---

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

             Thursday, March 29, 2001, Vol. 5, No. 62

                            Headlines

ALLEGHENY ENERGY: Moody's Cuts Senior Unsecured Notes To Baa1
AVISTA CORPORATION: Senior Ratings Falling & Outlook Negative
BIG V HOLDINGS: Hires Willkie Farr & Gallagher as New Counsel
CHYPS CBO: Fitch Places Two High-Yield CDOs on Credit Watch
DRUG EMPORIUM: Files Chapter 11 Petition in N.D. Ohio

DRYPERS CORP.: Has Until June 7 to Assume & Reject Leases
eMACHINES INC.: Appeals Nasdaq's Move To Delist Shares
ERGO SCIENCE: Receives Nasdaq Notice Of Delistment
FINOVA GROUP: Paying Prepetition Tax Obligations
FLOORING AMERICA: Bondholders Seek to Convert Case to Chapter 7

FRANK'S NURSERY: Wins Final Court Nod for $100 Million DIP Loan
GOLF TRUST: Raises $5.2 Million from Sale of Two Golf Courses
HARNISCHFEGER INDUSTRIES: Moves to Splinter IBM Master Lease
INTEGRATED HEALTH: Taps Sotheby's Inc. for Fine Art Auction
JACOM COMPUTER: Wants To Reject Certain Real Property Leases

JACOM COMPUTER: Seeks to Extend Exclusive Period through June 9
LIFE UNIVERSITY: Moody's Puts Baa2 Bond Rating Under Review
LIVENT US: Plan Confirmation Hearing Continues on July 24
LOEWEN GROUP: Ridgewood Dumps CRG Construction Agreement
MARINER: American Pharmaceutical Settles Litigation Claims

MERCURY WASTE: Nasdaq Delists Shares, Now Trading on OTCBB
METAL MANAGEMENT: Selling 31.6-Acre Ohio Property for $9.5MM
MONTGOMERY WARD: Sears Roebuck Buys 18 Stores & 10 Auto Centers
NORTHPOINT COMMUNICATIONS: Clarifies Results of Auction Process
OWENS CORNING: Has Until May 4 To Decide On New York Lease

OWENS CORNING: Court Gives Go-Ahead for Tobacco Lawsuit
PACIFIC GAS: Banks Agree to Extend Forbearance Until April 13
PILGRIM AMERICA: Standard & Poor's Begins Watching CBO Ratings
POLAROID: Senior Ratings Drop To Low-B Levels
POLAROID: Who's Who in the Bank Loan Syndicate

RAYTECH CORPORATION: Reports 2000 Financial Results
RHYTHMS NETCONNECTIONS: Fitch Cuts Senior Notes Rating To CCC
SPRING HILLS: Caledonia Mining Issues Payment Default Notice
STERLING CHEMICALS: Appoints Paul Vanderhoven As New VP & CFO
SUN HEALTHCARE: Transfers Three SunBridge Healthcare Facilities

TESSERACT GROUP: Michael Lynch Replaces Lucian Spataro As CEO
TESSERACT GROUP: Raises $250K From Asset Sale To Arizona Company
UNITED ARTISTS: Publishes 2000 Operating Results
US INDUSTRIES: Fitch Downgrades Senior Notes To Low-B's
VENCOR INC.: Court Okays Lease Termination Pact With TLC

WEST COAST: Files Chapter 7 Petition in Wilmington
WEST COAST: Chapter 7 Case Summary
WORLD ACCESS: Engages UBS Warburg to Help Restructure Debt

                            *********

ALLEGHENY ENERGY: Moody's Cuts Senior Unsecured Notes To Baa1
-------------------------------------------------------------
Approximately $1.4 billion of debt securities were affected
with the downgrade of Allegheny Energy, Inc.'s (AYE) debt
ratings.

Moody's Investors Service lowered the power firm's senior
unsecured notes to Baa1 from A3 and its commercial paper rating
from Prime-1 to Prime-2. The rating outlook for AYE's senior
unsecured notes is negative.

Allegheny is the holding company of West Penn Power Company
(WPP), Monongahela Power Company (MP), The Potomac Edison
Company (PE), and Allegheny Generating Company.

These rating changes are based primarily on the restructured
business profile of the holding company as a result of
regulatory settlement in most of the states in which its
subsidiaries operate.

Allegheny Energy Supply Company LLC (AE Supply) (Baa1 senior
unsecured), which has consolidated AYE's deregulated generating
assets now accounts for the majority of cashflow and
distributions to the parent company.

It currently owns 6,472 megawatts of generating capacity, the
majority of which were transferred by WPP and PE, formerly
vertically-integrated utility subsidiaries of AYE and which now
function as pure transmission and distribution companies.

AYE's third utility subsidiary, MP, will transfer 351 megawatts
of generating capacity in Ohio and anticipates the transfer of
an additional 2,083 megawatts in West Virginia during 2001 to AE
Supply.

The company has announced an additional 4,268 megawatts of
generating capacity either through acquisition or greenfield
construction in Arizona, Illinois, Indiana, Pennsylvania and
Tennessee.

The negative rating outlook of AYE is reflective of the AE
Supply's majority contribution to the parent company and its
near term financing risk associated with the company's growth
strategy from both a financing needs perspective and a
challenging non-regulated environment.

Allegheny Energy Inc. is headquartered in Hagerstown, Maryland.


AVISTA CORPORATION: Senior Ratings Falling & Outlook Negative
-------------------------------------------------------------
Fitch has assigned a `BBB-` rating to Avista Corporation's
proposed new $300 million issue of senior unsecured notes due
2008 and lowered the ratings of Avista Corp.'s outstanding
securities one notch to these levels. The rating outlook is
negative.

Rating actions are as follows:

                                    From         To
                                    ----         --
      -- Senior secured debt       `BBB+'       `BBB';
      -- Senior unsecured debt     `BBB'        `BBB-`;
      -- Preferred stock           `BBB-`       `BB+';

      -- Commercial paper is affirmed at `F2'.

The rating action reflects Avista Corp.'s rising deferred fuel
and purchased power balances resulting from electricity and
natural gas costs that exceed the amounts currently included in
retail rates.

The negative outlook reflects the potential for hydro conditions
to worsen beyond expectations, and create a greater amount of
deferred costs than anticipated.

The utility is not currently planning to request a rate increase
to reduce the electric deferrals, based on expectations that
after peaking later this year the deferrals will gradually
reduce as some wholesale contracts roll off and additional
generation is added by the end of 2002.

However, if hydro conditions worsen, or thermal outages occur,
the company has notified the Washington Utilities and
Transportation Commission (WUTC), in a filing made March 20 that
addresses the recovery method for the electric deferral balance,
that it would need to file for a price increase.

Avista will need WUTC approval to continue the deferral
mechanism through the end of 2002. Ultimate recovery of these
costs is uncertain and the deferred amounts are a notable
percentage of utility equity.

Funding the deferrals is pressuring liquidity. Further liquidity
stress comes from Avista Corp. providing support to unregulated
subsidiaries in the telecommunications, internet-based energy
management and alternative generation businesses. These
businesses remain in a start-up mode, and are not yet
profitable.

Consolidated financial results from trading gains at the
unregulated energy trading subsidiary benefited Avista Energy in
2000.

However, Avista has not received upstream cash distributions
from its subsidiary since substantially all of Avista Energy's
assets are pledged as security under the terms of its bank
credit agreement.

Avista has drastically reduced the scope of its trading book,
yet retains several healthy in-the-money positions in the
western United States. Some unpaid receivables net of reserves
exist, however, from the California Independent Systems Operator
and Power Exchange.

Financial ratios at the utility have weakened over the past
year. While some improvement is expected during 2001-2002,
EBITDA/Debt is expected to remain at or below 20%, with
EBITDA/Interest expense in the low 2 times (x) range.
Fitch views Avista's business risk profile as improving relative
to recent years. Senior management changes have resulted in a
return to a more conservative strategy.

Avista is now focused on managing its retail load, and only
selling power from owned generation in the Pacific Northwest to
the extent excess is available.

Avista Corp. is a vertically integrated utility headquartered in
Spokane, Washington.


BIG V HOLDINGS: Hires Willkie Farr & Gallagher as New Counsel
-------------------------------------------------------------
Big V Holdings Corp., et al. sought and obtained permission from
the U.S. Bankruptcy Court in Wilmington to employ and retain
Willkie Farr & Gallagher as counsel for the debtors.

The firm may be requested to render the following services to
the debtors:

      * Provide the debtors with advice, represent the debtors,
and prepare all necessary documents on behalf of the debtors, in
the areas of corporate, real estate, employee benefits, business
and commercial litigation, tax, debt restructuring, bankruptcy
and, if requested, asset dispositions;

      * Take all necessary actions to protect and preserve the
debtors' estates  during the pendency of their Chapter 11 cases,
including the prosecution of actions by the debtors, the defense
actions commenced against the debtors, engaging in negotiations
concerning all litigation in which the debtors are involved and
the objection to claims filed against the estates;

      * Prepare all necessary motions, applications, answers,
orders, reports and papers in connection with the administration
of the Chapter 11 cases;

      * Counsel the debtors with regard to their rights and
obligations as debtors in possession; and

      * Perform all other necessary legal services.

According to the affidavit of Myron Trepper, member of the firm,
the firm will charge its standard hourly rates for work of this
nature.


CHYPS CBO: Fitch Places Two High-Yield CDOs on Credit Watch
-----------------------------------------------------------
Fitch has placed Chyps CBO's two collateralized debt obligations
(CDOs), backed predominantly by high yield bonds, on Rating
Watch Negative.

These ratings actions are being taken after reviewing the
performance of each transaction. Increased levels of defaults
and deteriorating credit quality of each portfolio have
increased the credit risk of these transactions to the point the
risk may no longer be consistent with the tranche's rating.
The following securities have been placed on Rating Watch
Negative:

Chyps CBO 1997-1 Ltd./Corp.

      -- $164,500,000 class A-2A & A-2B notes `AAA';
      -- $57,100,000 class A-3 notes `A-';
      -- $42,400,000 class B notes `BBB-'.

Chyps CBO 1999-1 Ltd./Corp.

      -- $55,851,485 class A-3A & A-3B notes `A-';
      -- $13,000,000 class B-1 notes `BBB-';
      -- $18,000,000 class B-2 notes `BB'.

It is probable that there will be rating actions taken, but more
information is needed to determine what the exact impact will
be. Fitch is continuing to gather information and will take
further action when the analysis is completed.


DRUG EMPORIUM: Files Chapter 11 Petition in N.D. Ohio
-----------------------------------------------------
Drug Emporium, Inc. (OTCBB: DEMP.OB), together with its
subsidiaries, filed petitions for relief under Chapter 11 of the
Bankruptcy Code in the United States Bankruptcy Court for the
Northern District of Ohio on March 26, 2001, in order to
effectuate the previously announced Acquisition and
Reorganization Agreement between the Company and Snyder's Drug
Stores, Inc., dated March 22, 2001.

Under the Agreement, the Company has filed a pre-negotiated Plan
of Reorganization pursuant to which Snyder's, or one of its
affiliates, would acquire 100% of the newly issued and
outstanding capital stock of a reorganized Drug Emporium on the
effective date of the Plan. Additionally, the Company will
dispose of its operations in the Atlanta, Georgia metropolitan
area, the State of California and certain other locations.

Pursuant to the terms of the Agreement, Snyder's will pay
approximately $25 million to acquire all of the Reorganized
Capital Stock of the Reorganized Drug Emporium. In addition,
under the Plan, a significant portion of the Company's
indebtedness will be restructured and paid.

In order to enable the Company to maintain normal store
operations and pay its suppliers on a current basis during the
reorganization process, the Company has obtained post-petition
debtor-in-possession financing from the Company's current
syndicate of lenders, led by Fleet Retail Finance, Inc. and Back
Bay Capital Funding LLC. The DIP Financing Arrangement with
Fleet provides a revolving credit facility up to a maximum of
$90 million, which will be reduced to $75 million upon the
disposal of stores in Georgia, California, and certain other
locations. As part of the DIP Financing Arrangement, Back Bay
will provide a term loan to the Company in the amount of $12.5
million. In addition, the Company has secured additional debtor-
in-possession financing of approximately $14 million from a
major pharmaceutical and OTC supplier which has agreed to extend
35 day trade terms to the Company.

The Company has also obtained the approval of the Bankruptcy
Court for a motion which will permit the Company to pay pre-
petition trade payables to a limited number of the Company's
pre-petition trade and non-trade creditors, on terms which will
be negotiated between the Company and these Essential Vendors.
The Company believes that its ability to negotiate such payment
arrangements will facilitate its ability to obtain necessary
post-petition supply and trade credit terms from this Essential
Vendor group.

Pursuant to the Plan, the Company's $50 million 7-3/4%
Convertible Subordinated Debentures due October 1, 2014 and all
agreements, instruments, and other documents evidencing the
Notes and the rights of the holders of the Notes will be
cancelled and will receive, along with other unsecured trade and
non-trade creditors, a cash distribution upon the consummation
of the Plan. The existing stockholders of the Company will have
their shares of common stock cancelled and will receive nominal
or, more likely, no consideration for their shares. In addition,
any warrants, options or other rights to purchase any equity of
the Company will be cancelled and terminated.

David L. Kriegel, Chairman and Chief Executive Officer of the
Company, said: "The filing of the Chapter 11 Case and the Plan
is a crucial step in the process of revitalizing the Company.
After the reorganization, we believe that the Company will be
financially stronger and in a better competitive position. We
feel that this process will protect the continuing interests of
our customers, suppliers and employees."

In addition, to avoid disruption of operations, the Company is
establishing a retention program for pharmacists, store
managers, corporate office employees and other key operating
personnel, pursuant to which the Company will pay "stay bonuses"
to personnel who remain with the Company through the completion
of the reorganization process.

Both the Agreement and the Plan are subject to numerous
conditions, and no assurance can be given that the consensual
restructuring provided for in the Plan and the Agreement will be
finalized, or that any restructuring which is completed will not
be materially different in terms.

                     About Drug Emporium, Inc.

Drug Emporium, Inc. (NASDAQ: DEMP) owns and operates 130 brick-
and-mortar stores under the names Drug Emporium, F&M Super Drug
Stores and Vix Drug Stores. Most of the brick-and-mortar stores
operate full-service pharmacies and specialize in discount-
priced merchandise including health and beauty aids, cosmetics
and greeting cards. The company also franchises additional
stores under the Drug Emporium name. Drug Emporium, Inc. is
headquartered in Powell, Ohio.


DRYPERS CORP.: Has Until June 7 to Assume & Reject Leases
---------------------------------------------------------
By order of the US Bankruptcy Court, Southern District of Texas,
Houston Division, March 9, 2001, the 60-day period under 11 USC
Section 365(d)(4) within which Drypers Corp. must assume or
reject any unexpired leases of nonresidential real property is
extended until the earlier of June 7, 2001 or confirmation of a
Chapter 11 plan in Drypers' Bankruptcy case.


eMACHINES INC.: Appeals Nasdaq's Move To Delist Shares
------------------------------------------------------
eMachines(TM), Inc. (Nasdaq: EEEE), received a letter on March
21, 2001 from Nasdaq advising eMachines of Nasdaq's decision to
delist eMachines' common stock because of eMachines' failure to
comply with Nasdaq's $1 minimum bid price requirement (Nasdaq
Marketplace Rule 4450(a)(5)). eMachines has requested an appeal
of the delisting decision before the Nasdaq Listing
Qualifications Panel, and eMachines' common stock will continue
to trade on the Nasdaq National Market pending the outcome of
the appeal. A hearing date has not been set.

At this time, eMachines is in compliance with all of Nasdaq's
continued listing requirements except for the minimum bid price
requirement. There can be no assurance, however, that the Panel
will decide to allow eMachines' common stock to remain listed.

If the Panel decides to delist eMachines' common stock,
eMachines will not be notified until the delisting has become
effective, and eMachines will then attempt to have its common
stock traded on the NASD OTC Bulletin Board. This public
release, with regard to the staff determination letter, is made
in compliance with the requirements of the recently issued
Nasdaq Marketplace Rule 4815(b).

                     About eMachines, Inc.

eMachines, Inc. (Nasdaq: EEEE) is a leading provider of
Internet- enhanced, low-cost, high-value, personal computers,
and of Internet advertising, portal and software distribution
services.


ERGO SCIENCE: Receives Nasdaq Notice Of Delistment
--------------------------------------------------
Ergo Science Corporation (Nasdaq:ERGO) reported that it received
a Nasdaq Staff Determination on March 21, 2001, indicating that
the Company has failed to comply with the minimum bid price
requirement for continued listing, and is subject to delisting
from the Nasdaq National Market. The Company has filed a request
for a hearing, before the Nasdaq Qualifications Panel to review
the staff determination. The Company's stock will continue to be
traded on the Nasdaq National Market pending the final decision
by the Panel. The hearing date will be determined by Nasdaq and
should occur no later than 45 calendar days following the date
of its press release.

There can be no assurance that the Panel will decide to allow
the Company to remain listed or that the Company's actions will
prevent the delisting of its common stock. The Company will not
be notified until the Panel makes a formal decision. Until then,
the Company's common stock will continue to trade on the Nasdaq
National Market. In the event the Company's shares are delisted
from the Nasdaq National Market, it will attempt to have its
common stock traded on the NASD OTC Bulletin Board.


FINOVA GROUP: Paying Prepetition Tax Obligations
------------------------------------------------
The FINOVA Group, Inc., asked the Court for permission to pay,
in their discretion, the prepetition tax and fee obligations
owed to domestic and foreign governmental entities, unless
subject to dispute, in the ordinary course of business and on
their normal due dates. Such obligations include assessments,
charges, interest, penalties, fines, settlements, judgments and
similar tax or fee related obligations. FINOVA makes this
request pursuant to 11 U.S.C. Sec. 105(a).

The prepetition tax and fee obligations at issue are appropriate
for payment to the extent that they are priority or secured
claims that are payable in full or, alternatively under the
doctrine of necessity. A substantial number of the obligations
will be coming due shortly after the commencement of these cases
and FINOVA desires to avoid disputes with governmental entities
and the attendant expenditures that accompany such disputes.
Such expenses are imminent if FINOVA delays payment because
governmental entities typically attempt to enhance their rights
to payment. FINOVA estimates the prepetition tax and fee
obligations at $4,200,000, exclusive of federal income taxes.
FINOVA has sufficient resources to make such payments. Marks D.
Collins, Esq., at Richards, Layton & Finger, added that FINOVA
cannot estimate federal income taxes because there are no
available estimates for annual income for the 2001 tax year.
However, they are not expected to exceed $4,000,000.

Mr. Collins told the Court that prior to the petition date,
FINOVA incurred obligations to the international, federal, state
and local governments in which it conducted business. As of the
petition date, FINOVA was current on all undisputed and known
tax obligations.

The payment of tax obligations will ultimately preserve the
resources of the estates, thereby promoting their
rehabilitation. If they are not paid in a timely manner, FINOVA
will be required to expend resources to resolve a multitude of
issues related to such obligations. For example, issues that
will be argued include:

      (a) whether the obligations are priority, secured or
          unsecured in nature,

      (b) whether they are proratable, prepetition or
          postpetition in full, and

      (c) whether penalties, interest and attorney's fees and
          costs are priority, secured or unsecured in nature.

Delayed payment may also subject FINOVA to actions by the
governmental entities to revoke licenses and other privileges.
Moreover, certain taxes are sales or use taxes, which may be
considered to be trust funds that are not included in property
of the FINOVA estates, or as to which officers and directors may
be held personally liable in the event of nonpayment. Collection
efforts would pose an obvious distraction to management and
others during these Chapter 11 proceedings.

Mr. Collins informed the Court that protections afforded to
FINOVA by the U.S. Bankruptcy Code are unavailable in foreign
countries. Thus, delayed payment of obligations may result in
forfeiture of rights to conduct business in respective
jurisdictions, seizure or impoundment of assets, and possible
civil and criminal liability.

Becoming technical, Mr. Collins informed those who will listen
that, to the extent the prepetition tax and fee obligations are
priority claims pursuant to section 507(a)(8) of the Code, or
secured claims pursuant to section 506(a) of the Code, their
payment should be authorized on the basis that they are required
to be paid in full in any event as a condition to satisfying the
plan confirmation requirements contained in section 1129 of the
Code.

Alternatively, payment of prepetition tax obligations is
appropriate for authorization under the "doctrine of necessity,"
which is grounded in section 105(a). This Court "may issue any
order, process or judgment that is necessary or appropriate to
carry out the provisions of this title." Thus, "the ability of a
Bankruptcy Court to authorize the payment of prepetition debt
when such payment is needed to facilitate the rehabilitation of
the debtor is not a novel concept." In re Ionosphere Clubs,
Inc., 98 B.R. 174, 175 (Bankr. S.D.N.Y. 1989).

"The focus of these cases should be on restructuring the massive
amount of obligations relating to unsecured bank loans and debt
securities, which aggregate approximately $11.378 billion," Mr.
Collins suggested. This makes the obligations owed to
governmental authorities insignificant and will have a
negligible effect on the recoveries of the major creditors in
these cases. Moreover, the amount of the payment will likely be
offset by the amount of resources not required for disputes that
are unnecessary and wasteful.

Finding that the Debtors' Motion is well taken, Judge Wizmur,
presiding in Judge Walsh's absence, granted the request in all
respects. (Finova Bankruptcy News, Issue No. 3; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


FLOORING AMERICA: Bondholders Seek to Convert Case to Chapter 7
---------------------------------------------------------------
Bondholders of Flooring America Inc. said they want to convert
the company's chapter 11 reorganization case to a chapter 7
liquidation, according to Dow Jones. The U.S. Bankruptcy Court
in Atlanta was to consider the request at a hearing scheduled
March 28. State Street Bank & Trust Co., which represents the
bondholders, said in a request that if the case is allowed to
maintain under chapter 11, the Kennesaw, Ga.-based Flooring
America would continue to incur administrative expenses.

Flooring America has already liquidated its operating assets,
including its retail stores and franchise operations, and its
real estate holdings. The company now has miscellaneous real
estate holdings and accounts receivable remaining. Flooring
America, which distributed floor covering, and 22 affiliates
filed for chapter 11 on June 15, 2000, listing total assets of
$342.5 million and debts of $252.2 million. (ABI World, March
27, 2001)


FRANK'S NURSERY: Wins Final Court Nod for $100 Million DIP Loan
---------------------------------------------------------------
Frank's Nursery & Crafts Inc. won final court authorization to
enter a $100 million debtor-in-possession (DIP) financing
agreement with a group of banks led by Wells Fargo Retail
Finance LLC. Although three objections to the DIP financing were
filed, they were all resolved or overruled by the U.S.
Bankruptcy Court in Baltimore. Responding to objections raised
by the newly formed creditors' committee, Wells Fargo agreed to
amend certain provisions of the loan agreement, including
deleting seven parcels of real estate from the list of "core
properties" and clarifying the company's right to borrow under
the so-called special real estate line provision of the
agreement. (ABI World, March 27, 2001)


GOLF TRUST: Raises $5.2 Million from Sale of Two Golf Courses
-------------------------------------------------------------
Golf Trust of America, Inc. (AMEX:GTA), a real estate investment
trust (REIT), has sold Brentwood Golf & Country Club and Club of
the Country, two 18-hole golf courses, in separate transactions.

On March 20, the Company closed the sale of Brentwood Golf &
Country Club, an 18-hole golf course, located in White Lake
Township, Michigan for total consideration of $2.6 million. The
Company had been operating the Brentwood golf course following
the default of the original tenant. Separately, on March 16, the
Company closed the sale of Club of the Country, an 18-hole golf
course located in Louisburg, Kansas, for total consideration of
$2.655 million.

Commenting on the sales, W. Bradley Blair, II, president and
chief executive officer stated, "The sales of Club of the
Country and Brentwood Golf & Country Club were further steps in
our business plan, which includes the sale of certain non-core
assets in the ordinary course of business." Mr. Blair added, "We
are pleased with the prices received on these two golf courses,
which are in line with conditions in their local golf markets
and their course revenues. Both courses were sold to local
companies with interests in the immediate communities."

Golf Trust of America, Inc. is a real estate investment trust
involved in the ownership of high-quality golf courses in the
United States. The Company currently owns an interest in 42
(eighteen-hole equivalent) golf courses.


HARNISCHFEGER INDUSTRIES: Moves to Splinter IBM Master Lease
------------------------------------------------------------
Harnischfeger Industries, Inc., (HII), Harnischfeger Corporation
(Harnco) and Joy Technologies Inc. (Joy) moved the Court for an
order

      (1) severing the Master Lease signed by HII and IBM Credit
          Corporation;

      (2) deeming the leases entered into solely by the entity
          that signed the Term Lease Supplements;

      (3) declaring the assignment from the Debtors to Morris
          Material Handling Inc. a valid assignment; and

      (4) reducing the Proof of Claim IBM filed against HII
          (Claim No. 6064) and transferring a portion of such
          claim to Harnco and a portion of such claim to Joy.

The Master Lease, titled Term Lease Master Agreement No.
30MTL36, allows for individual Leases to be executed. It
provides that even upon its termination, each Lease then in
effect will survive any termination. The Master Lease also
provides that IBM may pursue any reasonable credit investigation
for each individual Lease.

The Leases provide all the important terms of the contracts
entered into between IBM and the separate entities: the subject
equipment and the location in which it is to be installed,
payments and the term of the Lease. Moreover, the equipment that
is the subject of an individual Lease varies from Lease to
Lease.

In light of that, the Debtors asserted that each Lease was an
independent economic transaction that incorporated certain
general terms listed in the Master Lease, that the Master Lease
was not sufficient by itself to create a true leasing
relationship by which equipment was delivered to the lessee or
the lessee became obligated to pay Lease payments.

Specifically, the Debtors pointed out that the Leases were
signed individually by the entity with whom IBM was contracting
for the particular equipment detailed in the Leases. When each
Lease commenced, IBM installed the equipment in the location of
the particular entity with whom IBM contracted. HII did not
participate in this process.

If the Master Lease is severed, then each Lease is deemed to be
a separate contract that stands on its own.

The Debtors reasoned that the Leases entered into by IBM and the
individual Debtor entities were treated as separate contracts by
the parties and should be treated as such by the bankruptcy
court. These Leases are:

      Agreement                                     Entity
      ---------                                     ------
      Supplement D00316800                     Assigned to MMH
      Supplement D00502868                                 MMH
      Document # 2897 on Schedule G (inactive)             Joy
      Supplement C00322741 (inactive)                   Harnco
      Supplement D00274790 (inactive)                   Harnco
      Supplement C00329305 (inactive)                   Harnco
      Supplement D00384096 (inactive)                   Harnco
      Supplement 50GE07694 (inactive)                   Harnco
      Supplement C00363004 (inactive)                   Harnco
      Supplement R7E0533 (inactive)                     Harnco

With all the leases, the Debtors believe that the subject
equipment has been returned to IBM.

The Debtors believe there are no prepetition amounts due on the
Inactive Harnco leases. It appears, however, that there may be
some prepetition amounts payable under the Inactive Harnco
Leases that have not been paid. If this Motion is granted, then
this prepetition amount would be an allowed general unsecured
claim against the Harnco estate. IBM asserted that $25,463.89 is
the prepetition claim attributable to the Inactive Harnco
Leases. The Debtors believe that $25,335.64 is the prepetition
amount attributable to the Inactive Harnco Leases.

Under Document #2897 there are no postpetition amounts due on
the Inactive Joy Lease. It appears, however, that there may be
some prepetition amounts payable. If this Motion is granted,
then this prepetition amount would be an allowed general
unsecured claim against the Joy estate. IBM does not specify
any amount as a prepetition claim attributable to the Inactive
Joy Lease. The Debtors believe that $221.83 is the prepetition
claim amount attributable.

As previously reported, before October 1997, HII, through
certain affiliates, was engaged in the manufacture, sale and
service of industrial material handling equipment (the MHE
Business). In October 1997. Harnco transferred certain assets
and liabilities of the MHE Business to Harnco's subsidiary
Material Handling LLC (MHLLC). In March 1998, Harnco, RCHH,
Inc., RYL, LLC and HCHC, Inc. (collectively the Selling
Debtors), among other parties, effected a number of transactions
(the Recapitalization) as a result of which MHE Investments,
Inc. (the Purchaser) acquired the majority interests in all the
HII affiliates engaged in the MHE Business.

The Purchaser's subsidiary MMH Holdings, Inc. and certain of its
affiliates filed for relief under Chapter 11 with this Court on
May 17, 2000.

Several agreements were entered into by HII, the Selling
Debtors, the Purchaser and certain other parties as part of the
1997 asset sale and the Recapitalization. Pursuant to these
Agreements, the Debtors assigned Supplement D00316800 to MMH.
The Assigned Lease will expire in February 2001.

IBM has accepted payment by MMH to satisfy amounts owed for the
MMH Lease directly from MMH since the Debtors assigned the
Assigned Lease to MMH. MMH controls the equipment that is the
subject of the Assigned Lease, determines the quality of service
and maintains the property at its location. The Debtors told
Judge Walsh they are not involved in this relationship.
Therefore, the Debtors believe it is proper for MMH and IBM to
be deemed the contracting parties for the Assigned Lease.
(Harnischfeger Bankruptcy News, Issue No. 39; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


INTEGRATED HEALTH: Taps Sotheby's Inc. for Fine Art Auction
-----------------------------------------------------------
Integrated Health Services, Inc. sought the Court's approval,
pursuant to sections 105, 327, 328, 363, 1107 and 1108 of the
Bankruptcy Code, for:

      (a) their retention of Sotheby's, Inc. for the purpose of
          offering for sale at auction certain fine artwork owned
          by the Debtors pursuant to a certain Consignment
          Agreement between IHS and Sotheby's;

      (b) the Consignment Agreement; and

      (c) the sale of the Property, free and clear of any liens,
          claims, interests and encumbrances, subject to the
          terms of the Consignment Agreement.

         The Elkins Agreement, the Property and Sotheby's

The Debtors explained that pursuant to their agreement with Dr.
Robert N. Elkins, the former President and Chief Executive
Officer of IHS, as modified and approved by the Court,  Dr.
Elkins was required to deliver to the Debtors certain tangible
personal property of the Debtors in his possession, including
the fine artwork that is the subject Property of this motion.

In accordance with the terms of the Elkins Agreement, Dr. Elkins
has delivered the Property to the Debtors. The items are:

      (1) View of the Grand Canal with San Geremio, Palazzo Labia
          and the Entrance to the Cannareggio (Antonio Canale.
          Called Canaletto)

      (2) Holy Family with Angels (Guido Reni)

      (3) Portrait of the Twins, Francois and Yves-Joseph-Charles
          Pommyer (Nicolas de Largillierre)

      (4) Halt at the Gypsy Camp (Phillips Wouwermans)

      (5) Madonna and Child with Angels (Ridolfo del Chirlandaio)

      (6) Portrait of Seigneur de Landreville (Nicolas de
          Largillierre)

      (7) Holy Family with Saint Jerome (Ventura Salimbeni)

      (8) The Gathering of Manna (Hendrick de Clerck)

      (9) Wooded Landscape with Figures beside the Gates of a
          Woodyard (Jacob van Ruisdael)

     (10) View of the Piazza San Marco (Michele Merieschi)

     (11) River Landscape with Travellers (Jan Wynants)

     (12) Gaz (Lucien Freud)

The Property is comprised of a number of very significant works
by some of the pre-eminent artists of the 17th and 18th
centuries and falls within the general categories of Old Master
Paintings or Contemporary Art, the Debtors told the Judge.

In light of this, the Debtors, in consultation with the
Committee, have determined that it would be in the best interest
of the estates to sell the Property. Given the nature of the
Property, the Debtors determined that the value of the Property
would be maximized if a third-party professional were retained
to offer the Property for sale at auction. Sotheby's and
Christie's were contacted. In response, Sotheby's agreed to bear
all expense relating to the sale of the Property, including
packing, insuring and shipping the Property to Sotheby's
premises in New York. Sotheby's also agreed not to charge IHS
any selling commission on the Property. Instead, a buyer's
premium will be added to the successful bid price and will be
payable by the purchaser to Sotheby's as part of the total
purchase price.

In consultation with the Committee, the Debtors determined to
proceed with Sotheby's. The Debtors believe that Sotheby's, as
one of the leading auction houses in the world, with decades of
experience in the marketing and sale of fine art, will draw upon
new and existing clientele in marketing the Property.

Sotheby's intends to include the paintings, which are
characterized as the Old Master Paintings, in its Old Master
Paintings auction scheduled for May 23, 2001. Certain artwork,
which is characterized as Contemporary Art, will be included in
the Contemporary Art auction scheduled for May 15, 2001. In
addition, each painting will be illustrated in Sotheby's
catalogues for Contemporary Art and Old Master Paintings, which
Sotheby's will distribute to its existing and targeted
clientele, and will also be published kon the Sotheby's website
for prospective buyers.

               Key Terms of the Consignment Agreement

Subject to the Court's approval, Sotheby's will act as agent for
the Debtors for the purpose of offering the Property for sale at
auction, pursuant to the Consignment Agreement which provides
that:

      (1) IHS is the consignor of the Property and Sotheby's is
          the consignee;

      (2) The Property to be consigned consists of that certain
          artwork set forth on Schedule I to the Consignment
          Agreement (as described above);

      (3) Subject to the terms and conditions of the Consignment
          Agreement, Sotheby's will have absolute discretion
          concerning, among other things, the manner of
          conducting the sale;

      (4) IHS will not pay Sotheby's any selling commission on
          the Property. Rather, Sotheby's is authorized to charge
          the buyer a commission on each lot sold. A buyer's
          premium will be added to the successful bid price and
          will be assessed against the buyer as part of the total
          purchase price;

      (5) The proceeds of the sale that Sotheby's collects and
          receives (net of the buyer's premium) will be wire-
          transferred to the Debtors within one business day
          after the conclusion of the auction or following a
          private sale;

      (6) Each painting will be offered for sale subject to a
          mutually agreed upon Reserve Price (not to exceed
          Sotheby's low pre-sale estimate) specified for such
          painting, which is the confidential minimum price
          acceptable to IHS;

      (7) Under the Consignment Agreement, IHS has made certain
          customary representations and warranties in favor of
          Sotheby's and has agreed to indemnify Sotheby's for
          breach;

      (8) Sotheby's will bear all expenses relating to the sale
          of the Property;

      (9) IHS may not withdraw any Property from sale after the
          date of the Consignment Agreement;

     (10) Sotheby's may withdraw any Property under certain
          circumstances specified in the Consignment Agreement;

     (11) If any Property is not sold at auction for failing to
          reach its reserve, IHS authorizes Sotheby's, for a
          period of 60 days following the auction, to accept
          offers for such Property privately on behalf of IHS.

The Debtors proposed to attach liens, claims, interests or
encumbrances against or in the Property to the sale proceeds
with the same force, validity, effect, priority and
enforceability, inter se, as such Liens had in the Property
prior to such sale, subject to all rights and defenses of the
Debtors.

Subject to the Court's approval, Sotheby's will be compensated
from the buyer's premium it charges the successful purchaser of
the Property, without the need for further Bankruptcy Court
approval or the submission of a fee application pursuant to
section 330 or 331 of the Bankruptcy Code.

The Debtors believe that the consignment of the Property to
Sotheby's for sale at auction is the most effective means of
maximizing the value of such Property and therefore is in the
best interests of the Debtors, their estates and their
creditors. Further, the Debtors believe that the terms of
the Consignment Agreement, are the product of good faith, arm's-
length negotiations between the Debtors and Sotheby's, and are
fair and reasonable.

The Debtors represent that to the best of their knowledge,
information and belief, and as stated in the affidavit of
Christopher Apostle, an officer of Sotheby's, Sotheby's has no
connection with the Debtors, their creditors, equity security
holders, professionals, or any other parties in interest or
their respective attorneys, except that:

      (a) Sotheby's, due to the breadth of its operations, may
          have provided discrete services to certain of the
          Debtors' creditors or other parties in interest, all in
          cases and in matters unrelated to these proceedings,
          and
      (b) Sotheby's, in anticipation of the approval of the
          Consignment Agreement, has begun providing services to
          the Debtors in recent weeks.

The Debtors submitted that, to the best of their knowledge,
information and belief, Sotheby's does not hold or represent any
interest adverse to the Debtors or their estate and is a
"disinterested person" as that term is defined in section
101(14) of the Bankruptcy Code.

The Debtors believe that Sotheby's is well qualified to serve as
their agent in selling the Property, and retention of Sotheby's
is necessary and in the best interests of the Debtors and their
estates. (Integrated Health Bankruptcy News, Issue No. 15;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


JACOM COMPUTER: Wants To Reject Certain Real Property Leases
------------------------------------------------------------
A hearing will be held on April 4, 2001 before the Honorable
Cornelius Blackshear, US Bankruptcy Court, Southern District of
New York, to consider the motion of Jacom Computer Services,
Inc., Unicapital Corporation, et al. for the entry of an order
authorizing the debtors to reject certain unexpired leases of
nonresidential real property.

The debtors are represented by Richard S. Miller, Greenberg
Traurig, LLP, New York, NY, attorneys for the debtors.

The debtors have reviewed the economic value of the leases that
they seek to reject and have concluded that it is in their best
interests to reject them.

The leases cover property located in Hackensack, NJ, West Lake
Village, California, Chesterfield, Missouri, New York, NY,
Norwalk, Connecticut, Wellesley, Massachusetts, Delmar, NY, and
Chesterfield, Missouri.


JACOM COMPUTER: Seeks to Extend Exclusive Period through June 9
---------------------------------------------------------------
On April 4, 2001, Jacom Computer Services, Inc. Unicapital
Corporation, et al. shall request entry of an order before the
Honorable Cornelius Blackshear, US Bankruptcy Court, New York,
NY, extending the debtors' exclusive period in which to file a
plan from April 10, 2001, through and including June 9, 2001,
and extending the debtor's exclusive right to solicit
acceptances of such plan from June 9, 2001, through and
including August 8, 2001.

The debtors asserted that a 60-day extension of the Exclusive
Periods is warranted in light of the fact that the debtors have
had discussions with Bank of America and the other lenders
regarding the form and structure of a plan and have reached
agreement with the lenders on the preliminary outline of a plan.
The debtors have also had discussions with the Creditors'
Committee about the form and structure of the plan. There are
still issues regarding the scheme of distribution, the structure
of the plan and tax issues that must be resolved before a plan
can be finalized and filed.

These cases involve 119 separate companies, with over 24,000
creditors. The debtors' schedules show assets and liabilities of
approximately $1.3 billion. The debtor asserts that these cases
are sufficiently large and complex to warrant an extension of
the Exclusive Periods.


LIFE UNIVERSITY: Moody's Puts Baa2 Bond Rating Under Review
-----------------------------------------------------------
Moody's Investors Service has placed the Baa2 underlying rating
of Life University (formerly Life College) under review for
possible downgrade.

This action affects $33.3 million Series 1995 A and B bonds
issued by the City of Marietta Development Authority, Georgia.
This action does not affect the Aaa rating on the bonds based on
bond insurance from FSA.

The primary reason for the review is a significant decline in
enrollment from about 4,200 to 3,200 full-time equivalent
students over the past five years, primarily in Life's core
Doctor of Chiropractic program.

Despite the implementation of significant expense cuts to offset
declining tuition revenue, the University posted moderate
operating deficits in fiscal years 1999 and 2000, compared to
large surpluses in prior years.

Nevertheless, the University continues to cover annual debt
service payments by 1.4 times, and enjoys a moderate cushion
from balance sheet resources against further financial stress.
Hence, analysts at Moody's believe that a downgrade below Baa3
is unlikely based on currently available information.

Moody's review will focus on prospects for the University's
enrollment to stabilize over the next few years, as well as the
actions management is taking to maintain fiscal balance in the
current operating environment.

Moody's will also explore the University's ability to withstand
further enrollment declines. Analysts expect to reach a rating
conclusion within the next several weeks.


LIVENT US: Plan Confirmation Hearing Continues on July 24
---------------------------------------------------------
The hearing to consider confirmation of the Third Amended Plan
of Reorganization for Livent (US) Inc., et al. is being
adjourned until July 24, 2001, at 11:00 AM before the Honorable
Arthur J. Gonzalez, New York, NY. All objections to the
confirmation of the plan must be in writing and filed with
the court on or before July 17, 2001.


LOEWEN GROUP: Ridgewood Dumps CRG Construction Agreement
--------------------------------------------------------
Ridgewood Cemetery, Inc., one of the debtors in The Loewen
Group, Inc. cases, asked the Court to authorize the rejection,
pursuant to section 365 of the Bankruptcy Code, 11 U.S.C. 101-
1330, of a construction agreement with Construction Resource
Group, Inc., effective as of the date of the Motion. Ridgewood
told the Court that CRG has received notice of its intention to
reject the Agreement.

On October 19, 1998, Ridgewood entered into an agreement with
CRG for the construction of a new 1,800-crypt mausoleum at
Ridgewood Cemetery. Pursuant to the Agreement, CR0 operated as
the general contractor for the mausoleum subcontractors
necessary to complete the Original Project pursuant to the
plans prepared by architect, Mekus Studios.

The Agreement provided that Ridgewood would pay CRG a total of
$6,309,388 subject to certain adjustments, to complete the
Original Project.

This Contract Sum was to be paid to CRG in periodic payments
reflecting the progress made by CR0 with respect to the Original
Project. Upon the completion of a particular phase of the
Original Project, CR0 was to submit a pay application to the
Architect for approval. In each pay application, CR0 would seek
payment for materials provided and services performed during the
particular pay period. In addition, in connection with each pay
application, the Agreement entitled CR0 to the payment of a
percentage of the total profit and overhead allocated to the
Original Project. If the Architect was to approve the submitted
pay application, CR0 would then forward the pay application to
Ridgewood for payment.

In the months preceding the Petition Date, in light of the
Debtors' financial difficulties and evolving market conditions,
Ridgewood determined that the construction of an 1,800-crypt
mausoleum at the Cemetery as contemplated by the Agreement would
prove too costly. Consequently, on May 28, 1999, Ridgewood
exercised its right under the Agreement to suspend the Original
Project. As of the Suspension Date, CR0 had completed
approximately 10 percent of the Original Project, including much
of the excavation and concrete work related to the mausoleum's
foundation. Also as of the Suspension Date, Ridgewood had
remitted payments to CRG in respect of approved pay applications
totaling approximately $615,803. (Loewen Bankruptcy News, Issue
No. 35; Bankruptcy Creditors' Service, Inc., 609/392-0900)


MARINER: American Pharmaceutical Settles Litigation Claims
----------------------------------------------------------
One of the Mariner Post-Acute Network, Inc. Debtors, American
Pharmaceutical Services, Inc., sought and obtained the Court's
approval for the compromises of affirmative claims of APS
against Texas Health Enterprises, Inc. (THE), an operator of
over 50 nursing homes throughout Texas, and itself a chapter 11
debtor in a case pending in the United States Bankrutpcy Court
for the Eastern District of Texas (Sherman Division), Case
No.99-42469.

The settlement resolves disputes relating to the nature of the
services rendered by APS under numerous goods and services
contracts, and the amounts owed by THE.

                     The Contracts

APS provided a broad range of goods and services to the majority
of THE's nursing home facilities in Texas pursuant to numerous
executory contracts entered into before THE's petition date on
August 3, 1999. These contracts are:

      (1) Non-Pharmacy Contracts covering:

          Enteral Therapy, Urological and Ostomy Supplies and
Wound Care and Restorative Care Products Services Agreements and
Enteral Therapy Consignment Purchases and Billing Services and
Urological, Ostomy, Wound Care and Restorative Care Services;

      (2) Pharmacy Contracts including:

          Pharmacy, Consulting and IV Therapy Daily Capitation
Agreements and Pharmacy Dispensing, Consulting and IV Therapy
Services Agreements;

      (3) Respiratory Therapy Contracts.

                     The Settlement

Generally, the THE Settlement provides that:

      (1) all disputes regarding APS' asserted administrative
claims against the THE Estate for the period from the filing of
the THE petition to August 31, 2000, will be resolved for the
payment of $50,000 in four equal installments;

      (2) THE will pay all arrearages due under the contracts to
be assumed for the period from September 1, 2000 to November 30,
2000, and will, for the periods thereafter, pay when due all
future invoices;

      (3) THE will assume certain identified contracts, and the
parties will acknowledge that the balance of the executory
contracts and unexpired leases between the parties have
heretofore been rejected or terminated by mutual agreement;

      (4) APS will be allowed an unsecured claim in the THE
chapter 11 case in the amount of $1,500,000, which encompasses
both prepetition amounts due and damages for rejection of all
contracts not assumed under the proposed settlement; and

      (5) Except for the allowed prepetition and administrative
claims, and the obligations provided for under the assumed
contracts, the parties will release all other claims against one
another. (Mariner Bankruptcy News, Issue No. 13; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


MERCURY WASTE: Nasdaq Delists Shares, Now Trading on OTCBB
----------------------------------------------------------
Mercury Waste Solutions, Inc. (Nasdaq: MWSI) announced that it
received notice indicating that a Nasdaq Listing Qualifications
Panel denied its appeal for continued listing on the Nasdaq
Small Cap Market. As a result of the decision, the Company's
shares were de-listed from the Nasdaq Small Cap Market with the
opening of the market on Wednesday, March 28, 2001.

The Company's common stock automatically began trading on the
OTC Bulletin Board on Wednesday, March 28, 2001.


METAL MANAGEMENT: Selling 31.6-Acre Ohio Property for $9.5MM
------------------------------------------------------------
Metal Management, Inc. and its direct and indirect subsidiaries
requested the court to enter an order authorizing the debtor to
cause its subsidiary Metal Management of Ohio, Inc. to sell the
land and improvements on three separate parcels of real estate
located on Snow Road near the airport in Cleveland, Ohio,
containing a total of 31.6 acres and perform a certain
environmental remediation, and to demolish certain existing
improvements  pursuant to a contract to purchase real estate
between the seller and Chavez Properties Acquisitions, LLC as
buyer.

The debtors claimed that the sale of the property is warranted
by sufficient business justifications and is in the best
interests of the debtors' estates and creditors. The property is
not used in ongoing operations and, therefore, is not necessary
for confirming a plan of reorganization.

The base purchase price of the property is the sum of $9.5
million, subject to certain adjustments.


MONTGOMERY WARD: Sears Roebuck Buys 18 Stores & 10 Auto Centers
---------------------------------------------------------------
In a significant expansion of its retail and national product
service businesses, Sears, Roebuck and Co. adds 18 former
Montgomery Ward department stores and 10 freestanding auto
centers to its retail base, and could potentially service
approximately 2.4 million former Wards service contract
customers under an agreement with Aon Innovative Solutions, Inc.
(AIS). In addition, Sears will acquire certain assets of Wards
national repair business, A&E Signature Service.

Terms of the agreements were not disclosed.

Sears expects to close on the Wards stores by mid-April of 2001,
and plans to remodel and reopen the former Wards retail
locations by the spring of 2002. Four of the Wards locations
will be converted to The Great Indoors, Sears innovative
remodeling and decorating retail concept, which was launched in
the Denver area in 1998. Fourteen of the former Wards locations
will be converted to Sears stores, with Sears Auto Centers
attached to three of these stores. The 10 freestanding former
Wards Automotive Centers will be converted to Sears Auto
Centers. Details regarding the purchase of an additional Wards
location have not been confirmed.

Since Montgomery Wards announced in December that it would cease
operations, Sears has hired nearly 900 former Wards employees,
including more than 300 former Wards product service associates
now working at Sears locations nationwide and approximately 500
retail associates. A total of nearly 3,000 employees will staff
the 18 department stores and 10 auto centers being acquired.
"By expanding our retail and product service businesses through
the acquisition of selected Wards assets, Sears has an
opportunity to build market share in several lines of our
business," said Chairman and CEO Alan J. Lacy. "We will have
denser full-line store coverage in key markets and an early
start on our 2002 growth plan for The Great Indoors. Access to
Wards former product service contract customers is an exciting
opportunity for Sears Product Repair Services, which already has
the nation's largest team of trained product technicians."
Under the agreement with AIS, Sears service technicians could
perform product repair and maintenance services for
approximately 2.4 million former Montgomery Wards customers with
service contracts administered in 23 states by AIS and
affiliates. Sears HomeCentral(R) technicians will provide repair
services and preventive maintenance checks for appliances,
electronics, exercise equipment and lawn and garden products
previously served by Montgomery Wards.

In a separate agreement with Montgomery Wards, Sears Product
Repair Services acquired the marketing rights to more than 5.4
million Wards customers, as well as intellectual property rights
to A&E Signature Services brand names and related toll-free
numbers for service scheduling and parts sales. Sears also
purchased Wards' entire inventory of repair and replacement
parts and accessories.

Sears, Roebuck and Co. is a leading U.S. retailer of apparel,
home and automotive products and services, with annual revenue
of more than $40 billion. The company serves families across the
country through approximately 860 department stores,
approximately 2,100 specialized retail locations, and a variety
of online offerings accessible through the company's Web site,
www.sears.com .


NORTHPOINT COMMUNICATIONS: Clarifies Results of Auction Process
---------------------------------------------------------------
NorthPoint Communications, Inc. (OTC Bulletin Board: NPNTQ)
announced further clarification of its asset sale.

NorthPoint Communications is continuing its structured
bankruptcy sale process. The result, so far, has been a partial
sale of assets to AT&T, which include OSS operations, certain
network components and other technology assets. NorthPoint
continues to work to sell all remaining assets, including its
customer base.

"NorthPoint's customers remain our responsibility as we continue
our bankruptcy proceeding. We are doing everything that we can
to transition them to other providers," said NorthPoint
Communications President and CEO Liz Fetter. "At present, we do
not have enough cash to continue to provide service on our
network. This may result in a termination of network services
within the next few days."

NorthPoint Communications is proactively working with a
consortium of ISPs to fund limited network operations in the
near future. This will allow NorthPoint's customers to be
transitioned to another provider. Currently, no agreement has
been reached.


OWENS CORNING: Has Until May 4 To Decide On New York Lease
----------------------------------------------------------
Upon hearing, and with the consent of Manley, Judge Fitzgerald
extended the time period during which Owens Corning may assume
or reject the lease of 41 East 11th Street, New York, to and
including May 4, 2001. However, Judge Fitzgerald ordered the
Debtor to timely perform all of its obligations under this lease
during this extended period. (Owens Corning Bankruptcy News,
Issue No. 10; Bankruptcy Creditors' Service, Inc., 609/392-0900)


OWENS CORNING: Court Gives Go-Ahead for Tobacco Lawsuit
-------------------------------------------------------
A bankruptcy court told bankrupt building materials-maker Owens
Corning to go ahead with its lawsuit against the tobacco
companies, despite opposition from the tobacco industry,
according to Reuters. The Toledo, Ohio-based maker of Pink
Panther Fiberglas insulation, which filed for chapter 11 in
October after a slew of costly asbestos-related liability
claims, had sued tobacco companies like R.J. Reynolds Tobacco
Holdings Inc., alleging many asbestos injuries were due to
smoking, not asbestos exposure. A successful settlement in the
case against the tobacco industry potentially could bring Owens
Corning a bundle of money it needs to repay its creditors.

Judge Judith Fitzgerald told a bankruptcy court in Wilmington,
Del., on Monday that Owens Corning could press ahead with its
lawsuit, using its current pool of lawyers-although it must
draft new motions for a joint prosecution agreement and hire
Mississippi-based law firm Forman, Perry, Watkins, Krutz & Tardy
as special counsel in the case. The joint prosecution agreement
is among nine law firms, including Forman Perry, that are
assisting Owens Corning in the tobacco litigation, reported
Reuters. (ABI World, March 27, 2001)


PACIFIC GAS: Banks Agree to Extend Forbearance Until April 13
-------------------------------------------------------------
PG&E Corp. said the banks that provided the struggling
California utility with $1 billion in credit have agreed to
extend a forbearance agreement until April 13, according to Dow
Jones. The lenders had previously agreed to hold back on the
facility until March 6. PG&E also said that it may take an
after-tax charge of up to $4.1 billion for the fourth quarter
and the year ended Dec. 31. The size of the charge, if one is
taken at all, will depend on if the utility can recover some or
all of its power costs through the regulatory process. PG&E and
Southern California Edison, have warned of possible bankruptcy
due to $13 billion in debts from high wholesale power costs that
the two firms can't pass on to customers under terms of
California's flawed deregulation plan. (ABI World, March 27,
2001)


PILGRIM AMERICA: Standard & Poor's Begins Watching CBO Ratings
--------------------------------------------------------------
Standard & Poor's placed its ratings on the class A and class B
notes issued by Pilgrim America CBO I Ltd., and co-issued by
Pilgrim America CBO I Corp., on CreditWatch with negative
implications.

On Jan. 9, 2001, the rating on the class A notes was lowered to
single-'A'-minus from double-'A'-minus, while the rating on the
class B notes was lowered to single-'B'-plus from triple-'B'-
minus.

These CreditWatch placements reflect the continuing
deterioration in the collateral pool credit quality and an
additional $10.5 million of new defaults since the Jan. 9, 2001
downgrade action.

According to the March 13, 2001 trustee report, $66.5 million,
or approximately 22.6% of the total collateral pool, is in
default.

The defaulted securities have resulted in the continuing
violation of all the overcollateralization tests because
defaults are required to be carried at 30% of their par values
for the purpose of calculating the overcollateralization ratios.

The class A overcollateralization test (currently 129.6% versus
the required minimum of 135%) and the class B
overcollateralization test (currently 106.85% versus the
required minimum of 118%) have been out of compliance since
November 2000 and June 2000, respectively.

In the coming weeks, Standard & Poor's will be performing cash
flow analysis, and will be reviewing the results from the cash
flow model runs and Standard & Poor's default model to evaluate
the impact of the credit deterioration on the current ratings
for the class A and B notes.

Outstanding Ratings Placed On CreditWatch With Negative
Implications:

Pilgrim America CBO I Ltd./Pilgrim America CBO I Corp.

                    Class Rating
                 To           From
      A      A-/Watch Neg      A-
      B      B+/Watch Neg      B+


POLAROID: Senior Ratings Drop To Low-B Levels
---------------------------------------------
The accelerated loss of the company's traditional core business
and increased competition in the digital photography market
caused the recent downgrading of Polaroid's ratings. Outlook is
negative.

Moody's Investors Service downgraded Polaroid's senior unsecured
debt rating to B3 from Ba3, and its bank loan rating to B2 from
Ba2. The company's senior implied rating was lowered from Ba2 to
B2.

Accordingly, the downgrade reflects the company's accelerated
loss of its traditional core business position in fiscal 2000
and refinancing risk of approximately $500 million bank
facilities by January 2002.

The negative rating outlook reflects the company's increased
competition in the digital photography segment in which it
competes. It also reflects the firm's vulnerability to
contractions of the US economy, thereby making it a big
challenge to generate free cash flow in 2001.

The current rating level is supported by the company's large
installed base of instant film users, the continued growth of
its new product offerings, its leading digital camera position
among mass merchants, and Moody's expectation that capital
expenditure reduction will occur in 2001.

The downgrade concludes a review initiated December 18, 2000.

The ratings downgraded are:

      -- Issuer rating from Ba3 to B3
      -- Senior implied rating from Ba2 to B2
      -- Senior secured $350 million bank credit facility due
         December 2001 from Ba2 to B2
      -- Senior unsecured notes aggregating $575 million due
         2002, 2006, and 2007 from Ba3 to B3
      -- Senior unsecured shelf rating from (P)Ba3 to (P)B3
      -- Subordinated shelf rating from (P)B1 to (P)Caa1
      -- Preferred stock shelf registration from (P)"b1" to
         (P)"caa"

According to the rating agency, accelerated traditional camera
and film sales declined in fiscal year ended December 2000.
Proof of this was the increased credit destabilization during
the period.

Though the accelerated sales decline of traditional products was
limited primarily to the fourth quarter and product sell-through
was better than financial performance indicated, Moody's expects
a currently soft U.S. economy to continue to challenge
Polaroid's margins and cash flow generation.

New instant film products, which include JoyCam and Pocket
cameras, continue to grow rapidly since their introduction in
1998. Nevertheless, in Moody's view, absent stability from the
traditional instant business, new product sales currently lack
the scale and traction necessary to support Polaroid's cost
base.

In response to cost imbalances, the company implemented a
restructuring program on February 22 designed to reduce
overhead, realign the company's resources and accelerate
implementation of its digital strategy and expects benefits
beginning in the second quarter of 2001.

Sales for the fourth quarter were $506 million, a 22% drop from
$650 million last year.

The company has formed a digital strategy to tie instant
photography to digital imaging as digital photography continues
to evolve and proliferate.

Polaroid's Photo Max, primarily a low-end digital product line,
continues to hold the number one position within the digital
camera category in the U.S. Food, Drug and Mass Merchant retail
channel and captured 73% share of the total volume of that
market in the fourth quarter.

As the company transitions to digital photography, it is
broadening its digital product offering and will introduce new
instant digital printing devices during 2001 and 2002.
With fierce digital camera competition at all price points,
Moody's believes Polaroid will be challenged to avoid a strategy
conflict with larger digital vendors, notably Kodak and Hewlett
Packard, and to smoothly manage the inevitable market migration
to digital.

Absolute debt levels increased from $832 million at fiscal year
end 1999 to $937 million at fiscal year end 2000. Because
Polaroid must refinance senior notes and bank credit facilities
of approximately $500 million maturing by January of 2002 as
well as provide for ongoing liquidity, Moody's believes
refinancing will prove challenging.

The company had planned to use real estate sale proceeds of a
Waltham property, which has yet to be sold, to support its
financial position. However, a continuation of a weakened area
economy is in Moody's view likely to affect the timing for this
real estate sale.

Moody's expects free cash flow generation (defined as cash flow
from operating activities, less dividends, less capital
expenditure) will depend both on capital expenditure reduction
and strengthened working capital management during 2001.

While capital expenditure improvement and working capital
improvement are likely, Moody's expects Polaroid to continue to
face challenges related to bargaining for terms of trade with a
set of key retail channel vendors which have grown in prominence
over recent years.

In the absence of a working capital improvement, further
expenditure cuts, and real estate sales, Polaroid will likely
need to fund both cash use and the $500 million maturing debt in
the near-term.

Pressure to revise the negative outlook will be predicated on
working capital improvements as well as operating expense and
capital expenditure control throughout 2001, as well as their
ability to remove debt financing pressure.

Polaroid, based in Cambridge, Massachusetts, designs,
manufactures, and markets products worldwide that are used
primarily in the imaging fields and related industries.


POLAROID: Who's Who in the Bank Loan Syndicate
----------------------------------------------
Polaroid Corporation is party to a $350,000,000 Amended and
Restated Credit Agreement dated as of December 11, 1998, among
POLAROID CORPORATION, INNER CITY, INC., POLAROID ASIA PACIFIC
LIMITED, POLAROID CARRIBEAN CORPORATION, POLAROID DIGITAL
SOLUTIONS, INC., POLAROID EYEWEAR, INC., POLAROID ID SYSTEMS,
INC., POLAROID MALAYSIA LIMITED, PRD CAPITAL INC., as Borrowers,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative
Agent, BANKBOSTON, N.A., as Co-Agent, MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, as Collateral Agent, and MORGAN GUARANTY
TRUST COMPANY OF NEW YORK, ABN AMRO BANK N.V., BANKBOSTON, N.A.,
TRANSAMERICA BUSINESS CREDIT CORPORATION, FOOTHILL CAPITAL
(L.A.), DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN ISLANDS
BRANCHES, BANK ONE, NA, SENIOR DEBT PORTFOLIO by Boston
Management and Research, as investment advisor, THE SUMITOMO
BANK, LIMITED, NEW YORK BRANCH, WACHOVIA BANK, N.A., FLEET
NATIONAL BANK, MELLON BANK, N.A., TEXTRON FINANCIAL CORPORATION,
PNC BANK, NATIONAL ASSOCIATION, and KZH STERLING LLC, as Lenders.
That Credit Agreement has been amended three times, by Amendment
No. 1 dated as of March 31, 1999, Amendment No. 2 dated as of
September 10, 1999, and Amendment No. 3 dated as of November 10,
1999.  Information concerning each of the Lenders' commitments
under the Credit Agreement is not available from publicly
available loan documents.


RAYTECH CORPORATION: Reports 2000 Financial Results
---------------------------------------------------
Raytech Corporation (NYSE:RAY) reported worldwide sales of
$239.5 million, down $12 million from the 1999 amount of $252
million.

Operating income for 2000 of $27.2 million was down slightly
from the record $27.5 million earned in 1999.

In the second quarter of 2000, the Company recorded a charge of
$7.2 billion related to the bankruptcy process. This charge,
accounted for as liabilities subject to compromise, represents
an estimate of the aggregate amount of allowed claims,
substantially all of which will be discharged at the effective
date of the Bankruptcy as part of the settlement with its
creditors and equity holders with respect to the Plan of
Reorganization. The plan was confirmed in September 2000 and is
expected to become effective in the second quarter of 2001.

Albert A. Canosa, President and Chief Executive Officer, stated,
"The major focus of management during the course of the past
twelve months has been on maintaining profitability in the face
of extremely competitive market conditions. In 2000, the
intensity of pricing pressures became more severe than we have
ever seen as customers across-the-board looked to suppliers to
absorb further price reductions in already tight margins. The
year ended December 31, 2000 was one of the most challenging in
recent memory as we managed to temper a decline in revenues from
worldwide operations, and to maintain operating income at or
near 1999's record level."

Due to the effects of recording the charges related to the
liabilities subject to compromise, the net loss for the Company
for 2000 was $(7,058,978) compared to net income of $16,364 in
1999.

Raytech Corporation is a global manufacturer of energy
absorption and power transmission products, as well as custom
engineered components.

The Company has been under the protection of the U.S. Bankruptcy
Court relating to asbestos personal injury and environmental
liabilities since March 1989.


RHYTHMS NETCONNECTIONS: Fitch Cuts Senior Notes Rating To CCC
-------------------------------------------------------------
Fitch has downgraded Rhythms NetConnections' B- rating to a CCC,
which applies to its 12 3/4% senior notes due 2009, 13 1/2%
senior discount notes due 2008 and 14% senior notes due 2010.
The Outlook for this rating is Stable.

The rating downgrade reflects Rhythms' increased vulnerability
to default due to the scarcity of capital- raising alternatives.
The company is currently exploring private equity as well as
other funding options. Fitch believes the company's cash and
vendor financing will fund the company through 2001. Under the
current business plan, Rhythms needs to raise approximately $750
million to fund its business plan to free cash flow.

To conserve capital, Rhythms scaled back operations to
concentrate on its 40 top markets and made significant
enhancements to its back office operations. Moreover, the
company is relying predominantly on its third-party channels
(i.e., carriers, ISPs) to sell its services to consumer and
business customers, due to the high costs of a direct sales
effort. These efforts should allow the company to remain funded
throughout 2001 and reach EBITDA breakeven in late 2003, earlier
than Fitch had expected.

Rhythms' network and nationwide footprint should provide value
to carriers that sell to large, multi-location businesses.
However, as exemplified by certain Incumbent Local Exchange
Carriers (ILEC), Fitch expects carriers to build organically
out-of-region to address the majority of their addressable
markets. The remaining portion could be served via resell
agreements with Rhythms or discriminating asset purchases from
distressed nationwide and/or regional DSL wholesale providers
(e.g., Northpoint).

Rhythms has been able to maintain a higher level of ARPU
compared to its peers due to the greater proportion of business
customers. In 2000, its ARPU decreased as the company added
increasingly more consumer lines, ending 2000 with a 60/40
business/consumer mix, adding more consumer customers than Fitch
had originally expected. The company more aggressively targeted
consumers as line sharing was implemented and demand from
carrier partners was weaker than Fitch projected. It currently
expects to maintain an approximate 50/50 customer mix going
forward. Although consumers' sales cycles are shorter and
customer acquisition and ongoing monthly costs are lower with
line sharing, the consumer market is more competitive and less
stable than the business market.

The competitive landscape has improved for the company as the
majority of its non-ILEC competitors have either pulled out of
the market, scaled back their business plans or have announced
bankruptcy. Nevertheless, the data local exchange carriers
(DLEC) continue to face many obstacles as they generally lack
control over the end-user, disadvantaging them competitively.
In addition to DSL providers, increasingly more ISPs are going
out of business. This dynamic of a shrinking customer base does
not bode well for Rhythms in the short term as its network
becomes under utilized. Rhythms has taken precautions to
increase the quality of its accounts receivable as its days
sales outstanding (DSO) dropped from 89 in September 2000, to 79
in December 2000. It expects DSO to continue to improve in 2001.

Despite the competitive pricing market in 2000, DSL prices have
begun to stabilize, and in some ILEC areas they have increased.
However, demand remains intense as more companies have begun to
sell data products via DSL due to the benefits of vertical
service integration and scale. Many companies use the DLECs to
offer DSL; however, this may change if they decide to buy assets
from bankrupt DLECs or build organically. This possibility is a
severe threat to Rhythms as it begins to see other customer
volumes grow.

Rhythms is a DLEC that provides multiple DSL technologies to
large enterprises, telecommunication carriers and their ISP
affiliates and other ISPs. The company operates an overlay
network, leasing the majority of its network capacity from the
ILECs and WorldCom. Rhythms currently plans to focus on its top
40 U.S. markets across approximately 1,400 central offices. The
company also has a presence in Canada through its joint venture
(JV) with Optel Communications (now AXXENT Inc) and its JV in
Japan with Mitsui and other telecommunications companies.


SPRING HILLS: Caledonia Mining Issues Payment Default Notice
------------------------------------------------------------
Caledonia Mining Corporation (TSE:CAL.)(OTCBB:CAL) has given
notice to Spring Hills Trading Ltd. that it is in default under
Spring Hills agreements with the Company dated December 22, 2000
and that, if the default is not remedied by March 30, 2001, the
agreements may be cancelled.

The agreements provided for Spring Hills purchase of 49% of the
Company's shares in its South African subsidiary companies
Eersteling Gold Mining Company Ltd. and Barbrook Mines Ltd. None
of the monthly payments that were to have been made to the
Company have been received and other defaults have occurred.

The Company has verified that Spring Hills did, pursuant to the
agreements, initiate gold production from the Barbrook Mine -
through the use of a mining contractor. The Company expects
that, if it terminates the Spring Hills agreements, it will be
able to enter into a contract directly with a mining contractor
so that production will be continued from the Barbrook Mine for
the account of the Company.


STERLING CHEMICALS: Appoints Paul Vanderhoven As New VP & CFO
-------------------------------------------------------------
Sterling Chemicals Holdings, Inc. (STXX) announced that Gary M.
Spitz has resigned as Executive Vice President and Chief
Financial Officer, effective March 21, 2001, and that the board
of directors elected Paul G. Vanderhoven to succeed him. Mr.
Vanderhoven, currently Vice President-Finance and Controller,
has served in positions of increasing responsibility since
joining Sterling (or its predecessor) in 1977.

Commenting on the announcement, Frank P. Diassi, Chairman of the
Board, said, "We are very fortunate to have Paul Vanderhoven's
experience and caliber to manage and lead Sterling's financial
affairs. Paul is ideally suited to the job, with over 24 years
of experience in various financial positions in the
petrochemicals industry including 18 years with our Texas City,
Texas facility. The promotion recognizes the many contributions
and achievements made by Paul over the years."

Based in Houston, Texas, Sterling Chemicals Holdings, Inc. is a
holding company that, through its operating subsidiaries,
manufactures petrochemicals, acrylic fibers and pulp chemicals
and provides large-scale chlorine dioxide generators to the pulp
and paper industry. The Company has a petrochemical plant in
Texas City, Texas; an acrylic fibers plant in Santa Rosa,
Florida; and pulp chemical plants in five Canadian locations and
one U.S. site.


SUN HEALTHCARE: Transfers Three SunBridge Healthcare Facilities
---------------------------------------------------------------
Pursuant to the Court's authorization of Procedures for the
Disposition of Certain Healthcare Facilities and the Related
Leases and Provider Agreements, Sun Healthcare Group, Inc.
sought and obtained approval for the transfer of certain
facilities of Debtor SunBridge Healthcare Corporation:

(1) SunBridge Care and Rehab for Grangsville

     * Annual savings from transfer: $139,168
     * Sales price of inventory: $0
     * Lease rejection damage claim: $609,857
     * Pre-petition employee claims: Debtors shall pay directly
       to employees
     * Landord: National Health Investors, Inc. a Maryland
       corporation
     * Proposed New Operator: Advanced Health Care Corp., an Idah
       Corp.
     * Effective Date: March 1, 2001 provided conditions met
     * Treatment of Medicare Provider Agreement: assume and
       assign
     * New Operator's Share of HCFA Global Settlement: Landlord
       is remitting $20,000 HCFA contribution to Licensee.

(2) The Rehabilitation and Health Care Center
     of Litchfield Hills
     225 Wyoming Avenue, Torrington, CT 06790

     * Annual savings from transfer: not applicable
     * Sales price of inventory: $15,000
     * Lease rejection damage claim: not applicable (lease
       expired by its own terms)
     * Pre-petition employee claims: Debtors shall pay directly
       to employees
     * Landord: Nationwide Health Properties, Inc.
     * Proposed New Operator: Roncalli Health Center of
       Litchfield Hills, LLC
     * Effective Date: March 1, 2001
     * Treatment of Medicare Provider Agreement: reject and
       terminate
     * New Operator's Share of HCFA Global Settlement: $20,000

(3) SunBridge Care & Rehab-Oyster Bay, 3517 11th Street,
     Bermerton, WA 98312

     * Annual savings from transfer: $ 257,986
     * Sales price of inventory: Debtors' Cost
     * Lease rejection damage claim: $ 324,424
     * Pre-petition employee claims: Debtors shall pay directly
       to employees
     * Landord: Bremerton Associates, L.P.
     * Proposed New Operator: Martini Investments, Inc.
     * Effective Date: February 1, 2001
     * Treatment of Medicare Provider Agreement: assume and
       assign
     * New Operator's Share of HCFA Global Settlement: $20,000

(Sun Healthcare Bankruptcy News, Issue No. 19; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


TESSERACT GROUP: Michael Lynch Replaces Lucian Spataro As CEO
-------------------------------------------------------------
Dr. Lucian Spataro, Chief Executive Officer of The TesseracT
Group, a private company that operates schools, resigned
effective March 15 as Chief Executive officer of the
organization. He will remain on the company's Board of
Directors.

Michael Lynch, TesseracT's Chief Operating Officer, has been
appointed by the Board to serve as CEO of the company, as well
as Chief Operating Officer, effective March 15.

TesseracT filed a Chapter 11 petition in U.S. Bankruptcy court
in October.  Since then, the 11-year-old company has sold two of
its private schools to parent groups, and a charter school to
the Gan Yeladeem Learning Center. TesseracT also has sold its
North Scottsdale private school and adjacent property to
Educational Property Investors, Inc., which transaction is set
to close this month, after which TesseracT will only own one
remaining school -- the Eagan Minnesota private school.

TesseracT also continues to operate the Sunrise preschools owned
by its wholly-owned subsidiary, Sunrise Educational Services,
Inc.

Dr. Spataro has resigned to pursue other interests. Dr. Spataro
said: "With the conclusion of these most recent transactions,
TesseracT, its Board, and I have met our goal of transitioning
these schools to other organizations. During this process, we
also worked hard to find consensus with our creditors and meet
the needs of all of our constituent groups as best we could."
He added, "I have nothing but gratitude to the many families,
employees and vendors of this company, all of whom have been
patient and cooperative through this often daunting process."


TESSERACT GROUP: Raises $250K From Asset Sale To Arizona Company
----------------------------------------------------------------
On March 2, 2001, The TesseracT Group, Inc. sold certain of its
assets to Gan Yeladeem, an Arizona non-profit corporation. The
Company made the sale under the terms of a Purchase and Sale
Agreement, dated February 6, 2001, between TesseracT and Gan
Yeladeem.

In the transaction, TesseracT sold assets including equipment,
personal property, records, files and goodwill related to the
property commonly known as the Paradise Lane School in Phoenix,
Arizona. In consideration for the sale of these assets TesseracT
received $250,000 with $150,000 paid at closing and the balance
evidenced by a promissory note secured by the purchased assets.


UNITED ARTISTS: Publishes 2000 Operating Results
------------------------------------------------
United Artists Theatre Company announced its results for the 52
weeks ended December 28, 2000.

Consolidated revenue for 2000 was $550.3 million, versus $631.4
million for the year ended December 30, 1999. Earnings before
interest, taxes, depreciation and amortization (EBITDA)
increased slightly to $61.8 million in 2000, versus the $61.3
million reported in 1999. United Artists' net loss decreased to
$123.6 million for 2000 from the 1999 net loss of $127.3
million, reflecting lower depreciation and amortization, and
reduced impairment and lease restructuring and termination
costs, largely offset by the costs associated with the Company's
reorganization.

The Company said that its revenue was adversely affected by the
closure of non-performing theatres, but that EBITDA and
operating income were positively impacted by those closures and
by an overall improvement in the operating efficiency of the
circuit. As a result of these operating efficiencies, revenue
per average operating screen increased by 2.6% over the 1999
results. EBITDA margins increased from 9.7% in 1999 to 11.2% in
2000.

The Company, which had filed for bankruptcy protection on
September 5, 2000, declared its Plan of Reorganization effective
on March 2, 2001.

Commenting on its 2000 results, Kurt Hall, President and Chief
Executive Officer, said: "I am very pleased that we were able to
improve our operating results despite the disruption to our
business caused by our Chapter 11 proceedings. I am extremely
proud of our management and employees for their focus and hard
work and thankful for the support of the studios and other
business partners during this very difficult restructuring
process."

Mr. Hall concluded by saying: "We look forward to working with
our new controlling shareholder, The Anschutz Corporation, as we
improve the quality of our asset base and continue to improve
our operating results. With our significantly improved
capitalization, we are now well positioned to withstand any
variation in revenue relating to the looming writers' and
actors' strike and other challenges associated with the recovery
of the exhibition industry over the next several years."

United Artists is a leading operator of motion picture theatres
with 1,599 screens in 213 locations. United Artists is privately
held. UATC leases certain properties from a third party that has
issued publicly traded pass-through certificates.


US INDUSTRIES: Fitch Downgrades Senior Notes To Low-B's
-------------------------------------------------------
U.S. Industries, Inc.'s (USI) $375 million senior notes are
downgraded to `BB+' from `BBB-'. In addition, Fitch expects to
rate the company's new senior bank facility `BB+' and the senior
subordinated note offering `BB-'. All ratings are on Rating
Watch Negative.

The downgrades reflect the company's announcement that it will
reacquire Rexair, Inc. and that its operating results will be
weaker than previously anticipated. The company's `F3'
commercial paper rating is withdrawn as the company's program
has been suspended.

USI has announced that it expects to put in place a new $700
million secured credit facility and issue $550 million senior
subordinated notes.

The proceeds from these transactions will be used to refinance
USI's existing $800 million revolving credit facility, repay
$100 million of its 7.125% senior notes due 2003, and reacquire
75% of Rexair, Inc.'s equity from Strategic Industries, LLC.
USI will make the acquisition by refinancing $176 million of
Rexair's debt, which had previously been guaranteed by USI, and
canceling $27 million in Strategic Industries securities held by
USI.

The company's existing senior notes will become secured ranking
pari passu with the new credit facility.

All these transactions are expected to close by April 30, 2001.
As a result, USI's total debt will increase while its operating
profitability will weaken from levels previously anticipated
when Fitch revised the company's senior debt downward to `BBB-'
from `BBB' on March 2, 2001.

Similarly, credit statistics are expected to weaken to levels
that are consistent with non-investment grade ratings.

The Rating Watch Negative status recognizes that the new credit
facility is subject to the completion of the $550 million senior
subordinated note offering.

The resolution of the Rating Watch Negative will also consider
asset divestitures expected over the short-to-intermediate term,
the proceeds of which will be used for debt reduction, as well
as the company's continued operating performance.


VENCOR INC.: Court Okays Lease Termination Pact With TLC
--------------------------------------------------------
Vencor, Inc. sought and obtained the Court's approval, pursuant
to Rules 6004 and 9019 of the Bankruptcy Rules, of a Lease
Termination Agreement With TLC Associates. In the exercise of
their business judgment, the Debtors have concluded that
continuation of the Lease would not contribute to the Debtors'
profitability. The Debtors do not believe that, given the
Premises' age, condition and location, leasing the Premises
would be beneficial to the Debtors' operations. Accordingly,
termination of the Lease, and the elimination of its associated
costs, is in the best interests of the Debtors' estates and
creditors.

On June 6, 1983, TLC, as lessor, and Med West Health Care
Management Corporation, as lessee, executed an operating lease
for a health care facility known as the TLC Nursing Center,
located at 2204 Pease Street, Harlingen, Texas. Med West
subsequently assigned its interest in the Lease to Fundamental
Care Corporation, Inc., which, in turn, assigned its interest
in the Lease to the Hillhaven Corporation. Hillhaven then
subleased the Premises to Texas Health Enterprises, Inc. and
assigned its interest in the Lease to First Healthcare
Corporation, which assigned its interest in the Lease to Vencor
Healthcare, Inc. Vencor Healthcare, Inc., in turn, assigned its
interest in the Lease to Vencor Operating, Inc., which then
assigned its interest in the Lease to Vencor Nursing LP. The
Lease terminates on June 30, 2008.

Pursuant to the Lease, Vencor Nursing LP is obligated to pay TLC
monthly base rent in the amount of $17,410, subject to certain
adjustments as set forth in the Lease. The Lease further
provides that the minimum monthly lease payment shall be no less
than $17,410. The Lease further obligates Vencor Nursing LP to
pay all real and personal property taxes and assessments levied
or assessed against the Premises during the term of the Lease,
subject to proration.

The Lease, moreover, provides that, in the event of a default,
TLC will have the right to terminate the lease and recover from
Vencor Nursing LP "[t]he worth . . . of the amount by which the
unpaid rent . . . exceeds the amount of the loss of rent that
[Vencor Nursing LP] proves could have reasonably been avoided."
In addition, TLC may recover costs proximately caused by [Vencor
Nursing LP's] default. The Debtors do not admit that they are in
default under the Lease.

                The Settlement Agreement

Negotiations between TLC and the Debtors have resulted in a
Lease Termination Agreement which provides, among other things,
that:

      (1) The parties' obligations under the Lease terminate
effective as of the Lease Termination Date;

      (2) the Lease Termination Fee payable in consideration for
TLC's execution of the Settlement Agreement is $300,000;

      (3) Vencor Nursing LP and TLC unconditionally and
irrevocably release and forever discharge each other, and their
respective subsidiaries, predecessor entities and estates
(including without limitation Ventas, Inc., Ventas Realty,
Limited Partnership, and their affiliated entities) from claims
and causes of action; and

IHS Acquisition No. 151, Inc., a debtor and debtor in possession
in the chapter 11 cases jointly administered under Case No. 00-
0389 (MFW), is the last and current successor to Texas Health as
the subtenant of the Premises. By motion dated July 18, 2000,
IHS has sought to reject its sublease of the Premises. Pursuant
to its terms, the Settlement Agreement shall not take effect
until the sublease with IHS has been rejected pursuant to a
final non-appealable order in the IHS bankruptcy proceedings.
(Vencor Bankruptcy News, Issue No. 26; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


WEST COAST: Files Chapter 7 Petition in Wilmington
--------------------------------------------------
West Coast Entertainment Corp., parent of video rental stores
West Coast Video, together with its subsidiaries filed for
Chapter 7 bankruptcy protection in the U.S. Bankruptcy in
Wilmington, Delaware, Reuters reported.

According to West Coast Entertainment, it filed for Chapter 7
after its board considered the financial and operational aspects
of the company's business. As of June 30, it reportedly had
14,210,025 shares outstanding.

The troubled company listed $94,804,000 in assets and
$104,449,000 in debts. West Coast's assets do not include
proceeds from the sale of its remaining 56 operating stores and
related assets to Video One Liquidators in February, Reuters
said.


WEST COAST: Chapter 7 Case Summary
----------------------------------
Lead Debtor: West Coast Entertainment Corp.
              9998 Global Rd.
              Philadelphia, PA 19115

Debtor affiliates filing separate Chapter 7 petitions:

              West Coast Entertainment Corp. of NJ, Inc.
              Showtime, Inc. (Forbes Video)
              West Coast Video of Lawrence Mass., Inc.
              West Coast Entertainment Corp. of Indiana
              West Coast Entertainment Corp. of Penn., Inc.
              Don's Video, Inc.
              West Coast Technology LTP, Inc.
              Casablanca Distributing Corp.
              West Coast Entertainment Corp. of Delaware, Inc.
              Palmer Video Corporation
              Palmer Investment Corporation
              West Coast Video of New Jersey
              Family Country Video, Inc.
              West Coast Entertainment Corp. of Louisiana, Inc.
              King Video Enterprises, Inc.
              Video Smith, Inc.
              Video King of Broome County, Inc.
              Video Giant, Inc.
              Palmer West Coast Corp.
              West Coast Franchising Corp.
              West Coast Financing Corp.
              West Coast Licensing Corp.

Type of Business: West Coast Entertainment Corp. is primarily
involved in video rental services, with branches in New Jersey,
Massachusetts, Indiana, Pennsylvania, Louisiana and Delaware.

Chapter 7 Petition Date: March 27, 2001

Court: District of Delaware

Bankruptcy Case Nos.: 01-01062 through 01-01084

Judge: The Honorable Peter J. Walsh

Debtors' Counsel: Laura Davis Jones, Esq.
                   Pachulski, Stang, Ziehl et al.
                   P.O. Box 8705
                   Wilmington, DE 19899-8705
                   (302)652-4100

Total Assets: $94,804,000

Total Debts: $104,449,000


WORLD ACCESS: Engages UBS Warburg to Help Restructure Debt
----------------------------------------------------------
World Access, Inc. (Nasdaq: WAXS) has retained UBS Warburg to
explore alternatives to restructure the Company's debt
obligations and identify additional sources of capital.

On February 15, 2001, World Access announced that management
believed fourth quarter 2000 results would be worse than
previous expectations and guidance, and that, as a result, the
Company was pursuing a financial restructuring, which included a
tentative agreement with holders of its 13.25% Senior Notes to
restructure that obligation, as well as a new credit line and a
tentative agreement with a vendor to restructure a current trade
obligation.

While the Company has not yet finalized its fourth quarter and
year-end 2000 financial results, management confirms that
revenues for the quarter were approximately 15% below its
original guidance, and advises that the Company incurred
significant EBITDA and Net Earnings losses. Operating Losses
resulted principally from the revenue shortfall, gross margins
that were significantly lower than planned and additional bad
debt reserves. Net earnings were also impacted by a significant
goodwill write-down and a loss on the Company's investment in
BATM Advanced Communications Ltd. (London Stock Exchange: BVC).

As a consequence of the preliminary results for the fourth
quarter, management has revised its operating forecast, and now
believes that available cash is insufficient to both fund the
revised agreement with the holders of the Notes and provide
sufficient cash for operations. In light of this information,
the Company is seeking a financial restructuring of
significantly greater proportions than that announced in the
Company's press release dated February 15, 2001.

John D. Phillips, Chairman and Chief Executive Officer, said,
"The Company currently has cash and investments of approximately
$100 million to continue to fund operating requirements pending
any restructuring. Obviously, the telecommunications industry is
struggling through difficult times, particularly in relation to
the availability of capital. While this has created a liquidity
crisis for us and many of our peers, we continue to believe that
our strategy of consolidating a significant base of small and
medium sized commercial customers in Europe is sound. We have
made significant progress in the implementation of our strategy,
and if our financial restructuring is successful, we expect to
carry forward our strategic goals. In addition, we have
initiated a broad review of our operations with the objective of
focusing on earnings rather than our historical focus on growth.
We expect that this review will result in an operational
restructuring to consolidate or downsize certain operations that
have not yet achieved sufficient scale."

UBS Warburg is expected to initiate further discussions with the
holders of the Notes, evaluate the restructuring of other
obligations, and seek sources of new private equity capital.
While management believes that a significant restructuring is
possible and in the best interest of World Access shareholders
and creditors, there can be no assurance of a successful
restructuring. If World Access is not able to restructure
existing obligations and attract new capital, the Company may
find it necessary to seek protection under Chapter 11 of the
U.S. Bankruptcy Code.

After the expiration of the rescission period offered to the
shareholders of TelDaFax AG (NEUER MARKT: TFX) in connection
with the Company's tender offer for all of the outstanding
shares of TelDaFax, the number of TelDaFax shares tendered and
not withdrawn or rescinded gives World Access a potential
ownership stake in TelDaFax of 70.11%. However, the share
exchange has not been completed, and the Company will release
additional information regarding the TelDaFax share exchange
after consultation with the relevant authorities and the
Company's advisors.

                     About World Access

World Access is focused on being a leading provider of bundled
voice, data and Internet services to small- to medium-sized
business customers located throughout Europe. In order to
accelerate its progress toward a leadership position in Europe,
World Access is acting as a consolidator for the highly
fragmented retail telecom services market, with the objective of
amassing a substantial and fully integrated business customer
base. To date, the Company has acquired several strategic
assets, including Facilicom International, which operates a Pan-
European long distance network and carries traffic for carrier
customers, NETnet, with retail sales operations in 9 European
countries, and WorldxChange, with retail accounts in the US and
Europe. World Access, branding as NETnet, offers services
throughout Europe, including long distance, internet access and
mobile services. The Company provides end-to- end international
communication services over an advanced asynchronous transfer
mode internal network that includes gateway and tandem switches,
an extensive fiber network encompassing tens of millions of
circuit miles and satellite facilities. For additional
information regarding World Access, please refer to the
Company's website at www.waxs.com.

                            *********

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.

                           *********

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, Larri-Nil Veloso, 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.

                    *** End of Transmission ***