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

           Thursday, August 16, 2001, Vol. 5, No. 160

                            Headlines

360NETWORKS INC: Wants To Reject 18 Property Leases & 1 Sublease
ADVOCAT INC.: Remains in Active Discussions for Covenant Waivers
AMF BOWLING: Judge Tice Reassigns Chapter 11 Case To Judge Adams
BANYAN STRATEGIC: Net Assets In Liquidation Decrease by $47.3MM
BENEDEK COMMUNICATIONS: Not in Compliance with Credit Facility

BGF INDUSTRIES: S&P Downgrades Debt Ratings To Low-B's
BIG V: Prepetition Secured Lenders Oppose Exclusivity Extension
BRIDGE INFORMATION: McDonald Investments Gets Relief from Stay
BURNHAM PACIFIC: Reports Second Quarter 2001 Results
CALIBER LEARNING: Selling All Assets To Sylvan Learning

CHAPARRAL RESOURCES: Reports Q2 Losses and Shell Capital Waiver
COMDISCO INC.: Honoring Key Employee Compensation Agreements
CROWN CENTRAL: S&P Places Low-B Ratings on Credit Watch
CROWN VANTAGE: Soliciting Competing Bids for Ypsilanti Facility
DELTA FINANCIAL: Posts $16.5 Million Net Loss In Second Quarter

DENBURY RESOURCES: S&P Rates $75 Million Senior Sub Notes At B-
FINOVA GROUP: Court Grants GMAC Relief From Automatic Stay
FOCAL COMM.: S&P Slashes Corporate Credit Rating To CC From B-
FUTURELINK: Files For Chapter 11 Protection In S.D. New York
FUTURELINK: Case Summary & List Of Unsecured Creditors

GENESIS HEALTH: First Union & Goldman Extend $415MM Exit Loan
GENESIS HEALTH: Reports Third Quarter Fiscal 2001 Results
GENESIS HEALTH: Multicare Releases Third Quarter 2001 Results
GLOBAL CROSSING: Ratings On Watch With Negative Implications
GRANITE BROADCASTING: S&P Junks Ratings, Outlook Is Negative

HEARME: Shares Kicked Off Nasdaq, Now Trades On OTCBB
HOTEL SYRACUSE: Files for Chapter 11 Protection
iASIAWORKS: May File For Bankruptcy If Debt Restructuring Fails
ICG: Cable & Wireless Wants To End NetAhead Peering Arrangement
IMPSAT FIBER: S&P Drops Ratings to CCC+/CCC- From B/B-

INSPIRE INSURANCE: Appeals Nasdaq's Delisting Determination
KELLSTROM INDUSTRIES: Senior Lenders Agree To Waive Debt Default
KELLSTROM INDUSTRIES: Conference Call at 1:30 p.m. Today
KRAUSE'S FURNITURE: Bankruptcy Court Approves Interim Financing
L.L. KNICKERBOCKER: Reports Improved Second Quarter Results

LAIDLAW INC.: US Trustee Appoints Official Creditors' Committee
MARINER POST-ACUTE: Agrees To Modify Stay For Insured Claims
MAXICARE: Assigns LA Medi-Cal Contract To Care 1st For $15 Mil
MIDWAY AIRLINES: Restructuring Entails Workforce, Aircraft Cuts
OWENS CORNING: Rejects Three Executory Contracts

PACIFIC GAS: Assumes Western Oilfield Equipment Lease
PENTASTAR COMM: Defaults On Credit Covenants With Wells Fargo
Point.360: Talking To Lenders To Waive Debt Covenant Defaults
PSA INC: Plan Confirmation Hearing Scheduled For August 31
SAFETY-KLEEN: Appoints Rittenmeyer As New Chairman/CEO/President

SURGICAL NAVIGATION: Files For CCAA Protection in Ontario Court
THCG INC.: Releases Second Quarter 2001 Results
VELOCITYHSI INC.: Files Chapter 7 Petition in N.D. California
VENUS EXPLORATION: Shares Subject To Nasdaq Delisting
WHEELING-PITTSBURGH: Seeks To Expand PwC's Advisory Services

WINSTAR COMMUNICATIONS: Moves To Authorize Prepetition Setoffs

                            *********

360NETWORKS INC: Wants To Reject 18 Property Leases & 1 Sublease
----------------------------------------------------------------
360networks inc. asks Judge Gropper for an order authorizing
them to reject certain unexpired leases of non-residential real
property.

According to Alan J. Lipkin, Esq., at Willkie Farr & Gallagher,
in New York, the Debtors have reviewed each of the Leases and
determined that each of the Leased Locations is no longer needed
for the Debtors' continuing operations and the marketing and
selling of any of the Leases would not result in an economic
benefit to the Debtors.

The Leases the Debtors propose to reject are:

(A) Leases To Be Rejected

Lease # Property Location       Tenant         Landlord
------- -----------------       ------         --------
  1     5430 South 12th Avenue  360 Networks   Robert J. Erickson
        Suite F, Tucson, AZ

  2     2258 North Street       Worldwide      Mario Addiego
        Anderson, CA 96007      Fiber
                                Networks, Inc.

  3     19200 Von Karman Ave.   360 Networks   Atrium Irvine, LLC
        Suit 360, Irvine, CA    (USA), Inc.

  4     2601 Main Street        Worldwide      Miede Sexton, P.C.
        Suite 280 Irvine, CA    Fiber             (sublessor)
                                Networks, Inc.
                                (sublessee)

  5     555 Eldorado Blvd.     360networks     JPI Development
        Broomfield, CO 80021   (USA), Inc.     Ltd. Partnership

  6     12303 Airport Way      360networks     GlobalCommerce
        Mountainview Bldg. I   (USA), Inc.     Systems, Inc.
        Broomfield, CO 80021   (sublessee)     (sublessor)
        (1st floor & portion
        of 2nd floor)

  7     12202 Airport Way      Worldwide       W9/MTN Real Estate
        Mountainview Bldg.     Fiber           Ltd. Partnership
        III Suites 120 $ 130   Networks, Inc.
        Broomfield, CO 80021

  8     500 W. Monroe Street   360networks     Trans Union LLC
        Chicago, IL 60661      (USA) Inc.      (sublessor)
                               (sublessor)

  9     8720 Orion Place       360networks     Orion Office Park,
        Columbus, OH 43240     (USA) Inc.      LTD.

10     Kapolei Building       360networks     South Co., Inc.
        Suite 310               (USA) Inc.     (Sublessor)
        Campbell Square        (sublessee)
        Kapolei, HI

11     2455 NW Nicolai St.    360networks     Rosan, Inc.
        Portland, OR 97210     (USA), Inc.

12     16000 Dallas Parkway   360networks     Informix Software,
        Dallas, TX             (USA) Inc.      Inc.
                               (sublessor)     (sublessor)

13     880-898 Cambridge      360 Networks    Slough Estates
        Drive Elk Grove        (USA), Inc.     USA Inc.
        Village, IL 60007

14     950 Tower Lane        360 networks    Spieker Properties,
        Suite 850              (USA), Inc.     L.P.
        Foster City, CA 94404

15     350 Park Avenue        360networks     350 Investors
        21st Floor             (USA), Inc.     Corporation
        New York, NY 10022

16     1011 S.W. Emkay        Worldwide       Mallard
        Drive, Suite 209       Fiber           Investments Inc.
        Bend, OR 97702         Networks, Inc.

17     111 Eighth Avenue      360networks     111 Chelsea LLC
        Tenth Floor            (USA) Inc.
        New York, NY 10011

18     2655 LeJeune Road      360networks     Gables
        Coral Gables, FL       (USA) Inc.      International
        33134                                  Equities Corp.

(B) Rejection for Property With Debtor as Sublessor

Property     Landlord       Tenant     Sublessor     Sublessee
Location
--------     --------       ------     ---------     ---------
5990 Wilcox  Wilcox Place   Worldwide  360 Networks  Dublin
Place,       LLC            Fiber      USA, Inc.     Technology
Dublin,      P.O. Box 3245  Networks,                Group, Inc.
OH 43016     Dublin, OH     Inc.                     5990 Wilcox
                                                       Place
                                                       Dublin, OH

With the rejection of these leases, Mr. Lipkin says the Debtors
will avoid accruing additional administrative expenses.  Since a
deadline for filing proofs of claim has not yet been set in
these cases, the Debtors request that any claims arising from
the rejection of these leases be filed with the Court-appointed
claims agent on or before the later of any applicable bar date
and 45 days after entry of an order granting the relief
requested by this motion.

                Creditors' Committee Objects

The Official Committee of Unsecured Creditors, through its
counsel Norman N. Kinel, Esq., at Sidley Austin Brown & Wood,
LLP, in New York, maintains that the Debtors' motion should be
denied because the Debtors have not performed the necessary due
diligence to make a determination whether the Leases are
appropriate for rejection.  The Debtors have conducted only a
partial and cursory analysis of whether any benefit can be
derived for their estates from the Leases.  For the sake of
convenience, Mr. Kinel says, the Debtors would reject the Leases
and saddle these estates with approximately $13,000,000 of lease
rejection damage claims.

According to Mr. Kinel, the Committee is well aware that great
deference is afforded to debtors under the "business judgment"
rule in determining whether certain leases or executory
contracts may be assumed or rejected.  But here, the Debtors
seek to reject the Leases without conducting sufficient
analysis, thus stretching the business judgment rule beyond its
limits.

Thus, the Committee requests that the Debtors' motion should be
denied at this time, without prejudice to it being renewed at a
later date. (360 Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


ADVOCAT INC.: Remains in Active Discussions for Covenant Waivers
----------------------------------------------------------------
Advocat Inc. (OTC Bulletin Board: AVCA) announced its results
for the second quarter ended June 30, 2001. The Company reported
a loss of $2.4 million, or $0.43 per diluted share, in the
second quarter of 2001 compared with earnings of $73,000, or
$0.01 per share, for the same period in 2000. Net revenues for
the second quarter ended June 30, 2001, increased 4.0% to $50.2
million compared with net revenues of $48.2 million in 2000.

"Advocat's second quarter revenues were up primarily due to
improved reimbursement rates and, secondarily, higher occupancy
in our U.S. nursing home facilities," stated Charles W. Birkett,
M.D., chairman and chief executive officer of Advocat Inc. "Our
earnings, however, continue to be affected by higher costs. Over
the past year our professional liability premiums and related
reserves have increased very substantially, as have wages in a
tight labor market."

U.S. nursing homes net revenues increased 6.1% to $38.5 million
in the second quarter of 2001 compared with $36.3 million in the
second quarter of 2000 and were primarily due to increased
Medicaid reimbursements in Arkansas and other states, increased
Medicare utilization and Medicare rate increases, and a 1.4%
increase in occupancy compared with a the second quarter of
2000. The increase in U.S. nursing home revenue was partially
offset by a facility that closed in August 2000. Net revenues
for U.S. assisted living facilities declined 2.7% to $7.8
million compared with net revenues of $8.1 million in 2000 due
to a number of factors which have reduced census. Canadian
operations were down 2.1% to $3.8 million compared with net
revenues of $3.9 million in the second quarter of 2000.

Operating expenses increased 10.7% to $41.1 million in the
second quarter compared with $37.2 million in 2000. The increase
was primarily due to higher wages (+6.5%, +$1.3 million),
professional liability insurance costs (+24%, +$480,000), bed
taxes associated with the Arkansas reimbursement increase
(+$459,000) and utilities (+$331,000).

"We have implemented a plan to enhance our revenues through
increased Medicare occupancy and expect to benefit from higher
Medicare reimbursement rates as well as certain state Medicaid
rates," continued Dr. Birkett. "We are also focused on
minimizing future increases in expenses through the elimination
of excess operating costs, although it is unlikely that we can
impact wages and professional liability costs in the near term."

Advocat previously announced that it had signed a letter of
intent to sell its Canadian subsidiary, Diversicare Canada
Management Services Co., for $8 million. No definitive purchase
agreement has been reached with the proposed buyer, nor have the
consents necessary been yet received. Although the letter of
intent, by its terms, expired on July 31, 2001, Advocat
continues its efforts to seek consents to allow the transaction
to close as described. No assurances can be given that the sale
of Diversicare Canada will be consummated.

At June 30, 2001, the Company had negative working capital of
$61.4 million primarily as result of $59.1 million of debt being
classified as current liabilities due to Advocat's covenant non-
compliance and other cross-default provisions. The Company
remains in active discussions with its lenders regarding
potential waivers, amendments and refinancing alternatives and
is hopeful that it can reach terms that will not further
jeopardize the future of Advocat.

Advocat Inc. operates 120 facilities including 64 skilled
nursing facilities containing 7,230 licensed beds and 56
assisted living facilities with 5,425 units as of June 30, 2001.
The Company operates facilities in 12 states, primarily in the
Southeast, and four provinces in Canada.


AMF BOWLING: Judge Tice Reassigns Chapter 11 Case To Judge Adams
----------------------------------------------------------------
Judge Tice orders that the Chapter 11 cases of AMF Bowling
Worldwide, Inc., et al., and all related matters be reassigned
to The Honorable David H. Adams. Judge Tice further directs the
clerk to send a copy of the reassignment order to Judge Adams,
and the Debtors to serve notice of the entry of the order to all
core parties-in-interest. (AMF Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


BANYAN STRATEGIC: Net Assets In Liquidation Decrease by $47.3MM
---------------------------------------------------------------
Banyan Strategic Realty Trust (Nasdaq: BSRTS) announced that for
the quarter ending June 30, 2001, its Net Assets in Liquidation
decreased by approximately $47.3 million from approximately
$65.4 million at March 31, 2001 to approximately $18.1 million
at June 30, 2001. The decrease was primarily the result of the
Trust's initial liquidating distribution of $4.75 per share on
June 28, 2001, amounting to $73.6 million. Offsetting this
decrease were approximately $25.8 million of gains on the
Trust's disposition of 24 of its 27 properties on May 17, 2001
(net of minority interests of $6.5 million), operating income in
the amount of approximately $1.0 million and interest on cash
and cash equivalents of approximately $0.4 million, reduced by
depreciation expense of approximately $1.0 million.

For the three months ending June 30, 2000, the Trust reported
Net Income Available to Common Shares of approximately $1.0
million. Because of the differences between the liquidation
basis of accounting and the going concern basis of accounting
described below, this amount is not comparable to the net
changes in assets in liquidation as reported for the three
months ending June 30, 2001.

For the six months ending June 30, 2001, the Trust's Net Assets
in Liquidation decreased by approximately $46.1 million from
approximately $64.2 million at December 31, 2000 to
approximately $18.1 million at June 30, 2001. The decrease was
primarily the result of distributions to shareholders of $74.2
million including the Trust's initial liquidating distribution
of $4.75 per share on June 28, 2001, amounting to $73.6 million.
Offsetting this decrease were gains on the disposition Trust's
sale of 24 of its 27 properties on May 17, 2001 (net of minority
interests of $6.5 million) of approximately $25.8 million,
operating income in the amount of approximately $3.5 million,
recovery of losses on loans, notes and interest receivable of
approximately $0.9 million and $0.5 million of interest on cash
and cash equivalents, reduced by depreciation expense of
approximately $2.6 million.

The recovery of losses on loans, notes and interest receivable
of approximately $0.9 million represents cash received in
respect of the Trust's interest in a liquidating trust
established for the benefit of the unsecured creditors VMS
Realty Partners and its affiliates. The interest in this
liquidating trust had previously been accorded no carrying value
in the Trust's financial statements.

For the six months ending June 30, 2000, the Trust reported Net
Income Available to Common Shares of approximately $2.1 million.
Because of the differences between the liquidation basis of
accounting and the going concern basis of accounting described
below, this amount is not comparable to the net changes in
assets in liquidation as reported for the six months ending June
30, 2001.

Banyan added that after making its initial liquidating
distribution of $4.75 per share, it has established reserves
that it expects will cover contingent liabilities related to
pending litigation, liquidation costs and the net costs of
operating the Trust through its final liquidation which is
anticipated to occur during the third or fourth quarter of 2002.
The Trust anticipates that it will make additional liquidating
distributions from excess of reserves as additional assets are
sold or contingent liabilities are reduced or eliminated. The
Trust currently estimates that it will make additional
distribution(s) of approximately $1.25 per share and that the
total amount of liquidating distributions that will be made
pursuant to its Plan of Termination and Liquidation (including
the initial liquidating distribution of $4.75 per share) remains
at approximately $6.00 per share.

              Liquidation Basis of Accounting

As a result of the adoption of a Plan of Termination and
Liquidation on January 5, 2001, the Trust began reporting on the
liquidation basis of accounting effective for the quarter ending
March 31, 2001. Therefore, operations for the six and three
months ending June 30, 2001 are reported on the Consolidated
Statement of Changes in Net Assets in Liquidation while the June
30, 2000 results are reported on a going concern basis on the
Consolidated Statement of Operations. The financial statement
presentations differ materially in that under the liquidation
basis of accounting, the Trust no longer amortizes deferred
financing fees and leasing commissions and no longer records
straight line rental income. Leasing commissions, however, are
deducted in the computation of Operating Income and are no
longer capitalized and amortized.

Banyan Strategic Realty Trust is an equity Real Estate
Investment Trust (REIT). Its current portfolio consists of
interests in three properties totaling 828,400 rentable square
feet. As of this date, Banyan has 15,496,806 shares of
beneficial interest outstanding.


BENEDEK COMMUNICATIONS: Not in Compliance with Credit Facility
--------------------------------------------------------------
Benedek Communications Corporation reported second quarter 2001
net revenues of $38.0 million, down 8.5% from the second quarter
of last year. Broadcast cash flow of $14.0 million and Adjusted
EBITDA of $12.5 million, declined by $3.2 million (18.6%) and
$3.2 million (20.3%), respectively, from the same period in
2000. On a pro forma same station basis, excluding a nonrecourse
subsidiary, our net revenues, broadcast cash flow and Adjusted
EBITDA for the second quarter declined by $3.5 million (8.4%),
$3.3 million (19.3%) and $3.4 million (21.2%), respectively,
from the same period in 2000.

For the first six months of 2001, net revenues were $69.9
million, a decline of 4.5% from the first six months of last
year. Broadcast cash flow was $21.3 million during the first six
months of 2001, a decline of $5.7 million or 21.2% from the
corresponding period in 2000. Adjusted EBITDA was $18.2 million
during the first six months of 2001, a decline of $6.0 million
or 24.9%, from the same period in 2000. On a pro forma same
station basis, excluding a nonrecourse subsidiary, the net
revenues, broadcast cash flow and Adjusted EBITDA, for the first
six months of 2001, declined by $6.6 million (8.6%), $6.7
million (23.7%) and $7.0 million (27.7%), respectively, from the
same period in 2000.

"National advertising revenue declined by 13% as compared to the
same period in 2000. This represents a modest improvement over
the 16% decline we experienced in the first quarter," Mr. K.
James Yager, President and Chief Operating Officer, said. Mr.
Yager continued, "Local and regional advertising was off 4.5%
from the second quarter of 2000, a lesser decline than we
experienced with national advertising because of our greater
influence at the local level. We continue to focus our sales
efforts on our local markets."

Mr. Yager continued, "So far during the third quarter we have
not seen evidence of improvement in the climate for national
advertising revenue. We therefore anticipate that net revenues
and broadcast cash flow for the second half of 2001 will be
significantly lower than in 2000 due to the general economic
downturn, continued weakness in national advertising revenues
and a significant decrease in political advertising revenues.
Based on our view that the current climate will persist at least
through the fourth quarter of this year, we anticipate that
broadcast cash flow for the full year of 2001 will decline by
approximately 20% from 2000. We have implemented a cost
reduction plan while working to improve our local advertising
results through our local focus. While we anticipate that the
plan will mitigate some of the expected revenue shortfall in the
second half of the year, the significance of the downturn in
national and political advertising revenues will not be offset
by such cost reductions."

As previously anticipated, at June 30, 2001, we were not in
compliance with the senior debt ratio under our credit facility.
The senior debt ratio at June 30, 2001 was 5.35 and the maximum
senior leverage ratio under the credit facility was 5.0. The
non-compliance results from the decline in operating results
this year. We were also not in compliance with our total debt
ratio at June 30, 2001. Total debt includes our senior
subordinated discount notes which began to accrue cash interest
in May 2001. The total debt ratio at June 30, 2001 was 8.28 and
the maximum total debt ratio was under the credit facility 7.0.
We have obtained from our senior lenders a forbearance through
September 17, 2001 with respect to the foregoing non-compliance.
The purpose of the forbearance agreement is to provide us with
additional time in which to complete a proposal to the senior
lenders for an amendment to the credit facility which would
include, among other things, a permanent waiver of the non-
compliance as of June 30, 2001. If the Company's permanent
waiver proposal is not accepted by the senior lenders by
September 17, 2001, the June 30, 2001 defaults will be re-
instated. Our permanent waiver proposal will also require that
prior to the end of 2002, we complete deleveraging transactions,
such as asset sales, so that at the end of 2002 we will be in
compliance with the financial ratios that are contained in the
current credit agreement. The proposal will also adjust the
financial ratio requirements for the balance of 2001 and for the
first three quarters of 2002 to reflect our current projections.
The completion of the amendment will also require us to address
the payment of cash interest on our senior subordinated discount
notes. There can be no assurance that a permanent waiver
proposal will be acceptable to the senior lenders. The entire
outstanding balance of our credit facility, which totals
$276,000,000, is classified as a current liability as a result
of this uncertainty.

We also face the requirement of paying cash interest on the
senior subordinated discount notes in November of this year.
Under the terms of the current credit facility, such payment may
be blocked by the senior lenders if we are not in compliance
with our financial ratios. While we will propose to our senior
lenders financial covenants that we believe we can comply with
during the balance of 2001 and throughout 2002, we believe that
any waiver and amendment that our senior lenders would approve
will still prohibit us from paying cash interest on the senior
subordinated discount notes as required. Therefore we anticipate
that any proposal we make to the holders of our senior
subordinated discount notes to amend or restructure the terms
thereof will require substantially reduced cash interest
requirements on the senior subordinated discount notes or on
indebtedness that we might issue in exchange therefor. We
continue to explore a number of alternatives to address our cash
interest obligations on the senior subordinated discount notes
and our non-compliance with the credit facility. There can be no
assurance that any proposal we make will be acceptable to the
holders of the senior subordinated discount notes.

          About Benedek Communications Corporation

The Company, with headquarters in Hoffman Estates, Illinois,
owns and operates 23 network-affiliated television stations in
the United States. The stations owned by the Company are diverse
in geographic location and network affiliation and serve small
to medium-sized markets.


BGF INDUSTRIES: S&P Downgrades Debt Ratings To Low-B's
------------------------------------------------------
Standard & Poor's lowered its ratings on BGF Industries Inc.
The current outlook is stable.

The downgrade is the result of very weak market conditions in
BGF's most important end market, electronics. BGF's sales of
electronics fabrics used in printed circuit boards, which
historically accounted for about half of its revenues, declined
by more than 50% in the June 2001 quarter compared with the
March 2001 and June 2000 quarters, and are not expected to
recover quickly due to continued sluggish economic conditions
and temporary oversupply. The resulting deterioration in credit
protection measures, which were already anemic for the ratings,
is likely to necessitate amendments to financial covenants in
the company's bank credit agreement in the near term.

The ratings reflect Greensboro, N.C.-based BGF's position as a
leading manufacturer of glass fiber and other high performance
fabrics used in electronic, aerospace, marine, filtration,
insulation, and construction products. This is offset by a
relatively narrow product mix and modest sales base, cyclical
end markets, significant customer and supplier concentration,
and aggressive debt leverage.

BGF is wholly owned by unrated France-based Porcher Industries
Group (Porcher), which also owns 51% of Advanced Glassfiber
Yarns LLC (BB-/Negative/--). The other 49% of Advanced
Glassfiber is owned by Owens Corning. Advanced Glassfiber is one
of BGF's two primary glass fiber yarn suppliers.

The decline in BGF's sales and earnings has had a negative
effect on all of its financial ratios. Compounding the weak cash
flow from operations, a decision to increase inventories ahead
of capacity rationalization and temporary layoffs, and a rise in
capital spending because of commitments made earlier this year,
have caused debt levels to increase somewhat. The ratings
reflect Standard & Poor's expectation that BGF will derive some
benefit from cost-cutting measures, that it will successfully
renegotiate bank covenants (which should ensure sufficient
liquidity), and that Owens Corning's bankruptcy will have no
adverse effects on BGF or Advanced Glassfiber.

Although expected to be weaker in the near term, debt to EBITDA
should average about 4 times (x), EBITDA interest coverage above
2x, and funds from operations to debt between 10% and 15%.

                     Outlook: Stable

Leading positions in niche markets and responsible financial
management should permit performance to return to levels
consistent with the lowered ratings.

                      Ratings Lowered

                                                   Ratings
      BGF Industries Inc.                         To    From
         Corporate credit rating                  B+     BB-
         Senior secured bank loan rating          B+     BB-
         Subordinated debt                        B-     B


BIG V: Prepetition Secured Lenders Oppose Exclusivity Extension
---------------------------------------------------------------
Fleet National Bank, as Administrative Agent for the syndicate
of the Big V Holding Corp., et al's prepetition secured lenders
objects to the debtors' third motion for an order extending
exclusive periods.

The lenders point out that the debtors failed to file a plan of
reorganization and that they have not even circulated a draft of
a plan among the various parties or engaged in any meaningful
discussions about possible plan terms.

Further the lenders state that the extension is only an effort
for the debtors to finalize an agreement with an alternate
supplier of good on more favorable terms to the debtor, and that
the Declaratory Judgment Action should not be linked to the
timing of a plan.

On the other hand, Fleet seeks to file a plan based on the sale
of the debtors' business. Fleet maintains that two parties have
expressed an interest in purchasing the debtors' business, with
the possibility of bringing substantial cash recoveries to the
debtors' constituencies "today".

Therefore Fleet also requests that the court orders the debtors
to cooperate with Fleet's pursuit of a third party sale
alternative and provide reasonable due diligence access to third
parties.


BRIDGE INFORMATION: McDonald Investments Gets Relief from Stay
--------------------------------------------------------------
McDonald Investments, Inc. sought and obtained an order granting
them relief from the automatic stay.

Judge McDonald terminated the automatic stay as it relates to:

     (a) the Information Services Agreement between Bridge
         Information Systems, Inc. and McDonald;

     (b) the Master Services Agreement between ADP and McDonald;
         and

     (c) the ADP Power Partner Schedule of Charges.

McDonald is also authorized to proceed with its contractual
rights to termination of these Agreements.

Under the Information Services Agreement dated December 1994,
Bridge was to supply and transmit to McDonald financial
information.  Then on August 1997, McDonald and ADP entered into
a Master Services Agreement.  At the same time, an ADP Power
Partner Schedule of Charges was also executed by the parties.

Spenser P. Desai, Esq., at Campbell & Coyne, P.C., in Clayton,
Missouri, explains the reasons that McDonald sought to terminate
the agreements was unrelated to bankruptcy filing by Bridge and
ADP.  Except for saying that cause exists to allow McDonald to
terminate the contracts, Mr. Desai did not elaborate further.

In granting McDonald's request, the Court overruled the Debtors
objections.  The Debtors had complained that:

     (1) the Motion alleges no basis for relief from the
         automatic stay, and that

     (2) the Court, on the request of any party to an executory
         contract, may order the debtor in possession to
         determine within a specified period of time whether to
         assume or reject an executory contract, but the Motion
         makes no such request.

(Bridge Bankruptcy News, Issue No. 13; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


BURNHAM PACIFIC: Reports Second Quarter 2001 Results
----------------------------------------------------
Burnham Pacific Properties, Inc. (NYSE: BPP) announced operating
results for the second quarter ended June 30, 2001.

                      Review of Results

For the second quarter ended June 30, 2001, revenues decreased
$16,349,000 to $13,698,000 from $30,047,000 in the second
quarter of 2000. This decrease is primarily attributable to
asset sales completed since June of 2000, partially offset by an
increase in rental revenues from development and redevelopment
properties being placed into service. Net income available to
common stockholders for the three months ended June 30, 2001 was
$3,435,000, or $0.11 per share, as compared to a net loss of
$3,723,000 for the second quarter of 2000. This increase was
primarily attributable to the Company not recording depreciation
and amortization expenses in 2001 subsequent to the adoption of
the liquidation basis of accounting on December 15, 2000. If,
for comparison purposes, depreciation and amortization expenses
were eliminated in the second quarter of 2000, then net income
available to common stockholders for the three months ended June
30, 2000 would have been $3,182,000.

For the six months ended June 30, 2001, revenues decreased
$21,735,000 to $38,975,000 from $60,710,000 for the six months
ended June 30, 2000. Rental revenues decreased $20,562,000
primarily as a result of asset sales completed since June of
2000, partially offset by an increase in rental revenues from
development and redevelopment properties being placed into
service. Management fee income decreased $803,000 as a result of
the termination of the Company's former joint venture with the
State of California Public Employees' Retirement System. Net
income (loss) available to common stockholders for the six
months ended June 30, 2001 was $6,651,000, as compared to a net
loss of $3,803,000 for the six months ended June 30, 2000. This
increase was primarily attributable to the Company not recording
depreciation and amortization expenses in 2001 subsequent to the
adoption of the liquidation basis of accounting on December 15,
2000. If, for comparison purposes, depreciation and amortization
expenses were eliminated for the first six months of 2000, then
net income available to common stockholders for the six months
ended June 30, 2000 would have been $9,590,000.

                  Funds From Operations

The Company has historically reported Funds From Operations
(FFO) because it is generally accepted in the real estate
investment trust (REIT) industry as a meaningful supplemental
measure of performance. However, because the Company is
liquidating, it no longer believes that FFO is meaningful to
understanding its performance and is therefore no longer
reporting FFO.

         Adjustment to Liquidation Basis of Accounting

As a result of the adoption of the Plan of Liquidation by the
Company's Board of Directors and its approval by the Company's
stockholders, the Company adopted the liquidation basis of
accounting for all periods subsequent to December 15, 2000.
Accordingly, on December 16, 2000, assets were adjusted to
estimated net realizable value and liabilities were adjusted to
estimated settlement amounts, including estimated costs
associated with carrying out the liquidation. The valuation of
real estate held for sale as of June 30, 2001 is based on
current contracts, estimates as determined by independent
appraisals or other indications of sales value. This valuation
is net of estimated selling costs, and capital expenditures of
approximately $14,742,000 anticipated during the liquidation
period. The net adjustment at December 16, 2000, required to
convert from the going concern (historical cost) basis to the
liquidation basis of accounting, amounted to a negative
adjustment of $85,228,000, which is included in the December 31,
2000 Consolidated Statement of Changes in Net Assets
(liquidation basis). Further adjustments were included in the
June 30, 2001 Consolidated Statement of Changes in Net Assets
(liquidation basis) to reflect additional capital expenditures
and lower than anticipated closing costs. Increases (decreases)
in the carrying value of net assets are summarized as follows:

                                                  Six
Months
                                                    Ended
                                                 June 30, 2001

Increase to reflect estimated net realizable
values of certain real estate properties              $60,000

Recognition of deferred gain upon sale of
certain properties                                  3,859,000

Decrease to reflect estimated net realizable
value of real estate                               (1,331,000)

Decrease to reflect net realizable value of
Investments in Unconsolidated Subsidiaries           (467,000)

Reserve for estimated costs during the period
of liquidation                                       (285,000)

Effect of minority interest on adjustment to
liquidation basis                                     397,000

Adjustment to reflect the change to liquidation
basis of accounting                                $2,233,000


Adjusting assets to estimated net realizable value resulted in
the write-up of certain real estate properties and the write-
down of other real estate properties. The anticipated gains
associated with the write-up of certain properties have been
deferred until their sales, and the anticipated losses
associated with the write-down of other certain properties have
been included in the Consolidated Statement of Changes of Net
Assets.

Under the liquidation basis of accounting, the Company is
required to estimate and accrue the costs associated with
executing the Plan of Liquidation. These amounts can vary
significantly due to, among other things, the timing and
realized proceeds from property sales, the costs of retaining
personnel and one or more trustees to oversee the liquidation,
including the cost of insurance, the timing and amounts
associated with discharging known and contingent liabilities and
the costs associated with cessation of the Company's operations.
These costs are estimates and are expected to be paid during the
liquidation period.

                         Dispositions

Since the adoption of the Plan of Liquidation by the Company's
Board of Directors in August 2000 through August 9, 2001, the
Company has sold 31 properties.

During the fourth quarter of 2000, the Company sold five
shopping centers and one office building. In October 2000, the
Company sold the Anacomp office building for approximately
$21,300,000. On December 5, 2000, the Company sold the Meridian
Village and San Diego Factory Outlet Center for an aggregate of
approximately $48,700,000. On December 29, 2000, the Company
sold La Mancha, the Plaza at Puente Hills and Valley Central
shopping center for an aggregate of approximately $109,900,000.
Meridian Village, San Diego Factory Outlet, La Mancha, the Plaza
at Puente Hills, and Valley Central represent a portion of a
portfolio of properties targeted for sale under an agreement
with The Prudential Insurance Company of America.

In February 2001, the Company sold the Puget Park and Cameron
Park shopping centers for approximately $18,953,000. In March
2001, the Company sold the Richmond shopping center for
approximately $10,381,000. These transactions also represent a
portion of a portfolio targeted for sale under the agreement
with Prudential.

On April 2, 2001, the Company sold a portfolio of 19 shopping
centers to Weingarten Realty for aggregate sales proceeds of
approximately $288,500,000.

On April 26, 2001, the Company sold the Downtown Pleasant Hill
shopping center for approximately $62,400,000. This transaction
also represents a portion of a portfolio targeted for sale under
the agreement with Prudential.

On May 17, 2001, the Company sold the Design Market center for
approximately $14,300,000.

On August 9, 2001, the Company sold Olympiad Plaza for
approximately $11,800,000. This transaction also represents a
portion of the portfolio targeted for sale under the agreement
with Prudential.

               Redemption of Preferred Equity

On April 3, 2001, the Company used approximately $126,000,000 of
the cash proceeds from the Weingarten sale to redeem all of the
outstanding shares of Series 2000-C Convertible Preferred Stock
and Series 1997-A Preferred Units of limited partnership
interest in Burnham Pacific Operating Partnership.

Burnham Pacific Properties, Inc. is a real estate investment
trust (REIT) that focuses on retail real estate. More
information on Burnham may be obtained by visiting the Company's
web site at http://www.burnhampacific.com


CALIBER LEARNING: Selling All Assets To Sylvan Learning
-------------------------------------------------------
Caliber Learning Network (OTC Bulletin Board: CLBRQ) announced
that it has asked the U.S. Bankruptcy Court to authorize a sale
of substantially all of its assets to Sylvan Learning Systems,
Inc. for $750,000 pursuant to an Asset Purchase Agreement dated
August 13, 2001. The sale is subject to Bankruptcy Court
approval and is further subject to higher and better offers
received pursuant to bidding procedures to be set by the Court.
If Caliber receives any higher and better offers from qualified
parties it has requested that it be allowed to conduct an
auction sale of the assets.

"Caliber continues to serve and satisfy clients, but the
business will require capital to maintain operations. In the
judgment of our Board of Directors, an auction sale now of the
operating assets of the business is the best way to preserve and
realize the going concern value of the company," said Glen M.
Marder, Caliber's president and CEO. "The terms provided by
Sylvan are fair and a very reasonable way to start the bidding
process. We look forward to discussing this opportunity with
interested buyers in the eLearning industry and others looking
at a strategic investment in online learning production and
delivery. Caliber has a proven technology platform and a
seasoned group of professionals to provide service."

           About Caliber Learning Network, Inc.

Caliber is a leading provider of eLearning infrastructure for
strategic corporate initiatives. Its interactive eLearning is
delivered either live or OnDemand directly to individual
workstations, anytime, anywhere or through a network of
classroom-style learning centers. Caliber enables Global 2000
companies to increase the reach and reduce the cost of
traditional training programs. For more information, visit
http://www.caliber.com


CHAPARRAL RESOURCES: Reports Q2 Losses and Shell Capital Waiver
---------------------------------------------------------------
Chaparral Resources, Inc. (OTC Bulletin Board: CHAR) announced
its financial results for the second quarter 2001 and the waiver
of Chaparral's recent delisting from the Nasdaq SmallCap Market
as an event of default under its loan agreement with Shell
Capital Inc.

Chaparral reported a loss of $1.44 million, or 11 cents per
share, for the quarter ended June 30, 2001. This compares to a
loss of $1.15 million, or $1.26 per share, for the quarter ended
June 30, 2000. The increase in Chaparral's net loss primarily
relates to the effect of SFAS 133, Accounting for Derivative
Instruments and Hedging Activities, which requires the
recognition of Chaparral's hedging activities at fair value. As
a result of the application of SFAS 133, Chaparral recognized a
loss of $278,000 during the quarter due to the decline in fair
value of its existing hedge contracts. Additionally, interest
and general and administrative costs increased during the
quarter due to enhanced efforts to finance and develop the
Karakuduk Field. As a result of these efforts, Chaparral
recognized additional equity income from its investment in
Karakuduk Munay, JSC ("KKM") due to KKM's significant increase
in the production and sale of crude oil compared to the same
period in 2000.

Chaparral's equity income from investment was $1.75 million for
the quarter ended June 30, 2001, compared to equity income of
$1.45 million for the quarter ended June 30, 2000. During the
second quarter 2001, KKM sold approximately 511,000 barrels of
crude oil, recognizing $7.59 million, or $14.86 per barrel, in
revenue net of transportation costs. Associated operating costs
were $1.23 million, or $2.41 per barrel. During the second
quarter 2000, KKM sold approximately 201,000 barrels of crude
oil, recognizing $3.48 million, or $17.33 per barrel, in revenue
net of transportation costs. Operating costs associated with
sales for the three months ended June 30, 2000 were $794,000, or
$3.95 per barrel.

Chaparral reported a loss of $5.66 million, or 41 cents per
share, for the six months ended June 30, 2001, compared to a
loss of $3.34 million, or $3.58 per share, for the six months
ended June 30, 2000. The $2.32 million increase in Chaparral's
net loss primarily relates to the cumulative effect of adoption
of SFAS 133 as of January 1, 2001, as well as the effect of
applying SFAS 133 during the subsequent period. Chaparral
recognized a loss of $2.52 million upon adoption of SFAS 133 and
additional losses totaling $765,000 due to the decline in fair
value of its hedge contracts during the six months ended June
30, 2001. Additionally, interest expense and general and
administrative costs were higher in comparison to the six months
ended June 30, 2000, due to increased borrowings under the Shell
Capital loan agreement and enhanced efforts to develop the
Karakuduk Field.

Chaparral's equity income from investment was $3.01 million for
the six months ended June 30, 2001, compared to equity income of
$865,000 for the six months ended June 30, 2000. During the
first half of 2001, KKM sold approximately 974,000 barrels of
crude oil, recognizing $14.21 million, or $14.59 per barrel, in
revenue net of transportation costs. Associated operating costs
were $2.50 million, or $2.56 per barrel. During the comparable
period in 2000, KKM sold approximately 201,000 barrels of crude
oil, recognizing $3.48 million, or $17.33 per barrel, in revenue
net of transportation costs. Operating costs associated with
sales for the six months ended June 30, 2000 were $794,000, or
$3.95 per barrel.

As previously reported, Chaparral's common stock was delisted
from the Nasdaq SmallCap Market on August 9, 2001, which is an
event of default under Chaparral's loan agreement with Shell
Capital. Shell Capital, however, has waived its requirement that
Chaparral's common stock be listed on one of the three major
stock exchanges (Nasdaq, NYSE, and Amex), subject to Chaparral
not incurring another event of default under the loan agreement.
Chaparral's common stock is being traded on the OTC Bulletin
Board.

Chaparral Resources, Inc. is an international oil and gas
exploration and production company. Chaparral participates in
the development of the Karakuduk Field through KKM of which
Chaparral is the operator. Chaparral owns a 50% beneficial
ownership interest in KKM with the other 50% ownership interest
being held by Kazakh companies, including KazakhOil, the
government-owned oil company.


COMDISCO INC.: Honoring Key Employee Compensation Agreements
------------------------------------------------------------
Comdisco, Inc. asks Judge Barliant for authority to continue
certain prepetition key employee compensation programs that will
cost Comdisco approximately $45,750,000.

Felicia Gerber Perlman, Esq., at Skadden Arps Slate Meagher &
Flom, in Chicago, explains that the Debtors' ability to maintain
their business operations and preserve the value of their assets
is dependent upon the continued employment, participation, and
dedication of the employees. However, Ms. Perlman says, the
uncertainty surrounding these Chapter 11 cases may lead to
employee resignations and reduction in morale. The Debtors
cannot afford to lose their employees, Ms. Perlman emphasizes.

Arthur Andersen LLP, the Debtors' financial advisor, evaluated
the Debtors' existing compensation system and then helped
develop the different Compensation Programs:

   (1) Retention Programs are designed to provide incentives for
       key employees to remain in the Debtors' employ throughout
       the pendency of these chapter 11 cases.

Retention Programs               Participants          Payments
------------------               ------------          --------
Key Employee Retention Program   900 employees       $19,750,000
Ventures Retention Program       5 key employees        $500,000

   (2) Incentive Programs are designed to provide incentive
       compensation to certain key employees tied to various
       performance-based criteria.

     (a) The Annual Incentive Plan is designed to focus employees
         on key business objectives as part of the Debtors'
         business plans. The Debtors' salaried employees can join
         this plan. All payments under this plan will be made in
         cash, with an estimated total of $12,000,000.

     (b) The Key Management Incentive Plan is designed to retain
         and reward key employees of the business units that are
         being sold, as well as certain staff group employees who
         support the business units. Approximately 50 employees
         are eligible to participate. All payments under this
         plan will be made in cash, with an estimated total of
         $7,500,000.

     (c) The Chairman's Discretionary Fund applies to any
         employees who work on critical projects and initiatives
         for the Debtors. The purpose of the Fund is to assure
         that bonus funds are available for all employees who
         provide such services. All payments from this $6,000,000
         Fund will be made in cash.

     (d) The Emergence Bonus Program applies to key management
         employees to reward them for the Debtors' successful
         emergence from chapter 11. All payments will be made in
         cash. The cost of the Program is to be determined.

   (3) Enhanced Severance Program is designed to ensure certain
       key employees that is their jobs are terminated, they will
       receive lump sum transition pay in consideration for
       deferring their job searches beyond that provided by the
       Debtors' regular severance program. Severance payments are
       made in cash, with $18,000 as the estimated average
       severance cost per employee.

Ms. Perlman asserts that the costs of the Compensation Programs
are more than justified by their benefits, including boosting
morale and discouraging resignations among key employees. The
Programs will also encourage employees to assist in retaining
the value of the Debtors' estates through the sale process, Ms.
Perlman adds.

If key employees leave their current jobs, Norman P. Blake, Jr.,
Comdisco's Chairman & CEO, emphasizes, the Debtors fear they
would not be able to attract replacement employees of comparable
characteristics.  The time and costs incurred in hiring
replacements for key employees, Mr. Blake is convinced, outweigh
the potential costs of payments made under the Compensation
Program.

In short, Ms. Perlman says, the continuation of the Compensation
Programs will significantly benefit the sales and reorganization
processes by boosting employee morale at the very time when
employee dedication and loyalty is needed most. (Comdisco
Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


CROWN CENTRAL: S&P Places Low-B Ratings on Credit Watch
-------------------------------------------------------
Standard & Poor's placed its single-'B'-plus corporate credit
and single-'B' senior unsecured debt ratings on Crown Central
Petroleum Corp. on CreditWatch with developing implications.

The CreditWatch listing follows the company's announcement that
it intends to sell its Pasadena, Texas refinery and that it may
also sell its Tyler, Texas refinery and its 13 product
terminals. Crown Central is contemplating these sales as part of
an effort to increase its focus on its 324-unit retail network
in the Mid-Atlantic and Southeastern states. Depending on the
outcome of the asset sales, if any, and the use of proceeds from
these sales, ratings may be affirmed, raised, or lowered.


CROWN VANTAGE: Soliciting Competing Bids for Ypsilanti Facility
---------------------------------------------------------------
Crown Vantage Inc. proposes to sell a manufacturing facility
located at 1000 N. Huron St., Ypsilanti, MI and all machinery
and equipment located thereon to Crown Vantage LLC for a
purchase price of $225,000. An auction will be held if qualified
bids are received. Qualified bidders must bid in $25,000
increments. There will be no hearing for entry of the sale order
unless there are objections filed requesting such a hearing. A
break-up fee of $18,000 was approved by the court.

Counsel for the debtors are Kim Martin Lewis, Tim J. Robinson
and Shaun K. Stuart of Dinsmore & Shohl LLP.


DELTA FINANCIAL: Posts $16.5 Million Net Loss In Second Quarter
--------------------------------------------------------------
Delta Financial Corporation (OTCBB:DLTO) announced results for
the second quarter ended June 30, 2001.

As expected, the Company reported a net loss of $16.5 million,
or $1.04 per share (basic and diluted), for the quarter ended
June 30, 2001, compared to a net loss of $3.5 million, or $0.22
per share (basic and diluted), for the quarter ended June 30,
2000. For the six months ended June 30, 2001, Delta reported a
net loss of $50.3 million, or $3.16 per share (basic and
diluted). This compares to a net loss of $1.7 million, or $0.11
per share, reported for the six months ended June 30, 2000. The
loss for the quarter ended June 30, 2001, resulted primarily
from non-recurring charges associated principally with (1) the
Company's disposition and transfer of its servicing platform to
Ocwen Financial Corporation in May 2001, (2) a change in
accounting estimates regarding the life expectancy of the
Company's computer-related equipment, and (3) costs associated
with our current debt exchange offer. The Company also recorded
a fair value adjustment to its non-performing mortgage loans,
which were sold in July 2001.

The net charge for non-recurring items for the second quarter of
2001 totaled $15.2 million on an after-tax basis, or $0.96 per
share.

The charges are primarily related to (1) the costs of
maintaining an unprofitable servicing platform until Delta
transferred it to Ocwen in May 2001, plus the associated costs
of transferring the servicing portfolio, totaling $10.7 million
on an after-tax basis, (2) a change in the useful life of
computer-related equipment from five years to three years
totaling $3.6 million on an after-tax basis, and (3) debt
restructuring costs associated with the Company's current debt
exchange offer totaling $0.9 million on an after-tax basis. In
addition, the Company recorded an $1.5 million charge related to
a fair value adjustment to a pool of non-performing loans that
the Company sold in July 2001.

"As anticipated, the results for the second quarter of 2001
primarily reflect the charges incurred in connection with our
overall corporate restructuring plan announced in March 2001. We
hope to complete our corporate restructuring during the third
quarter of 2001 if our exchange offer is successful, and expect
to record a loss (and commensurate reduction in our net worth)
during the quarter," said Hugh Miller, President and Chief
Executive Officer.

During the second quarter of 2001, the Company completed a $165
million securitization, utilizing a senior-subordinate
structure, which included a surety wrap credit enhancement on
the AAA rated securities. The Company sold its rights to service
the securitization mortgage loan pool to Ocwen for a cash
purchase price and also sold an interest-only certificate for
cash. In addition, the Company sold $20.7 million of mortgage
loans on a servicing-released basis for an aggregate cash
premium of 5.24%.

Loan originations for the second quarter of 2001 were $165.1
million compared to $170.7 million reported in the first quarter
of 2001 and $263.6 million reported in the second quarter of
2000. The decrease in origination volume was not unexpected, as
management continued to spend much of its efforts on the
corporate restructuring (i.e., disposition of servicing platform
and debt exchange offer). For the second quarter of 2001, broker
and retail originations each accounted for 50% of the Company's
overall loan production. This compares favorably to last quarter
where the broker and retail channels accounted for 62% and 38%
of total production, respectively. For the second quarter of
2000, broker and retail originations and correspondent purchases
represented 61%, 29% and 10% of total production, respectively.
The Company closed its correspondent division in the second
quarter of 2000.

As previously reported, on July 23, 2001, the Company launched
an exchange offer in which it is offering the holders of its
$150 million of 9 1/2% Senior Secured Notes and 9 1/2% Senior
Notes due August 2004 (collectively, the "Notes") an opportunity
to exchange their Notes for shares of the Company's newly issued
preferred stock and membership interests in a newly formed LLC,
to which the Company will transfer all of the mortgage-related
securities currently securing the senior secured notes. Cash
generated by the mortgage-related securities will be paid out to
the holders of the LLC membership interests. The exchange offer
will remain open until August 20, 2001. As part of the exchange
offer, all tendering Noteholders will waive their right to
receive the August 1st interest coupon. As such, the Company did
not make the coupon payment due on August 1, 2001, on the Notes.
The exchange offer is conditioned upon the Company receiving the
consent of holders of at least 95% of the Notes. If successful,
the exchange offer will eliminate substantially all of the
Company's long-term debt; if the exchange offer is not
consummated, the Company will likely default on its August 1st
interest payment.

Founded in 1982, Delta Financial Corporation is a Woodbury, New
York-based specialty consumer finance company engaged in
originating, securitizing and selling (and until May 2001,
servicing) non-conforming home equity loans. Delta's loans are
primarily secured by first mortgages on one- to four-family
residential properties. Delta originates home equity loans
primarily in 20 states. Loans are originated through a network
of approximately 1,500 brokers and the Company's retail offices.
Prior to July 1, 2000, loans were also purchased through a
network of approximately 120 correspondents. Since 1991, Delta
has sold approximately $6.7 billion of its mortgages through 29
AAA rated securitizations.


DENBURY RESOURCES: S&P Rates $75 Million Senior Sub Notes At B-
---------------------------------------------------------------
Standard & Poor's assigned its single-'B'-minus rating to
Denbury Resources Inc.'s $75 million series B senior
subordinated notes due 2008. Denbury plans to use the proceeds
from this offering to repay a majority of the debt borrowed
under its bank credit facility in connection with the July 2001
acquisition of Matrix Oil & Gas Inc. (not rated)

The outlook remains positive.

The ratings on Denbury reflect the challenges the company faces
as an independent oil and gas exploration and production company
with a small reserve base, a worse-than-average cost structure,
and an acquisitive growth strategy. These weaknesses are
partially offset by the company's high percentage of long-lived,
company-operated properties and moderately leveraged capital
structure.

Dallas, Texas-based Denbury follows an aggressive growth
strategy of acquiring and consolidating interests within its
core areas. Denbury owns and operates properties in Mississippi,
Louisiana, and the Gulf of Mexico, with a total proved developed
reserve base as of June 30, 2001 of 106.5 million of barrels of
oil equivalent (boe) (74% oil; 75% proved developed). The
company's working interests exceed 90% within its 11 operated
fields, which allows Denbury to have considerable control over
the magnitude and timing of capital expenditures. Denbury's
relatively low-risk drilling program and acquisition-related
growth are expected to raise production levels and materially
expand reserves at slightly higher-than-average finding costs.
(Denbury's three-year average all-in cost was $6.50 per boe.)
Based on Denbury's estimates, average daily production is
expected to average 31,900 boe per day, which is a 50% increase
over 2000, with natural gas accounting for about 50% of total
production when compared with about 40% in 2000. The increased
level of natural gas production, during a time of favorable
intermediate-term natural gas fundamentals, should slightly
mitigate Denbury's sensitivity to oil prices, as a large
percentage of Denbury's oil consists of low-grade crude oil that
sells at a $4.00 to $5.00 discount to West Texas Intermediate.
In addition, as a result of Denbury's increasing Gulf of Mexico
natural gas production, operating expenses are expected to
decrease to $4.90 per boe from $5.25 per boe. Denbury maintains
a relatively long reserve life of about nine years, as only
about 25% of Denbury's production is derived from the short-
lived offshore wells, which provides for some reinvestment
flexibility.

A heightened concern of Standard & Poor's is Denbury's recent
expansion into the Gulf of Mexico, where capital costs and
operating risks are elevated, property markets are intensely
competitive, and Denbury has a minimal operating history.
Although Denbury had a relatively small presence in the Gulf of
Mexico before the Matrix acquisition, Matrix has provided
Denbury with about 80 billion cubic feet equivalent (cfe) of
proved developed Gulf of Mexico reserves. A mitigating factor is
Denbury's retention of Matrix's management and technical team,
which has been successful at economically adding reserves in
this area.

In 2001, stronger-than-historical-average commodity prices
should cause near-term credit measures to remain reasonably
strong, even with the debt associated with the Matrix
acquisition (60% of the $163 million purchase price was funded
with debt). Moreover, risks associated with the relatively high
purchase price (about $2.07 per thousand cfe) and incremental
debt to finance the transaction has been diminished
substantially by the purchase of extensive price hedges. As a
result, Standard & Poor's anticipates that Denbury will reduce
total debt-to-total capital to less than 50%. Even with
low commodity prices, Denbury should be capable of delivering
EBITDA interest coverage of approximately 10 times and funds
from operations in excess of 55%. For the long term, as the
company's hedges expire and hydrocarbon prices eventually revert
to normalized levels, cash flow protection measures are likely
to weaken. Financial flexibility is provided by about $42
million available under its bank credit facility.

                      Outlook: Positive

The positive outlook reflects the possibility that the ratings
on Denbury may be raised as the company continues to expand
while maintaining moderate financial policies.


FINOVA GROUP: Court Grants GMAC Relief From Automatic Stay
----------------------------------------------------------
GMAC Commercial Credit LLC, formerly known as BNY Factoring LLC,
successor by merger to BNY Financial ("GMACCC"), sought and
obtained the Court's authorization for relief from the automatic
stay in the Chapter 11 proceedings of Finova Mezzanine Capital
Inc., pursuant to Sections 105 and 362 of the Bankruptcy Code,
to permit GMACCC to institute an adversary proceeding against
FNV Mezzanine to enjoin the alleged breach by the Debtor of the
Subordination Agreement between FNV Mezzanine and GMACCC. FNV
Mezzanine allegedly breached the Subordination Agreement by
filing an action in Tennessee state court against Trade Am to
collect overdue payments on its loan obligation, with knowledge
that Trade Am has not paid GMACCC's loan of $42,800,000.00 in
full and without GMACCC's consent. The Tennessee Action, GMACCC
tells Judge Walsh, contravenes the explicit terms of the
Subordination Agreement. Should FNV Mezzanine prevail in the
Tennessee Action, Trade Am is unable to pay a $4,000,000.00
judgment and the entry of such a judgment could result in
bankruptcy or other dismemberment of Trade Am, and incalculable
losses for GMACCC, GMACCC represents.

                  The Subordination Agreement

In seeking the relief, GMACCC relates to the Court the
background and certain details about the Subordination Agreement
as follows:

       The predecessor in interest of Finova Mezzanine Capital
Inc. f/k/a Sirrom Capital Corporation, lent the principal sum of
$4,000,000.00 to Trade Am International, Inc. in 1995. From its
inception, the FNV Mezzanine "loan" was considered a hybrid of
debt and equity (mezzanine financing). It was payable with
interest at 12.75%, plus an equity option that would enable FNV
Mezzanine to acquire 335,000 shares, or 6% of Trade Am's common
stock, at $.01 per share.

       That loan was subject to a subordination agreement in
favor of Citicorp., Trade Am's senior lender. Citicorp., Trade
Am's asset based lender prior to GMACCC, entered into a
$25,000,000.00 revolving loan with Trade Am secured by inventory
and accounts receivable.

       In 1998, GMACCC agreed to loan Trade Am $25,000,000.00 to
pay off the Citicorp loan. GMACCC's agreement was conditioned
upon FNV Mezzanine agreeing to subordinate its loan to GMACCC's
loan. Accordingly, FNV Mezzanine and GMACCC entered into a
Subordination Agreement dated September 29, 1998.

       On January 23, 2001, and in reliance on the Subordination
Agreement, GMACCC increased the revolving facility from
$25,000,000 to $36,000,000.00. On September 19, 1999, GMACCC
also extended two term loans totaling $12,500,000.00 to Trade
Am.

       GMACCC is currently owed approximately $42,800,000.00,
consisting of:

      (i)  $30,300,000.00 owed on the revolving facility; and
      (ii) $12,500,000.00 on the two term loans.

       The Subordination Agreement provides, in paragraph 17,
that the subordination extends up to $50,000,000.00 of Senior
Creditor Indebtedness which is defined as all present and future
indebtedness, together with interest, owed by Trade Am to
GMACCC.

GMACCC also draws Judge Walsh's attention to certain other
provisions of the Subordination Agreement:

Paragraph 6:

      (b) Notwithstanding anything to the contrary contained in
the Junior Creditor Documents:

           (i)  Until Senior Creditor notifies Junior Creditor by
certified mail. . .that Senior Creditor has exercised its right
to declare that all obligations of Trade Am due to Senior
Creditor ... have become immediately due and payable as a result
of a Default or Event of Default ... (the "Notice of
Acceleration"), Junior Creditor shall have no right to take any
action with respect to the Junior Creditor Indebtedness,
including, without limitation, declaring an event of default, or
accelerating the Junior Creditor Indebtedness; and

           (ii) Junior Creditor shall have no right to institute
any legal action or to otherwise attempt to enforce Junior
Creditor's rights with respect to the Junior Creditor
Indebtedness until 180 days after the Junior Creditor's receipt
of the Notice of Acceleration.

Paragraph 13:

      FNV Mezzanine "waive[d] any and all rights to ...(c)
commence any proceedings ... under any bankruptcy ...
reorganization ... or similar laws for arrangement of debts of
[Trade Am]; and/or (d) bring any action to contest the validity,
legality, enforceability, perfection, priority or avoidability
of any of the Senior Credit Indebtedness ..."

Paragraph 7:

      "Junior Creditor agrees that it will not ask for, demand,
sue for, take or receive from Debtor ... the whole or any part
of the Junior Creditor Indebtedness from any of the Senior
Creditor Collateral, unless and until all of the Senior Creditor
Indebtedness shall have been ... paid ..."

      "that the terms and provisions of this Agreement do not
violate any terms or provisions of any Junior Creditor
Documents; and to the extent that any of the terms or provisions
of this Agreement are inconsistent with any of the terms or
provisions of the Junior Creditor Documents, the provisions of
the Junior Credit Documents shall be deemed to have been
superseded by this Agreement."

Paragraph 16:

      The Subordination Agreement remains "in full force and
effect until all of the Senior Credit Indebtedness shall have
been fully, finally and indefeasibly paid in cash and all
financing arrangements and commitments between [Trade Am] and
Senior Creditor shall have been terminated."

Paragraph 27:

      The Subordination Agreement is to be governed and construed
in accordance with the substantive laws of the State of New
York.

Paragraph 28:

      "[E]ach party to this Agreement acknowledges that the
breach by it of any of the provisions of this Agreement is
likely to cause irreparable damage to the other party.
Therefore, the relief to which any party shall be entitled in
the event of any such breach or threatened breach shall include,
but not be limited to, a mandatory injunction for specific
performance, injunctive or other judicial relief to prevent a
violation of any of the provisions of this Agreement, damages
and any other relief to which it may be entitled at law or in
equity."

An Allonge:

         "This Secured Promissory Note is subject to the terms
and conditions of a Subordination Agreement dated September 29,
1998 by and among Sirrom Investments, Inc. Trade Am
International, Inc. and BNY Financial Corporation.

Thus, GMACCC says, the Promissory Note was expressly made
subject to the terms of the Subordination Agreement by the
attachment of an Allong, which as defined by Black's Law
Dictionary (Rev. 4th Ed.), is "a piece of paper annexed to a ...
promissory note, on which to write endorsements for which there
is no room on the instrument itself."

GMACCC tells the Court that no Notice of Acceleration was ever
sent by GMACCC to FNV Mezzanine under the terms of the
Subordination Agreement.

                     The Tennessee Action

On February 12, 200l, 23 days before filing its chapter 11
proceeding, FNV Mezzanine instituted the Tennessee Action.
Finova Mezzanine Capital Corporation, f/k/a Sirrom Capital
Corporation v. Trade Am International, Chancery Court for the
State of Tennessee 20th Judicial District, Davidson County, No.
01-476-T.

In the Tennessee Action, FNV Mezzanine alleges that Trade Am was
in default of the Loan Agreement and Promissory Note for failure
to make all payments of principal when due, and seeks judgment
in the amount of $4,000,000.00, together with interest,
attorney's fees and costs.

The Tennessee Action was removed to the United States District
Court for the Middle District of Tennessee, Nashville Division
on March 16, 2001. Trade Am has filed a motion to dismiss on the
bases: (i) that FNV Mezzanine brought the suit in violation of
the Subordination Agreement; and (ii) that pursuant to the
Subordination Agreement and Allonge, FNV Mezzanine's rights to
payment by Trade Am are subordinate to GMACCC, which is an
indispensable party FNV Mezzanine failed to join.

In opposition to Trade Am's motion to dismiss the Tennessee
Action, FNV Mezzanine argues, inter alia, that GMACCC "has no
legally protected interest in this suit [and that] no right of
[GMACCC] is affected by the present action."

GMACCC points out that,

      -- In the Tennessee Action, FNV Mezzanine failed to
disclose the existence of the Subordination Agreement or the
Allonge.

      -- FNV Mezzanine did not name GMACCC as a party and has
opposed Trade Am's stated position that the matter must be
dismissed if GMACCC is not joined.

      -- Employees of FNV Mezzanine have acknowledged to GMACCC:
(i) the existence of the Subordination Agreement; and (ii) that
the filing of the Tennessee Action violates the terms of that
agreement.

      -- FNV Mezzanine has taken the position in the Tennessee
Action that GMACCC is free to sue it if it chooses to do so.

                      The Proposed Plan

GMACCC tells the Court that FNV Mezzanine's Plan is wholly
incomplete and insufficient in that there is no specific
discussion of the Tennessee Action, the Subordination Agreement
or FNV Mezzanine's contracts and no discussion of the
ramification of GMACCC's potential claim which cannot be
estimated but likely to exceed $15,000,000.00. The Plan, GMACCC
notes, gives no information on FNV Mezzanine's ability to make
payment on other unsecured allowed claims.

                 Bases for the Relief Requested

GMACCC thus seeks relief from the automatic stay on the bases
that:

(1) By instituting the Tennessee Action and attempting to
     collect its indebtedness, FNV Mezzanine breached its
     obligations under the Subordination Agreement.

(2) Due to the unambiguous and explicit terms of the
     Subordination Agreement and the Allonge, GMACCC will prevail
     on the merits. Section 510(a) of the Bankruptcy Code
     explicitly requires enforcement of subordination agreements.

(3) The hardship to GMACCC greatly outweighs the hardship to FNV
     Mezzanine.

     GMACCC's money damage claim cannot be readily quantified and
     GMACCC would suffer irreparable harm if FNV Mezzanine is
     permitted to continue with the Tennessee Action. Before
     committing to extend loans to Trade Am totaling over
     $42,000,000.00, GMACCC insisted that FNV Mezzanine's
     $4,000,000.00 loan would, at all times relevant, remain
     unpaid and that no asset or value would go to FNV Mezzanine
     before GMACCC was repaid in full.

     If FNV Mezzanine is successful in obtaining a final judgment
     against Trade Am, Trade Am may be forced into bankruptcy, to
     sell-off assets, or even to cease operations. Therefore, to
     allow FNV Mezzanine to circumvent the agreed upon terms of
     the Subordination Agreement and the Allonge without allowing
     GMACCC an opportunity to assert its rights would greatly
     prejudice GMACCC.

     On the other hand, harm or prejudice would not result to FNV
     Mezzanine if the Tennessee Action is enjoined because it
     would leave FNV Mezzanine in the same position it agreed to
     be in under the Subordination Agreement. FNV Mezzanine
     received the benefit of GMACCC's agreement to loan monies to
     Trade Am because GMACCC's loan allowed Trade Am to continue
     operating; keeping Trade Am in business was the only way to
     ensure that FNV Mezzanine would ultimately be repaid its
     indebtedness by Trade Am.

     GMACCC seeks only to assert its rights under the
     Subordination Agreement and to maintain the status between
     the parties. GMACCC will not be collecting any judgment
     against FNV Mezzanine and FNV Mezzanine will only be
     required to live up to the explicit obligations of the
     Subordination Agreement.

     Moreover, if Trade Am had filed a Chapter 11 proceeding,
     pursuant to section 510(c) of the Bankruptcy Code, the
     Subordination Agreement would be enforceable against FNV
     Mezzanine.

(4) The equities clearly lie with GMACCC. FNV Mezzanine is in
     willful breach of the Subordination Agreement.

(5) GMACCC will not be adequately protected unless the automatic
     stay is lifted. Under New York law, injunctive relief is an
     appropriate remedy to prevent the type of irreparable injury
     as in this matter.

(6) FNV Mezzanine should not be allowed to use its bankruptcy
     proceeding to get more than they agreed to get if Trade Am
     defaulted.

(7) The parties agreed to injunctive relief, acknowledging that
     its breach would cause irreparable harm to GMACCC.

(8) The continued prosecution of the Tennessee Action is
     detrimental to the estate as FNV Mezzanine could incur a
     substantial claim which may easily exceed $15,000,000.00, to
     be paid 100% or reinstated under the proposed Plan.

(9) The continued breach of the Subordination Agreement causes
     additional expense and delay.

(10) Lifting the stay will have the benefit of judicial economy.

(11) FNV Mezzanine is a sophisticated lender.

                    The Court's Approval

With the consent of FINOVA Mezzanine Capital, Inc. (Debtor), the
Court ordered that, to the extent it is otherwise applicable,
the automatic stay is modified solely to permit GMACCC to file
and prosecute an adversary proceeding in the FINOVA cases
seeking injunctive relief against the Debtor. (Finova Bankruptcy
News, Issue No. 11; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


FOCAL COMM.: S&P Slashes Corporate Credit Rating To CC From B-
--------------------------------------------------------------
Standard & Poor's lowered its corporate credit rating on Focal
Communications Corp. to double-'C' from single-'B'-minus, and
lowered its senior unsecured debt rating to single-'C' from
triple-'C' and its senior secured bank loan rating to triple-
'C'-plus from single-'B'-minus. The ratings remain on
CreditWatch with negative implications, where they were
placed July 30, 2001.

The downgrade follows Focal's announcement that it has arranged
a debt for equity swap with several bondholders as part of a
comprehensive $430 million recapitalization. On completion of
the exchange offer, which requires shareholder and U.S.
antitrust approvals, the corporate credit rating will be lowered
to 'SD' and the senior unsecured debt rating will be lowered to
'D'. The rating action is predicated on the fact that the
bondholders will be receiving less than par as a result of the
exchange offer. Focal has arranged with several bondholders to
exchange about $280 million in principal amount of bonds for
receipt of about 35% of the fully diluted shares of Focal common
stock. This exchange results in the bondholders receiving about
44 cents on the dollar relative to the par value of the bonds
exchanged.

The $430 recapitalization includes:

      * A $150 million cash infusion from Madison Dearborn
        Partners LLC, Frontenac Co., and Battery Ventures;

      * An amendment of the senior bank credit facility
        permitting the recapitalization and providing $225
        million of borrowing capacity, subject to certain
        conditions; and

      * A reverse stock split of Focal's common shares.

Subsequent to the successful completion of the recapitalization,
Standard & Poor's will review the revised business plan to
determine the company's future rating.


FUTURELINK: Files For Chapter 11 Protection In S.D. New York
------------------------------------------------------------
FutureLink Corp. (Nasdaq:FTRL) announced that the company and
its wholly owned subsidiaries in the United States filed
voluntary petitions for relief under Chapter 11 of the U.S.
Bankruptcy Code with the U.S. Bankruptcy Court for the Southern
District of New York.

The bankruptcy filings exclude the company's Canadian and United
Kingdom operations, none of which seek Chapter 11 protection or
have commenced insolvency proceedings.

                    About FutureLink

FutureLink is a global leader in Information Technology
consulting and solutions offering integration, delivery,
management and maintenance of software applications for
organizations choosing to augment or outsource their current
information technology needs.

An integrator of server-based computing solutions in North
America, FutureLink integrates enterprise-wide software
applications that can be accessed from a centralized or remote
location.


FUTURELINK: Case Summary & List Of Unsecured Creditors
------------------------------------------------------
Lead Debtor: Futurelink Corporation
              2 South Pointe Drive
              Lake Forest, CA 92630

              f/k/a FutureLink Distribution Corp.
              f/k/a Core Ventures, Inc.
              f/k/a Core Mineral Recoveries, Inc.

Debtor affiliates filing separate chapter 11 petitions:

              FutureLink Micro Visions Corp.
              FutureLink VSI Corp
              FutureLink Async Corp.
              FutureLink Madison Corp.
              FutureLink Pleasanton Corp

Type of
Business:       Futurelink and its wholly-owned United States
                 subsidisries, FutureLink Micro Visions Corp.
                 ("Micro Visions"), FutureLink VSI Corp. ("VSI"),
                 FutureLink Async Corp. ("Async"), FutureLink
                 Madison Corp. ("Madison") and FutureLink
                 Pleasanton Corp. ("Pleasanton"), provide
                 expertise in server-based computing, information
                 security, data communications management,
                 technical staffing, and other related services.
                 The Debtors deliver information technology
                 ("IT") solutions for its customers who choose to
                 outsource or augment all or part of their IT
                 needs. The Debtors may also provide professional
                 services to their customers, including
                 consulting, planning and designing the
                 customer's IT solutions, training IT
                 professionals, and installing and integrating
                 hardware and software applications, on an hourly
                 rate, daily rate or project-by-project basis
                 depending upon the length and type of services
                 required.

Chapter 11 Petition Date: August 14, 2001

Court: Southern District of New York (Manhattan)

Bankruptcy Case Nos.: 01-14543 through 01-14548

Debtors' Counsel: Peter D. Wolfson, Esq.
                   Sonnenschein Nath & Rosen
                   1221 Avenue of the Americas
                   New York, NY 10020-1089
                   Tel: (212) 758-6700
                   Fax: (212) 768-6800
                   Email: pwolfson@sonnenschein.com


Financials & List Of Unsecured Creditors:

A. Futurelink Corporation

    Total Assets: $ 126,399,678

    Total Debts: $ 16,920,968

    20 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Aetna US Healthcare           Trade Debt            $221,416

Woodruff-Sawyer & Co.         Trade Debt            $191,806

Bowne of Los Angels, Inc.     Trade Debt            $188,011

GATX Technology Services      Trade Debt            $144,280

Transamerica Business Credit  Contract              $127,539

Olen Commercial Realty Corp.  Contract              $123,102

American Express              Trade Debt            $108,198

William M. Mercer             Trade Debt             $92,981

McDermott, Will & Emery       Trade Debt             $86,081

AT&T                          Trade Debt             $70,841

Sharon Kelly                  Trade Debt             $62,196

Gill Company                  Trade Debt             $49,838

ADP Investor                  Trade Debt             $43,788
Communications

Metropolitan Life             Trade Debt             $42,810

The Network of City           Trade Debt             $42,787

Pacific Bell                  Trade Debt             $37,543

Brownlee Fryett               Trade Debt             $35,305

NASDAQ Stock Market           Trade Debt             $32,625

Benes Brand Imaging Group     Trade Debt             $31,666

American Express              Trade Debt             $30,512


B. FutureLink Madison Corp.

    Total Assets: $ 4,168,980

    Total Debts: $ 7,020,341

    20 Largest Unsecured Creditors:

Entity                              Claim Amount
------                              ------------
RSA Security, Inc.                   $2,094,547
20 Crosby Drive
Bedford, MA
Gail Rudy
Tel: 800.732.8743
Ext. 5121

Verisign, Inc.                         $453,843
3740 Da Vinci Court
3rd Floor
Norcross, GA 60675-1689
John Zaro Credit
650.429.5315
650.429.3396

Tara Flynn                             $259,957
1693 Ear Street
Union, NJ 07083

UCSI                                   $153,348

Alternative Technology, Inc.           $144,297

CIBC World Markets                     $136,739

CSF Solutions Limited                   $82,657

INGRAM MICRO                            $81,100

Westcon, Inc.                           $68,331

Wyse Technology                         $40,997

Check Point Software                    $34,287

Technology Rainfinity Corp              $29,750

Recruitmax Software                     $26,281

Aleton Web Systems                      $18,435

Aladdin Knowledge System, Inc.          $17,933

Security Trust Company                  $16,004

Netscreen Technologies, Inc.            $15,030

Stone Soft                              $14,483

CTI Professional, Inc.                  $12,483


C. FutureLink Async Corp.

    Total Assets: $ 732,467

    Total Debts: $ 1,822,558

    20 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Alternative Technology,       Trade Debt             $347,192
Inc.
7800 E ILiFF Avenue, Suite E
Denver, CO 80231
Jerry Wilson
303.337.2680

Ingram Micro                  Trade Debt             $279,085
P.O. Box 98874
Chicago, IL 60693-8874
Cheryl Ballo
716.633.3600

UCSI Distribution             Trade Debt             $144,280

Arrow Electronics             Trade Debt             $132,093

Dell Marketing L.P.           Trade Debt              $79,417

Tech Data Corporation         Trade Debt              $42,009

Intel Corporation             Trade Debt              $21,689

Sitara Networks               Trade Debt              $18,534

Westcon                       Trade Debt              $14,575

J.F. Glaser Incorporated      Trade Debt              $14,403

Brooktrout Technology         Trade Debt              $12,420

Commerce Place LLC            Contract                $10,167

EDS Client Server Group       Trade Debt               $8,876

Progressive Printing          Trade Debt               $8,515

Anthem Alliance Health        Trade Debt               $8,087

Security Trust Company        Contract                 $5,689

RSA Security, Inc.            Trade Debt               $5,659

Intelligent Computer          Trade Debt               $4,524

Solutions American            Trade Debt               $4,314
Express

AMCO                          Trade Debt               $3,379


D. FutureLink Pleasanton Corp.

    Total Assets: $ 263,032

    Total Debts: $ 219,173

    20 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Tech Data                     Trade Debt               $71,462

Alternative Technology        Trade Debt               $60,033

Ingram Micro                  Trade Debt               $59,359

UCSI                          Trade Debt               $46,493

Cranbrook Realty Investment   Contract                 $17,249
d/b/a Las Positas Office
Plaza

Dell Marketing L.P.           Trade Debt               $21,223

James Tong                    Contract                 $16,218

Alternative Courseware        Trade Debt               $11,624

Unite E                       Contract                  $6,888

Microtek Computer Labs        Trade Debt                $6,575

CPAC Computers, Inc.          Trade Debt                $6,007

Voice Pro                     Trade Debt                $4,626

Comstor                       Trade Debt                $3,906

Prometrtic                    Trade Debt                $3,800

Slyvan Protemic               Trade Debt                $3,800

WatchGuard Technologies,      Trade Debt                $2,994
Inc.

Gates Arrow                   Trade Debt                $2,898

AT&T                          Trade Debt                $2,273

Pacific Bell                  Trade Debt                $2,203

Sharon Hutchins               Employee                  $2,184


E. FutureLink VSI Corp

    Total Assets: $ 2,061,855

    Total Debts: $ 1,931,125

    20 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Ingram Micro                  Trade Debt              $742,530
P.O. Box 65610
Charlotte, NC 28265
Attn: Accts Payable
Kim Howard
800.456.80000

OXKO Corporation              Trade Debt              $402,473
175 Admiral Cochran Drive
Annapolis, MD 21401
Karie Hayes
410.266.1671

Tech Data Corp.               Trade Debt              $197,280

UCSI Distribution             Trade Debt              $180,138

Netier                        Trade Debt              $159,506

Alternative Tech.             Trade Debt              $155,576

PC Connection                 Trade Debt              $123,685

EMC                           Contract                 $97,399

Tricerat                      Trade Debt               $46,578

Compaq Federal LLC            Trade Debt               $39,526

Network Visions, Inc.         Trade Debt               $38,805

Security Trust Company        Contract                 $26,804

Konterra Realty LLC           Contract                 $19,054

Alto Consulting & Training    Trade Debt               $18,798

Capital Computer Corp.        Trade Debt               $17,968

CDW Computer Centers Inc.     Trade Debt               $17,520

Expand Network Inc.           Trade Debt               $14,847

LXE                           Trade Debt               $13,047

Merisel                       Trade Debt               $12,698

NETREALTY                     Contract                  $9,995


F. FutureLink Micro Visions Corp

    Total Assets: $ 19,739

    Total Debts: $ 56,668,562

    20 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Compaq Financial Services     Trade Debt             $1,233,943
P.O. Box 530263
Atlanta, GA 30353-0263
Ms. Amy Hall
408-205-9323

Fleet Business Credit Corp.   Trade Debt              $550,503
135 S. LaSalle Dept 8210
Chicago, IL 60674-8210
Maurice Sugera
800.333-1919

NETG                          Trade Debt              $410,000
National Education
Training Group
P.O. Box 75635
Chicago, IL 60675 - 5638
Maria Luna
800.265.1900

Dell Computer Corporation     Trade Debt              $320,554
P.O. Box 21022
Pasadena, CA 91185-1022
Scott Sharp
800-274-3355

DE LAGE LANDEN                Contract                $246,784
FINANCIAL SERVICES

Citrix Systems, Inc.          Trade Debt              $246,699

Wyse Tech Inc.                Trade Debt              $185,165
(Netier Technologies)

Alternative Technology        Trade Debt              $181,156

Microsoft Services            Contract/Trade          $134,015

CSC Conoco                    Trade Debt              $125,400

Exodus Communications,        Trade Debt              $119,221
Inc.

Ingram Micro                  Trade Debt               $91,009

Irish Communications Party    Trade Debt               $73,056

Hewlett-Packard Company       Contract                 $64,179

Compel                        Trade Debt               $60,453

Gates/Arrow Distribution      Trade Debt               $46,161

Data General , Div of         Trade Debt               $43,174
EMC Corp.

Concord Communications        Trade Debt               $34,003

EMC Corporation               Trade Debt               $29,333

Danbrue Wire & Electric       Trade Debt               $17,187

Gartner Group, Inc.           Trade Debt               $17,000


GENESIS HEALTH: First Union & Goldman Extend $415MM Exit Loan
-------------------------------------------------------------
Genesis Health Ventures, Inc. & The Multicare Companies, Inc.
anticipate that they will require Exit Facility Financing in the
aggregate amount of $415 million because:

     (a) on the Effective Date the Administrative Expense Claims
         and the amounts outstanding under the Genesis DIP Credit
         Agreement and the Multicare DIP Credit Agreement will
         aggregate $235 million;

     (b) they need a working line of credit in the amount of $125
         million and

     (c) they need $55 million to fund acquisitions contemplated
         before or upon emergence.

In connection with this, Genesis sought and obtained the Court's
approval to enter into an agreement (the "Work Fee Letter") with
First Union National Bank, First Union Securities, Inc.
("FUSI"), and Goldman Sachs Credit Partners, L.P. ("GSCP"). In
addition, Genesis has asked FUSI and GSCP to act as the Lead
Arrangers for the Exit Financing.

As a result of efforts pursuant to the agreement, a proposed
Exit Financing has been structured by the Lead Arrangers. The
Debtors and the Lead Arrangers have negotiated:

(1) a Commitment Letter, including a term sheet for the proposed
     Exit Financing,

(2) a Structuring Fee Letter agreement which sets forth the
     fees, expenses, and other charges in connection with
     structuring the Exit Financing,

(3) an underwriting fee letter agreement which sets forth an
     underwriting fee in connection with the Exit Financing, and

(4) an Administration Fee Letter agreement which sets forth an
     administration fee payable to First Union to act as
     administrative agent with respect to the Exit Financing.

The Commitment Letter, Structuring Fee Letter, Underwriting Fee
Letter and the Administration Fee Letter, are collectively the
"Commitment Letters". These have been executed but are not
effective unless and until approved by the Court.

The major elements of the Commitment Letters and the proposed
Exit Financing are summarized below:

(A) Facility

    The Exit Financing of $415 million will consist of the
    following facilities:

    (1) a $125,000,000 (plus an additional $25,000,000 depending
        on investor demand) revolving line of credit (the
        "Revolver");

    (2) a $235,000,000 term loan ("Term Loan B"); and

    (3) a $55,000,000 Delayed Draw Term Loan.

(B) Interest Rate

    At the option of the Debtors, the Facility will bear interest
    at a base rate plus a margin or LIBOR plus a margin. The base
    rate will be the higher of the Agent's prime rate or the
    overnight federal funds rate plus 0.50%. The margin for Term
    Loan B and the Delayed Draw Term Loan will be 2.75% over the
    base rate or 3.25% over LIBOR. The margin for the Revolver
    will be 2.25% over the base rate or 3.25% over LIBOR for the
    first six months of the Facility and will vary thereafter
    depending on the overall leverage of the Debtors.

(C) Guarantors

    All obligations of the borrower under the Facility will be
    unconditionally guaranteed by substantially all the direct
    and indirect subsidiaries of Genesis and Multicare.

(D) Collateral

    The Facility will be secured by substantially all the assets
    of Genesis and each guarantor.

(E) Mandatory Prepayment

    The Facility is subject to mandatory prepayment from excess
    cash flow, proceeds from certain insurance payments, net
    proceeds from certain asset sales, and a portion of the net
    proceeds of future issuances of new equity and debt.

(F) Conditions Precedent

    Funding of the Facility is subject to standard conditions
    precedent, such as execution of definitive documentation, as
    well as the consummation of the Plan and the merger of
    Genesis and Multicare.

(G) Covenants, Events of Default

    The Exit Financing will contain customary affirmative and
    negative covenants, financial covenants, and events of
    default.

(H) Commitment Fee

    A quarterly commitment fee will be payable at a rate ranging
    from 0.50% to 1.00% of the unused portion of the Revolver
    depending on the percentage of usage. The Delayed Draw Term
    Loan will have a commitment fee of 3.75% until the funding
    (or termination of the commitment) for such amount.

In connection with the Commitment Letters, the Genesis Debtors
will pay fees, expenses, and other charges including:

(a) Structuring Fee

    -- Three quarters of one percent (0.75%) of the aggregate
       amount of the Facility, of which $2,000,000 is payable on
       the approval by the Court of this Motion, and the balance
       at the initial drawdown of the Facility.

(b) Underwriting Fee

    One and a half percent (1.50%) of the aggregate amount of the
    Facility, of which twenty five percent (25%) is payable to
    the Lead Arrangers as necessary to obtain commitments from
    syndicate members at the time such commitments are obtained,
    and the balance is payable at the initial drawdown of the
    Facility.

(c) Ticking Fees

    One half of one percent (0.50%) per annum on each of First
    Union's and GSCP's committed portion of the Facility,
    beginning to accrue on the effective date of the Commitment
    Letter and continue until the earlier of the funding of the
    Facility and the termination of the Commitment Letter. This
    fee is payable at the initial drawdown of the Facility.

(d) Termination Fee

    In the event Genesis obtains alternative financing within
    twenty-four months of the effective date of the Commitment
    Letters, First Union and GSCP each will be entitled to
    receive $2,593,750 ($5,187,500 in the aggregate).

(e) Administration Fee

    An administration fee of $250,000 per annum, payable to First
    Union in advance with the first payment due on the initial
    drawdown of the Facility.

Approximately $100,000 of the amount Genesis paid pursuant to
the Work Fee Letter will be credited by the Lead Arrangers for
fees due under the Commitment Letters. The Debtors estimate that
the fees and expenses to be paid in connection with the
Commitment Letters will aggregate approximately $10,000,000 by
the initial drawdown of the Facility, and an additional
$2,000,000 during the first year of usage of the Facility.

In addition, the Commitment Letter requires standard
indemnification of the Lead Arrangers by the Debtors, including
reimbursement of reasonable out-of-pocket expenses incurred in
connection with the Facility, such as expenses for the due
diligence investigation, syndication and travel, and fees and
disbursements of outside counsel.

                          *   *   *

The Debtors represent that a sound business purpose exists for
entering into the Commitment Letters and to pay the Required
Fees, Expenses and Deposits.

To complete the plan process, which is in its final stages, the
Genesis Debtors and the Multicare Debtors need to arrange for
financing to provide for the requirements.

In their business judgment and after extensive review, the
Debtors believe that the terms and conditions of the Commitment
Letters are fair and reasonable. These were negotiated by the
parties in good faith, at arm's length, the Debtors submit.
Moreover, the fees represents less than 2.5% of the total
Facility on drawdown and is in line with current market
conditions for loan facilities of this type.

To ensure that the Debtors will have the required exit financing
facility and that the closing of that facility occurs in a
timely manner, the Lead Arrangers must complete their due
diligence process. By its own terms, the Commitment Letter will
terminate on August 10, 2001, unless the Debtors obtain Court
approval therefor on or before such date.

Accordingly, pursuant to section 363(b)(l) of the Bankruptcy
Code and Rule 6004 of the Federal Rules of Bankruptcy Procedure,
the Debtors request authorization to

(a) execute the Commitment Letters,

(b) pay the fees, expenses, and deposits required under the
     Commitment Letters, and

(c) perform their obligations thereunder.

A hearing date of August 2, 2001 was set only in the event of
objections by August 2, 2001. No objections have been docketed.
(Genesis/Multicare Bankruptcy News, Issue No. 12; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


GENESIS HEALTH: Reports Third Quarter Fiscal 2001 Results
---------------------------------------------------------
Genesis Health Ventures, Inc. (OTCBB:GHVIQ.OB) announced results
for the third quarter of fiscal 2001 concurrently with the
filing of its Form 10-Q.

For the three and nine months ended June 30, 2001 revenues were
$650.7 million and $1.91 billion, respectively.

For the quarter ended June 30, 2001, earnings before interest,
taxes, depreciation and amortization (EBITDA) and excluding
$20.0 million of debt restructuring, reorganization costs and
other charges, were $54.9 million.

For the nine months ended June 30, 2001, EBITDA excluding $48.2
million of debt restructuring, reorganization costs and other
charges and a net loss of $0.5 million on the sale of two
eldercare centers were $150.9 million.

For the three and nine months ended June 30, 2001, loss
attributed to common shareholders was $28.3 million ($0.58 per
share) and $97.8 million ($2.01 per share), respectively.

"Our EBITDA excluding debt restructuring, reorganization costs
and other charges for the three months ended June 30, 2001
increased approximately $9.6 million over the three months ended
March 31, 2001 and are reflective of increased Medicare payment
rates and improved performance by NeighborCare," commented
George V. Hager, Jr., Executive Vice President and Chief
Financial Officer. "The organization remains focused on
maximizing cash flow as we move through our financial
restructuring under Chapter 11", stated Hager.

Genesis Health Ventures, a debtor-in-possession, provides
eldercare in the eastern United States through a network of
Genesis ElderCare skilled nursing and assisted living centers
plus long-term care support services nationwide including
pharmacy, medical equipment and supplies, rehabilitation, group
purchasing, consulting and facility management.


GENESIS HEALTH: Multicare Releases Third Quarter 2001 Results
-------------------------------------------------------------
Genesis ElderCare Corp., (OTCBB:GHVIQ.OB) the joint venture that
owns The Multicare Companies, Inc., announced results for the
third quarter of fiscal 2001 concurrently with the filing of its
Form 10-Q.

For the three and nine months ended June 30, 2001, revenues were
$161.4 million and $480.7 million, respectively.

For the quarter ended June 30, 2001, earnings before interest,
taxes, depreciation and amortization (EBITDA) and excluding $4.3
million of debt restructuring, reorganization costs and other
charges, were $9.4 million.

For the nine months ended June 30, 2001, EBITDA excluding $12.2
million of debt restructuring, reorganization costs and other
charges, and a loss of $2.3 million on the sale of an eldercare
center were $27.5 million.

For the three and nine months ended June 30, 2001, net loss was
$4.0 million and $15.2 million, respectively.

"Our EBITDA excluding debt restructuring, reorganization costs
and other charges for the three months ended June 30, 2001
increased approximately $1.7 million over the three months ended
March 31, 2001 and are reflective of increased Medicare payment
rates", commented George V. Hager, Jr., Executive Vice President
and Chief Financial Officer. "The organization remains focused
on maximizing cash flow as move through our financial
restructuring under Chapter 11", stated Hager.

Multicare, a debtor-in-possession, is a 43.6% owned consolidated
subsidiary of Genesis Health Ventures, Inc. for financial
reporting purposes and is managed by Genesis. Multicare provides
eldercare services in the eastern and mid-western United States
through skilled nursing and assisted living centers.


GLOBAL CROSSING: Ratings On Watch With Negative Implications
------------------------------------------------------------
Standard & Poor's placed its ratings on Global Crossing Ltd. and
its wholly owned subsidiary Global Crossing Holdings Ltd. on
CreditWatch with negative implications (see list below). The
CreditWatch placement is based on the company's revised revenue
and EBITDA guidance for 2001 and the uncertain impact on cash
flow measures from further weakening in the economy.

At the same time, Standard & Poor's affirmed its ratings on Asia
Global Crossing Ltd. (see list), an unrestricted subsidiary in
which Global Crossing Ltd. has a 56.7% economic interest. These
rating were affirmed because of Asia Global Crossing's continued
growth in revenue and cash flow, as stated in its second quarter
2001 results, and increased guidance for 2001.

As of June 30, 2001, Global Crossing's total debt outstanding
was about $6 billion.

Global Crossing's second quarter 2001 total cash revenue was
essentially flat with the first quarter, a factor attributable
to a decline in revenue from the company's Marine Systems
Division and weakness in the carrier data service segment, but
offset by growth in commercial revenue. Total carrier cash
revenue, which comprises about two-thirds of total cash revenue,
was also flat, primarily due to the loss of carrier data
customers resulting from bankruptcies and disconnections. On the
other hand, commercial cash revenue, which represents recurring
revenue from enterprise customers, increased 9% compared with
the first quarter due to some new contracts. However, the full
year 2001 growth rate for commercial service revenue is expected
to be lower than previously anticipated due to the weakened
economic environment.

The company's revised guidance for 2001 has overall cash revenue
in the $6.4 billion to $6.9 billion range from the previous $7.1
billion to $7.3 billion range, and adjusted EBITDA is in the
$1.6 billion to $2.0 billion range from the previous $2.0
billion to $2.1 billion range. In addition, 2001 capital
expenditures were reduced to less than $4.5 billion from about
$5.0 billion. Despite the revised guidance, Global Crossing has
a solid liquidity position, with a cash balance of $2.0 billion
and $1.7 billion available under its secured bank facility.

To resolve the CreditWatch listing, Standard & Poor's will meet
with management to review its revised business plan and assess
the further impact of the slowing economy on the company's cash
flow measures.

         Ratings Placed On CreditWatch With Negative Implications

      Global Crossing Ltd.                            Rating
        Corporate credit rating                       BB+
        Preferred stock                               B+
      Global Crossing Holdings Ltd.
        Corporate credit rating                       BB+
        Senior unsecured debt                         BB
        Senior secured bank loan                      BBB-
        Preferred stock                               B+
      Frontier Corp.
        Corporate credit rating                       BB+/B
        Senior unsecured debt                         BB
        Preferred stock                               B+


                            Ratings Affirmed

      Asia Global Crossing Ltd.
        Corporate credit rating                     BB-/Stable/--
        Senior unsecured debt                         B+


GRANITE BROADCASTING: S&P Junks Ratings, Outlook Is Negative
------------------------------------------------------------
Standard & Poor's lowered its ratings on Granite Broadcasting
Corp.  The current outlook is negative.

The downgrade is based on Granite's tightening liquidity and
increasing financial risk. The advertising downturn, which is
deeper than had been anticipated, is hurting results at the
company's developing large market stations and its historically
more stable major network affiliates in medium-and small-size
markets. Granite is in the process of amending its senior
secured credit facility in order to avoid potential covenant
violations on Sept. 30, 2001.

Granite's independent San Jose VHF station KNTV will become the
NBC Television Network affiliate for the San Francisco market in
January 2002, at which time the company expects substantial cash
flow improvement. Prior to the change, the station is producing
EBITDA losses as it increases news spending in anticipation of
its pending network status. In addition to the challenges in San
Jose, the company's San Francisco UHF WB Network affiliate is
not profitable and the Detroit UHF WB station contributes only
minimal cash flow. Granite's major network affiliates in smaller
markets had been expected to provide a base of cash flow prior
to KNTV's NBC affiliation. However, reduced overall advertising
demand and the absence of political ad spending this year have
resulted in cash flow declines at these stations. In addition,
Granite's Buffalo station, its largest cash flow generator and
the historical market leader, is experiencing increased
competition.

Ratings on Granite reflect very high financial risk from debt-
financed TV station acquisition activity, an expensive capital
structure, a prolonged development period at startup stations,
weak cash flow, revenue concentration in the San Francisco
market and the mature growth of TV broadcasting. Tempering
factors include access to large market TV revenues, potential
operating benefits of the pending NBC affiliation, good
discretionary cash flow generation capability of the business
and station asset values.

Granite owns a modest portfolio of nine TV stations reaching
6.3% of U.S. households through eight markets ranked between
five and 132. Granite's medium-and small-size market stations
are VHF and are affiliated with the ABC, CBS, and NBC Television
Networks.

Granite's EBITDA margin for the 12 month period ended June 30,
2001, was very weak at about 5%. Interest coverage was minimal
at 0.2 times (x) and coverage of interest plus non-cash debt-
like preferred dividends was 0.1x. Debt divided by EBITDA was
excessively high at 65x and debt plus debt-like preferred stock
divided by EBITDA was more than 100x. Granite produces
discretionary cash flow deficits and its only liquidity is from
an Aug. 7, 2001 $58 million cash balance. NBC affiliation in San
Jose should lead to credit measure improvement; however, Granite
will face increasing pressure to refinance its high cost bank
loan and its debt-like preferred stock that becomes cash pay in
October 2002. The company also must meet a January 2003 $37
million NBC affiliation payment.

                    OUTLOOK: NEGATIVE

Operational and credit measure improvement from the pending NBC
affiliation will be important to stabilizing the ratings.
Factors that may lead to a downgrade could include difficulties
in executing the NBC affiliation strategy, prolonged advertising
weakness, or a lack of access to external capital on reasonable
terms.

                          RATINGS LOWERED
                                                      Ratings
      Granite Broadcasting Corp.                  To       From
         Corporate credit rating                  CCC+      B-
         Senior secured bank loan rating          CCC+      B-
         Subordinated debt                        CCC-      CCC
         Preferred stock rating                   CC        CCC-


HEARME: Shares Kicked Off Nasdaq, Now Trades On OTCBB
-----------------------------------------------------
HearMe (Nasdaq:HEAR) announced that its common stock has been
delisted from the Nasdaq National Market but will be eligible to
trade on the Over-the-Counter (OTC) Bulletin Board effective
upon the opening of business on August 15, 2001. In connection
with trading on the OTC Bulletin Board, the Company expects that
its trading symbol will be HEAR.OB.

On July 30, 2001, HearMe announced plans for an orderly wind
down of business operations. As part of the wind down efforts,
the Company recently announced that it would not pursue a 10-
for-1 reverse stock split and that it would withdraw its request
for review of a NASD staff determination to discontinue trading
of the Company's common stock on the Nasdaq National Market
based on the Company's minimum bid price.

HearMe does not expect the move to the OTC Bulletin Board to
have any impact on its day-to-day operations. The Company's
Board of Directors is currently in the process of reviewing a
wind down plan which, upon approval, will be presented for
stockholder vote.

                     About HearMe

HearMe (Nasdaq:HEAR) develops VoIP application technologies that
deliver increased productivity and flexibility in communication
via next generation communications networks. The Company's PC-
to-phone, phone-to-phone, and PC-to-PC VoIP application platform
offers innovative technology and turnkey applications that
simplify the process of bringing differentiated, enhanced
communications services to market. Communications services
supported or enhanced by HearMe technology include VoIP-based
conferencing, VoIP Calling, and VoIP-enabled customer
relationship management (CRM). Founded in 1995, HearMe is
located in Mountain View, Calif., and is located on the Internet
at http://www.hearme.com


HOTEL SYRACUSE: Files for Chapter 11 Protection
-----------------------------------------------
Valdor Fiber Optics Inc. (CDNX: VFO) announces that the Hotel
Syracuse, Inc. ("HIS"), a wholly owned subsidiary, has filed for
reorganization pursuant to Chapter 11 of the United States
Bankruptcy Code in order to restructure the finances of the
Hotel and to explore other alternatives for refinancing and/or
the potential sale of the hotel. HIS will continue its
negotiations with prospective purchasers, subject to court
approval of any purchase and sale agreement which may be entered
into. The Hotel will remain fully operational during the Chapter
11 proceedings.

Management also wishes to advise that Evelyn Bernier and Jane
Feguson have tendered their resignations from the Board of
Valdor and Claude Depery has been appointed to the Board. Mr.
Depery, a resident of France, is a principal of La Precision, a
large manufacturer of micro machined parts for fiber optics
assemblies.


iASIAWORKS: May File For Bankruptcy If Debt Restructuring Fails
---------------------------------------------------------------
iAsiaWorks(TM), Inc. (Nasdaq:IAWK), a provider of co-location
services in Taiwan and Korea, reported revenues for the second
quarter of 2001 of US$7.8 million, a 67 percent increase over
the second quarter of 2000, but a decrease from $9.4 million in
the first quarter of 2001.

The Company recorded non-recurring restructuring charges of
$60.2 million for the second quarter of 2001 as a result of
refocusing the scope and geographic reach of its business
activities. These charges included $55.1 million related to the
impairment of long-lived assets in Taiwan, Korea, Hong Kong and
the United States. In addition, the Company also recorded a
charge of $20.5 million related to goodwill impairment as a
result of entering into voluntary liquidation of its Hong Kong
subsidiary on July 3. Due to the liquidation of the Hong Kong
subsidiary, the Company's prospective revenues and expenses will
be significantly lower.

The Company had an adjusted net loss of ($16.5) million for the
second quarter of 2001 (excluding the impact of depreciation,
amortization of goodwill, stock-based compensation and non-
recurring operating expenses). This compares to an adjusted net
loss of ($15.9) million in the first quarter of 2001.

Net loss for the second quarter of 2001 was ($103.0) million, or
($2.59) per share. This compares to a net loss for the first
quarter of 2001 of ($34.6) million, or ($0.87) per share.

Jon Beizer, iAsiaWorks' CEO commented, "As we have reported for
the last three quarters, iAsiaWorks has been actively pursuing
new financing. At the end of last quarter, we stated that we
needed approximately $60M to fully fund our business plan.
Because we have been unable to raise this money, we began
reducing the size and scope of our business. In doing so, we
expect to reduce our liabilities and decrease our prospective
operating expenses, thus lowering our funding requirements.

"Previously, we operated in each of the major Asian markets and
the United States. We now only service customers in Taiwan and
Korea -- the two countries where we own and operate IDCs.

"In early July, iAsiaWorks commenced a Creditors' Voluntary
Liquidation for our Hong Kong subsidiary. This action allows us
to eliminate certain balance sheet liabilities and terminate our
long term IDC lease obligation.

"Over the last several months we have reduced our headcount from
more than 400 employees to approximately 100 employees today.

"In addition to dramatically reducing our cost structure, we are
working with all of our major creditors in an effort to
restructure our debt. Over the last few months, we have missed
many of our scheduled payments and, in order to continue to
operate without filing for bankruptcy protection, we must secure
the cooperation of our creditors.

"Finally, we continue to try to raise money. We have been in
discussion with several different parties that are interested in
buying assets or providing us with additional capital. Our
objective is to raise enough capital to satisfy our vendors and
provide cash to grow the remaining businesses.

"Assuming we are able to raise new capital and restructure our
debt, we continue to believe that we have the premier facilities
in Taiwan and Korea and that long-term demand for hosting
services will be strong."

                       About iAsiaWorks

iAsiaWorks (Nasdaq:IAWK), an Asia-Pacific Internet data center
(IDC) company and co-location service provider, offers co-
location services in Taiwan and Korea.


ICG: Cable & Wireless Wants To End NetAhead Peering Arrangement
---------------------------------------------------------------
Cable & Wireless USA, Inc., asks Judge Walsh to allow it to
terminate a peering arrangement with ICG NetAhead, Inc.

Cable & Wireless is a provider of voice and data
telecommunications services, including internet-related
services, Anthony G. Stamato, Esq., and Jack A. Simms, Esq., at
Baker & McKenzie in Chicago, relate. Prior to the commencement
of these cases, ICG NetAhead and Cable & Wireless entered into
an informal "peering arrangement" under which the parties agree
to exchange communications traffic between their networks.
Peering requires that the participating service providers set up
physical exchange points between their networks through which
traffic passes between the networks. The physical exchange point
is comprised of a facility, either public or private, that
houses hardware and related telecommunications support
equipment, the cost of such exchange borne by the parties on a
50/50 basis.

Cable & Wireless tells Judge Walsh these arrangements are common
in the telecommunications industry. Any given service provider
typically is a party to multiple peering arrangements with
different service providers and the geographical coverage
provided by these peering arrangements often is overlapping. The
ultimate benefit of peering insures to the peering partner's
customers. A customer of one company involved in the peering
relationship can have its traffic routing to a peering point,
and redirected to the network of another company's network.
Thus, although the customer has no contractual relationship with
the peering partner, that customer will be entitled to access to
the peering partner's network by virtue of the peering
relationship. If any one peering agreement is terminated, most
probably, although not as a rule, the peering partners will
reroute traffic to other peers or enter into commercial
arrangements with other service providers in substitution for
any loss of network access due to the terminated peering
arrangement. Other than the cost of the physical exchange point,
no payment or settlement of monies occurs between the parties,
and for this reason peering arrangements are typically
maintained only as long as the arrangement is beneficial to both
parties.

The peering arrangement Cable & Wireless maintained with the
Debtor was somewhat informal, and per the industry standard, was
terminable at will for any reason by any party upon sixty days'
notice. On March 27, 2001, Cable & Wireless sent notice to the
Debtor that it was terminating the peering relationship in sixty
days, and would be contacting the Debtor to make arrangements
for alternative services to access the particular network in
question.

Bankruptcy courts will not create executory contracts under the
Bankruptcy Code based solely on informal arrangements and the
parties' course of conduct. In Nemko v. Motorola, 163 B.R. 927
(Bankr. E.D.N.Y. 1994), the parties benefited from their
symbiotic relationship, but the Court refused to create an
executory contract based on the parties' course of conduct, as
business relationships, agreements and arrangements, other than
executory contracts and leases, are simply not within the
purview of the Bankruptcy Code provision governing assumption
and rejection. Thus Cable & Wireless argues that the peering
arrangement at issue is not an executory contract, but instead
an informal arrangement based more on industry custom and the
parties' course of conduct. As such, Cable & Wireless'
termination of the peering arrangement would not be subject to
the rules regarding termination of an executory contract, nor
would it violate the stay provisions against creditor action in
the Bankruptcy Code.

Cable & Wireless submits this Motion out of an abundance of
caution in the event that the Debtor or any interested party
raises concerns regarding the propriety of the termination of
the peering arrangement. The Debtor has not objected to the
termination notice, Cable & Wireless tells Judge Walsh, and in
fact does not consider the peering arrangement an executory
contract as it is not listed as such in the Debtor's Schedules.

Even if the peering arrangement were an executory contract, its
termination will not be detrimental to the estate, as the
services provided are not unique, and an alternative arrangement
can be made by the Debtor to access other networks. Cable &
Wireless announces itself willing to assist the Debtor in this
process.

Cable & Wireless thus requests that Judge Walsh enter an order:
(a) granting this Motion and authorizing Cable & Wireless to
terminate its peering relationship with the Debtor, and (b)
finding that in terminating the arrangement Cable & Wireless
will not be liable for violating the automatic bankruptcy stay
for improperly terminating an executory contract, and will have
no further liability to the estate or the Debtor in connection
with the peering arrangement. (ICG Communications Bankruptcy
News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


IMPSAT FIBER: S&P Drops Ratings to CCC+/CCC- From B/B-
------------------------------------------------------
Standard & Poor's lowered its corporate credit rating on Impsat
Fiber Networks Inc. and the rating on the company's $125 million
senior notes due July 2003 to triple-'C'-plus from single-'B'.
At the same time, Standard & Poor's lowered its local and
foreign currency senior unsecured debt ratings to triple-'C'-
minus from single-'B'-minus. All ratings were placed on
CreditWatch with negative implications.

The CreditWatch placement reflects Standard & Poor's concerns
that, in the absence of a significant turnaround or the closing
of additional funding, Impsat may suffer liquidity constraints
before year end.

The downgrade is based on Impsat's very weak cash generation and
profitability as well as the increased challenges posed by the
company's highly leveraged financial structure. The downgrade
also incorporates uncertainties regarding the market opportunity
and growth potential in the countries targeted by Impsat due in
part to the increasing risk and economic volatility in many
regions in Latin America.

Impsat provides private network, integrated data, and voice
telecommunications services. EBITDA margins for the first
quarter 2001 were 4.9%, almost half of the level registered in
the same quarter of 2000. Cash flow protection measures have
also deteriorated significantly with negative funds from
operations and fractional EBITDA interest coverage for 2000 and
the quarter ended March 2001. In 1999, the company started
construction of a Pan-American broadband network. Standard &
Poor's expected Impsat to be able to boost performance through
the sale of IRUs (indefeasible rights of use) and increased
usage of these facilities. However, the insolvency of 360
networks (with which the company had entered into a 20-year
agreement expected to generate $96 million in revenues in 2001)
and the economic situation in the region have delayed this
improvement. The company's aggressive expansion plan has
resulted in high leverage of 92% as of March 2001 and debt to
EBITDA of 49x for the 12 months ended at that date.

Impsat operates in Argentina and Colombia (which, combined,
represented about 70% of total revenues for the first quarter of
2001), and in Venezuela, Mexico, Ecuador, and Brazil (which is
still EBITDA negative). Since 1999 and 2000, most of these
volatile economies were deeply affected by the slowdown in
economic growth and lack of investor confidence, resulting in
diminished financial flexibility for all companies operating in
the region. This situation, coupled with Impsat's dependency on
economic cycles and its increasing competition in most of the
countries where it operates, caused the company's financial
performance to sharply deteriorate from historical and expected
levels. Although revenues have increased during the quarter
ended March 2001 reaching $89 million, as compared with the $59
million for the same period of 2000, lower prices, higher
satellite capacity costs to accommodate demand until the
broadband network is ready, increased labor costs, and higher
interest expense, have caused profitability to worsen
significantly.

The company's $225 million senior notes due 2008 and $300
million senior notes maturing 2005 are rated two notches below
the corporate credit rating reflecting subordination to the
company's $125 million bond due 2003 (guaranteed by Impsat S.A.,
the Argentine subsidiary), and to the growing levels of
collateralized vendor financing resulting from the construction
of the company's broadband network.

Standard & Poor's will closely monitor Impsat's liquidity
position, performance, and any modification to the company's
business plan. In addition, Standard & Poor's is concerned that
the current market conditions may prevent Impsat from issuing
debt as expected, further impairing financial flexibility.


INSPIRE INSURANCE: Appeals Nasdaq's Delisting Determination
-----------------------------------------------------------
INSpire Insurance Solutions, Inc. (Nasdaq: NSPR), a leading
property and casualty insurance outsourcing and integrated
solutions provider, requested a hearing to appeal a Nasdaq Staff
Determination that the Company's common stock is subject to
delisting from the Nasdaq National Market. The Company received
a letter from Nasdaq dated August 8, 2001, informing it of this
determination based on non-compliance with the $1.00 minimum bid
price requirement for continued listing set forth in Nasdaq
Marketplace Rules 4450(a)(5) and 4310(c)(8)(B). Under Nasdaq
rules, the delisting will be stayed pending the outcome of the
hearing. Until then, the Company's common stock will remain
listed and will continue to trade on the Nasdaq National Market.

The hearing is expected to occur within 45 days of the hearing
request filing. At the hearing, INSpire intends to request
additional time to get the Company into compliance with the
$1.00 minimum bid price requirement. The Company's Board of
Directors has approved a reverse stock split, and the Company is
considering this as a proposal to Nasdaq to increase the trading
price of its common stock. The reverse stock split is subject to
shareholder vote and approval at a special meeting to be
scheduled.

Delisting hearings are conducted by the Nasdaq Listing
Qualifications Panel. In reviewing listing qualifications, the
panel considers the current trading price of the Company's
common stock, trading activity, financial health and other
factors affecting the qualifications to remain on the Nasdaq
National Market. There can be no assurance that the Panel will
grant the Company's request for continued listing.

If the appeal is denied, the Company's common stock will be
delisted from the Nasdaq National Market. In such an event, the
Company's common stock will trade on the OTC Bulletin Board's
electronic quotation system, or another quotation system or
exchange on which the shares of the Company may qualify. The
Company's shareholders will still be able to obtain current
trading information, including the last trade bid and ask
quotations, and share volume.

"Although we would regret delisting, we do not believe that a
move to the OTC market would affect our customers or employees,
noted INSpire Chairman and CEO John F. Pergande. "INSpire
remains committed to providing the best outsourcing and software
solutions for property and casualty insurers."

           About INSpire Insurance Solutions

INSpire Insurance Solutions, Inc. provides policy and claims
administration solutions for all property and casualty insurance
products. As one of the foremost providers of outsourcing and
integrated systems, INSpire serves clients with needs to enter
new markets quickly, reduce expenses, increase customer
satisfaction and focus on core competencies. Additional
information can be obtained from INSpire's Web site at
http://www.nspr.com


KELLSTROM INDUSTRIES: Senior Lenders Agree To Waive Debt Default
----------------------------------------------------------------
Kellstrom Industries, Inc. (Nasdaq: KELL) announced results for
its second quarter and six months ended June 30, 2001.

Kellstrom's revenues for the second quarter increased by 9.2% to
$89.8 million as compared to $82.2 million in last year's second
quarter due to an increase in aircraft and aircraft engine part
sales resulting primarily from the December 1, 2000 acquisition
of the aircraft and engine parts resale business of Aviation
Sales Company (the "Acquisition"). The Company continued to face
an industry-wide downturn combined with surplus inventory
availability which exerted downward pressure on selling prices.
As a result, the Company incurred an operating loss of $3.9
million during the second quarter of 2001, excluding a $5.3
million non-cash charge in connection with the write-down of
certain inventories, as compared to an operating profit of $8.7
million during the second quarter of 2000. The net loss for
the second quarter of 2001 was $40.5 million or $3.40 per
diluted share, as compared to net income of $1.4 million or
$0.12 per diluted share during the second quarter of 2000. The
loss incurred during the second quarter of 2001 also included a
$30.6 million non-cash tax charge due to the establishment of a
valuation allowance on the majority of the Company's deferred
tax assets. Gross margin during the second quarter of 2001,
excluding the impact of the inventory write-down, declined to
18.0%.

The Company also reported that it was not in compliance at June
30, 2001 with certain of the financial covenants contained in
its credit agreements with its senior lenders and its senior
subordinated lender. The Company's senior lenders and senior
subordinated lender have agreed to forbear in regards to these
covenant violations until October 15, 2001, although the date
may be accelerated by the lenders to October 1, 2001. In
connection with the forbearance agreement, the Company's senior
lenders have reduced the amount of the Company's revolving
credit facility from $250.0 million to $220.0 million, have
instilled certain collateral reserves, have imposed a default
rate of interest and have reserved the right to block payments
on the Company's subordinated debt.

Oscar E. Torres, Chief Financial Officer of Kellstrom
Industries, Inc. stated, "We are currently in the process of
pursuing a waiver with regard to the noncompliance with
financial covenants and an amendment to the credit agreements
with our lenders. In addition, we continue to take steps to
adjust our SG&A to match our current revenue levels. In July, we
reduced 86 positions and reduced substantially all salaries
above $100,000 by up to 15%. Finally, we continue to pursue the
sale of certain assets in an effort to reduce our current debt
levels."

Zivi R. Nedivi, President and Chief Executive Officer of
Kellstrom Industries, Inc. stated, "The second quarter loss was
anticipated as business conditions throughout our industry
remain trying. However, with the down cycle and turnaround
taking longer than we had earlier expected, bringing our cost
structure in line with revenue expectations is an overriding
priority."


KELLSTROM INDUSTRIES: Conference Call at 1:30 p.m. Today
--------------------------------------------------------
Kellstrom Industries, Inc. (Nasdaq: KELL) management will host a
conference call at 1:30 pm. Eastern Daylight Time on Thursday,
August 16, 2001 to discuss second quarter results. The
conference call will be broadcast live over the Internet via the
Investor Relations section of the Company's web site at
http://www.kellstrom.com.To listen to the live call, go to the
web site at least 10 minutes early to register, download and
install any necessary audio software. If you are unable to
listen live, the conference call will be archived and can be
accessed for approximately 90 days.

Kellstrom is a leading aviation inventory management company.
Its principal business is the purchasing, overhauling (through
subcontractors), reselling and leasing of aircraft parts,
aircraft engines and engine parts. Headquartered in Miramar, FL,
Kellstrom specializes in providing: engines and engine parts for
large turbo fan engines manufactured by CFM International,
General Electric, Pratt & Whitney and Rolls Royce; aircraft
parts and turbojet engines and engine parts for large transport
aircraft and helicopters; and aircraft components including
flight data recorders, electrical and mechanical equipment and
radar and navigation equipment.


KRAUSE'S FURNITURE: Bankruptcy Court Approves Interim Financing
---------------------------------------------------------------
The U.S. Bankruptcy Court in Santa Ana has preliminarily
approved interim financing to allow Krause's Furniture, Inc.
(AMEX:KFI), Krause's Custom Crafted Furniture Corp. and Castro
Convertible Corporation (collectively, Krause's) - a
manufacturer and retailer of custom-crafted furniture - to
continue operations until at least Sept. 30 and fulfill all its
customers orders.

According to Richard M. Neiter, a senior member of Stutman,
Treister & Glatt, Krause's bankruptcy attorneys, this financing
was necessary to keep 57 of its 89 showrooms open to complete a
sale of Krause's scaled-down business as a going concern and to
enable its factory to deliver all customers' orders. If this
sale is consummated, it should also enable the acquirer to
continue the business and offer employment to the employees at
these showrooms, at Krause's related distribution centers, and
at its factory and headquarters.

The Brea, Calif.-based company previously closed 12 showrooms
and on August 13, 2001, the Court approved Krause's motion to
liquidate the inventory at more than two dozen of its other
under-performing stores.

Neiter also said that a new group of investors, comprised of
some members of current management and certain investors not
related to Krause's, has offered to purchase the assets of
Krause's scaled-down business and to assume the obligations due
to the landlords at the remaining 57 locations, if Krause's
leases are assigned to it.

This offer is subject to various conditions and may be over-bid
if a qualified buyer offers more consideration for these assets,
and is approved by the Bankruptcy Court by September 14, 2001.
If the going concern sale is not completed by September 30,
unless that date is extended, Krause's has agreed that the
inventory at its remaining 57 stores may be liquidated and its
operations would cease except for completing its customer
orders.

Other Stutman, Treister & Glatt attorneys working on Krause's
action include Michael H. Goldstein, Scott H. Yun and Eric W.
Winston. The Los Angeles-based law firm is nationally recognized
as one of the leading bankruptcy firms in the country and has
prospered for more than a half-century as a specialist in the
practice of corporate restructurings and reorganization.


L.L. KNICKERBOCKER: Reports Improved Second Quarter Results
-----------------------------------------------------------
The L.L. Knickerbocker Co., Inc. (OTC Bulletin Board: KNIC)
announced results of operations for the second quarter ended
June 30, 2001.

Second quarter net sales in 2001 were $6.7 million, 24.0% lower
than the $8.8 million in the prior year period. Second quarter
2001 net income increased to $180,000, or $.00 per diluted
share, from net loss of $671,000, or $.01 per diluted share in
the comparable prior year period. Weighted average diluted
shares in 2001 and 2000 were 46,987,728 in each period.

The decrease in net sales in 2001 was due primarily to the
discontinuance of two celebrity brands and timing differences on
large shipments to the Company's large customer in the Company's
collectibles segment.

First quarter 2001 operating income was $213,000 compared to
$151,000 in the comparable 2000 period, an improvement of
$62,000.

Anthony P. Shutts, Chief Financial Officer, said: "Operating
results showed improvement over the comparable period last year.
General and administrative costs were reduced by 30%, which more
than offset the decline in revenues. The Company is looking for
ways to expand its revenue base."

As announced earlier, the Company is in the midst of a Chapter
11 proceeding and has agreed to sell substantially all its
assets subject to an initial cash overbid of $6,180,000. A court
hearing is set for September 4, 2001 to consider the motion to
approve the sale of substantially all of the Company's assets
and consider overbids, if any. If no overbids for the Company's
assets are received, it is unlikely that the shareholders of
Knickerbocker will receive any distributions from the proceeds
of the proposed asset sale.

The L.L. Knickerbocker Co., Inc. is a multi-brand collectible
products, gift, toy and jewelry company that designs, develops,
produces and markets products over diverse distribution
channels. The Company's products are sold through independent
gift and collectible retailers, department stores, electronic
retailers, Internet, and international distributors. The Company
is a major supplier of collectible products and fashion jewelry
to the leading electronic retailer.


LAIDLAW INC.: US Trustee Appoints Official Creditors' Committee
---------------------------------------------------------------
Pursuant to 11 U.S.C. Sec. 1102, the United States Trustee for
Region II appoints these nine creditors to serve on the Official
Committee of Unsecured Creditors in Laidlaw Inc.'s chapter 11
cases:

       Aid Association for Lutherans
       Attention R. Jerry Scheel, Second V.P.
       222 West College Avenue
       Appleton, WI 54911
       (920) 730-3766

       Bank of Montreal (BMo-Nesbitt Burns)
       Attention Michael Solski, V.P.
       First Canadian Place, 24th Floor
       100 King Street West
       Toronto, Ontario CANADA M5X 1A1
       (416) 867-6968

       Canadian Imperial Bank of Commerce
       Attention Brian T. McDonough, V.P.
       Commerce Court West -- 6th Floor
       Toronto, Ontario CANADA M5L 1A2
       (416) 861-3349

       Conseco Capital Management, Inc.
       Attention Eric Johnson
       11825 N. Pennsylvania Street
       Carmel, IN 46032
       (317) 817-6806

       John Hancock Life Insurance Co.
       Attention S. Mark Ray
       200 Clarendon St.
       Boston, MA 02117
       (617) 572-9632

       New York Life Insurance Company
       Attention William Y. Cheng
       51 Madison Avenue
       New York, NY 10010
       (212) 576-6525

       Royal Bank of Canada
       Attention J. Steven Patterson
       20 King Street West, 9th Floor
       Toronto, Ontario CANADA M5H 1C4
       (416) 974-2189

       SunAmerica Life Insurance Co. & Affiliates
       c/o Kaye Handley
       175 Water Street, 25th Floor
       New York, NY 10038
       (212) 458-2172

       UNUM Provident Corporation & Affiliates
       Attention R. Brendan Olin, V.P.
       1 Fountain Square
       Chattanooga, TN 37402
       (423) 755-7282

Christopher K. Reed, Esq., is the attorney for the U.S. Trustee
in charge of monitoring Laidlaw's chapter 11 cases.  Mr. Reed's
telephone number is (716) 551-5541. (Laidlaw Bankruptcy News,
Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900)


MARINER POST-ACUTE: Agrees To Modify Stay For Insured Claims
------------------------------------------------------------
The Mariner Post-Acute Network, Inc. Debtors agree to lift the
automatic stay to permit the prosecution and defense by the
following Claimants and/or their representatives related to
personal injuries allegedly caused by MPAN or its subsidiaries:

      -- Helen Rawski related to Ms. Rawski's allegedly sustained
injuries caused at St. Anthony Nursing Healthcare Center;

      -- Mayola Jones related to Ms. Jones' allegedly sustained
injuries caused at Waldon Healthcare Center;

      -- Billy E. Rothrock related to Mr. Rothrock's allegedly
sustained injuries caused at Living Centers - Southeast, Inc.
f/d/b/a Brian Center of Lexington, Inc., d/b/a Brian Center
Nursing Care/Lexington;

      -- Bernell Sandefur related to Bernell Sandefur's allegedly
sustained injuries caused at Desert Sky Health and
Rehabilitation Center.

Each Stipulation and Order is on substantially similar terms as
follows:

(1) Claimant may enforce or execute upon any (a) settlement,
     (b)judgment entered by a court of competent jurisdiction or
     (c) other disposition of the underlying claims in the State
     Court Action only to the extent such claims are covered by
     proceeds from applicable insurance policies of the Debtors,
     only to the extent permitted by such settlement, judgment or
     other disposition;

(2) Claimant will not have any allowed claim against any of the
     Debtors or their estates and will have no right to share in
     any distribution from the Debtors or their estates, whether
     under a plan of reorganization or otherwise;

(3) Claimant will not engage in any efforts to collect any
     amount from any of the Debtors or any of the Debtors'
     current and former employees, current and former ofticers
     and directors, or any person or entity indemnified by the
     Debtors or listed as an additional insured under any of the
     Debtors' liability policies;

(4) Claimant will not file any proof of claim against any of the
     Debtors and waives any and all claims for recovery against
     the Debtors and entities as mentioned above;

(5) Any settlement of the State Court Action will include a
     mutual general release of all claims;

(6) Claimant will not name as a defendant and, if already so
     named, to dismiss with prejudice from the State Court Action
     any of the Debtors' current and former employees, officers
     and directors, and any person or entity indemnified by any
     of the Debtors or listed as an additional insured under any
     of the Debtors' liability policies.

(7) Claimant will not to amend the Complaint to name as a
     defendant, or to file a separate lawsuit naming as a
     defendant, any of these entities, asserting against such
     named defendant(s) causes of action arising from the
     allegations, matters, acts, omissions or assertions averred
     In the Complaint.

(8) If at any time the Debtors defend the State Court Action on
     the ground that an Affiliated Third Party released is liable
     rather than the Debtors, the Claimant may give the Debtors
     and such Affiliated Third Party 30 days notice that, unless
     the Debtors recant such defense, the Claimant intends to
     amend his or her complaint to add such formerly released
     Affiliated Third Party as a defendant. If the Debtors fail
     to renounce such defense within the 30 day period, the
     Claimant's release as to such Affiliated Third Party will be
     rendered void and ineffective ab initio.

(Mariner Bankruptcy News, Issue No. 17; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


MAXICARE: Assigns LA Medi-Cal Contract To Care 1st For $15 Mil
--------------------------------------------------------------
Maxicare Health Plans Inc. ("MHP") (OTCBB: MAXIQ) announced that
its California HMO subsidiary ("Maxicare") has signed an
agreement with Care 1st Health Plan ("Care 1st") to assign its
Los Angeles County Medi-Cal contract to Care 1st for $15.0
million.

MHP also announced that Maxicare has signed an agreement with
Molina Healthcare of California ("Molina") to assign its
Sacramento Geographic Managed Care Medi-Cal contract to Molina
for $900,000.

Both of these agreements are subject to approval from regulatory
agencies as well as the United States Bankruptcy Court, and
there can be no assurance that all necessary approvals will be
given. MHP and Maxicare continue to consider various options for
the disposition of Maxicare's commercial California operations.

                     About Maxicare

Maxicare Health Plans Inc., with headquarters in Los Angeles, is
a managed healthcare company, with operations in California.
Maxicare (MHP's California HMO subsidiary) is currently
operating under Chapter 11 bankruptcy protection.


MIDWAY AIRLINES: Restructuring Entails Workforce, Aircraft Cuts
---------------------------------------------------------------
Midway Airlines Corporation (Nasdaq: MDWY) announced that, in
connection with its filing for relief pursuant to Chapter 11 of
the US Bankruptcy Code, it would reduce its workforce by
approximately 50 percent, reduce its fleet by 17 aircraft and
discontinue service to nine destinations.

The instant need for this restructuring has been occasioned by
the calamitous drop in business traffic experienced by airlines
generally this year and by Midway Airlines in particular in the
technology rich Raleigh/Durham, N.C. area. The decline in
business traffic has been exacerbated by the dramatic slowing of
traffic growth at Raleigh Durham International Airport and the
generally lower fare levels that have recently prevailed.

Further compounding these revenue-related issues has been the
company's rapid expansion and consequent dependence upon
continuing increases in demand, and finally the stubbornly high
prices of jet fuel.

"Despite economic conditions that have made a portion of our
route network unprofitable and unsustainable, we are confident
we will return to profitability by reorganizing and reducing our
route network to traditionally profitable routes," said Robert
Ferguson, president and CEO.

This restructuring will have a number of effects as follows:

                    Aircraft Fleet

Midway will cease operating all four of its F100 aircraft and
thirteen of twenty-four CRJ aircraft. Midway will continue to
operate its twelve 737-700 series aircraft and eleven Canadian
Regional Jets.

                   Route Structure

Midway will discontinue service to: Buffalo, NY; Dayton, OH;
Pittsburgh, PA; Rochester, NY; and Washington, DC - Dulles
effective August 14, 2001. Service to Los Angeles, CA will be
discontinued effective August 19, 2001. Service to Birmingham,
AL will be discontinued effective August 20, 2001. Finally,
service to Providence, RI and San Jose, CA will be discontinued
on August 31, 2001.

                     Code-Share Flights

Code-share flights offered by Corporate Airlines to Norfolk, VA;
New Bern and Wilmington, NC; Myrtle Beach, Charleston, Columbia,
and Greenville-Spartanburg, SC will all operate on the existing
schedules.

                       Ticketholders

Pursuant to an order of the Bankruptcy Court, Midway will honor
for flight or refund, in accordance with appropriate tariffs,
all tickets.

                         Employees

Midway's workforce is being reduced by nearly 700 employees
effective immediately. This reduction includes approximately 183
pilots, 99 flight attendants, 91 customer service agents (ticket
and gate functions), 126 fleet service agents (baggage handlers)
and 201 other personnel.

                  Financial Information

As of June 30, 2001, Midway had total assets amounting to $318
million and total liabilities amounting to $232 million as
reflected in accordance with generally accepted accounting
principals and assuming Midway is a going concern.

For the three months and six months ended June 30, 2001 Midway
experienced net losses of $7 million and $15 million
respectively.


OWENS CORNING: Rejects Three Executory Contracts
------------------------------------------------
In the ordinary course of business, the Owens Corning Debtors
are a party to numerous executory contracts and unexpired leases
of personal property. As part of their ongoing analysis of their
business operations, the Debtors are conducting a review of
these contracts and leases in order to determine which has value
to the Debtors' estate and which should be rejected. Although
the Debtors have not yet completed their analysis, they have
identified a number of executory contracts and unexpired leases
of personal property which they believe should be rejected.

The Debtors ask the Court for authority to reject certain
miscellaneous executory contracts and unexpired leases of
personal property. These contracts are with:

      a) G&K Services Textile Leasing System dated January 26,
1994 for uniform rental. The debtors no longer need these
services as they have begun purchasing from another supplier
beginning January 2001.

      b) Dana Commercial for lift truck lease dated May 16, 2000.
The lease is being rejected because Debtors require propane-
powered lifts while those under lease emits diesel exhaust.

      c) Hometime Video Publishing, Inc., for advertising
contract for Hometime television program shown on public
television. The contract is being rejected due to change in
marketing plan and budget constraints.

                    Dana Commercial Objects

Dana Commercial Credit Corporation objects to the Debtors'
second motion to reject miscellaneous executory contracts and
unexpired leases.

Jeffrey Wisler, Esq., at Connolly Bove Lodge & Hutz, LLP in
Wilmington, Delaware states that Dana objects to the motion
because the Debtors failed to provide notice as to which
schedules under the lease is being rejected. Mr. Wisler asserts
that the Debtors must provide the lease schedule number of the
rejected lease schedules and the serial number and location of
the affected equipment. Mr. Wisler adds that Dana objects to the
proposed effective date of rejection as the Debtors retain
control and possession of the equipment leased. Mr. Wisler asks
the Court that the proposed rejection should be effective until
such time as the rejected equipment is returned to Dana.

                         * * *

Finding that the relief requested in the motion to be in the
best interest of the Debtors, their estates, creditors and other
parties-in-interest, Judge Fitzgerald ordered that the lift
truck lease no. 701913-001 dated May 16, 1994 with Dana
Commercial and the uniform rental lease with G&K Services
Textile Leasing System dated January 26, 1994 be rejected.
(Owens Corning Bankruptcy News, Issue No. 15; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


PACIFIC GAS: Assumes Western Oilfield Equipment Lease
-----------------------------------------------------
Pacific Gas and Electric Company leases various pumps, pipes,
tanks and fittings from Western Oilfield Supply Company dba Rain
for Rent under a 1998 Equipment Lease. PG&E uses that Equipment
on a job site at Dixon Landing Road in Milpitas, California.

Craig D. Braun, Esq., and Nicole M. Misner, Esq., at Klein,
DeNatale, Goldner, Cooper, Rosenlieb & Kimball, LLP, in
Bakersfield, California, explain that PG&E owes $102,503 in
prepetition rent and $88,894 in postpetition rent.

Janet A. Nexon, Esq., at Howard, Rice, Nemerovski, Canady, Falk
& Rabkin, tells the Court that PG&E needs the Equipment and PG&E
has determined that it should assume the Equipment Lease.

The parties present Judge Montali with a Stipulation
memorializing PG&E's agreement to assume the Equipment Lease and
cure all defaults within 20 days. (Pacific Gas Bankruptcy News,
Issue No. 11; Bankruptcy Creditors' Service, Inc., 609/392-0900)


PENTASTAR COMM: Defaults On Credit Covenants With Wells Fargo
-------------------------------------------------------------
PentaStar Communications, Inc. (Nasdaq: PNTA), the nation's
largest communications services agent, announced second quarter
2001 financial results.

For the second quarter 2001, PentaStar reported revenue of $7.8
million compared to $7.6 million for the comparable quarter in
2000. PentaStar also reported negative earnings before interest,
taxes, depreciation and amortization (EBITDA) of $455,000 for
the second quarter 2001 compared with negative EBITDA of
$352,000 for the second quarter of 2000. A net loss of $1.3
million, or $0.22 per share was reported for the second quarter
of 2001 compared with a net loss of $718,000, or $0.14 per share
for the second quarter of 2000.

"The financial results of the second quarter of 2001 proved to
be disappointing for PentaStar. A significant contributor to our
slower than anticipated revenue growth and EBITDA generation in
the second quarter of 2001, was the across-the-board slowdown in
the economy. Many of our customers have directly felt the impact
of the slowing economy and PentaStar was not immune to those
effects in the second quarter," said Robert Lazzeri, Chief
Executive Officer of PentaStar.

Revenues for the six-month period ended June 30, 2001 were $15.8
million compared to revenues of $12.0 million for the 2000
comparable period. Net loss for the six-month period was $1.7
million, or $0.30 per share. This compared to a net loss of $1.2
million, or $0.24 per share for the six-month period ended June
30, 2000.

As of June 30, 2001, the Company did not meet certain financial
covenants contained in its existing credit agreements with Wells
Fargo Bank West, National Association ("Wells Fargo"), resulting
in a default. The Company is in current discussions with Wells
Fargo and intends to obtain, prior to August 31, 2001, an
extension with appropriate financial covenant waivers to its
existing credit agreement or a restructured agreement with terms
acceptable to the Company. Any such failure to obtain covenant
relief or restructured agreements could result in the Wells
Fargo loan amount becoming due and payable immediately. As a
result of the default with Wells Fargo, a cross default exists
under the Reducing Revolver Loan and Security Agreement with
Merrill Lynch Business Financial Services, Inc.

            About PentaStar Communications, Inc.

PentaStar designs, procures and facilitates the installation and
use of communications services solutions that best meet
customers' specific requirements and budgets. PentaStar was
formed in March 1999 to become a national communications
services agent and specializes in being the single source
provider of total communications solutions for its business
customers. PentaStar's common stock is traded on the Nasdaq
National Market under the ticker symbol PNTA. For more complete
information about PentaStar, contact PentaStar Communications,
Inc., 1660 Wynkoop St., Denver, Colorado 80202, (303) 825-4400,
visit the company's website at http://www.pentastarcom.comor
send an email to info@pentastarcom.com.


Point.360: Talking To Lenders To Waive Debt Covenant Defaults
-------------------------------------------------------------
Point.360 (Nasdaq:PTSX), a leading provider of media asset
management services, announced its results for the second
quarter and six months ended June 30, 2001.

              Second Quarter Operating Results

Revenue for the second quarter ended June 30, 2001, totaled
$16.4 million, down 11% from $18,480,000 in the same quarter of
2000. Gross margin on sales was 30% in the 2001 quarter compared
to 39% in the prior year's quarter, or a reduction of $2.2
million in gross profit. The decrease was due principally to
higher wages related to the digital television services
department and increased depreciation associated with
investments in high definition equipment and lower sales volume.
The build-up of the Company's high definition television and
digital services divisions began in the first half of 2000, and
continued into the third quarter.

For the second quarter of 2001, the Company reported a net loss
of $0.7 million or $0.07 per diluted share, compared to net
income of $0.8 million, or $0.09 per diluted share, in the same
period last year. The current year's quarter included charges of
$425,000 related to expenses associated with restructuring the
Company's bank line of credit and $264,000 of one-time employee
benefit plan costs.

                  First Half Operating Results

Revenue for the six months ended June 30, 2001 was $35.6
million, down 5% from $37.6 million last year. Gross profit for
the 2001 period was 32% compared to 41% in the prior period.
Depreciation and wages principally related to the high
definition television investment charged to cost of sales
increased approximately $700,000 and $1,150,000 respectively,
amounting to approximately 5% of first half sales. The remaining
decline in gross margin is due to the Company's inability to
cover other fixed costs with lower sales.

For the first half of 2001, the Company incurred a net loss of
$0.8 million, or $0.09 per diluted share compared to net income
of $1.8 million, or $0.18 per diluted share in the 2000 period.
In Fiscal 2001, the Company recorded a charge of $518,000 for
the derivative fair value change related to an interest rate
hedge contract required by Statement of Financial Accounting
Standards No. 133, Accounting for Derivative Instruments and
Hedging Activities ("FAS 133"). Additionally, in 2001 the
Company recorded severance expenses of $200,000, a benefits
program change of $264,000, bank restructuring expenses of
$425,000 and consulting and other expenses related to the
Company's rebranding efforts of $300,000. In Fiscal 2000, net
income was reduced by $800,000 of failed merger expenses and
$322,000 (after tax benefit) to reflect the cumulative effect,
net of tax, on January 1, 2000 retained earnings, for the
adoption of SEC Staff Accounting Bulletin 101, "Revenue
Recognition in Financial Statements," as if SAB 101 had been
adopted prior to Fiscal 2000. Excluding these items, the Company
recorded an after tax profit of $41,000 in the first half of
2001 compared to net income of $2,528,000 in the same period of
2000.

R. Luke Stefanko, the Company's Chairman and Chief Executive
Officer, stated: "While first half sales were somewhat depressed
due to the threat of writers and actors strikes, we took the
time to define our future strategy of building upon our strong
customer relationships through the introduction of Point.360's
on-line media management portal. Please visit our website at
Point360.com for a description of our future direction."

Stefanko concluded: "The Company's bottom-line performance is
expected to significantly improve in the second half of 2001. We
expect second half sales to total about $40 million. We
anticipate moderate sales growth over the next 12-18 months
while our new initiatives are introduced. We expect the bottom-
line results to improve more rapidly due to cost restructuring."

The Company also indicated that it was in default of certain
covenants related to its bank line of credit and that it was
negotiating with the banks to obtain waivers.

                     About Point.360

Point.360 is one of the largest providers of video and film
asset management services to owners, producers and distributors
of entertainment and advertising content. Point.360 provides the
services necessary to edit, master, reformat, archive and
ultimately distribute its clients' film and video content,
including television programming, spot advertising, feature
films and movie trailers.

The Company delivers commercials, movie trailers, electronic
press kits, infomercials and syndicated programming, by both
physical and electronic means, to hundreds of broadcast outlets
worldwide.

The Company provides worldwide electronic distribution, using
fiber optics, satellites, and the Internet.

Point.360's interconnected facilities in Los Angeles, New York,
Chicago, Dallas and San Francisco provide service coverage in
each of the major U.S. media centers. Clients include major
motion picture studios such as Universal, Disney, Fox, Sony
Pictures, Paramount, MGM, and Warner Bros. and advertising
agencies TBWA Chiat/Day, Saatchi & Saatchi and Young & Rubicam.


PSA INC: Plan Confirmation Hearing Scheduled For August 31
----------------------------------------------------------
A hearing shall be held on August 31, 2001, U.S. Bankruptcy
Court, Wilmington, Delaware, to consider confirmation of the
Joint Plan of PSA, Inc. and its affiliated debtors.

August 24, 2001 at 4:00 PM is the last date and time for filing
and serving objections to confirmation of the Joint Plan.

Counsel to the debtors are Shannon Lowry Nagle of Powell,
Goldstein, Frazer & Murphy LLP, Atlanta, Ga. And Brendan Linehan
Shannon of Young Conaway Stargatt & Taylor LLP of Wilmington,
DE. Counsel for the Committee of Unsecured Creditors are Kirk L.
Brett of Duval & Stachenfeld, LLP, New York, NY and Frederick B.
Rosner of Walsh, Monzack & Monaco, PA, Wilmington, DE.


SAFETY-KLEEN: Appoints Rittenmeyer As New Chairman/CEO/President
----------------------------------------------------------------
Safety-Kleen Corp. announced the appointment of Mr. Ronald A.
Rittenmeyer of Plano, TX, to the positions of Chairman, Chief
Executive Officer and President of the Company. Mr. Rittenmeyer
has been a member of the Safety-Kleen Board of Directors since
April 2001.

Mr. Rittenmeyer's appointment is subject to approval by the U.S.
Bankruptcy Court and fulfillment of Safety-Kleen's obligations
pursuant to his employment contract. A motion requesting
approval has been filed and is expected to be heard on August
21, 2001. In the interim, Mr. Rittenmeyer will work closely with
the Company's existing management team in a non-executive
capacity.

"This is an honor and an opportunity," Rittenmeyer said.
"Safety-Kleen is the nation's preeminent provider of hazardous
and industrial waste management services, and I look forward to
the challenge of moving the reorganization process forward in an
expeditious manner."

David E. Thomas, Jr., Safety-Kleen's current Chairman and CEO,
and Grover C. Wrenn, the current COO and President, support the
senior management change and will transition from their
management positions back to the Company's Board of Directors.
Mr. Thomas and Mr. Wrenn will serve as non-executive Vice
Chairmen of the Board of Directors, providing specialized
expertise and counsel to Mr. Rittenmeyer on on-going
divestiture, litigation and environmental matters.

During its recent meeting, the Safety-Kleen Board of Directors
commended Mr. Thomas and Mr. Wrenn for their efforts in
stabilizing and managing the Company during the past 18 very
difficult months.

"Grover and I have appreciated the Board's support, guidance and
tireless efforts on behalf of Safety-Kleen," said Thomas. "We
welcome Ron Rittenmeyer to his new role and look forward to
assisting him in the reorganization of the Company."

Mr. Rittenmeyer's business career spans almost 30 years and
includes executive positions with Frito-Lay Inc., PepsiCo Foods
International and, most recently, AmeriServe, a $10 billion food
service company. Mr. Rittenmeyer joined AmeriServe as President
and CEO following the company's filing for Chapter 11 bankruptcy
protection in 2000. Under Mr. Rittenmeyer's leadership,
AmeriServe's bankruptcy case was successfully resolved in just
10 months. Mr. Rittenmeyer is currently the plan administrator
for AFD Fund, the post- confirmation estate of AmeriServe.

Prior to working with AmeriServe, Mr. Rittenmeyer served as
Chairman, President and CEO of RailTex, Inc., in San Antonio,
TX, as President and COO of Ryder TRS, Inc. (a nationwide truck
rental business which had been divested from Ryder System, Inc.)
in Denver, CO, as a Principal with Jay Alix & Associates, a
nationwide business turn-around firm, and as President and COO
of Merisel (a distributor of high tech equipment and software)
in El Segundo, CA. He has served on the Board of Directors of
AmeriServe, RailTex, Ryder TRS, Groceryworks.com, and Merisel.
He currently serves as a Trustee to the Greenhill School in
Dallas, Texas.

Mr. Rittenmeyer received his MBA from Rockhurst University in
Kansas City, Missouri. He is also a graduate of Wilkes
University, in Wilkes-Barre, Pennsylvania, where he received a
B.S. in Commerce and Economics.

Safety-Kleen also filed, with the support of its lenders, a
motion in the U.S. Bankruptcy Court in Delaware for an extension
of the period of time during which the Company has the exclusive
right to file a reorganization plan. The proposed extension
would extend through January 31, 2001.

Based in Columbia, South Carolina, Safety-Kleen Corp. is the
largest industrial and hazardous waste management company in
North America, serving more than 400,000 customers in the U.S.
and Canada. The Company and 73 of its U.S. subsidiaries filed
for protection under Chapter 11 of the U.S. Bankruptcy Code in
June 2000.


SURGICAL NAVIGATION: Files For CCAA Protection in Ontario Court
---------------------------------------------------------------
Cedara Software Corp. (TSE:CDE/ NASDAQ: CDSW), a major
independent medical imaging software developer, announced that
Surgical Navigation Specialists Inc. (SNS), a wholly-owned
subsidiary of the Company, has begun to reduce its workforce by
approximately 50 positions and SNS has sought and obtained an
Order for protection under the Companies' Creditors Arrangement
Act (CCAA) from the Ontario Superior Court of Justice. The
effect of the Order is to stay the current obligations of SNS to
creditors to September 12, 2001, unless further extended by the
court.

The Company believes that it will be able to restructure SNS
under creditor protection in order to continue as a provider of
surgical navigation software to original equipment and device
manufacturers and to provide the time to find a solution that
would maintain service to existing SNS' customers. As part of
the restructuring, SNS intends to consider proposals to enable
it to best achieve this goal, including disposing of non-
strategic assets and assets related to its retail surgical
navigation business, which SNS intends to exit.

The Order provides for debtor-in-possession financing to be
provided directly by the Company to SNS, which financing will
have priority over existing secured claims. This financing will
be more than offset by the projected reduction in expenses for
Cedara.  PricewaterhouseCoopers Inc. has been appointed by the
court as Monitor for SNS while under CCAA protection.

"Today's difficult action was the responsible course to take,
given the circumstances," said Dr. Michael Greenberg, Chairman
and Chief Executive Officer of Cedara. "Cedara can now focus its
resources on growing its core business and strengthening its
position as the premier imaging software partner to the world's
leading healthcare equipment and device manufacturers."

"An immediate benefit of today's action is a significant
reduction in Cedara's expenses. These steps will help the
Company's existing activities to raise additional financing,"
stated Mr. Fraser Sinclair, Chief Financial Officer and
Corporate Secretary of Cedara.

"The balance of the Cedara business has been EBITDA positive in
all but three quarters over the past four and a half years,"
stated Dr. Arun Menawat, President and General Manager of
Cedara's Imaging and Information Solutions division.

Cedara Software Corp., based in the greater Toronto area, is a
leading medical imaging software developer with revenues of
$55.7 million in fiscal 2000. Cedara serves leading healthcare
solution providers and has long-term relationships with
companies such as Cerner, GE, Hitachi, Philips, Siemens,
and Toshiba. Cedara offers its OEM customers a rich assortment
of possible end-to-end imaging solutions. The Cedara Imaging
Application Platform (IAP) is a development environment
supporting Windows and Unix. This continuously enhanced imaging
software is embedded in 30% of MRIs sold today. Cedara
offers components and applications that address all modalities
and aspects of workflow, including: 3D imaging and advanced
post-processing; volumetric rendering; disease-centric imaging
solutions for cardiology; and streaming DICOM for web-enabled
imaging. Cedara Viewing and Reading (VRO) solutions for picture
archiving and communications systems (PACS) are IAP-based and
are sold via systems integrators and distributors around the
world. Through its Dicomit Dicom Information Technologies Inc.
subsidiary, Cedara provides ultrasound and DICOM connectivity
solutions to OEM customers such as Acuson.


THCG INC.: Releases Second Quarter 2001 Results
-----------------------------------------------
THCG, Inc. (OTC BB: THCG) announced its operating results for
the three month period ended June 30, 2001.

Due to market conditions that continued to deteriorate in 2001,
the company ceased providing venture funding, venture
development and venture banking services, ceased funding the
operations of Zinook Ltd. and closed office in Israel. In
addition, the company reduced the number of personnel in the
United States to a minimum level. It is no longer providing
investment banking or other financial advisory services through
Tower Hill and has withdrawn its broker-dealer license as of
June 28, 2001. This restructuring required the company to write
down the value of certain assets, including Mercury Coast and
Zinook.

THCG had no revenues from continuing operations for the three
months ended June 30, 2001 and 2000. THCG had revenues from
discontinued operations for the three months ended June 30, 2001
in the amount of $0.2 million as compared with revenues of $2.2
million in the three months ended June 30, 2000.

THCG had no revenues from continuing operations for the six
months ended June 30, 2001 and 2000. THCG had revenues from
discontinued operations in the six months ended June 30, 2001 in
the amount of $2.4 million as compared with revenues of $16.5
million in the six months ended June 30, 2000.

THCG had expenses of $4.7 million from discontinued operations
for the three months ended June 30, 2001 as compared to expenses
of $4.3 million in the three months ended June 30, 2000. THCG
had expenses from discontinued operations of $26.2 million for
the six months ended June 30, 2001 as compared to expenses of
$11.6 million for the six months ended June 30, 2000. The
majority of expenses from discontinued operations for 2001
related to the write-offs of goodwill associated with the
Mercury Coast and Giza/Zinook acquisitions.

THCG, Inc. had a net loss of $6.8 million for the three months
ended June 30, 2001 ($7.0 million after the dividend to the
convertible preferred stock) or ($0.53) per share as compared to
a net loss of $5.3 million or ($0.42) per share for the three
months ended June 30, 2000.

For the six months ended June 30, 2001, THCG had a net loss of
$29.7 million ($30.0 million after the dividend to the
convertible preferred stock) or ($2.29) per share as compared to
a net loss of $2.3 million or ($0.19) per share for the six
months ended June 30, 2000.

                   THCG LIQUIDATING TRUST

On July 6, 2001, THCG announced that its Board of Directors
adopted a plan to completely liquidate its subsidiary, THCG,
LLC, by means of the THCG Liquidating Trust (the "Trust"), a
liquidating trust for the benefit of THCG's stockholders. On
July 16, 2001, the Trust was established and units representing
ownership of the Trust ("Trust Units") were distributed to
holders of record of THCG's common stock as of that date. The
Trust owns all of THCG's assets as of June 30, 2001 (except for
approximately $2.1 million in cash, restricted cash and a note
receivable and approximately $2.1 million of furniture, fixtures
and equipment), including THCG's marketable and non-marketable
securities. The sole purpose of the Trust is to hold, conserve
and protect its assets until they can be liquidated. Joseph D.
Mark and Adi Raviv, executive officers and directors of THCG,
are initial trustees of the Trust. The Board of Directors
believed the Trust was necessary to address business and market-
related issues, including the concern that THCG would have been
required to register as an investment company under the
Investment Company Act of 1940.

THCG and its subsidiaries contributed to THCG, LLC all of their
direct and indirect rights and interests in any security
acquired for investment, or acquired in connection with their
provision of venture banking or venture development services,
including any related promissory notes, contracts, agreements or
instruments. In addition, THCG contributed to THCG, LLC its
rights and interests in the stock of its inactive subsidiaries
and the promissory note executed by a former executive officer
of THCG, which promissory note equaled the aggregate principal
sum of approximately $350,000. THCG then contributed to the
Trust all of its cash and cash equivalents on hand on the Record
Date in excess of approximately $2.1 million and its membership
interests in THCG, LLC, certain contract rights, its accounts
and certain notes receivable.

The holders of THCG's common stock that received Trust Units
retained their shares of THCG's common stock and remain
stockholders of THCG. The Trust Units are not represented by
certificates and are not transferable except upon death or by
operation of law. There will be no market for the Trust Units
and the Trust is not subject to reporting requirements under the
Securities Exchange Act of 1934.

The Trust will terminate on the earlier of the date of
distribution of all of its assets or July 16, 2004, except that
the trustees of the Trust may extend termination of the Trust to
a later date, but not later than July 16, 2006, if they
determine an extension is reasonably necessary either to pay or
make provision for then known liabilities or to conserve and
protect the Trust's assets for the benefit of the beneficiaries
of the Trust.

As a result of the establishment of the Trust, THCG no longer
owns a substantial amount of the assets reflected on its
consolidated balance sheet as of March 31, 2001.

         ACQUISITION OF DONALD & CO. SECURITIES, INC.

THCG signed a definitive agreement ("Definitive Agreement")
effective June 29, 2001 to acquire Donald & Co. Securities, Inc.
The acquisition is anticipated to close in August 2001, after
the distribution of the Trust in which Donald & Co.'s
shareholders did not participate. The transaction is structured
as an acquisition of Donald & Co. by THCG. After the
transaction, current stockholders of THCG will own approximately
32% and the current shareholders of Donald & Co. will own
approximately 67% of the combined company, respectively. A fee
of one percent of THCG's common stock will be paid to a finder
in connection with the closing of the transaction. A majority of
THCG's Board of Directors will change to reflect the change in
control. Simultaneously with the execution of the Definitive
Agreement, THCG loaned Star Cross, Inc., the sole shareholder of
Donald & Co., $400,000 and granted Donald & Co. a license to use
part of THCG's premises for which an agreed upon monthly license
fee is due and payable commencing July 1, 2001. The loan bears
interest at 12% per annum and is repayable on June 30, 2002 or
if Star Cross defaults under the license described above. On
July 30, 2001, THCG loaned an additional $100,000 to Star Cross
on the same terms.

Donald & Co. is a registered broker dealer and member of the
National Association of Securities Dealers, Inc. It is a full
service firm offering a variety of services including retail and
institutional brokerage, underwritten public offerings and other
investment banking activities. Donald & Co. is also engaged in
proprietary trading. Donald & Co. and its predecessors have been
engaged in the securities business since 1916. The firm's
executive office is in New York City and its principal office is
in New Jersey. Branch offices are located in New York, Florida,
Arizona and Iowa. Donald & Co. presently has approximately 140
employees, including approximately 90 registered
representatives. For the years ended September 1998, 1999 and
2000, Donald & Co. generated revenues of $18.9 million, $23.0
million and $24.2 million, respectively. For the eight months
ended May 31, 2001, Donald & Co. generated revenues of
approximately $9.3 million. At May 31, 2001, Donald & Co. had a
net worth of approximately $1.1 million.

               RESTRUCTURING OF PREFERRED STOCK

On July 6, 2001, Castle Creek Technology Partners LLC , the
holder of all of the outstanding shares of the Company's
series A convertible participating preferred stock approved the
plan to establish the Trust and the acquisition of Donald & Co.
by THCG. Pursuant to the terms and provisions of a restructuring
agreement with the Company, Castle Creek exchanged 2,000 of the
5,000 shares of Preferred Stock held by Castle Creek, together
with all accrued and unpaid premiums relating thereto and
warrants to purchase up to 396,899 shares of the Company's
common stock for 1,250,000 shares of the Company's common stock,
a promissory note in the principal amount of $1,500,000 payable
to the order of Castle Creek (the "Note"), $500,000 in cash and
amended and restated warrants to purchase up to 396,899 shares
of the Company's common stock for $5.039 per share (subject to
customary anti-dilution adjustments for stock splits, dividends
and combinations). The Note will be assigned to and assumed by
the Trust pursuant to the terms of the agreement to establish
the Trust and the Company will be released from its obligations
under the Note upon the acquisition of Donald & Co. which
is expected to close in August 2001. The Note must be prepaid
out of the net, after-tax cash proceeds from the sales of assets
by the Trust as long as the Trust has cash reserves of at least
$500,000, or such lesser amount as provided in the Note.
Furthermore, at the closing of the acquisition of Donald & Co.
or another merger, acquisition or sale of the Company that is
consummated by September 30, 2001, Castle Creek has committed to
contribute its remaining 3,000 shares of Preferred Stock to the
Company.


VELOCITYHSI INC.: Files Chapter 7 Petition in N.D. California
-------------------------------------------------------------
VelocityHSI, Inc., (OTCBB:VHSI), a provider of high-speed
Internet services to the apartment industry, has entered into an
asset purchase agreement with Dallas-based Reallinx, Inc. for
the purchase of substantially all of VelocityHSI's assets for
$350,000.

The company also announced that it would file for protection
under Chapter 7 of the U.S. Bankruptcy Code in the United States
Bankruptcy Court for the Northern District of California on Aug.
14, 2001.

The agreement with Reallinx is contingent on several factors,
including approval of the agreement by the bankruptcy court. In
addition, Reallinx must reach an agreement with BRE Properties,
VelocityHSI's largest customer, to continue providing the
Internet access services to BRE's properties that have been
provided by VelocityHSI.

VelocityHSI indicated that Reallinx will provide operating
services for its existing business under an interim operating
agreement, pending the resolution of the transaction, including
bankruptcy court approval.

The company also stated that given the anticipated proceeds from
the proposed transaction and existing resources and the
company's outstanding debt, it does not expect the transaction
will result in any distributions to stockholders.


VENUS EXPLORATION: Shares Subject To Nasdaq Delisting
-----------------------------------------------------
Venus Exploration, Inc. (Nasdaq:VENX) announced that it received
a Nasdaq Staff Determination on Aug. 8, 2001, indicating that
the Company does not meet the net tangible assets requirement,
or the alternative stockholders' equity requirement, for
continued listing set forth in Marketplace Rule 4310(c)(2)(B),
and that its securities are, therefore, subject to delisting
from The Nasdaq SmallCap Market.

The Company has requested a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination. Venus
will remain listed and its common stock will continue to trade
on The Nasdaq SmallCap Market pending the outcome of the
hearing. A hearing date has not been set.

The Company is continually seeking methods and alternatives of
financing in order to provide the Company with additional
capital. In addition, the Company is reviewing its asset base in
order to monetize assets that are under-performing. Further, a
portion of the Company's business entails selling working
interest participations in oil and gas projects in order to
finance certain exploration drilling activities. Management has
taken steps to implement a plan that it believes will allow the
Company to maintain its listing on The Nasdaq SmallCap Market
containing any and all of these elements. There can be no
assurance, however, that Management will be successful in
achieving its plan.

Further, there can be no assurance as to when the Panel will
reach a decision, or that the Panel will grant the Company's
request for continued listing. An unfavorable decision would
result in the immediate delisting of the Company's common stock
from The Nasdaq SmallCap Market irrespective of the Company's
ability to appeal the decision.

If delisted, the Company expects that its common stock will be
eligible for quotation on the Over-the-Counter Bulletin Board
("OTCBB"), since the Company reports its current financial
information to the Securities and Exchange Commission. The OTCBB
is a regulated quotation service that displays real-time quotes,
last-sale prices and volume information in over-the-counter
equity securities and enables market makers to execute
transactions for investors and for themselves in an environment
of real-time trade reporting and automated market surveillance.

                     About Venus

San Antonio-based Venus Exploration Inc. is engaged in the
application of advanced geoscience technologies for the purpose
of increasing shareholder value through the discovery of oil and
natural gas reservoirs in the United States. Venus is focused in
the Expanded Yegua Trend of the Upper Texas and Louisiana Gulf
Coast and the Cotton Valley Trend of East Texas and Western
Louisiana. Natural gas presently constitutes 47 percent of the
Company's 2000 year-end proved reserves of 10.8 Bcfe.


WHEELING-PITTSBURGH: Seeks To Expand PwC's Advisory Services
------------------------------------------------------------
Pittsburgh-Canfield Corporation and its related Debtors ask
Judge Bodoh to enter an Order authorizing PricewaterhouseCoopers
LLP to provide additional financial advisory services to the
Debtors.

By separate application in November, the Debtors sought and
obtained Judge Bodoh's approval for their employment of PwC as
their certified public accountants and tax advisors in these
cases.  By separate application, the Debtors sought and obtained
Judge Bodoh's approval for the additional engagement of PwC to
provide certain Ohio tangible personal property tax consulting
services to the Debtors.  Further, the Debtors have additionally
been authorized to engage PricewaterhouseCoopers LLP to provide
audits on (a) Wheeling-Pittsburgh Steel Corporation Supplemental
Unemployment Benefit Plan for Bargaining Employees-Ohio Valley
Plants, (b) Wheeling-Pittsburgh Steel Corporation Supplemental
Unemployment Benefit Plan for Bargaining Employees-Mon Valley
Plant, (c) USWA/Wheeling-Pittsburgh Steel Corporation Welfare
Benefits Plan, (d) Wheeling Pittsburgh Steel Corporation
Wheeling Corrugating Company Retirement Security Plan, (f)
Wheeling-Pittsburgh Steel Corporation Salaried Employees'
Pension Plan, (g) Wheeling- Pittsburgh Steel Corporation
Bargaining and Non-Bargaining Unit Employees Stock Investment
plans, and (h) USWA-Wheeling-Pittsburgh Steel Corporation
Section 401(k) Savings Plan, all in accord with the terms of
four separate retention letter agreements dated June 8, 2001,
between the Debtors and PwC, with approval retroactive to that
date.

The Debtors remind Judge Bodoh that, effective May 31, 2001, the
Debtors terminated the engagement of PwC Securities, but desire
now to continue the services that were being performed by PwC
personnel and that previously were covered by the compensation
payable to PwCS.  The Debtors therefore wish to modify the prior
retention arrangement with PwC to include these services.

More specifically, Michael E. Wiles, Esq., at Debevoise &
Plimpton, explains, under the modified retention arrangement PwC
will provide such specific services for the Debtors as PwC and
the Debtors shall deem appropriate and feasible, including:

        (a) analyzing the Debtors' business plans and financial
            projections;

        (b) assisting the Debtors with document requests from
            interested parties;

        (c) analyzing the Debtors' operating configurations and
            options;

        (d) assisting the Debtors with determination of financing
            needs for operations, capital expenditures, working
            capital and other items; and

        (e) other areas deemed appropriate and non-duplicative.

There services are generally described by the Debtors as
"business recovery services".

The Debtors and PwC each advise Judge Bodoh that PwC is a
disinterested person based on the same disclosures as made in
the previous applications.

The Debtors wish to compensate PwC for the business recovery
services provided to the Debtors under this Application
according to terms as:

        (a) The Debtors will pay PwC on a blended rate of $350
            per hour.

        (b) The Debtors may pay an additional fee upon the
            successful reorganization or sale as an operating
            entity of Wheeling-Pittsburgh Steel Corporation.
            Such fee will be based on the complexity of the
            services provided, the creativity and quality of the
            advice, the efficiency of the advice, the value added
            to the engagement and the current market compensation
            for similar services.  Any such fee will be mutually
            agreed upon by the Debtors and PwC and may consider
            services performed under the PwCS arrangements.

The Debtors assert that the amended engagement of PwC is in
their best interests and their creditors' best interests as
these services of PwC are necessary for the appropriate analysis
of various restructuring options and to provide other interested
parties with the necessary information needed to make informed
decisions.  In addition, the Debtors believe that the blended
rate of $350 per hour to be paid to PwC is reasonable and should
be approved considering that the primary individuals involved
with performing the services in the past and expected to
continue to perform the services have hourly rates as:

                     Mr. King         $ 500
                     Mr. Talarico     $ 450
                     Mr. Van Horn     $ 275

Except as otherwise stated in the application, the business
recovery services will be governed in all respects by the
Court's original December 12, 2000 Order approving the
application for retention of PwC as the Debtors' accountants and
advisors. (Wheeling-Pittsburgh Bankruptcy News, Issue No. 9;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


WINSTAR COMMUNICATIONS: Moves To Authorize Prepetition Setoffs
--------------------------------------------------------------
Winstar Communications, Inc. has been focused on initiatives in
raising cash and cutting expenses by selling non-core assets,
rejecting unexpired leases and executory contracts and
collecting pre-petition receivables.  However, the Debtors
contend that the Debtors collections have been hampered because
certain parties indebted to the Debtors also have claims against
the Debtors, generating mutual setoff rights.  Parties who owe
money to the Debtors have refused to pay the net amounts because
such act is tantamount to violation of the automatic stay.

Pauline K. Morgan at Young Conaway Stargatt & Taylor in
Wilmington, Delaware discloses that there are dozens of parties
in this position and the net amount owed to the Debtors is
significant, and thus the refusal of these parties to pay is
having an adverse impact on the Debtors' cash collections.

The Debtors, therefore, asks the Court for an entry of an order
authorizing certain parties with pre-petition setoff rights to
arising from the ordinary course of the Debtors business to
effectuate and pay amounts owed to the Debtors net of such
setoffs and approving the settlement and compromise of disputes
arising from or related to such setoffs.

The Debtors also propose that the relief requested be
circumscribed as follows:

  a) Each person with an obligation to a Debtor arising from the
     ordinary course of business prior to the petition date shall
     immediately pay such amount to the Debtors, net of any right
     of setoff such person has against the Debtors which is valid
     under Section 553 of the Bankruptcy Code and applicable
     non-bankruptcy law;

  b) Each Debtor shall have the authority to settle or compromise
     any dispute with such person relating to such a payment or
     setoff without further order of the Court, so as long as any
     settlement or compromise of payment or setoff rights which
     results in net reduction in payment to the Debtors in
     exceeding $2.5 million shall not be effective unless (A) the
     Debtors provided not less than 3 business days written
     notice of the proposed compromise or settlement to the
     counsel or the agent under the Debtors' $1.15 billion
     revolving credit facility, counsel to the Debtors' debtor in
     possession lenders and counsel to the Creditors' Committee
     and (B) none of the significant Creditors provides written
     notice to the Debtors that they object to such compromise or
     settlement;

  c) The Debtors shall provide information to the Significant
     Creditor regarding all setoffs agreed by the Debtors, as
     they shall reasonably request.

(Winstar Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

                            *********

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

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.

Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                           *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard
Group, Inc., Washington, DC USA. Debra Brennan, Yvonne L.
Metzler, 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
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.  Information
contained herein is obtained from sources believed to be
reliable, but is not guaranteed.

The TCR subscription rate is $575 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each.  For subscription information, contact Christopher
Beard at 301/951-6400.

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