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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

            Friday, August 31, 2001, Vol. 5, No. 171

                          Headlines


360NETWORKS: Secures Court Okay to Reject 18 Leases & 1 Sublease
AGERE SYSTEMS: S&P Downgrades Corporate Credit Rating to BB-
AGRO PACIFIC: Enters Deal with Agstar Under Restructuring Plan
AMES DEPARTMENT: Court Okays Use of Cash Management System
AMF BOWLING: Court Approves Interim Compensation Procedures

ARCH WIRELESS: S&P Drops Senior Unsecured Notes Due 2004 to D
AREMISSOFT: Faces Delisting for Delayed Form 10Q Filing
ARMSTRONG HOLDINGS: U.S. Trustee Appoints Amended Asbestos Panel
AT PLASTICS: Exercises Over-Allotment Option & Revamps Board
BRIDGE INFORMATION: Seeks Okay to Reject 3 Executory Contracts

BRIDGE INFO: Reuters Bid for Assets Clears US Regulatory Review
BRIDGE INFO: SAVVIS to Proceed With 5-Step Plan to Full Funding
CHIPPAC INC.: S&P Concerned About Low EBITDA Interest Coverage
COMDISCO INC: U.S. Trustee Appoints Unsecured Creditors' Panel
COVAD COMMS: Seeks Approval to Hire MOFO as Litigation Counsel

DRUG EMPORIUM: Bankruptcy Court Confirms Plan of Reorganization
FAIRFIELD MFG: S&P Drops Ratings Due to Weakening Performance
FOAMEX INTL: May Spend $1.4MM For Restructuring until Year-End
GENESIS HEALTH: Gets Okay to Reject Executory Contracts & Leases
GRAY COMMS: S&P Assigns B+ On Proposed $250MM Bank Facility

HARNISCHFEGER INDUSTRIES: Moves to Limit and Split Service Lists
HYNIX SEMICON: Proposed Debt Swap Prompts S&P to Junk Ratings
INFU-TECH: Chapter 11 Case Summary
INTERACTIVE NETWORK: Perkins Capital Discloses 16.9% Equity
LOEWEN: LLCs Call for Dismissal of Michigan Chapter 11 Cases

LTV CORP: WCI Steel Pushes for Decision on Utility Agreements
MARY KAY: S&P Assigns B+ on Proposed $420 Million Facility
MAXXIM MEDICAL: Weaker Results Compel S&P to Revise Outlook
MICRO WAREHOUSE: S&P Expects EBITDA Coverage to Deteriorate
MULTICANAL S.A.: S&P Affirms C Rating on Senior Unsecured Notes

NETOBJECTS: Nasdaq Delists Shares Effective August 29
OWENS CORNING: BMC Moves to Compel Decision on Software Pact
PACIFIC GAS: Court Approves Stipulation to Adversary Proceeding
PAC-WEST: S&P Places Low-B Ratings on CreditWatch Negative
PILLOWTEX CORP: Court Okays Andersen as Debtor's Consultants

PSINET INC: Secures Approval to Maintain Cash Management System
RYLAND GROUP: Fitch Assigns BB+ Rating on Senior Unsecured Debt
SACO SMARTVISION: Talks with CIBC on $15MM Debt Workout Ongoing
UNIFORET: Court to Fix Hearing Dates on Proceedings on Sept. 18
VENCOR INC: Seeks Okay to Disallow in Full Late-Filed Claims

VLASIC FOODS: Presents Recovery Analysis under 1st Amended Plan
W.R. GRACE: Court Approves Retention of Asbestos Experts
WARNACO GROUP: Releases Salaried Employee Savings Plan Statement
WHEELING-PITTSBURGH: Discussions with USWA to Resume Next Week
WHEELING-PITTSBURGH: Has Until Sept. 4 to Decide on Ryder Pact

WINSTAR COMMS: Court Okays Payment Scheme Agreement with Sprint
WKI HOLDING: S&P Junks Ratings Due to Tight Liquidity

                          *********

360NETWORKS: Secures Court Okay to Reject 18 Leases & 1 Sublease
----------------------------------------------------------------
Judge Allan Gropper granted 360networks inc.'s motion to reject
certain unexpired leases of non-residential real property and
ordered that the Leases are rejected effective as of the earlier
of:

    (a) July 26, 2001; or

    (b) with respect to each of the Lease Locations, the date
        that possession of such Leased Location is surrendered
        to the relevant landlord.

The objection of the Official Committee of Unsecured Creditors
was resolved while the objection by Wilcox Place LLC was
overruled.

According to Judge Gropper, any claims against the Debtors
arising from the Leases or the rejection of the Leases must be
filed with the court-appointed claims agent for these
proceedings on or before the later of any applicable bar date
for the filing of proofs of claim in these cases or 45 days
after the date of this order. (360 Bankruptcy News, Issue No. 6;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


AGERE SYSTEMS: S&P Downgrades Corporate Credit Rating to BB-
------------------------------------------------------------
Standard & Poor's lowered its corporate credit and senior
secured bank loan ratings on Agere Systems Inc. to double-'B'-
minus from triple-'B'-minus, and removed the ratings from
CreditWatch, where they were placed July 24, 2001. The ratings
outlook is stable.

The action reflects Standard & Poor's belief that the company's
operating profitability will remain substantially depressed for
the near to intermediate period, due to ongoing weak markets for
its communications semiconductors and optical communications
components.

Ratings anticipate that the company will continue to retain
adequate financial flexibility to execute its restructuring
program. Ratings also anticipate that the company's good
technology and ongoing cost reduction actions will enable it to
sustain its market position when industry conditions recover.

Ratings had been placed on CreditWatch following the CreditWatch
listing of its 58% owner, Lucent Technologies Inc. The
CreditWatch listing recognized continued severe stress in
Agere's target markets as well as a degree of ratings linkage
between the two companies, given the delay in Agere's spinoff.

The ratings on Lucent were lowered to double-'B'-minus with a
stable outlook and removed from CreditWatch on Aug. 16, 2001.

As Lucent expects to meet the conditions to distribute its
remaining Agere shares in its March 2002 quarter, Standard &
Poor's earlier concerns about the ratings linkage between the
two companies have also been allayed. Lucent's revolving credit
facilities are secured by a pledge of its holdings of Agere
stock.

Growth in the communications technology industry was robust in
1999 and 2000, as Agere's sales increased 52% in the two years
combined. Much of that growth represented ultimate sales to
competitive local exchange carriers (CLECs), rapid deployment of
optical fiber networks, and strong networking demand.

However, the CLECs' business models have subsequently collapsed.
Furthermore, weaker economic conditions have substantially cut
communications traffic-growth expectations, leaving many long-
haul carriers with excess capacity.

As a result, most communications-equipment manufacturers have
ample component inventories. Although there are indications that
market conditions are reaching their nadir, industry
participants are still expecting weak market conditions to
persist for the next several quarters.

Agere reported revenues of $927 million for the quarter ended
June 30, 2001, 22% below the March quarter, while the company
expects a further 30%-35% revenue decline in September. Although
there are some indications that market conditions will begin to
recover in fiscal 2002, revenues for the year are expected to
remain significantly below earlier plans in both the company's
optical components and communications semiconductor segments.

Agere's profitability has deteriorated substantially due to
revenue declines, exacerbated by a cost structure that had
anticipated continued robust growth. Agere reported EBITDA of $5
million in the June quarter, compared to $200 million in the
March quarter, and expects to report a substantial operating
loss in September.

The company had generated $1.3 billion of EBITDA on sales of
$4.7 billion in fiscal 2000. In June 2001, Agere announced plans
to take a $900 million-$1 billion charge over several quarters,
much of which is noncash, to implement a broad-ranging cost-
reduction program, while sizing the company to meet a recovering
market in the second half of fiscal 2002.

Although the program is intended to reduce annual costs by $500-
$600 million once it is fully effective, Standard & Poor's
believes that the depressed business environment could still
entail operating losses for much of fiscal 2002. The company is
likely to retain high R&D expenditures, currently about 23% of
sales, to protect and enhance its technology position when
markets recover.

Cash balances totaled $3.3 billion at June 30, 2001. Agere's
debt is in the form of $2.5 billion in fully drawn revolver and
term loans, which mature in late February 2002. While operating
cash flows will likely be negative over the intermediate term,
the company is expected to limit its capital expenditures and
take other actions to support its liquidity. Agere is also
expected to retain sufficient financial flexibility to implement
its near to intermediate term business plans.

Ratings anticipate that the company will generate operating
profitability consistent with the rating by the end of fiscal
2002, notwithstanding operating losses over the near term.
Still, if the company's performance does not show potential for
meaningful positive EBITDA by the end of fiscal 2002, the
outlook will be reevaluated. Ratings also anticipate that the
company will retain sufficient financial flexibility to continue
its product development program and cost reduction actions in
the intervening period.


AGRO PACIFIC: Enters Deal with Agstar Under Restructuring Plan
--------------------------------------------------------------
Agro Pacific Industries Ltd. announced that it has entered into
a memorandum of understanding to conclude a business combination
with Agstar Power Incorporated, based in Leamington, Ontario.
Agstar is developing a large commercial greenhouse operation and
proposes to acquire, subject to due diligence, board of
directors, shareholder and regulatory approvals, the following
additional assets:

    (a) a fully computerized six acre hydroponics greenhouse
        operation with auxiliary power and auxiliary heat
        currently owned by Glenriver Investments Limited, a
        company based in Leamington, Ontario;

    (b) J-D Marketing (Leamington) Inc., a company based in
        Leamington, Ontario which operates a greenhouse produce
        marketing business which sells approximately $60 million
        of produce per year on behalf of its customers; and

    (c) a group of six related companies based in Leamington,
        Ontario: Veg Gro Inc., Sun Gro Farms Inc., Southpoint
        Produce (1997) Limited, Veg Gro Holdings Inc., Veg Gro
        Sales Inc. and 1037161 Ontario Limited, which jointly
        operate a greenhouse operation, a packing operation, a
        produce sales and marketing business and a trucking
        business with combined annual sales volume of
        approximately $20 million.

These assets are to be sold to Agstar prior to the closing of
the business combination with Agro Pacific in exchange for
shares in Agstar and cash.

Agstar intends to establish large scale state of the art
greenhouse operations and has entered into a Letter of Intent
with Dalsem Horticulture Projects B.V. of The Netherlands,
pursuant to which Dalsem will build, on a turn-key basis, a
series of eleven 22-acre greenhouses. Agstar has acquired
options to purchase approximately 1,138 acres of agricultural
land in Tilbury, Ontario to situate the proposed greenhouse
operations.

Agstar is examining the possibility of developing, pursuant to a
joint venture or otherwise, a 125 megawatt natural gas-fired
power generation plant that will complement its greenhouse
operation. Agstar received a Notice of Approval from the Ontario
Independent Electricity Market Operator on May 29, 2001 (File
No. CAA 2000-023) to connect the proposed power plant
to the hydro grid.

It is proposed that the business combination be carried out
pursuant to a plan of arrangement. Agro Pacific will incorporate
a wholly owned subsidiary which will amalgamate with Agstar. The
shareholders of Agstar would then exchange their Agstar shares
for freely tradeable Class "A" Common shares of Agro Pacific.
Agstar currently has 348,841,209 shares issued and outstanding.
Agstar plans to issue an additional 22,900,000 shares pursuant
to the three proposed acquisitions described above and up to
68,000,000 additional shares pursuant to an offering that will
be completed prior to the plan of arrangement.

In addition, as part of Agro Pacific's restructuring under the
Companies' Creditors Arrangement Act, Agro Pacific's current
unsecured creditors will also receive approximately 21,000,000
freely tradeable Class "A" Common shares of Agro Pacific. There
are currently 7,687,138 Class "A" Common shares of Agro Pacific
issued and outstanding.

Upon completion of the plan of arrangement there will be a total
of up to approximately 468,400,000 Class "A" Common shares of
Agro Pacific, resulting in significant dilution to Agro
Pacific's current shareholders. Agro Pacific contemplates
completing a share consolidation on terms acceptable to the
Toronto Stock Exchange.

Agstar has retained Trinity Capital Corporation for the purpose
of preparing a fairness opinion with respect to the business
combination between Agro Pacific and Agstar from a financial
point of view, which was delivered on June 15, 2001. Agstar has
also retained First Associates, a member of the TSE, as the
sponsor for the initial listing application with the TSE.

The terms of the proposed business combination have been
approved by Agstar's and Agro Pacific's boards of directors, but
have not yet been approved by their respective shareholders. The
business combination will also be subject to the receipt of
regulatory approval from the TSE (which will involve meeting the
TSE's original listing requirements) and court approval from the
Supreme Court of British Columbia.


AMES DEPARTMENT: Court Okays Use of Cash Management System
----------------------------------------------------------
Ames Department Stores, Inc. sought and obtained an order from
the Court authorizing the continuation of their Centralized Cash
Management System.

David H. Lissy, Esq., Senior Vice President and General Counsel
of Ames Department Stores, Inc., relates that in the ordinary
course of business and prior to the Commencement Date, the
Debtors used a centralized cash management system similar to
those utilized by other major corporate enterprises.

Mr. Lissy states that the Debtors' cash management system is
designed to efficiently collect, transfer, and disburse funds
generated through the Debtors' retail operations and to
accurately record such collections, transfers, and disbursements
as they are made.

Mr. Lissy adds that the Debtors' cash management system has been
employed for a number of years and constitutes an ordinary
course, essential business practice.  The cash management system
provides significant benefits to the Debtors including, the
ability to:

   (i) control corporate funds,

  (ii) comply with the provisions of the Revolver,

(iii) ensure the maximum availability of funds when necessary,
       and
   (v) reduce borrowing costs and administrative expenses by
       facilitating the movement of funds and the development of
       more timely and accurate account balance information.

Mr. Lissy asserts that it would be extremely difficult and
expensive to establish and maintain a different cash management
system because the Debtors operate 452 stores that collect cash
and checks.  Mr. Lissy contends that maintenance of the existing
cash management system is in the best interests of the Debtors,
their creditors, and other parties in interest and is necessary
for the effective reorganization of the Debtors' operations.
(AMES Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


AMF BOWLING: Court Approves Interim Compensation Procedures
-----------------------------------------------------------
AMF Bowling Inc. sought and obtained an order from Judge Tice
approving the motion for interim compensation and reimbursement
of expenses of professionals.

The procedures proposed by the Parent and authorized by the
Court on the monthly payment of compensation and reimbursement
of professionals is structured as:

   a) On or before the 28th day of each month following the
      month for which compensation is sought, each professional
      will submit a monthly statement to:

      i) the Parent at AMF Bowling, Inc.,
     ii) the Office of the Clerk of Court
    iii) Stroock & Stroock & Lavan, counsel to the Parent
     iv) Kutak Rock LLP, local counsel to the Parent
      v) counsel to the Committee
     vi) counsel to any other official committee

      Each recipient will have 15 days after the submission of
      the monthly statement to review, if none of the recipients
      objects, the Parent shall be authorized to pay 80% of such
      professional's compensation and 100% of the disbursements
      requested;

   b) In the event that any of the Notice Parties has an
      objection to a particular monthly statement, on or before
      15 days after the submission of the monthly statement,
      such party shall serve the notice parties with a "Notice
      of Objection to the Monthly Statement" with an affidavit
      setting forth the precise nature of the objection and the
      amount at issue. Thereafter, the objecting party and the
      professional whose monthly statement is objected shall
      meet or confer to attempt to reach an agreement regarding
      the correct payments to be made.  If an agreement cannot
      be reached or if no meeting or conferences take place, the
      professional whose monthly statement is objected shall
      have the option of:

      i) filing the monthly statement, the notice of objection
         to the monthly statement and a request for payment with
         the Court

     ii) foregoing payment of the disputed amount until the nest
         interim fee application hearing, at which time the
         Court will consider and resolve the objection

      The Parent shall promptly pay 80% of any portion of the
      compensation and 100% of the disbursements requested that
      are not subject of a Notice of Objection to the monthly
      statement.  In addition, if an agreement is reached
      regarding an objection to a monthly statement, the parties
      to the objection shall submit an explanation of the
      resolution to the Notice Parties.  Following the receipt
      of the explanation, the Parent shall be authorized to pay
      80% of the undisputed compensation and 100% of the
      undisputed disbursements.

   c) The first monthly statement shall be submitted by each of
      the professionals on or before September 28, 2001 and
      shall cover the period from the Petition Date through
      August 31, 2001.

   d) Approximately every 4 months, each of the professionals
      shall file an application for interim approval and
      allowance, of the compensation, including the Holdback,
      and reimbursement of expenses requested for the preceding
      4 months with the Court.  Such application shall be served
      on the Notice parties on or before the 45th day following
      the last day of the period for which compensation is
      sought. The first such application shall be filed on or
      before January 14, 2002 and shall cover the period from
      the petition date through November 30, 2001.

   e) The pendency of a request fro payment of a Monthly
      Statement to which an objection has been made or an order
      of the Court that payment of compensation or reimbursement
      of expenses was improper as to a particular statement
      shall not disqualify a professional from the future
      payment of compensation or reimbursement of expenses as
      set forth above.

   f) Neither the payment of nor the failure to pay monthly
      interim compensation and reimbursement of expenses as
      provided herein shall bind any party in interest or the
      Court with respect to the interim or final allowance of
      applications for compensation and reimbursement of
      expenses.

In addition, Judge Tice rules that each appointed member of any
Committee shall be permitted to submit statement of expenses and
supporting vouchers to the attorneys for the Committee who will
collect and submit such requests for reimbursement in accordance
with the foregoing procedures for monthly compensation and
reimbursement of professionals and orders the Parent to include
all payment to professionals in its monthly operating reports.
(AMF Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


ARCH WIRELESS: S&P Drops Senior Unsecured Notes Due 2004 to D
-------------------------------------------------------------
Standard & Poor's lowered its rating on Arch Wireless
Communications Inc.'s (AWCI) 9.5% $125 million senior unsecured
notes due 2004 to 'D' from single-'C' and simultaneously removed
the rating from CreditWatch. AWCI and Arch Wireless Holdings
Inc. (AWHI) are subsidiaries of Arch Wireless Inc.

The downgrade follows deferral of interest payment due on Aug.
2, 2001, on the 9.5% senior unsecured notes due 2004 issued by
AWCI.

AWCI's recent default on about $8.3 million in interest payment
on the 12.75% senior notes due 2007 has, through a cross-default
provision, brought its senior secured credit facility under
AWHI, the 9.5% senior unsecured notes due in 2004 under AWCI,
and the 14% senior unsecured notes due 2004 under AWCI into
technical default.

Given the recent withdrawal of a debt restructuring plan, weak
capital markets, and Arch's expression of doubt over its ability
to continue as a going concern, there is substantial probability
that Arch and its subsidiaries may seek creditor protection
under Chapter 11. Should the company file for bankruptcy
petition, the remaining ratings would be lowered to 'D' and
removed from CreditWatch.

        RATING LOWERED AND REMOVED FROM CREDITWATCH

   Arch Wireless Communications Inc.           TO   FROM

   9.5% senior unsecured notes due 2004        D    C

         RATINGS REMAINING ON CREDITWATCH NEGATIVE

     Arch Wireless Inc.                                RATING

   Senior unsecured debt                                   C
   10.875% senior discount notes due 2008                  C

   Arch Wireless Communications Inc.

   13.75% senior unsecured notes due 2008                  C
   14% senior unsecured notes due 2004                     C

   Arch Wireless Holdings Inc.

   $302.94 mil. senior secured Tranche                     C
   bank loan due 2006                                      CC
   $175 mil. senior secured Tranche A bank loan due 2005   CC
   $100 mil. senior secured Tranche B bank loan due 2005   CC
   $745 mil. senior secured Tranche B-1 bank loan due 2006 CC


AREMISSOFT: Faces Delisting for Delayed Form 10Q Filing
-------------------------------------------------------
AremisSoft Corporation (Nasdaq:AREME), a leading international
supplier of enterprise-wide software and Internet-enabled
solutions for the manufacturing, hospitality, healthcare and
construction industries, received notice from the NASDAQ stock
market that it will be delisted from the NASDAQ stock market on
August 30, 2001 for failure to timely file its Form 10Q for the
second quarter ended June 30, 2001, among other things.

The Company is actively compiling the requisite information to
be in a position to file its Form 10Q for the second quarter
ended June 30, 2001. After the Company resumes compliance with
its obligations under the Securities Exchange Act of 1934 among
other things, it intends to apply for relisting on the NASDAQ
stock market or another exchange.

Management is focusing particular attention on its Emerging
Market business in order to define the nature and scope of any
problems that may exist in that segment of the business and is
comfortable with current operations in the "Western World",
including its Hospitality, Manufacturing and Construction
businesses.

In addition, AremisSoft continues to invest in its
Healthcare operations and solutions for Emerging Markets
including Bulgaria.

AremisSoft develops, markets, implements and supports
enterprise-wide applications software targeted at mid-sized
organizations in the manufacturing, healthcare, hospitality and
construction industries. The Company's software products help
streamline and enhance an organization's ability to manage and
execute mission-critical functions such as accounting,
purchasing, manufacturing, customer service and sales and
marketing. For more information on AremisSoft access our
website, http://www.aremissoft.com.


ARMSTRONG HOLDINGS: U.S. Trustee Appoints Amended Asbestos Panel
----------------------------------------------------------------
Pursuant to 11 U.S.C. Sec. 1102(a)(1), Patricia A. Staiano, the
United States Trustee for Region III, appearing through Frederic
J. Baker, Senior Assistant United States Trustee, appoints an
amended Official Committee of Asbestos Personal Injury Claimants
to serve in Armstrong Holdings, Inc.'s chapter 11 cases:

       Robert M. Gardner, Sr.
            c/o Galsser and Glasser, P.L.C.
            Attention Richard S. Classer
            Crown Center Building, 6th Floor
            580 East Main Street
            Norfolk, VA 23510
            (757) 625-6787

       Norma H. Garrison,
       Executor of the Estate of Daniel Garrison
            c/o Goldberg, Persky, Jennings & White, P.C.
            Attention Theodore Goldberg, Esq.
            1020 Fifth Avenue
            Pittsburgh, PA 15219
            (412) 471-3980

       Joe Donald Smiley
            c/o Baron & Budd
            Attention Russell W. Budd
            The Centrum
            2102 Oak Lawn Avenue, Suite 1100
            Dallas, TX 75219
            (214) 521-3605

       Kaye Smith,
       Executor of the Estate of Willie Hampton
            c/o Ness, Motley Loadholt, Richardson & Poole
            Attention Joseph F. Rich, Esq.
            28 Bridgeside Blvd.
            P.O. Box 1792
            Mt. Pleasant, SC 29464
            (843) 216-9545

       Issac McKinney
            c/o Silber Pearlman
            Attention Steven T. Baron
            2711 North Haskell Ave., 5th Floor, LB 32
            Dallas, TX 75204
            (214) 874-7000

       Roberta Jeffrey,
       Executor of the Estate of Frank Jeffrey
            c/o Kazan, McClain, Edises, Simon & Abrams
            Attention Steven Kazan, Esq.
            171 Twelfth Street, Third Floor
            Oakland, CA 94607
            (510) 465-7728

       John A. Sprague
            c/o The Jaques Admiralty Law Firm, P.C.
            Attention Alan Kellman
            1370 Penobscot Building
            Detroit, MI 48226
            (313) 961-1080

       Frank H. Biele, Jr.
            c/o Weitz & Luxenberg
            180 Maiden Lane, 17th Floor
            New York, NY 10038
            (212) 558-5500

       Susan Wright,
       Special Administrator of the Estate of Charles Wright
            c/o Cooney & Conway
            Attention John D. Cooney
            120 North LaSalle St., 30th Floor
            Chicago, IL 60602
            (312) 236-3029

       Miron Fidyk
            c/o Jacobs & Crumplar, P.A.
            Attention Robert Jacobs, Esq.
            2 East 7th Street
            P.O. Box 1271
            Wilmington, DE 19899
            (302) 656-5445

Frank J. Perch, III, Esq., is the attorney for the Office of the
United States Trustee assigned to Armstrong's chapter 11 cases.

This amended appointment is the consequence of the resignation
of:

            Christine Wood
            c/o Seeger Weiss
            Attention Diogenes P. Kekatos, Esq.
            One William Street
            New York, NY 10004
            (212) 584-0700

In addition, the Trustee changed the name from "Official
Committee of Asbestos Claimants" to "Official Committee of
Asbestos Personal Injury Claimants". (Armstrong Bankruptcy News,
Issue No. 9; Bankruptcy Creditors' Service, Inc., 609/392-0900)


AT PLASTICS: Exercises Over-Allotment Option & Revamps Board
------------------------------------------------------------
Canada Newswire, Aug. 28

AT Plastics Inc. announced that CIBC World Markets Inc., on
behalf of a syndicate including Yorkton Securities Inc. and
Thomson Kernaghan & Co. Limited, has exercised the over-
allotment option granted by the Company in connection with its
public offering which was completed on August 21, 2001.
2,173,913 common shares will be issued pursuant to the over-
allotment option for gross proceeds of $4,565,217.

The Company also announced that Arnold L. Cader will succeed
Andrew J. Smith as Chairman of the Board of Directors. Mr.
Smith, who has been a director and Chairman of the Board of
Directors of the Company since late 1999, is retiring as a
director.

In addition, as part of the Company's restructuring plan, the
Board will be reduced to five to permit a smaller Board to more
effectively manage the business and affairs of the Company and
to complete the Company's restructuring plan, initiated in July
2001. Consequently, Messrs. John N. Abell, John P. Clarke and
Richard D. Falconer will be retiring from the Board. Going
forward, the Board will consist of Arnold L. Cader, John M.
Cameron, John E. Houghton, Richard Perry, and Gary L.
Connaughty, President and Chief Executive Officer.

AT Plastics develops and manufactures specialty plastics, raw
materials and fabricated products. The Company operates in
specialized markets where its product development and process
engineering have allowed it to develop proprietary and patented
technologies to meet evolving customer requirements in niche
markets. Products are sold in the United States, Canada and
internationally. Web site: http://www.atplas.com


BRIDGE INFORMATION: Seeks Okay to Reject 3 Executory Contracts
--------------------------------------------------------------
After determining that maintaining three executory contracts is
no longer in the Company's best interest, Bridge Information
Systems, Inc. seeks the Court's authority to reject:

Counterparty                              Contract
------------                              --------
Stock Smart, Inc.              Master Subscription Agreement
TSI Communications Worldwide   Public Relations Services
                               Contract
Bolsas y Valores, Ltd.         Optional Service Agreement

Under these contracts, the Debtors receive and/or license
financial data and consulting services from the counterparties
to the Contracts.

David M. Unseth, Esq., at Bryan Cave, relates that the Debtors
now find these contracts unprofitable.  "The goods and/or
services provided to the Debtors under the Contracts are no
longer necessary for the Debtors' ongoing operations and
businesses," Mr. Unseth argues.

If the Court grants the relief requested, Mr. Unseth says, the
Debtors will save $22,300 per month of obligations under these
contracts. (Bridge Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


BRIDGE INFO: Reuters Bid for Assets Clears US Regulatory Review
---------------------------------------------------------------
Reuters, the global information, news and technology group, said
it has been informed that the US government has closed its
review of Reuters bid to acquire certain assets of Bridge
Information Systems Inc. without taking any action or imposing
any conditions.

The bid had been subject to review by the US Department of
Justice under the Hart-Scott-Rodino Antitrust Act since early
May.

Bridge and Reuters are working together with the intention of
satisfying the remaining closing conditions and completing the
transaction within the next few weeks. Accordingly, Reuters has
exercised its right to extend the term of the purchase agreement
to 30 September 2001.

Bridge and some of its affiliates have been in reorganization
proceedings under Chapter 11 of the US Bankruptcy Code since
earlier this year. In late April, Bridge declared Reuters the
winner of an auction for certain of Bridge's business
operations, and the US Bankruptcy Court approved the Reuters bid
in early May.


BRIDGE INFO: SAVVIS to Proceed With 5-Step Plan to Full Funding
---------------------------------------------------------------
SAVVIS Communications Corp. (NASDAQ: SVVS), a global network
services provider, announced today that, in response to the U.S.
Department of Justice (DOJ) its review of Reuters' purchase of
assets of Bridge Information Systems, SAVVIS is on course to
complete its five-step plan to full funding.

"Completion of the sale of Bridge assets to Reuters will be step
four in a five-step plan for SAVVIS, providing the company with
a solid foundation to move toward completion of its fundraising
efforts," said Rob McCormick, chairman and chief executive
officer of SAVVIS Communications.

"SAVVIS expects to successfully replace a major portion of the
revenue from Bridge Information Systems with a contract with
Reuters. The company anticipates receiving the balance of the
revenue upon the Bridge Bankruptcy court's imminent approval of
the sale of Bridge's Telerate business to MoneyLine. SAVVIS has
negotiated a five-year, minimum $122 million network services
contract with MoneyLine."

"Exclusive of the Bridge revenue, SAVVIS grew its new customer
base 53% year-over-year," said Jack Finlayson, president and
chief operating officer of SAVVIS Communications. "Despite the
problems of the Bridge bankruptcy and the slowing economy,
SAVVIS continued to grow its new customer base 10% from the
first to the second quarter of this year, while most other
companies in the Morgan Stanley Dean Witter Internet
Infrastructure Services sector showed little or no net growth in
the same period."

"SAVVIS expects to replace the Bridge revenue stream, which
approximates $14 million per month, with Reuters revenue,
approximating $9-10 million per month," said David Frear, chief
financial officer of SAVVIS. "With the approval of MoneyLine's
purchase of Bridge's assets, we estimate our total revenue
replacement will be $14-16 million per month. As a result,
SAVVIS will have successfully diversified our customer base with
financially strong companies and more profitable revenue."

Frear continued, "SAVVIS' non-Bridge revenue growth from Q1 to
Q2 this year was 11% versus the 2% average for the Morgan
Stanley Dean Witter Internet Infrastructure Services sector. The
fact that the company is performing better than its sector in
top-line growth, coupled with its aggressive cost reduction
initiatives, make us a much stronger company going forward. We
estimate the company's EBITDA loss will decrease from $8 million
to $3 million per month by year end."

Summarizing the five-step plan, Rob McCormick said, "SAVVIS laid
the groundwork for success in steps one and three, negotiating
the network services agreements with Reuters and MoneyLine. Step
two was to streamline our cost structure, from which we
anticipate saving over $40 million annually and improving EBITDA
by 60%. Step four, completion of the Reuters deal is now
significantly closer with termination of the DOJ review.

This paves the way for step five - full finding. In the
meantime, SAVVIS has continued to grow our revenue and customer
base, as well as receive industry recognition for our
Intelligent IP networking(SM) services, which were recently
named Product of the Year for 2001 by the editors of Network
Magazine in their Services Category."

SAVVIS Communications (NASDAQ: SVVS) is the premier service
provider of Intelligent IP solutions, and the first to deliver
Internet economics to private IP networks. As a result, the
benefits of high-end private networks are now accessible to
small and medium-sized businesses, while the Fortune 1000 can be
more nimble in the execution of their e-commerce strategies.

SAVVIS' state-of-the-art global IP platform provides a full
range of customer-specified Internet, intranet and extranet
networks, combining the flexibility and fast time-to-market of
the Internet, with the QoS, security and reliability of Private
IP networks. The company also provides managed hosting and
colocation services.

SAVVIS has a dominant presence in the financial services market,
operating Financial Xchange(TM), which connects to more than
4,700 financial institutions, including 75 of the top 100
worldwide banks and 45 of the top 50 brokerage firms.


CHIPPAC INC.: S&P Concerned About Low EBITDA Interest Coverage
--------------------------------------------------------------
Standard & Poor's revised its outlook on the ratings of ChipPAC
Inc. to negative from stable. At the same time, Standard &
Poor's affirmed its single-'B'-plus corporate credit and bank
loan ratings, and its single-'B'-minus subordinated debt rating.

The outlook revision reflects declining industry conditions and
expected further deterioration in interest coverage and debt to
EBITDA measures over the next few quarters.

The ratings reflect ChipPAC's good position as the fourth
largest independent provider of semiconductor assembly and test
services, and strong technology base offset by price pressures,
high leverage, and a concentrated customer base.

The highly competitive independent semiconductor-packaging
segment is currently facing a severe cyclical downturn, an
accelerated decline in average selling prices, and industry
overcapacity.

Timing for recovery in the segment is uncertain and visibility
in the semiconductor industry overall is low. While ChipPAC has
diversified its end-markets, customer concentration remains
higher than at its peers. Although revenues have dropped sharply
from mid-2000, ChipPAC held sequential revenues flat in the June
quarter versus its peers, who mostly experienced sequential
revenue declines.

Santa Clara, Calif.-based ChipPAC is highly levered following
its July 1999 leveraged buyout and a less-than-expected amount
of debt reduction following its August 2000 IPO. In June 2001,
ChipPAC issued an additional $65 million in subordinated notes
in private transactions. The proceeds of the new issues were
partly used to repay bank debt issued in the Intersil
acquisition. Total debt is now at $344 million.

During 2000, the company acquired Intersil Corp.'s Malaysia-
based packaging and testing facilities and strengthened its
position with Qualcomm Inc. concurrent with that company's $25
million equity investment in ChipPAC. These actions have
broadened ChipPAC's customer base and should benefit longer-term
revenues, although the enlarged capacity has also increased the
company's fixed costs and labor force. ChipPAC is in the process
of aggressively cutting costs to be more in line with lower
expected revenues.

The company expects September 2001 quarter revenues to fall 10%
to 15% from June 2001. Despite accelerated cost cuts, near-term
profitability and cash flow measures will be challenged. EBITDA
interest coverage is expected to fall from 3.5 times in 2000 to
under 2x in the September 2001 quarter based upon last 12 months
EBITDA.

Debt of $344 million will approach 5x EBITDA in the September
quarter. Capital expenditures for 2001 have been scaled back
materially to $40 million from an initially planned $110
million. Availability of $40 million in a revolving credit line,
which expires in 2005, supports cash balances of $13 million as
of June 30, 2001.

Outlook: Negative.

Sustained deterioration in profitability or other financial
measures could result in lower ratings.


COMDISCO INC: U.S. Trustee Appoints Unsecured Creditors' Panel
--------------------------------------------------------------
Ira Bodenstein, the United States Trustee for Region 11,
appoints nine unsecured claimants to the Official Committee of
Unsecured Creditors in Comdisco Inc.'s Chapter 11 cases:

             Well Fargo Bank Minnesota, N.A.
             MAC N9303-120
             Sixth & Marquette
             Minneapolis, Minnesota
             Attn: Gavin Wilkinson

             Mizuho Trust & Banking (USA)
             666 Fifth Avenue
             Suite 802
             New York, New York 10103
             Attn: Arnold Gulkowitz

             Prudential Investment Management, Inc.
             Two Gateway Center
             Newark, New Jersey
             Attn: Maureen Baker

             Bank of America, N.A.
             901 Main Street
             66th Floor
             Dallas, Texas 75202
             Attn: E.J. "Pete" Joost

             Citibank, N.A.
             599 Lexington Avenue
             New York, New York 10043
             Attn: Randolph I. Thornton, Jr.

             Royal Bank of Scotland Group
             5-10 Great Tower Street
             London EC 3P 3HX
             Attn: Geoff Cruickshank

             Verizon
             c/o Darryl Laddin
             Arnall Golden Gregory LLP
             1201 W. Peachtree Street
             Suite 2800
             Atlanta, Georgia 30309-3450
             Attn: Tom Browning

             Credit Lyonnais
             1301 6th Avenue
             New York, New York 10019
             Attn: James B. Hallock

             PPM America, Inc.
             225 W. Wacker Dr.
             12th Floor
             Chicago, Illinois 60606
             Attn: Stuart Lissner
(Comdisco Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


COVAD COMMS: Seeks Approval to Hire MOFO as Litigation Counsel
--------------------------------------------------------------
Covad Communications Group, Inc. seeks to employ and retain
Morrison & Foerster, LLP (MOFO) as its special litigation
counsel to represent it in various litigation matters.

Laura Davis Jones at Pachulski Stang Ziehl Young & Jones P.C. in
Wilmington, Delaware discloses that the Debtor seeks to retain
MOFO as its special litigation counsel because of its extensive
experience and knowledge in the field of securities litigation.
Ms. Jones adds that MOFO is familiar with the Debtor's business
affairs and many potential legal issues that may arise in these
cases.   MOFO is currently representing or in the past has
represented the Debtor in various litigation matters such as:

(1) provided the Debtor with advice on general labor issues ;

(2) defended the Debtor in an employee lawsuit;

(3) provided the Debtor with advice and representation regarding
     potential SEC enforcement proceedings.

Ms. Jones informs the Court that MOFO will be charging for its
services on an hourly basis plus reimbursement of actual,
necessary expenses incurred by the firm.  The principal
attorneys and paralegals designated to represent the Debtor are:

      Name                      Hourly Rate
      -------------------       -----------
      Melvin Goldman               $550
      Jack Auspitz                 $550
      Patricia Mar                 $450
      Jordan Eth                   $410
      Eric Roberts                 $405
      James Hough                  $400
      Kenneth Kuwayti              $360
      Daniel Levy                  $315
      Hillary Williams             $315
      Roderick Chin                $300
      Dorothy Fernandez            $290
      Robert McKague               $290
      James Moloney                $290
      Mark Krause                  $250
      Fred Karem                   $250
      James Messenger              $250
      Felton Newell                $250
      Tammy Albarran               $230
      Richard Andrews              $160
      Christopher Chiang           $125
      Spencer Ferguson             $115
      Thomas Beyer                 $110
      Donna Nguyen                 $ 95

Ms. Jones discloses that MOFO has received $500,000 from the
Debtor for preparation of initial documents and the proposed
pre-petition representation of the Debtor.

Jordan Eth, Esq., a member of Morrison & Foerster, LLP contends
that the firm does not have any connection with the Debtor,
creditors or other parties-in-interest except that it has
represented the Debtor in several securities-related litigation
matters. (Covad Bankruptcy News, Issue No. 3; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


DRUG EMPORIUM: Bankruptcy Court Confirms Plan of Reorganization
---------------------------------------------------------------
Drug Emporium, Inc. announced today that its Chapter 11 Plan of
Reorganization was confirmed by the United States Bankruptcy
Court in Youngstown, Ohio.

The Plan provides for the sale of 100% of reorganized Drug
Emporium's capital stock to Snyder's Drug Stores, Inc. for a
cash purchase price of $21,000,000 plus the assumption of
certain liabilities. Under the Plan, no distribution will be
made to Drug Emporium's current shareholders, and all existing
Drug Emporium shares will be canceled.

The Plan will go into effect upon the completion of the
documentation required by the Plan and the closing of a $160
million revolving loan facility and a $40 million term loan
facility for which Snyder's and Drug Emporium have received
commitments. The loan facilities will be utilized to fund cash
costs of exiting Chapter 11 as well as to fund the working
capital needs of both Drug Emporium and Snyder's going forward.

In addition, a major supplier of pharmaceutical goods to both
companies has agreed to provide $40 million in credit
enhancements to the new loan facilities as well as enter into a
long-term supply agreement with the new combined company.
Snyder's will operate Drug Emporium as a separate wholly-owned
subsidiary. The transaction is expected to close in September
2001.

Gordon Barker, President and CEO of Snyder's, remarked, "We are
pleased that the Bankruptcy Court confirmed Drug Emporium's
reorganization plan and approved our purchase of Drug Emporium.
We have thoroughly reviewed Drug Emporium's operations during
the reorganization proceedings and have a firm understanding of
Drug Emporium's business.

"We expect the acquisition of Drug Emporium to be a seamless
transaction that will provide Drug Emporium and Snyder's with
the capital base to continue and expand operations. We will be
working very closely with Drug Emporium's suppliers to eliminate
any uncertainties that they may have regarding Drug Emporium's
financial status."

Snyder's Drug Stores was founded in 1929 and is headquartered in
Minnetonka, Minnesota. Snyder's owns and operates 81 corporate
stores and supports over 100 independent retailers in Iowa,
Illinois, Michigan, Minnesota, Montana, South Dakota, and
Wisconsin under the Snyder's name through its distribution
center in Eagan, Minnesota.

Drug Emporium, Inc. owns and operates 77 brick-and-mortar stores
under the names Drug Emporium, F&M Super Drug Stores and Vix
Drug Stores. All of the brick-and-mortar stores operate full-
service pharmacies and specialize in discount-priced merchandise
including health and beauty aids, cosmetics and greeting cards.
The company also franchises additional stores under the Drug
Emporium name. Drug Emporium, Inc. is headquartered in Powell,
Ohio.


FAIRFIELD MFG: S&P Drops Ratings Due to Weakening Performance
-------------------------------------------------------------
Standard & Poor's lowered its ratings on Fairfield Manufacturing
Co. Inc. In addition, the ratings were removed from CreditWatch,
where they were placed on April 30, 2001.

The outlook is negative.

The rating downgrades reflect Fairfield's much weaker-than-
expected financial performance, which has resulted in a severe
deterioration of credit protection measures, and Standard &
Poor's expectation that the company's financial performance and
credit protection measures will remain below previously expected
levels.

Lafayette, Ind.-based Fairfield is the leading independent North
American producer of custom gears and planetary gear systems
sold to a diverse range of transportation, mining, road
construction, agriculture, and maintenance machinery
manufacturers.

The company's financial performance continues to be weaker than
expected as a result of very soft end-market demand in key
markets (especially in the aerial platform market). In addition,
the company is experiencing increasing pricing pressures as a
result of international competition. Operating income for the
first six months of 2001 was $7.5 million compared with $13
million for the same period in 2000, a 42% decline.

Fairfield is currently undertaking initiatives to improve
financial performance including reducing capital spending and
manufacturing overhead. In addition, the company continues to
work on completing its facility in India, which is expected to
help reduce production costs and improve operating performance.
However, end-market conditions are expected to remain
challenging and could offset much of the benefits.

As of June 30, 2001, total debt to EBITDA was around 6.1 times
and interest coverage was around 1.4x. Standard & Poor's had
expected total debt to EBITDA in the 3.5x area and interest
coverage of between 2.5x and 3.5x.

The company has a $2.9 million dividend payment associated with
its $50 million 11.25% preferred stock on Sept. 15, 2001. The
company does have the option to pay in cash or to issue
additional preferred shares as it did with its March 15, 2001,
payment. Additionally, Fairfield has a $4.8 million interest
payment on its $100 million subordinated notes due Oct. 15,
2001. As of June 30, 2001, the company had $11 million in cash.

During the second quarter the company was in violation of its
bank covenants, however the company received amendments and has
full availability of its $20 million revolving credit facility.
Current ratings assume that financial performance will stabilize
and start to show modest improvement in the intermediate term.
In the future, total debt to EBITDA is expected to average 5.0x-
5.5x over the business cycle, and interest coverage is expected
to be about 2.0x.

                       Outlook: Negative

Financial stress could increase if Fairfield experiences a
continuing weakening in business conditions, or if the benefits
expected from the company's new facility in India are delayed.
Failure to improve financial performance and credit protection
measures could result in increasing liquidity pressures and
additional downgrades.

          Ratings Lowered & Removed From CreditWatch

                                     TO        FROM

Fairfield Manufacturing Co. Inc.

  Corporate credit rating            B         B+
  Subordinated debt                  CCC+      B-
  Preferred Stock                    CCC-      CCC+


FOAMEX INTL: May Spend $1.4MM For Restructuring until Year-End
--------------------------------------------------------------
Net sales of Foamex International, Inc., for the second quarter
of 2001 decreased 2.6% to $314.3 million from $322.7 million in
the second quarter of 2000.  The decrease was primarily
attributable to lower sales in Foam Products, Carpet Cushion
Products and Technical Products  segments, partially offset by
increases in Automotive Products and Other segments. Net income
for the second quarter of 2001 was $10.2 million compared to
$8.0 million recorded in the second quarter of 2000.

Net sales for the first half of 2001 decreased 5.5% to $616.2
million from $651.8 million in the first half of 2000.  Lower
sales were recorded in all segments.

Net income for the first half of 2001 was $16.6 million compared
to $9.8 million recorded in the first half of 2000.

Total debt at the end of the second quarter of 2001 was $686.2
million, down $25.7 million from year-end 2000. As of June 30,
2001, there were $131.2 million of revolving credit borrowings,
at a weighted average interest rate of 7.98%, under the Foamex
L.P. credit facility with $20.1 million available for additional
borrowings and $21.2 million of letters of credit outstanding.
There was less than $0.1 million of borrowings by Foamex Canada
Inc. as of June 30, 2001 under Foamex Canada's revolving credit
agreement with unused availability of approximately $5.2
million.  Foamex Carpet did not have any outstanding borrowings
under the Foamex Carpet credit facility at June 30, 2001, with
unused availability of $15.0 million.

The Company paid $4.4 million during the first half of 2001 for
the various restructuring plans recorded as of December  31,
2000 and during the first and second  quarters of 2001. As of
June 30, 2001, the components of the net accrued restructuring
and other charges balance included $3.9 million for plant
closure and lease costs and $1.5 million for personnel
reductions.

All employees impacted by the first and second quarter 2001 work
force reductions were terminated by the end of the second
quarter of 2001.  Approximately $1.4 million is expected to be
spent during the remainder of 2001 for the various restructuring
plans.

          Interest and Debt Issuance Expense

Interest and debt issuance expense totaled $33.9 million in the
first half of 2001, which represented a 9.2% decrease from the
2000 first half expense of $37.4 million.  The decrease was
attributable to lower average debt levels and lower effective
interest rates.

A provision of the Foamex L.P. credit facility requires an
incremental interest rate margin based on the debt leverage
ratio, as defined.  During the third quarter of 2001, a total of
75 basis points will be the cumulative adjustment to the
applicable interest rate margin.

                             *  *  *

Foamex, as of June 30, 2001, has total liabilities (inclusive of
long-term debts) of $836 million exceeding its assets of $689
million. Also, as of the same date, the company's leverage ratio
stands at 5.1 to 1.00, slightly above the 5.00 to 1.00 mark.
However, this has been reduced from 5.3 to 1.00 as of December
31, 2000.

The possibility exists that certain financial covenants will not
be met if business conditions are other than as anticipated or
other unforeseen events impact results.  In the absence of a
waiver of or amendment to such financial covenants, such
noncompliance would constitute a default under the applicable
debt agreements, and the lenders would be entitled to accelerate
the maturity of the indebtedness outstanding thereunder.

In the event that such noncompliance appears likely, or occurs,
Foamex L.P. will seek the lenders' approvals of amendments to,
or waivers of, such financial covenants. Historically, Foamex
L.P. has been able to renegotiate financial covenants and/or
obtain waivers, as required, and management believes such
waivers and/or amendments could be obtained if required.
However, there can be no assurance of future amendments or
waivers will be obtained.


GENESIS HEALTH: Gets Okay to Reject Executory Contracts & Leases
----------------------------------------------------------------
Genesis Health Ventures, Inc. & The Multicare Companies, Inc.
motion for the rejection of 23 executory contracts, 34 unexpired
equipment leases and 5 unexpired leases of nonresidential real
property was granted with modification, pursuant to sections
105(a) and 365(a) of the Bankruptcy Code and Rule 6006 of the
Bankruptcy Rules.

At the Debtors's behest, Judge Wizmur authorized the rejection
of:

      (A) 4 Service and Supply Contracts;

      (B) 1 Vending Contracts

      (C) 8 Facility Contracts

      (D) 9 NeighborCare Contracts

      (E) 1 Partnership Agreement

      (F) 34 Equipment Leases

      (G) 5 Warehouse Leases

Judge Wizmur directs that the authority for rejection does not
include two other Vending Contracts, one of which is between the
Debtors and Vending Services, LLC and the other is between the
Debtors and Real Time Data of Philadelphia, Inc.

At the Court's instruction, the rejection of the non-residential
real property lease between Neighborcare and HPS Joint Venture
governing the property located in Upper Marlboro, Maryland is
not effective yet. The rejection will be effective as of
November 1, 2001.  (Genesis/Multicare Bankruptcy News, Issue No.
12; Bankruptcy Creditors' Service, Inc., 609/392-0900)


GRAY COMMS: S&P Assigns B+ On Proposed $250MM Bank Facility
-----------------------------------------------------------
Standard & Poor's assigned its single-'B'-plus bank loan rating
to Gray Communications Systems Inc.'s proposed $250 million
senior secured bank facility. All existing ratings are affirmed.
The outlook is stable.

The ratings reflect the strong market positions of Gray's TV
stations, its moderate geographical and operational diversity,
the overall good free cash flow of television broadcasting, and
the company's experienced management team.

These factors are balanced by an aggressive financial profile, a
debt-reliant acquisition strategy, and the slow growth and
somewhat cyclical nature of its core TV and newspaper
operations.

Gray owns and operates 13 network affiliated TV stations in 11
medium and small markets, four daily newspapers, a paging
business, and a satellite uplink and production company.
Television broadcasting generates about 70% of Gray's revenue
and 80% of its cash flow. Ten of the stations are CBS affiliates
and three are NBC affiliates. Gray's stations hold the leading
local news ratings in nine markets.

These factors help the TV segment produce respectable broadcast
cash flow margins in the low-to mid-40% range. Nonetheless,
companywide profits will be lower in 2001 due to the impact of
the slowing economy on ad revenues, although Gray's high
concentration of stable local advertising has somewhat reduced
this affect.

In addition, other issues will pressure television results in
2001, including the off-year in the bi-annual election cycle,
the absence of Olympic revenues on its three NBC stations, and
the phasing out of network compensation payments at 3 CBS
affiliates. Eventually all network compensation payments are
likely to end, however, the majority of Gray's remaining network
agreements run through at least 2004.

Revenues in 2002 should benefit from important political races
in Gray's markets and the Winter Olympics on its three NBC
affiliates. Economic weakness, however, is likely to continue at
least through early 2002.

Long-term growth is expected to be modest due to the mature
nature of the network TV broadcasting and newspaper industries,
and increased competition from other advertising media. In
addition, the newspaper industry has experienced steady
circulation declines, although Gray's papers have performed
relatively well as a result of targeted strategies.

Gray's profitability in 2001 has held up better than some of its
competitors because of its strong market positions and cost
saving initiatives implemented in early 2000. Nonetheless, the
company's debt to EBITDA ratio at year-end is likely to exceed 7
times compared with 6x in 2000 and EBITDA coverage of interest
expenses should decline to about 1.4x from 1.6x in 2000.

Also, regulatory requirements that mandate digital broadcasting
by May of 2002 will increase capital expenditure requirements by
almost $25 million in 2001 and 2002, with no near-term return on
investment expected. Deferred payment terms from its digital
equipment supplier will reduce the immediate cash impact, but
will still substantially reduce free cash flow into 2003.

Standard & Poor's expects Gray to continue to pursue
acquisitions, although the company's high leverage and thin
coverage and the financial covenants will limit its flexibility.
There is little flexibility within the current ratings for debt-
financed acquisitions, especially given near term pressures.

The proposed bank loan, which is rated at the same level as the
corporate credit rating, consists of a $50 million revolving
loan and a $200 million term loan. Proceeds will be used to
repay the existing bank loan. The facility benefits from a
blanket lien on Gray and its subsidiaries, excluding real estate
and a direct lien on its broadcasting licenses which cannot be
pledged, but including a pledge on the stock of subsidiaries
that hold its licenses.

Standard & Poor's simulated default scenario assumed that the
revolver was fully drawn and that cash flow and asset values
were at distressed levels. Factors that could lead to a default
include further debt-financed acquisitions, a drop in operating
performance caused by increased competition or a more severe or
prolonged advertising slump, or a combination of these.

Under such a scenario, Standard & Poor's expects that the
collateral would provide the bank lenders with considerable
protection and enable them to achieve materially better recovery
rates than unsecured creditors. Nonetheless, it is not clear
that a distressed enterprise value would be sufficient to cover
the entire facility in a distressed scenario given the
relatively small proportion of junior debt in Gray's capital
structure.

                       Outlook: Stable

Cyclical forces are likely to depress profits and result in key
credit ratios that are weak for the current rating for the next
six to 12 months, after which profitability and credit measures
are expected to improve. A more severe or prolonged
deterioration than is presently expected or an increase in
leverage to fund acquisitions could undermine stability.

                       Rating Assigned

Gray Communications Systems Inc.                     Rating
   Senior secured bank loan rating                     B+

                      Ratings Affirmed

Gray Communications Systems Inc.                     Ratings
   Corporate credit rating                             B+
   Subordinated debt                                   B-


HARNISCHFEGER INDUSTRIES: Moves to Limit and Split Service Lists
----------------------------------------------------------------
Harnischfeger Industries, Inc. anticipate that many of their
creditors will no longer wish to continue to receive service of
all papers in these cases after the Initial Payment Date in
their cases on or about July 31, 2001. On the other hand, much
activity remains to occur with respect to the wind-down of the
Liquidating Debtors.

To save duplicating and mailing costs, and to reduce unwanted
papers that creditors have to sift through, the Debtors request
entry of an order

       (a) limiting the 2002 List to those parties that
           affirmatively request to continue to receive service;
           or in the alternative,

       (b) splitting the 2002 List into one list for the
           Reorganizing Debtors and a second list for the
           Liquidating Debtors; and

       (c) allowing service of the Hearing Agenda by email.


   (a) Limiting the 2002 List

The Debtors propose that any party wishing to remain on the 2002
List so notify Bankruptcy Management Corporation by completing
the form annexed to the Motion as Exhibit A.

BMC will serve a copy of the Order granting this Motion and
Exhibit A on all parties on the 2002 List. The proposed Order
requires that such completed form must be returned to BMC within
20 days of service of the order approving this Motion and
Exhibit A and enables each entity listed on the 2002 List to
choose whether they desire to remain on the Liquidating Debtors'
2002 list or the Reorganizing Debtors' 2002 list, or both.

The proposed Order provides that any party now on the 2002 List
that does not timely return the form indicating its desire to
remain on the list will be deleted from the 2002 List. If a
party returns Exhibit A to BMC without electing to remain on
either the Liquidating Debtors' 2002 list or the Reorganizing
Debtors' 2002 list, that party will be kept on both lists.

   (b) Splitting the 2002 List

In the alternative, if the Court does not grant the Debtors'
request to limit the 2002 List to those parties that
affirmatively request to continue to receive service and to
split the 2002 List per each party's election on Exhibit A, the
Debtors request that the current 2002 List be bifurcated between
the Reorganizing Debtors and the Liquidating Debtors.

Of the parties who do wish to continue to receive service of all
papers in these cases, many parties will be interested in only
receiving notice regarding the Reorganizing Debtors and not the
Liquidating Debtors, or vice versa. Therefore, the Debtors
propose dividing the 2002 List into two lists, one list
maintained by the Reorganizing Debtors and another list
maintained by the Liquidating Debtors.

Most of the parties now included on the 2002 List are creditors
of the Debtors. The Debtors propose to split the current 2002
List based on whether a party has filed a claim against a
Reorganizing Debtor or against a Liquidating Debtor.

BMC compared the current 2002 List to creditors on the Official
Claims Register, and generated three lists:

Exhibit B attached to the motion includes parties now on the
           2002 List that have filed claims against a
           Reorganizing Debtor. If Part A of this Motion is not
           granted, these parties will be on the new 2002 list
           maintained by the Reorganizing Debtors;

Exhibit C includes parties now on the 2002 List that have filed
           claims against a Liquidating Debtor. If Part A of
           this Motion is not granted, these parties will be on
           the new 2002 list maintained by the Liquidating
           Debtors; and

Exhibit D includes parties now on the 2002 List whose interest
           could not be determined by comparison to the Official
           Claims Register. If Part A of this Motion is not
           granted, these parties will be on both new lists.

   (c) Service of the Hearing Agenda by Email

Pursuant to Local Rule 9029-3(a)(iii), the Reorganizing Debtors
serve a copy of the Hearing Agenda for their hearings, and the
Liquidating Debtors serve a copy of the Hearing Agenda for their
hearings, on interested parties by noon two business days before
the date of a hearing.

To save cost associated with duplication of effort and delivery
by existing means, the Debtors request permission to serve the
Hearing Agenda on interested parties by email. The Debtors will
transform into electronic versions any exhibits to the Hearing
Agenda and attach such documents to the Hearing Agenda.
Interested parties will use the form attached as Exhibit A to
the motion to supply BMC with their email address within 20 days
of service of the Order granting this Motion (or later if such
later date is acceptable to the Debtors). BMC will provide the
email addresses to the official docket agent so that all
provided email addresses will not become publicly available.
(Harnischfeger Bankruptcy News, Issue No. 47; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


HYNIX SEMICON: Proposed Debt Swap Prompts S&P to Junk Ratings
-------------------------------------------------------------
Standard & Poor's lowered its long-term ratings on Korean-based
Hynix Semiconductor Inc. and its subsidiary Hynix Semiconductor
Manufacturing America Inc. (HSMA) to triple-'C'-plus from
single-'B'. The ratings remain on CreditWatch, where they were
placed with negative implications on Aug. 21, 2001.

The downgrades are prompted by reports that Korea Exchange Bank,
Hynix's main creditor bank, together with other creditor banks,
is considering debt-for-equity swaps and various other types of
financial support for the company. Should the new financial
support package include a debt-for-equity swap (a measure that
Hynix reportedly strongly opposes) or any other terms that are
detrimental to some classes of creditors, the issuer credit
ratings on Hynix and HSMA will be revised to 'SD' (selective
default). The issue rating on HSMA's notes due 2004 and 2007 may
be adjusted, depending on the exact terms of the refinancing
package.

        Ratings Lowered, Still On CreditWatch Negative

        Hynix Semiconductor Inc.

          Corp credit rating      CCC+

        Hynix Semiconductor Manufacturing America Inc.

          Corp credit rating      CCC+
          Senior secured debt     CCC+


INFU-TECH: Chapter 11 Case Summary
----------------------------------
Debtor: Infu-Tech, Inc., a New Jersey Corp.
        374 Starke Road
        Carlstadt, NJ 07072

Chapter 11 Petition Date: August 22, 2001

Court: District of New Jersey (Newark)

Bankruptcy Case No.: 01-39407

Judge: Novalyn L. Winfield

Debtor's Counsel: Howard Greenberg, Esq.
                  Ravin, Greenberg & Marks
                  101 Eisenhower Parkway
                  Roseland, NJ 07068-1028
                  973-226-1500


INTERACTIVE NETWORK: Perkins Capital Discloses 16.9% Equity
-----------------------------------------------------------
Perkins Capital Management, Inc. beneficially owns 7,269,000
shares of the common stock of Interactive Network Inc.

The 7,269,000 shares includes 2,684,000 common equivalents,
2,985,000 warrants exercisable within 60 days and 800,000 shares
convertible as 1 for 2 (or 1,600,000) of a Convertible Note. The
amount held represents 16.9% of the outstanding common stock of
the Company.

Of the shares held Perkins Capital Management, Inc. holds sole
voting power over 2,344,500 shares, and sole dispositive power
over the total held of 7,269,000 shares.

            Liquidity & Capital Resources

The Company consummated a settlement agreement in 1998 with its
secured senior noteholders and has paid all undisputed claims
under its confirmed plan of reorganization. A substantial
portion of the proceeds received from the noteholders was
allocated to pay creditors and a large portion of those funds
were set aside in a reserve account for the payment of creditors
whose claims the Company is continuing to dispute.

The Company currently expects its need for working capital for
the remainder of fiscal year 2001 to consist largely of general
and administrative expenses, repayment of debt due in 2001,
professional fees and patent development and marketing expenses
to establish a groundwork for generating revenues from our
intellectual property assets.

Between September 13, 2000 and December 31, 2000, the Company
raised $3.1 million through the sale of 2,541,672 units to
private investors pursuant to a Stock Purchase and Investment
Agreement dated September 13, 2000. Each unit consists of one
share of its common stock and a five-year warrant to purchase
one share of its common stock at an exercise price of $1.90 per
share. The proceeds funded its operations into the second
quarter of 2001, with the investors retaining substantial
control over the use of proceeds from their investment.

Interactive Network was originally founded to provide
interactive television services, which we began providing in
1991. It incurred significant expenses in developing, testing
and marketing our services, and is forced to curtail its
operations by August 1995 due to lack of ongoing financing.
While in operation, the Company acquired key strategic investors
such as TCI Cable (now a part of AT&T), NBC, Gannett, Motorola,
Sprint, and AC Nielson.

Today, the Company owns certain intellectual property assets
related to the interactive television market and other
interactive technology. Its prior strategic investors remain as
its stockholders. It continues to concentrate on exploiting its
patent portfolio in a cost-effective way through licenses, joint
ventures, strategic alliances, or other methods that do not
involve large overhead demands. In the event that its proposed
merger with TWIN Entertainment is consummated, as discussed
below, the Company believes that TWIN Entertainment will engage
in restrictive licensing of its intellectual property and focus
on developing and licensing products and services that utilize
the Company's patents and Two Way TV's technology.


LOEWEN: LLCs Call for Dismissal of Michigan Chapter 11 Cases
------------------------------------------------------------
Certain companies of The Loewen Group, Inc. that are
corporations organized and existing under the laws of Michigan,
plus HMP Acquisition, Inc., a corporation organized and existing
under the laws of Delaware (the Michigan Debtors) and certain
L.L.C.s, which are limited liability companies organized and
existing under the laws of Michigan, are in dispute over certain
pre-petition Cemetery Transactions. The dispute is the subject
of an Adversary Proceeding in the LGII jointly administered
chapter 11 cases.

Prior to the commencement of the LGII cases, the Debtors
purchased the Michigan Debtors pursuant to various stock
purchase transactions. As mentioned by the Debtors in previous
motions, because Michigan law generally proscribes joint
ownership of cemeteries and funeral homes, after being acquired
by the Debtors, the Michigan Debtors transferred legal title to
the Cemeteries to certain LLCs, pursuant to respective Asset
Purchase Agreements.

Each of the thirteen/fourteen transactions (the Debtors
mentioned 13 and the LLCs mentioned 14) conducted during the
years 1996, 1997 and 1998 were structured similarly with
different purchase prices and financial terms for the respective
specific transactions. In January 1998, Craig R. Bush, a former
in-house counsel and officer of the Debtors, acquired ownership
of the LLCs, which had until then been owned and controlled by
Hudson A. Mead.

The Debtors noted in previous motions that the legal work in
connection with he transfer was performed by Craig Bush. Both
the economic burdens and benefits of the cemetery properties
were structured to pass through the LLCs to Loewen by
arrangements set forth in the "Cemetery Transaction Documents".

Under the Asset Purchase Agreements, the LLCs paid at lease 10%
of the purchase price to the applicable Michigan Debtor at
closing. The remaining amount was payable in the form of a ten-
year Promissory Note. In addition, pursuant to each Asset
Purchase Agreement, the LLCs and LGII entered into  Sales
Agreement, an Option Agreement and an Amending Agreement.

Under a Sales Agreement, Loewen was to deposit receipts from the
cemetery operations on a daily basis into Operating Accounts
opened in the names of the LLCs, and then pay the LLCs a
management fee on a monthly basis, amounting to reimbursement of
operating costs plus a 20% annual return on the initial amount
paid to acquire the cemeteries.

After the commencement of the chapter 11 cases, the LLCs advised
the Debtors that they had stopped the transfer of funds from the
Operating Accounts to the Debtors to ensure that sufficient
funds were available to satisfy certain obligations for which
the LLCs would be liable if the Debtors failed to pay such
obligations.

Disputes thus arose between the Debtors and the LLCs regarding
cash receipts generated by the operation of the 28 cemeteries in
the State of Michigan in which the Debtors hold interests.

                  The Adversary Proceeding

The Michigan Debtors commenced an adversary proceeding (Case No.
A-00-929) on September 14, 2000, against the LLCs. The LLCs
responded by filing a motion to dismiss the Complaint. After
that, the Michigan Debtors amended their Complaint, and the LLCs
renewed their motion to dismiss.

On January 22, 2001, the Michigan Debtors sought the Court's
permission to amend their Complaint once again. Concurrently
with the filing of the Second Amended Complaint, the Michigan
Debtors also filed a motion for preliminary injunction. The
Court denied the Preliminary Injunction Motion, but permitted
the Michigan Debtors to amend their Complaint, and the LLCs
renewed their motion to dismiss the Second Amended Complaint.

By its Second Amended Complaint, the Michigan Debtors seek, in
part:

(A) a determination that the Michigan Debtors hold the
     equitable title to the 28 cemetery properties located in
     the State of Michigan to which the LLCs presently hold
     legal title and directing that Defendants turnover legal
     title of the Michigan Cemeteries to them presumably without
     any compensation;

(B) in the alternative, to undo the sale of the cemeteries to
     the LLCs asserting that the transfers were fraudulent
     conveyances;

(C) an order requiring the LLCs to comply with the terms and
     conditions of the Settlement Agreement, approved by the
     Court on March 23, 2001, including those relating to the
     cash management reconciliation of certain operating
     accounts.

The LLCs object to the relief sought by the Michigan Debtors on
the bases that:

(1) Michigan law prohibits the Debtors, which own or operate
     funeral homes, from owning or having any interest in the
     Michigan cemeteries; and

(2) Michigan law does not recognize the Michigan Debtors' claim
     of equitable ownership.

As previously reported, the Adversary Proceeding has been
referred to mediation.

The LLCs do not want the dispute to proceed in the Bankruptcy
Court in the way it has been.

In this motion, Meadco, L.L.C., Siena Group, L.L.C., and Alger
Group, L.L.C. (the LLCs), move the Court, pursuant to section
1112(b) of the Bankruptcy Code,

(a) to dismiss the chapter 11 bankruptcy cases of Michigan
     Debtors -- APC Association; Osiris Holding of Michigan,
     Inc.; WMP, Inc.; UMG, Inc.; MCM Acquisition, Inc.; Paws Pet
     Cemetery, Inc.; Woodlawn (Michigan), Inc.; Forest LMP,
     Inc.; Woodmere, Inc.; Roseland, Inc.; RKL Supply, Inc.; HMP
     Acquisition, Inc.; AMG, Inc.; FLMG Cemetery Corp.; OCG
     Cemetery Corp.; GOR Cemetery Corp.; Restlawn Acquisition,
     Inc.; NCG Cemetery Corp.; and OVC Association -- as having
     not been filed in good faith, or alternatively,

(b) dismiss the Michigan Debtors chapter 11 bankruptcy cases
     under section 305 of the Bankruptcy Code and Rule 1017(d)
     of the Federal Rules of Bankruptcy Procedure on the bases
     that the Michigan Debtors' cases each essentially involve a
     two-party dispute that could fairly and adequately be
     resolved in a non-bankruptcy forum, that the cases have no
     valid reorganization purpose and chapter 11 reorganizations
     would not economically or efficiently resolve these
     matters.

The L.L.C.s remind Judge Walrath that the Third Amended Joint
Plan of Reorganization filed by LGII states that "[as a result
of certain pending litigation, the Michigan Cemetery Debtors are
not "Debtors" under the Plan." Similarly, the Plan states that
"The Loewen Group Inc. . . . and the other above-captioned
debtors and debtors-in-possession other than the Michigan
Cemetery Debtors ... propose the following third amended joint
plan of reorganization. . . ."

The L.L.C.s note that the Michigan Debtors' bankruptcy petitions
do reveal that the Michigan Debtors are merely shell
corporations with little or no assets or liabilities and very
few, if any, non-insider creditors. Upon information and belief,
the only non-insider creditors of the Michigan Debtors are the
LLCs and the only assets of the Michigan Debtors are the rights,
if any, contained in the Sales Agreement, Option Agreement,
Promissory Notes and Amending Agreements that are the subject of
the above-mentioned Adversary Proceeding.

The L.L.C.s argue that the Michigan Debtors' Chapter 11 Case
should be dismissed pursuant to Section 1112(b) of the
Bankruptcy Code Legal Authority Section 1112(b) and caselaw
which mandates that the Michigan Debtors' chapter 11 cases be
dismissed as having not been filed in good faith. Section
1112(b) of the Bankruptcy Code provides, in pertinent part, that
[O]n request of a party in interest . . . and after notice and a
hearing, the court may . . . dismiss a case under [chapter 11] .
. . for cause, including --

     (1) continuing loss to or diminution of the estate and
         absence of a reasonable likelihood of rehabilitation;

     (2) inability to effectuate a plan;

     (3) unreasonable delay by the debtor that is prejudicial to
         creditors.

The LLCs note that Section 1112(b), by its terms, does not
preclude consideration of unenumerated factors in determining
'cause' including the lack of good faith in filing a chapter 11
petition.

Based on the provision of section 1112(b) and a finding of good
faith in caselaw, as in SGL Carbon Corp., 200 F.3d at 169, C-TC
9th Ave. Partnership v. Norton Co. (In re C-TC Ave.
Partnership), 113 F.3d 1304, 1309 (2d Cir. 1997), In re Ravick
Corp., 106 B.R. 834, 849 (Bankr. D.N.J. 1989), the LLCs argue
that,

(I)  The Michigan Debtors' chapter 11 cases should be dismissed
      because:

      (1) There is No Valid Reorganizational Purpose

          - the Michigan Debtors have no going-concern to
            preserve, no employees to protect and no hope of
            rehabilitation.

          - The Michigan Debtors are merely shell corporations
            that are not included in the LGII plan because of
            the expressed purpose to continue to pursue pending
            litigation in the Bankruptcy Court.

          - It is clear that the Debtors have no "rehabilitative
            motive" in continuing the Michigan Debtors
            bankruptcy cases.

          - the Michigan Debtors arguably each own only one
            asset

          - the respective rights, if any, contained in the
            Cemetery Transaction documents.

          - the Michigan Debtors have no non-insider creditors,
            or any other liabilities, other than those owed to
            the LLCs.

          - In all but two of the Michigan Debtors' bankruptcy
            petitions, the respective Michigan Debtors list
            estimated assets and estimated liabilities of $0 to
            $50,000.

          - The Michigan Debtors have no employees, no business
            operations, no current expenses and relatively
            little if any cash flow.

          "These factors point to but one inevitable conclusion,
          that there is no "business" around which to
          reorganize," the LLCs argue, "This fact alone
          constitutes 'cause' for dismissal."

      (2) The Michigan Debtors Cases Were not Filed for any
          Valid Reorganization Purposes but for Tactical
          Litigation Purposes

          "It is clear that LGII, through The Michigan Debtors,
          has employed chapter 11 as tool to try to alter the
          terms of The Michigan Debtors' bargained-for exchange
          with the LLCs.".

      (3) This case was filed to prevent the LLCs from
          exercising their State Law rights.

(II) Alternatively, the Court should abstain under Section
      305(a)(1) of the Bankruptcy Code and dismiss, or
      alternatively, suspend the Michigan Debtors' Chapter 11
      cases

      Section 305(a)(1) of the Bankruptcy Code authorizes the
      Court to dismiss a chapter 11 case if "the interests of
      creditors and the Debtor would be better served by such
      dismissal ..."

      The Michigan Debtors' cases satisfy this standard for
      dismissal considering the factors identified by the
      District Court for the Eastern District of Pennsylvania:

     (1) Who filed the Bankruptcy Petition

         A large number of cases where abstention is granted
         involve involuntary petitions. However, when the facts
         and circumstances surrounding a bankruptcy base suggest
         to the Court that abstention is otherwise appropriate,
         the fact that the Debtor filed the petition is
         immaterial. The Courts have not been reluctant to
         dismiss or suspend a case under section 305(a)(1) that
         was voluntarily commenced by the Debtor, as in re
         Mazzocone, 200 B.R. at 575-76, in re Long Bay Dunes
         Homeowners Association, Inc., 246 B.R. 801 (Bankr. D.
         S.C. 1999), in re Fax Station, Inc., 118 B.R. 176
         (Bankr. D. R.I. 1990), in re Stulley, 108 B.R. 174
         (Bankr. S.D. Ohio 1989), in re A&D Care, Inc., 90 B.R.
         138 (Bankr. W.D. Pa. 1998), in re Business Information
         Company, Inc., 81 B.R. 382 (Bankr. W.D. Pa. 1988), in
         re Heritage Wood 'N Lakes Estates, Inc., 73 B.R. 511
         (Bankr. M.D. Fla. 1987), in re Talladega Steaks, Inc.,
         50 B.R. 42 (Bankr. N.D. Ala. 1985), in re Century City,
         Inc., 8 B.R. 25 (Bankr. D. N.J. 1980). Thus, that this
         factor favors neither the exercise nor abstention of
         the Bankruptcy Court's jurisdiction.

     (2) The availability of another forum to resolve the
         pending disputes/The necessity of Federal Proceedings
         to achieve a just and equitable solution

         Most of the Michigan Debtors' affairs - consisting
         primarily of alleged claims against the LLCs - could
         all be resolved in a state or federal court, but in any
         event, outside the bankruptcy process. Most of the
         legal issues involved in the dispute between the
         Michigan Debtors and the LLCs rely on state law,
         particularly Michigan law. Michigan law will play a
         significant role in the litigation because the Michigan
         Debtors' claim of equitable ownership in the Michigan
         cemeteries triggers important issues of Michigan law.

     (3) The expense of the Federal proceedings in comparison
         with proceedings

         Litigating cases, primarily when there is no
         significant effort to reorganize an ongoing business,
         in the bankruptcy context creates an unnecessary burden
         on the bankruptcy estate, as suggested by caselaw. The
         Michigan Debtors are not reorganizing any business, the
         LLCs tell Judge Walsh, and needless administrative
         expenses will be incurred if the chapter 11 cases were
         to remain pending solely to litigate state law (or non-
         bankruptcy) causes of action.

     (4) The purpose of the party seeking to remain in
         Bankruptcy Court

         Considering that the Michigan Debtors have no business,
         no assets and no plan of reorganization at all, but
         only need to resolve disputes with the LLCs and certain
         insiders, the motivating purpose of filing the
         petitions was something other than to seek the
         reorganization of financially-distressed businesses.
         Thus, allowing the chapter 11 cases to remain in the
         Bankruptcy Court would simply be an abuse of the
         reorganization process and should therefore be
         dismissed.

     (5) The economy and efficiency in handling the matter

         It would not be more economical or efficient to resolve
         the Michigan Debtors' affairs in the bankruptcy forum,
         instead, a chapter 11 case would only create needless
         administrative expenses, even though there is no
         business to reorganize.

     (6) Prejudice to various parties

         Dismissing the Michigan Debtors' chapter 11 cases will
         not prejudice those debtors, or any other party in
         interest.

     (7) whether the bankruptcy forum is being used as a forum
         to resolve what is in essence a two-party dispute

         Because the Michigan Debtors' bankruptcy cases simply
         involve the two-party litigation of state law and other
         non-bankruptcy matters in a bankruptcy court and this
         litigation is the Michigan Debtors only significant
         asset, abstention under section 305(a)(1) is warranted.

Based on argument as summarized above, the LLCs assert that the
Court should dismiss the Michigan Debtors' chapter 11 cases
because they constitute bad-faith filings under section 1112 of
the Bankruptcy Code and because dismissal would be in the best
interests of the Michigan Debtors and their creditors under
section 305(a)(1) of the Bankruptcy Code. Alternatively, the
LLCs request that the Court dismiss (or suspend) the chapter 11
cases without finding bad faith, utilizing instead the
abstention doctrine codified in section 305(a) on the basis that
abstention would be in the best interests of the debtor and its
creditors.

To retain jurisdiction over chapter 11 cases that lack real debt
and creditors would be an abuse of the reorganization process
and a waste of the Court's limited resources, the LLCs remark.
(Loewen Bankruptcy News, Issue No. 45; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


LTV CORP: WCI Steel Pushes for Decision on Utility Agreements
-------------------------------------------------------------
WCI Steel, Inc., formerly known as Warren Consolidated
Industries, Inc., appearing through Patrick J. Keating, John L.
Reyes and Phillip R. Wiese of the Akron, Ohio, firm of
Buckingham Doolittle & Burroughs LLP, asks Judge Bodoh to order
LTV Steel, Inc., to assume or reject the Road, Rail and
Utilities Agreement with WCI from August, 1988, and to require
LTV to pay and/or provide adequate assurance to secure
prepetition arrearages under the Contract to WCI for the period
October 1, 2000 through December 28, 2000, discrepancies caused
by unearned discounts for the period March 31, 2000 through
August 16, 2000, and postpetition arrearages for the period from
December 29, 2000, until the Contract is either assumed or
rejected.

In the alternative, WCI asks that Judge Bodoh order LTV to
provide adequate assurance to WCI as providers of services under
this contract by way of paying a deposit toward the amounts due,
or requiring LTV to post a bond to secure the arrearage and
deficiencies.

WCI tells Judge Bodoh that in May 1988 LTV Steel entered into an
Asset Sale and Purchase Agreement with ASCAN Ohio Corporation,
now called WCI Steel, Inc.  The Purchase Agreement set out the
terms for the sale of LTV's Warren, Ohio, plant to WCI.  This
purchase involved dividing land that was once a single plant
owned by LTV into two plants under separate ownership.  Under
the Purchase Agreement, LTV would continue to own and operate
the coke plant on property adjacent to the land and plant that
was sold to WCI.

Also, under and as a condition of the Purchase Agreement, many
collateral contracts, called "Scheduled Agreements", were
signed.  The "Scheduled Agreements" include an Assignment and
Assumption Agreement, Security Agreement, Intercreditor
Agreement, Road Rail and Utilities Agreement, Intellectual
Property and Technology License Agreement, Coke Supply
Agreement, Administrative Services Agreement, Limestone Supply
Agreement, Acid Regeneration Agreement, Tubular Products Supply
Agreement, Cash Products Supply Agreement, Coke Oven Gas Supply
Agreement, Natural Gas Supply Agreement, Iron Ore Pellet Supply
Agreement, Slab Supply Agreement, Burnt Lime Agreement, and
Sinter Agreement.

In the Road, Rail and Utilities Agreement, WCI covenants that it
will continuously operate and maintain the power house "to
provide the quality and quantity of steam and service water
which are required for the operation of the Coke Plant".  The
Steam Section of this agreement states that "the Warren Plant
has heretofore provided and will continue to provide Steam
produced at the power house to the Coke Plant".

WCI is to sell and deliver the steam to LTV at delivered cost
plus 14%. Delivered cost is defined as WCI's cost of production
of steam calculated in a manner consistent with LTV's past
practice of calculating such costs, including evaluation of
blast furnace gas and other fuel complnen6ts utilized in
producing steam.  To WCI's knowledge, no other companies provide
related services to LTV and WCI, as a sole source, is
responsible for 100% of the steam product used by LTV at the
coke plant.

The Service Water section of the agreement states that "the
Warren plant has heretofore provided and will continue to
provide Service Water to the coke plant.  The price for the
Service Water is calculated in the same manner as the price for
steam which is delivered cost plus 14%.

LTV currently owes WCI $3,243,738.28 for prepetition steam and
Service Water services.  This includes billing discrepancies of
$14,249.55 from unearned discounts for the period from March 31,
2000 through August 16, 2000 which LTV has not paid, and
$3,229,488.73 which LTV currently has not paid for the steam and
Service Water it received from WCI under the agreement for the
period October 1, 2000 through December 28, 2000.

LTV currently continues to pay for postpetition steam and
Service Water under the agreement.  However, under this
agreement LTV owes WCI $1,791,417.92 for postpetition steam and
Service Water services for the period beginning December 29,
2000 and through June  8, 2001.

WCI continues to be substantially harmed by LTV's delays in
tendering payment, and by LTV not providing adequate "assurance"
that it will pay for the prepetition services that WCI has
provided, or that LTV will continue to pay for WCI's current and
future services under the agreement.  Specifically, WCI is not
receiving the benefit of its bargain despite continuing to
provide LTV services which are undisputedly critical to LTV's
continued operation.

WCI now moves this Court to compel LTV to assume or reject the
agreement.  WCI tells Judge Bodoh it has made good faith
attempts to resolve these issues through discussions with LTV's
corporate representatives.  These attempts occurred as early as
December 28, 2000, and continued through Mary 9, 2001.  These
discussions have not yielded payment or any adequate assurance
of prepetition payment under the contract.

Specifically, WCI asks Judge Bodoh to compel LTV Steel to accept
or reject the agreement, and to pay WCI's prepetition vendor
claim of $3,243,738.28 for Service Water and steam, including
$14,249.55 for unearned discounts, and the postpetition
deficiency claim of $2,171,915.24 for Service Water and steam,
or in the alternative to require LTV to pay a 100% deposit in
the amount of $2,171,915.24 of its postpetition deficiency as
assurance for future payment, or tender a bond for the full
amount due and owing. (LTV Bankruptcy News, Issue No. 13;
Bankruptcy Creditors' Service, Inc., 609/392-00900)


MARY KAY: S&P Assigns B+ on Proposed $420 Million Facility
----------------------------------------------------------
Standard & Poor's assigned its single-'B'-plus corporate credit
rating to Mary Kay Inc. and its single-'B'-plus rating to the
company's proposed $420 million credit facility. Proceeds from
the new credit facility will be used to retire existing company
debt. The new bank loan rating is based on preliminary terms and
conditions and is subject to review once full documentation is
received. The outlook is positive.

The ratings on Dallas, Texas-based Mary Kay reflect the
company's high debt leverage, reliance on the U.S. market, and
industry risk of direct sales distribution. These factors are
partially offset by the company's solid position in the highly
competitive and mature U.S. cosmetics business and improved
operating performance. Mary Kay, a privately held company, is a
leading manufacturer and direct seller of premium cosmetics and
beauty care products largely within the U.S.

Mary Kay's operating performance and financial profile have
shown improvement over the past few years due to the growth in
revenues and the reduction in debt through increased cash flow.
The company has been able to grow the number of active sales
consultants, which has resulted in a sizable boost to revenues
for the trailing 12 months ended June 30, 2001.

Nevertheless, productivity per consultant has fallen somewhat,
reflecting high turnover and the challenges involved in
maintaining a motivated and productive sales force. In addition,
Mary Kay faces competition for sales consultants from a number
of direct sellers.

Still, the incremental volume achieved through an enlarged sales
force has had a positive impact on margins and cash flow
generation.

Mary Kay's credit protection measures need to be stronger than
the median to support the ratings, given the company's below-
average business risk profile resulting from the direct selling
business model. Mary Kay's credit protection measures
strengthened for the trailing 12 months ended June 30, 2001.

Standard & Poor's believes that the credit ratios will continue
to improve over the intermediate term due to lower projected
debt levels and higher earnings. The rating incorporates the
expectation that acquisitions will not be material and that the
company will utilize free cash flow to reduce debt. Mary Kay's
proposed refinancing of its debt will provide additional
financial flexibility through the extension of maturities.

The proposed bank facility, which consists of a $100 million
revolving credit facility due 2006, a $265 million term loan due
2007, and a $55 million asset sale term loan due 2003, is rated
the same as the corporate credit rating. The facility will be
secured by substantially all of Mary Kay's assets, which provide
a strong measure of protection to lenders. Yet, based on
Standard & Poor's simulated default scenario that severely
stressed the company's cash flows, it is not clear whether the
distressed enterprise value would be sufficient to cover a fully
drawn loan facility.

                       OUTLOOK: POSITIVE

The ratings could be raised in the intermediate term if credit
protection measures continue to show sustainable improvement.


MAXXIM MEDICAL: Weaker Results Compel S&P to Revise Outlook
-----------------------------------------------------------
Standard & Poor's revised its outlook on Maxxim Medical Group
Inc. to negative from stable. At the same time, Standard &
Poor's affirmed its ratings on Maxxim Medical.

The outlook revision reflects the company's weaker-than-expected
operating performance.

The speculative-grade ratings on Maxxim Medical reflect the
company's leading position in niche businesses--offset by
competitive threats from larger, more broad-based, and better-
financed companies and by its heavy debt burden.

Clearwater, Fla.-based Maxxim Medical develops, manufactures,
and markets a diverse range of specialty, single-use medical
products. The company is a leading supplier of custom-procedure
trays and nonlatex examination gloves. Contracts with domestic
group-purchasing organizations provide a predictable revenue
stream and act as a barrier to entry.

Nevertheless, new management will be challenged to further
reduce costs and grow its business. Maxxim Medical competes with
larger, better-financed, and broader-based companies. Indeed,
competitive threats and industry cost containment continue to
negatively affect the company's financial performance. At the
same time, debt leverage remains high following the company's
1999 LBO.

Accordingly, credit protection measures are weak for the rating,
with funds from operations to lease-adjusted debt below 10% and
cash flow coverage of interest less than two times. These weak
cash flow protection measures will limit Maxxim Medical's
ability to respond to competitive threats and industry changes.

                        OUTLOOK: NEGATIVE

Maxxim Medical's failure to improve its operating performance
during the next few quarters could lead to a lower rating.

                   OUTSTANDING RATINGS AFFIRMED

Maxxim Medical Group Inc.

   Corporate credit rating            B+
   Senior secured bank loan rating    B+
   Subordinated debt                  B-


MICRO WAREHOUSE: S&P Expects EBITDA Coverage to Deteriorate
-----------------------------------------------------------
Standard & Poor's lowered its corporate credit and senior
secured bank loan ratings on Micro Warehouse Inc. to single-'B'-
plus from double-'B'-minus and simultaneously placed the ratings
on CreditWatch with negative implications.

The downgrade and CreditWatch placement are based on
significantly weakened operating performance and related credit
measures for the last 12 months ended June 30, 2001, and
expectations that credit measures will remain under pressure in
the near term.

A weakening U.S. economy, decreased levels of technology
spending by companies, increasing competition, and low sales
force productivity have negatively affected Micro Warehouse,
resulting in sales and operating profits well below
expectations.

Although the company has been able to maintain gross margins by
reducing discounting and managing its inventory more efficiently
by resolving start-up problems at its new warehouse, operating
margins have deteriorated because operating costs have not come
down as quickly as revenues. In addition, Micro Warehouse has
faced increased pressures from its key competitors.

Lease-adjusted EBITDA coverage is expected to deteriorate to
about 2 times in 2001 from more than 3x in 2000, despite modest
debt reduction from free operating cash flow. Although financial
flexibility is provided by a $70 million revolving facility and
lack of near-term maturities, the company might need to secure a
waiver or amendment in the near term given the expectation that
operating performance will remain under pressure for the balance
of 2001.

Standard & Poor's will meet with management to discuss its
operating prospects and financial strategies to resolve the
CreditWatch listing.


MULTICANAL S.A.: S&P Affirms C Rating on Senior Unsecured Notes
---------------------------------------------------------------
Standard & Poor's affirmed its single-'B'-minus long-term and
single-'C' short-term foreign and local currency corporate
credit and senior unsecured ratings on Multicanal S.A. At the
same time, the ratings were removed from CreditWatch, where they
had been placed Aug. 8, 2001. The outlook is negative.

The removal from CreditWatch follows a significant reduction of
the company's near-term refinancing risk after the closing of a
two-year $144 million floating-rate note issued at LIBOR plus a
5.5% spread and the sale of a put option on 4% of Direct TV
Latin America for $150 million.

The proceeds were used to refinance a $164 million floating-rate
note that matured last Aug. 18 and 21, 2001, and build up cash
reserves to cover a significant portion of upcoming obligations.
The next maturities that the company has to meet are a $25
million commercial paper in September 2001 and $125 million bond
in February 2002.

Standard & Poor's expects Multicanal to repay these instruments
at maturity thus significantly reducing the company's current
debt level and debt per subscriber to between $520 and $550 and
about 55% of capitalization from $626 and 67% as of June 2001.
When completed, the debt reduction should also help improve the
company's coverage ratios from 1.4 times (x) EBITDA to interest
and 2.9% FFO to debt registered during the 12 months ended June
30, 2001.

The ratings on Multicanal, one of the two largest cable-
television providers in Argentina, with about 1.34 million
subscribers as of June 2001, reflect the company's aggressive
financial profile, deteriorated cash flow protection measures,
its dependence on the level of economic activity in the country,
and its relatively reduced financial flexibility. However, the
ratings also incorporate the company's strong market position
and parent-supported operations and financing.

                     Outlook: Negative

The outlook reflects the lack of recovery in economic activity
in the country, the correlation of the cable industry to the
level of economic activity in Argentina, and the long-lasting
high interest rate environment that hinders Multicanal's ability
to improve financial measures.

In addition, the outlook also reflects the fact that although
refinancing risk has diminished, Multicanal still needs some
additional funds to fully cover the maturity in February 2002.


NETOBJECTS: Nasdaq Delists Shares Effective August 29
-----------------------------------------------------
NetObjects, Inc. (OTC Bulletin Board: NETO), a leading provider
of e-business solutions and services, announced that the shares
of the Company's common stock are now traded on the Over the
Counter Bulletin Board (OTCBB) under the ticker symbol "NETO."

Due to a failure to meet certain continued listing requirements,
the Company's securities have been delisted from The Nasdaq
Stock Market effective with the open of business on August 29,
2001. NetObjects is appealing the delisting to the Nasdaq Stock
Market.

As previously reported, NetObjects has retained Broadview
International LLC to explore strategic alternatives, including a
significant investment by a third party.

NetObjects, Inc., an IBM affiliate (NYSE: IBM), is a leading
provider of e-business solutions and services, including
NetObjects Fusion and NetObjects Matrix. NetObjects has been
ranked by Softletter 100, NewMedia 500 and as one of Fortune's
25 Very Cool Companies.

Its products have won more than 75 awards, including Windows
Magazine's Win 100 award, InfoWorld's Analyst Choice award,
CNET's Internet Excellence award, PC Magazine's Editors Choice
award and InternetWorld's Industry Award. More information
about NetObjects and its products can be found at
http://www.netobjects.com/aboutus.


OWENS CORNING: BMC Moves to Compel Decision on Software Pact
------------------------------------------------------------
BMC Software Distribution, Inc., files a motion for an order
compelling Owens Corning to assume or reject the Software
License & Maintenance Agreement between BMC and The Debtors
dated April 21, 1999.

Wilmer C. Bettinger, Esq., at Pepper Hamilton LLP in Wilmington,
Delaware discloses that under the agreement, BMC granted the
Debtors a perpetual, nonexclusive, non-transferrable right and
license to use certain computer software in consideration of the
payment of license fees.

In addition, BMC is also obligated to provide certain support
and maintenance services to the Debtor under the agreement,
which includes telephone or other electronic support for the
resolution of software problems and updates and new releases of
the software.  Since the filing of the Chapter 11 cases, Mr.
Bettinger contends that the Debtors continued to utilize
software and BMC's support services under the agreement and BMC
has fully performed its obligations under the agreement.

Mr. Bettinger claims that the Debtors are in default of the
agreement for non-payment of license and maintenance fees and
owes BMC he sum of $81,273.45.  Mr. Bettinger states that the
Debtors has indicated to BMC that it has the ability to pay its
normal operating expenses and desires to keep using the software
but has not indicated when it will pay BMC's outstanding
invoices nor if it will move for the assumption of the
agreement.

Mr. Bettinger claims that the Debtors is being unjustly enriched
by retaining the benefits of the agreement without performing
its own obligations thereunder. (Owens Corning Bankruptcy News,
Issue No. 15; Bankruptcy Creditors' Service, Inc., 609/392-0900)


PACIFIC GAS: Court Approves Stipulation to Adversary Proceeding
---------------------------------------------------------------
The Court finds it interesting that Pacific Gas and Electric
Company contends that Plaintiff has violated the automatic stay,
yet but has done nothing about that.  "Further, PG&E contends
that the Power Purchase Agreement is a valuable contract right,
yet it intentionally refuses to address the merits of the
contract termination issue," Judge Montali observes.

The Court will not decide whether ISO removed this action from
superior court to the bankruptcy court with or without PG&E's
assistance.  By PG&E's stipulation with ISO and the subsequent
removal, the court has jurisdiction and the adversary proceeding
is properly before it. "Nevertheless, the court is dubious of
PG&E's agenda and wonders why it is protecting ISO's litigation
Position," Judge Montali indicates.

In the court's opinion, the state of the PPA is critical to a
decision on the Motion.  The Court observes that if this matter
is remanded, and more importantly if the superior court
determines that there was no prepetition termination of the PPA,
PG&E will have to come back to the Bankruptcy Court if it wishes
to assume the PPA under Bankruptcy Code section 365.

Rather than compound the matter, the court will simply give
PG&E a choice.  Judge Montali's Tentative Ruling requires that
PG&E make a decision whether to assume the PPA or not before the
Court proceeds further. If it believes in good faith that the
PPA was not terminated and it has the right to assume that PPA
as an executory contract, then it should file the appropriate
motion. In that case the court will consolidate the motion to
assume with this adversary proceeding and promptly conduct a
status conference on the matter.

If PG&E brings its motion to assume and that motion is denied,
the court will remand the matter to the superior court.  If the
motion to assume is granted, the court will then consider how
and where POSDEF wishes to proceed and whether the matter should
stay in the Bankruptcy Court or be remanded.

To resolve the Motion, the Court set July 1 as the deadline for
PG&E to move to assume the PPA and ruled that "this action will
be remanded to the superior court unless no later than July 1,
2001, PG&E files a motion to assume the PPA." The Court makes it
clear that the deadline is solely for the purpose of resolving
the motion and it does not constitute an absolute deadline for
PG&E to move to assume or reject the PPA.

The court also recognizes that the parties stipulated to a
procedure that anticipates Plaintiff bringing a motion for a
preliminary injunction if remand is denied.  While not deciding
the issue in advance, the court alerts the parties to the high
likelihood that such a preliminary injunction would be granted,
at least until a final resolution of PG&E's motion to assume.

The Court gave the parties a choice about whether to accept the
Tentative Ruling.  If the parties agree to accept the Tentative
Ruling as the Court's order, counsel for Plaintiff should notify
the Court's calendar deputy by the time fixed by the Court, in
which case the matter will be taken off the calendar and
Plaintiff's counsel may submit an order consistent with the
Tentative Ruling.  If the parties are not in agreement to accept
the Tentative Ruling as the ruling of the court, then counsel
should prepare to argue why the Tentative Ruling should not be
entered at the hearing set.

The first course of action has not happened and the hearing has
been continued several times. Eventually the parties submitted a
Stipulation, Judge Montali's stamp of approval was put on it and
the hearing was dropped.

                    The Parties' Stipulation

PG&E, POSDEF and the ISO stipulate and agree that:

       (1) PG&E stipulates to relief from the automatic stay in
the PG&E Bankruptcy Case to allow it and/or POSDEF to file and
respond to a declaratory relief action in the Sacramento
Superior Court seeking a declaration as to "whether the Power
Purchase Agreement between POSDEF and PG&E was in fact
terminated by POSDEF prior to PG&E's filing the PG&E Bankruptcy
Case on April 6, 2001 and, if so, on what date it was
terminated."

The declaratory relief action may be filed within the POSDEF
Superior Court Action or as a new filing in the Sacramento
Superior Court. If a new action is filed, the parties will
jointly move to consolidate such action with the pending POSDEF
Superior Court Action.

Either PG&E or POSDEF may initiate the declaratory relief action
within a reasonable time after the entry of an order on this
Stipulation, and only PG&E and POSDEF shall be parties to any
declaratory relief action that may be flied. The burden of proof
will not be determined by which party filed the action and the
parties expressly reserve their positions regarding the burden
of proof.

Any party dissatisfied with the ruling(s) of the Sacramento
Superior Court may, without further leave of the Bankruptcy
Court, appeal from such ruling(s) and/or seek extraordinary
relief by way of mandamus, prohibition or certiorari or in any
other manner permitted by applicable state law.

       (2) The Adversary Proceeding will be remanded to the
Sacramento Superior Court for further proceedings consistent
with this Stipulation.

       (3) Pending determination by the Sacramento Superior
Court of the declaratory relief action between PG&E and POSDEF
respecting the PPA, further proceedings on POSDEF's claims
against Cal ISO in the POSDEF Superior Court Action will be
stayed. The stay will terminate as and when a judgment in the
declaratory relief action is final.

       (4) Pending determination by the Superior Court of the
declaratory relief action, further proceedings on Cal ISO's
cross-claim against PG&E in the POSDEF Superior Court Action
will be stayed.

       (5) Cal ISO will cooperate with discovery in the
declaratory relief action.

       (6) Pending entry of a final judgment by the Sacramento
Superior Court in the declaratory relief action, PG&E and Cal
ISO agree (without admitting or conceding the validity or
enforceability of the April 18 TRO in any respect) that the TRO
will remain in effect with the same validity and enforceability
it had on the date of removal, notwithstanding any applicable
law or rule limiting the duration of temporary restraining
orders.

If it is determined by a final judgment of the Sacramento
Superior Court that the PPA was terminated by POSDEF prior to
PG&E's filing the PG&E Bankruptcy Case, the April 18 TRO will be
adopted by the Sacramento Superior Court as a permanent
injunction.

If it is determined by a final judgment of the Sacramento
Superior Court that the PPA was not terminated by POSDEF prior
to PG&E's filing the PG&E Bankruptcy Case, the April 18 TRO will
thereupon dissolve.

       (7) Pending a final judgment on the declaratory relief
action by the Sacramento Superior Court, PG&E and Cal ISO agree
not to take any steps to dissolve or alter the April 18 TRO or
to alter, hinder or impede the status quo, in which POSDEF is
selling its power output from its generating facilities to third
parties.

To the extent that the April 18 TRO is dissolved or altered by
operation of law or otherwise, this Stipulation will constitute
a contract compelling Cal ISO to abide by the terms of the April
18 TRO, without further leave of the Bankruptcy Court. (Pacific
Gas Bankruptcy News, Issue No. 12; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


PAC-WEST: S&P Places Low-B Ratings on CreditWatch Negative
----------------------------------------------------------
Standard & Poor's placed its ratings on Pac-West Telecomm Inc.
on CreditWatch with negative implications.

The CreditWatch placement is based on Standard & Poor's
increased concerns that deteriorating financial results in the
first two quarters of 2001 may be an indication that Pac-West's
business model, which is dependent on revenues from Internet
service providers (ISPs) and reciprocal compensation, faces
highly uncertain prospects over the long term. Reflecting
turmoil in the ISP sector and declining rates, the company has
shown negative trends in EBITDA margin, revenue quality, and
minutes of use.

Cash and available bank credit of about $120 million at the end
of the second quarter of 2001 provides Pac-West with limited
near-term financial flexibility. Given weak capital market
sentiment towards competitive local exchange carriers (CLECs)
and increased execution risks, the company's liquidity could
become an increasing concern in 2002.

Depending on the outcome of Standard & Poor's discussion with
Pac-West management, the company's corporate credit rating could
be lowered more than one notch. Standard & Poor's could also
lower the senior secured bank loan rating on Pac-West to the
same level as the corporate credit rating, and the rating on the
$150 million senior unsecured notes due 2009, currently rated
one notch below the corporate credit rating, could be lowered to
two notches below the ultimate corporate credit rating.

Pac-West is a facilities-based CLEC operating in seven states in
the West. The company provides bundled voice, collocation, and
data services to ISPs and to small and midsize enterprises.

    Ratings Placed on CreditWatch With Negative Implications

    Pac-West Telecomm Inc.                    RATING

     Corporate credit rating                   B
     Senior unsecured debt                     B
     Senior secured bank loan                  B+


PILLOWTEX CORP: Court Okays Andersen as Debtor's Consultants
------------------------------------------------------------
Judge Robinson authorized Pillowtex Corporation to employ Arthur
Andersen LLP as business consultants.  But the indemnification
provisions of the Engagement Letters are subject to certain
conditions:

    (a) Subject to the provisions of subparagraph (c) below, the
        Debtors are authorized to indemnify, and shall indemnify
        Andersen in accordance with the Engagement Letters for
        any claim arising from, related to or in connection with
        the services provided for in the Engagement Letters, but
        not for any claim arising from, related to, or in
        connection with Andersen's post-petition performance of
        any other services unless such services and
        indemnification therefore are approved by the Court;

    (b) Notwithstanding any provision of the Engagement Letters
        to the contrary, the debtors shall have no obligation to
        indemnify Andersen, or provide contribution or
        reimbursement to Andersen for any claim or expenses that
        is either:

         (i) judicially determined (the determination having
             become final) to have arisen solely from Andersen's
             gross negligence or willful misconduct, or

        (ii) settled prior to judicial determination as to
             Andersen's gross negligence or willful misconduct,
             but determined by this Court, after notice and a
             hearing, to be a claim for which Andersen should
             not receive indemnity, contribution or
             reimbursement under the terms of the Engagement
             Letters, as modified by this Order; and

    (c) If before the earlier of:

         (i) the entry of an order confirming a chapter 11 plan
             in these cases (that order having become a final
             order no longer subject to appeal), and

        (ii) the entry of an order closing those chapter 11
             cases, (Pillowtex Bankruptcy News, Issue No. 12;
             Bankruptcy Creditors' Service, Inc., 609/392-0900)


PSINET INC: Secures Approval to Maintain Cash Management System
---------------------------------------------------------------
In a First Day Order, the Court granted the relief sought by
PSINet, Inc. on an interim basis for fifteen days. Subsequently,
the Court issued two Interim Orders by way of which the granting
of superpriority administrative expense claim status of
intercompany claims was suspended while relief in other respects
sought in the motion was continued. The effect of the Interim
Orders was then continued by a Bridge Order up to and including
August 22, 2001.

The Debtors then filed a separate motion seeking (i) approval of
superpriority administrative expense claim status to
intercompany claims and cash management claims, and (ii) the
relief originally requested on a final basis.

In this motion, the Debtors explain that because they hold $300
million in unencumbered cash, cash equivalents and short-term
investments, as a group, they do not require any third party DIP
financing but one or more of the individual Debtor subsidiaries
may be unable to self-fund its operations on a stand-alone basis
and require financing and liquidity support from one of the
other Debtors.

Granting superpriority administrative expense claim status to
postpetition claims arising from intercompany loans will accord
the lending Debtors' creditors the same protections as a third
party extending DIP financing directly to the borrowing Debtor
would receive. The Debtors believe that intercompany loans to
their foreign non-debtor subsidiaries is necessary to preserve
the value of the Debtors' interests pending a sale,
reorganization or other disposition of these companies.

Absent superpriority administrative expense claim status to
intercompany loans, the movement of funds from PSINet to one of
the other Debtors carries the potential risk of reduced
recoveries for those creditors of PSINet who are not also
creditors of the borrowing Debtor -- such as the holders of
PSINet's various Senior Notes, who hold aggregate claims of
approximately $2.9 billion solely against PSINet.

In order to minimize administrative expenses and provide
flexibility in responding to financing needs, the Debtors also
include in the motion procedures by which they would be
authorized to provide such financing following prior written
notice to the Committee and US Trustee and the absence of timely
objections that remain unresolved.

Further, granting superpriority administrative expense claim
status to certain postpetition cash mangement-related claims
will enable the Debtors to induce their bankers to continue
providing cash mangement services to them during the post-
petition period, thereby assuring the Debtors and their estates
of continued stability in the operation of their cash mangement
system.

At times, the provision of cahs management services may involve
the extension of credit to the Debtors. For example, the
services provided by the Debtors' primary Cash Mangement Bank,
Fleet Bank N.A. in distributing payroll to the Debtors'
employees typically involves an advance by Fleet for a brief
period before Fleet is reimbursed by the Debtors from the
Payroll Account.

If postpetition Cash Management Claims are not accorded
superpriority status and Fleet and the other Cash Management
Banks should discontinue cash management services to the
Debtors, the Debtors' creditors and estates could be severely
prejudiced.

             The Final Order and Authorized System

Upon the Debtors' subsequent motion, the Court has issued a
Final Order, nunc pro tunc to August 18, 2001,

     (1) authorizing the Debtors to maintain use of their
         existing cash management systems, bank accounts, and
         business forms,

     (2) granting superpriority administrative expense claim
         status to certain postpetition intercompany claims and
         postpetition cash management-related claims, and

     (3) establishing omnibus procedures for notice and use of
         estate property to fund non-debtor affiliates.

Judger Gerber specifies that, to the extent there are any
discrepancies between the First Day Order, the Interim Orders
and this Order, the provisions of the Final Order shall govern
for all periods commencing on or after August 18, 2001, and the
provisions of the First Day Order and each of the Interim Orders
shall govern the respective period during which each such Order
was in effect.

Pursuant to the Court's order issued by Judge Gerber:

(A) Intercompany Claims generated among the Debtors on or after
     August 18, 2001 are granted superpriority administrative
     expense claim status pursuant to Section 364(c)(1) of the
     Bankruptcy Code with priority over administrative expenses
     of the kind specified in Sections 503(b) and 507(b) of the
     Bankruptcy Code (subject to fees pursuant to 28 U.S.C.
     section 1930 and any commissions of a chapter 7 trustee
     appointed in a case that has been converted to a case under
     chapter 7 of the Bankruptcy Code), provided that,

     (1) the granting of superpriority administrative expense
         claim status pursuant to Section 364(c)(1) of the
         Bankruptcy Code with priority over any and all
         administrative expenses of the kind specified in
         Sections 503(b) and 507(b) of the Bankruptcy Code will
         not apply to:

         -- any Intercompany Claim (or portion thereof) arising
            from a transaction in which the funds (or portion
            thereof) advanced by the lending Debtor are provided
            for any purpose other than paying the general
            operating expenses of the borrowing Debtor;

         -- any Intercompany Claim (or portion thereof) arising
            from a transaction in which the funds (or portion
            thereof) advanced by the lending Debtor are applied
            to an obligation for which the lending Debtor is
            jointly and severally liable with the borrowing
            Debtor to the extent the cost of such obligation is
            properly allocable to the lending Debtor rather than
            the borrowing Debtor;

         -- any Intercompany Claim (or portion thereof) incurred
            after August 17, 2001 and on or before February 17,
            2002 to the extent the amount of such Intercompany
            Claim (or portion thereof), taken together with the
            aggregate amount of all other Intercompany Claims
            incurred after August 17, 2001 and on or before
            February 17, 2002, exceeds $10.0 million (or such
            other amount as may be approved by further order of
            the Court);

     (2) As soon as reasonably practicable after the end of each
         four-month period commencing with the four-month period
         ending December 31, 2001, the Debtors will provide the
         Committee and the US Trustee a report disclosing the
         operational status of each Debtor, including whether it
         is continuing to operate, whether its business assets
         have been sold, transferred, abandoned or otherwise
         disposed of, or whether it has shut down its business
         operations.

         Following receipt of any such report, the Committee and
         the US Trustee will be entitled to seek, by filing a
         motion with the Court, for reconsideration of the
         provisions of the Superpriority Status of Intercompany
         Claims, solely as such provisions apply to Intercompany
         Claims incurred after the date on which an order ruling
         on such request for reconsideration is entered, giving
         ten business days' notice to counsel for the Debtors
         and the Committee or US Trustee (as applicable);

(B) Cash Management Claims incurred by the Debtors on or after
     August 18, 2001 are granted superpriority administrative
     expense claim status pursuant to Section 364(c)(1) of the
     Bankruptcy Code with priority over administrative expenses
     of the kind specified in Sections 503(b) and 507(b) of the
     Bankruptcy Code (subject to fees pursuant to 28 U.S.C.
     section 1930 and any commissions of a chapter 7 trustee
     appointed in a case that has been converted to a case under
     chapter 7 of the Bankruptcy Code);

(C) The Debtors are authorized, but not directed, to provide
     Non-Debtor Financing to the International Non-Debtors
     without further approval of the Court, provided that,

     (1) such Non-Debtor Financing is provided on a secured
         basis;

     (2) the amount of such Non-Debtor Financing, taken together
         with the aggregate amount of all other Non-Debtor
         Financing provided after August 17, 2001 and on or
         before February 17, 2002, does not exceed $20.0 million
         (or such other amount as may be approved by further
         order of the Court);

     (3) as soon as reasonably practicable after the end of each
         four-month period commencing with the four-month period
         ending December 31, 2001, the Debtors will provide the
         Committee and the US Trustee a report disclosing the
         operational status of each International Non-Debtor,
         including whether it is continuing to operate, whether
         its business assets have been sold, transferred,
         abandoned or otherwise disposed of, or whether it has
         shut down its business operations;

     (4) the following procedures are complied with:

         -- With respect to each proposed provision of Non-
            Debtor Financing to an International Non-Debtor, the
            Debtors will be authorized to provide such Non-
            Debtor Financing to the applicable International
            Non-Debtor without further notice to the Court or
            any other party in interest except for 5 business
            days' notice to (i) the Office of the United States
            Trustee and (ii) the Committee (collectively, the
            "Notice Parties") and Cisco Systems, Inc. ("Cisco,"
            will not be considered one of the Notice Parties).

         -- The notice shall specify (i) the amount and type
            (e.g., intercompany loan) of Non-Debtor Financing,
            (ii) the Debtor who will provide the Non-Debtor
            Financing, (iii) the International Non-Debtor to
            whom or on whose behalf such Non-Debtor Financing
            will be made, (iv) the security provided for such
            Non-Debtor Financing, (v) the date or dates on which
            the Non- Debtor Financing will be provided and (vi)
            the purpose of the Non-Debtor Financing.

         -- The Notice Parties shall have 5 business days after
            service of the notice to object or request
            additional time to evaluate the proposed Non-Debtor
            Financing. If a Notice Party timely requests in
            writing additional time to evaluate the proposed
            Non-Debtor Financing, such Notice Party will have an
            additional 5 business days to object.

         -- If a Notice Party timely objects to the proposed
            Non-Debtor Financing, the Debtors and such Notice
            Party will use good faith efforts to resolve such
            objection consensually. If the Debtors and the
            objecting Notice Party cannot reach a consensual
            resolution to the objection, the Debtors will not
            proceed with the proposed Non-Debtor Financing
            unless the Debtors seek and obtain approval of such
            Non-Debtor Financing from the Court upon notice and
            a hearing.

         -- As soon as reasonably practicable after the end of
            each calendar quarter commencing with the quarter
            ending September 30, 2001, the Debtors will provide
            the Committee, the US Trustee and the other parties
            entitled to notice under the orders of the Court a
            report listing the aggregate amounts of Non-Debtor
            Financing provided to each International Non-Debtor
            during the preceding calendar quarter under
            authority of this Order.

         -- Nothing in the foregoing procedures shall prevent
            the Debtors, in their sole discretion, from seeking
            Bankruptcy Court approval at any time of any Non-
            Debtor Financing upon notice and a hearing.

(D) The Debtors are authorized to maintain the Bank Accounts
     and to continue to advance funds in the ordinary course
     among their domestic Debtor subsidiaries;

(E) The Debtors are authorized to continue to use their Cash
     Management System. Except as otherwise provided in the
     Court's Final Order, all expenses, fees and costs incurred
     after the Petition Date associated with such Cash
     Management System will have the status of administrative
     expense claims under Section 03(b) of the Bankruptcy Code;

(F) The Debtors are authorized to continue to use their pre-
     Petition Date correspondence, business forms, checks and
     any accounts without the necessity of labeling the
     correspondence, business forms, checks or accounts with a
     "debtor in possession" designation;

(G) The Debtors are authorized to pay on a current basis, and
     in the ordinary course, all postpetition obligations
     incurred by any of the Debtors to any bank that
     participates in the Debtors' Cash Management System arising
     solely from ordinary course transactions under the Debtors'
     Cash Management System;

(H) For the purpose of satisfying, and only to the extent
     necessary to satisfy, any Cash Management Claims arising
     only under the Cash Management System, and notwithstanding
     any future security interests or other liens of any party
     or provision of any other Order in the Debtors' Chapter 11
     cases, each Cash Management Bank is authorized to set off
     any Cash Management Claim (but only such Cash Management
     Claim) against any Bank Account of any of the Debtors
     maintained with such Cash Management Bank, without further
     leave of Court; provided that,

     -- such Cash Management Bank shall give the Debtors prior
        written notice demanding payment of any such Cash
        Management Claim and such Cash Management Claim shall
        have remained unpaid at the time of any such setoff for
        not less than 5 business days after the date on which
        such written notice is given;

     -- prepetition Cash Management Claims may be set off only
        against prepetition obligations of such Cash Management
        Bank and postpetition Cash Management Claims may be set
        off only against postpetition obligations of such Cash
        Management Bank;

(I) The Cash Management Banks are authorized to charge back to
     the Debtors' accounts any amounts incurred by the Cash
     Management Banks resulting from checks, drafts, wires or
     automated clearing house transfers ("ACH Transfers")
     deposited with the Cash Management Banks which have been
     dishonored, rejected or returned for insufficient funds,
     regardless of whether such amounts were deposited pre-
     Petition Date or post-Petition Date and regardless of
     whether the dishonored, rejected or returned items relate
     to prepetition or postpetition items, and that normal
     servicing charges (in accordance with prepetition
     arrangements among the Debtors and the Cash Management
     Banks) may be assessed and deducted by the Cash Management
     Banks in the ordinary course of business;

(J) The Cash Management Banks are authorized and directed to
     accept and honor all representations from the Debtors as to
     which checks, drafts, wires or ACH Transfers should be
     honored or dishonored consistent with any Order of this
     Court, whether the checks, drafts, wires or ACH Transfers
     are dated prior to, on, or subsequent to the Petition Date,
     and no Cash Management Bank that honors or dishonors a pre-
     Petition Date or post-Petition Date check, draft, wire or
     ACH Transfer or other item drawn on any account that is the
     subject of the Court's Final Order either (a) at the
     direction of the Debtors to honor or dishonor such check,
     draft, wire, ACH Transfer or other item, (b) in a good
     faith belief that the Court has authorized such prepetition
     check, draft, wire, ACH Transfer or other item to be
     honored or dishonored, or (c) as the result of an innocent
     mistake made despite implementation of reasonable item
     handling procedures, shall be deemed to be liable to the
     Debtors or their estate or otherwise in violation of this
     Order;

(K) The Debtors are authorized to continue operating in the
     ordinary course in accordance with all prepetition cash
     management agreements and arrangements with Fleet,
     including without limitation, the funding of the Payroll
     Account in amounts sufficient to reimburse Fleet for any
     payroll amounts advanced to employees in the ordinary
     course of business, whether such transfers were made pre-
     Petition Date or post-Petition Date, and all such amounts
     transferred postpetition will be accorded superpriority
     status, with priority over administrative expenses;

(L) Nothing in the Court's Final Order will prevent the Debtors
     from opening any additional bank accounts, or closing any
     existing Bank Account(s) as they may deem necessary and
     appropriate, and the Cash Management Banks are authorized
     to honor the Debtors' requests to open or close, as the
     case may be, such additional bank accounts or Bank
     Account(s);

(M) Nothing in the Order will preclude Fleet from closing any
     existing Bank Accounts or terminating any cash management
     agreements or Cash Management Systems at any time after
     October 1, 2001 by giving the Debtors at any time or times
     after that date prior written notice identifying the Bank
     Accounts, cash management agreements or Cash Management
     Systems (as the case may be) to be terminated and
     identifying the date of termination which shall be a date
     no less than 30 days after the date on which any such
     written notice is given. (PSINet Bankruptcy News, Issue No.
     7; Bankruptcy Creditors' Service, Inc., 609/392-0900)


RYLAND GROUP: Fitch Assigns BB+ Rating on Senior Unsecured Debt
---------------------------------------------------------------
Fitch has assigned an initial rating of `BB+` to the senior
unsecured debt of The Ryland Group, Inc.  The rating applies to
approximately $250 million in outstanding senior notes as well
as the company's $400 million revolving credit agreement. A
rating of `BB-` has been assigned to the company's outstanding
$250 million senior subordinated notes.

The ratings are based on the company's geographic and product-
line diversity, steady operating performance, solid margin
enhancement consistent with this point in the housing cycle, and
moderate financial policies. Additionally, Ryland's inventory
turns are in the top tier in the industry, and the company's
liquidity position is strong for the rating. Risk factors
include the inherent cyclical nature of the homebuilding
industry.

The company has demonstrated solid margin enhancement over the
recent past, with EBITDA margins roughly doubling since 1995.
Although the company has certainly benefited from strong
economic conditions, a degree of margin enhancement is also
attributed to purchasing, design and engineering, access to
capital and other scale economies that have been captured by the
large national homebuilders in relation to second-tier builders.

These economies, the company's presale operating strategy and a
return on capital focus provide the framework to soften the
margin impact of declining market conditions in comparison to
previous cycles. Acquisitions have not played a part in the
company's operating strategy, as management has preferred to
focus on internal growth.

Ryland's inventory turns remain strong in comparison to the
industry, demonstrating the company's ability to generate
liquidity from its inventory base. Inventory/net debt stood at
3.0 times at June 30, 2001, substantially above levels of the
mid-1990's, providing a strong buffer against a downturn in
economic conditions. The company maintains an approximate four-
year supply of lots, half of which are owned and half of which
are controlled through options.

Debt-to-capital has remained at approximately 50% over the past
three years, consistent with the company's targeted range. The
strong state of the economy and Ryland's measured pace of
reinvestment have led to substantial cash accumulation that
totaled approximately $180 million as of June 30, 2001 (netting
out cash subsequently applied to debt redemption). Net debt-to-
capital stood at 38% as of June 30, 2001, a level considered
very strong for the rating.

Ryland maintains a $400 million revolving credit agreement that
is currently unused. The company's cash position indicates that
this facility may remain unused over the near term. Share
repurchases are likely to continue at moderate levels. The
company has no long-term debt maturities until 2006.


SACO SMARTVISION: Talks with CIBC on $15MM Debt Workout Ongoing
---------------------------------------------------------------
Saco Smartvision Inc. is continuing discussions with the
Canadian Imperial Bank of Commerce with a view to reaching an
agreement with respect to the restructuring of Saco's loan in
the amount of approximately $15 million.

Saco was served on Monday, August 27 by the CIBC with a motion
for the appointment of an interim receiver under the Bankruptcy
and Insolvency Act.  Pursuant to the motion, the CIBC will ask
the Court for an order allowing it to take possession and
control of Saco's assets.

The motion was presented on Monday, August 27 before the
Bankruptcy Registrar but has been postponed on three occasions
in light of the continuing discussions between Saco and the
CIBC. The motion is currently scheduled to be heard on Thursday,
August 30, unless postponed again.

Fred Jalbout, Chairman, President and Chief Executive Officer of
Saco commented: "We are hopeful that Saco will be able to
conclude an agreement with the CIBC, which is the last step in
our financial restructuring.  However, we cannot guarantee that
an agreement with the Bank will be reached."

Saco also wishes to comment on an article which appeared in the
Journal de Montreal yesterday, to the effect that Saco has laid
off its 40 employees.  Mr. Jalbout commented: "We have not laid
off our employees.  On Monday, August 27, we advised our
employees not to report to work until an agreement with the CIBC
is concluded.  As soon as such an agreement is reached, we will
inform our employees so that they may immediately resume work."

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


UNIFORET: Court to Fix Hearing Dates on Proceedings on Sept. 18
---------------------------------------------------------------
Uniforet Inc. incurred a net loss of $55.7 million during its
second quarter due to a non-recurring charge of $52.0 million
resulting from the loss of ownership of the 11.125% US senior
notes of its wholly-owned subsidiary, 3735061 Canada Inc. For
the same period in 2000, the Company recorded a net income of
$23.5 million, which included a non-recurring gain of $30.0
million, after income taxes, resulting from the financial
reorganization undergone during the summer of 2000. For the
first half of 2001, the net loss was $57.8 million, compared
with a net income of $19.7 million for the same period last
year.

On May 18, 2001, the Company announced that its wholly owned
subsidiary, 3735061 Canada Inc., has been unable to meet its
obligations under the terms of the preliminary funding
arrangement as required by Jolina Capital Inc., and that it had
received from the latter a notice to exercise its hypothecary
right to take in payment property pledged to it by its
subsidiary as security, including, namely, outstanding 11.125%
US senior notes of the Company in an aggregate principal amount
of US$64.6 million.

The Company being no longer able to consolidate the notes that
its wholly-owned subsidiary had acquired at a discount in June
2000, after the latter had lost ownership of said notes, the
Company charged to income an amount of $52.0 million for the
second quarter of 2001 and increased its consolidated long-term
debt by the same amount.

On August 15, 2001, the Company announced that it has held
meetings for six of their seven classes of creditors and that
the required majority of creditors in each of those six classes
have approved their amended plan of arrangement. Furthermore,
pursuant to proceedings instituted by a few of the US
Noteholders, the meeting of the class of US Noteholders-
creditors is still temporarily suspended by Court order rendered
on July 26, 2001 until settlement of the composition of that
class of creditors.

It is only on September 18, 2001 that the Court will fix the
hearing dates for those proceedings.

The Company's consolidated financial statements for the six
months ended June 30, 2001 have been compiled on the same basis
as for the consolidated financial statements for the year ended
December 31, 2000, using the going concern assumption.

In addition, its consolidated financial statements do not
include any value adjustment or reclassification of assets,
liabilities or operating results that may be appropriate given
recent events and pursuant to the implementation of a potential
plan of arrangement with creditors or any other reorganization
plan.

Sales increased by 21.9% to $48.5 million for the second quarter
of 2001, compared with the same quarter last year. Lumber sales
showed an improvement of 32.4%, due mainly to increased woodchip
shipments into open markets and improved woodchip selling
prices. Furthermore, lumber selling prices increased by 11.1%,
compared with the same quarter last year while shipments
decreased by 5.1%. Pulp sales dropped by 13.7% to $7.8 million,
compared with $9.1 million for the same period last year. Pulp
selling prices dropped by 34.6% while shipments increased by
31.9% as the Company reduced its inventories as a result of the
pulp mill down time since February 16, 2001.

For the six months ended June 30, 2001, sales rose to $92.5
million, up by 4.2% compared with the same period of 2000.
Lumber sales increased by 10.7% to $71.2 million due to
increased woodchip shipments into open markets and improved
woodchip selling prices. In addition, lumber shipments decreased
by 5.8% during the period, compared with the same period last
year while selling prices were down by 3.3%. Pulp sales
decreased by 12.8% to $21.4 million as a result of a 12.0% drop
in selling prices over a comparable shipment volume.

The operating income for the second quarter of 2001 was $0.4
million, compared with an operating loss of $1.5 million for the
same quarter last year. The operating income from the lumber
business amounted to $4.8 million, compared with an operating
loss of $2.2 million for the corresponding period, mainly due to
increased woodchip shipments into open markets and improved
woodchip selling prices. The operating loss from the pulp
business reached $4.4 million, compared with an operating income
of $0.7 million for the corresponding period, as a result of the
plant's complete shutdown during the second quarter of 2001 and
a 12.0% drop in selling prices.

For the second quarter of 2001, $35.2 million were provided by
operations, compared with $1.7 million for the corresponding
period of 2000, due mainly to reduced pulp and log inventory
levels. Additions to fixed assets were limited to $0.5 million,
compared with $1.6 million for the corresponding period of 2000.

For the first half of 2001, $25.4 million were provided by
operations, compared with $1.3 million used in operations for
the corresponding period of 2000, due mainly to reduced pulp and
log inventory levels. Additions to fixed assets were limited to
$1.0 million, compared with $2.4 million for the corresponding
period of 2000. During the period, $1.3 million were used in
discontinued paper operations, compared with $4.0 million
provided by operations in 2000.

As at June 30, 2001, the Company had a cash position of $7.0
million and a working capital deficiency of $10.7 million, for a
ratio of 0.85:1, compared with a ratio of 0.98:1 as at December
31, 2000.

The conditions of the global commercial pulp market have
deteriorated during the second quarter. The interruption of the
Port-Cartier pulp mill's operations throughout the quarter had
an adverse impact on the Company's financial results. The lumber
market showed improvements as a result of the resumption of
seasonal operations and a favorable interest rate environment,
which resulted in an increase in selling prices during the
quarter.

However, this market remained quite volatile due to the
uncertainty surrounding the determination of countervailing or
antidumping duties on imports of Canadian lumber into the
American market.

In this connection, the US Department of Commerce had initially
determined that a 19.3% countervailing duty should be imposed
retroactively on Canadian lumber shipments into the United
States over a 90-day period. Consequently, during the second
quarter, the Company charged to income a sufficient amount to
cover all shipments affected by the potential application of a
countervailing duty.

Pursuant to a concurring vote, on August 15, 2001, on six of its
seven classes of creditors, the Company will focus on pleading
its case further to proceedings instituted by a few of the US
Noteholders who object, among other things, to the composition
of that class of creditors. The issue of countervailing duties
on Canadian lumber shipments into the United States will likely
entail volatility and uncertainty on this market.

As the conditions of the global commercial pulp market showed no
improvements, the Company had to postpone the startup of the
Port-Cartier pulp mill, initially scheduled for September 4,
2001. As mentioned previously, the Company's wholly-owned
subsidiary, 3735061 Canada Inc., lost ownership of the 11.125%
US senior notes it had acquired at a discount in June 2000. This
transaction resulted in an increase in interest expense
effective May 28, 2001.

Uniforet Inc. is an integrated forest products company which
manufactures softwood lumber and bleached chemi-thermomechanical
pulp (BCTMP). It carries on its business through its
subsidiaries located in Port-Cartier (pulp mill and sawmill) and
in the Peribonka area (sawmill). Uniforet Inc.'s securities are
listed on The Toronto Stock Exchange under the trading symbol
UNF.A, for the Class A Subordinate Voting Shares, and under the
trading symbol UNF.DB, for the Convertible Debentures.


VENCOR INC: Seeks Okay to Disallow in Full Late-Filed Claims
------------------------------------------------------------
Vencor, Inc. seeks the Court's order disallowing in full 865
Late Claims totaling $94,888,296.76 pursuant to Bankruptcy Code
502(b) and Bankruptcy Rule 3007.

The Debtors object to each of these Late Claims because, based
on review, the proofs of claim were filed after the applicable
bar date. Specifically, each of the Late-Filed Claims was filed
after January 7, 2000 (the General Bar Date) but on or before
March 19, 2001 (the Confirmation Date) and was not filed on or
before the Amended Bar Date. On this basis, the Debtors seek to
disallow each of the Late-Filed Claims. (Vencor Bankruptcy News,
Issue No. 32; Bankruptcy Creditors' Service, Inc., 609/392-0900)


VLASIC FOODS: Presents Recovery Analysis under 1st Amended Plan
---------------------------------------------------------------
In support of argument of Vlasic Foods International, Inc. at
confirmation that creditors fare better under the First Amended
Plan than in a liquidation of the estates under chapter 7 of the
bankruptcy code, the Debtors present their analysis of creditor
recoveries in a chapter 7 scenario:

                                                   (In millions)
Assets:
      Cash (Domestic Only)                                  47.3
      Sale Escrow Return                                     6.0
      Warrant Value                                          5.0
      Liquidation of Foreign Subsidiaries                   24.6
      Miscellaneous                                          1.4
                                                         -------
                                                            84.3

Projected Expenses:
      Employee Retention & Termination Costs                 1.2
      Estimated Professional Fees                            8.7
      Other Pre-Confirmation Administrative Expenses         3.2
      Employee Medical Expenses                              2.5
      VFI LLC                                                5.0
                                                         -------
                                                            20.6

Net Assets Available for Distribution                       63.7

Less: Remaining Senior Secured Debt Claims                   2.3
Less: Taxes and Other Priority Claims                        4.1

Net Assets Available to General Unsecured Creditors         57.3

Estimate of General Unsecured Creditors                    230.0


Recovery to Unsecured Creditors                           24.91%
                                                          ------

Notes to Projected Recovery Analysis

  1. This analysis projects one possible distribution to general
     unsecured creditors of VFI.  It is based on numerous
     assumptions including assumptions regarding claims to be
     filed and could prove inaccurate.

  2. No assumptions are made as to the timing of recoveries or
     distributions.  The analysis does not include a projection
     of interest earned on cash balances.

  3. Cash includes approximately $2.5 million of cash restricted
     pursuant to prior agreement with senior lenders, but
     excludes cash pledged to collateralize certain insurance-
     related letter of credit obligations.

  4. Sale Escrow Return from the Pinnacle transaction assumes
     that all of the escrowed funds are paid to VFI.  Depending
     upon the final calculation of working capital at closing,
     purchase price adjustments could result in greater or
     lesser amounts being paid to the Estates.

  5. Warrant value is based on estimates provided by Lazard.

  6. Liquidation of Foreign Subsidiaries includes approximately
     $21,000,000 projected from United Kingdom subsidiaries and
     $4,000,000 from VFCI.  Assets are cash; recoveries are
     estimated net of projected professional and administrative
     costs and certain liabilities.  The timing of
     distributions, particularly from the United Kingdom, are
     unclear and will depend upon work to be performed by a
     liquidator appointed pursuant to UK law.  The Debtors
     believe that a significant distribution may be made during
     the first quarter of 2002, with the balance to be received
     before the end of 2002.  The analysis assumes
     dollar/sterling conversion rate of 1.40.

  7. Miscellaneous assets include refunds of insurance premiums,
     returns of deposits and prepaid expenses and net proceeds
     of liquidation of VFI's pension plan.  No estimate is made
     for recoveries from affirmative claims or other contingent
     assets.

  8. Professional fees are based on negotiated terms or on
     reported time charges, as applicable, and include estimates
     of charges through October 31, 2001.  Costs are shown net
     of retainers and payments to date.

  9. Other Pre-Confirmation Administration Expenses include,
     inter alia, ongoing insurance costs, environmental
     abatement expenses and payments to Pinnacle for transition
     services pursuant to the Pinnacle Asset Purchase Agreement.

10. This amount is based upon estimates provided by the
     Creditors' Committee of the operating and other costs of
     VFI LLC.

11. Approximately $324,000,000 of Senior Secured Debt was paid
     during June 2001, constituting payment of principal,
     interest, and fees under applicable agreements.  The
     remaining Senior Secured Debt Claims are for interest on
     paid senior secured debt and may be disputed.

12. Taxes and Other Priority Claims include, inter alia,
     reclamation claims and compensation claims of employees up
     to $4,300.

13. No adjustment has been made for distributions to a
     convenience class.

14. Estimate of unsecured claims includes scheduled claims and
     a further estimate of contract rejection, workers
     compensation and other claims. (Vlasic Foods Bankruptcy
     News, Issue No. 10; Bankruptcy Creditors' Service, Inc.,
     609/392-0900)


W.R. GRACE: Court Approves Retention of Asbestos Experts
--------------------------------------------------------
W. R. Grace & Co. asks Judge Farnan for his approval of their
retention of certain experts, saying that they have identified
certain experts needed to assist them with the litigation of
threshold tort liability issues and with proceedings concerning
the allowance/disallowance, estimation and liquidation of
claims.

Initially, the experts will act in a consulting capacity, though
some of them may also testify at some point in Daubert hearings,
estimation hearings, or other proceedings.  The Debtors
understand that the committees may also desire to retain or may
have already retained comparable experts, and the Debtors
propose that the relief requested in this motion for the
retention of experts also apply to the Committees and their
counsel, unless otherwise specified.  Whomever they may be
retained, such experts are generally included in this Motion.

Specifically, the Debtors don't believe that experts are
"professionals" who require court approval, so that the Debtors
ask judge Farnan to authorize both the Debtors and the
Committees to retain their own experts without requiring the
submission of separate retention pleadings and fee applications
for each expert.

The specific areas which require the services of experts are:

       (a) Medical diagnosis and disease causation, including:

             (i) Epidemiology;

             (ii) Pathology;

             (iii) Pulmonology and lung function; and

             (iv) Oncology;

       (b) Analysis of exposures, including:

             (i) Industrial hygiene; and

             (ii) Dose estimation and reconstruction;

       (c) State of the art;

       (d) Analysis, modeling and estimation of current and
           future asbestos personal-injury claims; and

       (e) Claims facility management and procedure.

The Debtors advise that they reserve the right to identify
additional areas and/or experts, if needed and as appropriate.

Moving the case along quickly, Judge Farnan grants this Motion
for experts as to all parties to this case. (W.R. Grace
Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


WARNACO GROUP: Releases Salaried Employee Savings Plan Statement
----------------------------------------------------------------
The Warnaco Group, Inc., has established an Employee Savings
Plan.  The Plan is intended to qualify under Sections 401(a) and
401(k) of the Internal Revenue Code of 1986, as amended.

In a report submitted to the Securities and Exchange Commission
last July 13, 2001, the Debtors' independent auditors, Deloitte
& Touche LLP of New York, relate they have audited the
statements of net assets available for benefits of The Warnaco
Group, Inc. Employee Savings Plan as of December 31, 2000 and
1999.

They have also audited the related statements of changes in net
assets available for benefits for the years then ended.
According to the auditors, these financial statements are the
responsibility of the Plan's management.  Their responsibility
is to express an opinion on these financial statements based on
their audits.

In conducting the audits, Deloitte & Touche note they followed
the auditing standards generally accepted in the United States
of America, which require them to plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement.  According to
Deloitte & Touche, an audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements.  It also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation,
they add.

In Deloitte & Touche's opinion, the Debtors' financial
statements present fairly the net assets available for benefits
of the Plan as of December 31, 2000 and 1999, and the changes in
net assets available for benefits for the years then ended in
conformity with accounting principles generally accepted in the
United States of America.


STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2000 AND 1999
(in thousands of dollars)
                                                 December 31,
                                            2000           1999
                                            ----           ----
ASSETS

Investments (Note 6)                      $29,821        $34,227

Participant loans                               2              6

Receivables:
    Participant contributions                 358            253
    Employer contributions                     54             28
                                           ------        -------
                                              412            281
                                           ------        -------

NET ASSETS AVAILABLE FOR BENEFITS         $30,235         34,514
                                          -------        -------

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
ENDED DECEMBER 31, 2000 AND 1999
(in thousands of dollars)
                                                   December 31,
                                             2000           1999
                                             ----           ----
ADDITIONS:
     Contributions:
        Participant                       $ 4,458        $ 3,654
        Employer                              579            388
                                          -------        -------
                                            5,037          4,042
                                          -------        -------
     Investment Income:
        Net (depreciation) appreciation
         in fair value of investments
         (Note 6)                          (4,240)         1,545
        Interest and dividend income        1,835          1,419
        Other income                           56             37
                                          -------        -------
                                           (2,349)         3,001

            Total additions                 2,688          7,043
                                          -------        -------

DEDUCTIONS:
     Benefit payments                       6,843          5,229
     Administrative fees                      124             28
                                          -------        -------
            Total deductions                6,967          5,257
                                          -------        -------

(DECREASE) INCREASE IN NET ASSETS         (4,279)         1,786

NET ASSETS AVAILABLE FOR BENEFITS:
     Beginning of year                     34,514         32,728
                                          -------        -------

End of year                               $30,235        $34,514
                                          =======        =======


The Warnaco Group, Inc. Employee Savings Plan is a defined
contribution plan, which covers all non-union employees and
certain collectively-bargained employees of The Warnaco Group,
Inc. and its subsidiaries who have attained age 21 and have
completed either one year of service or a period of service of
six months with credit of 1,000 hours of service. The Plan is
subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").

The Savings Plan Committee, which is appointed by the Board of
Directors of the Company, serves without compensation and is
responsible for the general administration of the Plan and makes
the final determination as to all questions arising in
connection with the interpretation, application and
administration of the Plan. Merrill Lynch, Pierce, Fenner &
Smith, Inc. serves as trustee, investment manager, and
administrative service provider to the Plan.

                         Contributions

Participants may elect to contribute a portion (after-tax or
pre-tax in whole percentages from 1% to 16%) of their eligible
compensation to the Plan. The Company matches contributions to
the Plan equal to 15% (such contributions are solely invested in
the Company's common stock fund) of a participant's
contributions up to 6% of eligible compensation. Section 401(k)
of the Internal Revenue Code and the Plan limit the amount
certain highly compensated individuals may contribute, based on
amounts contributed by lower compensated individuals. All
employees were limited to a maximum contribution of $10,500 in
2000 and $10,000 in 1999, by Code Section 402(g). If any
participant's compensation deferrals for a year exceed the
maximum allowable for that year, the excess amount may be
returned to the participant as taxable compensation. The Plan
also allows participants to rollover contributions from other
qualified plans into the Plan.

                    Participants' accounts

Each participant's account is credited with the participant's
contributions (may include both before tax and after tax
contributions) and allocations of (a) the Company's
contributions and, (b) Plan earnings and charged with an
allocation of administrative expenses and Plan losses.
Allocations are based on participant earnings or account
balances, as defined. The benefit to which a participant is
entitled is the benefit that can be provided from the
participant's vested account.

                           Vesting

Participants in the Plan are fully vested in their contributions
at all times. Participants vest ratably in their share of
Company matching contributions and in earnings thereon over a
four-year period.

Retirement age: Normal retirement age is 65.

                     Investment options

Each participant directs the investment of his or her account
balance into these investment options:

1) Travelers Group, Inc. Fixed Income Fund: The fund invests in
    Guaranteed Investment Contracts issued by Travelers
    Group, Inc. The fund also invests in high quality money
    market securities. Income is declared and reinvested
    monthly. Although the fund purchases investments denominated
    as "guaranteed investment contracts", neither the fund nor
    its units are in fact guaranteed, and such investments are
    subject to claims of creditors of the GIC's issuer.

2) Merrill Lynch Government Fund: This fund invests in cash
    holding account until the Traveler Group, Inc. completes it
    examination for accuracy of the remission notice information
    from the Company and balancing the total of the various
    amounts specified in the remission notice with the amount of
    the remission actually received. The amounts are
    appropriately allocated to the proper funds at the earliest
    practicable valuation date following the examination.

3) Merrill Lynch Global Allocation Fund (Balanced): This fund
    seeks high total return from a globally oriented portfolio
    of equity, debt and money market securities.

4) Merrill Lynch Growth Fund for Investment & Retirement
    (Managed Equity): This fund seeks to invest primarily in
    securities which fund management believes are undervalued.
    Undervalued securities are securities which either are
    selling at a discount from per-share book value, have
    dividend yields greater than the stock market average or
    seem capable of recovering from situations that caused the
    companies to become temporarily out of favor.

5) Merrill Lynch Institutional Fund (U.S. Government): This
    fund invests in high quality short-term "money market"
    instruments such as those issued by the U.S. Government,
    government agencies and instrumentalities, banks and
    corporations. The fund seeks to maintain a consistent one
    dollar per share net asset value, although this cannot be
    assured.

6) Merrill Lynch Equity Index Trust (Indexed Equity): This fund
    is a collective trust maintained by Merrill Lynch Trust
    Company, therefore the funds are commingled with other
    Merrill Lynch funds. The fund seeks to approximate the total
    return of the Standard & Poor's 500 Composite Stock Fund
    Index.

7) Common Stock Fund: This fund offers employees an opportunity
    to share in the ownership of the Company with the potential
    for capital appreciation. This fund also invested in common
    stock of the Authentic Fitness Corporation, an affiliate of
    the Company, which was acquired by the Company in December
    1999 (see Note 5 and Note 7).

Participants may allocate investment balances to the funds in
any combination as long as each investment is made in even
multiples of 10% of the participant's fund balance.

                     Benefit Payments

Upon termination of service from death, disability or
retirement, vested benefits due to the participants or their
beneficiaries will be paid in a lump sum, in installments or as
an annuity. Participants may withdraw their vested account
balance upon termination of employment. The Plan also allows for
hardship withdrawals under certain circumstances.

                     Forfeited Accounts

As provided in the Plan, forfeitures by participants of
Company contributions and earnings thereon during any calendar
month are applied as an offset to future Company contributions
payable under the Plan. Company contributions forfeited by
participants amounted to approximately $116,539 and $121,142 for
the Plan years 2000 and 1999, respectively.

                    Participant Loans

The Plan does not allow loans to participants. On December 31,
1998, as a result of the merger of a plan of an entity acquired
by the Company, participant loan balances were transferred to
the Plan. Once the existing participant loans are repaid, no
further loans will be allowed.

                   Risk and uncertainties

Investment securities are exposed to various risks, such as
interest rate, market and price. Due to the level of risk
associated with certain investment securities and the level of
uncertainty related to changes in the value of investment
securities, it is at least reasonably possible that changes in
risk in the near term would materially affect participants'
account balances and the amounts reported in the statements of
net assets available for benefits and the statements of changes
in net assets available for benefits.

            Investment valuation and income recognition

Plan investments other than insurance contracts are stated at
fair value and are determined based upon quoted market prices.
Insurance contracts are deposit administration contracts valued
at contract value. Funds may be withdrawn pro rata from all
investment contracts at contract value determined by the
respective insurance company to pay Plan benefits and to make
participant-directed transfers to other funds pursuant to the
terms of the Plan after the amounts in the money market
securities are depleted. The contract value of the guaranteed
annuity contracts approximates the fair value. Shares of
registered investment companies are valued at quoted market
prices, which represent the net asset value of shares held by
the Plan at year-end. Purchases and sales of securities are
recorded on a trade-date basis. Participant loans are valued at
cost, which is not materially different from fair value. The
Plan presents in the statements of changes in net assets
available for benefits the net appreciation (depreciation) in
the fair value of its investments, which consists of the
realized gains or losses and the unrealized appreciation
(depreciation) of those investments.

Payment of benefits.  Benefits are recorded when paid.

Administrative expenses. Administrative expenses of the Plan are
paid by the Plan.

                    Plan termination

Although it has not expressed any intent to do so, the Company
has the right to terminate the Plan at any time subject to the
provisions of ERISA. In the event of a termination of the Plan,
all interests of participants become fully vested and the GIC's
shall continue until all participants' accounts have been
completely distributed to the participants or their designated
beneficiaries in accordance with the Plan.

                    Income Tax Status

The Internal Revenue Service has determined and informed the
Company by letter dated March 12, 1996 that the Plan and related
trust are designed in accordance with applicable sections of the
Internal Revenue Code. The Plan has been amended since receiving
the determination letter. However, the Plan
Administrator believes that the Plan is currently designed and
being operated in compliance with the applicable requirements of
the Code. Therefore, no provision for income taxes has been
included in the Plan's financial statements.

              Party-in-Interest Transactions

Merrill Lynch, the trustee as defined by the Plan, manages the
assets of the Plan and therefore these investments qualify as
party-in-interest. Fees paid by the Plan to the trustee for
investment management services were $124,000 and $28,000 for the
years ended December 31, 2000 and 1999, respectively.

The Common Stock Fund of the Plan held 311,699 and 126,560
shares of common stock of the Company at December 31, 2000 and
1999, respectively. The cost of such shares was $3,686,582 and
$3,201,844 with a fair market value of $525,836 and $1,558,209
at December 31, 2000 and 1999, respectively. In December 1999,
the Company acquired Authentic Fitness and, as a result, the
Plan tendered 4,425 shares of Authentic Fitness stock owned for
the tender offer price of $20.75, receiving proceeds of
approximately $92,000. Effective April 1, 2000, employees of
Authentic Fitness were eligible to participate in the Plan,
subject to the Plan's eligibility requirements.

The Independent Auditors' Report on examination of the fiscal
2000 financial statements of the Plan Sponsor includes an
explanatory paragraph, which raises substantial doubt about the
Plan Sponsor's ability to continue as a going-concern. However,
the Plan Sponsor continues to fund the Company match into the
Plan and has no current plans to terminate the Plan.

Effective July 1, 2001, as a result of the Company's recent
Chapter 11 Bankruptcy filing, the Company's employer matching
contribution will be made in the form of cash rather than
Company stock. Additionally, the Plan has discontinued The
Warnaco Group, Inc. common stock as a participant investment
option. (Warnaco Bankruptcy News, Issue No. 7; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


WHEELING-PITTSBURGH: Discussions with USWA to Resume Next Week
--------------------------------------------------------------
Wheeling-Pittsburgh Steel Corporation announced that it has made
substantial progress in its discussions with the United
Steelworkers of America and that those discussions will resume
next week.

"We have had very constructive and productive discussions with
the United Steelworkers of America over the past 11 days," said
Daniel C. Keaton, Senior Vice President of Human Resources and
Public Relations. "While some matters have yet to be fully
worked out, we are hopeful that these issues can be resolved in
the near future."

Wheeling-Pittsburgh Steel began meeting with the USWA on Aug. 20
to discuss certain modifications to the existing labor
agreement. Wheeling-Pittsburgh Steel Corporation is the ninth
largest domestic integrated steelmaker. It filed for Chapter 11
bankruptcy protection on Nov. 16, 2000.


WHEELING-PITTSBURGH: Has Until Sept. 4 to Decide on Ryder Pact
--------------------------------------------------------------
Ryder Truck Rental, inc., represented by Kristin Going, Esq., at
Weltman Winberg & Reis, together with Joseph L. Steinfeld, Jr.,
and Deborah c. Swenson of ASK Financial of Eagan, Minnesota, ask
Judge Bodoh to force Wheeling-Pittsburgh Steel Corporation to
assume or reject a Truck Lease and Service Agreement with Ryder,
or to compel WPSC to provide adequate protection to Ryder to
protect Ryder's interests relating to this Agreement.

In May 1994 Ryder and WPSC signed a Truck Lease and Service
Agreement, amended that same day, under which Ryder leased 26
trucks to WPSC. These vehicles consist of:

       Six Utility Flat Bed Trailers
       One T/A St. Truck
       One T/A Sleeper
       Seven Freightliner Tractors
       Two Freightliner Truck
       Three Navistar Trucks
       Two Great Dane 48' Flat Bed Trailers
       Two Great Dane 45' Flat Bed Trailers
       Two T/A Tractors

The TLSA is effective until validly terminated.  Termination
requires written notice 60 days prior to any anniversary of the
TLSA be effective upon the anniversary.

Prior to the Petition Date, WPSC incurred $19,533.33 in lease
charges under the TLSA which remain unpaid.  In addition, the
Debtor has continued to use the leased vehicles subsequent to
the Petition Date has incurred $73,764.24 in postpetition TLSA
that WPSC has failed to pay.  Ryder has determined that WPSC
still needs the leased vehicles in its possession to operate its
business, and continues to use them.

In order to assume the TLSA, WPSC needs to become current in its
past due payments.  This requires payment of all pre- and
postpetition charges, and maintenance of current payments
thereafter.  If WPSC rejects this lease, Ryder will be damaged
in the amounts owed, and in lease termination chares in an
amount to be determined at the time of rejection.  The current
amount of termination charges is $435,162.59. If WPSC rejects,
Ryder's interests would be best served by immediately recovering
use of the leased vehicles for other business.

Ryder also needs adequate assurance of WPSC's ability to make
future payments, if WPSC assumes the lease or if Judge Bodoh
does not compel the Debtor to immediately accept or reject the
TLSA.  Upon rejection, Ryder should be entitled to assert
appropriate general and administrative claims for damages
arising from the Debtor's default and breach of the TLSA.

Ryder brings this Motion requesting a deadline for WPSC to make
its decision to assume or reject the TLSA.  This Motion is made
necessary by WPSC's failure to notify Ryder in writing of its
decision to assume or reject the TLSA, and Ryder's business
necessary of an immediate return of the leased vehicles.

                      The Agreed Extension

Ryder and WPSC announce their agreement that the Debtors may
have until September 4, 2001, to object or otherwise respond to
the Motion, with a hearing on the Motion to follow on September
13, 2001. (Wheeling-Pittsburgh Bankruptcy News, Issue No. 10;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


WINSTAR COMMS: Court Okays Payment Scheme Agreement with Sprint
---------------------------------------------------------------
Sprint Communications, L.P. provides Winstar Communications,
Inc. with long-distance and other telecommunications services,
which the Debtors re-sell, pursuant to Resale Solutions Switched
Services Agreement previously reached by both parties.  Sprint
continues to render such services even after the filing of the
Debtors' Chapter 11 cases and due to the Interim Utilities Order
issued by Judge Farnan.

Prior to the filing date, the Debtors' average monthly usage of
Sprint's services was approximately $350,000 and Debtors were
indebted to Sprint in excess of $1,220,793 representing unpaid
and past due monthly services.  Based on average monthly usage
and on billing practices of Sprint, it will have to incur an
additional credit exposure to Winstar of approximately $875,000
as it has continued to provide Sprint with long-distance
services.

Mark E. Felger, Esq., at Cozen & O'Connor, P.C. in Wilmington,
Delaware, asks the Court for adequate assurance for future
payment in the form of the following:

   a. immediate cash deposit in the amount of $875,000

   b. immediate payment of post-petition amounts owing to Sprint

   c. entry of an order directing that if the Debtors fail to
      make timely payments due, Sprint shall have the right to
      terminate the service to the Debtors without further order
      of the Court

   d. Entry of an order to permit Sprint to off-set all pre-
      petition amounts

To resolve this dispute, the Debtors and Sprint met and
discussed the terms under which Sprint will withdraw the motion
and continuation of services rendered to the Debtors.

Terms of the agreement approved by Judge Joseph J. Farnan, Jr.
are as follows:

   1. As adequate assurance, the Debtors shall make the follwing
      payments:

      (a) payment to Sprint on May 10, 2001 of $192,920 for
          post-petition usage from filing date to May 5, 2001

      (b) payment to Sprint on May 10, 2001 in the amount of
          $110,780 for services provided by Sprint for the
          period May 6-15, 2001

      (c) payment to Sprint on May 15, 2001 in the amount of
          $77,609 as weekly prepayment for services to be
          provided to the Debtors on May 18-25, 2001

      (d) Prepayments of $77,609 every Wednesday thereafter

   2. After issuances of monthly invoice for service rendered,
      parties will reconcile the amount due to the total weekly
      payments for the month.  If the Debtors owes additional
      payment to Sprint, it shall do so within 3 business days
      after the reconciliation.  To the extent that Sprint has
      been overpaid, the overpayment will be credited to the
      next weekly payment due.

   3. All payment agreed upon shall be funded by wire transfer
      to Sprint on the dates set forth above accompanied by
      written notice to Sprint setting forth that payment has
      been made.

   4. If the Debtors fail to make timely payment and if payment
      remains unpaid at the end of the business day after Sprint
      gives notice of failure to receive payment, Sprint shall
      have the right to terminate the services to the Debtors
      without further notice.

   5. Sprint is granted an administrative expense claim for all
      post-petition services provided by the Debtors and such
      claims shall be entitled priority status. (Winstar
      Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
      Service, Inc., 609/392-0900)


WKI HOLDING: S&P Junks Ratings Due to Tight Liquidity
-----------------------------------------------------
Standard & Poor's lowered its corporate credit and senior
secured bank loan ratings on WKI Holding Company Inc. to triple-
'C' from single-'B'. At the same time, the subordinated debt
rating was lowered to double-'C' from triple-'C'-plus. The
ratings are removed from CreditWatch, where they were placed
Sept. 6, 2000.

The outlook is negative

Total debt as of June 30, 2001 was about $800 million.

The downgrade reflects WKI Holding's limited liquidity position
and continued weak operating and financial performance following
the 1999 acquisitions of EKCO Group Inc. and General Housewares
Corp. Reduced earnings and increasing debt levels have resulted
in credit protection measures that are below Standard & Poor's
expectations.

Current liquidity remains tight with availability of $6.3
million on $325 million in revolving credit facilities as of
Aug. 13, 2001. The company's revolving credit facilities include
the recently completed amendment to its credit agreement to
provide for a new $25 million revolving credit facility maturing
2004 from its bank group. In addition, WKI Holding obtained a
new $25 million revolving credit facility maturing 2004 from
Borden Inc., an affiliate of the company's parent, BW Holdings
LLC.

WKI Holding's operating performance has been below Standard &
Poor's expectations due to weak sales, change in product mix,
and increased costs associated with supply chain inefficiencies
and price competition. Further, the integration of ECKO and
General Housewares proved to be more challenging than originally
anticipated. The company's new management is in the process of
lowering costs through restructuring, improving supply chain
management, reducing inventories, and correcting distribution
problems.

WKI Holding's credit protection measures (adjusted for
restructuring charges) for the trailing 12 months ended June 30,
2001 were very weak, with EBITDA interest coverage of 0.9 times
(x) and debt to EBITDA of about 12.3x. Standard & Poor's expects
fiscal 2001 credit protection measures will remain poor as a
result of reduced demand due to the soft economy, continued
expense control challenges, and elevated debt levels. Given
tight liquidity, Standard & Poor's believes the company will be
challenged to meet its upcoming peak season working capital
needs and debt servicing requirements, including a November 2001
interest payment.

The ratings could be lowered if WKI Holding's liquidity position
deteriorates further or operating performance does not show
improvement over the near term.

                          *********

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, Ronald Villavelez 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
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The TCR subscription rate is $575 for 6 months delivered via e-
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are $25 each.  For subscription information, contact Christopher
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                     *** End of Transmission ***