TCR_Public/030612.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Thursday, June 12, 2003, Vol. 7, No. 115

                          Headlines

ACTERNA CORP: Asks Court to Fix July 25, 2003 as Claims Bar Date
ACTRADE FINANCIAL: Opts to Cease Writing New Business
ADAM STREET: S&P Puts B+/CCC- Note Class Ratings on Watch Neg.
ADELPHIA BUSINESS: Court Approves Cananwill Premium Financing
ADELPHIA COMMS: Wants Approval of Wind-Down Agreement for CLECs

ADVANCED SWITCHING: Transfers All Assets to Liquidating Trust
AIR CANADA: Strategic Analysis Says Profitability is Paramount
A.K. STEEL: Names Ernest Rummler VP for Manufacturing Planning
ALADDIN GAMING: Purchase Selection Hearing Set for June 20
ALTERRA HEALTHCARE: Qualified Bids Due by June 23, 2003

AMES DEPARTMENT: Court Okays IPRecovery as Debtor's Sales Agent
ARCIS CORP: Special Committee Exploring Strategic Alternatives
BRIDGE INFO.: Plan Administrator Balks at Barclay's $3MM Claim
BUDGET GROUP: Wants Court Nod to Expand Scope of KPMG's Engagement
CASELLA WASTE: Selling Non-Core Commodities Brokerage Business

CELL PATHWAYS: Shareholders OK OSI Pharmaceuticals Merger Pact
CLAYTON HOMES: Special Shareholders Meeting to Convene on Monday
CONEXANT SYSTEMS: Pictos' Sale to ESS Bolsters Cash Position
CONGOLEUM CORP: Delays Planned Chapter 11 Filing Until September
CONTINENTAL AIRLINES: Fitch Junks Convertible Sr. Notes at CCC+

CONTINENTAL AIRLINES: Closes $175M 5% Convertible Debt Offering
CONTINENTAL ENG'G: Case Summary & Largest Unsecured Creditors
DA CONSULTING: Commences Trading on OTCB Effective June 10, 2003
DALEEN TECHNOLOGIES: Shareholders Re-Elect 3 Directors to Board
DAYTON SUPERIOR: Closes Sr. 2nd Secured Notes Private Placement

DVI INC: Fitch Places Sr Unsecured Debt Rating on Watch Negative
DVI INC: Moody's Ratchets Sr Unsecured Debt Rating to B3 from B2
ENRON CORP: Judge Gonzalez Clears Broadwing Settlement Agreement
FASTNET CORP: Commences Chapter 11 to Facilitate Restructuring
FASTNET CORPORATION: Voluntary Chapter 11 Case Summary

FEDERAL-MOGUL: Wins Nod to Expand Ernst & Young Retention Scope
FINET.COM: US Trustee to Convene Creditors' Meeting on June 24
FLEMING COS.: Taps RCS and Staubach as Real Estate Consultants
FLEMING COS.: Judge Walrath Clears Save Mart Release Agreement
GENTEK INC: Intends to Abandon Five Former Manufacturing Plants

GERDAU AMERISTEEL: Moody's Assigns Low-B Ratings on Weak Market
INTEGRATED HEALTH: Asks Court to Further Extend Removal Period
IT GROUP: Judge Walrath Clears Kaiser Transaction Settlement
JAZZ PHOTO: Budd Larner Serving as Special Litigation Counsel
KEMPER INSURANCE: AM Best Drops Financial Strength Ratings to D

KMART: Reorganized Debtor's Shares Begin Trading on Nasdaq NM
KMART CORP: Takes Action to Challenge $1.3BB Multi-Debtor Claims
KMART CORP: Market Says Bankruptcy Plan Undervalued New Equity
L-3 COMMS: Acquiring Bombardier Military Aviation Services Unit
LUBY'S INC: Sets 3rd Quarter Earnings Conference Call for Tues.

LUMBERMENS MUTUAL: S&P Drops Surplus Notes' Ratings to D from C
MED-EMERG INT'L: Names William Danis as Chief Financial Officer
MESA AIR GROUP: Issuing $75 Mill. of Convertible Notes due 2023
MORGAN STANLEY: Fitch Cuts 1997-HF1 Class J Rating to Junk Level
NATIONSRENT: Committee Settles Claims Dispute with James Kirk

NOBEL LEARNING: Clinches Senior Debt Refinancing Arrangement
NRG ENERGY: Judge Beatty Establishes Various Claims Bar Dates
ODD JOB: Amazing Savings Commences Tender Offer for All Shares
ORION REFINING: Hires Andrews & Kurth as UOP Litigation Counsel
OWENS CORNING: Committee Wants More Info re Disclosure Statement

PAXSON COMMS: Moody's Downgrades Bank, Bond & Preferred Ratings
PEAKSOFT: Entering into Debt Conversion Pacts with 10 Creditors
PENNEXX FOODS: Negotiations with Potential Key Investor Crumble
PEREGRINE: Equity Holders' Panel Brings-In Seneca as Advisor
PICCADILLY CAFETERIAS: Must Raise New Funds or Face Bankruptcy

PLAINS RESOURCES: Closes Share Repurchase & Debt Facility Deals
PREMCOR INC: Completes PRG's $300MM 7.5% Senior Notes Offering
QWEST COMMS: Touch America Asks FCC to Reconsider Qwest Order
READ-RITE CORP: Defaults on Certain Covenants Under Credit Pact
RESPONSE BIOMEDICAL: Closes $850K Private Placement Transaction

RIBAPHARM: ICN Pharma. Commences Tender Offer for All Shares
SAFETY-KLEEN: Seeks 8th Open-Ended Solicitation Period Extension
SAMSONITE CORP: Reports Improved First Quarter Earnings Results
SHOPKO STORES: Names Steve Andrews as SVP Law & Human Resources
SPIEGEL GROUP: DIP Financing Details Revealed in Final Documents

STEWART ENTERPRISES: Reduces Net Debt Below $500MM at June 4
TOUCHTUNES MUSIC: Converts Major Shareholder Loans to Preferred
TROLL COMMUNICATIONS: Retains Pepper Hamilton as Special Counsel
UNITED AIRLINES: Reaches New Agreement with Skywest Airlines
UNITED AIRLINES: SkyWest Confirms New Long-Term Agreement

UNITED AIRLINES: HSBC Seeks Stay Relief to Make Boston Payments
WEIRTON STEEL: Wants Blessing to Hire Buck as HR Consultant
WESTPOINT STEVENS: Gets Go-Signal to Pay Critical Vendor Claims
WILLIAMS: Closes $800 Million Senior Unsecured Debt Offering
WILLIAMS COS.: Completes Repurchase of Preferreds from Berkshire

WORLDCOM: CAGW Says Reports Confirm Government Should Stop Deals
WORLDCOM INC: Michael Salsbury Tenders a Noisy Resignation
WORLDCOM INC: Accepts Michael Salsbury's Resignation as Counsel
WORLDWIDE INSURANCE: S&P Cuts Financial Strength Ratings to BB+
WORTH MEDIA: US Trustee Appoints Official Creditors' Committee

XEROX CORP: Parker & Waichman LLP to File Claims against Company

* DebtTraders' Real-Time Bond Pricing

                          *********

ACTERNA CORP: Asks Court to Fix July 25, 2003 as Claims Bar Date
----------------------------------------------------------------
Acterna Corp., and its debtor-affiliates intend to file their
schedules of assets and liabilities within the week.  In view of
this, the Debtors ask the Court to establish July 25, 2003 as the
last day for filing proofs of claim in their cases to give all
creditors ample opportunity to prepare and file proofs of claim.

The Debtors propose that each entity that asserts a prepetition
claim must file an original, written proof of the claim which
substantially conforms to the proposed Proof of Claim form or
Official Form No. 10, so as to be received on or before the Bar
Date by their claims agent, Bankruptcy Services LLC.

Original Proofs of Claim must be sent by overnight delivery or
hand delivery to:

                United States Bankruptcy Court,
                Southern District of New York,
                One Bowling Green, Room 534,
                New York, NY 10004-1408

Those sent by mail must be addressed to:

                United States Bankruptcy Court,
                Southern District of New York,
                Bowling Green Station,
                New York, NY 10004

Proofs of Claim sent by facsimile will not be accepted.

According to Paul M. Basta, Esq., at Weil, Gotshal & Manges LLP,
in New York, entities holding any of these claims are no longer
required to file proofs of claim on or before the Bar Date:

    (a) Any claim for which a proof of claim substantially
        conforming to the proposed Proof of Claim has already
        been properly filed with the Clerk of the Court of the
        U.S. Bankruptcy Court for the Southern District of New
        York;

    (b) Any claim that is listed on the Schedules filed by the
        Debtors, provided that:

        * the claim is not scheduled as "disputed," "contingent"
          or "unliquidated";

        * the claimant does not disagree with the amount, nature
          and priority of the claim as indicated in the Schedules;
          and

        * the claimant does not dispute that the claim is an
          obligation of the specific Debtor against which the
          claim is listed in the Schedules;

    (c) any claim for an administrative expense;

    (d) any claim which has been paid in full by the Debtors;

    (e) any claim for which specific deadlines have previously
        been fixed by the Court;

    (f) any claim which is limited exclusively to the repayment of
        principal, interest, and other applicable fees and charges
        arising from any bond or note issued by the Debtors under
        that certain indenture dated May 21, 1998 for the senior
        subordinated notes due 2008.  However:

        * this exclusion will not apply to the indenture trustee
          under the Indenture;

        * the Indenture Trustee will be required to file one proof
          of claim, on or before the Bar Date, on account of all
          of the Subordinated Note Claims arising under the
          Indenture; and

        * any holder of a Subordinated Note Claim wishing to
          assert a claim, other than a Subordinated Note Claim,
          arising out of or relating to the Indenture will be
          required to file a proof of claim on or before the Bar
          Date, unless other exception applies;

    (g) any claim that has been allowed by a Court order entered
        on or before the Bar Date;

    (h) any claim asserted solely against any of the Debtors' non-
        debtor affiliates; and

    (i) any claim of a Debtor against another Debtor or any of the
        non-debtor subsidiaries of Acterna having claim against
        any of the Debtors.

Mr. Basta says that any person or entity that holds a claim
arising from the rejection of an executory contract or unexpired
lease must file a proof of claim based on the rejection on or
before the Bar Date.  However, the holders of equity security
interests in the Debtors need not file proofs of interest with
respect to the ownership of equity interests.  But if any holder
asserts a claim against the Debtors, including a claim relating to
an equity interest or the purchase or sale of equity interest, a
proof of that claim must be filed on or before the Bar Date.

Each Proof of Claim to be filed must be:

    * written in the English language;

    * be denominated in lawful currency of the United States as of
      the Petition Date;

    * conform substantially with the Proof of Claim provided; and

    * indicate the particular Debtor against whom the claim is
      being filed.

The Debtors propose that any claimholder who fails to file its
proof of claim by the Bar Date will be forever barred, estopped
and enjoined from asserting the claim.  The Debtors and their
property will be forever discharged from any and all indebtedness
or liability with respect to that claim.  The claimant will not be
permitted to vote to accept or reject any plan of reorganization,
or participate in any distribution to the claimholders or to
receive further notices regarding the claim.

The Debtors will deliver a notice of the Bar Date, including a
proof of claim form to:

    -- the United States Trustee;

    -- the counsel to each official committee;

    -- all entities that have requested notice of the proceedings
       in these Chapter 11 cases;

    -- all entities that have filed claims;

    -- all creditors and other known holders of claims, including
       all entities in the Schedules as holding claims;

    -- all parties to their executory contracts and unexpired
       leases;

    -- all parties to litigation;

    -- the Indenture Trustee;

    -- the Internal Revenue Service;

    -- the Securities and Exchange Commission; and

    -- additional entities as they deem appropriate.

To supplement the Bar Date Notice, the Debtors propose to publish
a similar notice to The New York Times (National Edition) and The
Wall Street Journal (National Edition), at least 25 days before
the Bar Date.  This is for the benefit of (i) those creditors to
whom no other notice was sent and who are unknown to, or not
reasonably ascertainable by the Debtors and (ii) all known
creditors whose current addresses are unknown. (Acterna Bankruptcy
News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


ACTRADE FINANCIAL: Opts to Cease Writing New Business
-----------------------------------------------------
Actrade Financial Technologies Ltd., announced that, effective
immediately, Actrade and all of its subsidiaries will cease
writing any new business and will not issue new Trade Acceptance
Drafts.

Actrade will promptly seek to reduce operating expenses, while
focusing primarily on collecting the Company's outstanding TADs
receivable, and on the sale process described below.

The Company also announced that, pursuant to its previously
announced plan to seek to maximize value for all of the Company's
creditors and stockholders, it is, with the assistance of its
financial advisor, Anderson, Weinroth & Partners, LLC, continuing
to pursue a sale of the Company. Although the Company is engaged
in discussions with potential buyers, there can be no assurance
that the Company will consummate a sale transaction.

Actrade is a publicly traded holding company incorporated in the
State of Delaware. Its business operations are conducted through
its subsidiaries that provide payment technology solutions that
automate financial processes and enhance business-to-business
commerce relationships. Actrade filed for Chapter 11 protection on
December 12, 2002 in the U.S. Bankruptcy Court for the Southern
District of New York (Manhattan) (Bankr. Case No. 02-16212).


ADAM STREET: S&P Puts B+/CCC- Note Class Ratings on Watch Neg.
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on the class
A-2A, A-2B, and A-3 notes issued by Adams Street CBO 1998-1 Ltd.,
an arbitrage high-yield CBO transaction, on CreditWatch with
negative implications. The rated notes have been downgraded twice
before, most recently Dec. 6, 2002. Standard & Poor's 'AAA' rating
on the same issuer's class A notes is not affected by this rating
action, reflecting the fact that the class enjoys an adequate
level of credit enhancement.

The current CreditWatch placements result from factors that have
negatively affected the credit enhancement available to support
the class A-2A, A-2B, and A-3 notes since their ratings were
lowered in December 2002. These factors include new underlying
asset defaults and a deterioration in the transaction's
overcollateralization ratios.

As of the May 2, 2003 trustee report, cumulative defaults within
the collateral pool securing the notes reached $133.3 million,
versus $105.1 million at the time of the last rating actions.
Added to losses on account of credit risk sales, these defaults
have contributed to bring down the class A and B
overcollateralization ratios by more than 10% each since the
December 2002 rating actions. The ratios now stand at 91.36% for
the A notes and 78.40% for the B notes, compared to their
respective levels of 101.8% and 88.40% last December, and well
below the corresponding minimum requirements of 117% and 104%,
respectively.

Standard & Poor's will analyze the results of new cash flow runs
for Adams Street CBO 1998-1 Ltd., to determine the future default
levels the rated tranches can withstand under different default
timings and interest rate scenarios, while still maintaining their
ability to honor all interest and principal payments coming due on
the notes. The result of these cash flow runs will be compared
with the projected default performance of the performing assets in
the collateral pool to determine if the ratings currently assigned
to the notes remain consistent with the credit enhancement
available.

               RATINGS PLACED ON CREDITWATCH NEGATIVE

                    Adams Street CBO 1998-1 Ltd.

                           Rating
          Class      To               From        Balance (mil. $)
          A-2A       B+/Watch Neg     B+                   155.35
          A-2B       B+/Watch Neg     B+                    28.65
          A-3        CCC-/Watch Neg   CCC-                  24.00


ADELPHIA BUSINESS: Court Approves Cananwill Premium Financing
-------------------------------------------------------------
Adelphia Business Solutions, Inc., and its debtor-affiliates
obtained authorization pursuant to Sections 364(c)(2) of the
Bankruptcy Code and Rule 4001(c) of the Federal Rules of
Bankruptcy Procedure from the Court to obtain secured postpetition
financing of insurance premiums for the procurement of certain
insurance policies necessary to maintain their operations.

                         Backgrounder

Adelphia Business Solutions Debtors' current insurance coverage
was procured and maintained by Adelphia Communications
Corporation, the ABIZ Debtors' former parent corporation.
Specifically, the ABIZ Debtors are "named insureds" under certain
workers' compensation, general liability, auto, and property
insurance policies and other insurance policies issued by several
different insurance carriers.  The ABIZ Debtors' current insurance
coverage under these policies was scheduled to expire on May 15,
2003.

Given the impending expiration of the estates' coverage under the
ACOM insurance policies, the ABIZ Debtors arranged new insurance
coverage, to become effective on May 16, 2003, to replace the
expiring policies. This coverage includes workers' compensation,
general liability, automotive liability, umbrella liability,
excess liability, and property liability/business interruption.
The Policies were anticipated to bear aggregate yearly premiums
not anticipated to exceed $2,800,000, and each Policy will have a
term of 12 months, commencing May 16, 2003.

In light of the magnitude of the Premiums, the ABIZ Debtors
determined that it would be prudent to conserve their cash
liquidity and finance the payment of the Premiums over a short
period of time.  Accordingly, the ABIZ Debtors intended to enter
into a certain Commercial Insurance Premium Financing and Security
Agreement with Cananwill, Inc., subject to this Court's approval.

The Debtors had been unsuccessful in their attempt to obtain
unsecured credit, as prescribed in Section 364(a) of the
Bankruptcy Code, for purposes of financing the Premiums.
Accordingly, the Debtors have engaged in discussions with
Cananwill and Aon Risk Services, Inc., which have advised them of
the likely range of terms available for a financing of the
Premiums.  The Financing Agreement will provide for terms
substantially similar to, but not anticipated to be in excess of:

      (i) a cash down payment of 25% of the Premiums, not
          anticipated to exceed $700,000;

     (ii) an aggregate financed amount not anticipated to exceed
          $2,100,000, payable in eight consecutive equal monthly
          installment payments, each in the amount not
          anticipated to exceed $262,500, commencing 30 days
          after the initial down payment; and

    (iii) a rate per annum not anticipated to exceed 5%, for
          total payments not anticipated to exceed $2,800,000,
          plus interest.

Pursuant to the proposed Financing Agreement, Cananwill is
entitled to cancel the Policies financed pursuant to the Financing
Agreement in the event of a default under the Financing Agreement
by the Debtors.  To secure payment of the amounts due Cananwill
pursuant to the Financing Agreement, the Debtors have agreed to
grant Cananwill a security interest in unearned or returned
premiums and other amounts due to the Debtors under the Policies
that result from the cancellation of the Policies.

Cananwill's willingness to finance the Premiums is expressly
conditioned on entry of an order of the Court that:

    (i) approves the Financing Agreement and authorizes the
        Debtors to grant the requested security interest to
        Cananwill;

   (ii) provides for the immediate lifting of the automatic stay
        in the event that the Debtors default on a payment due
        under the Financing Agreement;

  (iii) permits Cananwill under certain circumstances to cancel
        the Policies and apply any unearned or returned premiums
        due under the Policies to any amount owing by Debtors to
        Cananwill, without further application to the Court; and

   (iv) grants to Cananwill an administrative expense claim, in
        the event that the unearned or returned premiums are
        insufficient to pay Cananwill the total amount owed by
        the Debtors under the Financing Agreement. (Adelphia
        Bankruptcy News, Issue No. 35; Bankruptcy Creditors'
        Service, Inc., 609/392-0900)


ADELPHIA COMMS: Wants Approval of Wind-Down Agreement for CLECs
---------------------------------------------------------------
Paul V. Shalhoub, Esq., at Willkie Farr & Gallagher, in New York,
relates that in two separate transactions that took place in
December 2000 and October 2001, Adelphia Communications acquired
17 common local exchange carrier or "CLEC" markets from ABIZ in
Charlottesville, Richmond, Roanoke, Shenandoah Valley, Albany,
Buffalo, Cleveland, Connecticut, New Hampshire, Portland,
Providence, Rochester, Youngstown, Denver, Los Angeles, Orange
County and San Diego. Pursuant to the terms of the Acquisition,
ACOM purchased substantially all of the assets associated with the
Acquired CLECs for $198,300,000.

Since the Acquisition, Mr. Shalhoub states that ABIZ has continued
to manage the Acquired CLECs on ACOM's behalf pursuant to a series
of Management Services Agreements, as amended and restated.  The
MSAs provide, inter alia, that ACOM pay ABIZ management fees
aggregating $340,000 per month.  Under the MSAs, ABIZ agreed to
supervise and direct the development, planning, management and
operation of the acquired markets and networks. These services
have included:

      (i) administrative, accounting, billing, credit, collection,
          insurance, purchasing, clerical, financial reporting and
          other general administrative and management services;

     (ii) development of sales, advertising, and other promotional
          services;

    (iii) legal and regulatory compliance of ACOM's markets and
          its network including the filings required by state and
          federal agencies; and

     (iv) surveillance services, whereby ABIZ monitors the
          performance of central offices, switches and other
          network equipment to ensure that they are functioning
          properly.

Since September 25, 2002, Mr. Shalhoub maintains that the ACOM
Debtors have completed all of the necessary regulatory work
required by the Federal Communications Commission and various
State Public Utility Commissions to shut down a CLEC market.
This work consisted of, among other things, mailing discontinuance
of service notices and other correspondence to ACOM's affected
CLEC customers.  All customers have since migrated to alternative
providers and been disconnected and all technical equipment has
been removed from the Incumbent Local Exchange Carrier's or
"ILECs" central offices.  The ABIZ Debtors assisted the ACOM
Debtors by, among other things:

      (i) providing technical expertise on which circuits can and
          should be eliminated;

     (ii) processing the disconnection requests for all technical
          facilities;

    (iii) facilitating the cancellation of co-locations within the
          ILEC central offices and the removal of certain fiber
          and equipment in these offices; and

     (iv) returning certain data and codes utilized by the ACOM
          Debtors to the national code administrator.

Overall, the ABIZ Debtors designated a team of 25 people with
subject matter expertise from the various telecom areas to support
the ACOM Debtors' wind-down efforts.  Although these efforts were
projected to take 120 days beginning January 1, 2003, the wind-
down is currently scheduled to be completed on May 15, 2003.

In their capacity as managers of the ACOM Debtors' CLEC markets,
Mr. Shalhoub reports that the ABIZ Debtors have been responsible
for billing the ACOM Debtors' customers.  As is customary in the
industry, CLEC customers were billed for services monthly in
advance.  Accordingly, in instances where a customer voluntarily
terminates services or where the CLEC provider discontinues
service to a customer, customers may be owed amounts for prepaid
service that was never provided.

Accordingly, the Debtors seek the ability to refund from their
estates the Prepayments relating to corresponding services that
were not provided.  Certain of the Prepayments sought to be
refunded relate to prepetition periods and certain of the
Prepayments relate to postpetition periods.  This relief is
complementary to that which was approved by this Court on
June 26, 2002 in connection with the ACOM Debtors' first day
motion to honor or pay certain prepetition obligations to
customers in accordance with existing customer programs and
practices.  Pursuant to records provided by the ABIZ Debtors, the
ACOM Debtors estimate that the aggregate Prepayments to be
refunded from their estates will be less than $350,000 to 450
former customers.

The Debtors seek the Court's authority to enter into the Wind-
down Agreement and the Amendment.  Pursuant to the Wind-down
Agreement, the ABIZ Debtors have agreed to perform certain
services necessary to complete the wind-down of the ACOM Debtors'
14 decommissioned CLEC markets and the ACOM Debtors have agreed to
compensate the ABIZ Debtors for these services.  The related
Amendment serves to decrease the management fees due under the
MSAs in consideration of the fact that the ABIZ Debtors' ongoing
management duties will be diminished as the wind-down efforts
proceed and management duties are migrated to the ACOM Debtors.

The Debtors' decision to enter into the Wind-down Agreement and
the Amendment should be approved pursuant to Sections 105(a) and
363(b) of the Bankruptcy Code.  Section 363(b)(1) of the
Bankruptcy Code provides, in relevant part, that -- "The trustee,
after notice and a hearing, may use, sell, or lease, other than in
the ordinary course of business, property of the estate."  In
addition, Section 105(a) of the Bankruptcy Code provides that the
Court "may issue any order, process, or judgment that is necessary
or appropriate to carry out the provisions of [the Bankruptcy
Code]."

Mr. Shalhoub believes that the Debtors' decision to enter into the
Wind-down Agreement and Amendment is supported by sound business
justifications.  These agreements are and were necessary to the
ACOM Debtors' ability to prepare for, structure, and consummate
the wind-down of the 14 CLECs, which has largely been completed.
These efforts cannot be completed without the ABIZ Debtors'
services.  With respect to the ABIZ Debtors, ABIZ believes that
amounts negotiated under the Wind-down Agreement and the Amendment
appropriately compensate ABIZ for the services it has agreed to
provide.  Accordingly, the Debtors submit that the Court should
approve the Wind-down Agreement and the Amendment. (Adelphia
Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

Adelphia Communications' 10.875% bonds due 2010 (ADEL10USR1) are
trading at about 57 cents-on-the-dollar, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ADEL10USR1for
real-time bond pricing.


ADVANCED SWITCHING: Transfers All Assets to Liquidating Trust
-------------------------------------------------------------
Advanced Switching Communications, Inc., transferred substantially
all of its remaining assets to (and its remaining liabilities were
assumed by) the Advanced Switching Communications Liquidating
Trust in accordance with the Company's plan of complete
liquidation and dissolution. As previously announced by the
Company, May 24, 2002 was the last day of trading of the Company's
common stock on the Nasdaq National Market, and the Company's
stock transfer books were closed as of the close of business on
such date.

The Company will file a Form 15 with the Securities and Exchange
Commission to terminate the registration of the Company's common
stock under the Securities Exchange Act of 1934. However, under
the Trust Agreement, the Trustee is authorized to file current
reports on Form 8-K with the Commission as he deems appropriate.

Under the terms of the Liquidating Trust Agreement executed by the
Company and the Trustee as of June 10, 2003, each stockholder of
the Company automatically became the holder of one unit of
beneficial interest in the Liquidating Trust for each share of the
Company common stock then held of record by such stockholder. All
outstanding shares of the Company common stock are automatically
deemed cancelled, and the rights of the Beneficiaries in their
Units will not be represented by any form of certificate or other
instrument. Stockholders of the Company on the Record Date are not
required to take any action to receive their Units. The
Liquidating Trust will maintain a record of the name and address
of each Beneficiary and such Beneficiary's aggregate Units in the
Liquidating Trust. Subject to certain exceptions related to
transfer by will, intestate succession or operation of law, the
Units will not be transferable, nor will a Beneficiary have
authority or power to sell or in any other manner dispose of any
Units.

The Liquidating Trust was organized for the sole purpose of
winding up the Company's affairs and the liquidation of its
assets. From time to time, the Liquidating Trust may make
distributions of its assets to Beneficiaries, but only to the
extent that such assets will not be needed to provide for the
liabilities (including contingent liabilities) assumed by the
Liquidating Trust. No assurances can be given as to the amount or
timing of any distributions by the Liquidating Trust.

The following is a description of the material United States
federal income tax consequences to stockholders holding Units in
the Liquidating Trust. This discussion is not a comprehensive
description of all of the tax consequences that may be relevant to
such stockholders. The Liquidating Trust is intended to qualify as
a "liquidating trust" for federal income tax purposes. As such,
the Liquidating Trust will be a complete pass-through entity for
federal income tax purposes and, accordingly, will not itself be
subject to federal income tax. Instead, for federal income tax
purposes, stockholders of the Company on the Record Date will be
deemed to have received, and therefore own, a pro rata share of
the assets transferred by the Company to the Liquidating Trust,
and will be subject to the same federal income tax consequences
with respect to the receipt, ownership or disposition of such
assets as if such stockholder had directly received, owned or
disposed of such assets, subject to such Stockholders' pro rata
share of liabilities of the Company assumed by the Liquidating
Trust. Each stockholder will recognize gain or loss in an amount
equal to the difference between (x) the sum of (i) the value of
prior liquidating distributions received by such stockholder and
(ii) the fair market value of such stockholder's pro rata share of
the assets of the Company that were transferred to the Liquidating
Trust and (y) such stockholder's adjusted tax basis in the shares
of the Company's common stock held. Special rules apply if the
value of prior liquidating distributions received by such
stockholder exceed the stockholder's adjusted tax basis in the
shares of the Company's common stock held. Accordingly,
distributions, if any, of the Liquidating Trust's assets to
Beneficiaries of the Liquidating Trust will not be taxable to such
Beneficiaries, though Beneficiaries will be required to take into
account, in accordance with their method of accounting, a pro rata
share of the Liquidating Trust's items of income, deduction, gain,
loss or credit, regardless of the amount or timing of
distributions to Beneficiaries.

The Liquidating Trust will furnish to Beneficiaries of the
Liquidating Trust a statement of their pro rata share of the
assets transferred by the Company to the Liquidating Trust, less
their pro rata share of the Company's liabilities assumed by the
Liquidating Trust. On a yearly basis, the Liquidating Trust also
will furnish to Beneficiaries a statement of their pro rata share
of the items of income, gain, loss, credit and deduction of the
Liquidating Trust to be included on their tax returns.

Stockholders of the Company are urged to consult with their tax
advisers as to the tax consequences to them of the establishment
and operation of, and distributions, if any, by, the Liquidating
Trust. The foregoing summary of United States federal income tax
considerations is included for general information only and does
not constitute legal advice to any stockholder. The tax
consequences to each stockholder of establishing and operating the
Liquidating Trust will depend on the facts of each stockholder's
particular situation. Stockholders of the Company are urged to
consult with their tax advisers as to the tax consequences to them
of the establishment and operation of, and distributions, if any,
by the Liquidating Trust, including tax return reporting
requirements, the applicability of federal, state, local and
foreign tax laws and the effect of any proposed change in the tax
laws.

Inquiries regarding matters relating to the Company and the
Liquidating Trust should be delivered to the Trustee: Advanced
Switching Communications Liquidating Trust, Frederic T. Spindel,
Trustee, Venable, Baetjer & Howard, LLP, 1201 New York Ave., N.W.,
Washington, D.C. 20005; telephone number: (202) 513-4732;
facsimile number: (202) 962-8300.


AIR CANADA: Strategic Analysis Says Profitability is Paramount
--------------------------------------------------------------
On May 27, 2003, Strategic Analysis Corporation released a 10-page
commentary on Air Canada's restructuring.  SAC Corporate Advisory
Services has been retained by WestJet, Air Canada's competitor, to
provide it with strategic financial advice.

SAC says that the formation of an Ad Hoc Unsecured Creditors'
Committee is an important first step in ensuring that Air Canada's
debt restructuring occurs.  SAC also suggests that the cash-
strapped airline's bondholders, who will become the new Air Canada
shareholders, should insist that a New Air Canada fly planes on
profitable routes.  But this is a different concept than simply
saying that Air Canada must reduce its operating expenses by an
amount greater than its current losses.  SAC says Air Canada must
be able to understand its true operating costs, and to price its
services above fully allocated operating costs.  Otherwise, the
company's current CCAA proceeding will be repeated.

A copy of the SAC report is available at no charge at:

                http://bankrupt.com/misc/sac1.pdf

SAC was founded in 1978 as a research institute by the late
theoritician Dr. Verne Atrill.  It was placed on a business basis
in 1992 by its current president, C. Ross Healy, one of its early
principal investors and has been offering its services to
institutions and private investors since then.  SAC offers an
array of services for private client, from investment consulting
to portfolio management.


A.K. STEEL: Names Ernest Rummler VP for Manufacturing Planning
--------------------------------------------------------------
AK Steel Corporation (NYSE: AKS) (S&P/BB- Corporate Credit Rating)
said Ernest E. Rummler, 52, a vice president, had been given
additional responsibility for customer service.  Mr. Rummler was
previously vice president, manufacturing and steel sourcing.

Mr. Rummler joined the company in 1974 as an assistant
metallurgist at the Middletown, Ohio Works.  He progressed through
a number of positions in quality assurance, operations, planning
and customer service.  He was named director, manufacturing
planning and steel sourcing in 1998.  He holds a bachelor's degree
in metallurgical engineering from the University of Cincinnati and
a master of business administration degree from Xavier University
in Cincinnati.

Mr. Rummler assumed the customer service responsibility following
the retirement of Theodore Holmes on May 31, 2003, after 30 years
of service.  Mr. Holmes was vice president, customer service.

AK Steel produces flat-rolled carbon, stainless and electrical
steel products for automotive, appliance, construction and
manufacturing markets, as well as tubular steel products.  AK
Steel is headquartered in Middletown, Ohio. Additional information
about AK Steel is available on the company's Web site at
http://www.aksteel.com


ALADDIN GAMING: Purchase Selection Hearing Set for June 20
----------------------------------------------------------
Aladdin Gaming, LLC, pursuant to a Purchase and Sale Agreement,
agreed to sell substantially all of its rights and assets, free
and clear of liens, to OpBiz, LLC.  To be certain that the Estate
is receiving maximum value, the sale is subject to higher and
better offers.

The U.S. Bankruptcy for the District of Nevada will convene a
Purchase Selection Hearing to select the highest and best bidder
on June 20, 2003, at 9:00 a.m., before the Honorable R. Clive
Jones.

All bids must be approved by the Debtor, General Electric Capital
Corporation and a Steering Committee.  To qualify, bids must be
received by the parties on or before 3:00 p.m. on June 17.

Aladdin Gaming, LLC, dba Aladdin Hotel & Casino, owns and operates
a casino/hotel located in Las Vegas, Nevada. Aladdin Gaming
commenced its bankruptcy case on September 28, 2001, (Bankr. Nev.
Case No. 01-201141). Gerald M. Gordon, Esq., at Gordon & Silver,
Ltd. represents the Debtor in its liquidating efforts.


ALTERRA HEALTHCARE: Qualified Bids Due by June 23, 2003
-------------------------------------------------------
On April 10, 2003, the U.S. Bankruptcy Court for the District of
Delaware approved certain Bidding Procedures for the sale of
Securities and substantially all of the assets of Alterra
Healthcare Corporation.

Any party wishing to take part in the Sale Process and submit a
bid must contact either:

        1. The Debtor
           c/o Alterra Healthcare Corp.
           1000 Innovation Drive
           Milwaukee, Wisconsin 53326
           Attn: Patrick Kennedy and
                 Mark Ohlendorf

        2. Counsel for the Debtors
           Young Conaway Stargatt & Taylor LLP
           The Brandywine Bldg.
           1000 West Street
           17th Floor
           Post Office Box 391
           Wilmington, Delaware 19899-0391
           Attn: James L. Patton, Esq.

        3. Corp. Finance Advisors to the Debtor
           Cohen & Steers Capital Advisors, LLC
           757 Third Avenue
           21st Floor
           New York, NY 10017
           Attn: Peter E. Pickette

        4. Restructuring Advisors to the Debtor
           Silverman Consulting
           5750 Old Orchard Road
           Skokie, Illinois 60077
           Attn: Michael Silverman

        5. Corp. Counsel to the Debtors
           Rogers & Hardin
           2700 International Tower
           229 Peachtree Street, N.E.
           Atlanta, Georgia 30303
           Attn: Alan C. Leet, Esq.

All qualified bids must be submitted before 3:00 p.m. on June 23
to the parties listed above.

The Debtor will convene a meeting of all qualified bidders at
10:00 a.m. on July 17, or at such later date as the Debtor may
set, at Young Conaway's offices, conduct and auction, if that's
necessary, and determine the Winning Bidder.

A hearing to approve the Sale Transaction with the Winning Bidder
is fixed by the Bankruptcy Court for July 23, 2003, at 9:30 a.m.

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


AMES DEPARTMENT: Court Okays IPRecovery as Debtor's Sales Agent
---------------------------------------------------------------
Among the remaining groups of assets in Ames Department Stores,
Inc., and its debtor-affiliates' cases are their trademarks,
customer lists and other intellectual property assets, which they
also want to dispose.  To help them do so, the Debtors sought and
obtained the Court's authority to employ IPRecovery, Inc. as their
intellectual property disposition agent and advisor to aid in
disposing the remaining IP assets.

IPRecovery will conduct private and public transactions by sale,
license, transfer or otherwise in order to liquidate the Debtors'
remaining intellectual property assets.  But before any
transaction, minimum sale prices or floors will be mutually agreed
upon by IPRecovery and the Debtors, in consultation with Unsecured
Creditors' Committee, and will not be modified without the
Debtors' written consent.

The Debtors chose IPRecovery as their IP Asset disposition agent
based on the considerable experience of the firm's principals in
intellectual asset development, sales and marketing.  IPRecovery
and its principals have been engaged as primary intellectual
property and information technology recovery agent in other large
Chapter 11 cases, including Montgomery Ward, Service Merchandise
Company, Inc., Heilig-Meyers Company and Jacobsons's Stores, Inc.,
among others.

IPRecovery will provide these services:

   Phase I -- Investigative Audit of Insurance Programs Assets

                         A. Asset Review

   (a) analyze all trademark and service mark registrations
       including associated product designs, manufacturing
       agreements, graphics and logos, and other items of
       material interest to the sale of these assets;

   (b) inventory Internet brand assets, including domain names,
       PC and other information technology assets owned by the
       Debtors, and further define the content of each, with the
       goal of assembling a marketing package to facilitate the
       sale of these assets;

   (c) review all third-party software and maintenance agreement
       contracts, both fully paid-up licenses and outright
       purchases, to identify assets with recoverable value
       including the Catalyst license from Hills, the E3
       replenishment system, the Cornell-Mayo POS software, as
       well as more horizontal systems like database licenses,
       server operating systems, and others;

   (d) inventory and analyze, both for merchantability and value,
       the proprietary integrated software systems, including
       Merchandising, Logistics, Financial, Marketing, Store,
       Planning (AC Nellsen Planogram), Human Resources
       (staffing, payroll); and

   (e) analyze the structure and design of the data warehouse, as
       well as customer data and product pricing and sales
       history content with a focus on the 55 Gold membership
       database, SKU transaction information, and the sale
       performance of top vendors.

                     B. Asset Securitization

   (f) scanning and copying license agreements and registration
       information, securing databases; and

   (g) converting them to a universally accepted format, creating
       back-ups and replications of working systems, and creating
       redundancy in data, designs, formats, and environments as
       necessary.

           C. Consolidation, Review and Recommendation

   (h) rationalize the inventory and listing of properties to
       enable thorough review by the Debtors' management team;

   (i) determine the Debtors' rights to sell the assets;

   (j) trace all identified properties to weed out those that are
       not salable and to prioritize the balance for sale,
       disposal or long-term license; and

   (k) identify and rank the relative marketability of each of
       these properties with respect to the probability of cost-
       effective recovery.

     Phase II -- Asset Marketing, Disposition and Liquidation

   (a) evaluate the Debtors' rights to sell the assets, make
       contact with vendors, licensors and granting authorities
       to confirm the determinations, seek consent to transfer
       where applicable, or receive in writing consent to assign
       license;

   (b) work with the Debtors' counsel to develop template
       contracts and agreements for the purpose of facilitating
       the dissemination of database samples or any other
       sensitive information that is required to facilitate a
       transaction;

   (c) identify potential acquirers of the assets and solicit
       their interest on the Debtors' behalf, demonstrate the
       assets and related supporting documentation, as necessary,
       on IPRecovery website or the Ames Stores website;

   (d) develop and disseminate marketing material to promote the
       sale of the assets, including the provision of summary
       statistics from databases, imaging of license agreements,
       and creating brochures for private label products, brands,
       trademarks and service marks;

   (e) identify and engage, upon the Debtors' written approval,
       facilitators, agents and consultants on the Debtors'
       behalf to dispose of the assets at IPRecovery's sole
       expense to cover any third-party fees and commissions;

   (f) recommend potential structures for sale or auction
       processes to be used to dispose of the assets in the
       immediate year term;

   (g) negotiate and, with the Debtors' and creditors'
       representatives' approval, structure potential "stalking
       horse" contracts with appropriate acquirers of the assets,
       including providing aide to the company in negotiating
       transactions with any previously interested parties; and

   (h) act as the Debtors' exclusive disposition agent for the
       assets, collecting and analyzing appropriate and relevant
       data, and recommending transactions to dispose of the
       assets in the market in order to maximize value for the
       parties-in-interest and the Debtors' estate.

As compensation for its Phase I services, the Debtors will pay
IPRecovery $518,500 in total fees, payable immediately on the
commencement of the project.  The Debtors will also reimburse the
firm's out-of-pocket direct expenses.

For Phase II services, IPRecovery's compensation will consist of:

   (1) An incentive and success fee payable on the closing of any
       transaction for each or all of the IP assets:

       -- The success fees will be 20% of the gross consideration
          received for all sale transactions.  Any fees incurred
          for the use of sub-agents retained by IPRecovery to
          assist in the sale or disposition of the assets will be
          the firm's sole responsibility.  The appointment of any
          sub-agents will be subject to the Debtors' approval;

       -- An $18,500 payment at the commencement of the
          engagement, which will be applied as a credit toward
          future success fees.  In this case, the first
          additional success fee dollars payable to IPRecovery
          will begin accruing after $92,500 in gross
          consideration, which amount will go directly to the
          Debtors without any associated success fee; and

       -- "gross consideration" means any cash or other
          consideration paid to or for the benefit of the Debtors
          or their estate, including all fee income or other
          consideration received as a result of the sale,
          disposition or long-term license of the assets.  In the
          event that the gross consideration for any given
          transaction is to be paid in any manner other than cash
          at the closing, the parties to the agreement agree that
          IPRecovery's success fees for these transactions will
          be disbursed upon receipt of any gross consideration
          received by or for the Debtors' or their estate's
          benefit;

   (2) A preliminary marketing budget up to $30,000, as
       identified by IPRecovery, for direct expenditures
       necessary for the disposition of the assets.  IPRecovery
       will not incur these third-party expenditures, for
       advertising and promotion, without the Debtors' prior
       written consent;

   (3) The fees exclude any out-of-pocket expenses incurred in
       connection with the agreement; and

   (4) If the Debtors request that IPRecovery provide a senior
       member of their management to furnish court testimony or
       appear in court for purposes other than those relating to
       the initial approval of the agreement, IPRecovery's hourly
       rate for that person is $550.

The Debtors will also indemnify and hold IPRecovery and its
personnel harmless from and against claims, liabilities, cost and
expenses arising out of or relating to the services, except to the
extent the claims resulted from the gross negligence or willful
misconduct of IPRecovery personnel.

IPRecovery Director Gabriel Fried attests that no officer or
employee of the firm has any connection with the Debtors, their
creditors, or any party-in-interest in connection with these
Chapter 11 cases.  IPRecovery is a "disinterested person" within
the meaning of Section 101(14) of the Bankruptcy Code.  (AMES
Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


ARCIS CORP: Special Committee Exploring Strategic Alternatives
--------------------------------------------------------------
Arcis Corporation (RKS - TSX) commenced a process to explore
strategic alternatives designed to maximize shareholder value. The
Board of Directors has established a Special Committee consisting
of two Directors, William H. Smith, Q.C. and Harry Wheeler. The
Special Committee has also retained a former Director and Chair of
the Board, Theodore Hanlon, as a consultant.

Brawley Cathers Limited has been retained as a financial advisor
to assist in seeking out and exploring alternatives. David
Macdonald, Vice-Chair of Brawley Cathers, is a Director of Arcis.
Strategic alternatives may include the sale of the Company, a sale
of any assets of the Company, discontinuing any operations, a
merger, conversion, reorganization or other alternatives that may
be considered to be in the best interests of Arcis' shareholders.
The Board of Directors of Arcis has received an indication from a
group including some senior managers that they may be prepared to
make an offer for all the shares of the Company. In connection
with the management group proposal, Acumen Capital Finance
Partners Limited has been engaged as an independent valuator at
the management group's cost in accordance with Ontario Securities
Commission Rule 61-501.

At March 31, 2003, Arcis had a working capital deficit of $11.6
million.


BRIDGE INFO.: Plan Administrator Balks at Barclay's $3MM Claim
--------------------------------------------------------------
Bridge Information Systems, Inc.'s Plan Administrator asks the
Court to disallow in full Barclays Wall Street Realty
Corporation's Claim No. 1022 for $3,149,329 filed on June 28,
2001, pursuant to Section 502 of the Bankruptcy Code and the Plan
Administrator Agreement.

Derek L. Wright, Esq., at Foley & Larder, in Chicago, Illinois,
notes that:

    -- the claim is contingent upon the creditor showing it
       incurred damages due to the rejection of its lease with
       the Debtors,

    -- the creditor was the beneficiary of a $212,894 overpayment
       due to the Estate, and holds a $1,190 security deposit, and

    -- the Court ordered Barclays to return the overpayment.

However, Mr. Wright points out that Barclays failed to comply with
the Court Order and has not returned the overpayment to the
Estate.  Moreover, Barclay has not provided any proof of
mitigation since it must account for mitigation in claiming what,
if any, amount is due.

The Plan Administrator reserves the right to object in the future
to the Claim on any ground, and to amend, modify or supplement
this Objection, including without limitation, and to object if the
Claim is not disallowed as requested. (Bridge Bankruptcy News,
Issue No. 45; Bankruptcy Creditors' Service, Inc., 609/392-0900)


BUDGET GROUP: Wants Court Nod to Expand Scope of KPMG's Engagement
------------------------------------------------------------------
Budget Group Inc., and its debtor-affiliates want to expand KPMG's
role in their Chapter 11 cases.

Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor, LLP,
in Wilmington, Delaware, recounts that in the October 28, 2002
Retention Application, the Debtors hired KPMG to, among other
things, provide those services necessary to conduct an independent
audit of their companies to satisfy federal and regulatory
reporting requirements.  In the exercise of its business
judgement, the Debtors' board of directors dismissed KPMG as their
independent auditors on April 28, 2003.  As a result, KPMG agreed
to cease rendering auditing services to the Debtors.

The Debtors need KPMG to provide additional services necessary for
the development and execution of a successful plan in these cases
and to wind down the estates.  Accordingly, KPMG will provide
supplemental financial advisory services, as the Debtors and KPMG
deem necessary and appropriate, including:

    1. assistance with claims resolution procedures, including,
       but not limited to, analyses of creditors' claims by type
       and entity;

    2. assistance with the analysis and allocation of value
       received from the Debtors' various asset sales;

    3. assistance in preparing documents necessary for
       confirmation, including, but not limited to, financial and
       other information contained in the plan of reorganization
       and disclosure statement.

Mr. Morton submits that it is both necessary to the Debtors'
successful confirmation of a plan and in the best interest of
Debtors' estates and creditors to employ and retain KPMG to render
the Supplemental Services.  The Debtors believe that KPMG is
qualified and able to provide the Supplemental Services to the
Debtors in a cost effective and timely manner. (Budget Group
Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

Budget Group Inc.'s 9.125% bonds due 2006 (BDGP06USR1) are trading
at about 23 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BDGP06USR1for
real-time bond pricing.


CASELLA WASTE: Selling Non-Core Commodities Brokerage Business
--------------------------------------------------------------
Casella Waste Systems, Inc. (Nasdaq: CWST), a regional, non-
hazardous solid waste services company, expects to complete
shortly the sale of its non-core recycled commodities brokerage
businesses located in Passaic, New Jersey.

"Given our strategic approach to building stability and
predictability into our business and focusing on core solid waste
operations, we're pleased with this divestiture," John W. Casella,
chairman and chief executive officer of Casella Waste Systems,
said.

The company is selling the brokerage operation to employees who
currently operate the business.  The agreement is expected to be
executed this week, the company said.

The timing of the transaction requires it to be reflected in the
company's fiscal year 2003 results, the company said.

The company said that the audit of its fiscal year 2003 results
has been substantially completed by PricewaterhouseCoopers.
However, this transaction has made it necessary for the company to
reclassify the commercial recycling facility of the brokerage
business as a continuing operation in fiscal year 2003 and the
prior two fiscal years.  Pursuant to applicable accounting
requirements, a reaudit of the company's 2001 results is required,
as the company's former auditor, Arthur Andersen, is no longer in
operation and, therefore, is unable to opine.

Casella Waste Systems, headquartered in Rutland, Vermont, is a
regional, integrated, non-hazardous solid waste services company
that provides collection, transfer, disposal and recycling
services primarily in the northeastern United States.

For further information, visit the company's Web site at
http://www.casella.com

As reported in Troubled Company Reporter's January 17, 2003
edition, Standard & Poor's assigned its 'BB-' rating to solid
waste services company Casella Waste Systems Inc.'s new $325
million senior secured credit facilities and its 'B' rating to the
company's $150 million senior subordinated notes due 2013.

At the same time, Standard & Poor's affirmed its 'BB-' corporate
credit rating on Rutland, Vermont-based Casella. The outlook
remains stable.


CELL PATHWAYS: Shareholders OK OSI Pharmaceuticals Merger Pact
--------------------------------------------------------------
Cell Pathways, Inc. (Nasdaq:CLPA) announced that its stockholders
have voted to approve the merger agreement pursuant to which Cell
Pathways is being acquired by OSI Pharmaceuticals (Nasdaq:OSIP).
The closing of the transaction is expected to occur within the
next few days.

Cell Pathways, Inc., headquartered in Horsham, Pennsylvania, is an
emerging biopharmaceutical company focused on the discovery,
development and commercialization of novel and unique medications
to treat and prevent cancer and to treat certain autoimmune
diseases. The company's investigational drugs are orally active
small molecules designed to selectively induce apoptosis, or
programmed cell death, in precancerous and cancerous cells. Cell
Pathways has two drug candidates in clinical development:
Aptosyn(R), which is currently in Phase III trials in combination
with Taxotere(R) for the treatment of advanced non-small cell lung
cancer, and CP461, a more potent, second-generation molecule that
is currently being evaluated in dose ranging Phase I studies and a
series of exploratory Phase II studies in chronic lymphocytic
leukemia, renal cell carcinoma and prostate cancer. In addition,
CP461 is being evaluated in a Phase II study for inflammatory
bowel disease. In addition to the apoptosis platform, Cell
Pathways markets Gelclair(TM) Concentrated Oral Gel manufactured
by Sinclair Pharma, Ltd. of the United Kingdom. Gelclair(TM) is an
FDA approved product for the treatment of pain associated with
oral mucositis, a debilitating side effect often seen in cancer
patients undergoing radiation treatment and chemotherapy.

                         *     *     *

                   Going Concern Uncertainty

In its Form 10-Q for the quarter ended March 31, 2003, the Company
reported:

"The Company has incurred negative cash flows from operations
since inception and, as of March 31, 2003, the Company had a
deficit accumulated during the development stage of $146,745,238.
Management believes that the Company's existing cash and cash
equivalents will be adequate to fund operations through the second
quarter of 2003, based on projected revenue and expenditure
levels. Should appropriate sources of funding not be available on
terms acceptable to the Company, management would take additional
actions which could include a further reduction in work force, a
reduction in overall expenditures, the delay or elimination of
certain clinical trials and research activities and the reduction
or suspension of operations until such time as appropriate sources
of funding are available. In February 2003, the Company entered
into an agreement and plan of merger with OSI whereby, if approved
by the Company's stockholders, the Company would be acquired by
OSI. There is no assurance, however, that the transaction with OSI
will be approved by the Company's stockholders. Should the
transaction not be approved by the Company's stockholders, there
is no assurance that additional funding will be available on terms
acceptable to the Company, if at all, to enable the Company to
continue operations.

"These factors raise substantial doubt about the Company's ability
to continue as a going concern. The consolidated financial
statements do not include any adjustments that might result from
the outcome of this uncertainty."


CLAYTON HOMES: Special Shareholders Meeting to Convene on Monday
----------------------------------------------------------------
Clayton Homes, Inc. (NYSE:CMH) announced that a special
shareholders' meeting will be held on July 16, 2003, at 11:00 a.m.
(EDT) at the Company's Headquarters, 5000 Clayton Road, Maryville,
Tennessee 37804.  Shareholders are being asked to vote on a
proposal to adopt the Agreement and Plan of Merger, dated as of
April 1, 2003, among the company, Berkshire Hathaway Inc. and B
Merger Sub Inc.  Stockholders of record at close of business on
June 2, 2003, will be entitled to vote on the proposal.

On June 9, 2003, a stockholder of Clayton Homes, Orbis Investment
Management Limited, filed a lawsuit in the Delaware Chancery Court
alleging that the record date for the company's 2000, 2001 and
2002 annual meetings of stockholders, in each case, was more than
60 days before the date of the meeting in violation of the
Delaware General Corporation Law. The complaint seeks, among other
things, a declaration ordering the company to hold an annual
meeting for the election of directors before the special meeting,
and declaring that all actions taken at the 2000, 2001 and 2002
annual meetings of stockholders be declared void.

The company's records indicate that the record dates for the 2000,
2001 and 2002 annual meetings were inadvertently set at 63, 76 and
76 days, respectively, before the applicable meeting date. The
company notes, however, that seven of its eight current directors
were elected at the 1999 annual meeting, which was held within 60
days of the meeting date, and have served continuously since then.
Under the company's bylaws and Delaware law, the company's
directors hold office until their successors have been elected. As
permitted by the Delaware General Corporation Law, the eighth
director was elected to the board by the other seven directors at
a board meeting held on February 6, 2003. Clayton Homes intends to
proceed with the special meeting and to continue to vigorously
defend against the claims by Orbis Investment Management Limited.

Clayton Homes, Inc. is a vertically integrated manufactured
housing company with 20 manufacturing plants, 296 company-owned
stores, 611 independent retailers, 86 manufactured housing
communities, and financial services operations that provide
mortgage services for 168,000 customers and insurance protection
for 100,000 families.

As reported in Troubled Company Reporter's April 9, 2003 edition,
the ratings of Clayton Homes, Inc. and some of its Vanderbilt
Mortgage manufactured housing securitizations were placed on
Rating Watch Positive by Fitch Ratings. Currently, Fitch has an
indicative senior unsecured rating of 'BB+' for Clayton Homes.


CONEXANT SYSTEMS: Pictos' Sale to ESS Bolsters Cash Position
------------------------------------------------------------
Conexant Systems, Inc. (Nasdaq: CNXT), a worldwide leader in
semiconductor system solutions for communications applications,
announced that the acquisition of Pictos Technologies, Inc., by
ESS Technology has strengthened both Conexant's cash position and
its balance sheet. ESS announced Monday that it acquired Pictos,
in which Conexant held an approximately 60 percent equity
interest, for $27 million in cash. Pictos Technologies, Inc., was
formed in July 2002 when Conexant combined its digital imaging
business with Zing Network to create a new, privately held company
focused on providing semiconductors and embedded camera software
for digital still cameras and mobile imaging devices.

"The Pictos transaction enhances our cash resources and
strengthens our balance sheet as Conexant prepares for operation
as a company focused on providing semiconductor solutions for the
broadband digital home," said Dwight W. Decker, Conexant chairman
and chief executive officer. "In addition, and perhaps most
importantly, the talented Pictos team and the company's unique
digital imaging technology have found a natural home in ESS
Technology."

Conexant plans to spin-off Mindspeed Technologies(TM), the
company's Internet infrastructure business, on June 27, 2003. When
the spin-off is complete, the continuing Conexant will consist of
the company's Broadband Communications business segment. At spin-
off, Mindspeed shares will be traded on the American Stock
Exchange under the ticker symbol MND. Conexant will continue to
trade on the Nasdaq exchange under the ticker symbol CNXT.

Conexant Systems, Inc., a worldwide leader in semiconductor system
solutions for communications applications, leverages its expertise
in mixed-signal processing to deliver integrated systems and
semiconductor products through two separate businesses.

The Broadband Communications business develops and delivers
integrated semiconductor solutions that enable digital
entertainment and information networks for the home and small
office. Its product portfolio includes the building blocks
required for bridging cable, satellite, and terrestrial data and
digital video networks.

Mindspeed Technologies(TM), the company's Internet infrastructure
business, designs, develops and sells semiconductor networking
solutions for communications applications in enterprise, access,
metropolitan and wide area networks. Conexant is headquartered in
Newport Beach, Calif. To learn more, visit http://www.conexant.com
or http://www.mindspeed.com

Conexant Systems' 4.000% bonds due 2007 are currently trading at
about 60 cents-on-the-dollar.


CONGOLEUM CORP: Delays Planned Chapter 11 Filing Until September
----------------------------------------------------------------
Congoleum Corp., a maker of sheet and tile flooring whose shares
have fallen 74 percent in the past 12 months, said it will
postpone its planned chapter 11 bankruptcy filing until September,
Bloomberg News reported. The delay is the result of amendments to
its settlement agreement with lawyers representing more than 75
percent of the asbestos claims filed against the Mercerville, New
Jersey-based company, Congoleum said in a release distributed by
Business Wire.

The amendments give people more time to review and respond to
information required to participate in the settlement, the company
said. As part of the agreement, Congoleum will file for bankruptcy
protection. The company still hopes to complete its reorganization
by the end of the year, it said in the statement, reported the
newswire. (ABI World, June 10, 2003)


CONTINENTAL AIRLINES: Fitch Junks Convertible Sr. Notes at CCC+
---------------------------------------------------------------
Fitch Ratings has assigned a rating of 'CCC+' to the $150 million
in convertible senior unsecured notes issued by Continental
Airlines, Inc. The privately placed notes carry a coupon rate of
5.0% and mature in 2023. The amount of debt issued may rise to
$175 million if investors exercise all purchase rights. The Rating
Outlook for Continental is Negative.

The 'CCC+' rating reflects Continental's exposure to future demand
and cost shocks as a result of its highly leveraged capital
structure and relatively weak liquidity position.

Although the airline has demonstrated an ability to tap the
capital markets in an effort to bolster financial flexibility and
create a stronger unrestricted cash balance, Continental has no
remaining unencumbered assets to use as collateral in support of
future debt financings. Following the completion of the $150
million convertible offering and the receipt of $172 million in
government cash reimbursement for security mandates funded since
September 2001, Continental expects to report a quarter-ending
unrestricted cash balance of approximately $1.4 billion as of June
30. In light of continuing uncertainty over the timing of a
recovery in industry unit revenue, the additional cash on the
balance sheet will provide a much-needed buffer against any future
demand and fuel price shocks that could derail the airline's
return to sustained positive operating cash flow and
profitability.

In a June 5 SEC filing, Continental indicated that summer bookings
appear reasonably strong in domestic, Latin American and Atlantic
markets. This offers some support for the conclusion that unit
revenue may continue to improve through the remainder of 2003.
Continental's May passenger unit revenue increased by an estimated
one to three percent over May 2002 levels, the first year-over-
year increase reported since demand weakness related to the Iraq
war and terrorism began to hurt traffic and yields in February.
Pacific demand remains soft as a result of SARS, but Continental's
relatively low network exposure in that region provides some
insulation from further revenue weakness. The sustainability of
any incipient unit revenue recovery will be critical for
Continental in generating cash and taking the first steps toward
re-building a badly weakened balance sheet.

With the $150 million convertible issue and two recent secured
financings collateralized by spare parts (totaling $200 million in
new debt), Continental has raised its total balance sheet debt and
capital lease position to approximately $5.8 billion, including
current maturities. Factoring in off balance sheet aircraft and
facilities leases (capitalized at 8 times rental expense),
Continental's total adjusted debt level stands at approximately
$16.2 billion. Continental faces current debt and capital lease
maturities of $507 million (through March 31, 2004). Total debt
and capital lease maturities are approximately $470 million in
2004 and $680 million in 2005. While the level of pension plan
underfunding at Continental is low relative to the other U.S.
network carriers, increases in required cash contributions to
pension plans are likely over the next few years. Continental's
pension plans were underfunded by an estimated $1.2 billion
(projected benefit obligation basis) as of year-end 2002.

Fleet commitments represent a further claim on cash flow through
the end of 2004. Continental is scheduled to take 4 new Boeing
737-800 aircraft in the fourth quarter of this year, and 18 new
narrowbodies (12 B737-800s and 6 B757-300s) in 2004. The upcoming
Boeing deliveries are likely to be financed with new leases,
driving only modest cash capital spending requirements. Total
capital spending in 2003 is now expected to be about $230 million,
of which $80 million is related to new aircraft.

Continental's pilots, represented by the Air Line Pilots
Association, currently have an amendable collective bargaining
agreement. Given the substantial changes in unit labor costs and
work rules among the restructuring U.S. network carriers
(American, United and US Airways), pressure is mounting for
Continental management to avoid pay rate and productivity changes
in any new ALPA contract that would raise unit labor costs and
erode Continental's competitive position. At this time there is no
indication that a new agreement with ALPA is likely to be reached
quickly. As the gap between Continental's labor costs and those of
the other major carriers has closed, Continental management is
pressing ahead with plans to pull an additional $500 million in
operating expenses out of the airline by the end of 2004. Much of
this reduction will be related to lower projected available seat
mile capacity and employee furloughs driven by schedule
reductions.


CONTINENTAL AIRLINES: Closes $175M 5% Convertible Debt Offering
---------------------------------------------------------------
Continental Airlines, Inc. (NYSE: CAL) has completed its sale of
5% Convertible Notes due 2023, which was announced last week.  In
addition to the offering of $150 million principal amount of
notes, the company announced that the initial purchasers had
exercised their option to purchase an additional $25 million
principal amount of notes.  Net proceeds of the offering after
expenses and commissions are expected to be approximately
$170 million, which will be used for working capital and general
corporate purposes.

The Notes and the common stock issuable upon conversion of the
Notes have not been registered under the Securities Act of 1933,
as amended, or applicable state securities laws, and unless so
registered, may not be offered or sold in the United States,
except pursuant to an applicable exemption from the registration
requirements of the Securities Act of 1933, as amended, and
applicable state securities laws.


CONTINENTAL ENG'G: Case Summary & Largest Unsecured Creditors
-------------------------------------------------------------
Lead Debtor: Continental Engineering & Consultants, Inc.
             4949 Huish Drive
             East Chicago, Indiana 46312

Bankruptcy Case No.: 03-62669

Debtor affiliates filing separate chapter 11 petitions:

   Entity                                             Case No.
   ------                                             --------
   Continental Machine & Engineering Co., Inc.        03-62671

Chapter 11 Petition Date: June 4, 2003

Court: Northern District of Indiana (Hammond Division)

Judge: Kent Lindquist

Debtors' Counsel: Ronald R. Peterson, Esq.
                  Jeffrey L. Gansberg, Esq.
                  Jenner & Block, LLC
                  One IBM Plaza
                  Chicago, IL 60611
                  Tel: (312) 840-8662
                  Fax : (312) 840-8762

Estimated Assets: $1 Million to $10 Million

Estimated Debts: $1 Million to $10 Million

A. Continental Engineering's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
All States Freight Sys.,    Trade                       $5,247
Inc.

Babbitting Service, Inc.    Trade                      $11,945

Bearing Headquarters, Inc.  Trade                       $2,749

Columbiana Foundry Co.      Trade                      $24,008

Die Craft                   Trade                       $2,800

Eastern Express             Trade                         $950

Ford Motor Credit Co.       Trade                       $3,372

Hollaway Meyer's            Trade                       $1,102

Indiana Dept. of Rev.       Trade                       $2,077

Infra Metals                Trade                       $2,787

Metal Processor's Supply    Trade                       $3,972
Inc.

Overhead Material Handling  Trade                      $11,238

Positive Publications, LLC  Trade                       $2,847

Praxair Distribution        Trade                       $2,299

Roll Center, Inc.           Trade                       $1,200

Swift Saw                   Trade                      $11,295

Team Industrial Services    Trade                       $2,707

Trans United, Inc.          Trade                         $840

Tri-State Metal, Inc.       Trade                         $940

U.S. Casting Co.            Trade                       $6,929

B. Continental Machine's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
AGA Gas Central, Inc.       Trade                      $12,082

ALBCO Foundry Inc.          Trade                       $9,344

Alloy Sling Chain           Trade                       $8,121

Barberton Steel & Iron,     Trade                       $9,121
Inc.

Bearing Service Company     Trade                      $17,935

Crowe, Chizek & Co. LLP     Trade                       $6,811

Falk PLI Engineering &      Trade                      $23,300
Survey

Field System Machining,     Trade                      $37,960
Inc.

Flowserve/CFCM/VR-TESCO     Trade                     $133,705

Joseph T. Ryerson & Son,    Trade                      $16,866
Inc.

Mighty Mill Supply          Trade                       $3,553

Motion Industries, Inc.     Trade                      $25,588

National Tube Supply Co.    Trade                       $4,246

On Site Machining Corp.     Trade                      $17,221

Professional Cleaning       Trade                       $6,904

Safety-Kleen Corp.          Trade                      $22,362

Scot Forge Co.              Trade                       $4,980

Self Leveling Machines,     Trade                      $57,000
Inc.

Vertical Seal Co.           Trade                      $19,740

Vidimos Inc.                Trade                       $8,329


DA CONSULTING: Commences Trading on OTCB Effective June 10, 2003
----------------------------------------------------------------
DA Consulting Group Inc. (Nasdaq:DACG), a global consulting firm
specializing in corporate knowledge services, failed to
demonstrate a closing bid price of at least $1.00 which resulted
in the company's common stock being delisted by the Nasdaq Stock
Market effective June 10, 2003. The company's common stock was
eligible for quotation on the OTC Bulletin Board on June 10, 2003.

DACG specializes in solutions that support and empower employees
who face complex enterprise transformations. These solutions,
which address a broad spectrum of needs, comprise a combination of
change communication, business process mapping, documentation and
learning content development, end-user training or performance
support geared to the specific staff and more general business
need. For more than 18 years DA Consulting Group has worked with
some of the most progressive and dynamic businesses in the world
helping their people overcome the challenges of change in the most
engaging and effective manner. DA Consulting Group's solutions
place the employee at the center of the project to ensure that all
aspects of the solution delivered are geared towards meeting that
individual's needs thereby serving the strategic ambitions of the
business.

                          *     *     *

          Liquidity, Going Concern and Managements Plans

In its Form 10-Q for the quarter ended March 31, 2003, the Company
reported:

"Significant losses were incurred for fiscal years 1999 through
2002. The Company incurred significant losses in the quarter
ending March 31, 2003 and revenue expectations in the second
quarter of 2003 have been short of expectations due to a large
project cancellation following the sale of a customer' business
and the continued difficult technology market.   The Company is in
negotiations to merge with another company. In the event the
merger is not completed, another source of financing will be
required for the Company to continue its operations. Current
financing is not adequate to continue as a going concern.
Continued losses and the uncertainty of the Company's ability to
raise additional capital raise substantial doubt about the
Company's ability to continue as a going concern.

"To the extent the merger is not completed, the cash generated
from the line of credit, receivables based financing, and
continued operations are insufficient to meet the Company's
current working capital needs, the Company will have to raise
additional capital.  No assurance can be given that additional
funding will be available or, if available, will be on terms
acceptable to the Company. Uncertainty regarding the amount and
timing of any proceeds from the Company's plans to raise
additional capital raises substantial doubt about the Company's
ability to continue as a going concern.

"At May 16, 2003 the Company had sold $0.4 million U. S. accounts
receivables under a receivable based financing agreement
representing all eligible U. S. accounts receivable."


DALEEN TECHNOLOGIES: Shareholders Re-Elect 3 Directors to Board
---------------------------------------------------------------
Daleen Technologies, Inc. (OTCBB:DALN), a global provider of
licensed and outsourced billing, customer care, event management,
and revenue assurance solutions for traditional and next
generation service providers, announced that three directors were
approved by the company's stockholders at Daleen's annual meeting
of stockholders held Tuesday. Stockholders re-elected Dennis
Sisco, John McCarthy, and Ofer Nemirovsky to serve a three-year
term expiring at the 2006 annual meeting. Following the official
business session, Gordon Quick, Daleen's president and CEO,
provided an update of the company's progress since Daleen acquired
Abiliti Solutions, Inc. on December 20, 2002. Mr. Quick also
reported on new customer activity, including a recently signed
contract with Empresa de Telecomunicaciones de Bogota, one of
Colombia's leading telecommunications providers.

Daleen Technologies, Inc. is a global provider of high performance
billing, customer care, event management and revenue assurance
software, with a comprehensive outsourcing solution for
traditional and next generation service providers. Daleen's
RevChain(R) billing and customer management solutions utilize
advanced Internet technologies to enable providers to reach peak
operational efficiency while driving maximum revenue from products
and services. With its recent acquisition of the assets of Abiliti
Solutions, Inc., Daleen expanded its presence among large network
wholesalers and resellers in the U.S., adding new product and
delivery capabilities, including the Simpliciti.net(TM) event
management software and BillingCentral(R) ASP outsourcing
solutions. Daleen was listed in 2002 as No. 63 on the Technology
Top 500, a national ranking by Deloitte and Touche of the fastest
growing technology companies in North America.* More information
about Daleen can be found on the company's Web site at
http://www.daleen.com

                         *     *     *

            LIQUIDITY AND GOING CONCERN UNCERTAINTY

In its 2002 Annual Report filed on SEC Form 10-K, the Company
reported:

"Net cash used in operating activities was $9.2 million for the
year ended December 31, 2002, compared to $31.9 million for the
year ended December 31, 2001. The principal use of cash for both
periods was to fund our losses from operations.

"Net cash provided by financing activities was $3.6 million for
the year ended December 31, 2002, compared to $25.1 million for
the year ended December 31, 2001. In 2002, the cash provided was
primarily related to the net proceeds received from the 2002
Private Placement. In 2001, the cash provided was primarily
related to the net proceeds received from the 2001 Private
Placement.

"Net cash used in investing activities was $1.1 million for the
year ended December 31, 2002 compared to $1.9 million for the year
ended December 31, 2001. The cash used in 2002 was primarily
related to transaction costs associated with the 2002 Private
Placement. The cash used in 2001 was primarily related to a non-
recourse note receivable issued to our chairman and chief
executive officer for approximately $1.2 million and capital
expenditures of approximately $780,000.

"We continued to experience operating losses during the year ended
December 31, 2002 and had an accumulated deficit of $210.9 million
at December 31, 2002. Cash and cash equivalents at December 31,
2002 was $6.6 million. The cash used in operations during the year
ended December 31, 2002 was a significant improvement from
previous years. The 2001 Restructurings and 2002 Restructuring
resulted in a reduction in operating expense levels and cash usage
requirements in the year ended December 31, 2002.

"We intend to continue to manage our use of cash. We believe the
cash and cash equivalents at December 31, 2002, together with the
reduced cost structure resulting from the 2001 Restructurings and
2002 Restructuring, the acquisition of the revenue stream expected
from the BillingCentral service offering as well as our 2003
anticipated revenue, may be sufficient to fund our operations for
the foreseeable future. However, the telecommunications and
software industries are still faced with many challenges. In
addition, there is a high business concentration risk with certain
of our outsourcing services customers and if any of these
customers were to terminate their agreement with us it would
severely impact our business. We provide outsourcing services to
our largest customer pursuant to a contract expiring at the end of
December 2003. In addition, the customer has financial restraints.
If this customer were to cease doing business with us for any
reason, we may be required to further reduce our operations and/or
seek additional public or private equity financing or financing
from other sources or consider other strategic alternatives. There
can be no assurances that additional financing or strategic
alternatives will be available, or that, if available the
financing or strategic alternatives will be obtainable on terms
acceptable to us or that any additional financing would not be
substantially dilutive to our existing stockholders. If this
customer were to cease doing business with us for any reason, and
we failed to obtain additional financing or failed to engage in
one or more strategic alternatives it may have a material adverse
affect on our ability to meet our financial obligations and to
continue to operate as a going concern. Our audited consolidated
financial statements included elsewhere in this Form 10-K have
been have been prepared assuming that we will continue as a going
concern, and do not include any adjustments that might result from
the outcome of this uncertainty."


DAYTON SUPERIOR: Closes Sr. 2nd Secured Notes Private Placement
---------------------------------------------------------------
Dayton Superior Corporation announced the completion of its
offering of $165.0 million of senior second secured notes in a
private placement. The net proceeds of the offering were used to
repay existing indebtedness under its credit facility.
Dayton Superior Corporation, with annual revenues of $378 million,
is the largest North American manufacturer and distributor of
metal accessories and forms used in concrete construction and
metal accessories used in masonry construction and has an
expanding construction chemicals business. The Company's products,
which are marketed under the Dayton Superior(R),
Dayton/Richmond(R), Symons(R), American Highway Technology(R) and
Dur-O-Wal(R) names, among others, are used primarily in two
segments of the construction industry: non-residential buildings
and infrastructure construction projects.

As reported in Troubled Company Reporter's June 4, 2003 edition,
Standard & Poor's Ratings Services assigned its 'B+' senior
secured debt rating to construction products manufacturer Dayton
Superior Corp.'s proposed $150 million senior secured notes due
2008.

Standard & Poor's said that it would raise its bank loan rating on
the company's $50 million senior secured revolving credit facility
to 'BB-' from the current 'B+' if the new notes issue is
successful and the bank facility is amended as currently
anticipated.

Standard & Poor's said that it has affirmed its 'B+' corporate
credit rating on the company. The outlook remains negative.


DVI INC: Fitch Places Sr Unsecured Debt Rating on Watch Negative
----------------------------------------------------------------
Fitch Ratings placed DVI, Inc.'s 'B+' senior unsecured debt rating
on Rating Watch Negative. Previously, the Rating Outlook was
Negative. Approximately $155 million of senior unsecured debt is
affected by this rating action.

Since 2002, Fitch has been concerned regarding DVI's ability to
successfully refinance its $155 million of senior unsecured debt
due in February 2004. This, coupled with DVI's weak operating
results and increased managed leverage, was the basis for the
Negative Rating Outlook.

A series of events over the last week has further increased
Fitch's concern regarding the successful refinancing of the
unsecured debt. On June 4, 2003, DVI announced that its long-time
auditor, Deloitte and Touche LLP had resigned. The resignation
stems from a disagreement between DVI and Deloitte over the
placement of a paragraph in the company's March 31, 2003 10-Q
filing indicating that Deloitte completed its audit with the
exception of a single related-party investment. Separately, the
company's 8-K filing on June 9, 2003 also indicated that in a June
2002 management letter, Deloitte cited several reportable
conditions including that the company had material weaknesses in
its ability to monitor non-performing and impaired assets.
Management represents that these weaknesses have been addressed
and are no longer issues.

Fitch believes that neither the auditor's resignation nor the
reportable conditions stem from any fundamental accounting errors
or disagreements. However, DVI, after a weak fiscal-year 2002, has
been striving to regain investor confidence and was pursuing a
series of actions to strengthen its balance sheet and risk
profile. Deloitte's resignation is likely to slow DVI's momentum,
if for no other reason, the new accountants may elect to reaudit
the company's fiscal year 2001 and 2002 financial results in
addition to their audit for the fiscal year ending June 30, 2003.
As a result, DVI's capital markets initiatives may be delayed
pending the completion of the 2003 audit. Therefore, the timely
selection of a new auditor will be crucial. Fitch expects the
Rating Watch to be resolved once a new auditor is in place and has
completed audited financial statements, and DVI has made
meaningful progress towards the refinancing of its senior
unsecured debt.

DVI's senior unsecured rating remains at 'B+' and is reflective of
Fitch's belief that the company continues to have limited options
for refinancing or extending its senior unsecured debt. Rating
fundamentals are based on the company's good market position in
the large- and medium-ticket medical equipment finance business.
Since September 2002 DVI has demonstrated discipline by executing
on a restructuring plan that involves refocusing capital and
intellectual resources on the company's core domestic equipment
finance and medical receivables finance businesses. Specifically,
DVI has made progress towards monetizing its capital commitments
to foreign joint ventures as well as liquidating venture leasing
subsidiary Third Coast Capital. Operating losses in both the
international finance and venture leasing businesses have weakened
DVI's profitability over the last two years.

Headquartered in Jamison, Pennsylvania, DVI is an independent,
specialty commercial finance company providing asset-based lending
to the health care industry. DVI's core business is financing
large- and medium-ticket diagnostic and surgical equipment for
outpatient centers, clinics, and doctors groups in the United
States. The company also provides working capital financing for
medical receivables through its DVI Business Credit subsidiary.


DVI INC: Moody's Ratchets Sr Unsecured Debt Rating to B3 from B2
----------------------------------------------------------------
Moody's Investors Service dropped its senior unsecured debt rating
on DVI, Inc., over the latter's financial flexibility concerns,
aggravated by the resignation of its independent auditors. The
rating was cut to B3 from B2 and is on review possible further
downgrade.

Moody's will seek to better understand the circumstances relating
to the recent resignation of DVI's independent accountants. A new
accounting firm and a timely issuance of financial statements
containing an unqualified audit opinion by the accountants would
be viewed positively by Moody's.

DVI, Inc., provides financing and leasing of healthcare equipment,
and provides healthcare receivables financing. The company is
headquartered in Jamison, Pennsylvania.


ENRON CORP: Judge Gonzalez Clears Broadwing Settlement Agreement
----------------------------------------------------------------
Enron Broadband Services, Inc. and Enron Broadband Services,
L.P., ask the Court, pursuant to Section 365 of the Bankruptcy
Code and Rule 9019 of the Federal Rules of Bankruptcy Procedure to
approve:

    (a) EBS Inc.'s assumption and assignment of a co-location
        lease agreement, and

    (b) a settlement agreement and release entered into among
        the EBS Debtors, Broadwing Communications Services, Inc.
        and Broadwing Communications, Inc., in satisfaction of
        the Parties' obligations under certain agreements
        including certain master agreements, confirmations,
        co-location agreements, purchase orders and a guaranty.

Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, in New York,
relates that EBS Inc. entered into a Master Services Agreement
with BCSI to procure communications services for its network
facilities monitoring located throughout the United States.

Pursuant to the Service Agreement, EBS Inc. and BCSI entered into
certain purchase orders for the provision of the services.  All
Purchase Orders terminated on or before November 15, 2002.

On March 28, 2000, EBS L.P. and BCSI entered into a Master
Bandwidth Purchase and Sale Agreement, which provides for the
purchase and sale of various bandwidth products in connection with
Enron's wholesale broadband trading business as well as two-way
termination payments in the event of the Master Agreement's early
termination.  On March 28, 2000, and from time to time thereafter,
EBS L.P. and BCSI also entered into confirmations for the purchase
and sale of bandwidth pursuant to the Master Agreement.
Contemporaneously with BCSI's entry into the Master Agreement, BCI
executed a counterparty guaranty agreement in EBS L.P.'s favor for
$1,000,000.

On March 30, 2001, EBS Inc. and BCSI entered into a co-location
agreement for space located at 3375 Kaopaka Street in Honolulu,
Hawaii.  To fulfill its obligations under the Collocation
Agreement, EBS Inc. entered into an Internet services co-location
license agreement for co-location services with Pihana Pacific,
Inc. dated as of March 30, 2001.  Under the Pihana Lease, EBS Inc.
leased a standard cabinet for a term of 36 months.  Recently,
after entering into the Pihana Lease, Pihana merged with Equinix,
Inc.  The Collocation Agreement provided that if EBS Inc.
terminated the Collocation Agreement due to BCSI's failure to
perform under the Collocation Agreement, BCSI would be liable for
liquidated damages.  If the Collocation agreement were terminated
for another reason, BCSI would not be responsible for liquidated
damages.

Effective as of June 30, 2002, EBS L.P. terminated the Master
Agreement and the Confirmations due to a BCSI's payment default.
In this connection, EBS L.P. calculated a termination payment
equal to $1,107,053 and delivered it to BCSI.  According to Mr.
Rosen, the Termination Payment was subsequently re-calculated
downward to $669,253.  Currently, EBS Inc. owes BCSI approximately
$138,037 in connection with the Service Agreement and the Purchase
Orders.  Conversely, BCSI owes:

      (i) EBS Inc. approximately $34,168 under the Collocation
          Agreement; and

     (ii) EBS L.P. approximately $816,511 as a Termination
          Payment.

Mr. Rosen informs the Court that the EBS Debtors and BCSI have
asserted various claims against each other related to the
Agreements that are disputed due to BCSI's payment default, and,
as non-defaulting party, sent its calculation of the termination
payment shortly thereafter.

Since the Petition Date, Mr. Rosen discloses that the EBS Debtors
conducted a review of their operations and have determined, in the
exercise of their business judgment, to enter into a settlement
agreement and release with Broadwing.  Pursuant to the Settlement
Agreement and Release, the Parties will:

    (i) terminate the Service Agreement, the Purchase Orders and
        the Collocation Agreement as of November 15, 2002,

   (ii) stipulate the validity and effectiveness of EBS L.P.'s
        termination of the Master Agreement and the
        Confirmations as of June 30, 2002, and

  (iii) release BCI from the Guaranty.  In addition, and as part
        of the Settlement Agreement and Release, Broadwing will
        pay EBS L.P. approximately $350,000.

The Parties will execute global settlement and release agreements.
Additionally, EBS L.P. will assign the Pihana Lease to BCSI with a
$9,248 cure amount.

Mr. Rosen asserts that the Settlement Agreement and Release is in
the best interests of the Debtors, their estates, and creditors
since:

    (a) BCSI agreed to pay Pihana the Cure Amount upon assumption
        of the Pihana Lease;

    (b) the assignment of the Pihana Lease to BCSI will, in and of
        itself, provide the other parties to the Pihana Lease, if
        any, with adequate assurance of future performance;

    (c) the Parties will be able to resolve all issues related to
        the Agreements without any litigation and additional
        unnecessary expense;

    (d) it allows the Debtors to eliminate or avoid additional
        lease fees, operational risks, potential litigation and
        any rejection damages Broadwing could claim in connection
        with a forced rejection of the Agreements; and

    (e) it results in the final satisfaction of all the Disputed
        Claims between the Parties related to the Agreements and
        saves substantial administrative expenses, including
        attorneys' fees and preserves the assets of the Debtors'
        estates.

                           *     *     *

After due consideration, Judge Gonzalez approves the EBS Debtors'
request in its entirety. (Enron Bankruptcy News, Issue No. 69;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


FASTNET CORP: Commences Chapter 11 to Facilitate Restructuring
--------------------------------------------------------------
FASTNET Corporation (Nasdaq: FSST), a Pennsylvania corporation,
filed a voluntary petition for relief under Chapter 11 of Title 11
of the United States Code, in the United States Bankruptcy Court
for the Eastern District of Pennsylvania. The company will
continue to operate its business as a "debtor-in-possession" under
the jurisdiction of the Bankruptcy Court and in accordance with
the applicable provisions of the Bankruptcy Code. Chapter 11
allows a company to continue to operate in the ordinary course of
business to maximize the recovery to its stakeholders.

The company is a full service provider of Internet access
services. It generally maintains a network within the Boston to
Washington corridor. The company expects that its employees will
continue to receive wages and that vendors will be paid for post-
bankruptcy goods and services.

"Not only will the Chapter 11 protection allow us to operate in
the ordinary course of business and remove the pressure to sell
valuable assets of our business, but we believe it will allow us
to more quickly restructure our balance sheet, and emerge
healthier and more focused on the needs of our customers," said R.
Barry Borden, Chairman, President & CEO.


FASTNET CORPORATION: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: FASTNET Corporation
        3864 Courtney Street
        Two Courtney Place
        Suite 130
        Bethlehem, Pennsylvania 18017
        aka You Tools Corporation

Bankruptcy Case No.: 03-23143

Type of Business: Provider of Internet services

Chapter 11 Petition Date: June 10, 2003

Court: Eastern District of Pennsylvania (Reading)

Judge: Thomas M. Twardowski

Debtor's Counsel: Michael J. Barrie, Esq.
                  Schnader Harrison Segal & Lewis LLP
                  1600 Market Street, Suite 3600
                  Philadelphia, PA 19103
                  Tel: (215) 751-2529

Total Assets: $23,000,000

Total Debts: $29,000,000


FEDERAL-MOGUL: Wins Nod to Expand Ernst & Young Retention Scope
---------------------------------------------------------------
U.S. Bankruptcy Court Judge Newsome approves Federal-Mogul
Corporation and its debtor-affiliates' request to expand the
services performed by Ernst & Young in these chapter 11 cases to
include:

    -- supplemental due diligence advisory services related to the
       Debtors' consideration of the proposed acquisition
       transaction with Frictions Materials Business of Honeywell
       Corporation and other due diligence services to be used in
       the evaluation of other corporate development
       opportunities; and

    -- reporting and auditing services with respect to the
       financial statements and supplemental schedules of the
       Federal-Mogul Corporation Salaried Employees' Investment
       Program and the Federal-Mogul Corporation 401(k) Investment
       Program for the year ended December 31, 2002; and

    -- auditing and reporting services on the financial statements
       and supplemental schedules of the Federal-Mogul Corporation
       The Metal Leve, Inc. Retirement Savings Plan and Trust, the
       Federal-Mogul Corporation Bentley Harris Local 390 Union
       Employee 401(k) Plan and the AE Goetze, Inc. Wausau
       Division Hourly Employees' 401(k) Plan for the year ended
       December 31, 2002.

Ernst & Young's fees for the supplemental due diligence advisory
services will be billed based on the firm's hourly rates.  With
respect to the other additional services, the firm will bill at a
flat, fixed rate fee.

For the auditing and reporting services on the financial
statements and supplemental schedules of the Federal-Mogul
Salaried Employees' Investment Program and the Federal-Mogul
401(k) Investment Program, Ernst & Young will be paid at a
$48,000 flat, fixed fee, plus expenses.  Ernst & Young's fees for
the auditing and reporting services on the financial statements
and supplemental schedules of the Federal-Mogul Metal Leve
Retirement Savings Plan, the Federal-Mogul Bentley Harris Local
390 Union Employee 401(k) Plan and the AE Goetze Wausau Division
Hourly Employees' 401(k) Plan will be at a $26,500 flat, fixed
fee, plus expenses. (Federal-Mogul Bankruptcy News, Issue No. 38;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


FINET.COM: US Trustee to Convene Creditors' Meeting on June 24
--------------------------------------------------------------
The United States Trustee will convene a meeting of FiNet.com,
Inc.'s creditors on June 24, 2003, 11:00 a.m., at San Francisco
U.S. Trustee Office, Office of the U.S. Trustee, 250 Montgomery
Street #1010, San Francisco, California 94104.  This is the first
meeting of creditors required under 11 U.S.C. Sec. 341(a) in all
bankruptcy cases.

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

FiNet.com, Inc., a financial services holding company, filed for
chapter 11 protection on May 28, 2003 (Bankr. N.D. Calif. Case No.
03-31578). Gregory A. Rougeau, Esq., at Law Offices of Manasian
and Rougeau represents the Debtor in its restructuring efforts.
As of September 30, 2002, the Company listed $11,995,000 in total
assets and $14,363,000 in total debts.


FLEMING COS.: Taps RCS and Staubach as Real Estate Consultants
--------------------------------------------------------------
Fleming Companies, Inc., and its debtor-affiliates sought and
obtained permission from the U.S. Bankruptcy Court for the
District of Delaware to employ and retain Retail Consulting
Services, Inc. and Staubach Retail Services, Ltd., as their real
estate valuation consultants, nunc pro tunc to May 7, 2003.

The Debtors tell the Court that they want to employ Retail
Consulting and Staubach Retail because of the Firm's extensive
experience in providing real estate valuation services to clients
involved in troubled situations, both in and out of the chapter 11
context.  The Debtors submit that both Retail Consulting and
Staubach Retail are well-qualified and uniquely able to perform
the services that they will be retained in a most efficient and
timely manner.

The Debtors believe that Retail Consulting and Staubach Retail's
services are necessary to enable them to maximize the value of
their estates and to reorganize successfully.

Ivan L. Friedman, President of Retail Consulting and Ronald D.
Strongwater, Executive Vice-President of Staubach Retail assures
the Court that both firms are disinterested persons, as that
phrase is defined in the Bankruptcy Code.

In this engagement, the Debtors expect Retail Consulting and
Staubach Retail to:

     a. perform leasehold and property valuations for certain of
        the Debtors' assets, each designated as a "Valuation
        Property" or collectively as "Valuation Properties".

     b. perform and complete the property valuations
        contemplated by and by the documents and information
        provided by the Debtors; and

     c. present a valuation report or reports to the Debtors
        outlining their estimate as to the value of each of the
        Valuation Properties within 60 days after a Valuation
        Property is designated and the Consultants receive the
        required information as is in the Debtors' possession or
        under their control.

The Consultants' valuations shall be based upon an analysis of the
market, review of the lease documents and upon exercise of their
professional judgment.  The Debtors and the Consultants shall
collaborate to establish an agreement regarding the sequence and
priority of properties for valuation purposes.

The Debtors maintain that the leasehold and property valuation
consulting services provided by Retail Consulting and Staubach
Retail are necessary to maximize the value of their estates and to
reorganize successfully.  Both Retail Consulting and Staubach
Retail will use reasonable efforts to coordinate with the Debtors'
other retained professionals to avoid duplicating services
unnecessarily.

In this retention, Retail Consulting and Staubach Retail will
receive:

     a. $350 for each retail lease valuation; and

     b. for each non-retail lease valuation, a fee of between
        $900 and $1,250 per valuation.

Additionally, Retail Consulting and Staubach Retail will bill the
Debtors for reasonable expenses which are likely to include long
distance telephone charges, hand delivery and other delivery
charges, travel expenses, computerized research, transcription
costs, marketing efforts and third-party photocopying charges.

Fleming Companies, Inc., and its subsidiaries are in the business
of wholesale and retail distribution of consumable goods.  The
Company filed for chapter 11 protection on April 1, 2003 (Bankr.
Del. Case No. 03-10945).  Laura Davis Jones, Esq., at Pachulski
Stang Ziehl Young Jones & Weintraub PC represents the Debtors in
their restructuring efforts.  When the Company filed for
protection from its creditors, it listed $4,220,500,000 in total
assets and $3,547,900,000 in total debts.


FLEMING COS.: Judge Walrath Clears Save Mart Release Agreement
--------------------------------------------------------------
At Fleming Companies, Inc., and its debtor-affiliates' request,
Judge Walrath approves a letter agreement dated May 9, 2003, which
releases Save Mart Supermarkets from its partial make whole
obligation in connection with the sale of nine Richmar Foods
stores in California.

The Debtors waive their right to seek payment from Save Mart
effective May 23, 2003 in the event the stores are sold for less
than the amount that Save Mart has agreed to pay.  In one of the
side letter agreements to the sale, Save Mart agreed to share 50%
of the decreased sales price on any store.  Now, any price
difference will be borne solely by the Debtors.

Before the Petition Date, the Debtors relate that Save Mart paid
them $4,800,000 as partial consolidation for the sale of the nine
stores.  The deposit was not required and, hence, was not placed
into escrow.  Since the sale was contingent on the approval of the
Federal Trade Commission, which was not obtained at that time, the
Debtors used the funds in connection with the prepetition
operation of their businesses.

Without Court approval of the Letter Agreement, Save Mart would
have had the ability to terminate the Purchase Agreement to the
detriment of the Debtors' estates and creditors.  The Debtors
assert that Save Mart's $32,200,000 cash offer for the nine stores
plus the assumption of $13,900,000 in liabilities is by far the
most credible bid out of all parties interested in purchasing the
stores.

If they were to pursue Save Mart under the make whole provisions,
the Debtors point out that Save Mart would likely assert a number
of defenses to its obligations, including its right to set off
against the $4,800,000 that it has already paid in anticipation of
its purchase of the stores.  But more importantly, the loss of
Save Mart as a stalking horse bidder will impair the value of
other bids that the Debtors may receive for the stores.

Initially, the Debtors do not intend to proceed with the Letter
Agreement had the FTC approved the sale on May 23, 2003 and Save
Mart decided to terminate the Purchase Agreement as a result of
the FTC's decision to not approve the sale.  But to date, the FTC
continues its anti-trust review on the sale. (Fleming Bankruptcy
News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


GENTEK INC: Intends to Abandon Five Former Manufacturing Plants
---------------------------------------------------------------
As part of their ongoing restructuring efforts, GenTek Inc., and
its debtor-affiliates ask the Court for authority to
unconditionally abandon former manufacturing plants owned by
General Chemical Corporation:

   1. The Hedges Facility in Kennewick, Washington,
   2. The Chillicothe Facility in Chillicothe, Ohio,
   3. The Monroe Facility in Monroe, Louisiana,
   4. The Newell Facility in Newell, Pennsylvania, and
   5. The Kalamazoo Facility in Kalamazoo, Michigan.

Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
explains that neither the Debtors nor any other entity have
conducted any commercial activities at these properties since they
were closed.  With the exception of the Kalamazoo Facility, which
was shut down in 2003, all of the properties were closed between
1992 and 1993.  Additionally, the Debtors believe that it would
not be possible to sell the properties and the associated assets.

Although of no commercial value, Mr. Baker says, the properties
burden the estate since each is assessed property taxes and
requires other resources attendant with ownership.  The properties
do not represent an important on-going enterprise for the Debtors
and will not be useful in their reorganization effort.  The
properties also provide little to no commercial value to the
Debtors' estates.

Neil M. Ram, Ph. D., LSP, CHMM, Vice President of Roux Associates,
Inc., a national environmental consulting firm specializing in
site assessment and remediation, attests that none of the Debtors'
properties represent an imminent and identifiable harm to public
health or the environment.  Mr. Ram declares that the abandonment
would not contravene any state or federal statutes designed to
protect public health and safety from identified harms.

Mr. Ram summarizes the relevant known environmental conditions at
each facility:

A. Hedges Facility

   The only identifiable environmental issue at the Hedges
   Facility is the presence of two unlined retention ponds
   formerly used for the accumulation of non-hazardous alum
   process residue -- HiClay Alumina -- consisting of clay, sand
   and impurities.  One pond is vegetated, while the other is un-
   vegetated and contains HCA.  However, the HCA in the open pond
   is not a hazardous waste and the HCA's chemical constituents
   do not generally exceed EPA's residential risk-based
   standards.  Moreover, ground water samples collected in the
   area of the un-vegetated pond have confirmed that the ponds
   are not impacting groundwater.

B. Chillicothe Facility

   The only identifiable environmental issue at the facility is
   the presence of two closed retention ponds that the facility
   formerly used for the accumulation of HCA.  Moreover, the
   facility closed the two settling ponds with Ohio Environmental
   Protection Agency's approval in 1997.  Following the closure,
   the facility has conducted three annual sampling events and
   notified the Ohio EPA of the results.  Since approving the
   closure and receiving the sampling results, Ohio EPA has not
   notified the Debtors of any additional environmental issues or
   requirements at the facility.

C. Monroe Facility

   The only identifiable environmental issues at the site are two
   unlined retention ponds.  One pond is empty and re-vegetated
   and the other contains HCA with minimal vegetation.  The HCA
   in the pond does not exceed EPA's residential risk-based
   standards.  Surface water pH samples collected from the river
   adjacent to the facility and Dr. Ram's visual inspection of
   the ponds confirmed that the ponds are not impacting the
   river.  While groundwater samples collected from site
   monitoring wells exceeded certain secondary federal drinking
   water regulatory guidelines, these exceedances do not trigger
   any cleanup requirements or constitute violations of any
   regulatory requirements.

D. Newell Facility

   The only identifiable environmental issues at the site are two
   retention ponds.  The ponds were closed pursuant to a State-
   approved closure plan in 1982.  Neither the State nor the EPA
   has required any groundwater monitoring or soil cleanup at the
   facility or taken any further action in the 10 years since the
   facility's closure.

E. Kalamazoo Facility

   The Kalamazoo Facility's three retention ponds are the only
   identifiable environmental condition.  Two ponds are empty and
   vegetated.  The third lined pond formerly was used for HCA
   waste, but at the time of closure was used for the collection
   of storm water runoff.  Dr. Ram concluded that the storm water
   remaining in the pond did not constitute a violation of any
   environmental law, and even if contaminated with residual HCA
   in the pond's sediments, did not present an immediate, certain
   human health or environmental harm.

                            Objections

(1) Honeywell International Inc.

Honeywell International, Inc. contends that abandonment of the
contaminated properties should not be authorized, at least at this
time.  Honeywell relates that it has a special interest in the
matter because of the Debtors' obligation to indemnify and hold it
harmless from any and all claims, liabilities and losses arising
from environmental contamination, hazards and risks present at the
contaminated properties under their agreements.

Aaron A. Garber, Esq., at Pepper Hamilton LLP, in Wilmington,
Delaware, explains that the abandonment of the contaminated
properties is premature.  Mr. Garber tells the Court that Neil M.
Ram, the Debtors' environmental consultant, was afforded three
months to form an opinion on the existence and level of
environmental hazards present at the properties.  Mr. Garber
points out that the abandonment of the Contaminated Properties
without affording Honeywell a reasonable period of time to conduct
its own investigation, due diligence and analysis would constitute
a denial of due process.  Honeywell wants at least 90 more days to
take discovery.

Mr. Garber further argues that the Court has no authority to
release or discharge the Debtors from liability for any claims
that may arise subsequent to the abandonment of the properties or
subsequent to the confirmation of a reorganization plan.  The
Debtors' continued ownership or possession of the Contaminated
Properties after abandonment or after confirmation of a
reorganization plan would expose them to new, post-abandonment or
post-confirmation environmental claims and liabilities.

(2) Environmental Protection Agency

The United States, on the EPA's behalf, asks Judge Walrath to deny
the Debtors' request to the extent that it seeks an order
providing that General Chemical Corporation -- and not its estate
-- will have no further interest in the properties.  Donald G.
Frankel, Trial Attorney for the Environmental Enforcement Section
of the U.S. Department of Justice Environment & Natural Resources
Division, in Newton, Maryland, contends that this aspect of the
relief sought by the Debtors is not authorized by Section 554(a)
of the Bankruptcy Code and is contrary to case law under Sections
554(a) and 554(b).

Bankruptcy Code Section 554(a) provides that "[a]fter notice and a
hearing, the trustee may abandon any property of the estate that
is burdensome to the estate or that is of inconsequential value
and benefit to the estate."  Mr. Frankel points out that Section
554(a) only allows for abandonment of property by the estate.  But
in this case, the Debtors' request also calls for the abandonment
of the Properties by General Chemical itself.  Mr. Frankel also
notes that the Debtors' attempt to sever General Chemical's
interest in the properties is directly contrary to the cases that
have been decided under Sections 554(a) and 554(b), which have
held that the property abandoned by an estate vests back in the
debtor itself or in the person with the superior possessory
interest in the property at the Petition Date, which in most cases
is the debtor.

Although the Debtors seek an order stating that General Chemical
itself will have no further interest in the properties after
abandonment, they did not cite any authority to support the
proposition.  The proposed abandonment is also silent with respect
to the issue of who will obtain an interest in the properties
after the abandonment.

To the extent that the Court allows the Debtors to abandon the
properties, the EPA suggests that the ownership in the properties
vests back in General Chemical itself.

(3) State of Washington

Zachary Mosner, Esq., at Assistant Attorneys General, Bankruptcy
and Collections Unit, Seattle, Washington, informs the Court that
the Hedges Facility in Kennewick, Washington has been the site of
past commercial activity involving the use of underground storage
tanks containing leaded gasoline, and the use of unlined retention
ponds for residue from the manufacture of aluminum sulfate.

To the extent that the Debtors want to divest themselves as
debtors from any further "right, interest, or title" in the
property, the State asks the Court to deny the Debtors' request.
Mr. Mosner contends that it would be improper for the Court to
enter an order divesting the Debtors as debtors of all interest in
the Hedges Facility.  The Bankruptcy Code provides that "any
property of the estate that is burdensome to the estate or that is
of inconsequential value and benefit to the estate" may be
abandoned.  An order of abandonment therefore removes property
from the estate in a bankruptcy proceeding, but does not divest
the debtor's rights, interest, or title.  Mr. Mosner asserts that
the Debtors cannot use the "abandonment" process to determine or
resolve the issue of who has title or interest in the Hedges
Facility.

(4) Louisiana Department of Environmental Quality

The Environmental Department complains that it currently has
insufficient information, in the form of laboratory data and
analysis to determine if the Monroe site is sufficiently clean to
protect human health and the environment.  Perry Theriot, Esq., at
the LDEQ Legal Affairs Division, in Baton Rouge, Louisiana, argues
that the Debtors have not made arrangements for the legally
required closure of the impoundment.  The Debtors must comply with
state and local laws protecting the environment, Mr. Theriot says.

The Environmental Department insists that any Court order
approving the Debtors' request must:

   -- provide for the complete closure of the impoundment,
      including the proper plugging and abandonment of the wells
      on the site;

   -- provide for the continuing monitoring for any contaminates;
      and

   -- provide to the State of Louisiana the time and information
      necessary to insure that public interests are addressed.

Absent additional information in the form of data or sample
analysis, the Department considers the site as a potential threat
to the environment.

(5) The Ohio Environmental Protection Agency

Based on a preliminary investigation of the Chillicothe Facility
conducted around 1990, the Ohio EPA has reason to believe that
there is contamination at the Facility that still needs
remediation.  The Ohio EPA is currently reviewing its files to
determine the extent of this contamination and the need for
further remediation at the Facility by Debtors.  Until the
investigation is complete, the Ohio EPA objects to any abandonment
of the Chillicothe Facility. (GenTek Bankruptcy News, Issue No.
14; Bankruptcy Creditors' Service, Inc., 609/392-0900)


GERDAU AMERISTEEL: Moody's Assigns Low-B Ratings on Weak Market
---------------------------------------------------------------
Moody's Investors Service assigned several ratings to Gerdau
Ameristeel Corporation. Rating outlook is stable.

                     Assigned Ratings

     * B2 - Proposed $400 million Guaranteed Senior Unsecured
            Notes due 2011

     * B1 - Senior Implied rating

     * B3 - Senior Unsecured Issuer Rating.

The low-B ratings reflect the competitive nature of the steel
industry and weak product demands. The ratings also mirror the
company's high debt leverage.

Gerdau Ameristeel Corporation produces rebar, merchant bar,
structural shapes, and flat-rolled sheet at 11 North American
minimills, and conducts downstream steel fabricating operations at
26 facilities. The company's base is in Tampa, Florida.


INTEGRATED HEALTH: Asks Court to Further Extend Removal Period
--------------------------------------------------------------
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor LLP, in
Wilmington, Delaware, relates that Integrated Health Services,
Inc., and its debtor-affiliates believe that they may be party to
actions currently pending in the courts of various states and
federal districts.  However, due to the size, complexity and pace
of these cases, the Debtors have not had a full opportunity to
investigate their involvement in the Prepetition Actions.  The
attention of the Debtors' personnel and management has been
focused primarily on administering the bankruptcy proceeding and
confirming the IHS Plan that will take the Debtors through
reorganization.  Indeed, much of the Debtors' recent attention has
been focused on consummating the confirmed IHS Plan.  Thus, the
Debtors and their professionals have not had sufficient time to
fully review all of the Prepetition Actions to determine if any
should be removed pursuant to Rule 9027(a) of the Federal Rules of
Bankruptcy Procedure.

By this motion, the Debtors ask the Court to extending the period
within which they may file notices of removal in the bankruptcy
court with respect to prepetition civil actions through and
including August 4, 2003.

The requested extension will give the Debtors an opportunity to
make more fully informed decisions concerning the removal of each
Prepetition Action and will assure that the Debtors do not forfeit
the valuable rights afforded to them.  Further, the rights of the
Debtors' adversaries will not be prejudiced by the extension, as
any party to a Prepetition Action that is removed may, seek to
have it remanded to the state court pursuant to 28 U.S.C. Section
1452(b).

A hearing on the Debtors' request is scheduled on July 21, 2003.
By application of Del.Bankr.LR 9006-2, the removal period is
automatically extended through the conclusion of that hearing.
(Integrated Health Bankruptcy News, Issue No. 59; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


IT GROUP: Judge Walrath Clears Kaiser Transaction Settlement
------------------------------------------------------------
At The IT Group, Inc., and its debtor-affiliates' behest, Judge
Walrath approved a settlement agreement and release among:

   (a) the LandBank Debtor Parties: The IT Group, IT
       Corporation, LandBank, Inc.;

   (b) the LandBank Non-Debtor Parties: Hooper Knowlton, III,
       Stuart Miner and William Lynott; and

   (c) the Tamkin Parties: Jeffrey H. Tamkin, Tamkin Investments,
       Inc. Tamkin Capital Partners, and Tamkin Development
       Corporation.

LandBank Inc. and Hooper Knowlton filed a complaint in May 2000
against the Tamkin Parties before the Superior Court of the State
of California, County of San Bernardino.  LandBank and Mr.
Knowlton sought a declaratory judgment that the Tamkin Parties
have no interest in a real property owned by Kaiser Ventures Inc.
LandBank and Mr. Knowlton sought recovery exceeding $1,000,000 in
the litigation.

In February 1999, LandBank and Tamkin Investments, Inc., doing
business as Tamkin Capital Partners, signed a confidentiality
agreement whereby Tamkin agreed to supply information to LandBank
about an opportunity to purchase the Kaiser Property in San
Bernardino County.  Tamkin had represented that it had certain
exclusive rights to purchase the Property for a prescribed period
of time.

Pursuant to the Confidentiality Agreement, LandBank agreed to
refrain from:

   (a) disclosing to others the information about the Kaiser
       opportunity; and

   (b) entering into any agreement with Kaiser for two years
       without Tamkin's consent.

After execution of the Confidentiality Agreement, LandBank
arranged to have Mr. Knowlton, a potential joint venturer, contact
Tamkin so that Mr. Knowlton could sign the Agreement and work with
LandBank to evaluate the proposed Kaiser transaction.
Mr. Knowlton signed the Confidentiality Agreement in March 1999.

After investigating the proposed Kaiser transaction, LandBank and
Mr. Knowlton concluded that Tamkin had no right to participate in
the Kaiser transaction.  In late 1999, a joint venture called
Ontario Ventures I, consisting of Mr. Knowlton and LandBank's
subsidiary, LandBank Environmental Property LLC, entered into a
contract with Kaiser Ventures to purchase the Kaiser Property.
After learning of Ontario Ventures' contract with Kaiser Ventures,
Tamkin asserted that it would take action to impose a constructive
trust over the Kaiser Property if it were acquired without
Tamkin's involvement.  Because this claim threatened to prevent
closure of the planned purchase, LandBank and Mr. Knowlton
commenced the California Litigation.

In June 2000, LandBank and Mr. Knowlton filed an amended complaint
against the Tamkin Parties for slander of title and other torts,
as well as rescission and declaratory relief, arising out of
Tamkin's interference with the Kaiser transaction.  In August
2000, the Tamkin Parties filed a cross-complaint against LandBank
and Mr. Knowlton.  The cross-complaint sought damages for breach
of contract, unjust enrichment, breaches of confidence and
fiduciary duty and tortious interference with prospective business
advantage.  The Tamkin Parties sought $30,000,000 in damages
allegedly stemming from violation of the Confidentiality Agreement
and the usurpation of Tamkin's opportunity to purchase the Kaiser
Property.

The IT Group and IT Corporation were later named in 2001 as
additional cross-defendants in the cross-action the Tamkin
Parties filed against LandBank and Mr. Knowlton.  They purportedly
have aided and conspired with LandBank and Mr. Knowlton in their
violation of the Confidentiality Agreement.  In January 2002, the
Tamkin Parties amended the cross-complaint to add LandBank
officers William Lynott and Stuart Miner as cross-defendants.

In view of the Debtors' restructuring, on February 4, 2002, the
California State Court judge handling the California Litigation
stayed the proceedings.  However, the stay excluded the Tamkin
Parties' efforts to serve additional non-bankrupt parties.  At the
time of the stay, the deadline to file dispositive motions had not
expired and substantial discovery remained.

In light of the costs, risks and delays associated with the
California Litigation, and after highly intensive negotiations,
the LandBank Parties and the Tamkin Parties have agreed to a
settlement agreement.  In summary, the terms of the settlement
agreement are:

   (a) The LandBank Non-Debtor Parties will pay the Tamkin
       Parties $30,000;

   (b) The parties will file an executed Request for Dismissal
       form seeking the dismissal, with prejudice, of the entire
       California Litigation;

   (c) The LandBank Parties release and discharges the Tamkin
       Parties for, among other things, claims, which were or
       could have been asserted in the California Litigation
       provided that the LandBank Debtor parties preserve their
       right to assert or prosecute any action for preferences or
       fraudulent conveyances or other avoidance power claims
       under Chapter 5 of the Bankruptcy Code; and

   (d) The Tamkin Parties release and discharge the LandBank
       Parties for claims, which were or could have been asserted
       in the California Litigation, including all proofs of
       claim filed against the LandBank Debtor Parties. (IT Group
       Bankruptcy News, Issue No. 29; Bankruptcy Creditors'
       Service, Inc., 609/392-0900)


JAZZ PHOTO: Budd Larner Serving as Special Litigation Counsel
-------------------------------------------------------------
Jazz Photo Corp., wants authority from the U.S. Bankruptcy Court
for the District of New Jersey to employ Budd, Larner, Rosenbaum,
Greenberg & Sade, PC as Special Litigation Counsel.

The Debtor tells the Court that it wishes to retain Budd Larner as
its special litigation counsel in this matter to:

     a) represent the Debtor in connection with any post-trial
        motions and an appeal in connection with a patent
        infringement case recently concluded in the United
        States District Court for the District of New Jersey,
        bearing the caption Fuji Photo Film Co. Ltd. v. Jazz
        Photo (Hong Kong) Ltd., Inc., Jazz Photo Hong Kong Ltd
        and Jack Benun.

        Prior to the filing date, Budd Larner was retained by
        the Debtor to take over the representation of its
        interests in the Fuji Case. The Debtor has selected Budd
        Larner to assume the representation of its interests in
        that matter because Budd Larner has substantial
        experience in post-trial motions and appellate practice.
        The Debtor believes that, with the assistance of Budd
        Larner, the judgment emanating from the Fuji Case will
        be modified and a large claim against the estate may be
        substantially reduced; and

     b) continue to represent the Debtor, as plaintiff, in
        connection with breach of warranty, breach of express
        and implied warranty and fraud case, as a result of the
        sale and shipment of defective film to the Debtor,
        pending in the United States District Court for the
        District of New Jersey against Imation Corp. and certain
        affiliated entities, bearing the caption Jazz Photo
        Corp. v. Imation Corp. and Imation S.P.A., Docket No.
        99-2505.

        Budd, Larner has been representing the Debtor in
        connection with the Imation Case and is intimately
        familiar with the respective claims of the parties. The
        Debtor, which is a co-plaintiff in the Imation Case with
        its subsidiary Jazz Photo (Hong Kong), Ltd. is seeking
        damages of in excess of $85 million before trebling and
        pre-judgment interest, which constitutes a substantial
        asset of the bankruptcy estate. The Debtor tells the
        Court that it would experience great delay and prejudice
        if Budd Larner does not continue representing the Debtor
        in the Imation Case.

The Debtor submits that the services of Budd Larner are necessary
and essential to the Debtor's performance of its duties as a
debtor-in-possession.

Budd Larner assures the Court that it is maintaining separate
billing records for the service it is rendering to the Debtor and
will not seek compensation from the Debtor's estate for services
it rendered to or will render to Jazz HK and Benun in this matter;
as well as in the case of Budd Larner's representation in the
Imation Case.

Peter J. Frazza, Esq., discloses that In connection with the
Imation Case, the Debtor shall pay Budd Larner $25,000 per week.
Additionally, Budd Larner is also entitled to a 10 % contingency
payment on the proceeds of any settlement or judgment in the
Imation Case, not to exceed $1.7 million.

Jazz Photo Corp., is engaged in the design, development,
importation and wholesale distribution of cameras and other
photographic products in North America, Europe and Asia.  The
Company filed for chapter 11 protection on May 20, 2003 (Bankr.
N.J. Case No. 03-26565).  Michael D. Sirota, Esq., and Warren A.
Usatine, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A.,
represent the Debtor in its restructuring efforts.  When the
Company filed for protection from its creditors, it listed
estimated debts and assets of over $10 million.


KEMPER INSURANCE: AM Best Drops Financial Strength Ratings to D
---------------------------------------------------------------
A.M. Best Co., downgraded the financial strength ratings to D
(Poor) from C++ (Marginal) of the participants in the Kemper
Insurance Companies' (Long Grove, IL) inter-company pool, eight
reinsured affiliates and one domestic affiliate.

The downgrading of the Kemper Insurance Companies' rating follows
the announcement that upon completion of the year-end 2002
independent financial audit, Lumbermens Mutual Casualty Company,
the lead company of the inter-company pool, expects its year-end
2002 statutory surplus -- as reflected in its annual statement --
to be substantially lower than currently stated. The reduction is
a result of events related to the decision to enter into voluntary
run-off and terminate the surplus notes tender offer in 2003,
which were evaluated after completing the year-end 2002 statutory
statement. The adjustments in policyholders' surplus are primarily
attributable to the inadmissibility of deferred tax assets,
impairment of certain equity securities, real estate and goodwill
and an accrual for deferred revenue in Lumbermens Mutual Casualty
Company's service operations.

Although the total amount of these adjustments has not been
disclosed, management has indicated that if the adjustments had
been reflected in its year-end 2002 statutory filing of Lumbermens
Mutual Casualty Company, total risk-adjusted capital would fall
within the Mandatory Control Level of the risk-based capital
calculation required by the Illinois Department of Insurance.

Also, A.M. Best has downgraded the financial strength ratings to
C++ (Marginal) from B (Fair) of the Eagle Insurance Group
(Washington) due to the weakened capitalization of its ultimate
parent, Lumbermens Mutual Casualty Company, and uncertainty of
actions to be taken by the Illinois Department of Insurance. Eagle
maintains an above average dependence on reinsurance recoverables
from Lumbermens Mutual Casualty Company. The rating of Eagle
Insurance remains under review with negative implications, pending
successful and timely conclusion of capital enhancement efforts,
including the sale of the Eagle Group and collateralization of
recoverables from Lumbermens Mutual Casualty Company. While a
definitive sale agreement currently does not exist, these factors
combined would allow A.M. Best to consider a Secure rating of the
Eagle Group.

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


KMART: Reorganized Debtor's Shares Begin Trading on Nasdaq NM
-------------------------------------------------------------
Kmart Holding Corporation (Nasdaq: KMRT) announced that the NASDAQ
Stock Market, Inc., has approved the quotation of the Company's
common stock on the NASDAQ National Market System. The common
stock will begin trading today on the NASDAQ National Market under
the symbol KMRT. The common stock had previously traded on the OTC
Bulletin Board.

Julian C. Day, President and Chief Executive Officer of Kmart
said, "We are pleased that the new common stock of Kmart Holding
Corporation has met the listing requirements for the NASDAQ
National Market System. This listing is another important
milestone in Kmart's recovery. Among other benefits, listing on
the NASDAQ National Market System should enhance the trading
liquidity of the new common stock and expand the number of
investment management funds eligible to purchase the stock."

Kmart is a mass merchandising company that serves America through
Kmart and Kmart SuperCenter retail outlets.


KMART CORP: Takes Action to Challenge $1.3BB Multi-Debtor Claims
----------------------------------------------------------------
Several creditors filed Proofs of Claim against numerous Kmart
Debtor entities in these cases despite having only one claim
against one Debtor entity.  The Debtors have determined that, in
most instances, the claim is properly against Kmart Corporation.

Since the creditors are not entitled to multiple recoveries for a
single liability, the Debtors ask the Court to disallow the
Multi-Debtor Claims filed against any other Debtor entity other
than Kmart Corporation.

The Debtors have identified 118 Multi-Debtor Claims, which consist
of:

             Secured                   $62,004,592
             Administrative                 22,095
             Priority                    8,513,235
             Unsecured               1,213,025,613
                                   ---------------
                Total               $1,283,565,535
(Kmart Bankruptcy News, Issue No. 57; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


KMART CORP: Market Says Bankruptcy Plan Undervalued New Equity
--------------------------------------------------------------
The New Common Stock in Kmart Holding Corporation (Nasdaq: KMRT)
started trading on the NASDAQ Stock Market, Inc. Tuesday and
inched toward $20 per share.  With 90 million new shares
outstanding, that puts a $1.8 billion market cap on the company.
That $1.8 billion market cap is:

    -- more than double the low estimate;

    -- 55% higher than the mid-range estimate; and

    -- 17% higher than the most optimistic valuation;

buried in Kmart's Chapter 11 disclosure documents.

Miller Buckfire Lewis & Co., LLC and Dresdner Kleinwort
Wasserstein, Inc., Kmart's financial advisors during the chapter
11 restructuring process, provided expert testimony to Judge
Sonderby at the Confirmation Hearing that the reorganization value
of Reorganized Kmart ranges from $2.25 to $3.0 billion.  Deducting
the total amount of long-term net debt that Reorganized Kmart is
obligated to repay, that put a $789 million to $1.539 billion
value on the New Equity in Reorganized Kmart.

Miller Buckfire and Dresdner based their valuation on a variety of
projections provided by Kmart's Management:

   Annual Store Count            Annual Net Sales
   ------------------            ----------------
   2002   1,832  +++++++++++++++ 2002 $30,808  ++++++++++++++
   2003   1,513  ++++++          2003 $25,427  +++++++
   2004   1,523  ++++++          2004 $25,614  +++++++
   2005   1,533  ++++++          2005 $26,981  +++++++++
   2006   1,553  +++++++         2006 $28,478  +++++++++++
   2007   1,583  ++++++++        2007 $30,170  +++++++++++++

   Percentage Increase in Sales  Same Store Sales Increases
   ----------------------------  --------------------------
   2003      --  .               2003     1.1% ++
   2004     0.7% +               2004     3.8% ++++++
   2005     5.3% +++++++++++     2005     4.5% ++++++++
   2006     5.5% +++++++++++     2006     4.3% +++++++
   2007     5.9% ++++++++++++    2007     4.0% +++++++

   Gross Margin                  Inventory Turns
   ------------                  ---------------
   2002    18.0% +               2002     4.0  ++++++++
   2003    19.8% +++++           2003     4.2  ++++++++
   2004    20.3% ++++++          2004     4.4  ++++++++
   2005    21.0% ++++++++        2005     4.6  +++++++++
   2006    21.3% ++++++++        2006     4.8  +++++++++
   2007    21.5% +++++++++       2007     5.0  ++++++++++

   SG&A Expense                  Interest Expense
   ------------                  ----------------
   2002  $6,264  +++++++++++++   2002    $147  ++++++++++++
   2003  $5,121  ++++++          2003    $127  +++++++++
   2004  $4,814  ++++            2004     $86  ++++
   2005  $5,066  ++++++          2005     $73  ++
   2006  $5,258  +++++++         2006     $61  +
   2007  $5,409  ++++++++        2007     $51  .

   Net Earnings Projections      EBITDA Projections
   ------------------------      ------------------
   2002 ($3,264) .               2002    ($32) .
   2003   ($286) .               2003     $75  .
   2004    $181  ++++            2004    $424  +++++
   2005    $332  +++++++         2005    $700  ++++++++
   2006    $465  ++++++++++      2006    $955  +++++++++++
   2007    $644  +++++++++++++++ 2007  $1,284  ++++++++++++++++

As the company wound its way out of the Chapter 11 process,
management explained that net sales will start to climb as 70 new
stores are opened between 2003 and 2007.  Same-store sales will
increase because of improvements in operational execution,
increased promotional productivity and improved product flow.
Improved product flow and allocation, SKU rationalization and
[unspecified] store closures will cause inventory turns to
increase.  The 25% increase in inventory turns from 2002 to 2007
is, Kmart says, a result of right-size purchasing and flow path
optimization.

Gross margin improvements, Kmart says, will come from improved
promotional productivity, favorable product mix and markon
improvement due to increased import purchases.  Additionally,
recently implemented inventory control and loss prevention
programs will help control shrinkage.  Additionally,
reclassifications of credits previously defined as co-op
advertising recoveries to a reduction in cost of sales will
result in improved gross margins.

Selling, general and administrative expenses will be lower
because the Fresh Start Accounting asset value write-downs will
reduce depreciation expenses.  SG&A costs will be further reduced
through improved operating procedures and productivity at the
stores and cost control initiatives at Kmart Headquarters.

Julian C. Day, President and Chief Executive Officer of Kmart
said, "We are pleased that the new common stock of Kmart Holding
Corporation has met the listing requirements for the NASDAQ
National Market System.  This listing is another important
milestone in Kmart's recovery.  Among other benefits, listing on
the NASDAQ National Market System should enhance the trading
liquidity of the new common stock and expand the number of
investment management funds eligible to purchase the stock."


L-3 COMMS: Acquiring Bombardier Military Aviation Services Unit
---------------------------------------------------------------
L-3 Communications (NYSE: LLL) entered into an agreement to
acquire the Military Aviation Services business of Bombardier,
Inc. (TSX: BBD.A, BBD.B) for approximately US$90 million. Military
Aviation Services' annual sales are approximately US$80 million.
The acquisition is expected to close in the third quarter of 2003,
and will be slightly accretive to the company's earnings.

Headquartered in Mirabel, Quebec, Canada and with facilities in
Bridgeport, WV, Military Aviation Services is a leader in systems
engineering support and avionics modernization. Military Aviation
Services business provides a full range of technical services in
the areas of aircraft maintenance, repair and upgrade for military
aircraft, and the refurbishment and modernization of selected
commercial aircraft. The businesses' client base includes Canadian
Armed Forces, the United States Department of Defense, prime
contractors and OEM's and international military organizations.

"Military Aviation Services expands L-3's work in aircraft
modernization and gives us access to new platforms like the
Maritime Helicopter Program, which has been approved by the
Canadian Ministry of Defense. The acquisition also opens up more
international opportunities, and provides us with new lower-cost
facilities and new capabilities that will enhance our position in
the global market," said Frank C. Lanza, chairman and chief
executive officer of L-3 Communications. "With this acquisition,
L-3 will be one of the leading providers of aircraft modernization
in the industry."

"This acquisition is also very synergistic with our Integrated
Systems and Spar Aerospace businesses. With our unsurpassed
engineering talent combined with a very competitive cost structure
at Spar and Military Aviation Services, we can provide the most
technically advanced solutions at a very competitive cost and that
will benefit customers domestically as well as internationally."

"Military Aviation Services has a major presence in the Canadian
defense markets, having total systems engineering and support
responsibility for the CF-18 fighter aircraft," continued Mr.
Lanza. Mr. Lanza also noted that Military Aviation Services
participates in programs such as the Australian F-18, Joint Strike
Fighter and the Bell Griffon helicopter. Military Aviation
Services provides extensive engineering and logistical support for
the Canadian Department of National Defence and life-cycle
contractor support for the U.S. Army National Guard's fleet of
Sherpa C-23 aircraft. As a major sub-contractor, it provides
maintenance planning, supply management and quality assurance to
forty-three Sherpa aircraft at 19 bases in the United States and
Puerto Rico.

"The aircraft modernization market will continue to be very strong
and will grow both domestically and internationally," said Mr.
Lanza. "The conflicts in Afghanistan and Iraq have demonstrated
how existing U.S. platforms, when upgraded with new defense
electronics, precision weapons and capabilities, can perform in
transformational ways and be very effective. The success of these
modernized assets has not been lost on the DoD and nations looking
to achieve state-of-the-art capabilities at a reasonable cost
without having to purchase new platforms."

Mr. Lanza also noted that L-3 has further strengthened its
relationship as a key supplier of aviation products to Bombardier.
Military Aviation Services will remain a subcontractor to
Bombardier for modifications of its business jet business, and L-3
will be in a good position to supply its commercial aviation
products as part of its offerings to Bombardier.

Headquartered in New York City, L-3 Communications is a leading
merchant supplier of Intelligence, Surveillance and Reconnaissance
(ISR) systems and products, secure communications systems and
products, avionics and ocean products, training devices and
services, microwave components and telemetry, instrumentation,
space and navigation products. Its customers include the
Department of Defense, Department of Homeland Security, selected
U.S. Government intelligence agencies, aerospace prime contractors
and commercial telecommunications and wireless customers.

To learn more about L-3 Communications, visit the company's Web
site at http://www.L-3Com.com

                        *   *  *

As reported in Troubled Company Reporter's May 16, 2003 edition,
Standard & Poor's Ratings Services assigned its 'BB-' rating to
L-3 Communication Corp.'s proposed $300 million senior
subordinated notes due 2013. The notes are to be sold under SEC
rule 144A with registration rights. The net proceeds from the
notes will be used to redeem the firm's outstanding $180 million
8.5% senior subordinated notes due 2008 and for general corporate
purposes. At the same time, Standard & Poor's affirmed its 'BB+'
corporate credit rating on L-3. The outlook is stable.

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


LUBY'S INC: Sets 3rd Quarter Earnings Conference Call for Tues.
---------------------------------------------------------------
Luby's, Inc. (NYSE: LUB) will hold its quarterly conference call
with financial analysts to discuss third quarter 2003 results on
Tuesday, June 17, at 1:30 p.m. (Central Time). The Company will
release results for the third quarter and fiscal year-to-date
ended May 7, 2003, after the market closes on June 16.

Interested investors are invited to listen to the call by dialing
877-601-3552; the required pass code is Luby's.  Please call ten
minutes prior to the beginning of the call to ensure that you are
connected before the start of the presentation.  A replay of the
call will be available following the call through June 26, 2003.
The replay number is 402-220-9797; a pass code is not required.

Luby's provides its customers with delicious, home-style food,
value pricing, and outstanding customer service at its restaurants
in Dallas, Houston, San Antonio, the Rio Grande Valley, and other
locations throughout Texas and other states.  For more information
about Luby's, visit the Company's Web site at http://www.lubys.com

As reported in Troubled Company Reporter's May 27, 2003 edition,
Luby's (NYSE: LUB) said it had been notified by its subordinated
note holders, Chris and Harris Pappas, that as a result of the
ongoing default under the Company's senior indebtedness (bank
debt), the Company's subordinated debt held by the Pappases is
also in default. The bank debt default also has triggered an
automatic suspension of interest payments on the subordinated
debt.


LUMBERMENS MUTUAL: S&P Drops Surplus Notes' Ratings to D from C
---------------------------------------------------------------
Standard & Poor's Ratings Services it revised its ratings on
Lumbermens Mutual Casualty Co.'s $100 million 8.45% surplus notes
due Dec. 1, 2097, and the $200 million 8.3% surplus notes due
Dec. 1, 2037, to 'D' from 'C' and removed the ratings from
CreditWatch where they were placed on Feb. 18, 2003.

"This action follows the expected nonpayment of interest on these
notes," said Standard & Poor's credit analyst John Iten.

On March 25, 2003, the company disclosed that the Illinois
Insurance Department had denied its request to make further
interest payments on these notes. On March 26, 2003, Standard &
Poor's lowered its ratings on Lumbermens surplus notes to 'C' from
'CCC' and stated then that the ratings on these notes would be
revised to 'D' as the interest due dates were reached. The $400
million 9.15% notes due 2026 will be revised to 'D' following the
expected nonpayment of interest on July 1, 2003.


MED-EMERG INT'L: Names William Danis as Chief Financial Officer
---------------------------------------------------------------
Med-Emerg International Inc., (NASDAQ: MDER-MDERW) Ramesh
Zacharias CEO of Med-Emerg International Inc., has appointed
William Danis as Chief Financial Officer of the Company, replacing
John Jarman who has resigned to pursue another opportunity.

Prior to joining Med-Emerg, Mr. Danis was a founding partner of
Greybrook Corporation, a Toronto-based private equity investment
company. Previously he was Vice President, Investments, at Working
Ventures Canadian Fund where he built a very profitable investment
portfolio. Bill's expertise also includes the successful
turnaround of a $20 million subsidiary of a Canadian public
company. A Chartered Accountant, Mr. Danis has held board
positions with both public and private companies and has
experience in public offerings with companies traded on NASDAQ and
TSX.

Dr. Zacharias stated "we are pleased to have Bill joining us at
this juncture of our Company's growth. Bill's experience in
financing high growth companies will serve the Company well and
allow us to continue on our path to increased revenues and
profitability."

MEII has built a pre-eminent clinic network across Canada with
more than 750,000 patient lives and 20 clinics under management.
MEII specializes in the coordination and delivery of emergency and
primary health care related services in Canada. These services
include physician and nurse staffing and recruitment, clinical
management services, the development and management of urgent care
centers, and a comprehensive physician practice management
program. Med-Emerg currently holds the contract to provide all
contract healthcare support services to the Canadian Forces for
members in-garrison in Canada.

At Dec. 31, 2002, Med-Emerg's balance sheet discloses a total
shareholders' equity deficit of about $1.7 million.


MESA AIR GROUP: Issuing $75 Mill. of Convertible Notes due 2023
---------------------------------------------------------------
Mesa Air Group, Inc. (Nasdaq: MESA), intends to sell, subject to
market and other conditions, $75 million issue price of onvertible
Notes due 2023, to qualified institutional buyers pursuant to Rule
144A under the Securities Act of 1933.  The interest rate,
conversion rights (including the terms upon which the notes will
be convertible into Mesa Air Group common stock) and offering
price are to be determined by negotiations between Mesa Air Group
and the initial purchasers of the notes.  Mesa Air Group plans to
use the net proceeds from the offering for general corporate
purposes and to fund obligations with respect to future regional
jet deliveries.

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

Mesa currently operates 131 aircraft with 980 daily system
departures to 153 cities, 37 states, the Bahamas, Canada and
Mexico.  It operates in the West and Midwest as America West
Express, the Midwest and East as US Airways Express, in Denver as
Frontier JetExpress, in Kansas City with Midwest Express Airlines
and in New Mexico as Mesa Airlines.  The Company, which was
founded in New Mexico in 1982, has approximately 3,300 employees.
Mesa is a member of Regional Aviation Partners.


MORGAN STANLEY: Fitch Cuts 1997-HF1 Class J Rating to Junk Level
----------------------------------------------------------------
Morgan Stanley Capital I Inc.'s series 1997-HF1 commercial
mortgage pass-through certificates $7.7 million class J is
downgraded to 'CCC' from 'B-' and has been removed from Rating
Watch Negative by Fitch Ratings. In addition, Fitch affirms the
$184.4 million class A2, $55.7 million class B, and interest-only
class X certificates at 'AAA'. Fitch also affirms the following
classes: $34 million class C at 'AA-', $27.8 million class D at
'A-', $9.3 million class E at 'BBB+', $41.7 million class F at
'BB+', $4.6 million class G at 'BB-' and $10.8 million class H at
'B'. Class A1 has paid off and Fitch does not rate the $4 million
class K. The rating actions follow Fitch's annual review of the
transaction, which closed in June 1997.

The downgrade is attributed to the combination of a $2.2 million
loss realized on May 15, 2003, and an increase in loans of concern
totaling 13% of the pool. Two of these loans, representing 1.6% of
the pool are being specially serviced. One of these loans, the
Horizons End RV Resort loan which represents 0.3% of the pool,
could result in a loss to the trust. The loan is secured by a 281
pad mobile home park located in Davenport, FL. The special
servicer is pursuing foreclosure. Fitch also has concerns with
eight loans, representing 11.4% of the pool, on the master
servicer's watchlist. The largest of these loans, the Merchants
Exchange Building, which represents 4.3% of the pool, is secured
by a 211,640 square foot office building in San Francisco, CA. The
property was only 58.8% occupied as of year-end 2002. The borrower
is in negotiations with potential tenants to occupy the vacant
space. In addition, Fitch has concerns with the high property type
concentrations of self storage (22.1%) and manufactured housing
communities (22%).

The deal benefits from significant paydown since issuance. As of
the May 2003 distribution date, the pool's aggregate balance has
been reduced by 38.4% to $380 million from $618.4 million at
issuance. This paydown resulted in adequate subordination levels
to the higher classes to warrant the affirmations.

CapMark Services, the master servicer, collected 84.6% of the YE
2002 property operating statements. The YE 2002 weighted average
debt service coverage ratio is 1.69 times, a decrease from the YE
2001 coverage of 1.75x, but increased since the 1.40x at issuance.

The credit enhancement that resulted from remodeling the pool
based on current performance and the increased loans of concern
warranted the downgrade to class J. Fitch will continue to monitor
the deal closely, as surveillance is ongoing.


NATIONSRENT: Committee Settles Claims Dispute with James Kirk
-------------------------------------------------------------
On April 30, 2002, the Official Committee of Unsecured Creditors
filed a lawsuit on behalf of the NationsRent Debtors' Chapter 11
estates, against the Debtors' former president and CEO James L.
Kirk to avoid transfers made to and on behalf of Mr. Kirk pursuant
to an Executive Transition Agreement.

Under the Executive Transition Agreement, Mr. Kirk received two
$1,000,000 payments in exchange for his resignation from all
positions with all of the Debtors.  Mr. Kirk was also provided
with Directors' and Officers' liability coverage under the
Debtors' tail D&O policies for three years.  The Debtors also
agreed, in advance, to help Mr. Kirk defend and enforce the
Executive Transition Agreement.  They committed to pay a retainer
to Mr. Kirk's counsel to cover his expenses with regard to any
litigation related to the Executive Transition Agreement.  Mr.
Kirk was not entitled to any other benefits or payments in
exchange for his resignation.

Mr. Kirk challenged the Committee's allegations.  Among other
things, Mr. Kirk argued that the transfers are not avoidable
preferential transfers because the transfers were contemporaneous
exchanges for new value given to the Debtors and made for or on
account of an antecedent debt owed by the Debtors.  Mr. Kirk noted
that the Debtors were also solvent at the time payment was made.

The Committee and Mr. Kirk attempted to negotiate a settlement of
the suit in the summer of 2002, but the negotiations were
unsuccessful.  In October 2002, Chief Judge Sue L. Robinson
withdrew the reference of the action from the Bankruptcy Court to
the Delaware District Court.

Subsequently, Mr. Kirk filed a motion for judgment on the
pleadings based on the rationale of the Third Circuit Court of
Appeals' decision in The Official Committee of Unsecured Creditors
of Cybergenics Corp. v. Chinery, 2002, which held that a
creditors' committee cannot initiate or prosecute avoidance
actions under the Bankruptcy Code before the confirmation of a
reorganization plan, even if authorized to do so by a bankruptcy
court.  In November 2002, the District Court stayed the Action in
light of the significance of the issues addressed in Cybergenics
case.

The Committee also investigated certain claims against Rental
Depot, a California corporation, which is affiliated with Kirk's
son-in-law, Eric L. Saulnier.  Rental Depot acquired the Debtors'
Monterey, California store after the Petition Date.

In January 2003, the Committee and Mr. Kirk resumed negotiations
that culminated in a compromise and settlement.  Other parties to
the Settlement Agreement include the Debtors, Rental Depot Inc.
and Mr. Saulnier.

The Settlement Agreement provides that Mr. Kirk will pay to the
Creditor Trust, established pursuant to the Debtors' First Amended
Plan, $500,000 in cash in full satisfaction of the claims of the
Creditor Trust, Committee and the Debtors' estates' in the
Adversary Action.  If Mr. Kirk does not make the full payment of
the Settlement Amount within 170 days of the Effective Date of the
Plan, the total Amount will be increased to $550,000.

Mr. Kirk will also execute a $200,000 note and an affidavit in
support of the note.  If the Settlement Amount is paid in full
within 170 days of the Plan Effective Date, the Note will be
deemed satisfied and canceled.

For their part, the Debtors will pay all professional fees and
expenses associated with the prosecution of the Action and the
fees related to the documentation of the Settlement Agreement.
This will have the effect of increasing the aggregate settlement
value to the unsecured creditors to more than $600,000, because
the Debtors' Plan currently provides for the Creditor Trust to be
responsible for all the fees.

The Committee and Mr. Kirk will dismiss the Action.

The Settlement Agreement warrants approval, Patricia L. Enerio,
Esq., at The Bayard Firm, in Wilmington, Delaware, asserts,
because:

   (i) it provides additional funding for the Creditor Trust by
       more than doubling its initial "war chest," which will be
       used to prosecute post-confirmation claims on behalf of the
       Debtors' Estate;

  (ii) it reduces the amount of fees that would be incurred if the
       Committee and Mr. Kirk continued to litigate the claims in
       the Action; and

(iii) it guarantees that the Estate will obtain some recovery for
       the claims asserted in the Action, despite the uncertainty
       regarding the Committee's ability to prosecute the Action
       in light of the Cybergenics decision, the possibility that
       Mr. Kirk would succeed on one or more of his affirmative
       defenses, and the possibility that Mr. Kirk would not be
       able to satisfy a judgment obtained by the Committee.

Convinced, Judge Walsh approves the Settlement Agreement.
(NationsRent Bankruptcy News, Issue No. 32; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

NationsRent Inc.'s 10.375% bonds due 2008 (NRNT08USR1) are trading
at about less than a penny on the dollar, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NRNT08USR1for
real-time bond pricing.


NOBEL LEARNING: Clinches Senior Debt Refinancing Arrangement
------------------------------------------------------------
Nobel Learning Communities, Inc. (Nasdaq: NLCI), a for-profit
provider of education and school management services for the pre-
elementary through 12th grade market, has closed the senior debt
refunding with Fleet and Commerce Bank.

Jack Clegg, Chairman/CEO, stated that NLCI and their banks (Fleet
Bank and Commerce Bank) have finalized the transaction to waive
any past covenant defaults and to reset the covenants based on the
current level of financial performance and expected future
performance. Clegg said that this was a very major step in
strengthening the financial foundation of the Company. He also
indicated that favorable progress continues toward a material
equity capital infusion.

Scott Clegg, President/COO, provided insight that the operating
performance of the Company is on target through May, and that the
activity of the Managed Asset Division is progressing quite
positively towards improving FY 03/04 earnings and providing
additional investment into our core base of school clusters and
their expansions. He stated that their Fletcher Heights School in
Arizona, which is estimated to lose approximately $900,000 this
fiscal year, has been subleased to the Peoria School District. The
Wilmington, NC school, which is projected to lose approximately
$500,000 in FY 02/03, was closed at the end of its school year. In
addition, through lease renegotiation and sale of additional non-
strategic properties, the Company estimates further improvement in
its operating profits and reduction in the Company's leverage.

Nobel Learning Communities, Inc. operates 178 schools in 15 states
consisting of private schools and charter schools; pre-elementary,
elementary, middle, specialty high schools and schools for
learning-challenged children clustered within established regional
learning communities.


NRG ENERGY: Judge Beatty Establishes Various Claims Bar Dates
-------------------------------------------------------------
NRG Energy, Inc., and its debtor-affiliates ask the Court to
establish various deadlines for filing proofs of claims in these
Chapter 11 cases:

    (a) July 14, 2003 as the deadline for all persons and entities
        holding or wishing to assert a claim, against NRG Energy,
        Inc., NRG Power Marketing, Inc., NRG Capital LLC, and NRG
        Finance Company I LLC -- the Plan Debtors -- to file a
        proof of claim in these Chapter 11 cases;

    (b) August 7, 2003 as the deadline for all persons and
        entities holding or wishing to assert a Claim against any
        of the remaining Debtors to file a proof of the Claim in
        these Chapter 11 cases;

    (c) the later of the Bar Date or 30 days after a claimant is
        served with notice that any of the Debtors have amended
        their Schedules reducing, deleting, or changing the status
        of a Claim not previously scheduled as disputed,
        contingent, or unliquidated, of the claimant, as the bar
        date for filing a proof of claim with respect to the
        amended scheduled Claim; and

    (d) November 10, 2003 as the deadline for the governmental
        units to file a proof of claim against any of the Debtors
        in these Chapter 11 cases.

James H.M. Sprayregen, Esq., at Kirkland & Ellis, in New York,
relates that the Plan Debtors will require complete and accurate
information regarding the nature, amount and status of all claims
against their estates that will be asserted in these Chapter 11
cases.  The First Bar Date and Second Bar Date should allow all of
the Debtors the ability to efficiently proceed to consummation of
their plans of reorganization.

Pursuant to General Order M-279, the Debtors propose that the Bar
Dates apply to all Persons or Entities holding Claims against
them, whether secured, priority or unsecured, that arose to the
Petition Date.

The Debtors propose that a Person or Entity must file a proof of
claim on or before the applicable Bar Date for any Claim relating
to a Debtor's rejection of an executory contract or unexpired
lease that is approved by a Court order prior to the date of
service of the applicable Bar Date Notice.

           Procedures for Providing Notice of Bar Date

In conjunction with setting the Bar Dates, Mr. Sprayregen points
out, the Debtors must ensure that all interested parties receive
appropriate notice of the dates.  Given the factual complexities
of the instant cases, the Debtors propose to provide actual
written notice of the Bar Dates to all known Persons and Entities
holding Claims.  The Debtors propose to give multiple and
sequential notices of the Bar Dates.

Accordingly, in the case of the Plan Debtors, their potential
creditors will receive approximately 60 days' notice of the Bar
Dates pursuant to the Commencement Notice, and will receive
another notice of the First Bar Date approximately 25 days prior
to the First Bar Date.  In the case of the Remaining Debtors,
their potential creditors will receive approximately 85 days'
notice of the Bar Dates pursuant to the Commencement Notice, and
will receive another notice of the Second Bar Date approximately
35 days prior to the Second Bar Date.

If the Debtors amend or supplement the Schedules subsequent to the
date that the applicable Bar Date Notices are served, the Debtors
will give notice of any amendment or supplement to the holders of
claims affected, and the holders will be afforded 30 days from the
date of the notice to file proofs of claim in respect of their
claims or be barred from doing so, and will be given notice of the
deadline.

            Procedures for Filing Proof of Claim Form

With the Bar Date Notices and any Supplemental Bar Date Notice,
the Debtors will include a customized proof of claim form.  The
Proof of Claim Form will state whether:

    -- the Entity's Claim is listed in the Schedules,

    -- the Claim's dollar amount is listed in the Schedules,

    -- the Debtor for which the Entity's Claim is scheduled, and

    -- whether the Claim is listed as disputed, contingent or
       unliquidated.

The Debtors also propose that in order to be valid and properly
filed, proofs of claim must:

    -- be signed;

    -- include supporting documentation;

    -- be in the English language;

    -- be denominated in United States currency;

    -- conform substantially to Form No. 10 of the Official
       Bankruptcy Forms;

    -- specify by name and case number the Debtor against which
       the claim is filed, and if the holder asserts a claim
       against more than one Debtor or has claims against
       different Debtors, a separate Proof of Claim Form must be
       filed with respect to each Debtor; and

    -- contain in box 4 of the Proof of Claim Form a liquidated
       amount of the asserted Claim, which Claim amount will be
       binding on the Entity as the maximum amount of the
       allowable Claim against the applicable Debtor.

The Debtors propose that for any Proof of Claim Form to be validly
and properly filed, a signed original of the completed Proof of
Claim Form, together with accompanying documentation, must be
delivered so as to be received by no later than 5:00 p.m.,
prevailing Pacific time, on the applicable Bar Date:

    (a) if delivered by mail, to Kurtzman Carson Consultants, and

    (b) if by hand delivery, courier or federal express delivery,
        to the Clerk of the Court for the Southern District of New
        York.

Facsimile submissions and electronic mail will not be accepted.
A Proof of Claim will be deemed filed when actually received by
the Claims Agent or the Clerk's Office, as applicable.

Pursuant to Rule 3003(c)(2) of the Federal Rules of Bankruptcy
Procedure, any Person or Entity that is required to file a proof
of claim in these Chapter 11 cases but that fails to do so in a
timely manner and in accordance with the procedures set forth, as
approved by the Court, should be forever barred, estopped and
enjoined from:

    (a) asserting any Claim against the Debtors that the Person or
        Entity has that is:

        (1) in an amount that exceeds the amount, if any, that is
            set forth in the Schedules, or

        (2) of a different nature or in a different
            classification; and

    (b) voting upon, or receiving distributions under, any plan or
        plans of reorganization in these Chapter 11 cases in
        respect of the Claim.

                   Bar Date Publication Notice

The Debtors also propose to publish Notice of the Bar Dates once
at least 25 days before the First Bar Date in The Wall Street
Journal, The New York Times, and The Minneapolis Star.  The
Debtors believe that these publications will reach an audience of
creditors and interest holders that may hold unknown claims.

                        *     *     *

After due deliberation, Judge Beatty grants the Debtors' request
in its entirety. (NRG Energy Bankruptcy News, Issue No. 4;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

NRG Energy Inc.'s 8.700% bonds due 2005 (XEL05USA1) are trading at
about 44 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=XEL05USA1for
real-time bond pricing.


ODD JOB: Amazing Savings Commences Tender Offer for All Shares
--------------------------------------------------------------
Amazing Savings Holding LLC and Odd Job Stores, Inc. (Nasdaq:ODDJ)
announced that Amazing Savings has commenced its previously
announced tender offer to purchase up to 96% of the outstanding
common shares of Odd Job at a cash price of $3.00 per share. If
the Offer is not completed on or before July 15, 2003, Amazing
Savings has the right to reduce the offer price to $2.90 per
share. In addition, Amazing Savings has the right to reduce the
minimum number of common shares purchased to a majority of the
outstanding common shares. The Offer is scheduled to expire on
July 9, 2003.

The Board of Directors of Odd Job has unanimously approved the
Offer and recommended that Odd Job shareholders accept the Offer
and tender their common shares. The purchase of shares in the
Offer is conditioned upon, among other things, the valid tender,
without withdrawal before the expiration of the Offer, of the
minimum amount of common shares required under the Tender
Agreement and the effectiveness of a written consent by Odd Job
shareholders to opt out of the Ohio Control Share Acquisition Law.
The Offer is not conditioned on the receipt of financing; however
the Offer is conditioned upon receipt of a forbearance agreement
from Odd Job's lenders to continue to provide liquidity to the
Company under the existing Credit Facility through August 31,
2003. Under the existing Credit Facility, a change in control of
Odd Job would constitute a default under the facility.

Shareholders that own approximately 53% of the common shares have
entered into a Principal Shareholders' Agreement, dated as of
June 3, 2003, with Amazing Savings in which they agreed to tender
their shares into the Offer.

Odd Job is filing with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 relating to the Offer that will be
distributed to Odd Job shareholders with the tender offer
documents. Odd Job shareholders are urged to read the tender offer
documents and the Solicitation/Recommendation Statement carefully
when they become available because they will contain important
information. Investors will be able to receive such documents free
of charge at the SEC's Web site at http://www.sec.govor by
contacting MacKenzie Partners, Inc., the Information Agent for the
transaction, at (212) 929-5500 (for banks and brokers) and for all
others call toll free at (800) 322-2885 or by directing a request
to Odd Job at 200 Helen Street, South Plainfield, New Jersey
07080, Attention: Corporate Secretary.

For a more complete description of the proposed transactions,
please refer to the Tender Agreement, which was attached as an
exhibit to Odd Job's Current Report on Form 8-K filed with the SEC
on June 4, 2003.

Amazing Savings is a Delaware limited liability company, which
directly or indirectly owns and operates an upscale close-out
retail business. Amazing Savings commenced operations in 1988.
Amazing Savings' slogan is "quality close-outs at amazing prices."
Amazing Savings operates fourteen (14) stores in New York, New
Jersey and Maryland.

Odd Job is a major regional closeout retail business. It currently
operates a chain of 75 closeout retail stores in New York, New
Jersey, Pennsylvania, Connecticut, Delaware, Ohio, Michigan and
Kentucky.


ORION REFINING: Hires Andrews & Kurth as UOP Litigation Counsel
---------------------------------------------------------------
Orion Refining Corporation seeks permission from the U.S.
Bankruptcy Court for the District of Delaware to employ Andrews &
Kurth LLP as its Special Counsel, nunc pro tunc to May 13, 2003.

The Debtor asks the Court for authority to employ Andrews & Kurth
as special counsel to render professional services to the Debtor
with regard to:

     a. the continued representation of the Debtor in the
        pending UOP Litigation and all matters related to that
        litigation, including any appeals;

     b. the representation of the Debtor in all bankruptcy
        matters and proceedings related to UOP (whether or not
        related to the current UOP Litigation), including
        lifting stay litigation, motions to assume or reject
        contracts, creditor committee meetings, claims matters
        and the defense of any proceedings or contested matters
        initiated by UOP;

     c. the representation of the Debtor with regard to
        drafting, negotiating or obtaining court approval of a
        plan of reorganization, to the extent matters relating
        to UOP are involved;

     d. any other matters relating to current or future disputes
        with UOP; and

     e. the drafting, filing and prosecution of this employment
        application and periodic fee applications before this
        Court.

In the UOP Litigation, the Debtor sues UOP for fraudulently
inducing the Debtor to enter a Milli-Second Catalytic Cracking
Process License, Engineering and Guarantee Agreement.  Orion
discovered later that UOP did not disclose that when the MSCC
contract was signed:

     i) the MSCC process is a multi-second, not milli-second,
        and therefore none of the represented process advantages
        of milli-second cataclytic cracking exist; and

    ii) the yields of the only other commercial MSCC unit in the
        world were much worse than the yield UOP represented to
        Orion it would achieve, which yields became the Design
        Basis for the unit under the contract term.

The Debtor tells the Court that had UOP not misrepresented the
benefits of MSCC, the Debtor would be $500 million better off
today.

The Debtor has selected Andrews & Kurth as special counsel because
of the firm's prior involvement in the UOP Litigation and the
firm's extensive experience and knowledge with respect to the
Debtor's business and commercial transactions.

The UOP Litigation involves extremely complex issues, requiring
counsel to possess a high degree of skill and knowledge relating
to the underlying technologies. Andrews & Kurth has performed an
enormous amount of legal services preparing the UOP Litigation for
trial, which is set in September 2003, and has consequently
obtained significant working knowledge. Andrews & Kurth 's
continued representation of the Debtor in the UOP Litigation is
essential to the Debtor's efforts to maximize the value of its
estate.

For its compensation, Andrews & Kurth has agreed to discount by
40% its standard hourly rates. In addition, A&K has agreed to
invoice the Debtor for only 50% of its expenses relating to the
UOP Litigation, and carry the remaining 50% until a recovery is
obtained by the Debtor. In consideration of these discounts,
Andrews & Kurth will receive a sliding-scale contingency fee based
upon various thresholds of recovery to the Debtor. Specifically,
Andrews & Kurth is entitled to 10% of the first $10 million net
recovery, 7.5 percent of the next $10 million net recovery and 5
percent of any net recovery above $20 million.

Joe Holzer discloses Andrews & Kurth's hourly rates range:

          partners           $300 to $525 per hour
          associates         $180 to $395 per hour
          paraprofessionals  $60 to $140 per hour

Orion Refining Corporation filed for chapter 11 protection on
May 13, 2003 (Bankr. Del. Case No. 03-11483).  Robert J. Dehney,
Esq., at Morris, Nichols, Arsht & Tunnel, 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 $100 million each.


OWENS CORNING: Committee Wants More Info re Disclosure Statement
----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Owens Corning and
its debtor-affiliates seeks more information and clarification
regarding the proposed Disclosure Statement.

Christopher M. Winter, Esq., at Morris, Nichols, Arsht & Tunnell,
in Wilmington, Delaware, relates that the Asbestos Committee is
comprised of 13 law firms.  As of the Petition Date, those 13 law
firms represented no fewer than 80,000 asbestos claimants.  As
proponents of the Plan, these law firms and the Asbestos Committee
are thoroughly familiar with its contents and, based on practice
used in other cases, vetted it with numerous other asbestos law
firms before the Asbestos Committee officially became a proponent
of that plan.

The Bankruptcy Code provides that each holder of an allowed claim
in an impaired class is entitled to vote on the plan.  To that
end, the Bankruptcy Code requires that a disclosure statement be
transmitted to each "holder of a claim."  The purpose of a
disclosure statement is to give the holder of the claim adequate
information so the holder of the claim can vote on the plan in
view of the claimholder's economic interest.

According to Mr. Winter, the central issue that needs
clarification in connection with the scheduled Section 1125
hearing on the "adequacy" of "information" arises from these
circumstances -- The Unsecured Creditors Committee presumes that
the Asbestos Committee wants the votes of tens and tens of
thousands of "asbestos claimants" to be voted for the proposed
plan.  But it is common knowledge that in prior asbestos Chapter
11 cases, virtually all of which were consensual, law firms and
lawyers representing asbestos claimants in fact voted on the
plans, purportedly exercising authority of or like a power of
attorney, ostensibly contained in, for example, contingent fee
agreements.  Indeed, that fact is notorious, with the Bankruptcy
Court early in the Debtors' cases observing that fact on the
record, and stating that in these cases the asbestos claimants,
not their lawyers, would exercise the franchise that the
Bankruptcy Code gives to holders of claims.

The Creditors' Committee vehemently opposes the unfair,
nonconsensual plan proposed by the Debtors and the other Plan
Proponents.  To that end, the Creditors' Committee submits that
the filed plan would not achieve confirmation under Section
1129(a) if fewer than the twin majorities or a majority in number
and 2/3 in amount of claims voting of Class 7 did not assent to
this plan.

The Creditors' Committee believes that a significant number of
asbestos claimants, especially those holding the high-value
claims, can recognize that it is in those claimholders' economic
interest to vote against the proposed plan, if they are given
appropriate descriptions and explanations.  For example, holders
of what the Commercial Committee called in its motion for an
asbestos bar order "asbestos contract claims" have claims for
fixed, liquidated amounts, just like commercial, bank, and bond
claimants.

The Debtors' disclosure statement states that there are 60,000 of
these asbestos contract claimants.  Mr. Winter contends that these
60,000 asbestos claimants holding contract claims should, just
like creditors with contract claims, oppose this plan. Votes by
60,000 members of Class 7 to reject the plan could mean that the
majority in number requirement of Section 1126(c) is not met.
Similarly, asbestos claimants asserting the highest value claims
if given appropriate information, could recognize their claims
would be substantially diluted by a plan that pays large, large
numbers of what the Court termed "the so-called unimpaireds."  If
these highest value asbestos claimants so recognize and vote to
reject the plan, the 2/3 in amount requirement of Section 1126(a)
for Class 7 may not be met.

Other variations are possible, like asbestos claimants with solid
"product ID" could oppose any payment, but certainly should oppose
equal payment, to claimants with less proof.

In view of the statutory purpose of the document, Mr. Winter
asserts that the disclosure statement should contain "adequate
information" so that the various types of asbestos claimants
within Class 7 have the opportunity to understand and to vote in
their economic self-interest.  To achieve that objective, the
Creditors' Committee might, for example, propose at a Section 1125
hearing that portions of the disclosure statement be written in
"plain English" format, as the SEC requires when shareholders
vote.  In addition, the Creditors' Committee might suggest that
the economic consequences for discrete types of asbestos claimants
be described with specificity.

Mr. Winter relates that in this contested, non-consensual context,
there ostensibly is a separation of the ownership of the asbestos
claim, which resides with the asbestos claimant, and the control
of the asbestos voting franchise, which may reside in a putative
third-party agent.  Because of this separation, neither the Court
nor the Creditors' Committee nor other parties-in-interest like
the U.S. Trustee know the basic objective of the "adequate
information" inquiry in this contested case.  The lawyers in or
for the Asbestos Committee probably drafted, certainly discussed
with colleagues not on that committee, approved and want confirmed
this plan.  If some, most, or all NSP law firms can and will
exercise the voting franchises of their asbestos inventories
pursuant to powers of attorney or other putative authorizations,
then it would be largely a sterile, formalistic charade and waste
the time of the Court, the Commercial Committee, and perhaps
others to raise suggestions or objections about "adequate
information" concerning asbestos claims.

Therefore, in this contested, non-consensual case, the Creditors'
Committee needs, and the Court deserves for its informed judgment,
an answer to a fundamental question -- Will the real asbestos
voters who are supposed to receive "adequate information" about
the structure and impact of this plan please stand up?  The answer
to this fundamental question is immediately important for any
meaningful compliance with Section 1125.  But in this non-
consensual context, that answer is also important for stages that
will follow approval of a disclosure statement, including the form
of the ballot, valuing asbestos claims for voting purposes,
instructions to the agent receiving and tabulating votes,
dissemination of the disclosure statement, and voting challenges.

The Creditors' Committee therefore requests clarification of this
issue, which is basic to the entire "adequate information" inquiry
of a Section 1125 hearing.

Specifically, the Creditors' Committee wants Judge Fitzgerald to:

    -- require each of the 13 law firms on the Asbestos
       Committee to file with the Court a declaration affirming
       that no partner in the firm will vote, purport to vote,
       cause directly or indirectly any employee of the firm or
       any lawyer of the firm to vote or purport to vote on behalf
       of any client asserting an asbestos personal injury or
       wrongful death claim in these Chapter 11 cases;

    -- require the Debtors within seven days to transmit to each
       of the remaining 105 NSP law firms a copy of an order
       requiring each to file an identical declaration;

    -- direct that within 14 days the date for objections to
       the Debtors filed disclosure statement based on "adequate
       information" concerning asbestos claims be extended to 10
       days after the later of the dates ordered by the Court, and
       continuing the Section 1125 hearing on "adequate
       information" concerning asbestos claims to a date
       convenient to the Court; and

    -- require any law firm on the Asbestos Committee and any
       NSP law firm that does not file a declaration with the
       affirmation:

       a. to produce to the Creditors' Committee copies of each of
          the non-identical forms of the entire agreement with
          clients asserting asbestos claims against the Debtors
          that authorize or purport to authorize the law firm to
          vote the claim of the asbestos claimants in these
          Chapter 11 cases;

       b. if a law firm produces more than one form of agreement,
          to provide to the Creditors' Committee a statement of
          the number of asbestos clients who signed each form of
          agreement; and

       c. to file with the Court a declaration that the law firm
          has complied with the requirements.

The Creditors' Committee submits that any law firm that must
comply with the requirements should do so within 45 days.

                     Asbestos Claimants Object

Mark T. Hurford, Esq., at Campbell & Levine, LLC, in Wilmington,
Delaware, relates that the Creditors' Committee summarily rejects
voting procedures that have been repeatedly accepted by numerous
courts to date, including those overseeing the Armstrong World
Industries, Inc., Babcock & Wilcox, and Asbestos Claims Management
Corporation bankruptcies.  Instead of allowing lawyers to cast
master ballots on behalf of the claimants they represent, the
Creditors' Committee would require each of the hundreds of
thousands of personal injury claimants to individually review the
Plan and Disclosure Statement.  Their lawyers would then be
required to file written evidence of the lawyers' authority to
cast ballots on behalf of those claimants, which evidence in every
case would have to be reviewed to determine the validity and scope
of the individual claimant's agency relationship with the lawyer
under whichever of the 50 States' laws apply.

Mr. Hurford argues that the Creditors' Committee's proposal is
unsustainable, as it would delay Plan confirmation indefinitely,
for no legitimate purpose.  As the precedent to date on this issue
makes plain, the procedures underlying the proposed ballots will,
if approved, put to rest the real issue presented here --
protection of the integrity of the voting process.  The
Creditors' Committee's request should therefore be denied.

Mr. Hurford asserts that the Creditors' Committee's request urges
a voting process that has no support under the Bankruptcy Code or
Bankruptcy Rules, that would delay Plan confirmation indefinitely,
and that would result in wasteful and unnecessary expenditures of
the Debtors' assets, all for no legitimate purpose.  Furthermore,
as precedent and the rulings of three other Bankruptcy Courts make
plain, the master ballot and other voting procedures proposed by
the Debtors would, if approved, insure the integrity of the voting
process through procedural safeguards and court supervision.
(Owens Corning Bankruptcy News, Issue No. 53; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


PAXSON COMMS: Moody's Downgrades Bank, Bond & Preferred Ratings
---------------------------------------------------------------
Moody's Investors Service's ratings on Paxson Communications Corp.
took a downward slide after the investors service's review.
Outlook is revised to stable from negative.

                     Downgraded Ratings

    * approximately $355 million of bank facilities to B1
      from Ba3,

    * approximately $556 million of senior subordinated notes
      to Caa1 from B3,

    * approximately $366 million of cumulative exchangeable junior
      preferred stock to Caa2 from Caa1,

    * senior implied rating to B2 from B1,

    * senior unsecured issuer rating to B3 from B2.

The ratings downgrade mirrors the company's slow revenue growth
which falls below Moody's expectations. However, the ratings are
supported by the high underlying asset value of Paxson's station
portfolio.

Paxson Communications Corp., based in West Palm Beach, Florida,
operates the largest television station group in the U.S.

Paxson Communications' 12.250% bonds due 2009 (PAX09USR1) are
trading at about 83 cents-on-the-dollar, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=PAX09USR1for
real-time bond pricing.


PEAKSOFT: Entering into Debt Conversion Pacts with 10 Creditors
---------------------------------------------------------------
Tim Metz, President and CEO of PeakSoft Multinet Corp. (TSX V:
PKS) announces PeakSoft's entering into of debt conversion
agreements with 10 of its creditors, including those previously
announced on August 29, 2001. PeakSoft had entered into debt
conversion agreements as of December 21, 2000 and as of August 1,
2001 with its creditors to settle debts to them which aggregate to
CDN$6,498,563 by agreeing to issue 21,155,071 common shares priced
at CDN$0.26 per share. These agreements provide that the issuance
of shares is subject to shareholder and/or regulatory approval.
PeakSoft also entered into a debt conversion agreement dated as of
8 August 2002 with its President to settle debts of CDN$385,958 by
agreeing to issue 1,484,455 common shares priced at CDN$0.26 per
share. The agreement with Mr. Metz is subject to shareholder and
CDNX (TSX Venture Exchange) approval. The settlement of these
debts will eliminate a significant portion of PeakSoft's
indebtedness.

Of the CDN$6,884,521 of debt settled pursuant to the existing debt
conversion agreements, CDN$5,121,429 is owed to The Liverpool
Limited Partnership and Elliott International, L.P.  Liverpool and
Elliott are institutional investment firms under common management
that together hold approximately 1,845,570 million (48%) of the
issued and outstanding shares of PeakSoft prior to the debt
settlement. The remaining $1,763,092 of debt is owed to 9
creditors, including Mr. Metz. As a result of the debt settlement,
Liverpool and Elliott will receive an additional 15,858,395
PeakSoft common shares. In addition, under the debt conversion
agreements with Elliott and Liverpool, PeakSoft will transfer
431,989 common shares of Inculab.com Inc. to Liverpool and
Elliott, together with PeakSoft's interest in the agreement by
which the Inculab.com Inc. shares were acquired and a related
registration rights agreement. The debt conversion agreements of
Elliott and Liverpool provide that a condition precedent in favour
of Liverpool and Elliott to accepting shares for debt is the
requirement that all other indebtedness of PeakSoft be exchanged
for shares. Another condition to these debt conversion agreements
includes CDNX (TSX Venture Exchange) approval of the issuance of
PeakSoft shares in exchange for the indebtedness.

In July 2001, the board agreed that the directors of PeakSoft
(namely, Simon Arnison, Colin Morse and Timothy Metz) be paid an
aggregate amount of USD$150,000 in compensation for their time and
their efforts on the Company's behalf, subject to shareholder
and/or regulatory approval. The directors have been paid nothing
for their efforts on behalf of the shareholders. PeakSoft entered
into debt settlement agreements with each of its three directors
in May, 2002 to settle the above debts of US$50,000 each
(aggregate US$150,000) by agreeing to issue 291,111 common shares
priced at CDN$0.26 per share to each of the three directors. These
agreements with Messrs Arnison, Morse and Metz were also subject
to similar terms and conditions as the debt settlements previously
announced on 29 August 2001. The debt represented by these
agreements was forgiven during the 2nd. Quarter 2003 and the
respective debt conversion agreements were cancelled.

PeakSoft also entered into a debt settlement agreement with Mr.
Metz dated as of 22 January 2003 to settle debts of CDN$461,874 by
agreeing to issue 1,776,437 common shares priced at CDN$0.26 per
share. This agreement with Mr. Metz was also subject to the
similar terms and conditions as the debt settlements previously
announced on 29 August 2001. The 22 January 2003 Agreement was
cancelled on 9 May 2003.

The debt conversion agreements with Liverpool, Elliott and Mr.
Metz are considered "related party transactions" under Ontario
Securities Commission Rule 61 501 and TSX Venture Policy 5.9. As a
result, these debt conversion agreements are subject to PeakSoft
shareholder "minority approval" and the valuation requirements
under OSC Rule 61 501 and Policy 5.9.

With respect to the Liverpool and Elliott debt conversion
agreements, PeakSoft is relying on the "financial hardship"
exemption from the valuation requirements of OSC Rule 61 501 and
the corresponding exemption in Policy 5.9. OSC Rule 61 501 states
that the exemption is available if: (1) PeakSoft is insolvent or
in serious financial difficulty; (2) the transactions are designed
to improve the financial position of PeakSoft; (3) the
"bankruptcy, insolvency or reorganization" exemption under such
rule is not applicable; and (4) the board of directors of
PeakSoft, acting in good faith, determines, and not less than two
thirds of the independent directors of the PeakSoft, acting in
good faith, determine that paragraphs (1) and (2) are applicable
and that the terms of the transactions are reasonable given
PeakSoft's circumstances. PeakSoft's board of directors, two of
which are currently independent (as defined under OSC Rule 61
501), have determined that PeakSoft had a working capital
deficiency of approximately CDN$6.58 million as of 31 December
2002 and was therefore technically insolvent, that the debt
settlement transactions were designed to improve the financial
position of PeakSoft by facilitating the entering into of a
merger, acquisition or financing transaction with a third party,
and that the terms of the debt conversion agreements were
reasonable given PeakSoft's circumstances.

With respect to the 2002 debt conversion agreement of Mr. Metz,
PeakSoft is relying on the "$500,000" exemption from the valuation
requirements in accordance with section 5.6(13), as of the date
such transaction was agreed to the fair market value of the debt
owed by PeakSoft was less than CDN$500,000.

It is currently anticipated that PeakSoft will have 26,470,500
shares outstanding upon the subsequent issuance of shares pursuant
to the existing debt conversion agreements. Of this total, it is
anticipated that Elliott will own approximately 8,851,983 shares
(33.44%), Liverpool will own approximately 8,851,983 shares
(33.44%) and Mr. Metz will own 1,522,688 shares (5.75%). Based on
oral discussions with Liverpool and Elliott, it was the
understanding that the issuance of common shares under the debt
conversion agreements would be done in conjunction with PeakSoft
entering into a merger, acquisition or financing transaction with
a third party.

Tim Metz, PeakSoft's Chairman, explains, "We have entered into
these debt conversion agreements, which are subject to applicable
shareholder and/or regulatory approval, in order to position
PeakSoft in a more favorable posture. We believe that this will
enhance our efforts regarding a merger/acquisition/new financing".

PeakSoft Multinet Corp. is an Internet/Software development
company and is fully reporting in Canada and the United States.
Its shares are currently subject to cease trade orders imposed by
the Alberta, British Columbia and Ontario securities commissions
for failing to file certain financial statements. It is listed on
the Toronto Venture Exchange, however, it is currently suspended
as a result of these cease trade orders; PeakSoft is headquartered
in Bellingham, WA. For more information please contact Mr. Tim
Metz at metz36(at)attbi.com.


PENNEXX FOODS: Negotiations with Potential Key Investor Crumble
---------------------------------------------------------------
Pennexx Foods, Inc. (OTCBB:PNNX) announced that, despite
discussions throughout the weekend with one key potential Company
investor, negotiations broke down Monday and, as a result, Pennexx
was unable to meet its payment obligation due to Smithfield Foods,
Inc.

Under the terms of the Forbearance and Peaceful Possession
Agreement between Smithfield and Pennexx dated as of May 29, 2003,
the Forbearance Period has ended, Smithfield is entitled to
exercise all of its rights as a secured party, and Pennexx is
required to grant Smithfield peaceful possession of the
collateral. Consequently, Pennexx has commenced discussions with
Smithfield concerning transitional matters.

Established in 1999, Pennexx Foods, Inc. is a leading provider of
case-ready meat to retail supermarkets in the northeastern U.S.
The company currently provides case-ready meat within a 300-mile
radius of its plants to customers in the Northeast in order to
assure delivery of product with an extended shelf life. The
company cuts, packages, processes and delivers case-ready beef,
pork, lamb and veal in compliance with the United States
Department of Agriculture regulations. Pennexx customers include
many significant supermarket retailers.


PEREGRINE: Equity Holders' Panel Brings-In Seneca as Advisor
------------------------------------------------------------
Seneca Financial Group, Inc., has been officially retained as
Financial Advisor by the Official Committee of Equity Security
Holders of Peregrine Systems, Inc.  Seneca, whose employment has
been approved by the U.S. Bankruptcy Court for the District of
Delaware in Wilmington, has been working with the Committee since
March to assist in negotiating a Plan of Reorganization that
properly reflects Peregrine's inherent value as a going concern
and allocates a fair amount of that value to the current
shareholders.

San Diego-based Peregrine, a leading provider of consolidated
asset and service management software, filed for Chapter 11
protection under the U.S. Bankruptcy Code on September 22, 2002.
To ensure that the current shareholders receive an equitable stake
in the future of the Company, Seneca is providing financial
advisory services and expert testimony regarding the financial
feasibility of the proposed Plan of Reorganization for Peregrine.

"Despite the recent challenges that Peregrine has faced - both
outside and inside of the bankruptcy court - we believe the
Company is delivering value to the marketplace as evidenced by
their strong customer list," said James Harris, president of
Seneca Financial Group.  "We look forward to working closely with
our clients to ensure full value is realized for Peregrine's
business over time beginning with a prompt exit from Chapter 11."

The Bankruptcy Court of Delaware intends to determine Peregrine's
enterprise value for purposes of confirming the company's proposed
Plan of Reorganization on June 9 and 10, 2003.  The confirmation
hearing of the Plan is scheduled for July 8 and 9, 2003.

Seneca Financial Group is an investment bank focusing on working
with companies and creditors to companies in financial distress.
Seneca is based in Greenwich, Connecticut.  More information can
be obtained about Seneca at http://www.senecafinancial.com


PICCADILLY CAFETERIAS: Must Raise New Funds or Face Bankruptcy
--------------------------------------------------------------
Effective April 1, 2002, Piccadilly Cafeterias, Inc. adopted a 52-
53 week fiscal reporting period, resulting in a 2002 fiscal year-
end date of July 2, 2002, rather than June 30, 2002. Quarterly
reporting now includes 13-week periods except for 53-week years in
which the fourth quarter of those fiscal years will include 14
weeks. The quarter ended April 1, 2003, includes 91 days compared
to 90 days for the quarter ended March 31, 2002. The three
quarters ended April 1, 2003, includes 273 days compared to 274
days for the three quarters ended March 31, 2002.

         Three Quarters Ended April 1, 2003 Compared
           to Three Quarters Ended March 31, 2002

Total net sales for the three quarters ended April 1, 2003 were
$255.5 million, a 7.6% reduction from net sales of $276.6 million
for the three quarters ended March 31, 2002. Net sales declined
$1.3 million due to one less day in the current three-quarter
period compared to the same period last year. Cafeterias closed in
fiscal 2003 accounted for $6.6 million, or approximately 30%, of
the total decline in net sales. The remaining decline of $13.2
million is attributable to lower same-store net sales. Same-store
cafeterias are cafeterias that were open for the entire three
quarters in both fiscal years. The net decrease in same-store
sales of 4.9% reflects a decline in same-store guest traffic of
7.7%, which was partially offset by a check average increase of
3.0%. Approximately 72% of the check average increase is
attributable to price increases and the remainder is due to
various menu promotions.

Cost of sales as a percent of net sales increased 1.9%. That
increase is a combination of a 1.1% increase in food costs as a
percent of net sales and a 0.8% increase in labor costs as a
percent of net sales. Most of the food cost increase relates to
various marketing promotions during the first quarter. These
programs were aimed at increasing the high-quality food reputation
of the Piccadilly brand and increasing the brand's perception for
great value. For example, the Company enhanced one of its highest
selling items, catfish, by increasing the meal portion 50% for
many of its guests and promoting an "All-You-Can-Eat Catfish"
special. The catfish promotions during the first quarter increased
the frequency of catfish meal sales by approximately 45% and
increased the quantity of catfish consumed by guests by
approximately 120%. Coincident with the catfish promotions, the
market price of catfish increased significantly, while the retail
price charged to guests was maintained. Piccadilly discontinued
the catfish promotions at the beginning of the second quarter.
Since the end of the promotion, it has mitigated the increase in
catfish prices by purchasing similar products at lower-costs from
other suppliers.  The increase in labor costs, as a percent of net
sales, is due to the decline in net sales in relationship to the
fixed component of labor costs. Hourly labor costs, as a percent
of net sales, was down 0.1% from the prior year three-quarter
period.

Other operating expenses increased 0.8% as a percent of net sales.
Marketing expenses were 3.0% of net sales this year compared to
1.9% last year. Management expects marketing expenses to be
approximately $1.0 million in the fourth quarter of this fiscal
year compared to $3.0 million in the fourth quarter of last year.
Team member benefit costs as a percent of net sales were 1.2% in
the three-quarter period this year compared to 2.4% in the prior
year. Team member benefit costs decreased $3.8 million.
Approximately $2.6 million of the decrease in benefit costs
resulted from changes made last year to team member benefit plans
effective January 1, 2002. Additionally, the Company reduced
benefit costs by utilizing assets from a Morrison Restaurants,
Inc. trust fund that had been established to provide benefits
under a self-insured medical reimbursement plan. Effective
January 1, 1999, Piccadilly terminated the Morrison plan and team
members formerly eligible to participate in that plan were then
eligible to participate in the Piccadilly Cafeterias, Inc. health
insurance plan. The Trust continued to pay run-off claims that
were incurred prior to January 1, 1999. As of March 2000, all run-
off claims had been paid, the Trust had remaining cash balances of
$1.2 million, and the Trust was effectively frozen. The remaining
Trust assets were used to pay team member benefit costs, reducing
Piccadilly's operating expenses by $1.2 million. All funds from
the Trust were used as of December 31, 2002. The savings in team
member costs were partially offset by increases, as a percent of
net sales, of 0.3% in supplies expense, 0.2% repairs and
maintenance costs, and 0.4% in utilities expense. These increases
are largely due to the decline in net sales.

General and administrative expenses declined $0.1 million and
increased 0.3% as a percent of net sales. The increase as a
percent of net sales is attributable to the decline in net sales.

Piccadilly sold a cafeteria that was closed before the start of
fiscal 2003 resulting in a $0.4 million gain this year. Other
income last year includes $0.2 million of interest income
associated with a federal income tax refund.

Interest expense for the first three quarters of fiscal 2003 was
down $0.6 million compared to the first three quarters of fiscal
2002 because of debt repayments over the last 12 months.
Amortization of financing costs and original issue discount,
included in interest expense, was $1.1 million and $1.3 million,
respectively for the three quarters ended April 1, 2003 and
March 31, 2002. While amortization of financing costs and original
issue discount on the Senior Notes are lower due to the early
retirements of debt, these savings have been partially offset by
higher amortization costs related to the Company's Senior Credit
Facility.

If Piccadilly Cafeterias continue to experience declining sales
trends, the Company's ability to maintain compliance with the
financial covenants of its Credit Facility could be impaired
during fiscal 2004. Additionally, borrowing limitations under the
Facility could prevent it from accessing the limits of the
Facility thereby impairing its ability to meet obligations. If the
Company defaults under the terms of the Facility, the lender has
the right to terminate the Facility, accelerate the maturity of
any outstanding obligations under the Facility, and require that
additional collateral be provided to secure the lender's exposure
with regard to any outstanding commercial letters of credit issued
on Piccadilly's behalf. Additionally, under the provisions of an
intercreditor agreement between its lenders, the Company may also
be in default of the Notes. Management is uncertain as to the
ability to obtain i) alternative sources of liquidity in the event
of a default under the Facility or ii) additional sources of
liquidity if the borrowing availability under the Facility is
insufficient. Given the recent financial performance of the
Company, such alternative sources of liquidity may be difficult to
obtain on commercially acceptable terms or at all. If additional
sources of liquidity are required and prove to be unavailable, the
Company has stated that it would likely be confronted with
insolvency or bankruptcy.


PLAINS RESOURCES: Closes Share Repurchase & Debt Facility Deals
---------------------------------------------------------------
Plains Resources Inc. (NYSE: PLX) reported that since December 18,
2002, the effective date of the tax free separation of PXP, the
Company, through its Treasury Share Program, has repurchased a
total of 819,975 common shares at an average price of $10.95 per
share. Since the time of last disclosure on April 8, 2003, this
represents an additional 277,275 common shares repurchased at an
average price of $12.00 per share. The additional common share
purchases were funded out of available cash.

On June 6, 2003, the Company paid $23.3 million to retire the
entire 46,600 outstanding shares of Series D Cumulative
Convertible Preferred Stock, or Series D Preferred, that were
convertible into 1,671,416 shares of common stock at a price of
$13.94 per share. The Series D Preferred had an aggregate book
value of $23.3 million and paid an annual dividend of $30.00 per
share (approximately $1.4 million). Contemporaneously, on June 6,
2003, PLX completed a restructuring of its bank credit facility in
connection with the repurchase of the Series D Preferred Stock.
The amount was increased by $24 million to $60 million. The
increased borrowings were used to finance the repurchase of the
Series D preferred stock and pay accrued dividends and related
expenses. Additionally, the credit facility maturity date was
extended by one year to May 31, 2006 and the principal will
amortize in quarterly installments of $5 million beginning in
August 2003.

John T. Raymond, President and Chief Executive Officer, said
"Consistent with the long term strategy that we have previously
articulated to, in effect, re-invest in ourselves, we continue to
execute a very active Treasury Share Program. To this end, since
December 18, 2002, the Company has reduced its fully diluted share
count (per GAAP Treasury method treating the Series D Preferred as
dilutive) by approximately 10%. Additionally, the expanded debt
facility, coupled with the opportunity to retire the Series D
Preferred, further accelerates our long term objectives as we are
able to retire shares more expeditiously against the backdrop of a
very favorable interest rate environment while eliminating the
negative carry associated with the after tax cost of the preferred
dividend.

With the retirement of the Series D Preferred, PLX has a clear,
easily understandable capital structure that, as of June 10, 2003
consists of $60 million of debt, approximately $7.5 million of
cash and 23.5 million fully diluted shares outstanding per the
GAAP Treasury method. Given the long term, enduring nature of the
Treasury Share Program, we will continue to be active in the
market to further reduce the share count as incremental available
cash is generated."

Plains Resources (S&P/BB-/Negative) is an independent energy
company engaged in the acquisition, development and exploitation
of crude oil and natural gas. Through its ownership in Plains All
American Pipeline, L.P., Plains Resources has interests in the
midstream activities of marketing, gathering, transportation,
terminaling and storage of crude oil. Plains Resources is
headquartered in Houston, Texas.


PREMCOR INC: Completes PRG's $300MM 7.5% Senior Notes Offering
--------------------------------------------------------------
Premcor Inc. (NYSE: PCO) announced that its wholly-owned
subsidiary, The Premcor Refining Group Inc., has completed its
offering of $300 million in 7.5% Senior Notes due 2015.  The
Senior Notes were sold at par.  PRG intends to use the net
proceeds of approximately $295 million for capital expenditures,
including an expansion of its Port Arthur, Texas refinery, for
acquisitions, and for working capital and general corporate
purposes.

Thomas D. O'Malley, Premcor's Chairman and Chief Executive
Officer, said, "We are very pleased at the reception our offering
received in the market last week, and at the continuing investor
confidence in our growth strategy that it implies.  Our Port
Arthur expansion project promises strong returns upon its
completion in late 2005, and in the meantime we continue to
examine various acquisition opportunities to further grow the
company and its earnings and cash flow.  We maintain rigorous
discipline on the acquisition front, and continue to view equity
as an important component of any sizable growth financing in the
future."

Premcor Inc. is one of the largest independent petroleum refiners
and marketers of unbranded transportation fuels and heating oil in
the United States.

As reported in Troubled Company Reporter's Monday Edition,
Standard & Poor's Ratings Services assigned its 'BB-' rating to
independent petroleum refiner Premcor Refining Group Inc.'s
proposed $250 million senior unsecured notes due 2015. At the same
time, Standard & Poor's affirmed its ratings on Premcor and parent
Premcor USA Inc.

The outlook has been revised to negative from stable.


QWEST COMMS: Touch America Asks FCC to Reconsider Qwest Order
-------------------------------------------------------------
On June 6th, Touch America Holdings, Inc. (OTC: TCAH) formally
requested the Federal Communication Commission (FCC) to reconsider
its May 5, 2003, order approving the terms of a settlement with
Qwest Communications International, Inc.  The order concluded an
investigation by the FCC's Enforcement Bureau's Investigations and
Hearing Division of Qwest's compliance with the Telecommunications
Act of 1996 and with the terms of previous FCC orders allowing the
merger of Qwest and the former U S West.

Touch America, at the request of the Investigations and Hearing
Division, provided information and comments to aid the
investigation showing that Qwest clearly failed to comply with the
law and with the merger orders.  Touch America's position is that
Qwest's failures clearly caused measurable and material harm to
Touch America.  Indeed, Touch America has a long-standing formal
complaint pending before the FCC regarding Qwest's unlawful
business practices following its merger with U S West that have
made a sham of Qwest's June 2000 divestiture of its interexchange
business to Touch America.

Although the May 5 order finds multiple violations and illegal
acts on Qwest's part that continue to adversely impact Touch
America and others, and despite what Touch America sees as the
direct connection of the investigation's findings and conclusions
to Touch America's FCC sham divestiture complaint, the FCC did not
request or permit Touch America to participate in the consent
decree proceeding that concluded the investigation.

Consequently, Touch America has asked the FCC to reconsider and
reverse its approval of the consent decree, to continue its
investigation of Qwest's actions and violations of law and
regulation, to take up and prosecute Touch America's long pending
sham divestiture complaint, and to revisit its approval of the
merger with U S West as the FCC expressly stated it would do if
evidence showed that there was a "failed divestiture."

Touch America, Inc. is a broadband fiber-optic network and product
and services telecommunications company, providing customized
voice, data and video transport, as well as Internet services, to
wholesale and business customers.  The company provides the latest
in IP, ATM and Frame Relay protocols and private line services for
transporting information with speed, privacy and convenience.
Touch America has approximately 400 employees in 14 states and the
District of Columbia.  Touch America, Inc. is the
telecommunications operating subsidiary of Touch America Holdings,
Inc.  More information can be found at http://www.tamerica.com

Qwest Communications' 7.500% bonds due 2008 (Q08USR3) are trading
at about 93 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=Q08USR3for
real-time bond pricing.


READ-RITE CORP: Defaults on Certain Covenants Under Credit Pact
---------------------------------------------------------------
Read-Rite Corporation (Nasdaq: RDRT) is in default on certain
covenants of its credit agreement with Tennenbaum Capital
Partners. In the company's most recent Form 10-Q filed with the
Securities and Exchange Commission, the company had classified the
debt under the Tennenbaum secured credit facility as short-term
borrowings, due to its anticipated noncompliance with certain
covenants in the third fiscal quarter of 2003. Tennenbaum Capital
Partners has the right to accelerate the maturity date of the
outstanding loan amount, however, as of now, has not done so.

Read-Rite Corporation is one of the world's leading independent
manufacturers of magnetic recording heads, head gimbal assemblies
and head stack assemblies for disk drives and tape drives. The
company is headquartered in Fremont, California and has operations
in Thailand, the Philippines, Japan and Singapore. The company's
home page on the world wide web can be reached at
http://www.readrite.com


RESPONSE BIOMEDICAL: Closes $850K Private Placement Transaction
---------------------------------------------------------------
Response Biomedical Corp., (RBM: TSX Venture Exchange) has closed
the non-brokered private placement announced on April 9, 2003.

The $850,000 non-brokered private placement undertaken by the
Company consists of 1,700,000 units at a price of $0.50 per unit,
each unit consisting of one common share and one-half of one
common share purchase warrant. Each whole warrant shall entitle
the holder thereof to purchase one common share of the Company at
a price of $0.50 per share for a period of 12 months from the
closing date of the private placement, expiring on June 10, 2004.

Capital raised from the private placement will be applied to fund
manufacturing, sales and marketing, clinical trials of CK-MB and
troponin I, product development and related.

Following an increase of its line of credit, announced on
May 13th, the Company also announces an extension. The line of
credit, initially comprised of two facilities expiring on
June 30, 2003 and September 30, 2003 will be extended to June 30,
2004. Related non-transferable warrants will be similarly extended
to June 30, 2004. These include 700,621 warrants priced at $0.45
and 410,426 warrants priced at $0.75 held by Menderes Holding AG,
and 17,196 warrants priced at $0.55 held by Mr. Bill Radvak.
Changes to the Company's line of credit are subject to approval by
the TSX Venture Exchange.

Response Biomedical is a publicly traded company, listed on the
TSX Venture Exchange under the trading symbol "RBM". For further
information, please visit the Company's Web site at
http://www.responsebio.com The company's balance sheet is upside-
down by CDN$1 million at Dec. 31, 2002.


RIBAPHARM: ICN Pharma. Commences Tender Offer for All Shares
------------------------------------------------------------
The Board of Directors of Ribapharm Inc. (NYSE: RNA) announced
that ICN Pharmaceuticals, Inc. (NYSE: ICN) commenced a tender
offer to acquire all of the outstanding shares of common stock of
Ribapharm not already owned by ICN or its affiliates.  Ribapharm's
Board is currently in the process of considering ICN's proposal
and assessing the appropriate course of action that is in the best
interest of Ribapharm and its stockholders.

The Board of Directors of Ribapharm has retained the law firms
Paul, Hastings, Janofsky & Walker LLP and, as special Delaware
counsel, Young Conaway Stargatt & Taylor, LLP, and Morgan Stanley
& Co. Incorporated as its financial advisor, to assist it in the
evaluation of the tender offer.

The Ribapharm Board of Directors strongly recommends that
Ribapharm stockholders defer making a determination whether to
accept or reject ICN's unsolicited tender offer until reading the
Board's solicitation/recommendation statement, which will be
available on or before June 23, 2003.  The Board's
solicitation/recommendation statement will advise stockholders as
to whether Ribapharm (1) recommends the acceptance or rejection of
ICN's tender offer (2) expresses no opinion and remains neutral
towards such tender offer or (3) is unable to take a position with
respect to the tender offer.  The solicitation/recommendation
statement will also advise stockholders of Ribapharm's reasons for
the position taken by Ribapharm with respect to the tender offer.

Ribapharm, whose March 31, 2003 balance sheet shows a total
shareholders' equity deficit of about $335 million, is a
biopharmaceutical company that seeks to discover, develop, acquire
and commercialize innovative products for the treatment of
significant unmet medical needs, principally in the antiviral and
anticancer areas.


SAFETY-KLEEN: Seeks 8th Open-Ended Solicitation Period Extension
----------------------------------------------------------------
Safety-Kleen Corp. and its subsidiary and affiliate debtors ask
Judge Walsh to further extend their exclusive solicitation period
until plan confirmation.

To recall, on April 25, 2003, the Debtors sent a notice
rescheduling the confirmation hearing to August 1, 2003.
Subsequently, on May 4, 2003, the Debtors announced that they had
voluntarily extended until July 25, 2003, the period of time for
their prepetition lenders to cast their votes with respect to the
Debtors' Plan.

The Exclusive Periods are intended to afford Chapter 11 debtors a
full and fair opportunity to rehabilitate their business and to
negotiate and propose a reorganization plan -- without the
deterioration and disruption of their business that might be
caused by the filing of competing reorganization plans by non-
debtor parties.  Section 1121(d) of the Bankruptcy Code provides
that the Court may extend the Exclusive Periods "for cause" upon
request of a party-in-interest after notice and a hearing.  As
"cause," the Debtors cite their substantial progress during the
past ten months towards their rehabilitation and exit from
bankruptcy.  This progress includes:

        (i) entering into a settlement agreement with the South
            Carolina Department of Health and Environmental
            Control that resolved significantly all of DHEC's
            claims, including DHEC's motion asserting that it
            should be allowed an administrative claim exceeding
            $111,000,000 to be used by DHEC towards any
            remediation of any releases of hazardous constituents
            from the Debtors' Pinewood facility during the 100
            years following the closure of that facility;

       (ii) entering into a settlement agreement with Laidlaw
            Inc. and its affiliated debtors resolving Laidlaw's
            $6,500,000,000 claim against the Debtors, the
            Debtors' claims against Laidlaw, claims by the
            Debtors' secured lenders for $6,300,000,000 against
            Laidlaw, and claims by certain officers and directors
            of each company against the other company, with the
            result that SKC would be given, under the Laidlaw
            plan of reorganization, an allowed, general unsecured
            claim for $225,000,000; and

      (iii) negotiating with the Creditors' Committee and the
            prepetition lenders the settlement of the adversary
            complaint filed by the Creditors' Committee, which
            sought to avoid over $1,800,000,000 in prepetition
            liens, security interests, and transfers granted to
            the prepetition lenders as fraudulent conveyances
            under applicable state law.

Due to their success in reaching these settlements, the Debtors
have paved the road to a consensual plan of reorganization.  The
Debtors have also made significant progress towards rehabilitation
during the past year, like:

        (a) streamlining operations and entering into various
            outsourcing agreements, including the licensing and
            installing of financial software to improve their
            operation processes and reduce current and future
            operating costs;

        (b) seeking and obtaining the approval of additional
            postpetition financing;

        (c) disposing of certain significant assets, including
            the divestiture of the Debtors' Chemical Services
            Division;

        (d) objecting to and resolving numerous claims to
            determine the actual amount of allowed claims and
            the potential recovery by the creditors; and

        (e) relocating the Debtors' corporate headquarters to
            Plano, Texas.

In determining whether cause exists to extend the Exclusive
Periods, the Court may examine, among others, these factors:

        (a) the size and complexity of the case;

        (b) the existence of an unresolved contingency and the
            need to resolve claims that may have a substantial
            effect on a plan;

        (c) the Debtors' progress in resolving issues facing
            their estates; and

        (d) whether an extension of time will harm the Debtors'
            creditors.

The Debtors submit that an additional extension of the
Solicitation Period is entirely justified in the Debtors' cases
because:

        (a) the Debtors have filed their Plan;

        (b) the Debtors have made significant progress in
            resolving the many complex issues facing
            their estates;

        (c) the Debtors' cases are large and complex; and

        (d) extension of the Solicitation Period will
            facilitate reorganization of the Debtors and not
            prejudice any party-in-interest.

While the Court has yet to approve the terms of the DHEC
Settlement, the terms of the settlement are incorporated in the
revised Plan, and the approval of the settlement pursuant to Rule
9019 of the Federal Rules of Bankruptcy Procedure will occur upon
plan confirmation.

The Court will convene a hearing on July 7, 2003 at 10:00 a.m. to
consider the Debtors' request.  By application of Del.Bankr.LR
9006-2, the Debtors' exclusive solicitation period is
automatically extended through the conclusion of that hearing.
(Safety-Kleen Bankruptcy News, Issue No. 58; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


SAMSONITE CORP: Reports Improved First Quarter Earnings Results
---------------------------------------------------------------
Samsonite Corporation (OTC Bulletin Board: SAMC) reported revenue
of $161.9 million, operating income of $10.4 million and net loss
to common stockholders of $15.6 million for the quarter ended
April 30, 2003. These results compare to revenue of $160.5
million, operating income of $2.5 million and net loss to common
stockholders of $22.3 million for the first quarter of the prior
year. First quarter results were helped by the strong Euro
currency. In local currency, European sales declined by 10.0% from
last year; Americas division sales declined by 9.8% from last
year; and Asian sales increased 7.6%.

Operating income for the prior year reflects an asset impairment
charge of $0.3 million, a charge of $2.2 million for restructuring
the Company's Mexico City facility and restructuring expenses of
$2.6 million associated with the Company's restructuring
activities. The accrual of preferred stock dividends in arrears of
$11.6 million for the quarter is also reflected in the net loss to
common stockholders.

Adjusted EBITDA (earnings before interest expense, taxes,
depreciation, amortization, and minority interest, adjusted for
certain items management believes should be excluded in order to
reflect recurring operating performance including restructuring
charges and expenses), a measure of core business cash flow, was
$14.8 million for the first quarter compared to $12.3 million for
the first quarter of the prior year.

Chief Executive Officer, Luc Van Nevel, stated: "The Company had a
good quarter despite the slowdown in the European and U.S.
economies and weak travel statistics. The cost saving
restructuring initiatives undertaken over the past few years are
enabling us to improve EBITDA on lower sales levels. As previously
announced, the amendment to extend the Company's existing senior
credit facility became effective on May 29, 2003. This will enable
the Company to bridge our short-term working capital liquidity
requirements until our recapitalization plan is funded during the
third quarter, at which time the Company intends to execute a new
long-term senior credit facility."

Rick Wiley commented on the first quarter performance: "The end of
the war in Iraq and the passage of the economic stimulus package
in the U.S. are positive factors which will hopefully get the U.S.
and European economies moving forward and accelerate the recovery
of the travel industry."

Addressing the Company's progress on its recapitalization plan,
Mr. Van Nevel stated: "Our recapitalization plan continues to
progress towards a third quarter closing. The progress made at the
end of May in reaching agreement in principle with the PBGC was a
very significant milestone toward completing the recapitalization.
We are now in the process of preparing and filing all the various
regulatory and public documents required."

The recapitalization transaction remains subject to numerous other
customary conditions, and no assurance can be given that these
conditions will be satisfied or that the recapitalization will
ultimately be consummated.

Samsonite is one of the world's largest manufacturers and
distributors of luggage and markets luggage, casual bags, business
cases and travel-related products under brands such as
SAMSONITE(R), AMERICAN TOURISTER(R), LARK(R), HEDGREN(R),
LACOSTE(R) and SAMSONITE(R) black label.

                         *   *   *

As reported in the May 8, 2003, issue of Troubled Company
Reporter, the ratings of Samsonite Corporation were affirmed by
Moody's Investors Service. Outlook for the ratings was changed
to developing from negative due to the company's planned
recapitalization pact that could sizably reduce the company's
debts and refinance its current debt facility.

                      Affirmed Ratings

   * B3 - Senior implied rating;

   * B2 - $70.0 million senior secured revolving credit facility
          due in June 2004;

   * B2 - $35.2 million senior secured European term loan
          facility due June 2004;

   * B2 - $46.2 million senior secured U.S. term loan facility
          due June 2005;

* Caa2 - $322.8 million 10-3/4% senior subordinated notes due
           June 2008;

    * C - $309.1 million 13-7/8% senior redeemable preferred
          stock due June 2010;

* Caa1 - Senior unsecured issuer rating.


SHOPKO STORES: Names Steve Andrews as SVP Law & Human Resources
---------------------------------------------------------------
ShopKo Stores, Inc. (NYSE: SKO) announced the promotion of Steven
R. Andrews to senior vice president, law and human resources.
Andrews joined ShopKo in October 2002 as senior vice president,
general counsel and, with this promotion, assumes responsibility
for the company's human resources function.

"Jointly dedicating his expertise in law and human resources will
further complement our management team and additionally strengthen
our company," said Jeffrey Girard, ShopKo vice chairman, finance
and administration.

Prior to joining ShopKo, Andrews, 50, served as senior vice
president, general counsel and secretary of PepsiAmericas, Inc.
(formerly Whitman Corporation), Rolling Meadows, Ill., the second
largest bottler of Pepsi-Cola products, with operations in 18
states and foreign locations.  Before joining Whitman, Andrews was
the interim president and chief executive officer of
Multigraphics, Inc., Mt. Prospect, Ill., a manufacturer and
distributor of graphic arts and printing products.  Prior to his
interim CEO assignment at Multigraphics, Inc., Andrews supervised
the law department and the corporate human resources function.

Earlier in his career, Andrews clerked for the Hon. Donald R. Ross
on the U.S. Court of Appeals for the Eighth Circuit and was a
special assistant to William H. Webster, director of the Federal
Bureau of Investigation.  Andrews received his bachelors and law
degrees from the University of Nebraska.

ShopKo Stores, Inc., a Fortune 500 company headquartered in Green
Bay, Wis., is a customer-driven retailer of quality goods and
services in two distinct market environments.  The company
operates 363 stores in 23 states throughout the Midwest, Western
Mountain and Pacific Northwest.  One hundred forty-one multi-
department ShopKo stores are located in mid-sized to larger cities
and 222 convenient one-stop Pamida stores provide Hometown Values
to customers in smaller communities of rural America.  For more
information about ShopKo or Pamida visit http://www.shopko.com

As previously reported, Fitch Ratings affirmed its ratings on
Shopko Stores Inc.'s bank credit facility at 'BB-' and senior
notes at 'B'. The Rating Outlook remains Negative, reflecting the
company's weakened financial profile and competitive challenges
longer term. Approximately $550 million of debt is affected.


SPIEGEL GROUP: DIP Financing Details Revealed in Final Documents
----------------------------------------------------------------
The Spiegel Group and its debtor-affiliates delivered an executed
copy of the DIP Financing Agreement to the Securities and Exchange
Commission under cover of a Form 8-K.  A full-text copy of the
executed AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT Dated as
of May 2, 2003, is available at no charge at:


http://www.sec.gov/Archives/edgar/data/276641/000095013103003010/dex101.txt

The document relates many important details not made public in the
initial drafts of the loan documents:

Financial Covenants:

      Sec. 9.37 requires that the Company maintain a minimum of
                $35,000,000 of availability under the DIP Loan
                Facility, thus blocking the Company's ability to
                borrow those funds.

      Sec. 9.38 limits the Debtors' Capital Expenditures to:

                    For the Period       Maximum CapEx
                    --------------       -------------
                   Fiscal Year 2003       $50,000,000
                   Fiscal Year 2004        60,000,000
                   Fiscal Year 2005        15,000,000

Operating Covenants:

      Sec. 9.34 requires that Spiegel continue to employ Alvarez &
                Marsal or another restructuring advisor reasonably
                acceptable to the Agent.

      Sec. 9.36 requires that the Debtors keep all sourcing
                arrangements in place to maintain an uninterrupted
                flow of Inventory from overseas that's sufficient
                for the U.S. Borrowers and Eddie Bauer Canada to
                maintain Inventory levels on which their financial
                projections are based.

DIP Financing Orders:

     Full-text copies of Judge Blackshear's Interim and Final DIP
     Financing Orders are attached to the Loan Agreement as
     Exhibits A-1 and A-2.

Borrowing Base:

     As of May 2, 2003, Spiegel's borrowings are subject to a
     $227,450,000 cap imposed by the Borrowing Base computed on an
     entity-by-entity basis as shown in a Borrowing Base
     Certificate attached to the DIP Loan Agreement as Exhibit B.

     Consolidated inventory availability, for purposes of
     computing the Borrowing Base, is equal to the lesser of (a)
     65% of consolidated net eligible inventory valued at lower of
     cost or market value or (b) the sum of each subsidiary's
     inventory availability, being 85% of eligible inventory
     valued at its appraised Orderly Liquidation Percentages
     (Eddie Bauer and Eddie Bauer Canada - 84%; Spiegel - 58.3%
     and Newport News - 50.1%).

2003 Financial Projections:

      The Debtors' financial projections for the 2003 calendar
      year are attached to the DIP Loan Agreement at Exhibit H.
      Those projections include:

           * Spiegel Groups' Assumptions on which the Projections
             are based;
           * Month-by-month Balance Sheets showing no material
             change in the company's financial condition over the
             next year;
           * Month-by-month Cash Flow Forecasts;
           * Month-by-month changed in the DIP Loan Borrowing
             Base;
           * Excess DIP Loan Availability computations;
           * Month-by-month Summary Consolidated P&L Forecasts
             showing a cumulative $1.5 million EBITDA loss in
             2003;
           * Month-by-month Summary Newport News P&L Forecasts
             showing a cumulative $9.3 million EBITDA loss in
             2003;
           * Month-by-month Summary Spiegel P&L Forecasts showing
             a cumulative $40 million EBITDA loss in 2003;
           * Month-by-month Summary Eddie Bauer P&L Forecasts
             showing $77.7 million in cumulative EBITDA for 2003;
           * Month-by-month Summary Corporate P&L Forecasts
             showing a cumulative $23.8 million EBITA loss in
             2003; and
           * Coverage Ratio computations showing that $9.2 million
             of interest obligations are covered by $25.6 million
             of adjusted EBITDA by a 280% margin.

Other Disclosures:

      Other disclosures are incorporated into the DIP Loan
      Agreement:

        SCHEDULE l.l(c)     provides a list of the MAJOR CREDIT
                            CARD PROGRAM AGREEMENTS to which the
                            Debtors are a party.

        SCHEDULE 6.1(a)(xv) provides a list of all COMMERCIAL TORT
                            CLAIMS (lawsuits) in which the Debtors
                            may recover money.

        SCHEDULE 6.3        provides a detailed borrower-by-
                            borrower listing of the CHIEF
                            EXECUTIVE OFFICE, THE LOCATION OF ITS
                            BOOKS AND RECORDS, THE LOCATIONS OF
                            THE COLLATERAL AND PLACES OF BUSINESS.

        SCHEDULE 6.17       provides a detailed listing of all
                            INTELLECTUAL PROPERTY the Debtors own
                            around the globe.

        SCHEDULE 8.5        provides a complete listing of all of
                            the Debtors' SUBSIDIARIES AND
                            AFFILIATES.

        SCHEDULE 8.11       provides a detailed listing of all of
                            the Borrowers' OWNED REAL PROPERTY.

        SCHEDULE 8.12       provides a detailed listing of all
                            LEASES to which the Borrowers are a
                            party as of March 17, 2003.

        SCHEDULE 8.15       provides a detailed listing of all
                            LITIGATION potentially adverse to the
                            Borrowers.

        SCHEDULE 8.28       provides a listing of various MATERIAL
                            AGREEMENTS to which the Borrowers are
                            a party.

        SCHEDULE 8.29       provides a detailed listing of the
                            Borrowers' BANK ACCOUNTS.

        SCHEDULE 9.12       discloses GUARANTIES the Borrowers
                            signed.

        SCHEDULE 9.15       discloses various TRANSACTIONS WITH
                            AFFILIATES, including JOINT VENTURE
                            AGREEMENTS, BUYING AGENCY AGREEMENTS,
                            SUBLICENSE AGREEMENTS WITH OTTO-
                            VERSAND (GMBH & CO.), LICENSE
                            AGREEMENTS WITH OTTO-VERSAND (GMBH &
                            CO) OR OTTO AFFILIATES and other
                            GUARANTIES AND LOAN AGREEMENTS.

        SCHEDULE 9.19(a)
           and
        SCHEDULE 9.19(b)    provide, as of March 17, 2003, a
                            detailed listing of all EXISTING LIENS
                            against the Borrowers' property.

Maturity Date:

      Subject to confirmation of a plan or an event of default,
      the DIP Facility provides continued working capital
      financing to the Debtors through March 17, 2005. (Spiegel
      Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service,
      Inc., 609/392-0900)


STEWART ENTERPRISES: Reduces Net Debt Below $500MM at June 4
------------------------------------------------------------
Stewart Enterprises, Inc. (Nasdaq NMS: STEI) reported its results
for the second quarter of fiscal year 2003. The Company reported
net earnings for the quarter and six months ended April 30, 2003
of $9.5 million and $19.0 million, respectively. The Company also
announced that in May of 2003, it received $23 million in tax
refund proceeds related to the sale of its foreign operations. The
Company used the proceeds along with cash on hand to reduce its
debt to $517 million as of June 4, 2003. The Company's net debt as
of June 4, 2003 was approximately $488 million (total debt less
cash and marketable securities of approximately $29 million).

William E. Rowe, President and Chief Executive Officer stated, "We
are pleased with our second quarter performance, the further
reduction in our debt, and recent improvements in some of the
trends impacting our Company and our industry. Beginning in April
and continuing into May, consumer confidence levels improved from
their 10-year lows of February and March. Although confidence
levels remained low during most of our second quarter, preneed
sales increased in the quarter. We remain cautiously optimistic as
we monitor this possible trend and other indicators that the
economy may be improving, such as the performance of the stock
market. The Dow Jones Industrial Average is up 6 percent this
calendar year through May, and in the same time period, our trust
portfolio, including unrealized gains and losses, is up nearly 7
percent, driven by strong performance in April and May. As the
market continues to recover, we expect our portfolio performance
to follow."

The Company experienced a $4.2 million decrease in funeral
revenues from its operations to be retained for the second quarter
of 2003 compared to the second quarter of 2002. This decrease was
driven by a 6.5 percent decrease in the number of funeral calls
performed by operations to be retained, partially offset by a 1.3
percent increase in the average revenue per funeral call. For the
three months ending April 30, 2003, cremations represented 39.4
percent of funerals performed by operations to be retained,
compared to 38.7 percent in the prior year.

Mr. Rowe stated, "Our funeral businesses continue to do a good job
with regard to average revenue increases. For the first six months
of fiscal year 2003, the growth in average revenue per cremation
service performed was up 3.4 percent and the growth in average
revenue per traditional funeral was up 2.4 percent. Trust earnings
are recognized as funeral revenue when the related preneed
funerals are delivered out of our backlog. A year over year
reduction in funeral trust earnings, coupled with the increase in
the proportion of our funerals that are cremations, reduced the
overall average revenue per call increase to 1.3 percent for the
period. Trust earnings recognition in fiscal year 2003 is lower
than in the prior year due to the lower investment returns
realized on our preneed trust funds during the last few years."

The Company tracks its at-need sales by market and regularly
compares its performance with data from a variety of sources to
gauge changes in market share. The most comprehensive of these
sources is the information published by the Centers for Disease
Control and Prevention, but the Company also gathers data from
local government agencies, the obituaries published in local
newspapers in the communities where the Company's facilities are
located, certain industry vendors and information published by
other publicly-traded death care companies.

Mr. Rowe continued, "As we look at the data from a variety of
sources to gauge changes in market share, all indicators point to
a decline in the number of deaths in our markets during the
quarter. We expect to eventually see more normalized mortality
trends and we anticipate improvement in our at-need results when
that occurs. Although not yet necessarily an indication of a
trend, our preliminary results for the month of May indicate that
events appear to be increasing for the early part of our third
quarter."

The Company typically reports on the CDC's national data, rather
than the data for the cities in which the Company's facilities are
located, because the CDC's individual market data is not available
for all the markets in which the Company operates and the national
data tends to be fairly consistent with the other sources of
information used by the Company. During the three months ended
April 30, 2003, the national data reported by the CDC indicated a
decrease in the number of deaths of 0.8 percent compared to the
prior year. This 0.8 percent decrease was inconsistent with CDC
data for the 31 cities in which the Company operates and for which
the CDC compiles data (approximately 50 percent of the Company's
calls are derived from these 31 cities), and inconsistent with
data gathered by the Company from other sources. In fact, the
local market data reported by the CDC for these 31 cities,
adjusted for weeks with incomplete statistics, indicates a 6.5
percent decrease in the number of deaths, compared to a 6.8
percent decrease in funeral calls performed by the Company's
businesses in these 31 cities.

The Company has consistently acknowledged that the comparability
of its funeral calls to the CDC data is limited, as reports from
the state health departments are often delayed and inconsistent,
and the 122 cities reporting to the CDC are not necessarily
comparable with the markets in which the Company operates.
Nonetheless, CDC data is the only available comprehensive data of
its kind and continues to be a valuable resource for the Company.

Mr. Rowe added, "With the number of markets we serve, there will
always be some markets that are up, and a few that are down. In
fact, two-thirds of the reduction in calls for the quarter can be
attributed to 20 of our 301 funeral homes. As we have stated in
the past, the data we use to track our local funeral markets
suggest that there is some market share erosion in selected
locations. However, there are also some areas where we have gained
market share from competitors. We use this market-specific and
rooftop-specific information to manage our businesses and to
target opportunities for performance improvement."

Cemetery revenues from operations to be retained decreased by $1.3
million in the second quarter of fiscal year 2003 compared to the
second quarter of fiscal year 2002. The decrease in revenue is
primarily due to a reduction in at-need cemetery events, driven by
a decline in the number of deaths in the Company's cemetery
markets. The decline in cemetery events is in line with the
decline in funeral events experienced by the Company's funeral
homes.

Mr. Rowe stated, "We had a good quarter with regard to preneed
sales. When compared to the first quarter of this year, preneed
cemetery property sales increased significantly, along with
preneed merchandise and preneed funeral sales. When compared to
the second quarter of last year, cemetery property sales improved,
although our reported cemetery revenue was down slightly for the
quarter due primarily to the decline in deaths. Nonetheless, we
are pleased with the performance of our cemetery segment for the
quarter. When compared to our first quarter, our domestic cemetery
margins improved 240 basis points from 22.5 percent to 24.9
percent. Due to the fixed cost nature of the cemetery business,
the improved cemetery property sales had a substantial positive
impact on our margins. Had deaths returned to normal and cemetery
events materialized, our margins would have been even better."

The Company announced that cash flow from operations for the
quarter and six months ended April 30, 2003 was $25.8 million and
$18.1 million, respectively, and free cash flow was $21.7 million
and $11.1 million, respectively.

Kenneth C. Budde, Chief Financial Officer, stated, "Cash flow from
operations decreased $14 million for the first six months of 2003
compared to the same period in 2002, primarily due to an $11
million reduction in earnings before taxes. Additionally, through
the first six months of 2003, we paid about $3 million in federal
taxes; in 2002, we were not required to use any of our cash flow
to pay federal taxes in the first six months due to a 2001 federal
tax refund that was applied to our 2002 estimated tax payments."

On May 1, 2003, the Company announced that it had redeemed its
$99.9 million outstanding Remarketable Or Redeemable Securities.
When Banc of America Securities, the remarketing dealer, elected
to remarket the ROARS, the Company exercised its right to redeem
the ROARS rather than allow them to be remarketed. In connection
with the redemption of the ROARS, the Company secured $50 million
of additional Term Loan B financing, which was received prior to
April 30, 2003 and is included in the Company's outstanding debt
and cash as of the end of the second quarter. In May of 2003, the
Company used the $50 million of Term Loan B and $50 million from
the revolver to redeem its outstanding ROARS. As part of the
refinancing transaction, the Company amended the loan covenants
governing its revolving credit and its Term Loan B credit to
provide greater financial flexibility.

In May of 2003, the Company used cash on hand to pay the
remarketing dealer $12.7 million, the contractually specified
value of the remarketing right, which was based on the 10-year
Treasury rate of 3.894 percent. Net of the unamortized portion of
the option premium paid to the Company by Banc of America at the
time of issuance for the right to remarket the ROARS, the Company
will report the charge of $11.3 million ($7.3 million after tax,
or $0.07 per share), in the third quarter of 2003.

As a result of the Company's debt reduction and the refinancing
transaction discussed above, the amount available under the
Company's revolving credit facility increased from $20 million as
of January 31, 2003 to $95 million as of June 4, 2003.

Mr. Rowe stated, "We are reviewing a few acquisition prospects. We
are also planning to construct funeral homes on one or two of our
own cemeteries, and we are in discussions with third parties
considering combination funeral homes on their cemeteries. Our
experience with our combination operations and the development of
the Catholic Mortuaries in Los Angeles have been very positive,
and we look forward to building similar successes in the future
using our free cash flow."

Mr. Rowe concluded, "We are delighted to have reduced our net debt
to $488 million. We remain focused on preneed sales growth, market
performance, debt reduction, at-need sales and our growth
strategies. Although we continue to face challenges from external
factors, the unwavering commitment of our employees to exceed the
expectations of our customers with regard to caring, personalized
service, high quality facilities and real and perceived value in
our offerings will ensure our long-term success."

             Second Quarter Results For Total Operations

-- The Company reported net earnings of $9.5 million, compared to
   net earnings of $12.9 million in the second quarter of 2002.

-- Total funeral revenues decreased $15.1 million to $75.8
   million, primarily due to the disposition of the Company's
   foreign operations in 2002 and the decline in the number of
   funeral services performed.

-- Total cemetery revenues decreased $2.5 million to $57.6
   million, primarily due to a decline in families served in the
   Company's cemeteries resulting from a decline in the number of
   deaths in the second quarter of 2003 and the disposition of the
   Company's foreign operations in 2002. The Company realized an
   annual average return of 4.6 percent in its perpetual care
   trust funds during the second quarter of 2003 compared to 4.2
   percent in the comparable period of 2002.

-- Operating earnings decreased $7.3 million to $28.7 million,
   primarily due to the disposition of the Company's foreign
   operations in 2002 and a reduction in funeral revenue in the
   second quarter of 2003.

-- EBITDA was $42.6 million compared to $51.2 million for the
   second quarter of 2002. The reduction was primarily due to the
   disposition of the Company's foreign operations in 2002 and a
   reduction in domestic operating earnings in the second quarter
   of 2003.

-- Depreciation and amortization was $13.7 million compared to
   $14.5 million for the corresponding period in 2002.

-- Interest expense decreased $2.3 million to $13.6 million due to
   a $125.9 million decrease in the average debt outstanding
   during the second quarter of 2003 compared to the second
   quarter of 2002.

             Year-To-Date Results For Total Operations

-- The Company reported net earnings of $19.0 million, compared to
   net earnings of $25.6 million for the six months ended
   April 30, 2002.

-- Total funeral revenues decreased $33.4 million to $152.5
   million, primarily due to the disposition of the Company's
   foreign operations in 2002 and the decline in the number of
   funeral services performed.

-- Total cemetery revenues decreased $6.6 million to $112.0
   million, primarily due to the disposition of the Company's
   foreign operations in 2002, a decline in perpetual care trust
   earnings and the decrease in families served in the Company's
   cemeteries resulting from a decline in the number of deaths.
   The Company realized an annual average return of 4.4 percent in
   its perpetual care trust funds for the first six months of 2003
   compared to 6.5 percent in the comparable period of 2002.

-- Operating earnings decreased $17.4 million to $55.8 million,
   primarily due to the disposition of the Company's foreign
   operations in 2002 and a reduction in funeral gross profit
   during the six months ended April 30, 2003.

-- EBITDA was $84.9 million compared to $102.0 million for the
   first six months of 2002. The reduction was primarily due to
   the disposition of the Company's foreign operations in 2002 and
   a reduction in domestic operating earnings during the six
   months ended April 30, 2003.

-- Depreciation and amortization was $27.1 million for the first
   six months of 2003, compared to $28.0 million for the
   corresponding period in 2002.

-- Interest expense decreased $5.7 million to $27.1 million due to
   a $133.7 million decrease in the average debt outstanding
   during the six months ended April 30, 2003 compared to the six
   months ended April 30, 2002.

     Second Quarter Results For Operations To Be Retained

-- Funeral revenues decreased $4.2 million to $75.4 million
   compared to the second quarter of 2002, principally due to a
   6.5 percent decrease in the number of services performed, and
   reduced year over year trust earnings recognized upon the
   delivery of preneed funerals. Trust earnings recognition in
   fiscal year 2003 is lower than in the prior year due to lower
   investment returns realized on the Company's preneed funeral
   trust funds during the last few years.

-- The cremation rate for these businesses was 39.4 percent for
   the second quarter of 2003 compared to 38.7 percent for the
   second quarter of 2002.

-- Cemetery revenues decreased $1.3 million to $57.4 million,
   primarily due to the decline in families served in the
   Company's cemeteries resulting from a decline in the number of
   deaths.

-- Funeral margins were 24.6 percent compared to 29.4 percent for
   the same period in 2002. The decrease was primarily due to an
   increase in insurance costs combined with the decrease in
   funeral revenue discussed above.

-- Cemetery margins were 25.0 percent compared to 25.4 percent for
   the same period in 2002. The decrease was primarily due to an
   increase in insurance costs combined with the decrease in
   cemetery revenue discussed above.

-- For the quarter, domestic operating earnings, which is
   representative of operations to be retained, decreased $5.5
   million from $34.2 million in 2002 to $28.7 million in 2003,
   primarily due to a reduction in funeral revenue in the second
   quarter of 2003.

-- Domestic EBITDA, which is representative of operations to be
   retained, was $42.6 million, representing 31.9 percent of
   domestic revenue, compared to $48.9 million, or 35.0 percent,
   in the second quarter of fiscal year 2002. The reduction was
   primarily due to a decrease in earnings from operations to be
   retained.

       Year-To-Date Results For Operations To Be Retained

-- Funeral revenues decreased $5.9 million to $151.4 million
   compared to the first six months of 2002, principally due to a
   4.0 percent decrease in the number of services performed, and
   reduced trust earnings recognized upon the delivery of preneed
   funerals. Trust earnings recognition in fiscal year 2003 is
   lower than in the prior year due to lower investment returns
   realized in the Company's preneed funeral trust funds during
   the last few years.

-- The cremation rate for these businesses was 39.2 percent for
   the first six months of 2003 compared to 38.3 percent for the
   first six months of 2002.

-- Cemetery revenues decreased $4.1 million to $111.6 million,
   principally due to a decline in perpetual care trust earnings
   and a decline in families served in the Company's cemeteries
   resulting from a decline in the number of deaths.

-- Funeral margins were 25.0 percent compared to 29.9 percent for
   the same period in 2002. The decrease is due primarily to an
   increase in insurance and other costs, combined with a decrease
   in funeral revenue as discussed above.

-- Cemetery margins were 23.8 percent compared to 25.8 percent for
   the same period in 2002. The decrease is due primarily to an
   increase in insurance costs, combined with a decrease in
   cemetery revenue as discussed above.

-- For the six months, domestic operating earnings, which is
   representative of operations to be retained, decreased $13.2
   million from $69.0 million in 2002 to $55.8 million in 2003,
   primarily due to a reduction in funeral gross profit during the
   six months ended April 30, 2003.

-- Domestic EBITDA, which is representative of operations to be
   retained, was $84.9 million, representing 32.1 percent of
   domestic revenue compared to $96.6 million, or 35.0 percent,
   for the first six months of fiscal year 2002. The reduction was
   primarily due to a decrease in earnings from operations to be
   retained.

      Second Quarter Results For Existing (Core) Operations

-- The Company experienced a 6.6 percent decrease in the number of
   funeral calls performed by businesses it has owned and operated
   for all of this fiscal year and last, and which it plans to
   retain, partially offset by a 1.3 percent increase in the
   average revenue per funeral call performed by these businesses.

-- Data obtained from the CDC indicates a decrease in the number
   of deaths across the country of 0.8 percent during the
   Company's second quarter compared to the same period in 2002.

      Year-To-Date Results For Existing (Core) Operations

-- The Company experienced a 4.2 percent decrease in the number of
   funeral calls performed by businesses it has owned and operated
   for all of this fiscal year and last, and which it plans to
   retain, partially offset by a 1.3 percent increase in the
   average revenue per funeral call performed by these businesses.

-- Data obtained from the CDC indicates a decrease in the number
   of deaths across the country of 1.3 percent during the
   Company's six months ended April 30, 2003 compared to the same
   period in 2002.

    Cash Flow Results And Debt Reduction For Total Operations

-- Cash flow from operations for the quarter ended April 30, 2003
   was $25.8 million, and free cash flow was $21.7 million (See
   table under "Reconciliation of Non-GAAP Financial Measures").

-- Cash flow from operations for the six months ended April 30,
   2003 was $18.1 million, and free cash flow was $11.1 million.

-- As of April 30, 2003, the Company reported outstanding debt of
   $594 million and reported cash and marketable securities of $86
   million.

-- The Company secured an additional $50 million of Term Loan B
   debt prior to April 30, 2003, which is included in its debt and
   cash balances. On May 1, 2003, the Company used the $50 million
   of Term Loan B and $50 million from its revolver to redeem its
   outstanding ROARS.

-- As of June 4, 2003, outstanding debt was $517 million, and cash
   and marketable securities were approximately $29 million.

Founded in 1910, Stewart Enterprises is the third largest provider
of products and services in the death care industry in the United
States, currently owning and operating 301 funeral homes and 149
cemeteries. Through its subsidiaries, the Company provides a
complete range of funeral merchandise and services, along with
cemetery property, merchandise and services, both at the time of
need and on a preneed basis. For the first six months of fiscal
year 2003, funeral operations accounted for approximately 57.7
percent of the Company's total revenues, and cemetery operations
accounted for the remaining 42.3 percent. The Company's funeral
homes offer a wide range of services and products including
funeral services, cremation, transportation services, removal and
preparation of remains, caskets and flowers. Its cemetery
operations sell cemetery property, merchandise and services.
Cemetery property includes lots, lawn crypts, and family and
community mausoleums. Cemetery merchandise includes vaults,
monuments and markers. Cemetery services include burial site
openings and closings and inscriptions.

As reported in Troubled Company Reporter's May 20, 2003 edition,
Fitch Ratings withdrew the 'BB+' rating assigned to Stewart
Enterprises, Inc.'s 6.40% remarketable or redeemable securities
due May 1, 2013 due to the redemption of this issue. On May 1,
2003 Stewart announced that it exercised its right to redeemed the
$99.9 million outstanding ROARS rather than allow them to be
remarketed. Stewart's senior secured debt rating is 'BB+' and
senior subordinated notes rating is 'BB-'. The Rating Outlook is
Stable.


TOUCHTUNES MUSIC: Converts Major Shareholder Loans to Preferred
---------------------------------------------------------------
TouchTunes Music Corporation (OTC Bulletin Board: TTMC), the
world's leading provider of interactive music- on-demand digital
jukeboxes, completed a capital restructuring providing for the
conversion of certain principal stockholders' loans and accrued
preferred stock dividends into a new series of preferred stock.

As a result of this transaction, unsecured loans to principal
stockholders totaling $5,325,000 and dividends and accretion due
on Class B Preferred stock totaling $10,982,000 have been
converted into Class C Preferred stock with an issuance price of
$12,500,000. The conversion of the principal amount of such
unsecured loans reduces the Company's total liabilities by
$5,325,000 and relieves the Company of interest payments at an
annual rate of 20 percent that would have accrued under such
loans. If the financial restructuring had been completed as of
March 31, 2003, the Company's stockholders' equity would have
amounted to $9,118,000, an increase of $36,307,000.

TouchTunes' March 31, 2003 balance sheet (prior to financial
restructuring) shows a total shareholders' equity deficit of about
$27 million.

John Perrachon, President and Chief Executive Officer of
TouchTunes, stated: "The Company is pleased to be able to announce
this capital restructuring with its principal stockholders. Our
principal stockholders, through these actions, have once again
demonstrated their strong support for the Company and the path it
is following. This solid display of confidence is a clear message
to all of our stakeholders that TouchTunes is indeed a force to be
reckoned with. The impact of this restructuring on the Company's
equity as a result of the conversion of stockholder loans and
Preferred B accretion and dividends when combined with the
elimination of future interest on the unsecured loan from
principal shareholders provides the Company with a very attractive
balance sheet. We believe that this simplification of the balance
sheet should assist the Company should it decide to raise
additional financing in the future".

The Series C Preferred Stock has an issuance price of $0.50 per
share and a liquidation preference over the Series A Preferred
Stock, Series B Preferred Stock and Common Stock equal to the
issuance price (as may be adjusted for stock splits, dividends,
combinations or other recapitalizations with respect to such
shares). The Series C Preferred Stock shall not be entitled to
voting rights, dividend rights or redemption rights.

The Board of Directors and the requisite number of stockholders of
the Company have approved amendments to the Company's Second
Amended and Restated Articles of Incorporation necessary to effect
this capital restructuring. The impact of these amendments and the
issuance of the Series C Preferred Stock is to:

(1) increase the aggregate number of authorized shares of Common
    Stock from 50,000,000 shares to 100,000,000 shares;

(2) create a new class of authorized preferred stock, consisting
    of 30,000,000 authorized shares of Series C Preferred Stock,
    par value $0.001, of which 25,000,000 are currently
    outstanding as a result of the capital restructuring;

(3) reduce the exercise price of the Series A Preferred Stock and
    Series B Preferred Stock to the $0.50 per share conversion
    price of the Series C Preferred Stock. As a result, holders of
    Series A and Series B Preferred Stock are now entitled to
    significantly more shares of Common Stock upon conversion,
    which is dilutive to the holders of Common Stock;

(4) remove the right of holders of Series B Preferred Stock to
    receive a cumulative and preferred dividend;

(5) remove the right of holders of Series B Preferred Stock to
    demand redemption by the Company and remove the Company's
    right to redeem the Series B Preferred Stock at its option;
    and

(6) reduce the voting rights of the Series A Preferred Stock and
    Series B Preferred Stock to one vote per each outstanding
    share of Preferred Stock, in lieu of one vote per share of
    Common Stock into which a holder's Preferred Stock could be
    converted.

Under Nevada law, stockholders will not have any dissenter's or
appraisal rights in connection with the Amendments.

TouchTunes is involved in the digital distribution of music
content to interactive, music-on-demand applications. The first
such interactive, music- on-demand application is its digital
jukebox.

TouchTunes is currently the leading provider of interactive,
music-on- demand, digital-downloading jukeboxes to the coin-
operated machine industry across the United States. TouchTunes has
signed agreements with Capitol, BMG, Universal, Warner and their
music subsidiaries, which permit the secure transmission, storing
and playing of digitized copies of music masters on TouchTunes'
central database and throughout its network of digital jukeboxes.
TouchTunes also has signed agreements with various independent
labels such as: Zomba, Jive, Beggars Banquet and Epitaph Records.
TouchTunes is traded on the NASDAQ OTC BULLETIN Board under the
symbol TTMC.


TROLL COMMUNICATIONS: Retains Pepper Hamilton as Special Counsel
----------------------------------------------------------------
Troll Communications LLC and its debtor-affiliates ask for
approval from the U.S. Bankruptcy Court for the District of
Delaware to continue their employment of Pepper Hamilton LLP as
Special Corporate and Transactional Counsel in these chapter 11
cases.

Prior to the Commencement Date, the Debtors retained the services
of Pepper Hamilton in connection with the negotiation and
documentation of a potential sale of the Debtors' assets. In
addition, since its retention, Pepper Hamilton has advised the
Debtors' Board of Directors with respect to certain corporate
issues.

The professional services that Pepper Hamilton will render to the
Debtors include, without limitation:

     i) representation with respect to the negotiation and sale
        of the Debtors' assets;

    ii) documenting any sale transactions; and

   iii) providing the Debtors with continued advice with respect
        to certain corporate issues.

The Debtors assure the Court that the services to be provided by
Pepper Hamilton will not be duplicative of services to be
performed by any other professionals retained by the Debtors in
these Chapter 11 cases.

The attorneys who have recently been active in representing the
Debtors on general corporate matters, and the current hourly
billing rate for each named attorney are:

     Lisa R. Jacobs       Partner, Corporate     $420 per hour
     Brian M. Katz        Partner, Corporate     $340 per hour
     J. Gregg Miller      Partner, Bankruptcy    $420 per hour
     Linda Casey          Associate, Bankruptcy  $255 per hour
     Daniel V. Logue      Associate, Corporate   $225 per hour
     Jennifer D'Andrea    Legal Assistant        $110 per hour

From time to time, additional attorneys may serve the Debtors
during these cases.  The hourly rates of the Firm's professionals
range from

          attorneys           $150 to $550 per hour
          paralegals          $95 to $140 per hour

Troll Communications L.L.C., publishes and distributes books and
other educational materials primarily aimed at the pre-K through
9th grade market.  The Debtors filed for chapter 11 protection on
May 16, 2003 (Bankr. Del. Case No. 03-11508).  Raymond Howard
Lemisch, Esq., at Adelman Lavine Gold and Levin, PC represents the
Debtors in their restructuring efforts. When the Company filed for
protection from its creditors, it listed estimated assets and
debts of over $100 million each.


UNITED AIRLINES: Reaches New Agreement with Skywest Airlines
------------------------------------------------------------
United Airlines (OTC Bulletin Board: UALAQ) has reached a
Memorandum of Understanding with SkyWest Airlines to operate
select portions of the company's United Express service. The new
relationship, in place for 11 years, includes a new rate structure
and allows for the addition of more aircraft to the United Express
fleet.

"This is a great deal for United and SkyWest," said Greg Kaldahl,
director of United Express. "This new agreement strengthens the
relationship already built between United and SkyWest, enhances
the United Express product and provides for better service and a
better flying experience for our customers."

The MOU calls for SkyWest to operate a fleet of 140 aircraft,
including 55 turbo-prop aircraft currently serving the United
Express fleet, 55 50-seat regional jet aircraft which will be in
service by the end of 2003 and 30 70-seat regional jets that are
scheduled to be serving United Express routes by summer 2005. The
agreement also includes an option to operate a significant number
of additional regional jet aircraft.

Terms of the MOU are retroactive to January 1, 2003 and provide a
significant economic benefit to United. A final contract is
subject to approval by the board of directors and senior officers
by both companies and the U.S. Bankruptcy Court.

In 2002, United's employees broke 35 company records and achieved
the best overall operational performance in the company's 77-year
history. United Airlines finished 2002 ranked No. 1 in the
industry in domestic on-time performance among major airlines as
published in the Department of Transportation's Air Travel
Consumer Report for 2002. United operates more than 1,700 flights
a day on a route network that spans the globe. News releases and
other information about United can be found at the company's Web
site at http://www.united.com


UNITED AIRLINES: SkyWest Confirms New Long-Term Agreement
---------------------------------------------------------
SkyWest Airlines, a subsidiary of SkyWest, Inc. (Nasdaq: SKYW),
announces that United Airlines, the world's second largest airline
has selected SkyWest to significantly expand it's regional carrier
service. The two carriers have signed a Memorandum of
Understanding for a long-term 11-year contract, including a multi-
year rate agreement for United Express contract flying. Under the
terms of the agreement, SkyWest will be reimbursed its operating
costs plus a base margin and performance based incentives, similar
to the previous agreement between the parties.

The agreement calls for SkyWest to operate a fleet of 140
aircraft, including 55 turbo-prop aircraft currently serving the
United Express fleet, 55, 50-seat regional jet aircraft which will
be in service by the end of 2003 and 30, 70-seat regional jets
that are scheduled to be serving United Express routes by summer
2005. Additionally, the agreement includes a significant number of
options, which are expected to be a mix of 50 and 70 seat regional
jets and will be determined by United at a later date.

"This new agreement is indicative of a productive and cooperative
relationship between United and SkyWest," said Bradford R Rich,
Executive Vice President, Chief Financial Officer and Treasurer of
SkyWest. "We believe we have helped United achieve their
objectives by providing significant year-over-year rate reductions
that were the result of aggressive cost reduction initiatives at
SkyWest. In return, we have an agreement that enables significant
long-term growth at an acceptable return to our shareholders. That
makes it a great deal for both companies."

The Memorandum of Understanding forms the basis upon which SkyWest
and United will develop a definitive agreement which is subject to
the approval of the Board of Directors of both companies and the
U.S. Bankruptcy Court.

Currently SkyWest operates more than 650 daily flights to 63
cities as United Express out of hubs in Denver, Los Angeles,
Portland, San Francisco, and Seattle. The contract will provide
SkyWest with new opportunities in United's Chicago hub as well as
expanded service in the Denver market.

SkyWest Airlines is the nation's largest independently operated
regional airline and carried 8.23 million passengers last year.
SkyWest operates as United Express, Delta Connection, and
Continental Connection, under marketing agreements with United
Airlines, Delta Air Lines, and Continental Airlines respectively.
SkyWest serves a total of 97 cities in 28 states and two Canadian
provinces and has more than 1,100 daily departures.


UNITED AIRLINES: HSBC Seeks Stay Relief to Make Boston Payments
---------------------------------------------------------------
On November 15, 1999, the Massachusetts Port Authority issued
$80,500,000 in Bonds to finance the construction, modification and
expansion of buildings at Boston-Logan International Airport. HSBC
Bank USA is the Trustee.  The Bonds are named Massachusetts Port
Authority Special Facilities Revenue Bonds (United Airlines, Inc.
Project), Series 1999A.

Mark L. Hebbeln, Esq., at Gardner, Carton & Douglas, tells Judge
Wedoff that HSBC wants to disburse the trust funds in accordance
with the Loan and Trust Agreement.

Under the Agreement, United must make interest payments on the
Bonds every April 1, and October 1, until maturity in 2029.
United's payments are deposited into a Bond Fund, held by the
Trustee, to pay principal and interest on the Bonds.  In addition,
there is a Reserve Fund for the Bondholders' benefit to make
payments on the Bonds if the Funds did not have enough money to
cover all interest and principal due.  The Funds are not held for
use by the Debtors.

According to the Agreement, upon an event of default, which has
occurred, all funds held by the Trustee will be transferred to the
Bond Fund for disbursement in compliance with a special
distribution scheme.  Additionally, United must reimburse the
Trustee for all reasonable fees and expenses incurred in
connection with the Agreement.

HSBC wants assurances from the Court that the terms of the
Agreement are enforced and United is prohibited from using the
money in the Funds.  Also, United should be denied access to the
Funds because the terms of its DIP Financing Commitments preclude
the provision of adequate protection.  Therefore, there is no
possible scenario in which United will have access to the Funds.
(United Airlines Bankruptcy News, Issue No. 20; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


WEIRTON STEEL: Wants Blessing to Hire Buck as HR Consultant
-----------------------------------------------------------
Weirton Steel Corporation and its debtor-affiliates seek the
Court's authority to employ Buck Consultants, Inc. as its human
resources consultant during this Chapter 11 case in accordance
with that certain engagement letter dated May 8, 2003, by and
between Buck Consultants and Weirton.

Mark E. Freedlander, Esq., at McGuireWoods LLP, in Pittsburgh,
Pennsylvania, tells the Court that the success of Weirton's
reorganization efforts depends in large part on the efforts of
Weirton's employees.  The employment of Buck Consultants is
critical to ensure that Weirton utilizes its human capital to the
greatest extent possible.

Buck Consultants will provide valuable consultation to Weirton
with respect to its human resource management and identification
and retention of key employees.  Specifically, the consultation to
be provided by Buck Consultants will include:

A. Preservation of Human Capital and Resources Management

    (a) assisting in the design and development of a Key Employee
        Retention Program, which may include these program
        components:

        -- a pay-to-stay component;
        -- a management incentive compensation plan;
        -- severance benefits;
        -- an emergence bonus, and
        -- a discretionary incentive pool;

    (b) conducting appropriate research and benchmarking market-
        competitive cash compensation levels; long-term incentive
        opportunities; and retention awards and severance benefits
        prevalent in the general market and approved in major
        bankruptcy cases;

    (c) addressing issues related to Weirton's human resource
        needs;

    (d) responding to issues that could influence the Board's
        ability to retain key people at all organizational levels;

    (e) presenting findings and recommendations to management and
        the Board;

    (f) representing Weirton before professional advisors,
        attorneys, and, if called upon, by the bankruptcy court;
        and

    (g) any other services Weirton will request with respect to
        human capital and human resource management.

B. Employee Benefits Consulting

    (a) defining alternative services to delivering health
        benefits;

    (b) efficient delivery options to take advantage of the health
        coverage tax credit;

    (c) restructuring retirement benefit programs and
        administration of both qualified and nonqualified plans;

    (d) employee benefit plan redesign and negotiations; and

    (e) communication of employee benefit plan changes.

Buck Consultants has in the past provided general human resources
consulting advice to Weirton on an as needed basis, and also
regularly provides consulting services regarding Weirton's
supplemental retirement income plan.  Both Parties intend to
continue Buck Consultants' services pursuant to this application.

Buck Consultants will apply to the Court for allowance of
compensation and reimbursement of expenses in accordance with
applicable laws.  Buck Consultants will charge for its
professional services on an hourly basis in accordance with its
ordinary and customary hourly rates in effect on the date services
are rendered.  Buck Consultants will maintain detailed,
contemporaneous records of time and any actual and necessary
expenses incurred in connection with the rendering of the services
described.

Peter J. McCormick, a principal in Buck Consultants, Inc., informs
Judge Friend that Buck Consultants' customary hourly rates for the
human resources consulting services to be provided to Weirton are:

    Principal                   $464 - 500
    Associate Principal          380 - 452
    Senior Consultant            272 - 360
    Consultant                   240 - 272
    Senior Associate             196 - 216
    Associate                    140 - 192
    Administrative Professional  140

As of the Petition Date, Mr. Freedlander adds, Buck Consultants
held a $40,000 retainer, which will be applied to the final
invoice for this engagement.

To the best of the Debtor's knowledge, Buck Consultants is not a
creditor of Weirton.  Mr. McCormick assures the Court that Buck
Consultants is a "disinterested person" as defined in Section
101(14) of the Bankruptcy Code and as required by Section 327 of
the Bankruptcy Code.  If it is later determined that Buck
Consultants is a creditor of the Debtor, then Buck agrees to waive
its claim as a creditor.

Except as Mr. McCormick disclosed, Buck Consultants has no
connection with Weirton, its creditors, the U.S. Trustee or any
other party with an actual or potential interest in this Chapter
11 case or its attorneys or accountants.  In addition, Buck
Consultants does not hold or represent any interest adverse to
Weirton or its estate with respect to the matters on which it is
employed.

Furthermore, Buck Consultants' liability on any claim related to
or arising out of the services provided pursuant to this
application and the Engagement Letter will be limited to $250,000,
and Buck Consultants will not be liable for any consequential,
indirect, lost profit or similar damages relating to the services
provided.

Weirton and Buck Consultants have each agreed that the laws of the
Commonwealth of Pennsylvania will govern their relationship under
the Engagement Letter.  Buck Consultants agree that they will
submit any dispute as to the meaning of the Engagement Letter or
in connection with any breach of the Engagement Letter first to
non-binding mediation in accordance with the Commercial Mediation
Rules of the American Arbitration Association.  If the dispute is
not resolved by mediation, then the parties will submit the
dispute to the AAA under the Commercial Arbitration Rules, then to
binding arbitration, in accordance with the dispute resolution
procedures set forth in the Engagement Letter. (Weirton Bankruptcy
News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


WESTPOINT STEVENS: Gets Go-Signal to Pay Critical Vendor Claims
---------------------------------------------------------------
WestPoint Stevens Inc., and its debtor-affiliates sought and
obtained the Court's authority to pay, in their sole discretion,
the prepetition claims of certain Critical Vendors.

According to John J. Rapisardi, Esq., at Weil Gotshal & Manges
LLP, in New York, in connection with their business operations,
the Debtors utilize certain specialty vendors to supply essential
goods and services for the operation of their businesses.  The
Debtors' ability to continue their operations is dependent on the
continued business of these Critical Vendors.  Thus, support from
their Critical Vendors on an ongoing basis is vital to the
Debtors' reorganization process.  At this precarious stage in the
Debtors' business operations, an interruption in the goods and
services provided by the Critical Vendors will have an extremely
negative effect on their efforts to rehabilitate and reorganize.
The goods and services provided by the Critical Vendors must
continue unabated during the pendency of the Debtors' Chapter 11
cases if substantial harm and loss of enterprise value is to be
avoided.

Specifically, Mr. Rapisardi reports that many of the Critical
Vendors provide certain essential raw materials and supplies
required to manufacture the Debtors' products.  The Debtors do not
have any viable alternatives to obtain substitute goods from other
suppliers, thus, they must satisfy the prepetition claims of these
Critical Vendors to ensure that these essential goods will
continue to be available without interruption.

Indeed, in most instances, no other manufacturer or supplier can
timely supply the required goods in any form.  In those instances
where substitute goods or services may exist, these alternate
suppliers cannot provide goods that meet the Debtors' requirements
for quality and quantity, or cannot ensure availability on a cost-
efficient and timely basis in the appropriate geographic areas.
As a result, the Debtors cannot rely on these alternate sources.

Mr. Rapisardi contends that the use of materials of inferior or
inconsistent quality would undermine the Debtors' ability to
maintain the high quality standards of their products, necessary
to meet their customers' longstanding expectations and preserve
the value of the Debtors' products and trademarks in the
marketplace.  Likewise, the use of high quality goods from
alternate suppliers that lack the capability to produce the
necessary products in sufficient quantities or to distribute those
products in a timely fashion to the Debtors' various facilities
would not permit the Debtors to operate and maintain their
manufacturing operations and production schedule without
significant interruption.

In addition, some of the Critical Vendors are foreign vendors who
are unfamiliar with the Bankruptcy Code.  The Debtors, therefore,
believe these foreign vendors will either temporarily suspend or
outright discontinue providing supplies to the Debtors. Moreover,
many of these foreign vendors, as well as the Debtors' domestic
vendors, rely heavily on the Debtors' business for their own
financial success.  If the Debtors are unable to pay their
outstanding prepetition amounts, these Critical Vendors will have
to cease operations, thereby leaving the Debtors with no other
source of supply for those products.

Mr. Rapisardi notes that a significant portion of these Critical
Vendor Claims relate to purchases of goods on credit in the days
immediately preceding the Petition Date.  As a result, the Debtors
believe that most of these claims may be subject to treatment and
payment as reclamation claims pursuant to Section 2-702 of the
Uniform Commercial Code and Section 546(c) of the Bankruptcy Code.
Because these reclamation claims ultimately would be paid or
otherwise satisfied as administrative expenses from assets of the
Debtors' estates, the payment of these claims would not deplete
the Debtors' assets generally available to other creditors.  In
addition, by paying these types of Critical Vendor Claims, the
Debtors can avoid the administrative costs typically associated
with reconciling and litigating such reclamation claims.

The Debtors estimate that, as of the Petition Date, the aggregate
amount of Critical Vendor Claims is $10,000,000.  This is de
minimis when compared to the total sales generated by the Debtors,
which were over $1,800,000,000 last year.  The Debtors' total
current trade payables is $50,000,000.

The process of identifying the Critical Vendors was undertaken by
the Debtors' senior management in conjunction with the Debtors'
legal and financial advisors using very strict criteria to screen
which vendor payments would be deemed critical to avoid business
interruption.  These criteria were developed and used:

    a) Unique vendors were identified that supply goods or
       services critical to the Debtors' business operations;

    b) Those vendors with executory contracts were then excluded
       from the list;

    c) For the remaining unique vendors, other known suppliers
       that may have similar goods and services, but were
       historically more expensive, were then identified and
       considered.  Where an alternative source of supply was
       identified at similar prices and terms, that vendor was
       removed from the list;

    d) The start-up and delayed delivery time associated with
       using replacement vendors was then considered in order to
       determine the extent of supply chain and service
       interruption that would occur; and

    e) Where there was no problem of discontinued service detected
       and no near term activity with a specific vendor, or where
       there was an alternative source of supply identified, those
       vendors were not considered to be Critical Vendors.

Mr. Rapisardi assures the Court that paying the Critical Vendor
Claims will not create an imbalance of the Debtors' cash flows
because the majority of these obligations have customary payment
terms and will not be payable immediately.  Cash maintained by the
Debtors, together with the cash generated in the ordinary course
of the Debtors' businesses, will provide more than sufficient
liquidity for payment of the Critical Vendor Claims in the
ordinary course of business.  Furthermore, the Debtors have sought
interim approval of a debtor-in-possession credit facility, which
would provide for the use of proceeds to satisfy certain of the
Critical Vendor Claims.

The Debtors believe that they must continue to receive the goods
and services provided by the Critical Vendors in order to achieve
a successful reorganization.  In some cases, the Debtors believe
that some Critical Vendors may, among other things:

      (i) refuse to provide services;

     (ii) refuse to provide services on reasonable credit terms
          absent payment of prepetition claims; or

    (iii) suffer significant financial hardship if their
          prepetition claims are not paid in whole or in part.

To satisfy the actual Critical Vendor Claims, the Debtors are
authorized to make payment to the Critical Vendors on the
conditions that:

      (i) the claim is paid in cash or via wire transfer;

     (ii) by accepting payment, the Critical Vendor agrees to
          maintain or reinstate customary trade terms during
          the pendency of these cases; and

    (iii) the Debtors mail a copy of the order to each Critical
          Vendor to which any payment permitted is made.

A Critical Vendor's acceptance of payment is deemed to be
acceptance of the terms of the order, and if the Critical Vendor
thereafter does not provide the Debtors with customary trade terms
during the pendency of these cases, then any payments of
prepetition claims made after the Petition Date may be deemed to
be unauthorized postpetition transfers and therefore recoverable
by the Debtors.

The Debtors are authorized to obtain written verification of trade
terms to be supplied by the Critical Vendors before issuing
payment. (WestPoint Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


WILLIAMS: Closes $800 Million Senior Unsecured Debt Offering
------------------------------------------------------------
Williams (NYSE: WMB) has closed its previously announced
underwritten public offering of 8.625 percent senior unsecured
notes due 2010.

The company will use the net proceeds from the $800 million
offering to improve corporate liquidity, for general corporate
purposes, and for payment of maturing debt obligations, including
the partial repayment of the company's senior unsecured 9.25
percent notes due March 2004.

The notes were issued under the company's $3 billion shelf
registration statement on Form S-3.

Williams, through its subsidiaries, primarily finds, produces,
gathers, processes and transports natural gas.  Williams' gas
wells, pipelines and midstream facilities are concentrated in the
Northwest, Rocky Mountains, Gulf Coast and Eastern Seaboard.

As reported in Troubled Company Reporter's May 27, 2003 Edition,
Standard & Poor's Ratings Services affirmed its 'B+' long-term
corporate credit rating on energy company The Williams Cos. Inc.
Ratings on Williams and its subsidiaries were removed from
CreditWatch with negative implications, where they were placed
July 23, 2002. The outlook is negative.

In addition, Standard & Poor's raised its rating on Williams'
senior unsecured debt to 'B+' from 'B' Standard & Poor's also
assigned its 'B-' rating to $300 million junior subordinated
convertible debentures at Williams. The rating on the junior
debentures is two notches below the corporate credit rating to
reflect structural subordination to the senior debt.

Tulsa, Oklahoma-based Williams has about $13 billion in
outstanding debt.


WILLIAMS COS.: Completes Repurchase of Preferreds from Berkshire
----------------------------------------------------------------
Williams (NYSE: WMB) closed a previously announced agreement to
repurchase preferred shares held by a wholly owned subsidiary of
MidAmerican Energy Holdings Company, a member of the Berkshire
Hathaway Inc. family of companies.

Under the agreement, Williams has redeemed all of the outstanding
9-7/8 percent cumulative-convertible preferred shares for
approximately $289 million, plus $5.3 million for accrued
dividends.  In March 2002, Williams sold the 1,466,667 preferred
shares to MidAmerican in a $275 million transaction.

Williams repurchased the preferred shares with proceeds from a
private placement of 5.5 percent junior subordinated convertible
debentures due 2033. The new convertible debentures provide
Williams with more favorable terms, which on an annual basis
result in approximately $17 million in lower after-tax carrying
costs compared with the preferred convertible shares Williams
repurchased.

Williams, through its subsidiaries, primarily finds, produces,
gathers, processes and transports natural gas.  Williams' gas
wells, pipelines and midstream facilities are concentrated in the
Northwest, Rocky Mountains, Gulf Coast and Eastern Seaboard.  More
information is available at http://www.williams.com


WORLDCOM: CAGW Says Reports Confirm Government Should Stop Deals
----------------------------------------------------------------
Two reports released provide proof that executives and others at
MCI/WorldCom committed acts of fraud and deception that are
sufficient to exclude the company from receiving new government
contracts. The reports come on top of calls from Citizens Against
Government Waste and Senate Governmental Affairs Committee
Chairman Susan Collins to investigate why the government has
failed to stop using taxpayer dollars to do business with the
company.

"While the evidence continues to mount against MCI, the government
keeps on rewarding the company with new contracts," CAGW President
Tom Schatz said. "MCI committed the largest fraud in history and
cheated thousands of people out of billions of dollars, yet the
government continues to bail it out. This is a slap in the face to
all of the innocent victims of MCI's fraud. Americans are being
hit twice -- first as investors in MCI/WorldCom and then as
taxpayers."

The first report was issued by former U.S. Attorney General
Richard L. Thornburgh for the federal bankruptcy court in New
York. The second report was prepared by an MCI special
investigative committee for the company's board of directors. Both
reports detail acts of fraud and deception by senior executives
and other employees, primarily blaming the atmosphere fostered by
founder and former chief executive Bernard Ebbers.

"Other companies, such as Enron and Arthur Andersen, have been
debarred from conducting business with the government for similar
fraudulent practices," Schatz continued. "There is no reason for
the double standard currently being applied to MCI."

Since filing for bankruptcy, MCI has received more than $750
million in federal contracts, making the government the company's
largest customer. The proposed $500 million settlement with the
Securities and Exchange Commission pales in comparison to the
government's business with MCI. One Department of Defense contract
gave the company $45 million to build a cell phone network in
Iraq. But MCI had to subcontract that work to Ericsson, a Swedish
company, because MCI is not in the domestic cell phone business.

"By awarding MCI these contracts, the federal government is
bailing out a corrupt corporation with taxpayer dollars," Schatz
concluded. "Unless the appropriate steps are taken to prevent new
contracts with MCI, the government will fail to deter similar
behavior by other corporations and continue to put tax dollars at
risk."

Citizens Against Government Waste is the nation's largest
nonpartisan, nonprofit organization dedicated to eliminating
waste, fraud, abuse, and mismanagement in government. For more
information, visit http://www.cagw.org


WORLDCOM INC: Michael Salsbury Tenders a Noisy Resignation
----------------------------------------------------------
The following statement should be attributed to Michael H.
Salsbury regarding his resignation from MCI (WCOEQ, MCWEQ):

     "I have advised Michael Capellas, the Board of Directors, and
the Corporate Monitor that it was in the best interest of MCI that
I offer my resignation as general counsel of the company. For the
past year, I have devoted my full efforts toward bringing the
company out of bankruptcy.  MCI's prompt and successful emergence
from Chapter 11 is important to our customers and employees, to a
competitive telecommunications market, and to the nation's
economy.  This can only occur if the public has absolute
confidence that the company is in full compliance with all laws,
has cooperated with all investigations, and is committed to reform
of its corporate governance processes.  To allow the Federal
Examiner report's characterization of certain incidents unrelated
to the accounting fraud to become an obstacle to the company's
emergence would be contrary to everything we have worked for in
the past year."


WORLDCOM INC: Accepts Michael Salsbury's Resignation as Counsel
---------------------------------------------------------------
MCI/Worldcom Inc., (WCOEQ, MCWEQ) announced that its Board of
Directors has accepted the resignation of Michael H. Salsbury,
executive vice president and general counsel. Working with MCI for
the past 24 years, he has been a champion for competition within
the telecommunications industry. During the past year, Salsbury
and his team have worked diligently to ensure the company remains
on track to emerge from Chapter 11 protection this fall.

Separately, Susan Mayer, senior vice president and treasurer, also
tendered her resignation Tuesday.

WorldCom, Inc. (WCOEQ, MCWEQ), which currently conducts business
under the MCI brand name, is a leading global communications
provider, delivering innovative, cost-effective, advanced
communications connectivity to businesses, governments and
consumers. With the industry's most expansive global IP backbone
and wholly owned data networks, WorldCom develops the converged
communications products and services that are the foundation for
commerce and communications in today's market. For more
information, go to http://www.mci.com


WORLDWIDE INSURANCE: S&P Cuts Financial Strength Ratings to BB+
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty credit
and financial strength ratings on Worldwide Insurance Co. and its
subsidiary, Worldwide Direct Auto Insurance Co., to 'BB+' from 'A'
and then removed them from CreditWatch. Standard & Poor's
subsequently withdrew these ratings at Worldwide's request.

The companies were placed on CreditWatch on Jan. 28, 2003,
following the announcement by American Financial Group, their
ultimate parent at the time, that it had reached an agreement to
sell Worldwide to Direct Response Corp., a direct insurance writer
based in Connecticut. As a result of the sale, which was completed
on April 25, 2003, Standard & Poor's lowered the ratings on
Worldwide to reflect the companies' standalone characteristics.
Previously, the 'A' ratings were reflective of the companies'
participation in a pooling arrangement with Great American
Insurance Co., one of AFG's main property/casualty insurance
subsidiaries.

"Major factors reflected in the ratings include Worldwide's modest
standalone business position as a provider of direct auto coverage
and about $70 million in premium writings, poor historical
operating performance, and moderate integration risk related to
its acquisition by Direct Response, which doubled in size
following the acquisition," said Standard & Poor's credit analyst
Laline Carvalho.

Partially offsetting these factors are the companies' very strong
estimated capital adequacy position following recent capital
contributions by the new parent, expected expense improvements as
a result of economies of scale related to Worldwide's new position
as a subsidiary of an insurance group dedicated selling through
the direct channel, as well as expected improved loss experience
as a result of recent restructuring and reunderwriting actions.


WORTH MEDIA: US Trustee Appoints Official Creditors' Committee
--------------------------------------------------------------
The United States Trustee for Region 2 appointed 5 members to an
Official Committee of Unsecured Creditors in Worth Media LLC and
its debtor-affiliates' Chapter 11 cases:

       1. Tenth City LLC
          c/o Koeppel Companies LLC
          575 Lexington Avenue, 29th Fl.
          New York, New York 10022-6113
          Attn: David J. Koeppel
          (212) 344-2150

       2. A.T. Clayton and Co., Inc.
          Two Pickwick Plaza
          Greenwich, CT 06870
          Attn: Michael J. McLaughlin, C.F.O.
          (203) 629-6380

       3. Tesla Capital, LLC
          19925 Stevens Creek Blvd., # 124
          Cupertino, CA 95014-2358
          Attn: Ray J. Hernandez, C.E.O.
          (408) 973-7824

       4. Brown Printing Co.
          2300 Brown Avenue
          Waseca, MN 56093
          Attn: Dennis Woitas
          (507) 837-4757

       5. Synapse Group, Inc.
          5 High Ridge Park
          Stamford, CT 06905-1325
          Attn: Robert E. Breunig Jr., Vice President-Finance
          (203) 595-8135

Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.

Worth Media LLC, a magazine publishing company filed for chapter
11 protection on May 29, 2003 (Bankr. S.D.N.Y. Case No. 03-13471).
Larry Ivan Glick, Esq., represents the Debtors in their
restructuring efforts.  When the Company filed for protection from
its creditors, it listed $2,599,000 in total assets and $9,710,000
in total debts.


XEROX CORP: Parker & Waichman LLP to File Claims against Company
----------------------------------------------------------------
Parker & Waichman, LLP will soon file claims against Xerox
Corporation (NYSE: XRX) and several former executives on behalf of
current and former shareholders of the Company. All current and
former shareholders and employees of Xerox are encouraged to visit
http://yourlawyer.com/practice/overview.htm?topic=Xerox%20Stock%20
Fraud to learn more about the claims to be filed.

The complaints will charge that Xerox executives engaged in a
fraudulent scheme that lasted from 1997 to 2000 that misled
investors about Xerox's earnings to polish its reputation on Wall
Street and to boost the company's stock price. The scheme alleged
the use of accounting devices that were not disclosed to
investors, many of which violated generally accepted accounting
principles. The complaint alleges that the defendants' fraudulent
conduct was responsible for accelerating the recognition of
equipment revenues by approximately $3 billion and increasing pre-
tax earnings by approximately $1.4 billion in Xerox's 1997-2000
financial results.

The complaints will also name several individuals who held senior
positions at Xerox during 1997 through the publication of Xerox's
2000 financial statements, including: Paul A. Allaire (former CEO,
Chairman of Board of Directors and a Director); G. Richard Thoman
(former President, Chief Operating Officer and Director); Barry D.
Romeril (former CFO, Executive Vice President and Vice Chairman);
Philip D. Fishbach (former Comptroller); Daniel S. Marchibroda
(former Assistant Comptroller), Gregory B. Tayler (former Director
of Accounting Policy, Assistant Treasurer and Controller).

The Securities and Exchange Commission has released the following
examples of accounting fraud by Xerox executives:

-- In a September 1997 e-mail copied to Fishbach, Marchibroda and
   Tayler, Romeril asked the controller of Xerox Europe about his
   progress in assessing a potential accounting device and stated:
   "This could be the crucial opportunity for making Quarter 3. I
   cannot see a higher priority in terms of once-offs."

-- In November 1998, Romeril informed Allaire, Thoman, Fishbach
   and others that over the past four years Xerox's major
   earnings-generating market in Brazil had "$700M of unreal
   profits" from "non-marketing actions" and that the
   "[c]onceptual framework [of] our profile is illusory ... the
   profits are there, the question is the timing of when you take
   them"

-- In August 1998, Fishbach told Thoman that although Xerox
   Europe's "operational" growth was 2 percent, "the growth that
   is likely to be reported is closer to 10% given headquarters
   adjustments for margin normalization and other accounting
   items"

-- In October 1999, Xerox's vice chairman reported to Romeril and
   Thoman that Xerox Europe's underlying operational results,
   Without accounting devices and restructuring, "have been
   deteriorating since 1995 and are very different than the
   reported results," and he provided them a chart from Xerox
   Europe's president illustrating operational results with and
   without the use of accounting devices

-- Likewise in January 2000, the president of Xerox Europe
   informed Thoman, Romeril and others that Europe's pre-tax
   profits had been "declining since 1996," that declines in 1999
   profits were "driven by prior year once-offs [including
   accounting devices], the benefits of which started to reverse
   during 1999," but that "this declining trend has been fully
   contained in the reported profit" in part through the use of
   such accounting devices.

-- In November 1999, Romeril told Thoman and other Xerox
   executives that when accounting actions and certain other items
   were stripped away from Xerox's overall consolidated reported
   revenues, Xerox was essentially a "no growth" company from
   1998-1999, and in that same month Romeril provided Thoman,
   Fishbach, and others with documents showing the historical
   impact of accounting actions and certain other items in order
   to show the company's "true operating economics."

During the period of inflated revenues Xerox stock traded as high
as $62.00 per share. The Company's stock closed on Friday at
$11.05 and it has traded as low as $4.20 in the last 52 weeks.

Current and former shareholders and employees can submit their
information for a free and confidential case evaluation at
http://yourlawyer.com/practice/overview.htm?topic=Xerox%20Stock%20
Fraud or by calling Parker & Waichman at 1(800)-LAW-INFO.


* DebtTraders' Real-Time Bond Pricing
-------------------------------------

Issuer               Coupon   Maturity  Bid - Ask  Weekly change
------               ------   --------  ---------  -------------
Federal-Mogul         7.5%    due 2004  14.0 - 16.0       0.0
Finova Group          7.5%    due 2009  42.5 - 43.5      +1.0
Freeport-McMoran      7.5%    due 2006  102.5 - 103.5     0.0
Global Crossing Hldgs 9.5%    due 2009  4.75 - 5.25      +0.25
Globalstar            11.375% due 2004  2.25 - 2.75      -0.25
Lucent Technologies   6.45%   due 2029  69.0 - 70.0      -1.0
Polaroid Corporation  6.75%   due 2002  9.25 - 9.75      +1.0
Terra Industries      10.5%   due 2005  99.0 - 100.0      0.0
Westpoint Stevens     7.875%  due 2005  21.0 - 22.0      +1.0
Xerox Corporation     8.0%    due 2027  88.0 - 89.0      +1.0

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

                          *********

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 ***