TCR_Public/030526.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

               Monday, May 26, 2003, Vol. 7, No. 102

                           Headlines

360NETWORKS: Sues to Recover $1.5M of Pref. Transfers from ADC
ACTERNA CORP: Seeks Court Injunction Against Utility Companies
ALLEGHENY ENERGY: Appoints Regis F. Binder as Interim CFO
ALLEGIANCE TELECOM: Paying $4 Million of Critical Vendor Claims
AMERICAN COMMERCIAL: Committee Taps Dann Pecar as Co-Counsel

AMERICAN STONE: Liquidity Problems Raise Going Concern Doubts
AMERIPOL SYNPOL: Will Idle Equipment & Temporarily Lay-Off Staff
APPLIX: Will Commence Trading on Nasdaq SmallCap Market on Wed.
AQUILA: Signs Pact to Sell Its Interest in Midlands Electricity
ARMSTRONG: AWI Files Fourth Amended Plan & Disclosure Statement

BAM! ENTERTAINMENT: Has Until Nov. 17 to Meet Nasdaq Guidelines
BETHLEHEM STEEL: Delays in Filing March Quarter Fin'l Reports
BURLINGTON: Urges Court to Okay Lease Decision Time Extension
CARVER CORP.: Defaults Under Plan & Committee Moves to Convert
CBD MEDIA: S&P Assigns B+ Rating to Corp. Credit and $165M Loan

CELL-LOC INC: Completes Private Placement of 357,143 Units
CIENA CORP: Second Quarter Net Loss Stands at $75 Million
CLARK RETAIL: Taps NRC to Dispose of 630 Convenience Stores
COMMTOUCH SOFTWARE: Red Ink Continues to Flow in First Quarter
COMMTOUCH SOFTWARE: Closes $1.25 Million Financing Arrangement

CONOR PACIFIC: Initiating Steps to Reduce Outstanding Debts
CONSECO INC: TOPrS Panel Voices Plan Distribution Objection
CWMBS: Fitch Takes Various Rating Actions on 6 Securitizations
CYPRESS AVIATION: Files for Chapter 7 Liquidation in Florida
CYPRESS AVIATION: Voluntary Chapter 11 Case Summary

DAISYTEK: Canadian Unit Unaffected by Bankruptcy; Ops. Normal
DELOACH WINERY: Files for Chapter 11 Protection to Reorganize
DVI RECEIVABLES: Fitch Rates $11 Million Class E Notes at BB
DYNEGY INC: Fitch Revises Lower-B Ratings Outlook to Stable
EAGLE FOOD: Full-Year 2002 Net Loss Jumps Up to $18 Million

ENCOMPASS: Court Okays Sale of Louisville Operations to Reliable
ESTERLINE: S&P Rates Corporate Credit at BB Due to Weak Market
FIBERCORE INC: March 31 Working Capital Deficit Widens to $37MM
FINANCIAL BENEFIT: AM Best Affirms B+ Financial Strength Ratings
FLEMING: Wins Interim Approval to Preserve Net Operating Losses

GAP INC: First Quarter Earnings Results Reflect Strong Growth
GEORGIA-PACIFIC: Caps Price of $500 Mill. Senior Notes Offering
GILAT SATELLITE: Completed Debt Workout Enhances Balance Sheet
GLOBAL CROSSING: Court Approves Settlement Pact with Worldcom
GLOBAL CROSSING: Introduces Feature-Rich IP VPN Service(TM)

GRUPO IUSACELL: Secures Waiver of Defaults Under Credit Pact
HALSEY PHARMACEUTICALS: Jerry Karabelas Appointed Board Chairman
HAWK CORPORATION: Shareholders Re-Elect Board of Directors
HAYES LEMMERZ: Inks Pact to Sell $250 Mill. of Sr. Unsec. Notes
HQ GLOBAL: Court Grants Open-Ended Lease Decision Period

IASIS HEALTHCARE: S&P Rates Senior Subordinated Notes at CCC+
INTERDENT: Plan Filing Issues Stall March Quarter Fin'l Reports
IT GROUP: Mid Atlantic Demands Compliance of April 25 Sale Order
KINGSWAY FIN'L: Completes Second Private Placement of Preferreds
KMART CORP: Reports Senior Merchandising Executive Appointments

KOPPERS: With Improved Liquidity, S&P Says Outlook Now Stable
LEAP WIRELESS: Gabelli Asset Seeks Appointment of Equity Panel
MADGE NETWORKS: Holland Court OKs Bankruptcy Trustee Appointment
MASSEY ENERGY: Refinancing Concerns Spur S&P's Negative Outlook
METROMEDIA INT'L: Receives Notice from Sr. Discount Note Trustee

MIKOHN GAMING: Seidler Reports Initial "Buy" Investment Rating
MILLER INDUSTRIES: Potential Default Raises Going Concern Doubt
MILLER INDUSTRIES: Red Ink Flows in Q4 2002 and Full-Year 2002
NANTICOKE HOMES: UST Moves to Convert Case to Ch. 7 Liquidation
NORAMPAC INC: Closes Refinancing of Credit Facilities & Lines

NORTHERN LIGHT: Emerges from Divine Bankruptcy, Leaner & Intact
NORTHWEST AIRLINES: S&P Rates New 2003-1 Pass-Thru Notes at B-
NOVA CHEMICALS: Outlook Now Positive Due to Improved Liquidity
NRG ENERGY: Wants to Honor Prepetition Tax & Fee Obligations
OVERHILL FARMS: March 30 Working Capital Deficit Stands at $4MM

OWENS-BROCKWAY: $1.9-Billion Bank Facility Gets S&P's BB Rating
PARK PLACE ENTERTAINMENT: Promotes 2 Sr. Executives to EVP Posts
PEABODY ENERGY: Black Beauty Unit Inks New L-T Coal Supply Pacts
PENN TRAFFIC: Has Until Wed. to Appeal Nasdaq Delisting Decision
PERSONNEL GROUP: Annual Meeting Convening on June 18 in N.C.

PHYSICIANS HEALTH: A.M. Best Assigns Initial B FS Rating
JAMES G. PIERCE: Case Summary & 17 Largest Unsecured Creditors
PNC RMBS: Fitch Upgrades & Affirms Ratings from Securitizations
POWER EFFICIENCY: Scant Liquidity Prompts Going Concern Doubts
RAILAMERICA: S&P Affirms BB- Corp. Credit Rating; Outlook Stable

RYLAND GROUP: Fitch Affirms Senior Unsecured Debt Rating at BB+
SAFETY-KLEEN: San Juan Cement Rejecting Houston Port Lease
SALOMON BROS.: S&P Lowers Series 1998-AQ1 Class B-3 Rating to B
SILICON GRAPHICS: Initiates Restructuring Actions to Slash Costs
SIMON TRANS: Holme Roberts Serves as Special Tax Counsel

SPECTRASITE: Taps Travis Morey & Todd Cast to Lead Sales Force
SUN HEALTHCARE: Clock Ticks toward May 30 Foreclosure Sale
SUNRISE CDO: Fitch Drops Class C Notes Rating to B- from BBB
SUPERIOR PLUS: Credit Rating Down to BB+ over ERCO Acquisition
TFC ENTERPRISES: Pushing with Merger with Consumer Portfolio

TITANIUM METALS: Elects 6 Incumbent and 1 New Board Members
TRIMAS CORP: Consolidates Lake Erie Products Manuf. Operations
TRITON PCS: Commences 11% Senior Sub. Disc. Notes Tender Offer
UNITED AIRLINES: Seeks to Expand Scope of McKinsey's Services
WASHINGTON MUTUAL: Rating Actions on Four RMBS Securitizations

WIND RIVER SYSTEMS: Corp. Credit Rating Cut to B on Oper. Losses
WORLDCOM INC: Lazard Pinpoints Reorganization Value at $12 Bil.
WORLD HEART: Receiving Remaining $3M Funding from TPC Investment

* Senate OKs Biden Bill Adding 29 New Bankr. Judges Nationwide

* BOND PRICING: For the week of May 26 - May 30, 2003

                           *********

360NETWORKS: Sues to Recover $1.5M of Pref. Transfers from ADC
--------------------------------------------------------------
Patrick M. McGuirk, Esq., at Sidley Austin Brown & Wood LLP, in
New York, tells the U.S. Bankruptcy Court for the Southern
District of New York that 360networks (USA) inc. and 360fiber,
inc. made 10 payments to or for the benefit of ADC
Telecommunications between March and June 2001 totaling
$1,529,125.

The payments constitute preferential transfers and 360 wants the
money back.  According to Mr. McGuirk:

     (a) each of the Transfers was made to ADC Telecom for or
         on account of an antecedent debt the Debtors owed before
         each Transfer was made;

     (b) ADC Telecom was a creditor at the time of the Transfers;

     (c) the Transfers were made while the Debtors were
         insolvent; and

     (d) by reason of the Transfers, ADC Telecom was able to
         receive more than it would otherwise receive if:

         -- these Cases were cases under Chapter 7 of the
            Bankruptcy Code;

         -- the Transfers had not been made; and

         -- ADC Telecom received payment of the debts in a
            Chapter 7 proceeding in the manner the Bankruptcy
            Code specified.

By this complaint, 360 USA, 360fiber and the Official Committee
of Unsecured Creditors ask the Court to:

     (a) declare that the Transfers are avoidable pursuant to
         Section 547 of the Bankruptcy Code;

     (b) pursuant to Section 547, declare that ADC Telecom must
         pay at least $1,529,125, plus interest from the date of
         the Demand Letter as permitted by law, representing the
         amounts it owed to the Debtors;

     (c) pursuant to Section 550, declaring that ADC Telecom pay
         at least $1,529,125, plus interest from the date of the
         Demand Letter as permitted by law;

     (d) pursuant to Section 502(d), provide that any and all
         claims against the Debtors ADC Telecom filed in these
         cases will be disallowed until it repays in full the
         Transfer plus all applicable interest; and

     (e) award to the Committee and the Debtors all costs,
         reasonable attorneys' fees and interest. (360 Bankruptcy
         News, Issue No. 48; Bankruptcy Creditors' Service, Inc.,
         609/392-0900)


ACTERNA CORP: Seeks Court Injunction Against Utility Companies
--------------------------------------------------------------
Pursuant to Section 366 of the Bankruptcy Code, within the 20-
day period after the Petition Date, a utility may not
discontinue service to a debtor solely on the basis of the
commencement of the case or its failure to pay a prepetition
debt.  Following the 20-day period, however, utilities arguably
may discontinue service to the debtor if the debtor does not
provide adequate assurance of future performance of its
postpetition obligations.

However, Acterna Corp., and its debtor-affiliates assert that an
interruption of any electricity, telephone, telecommunication,
and similar services this early in the Chapter 11 proceedings
would severely disrupt their business operations, resulting in
irreparable harm to their restructuring efforts.

Accordingly, the Debtors will provide the Utility Companies with
adequate assurance of payment of their postpetition obligations,
through:

     (a) the granting of administrative expense status for
         Utility Services rendered to them by the Utility
         Companies postpetition;

     (b) timely payment of the undisputed amounts of each invoice
         for postpetition Utility Services;

     (c) expedited procedures for the Court to review any
         postpetition payment defaults; and

     (d) the availability of a process for modification of these
         requirements if there is a material and adverse change
         with respect to their solvency or liquidity.

Paul M. Basta, Esq., at Weil, Gotshal & Manges LLP, in New York,
says that the Adequate Assurance Procedures not only ensure that
the Debtors' business operations will not be disrupted but also
provide the Utility Companies with a fair and orderly procedure
for determining requests for additional adequate assurance.

Judge Lifland rules that any objections to the Proposed Adequate
Assurance must be received by 4:00 p.m. on May 27, 2003 and
served on the Office of the U.S. Trustee, attorneys for the
Debtors, attorneys for the Debtors' prepetition senior secured
lenders, and the attorneys for any statutory committee then-
appointed in these cases.  At that hearing, the Court will
determine whether the Proposed Adequate Assurance satisfies the
requirements of Bankruptcy Code Section 366. (Acterna Bankruptcy
News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


ALLEGHENY ENERGY: Appoints Regis F. Binder as Interim CFO
---------------------------------------------------------
Allegheny Energy, Inc. (NYSE: AYE) announced that Bruce E.
Walenczyk, Senior Vice President and Chief Financial Officer,
will retire June 1 under the Company's Early Retirement Option
program. Regis F. Binder, Vice President and Treasurer, has been
named Interim Chief Financial Officer.

"We commend Bruce for his efforts in assisting Allegheny in
achieving our new and restructured credit facilities that we
announced in February," said Jay S. Pifer, Allegheny Energy's
Interim President and Chief Executive Officer. "We appreciate
his many contributions that helped to establish the foundation
for our Company's continued financial recovery. We wish Bruce
the best during his retirement."

Mr. Pifer added that Mr. Binder, a 29-year veteran of Allegheny
Energy, will assume the duties of Interim Chief Financial
Officer upon Mr. Walenczyk's retirement.

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


ALLEGIANCE TELECOM: Paying $4 Million of Critical Vendor Claims
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approves Allegiance Telecom, Inc., and its debtor-affiliates'
request to pay prepetition claims owed to 39 unidentified
critical vendors.  The Debtors have authority to spend up to
$4,000,000 to pay these critical vendor claims.

The Debtors purchase products and services from 39 vendors that
are essential and critical for the operation of their
businesses.  The Debtors' ability to continue its operations,
serve its customers, and preserve their estates will largely
depend upon the continued provision of products and services by
the Critical Vendors. Ongoing maintenance and provision of such
products and services by certain Critical Vendors is essential
to maintaining the value of the Debtors' assets and preserving
their value as a going concern.

The Debtors report that they use the specialized products and
services of Critical Vendors daily in connection with:

      a) the Debtors' enterprise system software (e.g., software
         that is crucial for functions such as billing, security,
         usage collection, trouble ticketing, and customer order
         entry);

      b) the Debtors' exclusive telecommunications network;

      c) the Debtors' equipment; and

      d) certain other products and used or sold by the Debtors
         to their customers.

In several instances, such Critical Vendors are the designer or
manufacturer of the software or equipment at issue, and thus,
are uniquely qualified and skilled to modify, install, or
maintain the software, equipment, or network component at issue.
In other instances, the Critical Vendor is highly skilled and
experienced in dealing with the particular software, equipment,
or network component, and cannot be practicably replaced.

Many of the Critical Vendors are used by the Debtors to support
the Debtors' billing and collection efforts. The cessation of
the services provided by such Critical Vendors would have an
immediate negative impact on the Debtors' estates by affecting
the Debtors' ability to generate revenue. In addition, as
telecommunication services providers, any disruption in the
Debtors' billing software capability directly impacts on the
Debtors' ability to market and maintain services to their
customers.

The Debtors also use Critical Vendors to provide maintenance and
installation services for its products and services when the
Debtors are unable themselves to provide such services to their
customers.

In sum, the Debtors believe that the proposed payments of the
Critical Vendor Claims are necessary for the continuing
operation of the Debtors' businesses and the preservation of the
Debtors' enterprise value for the benefit of their estates,
creditors, and all parties in interest. The sums involved are
insignificant in relation to the potential disruption that would
occur if relationships with these suppliers were to be
terminated.

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.  The Debtors filed for
chapter 11 protection on May 14, 2003 (Bankr. S.D.N.Y. Case No.
03-13057).  Jonathan S. Henes, Esq., and Matthew Allen Cantor,
Esq., at Kirkland & Ellis represents the Debtors in their
restructuring efforts.  When the Company filed for protection
from its creditors, it listed $1,441,218,000 in total assets and
$1,397,494,000 in total debts.


AMERICAN COMMERCIAL: Committee Taps Dann Pecar as Co-Counsel
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Indiana
approves American Commercial Lines, LLC's Official Unsecured
Creditors Committee's request to hire Dann Pecar Newman &
Kleiman, PC as co-counsel.

The Committee expects Dann Pecar to:

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

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

      c) assist the Committee in analyzing the claims of the
         Debtors' creditors and the Debtors' capital structure
         and in negotiating with holders of claims and equity
         interests;

      d) assist the Committee in its investigation of the acts,
         conduct, assets, liabilities and financial condition of
         the Debtors and of the operation of the Debtors'
         businesses;

      e) assist the Committee in its analysis of, and
         negotiations with, the Debtors or any third party
         concerning matters related to, among other things, the
         assumption or rejection of certain leases of non-
         residential real property and executory contracts, asset
         dispositions, financing of other transactions and the
         terms of a plan(s) of reorganization for the Debtors and
         accompanying disclosure statement(s) and related plan
         documents;

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

      g) represent the Committee at all hearings and other
         proceedings;

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

      i) advise and assist the Committee with respect to any
         legislative or governmental activities, including, if
         requested by the Committee, to perform lobbying
         activities on behalf of the Committee;

      j) assist the Committee in preparing pleadings and
         applications as may be necessary in furtherance of the
         Committee's interests and objectives; and

      k) perform such other legal services as may be required or
         are otherwise deemed to be in the interests of the
         Committee in accordance with the Committee's powers and
         duties.

The Committee believes that Dann Pecar possesses extensive
knowledge and expertise in the areas of law relevant to these
Cases, and that Dann Pecar is well qualified to represent it in
these Cases.

Dann Pecar will charge for its legal services on an hourly basis
in accordance with its ordinary and customary hourly rates,
which ranger from:

           Partners                $255 - $325 per hour
           Associates              $190 - $225 per hour
           Paraprofessionals       $ 95 - $150 per hour

Professionals who will be primarily responsible for this
engagement and their current hourly rates are:

      James P. Moloy         Partner       $325 per hour
      Melissa J. De Groff    Associate     $225 per hour
      Cathy Canny            Paralegal     $125 per hour

American Commercial Lines LLC, an integrated marine
transportation and service company transporting more than 70
million tons of freight annually using 5,000 barges and 200
towboats in North and South American inland waterways, filed for
chapter 11 protection on January 31, 2003 (Bankr. S.D. Ind. Case
No. 03-90305).  American Commercial is a wholly owned subsidiary
of Danielson Holding Corporation (Amex: DHC).  Suzette E.
Bewley, Esq., at Baker & Daniels represents the Debtors in their
restructuring efforts.  As of September 27, 2002, the Debtors
listed total assets of $838,878,000 and total debts of
$770,217,000.


AMERICAN STONE: Liquidity Problems Raise Going Concern Doubts
-------------------------------------------------------------
American Stone Industries, Inc., and its subsidiaries operated
predominantly in one industry, the design, quarrying and cutting
of sandstone primarily used in the construction industry.

The Company has experienced significant operating losses over
the previous two years. Additionally, the Company has not been
able to comply with its loan covenants at March 31, 2003 and,
December 31, 2002, although they have obtained waivers from the
bank. These matters raise substantial doubt about the Company's
ability to continue as a going concern.

Net sales for the first quarter of 2003 were $321,535, down 62%
compared with $855,486 for the first quarter of 2002. The
decline was due to harsh winter weather that closed the quarries
from January through mid-March, the discontinuation of
unprofitable contracts, and the slow economy.

Gross profit percentage for the first quarter of 2003 decreased
to negative 110% compared with a positive 16% in the same period
a year ago. The decrease was due to the factors cited above
along with significant maintenance expenses of equipment which
had previously been delayed.

Selling, general and administrative expenses increased as a
percentage of net sales from 32% in the first quarter of 2002 to
69% in the latest quarter due to lower sales this year.

Net other expense for the first quarter of 2003 was $41,564,
compared with $7,951 for the first quarter of 2002 due to higher
interest expense, elimination of rental income, lower royalty
income and a loss on the sale of fixed assets.

Net loss for the first quarter of 2003 increased to $616,229
compared with net loss of $145,343 for the first quarter of 2002
primarily due to lower sales and increased expenses related to
delayed maintenance as described above. Earnings in the stone
quarrying industry are normally weaker in the first quarter when
the cold weather restricts both demand and production.

The Company's primary source of liquidity is the Company's line
of credit under an agreement between the Company and Dollar
Bank. The Credit Agreement provides for maximum borrowings of
$500,000, with interest payable monthly at a rate equivalent to
the prime lending rate. Borrowings under the Credit Agreement
are secured by substantially all real estate, inventory and
equipment of the Company. The outstanding balance at March 31,
2003 and December 31, 2002 was $500,000. At March 31, 2003, the
Company was in violation of certain covenants of the loan
agreement, however, management has obtained waivers from the
bank.

Management believes that the Company's current cash flow
position will improve by mid-year. The current situation is the
result of the cyclical nature of sales and the financing of
increased production for which cash payments have not yet been
received.  Management also believes that the Company is not in
default with respect to any note, loan, lease or other
indebtedness or financing agreement. The Company is not subject
to any unsatisfied judgments, liens or settlement obligations.

As stated above, the Company has experienced significant
operating losses over the previous two years. As a result, the
Company currently has cash flow and liquidity problems.
Management has taken steps to cut administrative overhead,
employment levels and other expenses with a goal of reducing
expenses by nearly $1 million in 2003. Management has also
instituted strict controls on credit and sales policies and
procedures. There can be no assurances that these measures will
enable the Company to become profitable or achieve positive cash
flow in the foreseeable future. Management is currently
evaluating alternatives including identifying and obtaining
long-term funding sources, including debt placement, stock
issuance and other alternatives. If Management is unable to
obtain additional capital, there is doubt about the Company's
ability to continue as a going concern.


AMERIPOL SYNPOL: Will Idle Equipment & Temporarily Lay-Off Staff
----------------------------------------------------------------
Port Neches, Texas-based Ameripol Synpol Corp., a manufacturer
of synthetic rubber products, will begin idling its equipment in
a process that could take several weeks, a spokesman said
Tuesday, the Beaumont Enterprise reported.

In a prepared statement, the company's vice president and
general manager said employees not needed for the idling work
would be "temporarily furloughed." "We are in discussions with a
potential buyer for the facility," said Edwin H. Schmidt Jr.,
Ameripol Synpol's general manager.

The financially troubled plant had filed for chapter 11
bankruptcy this past December in a move to allow it to
restructure its debts and to protect the business from creditors
while the plant's owners searched for a buyer. Spokesman David
Margulies said a negotiation to sell to a prospective buyer
still is active, reported the newspaper. (ABI World, May 22)


APPLIX: Will Commence Trading on Nasdaq SmallCap Market on Wed.
---------------------------------------------------------------
Applix, Inc. (Nasdaq: APLX), a global provider of Business
Intelligence and Business Performance Management software
solutions, announced that its request to transfer from The
Nasdaq National Market to The Nasdaq SmallCap Market has been
approved, effective at the opening of trading on May 28, 2003.
The Company announced on May 13, 2003 that it was requesting to
transfer from The Nasdaq National Market to The Nasdaq SmallCap
Market, after the Company did not meet The Nasdaq National
Market's new requirement for minimum stockholders' equity.  The
Company's common stock will continue to trade under the symbol
"APLX", and investors will continue to have ready access to
quotes and information on Applix's shares.

Applix (Nasdaq: APLX) is a global provider of Business
Intelligence and Business Performance Management software
solutions based on its Applix TM1 product.  These solutions
enable the continuous management and monitoring of performance
across the financial, operational, customer and organizational
functions within the enterprise.  More than 1,600 customers
worldwide use Applix's adaptable, scalable and real-time
solutions, delivered by Applix and by a global network of
partners, to manage their business performance and respond to
the marketplace in real-time.  Headquartered in Westborough, MA,
Applix maintains offices in four countries in Europe, North
America and the Pacific Rim.  For more information about Applix,
please visit http://www.applix.com

Applix, Inc.'s December 31, 2002 balance sheet shows that the
Company's total current liabilities eclipsed its total current
assets by about $3 million. Also, at the same date, the
Company's net capital has further shrunk to about $4 million,
about a half of the amount recorded a year ago.


AQUILA: Signs Pact to Sell Its Interest in Midlands Electricity
---------------------------------------------------------------
Aquila, Inc. (NYSE:ILA) and FirstEnergy Corp. (NYSE:FE) have
signed an agreement to sell Aquila Sterling Limited, the owner
of Midlands Electricity plc, to a subsidiary of Scottish and
Southern Energy plc (LSE:SSE).

Aquila Sterling is held by a joint venture company that is owned
79.9 percent by Aquila and 20.1 percent by FirstEnergy. The
purchase price under the sales agreement is approximately US$70
million, which Aquila and FirstEnergy will share in accordance
with their ownership percentages.

Midlands is the fourth largest electric utility in the United
Kingdom, serving 2.4 million network customers through a 38,000-
mile distribution network. Midlands also owns interests in a
combined 884 megawatts of net generation capacity in the United
Kingdom, Turkey, and Pakistan.

The closing of the sale is subject to conditions, including the
successful redemption of outstanding bonds issued by Avon Energy
Partners Holdings, an Aquila Sterling subsidiary, at 86 percent
of their face value. The parties will work to satisfy all
closing conditions and close the sale in the third quarter of
this year.

The completion of this transaction will be another important
milestone in Aquila's restructuring efforts, allowing management
to focus more of its attention on Aquila's core businesses.
"Selling Midlands will be a significant step forward in
returning to our roots as an operator of domestic electric and
natural gas distribution networks," said Keith Stamm, Aquila's
chief operating officer.

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

As reported in Troubled Company Reporter's April 15, 2003
edition, Fitch Ratings assigned a 'B+' rating to the new $430
million senior secured 3-year credit facility of Aquila, Inc.
Concurrently, Fitch has downgraded the senior unsecured rating
of ILA to 'B-' from 'B+'. Approximately $3 billion of debt has
been affected. The senior unsecured rating of ILA is removed
from Rating Watch Negative. The Rating Outlook for ILA's secured
and unsecured ratings is Negative.

The Facility rating was based on the structural protections of
the Facility as well as the senior secured lenders' enhanced
recovery prospects relative to unsecured creditors. Secured and
structurally senior debt together account for approximately 25%
of total debt excluding pre-payment obligations. Facility
collateral includes first mortgage bonds registered in the name
of the collateral agent (Credit Suisse First Boston) on the
regulated gas distribution utilities in MI and NE, a pledge of
stock of the holding company of the Canadian regulated
electricity distribution businesses and a second lien on certain
independent power plant investments.

Standard & Poor's Rating Services lowered its corporate credit
and senior unsecured rating on electricity and natural gas
distributor Aquila Inc., to 'B' from 'B+'. The ratings have also
been removed from CreditWatch where they were placed with
negative implications on Feb. 25, 2003. The outlook is negative.
The rating actions reflect concerns resulting from the company's
reliance on asset sales to reduce debt levels and projected weak
cash flows from operations. At the same time, Standard & Poor's
Rating Services assigned a 'B+' rating to Aquila's proposed $430
million senior secured credit facility. The issuer rating of
Aquila Merchant Services Inc. was withdrawn.

"The ratings on Aquila reflect Standard & Poor's analysis of the
company's restructuring plan, financial condition, and available
liquidity to meet near-term obligations," noted Standard &
Poor's credit analyst Rajeev Sharma. Aquila's restructuring plan
is dependent on continued asset sales. Standard & Poor's is
concerned with the heavy execution risks involved with Aquila's
asset sales strategy. Weak market conditions may lead to
increased execution risks for future asset sales, as evidenced
by the delay in the sale of Avon Energy Partners Holdings. Due
to weak cash flow generation from operations, asset sales will
be necessary for Aquila to reduce its debt levels and shore up
the company's balance sheet. However, cash flow generation
relative to total debt is likely to remain weak and not exceed
15% in the near term.

Cash flows from Aquila's regulated utilities are projected to be
stable, however, depressed power prices and negative spark
spreads will continue to be a drag on Aquila's cash flow from
operations on the nonregulated side of the business. Overall
cash flow will be strained, as the company faces restructuring
charges in 2003 and debt maturities in 2004. Expected cash flow
from the company's reconstituted business plan is insufficient
to fully offset Aquila's massive amount of debt leverage.

Aquila's liquidity will be highly dependent on continued asset
sales as the company faces $400 million in debt maturities in
2004 ($250 million in senior notes due in July and $150 million
in senior notes due in October). Aquila's liquidity will be
further strained by the cash outflows associated with its
prepaid gas delivery contracts and tolling agreements. The
aggregate cash flows for these commitments are estimated to be
$245 million in 2003 and $263 million in 2004. In addition,
substantial projected capital expenditures of $316 million in
2003 and $210 million in 2004 and working capital needs will
continue to be a drain on cash flows.


ARMSTRONG: AWI Files Fourth Amended Plan & Disclosure Statement
---------------------------------------------------------------
Armstrong World Industries, Inc., the operating subsidiary of
Armstrong Holdings, Inc. (OTC Bulletin Board: ACKHQ), has filed
its fourth amended Plan of Reorganization (POR) and proposed
Disclosure Statement with the U.S. Bankruptcy Court in
Wilmington, DE. The proposed Disclosure Statement contains
revised projected financial information for reorganized AWI
required for the Chapter 11 process.

As previously disclosed in AHI's first-quarter Form 10-Q, the
revisions reflect developments regarding AWI's business since
December 2002 and current economic and financial conditions and
are adverse in comparison to the projections previously filed by
AWI in the Chapter 11 process to a degree that is not
immaterial. These projections factor prominently into the
valuation of the consideration to be distributed under the POR.

The Court must approve the proposed Disclosure Statement, which
provides details of the POR, before AWI can solicit votes on its
POR. The POR will only become effective after a vote of various
classes of creditors and with the approval of the Court. The
Court has scheduled a hearing on the proposed Disclosure
Statement for May 30, 2003. Creditors of AWI and shareholders of
AHI are encouraged to read the POR and the proposed Disclosure
Statement for the full details on the planned distributions and
other items that will affect them. The POR, Disclosure Statement
and related press releases are available at
http://www.armstrongplan.com

In the proposed Disclosure Statement, AWI estimates the value of
reorganized AWI at $2.4 to $3.0 billion, with a mid-point value
of $2.7 billion used for POR purposes. Based on this valuation,
the revised value of the consideration (cash and shares and
notes of reorganized AWI) to be distributed under the POR to the
asbestos personal injury trust (other than certain insurance
assets) will be approximately $1.8 billion, and the value of
consideration to be distributed to holders of allowed unsecured
claims (other than convenience claims) will be approximately
$982 million. Based upon the revised financial projections, the
revised estimated value of the POR consideration, and AWI's
estimate that allowed unsecured claims (other than convenience
claims) will total approximately $1.65 billion, AWI estimates
that holders of allowed unsecured claims (other than convenience
claims) will receive a recovery having a value equal to
approximately 59.5% of their allowed claims. As previously
disclosed, all existing stock interests in AWI will be
cancelled; but the POR provides for a distribution of warrants
of reorganized AWI to AHI. The warrants, which AHI intends to
distribute pursuant to a plan of dissolution to be submitted to
AHI's shareholders for approval, have a revised estimated value
of approximately $35-$40 million. AWI's estimates of value and
potential recoveries are based upon a number of assumptions,
which are set forth more fully in the proposed Disclosure
Statement.

Armstrong World Industries, Inc., a subsidiary of Armstrong
Holdings, Inc., is a global leader in the design and manufacture
of floors, ceilings and cabinets. In 2002, Armstrong's net sales
totaled more than $3 billion. Founded in 1860 and based in
Lancaster, PA, Armstrong has 59 plants in 14 countries and
approximately 16,500 employees worldwide. More information about
Armstrong is available on the Internet at
http://www.armstrong.com


BAM! ENTERTAINMENT: Has Until Nov. 17 to Meet Nasdaq Guidelines
---------------------------------------------------------------
BAM! Entertainment(R) (Nasdaq: BFUN), a developer and publisher
of interactive entertainment software, has received notice from
The Nasdaq Stock Market, Inc., indicating that the Company had
been granted an extension to gain compliance with the minimum
$1.00 bid price per share requirement of The Nasdaq SmallCap
Market.

On March 20, 2003 the Company transferred to The Nasdaq SmallCap
Market from The Nasdaq National Market and was afforded until
May 19, 2003 to gain compliance with the minimum $1.00 bid price
per share requirement of The Nasdaq SmallCap Market as set forth
in Marketplace Rule 4310(C)(8)(D). On May 19, 2003, the Company
had not gained compliance with this Marketplace Rule, but did
meet all of the other initial listing requirements of The Nasdaq
SmallCap Market. In accordance with Marketplace Rule
4310(C)(8)(D), the Company has been provided an additional 180
days, or until November 17, 2003, to gain compliance with the
initial listing requirements of The Nasdaq SmallCap Market. The
letter states that to comply with all of these initial listing
requirements, the bid price of the Company's common stock must
close at $1.00 per share or more for a minimum of 10 consecutive
trading days.

If compliance with Marketplace Rule 4310(C)(8)(D) cannot be
demonstrated by November 17, 2003, Nasdaq will determine whether
the Company meets the initial listing criteria under Marketplace
Rule 4310(C)(2)(A). If the Company meets the initial listing
criteria, Nasdaq will notify the Company that it has an
additional 90 days to demonstrate compliance. Otherwise, Nasdaq
will provide written notification that the Company's securities
will be delisted. At that time, the Company may appeal to a
Nasdaq Listing Qualification Panel.

There can be no assurance that the Company will gain compliance
by November 17, 2003 or that an appeal to the Nasdaq Listing
Qualification Panel would be successful.

Founded in 1999 and based in San Jose, California, BAM!
Entertainment, Inc. is a developer, publisher and marketer of
interactive entertainment software worldwide. The company
develops, obtains, or licenses properties from a wide variety of
sources, including global entertainment and media companies, and
publishes software for video game systems, wireless devices, and
personal computers. The company's common stock is publicly
traded on NASDAQ under the symbol BFUN. More information about
BAM! and its products can be found at the company's Web site
located at http://www.bam4fun.com

                           *    *    *

             Liquidity and Going Concern Uncertainty

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

"We have experienced recurring net losses from inception
(October 7, 1999) through December 31, 2002. We had an
accumulated deficit of $45.5 million as of December 31, 2002.
These factors, among others, raise substantial doubt about our
ability to continue as a going concern for a reasonable period
of time. The condensed financial statements do not include any
adjustments relating to the recoverability and classification of
assets or the amounts and classification of recorded liabilities
that might be necessary should we be unable to continue as a
going concern.

"During the quarter ended December 31, 2002, we undertook
measures to reduce spending and restructured our operations. In
2003, we retained the investment banking firm of Gerard Klauer
Mattison & Co., Inc. to assist us in reviewing a range of
potential strategic alternatives, including mergers,
acquisitions and securing additional financing. We may need to
consummate one or a combination of the potential strategic
alternatives, or otherwise obtain capital via the sale or
license of certain of our assets, in order to satisfy our future
liquidity requirements. Current market conditions present
uncertainty as to our ability to effectuate any such merger or
acquisition or secure additional financing, as well as our
ability to reach profitability. There can be no assurances that
we will be able to effectuate any such merger or acquisition or
secure additional financing, or obtain favorable terms on such
financing if it is available, or as to our ability to achieve
positive cash flow from operations. Continued negative cash
flows create uncertainty about our ability to implement our
operating plan and we may have to further reduce the scope of
our planned operations. If cash and cash equivalents, together
with cash generated from operations, are insufficient to satisfy
our liquidity requirements, we will not have sufficient
resources to continue operations for the next 12 months."


BETHLEHEM STEEL: Delays in Filing March Quarter Fin'l Reports
-------------------------------------------------------------
Bethlehem Steel Corporation and certain of its subsidiaries
filed a petition for relief under Chapter 11 of the U.S.
Bankruptcy Code in the U.S. Bankruptcy Court for the Southern
District of New York on October 15, 2001. The Company is unable
to timely file its Quarterly Report on Form 10-Q for the quarter
ended March 31, 2003 because compliance with the periodic
reporting requirements of the Securities Exchange Act of 1934,
as amended, would cause significant hardship and unreasonable
burden in terms of expense and effort on the part of the
Company, as the efforts of the Company have been occupied with
the sale of substantially all of its assets to International
Steel Group, the closing of which occurred on May 7, 2003.

As a result of the previously announced sale of substantially
all of its assets to a subsidiary of International Steel Group
Inc., Bethlehem Steel expects to record a loss of approximately
$2.3 billion for the impairment of long-lived assets for the
quarter ended March 31, 2003. As a result, the reported results
of operations for the quarter ended March 31, 2003 will be
significantly worse than for the quarter ended March 31, 2002.
The Company plans to file a chapter 11 liquidating plan within
60 days and plans to adopt the liquidation basis of accounting
as of April 30, 2003. It is expected that the stated value of
liabilities will be reduced by approximately $6 billion in a
future period under liquidation accounting.


BURLINGTON: Urges Court to Okay Lease Decision Time Extension
-------------------------------------------------------------
As of the Petition Date, Burlington Industries, Inc., and its
debtor-affiliates were tenants under 36 unexpired nonresidential
real property leases. As part of their restructuring efforts,
the Debtors have rejected or assumed and assigned certain leases
that were burdensome to the their estates or are no longer
necessary to the Debtors' restructuring efforts. Currently, the
Debtors are tenants under 15 unexpired nonresidential real
property leases. These Leases primarily relate to:

    -- distribution and warehousing facilities,
    -- office space,
    -- showrooms, and
    -- sales offices.

The Debtors ask the Court to further extend the deadline to
assume, assume and assign or reject each of the Leases through
and including the Confirmation Date pursuant to Section 365 of
the Bankruptcy Code.

Since the Petition Date, Rebecca L. Booth, Esq., at Richards,
Layton & Finger, in Wilmington, Delaware, relates that it has
been the Debtors' desire and collective goal to emerge from
Chapter 11 with a streamlined model that will enable the Debtors
to be competitive and successful in today's market.  The Debtors
have:

    (a) in connection with the Business Plan, reduced operating
        costs by consolidating certain operation, exiting certain
        business segments, closing unneeded facilities and
        reducing their workforce by approximately 6,000
        employees,

    (b) pursued and completed sales of non-core assets in these
        cases, generating approximately $71,500,000 for the
        estates;

    (c) commenced, and made substantial progress on, an extensive
        review of their thousands of executory contracts and
        unexpired leases and the more than 3,700 claims filed
        against or scheduled by the Debtors;

    (d) analyzed and pursued simultaneously multiple exit
        strategies;

    (e) filed a plan of reorganization and the related disclosure
        statement; and

    (f) obtained approval of certain bidding procedures that
        establish a marketing, due diligence and sale process in
        these Chapter 11 cases.

Until the Debtors complete the marketing and sale process
contemplated by the Bidding Procedures, the Debtors cannot know
the form or substance of the ultimate transaction that will
facilitate their emergence from Chapter 11.

Given the potential importance of the Leases to the Debtors'
ongoing operations and the number of issues that the Debtors
must consider and resolve in deciding whether to assume, assume
and assign or reject each of the Leases, Ms. Booth points out,
it would be impossible and imprudent for the Debtors to elect
whether to assume, assume and assign or reject each of the
Leases prior to the Confirmation Date.

Without an additional extension of the lease decision period,
Ms. Booth argues, the Debtors are at risk of prematurely and
improvidently assuming Leases that they may later determine are
burdensome -- thus creating potential administrative claim -- or
prematurely and improvidently rejecting Leases that they later
discover are critical to their ultimate reorganization strategy
and efforts.

Ms. Booth assures the Court that the Debtors will continue to
perform all of their obligations arising under the Leases from
and after the Petition Date in a timely fashion in accordance
with Section 365(d)(3) of the Bankruptcy Code.  Hence, the
extension of lease decision period will not prejudice the
Lessors under the Leases.

In addition, the Debtors ask the Court that any order granting
this request be entered without prejudice to the right of any
Lessor to seek an order requiring the Debtors to elect to
assume, assume and assign or reject a particular Lease prior to
the Confirmation Date.

By application of Del.Bankr.LR 9006-2, the deadline is
automatically extended through the conclusion of the June 12,
2003 hearing, at which time Judge Newsome will consider the
merits of the Debtors' request. (Burlington Bankruptcy News,
Issue No. 33; Bankruptcy Creditors' Service, Inc., 609/392-0900)


CARVER CORP.: Defaults Under Plan & Committee Moves to Convert
--------------------------------------------------------------
Carver Corporation, its Unsecured Creditors' Committee says, has
failed to make distributions to creditors that are required
under the Company's Plan of Reorganization confirmed by the U.S.
Bankruptcy Court for the Western District of Washington on
December 17, 1999.

"The Debtor has breached the terms of its Plan of
Reorganization," Warren L. Erickson, Esq., in Seattle tells the
Bankruptcy Court.

The Committee asks Judge Steiner to convene a hearing on June
13, 2003, to consider converting the case to a chapter 7
proceeding, liquidating the Company's assets, and dividing-up
what's left among the Debtors' creditors.

Carver Corporation -- a consumer hi-fidelity audio products
design and manufacturing company -- filed for chapter 11
protection in May 1999 (Bankr. W.D. Wash. Case No. 99-05793)
after creditors filed collection suits and started making a run
for the company's assets.  The Company filed for chapter 11
protection and confirmed a long-term pay-out plan.

The Company's Web sites at http://www.carvercorp.comhas
vanished.  That Internet domain is registered to:

        Marian Lundberg
        Carver Corporation
        P.O. Box 1589
        5210 Bickford Ave.
        Snohomish , WA 98290
        Telephone 425.335.4748
        Fax 425.335.4746
        E-mail: marian@SUNFIRE.COM


CBD MEDIA: S&P Assigns B+ Rating to Corp. Credit and $165M Loan
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to CBD Media LLC.

A 'B+' rating was also assigned to the company's planned $165
million senior secured credit facilities. These bank loan
facilities consist of a $5 million 6-year revolving credit
facility (undrawn at closing) and a $160 million 6.5-year term
loan B. In addition, Standard & Poor's assigned its 'B-' rating
to the planned $150 million senior subordinated notes due
2011 of CBD and its subsidiary, co-issuer CBD Finance Inc.
Combined with cash on hand, proceeds from the two offerings will
be used to repay the $202 million outstanding under the existing
credit facility and provide a $132 million dividend to equity
holders. The outlook is stable for the Cincinnati, Ohio-based
publisher of telephone directories. The company will have about
$310 million of debt outstanding.

The ratings reflect CBD's substantial pro forma debt levels with
debt to EBITDA of more than 6x, the business concentration in a
single market, and a relatively small EBITDA base. These factors
are tempered by the company's fairly stable revenues and cash
flow throughout the advertising revenue cycle; healthy EBITDA
margins and minimal capital expenditures, resulting in
meaningful free operating cash flow generation; and virtually
no required debt amortization until the last year of the term
loan.

"CBD has a very strong market position because it is the
incumbent directory publisher," said Standard & Poor's credit
analyst Donald Wong. In addition, the company has long standing
relationships with a large and diversified base of small- and
medium-size businesses, many of which rely on the directories as
their sole form of advertising. Customer retention rates are
high, and the demographics of the Cincinnati market are
favorable.

The company's pro forma financial profile is initially weak for
the 'B+' corporate credit rating. However, CBD is a free
operating cash flow generator as a result of EBITDA margins in
the high-50% area and virtually no capital expenditures.
"Standard & Poor's expects that most, if not all, of these funds
will be used for debt reduction in the intermediate term,"
added Mr. Wong. The low spending levels reflect the company's
outsourcing of its sales, printing, distribution and billing
operations.


CELL-LOC INC: Completes Private Placement of 357,143 Units
----------------------------------------------------------
Cell-Loc Inc. (TSX: CLQ) completed a private placement for gross
subscription proceeds of $150,000.06 (Cdn) in relation to the
issuance of 357,143 units. Each unit is priced at $0.42 and is
comprised of one common share and one common share purchase
warrant which entitles the holder to purchase one common share
priced at $0.45 upon exercise within 24 months.

Wolverton Securities acted as an agent for a portion of the
private placement and receives a commission and 20,000 common
shares and 20,000 broker warrants which carry the same
conditions as the common share unit purchase warrants.

Cell-Loc Inc. -- http://www.cell-loc.com-- a leader in the
wireless location industry, is the developer of Cellocate(TM), a
family of network-based wireless location products that enable
location-based services. Located in Calgary, Alberta, Cell-Loc
currently develops, markets and supports its patented wireless
location technology in Asia as well as North and South America,
with a view to expanding globally. Cell-Loc is listed on the
Toronto Stock Exchange (TSX) under the trading symbol: "CLQ."

                         *   *   *

As reported previously, the company's December 31, 2002 total
cash balance of $562,000 represents a $1.0 million, or 63
percent, decrease from the first quarter cash balance of $1.5
million.  The working capital balance has increased to $307,000
from a working capital deficiency of $2.47 million for the
period ended September 2002. The increase in working capital for
the period ended December 31, 2002 is a direct result of de-
consolidating TimesThree Inc. Subsequent to the quarter end, the
Company received $970,400 from the January 2003 private
placement. The Company has entered into contracts to sell a
portion of the assets formerly classified as available for
deployment, the proceeds from which will be a source of near
term cash. In the absence of the Company selling the network
equipment contracted for sale or the Company generating cash by
licensing its technology to third parties, the Company will
deplete its cash reserves at the end of March 2003. The
Company's monthly use of cash continues to be scrutinized to
ensure optimal use of cash resources.


CIENA CORP: Second Quarter Net Loss Stands at $75 Million
---------------------------------------------------------
CIENA(R) Corporation (NASDAQ:CIEN), a leading provider of global
networking solutions, reported its second quarter results for
the period ending April 30, 2003. Revenue for the quarter
totaled $73.5 million, representing sequential growth of 4% from
the prior fiscal quarter. On a generally accepted accounting
principles basis, CIENA's reported net loss for the period was
$75.5 million. The quarter's GAAP results include non-cash
deferred stock compensation charges of $4.4 million,
amortization of intangible assets of $3.4 million, and net
restructuring costs of $2.7 million.

Revenue for the six months ending April 30, 2003 totaled $144.0
million. On a GAAP basis, CIENA's net loss for the six-month
period was $182.6 million.

"This quarter was marked by further improvements in financial
performance, important customer wins and a significant step
toward our goal of expanding our addressable market with the
announced acquisition of WaveSmith Networks," said Gary Smith,
CIENA's president and CEO. "We continue to make progress toward
profitability, for the third sequential quarter growing revenue,
improving gross margins and delivering lower than anticipated
ongoing operating expenses.

"BT's selection of CIENA during the quarter was an enormous
validation of our strategy of continued investment and is proof-
positive not only that carriers worldwide are moving toward the
efficiencies and revenue-generation capabilities of next-
generation networks, but also that CIENA has the mass,
credibility, experience and staying power to be selected as a
strategic vendor by the largest of incumbents," said Smith.

In evaluating the operating performance of its business, CIENA's
management excludes certain charges or credits that are required
by GAAP. These items, which are identified in the table below,
share one or more of the following characteristics: they are
unusual, and CIENA does not expect them to recur in the ordinary
course of its business; they do not involve the expenditure of
cash; they are unrelated to the ongoing operation of the
business in the ordinary course; or their magnitude and timing
is largely outside of the Company's control.

These adjustments are not in accordance with GAAP, and making
such adjustments may not permit meaningful comparisons to other
companies. As of the quarter ended April 30, 2003, CIENA's
weighted average shares outstanding were approximately
433,932,000. Adjusting CIENA's quarterly GAAP results as noted
would reduce the Company's net loss in the quarter to $0.10 per
share.

As of the six months ended April 30, 2003, CIENA's weighted
average shares outstanding were approximately 433,330,000.
Adjusting CIENA's six-month GAAP results as noted would reduce
the Company's net loss for the period to $0.21 per share.

In addition to the adjustments in the table above, during the
second quarter the Company recorded a $1.4 million benefit for
excess and obsolete inventory, resulting from the sale of
previously reserved inventory, which favorably affected gross
margin. Exclusive of this effect, gross margin in the quarter
would have been 22.8% compared to the 24.8% reported. The total
per-share effect of the benefit was $0.0033 in the quarter.

For the six months ended April 30, 2003, the Company recorded a
$4.1 million benefit for excess and obsolete inventory,
resulting from the sale of previously reserved inventory, which
favorably affected gross margin. Exclusive of this effect, gross
margin for the six-month period ended April 30, 2003 would have
been 21.1% compared to the 23.9% reported. For the six-month
period, the total per-share effect of this benefit was $0.0095.

CIENA ended its fiscal second quarter with cash, short- and
long-term securities valued at $1.8 billion using cash of $78.3
million in the quarter.

During the quarter CIENA announced its intent to acquire
WaveSmith Networks, entering the growing multiservice switching
market estimated at $2 billion. Provided WaveSmith shareholders
approve the transaction at their special meeting scheduled for
June 11, 2003, CIENA expects the acquisition to close shortly
thereafter.

                        Business Outlook

"Our customers continue to exercise extreme spending caution,
perpetuating the challenging telecom equipment environment,"
said Smith. "As a result, we believe revenue in our third fiscal
quarter is likely to be in a range of between $65 to $75
million.

"We expect that the addition of revenue from new customers, like
BT, and new market opportunities such as those provided by the
acquisition of WaveSmith, will help to drive sequential revenue
growth as we exit the fiscal year," said Smith. "In the
meantime, we continue to take steps to align our operations and
our resources with our market opportunities and to minimize our
operating expenses without jeopardizing future potential
growth."

CIENA Corporation delivers innovative network solutions to the
world's largest service providers, increasing the cost-
efficiency of current services while enabling the creation of
new carrier-class data services built upon the existing network
infrastructure. Additional information about CIENA can be found
at http://www.ciena.com

                         *    *    *

As previously reported in Troubled Company Reporter, Standard &
Poor's lowered the corporate credit rating on optical
telecommunications systems and equipment provider, Ciena Corp.,
to single-'B' from single-'B'-plus, reflecting the company's
dramatic decline in sales, and expectations that business
conditions will remain weak over the intermediate term. The
outlook remains negative.

"The ratings continue to reflect the company's narrow business
position, substantial leverage, and the risks of continuing
technology evolution offset by the company's good financial
flexibility," said Standard & Poor's credit analyst Bruce Hyman.


CLARK RETAIL: Taps NRC to Dispose of 630 Convenience Stores
-----------------------------------------------------------
National Real Estate Clearinghouse (NRC) has been retained to
coordinate the disposition of up to 630 convenience stores and
gasoline stations for Clark Retail Enterprises, Inc. of Oak
Brook, IL. The stores will be sold through a sealed bid sale in
a "buy one, some or all" format. A list of stores is available
online at http://www.nrcBid.com/305or by calling 800-747-3342
extension 305.

Clark operates in nine states: Illinois, Indiana, Ohio,
Michigan, Kentucky, Tennessee, Iowa, Wisconsin, and Missouri.
The company voluntarily filed for Chapter 11 bankruptcy on
October 15, 2002 and is conducting a structured sale of all of
its assets in order to maximize value for the Clark estate.

"The company has a portfolio of very competitive assets and
strong name brands," said Brandon K. Barnholt, Clark President
and CEO. "We believe these assets have strategic value for the
right operator, as well as upside earnings potential for a
company not hindered by Clark's liquidity issues."

"We expect enormous interest in these stores," said Evan
Gladstone, NRC Managing Director, "from large companies looking
to purchase 50 or more sites, mini-oils purchasing 5-10 as well
as individuals wanting to buy only one store."

NRC is currently preparing a color sales brochure and individual
due diligence packages for each property, which contain store
level information and bidding terms of sale. Individual bid
packages for each store should be ready on or about May 30th.

NRC will conduct six How-To-Bid Seminars: June 10 in Chicago at
the Westin O'Hare at 10am and in Indianapolis at the Adams Mark
at 7pm; June 11 in Louisville, KY at the Executive West at noon;
June 12 in Cleveland at the Sheraton Airport Hotel; June 13 in
Detroit at the Westin Airport Hotel at 10am; and June 18 in
Springfield, IL at the Renaissance Hotel at 1pm. All interested
parties are encouraged to attend to learn more about the sale.

Interested buyers may visit the NRC Web site at
http://www.nrcBid.com/305or call NRC for information on the
Clark sale at 800-747-3342 extension 305. National Real Estate
Clearinghouse specializes in the accelerated sale of petroleum
industry property and commercial real estate throughout the
U.S., Mexico and Canada, and has sold over 8000 properties since
its inception in 1989.

NRC has just completed selling stores in the Swifty Serve
bankruptcy, one of the largest of its kind, that drew more than
5000 bids for the 520 sites and was sold to 225 separate bidders
for $165 million on December 19, 2002. NRC current and past
clients include BP, Shell, Bank of America, Wachovia, Kmart,
Leucadia National Corp., Circle K (now Conoco Phillips) and Earl
Scheib.


COMMTOUCH SOFTWARE: Red Ink Continues to Flow in First Quarter
--------------------------------------------------------------
Commtouch (Nasdaq:CTCH), a developer and provider of proprietary
anti-spam solutions,  announced its first quarter results for
2003.

Revenues for the quarter were $0.1 million compared to $0.6
million in the prior quarter and $1.3 million in the comparable
quarter last year. Total loss for the quarter was $1.1 million
compared to $2.2 million in the prior quarter and $0.9 million
in the comparable quarter last year.

Cash as at March 31, 2003 was approximately $1.1 million
compared to $1.4 million as at December 31, 2002. During the
first quarter, the company received $0.4 million of the total
loan amount of $1.25 million under the previously announced
convertible loan agreement.

At March 31, 2003, the Company's balance sheet shows that its
total shareholders' equity has further dwindled to about
$628,000 from about $1.4 million recorded at December 31, 2002.

Commtouch Software Ltd. is a developer and provider of
proprietary anti-spam solutions. The company's core technologies
reflect its decade of experience as a leading vendor of email
software applications and provider of global messaging services.
Commtouch is headquartered in Netanya, Israel and its
subsidiary, Commtouch Inc., is based in Mountain View, CA. The
company was founded in 1991 and has been publicly traded since
1999 (Nasdaq:CTCH). To learn more about Commtouch's solutions
visit Web site at http://www.commtouch.com


COMMTOUCH SOFTWARE: Closes $1.25 Million Financing Arrangement
--------------------------------------------------------------
Commtouch (Nasdaq: CTCH), a developer and provider of
proprietary anti-spam solutions, has successfully closed the
second tranche under the convertible loan agreement described in
its February 13 press release, with the company to receive an
additional $888,000 under the agreement. Together with the
closing of the first tranche, as announced on April 2, the
company is receiving from the lenders a total of $1,250,000
under the agreement.

At an extraordinary meeting of shareholders held on May 15, the
company's shareholders approved an increase in Commtouch's
authorized share capital, which was a condition to closing the
second tranche funding.

The company also announced that it has to date contracted with
22 resellers across the United States and in Canada to lead the
roll-out of its new Anti-Spam Adaptive Protection (ASAP!(TM))
solution, and expects to continue signing additional qualified
Value Added Resellers as demand for the ASAP! solution grows.

Commtouch and its resellers have jointly undertaken dozens of
early installations of ASAP! As a result of the company's recent
activities, it anticipates a return to growth in sales during
the third quarter of this year.

Gideon Mantel, Commtouch's CEO stated: "The progress we have
made, in terms of securing additional working capital for the
company, creating an incomparable anti-spam solution and quickly
developing our reseller program, has been truly gratifying.
Also, we are encouraged by the growing demand and scrutiny of
enterprises seeking a first class anti-spam solution capable of
making a real dent in spam flow."

Commtouch Software Ltd. is a developer and provider of
proprietary anti-spam solutions. The company's core technologies
reflect its decade of experience as a leading vendor of email
software applications and provider of global messaging services.
Commtouch is headquartered in Netanya, Israel and its
subsidiary, Commtouch Inc., is based in Mountain View, CA. The
company was founded in 1991 and has been publicly traded since
1999 (Nasdaq: CTCH). To learn more about Commtouch's solutions,
visit its Web site at http://www.commtouch.com


CONOR PACIFIC: Initiating Steps to Reduce Outstanding Debts
-----------------------------------------------------------
Conor Pacific Group Inc. announced that its board of directors
has approved a proposed transaction with 157692 Canada Inc. (the
"Secured Creditor") to settle $2.77 million of outstanding
indebtedness owed to the Secured Creditor.

Under the proposal, such indebtedness will be settled by (a)
the transfer to the Secured Creditor of certain real estate
assets owned by a subsidiary of the Corporation (the "Subject
Real Estate"); and (b) the issue to the Secured Creditor of
22,125,000 common shares of the Corporation at a price of $0.08
per share. The transactions contemplated by the Proposal are
related party transactions within the meaning of Rule 61-501 of
the Ontario Securities Commission ("Rule 61-501") and Policy No.
Q-27 of the Commission des valeurs mobiliŠres du Qu‚bec ("Policy
Q-27") and are subject to approval by a majority of the votes
cast by minority shareholders at the annual and special general
meeting of shareholders of the Corporation to be held on June
27, 2003. The transactions are also subject to receipt of all
required regulatory approvals. If approved, the Proposal will be
implemented effective June 30, 2003.

The indebtedness owing to the Secured Creditor consists of the
unpaid principal of, together with accrued interest on, the
outstanding indebtedness of the Corporation acquired by the
Secured Creditor from Royal Bank of Canada and Royal Bank
Ventures Inc. in September 2000 which was not settled in the
restructuring of the Corporation completed under the Companies'
Creditors Arrangement Act in April 2001 and additional advances
made by the Secured Creditor subsequent to such date to fund the
Corporation's real estate activities. The indebtedness, which is
secured by a charge on all of the assets of the Corporation and
its subsidiaries, has been in default since July 1, 2000.
Pursuant to the terms of various forbearance agreements, the
latest of which is effective December 31, 2002, the Secured
Creditor has agreed to forbear from declaring an event of
default under the applicable loan agreements until June 30,
2003.

The continued listing of the Corporation's common shares is
being reviewed by The Toronto Stock Exchange under its remedial
review process as a result of the Corporation's failure to meet
continued listing requirements including requirements as to
minimum public float and requirements relating to the financial
condition and operating results. Conor Pacific believes that
approval and implementation of the Proposal will assist the
Corporation in meeting the continued listing requirements
relating to its financial condition and operating results.

The Subject Real Estate consists of a 71,772 square foot
commercial building on 8.80 acres of land located at 2240
Speakman Drive within the Sheridan Science and Technology Park
in Mississauga, Ontario (the "Speakman Property") and a 40,514
square foot shopping centre on approximately 4.4 acres of land
located at 300 to 310 Fifth Avenue in Cochrane, Alberta (the
"Cochrane Property"). Valuations obtained by the Corporation
from Altus Group, a division of Toronto Real Estate Advisory
Services Inc., and Merit Valuation Services Inc. indicate that
the Speakman Property and the Cochrane Property have a market
value of $4.85 million and $5.9 million, respectively, for a
total market value of $10.75 million. Under the Proposal, the
Secured Creditor has agreed to pay $11.6 million for the Subject
Real Estate to be paid as to $1,000,000 by reducing outstanding
indebtedness and as to the balance by assuming related
indebtedness of approximately $10.6 million. If the Proposal
is approved, the only remaining indebtedness owing to the
Secured Creditor will be a second mortgage in the principal
amount of $930,000 on certain undeveloped real estate in
Cochrane, Alberta owned by Cochrane Properties Limited, a
subsidiary of the Corporation (the "Cochrane Mortgage"). The
Cochrane Mortgage is non-recourse to the Corporation and the
Secured Creditor's only recourse under the Cochrane Mortgage is
to Cochrane Properties Limited or the mortgaged real estate.

The common shares to be issued to the Secured Creditor pursuant
to the Proposal are being issued at a price of $0.08 per share,
being the closing price of the common shares of the Corporation
on the last day the shares traded prior to the approval of the
Proposal by the board of directors of the Corporation. Following
such issuance, there will be a total of approximately 45 million
common shares outstanding of which approximately 49.2% will be
held by the Secured Creditor. The Secured Creditor has indicated
that it intends, subject to receipt of required regulatory
approvals, to distribute these securities to its creditors
and/or shareholders in satisfaction of its outstanding
obligations. No separate valuation has been obtained by the
Corporation in connection with the common shares to be issued to
the Secured Creditor under the Proposal and the Corporation has
relied upon an exemption from such valuation requirements
contained in Rule 61-501 and Policy Q-27.

Two members of the board of directors of the Corporation, Robert
E. Nowack and Jim Bond, are directors and officers of the
Secured Creditor. The shareholders of the Secured Creditor
consist of Conor Pacific Canada Inc. (40%), Greenpoint Trading
Ltd. (25%), Immaculate Confections Ltd. (25%) and Tombstone
Ventures Inc. (10%). Each of these companies are also
shareholders of the Corporation holding, in the aggregate,
approximately 61% of the currently issued and outstanding
shares. Shares held by these companies will not be included in
determining whether requisite majority of minority approval
of the Proposal has been obtained. Robert Nowack, a director and
Chief Executive Officer of Conor Pacific, is a significant
shareholder of Conor Pacific Canada Inc. Tombstone Ventures Inc.
is controlled by Jim Bond, a director of the Corporation. Conor
Pacific Canada Inc., Ventana Construction Inc., a company
controlled by Jim Bond, and Greenpoint Trading Ltd. are also
creditors of the Secured Creditor.

At the Meeting, the shareholders of the Corporation will also be
asked to consider and, if thought fit, approve certain other
matters of special business as follows: (a) to approve a special
resolution to change the name of the Corporation to Precision
Assessment Technology Corporation. The proposed name is similar
to that of the Corporation's principal operating subsidiary,
Precision Sampling, Inc., and the board of directors believes
the proposed name better reflects the future direction and focus
of the Corporation; (b) to approve a special resolution amending
the articles of the Corporation to permit shareholders' meetings
to be held in San Francisco, California and Orlando, Florida
where Precision Sampling, Inc. has its principal operations;
(c) to approve a special resolution to reduce the stated capital
attached to the outstanding common shares of the Corporation by
$9.2 million, being an amount equal to the estimated accumulated
deficit of the Corporation as at June 30, 2003. The effect of
the resolution, if approved, will be to eliminate the estimated
accumulated deficit of the Corporation as at June 30, 2003.

If the Proposal is approved at the Meeting, the shareholders
will be asked at the Meeting to approve a resolution to increase
the maximum number of common shares issuable under the 1996
Stock Option Plan, as amended, of the Corporation from 3.3
million to 6.5 million common shares, representing approximately
14.5% of the number of common shares which will be outstanding
following the issue of the common shares pursuant to the
Proposal. This increase is being requested to enable the Board
to properly incentivize the officers and employees of the
operating company.

If the Proposal is not approved, the Corporation will not be
able to repay the outstanding indebtedness owed to the Secured
Creditor when due. In accordance with the terms of the
forbearance agreements, the principal amount of the indebtedness
bears interest at a rate of 3.3% per month, compounded monthly,
and is payable at a rate of 12% per annum with the balance of
interest accruing and payable on the repayment of principal.

As the Corporation does not have the liquidity to repay senior
indebtedness, the independent directors unanimously approved the
proposal as being in the best interests of the shareholders. It
is anticipated that these steps will also move the Corporation
closer to being in compliance with the TSX rules.


CONSECO INC: TOPrS Panel Voices Plan Distribution Objection
-----------------------------------------------------------
The Official Committee of Trust Originated Preferred Debt
Holders in the Chapter 11 cases of Conseco Inc., and its debtor-
affiliates notes that the negotiating process has resulted in a
Plan that pays senior creditors in excess of 100% of their
claims, while providing the tens of thousands of TOPrS Holders
with nothing for their $2,100,000,000 in claims.  The Plan does
not include a safeguard that allows the TOPrS to receive a
recovery if the Debtors have materially undervalued their
assets, as is predicted.

Daniel R. Murray, Esq., at Jenner & Block, points out that the
Plan rewards Conseco's management with a number of very valuable
benefits, namely:

    -- releases that violate the Bankruptcy Code;

    -- up to 10% of the equity in the Reorganized Debtors;

    -- assumption of their employment contracts, which are worth
       millions of dollars; and

    -- indemnification provisions and insurance coverage as
       protection against potential claims.

The proponents are so confident the Court will overlook the
deficiencies in the Plan that they have refused to meet with the
TOPrS Committee.  This is disdainful of the policy favoring
consensual resolutions in bankruptcy and is unprecedented.

"As will be shown at trial, the substantial flaws in the
Debtors' most recent valuation analysis also support the
conclusion that the Debtors have artificially manipulated their
valuation to the detriment of the TOPrS," Mr. Murray says.

Mr. Murray asserts that the expert valuation testimony of Lazard
Freres' Stephen Campbell will be flawed because:

    1) it uses an artificially high discount rate;

    2) the selection of companies is not comparable to the
       Debtors;

    3) it fails to include a control premium; and

    4) it fails to incorporate assets with significant value,
       including non-life insurance company net operating losses
       and the value of claims against third parties.

According to Mr. Murray, the Debtors' Plan violates the Code.
Its confirmation "would discredit the bankruptcy process in the
eyes of thousands of small individual creditors who are watching
this case with the hope that bankruptcy law, and this Court,
will protect them from the overreaching being attempted by the
Lenders, noteholders and insiders through this Plan."  (Conseco
Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


CWMBS: Fitch Takes Various Rating Actions on 6 Securitizations
--------------------------------------------------------------
Fitch Ratings-New York-May 22, 2003: Fitch Ratings has upgraded
five, affirmed twelve, downgraded five, and placed five classes
on Rating Watch Negative on the following CWMBS, Inc.
(Countrywide Home Loans) residential mortgage-backed
certificates:

CWMBS (Countrywide Home Loans, Inc.) mortgage pass-through
certificates, series 2000-1

         -- Class M affirmed at 'AAA';
         -- Class B-1 upgraded to 'AA' from 'A+';
   -- Class B-2 affirmed at 'BBB+';
         -- Class B-3 downgraded to 'B' from 'BB';
         -- Class B-4 downgraded to 'C' from 'B'.

CWMBS (Countrywide Home Loans, Inc.) mortgage pass-through
certificates, series 2000-2

         --Class M affirmed at 'AAA';
         -- Class B-1 upgraded to 'AA' from 'A+';
         -- Class B-2 affirmed at 'BBB+';
         -- Class B-3 downgraded to 'B' from 'BB';
         -- Class B-4 downgraded to 'C' from 'CCC'.

CWMBS (Countrywide Home Loans, Inc.) mortgage pass-through
certificates, series 2000-4 ALT 2000-1

         -- Class M affirmed at 'AAA';
         -- Class B-1 affirmed at 'A';
         -- Class B-2 affirmed at 'BBB';
         -- Class B-3 downgraded to 'B-' from 'B' and removed
              from Rating Watch Negative.

CWMBS (Countrywide Home Loans, Inc.) mortgage pass-through
certificates, series 2001-3 ALT 2001-2

         -- Class M upgraded to 'AA+' from 'AA';
         -- Class B-1 affirmed at 'A';
         -- Class B-2 affirmed at 'BBB';
         -- Class B-3 rated 'BB', placed on Rating Watch
               Negative;
         -- Class B-4 rated 'B', placed on Rating Watch Negative.

CWMBS (Countrywide Home Loans, Inc.) mortgage pass-through
certificates, series 2001-10 ALT 2001-6

         -- Class M upgraded to 'AA+' from 'AA';
         -- Class B-1 affirmed at 'A';
         -- Class B-2 affirmed at 'BBB';
         -- Class B-3 rated 'BB', placed on Rating Watch
               Negative;
         -- Class B-4 rated 'B', placed on Rating Watch Negative.

CWMBS (Countrywide Home Loans, Inc.), mortgage pass-through
certificates, series 2001-14 ALT 2001-7

         -- Class M upgraded to 'AA+' from 'AA';
         -- Class B-1 affirmed at 'A';
         -- Class B-2 rated 'BBB', placed on Rating Watch
               Negative;
         -- Class B-3 rated 'B', remains on Rating Watch
               Negative.

These actions are taken due to the delinquencies in relation to
the applicable credit support levels as of the April 25, 2003
distribution.


CYPRESS AVIATION: Files for Chapter 7 Liquidation in Florida
------------------------------------------------------------
Cypress Aviation, a corporate aircraft repair and refurbishing
service formerly at Lakeland Linder Regional Airport, has filed
for chapter 7 bankruptcy protection with the U.S. Bankruptcy
Court in Tampa, reported The Ledger. The company filed during
the week of April 29, according to court records.

Owner Robert Wagner Sr. closed the doors on the company's
44,000-square-foot facility on April 11. The company had as many
as 50 employees last year until downsizing because of a slump in
the general aviation industry following the Sept. 11 terrorist
attacks, reported the online newspaper. (ABI World, May21)


CYPRESS AVIATION: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Cypress Aviation, Inc.
         3201 Flightline Drive, #301
         Lakeland, Florida 33811

Bankruptcy Case No.: 03-08277

Type of Business: Aircraft maintenance and refurbishment
                   service center

Chapter 11 Petition Date: April 23, 2003

Court: Middle District of Florida, Tampa Division

Debtors' Counsel: Don M. Stichter, Esq.
                   Stichter, Riedel, Blain & Prosser, P.A.
                   110 E. Madison St., #200
                   Tampa, FL 33602
                   Tel: 813-229-0144
                   Fax: 813-229-1811

Estimated Assets: $100,000 to $500,000

Estimated Debts: $100,000 to $500,000


DAISYTEK: Canadian Unit Unaffected by Bankruptcy; Ops. Normal
-------------------------------------------------------------
Daisytek Canada reports that Canadian operations continue to
remain unaffected by the May 7, 2003 filing of bankruptcy under
Chapter 11 of the United States Bankruptcy Code by U.S.-based
Daisytek, Inc. and its U.S. subsidiaries.

"Daisytek Canada is independently financed by Canadian bankers
and not by Daisytek, Inc.'s U.S. banking syndicate," stated
Peter Wharf, president, International division.

"More than 95% of Daisytek Canada's business is supported by
Canadian vendors, and vendors continue to supply Daisytek Canada
with product as required.  Staffing, product shipments,
inventory and fill rates remain at normal levels," said Alan
Miller, vice president of operations for Daisytek Canada.

"We continue to operate independently and conduct business as
usual, as we have done in Canada for more than 14 years," said
Suzanne Barrette, vice president of sales and marketing for
Daisytek Canada.  "I encourage our Canadian partners to call me
directly with any concerns they may have."

Daisytek is a global distributor of computer supplies, office
products and accessories and professional tape media.  Daisytek
is a registered trademark of Daisytek, Incorporated.  All rights
reserved.

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.


DELOACH WINERY: Files for Chapter 11 Protection to Reorganize
-------------------------------------------------------------
Santa Rosa, California-based DeLoach Vineyards, a family-owned
winery that launched its familiar label during the wine boom of
the 1970s and grew to national prominence, filed for chaper 11
bankruptcy protection on Tuesday after amassing debts of nearly
$30 million, reported the Press Democrat.

Winery owner Cecil DeLoach said he was forced to file bankruptcy
to stave off creditors until he reorganizes his finances.
Industry watchers said it could mark the beginning of
bankruptcies for other struggling wineries that ultimately will
lead to trouble for some growers, reported the online newspaper.

The winery's major creditor is Wells Fargo Business Credit,
which is owed $16 million. Other leading creditors include GE
Capital, owed $2.2 million, and a number of growers and wine
supply companies. DeLoach said his goals are to pay off all
debts by selling vineyard land and to keep the 28-year-old
winery in the family. Three generations of the DeLoach family
work at DeLoach Vineyards, the 15th-largest winery in Sonoma
County, reporting annual revenues of $16 million, reported the
Democrat. The bankruptcy filing lists assets valued at $27
million. DeLoach Vineyards is the third Sonoma County winery in
15 months to file for chapter 11 protection. In November, Sonoma
Creek Winery in Sonoma sought bankruptcy protection from
creditors, listing debts of $11.3 million and assets of $6.3
million. In February 2002, Buchanan Cellars, operating at the
old St. Francis Winery in Kenwood, filed bankruptcy. The
bankruptcies come amid a severe downturn in the California wine
industry caused by the sluggish economy, foreign competition and
an oversupply of wine and grapes -- hangovers from the planting
boom of the 1990s, reported the online newspaper. Other wineries
also are considering bankruptcy filings, said Michael Fallon, a
Santa Rosa bankruptcy attorney. (ABI World, May 21)


DVI RECEIVABLES: Fitch Rates $11 Million Class E Notes at BB
------------------------------------------------------------
Fitch rates DVI Receivables XIX L.L.C., series 2003-1
$71,810,000 class A-1 notes 'F1+'. In addition, Fitch rates the
$52,200,000 class A-2 notes and $261,620,000 class A-3 notes
'AAA'; $17,010,000 class B notes 'AA'; $14,740,000 class C notes
'A'; $11,340,000 class D notes 'BBB'; and $11,340,000 class E
notes 'BB'.

The 'AAA' rating on the aggregate $383,510,000 class A notes
reflects the 17.5% credit enhancement provided by the
subordination of the class B notes (3.75%), the class C notes
(3.25%), the class D notes (2.50%), the class E notes (2.50%),
the reserve account (2.50%), and the issuer's retained interest
(3%). The 'AA' rating on the class B notes reflects the 13.75%
credit enhancement provided by the class C notes, the class D
notes, the class E notes, the reserve account, and the issuer's
retained interest. The 'A' rating on the class C notes is based
on the 10.50% credit enhancement provided by the class D notes,
the class E notes, the reserve account, and the issuer's
retained interest. The 'BBB' rating on the class D notes
reflects the 8% credit enhancement provided by the class E
notes, the reserve account, and the issuer's retained interest.
The 'BB' rating on the class E notes reflects 5.50% credit
enhancement provided by the reserve account and the issuers
retained interest. The ratings address the payment of timely
interest and ultimate payment of principal.

Credit enhancement levels were sized to withstand Fitch's
expected loss rate stressed by a multiple appropriate for each
class of notes issued. Fitch's review also took into
consideration stressed recovery rates and recovery lags on
defaulted contracts and incorporated front-end, back-end, and
even loss timing scenarios. In addition, Fitch analyzed expected
top borrower concentrations upon closing as well as over the
life of the transaction at six-month intervals. Moreover, cash
flow break-even scenarios were run under various stress
assumptions and multiple timing scenarios. Fitch's analysis also
took into consideration the following:

-- Underwriting and servicing procedures of DVI Financial
    Services, Inc.;

-- Collateral pool diversification;

-- Historical performance of DVI FS's managed portfolio and
    previous securitizations; and,

-- Sound legal and payment structure of the transaction.

At closing, the reserve account was funded in an amount equal to
2.50% of the discounted present value of the leases. On an on-
going basis, the required reserve amount will equal the lesser
of: a) 2.50% of the discounted present value of the leases as of
the cut-off date, and, b) the outstanding principal amount of
the class A through E notes.

The reserve account and retained interest piece will be fully
locked out in the DVI Receivables XIX L.L.C., series 2003-1
transaction, identical to the DVI Receivables XVIII L.L.C,
Series 2002-2.

The collateral pool consists of 2,202 lease and loan contracts
secured by small, medium and large ticket medical equipment. The
contracts represent a statistical aggregate discounted contract
balance of $451,190,912 (the present value of the aggregated
contracts computed at a discount rate of 4.70%). The average
contract principal balance is approximately $204,901 and the
underlying obligors primarily include individual doctors,
hospitals, surgery centers and physician's groups.

As servicer, DVI FS has a number of responsibilities including
reviewing the contract files for completeness, as well as
monitoring and tracking to ensure that all necessary insurance
is in place and that all taxes are paid. DVI FS's additional
responsibilities include tracking billing and collections of
payment from obligors, depositing funds into the collection
accounts, providing periodic servicing reports and remarketing
and repossession of the underlying equipment. DVI FS engaged
U.S. Bank, N.A. to act as back-up servicer for the DVI
Receivables XIX L.L.C., series 2003-1 transaction.

Fitch has received true sale and non-consolidation opinions
stating that the transfer of the contracts and the equipment
from the seller to the SPC is a sale, not a pledge of assets. In
the event that DVI FS was to enter into bankruptcy, the transfer
of the assets to the SPC would not be in jeopardy.

DVI Receivables XIX L.L.C., series 2003-1, represents the first
DVI FS equipment lease securitization rated by Fitch in 2003.
Overall, Fitch has rated a total of 24 DVI FS securitizations.

The issuer, DVI Receivables XIX, L.L.C., is wholly owned by DVI
FS. In turn, DVI FS is a wholly owned subsidiary of DVI, Inc.


DYNEGY INC: Fitch Revises Lower-B Ratings Outlook to Stable
-----------------------------------------------------------
Ratings for Dynegy Holdings Inc., Dynegy Inc. and affiliated
companies, Illinois Power and Illinova Corp. have been affirmed
and removed from Rating Watch Negative by Fitch Ratings. They
were originally placed on Rating Watch Negative on Nov. 9, 2001.

The Rating Outlook for DYN and its affiliates is Stable. In
addition, Fitch has assigned a 'B+' rating to DYNH's secured
$1.1 billion revolving credit facility and $200 million term
loan A, both maturing on Feb. 15, 2005. Fitch has also assigned
a 'B' rating to its $360 million term loan B, maturing on Dec.
15, 2005. A complete listing of ratings is shown below.
The removal of the Negative Rating Watch status reflects the
lessening of near-term default risk as a result of several
favorable actions and events. On April 2, 2003, DYNH entered
into its new $1.66 billion secured bank credit facility. The
facility requires no scheduled amortization of principal and
should be adequate to fund ongoing collateral and operating
needs through 2004. In addition, the risk of a default and
resulting debt acceleration triggered by certain financial
covenants contained in the prior credit facilities and Polaris
lease has been eliminated. Other favorable recent events were:
the filing of audited financial statements for years 1999
through 2002 with material disclosures consistent with
expectations, the sale of DYN's U.S. communications business,
the reporting of stronger than anticipated operating results for
the first quarter of 2003, and the closing of an agreement with
Southern Co. to terminate three wholesale tolling arrangements
eliminating $1.7 billion of future capacity payments.

Current ratings at DYN reflect Fitch's latest assessment of the
company's overall credit profile and recognize the structural
subordination of unsecured lenders to its secured bank lenders
and project debt. The revolver and term loan A are secured by a
first priority interest in substantially all assets and stock of
DYNH and a second priority interest in the assets and stock of
DYN, including the stock of ILN. The term loan B is secured by a
first priority interest in the assets and stock of DYN and a
second priority interest in substantially all assets and stock
of DYNH. The new facilities are secured on a subordinated basis
to more than $1.8 billion of DYNH project debt. The one notch
separation between the bank facilities recognizes the expected
higher collateral coverage for the revolver and Term Loan A to
that for the term loan B.

The Stable Outlook status reflects the company's satisfactory
liquidity position and lessened near-term default risk. The
rating levels and outlook also recognize ongoing concerns
including, execution risk associated with the restructuring and
extension of $1.5 billion of preferred stock held by
ChevronTexaco that matures in November 2003, the significant
cash drain from five remaining wholesale tolling agreements and
the difficulty of terminating the agreements, the practical
limits of materially reducing debt levels through cash from
operations, and the negative overhang from ongoing government
investigations and litigation.

On a consolidated basis, DYN has about $8 billion of debt
obligations not counting the $1.5 billion of CVX preferred stock
and payment obligations under its remaining tolling agreements,
with a net present value of about $1.4 billion. Furthermore,
while recent efforts to eliminate third-party marketing and
trading activities has helped ease collateral requirements and
improve liquidity, the company must continue to provide
substantial amounts of collateral to support its generation and
midstream operations. The new bank facilities allow DYN limited
flexibility to repurchase outstanding debt. However, all
targeted large asset sales have been completed and equity
financing is not likely. Even under improved operating
conditions, cash flows from core operations remain weak relative
to its high debt burden and any financial recovery should be
gradual.

Consolidated liquidity at May 12, 2003, was nearly $1.8 billion.
Assuming a restructuring of the CVX preferred stock and given a
manageable maturity schedule, liquidity should be adequate for
DYN and its affiliates through 2004 even if IP's proposed sale
of its electric transmission system does not occur.

                     Ratings Actions

   DYN

      -- Indicative senior unsecured debt 'CCC+'.

   DYNH

     -- Secured revolving credit facility and term loan A 'B+';
     -- Secured term loan B 'B';
     -- Senior unsecured debt 'CCC+'.

   Dynegy Capital Trust I

     -- Trust preferred stock 'CC'.

   Illinois Power Co.

     -- Senior secured debt and pollution control bonds 'B';
     -- Indicative senior unsecured debt 'CCC+';
     -- Preferred stock 'CC'.

   Illinova Corp.

     -- Senior unsecured debt 'CCC+'.


EAGLE FOOD: Full-Year 2002 Net Loss Jumps Up to $18 Million
-----------------------------------------------------------
Eagle Food Centers, Inc. (OTC Bulletin Board: EGLE), which owns
and operates 60 supermarkets in Illinois and Iowa, reported
results of operations for its 2002 fiscal year, which ended
February 1, 2003.

Sales for the year were $599.5 million, a decrease of $30.9
million from fiscal 2001, due primarily to a challenging
competitive environment, to continued supercenter openings by
other operators, and to the closure and lease assignment of two
stores during fiscal 2002. Total sales and same-store sales each
declined 4.9% year over year. The Company was operating 62
stores as of the end fiscal 2002, compared with 64 as of the end
of fiscal 2001. These figures do not include sales from the two
stores that closed during fiscal 2002 or from two stores that
closed during the first quarter of fiscal 2003.

The Company reported a net loss of $17.8 million for fiscal
2002, compared with a net loss of $1.5 million a year earlier.
The increased loss for fiscal 2002 was due primarily to the
decrease in sales, an increase in health, welfare and wage
costs, and impairment of long-lived assets.

The Company had an operating loss of $6.4 million or 1.07% of
sales during fiscal 2002, compared with operating income of $8.0
million or 1.27% of sales in fiscal 2001. The decrease in
operating income for fiscal 2002 included a $12.7 million
reduction in gross margin and a $2.2 million charge for
impairment of assets, partially offset by a decrease of $1.2
million in depreciation and amortization expense.

Gross margin for fiscal 2002 was $165.7 million or 27.64% of
sales, compared with $178.5 million or 28.31% of sales a year
earlier. The decline was due primarily to lower sales, a
reduction in vendor funding, and the impact of lower gross
margins at eight Eagle Discount Foods stores that were converted
back to the Eagle Country Market format during the second
quarter of fiscal 2002. Selling, general and administrative
expenses for fiscal 2002 were $153.4 million or 25.58% of sales,
versus $153.1 million or 24.29% of sales a year earlier, due
primarily to additional health and welfare costs of $3.2
million, partially offset by a reduction in variable expenses
associated with the decline in sales.

As of February 1, 2003, the Company had $25.1 million in loans
against the Revolver and no letters of credit outstanding,
resulting in $1.5 million of excess availability, subject to the
conditions of a limited waiver under the Revolver. Working
capital on February 1, 2003 was negative $4.4 million, versus
$27.0 million on February 2, 2002. The decrease is due primarily
to classifying a Loan and Security Agreement as current in
fiscal 2002 compared with long-term in fiscal 2001. Capital
expenditures, including property held for resale, were $4.7
million for fiscal 2002 compared with $7.4 million for fiscal
2001. During fiscal 2002, five major remodels were completed,
and no major remodels were in progress at year-end.

During fiscal 2002, the Company adopted and implemented changes
in the method of valuing inventories, in accounting for certain
sales incentives and in accounting for impairment or disposal of
long-lived assets under certain circumstances. Financial
statements have been restated to reflect these changes. Further
details are provided in the Company's 10-K for fiscal 2002.

As previously reported, the Company filed a voluntary petition
under Chapter 11 of Title 11 of the United States Code on
April 7, 2003. The petition was filed in the United States
Bankruptcy Court for the Northern District of Illinois in
Chicago under case number 03-15299. In preparations for and
subsequent to the Chapter 11 filing, the Company, together with
its outside advisors, has identified certain strategic
alternatives to maximize value for its creditors. The Company,
in its business judgment, is evaluating all possible strategic
alternatives, including the possible sale of some or all of its
assets. While the case is pending, the Company continues to
manage its affairs and operate its business as a debtor-in-
possession. In conjunction with the Chapter 11 filing on
April 7, 2003, the Company received a commitment for $40 million
in debtor-in-possession (DIP) financing from Congress which the
bankruptcy court approved on an interim basis, with the final
DIP order approved on May 20, 2003.

The Company's common stock was delisted from the NASDAQ on March
27th, 2003 and currently trades on the OTC Bulletin Board under
the symbol EGLE.OB. At this time, it is not possible to predict
the effect of the Chapter 11 reorganization on our business,
various creditors and security holders or when we will be able
to exit Chapter 11.

Under the priority scheme established by the Bankruptcy Code,
certain post-petition liabilities and pre-petition liabilities
need to be satisfied before shareholders are entitled to receive
any distribution. The ultimate recovery to common shareholders,
if any, will not be determined until confirmation of a plan or
plans of reorganization. No assurance can be given as to what
values, if any, will be ascribed in the bankruptcy proceedings
to the common shareholders. A plan of reorganization could also
result in holders of the Company's common stock receiving no
value for their interests. Because of such possibilities, the
value of the common stock is highly speculative. Accordingly,
the Company urges that appropriate caution be exercised with
respect to existing and future investments in the securities.

Currently, the Board of Directors believes it is unlikely there
will be any recovery of value to common shareholders.

Eagle operates 59 Eagle County Markets and one Bogo's Food and
Deals. The Company employs approximately 3,550 people at its
stores and its headquarters and central distribution facilities
in Milan, Illinois.


ENCOMPASS: Court Okays Sale of Louisville Operations to Reliable
----------------------------------------------------------------
Encompass Services Corporation and its debtor-affiliates sought
and obtained the Court's authority to sell the Louisville,
Kentucky operations of Encompass Mechanical Services Southeast,
formerly known as Reliable Mechanical, Inc., to Reliable
Military Services LLC.

The Debtors will sell the Louisville, Kentucky operations free
and clear of liens, claims, encumbrances and other interests in
exchange for a $2,550,000 permanent working capital contribution
from Encompass Service Corporation plus any sums due from
Encompass pursuant to a Letter of Intent from Reliable Military
Services.  Reliable Military Services will also provide a
payment and performance bond covering the cost to complete on
all remaining jobs -- at the Debtors' expense of approximately
$170,000.  This bond is of material benefit to the Debtors as it
limits any further potential claims against their payment and
performance bonds, which are currently secured with cash
collateral and a letter of credit.  The majority of the
remaining work is bonded work.  Reliable Military Services will
assume certain liabilities at the time of the closing, including
certain prepetition liabilities.

Shane H. Newell, Esq., at Weil, Gotshal, & Manges, LLP, in
Houston, Texas, tells the Court that the value of the Debtors'
Louisville, Kentucky business diminishes daily through the loss
of key employees and customers and continuing delays in meeting
schedule obligations.  In smaller companies, the loss of even
one or two managers can be particularly difficult due to the
managers' influence throughout the organization.  In this
instance, the vast majority of the work to be completed is
located in Puerto Rico, where the availability of skilled
project managers is even more limited.

The Debtors believe that the Sale provides them the best
opportunity to preserve and maximize the value of their estates
for their creditors.  Mr. Newell explains that the aggregate
amount of accounts payable currently due on contracts Reliable
Military Services will assume exceeds $3,300,000, leaving a
number of jobs in a situation in which the amounts payable by
the Debtors to complete the jobs exceed their amounts
receivable.

Additionally, the vast majority of the jobs Reliable Military
Services will assume are bonded jobs, which the Debtors have
assumed in these Chapter 11 proceedings, and are located in
Puerto Rico.  Mr. Newell notes that the cost of "reletting" a
job in Puerto Rico is substantial -- 35% to 45% premium on the
cost to complete, or between $6,000,000 and $8,000,000 in this
case. In the event that the Debtors do not sell the assets of
Reliable Military Services, the cost of securing third parties
to complete the remaining work will be substantially greater
than the $2,550,000 working capital contribution they have
agreed to make.

"These costs will be claims against the Debtors' payment and
performance bonds and will result in administrative claims
against the Debtors' estates, to the extent not satisfied by the
Debtors' collateral currently held by the surety.  To the extent
that these claims are paid from such collateral, they will
reduce the value of the estate by reducing the collateral that
may ultimately be returned to the estate," Mr. Newell says.

                   Assignment of Contracts

Concurrent with the Sale, the Debtors will assume and assign
certain contracts with Automotive Rentals Inc., Ansley-Sheppard-
Burgess Company, Fisher Tank Co. related to their Louisville,
Kentucky business.

The assumption and assignment of the Automotive Rentals Lease
will include the Debtors' personal property tax obligations on
the vehicles.  With respect to the Ansley Contract, the Debtors
and Ansley reserve their rights to dispute the cure amount
resultant from the Assignment, pending further discussion and
investigation.

The Debtors and Fisher Tank agree to these cure amounts in
connection with the assignment of the Fisher Tank deal:

    -- $45,643 for the Mayport Replace Fuel Project; and

    -- $307,795 for the Pope AFB Contract.

The Debtors' contract with Dawson Land Development has been
completed and is not subject to assignment. (Encompass
Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


ESTERLINE: S&P Rates Corporate Credit at BB Due to Weak Market
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' corporate
credit rating to Esterline Technologies Corp. The outlook is
stable. At the same time, Standard & Poor's assigned its 'B+'
rating to Esterline's proposed $150 million senior subordinated
notes due 2013. The notes will be sold under SEC rule 144A with
registration rights.

"The ratings on Esterline Technologies Corp. reflect the
company's exposure to the weak commercial aerospace market and
its active acquisition program, offset somewhat by a diversified
revenue base and moderate debt leverage," said Standard & Poor's
credit analyst Christopher DeNicolo. Esterline plans to use a
portion of the proceeds from the subordinated notes issue to
purchase the Weston Group from British conglomerate Roxboro
Group PLC for $88 million, as well as pay off outstanding bank
debt and for general corporate purposes. Weston, which provides
sensors for turbine engines, will expand Esterline's revenues
from Rolls-Royce and Pratt & Whitney engines.

Bellevue, Washington-based Esterline designs and manufacturers
highly engineered products and systems for defense and aerospace
customers, as well as for general industrial applications.
Products include lighted switches and displays for commercial
and military aircraft, temperature and pressure sensors for
engines, and electronic countermeasures.

Incremental revenues from acquisitions and higher military sales
have offset lower revenues due to the weak commercial aircraft
market. The company's Avionics & Controls unit (approximately
35% of revenues pro forma for the Weston acquisition) produces
technology interface systems, lighted switches, displays and
control products for commercial and military aircraft. Sensors &
Systems (28%) provides temperature and pressure sensors for
aircraft turbine engines, fluid regulation systems, and motion
control components. The acquisition of Weston will increase
revenues in this segment by almost 50%. Advanced Materials (37%)
produces high-performance silicone elastomer products,
electronic warfare countermeasure products (chaff & flares), and
combustible ordnance. Esterline's revenue base is fairly
balanced between commercial aerospace (40% of 2002 revenues),
military (40%), and industrial markets (20%). Esterline's
products are used on a wide range of commercial and military
aircraft, with no one aircraft type accounting for more than 5%
of revenues.

The company's diversified and balanced revenue base should
enable it to maintain solid profitability despite the weak
commercial aerospace market. Although acquisitive, management is
expected to maintain leverage appropriate for current ratings.


FIBERCORE INC: March 31 Working Capital Deficit Widens to $37MM
---------------------------------------------------------------
FiberCore, Inc. (Nasdaq: FBCEE), a leading manufacturer and
global supplier of optical fiber and preform for the
telecommunication and data communications markets, announced
results for the first quarter ended March 31, 2003.

The Company filed its annual report on Form 10-K with the SEC
late due to delays in finalizing the results from its foreign
subsidiaries that also carried over to its first quarter filing
as well. The initial late filing resulted in the Company being
notified on April 17 that it would be delisted from the Nasdaq
SmallCap Market effective April 28, 2003 as further discussed in
the Company's earlier release of April 23, 2003. The delisting
action has been deferred pending a hearing that the Company
requested which will be held today. The Company received an
opinion from its auditors, Deloitte & Touche LLP, in its Annual
Report that questioned the Company's ability to continue as a
going concern and that situation remains unchanged. The Company
is actively pursuing additional financing, debt restructuring
and further cost reductions to improve its liquidity situation.
The Company must raise approximately $5 million in additional
financing soon and/or restructure some of its obligations to
address its liquidity crisis. The Company is also attempting to
renegotiate the terms on approximately $18 million in short-term
debt and notes payable.

Sales in the first quarter of 2003 decreased by 42% to $4.6
million from $7.9 million in the first quarter of 2002 and
decreased by 12% from fourth quarter levels. Sales continue to
be negatively impacted by a lack of shipments in South America,
which is primarily a single-mode market. Overall, single-mode
sales were down substantially in all regions. Multimode volume
increased although multimode sales dollars decreased by
approximately 10% as a result of pricing declines. Pricing
declines accounted for almost all of the sales reduction, while
a slight decline in fiber volume was offset by an increase in
preform shipments.

Gross profit (loss) in the quarter was $(848,000), or (18%) of
sales for the first quarter of 2003 compared to a gross profit
of $(185,000), or (2%) of sales, in the first quarter of 2002.
FiberCore's gross margin was severely impacted by continuing
price declines, lower production levels, and lower than normal
yields at its German operation during January and February.
Gross margins improved significantly in March in Germany on the
strength of a 50% increase in sales dollars over January and
February levels. The POVD technology, which is expected to lower
costs further, has not yet been implemented due to delays in
financing.

SG&A costs decreased by 29% to $1,861,000 in the first quarter
from $2,612,000 in the first quarter of 2002 as a result of cost
savings measures implemented during 2002 at all locations. The
Company continues to focus on cost savings in SG&A.

R&D spending decreased by 25% to $363,000 in the first quarter
from $484,000 in the first quarter of 2002. The Company
continues the development of its patented Plasma Outside Vapor
Deposition process as well as other manufacturing initiatives,
which are all intended to reduce production costs. Higher
interest expenses in the quarter were primarily a result of the
higher debt incurred during 2002 associated with Company's
expansion program in Germany.

The loss from operations in the first quarter of 2003 was
approximately $3.1 million compared to a loss from operations of
approximately $3.3 million in the first quarter of 2002. The
improved loss from operations was accomplished despite a
significantly reduced sales level (down 42%) due primarily to
lower pricing.

FiberCore reported a net loss of $4.0 million in the first
quarter of 2003. In the first quarter of 2002, the net loss was
approximately $4.1 million.

At March 31, 2003, FiberCore's balance sheet shows that its
total current liabilities outweighed its total current assets by
about $37 million. Its total shareholders' equity narrowed to
about $900,000 from about $4.4 million three months ago.

Dr. Aslami, President and CEO commented, "The first quarter of
the year continued the difficult trends in the fiber optics
market that we have experienced since the middle of 2001. We
continue to see volume and revenue gains in our multimode
business, although obviously at lower prices. This is certainly
a positive for us, but is not sufficient to offset the serious
declines we have seen in the much larger single-mode market."

"As I mentioned in discussing our results for 2002, we are
focused on addressing our current liquidity difficulties. While
I cannot make any assurances, we are in ongoing discussions with
several groups to provide funding to the Company in the near-
term, including negotiating the terms of the investments. We are
also working to restructure our debt obligations to provide more
time and allow the Company to meet its obligations when the
industry recovers. If we can resolve these issues, we believe we
are well positioned for the industry's recovery when it does
occur, as our focus is primarily on feeder loop, premise, and
the 'last mile' applications, which are expected to lead the
recovery in the optical fiber markets," added Dr. Aslami.

FiberCore, Inc. develops, manufactures, and markets single-mode
and multimode optical fiber preforms and optical fiber for the
telecommunications and data communications markets. In addition
to its standard multimode and single-mode fiber, FiberCore also
offers various grades of fiber for use in laser-based systems up
to 10 gigabits/sec, to help guarantee high bandwidths and to
suit the needs of Feeder Loop (also known as Metropolitan Area
Network), Fiber-to-the Curb, Fiber-to-the Home and Fiber-to-the
Desk applications. Manufacturing facilities are presently
located in Jena, Germany and Campinas, Brazil.

For more information about the company, its products, or
shareholder information please visit http://www.FiberCoreUSA.com


FINANCIAL BENEFIT: AM Best Affirms B+ Financial Strength Ratings
----------------------------------------------------------------
A.M. Best Co., has assigned a "bbb" rating to the $125 million
6.25% senior unsecured notes to be issued by AmerUs Group Co.
(NYSE:AMH) (Des Moines, IA) as part of its PRIDES(SM)
mandatorily convertible securities offering.

Concurrently, the financial strength rating of A (Excellent) on
AmerUs Group's core life insurance subsidiaries has been
affirmed. In addition, AmerUs Group's existing debt ratings have
been adjusted downward one notch to more precisely reflect the
relative degree of risk between policyholders and creditors of
the holding company. All ratings have a negative outlook.

Initially, the PRIDES will consist of a stock purchase contract
under which investors are obligated to purchase AmerUs Group's
common stock in three years and a senior note with a stated
maturity of at least 4.75 years. The notes are pledged to AmerUs
Group to secure the holders' obligations under the purchase
contract and rank equally with all of the company's senior
unsecured obligations. Although interest payments on the senior
notes may not be deferred, under certain circumstances the
interest rate will be reset and the maturity date may be
extended by AmerUs Group.

A.M. Best expects AmerUs Group to use the majority of the net
proceeds from the offering to pay down outstanding bank debt,
and views this as a positive step towards a more permanent
capital structure, which slightly enhances AmerUs Group's
financial flexibility. Any remaining proceeds are likely to be
contributed to its insurance operations or used for general
corporate purposes. The impact of the PRIDES issuance on AmerUs
Group's financial leverage and fixed charge coverage is
negligible. A.M. Best expects AmerUs Group to maintain a total
debt to capital ratio--including preferreds--of approximately
30% in the near to medium term.

The ratings reflect AmerUs Group's solid earnings, diversified
product portfolio, expanding distribution, sophisticated
asset/liability management and established positions in its core
businesses. AmerUs Group's life and annuity businesses have
produced steady earnings, which are more than sufficient to
cover fixed charges. A significant portion of earnings is
generated from its stable block of individual life insurance,
which has experienced favorable mortality and persistency. In
addition, A.M. Best believes operating results from AmerUs
Group's annuity businesses are sustainable due to expansion of
controlled distribution, significant conservation efforts,
expense efficiencies and maintenance of spreads. Going forward,
AmerUs Group's solid operating performance should continue,
facilitated by the shift of its liabilities towards equity-
indexed products--which have higher profit margins than
traditional fixed offerings-and by the aggressive crediting rate
actions taken during 2002.

The AmerUs Group's solid operating performance and business
profile are partially offset by its low risk-adjusted
capitalization relative to similarly-rated peers. Over the last
two years, AmerUs Group experienced significant realized losses
in its bond portfolio due to overall credit deterioration and
notable exposure to companies involved in fraud scandals.
Despite modest improvement in the credit markets, A.M. Best
remains concerned about AmerUs Group's exposure to below-
investment-grade bonds given its aggressive capital position
coupled with moderate financial leverage at the holding company.

Although substantial progress has been made to date, the company
will be challenged to fully realize its growth and expense
reduction objectives with regard to the integration of the
Indianapolis Life companies, which were acquired via sponsored
demutualization in May 2001. Moreover, AmerUs Group will be
challenged to maintain its targeted fixed annuity spreads in a
low interest rate, highly-competitive, weak credit environment.
The company has recently experienced some spread compression, as
it competes against more sizable competitors with strong
franchises, diverse resources and more conservative
capitalization. Due to these various challenges, a negative
outlook has been assigned to all the ratings.

Additionally, A.M. Best has downgraded the financial strength
rating to A- (Excellent) from A (Excellent) of IL Annuity and
Insurance Company, and has affirmed the financial strength
rating of B+ (Very Good) of Financial Benefit Life Insurance
Company (both of Kansas).

For a complete listing of the AmerUs Group's debt and financial
strength ratings, please visit:

         http://www.ambest.com/press/052201amerus.pdf

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


FLEMING: Wins Interim Approval to Preserve Net Operating Losses
---------------------------------------------------------------
Fleming Companies, Inc., announced that on May 19, 2003, the
U.S. Bankruptcy Court for the District of Delaware granted a
motion, and on May 20, 2003 entered an order on the docket,
intended to assist the company in preserving its historical net
operating losses by prohibiting certain transfers of equity
securities in the company and its subsidiaries. If preserved,
these NOLs constitute a tax benefit for the company. The order
will remain in effect until the Bankruptcy Court holds a hearing
to consider the appropriateness of the relief on a final basis.
A hearing is currently set for June 4, 2003.

In general, the NOL order applies to any person or entity that,
directly or indirectly, beneficially owns (or would beneficially
own as the result of a proposed transfer) equity securities of
the company and its subsidiaries with an aggregate fair market
value equal to or greater than five percent of the fair market
value of the company's common stock. Pursuant to the NOL order,
any purchase, sale or other transfer of equity securities in the
company and its subsidiaries in violation thereof will be null
and void.

For more detailed information, please read the NOL order in its
entirety as attached to the Current Report on Form 8-K to be
filed with the Securities and Exchange Commission.

Fleming Companies, Inc. and its operating subsidiaries filed
voluntary petitions for reorganization under Chapter 11 of the
U.S. Bankruptcy Code on April 1, 2003. The filings were made in
the U.S. Bankruptcy Court in Wilmington, Delaware. The case has
been assigned to the Honorable Judge Mary F. Walrath under case
number 03-10945 (MFW) (Jointly Administered). Fleming's court
filings are available via the court's Web site at
http://www.deb.uscourts.gov

Fleming (OTC Pink Sheets: FLMIQ) is a leading supplier of
consumer package goods to independent supermarkets, convenience-
oriented retailers and other retail formats around the country.
To learn more about Fleming, visit its Web site at
http://www.fleming.com


GAP INC: First Quarter Earnings Results Reflect Strong Growth
-------------------------------------------------------------
Gap Inc. (NYSE:GPS) reported significant sales and earnings
growth for the first quarter as customers responded positively
to improved product, marketing and customer service initiatives,
particularly at the company's Gap and Old Navy brands.
Earnings for the first quarter were $0.22 per diluted share,
compared with $0.04 per diluted share for the same period of the
prior year. Net income was $202 million, compared with $37
million the prior year.

Net sales for the first quarter, which ended on May 3, 2003,
increased 16 percent to $3.4 billion, compared with $2.9 billion
for the first quarter last year. Comparable store sales
increased 12 percent, compared with a decrease of 17 percent
during the first quarter of the prior year.

"I am extremely proud of what our teams accomplished in the
first quarter as we continue our turnaround, build momentum and
more consistently meet and exceed our customers' expectations,"
said Gap Inc. President and CEO Paul Pressler. "Strong product
assortments with more brand-appropriate styles and color
palettes, more effective marketing, and improved service in our
stores clearly helped us gain traction and deliver quality
earnings."

This quarter marks the company's third consecutive quarter of
earnings growth. The company also has reported seven consecutive
months of positive comparable store sales results.

Store Sales Results By Division

The company's first quarter comparable store sales by division
were as follows:

-- Gap U.S.: positive 12 percent versus negative 20 percent last
    year

-- Gap International: positive 13 percent versus negative 19
    percent last year

-- Banana Republic: positive 1 percent versus negative 9 percent
    last year

-- Old Navy: positive 16 percent versus negative 18 percent last
    year

Net sales for the first quarter in each division were as
follows:

-- Gap U.S.: $1.2 billion versus $1.0 billion last year

-- Gap International: $412 million versus $319 million last year

-- Banana Republic: $411 million versus $398 million last year

-- Old Navy: $1.4 billion versus $1.1 billion last year

                        Real Estate Outlook

For the first quarter, Gap Inc. increased net square footage by
1 percent from the same period in 2002. The company reiterated
its guidance for 2003 of an expected 2 percent decline in square
footage for the full fiscal year.

Gap brand stores are reported based on concepts and locations.
Any Gap Adult, GapKids, babyGap or GapBody that meets a certain
square footage threshold has been counted as a store concept,
even when residing within a single physical location that may
have other concepts.

As reported in Troubled Company Reporter's May 6, 2003 edition,
The Gap, Inc.'s 'BB-' rated senior unsecured debt was affirmed
by Fitch Ratings. Approximately $2.9 billion in debt was
affected by this action. The Rating Outlook remains Negative,
reflecting uncertainty as to the sustainability of Gap's recent
comparable store sales growth.

The rating reflects the long-term weakness in Gap's sales which
has put pressure on the company's operating and financial
profile. In addition, the competitive operating and weak
economic environment may delay the company's ability to improve
its performance. However, the rating also factors in Gap's brand
position, solid free cash flow due to curtailment in capital
expenditures and strong liquidity.


GEORGIA-PACIFIC: Caps Price of $500 Mill. Senior Notes Offering
---------------------------------------------------------------
Georgia-Pacific Corp. (NYSE: GP) priced its $500 million senior
notes offering, consisting of $350 million of 7.375 percent
senior notes due 2008 and $150 million of 8 percent senior notes
due 2014.  The 8 percent senior notes due 2014 will be callable
at the company's option beginning in 2008.  The company expects
to close the offering on or about June 3, 2003. Georgia-Pacific
intends to use the net proceeds from the offering to repay a
portion of amounts outstanding under its revolving credit
facility.

These senior notes were offered in an unregistered offering
pursuant to Rule 144A and Regulation S under the Securities Act
of 1933.  The senior notes will not be registered under the
Securities Act of 1933 or the securities laws of any state, and
may not be offered or sold in the United States or outside the
United States absent registration or an applicable exemption
from the registration requirements under the Securities Act and
any applicable state securities laws.  Georgia-Pacific intends
to offer to exchange the unregistered senior notes for
substantially identical registered senior notes following the
completion of the offering.

Headquartered at Atlanta, Georgia-Pacific is one of the world's
leading manufacturers of tissue, packaging, paper, building
products, pulp and related chemicals.  With 2002 annual sales of
more than $23 billion, the company employs approximately 65,000
people at 400 locations in North America and Europe.  Its
familiar consumer tissue brands include Quilted Northern(R),
Angel Soft(R), Brawny(R), Sparkle(R), Soft 'n Gentle(R), Mardi
Gras(R), So-Dri(R), Green Forest(R) and Vanity Fair(R), as well
as the Dixie(R) brand of disposable cups, plates and cutlery.
Georgia-Pacific's building products distribution segment has
long been among the nation's leading wholesale suppliers of
building products to lumber and building materials dealers and
large do-it-yourself warehouse retailers.  For more information,
visit http://www.gp.com

As reported in the Troubled Company Reporter's January 31, 2003
edition, Fitch Ratings lowered the senior unsecured long-
term debt ratings of Georgia-Pacific to 'BB' from 'BB+' and
withdrawn the company's commercial paper rating. The Rating
Outlook remains Negative. The 'BB' rating applies to the
company's issues of 8-7/8% due 2010 and 9-3/8% due 2013.

This rating action was based on the continuing poor market
conditions prevailing in the company's Building Products
segment, an uncertain outlook for containerboard and packaging
and the competitive environment in retail tissue. In combination
with ongoing asbestos exposure and a low probability of
immediate asset sales, Fitch believed the company's
de-leveraging efforts have been pushed back.


GILAT SATELLITE: Completed Debt Workout Enhances Balance Sheet
--------------------------------------------------------------
Gilat Satellite Networks Ltd. (Nasdaq: GILTF), a worldwide
leader in satellite networking technology, reported its results
for the quarter ended March 31, 2003.

Revenues were US$51.1 million for the first quarter of 2003.
Operating loss for the first quarter was US$25.2 million and net
income was US$150.2 million or US$2.20 per share, mostly due to
a US$181.1 million gain and US$5.7 million in tax expenses
relating to the Company's recently completed debt restructuring.

The Company improved its total cash balance by US$1.1 million in
the quarter, bringing its total cash balance (including cash and
cash equivalents, short term bank deposits, short and long term
restricted cash less short term bank credits) to US$71.9 million
as of the quarter's end. In addition to this cash balance, the
Company reported an additional US$18.6 million of restricted
cash held by trustees emanating from the Compartel agreement in
Colombia, announced in the fourth quarter of 2002.

Gilat Satellite's March 31, 2003 balance sheet shows an
accumulated deficit of about $630 million, down from about $782
million (December 31, 2002), while total shareholders' equity
entered the positive territory at about $31 million, from a
staggering deficit of about $173 million three months ago.

The Company also announced that its Spacenet subsidiary has
signed several new agreements including with Beall's Outlet
retail stores, restaurant franchisees Valenti Management and
Bartlett Management Services, Rare Hospitality International
(restaurants), the completion of a 6,000-site deployment for
retailer Dollar General and the renewal of its contract with Bob
Evans restaurants until 2008.

Gilat announces several new contracts with its Spacenet
subsidiary and major agreement in Russia

-- Spacenet has been chosen to provide a satellite-based
    broadband data network to a minimum of 300 Beall's Outlet
    retail stores, with the potential to grow to 600 locations.
    Beall's, which currently maintains a terrestrial Frame Relay
    network to interconnect its stores, estimates that it will
    achieve substantial savings in monthly per-site network
    service costs by switching to the Spacenet VSAT network. The
    five-year agreement calls for Spacenet to deploy VSAT
    terminals at Beall's Outlet locations across the Southeastern
    US.

-- Spacenet has been chosen by leading restaurant franchisees
    Valenti Management and Bartlett Management Services to
    provide a broadband satellite network for 150 Wendy's and KFC
    restaurants in the Eastern and Central US. Spacenet's VSAT
    network will be used to support the Valenti and Bartlett
    critical back-office applications, store polling and credit
    authorization connectivity requirements.

-- Spacenet signed an agreement with RARE Hospitality
    International Inc. to deploy the Company's Connexstar
    broadband service at 200 RARE Hospitality restaurant
    locations. Deployment of Spacenet's Connexstar 500 service is
    expected to begin immediately at LongHorn Steakhouse and
    Bugaboo Creek Steakhouse restaurants across the country.

-- Spacenet announced that it has completed the deployment of
    Dollar General's 6,000th store location. Dollar General
    expects to open approximately 650 new stores in the coming
    year, and plans to deploy Spacenet VSATs at each new store as
    they are opened. Dollar General contracted with Spacenet in
    March 2001 to provide always-on broadband connectivity to
    support its POS and back-office applications. At that time,
    Dollar General had approximately 4,900 stores and was just
    beginning the deployment of new POS systems and applications.
    Since then, Dollar General has grown to more than 6,000
    stores, and has deployed a suite of new applications.

-- In addition, Spacenet signed a contract extension with Bob
    Evans Farms Inc. to continue provision of VSAT broadband
    service to Bob Evans' stores until 2008. Spacenet's
    Connexstar Enterprise service, initially deployed in August
    2000 at 427 Bob Evans Farms locations, has since grown to
    encompass 518 locations. The Spacenet network supports a
    variety of critical applications for Bob Evans Farms
    locations, including point-of-sale polling, credit card
    authorization and back office/groupware applications.

-- Last week, Gilat announced that it has signed an agreement
    with the Russian Satellite Communications Company (RSCC) and
    the gaming company, Jackpot, to deploy a Skystar 360E hub and
    VSAT network with 500 sites throughout the Russian
    Federation. RSCC is Russia's largest satellite operator, with
    ownership of all Russian satellites. The project allows for
    network-wide gambling for Jackpot customers at the gaming
    sites on-line, as well as an independent network for data
    transfer within the Jackpot organization.

Gilat Satellite Networks Ltd., with its global subsidiaries
Spacenet Inc., Gilat Latin America, Inc. and rStar Corporation,
is a leading provider of telecommunications solutions based on
Very Small Aperture Terminal satellite network technology --
with nearly 400,000 VSATs shipped worldwide. Gilat markets the
Skystar Advantage, DialAw@y IP, FaraWay, Skystar 360E and
SkyBlaster* 360 VSAT products in more than 70 countries around
the world. The Company provides satellite-based, end-to-end
enterprise networking and rural telephony solutions to customers
across six continents, and markets interactive broadband data
services. The Company is a joint venture partner in SATLYNX, a
provider of two-way satellite broadband services in Europe with
SES GLOBAL. Skystar Advantage(R), DialAw@y IP(TM) and
FaraWay(TM) are trademarks or registered trademarks of Gilat
Satellite Networks Ltd. or its subsidiaries. Visit Gilat at
http://www.gilat.com (*SkyBlaster is marketed in the United
States by StarBand Communications Inc. under its own brand
name.)


GLOBAL CROSSING: Court Approves Settlement Pact with Worldcom
-------------------------------------------------------------
Global Crossing Ltd., and its debtor-affiliates sought and
obtained Court approval of their settlement agreement with
WorldCom, Inc. and certain of its affiliates.  The GX Debtors
also seek to assume certain executory contracts with the
WorldCom Entities and to pay the WorldCom Entities the cure
amount set forth in the Settlement Agreement.

In the Settlement Agreement, the Debtors resolved unsecured,
prepetition claims asserted by the WorldCom Entities amounting
to $26,500,000, for $9,100,000, which is the cure amount agreed
to between the Debtors and the WorldCom Entities, and also
constitutes the agreed amount that will be paid on account of
all of the prepetition claims asserted by the WorldCom Entities.
The payment of the cure amount will be made through:

   a. $2,275,000 initial payment within five business days of
      the effective date of Debtors' plan of reorganization; and

   b. the balance of the cure payments paid in 12 equal and
      consecutive monthly installments with the first installment
      payment due on the first day of the month immediately
      following the month in which the effective date of the plan
      occurs.

The settlement also provides that for a period of 12 months from
the effective date of the Plan, the Debtors will pay WorldCom
within 14 days of the receipt of invoice for services rendered.
The settlement includes mutual release of all prepetition claims
between the parties.

Under the Settlement Agreement, the Debtors and WorldCom
Entities also agree to release any and all prepetition claims
against each other.  This release dispels the threat of
potential litigation and allows the parties to resume a normal
business relationship. (Global Crossing Bankruptcy News, Issue
No. 40; Bankruptcy Creditors' Service, Inc., 609/392-0900)


GLOBAL CROSSING: Introduces Feature-Rich IP VPN Service(TM)
-----------------------------------------------------------
Furthering its industry lead in worldwide Multi-Protocol Label
Switching innovation, Global Crossing announced Global Crossing
IP VPN Service(TM), a feature-rich IP VPN (Internet Protocol
Virtual Private Network) solution that offers enterprises and
carriers worldwide three classes of service and multiple access
options. The highly secure platform provides a roadmap for the
convergence of site-to-site voice, video and data traffic into a
single connection.

"This service brings to fruition the promise of Global
Crossing's worldwide IP network," said Global Crossing CEO John
Legere. "The future of telecommunications is being built upon
global IP-based network connectivity and applications converged
into a single access point -- areas where Global Crossing is a
clear leader."

Available today in more than 300 cities in 52 countries through
extended reach relationships, the service represents product
development that delivers on Global Crossing's vision of a
global "any-to-any" interconnectivity solution: anytime,
anywhere, through multiple access across Global Crossing's MPLS
over DWDM technology.

"Global Crossing IP VPN Service is writing the next chapter in
global network connectivity," said Global Crossing's senior vice
president of offer and product management, Anthony Christie.
"It's no longer about choosing between networking technologies,
such as frame relay or ATM or MPLS. It's about lowering
networking risk and offering the choice to use a solution that
best fits an application or business need."

                   Multiple Classes of Service

Global Crossing IP VPN Service offers multiple Classes of
Service and differentiated Quality of Service using MPLS
directly over Dense Wavelength Division Multiplexing. MPLS
technology speeds the flow of data by adding a series of labels
and delivering data packets across a pre- determined path.

With three classes of service over true IP-enabled MPLS core --
Basic, Enhanced or Premium -- enterprises gain unprecedented
choice for the transmission of their data traffic based on
application and traffic usage requirements. Basic service is
ideal for common service applications such as e-mail and file
transfers. Enhanced service is recommended for data delivery
applications to minimize packet loss. Premium service is
intended for real- time applications such as voice and video
conferencing where jitter must be tightly controlled. Each class
of service is backed by Service Level Agreements that include
latency, packet loss, jitter and availability depending on class
of service ordered.

"We found Global Crossing IP VPN Service to be an excellent
solution for centralizing our data centers," said Kevin
O'Connor, IT manager at Akin Gump, a large law firm based in
Washington, D.C. "We consolidated traffic across 15 offices
throughout the U.S. and reduced 15 data centers to two. It was
Global Crossing's MPLS IP VPN backbone that helped us achieve
consolidation as well as the logistical network proficiencies of
an IP-based network."

In addition, Global Crossing IP VPN Service provides users with
integrated Layer-2 and Layer-3 capabilities supporting High
Level Data Link Control, Point-to-Point Protocol, frame relay,
ATM and Ethernet encapsulations. Global Crossing IP VPN Service
can be combined with the Global Crossing Remote Access Service
using the tunnel or gateway reservation model, single loop
Dedicated Internet Access or Secure Internet Access to deliver a
highly scalable, multiple-connection IP VPN network. The network
supports the ability to exchange routes using popular protocols
and methods such as Open Shortest Path First, Routing
Information Protocol, Border Gateway Protocol (BGP) and static
over connections at speeds from 64 Kbps up to OC48/STM 16.

Furthermore, with the addition of uCommand(R), Global Crossing's
secure, private Web-based network management tool, customers can
monitor their VPN network usage by CoS; monitor in monthly,
daily, hourly or five-minute intervals; create reports by total,
peak, and average utilization; reroute traffic; order new
services; and create and track trouble tickets and bill payment.
Multiple network services can be supported through this single
online tool.

"With this addition to the Global Crossing IP VPN service
portfolio, customers stand to benefit from the flexibility of an
integrated service platform leveraging MPLS technology," said
Nick Maynard, Senior Analyst at The Yankee Group. "This IP VPN
offering is a clear indicator that Global Crossing continues to
enhance their enterprise services as a next-generation global
service provider."

                   The Evolution of an IP VPN

In October 2001, Global Crossing released VPN services in two
variations, SmartRoute IP VPN(TM), an IPSec-based VPN, and
ExpressRoute IP VPN(TM), an IP VPN based on MPLS technology.
These VPNs, along with VPN enterprise solutions deployed in the
United Kingdom, were designed to meet the needs of global
enterprises and carriers respectively.

Global Crossing IP VPN Service brings together all of the best
VPN features once offered exclusively through Global Crossing's
SmartRoute and ExpressRoute network solutions and unifies them
in a single platform that extends worldwide. The new global
platform will also interconnect with the Data Link Direct IP VPN
customers in the UK and the Global Financial Markets Extranet IP
VPN platforms.

"Clearly, we have adapted our IP VPN solutions to the business
and usage needs of our customers by providing them with an
unmatched customer experience in the industry," added Anthony
Christie. "We're proud to report that we're already generating
more than $100 million annually in our portfolio of IP services
worldwide, and we anticipate a dramatic increase in the number
of customers who want to leverage this type of service in the
future."

                       Business Continuity

Depending on networking application and business needs, Global
Crossing IP VPN Service provides the logical migration path for
enterprises using Global Crossing frame relay, ATM, or private
line networks to an MPLS IP-based network without interruption.

Additionally, the service is well suited for enterprise business
continuity planning as a reliable, secure backup to other WAN
connections.

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.


GRUPO IUSACELL: Secures Waiver of Defaults Under Credit Pact
------------------------------------------------------------
Grupo Iusacell, S.A. de C.V. (BMV:CEL)(NYSE:CEL) announced that
as part of its debt restructuring effort, its subsidiary, Grupo
Iusacell Celular, S.A. de C.V., in cooperation with its Senior
Syndicated lender group, has received an extension of its
temporary Amendment and Waiver of certain provisions and
technical defaults under its US$266 million Amended and Restated
Credit Agreement, dated as of March 29, 2001. The Amendment was
originally scheduled to expire on May 22, 2003.

The Amendment, as extended, is scheduled to expire on June 13,
2003, subject to earlier termination in certain circumstances,
no other provisions were amended and provides the Company with
additional time to continue working together with its financial
advisors Morgan Stanley towards the formulation of a consensual
and comprehensive restructuring plan.

If the Amendment is not further extended, upon its expiration,
Iusacell Celular would be in default of a financial ratio under
the Credit Agreement which would constitute an Event of Default
thereunder as if the Amendment had not been granted.

Grupo Iusacell, S.A. de C.V. (Iusacell, NYSE:CEL; BMV:CEL) is a
wireless cellular and PCS service provider in seven of Mexico's
nine regions, including Mexico City, Guadalajara, Monterrey,
Tijuana, Acapulco, Puebla, Leon and Merida. The Company's
service regions encompass a total of approximately 92 million
POPs, representing approximately 90% of the country's total
population.

Iusacell is under the management and operating control of
subsidiaries of Verizon Communications Inc. (NYSE:VZ).


HALSEY PHARMACEUTICALS: Jerry Karabelas Appointed Board Chairman
----------------------------------------------------------------
Halsey Pharmaceuticals (OTC.BB: HDGC) announced that Jerry
Karabelas, a Director of the Company since December 2002, has
been appointed Chairman of the Board.

In this capacity, Mr. Karabelas will oversee the overall
strategy and direction of the Company.

Mr. Karabelas was Head of Healthcare and CEO of Worldwide
Pharmaceuticals for Novartis AG from 1998 until July 2000. Prior
to joining Novartis, Mr. Karabelas was Executive Vice President
of SmithKline Beecham. From July 2000 until December 2001, Mr.
Karabelas was the Founder and Chairman of the Novartis Bio
Venture Fund. Since November 2001 he has been a Partner with
Care Capital LLC., a current investor in Halsey. Mr. Karabelas
holds a Ph.D. in pharmacokinetics from the Massachusetts College
of Pharmacy and serves as a Director of SkyePharma Plc., Human
Genome Sciences, Nitromed, Anadys, Vanda Pharmaceuticals and
Renovo.

Mr. Karabelas replaces Michael K. Reicher who is retiring and
will assist in the transition. The Company will begin a search
immediately to find a new Chief Executive Officer.

Regarding Mr. Reicher, Mr. Karabelas said, "Mike was
instrumental in bringing Halsey from near bankruptcy five years
ago to where it is today, poised to provide unique products to
the pain management market. The strategy begun under his
leadership to become a vertically integrated manufacturer of
pain management products utilizing proprietary processes will
continue."

Halsey Pharmaceuticals, together with its subsidiaries, is an
emerging pharmaceutical company specializing in innovative drug
development.

At December 31, 2002, the Company's balance sheet shows a total
shareholders' equity deficit of about $12 million.


HAWK CORPORATION: Shareholders Re-Elect Board of Directors
----------------------------------------------------------
Hawk Corporation (NYSE: HWK) announced that Andrew T. Berlin,
Paul R. Bishop, Norman C. Harbert, Byron S. Krantz, Jack Kemp,
Dan T. Moore, III and Ronald E. Weinberg were all re-elected to
its Board of Directors at Hawk's annual meeting of stockholders.

Hawk Corporation -- whose Corporate Credit Rating has been
upgrade by Standard & Poor's to 'single-B' -- is a leading
worldwide supplier of highly engineered products. Its friction
products group is a leading supplier of friction materials for
brakes, clutches and transmissions used in airplanes, trucks,
construction equipment, farm equipment and recreational
vehicles.  Through its precision components group, the Company
is a leading supplier of powder metal and metal injected molded
components for industrial applications, including pump, motor
and transmission elements, gears, pistons and anti-lock sensor
rings.  The Company's performance automotive group manufactures
clutches and gearboxes for motorsport applications and
performance automotive markets.  The Company's motor group
designs and manufactures die-cast aluminum rotors for fractional
and subfractional electric motors used in appliances, business
equipment and HVAC systems.  Headquartered in Cleveland, Ohio,
Hawk has approximately 1,700 employees and 16 manufacturing
sites in five countries.

Hawk Corporation is online at: http://www.hawkcorp.com


HAYES LEMMERZ: Inks Pact to Sell $250 Mill. of Sr. Unsec. Notes
---------------------------------------------------------------
Hayes Lemmerz International, Inc. (OTC: HLMMQ) has entered into
an agreement for the sale of $250 million of senior unsecured
notes. The notes have a maturity of 7 years and a 10-1/2%
coupon.

The Company expects to complete the sale of the notes and emerge
from Chapter 11 in early June. Hayes Lemmerz, its U.S.
subsidiaries and one subsidiary organized in Mexico filed
voluntary petitions for reorganization under Chapter 11 of the
Bankruptcy Code in the U.S. Bankruptcy Court for the District of
Delaware on December 5, 2001.

Hayes Lemmerz International, Inc. is one of the world's leading
global suppliers of automotive and commercial highway wheels,
brakes, powertrain, suspension, structural and other lightweight
components. The Company has 43 plants, 3 joint venture
facilities and 11,000 employees worldwide.


HQ GLOBAL: Court Grants Open-Ended Lease Decision Period
--------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, HQ Global Holdings, Inc., and its debtor-affiliates
obtained an extension of their lease decision period.  The Court
gives the Debtors until the earlier of:

      a) September 9, 2003; or

      b) the date of confirmation of a plan of reorganization

to determine whether to assume, assume and assign, or reject
their unexpired nonresidential real property leases.

HQ Global Holdings Inc., one of the largest providers of
flexible office solutions in the world, filed for chapter 11
protection on March 13, 2002 (Bankr. Del. Case No. 02-10760).
Daniel J. DeFranceschi, Esq. at Richards, Layton & Finger, P.A.
and Corinne Ball, Esq. at Jones, Day, Rtavis & Pogue represent
the Debtors in their restructuring efforts. When the Company
filed for protection from its creditors, it listed estimated
assets of more than $100 million.


IASIS HEALTHCARE: S&P Rates Senior Subordinated Notes at CCC+
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC+' rating to
IASIS Healthcare Corp.'s $100 million senior subordinated notes,
due 2009, issued under rule 144A with registration rights. At
the same time, Standard & Poor's affirmed its 'B' corporate
credit and senior secured ratings, and its 'CCC+' subordinated
rating on IASIS. The company's outlook is stable.

The proceeds of the notes will be used to repay existing debt
and for general corporate purposes, including capital
expenditures. One upcoming capital expenditure likely to be
financed by the notes is the construction of a new hospital in
Texas to replace existing IASIS facilities there. Total debt
outstanding as of March 31, 2003, was $587 million.

"The speculative-grade rating on Franklin, Tenn.-based IASIS
Healthcare Corp. reflects the market and industry challenges the
company faces to sustain recent performance gains and the
company's improving, but still-weak, credit and cash flow
protection measures," said Standard & Poor's credit analyst
David Peknay.

Franklin, Tennessee-based IASIS owns and operates 14 medium-
sized hospitals in growing but competitive urban and suburban
markets. The company maintains relatively well-established
positions in Salt Lake City, Utah; Phoenix, Arizona; Tampa and
St. Petersburg, Florida; and Texas. The company also owns Health
Choice, a Medicaid health plan in Arizona that has more
than 60,000 members.

After initially struggling following its formation in 1999,
IASIS has improved its operating results through the improvement
of its corporate infrastructure, the pruning of unprofitable
businesses, a physician recruitment program, and aggressive
operating initiatives in the Arizona market. Aided by a
currently favorable reimbursement environment, the company's
profitability has improved, highlighted by an increase in return
on capital to 11.3% in 2002 from 7.3% in 2001.


INTERDENT: Plan Filing Issues Stall March Quarter Fin'l Reports
---------------------------------------------------------------
Recent events at Interdent Inc. resulted in a delay in
completing the Company's financial statements for the quarter
ended March 31, 2003 and its Quarterly Report on Form 10-Q for
that quarter. Completion of its Quarterly Report on Form 10-Q
for the three months ended March 31, 2003 is subject to the
completion of additional required material disclosures in the
financial statements, including disclosures relating to the
Company filing a Prearranged Plan of Reorganization under
Chapter 11 of the United States Bankruptcy Code on May 9, 2003.

It is anticipated that Interdent's total revenue for the quarter
ended March 31, 2003 will be approximately $59.0 million, or
approximately $4.7 million less than total revenues for the
comparable year ended March 31, 2002.  The decrease in revenues
is attributed to the effect of a very poor national economy and
high unemployment in the markets which the Company serves.

Interdent Inc., a dental practice management company, filed for
Chapter 11 relief on May 9, 2003, (Bankr. C.D. Calif. Case No.
03-13593). Robert E. Opera, Esq., at Winthrop Couchot
Professional Corp. represents the Debtors in their restructuring
efforts. When the Debtors filed for protection from its
creditors, it listed assets of about $54 million and total debts
of $204 million.


IT GROUP: Mid Atlantic Demands Compliance of April 25 Sale Order
----------------------------------------------------------------
Mid Atlantic Tank Inspection Service, Inc. wants the Court to
order the IT Group, Inc., its debtor-affiliates and The Shaw
Group, Inc. to comply with the April 25, 2002 sale order.

According to James E. Huggett, Esq., at Klehr, Harrison, Harvey,
Branzburg & Ellers LLP, Mid Atlantic served as the Debtors'
subcontractor and performed work at the Debtors' project sites
in Guam, Ascension Island, the Azores, South Korea and Okinawa
pursuant to the Air Force Center for Environmental Excellence
World Wide full Service Remedial Action, Cost Plus Award
Fee/Firm Fixed Price Contract.  The Debtors forwarded delivery
orders to Mid Atlantic for work to be completed and Mid Atlantic
forwarded to the Debtors the corresponding invoice for the
completed work.  The delivery orders also provided the amount to
be paid by the Debtors to Mid Atlantic.

On March 20, 2002, the Debtors issued a notice indicating a
$1,154,188 cure amount for Mid Atlantic.  Mid Atlantic refuted
the amount.  Mid Atlantic argued that under the Contract, the
cure amount due is $2,420,787 -- $1,266,599 more than the cure
amount asserted by the Debtors.

Pursuant to the Shaw Sale Order, Shaw and the non-debtor party
to each assumed contract will attempt to negotiate a resolution
of cure disputes.  However, as to Mid Atlantics' Objection, Mr.
Huggett reports that the negotiation phase consisted of only a
single correspondence received from Shaw.  Though the
correspondence challenged the cure amount asserted by Mid
Atlantic, there was no attempt to negotiate a resolution to the
cure dispute.

Further inquiry and attempts by Mid Atlantic to continue the
Negotiation Phase were ignored by Shaw, Mr. Huggett says.  When
addressed about its lack of participation in the negotiation,
Shaw only stated that it did not believe it was liable for any
debt and that the Court would determine the extent of its
obligations.

Though no resolution was reached in the Negotiation Phase, as
Shaw and its agents and representatives declined to further
communicate with Mid Atlantic to resolve objection, Shaw did not
continue to the Mediation Phase as required by the Sale Order.
Without a decision from a mediator pursuant to the Sale Order,
Mid Atlantic was unable to request a hearing on its Cure
Objection.

Hence, Mid Atlantic proposes that the Court fix the cure amount
owed to it as $2,420,787.  In the alternative, Mid Atlantic
suggests that the Court:

    (a) fix the cure amount due and payable as $1,154,188 as the
        undisputed portion of the cure amount, plus any other
        amount later agreed to by the parties or ordered by the
        Court;

    (b) require the parties to participate in the Negotiation
        Phase to resolve the Cure Objection;

    (c) if the parties fail to resolve the Objection in
        the Negotiation Phase, require them to participate in the
        Mediation Phase; and

    (d) fix the date by which the parties will submit to a
        hearing on the Cure Objection on the failure of the
        parties to resolve the cure dispute in the Negotiation
        Phase and the Mediation Phase.

Mr. Huggett emphasizes that Mid Atlantic's request is reasonable
because in addition to Shaw's failure to negotiate in good
faith, it has failed to participate in the Mediation Phase.  Not
once did Shaw attempt to submit the cure dispute to non-binding
arbitration.  Thus, Shaw has utterly failed to adhere to the
terms and requirements of the Sale Order.

                  Debtors and Committee Object

The Debtors and the Official Committee of Unsecured Creditors
want Mid Atlantic's motion denied or, in the alternative,
revised to indicate that the Cure Claim will be satisfied by The
Shaw Group Inc.

Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in Wilmington, Delaware, points out that pursuant to the
Sale Order, the Mid Atlantic Contract was assumed and assigned
to Shaw.  The Sale Order provides that:

      "as provided in Section 365(b) of the Bankruptcy Code,
      Shaw, as soon as practicable after the Closing, will
      satisfy all of the Debtors' obligations to cure defaults.
      and compensate for damages with respect to Assumed
      Contracts (the Cure Claims")."

Furthermore, Mr. Galardi adds, the Sale Order provided that
subsequent to the Closing, no Cure Claims or any other Claims
may be asserted against the Debtors with respect to the Assumed
Contracts.

                    Shaw Doesn't Like It Either

Christopher S. Sontchi, Esq., at Ashby & Geddes, in Wilmington,
Delaware, clarifies that the U.S. Air Force Center for
Environmental Excellence Program The Shaw Group assumed from the
Debtors pursuant to the Asset Purchase Agreement was a master
agreement that simply allowed the Debtors to contract with the
U.S. Air Force for a period of time.  Shaw only assumed the
Master Agreement from the Debtors and did not assume the Mid
Atlantic subcontract that was terminated for cause over a year
before the Petition Date.

Mid Atlantic entered into one, possibly two, separate contracts
with the Debtors, which it subsequently breached.  As a result,
the Debtors delivered a notice of default letter on August 10,
2001 and terminated the subcontracts for cause on September 24,
2001.

Mr. Sontchi adds that the Debtors have completed the projects
involving Mid Atlantic long before the approval of the Asset
Purchase Agreement.  As a completed subcontract that was
terminated for cause, the Mid Atlantic Subcontract was not
contemplated as part of the Asset Purchase Agreement in any
manner.

Mr. Sontchi also reports that Mid Atlantic never contacted Shaw
to discuss any issues related to the Subcontract after the Sale
was approved.  Since the Subcontracts were not assumed, Mid
Atlantic is disqualified from the resolution procedures under
the Sale Order.

"[Mid Atlantic] may have received a cure notice of the pending
sale, but that notice was not served by Shaw, but by the Debtors
erroneously . . ." Mr. Sontchi says.  "[I]n any event, many
parties who received a cure notice were not subsequently assumed
by Shaw under the Asset Purchase Agreement."

Mr. Sontchi asserts that a simple receipt of a cure notice did
not guarantee the assumption of a contract subject of that
notice, nor any amount due and payable. (IT Group Bankruptcy
News, Issue No. 28; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


KINGSWAY FIN'L: Completes Second Private Placement of Preferreds
----------------------------------------------------------------
Kingsway Financial Services Inc., (TSX:KFS, NYSE:KFS) has
completed another private placement of approximately US$15.0
million in 30-year floating rate trust preferred securities,
with net proceeds of approximately US$14.5 million.

The net proceeds of the offering will be used to provide
additional capital to Kingsway's subsidiaries to support the
growth of our business and for general corporate purposes, which
may include the repayment of existing credit facilities.

This private placement and the transaction completed the other
week, together with the Company's first quarter net income of
$24.4 million, have enhanced the Company's capital base by
approximately $70 million since the beginning of the year.

"We are pleased to be able to complete these transactions as the
additional capital will support the continued profitable growth
of our business and allow us to take advantage of the
significant opportunities we are seeing in our industry", said
Bill Star, President & Chief Executive Officer.

The trust preferred securities have not been registered under
the United States Securities Act of 1933 or any state securities
laws and may not be offered or sold in the United States absent
registration or an applicable exemption from the registration
requirements under the Securities Act.

Kingsway's primary business is the insuring of automobile risks
for drivers who do not meet the criteria for coverage by
standard automobile insurers and trucking insurance. The Company
currently operates through nine wholly-owned subsidiaries in
Canada and the U.S. Canadian subsidiaries include Kingsway
General Insurance Company, York Fire & Casualty Insurance
Company and Jevco Insurance Company. U.S. subsidiaries include
Universal Casualty Company, American Service Insurance Company,
Southern United Fire Insurance Company, Lincoln General
Insurance Company, U.S. Security Insurance Company, American
Country Insurance Company and Avalon Risk Management, Inc. The
Company also operates reinsurance subsidiaries in Barbados and
Bermuda. Kingsway Financial, Lincoln General Insurance Company,
Universal Casualty Insurance Company, Kingsway General, York
Fire, Jevco and Kingsway Reinsurance (Bermuda) are all rated "A-
" Excellent by A.M. Best. The Company's senior debt is rated
'BBB' (investment grade) by Standard and Poor's and by Dominion
Bond Rating Services. The common shares of Kingsway Financial
Services Inc. are listed on the Toronto Stock Exchange and the
New York Stock Exchange, under the trading symbol "KFS".

As reported in Troubled Company Reporter's November 29, 2002
edition, A.M. Best Co., placed the financial strength ratings of
the insurance subsidiaries of Kingsway Financial Services Inc.,
(Ontario, Canada) and the senior unsecured debt rating of "bbb"
on its 1999 syndicated bank facility, under review with negative
implications.

These rating actions reflect A.M. Best's concerns about the
group's elevated underwriting leverage position due to
significant growth in written premiums. Kingsway is in the
process of raising capital to support the expected growth of its
business and for general corporate purposes including repayment
of all or a portion of its revolving credit facility. Completion
of these efforts will be looked upon favorably by A.M. Best.

The following financial strength ratings have been placed under
review with negative implications for the insurance subsidiaries
of Kingsway Financial Services Inc:

      --  Kingsway General Insurance Company A (Excellent)
      --  JEVCO Insurance Company A (Excellent)
      --  York Fire and Casualty Company A (Excellent)
      --  Kingsway Reinsurance (Bermuda) Ltd. A (Excellent)
      --  Lincoln General Insurance Company A- (Excellent)
      --  Universal Casualty Company A- (Excellent)
      --  American Service Insurance Company B++ (Very Good)
      --  American Country Insurance Company B+ (Very Good)
      --  Southern United Fire Insurance Company B+ (Very Good)
      --  US Security Insurance Company B (Fair)

The following debt rating has been placed under review with
negative implications:

     Kingsway Financial Services Inc--

      - "bbb" senior unsecured debt rating on its 1999 syndicated
        bank facility


KMART CORP: Reports Senior Merchandising Executive Appointments
---------------------------------------------------------------
Kmart Management Corporation announced the promotions of Robert
Atteberry and Joyce Dillon to Vice President and General
Merchandise Manager, effective immediately. Additionally, Peter
Whitsett, Divisional Vice President, Merchandising Food and
Consumables, assumes responsibility for drugstore. Atteberry,
Dillon and Whitsett will report to Bill Underwood, Kmart
Executive Vice President, Sourcing & Global Operations.

Kmart President and CEO Julian Day said: "With Chapter 11 behind
us, establishing the management team that will lead the Company
into the future remains a top priority for me. Over the last
several months, I have spent a great deal of time determining
the leadership needs of the new Company and assessing the talent
within the organization. Rob, Joyce and Peter bring an
innovative discipline to the merchandising side of our business.
I am pleased to have them be part of the team of decision-makers
that will help reshape and differentiate Kmart."

Underwood added: "Rob, Joyce and Peter have exhibited the skills
and dedication necessary to improving Kmart's merchandising
efforts. We appreciate their contribution and look forward to
having them utilize their leadership skills and experience to
focus their teams on driving profitable sales growth and
exceeding the expectations of our customers."

Atteberry previously served as Divisional Vice President,
Merchandising - Hard and Soft Home. His new responsibilities
include managing all merchandising functions for hard and soft
home, do-it-yourself, horticulture, and outdoor living. Having
joined Kmart in 1996 as a Planner, Atteberry holds a bachelor's
of science degree in marketing and human resources from Miami
University in Ohio.

Serving previously as Divisional Vice President Merchandising -
Toys, Sporting Goods and Electronics, Dillon has held various
positions of increasing responsibility at Kmart's corporate
headquarters. Her new responsibilities include the oversight of
all merchandising functions for electronics, toys, sporting
goods, seasonal, celebration and car care. Having joined the
Company in 1984 as a Kmart Assistant Store Manager in
Philadelphia, Penn., Dillon holds a bachelor's of science degree
in business administration from Shippensburg University in
Shippensburg, Penn.

Named Divisional Vice President, Merchandising Food and
Consumables earlier this year, Whitsett adds managing the drug
store business to his list of responsibilities. Joining Kmart in
1999 as a Director, Planning and Replenishment, Drug Store
Business Planning, Whitsett has had positions of increasing
responsibility since that time. He has a bachelor's of science
degree in marketing from California State University in
Northridge, California.

Kmart is a mass merchandising company that serves America
through its Kmart and Kmart SuperCenter retail outlets. Our
common stock is currently quoted on the OTC Bulletin Board under
the symbol KMRT.


KOPPERS: With Improved Liquidity, S&P Says Outlook Now Stable
-------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Koppers Inc. to stable from negative, citing improvement in the
company's liquidity position.

At the same time, Standard & Poor's said that it affirmed its
'B+' corporate credit and 'B-' senior unsecured and subordinated
debt ratings on the company. Koppers, based in Pittsburgh, Pa.,
is a producer of carbon compounds and treated wood products and
has about $272 million of debt outstanding.

"The outlook revision reflects increased availability under a
new credit agreement and a more favorable debt maturity
schedule," said Standard & Poor's credit analyst Peter Kelly.
The firm's liquidity position has improved with the
establishment of a new four-year secured bank credit facility,
consisting of a $100 million revolving credit facility (subject
to a borrowing base calculation) and a $75 million term loan.
The company should be able to satisfy less restrictive financial
covenants and maintain satisfactory borrowing availability.

Standard & Poor's said that its ratings on Koppers continue to
reflect the company's below-average business position and its
very aggressive financial profile.


LEAP WIRELESS: Gabelli Asset Seeks Appointment of Equity Panel
--------------------------------------------------------------
Gabelli Asset Management Inc. asks the Court to direct the
United States Trustee to appoint an official committee of equity
security holders to provide Leap Wireless International Inc.'s
public shareholders with adequate representation in the Chapter
11 process where they have previously been shut out.  Moreover,
the Court should order that any professionals employed by the
official equity committee should receive the same treatment as
other professionals in this case with respect to interim
payments of fees and expenses and access to cash collateral
carve-outs.

David L. Oasis, Esq., at Allen Matkins Leck Gamble & Mallory
LLP, in San Diego, California, points out that recent public
scandals involving management of public companies underscores
the fact that the relationship between the multitude of diverse
shareholders and company management is remote and tenuous.  The
disaggregated group of public company shareholders typically
lack the ability to put cohesive pressure on company management
to ensure that management lives up to its fundamental
responsibilities -- the protection and enhancement of the
shareholders' investment.  In light of recent corporate
scandals, the trend among commentators and policy makers is to
increase independent oversight of management to ensure that
shareholder interests are not overlooked by management that
might be too focused on self-promotion or relationships with
other constituencies.

In Chapter 11 cases, Mr. Oasis notes that the shareholders'
bargaining position is degraded even further.  Fortunately,
however, the Bankruptcy Code provides for an independent body to
represent the shareholders' interests in Chapter 11 cases
involving large public companies -- the official committee of
equity security holders.  The equity committee allows
shareholders to protect their financial interests through
meaningful access to the reorganization process alongside
creditors.  Although equity committees have been the exception
rather than the rule, historically, the recent rise in the
number of public company Chapter 11 cases has resulted in more
frequent appointment of equity committees.

According to Mr. Oasis, neither the debtors' management nor
creditors' committees can substitute as adequate representatives
of the shareholders of a public company in a Chapter 11 case
where the shareholders have some hope of recovery.  Moreover,
the Court has a very strong interest in seeing that the Chapter
11 process is fairly and impartially administered.  A primary
purpose of the Bankruptcy Code is to ensure that administration
of bankruptcy cases does not take place behind closed doors
where all interested parties are not allowed to participate.
Instead, in enacting the Code, Congress sought to create a
system whose hallmarks are fairness and disclosure.  The need is
particularly acute in these cases because other committees
organized by the Debtors have already negotiated plan terms
prepetition, without the shareholders' substantial
participation, whereby these committees have agreed to releases
of substantial avoidance claims owned by Leap.

In determining whether the shareholders are adequately
represented, courts consider, among other things, these factors:

     A. Complexity of the case:  The size and complexity of a
        Chapter 11 case clearly bears on the need for and utility
        of an equity committee.  This case involves 66 affiliated
        Debtors, whose parent is a publicly traded company.  The
        Debtors have more than $2,000,000,000 in consolidated
        assets and liabilities.  The Debtors' capital structure
        and businesses are very complex.  The Debtors' proposed
        plan seeks to compromise intercompany claims that could
        prove valuable to Leap and its shareholders.  Moreover,
        the Debtors' proposed plan provides for a distribution to
        shareholders that could be substantial, or it could be
        nothing.  In this environment, active participation by
        shareholders through an equity committee is necessary to
        ensure that the shareholders' interests are adequately
        protected.

     B. Number of shareholders:  Leap has many thousands of
        public shareholders holding almost 60,000,000 shares.
        The holdings of most Leap shareholders are relatively
        small and it is not cost-effective for each shareholder
        to individually hire professionals to participate in
        these large and complex cases.  Moreover, even if
        individual shareholders do hire professionals to
        participate in the case, the Debtors' fast track to
        confirmation likely will not allow them to organize
        independently and effectively.  Absent quick
        organization, the bargaining power of shareholders vis-a-
        vis the major constituencies already well represented in
        this case will be minimal.  Therefore, the only way to
        ensure that the shareholders receive meaningful
        representation in this case is to appoint an
        equity committee to represent their interests.

     C. Solvency of the debtor:  Based on the Debtors' proposed
        plan, which provides for a distribution to holders of
        Leap common stock, solvency should be presumed.  There
        has been no evaluation and certainly no agreement as to
        the Debtors' enterprise value.  The only valuation
        evidence to date is from the Debtors' recent SEC filings,
        which do not present an estimate of their going concern
        value.  Without clear evidence that the Debtors are
        insolvent, equity holders are entitled to the benefit of
        the doubt on the question of solvency and their stake in
        the case.

        From Leap's perspective, the value of its claims related
        to recent fraudulent downstream transfers of hundreds of
        millions of dollars in cash and assets must be taken into
        account in any solvency analysis.  Leap's cash transfers
        in connection with certain amendments to the Vendor Debt
        Facilities -- March Agreement -- totaled more than
        $120,000,000.  In addition, Leap transferred 28 wireless
        licenses whose value the Debtors have not disclosed.
        While the Debtors' licenses may vary greatly in value, it
        is reasonable to assume that the licenses Leap
        transferred downstream had a very substantial value.  In
        comparison, in the FCC's Auction 35, Leap was the winning
        bidder for 22 licenses, with a bid of $350,000,000.  If
        the 28 licenses Leap transferred for the benefit of
        Cricket's secured creditors is assumed to be equivalent
        to the Auction 35 licenses, the value of licenses Leap
        transferred downstream would be about $450,000,000.

        Recent disclosures in the bankruptcy case indicate that
        Debtors' management have awarded themselves questionable
        bonuses, pay raises, and debt forgiveness.  It is
        possible that these revelations could be the tip of the
        proverbial iceberg.  Without adequate representation of
        the shareholders during these cases, the Debtors' plan
        could be rushed to confirmation without any objective
        review of the Debtors' finances.  The shareholders should
        be provided a real opportunity to investigate and, if
        relevant, provide evidence to this Court of the Debtors'
        enterprise value and examine Leap's recent downstream
        transfers in connection with the March Agreement.

        The appointment of an equity committee, and its
        employment of professionals, creates a cost for the
        estate.  This additional cost, however, must be weighed
        against the need for adequate representation of
        shareholders.  In this case, the Debtors have been paying
        the administrative costs of two informal creditors'
        committees for more than six months but have ignored a
        critical constituency -- the owners of the publicly held
        parent company.  Leap's shareholders should be allowed a
        seat at the table where the costs likely will not impact
        substantially any creditor recovery.

     D. Whether a plan has been filed:  The stage of plan
        negotiations is a factor that courts consider in deciding
        whether to appoint an equity committee where these
        requests were made after the filing of a plan.  In this
        case, this factor does not prejudice formation of an
        equity committee.  The Debtors filed their draft,
        prepackaged plan immediately after the Chapter 11
        filings.  The proposed plan represents the terms
        established with two informal committees of bond and
        noteholders.  The Debtors organized these committees
        representing certain secured and unsecured creditors in
        the Fall of 2002 and paid for financial and legal
        advisors for these committees.  Shareholders, on the
        other hand, have been excluded from plan negotiations,
        without any committee representation.

        The draft plan's key provision represents a settlement of
        Leap's potential avoidance claims against its
        subsidiaries.  This settlement was negotiated between the
        Debtors by the informal creditor committees that it
        organized prepetition, without any shareholder
        participation.  Under these circumstances, where the
        shareholders have not yet had any voice in plan
        negotiations, plan negotiations truly are at an early
        stage and formation of an equity committee is necessary
        to facilitate these negotiations.

        Significantly, the Debtors have declared their intention
        and demonstrated their will to follow an expeditious path
        to plan confirmation in July 2003.  In order to assure
        that shareholders' rights are not trampled along this
        path, the Court should direct appointment of an equity
        committee to negotiate the terms of the nascent plan on
        the shareholders' behalf.

     E. Interests of shareholders are already represented by an
        official or unofficial committee:  The shareholders have
        not participated broadly or meaningfully in the
        prepetition negotiations over the Debtors' draft plan.
        The only shareholders involved were certain members of
        the Debtors' management.  No committee of shareholders
        has been formed unofficially.  Simply put, the
        shareholders have no common voice in these cases.

     F. Interests of shareholders are already represented by the
        debtor's directors and management:  The Debtors'
        management have actual conflicts with a number of
        shareholders who have filed certain securities fraud
        actions.  The Debtors' management ignored Leap
        shareholders when it negotiated the March Agreement and
        the draft plan without shareholder approval or even
        input.  The Debtors' current management already has cut
        its deal.  Senior executives, who negotiated the terms of
        the draft plan and received enhanced compensation
        beginning shortly before the Petition Date, now have
        agreements with the Debtors to provide generous severance
        packages.  Based on the draft plan, former creditors will
        control the board of directors of the reorganized Debtors
        and management is or will be operating according to their
        dictates or will be replaced.  As a result, the Debtors'
        management has no incentive to act in the shareholders'
        best interests at this point.

Mr. Oasis tells the Court that there are a number of tasks,
which an equity committee, on the shareholders' behalf, will and
should perform in this case.  As a general matter, Section 1109
of the Bankruptcy Code provides that an official equity
committee may raise and appear and be heard on any issue in the
case.  More particularly, Sections 1103(c)(2) and (3) of the
Bankruptcy Code provides specific roles for an equity committee
in connection with participation in the plan process.  An equity
committee is allowed full involvement, including a "due
diligence" investigation of the Debtors' financial affairs,
negotiation of plan terms, and participation in plan
confirmation.  Section 1121(c) of the Bankruptcy Code further
provides that an equity committee may file its own plan.

Mr. Oasis asserts that the role of an equity committee in plan
negotiation is critical.  The Debtors' draft plan provides for
releases of intercompany claims related to the March Agreement
and Leap's substantial downstream transfers for the benefit of
its subsidiaries' secured creditors.  The Official Creditors'
Committee has already approved this settlement.  As a result,
the shareholders are the only constituency without a vested
interest in the settlement represented by the plan -- the only
one in a position to objectively investigate the reasonableness
of the settlement. (Leap Wireless Bankruptcy News, Issue No. 4;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


MADGE NETWORKS: Holland Court OKs Bankruptcy Trustee Appointment
----------------------------------------------------------------
Madge Networks N.V. (OTCBB:MADGF), a former global supplier of
advanced wired and wireless networking product solutions,
announced that the Administrator appointed by the Dutch courts
on April 17, 2003 pursuant to a Suspension of Payments order,
has applied for and been granted a Bankruptcy order in Holland,
in a process similar to that of a Chapter 7 bankruptcy under
U.S. law.

The Dutch court has appointed Sjoerd M Postma as the Trustee in
Bankruptcy of Madge Networks N.V. and all queries should be
directed to him: Sjoerd M Postma, c/o De Vos & Partners, Queens
Towers, Delflandlaan 1, 1062 EA Amsterdam, The Netherlands.
Telephone: + 31 20 206 07 00 or Fax: + 31 20 206 07 50.

As previously announced, the business and assets of Madge
Networks' UK trading entities have been acquired by a new
company that is trading as Madge Limited. For further
information see the new company's Web site at
http://www.madge.com


MASSEY ENERGY: Refinancing Concerns Spur S&P's Negative Outlook
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on coal
producer Massey Energy Co. to negative from developing based on
refinancing concerns.

Standard & Poor's also said that it has assigned its 'B+' rating
to Massey's proposed $100 million convertible senior notes due
2023.

Standard & Poor's said that it also affirmed its 'BB' corporate
credit rating on the Richmond, Va.-based company. Total
outstanding debt at March 31, 2003, was $589 million.

"The outlook revision reflects concerns regarding refinancing of
the company's November 2003 debt maturities," said Standard &
Poor's credit analyst Dominick D'Ascoli. "Last September, Massey
was unable to successfully refinance its existing bank lines
because of the uncertainty in the utility markets, and was
forced to term out its 365-day revolving credit facility.
Standard & Poor's will revise its negative outlook on Massey
Energy to stable once the bank refinancing is successful."

Standard & Poor's said that its ratings on Massey reflect its
substantial, quality coal deposits, contracted production,
tempered by high costs that have increased volatility in the
company's financial performance. With most of Massey's 2.2
billion tons of reserves in central Appalachia, the company
benefits from this region's high-BTU, low-sulfur metallurgical
coal deposits. Relative to its peers, Massey's reserves contain
a higher percentage of metallurgical coal deposits, which
usually receive a higher premium than steam coal, given
metallurgical coal's favorable properties.


METROMEDIA INT'L: Receives Notice from Sr. Discount Note Trustee
----------------------------------------------------------------
Metromedia International Group, Inc. (OTCBB:MTRM - Common Stock
and OTCBB:MTRMP - Preferred Stock), the owner of interests in
various communications and media businesses in Eastern Europe,
the Commonwealth of Independent States and other emerging
markets announced that it had received notification from the
trustee of its Series A and B 10-1/2% Senior Discount Notes Due
2007 concerning compliance with the covenants as outlined in the
indenture governingthe Senior Notes.

The trustee reported that the Company had not yet filed with the
Securities and Exchange Commission and furnished to the trustee
certain statements, the timely public filing of which is
required under Section 4.3(a) of the Indenture. The required
statements include the Company's Form 10-K and Form 10-Q for
periods ending December 31, 2002 and March 31, 2003,
respectively. The trustee reported that, under the terms of the
Indenture, the Company must resolve this compliance item within
60 days of receipt of the trustee's letter or the trustee will
be required to declare an event of default. If such default were
declared, the trustee or holders of at least 25% aggregate
principal value of Senior Notes outstanding could demand all
Senior Notes to be due and Payable immediately. On May 15, 2003,
the trustee reported these Indenture compliance items to the
Securities and Exchange Commission and holders of the Senior
Notes as part of the trustee's annual reporting duty required by
Section 7.6 of the Indenture.

In making this announcement, Ernie Pyle, Senior Vice President
Finance and Chief Financial Officer of MIG, commented, "The
Company anticipates completing its 2002 annual audit and
associated SEC reporting for fiscal year 2002 and first quarter
2003 within weeks. Work on these items is well underway and is a
significant corporate priority. We do not expect that there will
be any compliance items outstanding with respect to the
Indenture by the end of the 60 day time period set out by the
trustee."

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


MIKOHN GAMING: Seidler Reports Initial "Buy" Investment Rating
--------------------------------------------------------------
The Seidler Companies initiated coverage on Mikohn Gaming
Corporation (NASDAQ - MIKN) with a Buy investment rating and
target price of $7.13.

Based in Las Vegas, Nevada, Mikohn Gaming is a diversified
supplier to the casino industry worldwide. In the second quarter
of 2002, the company embarked on a comprehensive restructuring
plan, which had resulted in numerous improvements and new
opportunities. Copies of Seidler's research report can be
obtained by contacting Samantha Lim at (213) 683-4543.

The Seidler Companies Incorporated is one of California's
leading independent investment and investment banking firms.
Operating from several strategically located offices within
Southern California, the company provides comprehensive
financial planning and investment services for individuals and
family investors, institutional buy-side clients, trading and
order execution for institutional, and investment banking
services for corporations and municipalities.

Seidler is a member firm of the NYSE, NASD and SIPC with over
three decades of involvement in the Western region.

Mikohn is a diversified supplier to the casino gaming industry
worldwide, specializing in the development of innovative
products with recurring revenue potential. The Company develops,
manufactures and markets an expanding array of slot games, table
games and advanced player tracking and accounting systems for
slot machines and table games. The company is also a leader in
exciting visual displays and progressive jackpot technology for
casinos worldwide. There is a Mikohn product in virtually every
casino in the world. For further information, visit the
company's Web site: http://www.mikohn.com

                         *    *    *

As previously reported, Standard & Poor's Ratings Services
lowered its corporate credit and senior secured debt ratings of
Mikohn Gaming Corp., to single-'B'-minus from single-'B'. The
ratings remain on CreditWatch where they placed on February 22,
2002, but the implication is revised to negative from
developing.

The actions followed the announcement by the Mikohn Gaming that
operating performance during the June 2002 quarter was well
below expectations. That weak performance resulted in a
violation of bank covenants and a significant decline in credit
measures. Mikohn has about $100 million of debt outstanding. The
lower ratings also reflect Standard & Poor's concern that
Mikohn's liquidity position could further deteriorate if
operating performance during the next few quarters does not
materially improve.


MILLER INDUSTRIES: Potential Default Raises Going Concern Doubt
---------------------------------------------------------------
Miller Industries, Inc. (NYSE: MLR) announced financial results
for the first quarter of 2003, which ended March 31, 2003.

For the first quarter of 2003, net sales from continuing
operations were $40.7 million, compared with $47.8 million in
the first calendar quarter of 2002.  First quarter 2003 income
from continuing operations was $958,000, compared with income
from continuing operations of $1.2 million in the first quarter
of 2002.

During the quarter ended December 31, 2002, the Company's
management and its board of directors made the decision to
divest its remaining towing services segment, as well as the
operations of the distribution group of the towing and recovery
equipment segment.  As a result, in accordance with generally
accepted accounting principles, the assets for the towing
services segment and the distribution group are considered a
"disposal group" and the assets are no longer being depreciated.
All assets and liabilities and results of operations associated
with these assets have been separately presented in the
accompanying financial statements.  The statements of operations
and related financial statement disclosures for all prior years
have been restated to present the towing services segment and
the distribution group as discontinued operations separate from
continuing operations.  The discussions and analyses that follow
are of continuing operations, as restated, unless otherwise
noted.

Including a loss of $1.5 million, after-tax, from these
discontinued operations, Miller Industries reported a net loss
for the 2003 first quarter of $559,000, compared to a net loss
for the 2002 first quarter of $22.0 million.  The net loss for
the first quarter of 2002 includes a loss from discontinued
operations of $1.5 million, after tax, as well as a goodwill
impairment charge in the first calendar quarter of 2002 of $21.8
million, relating to the Company's adoption of FAS 142.

Cost of operations in the first quarter of 2003 was $34.8
million, compared to $40.9 million in the year-ago period, due
in part to improved manufacturing efficiencies versus a year
ago, as well as the decline in sales. For the 2003 first
quarter, selling, general and administrative expenses were $3.9
million, versus $4.2 million in the prior year period,
reflecting the Company's ongoing focus on operating cost
control.  Interest expense in the first quarter of 2003 was $0.8
million, compared to $0.7 million in the year-ago first quarter.

Jeffrey I. Badgley, President and CEO of Miller Industries,
commented, "Our sales in the first quarter continued to be
affected by similar conditions we saw in the fourth quarter of
2002, with our customers' purchasing decisions being influenced
by higher operating costs and tight credit markets.  In
addition, the war with Iraq during the quarter also had a
negative effect on sales.  These factors combined to lengthen
our sales cycle and extend purchasing decisions by our customer
base, with operational efficiencies offsetting some of the
slowdown in sales."

Mr. Badgley concluded, "Looking ahead to the coming quarters of
2003, we have begun to see an improvement in our markets, with a
decline in gasoline pricing and stronger product demand in
April.  While still preliminary, we will continue to manage our
costs to maximize operational efficiencies, and leverage our
position in the marketplace, positioning us to capitalize on any
improvement that materializes in this environment."

The Company's Junior Credit Facility matures on July 23, 2003
and all outstanding principal and accrued interest under the
facility becomes due and payable on that date.  As previously
announced, the Company is seeking to extend the maturity date of
and/or refinance the amount outstanding under the Junior Credit
Facility, and has engaged in discussions with its senior and
junior lenders regarding such extension and/or refinancing.
However, there can be no assurance that the Company will be able
to extend the maturity date or obtain such financing on terms
favorable to the Company, if at all.  If the Company is unable
to refinance the outstanding portion of the Junior Credit
Facility, the failure to pay such amounts when due would
constitute an event of default under both the Junior Credit
Facility and the Senior Credit Facility.  In the event of such a
default, the senior lender agent would be entitled to prevent
the junior lender agent from taking any enforcement action
against the Company for up to 270 days after the date the junior
lender agent gives notice of enforcement to the Company.

Primarily because of the potential default in July 2003, the
Company's independent auditors have included a "going concern"
explanatory paragraph in their annual audit report.  The Company
is therefore currently in default under both the Senior and
Junior Credit Facilities as a result of the "going concern"
explanatory paragraph as well as the failure to file its Annual
Report prior to April 30, 2003. Additionally, the Company is in
default of the EBITDA covenant under the Junior Credit Facility
only for the first quarter of calendar 2003.  The Company is
currently not pursuing a waiver of these defaults or an
amendment to the Credit Facilities to cure these defaults.  The
Company has had informal discussions with its creditors and
believes based on these discussions that the Senior and Junior
lender agents will not take action against the Company as a
result of these defaults.  However, there can be no assurance
that they will not pursue action in the future as a result of
these defaults or any other default under the Credit Facilities.

Miller Industries is the world's leading integrated provider of
vehicle towing and recovery equipment.  The Company markets its
towing and recovery equipment under a number of well-recognized
brands, including Century, Vulcan, Chevron, Holmes, Challenger,
Champion and Eagle.


MILLER INDUSTRIES: Red Ink Flows in Q4 2002 and Full-Year 2002
--------------------------------------------------------------
Miller Industries, Inc. (NYSE: MLR) announced financial results
for the 2002 fourth quarter and year ended December 31, 2002.

For the fourth quarter of 2002, net sales from continuing
operations were $53.3 million, compared with $53.9 million in
the fourth calendar quarter of 2001.  Fourth quarter 2002 income
from continuing operations was $1.2 million, compared with a net
operating loss of $1.9 million in the fourth quarter of 2001.

During the quarter ended December 31, 2002, the Company's
management and its board of directors made the decision to
divest its remaining towing services segment, as well as the
operations of the distribution group of the towing and recovery
equipment segment.  As a result, in accordance with generally
accepted accounting principles, the assets for the towing
services segment and the distribution group are considered a
"disposal group" and the assets are no longer being depreciated.
All assets and liabilities and results of operations associated
with these assets have been separately presented in the
accompanying financial statements.  The statements of operations
and related financial statement disclosures for all prior years
have been restated to present the towing services segment and
the distribution group as discontinued operations separate from
continuing operations.  The discussions and analyses that follow
are of continuing operations, as restated, unless otherwise
noted.

Including a loss of $23.6 million, after-tax, from discontinued
operations, Miller Industries reported a net loss for the
calendar 2002 fourth quarter of $22.3 million.  Including a loss
from discontinued operations of $15.9 million, after tax, the
Company reported a net loss for the 2001 fourth quarter of $17.7
million.  The losses from discontinued operations in the fourth
quarter of 2002 and 2001 include special or non-recurring
charges, pre-tax, of $10.2 million and $13.4 million from the
towing services segment, and $1.6 million and $1.5 million from
the distribution group, respectively.

For the full calendar year ended December 31, 2002, the Company
reported net sales from continuing operations of $203.1 million
versus $219.0 million a year ago.  Income from continuing
operations for the full calendar year 2002 totaled $3.5 million,
or $0.38 per diluted share, before the cumulative effect of the
change in accounting method from FAS 142, compared to income
from continuing operations of $5.6 million, or $0.60 per diluted
share for the full calendar year 2001.

Including an after-tax loss from discontinued operations of
$27.4 million and the cumulative effect of FAS 142, Miller
Industries reported a net loss for the calendar year ended 2002
of $45.7 million.  Including an after-tax loss from discontinued
operations of $25.9 million, the Company reported a net loss for
the calendar year ended 2001 of $20.4 million. The losses from
discontinued operations in 2002 and 2001 include special or non-
recurring charges, pre-tax, of $15.3 million and $13.2 million
from the towing services segment, and $2.5 million and $3.3
million from the distribution group, respectively.

For the 2002 fourth quarter, selling, general and administrative
expenses were $3.4 million, versus $4.7 million in the prior
year period, reflecting the Company's ongoing focus on operating
cost control.  Interest expense in the fourth quarter of
calendar 2002 declined to $253,000 from $1.6 million in the year
ago fourth quarter.  This reduction in interest expense reflects
lower borrowing levels in the continuing operations, as the
Company has consistently been paying down its debt.

Jeffrey I. Badgley, President and CEO of Miller Industries,
commented, "The trends we witnessed in the first three quarters
of 2002 continued into the fourth quarter.  Purchasing decisions
by our customers continued to be affected by higher operating
costs and tight credit markets, effectively pushing out the
timeline on these decisions.  However, our focus on increasing
efficiencies has been effective in allowing the Company to
reduce SG&A and enhance the profitability of our operations."

Mr. Badgley concluded, "During the quarter we continued our
efforts to exit the towing services market.  At the end of March
2003, the Company had sold or closed 100 RoadOne terminals and
had 14 terminals remaining to be sold.  We have used the
proceeds of these sales to pay down debt and strengthen our
balance sheet.  Looking ahead to 2003, we will continue to
concentrate on our core manufacturing operations, an area in
which we see the greatest growth potential over the long term.
We have maintained our position as the world's largest producer
of towing and recovery equipment, and going forward our focus
will be to leverage our position in the marketplace."

In February and April of 2003, the Company entered into the
Fifth and Sixth Amendments to the Senior Credit Facility, which
revised the RoadOne revolving commitment, by extending for one
year to March 31, 2004 the time for the reduction thereof to
$-0.  At April 30, 2003, the actual balance under the RoadOne
Revolving line of credit was approximately $7.5 million. The
Amendment also extended the time for required delivery of the
Company's annual financial reports for the fiscal year ended
December 31, 2002 and certain related items from March 31, 2003
to April 30, 2003.

The Company's Junior Credit Facility matures on July 23, 2003
and all outstanding principal and accrued interest under the
facility becomes due and payable on that date.  As previously
announced, the Company is seeking to extend the maturity date of
and/or refinance the amount outstanding under the Junior Credit
Facility, and has engaged in discussions with its senior and
junior lenders regarding such extension and/or refinancing.
However, there can be no assurance that the Company will be able
to extend the maturity date or obtain such financing on terms
favorable to the Company, if at all.  If the Company is unable
to refinance the outstanding portion of the Junior Credit
Facility, the failure to pay such amounts when due would
constitute an event of default under both the Junior Credit
Facility and the Senior Credit Facility.  In the event of such a
default, the senior lender agent would be entitled to prevent
the junior lender agent from taking any enforcement action
against the Company for up to 270 days after the date the junior
lender agent gives notice of enforcement to the Company.

Primarily because of the potential default in July 2003, the
Company's independent auditors have included a "going concern"
explanatory paragraph in their annual audit report.  The Company
is therefore currently in default under both the Senior and
Junior Credit Facilities as a result of the "going concern"
explanatory paragraph as well as the failure to file its Annual
Report prior to April 30, 2003.  Additionally, the Company is in
default of the EBITDA covenant under the Junior Credit Facility
only for the first quarter of calendar 2003.  The Company is
currently not pursuing a waiver of these defaults or an
amendment to the Credit Facilities to cure these defaults.  The
Company has had informal discussions with its creditors and
believes based on these discussions that the Senior and Junior
lender agents will not take action against the Company as a
result of these defaults. However, there can be no assurance
that they will not pursue action in the future as a result of
these defaults or any other default under the Credit Facilities.

Miller Industries is the world's leading integrated provider of
vehicle towing and recovery equipment.  The Company markets its
towing and recovery equipment under a number of well-recognized
brands, including Century, Vulcan, Chevron, Holmes, Challenger,
Champion and Eagle.


NANTICOKE HOMES: UST Moves to Convert Case to Ch. 7 Liquidation
---------------------------------------------------------------
Roberta A. DeAngelis, the United States Trustee for Region 3
wants to convert the chapter 11 case of Nanticoke Homes, Inc.,
to a case under chapter 7 of the Bankruptcy Code.

Section 1112(b) of the Bankruptcy Code provides that the court
may convert or dismiss a case to Chapter 7, whichever is in the
best interest of creditors.  The UST adds that all chapter 11
debtors are required to supply certain reports as prescribed by
the United States Trustee Operating Guidelines and Reporting
Requirements for Chapter 11 cases.

In this case, the Debtor has failed to comply with the United
States Trustee Operating Guidelines and Reporting Requirements
for Chapter 11 cases since the Debtor has not filed monthly
operating reports since October 2002. The Debtor's failure to
file these reports hinders the ability to monitor post-petition
operations.

"Failure to file monthly operating reports is sufficient cause
for the conversion of the case," the UST says.

The UST submits that conversion would be in the best interest of
creditors. Conversion would result in the appointment of an
independent fiduciary Chapter 7 trustee who would, among other
things:

      i) liquidate any remaining assets,

     ii) take control of any sale proceeds, and

    iii) investigate whether there are any causes of action which
         might lead to a distribution to creditors.

Nanticoke Homes, Inc., filed for chapter 11 protection on March
01, 2002 (Bankr. Del. Case No. 02-10651).  Stephen W. Spence,
Esq., at Philippe, Goldman & Spence, P.A., represents the Debtor
in its restructuring efforts.  When the Company filed for
protection from its creditors, it listed estimated debts and
assets of more than $10 million each.


NORAMPAC INC: Closes Refinancing of Credit Facilities & Lines
-------------------------------------------------------------
Norampac Inc. has recently undertaken a series of transactions
to refinance substantially all of its outstanding credit
facilities and credit lines. More specifically, Norampac agreed
to sell US$250 million aggregate principal amount of its Senior
Notes due 2013 in a private placement pursuant to Section 4(2),
Rule 144A and Regulation S under the Securities Act of 1933. The
Notes will bear interest at a rate of 6-3/4% per annum. The
private placement is expected to close on May 28, 2003. The
Company is also entering into a new CAD$350 million five-year
revolving credit facility expected to close on the same day.

                           *   *   *

As reported, Standard & Poor's Ratings Services assigned its
'BB+' rating to Norampac Inc.'s proposed senior unsecured US$250
million note issue, and its 'BBB-' rating to the company's C$350
million proposed senior secured credit facility. At the same
time, the ratings outstanding on containerboard and corrugated
box producer were affirmed, including the 'BB+' long-term
corporate credit rating. The outlook is stable.

The ratings on Norampac Inc. reflect the company's competitive
cost position in containerboard production, leading market
position across Canada, improving integration in box conversion,
and sound financial profile characterized by moderate debt
levels and healthy credit measures.


NORTHERN LIGHT: Emerges from Divine Bankruptcy, Leaner & Intact
---------------------------------------------------------------
Northern Light, the tiny little search engine company in
Cambridge, Massachusetts, emerged from the chaos of the Divine
bankruptcy, smaller but basically intact, its notable search,
classification, and content integration technology still viable
and ready to roll. C. David Seuss, former CEO of Northern Light,
purchased the company in Divine's 26-hour marathon bankruptcy
auction held three weeks ago, an event which has been referred
to by the Chicago Sun-Times as "the social event of the season."
Seuss stated that he never expected to win the bidding for
Northern Light, but had simply wanted to be present to witness
what he thought would be last rites for the "most elegant search
technology ever to grace the land." Instead he left 26 hours
later, sleep-deprived and unshaven, but pumped with adrenalin.
Seuss observed, "Woody Allen said that showing up is 80%. Well,
I showed up!"

Immediately, after the acquisition, Seuss contacted the
corporate customers for Northern Light's SinglePoint Market
Research Portal and assured them that their customer support
would return to the exceptionally high levels characteristic of
Northern Light during its days as an independent company. "Each
member of the original Northern Light team valued meeting
customers' needs above all else," Seuss explained. "I have
already begun to put that team back in place." The prospect of
returning to this earlier level of outstanding customer support
has encouraged several of Northern Light's SinglePoint customers
to renew their contracts with the new Northern Light.

Seuss also plans to market the never before released Northern
Light Enterprise Search Engine, a 64-bit enterprise search
solution with unparalleled scalability, featuring Northern
Light's famous taxonomy and classification that uses Northern
Light's patented clustering technology.

Regarding the Northern Light Web search engine, which won three
PC Magazine awards in a row for being best in class, Seuss
declined to make firm predictions for now, but did say "We have
started discussions with interested parties about ideas for new
approaches to delivering on the promise of Web searching, ideas
that represent a collaboration between others who have done
innovative work and Northern Light. These ideas may result in
uniquely useful Web search services."

Seuss summarized, "We have loyal corporate customers. We have
dedicated employees that earnestly aspire to the highest
standards of customer support. We have the best search and
classification technology. And we're already profitable. Hey,
Northern Light is back! Now it's time to have some fun."


NORTHWEST AIRLINES: S&P Rates New 2003-1 Pass-Thru Notes at B-
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' preliminary
rating to Northwest Airlines Inc.'s (B+/Watch Neg/--) $576.4
million 2003-1 trust class D pass-through certificates, series
2003-1, and placed the rating on CreditWatch with negative
implications. These securities are to be offered in a voluntary
exchange for the outstanding $150 million 8.375% notes due 2004,
$200 million 8.52% notes due 2004, and $200 million notes due
2005 (each rated 'B-'). Final ratings will be assigned upon
completion of review of legal documentation relating to the
pass-through certificates.

"Northwest Airlines' 2003-1 class D pass-through certificates
are to be serviced using cash flows from existing and newly
issued junior notes relating to six existing series of enhanced
equipment trust certificates," said Standard & Poor's credit
analyst Philip Baggaley. "The 'B-' rating assigned to the pass-
through certificates is equivalent to Northwest's senior
unsecured debt rating, reflecting deep subordination of the
junior notes that back the certificates and consequent
potentially poor recovery prospects on the certificates if the
airline were to file for bankruptcy," the analyst continued. The
loan-to-values for the junior 'D' notes in three series of
enhanced equipment trust certificates (the 1999-3, 2000-1,
and 2001-2 series) are estimated to be in excess of 100%, and
loan-to-values for the other three series (1999-2, 2001-1, and
2002-1) are estimated to be in the 80%-100% range. These
estimates use values Standard & Poor's believes to be reasonable
for the aircraft involved over the intermediate term, but near-
term repossession and sale of the planes, including various
associated expenses, could result in even lower recoveries.

Northwest Airlines Inc. is the principal operating subsidiary of
Northwest Airlines Corp. (B+/Watch Neg/--). Ratings of both
entities were listed on CreditWatch with negative implications
March 16, 2003, and lowered to current levels on March 28.


NOVA CHEMICALS: Outlook Now Positive Due to Improved Liquidity
--------------------------------------------------------------
Standard & Poor's Rating Services affirmed its ratings on NOVA
Chemicals Corp., including the 'BB+' long-term corporate credit
rating. At the same time, the outlook was revised to positive
from stable, reflecting expectations of an improved liquidity
position and better-than-expected prospects for debt reduction.

"NOVA recently has taken steps to materially improve their cash
position and access to committed lines of credit, giving the
company greater flexibility to manage the volatile operating
conditions that characterize the petrochemicals industry," said
Standard & Poor's credit analyst Kenton Freitag.

Calgary, Alberta-based NOVA recently announced that they would
be selling their 37% stake in Methanex Corp. for proceeds of
about US$460 million. In April, the company also renegotiated
its bank facility, extending its term to three years and
significantly relaxing financial covenants. NOVA also has
announced its intention to issue debt in capital markets to
refinance a possible put on a US$150 million bond issue. These
measures, and the possibility of further asset sales, are
expected to greatly increase the company's cash position,
relieve prior concerns related to near-term debt maturities, and
improve availability under its committed credit lines.

NOVA, which generated revenues of US$3.1 billion in fiscal 2002,
has positions in two petrochemical product categories:
ethylene/polyethylene and styrenics. Both businesses are
cyclical and near-term prospects remain uncertain due to
lingering economic weakness, and recent raw material price
volatility. Nevertheless, recent efforts to raise prices and to
quickly pass on the increased costs to customers have been
fairly successful. Moreover, these businesses are expected to
benefit from a medium-term industry recovery, as moderating
supply additions and a gradual economic recovery can be expected
to drive margin improvement.

As of March 31, 2003, NOVA had total debt of US$1.7 billion,
which included US$270 million of capitalized operating leases
and US$163 million of securitized receivables. Total debt to
capital stood at 51% (68% if preferred securities are treated as
debt). Twelve-month rolling EBITDA coverage of interest and
preferred dividends is about 2.3x. While these ratios highlight
the necessity to improve the financial profile, management
initiatives to generate cash from noncore asset sales, and
better business prospects, are expected to accelerate efforts to
restore the financial profile in the next couple years. Pro
forma for the sale of NOVA's stake in Methanex, the key ratio of
funds from operations to adjusted debt (net of cash) would be
about 20% compared with the 25% level considered appropriate at
the current ratings.

The positive outlook highlights the increased possibility of an
modest upgrade in the next several years, given NOVA's improved
liquidity, reduced debt maturities, and the expectation of a
recovery in key business lines that should support further
improvement to the financial profile.


NRG ENERGY: Wants to Honor Prepetition Tax & Fee Obligations
------------------------------------------------------------
NRG Energy, Inc., and its debtor-affiliates ask the Court for an
order:

     -- authorizing them to pay prepetition trust fund, excise,
        fuel, franchise and certain other taxes and fees; and

     -- directing financial institutions to honor and process
        related checks and transfers.

James H.M. Sprayregen, Esq., at Kirkland & Ellis, in New York,
relates that the Debtors collect or are required to remit to
various taxing or regulatory authorities certain taxes and fees
in the ordinary course of business, including:

     (a) Withholding and Employment Taxes

         Te Debtors are required to withhold from their
         employees' and certain independent contractors'
         paychecks amounts on account of various federal, state
         and local income taxes, FICA, Medicare and other taxes
         for remittance to the appropriate Taxing Authority.

         The Debtors estimate that they owe approximately
         $960,000 in Withholding Taxes, and approximately
         $750,000 in Employment Taxes incurred during the period
         prior to the Petition Date.

     (b) Sales and Use Taxes

         In certain instances, the Debtors collect and remit to
         the Taxing Authorities sales taxes in connection with
         the sale of energy to their customers.  The Debtors also
         are required to pay Use Taxes when they purchase
         tangible personal property and certain services from
         vendors who are not located in the state in which the
         personal property is to be delivered.

         In the aggregate, the Debtors estimate that they owe
         approximately $1,500,000 with respect to the Sales Taxes
         and the Use Taxes incurred during the prepetition
         period.

     (c) Fuel Taxes

         Certain of the Taxing Authorities impose a tax on the
         Debtors for their use of petroleum, coal, natural gas
         and certain other hydrocarbons in connection with their
         generation of power.  The Debtors estimate that they owe
         approximately $6,100 in Fuel Taxes.

     (d) Franchise Taxes

         The Debtors pay franchise taxes to certain of the Taxing
         Authorities to operate their businesses in the
         applicable taxing jurisdiction.  The Debtors estimate
         that they owe approximately $400,000 in Franchise Taxes.

     (e) Business License Fees

         Many municipal and county governments require the
         Debtors to obtain a business license and to pay
         corresponding business license fees.  The Debtors
         estimate that the amounts owed in Business License Fees
         related to periods prior to the Petition Date are
         minimal and in no event will exceed $250,000.

Mr. Sprayregen insists that the payment of the Taxes and Fees
will help the Debtors to avoid the serious disruption to their
reorganization efforts.  Moreover, payment of the prepetition
Taxes and Fees is necessary and appropriate because:

     (a) certain of the Taxes and Fees do not constitute property
         of the Debtors' Chapter 11 estates;

     (b) substantially all of the Taxes and Fees constitute
         priority claims that will be paid in full under a
         Chapter 11 plan; and

     (c) the Debtors' officers and directors may face personal
         liability if certain of the Taxes and Fees are not paid.

Generally, the Sales Taxes, Use Taxes, Withholding Taxes,
Employment Taxes, and Fuel Taxes collected or withheld by the
Debtors are held in trust for the benefit of the Taxing
Authorities and constitute so-called "trust fund" taxes.  Thus,
the Debtors do not have an equitable interest in the funds
constituting the trust fund taxes, and payment of these taxes
will not adversely affect the Debtors' estates or distributions
to general unsecured creditors.

Moreover, most if not all of the Taxes and Fees also represent
priority claims.  To this extent, they must be paid in full in
connection with any Chapter 11 plan.  Accordingly, Mr.
Sprayregen emphasizes that the proposed relief will only affect
the timing of the payment of the Taxes and Fees, and will not
prejudice the rights of general unsecured creditors or other
parties-in-interest.

The Debtors also seek the Court's authority to pay the Taxes and
Fees at this time in order to save the bankruptcy estates
various potential interest expenses, penalties and costs.  In
contrast, if the Taxes and Fees remain unpaid, the Debtors'
officers and directors may be subject to lawsuits or even
criminal prosecution on account of the non-payment.

Finally, payment of the Business License Fees will enable the
Debtors to operate in the ordinary course of business without
risk that the regulatory or licensing authorities would fail to
renew necessary permits or licenses. (NRG Energy Bankruptcy
News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


OVERHILL FARMS: March 30 Working Capital Deficit Stands at $4MM
---------------------------------------------------------------
Overhill Farms, Inc., (Amex: OFI) announced operating results
for the Company's second quarter ended March 30, 2003.

For the second quarter of fiscal 2003, the Company reported
revenues of $33,428,000, a decrease of $675,000 (2%) from
revenues of $34,103,000 in the same period in the prior fiscal
year.  The decrease in revenues consisted of decreases in sales
to existing retail and airline customers, partially offset by
increases in sales to existing foodservice and health care
customers.

Gross profit for the second quarter of fiscal 2003 decreased
$1,450,000 to $3,735,000 in the current year from $5,185,000 for
the same period in the prior year.  Gross profit as a percentage
of net revenues decreased to 11.1% for the second quarter of
fiscal 2003 from 15.2% for the same period in the prior year.
The Company attributes this decrease primarily to manufacturing-
related inefficiencies encountered in connection with the
previously announced plant consolidation during the quarter to a
larger, more efficient facility in Vernon, California.

Selling, general and administrative expenses for the three
months ended in March 2003 increased $1,446,000 to $4,909,000
from $3,462,000 for the same period in the prior fiscal year.
The more significant changes in this category were an increase
in delivery and storage costs of $339,000, largely related to
the consolidation of facilities, and an increase in professional
fees of $451,000 incurred, in part, in assisting the Company in
streamlining and reducing its cost structure.  Other expenses
for the quarter, consisting primarily of interest expense,
increased to $1,845,000 in 2003 from $1,356,000 in 2002, an
increase of $489,000, which is largely due to increases in
amortization of deferred financing costs.

The net results for the quarter ended March 30, 2003 was a net
loss of $1,807,000 as compared to net income of $220,000 for the
quarter ended March 31, 2002.

For the six months ended March 30, 2003, revenues increased
$4,098,000 (6.1%) to $71,559,000 as compared to $67,461,000 for
the six months ended March 31, 2002.  This revenue increase is
primarily due to increased sales to existing foodservice and
health care customers, with current year revenues of $29,196,000
and $11,036,000, respectively, each increasing from the prior
year by 11%.  Current year revenues from airlines of $15,035,000
and retail and other of $16,292,000 remained substantially
unchanged from prior year revenues.

Gross profit for the six months ended March 30, 2003 decreased
$1,361,000 to $9,009,000 from $10,370,000 for the comparable
period in 2002.  Gross profit as a percentage of net revenues
decreased to 12.6% in 2003 as compared to 15.4% for the same
period in 2002.  The gross profit decrease related largely to
manufacturing-related inefficiencies encountered in connection
with the plant consolidation during the first six months of
fiscal 2003.

Selling, general and administrative expenses for the six months
ended March 30, 2003 increased $2,750,000 to $9,755,000 (13.6%
of revenues) from $7,005,000 (10.4% of revenues) for the
comparable period in 2002.  Factors significantly contributing
to the increase in SG&A expenses were increases in delivery and
storage costs of $1,109,000 largely due to increased sales,
increased fuel costs and to the consolidation of facilities, new
product demonstration costs of $306,000 for the Company's
Chicago Brothers brand products and professional fees of
$452,000, as discussed above.  Other expenses during the six
months, consisting primarily of interest expense, increased to
$3,352,000, as compared to $2,700,000 for the six months ended
March 31, 2002, an increase of $652,000.  This increase is
largely due to an increase in amortization of deferred financing
costs.

The net results for the six months ended March 30, 2003 was a
net loss of $2,453,000 as compared to net income of $398,000 for
the comparable period in 2002.

Overhill Farms' March 30, 2003 balance sheet shows that its
total current liabilities outweighed its total current assets by
about $4 million, while its total shareholders' equity has
further narrowed to close to $2 million from over $5 million at
September 30, 2002.

The Company has now completed the consolidation of certain home
office, manufacturing warehousing, product development,
marketing and quality control functions into a single 170,000
square foot operating facility located in Vernon, California.
The Company will now maintain only two locations, the new site
and an existing 48,000 square foot cooking facility also located
in Vernon, California.  Management believes that the Company
should expect, as a result of this consolidation, to achieve
significant operating efficiencies as well as a reduction of its
dependence on outside cold storage facilities.  The savings from
the consolidation are expected to result from reduced cold
storage and refrigerant cost, a lower overall facility rent
expense, together with manpower and efficiency savings.

In discussing the six month results, James Rudis, the Company's
Chairman and Chief Executive Officer, stated, "While the first
half results were certainly not what we hoped for, we remain
confident of the near term benefits of our plant consolidation.
We are now in the first full quarter with all facilities
consolidated, and we are seeing the increase in efficiencies we
anticipated with an operating profit for the first month of the
third quarter."

The Company also announced that in conjunction with the
consolidation and in an effort to improve profitability,
management has made several organizational changes, including
staff and expense reductions.  These changes included across the
board reductions in administrative and management personnel,
together with the closings of the Company's Dallas office and
the Boston-based investor relations office.  The Company has
also reduced raw materials and finished goods inventories by
over $5 million since the beginning of the current fiscal year
and continues to focus on reducing freight costs where possible
and maximizing the use of its new on-site cold storage
facilities.

The Company further announced that John L. Steinbrun has joined
the organization as Senior Vice President and Chief Financial
Officer.  Andy Horvath, who previously held that position,
remains with the Company as Senior Vice President-
Administration.  In discussing these changes Rudis added, "With
increased reporting requirements by Overhill Farms, now as a
stand alone public company, plus the new requirements imposed by
Sarbanes-Oxley, we felt it necessary to bring on additional
expertise.  John's background and experience will make him an
important addition to the team, and we have already benefited
from his contributions."  In addition to Andy Horvath's ongoing
responsibilities, he will temporarily assist Rudis in handling
investor relations activities form the Company's California
headquarters.

Overhill Farms is a value added supplier of high quality frozen
foods to foodservice, retail, airline and health care customers.


OWENS-BROCKWAY: $1.9-Billion Bank Facility Gets S&P's BB Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' bank loan
rating to Owens-Brockway Glass Container Inc.'s $1.9 billion
senior secured bank facility.

Owens-Brockway is a wholly owned subsidiary of Toledo, Ohio-
based Owens-Illinois Inc. Standard & Poor's said that it also
affirmed its 'BB' corporate credit rating on Owens-Illinois.
Total debt outstanding at the company was about $5.7 billion as
of March 31, 2003.

The bank loan rating is the same as the corporate credit rating
on Owens-Illinois. "Under its simulated default scenario, which
acknowledges Owens' above-average business profile, Standard &
Poor's assumed that a default would be driven by an adverse
trend in the company's asbestos litigation settlements that
would lead it to seek bankruptcy protection," said Standard &
Poor's credit analyst Paul Vastola. "Under such a scenario,
although the security of these assets and collateral sharing
agreement will provide significant protection to lenders, the
reorganization of the company and repayment to the secured
lenders would likely take longer than the 18 to 24 months that
Standard & Poor's usually factors into its ultimate recovery
analysis because of the uncertainties in resolving asbestos
claims through the bankruptcy process."

Standard & Poor's said that its ratings on Owens-Illinois Inc.
and its related entities reflect the company's aggressive
financial profile and meaningful concerns regarding its asbestos
liability, somewhat offset by an above-average business position
and strong EBITDA generation.


OWENS CORNING: Taps Innisfree's Services as Balloting Agent
-----------------------------------------------------------
Owens Corning and its debtor-affiliates sought and obtained the
Court's authority to employ, compensate, and reimburse Innisfree
M&A Incorporated as their special noticing, balloting and
tabulation agent.

Innisfree will be responsible for the noticing, balloting and
tabulation with respect to the Debtors' public securities only.
Robert L. Berger & Associates LLC, the Claims Agent, will remain
responsible for all other noticing, balloting and tabulation for
the Debtors.  Innisfree will, however, coordinate its efforts
with the Claims Agent to make use of any information database
that already exists and to minimize or avoid the duplication of
efforts and costs to the estates.

In addition to managing the mailing of voting Plan documents to
security holders, Innisfree will respond to inquiries from any
security holder or creditor who may have questions about the
Plan, and conduct the tabulation of votes for holders of
securities.

Innisfree will also:

   A. provide advice to the Debtors and their counsel regarding
      all aspects of the Plan vote relating to securities,
      including timing issues, voting and tabulation procedures,
      and documents needed for the vote;

   B. review the voting portions of the Disclosure Statement and
      ballots, particularly as they may relate to beneficial
      owners in "Street name;"

   C. work with the Debtors to request appropriate information
      from the indenture trustees of the Debtors' bonds, the
      transfer agent of Owens Corning's common stock, The
      Depository Trust Company, and the Claims Agent;

   D. mail voting documents to registered record holders of bonds
      and common stock;

   E. coordinate the distribution of voting documents to "Street
      name" holders of bonds and common stock by forwarding the
      appropriate documents to the banks and brokerage firms
      holding the securities, who in turn will forward it to
      beneficial owners for voting;

   F. distribute copies of the master ballots to the appropriate
      banks and brokerage firms so that firms may cast votes on
      behalf of beneficial owners;

   G. prepare a certificate of service for filing with the Court;

   H. respond to requests for voting documents from any party who
      requests them, including brokerage firms and bank back-
      offices, institutional holders, and any other party who may
      have an interest in the matter;

   I. to the extent requested by the Debtors, respond to
      telephone inquiries from creditors and the holders of bonds
      and common stock regarding the Disclosure Statement and the
      voting procedures, although Innisfree will restrict its
      answers to the information contained in the Plan documents
      and seek assistance from the Debtors or their counsel with
      respect to any inquiries that are outside of the voting
      documents;

   J. if requested to do so, make telephone calls to a defined
      group of security holders to confirm that they have
      received the Plan documents and respond to any questions
      about the voting procedures in accordance with any
      guidelines set by Debtors' counsel;

   K. if requested to do so, assist with an effort to identify
      beneficial owners of the Debtors' publicly issued bonds;

   L. receive and examine all ballots and master ballots cast by
      holders of bonds and common stock as well as date- and
      time-stamping the originals of all the ballots and master
      ballots upon receipt;

   M. tabulate all ballots and master ballots received prior to
      the voting deadline in accordance with established
      procedures, and prepare a vote certification for filing
      with the Bankruptcy Court; and

   N. undertake other related activities as may be mutually
      agreed upon by Innisfree and the Debtors from time to time.

For balloting services, Innisfree will charge a $15,000 project
fee, plus $2,000 for each separate issue of securities.  The
balloting fee encompasses Innisfree's coordination with all
brokerage firms, banks, institutions and other interested
parties, including the distribution of voting materials as set
forth in the Agreement and assumes one distribution of materials
and no extensions of the voting deadline.

For the mailing to creditors and record holders of securities,
Innisfree estimates that its labor charges will be $1.75 to
$2.25 per solicitation package, with a $500 minimum.  This
estimate assumes that the package would include the Disclosure
Statement, a ballot, a return envelope, and one other document,
and that a window envelope will be used for the mailing, and
will therefore not require a matched mailing.  If a matched
mailing is necessary, the mailing charge would increase.

Innisfree will charge $4,000 to respond to up to 500 telephone
calls from creditors and security holders within a 30-day
solicitation period.  If more than 500 calls are received within
the solicitation period, Innisfree will charge the Debtors $8
per call over 500.  In addition, Innisfree will charge $8 per
call for any calls made to creditors or security holders.

Innisfree will charge $100 per hour for the tabulation of
ballots and master ballots, plus set-up charges at $1,000 for
each tabulation element.  Innisfree will also charge its
customary hourly rates for any time spent by senior executives
reviewing and certifying the tabulation and dealing with special
issues that may develop.

Innisfree will charge the Debtors for consulting services at
Innisfree's standard hourly rates.  Consulting services include,
without limitation:

   A. the review and development of voting materials;

   B. participation in telephone conferences;

   C. strategy meetings or the development of strategy relative
      to the solicitation project;

   D. efforts related to special balloting procedures, including
      issues that may arise during the balloting or tabulation
      process;

   E. computer programming or other project-related data
      processing services;

   F. travel to cities outside New York City for client
      meetings or legal or other matters; and

   G. efforts related to the preparation of testimony and
      attendance at court hearings and the preparation of
      affidavits, certifications, fee applications, invoices and
      reports.

Innisfree's current hourly rates, which are subject to
adjustment based on the firm's ordinary billing practices, are:

           Position                  Rate
           --------                  ----
           Co-Chairman               $400
           Managing Director          375
           Practice Director          325
           Director                   275
           Account Executive          250
           Staff Assistant            175

With respect to mailings to any registered record holders of
debt or equity securities, Innisfree will charge $0.50 to $0.65
per holder for up to two paper notices included in the same
envelope with a $250 minimum.  This rate assumes that labels and
electronic data for these holders would be provided by the
Claims Agent.  With respect to mailings to holders of public
debt or equity security holders in "Street name," Innisfree will
charge a $7,500 fee to conduct the mailing.

Innisfree will also seek reimbursement from the Debtors for all
out-of-pocket expenses relating to the provision of services to
the Debtors including, without limitation, travel costs,
postage, messenger and courier charges, expenses incurred by
Innisfree to obtain or convert depository participant, creditor,
shareholder and Non-Objecting Beneficial Owner listings, and
costs for supplies, in-house photocopying, telephone usage and
the like. (Owens Corning Bankruptcy News, Issue No. 51;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


PARK PLACE ENTERTAINMENT: Promotes 2 Sr. Executives to EVP Posts
----------------------------------------------------------------
Park Place Entertainment Corporation (NYSE: PPE) promoted two
senior executives -- Senior Vice President and General Counsel
Bernard E. DeLury, Jr. and Senior Vice President for Human
Resources and Administration Steven F. Bell -- to executive vice
president positions.

"Bernie DeLury and Steve Bell are two of the most accomplished
executives with whom I've ever had the pleasure to work," said
Park Place President and Chief Executive Officer Wallace R.
Barr. "In their tenure at Park Place, both have demonstrated an
unusual gift -- strong strategic vision coupled with the ability
to keep things moving and get things done. I'm pleased to
welcome them to their new positions."

The promotions were approved Wednesday by the Park Place Board
of Directors at a meeting in Atlantic City, New Jersey.

With more than a dozen years of experience in the gaming
industry, DeLury has played a major role in the development of
Park Place since the company was created in December 1998.
Before he became the company's top lawyer earlier this year,
DeLury served as vice president and deputy general counsel,
responsible for Park Place's regulatory compliance and legal
operations.

Bell joined the company in 2001 to oversee the management of the
company's 54,000 employees at 27 casino resorts around the
world. His Human Resources responsibilities include recruitment,
training, development, diversity, benefits and compensation. In
addition, he leads the company's community relations activities,
corporate philanthropy initiatives and company-wide procurement
and purchasing organization.

A New Jersey native, DeLury previously served as general counsel
for Park Place casino resorts in New Jersey, Mississippi,
Indiana, Louisiana and the Canadian Provinces of Ontario and
Nova Scotia. He also served as counsel to several committees of
the company's Board of Directors. DeLury joined the legal
department of Bally's, Park Place's predecessor company, in
1990, following four years of service as an officer in the
United States Navy. He remains active in the U.S. Naval Reserve,
currently holding the rank of Commander.

DeLury is a member of the Board of Directors of the Atlantic
City Convention Center and Visitors Authority and an officer of
the International Association of Gaming Attorneys. He also is a
member of the U.S. Naval Institute and the Brigantine, New
Jersey Board of Education.

DeLury is associated with the New Jersey State and Atlantic
County Bar Associations, and is admitted to practice before the
United States Supreme Court, the United States Court of Appeals
for the Armed Forces and the United States Court of Appeals for
the Third District. He is a past chairman of the New Jersey
State Bar Association's Casino Law Section.

DeLury earned a Bachelor of Arts degree, magna cum laude, in
1982 from St. Charles Borromeo Seminary in Philadelphia,
followed by a Juris Doctor from Rutgers University School of Law
-- Camden in 1986. He lives in Brigantine, New Jersey, with his
wife and three children and regularly commutes to Las Vegas.

Steven F. Bell

In addition to his responsibilities at Park Place, Bell serves
as a member of the Board of Trustees of the Hotel Employees &
Restaurant Employees International Union Welfare-Pension Fund.
He also is a member of the Wharton Executive Education Advisory
Board for the Wharton School of Business at the University of
Pennsylvania.

Before joining Park Place, Bell was senior vice president for
human resources for Teligent, Inc., a pioneering
telecommunications start-up headquartered in Northern Virginia.
At Teligent, Bell was a key member of the leadership team that
launched and developed the company, supervising a human
resources organization responsible for recruiting 3,000
employees over a period of months.

Earlier, Bell served as vice president for human resources and
organizational development for Comsat Corporation in Bethesda,
Maryland. The company provides satellite communication services
for domestic and international customers. At the time, Comsat
owned the Denver Nuggets, the Colorado Avalanche and Beacon
Communications, a feature film production company.

Before joining Comsat, Bell was vice president for human
resources for American Express Corporation's technology
division, a worldwide organization that provides American
Express travel related services and data processing and
information management support. Previously, he held senior human
resources positions with Sprint International and Martin
Marietta Data Systems.

A native of Wareham, Mass., Bell earned a Bachelor of Science
degree at the University of Connecticut, and served as assistant
varsity basketball coach for his alma mater from 1972 to 1976.
Bell and his wife Donna live in Las Vegas.

Park Place Entertainment is one of the world's leading gaming
companies. Park Place owns, manages or has an interest in 27
gaming properties operating under the Caesars, Bally's,
Flamingo, Grand Casinos, Hilton and Paris brand names with a
total of approximately two million square feet of gaming space,
29,000 hotel rooms and 54,000 employees worldwide.

Additional information on Park Place Entertainment can be
accessed through the company's Web site at
http://www.parkplace.com

As reported in Troubled Company Reporter's April 17, 2003
edition, Fitch Ratings assigned a rating of 'BB+' to Park Place
Entertainment's proposed $300 million 7.0% senior notes due
2013. Proceeds are to be used to repay a portion of outstandings
under the revolving credit facility. The Rating Outlook is
Stable. The ratings reflect PPE's large and diversified asset
base, significant cash flow generating capabilities and focused
debt reduction. Offsetting factors include the threat of
significant new competition in Atlantic City in the summer 2003
(where the company derives 37% of its EBITDA), the uncertain
turnaround at Caesars Palace in Las Vegas, significant leverage,
limited visibility regarding near-term growth opportunities,
likely new gaming competition along states neighboring New
Jersey, the impact of tax increases from strapped state
governments and the potential for accelerated capital
expenditures and/or debt-financed acquisitions.


PEABODY ENERGY: Black Beauty Unit Inks New L-T Coal Supply Pacts
----------------------------------------------------------------
Peabody Energy (NYSE: BTU) has entered into a 12-year coal
supply agreement through its Black Beauty subsidiary.  The
agreement with an existing electricity generating customer
provides sourcing flexibility and runs through 2015, and will
enable development of an underground facility at the Francisco
Mine in Gibson County, Ind.

Black Beauty has also reached a separate five-year agreement
with a new electricity generating customer, calling for
approximately 1.5 million tons per year of additional coal
supplies from its Indiana operations to serve two generating
plants from 2005 through 2010.

The Francisco surface mine shipped 2.4 million tons of coal in
2002. Construction of the adjacent underground facility is
expected to begin in the third quarter of 2003, with shipments
beginning in 2004 at an initial rate of approximately 1 million
tons per year.

The agreements strengthen Peabody's industry-leading position in
Indiana and the Midwest, where Peabody has the number-one sales
position and controls 4.1 billion tons of low, medium and high
sulfur coal reserves.

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

                          *    *    *

As previously reported in Troubled Company Reporter, Fitch
Ratings assigned a 'BB+' to Peabody Energy's proposed $600
million revolving credit facility and a new $600 million bank
term loan and a 'BB' to its issuance of $500 million of senior
unsecured notes due 2013. The Rating Outlook remains Positive.
At the completion of Peabody's refinancing the rating on its
senior subordinated notes, currently rated 'B+', will be
withdrawn.


PENN TRAFFIC: Has Until Wed. to Appeal Nasdaq Delisting Decision
----------------------------------------------------------------
The Penn Traffic Company (Nasdaq: PNFT) received a notice from
Nasdaq on May 21, 2003, indicating that the Company has failed
to provide a copy of the Company's Annual Report on Form 10-K
for the fiscal year ending February 1, 2003 as required under
Nasdaq's Marketplace Rule 4310(C)(14).

Accordingly, the Company's common stock and warrants to purchase
common stock will be delisted from the Nasdaq at the opening of
business on May 30, 2003, unless the Company requests a hearing
in accordance with the Marketplace Rule 4800 Series. The Company
is considering various strategic alternatives and will determine
whether or not to request a hearing before the Nasdaq
Qualification Panel prior to 4:00 p.m. on May 28, 2003, the
deadline imposed by Nasdaq.

Penn Traffic common stock will continue to be traded on the
Nasdaq National Market until the close of business on May 29,
2003 under the symbol "PNFTE" and the warrants will trade under
the symbol "PNTWE" or, if the Company determines to request a
hearing before the Nasdaq Panel, until the Nasdaq Panel makes a
final decision. In such an instance, there can be no assurance
that the Nasdaq Panel will grant any Company request for
continued listing.

                           *     *     *

As reported in Troubled Company Reporter's May 22, 2003 edition,
the Company is considering all of its strategic alternatives,
including filing of a voluntary petition for reorganization
under Chapter 11 of the U.S. Bankruptcy Code upon it being able
to secure appropriate debtor in possession financing. The
Company is currently negotiating a DIP financing arrangement
that is expected to permit the Company to fund its continuing
operations; there can be, however, no assurance that the Company
will be able to secure such DIP financing.

                           Chapter 22

A chapter 11 filing by Penn Traffic at this juncture would be
the Company's second foray into the bankruptcy process.  On
March 1, 1999, Penn Traffic and certain of its subsidiaries
filed petitions for relief under Chapter 11 of the United States
Bankruptcy Code in the United States Bankruptcy Court for the
District of Delaware.  The Bankruptcy Cases were commenced to
implement a prenegotiated financial restructuring of the
Company.  On May 27, 1999, the Bankruptcy Court confirmed
the Company's Chapter 11 plan of reorganization and on June 29,
1999, the Plan became effective in accordance with its terms.


PERSONNEL GROUP: Annual Meeting Convening on June 18 in N.C.
------------------------------------------------------------
The 2003 annual meeting of the stockholders of Personnel Group
of America, Inc., a Delaware corporation, will be held at 9:30
a.m., local time, on June 18, 2003, at the Wyndham Garden Hotel,
2600 Yorkmont Road, Charlotte, North Carolina 28208, for the
following purposes:

   1. To elect three members to the Board of Directors, each to
      serve until his successor is duly elected and qualified;

   2. To approve and adopt a new incentive plan to replace the
      Company's existing stock option plan;

   3. To approve an amendment and restatement of the Certificate
      of Incorporation that will (i) effect a reverse stock split
      of Company common stock at a one-for-twenty-five ratio,
      (ii) eliminate provisions separating the Board of Directors
      into three classes and prohibiting action by consent of the
      common stockholders without a meeting, (iii) elect that the
      Company not be governed by Section 203 of the Delaware
      General Corporation Law, (iv) add minority stockholder
      protection provisions in connection with certain
      transactions with a stockholder that beneficially owns 20%
      or more of the shares of capital stock that are generally
      entitled to vote on matters submitted to the stockholders;
      (v) add provisions requiring a supermajority vote of the
      Board of Directors or stockholders to adopt changes to the
      Certificate of Incorporation or Bylaws and (vi) make other
      amendments set forth in the form of the proposed restated
      Certificate of Incorporation attached as Annex A to the
      proxy statement; and

  4. To ratify the selection of PricewaterhouseCoopers LLP as
     independent auditors for 2003.

At the annual meeting, stockholders will also consider and act
upon any and all other business that may properly come before
the annual meeting or any adjournment of the meeting.

Holders of record of common stock or outstanding preferred stock
at the close of business on April 28, 2003 are entitled to
notice of, and to vote at, the annual meeting.

At December 29, 2002, the Company's balance sheet shows a total
shareholders' equity deficit of about $52 million (a positive
$52 million, after pro forma adjustments).


PHYSICIANS HEALTH: A.M. Best Assigns Initial B FS Rating
--------------------------------------------------------
A.M. Best Co. has assigned an initial financial strength rating
of B (Fair) to Physicians Health Plan of Northern Indiana, Inc.
(Fort Wayne, IN). The rating outlook is stable.

The rating reflects PHPNI's position as a niche player in the
northeastern region of Indiana, a diversified distribution
network, a strong integrated provider network and a distinctive
operating profile. Offsetting these strengths are persistently
unfavorable underwriting performances, divergence between strong
premium growth and reduced capital levels, diminished investment
returns and its susceptibility to both geographic and
legislative risks.

PHPNI has exhibited good premium growth, which is complemented
by a strong provider network, price increases and a competitive
management strategy. For its size, the company controls a
measurable percentage of the managed care business in the Allen
County region in northeastern Indiana. PHPNI's physician
controlled operating profile and product bundling mechanism
makes it attractive to small group insurance buyers, which is a
formidable barrier for competitors to overcome.

PHPNI competes on price and high quality services, while
managing periodic financial results to near break-even levels.
This impact has limited capital development even at a time when
the health insurance industry is experiencing strong earnings
growth. Increasing underwriting leverage usually serves as a
precursor to weakening capital. Underwriting performance has
been unfavorable, while capital growth continues to slide. The
prolonged turbulence of the financial markets has created a
shortfall in planned investment income, which has had an
unfavorable effect on PHPNI's net income.

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


JAMES G. PIERCE: Case Summary & 17 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: James Grant Peirce
         Dba J-Tech
         Dba Peirce Consulting
         Dba Integrated Engineering
         6109 Kerry CRT
         Madison Lake, Minnesota 56063

Bankruptcy Case No.: 03-43619

Type of Business: Consulting/manufacturing

Chapter 11 Petition Date: May 16, 2003

Court: District of Minnesota (Minneapolis)

Judge: Nancy C. Dreher

Debtors' Counsel: Pro Se

Total Assets: $27,391,340

Total Debts: $1,144,213

Debtor's 17 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Curtiss, Paul & Denna       Contract                  $388,774
5115 139th Avenue
Savage, MN 55378
Tel: 952-894-1713

Homecoming Fin. Network     Contract                   $73,209

CIT Group/Equipment         Contract                   $35,904

Internal Rev. Service       Tax                        $11,261

Leonard Street & Dienard    Legal Services             $10,890

Dudley & Smith              Legal Services             $10,294

First USA                   Credit Card                 $7,800

Providin                    Credit Card                 $7,597

Thomas & Association        Legal Services              $5,000

American Express            Credit Card                 $4,700

Discovery Fin'l Services    Credit Card                 $4,700

MN Dept. of Revenue         Tax                         $2,395

Capital One Bank            Credit Card                 $1,900

Lyle's Welding              Services                    $1,350

Prof. Credit Ana            Third Party Collector       $1,200

Key City Insurance          Insurance                     $900

A to Z Rental               Services                      $386


PNC RMBS: Fitch Upgrades & Affirms Ratings from Securitizations
---------------------------------------------------------------
Fitch Ratings has taken rating actions on the following PNC
Mortgage Securities Corp., mortgage pass-through certificates:
PNC Mortgage Securities Corporation, mortgage pass-through
certificates, series 1998-1 Group II

         -- Class II-B-1 affirmed at 'AAA';
         -- Class II-B-2 upgraded to 'AAA' from 'AA+';
         -- Class II-B-3 upgraded to 'AAA' from 'A+';
         -- Class II-B-4 upgraded to 'AA+' from 'BBB-';
         -- Class II-B-5 upgraded to 'A+' from 'B'.

PNC Mortgage Securities Corporation, mortgage pass-through
certificates, series 1999-1 Group I

         -- Class I-B-1 affirmed at 'AAA';
         -- Class I-B-2 affirmed at 'AA';
         -- Class I-B-3 affirmed at 'A+';
         -- Class I-B-4 affirmed at 'BBB';
         -- Class I-B-5 affirmed at 'B'.

PNC Mortgage Securities Corporation, mortgage pass-through
certificates, series 1999-1 Group II

         -- Class II-B-1 affirmed at 'AAA';
         -- Class II-B-2 upgraded to 'AAA' from 'AA';
         -- Class II-B-3 upgraded to 'AA' from 'A+';
         -- Class II-B-4 affirmed at 'BBB';
         -- Class II-B-5 affirmed at 'B'.

PNC Mortgage Securities Corporation, mortgage pass-through
certificates, series 1999-1 Groups III, IV, & V

         -- Class C-B-1 affirmed at 'AAA';
         -- Class C-B-2 upgraded to 'AAA' from 'AA';
         -- Class C-B-3 affirmed at 'BBB';
         -- Class C-B-4 affirmed at 'BB';
         -- Class C-B-5 affirmed at 'B-'.

These rating actions are being taken as a result of low
delinquencies and losses, as well as increased credit support.


POWER EFFICIENCY: Scant Liquidity Prompts Going Concern Doubts
--------------------------------------------------------------
Power Efficiency Corporation generates revenues from a single
business segment: the design, development, marketing and sale of
proprietary solid state electrical components designed to reduce
energy consumption in alternating current induction motors. The
Company began generating revenues from sales of its patented
Power Commander1 line of motor controllers in late 1995. As of
March 31, 2003, Power Efficiency had total stockholders' equity
of $1,543,214 primarily due to its sale of 2,346,233 shares of
Series A-1 Convertible Preferred stock to Summit Energy
Ventures, LLC in June 2002, which resulted in Summit owning a
28% fully diluted stake in the Company. In addition, in August
2000, the Company purchased the assets of Percon, formerly the
largest distributor of Power Efficiency's products. The
transaction was accounted for as a purchase and the Company's
Statements of Operations includes Percon's results of operations
since the date of acquisition. The consolidation of the
operations of both entities allowed Power Efficiency to
integrate the administrative, sales, marketing and manufacturing
operations of Percon. Percon had developed sales contacts with
major OEM's in the elevator/escalator industry and transferred
those agreements to Power Efficiency as part of the Asset
Agreement.

The Company's revenues for the three months ended
March 31, 2003, were $160,843 compared to $139,142 for the three
months ended March 31, 2002, an increase of $21,701, or 15.6%.

Cost of revenues, which includes costs related to raw materials
and manufacturing costs, for the three months ended
March 31, 2003, increased $4,710 to $129,506 from $124,796 or a
3.8% increase as compared to the three months ended March 31,
2002. The increase in cost of revenues was primarily attributed
to the increase in revenues and offset by an overall reduction
in the cost of materials from the Company's suppliers.

Research and development expenses were $98,465 for the three
months ended March 31, 2003, as compared to $83,547,
representing a $14,918 or a 17.9%, increase compared to the same
period ended March 31, 2002. The development of the low cost,
low horsepower Platform A product family, the single-phase
controller, and the fast-reaction integrator board continues to
contribute to the higher costs of research and development
costs.

Since inception, Power Efficiency has financed its operations
primarily through the sale of its equity securities and using
bank borrowings. As of March 31, 2003, the Company had received
a total of approximately $4,831,261 from public and private
offerings of its equity securities and received approximately
$445,386 under a bank line of credit, which was repaid during
2002. As of March 31, 2003, the Company had cash and cash
equivalents of $4,655.

Cash used for operating activities for the three months ended
March 31, 2003 was $325,582, which primarily consisted of: a net
loss of $439,492; less depreciation and amortization of $33,585,
offset by decreases in accounts receivable of $2,723 and
inventory of  $32,674; and increases in accounts payable and
accrued expenses of $47,364.

Net cash used for operating activities in for the three months
ended March 31, 2002 was $151,070, which primarily consisted of:
a net loss of $334,068; less depreciation and amortization of
$31,429; increases in accounts receivable of $83,188 and prepaid
expenses of $5,918, offset by a decrease in inventory of
$57,755; and increases in accounts payable and accrued expenses
of $182,920.

Cash used in investing activities for the first quarter of the
current fiscal year was $6,160, compared to $1,504 in the first
quarter of last fiscal year. The amounts for both years
consisted of the purchase of fixed assets.

Net cash provided by financing activities for the first quarter
of fiscal year 2003 was $78,689, which primarily consisted of
proceeds from the exercise of stock warrants from the issuance
of equity securities. During the first quarter of fiscal year
2002, net cash provided from financing activities was $117,822,
which were loans from stockholders and officers.

The Company has indicated that it expects to experience growth
in its operating expenses, particularly in research and
development and selling, general and administrative expenses,
for the foreseeable future in order to execute its business
strategy. As a result, the Company anticipates that operating
expenses will constitute a material use of any cash resources.

Since capital resources are insufficient to satisfy its
liquidity requirements, management intends to sell additional
equity or debt securities or obtain debt financing. The Company
is currently in the process of negotiating a $1,000,000 debt
facility with Summit Energy Ventures, LLC. The Board of
Directors has approved the terms of the proposed financing but
the Company is currently waiting for Summit's investment
committee to approve the financing. According to the terms of
the proposed financing, the outstanding balance would accrue
interest at a rate of 15 percent and would be convertible into
Series A Preferred Stock at a price per share of $0.183 if,
after seven (7) days notice by Summit, the outstanding balance
is not paid off. The outstanding balance will be due on December
31, 2003 and will be secured by all of Power Efficiency's
assets. The Company is also currently meeting with many
different potential equity investors and believes it can raise
additional funds through private placements of equity.

Power Efficiency management anticipates a substantial need for
cash to fund its working capital  requirements. In accordance
with its prepared expansion plan, it is the opinion of
management that approximately $1.3 million will be required to
cover operating expenses, including, but not limited to,
marketing, sales and operations during the next six months.

The Company has suffered recurring losses from operations, and
there is a deficiency in tangible net worth of approximately
$515,000. The Company experienced a $325,000 deficiency from
operations, continues to have negative cash flow from operations
and lacks sufficient liquidity to continue operations. The
Company is currently in negotiations on the $1,000,000 line of
credit but there can be no assurance that it will close this
transaction or secure another line of credit. These factors
raise substantial doubt about the Company's ability to continue
as a going concern.  Continuation of the Company as a going
concern is dependent upon achieving profitable operations.


RAILAMERICA: S&P Affirms BB- Corp. Credit Rating; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on
RailAmerica Inc., including its 'BB-' corporate credit rating,
and removed the ratings from CreditWatch, where they were placed
May 15, 2003. The rating action follows RailAmerica's
announcement that it has decided not to proceed with a tender
offer for New Zealand-based Tranz Rail Holdings Ltd. Boca Raton,
Florida-based RailAmerica, the largest short-line/regional rail
operator in North America, has about $600 million of lease-
adjusted debt. The outlook is stable.

"Ratings reflect the company's aggressive debt leverage and the
potential for debt-financed acquisitions, partly offset by its
position as the largest owner and operator of short-line
(regional and local) freight railroads in North America and the
favorable risk characteristics of the U.S. freight railroad
industry," said Standard & Poor's credit analyst Lisa Jenkins.

RailAmerica, which generated $428 million of revenues in 2002,
has a geographically diverse business profile. The firm owns a
large number (currently 49) of short-line freight and regional
railroads with approximately 12,900 miles of track in North
America, Australia, and Chile. In January 2003, RailAmerica
announced its intention to sell its 55% equity interest in its
Chilean rail operation, Ferronor. The company also plans to sell
other nonstrategic and noncore assets in North America and
Australia. Excluding Ferronor, 78% of 2002 revenues were derived
from North American rail operations and 22% from Australian rail
operations.

Upside rating potential is limited by the company's aggressive
acquisition strategy. Downside risk is limited by the company's
good track record of integrating acquisitions and achieving
operational efficiencies and management's commitment to
improving the financial profile of the company.


RYLAND GROUP: Fitch Affirms Senior Unsecured Debt Rating at BB+
---------------------------------------------------------------
Fitch Ratings affirms Ryland Group, Inc.'s (NYSE: RYL) 'BB+'
senior unsecured debt (senior notes and revolving credit
agreement) and also affirms the 'BB-' rating on the senior
subordinated notes. The Rating Outlook has been changed to
Positive from Stable.

This change reflects Ryland's solid, consistent, internally
generated profit performance in recent years (as well as over
the past decade), the successful execution of its business
model, moderate financial policies and geographic and product
line diversity. Over recent years the company has improved its
capital structure, pursued conservative capitalization policies
and has positioned itself to withstand a meaningful housing
downturn. Risk factors include the inherent cyclical nature of
the homebuilding industry.

The company has demonstrated solid margin improvement since the
mid-1990s, with EBITDA margins expanding from 4.2% in 1995 to
8.6% in 2000 and then 11.9% in 2003. Although Ryland has
certainly benefited from strong economic conditions, a degree of
margin enhancement is also attributed to purchasing, design and
engineering, access to capital and other scale economies that
have been captured by the large national public homebuilders in
relation to second-tier, private builders. The company's
significant ranking (within the top five or top ten) in most of
its markets, which are among the stronger housing growth
locations in the country, enables it to more easily access prime
land and labor to the advantage of margins. These economies,
Ryland's resale operating strategy and a return on capital focus
provide the framework to soften the margin impact of declining
market conditions in comparison to previous cycles. Acquisitions
have not played a part in the company's operating strategy, as
management has preferred to focus on internal growth.

Ryland's inventory turns remain strong in comparison to the
industry, demonstrating the company's ability to generate
liquidity from its inventory base. Inventory/net debt stood at
3.5 times at May 31, 2003, substantially above levels of the
mid-1990s, providing a strong buffer against a downturn in
economic conditions. The company maintains an approximate four-
year supply of lots, 45% of which are owned and the balance
controlled through options. Speculative housing represents only
10% of inventory.

Debt-to-capital steadily decreased from 56.8% at the end of 1995
to 46.6% in 2001. The ratio slipped to 41.9% at the close of
2002 and was 41.2% at March 31, 2003. Over the longer term debt-
to-capital is expected to be maintained within the company's
targeted range of 45-50%. The strong state of the housing sector
and Ryland's measured pace of reinvestment have led to
substantial cash accumulation that totaled approximately $161.4
million as of March 31, 2003. Net debt-to-capital was 32.0% as
of the end of the first quarter of 2003, a level considered very
strong for the rating.

Ryland maintains a $300 million revolving credit agreement (with
an accordion feature which can increase the facility up to $400
million) that is currently unused. The company's cash position
indicates that this facility may remain unused over the near
term. Share repurchases are likely to continue at generally
moderate levels. The company has no long-term debt maturities
until 2006.


SAFETY-KLEEN: San Juan Cement Rejecting Houston Port Lease
----------------------------------------------------------
Safety-Kleen Systems, Inc., asks Judge Walsh to authorize its
subsidiary, San Juan Cement Company, to reject an unexpired non-
residential property lease with Houston Authority of Harris
County, Texas, as landlord under the name Port of Houston
Authority.

On August 18, 1994, POHA and Mid-Continental Fuel Company, Inc.,
signed a Lease Agreement for approximately 2.9 acres of the Bulk
Liquid Terminal located at 1606 Clinton Drive in Galena Park,
Texas.  The POHA Lease commenced on September 1, 1994, and will
expire on August 31, 2004.  On June 1, 1996, Mid-Continental
assigned all rights, title and interest in the POHA Lease to
Safety-Kleen Systems.  Systems used the Galena Property for the
conversion of used oil into an on-specification fuel and the
blending of ship and other bunker-type fuel oils. Occasionally,
Systems also subleased some of the tanks for storage of
petroleum products.  The POHA Lease was subsequently amended to
give Systems the option to lease an additional 2 acres of
property adjacent to the Galena Property.

Under the POHA Lease, Systems is to pay a base monthly rent
equal to $6,750,000, as well as landlord tariffs equal to $1,800
per month. Moreover, under the POHA Lease, Systems is required
to handle, over Port Authority wharves, an annual minimum
tonnage equal to 100,000 tons with wharfage on any deficit
tonnage amount to be paid to POHA within 30 days after the end
of the contract year, based on the then-current applicable
tariff rates.

As a result of changes in business practices, competition and
the Debtors' bankruptcy filings, the volume of Systems' used oil
collection in the Houston area declined substantially.  Thus,
the real estate, tankage and barge docks covered by the POHA
Lease are no longer required for Systems' overall business
operations.  Moreover, despite the reduced through-put rates,
Systems is nonetheless required to pay the wharfage charges,
which amount to approximately $96,000 per year, for the
guaranteed 100,000 tons of wharfage required under the POHA
Lease.  Thus, rejecting the POHA Lease effective June 1, 2003,
will free Systems from current rent expenditures that deliver no
corresponding benefit.

The Debtors have considered alternatives to rejection, including
the possibility of assigning the POHA Lease to a third party.
However, under current law, the POHA cannot automatically extend
the agreement with its current financial terms beyond the
expiration date of the POHA Lease, unless certain requirements,
like competitive bidding, are satisfied, which makes it
difficult to find a sublessee willing to invest money to make
the terminal suitable for its needs when the POHA lease is to
expire next year. (Safety-Kleen Bankruptcy News, Issue No. 57;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


SALOMON BROS.: S&P Lowers Series 1998-AQ1 Class B-3 Rating to B
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on 12
classes from five series of Salomon Brothers Mortgage Securities
VII Inc.'s mortgage pass-through certificates. Concurrently,
Standard & Poor's lowered its rating on series 1998-AQ1 class B-
3 to 'B' from 'BB'. In addition, ratings are affirmed on
158 classes from 48 other series from the same issuer.

The raised ratings reflect actual and projected credit support
percentages that adequately support the higher ratings. The
higher credit support percentages are attributable to the
seasoning of the mortgage pools, significant principal
prepayments, and the shifting interest structure of the
transactions.

The growth in the credit support percentages to the classes with
raised rating in series 2000-1 is mainly due to a shifting
interest structure that benefited from significant principal
prepayments and no realized losses. As of the April 2003
remittance date, approximately 23% of the pool and 22% of the
principal balance of the senior class were outstanding. The
three transactions issued in 1999 also benefited from a
shifting interest structure and principal prepayments. However,
the growth in credit support percentages was further enhanced by
the delinquency triggers, which prevented the
overcollateralization from stepping down. Therefore, each
transaction will continue to pay sequentially. The growth
in the credit support percentages in series 1993-9 was mainly
due to approximately 10 years of seasoning, low delinquencies
(one loan 30-plus days delinquent), and less than 0.01% in
realized losses.

The lowered rating on series 1998-AQ1's class B-3 reflects the
continuing erosion of the class's credit support. This
transaction has been realizing net losses, averaging
approximately $334,000 per month during the most recent 12
months, while total delinquencies averaged approximately 14.20%
per month during the same period. Moreover, serious
delinquencies (90-plus, foreclosure, and real estate owned)
averaged about 10.96% a month during the same period. The rating
is being monitored monthly and will be adjusted accordingly to
reflect the remaining credit support available to the class.

The affirmed ratings reflect actual and projected credit support
percentages that adequately support the current ratings.

As of the April 2003 remittance date, total delinquencies for
the prime transactions ranged from 0.00% (seven transactions) to
22.13% for series 1994-1; however, this transaction only had an
outstanding pool balance of approximately 2.43%, while more than
two-thirds (22 of 32) of the prime transactions had total
delinquencies below 10%. Cumulative realized losses ranged from
0.01% (series 1993-9) to 1.25% (series 1994-11).

Total delinquencies for the subprime transactions ranged from
9.35% (series 1997-LB6) to 41.24% (series 1999-LB1). Cumulative
realized losses ranged from 0.65% (series 2001-2) to 4.42%
(series 1998-NC4). The transactions are structured with
overcollateralization and excess spread, as credit support has
been generating sufficient excess interest cash flow to cover
losses in most cases. Furthermore, these transactions are at
their respective overcollateralization targets.

Most transactions issued before 1997 are of prime credit quality
and are backed by fixed- or adjustable-rate mortgage loans with
original terms from 10 to 30 years. These mortgage loans are
secured by first-liens on one- to four-family residential
properties. Since 1997, the collateral types have largely been
of B and C subprime credit quality, and backed by 30-year fixed-
or adjustable-rate mortgage loans, which are secured by first
liens on one- to four-family residential properties.

                         RATINGS RAISED

         Salomon Brothers Mortgage Securities VII Inc.
               Mortgage pass-through certificates

                                      Rating
         Series     Class         To           From
         ------     -----         ---          ----
         1993-9     B-1           AAA          AA+
         1993-9     B-2           AA           AA-
         1993-9     B-3           A+           A
         1993-9     B-4           BBB-         BB
         1999-AQ1   M-1           AAA          AA+
         1999-AQ1   M-2           AA           A+
         1999-AQ2   M-1           AAA          AA
         1999-AQ2   M-2           AA           A
         1999-LB1   M-1           AAA          AA+
         1999-LB1   M-2           AA           A
         2000-1     B-1           AA+          AA
         2000-1     B-2           A+           A

                        RATING LOWERED

         Salomon Brothers Mortgage Securities VII Inc.
              Mortgage pass-through certificates

                                      Rating
         Series     Class         To           From
         ------     -----         ---          ----
         1998-AQ1   B-3           B            BB

                       RATINGS AFFIRMED

         Salomon Brothers Mortgage Securities VII Inc.
              Mortgage pass-through certificates

      Series     Class                                    Rating
      ------     -----                                    ------
      1992-6     A-1, A-2                                  AAA
      1992-6     M                                         AA+
      1993-1     G, H-Z, PO, XS, M                         AAA
      1993-7     A                                         AA+
      1993-8     A, XS                                     AAA
      1993-9     A-2                                       AAA
      1993-9     B-5                                       B
      1994-1     B-1, B-2                                  AAA
      1994-2     A-1, A-2, XS-1, XS-2                      AAA
      1994-5     B-1, B-2                                  AAA
      1994-4A    4A-A                                      AA+
      1994-7     7-A, 7-XS                                 AAA
      1994-8     8-A, 8-XS                                 AAA
      1994-11    A, IO, PO                                 AAA
      1994-12    12-A, 12-XS                               AAA
      1994-13    13-A, 13-XS                               AAA
      1994-15    A-5                                       AAA
      1994-16    A, XS                                     AAA
      1994-17    A                                         AAA
      1994-18    A-5, IO, PO, B-1                          AAA
      1994-18    B-2                                       AA+
      1994-18    B-3                                       BBB
      1994-19    A                                         AAA
      1994-20    A                                         AAA
      1995-1     A-5, PO, XS                               AAA
      1996-2     A-7, PO, XS                               AAA
      1996-4A    4A-A1, 4A-A2                              AAA
      1996-4B    4B-A2                                     AAA
      1996-4C    4C-A2                                     AAA
      1996-4D    4D-A1, 4D-A3, 4D-A4                       AAA
      1996-5     A                                         AAA
      1996-6A    6A-A1, 6A-A2                              AAA
      1996-6E    6E-A1, 6E-A2                              AAA
      1996-6I    6I-A1                                     AAA
      1996-6J    6J-A1                                     AAA
      1996-8     A-1                                       AAA
      1996-LB2   A-8, PO, XS, B-1                          AAA
      1996-LB2   B-1                                       BBB-
      1997-LB2   A-6, A-9, XS, B-1                         AAA
      1997-LB2   B-2                                       AA-
      1997-LB2   B-3                                       BBB
      1997-LB6   A-5, A-6, XS                              AAA
      1997-LB6   B-1                                       AA+
      1997-LB6   B-2                                       A
      1997-LB6   B-3                                       BBB
      1997-NC5   A, M-1                                    AAA
      1998-AQ1   A-4,A-5,A-6,A-7 XS-N,XS-S,XS-T            AAA
      1998-AQ1   B-1                                       AA
      1998-AQ1   B-2                                       A
      1998-NC1   A, M-1                                    AAA
      1998-NC2   M-1                                       AAA
      1998-NC3   A-4,A-5,A-6                               AAA
      1998-NC3   M-1                                       AA
      1998-NC3   M-2                                       A
      1998-NC4   M-1                                       AAA
      1998-NC4   M-2                                       A
      1998-NC7   A-5, A-6, A-7                             AAA
      1999-1     A-2,A-3,A-4,A-8,A-9,A-10,A-11,A-12        AAA
      1999-2     A1-2,A1-3,A1-4,A1-5,A1-6,A2,IO,PO         AAA
      1999-3     A                                         AAA
      1999-3     M-1                                       AA+
      1999-3     M-2                                       A+
      1999-3     M-3                                       BBB
      1999-6     A-1, A-2, A-3                             AAA
      1999-AQ1   A                                         AAA
      1999-AQ1   M-3                                       BBB
      1999-AQ2   A-1, A-2                                  AAA
      1999-AQ2   M-3                                       BBB
      1999-LB1   A-1                                       AAA
      1999-LB1   M-3                                       BBB
      1999-NC1   A-1, A-2                                  AAA
      1999-NC1   M-1                                       AA
      1999-NC1   M-2                                       A
      1999-NC1   M-3                                       BBB
      1999-NC2   A                                         AAA
      1999-NC2   M-1                                       AA+
      1999-NC2   M-2                                       A
      1999-NC2   M-3                                       BBB
      2000-1     A-1, A-2, IO, PO                          AAA
      2000-1     B-3                                       BBB
      2000-UP1   A-1, A-2                                  AAA
      2001-2     A                                         AAA
      2001-2     M-1                                       AA
      2001-2     M-2                                       A
      2001-2     M-3                                       BBB


SILICON GRAPHICS: Initiates Restructuring Actions to Slash Costs
----------------------------------------------------------------
Silicon Graphics, Inc., (NYSE: SGI) is implementing an action
plan to lower costs and shift focus to specific growth areas.
The goal of the plan is to align the Company resources to better
match market conditions while continuing to provide a product
roadmap that meets the high-performance computing, storage and
visualization needs of our target customers.

The plan includes the elimination of approximately 400
positions, or 10% of the company's employees, in specific areas.
The reduction is intended to preserve customer-facing
activities, protect customer investments, and accelerate a
return to profitability.

The effect of the reduction will be to reduce quarterly expenses
by approximately $10 million, beginning with the quarter ending
September 26, 2003. The savings will be achieved through a
combination of operating expense reductions and improvements in
gross margin. SGI plans to record a charge of approximately $15
to 20 million in the quarter ending June 27, 2003 relating to
this restructuring activity. The charge will principally consist
of severance costs paid over the next several months, and as a
result does not represent a significant incremental cash
expenditure.

"Despite encouraging recent developments including the growth of
SGI's defense sector business and the early success of the Altix
line of superclusters and servers, our revenue performance has
been lower than expected, reflecting a difficult market for
large industrial systems sales," said Bob Bishop, chairman and
CEO of SGI. "Today's announcement reflects our determination to
take the steps required to improve the Company's financial
position and reduce its breakeven point. Our intent is to bring
expenses in line with revenues. We are in the process of taking
other specific actions to increase revenue and lower costs."

SGI, also known as Silicon Graphics, Inc., is the world's leader
in high-performance computing, visualization and storage. SGI's
vision is to provide technology that enables the most
significant scientific and creative breakthroughs of the 21st
century. Whether it's sharing images to aid in brain surgery,
finding oil more efficiently, studying global climate or
enabling the transition from analog to digital broadcasting, SGI
is dedicated to addressing the next class of challenges for
scientific, engineering and creative users. SGI was named on
FORTUNE magazine's 2003 list of "Top 100 Companies to Work For."
With offices worldwide, the company is headquartered in Mountain
View, California, and can be found on the Web at
http://www.sgi.com

At March 28, 2003, Silicon Graphics Inc.'s balance sheet shows a
total shareholders' equity deficit of about $142 million.


SIMON TRANS: Holme Roberts Serves as Special Tax Counsel
--------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Simon
Transportation Services, Inc.'s chapter 11 cases sought and
obtained approval from the U.S. Bankruptcy Court for the
District of Utah to employ Holme Roberts & Owen LLP as Special
Counsel for the Official Committee of Unsecured Creditors.

The Committee has determined the necessity of employing special
tax counsel to:

      a. Pursue the tax appeal of Dick Simon Trucking, Inc.,
         currently pending before the Utah Supreme Court. The Tax
         Appeal represents a tax dispute arising from fiscal
         years 1992 through 1995.

      b. Represent the Committee in Dick Simon's tax appeal,
         may also include tax disputes arising from fiscal years
         1996 through 1999, however, it is anticipated that the
         disputes arising from fiscal years 1996 through 1999
         will be resolved by the decision of the Utah Supreme
         Court on the pending Tax Appeal.

Holme Roberts will bill its customary hourly rates in exchange
of its services.  The professionals who will be principally
assigned in this retention and their current hourly rates are:

           Mark K. Buchi           $395 per hour
           Steven P. Young         $250 per hour

Simon Transportation Services Inc., a truckload carrier
providing nationwide, predominantly temperature-controlled
transportation services for major shippers, field for Chapter 11
protection on February 25, 2002 (Bankr. Ut. Case No. 02-22906).
Scott J. Goldstein, Esq., at Spencer Fane Britt & Browne LLP
represents the Debtors in their restructuring efforts.  When the
Debtors filed for protection from its creditors, it listed
$132,242,081 in assets and $135,898,793 in liabilities.


SPECTRASITE: Taps Travis Morey & Todd Cast to Lead Sales Force
--------------------------------------------------------------
SpectraSite Communications, a subsidiary of SpectraSite, Inc.
(Ticker Symbol: SPCS), announced the addition of two new
National Account Vice Presidents to its nationwide sales force.

Travis Morey and Todd Cast round out a National Account team of
four Vice Presidents--each assigned to manage and build
SpectraSite's relationships with major carriers nationwide.

Travis Morey joins SpectraSite from Nextel Communications, where
he most recently held the position of National Senior Director
of the Tower Assets Group. His five years at Nextel were
preceded by various management positions at Nextwave Wireless
and AT&T Wireless. As National Account Vice President, Morey
will primarily focus on the Nextel and Nextel Partners accounts.

Todd Cast joins the Company as National Account Vice President,
primarily focusing on the T-Mobile and Cingular accounts. Since
1999, Cast has been employed with Sprint Sites USA, where he was
the National Accounts and Sales Manager responsible for
developing national relationships with all of the major wireless
carriers. Prior to his experience at Sprint Sites, Cast held
several management positions within Rohn, Inc. and Andrew
Corporation.

Morey and Cast join SpectraSite's existing National Account
team, which includes Robert Anderson and Brian Porter--both in
Vice President roles. Morey and Cast will report to Robert
Glosson, Senior Vice President of Sales & Marketing. Glosson has
been with SpectraSite since 2000, formerly leading the Company's
Building Solutions sales team. Prior to that, he was with
Vanguard Cellular as Regional Sales Manager & Director, Paging
Services.

Morey and Cast will work closely with SpectraSite's existing
sales management team, which includes Michael Young, Vice
President, Building Solutions Sales, and Daniel C. Agresta III,
Vice President, Collocation Sales.

Agresta heads up the nationwide Collocation Sales team. He
joined SpectraSite in 1999, and has over seven years experience
in the tower sector in various site development, M&A, and sales
management positions.

Young leads SpectraSite's Building Solutions sales team. He
spent eight years with Vanguard Cellular before joining
SpectraSite in July 2000 as a Regional Sales Director for
Building Solutions. While at Vanguard (which was later acquired
by AT&T Wireless), Young was the Market Manager for the
Northeastern Pennsylvania market.

Glosson commented on the strength of SpectraSite's sales team.
"Over the past several quarters, we have continued to build
strong relationships with our customers and make excellent
progress in our endeavors. And we've delivered consistent
performance quarter by quarter," said Glosson. "With this team
in place, we are well positioned to deliver service excellence
to our customers well into the future."

SpectraSite, Inc. -- http://www.spectrasite.com-- based in
Cary, North Carolina, is one of the largest wireless tower
operators in the United States. At March 31, 2003, SpectraSite
owned or operated over 18,000 sites, including 7,488 towers
primarily in the top 100 markets in the United States.
SpectraSite's customers are leading wireless communications
providers and broadcasters, including AT&T Wireless, ABC
Television, Cingular, Nextel, Paxson Communications, Sprint PCS,
Verizon Wireless and T-Mobile.

As reported in Troubled Company Reporter's May 15, 2003 edition,
Standard & Poor's Ratings Services assigned its 'CCC+' senior
unsecured rating to Cary, North Carolina-based tower operator
SpectraSite Inc.'s $150 million senior notes due 2010, to be
issued under Rule 144A, with registration rights. Proceeds will
be used to repay a portion of the company's secured bank
debt.

At the same time, Standard & Poor's affirmed its 'B' corporate
credit rating on SpectraSite and its 'B+' secured bank loan
rating on wholly owned operating subsidiary SpectraSite
Communications Inc. As of March 31, 2003, the company had about
$707 million of total debt outstanding. The outlook is stable.

"The unsecured debt issue is two notches lower than the
corporate credit rating, reflecting the significant
concentration of secured bank debt in the capital structure, at
approximately $560 million, pro forma for pay-down, with
proceeds from this new unsecured debt issue," said credit
analyst Catherine Cosentino.

The 'B' corporate credit rating reflects the lower relative debt
levels of SpectraSite compared with its rated peers after its
emergence from bankruptcy. As a result, all of the other tower
operators are rated 'B-' or lower. A favorable risk factor is
that wireless companies may have few feasible alternatives to
using SpectraSite's towers: existing tenants might choose to
build their own towers (an expensive undertaking), or lease from
another company, but both could involve major system
reengineering.


SUN HEALTHCARE: Clock Ticks toward May 30 Foreclosure Sale
----------------------------------------------------------
Sun Healthcare Group, Inc. disclosed last week that Dallas
Lease & Finance, L.P., is ready to foreclose on the collateral
pledged to secure repayment of its loans.  The foreclosure sale
is scheduled to occur at 11:00 a.m. this Friday, May 30, 2003,
at the offices of Haynes & Boone, LLP, located at 901 Main
Street, Suite 3100 in Dallas, Texas.

                        The Loan Agreement

Dallas Lease & Finance, L.P. is an affiliate of Highland Capital
and the administrative agent under the Term Loan and Note
Purchase Agreement between Sun and various lenders.  The Term
Loan Agreement is comprised of a three-year $20.0  million term
loan and a three-year $23.7 million original issue discount note
of which Sun's borrowing capacity was limited to $20.0 million.
The Term Loan Agreement is secured primarily by a first security
pledge of the stock of subsidiaries that provide pharmaceutical
services and a second priority security interest in
substantially all of Sun's other assets.  Sun received all funds
available under the Term Loan Agreement at the time it emerged
from bankruptcy on February 28, 2002, and no additional funding
was or is anticipated under the Term Loan Agreement.

Dallas Lease has declared the entirety of the Term Loan to be
due and payable.

                    The Collateral to be Sold

Highland Capital intends to sell:

      (A) all of SunFactors, Inc., interests in and to:

          (1) Advantage Health Services, Inc.
          (2) HoMed Convalescent Equipment, Inc.
          (3) Pharmacy Factors of California, Inc.
          (4) Pharmacy Factors of Florida, Inc. and
          (5) Pharmacy Factors of Texas, Inc.

      (B) all of SunScript Pharmacy Corporation's interests in
          and to SunFactors, Inc.,

      (C) all of Sun Healthcare Group, Inc.'s interests in and to
          SunScript Pharmacy Corporation,

      (D) all of First Class Pharmacy, Inc.'s interests in and to
          Executive Pharmacy Services, Inc., and

      (E) all of Regency Health Services, Inc.'s interests in and
          to First Class Pharmacy, Inc.

Highland invites interested buyers to contact Patrick Daugherty
at (972) 628-4100 for more information about the collateral, the
loan, bidding procedures and the sale process.

                         Talks Continue

The Company is currently negotiating with the term lenders and
administrative agent toward a forbearance agreement.

Richard K. Matros, chairman and chief executive officer of the
Company, stated, "We are in the midst of discussions with our
lenders to address their concerns sufficiently to allow the term
lenders to withdraw the acceleration of the Term Loan and
forbear from exercising their remedies. The Company will
continue to take all actions required to create the greatest
possible value for all of its constituents and stakeholders."

                     About Sun Healthcare

Headquartered in Irvine, California, Sun Healthcare Group, Inc.
(OTC BB: SUHG) owns many of the country's leading healthcare
providers.  Through  its wholly owned SunBridge Healthcare
Corporation subsidiary and its affiliated companies, Sun's
affiliates together operate more than 200 long-term and
postacute care facilities in 25 states.  In addition, the Sun
Healthcare Group family of companies provides high-quality
therapy, pharmacy, home care and other ancillary services for
the healthcare industry.


SUNRISE CDO: Fitch Drops Class C Notes Rating to B- from BBB
------------------------------------------------------------
Fitch Ratings downgrades two classes of notes issued by Sunrise
CDO I, Limited.

The following two classes have been downgraded:

-- $45,100,000 class B second priority senior secured floating-
    rate notes due 2037 to 'BBB' from 'AA';

-- $12,169,779 class C third priority secured floating-rate
    notes due 2037 to 'B-' from 'BBB'.

The following class has been affirmed:

-- $214,577,818 class A first priority senior secured floating
    rate notes due 2022 'AAA'.

Sunrise CDO I, Limited., which closed Dec. 19, 2001, is a
static-pool, balance sheet, collateralized debt obligation
structured by CSFB. The portfolio supporting the CDO is
comprised of general asset-backed securities (56.76%), corporate
securities (17.94%), CDOs (16.25%), commercial mortgage-backed
securities (CMBS) (7.89%), and residential mortgage-backed
securities (RMBS) (1.15%).

Fitch has reviewed the credit quality of the individual assets
comprising the portfolio and has conducted cash flow modeling of
various default timing and interest rate scenarios. As a result,
Fitch has determined that the original ratings assigned to the
class B and C notes of Sunrise no longer reflect the current
risk to note holders.

According to the March 2003 trustee report, the reported Fitch
weighted average rating factor for the portfolio was 22.75 which
indicates an overall credit quality of 'BBB-/BB+'.

The rating actions follow a review of the transaction structure
including an analysis of portfolio collateral and stressed cash
flow modeling. As of March 31, 2003 the class A notes have paid
down approximately 3.60% from their original balance. The class
C notes have been paid down approximately 28.62% from their
original balance due to a dividend cap on the preference shares
which redirects excess spread to pay down the class C notes.

The portfolio contains a number of securities whereby default is
a real possibility, although no defaults have occurred to date.
Fitch believes these factors have negatively impacted the
expected performance of the transaction to the point where the
available credit enhancement levels no longer support the
original ratings. As of the March 2003 trustee report, the
portfolio contains 25.81% non-investment grade collateral debt
securities including 5.49% of collateral debt securities rated
'CCC' or below. Several assets in the collateral pool have
experienced significant deterioration in credit quality, most
notably 3.97% total exposure to the manufactured housing sector


SUPERIOR PLUS: Credit Rating Down to BB+ over ERCO Acquisition
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered the long-term
corporate credit rating on Superior Plus Inc. to 'BB+' from
'BBB-', following a review of the company's consolidated
business and financial profile after the US$375 million
acquisition of the ERCO pulp chemicals business. At the same
time, the rating was removed from CreditWatch, where it was
placed Nov. 15, 2002. The outlook is stable.

"The acquisition of the pulp chemicals business (ERCO) has
materially changed Superior's business profile and increased
leverage. Although the company's operations are now more
diversified, the addition of the pulp chemicals business has not
decreased the company's overall risk profile," said Standard &
Poor's credit analyst Daniel Parker.

Calgary, Alberta-based Superior is involved in three distinct
business lines. On a pro forma basis, about 56% of EBITDA is
derived from propane distribution, 42% from chemicals, and 2%
from natural gas retailing.

Superior's business risk profile benefits from its position as
the largest propane distributor in Canada and the utility-like
characteristics of its business. The 50% market share of the
propane business provides scale and a competitive advantage with
respect to procurement of supply and transportation. Superior's
geographic diversification across Canada moderates the effect of
regional weather patterns, competition, and customer
concentration. In addition, the pulp chemicals business, ERCO,
has a strong competitive position in a mature industry. These
strengths are tempered by the existence of competing fuel
sources for propane, and general competition and exposure to the
volatile pulp and paper industry for ERCO.

ERCO is the world's largest supplier of modern chlorine dioxide
generators and related technology, and the second-largest
supplier of sodium chlorate in North America. Sodium chlorate is
primarily used to bleach wood pulp to produce high-grade paper
products. The exposure to the volatile pulp and paper industry
is partially offset by the fact that sodium chlorate represents
less than 5% of cost in the pulp production process.
Nevertheless, in Standard & Poor's view, Superior's entry into
the pulp chemicals business has not decreased the overall level
of business risk.

Superior's consolidated financial risk profile reflects the
increased leverage from the pulp chemicals acquisition. Although
the addition of ERCO will almost double the company's operating
cash flows, the adjusted funds from operations (FFO) interest
coverage has declined and is expected to be above 4x through
2004. Standard & Poor's acknowledges Superior's capital
structure could change depending on the conversion rate of the
2004.convertible debentures outstanding. Nevertheless, the
convertible debentures are treated as pure debt, consistent with
Standard and Poor's criteria. FFO to total debt is expected to
be about 25% and adjusted consolidated leverage will range
between 55% and 65% through 2004.


TFC ENTERPRISES: Pushing with Merger with Consumer Portfolio
------------------------------------------------------------
TFC Enterprises, Inc. (Nasdaq: TFCE), announced that at a
special meeting held on May 20, 2003 its shareholders approved
the Agreement and Plan of Merger, dated March 31, 2003, among
TFC Enterprises, Inc., CPS Mergersub, Inc. and Consumer
Portfolio Services, Inc. (Nasdaq: CPSS). Pursuant to the merger
agreement, Consumer Portfolio Services, Inc. will pay $1.87 cash
for each share of TFC Enterprises, Inc. common stock outstanding
on the effective date of the merger.

Soon thereafter TFCE and Consumer Portfolio Services, Inc.
closed on the merger of TFCE with CPS Mergersub, Inc.  TFCE is
now a wholly-owned subsidiary of Consumer Portfolio Services,
Inc.

As reported in Troubled Company Reporter's April 3, 2003
edition, TFCE announced an extension of its credit facility with
its  principal lender until the earliest to occur of the
consummation of the CPS merger, the termination of the merger
agreement for any reason and May 31, 2003.

TFCE disclosed that due to its inability to replace its material
credit facilities through January 1, 2004, the audit report
relating to its December 31, 2002 financial statements contained
in its Annual Report on Form 10-K which was filed with the SEC
contains a "going concern" explanatory paragraph. Although this
explanatory paragraph causes certain defaults to occur in
certain of its credit facilities, TFCE has obtained waivers of
this default.


TITANIUM METALS: Elects 6 Incumbent and 1 New Board Members
-----------------------------------------------------------
Titanium Metals Corporation (NYSE: TIE) held its Annual
Stockholders' Meeting on May 20, 2003, at which six incumbent
and one new member of TIMET's Board of Directors were elected,
each to serve until the next Annual meeting of Stockholders.
The members of the Board of Directors are:  J. Landis Martin,
Chairman, Norman N. Green, Dr. Albert W. Niemi, Jr., Glenn R.
Simmons, Steven L. Watson, Terry N. Worrell (newly elected) and
Paul J. Zucconi.

TIMET, headquartered in Denver, Colorado, is a leading worldwide
producer of titanium metal products.  Information on TIMET is
available on the Internet at http://www.timet.com/

In December 2002, Standard & Poor's Ratings Services lowered its
preferred stock rating on Titanium Metals Corp. to 'D' from 'C'
after the company deferred dividend payments on its preferred
securities.  Standard & Poor's affirmed its 'B-' corporate
credit rating on the company and said the outlook remains
negative.  Titanium Metals, based in Denver, Colorado, has
approximately $230 million of debt and trust preferred stock
outstanding.

"The rating action follows the company's December 1, 2002
dividend deferral on its $201.2 million convertible trust
preferred securities", said Standard & Poor's credit analyst
Dominick D'Ascoli. "Under its bank credit agreement, Titanium
Metals can continue deferring dividends for a period of up to 20
consecutive quarters".

Moody's rates the 6-5/8% Convertible Preferred Securities issued
by Timet Capital Trust I at Caa2.


TRIMAS CORP: Consolidates Lake Erie Products Manuf. Operations
--------------------------------------------------------------
To enhance the company's Fastening Systems Group's role as a
world-class supplier and position it for future growth, TriMas
Corporation will consolidate its Lake Erie Products
manufacturing operations in Lakewood, Ohio, into its facilities
in Frankfort, Ind.; Wood Dale, Ill. and Livonia, Mich.  The
transition will begin this month and is expected to be completed
in April 2004.

Lake Erie Products will remain a part of the Cleveland
community, according to Terry Campbell, president of the TriMas
Fastening Systems Group, by continuing to operate its steel
processing unit at the 57-year-old, 380,000-square-foot Lakewood
facility and retaining employment for 20 to 30 production
employees.  In addition, sales, marketing and business support
staff will remain in the Cleveland area.

Approximately 100 production-related employees will be affected
by this move, he said, noting the company hopes to offer some of
the affected employees similar positions at the other three
facilities involved in this consolidation effort.

"These actions represent a commitment to our customers of
providing world-class, value-added fastening solutions,"
Campbell said.  "The consolidation will drive efficiencies by
eliminating redundancies and leveraging manufacturing assets
across all Lake Erie Products business units, and will establish
an optimal business framework for future investment and growth."

Furthering its commitment to its fastening systems customer base
and broadening its product offering, TriMas recently acquired
Metaldyne Corporation's Hi-Vol automotive fastening business --
a leading manufacturer of specialized fittings and cold-headed
parts used in automotive and industrial applications.  Products
include specialty tube nuts, spacers, hollow extruded
components, and locking nut systems used in brake, fuel, power
steering, and engine, transmission and chassis applications.

A pioneer in the fastener industry, Lake Erie Products (which
includes Entegra Fastener and Lake Erie Screw) is one of two
businesses that make up the newly created TriMas Fastening
Systems Group.  Lake Erie Products manufactures small specialty
and custom fasteners and build-to-print large diameter
fasteners.  The specialty fastener products are  utilized by
thousands of end-users in such diverse markets as agricultural
and transportation equipment, construction and fabricated metal
products, as well as commercial and industrial maintenance
markets.

The company's Fastening Systems Group also includes Monogram
Aerospace Fasteners.  This business manufactures highly
engineered specialty fasteners for the domestic and
international aerospace industry and the associated aftermarket
for replacement and maintenance parts.  Monogram is the market
leader within the two primary niche segments of the aerospace
fastener industry in which it competes -- permanent blind bolts
utilized in aircraft assembly and temporary fasteners utilized
during the construction of aircraft.

Headquartered in Bloomfield Hills, Mich., TriMas is a
diversified growth company of high-end, specialty niche
businesses manufacturing a variety of products for commercial,
industrial and consumer markets worldwide.  TriMas consists of
10 companies and employs nearly 5,000 employees at 80 different
facilities in 10 countries.  TriMas is organized into four
strategic business groups: Cequent Transportation Accessories,
Rieke Packaging Systems, Fastening Systems and Industrial
Specialties.  For more information, visit
http://www.trimascorp.com

                          *   *   *

Standard & Poor's Ratings Services revised its outlook on TriMas
Corp. to stable from positive. At the same time Standard &
Poor's affirmed its 'BB-' corporate credit and senior secured
debt ratings, and its 'B' subordinated debt ratings on TriMas.

The outlook revision is due to the company's recent acquisition
of two companies for a total of about $210 million. "Although
these acquisitions are strategic to the company's Transportation
Accessories Group, now called Cequent, it raises its leverage
and reduces the near-term prospects for significant deleveraging
that Standard & Poor's had expected," said Standard & Poor's
credit analyst John R. Sico. These acquisitions were funded
partly by the proceeds from its recent offering of $85 million
9-7/8% senior subordinated notes due 2012, cash on hand,
revolver drawdown, and some equity from its sponsor, Heartland
Industrial Partners L.P.


TRITON PCS: Commences 11% Senior Sub. Disc. Notes Tender Offer
--------------------------------------------------------------
Triton PCS, Inc., has commenced a cash tender offer for up to
$315 million aggregate principal amount of its 11% Senior
Subordinated Discount Notes Due 2008 ($511,989,000 aggregate
principal amount outstanding) (CUSIP No. 896778AB3).  This offer
is being made upon the terms and is subject to the conditions
set forth in an Offer to Purchase dated May 22, 2003.

The tender offer is scheduled to expire at midnight, New York
City time on June 19, 2003, unless extended or earlier
terminated. Holders of 11% Notes who tender their Notes on or
prior to 5:00 p.m., New York City time, on June 5, 2003, unless
extended or earlier terminated, will receive the Total
Consideration of 105.85% of the principal amount of the 11%
Notes validly tendered (as described below). Holders who tender
their 11% Notes after 5:00 p.m., New York City time, on the
Early Tender Date but prior to the midnight, New York City time,
on the Expiration Date, will receive 103.85% of the principal
amount of the 11% Notes validly tendered.  The Total
Consideration is the sum of the Tender Offer Consideration and a
premium of 2.00% paid to each holder of 11% Notes that validly
tenders on or prior to the 5:00 p.m., New York City time, on the
Early Tender Date.  In each case, holders that validly tender
their Notes shall receive accrued and unpaid interest up to, but
not including, the payment date.

In the event that less than $315 million is tendered pursuant to
the Offer, Triton PCS may call for redemption, upon satisfaction
of the financing condition described below, in accordance with
the terms of the indenture governing the 11% Notes, an amount,
together with all other purchases of 11% Notes, that would equal
up to the Maximum Tender Amount of the 11% Notes, at the
applicable redemption price of 105.50% of the principal amount
thereof, plus interest accrued to the redemption date.  This
statement of intent shall not constitute a notice of redemption
under the indenture.  Such notice, if made, will only be made in
accordance with the applicable provisions of the indenture.

Triton PCS intends to finance the tender offer, the redemption
and the payment of certain other indebtedness with the net
proceeds from its offering of $500 million of senior unsecured
notes, pursuant to Rule 144A and Regulation S under the
Securities Act of 1933, together with other available funds.
The securities to be offered have not been registered under the
Securities Act of 1933 and may not be offered or sold in the
United States, absent registration or an applicable exemption
from such registration requirements.

The obligation to accept for purchase and to pay for 11% Notes
in the tender offer is conditioned on, among other things, the
receipt by Triton PCS before midnight, New York City time, on
the Expiration Date of net proceeds from the offering of senior
unsecured notes by Triton PCS or other available sources of
cash, in each case on terms and conditions satisfactory to
Triton PCS, sufficient to repay outstanding borrowings under
Triton PCS' existing credit facility and to purchase 11% Notes
pursuant to the tender offer (or otherwise redeem up to $315
million of the 11% Notes, if less than $315 million of the 11%
Notes have been tendered).

A more comprehensive description of the tender offer can be
found in the Offer to Purchase.

Triton PCS has retained Lehman Brothers to serve as the Dealer
Manager and D.F. King & Co., Inc. to serve as the Information
Agent for the tender offer. Requests for documents may be
directed to D.F. King & Co., Inc., the Information Agent, by
telephone at (800) 431-9643 (toll-free) or (212) 269-5550 or in
writing at 48 Wall Street, 22nd Floor, New York, NY 10005.
Questions regarding the tender offer may be directed to Lehman
Brothers, at (800) 438-3242 (toll-free) or (212) 528-7581,
Attention:  Emily E. Shanks.

Triton PCS, based in Berwyn, Pennsylvania whose March 31, 2003
balance sheet shows a total shareholders' equity deficit of
about $192 million, is an award-winning wireless carrier
providing service in the Southeast.  The company markets its
service under the brand SunCom, a member of the AT&T Wireless
Network.  Triton PCS is licensed to operate a digital wireless
network in a contiguous area covering 13.6 million people in
Virginia, North Carolina, South Carolina, northern Georgia,
northeastern Tennessee and southeastern Kentucky.

For more information on Triton PCS and its products and
services, visit the company's Web sites at:
http://www.tritonpcs.comand  http://www.suncom.com


UNITED AIRLINES: Seeks to Expand Scope of McKinsey's Services
-------------------------------------------------------------
UAL Corporation asks the Court for permission to revise the
scope of McKinsey & Company's employment.  James H.M.
Sprayregen, Esq., at Kirkland & Ellis, reminds Judge Wedoff that
the Court approved expanding the scope of McKinsey's retention,
subject to approval of the Creditor's Committee.  The Debtors
asked the Committee for its consent.  The Committee said no.
The Debtors are now returning to Court to get what they wanted
in the first place.

Mr. Sprayregen says that the services contemplated in earlier
Engagement Letters have been completed.  Now, the Debtors wish
to expand the scope of McKinsey's services, pursuant to an
Engagement Letter dated April 7, 2003, to include:

     -- McKinsey assessing alternatives of strategic sourcing of
        the Debtors' fuel purchases, and

     -- McKinsey executing strategy to consolidate and centralize
        station level expenditures for goods and services.

Pursuant to an Engagement Letter dated and April 29, 2003,
McKinsey agreed to:

     -- support the development of the analytical framework, and

     -- provide project management and external perspectives to
        assist in the reset of the strategic plan.

McKinsey will also provide objective perspectives on key
assumptions in the strategy reset design and develop contingency
actions to cover unexpected shortfalls in the plan.

The Debtors have agreed to pay McKinsey $650,000 for April 2003,
pro rated to $532,000.  The Debtors have agreed to pay McKinsey
$295,000 for May 2003. (United Airlines Bankruptcy News, Issue
No. 18; Bankruptcy Creditors' Service, Inc., 609/392-0900)


VANTAGEMED CORP: Appoints Philip Ranger Chief Financial Officer
---------------------------------------------------------------
VantageMed Corporation (OTC Bulletin Board: VMDC.OB) announced
the appointment of Philip Ranger as Chief Financial Officer.
Mr. Ranger has over 20 years of financial management experience
with 13 years in the software industry.  Mr. Ranger most
recently served as Chief Financial Officer of venture funded
Diligent Software Systems, a provider of sourcing and contract
management solutions.  Prior to Diligent, Mr. Ranger served as
Chief Financial Officer at several software companies including
Inference Corporation and Ultradata Corporation, both of which
traded on the Nasdaq. Mr. Ranger holds a Bachelor of Science
degree in Business Administration from the University of Texas
at Austin.

Richard M. Brooks, Chairman and Chief Executive Officer, said,
"We are very pleased to announce the addition of Mr. Ranger to
our team.  Mr. Ranger has extensive operational and financial
business experience and will assist us in developing and
executing the next phase of our business plan as we strive to
yield growth and improved bottom line results in 2003."

VantageMed is a provider of healthcare information systems and
services distributed to over 12,000 customer sites through a
national network of regional offices. Our suite of software
products and services automates administrative, financial,
clinical and management functions for physicians, dentists, and
other healthcare providers and provider organizations.

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


WASHINGTON MUTUAL: Rating Actions on Four RMBS Securitizations
--------------------------------------------------------------
Fitch Ratings has taken rating actions on the following
Washington Mutual residential mortgage-backed certificates:
Washington Mutual, mortgage pass-through certificates, series
2001-4 Groups I, II, & III

         -- Class C-B-1 upgraded to 'AAA' from 'AA';
         -- Class C-B-2 upgraded to 'AAA' from 'A';
         -- Class C-B-3 upgraded to 'AA' from 'BBB';
         -- Class C-B-4 upgraded to 'A' from 'BB';
         -- Class C-B-5 upgraded to 'BB+' from 'B'.

Washington Mutual, mortgage pass-through certificates, series
2001-5 Groups I & II

         -- Class B-1 upgraded to 'AAA' from 'AA';
         -- Class B-2 upgraded to 'AAA' from 'A';
         -- Class B-3 upgraded to 'AA+' from 'BBB';
         -- Class B-4 upgraded to 'A+' from 'BB';
         -- Class B-5 upgraded to 'BBB-' from 'B'.

Washington Mutual, mortgage pass-through certificates, series
2001-8 Groups I, II, & III

         -- Class C-B-1 upgraded to 'AAA' from 'AA';
         -- Class C-B-2 upgraded to 'AA' from 'A';
         -- Class C-B-3 upgraded to 'A' from 'BBB';
         -- Class C-B-4 upgraded to 'BBB-' from 'BB';
         -- Class C-B-5 affirmed at 'B'.

Washington Mutual, mortgage pass-through certificates, series
2001-9 Groups I, II, & III

         -- Class B-1 upgraded to 'AAA' from 'AA';
         -- Class B-2 upgraded to 'AA+' from 'A';
         -- Class B-3 upgraded to 'AA-' from 'BBB';
         -- Class B-4 upgraded to 'BBB' from 'BB';
         -- Class B-5 upgraded to 'BB' from 'B'.

These rating actions are being taken as a result of low
delinquencies and losses, as well as increased credit support.


WIND RIVER SYSTEMS: Corp. Credit Rating Cut to B on Oper. Losses
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Wind River Systems Inc. to 'B' from 'B+', reflecting
very challenging end-market demand conditions and the
expectation that the company will continue to generate operating
losses over the near term, despite recent cost reductions. These
are only partially offset by the company's adequate cash
balances. At the same time, Standard & Poor's lowered its
subordinated debt rating for Wind River to 'CCC+' from 'B-'. The
outlook is stable.

Alameda, California-based Wind River is a provider of operating
systems software and development tools that allow customers to
create real-time software applications for embedded computers.
As of April 2003, it had total lease-adjusted debt of $224
million.

"While we expect only moderate negative operating cash flow over
the near term, the timing for a return to sustained levels of
profitability is uncertain," said Standard & Poor's credit
analyst Emile Courtney.

Adequate cash balances support ratings during this prolonged
slump in end-market demand and as the company makes transitions
in its business model. Standard & Poor's expects cash flow usage
to be moderate over the intermediate term.

The company's products support multiple platforms, focusing on
32-bit and 64-bit processors. Less than 10% of the embedded
software market is commercialized. Wind River competes with
several larger companies, and sales cycles are long. Wind River
serves the network infrastructure, aerospace, industrial and
consumer end-markets.


WORLDCOM INC: Lazard Pinpoints Reorganization Value at $12 Bil.
---------------------------------------------------------------
Worldcom Inc., and its debtor-affiliates have been advised by
Lazard Freres & Co., their financial advisors, with respect to
the aggregate reorganization value on a going-concern basis of
the Reorganized Debtors. Lazard undertook this valuation
analysis for the purpose of determining value available for
distribution to creditors pursuant to the Plan and to analyze
the relative recoveries to creditors.

The estimated range of reorganization value of the Reorganized
Debtors was assumed to be $10,500,000,000 to $13,500,000,000,
with a mid-point estimate of $12,000,000,000, as of September 1,
2003.  Based on the assumed range of the reorganization value of
the Reorganized Debtors, plus post-emergence available cash of
$1,600,000,000, plus non-core asset value of $200,000,000, less
total debt of $5,900,000,000, Lazard has imputed an estimated
range of equity values for the Reorganized Debtors of between
$6,400,000,000 and $9,400,000,000, with a point estimate of
$7,900,000,000.  Assuming a distribution of 318,000,000 shares
of Reorganized WorldCom Common Stock pursuant to the Plan, the
imputed estimate of the range of equity values on a per share
basis is between $20.29 and $29.71 per share, with a mid-point
estimate of $25 per share.  To the extent that creditors elect
to receive fewer New Notes, additional shares of Common Stock
will be issued.  In the event that the minimum $4,500,000,000 in
New Notes are issued, an additional 40,000,000 shares of New
Common Stock will be issued.  The equity value of $25 per share
does not give effect to the potentially dilutive impact of any
restricted stock or options to be issued or granted pursuant to
the New Management Restricted Stock Plan and the New Director
Restricted Stock Plan.  Lazard's estimate of reorganization
value does not constitute an opinion as to fairness from a
financial point of view of the consideration to be received
under the Plan or of the terms and provisions of the Plan.

With respect to the Financial Projections prepared by the
Debtors' management, Lazard assumed that the Financial
Projections have been reasonably prepared in good faith and on a
basis reflecting the best currently available estimates and
judgments of the Debtors as to the future operating and
financial performance of the Reorganized Debtors.  Lazard's
estimate of a range of reorganization values assumes that
operating results projected by the Debtors will be achieved by
the Reorganized Debtors in all material respects, including
revenue growth and improvements in operating margins, earnings
and cash flow.  The financial performance forecast by the
Debtors' management is materially better than the Debtors'
recent financial performance. As a result, to the extent that
the estimate of enterprise values is dependent on the
Reorganized Debtors performing at the levels set forth in the
Financial Projections, this analysis should be considered
speculative.  If the business performs at levels below
those set forth in the Financial Projections, this performance
may have a material impact on the estimated range of values.

In estimating the range of the Reorganized Debtors'
reorganization value and equity value, Lazard:

     (a) reviewed certain historical financial information of the
         Debtors for recent years and interim periods;

     (b) reviewed certain internal financial and operating data
         of the Debtors, including the Financial Projections,
         which data was prepared and provided to Lazard by the
         Debtors' management and which relate to the Debtors'
         business and its prospects;

     (c) met with certain members of senior management to discuss
         the Debtors' operations and future prospects;

     (d) reviewed publicly available financial data and
         considered the market value of public companies that
         Lazard deemed generally comparable to the Debtors'
         operating business;

     (e) considered precedent transactions in the
         telecommunications industry;

     (f) considered certain economic and industry information
         relevant to the operating business; and

     (g) conducted other studies, analysis, inquiries, and
         investigations as it deemed appropriate.

Although Lazard conducted a review and analysis of the Debtors'
business, operating assets and liabilities and the Reorganized
Debtors' business plan, it assumed and relied on the accuracy
and completeness of all financial and other information
furnished to it by the Debtors, as well as publicly available
information.

In addition, Lazard did not independently verify management's
projections in connection with these estimates of the
reorganization value and equity value, and no independent
valuations or appraisals of the Debtors were sought or obtained.
In the Reorganized Debtors' case, the estimates of the
reorganization value prepared by Lazard represent the
hypothetical reorganization value of the Reorganized Debtors.
These estimates were developed solely for purposes of the
formulation and negotiation of the Plan and the analysis of
implied relative recoveries to creditors.  These estimates
reflect computations of the range of the estimated
reorganization value of the Reorganized Debtors through the
application of various valuation techniques and do not purport
to reflect or constitute appraisals, liquidation values or
estimates of the actual market value that may be realized
through the sale of any securities to be issued pursuant to the
Plan.

The value of an operating business is subject to numerous
uncertainties and contingencies which are difficult to predict
and will fluctuate with changes in factors affecting the
financial condition and prospects of such a business.  As a
result, the estimate of the range of the reorganization
enterprise value of the Reorganized Debtors is not necessarily
indicative of actual outcomes.  Because these estimates are
inherently subject to uncertainties, neither the Debtors,
Lazard, nor any other person assumes responsibility for their
accuracy. In addition, the valuation of newly issued securities
is subject to additional uncertainties and contingencies, all of
which are difficult to predict.  Actual market prices of these
securities at issuance will depend on, among other things,
prevailing interest rates, conditions in the financial markets,
the anticipated holding period of securities received by
prepetition creditors, some of whom may prefer to liquidate
their investment rather than hold it on a long-term basis, and
other factors which generally influence the prices of
securities.

Lazard's valuation represents a hypothetical value that reflects
the estimated intrinsic value of the Company derived through the
application of various valuation techniques.  This analysis does
not purport to represent valuation levels, which would be
achieved in, or assigned by, the public markets for debt and
equity securities or private markets for corporations.
Estimates of enterprise value do not purport to be appraisals or
necessarily reflect the values which may be realized if assets
are sold as a going concern, in liquidation, or otherwise.
(Worldcom Bankruptcy News, Issue No. 28; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


WORLD HEART: Receiving Remaining $3M Funding from TPC Investment
----------------------------------------------------------------
World Heart Corporation (OTCBB: WHRTF, TSX: WHT) announced that
Technology Partnerships Canada (TPC) has agreed to amend its
partnership agreement in order to complete the remaining $3
million disbursement under its November 2001 investment in
support of WorldHeart's HeartSaverVAD(TM) development program.

TPC has provided to WorldHeart a letter indicating willingness
to consider a further investment of up to $9.98 million, subject
to TPC's formal approval process, to support continued
development, testing and trials of HeartSaverVAD.

WorldHeart announced in August 2002 that it had decided to merge
the HeartSaverVAD and HeartSaverVAD II programs into a single
release of an optimized product. These technologies were then
integrated with the patented technologies of Novacor(R) LVAS and
Novacor LVAS II to formulate the optimized HeartSaverVAD,
resulting in a change in the scope of the program being
supported by TPC.

As consideration for TPC's approval of the amendment, WorldHeart
has agreed to modify royalties payable to TPC. Effective
January 1, 2004, a royalty will be payable on net revenues, to a
maximum which permits TPC to recover approximately the same rate
of return as under the original agreement.

During the next several weeks, as the HeartSaverVAD program
advances, WorldHeart will work with TPC to define the scope and
basis for a subsequent investment, and to seek formal approval.

It is estimated that the global market for WorldHeart's  heart
assist products exceeds 100,000 patients annually. In Canada
alone, an estimated 25,000 people die every year where heart
failure is the principal or contributing cause of death. Many of
these patients could benefit from receiving safe and effective
circulatory support from a heart assist device.

"WorldHeart believes that its next-generation HeartSaverVAD will
be a leading therapy for a large, unmet clinical need, due to
its small physical characteristics that don't compromise its
ability to deliver full pulsatility," explained Dr. Mussivand,
WorldHeart's Chairman and Chief Scientific Officer. "We are
heartened by the Government of Canada's continued long-term
support of our technology."

World Heart Corporation, a global medical device company based
in Ottawa, Ontario and Oakland, California, is currently focused
on the development and commercialization of pulsatile
ventricular assist devices. Its Novacor(R) Left Ventricular
Assist System (LVAS) is well established in the marketplace and
its next-generation technology, HeartSaverVAD(TM), is a fully
implantable assist device intended for long-term support of
patients with heart failure.

     About Technology Partnerships Canada (TPC)

TPC is a technology investment program established in 1996 to
contribute to the achievement of Canada's objectives of
increasing economic growth, creating jobs and wealth, and
supporting sustainable development. TPC supports and advances
Government of Canada objectives by investing strategically in
research, development and innovation in order to encourage
private sector investment, and so maintain and grow the
technology base and technological capabilities of Canadian
Industry. TPC also encourages the development of small and
medium-sized enterprises (SMEs) in all regions of Canada.

At March 31, 2003, the Company's Balance Sheet is upside-down by
$51 Mil.


* Senate OKs Biden Bill Adding 29 New Bankr. Judges Nationwide
--------------------------------------------------------------
The United States Senate unanimously approved legislation
authored by Senator Joe Biden to add 29 new, permanent judges to
the federal bankruptcy bench, four of which will be in Delaware.
The bill also converts one of Delaware's temporary judgeships to
permanent status.

"This is a big win for Delaware," said Senator Biden, a senior
Democrat on the Judiciary Committee.  "This legislation will
help alleviate the intolerable crisis in Delaware, and the
severe shortage of bankruptcy court judges across the country."

"The dramatic increase in bankruptcy filings in the past few
years has created a serious need for additional judgeships,
particularly in Delaware -- far and away the nation's most
overworked bankruptcy court," said Senator Biden.  "In these
cases, timing is often critical, and without these additional
judgeships, people could face significant and unnecessary
delays."

Senator Biden cited the most recent data from the Administrative
Office for the United States Courts that shows weighted filings
for the district of Delaware exceeding 12,500 cases per judge
during a one-year period. The next busiest district, the
District of Maryland, maintains a substantially smaller ratio of
less than 3,700 weighted filings per judge. Weighted filings
take into consideration not only the volume of cases, but the
complexity of the case as well. In addition to the 29 new
permanent bankruptcy court judges, the bill also authorizes an
additional seven temporary judgeships, converts two judgeships
to permanent status, and extends the terms of two other
temporary judgeships.

"The bankruptcy bar in Delaware is among the most respected and
accomplished in the country, as are our bankruptcy judges. But
our judges are not superhuman. They need relief from their
staggering caseload, and they need it yesterday. These five
additional judgeships will go a long way towards providing that
relief," said Biden.

Senator Biden's bill was included as part of S. 878, a
legislative package to establish permanent judgeships. The bill
must now be approved by the U.S. House of Representatives.


* BOND PRICING: For the week of May 26 - May 30, 2003
-----------------------------------------------------

Issuer                                Coupon   Maturity  Price
------                                ------   --------  -----
Adelphia Communications               10.875%  10/01/10    49
Alamosa Delaware                      13.625%  08/15/11    73
Alexion Pharmaceuticals                5.750%  03/15/07    74
AMR Corp.                              9.000%  09/15/16    46
AnnTaylor Stores                       0.550%  06/18/19    64
Aurora Foods                           8.750%  07/01/08    43
Aurora Foods                           9.875%  02/15/07    43
Best Buy Co. Inc.                      0.684%  06/27/21    73
Burlington Northern                    3.200%  01/01/45    61
Calpine Corp.                          7.875%  04/01/08    65
Calpine Corp.                          8.500%  02/15/11    67
Calpine Corp.                          8.625%  08/15/10    67
Charter Communications, Inc.           4.750%  06/01/06    50
Charter Communications, Inc.           5.750%  01/15/05    54
Charter Communications Holdings        8.250%  04/01/07    69
Charter Communications Holdings        8.625%  04/01/09    68
Charter Communications Holdings        9.625%  11/15/09    67
Charter Communications Holdings       10.000%  04/01/09    69
Charter Communications Holdings       10.000%  05/15/11    68
Charter Communications Holdings       10.250%  01/15/10    68
Charter Communications Holdings       10.750%  10/01/09    69
Collins & Aikman                      11.500%  04/15/06    70
Comcast Corp.                          2.000%  10/15/29    30
Conseco Inc.                           8.750%  02/09/04    23
Cox Communications Inc.                0.348%  02/23/21    72
Cox Communications Inc.                2.000%  11/15/29    41
Cox Communications Inc.                3.000%  03/14/30    45
Crown Cork & Seal                      7.375%  12/15/26    75
Cummins Engine                         5.650%  03/01/98    70
Curagen Corp.                          6.000%  02/02/07    73
Delco Remy Int'l                      10.625%  08/01/06    67
Delta Air Lines                        7.900%  12/15/09    74
Dynex Capital                          9.500%  02/28/05     2
Elwood Energy                          8.159%  07/05/26    69
Finova Group                           7.500%  11/15/09    41
Fleming Companies Inc.                10.125%  04/01/08    15
Gulf Mobile Ohio                       5.000%  12/01/56    65
Health Management Associates Inc.      0.250%  08/16/20    66
HealthSouth Corp.                      7.000%  06/15/08    68
HealthSouth Corp.                      7.625%  06/01/12    68
I2 Technologies                        5.250%  12/15/06    70
Incyte Genomics                        5.500%  02/01/07    71
Inhale Therapeutic Systems Inc.        3.500%  10/17/07    60
Inhale Therapeutic Systems Inc.        5.000%  02/08/07    65
Inland Steel Co.                       7.900%  01/15/07    69
Internet Capital                       5.500%  12/21/04    39
Kmart Corporation                      9.375%  02/01/06    16
Kulicke & Soffa Industries Inc.        4.750%  12/15/06    72
Lehman Brothers Holding                8.000%  11/13/03    71
Level 3 Communications                 6.000%  09/15/09    58
Level 3 Communications                 6.000%  03/15/10    58
Liberty Media                          3.750%  02/15/30    64
Liberty Media                          4.000%  11/15/29    67
Lucent Technologies                    6.450%  03/15/29    70
Lucent Technologies                    6.500%  01/15/28    69
Magellan Health                        9.000%  02/15/08    33
Medarex Inc.                           4.500%  07/01/06    75
Mirant Corp.                           5.750%  07/15/07    73
Missouri Pacific Railroad              4.750%  01/01/20    74
Missouri Pacific Railroad              4.750%  01/01/30    70
Missouri Pacific Railroad              5.000%  01/01/45    71
NTL Communications Corp.               7.000%  12/15/08    19
Natural Microsystems                   5.000%  10/15/05    64
Northern Pacific Railway               3.000%  01/01/47    57
Solutia Inc.                           6.720%  10/15/37    72
Southern Energy                        7.400%  07/15/04    75
Southern Energy                        7.900%  07/15/09    54
Syratech Corp.                        11.000%  04/15/07    64
Transwitch Corp.                       4.500%  09/12/05    75
United Airlines                       10.670%  05/01/04    10
US Timberlands                         9.625%  11/15/07    55
Weirton Steel                         10.750%  06/01/05    23
Weirton Steel                         11.375%  07/01/04    14
Westpoint Stevens                      7.875%  06/15/08    19
Xerox Corp.                            0.570%  04/21/18    65

                           *********

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 ***