Pabst Blue Ribbon beer in China.  In order to maintain each
entity's respective rights to produce, distribute and market
Pabst Blue Ribbon beer in China subsequent to November 6, 2003
and thus preserve the value of these investments, Lan Wei has
been exploring various ways to reorganize Noble China and
preserve the Pabst master license agreement in a manner that
would inure to the benefit of the Company.  Accordingly,
representatives of the City of Zhaoqing have been in discussions
with the holders of a majority of the Debentures regarding a
reorganization of Noble China and with Pabst Brewing Company
regarding a reorganization of Noble China and a restructuring of
the master license agreement.

These discussions have led to a preliminary agreement in
principle with the holders of a majority of the Debentures
regarding the reorganization of Noble China, which would involve
the settlement in full of the outstanding Debentures.  In
addition, a non-binding term sheet has been entered into with
Pabst Brewing Company with respect to certain amendments to the
master license agreement and its continuation after the
reorganization.

These preliminary agreements are both conditional on Noble China
being able to implement a formal reorganization of its
Debentures and issued capital.  The successful reorganization of
Noble China is subject to the preparation and execution of
definitive agreements and a plan of reorganization, compliance
with all applicable laws and regulations, and the funding,
approval and consummation of a court-approved reorganization
plan of Noble China.

In order to fund such reorganization efforts, Lan Wei borrowed
approximately $3,133,000 from the Company in March 2003, with
interest at 3.9% per annum, due and payable no later than
December 31, 2003.  Lan Wei also borrowed approximately
$2,410,000 from the Company in March 2003 to invest in
businesses affiliated with Lan Wei that sell beverage containers
to the Company, with interest at 3.9% per annum, due and payable
no later than June 30, 2003.

As a result of the uncertainty with respect to these matters,
there can be no assurances that Noble China will be successfully
reorganized or that the Company or Noble China will be able to
retain the right to produce and distribute Pabst Blue Ribbon
beer in China subsequent to November 6, 2003.


CENTERSPAN COMMS: Nasdaq Nixes Request for Continued Listing
------------------------------------------------------------
CenterSpan Communications Corporation (Nasdaq: CSCC) has
received a letter from Nasdaq denying CenterSpan's request for
continued listing on The Nasdaq National Market based on
MarketPlace Rule 4450(a)(3). CenterSpan has appealed the Nasdaq
Staff's decision to a Listing Qualifications Panel.  CenterSpan
cannot predict whether the Panel will approve CenterSpan's
request for continued listing.  If the appeal is denied,
CenterSpan will cease trading on The Nasdaq National Market and
will become eligible to have its stock quoted on the OTC
Bulletin Board.  Delisting will be postponed pending a
determination of the appeal by the Panel.

CenterSpan Communications Corporation is a venture stage company
that develops and markets secure software-based Internet and
intranet content delivery solutions for media and communications
service providers and corporate customers.  The company's C-
StarOne(TM) service solution enables low cost, reliable and
secure distribution of all digital media.

                         *    *    *

           Liquidity and Going Concern Uncertainty

The Company said in its SEC Form 10-K for the year ended
December 31, 2002:

"CenterSpan continued to experience operating losses during the
year ended December 31, 2002, and in the first three months of
2003, and we have never generated sufficient revenues from our
software-based content delivery operations to offset expenses.
We expect to continue to incur losses through 2003. CenterSpan
expects to incur approximately $1.0 million per quarter of
operating expenses and expects that significant ongoing
expenditures will be necessary to successfully implement our
business plan and develop and market our products.

"There is substantial doubt about our ability to continue as a
going concern. Execution of our plans and our ability to
continue as a going concern depend upon our acquiring
substantial additional financing, which we may be unable to do.
Management's plans include efforts to obtain additional capital,
through bridge loans and the sale of equity securities. We
cannot predict on what terms any such financing might be
available, but any such financing could involve issuance of
equity below current market prices and could result in
significant dilution to existing shareholders.

"CenterSpan has raised operating funds in the past by selling
our shares of our common stock. We may not be able to raise
additional funding. If we are unable to obtain adequate
additional financing or generate sufficient cash flow from
operations, management will likely be required to further
curtail our operations, and we will likely cease operations.

"In February 2002, we entered into an agreement with Sony Music.
Under the terms of the agreement, Sony makes recordings
available from its catalog of music performances for us to
distribute digitally via C-StarOne(TM) to various C-StarOne(TM)
service provider customers and their subscribers in the United
States and Canada. In exchange, we paid cash and issued stock
and warrants to Sony. The total value of the common stock,
warrants and cash was $3.7 million and is being amortized over
the three-year term of the agreement. We paid an initial content
fee of $500,000 in February 2002 upon execution of the
agreement. Under the terms of the agreement, a second content
fee payment of $500,000 was due September 1, 2002. In addition,
quarterly advance royalty payments of $250,000 each are payable
for four quarters beginning September 1, 2002. The second
content fee and the first three quarterly advance royalty
payments are due and payable to Sony. These payments, totaling
$1.25 million, have not been made as we are currently in
negotiations with Sony seeking to restructure or modify this
agreement. If we are unable to successfully restructure or
modify this agreement and these payment obligations, our
financial condition and business may be materially harmed and we
may be forced to cease operations.

"We use a direct sales group and marketing partnerships to sell
C-StarOne(TM) content delivery network services. Although we
have signed several customer service agreements, obtaining
delivery contracts with major providers of digital media is
crucial to our success."


COLUMBIA LABS.: Issuing 510K Shares to Biotech Value for $2.5MM
---------------------------------------------------------------
Columbia Laboratories, Inc. is offering an aggregate of 510,204
shares of its common stock directly to Biotech Value Plus Ltd.
at a price of $4.90 per share. Columbia will receive gross
proceeds of $2,500,000 before deducting expenses of the
offering.

Biotech Value Plus may be deemed to be an "underwriter" within
the meaning of the Securities Act of 1933, as amended, and any
profits on the sale of the shares of Columbia's common stock by
Biotech, and any discounts, commissions or concessions received
by Biotech may be deemed to be underwriting discounts and
commissions under the Securities Act.

Columbia Laboratories' common stock trades on the American Stock
Exchange under the symbol COB. On May 8, 2003, the last reported
sale price of the common stock on the AMEX was $5.35 per share.

Columbia Laboratories, Inc. is an international pharmaceutical
company dedicated to development and commercialization of
women's health care and endocrinology products, including those
intended to treat infertility, dysmenorrhea, endometriosis and
hormonal deficiencies. Columbia is also developing hormonal
products for men and a buccal delivery system for peptides.
Columbia's products primarily utilize the company's patented
Bioadhesive Delivery System (BDS) technology. For more
information, please visit http://www.columbialabs.com

Columbia Laboratories' March 31, 2003 balance sheet shows a
total shareholders' equity deficit of about $13 million.


CONGOLEUM CORP: Red Ink Continues to Flow in First Quarter 2003
---------------------------------------------------------------
Congoleum Corporation (AMEX: CGM) reported its financial results
for the first quarter ended March 31, 2003.

Sales for the three months ended March 31, 2003 were $53.6
million, compared with sales of $57.9 million reported in the
first quarter of 2002, a decrease of 7.4%. The net loss for the
quarter was $2.6 million versus a net loss of $0.6 million
(before a required accounting change) in the first quarter of
2002. The net loss per share was $.31 in the first quarter of
2003 compared with $.08 per share (before accounting change) in
the first quarter of 2002. The Company recorded a non-cash
transition charge of $10.5 million or $1.27 per share in the
first quarter of 2002 for impairment of goodwill as required for
adoption of Statement of Financial Accounting Standards No. 142.

Roger S. Marcus, Chairman of the Board, commented "Congoleum's
first quarter sales were negatively affected by further declines
in the manufactured housing industry as well as soft remodel
demand due to economic weakness and low consumer confidence.
These declines were partly offset by higher sales of builder
products, as the new housing market has remained healthy, as
well as increased sales of DuraStone. The lower sales, combined
with increases in insurance and benefit costs and a less
profitable product mix all hurt profitability despite continued
improvements in manufacturing efficiency. Although improvement
in demand for manufactured housing products does not appear
imminent, there are several other reasons why we are optimistic
about the balance of 2003. First, we are firmly committed to
managing our expenses and continuing to improve efficiencies.
Second, we have two exciting new products that will be
introduced early in the second half of the year. Finally, the
economic outlook and consumer confidence should improve with the
war in Iraq effectively over. These factors should contribute to
improving results as we move forward."

Mr. Marcus continued, "Our plans to resolve our asbestos related
litigation continue to progress, as evidenced by the signing of
an agreement on April 10th, 2003 with attorneys representing a
majority of known pending claimants. We are encouraged by this
latest development and remain cautiously optimistic that we can
achieve our goal of completing the confirmation of our
reorganization plan by the end of the year."

Congoleum Corporation is a leading manufacturer of resilient
flooring, serving both residential and commercial markets. Its
sheet, tile and plank products are available in a wide variety
of designs and colors, and are used in remodeling, manufactured
housing, new construction and commercial applications. The
Congoleum brand name is recognized and trusted by consumers as
representing a company that has been supplying attractive and
durable flooring products for over a century.

Congoleum is a 55% owned subsidiary of American Biltrite Inc.
(AMEX: ABL).


CONSECO: Anchorage Police et. al. Takes Legal Action vs. Debtors
----------------------------------------------------------------
Beginning April 7, 2000, 40 separate class actions were filed
against Conseco and related entities.  The actions were
consolidated on September 22, 2000, under the caption In re
Conseco Inc. Securities Litigation, IP-0585-CY/S.  The Anchorage
Police & Fire Retirement System and the State of Louisiana
Firefighters' Retirement System are Lead Plaintiffs and Class
Representatives for the Class.  The Adversary Proceeding is
designated Case No. 03A00655.

Anchorage is a public pension fund system organized for the
benefit of retired police officers and firefighters in
Anchorage, Alaska.  The fund has total assets exceeding
$500,000,000.

Louisiana is a pension fund organized for the benefit of retired
firefighters of the State of Louisiana.  It is located in Baton
Rouge, Louisiana and has total assets exceeding $610,000,000.

On September 28, 2000, the U.S. District Court for the Southern
District of Indiana appointed Anchorage and Louisiana as Lead
Plaintiffs and Bernstein, Litowitz, Berger & Grossman as Lead
Counsel.  The Class consists of institutions and individuals
that purchased any Conseco securities.

On May 21, 2002, the parties reached a Stipulation of
Settlement. The Stipulation provided that Conseco would pay
$120,000,000 in cash in two separate installments of $95,000,000
and $25,000,000. The first installment was paid on April 25,
2002 and deposited into an Escrow Account.  Lloyd's was to pay
the remaining $25,000,000, but it refused.

The Stipulation provided that the $25,000,000 plus interest will
be paid within 30 days of settlement of matters with Lloyd's.
On August 8, 2002, Judge Richard L. Young of the U.S. District
Court for the Southern District of Indiana, entered an Order and
Final Judgment approving the Stipulation.

According to Daniel L. Berger, Esq., at Bernstein, Litowitz,
Berger and Grossman, in New York City, the Lead Plaintiffs now
seeks:

    a) a determination of the extent and priority of the Claims
       held by the Class;

    b) an accounting of the Debtors' cash postpetition;

    c) temporary and injunctive relief to enjoin the Debtors
       from disposing or encumbering any of the cash; and

    d) an order directing the Debtors, jointly and severally to
       segregate certain amounts of cash.

Mr. Berger complains that the Holding Company Debtors' Joint
Plan of Reorganization expressly provides that the Class Claims
will be cancelled and the holders will not receive any
distribution. The Class Members are not entitled to vote on the
Plan.  This Plan ignores the fact that there is a binding final
judgment against Conseco requiring payment of $25,000,000 plus
interest. (Conseco Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

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


CONTINENTAL AIRLINES: Elects Ronald B. Woodard as Board Member
--------------------------------------------------------------
Continental Airlines (NYSE: CAL) announced that Ronald B.
Woodard, former president of the Boeing Commercial Airplane
Group, has been elected to the airline's board of directors.

Woodard, 60, has served as chairman of MagnaDrive Corp., which
he co-founded, since 2002, and was president and chief executive
officer of the firm, which produces new engine power transfer
technology applications for industrial equipment, from 1999-
2002.

In June 1999, Woodard retired from The Boeing Company, the
world's largest aerospace company and the United States' leading
exporter, after a 32-year career.  Prior to serving as president
of the Boeing Commercial Airplane Group, Woodard had been
president of Boeing de Havilland and vice president and general
manager of Boeing's Renton Division and of Boeing's Materiel
Division.

"We are excited that Ron Woodard is bringing his broad aviation
experience, contacts and leadership to Continental's board,"
said Chairman and Chief Executive Officer Gordon Bethune.  "His
expertise and help will be invaluable to our company, our
employees and our stockholders."

Woodard, who holds a master's degree in systems management from
the University of Southern California, is currently a director
of Coinstar, Inc. and previously served as a director of Atlas
Air Worldwide Holdings, Burlington Northern Santa Fe and The
Whittaker Corp.

A Pacific Northwest native born in Portland, Ore., Woodard was
chairman of the Seattle Symphony from 1992 to 2001 and is a
trustee of the University of Puget Sound and a Fellow of the
Royal Aeronautical Society.

Continental Airlines is the world's seventh-largest airline and
has more than 2,000 daily departures.  With 131 domestic and 93
international destinations, Continental has the broadest global
route network of any U.S. airline, including extensive service
throughout the Americas, Europe and Asia. Continental has hubs
serving New York, Houston, Cleveland and Guam, and carries
approximately 41 million passengers per year on the newest jet
fleet among major U.S. airlines.  With 48,000 employees,
Continental is one of the 100 Best Companies to Work For in
America.  In 2003, Fortune ranked Continental highest among
major U.S. carriers in the quality of its service and products,
and No. 2 on its list of Most Admired Global Airlines.  For more
company information, visit http://www.continental.com

Continental Airlines' 11.500% bonds due 2008 (CAL08USR1) are
trading at about 50 cents-on-the-dollar, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CAL08USR1for
real-time bond pricing.


CROWN BUTTE: Expects to File Art. of Dissolution Today in Canada
----------------------------------------------------------------
Crown Butte Resources Ltd. announced a final liquidation
distribution to shareholders of record on May 15, 2003 of
C$0.1769 per common share, payable on or about May 16, 2003.

The voluntary liquidation and dissolution of the Company under
the Canada Business Corporations Act was approved by the
Company's shareholders on January 14, 1999.

The Company will file articles of dissolution on or about
May 16, 2003. It is expected that a certificate of dissolution
will be issued not later than May 19, 2003. Upon the issuance of
the certificate of dissolution all shares of the Company will be
cancelled and the Company will cease to exist.


DAISYTEK INC: Wants More Time to File Schedules and Statements
--------------------------------------------------------------
Daisytek, Incorporated, and its debtor-affiliates ask for more
time from the U.S. Bankruptcy Court for the Northern District of
Texas to prepare and file their 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 report that due to the speed with which they
commenced their chapter 11 cases, and their size and complexity,
it's been impossible to complete drafting the Schedules and it
will be impossible to deliver them within the time period
proscribed by Bankruptcy Rule 1007(c).

The Debtors anticipate that it will take no more than 60 days to
complete, review, and file the Schedules with the Court.  Thus,
the Debtors request that the Court extend the schedules file
deadline to July 6, 2003.

The Debtors maintain that given the vast amount of information
that must be assembled and compiled and the number of hours that
must be devoted to the task of completing the Schedules is
enough cause for the Court to grant their request.

Daisytek, Incorporated and its affiliates are leading global
distributors of computer and office supplies and professional
products. The Company filed for chapter 11 protection on May 7,
2003 (Bankr. N.D. Tex. Case No. 03-34762).  Daniel C. Stewart,
Esq., Paul E. Heath, Esq., and Richard H. London, Esq., at
Vinson & Elkins LLP represent the Debtors in their restructuring
efforts.  When the Company filed for protection from its
creditors, it listed $622,888,416 in total assets and
$450,489,417 in total debts.


DDI CORP: Net Capital Deficit Balloons to $178 Mill. at March 31
----------------------------------------------------------------
DDi Corp. (OTC Bulletin Board: DDIC), a leading provider of
time-critical, technologically advanced interconnect services
for the electronics industry, announced financial results for
the first quarter ended March 31, 2003.

The Company reported net sales for the first quarter of 2003 of
$61.7 million, nearly flat compared to net sales of $62.5
million for the first quarter of 2002.  The decrease in net
sales from the first quarter of 2002 reflects the disposition of
certain, non-core facilities during the latter part of 2002 and
a reduction in the average price per panel reflecting softened
economic conditions in North America and Europe, partially
offset, by growth in the Fasttrack assembly operations (both in
San Jose, CA and the U.K.) and the acquisition of Kamtronics
Limited in October 2002, now known as DDi International, the
Company's U.K.-based business that procures offshore, volume
production services for PCB customers throughout Europe.  Net
sales for the first quarter of 2003 decreased 3% from $63.9
million recorded in the fourth quarter of 2002.  The decrease in
revenues from the fourth quarter of 2002 reflects the year-end
completion of several programs at DDi's Fasttrack assembly plant
in San Jose, CA.  The impact on revenues in the U.S. assembly
operation was partially offset by growth in North American PCB
revenues, which resulted primarily from an increase in demand,
as well as higher revenue from DDi International.

"The first quarter proved challenging due to a global economic
downturn and continued pricing pressure. We did, however, see
increased demand in our higher margin PCB businesses, which
reflects the continued support of our customers and our ability
to provide the same level of technologically advanced, quick
turn service that we are known for," commented Bruce McMaster,
Chief Executive Officer of DDi.

Gross profit for the first quarter of 2003 was $4.5 million, or
7% of net sales, compared to gross profit of $6.3 million, or
10% of net sales, for the similar period of 2002.  The declines
in gross profit (expressed in dollars and as a percentage of net
sales) from the first quarter of 2002 are due to continued
softness in PCB pricing in both North America and Europe.  Gross
profit for the first quarter of 2003 increased $4.3 million from
$0.2 million recorded in the fourth quarter of 2002, reflecting
an increase in PCB volume in addition to the impact of the
Company's previously announced operational restructuring
activities.  Sales and marketing expenses and general and
administration expenses each declined in the first quarter of
2003, as compared to the comparable period in 2002, reflecting
the Company's ongoing efforts toward cost control.

In the first quarter of 2003, DDi incurred restructuring and
reorganization charges of $3.8 million, which are largely
comprised of costs incurred in connection with the Company's
efforts to deleverage its balance sheet through a comprehensive
financial restructuring.

In the first quarter of 2003, the Company recorded an income tax
benefit of $0.5 million, which included a $3.6 million valuation
allowance applied to the U.S. deferred tax asset recorded for
the quarter.  Such tax allowance was based upon management's
expectation that U.S. federal and state deferred tax assets
would not likely be realized.

On the basis of generally accepted accounting principles, the
Company reported a net loss of $13.8 million for the first
quarter of 2003 compared to a net loss of $5.9 million for the
first quarter of 2002.  Such net loss of $13.8 million includes
depreciation of $4.7 million and net interest expense of $6.3
million (each on a pre-tax basis).

DDi reported an adjusted net loss of $6.6 million for the first
quarter of 2003 as compared to an adjusted net loss of $5.9
million for the comparable period of 2002. The increase in
adjusted net loss is due to the decline in gross profit noted
above and a higher level of recorded net interest expense.  For
a complete reconciliation of the differences between the
adjusted net loss and the net loss based upon GAAP, see the
disclosure in the attached Condensed Consolidated Statements of
Operations under the caption "Supplemental Financial
Information."

                          Liquidity

At March 31, 2003, DDi Corp.'s balance sheet shows a working
capital deficit of about $250 million and a total shareholders'
equity deficit of about $178 million.

As of March 31, 2003, cash, cash equivalents and investments
totaled $25.9 million (including $9.4 million in restricted
funds).  Dynamic Details is currently in default under its
senior credit facility. DDi Corp. is currently in default under
its 5.25% and 6.25% convertible subordinated notes and DDi
Capital does not expect to pay the interest obligations due on
May 15, 2003 under its senior discount notes. Failure to make
such interest payments within 30 days of the due date will
constitute a default under the senior discount notes. As a
result of the default of the Dynamic Details senior credit
facility, the DDi Corp. convertible subordinated notes, and the
expectation that the DDi Capital senior discount notes will not
be repaid in accordance with their stated terms, the Company has
classified the full $65.9 million principal balance of the
Dynamic Details senior credit facility, the DDi Corp. $200
million aggregate principal balance of the convertible
subordinated notes and the DDi Capital $16.1 million aggregate
principal balance of the senior discount notes as current
obligations in the accompanying Condensed Consolidated Balance
Sheet.   On the basis of GAAP, total current liabilities were
$354.2 million and working capital was $(255.0) million as of
March 31, 2003.  Excluding the classification of the principal
balance of the U.S. senior credit facility and the aggregate
principal balance of both the convertible subordinated notes and
senior discount notes as current obligations, total current
liabilities would have been $72.2 million and working capital
would have been $27.0 million as of March 31, 2003.

The Company is currently negotiating with the lenders under the
Dynamic Details senior credit facility, through a steering
committee of the senior lender group, the members of which hold
less than a majority of the outstanding senior debt, a steering
committee of the ad hoc committee of DDi Corp. convertible
subordinated noteholders, the members of which hold less than a
majority of the outstanding convertible subordinated notes, and
representatives of the DDi Capital senior discount notes
regarding a consensual restructuring of our obligations.

The Company and the steering committee of the senior lender
group of the Dynamic Details senior credit facility have reached
an agreement in principle on a proposal to restructure the
Dynamic Details senior credit facility.  This agreement in
principle is subject to a number of terms and conditions,
including approval by other senior lenders, satisfactory
arrangements for the restructuring of DDi Corp.'s convertible
subordinated notes and DDi Capital's senior discount notes and
the execution of definitive documentation.  The Company believes
that the restructured credit facility, which will have a final
maturity date of 2008, will provide DDi with a flexible long-
term credit facility that will allow the Company to implement
its business plan.

Consistent with the Company's objective to achieve a consensual
arrangement relating to restructuring of its U.S. indebtedness,
the steering committee of the ad hoc committee of certain
holders of the Company's 5.25% and 6.25% convertible
subordinated notes participated in the discussions with the
Company and the steering committee of the senior lender group of
the Dynamic Details senior credit facility.  In the context of
these discussions, such steering committee of the noteholders
and a steering committee of the senior lender group reached an
agreement in principle with the Company and Dynamic Details on
an overall restructuring proposal which encompasses the
restructuring of the Dynamic Details senior credit facility, as
discussed above, as well as restructuring of agreements with the
Company's convertible subordinated noteholders. The agreement in
principle regarding an overall restructuring proposal
anticipates that the claims of the holders of the DDi Capital
senior discount notes would also be restructured.

The Dynamic Details senior credit facility, which is jointly and
severally guaranteed by DDi Capital and its subsidiaries and
secured by the assets of all of the DDi Corp.'s domestic
subsidiaries, effectively ranks senior to the convertible
subordinated notes and the DDi Capital senior discount notes.

This overall restructuring is subject to a number of terms and
conditions, including the approval thereof by the above-
referenced debt holder groups and the execution of definitive
documentation.

"We believe that our current cash on-hand and expected cash flow
from operations will be sufficient to meet day-to-day business
operations as we complete the restructuring process. In
addition, through our debt restructuring initiatives, we intend
to have a fully-funded business plan moving forward," concluded
McMaster.

DDi is a leading provider of time-critical, technologically
advanced, electronics manufacturing services.  Headquartered in
Anaheim, California, DDi and its subsidiaries, with fabrication
and assembly facilities located across North America and in
England, service approximately 2,000 customers worldwide.


DENNY'S CORP: Deteriorating Performance Spurs S&P's Neg. Outlook
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Denny's Corp. to negative from stable and affirmed its 'B'
corporate credit rating on the company. The outlook revision is
based on Denny's deteriorating operating performance and credit
measures.

Operating performance has been negatively affected by a weak
economy and intense competition in the restaurant industry.
Same-store sales decreased 0.4 % in the first quarter of 2003,
following a 1% decline in all of 2002. Moreover, operating
margins fell to 10.5% in the first quarter of 2003, from 13.5%
the year before. Operating margins were negatively affected by
a decline in sales leverage and higher labor and utilities
costs. As a result, EBITDA fell 25% to $24.6 million in the
first quarter of 2003. Cash flow protection measures are thin,
with EBITDA covering interest by only 1.5x for the 12 months
ended March 26, 2003.

"The ratings on Denny's reflect the challenges of improving the
operations of its restaurants in a highly competitive restaurant
industry, the company's weak cash flow protection measures, and
its significant debt burden," said credit analyst Robert
Lichtenstein. These risks are somewhat offset by the company's
relatively well-known brand name and regional market position.

Spartanburg, South Carolina-based Denny's operates 563
restaurants, and franchises 1,091 restaurants throughout the
U.S., with concentrations in California (24%), Florida (11%),
and Texas (9%). Denny's historical performance is inconsistent:
Over the past two years, management implemented programs to
revitalize the Denny's brand and improve the concept's
profitability and liquidity, including a move to a more
franchise-based operation, the closure of underperforming
stores, and a remodeling program. The company sold more than 200
company-owned units to franchisees since 2000 and, in the
future, will refranchise units on a limited basis.


DVI RECEIVABLES: S&P Assigns BB Rating to Class E Notes
-------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to DVI Receivables XIX L.L.C.'s approximately $451
million asset-backed notes series 2003-1.

The preliminary ratings are based on information as of May 14,
2003. Subsequent information may result in the assignment of
final ratings that differ from the preliminary ratings.

The preliminary ratings reflect the credit enhancement that is
sufficient to withstand stressed losses consistent with the
respective ratings, ample liquidity in the form of a 2.50%
nonamortizing cash reserve, and a legal structure designed to
isolate the cash flows securing the notes from the bankruptcy of
DVI Financial Services Inc.

                    PRELIMINARY RATINGS ASSIGNED

Class                   Rating                   Amount (mil. $)
-----                   ------                   ---------------
A-1                     A-1+                         71.81
A-2                     AAA                          52.20
A-3                     AAA                         259.50
B                       AA                           16.92
C                       A                            14.66
D                       BBB                          11.28
E                       BB                           11.28
F                       N.R.                         13.53

N.R.-Not rated.


ENCOMPASS: Secures Nod to Reject JA Jones Construction Contract
---------------------------------------------------------------
On December 24, 2002, J.A. Jones Construction Company, a general
contractor, asked the Court to lift the automatic stay, alleging
that it incurred costs as a result of delays attributable to
Encompass Electrical Technologies North Carolina, Inc. -- a
subcontractor and a Encompass Services Debtor in these Chapter
11 cases.

"The delays that J.A. Jones attempts to attribute to Encompass
ET relate to construction of the Charlotte Westin Convention
Center Hotel," Lydia T. Protopapas, Esq., at Weil, Gotshal &
Manges LLP, in Houston, Texas, tells Judge Greendyke.

J.A. Jones wanted to reduce the payment amounts it owes to
Encompass ET under the Convention Center contract based on the
doctrine of set-off.  The Debtors objected to J.A. Jones'
request.

Currently, J.A. Jones owes the Debtors over $1,000,000 in
outstanding obligations under the Contract.  Despite significant
negotiations, the Debtors have been unable to collect amounts,
which are long overdue and owing under the Contract.

Because the Debtors' continued performance under the Contract
will result in the incurrence of significant additional costs --
costs which the Debtors are not prepared to shoulder absent
payment from J.A. Jones -- the Debtors intend to reject the
Contract and to initiate an adversary proceeding pursuant to
Section 542 of the Bankruptcy Code for turnover of the amounts
owed to the Debtors under the Contract.

At first, the Debtors attempted to resolve J.A. Jones's refusal
to perform its payment obligations under the Contract.  J.A.
Jones, however, refuses to cooperate.  The Debtors cannot afford
to continue incurring costs under the Contract without receiving
payment.  Left with no choice, the Debtors seek the Court's
authority to reject the Contract.

Accordingly, Judge Greendyke permits the Debtors to reject the
Contract with J.A. Jones effective February 4, 2003, pursuant to
Section 365(a) of the Bankruptcy Code.

The Court rules that the Debtors' rights to collect all amounts
due and owing under the Contract will not be prejudiced.
(Encompass Bankruptcy News, Issue No. 12; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


ENRON CORP: Judge Gonzalez Approves Bonneville Settlement Pact
--------------------------------------------------------------
Melanie Gray, Esq., at Weil, Gotshal & Manges LLP, in New York,
relates that prior to the Petition Date, Enron Power Marketing,
Inc. and Bonneville Power Administration, a power marketing
administration in the U.S. Department of Energy, are parties to:

  (i) an Agreement to Enable Future Purchases, Sales and
      Exchanges of Power and Other Services dated as of
      March 3, 1997 (Contract No. 97PB-10085), as amended by
      that Amendment No. 1, dated April 12, 1999, including in
      each case all amendments and exhibits thereto, and all
      transactions and confirmations thereunder;

(ii) an Agreement to Enable Future Purchases, Sales and
      Exchanges of Power and Other Services dated as of
      April 20, 2000 (Contract No. 99PB/00PB-10585), including
      all amendments and exhibits thereto, and all transactions
      and confirmations thereunder, and including without
      limitation the confirmations and transactions under the
      2000 Enabling Contract referenced by these numbers:

      Confirmation No.    Trade Date    Start Date     End Date
      ----------------    ----------    ----------     --------
        246561             8/20/1999    10/28/2002    9/30/2006
        281938            12/20/1999     11/1/2002    9/30/2006
        305701             3/10/2000      1/1/2003   12/31/2003
        447576            10/31/2000    10/28/2002   12/31/2006
        448835             11/1/2000    10/28/2002   12/31/2006
        522001             2/13/2001      1/1/2004   12/31/2004
        522019             2/13/2001      1/1/2005   12/31/2005
        522024             2/13/2001      1/1/2006   12/31/2006
        522097             2/13/2001      1/1/2006   12/31/2006
        522100             2/13/2001      1/1/2005   12/31/2005
        522101             2/13/2001      1/1/2004   12/31/2004
        541392              3/8/2001      1/1/2003   12/31/2003
        591195             4/24/2001      1/1/2004   12/31/2004
        600521              5/1/2001    10/28/2002   12/31/2006
        600522              5/1/2001    10/28/2002   12/31/2006
        605226              5/8/2001      1/1/2004   12/31/2006
        664061             6/26/2001      2/1/2003    9/30/2006
        664061             6/26/2001      2/1/2003    9/30/2006
        664061             6/26/2001      2/1/2003    9/30/2006
        899977             3/12/2001      1/1/2003   12/31/2003

(iii) a letter agreement dated as of July 14, 1997 (Contract
      No. 97PB-10123), as amended by Amendment No. 1, dated as
      of September 27, 2001, as further amended by the Book-Out
      Agreement (Contract No. 01-PB-11046), including in each
      case all amendments and exhibits thereto, and all
      transactions and confirmations thereunder -- the James
      River Agreement; and

(iv) a Firm Power Sale Agreement, dated as of January 17,
      1998 (Contract No. 98PB-10227), as amended by a letter
      agreement (Amendment No. 1) dated as of May 10, 1999, and
      as further amended by a letter agreement (Amendment No.
      2) dated as of September 7, 1999, including in each case
      all amendments and exhibits thereto, and all transactions
      and confirmations thereunder.

In addition, Enron Corporation entered into a Guarantee
Agreement in Bonneville's favor dated as of December 8, 1998.

Pursuant to the Power Contracts, as amended, Ms. Gray informs
Judge Gonzalez that EPMI agreed to provide Bonneville certain
capacity and associated energy through December 31, 2006.

On October 15, 2002, Bonneville filed a proof of claim in EPMI's
case for $15,717,181 under Claim No. 13954.  The Bonneville
Claim was based on power it delivered to EPMI under the 2000
Enabling Contract prior to the Petition Date.  Consequently, on
February 1, 2002, Bonneville terminated the James River
Agreement and the Firm Power Agreement as forward contracts.
However, EPMI has continued to perform its obligations pursuant
to the confirmations or transactions under the Enabling
Agreements.

Ms. Gray notes that although the Enabling Contracts have
substantial value to EPMI's estate at this time, EPMI also have
attendant risk from the market volatility associated with its
exposure thereunder.  In addition, Bonneville, as a governmental
agency, has asserted that EPMI is prohibited from assuming and
assigning the Enabling Contracts because of the Federal Anti-
Assignment Statute.  Accordingly, EPMI has determined that it is
best for the estate to terminate the Contract to avoid a
protracted and lengthy litigation on the Anti-Assignment issue
and the risk of diminution in the Enabling Contracts value.

EPMI and Bonneville have agreed to terminate the Contracts
through a Settlement Agreement, which principally provides that:

  (a) the Department of Justice will first approve the
      finalized Settlement Agreement;

  (b) all matters with Bonneville relating to the Contract will
      be settled pursuant to the Settlement Agreement in return
      for a commercially reasonable termination payment plus
      any amounts owed for the performance under the Power
      Contracts from January 1, 2003 through the Termination
      Date;

  (c) the Contracts will be terminated in return for the
      Termination Payment;

  (d) the Termination Date will be on the last day of the month
      in which the Bankruptcy Court enters an order approving
      the Settlement Agreement and it is a final order;

  (e) the Termination Payment is to be paid by wire transfer no
      later than 60 business days after the Parties sign the
      Settlement Agreement.  Interest will accrue on any overdue
      portion of the Termination Payment from the date the
      unpaid portion was due until the payment is received by
      EPMI, at a rate to be agreed by the parties;

  (f) Bonneville will return the original executed Guarantee to
      EPMI marked "CANCELLED" on Enron's behalf.  If the
      original executed Guarantee is not available, Bonneville
      will provide an authenticated duplicate of the executed
      Guarantee;

  (g) the Parties will release each other from all claims,
      obligations and liabilities under the Contracts; and

  (h) Bonneville will withdraw all of the Proofs of Claims
      related to the Contracts it has filed in the Debtors'
      cases.

Thus, pursuant to Section 363 of the Bankruptcy Code and Rule
9019 of the Federal Rules of Bankruptcy Procedure, EPMI and
Enron seek the Court's authority for EPMI to:

  (a) enter into the Settlement Agreement;

  (b) enter into a mutual release of all claims, obligations and
      liabilities under the Contracts; and

  (c) accept the Termination Payment due under the Settlement.

Ms. Gray asserts that the termination of the Contracts through a
Settlement Agreement is fair and reasonable because:

    (a) the Claims are resolved consensually and without
        litigation, which saves the estate from additional,
        unnecessary expense;

    (b) the Parties have been negotiating and continuing to
        negotiate the terms of the Settlement at arm's length;

    (c) EPMI is able to eliminate the price risk associated with
        the current power position without incurring additional
        hedge costs;

    (d) EPMI is able to eliminate the operational risk
        associated with scheduling and physically delivering the
        power;

    (e) EPMI is able to avoid any potential rejection damages
        Bonneville could claim if EPMI were forced to reject the
        Power Contracts;

    (f) it relieves Enron from its contingent obligations under
        the Guarantee; and

    (g) it relieves EPMI's estate from the Bonneville Claim
        amounting to over $15,000,000.

                       *     *     *

Accordingly, Judge Gonzalez grants the Debtors' request. (Enron
Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


ESSENTIAL THERAPEUTICS: Asks Court to Establish July 11 Bar Date
----------------------------------------------------------------
Essential Therapeutics, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware to impose Bar
Dates -- rock-solid deadlines -- for all creditors who wish to
assert a claim against the Debtors, to file their proofs of
claim or be forever barred from asserting that claim.

The Debtors request the Court to establish:

     i) July 11, 2003 at 4:00 p.m. Eastern Time as the General
        Bar Date; and

    ii) October 31, 2003 at 4:00 p.m. Eastern Time as the
        Governmental Bar Date.

The Debtors report that they have nearly completed the
preparation of their Schedules and anticipate that the Schedules
will be filed within the next week, and in any event prior to
the provision of notice of the Bar Dates.

Claims exempted from the Bar Date are:

     a) Claims not listed in the Debtors' Schedules as
        "contingent," "unliquidated," or "disputed";

     b) Claims on account of which a proof of claim has already
        been property filed with the Court;

     c) Claims previously allowed by order of the Bankruptcy
        Court; and

     d) Claims allowable under Section 507(a)(1) as expenses of
        the administration.

In addition to serving Bar Date Notice on parties-in-interests,
the Debtors will publish notice of the Bar Dates in the national
edition of The Wall Street Journal.  The Debtors submit that
this Publication Notice is most likely to reach parties that
might hold unknown claims.

Essential Therapeutics, Inc., and its debtor-affiliates are
biopharmaceutical companies committed to the discovery,
development and commercialization of critical products for life
threatening diseases. The Company filed for chapter 11
protection on May 1, 2003 (Bankr. Del. Case No. 03-11317).
Christopher S. Sontchi, Esq., at Ashby & Geddes and Guy B. Moss,
Esq., at Bingham McCutchen LLP represent the Debtors in their
restructuring efforts.  When the Company filed for protection
from its creditors, it listed $46,317,000 in total assets and
$65,073,000 in total debts.


FOCAL COMMS: March 31 Balance Sheet Upside-Down by $333 Million
---------------------------------------------------------------
Focal Communications Corporation (OTC Bulletin Board: FCOMQ), a
leading national communications provider of local phone and data
services, announced results for its first quarter ended
March 31, 2003. Focal reported first quarter revenue of $87.3
million, a 3% increase year-over-year. EBITDA (earnings before
interest, taxes, depreciation and amortization, reorganization
costs, restructuring costs, impairment losses and non-cash
compensation) was positive $7.3 million for the first quarter
compared to negative $3.8 million in the first quarter of 2002.
Focal reported a net loss applicable to common shareholders for
the first quarter of $15.1 million or a loss of $3.03 per share.

"Focal's solid first quarter performance demonstrates our
ability to execute on our plan to grow revenue while lowering
expenses and improving profitability," commented Kathleen
Perone, Focal's president and chief executive officer. "Existing
customers demonstrated their confidence in Focal, literally in
the first days and weeks of our reorganization and into the
first quarter, by placing orders for additional service.
Additionally, our sales team has been able to leverage the
strength of Focal's service offerings and our reputation for
exceptional customer service to obtain initial commitments from
over 160 new customers during the first quarter."

Perone continued, "The $7.3 million in positive EBITDA generated
during the quarter is a significant achievement for Focal. It
reflects our improved revenue performance and our ability to
achieve strong operational and network efficiencies."

"During the first few months of 2003 we have continued to work
through the reorganization process and are very satisfied with
the pace of our progress. On May 2, 2003, the Bankruptcy Court
approved our disclosure statement, enabling us to move to the
solicitation phase of the reorganization process. The disclosure
statement and amended plan of reorganization are currently being
distributed to our creditors who are entitled to vote on our
plan. The hearings to confirm our reorganization plan are
scheduled to begin on June 19, 2003, and, assuming the plan is
confirmed, Focal's official emergence from Chapter 11 would
follow shortly thereafter."

                         Business Review

Revenue - Focal reported revenue of $87.3 million for the first
quarter of 2003 compared to revenue of $84.5 million during the
same prior year period. The first quarter 2003 revenue was on a
base of 559,252 installed lines. Beginning in the fourth quarter
2002, Focal began to classify revenue as either Communications
Services revenue or Wholesale Services revenue. Communications
Services revenue includes all revenue derived from sales to
business customers, government entities, universities and
services sold through Focal's agent channel. Wholesale Services
revenue includes all revenue derived from sales to value-added
resellers, network service providers and data carriers,
including Internet Service Providers. In prior periods, Focal
classified revenue as either Enterprise revenue or Internet
Service Provider revenue. Enterprise revenue included revenue
derived from sales to corporations, government entities,
universities, value-added resellers, and carriers, as well as
services sold through Focal's agent channel. Internet Service
Provider revenue included revenue from sales to Focal's Internet
Service Provider customers. The revenue classification change
was made to better align reporting with current revenue drivers
and to provide additional insight into the Company's business.

Revenue derived from sales to Communications Services customers
grew 41% to $41.5 million during the first quarter of 2003 from
$29.4 million in the first quarter of 2002. Sales activity in
this channel offset the decline in Wholesale revenue resulting
in consolidated revenue growth of 3% for the same time period.
The growth in Communications Services revenue was driven by an
increase in the number of lines in service supporting this
channel, as well as an increase in the overall minutes of use
from this customer base.

Wholesale Services revenue declined to $45.9 million in the
first quarter of 2003 from $55.1 million in the first quarter of
2002. The revenue decline in the Wholesale channel was primarily
a result of the continuing consolidation and churn in that
customer base and decreased inter-carrier compensation rates.
Inter-carrier compensation is the compensation paid by carriers
to exchange traffic between their networks.

Network expense was $47.7 million during the first quarter
compared to $40.7 million in the first quarter 2002. The
increase in network expense was due primarily to a 217% year-
over-year increase in originating minutes of use. Selling,
general and administrative expense (SG&A), including non-cash
compensation and bad debt expense, was $33.4 million during the
first quarter, a 32% decrease from the same prior year period.
The reduction in SG&A expense during the quarter was driven by
reduced salary and salary related costs and a decrease in bad
debt expense. Strong expense controls also contributed to the
reduction in SG&A expense in the first quarter 2003.

The Company's net loss applicable to common shareholders during
the quarter was $15.1 million or $3.03 per share compared to a
net loss applicable to common shareholders of $57.2 million or
$11.61 per share in the same prior year period. The Company
ended the quarter with $31.6 million in cash and cash
equivalents compared to $31.9 million in cash and cash
equivalents as of December 31, 2002.

Focal Communications' March 31, 2003 balance sheet shows a
working capital deficit of about $420 million, and a total
shareholders' equity deficit of about $333 million.

Focal Communications Corporation -- http://www.focal.com-- is a
leading national communications provider. Focal offers a range
of solutions, including local phone and data services, to
communications-intensive customers. Approximately half of the
Fortune 100 use Focal's services, in 23 top U.S. markets.


FOREST CITY: S&P Assigns BB- Rating to $300 Million Senior Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' rating to
Forest City Enterprises Inc.'s $300 million senior unsecured
notes due 2015. In addition, the rating is affirmed for the
existing $200 million senior unsecured notes due 2008. The 'BB+'
corporate credit rating is also affirmed. The outlook remains
stable.

This Cleveland, Ohio-based real estate developer's non-
investment-grade credit rating incorporates the ongoing risks
inherent with a development-focused operating strategy. "The
affirmations reflect the stability of the cash flow generated by
the company's diversified operating portfolio and established
track record as a developer. These strengths are offset by the
large size of Forest City's development pipeline, particularly
given current real estate fundamentals, and the company's
aggressive financial profile. At least $100 million of the
proceeds from this issuance will be used to retire the existing
outstanding senior notes, with the balance available for general
working capital needs," said Standard & Poor's credit analyst
Scott Robinson.

Forest City appropriately capitalized on this past cycle's
strength to profitably expand its development pipeline. This
bolstered the overall size and geographic diversity of the
stabilized operating portfolio, which should continue to
generate a stable income stream. However, debt protection
measures will likely remain low, though consistent with
historical levels. While ratings improvement is unlikely given
the company's development and leverage appetite, Forest City's
extensive development experience should enable the successful
completion of existing projects despite the weak economic and
real estate operating environment.


GLOBAL CROSSING: Names Daniel P. O'Brien as Chief Fin'l Officer
---------------------------------------------------------------
Global Crossing announced that Daniel P. O'Brien has been named
executive vice president and chief financial officer. O'Brien's
appointment follows a recently announced streamlining of the
executive leadership team, in which John Legere assumed direct
supervision of all operational, sales and product development
divisions.

Global Crossing also announced that Dan J. Cohrs, its CFO since
1998, would continue in a transitional role until the transfer
of his duties is complete.

"Dan O'Brien brings to Global Crossing's leadership team a
strong track record in strategic development and financial
performance," commented John Legere, Global Crossing's CEO. "As
we focus our attention on the new Global Crossing that will
emerge in coming months, Dan's expertise will be instrumental in
moving us toward profitability and growth."

O'Brien brings more than twenty years of technology and finance
experience to Global Crossing. Most recently the CFO of Genuity
Corporation, O'Brien spent 17 years in various roles at GTE
Corporation. As GTE's executive vice president and CFO, O'Brien
was centrally involved in the strategic evaluations and the
integration and structuring activities leading to the merger of
GTE and Bell Atlantic, which formed Verizon.

Before joining GTE in a corporate capacity, O'Brien held several
positions with the Electrical Products Group of GTE, including
vice president and controller of GTE European Lighting in
Geneva, Switzerland. He also served in various financial and
management capacities within the manufacturing and chemical
industries. O'Brien holds a B.S. in chemistry from Boston
College and an M.B.A. from the University of Chicago.

"By combining the talent of our executive leadership team, the
efficiencies we've reached during the past eighteen months, and
our unmatched global network, Global Crossing is poised for
success in the telecommunications industry," Legere continued.
"I would like to personally thank Dan Cohrs for his dedication
over the past five years at Global Crossing and for aiding us
with this transition."

Global Crossing provides telecommunications solutions over the
world's first integrated global IP-based network, which reaches
27 countries and more than 200 major cities around the globe.
Global Crossing serves many of the world's largest corporations,
providing a full range of managed data and voice products and
services.

On January 28, 2002, Global Crossing Ltd. and certain of its
subsidiaries (excluding Asia Global Crossing and its
subsidiaries) commenced Chapter 11 cases in the United States
Bankruptcy Court for the Southern District of New York
(Bankruptcy Court) and coordinated proceedings in the Supreme
Court of Bermuda (Bermuda Court). On the same date, the Bermuda
Court granted an order appointing joint provisional liquidators
with the power to oversee the continuation and reorganization of
the Bermuda-incorporated companies' businesses under the control
of their boards of directors and under the supervision of the
Bankruptcy Court and the Bermuda Court. Additional Global
Crossing subsidiaries commenced Chapter 11 cases on April 23,
August 4 and August 30, 2002, with the Bermuda incorporated
subsidiaries filing coordinated insolvency proceedings in the
Bermuda Court. The administration of all the cases filed
subsequent to Global Crossing's initial filing on January 28,
2002 has been consolidated with that of the cases commenced on
January 28, 2002. Global Crossing's Plan of Reorganization,
which was confirmed by the Bankruptcy Court on December 26,
2002, does not include a capital structure in which existing
common or preferred equity will retain any value.

On November 18, 2002, Asia Global Crossing Ltd., a majority-
owned subsidiary of Global Crossing, and its subsidiary, Asia
Global Crossing Development Co., commenced Chapter 11 cases in
the United States Bankruptcy Court for the Southern District of
New York and coordinated proceedings in the Supreme Court of
Bermuda, both of which are separate from the cases of Global
Crossing. Asia Global Crossing has announced that no recovery is
expected for Asia Global Crossing's shareholders. Asia Netcom, a
company organized by China Netcom Corporation (Hong Kong) on
behalf of a consortium of investors, has acquired substantially
all of Asia Global Crossing's operating subsidiaries except
Pacific Crossing Ltd., a majority-owned subsidiary of Asia
Global Crossing that filed separate bankruptcy proceedings on
July 19, 2002. Global Crossing no longer has control of or
effective ownership in any of the assets formerly operated by
Asia Global Crossing.

Please visit http://www.globalcrossing.comfor more information
about Global Crossing.


GLOBAL IMAGING: BB- Rating Assigned to Proposed $250M Facility
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating to
Global Imaging Systems Inc.'s proposed $50 million subordinated
notes due 2008 and assigned its 'BB-' to the proposed $100
million secured five-year revolving credit facility and to the
$150 million secured six-year term loan facility.

At the same time, Standard & Poor's affirmed its 'BB-' corporate
credit rating on Global Imaging Systems. The outlook is stable.

Tampa, Florida-based Global Imaging is a distributor of
automated office equipment solutions, network integration
solutions, and electronic presentation systems to the U.S.
middle market. The company reported long term debt outstanding
of $194 million as of March 31, 2003.

The proposed debt issue is part of a recently announced
refinancing plan; the current rating and outlook incorporate the
expectation that leverage will not materially increase after the
refinancing is completed. The company is expected to use its
decentralized business model to modestly expand its geographic
and customer base through acquisitions. Acquisitions are
expected to continue to be funded largely with debt.

The revolving credit and the term loan are rated 'BB-', the same
as the corporate credit rating. The facilities are equally and
ratably secured by a first-priority perfected interest in all
tangible and intangible assets of the borrowers, as well as a
pledge of 100% of the capital stock of each subsidiary that is a
borrower.

"We view the $250 million credit agreement as having a
likelihood of marginal recovery of principal in the event of
default or bankruptcy," said Standard & Poor's credit analyst
Martha Toll-Reed.

Elements of a default scenario could include a material decline
in profitability or cash flow. Standard & Poor's expects lenders
could recover less than 50% of principal, as the value of the
collateral could be substantially less than the outstanding
principal amount of the credit facility under a distressed or
bankruptcy scenario. The factors most likely to cause a decline
in collateral and asset values are restructuring charges or
asset writedowns.

Covenants in the credit agreement include limitations on:
additional debt, liens, investments, capital expenditures and
asset sales. In addition, Global must maintain minimum fixed-
charge coverage ratios and maximum levels of leverage. The
refinancing is not expected to result in any material changes in
collateral or covenants.


GOODYEAR TIRE: Responds to Continental Carbon Company Lawsuit
-------------------------------------------------------------
Continental Carbon Company issued a news release out of Houston
regarding a lawsuit that it says was filed on May 2 against
Goodyear for $2.3 million for non-payment of invoices.

Goodyear has not been served yet and cannot comment on the
specific allegations. Goodyear can confirm that it filed and
served suit in Lawton, Okla., on May 8, against Continental
Carbon Company seeking more than $4 million in damages related
to delivery of defective carbon black that shut down production
in the world's largest tire plant for more than two days in
September of 2002.  Goodyear has a contractual right to set off
any amounts it owes to Continental Carbon Company based on the
substantial damage to the company incurred by the plant
shutdown.

The defective material from Continental Carbon Company was
discovered through Goodyear's extensive quality systems and
quick action was taken to ensure that none of the tires
manufactured using the defective material reached consumers.

Goodyear is disappointed that Continental Carbon Company feels a
need to "be vindicated" when the supplier abandoned its
responsibility to Goodyear to provide quality product.

Goodyear Tire & Rubber's 8.500% bonds due 2007 (GT07USR1) are
trading at about 84 cents-on-the-dollar, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=GT07USR1for
real-time bond pricing.


HANOVER COMPRESSOR: Terminates PIGAP II Put to Schlumberger
-----------------------------------------------------------
Hanover Compressor Company (NYSE:HC), the leading provider of
outsourced natural gas compression services, has entered into an
agreement with Schlumberger to terminate the PIGAP II Put to
Schlumberger in return for Schlumberger agreeing to the
restructuring of the $150 million subordinated note that
Schlumberger received from Hanover in August 2001 as part of the
purchase price for the acquisition of Production Operators
Corporation. Hanover had previously given notice of its intent
to exercise the put in January 2003. The agreement is subject to
consent by Hanover's lender group.

Hanover acquired its interest in PIGAP II as part of its
purchase of POI from Schlumberger in August 2001. PIGAP II is a
joint venture, currently owned 70% by a subsidiary of Williams
Companies Inc. and 30% by Hanover, which currently operates a
natural gas facility in Venezuela that processes 1.2 billion
standard cubic feet per day of natural gas. The natural gas
processed by PIGAP II is re-injected into oil reservoirs for
enhanced oil recovery.

As of March 31, 2003, the SLB Note had an outstanding principal
balance of approximately $171 million, including accrued
interest. Under the new terms, the maturity of the SLB Note has
been extended to March 31, 2007, from the original maturity of
December 31, 2005. The SLB Note will be a zero coupon note with
interest accruing at 11.0% for its remaining life. Schlumberger
will no longer have a first call on any proceeds from the
issuance of any shares of capital stock or other equity
interests by Hanover and Hanover has agreed to a no call
provision on the SLB Note until March 31, 2006. Hanover has
agreed to file a shelf registration statement covering the sale
of the SLB Note by Schlumberger. It is the intention of the
parties to have the SLB Note rated by Moody's and S&P.

Hanover and Schlumberger have also agreed to the modification of
the repayment terms of a $58 million obligation associated with
the PIGAP II joint venture that Hanover currently accounts for
as a contingent liability on its balance sheet. The PIGAP Note
will be structured to be non-recourse to Hanover, with a 6%
interest rate compounding semi-annually. It will be payable only
from distributions received from the PIGAP II joint venture.
Should no distributions from the PIGAP II joint venture be
available at the time of an interest payment, interest will
accrue and be added to the principal balance of the note.
Payments will first be applied to accrued interest, and then to
principal. Hanover will not receive any distributions from the
joint venture until the PIGAP Note has been paid off.

In addition, Hanover announced that Rene Huck, Vice President of
Schlumberger Limited, will join the management committee of the
Hanover-Schlumberger Strategic Alliance. The Alliance between
Hanover and Schlumberger was established in August 2001 as part
of Hanover's acquisition of POI from Schlumberger. The Alliance
is a five-year agreement between the two companies to promote
cooperation to jointly identify and develop integrated oil field
service opportunities worldwide. Mr. Huck was formerly a member
of Hanover's board of directors, as the nominee of Schlumberger,
who did not stand for re-election in 2003.

Hanover Compressor Company -- http://www.hanover-co.com-- is
the global market leader in full service natural gas compression
and a leading provider of service, financing, fabrication and
equipment for contract natural gas handling applications.
Hanover sells and provides this equipment on a rental, contract
compression, maintenance and acquisition leaseback basis to
natural gas production, processing and transportation companies
that are increasingly seeking outsourcing solutions. Founded in
1990 and a public company since 1997, Hanover's customers
include premier independent and major producers and distributors
throughout the Western Hemisphere.

As reported in Troubled Company Reporter's November 18, 2002
edition, Standard & Poor's placed its ratings on Hanover
Compressor Co., ('BB' corporate credit rating) on CreditWatch
with negative implications, reflecting the company's
announcement that the SEC was changing the status of its review
of financial restatements to formal from informal.

DebtTraders says that Hanover Compressor's 4.750% bonds due 2008
(HC08USR1) are trading at about 70 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=HC08USR1for
real-time bond pricing.


HARD ROCK HOTEL: S&P Rates $140 Million Second Lien Notes at B
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating to
Hard Rock Hotel Inc.'s proposed $140 million second lien notes
due 2013. Proceeds from this offering, along with cash on hand
and borrowings under the expected new bank facility, will be
used to redeem the outstanding $120 million senior subordinated
notes, pay $15 million of accrued preferred dividends, repay
the existing credit facility, and pay fees and expenses
associated with this transaction. Upon sale of the second lien
notes and the completion of the tender offer for the existing
senior subordinated notes, Standard & Poor's will withdraw its
ratings on the company's existing revolving credit facility and
senior subordinated notes.

At the same time, Standard & Poor's affirmed its 'B+' corporate
credit rating. Las Vegas, Nevada-based Hard Rock owns and
operates the Hard Rock Hotel & Casino. The outlook is stable.
Pro forma for the sale of the proposed notes, total long-term
debt outstanding will be approximately $160 million.

The proposed $140 million second-lien notes are to be secured by
a second-priority interest in substantially all of Hard Rock's
assets; however, its $40 million proposed bank facility will
benefit from a priority lien. "The notes are rated one notch
below the corporate credit rating, reflecting the level of
priority bank debt in the capital structure," said Standard &
Poor's credit analyst Peggy Hwan.

The ratings for the Hard Rock reflect its high debt leverage and
lack of cash flow diversity, offset by its good quality
casino/hotel, its niche market position, and loyal customer
base.

Standard & Poor's expects a stable operating environment in Las
Vegas for the remainder of 2003 and further upside potential in
the following year as the economy begins to recover. Because of
the Hard Rock's niche position in Las Vegas, it is anticipated
that the company will continue to experience stable or modest
growth in visitation. As a result, steady performance is
expected to continue and credit measures are expected to
remain in line with the rating.


HAWAIIAN AIRLINES: Proposes Solution Addressing Trustee Motion
--------------------------------------------------------------
Hawaiian Airlines, Inc., filed a motion in bankruptcy court
proposing a comprehensive solution to issues raised by the
company's largest aircraft lessor, Boeing Capital Corporation,
and its Creditors' Committee in a motion seeking to appoint a
trustee in the company's Chapter 11 case.

If accepted by the court, the solution would include sweeping
changes in the governance of the company, including the
resignation of John W. Adams as its chairman and chief executive
officer, and the appointment of an examiner in the case.

"What's most important to me is that Hawaiian Airlines is given
every opportunity to complete the last mile of this marathon and
emerge the strong competitor that I know it can be," Adams said.

"The only major stakeholder that hasn't agreed to participate in
Hawaiian's restructuring is Boeing. While Boeing has said that
they want Hawaiian Airlines to remain a customer, the effort
they have focused on me is wreaking profound damage on the
company, and I can't allow this to continue. Accordingly, the
board today approved a number of extraordinary steps that
address directly each of the concerns that have been raised by
Boeing," Adams said.

In addition to his stepping down from his board and executive
positions if the motion is granted, Adams announced that the
motion included the following provisions:

-- Mark B. Dunkerley, the airline's president and chief
   operating officer, would be appointed CEO of Hawaiian
   Airlines and join its board.

-- Four other members of the Hawaiian Airlines board, three of
   whom have affiliations with Adams and his investment company,
   AIP LLC, would resign their positions on the board.

-- The U.S. Trustee would be asked to nominate two independent
   members of the Hawaii business community to join the Hawaiian
   Airlines board.

-- Hawaiian Holdings would repay $500,000 previously received
   from Hawaiian Airlines.

-- Termination of the company's exclusive right to propose a
   Plan of Reorganization.

Adams said that, having assented to Boeing's and the Creditors'
Committee's demands, he had asked them to formally abandon their
request for appointment of a trustee to oversee the company's
Chapter 11 case.

"It is important that both Boeing and the Committee recognize
that disruption in the day-to-day management of the company
threatens its ability to successfully restructure. I would
gladly accept the appointment of an examiner with the power to
bring a cause of action as a much more reasonable and
constructive way to resolve issues that have been raised without
damaging the business. To do otherwise would be irresponsible to
every creditor, employee and customer of Hawaiian Airlines."

The proposed changes would become effective promptly upon
approval of the court.


HAYES LEMMERZ: Has Until Aug. 29 to Make Lease-Related Decisions
----------------------------------------------------------------
Hayes Lemmerz International, Inc., and its debtor-affiliates'
lease decision period, within which they must determine whether
to assume, assume and assign, or reject their unexpired leases,
is extended through and including the earlier of August 29, 2003
or the Effective Date. (Hayes Lemmerz Bankruptcy News, Issue No.
32; Bankruptcy Creditors' Service, Inc., 609/392-0900)


HAYES LEMMERZ: Seeking Syndication of $575-Mill. Credit Facility
----------------------------------------------------------------
Beginning on or about May 13, 2003, in connection with its
proposed emergence from Chapter 11 bankruptcy proceedings, Hayes
Lemmerz International, Inc. will begin making presentations to
prospective lenders in connection with the syndication of a
proposed senior secured credit facility of up to $575 million,
with Citigroup Global Markets Inc. and Lehman Brothers Inc. as
joint lead arrangers and book managers, using slides. The
Company expects to use these slides, in whole or in part, and
possibly with modifications, in the presentations. The
information disclosed has not been previously disclosed
publicly.


HORIZON PCS: Balance Sheet Insolvency Widens to $341 Million
------------------------------------------------------------
Horizon PCS, Inc., a PCS affiliate of Sprint (NYSE:PCS),
announced record results for the first quarter ended March 31,
2003.

-- Horizon PCS added 24,000 net new subscribers in the first
   quarter 2003, bringing the subscriber base to 294,900 at the
   end of the first quarter 2003.

-- As of March 31, 2003, 73% of our subscriber base was prime
   credit class and the remaining 27% was sub-prime credit
   class. Of the sub-prime base, 49% provided a deposit. Of the
   total gross adds in the first quarter 2003, 64% were prime
   credit class subscribers.

-- As of March 31, 2003, the Company had launched service
   covering 7.4 million residents or approximately 73% of the
   total population in its territory. The Company had 1,344 cell
   sites (which includes 510 sites in the NTELOS network).

-- Average monthly revenue per subscriber (ARPU), including
   roaming, was $68 for the first quarter 2003. ARPU, including
   roaming, was $76 for the fourth quarter 2002. ARPU, excluding
   roaming, was $52 for the first quarter 2003. ARPU, excluding
   roaming, was $54 for the fourth quarter 2002.

-- Churn, excluding 30-day returns, was approximately 2.9% for
   the first quarter 2003. Churn, excluding 30-day returns, was
   approximately 3.5% for the fourth quarter 2002.

-- Cost per gross add (CPGA) was $319 for the first quarter 2003
   and $316 for the fourth quarter 2002.

-- Cash cost per user (CCPU) was $63, including roaming, and
   $49, excluding roaming, for the first quarter 2003. CCPU was
   $75, including roaming, and $59, excluding roaming, for the
   fourth quarter 2002.

-- As of March 31, 2003, Horizon PCS marketed PCS service from
   Sprint through 43 Company stores and approximately 475
   national outlets, regional retailers and local agents in its
   territory.

-- Total operating revenues were $59.2 million for the first
   quarter 2003, consistent with fourth quarter 2002 total
   operating revenues of $60.0 million.

-- For the first quarter 2003, roaming revenue from the
   Company's portion of the Sprint wireless network was $13.8
   million. Roaming expense for the first quarter 2003, was
   $11.3 million.

-- Bad debt as a percentage of subscriber revenue was 3% for the
   first quarter 2003 and 9% for the fourth quarter 2002.

-- During the first quarter 2003, Horizon PCS had 151 million
   inbound roaming revenue minutes and 129 million outbound
   roaming minutes for a ratio of 1.2 to 1.

-- The average minutes of use was 615 per billed subscriber for
   the first quarter 2003 and 551 per billed subscriber for the
   fourth quarter 2002.

Commenting on the results, William A. McKell, Chairman,
President and CEO, said, "Results for the first quarter of 2003
were very similar to those of the fourth quarter of 2002. While
the wireless industry continues to face a number of challenges,
we were successful during the quarter in growing our customer
base and reducing churn. As a result, we are continuing to
maintain a higher-quality subscriber base."

Earnings before interest, taxes, depreciation and amortization
(EBITDA) was negative $12.4 million for the first quarter 2003
compared with negative $31.2 million for the fourth quarter
2002, which included a $13.2 million impairment of goodwill
charge.

At the end of the first quarter, Horizon had cash and cash
equivalents of approximately $69.3 million, which excludes $24.1
million in restricted cash. Capital expenditures were $2.2
million for the first quarter 2003.

Horizon PCS Inc.'s March 31, 2003 balance sheet shows a total
shareholders' equity deficit of about $341 million.

As of March 31, 2003, the Company was in compliance with its
covenants with regard to its outstanding debt. However, the
Company believes it is probable that it will violate one or more
covenants under its secured credit facility in 2003. The failure
to comply with a covenant would be an event of default under the
Company's secured credit facility, and would give the lenders
the right to pursue remedies. These remedies could include
acceleration of amounts due under the facility. If the lenders
elected to accelerate the indebtedness under the facility, this
would also represent a default under the indentures for the
Company's senior notes and discount notes, and would give Sprint
certain remedies under the Company's agreements with Sprint. The
Company does not have sufficient liquidity to repay all of the
indebtedness under these obligations. As noted in the Company's
Form 10-K filed with the Securities and Exchange Commission on
March 28, 2003, Horizon PCS's independent auditors' report dated
March 4, 2003, relating to the December 31, 2002 financial
statements, states that these matters raise substantial doubt
about the Company's ability to continue as a going concern.

In addition, without the additional borrowing capacity under the
senior credit facility, significant modifications in the amounts
charged by Sprint under the management agreements, significant
modifications in the amounts charged by NTELOS under the NTELOS
Network Service Agreement, and/or restructuring of its capital
structure the Company likely does not have sufficient liquidity
to fund its operations so that it can pursue its desired
business plan and achieve positive cash flow from operations.

The Company has engaged Berenson & Company, an investment
banking firm, to assist in its efforts to renegotiate or
restructure its equity, debt and other contractual obligations.
In addition, within the next six months, the Company is also
taking steps (some of which have already begun) to attempt to
renegotiate the debt covenants under its senior secured
facility, obtain waivers and/or a forbearance agreement with
respect to defaults under the senior credit facility, enter into
negotiations with the lenders under the senior credit facility
to obtain the right to borrow under its $95 million line of
credit and to modify the repayment terms of this facility, enter
into negotiations with Sprint and NTELOS to adjust the amounts
charged to the Company under the related agreements to improve
the Company's cash flow and operations, and pursue other means
to reduce operating expenses and improve cash flows. Further, if
the lenders under the Company's senior credit facility were to
accelerate our debt, the Company would attempt to negotiate a
waiver or forbearance agreement with representatives of the
holders of its senior notes and discount notes. The Company can
give no assurance that it will be successful in these
negotiations.

If the Company is unable to restructure its current debt and
other contractual obligations as discussed above, it would need
to:

-- obtain financing to satisfy or refinance its current
   obligations;

-- find a purchaser or strategic partner for the Company's
   business or otherwise dispose of its assets; and/or

-- seek bankruptcy protection.

Horizon PCS is one of the largest PCS affiliates of Sprint,
based on its exclusive right to market Sprint wireless mobility
communications network products and services to a total
population of over 10.2 million in portions of 12 contiguous
states. Its markets are located between Sprint's Chicago, New
York and Raleigh/Durham markets and connect or are adjacent to
15 major Sprint markets that have a total population of over 59
million. As a PCS affiliate of Sprint, Horizon markets wireless
mobile communications network products and services under the
Sprint and Sprint PCS brand names. For more information, visit
http://www.horizonpcs.com/

Sprint operates the largest, 100-percent digital, nationwide PCS
wireless network in the United States, already serving more than
4,000 cities and communities across the country. Sprint has
licensed PCS coverage of more than 280 million people in all 50
states, Puerto Rico and the U.S. Virgin Islands. In August 2002,
Sprint became the first wireless carrier in the country to
launch next generation services nationwide delivering faster
speeds and advanced applications on Vision-enabled Phones and
devices. For more information on products and services, visit
http://www.sprint.com/mr PCS is a wholly-owned tracking stock
of Sprint Corporation trading on the NYSE under the symbol
"PCS." Sprint is a global communications company with
approximately 72,000 employees worldwide and nearly $27 billion
in annual revenues and is widely recognized for developing,
engineering and deploying state-of-the art network technologies.


IRON AGE HOLDINGS: S&P Lowers & Puts Junk Ratings on Watch Neg.
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
ratings on safety shoe distributor Iron Age Holdings Inc. and
its subsidiary Iron Age Corp. to 'CCC' from 'CCC+' and placed
the ratings on CreditWatch with negative implications.

Pittsburgh, Pennsylvania-based Iron Age had total debt
outstanding of about $132 million as of Jan 25, 2003.

"The rating actions reflect Iron Age's bank covenants violation
and liquidity concerns. Iron Age was in violation of the
financial covenants under the company's credit facilities for
the first quarter ended April 26, 2003," stated Standard &
Poor's credit analyst Ana Lai.

The company obtained a waiver that will allow Iron Age to
operate under the existing requirements of the bank credit
facility for 45 days through June 25, 2003. During this period,
Iron Age is required to maintain excess cash availability of at
least $3.0 million. As of May 12, the company's cash
availability was $3.3 million. Iron Age is currently under
negotiations to amend the bank credit facilities.

Operating results for Iron Age continue to be under significant
pressure due to overall weakness in the U.S. economy, declining
demand for its safety shoes from several of its large customers
stemming from plant closings and employee layoffs, the
bankruptcy of a key customer, and increased competitive pressure
from nationally branded shoe products.

Standard & Poor's will monitor the progress of Iron Age in their
negotiations with creditors and resolve the CreditWatch listings
following company actions.


INTEGRATED HEALTH: Judge Walrath Confirms Reorganization Plan
-------------------------------------------------------------
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor LLP,
stepped Judge Walrath through the 13 requirements for
confirmation of [Integrated Health Services, Inc.'s] plan of
reorganization under Section 1129(a) of the Bankruptcy Code:

  A. Section 1129(a)(1) of the Bankruptcy Code provides that a
     plan of reorganization must comply with the applicable
     provisions of Chapter 11 of the Bankruptcy Code.  The
     legislative history of Section 1129(a)(1) of the Bankruptcy
     Code indicates that a principal objective of this provision
     is to assure compliance with the sections of the Bankruptcy
     Code governing classification of claims and interests and
     the contents of a plan of reorganization.  See S. Rep. No.
     989, 95th Cong., 2d Sess. 126 (1978); H.R. Rep. No. 595,
     95th Cong., lst Sess. 412 (1977); Kane v. Johns-Manville
     Corp., 843 F.2d 636, 648 (2d Cir. 1988); In re S&W
     Enterprise, 37 B.R. 153, 157 (Bankr. N.D. Ill., 1984).
     Judge Walrath finds that the Plan complies with the
     applicable provisions of the Bankruptcy Code, thereby
     satisfying Section 1129(a)(1) of the Bankruptcy Code.
     Specifically:

     1. Proper Classification: In addition to Administrative
        Expense Claims, Priority Tax Claims, and DIP Credit
        Facility Claims, which need not be designated, the Plan
        designates 13 Classes of Claims and Equity Interests.
        Each Other Secured Claim will be deemed to be separately
        classified in a subclass of Class 3 and will have all
        rights associated with separate classification under the
        Bankruptcy Code.  The Claims and Equity Interests placed
        in each Class are substantially similar to other Claims
        and Equity Interests, as the case may be, in each Class.
        Valid business, factual, and legal reasons exist for
        separately classifying the various Classes of Claims and
        Equity Interests created under the Plan, and these
        Classes do not unfairly discriminate between holders of
        Claims and Equity Interests.

     2. Specified Unimpaired Classes: Section 3 of the Plan
        specifies that Classes 1, 3-A through 3-D and 12 are
        unimpaired under the Plan, thereby satisfying Section
        1123(a)(2) of the Bankruptcy Code.

     3. Specified Treatment of Impaired Classes: Section 3 of
        the Plan designates Classes 2, 3-E through 3-K, 4, 5, 6,
        7, 8, 9, 10, 11 and 13 as impaired and Section 4 of the
        Plan specifies the treatment of Claims and Equity
        Interests in those Classes, thereby satisfying Section
        1123(a)(3) of the Bankruptcy Code.

     4. No Discrimination:  The Plan provides for the same
        treatment by the Debtors for each Claim or Equity
        Interest in each Class unless the holder of a particular
        Claim or Equity Interest has agreed to a less favorable
        treatment of the Claim or Equity Interest, thereby
        satisfying Section 1123(a)(4) of the Bankruptcy Code.

     5. Implementation of Plan:  The Plan and the various
        documents and agreements set forth in the Plan
        Supplement provide adequate and proper means for the
        Plan's implementation, including (i) the substantive
        consolidation of the Debtors to the extent set forth in
        the Plan, (ii) the sale of substantially all of IHS'
        interests in the Debtors pursuant to the Sale
        Transactions, (iii) the formation of the LTC Subsidiary
        and Therapy Subsidiary, (iv) the Liquidating LLC
        Agreement, (v) the Liquidating Manager Agreement, (vi)
        the United States Settlement Agreement, (vii) procedures
        for the sale of the Excluded Assets, administration of
        the Excluded Liabilities and distributions to holders of
        Claims by the Liquidating LLC, (viii) the IHS/Lyric
        Settlement Agreement, and (ix) the settlement with the
        Premiere Group Creditors' Committee, thereby satisfying
        Section 1123(a)(5) of the Bankruptcy Code.

     6. Designation of Officers, Directors or Trustees: Section
        5.9(f) of the Plan and the representations on the record
        of the Confirmation Hearing with respect to the manner
        of selection of the Liquidating Manager and officers of
        the Reorganized Debtors are consistent with the
        interests of creditors, equity security holders, and
        public policy in accordance with Section 1123(a)(7) of
        the Bankruptcy Code.

     7. Additional Plan Provisions: The Plan's provisions are
        appropriate and not inconsistent with the applicable
        provisions of the Bankruptcy Code.

     8. Bankruptcy Rule 3016(a): The Plan is dated and
        identifies the entities submitting it as proponents,
        thereby satisfying Bankruptcy Rule 3016(a).

  B. Section 1129(a)(2) of the Bankruptcy Code requires that the
     proponent of a plan of reorganization comply with the
     applicable provisions of the Bankruptcy Code.  The
     legislative history and cases discussing Section 1129(a)(2)
     of the Bankruptcy Code indicate that the purpose of the
     provision is to ensure that the plan proponent complies
     with the disclosure and solicitation requirements of
     Sections 1125 and 1126 of the Bankruptcy Code.  See In re
     Texaco Inc., 84 B.R. 893 (Bankr. S.D.N.Y. 1988); In re
     Prudential Energy Co., 58 B.R. 857 (Bankr. S.D. N.Y.1986);
     In re Butler, 42 B.R. 777, 782 (Bankr. E.D. Ark. 1984); In
     re Toy & Sports Warehouse, Inc., 37 B.R. 141, 149 (Bankr.
     S.D. N.Y. 1984); S. Rep. No. 989, 95th Congr., 2d Sess.
     126; H.R. Rep. No. 595, 95th Cong., 1st Sess. 412.  The
     Debtors have complied with the applicable provisions of the
     Bankruptcy Code, thereby satisfying Section 1129(a)(2) of
     the Bankruptcy Code.  Specifically:

     a. The Debtors are proper debtors under Section 109 of the
        Bankruptcy Code.

     b. The Debtors have complied with applicable provisions of
        the Bankruptcy Code, except as otherwise provided or
        permitted by orders of the Bankruptcy Court.

     c. The Debtors have satisfactorily complied with the
        applicable provisions of the Bankruptcy Code, the
        Bankruptcy Rules, and the Solicitation Order in
        transmitting the Plan, the Disclosure Statement, the
        Ballots, and related documents and notices and in
        soliciting and tabulating votes on the Plan.

  C. The Plan has been "proposed in good faith and not by any
     means forbidden by law," as required by Section 1129(a)(3)
     of the Bankruptcy Code.  The good faith requirement is met
     where "the plan is proposed with the legitimate and honest
     purpose to reorganize and has a reasonable hope of success
     . . ." In re Sun Country Dev., Inc., 764 F.2d 406, 408 (5th
     Cir. 1985); see In re Mortgage Inv. Co. of El Paso, Texas,
     III B.R. 604, 611 (Bankr. W.D. Tex. 1990) (good faith means
     "a legitimate and honest purpose to reorganize the debtor,
     coupled with a scheme which has a reasonable probability of
     success . . .").   Generally, a plan is proposed in good
     faith "if there is a reasonable likelihood that the plan
     will achieve a result consistent with the objectives and
     purpose of the Bankruptcy Code."  In re New Valley Corp.,
     168 B.R. 73, 80 (Bankr. D. N.J. 1994); Hanson v. First Bank
     of South Dakota, N.A., 828 F.2d 1310, 1315 (8th Cir.1987);
     In re Madison Hotel Assoc., 749 F.2d 410, 425 (7th Cir.
     1984).  The plan must bear some relation to the statutory
     objective of resuscitating a financially troubled
     corporation.  In re SGL Carbon Corp., 200 F.3d 154, 165-66
     (3rd Cir. 1999); Connell v. Coastal Cable T.V., Inc. (In re
    Coastal Cable T.V., Inc), 709 F.2d 762, 764 (1st Cir. 1983);
     In re Koelbl, 751 F.2d 137 (2d Cir. 1984).   The
     negotiation of Integrated Health's Plan clearly
     involved lengthy and extensive negotiations with the
     Debtors' core constituencies.  The Debtors demonstrates
     good faith in dealing with its creditors and interest
     holders.  In re Stolrow's, Inc., 84 B.R. 167, 172 (9th Cir.
     BAP 1988) (good faith in proposing a plan "also requires a
     fundamental fairness in dealing with one's creditors
     . . .").  Judge Walrath notes that the Debtors have
     proposed the Plan in good faith and not by any means
     forbidden by law, thereby satisfying Section 1129(a)(3) of
     the Bankruptcy Code.  The Debtors' good faith is evident
     from the facts and records of the IHS Reorganization Cases,
     the Disclosure Statement and the hearing thereon, and the
     record of the Confirmation Hearing and other proceedings
     held in the IHS Reorganization Cases.  The Plan was
     proposed with the legitimate and honest purpose of
     maximizing the value of the Debtors' estates by providing
     the means through which the Reorganized Debtors may emerge
     from Chapter 11 as a viable operating enterprise.  The Plan
     is the result of extensive arm's-length negotiations among
     the Debtors, the Creditors' Committee, the Unofficial
     Senior Lenders' Working Group, the Premiere Group
     Creditors' Committee and other parties-in-interest.

  D. Section 1129(a)(4) of the Bankruptcy Code requires that
     payments made by the Debtor on account of services or costs
     and expenses incurred in connection with the Plan or the
     Reorganization Cases either be approved or be subject to
     approval by the bankruptcy court as reasonable.  A plan
     meets the requirements of Section 1129(a)(4) when it
     provides that all payments to be made under the plan are
     subject to court approval.  In re Future Energy Corp., 83
     B.R. 470 (Bankr. S.D. Ohio 1988); In re U.S. Truck Co.,
     Inc. 47 B.R. 932 (E.D. Mich. 1985), aff'd, 800 F.2d 581
     (6th Cir. 1986).  Any payment made or to be made by any of
     the Debtors for services or for costs and expenses in or in
     connection with the IHS Reorganization Cases, or in
     connection with the Plan and incident to the IHS
     Reorganization Cases, has been approved by, or is subject
     to the approval of, the Bankruptcy Court as reasonable,
     thereby satisfying Section 1129(a)(4) of the Bankruptcy
     Code.

  E. Section 1129(a)(5)(A)(i) of the Bankruptcy Code requires
     the proponent of a plan to disclose the identity of certain
     individuals who will hold positions with the debtor or its
     successor after confirmation of the plan.  Section
     1129(a)(5)(A)(ii) of the Bankruptcy Code requires that the
     service of these individuals be "consistent with the
     interests of creditors and equity security holders and with
     public policy."  In re Apex Oil Co., 118 B.R. 683, 704-05
     (Bankr. E.D. Mo. 1990) (satisfied where debtors as well as
     creditors' committee believe control of entity by proposed
     individuals will be beneficial); In re Toy & Sports
     Warehouse, Inc., 37 B.R. 141,149-151 (Bankr. S.D.N.Y.
     1984) (continuation of debtor's founder and president, who
     had many years of experience in debtor's business,
     satisfied Section 1129(a)(5)  of the Bankruptcy Code).
     Section 1129(a)(5)(B) of the Bankruptcy Code requires a
     plan proponent to disclose the identity of an "insider" (as
     defined by Section 101(31) of the Bankruptcy Code) to be
     employed or retained by the reorganized debtor and the
     "nature of any compensation for such insider."  In re Apex
     Oil Co., 118 B.R. at 704-705 (section 1129(a)(5)(B) of the
     Bankruptcy Code satisfied where plan fully disclosed that
     certain insiders will be employed by reorganized debtor and
     the terms of employment of these insiders); In re Texaco
     Inc., 84 B.R. 893, 908 (Bankr. S.D.N.Y.), appeal dismissed,
     92 B.R. 38 (S.D.N.Y. 1988) (requirements of section
     1129(a)(5)(B) of the Bankruptcy Code satisfied where the
     plan discloses debtors' existing officers and directors who
     will continue to serve in office after plan confirmation).
     Judge Walrath rules that the Debtors have complied with
     Section 1129(a)(5) of the Bankruptcy Code.  At the
     Confirmation Hearing, the Debtors disclosed the identity
     and affiliations of the persons proposed to serve as
     initial directors or officers of the Reorganized Debtors
     after confirmation of the Plan.  In addition, the
     appointment to, or continuance in, these offices is
     consistent with the interests of holders of Claims against
     and Equity Interests in the Debtors and with public policy.
     The identity of any insider that will be employed or
     retained by the Reorganized Debtors and the nature of the
     insider's compensation have also been fully disclosed.

  F. Section 1129(a)(6) of the Bankruptcy Code permits
     confirmation only if any regulatory commission that will
     have jurisdiction over the debtor after confirmation has
     approved any rate change provided for in the plan.  Judge
     Walrath observes that after confirmation of the Plan, the
     Reorganized Debtors' businesses will not involve rates
     established or approved by, or otherwise subject to, any
     governmental regulatory commission.  Thus, Section
     1129(a)(6) of the Bankruptcy Code is not applicable in the
     IHS Reorganization Cases or with respect to the Plan.

  G. Section 1129(a)(7) of the Bankruptcy Code, the "best
     interests of creditors test," requires that, with respect
     to each impaired class of claims or interests, each holder
     of a claim or interests of the class under the Plan on
     account of the claim or interests (a) has accepted the
     plan; or (b) will receive or retain under the plan on
     account of the claim or interests property of a value, as
     of the effective date of the plan, that is not less than
     the amount that the holder would so receive or retain if
     the debtor were liquidated under Chapter 7.  The best
     interests test thus focuses on individual, dissenting
     impaired holders of claims and interests, rather than
     entire classes of claims or interests.  See In re Future
     Energy Corp., 83 B.R. 470, 489 (Bankr. S.D. Ohio 1988); In
     re Toy & Sports Warehouse, Inc., 37 B.R. 141, 150 (Bankr.
     S.D.N.Y. 1984).  The best interests test for dissenting
     holders of claims or interests is generally satisfied
     through a liquidation/recovery analysis.  In re
     AG Consultants Grain Div., Inc., 77 B.R. 665 (Bankr. N.D.
     Ind. 1987); In re Victory Constr. Co., Inc., 42 B.R. 145,
     151 (Bankr. C.D. Cal. 1984) (court "must find that each
     [non-accepting] creditor will receive or retain value that
     is not less than the amount he would receive if the debtor
     were liquidated").  Determining what an impaired, non-
     consenting class member would receive in a hypothetical
     Chapter 7 liquidation necessarily requires the making of
     reasonable assumptions and judgments.  In re Crowthers
     McCall Pattern, Inc., 120 B.R. 279 (Bankr. S.D. N.Y. 1990);
     In re Neff, 60 B.R. 448, 452 (Bankr. N.D. Tex. 1985),
     aff'd, 785 F.2d 1033 (5th Cir. 1986).  It is, of course,
     well recognized that, in liquidation, assets frequently
     will be worth less than in situations where the assets are
     retained and the debtor's business remains ongoing through
     a successful  reorganization.  In re Drexel Burnham Lambert
     Group, Inc., 138 B.R. 723, 751-52 (Bankr. S.D. N.Y. 1992).
     Judge Walrath finds that the Plan satisfies Section
     1129(a)(7) of the Bankruptcy Code.  The Plan satisfies
     Section 1129(a)(7) of the Bankruptcy Code.  The Liquidation
     Analysis attached to the Disclosure Statement and other
     evidence proffered or adduced at the Confirmation Hearing:

     1. are persuasive and credible,

     2. have not been controverted by other evidence, and

     3. establish that each holder of an impaired Claim or
        Equity Interest either has accepted the Plan or will
        receive or retain under the Plan, on account of the
        Claim or Equity Interest, property of a value, as of the
        Effective Date, that is not less than the amount that
        the holder would receive or retain if the Debtors were
        liquidated under Chapter 7 of the Bankruptcy Code.

  H. Section 1129(a)(8) of the Bankruptcy Code requires that
     each class of claims or interests must either accept a plan
     or be unimpaired under a plan.  Pursuant to Section 1126(c)
     of the Bankruptcy Code, a class of impaired claims accepts
     a plan if holders of at least two-thirds in dollar amount
     and more than one-half in number of the claims in that
     class actually votes to accept the plan.  Pursuant to
     Section 1126(d) of the Bankruptcy Code, a class of
     interests accepts a plan if holders of at least two-thirds
     in amount of the allowed interests in that class actually
     vote to accept the plan.  A class that is not impaired
     under a plan, and each holder of a claim or interests of
     the class, is conclusively presumed to have accepted the
     plan.  11 U.S.C. Sec. 1126(f); see also Rep. No. 989, 95th
     Cong. 2d Sess. 123 (1978) (Sec. 1126(f) of the Bankruptcy
     Code "provides that no acceptances are required from any
     class whose claims or interests are unimpaired under the
     Plan or in the order confirming the Plan."); In re Ruti-
     Sweetwater, Inc., 836 F.2d 1263, 1267 (10th Cir. 1988)
     ("For purposes of acceptance of a Plan, Sec. 1126(f)
     provides that a class that is not impaired under the Plan
     is 'conclusively presumed' to have accepted the
     Plan.").  Classes 1, 3-A through 3-D and 12 of the Plan
     are Classes of unimpaired Claims and Interests that are
     conclusively presumed to have accepted the Plan under
     Sec. 1126(f) of the Bankruptcy Code.  Classes 2, 4, 5, 6,
     7, 8 and 9 and the holders of Other Secured Claims in Class
     3-E through 3-K and all but one of the other voting
     subclasses in Class 3, have voted to accept the Plan in
     accordance with Section 1126(c) and (d) of the Bankruptcy
     Code.  One subclass in Class 3, which is the subclass for
     the Other Secured Claim of Vector Concepts, has voted to
     reject the Plan.  Classes 10, 11 and 13 are not entitled to
     receive or retain any property under the Plan and,
     therefore, are deemed to have rejected the Plan pursuant to
     Section 1126(g) of the Bankruptcy Code.  Although Section
     1129(a)(8) has not been satisfied with respect to the three
     deemed rejecting Classes (Classes 10, 11 and 13) or with
     respect to the separate subclass in Class 3 that voted to
     reject the Plan, the Plan is confirmable because the Plan
     satisfied Section 1129(b) of the Bankruptcy Code with
     respect to the Rejecting Classes.

  I. Judge Walrath concludes that the treatment of
     Administrative Expense Claims and Other Priority Claims
     pursuant to Sections 2.1 and 4.1 of the Plan, satisfies the
     requirements of Sections 1129(a)(9)(A) and (B) of the
     Bankruptcy Code, and the treatment of Priority Tax Claims
     pursuant to Section 2.4 of the Plan satisfies the
     requirements of Section 1129(a)(9)(C) of the Bankruptcy
     Code.

  J. Section 1129(a)(10) of the Bankruptcy Code provides that at
     least one impaired class of claims or interests must accept
     the Plan, without including the acceptance of the Plan by
     any insider.  At least one Class of Claims against the
     Debtors that is impaired under the Plan has accepted the
     Plan, determined without including any acceptance of the
     Plan by any insider, thus satisfying the requirements of
     Section 1129(a)(10) of the Bankruptcy Code.

  K. Section 1129(a)(11) of the Bankruptcy Code requires the
     Bankruptcy Court to find that the plan is feasible as a
     condition precedent to confirmation.  Specifically, the
     Bankruptcy Court must determine that -- confirmation of the
     plan is not likely to be followed by the liquidation, or
     the need for further financial reorganization, of the
     debtor or any successor to the debtor under the plan,
     unless the liquidation or reorganization is proposed in the
     plan.  Judge Walrath declares that the Disclosure Statement
     and the evidence proffered or adduced at the Confirmation
     Hearing satisfies the requirements of Section 1129(a)(11)
     of the Bankruptcy Code in that the Plan:

     1. is persuasive and credible,

     2. has not been controverted by other evidence, and

     3. establishes that confirmation of the Plan is not likely
        to be followed by the liquidation, or the need for
        further financial reorganization, of the Reorganized
        Debtors or the Liquidating LLC.

  L. As required by Section 1129(a)(12) of the Bankruptcy Code,
     the Plan provides for the payment of all fees payable under
     Section 1930 of the Judiciary Procedure Code by the
     Debtors on the Effective Date.  All fees payable under
     Section 1930 of title 28 of the United States Code, as
     determined by the Bankruptcy Court, have been paid or will
     be paid pursuant to Section 12.1 of the Plan by the Debtors
     on or before the Effective Date.  The Debtors and the
     Office of the United States Trustee have agreed that:

     1. The Debtors will pay to the UST, by the Effective Date,
        the undisputed amount of unpaid Quarterly Fees pursuant
        to Section 1930(a)(6) of the Judiciary Procedures Code
        that the Debtors contend have accrued prior to the
        Effective Date, and that payment of these Quarterly Fees
        will be without prejudice to either the position of the
        UST that additional Quarterly Fees may be due or the
        position of the Debtors that no additional Quarterly
        Fees are due.

     2. The Debtors will deposit the unpaid and disputed amount
        of Quarterly Fees attributable to the pre-Effective Date
        period within 10 days of the receipt of the UST's
        calculation of the amount of those unpaid and disputed
        Quarterly Fees into a segregated, interest-bearing
        account earmarked for payment of Quarterly Fees at a
        bank reasonably acceptable to the UST.  No withdrawals
        or transfers of funds from the Debtors' UST Fee Account
        will be made until the amount of Quarterly Fees has been
        determined by a final non-appealable order, after
        further order of this Court, or after agreement by the
        UST and the Debtors or the Liquidating LLC.

     3. The Reorganized Debtors will continue to pay to the UST
        the undisputed amount of unpaid Quarterly Fees
        attributable to the Reorganized Debtors after the
        Effective Date, and will continue to file operating
        reports for the Reorganized Debtors with the UST until
        the IHS Reorganization Cases are closed and finally
        decreed.  The Reorganized Debtors will deposit the
        unpaid and disputed amount of Quarterly Fees
        attributable to the post-Effective Date period for the
        Reorganized Debtors within 10 days of receipt of the
        UST's calculation of the amount of those unpaid and
        disputed Quarterly Fees into a segregated, interest-
        bearing account earmarked for payment of Quarterly Fees
        at a bank reasonably acceptable to the UST attributable
        to the Reorganized Debtors for the post-Effective Date
        period until the Reorganization Cases are closed and
        finally decreed.

     4. The Liquidating LLC will pay to the UST the undisputed
        amount of unpaid Quarterly Fees attributable to IHS
        after the Effective Date, and will continue to file
        operating reports with the UST until IHS' Chapter 11
        case is closed and finally decreed.  The Liquidating LLC
        will deposit the unpaid and disputed amount of Quarterly
        Fees attributable to IHS for the post-Effective Date
        period within 10 days of receipt of the UST's
        calculation of the amount of those unpaid and disputed
        Quarterly Fees into a segregated, interest-bearing
        account earmarked for payment of Quarterly Fees at a
        bank reasonably acceptable to the UST attributable to
        IHS for the post-Effective Date period until IHS'
        Chapter 11 case is closed and final decreed.

     5. The UST reserves the right to require additional reports
        or information in order to, inter alia, determine the
        amount of Quarterly Fees due from the Debtors, the
        Reorganized Debtors or IHS.

  M. Section 1129(a)(13) of the Bankruptcy Code sets forth
     certain provisions for continuation of the payment of
     health,  welfare and retiree benefits post-confirmation.
     Section 12.2 of the Plan is modified to provide that after
     the implementation of the Sale Transactions, on and after
     the Effective Date, the Reorganized Debtors will continue
     to pay all retiree benefits of the Debtors, at the level
     established in accordance with Sec. 1114 of the Bankruptcy
     Code, at any time prior to the Confirmation Date,
     for the duration of the period for which the Debtors had
     obligated themselves to provide these benefits.  Thus, the
     requirements of Section 1129(a)(13) of the Bankruptcy Code
     are satisfied.

Poorman-Douglas Corporation, the Debtors' claims, noticing and
ballot tabulating agent, presents the results of the votes cast
by holders of Secured Synthetic Lease Claims (Class 2), Other
Secured Claims (Class 3), Senior Lender Claims (Class 4),
General Unsecured Claims (Class 6), 1999 Insured Tort Claims
(Class 7), and Settled Senior Subordinated Debt Claims (Class
8):

         Total                   Holders          Holders
Class  Holders   Total Amount  Accepting    %    Rejecting    %
-----  -------  -------------  ---------  -----  --------- -----
   2        25      40,361,805       25     100%      0      0%
   3        25      12,368,231       23      92%      2      8%
   4       105   1,049,959,035      105     100%      0      0%
   6     2,777      75,549,098    2,621      94%    156      6%
   7       112         822,308      109      97%      3      3%
   8        19      13,208,651       15      79%      4     21%
-----  -------  -------------  ---------  -----  --------- -----
TOTAL   3,063  $1,192,269,128    2,898      95%    165       5%

  $ Accepting      % Accepting      $ Rejecting      % Rejecting
  -----------      -----------      -----------      -----------
   40,361,805         100.00%                 0           0.00%
    2,947,246          23.83%         9,420,985          76.17%
1,049,959,035         100.00%                 0           0.00%
   70,541,872          94.62%         4,007,226           5.38%
      817,074          99.36%             5,234           0.64%
   13,208,651         100.00%                 4           0.00%
  -----------      -----------      -----------      -----------
$1,177,835,683          98.79%        13,433,449           1.21%

Accordingly, Judge Walrath finds that the Plan complies with all
applicable provisions of the Bankruptcy Code and has been
accepted by the Classes of Creditors.  Accordingly, the Court
confirmed the Debtors' Plan during the May 12, 2003 hearing
because it passed the 13 confirmation standards set forth in
Section 1129 of the Bankruptcy Code. (Integrated Health
Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


INTERLIANT INC: Navisite Pitches Winning Bid to Acquire Assets
--------------------------------------------------------------
NaviSite, Inc. (Nasdaq: NAVI), a leading provider of Application
and Infrastructure Management Services, was the prevailing
bidder at the bankruptcy auction to acquire the assets and
certain liabilities of Interliant, Inc. (OTCBB: INIT.OB), a
managed infrastructure solutions provider headquartered in
Purchase, New York. Interliant specializes in managing corporate
email, messaging and collaboration applications, and IT
infrastructure for more than 300 customers.

Under the terms approved by the bankruptcy court Tuesday,
NaviSite will acquire the assets and assume certain liabilities
of Interliant, totaling approximately $6.2 million dollars,
through a NaviSite wholly-owned subsidiary. As consideration,
NaviSite will pay approximately $7.0 million dollars in cash,
credits and short term notes, subject to a purchase price
adjustment based on Interliant's net worth calculated at
closing. The transaction is subject to a Sale Order being
entered by the bankruptcy court and the closing taking place
today.

"The acquisition of the Interliant business is another important
step in the growth of NaviSite as a leader in the managed
application and infrastructure services industry," said Arthur
Becker, CEO of NaviSite. "The earnings accretive nature of this
transaction reflects NaviSite's commitment to profitability and
is a strong measure of our financial health."

Founded in 1997, Interliant offers a broad range of managed
messaging, email migration, and collaborative application
development services built on industry-leading platforms such as
Lotus Notes and Microsoft Exchange. Interliant also operates
data centers in the United States and London where their hosting
platforms and best-in-class technology support a global customer
base.

"Interliant's experience, service offerings, and strong customer
base in the messaging arena are an ideal fit to enhance
NaviSite's services portfolio," said Gabriel Ruhan, COO for
NaviSite. "This move will also allow NaviSite to leverage
investments it has made in data center and infrastructure assets
as well."

In the last several months, NaviSite has also announced the
acquisition of three additional companies: ClearBlue
Technologies Management, Inc. in late December; Avasta, Inc., in
early February; and, most recently, the acquisition of Conxion
Corp, in April.

Interliant, Inc. (OTCBB: INIT.OB) is a provider of managed
infrastructure solutions, encompassing messaging, security, and
hosting plus an integrated set of professional services that
differentiate and add customer value to these core solutions.
The company makes it easier and more cost-effective for its
customers to acquire, maintain, and manage their IT
infrastructure via selective outsourcing. Headquartered in
Purchase, New York, Interliant has forged strategic alliances
and partnerships with the world's leading software, networking
and hardware manufacturers, including Check Point Software
Technologies Inc., IBM and Lotus Development Corp., Microsoft,
and Sun Microsystems Inc.

On August 5, 2002, Interliant filed for reorganization under
Chapter 11 of the U.S. Bankruptcy Code. For more information
about Interliant, visit http://www.interliant.com

Founded in 1997, NaviSite, Inc, (NASDAQ: NAVI) is a leading
provider of application and infrastructure management services.
Selling to more than 500 customers consisting of mid-market
enterprises, divisions of large multinational companies, and
government agencies, NaviSite offers two distinct product lines:
A-Services, an advanced portfolio of application management,
development, and hosting services; and I-Services, a set of
infrastructure services consisting of colocation hosting,
bandwidth, and content and software delivery. Headquartered in
Andover, MA, NaviSite has offices in Silicon Valley, Virginia
and New York and also owns or operates 13 data centers
throughout the US. For more information, please visit
http://www.NaviSite.com

NaviSite is headquartered at 400 Minuteman Road, Andover, MA
01810, USA.


INTERPUBLIC GROUP: Fitch Further Cuts Low-B Level Debt Ratings
--------------------------------------------------------------
Fitch Ratings has downgraded the following debt ratings for The
Interpublic Group of Companies, Inc.: senior unsecured debt to
'BB+' from 'BBB-', multi-currency bank credit facility to 'BB+'
from 'BBB-', convertible subordinated notes to 'BB-' from 'BB+'.
The short-term debt rating is lowered to 'B' from 'F3' and has
been withdrawn. The Rating Outlook remains Negative.

Approximately $2.7 billion of debt is affected by this action.
The ratings downgrades reflect a continuing decline in the
operating performance of IPG and expectations that improvements
to the balance sheet in 2003 will be more limited than
previously anticipated. IPG's operating performance continues to
be hampered by higher costs and weak trends in organic revenue
growth. In the first quarter of 2003 organic revenues declined
5.4% and EBITDA declined to approximately $100 million from
approximately $200 million in the first quarter of 2002. While
IPG continues to achieve solid net new business wins, with $888
million in the first quarter of 2003 and over $3.2 billion in
2002, these have not had a sufficient impact to offset the
overall decline in spending by major clients and the effect of
client losses related to previous year's acquisitions. Further,
increases in operating costs have more than offset the benefits
from the major restructuring initiated in 2001, which resulted
in worldwide headcount reductions of greater than 7,000, or over
10% of IPG's workforce. IPG now indicates that additional
restructuring measures will be necessary to better align the
company's cost structure with its anticipated level of business.
The visibility of any near-term recovery in operating cash flow,
however, remains uncertain. As a result, IPG is not expected to
realize material improvements to its credit profile over the
intermediate term.

While, the sale of the NFO market intelligence business will
contribute to management's efforts to strengthen the balance
sheet, Fitch expects that lower operating cash flow and funding
requirements for restructuring initiatives will preclude
achieving our previously expected targets for debt reduction.
Trailing twelve-month debt/EBITDA was 3.6 times at March 31,
2003, (adjusted for the completion of a tender offer for the
zero-coupon notes due 2021). Management's indications that
leverage will decline to less than 3.0x at yearend 2003 exceeds
Fitch's previous expectations.

Fitch recognizes that IPG has taken significant steps to improve
its liquidity position. The $578 million of zero-coupon
convertible notes due 2021, which were putable to IPG in
December 2003, have been successfully tendered for with proceeds
from a recent convertible notes offering. IPG also indicates
that it has commitments from its bank group to renew its $500
million 364-day committed credit facility expiring in May 2003.
This facility is in addition to a $375 million five-year
facility maturing in June 2005.

The Negative Rating Outlook reflects IPG's weak organic growth
and persistently below-expectations operating results. Fitch is
also concerned about the quality of internal accounting controls
at IPG.

IPG is one of the three largest advertising and marketing
communications organizations in the world, with several market-
leading agencies, a diverse client base and long-term
relationships for key accounts.


INTRAWARE INC: PricewaterhouseCoopers Airs Going Concern Doubt
--------------------------------------------------------------
Intraware Inc. is a provider of global electronic software
delivery and management solutions. Its ESDM solutions help
software publishers reduce operational and support costs,
increase customer satisfaction and retention, accelerate and
strengthen software revenue recognition processes, and comply
with U.S. export regulations. The Company also offers
complementary products and services, including enterprise
software sales and marketing, and global web-based content
caching and delivery. Over the next several months, Intraware
plans to add products and services complementary to its current
offerings in order to address the needs of its current customers
as well as potential customers in the market for electronic
delivery and management of digital goods.

However, Intraware's revenue decreased to $14.0 million for the
year ended February 28, 2003 from $53.4 million for the year
ended February 28, 2002, and from $121.8 million for the year
ended February 28, 2001. For the year ended February 28, 2003,
product revenue accounted for $2.6 million, or 19% of revenue,
compared to $36.8 million, or 69% of revenue for the year ended
February 28, 2002, and $98.8 million, or 81% of revenue, for the
year ended February 28, 2001. Online services and technology and
related party online services and technology revenue for the
year ended February 28, 2003, accounted for $7.1 million, or 51%
of revenue, compared to $14.0 million, or 26% of revenue, for
the year ended February 28, 2002, and $23.0 million, or 19% of
revenue, for the year ended February 28, 2001. Alliance and
reimbursement revenue for the year ended February 28, 2003,
accounted for $4.3 million, or 30% of revenue, compared to $2.6
million, or 5% of revenue, for the year ended February 28, 2002.
There was no alliance and reimbursement revenue in the year
ended February 28, 2001.

Total cost of revenues decreased to $6.4 million for the year
ended February 28, 2003, from $34.3 million for the year ended
February 28, 2002, and $85.2 million for the year ended February
28, 2001. The decrease in cost of revenues is primarily due to
the phasing out of the Company's software reseller business.

The Company's gross margin increased to 55% for the year ended
February 28, 2003, from 36% for the year ended February 28,
2002, and 30% for the year ended February 28, 2001. The margin
percentage increase primarily reflects Intraware's focus on the
sale of its own services and technology, which generate higher
margins than third-party products it resold.

Intraware has a history of losses and indicates that it expects
future losses.  The Company has stated that it may not ever
become profitable.  It has not achieved profitability, may incur
net losses through its fiscal year ending February 29, 2004, and
may not ever become profitable in the future. The Company
incurred net losses attributable to common stockholders of $9.7
million for the fiscal year ended February 28, 2003, $37.4
million for the fiscal year ended February 28, 2002, and $68.4
million for the fiscal year ended February 28, 2001. As of
February 28, 2003, it had an accumulated deficit of
approximately $152 million. It will need to generate significant
additional online services and technology revenues and/or reduce
operating costs to achieve positive cash flow and profitability.
The Company has a limited operating history that makes it
difficult to forecast future operating results and cannot be
certain it will achieve sufficient revenues or gross profits in
future quarters to achieve profitability or positive cash flow.

In their Auditors Report dated March 18, 2003,
PricewaterhouseCoopers, LLP, states: "The Company has suffered
recurring losses, and negative cash flows from operations that
raise substantial doubt about its ability to continue as a going
concern."


KLEINERT'S: Gets Nod to Pay Critical Vendors' Prepetition Claims
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave its nod of approval to Kleinert's, Inc., and its debtor-
affiliates' request for authority to pay the prepetition claims
of certain of their critical vendors and service providers.

The Debtors outsource all of their children's apparel production
to one or more non-domestic manufacturers. The manufacturers,
through agents retained by the Debtors, manufacture the products
according to the Debtors' unique designs, in the colors and
fabrics directed by the Debtors on a season-by-season basis.

Certain shippers ship, transport, store, and deliver in process
inventory and finished goods between and among the
manufacturers, various Debtors, subcontractors to the Debtors,
and the Debtors' customers. In addition, the Shippers engage in
customs-clearing on behalf of the Debtors when goods arrive in
the United States.

The Debtors believe that if they do not pay these pre-petition
charges and other expenses, certain of the Shippers may refuse
to release the Debtors' goods currently in their control. The
value of these goods in their possession and the potential harm
to the Debtors if the goods are not released are likely to be
far in excess of such freight charges and other expenses.

Additionally, the Debtors employ several designers who design
and prepare layouts required for the manufacture of apparel
under the Buster Brown Line. In order to continue to offer the
marketplace with a consistent product under the "Buster Brown"
label, it is imperative that the Designers continue to provide
services to the Debtors.

The Debtors have also employed the services of certain printing
companies, who have printed sales and marketing materials for
the Debtors used in selling goods under the Buster Brown Line.

In sum, the total pre-petition claims of Critical Vendors for
the Buster Brown Line is $300,000.

Moreover, the Debtors import finished goods for use in both the
Kleinert's and Buster Brown Lines. While the Shippers accepted
delivery of such foreign goods and engaged in customs-clearing
on behalf of the Debtors, the Debtors paid directly, by debit
transfer, the Customs Duties associated with the imported goods.

As of the Petition Date, the Debtors owed Customs Duties in the
amount of $56,005, of which $38,031 relates to goods used for
the Kleinert's Line and $17,974 relates to goods used for the
Buster Brown Line.

The Debtors obtain authority to pay the Customs Duties incurred
prepetition on the terms established by the United States
Customs Services in order to avoid any interruption in the
timely customs-clearance of the goods being imported -- critical
to the Debtors' ongoing business.

Delays associated with finding substitute suppliers of goods or
services could cripple the Debtors' operations at the critical,
early stage of these cases, could substantially delay these
cases, and could threaten the Debtors' reorganization efforts.

The Debtors are also authorized to require that, in order to
receive payment on account of any pre-petition claim, each of
the Critical Vendors agrees to continue to supply goods and/or
services to the Debtors during the course of these bankruptcy
cases in accordance with the usual and customary credit terms
and conditions of the industry, or on such other terms as may be
acceptable to the Debtors.

Kleinert's Inc., filed for chapter 11 protection on May 7, 2003
(Bank. S.D. N.Y. Case No. 03-41140).  Wendy S. Walker, Esq., at
Morgan, Lewis & Bockius, LLP represents the Debtors in their
restructuring efforts.  When the Company filed for protection
from its creditors, it listed its estimated debts and assets of
over $50 million each.


KMART CORPORATION: Makes $3 Million Lease Payment to Lexington
--------------------------------------------------------------
Lexington Corporate Properties Trust (NYSE: LXP), a real estate
investment trust, has received a payment of $3.0 million in
connection with Kmart Corporation's affirmation of the lease for
Lexington's Warren, Ohio distribution facility. The payment
represents rent and real estate taxes owed by Kmart prior to its
bankruptcy filing.

Lexington also announced that Kmart had agreed to pay its rent
in monthly advance installments of $779,943. The lease had
required semi-annual payments in arrears of $4.68 million on
April 1 and October 1 through expiration on September 30, 2007.
In connection with the modification, Lexington agreed to remit
to Kmart a monthly management fee of $41,667.

T. Wilson Eglin, Chief Executive Officer, commented, "We are
pleased that Kmart has emerged from bankruptcy, affirmed our
lease and paid its rent and real estate taxes due as a result of
its bankruptcy filing. We believe that the receipt of rents on a
monthly basis enhances the value of our investment."

Lexington Corporate Properties Trust is a real estate investment
trust that owns and manages office, industrial and retail
properties net leased to major corporations throughout the
United States and provides investment advisory and asset
management services to investors in the net lease area.
Lexington common shares closed Wednesday, May 14, 2003 at $17.15
per share. Lexington pays an annualized dividend of $1.34 per
share. Additional information about Lexington is available at
http://www.lxp.com


L-3 COMMS: S&P Assigns BB- Rating to Proposed $300M Senior Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' rating to
L-3 Communication Corp.'s proposed $300 million senior
subordinated notes due 2013. The notes are to be sold under SEC
rule 144A with registration rights. The net proceeds from the
notes will be used to redeem the firm's outstanding $180 million
8.5% senior subordinated notes due 2008 and for general
corporate purposes. At the same time, Standard & Poor's affirmed
its 'BB+' corporate credit rating on L-3. The outlook is stable.

"Ratings on New York, New York-based L-3 reflect a slightly
below average business profile and an active acquisition
program, but credit quality benefits from an increasingly
diverse program base and efficient operations," said Standard &
Poor's credit analyst Christopher DeNicolo. Acquisitions are an
important part of the company's growth strategy, and the balance
sheet has periodically become highly leveraged because of
debt-financed transactions. However, management has a good
record of restoring financial flexibility by issuing equity.

L-3 provides secure communication systems, specialized
communications devices, and flight simulation and training.
Products include secure, high-data-rate communication systems,
microwave components, avionics, telemetry, and instrumentation
devices, and simulator training products and services. The
company's revenues have grown rapidly through numerous
acquisitions, positioning L-3 to better compete in the growing
intelligence, surveillance, and reconnaissance market. Some
well-supported programs, with a high percentage of sole-source
contracts, mitigate the company's exposure to a competitive
environment. The company's healthy funded backlog of almost $3.4
billion at March 31, 2003, provides solid visibility of near-
term revenues and profits.

Although significant increases in revenues and profits in 2002
were driven largely by acquisitions, organic growth was also
solid. The impact of the company's $1.1 billion debt-financed
acquisition of Raytheon Co.'s Aircraft Integration Services in
March 2002 was mitigated by the subsequent issuance of $770
million of equity, with a portion of the proceeds used to repay
debt. Leverage, as measured by total debt to capital, declined
to below 50% at the end of 2002 from around 55% in 2001.
In March 2003, L-3 acquired the Avionics System unit from
Goodrich Corp. for $188 million, using cash on hand. Funds from
operations to debt, an important cash protection measure,
remained somewhat above average for the rating at around 20%.
Goodwill accounts for more than 50% of the firm's total assets,
but a respectable return on permanent capital (in the low-
to mid-teens percent area) provides an indication of the value
of the asset.


LSI LOGIC: S&P Rates $350MM Convertible Subordinated Notes at B
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating to
LSI Logic Corp.'s newly issued $350 million 4% convertible
subordinated notes due 2010. Proceeds of the new issue will be
used to repurchase existing debt, to purchase call spread
options on its common stock, and for other corporate purposes.
At the same time, Standard & Poor's affirmed its 'BB-' corporate
credit rating company and other ratings. The outlook is stable.

Milpitas, California-based LSI Logic is a major manufacturer of
application-specific semiconductors, which are custom-designed
for the digital game, communications, and entertainment markets.
It had $$1.4 billion of debt and capitalized operating leases at
March 31, 2003.

"LSI Logic's moderate financial practices and strong customer
relationships provide a good degree of downside protection for
the rating," said Standard & Poor's credit analyst Bruce Hyman.
"Profitability pressures and likely ongoing marketplace
volatility are likely to constrain upside potential over the
intermediate term."

The company also makes application-specific standard products
that can satisfy multiple customers' needs in these areas. ASSPs
are commonly based on earlier ASIC designs. In addition, LSI
makes storage systems for computer servers, which were 27% of
March quarter sales. The company has been enriching its
technology base through targeted acquisitions.


LYONDELL CHEMICAL: S&P Rates $325-Mil Senior Secured Notes at BB
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' rating to
petrochemical producer Lyondell Chemical Co.'s proposed $325
million senior secured notes due 2013.

Standard & Poor's said that at the same time, it has affirmed
its 'BB' corporate credit rating on the company. The outlook
remains negative. Lyondell Chemical, based in Houston, Texas,
has approximately $4.2 billion of debt outstanding.

"The proposed notes are rated the same as the corporate credit
rating and the firm's existing secured debt in view of the
shared collateral supporting the company's substantial debt
obligations, and minimal subordinate cushion," said Standard &
Poor's credit analyst Kyle Loughlin. Security consists of
domestic personal property--including receivables and inventory-
-of Lyondell, stock of subsidiaries, a pledge of joint venture
distributions and certain property, plant, and equipment. "This
collateral is likely to provide only a measure of protection to
note holders in the event of default or bankruptcy, based on
Standard & Poor's simulated default scenario," said Mr.
Loughlin.

Standard & Poor's said that its ratings on Lyondell reflect high
debt levels stemming from the 1998 acquisition of ARCO Chemical
Co., which continue to overshadow the firm's average business
profile as a leading North American petrochemical producer. The
negative outlook highlights the elevated risk of a downgrade
this year if the subpar operating results recorded during the
first quarter persist into subsequent reporting periods or
additional weakness raises questions about Lyondell's business
prospects and ability to improve the financial profile.


MEDICALOGI: Trust Okays Initial Distribution to Equity Holders
--------------------------------------------------------------
The MSCP Liquidating Trust has approved an initial distribution
to common equity shareholders of $10,638,605, or approximately
20 cents per share. The funds approved for distribution will be
made available to the Trust's disbursing agent, Wells Fargo, by
June 16, 2003. Shareholders holding certificates will be
contacted by Wells Fargo with instructions for surrendering
their certificates. Shareholders holding stock in book entry
form through their broker or other registered agent will not be
required to submit any additional information to the disbursing
agent.

The Trust was established on April 2, 2003 when the Joint Plan
of Liquidation for MedicaLogic/Medscape, Inc. and its affiliated
debtors was approved by the United States Bankruptcy Court for
the District of Delaware. On January 24, 2002,
MedicaLogic/Medscape, Inc. and its five subsidiaries each filed
a voluntary petition for relief under Chapter 11 of Title 11 of
the United States Code.

For more information please see http://www.mscpholdings.com


MERRILL LYNCH: S&P Keeps Watch on Low-B & Junk Class Ratings
------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings of seven
certificates from three CMBS transactions on CreditWatch with
negative implications until the impact of the Shiloh loan
modifications on trust cash flows can be determined.

Each transaction contains loans secured by Shiloh Inn lodging
properties. The Shiloh loans have a troubled history, having
been delinquent in payment for more than two years, during which
time the borrowing entities filed for bankruptcy. Recently, a
settlement was reached with the special servicer, CRIIMI MAE
Services L.P., which would modify the loans and return them to
performing status. The settlement calls for, among other things,
the creation of an "A" and "B" note, where the A note balance
will approximate the outstanding principal balance of the loan,
and the B note will represent the outstanding advances due to
the trust through the modification date. The B note will be
payable by the borrower, and, provided it is paid in full, would
extinguish outstanding advances due to the trust.

The B notes have anticipated repayment dates of nine years for
Commercial Mortgage Acceptance Corp.'s series 1997-ML1 and
Merrill Lynch Mortgage Investors Inc.'s series 1997-C1, and 11
years for Merrill Lynch Mortgage Investors Inc.'s series 1996-
C2. They are expected to pay interest at the prime rate along
with principal on each payment date. The principal portion,
however, will only be required to the extent that net cash flow
is available. Should principal not be paid it will still be due,
but deferred. Such deferral will not constitute a monetary
default.

At this point in time, the impact of the settlement on trust
cash flows is not clear to Standard & Poor's. The pooling and
servicing agreements for each transaction could be interpreted
differently by the parties to the transaction with regard to the
repayment of outstanding servicing advances. Should the master
servicer of each transaction not rely solely on the B note
proceeds for recovery of outstanding advances and accelerate
recovery through diversion of the Shiloh loan payments or other
means, the non-investment-grade certificates in each trust will
likely experience interest shortfalls. This may impact the F and
G classes of the Merrill Lynch Mortgage Investors Inc.
transactions. Standard & Poor's does not rate the non-
investment-grade certificates of the Commercial Mortgage
Acceptance Corp. transaction. Should interest shortfalls occur,
timely interest payments could be interrupted for an extended
period on the non-investment certificates due to the size of the
combined Shiloh notes. This would result in lowered ratings,
potentially to 'D'. In addition, the reduction of the interest
on these certificates would leave less of a buffer for future
shortfalls relating to other assets in the trusts, which are, or
may become, impaired, potentially shorting more senior classes.

Standard & Poor's is in the process of reviewing each of the
transactions. The negative CreditWatch placement will remain in
effect until the reviews are complete and the ultimate impact of
the Shiloh modifications on trust cash flows can be discerned.

                    Shiloh Loan Modifications

                            Approx         Combined     Total
               # of      Balances (mil$)     Note        as %
Transaction    Loans     A Note   B Note    Balance    of pool

MLMI 1996-C2     4        $31      $6         $37         5.2%
MLMI 1997-C1     6        $31      $6         $37         6.4%
CMAC 1997-ML1   17        $75      $13        $88        10.0%

             RATINGS PLACED ON CREDITWATCH NEGATIVE

              Merrill Lynch Mortgage Investors Inc.
                Pass-thru certs series 1996-C2

                      Rating
     Class     To               From       Credit Support
     E         BBB-/Watch Neg   BBB-                  19%
     F         BB-/Watch Neg    BB-                   10%
     G         CCC/Watch Neg    CCC                    5%

              Merrill Lynch Mortgage Investors Inc.
                Pass-thru certs series 1997-C1

                      Rating
     Class     To               From       Credit Support
     E         BBB-/Watch Neg   BBB-                  16%
     F         B/Watch Neg      B                      7%
     G         B-/Watch Neg     B-                     6%

              Commercial Mortgage Acceptance Corp.
     Commercial mortgage pass-thru certs series 1997-ML1

                      Rating
     Class     To               From       Credit Support
     E         BBB-/Watch Neg   BBB-                  14%


METROMEDIA FIBER: Launches New Skilled Response Bundled Product
---------------------------------------------------------------
Continuing to take advantage of its broad portfolio of assets,
Metromedia Fiber Network, Inc., the leading provider of optical
communications infrastructure solutions, announced a new Skilled
Response bundled product that combines technical infrastructure
with expert system management to reduce the complexity of
operating a production system and allow in-house teams to focus
on mission critical system functionality.  This new bundle is
part of MFN's strategy to leverage its full breadth of assets
and services to create tools that meet the real-life needs of
the changing market.

MFN's Skilled Response is designed to provide customers with an
easy-to-use, entry service that seamlessly integrates outsourced
expert system management and support with in-house capabilities
to create a complete, cost-effective solution.  This service
enables customers to focus more time on core system tasks by
providing operational support including experienced
troubleshooting, solid system monitoring and change management
for high-content availability and a reliable infrastructure.

"At MFN, we have the most diverse and compatible suite of assets
in the industry and are committed to using these assets to
creating bundled offerings that meet the needs of our customers
and the changing business environment," said John Gerdelman,
president and chief executive officer, MFN.  "Our Skilled
Response bundle leverages our expertise and infrastructure
foundation to create a highly-beneficial, customer-driven
product that operationally supports a customer's own in-house
resources.  By managing the technical infrastructure, customers
can focus on running and growing their core business."

MFN's Skilled Response service includes MFN's 100% up-time SLA.
The service is available everywhere MFN managed services are
offered including all MFN data centers throughout the U.S.

MFN is the leading provider of optical communications
infrastructure solutions.  The Company combines the most
extensive metropolitan area fiber network with a global optical
IP network, state-of-the-art data centers and award winning
managed services to deliver fully integrated, outsourced
communications solutions to high-end companies.  The all-fiber
infrastructure enables MFN customers to share vast amounts of
information internally and externally over private networks and
a global IP backbone, creating collaborative businesses that
communicate at the speed of light.

On May 20, 2002, Metromedia Fiber Network, Inc. and most of its
domestic subsidiaries commenced voluntary Chapter 11 cases in
the United States Bankruptcy Court for the Southern District of
New York. For more information on MFN, visit http://www.mfn.com


MISSISSIPPI CHEMICAL: Files for Chapter 11 Protection in Miss.
--------------------------------------------------------------
Mississippi Chemical Corporation (OTC Bulletin Board: MSPI) has
filed for reorganization under Chapter 11 of the U.S. Bankruptcy
Code. The company will continue to operate its businesses during
the period of the reorganization process. The filing includes
the parent company and its subsidiaries Mississippi Chemical
Company, L.P., Mississippi Nitrogen, Inc., MissChem Nitrogen,
L.L.C., Mississippi Chemical Management Company, Mississippi
Phosphates Corporation, Mississippi Potash, Inc., Eddy Potash,
Inc., Triad Nitrogen, L.L.C., and Melamine Chemicals, Inc. The
company's affiliate Farmland MissChem Limited and its associated
companies, as well as the company's foreign subsidiaries and
Houston, Texas, ammonia terminal, are not included in these
proceedings.

The voluntary Chapter 11 petitions were filed in the U.S.
Bankruptcy Court in Jackson, Miss.  Following a review by its
Board of Directors, the company determined that a Chapter 11
reorganization is in the best long-term interests of the company
and its stakeholders.

"Over the past five years, the combination of the depression in
the agricultural sector and the extreme increase and volatility
in the price of domestic natural gas, the company's primary raw
material, has resulted in substantial financial losses for the
company. Despite widespread actions to materially reduce our
operating costs, it is apparent to the company's management and
our lenders that the cumulative effect of these losses, along
with the current industry environment, requires that the capital
structure of the company be modified significantly. The most
efficient way of accomplishing this under the circumstances is
through a Chapter 11 reorganization," Charles O. Dunn, president
and chief executive officer of Mississippi Chemical Corporation,
said.

Several of the company's existing lenders, led by Harris Trust
and Savings Bank, will provide debtor-in-possession financing of
up to $37.5 million, subject to approval by the Bankruptcy
Court. "We are pleased that several of our banks, with whom we
have been working over the past few years, have agreed to
provide the company with a level of financing during the
reorganization process which we believe will be adequate," Dunn
said. This financing will be used to assist the company during
its reorganization process and to support normal operating
costs, such as employee payroll and benefits, vendor payments
and production operation expenses.

Mississippi Chemical has also engaged Gordian Group, LLC to
assist it in exploring various financial restructuring
alternatives, including stand-alone recapitalization and third-
party investment scenarios.

Since the company has filed for reorganization, it did not make
the semi-annual interest payment due Thursday on the 7-1/4%
senior notes. Mississippi Chemical's management is in
discussions with several of the company's key constituencies,
including lenders under the company's existing senior secured
credit facility and an informal committee of holders of the
company's unsecured 7-1/4 percent senior notes, regarding
possible reorganization structures.

The company expects that its trade suppliers, unsecured trade
creditors, employees and customers will not be materially
adversely affected by the outcome of this process. "We will do
all that we can to see that the restructuring goes as
expeditiously as possible. We have a very dedicated workforce
and some excellent operating assets. We expect to emerge from
this process as a stronger, more flexible company with an
ability to better focus our attention on the needs of our
customers," Dunn concluded.

Mississippi Chemical Corporation is a leading North American
producer of nitrogen, phosphorus and potassium products used as
crop nutrients and in industrial applications. Production
facilities are located in Mississippi, Louisiana and New Mexico,
and through a joint venture in The Republic of Trinidad and
Tobago.

For further information please visit its Web site @
http://www.misschem.com


MORGAN STANLEY: Fitch Affirms Ratings on Series 1999-FNV1 Notes
---------------------------------------------------------------
Morgan Stanley Capital 1 Inc., commercial mortgage pass-through
certificates, series 1999-FNV1 $66.7 million class A-1, $339.9
million class A-2, and the interest-only classes are affirmed at
'AAA' by Fitch Ratings. In addition, Fitch affirms the following
classes: $33.2 million class B at 'AA', $26.9 million class C at
'A', $12.6 million class D at 'A-', $30 million class E at
'BBB', $14.2 million class F at 'BBB-', $20.5 million class G at
'BB+', $7.9 million class H at 'BB', $9.5 million class J at
'BB-', $7.9 million class K at 'B+', $6.3 million class L at
'B', $6.3 million class M at 'B-', $9.5 million class N at 'CC'.
Fitch does not rate the $6.3 million class O certificates. The
rating affirmations follow Fitch's annual review of the
transaction, which closed in April 1999.

The rating affirmations reflect the consistent loan performance
and minimal reduction of the pool collateral balance since
closing.

CapMark Services, L.P., the master servicer, collected year-end
2002 financials for 80% of the pool balance. Based on the
information provided the resulting YE 2002 weighted average debt
service coverage ratio is 1.54 times compared to 1.40x at
issuance for the same loans.

Currently, six loans (4.7%) are in special servicing. The
largest loan is secured by a retail property in Knoxville, TN
and is currently 60 days delinquent. The decline in performance
has been caused by tenant vacancies at the property. The
borrower and special servicer are in the process of a
negotiating workout to bring the loan current. The next largest
specially serviced loan was originally secured by eight assisted
living facilities, located in Alabama and is currently real
estate-owned. There are only two of the eight facilities
remaining. The special servicer is in the process of reviewing a
contract for sale for the remaining two. Eight loans (6.2%)
reported YE 2002 DSCRs below 1.00x. One of the loans (3.5%),
Quail Oaks Apartments, is located in Tampa, FL. The property has
been affected by increased vacancy and turnover as well as
increases in real estate taxes and insurance.

Fitch will continue to monitor this transaction, as surveillance
is ongoing.


MOSAIC GROUP: Enters Deal to Sell Mosaic Performance for $4.2MM
---------------------------------------------------------------
Mosaic Group Inc. (TSX:MGX) announced that its affiliate, Mosaic
Performance Solutions Inc., has entered into an agreement with a
company, formed by two Company officers, Marc Byron and David
Graf, for the sale of the assets of Mosaic Performance Solutions
Inc., for proceeds of approximately US$4.2 million. The sale of
Mosaic Performance Solutions Inc. was entered into as a part of
the Company's ongoing and comprehensive capital and debt
restructuring efforts pursuant to which it retained, in January
2003, Lazard Freres & Co. LLC, New York, as investment banker to
assist in the possible sale of all or part of the Company.

In December, 2002, the Company and certain of its Canadian
subsidiaries and affiliated companies obtained an order from the
Ontario Superior Court of Justice under the Companies' Creditors
Arrangement Act (Canada) to initiate the restructuring of its
debt obligations and capital structure. Additionally, certain of
the Company's US Subsidiaries commenced proceedings for
reorganization under Chapter 11 of the U.S. Bankruptcy Code in
the United States Bankruptcy Court for the Northern District of
Texas in Dallas. Pursuant to these filings, the Company and its
relevant subsidiaries continue to operate under a stay of
proceedings.

The sale of the assets of Mosaic Performance Solutions Inc. is
subject to various conditions, including receipt of all
necessary consents and approvals, including (among others), the
approval of the United States Bankruptcy Court and the granting
of certain relief by the Ontario Superior Court of Justice. As
is customary in connection with a sale of assets of a company
that is under the protection of Chapter 11 of the U.S.
Bankruptcy Code, the sale to MG LLC shall be subject to the
receipt by the Company of higher and better offers at an auction
to be conducted by the Company on May 19, 2003 at 3:00 p.m.
(Central) if a higher or better offer is received by Lazard
Freres & Co. LLC by 10:00 a.m. (Central) on that date. Offers
may be delivered by fax to Lazard Freres & Co. LLC, to the
attention of Peter Shawn, Managing Director, at fax number (212)
332-5729. Completion of the sale is expected to occur no later
than May 30, 2003.

The Company also announced that Marc Byron, its Vice Chairman,
Director and Chief Executive Officer, and David Graf, an officer
of the Company, have resigned from such positions given their
involvement in the sale transaction described above. Mr. Byron
and Mr. Graf will remain as officers of Mosaic Performance
Solutions Inc. to continue its operations until the completion
of the sale.

The Company also announced it has sought and obtained from the
Ontario Superior Court of Justice an order granting it and
certain of its Canadian subsidiaries and affiliated companies an
extension of protection under the Companies' Creditors
Arrangement Act (Canada) to June 16, 2003.

The order of the Ontario Superior Court of Justice also accepted
and approved the report dated May 12, 2003 of KPMG Inc., in its
capacity as monitor of the Company. A copy of the report will be
filed by the Company with the Canadian securities regulators and
will be available at their Web site at http://www.sedar.com

The Company also announced that it will be unable to file its
results for the interim financial period ended March 31, 2003
and the related management's discussion and analysis by the
required filing date under applicable Canadian securities
legislation.

The preparation and filing of the Financial Statements is
delayed due to the ongoing restructuring of the Company's debt
obligations and capital structure. An announcement will be made
when and if the Company determines that it will be in a position
to file its Financial Statements. In accordance with OSC Policy
57-603, the Company intends to satisfy the provisions of the
alternate information guidelines until it has satisfied its
financial statement filing requirements by filing with the
relevant securities regulatory authorities, throughout the
period in which it is in default, the same information it
provides to all of its creditors at the times the information is
provided to the creditors and in the same manner as it would
file a material change report pursuant to the Securities Act
(Ontario).

Mosaic Group Inc., with operations in the United States and
Canada, is a leading provider of results-driven, measurable
marketing solutions for global brands. Mosaic specializes in
three functional solutions: Direct Marketing Customer
Acquisition and Retention Solutions; Marketing & Technology
Solutions; and Sales Solutions & Research, offered as integrated
end-to-end solutions. Mosaic differentiates itself by offering
solutions steeped in technology, driven by efficiency and
providing measurable and sustainable results for our Brand
Partners. Mosaic trades on the TSX under the symbol MGX. Further
information on Mosaic can be found on its Web site at
http://www.mosaic.com


NAT'L STEEL: Committee Secures Blessing to Hire Hatch Consulting
----------------------------------------------------------------
The Official Committee of Unsecured Creditors in National Steel
Debtors' chapter 11 cases sought and obtained the Court's
authority to retain Hatch Consulting as its independent
engineering consultant.

The Committee needs Hatch to assist in determining:

  (a) the quality of the Debtors' major operating plants and
      assets located in Mishawaka, Indiana, Ecorse, River Rouge
      and Canton, Michigan, Granite City, Illinois, Portage,
      Indiana, and Keewatin, Minnesota in order to determine the
      operating characteristics of the Facilities and cost
      structure, including the appropriate amount of capital
      expenditures that may be required to be made within the
      next few years to maintain the competitive nature of the
      Facilities; and

  (b) the development of a "manpower plan" for the Facilities
      which will suggest any modifications Hatch deems necessary
      to ensure that the Facilities can be operated profitably
      in the event that the Debtors reorganize their businesses
      on a stand alone basis rather than through a sale.

If a sale of substantially all of the Debtors' assets is
consummated, Hatch's expertise will be critical in assisting the
Committee in its analysis of the assets' value, which will be a
very important variable in the Committee's position as to the
manner in which the sale proceeds should be allocated.  However,
if a sale does not occur, an alternative to the sale will need
to be formulated for the Debtors' businesses to remain valuable.
Hatch's assistance will be vital to the Committee's role in
developing various strategies with the Debtors.

The Committee relates that Hatch is a recognized leader in
providing consulting services to the steel industry.  Hatch has
extensive experience in assessing the operating structure of
integrated steel mills, including the quality of fixed assets,
the amount and nature of necessary capital expenditures and the
labor component, each of which needs to be reviewed in the event
that these Facilities are to be reorganized on a stand alone
basis.  Hatch's professionals who will have primary
responsibility in rendering the appraisal and other services
include Richard McLaughlin as team leader and 12 other
professionals who are experienced in conducting the analysis.

For its services, Hatch will be compensated on an hourly rate,
not to exceed $150,000 in the aggregate, for the services
rendered and will be reimbursed for its reasonable out-of-pocket
expenses incurred in connection with the services. (National
Steel Bankruptcy News, Issue No. 29; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


NATIONSRENT: Reorganized Debtor's Initial Directors & Officers
--------------------------------------------------------------
On the Effective Date, these persons will sit as initial
directors of NR Holdings Inc. to oversee the reorganized
NationsRent's business operations:

(1) Thomas W. Blumenthal

Mr. Blumenthal is a Managing Director of The Baupost Group, LLC,
a registered investment advisor that manages discretionary
equity capital following a value investment philosophy, a
position he has held since 1993.  Mr. Blumenthal previously
served on the boards of directors of Data Documents, Inc. from
1988 to 2000, Richey Electronics, Inc. from 1993 to 1999 and RMA
Home Services, Inc. from 1997 to 1999.  He graduated from
Claremont McKenna College with a B.A. degree in Economics in
1981.

(2) Andrew P. Hines

Mr. Hines has more than 25 years of experience as a senior level
executive for various companies.  Since 2000, Mr. Hines has been
a senior partner of Hines & Associates, a management consulting
group.  He also served as Interim Chief Financial Officer of the
International Food Manufacturing Company and as chief financial
officer, chief operating officer and executive vice president of
Ardent Communications, formerly CAIS Internet.  In 1997, Mr.
Hines was one of two initial members of a new management team of
Outboard Marine Corporation, a marine engine manufacturing
company, and from 1997 to 2000, he served as Outboard Marine's
Executive Vice President and Chief Financial Officer.  Mr. Hines
is a Certified Public Accountant and has a B.B.A, from St.
John's University.  He is a member of the American Institute of
Certified Public Accountants, the New York Society of Certified
Public Accountants and the Financial Executives Institute.

(3) Irving M. Levine

Mr. Levine has over 40 years experience in the construction
industry.  At the end of 2002, Mr. Levine retired as the
Chairman and Chief Executive Officer of Multiquip, Inc., a
manufacturer and distributor of small and medium-sized
construction equipment and a major supplier to NationsRent,
where he worked since 1973. Mr. Levine is the recipient of
numerous awards and honors and holds a B.S. degree in Civil
Engineering from Northeastern University.

(4) Thomas J. Putnam

Mr. Putman will also serve as the Chief Executive Officer of Las
Olas Thirteen Corporation.  Mr. Putman is an investment partner
of Phoenix Rental Partners, LLC.  From March 2002 to August
2002, he served as an industry consultant to the Committee of
Unsecured Creditors of NationsRent.  Currently, Mr. Putman is
retired from Fluor Corporation where he served in a number of
capacities, most recently as the Chief Executive Officer of
GlobEquip.com, a global, internet-enabled trading company
focused on the mining and construction equipment vertical
markets.  From 1999 to 2000, Mr. Putman served as Senior Vice
President of Fluor Global Services.  From 1997 to 1999, he
served as Group President for Fluor Daniel Diversified Services
Group.  Mr. Putman currently serves as a director of Soff.Cut,
International.

(5) Bryan T. Rich

Mr. Rich will also serve as Co-Chairman of the Board of
Directors and as Executive Director of NR Holdings subsidiary,
Las Olas Thirteen Corporation.  Mr. Rich is the co-founder and a
Managing Member of Phoenix Rental and Boston Rental Partners,
LLC.  He is a former Senior Vice President of NationsRent for
the Northeast Region and is a Trustee of two real estate
investment trusts, as well as President of TREC, LLC, an active
commercial real estate company currently leasing three
properties to NationsRent.  Mr. Rich was the majority
stockholder and President of Logan Equipment, Corp., which
merged with NationsRent in December 1998. He was a co-founder of
Commonwealth National Bank and currently serves on the bank's
Board of Directors.  Mr. Rich is a 1978 graduate of Boston
College, where he received his Bachelor of Science in Operations
Management.

(6) Greg A. Rosenbaum

In 1989, Mr. Rosenbaum founded, and since that time has served
as President of, Palisades Associates, Inc., a merchant banking
and consulting company, which has done consulting work for
Baupost. Mr. Rosenbaum serves as a director of Playcore
Holdings, Inc. and The Whaler on Kaanapali Beach.  He is a
member of The Dean's Council at Harvard's John F. Kennedy School
of Government.  Mr. Rosenbaum received an A.B. from Harvard
College in 1974, a Master in Public Policy degree from Harvard's
Kennedy School in 1978, and a J.D. degree from Harvard Law
School in 1978.  He is admitted to the active practice of law in
Ohio and Illinois and is a member of the American Bar
Association and its Sections on Business Law and Antitrust.

(7) Douglas M. Suliman, Jr.

Mr. Suliman will also serve as Co-Chairman of the Board of
Directors and as Executive Director of Las Olas Thirteen
Corporation, an NR Holdings subsidiary.  Mr. Suliman is the co-
founder and a Managing Member of Phoenix Rental and Boston
Rental.  Mr. Suliman also is the founder and President of Island
Partners, Ltd., a private merchant banking firm specializing in
corporate restructuring, leveraged acquisitions and mergers and
acquisitions for both public and private companies, a position
he has held since 1990.  He graduated in 1977 with a B.S. from
the University of Massachusetts at Amherst and in 1980 with an
M.B.A. from Northeastern University.

On the Effective Date, these persons will serve as NR Holdings'
initial officers:

    Name                     Title
    ----                     -----
    Thomas J. Putnam         President and CEO
    Bryan T. Rich            Exec. Dir. and Board Co-chairman
    Douglas M. Suliman Jr.   Exec. Dir. and Board Co-chairman

NationsRent proposes to pay $500,000 as base salary per year for
Mr. Putnam, as President and CEO, and $400,000 per year as base
salary for each Executive Director.

                      Emergence Bonuses

Upon Emergence, NationsRent will make these bonus payments:

  -- $2,964,440 to certain members of the management pursuant to
     the Debtors' Retention Bonus Plan;

  -- $600,000 to the Chief Executive Officer D. Clark Ogle; and

  -- $600,000 to the Chairman of NationsRent's Board of
     Directors. (NationsRent Bankruptcy News, Issue No. 31;
     Bankruptcy Creditors' Service, Inc., 609/392-0900)


NETDRIVEN SOLUTIONS: March 31 Net Capital Deficit Tops $1 Mill.
---------------------------------------------------------------
NetDriven Solutions Inc. (NDS: TSX) announced its interim
financial results for the six-month period ending March 30,
2003.

                           Financial

Revenues generated by the Company in the first half increased
approximately $1,507,000 or 375% compared to the same period in
fiscal 2002. This increase is driven primarily by revenues of
the Partners Computer Systems subsidiary. Despite a significant
year over year increase; revenues are 36% lower than Company
expectations due to the continued downturn in IT spending in
Canada during the first three months of 2003.

Total expenses for the first six months ending March 31, 2003
have decreased approximately $237,000 or 14% as compared to the
previous period. This decrease continues to be driven primarily
by the discontinuation of the Calgary-based seismic data
business. Also contributing to expense reduction was the sale of
the KSuite knowledge protection and sharing software. The
Company's Loss from Operations improved by approximately 30% as
compared to the previous year.

NDS's cash position as at March 31, 2003 improved by $85K as
compared to previously reported first quarter figures. This is a
result of the sale of intangible assets and equipment associated
with the KSuite business and a reduction in
days-sale-outstanding. Customer deposits and investments were
reduced to zero as NDS came to an agreement to exchange the
deposit for the NDS investment in that same company. Promissory
notes payables were reduced upon the maturity and repayment of a
$150,000 note. The Company continues to work with creditors to
retire or reduce significant accounts payable related to
discontinued operations.

At March 31, 2003, the Company's balance sheet shows a working
capital deficit of about $3 million, and a total shareholders'
equity deficit of about $1 million.

                          Other

During the second quarter of fiscal 2003, NDS issued 1,678,056
shares in a private placement financing and issued 1,436,832
shares upon the conversion of debentures aggregating $207,235.
The Company also received shareholder approval to issue
4,500,000 shares pursuant to the terms of the Partners Computer
Systems acquisition.


NORTHWEST AIRLINES: Plans to Issue $150MM Convertible Sr. Notes
---------------------------------------------------------------
Northwest Airlines Corporation (Nasdaq: NWAC) announced its
intention to sell, subject to market and other conditions, $150
million of Convertible Senior Notes due 2023, to qualified
institutional buyers pursuant to Rule 144A, and to non-U.S.
persons pursuant to Regulation S, under the Securities Act of
1933.  The notes are expected to be guaranteed by Northwest
Airlines, Inc.

In addition, Northwest Airlines Corporation will grant initial
purchasers a 30-day option to buy up to an additional $22.5
million of the notes.  The interest rate, conversion rate
(including the circumstances in which a holder may convert
notes) and offering price are to be determined by negotiations
between Northwest Airlines Corporation and the initial
purchasers of the notes.

Northwest Airlines Corporation plans to use the net proceeds
from the offering for working capital and general corporate
purposes.

The notes being offered and the common stock issuable upon
conversion of the notes have not been registered under the
Securities Act, or any state securities laws, and may not be
offered or sold in the United States, absent registration under,
or an applicable exemption from, the registration requirements
of the Securities Act and applicable state securities laws.

Northwest Airlines Corporation is the parent of Northwest
Airlines, Inc., 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.

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 http://www.nwa.com

Northwest Airlines' 9.875% bonds due 2007 (NWAC07USR2) are
trading at about 72 cents-on-the-dollar, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NWAC07USR2
for real-time bond pricing.


ORION REFINING: Selling Louisiana Refinery to Valero for $500MM
---------------------------------------------------------------
Valero Energy Corporation (NYSE:VLO) has executed a purchase
agreement to acquire Orion Refining Corporation's 185,000-
barrel-per-day refinery in Louisiana for $400 million plus
approximately $100 million for working capital.

"This acquisition offers tremendous value for our shareholders
as the refinery will be a great strategic fit for Valero's
refining network," said Bill Greehey, Valero's Chairman of the
Board and Chief Executive Officer. "If you just consider the $2
billion investment made in the plant since 1985, we're getting
the refinery for only 20 cents on-the-dollar of replacement
value."

The sale will be financed with $250 million in cash and the
issuance of $250 million of three-year mandatory convertible
preferred securities. The majority owners are Credit Suisse
First Boston LLC, Trust Company of the West, Jefferies &
Company, Inc., and Oaktree Capital Management, LLC. The purchase
agreement also calls for a potential earn-out payment if agreed-
upon refining margins reach a specified level during any of the
next seven years. Any such payment cannot exceed $50 million in
a given year or $175 million in the aggregate.

Greehey noted that Valero is well-positioned to make this
acquisition. "Our debt-to-capitalization ratio will remain
virtually unchanged. At the end of the first quarter, our debt-
to-capitalization ratio was just slightly above 41% and when you
factor in this acquisition, our debt-to-capitalization ratio
will continue to be less than 42%," he said.

The acquisition has been approved by the board of directors of
both Valero and Orion. However, because Orion filed for
bankruptcy yesterday, the sale also requires the approval of the
bankruptcy court. Orion has petitioned the court for an
expedited sales process and if granted, the transaction, which
has already received FTC approval, is expected to close in late
June.

             A Great Deal For Valero and its Shareholders

"The plant's sour crude processing and significant conversion
capacity make it a very complex refinery," said Greehey. "Its
Nelson Complexity ranking of 11.6 is well above the average U.S.
refinery. However, its profit potential has historically been
impeded by the high overall cost structure required to support a
stand-alone facility. It is important to note that we are buying
the Orion refinery - not the Orion Refining Corporation. As a
part of Valero's much larger refining system, the refinery's
overhead costs will be dramatically decreased, its purchasing
leverage will be substantially enhanced and its on-stream
reliability can be significantly improved. The refinery will
also benefit from millions of dollars in synergies with our
other Gulf Coast refineries as well as Valero's significant
expertise in sour crude processing and economies of scale in
sour crude purchasing. As a result, this refinery's tremendous
earnings potential can finally be realized.

"In fact, we've identified more than $55 million in annual cost
savings from reduced overhead, operational and reliability
improvements and synergies with our other Gulf Coast
refineries," said Greehey. "We have also identified a number of
low-cost, high-return projects. And, based on our margin
assumptions and our planned improvements for the refinery in the
first quarter of 2004 alone, we are projecting that the refinery
will generate more than $108 million in annual net income,
resulting in accretion to our annual earnings of more than 50
cents per share.

"When you consider the low purchase price we're paying for this
asset, the enormous upside potential that we see operationally,
and the strong accretion to our earnings, you can see why we
believe this is a very strategic acquisition for Valero," said
Greehey.

             A Great Refinery With Unrealized Potential

The refinery, which is adjacent to the Mississippi River, is
located in the St. Charles Parish, approximately 15 miles west
of New Orleans. It has a total throughput capacity of 185,000
BPD and a crude capacity of 155,000 BPD. Approximately 74% of
the refinery's product slate is composed of gasoline,
distillate, and other light products.

According to Greehey, the refinery has an excellent logistics
infrastructure, with access to the Louisiana Offshore Oil Port
(LOOP) where it can receive crude oil via a 24-inch pipeline or
over five marine docks along the Mississippi River. Finished
products can be shipped over these docks or by pipeline into
either the Plantation or Colonial pipeline networks for
distribution to the eastern seaboard of the United States.

"And, nearly all of the refinery's key units are either new or
have been recently upgraded," said Greehey. These units include
a 60,000-BPD delayed coker and a 13,000-BPD alkylation unit as
well as a new 90,000-BPD fluid catalytic cracking unit (FCCU)
that includes a flue-gas scrubber. And, in December of last
year, a $70 million, 25,000-BPD continuous catalytic
regenerating (CCR) reformer was installed. "This unit is
critically important to the enhanced profitability of this
refinery," said Greehey. "It will help us avoid the lost
production and product downgrades caused by past hydrogen
shortages and it will enhance our ability to produce cleaner,
higher value products."

                     Great Upside Potential

"The refinery also has substantial upgrade potential that will
significantly enhance profitability with minimal capital
investment. We have already identified approximately $25 million
in expansion and upgrade opportunities that will enable the
refinery to process additional heavy feedstocks, increase
throughput capacity, upgrade its product yields and improve on-
stream reliability. These projects alone are expected to add
more than $50 million to annual operating income."

Some of the projects planned for the first quarter of next year
include increasing the plant's crude processing capacity from
155,000 BPD to 185,000 BPD and expanding the coker capacity to
70,000 BPD. According to Greehey, current projections indicate
that cash flow from operations will be more than sufficient to
cover all of the projects planned for 2004 and 2005 - including
projects to meet the required Tier II sulfur reductions.

                         A Great Future

"We are looking forward to working with the outstanding refining
workforce to realize the plant's potential and plan to offer pay
and benefits that are comparable to or better than what they are
currently receiving," Greehey said.

Valero Energy Corporation is a Fortune 500 company based in San
Antonio, with approximately 20,000 employees and annual revenues
of nearly $30 billion. The company currently owns and operates
12 refineries in the United States and Canada with a combined
throughput capacity of approximately two million barrels per
day, making it one of the nation's top refiners of petroleum
products. Valero is also one of the nation's largest retail
operators with approximately 4,100 retail outlets in the United
States and Canada under various brand names including Diamond
Shamrock, Ultramar, Valero, Beacon and Total.


PLASSEIN INT'L: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Lead Debtor: Plassein International Corp.
             165 River Road
             Willington, Connecticut 06279

Bankruptcy Case No.: 03-11489

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                       Case No.
      ------                                       --------
      Plassein International of Martin, Inc.       03-11491
      Plassein International of Ontario, LLC       03-11492
      Plassein International of Salem, Inc.        03-11493
      Plassein International of Spartanburg, Inc.  03-11494
      Plassein International of Thomasville, Inc.  03-11495
      Teno Films                                   03-11496

Type of Business: specialty plastic film and packaging company

Chapter 11 Petition Date: May 14, 2003

Court: District of Delaware

Judge: Peter J. Walsh

Debtors' Counsel: Adam G. Landis, Esq.
                  Klett Rooney Lieber & Schorling
                  1000 West Street, Suite 1410
                  Wilmington, DE 19801
                  Tel: 302-552-4200

                         -and-

                  Daniel C. Cohn, Esq.
                  Cohn Khoury Madoff & Whitesell LLP
                  101 Arch Street
                  Boston, MA 02110
                  Tel: 617-951-2505

Estimated Assets: $50 Million to $100 Million

Estimated Debts: More than $100 Million

Debtors' 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Massachusetts Mutual Life   12% Jr, 13% Sr         $15,046,409
Insurance Company           and 15% Jr Sub. Debt
David L. Babson & Co., Inc.
1500 Main Street
Springfield, MA 01115
Tel: 413-226-1615
Fax: 413-226-2615

BancBoston Ventures, Inc.   12% Jr, 13% Sr and     $10,831,000
BancBoston Capital          15% Jr Sub. Debt
Daniel Reese
175 Federal Street 10th Floor
Boston, MA 02110
Tel: 617-434-2442
Fax: 617-434-6175

Libra Mezzanine Partners     13% Sr Sub. Debt       $5,909,200
II, LP
James Upchurch
Caltius Mezzanine Partners
11766 Wilshire Blvd.,
Suite 850
Los Angeles, CA 90025

Suntrust Banks, Inc.        13% Sr Sub. Debt        $5,909,200
Palmer Henson, Director
Suntrust Equity Partners
303 Peachtree Street NE,
25th Fl.
Atlanta, GA 30308
Tel: 404-827-6531
Fax: 404-588-7501

WCA(Private Equity), LLC    13% Sr Sub. Debt        $5,909,200
1170 Peachtree Street
Suite 1610
Atlanta, GA 30309
Tel: 404-253-6369
Fax: 404-253-6377

Equistar Chemicals, LP      Trade                   $4,507,244
Tom Rigney
11530 Northlake Drive
Cincinnati, OH 45249
Tel: 513-530-6679
Fax: 281-588-2525

Exxon Mobil                 Trade                   $2,299,040
Dennis Moon
Treasurer's Credit Dept.
13501 Katy Freeway
Houston, TX 77079
Tel: 281-870-6679
Fax: 281-588-2525

MassMutual Corporate        12% Jr, 13 Sr and       $1,682,821
Investors                  15% Jr Sub. Debt
Michael P. Hermsen, CFA
David L. Babson & Company,
LLC
1500 Main Street
Springfield, MA 01115
Tel: 413-226-1615
Fax: 413-226-2615

MassMutual Participation    12% Jr, 13% Sr and        $890,941
Investors
David L. Babson & Company,
LLC
1500 Main Street
Springfield, MA 01115
Tel: 413-226-1615
Fax: 413-226-2615

Sun Chemical Corp.          Trade                     $543,815
Kim Howson
320 Forbes Blvd.
Mansfield, MA 02048
Tel: 508-339-3526
Fax: 508-339-5465

Colortech, Inc.             Trade                     $529,290
Dave Hogdahl
5712 Commerce Blvd.
Morristown, TN 37814
Tel: 845-398-9827
Fax: 845-398-9835

Dow Chemical Co.            Trade                     $333,908
Scott Crane
2020 Dow Center
Midland, MI 48674
Tel: 989-636-2534
Fax: 989-638-9852

Basell                      Trade                     $247,590

Ernst & Young               Trade                     $189,115

Techmer PM                  Trade                     $154,306

Zurich N.A.                 Insurance                 $151,126

GulfStar Plastics 2001,     15% Jr Sub. Debt          $149,025
LLC

OPG Partners                Trade                     $134,865

Caraustar                   Trade                     $125,053

Cryovac Sealed Air Corp     Trade                     $123,185


PLIANT CORP: Offering $250 Million of Senior Secured Notes
----------------------------------------------------------
Pliant Corporation intends to offer $250 million aggregate
principal amount of Senior Secured Notes Due 2009. The net
proceeds from the offering of the Notes are intended to be used
to repay borrowings under Pliant's credit facilities, which are
expected to be amended effective upon consummation of the
offering.  The execution of such amendment is a condition to the
offering of the Notes.

The offering of the Notes will not be registered under the
Securities Act of 1933, as amended, and the Notes may not be
offered or sold in the United States absent registration or an
applicable exemption from the registration requirements.

Pliant Corporation is a leading producer of value-added film and
flexible packaging products for personal care, medical, food,
industrial and agricultural markets.  Pliant operates 26
manufacturing and research and development facilities around the
world and employs approximately 3,250 people.

As reported in Troubled Company Reporter's April 8, 2003
edition, Standard & Poor's Ratings Services revised its outlook
on Pliant Corp., to negative from stable, reflecting a weaker
than-expected trend in the company's operating and financial
performance, and concerns regarding its liquidity position and
onerous debt maturities.

At the same time, Standard & Poor's affirmed its 'B+' corporate
credit rating on the Schaumburg, Illinois-based company. Total
debt outstanding was $737 million as at Dec 31, 2002.


PRIME RETAIL: Liquidity Issues Raise Going Concern Doubt
--------------------------------------------------------
Prime Retail, Inc. (OTC Bulletin Board: PMRE, PMREP, PMREO)
announced its operating results for the first quarter ended
March 31, 2003.

FFO Results:

Funds from Operations, a widely accepted measure of REIT
performance, was $5.2 million, or $(0.01) per diluted share
(after allocations to preferred shareholders) for the quarter
ended March 31, 2003 compared to $7.0 million, or $0.02 per
diluted share, for the same period in 2002. The first quarter of
2003 FFO results include $1.0 million of net interest expense
attributable to mortgage indebtedness that was defeased in
December 2002. This net interest expense had no impact on the
Company's operating cash flow during 2003 because such payments
were made from previously established escrows. FFO adjusted
("Adjusted FFO") to exclude the impact of the net interest
expense attributable to the defeased indebtedness was $6.1
million, or $0.01 per diluted share, for the quarter ended March
31, 2003. A reconciliation of the Company's income (loss) from
continuing operations to FFO and Adjusted FFO is presented in
the accompanying supplemental information page in this press
release.

The decrease in Adjusted FFO for the first quarter of 2003
compared to FFO for the same period in 2002 reflects (i) reduced
weighted-average occupancy in the Company's portfolio during the
2003 period, (ii) the impact of economic changes in rental rates
and (iii) the loss of net operating income resulting from the
disposition of properties, partially offset by interest savings
attributable to the repayment of indebtedness.

GAAP Results:

The Company reports its operating results in accordance with
accounting principles generally accepted in the United States.
Effective January 1, 2002, the Company adopted Statement of
Financial Accounting Standards No. 144, "Accounting for the
Impairment or Disposal of Long- Lived Assets." In accordance
with the requirements of FAS No. 144, the Company has classified
the operating results, including gains and losses related to
dispositions, for certain properties either disposed of or
classified as assets held for sale during 2002 as discontinued
operations in the accompanying Statements of Operations for all
periods presented. The operating results for properties that
were sold into joint venture partnerships during 2002 have not
been classified as discontinued operations in the accompanying
Statements of Operations because the Company still retains a
significant continuing involvement in their operations. Their
operating results are reflected in continuing operations in the
accompanying Statements of Operations through their respective
dates of disposition.

The Company's GAAP loss from continuing operations was $2.3
million and $6.4 million for the quarters ended March 31, 2003
and 2002, respectively. For the first quarter of 2003, the net
loss applicable to common shareholders was $8.0 million, or
$0.18 per share. For the first quarter of 2002, the net loss
applicable to common shareholders was $4.0 million, or $0.09 per
share.

The GAAP results for the first quarter of 2002 include a gain on
the sale of real estate of $16.8 million, or $0.39 per share,
resulting from the sale of a property into an existing joint
venture partnership. During the first quarter of 2002, the
Company also reported a loss from discontinued operations of
$8.7 million, or $0.20 per share, including a loss related to
disposition of $9.6 million.

Merchant Sales:

Same-store sales in the Company's outlet centers decreased by
7.5% for the first quarter of 2003 compared to the same period
in 2002. "Same-store sales" is defined as the weighted-average
sales per square foot reported by merchants for stores opened
and occupied since January 1, 2002. For the fiscal year ended
December 31, 2002, the weighted-average sales per square foot
reported by all merchants was $245.

Going Concern:

The Company's liquidity depends on cash provided by operations
and potential capital raising activities such as funds obtained
through borrowings, particularly refinancing of existing debt,
and cash generated through asset sales. Although the Company
believes that estimated cash flows from operations and potential
capital raising activities will be sufficient to satisfy its
scheduled debt service and other obligations and sustain its
operations for the next year, there can be no assurance that it
will be successful in obtaining the required amount of funds for
these items or that the terms of the potential capital raising
activities, if they should occur, will be as favorable as the
Company has experienced in prior periods.

During 2003, the Company's first mortgage and expansion loan
matures on November 11, 2003. The Mega Deal Loan, which is
secured by a 13 property collateral pool, had an outstanding
principal balance of approximately $262.9 million as of March
31, 2003 and will require a balloon payment of approximately
$260.7 million at maturity. Based on the Company's initial
discussions with various prospective lenders, it is currently
projecting a potential shortfall with respect to refinancing the
Mega Deal Loan. Nevertheless, the Company believes this
shortfall may be alleviated through potential asset sales and/or
other capital raising activities, including the placement of
mezzanine level debt. The Company cautions that its assumptions
are based on current market conditions and, therefore, are
subject to various risks and uncertainties, including changes in
economic conditions, which may adversely impact its ability to
refinance the Mega Deal Loan at favorable rates or in a timely
and orderly fashion, or which may adversely impact the Company's
ability to consummate various asset sales or other capital
raising activities.

In connection with the completion of the sale of six outlet
centers in July 2002, the Company guaranteed to FRIT PRT Bridge
Acquisition LLC (i) a 13% return on its approximately $17.2
million of invested capital, and (ii) the full return of its
invested capital in FP Investment LLC by December 31, 2003. As
of March 31, 2003, the Mandatory Redemption Obligation was
approximately $16.4 million. In April 2003, we made an
additional payment of approximately $1.1 million with net
proceeds from the March 31, 2003 sale of certain excess land
which reduced the balance of the remaining Mandatory Redemption
Obligation to approximately $15.3 million. Although the Company
continues to seek to generate additional liquidity to repay the
Mandatory Redemption Obligation through (i) the sale of FRIT's
ownership interest in the Bridge Properties and/or (ii) the
placement of additional indebtedness on the Bridge Properties,
there can be no assurance that it will be able to complete such
capital raising activities by December 31, 2003 or that such
capital raising activities, if they should occur, will generate
sufficient proceeds to repay the Mandatory Redemption Obligation
in full. Failure to repay the Mandatory Redemption Obligation by
December 31, 2003 would constitute a default, which would enable
FRIT to exercise its rights with respect to the collateral
pledged as security to the guarantee, including some of the
Company's partnership interests in the 13 property collateral
pool under the aforementioned Mega Deal Loan. Because the
Mandatory Redemption Obligation is secured by some of the
Company's partnership interests in the 13 property collateral
pool under the Mega Deal Loan, the Company may be required to
repay the Mandatory Redemption Obligation before, or in
connection with, the refinancing of the Mega Deal Loan.

These above listed conditions raise substantial doubt about the
Company's ability to continue as a going concern.

Prime Retail is a self-administered, self-managed real estate
investment trust engaged in the ownership, leasing, marketing
and management of outlet centers throughout the United States
and Puerto Rico. Prime Retail currently owns and manages 37
outlet centers totaling approximately 10.4 million square feet
of GLA. The Company also owns 154,000 square feet of office
space. As of March 31, 2003, the Company's owned portfolio of
properties were 86.7% occupied and 87.8% leased. Prime Retail
has been an owner, operator and developer of outlet centers
since 1988. For additional information, visit Prime Retail's Web
site at http://www.primeretail.com


PRIMUS: Will Present at NY Investor Conferences Later This Month
----------------------------------------------------------------
PRIMUS Telecommunications Group, Incorporated (Nasdaq: PRTL), a
global telecommunications services provider offering an
integrated portfolio of voice, data, Internet, and Web hosting
services, announced that its management has accepted invitations
to present at two brokerage firm-sponsored investor conferences
to be held later this month.

The speaking engagements were confirmed after PRIMUS reported
first quarter 2003 financial results, in which the Company
achieved record income from operations, positive net income and
record positive cash from operating activities. PRIMUS also
increased its 2003 target goals for revenue growth and net
income.

On May 28, 2003, PRIMUS will present at the Friedman, Billings,
Ramsey & Co., Inc. 7th Annual Technology & Growth Investor
Conference. The conference will be held in New York at the
Millennium Hotel Broadway, located at 145 West 44th Street. FBR
is an investment bank and institutional brokerage firm
headquartered in Washington, D.C. For more information, please
go to http://www.fbr.com

On May 29, 2003, PRIMUS will present at the CIBC World Markets
First Annual Convertible Conference. The conference will be held
in New York at the Hotel Inter-Continental, located at 111 East
48th Street. CIBC World Markets is a full-service investment
bank, active throughout North America and with a range of
capabilities in Europe and Asia. CIBC World Markets is a
subsidiary of the Toronto, Canada-based Canadian Imperial Bank
of Commerce. PRIMUS Canada, a wholly-owned subsidiary of PRIMUS,
is also based in Toronto. For more information, please go to
www.cibcwm.com for CIBC World Markets and www.primustel.ca for
PRIMUS Canada.

Live audio Web casts of PRIMUS's presentations can be accessed
on the Web site of the respective conference organizer. Replay
information for these presentations and a full schedule of
PRIMUS investor activities are available through the Investors
section of the Company's Web site at http://www.primustel.com

PRIMUS Telecommunications Group, Incorporated (NASDAQ: PRTL) is
a global telecommunications services provider offering bundled
voice, data, Internet, digital subscriber line (DSL), Web
hosting, enhanced application, virtual private network (VPN),
voice-over-Internet protocol (VoIP), and other value-added
services. PRIMUS owns and operates an extensive global backbone
network of owned and leased transmission facilities, including
approximately 250 points-of-presence (POPs) throughout the
world, ownership interests in over 23 undersea fiber optic cable
systems, 19 international gateway and domestic switches, a
satellite earth station and a variety of operating relationships
that allow it to deliver traffic worldwide. PRIMUS also has
deployed a global state-of-the-art broadband fiber optic ATM+IP
network and data centers to offer customers Internet, data,
hosting and e-commerce services. Founded in 1994 and based in
McLean, VA, PRIMUS serves corporate, small- and medium-sized
businesses, residential and data, ISP and telecommunication
carrier customers primarily located in North America, Europe and
the Asia-Pacific regions of the world. News and information are
available at PRIMUS's Web site at http://www.primustel.com

At December 31, 2002, Primus Telecommunications' balance sheet
shows a working capital deficit of about $73 million, and a
total shareholders' equity deficit of about $200 million.

Primus Telecomms.' 12.75% bonds due 2009 (PRTL09USR2) are
trading at about 95 cents-on-the-dollar, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=PRTL09USR2
for real-time bond pricing.


RURAL/METRO CORP: Will Increase Allowance for Doubtful Accounts
---------------------------------------------------------------
Rural/Metro Corporation (Nasdaq:RURL), a leading national
provider of ambulance and fire protection services, has
identified the need to increase its allowance for Medicare,
Medicaid and contractual discounts and doubtful accounts in the
range of $35 million to $45 million.

Jack Brucker, President and Chief Executive Officer said, "We
have identified the need to increase the allowance for discounts
and doubtful accounts in connection with the ongoing evaluation
of the collectibility of our accounts receivable. We are in the
process of quantifying the actual amount of the required
charge."

Brucker continued, "We believe that adequate provision was made
for revenues recognized for periods subsequent to our fiscal
2000 operational restructuring initiative; however, collections
on accounts receivable generated prior to that time (pre-June
2000) have proven to be substantially less than originally
anticipated, thereby impacting the adequacy of our current
allowance."

A charge in the range of $35-$45 million will cause the company
to be out of compliance with certain covenants contained in its
amended bank agreement. Brucker said, "We have an excellent
relationship with our lenders and are working on a variety of
alternatives to structure an amended credit agreement. We are
hopeful that we will resolve this matter expeditiously."

Brucker continued, "This charge is not expected to have a
material impact on our operating cash flows relative to revenues
generated after the restructuring, nor does it impact the
company's current cash balances. We have generated positive cash
flows from operating activities on a year-to-date basis and have
made progress in key operating statistics, which is reflected in
steady revenue growth, new business awards, renewals from long-
standing municipal and commercial customers, and enhanced
contract rates."

The company will file a request with the Securities and Exchange
Commission seeking the permitted five-day extension for filing
its Form 10-Q for the quarter ended March 31, 2003, and will
report its results for the third quarter once the related
analysis with respect to its accounts receivable has been
completed.

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
http://www.ruralmetro.com

Rural/Metro Corp.'s 7.875% bonds due 2008 (RURL08USR1) are
trading at about 70 cents-on-the-dollar, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=RURL08USR1
for real-time bond pricing.


SPECTRUM PHARMA.: Receives Additional $1.56 Million in Financing
----------------------------------------------------------------
Spectrum Pharmaceuticals, Inc. (Nasdaq: SPPI) has raised an
additional $1.56 million through the sale of newly issued shares
of Series D 8% Cumulative Convertible Preferred Stock to the
same group of investors who participated in the financing that
closed last week.  The institutional investors are well known
biotechnology investors, such as SCO Capital Partners, SDS
Merchant Fund, Xmark Funds and ProMed Partners, L.P. This second
closing brings total capital raised by Spectrum this month to $6
million.

"This additional investment by these investors reflects their
confidence in our Company," stated Rajesh Shrotriya, M.D.,
Chairman, Chief Executive Officer and President of Spectrum.
"Since we embarked on our oncology and generic drug strategy
last August, we have now raised more than $8.0 million through
the issuance of equity and received $2 million in licensing
payments. These cash sources have enabled us to greatly improve
our balance sheet and working capital and eliminate the "going
concern" explanatory paragraph in the report of our independent
auditor for the year ended December 31, 2002.  With the
additional milestone payments we expect from satraplatin and
ciprofloxacin advancements this year, we believe that we now
have resources in place to operate into the second half of next
year."

The preferred stock is convertible into Spectrum common stock at
a price of $2.35 per share.  Dividends on the preferred stock
are payable quarterly either in cash or common stock at the
discretion of the Company.  In addition, purchasers of the
preferred stock in this second transaction received warrants to
purchase 331,914 shares of common stock at $3.00 per share and
331,914 shares of common stock at $3.50 per share.  If
exercised, the warrants could generate up to an additional $2.2
million in proceeds to Spectrum.  The common stock and warrants
to purchase common stock have not been registered under the
Securities Act of 1933, as amended, and may not be offered or
sold in the United States without a registration statement or
exemption from registration.

Spectrum Pharmaceuticals' primary focus is to develop in-
licensed drugs for the treatment and supportive care of cancer
patients.  The Company's lead drug, satraplatin, is a phase 3
oral, anti-cancer drug being co-developed with GPC Biotech AG.
Elsamitrucin, a phase 2 drug, will initially target non-
Hodgkin's lymphoma.  Eoquin(TM) is being studied in the
treatment of superficial bladder cancer, and may have
applications as a radiation sensitizer.  The Company is actively
working to develop, seek approval for and oversee the marketing
of generic drugs in the U.S.  Spectrum also has a pipeline of
pre-clinical neurological drug candidates for disorders such as
attention-deficit hyperactivity disorder, schizophrenia, mild
cognitive impairment and pain, which it is actively seeking to
out-license or co-develop.  For additional information about the
Company, visit the Company's Web site at
http://www.spectrumpharm.com

                         *     *     *

                  Liquidity and Going Concern

In its most recent SEC filing, the Company reported:

"We have prepared the consolidated financial statements under
the assumption that we are a going concern. Since our inception,
we have incurred cumulative losses of approximately $141.7
million through December 31, 2002, and expect to incur
substantial losses over the next several years.

"On August 20, 2002, we announced a shift in our strategic focus
from discovery and development of neurology drugs to the in-
licensing of oncology drug candidates and the further
development of and strategic alliances for these drug candidates
and the out-licensing of our neurology drug candidates to
strategic partners. As a result of these changes and the
completion of a large Alzheimer's disease clinical trial, our
expense rate fell from approximately $7 million per quarter to
approximately $1.7 million during the three-month period ended
December 31, 2002 (exclusive of restructuring, drug product and
formulation charges), and we expect it to continue to fall to
approximately $1.5 million, or lower, per quarter beginning in
the first quarter of 2003 (exclusive of drug product and
formulation costs). The recent and the prospective reduction in
the expense rate is principally due to reductions in clinical,
research and administrative personnel representing an
approximate 78% reduction in personnel since December 2001, the
termination of a facility lease for office space used to
administer the Alzheimer's disease clinical trial, the reduction
of expenses for the manufacturing of Neotrofin supplies, a
reduction in our research and fellowship grant commitments, and
the elimination of the research operations of our functional
genomics business. Our expense rate in 2003 will be a function
of our drug development program. We have expanded a clinical
trial of Eoquin(TM) for the treatment of superficial bladder
cancer which will result in an increase in our expense rate
during 2003. In addition, if we decide to initiate a clinical
study of elsamitrucin in refractory non-Hodgkin's lymphoma, our
expense rate will increase.

"On September 30, 2002, we entered into a co-development and
license agreement with GPC Biotech AG for the development and
commercialization of our lead drug candidate, satraplatin. Under
the co-development and licensing agreement, we may receive up to
$22 million in license fees and milestone payments. The license
fee consists of a total of $4 million; $2 million upon signing
(which was received in October of 2002) and $1 million in cash
and a $1 million equity investment within 30 days after the
first dosing of a patient in a registrational study. GPC Biotech
has agreed to make additional payments totaling up to $18
million upon achieving agreed upon milestones. However, there
can be no assurance that any milestone will be achieved.
Furthermore, GPC Biotech has agreed to fully fund development
and commercialization expenses for satraplatin. Upon commercial
sale of satraplatin, if any, we will be entitled to receive
royalty payments based upon net sales.

"At the present time, our business does not generate sufficient
cash from operations to finance our short-term operations. We
will rely primarily on (a) raising funds through the sale of our
common stock and/or (b) out-licensing our technology, to meet
all of our short-term cash needs. We have generated operating
losses since our inception and our existing cash and investment
securities are not sufficient to fund our current planned
operations for the next 12 months. Therefore, we will need to
seek additional funding by the end of June 2003, or sooner,
through public or private financings, including equity
financings, and through other arrangements, to continue
operating our business. As has been stated by our independent
public accountants in their opinion, our current financial
position raises substantial doubt as to our ability to continue
as a going concern.

"Although no assurance can be given, we believe that we can
continue to operate as a going concern and, accordingly, our
consolidated financial statements have been prepared assuming
that we will continue as a going concern. Consequently, our
consolidated financial statements do not include adjustments
relating to the recoverability and classification of asset
carrying amounts or the amount and classification of liabilities
that would be required if we were not able to continue as a
going concern."


SPIEGEL INC: Taps Keen Realty as Special Real Estate Consultant
---------------------------------------------------------------
Spiegel, Inc., the Illinois and Seattle based apparel retailer,
has retained Keen Realty, LLC to act as its special real estate
consultant with regard to the restructuring of its real estate
portfolio.

Keen will assist the company in the disposition of certain real
estate assets, including the marketing of 63 retail locations
and one state of the art call center. The locations include
Eddie Bauer(R) and Eddie Bauer Home(R) retail stores, as well as
outlet stores doing business as Spiegel(R) Ultimate Outlet(R),
Newport News(R), and Eddie Bauer Outlet(R). Keen Realty is a
real estate firm specializing in restructuring retail real
estate and lease portfolios and selling excess assets. Spiegel
filed for Chapter 11 bankruptcy court protection on March 17,
2003.

"These locations represent an excellent opportunity for a
retailer looking to expand" said Craig Fox, Keen Realty's Vice
President. "The available Eddie Bauer(R) stores are located in
some outstanding retail locations in premier malls and street
locations, and the outlet stores of Spiegel(R) Ultimate
Outlet(R), Newport News(R), and Eddie Bauer(R) are located in
some excellent outlet centers. We are encouraging prospective
purchasers to put in their bids immediately so that all credible
offers can be considered."

Available to users are Eddie Bauer(R), Eddie Bauer Home(R), and
Eddie Bauer Outlet(R) properties located in 24 states. The
stores range in size from 5,000 square feet to 23,300 square
feet. The Spiegel(R) Ultimate Outlet(R) leaseholds are located
in 11 states and range in size from 22,000 square feet to 70,500
square feet. There is one Newport News(R) location available in
Virginia Beach, VA, which is 5,000 square feet. Additionally, a
65,000 sq. ft. state of the art call center is available in
Bothell, WA.

For over 20 years, Keen Consultants, LLC has had extensive
experience solving complex problems and evaluating and selling
real estate, leases and businesses in bankruptcies, workouts and
restructurings. Keen Consultants, a leader in identifying
strategic investors and partners for businesses, has advised
hundreds of clients nationwide, evaluated and disposed of over
200 million square feet of properties, and repositioned nearly
12,000 stores across the country.

Retail companies that the firm has advised include: Warnaco,
Tommy Hilfiger Retail, Rodier Paris, Country Road Clothing,
Sweet Factory, Northern Reflections, Edison Bros., Cosmetic
Center, Troutman's Emporium, Charles Jourdan, Mattress
Discounters, and Travel 2000. Most recently, Keen negotiated
lease terminations for 33 Tommy Hilfiger Retail locations;
negotiated with 70+ landlords for Northern Reflections,
terminating all 297 leased locations in 5 months; negotiated the
termination of Arthur Andersen, LLP's office leases nationwide,
comprising $685,000,000 of liability; negotiated rent reduction
on 30 properties in 3 weeks for Travel 2000; analyzed, marketed
and disposed of numerous retail sites operating as Speedo, Olga-
Warner, and Calvin Klein Jeans Outlet stores for Warnaco; and
provided real estate consulting and valuation services for
Troutman's Emporium DIP with respect to the disposition of 33
retail locations in Washington, Oregon, Idaho, California, and
Nevada. In addition to Spiegel, Inc., other current clients
include American Candy, Big V, Cooker Restaurants, Footstar,
Garden Ridge, Meadowcraft, and Cumberland Farms.

For more information regarding the sale of the Eddie Bauer,
Ultimate Outlet, and Newport News locations, please contact Keen
Realty, LLC, 60 Cutter Mill Road, Suite 407, Great Neck, NY
11021, Telephone: 516-482-2700 x 228, Fax: 516-482-5764, e-mail:
cfox@keenconsultants.com, Attn: Craig Fox.


SAIRGROUP FINANCE: Commences Initial Distribution Under Plan
------------------------------------------------------------
Please take notice that on April  8, 2003, the United States
Bankruptcy Court for the Southern District of New York entered
an order confirming the Second Amended Plan of Liquidation for
SAIRGROUP FINANCE (USA), INC.

Please take further notice that commencing on Friday May 2, 2003
the Company intends to make an initial pro rata distribution, as
provided in the Plan, to its  creditors, including all holders
of those certain US$350,000,000 7.50 percent  Guaranteed Notes
Due 2004 issued by the Company.

Please take further notice that the Company has declared that
the Plan will become effective as of the Distribution Date.

Please take further notice that the Company has retained The
Bank of  New York, London to act as distribution agent to
facilitate the distribution of funds by the Company.

Please take further notice that the Distribution will be made
electronically to each account holder who holds one or more
Notes through Euroclear Bank S.A./N.V. as operator of the
Euroclear System and/or Clearstream Banking, societe anonyme
(together, the "Clearing Systems") on the Distribution Date for
onward distribution to the beneficial owners of such notes.

Please take further notice that in order for holders of the
Notes in certificated bearer form to receive the Distribution,
each such holder must either deposit the Notes it holds with the
Clearing Systems prior to the Distribution Date or present the
Notes to the Distribution Agent within one hundred and twenty
(120) days of the Distribution Date.  HOLDERS OF NOTES WHO FAIL
TO COMPLY WITH THESE REQUIREMENTS WILL FORFEIT THEIR RIGHT TO
RECEIVE THIS DISTRIBUTION.

For further information regarding the Distribution, please
contact the Distribution Agent:

               The Bank of New York
               One Canada Square
               London E14 5AL
               Tel:  44 20 7964 6047
               Fax:  44 20 7964 6061
               Attention:  Sunjeeve Patel


SALON MEDIA: Sells Convertible Notes and Warrants for $200K
-----------------------------------------------------------
On April 29, 2003, Salon Media Group, Inc. sold and issued two
(2) convertible promissory notes and warrants in a financing
transaction in which it raised gross proceeds of approximately
$200,000. The terms of the transactions are set forth in the
Note and Warrant Purchase Agreement entered into between the
Company and Ironstone Group, Inc. and John Warnock, the
investors. Each Note may be convertible at a future date into
equity securities of the Company at a conversion price to be
determined. The warrants grant the holders the right to purchase
an aggregate of approximately 600,000 shares of the Company's
common stock at an exercise price of $0.0575 per share. The
Company will use the capital raised for working capital and
other general corporate purposes.

Each Note automatically converts upon the first closing of the
Company's proposed Series D Preferred Stock securities proposed
to be issued and, if no such Financing shall have occurred by
the close of business on September 30, 2003, then each Note
shall automatically convert into shares of the Company's common
stock. In the event of an automatic conversion of any Note upon
a Financing, the number of shares of preferred or common stock
to be issued upon conversion of this and other notes shall equal
the aggregate amount of the Note obligation divided by the price
per share of the securities issued and sold in the Financing. In
the event of an automatic Note conversion into common stock
absent a Financing, the number of shares of the common stock to
be issued upon conversion of Notes shall equal the aggregate
amount of each Note obligations divided by the average closing
price of the Company's common stock over the sixty (60) trading
days ending on September 30, 2003, as reported on such market(s)
and/or exchange(s) where the common stock has traded during such
sixty trading days.

In connection with the Financing, the Company granted the
Investors security interests in the Company's assets, subject to
the rights of any Senior Indebtedness (as such term is defined
in the Agreement) and pre-existing rights.

Neither the Notes, warrants, nor the shares of common stock
underlying the warrants have been registered for sale under the
Securities Act of 1933, as amended, and may not be offered or
sold in the United States absent registration under such Act or
an applicable exemption from registration requirements.

                           *    *    *

               Liquidity and Going Concern Uncertainty

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

"As of December 31, 2002, Salon had $0.2 million in available
cash remaining from the issuance of a convertible redeemable
note issued in December 2002. Salon also had $0.5 million of
restricted cash held primarily as deposits for various lease
arrangements and $0.5 million of restricted cash from a deposit
against a future transaction from a stockholder who is also a
director of Salon.

"Net cash used in operations was $2.8 million for the nine
months ended December 31, 2002, compared to $4.0 million for the
nine months ended December 31, 2001. The principal use of cash
during the nine months ended December 31, 2002 was to fund the
$4.3 million net loss for the period and $0.5 million to
restrict the cash deposit received from a stockholder, offset
partly by non-cash charges of $1.5 million. The principal use of
cash during the nine months ended December 31, 2001 was to fund
the $6.6 million net loss for the period and a $0.7 million
decrease in liabilities, offset partly by non-cash charges of
$2.8 million and $0.5 million in deferred revenue, primarily
from the implementation of Salon Premium subscriptions in April
2001.

"No cash was used in investing activities for the nine months
ended December 31, 2002, compared to an immaterial amount for
the nine months ended December 31, 2001. Salon does not expect
any significant capital expenditures during the current fiscal
year.

"Net cash provided from financing activities was $1.4 million
for the nine months ended December 31, 2002, compared to $3.1
million for the nine months ended December 31, 2001. The
principal source of funds for the nine months ended December 31,
2002 was $0.9 million from the issuance of convertible
redeemable notes, $0.2 million from the issuance of a promissory
note, a $0.5 million deposit against a future transaction from a
stockholder, partly offset by $0.2 million of lease payments.
The principal source of funds for the nine months ended December
31, 2001 was $3.2 million from the issuance of Series A
convertible preferred stock, partly offset by $0.1 million of
lease payments.

"As of December 31, 2002, Salon's available cash resources were
sufficient to meet working capital needs for approximately one
month. Subsequent to December 31, 2002, Salon finalized an
agreement with a stockholder who had made a $0.5 million deposit
against a future transaction with Salon. Under the terms of the
agreement, $0.1 million was made available for general operating
use and $0.4 million was transferred to a segregated account. On
February 11, 2003 Salon finalized an additional agreement with
another investor and received $0.1 million. Effective January
22, 2002, Salon began to restrict access to predominately all of
Salon's content to either Salon Premium subscribers or to
website visitors who are willing to view some form of
advertisement. The additional restriction to Salon content is
anticipated to increase Salon Premium subscriptions with a
corresponding increase in cash receipts from the new
subscriptions. Since this is a substantial change of Salon's
business strategy, Salon cannot predict how much and when new
cash will be generated from the change. Salon believes with the
cash on hand on December 31, 2002, $0.2 million from the above
mentioned agreements, incremental new cash to be generated from
the restriction of Salon's content, together with collections of
accounts receivable, that it will be difficult to meet working
capital needs during February 2003.

"Salon needs to raise additional funds and is currently in the
process of exploring financing options. If it is unable to
complete the financial transactions it is pursuing or if it is
unable to otherwise fund its liquidity needs, then it may not be
able to continue as a going concern. Liquidity continues to be a
constraint on business operations, including Salon's ability
to react to competitive pressures or to take advantage of
unanticipated opportunities. If Salon raises additional funds by
selling equity securities, or instruments that convert into
equity securities, the percentage ownership of Salon's current
stockholders will be reduced and its stockholders will most
likely experience additional dilution. Given Salon's recent low
stock price, any dilution will likely be very substantial for
existing stockholders.

"Salon is contemplating selling its prepaid advertising rights
valued at $5.6 million as of December 31, 2002. It is possible
that the rights might be sold for $1 million to $3 million in
cash, which would result in recording a loss of $2.6 million to
$4.6 million. Salon cannot predict when and if such a sale will
occur.

"Salon has a ten-year operating lease for office space at its
San Francisco location with approximately seven years remaining.
Salon is attempting to reduce this commitment and has suspended
applicable lease payments effective December 2002. On January
29, 2003 Salon received a demand letter for $0.2 million from
the landlord. Payment of this demand would have a great adverse
effect on Salon's current financial position. To a lesser
extent, Salon has an operating lease for office space in New
York, NY with approximately two years remaining. Salon is
currently negotiating with the landlord to reduce this
commitment.

"Salon's independent accountants have included a paragraph in
their report for the fiscal years ending March 31, 2002 and 2001
indicating that substantial doubt exists as to Salon's ability
to continue as a going concern because it has recurring
operating losses and negative cash flows, and an accumulated
deficit. Salon has eliminated various positions, not filled
positions opened by attrition, implemented a wage reduction of
15% effective April 1, 2001, and has cut discretionary spending
to minimal amounts."


SALTON INC: S&P Places BB- Corp. Credit Rating on Watch Negative
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Salton
Inc., including the company's 'BB-' corporate credit rating, on
CreditWatch with negative implications.

"The CreditWatch placement reflects weaker than expected profits
for the 12 months ended March 31, 2003, as a result of price
erosion and unit declines across many of the company's brands,"
said Standard & Poor's credit analyst Martin Kounitz. "This
erosion has mitigated the strength of the company's geographic
diversification in North America and Europe."

The profitability of Salton's George Foreman brand grills, which
represent about 40% of sales, has declined as consumers shift to
lower priced products. At the same time, Salton has been forced
to spend more on advertising to maintain unit volume. In
addition, price competition has intensified on the company's
lines of coffee makers, toasters and other small appliances. A
mitigating factor is that Salton recently improved its liquidity
by refinancing its bank debt, extending the maturity to 2007 at
somewhat more favorable interest rates than those of the
previous bank debt.

Standard & Poor's will meet with management to discuss its
business and financial plan in the current challenging retail
environment.


SBA COMMS: First-Quarter 2003 Results Show Improved Liquidity
-------------------------------------------------------------
SBA Communications Corporation (Nasdaq: SBAC) reported results
for the first quarter ended March 31, 2003. Highlights of the
results include:

* Record leasing revenue and leasing gross profit

* Same tower revenue growth of 15%

* Leasing gross profit margin improved 170 basis points
  sequentially

* Leasing gross profit was 92.5% of total gross profit

* Pro forma liquidity of $136 million after tower sale and
  senior credit facility refinancing

                         Operating Results

Total revenues were $58.2 million, compared to $63.9 million in
the year earlier period. Site leasing revenues of $37.5 million
were up 15.4% from the year earlier period, the highest ever for
SBA. Site development revenues were $20.7 million compared to
$31.4 million in the year earlier period. Site leasing
contributed 92.5% of the Company's gross profit in the quarter
reflecting the continuing transition of the Company's revenue
stream to its leasing business. Site leasing gross profit margin
was 65.5%, a 170 basis point improvement over the fourth quarter
of 2002. Selling, general and administrative expenses before
non-cash compensation were $8.2 million, and included
approximately $.8 million of professional and advisory fees
related to SBA's review of its strategic alternatives and
decision to sell a portion of its tower portfolio. Excluding
such fees, SG&A expenses of $7.4 million were 8% lower
sequentially and 15% lower than the year earlier period. Net
loss, which included a $.5 million charge for the cumulative
effect of a change in accounting principle for the adoption of
SFAS 143 "Accounting for Asset Retirement Obligations," improved
to $33.8 million in the first quarter of 2003 from a net loss of
$163.8 million in the year earlier period. The period ended
March 31, 2002 included a charge of ($80.6) million, or ($1.64)
per share, for the cumulative effect of a change in accounting
principle for the adoption of SFAS 142 "Goodwill and Other
Intangible Assets." Net loss per share improved to ($.66) from
($3.34) in the year earlier period. Net cash used in operating
activities for the first quarter of 2003 was $4.8 million,
compared to $33.4 million in the year earlier period. Adjusted
EBITDA was $19.2 million, compared to $19.3 million in the year
earlier period and fourth quarter of 2002. Adjusted EBITDA
margin improved to 32.9%, a 270 basis point improvement over the
fourth quarter of 2002.

Same tower revenue and gross profit growth on the 3,797 towers
owned as of March 31, 2002 was 15% and 16%, respectively.

                    Investing Activities

SBA built 3 towers and disposed of 4 towers, ending the quarter
with 3,876 towers. Capital expenditures for the first quarter
were $6.1 million, down from $29.6 million in the year earlier
period. On May 9, 2003 SBA transferred its interests in 631
towers to AAT Communications Corp. in exchange for approximately
$145 million of gross cash proceeds. Interests in an additional
48 towers are expected to be transferred to AAT on or before
July 1, 2003 in exchange for gross proceeds of approximately $15
million, resulting in a pro forma tower count of 3,197 towers.

                    Financing Activities

SBA borrowed no additional funds in the first quarter of 2003,
and ended the quarter with $255 million borrowed under its $300
million senior credit facility, $769 million of senior notes
outstanding and net debt of $976.2 million. On May 9, 2003, SBA
refinanced its senior credit facility with the proceeds of a new
$195 million senior credit facility, cash on hand and a portion
of the proceeds from the tower sale. On a pro forma basis giving
effect to the sale of 679 towers for gross proceeds of $160
million and refinancing of the senior credit facility, as of
March 31, 2003 SBA had net debt of $828 million and liquidity of
$136 million, consisting entirely of cash and restricted cash.

"We have had a number of positive recent developments at SBA,"
commented Jeffrey A. Stoops, President and Chief Executive
Officer. "Operationally, our tower ownership business continues
to perform well. In the first quarter, we experienced solid
revenue and even stronger tower cash flow growth on a sequential
basis from our leasing business. Carrier demand for our tower
space remains solid, and at this time we believe activity levels
through 2003 will be as good or better than we experienced in
the second half of 2002. That growth, combined with a reduction
in our services business, has accelerated our transition to a
point where now substantially all of our gross profit is
generated from our tower ownership business. As a result, both
the predictability and recurring nature of our gross profit and
EBITDA have significantly improved over the year earlier period.
Based on that predictability, the proceeds from our tower sale
and our new credit facility, we believe we now have in place
sufficient liquidity and a stable long-term capital structure
that will support, and be supported by, our expected growth in
our tower cash flows. Looking forward, we are very excited
about, and confident in attaining, our goals of increasing tower
cash flow and EBITDA, reducing leverage and attaining positive
free cash flow."

                           Outlook

The Company has provided its Second Quarter 2003 and Full Year
2003 Outlook. This outlook is based on current expectations and
assumptions and assumes the sale of all 679 towers to AAT
Communications in the second quarter 2003 which will be
reflected as discontinued operations in the second quarter and
for the full year. Information regarding potential risks which
could cause the actual results to differ from these forward-
looking statements are set forth below and in the Company's
filings with the Securities and Exchange Commission.

SBA is a leading independent owner and operator of wireless
communications infrastructure in the United States. SBA
generates revenue from two primary businesses -- site leasing
and site development services. The primary focus of the Company
is the leasing of antenna space on its multi-tenant towers to a
variety of wireless service providers under long-term lease
contracts. Since it was founded in 1989, SBA has participated in
the development of over 20,000 antenna sites in the United
States.

At March 31, 2003, the Company's balance sheet shows that its
total current liabilities outweighed its total current assets by
close to $30 million.

SBA Communications' 12% bonds due 2008 (SBAC08USR1) are trading
at about 79 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=SBAC08USR1
for real-time bond pricing.


SINCLAIR BROADCAST: S&P Rates $100 Mil. Senior Sub. Notes at B
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating to
Sinclair Broadcast Group Inc.'s proposed offering of $100
million senior subordinated notes. The notes will be issued
under Rule 144A as an add-on to the existing 8.0% senior
subordinated note issue due 2012.

At the same time, Standard & Poor's assigned its 'B' rating to
the company's proposed $100 million convertible senior
subordinated notes due 2018. Proceeds are expected to be used to
refinance existing debt. Standard & Poor's also affirmed its
'BB-' long-term corporate credit rating on the television
station owner. The outlook is negative. Hunt Valley, Maryland-
based Sinclair had total debt outstanding of approximately $1.5
billion on March 31, 2003.

"The rationale for the proposed transaction is to lower the
company's interest expense and extend debt maturities, without
materially increasing debt levels," said Standard & Poor's
credit analyst Alyse Michaelson.

Financial performance towards the end of the 2003 first quarter
was disrupted by the onset of war in Iraq, which resulted in
advertiser cancellations and preemptions, primarily from the
auto sector. Minimal revenue growth and modest declines in
broadcast cash flow had been expected in 2003 due to: the
volatile economy; escalating geopolitical tensions; and
increased promotion, programming, and news expenses.
Intermediate-term revenue and earnings visibility remains
limited due to the soft economic outlook. TV operators will not
have the benefit of political spending in 2003, which
contributed to 2002 results. In addition, Sinclair's mostly
lower-ranked stations could be harder hit by any recurring
advertising weakness in light of the very competitive
environment.

Sinclair has generated positive discretionary cash flow, even
after relatively heavy capital spending for digital TV
conversion, which is almost complete. However, discretionary
cash flow is expected to be limited in 2003 by election cycles
and rising operating expenses, despite the company's reduced
capital expenditures. Signs of advertising stability in 2003,
and building the covenant cushion by improving cash flow and
repaying debt, will be important in any consideration of an
outlook revision to stable.


STARWOOD HOTELS: Fitch Rates $300MM Convertible Sr. Notes at BB+
----------------------------------------------------------------
Fitch Ratings has assigned a rating of 'BB+' to the $300 million
in 3.5% convertible senior notes (potentially as much as $360
million including an overallotment option) due 2023 issued by
Starwood Hotels & Resorts Worldwide, Inc.

Proceeds are to be used to repay a portion of outstanding
balances under the revolving credit facility and for general
corporate purposes. The notes will rank pari-passu with all
other senior debt including bank facilities. The notes are not
redeemable prior to May 23, 2006, but may be put to the company
on May 16 of 2006, 2008, 2013 and 2018. The Rating Outlook is
Negative.

The 'BB+' rating reflects the company's standing as one of the
premier global lodging companies, with substantial product and
geographic diversification, strong cash flow generating ability,
and continued access to capital markets. Nonetheless, like its
peers, Starwood has faced persistent industry weakness in
revenue per available room, with little visibility for
improvement in the near term. While debt has been reduced since
year-end 2001, leverage is high for the ratings category, and
continues to climb as EBITDA deterioration has outpaced debt
reduction. However, potential asset sales, forecast by the
company at $1.1 billion in 2003, could accelerate debt reduction
in 2003 and keep credit measures stable.

The Rating Outlook remains Negative due to the weak lodging
fundamentals. Fitch believes the challenging operating
environment will continue through most of 2003 due to continued
weakness in global economies and the overall travel environment.
Other headwinds include higher insurance and health care costs,
potential increases in real estate taxes from strapped state
governments, the adverse effect on pricing due to information
availability on the Internet, and increasingly short booking
period that complicates effective pricing. However, over the
intermediate term, Fitch believes the company is positioned for
a strong rebound in financial results upon any improvement in
the economy given the operating leverage inherent in Starwood's
high proportion of owned hotels, its business traveler focus, as
well as the very slow rate of new room supply in the industry.

Total debt at March 31, 2003 was $5.5 billion, up $186 million
from FYE 2002 due mainly to the January dividend payment of $170
million. Leverage (debt/EBITDA) increased to 5.4 times from 4.9x
at FYE 2002. Interest coverage weakened to 2.9x for the LTM
ended March 31, 2003, from 3.1x for the LTM ended March 31,
2002. The company has signed agreements to sell $617 million (at
March 31, 2003 exchange rates) of CIGA assets, and is expected
to close on an additional $400 - $500 million in US assets (18
hotels, 5,500 rooms) in the second half of 2003. Internally
generated free cash flow will be limited in 2003, therefore
credit ratios will likely be supported from the proceeds of
these asset sales in 2003 which could reduce debt by as much as
$1.1 billion while reducing EBITDA by roughly $100 million.

Liquidity at March 31, 2003 was adequate, with cash of $304
million (including $146 million restricted cash) and unused
domestic and international bank capacity of roughly $500
million. Average debt maturities are 5.8 years. Maturities in
2003 include the December maturity of a 450 million euro-
denominated bank loan and the November maturity of $250 million
in bonds. As of March 31, 2003, the company was granted a waiver
of the leverage covenant under its revolving credit facility.
Existing covenants include a maximum leverage ratio of 5.25x
currently, which tightens to 5.0x at Sept. 30, 2003, and 4.75x
at March 31, 2004. Fitch expects that further waivers and/or
amendments will be necessary.

For 2003, management provided unofficial guidance which projects
a 1.0% - 2.0% decline in RevPAR at North American hotels,
consistent with industry expectations. However, this scenario
implies a modest second half recovery that may not materialize.
Management's guidance would imply EBITDA in the range of $930 -
$950 million versus 2002 EBITDA of $1.075 billion. At this
level, Starwood could generate free cash flow of roughly $125
million (after capex of $450 million), which management intends
to use for debt reduction. Fitch expects free cash flow to be in
a range of flat to $100 million. If the company moves into a
negative free cash flow position due to a further deterioration
in travel fundamentals, Fitch could revisit the rating for a
possible downgrade.

Excluding managed and franchised properties, revenues were $883
million, roughly flat with last year. RevPAR at worldwide same
store owned hotels decreased 1.7%, primarily due to lower
average daily rates (ADR) which fell 1.1% to $147.60. RevPAR at
North American same store hotels declined 3.0%. Company EBITDA
declined 16.9% to $186 million, as insurance, energy, and real
estate taxes increased in 2003. Total company EBITDA margin was
down 420 bps to 21.1%. North American same-store owned hotel
margin was down 470 bps to 22%.


TENNECO AUTOMOTIVE: Shareholders Re-Elect Incumbent Board
---------------------------------------------------------
Tenneco Automotive (NYSE: TEN) announced at its annual meeting
Tuesday that the company's stockholders re-elected Charles W.
Cramb, M. Kathryn Eickhoff, Mark P. Frissora, Frank E. Macher,
Sir David Plastow, Roger B. Porter, David B. Price, Jr., Dennis
G. Severance and Paul T. Stecko to the company's board of
directors.  The directors have been re-elected to serve for a
term expiring at the 2004 annual meeting of stockholders.

Stockholders also ratified the appointment of Deloitte & Touche
LLP as independent public accountants for 2003; and approved
amendments to the Tenneco Automotive Inc. 2002 Long-Term
Incentive Plan to increase the shares of the company's common
stock available for delivery under the plan.

Tenneco Automotive, whose December 31, 2002 balance sheet shows
a total shareholders' equity deficit of about $94 million, is a
$3.5 billion manufacturing company headquartered in Lake Forest,
Ill., with 19,600 employees worldwide.  Tenneco Automotive is
one of the world's largest producers and marketers of ride
control and exhaust systems and products, which are sold under
the Monroe(R) and Walker(R) global brand names.  Among its
products are Sensa-Trac(R) and Monroe(R) Reflex(TM) shocks and
struts, Rancho(R) shock absorbers, Walker(R) Quiet-Flow(TM)
mufflers and Dynomax(TM) performance exhaust products, and
Monroe(R) Clevite(TM) vibration control components.


U.S. STEEL: Prices $450 Million 9-3/4% Senior Notes Due 2010
------------------------------------------------------------
United States Steel Corporation (NYSE: X) has priced its $450
million issue of senior notes due May 15, 2010. The senior notes
have a coupon interest rate of 9-3/4% per annum payable semi-
annually on May 15 and November 15 commencing November 15, 2003.
The Notes are being issued under U. S. Steel's shelf
registration statement and will not be listed on any national
securities exchange. Proceeds from the sale of the notes will be
used to finance a portion of the purchase price for the
acquisition of substantially all of the integrated steelmaking
assets of National Steel Corporation.

The notes will be sold through underwriters led by joint book-
runners JP Morgan Securities Inc. and Goldman, Sachs & Co., and
include Lehman Brothers, Scotia Capital, BNY Capital Markets,
Inc., NatCity Investments, Inc., PNC Capital Markets, Inc. and
The Royal Bank of Scotland.

As reported in Troubled Company Reporter's May 9, 2003 edition,
Standard & Poor's Ratings Services lowered its corporate credit
rating on integrated steel producer United States Steel Corp. to
'BB-' from 'BB' based on concerns about the firm's increased
financial risk.

Standard & Poor's said that it has removed its ratings on
Pittsburgh, Pennsylvania-based United States Steel from
CreditWatch, where they were placed with negative implications
on Jan. 9, 2003. The current outlook is negative. The company
had about $1.7 billion in lease-adjusted debt at March 31, 2003.

At the same time, Standard & Poor's said it has assigned its
'BB-' rating to United States Steel Corp.'s proposed $350
million senior notes due 2010.


V-ONE CORP: March 31 Balance Sheet Upside-Down by $2 Million
------------------------------------------------------------
V-ONE Corporation (OTBB:VONEE) announced results of operations
for the three months ended March 31, 2003.

Revenue for the first quarter was $1,005,000, an increase of
18.0%, compared with $852,000 for the first quarter of 2002.

Delays in Congressional approval of the government budget slowed
implementation of the Company's programs. Revenue for certain of
these programs began again in the first quarter of 2003 and the
government program offices have advised the Company that they
expect to initiate order flow during the quarter ending June 30,
2003 for the planned expansion of these information sharing law
enforcement networks.

Operating expenses dropped in the first quarter of 2003 by
approximately $1,530,000 or 56.5%, from the first quarter of
fiscal 2002, reflecting continuing cost control activities. The
operating loss for the first quarter of 2003 was $216 thousand,
a decrease of 89% compared with the operating loss for the first
quarter of 2002 of $2.0 million.

The loss attributable to holders of common stock for the first
quarter of 2003 was $523 thousand or $(0.02) per basic and
diluted share, based on the weighted average number of common
shares outstanding of approximately 26.7 million.

The loss attributable to holders of common stock for the first
quarter of 2002 was $2.2 million, or $(0.09) per basic and
diluted share, based on the weighted average number of common
shares of approximately 24.0 million.

At March 31, 2003, the Company had $134,000 in cash and cash
equivalents and $1,959,000 in stockholders' equity deficit.

"V-ONE's focused turnaround strategy can be measured by the
results of operations over the past five quarters. The
commitment of V-ONE to our customers and our shareholders,
responsiveness, innovative product features and the drive to
succeed made it possible to accomplish what has been done so
far," said Margaret Grayson, President and CEO of V-ONE
Corporation.

The release of SmartGate 4.4 during the first quarter of 2003
incorporates ten years of innovative security technology
development into the product that meets today's complex needs.
The V-ONE suite of security products now include important
capabilities designed to allow independent organizations within
the federal, state and local law enforcement communities to
share information, securely.

Requirements that access to these unique networks remain under
the control of the owner of the information created a security
design challenge for our customers and V-ONE's security products
provide their solution.

"An important element of the Company's strategy is recognition
of the requirement for continued product development," said Ms.
Grayson. "V-ONE's highly skilled development engineers all have
several years of experience in their respective area of code
development and create design enhancements that are specific to
meet customer needs as these secure networks evolve. V-ONE sales
engineers are asked by our customers to provide network design
and troubleshooting to ensure secure connectivity of these
independent networks. This capability strengthens the customer
relationship and provides a natural growth path for V-ONE, as
increasingly more sophisticated IT environments emerge."

"The government today is a leader in the design and
implementation of secure, complex distributed networks. What we
have learned about the V-ONE product suite is that design
features required to meet the needs of our government customers
are also needed by our commercial customers," said Doug Hurt,
Vice President of Sales and Marketing for V-ONE. "Revenue for
the first quarter was approximately 55% government and 45%
commercial & international. This shows increasing interest from
the commercial market sector, which was approximately 33% last
year."

As V-ONE continues to work to achieve its goal of operating
profitability, the Company continues to face financial hurtles
to meet its ongoing cash requirements. The cost to complete the
Company's annual audit is approximately $100,000.

The Company's cash position during the fourth quarter of 2002
and the first quarter of 2003 was not sufficient to prepay these
fees in addition to meeting operational expenses for development
and equipment purchases required to deliver products to the
Company's customers. The Company decided to meet its customer's
requirements first, believing that it is in the best interest of
its shareholders to do so.

This decision resulted in a delay in completing the 2002 year-
end audit and the auditor review of results of operations for
the first quarter of 2003. The Company's shares, traded on the
OTC Bulletin Board, were assigned an "E" status and removed from
active listing until such time as the Company demonstrates
compliance with the OTC Bulletin Board listing regulations.

It is the Company's intention to complete the 2002 year-end
audit and quarterly review and return to compliant status as
soon as is reasonably possible.

"We are optimistic about our progress, our customers and the
improved mix of government and commercial revenue. We will
remain ever vigilant as we move forward," said Ms. Grayson.

V-ONE will not be hosting a quarterly conference call to discuss
these quarterly results due to the proximity of the Annual
Meeting of Shareholders to be held on June 5, 2003.

Providing enterprise-level network security protection since
1993, V-ONE Corporation's flagship product is SmartGate(TM) VPN,
a client/server Virtual Private Network technology. Fortune 1000
corporations, health care organizations and sensitive government
agencies worldwide use SmartGate for their integrated
authentication, encryption and access control.

With its patented client deployment and management capabilities,
SmartGate is a compelling solution for remote access intranets
and secure extranets for electronic business between trading
partners, for both conventional and wireless networks. V-ONE is
headquartered in Germantown, MD.

Product and network security information, white papers and the
Company's latest news releases may be accessed via V-ONE's World
Wide Web site at http://www.v-one.com


VENTAS: Selling Fl. & Tex. Skilled Nursing Facilities to Kindred
----------------------------------------------------------------
Ventas, Inc. (NYSE:VTR) has reached an agreement to sell all of
its skilled nursing facilities in Florida and Texas to its
primary tenant, Kindred Healthcare, Inc. (Nasdaq:KIND), which
currently leases those 16 facilities from Ventas.

Florida and Texas are two states where professional liability
expenses for skilled nursing providers have escalated
significantly during the last few years. Kindred has stated that
it intends to divest operations of its skilled nursing
facilities in those states expeditiously after closing.

The purchase price for the 15 properties in Florida and one in
Texas is $59.7 million. In addition, Kindred will pay Ventas a
$4.1 million lease termination fee. The cash rent for these 16
facilities, which contain 2,370 beds, is currently $9.0 million
per year (May 1, 2003-April 30, 2004).

Under a separate agreement, Ventas and Kindred also agreed to
amend the Master Leases between the two companies to increase
rent on certain facilities under the Master Leases by $8.6
million per year on an annualized basis (May 1, 2003-April 30,
2004), for approximately seven years. This amount will escalate
3.5% annually in accordance with the Master Leases. In addition,
the Master Leases will be amended to: (1) provide that all
annual escalators under the Master Leases will be in cash at all
times and (2) expand certain cooperation and information sharing
provisions of the Master Leases.

"These agreements reflect a win-win outcome for Ventas and
Kindred. We have worked cooperatively with Kindred's management
to help Kindred exit the Florida skilled nursing home market in
a manner that benefits both companies and is consistent with our
Master Leases," Ventas Chairman, CEO and President Debra A.
Cafaro said. "We look forward to building on this joint success
in other areas of importance to the companies."

The combined transactions are expected to be accretive to
Ventas's Funds From Operations in 2003. As a result of the sale,
Ventas will record a book loss of approximately $5.5 million in
its 2003 earnings. The loss will be excluded from FFO, in
accordance with the NAREIT definition of FFO.

The transactions are expected to close late in the second
quarter, subject to approval by Kindred's senior lenders and
other closing conditions. There can be no assurance that the
announced transactions will close or, if so, when they will
close.

"Both companies should benefit from these agreements," Cafaro
said. "By eliminating its Florida and Texas losses, Kindred's
earnings and credit profile should improve significantly. Ventas
will benefit by receiving immediate proceeds to fund our
strategic diversification plan and/or strengthen our balance
sheet and by divesting all of our Florida and Texas skilled
nursing facilities," Cafaro said.

Ventas also owns six long term acute care (LTAC) hospitals in
Texas and six LTAC hospitals in Florida, all of which will
continue to be operated by Kindred.

                    EXPECTED RENT COVERAGES

In its first quarter earnings report issued on May 14, 2003,
Kindred announced higher than expected professional liability
expenses related to certain of its skilled nursing centers.
Ventas said that Kindred's EBITDAR:rent coverage on its Kindred
portfolio is expected to be between 1.5 and 1.6 times on a run
rate basis after Kindred divests operations of the Florida and
Texas skilled nursing facilities, and after taking into account
Kindred's increased professional liability expenses in 2003 and
the Medicare cuts for nursing homes that went into effect last
October. There are many assumptions underlying this expected
coverage, many of which are outside the control of both Kindred
and Ventas management. Accordingly, actual coverages may vary
from these projections.

                  2003 AND 2004 FFO GUIDANCE

If the announced transactions close in the second quarter of
2003, Ventas said it expects its 2003 normalized FFO to increase
to between $1.48 and $1.50 per diluted share, up from the
previous guidance of $1.43-$1.45 per diluted share.

The Company also said it expects 2004 normalized FFO to be
between $1.55 and $1.57 per diluted share.

The Company's FFO guidance (and related GAAP earnings
projections) for 2003 and 2004 exclude gains and losses on the
sale of real estate assets, the non-cash effect of swap
ineffectiveness under SFAS 133 and the impact of acquisitions,
additional divestitures and other capital transactions.
Reconciliation of the FFO guidance to the Company's projected
GAAP earnings is provided on a schedule at the conclusion of
this press release. The Company may from time to time update its
publicly announced FFO guidance, but it is not obligated to do
so.

The Company's FFO guidance is based on a number of assumptions,
which are subject to change and many of which are outside the
control of the Company. If any of these assumptions vary, the
Company's results may change. There can be no assurance that the
Company will achieve these results.

Ventas, Inc., whose March 31, 2003 balance sheet shows a total
shareholders' equity deficit of about $43 million, is a
healthcare real estate investment trust that owns 44 hospitals,
220 nursing facilities and nine other healthcare and senior
housing facilities in 37 states. The Company also has
investments in 25 additional healthcare and senior housing
facilities. More information about Ventas can be found on its
Web site at http://www.ventasreit.com


WHEELING: 2nd Amended Disclosure Statement Hearing on Tuesday
-------------------------------------------------------------
The Court has scheduled a hearing to consider the adequacy of
the information in Wheeling-Pittsburgh Steel Corp., and its
debtor-affiliates' Second Amended Disclosure Statement in
support of the Second Amended Plan.  The hearing will convene in
Youngstown on May 20, 2003.  The latest Disclosure Statement
amendment incorporates the federally guaranteed exit financing
obtained by WPSC from Royal Bank of Canada. (Wheeling-Pittsburgh
Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


WORLDCOM INC: Wants Blessing to Reject 95 Verizon Service Orders
----------------------------------------------------------------
Worldcom Inc., and its debtor-affiliates purchase certain
telecommunications services pursuant to:

   (i) tariffs filed by incumbent and competitive local exchange
       carriers in accordance with the Telecommunications Act of
       1996; and

  (ii) various master service agreements among the Debtors and
       certain access providers.

Alfredo R. Perez, Esq., at Weil Gotshal & Manges LLP, in New
York, explains that tariffs are schedules of rates, terms, and
conditions by which the LECs agree to provide services to their
customers.  Tariff and MSA services are purchased by submitting
a contract known as an access service order to the LEC or
Provider. These services are purchased by entering into a
contract known as a service order.

Since the Petition Date, Mr. Perez states that WorldCom has
reviewed the operating capacity of its network.  This network
rationalization process is an ongoing, integral component of
WorldCom's long-range business plan.  WorldCom determined that
it does not require the capacity relating to 95 circuits
purchased through tariff service orders from Verizon or its
affiliates.  In determining to reject the Service Orders, the
Debtors considered, among other things, network overcapacity,
costs, overlap, and other inefficiencies, as well as their
ability to move traffic to alternative circuits in a more cost-
effective manner.

Accordingly, pursuant to Section 365(a) of the Bankruptcy Code
and Rules 6006 of the Federal Rules of Bankruptcy Procedure, the
Debtors seek the Court's authority to reject the Service Orders
associated with the Circuits.

Mr. Perez informs the Court that the Debtors currently have no
traffic on the Circuits purchased under the Service Orders,
under which they incur $67,967 in monthly charges.  Thus, the
Circuits provided under the Service Orders are unnecessary and
costly to the Debtors' estates.  By rejecting the Service
Orders, the Debtors save the estates administrative expense
totaling $815,610 per annum, or $1,191,530 for the remainder of
the terms of the Service Orders for capacity that the Debtors do
not need or use. For these reasons, in the Debtors' business
judgment, the Service Orders for the Circuits should be rejected
effective as of the disconnect date set forth in the disconnect
notice for each Circuit. (Worldcom Bankruptcy News, Issue No.
27; Bankruptcy Creditors' Service, Inc., 609/392-0900)


* Pilots' Union Leads Charge for Workers' Pension Law Reform
------------------------------------------------------------
The head of the nation's largest pilot union calls on Congress
to support special legislation to protect workers' pension
plans. Working with a coalition of airlines and all the major
AFL-CIO airline unions, ALPA provided Congress with a special
funding rule draft for airline employee defined benefit plans.

"As we discovered at US Airways, the very ERISA (Employee
Retirement Income Security Act) law dating to 1974, originally
designed to protect workers' pensions, has a perverse effect of
actually setting in motion in today's unusual economic
environment an arbitrary set of actions that almost certainly
would lead to the termination of many additional plans that the
law was designed to protect," said Capt. Duane Woerth, president
of the Air Line Pilots Association, International. "We are
focusing our legislation at the deficit reduction contributions,
which function like gigantic balloon payments that airlines
simply do not have the cash to pay."

The coalition of airlines and the airline unions are concerned
that under current regulations, the Pension Benefit Guaranty
Corporation might be forced to demand these extraordinary
balloon payments from virtually every airline that has a defined
benefit plan no later than very early next year. If an airline
fails to pay, the Treasury Department could put a lien on an
airline's assets, which would either force an airline into
bankruptcy or prevent the exit from bankruptcy without pension
plan terminations.

Founded in 1931, ALPA is the world's oldest and largest pilot
union, representing 66,000 pilots at 42 airlines in the U.S. and
Canada. Visit the ALPA Web site at http://www.alpa.org


* BOOK REVIEW: CHARLES F. KETTERING: A Biography
------------------------------------------------
Author:     Thomas Alvin Boyd
Publisher:  Beard Books
Softcover:  242 pages
List Price: $34.95
Review by Gail Owens Hoelscher

Order your personal copy today and one for a colleague at
http://www.amazon.com/exec/obidos/ASIN/1587981335/internetbankrupt

Charles Kettering was born on a farm in northern Ohio in 1876.
He once said, "I am enthusiastic about being an American because
I came from the hills in Ohio. I was a hillbilly. I didn't know
at that time that I was an underprivileged person because I had
to drive the cows through the frosty grass and stand in a nice
warm spot where a cow had lain to warm my (bare) feet. I thought
that was wonderful. I walked three miles to the high school in a
little village and I thought that was wonderful, too. I thought
of all that as opportunity. I didn't know you had to have money.
I didn't know you had to have all these luxuries that we want
everybody to have today."

Charles Kettering is the embodiment of the American success
story. He was a farmer, schoolteacher, mechanic, engineer,
scientist, inventor and social philosopher. He faced adversity
in the form of poor eyesight that plagued him all his life. He
was forced to drop out of college twice due to his vision before
completing his electrical engineering degree.

Kettering went on to become a leading researcher for the U.S.
automotive industry. His company, Dayton Engineering
Laboratories, Delco, was eventually sold to General Motors and
became the foundation for the General Motors Research
Corporation of which Kettering became vice president in 1920. He
is best remembered for his invention of the all-electric
starting, ignition and lighting system for automobiles, which
replaced the crank. It first appeared as standard equipment on
the 1912 Cadillac.

Kettering held more than 300 patents ranging from a portable
lighting system, Freon, and a World War I "aerial torpedo," to a
device for the treatment of venereal disease and an incubator
for premature infants. He conceived the ideas of Duco paint and
ethyl gasoline, pursued the development of diesel engines and
solar energy, and was a pioneer in the application of magnetism
to medical diagnostic techniques.

This book shows the wisdom and common sense of Kettering's
approach to engineering and life. It received favorable reviews
when was first published in 1957. The New York Times called it
an "old-fashioned narrative biography, written in clean,
straight-line prose-no nuances, no overtones, .but with enough
of Kettering's philosophy and aphorisms, his tang and humor, to
convey his personality." The New York Herald Tribune Book Review
said, "(t)his lively book is particularly successful in its
reflection of Kettering's restless, searching mind and tough
persistence."

Kettering once showed a passing tramp the "fun" of digging holes
properly and gave him a job. The man, then promoted to foreman,
later told Kettering, "(i)f only years ago someone had taught me
how much fun it is to work, when a fellow tries to do good work,
I would never have become the bum I was." Kettering once
advised, ".whenever a new idea is laid on the table it is pushed
at once into the wastebasket. (i)f your idea is right, get to
that wastebasket before the janitor. Dig your idea out and lay
it back on the table. Do that again and again and again. And
after you have persisted for three or four years, people will
say 'Why, it does begin to look as through there is something to
that after all.'"

Charles Kettering died on November 24, 1958.

Thomas Alvin Boyd was a chemical engineer and a member of
Charles Kettering's research staff for more than 30 years.

                          *********

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

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

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

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

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

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

                          *********

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

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

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.  Information
contained herein is obtained from sources believed to be
reliable, but is not guaranteed.

The TCR subscription rate is $675 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each.  For subscription information, contact Christopher
Beard at 240/629-3300.

                *** End of Transmission ***