/raid1/www/Hosts/bankrupt/TCR_Public/010809.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Thursday, August 9, 2001, Vol. 5, No. 155


360NETWORKS: Enters Into Settlement Pact With Quantum Logistics
ACME TELEVISION: S&P Junks Corporate & Senior Debt Ratings
ADVOCAT INC: If Bonding Unavailable, May File for Chapter 11
AMF BOWLING: US Trustee Appoints Unsecured Creditors' Committee
AMPAC/PRINTMASTERS: Engage Advisors to Sell Operations

ARCH WIRELESS: Posts $1.1 Billion Net Loss In Second Quarter
ARMSTRONG: Employs Peterson Consulting For Statistical Work
BANCA POPOLARE: Fitch Lowers Ratings To BBB+ and C
BIO-AQUA: Shares Face Delisting From American Stock Exchange
BRIDGE INFORMATION: Committee Hires Foley & Lardner As Counsel

CAPITAL ENVIRONMENTAL: Auditors Doubt Going Concern Ability
COMDISCO INC.: Moves To Extend Stay To Non-Debtor Affiliates
COVAD: Intends To File For Chapter 11 To Restructure $1.4B Debt
EMPRESA ELECTRICA: S&P Downgrades Ratings To CC From CCC
FIELDS TECHNOLOGIES: Engages Tanner + Co As New Accountants

FREEREALTIME.COM: Shares Now Quoted On the Pink Sheets
GENERAL TIME: Salton Acquires Timekeeping Brands For $9.8MM
HALO INDUSTRIES: Second Quarter Net Loss Amounts To $312.6 Mil
HERBST GAMING: S&P Assigns B Rating To Proposed Senior Notes
ICG COMMUNICATIONS: Seeks Approval Of New SNET Agreement

IMPOWER INC.: List of 17 Largest Unsecured Creditors
JENNY CRAIG: NYSE To Delist Shares On August 16
KITTY HAWK: Modifying Chapter 11 Plan
MARINER: NovaCare Holdings Objects To Disclosure Statement
MEDPOINTE: S&P Rates $225MM Senior Secured Bank Loan At B+

NEXTWAVE TELECOM: Files Reorganization Plan In S.D. New York
ORIUS CORPOEATION: S&P Removes Ratings From Credit Watch
PACIFIC GAS: Bakersfield QFs Want Decision On Power Contracts
PITNEY BOWES: S&P Assigns BB Corporate Credit Rating
PREMCOR REFINING: S&P Rates Proposed $500MM Bank Loan At BB

QUALITY STORES: Ratings Fall To Lower-C's, Outlook Is Negative
SL IDUSTRIES: Posts Weak Q2 Results & Looks For More Funds
SUN HEALTHCARE: Asks For Fifth Extension Of Removal Period
SUN INTERNATIONAL: S&P Rates Proposed $200MM Senior Notes at B+
TRUSERV INC.: Debt Covenant Defaults Raise Going Concern Doubts

USC CORPORATION: Employs Chilmark Partners As Financial Advisor
VLASIC FOODS: Asks Court To Extend Rule 9027 Removal Period
WARNACO GROUP: Rejecting Four Unexpired Store Leases
WILLCOX & GIBBS: Files Chapter 11 Petition in Wilmington
WILLCOX & GIBBS: Case Summary & 20 Largest Unsecured Creditors

WINSTAR COMMUNICATIONS: Retains Akin Gump As Special Counsel
WOLF CAMERA: Promotes Ted de Buhr to President & COO Slot


360NETWORKS: Enters Into Settlement Pact With Quantum Logistics
360networks inc. and its debtor-affiliates seek the Court's
authority to enter into an interim settlement agreement with
Quantum Logistics, Inc.

The Debtors and Quantum are parties to a Warehouse Storage
Agreement dated February 8, 2001.  Under that agreement, Quantum
provides warehouse storage space, materials management and
transportation services to the Debtors, including unloading,
loading, stocking, kitting, labeling, and preparing materials
for transport.

Quantum asserts that the Debtors owe $350,000, and that debt is
secured by a lien on the Debtor's goods stored in Quantum's

To resolve this claim, Alan J. Lipkin, Esq., at Wilkie Farr &
Gallagher, in New York, relates, the Debtors and Quantum sat
down and talked.  Those talks culminated in an Interim
Settlement Agreement providing that:

   (1) the Debtors shall have immediate access to all of its
       goods stored in Quantum's warehouse.

   (2) notwithstanding the Debtors' removal of such goods from,
       or storage of additional goods in, Quantum's warehouse in
       the future, the amount and secured nature, if any, of
       Quantum's pre-petition claim against the Debtors under the
       Agreement shall be determined based on the facts in
       existence as of the Petition Date.

   (3) until the Agreement is assumed or rejected, the Debtors
       will remain current on its payment obligations under the
       Agreement for the period July 1, 2001 going forward.

   (4) if the approximate aggregate resale value of the pre-
       petition goods located in Quantum's warehouse is expected
       to fall below $1,000,000 (U.S) by either the Debtors or
       Quantum, then the Debtors shall provide Quantum with 3
       days' advance written notice of such fact.

The Debtors believe the settlement agreement is in the best
interests of their estates.  If the Court grants this settlement
agreement, Mr. Lipkin says, the Debtors will gain immediate
access to its $20,000,000 worth of goods. (360 Bankruptcy News,
Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900)

ACME TELEVISION: S&P Junks Corporate & Senior Debt Ratings
Standard & Poor's lowered its corporate credit and senior
unsecured debt ratings on ACME Television LLC/ACME Finance Corp.
to triple-'C'-plus from single-'B'-minus. The senior secured
bank loan rating was lowered to single-'B'-minus from single-
'B'. The current outlook is negative.

The rating actions are based on concern about ACME's tightening
liquidity. Despite improving audience ratings, soft advertising
demand and rising operating expenses have resulted in declining
EBITDA and a falloff in the company's already fractional
interest coverage. Discretionary cash flow--which was positive
last year because of the large non-cash interest component--is
negative now that $9.5 million semiannual cash interest payments
are required on the senior discount notes.

ACME had $25 million cash as of June 30, 2001, which will likely
meet its liquidity needs into 2002. Delayed capital spending on
digital TV conversion will help conserve cash in the near term.
The $30 million bank facility expiring in Sept. 2002 is
currently undrawn, but will unlikely provide liquidity unless
Dec. 31, 2001 financial covenant tests are amended. ACME has
rights to acquire construction permits for four additional
stations. Although additional funds will be required once the
stations receive FCC approval, the company has some discretion
as to the timing of its building plans and financing needs.

Sustained advertising softness and rising programming expense
will restrain EBITDA in the second half of 2001. Ratings and
revenue generation from new programming to be launched this fall
are yet to be determined. In addition, the stations, which are
affiliated with the still-emerging WB Television Network, could
face some audience ratings uncertainty related to Fall 2001
network programming changes. Most of the stations are still
developing and have weaker local franchises than major network
affiliates, making them more dependent on the network.

Ratings reflect ACME's high financial risk from debt-financed
start-up television stations, modest company size, and cash flow
concentration. Tempering factors include improving audience
ratings and the stations' status as affiliates of the WB
Network, which has had a degree of success reaching younger
audiences. Station asset values, particularly the St. Louis VHF
station, also provide some cushion for the ratings.

ACME owns WB affiliates in nine mid-size markets ranked between
21 and 83, reaching about 5.4% of U.S. television households.
St. Louis is ACME's largest market, and its established station
there represents a high degree of cash flow concentration.
Extended ramp-ups at the other stations, which were largely
launched using construction permits, have restrained financial
profile improvement. Nevertheless, the company has a strong
relationship with the WB Network, and positive audience rating
trends should drive revenue growth once the advertising climate

For the six months ended June 30, 2001, ACME's revenue was flat,
but EBITDA fell 23.5% due to higher programming and sales
expense. On a trailing 12 month basis, the EBITDA margin fell to
about 19% as of June 30, 2001, from a 21% year-end 2000 level.
Total interest coverage for the 12 months ended June 30, 2001,
including non-cash interest on the holding company discount
notes, was very weak at about 0.5 times (x) and cash interest
coverage was 0.7x. Debt divided by EBITDA was very high at
almost 18x.

                     Outlook: Negative

Sustained audience rating gains and a recovery of overall
advertising demand will be important factors in maintaining the
current ratings. Further downward pressure on the ratings is
likely unless ACME takes steps to improve its tightening

                      Ratings Lowered

      ACME Television LLC/ACME Finance Corp.    To     From
         Corporate credit rating                CCC+     B-
         Senior secured bank loan rating        B-       B
         Senior unsecured debt                  CCC+     B-

ADVOCAT INC: If Bonding Unavailable, May File for Chapter 11
Advocat Inc. (OTC Bulletin Board: AVCA) announced that the judge
presiding over the Mena, Arkansas, professional liability
lawsuit against the Company denied the Company's post-trial
motions to overturn or reduce the verdict against Advocat and
certain of its subsidiaries totaling $78.425 million.  The
Company plans to appeal the verdict.

Advocat and the plaintiffs entered into a 15-day standstill
following the verdict, during which the plaintiffs have agreed
that they will not attempt to execute on the judgment.  The
Company has requested that its insurance carriers post a bond in
the full amount of the verdict and is awaiting a response from
them.  In the event the Company's insurance carriers do not post
the full amount of the bond, the Company does not have the
financial resources to post a bond in the amount not covered by
insurance.  In that case, if the plaintiffs attempt to execute
on the judgment, the Company would have to consider other
alternatives, including seeking bankruptcy court protection, in
order to stay execution of the judgment.

Advocat Inc. operated 120 facilities including 56 assisted
living facilities with 5,245 units and 64 skilled nursing
facilities containing 7,230 licensed beds as of March 31, 2001.
The Company operates facilities in 12 states, primarily in the
Southeast, and four provinces in Canada.

For additional information about the Company, visit Advocat's
Web site at http://www.irinfo.com/avc

AMF BOWLING: US Trustee Appoints Unsecured Creditors' Committee
Robert B. Van Arsdale, the United States Trustee for Region IV,
appoints these eight unsecured claimants to the Official
Committee of Unsecured Creditors in AMF Bowling Worldwide,
Inc.'s Chapter 11 cases:

              New England Plastics
              Attn: Michael P. Famiglietti, Treasurer
              310 Salem Street
              Woburn, Massachusetts 01801
              Phone: (781)933-6004
              Fax:   (781)933-2726
              E-mail: mfam.nepcorp@verizon.net

              Coca-Cola Fountain
              Attn: William Kaye
              31 Rose Lane
              East Rockaway, New York 11518
              Phone: (516)374-3705
              Fax:   (516)569-6531
              E-mail: billkaye@optonline.net

              Federated Investment Management Company
              Attn: Steven Wagner, Assistant Vice President
              1001 Liberty Avenue - 2nd Floor
              Pittsburgh, Pennsylvania 1522-3779
              Phone: (412)288-6956
              Fax:   (412)288-6737
              E-mail: swagner@federatedinv.com

              First Star - U.S. Bank Affiliate of First Star
              Attn: Lawrence J. Bell
              U.S. Bank Trust, NA
              1420 Fifth Avenue, 7th Floor
              Seattle, Washington 98101
              Phone: (206)344-4654
              Fax:   (206)344-4630
              E-mail: lawrence.bell@usbank.com

              Zurich Scudder Investments, Inc.
              Attn: Robert J. Horton, Sr., Vice President
              222 South Riverside Plaza
              Chicago, Illinois 60606
              Phone: (312)537-8841
              Fax:   (312)537-1001
              E-mail: robert_j_horton@scudder.com

              The Bank of New York, Indenture Trustee
              Attn: Irene Siegel, Vice President
              101 Barclay Street - 21W
              New York, New York 10286
              Phone: (212)815-5703
              Fax:   (212)815-3466
              E-mail: isiegel@bankofny.com

              GSCP Recovery, Inc.
              Attn: Robert Hamwee, Managing Director
              GSC Partners
              500 Campus Drive, Suite 220
              Florham Park, New Jersey 07932
              Phone: (973)437-1010
              Fax:   (973)437-1037
              E-mail: rhamwee@gscpartners.com

              Peak Contracting, Inc.
              Attn: Bryan Byrd - President
              13003 Shaneybrook Circle
              Reistertown, Maryland 21136
              Phone: (410)628-1223
              Fax:   (410)628-1223
              E-mail: peakcontracting@aol.com

(AMF Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

AMPAC/PRINTMASTERS: Engage Advisors to Sell Operations
Allen Barnes, president of Ampac Acquisition Corp. and
Printmasters Acquisition Corp., announced details of plans to
sell the operations of the two companies.  Ampac and
Printmasters, both of which operate flexible packaging plants in
Albertville, Alabama, filed for Chapter 11 bankruptcy protection
on April 12, 2001.

"We believe that Ampac and Printmasters have valuable franchises
in both their market niches and their wide range of
manufacturing processes.  We are confident that the companies
will do well under new ownership," said Barnes. "To assist with
the sale process, the companies have engaged two investment
banking groups, Providence Advisors and Brookwood Associates."

Ampac, which manufactures printed and unprinted wicketed bags
for the poultry, produce and consumer goods industries, reported
sales of $13.3 million for the year ended March 31, 2001.
Printmasters, with fiscal year revenue of $15.5 million,
produces six and eight color line-printed and process-printed
flat-pack and wicketed bags and pouches for the lawn and garden,
food and other consumer goods industries.

Companies or parties interested in learning more about the
acquisition opportunity should contact Brookwood Associates in
Atlanta at 404.874.7433 or Providence Advisors in Charlotte at

ARCH WIRELESS: Posts $1.1 Billion Net Loss In Second Quarter
Arch Wireless, Inc. (OTC Bulletin Board: ARCH), one of the
leading wireless Internet messaging and mobile information
providers in the United States, announced its operating results
for the second quarter ended June 30, 2001. Second quarter 2001
results include the operating performance of Paging Network,
Inc. (PageNet), which Arch acquired on November 10, 2000.

Second quarter consolidated Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA), a commonly used measure
of financial performance in the wireless industry, increased 26%
to $78.3 million, compared to $61.9 million in the year-earlier
quarter. Second quarter net loss, which included a $976 million
writedown of certain one-way paging assets as described below,
was $1.102 billion, compared to a net loss of $20 million for
the same quarter of 2000.

Consolidated net revenues for the second quarter rose 63% to
$292 million, compared to $179 million in the second quarter of
2000, while consolidated service revenues for the quarter were
$284 million, compared to $176 million in the year-earlier
period. Second quarter gross revenues totaled $303 million,
compared to $188 million a year ago.

Consolidated second quarter EBITDA of $78.3 million includes
EBITDA of $84.9 million from the company's traditional (or one-
way) messaging business, compared to $63.9 million in the year-
earlier quarter, and negative EBITDA of $6.6 million associated
with its advanced messaging (or two-way) business, compared to
negative EBITDA of $2.0 million in the second quarter of 2000.
Second quarter net revenues include $273 million from
traditional one-way messaging services and $19 million from
Arch's two-way messaging business.

Arch reported net additions of 61,000 two-way messaging units
during the quarter, bringing Arch's total two-way units in
service at June 30 to 282,000. The company also reported a net
decline of 936,000 traditional one-way units during the quarter.
Total units in services at June 30 were 10,235,000.

Arch said higher than expected one-way customer losses and bad
debt expense in the quarter negatively impacted Arch's forecasts
for the balance of 2001. As a result, the company elected to
withdraw its May 23 exchange offer proposal to restructure its
debt and currently is updating its business plan and evaluating
restructuring options.

The company said it recorded a writedown of $976 million in the
carrying value of certain one-way paging equipment, computer
equipment and intangible assets during the quarter due to the
impairment of those assets based on estimated discounted future
cash flows. The charge is included in depreciation and
amortization expense in Arch's statement of operations for
the three- and six-month periods ended June 30, 2001.

Arch established several important strategic relationships
during the quarter to help build support for its two-way
business. In June, the company began working with a number of
electronic equipment manufacturers to assist them in developing
devices to be used on Arch's two-way messaging network. The
manufacturers, including Advantra International, Standard
Telecom, and Fine Telecom, were recently licensed by Motorola,
Inc. to produce ReFLEX(R) devices. In addition, Arch announced a
long-term agreement with Gemstar TV Guide in June to provide
wireless transmission of Gemstar-TV Guide data, advertising and
promotional offers through interactive television sets.

                  Other company highlights

In August, Arch Wireless:

Announced the availability of a suite of services that will
enable customers to manage their personal and corporate e-mail
accounts wirelessly. The services are designed to satisfy a
broad range of user needs and to be compatible with nearly any
type of e-mail account. New e-mail account services include Arch
Webstermail(TM), MyMail Desktop, MyMail Desktop Plus, MyMail
Enterprise and the Arch Message Center(TM).

In July, Arch Wireless:

Announced an agreement with ESPN, Inc. that will bring up-to-
the-minute sports information to wireless messaging customers.
Under the agreement, ESPN will market ESPN-branded messaging
devices, called ESPN To Go, with Arch Wireless messaging
services through its WWW.ESPN.COM Web site. Also, Arch will
offer ESPN To Go through several of its retail stores. The
service, expected to be introduced in time for the 2001 football
season, will enable fans to receive the latest scores,
statistics and late-breaking news throughout the day on their
wireless devices.

In June, Arch Wireless:

Began working with Fine Telecom, Inc., a Korean-based provider
of wireless telecommunications devices, to develop new and
lower-cost two-way messaging devices that will run on Arch's
two-way wireless messaging network. Arch is providing technical
support to Fine Telecom, which recently signed a licensing
agreement with Motorola, Inc.

Disclosed that it has begun working with Standard Telecom
America, a leading provider of wireless messaging products sold
under the Nixxo brand name, in the development of new and lower-
cost two-way messaging devices using Motorola's ReFLEX(R)
technology. Arch is providing technical support following
Standard Telecom's recent licensing agreement with Motorola.

Announced that it has begun providing technical support to
Advantra International, a Belgian-based wireless device
manufacturer, in the development of new and lower-cost ReFLEX
radios for wireless devices that run on ReFLEX two-way messaging
networks. Arch is working closely with Advantra following that
company's recent enhanced licensing agreement with Motorola.
Announced a long-term agreement with Gemstar-TV Guide
International, Inc., the nation's premier provider of
Interactive Program Guide (IPG) services, to provide wireless
transmission of Gemstar-TV Guide GUIDE Plus+(R) data,
advertising and promotional offers through GUIDE Plus+-equipped
interactive television sets in the United States. Once
implemented, television sets equipped with Gemstar-TV Guide's
technology and ReFLEX-based transceivers will enable users to
receive and send information over Arch's nationwide two-way
wireless ReFLEX network.

In May, Arch Wireless:

Announced a new client-based messaging server that enables
corporate clients to integrate wireless messaging, e-mail,
voicemail, fax, Internet, Intranet and legacy systems. The
messaging server's intelligent gateway, which provides advanced
connectivity to the business market, allows various
communication devices to "talk" to each other by converting
messages into the appropriate format for the receiving device.

Initiated a new marketing program for its Arch Webster(TM) 100
two-way interactive wireless messaging service that targets hard
of hearing individuals. Under the program, Arch will donate five
percent of the monthly service fee to Self Help for Hard of
Hearing People (SHHH), an organization dedicated to enhancing
the quality of life for people who are hard of hearing.

Completed the transfer of 900 MHz SMR (Specialized Mobile Radio)
licenses to an affiliate of Nextel Communications, Inc. in
satisfaction of a previously announced agreement between the two
companies. Nextel had recently received regulatory approval for
the transfer.

In April, Arch Wireless:

Announced that its Honolulu-based affiliate, RAM Paging Hawaii,
began operating under the name Arch Wireless, Inc. throughout
the islands. RAM Paging, which became part of Arch in June 1999
in connection with Arch's acquisition of MobileMedia Corp., had
been a leading wireless messaging and paging provider in Hawaii
since 1988.

Began offering two-way wireless messaging service in northern
Michigan. Arch expanded its service in the region, which
includes the entire northern half of Michigan's lower peninsula,
to include full two-way interactive messaging, wireless e-mail
and wireless Internet access.

Arch Wireless, Inc., headquartered in Westborough, Mass., is a
leading two-way wireless Internet messaging and mobile
information company with operations throughout the United
States. The company offers a full range of wireless services to
both business and retail customers, including wireless
e- mail, two-way wireless messaging and mobile data, and paging
through five regional divisions. Arch provides wireless services
to customers in all 50 states, the District of Columbia, Puerto
Rico, Canada, Mexico and in the Caribbean. Additional
information on Arch Wireless is available on the Internet at

ARMSTRONG: Employs Peterson Consulting For Statistical Work
Subject to his approval, Armstrong Holdings, Inc. informs Judge
Farnan that they have employed as data technicians and
statistics consultants to the Debtors in these chapter 11 cases,
and ask for that approval.  Peterson has provided data and
statistics consulting services to AWI since 1985 with respect to
the asbestos bodily injury claims filed against AWI and the
insurance coverage available to AWI to cover the costs of those
claims.  In its dual role as consultant to the Asbestos Claims
Facility and consultant to the Center for Claims Resolution,
Peterson Consulting was responsible for the collection and
analysis of data related to AWI's asbestos bodily injury claims
from the time of filing through the resolution of the claim.
Since the Petition Date, Peterson Consulting has continued to
work with The Feinberg Group and internal AWI personnel with
respect to the collection of AWI asbestos claims data from the
Center for Claims Resolution and the understanding and analysis
of that data.  Peterson Consulting has also continued to work
with Covington & Burling and Gilbert Heintz & Randolph on issues
related to AWI's ongoing insurance coverage disputes.

The Debtors now seek authorization nunc pro tunc to January 2,
2001, to retain Peterson Consulting on behalf of these estates.
The Debtors explain the delay in submitting this application by
telling Judge Farnan that, although the Debtors originally
contemplated that Peterson Consulting would be retained and
compensated by the Feinberg Group, the Debtors have now
determined to retain Peterson Consulting directly so as to
permit Peterson Consulting to continue assisting The Feinberg
Group and the Debtors' other professionals on specified matters
as necessary during these bankruptcy proceedings, and to permit
Peterson to seek compensation from the Debtors' estates for such

The Debtors now seek to retain Peterson Consulting as their data
technician and statistics consultant to continue conducting
factual investigations and analyses, performing statistics
research, and assisting and advising the Debtors concerning:

        (i) the Debtors' historical asbestos claims information,

       (ii) the Debtor's potential future asbestos claims
            liabilities, and

      (iii) the Debtors' insurance coverage available to pay
            asbestos claims.

The services to be performed by Peterson Consulting are not
duplicative in any manner of the services to be performed by The
Feinberg Group or any other professional retained by the Debtors
in these chapter 11 proceedings.  The services to be performed
by Peterson Consulting are separate and distinct from the
services to be performed by the Debtors' other professionals
because Peterson Consulting wil provide data and statistics
consulting assistance to the Debtors' professionals relating
to the analysis of AWI's historical asbestos claims information
as provided by the Center for Claims Resolution for the purpose
of assessing AWI's potential future asbestos liabilities.
Peterson Consulting will also provide data and statistics
consulting assistance to the Debtors' professionals relating to
the allocation of asbestos litigation costs to AWI's available
insurance coverage for the purpose of recovering funds from
AWI's insurers.

Peterson's compensation for professional services will be based
upon fixed-fee arrangements and the time expended to render such
services, and will be computed at the hourly billing rates
customarily charged by Peterson Consulting for such services.
Peterson's current hourly billing rates are:

                 Managing Director              $300-450
                 Director                       $250-350
                 Principal                      $240-300
                 Senior Engagement Manager      $190-250
                 Senior Consultant              $175-200
                 Consultant                     $150-180
                 Associate                      $125-155
                 Analyst                        $ 85-120

In the normal course of business, Peterson Consulting revises
its regular hourly rates to reflect changes in responsibilities,
increased experience and increased costs of doing business.
Accordingly the Debtors ask Judge Farnan that the rates quoted
be revised to the regular hourly rates that will be in effect at
that time.  Changes in Peterson Consulting's regular hourly
rates will be noted on the invoice for the first time period in
which a revised rate becomes effective.

Mr. William Jones, Managing Director of Peterson Consulting of
Washington, DC, tells Judge Farnan that Peterson is a
disinterested person within the meaning of the Bankruptcy Code,
neither holding nor representing any interest adverse to the
Debtors or these estates in the matters for which employment is
sought.  However, Mr. Jones advises that as part of Peterson's
diverse practice, members of the company appear in numerous
cases, proceedings and transactions that involve many different
professionals who may represent claimants and parties in
interest in the Debtors' chapter 11 cases.  Peterson has been
represented by several attorneys and law firms who may be
involved in these proceedings.  In addition, Peterson has in he
past, may currently, and will likely in the future be working
with other professionals involved in these cases in matters
unrelated to the Debtors and these cases, but none of these
relationships create interests materially adverse to the Debtors
in these employment matters, and none are in connection with
these cases.

In addition, Mr. Jones says that Peterson is engaged in other
asbestos-related consulting engagements, including retention as
experts providing services related to the collection ands
analysis of information regarding claims, insurance coverage and
claim allocation to the debtors in other chapter 11 cases.  It
is Mr. Jones' understanding that other professionals retained in
the Debtors' chapter 11 cases and certain committee members or
committee representatives overlap in these cases as well.

Mr. Jones discloses that Peterson Consulting is owed $23,233
with respect to prepetition fees and expenses.  Upon approval of
the application, Peterson agrees to voluntarily waive its
prepetition claim against the Debtors.  Accordingly, subject to
approval of the Application, Peterson is not a "creditor" of
these estates. Furthermore, to the best of Mr. Jones' knowledge,
no member of employee of Peterson Consulting is a holder of any
shares of the Debtors' stock.

Agreeing with the desirability of this employment, Judge Farnan
grants the application and approves Peterson Consulting's
employment nunc pro tunc to January 2, 2001. (Armstrong
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

BANCA POPOLARE: Fitch Lowers Ratings To BBB+ and C
Fitch, the international rating agency, has removed the
RatingWatch Negative in place for the Long-term and Individual
ratings of Banca Popolare dell'Emilia Romagna (BPER), and
lowered the ratings by one notch to 'BBB+' and 'C' respectively.
Fitch affirms the Short-term rating at 'F2' and the Support
rating at '4'. The Long-term rating Outlook is Stable.

The rating action follows the acquisition in March 2001 by BPER
of Banco di Sardegna (BdS). The new ratings for BPER reflect its
strong local franchises, reasonable earnings, and medium size.
They also reflect pressure on the group's capital adequacy
ratios, weak asset quality and structural problems in the newly
acquired BdS. Asset quality in the latter is a concern: had BdS
been consolidated in BPER at end-2000, group net doubtful loans
would have been equal to c.64% of the new group's Tier 1 capital
base. Although BPER has a track record of improving credit risk
in smaller, problematic bank subsidiaries, BdS is much larger,
equal to half the size of BPER, and thus presents a weightier

BPER's goal is to become a "bank of the regions". Attracted by
BdS strong market shares, BPER sees scope for expansion, by
selling modern, more remunerative, savings products, such as
life assurance, fund and asset management services, to BdS
customers. In BdS, there is also scope for achieving
productivity gains and selling non-strategic participations.
BPER has pledged to maintain the legal autonomy of BdS, but
management is aware of the immediate need to change credit
procedures, information systems and retrain staff to bring
practices into line with those of the parent bank and is
currently devising plans to this effect. In view of the need to
update and improve most aspects of the bank's management, Fitch
notes that BPER will be tested in its ability to manage the
necessary, rapid integration of BdS. Capital has come under
strain following the acquisition and BPER estimated that, at
end-2000, the Tier 1 ratio for the new group would have been
6.7%. BPER is raising capital and, by end-2001, expects its Tier
1 ratio to rise to a more reassuring 7.7%.

BIO-AQUA: Shares Face Delisting From American Stock Exchange
Bio-Aqua Systems, Inc. (AMEX:SEA) announced that on July 17,
2001, Bio-Aqua received notice from the American Stock Exchange
Staff indicating that Bio-Aqua no longer complies with the
American Stock Exchange's continued listing guidelines as set
forth in the American Stock Exchange Company Guide. The American
Stock Exchange's notice was based on the following concerns and
applicable continued listing guidelines: unsatisfactory
operating results and impaired financial condition (as set forth
in Section 1003(a)(iv) of the Company Guide); reduction of
operations (as set forth in Section 1003(c)(i) of the Company
Guide); failure to hold an annual meeting and file a definitive
proxy statement (as set forth in Section 704 and Section 1003(d)
of the Company Guide); and the market value of public float
below $1,000,000 and low selling price of common stock(as set
forth in Section 1003(f)(v) and Section 1003(b)(i)(C) of the
Company Guide).

Due to the above deficiencies, Bio-Aqua's securities are subject
to being delisted from the American Stock Exchange. Bio-Aqua has
appealed the determination made by the American Stock Exchange
and has requested a hearing before a committee of the American
Stock Exchange.

BRIDGE INFORMATION: Committee Hires Foley & Lardner As Counsel
The Committee sought and obtained the Court's authority to
employ and retain as its counsel.  The Committee will look to
Foley & Lardner for:

     (a) legal advice with respect to the Committee's powers and
         duties in these cases;

     (b) the preparation on behalf of the Committee of all
         necessary applications, answers, orders, reports and
         other legal papers;

     (c) the representation of the Committee in any and all
         matters involving contests with the Debtor, alleged
         secured creditors and other third parties;

     (d) the negotiation of consensual plans of liquidation or
         reorganization; and

     (e) the performance of all other legal services for the
         Committee, which may be necessary and proper in these

Foley & Lardner will be compensated at its professionals'
customary hourly rates:

              George T. Simon           $600 per hour
              Mark L. Prager            $455 per hour
              Charles F. Vihon          $350 per hour
              Michael J. Small          $330 per hour
              Joseph M. Talarico        $235 per hour
              Steven M. Gerenraich      $230 per hour
              Peter E. Pinnow           $200 per hour
              Katherine E. Hall         $100 per hour

Mr. Prager assures the Court that Foley & Lardner is a
"disinterested person" as defined in the Bankruptcy Code, and
does not hold or represent any interest adverse to the
Committee. (Bridge Bankruptcy News, Issue No. 12; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

CAPITAL ENVIRONMENTAL: Auditors Doubt Going Concern Ability
According to the auditors' report concerning Capital
Environmental Resource Inc.: "There is substantial doubt about
the Company's ability to continue as a "going concern" based on
the present financial position of the Company.....a condition of
the Company's Senior Debt facilities required the Company to
provide the bank syndicate with a binding letter of commitment
for an equity issuance or subordinated debt financing with net
proceeds of $25.0 million by March 15, 2001, and that the
financing be raised no later than June 1, 2001. On March 15,
2001, the Company provided a notice of default to its lenders
indicating that the binding letter of commitment condition was
not met and, as a result, the Company was in default of its
Senior Debt."

"On April 2, 2001, the Company disposed of substantially all of
its U.S. assets. The net proceeds from the sale, approximately
$16.4 million, were used to repay Senior Debt. In conjunction
with the sale, the bank syndicate agreed to forebear on their
rights under the Senior Debt agreement and enter into a fourth
amendment to the Senior Debt facility."

"The effect of the fourth amendment was that the bank syndicate
agreed to exclude the effects of the U.S. asset sale for
purposes of determining the Company's compliance with its
financial covenants and have agreed not to take action with
respect to certain defaults under the Senior Debt facilities
provided that the Company satisfies certain conditions,
including that the Company continues to make reasonable progress
towards a transaction to reduce or refinance the Senior Debt by
$16.0 million on or before June 15, 2001."

"On June 15, 2001, the Company had not raised $16.0 million from
the issuance of equity or subordinated debt and therefore
continued to be in breach of its obligation under the Senior
Debt facilities. As at June 30, 2001, the Company was in
discussions with respect to such transactions and with its
senior lenders with respect to a further amendment to its Senior
Debt facilities; however, there is no assurance that the Company
will be successful in its efforts to raise the required
financing, and that the bank syndicate will continue to support
the Company until the required financing is raised. Management
has also taken steps to reduce costs and improve the ongoing
profitability of the Company. On that basis, the Company
believes that the "going concern" basis remains appropriate. If
the "going concern" basis was not appropriate for these
consolidated financial statements, then significant adjustments
would be necessary to the carrying value of the assets and
liabilities, the reported revenue and expenses and the balance
sheet classifications used. The appropriateness of the "going
concern" assumption is dependent upon, among other things, the
ability to successfully raise the required or replacement
financing and the ability to generate sufficient cash from
future profitable operations to meet obligations as they become

COMDISCO INC.: Moves To Extend Stay To Non-Debtor Affiliates
The automatic stay should be extended to Comdisco Inc.'s non-
debtor affiliates and foreign subsidiaries, George N. Panagakis,
Esq., at Skadden Arps Slate Meagher & Flom, in Chicago,
Illinois, argues.

Due to the global nature of their business, Mr. Panagakis notes,
the Debtors have extensive dealings with foreign creditors. The
Debtors' foreign subsidiaries are also critical to their
operations, Mr. Panagakis adds. Therefore, Mr. Panagakis
concludes, the Debtors' foreign subsidiaries should be protected
otherwise it would harm the Debtors' businesses and will hinder
reorganization efforts.

Mr. Panagakis explains that the automatic stay provision enjoins
all persons and governmental units from:

      (a) commencing or continuing judicial, administrative or
          other proceeding against Debtor or recovering a claim
          against the Debtor that was commenced before the
          Debtors' Chapter 11 cases; and

      (b) taking action to collect a claim against the Debtor
          that arose before commencement of the Debtors' chapter
          11 cases.

Mr. Panagakis tells Judge Barliant that an order is necessary
because not all parties affected by the filing of these chapter
11 cases are aware of the Bankruptcy Code provisions. Mr.
Panagakis notes that many foreign creditors are not aware of the
protection afforded to the Debtors. Such an order will also help
prevent parties from attempting to liquidate the Debtors' assets
before the Court has reviewed the matter fully and aid the
Debtors' reorganization efforts, Mr. Panagakis adds.

Mr. Panagakis relates that the Debtors' foreign subsidiaries are
party to numerous agreements and they intend to continue to
honor their obligations under all these agreements. According to
Mr. Panagakis, the DIP financing facility provides a
$100,000,000 line of credit to fund the operations of the
foreign subsidiaries, and these funds will be used to pay the
obligations under the agreements. But if the automatic stay is
not extended to cover the foreign subsidiaries, Mr. Panagakis
says, the obligations under these agreements may accelerate
solely as the result of the Debtors' Chapter 11 cases.

Mr. Panagakis discloses that an agreement has been reached
between the Debtors and their Pre-Petition Lenders: Citibank,
N.A., Bank of America, N.A., Bank One, N.A., The Royal Bank of
Scotland, PLC, and National Westminster Bank PLC, Deutche Bank
AG, and Credit Lyonnais. These lenders agree to limit actions to
be taken against foreign subsidiaries with respect to Pre-
petition Credit Agreements. Under this agreement:

      (a) None of the agents or any member of the committee, on
behalf of itself or the pre-petition lenders, will take any
action to enforce against any of the foreign subsidiaries
obligations under the Pre-petition Credit Agreements without
five business days written notice to the Debtors' counsel of
record or any statutory committee appointed in these Chapter 11

      (b) Notwithstanding any motion or any order in connection
herewith shall in any way prejudice the rights of any of the
Agents or the Pre-Petition Lenders hereafter to contest the
relief requested herein. (Comdisco Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

COVAD: Intends To File For Chapter 11 To Restructure $1.4B Debt
Covad Communications Group, Inc. (OTCBB:COVD), the leading
national broadband services provider utilizing DSL (Digital
Subscriber Line) technology, announced it is in negotiations
with its bondholders to eliminate the company's approximately
$1.4 billion of existing debt. Bondholders representing a
majority of the outstanding accreted value of the bonds have
agreed to terms of a proposed debt restructuring, and have
signed lock-ups or given their verbal agreement pending review
and approval of the documentation by their counsel.

Under the terms of the proposed restructuring, the bondholders
would exchange their bonds for a combination of cash and
preferred stock. The cash portion consists of $0.19 on the
dollar for the face amount of the accreted value of both high-
yield and convertible bonds. In addition, the company expects to
return all of the approximately $26.5 million in restricted cash
reserved to the holders of Covad's 12.5 percent bonds.

The preferred equity would have a $100 million liquidation
preference and would be convertible into approximately 33
million common shares. This represents approximately 15 percent
of the company's fully diluted currently outstanding common
stock after giving pro forma effect to the conversion. Upon
securing additional funding, and subject to certain terms and
conditions, the company will have the right to convert the
preferred stock. The preferred stock would also be convertible
at any time at the preferred holders' option into the same
amount of common.

When the transaction closes, Covad expects to pay a total of
$283.3 million to the bondholders. After the pay out, on a pro-
forma basis as of June 30, 2001, Covad will have approximately
$250 million in cash, which is expected to fund the company's
operations into the beginning of 2002.

"Covad will be in a much stronger financial position going
forward, with no debt and a much smaller cash requirement, if
this transaction is successful," said Charles E. Hoffman,
Covad's president and CEO. "With the growth in our revenue and
continued reduction of costs -- all which put us on a faster
track to profitability -- we expect to be in a much better
position to raise the additional funding we need."

"We believe this transaction to be in the best interests of our
bondholders and shareholders," said Chuck McMinn, chairman of
Covad. "If successful, it will free Covad from approximately
$1.4 billion in debt which we believe will make it easier to
raise additional capital to continue our operations. We now
believe that once this transaction with Covad bondholders is
completed, we will need approximately $200 million more in cash
to get us to a positive cash flow position, which we expect will
be by the third quarter of 2003."

"This is a winning scenario for all parties," stated Hoffman.
"At its conclusion, bondholders and shareholders both will have
an opportunity to share in Covad's continued success."

Covad expects that the transaction would be implemented through
a voluntary pre-negotiated Chapter 11 filing by its parent
company, Covad Communications Group, Inc. Covad Communications
Group, Inc.'s operating companies, which provide DSL services to
customers, are not expected to be included in the court-
supervised proceeding and will continue to operate in the
ordinary course of business without any court imposed
restrictions. Covad believes that the filing, which is customary
with such debt restructurings, would facilitate in the
expeditious elimination of the company's approximately
$1.4 billion debt.

"Speakeasy applauds this action by Covad and as a long term
customer we offer our continued support and congratulations,"
said Mike Apgar, CEO of Speakeasy.net. "Covad has taken the
critical first step to secure their place as the nation's most
reliable and respected DSL provider. This is a victory for
customer choice in high-quality broadband services."

Covad Communications Group, Inc.'s operating companies should
continue unaffected during the court-supervised proceedings and
upon emergence from the restructuring. Covad expects to continue
to deliver services, manage the network and conduct day-to-day
business outside of the court-supervised proceeding. Covad
believes that it will be able to continue with its current
operations and business plan while supporting its employees,
over 330,000 end users, sales support, Covad's national network,
the installation process and vendors including network and
equipment suppliers.

"This is very positive for Covad and we are pleased to hear that
the financial issues are in the process of being resolved so as
to move the company toward long-term success," said Harry M.
Taxin, president and CEO of MegaPath Networks. "The industry
needs a strong, independent data CLEC provider, and this news
will help the DSL industry continue its rapid growth by ensuring
that the supply chain is viable and stable."

Covad Communications Group, Inc. plans to file a pre-negotiated
plan of reorganization and voluntary petition to reorganize
under Chapter 11 of the U.S. Bankruptcy Code by mid-August 2001.
The Covad Communication Group, Inc. plan of reorganization,
which would establish the company's capital structure upon
emergence from the reorganization, will be subject to court
approval after it has been voted on by the bondholders and
certain other interests affected by the plan. Upon approval of
the plan, Covad Communications Group, Inc. would emerge with the
retirement of all of the bond debt. Covad Communications Group,
Inc. expects this process to be complete by January 2002.

"Covad is the nation's most experienced, established company
providing DSL and we will continue to provide the best quality
broadband services to small businesses and residential
customers," said Hoffman. "Demand for DSL is strong and we are
the only provider with a national network that can scale to meet
this demand. We believe that we will continue to meet our
customers' expectations of service, support and reliable
operation of our national network.

"Covad employees can rest assured that this action will be taken
as part of Covad's plan to revitalize the company which will
further secure the company's future," added Hoffman. "Management
realizes that a major part of Covad's success is dependent on
the strength and talents of our employees."

                 About Covad Communications

Covad is the leading national broadband service provider of
high-speed Internet and network access utilizing Digital
Subscriber Line (DSL) technology. It offers DSL, IP and dial-up
services through Internet Service Providers, telecommunications
carriers, enterprises, affinity groups, PC OEMs and ASPs to
small and medium-sized businesses and home users. Covad services
are currently available across the United States in 94 of the
top Metropolitan Statistical Areas (MSAs). Covad's network
currently covers more than 40 million homes and business and
reaches approximately 40 to 45 percent of all US homes and
businesses. Corporate headquarters is located at 4250 Burton
Drive, Santa Clara, CA 95054. Telephone: 1-800/GO-COVAD. Web

EMPRESA ELECTRICA: S&P Downgrades Ratings To CC From CCC
Standard & Poor's lowered its senior unsecured debt and
corporate credit ratings on Empresa Electrica del Norte Grande
S.A. (Edelnor) to double-'C' from triple-'C'. The ratings remain
on CreditWatch with negative implications.

Edelnor generates and transmits electricity in the northern
interconnected system (SING), Chile's second largest electrical
grid. Mirant Corp. (triple-'B'-minus/Stable/'A-3'), owns 82% of
Edelnor. The downgrade follows Mirant's announcement that it
does not intend to make additional cash infusions into Edelnor
unless it can be reassured that it will be repaid in the near
term. Since Mirant also stated that it is difficult at the
present time to envision how it would receive such assurances of
repayment in the absence of an advanced sales agreement for
Edelnor, Standard & Poor's concludes that Mirant will withdraw a
sizeable amount of support for Edelnor. Mirant's action
significantly increases uncertainty over Edelnor's ability to
make its upcoming debt service payment in September 2001.

The rating reflects:

      * Worse-than-anticipated operating performance in 2000,
        resulting in coverage ratios below expectations;

      * The anticipated loss of significant contract revenue from
        the Emel subsidiary, which expires at the end of 2001;

      * Uncertainty about Edelnor's ability to keep and attain
        new sales contracts or sell into the spot market; and

      * The entry of gas and gas-fired plants, which has created
        overcapacity in the SING grid.

Edelnor has only been able to meet its financial obligations
since the end of the first quarter of 2001 with the aid of a
US$6 million fund set aside for Edelnor, and made available by
its Chilean parent, Mirant Chile S.A. The purpose of this fund
was to help Edelnor work through minor cash flow difficulties
due to timing. Mirant is not expected to continue to provide
this support, though Mirant has instructed Edelnor that it will
defer repayment of more than US$2 million owed to Mirant for
services previously provided in order to assist with Edelnor's
liquidity situation.

Nevertheless, without revenues from the Emel contracts after
2001, which account for roughly one-half of contracted capacity;
expected narrowing margins on sales of coal-powered energy; and
barring any additional aid from its parent, it is extremely
unlikely Edelnor will meet its scheduled interest payments in
March 2002. This assumes Edelnor wins definitive approval from
the national environmental regulator (CORAMA) to use pet coke,
a more efficient fuel, in its coal plants, which might enable
the coal plants to be dispatched more often. Even if Edelnor
wins definitive approval, which may take place in the third
quarter of 2001, it will not have a material impact on Edelnor's
ability to meet its financial obligations in March 2002. Funds
gathered from Edelnor's sale of noncore assets are also not
expected to be sufficient to help meet its March 2002 debt
service payments.

A further hindrance to Edelnor's cash flow difficulties in 2001
is the elimination of a US$30 million cash influx Edelnor was to
receive from a debt issuance to have taken place in 2000 at its
gas pipeline subsidiary, NorAndino. This financing did not take
place. The elimination of this expected cash influx is pivotal
to Edelnor's current cash flow crunch, and makes Edelnor even
more vulnerable, especially in 2002 after the loss of the Emel

The loss of the Emel contracts coincides with the entry of lower
marginal cost, gas-fired facilities, which have doubled
installed capacity in the SING. Because most large customers
have already procured firm supply, there is little opportunity
for Edelnor to replace these customers in the SING.

FIELDS TECHNOLOGIES: Engages Tanner + Co As New Accountants
As a result of Fields Technologies Inc.'s recent reverse
acquisition of Park City Group, Inc., the Company's wholly owned
subsidiary, Fields has had two separate auditors. They have
changed their certified public accountants in order to have one
certified public accountant that is located in close proximity
to corporate and operational offices in Park City, Utah.

On July 27, 2001, the Company dismissed Daszkal Bolton Manela
Devlin & Co, the auditor when Fields was known as
AmeriNetGroup.com, Inc. (AmeriNet). Daszkal Bolton Manela Devlin
& Co's Independent Audit Report for AmeriNet's financial
statements for the fiscal year ended June 30, 2000 (prior to
AmeriNet's acquisition of Park City Group, Inc.) states that:

      (a) AmeriNet's financial statements (for the fiscal year
ended June 30, 2000) have been prepared assuming that they will
continue as a going concern;

      (b) AmeriNet experienced a loss from operations in fiscal
year 2000 and negative cash flows from operations for the year
ended June 30, 2000; and

      (c) these matters [as reflected in (a) and (b) above] raise
substantial doubt about AmeriNet's ability to continue as a
going concern. In correspondence dated October 24, 2000, Daszkal
Bolton Manela Devlin and Co. advised AmeriNet that internal
controls necessary to develop reliable financial statements did
not exist.

On July 27, 2001, Fields dismissed Sorensen Vance & Company,
P.C., which had previously served as the certified public
accountants for Park City Group, Inc. On July 27, 2001, Fields
engaged Tanner + Co as the Company's new certified public

FREEREALTIME.COM: Shares Now Quoted On the Pink Sheets
As previously reported, on April 24, 2001, FreeRealTime.com,
Inc. (OTC Bulletin Board: FRTIE) filed a voluntary bankruptcy
petition under Chapter 11 of the United States Bankruptcy Code
in the United States Bankruptcy Court for the Central District
of California. Since the April 24, 2001 petition date,
FreeRealTime has operated as a debtor in possession and is in
compliance with all Chapter 11 reporting requirements.

As a result of the Chapter 11 filing, FreeRealTime notified the
Securities and Exchange Commission that it would not file its
annual report containing audited financial statements and would
instead follow modified reporting procedures pursuant to Staff
Legal Bulletin No. 2 (1997) in lieu of filing the periodic
reports required under the Securities Exchange Act of 1934, as

FreeRealTime's common stock will no longer be quoted on the
over-the-counter bulletin board after August 7, 2001.
FreeRealTime says its common stock will begin quotation on the
"Pink Sheets" published by the National Quotation Bureau
Incorporated soon after August 7, 2001.

                   About FreeRealTime.com

FreeRealTime.com is a leading financial media company,
empowering independent investors with "real-time actionable
insight," including market data, research, and analytic tools in
order to make knowledgeable investing decisions.
FreeRealTime.com's various investment services deliver an
extensive array of stock market data, proprietary research and
commentary, financial news, community features, and
sophisticated investment management tools for institutional
investors, brokers and independent investors. Over 1.5 million
investors have registered for FreeRealTime.com's online
investment services, and we estimate that by publishing and
distributing investment information we reach our investor
audience several million times every month and that, in a
typical month, they view in excess of 100 million pages of
investment information on our various services.

FreeRealTime.com is headquartered in Aliso Viejo, California.
Visit the Company's Web site at www.freerealtime.com.

GENERAL TIME: Salton Acquires Timekeeping Brands For $9.8MM
Salton, Inc. (NYSE:SFP) announced the acquisition of the
Westclox(R), Big Ben(R) and Spartus(R) brands from the bankrupt
General Time Corporation, until recently the largest producer
and marketer of alarm, wall and occasional clocks in North

Under the terms of the acquisition, Salton has agreed to
purchase all of the trademarks, molds, intellectual property,
rights and patents related to these select brands. In addition,
Salton agreed to purchase inventory related to these brands held
in the U.S., Europe and Canada. Additional financial terms of
the deal were not disclosed.

Leonhard Dreimann, Chief Executive Officer of Salton, stated,
"Leading surveys rank Big Ben and Westclox, second only to the
Timex(R) brand of time products in terms of name recognition and
customer satisfaction. Following the close of this transaction,
Salton's Home Decor Division, Salton at Home, will control three
of the World's leading timepiece brands that will solidify our
growing position as a leading marketer of time products in the
U.S. and Europe. Looking ahead, we are excited to market this
expanding line of time products in North America, as well as in
Europe through our newly acquired European distribution

                  About Salton, Inc.

Salton, Inc. is a leading domestic designer, marketer and
distributor of a broad range of branded, high quality small
appliances under well-recognized brand names such as Salton(R),
George Foreman(TM), Toastmaster(R), Breadman(R), Juiceman(R),
Juicelady(R), White-Westinghouse(R), Farberware(R), Melitta(R),
Welbilt(R) and Aircore(R). Salton also designs and markets
tabletop products, time products, lighting products and personal
care and wellness products under brand names such as Block
China(R), Atlantis(R) Crystal, Sasaki(R), Calvin Klein(R),
Ingraham(R), Timex(R), Westclox(R), Big Ben(R), Spartus(R),
Stiffel(R), Ultrasonex(TM), Relaxor(R), Russell Hobbs(R),
Carmen(R), Hi-Tech(R), Tower(R), Haden(R), Mountain Breeze(R),
Salton(R), and Pifco(R).

HALO INDUSTRIES: Second Quarter Net Loss Amounts To $312.6 Mil
HALO Industries, Inc. (OTC Bulletin Board: HMLOQ), a promotional
products industry leader, announced results for the second
quarter and six months ended June 30, 2001. The results include
the effect of the Company's previously announced restructuring
charge.  Major components of the charge include the write off of
goodwill resulting from the acquisition of Starbelly.com,
employee severance, lease costs, expenses incurred to exit
unprofitable lines and other special charges.

                    Second quarter results

Sales from continuing operations for the second quarter of 2001
decreased 20.4 percent to $119.3 million from $150.0 million in
the same period of 2000. The net loss from continuing operations
for the second quarter of 2001 (including restructuring and
other special charges of $287.5 million) was $312.6 million,
compared to a net loss from continuing operations of $15.1
million for the same period last year.  On a recurring basis,
the net loss from continuing operations for the second quarter
of 2001 was $25.1 million.  The Company reported EBITDA from
continuing operations for the second quarter of 2001 of ($8.1
million) compared to EBITDA from continuing operations of ($3.1
million) for the same period last year.  The net loss applicable
to common shareholders for the second quarter of 2001 was $305.2
million, or ($4.37) per diluted share, compared to a net loss
applicable to common shareholders of $11.7 million, or ($.20)
for the same period last year.  In addition to the restructuring
and other special charges mentioned above, the Company's net
loss applicable to common shareholders for the second quarter of
2001 includes gains of $26.5 million realized from the sale of
two subsidiaries and $9.9 million realized on the sale of an
interest in a joint venture.

                    Six months results

Sales from continuing operations for the first six months of
2001 decreased 18.4 percent to $232.7 million from $285.2
million in the same period of 2000.   The net loss from
continuing operations for the first six months of 2001
(including restructuring and other special charges of $287.5
million) was $347.5 million, compared to a net loss from
continuing operations of $24.4 million for the same period last
year.  On a recurring basis, the net loss from continuing
operations for the first six months of 2001 was $60.1 million.
The Company reported EBITDA from continuing operations for the
first six months of 2001 of ($25.7 million) compared to EBITDA
from continuing operations of ($9.1 million) for the same period
last year.  The net loss applicable to common shareholders for
the first six months of 2001 was $332.7 million, or ($4.76) per
diluted share, compared to a net loss applicable to common
shareholders of $16.3 million, or ($.30) for the same period
last year.  In addition to the restructuring and other special
charges mentioned above, the Company's net loss applicable to
common shareholders for the first six months of 2001 includes
gains of $26.5 million realized from the sale of two
subsidiaries and $9.9 million realized on the sale of an
interest in a joint venture.

                    Recent Developments

The Company announced last week that it had filed for
reorganization under Chapter 11 of the United States Bankruptcy
Code.  Factors behind the Company's decision included several
non-operating issues such as the lease on its headquarters
building and the acquisition of Starbelly.com.  The filing
encompassed the Company's U.S. based promotional products
business units, including its Lee Wayne subsidiary.  The Company
subsequently announced that all of the first day motions filed
with the bankruptcy court, including the approval of a $30
million debtor-in-possession financing facility from its
existing lenders had been approved.

                     CEO Commentary

"The acceptance of our first day motions allows us to conduct
business as usual.  We appreciate the strong showing of support
we have received from our vendors, clients and employees.  We
are committed to the long-term future of our promotional
products business and intend to use our competitive advantages
to restore our business to profitability," said Marc Simon,
HALO's president and chief executive officer.

                      About HALO

HALO Industries is the world's largest distributor of
promotional products.

HERBST GAMING: S&P Assigns B Rating To Proposed Senior Notes
Standard & Poor's assigned its single-'B' rating to Herbst
Gaming Inc.'s proposed $155 million senior secured notes due
2008. These securities are expected to be privately placed under
Rule 144A. Proceeds of the notes will be used to refinance
existing debt incurred in the acquisition of Jackpot Enterprises
Inc.'s (unrated entity) route operations and the construction of
Terrible's Hotel and Casino in Las Vegas. At the same time,
Standard & Poor's assigned its single-'B' corporate credit
rating to the company.

The outlook is positive.

Herbst Gaming, headquartered in Las Vegas, Nev., upon
consummation of the proposed offering will be the holding
company parent of the existing operations. The company's
subsidiaries include the second-largest slot machine route
operator in Nevada. In addition, the company's subsidiaries own
and operate four casino facilities throughout Nevada: two in
Pahrump, one in Henderson, and one recently opened facility in
Las Vegas. Pro forma sales approximate $230 million and pro
forma EBITDA is approximately $35 million.

Ratings reflect Herbst Gaming's small cash flow base,
competitive market conditions, and high debt levels. These
factors are tempered by Herbst's recent improved operating
results, stable cash flow base from its route operations, and
good near-term prospects for further operating improvement.

The company's route-operations segment was significantly
expanded with the late 2000 acquisition of Jackpot's route
business. It benefits from a substantial recurring revenue and
cash flow stream, as long-term contracts account for a majority
of revenues and EBITDA and renewal rates have historically been
extremely high. This segment, which accounts for more than 70%
of revenues and EBITDA, is expected to drive consolidated growth
in the near term as the company continues to improve the
profitability of the acquired machine base, acquires additional
street route contracts, and adds machines concurrently with new-
location chain-store openings.

Standard & Poor's expects that Herbst's casino facilities will
continue to be relatively stable cash flow producing assets in
the future as no new significant competition is expected. The
company's largest facility in Las Vegas, which opened in late
2000, has thus far benefited from its good location and niche
customer base. In addition, by being the largest locals casino
east of the Strip and with the next major locals facility more
than five miles away on the Boulder Highway, operating results
are expected to remain steady and gradually improve.

Pro forma for the offering and based on current operating
trends, EBITDA coverage of interest expense is expected to be in
the high 1 times (x) area, and total debt to EBITDA in the 4.5x
area. Financial flexibility is adequate, with more than $30
million in cash on hand and moderate maintenance capital
expenditures. In addition, the company is expected to have a
bond indenture carve-out for a $10 million revolver.

                   Outlook: Positive

The outlook reflects Herbst's solid position in the Nevada
route-operations industry, the relative stability of this cash
flow, and the good prospects for near-term growth. Ratings could
be raised over the intermediate term if Herbst is successful in
managing its recent rapid growth and improves its overall
financial profile by growing its cash flow base and/or reducing
debt levels.

ICG COMMUNICATIONS: Seeks Approval Of New SNET Agreement
ICG Communications, Inc. and certain of its subsidiaries ask
Judge Peter Walsh to authorize the Debtors' entry into a new
agreement and to settle certain claims of SNET Diversified
Group. ICG Telecom Group, Inc., and SNET previously entered into
a Message Signaling Agreement in November 1998 under which the
parties interconnected their respective networks and used these
interconnections to provide message signaling services to their
respective customers. The initial agreement had a term of one
year, but automatically renewed for successive one-year terms
unless terminated by either party 90 days before the end of the
term. As of the Petition Date, neither SNET nor Telecom had
given notice of termination, and therefore the Initial Agreement
automatically renewed through November 15, 2001. Either party
could, however, terminate the agreement at the end of such term.
SNET has previously brought a Motion seeing an order compelling
the Debtor to accept or reject this agreement, which was denied
by this Court.

The message signaling services provided to Telecom under the
Initial Agreement are critical to Telecom's ongoing operations.
Accordingly, if SNET elected to terminate the initial agreement
on November 15, 2001, the Debtors would be required to migrate
such services to alternate providers. Such migration would
involve significant capital expenditures, and potential
interruption of services to the Debtors' customers.

Based on these factors, the Debtors tell Judge Walsh they have
decided that it is in the best interest of these estates to
negotiate a new agreement with SNET, which provides not only a
longer term, but more favorable economic terms than the initial
agreement. Accordingly, the Debtors request authority to enter
into a new message signaling services agreement with SNET which
supersedes the Initial Agreement. Specifically the SNET
Agreement now contains a term of two years, renewable
automatically for successive one-year terms unless terminated by
either party 180 days prior to the end of the term. Moreover,
the SNET Agreement reduces the prices for certain message
signaling services by approximately twenty percent.

In addition, the Debtors ask for authority to pay SNET 50% of
its prepetition claims (approximately $435,000) in full
settlement of any prepetition claims in connection with the
Initial Agreement. The SNET Agreement and claim settlement
permit Telecom the opportunity to continue, on a cooperative
consensual basis, its relationship with one of its most
significant vendors. According, the Debtors submit that the
consensual agreement embodied in the SNET Agreement is in the
best interests of these estates, and that they should be
authorized to enter into and execute the SNET Agreement and
claims settlement. (ICG Communications Bankruptcy News, Issue
No. 8; Bankruptcy Creditors' Service, Inc., 609/392-0900)

IMPOWER INC.: List of 17 Largest Unsecured Creditors

Entity                                   Claim Amount
------                                   ------------
Dow Jones & Co.                              $514,227
Wall Street Journal or Barrons
PO Box 4137
New York, NY 10261

King Construction Co.                        $460,632
506 Carnegie Center
Princton, NJ 08540

American List Counsel, Inc.                  $426,686
4300 Hwy 1
CN 5367
Princeton, NJ 08543

Arenson Office Furnishings                   $297,801
90 Woodbridge Center Drivr
Woodbridge, NJ 07095

Commercial Floors Beautiful                  $223,648

Everyone.net                                 $223,243

Matchlogic                                   $184,421

Acxiom Corporation                           $180,429

Heller Financial Leasing, Inc.               $173,977

Horizon Blue Cross Blue Sheild               $147,885

Americomp Inforsystems, Inc.                 $145,842

Double Click                                 $131,516

Net Creations, Inc.                          $125,773

Marketing Direct Assoc.                      $124,168

Direct Media                                 $121,692

Responsys Inc.                               $121,692

CDI Corporation                              $114,738

JENNY CRAIG: NYSE To Delist Shares On August 16
Jenny Craig, Inc. (NYSE: JC) announced that the Company's common
stock will be suspended from trading on the NYSE prior to the
opening of trading on August 16, 2001. Jenny Craig has applied
for listing on the American Stock Exchange. If the Company's
shares are not listed on the AMEX, the Company expects that its
shares will trade on the Over the Counter (OTC) Bulletin

The NYSE informed the Company that the delisting is the result
of Jenny Craig currently not meeting the NYSE continued listing
requirements of a minimum total stockholders' equity of $50
million and a minimum market capitalization of $50 million. The
Company's stockholders' equity is approximately $42 million and
its market capitalization (outstanding shares times market price
per share) at the close of trading was approximately $38

As previously announced, the Company continues to explore
strategic alternatives through its financial advisor, Koffler &
Company based in Los Angeles, California.

                      About Jenny Craig

Founded in 1983, Jenny Craig, Inc. is one of the largest weight
management service companies in the world. The Company offers a
comprehensive weight management program that helps clients learn
how to eat the foods they want, increase their energy level
through simple activity, and builds more balance in their lives
for optimal weight loss and well-being. The program includes
personal, one-on-one consultations at Jenny Craig centres, with
menu plans that are nutritionally balanced according to the
recommendations of the USDA Food Guide Pyramid and the U.S.
Dietary Guidelines. Jenny Craig centres are located in the
United States, Canada, Australia, New Zealand, and Puerto
Rico. At July 31, 2001, the Company owned 544 centres with an
additional 111 centres owned by franchisees, bringing the total
number of centres in operation to 655.

KITTY HAWK: Modifying Chapter 11 Plan
On July 31, 2001, Kitty Hawk Inc. and its subsidiaries announced
in a proceeding in the United States Bankruptcy Court for the
Northern District of Texas, Fort Worth Division, that they have
suspended efforts to confirm their Debtors' Amended Joint Plan
of Reorganization dated May 30, 2001 and that they are in
discussions with their creditors on modifications to their plan
of reorganization.

MARINER: NovaCare Holdings Objects To Disclosure Statement
NovaCare Holdings, Inc., the creditor that objected to the
proposed authorization for HCFA to offset against monies owed to
other facilities without further order of the Bankruptcy Court
in the motions for the transfer of NHP Facilities and the
Hayward Facility, voiced its objection to the Disclosure
Statement with respect to the related Plan's provision of:

      (1) the "deemed consolidation" of the Mariner Post-Acute
          Network, Inc. Debtors for certain purposes under the
          Plan, and

      (2) the resolution of a class of "United States Claims" by
          a settlement agreement.

Prior to the petition date, NovaCare rendered patient therapy
services to patients at two of the Debtors' facilities.
NovaCare's charges for these services were only partially paid
by the Debtors based upon an allegedly improper reimbursement
rate imposed by Medicare. Instead of having the Debtors pay over
the difference between the amount reimbursed by Medicare and the
amount due to NovaCare, NovaCare issued "prudent buyer credits"
to these Debtors. In exchange, the Debtors effectively
transferred their rights to any monies received from HCFA based
upon a subsequent appeal of Medicare's failure to reimburse at
the full rate charged by NovaCare. The Debtors agreed in essence
to receive any such funds for the benefit of, and to be turned
over to NovaCare. The amount of "prudent buyer credits" issued
by NovaCare was $726,207.00.

NovaCare observes that the proposed resolution of United States
Claims by a settlement agreement seems to contemplate the
consolidation of the Debtors for the purpose of allowing the
United States the ability to offset amounts owed to one Debtor
against amounts owed from another.

NovaCare objects to approval of the Disclosure Statement on the
ground that the Disclosure Statement fails to provide adequate
information on:

      (1) what the treatment of interests or claims such as those
held by NovaCare would be in the absence of such deemed
consolidation, and what effect this deemed consolidation will
have on the treatment of such interests or claims;

      (2) the terms and conditions that would be contained in a
settlement agreement with holders of United States Claims, or
what effect such a settlement agreement would have on entities
such as NovaCare.

Simply put, NovaCare cannot tell from the Disclosure Statement
"what it is going to get, when it is going to get it, what
conditions exist to it getting anything, and how those are
different from a reorganization that did not consolidate the

NovaCare asserts that the Disclosure Statement should disclose,
among other things, (a) what the distribution would be to
creditors of each Debtor entity in the absence of deemed
consolidation, (b) what effect deemed consolidation will have on
the distribution, and (c) which Debtor entity will be
responsible for making these distributions following deemed

NovaCare is concerned that if the Facility Transfer Procedures
set forth in Exhibit D to the Disclosure Statement are any guide
to what might expected in a settlement with the United States,
and particularly HCFA, the Debtors are preparing to make
sweeping concessions without court oversight, and this is flatly
unacceptable for creditors such as NovaCare who have claims to
funds owed by HCFA to (nominally) the Debtors.

NovaCare tells the Court that because the Disclosure Statement
fails to describe and limit the possible terms in the
contemplated Settlement Agreement, and the effect of those terms
on the Debtors' creditors or parties in interest like NovaCare,
the Disclosure Statement does not contain adequate information
regarding the treatment of the United States Claims, and
approval of the Disclosure Statement in its current form should
therefore be denied. (Mariner Bankruptcy News, Issue No. 17;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

MEDPOINTE: S&P Rates $225MM Senior Secured Bank Loan At B+
Standard & Poor's assigned its single-'B'-plus corporate credit
rating to MedPointe Inc., as well as to its operating
subsidiary, MedPointe Inc. Operating Co. At the same time,
Standard & Poor's assigned a single-'B'-plus to MedPointe Inc.
Operating Co.'s $225 million senior secured bank loan facility.
Proceeds from the loan will be used to finance the planned $408
million acquisition of the healthcare business and corporate
infrastructure of Carter-Wallace Inc. The outlook is stable.

MedPointe Inc. Operating Co.'s $225 million bank facility is
rated the same as the corporate credit rating. The $225 million
facility is comprised of a $35 million revolving credit line due
2007, a $40 million term loan A due 2007, and a $150 million
term loan B due 2008. The facility is guaranteed by parent,
MedPointe Inc., and all of its present and future subsidiaries,
and is secured by a perfected first priority security interest
in all the capital stock of MedPointe Inc. Operating Co. and its
direct and indirect subsidiaries, 65% of the capital stock of
present and future foreign subsidiaries, and all assets of
MedPointe Inc. Operating Co.and its guarantors. While the
facility derives strength from its secured position, based on
Standard & Poor's simulated default scenario, it is unclear that
a distressed enterprise value would be sufficient to cover the
entire loan facility.

The speculative grade ratings on MedPointe Inc. Operating Co.
reflect the company's somewhat diverse pharmaceutical portfolio
and adequate financial flexibility, offset by its niche business
profile and the challenges it faces in streamlining of its
corporate operations.

Short Hills, N.J.-based MedPointe Inc. Operating Co. will have
two operating divisions -- Wallace Laboratories, a specialty
pharmaceutical operation, and Wampole Laboratories, which
markets in-vitro diagnostic products. The pharmaceutical
business will account for nearly 80% of the company's annual
revenue base, and a slightly larger portion of earnings. Three
products: the antihistamine, Astelin; the prescription cough-
cold medicine brand family, Ryna/Tussi; and muscle relaxant,
Soma, lead the pharmaceutical portfolio, with each drug
comprising 25-30% of pharmaceutical sales. Astelin provides the
company with its best growth opportunity, as the drug is
currently the only antihistamine that is approved for both
allergic and nonallergic rhinitis. Astelin competes in a
category that is dominated by much larger players, such as
Schering-Plough's Claritin; the growing allergy market remains
one of the largest therapeutic categories. An experienced sales
force of 182 representatives, which the company plans to
increase significantly over the next two years, supports the
pharmaceutical business.

Financially, the company is conservatively structured for a
single-'B'-plus, with debt to capital ratio of under 50%. The
revolving credit facility, which is expected to remain undrawn
at the close of the transaction, along with the cash on hand of
$40 million, offers a measure of additional financial
flexibility. This will mitigate several near-term challenges,
such as relocating manufacturing facilities and corporate
offices, and successfully managing the life cycle of off-patent
Soma, whose prescriptions continue to decline. Also, given the
MedPointe Inc. Operating Co.'s limited size, it is vulnerable to
operating uncertainties.

                      Outlook: Stable

It may take several years for company management to demonstrate
its success in increasing the revenues of its pharmaceuticals
and efficiently realigning its corporate infrastructure.

NEXTWAVE TELECOM: Files Reorganization Plan In S.D. New York
NextWave Telecom Inc. has filed a plan of reorganization that
will provide full funding to expand its advanced 3G network,
which already is under construction. The NextWave network, as
funded under the plan, would be one of the most technologically
advanced telecom networks in the world. The advanced, packet-
switched network will offer untethered "always-on" high-speed
wireless Internet access and high quality voice services to a
broad range of customers, including Mobile Virtual Network
Operators ("MVNOs").

NextWave's reorganization plan, which was filed late Monday with
the U.S. Bankruptcy Court for the Southern District of New York,
provides for total financing of approximately $5 billion.  New
equity financing is being led by NextWave's existing investors,
and a significant portion of the equity available under the plan
has already been subscribed.  The Company is reviewing debt-
financing proposals submitted by a variety of financial
institutions, and expects to finalize a debt agreement on the
order of $2.5 billion within the next few weeks.

The plan provides for payment of all valid claims against the
company, including the claim of the Federal Communications
Commission for licenses it granted to NextWave in 1997, plus
interest as applicable.  Under the plan, non-government claims
currently due in full will be paid in full. NextWave's debt for
its C-block and F-block PCS licenses will be reinstated, with
the government receiving all amounts due up to this point, in
full, with the remaining balance to be paid in installments.

"This reorganization plan demonstrates NextWave Telecom's
commitment to build and operate one of the largest and most
advanced, third generation voice and data wireless
telecommunications networks in the world," said Allen Salmasi,
NextWave's chairman and chief executive officer.

The reorganization plan provides financing to expand the
capacity of 3G wireless facilities NextWave already is
constructing in 95 markets, pursuant to a June 2001 agreement
with Lucent Technologies.  That agreement provides for
deployment of voice and data service in Detroit and Madison,
Wisconsin, and data service in the Company's other 93 markets,
utilizing CDMA2000 1xRTT technology.  Such deployment, which
already is underway, is scheduled for completion over the next
ten months, with market launches targeted for later this year in
major markets including New York, Los Angeles, and Washington,
D.C.  The billions of dollars of additional capital provided for
under the new plan of reorganization will enable the company to
expand the capacity and capabilities of the network currently
under construction, allowing wireless DSL-type services to be
provided in all major markets next year at an average data rate
well above 700 kbps, utilizing CDMA2000 1xEV-DO technology.

"NextWave's investors are excited to see the filing of this plan
because we recognize the great business potential of its
network," said Douglas Teitlebaum, managing principal of Bay
Harbour Management, a leading investor in NextWave.  "The
company will offer a truly differentiated and extremely sought
after product, and is positioned for phenomenal growth in the
coming years."

A unanimous June 22, 2001 decision by the U.S. Court of Appeals
for the District of Columbia Circuit reversed an FCC order
purporting to cancel and reclaim the company's spectrum
licenses, and will restore the licenses to the company by
operation of law once it becomes effective.

"This is the third time since July of 1999 that we have filed a
plan of reorganization providing for full payment to our
creditors and the financial resources necessary to build-out our
licenses," said Frank Cassou, NextWave's Executive V.P. and
General Counsel.  "We hope the FCC will see the opportunity
for new competitive services represented by our plan, and cease
further litigation that could delay the business and consumer
benefits the plan will provide if allowed to take effect on
schedule.  Now that the Court of Appeals has decided the legal
issues in a manner that supports our right to build-out the
licenses, we would like to work with the Commission to proceed
with building out so NextWave can begin delivering to customers
the full benefits of a world class 3G digital network."

NextWave's network capabilities and speeds will allow users to
engage in advanced mobile Internet activities such as streaming
video and audio, multimedia file downloads (e.g., MP3 music
files and digital photos), software application with computer
files and OS downloads, E-mail, mobile E-commerce, Virtual
Private Network ("VPN") access to corporate Intranets and video-
conferencing. NextWave's MVNO customers who would bring these
benefits to the market will include some of the largest global
media and entertainment Companies, regional/national wireless
and wireline Network Operators, international telecommunications
carriers, Internet Service Providers ("ISPs"), financial service
providers, national/regional retailers.

"This plan enables NextWave to enter the marketplace with a very
real and very large competitive advantage because it provides
for building out a new network using only the latest
technology," said Mr. Salmasi.  "Even competitors who plan to
add 3G capabilities to their networks will do so merely by
overlaying 3G facilities on the backbones of their outdated 1G
or 2G systems."

                       About NextWave

NextWave Telecom, Inc., headquartered in Hawthorne, N.Y., was
organized in 1995 to provide high-speed wireless Internet access
and voice communications services to consumer and business
markets on a nationwide basis.  NextWave holds a total of 95 PCS
licenses whose geographic scope covers more than 168 million
POPs coast to coast, including all top 10 U.S. markets, 28 of
the top 30 markets, and 40 of the top 50 markets.  NextWave's
"carriers' carrier" strategy allows existing carriers and new
service providers to market NextWave's network services through
innovative airtime arrangements.  For more information about
NextWave, visit the Web site at http://www.nextwavetel.com.

ORIUS CORPOEATION: S&P Removes Ratings From Credit Watch
Standard & Poor's affirmed its ratings on Orius Corp.  At the
same time, the ratings were removed from CreditWatch, where they
were placed on July 3, 2001.

The rating actions affect the company's $425 million bank credit
facility and its $150 million subordinated notes due 2010.

The outlook is now negative.

The rating action follows the company's announcement that it has
obtained an amendment to its credit agreement, which revised
several financial covenants to make them more compatible with
Orius' near-term business plan. Additionally, Orius announced
that Willis Stein and Partners III, L.P. committed to invest up
to $25 million in the company in the event that Orius
requires additional capital as specified in the amended bank
facility. As a result of these announcements, financial
flexibility in the very near term has been stabilized, albeit at
very modest levels. Nonetheless, Standard & Poor's remains
concerned that the company may need to obtain additional
amendments to its bank covenants in the near to intermediate
term should operating initiatives fall short of expectations, or
if end-market demand remains weak.

The ratings reflect Orius' limited financial flexibility and its
very aggressive financial profile, largely offsetting its
position as one of the leading providers of telecommunications
infrastructure services.

Pro forma total debt (excluding junior subordinated notes) to
EBITDA is estimated to be in the 5.5 times (x) area. Financial
risk is expected to remain elevated for the next several
quarters, as demand for new telecommunications construction
activities remains depressed, which may lead to both continued
pricing and volume declines. Furthermore, financial flexibility
is modest because the working capital sublimit under the firm's
revolving bank facility has been reduced to $49.2 million from
up to $75.0 million, at a time when Orius' debt amortization
will be increasing. In the near term, EBITDA to interest is
expected to be between 1.0x-1.5x.

West Palm Beach, Fla.-based Orius competes in the large and
highly fragmented telecommunications infrastructure service
industry. In the long term, the industry should benefit from
increasing demand for bandwidth and the trend of outsourcing
construction services. In addition, further benefits will
bederived from the need for telecommunication providers to
continually maintain and replace facilities as newer and more
cost-efficient technologies are developed. However, near-term
prospects are limited due to a weak economy, and many
customers', in the telecommunications and cable markets,
inability to access the capital markets, which has constrained
their capital spending plans. Relative to other rated
telecommunications infrastructure providers, Orius generates a
higher percentage of sales from project-specific agreements,
making the company more vulnerable to softening market

                    Outlook: Negative

Liquidity is expected to improve modestly in the next few
quarters as the firm achieves the benefits from a number of
operating and working-capital initiatives. However, failure to
improve financial flexibility could lead to a further ratings
lowering in the near term.

      Ratings Removed From CreditWatch, Outlook Negative

      Orius Corp.                           Rating
           Corporate credit rating            B-
           Senior secured debt rating         B-
           Subordinated note rating           CCC

PACIFIC GAS: Bakersfield QFs Want Decision On Power Contracts
Live Oak Limited, Badger Creek Limited, Chalk Cliff Limited,
McKittrick Limited, Double "C" Limited, Kern Front Limited and
High Sierra Limited -- known as the -- move the
Court for an order compelling Pacific Gas and Electric Company
to decide whether it should assume or reject the power purchase
agreements to which they are parties.

The Bakersfield QFs indicate to the Court that PG&E stopped
paying in December 2000. PG&E's failure to remit the prepetition
payments under the PPAs has forced the Bakersfield QFs to (i)
operate at an unsustainable loss level and (ii) to shut down for
seven weeks between March and May 2001.

"Risk of re-suspension of production is a very real possibility,
John O'Rourke, Vice President and Managing Director of a
consortium of LLCs that own the Bakersfield QFs, tells Judge
Montali. "Without some form of relief each Bakersfield QF will
be forced to default on critical payments to creditors, third-
party vendors, suppliers, service providers and others and risk
insolvency and closure."

Adam A. Lewis, Esq., at Morrison & Forester LLP in San
Francisco, and Lauren M. Nashelsky, Esq., Mark B. Joachim, Esq.,
and Stephen M. Tannenbaum, Esq., at Morrison & Forester LLP in
New York, represent the Bakersfield QFs in PG&E's chapter 11
proceedings. (Pacific Gas Bankruptcy News, Issue No. 11;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

PITNEY BOWES: S&P Assigns BB Corporate Credit Rating
Standard & Poor's assigned its double-'B' corporate credit
rating to Pitney Bowes Office Systems Inc. (PBOS). At the same
time, a double-'B'-plus rating was assigned to the company's
$250 million senior secured credit facilities.

The outlook is stable.

The ratings reflect the company's leading position in the mature
U.S. workgroup facsimile market and strong financial profile,
offset by a small but growing presence in the less-profitable
and highly competitive U.S. copier market.

With fiscal 2000 revenues of $643 million, Trumbull, Conn.-based
PBOS has a successful operating history as a division of Pitney
Bowes Inc. PBOS is expected to be spun off to Pitney Bowes
shareholders in the third quarter of 2001. PBOS' strategic goal
is to leverage its customer service capabilities and strong
national account presence in the fax market to build greater
copier-market share. However, the copier market is faced with
extremely competitive market conditions and current uncertainty
over the level of corporate capital spending, which have led to
lower industry profitability.

Although PBOS' profitability will be pressured as its business
mix shifts from higher-margin fax revenues to a greater copier
presence, Standard & Poor's expects the company to maintain
operating margins in excess of 20%. With a moderately leveraged
balance sheet, EBIT coverage of interest is expected to exceed 3
times (x). Financial flexibility is provided by good free cash
flow generation and availability under the company's revolving
credit facility.

The bank facilities are comprised of a five-year, $125 million
revolving credit facility and a six-year $125 million term loan,
secured by effectively all of the company's assets. Drawings
under the revolver will be limited by a borrowing base of 85% of
eligible accounts receivable and rental assets and 60% of
inventory. About $60 million of the revolver is expected to be
drawn at closing.

The bank loan rating, which is based on preliminary terms and
conditions, is double-'B'-plus, one notch above the corporate
credit rating. Standard & Poor's believes that the high quality
of receivables and borrowing base restrictions should provide
full coverage for lenders in a distressed scenario.

                      Outlook: Stable

The potential for rating improvement is limited by the
challenges of transitioning PBOS' business mix from highly
profitable fax to a less profitable copier base. Downside
protection is provided by a strong financial profile for the

PREMCOR REFINING: S&P Rates Proposed $500MM Bank Loan At BB
Standard & Poor's assigned its double-'B' rating to The Premcor
Refining Group Inc.'s (PRG--a wholly owned subsidiary of Premcor
Inc.) proposed $500 million senior secured working capital
credit facility, maturing in 2003.

The bank loan rating is elevated above the corporate credit
rating because Standard & Poor's believes that the collateral
package provides secured lenders with a reasonable prospect for
full recovery, in the event of a bankruptcy scenario.

The ratings on PRG (formerly Clark Refining & Marketing Inc.)
and parent company Premcor USA Inc. (formerly Clark USA Inc.)
remain on CreditWatch with developing implications, where they
were placed on May 5, 2001. The CreditWatch listing reflects
Premcor's announcement that it has retained investment bankers
Credit Suisse First Boston and The Blackstone Group L.P.
to serve as its financial advisers to maximize the value of the
company. As such, ratings may be raised, lowered, or affirmed,
pending the completion of the review.

The ratings on PRG and parent Premcor USA reflect the company's
position as a midsize independent petroleum refiner with an
aggressive financial profile. In addition, the company operates
in a very competitive, erratically profitable industry that is
burdened by excess capacity and high fixed-cost requirements for
refinery equipment and environmental regulation compliance.

Somewhat offsetting the financial risk of volatile refining
margins is the very high cash balances PRG maintains to provide
liquidity during troughs in the cycle.

St. Louis, Mo.-based Premcor Inc. (the parent of PRG and Premcor
USA) owns and operates three refineries of varying complexity,
with total processing capacity of 490,000 barrels per day. The
facilities are located in Illinois, Ohio, and Port Arthur,
Texas. The Port Arthur refinery (51% of total Premcor refining
capacity) has significantly completed an upgrade (final
completion testing is scheduled for the third quarter of 2001)
that enables it to process greater amounts of low-cost, heavy
sour crude oil, thereby significantly improving economics at
that unit. Another strength of Premcor is its ability to deliver
reformulated gasoline into Midwest markets, where intermediate
fundamentals are more favorable than for conventional fuels.

In January 2001, Premcor announced that the company would
permanently close its Blue Island, Ill. refinery. The low
profitability generated from this asset made the high capital
requirements associated with meeting stringent Tier II
regulations uneconomical.

Premcor has chosen to focus on merchant refining and, in 1999,
the company shed its retail holdings. Barring an outright sale
of the company, it is expected that Premcor will expand through
selective refinery acquisitions that geographically complement
its existing assets. However, given the company's limited
financial flexibility, modest cash flow generation, outstanding
debt maturities, and the high price of recently sold refineries,
Standard & Poor's believes that Premcor's ability to complete
such a purchase seems doubtful without accessing external

Industry wide and company-specific refining margins are
volatile, which has caused Premcor's cash flow to be equally
volatile. Although refining margins in the first half of 2001
were strong, rising inventories have caused margins to fall
precipitously. However, margins at PRG's Port Arthur refinery
have been less affected by rising inventories because of its
ability to process heavy sour crude oil, which has remained
priced at substantial discounts to higher quality crude oils.
For the long term, Premcor faces the specter of a capital-
intensive industry prone to periods of excess capacity, which
could limit permanent margin improvement.

A key element of PRG's financial policy is to maintain large
cash balances of $150 million to $200 million. The resulting
liquidity gives PRG the ability to operate through periods of
scarce profits, when access to banks and capital markets may be
limited. PRG's consolidated balance sheet reflects high debt
leverage, with total debt to total capital of about 75%.
Although near-term market improvement may allow PRG to build a
strong liquidity cushion for modest debt reduction, Standard &
Poor's believes there are concerns in the medium term, with
increasing capital spending requirements necessary to meet the
new sulfur regulation and significant debt maturities due in


      Premcor Refining Group Inc.
        $500 million bank loan         BB


      Premcor Refining Group Inc.
        Corporate credit rating        BB-
        Senior unsecured debt          BB-
        Subordinated debt              B

QUALITY STORES: Ratings Fall To Lower-C's, Outlook Is Negative
Standard & Poor's lowered its corporate credit and senior
secured bank loan ratings on Quality Stores Inc. to triple-'C'
from triple-'C'-plus and lowered its senior unsecured debt
rating to double-'C' from triple-'C'-minus.

The outlook is negative.

The downgrade is based on the company's announcement that it has
hired a financial advisor to assist in restructuring its balance
sheet and Standard & Poor's concern that any restructuring may
be significantly detrimental to bondholders.

Quality Stores has been operating under increasing financial
stress due to strained customer and vendor relationships, which
have been exacerbated by the repeated violation of financial
covenants, and very high leverage. Sales in the first quarter of
2001 decreased 32% to $186 million. The company continued to
experience significant out-of-stock issues during the quarter as
vendors remained concerned about the company's liquidity.
Leverage is very high, with May 5, 2001, trailing 12-month total
debt to EBITDA at 22.0 times (x), and EBITDA coverage of
interest is very weak at only 0.4x.

                   Outlook: Negative

If the outcome of any restructuring is detrimental to
bondholders, the ratings would be subject to a downgrade.

SL IDUSTRIES: Posts Weak Q2 Results & Looks For More Funds
SL Industries Inc. (NYSE:SL) (PHLX:SL) announced that net sales
from continuing operations for the second quarter ended June 30,
2001 were $32.5 million (or $35.4 million inclusive of
discontinued operations), compared to net sales of $39.1 million
(or $44.1 million inclusive of discontinued operations) for the
second quarter last year, a decrease of $6.6 million or 17%
($8.7 million or 20% inclusive of discontinued operations).

Pro forma net loss from continuing operations was $0.1 million
for the second quarter ended June 30, 2001, compared to pro
forma net income of $1.8 million for the same period last year.
Pro forma net loss from continuing operations for the second
quarter ended June 30, 2001 excludes the effects of
restructuring costs of $0.7 million, net of taxes, and write
down of inventory of continuing operations of $1.9 million, net
of taxes.

Pro forma net income from continuing operations for the second
quarter ended June 30, 2000 excludes the effects of operating
losses of discontinued operations of $1.0 million, net of taxes.

Actual net loss for the second quarter ended June 30, 2001 was
$5.3 million, or $0.93 per diluted share, compared with actual
net income of $0.8 million, or $0.14 per diluted share, for the
same period last year.

Net sales from continuing operations for the six months ended
June 30, 2001 were $70.1 million (or $79.1 million inclusive of
discontinued operations), compared to net sales of $76.5 million
(or $87.7 million inclusive of discontinued operations) for the
six months ended June 30, 2000, a decrease of $6.4 million or 8%
($8.6 million or 10%, inclusive of discontinued operations).

Pro forma net income from continuing operations was $0.4 million
for the six months ended June 30, 2001, compared to pro forma
net income of $3.4 million for the same period last year. Pro
forma net income from continuing operations excludes the effects
of restructuring costs of $0.7 million, net of taxes, and write
down of inventory of continuing operations of $1.9
million, net of taxes.

Pro forma net income from continuing operations for the six
months ended June 30, 2000 excludes the effects of operating
losses of discontinued operations of $2.0 million, net of taxes.

Actual net loss for the six months ended June 30, 2001 was $4.8
million, or $0.85 per diluted share, compared with actual net
income of $1.3 million, or $0.23 per diluted share, for the same
period last year.

In July 2001, the board of directors authorized the disposition
of the company's SL Waber subsidiary. Operations of this
subsidiary are expected to continue until approximately Sept.
30, 2001.

The net losses of this subsidiary are included in the
Consolidated Statements of Operations under "discontinued
operations." Net sales from discontinued operations for the
second quarter ended June 30, 2001 were $2.9 million, compared
to net sales of $5.0 million for the second quarter last
year, a decrease of $2.1 million or 42%.

Actual net loss from discontinued operations for the second
quarter ended June 30, 2001 was $2.6 million, compared with
actual net loss of $1.0 million, net of taxes, for the same
period last year. Net sales from discontinued operations for the
six months ended June 30, 2001 were $9.0 million, compared to
net sales of $11.2 million for the six months ended June 30,
2000, a decrease of $2.2 million or 20%.

Actual net loss from discontinued operations for the six months
ended June 30, 2001 was $2.6 million, compared with actual net
loss of $2.0 million, for the same period last year. The
provision for loss from discontinued operations reflected in the
Consolidated Statement of Operations includes the write-down of
the assets of the subsidiary to estimated realizable values and
the anticipated losses through Sept. 30, 2001, less the expected
tax benefits applicable thereto.

During the second quarter ended June 30, 2001, the company made
two announcements of programs to reduce its workforce,
consolidate excess facilities, and restructure certain business
functions in response to the sudden and substantial downturn in
sales to telecommunications equipment manufacturers.

In these announcements, the company stated it would record pre-
tax restructuring charges of $2.0 million ($1.3 million and $0.7
million), of which $1.1 million was recorded in the second
quarter. The additional $900,000 will be recognized in the
second half of 2001.

Commenting on the results, Owen Farren, president and chief
executive officer of SL Industries, said: "As we have previously
reported, SL Industries has been and continues to be adversely
affected in its Condor, Teal and Waber business units by the
sudden and substantial decline in telecommunications and
semiconductor capital spending. For the second quarter, order
intake at Condor and Teal was $14.7 million, as compared to
$22.9 million for the same period last year.

"This decline, the related cancellation of customer orders and
programs, as well as the drop in electronic component pricing
led to the company's inventory charge of $1.9 million, net of
taxes, and the restructuring charges of $2.0 million. In
addition, the company is experiencing softening in industrial
distribution, as many of its major distributors work to reduce
their inventories.

"Both Condor and Teal, however, have been awarded a number of
important new OEM programs from medical, semiconductor,
telecommunications and other industrial equipment manufacturers.

"The company's other major business units performed well. At RFL
Electronics, order intake for the second quarter of 2001 was
$7.2 million, as compared to $5.4 million for the same period
last year. In the company's power motion group, SL Montevideo
Technology and Elektro-Metall Export, order intake for the
second quarter of 2001 was $14.2 million, as compared to $11.3
million for the same period last year."

Farren continued: "The company continues to take strong measures
to conserve cash. The company believes it will have adequate
liquidity from operations and through its credit facility to
fund operations and working capital requirements through the end
of the third quarter. It is actively seeking to raise additional
funds in the near term through the sale or other disposition of
certain of its non-operating assets and is engaged in
discussions with its current lenders regarding its liquidity
position and working capital needs.

"The company is seeking to obtain additional financing through
other sources. We cannot be certain that the company will be
able to obtain additional funds, sufficient to conduct its
operations, on satisfactory terms, in which event its ability to
continue operations as presently conducted will be materially
adversely affected."

Farren concluded: "SL Industries is continuing its discussions
with potential acquirers. As we recently announced, based on
interest expressed by certain parties, the company has directed
Credit Suisse First Boston to solicit interest in SL's power
electronics group and power motion group separately, while it
continues to work with us in pursuing the original process to
sell the entire company.

"We anticipate that by the end of August interested parties will
have completed their due diligence reviews and submitted formal
offers for evaluation."

                      About SL Industries

SL Industries Inc. designs, manufactures and markets Power and
Data Quality (PDQ) equipment and systems for industrial,
medical, aerospace and consumer applications. For more
information about SL Industries Inc. and its products, visit the
company's Web site at http://www.slpdq.com

SUN HEALTHCARE: Asks For Fifth Extension Of Removal Period
Sun Healthcare Group, Inc. asks the Court for a fifth extension
of the time within which they must file notices of removal of
civil actions and proceedings under Bankruptcy Rule 9027 until
the earlier of (a) a date certain to be set at a hearing on
August 17, 2001, or (b) thirth days after the conclusion of the
confirmation hearing.

The Debtors again remind the Court that they continue to review
their records to determine whether they should remove any claims
or civil causes of action among the hundreds of actions and
proceedings in a variety of state and federal courts pending on
the Petition Date, and the key personnel assessing these
lawsuits are also actively involved in the reorganization
efforts and the mediations arising from the alternative dispute
resolution procedure ordered by the Court. Therefore, they
require additional time to consider filing notices of removal if
the claims are not successfully mediated. The Debtors note that
it would be a waste of effort to undertake that analysis now
since most of the claims will be resolved through the ADR.

The proposed extension, the Debtors believe, will provide
sufficient additional time for them to consider, and make
decisions concerning the removal of actions on the Petition
Date. (Sun Healthcare Bankruptcy News, Issue No. 22; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

SUN INTERNATIONAL: S&P Rates Proposed $200MM Senior Notes at B+
Standard & Poor's revised its outlook for Sun International
Hotels Ltd. to stable from negative.

In addition, Standard & Poor's assigned its single-'B'-plus
rating to Sun International Hotels' proposed $200 million in
senior subordinated notes due 2011. Sun International North
America Inc., a subsidiary, is a co-borrower under the proposed
notes, and substantially all of Sun's other subsidiaries will be
guarantors. The notes will be offered pursuant to Rule 144A of
the Securities Act of 1933. Proceeds are expected to be used to
repay a portion of the loans outstanding under Sun's revolving
credit facility.

Concurrently, Sun's double-'B' corporate credit and senior
secured bank loan ratings were affirmed.

Ratings reflect the strength of Sun's Paradise Island operations
(Atlantis and the Ocean Club), the company's good position as a
manager of luxury resort hotels, and the anticipated steady cash
flow stream from the Mohegan Sun casino in Connecticut.

These factors are offset by the company's high cash flow
concentration from Paradise Island and a historically active
growth strategy.

Sun International generates most of its cash flow from its
operations on Paradise Island, Bahamas. The amenities of
Atlantis and the Ocean Club offer quality resort accommodations
and services in a market with high barriers to entry. The
Caribbean island location, however, results in a high reliance
on tourism and subjects the company to some seasonality. Also,
although performance has been solid thus far in 2001, a
persistent economic slowdown could affect performance at this

Somewhat offsetting this concern is the relinquishment agreement
between Trading Cove Associates (50% owned by Sun) and the
Mohegan Tribal Gaming Authority, which was established to own
the Mohegan Sun casino. This agreement, which governs
distributions to TCA, is expected to provide a stable and
growing source of cash flow given the Mohegan Sun's quality
casino and amenities, and the high barriers to entry in the
Connecticut market. The expansion of Mohegan Sun, the first
phase of which is expected to open in the fall of 2001, will
further add to the fee income that Sun International derives
from this source.

Sun reported total debt of $521 million as of June 30, 2001, as
proceeds from the April 2001 sale of Resorts Atlantic City
(Resorts) were applied to debt reduction. Pro forma for the sale
of Resorts, total debt to EBITDA for the 12 months ended June
30, 2001, was in the mid-3 times (x) range.

Near-term expansion projects include the refurbishment of the
Coral Towers (part of Atlantis) which will result in some rooms
being out of service in the fourth quarter of 2001, although
this is not expected to materially affect cash flow. In
addition, management has begun to plan for a Phase III expansion
of Atlantis. While plans are preliminary, the project (including
the expansion of the marina) is expected to cost around $200
million, and construction could begin as early as 2002.
Negotiations with the Bahamian government regarding potential
infrastructure improvements are a factor in the timing. Standard
& Poor's expects that Sun can fund most of this project through
free cash flow.

Longer term, Standard & Poor's expects that Sun will develop the
additional 55 acres on a portion of the island known as Pirate's
Cove, as its final Phase IV expansion project. This phase,
however, is not expected to occur for several years.

Sun continues to assess various investment opportunities around
the world, however, Standard & Poor's does not expect any large-
scale expansion projects to be announced in the near term.
Management has been skillful in identifying and developing
unique large-scale properties in markets with high barriers to
entry, as it has with Atlantis and Mohegan Sun. These
opportunities are rare, however, and Standard & Poor's expects
that future projects will continue to be financed in a manner
consistent with the ratings. Standard & Poor's expects near-term
share repurchases to be minimal, given limitations under Sun's
bond indentures. Debt leverage is expected to remain between 3x-
4x over the intermediate term.

                         Outlook: Stable

Standard & Poor's expects that Sun's quality operations on
Paradise Island, and the anticipated steady cash flow stream
from the Mohegan Sun casino will continue to produce sufficient
cash flow for Sun to sustain existing credit measures while
accomplishing management's intermediate term growth objectives.

TRUSERV INC.: Debt Covenant Defaults Raise Going Concern Doubts
Quoted from the auditing firm of PricewaterhouseCoopers LLP,
Chicago, Illinois, report on the financial condition of TruServ
Inc., (one of the largest member-owned wholesaler of hardware
and related merchandise in the United States): "As of February
24, 2001 the Company was in violation of certain restrictive
covenants contained in its lending agreements and is currently
in the process of renegotiating such agreements with its lending
group. These factors raise substantial doubt about the Company's
ability to continue as a going concern."

                    Debt Covenant Violation

Under the senior notes and the revolving credit facility the
Company is required to meet certain restrictive financial ratios
and covenants relating to minimum EBITDA, minimum fixed charge
coverage, minimum borrowing base to debt ratio, maximum capital
expenditures and maximum asset sales, as well as other customary
covenants, representations and warranties, funding conditions
and events of default. As of December 31, 2000, the company was
in compliance with the covenant requirements.

However, as of February 24, 2001, the Company failed to comply
with a covenant under the revolving credit facility and the
senior note agreements which requires the Company to achieve a
minimum monthly borrowing base ratio. As a result, either the
senior note holders or the participants in the revolving credit
facility could declare this failure to comply with the covenant
as an "event of default," in which case the senior notes and the
amounts outstanding under the credit facility would become
callable as immediately payable.

On March 30, 2001 the participants in the revolving credit
facility issued to the Company a "reservation of rights" letter
under which the participants effectively stated their intention
to not call as immediately payable the Company's outstanding
debt obligations until May 1, 2001, although they were not
precluded from doing so. All other rights of the participants
were preserved. Additional letters were issued on April 30, 2001
and on July 3, 2001, which extended the reservation of rights
until July 30, 2001 and September 30, 2001, respectively. The
senior note holders also issued letters reserving their right to
accelerate the maturity of the notes although agreeing not to do
so at this time.

The reservation of rights letters provided by the participants
in the revolving credit facility required that the upper limit
of the total amount that may be borrowed under the Credit
Agreement at any time prior to September 30, 2001 be lowered
from $275,000,000 to $225,000,000. The credit limit under this
facility was reduced on May 11, 2001 from $275,000,000 to
$250,000,000. Additionally, the interest rate on the amounts
outstanding under the revolving credit facility was increased by
approximately 2%; this increased interest rate also applies to
the outstanding senior notes. As a result of this increased
interest rate, the Company will incur additional interest
expense in fiscal year 2001. If this increased interest rate
continues through December 31, 2001, the additional interest
expense would aggregate approximately $6.0 million.

TruServ is in discussions with the current lenders and with
potential lenders regarding refinancing the senior note
agreements and the revolving credit facility and, if successful,
will replace the current senior note agreements and the
revolving credit facility with an asset-based lending agreement
with a new lending group in the fourth quarter of 2001. An
alternative may be to amend the existing agreements with the
existing lenders. However, no assurances can be given as to the
outcome. The Company's failure to successfully refinance or
amend its current borrowing arrangements could cause the current
lending group to call as immediately payable the company's
currently outstanding debt obligations. The Company's resulting
inability to satisfy its debt obligations would force the
Company to pursue other alternatives to improve liquidity,
possibly including among other things, restructuring actions,
sales of assets and seeking additional sources of funds or
liquidity. In particular, the Company has engaged an investment
banking firm to assist us in exploring the sale of the paint
business. No assurances can be given that the Company would be
successful in pursuing such possible alternatives or, even if
successful, that such undertakings would not have a material
adverse impact on the Company.

Revenues for 2000 totaled $3,993,642,000. This represented a
decrease in revenues of $508,684,000 or 11.3% over 1999. The
Company's net margin in 2000 was $34,117,000 compared to a net
loss of $130,803,000 in 1999. The company attributes this result
to the following: improvement in its gross margins, a reduction
in logistics and manufacturing expenses, a decrease in SG&A
expenses, the gain from the sale of the lumber and building
materials division and the settlement of the pension claims
through the purchase of annuity contracts.

At December 31, 2000, the Company's working capital was
($188,739,000), as compared to $85,789,000 at December 31, 1999.
The current ratio was 0.82 at December 31, 2000, as compared to
1.10 at December 31, 1999.

USC CORPORATION: Employs Chilmark Partners As Financial Advisor
USG Corporation sought and received an order authorizing them to
employ, LLC, as their financial and restructuring advisors.
Chilmark, the Debtors relate, is a leader in financial advisory
work in corporate restructurings and distressed situations.
Chilmark was a key player in restructurings involving Fruit of
the Loom, Inc., MobileMedia Communications, Inc., and
International Harvester.

David Schulte informs the Court that Chilmark will render
financial and restructuring advisory services to the Debtors
during the course of the chapter 11 cases and as requested.
Chilmark will:

       (a) review the Debtors' businesses and prospects;

       (b) review the Debtors' long-term business plan;

       (c) analyze the Debtors' financial liquidity and financing

       (d) advise the Debtors and provide strategic and financial
           analyses with respect to its alternatives regarding
           the Obligations;

       (e) advise the Debtors and, if requested by the Debtors,
           negotiate with lenders and/or debtholders with respect
           to potential waivers, amendments of credit facilities,
           or alternate financing arrangements;

       (f) evaluate the Debtors' debt capacity and alternative
           capital structures;

       (g) develop valuation, debt capacity, and recovery
           analyses in connection with developing and negotiating
           a potential Restructuring;

       (h) analyze various restructuring scenarios and the
           potential impact of these scenarios on the value of
           the Debtors and the recoveries of those stakeholders
           impacted by the Restructuring or Disposition;

       (i) assist in the resolution of asbestos claims including
           assisting in the preparation of an operating model for
           payments and costs and the analyses of payment and
           funding scenarios;

       (j) assist in the development of a negotiating strategy
           and, if requested by the Debtors, assist in
           negotiations with the Debtors' creditors and other
           interested parties with respect to a potential
           Restructuring or Disposition;

       (k) advise with respect to the value of securities offered
           by the Debtors in connection with a Restructuring or

       (l) make presentations to the board of directors of USG,
           creditor groups or other interested parties, as

       (m) provide expert witness testimony, as required;

       (n) provide financial advice and assistance to the Debtors
           in connection with any proposed or potential
           Disposition, including identifying potential acquirors
           and, at the Debtors' request, contacting such
           potential acquirors;

       (o) assist the Debtors in the preparation of marketing
           materials, including an offering memorandum,
           management presentations, other marketing materials,
           and a marketing strategy in connection with any
           potential or proposed Disposition;

       (p) if requested by the Debtors, assist the Debtors and/or
           participate in negotiations with potential acquirors
           of all or any part of the Debtors in evaluating

       (q) assist the Debtors in conducting transaction
           feasibility analyses and assist in evaluating any
           proposed or potential Disposition;

       (r) if requested, prepare and deliver to the Debtors a
           fairness opinion in connection with a proposed or
           potential Disposition; and

       (s) provide such other advisory services as are
           customarily provided in connection with the analysis
           and negotiation of a Disposition and/or Restructuring,
           as reasonably requested by the Debtors.

The Debtors agree to pay Chilmark:

       (1) a $200,000 monthly advisory fee, payable in advance,
           until the earlier occur of (x) a successful
           restructuring, or (y) the termination of this

       (2) an $8,000,0000 Success Fee, less a credit for up to
           $4,800,000 of monthly advisory fees.  A "successful
           restructuring" is defined as the execution,
           confirmation, effectiveness, and consummation of a
           Chapter 11 Plan for USG or any of its subsidiaries.
           The Success Fee is to be paid in cash upon completion
           of a Successful Restructuring;

       (3) if the Company consummates a Disposition, Chilmark
           will receive, upon completion of the transaction, a
           cash fee equal to 0.65% of the Aggregate
           Consideration, subject to a $13,500,000 cap with
           credit for up to $4,800,000 of Monthly Advisory Dees;

       (4) without double counting, if a Transaction Fee is paid
           or payable, that fee will reduce the Restructuring
           Fee, but not to an amount less than zero; and

       (5) reimbursement of all reasonable out-of-pocket

Chilmark agrees to maintain detailed records in support of its
expenses.  Chilmark will maintain general daily records of time
spent by its professionals in connection with the Debtors'
chapter 11 cases, even though it does not charge hourly rates.

Prior to the Petition Date, the Debtors paid Chilmark a $600,000
retainer.  Approximately $575,000 of the retainer remains
unapplied.  In addition to this retainer the Debtors paid
Chilmark during the year immediately preceeding the Petition

                Payment Date       Payment Amount
                ------------       --------------
                April 10, 2001        $200,000
                May 1, 2001            200,000
                June 1, 2001           200,000

Mr. Schulte assures the Court that Chilmark is disinterested as
that term is defined at 11 U.S.C. Sec. 101(14).  Mr. Schulte
discloses that Chilmark is associated with Chilmark Fund II,
L.P., a blind pool private equity partnership.  The Fund invests
in companies going through reconstruction, and therefore may
have business relationships with Interested Parties unrelated to
the Debtors' chapter 11 cases.  The Fund may also have business
relationships or one or more Interested Parties as limited
partners.  Any of these relationships are unrelated to the
chapter 11 cases. (USG Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

VLASIC FOODS: Asks Court To Extend Rule 9027 Removal Period
At the Petition Date, the Vlasic Foods International, Inc.
Debtors were parties to lawsuits pending in state and Federal
courts across the country. Pursuant to Rule 9027 of the Federal
Rules of Bankruptcy Procedure, the Debtors ask the Court for
more time within which they must decide whether to remove a
legal proceeding from the court in which it is pending to the
District of Delaware for resolution.

The Debtors argue that they have not had a full opportunity to
investigate their involvement in the Pre-petition Lawsuits, and
decisions about the appropriate forum in light of these chapter
11 filings would be imprudent at this time.

Judge Walrath will entertain the Debtors' request at a hearing
on August 14, 2001. By application of Del.Bankr.L.R. 9006-2, the
Debtors' removal period is automatically extended through the
conclusion of that August 14 hearing. (Vlasic Foods Bankruptcy
News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 609/392-

WARNACO GROUP: Rejecting Four Unexpired Store Leases
As a major retailer of apparel, The Warnaco Group, Inc.
Debtors operate and maintain approximately 250 retail stores
throughout the United States and Canada. The Debtors have
identified four unprofitable retail stores located in:

     * Lake Elsinore Outlet Center in Lake Elsinore, California;
     * Factory Merchants of Barstow in Barstow, California;
     * Foothills Mall in Warrenton, Missouri; and
     * 1000 Warrenton Outlet Center in Tucson, Arizona;

requiring payment of monthly rent and associated carrying costs
totaling $47,419. The Debtors closed these four locations this
month and gave their lessors written notice of the closures
dated July 6. Based on Keen's analyses, the Debtors believe that
the rental rates under the retail store leases exceed the
current market rate. To avoid the potential accumulation of
administrative rent, the Debtors seek to reject these retail
store leases effective as of July 31, 2001.

If the Court grants this motion, Elizabeth R. McColm, Esq., at
Sidley Austin Brown & Wood, in New York, says, the rejection of
these leases will save the Debtors an annualized rental cost of
$705,756. (Warnaco Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

WILLCOX & GIBBS: Files Chapter 11 Petition in Wilmington
Willcox & Gibbs, Inc. (OTC Bulletin Board: WXGBA) announced that
it had filed in the Bankruptcy Court for the District of
Delaware a petition for relief under Chapter 11 of the
Bankruptcy Code.

Willcox & Gibbs said that it had an agreement with its current
bank lender to provide Debtor-in-Possession ("DIP") financing
during the Chapter 11 case by continuing the Company's existing
revolving credit facility.  This facility is subject to
definitive documentation and to the approval of the Bankruptcy

Willcox & Gibbs will continue to pay trade creditors all post-
petition obligations as they come due.

John K. Ziegler, Chairman of Willcox & Gibbs, said: "Our company
has been severely impacted by the substantial decline in the
results of the U.S. apparel industry.  In addition, the
substantial weakness in apparel production in Mexico and the
Caribbean basin countries has contributed to the Company's
problems.  We believe that Willcox & Gibbs needs to restructure
its operations and reorganize under the protections of Chapter
11.  We appreciate the support of our employees, customers,
vendors and bank lender during this challenging time."

Willcox & Gibbs is a major distributor of replacement parts,
supplies and ancillary equipment to manufacturers of apparel and
other sewn products.

WILLCOX & GIBBS: Case Summary & 20 Largest Unsecured Creditors
Lead Debtor: Willcox & Gibbs, Inc.
              12 Bank Street
              Summit, New Jersey 07901

Debtor affiliates filing separate chapter 11 petitions:

              WG Apparel, Inc. 01-10062
              Leadtec Systems, Inc. 01-10063
              W&G Daon, Inc. 01-10064
              Macpherson Meistergram, Inc. 01-10066
              EMTEX Leasing Corporation 01-10067

Type of
Business:    Through the operations of six principal
              business units, Willcox & Gibbs, Inc.'s business
              activities consist of the distribution of
              certain replacement parts, supplies and
              ancillary equipment to the apparel and other
              sewn products industry. These products include
              industrial sewing equipment parts, such as
              needles, hooks, motors, tools and other
              accessories, and ancillary equipment and
              supplies, screen printing equipment and supplies
              and production planning and control systems. The
              company's corporate headquarters are located in
              Summit, New Jersey.

Chapter 11 Petition Date: August 6, 2001

Court: District of Delaware

Bankruptcy Case Nos.: 01-10061 through 01-10064,
                       01-10066 and

Debtors' Counsel: Edwin J. Harron, Esq.
                   Brendan Linehan Shannon
                   Young, Conaway, Stargatt & Taylor
                   P.O. Box 391
                   Wilmington, DE 19899-0391
                   302 571-6600
                   Fax : 302-571-1253
                   Email: bankruptcy@ycst.com

Approximate Assets: $36,393,000

Approximate Debts: $29,994,000

List of Debtors' 20 Largest Unsecured Creditors:

Entity                             Claim Amount
------                             ------------
G.M. Pfaff                             $756,044
Postfach '3020/3040
67653 Kaiserlautern

EFP Inc.                               $625,045
RT 1 Box 400
8013 Walker Mill Rd.
Randelman, N.C. 27317

Gerber Garment                         $608,497
24 Industrial Park
Tolland, CT

Pegasus Sewing Machine                 $565,244
7-2 Sagisu 5-Chome
Osaka 553-0002 Japan

Peter J. Solomon Company, Ltd.         $555,328
767 Fifth Avenue
26th Floor
New York, NY 10153

Rutland                                $511,858
PO Box 890133
Charlotte, NC 28289

AT&T                                   $400,000
PO Box 9001309
Louisville, KY 40290

Pegasus Corp. of America               $356,605
1325 Oakbrook Parkway
Suite A
Norcross, GA 30093

Schmetz Needle                         $345,000
9960 NW 116 Way
Suite 3
Medley, FL 33178

Superior Sewing Machine                $317,192
48 West Street
New York, NY 10010

AMF Reece Corp.                        $261,954
8080 AMF Reece Drive
Mechanicsville, VA 23111

Barudan Sewing Machine Co              $243,856

Avery Dennison                         $220,969

Sogawa Inc.                            $163,026

EMS-Chemie AG                          $161,152

Euro Etichette SRL                     $158,209

Clinton Industries                     $153,845

Civit Products                         $152,271

Bobbin Americas                        $140,870

Universal Standard                     $137,951

WINSTAR COMMUNICATIONS: Retains Akin Gump As Special Counsel
Winstar Communications, Inc. and its debtor-affiliates seek the
Court's approval of the employment and retention of Strauss
Hauer & Feld, LLP as special commercial transaction

Edward J. Kosmowski, Esq., at Young, Conaway, Stargatt & Taylor,
LLP in Wilmington, Delaware, states that the Debtors sought Akin
Gump as special commercial transaction counsel because of the
firm's extensive experience and knowledge with large-scale
commercial transactions.  Akin Gump is believed to be well
qualified and uniquely able to represent Winstar as special
commercial transaction counsel.

Mr. Kosmowski discloses that the compensation to Akin Gump will
be on an hourly basis, plus reimbursement of actual necessary
expenses and other charges incurred by Akin Gump.  The hourly
rates of principal attorneys of Akin are as follows:

       Partners            $395-700 per hour
       Associates          $250-300 per hour
       Legal Assistants     $90-150 per hour

Mr. Kosmowski states that the professional services that Akin
Gump will render to the Debtors include but not limited to:

     a. to provide advice, counsel, negotiation and drafting
        assistance in connection with significant ordinary course
        and one-time commercial broadband and/or
        telecommunications commercial transactions;

     b. to perform all other similar legal services for the
        Debtors that the Debtors may require from time to time

Eric W. Cowan, a partner at Akin Gump certifies that Akin Gump
nor any of its partners, counsels or associates does not hold or
represent any interest adverse to the Debtors, their creditors
or stockholders nor any parties in interest.

Mr. Cowan discloses that Akin Gump has represented the Debtors
since January 2001 in general corporate, regulatory, and other
related matters.  The partners, counsels or associates has also
represented the Debtors from January 1998 though December 2000
while at the law firm Greenberg Traurig LLP also on corporate,
regulatory, and other related matters.

Some clients of Akin Gump are however, parties to the Debtors'
Revolving Credit Term and Loan Agreement dated May 4, 2000.
These clients are in matters unrelated to the Debtors or Chapter
11 cases are:

         1. ABN Amro Bank, N.V.
         2. The Bank of Nova Scotia
         3. Barclays Bank, PLC
         4. CIBC World Capital Markets
         5. Citicorp North America, Inc.
         6. Citibank N.A.
         7. Credit Lyonnais
         8. Credit Suisse First Boston
         9. Fleet National Bank
        10. General Electric Capital Corporation
        11. Merrill Lynch Asset Management
        12. Morgan Guaranty Trust Company
        13. The Bank of Montreal
        14. The Royal Bank of Canada
        15. Societe Generale

In addition, Akin Gump represents these affiliates of certain
lenders in matters unrelated to the Debtors or these cases:

    1. Siemens AG, affiliate of Siemens Financial Services, Inc.
    2. UBS Warburg, affiliate of UBS AG
    3. ING Barings, affiliate of ING Capital Advisors, Inc.

Mr. Cowan said Akin Gump has performed a "conflict check" of
it's relationships with the Debtors' 20 largest unsecured
creditors, certain other creditors and entities holding 5% or
more of the preferred and common stock of the Debtors and no
such conflict have yet been discovered.  Akin Gump is continuing
the review of potential conflicts and states that if a conflict
exists, it will promptly notify the United States Trustee.

Mr. Cowan also discloses that Akin Gump did not render
professional services to the Debtors for the year 2000 nor has
it received a pre-petition retainer from the Debtors in the year
2001. (Winstar Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

WOLF CAMERA: Promotes Ted de Buhr to President & COO Slot
Wolf Camera announced the promotion of Ted de Buhr to president
and chief operating officer. He has been a member of Wolf's
senior management team since 1998, most recently serving as
executive vice president and chief operating officer of
corporate operations.

Chuck Wolf, who previously served as president, continues as the
company's chairman and chief executive officer. While continuing
to provide strategic direction for the company, Mr. Wolf will
increase his focus on the sales, marketing and merchandising of
the company's products and photo processing services, and has
appointed Mr. de Buhr as president to run the day-to-day
operations of the company.

Mr. de Buhr has nearly 30 years experience in the photographic
retail industry, including serving as the president of several
public company subsidiaries.

"Ted de Buhr is -- without question -- the right person to lead
our team with me as we move into the future," said Mr. Wolf. "He
is uniquely qualified, is well-respected inside and outside of
our company, and is an exceptionally well-rounded executive."

Mr. Wolf continued, "In the coming weeks and months I will
devote a great deal of time to visiting, marketing and
merchandising our stores around the country. Ted will manage
day-to-day corporate activities and details of our
reorganization, freeing me up to ensure that we deliver the best
customer service and products in the business."

Mr. de Buhr, who resides in Atlanta with his wife and family,
said Wolf Camera is moving in the right direction.

"Our employees are motivated and our executive team is entirely
focused on building an improved Wolf Camera," said Mr. de Buhr.
"We will continue to enhance Wolf's stature, built over 25
years, as the most respected name in the photographic retail

Chuck Wolf founded privately held Wolf Camera in 1974. Wolf
Camera locations offer a complete inventory of traditional
photography and digital imaging products and services, frames,
albums and accessories. Each Wolf Camera store is staffed by
trained experts and features on-site, one-hour film developing.
Digitizing services, which allow consumers to transfer images to
a floppy disk, CD or have them uploaded to the Internet are also
available. For more information about Wolf Camera, visit


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

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, Bernadette de Roda, 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
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