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         T R O U B L E D   C O M P A N Y   R E P O R T E R

                Monday, March 19, 2001, Vol. 5, No. 54

                            Headlines

AMRESCO INC.: Fitch Slashes Senior Subordinated Notes to CCC
BRIDGE INFORMATION: ASX Signals Interest In Bridge DFS Stake
BRIDGE INFORMATION: Wins Final Court Nod On $30MM DIP Financing
BUDGET GROUP: Moody's Junks Senior Debt Ratings
CANAL CAPITAL: Executing Cost-Cutting Measures

CAPITAL ENVIRONMENTAL: Seeks Waiver Of Debt Covenant
CAREMATRIX CORP: Seeks Extension of Exclusive Period to July 9
CONSUMER PORTFOLIO: Co-Trustee Gets Mr. Gilhuly's Stake in Stock
DANKA BUSINESS: Securities Exchange Offer Expires Tomorrow
ELECTRO-CATHETER: Seeks to Extend Exclusive Period To May 21

FAMILY GOLF: Selling Assets To Proprietary Industries For $8.4MM
FINOVA GROUP: Honoring Prepetition Employee Obligations
FRUIT OF THE LOOM: Files Joint Reorganization Plan in Wilmington
HARNISCHFEGER: Seeks Okay To Enter Into Wisconsin Office Lease
HARNISCHFEGER: Posts $15.3MM Net Loss For Quarter Ended Jan. 2001

HIH INSURANCE: S&P Downgrades and Withdraws Credit Ratings
HOME HEALTH: Asks Court To Extend Exclusive Period To May 29
INNOFONE: Finalizing SEC Registration Statement
INTERNATIONAL KNIFE: Taps Jefferies For Restructuring Assistance
KCS ENERGY: Reports Financial Results for Year 2000

LERNOUT & HAUSPIE: Judge Wizmur Sees No Problem with Milbank
LOEWEN: Debate Brews re 9% Discount Rate to Present Value Claims
LTV CORP.: Judge Okays Jones Day's Employment Despite Objection
LTV CORP.: Canceling New Systems Development Activity
MESA AIR: Shareholders to Meet in Phoenix on April 5

METROCALL: Releases Fourth Quarter Results
METROCALL: Defers $19.5MM Interest Payment Due To Cash Shortfall
NETPULSE E-ZONE: Files For Chapter 7 Bankruptcy Protection
NORD RESOURCES: Retains Meyners & Company as New Accountant
PAULA FINANCIAL: Reports Fourth Quarter Operating Losses

PAULA FINANCIAL: Executes Amended Credit Agreement
PILLOWTEX CORPORATION: Hires Michael R. Harmon As New EVP & CFO
PSA INC: Seeks To Implement Employee Retention Plan
RED BELL: Recurring Losses Raise Going Concern Doubts
SACO SMARTVISION: Obtains CCAA Protection from Montreal Court

SAFETY-KLEEN: Elgint Rejects Agreements with Nevada Holdings
SOUTHERN CALIFORNIA: Terms CPUC Decision Irresponsible
STELLEX AEROSTRUCTURES: Selling Assets To Veritas Capital
SUN HEALTHCARE: Examiner Retains Gibson Dunn as Lead Counsel
TENFOLD: Closing Offices & Cutting Jobs To Reduce Costs

TRI VALLEY: Del Monte Scoops-Up S&W Assets for $39 Million
VERDANT BRANDS: Sells Canadian Assets to Woodstream to Pay Lender
VERDANT BRANDS: Inks New Standstill Agreements with Lender
VISTA EYECARE: Files Reorganization Plan in N.D. Georgia
VLASIC FOODS: Creditors Object To Use Of Cash Collateral

BOND PRICING: For the week of March 19-23, 2001

                            *********

AMRESCO INC.: Fitch Slashes Senior Subordinated Notes to CCC
------------------------------------------------------------
AMRESCO, Inc.'s senior subordinated notes were lowered by Fitch
to `CCC' from `B-`. The Rating Outlook remains Negative.
Approximately $362.3 million of securities are affected.

The rating action and Outlook reflect the immediate challenges
facing the company from a funding and liquidity standpoint and
longer term concerns regarding its ability to ultimately generate
sufficient proceeds to repay outstanding subordinate noteholder
upon maturity (`03-'05). Asset coverage of the notes remains
limited following significant write-downs of retained interests.

Although earnings from the commercial finance segment may prove
another resource for repayment, current levels do not seem
sufficient to fill the gap. In addition, the company's ability to
execute a redefined strategy will present additional challenges
as two lead lenders have communicated they will not extend
facilities beyond current maturities in March and December 2001.
The company is in negotiations now for a facility to replace the
one maturing in March.

The company has taken significant write-downs to its retained
interests during the nine months ending Sept. 30, 2000 and 1999,
totaling $109.2 million and $90 million, respectively. The
charges were principally taken in the home equity lending
segment, reflecting the impact of performance well below initial
assumptions when the securitization related gains were booked.

Although the company has revised its assumptions to reflect
variance in prepayment, default, and loss, should further
material write-downs be necessary, asset coverage of subordinated
notes, giving effect for the priority of $236.3 million of more
senior creditors at Sept. 30, 2000, would likely fall below 100%.
Total retained interests were $216 million at Sept. 30, 2000 with
home equity retained interest dwindling to $46 million of the
total.

AMRESCO's three remaining segments are commercial finance, which
reported operating income of $8.6 million for the nine months
ending Sept. 30, 2000, asset management - loss of $12.2 million,
and home equity lending - loss of $125.8 million. Asset
management is in the process of liquidating portfolios its owns
and are managed by Lend Lease. Home equity lending's poor
performance was exacerbated by a $106 million loss on retained
interests and sales for the period. The commercial finance
segment's results benefited from $30 million in gains from sales
of loans and investments. On a consolidated basis AMRESCO
reported a narrower net loss of $110 million reflecting gains
from the sale of its discontinued commercial mortgage operations
and to a lesser extent the early retirement of debt. The
company's ability to generate income for any segment remains
reliant on gains from sales which will likely prove challenging
without new sources of capital to fund originations.


BRIDGE INFORMATION: ASX Signals Interest In Bridge DFS Stake
------------------------------------------------------------
Australian Stock Exchange (ASX) Ltd chief executive Richard
Humphry told reporters for AFX News that his company "might
. . . be interested in increasing its 15 pct stake in Bridge DFS
Ltd if Bridge Information Systems, Inc., which is currently under
Chapter 11 bankruptcy, decides to reduce its stake." The ASX
holds a 15% stake in Australian financial news and market data
provider BridgeDFS Ltd, and Bridge Information Systems holds all
or some fraction of an original 55% interest.

Jan Eakin, writing for the Sydney Morning Herald, confirmed that
the ASX said it is considering increasing its 15% stake in
BridgeDFS, adding that the financial information group "offers
synergies and increases the exchange's exposure to institutional
trading services." The Herald observed that BridgeDFS is also
developing an order-routing system into the Asia-Pacific region
at the same time that the ASX is developing a two-way trading
system with the Singapore Stock Exchange.

The ASX is "is looking for partners in the U.S.," Mr. Humphry
said, adding that the ASX's link to U.S. markets via Bloomberg
Tradebook could be ready for operation within the next few months
with a number of test trades having already been performed.

P. Dunai, Managing Director for BridgeDFS Ltd. (ASX:BDF),
stressed in a press release last month saying that, "BridgeDFS is
a completely separate entity from Bridge Financial Inc. It's
reliance on, and involvement with Bridge Information Systems Inc.
[is] set out in it's recent prospectus. BridgeDFS is not reliant
on Bridge Inc for any of its revenue, product range or network.
Our relationship consists only of minor service agreements for
cost sharing with premises and various administrative functions.
BridgeDFS has free cash of over 8 million dollars, no debt of any
kind and remains strongly cash flow positive. The company
continues to trade consistent with prospectus forecasts.
Directors see no impact of any substance on BridgeDFS from either
the current situation of Bridge Information Inc or any possible
further moves through the bankruptcy process."

A copy of the BridgeDFS prospectus to which Mr. Dunai makes
reference is posted and available for free at:

      http://www.dfs.com.au/prospectus/BDFS_PROSPECTUS.pdf

BridgeDFS released its year-end results late last month,
reporting A$9.7 million in new profit on A$32.7 million gross
revenues for the year ending December 31, 2000. (Bridge
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


BRIDGE INFORMATION: Wins Final Court Nod On $30MM DIP Financing
---------------------------------------------------------------
A bankruptcy judge gave final approval for $30 million in debtor-
in-possession (DIP) financing for Bridge Information Systems
Inc., according to Dow Jones. Bankruptcy Judge David P. McDonald
gave his preliminary approval for the $30 million DIP financing
on Feb. 16 and the final approval hearing was held in McDonald's
chambers Wednesday. Bridge filed for chapter 11 bankruptcy on
Feb. 15. Several potential acquirers have completed their due
diligence on Bridge, and the company is now getting formal bids
from interested parties. Bridge expects to make a decision within
a week as to which bid it wants to pursue. Once that decision is
made, Bridge plans to file a motion to sell its assets to that
party. At the same time, Bridge will also file paperwork
outlining procedures for how it would like to handle and consider
counter bids. (ABI World, March 15, 2001)


BUDGET GROUP: Moody's Junks Senior Debt Ratings
-----------------------------------------------
Moody's Investors Service downgraded the following ratings of
Budget Group, Inc.:

      * $550 million Senior Secured Revolving Credit Facility to
        Caa1 from B2,

      * $400 million Senior Unsecured Notes to Caa3 from Caa1,

      * $300 million Convertible Trust Preferred Securities issued
        by Budget Group Capital Trust to "c" from "ca" and the
        parallel junior subordinated HIGH TIDES issued to C from
        Caa2,

      * Senior implied rating to Caa1 from B2, and

      * Issuer rating to Caa3 from Caa1.

Accordingly, this rating action completes Moody's review for
possible downgrade initiated November 6, 2000. The rating outlook
is negative, while approximately $1.6 billion of debt securities
are affected.

Moody's relates that the downgrades follow the Company's
substantial loss for the fourth quarter and the year ended
December 31, 2000--continuing the record of losses since 1997,
the complete erosion of shareholder's equity, and the resulting
decreased financial flexibility. In addition, the ratings
reportedly reflect Moody's concern about the effects of the
weakening economy and negative pricing environment on the
Company's year 2001 performance. Moody's has also noted the
Company's expectation of further loss for calendar year 2001.

Based in Daytona Beach, Florida, Budget Group, Inc. is engaged in
the business of daily rental of cars through owned and franchised
operations under the Budget Rent a Car name throughout the world
and consumer and light commercial truck rentals under the Budget
and Ryder names through company-owned, dealer and franchised
locations primarily in North America.


CANAL CAPITAL: Executing Cost-Cutting Measures
----------------------------------------------
Canal Capital Corporation, incorporated in the state of Delaware
in 1964, commenced business operations through a predecessor in
1936. Canal was a wholly owned subsidiary of Canal-Randolph
Corporation until June 1, 1984, when Canal-Randolph Corporation
distributed to its stockholders all of the outstanding shares of
Canal's common stock, under a plan of complete liquidation.

Canal is engaged in three distinct businesses - the management
and further development of its agribusiness related real estate
properties located in the Midwest, stockyard operations which are
also located in the Midwest and its art operations, consisting
mainly of the acquisition of art for resale.

While the Company is currently operating as a going concern,
certain significant factors raise substantial doubt about the
Company's ability to continue as a going concern. The Company has
suffered recurring losses from operations in eight of the last
ten years and is involved in litigation with a meat packer
located in South St. Paul, Minnesota.

Canal continues to closely monitor and reduce where possible its
overhead expenses and plans to continue to reduce the level of
its art inventories to enhance current cash flows. Management
believes that its income from operations combined with its cost
cutting program, development and/or sale of its non-income
producing properties and planned reduction of its art inventory
will enable it to finance its current business activities. There
can, however, be no assurance that Canal will be able to
effectuate its planned art inventory reductions or that its
income from operations combined with its cost cutting program in
itself will be sufficient to fund operating cash requirements.


CAPITAL ENVIRONMENTAL: Seeks Waiver Of Debt Covenant
----------------------------------------------------
Capital Environmental Resource Inc. (Nasdaq: CERI) reported that
the Company is in default of one of its obligations under its
third amendment to the second amended and restated credit
facility and term loan agreements.

As disclosed in its Form 8-K filed with the Securities and
Exchange Commission on December 11, 2000, the Company was to
provide its lenders:

      * BANK OF AMERICA, N.A. as Agent and a Lender, LASALLE BANK
        NATIONAL ASSOCIATION, and RAYMOND JAMES BANK, F.S.B, under
        a Term Loan Agreement dated as of November 26, 1999, as
        amended, and

      * BANK OF AMERICA, N.A. as U.S. Agent, BANK OF AMERICA
        CANADA, as Canadian Agent, COMERICA BANK, LASALLE BANK
        NATIONAL ASSOCIATION, UNION BANK OF CALIFORNIA, as the
        U.S. Lenders, BANK OF AMERICA, N.A., as an Issuing Lender,
        BANK OF AMERICA CANADA, as a Canadian Lender and as an
        Issuing Lender, CANADIAN IMPERIAL BANK OF COMMERCE, as a
        Canadian Lender and as Syndication Agent, and CREDIT
        SUISSE FIRST BOSTON CANADA, as a Canadian Lender, under a
        Second Amended and Restated Credit Agreement dated as of
        November 26, 1999, as amended,

by March 15, 2001 with a letter of commitment for an equity raise
or subordinated debt financing with net proceeds of $25,000,000.
The Company is in discussions with its lenders to obtain a waiver
of this condition and, although there is no guarantee, the
Company is optimistic that it will obtain this waiver.

Capital Environmental Resource Inc. is a regional integrated
solid waste services company that provides collection, transfer,
disposal and recycling services in markets in Canada and the
northern United States. The Company's web site is
http://www.capitalenvironmental.com.


CAREMATRIX CORP: Seeks Extension of Exclusive Period to July 9
--------------------------------------------------------------
Carematrix Corporation, et al., sought court authority to extend
the exclusive periods during which the debtor may file a plan of
reorganization and solicit acceptances thereof.  The debtor is
seeking an extension to and including July 9, 2001 of the period
within which the debtors shall have the exclusive right to file a
plan of reorganization.

The debtor also sought to extend the time period within which the
debtors shall have the exclusive right to solicit acceptances of
a plan of reorganization to August 29, 2001.

The debtor stated that this a fairly complex case. As part of
their reorganization strategy, the debtors intend to cooperate
and negotiate with the Chancellor Entities for the debtors'
acquisition or control of certain of these facilities. Numerous
lenders and other third parties have an interest in some or all
of the facilities. Consequently, negotiations will be complex and
time consuming, each involving multiple parties. Although the
debtors have made progress in such negotiations, they require
additional time to complete these negotiations.

The debtors have made good faith progress towards a potential
consensual plan of reorganization.

The debtors are represented by Michael R. Lastowski of Duane,
Morris & Heckscher LLP, Wilmington, DE and Paul D. Moore, Boston,
MA.


CONSUMER PORTFOLIO: Co-Trustee Gets Mr. Gilhuly's Stake in Stock
----------------------------------------------------------------
An Amendment has been filed with the Securities & Exchange
Commission to report that Mr. Robert T. Gilhuly no longer
beneficially owns any shares of Consumer Portfolio Services
Inc.'s common stock as a result of his resignation as a co-
trustee of the Charles E. Bradley Trust under agreement dated
March 9, 1989. The Company common stock previously owned
beneficially by Mr. Gilhuly was transferred to the successor co-
trustees on February 27, 2001. On that date, Mr. Gilhuly
transferred 1,058,818 shares of Company common stock to the
successor co-trustee of the Charles E. Bradley Trust. Mr. Gilhuly
received no consideration in connection with this transfer.


DANKA BUSINESS: Securities Exchange Offer Expires Tomorrow
----------------------------------------------------------
Danka Business Systems Plc has advised holders of its 6.75%
Convertible Subordinated Notes Due April 1, 2002 of certain
important information regarding its pending offer to acquire all
of the company's outstanding $200,000,000 principal amount of
6.75% Convertible Subordinated Notes Due April 1, 2002 (CUSIP
Nos. G2652NAA7, 236277AA7 and 236277AB5).

If holders want to participate in the offer, they must make the
necessary arrangements promptly. In particular, if their old
6.75% notes are held through a broker, dealer, bank, trust
company or other nominee, they will need to instruct that firm to
tender the notes on their behalf. Since this procedure may take a
considerable amount of time, they should give these instructions
as soon as possible.

The offer expires at 5:00 p.m., New York City time, on March 20,
2001, subject to satisfaction or waiver of certain conditions,
and unless extended.

Holders can choose to exchange their old 6.75% notes for cash,
new 9% senior subordinated notes or new 10% subordinated notes.
If they choose cash, they will receive $400 in cash for each
$1,000 principal amount of their old 6.75% notes, plus accrued
and unpaid interest in cash. However, Danka will purchase no more
than a total of $40 million total principal amount of old notes
for cash, as described below.

If holders choose new 9% senior subordinated notes, they will
receive $500 principal amount of Danka's new 9% senior
subordinated notes due 2004 for each $1,000 principal amount of
their old 6.75% notes, plus accrued and unpaid interest in cash.

If they choose new 10% subordinated notes, they will receive
$1,000 principal amount of Danka's new 10% subordinated notes due
2008 for each $1,000 principal amount of their old 6.75%
convertible subordinated notes, plus accrued and unpaid interest
in cash.

If the exchange offer is unsuccessful, it is highly unlikely that
Danka will be able to refinance its senior bank debt, which
currently amounts to more than $550 million. This, in turn, could
have a number of material adverse consequences for holders of the
company's old 6.75% notes, including the following:

The sale of the company's outsourcing division, Danka Services
International (DSI) may not take place and Danka would be unable
to reduce its senior bank debt with proceeds from the sale.

The company would be prohibited from making any payment of
principal or interest on its old 6.75% notes until all of its
senior bank debt, which currently amounts to more than $550
million, is paid in full.

The company may be unable to obtain additional waivers from its
bank group of the financial covenants contained in its senior
credit facility. Without these waivers, Danka would be in default
of its credit facility. If the company's senior lenders exercise
their right to accelerate their debt, Dabka would be unable to
pay the accelerated indebtedness. In that event, the company
expects that owners of its old 6.75% notes would only receive
repayment of little or none of the principal amount of their
notes.

The copier industry is undergoing profound changes, in particular
as a result of the transition from analog to digital equipment.
Currently, Danka and a number of its major competitors are
experiencing significant financial difficulties caused by a
dangerous combination of too much debt and too little profits. In
Danka's case, the company has incurred losses from operations of
approximately $100 million over the last four fiscal quarters.
During the same period, its common stock has lost over 90% of its
value. Danka is highly leveraged, with more than $750 million of
total senior and subordinated debt as of December 31, 2000
supported by approximately $104 million of EBITDA (earnings
before interest, income taxes, depreciation and amortization) for
the 12 months ending December 31, 2000.

The company's Board of Directors has determined that, in order to
continue to be a viable competitor in the market, the company
needs to refinance and reduce its indebtedness. Accordingly,
Danka is making this exchange offer as part of a three-part
strategic plan. First, the company intends to sell DSI. It is
anticipated that Danka will close the sale of DSI during its next
fiscal quarter, but there is no assurance that the company will
do so. Secondly, Danka intends to refinance its senior bank debt,
which currently amounts to more than $550 million, with proceeds
from the DSI sale and from new senior credit facilities. Thirdly,
Danka is making this exchange offer in order to refinance its old
6.75% notes. The company intends to complete all three of these
transactions at the same time.

The exchange offer is subject to certain conditions, including
the sale of DSI, the refinancing of existing senior bank debt,
the consent of certain parties to synthetic lease arrangements,
and participation by holders of at least 95% of the old 6.75%
notes.

Any old 6.75% notes that remain outstanding after completion of
the exchange offer will rank junior in right of payment to the
senior bank debt, which currently amounts to more than $550
million. Any remaining old 6.75% notes will also rank junior in
right of payment to up to $100 million of new 9% notes, up to
$200 million of new 10% notes, and any other existing or future
senior or subordinated debt. If Danka defaults on the old notes,
the company could be prohibited from making any payment on the
old notes until all its senior debt, including its bank debt and
the new notes, have been paid in full.

If holders of more than $40 million total principal amount of old
6.75% notes elect to sell their notes for cash, Danka will not
have enough cash to pay for all the old 6.75% notes that holders
elect to sell. In that case, the company will purchase a total of
$40 million principal amount of old notes for cash and it will
exchange $500 in principal amount of new 9% senior subordinated
notes for every $1,000 in principal amount of the balance of old
notes tendered for cash. The company says all holders who elect
to receive cash will be treated equally in this process.

Again, the offer expires at 5:00 p.m., New York City time, on
March 20, 2001, subject to satisfaction or waiver of certain
conditions, and unless extended.


ELECTRO-CATHETER: Seeks to Extend Exclusive Period To May 21
------------------------------------------------------------
Electro-Catheter Corporation sought entry of an order further
extending the debtor's exclusive period within which to file a
plan of reorganization for a period of 75 days from the date the
existing exclusivity period expires, to and including May 21,
2001 and to obtain acceptances thereof for an additional period
of sixty days thereafter, to and including July 20, 2001.

Since the filing of the petition, the debtor has engaged in an
orderly liquidation of its assets, obtaining court approval and
concluding the sale of its product lines and related inventory
and equipment for $625,000 in May, 200. The debtor has begun
serious discussions with a third party who may be interested in
acquiring the debtor's corporate shell through a reverse merger
with a viable business. Such a transaction would be the
centerpiece of a plan of reorganization funded by a third party.

The debtor's CPA is currently preparing audited financial
statements for submission to the SEC. The audit is being
completed and the debtor requires additional time to allow its
professionals to finish their work and to conclude negotiations
on a plan of reorganization.


FAMILY GOLF: Selling Assets To Proprietary Industries For $8.4MM
----------------------------------------------------------------
Proprietary Industries Inc. has entered a binding agreement to
acquire all the outstanding shares of Family Golf Acquisition
Inc. for $8.4 million, according to Dow Jones. In a news release,
the company said the offer is unconditional, includes an $840,000
non-refundable deposit and is scheduled to close by the end of
March. Proprietary said Family Golf Acquisition owns all the
shares of Eagle Quest Family Golf Centers Inc., which owns and
operates 10 golf centers in British Columbia, Alberta and
Ontario.

The company said negotiations started in January 2000 with Family
Golf Acquisition's U.S. parent, Family Golf Centers Inc., and
continued through to auction on March 12 in a New York Bankruptcy
Court after the parent filed for chapter 11 bankruptcy protection
for its U.S. assets. Proprietary said net book value of the
assets held by Eagle Quest is $54.2 million (Canadian). It said
Eagle Quest's 2000 financial statements reflect gross revenue of
$12 million (Canadian) and EBITDA of $2.6 million (Canadian). The
company said Eagle Quest's budgeted figures for 2001 project
gross revenue of $14.1 million (Canadian) and EBITDA of $4
million (Canadian). (ABI World, MARCH 15, 2001)


FINOVA GROUP: Honoring Prepetition Employee Obligations
-------------------------------------------------------
To minimize impediments and distractions that will disrupt The
FINOVA Group, Inc.'s on-going business, enable the Debtors to
preserve the value of their assets and allow FINOVA management to
focus on implementing the Berkadia Transaction, the Debtors asked
the Court for authority to honor all prepetition employee-related
obligations. To preserve the Debtors' estates and to maximize
their value, it is critical for the Debtors to maintain their
workforce intact, Jonathan M. Landers, Esq., at Gibson, Dunn &
Crutcher LLP, told the Court, because many of FINOVA's employees
have an extensive understanding of the various lending
arrangements, the longstanding relationship with the customers
and knowledge of the Debtors' business operations. Failure to
honor outstanding commitments to employees would have a material
adverse impact on the Debtors' ability to continue to operate in
the ordinary course and to collect on their assets. The amount of
employee compensation is comparatively minimal when compared to
the size of the Debtors' loan portfolios, leasing transactions,
the outstanding amount of debt, or the adverse consequences of
not properly managing those assets, Mr. Landers said.

As of the February 28, 2001, William J. Hallinan, FINOVA's
President, Chief Executive Officer, General Counsel, advised,
FINOVA employs 855 "financial innovators," of whom:

      274 are non-exempt employees,
      344 are exempt non-supervisory employees,
      181 are exempt supervisory employees,
      29 are in sales and
      27 are executives.

By Debtor entity, FINOVA employs:

      34 The FINOVA Group Inc.
     616 FINOVA Capital Corporation
     138 FINOVA Loan Administration Inc.
      49 FINOVA Portfolio Services, Inc.
      17 FINOVA Capital plc
       1 FINOVA (Canada) Capital Corporation

In Scottsdale, Arizona, 328 workers are employed. The remaining
employees are located in various locations throughout the United
States, London and Canada.

Employees are paid their wages and salaries on a bi-monthly
basis, on or about the fifteenth and last day of each month. In
December 2000, gross monthly payroll for all Debtors was
approximately $6,567,000. As a result of terminations in January
and February 2001, the Debtors estimate that gross payroll for
wages and salaries will be approximately $4,317,000. As of the
Petition Date, the Debtors believe that all of their prepetition
compensation obligations were paid as due. The Debtors paid
their last prepetition payroll on or about March 6, 2001 for the
period ending March 15, 2001. The Debtors made their last full
prepetition payment on monthly commissions in the ordinary course
of business on February 28, 2001. This payment included
commissions due through February 21, 2001.

As of the Petition Date, the Debtors believe that approximately
$660,000 is owed to employees in respect of accrued and unpaid:

      (a) wages, salaries, commissions, sick pay and vacation,

      (b) amounts that the Debtors are required by law to withhold
from employee payroll checks in respect of federal, state and
local income taxes, including unemployment contributions and
taxes, and social security and Medicare taxes,

      (c) amounts that the Debtors are required to pay to match
amounts paid by employees in respect of state unemployment taxes,
social security and Medicare taxes; and

      (d) amounts withheld or deducted from employees' paychecks
in the ordinary course of business for court ordered wage
garnishments (if any) and voluntary employee contributions to
employee retirement plans, including the Debtors' 401(k) or
similar programs, tax exempt flexible spending accounts, life,
health, disability and similar insurance premiums, and any other
authorized deductions, excluding accrued vacation and sick pay,
Contingent Commissions and taxes.

In the ordinary course of the Debtors' business, as is customary
with most large companies, the Debtors have established various
benefit plans, programs and policies for their employees,
including their directors and certain retirees. These benefit
plans, programs and policies include medical insurance, dental
insurance, vision coverage, life insurance and accidental death
and dismemberment insurance, short-term and long-term disability
protection, employee assistance programs, wellness programs,
flexible spending accounts, 401(k) plan, pension plans,
supplemental executive retirement plan, charitable contribution
program, concierge services, educational assistance, adoption
assistance, sick child coverage, dependent tuition program,
employee award programs, stock incentive programs and workers'
compensation. The Debtors have various payment obligations with
respect to these Employee Benefits, including without limitation
claims for self-insured plans, insurance premiums and
administrative costs. Some of the Employee Benefits are funded
by the Debtors. Other Employee Benefits are provided by the
Debtors, but funded all or in part by the employees through
payroll deductions. The Debtors located in the United States also
make matching contributions to the employees' retirement plans up
to certain specified amounts or percentages.1s FINOVA Capital plc
in the United Kingdom contributes a percentage of each employee's
salary to a pension plan on behalf of employees and employees are
not required to contribute. The percentage is determined by an
actuarial calculation based on the employee's age and length of
service. The Debtors believe that, as of the Petition Date, all
of their Benefit Obligations were paid as due and that the amount
of any accrued and unpaid prepetition Benefit Obligations,
including usual and customary matches to retirement plans is
approximately $600,000.

The Debtors offer their employees a choice between three health
insurance plans. 16 The Debtors self-insure two of the health
insurance plans and pay Aetna US Healthcare to administer these
two plans. Employees pay 20% of the fully insured equivalent
premium to participate in these two plans. The third health
insurance plan is an HMO insured by Aetna US Healthcare.
Employees participating in the HMO pay 10% of the premium. The
Debtors also provide a supplemental health plan to executives to
offset deductibles and the employee portion of incurred expenses
up to $3,500 per year (estimated annual cost at approximately
$30,000), and a fully funded vision plan and dental plan to
employees. The Debtors self-insure both the vision and dental
plans, which are administered by VSP and Delta Dental,
respectively. In the year 2000, the Debtors' paid approximately
$3,044,384 for self-insured health insurance claims, $1,162,886
for self-insured dental claims and $150,786 for self-insured
vision claims. In the year 2000, the Debtors' monthly premium
payment for HMO insurance was approximately $193,000. The Debtors
anticipate that these costs will decrease due to prepetition
terminations. The amount of incurred but not yet reported medical
claims is currently approximately $550,000.

The Debtors also fund additional benefits and programs for their
employees. In the year 2000, the Debtors paid an average of
approximately $42,866 per month for life insurance and $17,847
per month for long term disability on behalf of employees. In
addition, the Debtors paid third parties approximately $40,000
per month for other benefits programs, plans and policies. Based
on recent terminations, the Debtors believe that monthly cost of
these additional benefits will be equal to or less than the
amounts paid in the year 2000.

In addition to benefits available to current employees, the
Debtors offer medical coverage to former employees and retirees
that are at least 55 years old and have ten years of service with
the Debtors when they cease employment. The Debtors self-insure
this plan and pay Aetna US Healthcare to administer the plan.
Approximately 45 former employees and retirees participate in
this plan. Plan participants pay a portion of the fully insured
equivalent premium either by check sent to the Debtors or by
deductions from their pension plan payments which are
administered by Mellon Bank. For those participants deducting the
premium from pension plan payments, Mellon Bank sends an
aggregate check to the Debtors monthly.

In the ordinary course of their duties on behalf of the Debtors,
various employees, directors, contract workers and temporary
employees from time to time incur certain business-related
expenses for which they are customarily reimbursed by the
Debtors. In other cases, such expenses are charged directly to
the Debtors, although the employees could be obligated on the
expenses if they are not paid by the Debtors. Such expenses
include, without limitation, travel, corporate credit cards,
entertainment, meal, tuition and relocation expenses, and may be
owing to recently terminated employees or directors as well as
current employees. These Reimbursement Obligations are typically
incurred through the use of corporate or personal credit cards.
Based on historical information, the Debtors estimate that, as of
the Petition Date, the aggregate amount of unpaid Reimbursement
Obligations approximates $300,000, including employee travel
reimbursement for travel incurred but not yet requested.

The Debtors sought authority to pay all of their prepetition
employee obligations because payment of these prepetition
obligations is essential and necessary to the Debtors' continued
operations in chapter 11 and to an effective reorganization. The
Court, Mr. Landers argued, has statutory authority under 11
U.S.C. Sec. 105(a) to grant this request. Under the well
established "necessity of payment doctrine," authorizing the
payment of prepetition claims outside the context of a plan of
reorganization is appropriate because the payment is necessary to
the Debtor's continued operation in a chapter 11 reorganization.
In addition, the majority of the Compensation Obligations and the
Benefit Obligations are entitled to priority under 11 U.S.C.
Secs. 507(a)(3) and 507(a)(4) and would be payable in full under
a plan of reorganization. Finally, the Debtors are required to
pay certain health and medical benefits to retirees pursuant to
11 U.S.C. Sec. 1114(e)(1), subject to court authorized
discontinuation or modification under the procedures set forth in
Section 1114 of the Bankruptcy Code.

Under the doctrine of necessity and pursuant to section 105(a) of
the Bankruptcy Code, Mr. Landers continued, courts have
consistently permitted the postpetition payment of prepetition
obligations, including prepetition claims of employees, when
necessary to the debtor's continued business operations. See,
e.g., Gregg v. Metropolitan Trust Co., 197 U.S. 183, 187 (1905)
("[T]he payment of the employees of the [rail]road is more
certain to be necessary in order to keep it running than the
payment of any other class of previously incurred debts.");
Miltenberger v. Logansport Ry., 106 U.S. 286, 312 (1882) (payment
of pre-receivership claim prior to reorganization permitted to
prevent "stoppage of . . . [crucial] business relations . . ..");
In re Chateaugay Corp., 80 B.R. 279, 286-88 (S.D.N.Y. 1987),
appeal dismissed, 838 F. 2d 59 (2d Cir. 1988) (approving lower
court order authorizing debtor prior to plan stage of case to pay
prepetition wages, salaries, expenses and benefits); In re Lehigh
& New England Railway Co., 657 F.2d 570, 581 (3d Cit. 1981), In
re Penn Central Transp. Co., 467 F.2d 100, 102 n. l (3d Cir.
1972) ("Necessity of payment" doctrine explained as "permit[ting]
immediate payment of claims of creditors where those creditors
will not supply services or material essential to the conduct of
the business until their pre-reorganization claims shall have
been paid"); In re Columbia Gas Sys., Inc., 171 B.R. 189, 191-92
(Bankr. D. Del. 1994), In re Ionosphere Clubs, Inc., 98 B.R. 174,
175-76 (Bankr. S.D.N.Y. 1989) (payment of prepetition wages,
salaries, reimbursable business expenses and health benefits to
active employees of debtor airline authorized); In re Gulf Air,
Inc., 112 B.R. 152, 153 (Bankr. W.D. La. 1989) (payment of
prepetition wages, benefits and expenses permitted to "safeguard
against loss of going-concern values").

The continued operation of the Debtors' businesses, the
realization on existing loans, the generation of new loans, and
the Debtors' successful reorganization all depend on the
retention and motivation of the Debtors' employees, Mr. Hallinan
told the Court. It is essential that the Debtors take all
actions reasonably necessary to continue on an uninterrupted
basis in the ordinary course of business all of their employee
programs, policies and plans that were in effect prior to the
Petition Date. Payment of these obligations and the continuation
of all of these programs and policies is essential to ensure that
the Debtors retain their employees and directors. Payment of
obligations and the continuation of all programs, policies and
plans for retirees and former employees is also essential to the
retention of current employees. Many of the former employees are
in contact with current employees. Failure to pay their benefits
would undermine the morale of current employees and would be a
substantial hardship on retired employees who rely on these
benefits. For these reasons, the relief requested will enable the
Debtors to continue to operate their businesses in an economic
and efficient manner without disruption, and to maximize value
for all parties in interest.

Finding that FINOVA's request is in the best interests of their
estates and their creditors and that paying employees is
essential to the continued operation of the Debtors' businesses,
Judge Wizmur granted the Debtors authority, in their sole and
absolute discretion, to honor and pay any prepetition employee-
related obligation. Judge Wizmur makes it clear that nothing
contained in her order requires FINOVA to make any particular
payment, nor does the payment of any obligation constitute
assumption of a contract under 11 U.S.C. Sec. 365. (Finova
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


FRUIT OF THE LOOM: Files Joint Reorganization Plan in Wilmington
----------------------------------------------------------------
Fruit of the Loom, Ltd., Fruit of the Loom, Inc., and certain of
their subsidiaries filed a Joint Plan of Reorganization with the
United States Bankruptcy Court for the District of Delaware in
Wilmington. The Reorganization Plan is supported by the steering
committees of the Company's pre-petition secured lenders and
secured noteholders holding or representing approximately $1.2
billion of the Company's pre petition secured debt. The Company
is continuing discussions with the official committee of
unsecured creditors and is hopeful that a consensual resolution
will be reached, enabling this committee to also support the
Reorganization Plan.

The Reorganization Plan provides that the Company would emerge
from Chapter 11 with a substantially deleveraged balance sheet,
and that the pre-petition secured creditors would receive 99% of
the reorganized company's common stock and up to $300 million in
unsecured senior notes. Current holders of Fruit of the Loom,
Ltd.'s equity interests will have their shares cancelled under
the Reorganization Plan and will receive no distribution
thereunder.

Fruit of the Loom, Ltd. also announced that it intends to file
its Scheme of Arrangement in the Grand Court of the Cayman
Islands on or about today, March 19, 2001. The terms of the
Scheme of Arrangement are complementary to the terms of the
Reorganization Plan, and will receive the support of the Joint
Provisional Liquidators appointed by the Grand Court of the
Cayman Islands.

"The Company's consistent improvement in operations and cost
reductions have given us the momentum to reach this significant
milestone toward the Company's emergence from bankruptcy," said
Chief Executive Officer Dennis Bookshester. "Additionally, the
contributions made by our employees remain central to the
Company's improved performance and long-term success."

Fruit of the Loom filed its Chapter 11 case on December 29, 1999,
in the United States Bankruptcy Court for the District of
Delaware in Wilmington.

Fruit of the Loom (OTC: FTLAQ) is a leading international,
vertically integrated basic apparel company, emphasizing branded
products for consumers of all ages. The Company is one of the
world's largest manufacturers and marketers of men's and boys'
underwear, women's and girls' underwear, printable T-shirts and
fleece for the Activewear industry, casualwear and childrenswear.
Fruit of the Loom employs approximately 27,000 people in more
than 60 locations worldwide. The Company sells its products
principally under the FRUIT OF THE LOOM(R) and BVD(R) brands. For
more information about the Company and its products, visit
http://www.fruit.com.


HARNISCHFEGER: Seeks Okay To Enter Into Wisconsin Office Lease
--------------------------------------------------------------
Harnischfeger Industries, Inc. currently maintains a corporate
office at 3600 South Lake Drive, St. Francis, Wisconsin that it
rents from South Shore Corporation, a wholly-owned subsidiary of
HII. The building provides more space than is necessary to house
the approximately ten employees that remain after the recent
transfer of a large number of employees to other locations. The
Chief Executive Officer, the Chief Financial Officer and the
General Counsel are among the employees that still occupy the
Building.

South Shore intends to sell the Building along with other
property. In this regard South Shore has filed the motion for
authority to sell certain property to L&J Schmier Management and
Investment Co. or to the Highest and Best Bidder and related
relief.

HII has negotiated an agreement with 100 East Wisconsin Avenue
Joint Venture for property located at 100 East Wisconsin Avenue,
Milwaukee, Wisconsin. The Property would provide the space
necessary to house the employees currently occupying the
Building, but is considerably smaller and less expensive than the
Building. The term of the lease is four years and six months and
the Monthly Base Rent is $4,688.97 for the first year with annual
increments culminating in Monthly Base Rent of $5,810.87 for the
fifth year. The Lease contemplates that the Debtor will pay
brokerage fees and costs involved in improving the Property. The
Debtor believes that the rent has been reduced in consideration
for HII's payment of these fees and costs.

In light of the potential sale of the Building and the cost
savings that HII will realize in the form of reduced rent
payments, the Debtor believes that entering into the Lease is in
the best interest of the Debtor's estates. Accordingly, HII seeks
the Court's authority to enter into and perform its obligations
under the Lease. (Harnischfeger Bankruptcy News, Issue No. 38;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


HARNISCHFEGER: Posts $15.3MM Net Loss For Quarter Ended Jan. 2001
-----------------------------------------------------------------
Harnischfeger Industries, Inc. announced financial results for
the three months ended January 31, 2001, reporting a net loss of
$15.3 million on net sales of $267.5 million, compared to a net
loss of $17.6 million on net sales of $287.0 million for the same
period the previous year. The Company has been operating under
Chapter 11 protection since June 7, 1999. (New Generation
Research, March 15, 2001)


HIH INSURANCE: S&P Downgrades and Withdraws Credit Ratings
----------------------------------------------------------
Standard & Poor's downgraded the insurer financial strength and
counterparty credit ratings on HIH Insurance (Asia) Ltd. to
single-'B' from triple-'B'-minus. The outlook on the counterparty
credit rating is negative. At the same time, the ratings are
withdrawn at the request of the management of the parent, HIH
Insurance Ltd.

The rating action follows the downgrade action on Australia-based
HIH Insurance Ltd., which provides explicit support for HIH
Insurance (Asia). In November 2000 and February 2001, Standard &
Poor's downgraded the ratings on the core operating entities of
HIH Insurance Ltd. and placed them on CreditWatch negative,
warning of potential for further diminution in financial
strength.

The ratings on HIH Insurance Ltd. and HIH Insurance (Asia) are
withdrawn and removed from CreditWatch. Consequently, the
companies are no longer subject to continuous surveillance by
Standard & Poor's. --CreditWire


HOME HEALTH: Asks Court To Extend Exclusive Period To May 29
------------------------------------------------------------
Home Health Corporation of America, Inc. et al. sought a court
order further extending the exclusive period during which the
debtors may file and solicit acceptances of a plan. A hearing on
the motion will be held on March 22, 2001@12:30 PM. The debtors
are represented by Charlene D. Davis, The Bayard Firm,
Wilmington, DE and Gary D. Bressler and Alan I. Moldoff, Adelman
Lavine Gold and Levin, Philadelphia, Pa.

The debtors sought to further extend the period during which the
debtors have the exclusive right to file a plan or plans of
reorganization, from the current expiration date of March 30,
2001 through May 29, 2001; and extending the period during which
the debtors have the exclusive right to solicit acceptances of
such plan(s) from the current expiration date of May 29, 2001
through July 30, 2001.

The motion represents the thirteenth request for an extension of
their Exclusive Periods. In light of the size and complexity of
the debtors' 35 cases and the progress that they have already
made in laying a foundation for the formulation of a consensual
plan of reorganization, the debtors believe that their request is
appropriate.

The debtors, in consultation with their lender group have
commenced drafting a plan of reorganization and accompanying
disclosure statement. The debtors have recently negotiated and
closed on a post-petition loan with a new lender, Healthcare
Business Credit Corporation.


INNOFONE: Finalizing SEC Registration Statement
-----------------------------------------------
Innofone.com, Incorporated is incorporated under the laws of the
State of Nevada. The Company, through its legal subsidiary
Innofone Canada Inc., which operates in Canada, is engaged in the
telecommunications business of providing long distance telephone
services, cellular services and internet services. All of the
Company's sales are to Canadian customers in the residential and
business sectors. The Company is not dependent on a single
customer,however, the Company does use only a few carriers of
long distance services that they are dependent on for the usage
of their telephone lines.

The Company has experienced significant operating losses since
incorporation, negative working capital and deficiency in
shareholders' equity at December 31, 2000. Additionally, the
Company's shares have been delisted from the National Association
of Securities Dealers ("NASD") over-the-counter Bulletin Board.

The Company is in the process of finalizing a Registration
Statement that it has filed with the United States Securities and
Exchange Commission in order for its shares to be eligible for
trading in the United States on the NASD over-the-counter
Bulletin Board.

Continued operations depend upon the Company's ability to attain
profitable operations and obtain sufficient cash from external
financing to meet its liabilities as they become payable. These
conditions and events cast substantial doubt on the Company's
ability to continue as a going concern. Management is of the
opinion that sufficient working capital will be obtained from
operations and external financing to meet the Company's
liabilities and commitments as they become payable.


INTERNATIONAL KNIFE: Taps Jefferies For Restructuring Assistance
----------------------------------------------------------------
International Knife & Saw, Inc. is a wholly-owned subsidiary of
IKS Corporation, a Delaware corporation. The Company is a global
leader in the manufacturing, servicing and marketing of
industrial and commercial machine knives and saws. Its products,
which are consumed in the normal course of machine operation and
need resharpening or replacement many times a year, are mounted
in industrial machines and are used in virtually every facet of
cutting, slitting, chipping and forming of materials. The Company
serves the following major market sectors: (i) Wood (44% of 2000
net sales); (ii) Paper & Packaging (36%); (iii) Metal (16%); and
(iv) Plastic & Recycling (4%). The Company believes that it has a
leading worldwide market share in each of these market sectors
and that there is no other company that serves all four such
sectors.

International Knife & Saw has undergone two leadership changes
over the past two-year period. Following CEO departures in May,
1999 and again in April, 2000, the Board of Directors of the
Company established an executive committee comprised of Messrs.
William M. Schult, Executive Vice President - CFO, Treasurer and
Secretary; Bradley H. Widmann, Vice President - Operations for
the Americas; and Jeffrey H. Welday, Vice President - Sales and
Marketing for the Americas. This committee is responsible for all
North American operations of the Company and reports directly to
the Board of Directors. Thomas W.G. Meyer, Executive Vice
President, Europe and Asia, continued in his role with
responsibility over those regions and also reports directly to
the Board of Directors.

Deteriorating results in the Company's North American operations
over the past two years, primarily attributable to leadership
changes at the Company in 1999 and 2000, as well as an
increasingly softening market, have more than offset improved
results in the Company's European operations. For example, in
2000, excluding non-recurring one-time charges, the Company's
North American operations accounted for approximately 57% of net
sales and incurred an operating loss of $1.8 million, while its
European operations accounted for approximately 38% of net sales
and 95% of the Company's operating income. In 1998, the Company's
North American operations accounted for approximately 71% of
net sales and 70% of the Company's operating income, while its
European operations accounted for approximately 25% and 25%,
respectively.

The Company incurred net losses of approximately $15.5 million
and $3.4 million in the years ended December 31, 2000 and 1999,
respectively, as compared to net income of approximately $1.6
million in the year ended December 31, 1998. In addition, the
Company generated negative cash flow from operations of
approximately $4.5 million during the year ended December 31,
2000, as compared to positive cash flow from operations of
approximately $6.9 million and $10.7 million during the years
ended December 31, 1999 and 1998, respectively.

Continuing adverse market conditions and their negative effect on
the Company's cash flow, coupled with limited liquidity, are
likely to impede the Company's ability to make interest payments
of approximately $5.1 million on each of May 15 and November 15,
2001 under the Company's 11 3/8% Senior Subordinated Notes due
2006. These matters raise substantial doubt about the Company's
ability to continue as a going concern. As a result, the Company
has retained Jefferies & Company, Inc. to begin a process to
address the Company's highly leveraged capital structure. The
Company expects Jefferies to assist it in developing alternatives
in connection with a restructuring of its Subordinated Notes.
While the Company believes that there are certain alternatives
available to it, there can be no assurance that the Company will
be successful in implementing any such alternatives or that any
such alternatives, if implemented, will enable the Company to
meet its obligations.


KCS ENERGY: Reports Financial Results for Year 2000
---------------------------------------------------
KCS Energy, Inc. (NYSE: KCS) announced financial and operating
results for the fourth quarter and year ended December 31, 2000.

Commenting on the Company's performance during the year, KCS
President and Chief Executive Officer James W. Christmas said,
"The combination of significantly improved commodity prices,
higher working interest production from a successful drilling
program and additional cost reductions enabled the Company to
report record results, consummate its plan of reorganization and
emerge from Chapter 11 last month with trade creditors being paid
in full, debt having been reduced from a peak of $425 million to
$215 million and shareholders retaining all of their stock. In
addition, the Company currently has over $50 million of cash on
hand. Not only has KCS emerged from Chapter 11, but it has also
significantly strengthened its balance sheet and reestablished
the financial flexibility to enable it to capitalize on
opportunities and grow profitably."

For the year ended December 31, 2000, income before
reorganization items increased 12 fold to $57.0 million compared
to $4.3 million in 1999. After deducting $15.4 million of
reorganization items ($6.1 million of which was the non-cash
write-off of deferred debt issuance costs), net income in 2000
was a record $41.5 million, or $1.42 per share, compared to $4.3
million, or $0.15 per share in the prior year. A 68% increase in
average realized prices combined with lower lease operating and
general and administrative expenses and 7% higher working
interest production were partially offset by lower production
from the Company's Volumetric Production Payment ("VPP") program
and $4.2 million of additional interest on interest expense noted
above. EBITDAR (earnings before interest, taxes, DD&A and
reorganization items) increased 53% to $148.9 million, also a
record, compared to $97.2 million in 1999.

Income before reorganization items for the quarter ended December
31, 2000 increased nearly 11 fold to $15.2 million compared to
$1.3 million in the prior year's quarter. After deducting $4.8
million of reorganization items, net income for the quarter was
$10.5 million, or $0.36 per share, compared to $1.3 million, or
$0.04 per share, for the quarter ended December 31, 1999. The
significant improvement in earnings during the three months ended
December 31, 2000 was achieved even though the quarter included a
full year of interest expense on the Company's senior
subordinated notes and interest on interest related to past due
payments on the Company's senior notes and senior subordinated
notes, totaling $15.3 million. No such amounts were expensed
during the first three quarters of 2000 in accordance with AICPA
Statement of Position 90-7, but were expensed in the fourth
quarter because the Company's consensual plan of reorganization,
agreed to in December, included provisions for the payment of
these amounts. The 2000 results reflect significantly higher oil
and gas prices, combined with higher working interest production,
partially offset by lower VPP production and higher interest
expense. While KCS' working interest production increased 9%
during the fourth quarter, total production decreased 4% to 13.2
BCFE, primarily due to the expiration of certain VPPs and limited
capital committed to the VPP program during 2000. VPP production
accounted for 23% of production in the fourth quarter and full
year ended December 31, 2000, compared with 33% and 39% in the
prior year quarter and full year, respectively. EBITDAR for the
quarter was a record $50.1 million, increasing 99% compared to
$25.1 million for the same period in 1999.

                     Reorganization Update

As previously reported, on February 20, 2001, the Company
consummated its plan of reorganization, which was overwhelmingly
approved by creditors and stockholders, and emerged from
bankruptcy.

As a part of the Plan, the Company sold a production payment to
an affiliate of Enron North America Corp. covering approximately
43.1 BCFE (38.3 BCF of gas and 797,000 barrels of oil) of proved
reserves for net proceeds of approximately $176 million. The
reserves will be delivered in accordance with an agreed schedule
over five years, with approximately 37% of the total delivered in
2001 and 26% delivered in 2002.

Funds from this production payment together with net proceeds of
$28.8 million from the issuance of convertible preferred stock
were used to repay the Company's two bank credit facilities in
full, pay past due interest on the senior and senior subordinated
notes and repay $60 million of senior notes. Trade creditors were
paid in full and shareholders retained 100% of their common
stock, subject to dilution for conversion of the new preferred
stock.

As a result, KCS has reduced its total debt from a peak of $425
million in early 1999 to $215 million today ($90 million of 11%
senior notes due 2003 and $125 million of 8 7/8% senior
subordinated notes due 2006). In addition, the Company has in
excess of $50 million cash on hand. "KCS is in a much stronger
financial position today, with greater financial flexibility and
the cash flow and available cash to not only carry out its
capital program, but also to fund potential acquisitions or to
repurchase a portion of its outstanding notes," Christmas said.

                        Outlook for 2001

Working interest production is currently expected to be 37-40
BCFE in 2001, while VPP production is expected to be 4-7 BCFE,
reflecting the expiration of certain VPPs. Approximately 15.7
BCFE of the production is committed to the Enron VPP and will be
reflected as amortization of deferred revenue at the weighted
average net discounted price of approximately $4.05 per MCFE.

With the elimination of the old Medallion hedge discussed above,
the Company has derivative products covering only 3.9 million
MMBTU of its 2001 production at an average price of $4.81 per
MMBTU, 95% of which relates to the first quarter. Unhedged gas
prices for the Company's production typically average $0.04 to
$0.08 per MCF below NYMEX prices and unhedged oil prices
typically average $0.20 to $0.30 per barrel above WTI field
postings. Lease operating expenses and general and administrative
expenses in the aggregate are expected to be within 3-5% of the
year 2000 actuals. Interest expense will be substantially lower
in 2001, reflecting the repayment of all bank debt and $60
million of senior notes on February 20, 2001 as discussed above.

KCS is an independent energy company engaged in the acquisition,
exploration and production of natural gas and crude oil with
operations in the Mid-Continent and Gulf Coast regions. The
Company also purchases reserves (priority rights to future
delivery of oil and gas) through its Volumetric Production
Payment program. For more information on KCS Energy, Inc., visit
the Company's web site at http://www.kcsenergy.com


LERNOUT & HAUSPIE: Judge Wizmur Sees No Problem with Milbank
------------------------------------------------------------
The Official Noteholders' Committee, represented by Neil B.
Glassman and Steven M. Yoder of The Bayard Firm, and Bruce R.
Zirinsky and Gregory M. Pertrick of the law firm of Cadwalader,
Wickersham & Taft, has objected to the employment of the law firm
of Milbank, Tweed, Hadley & McCloy, LLP, as lead counsel for
Lernout & Hauspie Speech Products N.V. and Dictaphone Corp. The
Committee argued to Judge Wizmur that there are serious and
irreconcilable conflicts between the Debtors' estates, and the
creditors of each estate, which prevent Milbank from being able
to carry out its duties in a manner that will represent the best
interest of creditors of each estate. For example, the Committee
notes that L&H has stated its intent to pursue a joint plan;
however, the Committee believes that Dictaphone may best benefit
from a stand-alone plan. Further, the Committee believes that
L&H's creditors have no desire to investigate the acquisition of
Dictaphone, but Dictaphone and its creditors have claims of fraud
arising from that acquisition. Further, L&H's creditors have
claims against Dictaphone based upon an alleged guaranty of L&H's
debt by Dictaphone, but the creditors of Dictaphone may pursue
claims to contest the enforceability of that guaranty.
Dictaphone's creditors may have derivative claims against L&H for
fraud and equitable subordination, which L&H may seek to contest.

On each of these positions, the Committee told Judge Wizmur that
Milbank will advocate positions that will benefit one estate, or
one group of creditors, to the detriment of another estate or
group of creditors.

Notwithstanding this objection, Judge Wizmur entered an Order
authorizing the estate's employment of Milbank on the terms and
for the compensation stated in the Application. (L&H/Dictaphone
Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


LOEWEN: Debate Brews re 9% Discount Rate to Present Value Claims
----------------------------------------------------------------
Various parties have objected to The Loewen Group, Inc.'s motion
to apply a 9% discount rate to present value claims. The Debtors
noted that the objections all center around similar arguments
that:

      (1) The Promissory Note Motion cites no authority to support
the Debtors' contentions.

      (2) Under the legislative history to section 502(b)(2) of
the Bankruptcy Code, the Claims should not be discounted.

      (3) The amount of the Claims are not for "unmatured
interest" within the meaning of section 502(b)(2) of the
Bankruptcy Code and the Promissory Note did not include original
issue discount.

      (4) The commencement of a chapter 11 case accelerates the
unpaid principal amount of the debtor's obligations.

      (5) Discounting the Promissory Note is inappropriate because
the applicable Debtor already has received the "entire value" in
respect of the Promissory Note.

      (6) A claim asserted in respect of a Debtor's guaranty of
another Debtor's promissory note obligation should not be
discounted.

In their reply, the Debtors debunked each of these arguments as
being incorrect or irrelevant and should be overruled as a matter
of law.

First, about authority supporting the contentions for a discount
to the present value, the Debtors contended that they cited
abundant authority in the motion.

Second, the Debtors argued that the Objecting Claimants'
interpretation of the legislative history to section 502(b) of
the Bankruptcy Code is inconsistent with the relevant case law
and has absolutely no support in the plain language of section
502(b).

Third, the Debtors pointed out that they are in no way relying on
a characterization of the Claims as claims for unmatured interest
or as claims based on obligations that included original issue
discount. This issue, the Debtors contended, is totally
irrelevant to the matter.

Fourth, the Debtors argued that the acceleration of debt
resulting from the commencement of a bankruptcy case in no way
negates the requirement that the Claims be discounted.

Fifth, the Debtors refuted that the argument that the applicable
Debtor already has received the "entire value" in respect of the
Promissory Note is not true and, even if it were, would not
change the conclusion that the relevant Claim should be
discounted.

Finally, the Debtors contended that claims asserted in respect of
a Debtor's guaranty of the promissory note obligations should be
discounted.

                            Argument

The Debtors argued that discounting is required under Section
502(b) and the relevant case law authorities. The Debtors
reiterated that Section 502(b) of the Bankruptcy Code provides
that, with respect to a claim as to which an objection has been
made, the Court, after notice and a hearing, "shall determine the
amount of such claim . . . as of the date of the filing of the
petition." 11 U.S.C. 502(b) (emphasis added). Faced with the
issue of discounting of claims asserted on account of amounts
that a debtor was obligated to pay to a claimant over time
subsequent to the commencement of its chapter 11 case, courts
consistently have applied this provision of the Bankruptcy Code
and required that a discount rate must be applied to determine
the allowed amount of the claim. To allow a full recovery would,
in effect, over-compensate the claimants by the interest earning
power of the money in their hands now, the Debtors asserted.

The Debtors cited case law In re Winston Mills, Inc. 6 B.R. 587,
599-600 (Bankr. S.D.N.Y. 1980), In re Allegheny International,
Inc., 136 B.R. 396, 405 (Bankr. W.D. Pa. 1991), In re O.P.M.
Leasing Servs., Inc., 79 B.R. 161, 166 (S.D.N.Y. 1987), LTV Corp.
v. Pension Benefit Guaranty Corp. (In re Chateaugay Corp.), 115
B.R. 760, 769 (Bankr. S.D.N.Y. 1990)(Chateaugay I), vacated, LTV
Corp. v. Pension Benefit Guaranty Corp. (In re Chateaugay Corp.),
1993 WL 388809 (S.D.N.Y. 1993), LTV Corp. v. Pension Benefit
Guaranty Corp. (In re Chateaugay Corp.) 126 B.R. 165, 177 (Bankr.
S.D.N.Y. 1991)(Chateaugay II), vacated, LTV Corp. v. Pension
Benefit Guaranty Corp. (In re Chateaugay Corp.), 1993 WL 388809
(S.D.N.Y. 1993), LTV Steel Co. v. Aetna Casualty & Surety Co. (In
re Chateaugay Corp.), In re Thomson McKinnon Securities, Inc. 149
B.R. 61, 64 (Bankr. S.D.N.Y. 1992).

Within the Loewen chapter 11 cases, the Debtors pointed out that
a prior order has been entered by the Court (A) Reducing Claims
of Leslie C. Harper, Lewis A. Lenker and Jerry D. Holman (Claim
Numbers 3994 and 3995) and (B) Disallowing Claim of Leslie C.
Harper (Claim Number 3991) (D.I. 5738) (the Discount Rate Order).
The Debtors also mentioned that the Official Committee of
Unsecured Creditors in these chapter 11 cases has indicated that
it supports the discounting of the Claims in the manner proposed
in the Motions.

The Debtors contended that the interpretation of the legislative
history to section 502(b) of the Bankruptcy Code cited by some of
the Objecting Claimants is inconsistent with the plain language
of section 502 (b) and relevant case law. With respect to this,
the Debtors argued that under settled principles of statutory
interpretation, the legislative history cited by the Claimants
should not be utilized to alter the plain language of section
502(b), as evidenced in United States v. Gonzales, 520 U.S. 1, 6
(1997) and Toibb v. Radloff, 501 U.S. 157, 162 (1991).

Refuting the proposition that the Debtors received the "entire
value" in respect of the Promissory Note, the Debtors pointed out
that where a Claimant conveyed a business in exchange for a
Promissory Note, part of the economic agreement was that the
Claimant would be paid over time without interest under the terms
of the Promissory Note, but the Claimants now seek to have that
arrangement rewritten after the fact, so that they receive the
equivalent of a note promising to pay the entire remaining amount
on the petition date.

In response to some Claimants' assertion that the Claims should
not be discounted because the commencement of a chapter 11 case
accelerates the unpaid principal amount of all unmatured claims,
the Debtors contended that the concept of acceleration in this
context relates only to the principle embodied in the Bankruptcy
Code's definition of "claim" that a claim includes any right to
payment, whether or not such right is . . . matured or
unmatured." However, the amount of the claim that should be
allowed, the Debtors noted, cannot be determined by reference to
the Bankruptcy Code's definition of "claim" or the principle of
acceleration.

Responding in particular to Claimant Tecon and Trousdale's
assertion that their claims in respect of a Debtor's guaranty of
the promissory note obligations owed to them should not be
discounted, based on a default they asserted occurred when the
Debtors declined to make postpetition payments under the
Promissory Notes, the Debtors argued that they had no authority
under the Bankruptcy Code to make the postpetition payments.
Moreover, according to Tecon and Trousdale, acceleration of the
Promissory Notes would occur only after five days' notice of the
default in payment. The Debtors pointed out that Tecon and
Trousdale provided no evidence that they ever sent such a notice,
and even if such a notice had been sent, it would have been void
as a violation of the automatic stay. Therefore, the Debtors
concluded that Tecon and Trousdale's Promissory Notes have not
been accelerated, their argument failed and the Claims asserted
must be discounted to present value.

As for the proposed discount rate of 9% per annum to the Claims,
the Debtors noted that none of the objecting claimants has argued
that this discount rate is inappropriate. The Debtors reiterated
that this is a conservative measure of the rate of return
available to a "reasonably prudent investor", based on the advice
of the Debtors' financial advisor, Wasserstein Perella.

The Debtors noted that the reply applies to the objections to
their Promissory Note Motion as well as to Peoples Bank's
objection to the Claims Omnibus Objection No. 19.

In conclusion, the Debtors asserted that the Objections should be
overruled, and the Promissory Note Motion and the Overstated
Amounts Motion, as it relates to Peoples Bank, should be granted.
(Loewen Bankruptcy News, Issue No. 34; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


LTV CORP.: Judge Okays Jones Day's Employment Despite Objection
---------------------------------------------------------------
Making short shrift of the United States Trustee's objection to
The LTV Corporation's application to employ Jones, Day, Reavis &
Pogue as their lead bankruptcy counsel, Judge Bodoh granted the
Application on its terms and overruled the objection, approving
the employment retroactively to the Petition Date. However, to
avoid future problems Judge Bodoh ordered that Richard M. Cieri,
Jeffrey B. Ellman, and Michelle M. Morgan, all Jones Day
attorneys, are not to provide services to any of the secured or
potentially secured creditors identified in the Objection during
the pendency of these cases, but shall have a period of twenty
business days from entry of the Order to assist in the transition
of any pending matters for the secured parties to other Jones Day
attorneys or paraprofessionals. Judge Bodoh also cautioned the
firm against anything that might result in an actual conflict of
interest in these cases. (LTV Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc., 609/392-00900)


LTV CORPORATION: Canceling New Systems Development Activity
-----------------------------------------------------------
The LTV Corporation (OTC Bulletin Board: LTVCQ) is streamlining
its information technology functions to significantly reduce
costs. LTV will immediately cancel all new systems development
activities in anticipation of restructuring of LTV's integrated
steel business. This action will reduce the company's spending
for systems development by approximately 50%. Information systems
activities will be focused on satisfying the needs of LTV's steel
customers and increasing the efficiency of steel plant
operations. LTV expects that this action will result in a
significant reduction in the number of contract workers utilized
by its information technology department.

"LTV intends to reduce costs and increase effectiveness through
systems consolidation," said William F. Morgan, vice president-
information technology and chief information officer. "Future
systems development activities will be linked closely to the
restructuring plan currently being developed for the integrated
steel operations," he said. Mr. Morgan also said that the changes
would create a more variable cost structure, which is necessary
for cyclical businesses competing in a difficult global
environment.

"Our goal is to reduce information technology costs to less than
1% of sales, while providing excellent service to our customers
and accurate, timely and necessary information to our business
units," said John D. Turner, executive vice president and chief
operating officer. Mr. Turner said that today's action was
typical of the significant changes that will continue to occur
throughout LTV during the restructuring process. He noted that
today's action brings to nearly 200 the number of contract
workers that LTV has eliminated from its facilities since the
fourth quarter of 2000.

The LTV Corporation is a manufacturing company with interests in
steel and metal fabrication. LTV's Integrated Steel segment is a
leading supplier of high-quality, value-added flat rolled steel
to the transportation, appliance, electrical equipment and
service center industries. LTV's Metal Fabrication segment
consists of LTV Copperweld, the largest producer of tubular and
bimetallic products in North America and VP Buildings, a leading
producer of pre-engineered metal buildings.


MESA AIR: Shareholders to Meet in Phoenix on April 5
----------------------------------------------------
The 2001 Annual Meeting of Shareholders of Mesa Air Group, Inc.,
a Nevada corporation, will be held at the Phoenix Airport
Marriott, 1101 North 44th Street, Phoenix, Arizona, on April 5,
2001, at 10:00 a.m., Arizona Time, for the following purposes:

      (1) To elect seven (7) directors to serve for a one-year
term;

      (2) To amend the Company's Outside Directors' Stock Option
Plan to increase the aggregate number of shares available for
issuance thereunder from 150,000 to 275,000;

      (3) To amend the Company's Key Officer Stock Option Plan to
extend the duration of the plan and to allow certain options on
unpurchased shares to be reissued.

      (4) To consider a proposal introduced by a shareholder to
adopt cumulative voting;

      (5) To consider a proposal introduced by a shareholder to
adopt confidential shareholder voting;

      (6) To ratify the selection of Deloitte & Touche LLP as
independent auditors for the Company; and

      (7) To transact any other business which properly comes
before the meeting. Management is presently aware of no other
business to come before the meeting.

The Board of Directors has fixed the close of business on
February 28, 2001, as the record date for the determination of
shareholders entitled to notice of and to vote at the meeting.


METROCALL: Releases Fourth Quarter Results
------------------------------------------
Metrocall, Inc. (Nasdaq: MCLLC), a nationwide provider of
advanced two-way interactive messaging service, announced results
for the fourth quarter of 2000.

Total revenues for the fourth quarter were $141.7 million and net
revenues were $128.4 million. EBITDA (earnings before interest,
taxes, depreciation and amortization) was $32.6 million for the
quarter, an increase of $2.5 million or 8.3% over the third
quarter results. Ending subscriber units were 6,254,373
representing net additions of 120,632. Advanced messaging units
increased by 63,005 units to 112,526 and traditional paging units
increased by 57,627 to 6,141,847.

Summary of 4th Quarter Results

Metrocall's service, rent, and maintenance revenues from its
advanced messaging operations increased to $4.5 million for the
quarter from $2.1 million in the third quarter, due to the
placement of 63,005 net additions for the quarter. Service, rent,
and maintenance revenues from Metrocall's traditional operations
decreased to approximately $119.6 million for the quarter ended
December 31, 2000 from $123.2 million in the third quarter as net
internal growth was geared heavily towards the company's indirect
distribution channels such as resellers. Metrocall's net revenue,
including margin on product sales decreased by $4 million to
$128.4 million in the fourth quarter from $132.4 million in the
third quarter.

Metrocall's EBITDA or operating cash flow for the quarter was
$32.6 million an increase of $2.5 million from the quarter ended
September 30, 2000. This increase was attributable to decreases
in service, rent, and maintenance and general and administrative
operating expenses. Capital expenditures during the quarter were
approximately $28.7 million comprised of $8.8 million in
property, plant and computer related equipment and $19.9 million
for subscriber equipment.

During the fourth quarter, net borrowings under Metrocall's
credit facility increased by $28.0 million. At December 31, 2000,
Metrocall had $133.0 million outstanding under its $200.0 million
credit facility and approximately $626.0 million aggregate
principal amount of senior subordinated notes. Total debt was
approximately $761.9 million, which included capital leases. Cash
balances were $26.6 million.

Although Metrocall was in compliance with the financial covenants
of its credit facility at December 31, 2000, Metrocall is
currently unable to borrow any of the $67.0 million undrawn
amount remaining under its credit facility because its total
leverage (defined as net debt divided by annualized operating
cash flow) exceeded 5.5:1.0 on January 1, 2001.

During 2000, Metrocall's operations generated approximately
$128.7 million of EBITDA. In addition, it incurred $84.2 million
in interest costs and $111.8 million in capital expenditures. Its
free cash flow position was a negative $67.2 million, which was
funded principally from sale of equity ($51 million) and
borrowings under its credit facility.

Further details with respect to Metrocall's fourth quarter and
full year performance will be available in the company's 10-K to
be filed on or about March 30, 2001.

About Metrocall, Inc

Metrocall, Inc. headquartered in Alexandria, Virginia, is one of
the largest wireless data and messaging companies in the United
States providing both products and services to more than six
million business and individual subscribers. Metrocall was
founded in 1965, became a publicly traded company in 1993 and
currently employs approximately 3,500 professional's coast to
coast. The Company offers two-way interactive messaging, wireless
e-mail and Internet connectivity, cellular and digital PCS
phones, as well as one-way messaging services. Metrocall operates
on many nationwide, regional and local networks, including a new
Two-Way Interactive Network (TWIN), and can supply a wide variety
of customizable Internet-based information content services.
Also, Metrocall offers totally integrated resource management
systems and communications solutions for business and campus
environments. Metrocall's wireless networks operate in the top
1,000 markets all across the nation and the Company has offices
and retail locations in more than forty states. Metrocall is the
largest equity-owner of Inciscent, an independent business- to-
business enterprise, that is a national full-service "wired-to-
wireless" Application Service Provider (ASP). For more
information on Metrocall please visit the Web site and On-line
store at http://www.metrocall.com


METROCALL: Defers $19.5MM Interest Payment Due To Cash Shortfall
----------------------------------------------------------------
Although Metrocall, Inc.'s results for the fourth quarter
evidenced some positive aspects, the negative effects of
competition in the wireless industry continued to cause erosion
in the revenues received from traditional one-way paging
customers throughout the fourth quarter and into the first
quarter of 2001.

This revenue erosion will more than likely inhibit the company's
ability to grow its first quarter 2001 operating cashflow to the
level currently required to maintain compliance with the
financial covenants in its revolving credit facility. As a
result, absent a waiver from Metrocall's existing senior secured
lenders, the company will not have the ability to further access
its revolver and will not have sufficient cash for operations and
debt service. Additionally, without a bank waiver and access to
additional capital, Metrocall expects to receive a going concern
modification to its unqualified audit opinion from Arthur
Andersen in Metrocall's, soon to be filed, 10-K for the fiscal
year ending December 31, 2000.

As a result of the above, Metrocall's Board of Directors has
determined that in order to maximize value to all of Metrocall's
stakeholders while at the same time preserving cash necessary for
continued generation of the company's positive operating
cashflow, it will be necessary to defer the payment of interest
due on March 15, 2001 to holders of its 11% senior subordinated
notes due 2008 as well as interest due on April 1, 2001 to
holders of Metrocall's 10 3/8% senior subordinated notes due
2007. The aggregate of the semi-annual interest payments due on
these notes is approximately $19.5 million. Metrocall's Board of
Directors has determined that deferral of these payments is
necessary and prudent at this time to address the company's
liquidity.

With respect to this decision, William L. Collins III, Chairman,
President and Chief Executive Officer of Metrocall, stated
"Metrocall regrets having to make this decision but remains
hopeful that the long term effect of these decisions will
increase the company's value and benefit all interested parties,
including bondholders. Metrocall remains committed to maximizing
value and resolving its intermediate liquidity issues. Metrocall
placed the largest number of advanced messaging units into
service in the fourth quarter compared to any of its competitors
and during this restructuring process, and Metrocall will seek to
continue to grow its revenue from its two-way messaging business
in order to maximize value. Metrocall is also proud of the fact
that we have been able to retain and grow more traditional one-
way subscribers than our competitors and the revenue erosion we
have sustained in our traditional business has been much lower
relative to that of our direct competitors."

Metrocall has engaged Lazard Freres to advise it with respect to
evaluating strategic and financial options, including a strategic
business combination and potential balance sheet restructuring.
Metrocall has also engaged Banc of America Securities, LLC and
Wit Soundview to advise it as to specific strategic M & A
transactions. In addition, Metrocall's Board has formed a
subcommittee to work directly with Lazard Freres and the
company's other professionals in these endeavors.

As of December 31, 2000 and currently Metrocall has $133.0
million outstanding under its $200.0 million secured credit
facility. Metrocall expects EBITDA in 2001 to be adequate to pay
interest on its bank debt and fund capital expenditures.

Metrocall presently has approximately $626.0 million aggregate
principal amount outstanding of senior subordinated notes. These
outstandings include Metrocall's 11% senior subordinated notes
due 2008, 10 3/8% senior subordinated notes due 2007, 11 7/8%
senior subordinated notes due 2005, and 9 3/4% senior
subordinated notes due 2007. Metrocall does not anticipate at
this juncture that EBITDA in 2001 will be sufficient to satisfy
the entire interest expense associated with these senior
subordinated notes absent accomplishing a financial
restructuring. There is a 30-day grace period with respect to the
interest payments due under the applicable series during which
the notes may not be accelerated until the expiration of this
grace period. Metrocall will seek to promptly commence
discussions with its banks and bondholders about potential
restructuring alternatives.

Metrocall, along with Lazard Freres and Metrocall's other
professionals anticipates that the proactive position that it has
taken to address these concerns provides the best course for an
expeditious resolution. Metrocall can make no assurances that the
company's liquidity concerns will be successfully resolved,
including whether or not such events may take place under a plan
of reorganization in bankruptcy.


NETPULSE E-ZONE: Files For Chapter 7 Bankruptcy Protection
----------------------------------------------------------
Netpulse E-Zone Media Networks, Inc. filed for Chapter 7
protection with the U.S. Bankruptcy Court. Company founder Lee
Gufry commented, "We just went too fast instead of taking our
time. What we did learn is what we did wrong, and there was an
enormous appetite for the product and its services." The Company
stated that it intends to focus on its original vision of
engaging consumers in an intellectual and entertaining
environment. (New Generation Research, March 15, 2001)


NORD RESOURCES: Retains Meyners & Company as New Accountant
-----------------------------------------------------------
On March 6, 2001, Nord Resources Corporation designated Meyners &
Company, LLC, an independent member of the BDO Seidman Alliance,
500 Marquette Ave. NW, Suite 400, Albuquerque, New Mexico to act
as certifying public accountant for the company.

Meyners & Company, LLC replaces the previous accountant, KPMG
LLP, who resigned on January 29, 2001. On February 21, 2001, the
company filed a petition for reorganization pursuant to Chapter
11 of the United States Bankruptcy Code in the United States
Bankruptcy Court, District of New Mexico, Albuquerque, New
Mexico. The designation of Meyners & Company, LLC is subject
to approval by the Bankruptcy Court.

Nord Resources is a mining and development company which owns,
and plans to develop, the Johnson Camp copper mine in Arizona.
The company trades on the OTC Bulletin Board, symbol NRDS.


PAULA FINANCIAL: Reports Fourth Quarter Operating Losses
--------------------------------------------------------
PAULA Financial (Nasdaq:PFCO) announced an operating loss of
$2.46 per share for the fourth quarter of 2000, compared with
$3.15 per share for the 1999 period.

For the year, the company reported an operating loss of $2.67 per
share, compared with $2.12 for the 1999 period. Operating
earnings per share exclude the impact of realized investment
gains and losses and the impact of gains and losses of
unconsolidated affiliates.

Including the impact of realized investment gains and losses and
the impact of gains and losses of unconsolidated affiliates, net
loss for the fourth quarter of 2000 was $3.05 per share, compared
with $3.15 per share for the 1999 period. For the year, the
company reported a net loss of $3.51 per share, compared with
$2.35 per share for the 1999 period.

The company's insurance subsidiaries' GAAP calendar year net
combined ratio for 2000 was 125.7%, compared with 135.3% in 1999.
As previously announced, in the fourth quarter of 2000, the
company increased loss reserves on prior accident years,
principally 1998, by $18.2 million.

Jeff Snider, chairman and chief executive officer, also stated:
"A.M. Best recently announced that PAULA's rating was being moved
to `B-' with `developing implications.' The concern expressed by
A.M. Best, as we heard it, revolves around the company's
prospective leverage position, a business issue we acknowledge in
light of the reserving actions taken by the company in recent
years.

"The company began seeking quota share support more than a year
ago. The quota share agreement we announced last week is the
result; this new treaty is in addition to the quota share program
placed with Insurance Corporation of Hannover last July.

"We anticipated the re-levering issues that would occur if we
continued to aggressively acknowledge reserve development on
prior years. We believe the contracts we have negotiated address
the matter of operating leverage head on," added Snider.

"Gross premiums written continue to be down dramatically from
their peak in 1998 of $152 million to 2001 expectations of
approximately $85 million. This rotation in our top line is
necessary not only to achieve our pricing goals but is also
consistent with acknowledging the importance of achieving
acceptable leverage results.

"Three years ago management effectively placed our company in
voluntary rehabilitation. We are emerging from this position with
new quota share relationships and an excess of loss treaty
structure that confirms our better than industry loss severity
patterns.

"Additionally, as of Dec. 31, 2000, we have received waivers of
defaults from our bank facility; our outside actuaries have
certified the loss reserves; we had a constructive meeting with
A.M. Best; and we continue to work with the California Department
of Insurance on a regular basis," summarized Snider.

"I am encouraged about the company's prospects. Prices in
California are up again in 2001 and exposure is down. Also, along
with all the other activity, we have materially reduced fixed
expenses, and we will finish our exit as underwriters from the
Texas, Florida and Nevada markets this year," concluded Snider.

The company's agency operations continue to produce positive
results. Revenue in 2000 increased 32% in part due to favorable
pricing environments in both the workers' compensation and
accident and health sectors.


PAULA FINANCIAL: Executes Amended Credit Agreement
--------------------------------------------------
Since Dec. 31, 1999, PAULA Financial (Nasdaq:PFCO) has been out
of compliance with certain of its debt covenants. However, the
company has been and remains current on the term loan's regularly
scheduled principal and interest payments. In January 2001, the
company completed negotiations with its commercial lender and
executed an amended credit agreement.

Under the terms of the amended agreement, prior covenant
violations were waived, certain covenants were revised going
forward and the payment schedule was modified. Consistent with
the original agreement, the ultimate maturity date of the loan is
Dec. 31, 2001. Additionally, the company agreed to collateralize
the loan with the common stock of PAULA Insurance Co.

PAULA Financial is a California-based specialty underwriter and
distributor of commercial insurance products which, through its
subsidiary, PAULA Insurance Co., is one of the largest
underwriters specializing in workers' compensation insurance
products and services for the agribusiness industry.


PILLOWTEX CORPORATION: Hires Michael R. Harmon As New EVP & CFO
---------------------------------------------------------------
Pillowtex Corporation told the Court that, subject to Bankruptcy
Court approval pursuant to 11 U.S.C. Sec. 363, the Debtors have
recruited and hired Michael R. Harmon as their new Executive Vice
President and Chief Financial Officer. The Debtors asked Judge
Walsh for authority to hire Mr. Harmon and execute an employment
agreement memorializing the terms of Mr. Harmon's employment.

The Debtors reminded Judge Walsh that they have been seeking a
qualified individual to fill the position of Chief Financial
Officer for a substantial period of time. Mr. Harmon is
exceptionally qualified for the position. Mr. Harmon has
extensive financial experience in the textile industry. He was
employed by Burlington Industries, Inc. for 17 years, serving in
various capacities, including as Vice-President and Controller.
For approximately the last 13 years, he has been employed by
Galey & Lord, Inc., where he has served most recently as
Executive Vice President and Chief Financial Officer. The Debtors
are convinced that Mr. Harmon will be a significant addition to
their management team.

David G. Heiman, Esq., at Jones, Day, Reavis & Pogue outlines the
terms Mr. Harmon's Employment Agreement:

      (a) Base annual compensation of $350,000.

      (b) A $50,000 bonus guaranteed in the first year of
          employment and payable on the first anniversary date of
          employment.

      (c) Participation in the Emergence Performance Bonus Plan
          that will come before the Court as part of the Debtors'
          proposed key employee retention plan.

      (d) A severance benefit of one year's salary.

      (e) Reimbursement for relocation expenses.

      (f) Medical and other benefits consistent with the Debtors'
          policies.

The Debtors indicated that they are ready for Mr. Hannon to start
on March 19, 2001. Additionally, Anthony Williams, the Debtors'
Chief Operating Officer and President, is ready to step out of
the CFO's role and devote his full-time attention to his regular
position. (Pillowtex Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


PSA INC: Seeks To Implement Employee Retention Plan
---------------------------------------------------
PSA, Inc., ETS Payphones, Inc. and related entities sought court
authority to implement an employee retention plan.

Tier One employees shall be entitled to a bonus of five percent
of their annual salary. In addition, they shall be entitled to
two months salary in the event they remain employees until the
earlier of debtors receiving the proceeds from the closing of a
sale of substantially all debtors assets or substantial
consummation of a plan, they shall be entitled to two months
salary.

Tier Two employees, assuming that they remain an employee of
debtors until May 15, 2001 are entitled to a bonus of 2.5% of
their annual salary.


RED BELL: Recurring Losses Raise Going Concern Doubts
-----------------------------------------------------
Red Bell Brewing Company, a Pennsylvania corporation, was founded
on June 29, 1993 by James R. Bell, President and Chief Executive
Officer, and James T. Cancro, Director of Brewing Operations. Red
Bell's objective is to operate and continue to open in the future
high profile, strategically located brew pub locations featuring
its own beer as well as to increase awareness for case and keg
beer sales to wholesale distributors and retail locations. Red
Bell produces its speciality draft products in its technically
advanced main brewery, in historic Brewerytown, in Philadelphia,
Pennsylvania, as well as in its brew pub.

Red Bell currently produces ten styles of beer year round,
marketed under distinct brand names. Flagship brands are
Philadelphia Original Lager and Philadelphia Traditional Irish
Amber. Other principal products include Philadelphia Black & Tan,
Red Bell Cherry Stout, Philadelphia Original Light, Lemon Hill
Wheat, American Pale Ale, Red Bell Heffe-Weizen, Ahopalypse Now
(IPA), and Wee Heavy Scottish Ale. Red Bell markets its hand-
crafted ales and lagers through a third party independent
distribution network. The company sells beer in cases and kegs on
a wholesale basis.

In addition to the main brewery, Red Bell, since 1996 has
operated through its wholly-owned subsidiary, the Red Bell
Brewery & Pub Company, a smaller scale micro brewery (known as a
brew pub) in the First Union Center in Philadelphia,
Pennsylvania. The brew pub is operated under an agreement with
ARAMARK Leisure Services, Inc. (ARA). The First Union Center
location features high quality, moderately priced food along with
8 styles of the company's distinctive micro brewed beer. The brew
pub is open during all events (professional hockey, professional
basketball, indoor lacrosse, wrestling, concerts, ice skating,
conventions, etc.)at the First Union Center.

From inception through September 30, 2000, Red Bell has incurred
cumulative losses of $7,636,301. During the years ended December
31, 1999 and 1998, Red Bell has incurred losses of $1,671,045 and
$1,144,951, respectively. Further, as of September 30, 2000,
there was a stockholder's deficit of $2,648,705, and a working
capital deficit of $6,050,754. Red Bell has not been able to pay
its debts as they become due. As a result, Red Bell's independent
auditors have included an explanatory paragraph in their report
on the company's December 31, 1999 consolidated financial
statements raising doubt about the company's ability to continue
as a going concern.


SACO SMARTVISION: Obtains CCAA Protection from Montreal Court
-------------------------------------------------------------
Saco SmartVision Inc. announced that its motion for the issuance
of an initial order pursuant to the Companies' Creditors
Arrangement Act was granted Thursday by the Bankruptcy and
Insolvency division of the Superior Court in the district of
Montreal.

The initial order provides for a stay of all proceedings against
Saco for an initial period of thirty days, which period may be
extended by the Court.

In addition, the initial order authorizes Saco to file a plan of
compromise or arrangement with its creditors in accordance with
the Act. Ernst & Young Inc. has been appointed as Monitor under
the relevant provisions of the Act in order to assist Saco in
discussions with its creditors and in the preparation and filing
of the plan of compromise or arrangement.

Saco, which was profitable every year from 1989 until 1997, has
been experiencing financial difficulties since then. Management,
however, firmly believes that Saco remains a world leader in the
design and manufacture of large LED video screens, destined
primarily for use in the entertainment and sports industries.

Over the past few months, Saco has undertaken positive steps with
a view to realigning its corporate structure and balance sheet.
In this regard, the third quarter of 2000 was highlighted by the
installation of SMARTVISION(R) screens at Ohio State University
and at the University of Arkansas. In the view of management,
these projects, which have resulted in several new orders, have
opened up new market segments for Saco. Further, Saco is
presently in discussions with potential partners who are
considering injecting sufficient capital into Saco to allow it to
re-capitalize, renegotiate its debt and return to profitable
growth. The present proceedings will give Saco the time that it
needs in order to attain these objectives.

Saco further announced that Mr. Rhal Coulombe and Mr. Roger
Samson recently resigned from the board of directors of Saco.
Saco wishes to thank them for their contribution.

Saco's shares are listed on the Toronto Stock Exchange.


SAFETY-KLEEN: Elgint Rejects Agreements with Nevada Holdings
------------------------------------------------------------
Elgint Corporation and Nevada Holding Services, Inc., are parties
to an agreement dated on or about December 19, 1996. Pursuant to
this contract, Elgint engaged Nevada Holdings to provide Elgint
with:

      (1) Shared office space within the state of Nevada;

      (2) Nevada director(s); and

      (3) A Nevada officer/employee to oversee or arrange for,
          among other things, clerical support, maintenance of an
          office with regular business hours, and other related
          corporate governance matters.

Additionally, the contract provides that Nevada Holding will
sublet a portion of its office space to Elgint at the rate of
$3,500.00 per year.

The purpose of the Contract was to allow Elgint to exist as a
Nevada  corporation and to obtain certain tax advantages
available to eligible Nevada corporations. Because it is
anticipated that Elgint will cease to exist as a Nevada
corporation following the confirmation of a plan or plans of
reorganization in Safety-Kleen Corp.'s chapter 11 cases, the
Debtors believe that the Contract is no longer necessary.
Additionally, in the exercise of the Debtors' business judgment
and in an effort to reduce post-petition administrative costs,
the Debtors have determined that it is in the best interest of
their estates, their creditors, and all parties-in-interest for
Elgint to reject the Contract.

Gregg Galardi, David Kurtz, J. Gregory St. Clair, and Eric Davis
of the firm of Skadden, Arps, Slate, Meagher & Flom LLP,
representing Safety-Kleen Corp., sought and obtained
authorization from Judge Walsh to reject the executory contract
between Elgint and Nevada Holding. The rejection is effective as
of January 5, 2001, the date of the filing of the motion for
rejection.

Gregg Galardi said that the contract is burdensome to these
estates, and is not beneficial to the Debtors' current or future
business operations. By rejecting the contract, the Debtors will
avoid incurring unnecessary administrative expense obligations
with no corresponding benefit to the estates.

In his Order granting the Debtors' Motion, Judge Walsh further
ordered that any party asserting a claim for rejection damages
relating to the rejection of the Contract shall file a proof of
claim no later than 30 days from entry of the Order. (Safety-
Kleen Bankruptcy News, Issue No. 14; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


SOUTHERN CALIFORNIA: Terms CPUC Decision Irresponsible
------------------------------------------------------
Southern California Edison Company (SCE) released the following
statement in response to a California Public Utilities Commission
(CPUC) directive that the state's nearly bankrupt utilities
cannot implement their announced cost-cutting measures:

SCE expressed serious concern that a CPUC order prohibiting the
utility from implementing essential cost-cutting measures would
serve only to exacerbate its current financial crisis. The
measures announced by SCE in December and January were designed
to preserve our ability to provide electric service.

We believe it is irresponsible of the commissioners who voted in
the majority to disallow needed cash preservation measures. No
one would seek these cost reductions except in a situation where
they are necessary to preserve basic services. In the current
environment, a failure to act serves customers poorly.

It has been many months since California's electricity market
turned dysfunctional. The commission has failed on repeated
occasions to take the measures necessary to assure a reliable
supply of electricity and a stable rate structure. Instead, it
has driven the state's investor-owned utilities to the edge of
bankruptcy, and jeopardized the essential services they provide
millions of Californians. Meanwhile, the state continues to be
mired in an energy crisis that continues unabated.

Like any business or household, SCE must have the ability, as
needed, to increase revenues or reduce costs to maintain its
financial health. The public utilities commission continues to
deny us both options. This kind of undue micro-management --
preventing utilities from reasonable and temporary cost cutting
-- only perpetuates a remarkable episode of regulatory failure in
California.

An Edison International (NYSE: EIX) company, Southern California
Edison is one of the nation's largest electric utilities, serving
a population of more than 11 million via 4.3 million customer
accounts in a 50,000-square-mile service area within central,
coastal and Southern California. For more information on the
California electricity crisis, see www.sce.com.


STELLEX AEROSTRUCTURES: Selling Assets To Veritas Capital
---------------------------------------------------------
The Veritas Capital Fund, L.P. had agreed to acquire Stellex
Aerostructures, Inc. Stellex, headquartered in Woodland Hills,
California, is a leading full service provider of complex
aerostructure components and subsystems to the leading aerospace
and defense prime contractors. The company's subsidiaries include
Stellex Monitor Aerospace, Inc., based in Amityville, New York,
Stellex Precision Machining, Inc. based in Wellington, Kansas,
and Stellex Aerospace which includes Stellex Bandy Machining,
Inc., Stellex Paragon Precision, Inc., Scanning Electron Analysis
Laboratories, Inc., and General Inspection Laboratories, Inc.
Stellex Aerostructures had sales and employees of $122 million
and 700 respectively.

Stellex and its parent company, Stellex Technologies, Inc., filed
for Chapter 11 Bankruptcy Protection on September 12, 2000 in
Bankruptcy Court in Delaware. The closing of any sale of the
assets of Stellex Aerostructures will be subject to a public
auction supervised by the Bankruptcy Court and to the final
approval by the Bankruptcy Court. The auction is expected to
occur in April 2001, and the transaction, which is expected to
close on or before May 24, 2001, is subject to certain other
regulatory approvals.

The Veritas Capital Fund is a private equity firm based in New
York City that has been an active investor in defense and
telecommunications. Most recently, Veritas completed the $200
million acquisition of NYSE listed Tech- Sym Corporation, a
leading manufacturer of electronic systems for the defense
industry and subsystems for the telecommunications industry,
whose primary operations include Metric Systems, Enterprise
Electronics, and Trak Communications.

It is Veritas' intention to retain all of the Stellex employees
and management. In addition to the Tech-Sym acquisition, Veritas
portfolio companies include Integrated Defense Technologies Inc.,
Trak Communications, Worthington Precision Metals, Inc.,
Baltimore Marine Industries, and Republic Technologies
International Inc.

Robert B. McKeon of Veritas said, "We are pleased to be
associated with Stellex Aerostructures and its experienced
management team. Through our other investments in defense and
aerospace, we have developed a great appreciation of Stellex and
its capabilities. It is our goal to work with the management and
other members of Stellex to assist them in increasing the
company's growth in sales and profits over the coming years."

Christopher Bernhardt, Chairman and Chief Executive Officer
stated, "All of us at Stellex are excited about the prospect of a
partnership with Veritas and its portfolio companies. Veritas has
developed an outstanding reputation with its defense and
commercial customers of providing quality products on time and on
budget. Our employees will benefit from the stability Veritas
will provide them and the new opportunities for professional
growth and development."


SUN HEALTHCARE: Examiner Retains Gibson Dunn as Lead Counsel
------------------------------------------------------------
Kevin W. Pendergest, the duly appointed and Court approved
Examiner of the estates of Sun Healthcare Group, Inc., sought the
Court's approval, pursuant to sections 105(a), 327(a) and 1104 of
the Bankruptcy Code, for the employment and retention of Gibson,
Dunn & Crutcher LLP as co-counsel to the Examiner, nunc pro tunc
to the date on which Mr. Pendergest first consulted with GD&C to
represent him in connection with his appointment to serve as
examiner, i.e., February 12, 2001.

Mr. Pendergest told the Court that due to the complex nature of
the Debtors' business operations and various legal questions
which will likely need to be addressed he will need to employ
certain professionals to enable him to carry out his duties as
authorized by the Bankruptcy Code, which includes the preparation
of a confidential preliminary report with respect to his review
of the work product of the Debtors and their Professionals and
a work plan and estimated time requirements for the analysis and
evaluation of the Debtors' cost structure.

Mr. Pendergest believes that he requires the services of
competent counsel with experience in a wide-range of areas of the
law to assist him in:

      * preparing the Preliminary Report and subsequent reports;

      * dealing with the major constituencies;

      * evaluating the health care regulatory and labor law
consequences of revenue enhancing or cost saving measures that he
might recommend or of the work product of the Debtors and their
professionals;

      * interpreting the orders of the Bankruptcy Court, the
Bankruptcy Code, Bankruptcy Rules and the local rules;

      * preparing retention applications for professionals that he
may need to retain;

      * preparing fee applications for himself and professionals
that he may retain.

Mr. Pendergest said that he has selected GD&C because of its
extensive expertise and experience in relevant fields. The
Examiner believes that GD&C is well qualified to represent him as
examiner in these chapter 11 cases and that the retention of GD&C
is necessary and in the best interests of these estates.

Subject to the approval of this Court, GD&C will seek
compensation for its professional services on an hourly basis,
plus reimbursement of actual, necessary expenses and other
charges incurred by the firm. GD&C's standard hourly rates,
subject to change are:

      (a) partners - $440 to $620 per hour;
      (b) associates - $215 to $420 per hour;
      (c) legal assistants - $50 to $250 per hour.

Mr. Pendergest submitted that, to the best of his knowledge, the
members, counsel and associates of GD&C neither represent nor
hold any interest adverse to the Examiner, the Debtors and/or the
Debtors' bankruptcy estates, except as set forth in the
accompanying declaration of Gibson, Dunn & Crutcher LLP.

The Application is supported by the Declaration of Mr. James P.
Ricciardi, the president and the sole shareholder of a New York
professional corporation, James P. Ricciardi, P.C., which is a
partner of the law firm of Gibson, Dunn & Crutcher LLP.

In his Declaration, Mr. Ricciardi told the Court that given the
size of GD&C's practice, it is virtually impossible to conceive
of a major chapter 11 case in which at least some of GD&C's
current or former clients, or their attorneys and accountants,
would not have business relationships with or hold claims against
the Debtors. GD&C, Mr. Ricciardi said, is an international law
firm with more than 700 attorneys and has a diversified legal
practice that encompasses the representation of many financial
institutions and commercial corporations. Mr. Ricciardi submits
that, in his experience, the fact that some current or former
clients of GD&C, or their attorneys and accountants, may hold
claims against the Debtors or otherwise be involved in these
cases will not impair GD&C's ability to represent the Examiner.

Mr. Ricciardi further submitted that he has reviewed Preliminary
Conflicts Lists and the Professional Firms. Some of the entities
are or may consider themselves to be creditors, parties in
interest in the Debtors' pending chapter 11 cases or otherwise to
have interests in the cases. Based on the relationship of the
entities with the Debtors, he has found that, with respect to:

      (1) Debtors

      Certain parties and/or their affiliate(s) may be considered
to be (a) a former client of GD&C in matters unrelated to these
cases, (b) a party in a matter where GD&C represented or
currently represents an opposing party or (c) an interested party
in an unrelated bankurptcy case, where GD&C represented or
currently represents a party: Americare Health Services
Corporation, Americare of West Virginia, Inc., Care Enterprises,
Inc., Lake Health Care Center, Inc., The Mediplex Group. Inc.,
The Phoenix Associates, PRI, Inc. and Regency Health Services,
Inc.

      (2) Top 20 Creditors Under Debtors' Senior Credit Facility

      Certain parties, and/or their affiliates may be considered
to be (1) a current client of GD&C in matters unrelated to these
cases, (2) a former client of GD&C in matters unrelated to these
cases, (3) a party in a matter unrelated to these cases, where
GD&C represented or currently represents an opposing party or (4)
an interested party in an unrelated bankruptcy case, where GD&C
represented or currently represents a party: Bank of America,
Banque Paribas, Chase Manhattan Bank, Credit Lyonnais, Credit
Suisse First Boston, Dresdner, FINOVA Capital Corporation,
Foothill Income Trust, General Electric Capital, Highland Capital
Management, Industrial Bank of Japan, Pam Capital Funding,
RaboBank Nederland, Sumitomo Bank and Wells Fargo Bank.

      (3) Top 20 Bondholders

      Certain parties, and/or their affiliates may be considered
to be (1) a current client of GD&C in matters unrelated to these
cases, (2) a former client of GD&C in matters unrelated to these
cases, (3) a party In a matter unrelated to these cases, where
GD&C represented or currently represents an opposing party or (4)
an interested party in an unrelated bankruptcy case, where GD&C
represented or currently represents a party: Bank of New York,
First Union National Bank, Sun Trust Bank and U.S. Bank Trust.
GD&C represents FINOVA Capital Corporation and its affiliates as
principal outside counsel with respect to the restructuring of
the FINOVA Entities' bank debt and other matters.

      (4) Top 20 Unsecured Creditors

Parties, and/or their affiliate(s) that may be considered to be
(1) a current client of GD&C in matters unrelated to these cases,
(2) a former client of GD&C in matters unrelated to these cases,
(3) a party in a matter unrelated to these cases, where GD&C
represented or currently represents an opposing party or (4) an
interested party in an unrelated bankruptcy case, where GD&C
represented or currently represents a party are: Blue Cross of
California, Continental Medical Systems, Inc., Home Care Pharmacy
of WV, Kaiser Foundation Health Plan, MCI World Com Advanced
Networks and Norwest Bank New Mexico.

      (5) The Professional Firms

Again, certain parties, and/or their affiliates parties may be
considered to be (1) a current client of GD&C in matters
unrelated to these cases, (2) a former client of GD&C in matters
unrelated to these cases or (3) a professional retained in a
matter unrelated to these cases, where GD&C represented or
currently represents a party: Arthur Andersen & Co., Crossroads,
LLC, Houlihan, Lokey, Howard & Zukin, Inc., O'Melveny & Myers
LLP, Otterbourg, Steindler, Houston & Rosen, P.C.,
PriceWaterhouseCoopers LLP, Richards, Layton & Finger, P.A.,
Stevens & Lee, Young, Conaway, Stargatt & Taylor. LLP and Weil,
Gotshal & Manges LLP.

Mr. Ricciardi submitted that GD&C has not represented and does
not currently represent any of the entities mentioned above,
their respective attorneys and accountants or their affiliates in
matters related to the Debtors' pending chapter 11 cases, nor
does GD&C have any relationship with any of these parties that
would be adverse to the Debtors, the Examiner or the Examiner's
proposed financial advisor, Crossroads, LLC.

Mr. Ricciardi also revealed that GD&C has worked on several
occasions in cases where Crossroads, LLC, the Examiner's proposed
financial advisor, has provided management or consulting services
to clients of GD&C, including the bankruptcy cases of Primary
Health Systems, Inc. and its affiliated debtors and Money's
Mushrooms Ltd. and its affiliated debtors, currently pending in
the District. JD&C also represents a bank group in a pending
work-out where Crossroads, LLC is the interim management for the
distressed company.

Overall, Mr. Ricciardi believes that GD&C is a "disinterested
person" as defined in section 101(14) of the Bankruptcy Code and
GD&C does not hold or represent an interest adverse to the
Debtors, the Examiner or the Examiner's proposed financial
advisor, Crossroads, LLC as to the matter in which it is
to be employed, as required by section 327(a) of the Bankruptcy
Code. Specifically, Mr. Ricciardi does not believe that the
connections between GD&C and the entities described in the
declaration will in any way impair GD&C's ability to loyally and
zealously represent the Examiner in connection with these chapter
11 cases. (Sun Healthcare Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


TENFOLD: Closing Offices & Cutting Jobs To Reduce Costs
-------------------------------------------------------
TenFold Corporation (Nasdaq: TENF), a provider of large-scale
applications and the Universal Application(TM), will close its
offices in Atlanta, Georgia; Irving, Texas; Foster City,
California; and Raleigh, North Carolina, and reduce its workforce
by approximately 10 percent. TenFold said these changes are being
made to consolidate its workforce in fewer locations, improve
operating efficiencies, and reduce operating costs.

TenFold also announced that it anticipates reporting
significantly greater operating losses in the fourth quarter of
2000 than it did in the third quarter of 2000. The increased
losses result primarily from project renegotiations, project
delays, restructuring charges, loss accruals, and decreased
sales. TenFold expects to announce its results for the fourth
quarter and year 2000 before the end of this month, after its
independent auditor completes its audit of the company's
financial statements. As part of the year-end audit process, the
company's auditors are making an independent assessment of
whether existing cash balances will be sufficient for the
remainder of 2001.

In addition, TenFold announced several litigation-related
matters, including the resolution of a previously disclosed legal
dispute with Unitrin Services Company. The resolution, which is
set forth in a confidential settlement agreement, provides for a
full release of TenFold and the dismissal of all pending
litigation. TenFold also reported disputes with three customers:
Crawford & Company, one of TenFold's insurance customers, has
canceled its agreement with TenFold and is seeking a refund of
all amounts previously paid to TenFold plus a $2 million penalty
under the agreement; Utica National, another insurance customer,
has filed suit against the company and is seeking a refund under
the company's guarantee, plus other damages arising out of
alleged tortious conduct; and another customer has informed
TenFold of its intent to cancel its agreement with TenFold and to
seek a refund under the company's guarantee. TenFold disputes
each of these claims and intends to vigorously defend them. In
addition, TenFold and Perot Systems Corporation have mutually
agreed to end their strategic relationship.

TenFold also disclosed the sale of The LongView Group, Inc. for
$29 million to Linedata Services, a leading European applications
services provider in the financial services industry.

                         About TenFold

TenFold Corporation (Nasdaq: TENF) is a provider of large-scale
applications for customers in communications, energy, financial
services, healthcare, insurance, and other industries. Using its
patented Universal Application(TM), TenFold delivers dynamic
packaged applications that meet customers' needs in rapidly
changing business environments, and that are flexible to adapt to
changing needs over time. For more information, call (800)
TENFOLD or visit www.10fold.com.


TRI VALLEY: Del Monte Scoops-Up S&W Assets for $39 Million
----------------------------------------------------------
Del Monte Foods Company (NYSE:DLM) completed its acquisition of
the S&W branded food business, as well as related brands and
existing inventory, from Tri Valley Growers for approximately $39
million in cash. S&W branded products include canned fruits,
tomatoes, beans, specialty sauces and vegetables. Del Monte
expects the acquisition to add approximately $100 million in
sales and to be accretive to earnings in the first full fiscal
year.

"With the acquisition of S&W, Del Monte is taking another
important step in its strategy to grow by expanding its lines of
premium quality, nutritious and easy-to-use foods," said Richard
G. Wolford, Chairman and Chief Executive Officer of Del Monte.
"S&W is a perfect fit with Del Monte's current portfolio of
premium brands. Its highly regarded product line, which includes
offerings that are new for Del Monte such as beans and specialty
sauces, complements our existing lines and enables Del Monte to
access new markets. Importantly, we also will leverage our
selling and operating infrastructure, resulting in what we
believe will be significant synergies."

Del Monte will absorb S&W's businesses, including almost all
production, into its existing operations. Sales and
administration functions, including S&W's international
distribution, also will be folded into Del Monte's existing
organizational structure. The Company believes this can be
accomplished with minimal capital investment, yielding
significant operational and administrative cost savings.

Del Monte Foods Company, with net sales of approximately $1.5
billion in fiscal 2000, is the largest producer and distributor
of premium quality, branded processed fruit, vegetable and tomato
products in the United States. The Del Monte brand was introduced
in 1892 and is one of the best known brands in the United States.
Del Monte products are sold through national grocery chains,
independent grocery stores, warehouse club stores, mass
merchandisers, drug stores and convenience stores. The Company
also sells its products to the U.S. military, certain export
markets, the foodservice industry and food processors. The
Company operates fourteen production facilities and seven
distribution centers in the U.S., has operations in Venezuela and
owns Del Monte brand marketing rights in South America.

Tri Valley has been engaged in serious talks with other
prospective buyers too. The fruit and tomato cooperative hired
Goldsmith-Agio-Helms of Minneapolis to handle disposition of the
assets. "There have been quite a few companies that have come
forward and we think it could turn into an auction process," said
spokeswoman Maya Pagoda of Sitrick and Co., a Los Angeles public
relations firm hired to handle Tri Valley's bankruptcy.

Tri Valley Growers, considered the nation's largest canned fruit
and tomato processors, filed for Chapter 11. The petition was
filed in the U.S. Bankruptcy Court for the Northern District of
California in Oakland.


VERDANT BRANDS: Sells Canadian Assets to Woodstream to Pay Lender
-----------------------------------------------------------------
Verdant Brands, Inc.'s (NASDAQ: VERD.OB) senior secured lender
has completed the foreclosure sale of the Company's Canadian
assets to Woodstream Corporation. In November 2000, Woodstream
purchased the US operating assets associated with the
environmentally-sensitive insecticide, pest control, and
fertilizer products sold through retail distribution. These
products are sold under the Safer, Surefire and Ringer brand
names. Woodstream Corporation develops and markets complimentary
environmentally-sensitive products for the retail markets under
the brand names of Victor and Havahart.

The proceeds of both transactions have been used by the Company
to pay down its indebtedness to its senior secured lender. The
Company has been operating under a Standstill Agreement that
expired as of February 2, 2001. The senior secured lender has not
yet granted an extension of the Standstill Agreement;
accordingly, there are no assurances that funding of operations
by the present lender will continue. Efforts continue to find a
new source of working capital.

Verdant Brands also markets products that are sold to commercial
markets through its wholly owned subsidiary, Consep, Inc. Consep
markets environmentally-sensitive insect and pest control
products to commercial, retail and the agri-business community.


VERDANT: Inks New Standstill Agreements With Secured Lender
-----------------------------------------------------------
On February 27, 2001, Verdant Brands, Inc., and its subsidiary
Consep, Inc., signed new standstill agreements with its senior
secured lender. The Consep standstill agreement provides for
limited funding for the continued operations of Consep. The
senior secured lender has agreed to provide this funding in
exchange for Consep assigning all of its assets to a third-party
assignee, who will be responsible for maximizing the value of
Consep's assets for all of its creditors. It is anticipated that
the third-party assignee will pursue the sale of Consep as a
going concern in order to maximize the value of Consep's assets.
Following the sale by Verdant of its other operating entities
over the past four months, Consep is currently Verdant Brands'
only remaining operating entity.

With the transfer of the Consep assets to the third-party
assignee, the new standstill agreement for Verdant Brands
provides for the company to retain 50% of the proceeds from the
disposition of its remaining collateral, primarily receivables
due from sales to retailers. These proceeds are anticipated to be
used to pay for the expenses of winding up the affairs of the
company.


VISTA EYECARE: Files Reorganization Plan in N.D. Georgia
--------------------------------------------------------
Vista Eyecare, Inc. (OTC Bulletin Board: VSTAQ) and its
subsidiaries have filed Plans of Reorganization with the United
States Bankruptcy Court for the Northern District of Georgia. The
Plans are supported by the Official Committee of Unsecured
Creditors representing all unsecured creditors and having
approximately $100 million in claims among the members of the
Committee.

On the basis of financial models prepared jointly by Vista and
financial advisors to Vista and the Committee, the enterprise
value of the reorganized company is approximately $150 million.
Unsecured creditors will receive 12% secured notes with a face
value of $120 million and equity in the Reorganized Debtor.
Because the enterprise value of the reorganized company will be
less than the estimated total unsecured debt of $175 million, the
current common shareholders of Vista Eyecare, Inc. will not
receive a distribution under the Plans.

James W. Krause, Chairman of Vista Eyecare, Inc., stated that,
"This is an important milestone towards our emergence from
Chapter 11. We currently expect to emerge during May 2001 as a
very lean and very focused organization with a sound capital
structure. We have historically operated our core host operations
at a very high level of performance and profitability. Going
forward, we expect to meet, or exceed, those profitability levels
as the cloud of uncertainty is removed."

McDonald Investments, Inc. of Cleveland, Ohio has served as
financial advisors to Vista in connection with the preparation of
the Plans of Reorganization. The Official Committee of Unsecured
Creditors has been advised by Houlihan, Lokey, Howard, & Zukin,
of Los Angeles, California.

Confirmation of the Plans is subject to customary terms and
conditions, including the approval of the Bankruptcy Court.
Vista Eyecare, Inc. is one of the nation's largest retail optical
companies. The Company filed for protection under Chapter 11 of
the bankruptcy laws on April 5, 2000.


VLASIC FOODS: Creditors Object To Use Of Cash Collateral
--------------------------------------------------------
The Official Committee of Unsecured Creditors, represented by
Michael Lastowski and Mark J. Packel of the Wilmington law firm
of Duane, Morris & Heckscher, together with Robert T. Schmidt and
Mitchell A. Seider of the New York firm of Kramer, Levin,
Naftalis & Frankel LLP, objected to entry of a final order
approving and granting Vlasic Foods International, Inc.'s Motion
for authority to use cash collateral. While the Committee
believes that the Debtor should be permitted to use cash
collateral on terms consistent with the requirements of the
Bankruptcy Code, the Committee told Judge Walrath that the terms
in the present Motion contravene those principles at the expense
of unsecured creditors of this estate. The Committee urged Judge
Walrath to approve the use of cash collateral, but to authorize
only adequate - not unnecessary - protection of the rights of
entities asserting security interests in the Debtors' property.

The Committee reviewed the proposed Final Order and noted it
gives the secured creditors, which the Committee said includes a
group of banks and certain insiders, four different types of
protection. These are (1) replacement liens, (2) first-priority
senior security interests in and liens on all unencumbered
prepetition and postpetition assets, (3) cash payments of accrued
and unpaid fees and interest on the prepetition debt incurred
prior to commencement of these Chapter 11 cases, and (4) current
postpetition cash payments of fees and interest on the
prepetition debt.

The Committee suggested that the adequate protection provided by
(1) and (2) should be mutually exclusive of those in (3) and (4),
as the latter payments are not appropriate in the circumstances
of this case, if they would be in any case. The purpose of
adequate protection, the Committee reminded Judge Walrath, is to
protect parties asserted secured claims from any diminution in
the value of their secured claims as such claims may be allowed.

Specifically, the Committee told Judge Walrath that she should
not authorize the use of cash collateral to pay prepetition
claims which may not be allowable and which may not be
oversecured. The proposed Final Order assumes that the Court has
made findings with respect to the claims of the lenders and the
Dorrance family participants, the value of the property securing
these claims, the validity of the security interests, and the
reasonableness of the fees, costs, and charges the lenders and
the Dorrance family may have incurred, but which are not
disclosed or presented to the Committee and other participants
for review. Such findings are premature at this time. The
Committee also said that the magnitude of these costs and fees,
interest and other charges on the lenders and the Dorrance
family's debt of $319 million will "choke the Debtor's
postpetition liquidity" and thereby dictate within the first
weeks of these cases how they will end. The Committee objects to
"piling on" adequate protection when it is neither necessary nor
appropriate, and when it provides the lenders and the Dorrance
family to be paid postpetition on their prepetition debts.

Additionally, the Committee said that the carve-out to which all
of the prepetition liens, adequate protection liens, and
superpriority claims being granted to the prepetition lenders are
subject and subordinate, covers only the fees required to be paid
to the Office of the United States Trustee, the Clerk of the
Court, and any accrued and unpaid amount due under a proposed
employee retention program. There is no inclusion in the carve-
out of the fees and expenses of the Committee and its legal
and financial advisors. The carve-out should include these fees
and expenses so that the Committee may fulfill its statutory
obligations. (Vlasic Foods Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


BOND PRICING: For the week of March 19-23, 2001
-----------------------------------------------
Following are indicated prices for selected issues:

Amc Ent 9 1/2 '05                   80 - 82
Amresco 9 7/8 '04                   54 - 56
Asia Pulp & Paper 11 3/4 '05        24 - 27 (f)
Chiquita 9 5/8 '04                  44 - 45 (f)
Federal Mogul 7 1/2 '04             20 - 22
Globalstar 11 3/8 '04                8 - 9 (f)
Oakwood Homes 7 7/8 '04             39 - 42
Owens Corning 7 1/2 '05             29 - 31 (f)
PSI Net 11 '09                      11 - 13 (f)
Revlon 8 5/8 '08                    49 - 51
Sterling 11 3/4 '06                 51 - 53
Telegent 11 1/2 '07                  5 - 7
TWA 11 3/8 '06                       6 - 9 (f)

                            *********

Bond pricing, appearing in each Monday's edition of the TCR, is
provided by DLS Capital Partners in Dallas, Texas.

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.

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.


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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. Debra Brennan, Yvonne L.
Metzler, Aileen Quijano and Peter A. Chapman, Editors.

Copyright 2001.  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 $575 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 301/951-6400.

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