/raid1/www/Hosts/bankrupt/TCR_Public/011214.mbx        T R O U B L E D   C O M P A N Y   R E P O R T E R

           Friday, December 14, 2001, Vol. 5, No. 244

                          Headlines

360NETWORKS: Committee Taps Shandro Dixon as Canadian Counsel
ABC-NACO: Court Confirms Sale of Operating Assets to TCF Railco
ANC RENTAL: Proposes Subordination of German Subsidiary Claims
ALLIED RISER: Commences Limited Repurchase of 7.50% Notes
BETHLEHEM STEEL: Court Okays Cravath Swane as Special Counsel

BURLINGTON: Will Not Pay Postpetition Deposits to Utilities
CII TECHNOLOGIES: Ratings on CreditWatch Positive After Merger
CHIQUITA BRANDS: Will Be Paying Prepetition Employee Obligations
COMDISCO INC: Reschedules Release of Year-End Results to Dec. 21
COVAD: Set to Exit Bankruptcy by Dec. 20 After Plan Confirmation

DILLARD'S INC: S&P Lowers Ratings On Continued Weak Performance
EASYLINK SERVICES: Zesiger Capital Reports 13.4% Equity Interest
EDISON INT'L: SoCal Unit Facing Third Suit Filed by CalEnergy
ENRON CORP: Intends to Honor Prepetition Employee Obligations
ENRON CORP: Utility-Related Hearing Rescheduled to December 20

ENRON CORP: AEP Buys Contracts & Hires International Coal Team
ESYLVAN INC: Will Need Fresh Financing After Dec. 31 to Continue
EXODUS COMMS: Intends to Pay Prepetition Mechanics' Lien Claims
FEDERAL-MOGUL: Selling Signal-Stat Business for At Least $23.3MM
FRIEDE GOLDMAN: Plan Filing Exclusive Period Extended to Feb. 11

GENERAL DATACOM: Asks Court to Extend Schedule Filing Deadline
GENESIS WORLDWIDE: KPS & Pegasus Complete $20MM+ Asset Purchase
GLENOIT CORP: Court Extends Removal Period Until February 6
HAYES LEMMERZ: Gets Waver of Investment & Deposit Requirements
HEXCEL CORP: S&P Drops Ratings on Weak operating Performance

HIGHLANDS INSURANCE: Falls Below NYSE Continued Listing Criteria
HOLLYWOOD ENTERTAINMENT: S&P Junks Ratings on $300 of Securities
J.F.K. Acquisition: Case Summary & 20 Largest Creditors
LTV CORP: Republic Steel Retirees Back Committee Appointment
LERNOUT & HAUSPIE: ScanSoft Consummates Purchase of S&L Business

NAVIGATOR GAS: S&P Withdraws Ratings for Lack of Timely Info.
NAVISITE INC: EBITDA Losses in Q1 2002 Jump to $35.4 Million
NETCENTIVES INC: Ceases All Operations and Commences Wind-Down
NTELOS: Potential Merger Termination Has S&P Keeping Watch
OCEAN POWER: Additional Resources Needed to Continue Operations

OMEGA HEALTHCARE: Seeks Approval to Raise New Equity Capital
OPTI INC: Breider Moore to Vote Against Plan of Liquidation
PACIFIC GAS: Wants to Settle Prepetition Claims Below $100,000
PARTY CONCEPTS: Court Fixes Feb. 1 Bar Date for Proofs of Claim
PILLOWTEX: Fieldcrest Wants to Implement Employee Restructuring

POLAROID CORP: Signs-Up Dresdner Kleinwort as Financial Advisors
SERVICE MERCHANDISE: Set to File Chapter 11 Plan After Christmas
TELEX COMMUNICATIONS: September Quarter Net Sales Decrease 15.5%
USG CORP: SoCal Edison Wants $1.2 Million Security Deposit
U.S. WIRELESS: Gets Approval to Sell Assets to Trafficmaster USA

UNOVA INC: S&P Examining Junk Ratings' Developing Implications
WARNACO GROUP: Retaining Michael Fox Internatioanl as Auctioneer
WHEELING-PITTSBURGH: Amends Ore Sales Pact with Itabira Rio Doce
WILLCOX & GIBBS: Seeks Plan Filing Period Extension to March 4

* BOOK REVIEW: The ITT Wars: An Insider's View of Hostile
               Takeovers

                          *********

360NETWORKS: Committee Taps Shandro Dixon as Canadian Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors of 360networks
inc., and its debtor-affiliates, desires to retain and employ
the Canadian law firm Shandro Dixon Edgson to monitor certain
bankruptcy proceedings pending in Vancouver, Canada, which are
related to the Debtors' bankruptcy proceedings.

Speaking for the Committee, Mark Brandenburg, of Pirelli Cables
& Systems, LLC, tells Judge Gropper that the Shandro firm has
substantial experience in bankruptcy, insolvency, corporate
reorganization and debtor/creditor law, and has participated in
numerous proceedings before the Canadian insolvency courts.

According to Mr. Brandenburg, the professional services the
Committee anticipates the Shandro firm will render include:

    (a) Monitor filings in the Canadian insolvency proceedings;

    (b) Make filings on behalf of the Committee in the Canadian
        insolvency proceedings;

    (c) Represent the Committee, as it directs, in the Canadian
        insolvency proceedings;

    (d) Provide advice regarding Companies' Creditors
        Arrangement Act and general Canadian law; and

    (e) Any other tasks that the Committee directs.

Mr. Brandenburg contends that the Committee's retention of the
Shandro firm to act as local Canadian counsel is essential in
order for the Committee to fulfill its fiduciary obligations to
unsecured creditors of these estates.  The Debtors view their
businesses as comprising a single North American business
enterprise, Mr. Brandenburg explains.  Indeed, Mr. Brandenburg
notes, the Debtors' intended reorganization is apparently
premised upon some form of sale, merger of capital investment
involving the North American business.

Accordingly, Mr. Brandenburg says, the Canadian insolvency
proceedings will impact U.S. and Canadian creditors alike.
Moreover, Mr. Brandenburg adds, the Debtors have sought various
forms of relief from both this Court and the Canadian court,
with approval of both Courts being required.  For these reasons,
Mr. Brandenburg maintains, the Committee needs to be able to
monitor the Canadian insolvency proceedings.  It is therefore
imperative for the Committee to have the benefit of counsel "on
the ground" in Canada, Mr. Brandenburg tells Judge Gropper.

The Committee requests that the Shandro firm be compensated on
an hourly basis, plus be reimbursed for the actual, necessary
expenses it incurs.  Frederick W. Shandro, a partner in the
Shandro firm, lists down the hourly rates applicable to the
attorneys and paralegals proposed to represent the Committee:

    Professional              Position            Rate (CDN $)
    ------------              --------            ------------
    Frederick W. Shandro      Partner                 $400
    James F. Dixon            Partner                  400
    Larry S. Blaschuk         Associate                275
    Robert B. Rogers          Associate                275

Mr. Shandro declares, "To the best of my knowledge, the Shandro
firm has no connection with any party-in-interest, their
attorneys or professionals, the United States Trustee or any
person in the Office of the United States Trustee."  The Shandro
firm does not hold or represent any entity having an adverse
interest to the Committee or the Debtors' unsecured creditors in
connection with the Debtors' case, Mr. Shandro assures the
Court.  For as long as it represented the Committee, Mr. Shandro
adds, the Shandro firm will not represent any entity other than
the Committee in connection with the Debtors' bankruptcy
proceedings. (360 Bankruptcy News, Issue No. 15; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


ABC-NACO: Court Confirms Sale of Operating Assets to TCF Railco
---------------------------------------------------------------
ABC-NACO Inc., announced that the U.S. Bankruptcy Court for the
Northern District of Illinois entered an order approving the
previously announced sale of certain of its assets to TCF Railco
Acquisition Corp.

As announced previously, ABC-NACO agreed to sell all of its
operating assets to TCF for $75 million (subject to certain
adjustments and assumption of certain liabilities). The assets
sold include all of the United States operating assets of the
Company's Rail Products, Track Products and Rail Services units
together with the stock of the Company's subsidiaries in Europe
and its joint ventures in China. The Canadian and Mexican
subsidiaries in the Rail Products Group were not included in
this sale.

The sale of the assets to TCF was completed in accordance with
the court-authorized sales process. The sale is subject to
review under the Hart-Scott-Rodino Antitrust Improvements Act.
The parties intend to close the sale as soon as possible after
the necessary approvals have been received.

After the closing, the assets purchased by TCF will operate
under the ownership of TCF. Certain assets that were not
included in this sale will be liquidated with the proceeds left
in the debtor estate of ABC-NACO. These proceeds together with
the proceeds from the sale to TCF will be used to satisfy the
claims of ABC-NACO creditors. Since the Company has senior
secured bank and other debt in excess of $170 million, it is
unlikely that there will be proceeds available to satisfy the
claims of unsecured creditors or to provide any recovery to
shareholders.

TCF is owned by Three Cities Funds III, L.P. and affiliates. The
Three Cities Funds are primarily engaged in making control
investments in medium-sized companies, where its investment can
lead to a meaningful, positive influence on the future direction
of the enterprise.

As previously announced on October 18, 2001, ABC-NACO and its
U.S. subsidiaries voluntarily filed for reorganization under
Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy
Court for the Northern District of Illinois. The cases have been
assigned to the Honorable Judge Eugene R. Wedoff and are being
jointly administered under the Case No. 01 B 36484 for ABC-NACO
Inc.

The Company is one of the world's leading suppliers of
technologically advanced products to the rail industry. The
Company holds pre-eminent market positions in the design,
engineering and manufacture of high-performance freight car,
locomotive and passenger suspension and coupling systems, wheels
and mounted wheel sets. The Company also supplies railroad and
transit infrastructure products and services and technology-
driven specialty track products.


ANC RENTAL: Proposes Subordination of German Subsidiary Claims
--------------------------------------------------------------
ANC Rental Corporation, and its debtor-affiliates seek
authorization from the Bankruptcy Court to provide Republic
Industries Autovermietung GmbH, a German operating company, and
Republic Industries GmbH (Holding Tree), a German holding
company, with a formal declaration that the funds that were
advanced to the German Subsidiaries in the aggregate amount of
$65,966,332 are subordinated claims that can only be paid out of
future annual or liquidation surpluses of the German
Subsidiaries.

Mark J. Packel, Esq., at Blank Rome Comisky & McCauley LLP in
Wilmington, Delaware, relates that as of October 31, 2001,
Autovermietung had a negative net worth of $29,800,000 while
Holding Tree had a negative net worth of $21,900,000. Under
German law the managing directors of the German Subsidiaries are
required to commence insolvency proceedings with respect to the
German Subsidiaries within 21 days of obtaining information
about the occurrence of either illiquidity or overindebtedness
on the part of the German Subsidiaries, unless they can remove
the cause of such illiquidity or overindebtedness within such 21
days.  If the managing directors do not commence insolvency
proceedings within the required time period, Mr. Packel fears
that the managing directors will be held personally liable under
both civil and criminal law because the German Subsidiaries have
both liquidity and overindebtedness issues.

Although the German Subsidiaries have had a negative net worth
for some time, Mr. Packel explains, they have been able to avoid
triggering the requirement to commence insolvency proceedings by
having the Debtors provide a parental guarantee to the German
Subsidiaries' lenders.  This method, however, is no longer
sufficient and the ability of the German Subsidiaries to rely on
the Debtors' guarantee or a continued stream of funding is no
longer available.

Mr. Packel tells the Court that the only solution available for
the German Subsidiaries to avoid commencing insolvency
proceedings would be to have the Debtors formally declare the
funds advanced to the German Subsidiaries as being subordinated
claims that can only be paid out of future annual or liquidation
surpluses. That would in effect allow the German Subsidiaries to
exclude these intercompany payables from their debt calculations
thus giving the German Subsidiaries a positive net worth and
solving their overindebtedness issues.

If the Debtors do not provide the German Subsidiaries with a
formal declaration of subordination, the managing directors of
the German Subsidiaries will be forced to commence insolvency
proceedings. Unlike a United States chapter 11 filing, Mr.
Packel informs the Court that a German insolvency proceeding
would lead to the liquidation of the German Subsidiaries, which
would be detrimental to the Debtors for several reasons.

Mr. Packel contends that the Debtors' foreign operations are an
important part of the Debtors' overall business strategy. If the
German Subsidiaries were forced to liquidate, the Debtors'
goodwill and brand name recognition would be harmed, which in
turn will result in the erosion of the Debtors' customer base
and the loss of revenue. Moreover, Mr. Packel points out that
the liquidation of the German Subsidiaries may be viewed by the
Debtors' suppliers and customers as a sign of weakness in the
Debtors' global business, which may impact negatively on the
Debtors' restructuring efforts.

Moreover, the Debtors have received and continue to receive,
inquiries from prospective third parties for the purchase of
some or all of the Debtors' European operations. In order to
allow the Debtors to explore these alternatives, Mr. Packel
stress that it is important that the Debtors be authorized to
subordinate their claims to the German Subsidiaries, in order to
eliminate the overindebtedness test under German insolvency law
and to forestall a potential liquidity crisis for the Debtors'
other European operations, which would negatively affect the
going concern value of such entities, derail any sale process
and harm the Debtors' ability to successfully reorganize.

Whether or not the Debtors provide the German Subsidiaries with
a formal declaration of subordination, Mr. Packel claims that
the funds advanced by the Debtors would be subordinated by
operation of German law. Thus, in any insolvency proceeding the
Debtors' claim would rank below all other creditors of the
German Subsidiaries. In the opinion of the Debtors, and as
supported by the most recent unaudited financial statements of
the German Subsidiaries, the Debtors would receive no
distribution on their claims in any insolvency proceeding. Even
though the Debtors' claims against the German Subsidiaries would
be subordinated by operation of law, Mr. Packel states that
under German law a formal declaration of subordination would
still be required by the Debtors in order to remedy the
insolvency status of the German Subsidiaries.

Mr. Packel concludes that it would be in the best interests of
the Debtors' estates and their creditors for the German
Subsidiaries to be allowed time to either pursue a restructuring
of the German operations or a sale of those operations, either
of which would provide the Debtors with a prospect of some
recovery of its intercompany debt. (ANC Rental Bankruptcy News,
Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900)  


ALLIED RISER: Commences Limited Repurchase of 7.50% Notes
---------------------------------------------------------
Allied Riser Communications Corporation (Nasdaq: ARCC) announced
today that it had initiated the repurchase of certain of its
7.50% convertible subordinated notes due 2007 at a discount from
the face value of the notes in limited open market or negotiated
transactions.  The purchases were authorized by the ARC board of
directors and approved by Cogent Communications Group, Inc.
pursuant to the merger agreement signed by the companies in
August 2001.

"While the transactions completed to date are not material to
ARC's current financial position, we continue to believe that
the repurchase of a certain amount of these notes at the right
price makes sense for ARC," stated Quen Bredeweg, ARC's chief
financial officer.  ARC stressed that there can be no assurance
that it will purchase any additional notes.

In addition, ARC confirmed that certain of the holders of the
notes had filed notices with the Securities and Exchange
Commission on Schedule 13D indicating that they are acting as a
group.  Included in the Schedule 13D filings are copies of
documents indicating that the group has filed a suit against ARC
and its board of directors alleging, among other things,
breaches of fiduciary duties and requesting injunctive relief to
prohibit ARC's merger with Cogent.  The documents also allege
default by ARC under the indenture related to the notes.  ARC
believes that the allegations contained in the documents are
without merit.

As previously announced, ARC has entered into a merger agreement
with Cogent Communications Group, Inc.  In the merger, holders
of ARC common stock will receive shares of Cogent common stock.  
Under the terms of the merger agreement with Cogent, ARC is
prohibited from, among other things, repurchasing its
outstanding securities, including the notes, without Cogent's
consent.  ARC intends to seek Cogent's consent to any possible
repurchase of additional notes.  There can be no assurance that
Cogent will consent to any additional repurchases.

               Important Information for Investors
                      and Security Holders

Investors and security holders are urged to carefully read the
Registration Statement and the Proxy Statement/Prospectus filed
with the SEC by Cogent Communications Group, Inc. on October 16,
2001 and the amendments thereto because these documents contain
important information about ARC and the proposed merger
transaction with Cogent.  Investors and security holders may
obtain the documents filed with the SEC free of charge at the
website maintained by the SEC at www.sec.gov .  In addition, you
may obtain documents filed with the SEC by ARC free of charge by
requesting them in writing from ARC, 1700 Pacific Avenue, Suite
400, Dallas, Texas 75201, Attention: Investor Relations, or by
telephone at (214) 210-3000.

In addition to the Proxy Statement/Prospectus, ARC files annual,
quarterly and special reports, proxy statements and other
information with the SEC. These filings are also available at
www.sec.gov .

ARC and its directors, executive officers and certain members of
management and employees, may be deemed participants in the
solicitation of proxies from the stockholders of ARC in
connection with the merger. Information about the directors and
executive officers of ARC, their ownership of ARC's stock is set
forth in ARC's Annual Report on Form 10-K for the fiscal year
ended December 31, 2000.  Stockholders and investors may obtain
additional information regarding the interests of such
participants in the merger by reading the Proxy
Statement/Prospectus.

ARC, headquartered in Dallas, is a provider of data
communications services in commercial office buildings across
the United States and in Canada. * Demand for data services
hasn't met expectations, however, and ARC is exiting the retail
telecom services business. Before it agreed to be acquired by
Cogent, ARC had planned to sell capacity on its in-building
networks to other telecom companies. It had also announced plans
to cut its workforce by more than 80%. As of June 30, 2001, ARC
reported an upside-down balance sheet, with stockholders' equity
deficit of about $4 million.


BETHLEHEM STEEL: Court Okays Cravath Swane as Special Counsel
-------------------------------------------------------------
On an interim basis, Judge Lifland approves Bethlehem Steel
Corporation's retention of Cravath, Swane & Moore as special
corporate counsel in accordance with the firm's normal hourly
rates and disbursement policies.  The Court will convene a
hearing on December 19, 2001 at 10:00 a.m. to consider the
Application and any objections.  But if there are no objections,
the Interim Order shall be deemed a final order without further
notice or hearing.

Leonard M. Anthony, Bethleham's Senior Vice President, Chief
Financial Officer and Treasurer, informs the Court that Cravath
has served as the Debtors general corporate counsel since 1904.  
Thus, Mr. Anthony notes, it is undeniable that Cravath is very
familiar with the Debtors' financial structure, creditor
relationships, contractual relationships, and business
operations and affairs.

That's why, Mr. Anthony explains, the Debtors seek to retain
Cravath as special corporate counsel in connection with these
cases.  In this role, Mr. Anthony says, Cravath will assist the
Debtors in finance, joint venture and other corporate
proceedings, as well as in various matters that may be litigated
before this Court or possibly in other forums.  At the same
time, the Debtors expect Cravath to continue providing services
in connection with their general corporate legal needs as well
as other services, which may include litigation services.

Mr. Anthony assures the Court that Cravath will work closely
with Weil, Gotshal & Manges so that Cravath's knowledge and
experience with respect to the legal affairs of the Debtors can
be made available to the Debtors' bankruptcy counsel in this
case.

Since September 30, 2000, Mr. Anthony informs the Court that
Cravath has billed the Debtors $2,106,846 for pre-petition
services rendered and disbursements and other charges incurred,
and those bills were paid in full before the Petition Date.  

The Debtors propose to pay Cravath its customary $120 to $625
hourly rates for attorneys and paralegals working on these
chapter 11 cases.  

Cravath partner D. Collier Kirkham, Esq., notes that his  
Cravath, as a large firm, has represented certain creditors and
parties-in-interest in these cases.  But to the best of his
knowledge, Mr. Kirkham declares, Cravath has not represented any
of these entities in connection with matters relating to the
Debtors.  Cravath neither has any adverse interest against the
Debtors, Mr. Kirkham adds.  (Bethlehem Bankruptcy News, Issue
Nos. 2 and 6; Bankruptcy Creditors' Service, Inc., 609/392-0900)


BURLINGTON: Will Not Pay Postpetition Deposits to Utilities
-----------------------------------------------------------
Burlington Industries, Inc., and its debtor-affiliates currently
utilize gas, water, electric, telephone and other utility
services provided by approximately 94 utility companies.  
Because the utility companies provide essential services to the
Debtors' manufacturing, distribution and other facilities,
Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger,
P.A., in Wilmington, Delaware, tells Judge Walsh that any
interruption in utility services could prove devastating.  In
fact, Mr. DeFranceschi adds, the temporary or permanent
discontinuation of utility services at any of the Debtors'
facilities could irreparably disrupt the Debtors' business
operations.  As a result, Mr. DeFranceschi notes, this could
fundamentally undermine the Debtors' reorganization efforts.

The Debtors are prohibited from paying utility bills not yet due
and owing as of the Petition Date, as a result of the
commencement of these chapter 11 cases.  Except for those bills,
Mr. DeFranceschi says, the Debtors historically have paid their
pre-petition utility bills in full when due.  The Debtors have
sufficient cash reserves, together with anticipated access to
sufficient DIP financing, to pay all of the Debtors' post-
petition obligations to utility companies, Mr. DeFranceschi
assures the Court.

Additionally, all such claims will be entitled to administrative
priority treatment, Mr. DeFranceschi notes.  Moreover, the
Debtors are proposing to protect the utility companies further
by providing a mechanism for them to request additional
assurance of future payment from the Debtors.

In conclusion, Mr. DeFranceschi contends, the utility companies
manifestly enjoy "adequate assurance" of payment, in the light
of:

    (i) the Debtors' history of prompt and full payment to the
        utility companies,

   (ii) the Debtors' demonstrable ability to pay future utility
        bills,

  (iii) the administrative priority status afforded the utility
        companies' post-petition claims,

   (iv) any existing cash security deposits (and other forms of
        security) held by certain of the utility companies, and

    (v) the utility companies' opportunity to seek additional
        assurance of future payment in accordance with the
        Determination Procedures.

Convinced by the Debtors' arguments, Judge Walsh rules that:

  (A) no utility company may alter, refuse, terminate or
      discontinue utility services to the Debtors on account of
      outstanding pre-petition invoices or requiring adequate
      assurance of payment as a condition to receiving such
      services;

  (B) the Debtors are not required to make any post-petition
      deposits (or grant other forms of security) to the utility
      companies; and

  (C) no utility company may draw upon any existing cash
      security deposit, surety bond or other form of security to
      secure future payment for utility services.

Judge Walsh makes it clear that this order is without prejudice
to the rights of any utility companies to request additional
assurance of future payment from the Debtors under these
Determination Procedures:

  (a) Within 10 business days after the entry of the order, the
      Debtors shall mail a copy of the order to the utility
      companies listed in the motion.

  (b) A utility company that wishes to seek additional assurance
      of future payment from the Debtors shall make a written
      request for such additional assurance within 30 days after
      service of the order to:

       (i) the Debtors, c/o BURLINGTON NDUSTRIES, INC., 3330
           West Friendly Avenue, Greensboro, North Carolina
           27410 (Attn: John D. Englar, Esq.); and

      (ii) counsel to the Debtors, JONES DAY REAVIS & POGUE,
           North Point, 901 lakeside Avenue, Cleveland, Ohio,
           44114-1190 (Attn: Richard M. Cieri, Esq. and Michelle
           Morgan Harner, Esq.) and RICHARDS, LAYTON & FINGER,
           P.A., One Rodney Square, Wilmington Delaware 19899
           (Attn: Daniel J. DeFranceschi, Esq.).

  (c) Without further order of the Court, the Debtors may enter
      into agreements granting to the utility companies that
      have submitted requests any additional assurance of future
      payment that the Debtors, in their sole discretion,
      determine is reasonable.

  (d) If a utility company timely requests additional assurance
      of future performance that the Debtors believe is
      unreasonable, then, upon the request of the utility
      company and after good faith negotiations by the parties,
      the Debtors promptly shall:

       (i) file a motion seeking a determination of adequate
           assurance of future payment with respect to the
           requesting utility company, and

      (ii) schedule the determination motion to be heard by the
           Court at the next regularly-scheduled omnibus hearing
           in these cases that is at least 20 days after the
           filing of the determination motion.

  (e) Any utility company that does not timely request
      additional assurance as set forth above automatically
      shall be deemed to have adequate assurance of payment for
      future utility services.

  (f) If a determination motion is filed or a determination
      hearing is scheduled, any utility company requesting
      additional assurance shall be deemed to have adequate
      assurance of payment for future utility services without
      the need for payment of additional deposits or other
      security until the Court enters an order in connection
      with such determination motion or determination hearing.
      (Burlington Bankruptcy News, Issue No. 3; Bankruptcy
      Creditors' Service, Inc., 609/392-0900)   


CII TECHNOLOGIES: Ratings on CreditWatch Positive After Merger
--------------------------------------------------------------
Standard & Poor's placed CII Technologies Inc.'s double-'B'-
minus senior secured bank loan, single-'B'-plus corporate credit
and single-'B'-minus subordinated note ratings on Credit Watch
with positive implications, following the definitive merger
agreement in which a subsidiary of Tyco International Ltd. will
acquire the parent CII Technologies Holdings Inc., and its
subsidiaries for approximately $310 million in cash.

Asheville, North Carolina-based CII supplies high performance
relays, contactors, general purpose relays, electromagnetic
interference power line filters, power entry products, and
filtered telecommunications connectors used in a wide range of
digital electronic equipment in the aerospace, defense, and
telecommunications industries.

At the same time, Standard & Poor's affirmed its ratings on Tyco
International Ltd. (A/Stable/A-1) and its industrial
subsidiaries. This acquisition further expands the product
portfolio of Tyco's electronics unit, particularly in the
industrial relay market, where CII has solid technology
capabilities and complementary product lines that should bolster
Tyco's market position.


CHIQUITA BRANDS: Will Be Paying Prepetition Employee Obligations
----------------------------------------------------------------
Chiquita Brands International, Inc., and its debtor-affiliates
employs 169 full-time employees and 25 part-time employees.  At
this critical time, the Debtor wants to maintain employee
morale.

                    Unpaid Compensation

James H.M. Sprayregen, Esq., at Kirkland & Ellis, in Chicago,
Illinois, tells the Court that approximately $126,000 in accrued
pre-petition wages, salaries, commissions, and other
compensation (excluding vacation pay, severance pay, deferred
compensation, and incentive compensation) earned prior to the
Petition Date was unpaid as of the Petition Date.  Mr.
Sprayregen explains that these items of Unpaid Compensation were
due and owing on the Petition Date because, inter alia:

  (a) the chapter 11 petition was filed during the Debtor's
      regular and customary salary and hourly wage payroll
      periods; and

  (b) employees have not yet been paid all their salaries and
      wages for services performed prior to the Petition Date on
      behalf of the Debtor.

Mr. Sprayregen makes it clear that the request to pay Unpaid
Compensation relates solely to employees who are employed as of
the Petition Date.  Given the de minimis amounts, the Debtor
also seeks authority to pay employees owed more than $4,650.  
The Debtor estimates that approximately 6 employees will have
claims in excess of $4,650.  The total aggregate amount of such
claims greater than $4,650 is estimated to be approximately
$24,000, Mr. Sprayregen informs Judge Aug.

             Bonus, Retention & Severance Programs

In addition, the Debtor also wants to continue its bonus,
retention, and severance programs.

Under the Bonus and Retention Programs, Mr. Sprayregen notes,
the Debtor has Management Incentive Program that provides for
annual bonus payments to all employees at the manager level and
above, based on the performance achievements of the individuals
as well as the Debtor.  The Debtor expects to pay approximately
$3,400,000 million in January 2002 to eligible employees under
this program.  For non-management employees, Mr. Sprayregen
notes, the Debtor also has the full discretion to give them
annual bonus payments for exemplary performance.  According to
Mr. Sprayregen, these bonus payments are made on a one-time
annual basis and will be paid in January 2002.  "Even though
non-management awards are discretionary, prior practice suggests
that approximately 75 employees will receive award payments,
totaling approximately $250,000," Mr. Sprayregen says.

The Debtor also maintains a Severance Pay Plan for its salaried
employees whose employment is terminated involuntarily other
than for cause, Mr. Sprayregen tells the Court.

In addition, the Debtor wants to continue paying its employees
the appropriate accrued vacation pay, jury duty pay, and
military reserve duty pay, as they are applicable.

                      Health Benefits

The Debtor provides medical, dental, vision and prescription
drug insurance for all its employees primarily through a variety
of self-insured and premium-based insurance plans, according to
Mr. Sprayregen.

The estimated annual Health Benefits cost to the Debtor is
$3,800,000.  Less than one-third of which - or $1,100,000 - is
for coverage of the Debtor's employees.

Mr. Sprayregen explains that employees and their families rely
on the Debtor to provide this continuing health care.  "Any
failure to pay these amounts would be injurious to employee
welfare, morale and expectations," Mr. Sprayregen asserts.

Under self-insured Health Plans, Mr. Sprayregen explains, the
employee submits claims to a claims administrator.  According to
Mr. Sprayregen, the claims administrator notifies the Debtor of
the claims, and upon receipt of a wire transfer of funds from
the Debtor, pays the health provider for the services rendered
to the employee.  "There is a lag time on processing claims, and
there is also usually a gap between when the employee receives
the medical care and submits the claim," Mr. Sprayregen notes.
As of the Petition Date, Mr. Sprayregen informs Judge Aug, the
Pipeline Medical Claims is estimated to reach $600,000, of which
$150,000 is for the claims of the Debtor's employees.

Furthermore, Mr. Sprayregen relates, the Debtor also maintains
premium-based Health Benefits for some employees.  "The total
monthly average cost of these Health Benefits is approximately
$175,000, of which $50,000 is for coverage of the Debtor's
employees," Mr. Sprayregen notes.  Of the $175,000, Mr.
Sprayregen tells the Court, employees contribute between 4% and
17% of the monthly premium to cover the employee and his or her
family.  The Debtor pays the remaining premiums for employees.
According to Mr. Sprayregen, the Debtor usually pays the monthly
premiums in the middle of the month they are due.

                       Insurance Benefits

The Debtor provides employees with premium-based group term life
insurance.  Mr. Sprayregen relates that the Debtor pays
approximately $25,000 per month for the group term life
insurance coverage for all employees, of which approximately
$7,000 is for coverage of the Debtor's employees.

In addition, the Debtor also provides employees with business
travel accident insurance with a death benefit based upon four
times an average of the employee's last two years' bonus plus
the current year's salary with the maximum benefit of $1,000,000
and scheduled dismemberment benefits.  Mr. Sprayregen informs
Judge Aug that the Debtor pays approximately $50,000 annually
for the business travel insurance for all employees, of which
approximately $10,000 is for coverage of the Debtor's employees.
The annual premium has been paid for 2001.

Furthermore, the Debtors provide short and long-term disability
benefits, as well as premium-based long-term disability
insurance for employees.  The Debtor pays approximately $12,000
per month for the long-term disability insurance for all
employees, of which $4,000 is for coverage of the Debtor's
employees.

Moreover, Mr. Sprayregen tells the Court, the Debtor maintains
premium-based fiduciary liability insurance for its fiduciaries,
including the Debtor's executives.  According to Mr. Sprayregen,
the approximate annual premium for the fiduciary liability
insurance is $45,000.

Chiquita Brands Inc. purchases foreign voluntary workers'
compensation insurance that provides a supplemental coverage to
the compulsory state or government workers' compensation
coverage requirements for employees of the Debtor and Non-
Debtors, Mr. Sprayregen relates.  The annual cost of this policy
is approximately $48,000, of which approximately $30,000 is
attributable to Debtor employees.

                Workers' Compensation Obligations

The Debtor maintains a qualified, self-insured workers'
compensation status in the state of Ohio, which covers all but
one of the Debtor's employees.

Mr. Sprayregen notes that employees of the Debtor are also
eligible for the Employee Assistance Program, a counseling
service program.  This benefit is funded by the Debtor at an
approximate quarterly cost of $6,000, of which approximately
$1,500 is for the coverage of Debtor employees, Mr. Sprayregen
states.

The Debtor also offers employees the opportunity to use Flexible
Spending Accounts to use pre-tax dollars toward the payment of
medical or dependent care expenses.  As of the Petition Date,
Mr. Sprayregen explains, the Debtor generally estimates that the
Pipeline FSA Claims aggregate approximately $90,000, of which
$40,000 is for the coverage of Debtor employees. The Debtor also
pays a monthly administrative fee of approximately $200, Mr.
Sprayregen adds.

The Debtor offers employees the ability to purchase Long Term
Care Insurance and Group Universal Life Insurance at full cost
through payroll deduction. According to Mr. Sprayregen, the
approximate monthly premiums for the Long Term Care Insurance
are $500, of which approximately $100 is for the coverage of
Debtor employees. The approximate monthly premium for the Group
Universal Life Insurance is $2,000, of which $400 is for the
coverage of Debtor employees.

Mr. Sprayregen says the Debtor deducts from employees' earnings:

    (a) payroll taxes;

    (b) employee contributions for Health Benefits and dependent
        care spending accounts;

    (c) employee contributions to employee life insurance, group
        universal insurance, long term care and long term
        disability insurance, and personal accident insurance;

    (d) employee contributions to 401(k) plans and 401(k) loan
        repayments;

    (e) legally ordered deductions, such as child support;

    (f) voluntary contributions to United Way, Chiquita Relief
        Fund-We Care, and the Fine Arts Fund; and

    (g) employee parking and public transportation costs.

Then, Mr. Sprayregen relates, the Debtor forwards amounts equal
to the Employee Deductions from its general operating accounts
to appropriate third-party recipients.  Prior to the Petition
Date, Mr. Sprayregen says, un-remitted Employee Deductions
totaled approximately $50,000. Due to the commencement of this
chapter 11 case, Mr. Sprayregen notes, these funds were deducted
from employee earnings but may not have been forwarded to
appropriate third-party recipients.  By this Motion, the Debtor
seeks also authority to forward the Employee Deductions to the
appropriate parties.

                       Retirement Benefits

(1) Deferred Compensation Plan

Mr. Sprayregen tells the Court that the Debtor maintains a non-
qualified, top hat deferred compensation plan for certain highly
compensated employees, former employees, and directors of the
Debtor and its subsidiaries.  Mr. Sprayregen notes that the
Debtor's current liability as of September 30, 2001 is
approximately $10,000,000, which includes $1,700,000 for former
employees.

(2) Capital Accumulation Plan

The Debtor provides a non-qualified, top hat Capital
Accumulation Plan for certain highly compensated employees, Mr.
Sprayregen adds. This plan was effective January 1, 2000 and
replaced the deferred compensation plan, according to Mr.
Sprayregen.

Participant deferrals and all other company contributions are
funded in a rabbi trust, Mr. Sprayregen continues. Participant
deferrals and the basic match are credited to the participant's
account and contributed to the rabbi trust on a biweekly basis,
Mr. Sprayregen relates.  The Debtor pays a quarterly fee of
approximately $2,200 for trustee services, of which
approximately $550 is attributable to Debtor employees, as well
as record keeping fees of approximately $30,000 at year-end, of
which approximately $7,200 is attributable to Debtor employees,
plus a quarterly fee of approximately $3,000, of which
approximately $720 is attributable to Debtor employees. To the
extent an employee has amounts that have been contributed to the
rabbi trust, Mr. Sprayregen says, the Debtor pays a participant
whose employment is terminated such amounts and then seeks
reimbursement from the rabbi trust.

(3) Other Retirement Benefits

In addition, Mr. Sprayregen informs Judge Aug, the Debtor offers
its current employees and the Non-Debtor Employees the
opportunity to participate in a 401(k) Savings & Investment
Plan.  "The estimated amount of the discretionary match for 2001
is approximately $2,100,000, of which $875,000 is the match for
Debtor employees," Mr. Sprayregen relates.

Certain retired and former employees are also provided
supplemental pension payments, Mr. Sprayregen says.  The Debtor
pays $15,000 monthly in payments to these retired and former
employees.

Furthermore, Mr. Sprayregen states, the Debtor also provides
medical and prescription benefits to certain of its retired
employees and Non-Debtor Employees who were hired prior to April
1, 1993 and completed at least 10 years of service after
reaching age 45.  The Debtor pays approximately $21,000 monthly
in claims.

On top of that, Mr. Sprayregen says, the Debtor also provides
life insurance benefits to certain retired employees who were
hired prior to April 1, 1993 and completed at least 10 years of
service after reaching age 45.  The Debtor pays approximately
$27,000 monthly in premiums.

The Debtor believes that performing its obligations under these
retirement benefits is essential to maintaining employee morale.
"Any disruption in benefits payable under such programs will
call into question the Debtor's commitment to its employees and
retirees," Mr. Sprayregen contends.

Finally, the Debtor requests that any applicable bank or
financial institution be authorized and directed to receive,
process, honor and pay all drafts presented for payment and to
honor all funds transfer requests made by the Debtor related to
Employee Obligations, whether such drafts were presented or
funds transfer requests were submitted prior to or after the
Petition Date.  The Debtor asserts that these drafts are drawn
on identifiable payroll and disbursement accounts.  
"Accordingly, earnings other than those for Employee Obligations
and Reimbursable Expenses will not be honored inadvertently,"
Mr. Sprayregen notes.

                         *     *     *

Accordingly, the Debtor sought and obtained a Court order:

  (i) authorizing, but not directing, the Debtor to pay certain
      pre-petition:

      (a) wages, salaries, and other compensation, and
      (b) employee medical, disability, life, savings, workers'
          compensation, and similar benefits,

(ii) authorizing, but not directing, the debtor to maintain:

      (a) insured and self-insured programs, and
      (b) earning withholding programs; and

(iii) authorizing and directing any applicable bank and or
      financial institution to receive process, honor, and pay
      all earnings presented for payment and to honor all funds
      transfer requests made by the Debtor relating to the
      foregoing. (Chiquita Bankruptcy News, Issue No. 2;
      Bankruptcy Creditors' Service, Inc., 609/392-0900)   


COMDISCO INC: Reschedules Release of Year-End Results to Dec. 21
----------------------------------------------------------------
Comdisco, Inc. (NYSE:CDO) announced that its fourth quarter and
year end financial results, previously scheduled to be announced
on Thursday, December 13, 2001, will now be released on Friday,
December 21, 2001. Comdisco said that its earnings release is
being rescheduled because of the current activity related to its
Chapter 11 Bankruptcy filing, including the ongoing sales
evaluation process for some or all of its Leasing businesses.

Comdisco, Inc. and 50 domestic U.S. subsidiaries filed voluntary
petitions for relief under Chapter 11 of the U.S. Bankruptcy
Code in the U.S. Bankruptcy Court for the Northern District of
Illinois on July 16, 2001. The filing allows the company to
provide for an orderly sale of some of its businesses, while
resolving short-term liquidity issues and enabling the company
to reorganize on a sound financial basis to support its
continuing businesses.

Comdisco's operations located outside of the United States were
not included in the chapter 11 reorganization cases. All of
Comdisco's businesses, including those that filed for chapter
11, are conducting normal operations. Comdisco is continuing to
pursue other strategic alternatives to create value for its
stakeholders, including the potential sale of all or some of its
leasing businesses, as well as the restructuring of its Ventures
group. The company has targeted emergence from chapter 11 during
the first half of 2002.

Comdisco -- http://www.comdisco.com -- provides technology  
services worldwide to help its customers maximize technology
functionality and predictability, while freeing them from the
complexity of managing their technology. The Rosemont, (IL)
company offers leasing and other financial management services
to key vertical industries, including semiconductor
manufacturing and electronic assembly, healthcare,
telecommunications, pharmaceutical and biotechnology. Through
its Ventures division, Comdisco provides equipment leasing and
other financing and services to venture capital-backed
companies.


COVAD: Set to Exit Bankruptcy by Dec. 20 After Plan Confirmation
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
the reorganization plan for Covad Communications Group, Inc.
(OTCBB:COVD) and Covad anticipates that it will exit from its
pre-negotiated bankruptcy around December 20, 2001, the expected
date the plan becomes effective.

The reorganization plan completes the pre-negotiated bondholder
agreement that eliminates $1.4 billion of high-yield and
convertible bondholder debt for approximately $257 million, or
$0.19 on the dollar of face amount or accreted bond value, plus
approximately $13 million in previously restricted cash and 15
percent ownership of the company. Shareholders will retain
approximately 80 percent of the company.

All classes entitled to vote did so in favor of the plan by the
margins required for acceptance by each class. The record date
for voting for the plan was October 25, 2001. The record date
for determining note holders entitled to distributions under the
plan will be today.

The confirmation of the reorganization plan also satisfies one
of the conditions for the closing of Covad's recently announced
funding agreements with SBC Communications Inc. (NYSE:SBC). The
agreements, valued at $150 million, are expected to add to
Covad's existing available cash, to provide the funding Covad
expects it will need to finance growth to cash flow positive
operations targeted for the second half of 2003.

"We believe we are the first of the emerging telecommunications
companies to exit successfully from bankruptcy with existing
shareholders maintaining a majority interest," said Charles E.
Hoffman, Covad president and CEO. "Covad's reorganization of its
parent company was designed solely to eliminate debt and we will
soon be fully funded. We will continue to control our costs
while providing a growing suite of services. These are huge
steps in our revitalization program and will put us in a great
financial position for 2002."

Prior to today's approval of the reorganization plan, Covad
reached a settlement agreement with General Electric Capital
Corp., a unit of General Electric (GE); Heller Financial Inc.
(wholly owned by GE Capital Corp.) and Vernon Computer Leasing
Inc., which had filed objections to the plan.

Covad Communications Group, Inc.'s operating companies, which
provide DSL services to customers, were not included in the
court-supervised proceeding and continued to operate in the
ordinary course of business without any court imposed
restrictions throughout the approximately four month process.
Covad Communications Group, Inc. filed for reorganization on
August 15, 2001.

Covad is the leading national broadband service provider of
high-speed Internet and network access utilizing Digital
Subscriber Line (DSL) technology. It offers DSL, IP and dial-up
services through Internet Service Providers, telecommunications
carriers, enterprises, affinity groups and PC OEMs to small and
medium-sized businesses and home users. Covad services are
currently available across the United States in 94 of the top
Metropolitan Statistical Areas (MSAs). Covad's network currently
covers more than 40 million homes and business and reaches
approximately 40 to 45 percent of all US homes and businesses.
Corporate headquarters is located at 3420 Central Expressway,
Santa Clara, CA 95051. Telephone: 1-888-GO-COVAD. Web Site:
http://www.covad.com


DILLARD'S INC: S&P Lowers Ratings On Continued Weak Performance
---------------------------------------------------------------
Standard & Poor's lowered its ratings on Dillard's Inc. and
related entities. All ratings were removed from CreditWatch,
where they had been placed August 3, 2001. The outlook is
negative.

The downgrade is based on continued poor performance at the
company's department stores in 2001. Moreover, Standard & Poor's
believes that management faces significant challenges in turning
operations around, given a weakening economy that has
exacerbated an already poor retail environment. Therefore, no
significant improvement in credit measures is likely for the
foreseeable future.

The ratings on Dillard's and its units reflect management's
inability to improve business fundamentals and credit protection
measures for this major department store player. Operating
margins have been declining since the early 1990s (7.1% in 2000
versus 11.5% in 1995) and there has been a commensurate fall in
return on capital to only 6.2% for 2000. Because this critical
measure of profitability has fallen well below the investment-
grade standard and leverage increased sharply, Dillard's
interest coverage and cash flow protection measures have
weakened substantially. The company reported a steep drop in
earnings for all of 2000, and earnings for the first nine months
of 2001 were also down substantially compared with the year
before. Along with the company's own operating problems, a
weakening U.S. economy (exacerbated by the events of September
11) and intense competition were major contributing factors.

Total sales were off 2.6% for the first nine months of 2001,
with declines in virtually all merchandise categories, and
operating income fell 20% to $580 million, from $720 million the
year before. Comparable-store sales receded 5% through October,
and there is little to suggest that business fundamentals will
improve for the all-important holiday season. Moreover, because
Dillard's business continues to struggle, especially at a time
when the U.S. economy is falling into a recession after the
Sept. 11 terrorist attacks and subsequent events, it is becoming
increasingly unlikely that management will be able to restore
the company's performance to a significantly more profitable
track for the foreseeable future.

                      Outlook: Negative

Standard & Poor's anticipates that it could be a while before
results from the company's plan to improve operations are
meaningful. Moreover, because important challenges may remain
ahead, especially in 2002, Dillard's rating could be in jeopardy
if the company's operating performance does not improve.

       Ratings Lowered and Removed From CreditWatch

     Dillard's Inc.                           TO      FROM
       Long-term corporate credit rating      BB+     BBB-  
       Senior unsecured debt                  BB+     BBB-
       Bank loan                              BB+     BBB-
       Preliminary senior unsecured debt      BB+     BBB-

     Dillard Investment Co. Inc.
       Corporate credit rating                BB+     BBB-
       Senior unsecured debt                  BB+     BBB-

     Dillard's Capital Trust I
       Preferred stock
        (Guaranteed by Dillard's Inc.)        B+      BB

     Mercantile Stores Co. Inc.
       Corporate credit rating                BB+     BBB-
       Senior unsecured debt                  BB+     BBB-


EASYLINK SERVICES: Zesiger Capital Reports 13.4% Equity Interest
----------------------------------------------------------------
The New Jersey Investment Adviser firm of Zesiger Capital Group
LLC reports beneficial ownership of 13.4%, or 8,053,414 shares
of common stock, of Easylink Services Corporation. Of such
shares the Group holds sole voting power over the total cited,
and sole dispositive power over 804,499 such shares.

EasyLink Services delivers e-mail and more. The company manages
outsourced e-mail systems for businesses and provides other
electronic message delivery services, including telex and
desktop fax. It also provides virus protection and help desk
services. The former Mail.com has expanded by buying messaging
provider Swift Telecommunications, which had acquired AT&T's
EasyLink Services messaging unit. EasyLink Services has sold its
e-mail advertising business and its consumer e-mail business,
which served some 5 million active users, and it plans to sell
its domain name development business, WORLD.com. Chairman Gerald
Gorman controls nearly 60% of the company's voting power.

Late November, EasyLink Services successfully completed
financing arrangements in the aggregate amount of approximately
$10 million, and, as a result, has successfully closed its
previously announced $63 million debt restructuring.


EDISON INT'L: SoCal Unit Facing Third Suit Filed by CalEnergy
-------------------------------------------------------------
For the third time this year, CalEnergy geothermal power plants
have filed suit in Imperial County Superior Court seeking to
force Southern California Edison to meet the terms of agreements
it signed to purchase electricity from the plants, near the
Salton Sea.

The suit seeks "capacity bonus payments," one of three
calculations specified in signed contracts under which Edison
pays CalEnergy for electricity.  The suit notes that Edison has
declined to make the payments for October, which came due in
November.

Vince Signorotti of CalEnergy said, "We wish we could avoid the
courts, but Edison continues to leave us no other option to
enforce our agreements. Two previous lawsuits this year have
helped to force Edison to act responsibly, but Edison just can't
get it right.  As in the first two instances, Edison is ignoring
clear contractual agreements it has signed with us."

In February, the CalEnergy plants filed suit charging Edison
with breaching its contract for failing to pay for power they
had delivered since November 2000.  The CalEnergy plants won a
court order the following month releasing them from their
contract with Edison.  They began selling their geothermal
energy on the open market.

In June, Edison reached an agreement with CalEnergy and other
alternative energy generators to resolve past disputes, provide
payment of past-due amounts and establish a fair rate going
forward, once steps were taken to make Edison creditworthy.  As
part of the agreement, Edison expressly agreed that deliveries
were deemed to continue uninterrupted regardless of the prior
suspension.  With that agreement, CalEnergy resumed selling its
generation to Edison.

In October, Edison reached an agreement with the California
Public Utility Commission that returned Edison to
creditworthiness.  Edison, however, refused to honor the June
agreement.

On Nov. 14, CalEnergy returned to court, charging that Edison
breached the June agreement.  CalEnergy dropped that lawsuit
last week after Edison signed agreements to pay the past-due
amount and begin paying alternative energy generators according
to its June agreement.

However, immediately after CalEnergy entered into the new
payment agreement, Edison stated its intent to withhold the
capacity bonus payments for the balance of the year.  The
CalEnergy plants returned to court after Edison once again
refused to honor the June agreement.

"To help Edison avoid bankruptcy and return the company to
creditworthiness, CalEnergy has exercised patience beyond any
reasonable expectation," Signorotti said.  "But Edison continues
to renege on paying what it plainly owes under the contracts it
has agreed to. It seems that court action is the only way we can
get Edison's attention and fair treatment."


ENRON CORP: Intends to Honor Prepetition Employee Obligations
-------------------------------------------------------------
Enron Corporation, and its debtor-affiliates authority, in their
discretion and in the exercise of their business judgment, to:

  (a) honor and pay in full the accrued and unpaid compensation
      obligations, benefit obligations, vacation obligations,
      reimbursement obligations, administrative obligations,
      independent contractor obligations and severance
      obligations due and owing to the Debtors' employees, and

  (b) continue their plans, practices, programs and policies
      with respect to the foregoing as such plans, practices,
      programs and policies were in effect as of the Petition
      Date.

Furthermore, the Debtors request that the Court authorize and
direct Citibank Delaware, at which the Debtors maintain their
payroll and disbursement accounts, to honor and pay all pre-
petition checks issued by and fund transfer requests from the
Debtors with respect to the employee obligations that were not
honored or paid as of the Petition Date.

Finally, the Debtors also seek authority, in their discretion
and in the exercise of their business judgment, to issue new
post-petition checks, or effect new fund transfer requests, with
respect to the employee obligations to replace any pre-petition
checks or fund transfer requests that may be dishonored or
denied.

A. Compensation Obligations

  As of the Petition Date, the Debtors employed approximately
  25,000 full- and part-time employees worldwide.  According to
  Martin J. Bienenstock, Esq., at Weil, Gotshal & Manges LLP, in
  New York, Enron Corp. processes payroll for the Enron
  affiliates in an aggregate amount of approximately
  $2,300,000,000 on an annual basis.

  Further, Mr. Bienenstock relates, the law requires the Debtors
  to withhold from their employees' pay all applicable federal,
  state and local income taxes, state unemployment taxes, and
  social security and Medicare taxes.  In addition, Mr.
  Bienenstock states, the Debtors are required to match from
  their own funds the social security and Medicare taxes, and
  pay additional amounts for state and federal unemployment
  insurance, and to remit all these payroll taxes to the taxing
  authorities.  As of November 30, 2001, Mr. Bienenstock
  reports, the Debtors owe approximately $1,200,000 in payroll
  taxes.

  The Debtors estimate that, as of the Petition Date, their
  obligations for the immediately preceding payroll periods in
  respect of accrued and unpaid wages, salaries and payroll
  taxes are approximately $4,600,000.

B. Retirement Benefit Obligations

  The Debtors sponsor and maintain 2 tax-qualified
  noncontributory defined benefit pension plans that provide
  retirement income benefits for substantially all of the
  Debtors' employees.  In addition to funding costs associated
  with the pension plans, Mr. Bienenstock says, the Debtors are
  obligated to pay premiums in respect of an insurance programs
  administered by the Pension Benefit Guaranty Corporation,
  which insures accrued benefits under the pension plan.

  Also, the Debtors sponsor and maintain tax-qualified defined
  contribution plans, which provide eligible employees with the
  opportunity to make pre-tax salary deferral contributions.
  Mr. Bienenstock explains that amounts contributed to the
  savings plans are later distributed to eligible participants
  and their beneficiaries upon retirement or other separation
  from service.  Mr. Bienenstock notes there is a brief delay
  between:

    (a) the deduction of contributions from the employees'
        paychecks, and

    (b) the disbursement of these funds to the trustee for the
        savings plans.

  On November 30, 2001, Mr. Bienenstock recounts, the Debtors
  paid approximately $4,100,000 into a trust account to fund the
  savings plan obligations.

C. Health and Welfare Benefit Obligations

  The Debtors collectively sponsor several health and welfare
  benefit plans to provide benefits to the employees, including
  medical and health, life insurance, death, dental, vision
  acre, short- and long-term disability, retiree medical and
  dental, and supplemental unemployment.

  According to Mr. Bienenstock, the Debtors insure and pay out
  of general corporate assets the benefits provided under the
  health benefit plans.  The Debtors estimate that aggregate
  annual expenditures under the health benefit plans for active
  employees are approximately $55,000,000.

  Mr. Bienenstock advises the Court of the difficulty in
  determining the accrued obligations under the health benefit
  plans outstanding at any particular time.  The Debtors
  estimate that, as of the Petition Date, the obligations to be
  paid to or on behalf of employees under the health benefit
  plans aggregate approximately $17,000,000.

  Additionally, Mr. Bienenstock notes, the Debtors make
  deductions from employee wages for flexible spending plans,
  charitable donations, and wage garnishments, as requested or
  required by law.  As of November 30, 2001, the Debtors
  withheld approximately $382,000 from salaried employees and as
  of November 29, 2001, the Debtors withheld approximately
  $32,000 from bi-weekly employees.

D. Vacation Obligations

  Under the Debtors' vacation policy, Mr. Bienenstock continues,
  employees are generally eligible for 3 to 5 weeks of vacation
  per year -- based on years of service -- and are generally
  eligible to carry a certain portion of unused vacation into
  the next year.  Unused vacation is generally paid to employees
  only upon layoff or death, Mr. Bienenstock explains.

  As of the Petition Date, the Debtors estimate that employees
  were owed approximately $15,500,000 in pre-petition accrued
  but unpaid vacation benefits.

E. Reimbursement Obligations

  The Debtors customarily reimburse their employees who incur a
  variety of business expenses in the ordinary course of
  performing their duties on behalf of the Debtors.  The Debtors
  also reimburse employees for certain tuition expenses under an
  educational assistance policy, Mr. Bienenstock adds.
  Furthermore, Mr. Bienenstock reports, the Debtors customarily
  pay certain obligations directly to third parties on behalf of
  their employees to the extent that such obligations were
  business related or incurred under or in connection with the
  Debtors' various benefit plans, programs and policies.

  Because the employees and affected third parties do not always
  submit claims for reimbursement immediately, Mr. Bienenstock
  explains, the Debtors find it difficult to determine the
  amounts outstanding at any particular time.  The Debtors
  estimate that, as of the Petition Date, their pre-petition
  reimbursement obligations total around $16,000,000.

F. Administrative Obligations

  The Debtors ordinarily utilize the services of certain
  professionals and consultants to facilitate the administration
  and maintenance of the Debtors' books and records.  According
  to Mr. Bienenstock, the Debtors estimate total annual
  administrative obligations at $45,000,000.

  Prior to the Petition Date, Mr. Bienenstock relates, the
  Debtors advanced $1,100,000 for then-outstanding
  administrative obligations.  Due to the commencement of these
  chapter 11 cases, Mr. Bienenstock alerts the Court to the
  possibility that such payments have not been made.

G. Independent Contractors

  To supplement their workforces, the Debtors utilize the
  services of independent contractors who provide necessary
  services relating to the operation of their businesses.  Mr.
  Bienenstock tells Judge Gonzales that these contractors
  include individuals from temporary service agencies and
  persons acting as freelance consultants providing services
  with respect to general management and various professional
  disciplines, such as engineering and environmental consulting.

  It would be difficult, time-consuming and expensive to replace
  these independent contractors due to their specialized skills,
  training and knowledge of the Debtors' operations and
  facilities, Mr. Bienenstock contends.

  The Debtors estimate that, as of the Petition date, their
  total accrued and unpaid pre-petition obligations to the
  independent contractors are approximately $2,000,000.

H. Severance Amount

  In order to facilitate a reduction in force, the Debtors plan
  to provide severance benefits of $4,500 per severed employee.
  Mr. Bienenstock notes that this amount will serve as a credit
  against:

    (1) accrued and unpaid wages,

    (2) amounts due under the severance plan the Debtors have in
        place at the time of termination of employment, and

    (3) obligations of the Debtors pursuant to the Worker
        Adjustment Retraining Notification Act.

I. Bank Accounts

  The Debtors urge Judge Gonzales to authorize and direct
  Citibank Delaware to honor checks or fund transfers relating
  to outstanding employee obligations, regardless of whether
  they were issued pre-petition or post-petition.  In addition,
  the Debtors seek authority to issue new post-petition checks
  or fund transfer requests on account of the employee
  obligations to replace any pre-petition checks or fund
  transfer requests that may have been dishonored or denied.

  Mr. Bienenstock explains that the Debtors utilize a
  centralized payroll function through which most of the payroll
  obligations of the Debtors' domestic affiliates are
  administered.  Many of the Debtors' domestic affiliates have
  not filed petitions for reorganization relief under chapter
  11, Mr. Bienenstock notes.  If Citibank Delaware is not
  directed to honor the Debtors' pre-petition checks and fund
  transfer requests, compensation and benefit obligations of
  these non-debtor entities may fail to be honored as well, Mr.
  Bienenstock points out.

  The payroll account specifically includes: 39109855.

Very few employees -- approximately 5, in fact -- are owed more
than the $4,650 maximum on account of compensation obligations
and benefit obligations as of the Petition Date, Mr. Bienenstock
tells the Court.  Accordingly, Mr. Bienenstock claims,
substantially all of the Debtors' employee obligations
constitute priority claims.  However, to the extent any employee
is owed in excess of $4,650, Mr. Bienenstock insists that
payment of such amounts is necessary and appropriate and is
authorized pursuant to the "necessity of payment" doctrine.

"It is essential to the continued operation of the Debtors'
businesses and the maximization of value to creditors that the
services of the Debtors' employees be retained and the morale of
such employees be maintained," Mr. Bienenstock contends.
Consequently, Mr. Bienenstock says, it is critical that the
Debtors have the authority to continue their ordinary course of
business personnel policies, programs and procedures that were
in effect prior to the commencement of these chapter 11 cases.

The Debtors have on deposit sufficient funds in the payroll
account to enable Citibank Delaware to pay in full the employee
obligations drawn on such account, Mr. Bienenstock tells Judge
Gonzales.  Accordingly, Mr. Bienenstock maintains, Citibank
Delaware will not be prejudiced by the entry of an order
directing it to honor checks or fund transfer requests paying
such amounts. (Enron Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


ENRON CORP: Utility-Related Hearing Rescheduled to December 20
--------------------------------------------------------------
Enron Corp. (NYSE: ENE) announced that a hearing to provide
adequate assurance to utility companies providing services to
Enron and its debtor subsidiaries, which was originally
scheduled for Friday, Dec. 14, 2001, has been rescheduled for
11:00 a.m. (EST) on Thursday, Dec. 20, 2001.  The rescheduled
hearing will be held before Honorable Arthur J. Gonzalez, United
States Bankruptcy Judge, in Room 523 of the United States
Bankruptcy Court for the Southern District of New York, One
Bowling Green, New York, New York.  In connection with the
rescheduled hearing, Enron has extended the objection deadline
to 4:00 p.m. (EST) Tuesday, Dec. 18, 2001.

Enron markets electricity and natural gas, delivers energy and
other physical commodities, and provides financial and risk
management services to customers around the world.  Enron's
Internet address is http://www.enron.com

The stock is traded under the ticker symbol "ENE".


ENRON CORP: AEP Buys Contracts & Hires International Coal Team
--------------------------------------------------------------
AEP Energy Services Ltd., the London-based European wholesale
energy marketing and trading subsidiary of American Electric
Power (NYSE: AEP), has acquired existing contracts and hired key
staff from the Enron international coal team.

The addition of the London-based coal marketing organization
provides AEP Energy Services' European wholesale group with an
established capability for procurement, transportation and
delivery of coal across geographic regions. The transaction
includes existing marketing offices and staff in the UK,
Germany, Australia and China, and existing contracts in the
United Kingdom, Germany, Australia, Colombia, South Africa,
Indonesia, Poland, Russia and Venezuela.

AEP Energy Services purchased the contracts today from
PricewaterhouseCoopers, the administrators of Enron Capital &
Trade Resources Ltd. bankruptcy proceedings in the UK.  AEP
Energy Services also hired 22 former Enron employees, the
leaders from that very successful coal marketing organization.

"We are aggressively building our wholesale energy capabilities
in the United Kingdom and Europe, using our very successful U.S.
wholesale structure as a model," said Hank Jones, senior vice
president with AEP Energy Services and head of AEP's wholesale
business in Europe.  "Although [Wednes]day's deal pertains to
people and contracts instead of a major capital expenditure for
assets, it represents a major milestone in our growth.

"This deal provides us with immediate expertise in global coal
logistics, trading and marketing, positioning AEP Energy
Services to be a leader in coal markets in the UK and Europe,"
Jones said.  "It also provides us with the ability to capture
locational arbitrage, allowing us to benefit from differences in
coal prices in various parts of the world."

American Electric Power's growth strategy focuses on key aspects
of the wholesale fuel and power generation value chain --
generation and related energy assets, wholesale marketing and
trading of energy commodities, fuel procurement and
transportation and related activities.  AEP Energy Services'
London office markets and trades power, natural gas and coal in
the UK and Europe.

"I'm pleased that our team is joining AEP and will continue
playing a central role in the transformation of coal markets,"
said Stuart Staley, head of Enron's coal team who will assume a
similar position with AEP Energy Services.  "We will continue
our work to bring price transparency and greater liquidity and
efficiency to the coal marketplace."

American Electric Power is a multinational energy company based
in Columbus, Ohio. AEP owns and operates more than 38,000
megawatts of generating capacity, making it America's largest
generator of electricity. The company is also a leading
wholesale energy marketer and trader, ranking second in North
America in wholesale electricity and wholesale natural gas
volume.  AEP provides retail electricity to more than 7 million
customers worldwide and has holdings in the U.S. and select
international markets. Wholly owned subsidiaries are involved in
power engineering and construction services, energy management
and telecommunications.


ESYLVAN INC: Will Need Fresh Financing After Dec. 31 to Continue
----------------------------------------------------------------
eSylvan Inc. incurred net losses of $2.8 and $3.2 million for
the three-month periods ended September 30, 2001 and 2000,
respectively.

Revenues for the three-month period ended September 30, 2001
were $0.1 million. The Company commenced delivering services to
the public in the Mid-Atlantic region and started recognizing
revenues in October 2000. Accordingly, the Company had no
revenues for the three-month period ended September 30, 2000.

The Company incurred net losses of $10.1 and $5.6 million for
the nine-month periods ended September 30, 2001 2000,
respectively.

Revenues for the nine-month period ended September 30, 2001 were
$0.2 million. The Company had no revenues during the nine-month
period ended September 30, 2000 as it did not commence
delivering services until October 2000.

The Company expects to incur significant negative cash flow from
operations for the foreseeable future. Although the Company
believes that its line of credit with Sylvan Ventures, the $5.4
million additional funding commitment from Sylvan Ventures, and
the closings on the sale of Series A convertible preferred stock
to Sylvan Ventures will satisfy its cash requirements through
December 31, 2001, the Company does not expect that the
current resources will be sufficient to support its growth and
operations until the Company is profitable. The Company cannot
guarantee that it will be able to raise additional funds, or, if
it can, that it will be able to do so on terms that it deems
acceptable. In particular, potential investors may be unwilling
to invest in the Company due to Sylvan Venture's voting control
over it. The Company is unable to predict the amount of
additional financing it will need after December 31, 2001
because such amount is substantially dependent upon the success
of its business plan and marketing and advertising efforts and
factors outside its control such as unexpected technical
difficulties with its on-line tutoring infrastructure and other
factors. The Company's failure to raise the funds necessary to
establish and grow the business would have a material adverse
effect on the business and the Company's ability to generate and
grow revenues. If the Company raises funds through the issuance
of equity, equity-related or debt securities, these securities
will likely have rights, preferences or privileges senior to
those of the rights of its existing common stock, and its
current common stock stockholders may experience dilution.

The Company's current and projected operating losses and limited
committed funding raise substantial doubt about its ability to
continue as a going concern.


EXODUS COMMS: Intends to Pay Prepetition Mechanics' Lien Claims
---------------------------------------------------------------
Exodus Communications, Inc., and its debtor-affiliates request
approval of procedures to pay pre-petition mechanics' lien
claims, not to exceed $18,000,000 in the aggregate, upon five
business days' notice to the United States Trustee, counsel to
the Committee and counsel to the Debtors' post-petition lenders.
In the event that any of the notice parties objects in writing
to the Debtors' proposed payment, Mr. the Debtors will not make
the proposed payment absent further order of the Court.

Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP in
Wilmington, Delaware, relates that the Debtors operate 44 IDCs
in the United States and abroad, most of which are leased to the
Debtors by third party landlords. The Debtors employed various
contractors to build-out most of the IDCs over the last three
years, including some very recent construction. In addition, a
number of facilities, many of which are critical to the Debtors'
operations, are currently unfinished and require additional
construction work to complete. Mr. Chehi states that Debtors
also employ contractors to honor warranties and guaranties
provided in connection with their work and to perform
maintenance required for smooth operation of the IDCs.

Although the Debtors generally have made timely payment to their
contractors, Mr. Chehi submits that as of the Petition Date a
substantial number of the contractors had not been paid for
certain pre-petition goods and services provided to the Debtors.
Because of the unpaid bills, contractors have filed mechanics'
liens totaling approximately $39,000,000 and it is expected that
additional mechanics' liens will be filed. The Debtors believe
that the vast majority of liens have been filed against IDCs
that the Debtors intend to use in their go-forward operations.

Mr. Chehi claims that virtually all of the Debtors' leases
require that the Debtors timely discharge mechanics' liens.
Without authorization to pay the liens, the Debtors believe that
their business will be adversely affected because:

A. Without payment of valid liens, contractors may refuse to
   honor warranties and guaranties with respect to prior work
   which could have devastating consequences to the Debtors.

B. Because the Debtors seek authority to pay only valid liens
   under leases the Debtors intend to assume, the Debtors will
   avoid costly cure payments involving the payment of
   interest and attorneys' fees allowable under state law that
   will continue to accrue pending payment. Moreover, the
   proposed procedures will in all likelihood result in the
   payment of liens at significant discounts from the asserted
   amounts.

C. The Debtors also will avoid costs associated with litigating
   motions filed by landlords to compel performance of lease
   obligations, motions filed by landlords to lift the
   automatic stay and ancillary mechanics' lien actions that
   the Debtors expect to be commenced absent entry of the
   relief requested.

Mr. Chehi tells the Court that the continuing and efficient
operation of the Debtors' IDCs, and the timely completion of
unfinished IDCs, are dependent on the continued performance of
the contractors which, in turn, requires the orderly and prompt
payment of the mechanics' liens. The Debtors believe that
implementation of the procedures is in the best interests of the
Debtors' estates because such procedures will:

A. substantially reduce otherwise secured claims on a basis
   advantageous to the estates,

B. avoid costly stay litigation and mechanics' lien litigation,

C. insure that contractors timely complete critical IDC
   projects,

D. enhance the Debtors' go-forward relationship with key vendors

E. avoid paying costly cure amounts. (Exodus Bankruptcy News,
   Issue No. 10; Bankruptcy Creditors' Service, Inc., 609/392-
   0900)


FEDERAL-MOGUL: Selling Signal-Stat Business for At Least $23.3MM
----------------------------------------------------------------
In March 2001, Federal-Mogul Corporation's management engaged
Ernst & Young Corporate Finance LLC as an advisor in connection
with the divestiture of the Lighting Group, either in total or
in a series of smaller transactions involving individual
business units or portions thereof. The Debtors, with the
assistance of Ernst & Young, prepared a Confidential Memorandum
to assist prospective purchasers in considering their interest
in the Lighting Group and/or its individual business units and
which describes the Debtors' Lighting Group and each of the
individual business units therein.

The Debtors and Ernst & Young compiled a list of prospective
purchasers to be contacted, compiled based on the Debtors'
familiarity with the entities involved in this industry, both
domestically and internationally, Ernst & Young's familiarity
with entities throughout the world who were interested in
businesses of this type, and entities who had contacted the
Debtors and expressed an interest in the entire Lighting Group
or one or more Lighting Group business units. The Buyer List
contained the names of more than one hundred parties that were
believed to be potential purchasers of either the entire
Lighting Group or one or more Lighting Group business units.

During May, June, July and to a lesser extent, August 2001, the
parties on the Buyer List were contacted to determine each
party's interest in evaluating a potential acquisition of the
entire Lighting Group or one or more Lighting Group business
units and the 33 parties that expressed such an interest were
provided the Confidential Memorandum. The Debtors requested that
each recipient of the Confidential Memorandum submit a
non-binding expression of interest for either the entire
Lighting Group or one or more Lighting Group business units. The
Debtors received expressions of interest from a number of
parties, including four parties expressing an interest in
Signal-Stat Lighting Products, a division of the Lighting Group.
Two of these parties expressed an interest in the entire
Lighting Group and two of these patties expressed an interest
solely in Signal-Stat.

In August and September 2001, the Debtors invited the four
parties expressing an interest in Signal-Stat to conduct
preliminary due diligence, which included the opportunity to
meet with management, attend a management presentation regarding
both the Lighting Group and Signal-Stat, and access a due
diligence data room. Three of the four parties accepted the
Debtors' invitation to conduct preliminary due diligence. At the
conclusion of this preliminary due diligence, the Debtors
requested that each of the three parties submit a more detailed
proposal for the entire Lighting Group and/or Signal-Stat.

In late September, 2001, the Debtors received responses from two
parties, one party interested in the entire Lighting Group and
one party, Truck-Lite Company, Inc., interested solely in
Signal-Stat. The party interested in the entire Lighting Group
sent a brief letter expressing continued interest in the entire
Lighting Group as well as various other businesses of the
Debtors, but did not submit a detailed proposal or letter of
intent, contingent upon on the Debtors' agreement to sell all of
the businesses, including one that had not been offered for
sale. After a thorough review of the proposals, the Debtors
determined that Truck-Lite's detailed proposal, which related
solely to Signal-Stat, was superior to any other proposal which
the Debtors had received. The Debtors, therefore, elected to
enter into negotiations with Truck-Lite for the sale of Signal-
Stat which led to a letter of intent dated November 8, 2001.

Thus, the Debtors request that the Court enter an order,
substantially in the form attached hereto, establishing the
competitive bidding procedures and break-up fee arrangements;
approving the Letter of Intent; and granting such other and
further relief as the Court deems just and proper.

The salient terms of the Letter of Intent are:

A. Truck-Lite has agreed to purchase substantially all of the
   operating assets of the Signal-Stat business unit for
   $23,000,000 payable by wire transfer at the closing of the
   transaction, subject to a dollar-for-dollar adjustment
   based on the amount by which the Working Capital on the
   closing date is greater or less than $12,500,000.

B. The Debtors' assets excluded from the transaction that will
   remain part of the Debtors' estates are all cash on hand as
   of the closing date, accounts receivable, leasehold
   improvements, fixtures, and land and buildings.

C. Truck-Lite has agreed that, upon the earlier of the execution
   of a definitive agreement that will consummate the
   transaction contemplated by the Letter of Intent or
   December 17, 2001, and provided that the Letter of Intent
   has not been terminated, it will deliver a refundable
   purchase price deposit of $200,000 to the client trust
   account of the Debtors' counsel.

D. If the Letter of Intent is terminated by the Debtors'
   acceptance of a Qualifying Competing Proposal, or if there
   is an Overbid and Truck-Lite is not the successful bidder,
   and Truck-Lite is not then in material breach of the Letter
   of Intent or the Definitive Agreement, the $200,000 deposit
   and any accrued interest thereon shall be returned to
   Truck-Lite, and Truck-Lite shall have an allowed
   administrative expense claim against the Debtors' estates
   in the amount of $150,000 payable from the proceeds of the
   successful sale immediately after the Closing.

In order to maximize the likelihood of competitive bidding that
will result in the highest and best offer, the Debtors required
that Truck-Lite subject its proposal to these competitive
bidding procedures for which the Debtors seek Court approval:

A. Requirements for Overbid - Any entity may submit an overbid,
   so long as such Overbid shall be made in writing, shall be
   accompanied by evidence that such proposal constitutes a
   Qualifying Competing Proposal, and shall be delivered to
   counsel for the Debtors, Truck-Lite, and Creditors'
   Committees, the pre-petition lenders and the post-petition
   lenders, and filed with the Bankruptcy Court no later than
   10 days prior to the Sale Hearing.

B. Requirements for Qualified Competing Proposals - A
   "Qualifying Competing Proposal" must:

     a. provide for a total purchase price that is not less than
         $23,300,000, all of which is payable in cash at the
         Closing;

     b. contain other terms and conditions that are at least as
        favorable to the Debtors' estates as those set forth
        in the Definitive Agreement;

     c. contain a mark-up of the Definitive Agreement showing
        any proposed changes therefrom if such Definitive
        Agreement is lodged with the Bankruptcy Court at least
        15 days before the Sale Hearing;

     d. be made by an entity or entities providing evidence that
        they are financially qualified to consummate the
        Competing Proposal on a timely basis; and

     e. be accompanied by a deposit of $200,000 in immediately
        available fiends, to be held by Debtors' counsel in an
        interest bearing account pending the outcome of the
        Sale Hearing.

     Such deposit plus any accrued interest will not be
     considered the property of Debtors' estates and will be
     either applied to the purchase price if the bidder is the
     successful bidder pursuant to the order of the Bankruptcy
     Court at the Sale Hearing or refunded to the bidder if such
     bidder is not the Successful Bidder.

C. Written Recommendations - Within 3 Court Days prior to the
   Sale Hearing, the Debtors shall file recommendations
   regarding any Overbids received in accordance with the
   preceding subparagraphs with the Bankruptcy Court and
   deliver copies of such recommendations to Truck-Lite and to
   all entities that have made an Overbid, the Creditors'
   Committees, the pre-petition lenders, and the post-petition
   lenders. The recommendations shall address, the  aggregate
   consideration offered, the bidder's ability to timely close
   the sale transaction, and an analysis of which offer is
   most favorable to the Debtors' estates. Any other party in
   interest, including the Creditors' Committees and the
   lenders, shall also be permitted to file such
   recommendations.

D. Lodging of Definitive Agreement - A copy of the Definitive
   Agreement shall be lodged with the Bankruptcy Court prior
   to the Sale Hearing, and the Debtors shall promptly deliver
   notice of the lodging of the Definitive Agreement on all
   entities that have made an Overbid.

E. Counterbidding Procedure. If there is one or more Overbid(s),
   Track-Lite shall be permitted to make a counterbid at or
   before the Sale Hearing. Such counterbid shall be an
   increase of at least $100,000 over the highest Overbid,
   payable in cash at the closing. Any entity that has made an
   Overbid shall thereafter be permitted to make one or more
   counterbids, provided that:

       a. each such counterbid shall provide for purchase price
            consideration that is $100,000 greater than the
            highest previous counterbid, and

       b. the entire increase in the purchase price
          consideration shall be in cash payable at the closing.

       At the Sale Hearing, the Debtors, the Creditors'
       Committees, the pre-petition lenders, and the post-
       petition lenders, and other interested parties may make
       recommendations to the Court concerning the bids.

F. Additional Procedures. In the event the Bankruptcy Court
   approves a bid by a party other than Truck-Lite, at the
   hearing in which the Bankruptcy Court grants such approval,
   the parties shall present recommendations and the Court
   shall establish procedures and deadlines governing the
   execution of the sale agreement, obtaining an order
   approving the sale agreement, the prompt closing of the
   sale transaction, which shall occur no later than 10 days
   after the Sale Hearing and if Truck-Lite elects, provision
   for a "back-up" sale agreement between the Debtors and
   Truck-Lite should the non-Truck-Lite bid or the sale
   agreement relating thereto not be approved by the
   Bankruptcy Court or if the resultant sale transaction not
   be consummated, with reasonable time periods. If the Sale
   Hearing occurs as scheduled on January 11, 2002, then the
   last day to submit all bids, including Overbids, is
   December 31, 2001.

The Debtors also seek Court approval of the Letter of Intent's
bidding procedures, including the provision for a $150,000
break-up fee should the Debtors accept a Qualifying Competing
Proposal, in order for these specific provisions to be binding
on all parties and the estates, and because Court approval of
the bidding procedures was one of the conditions to obtaining
the commitment evidenced by the Letter of Intent.

Laura Davis Jones, Esq., at Pachulski Stang Ziehl Young & Jones
P.C., in Wilmington, Delaware, states that the biding procedures
are designed to strike a balance between inviting competing bids
and enabling the Debtors to close a sale within a reasonable
time frame. The bidding procedures are fair, reasonable, and
necessary to promote the highest and best sale price, without
imposing undue obstacles to the competitive bid process, and
will encourage bidding and increase the likelihood that the
Debtors will receive the best offer for the Signal-Stat
operating assets.

The Debtors believe that the bidding procedures should be
approved because:

A. pre-approval of the bidding procedures will provide
   interested parties with notice of the specific bidding
   procedures authorized by this Court, including the minimum
   bid requirement and the opportunity to competitively bid for
   the assets.

B. pre-approval of the rules of the proposed sale will ensure
   fair comparability between competing bids.

C. by permitting all entities previously solicited to continue
   doing their due diligence and to make Qualifying Competing
   Proposals and Overbids, the bidding procedures create a
   sale process that should maximize the value of the assets
   to the estate and its creditors.

Ms. Jones tells the Court that the minimum initial overbidding
increment of $300,000 is also reasonable as overbid requirements
are normally established relative to the value of the assets at
issue. The value of Signal-Stat's operating assets, according to
Truck-Lite's offer, is approximately $23,000,000 and thus, the
$300,000 initial overbid increment represents approximately 1.3%
of Truck-Lite's offer.

Ms. Jones contend that the $150,000 break-up fee provides
enormous benefit to and is necessary because the break-up fee is
nominal in relation to the aggregate consideration offered by
Track-Lite approximately  of 1 %. Further, because the Letter of
Intent does not separately provide for payment of any of
Truck-Lite's expenses should a Qualifying Competing Proposal be
accepted, the break-up fee also serves to encourage Truck-Lite
to stay involved in the bidding and maintain its level of due
diligence for the benefit of all other interested parties, with
the knowledge that it will not be wholly out-of-pocket for its
expenses, without which it is unlikely that Truck-Lite would
continue with the bidding process.

As is clear from the summary of the Debtors' marketing efforts,
Ms. Jones relates that Signal-Stat has been offered for sale for
the better part of two years and Truck-Lite represents the best
of the offers. However, Truck-Lite would not be as willing to
undertake the immense amount of work required to prepare a
successful bid and conduct due diligence without any repayment
for expenses or for its role a "stalking horse." Accordingly,
Ms. Jones believes that the assurance of the break-up fee has
"promoted more competitive bidding" because it induced a bid
from Truck-Lite that might otherwise not have been made. The
combination of the low break-up fee and low overbid amount will
create an environment open to competitive bidding, since
interested parties will first be encouraged to bid by only
having to exceed the $23,000,000 offer by $300,000, and also
will not fear that the value of Signal-Stat will be reduced
immediately upon consummation of sale because of the need to pay
a large break-up fee. Thus, Ms. Jones concludes that the break-
up fee will encourage higher bids. (Federal-Mogul Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


FRIEDE GOLDMAN: Plan Filing Exclusive Period Extended to Feb. 11
----------------------------------------------------------------
Friede Goldman Halter, Inc. (OTCBB:FGHLQ) announced that the
U.S. Bankruptcy Court has extended the exclusivity period for
filing of a reorganization plan until February 11, 2002. The
primary secured lending group and the Official Unsecured
Creditors' Committee unanimously supported this extension.

The Restructuring Committee of the Board of Directors has been
evaluating expressions of interest received from potential
strategic and financial parties. These interested parties will
conduct final due diligence in the next 30 days, and the
Restructuring Committee expects to make its recommendation prior
to February 1, 2002. Both the Restructuring Committee and the
Official Unsecured Creditors' Committee are evaluating all
possible alternatives for the Company.

James Decker, Director, Houlihan Lokey Howard & Zukin, the
exclusive investment advisor to FGH, commented, "Discussions are
being conducted with numerous interested parties who are keenly
interested in the business units of FGH. We expect spirited
competition in the next 30 days as the process narrows down to
specific contract negotiations."

Jack Stone, Principal, Glass & Associates, Inc. and Chief
Restructuring Advisor to FGH, commented, "The business units of
FGH continue to realize improvement as the management team
focuses on the profitability of the business and proposals to
customers. The support of the customers, suppliers and employees
has been remarkable and reflects credit on the actions of
management."

T. Jay Collins, Chairman of the Restructuring Committee of the
Board, commented, "All feasible solutions are being evaluated
with the objective of maximizing the value of FGH."

Friede Goldman Halter designs and manufactures equipment for the
maritime and offshore energy industries. Its operating units are
Friede Goldman Offshore (construction, upgrade, and repair of
drilling units, mobile production units, and offshore
construction equipment), Halter Marine (construction of ocean-
going vessels for commercial and governmental markets), FGH
Engineered Products Group (design and manufacture of cranes,
winches, mooring systems, and marine deck equipment), and Friede
& Goldman Ltd. (naval architecture and marine engineering).


GENERAL DATACOM: Asks Court to Extend Schedule Filing Deadline
--------------------------------------------------------------
General DataComm Industries, Inc. asks the U.S. Bankruptcy Court
for the District of Delaware to extend the time within which it
must file comprehensive schedules of assets and liabilities,
statements of financial affairs, lists of equity security-
holders, and lists of executory contracts and unexpired leases.  
The Debtors ask for an extension through December 21, 2001.

The Debtors said that collection of the information necessary to
complete the Schedules and Statements requires substantial time
and effort on their part and their employees. In view of the
amount of work entailed in the project, the Debtors will not be
able to complete the Schedules properly and accurately within
the thirty-day deadline. Moreover, the Debtors have been under
increased pressure over the past couple of weeks to produce
information and stabilize their businesses due to the passing of
the Debtors' Chief Executive Officer.

General DataComm Industries, Inc. is a worldwide provider of
wide area networking and telecommunications products and
services. The Company filed for Chapter 11 protection on
November 2, 2001 in the U.S. Bankruptcy Court for the District
of Delaware. James L. Patton, Esq., Joel A. Walte, Esq. and
Michael R. Nestor, Esq. represent the Debtors in their
restructuring effort. When the Company filed for protection from
its creditors, it listed $64,000,000 in assets and $94,000,000
in debts.


GENESIS WORLDWIDE: KPS & Pegasus Complete $20MM+ Asset Purchase
---------------------------------------------------------------
Genesis Worldwide II, Inc., a company created by Pegasus
Partners II. L.P. and KPS Special Situations Fund, L.P.,
announced today it has completed the acquisition of the
businesses of Genesis Worldwide.  Genesis II purchased the
domestic businesses and assets of Genesis Worldwide, Inc. and
its subsidiaries pursuant to a section 363 sale of assets in the
Chapter 11 bankruptcy proceeding of Genesis Worldwide.

Genesis Worldwide Inc. -- http://www.gen-world.com-- engineers  
and manufactures high-quality metal coil processing and roll
coating and electrostatic oiling equipment in the United States
through its Herr-Voss, Stamco and GenCoat business units. The
Company also provides mill roll reconditioning, texturing and
grinding services in addition to its rebuild, repair and spare
parts business.

Genesis Worldwide II purchased the assets and operations of
Genesis Worldwide Inc. for approximately $20.5 million and the
assumption of certain liabilities.  Under the terms of the sale
agreement, Pegasus and KPS (through an affiliate, Blue Coil LLC)
paid cash, issued a secured subordinated note and equity
interests and assumed certain liabilities of Genesis Worldwide
Inc.

Genesis II also announced that it had hired Mr. Walter Stasik to
serve as the CEO of the Company.  Mr. Stasik has over 30 years
of capital equipment experience, most recently with Voest-Alpine
Industries in Pittsburgh, where he was the Vice President for
Special Projects. Mr. Stasik previously served as the Chief
Operating Officer of the Danieli Corporation from 1993 to 2000.

Mr. Stasik said, "We are extremely excited to complete the
Pegasus/KPS investment transaction.  Genesis has a strong core
business, superior technology, a very large installed machine
base and a tremendously loyal customer base in the metals
processing industry.  The transaction provides Genesis II with
the financial resources and flexibility necessary to advance our
position as the premier provider of equipment, service, parts
and rebuilds to our large customer base."

Pegasus Partners II, L.P. is managed by Pegasus Capital
Advisors, L.P., a Greenwich, Connecticut based private equity
investment firm with approximately $800 million under
management.  Pegasus makes control and structured investments as
both debt and equity securities in companies that are at points
of financial or operational stress or significant change.

KPS Special Situations Fund, L.P. (http://www.kpsfund.com) is a  
$210 million private equity fund focused on constructive
investing in turnarounds, restructurings, bankruptcies and other
special situations. KPS seeks to realize significant capital
appreciation by making controlling equity investments in
companies engaged in manufacturing, transportation and service
industries challenged by the need to effect immediate change.
This transaction will be the third bankruptcy-related
acquisition completed by KPS in two years.

Very important to the success of the transaction were new
collective bargaining agreements with locals of the United
Steelworkers of America (USWA) and the International Association
of Machinists and Aerospace Workers (IAM). These new collective
bargaining agreements constitute an essential component of the
Company's turnaround plan.


GLENOIT CORP: Court Extends Removal Period Until February 6
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approves
Glenoit Corporation's motion to extend time within which they
may file notices of removal or related proceedings in which the
Debtors are party to actions currently pending in the various
state and federal court. The deadline is enlarged through
February 6, 2002.

Headquartered in New York City, Glenoit Corporation is a
domestic manufacturer of small rugs, knit pile fabrics and an
importer and manufacturer of home products such as quilts,
comforters, shams, shower curtains, table linens, pillows and
pillowcases with operations in North Carolina, Ohio, California
and Canada. The Company filed for Chapter 11 protection on
August 8, 2000 in the US Bankruptcy Court for the District of
Delaware. Joel A. Waite, Esq. at Young, Conaway, Stargatt &
Taylor represents the Debtors in their restructuring efforts.


HAYES LEMMERZ: Gets Waver of Investment & Deposit Requirements
--------------------------------------------------------------
Hayes Lemmerz International, Inc., and its debtor-affiliates
submit a motion for interim and final orders:

A. to invest and deposit funds in a safe and prudent manner in
   accordance with their existing investment guidelines,
   notwithstanding that such guidelines may not strictly
   comply in all respects with the approved investment
   practices set forth in section 345 of the Bankruptcy Code,

B. for the applicable institutions to accept and hold or invest
   such funds in accordance with the Debtors' pre-petition
   practices.

Kenneth A. Hiltz, the Debtors' Chief Finance Officer and Chief
Restructuring Officer, tells the Court that prior to the
commencement of their chapter 11 cases, the Debtors maintained,
in the ordinary course of business, more than 75 bank accounts
located in various states throughout the United States through
which Hayes managed cash receipts and disbursements for the
Debtors' entire domestic corporate enterprise. The Debtors
believe that all of the Bank Accounts, whether located within or
outside the District of Delaware, are in financially stable
banking institutions with Federal Deposit insurance or other
appropriate government-guaranteed deposit protection insurance.

Mr. Hiltz relates that the Debtors maintain three investment
vehicles for the purpose of investing excess cash in the
Debtors' concentration account at the end of a business day: a
securities repurchase account; the Scudder 403 Money Market
Fund; and the Dreyfus Government Cash Management Fund. When
excess cash remains in the Debtors' concentration account at the
end of a business day, the funds are either wired to the Scudder
Account or to the securities repurchase account for overnight
investment, or are automatically swept into the Dreyfus Account.
Mr. Hiltz explains that the Debtors may choose which account to
use in order to maximize their investment return. In addition,
the Debtors maintain a second Scudder 403 Money Market Fund
account for the purpose of segregating the remaining proceeds of
the $300,000,000 11.78% senior unsecured notes issue due 2006.
Mr. Hiltz says that the 7-day average yield of the Scudder 403
Money Market Fund is 2.39%, and it is a relatively low-risk
investment while the Dreyfus Account is a low-risk investment as
it is guaranteed by the U.S. Government with an average 7-day
yield of 2.50%. The securities repurchase account invests the
Debtors' funds in United States government securities and is
therefore a similarly safe investment. The remainder of the Bank
Accounts contains zero or minimal operating balances and are not
invested overnight.

The Debtors believe that their use of the Bank Accounts,
including the Investment Accounts, substantially conforms with
the approved investment practices identified in section 345 of
the Bankruptcy Code, and that all deposits and investments into
the Investment Accounts and their other Bank Accounts are safe,
prudent and designed to yield the maximum reasonable net return
on the funds invested. Nonetheless, out of an abundance of
caution, to the extent that such deposits and investments do not
conform to the approved investment practices, the Debtors seek
to waive such requirements. The Debtors believe that sufficient
cause exists to allow the Debtors to deviate from the approved
investment practices established by the Bankruptcy Code,
especially in light of the importance of maximizing the return
on funds that the Debtors may be investing at any given time,
and the safety of the investment vehicle used by the Debtors to
invest idle cash.

Mr. Hiltz informs the Court that the majority of the Debtors'
Bank Accounts are maintained as minimum or zero balance accounts
that are not invested and therefore, the investment and deposit
restrictions can be waived with respect to these accounts as not
applicable. With respect to the Investment Accounts, the Debtors
submit that the safety of the investment vehicles utilized by
the Debtors to invest the idle funds in this account constitutes
sufficient cause to allow the Debtors to deviate from the
approved investment practices established by the Bankruptcy
Code.

                             * * *

Finding good and sufficient cause for the relief requested,
Judge Walrath grants the motion on an interim basis. (Hayes
Lemmerz Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


HEXCEL CORP: S&P Drops Ratings on Weak operating Performance
------------------------------------------------------------
Standard & Poor's lowered its ratings on Hexcel Corp. and
maintained them on CreditWatch with negative implications, where
they were placed on September 21, 2001.

The downgrade reflects prospects for continued weak operating
performance and heightened liquidity concerns. A sharp downturn
in commercial aerospace demand following the September 11
terrorist attacks and a softer economy could lead to net losses
in the intermediate term, following net losses for the nine
months ended September 30, 2001. The initial impact on Hexcel
will be evident later this quarter and in the early part of
2002, as airplane manufacturers start to adjust inventories
ahead of reduced production rates.  The adverse effect on the
firm should be partly mitigated by a recently announced
restructuring program aimed at further cutting costs.

As a result of subpar financial performance and high debt
levels, credit protection measures are very thin. Moreover,
liquidity is tight, with limited cash balances and availability
under the senior secured credit facility, and sizable interest
payments due in early 2002 on rated subordinated notes. Although
Hexcel was in compliance with the financial covenants (as
amended in May 2001) under its credit facility in the third
quarter ended September 30, the company will have to approach
the banks this (fourth) quarter to request further modifications
to the covenants. Ratings will likely be affirmed and removed
from CreditWatch, if the firm is successful in its negotiations
with the banks.

Hexcel is the world's largest manufacturer of advanced
structural materials, with considerable diversity of revenues
and end use applications. An expected fairly prolonged decline
in the commercial aerospace market, accounting for about 50% of
the company's revenues, and continued weakness in the electronic
materials business will overshadow positive trends in some of
the firm's smaller markets, such as military aircraft and wind
energy.

Standard & Poor's will monitor ongoing developments to assess
the impact on credit quality.

          Ratings Lowered and Remaining on CreditWatch
                   with Negative Implications

                                          To    FROM
     Hexcel Corp.
       Corporate credit rating             B     BB-
       Senior secured (bank loan) debt     B     BB-
       Subordinated debt                   CCC+  B


HIGHLANDS INSURANCE: Falls Below NYSE Continued Listing Criteria
----------------------------------------------------------------
Trading of common stock of Highlands Insurance Group, Inc.
(formerly NYSE: HIC), a property and casualty insurer, was
suspended Tuesday by the New York Stock Exchange pending an
application to the Securities and Exchange Commission to delist
the common stock.  The share price of the Company's common stock
and certain other related criteria have fallen below the New
York Stock Exchange's listing criteria.  The Company anticipates
that common stock will be traded on the over the counter market
beginning next week under the symbol HIGP.


HOLLYWOOD ENTERTAINMENT: S&P Junks Ratings on $300 of Securities
----------------------------------------------------------------
Standard & Poor's assigned its preliminary triple-'C' senior
unsecured and its preliminary double-'C' subordinated ratings to
Hollywood Entertainment Corp.'s $300 million shelf-registered
debt securities, filed under Rule 415. At the same time,
Standard & Poor's placed its triple-'C' corporate credit
and senior secured ratings and double-'C' subordinated debt
rating on the company on CreditWatch with positive implications.

The CreditWatch placement follows Monday's announcement that
Hollywood Entertainment has received a fully underwritten
commitment for a new bank credit facility. The commitment is
subject to various conditions, including the sale by the company
of at least $100 million of its common stock and the application
of the proceeds of such sale, together with the initial
borrowings under the new bank credit facility, to the repayment
of all borrowings under the company's existing bank credit
facility that matures March 31, 2002. If completed, the
refinancing would modestly improve Hollywood Entertainment's
financial flexibility and reduce its near-term debt service
requirements.

Standard & Poor's will fully review Hollywood's financing and
operation strategies and the improvement in financial
flexibility from the new credit agreement with the company's
management.


J.F.K. Acquisition: Case Summary & 20 Largest Creditors
-------------------------------------------------------
Debtor: J.F.K. Acquisition Group
        aka 5241 East Corp.
        aka Best Western Carlton House  
        254 Park Avenue South
        New York, NY 10010

Bankruptcy Case No.: 01-16157-alg

Chapter 11 Petition Date: December 10, 2001

Court: Southern District of New York (Manhattan)

Judge: Allan L. Gropper

Debtor's Counsel: Scott S. Markowitz
                  Todtman, Nachamie, Spizz & Johns, P.C.
                  425 Park Avenue
                  New York, NY 10022
                  Tel: 212-754-9400
                  Fax: 212-754-6262

Estimated Assets: $10 million to $50 million

Estimated Debts: $10 million to $50 million

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Hilton Inc.                 trade debt            $170,539

Golden Touch Transportation trade debt            $144,541

Wienick Sanders             trade debt             $66,283

Maple Hall                  trade debt             $65,714

NY Hotel Trades Council     trade debt             $62,287
Benefits

Harran Transportation       trade debt             $42,375

Cahner's Travel Group       trade debt             $28,637

Presstige Cleaners          trade debt             $19,872

Bayshore Laundry LLC        trade debt             $19,513

Top Shelf Meats             __________             $18,903

Robert Elevator Co., Inc.   trade debt             $17,320

Guest Supply, Inc.          trade debt             $16,273

RSI, Inc.                   trade debt             $13,953

Keyspan                     trade debt              $9,166

Produce Express             trade debt              $8,902

Interior Foliage Design     trade debt              $7,225

On Command Video            trade debt              $7,766

NY Hotel Trades             trade debt              $6,143
Council Dues  

D.C.I.                      trade debt              $4,167

Cebco Check Services        trade debt              $3,445


LTV CORP: Republic Steel Retirees Back Committee Appointment
------------------------------------------------------------
The Republic Steel Salaried Retirees Association, represented by
Charles T. Riehl and James D. Wilson of the Cleveland firm of
Walter & Haverfield LLP, tells Judge Bodoh it supports the
Motion of The LTV Corporation, and its debtor-affiliates for the
appointment of a committee to represent the Debtors' salaried
retirees.  The RSSRA is an association of some 8,000 retirees
and their spouses.  Its members have an immediate and compelling
interest in actions that are taken in connection with employee
benefits.  During the first LTV bankruptcy, RSSRA was an active,
ongoing participant in the proceedings, and also participated in
the process by which the Retiree Benefits Bankruptcy Protection
Act of 1988 was drafted, debated and enacted as Bankruptcy Code
Section 1114 which governs payment of insurance benefits to
retirees, and establishes a process of temporary protection of
retirees' rights, good-faith negotiations, mechanisms for
proposals by the debtors for modifications to retirees'
benefits, and the possibility of court interventions and
ultimate decision by way of confirmation process.

In RSSRA's estimation, it is not only appropriate, but required
at this stage of the proceedings, that the Debtor seek
appointment of a committee of non-union retirees since actions
are contemplated presently in connection with retiree benefits.

The RSSRA reminds Judge Bodoh that, by agreement and Order in
the first LTV bankruptcy, the Debtor LTV Steel currently has in
place for the benefit of salaried retirees the LTV Managed Care
Plan which provides for contributions by LTV on a per-retiree
basis of designated monies to the Plan.  The Plan establishes
the basis for the mutual rights and obligations of the Debtor
and the salaried retirees, and provides the vehicle by which
medical benefits are distributed to thousands of non-union,
salaried LTV retirees. (LTV Bankruptcy News, Issue No. 20;
Bankruptcy Creditors' Service, Inc., 609/392-00900)


LERNOUT & HAUSPIE: ScanSoft Consummates Purchase of S&L Business
----------------------------------------------------------------
ScanSoft, Inc. (Nasdaq: SSFT), a leading supplier of imaging,
speech and language solutions, announced that it has closed the
acquisition of substantially all the operating and technology
assets of the Speech and Language Technologies business of
Lernout & Hauspie (L&H).

As previously disclosed, consideration for the transaction
comprises $10 million in cash, a $3.5 million note and 7.4
million shares of ScanSoft stock. The U.S. Bankruptcy Court for
the District of Delaware approved the transaction on December
11, 2001.

"We are delighted to close the transaction and have begun
transitioning L&H employees and assets in earnest," said Paul
Ricci, ScanSoft's chairman and CEO.  "While much work lies
ahead, we are especially encouraged by the positive response
we've seen from our customers, partners, resellers and
employees."

Through this acquisition, ScanSoft expects to strengthen its
business within the following areas:

     -- Employees -- ScanSoft believes L&H employees offer a
passion and dedication to its business that fits nicely with
ScanSoft's mission to be the global leader in its field.  The
Company expects to offer employment to more than 200 L&H
employees in the U.S. and abroad.

     -- Products and Technologies -- ScanSoft acquires premier
speech and language products and technologies in rapidly growing
markets.  This robust group of assets includes the industry's
foremost text-to-speech technology, the popular Dragon speech
recognition software and technology aimed at the rapidly growing
telecommunications, automotive and mobile device markets.  The
technology and intellectual property associated with these
assets is widely considered the finest in the industry and
represents a strategic growth opportunity for our Company.

     -- Distribution and Channels -- ScanSoft and L&H share
nearly identical distribution channels, encompassing a global
network of software resellers, key OEM partners, Web-based
operations and retail outlets. The transaction provides an
opportunity to bring additional efficiencies to sales
operations, extend OEM relationships, strengthen VAR programs
and expand the Company's presence in Asian markets.

     -- Customers -- L&H adds a prestigious list of customers to
the ScanSoft business.  Organizations using these technologies
comprise some of the world's leading technology and
telecommunications companies including Alcatel SA, AOL Time
Warner, British Telecom, Cisco Systems, Delphi Automotive,
Deutsche Telecom, Fujitsu Ltd., Microsoft Corporation and Sony
Corp.

ScanSoft, Inc. (Nasdaq: SSFT) is the leading supplier of
imaging, speech and language solutions that are used to automate
a wide range of manual processes -- saving time, increasing
worker productivity and improving customer service.  For more
information regarding ScanSoft products and technologies, please
visit http://www.scansoft.com


NAVIGATOR GAS: S&P Withdraws Ratings for Lack of Timely Info.
-------------------------------------------------------------
Standard & Poor's withdrew its ratings on Navigator Gas
Transport PLC. The withdrawal results from a lack of timely and
sufficient information provided to Standard & Poor's by the
company required to maintain the ratings.

At the time of withdrawal, the ratings reflected expectations
that Navigator Gas Transport PLC's majority indirect owner will
eventually conclude discussions with the bondholders regarding
restructuring options amid weak market conditions for
petrochemical gas transport. Arctic Gas S.A. is an 80%-owner of
the common equity of Navigator Gas Holdings PLC, which in turn
owns Navigator Gas Transport. The remaining 20% of Navigator
Holdings has been owned by Tractebel Gas Engineering (an
indirect subsidiary of Tractebel S.A.) and MarLink
Schiffahrtskontor GmbH (MarLink), a German ship management
company that had been responsible for technical and commercial
management of the Navigator vessels. These contracts are
understood to have been terminated.

Delivery of five gas carriers constructed at the Jiangnan
Shipyard in Shanghai, China, was completed in 2000. As a result
of weak rates and volumes, cash flow from operations has been
insufficient to fully pay interest on the rated bonds since late
2000 without the use of the debt service reserve. The debt
service reserve is an irrevocable letter of credit from Credit
Suisse First Boston equal to two years of debt service.

                       Ratings Withdrawn
                                               Ratings

     Navigator Gas Transport PLC           To           From
        Corporate credit rating            NR           CCC-
        1st priority ship mortgage notes   NR           CCC-
        2nd priority ship mortgage notes   NR           CC


NAVISITE INC: EBITDA Losses in Q1 2002 Jump to $35.4 Million
------------------------------------------------------------
Company Significantly Strengthens Financial Position Through
Funding and Lease Restructuring

NaviSite, Inc. (Nasdaq: NAVI), a leading managed services
provider, and a majority-owned operating company of CMGI, Inc.
(Nasdaq: CMGI), announced its first fiscal quarter results for
the quarter ended October 31, 2001.

Revenue for the fiscal 2002 first quarter was $19.3 million,
exceeding guidance by 7%, compared to revenue of $22.8 million
for the fiscal 2001 fourth quarter. Net loss for the fiscal 2002
first quarter was $44.3 million. This amount included asset
impairment charges of $27.4 million related to NaviSite's
financing agreement with Compaq Financial Services and other
lease buyout arrangements. Without this charge, NaviSite's pro
forma net loss would have been $17.0 million. Net loss for the
fourth quarter of fiscal 2001 was $38.7 million.

Without the asset impairment charge in Q1 and restructuring
charge in Q4, pro forma EBITDA loss for the fiscal 2002 first
quarter would have been approximately $8.1 million, or a
decrease of $14.6 million from the pro forma fiscal 2001 fourth
quarter. With the charges, EBITDA losses increased to $35.4
million in the fiscal 2002 first quarter from $32.6 million in
the fiscal 2001 fourth quarter.

"NaviSite is in a significantly different, stronger financial
position than we were at the end of last quarter, thanks to our
new financing arrangement with Compaq Financial Services and
CMGI," commented Tricia Gilligan, president and CEO of NaviSite,
Inc. "Going forward, we are laser focused on further
strengthening our financials, extending our commitment to
operational excellence and laying the groundwork for healthy
growth going forward. We believe that success in these areas
will position NaviSite to take the leadership role in the
managed services industry."

In November 2001, NaviSite completed a restructuring of certain
operating lease obligations with Compaq Financial Services
whereby NaviSite purchased the assets under lease in exchange
for a six-year $35 million convertible note. In conjunction with
the restructuring, NaviSite also received $20 million and $10
million in funding from Compaq Financial Services and CMGI,
respectively, in exchange for a six-year convertible note. Under
the convertible notes interest is payable in years one through
three and interest and principal is paid in years four through
six. Issuance of the shares pursuant to the conversion of the
notes is subject to the Company's stockholder approval.

The combination of this financing arrangement and NaviSite's
improved cost structure, which resulted from the lease
restructuring and right-sizing of operations, is expected to
enable the company to accelerate EBITDA breakeven. NaviSite has
lowered its target for turning EBITDA positive to approximately
$27 million quarterly revenue run rate from initial projections
of approximately $44 million quarterly revenue run rate.

At October 31, 2001 NaviSite had $12.2 million in available
cash, excluding $4.4 million in restricted cash. NaviSite's
closing cash balance at December 10, 2001 is approximately $39
million in available cash, including $20 million and $10 million
in funding received in November, from Compaq and CMGI,
respectively.

Major developments related to the Company include:

     -- $65 million in financing from Compaq Financial Services
and CMGI, which includes $30 million in cash and $35 million in
restructured lease obligations, fundamentally improves both the
Company's cash position and cost structure;

     -- Restructured outstanding lease obligations with Compaq;

     -- Restructured certain other outstanding obligations
through a lease-buyout arrangement;

     -- Added five new managed services customers, primarily in
the enterprise space, and eight new streaming customers; churn
for the quarter was a total of 77 customers, approximately 90%
of which were unproductive accounts proactively managed out of
the base;

     -- Launched Operational Metrics campaign through which
NaviSite becomes the first company in the managed hosting
industry to openly publish its operational metrics;

     -- Announced Security Healthcheck and VPN services geared
toward security-conscious enterprise customers; and

     -- Generated 70% of revenue in fiscal Q1 2002 from non-CMGI
related companies and increased average annualized revenue per
customer to $356,000 in Q1 from $322,000 in Q4.

          Business Outlook For Second Quarter Fiscal 2002

Management's current estimates for the Company's business in the
second fiscal quarter of 2002 are, exclusive of impairment and
restructuring costs, as follows:

     -- Revenue of approximately $14.5 million to $15.5 million;

     -- Gross margin of negative 30% to negative 35%;

     -- EBITDA loss in the range of approximately $11 to $13
        million; and

     -- Loss per share between negative $0.30 and negative
        $0.35.

NaviSite, Inc., is a provider of outsourced Web hosting and
managed application services for companies conducting mission-
critical business on the Internet, including enterprises and
other businesses deploying Internet applications. The Company's
goal is to help customers focus on their core competencies by
outsourcing the management and hosting of their Web operations
and applications, allowing customers to fundamentally improve
the ROI of their web operations. NaviSite is a majority-owned
operating company of CMGI, Inc.

NaviSite's SiteHarbor solutions provide secure, reliable, co-
location and high-performance hosting services, including high-
performance Internet access, and high-availability server
management solutions through load balancing, clustering,
mirroring and storage services. In addition, NaviSite's enhanced
management services, beyond basic co-location and hosting, are
designed to meet the expanding needs of businesses as their Web
sites and Internet applications become more complex and as their
needs for outsourcing all aspects of their online businesses
intensify. The Company's application services, which include
application hosting, management and rental, provide cost-
effective access to, as well as rapid deployment and reliable
operation of, business-critical applications, including managed
services for streaming media.

For more information about NaviSite, please visit
http://www.navisite.comor by phone on the East Coast call 888-
298-8222, on the West Coast call 888-929-0401. NaviSite is
headquartered at 400 Minuteman Road, Andover, MA 01810.

SiteHarbor is a registered trademark of NaviSite, Inc. All other
trademarks and registered trademarks are the property of their
respective owners.

NaviSite's October 31 results showed an upside-down balance
sheet, registering a stockholders' equity deficit of about $51
million. It also sustained strained liquidity, as total current
liabilities exceeded current assets by over $23 million.


NETCENTIVES INC: Ceases All Operations and Commences Wind-Down
--------------------------------------------------------------
As part of their jointly administered Chapter 11 bankruptcy
proceeding, Netcentives Inc., (OTC Bulletin Board: NCNT.OB) Post
Communications, Inc. and MaxMiles, Inc., all of San Francisco,
announced that as of December 7, 2001 all business asset sales
have closed as follows: 1) On December 6, 2001, Princeton
Entrepreneurial Group, LLC acquired MaxMiles, Inc. and purchased
all outstanding shares of UVN Holdings, Inc.; 2) On December 7,
2001, Trilegiant Corporation acquired the Netcentives patent
portfolio; 3) On December 7, 2001, North Bay Networks acquired
Netcentives' Loyalty Marketing Group furniture, fixtures and
equipment; 4) On December 7, 2001, Charles River Consulting,
Inc. acquired Netcentives' Loyalty Marketing Group assets; 5) On
December 7, 2001 CD Micro, Inc. acquired Netcentives' remaining
furniture, fixtures and equipment; and 6) On December 7, 2001,
YesMail, Inc. acquired Netcentives' Email Marketing Group.

Netcentives has ceased all operations of its business and has
begun a wind down process that should be complete by the end of
March 2002.  The company does not expect that the proceeds from
the sales described above or from the sales of any other assets
will be sufficient to fund a dividend to shareholders once
creditor claims have been administered by the U.S. Bankruptcy
Trustee.


NTELOS: Potential Merger Termination Has S&P Keeping Watch
----------------------------------------------------------
Standard & Poor's placed its ratings on NTELOS Inc. on
CreditWatch with negative implications, following the company's
announcement that Conestoga Enterprises intends to terminate its
merger agreement with NTELOS.

The ratings on NTELOS had incorporated the merger of rural
incumbent local exchange carrier Conestoga, which would have
enhanced the company's business profile and improved its overall
financial measures. The transaction, which would have provided
about $30 million in annual operating cash flow, was to be
financed through a combination of common and payment-in-kind
convertible preferred equity, and included the assumption of
about $73 million in debt.

NTELOS has indicated that it is pursuing alternatives regarding
the merger agreement, including having further discussions with
Conestoga. If NTELOS's agreement with Conestoga is ultimately
terminated, the ratings on NTELOS would likely be lowered,
despite the $10 million break-up fee that NTELOS would receive.

               Ratings Placed on CreditWatch
                 with Negative Implications

     NTELOS Inc.                             RATING
       Corporate credit rating               B+
       Senior secured bank loan              BB-
       Senior unsecured debt                 B-
       Subordinated debt                     B-


OCEAN POWER: Additional Resources Needed to Continue Operations
---------------------------------------------------------------
Ocean Power Corporation is developing modular seawater
desalination systems integrated with environmentally friendly
power sources.  It is also developing stand alone modular
Stirling based power systems. These systems are intended to be
sold to a series of regional joint ventures that will ideally
take 15-25 year contracts to sell water and power.  If
successful,  this will provide the Company dual income streams
from both equipment sales and royalties  from the sale of water
and power.  

The Company has had no profit to date. It has experienced a
total of $33,199,822 in losses from inception of current
operations on March 26, 1992 through to September 30, 2001.  The  
Company's losses have resulted from the fact that its products
are still in development and planned principle operations have
not commenced.

At September 30, 2001, the Company's cash position declined to
$291,081 as compared to  $335,140 at June 30, 2001, $2,683,723
at March 31, 2001, and $2,176,299 at December 31, 2000, and it
has incurred accounts payable, notes payable, and other
obligations aggregating  $18,141,414.  During the 3 months ended
September 30, 2001, aggregate liabilities increased by
$3,982,164.

At June 30, 2001, the Company was in discussion with Silent
Clean Power to convert the current semi-annual principle payment
of approximately $83,000, which was due on a note payable which
is collateralized by patents used in the Company's Stirling
engine business by its subsidiary, Sigma, into stock in the
Company.  The discussions did not result in an  agreement to
convert debt to stock.  Ocean Power's management intends to cure
the  delinquency through future equity infusions or borrowings,
and does not believe that the delinquencies affect the company's
ownership of the patents.  On November 13, 2001, the Company
obtained an extension of the payment due date which was due to
Silent Clean Power from May 2001 to December 31, 2001.  Payment
of approximately $7,600 in accrued interest, will be made on
December 1, 2001 in Swedish kronor and principle in the amount
of approximately  $83,000 plus accrued interest from December 1
will be paid on December 31, 2001 in Swedish kronor.

Accordingly, as of September 30, 2001 the Company is not in
default of the agreement to purchase the patents from Silent
Clean Power.  The Company expects it will make the payment to
Silent Clean Power either by raising funds from third parties
or, if such funding is not  available, through contributions to
capital by the three directors of the Company, each of whom have
agreed jointly and severally to contribute to the Company funds
necessary to make such payment. In the event that the Company is
unable to make such payment, it would have a material adverse
effect on the Company and could result in an impairment charge
on Sigma's assets, including Stirling engine patents and its
goodwill.

Due to the increased level of activity projected during the next
three years, additional  funding will be needed and is being
sought.  From January 1 to November 13, 2001, the Company has
raised $5,512,000 of additional financing through proceeds from
notes payable and  convertible debentures .  Also, the Company
has received a loan of $12,000 from a related party as of
September 30, 2001.

The Company does not have an established source of revenues
sufficient to cover its  operating costs and, accordingly, there
is substantial doubt about the ability of the Company to
continue as a going concern.

In order to continue as a going concern, develop a reliable
source of revenues, and achieve a profitable level of
operations, the Company will need, among other things,
additional capital resources.  Management's plans to continue as
a going concern include raising additional  capital through
private placement sales of the  Company's common stock and/or
loans from third parties, the proceeds of which will be used to
develop the Company's products, pay operating expenses and
pursue acquisitions and strategic alliances.  The Company
indicated  that it expects to need $20,000,000 to $30,000,000 of
additional funds for operations and expansion in 2001. Due to
the delays in fund raising caused in part by the September 11
acts of war on the United States, the Company expects that
$20,000,000 to $30,000,000 will be raised by the end of the
first quarter of 2002, rather than the end of 2001. All funds
raised will be used to pay current debts and fund operations and
expansion consistent with the Company's business plan. However,
management cannot provide any assurances that the Company will
be successful in accomplishing any of its plans.  Failure to
raise sufficient capital could have a material adverse effect on
the company's results of operations, financial condition, and
liquidity.


OMEGA HEALTHCARE: Seeks Approval to Raise New Equity Capital
------------------------------------------------------------
On October 30, 2001, Omega Healthcare Investors, Inc. announced
a plan to raise $50 million in new equity capital from its
current stockholders.  The purpose of such offering is to  
facilitate the Company reaching an agreement with its senior
secured bank lenders regarding the modification of the Company's
revolving credit facilities and to enhance its ability to repay
approximately $108 million in debt maturing during the first
half of 2002. Omega expects to use the proceeds from the
offering to repay a portion of the maturing debt and for  
working capital and other general corporate purposes.  The
Company is asking its stockholders  to approve certain matters
relating to this transaction.  The essential components of the
transaction are as follows:

     -- Rights Offering.  Omega will conduct a rights offering
pursuant to which holders of its common stock will receive a
dividend to purchase their pro rata percentage of additional
shares of Company common stock in an aggregate amount equal to
$27.24 million.

     -- Explorer's Investment Commitment.  Explorer Holdings,
L.P., which is Omega's largest stockholder and owns
approximately 45.5% of its common stock (assuming conversion of
its Series C convertible preferred stock, all of which is held
by Explorer), will not participate in the rights offering.
Instead, Explorer has agreed to purchase $22.76 million of
Omega's stock, on the closing of the rights offering, at the
same price per share available in the rights offering. The
shares that Explorer has agreed to purchase represent its pro
rata portion of the $50 million in new equity Omega is seeking
to raise.  Explorer has also committed to invest an additional
amount equal to the aggregate subscription price of the shares
of common stock that are not subscribed for by other
stockholders in the rights offering.  As a result of Explorer's
investment commitment, Omega is assured that it will receive $50
million in gross proceeds from the rights offering and
Explorer's investment assuming they are both completed.  Omega
is seeking approval from its stockholders to issue stock to
Explorer because Explorer is an affiliate of Omega's and the
rules of the New York Stock Exchange require that stockholders
approve any sale of this amount of voting capital stock to an
affiliate and issuance of securities that may result in a change
of control of the company.  If stockholders have not approved
the sale of common stock to Explorer at the time Omega closes
the rights offering and Explorer's investment, Omega will sell
Explorer shares of non-voting Series D preferred stock in lieu
of its common stock.  The Series D preferred stock will
automatically convert into common stock upon receipt of
stockholder approval or the waiver by the New York Stock
Exchange of its stockholder approval requirement.

     -- Amendment of Agreements  with  Explorer.  As a condition
to Explorer's investment, Omega has agreed to amend certain of
the agreements relating to Explorer's investment made in July
2000.  These amendments will be effective as of the closing of
Explorer's new investment.  The effect of these amendments is
generally to remove those provisions in the agreements that
prohibit Explorer from voting in excess of 49.9% of Omega stock
and from taking certain actions without the prior approval of
its Board of Directors.  The proposed amendment to the terms of
its Series C preferred stock also requires stockholder approval.  

     -- Increase Size of Board of Directors.  At the special
meeting of stockholders they will also be asked to approve
amendments to Omega's Articles of Incorporation, its corporate
charter, and Bylaws increasing the maximum size of its Board of
Directors from nine to eleven directors.  If the amendments are
approved, the Company has agreed with Explorer that the size of
the Board of Directors will be fixed at ten and that C. Taylor
Pickett, Chief Executive Officer, will be appointed to fill the
vacancy.

This transaction was referred to a special committee comprised
solely of directors who are  not affiliated with Explorer.   
This special committee unanimously recommended the proposed
transaction to the Board of Directors.  The Omega Board
indicates that it believes this transaction is the best
alternative available to address Omega's current capital needs.  
Omega's Board of Directors also received a written opinion from
Shattuck Hammond Partners LLC, an independent financial advisor,
that as of October 29, 2001, the date of their opinion,  the
financial terms of the investment agreement with Explorer, taken
as a whole, are fair to the Company from a financial point of
view.

While the special meeting of stockholders will be held at
Sheraton Inn, 3230 Boardwalk, Ann  Arbor, Michigan 4810, no date
has yet been announced by the Company.


OPTI INC: Breider Moore to Vote Against Plan of Liquidation
-----------------------------------------------------------
W. Joseph Breider, Managing Director of Breider Moore & Co.,
sent the following letter, dated Dec. 6, to Mr. Bernard T.
Marren, Chairman, Chief Executive Officer of OPTi, Inc. (Nasdaq:
OPTI):

"Dear Mr. Marren:

"As you know, Breider, Moore & Co. has been in contact with
several stockholders groups representing greater than ten
percent (10%) of the outstanding shares of OPTi, Inc., who are
opposed to the proposed liquidation of the Company.  Although we
have made repeated efforts to convince you and the board that we
as stockholders do not desire to liquidate OPTi you have
continued to pursue the liquidation option to the exclusion to
all other alternatives.  Once again we want to state
emphatically that we do not want to liquidate the company.

"Since it does not appear that we will be able to change the
direction of the company through the incumbent board and
management we feel we have no choice but to seek the appropriate
changes in the board and management to reflect the desire of the
stockholders to see the company restructured. Consequently we
want to notify you of our intent to place in nomination an
alternative slate of directors to be voted on at the annual
meeting scheduled for January 11, 2002.  We feel our nominees
possess the experience in restructuring corporations that can
achieve a level of return for the stockholders that would
significantly exceed the return that would be realized by the
proposed liquidation.

"Within the next week we will be finalizing our arrangements
with the other stockholders who likewise oppose the liquidation
of OPTi and expect to have proxies in excess of fifty (50%).  At
that time we will advise you of our proposed slate and expect
you will take all necessary steps to ensure this slate is
appropriately presented to all shareholders at the annual
meeting. Otherwise we are prepared to take all necessary legal
steps to ensure our slate of directors is elected and that the
company is not liquidated.

"Thank you for your attention to this matter.

Sincerely,

W. Joseph Breider
Managing Director
Breider Moore & Co."

Breider Moore & Co. is a member of the National Association of
Securities Dealers, CRD number 1641433.


PACIFIC GAS: Wants to Settle Prepetition Claims Below $100,000
--------------------------------------------------------------
Pacific Gas and Electric Company has filed a motion in U.S.
Bankruptcy Court asking for permission to proceed with the
investigation, negotiation and settlement of certain pre-
petition claims, including all of those under $100,000.

Approximately 12,800 claims have been filed, with about 80
percent of them for less than $100,000 and the remaining 20
percent for amounts in excess of $100,000.  In the filing, the
utility asks for approval to resolve the following categories of
claims without seeking review and approval for settlements
reached from either the Official Creditors' Committee or the
Bankruptcy Court:

     -- Any claim where the allowed amount settled on is
        $100,000 or less.

     -- Any claim where the proposed allowed amount exceeds
        $100,000, but is no more than $5 million, and is the
        lesser of (a) 110 percent of the amount of such claim as
        scheduled by PG&E in the Amended and Restated Schedules,
        and (b) $500,000 more than the amount of such claim as
        set forth on the Schedules.  (For example, where the
        Scheduled Amount of a claim is $4 million, and the
        creditor has filed a proof of claim for $5 million, if
        the parties reach a settlement whereby the claim would
        be allowed at $4.4 million, no Court or Committee review
        would be required.)

Settled claims would be paid pursuant to the plan of
reorganization. Where PG&E and the claimant cannot reach a
mutually agreeable settlement, the claim will be resolved by the
Court.  Since the company expects that settlement can be reached
on most claims, the procedures proposed will facilitate the
efficient resolution of the vast majority of the claims in this
case.  The utility has obtained concurrence from the Creditors'
Committee for the proposed settlement authority.

In a separate filing with the Court, the utility asked for
permission to make grouped objections to claims on the basis
that they are, for example, duplicative, already satisfied or
otherwise resolved, without waiving its right to assert
subsequent claim-specific objections to the same claims if
necessary.

Upon a preliminary analysis, the company found that billions of
dollars of claims filed were duplicative and unsubstantiated.  
For example:

     -- Identical duplicates -- Over $1 billion worth of claims
        are exact duplicates.  As a result, such claims are
        redundant.

     -- Electric Generation Claims -- The California Independent
        System Operator (CAISO) and the California Power
        Exchange (PX) have filed billions of dollars in claims
        for all of the electricity allegedly provided to PG&E
        pre- and post-petition through the markets they
        operated.  However, the electricity generators have
        also, in most cases, protected their interest by filing
        claims for the same electricity allegedly provided to
        PG&E through the CAISO and PX markets.  Such duplication
        is approximately $4 billion.

     -- Multiple Claimants Asserting Duplicative Identical
        Claims in Separate Proofs of Claim -- Multiple proofs of
        claim have been filed by multiple claimants in respect
        of the same claim.

     -- Amended or superseded claims -- Certain claims are
        amendments to previously filed claims, which are
        apparently intended to supersede the proof claims, but
        the original and amended claims both appear on the
        same claims register.  Such redundancy is over $1
        billion.

     -- Bondholders' claims -- Indenture trustees under various
        indentures for holders of pollution control bonds,
        mortgage bonds, and medium term notes, among others,
        have filed billions of dollars in claims on behalf
        of the holders under such indentures.  However, the
        individual bondholders and mortgage holders have, in
        many cases, also filed claims based on the same
        financial instruments.  Such redundancy is over
        $3 billion.

By asking the court for this approval, the utility believes it
can resolve a very large number of disputed claims with a
minimum of judicial time and estate resources.

The Bankruptcy Court is scheduled to hear both motions on
December 27, 2001.


PARTY CONCEPTS: Court Fixes Feb. 1 Bar Date for Proofs of Claim
---------------------------------------------------------------
                  UNITED STATES BANKRUPTCY COURT
                   WESTERN DISTRICT OF WISCONSIN

     In re:                       )
                                  )
     PARTY CONCEPTS, INC.,        )   Case No. 01-34625-11
                                  )
              Debtor.             )

                NOTICE OF FEBRUARY 1, 2002 BAR DATE

     Please Take Notice that the Hon. Robert D. Martin entered
an order (the "Order") in the above-captioned case requiring
that creditors who have any claim against Party Concepts, Inc.
("PCI") must file proofs of claim with the U.S. Bankruptcy
Court, 120 N. Henry Street, Rm. 340, Madison, WI 53703 on or
before February 1, 2002.

     Please Take Further Notice that PCI has done business under
the trade names "the Paper Factory," "Great Party," "Paper
Outlet," "Greeting-N-More," and "Paper Galore."

     This notice is an incomplete synopsis of the Order and the
Notice of February 1, 2002 Bar Date for Filing Proofs of Claim.  
You may view a complete copy of the Order and/or the Notice by
visiting http://www.gklaw.com/partyconcepts


PILLOWTEX: Fieldcrest Wants to Implement Employee Restructuring
---------------------------------------------------------------
Along with other operational initiatives Pillowtex Corporation,
and its debtor-affiliates intend to implement as part of their
Business Plan, the Debtors have determined to restructure the
human resources function of Fieldcrest Cannon, Inc. by
separating the management of Fieldcrest's operations employees
and the management of Fieldcrest's corporate and administrative
employees.

Michael G. Wilson, Esq., at Morris, Nichols, Arsht & Tunnell, in
Wilmington, Delaware, explains that the Debtors seek authority
to take the necessary actions to implement the Fieldcrest
employee restructuring now rather than waiting until emergence
form bankruptcy because:

    (a) substantial savings and administrative benefits will be
        lost if the employee restructuring is not implemented by
        January 1, 2002, and

    (b) the employee restructuring will have no effect on the
        Debtors' creditors.

Pursuant to the employee restructuring, Mr. Wilson relates, the
Debtors will transfer substantially all of the employees of
Fieldcrest to debtors -- St. Marys, Inc. and Fieldcrest Cannon
International, Inc.  According to Mr. Wilson, St. Marys and
Fieldcrest International are wholly owned subsidiaries of
Fieldcrest that have no assets, no operations and no liabilities
other than their guarantees of the Debtors' pre-petition senior
bank debt and Pillowtex Corporation's 9% and 10% senior
subordinated notes.  The employees to be transferred include
production, sales and administrative employees from Fieldcrest's
Alabama, Georgia, North Carolina, South Carolina and Virginia
facilities, as well as sales personnel from several other
states, Mr. Wilson says.

Specifically, Mr. Wilson details, the employees who perform
Fieldcrest's production and facility management functions will
be transferred to St. Marys while the employees who perform
Fieldcrest's corporate and administrative functions will be
transferred to Fieldcrest International.  Additionally, Mr.
Wilson notes, Fieldcrest will contribute a small amount of
physical assets to St. Marys and Fieldcrest International,
principally desks, furniture and office equipment.

Prior to the transfer of the employees and solely to alter St.
Marys' and Fieldcrest International's status for tax purposes,
Mr. Wilson discloses, St. Marys and Fieldcrest International
will be converted from Delaware corporations into Delaware
single-member limited liability companies and will elect to be
considered "pass through" entities for tax purposes.  Mr. Wilson
also anticipates that St. Marys will change its name to FCI
Operations LLC and Fieldcrest International will change its name
to FCI Corporate LLC.

In connection with these transfers, Mr. Wilson continues,
Fieldcrest will enter into production and management services
agreement with St. Marys and Fieldcrest International.  Pursuant
to the Services Agreement, Mr. Wilson relates:

  (i) St. Marys will provide to Fieldcrest all of the employee
      resources necessary for the operation of Fieldcrest's
      facilities, including production, receiving, shipping, on-
      site supervision, on-site accounting and related
      functions; and

(ii) Fieldcrest International will provide to Fieldcrest all of
      the employee resources necessary for the administration of
      Fieldcrest and its facilities, including general
      management oversight, financial management and reporting,
      tax, risk management, regulatory and tax reporting and
      internal legal services.  Fieldcrest International will
      also act as the marketing and sales agent for Fieldcrest.

According to Mr. Wilson, St. Marys and Fieldcrest International
will have full and sole authority concerning the direction and
control of the employees transferred.  In consideration for
these services, Mr. Wilson says, Fieldcrest will pay to St.
Marys and Fieldcrest International a "cost-plus" management fee
to be determined on an arms-length basis.

To assist St. Marys and Fieldcrest International in providing
these employee services, Mr. Wilson continues, Fieldcrest will
provide to St. Marys and Fieldcrest International information
technology, payroll processing, cash management, treasury and
group benefits services.  Fieldcrest's costs in providing these
services will be accounted for in calculating the management fee
to be paid to St. Marys and Fieldcrest International, Mr. Wilson
notes.  Similarly, Mr. Wilson adds, to enable St. Marys and
Fieldcrest International to provide the same ongoing benefits to
the employees transferred, minor non-substantive modifications
will be made to the Debtors' employee benefit plans and to the
collective bargaining agreements covering the transferred
employees.  St. Marys and Fieldcrest International will also
become obligors under the applicable collective bargaining
agreements, Mr. Wilson says, and Fieldcrest will guarantee all
obligations of St. Marys and Fieldcrest International under
those agreements.

Mr. Wilson enumerates the 3 principal benefits that
implementation of the employee restructuring will generate:

(A) Improved Administrative Efficiencies

    Mr. Wilson tells Judge Robinson that separating operations
    employees from corporate and administrative employees, and
    moving them into separate legal entities, will:

      (1) enhance the Debtors' ability to analyze and manage the
          direct labor costs associated with Fieldcrest's
          manufacturing and distribution processes as well as
          Fieldcrest's indirect and administrative labor costs;

      (2) assist the Debtors' management in determining optimal
          allocation of employee resources to these different
          functions;

      (3) streamline the Debtors' annual update of inventory
          costs standards; and

      (4) because the general ledger expense issues associated
          with corporate and administrative employees are
          substantially different from those associated with
          operations employees, simplify accounting tasks
          associated with payroll cost distribution.

(B) Substantial Prospective State Unemployment Insurance Tax
    Savings

    The Debtors estimate that implementing the employee
    restructuring will result in fiscal year 2002 cash savings
    of approximately $2,000,000 and additional savings in years
    thereafter.  This is attributable to lower North Carolina
    state unemployment insurance tax rates that will be imposed
    upon St. Marys and Fieldcrest International under North
    Carolina SUI law, Mr. Wilson tells the Court.

(C) Additional Flexibility to Accommodate Current and Future
    Recruiting, Compensation, Labor Relations and Workplace
    Requirements

    The employee management and human resource requirements of
    Fieldcrest's production, corporate and sales staffs differ
    significantly, Mr. Wilson observes.  The separation of
    operations employees from corporate and administrative
    employees will allow the Debtors to address the differing
    issues of each in a more targeted manner, Mr. Wilson notes.
    It will also provide flexibility to accommodate the
    divergent requirements of these separate groups as future
    needs arise, Mr. Wilson adds.

Furthermore, Mr. Wilson contends that the implementation of the
employee restructuring will have no effect on the Debtors'
creditors for these reasons:

  (i) the employee restructuring involves only Fieldcrest and 2
      of its wholly-owned debtor-subsidiaries, St. Marys and
      Fieldcrest International, both of which are dormant shell
      entities that have no assets, no operations and
      essentially no liabilities;

(ii) upon conversion from Delaware corporations to Delaware
      limited liability companies, St. Marys and Fieldcrest
      International will be successor entities under Delaware
      law and their respective rights and obligations with
      respect to third parties will not be affected, including
      their rights and obligations to creditors;

(iii) no significant assets of Fieldcrest will be transferred to
      St. Marys or Fieldcrest International, and the assets that
      will be transferred remain available to Fieldcrest's
      creditors and will continue to be subject to any valid,
      existing encumbrances; and

(iv) no contracts or leases will be assigned to St. Marys or
      Fieldcrest International.

Significant savings and administrative benefits will be lost if
the employee restructuring is delayed beyond the end of 2001,
Mr. Wilson advises Judge Robinson.  For instance, Mr. Wilson
says, substantial costs can be saved from transferring their
payroll function in-house.  Also, according to Mr. Wilson,
transferring the Fieldcrest employees immediately prior to the
beginning of the calendar year eliminates issues relating to
multiple W-2 forms and other year-end reporting factors as well
as the determination of whether federal and state employment tax
annual wage limitations must be separately computed for each
legal entity or can be computed on a combined basis.  If the
restructuring occurs after 2002, Mr. Wilson states further, the
Debtors will have to expend resources in revising their
accounting programs to adjust certain automatic recurring
journal entries.  And more important, Mr. Wilson avers,
implementing the employee restructuring before January 1, 2002
will permit the maximum possible SUI tax savings.

For all these reasons, therefore, the Debtors seek the Court's
authority to implement the Fieldcrest employee restructuring.

Judge Robinson will convene a hearing on this Motion on December
18, 2001, at 8:30 a.m. (Pillowtex Bankruptcy News, Issue No. 18;
Bankruptcy Creditors' Service, Inc., 609/392-0900)    


POLAROID CORP: Signs-Up Dresdner Kleinwort as Financial Advisors
----------------------------------------------------------------
Polaroid Corporation, and its debtor-affiliates seek the Court's
authority to employ Dresdner Kleinwort Wassertein, Inc., as
financial advisor and investment banker nunc pro tunc to the
Petition Date.  The Debtors also request Judge Walsh's approval
of the proposed fee structure, including the indemnification
provisions in Dresdner's Engagement Letters.

As financial advisor and investment banker, Dresdner will assist
the Debtors in their analysis and consideration of one or more
possible transactions, including:

  (a) a public or private sale or placement of the equity,
      equity-linked or debt securities instruments or
      obligations of the Company with one ore more lenders
      and/or investors, or any loan or other financing,
      including any or "exit financing" under the Bankruptcy
      Code or a rights offering, but excluding financing
      provided by holders of senior secured claims; and/or

  (b) a recapitalization or restructuring of the Company's bank
      indebtedness, preferred equity and/or debt securities
      and/or other indebtedness or obligations, including
      pursuant to a repurchase or an exchange transaction, a
      Plan of solicitation of consents, waivers, acceptances or
      authorizations but excluding negotiation of certain
      amendments presently expected to be effected to the
      Company's Euros 72.5 Million Multi-Currency Loan Facility
      dated August 3, 1999; and/or

  (c) the disposition to one or more third parties in one or a
      series of related or unrelated transactions of:

        (x) all or a portion of the equity securities of the
            Company by the security holders of the Company, or

        (y) all or a portion of the assets or businesses of the
            Company or its subsidiaries,

      in either case, including through a sale or exchange of
      capital stock, options or assets, a lease of assets with
      or without a purchase option, a merger, consolidation or
      other business combination, an exchange or tender offer, a
      recapitalization, the formation of a joint venture,
      partnership or similar entity, or any similar transaction.
      For the purposes of this agreement, the term "Sale" shall
      not include dispositions of all or a significant portion
      of the equity or assets of the Company's (i) LGP ID
      Business, or (ii) other businesses or assets, the
      disposition of which generates Aggregate Consideration of
      less than $5,000,000 individually, and less than
      $25,000,000 cumulatively.

According to Polaroid Corporation Senior Vice President Neal D.
Goldman, the Debtors first engaged Wasserstein Perella & Co.,
Inc., under an Engagement Letter dated May 12, 2000, as their
financial advisor with respect to the possible "Sale" of the
Company's LGP ID Business, including the disposition of all or a
significant portion of the equity or assets of the Company's LGP
ID Business to one or more third parties through a sale,
purchase or exchange of capital stock, options or assets, a
lease of assets with or without a purchase option, a merger,
consolidation or other business combination, an exchange or
tender offer, a recapitalization, a reorganization, the
formation of a joint venture, partnership or similar entity, or
any similar transaction.

Early January this year, Mr. Goldman relates, Wasserstein became
an indirect, wholly owned subsidiary of Dresdner Bank AG and
part of Dresdner Kleinwort Wasserstein, the investment banking
division of Dresdner Bank AG.

Mr. Goldman explains that the selected Dresdner as their
financial advisor and investment banker because of the firm's
extensive experience with and knowledge of the Debtors' business
and financial affairs.  Since May last year, Mr. Goldman notes,
Dresdner has rendered financial and restructuring advice to the
Debtors.  "That's why Dresdner is familiar with the Debtors'
business and affairs and has the necessary background to assist
the Debtors in dealing effectively with many of the needs and
problems of the Debtors that may arise in the context of these
chapter 11 cases," Mr. Goldman says.

Pursuant to the October 2, 2001 Engagement Letter, the Debtors
will look to Dresdner to provide these financial advisory and
investment banking services:

(A) General Financial Advisory rind Investment Banking Services:

   (1) to the extent reasonably necessary to perform its
       services in an effective, appropriate and feasible
       manner, Dresdner will familiarize itself with the
       business, operations, properties, financial condition and
       prospects of the Debtors; and

   (2) if the Company determines to undertake a Restructuring,
       Financing, and/or Sale, Dresdner will advise and assist
       the Company in structuring and effecting the financial
       aspects of such a transaction or transactions, subject to
       the terms and conditions of the October Engagement
       Letter.

(B) Financing Services:

   (1) Dresdner will provide financial advice and assistance to
       the Company in structuring and effecting a Financing,
       identify potential Investors and, at the Company's
       request, contact such Investors;

   (2) If Dresdner and the Company deem it advisable, Dresdner
       will assist the Company in developing and preparing a
       memorandum or other written materials to be used in
       soliciting potential Investors; and

   (3) If requested by the Company, Dresdner will assist the
       Company and/or participate in negotiations with potential
       Investors.

(C) Restructuring Services:

   (1) Dresdner will provide financial advice and assistance to
       the Company in developing and obtaining approval of a
       Restructuring Plan;

   (2) Dresdner will, if requested by the Company, provide
       financial advice and assistance to the Company in
       structuring any new securities to he issued pursuant to
       the Plan;

   (3) Dresdner will, it requested by the Company, assist the
       Company and/or participate in negotiations with entities
       or groups affected by the Plan; and

   (4) Dresdner will, if requested by the Company, participate
       in hearings before the Court with respect to the matters
       upon which Dresdner has provided advice, including, as
       relevant, providing testimony in connection therewith.

(D) Sale Services:

   (1) Dresdner will provide financial advice and assistance to
       the Company in connection with a Sale (consistent with
       the terms of Section 5.10 of the Revolving Credit and
       Guaranty Agreement as approved by the Court on or about
       October 12, 2001 and November 5, 2001 and the Asset
       Divestiture Plan), identify potential acquirers and, at
       the Company's request, contact such potential acquirers;

   (2) Dresdner will, at the Company's request, assist the
       Company in preparing a memorandum, to be used in
       soliciting potential acquirers; and

   (3) Dresdner will, if requested by the Company, assist the
       Company and/or participate in negotiations with potential
       acquirers.

Pursuant to the May 12, 2000 Engagement Letter, Dresdner has
agreed to provide financial advisory and investment banking
services as requested by the Debtors including:

  (a) Dresdner will study, review and evaluate the LGP ID
      Business and its business prospects and analyze the
      historical and projected financial performance of the LGP
      ID Business.

  (b) Dresdner will identify, analyze, and provide an
      independent assessment and, where appropriate, a valuation
      analysis of the financial alternatives available to the
      Company with respect to the LGP ID Business.

  (c) Dresdner will develop the strategy and tactics to be used
      in evaluating these alternatives in the market.

  (d) If a Sale is pursued, Dresdner will:

         (i) Identify potential investors or purchasers and
             formulate a strategy for approaching and conducting
             discussions with them.

        (ii) Prepare a Confidential Offering Memorandum
             describing the LGP ID Business and the
             opportunities that the LGP ID Business provides to
             prospective investors or purchasers to be used in
             soliciting the interest of such prospective
             investors or purchasers with respect to a Sale.

       (iii) Compile and maintain a list of potential investors
             or purchasers, and at the Company's request contact
             potential investors or purchasers to present the
             opportunity and distribute the Confidential
             Offering Memorandum.

        (iv) Provide a "quick" assessment of the interest level
             of a group of potential buyers to be agreed upon by
             the Company and Dresdner as soon as reasonably
             possible.

         (v) Coordinate and arrange for potential investors or
             purchasers to execute confidentiality agreements
             (using a Company approved form of confidentiality
             agreement) and provide the Company with an original
             or copy of each executed confidentiality agreement.

        (vi) Compile and maintain a list of Identified
             Purchasers.

       (vii) Coordinate and assist in due diligence meetings
             with prospective investors or purchasers.

      (viii) As directed by the Company, assist in the
             negotiation of a letter of intent and/or a
             definitive agreement with a prospective investor or
             purchaser.

In exchange for the services, the Debtors will compensate
Dresdner pursuant to the October Engagement Letter:

  (a) monthly financial advisory fee of $200,000 which shall be
      due and paid by the Company beginning November 1, 2001 and
      thereafter on each monthly anniversary thereof during the
      term of this engagement.  From October 12, 2001:

        (i) 75% of the total amount of any Monthly Advisory Fees
            paid to Dresdner will be credited against any
            financing fees payable to Dresdner,

       (ii) 75% of the total amount of any Monthly Advisory Fees
            paid to Dresdner will be credited against any
            Restructuring Transaction Fee payable to Dresdner
            and,

      (iii) 50% of the total amount of any Monthly Advisory Fees
            paid to Dresdner will be credited against any Sales
            Fee payable to Dresdner,

      provided that, in no event shall Monthly Advisory Fees be
      credited more than once; and provided further that
      Dresdner shall terminate this engagement on or before 30
      days after the closing of the Sale of substantially all of
      the Company.

  (b) If during the term of Dresdner engagement or within 12
      months following the termination of the engagement by the
      Company for any reason other than Dresdner's breach of the
      October Engagement Letter, the Company:

        (x) consummates one or more Financings or

        (y) (1) the Company receives and accepts written
                commitments for one or more Financings in each
                case with a party in each case with a party with
                whom Dresdner participated in discussions during
                the term of this engagement; and

            (2) concurrently therewith or if within 3 months
                thereafter such Financing is consummated,

      the Company will pay to Dresdner upon the closing date(s)
      thereof, these financing fee(s):

           (i) 1% of the gross proceeds of any Financing
               indebtedness issued that is secured by a first
               lien;

          (ii) 3% of the gross proceeds of any Financing
               indebtedness issued that:

               (x) is secured by a second or junior lien,
               (y) is unsecured and/or
               (z) is subordinated;

         (iii) based on the gross proceeds of any equity or
               equity-linked Financing securities issued,
               calculated as:

               (x) 5% of the gross proceeds up to $50,000,000,
                   plus

               (y) 3% of the gross proceeds, if any, between
                   $50,000,001 and $100,000,000, plus

               (z) 1.5% of the gross proceeds, if any, in
                   excess of $100,000,000; and

          (iv) with respect to any other securities or
               indebtedness issued as a Financing, such
               placement fee or underwriting discount as shall
               be mutually agreed by the Company and Dresdner.

  (c) If during the term of the October Engagement Letter,

      (x) a Restructuring is consummated or

      (y) (1) an agreement in principle or definitive agreement
              to effect a Restructuring is entered into and

          (2) concurrently therewith or within 12 months
              thereafter, such Restructuring is consummated,

      Dresdner shall be entitled to receive a transaction fee,
      contingent upon the consummation of such a Restructuring
      and payable at the closing thereof; equal to $4,500,000.

  (d) If during the term of the October Engagement Letter,

      (x) a Sale is consummated or

      (y) (1) an agreement in principle or definitive agreement
              to effect a Sale is entered into, and

          (2) concurrently therewith or if within 12 months
              thereafter such Sale is consummated,

      then Dresdner shall be entitled to receive a transaction
      fee, contingent upon the consummation of such a Sale and
      payable at the closing thereof; and

  (e) if during the 12 months following the termination of the
      October Engagement Letter,

      (x) a Sale is consummated with a party with whom Dresdner
          participated in discussions during the term of this
          engagement, or

      (y) (1) an agreement in principle or definitive agreement
              to effect a Sale is entered into with a party with
              whom Dresdner participated in discussions during
              the term of this engagement, and

          (2) concurrently with such entry or if within 3 months
              thereafter such Sale is consummated,

      then Dresdner shall be entitled to receive a Sales Fee,
      contingent upon the consummation of such a Sale and
      payable at the closing thereof; and

  (f) the Sales Fee shall be based on the Aggregate
      Consideration of the transaction, calculated as:

        (i) 2% of the Aggregate Consideration up to
            $100,000,000, plus

       (ii) 1.5% of the Aggregate Consideration, if any,
            between $100,000,001 and $200,000,000, plus

      (iii) 1% of the Aggregate Consideration, if any, in
            excess of $200,000,000; and

  (g) if more than one fee becomes so payable to Dresdner in
      connection with a series of transactions, each such fee
      (but only one fee for a transaction or an element of a
      transaction) shall be paid to Dresdner, and if more than
      one fee becomes so payable to Dresdner in connection with
      a single or any element of a transaction, only the highest
      of such fees shall be paid to Dresdner.

Under the May Engagement Letter, Dresdner is entitled to be
compensated for its services as:

    (a) In connection with any Sale, a transaction fee equal to
        1.5% of the Aggregate Consideration; provided, however,
        that the minimum transaction fee payable to Dresdner for
        such Sale, prior to the credit, shall be $650,000.
        Compensation, if any, which is payable to Dresdner, in
        connection with a Sale shall be contingent upon the
        consummation of the Sale and paid by the Company on the
        closing date thereof;

    (b) Dresdner shall also be entitled to such fee if:

        (x) at any time prior to the expiration of 12 months
            following such termination an agreement in principle
            or definitive agreement to effect a Sale is entered
            into with a party with whom Dresdner participated in
            discussions during the term of this engagement and

        (y) concurrently therewith or thereafter (which must be
            within 3 months of the execution of an agreement in
            principle or definitive agreement to effect such
            Sale is entered into) such Sale is consummated.

Henry S. Miller, Vice Chairman and Managing Director of Dresdner
Kleinwort Wasserstein, Inc., adds that Dresdner also shall be
entitled to monthly reimbursement of its travel and reasonable
out-of-pocket expenses incurred in connection with its
activities under or contemplated by the Engagement Letter,
whether or not any transaction contemplated by such letter is
proposed or consummated.

Dresdner will maintain detailed records of any actual and
necessary costs and expenses incurred in connection with these
services, Mr. Miller assures the Court.

Moreover, Mr. Miller says, the Debtors have agreed to indemnify
Dresdner and certain related persons in accordance with the
indemnification provisions set forth in the Engagement Letter.

"The Debtors or Dresdner may terminate the Engagement Letter at
any time upon prior written notice to the other party," Mr.
Miller explains.  Upon any such termination of the Engagement
Letter, however, Mr. Miller emphasizes, the Debtors will remain
obligated to pay:

  (i) any accrued Monthly Advisory Fees as of the effective date
      of the termination, and

(ii) any Restructuring, financing and/or Sales Fees owed in
      accordance with the terms described in the Engagement
      Letter.

Furthermore, Mr. Miller continues, termination of the Engagement
Letter by either party will not affect the Debtor's
reimbursement, indemnification and exculpation obligations under
the Engagement Letter with respect to activities occurring prior
to the effective date of termination.

Mr. Miller informs Judge Walsh that Dresdner's ultimate
corporate parent Dresdner Bank AG earlier announced it would
combine with Allianz AG.  "Dresdner does not have access to
Allianz's conflicts databases or any current working
relationship with Allianz or its subsidiaries or affiliates,"
Mr. Miller explains.  However, Mr. Miller relates, Dresdner has
reviewed the lists of parties-in-interest provided by the
Debtors to determine if Allianz or any subsidiary or affiliates
of Allianz known to Dresdner are parties-in-interest in this
case.  "To the best of my knowledge, there are no such parties,"
Mr. Miller notes. Furthermore, Mr. Miller says, Dresdner does
not believe that the indirect relationship between itself and
Allianz or such entities is material to Dresdner's
representation of the Debtors. Nevertheless, Mr. Miller assures
the Court, Dresdner will file a supplemental affidavit if
Allianz will disclose any material relationships.

Mr. Miller asserts that Dresdner is a "disinterested person" as
defined in section 101(14) of the Bankruptcy Code.

            United States Trustee Doesn't Like It

Acting United States Trustee for Region 3, Donald F. Walton,
interposes an objection against the Debtors' application to
employ Dresdner on these issues:

  (a) The Application seeks pre-approval of certain Financing
      Fees, Restructuring Transaction Fees and Sales Fees
      payable to Dresdner, which are potentially in the millions
      of dollars and are in addition to a Monthly Advisory Fee
      of $200,000, only a portion of which is to be credited
      against the Success Fees.

  (b) As presently structured, only 75% of the total amount of
      Monthly Advisory Fees paid will be credited against
      Financing Fees or Restructuring Fees payable to Dresdner,
      and only 50% of the total amount of Monthly Advisory Fees
      paid will be credited against Sales Fees.  The full amount
      of any Monthly Advisory Fees should be credited against
      any Success Fees.

  (c) As presently structured, Success Fees will be payable to
      Dresdner regardless of the value that Dresdner's services
      add to the Debtors' estates.  Indeed, Success Fees would
      be payable out of the estates - and out of funds which
      might otherwise redound to the benefit of unsecured
      creditors - in connection with transactions that redound
      solely to the benefit of secured creditors.

  (d) Pre-approval of Success Fees is premature; review,
      consideration and approval of Success Fees should be
      deferred until the conclusion of these cases, when the
      efficacy of Dresdner services can be evaluated upon
      application to the Court for payment of the Success Fees,
      and all parties in interest should be permitted an
      opportunity to comment upon or object to such application.

  (e) The Dresdner Engagement Letters require the Debtors to
      indemnify Dresdner for any claims made against Dresdner
      excepting only those claims which are "finally judicially
      determined to have resulted primarily from the gross
      negligence, bad faith or willful misconduct of the person
      or entity to be indemnified.  The engagement letter as
      presently structured improperly precludes review by this
      Court of any request for indemnification or the
      circumstances surrounding any such request.  While the UST
      asserts a standing objection to the indemnification
      provisions of the Dresdner engagement letters, any
      indemnification, if permitted at all, should be permitted
      only after application to the Court therefor, with notice
      to all parties in interest, and opportunity for the Court
      and parties interest to examine the specific circumstances
      giving rise to the request for indemnification.

  (f) The Dresdner engagement letters further provide that
      Dresdner shall have no liability to the Debtors in
      connection with its engagement except for losses, claims,
      damages, liabilities or expenses which are "finally
      judicially determined to have resulted primarily from the
      gross negligence, bad faith or willful misconduct" of the
      persons or entities covered by the proposed "limitation of
      liability" clause.  Even in the event of such a judicial
      finding, the aggregate liability of any such "covered
      person" would still be limited to the amount of fees paid
      to Dresdner absent a final judicial determination of
      "willful misconduct" on the part of the covered person.
      Stripped to its essence, this provision holds Dresdner to
      an unconscionably low standard of performance.  Such low
      performance standards, which essentially waive in advance
      claims for virtually all future acts and omissions are not
      appropriate for a professional person employed to assist a
      bankruptcy trustee or a debtor-in-possession in performing
      its duties under Title 11 of the United States Code.

  (g) The Application improperly seeks approval of the terms of
      Wasserstein's engagement - including the indemnity and
      limitation of liability provisions - thereby shifting an
      inappropriate burden of proof to any party in interest who
      might object to Dresdner's fees, payment of any
      indemnification claim or limitation of Dresdner's
      liability for losses caused by Dresdner.

  (h) On one hand, the Dresdner Engagement Letters purport to
      define the terms of an engagement between Dresdner and
      Polaroid Corporation but, on the other hand, it purport to
      absolve Dresdner of any fiduciary or agency relationship
      to the Debtors and to state that Dresdner will be
      rendering advice solely for the benefit of Polaroid's
      board of directors. This provision should be stricken as
      inconsistent with employment of Dresdner at the expense of
      the estate.

  (i) The Dresdner Engagement Letters purport to authorize
      Dresdner to, among other things, buy, sell and hold for
      its own account securities, loans or obligations of the
      Debtors. Such authorization is inconsistent with the
      express provisions of 11 U.S.C.  327(a), which require
      that Dresdner hold or represent no interest adverse to the
      estate and that Dresdner be and remain a disinterested
      person.

Thus, the US Trustee asks the Court to deny the Debtors'
application. (Polaroid Bankruptcy News, Issue No. 6; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


SERVICE MERCHANDISE: Set to File Chapter 11 Plan After Christmas
----------------------------------------------------------------
Service Merchandise Company, Inc., and its debtor-affiliates
advise Judge Paine that they intend to file their plan of
reorganization, a disclosure statement in support of that plan
and a motion to establish solicitation procedures soon after the
2001 Christmas selling season.  The Debtors also propose to
schedule a two-day disclosure statement hearing on January 29
and 30, 2002.

According to Paul G. Jennings, Esq., at Bass, Berry & Sims PLC,
in Nashville, Tennessee, the Debtors will serve copies of their
disclosure statement only on the Official Committee of Unsecured
Creditors, their post-petition lenders, the United States
Trustee and the Securities and Exchange Commission.  The Debtors
will also make copies of the disclosure statement available to
any party in interest requesting in writing a copy of the
disclosure statement once it is filed, Mr. Jennings adds.
(Service Merchandise Bankruptcy News, Issue No. 22; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


TELEX COMMUNICATIONS: September Quarter Net Sales Decrease 15.5%
----------------------------------------------------------------
Telex Communications, Inc.'s net sales decreased $13.3 million,
or 15.5%, from $85.9 million for the three months ended
September 30, 2000 to $72.6 million for the three months ended
September 30, 2001. Net sales decreased $33.5 million, or 13.2%,
from $254.5 million for the nine months ended September 30, 2000
to $221.0 million for the nine months ended September 30, 2001.
Sales in both the Professional Sound and Entertainment segment
and the Multimedia/Audio Communications segment declined and are
attributed to the slowdown in the economy which started in the
fourth quarter of 2000 and has continued into 2001, the stronger
U.S. dollar against foreign currencies, which reduced current
year's translated sales by approximately $4.9 million, and
several discontinued products that added net sales of $2.1
million in the prior-year nine-month period. The Company's net
sales, excluding the impact of discontinued products and the
stronger U.S. dollar, decreased approximately 14.5% and 10.5%
for the three months and nine months ended September 30, 2001,
respectively.

Net sales in the Company's Professional Sound and Entertainment
segment decreased $3.3 million, or 6.0%, from $55.2 million for
the three months ended September 30, 2000 to $51.9 million for
the three months ended September 30, 2001. Net sales decreased
$12.3 million, or 7.5%, from $164.1 million for the nine months
ended September 30, 2000 to $151.8 million for the nine months
ended September 30, 2001. Net sales, excluding sales of
discontinued products in both periods, decreased approximately
6% and 7% for the three months and nine months ended September
30, 2001, respectively. The decline is attributed primarily to
lower speaker sales as a result of the continued global slowdown
of the economy in 2001.

Net sales in the Company's Multimedia/Audio Communications
segment decreased $10.0 million, or 32.7%, from $30.7 million
for the three months ended September 30, 2000 to $20.7 million
for the three months ended September 30, 2001. Net sales
decreased $21.1 million, or 23.4%, from $90.4 million for the
nine months ended September 30, 2000 to $69.3 million for the
nine months ended September 30, 2001. Net sales, excluding sales
of discontinued products in both periods, decreased
approximately 33% and 22% for the three months and nine months
ended September 30, 2001, respectively. The decline in year-to-
date net sales is attributed primarily to lower sales of
products to the computer and telecommunications industries, in
large part due to slowdown of the economy, and to lower hearing
instrument sales.

At September 30, 2001, the Company had cash and cash equivalents
of $4.3 million compared to $2.7 million at December 31, 2000.
The Company's principal source of funds in the nine months ended
September 30, 2001 consisted of a net of $11.5 million of cash
generated from financing activities. Net cash used in operating
activities was $5.2 million and net cash used in investing
activities was $4.7 million.

Telex is a leader in the design, manufacture and marketing of
sophisticated audio, wireless and multimedia communications
equipment for commercial, professional and industrial customers.
Telex provides high value-added communications products designed
to meet the specific needs of customers in commercial,
professional and industrial markets, and, to a lesser extent, in
the retail consumer electronics market. * Founded in 1936 as a
hearing aid manufacturing company, Telex is controlled by
Greenwich Street Capital, an affiliate of Citigroup. As of June
30, 2001, the company reported an upside-down balance sheet,
with stockholders' equity deficit totaling around $195 million.


USG CORP: SoCal Edison Wants $1.2 Million Security Deposit
----------------------------------------------------------
Michael P. Morton, Esq., appearing for Southern California
Edison moves for adequate assurance from USG Corporation, and
its debtor-affiliates of payment in the form of deposits
totaling $1,223,604.  The amount of the deposit is the average
cost of two months of service for the Debtors' accounts with
Edison.

Section 366(b) of the Bankruptcy Code affirmatively grants
Edison the right to demand adequate assurance, states Mr.
Morton, going so far as to provide that a utility may
discontinue service of neither the Debtors nor the trustee,
"furnishes adequate assurance of payment, in the form of a
deposit or other security, for service after such date."  Edison
is entitled to demand a deposit of some other form of security.

Any reliance by the Debtors, Mr. Morton asserts, on In re
Caldor, Inc., 117 F.3d. 646 (2d Cir. 1997), ignores the factual
predicates in that case that may distinguish it from this case.
While the Second Circuit in Caldor rejected the utilities broad
legal challenge to the decision, the opinion supports the
payment of a deposit based upon the facts of a particular case.
Here, he says, Edison is owed $756,016.66 pre-petition, belying
the Debtors' assertion that their pre-petition payment history
was good.

Mr. Morton offers that this "plain meaning" approach to the
statute has been adopted in other courts as well. In re Best
Products Co. 203 B.R. 51 (Bankr. E.D. Va. 1996)(adequate
assurance must be given in the form of a deposit or other
security). Specifically, in Best Products, the Court ruled that
adequate assurance under Section 366 requires that the Debtors
provide a deposit or some other form of security such as a bond
or letter of credit. He posits that Section 366 places the
burden on the Debtors to make a "proper showing" that the
deposit demand is excessive or unreasonable under the
circumstances. The Debtors have not met that burden here.

The provision of an administrative expense priority in this case
is hardly an offer of adequate assurance of payment. Mr. Morton
also claims that the Debtors' promise to pay future bills cannot
meet the requirements of the statute in this case, either. In
determining the amount and sufficiency of the deposit required,
a court should consider several factors. Critical to the
utilities is the 60 days it usually takes to effect a
termination if a customer misses the billing cycle.

Edison requests that the Court require the Debtors to post
deposits in amounts equal to two months service on each account.
Applicable tariffs and rules specifically permit these deposits
according to Mr. Morton, but deposits in these amounts are
essential for Southern California Edison to protect itself
against the Debtors' post-petition default. (USG Bankruptcy
News, Issue No. 15; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


U.S. WIRELESS: Gets Approval to Sell Assets to Trafficmaster USA
----------------------------------------------------------------
U.S. Wireless Corporation announced that the U.S. Bankruptcy
Court for the District of Delaware approved on December 6, 2001
the sale of substantially all of the Company's assets to
Trafficmaster USA, Inc., a Delaware corporation and a wholly-
owned subsidiary of Trafficmaster Plc, a company registered in
England, and the transaction was effectively closed on December
10, 2001.

Under the terms of the transaction, Trafficmaster acquired
substantially all of the Company's assets for $2 million in
cash. The Company intends to file a plan of liquidation with the
U.S. Bankruptcy Court for the District of Delaware. The
shareholders of the Company are not expected to receive any
distribution.


UNOVA INC: S&P Examining Junk Ratings' Developing Implications
--------------------------------------------------------------
Standard & Poor's ratings on UNOVA Inc. remain on CreditWatch.
However, the implications have been revised to developing from
negative. Developing implications means that the ratings could
be raised, lowered, or affirmed.

During the past several months, UNOVA has reduced debt (mainly
through a $122 million pension reversion), improved liquidity
(as of September 30, 2001, the company had $56 million in cash
and $31 million in availability under the company's $200 million
revolving credit facility), and has continued to focus on
improving operating efficiencies. Total debt to EBITDA is about
6 times, compared with more than 10x at the end of the first
quarter of 2001 and EBITDA interests coverage is about 1.8x,
compared with 1.0x during the first quarter of 2001.
Nevertheless, UNOVA faces several near-term challenges. The
slowing U.S. economy, intensely competitive market conditions,
and softening demand could lead to renewed profit pressures and
deterioration of credit protection measures. This could cause
the company to violate bank covenants, which would force UNOVA
to seek waivers or amendments to its new credit facility.

UNOVA is composed of two business segments: IAS and ADS. The IAS
segment includes integrated manufacturing systems and metal-
cutting production systems, primarily serving the automotive and
aerospace industries. The ADS business segment comprises
wireless networking and mobile computing products and services,
and Internet-enabled automated data collection, principally
serving industrial and logistics/supply chain management
markets.

Standard & Poor's will evaluate UNOVA's operating and financial
plans. If it appears that the company will be able to continue
to improve operating performance despite weak industry
fundamentals while maintaining adequate liquidity, the ratings
could have modest upside potential. However, if the benefits
from the company's restructuring actions are delayed, causing
performance to weaken, which would result in liquidity
pressures, the ratings could be lowered.

               Ratings Remain on CreditWatch
          with Implications Revised to Developing

     UNOVA Inc.
       Corporate credit rating                          CCC+
       Senior secured bank loan                         CCC+
       Senior unsecured debt                            CCC
       Senior unsecured/subordinated shelf (prelim.)    CCC/CCC-


WARNACO GROUP: Retaining Michael Fox Internatioanl as Auctioneer
----------------------------------------------------------------
As part of an ongoing review of their operations, The Warnaco
Group, Inc. have closed manufacturing facilities located at:

    (i) La Romana, in the Dominican Republic, and

   (ii) Murfreesboro, Tennessee.

Stanley P. Silverstein, Vice President of The Warnaco Group,
Inc., informs the Court that the Debtors have surplus sewing
machines and associated equipment located at the two facilities.
According to Mr. Silverstein, these assets are providing no
benefit to the Debtors' estates, because the Debtors have
completely shut down their operations at the facilities and have
no further use for the assets.  The assets are depreciating in
value, Mr. Silverstein reports.  The cost to store the assets
and keep them secure constitutes and unnecessary ongoing expense
to the Debtors' estates, Mr. Silverstein adds.

The value of the assets can be maximized by engaging an
experienced auctioneer to identify potential buyers for the
assets, conduct a targeted marketing campaign and the conduct an
auction of the assets, Mr. Silverstein contends.

For that reason, the Debtors seek to employ and retain Michael
Fox International, Inc. as auctioneers.

Michael Fox is one of the world's largest auction houses
specializing in the sale of industrial machinery with nationwide
and international operations, Mr. Silverstein relates.  
Moreover, Mr. Silverstein notes, Michael Fox has considerable
experience in conducting auctions of equipment in other large
chapter 11 cases, such as that of Fruit of the Loom, Inc.  For
these reasons, Mr. Silverstein explains, the Debtors believe
that Michael Fox is well qualified to act as the Debtors'
auctioneers.

Mr. Silverstein enumerates the key provisions of the Commission
Agreement between Michael Fox and the Debtors:

  (A) Michael Fox will marshal and advertise the assets.

  (B) Michael Fox will set up each auction location.

  (C) Michael Fox will conduct each auction of assets on a date
      and at a place to be mutually agreed upon with the
      Debtors.

  (D) Michael Fox will coordinate the removal of any assets sold
      at each auction location with the buyer.

  (E) In addition to the commission described below, Michael Fox
      will be entitled to collect a buyers' premium of 10% from
      purchasers at each auction.

  (F) Michael Fox will be entitled to:

      (a) a commission, calculated after the sale of all of the
          assets is completed (regardless of whether or not the
          assets are sold in one or more separate auctions) and
          based upon the aggregate sale proceeds generated by
          the sale of all of the assets, equal to the sum of:

              (i) 10% of the gross sale proceeds up to $500,000,
                  plus

             (ii) 7.5% of the gross sale proceeds in excess of
                  $500,000 but up to $749,999, plus

            (iii) 5% of the gross sale proceeds in excess of
                  $750,000 but up to $999,999, plus

             (iv) 2.5% of the gross sale proceeds in excess of
                  $1,000,000; and

      (b) reimbursement for all expenses incurred in connection
          with the sale of the assets, including but not limited
          to advertising, labor, travel and security pursuant to
          a mutually agreeable budget (which Michael Fox
          currently estimates to be approximately $50,000 to
          $75,000 in the aggregate).

  (G) Within 15 days following any auction of the assets,
      Michael Fox will:

        (i) provide a detailed written accounting to the Debtors
            of assets sold at each auction, and

       (ii) forward the sale proceeds realized at each auction
            to counsel for the Debtors for deposit in an escrow
            account.

Jonathan Reich, a principal of Michael Fox, says the corporation
will be keeping reasonably detailed descriptions of the services
that were rendered pursuant to its engagement.  Mr. Reich
explains that Michael Fox will then request approval by this
Court of its fees and expenses by filing a fee application not
later than 30 days following completion of the auction.

In the ordinary course of its business, Mr. Reich recounts,
Michael Fox has represented and continues to represent certain
of the Debtors' creditors and possibly other parties-in-interest
in these cases in matters not involving the Debtors.  In fact,
Mr. Reich reveals, General Electric Capital is one of its
current clients and accounts for 5% of its revenues.  
Nevertheless, Mr. Reich swears Michael Fox is a "disinterested
person" as defined in 11 USC Section 101(14).

Judge Bohanon will decide on the Debtors' application at a
hearing set for December 13, 2001. (Warnaco Bankruptcy News,
Issue No. 15; Bankruptcy Creditors' Service, Inc., 609/392-0900)  


WHEELING-PITTSBURGH: Amends Ore Sales Pact with Itabira Rio Doce
----------------------------------------------------------------
Represented by Michael E. Wiles and Richard F. Hahn of the New
York firm of Debevoise & Plimpton as lead counsel, and James M.
Lawniczak and Scott N. Opincar of the Cleveland firm of Calfee,
Halter & Griswold LLP as local counsel, Debtor and debtor-in-
possession Wheeling-Pittsburgh Steel Corporation, one of the
debtors and debtors-in possession in these cases, asks Judge
Bodoh for entry of an order approving an "Amended Agreement
Regarding Ore Sales" by and between WPSC, Itabira Rio Doce
Company, Limited and Rio Doce Limited.

Mr. Lawniczak explains that WPSC uses substantial quantities of
iron ore pellets in its steel-making operations. ITACO presently
supplies substantially all of WPSC's iron ore pellet
requirements pursuant to a "Contract for Sale and Purchase of
CVRD High SiO2 Pellets" made and entered into September 19,
1998. The Contract has been amended and supplemented from time
to time, including by an "Agreement Regarding Terms of 2001 Ore
Sales" among WPSC, ITACO and RDL, dated June 3, 2001 and
authorized by Order of this Court entered May 25, 2001.

WPSC has negotiated an agreement with ITACO and with ITACO's
affiliate, RDL, concerning the modification and assumption of
the Contract on the following terms:

       (a) Exclusivity/Quantity. WPSC will purchase iron ore
pellets exclusively from ITACO and RDL during the term of the
assumed and modified agreement, which will expire on December
31, 2009. During the period beginning on October 1, 2001 and
ending April 30, 2002, WPSC will purchase a minimum number of
metric tons of pellets in a specified number of shipments;
provided, however, that WPSC would not be obligated to make such
purchases (other than to complete its purchase of iron ore
pellets in shipments that have already departed from Brazil) in
the event that WPSC cancels shipments due to cash shortages or
due to an idling or shutdown of WPSC's facilities. During the
remainder of the term of the Contract, WPSC will purchase its
actual iron ore pellet requirements from ITACO and RDL.

       (b) Pricing and Payment Terms. The precise pricing terms
of the Agreement are confidential, but have been disclosed to
counsel for the Committees. In addition, for the period October
1, 2001 through April 30, 2002, a portion of the payments due
for each shipment will be deferred and will not be due and
payable until some time following the ocean bill of lading date
for such shipment.

       (c) Security for Deferred Payments. WPSC's obligations to
make each Deferred Payment are to be secured by liens upon, and
security interests in, all property of WPSC; provided, however,
that such liens and security interests shall be junior and
subordinate in all respects to:

             (i) the liens and security interests held by the
lenders under the Debtor In Possession Credit Agreement dated as
of November 17, 2001, as amended;

             (ii) the liens and security interests held by
Wheeling-Pittsburgh Corporation and Pittsburgh Canfield
Corporation to secure the loans made by WPC and PCC to WPSC
pursuant to the terms of the Settlement and Release Agreement
made as of May 29, 2001;

             (iii) the liens and security interests granted to
WHX Corporation to secure loans and other extensions of credit
by WHX Corporation pursuant to the terms of the Supplemental
Agreement and the attached 3d Secured DIP Loan that were
approved by the Bankruptcy Court by Order entered October 22,
2001; and

             (iv) all other valid and enforceable liens and
security interests existing as of the Effective Date of the
Agreement.

The liens and security interests granted in this Motion shall
not extend to:

             (1) the building housing, and all equipment
employed in connection with, the new paint line being installed
by WPSC at Beech Bottom, West Virginia;

             (2) the caster segments located in Mingo Junction,
Ohio; or

             (3) avoidance actions under the United States
Bankruptcy Code, 11 U.S.C.  101 et seq.

       (d) Priority of Deferred Payment Obligations. The
obligations of WPSC to make each Deferred Payment will be
granted priority under Section 364(c)(1) over all administrative
expenses of the kind specified in Sections 503(b) or 507(b) of
the Bankruptcy Code except for:

             (i) the Carve-Out and the Mandatory Fees (as those
terms are defined in the DIP Credit Agreement); and

             (ii) obligations arising under or in connection
with WPSC's obligations set forth in (c).

       (e) Interest on Deferred Payments. Simple interest on
each Deferred Payment will accrue and will be payable if, but
only if, WPSC does not purchase the minimum number of metric
tons during the period set forth in subparagraph (a) above, and
WPSC is liquidated. In all other circumstances, no interest
shall accrue or be owing.

       (f) Treatment of Pre-Petition Debt. WPSC owes
$2,891,993.28 relating to shipments of iron ore pellets made
before November 16, 2000.

Under the Agreement, ITACO and RDL will waive payment of the
Pre-Petition Debt as a condition to the assumption of the
Contract; provided, however, that:

             (i) such Pre-Petition Debt shall remain a pre-
petition unsecured claim in WPSC's Chapter 11 case; and

             (ii) if WPSC breaches its obligations to purchase
Pellets exclusively from ITACO and RDL (subject to certain
exceptions set forth in the Agreement), then the portion of such
Pre-Petition Debt that has not been paid shall be immediately
due and payable.

       (g) DIP Lender Consents. WPSC will seek all consents from
the lenders under the DIP Credit Agreement that may be necessary
prior to the granting of the liens, security interests and
priority claims described above.

       (h) Miscellaneous. The Stand-By Letter of Credit
established in favor of RDL pursuant to the Agreement Regarding
Terms of 2001 Ore Sales will be maintained and extended through
and including March 31, 2003. WPSC also will attempt to arrange
extensions of certain barge and stevedoring contracts through
December 31, 2002.

Mr. Lawniczak tells Judge Bodoh that WPSC believes that the
terms of the Contract, as modified by the Agreement, are of
substantial benefit to WPSC's estate. The pricing and delivery
terms are equal to or superior to those that would be available
from other suppliers. In addition, the Deferred Payments will
provide substantial additional trade credit to WPSC.

The Bankruptcy Code permit WPSC, with the Court's approval, to
use property of the estate other than in the regular course of
business, and to enter into, assume and/or modify contracts,
that (based on reasonable business judgments) are determined by
WPSC to be in the best interests of the debtors' estates.  In
addition, Section 364 of the Bankruptcy Code allows debtors to
obtain credit with specialized priority or with security if a
debtor cannot such credit on an unsecured basis. Courts have
applied the business judgment test to evaluate motions to obtain
credit.  It is WPSC's business judgment that the Agreement is in
the best interests of WPSC's estate and is appropriate and
necessary to WPSC's continued business operations. The Agreement
will provide substantial and important trade credit as well
as competitive, favorable terms for the iron ore pellets to be
purchased by WPSC, which will be of substantial benefit to the
WPSC estate.

WPSC submits that it is also appropriate to confirm that WPSC's
obligations to make each Deferred Payment will be secured, and
will have the priorities, specified in the Agreement. It was not
possible for WPSC to obtain the deferral of the Deferred
Payments without agreeing to provide such security and priority.
Since WPSC's working capital assets are already encumbered and
given its current financial condition, it is not possible for
WPSC to obtain credit on an unsecured basis. (Wheeling-
Pittsburgh Bankruptcy News, Issue No. 14; Bankruptcy Creditors'
Service, Inc., 609/392-0900)  


WILLCOX & GIBBS: Seeks Plan Filing Period Extension to March 4
--------------------------------------------------------------
Willcox & Gibbs, Inc., along with its debtor subsidiaries asks
the U.S. Bankruptcy Court for the District of Delaware to extend
their exclusive period to file a chapter 11 plan and solicit
acceptances of the plan.

The Debtors' exclusive period to propose a plan is scheduled to
expire on December 4, 2001. The Debtors believe that this will
not provide them adequate time to evaluate their remaining
assets and liabilities necessary to complete the plan
preparation. Consequently, the debtors wishes to extend the
periods during which only them may file a plan and solicit
acceptances of the plan through March 4, 2002 and May 2, 2002,
respectively.

Through the operations of six principal business units, Willcox
& Gibbs, Inc.'s business activities consist of the distribution
of certain replacement parts, supplies and ancillary equipment
to the apparel and other sewn products industry. The Company
filed for chapter 11 protection on August 6, 2001 in the U.S.
Bankruptcy Court for the District of Delaware. Edwin J. Harron,
Esq. and Brendan Linehan Shannon, Esq. at Young, Conaway,
Stargatt & Taylor represent the Debtors in their restructuring
efforts. When the Company filed for protection from its
creditors, it listed $36,393,000 in assets and $29,994,000 in
debts.


* BOOK REVIEW: The ITT Wars: An Insider's View of Hostile
               Takeovers
---------------------------------------------------------
Author:      Rand Araskog
Publisher:   Beard Books
Soft cover:  236 pages
List Price:  $34.95
Review by Gail Owens Hoelscher
Buy a copy for yourself and one for a colleague on-line at:
http://amazon.com/exec/obidos/ASIN/1893122832/internetbankrupt

This book was originally published in 1989 when the author was
Chairman and Chief Executive Officer of ITT Corporation, a $25
billion conglomerate with more than 100,000 employees and
operations spanning the globe with an amazing array of
businesses: insurance, hotels, and industrial, automotive, and
forest products.  ITT owned Sheraton Hotels, Caesars Gaming, one
half of Madison Square Garden and its cable network, and the New
York Knickerbockers basketball and the New York Rangers hockey
teams.  The corporation had rebounded from its troubles of the
previous two decades.

Araskog was made CEO in 1978 to make sense of years of wild
acquisition and growth. Under Harold Geneen, successor to ITT's
founder and champion of "growth as business strategy," ITT's
sales had grown from $930 million in 1961 to $8 billion in 1970
and $22 billion in 1979.  It had made more than 250 acquisitions
and had 2,000 working units.  (It once acquired some 20
companies in one month).

ITT's troubles began in 1966, when it tried to acquire ABC.  
National sentiment against conglomerates had become endemic; the
merger became its target and was eventually abandoned.  Next
came a variety of allegations, some true, some false, all well
publicized: funding of Salvador Allende's opponents in Chile's
1970 presidential elections; influence peddling in the Nixon
White House; underwriting the 1972 Republican National
Convention.  ITT's poor handling of several antitrust cases was
also making headlines.

Then came recession in 1973.  ITT's stock plummeted from 60 in
early 1973 to 12 in late 1974.  Geneen found himself under fire
and, in Araskog's words, the "succession wars" among top ITT
officers began.  Geneen was forced out in 1977, and Araskog,
head of ITT's Aerospace, Electronics, Components, and Energy
Group, with more than $1 billion in sales, won the CEO prize a
year later.

Araskog inherited a debt-ridden corporation.  He instituted a
plan of coherent divesting and reorganization of the company
into more manageable segments, but was cut short by one of the
first hostile bids by outside financial interests of the 1980s,
by businessmen Jay Pritzker and Philip Anschutz.  This book is
the insider's story of that bid.

The ITT Wars reads like a "Who's Who" of U.S. corporations in
the 1970s and 1980s. Araskog knew everyone.  His writing
reflects his direct, passionate, and focused management style.  
He speaks of wars, attacks, enemies within, personal loyalty,
betrayal, and love for his company and colleagues.  In the
book's closing sentences, Araskog says, "We fought when the odds
were against us.  We won, and ITT remains one of the most
exciting companies of the twentieth century.  We hope to keep
the wagon train moving into the twenty-first century and not
have to think about making a circle again.  Once is enough."
Araskog wrote a preface and postlogue for the Beard Books
edition, and provides us with ten years of perspective as well
as insights into what came next.  In 1994, he orchestrated the
breakup of ITT into five publicly traded companies.  Wagon
circling began again in early 1997 when Hilton Hotels made a
hostile takeover offer for ITT Corporation. Araskog eventually
settled for a second-best victory, negotiating a friendly merger
with The Starwood Corporation, in which ITT shareholders became
majority owners of Starwood and Westin Hotels, with the
management of Starwood assuming management of the merged entity.

Today Mr. Araskog continues to serve on the boards of the four
corporations created from ITT, as well as on the boards of Shell
Oil Company and Dow Jones, Inc.  He heads up his own investment
company with headquarters on Worth Avenue, in Palm Beach,
Florida.

                          *********

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is provided by DebtTraders in New York. DebtTraders is a
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unparalleled services in the identification, assessment, and
sourcing of attractive high yield debt investments. For more
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client accounts, contact Peter Fitzpatrick at 1-212-247-3800.
Real-time pricing available at http://www.debttraders.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. Yvonne L. Metzler, Bernadette
C. de Roda, Ronald P. 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
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contained herein is obtained from sources believed to be
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