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

               Thursday, May 16, 2002, Vol. 6, No. 96

                           Headlines

360NETWORKS: Reaches Pact to Resolve Claims Dispute with Adesta
ALLIED WASTE: Fitch Concerned About Reduced Fin'l Flexibility
AMERICAN COMM'L: Moody's Cuts Ratings on Sr. Notes to Junk Level
ANKER COAL: Commences Debt Workout Talks with Lenders & Trustee
ARCH WIRELESS: Trustee Appoints Additional Members to Committee

ASPEON INC: Settles Defaulted Convertible Preferred Shares
BETHLEHEM STEEL: U.S. Trustee Amends Committee Membership
CEDARA SOFTWARE: Closes CDN$1M Private Placement with Toyo Corp.
CHIEF CONSOLIDATED: Begins Talks to Restructure Accounts Payable
CLARUS: Kanders Nominees Call for Sale or Liquidation of Assets

EVTC INC: Takes-Over Ownership of Innovative Waste Technologies
ELECTRIC LIGHTWAVE: Fails to Meet Nasdaq Listing Requirements
ENRON CORP: Seeks Court's Approval of Risk Management Agreements
ENRON CORP: Liquids Unit Intends to Sell Natural Gas Inventories
EXIDE TECHNOLOGIES: Look for Schedules & Statements by June 13

EXODUS: Court Okays Deloitte & Touche's Engagement as Advisors
FFC HOLDING: Taps Resilience Capital to Assist in Asset Sale
FLAG TELECOM: Reach Wants Asia Unit to Promptly Act on Contracts
FORTRESS GROUP: Continues to Review Options Including Asset Sale
GLOBAL CROSSING: Former Employees Seek Committee Appointment

GLOBAL CROSSING: Inks Four-Year Service Pact with Choice Telco
GOLDMAN INDUSTRIAL: Committee Looks to ESBA for Financial Advice
ICG COMM: Seeks OK to File SBC Confidential Agreement Under Seal
IT GROUP: Examiner Hires Pachulski Stang as Bankruptcy Counsel
INTEGRATED HEALTH: Assumes & Assigns Medicare Pact to Bridgewood

KAISER ALUMINUM: Asbestos Claimants Win OK to Hire Prof. Warren
KMART CORP: Wants to Assume Amended Sesame Workshop License Pact
LEINER HEALTH: Signs-Up REM Associates as Management Consultants
LERNOUT & HAUSPIE: Solicitation Period Stretched through June 17
MERRILL LYNCH 1995-C1: Fitch Affirms Class F Certs. Rating at B-

METALS USA: Looking to DKW Capital for Marketing Advice
MILLER EXPLORATION: Falls Below Nasdaq Min. Bid Price Criteria
MORTON INDUSTRIAL: 2001 Restructuring Plan Nearing Completion
NATIONSRENT INC: Deutsche Financial Seeking Adequate Protection
NEWCOR INC: Delaware Court Okays Kirkland & Ellis as Attorneys

O'SULLIVAN INDUSTRIES: Mar. 31 Balance Sheet Upside-Down by $55M
PACIFIC GAS: Proposes Uniform Voting & Balloting Procedures
PACIFICARE HEALTH: S&P Rates $200MM Senior Unsecured Notes at B+
PITTSBURGH CORNING: Reaches Accord to Settle Asbestos Liability
PITTSBURGH CORNING: Hartford Caps Exposure at $120-$150 Million

POLYMER GROUP: Arranges $125M DIP Financing Package
PRANDIUM INC: Unit Inks Agreement to Sell Hamburger Hamlet Chain
PROVELL INC: Look for Schedules and Statements by July 25, 2002
PSINET: Court Approves First Amended Disclosure Statement
RAYTEL MEDICAL: Lenders Agree to Waive Loan Covenants Defaults

REALNAMES CORP: Microsoft Contract Decision Triggers Closure
ROMACORP: Commences Exch. Offer for 12% Sr. Notes Due July 2006
ROANOKE PRO FOOTBALL: Chapter 7 Case Summary
SHELDAHL INC: Investor Group Intends to Purchase Assets
STERLING CHEMICALS: Files Plan of Reorganization in Houston

TESORO PETROLEUM: Fitch Revises Outlook on Low-B's to Negative
TRANS WORLD: Seeks to Extend Exclusive Period through August 30
U.S. PLASTIC LUMBER: Working Capital Deficit Tops $56 Million
VELOCITA CORP: Will Not Make Scheduled Bond Interest Payment
WABASH NATIONAL: First Quarter Net Sales Drop 33% to $243 Mill.

WARNACO GROUP: Silk Mills Lease Decision Period Moved to July 27
WASH DEPOT: Employs Ernst & Young as Accountants and Advisors
WILLIAMS COMMS: Moves to Assume Restructuring Pact with BofA
WINSTAR COMMS: Court Nixes Trustee's Bid to Hire Kaye Scholer
XEROX CORP: Receives $496 Million Financing from GE Capital

XO COMMS: Total Shareholder Deficit Nears $2 Billion at Mar. 31

* DebtTraders' Real-Time Bond Pricing

                           *********

360NETWORKS: Reaches Pact to Resolve Claims Dispute with Adesta
---------------------------------------------------------------
360networks inc., its debtor-affiliates, and Adesta
Telecommunications Inc., formerly known as MFS Fiber Networks,
are parties to an agreement under which Adesta constructed a
fiber optic telecommunication system linking Denver, Colorado,
and Salt Lake City, Utah.

Adesta has previously advised the Debtors that they will not
complete the construction of the project and has stated their
intent to reject the agreement.  Furthermore, Adesta has
asserted that the Debtors owe them approximately $22,000,000 for
the portions of the project that were completed by them.

However, the Debtors dispute the claim explaining that since
Adesta abandoned the project, the Debtors do not owe Adesta any
payment under the terms of the agreement.  In addition, the
Debtors asserted a claim against Adesta for breach of contract
in the amount of $10,000,000 for amounts paid by the Debtors to
Adesta prior to the abandonment of the project.  The Debtors and
Adesta Telecommunications are also contesting ownership of a
fiber amounting to $19,000,000, which the Debtors delivered and
Adesta stored for the project.

Adesta has also requested the Debtors to provide a hookup in
Denver metro area to assist them with respect to its obligations
under an agreement with the Colorado Department of
Transportation.  Adesta claims that the Debtors are obligated to
provide the connection; however, the Debtors deny that they have
an obligation to provide such connection.

Thus, in a Court-approved stipulation, both parties agree that:

   (i) the Debtors will not claim any rejection damages as a
       result of any rejection of the agreement by Adesta and
       Adesta agrees not to claim any rejection damages as a
       result of any rejection by the Debtors;

  (ii) the Debtors agree to release its ownership interest in the
       project;

(iii) both parties agree to enter into an Indefeasible Rights of
       Use;

  (iv) as part of the Denver IRU, the Debtors agree that in the
       event it installs a cable in the duct, it will convey to
       Adesta 24 fibers to enable Adesta to meet its obligations;

   (v) approval of this stipulation will constitute the approval
       of the Denver IRU and conveyance of fiber;

  (vi) the Debtors agree to provide the connection upon the
       execution of this stipulation and Adesta agrees to pay the
       reasonable and necessary expenses of making the
       connection;

(vii) Adesta agrees to make the fiber available to the Debtors
       for sale and the Debtors agree to use its best efforts to
       sell the fiber.  All net proceeds from the sale of the
       fiber after deducting direct expenses of sale, shall be
       divided between the parties 60% to the Debtors and 40% to
       Adesta;

(viii) when the Debtors obtains an offer to purchase all or a
       portion of the fiber, they will notify:

         Gregory J. Benak
         Vice President and General Counsel
         1200 Landmark Center, Suite 1300
         Omaha, Nebraska

       If Adesta rejects an offer to purchase presented by the
       Debtors, then the parties shall divide all remaining fiber
       evenly between them.  Thereafter, the Debtors have
       no obligation to split the proceeds of the sale of the
       fiber and vice versa.

  (ix) both parties agree to assume and continue to perform the
       contracts but agree that no payment of any alleged pre-
       petition amount due from either of them or any other cure
       payment will be required in connection with the assumption
       of the contracts;

   (x) Adesta agrees to forever release the Debtors from all
       claims, causes of action, debts, suits, right of action,
       dues and obligations.  In the same way, the Debtors
       forever release Adesta from all claims, debts, suits,
       right of action, dues and obligations. (360 Bankruptcy
       News, Issue No. 23; Bankruptcy Creditors' Service, Inc.,
       609/392-0900)


ALLIED WASTE: Fitch Concerned About Reduced Fin'l Flexibility
-------------------------------------------------------------
Fitch Ratings has affirmed the following ratings of Allied Waste
Industries, Inc. (NYSE: AW). The Rating Outlook is stable.

                   Allied Waste North America

      --$1.3 billion Senior Secured Credit Facility 'BB';

      --$3.1 billion Tranche A,B,C Loan Facilities 'BB';

      --$3.1 billion Senior Secured Notes 'BB-';

      --$2.0 billion Senior Subordinated Notes 'B'.

                Browning-Ferris Industries (BFI)

      --$741 million Senior Secured Notes, Debentures and MTNs
        'BB-'.

The ratings reflect the company's geographically diverse asset
base, market density, solid EBITDA margins and cash flow
generating ability. Also incorporated into the rating is the
relatively low risk profile of the waste industry. Offsetting
factors include AW's very high leverage position, which leaves
AW with reduced flexibility during times of economic weakness.

During the first quarter of 2002, which is typically the weakest
quarter, AW continued to feel the effects of softer economic
conditions. Pricing pressure and lower volumes in certain
business segments combined with rising costs have depressed
margins. In particular, EBITDA declined 14% to $404 million and
EBITDA margins declined 410 basis points to 30.7% during the
first quarter 2002 compared to last year's first quarter. A drop
in commodity prices, pricing sensitivity and lower volumes in
the industrial roll off, construction and demolition, special
event waste and lower landfill pricing contributed to the weaker
results. However, AW still expects to generate in the range of
$250-$300 million in free cash flow after $550 million in
capital spending that will be directed towards debt reduction.
AW expects full year EBITDA to approximate $1.85 billion and
debt at December 31, 2002 to be below $9.0 billion, resulting in
leverage of 4.8x.

Credit statistics at March 31, 2002 declined slightly during the
seasonally weak first quarter. In particular, EBITDA/interest
was 2.0x and leverage was 4.9x. However, at December 31, 2002,
credit statistics should remain flat compared to 2001 with
interest coverage of approximately 2.2x and leverage of around
4.8x. The expected financial results represent a slowdown in the
pace of debt reduction expected by Fitch Ratings, but the
company's credit profile remains appropriate for the rating
category given this point in the economic cycle.


AMERICAN COMM'L: Moody's Cuts Ratings on Sr. Notes to Junk Level
----------------------------------------------------------------
Moody's Investors Service rated American Commercial Lines LLC's
(ACL) proposed $120 million 11-1/4% senior unsecured notes due
January 1, 2008 with a Caa2 rating and gave its Caa3 rating to
the proposed $116.5 million 12% payment-in-kind (PIK) senior
subordinated notes due July 1, 2008. The PIK notes are to be
issued in exchange for a like amount of ACL's existing rated Ca
10-1/4% senior unsecured notes due June 2008, as part of the
acquisition and recapitalization of ACL by Danielson Holding
Corporation (DHC-unrated). The rating on the 10-1/4% notes will
be withdrawn after completing the exhange.

At the same time, Moody's confirmed the company's existing
ratings:

      * $413 million senior secured facilities, consisting of
        $100 million revolving credit and $313 million of term
        loans - B3

      * Senior Implied Rating - Caa2

      * Issuer Rating - Ca

The rating actions are in response to the recapitalization
agreement between ACL and DHC whereby the latter will acquire
100% of the former for cash consideration of $25 million. The
money will partly be applied to ACL's existing bank loans
outstanding. ACL's preferred equity holders will receive cash of
$7 million while management will receive worth $1.7 million of
Danielson common stock.

The assigned ratings reflect ACL continued poor earnings and
still high pro forma leverage. Debt burden remains high. It is
expected that the company's increased lease financing of its
fleet equipment will provide ACT with needed covenant cushion
but the company will continue to be vulnerable to general
economic and business challenges.

ACL did not pay the $15.1 million of interest due the senior
notes on December 31, 2001 due to on-going negotiations with its
lenders and noteholders and has entered into forbearance
agreements with some of them. If the exchange offer and consent
solicitation is not completed by June 15, 2002, the
recapitalization deal provides for the implementation to be done
through a voluntary prepackaged Chapter 11 plan.

American Commercial Lines LLC is an integrated marine
transportation and service company operating approximately 5,100
barges and 200 towboats on the inland waterways of North and
South America. ACL transports more than 70 million tons of
freight annually. ACL also operates marine construction, repair
and service facilities and river terminals. The company is
headquartered in Jefferson, Indiana.

Danielson Holding Corporation is an insurance holding company
with operations on property and casualty insurance, non-standard
and preferred private passenger and commercial automobile,
homeowners' and workers compensation.


ANKER COAL: Commences Debt Workout Talks with Lenders & Trustee
---------------------------------------------------------------
Anker Coal Group, Inc. has begun negotiations with its senior
secured lenders and the trustee for its outstanding bond
obligations to restructure its interest and principal payments.
The Company confirmed that it did not make the scheduled
interest payment of approximately $6.6 million due to its
bondholders on April 1.  Despite the foregoing, the Company
indicated that a majority of the current bondholders have
expressed their intentions to work with Anker to restructure the
bond indebtedness.

Jack Teitz, recently appointed as the Company's President and
Chief Restructuring Officer, indicated that the financial
restructuring will address the Company's outstanding debt and
emphasized that the restructuring process should have minimal
impact on the Company's current level of operations. "Daily
operations of our mining facilities will continue at current
levels of production and shipments to our customers will
continue without interruption," Mr. Teitz said.  Teitz added
that, "we will continue to focus on safety as well as
productivity at each mine location."  Teitz also confirmed that
operations at two of the Company's mines in West Virginia were
curtailed recently due to the current market conditions.

Teitz added that, "While the Company's coal business remains
operationally sound and substantial coal reserves are in place
for the future, historically low prices and a weak economy have
impeded the Company's ability to generate sufficient profits and
the cash flow required to service its current bond debt
obligations."

Anker Coal Group, Inc. and its wholly owned subsidiaries supply
in excess of 6,000,000 tons of coal to a number of electric
utilities and independent power plants primarily in the mid-
Atlantic region.  The Company's mining operations include
surface mines and underground mines located primarily in West
Virginia.  Anker also has facilities in Maryland and
Pennsylvania.


ARCH WIRELESS: Trustee Appoints Additional Members to Committee
---------------------------------------------------------------
The U.S. Trustee appoints these additional members to the
Official Unsecured Creditors' Committee of the chapter 11 cases
of Arch Wireless, Inc.:

      U.S. Bank Trust National Assoc.
      c/o Timothy Sandell
      180 East Fifth Street
      St. Paul, MN 55101
      Phone: (651-244-0713)
      Facsimile: (651-244-5847)

      SBC Communications, Inc.
      c/o David Egan,
      Sr Mgr of Credit & Collections
      722 North Broadway
      Milwaukee, WI 53202
      Phone: (414-227-6624)

      TMP Worldwide, Inc.
      c/o David Rosenzweig, Esq.
      666 Fifth Avenue
      New York, NY 10103
      Phone: (212-318-3000)
      Facsimile: (212-318-3400)

      Bank of New York, as Trustee
      c/o Corey Babarovich, VP
      5 Penn Plaza 13th Floor
      New York, NY 10001
      Phone: (212-896-7154)
      Facsimile: (212-328-7302)

      Crown Castle USA, Inc.
      c/o Noelle DiLoreto
      Staff Attorney
      2000 Corporate Drive
      Canonsburg, PA 15317
      Phone: (724-416-2454)
      Facsimile: (724-416-2353)

      SBA Towers, Inc.
      c/o Pamela Cocalas Wirt, Esq.
      5900 Broken Sound Parkway NW
      Boca Raton, FL 33487
      Phone: (561-226-9395)
      Facsimile: (561-998-3448)

      Wells Fargo Bank Minnesota, National Association
      c/o Shipman & Goodwin, LLP
      Attn: Ira H. Goldman, Esq.
      One American Row
      Hartford, CT 06103
      Phone: (860-251-5820)
      Facsimile: (860-251-5899)

Arch Wireless, Inc. through its subsidiaries, is a leading
provider of wireless messaging and information services in the
United States. The Company filed for chapter 11 protection on
December 6, 2001 in the U.S. Bankruptcy Court for the District
of Massachusetts. Mark N. Polebaum, Esq. at Hale & Dorr LLP
represents the Debtors in their restructuring effort. When the
company filed for protection from its creditors, it listed
$696,449,000 in assets and $2,163,053,000 in debt.

Arch Communications Inc.'s 13.75% bonds due 2008 (ARCH08USR1),
with Arch Wireless Inc. as underlying issuer, are trading
between 0 and 0.25, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ARCH08USR1
for real-time bond pricing.


ASPEON INC: Settles Defaulted Convertible Preferred Shares
----------------------------------------------------------
Aspeon, Inc. (OTC: ASPE) has settled with the holder of the
Company's preferred shares that had been in default. In return
for a cash payment the Company was released from all liabilities
under the Preferred Share Agreement. The transaction will have a
net positive effect on the Company's Balance Sheet of
approximately $19 million. Don Rutherford, CFO, noted that "the
liability represented by these shares has been a major barrier
to resolving the financial challenges the Company has been
facing and the removal of this barrier will give us a much
improved basis for seeking additional financing".

Aspeon Inc. is a leading manufacturer and provider of point-of-
sale (POS) systems and services for the retail and foodservice
markets.  Visit Aspeon at http://www.aspeon.com


BETHLEHEM STEEL: U.S. Trustee Amends Committee Membership
---------------------------------------------------------
Pursuant to Sections 1102(a) and 1102(b) of the Bankruptcy Code,
United States Trustee for Region 2, Carolyn S. Schwartz, amends
the membership of the Official Committee of Unsecured Creditors,
in Bethlehem Steel Corporation's chapter 11 cases, after
Wilmington Trust Company resigned.  Ms. Schwartz appoints Wells
Fargo Bank Minnesota, N.A., as replacement.  The Committee is
now comprised of:

       U.S. Bank Trust, National Association
       180 E. Fifth Street, Suite 414
       St. Paul, MN 55101
       Attn: Kenneth Hoffman, Vice President
       (651) 244-8378
       Counsel:
       King & Spalding
       1185 Avenue of the Americas
       New York, New York 10036
       Attn: Frank Ciaccio, Esq.
       (212) 556-2285

       HSBC Bank USA
       10 E. 40th Street, 14th Floor
       New York, New York 10016
       Attn: Russ Paladino
       (212) 525-1324
       Counsel:
       Kelly Drye & Warren
       101 Park Avenue
       New York, New York 10178
       Attn: Karen Ostad, Esq.
       (212) 808-7800

       National City Bank
       629 Euclid Avenue, Suite 635
       Cleveland, Ohio 44114
       Attn: Kevin Duffy, Esq.
       (216) 222-8013

       Iron Ore Company of Canada
       1010 Shebrooke Street West, Suite 2500
       Montreal, Quibec H3A2B7
       Attn: Keith Edridge
       9418) 968-7677
       Counsel:
       Jones, Day, Reavis & Pogue
       77 West Wacker, Suite 3500
       Chicago, Illinois, 60601
       Attn: Michelle Morgan Harner, Esq.
       (312) 782-3939

       Electronic Data Systems Corporation
       5400 Legacy Drive
       Plano, TX 75024
       (972) 605-5500
       Counsel:
       Simon, Warner & Doby, LLP
       301 Commerce, Suite 1700
       Fort Worth, TX
       Attn: Michael D. Warner Esq., or David T. Cohen, Esq.
       (817) 810-5250

       DTE Burns Harbor, LLC
       414 South Main Street, Suite 600
       Ann Arbor, MI 48104
       (734) 302-4894
       Counsel:
       Hunton & Williams
       Riverfront Plaza
       951 East Blvd Street
       Richmond, VA 23219-4074
       Attn: Peter Partee, Esq.
       (804) 788-8473

       United Steelworkers of America, AFL-CIO, CLC
       Five Gateway Center
       Pittsburgh, PA 15222
       (412) 562-2400
       Counsel:
       Cohen, Weiss & Simon, LLP
       330 West 42nd Street, 25th Floor
       New York, New York 10036
       Attn: Bruce H. Simon, Esq.

       Pension Benefit Guaranty Corporation
       Corporate Finance and Negotiations Dept.
       1200 K St., N.W.
       Washington, DC 20005
       Attn: Kartar S. Khalsa
       (202) 326-1070 ext. 3655

       Wells Fargo Bank Minnesota, N.A.
       Corporate Trust Services
       MAC N9303-120
       Sixth & Marquette
       Minneapolis, MN 55479
       Attn: Gavin Wilkinson
       (612) 667-3777
(Bethlehem Bankruptcy News, Issue No. 15; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


CEDARA SOFTWARE: Closes CDN$1M Private Placement with Toyo Corp.
----------------------------------------------------------------
Cedara Software Corp. (TSX: CDE/Nasdaq: CDSW) has closed a
private placement of convertible debentures for approximately
Cdn$1.1 million with Toyo Corporation, one of Japan's leading
trading Companies. Toyo, who specializes in bringing advanced
technological imports from around the globe to the Japanese
marketplace, distributes Cedara's line of viewing, reading and
image management applications, image archives, and various
software technology components related to image management.

The convertible debentures bear interest of 5% per annum and
mature in five years. Under the terms of the financing, the
convertible debentures can be converted into common shares of
the Company, at a conversion price of Cdn.$2.50 per share.

Cedara intends to use the funds to strengthen the Company's
working capital position.

In addition to the Cdn$1.1 million private placement, Toyo
purchased Cdn$0.5 million of convertible debentures from
existing debenture holders, bringing Toyo's total investment in
convertible debentures of the Company to approximately Cdn$1.6
million.

Arun Menawat, President and COO of Cedara said, "This is a
strong note of confidence in Cedara by a business partner who
understands the Company and its market potential. We look
forward to working with Toyo to expand our business in the
Japanese market."

Toyo Corporation based in Tokyo brings world-class technologies
into Japan. As a leading trading company, Toyo specializes in
the import of advanced technologies from the Americas and
Europe, bridging people and technology. Through highly qualified
engineering personnel, Toyo also uniquely delivers fully
integrated technical service programs. Toyo has recently been
enhancing and expanding its penetration in the Japanese medical
market and has already established a reputation for being the
best DICOM solution provider.

Mr. Watanabe, Managing Director, said, "We are very pleased to
have this opportunity to invest in Cedara which is a leading
medical imaging software company. Ours is a very complimentary
partnership that contributes to the modernization of Medical
Information Technology in Japan, which is one of the
Government's key initiatives over the coming years."

Cedara Software Corp., based in the greater Toronto area, is a
leading medical imaging software developer. Cedara serves
leading healthcare solution providers and has long-term
relationships with companies such as Cerner, GE, Hitachi,
Philips, Siemens, and Toshiba. Cedara offers its OEM customers a
rich array of end-to-end imaging solutions. The Cedara
Foundation Technology supports Windows and Unix. This
continuously enhanced imaging software is embedded in 30% of
MRIs sold today. Cedara offers components and applications that
address all modalities and aspects of clinical workflow
including: 3D imaging and advanced post-processing; volumetric
rendering; disease-centric imaging solutions for cardiology; and
streaming DICOM for web-enabled imaging. Cedara's picture
archiving and communications systems (PACS) solutions, Cedara
I-View(TM), Cedara I-Read(TM) and Cedara I-Report(TM) are sold
via systems integrators and distributors around the world.
Through its Dicomit Dicom Information Technologies Inc.
subsidiary, Cedara provides ultrasound and DICOM connectivity
solutions to OEM customers.

As previously reported, Cedara Software's upside-down second
quarter balance sheet shows a total shareholders' equity deficit
of about Cdn$100 million.


CHIEF CONSOLIDATED: Begins Talks to Restructure Accounts Payable
----------------------------------------------------------------
Chief Consolidated Mining Company (NasdaqSC:CFCM) reported that
its largest stockholder has agreed to waive a mandatory
redemption right associated with the shares of convertible
common stock owned by the stockholder.

Dimeling, Schreiber & Park, in its capacity as general partner
of Dimeling, Schreiber & Park Reorganization Fund II, LP, agreed
to cancel its right to require Chief Consolidated to purchase
all or part of the convertible common stock acquired by the Fund
in 1999. John Henderson, Secretary and Treasurer of Chief,
stated, "This change immediately strengthens our balance sheet
by removing approximately $5.0 million in stated liabilities and
reclassifying that amount to stockholders equity. This is a
particularly positive development as Chief refocuses its
operations on its real estate assets."

"With the suspension of our mining operations, we have turned
our attention to maximizing the real estate assets that Chief
owns," stated Rick Schreiber, a member of the Chief Board of
Directors. "We are currently in the process of gathering the
necessary experts to advise us on the value of the real estate
assets. Of course, while we are focusing our efforts at this
time on our real estate assets, we are not abandoning our
valuable mining interests and we may consider joint venture
proposals for further exploration or mining of our properties in
the future," said Mr. Schreiber.

Chief also reported that, with the suspension of its mining
operations, Mr. Andre Douchane has resigned as President and
Chief Executive Officer. In addition, Messrs. Eugene Cook,
Robert Poll and Thomas Bruderman have resigned as directors.
Chief further reported that it is in discussions with some
creditors to restructure its accounts payable and is also in
discussions with potential investors to raise capital. There can
be no assurance, however, that such new financing will be
available on acceptable terms, or that Chief will be able to
restructure its accounts payable. In the event that Chief is
unable to obtain such additional financing or restructure its
financial obligations, there would be a material and adverse
effect on its financial condition, to the extent that a
restructuring, sale or liquidation could be required in whole or
in part.


CLARUS: Kanders Nominees Call for Sale or Liquidation of Assets
---------------------------------------------------------------
Warren B. Kanders, Burtt R. Ehrlich and Nicholas Sololow, who
are seeking election to three of seven Board seats of Clarus and
collectively own approximately 5.6% of the Clarus stock, stated
in a letter to Clarus stockholders that they believe that Clarus
management cannot be trusted to deliver stockholder value.

Warren B. Kanders stated:  "Steven Jeffery, Chairman of the
Board, C.E.O. and President of Clarus, is hopelessly conflicted
between his personal desire to retain control of Clarus and his
fiduciary duty to stockholders.  Although the Kanders Nominees
have vastly superior experience in completing transactions that
enhance stockholder value, Mr. Jeffery seems intent on spending
the last of the $114 million of stockholders' money that he
hasn't already squandered to keep us off the Board."

Mr. Kanders continued:  "If management has the superior
technology expertise they claim, why did they hire The Chasm
Group, of which Todd Hewlin, a management nominee to Clarus'
Board, is a Managing Director, to a lucrative consulting
agreement?  And if management had a plan for a strategic
transaction last October, as they have repeatedly claimed, why
did they wait to announce it until April 24, 2002, only after
our letters demanding that Clarus retain a recognized investment
banking firm to evaluate a potential sale of the Company?"

Mr. Kanders observed that a spokesman for Clarus management
recently stated to The Deal.com:  "Acquisition is high on this
list, or it could be a merger of equals, or we could continue to
pursue the business strategy we have if the market conditions
are not right."

Responding, Mr. Kanders concluded:  "Apparently management
doesn't have a clue; they have no commitment to completing any
transaction to enhance stockholder value.  We are the only
nominees that Clarus stockholders can trust, who have the
independence, the expertise and the commitment to push
management to sell or liquidate the Company on terms that are
most favorable to all Clarus stockholders as quickly as possible
after the Annual Meeting of Stockholders."


EVTC INC: Takes-Over Ownership of Innovative Waste Technologies
---------------------------------------------------------------
EVTC Inc. (OTCBB:EVTC) said that it completed that previously
announced acquisition of 100% of the ownership interests of
Innovative Waste Technologies LLC from its two owners, Guy L.
Harrell and Gary A. Tipton, in exchange for a combination of
EVTC's common stock and stock options. As a result of the
purchase, Messrs. Harrell and Tipton acquired a significant
controlling interest in EVTC and were named directors to EVTC's
board.

The acquisition and change in control was consented to by EVTC's
senior lender. Concurrently with the granting of the consent,
EVTC and its senior lender entered into an agreed form of court
order in the 95th Judicial District Court of Dallas County,
Texas, providing, in part, for the structured sale of certain
assets of EVTC's affiliated companies over the next 60 days for
the benefit of the senior lender.

In related actions, John D. Mazzuto tendered his resignation as
EVTC's chief executive officer and each of George Cannan, as
chairman, and Robert J. Casper and John Stefiuk, as members of
EVTC's board, submitted their resignations, effective as of the
close of business on May 10, 2002. The remaining two board
members, Gary A. Tipton and Guy L. Harrell (who assumes the role
of chairman), expect to appoint three new members to fill the
resulting vacancies in the board.

Guy Harrell, the newly elected CEO and chairman stated, "With
the acquisition of IWT formally closed, we can complete the
integration of IWT's business operations and management with
EVTC having been previously commenced. In addition, management
can more accurately review and assess EVTC's existing
obligations and the strengths of its assets and market position.
We look forward to building upon the newly acquired business of
IWT and expanding its markets."

Innovative Waste Technologies holds patents, patent applications
and licenses for the treatment of wastewaters and other
contaminated waste streams. IWT's technologies provide for the
treatment of contaminated wastewater through a unique electrical
process believed to be more economical and environmentally
friendly than other methods presently available in a market
having an estimated value of over 60 billion dollars annually.
Industries to be targeted by EVTC include the oil and gas
production facilities and refineries, major port facilities, all
marine vessel-related wastewater producers, industrial
wastewater producers, environmental remediation projects, as
well as other applicable industries.

As reported in the March 14, 2002 edition of Troubled Company
Reporter, EVTC Inc. is subject to delisting from Nasdaq for
violating the Nasdaq market capitalization listing requirement.


ELECTRIC LIGHTWAVE: Fails to Meet Nasdaq Listing Requirements
-------------------------------------------------------------
Citizens Communications (NYSE: CZN) and its subsidiary Electric
Lightwave, Inc. (NASDAQ: ELIX) each reported financial results
for the quarter ended March 31, 2002.

For the first quarter of 2002 consolidated revenue was $679.3
million; operating income from continuing operations was $100.4
million; Adjusted EBITDA from continuing operations was $290.2
million; capital expenditures totaled $69.6 million; Free Cash
Flow was $208.9 million; consolidated net income was $83.2
million; free cash flow per share was 75 cents and net income
per share was 30 cents.

Citizens' consolidated results for the first quarter of 2002
include a $309.2 million pre-tax gain on the sale of the
company's water utilities; a non-cash write off of ELI's
goodwill of $39.8 million; the write down of Global Crossing
receivables of $7.8 million as a result of Global Crossing
filing for bankruptcy; a non-cash charge of $49.7 million
resulting from the decline in value of the company's investment
in Adelphia Communications; and restructuring and other expenses
of $3.9 million related to the company's closing of its
Sacramento call center and its operations support center in
Plano, Texas.

                Telecommunications - Incumbent Local
                     Exchange Carrier Segment

First quarter 2002 revenue from the company's ILEC Segment was
$508.0 million, up $220.7 million or 77 percent from $287.3
million in the first quarter of 2001. The June 2001 acquisition
of Frontier accounted for $207.2 million of the increase.
Excluding the impact of the Frontier acquisition, the revenue
increase was $13.5 million or five percent above the first
quarter of 2001, primarily related to continued increases in
penetration of enhanced services and data products.

Access lines at March 31, 2002 totaled 2,478,600, a 79 percent
increase from 1,387,300 lines at March 31, 2001. Excluding the
impact of the Frontier acquisition, access lines were unchanged
from March 31, 2001. In addition to its access line count, the
company added more than 11,000 DSL subscribers during the first
quarter, compared to virtually no additions during the start up
phase in the first quarter of 2001.

The company continues to see accelerated growth in DSL lines as
first quarter net additions of 11,000 subscribers exceeded
fourth quarter net additions of 9,100 subscribers by 21 percent.

Adjusted EBITDA for the first quarter of 2002 was $264.3
million, an increase of $115.3 million or 77 percent compared to
the year-ago quarter. The company's Adjusted EBIDTA margin
continues to improve ahead of targets. Sequentially Adjusted
EBIDTA increased $10.4 million from the fourth quarter of 2001
and the Adjusted EBIDTA margin increased to 52 percent as
compared to 49.7 percent in the fourth quarter of 2001. These
margins reflect an ongoing focus on execution, ongoing success
in the integration of Frontier and the efficiencies achieved
from the combination.

ILEC Segment operating income was $92.2 million, up 47 percent
from $62.7 million in the first quarter of 2001. Operating
income for the first quarter of 2002 reflects charges of $13.8
million and accelerated depreciation of $11.9 resulting from the
closing of the company's facilities in Plano, Texas, and
Sacramento, and operating income for the first quarter of 2001
reflects $5.5 million of acquisition assimilation expenses
associated with our completed acquisitions.

For the 2002 quarter the ILEC Segment had capital expenditures
of $55.8 million compared to $76.6 million of capital
expenditures for the quarter ended March 31, 2001. This decrease
relates principally to increased scrutiny of discretionary
capital projects in the current economic environment as well as
to normal first quarter seasonality.

Free Cash Flow for the 2002 quarter was $194.7 million versus
$78.1 million in the fourth quarter of 2001 and $72.5 million in
the year ago quarter. The increase in Free Cash Flow was related
to the increase in EBITDA and the decline in capital
expenditures described above.

             Competitive Local Exchange Carrier Segment;
               Electric Lightwave, Inc. (NASDAQ: ELIX)

2002 first-quarter revenue from ELI totaled $48.2 million,
operating loss was $17.2 million, EBITDA was $2.5 million, and
capital expenditures were $4.2 million. EBITDA includes the
effect of a $2.1 million one-time favorable item.

ELI's Class A Common Stock is currently traded on the Nasdaq
National Market System, but does not meet minimum bid price and
market value of public float requirements for continued listing.
The stock is expected to be delisted from the Nasdaq National
Market in the near future.

                       Public Services Segment

The gas and electric segments accounted for $124.1 million of
first-quarter 2002 consolidated revenue, $25.2 million in
EBITDA, $9.6 million of capital expenditures and $15.7 million
of free cash flow.

EBITDA is operating income plus depreciation and amortization.
Adjusted EBITDA is EBITDA plus the write down of Global Crossing
receivables and restructuring expenses. Free Cash Flow is EBITDA
less capital expenditures. EBITDA is a measure commonly used to
analyze companies on the basis of operating performance. EBITDA
is not a measure of financial performance nor is it an
alternative to cash flow as a measure of liquidity and may not
be comparable to similarly titled measures of other companies.

Citizens Communications serves 2.5 million access lines in 24
states. Citizens owns 85 percent of Electric Lightwave, Inc.
(NASDAQ:ELIX), a facilities-based, integrated communications
provider that offers a broad range of services to
telecommunications-intensive businesses throughout the United
States.


ENRON CORP: Seeks Court's Approval of Risk Management Agreements
----------------------------------------------------------------
Enron Corporation and its debtor-affiliates seek the Court's
authority to continue entering into, rolling over, adjusting,
modifying and settling limited risk management transactions for
the sole purpose of preserving the value of the Debtors' current
open physical and financial commodities contracts.  Subject to
any required approval or consent of the DIP Lenders, the Debtors
also ask Judge Gonzalez that the order authorize all such other
actions necessary or appropriate to implement, execute, and
perform such transactions, including, but not limited to,
posting letters of credit, entering into escrow agreements,
opening and funding of escrow accounts, posting collateral,
prepayment and delivery and settlement.

According to Melanie Gray, Esq., at Weil, Gotshal & Manges LLP,
in New York, the Debtors engaged in trading activities in which
they entered into physical and financial contracts related to
Commodity Products, such as commodities contracts, forward
contracts, swap agreements, securities contracts, caps, floors,
collars futures, contracts, repurchase agreements and options
relating to any of the contracts.  The Debtors also entered into
certain physical and financial risk management transactions to
manage exposure to price volatility of the Commodity Products in
order to preserve the value of the Trading Contracts, Ms. Gray
adds.

A number of Open Trading Contracts are extremely valuable assets
to the Debtors' estates.  However, Ms. Gray relates, these Open
Trading Contracts are exposed to future market price
fluctuations that are volatile and difficult to predict.  Since
the Petition Date, Ms. Gray says, the Debtors have assessed the
need to continue entering into limited Risk Management
Transactions for the sole purpose of preserving the value of the
Open Trading Contracts.  "Without the ability to enter into
these Risk Management Transactions, the value of the Open
Trading Contracts could substantially diminish, depending upon
price movements over which the Debtors have no control," Ms.
Gray explains.

Ms. Gray emphasizes that the Debtors are not seeking to resume
their pre-petition trading operations.  Rather, Ms. Gray says,
the Debtors are attempting to preserve the value of the Open
Trading Contracts for their estates by attempting to minimize
the impact of price movements.  Ms. Gray tells the Court that
the Debtors are working with the Creditors' Committee to develop
reasonable parameters for the Risk Management Transactions.  The
Debtors promise they will not enter into Risk Management
Transactions that fall outside the parameters agreed to with the
Creditors' Committee, without seeking further Court order.
Accordingly, Ms. Gray says, the Chapter 11 estate that owns the
Open Trading Contract will pay for each Risk Management
Transaction and Ancillary Transaction. (Enron Bankruptcy News,
Issue No. 26; Bankruptcy Creditors' Service, Inc., 609/392-0900)


ENRON CORP: Liquids Unit Intends to Sell Natural Gas Inventories
----------------------------------------------------------------
Enron Gas Liquids Inc. (doing business as Enron Clean Fuels
Company) and Enron Liquid Fuels Inc. (doing business as Enron
Petrochemicals Company) intend to sell certain petrochemicals
and other liquids inventories.

Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, in New
York, relates that the Enron Liquids Companies traded, prior to
the Petition Date, various types of natural gas liquids
(including methanol, ethane, propane, isobutane, normal butane,
natural gasoline) and petrochemicals such as styrene.  Mr. Rosen
informs Judge Gonzalez that the Enron Liquids Companies have
stopped purchasing the Natural Gas Liquids since it filed for
bankruptcy. The Enron Liquids Companies currently hold various
quantities of NGLs:

            Product          Quantity in Barrels
            -------          -------------------
            Methanol                 54,025
            Ethane                   16,359
            Propane                  80,314
            Isobutane                   974
            Normal Butane               663
            Natural Gasoline          3,392

According to Mr. Rosen, all of the NGL Inventories were
purchased on the open market for the sole purpose of trading
activity and the profit associated with it.  "The NGL
Inventories are held in various storage facilities across the
United States and operators of these storage facilities may have
lien rights on the quantities of the NGL Inventories they hold,"
Mr. Rosen tells the Court.

The Enron Liquids Companies believe that Court approval for the
sale of the NGL Inventories is not necessary because the
transactions are in the conduct of the ordinary course of
business.  However, the Enron Liquids Companies are seeking the
Court's authority because they intend to liquidate all of the
NGL Inventories and in anticipation that some purchasers may
require formal approval by the Court.

Mr. Rosen relates that the Enron Liquids Companies plan to sell
the NGL Inventories in the spot market as they estimate that the
sale of the NGL Inventories at auction would result in a lower
return due to timing issues and market volatility during the
time period between the submission of bids and the actual
transfer of the NGL Inventories.

Based on market indications during the week of April 10, 2002,
Mr. Rosen reports that the portfolio of NGL Inventories is
valued at roughly $2,000,000 net of storage costs.  Clearly, Mr.
Rosen asserts, systematic selling of the NGL Inventories into
the spot market, as opposed to a one-time auction, will maximize
the value of the NGL Inventories.

Furthermore, the Enron Liquids Companies are also seeking the
Court's authority to use brokers if doing so would maximize the
returns.  Typically, Mr. Rosen relates, the Enron Liquids
Companies pay a commission to brokers who sell NGL Inventories
in the spot market.  "The current commission rate to sell NGLs
in the spot market is $0.001 per gallon," Mr. Rosen notes.
Based on these commission rates, the Enron Liquids Companies
estimate that complete liquidation of NGL Inventories will cost
$6,200 in brokerage fees, which is less than 0.31% of the net
value of the Inventories.  Should Enron Liquids Companies chose
to use one or more brokers for the sale of the NGL Inventories;
Mr. Rosen contends that the Court should authorize the payment
for standard broker fees.

For those Storage Operators that hold valid liens, Mr. Rosen
says, the pre-petition storages costs associated with the NGL
Inventories will be paid in accordance with the Warehousemen
Order while post-petition storage costs will be paid as
administrative expenses or, the lien will attach to the proceeds
from the sale of the NGL Inventories. (Enron Bankruptcy News,
Issue No. 26; Bankruptcy Creditors' Service, Inc., 609/392-0900)


EXIDE TECHNOLOGIES: Look for Schedules & Statements by June 13
--------------------------------------------------------------
Exide Technologies and its debtor-affiliates sought and obtained
entry of an order extending by 30 days, for a total of 60 days
from the petition date, the time within which the Debtors are
required to file their schedules of assets and liabilities, list
of equity security holders, schedules of executory contracts and
un-expired leases and statements of financial affairs.

Laura Davis Jones, Esq., at Pachulski Stang Ziehl Young & Jones
P.C. in Wilmington, Delaware, relates that the Debtors have
approximately 20,000 creditors (including current and former
employees). Given the size and complexity of their businesses
and the fact that certain pre-petition invoices have not yet
been received or entered into the Debtors' financial accounting
systems, the Debtors have not had the opportunity to gather the
necessary information to prepare and file the Schedules and
Statements. At this time, the Debtors are filing a list of
creditors without claim amounts.

Ms. Jones submits that the conduct and operation of the Debtors'
businesses require the Debtors to maintain voluminous books and
records and a complex accounting system. The Debtors' employees
are in the process of assembling the information necessary to
complete the Schedules and Statements. Extensions, such as the
one sought in this Motion, are routinely granted in large
Chapter 11 cases. By granting an extension, the accuracy of the
Schedules and Statements that will be filed will be greatly
enhanced.

Due to the number of creditors, the complexity of Debtors'
businesses, and the diversity of their operations and assets,
Ms. Jones believes that the 15-day automatic extension of time
to file the Schedules and Statements, will not be sufficient to
permit completion of the Schedules and Statements. Further, the
Debtors have numerous foreign subsidiaries and affiliates that
did not file for relief under Chapter 11 of the Bankruptcy Code.
Much of the information and documentation evidencing the
Debtors' assets and liabilities, creditors and contracts are
consolidated with that of the Non-Debtor Foreign Entities. It
will take a substantial amount of time to clearly identify and
separate which information relates to the Debtors and not to the
Non-Debtor Foreign Entities. (Exide Bankruptcy News, Issue No.
3; Bankruptcy Creditors' Service, Inc., 609/392-0900)

                          *   *   *

DebtTraders reports that Exide Technologies' 10% bonds due 2005
(EXIDE2) are quoted at a price of 14.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=EXIDE2for
real-time bond pricing.


EXODUS: Court Okays Deloitte & Touche's Engagement as Advisors
--------------------------------------------------------------
Exodus Communications, Inc., and its debtor-affiliates obtained
permission from the Court to upgrade the employment of Deloitte
and Touche LLP from ordinary course professionals to formally
retained professionals, nunc pro tunc to February 1, 2002.

Deloitte is expected to:

A. Assist the Debtors with the preparation and filing of various
      sales, real and personal property and income tax returns;

B. Assist the Debtors in preparing for audits by taxing
      authorities;

C. Assist the Debtors in recovery of foreign indirect taxes in
      various jurisdictions;

D. Provide assistance to Debtors' counsel regarding the tax
      impact of the sale of assets and stock of certain of
      Debtors' foreign affiliates;

E. Assist the Debtors' finance department in business process
      control reviews;

F. Assist the Debtors, as agreed by Deloitte, and pursuant to
      separate engagement letters, with the preparation and
      filing of additional various sales, real and personal
      property and income tax returns, in controlling and
      managing its property tax burden and reportable taxable
      property and by providing such other additional tax and
      related consulting services as the Debtors may, from time
      to time, require; and

G. Assist the Debtors, as agreed by Deloitte, and pursuant to
      separate engagement letters, in obtaining various sales,
      real and personal property, value added and income tax
      refunds in the United States and in various foreign
      jurisdictions, and by providing such other additional tax
      and related consulting service as the Debtors may, from
      time to time, require.

As previously reported, the Debtors will be retaining Deloitte
on a contingent fee basis in obtaining refunds on various taxes,
which will be based on a percentage of the refunds obtained by
the Debtors as a result of Deloitte's contingent services. Under
such an arrangement, Deloitte will not realize any significant
pecuniary benefit unless and until the Debtors successfully
receive a refund based on Deloitte's services.

In addition, Deloitte will be paid by the Debtors on an hourly
basis:

            Partners                   $350 to $525
            Senior Managers            $300 to $400
            Managers                   $175 to $350
            Senior Accountants         $150 to $225
            Accountant Consultants     $150 to $225
            Staff Accountants          $100 to $150
            Staff Consultants          $100 to $150
            Paraprofessionals           $50 to $100
(Exodus Bankruptcy News, Issue No. 18; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


FFC HOLDING: Taps Resilience Capital to Assist in Asset Sale
------------------------------------------------------------
FFC Holding, Inc., and its debtor-affiliates sought and obtained
authority from the U.S. Bankruptcy Court for the District of
Delaware to hire Resilience Capital Advisors LLC as their
investment bankers to assist with the anticipated sale of
substantially all of Fredom Forge's operating assets.

As investment bankers, Resilience Capital will:

      a) advise the Debtors on the financial aspects of the
         strategic sale transaction that it is negotiating with
         Farrel & Company and Citicorp Capital Investors, Ltd. or
         a second party that has submitted a written expression
         of interest;

      b) assist the Debtors in all aspects of soliciting
         proposals including:

           i) identifying alternative prospective purchasers for
              the assets;

          ii) preparing appropriate offering materials for use
              with such Competing Bidders;

         iii) organizing and maintaining a "data room" to
              facilitate due diligence review by Competing
              Bidders;

          iv) assisting the Debtors in meetings with and
              presentations to Competing Bidders; and

           v) structuring business procedures to govern the
              solicitation and consideration of Competing Bids.

      c) analyze and assist the Debtors in evaluating the
         financial aspects of any Competing Bids;

      d) assist the Debtors in conducting an auction for its
         strategic assets; and

      e) provide expert testimony that may be required by the
         Court.

The Debtors agree to pay Resilience Capital:

      a) a fixed monthly cash advisory fee of $50,000 per month
         during the term of the engagement; and

      b) a Transaction Fee payable in the event the sale of the
         Freedom Forge Assets is successfully completed:

         -- if the Debtors executes an agreement with one of the
            Existing Offerors to act as a stalking horse bidder,
            the Debtors shall pay Resilience Capital a cash fee
            equal to 3% of that portion of the Transaction Value
            that exceeds the amount of the Stalking Horse Offer;

         -- if the Debtors do not execute an agreement with one
            of the Existing Offerors to act as a stalking horse
            bidder, the Debtors shall pay Resilience Capital a
            cash fee of 1.75% of the Transaction Value.

FFC Holding, Inc., filed for Chapter 11 protection on July 13,
2001.  Christopher James Lhulier, Esq., and Laura Davis Jones,
Esq., at Pachulski Stang Ziehl Young represent the Debtors in
their restructuring efforts.


FLAG TELECOM: Reach Wants Asia Unit to Promptly Act on Contracts
----------------------------------------------------------------
Reach Ltd. asks the Court to establish a briefing schedule and
to hold an expedited hearing to consider its Motion to compel
FLAG Asia to immediately assume or reject the Reach Agreements.

The Reach Agreements consist of the Development Agreement and
other related and reinforcing contracts signed between Reach
Ltd., Reach Cable Networks Ltd., and Reach Networks KK (Japan)
and FLAG Asia Ltd.  These Agreements were to develop and
construct an undersea cable system that will provide city-to-
city linkage between Japan, Korea, Hong Kong and Taiwan. The
Agreements govern the overall arrangements between Reach and
FLAG Asia in the operation of the FLAG North Asia Loop, or FNAL,
which requires landing stations in each of the four Asian cities
and countries.

Stephen J. Quine, Esq., at Clifford Chance Rogers & Wells LLP,
says Reach's interests are prejudiced and adversely impacted by
FLAG Asia's bankruptcy filing. Reach has made commitments to its
customers and needs assurance that it will be able to honor
those commitments and fulfill its contractual obligations. Also,
Mr. Quine says, Reach is losing out to competitors on potential
additional business opportunities due to uncertainty about FLAG
Asia's pending decision whether to honor its pre-petition
obligations to both Reach and Alcatel.

Reach offers to defer for 30 days FLAG Asia's obligation to cure
pre-petition monetary defaults under the Agreements.  This would
be so as to give FLAG Asia time to negotiate with its parent,
FLAG Telecom Holdings Ltd., and its creditors additional funding
or time to seek an alternate funding source.

Mr. Quine says Reach is willing to work with FTHL so long as
FLAG Asia assumes the Agreements immediately and not at some
later date.

Typically, Mr. Quine says, Courts look to these factors in
determining whether it is appropriate to compel a Debtor to
expedite its decision to assume or reject an executory contract:

    (a) the nature of the interest at stake;

    (b) the balance of the hardship between the Debtor and the
        non-Debtor party to the executory contract;

    (c) whether compelling expedited review would adversely
        impair the Debtor's ability to reorganize successfully;

    (d) whether the Debtor is current with its post-petition
        obligations and whether it is possible that the Debtor
        would be able to assume contract;

    (e) complexity of case; and

    (f) the nature of the contract at issue and its relationship
        to other assets of the Debtor.

Mr. Quine says Reach will suffer immediate and substantial harm
if the Agreements are not assumed or rejected immediately. For
instance, due to FLAG Asia's failure to perform its obligations,
Reach received notice from Korea Telecom, the owner and operator
of the landing station in Korea, that FLAG Asia was in default
and would continue to be so.  Korea Telecom said that it would
shortly stop all work and turn power off regardless of the
bankruptcy proceedings in the United States.

In addition, delay will only serve to impair, rather than
promote FLAG Asia's reorganization efforts.

Mr. Quine says that Reach is entitled to receive assurances that
FLAG Asia can honor and perform all maintenance functions with
respect to the FNAL. It needs assurance that FLAG Asia will
maintain adequate insurance coverage, secure and preserve the
FNAL and comply with its obligations under the Agreements.

In the meantime, Reach asks the Court to preclude FLAG Asia from
issuing acceptance certificates for the FLAG West Asia Cable
System, or FWACS.

Reach asserts that it and FLAG Asia have title over
substantially all of FWACS, a claim shared by FLAG Asia. On that
basis, FLAG Asia issued a provisional acceptance certificate on
May 2, 2002 to Alcatel, apparently without the knowledge of
Reach. Mr. Quine says that this certificate violates the rights
of Reach under the Development Agreement because it came out
before the design and technical specifications for the system
were fully completed. (Flag Telecom Bankruptcy News, Issue No.
7; Bankruptcy Creditors' Service, Inc., 609/392-0900)


FORTRESS GROUP: Continues to Review Options Including Asset Sale
----------------------------------------------------------------
The Fortress Group, Inc. (Nasdaq: FRTG), a regional homebuilder,
announced results for the first quarter ended March 31, 2002.
This year's first quarter results from continuing operations
include a $780,000 non-cash impairment charge.

      Summary of Selected First Quarter Financial Results (A)
    (unaudited, dollars in thousands except per share amounts;
              new orders and home closings in units)

                           For the Three Months Ended March 31,

                           2002             2001         Change
                           ----             ----         ------
     Revenues              $61,286         $41,157        +48.9%

     Gross profit          $10,627          $7,891        +34.7%

     Gross profit margin     17.3%           19.2%        -190bp

Net income (loss) from
continuing operations, before
discontinued ops and
extraordinary item           $592           $(270)          N/M

EBITDA from continuing
   operations               $5,216          $2,386       +118.6%

     EBITDA margin            8.5%            5.8%        +270bp

(Loss) per diluted share from
     continuing operations   $(0.02)         $(0.30)          N/M

     New Orders                264             366        -27.8%

     Home closings             246             175       + 40.6%

      (A) All results included in this chart represent results
          from continuing operations.  2001 results have been
          restated to take into account the effect of the
          adoption of SFAS 144 in October 2001.

The Company's results from continuing operations include the
results of operations from the Company's subsidiaries, The
Genesee Company (Western Region), Wilshire Homes (Texas Region),
and Fortress Mortgage as well as all corporate costs.

Impairment charges for the first quarter were $780,000 and
reflect a reduction in the carrying value of 97 lots in our
Austin market that have been re-classified as inventory held for
sale.  Contracts are pending for the sale of these lots.  The
impairment charges had no cash impact.

                        Extraordinary Item

Included in the Company's net income for the quarter ended March
31, 2002 is an extraordinary income item of $72,000 related to
the early extinguishment of debt in connection with the purchase
of $9.3 million (face value) of the Company's Senior Notes
during the quarter.  This gain had no cash impact and is shown
net of applicable income taxes.

                Financial Statement Presentation
                   of Discontinued Operations

The Company's financial statements reflect the effect of
adopting Financial Accounting Standards Board Statement No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets
(Statement), which was issued in October 2001.  Under this
Statement, the Company has reported the results of discontinued
and continued operations separately. Consequently, in
conjunction with the restructuring plans implemented in 2001 the
Company has included in continuing operations only those
operations that are part of the Company's active and ongoing
operations.  Included in net income from continuing operations
is an impairment charge of $780,000 representing an adjustment
to the carrying value of land currently held for sale in our
Austin, Texas market.  The operating results of subsidiaries
that have been sold and the gain or loss on the sale of these
operations are reported net of income taxes as discontinued
operations.  Prior period results have been restated to provide
comparability with the current presentation.  The subsidiaries
included in discontinued operations are Brookstone Homes,
Fortress Homes of Florida, Whittaker Homes, Christopher Homes,
Quail Homes, Galloway Homes, Sunstar Homes and Iacobucci Homes.

As disclosed on February 21, 2002 the Company agreed to sell its
Pennsylvania-based homebuilding operations, Iacobucci Homes,
operating in Philadelphia, PA and Atlantic City, NJ.  Settlement
under this agreement of sale was completed on February 28, 2002.

                            Outlook

The Company continues to explore alternatives which may include
refinancing the remaining obligations, continued open market
repurchases and/or the sale of additional assets in order to
repay the Senior Notes obligations on or before its maturity
date.  No assurances can be given that the Company will be able
to refinance or repay the remaining Senior Notes. During fiscal
2001 the Company purchased $57.4 million of these Notes.  To
date in 2002 the Company has purchased an additional $9.3
million, leaving an amount currently outstanding of $33.3
million.

As the Company has previously disclosed, it will continue to
explore strategic alternatives including, among other things, a
sale of its other core divisions and/or a sale of all or
substantially all of the Company's assets or its equity
securities.

The Fortress Group is a regional homebuilder, building single-
family homes for first-time, move-up and luxury homebuyers in
five of the nation's regional housing markets.  The Company's
homes are marketed under the names of its operating
subsidiaries: The Genesee Company (Denver and Ft. Collins,
Colorado and Tucson, Arizona), and Wilshire Homes (Austin and
San Antonio, Texas). Fortress Mortgage, Inc., a wholly owned
subsidiary of The Fortress Group, Inc., provides permanent loan
financing to purchasers of The Fortress Group's homes through a
variety of conventional and government-backed financing
programs.  These mortgage programs are available through branch
offices located in the regional markets served by The Fortress
Group's homebuilding subsidiaries.


GLOBAL CROSSING: Former Employees Seek Committee Appointment
------------------------------------------------------------
Pursuant to 11 U.S.C. Section 1102(a)(2), the Ad Hoc Committee
of Former Global Crossing Employees asks the Court to direct the
United States Trustee to appoint an Official Committee of Former
Employees in the Debtors' Chapter 11 cases.

Michael T. Conway, Esq., at Lazare Potter Giacovas & Kranjac LLP
in New York, New York, relates that as of the Petition Date, the
Debtors claimed to employ approximately 5,200 full and part time
employees. It is estimated that this number was reduced from
approximately 15,000 individuals employed as of approximately 18
months prior to the Petition Date. Most of the now "former
employees" also participated in one or more of the Debtors'
welfare and benefit plans. It is further estimated that, of
those approximately 10,000 "former employees" of the Debtors,
approximately 1,200 have claims against the Debtors relating to
unpaid compensation and benefits.

On February 1, 2002, several of the Debtors' former employees
formed a coalition, inviting other former employees to join for
the purpose of:

A. identifying and articulating issues and claims of importance
     to former Global Crossing employees including issues and
     claims relating to unpaid severance, outstanding sales
     commissions, the value of Global Crossing stock in their
     401(k) retirement accounts, the status of funds in their
     various pension and welfare plans;

B. serving as a forum for discussing issues facing former Global
     Crossing employees in dealing with the reorganization
     process and communicating relevant current events in this
     capacity; and

C. exploring all possible alternatives, legal and otherwise, for
     achieving equitable treatment of former Global Crossing
     employees in connection with the issues identified above.

Within weeks, Mr. Conway states that this coalition of former
employees formed a Steering Committee which has been guiding the
former employees as set forth above, as well as assisting former
employees with issues such as locating new employment and health
care services. This Steering Committee, referred to as the "Ad
Hoc Committee of Former Global Crossing Employees" has been
joined by more than 400 individuals that have participated in
their forums to date.

Until now, Mr. Conway claims that the focus in these cases, as
in most bankruptcy cases, has been on giving the Debtors the
necessary "breathing spell" to formulate a plan of
reorganization. Now, however, it is incumbent upon the parties
and this Court to shift focus and recognize the true casualties
of the Debtors' failure - the thousands of former employees of
the Debtors who, in addition to losing their severance, also
lost insurance coverage for their families and much of their
retirement savings. There is no creditor group equal in size to
that of the former Global Crossing employees yet, unlike the
typical creditor in these cases, the Former Employees' lack of
resources requires special consideration to ensure that their
collective interests and rights are not merely preserved but
also effectively promoted.

Mr. Conway notes that as with another notable corporate behemoth
which recently filed for bankruptcy protection - Enron Corp. -
revelations concerning the Debtors' true financial condition
have spawned a number of class action lawsuits against the
Debtors' officers and directors, their accountants and others on
behalf of shareholders and employees alleging, inter alia,
violations of securities laws, ERISA, and numerous other laws
and duties. To date, at least 50 lawsuits concerning accounting
improprieties, securities violations and breaches of fiduciary
duty with respect to the Debtors' pension and welfare plans have
been filed in connection with Global Crossing. At least one
adversary proceeding has been commenced relating to certain
pension monies allegedly held for the benefit of former Global
Crossing North America employees. These litigations serve only
to add additional confusion concerning whether and how the
bankruptcy proceedings will affect the rights of the Former
Employees.

Mr. Conway tells the Court that it was this sort of confusion
which, shortly after the Debtors' filing on January 28, 2002,
caused the Former Employees to join forces and create a
coalition of Former Global Crossing Employees. Indeed, within
weeks of the Petition Date, the Ad Hoc Committee was selected
from a nationwide body of hundreds of former employees to act as
a Steering Committee for the coalition as a whole. Formal Bylaws
were adopted by the Ad Hoc Committee and regularly meetings have
been held each week to discuss the bankruptcy, the related class
actions and the direction best suited to the Former Employees in
the bankruptcy forum. Many investor groups have contacted the Ad
Hoc Committee to discuss their position concerning plans for
reorganization of the Debtors and, specifically, to solicit the
support of the Former Employees for such plans.

Unfortunately, without the means to hire professionals to advise
them in this regard, Mr. Conway submits that the Former
Employees have not been able to fully evaluate how the various
proposed plans will affect their own interests. Similarly, the
Former Employees have not been able to monitor their interests
with respect to the various pension plans or fiduciary accounts
required to be maintained by the Debtors on their behalf.
Specifically, numerous issues, which affect the Former Employees
have arisen in the bankruptcy cases, but, in part as a result of
their exclusion from the Official Committee, the Former
Employees have not been allowed to participate in this process.
These issues include, inter alia:

A. Litigation concerning the proper treatment of the Frontier
     Corporation Pension Plan (which covers many of the Former
     Employees) including allegations that the interest on the
     Plan assets is being siphoned off by the Debtors to pay
     other estate obligations;

B. The decision to prevent stock certificates from being issued
     which effectively prevents the Former Employees from
     "rolling over" their 401k's to broker-dealers that do not
     charge commission rates for sales which have been as high as
     70% of transaction value;

C. The Decision to cancel an administration contract with
     EquiServe out of Providence Rhode Island (without appointing
     a new administrator).  This entity was charged with managing
     the stock distributed by the debtor in connection with
     employee recognition programs, thus effectively denying
     employees access to the stock awards under such management;

D. The Debtors' motion to approve bidding procedures that
     include a provision for up to $40,000 in "break-up" fees and
     expenses;
     and

E. Perhaps most importantly, the Former Employees have been
     excluded from negotiations with potential bidders for the
     Debtors' assets.  This includes dissemination of financial
     information necessary to evaluate such bids, despite the
     fact that they are routinely approached by these bidders
     with "settlement agreements" concerning their claims against
     the estate and the treatment of such claims in any plan of
     reorganization.

More recently, the Debtors have asked the Court to authorize
certain other critical actions including:

A. Retention of "key employees" at a cost of approximately
     $15,000,000 to the estate;

B. Approval of an employment agreement between the Debtors and
     John Legere at a cost of more than $6,000,000 to the estate
     in the first year alone;

C. Approval of a compensation plan for directors allowing for up
     to $100,000 per year for each director.

Mr. Conway claims that the Former Employees will have no
participation in the resolution of these issues because they
have no formal representation on the Official Committee, as well
as because geography and cash flow limit their ability to
participate on an individual basis. Even the task of obtaining
documents from the Debtors necessary to accurately assess their
individual claims is daunting to these un-represented
individuals.

Accordingly, Mr. Conway informs the Court that the Ad Hoc
Committee retained counsel for a limited purpose, which included
contacting the United States Trustee with a request for separate
official committee status. On February 21, 2002, little more
than three weeks after the filing of the present cases, Ad Hoc
Committee's counsel first corresponded with the United States
Trustee for the Southern District of New York, Carolyn Schwartz.
He explained the special needs of the Former Employees and
requested the appointment of an additional Official Committee as
requested herein.

Since sending this February 21, 2002 letter, Mr. Conway says
that counsel for the Ad Hoc Committee has participated in
several in-person and telephone conferences with the assigned
Assistant United States Trustee, Mary Elizabeth Tom (in-person)
and Debtor's counsel (by telephone) regarding this request. The
Ad Hoc Committee is aware of no facts which would suggest that
the United States Trustee is not still carefully and
conscientiously considering this request.  However, given the
unusual pace at which these cases are progressing, the Ad Hoc
Committee have become concerned that further delay could serve
to prejudice the Former Employees in these proceedings.
Therefore, despite not receiving a final determination from the
United States Trustee's Office on this issue, the Ad Hoc
Committee has filed the instant motion to ensure that, in the
event the United States Trustee decides not to appoint a
committee, this Court will be able to address the issue quickly.

The Ad Hoc Committee submits that the Official Committee of
Unsecured Creditors, whose constituencies' interests may not
only be different, but often actually collide with those of the
Former Employees, cannot adequately represent the Former
Employees.  Mr. Conway claims that this is best evidenced by the
Official Committee's response to the Ad Hoc Committee's informal
request that the Debtors agree to accelerated payment of
priority claims. When this request was relayed through Debtors'
counsel, Paul Basta, counsel for the Official Committee,
confirmed that it was adamantly opposed to such relief. Such a
position is inconsistent with the idea that the Official
Committee also represents the Former Employees. Indeed, the
availability of sufficient funds to cover priority amounts due
as a result of severance claims that accrued within 90 days
prior to the bankruptcy filings has been confirmed in every
estimate or reorganization scenario of the Debtors proposed to
date. Thus, the position of the Official Committee must be
viewed for what it is, tunnel vision with only the needs and
interests of the trade creditors, banks and bondholders in view.
(Global Crossing Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


GLOBAL CROSSING: Inks Four-Year Service Pact with Choice Telco
--------------------------------------------------------------
Global Crossing announced is providing Choice Telco, a
Connecticut-based Competitive Local Exchange Carrier, with both
switched and dedicated inbound and outbound National Origination
Service, Private Line and IP Transit.  The four-year agreement
was signed in March 2002, and traffic has been going over the
Global Crossing network since April 2002.  All products are
being used for customer resale.

Choice Telco, founded in March 2001, offers local service in
Connecticut, Massachusetts and Rhode Island, and long-distance
service in 11 states.  The company is one of the new breed of
resellers availing themselves of Global Crossing's comprehensive
product offering, geographic reach, flexible pricing and quick
provisioning.  It targets medium to large companies in the
legal, insurance, and manufacturing industries, and expects to
offer local service in the rest of New England and long-distance
throughout the U.S. by the end of 2002.

"We selected Global Crossing for a number of reasons," said
Geoff Rowntree, Choice Telco partner.  "It is a tier-one,
quality provider with the size and reach we need to best support
our customers, and we're confident that it will be there to
service us over the near- and long-term.  Furthermore, many of
our employees had worked with Global Crossing previously and
wanted to continue doing so."

Switched and dedicated inbound and outbound NOS offer customers
end-to-end call termination and origination, and dedicated
access to the Global Crossing network.  Choice Telco's customers
are able to call to any point internationally.  Some of the
traffic is being carried over Global Crossing's high quality
Voice Over IP (VoIP) network, which now supports over 900
million minutes per month, making it one of the largest private
VoIP platforms in the world.

Global Crossing's Private Line service is a point-to-point,
leased line data service offering connectivity over Global
Crossing's 101,000 route mile network that links over 200 major
cities in 27 countries.  IP-Transit leverages Global Crossing's
network and extensive peering relationships to provide direct
links to the public Internet.

"We are proud to support Choice Telco and their expansion, and
we plan to keep doing so in the future," said John Legere,
Global Crossing's chief executive officer.  "We're especially
pleased that Choice Telco recognizes the dedication of our
employees, who are keenly focused on customer satisfaction.
Combined with our global, IP-based network and set of offerings,
it demonstrates our commitment to quality across the board."

Global Crossing provides telecommunications solutions over the
world's first integrated global IP-based network, which reached
27 countries and more than 200 major cities around the globe.
Global Crossing serves many of the world's largest corporations,
providing a full range of managed data and voice products and
services.  Global Crossing operates throughout the Americas and
Europe, and provides services in Asia through its subsidiary,
Asia Global Crossing.

On January 28, 2002, certain companies in the Global Crossing
Group (excluding Asia Global Crossing and its subsidiaries)
commenced Chapter 11 cases in the United States Bankruptcy Court
for the Southern District of New York and coordinated
proceedings in the Supreme Court of Bermuda.

Please visit http://www.globalcrossing.comor
http://www.asiaglobalcrossing.comfor more information about
Global Crossing and Asia Global Crossing.

Global Crossing Holdings Ltd.'s 9.625% bonds due 2008 (GBLX3),
says DebtTraders, are trading at about 2.125. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=GBLX3for
real-time bond pricing.


GOLDMAN INDUSTRIAL: Committee Looks to ESBA for Financial Advice
----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in
Goldman Industrial Group, Inc.'s chapter 11 cases, wants to
employ Executive Sounding Board Associates, Inc., as its
Financial Consultants.

The Committee tells the Court that it requires the assistance of
Executive Sounding as Financial Consultants, to assist in
performing its duties under the Bankruptcy Code.  The Committee
will turn to EBSA for:

      a) consultation with the Committee concerning the financial
         administration of the case;

      b) investigation of the acts, conduct, assets, liabilities,
         and financial condition of the Debtors, the operation of
         the Debtors' businesses and the desirability of the
         continuance of such businesses, and any other matter
         relevant to the case or to the formulation of a plan;

      c) participation in the formulation of a plan, including
         advice to those represented by such Committee of such
         Committee's determinations as to any plan formulated;

      d) examination of the books and records of the Debtors,
         preparation of a liquidation analysis; and

      e) performance of such other services as are in the
         interest of those represented.

The Financial Consultant supervising the representation of the
Committee in this case will be Mr. Michael DuFrayne. Mr.
DuFrayne is a Managing Director of Executive Sounding. The
hourly rates of Executive Sounding professionals are:

      Managing Directors and      $285-$365 per hour
        Vice Presidents
      Senior Consultants          $250-$335 per hour
      Associate Professional and   $75-$250 per hour
        Consultants

Goldman Industrial Group, Inc., with its affiliates, provide
metalworking machinery to manufacturers; marketing and selling
original equipment primarily to the aerospace, automotive,
computer, defense, medical, farm, construction, energy,
transportation and appliance industries. The Company filed for
chapter 11 protection on February 14, 2002.  Victoria W.
Counihan, Esq., at Greenberg Traurig, LLP represents the Debtors
in their restructuring efforts.


ICG COMM: Seeks OK to File SBC Confidential Agreement Under Seal
----------------------------------------------------------------
ICG Communications, Inc., asks that Judge Walsh, under the
authority of 11 U.S.C. Sec. 107(b) and Rule 9018 of the Federal
Rules of Bankruptcy Procedure, enter an Order authorizing the
Debtors to file under seal the Confidential Settlement Agreement
and Mutual Release and directing that the Protected Agreement
remain confidential, protected under seal and not be made
available to anyone other than the Court, the United States
Trustee, the Official Committee of Unsecured Creditors, the
Debtors, and the SBC Affiliates.

After protracted and difficult negotiations, the Debtors and the
SBC Affiliates have reached a settlement with respect to the
"wholesale" portion of the Disputes embodied in several Motions
and responses.  The Parties have memorialized the terms of the
settlement of the "wholesale" Disputes in a confidential
writing, the Protected Agreement.

As a condition to the Protected Agreement, the Parties have
agreed that the terms of the Protected Agreement are and shall
remain confidential.

By this motion, the Debtors respectfully requests that the Court
enter an Order (1) authorizing the Debtor to file the Protected
Agreement under seal, and (2) directing that such document shall
remain under seal and confidential and should be made available
only to the Court and to specified parties and their respective
counsel: (a) the United States Trustee, (b) the Official
Committee of Unsecured Creditors; (c) the Debtors; and (d) the
SBC Affiliates, and such document shall not be made available to
any other party.

A court may grant the relief requested herein pursuant to
Section 107(b) of the Bankruptcy Code and Rule 9018 of the
Bankruptcy Rules. Section 107(b) of the Bankruptcy Code provides
bankruptcy courts with the power to issue orders that will
protect entities from potential harm. Section 107(b), in
relevant part, provides:

  "On request of a party in interest, the bankruptcy court shall,
   and on the bankruptcy court's own motion, the bankruptcy court
   may -

       (1) protect an entity with respect to a trade secret or
           confidential research, development, or commercial
           information; or

       (2) protect a person with respect to scandalous or
           defamatory matter contained in a paper filed in a case
           under this title.

Rule 9018 of the Bankruptcy rules defines the procedure by which
a party may move for relief under Bankruptcy Code Section
107(b), and provides that "[o]n motion, or on its own
initiative, with or without notice, the court may make any order
which justice requires (1) to protect the estate or any entity
in respect of a trade secret or other confidential research,
development, or commercial information [or] (2) to protect any
entity against scandalous or defamatory matter contained in any
paper filed in a case under the Code.

Unlike Rule 26(c) of the Federal Rules of Civil Procedure,
Section 107(b) does not require a demonstration of "good cause."
Rather, if material sought to be protected falls within one of
the enumerated categories, "the court is required to protect a
requesting party and has no discretion to deny the application."

The Protected Agreement, which contains confidential commercial
information regarding the relationship between and among the
Debtors and the SBC Affiliates and the financial terms of such
relationship is the type of information that qualifies for
protection under Section 107. This information, which is highly
sensitive should not be disclosed to the Parties' competitors
because it could provide them with an unfair advantage.

                Securities Fraud Plaintiffs Object
                           To Secrecy

Alabama Retirement Systems, the Policemen's Annuity and Benefit
Fund, City of Chicago and the Strategic Market Analysis Fund,
the court appointed interim lead plaintiffs in a securities
fraud class action entitled "David Rabbach v. ICG
Communications, Inc., et al.", representing the parties who
purchased or otherwise acquired the common stock of ICG
Communications, Inc. between December 20, 1999 and September 18,
2000, inclusive, and who were thereby damaged present a Limited
Objection to the Debtors' motion to file Confidential Settlement
Under Seal.

Although the terms of the Protected Agreement are provided in a
very general manner in a separate motion to approve the
settlement, the parties agreed to maintain the alleged
confidentiality of those terms. In support of the Motion,
Debtors state merely that the Protected Agreement . . . contains
confidential information regarding the relationship between and
among the Debtors and the SBC Affiliates and the financial terms
of such relationship. . . .  This information, which is highly
sensitive should not be disclosed to the Parties' competitors
because it could provide them with an unfair advantage.

                         Cryptic Language

Although this cryptic language is intended to convince the Court
that the Protected Agreement falls within the parameters of Fed.
R. Bank. P. 9018, thereby preventing the Court from exercising
any discretion, the Motion fails to satisfy the requirements of
that Rule and the Motion should be denied.

There is no information in the Motion that demonstrates a trade
secret, confidential research, development or commercial
information nor does it provide any evidence of a scandalous or
defamatory matter as required by Fed. R. Bank. P. 9018. In the
absence of the foregoing, confidentiality is not warranted.

                         Not Competitors

Moreover, the Interim Lead Plaintiffs are not competitors of the
Debtors or the SBC Affiliates. The Debtors are seeking the
Court's Approval of a proposed Settlement Agreement And Mutual
Release between the Debtors and Southwestern Bell Telephone,
L.P. and its' "affiliates," Ameritech (composed of Illinois Bell
Telephone Company, d/b/a Ameritech Illinois, Indiana Bell
Telephone Company Inc. d/b/a Ameritech Indiana, Michigan Bell
Telephone Company d/b/a Ameritech Michigan, The Ohio Bell
Telephone Company d/b/a Ameritech Ohio and Wisconsin Bell, Inc.
d/b/a Ameritech Wisconsin) and Pacific Bell Telephone.

                      The Debtors' Illegal Acts
                    May Relate to Securities Suit

The proposed Settlement concerns alleged unlawful activities by
the Debtors which are the subject of the allegations of
securities fraud being prosecuted in Colorado by the Interim
Lead Plaintiffs against Messrs. Shelby, Herbst and Beans, three
of the former officers and directors of the Debtors. There is no
basis to allow the Debtors, through the Motion, to conceal the
alleged fraudulent activity by allowing the Debtors to file the
Settlement under seal.

At the very least, the Interim Lead Plaintiffs should be
permitted to reserve their rights to have the contents of the
Protected Agreement disclosed at some later date should it be
determined that the information contained therein is relevant to
the prosecution of the Colorado Action. It is obviously,
difficult at this juncture to determine the precise nature or
content of the "sealed" information, but it appears that it may
be essential to the prosecution of the Colorado Action.

Based upon the foregoing, Interim Lead Plaintiffs respectfully
request entry of an order denying the motion or, in the
alternative, reserving the Interim Lead Plaintiffs' rights to
disclosure of the contents of the Protected Agreement upon a
showing of relevance to the Colorado Action, and granting such
other and further relief as the Court deems just and proper.
The filing of the Settlement Agreement under seal will not
benefit the Debtors in any way; it will only throw a cloak of
secrecy over the fraudulent activities of prior management.  The
Debtors are not defendants in the Colorado Action, and the
Colorado Action will not have any effect on the Debtors'
prospects for a successful reorganization.

The Interim Lead Plaintiffs and the class of purchasers of ICG
common and preferred stock they seek to represent, will receive
nothing from the Debtors' estate in this bankruptcy proceeding;
their only prospect for recovery is their securities fraud
claims against the former officers of the Debtors.

Throughout the Class Period, the individual defendants
represented ICG to be one of the largest and fastest growing
competitive local exchange carriers in the United States,
reporting tremendous growth in the number of lines installed in
its network and in revenues earned. However, led by defendants,
Chief Executive Officer Bryan, Executive Vice President and
Chief Financial Officer Herbst and President and Chief Operating
Officer Beans, problems with the Debtors' network were
concealed, which threatened the Company's business and ICG's
line counts were inflated and together with its revenues were
knowingly or extremely recklessly reported.

In contrast to ICG's repeated exclamations as to staggering
quarterly additions of newly sold and installed lines,
technological competence, and dramatically increasing revenues,
the Company's business was chaotic and in extreme disarray, and
customers (including carriers such as the SBC Affiliates) were
irate and refused to pay ICG's inaccurate and inflated bills.
ICG's new telecommunications network and IRAS products never
functioned properly, despite the efforts of many to build,
repair and rebuild them during 1999 and 2000. Persons internally
responsible for auditing the Company's line counts were
preparing and circulating weekly reports which detailed the fact
that ICG's actual line count was only about 25% of the
represented figures, and the Company's statements of revenue and
earnings were wildly inflated.

The proposed Settlement, for which the Debtors request the
Court's authority to file under seal, directly concerns the very
fraudulent practices described in this Motion.  These billing
disputes between the Debtors and the SBC Affiliates are highly
relevant to the Colorado Action, and constitute a good portion
of the illegal activity being brought to light by Interim Lead
Plaintiffs in that case. Interim Lead Plaintiffs therefore
strenuously object to the Debtors' request to hide the terms of
the proposed Settlement from public view, and see no reason for
this Court to assist that effort. Accordingly, Lead Plaintiffs
request the Court deny the Debtors' Motion For Authority To File
Confidential Settlement Agreement And Mutual Release Under Seal.
(ICG Communications Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


IT GROUP: Examiner Hires Pachulski Stang as Bankruptcy Counsel
--------------------------------------------------------------
R. Todd Neilson, the Court-appointed Examiner in IT Group's
Chapter 11 cases, asks the Court for authority to retain and
employ Pachulski, Stang, Ziehl, Young & Jones P.C. as bankruptcy
counsel, nunc pro tunc to March 8, 2002, to perform, among
others, these services:

A. Providing legal advice with respect to its powers and duties
     as the Examiner;

B. Preparing on behalf of the Examiner necessary applications,
     motions, objections, oppositions, complaints, answers,
     orders, agreements and other legal papers;

C. Appearing in court on behalf of the Examiner to present
     necessary motions, objections, applications and other
     pleadings and to otherwise further the interests of the
     Examiner; and,

D. Performing all other legal services for the Examiner which
     may be necessary and proper in these cases.

Mr. Neilson submits that Pachulski has extensive experience and
knowledge in the field of debtors' and creditors' rights and
business reorganizations under Chapter 11 and has expertise,
experience and knowledge practicing before this Court.
Pachulski's attorneys have played significant roles in many of
the largest and most complex cases involving reorganization
issues including representing various types of trustees and
examiners.

Subject to Court approval, Mr. Neilson accords that the firm
will be compensated on an hourly basis plus reimbursements of
actual and necessary expenses and other charges incurred by
Pachulski. The principal attorneys and paralegals presently
designated to represent the committee and their current
standards hourly rates are:

                  Professionals             Hourly rates
              --------------------          ------------
              Richard M. Pachulski             $ 590
              Laura Davis Jones                  550
              Ira D. Kharasch                    480
              Jeremy V. Richards                 450
              Werner Disse                       355
              Jonathan J. Kim                    330
              Peter J. Duhig                     225
              Bruce Campbell (paralegal)         110
              Cheryl Knotts (paralegal)          105

Laura Davis Jones, shareholder in the firm of Pachulski, Stang,
Ziehl, Young & Jones P.C., informs the Court that Dimensional
Fund Advisors, an equity holder of the Debtors, holds equity in
certain Chapter 11 debtors being represented by the firm,
including Newcor Inc. In addition, the firm previously
represented Mr. Neilson or its members as trustees appointed in
bankruptcy cases unrelated to the Debtors' cases. The firm also
sublets office space to Mr. Neilson in Los Angeles, California.
Other than these, Pachulski stands as a disinterested person as
defined in Bankruptcy Code Section 101(14). (IT Group Bankruptcy
News, Issue No. 10; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


INTEGRATED HEALTH: Assumes & Assigns Medicare Pact to Bridgewood
----------------------------------------------------------------
As previously reported, upon the resolution of objection over
the Heartland Mechanics Lien, the Court authorized the sale by
Integrated Health Services, Inc.-Kansas City and approved the
Operations Transfer of the Facility known as IHS of Bridgewood
to Bridgewood Manor, L.L.C. (New Operator) as proposed by the
Debtors, pursuant to the Operations Transfer Agreement.

In furtherance to the Operations Transfer Agreement, the Debtor,
the U.S. and Bridgewood Manor, L.L.C. (New Operator) agreed upon
the terms of a Stipulation and Order that provides for the
Debtors' assumption and assignment of the Medicare Provider
Agreement to Bridgewood, upon the transfer of the operation of
the Facility to Bridgewood.

Upon the Effective Date, all the claims by the Centers for
Medicare & Medicaid Services (CMS) against both Debtors and
Bridgewood for monetary liabilities arising under the Medicare
Provider Agreement before the Effective Date shall be satisfied,
discharged and released; provided, however, that Bridgewood
succeeds to the quality history of the Facility and shall be
treated, for purposes of survey and certification issues as if
it is the Debtor and no change of ownership occurred.

Upon the Effective Date, nothing in the stipulation shall
relieve Bridgewood from complying with all procedures, rules and
regulations of the Medicare program; provide that

-- any Medicare claim of CMS as described above against Debtors
    arising prior to the Effective Date is cured and released;

-- Debtors, Bridgewood and CMS each will consider all cost
    reporting periods under the Medicare Provider Agreement prior
    to the Effective Date to be fully and finally closed in
    accordance with all applicable laws;

-- Debtors and Bridgewood will withdraw any appeals with respect
    to the Medicare Provider Agreement (including, but not
    limited to appeals of civil monetary penalties), that are
    pending on the Effective Date either administratively or
    before any Provider Reimbursement Review Board or any federal
    court and agree not to bring any further appeals thereafter
    relating to events and cost reporting periods prior to the
    Effective Date;

-- the rights accorded CMS and Bridgewood under this Stipulation
    and the Order shall constitute "cure" under 11 USC. Sec. 365
    of all outstanding financial defaults under the Medicare
    Provider Agreement arising before the Effective Date.

Debtors shall file a termination cost report for the Facility
through the Effective Date, and Bridgewood shall file a partial
cost report to cover the period from the Effective Date through
the end of the fiscal period in which the Effective Date falls.

Judge Walrath has given her stamp of approval to the
Stipulation. (Integrated Health Bankruptcy News, Issue No. 35;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


KAISER ALUMINUM: Asbestos Claimants Win OK to Hire Prof. Warren
---------------------------------------------------------------
In addition to the employment of the firm Caplin & Drysdale, the
Official Committee of Asbestos Claimants of Kaiser Aluminum
Corporation secured Court approval to hire Professor Elizabeth
Warren as Special bankruptcy Consultant to the firm Caplin &
Drysdale, effective February 25, 2002.

The Asbestos Committee anticipates that Professor Warren will
provide very limited services in this Bankruptcy Case. In
general, Mr. Thomas Craig believes that the professor's billable
hours will not exceed 10 hours per month and may be
significantly less. It is contemplated that she will work with
the firm Caplin & Drysdale as a consultant, providing advice and
guidance to the Committee through that firm in these and other 9
other asbestos-related bankruptcy cases in which the firm is
presently counsel to committees representing asbestos personal
injury claimants, including the cases that have been assigned
and consolidated under the Court.

Mr. Craig submits that Professor Warren will focus her efforts
on assisting Caplin & Drysdale in the reorganization plan
process. Although she will not be involved in the day-to-day
administration of the bankruptcy, she may be consulted by the
firm on other technical issues that may arise in the course of
the case.

Professor Elizabeth Warren is a distinguished academician, with
extensive teaching experience and numerous publications in the
field of bankruptcy law. She is the Leo Gottlieb Professor of
Law at Harvard Law School. In addition to her academic and
legislative activities, Dr. Warren is consulted by a number of
companies on mass tort issues.

Professor Warren has served in an advisory capacity for Dow
Chemical, the parent company of Dow Corning, in the early days
of the Dow Corning bankruptcy. She has also assisted the Johns
Manville Trust and the National Gypsum Trust in appellate
litigations. She has also served as an expert witness on behalf
of the National Gypsum Trust and the Fuller Austin Trust, which
were formed as part of the confirmation of a Chapter 11 plan in
mass tort asbestos bankruptcies.

The professor has also assisted in the preparation for petitions
for certiorari to the United States Supreme Court in 2 cases
involving future claims - in environmental context and in an
employee liability context. She has argued a case on behalf of
Fairchild Aviation and has filed an amicus brief in future
claims litigation involving Piper Aircraft.

Professor Warren is also working with the firm Caplin & Drysdale
as consultant involving the Babcock & Wilcox Company, Owens
Corning Corp., Pittsburgh Corning Corp. Armstrong World
Industries, Inc., Burns & Roe Enterprises, Inc., G-1 Holdings,
W.R. Grace & Company, United States Gypsum Corp., Federal Mogul
Global, Inc., and North American Refractories Company.

Mr. Craig will compensate the professor on an hourly basis at
the rate of $675 per hour, contrary to her customary billing
rate of $700. (Kaiser Bankruptcy News, Issue No. 7; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


KMART CORP: Intends to Assume License Agreement with Avmark Inc.
----------------------------------------------------------------
Kmart Corporation and its debtor-affiliates seek the Court's
authority to assume the Curtis Mathes License Agreement dated
July 1, 2000 and as amended on April 23, 2002, with Avmark Inc.

According to Mark A. McDermott, Esq., at Skadden, Arps, Slate,
Meagher & Flom, in Chicago, Illinois, the Debtors pay Avmark
royalties within 10 days following the end of each month.  As of
the Petition Date, Mr. McDermott admits that Kmart owed ordinary
course royalty payments to Avmark.

Mr. McDermott tells the Court that Kmart holds a five-year
license in the United States of America to utilize the trademark
"Curtis Mathes" for use in connection with the sale of consumer
video, audio and telecommunication products.  In exchange, Kmart
pays Avmark a percentage of the F.O.B cost of any Licensed
Product.  Avmark is also entitled to an annual minimum royalty,
Mr. McDermott adds.

Within 10 days following the end of each month, Kmart delivers a
certified royalty report then pays Avmark the royalties due and
owing for that month.

In connection with the assumption of the License Agreement, Mr.
McDermott relates that Avmark has agreed to a 20% reduction in
the annual minimum royalty for the remainder of the term of the
License Agreement.  Moreover, Mr. McDermott continues, the
Debtors shall promptly pay the outstanding royalty payment of
$1,900,796 to assume the License Agreement.  Mr. McDermott
explains that the Curtis Mathes line of products represents a
value brand that offers functionality equivalent to the leding
national brands yet provides Kmart with better than average
gross margins.  Thus, the Debtors are convinced that assumption
of the License Agreement and the payment of the Cure Amount will
ultimately benefit their estates.

Mr. McDermott further relates that the Licensed Products
consistently produce high sales volume.  "The sales of the
Licensed Products account for 27% of Kmart's video sales and
enhance Kmart's liquidity and, therefore, its opportunity for a
successful reorganization," Mr. McDermott explains.  Continuing
this arrangement will guarantee that the Debtors will attract a
wide customer base, Mr. McDermott asserts.

The current term of the License Agreement will end on June 30,
2005.  Thereafter, Mr. McDermott says, the License Agreement
shall continue for indefinite successive one-year terms unless
terminated by either party upon at least six months prior to the
end of the initial term or any such year extension. (Kmart
Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


KMART CORP: Wants to Assume Amended Sesame Workshop License Pact
----------------------------------------------------------------
Over the past six years, Kmart Corporation and Sesame Workshop
have enjoyed a mutually beneficial business relationship.  Kmart
holds a nine-year exclusive license of the trademark "Sesame
Street", together with certain intangible intellectual property
relating to Sesame Street, including, without limitation,
characters, likenesses, logos, marks, names and materials,
associated with the television series Sesame Street, for use in
connection with the development and sale of education and
entertaining products and infant, toddler and preschool
children's apparel.  Furthermore, J. Eric Ivester, Esq., at
Skadden, Arps, Slate, Meagher & Flom, in Chicago, Illinois,
continues, Kmart has an exclusive license to create, develop,
manufacture and produce and advertise, promote, distribute and
sell the Licensed Products among mass market retailers and mid-
tier department stores.

In return, Kmart has to pay Sesame Street a minimum annual
royalty for each 12-month period of the term.  "In each
subsequent 12-month period, the Minimum Annual Royalty paid
during the prior 12-month period shall be adjusted for positive
changes in the Consumer Price Index," Mr. Ivester relates.  The
Minimum Annual Royalty for product categories is based on a
percentage of net sales of Licensed Products.  Mr. Ivester
emphasizes that Kmart has consistently paid the Minimum Annual
Royalty.  In addition, Mr. Ivester says, Kmart is obligated to
reimburse Sesame Street for one half of the costs of the salary,
overhead and other costs for Sesame Street's primary liaison
with Kmart.

According to Mr. Ivester, Kmart delivers a certified royalty
report within 30 days following the end of each calendar
quarter. "Kmart then pays the royalties due for such quarter,"
Mr. Ivester relates.  Kmart also usually pays Sesame Street an
additional payment each June to ensure that the Minimum Annual
Royalty is met, Mr. Ivester adds.

By this motion, the Debtors seek the Court's authority to assume
the License Agreement with Sesame Street dated July 1, 1996, as
amended pursuant to letter agreements dated July 1, 1998, July
1, 2000, August 1, 2001, and May 8, 2002.

In connection with the assumption of the License Agreement, Mr.
Ivester tells the Court that the Debtors will immediately pay
the outstanding royalty payment of $5,072,631 (less any royalty
payments on products within the Minimum Annual Royalty actually
paid for the 12-month period ending June 30, 2002).  Mr. Ivester
explains that the Cure Amount will be in full satisfaction of
any outstanding monetary obligations for the 12-month period
ending June 30, 2002 (other than those royalty obligations with
respect to sales of non-exclusive products outside the Minimum
Annual Royalty).

The Debtors' decision to assume the License Agreement is based
on their belief that:

     -- the Sesame Street line of products represents the gold
        standard for education with moms and kids, and

     -- it is critical to their ongoing business.

Mr. Ivester explains that at each stage of product development,
Sesame Street must approve artwork, graphics, advertising,
publicity and promotion used in connection with the sale of the
Licensed Products.  "Kmart and Sesame Street develop the product
line jointly and prior to sale, Kmart delivers eight units of
each product type for quality control purposes," Mr. Ivester
says.  The Licensed Products consistently produce high sales
volume, Mr. Ivester reports.  In fact, Mr. Ivester informs Judge
Sonderby that the sales of the Licensed Products account for
more than 50% of Kmart's infant apparel sales and enhance
Kmart's liquidity and, therefore, its opportunity for a
successful reorganization.

Moreover, Mr. Ivester relates that Kmart maintains one brand
manager dedicated to the management and promotion of the Sesame
Street brand.

The initial term of the License Agreement ends on June 30, 2005.
According to Mr. Ivester, the License Agreement may be
immediately terminated by either party, if either party:

   (i) assigns the License Agreement in whole or in part without
       the other party's consent, or

  (ii) is in breach or default of any of its obligations,
       representations, warranties or agreements under the
       License Agreement and such default remains for 30 days
       after such notice. (Kmart Bankruptcy News, Issue No. 21;
       Bankruptcy Creditors' Service, Inc., 609/392-0900)


LEINER HEALTH: Signs-Up REM Associates as Management Consultants
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gives its
authority to Leiner Health Products Group, Inc. and its debtor-
affiliates to employ REM Associates as management consultants.

As disclosed in an engagement letter dated June 21, 2001, the
Debtors employed REM management consultants to assist in a
supply chain assessment study directed at improving forecasting,
supply planning, and related processes.  The terms detailed that
REM's compensation is comprised of daily billing at the rate of
$2,000 per day, plus costs.  Mr. Robert Murray is the person
with primary responsibility for providing services to the
Debtors.

The Debtors need to continue REM's employment during the chapter
11 cases.  Because of REM's extensive pre-petition involvement
with the Debtors and the Debtors' ongoing need for the services
that REM provides, the Debtors have determined that employing
REM as management consultants is in the best interest of their
bankruptcy estates.

Leiner Health Products Group, Inc. manufacture vitamins,
minerals and nutritional supplements.  The Company filed for
chapter 11 protection on February 28, 2002. Mark D. Collins,
Esq. at Richards, Layton & Finger, PA and David W. Levene, Esq.
at Levene, Neale, Bender, Rankin & Brill LLP represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $353,139,000 in
total assets and $493,594,000 in total debts.


LERNOUT & HAUSPIE: Solicitation Period Stretched through June 17
----------------------------------------------------------------
Judge Judith Wizmur further extended the exclusive period within
which Lernout & Hauspie Speech Products N.V. and L&H Holdings
USA, Inc., may solicit acceptances of their respective chapter
11 plans -- for an additional forty-five days, through and
including June 17, 2002.


MERRILL LYNCH 1995-C1: Fitch Affirms Class F Certs. Rating at B-
----------------------------------------------------------------
Merrill Lynch Mortgage Investors Inc.'s, mortgage pass-through
certificates, series 1995-C1 $17.3 million class E certificates
are upgraded to 'A' from 'BBB-' by Fitch Ratings. In addition,
Fitch affirms $12.8 million class F at 'B-'. The ratings on
classes A, B, C, D and IO have been withdrawn because the
certificates have been paid in full. Class G is not rated. The
rating actions follow Fitch's review of the transaction which
closed in July 1995.

The upgrades reflect increases in subordination levels due to
loan payoffs and amortization. As of the April 2002 distribution
date, the pool's principal balance had been reduced by 84.3% to
$33.4 million from $213.3 million at closing. Currently, there
are no delinquent loans and no loans that are specially
serviced.

Fitch is concerned about the pool's concentration risks (number
of loans, property type, and geographic location) and has taken
this into account in its analysis. The certificates are
currently collateralized by 12 mortgage loans, secured by
multifamily and commercial properties. Retail makes up the
largest property type concentration at 62.7% of the pool's
current balance, a significant increase compared to 45% at
closing. The properties are located in eight states, with 18% of
the pool in Georgia. Approximately 58% of the remaining pool
matures in the year 2005 and 26% matures in the year 2010.

GMAC Commercial Mortgage Corp., the servicer, received 2001
financial statements for 8 of the 12 properties remaining in the
pool (representing 72% of the pool's current balance). The
pool's comparable weighted-average debt service coverage ratio
(DSCR) was 1.60 times in 2001 compared to 1.46x in 2000. The
largest loan, a retail property in Gallup, NM and representing
17.4% of the pool balance, reported a DSCR of 1.71x for 2001
compared to 1.48x for 2000 and an occupancy of 100% as of
December 2001. One loan, a retail loan representing 7.6% of the
pool, reported a 2001 DSCR below 1.0x.

The rating actions reflect the results of Fitch's stress
analysis, and the current composition of the pool. Three retail
loans, representing 26% of the pool, were assumed to default.
The defaulted loans include the loan with a DSCR below 1.0x, a
loan with a Kmart anchor with 2001 sales below the national
average, and an unanchored retail loan. Fitch will continue to
monitor this transaction, as surveillance is ongoing.


METALS USA: Looking to DKW Capital for Marketing Advice
-------------------------------------------------------
Metals USA, Inc., and its debtor-affiliates seek the Court's
permission to employ and retain the consulting firm of DKW
Capital Markets LLC as marketing advisors, nunc pro tunc to
April 24, 2002, to help in the Company's efforts to sell non-
core assets by August 2002.

The Debtors issued a press release on April 5, 2002 announcing
that they intend to sell 11 non-core business units in
connection with their plan to streamline operations. The Debtors
seek to hire DKW to help them market the said non-core
businesses.

Jonathan C. Bolton, Esq., at Fulbright & Jaworski LLP in
Houston, Texas, assures the Court that the Debtors are familiar
with the professional standing and reputation of DKW and have
already engaged the services of affiliates of DKW in the past.
DKW together with its affiliates, has experience in providing
marketing services in restructuring and reorganizations. It also
enjoys an excellent reputation in the steel industry for
services it rendered in large Chapter 11 cases on behalf of
debtors and Chapter 11 trustees.

DKW will provide marketing and related consulting service sales
of Debtors non-core assets in the course of these Chapter 11
cases, including:

A. Revising and updating the Confidential Offering Memoranda;

B. Developing a list of suitable potential buyers for each
     business;

C. Coordinating the execution of confidentiality agreements for
     potential buyers;

D. Coordinating the processing and responses to all due
     diligence questions from potential buyers and organizing the
     due diligence process;

E. Assisting in coordinating site visits and developing
     appropriate presentations;

F. Soliciting competitive offers from potential buyers;

G. Reviewing, analyzing and ranking offers from potential
     buyers; and

H. Assisting in facilitating the transaction through closing.

Subject to Court approval, the Debtors will be paying DKW up to
$350,000 in fees for the engagement. In the event that the
Debtors' sales have not been completed but the fees incurred by
DKW are already near the threshold, DKW will confer with Debtors
and, after the Debtors' approval, will submit to the Bankruptcy
Court a supplemental motion outlining the additional estimated
fees required to complete the engagement.

DKW will also be applying for allowances of compensation and
reimbursement of expenses for marketing and consulting services.
The professionals at DKW will also be paid these customary
hourly rates:

                  Principal                    $275
                  Senior Associate Principal   $225
                  Associate Principal          $195
                  Administrative Assistant      $75

DKW principal James M. McCague informs the Court the staff of
DKW have conducted a review of its contacts with the Debtors,
their affiliates and certain entities holding large claims
against the Debtors. The review consisted of queries of an
internal computer database containing names of individuals and
entities that are present or recent former clients of DKW to
identify potential relationships.

Mr. McCague assures the Court that no services have been
provided to the Debtors' creditors, equity security holders,
other parties-in-interest and the U.S. Trustee or any person
employed in the Office of the U.S. Trustee in this district. He,
however, admits that DKW provides services in numerous cases
that involve many different professionals, including attorneys,
accountants and financial consultants, who may also represent
claimants and parties-in-interest in the Debtors' Chapter 11
cases. (Metals USA Bankruptcy News, Issue No. 12; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


MILLER EXPLORATION: Falls Below Nasdaq Min. Bid Price Criteria
--------------------------------------------------------------
Miller Exploration Company (Nasdaq: MEXP) announces 1st quarter
2002 financial results and operational update.

                First Quarter 2002 Financial Results

Oil and natural gas revenues for the three months ended March
31, 2002 decreased 59% to $2.7 million from $6.5 million for the
comparable period in the prior year.  The revenues for the three
months ended March 31, 2002 and 2001 include approximately $0.2
million and $2.2 million of hedging losses, respectively.
Although oil production increased 27% due to contributions from
the new Pine Grove field, gas production fell 38% which equates
to an overall 27% decrease in production volumes to 943 Mmcfe
for the three months ended March 31, 2002 from 1,300 Mmcfe for
the comparable period of the prior year.  Natural gas production
from the Mississippi Salt Basin properties continued a downward
trend since no impactual gas well discoveries have been made
recently to offset the normal production decline curves.  In
2002, the Company plans to pursue reserve acquisition packages,
corporate mergers/combinations and/or joint ventures to, among
other things, help reverse or mitigate the Company's declining
production trend.  Average realized oil prices for the three
months ended March 31, 2002 decreased 27% to $18.44 per barrel
from $25.21 per barrel experienced during the comparable period
of 2001.  Realized natural gas prices for the three months ended
March 31, 2002 decreased 47% to $2.75 per Mcf from $5.15 per Mcf
for the comparable period of the prior year.  The wide price
fluctuations have substantially affected oil and gas revenues.
The resultant reduction in cash flow from operations has
significantly impacted the Company's budgeted exploration and
development expenditures for 2002.

Lease operating expenses and production taxes for the three
months ended March 31, 2002 decreased 54% to $0.4 million from
$0.9 million for the comparable period in the prior year.  The
LOE component was unchanged in 2002 compared to 2001. Production
taxes decreased $0.5 million in 2002 compared to 2001 due to
declining production, declining revenues and applicable
exemption from the 6% State of Mississippi production tax that
was in place during the first quarter of 2002 compared to the
same period in the prior year when the exemption did not apply
due to higher average commodity prices at that time.

Depreciation, depletion and amortization expense for the three
months ended March 31, 2002 decreased 50% to $2.1 million from
$4.2 million for the comparable period in the prior year, due to
decreased production volumes and a reduced property cost basis
after the $15.5 million cost ceiling writedown recognized in
2001.

General and administrative expenses for the three months ended
March 31, 2002 increased 18% to $0.7 million from $0.6 million
for the comparable period in the prior year, primarily as a
result of professional fees associated with a potential asset
acquisition transaction that was terminated in March 2002.

Interest expense for the three months ended March 31, 2002
decreased 31% to $0.2 million from $0.3 million for the
comparable period in the prior year.  This decrease is
attributable to:  1) a decrease in the outstanding credit
facility balance during the first quarter of 2002 compared to
the same quarter of the prior year; 2) full payment of the
amount owed pursuant to the note held by AHC in August 2001; and
3) lower interest rates associated with the new Bank One credit
facility which are prime rate sensitive.

Net loss for the three months ended March 31, 2002 decreased to
$0.4 million net loss from $0.4 million net income for the
comparable period in the prior year, as a result of the factors
described above.

                               Other

The Company believes it is in compliance with all Nasdaq
requirements with the exception of the requirement to maintain a
trading price of $1 per share. Due to the fact that the
Company's shares have traded below $1 for 90 days, the Company
may receive a notice of potential delisting from Nasdaq National
Market.  In the event a notice is received, the Company will
request a hearing which will allow the Company to remain listed
on the Nasdaq National Market until an appeal process is
completed.  While it is not possible to determine at this time,
management believes that the successful completion of the
Company's near term corporate goals will allow the Company to
achieve and sustain the compliance requirements of the Nasdaq
National Market.

Miller is an independent oil and gas exploration and production
company with established exploration efforts concentrated
primarily in the Mississippi Salt Basin, Alabama, and Blackfeet
Indian Reservation.  Miller emphasizes the use of 3-D seismic
data analysis and imaging, as well as other emerging
technologies, to explore for and develop oil and natural gas in
its core exploration areas.  Miller is the successor to the
independent oil and natural gas exploration and production
business first established in Michigan by members of the Miller
family in 1925.  Miller's common shares trade on the Nasdaq
under the symbol MEXP.


MORTON INDUSTRIAL: 2001 Restructuring Plan Nearing Completion
-------------------------------------------------------------
Morton Industrial Group, Inc. (Nasdaq: MGRP), a leading contract
manufacturing supplier to large industrial original equipment
manufacturers (OEMs), announced its financial results for the
fiscal 2002 first quarter ended March 30, 2002.

Revenues for the Company's fiscal 2002 first quarter were $54.4
million as compared to $74.4 million in the year ago quarter.
The decline in sales reflects a decrease in demand from existing
customers in response to the economic downturn. Operating income
for the first quarter of 2002 was $1.7 million compared to
operating income of $2.6 million in the year ago quarter.

The net loss available to common shareholders for the fiscal
2002 first quarter was $428 thousand compared to a net loss of
$201 thousand in the comparable year ago period.

William D. Morton, Chairman and Chief Executive Officer of
Morton Industrial Group, Inc. stated: "We are pleased that our
2001 Restructuring Plan which is nearly completed, has lowered
our operating costs to a near break even level on such a drastic
reduction of unit volume demand across our customer landscape.
The finishing of that effort using Six Sigma methodologies and
the introduction of numerous new customer awards causes us to
believe that we are positioned to return to profitability as the
economic climate changes favorably for our customers."

Morton Industrial Group, Inc. is a supplier of highly engineered
metal and plastic components and subassemblies for large
industrial original equipment manufacturers. The Company
provides large industrial original equipment manufacturers with
a wide range of services including design, prototype
development, precision tool making and production of metal
fabrications and plastic component parts. At the completion of
our restructuring, we will operate eleven manufacturing
facilities in the Midwestern and Southeastern United States
strategically located near our customers' manufacturing and
assembly facilities. Morton's principal customers include B/E
Aerospace, Bombardier, Caterpillar Inc., Compaq Computer
Corporation, Deere & Company, EMC Corp., GE Appliances, and
Honda of America Mfg., Inc.

Morton Industrial Group, at December 31, 2001, reported a total
shareholders' equity deficit of about $20 million.


NATIONSRENT INC: Deutsche Financial Seeking Adequate Protection
---------------------------------------------------------------
Deutsche Financial Services asks the Court to direct NationsRent
Inc., and its debtor-affiliates to provide Deutsche Financial
adequate protection in its interests in certain inventory of the
Debtors. Deutsche Financial holds a perfected security interest
in certain items of the Debtors' inventory and related proceeds.
The inventory secures extensions of credit made by Deutsche
Financial to Logan Equipment Corp. and its, acquirer, NRI/LEC
Merger Corp., Inc. NRI/LEC is a former subsidiary of
NationsRent, Inc. which is now part of NationsRent USA, Inc.

In alternative, Deutsche Financial asks the Court to modify the
automatic stay so that it may recover the inventory and other
assets of the Debtors. The Debtors and Deutsche Financial have
had discussions concerning the provision of adequate protection
by the Debtors to Deutsche Financial. However, the Debtors have
been unwilling to provide Deutsche Financial with adequate
protection and discussions have failed to result in any
agreement.

Brett D. Fallon, Esq., at Morris, James, Hitchens & Williams LLP
in Wilmington, Delaware, claims that Deutsche Financial is
entitled to adequate protection of its interest in the inventory
because the use of the inventory confers significant benefit
upon the Debtors' estates by providing the Debtors with
equipment necessary to the operation of the Debtors' rental
business. The Debtors continue to rent the equipment with no
commensurate value being transferred to Deutsche Financial.
Although the Debtors own the inventory, it remains subject to a
security interest in favor of Deutsche Financial.

According to Mr. Fallon, Deutsche Financial, as administrative
agent and as lender, and Logan are parties to a Credit Agreement
pursuant to which the parties established the terms and
conditions of certain revolving loans. To secure all Loan
Obligations, Logan granted Deutsche Financial a blanket security
interest in substantially all of Logan's assets, including but
not limited to chattel paper. On December 11, 1998, NRI/LEC
acquired all of the stock of Logan. Subsequently, NRI/LEC
entered into a Term Loan Promissory Note with Deutsche Financial
wherein Deutsche Financial agreed to make a term loan to NRI/LEC
in the original principal amount of $32,138,462. NRI/LEC
promised to pay such amount with interests to Deutsche
Financial. The original maturity date of the term note was March
11, 1999, and a non-default interest thereon is calculated based
on the LIBOR rate plus 2.75%.

Mr. Fallon continues that, on January 11, 1999, NRI/LEC changed
its name to Logan Equipment Corp. Thereafter, on June 30, 1999,
it transferred substantially all of its assets to NationsRent
USA. Proceeds of borrowing under the term note were used to
satisfy certain obligations of NRI/LEC under the credit
agreement. Eventually, on October 31, 2001, Deutsche Financial
and NationsRent USA amended the term note to:

a. establish modified and additional payments, including certain
    periodic payments of principal in addition to monthly
    interest payments;

b. change all references in the term note from NRI/LEC or Logan
    Equipment Corp. to NationsRent USA, Inc.; and,

c. change the maturity date to December 31, 2001.

To further secure amounts owed by NRI/LEC (and subsequently
NationsRent USA), NRI/LEC, in their security agreement dated
December 11, 1998, granted Deutsche Financial security interest
in the following collateral:

A. The certain items of the Debtors' inventory;

B. All attachments, parts, accessions, accessories, and
    replacements to that inventory; and,

C. All proceeds of that inventory.

NRI/LEC and Deutsche Financial also executed a guarantee of
payment for all current and future liabilities owed by NRI/LEC
to Deutsche Financial. Deutsche Financial has made the
appropriate UCC filings in various jurisdictions as necessary to
prefect its security interest in the inventory and the
collateral.

Mr. Fallon maintains that the Debtors are in default of their
obligations pursuant to the term note by failing to make any
payment upon maturity of the term note on December 31, 2001, or
otherwise to make payments of interest or principal, including
interest payments due January 15, 2002 and thereafter. The
amounts owed by the Debtors to Deutsche Financial as of the
petition date was not less than $7,925,473, consisting of unpaid
principal in the amount of $7,908,489 and unpaid interest worth
$16,984.  A sum of $84,689 was paid to Deutsche Financial by the
Debtors subsequent to the petition date; which sum represented
the proceeds from the post-petition sale of an item of equipment
in the inventory. No post-petition payments of principal or
interest have otherwise been made to Deutsche Financial. As of
April 5, 2002, the unpaid amount owed by the Debtors is not less
than $7,823,800.

To provide adequate protection, Mr. Fallon submits that Deutsche
Financial must receive payments from the Debtors in an amount
reflective of the diminution in value of the inventory since the
petition date, including but not limited to monthly payments of
interest, plus a monthly payment amount as determined at hearing
of this Motion sufficient to compensate Deutsche Financial for
the continuing depreciation in value of the inventory. Deutsche
Financial is also entitled to non-monetary protection of its
interest pursuant to the Debtors' obligation to ensure that the
inventory is insured, maintained and not removed from particular
locations as set forth in the security agreement. (NationsRent
Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


NEWCOR INC: Delaware Court Okays Kirkland & Ellis as Attorneys
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gives
Newcor, Inc. and its debtor-affiliates authority to employ
Kirkland & Ellis as attorneys in their chapter 11 cases.  James
H.M. Sprayregen, Esq., and Jonathan S. Henes, Esq., lead the
Debtors' legal team from K&E's Chicago office.

The Debtors believe that the employment of Kirkland & Ellis
under a general retainer is appropriate and necessary to enable
them to execute their duties faithfully as debtors and debtors
in possession and to implement their restructuring and
reorganization.

As attorneys, Kirkland & Ellis is expected to:

      a. take all necessary action to protect and preserve the
         estates of the Debtors, including the prosecution of
         actions on the Debtors' behalf, the defense of any
         actions commenced against the Debtors, the negotiation
         of disputes in which the Debtors are involved and the
         preparation of objections to claims filed against the
         Debtors' estates;

      b. prepare on behalf of the Debtors, as debtors in
         possession, all necessary motions, applications,
         answers, orders, reports, and other papers in connection
         with the administration of the Debtors' estates;

      c. negotiate and prepare on behalf of the Debtors a plan of
         reorganization and all related documents; and

      d. perform all other necessary legal services in connection
         with the prosecution of these chapter 11 cases.

Kirkland & Ellis received approximately $400,000 for prepetition
services.  The Debtors will pay Kirkland & Ellis its customary
hourly rates.  Mr. Spayregen says those rates are "consistent
with the rates charged in non-bankruptcy matters of this type."
Actual hourly billing rates are not disclosed.

Newcor, Inc., along with its subsidiaries, design and
manufacture a variety of products, principally for the
automotive, heavy-duty, capital goods, agricultural and
industrial markets. The Company filed for chapter 11 protection
on February 25, 2002 Laura Davis Jones, Esq. at Pachulski,
Stang, Ziehl Young & Jones P.C. represents the Debtors in their
restructuring efforts.  When the Debtors filed for protection
from its creditors, it listed $141,000,000 in total assets and
$181,000,000 in total debts.


O'SULLIVAN INDUSTRIES: Mar. 31 Balance Sheet Upside-Down by $55M
----------------------------------------------------------------
O'Sullivan Industries Holdings, Inc. (OTC Bulletin Board:
OSULP), a leading manufacturer of ready-to-assemble furniture,
reported its fiscal 2002 third quarter and nine month results
for the period ended March 31, 2002.  O'Sullivan also announced
that it has reached a settlement with RadioShack on payments
related to the Tax Sharing Agreement between the two companies.

                     Third Quarter Results

Net sales for the third quarter were $105.5 million, an increase
of 8.1% from sales of $97.6 million in the comparable period a
year ago.  Net sales have been adjusted to reflect the adoption
this quarter of an accounting pronouncement that reclassifies
certain selling expenses to a reduction of net sales.

Operating income for the third quarter was a record $15.3
million, an increase of 37.8% from operating income of $11.1
million in the comparable period a year ago.

Net loss for the third quarter was $7.3 million.  For the
quarter, we recorded tax expense of $16.6 million, of which
$13.4 million was a deferred tax valuation allowance related to
the RadioShack settlement.  Excluding the valuation allowance,
net income would have been $6.0 million, compared to net income
of $1.0 million in the comparable period a year ago.

Adjusted EBITDA for the third quarter was a record $19.4
million, or 18.4% of net sales, an increase of 32.0% from $14.7
million, or 15.1% of net sales, for the comparable period a year
ago.  The attached table reconciles net income to adjusted
EBITDA.

"We are pleased to be the only public company among our nearest
competitors to report a sales gain for the March quarter.  The
operational results we announced [Tues]day, in our opinion,
represent the beginning of a reversal in the sales decline our
industry recently experienced," said Richard Davidson, president
and chief executive officer.  "While we anticipate that the
expected business recovery will be moderate in its pace, we also
believe that our sales results demonstrate that we are well
positioned across all our major distribution channels to benefit
from improving retail point-of- sale results.

"We also achieved a record level in our adjusted EBITDA in both
dollars and as a percent of sales as we continue to improve our
operations to be more efficient and focused on cost
containment," continued Mr. Davidson. "Our cash flow performance
remained strong as a result of disciplined management of working
capital and a reduction in capital expenditures.  Our operating
capacity and cost structure have positioned O'Sullivan Furniture
to continue capturing market share at America's leading
retailers."

For the quarter, net cash provided by operating activities was
$19.8 million, compared to $6.8 million in the comparable period
a year ago.  Year- over-year third quarter inventory levels
declined from $55.5 million to $39.7 million at March 31, 2002,
a reduction of $15.8 million, or 28.5%.  We will, however,
increase our inventory levels during this quarter to support
expected sales levels this fall.  Accounts receivable levels
declined slightly to $56.3 million from $56.7 million, even with
the year-over-year sales increase during the quarter.  Also,
controlled spending resulted in current third quarter capital
expenditures dropping to $1.1 million from $5.8 million in the
comparable fiscal 2001 period.

                Fiscal 2002 Results Year to Date

Net sales for the first nine months of fiscal 2002 were $272.0
million, down less than 1% from $274.6 million in the comparable
period a year ago.

Operating income for the first nine months of fiscal 2002 was
$30.1 million, an increase of 132% from operating income of
$12.9 million in the comparable period a year ago. Operating
income in the prior year included a $10.5 million pre-tax
restructuring charge.

Net loss for the first nine months of fiscal 2002 was $7.6
million, compared with a net loss of $8.9 million in the
comparable period a year ago. The current year net loss includes
tax adjustments related to the RadioShack settlement.  The prior
year net loss included a $10.5 million pre-tax restructuring
charge.  On a comparable basis without these charges, net income
would have been $5.7 million for the nine months ended March 31,
2002 compared to a net loss of $2.0 million for the prior year
nine months.

Net loss attributable to common stockholders for the first nine
months of fiscal 2002 was $16.8 million, unchanged from the net
loss attributable to common stockholders of $16.8 million in the
comparable period a year ago.

Adjusted EBITDA for the first nine months of fiscal 2002 was
$41.7 million, or 15.3% of net sales, up from $35.4 million, or
12.9% of net sales, for the comparable period a year ago.

The lower net income levels reflect the increased level of debt
and related interest expense associated with O'Sullivan's
leveraged recapitalization in November 1999.  However, a
sizeable amount of income- reducing expenses are non-cash
charges.  These expenses include non-cash interest as shown on
the attached schedule consisting of:

      -- O'Sullivan Holdings note,

      -- the change in market value of the interest rate collar,
         and

      -- the amortization of debt discount and loan fees.

Note:  The dividends and accretion on preferred stock are also a
non-cash item.

      RadioShack Arbitration Settlement in Principle Reached

In 1994, RadioShack sold O'Sullivan stock to the public through
an initial public offering.  During this process RadioShack
"stepped-up" O'Sullivan's asset values under an IRC Section
338(h)(10) election.  Most of the increase was Section 197
goodwill that was to be amortized over a 15-year period for tax
purposes.  RadioShack paid taxes on the asset value increase and
O'Sullivan signed a Tax Sharing Agreement with RadioShack.
Under the agreement, O'Sullivan would pay RadioShack 95% of the
federal income tax benefit received from the reduction in
taxable income due to the additional goodwill deduction.

Prior to O'Sullivan's merger and recapitalization in November
1999, the amount we paid RadioShack under the Tax Sharing
Agreement was approximately what we would have paid the IRS in
taxes. After the recapitalization, we calculated our payments to
RadioShack using the increased interest expense from the
recapitalization. RadioShack believed that the increased
interest expense should not be used in calculating the payments
due them under the Tax Sharing Agreement.  This disagreement led
to the recent arbitration hearing.

In response to an adverse opinion from the arbitration panel,
O'Sullivan and RadioShack reached a settlement to bring an end
to this issue.  O'Sullivan agreed to pay RadioShack $24.6
million for payments due RadioShack through March 31, 2002.
RadioShack agreed to waive any potential interest and attorney
fees.  Future payments due RadioShack will be calculated without
using the increased interest expense associated with the
recapitalization.

The disagreement with RadioShack on the interpretation of the
Tax Sharing Agreement has been about the timing of payments.
Under O'Sullivan's interpretation, the payments would have been
approximately the amount of reduced income taxes otherwise
payable to the IRS.  Under the settlement, the Company will pay
RadioShack more than the current benefits it receives, but these
payments will create a deferred tax asset that O'Sullivan may be
able to use to offset future taxable income.

In order to make the payment to RadioShack, O'Sullivan has
amended its senior secured credit facility.  The amendment
waives the payment of taxes through June 30, 2002 from the
calculation of the fixed charge covenant.  The Company is in
compliance with all of our debt covenants.

At March 31, 2002, as can be seen on the attached balance sheet,
O'Sullivan had approximately $38.5 million in cash on hand, more
than enough cash available to make the $24.6 million payment to
RadioShack.  In fact, after making the payment to RadioShack,
our cash and cash equivalents balance is still approximately the
same as last year's $13.4 million. O'Sullivan's operations are
currently generating more than sufficient cash to make this and
future payments to RadioShack.

                          Conclusion

Mr. Davidson concluded, "We are pleased to have reached an
agreeable settlement with RadioShack in regards to our
arbitration.  This settlement will allow O'Sullivan Furniture to
focus all of its resources on continuing to improve our sales
and EBITDA.  O'Sullivan Furniture's performance during this
latest quarter and nine months demonstrates our company's
potential.  We are expecting a strong fourth quarter with sales
growth in the mid-single digit range and double-digit EBITDA
growth."

At March 31, 2002, O'Sullivan Industries' total shareholders'
equity deficit stands at $54.8 million.


PACIFIC GAS: Proposes Uniform Voting & Balloting Procedures
-----------------------------------------------------------
Assuming the CPUC Disclosure Statement is promptly approved by
the Bankruptcy Court, Pacific Gas and Electric Company and the
California Public Utilities Commission anticipate that the
solicitation process for the Chapter 11 Plan of Reorganization
for PG&E filed by CPUC and that filed by PG&E and its corporate
parent PG&E Corp. will be coordinated, such that both plans will
be presented simultaneously to creditors and interest holders
for acceptance or rejection.

By this Motion, PG&E and the CPUC seek the Bankruptcy Court's
approval of uniform voting and balloting procedures.

PG&E and the CPUC ask Judge Montali to approve:

      * Procedures proposed for soliciting the votes of impaired
classes of creditors and interest holders on the PG&E Plan and
the CPUC Plan.

      * Proposed Voting Ballots and balloting procedures.

      * Proposed voting schedule for both Plans.

      * Proposed procedures for tabulating votes of impaired
creditors and/or interest holders with respect to acceptance or
rejection of each of the Plans.

      * Proposed date by which each of PG&E and the CPUC must
deliver, or arrange to be delivered to the Voting Agent, all
documents to be included in the Solicitation Package and all
Notices referenced in this Section.

      * Proposed Notice to be sent to California State Agencies.

      * Proposed Notices to be sent to parties to executory
contracts and un-expired leases to be (i) assumed, (ii) assumed
and assigned, or (iii) rejected, pursuant to either the PG&E
Plan or the CPUC Plan.

      * Proposed Notices, to be sent to Non-Voting Parties:

         (i)  holders of claims or interests ineligible to vote
to accept or reject the Plans (including holders of Disputed
Claims whose claims have not been allowed for voting pursuant to
Bankruptcy Rule 3018(a)), and

        (ii) parties to executory contracts and un-expired leases
who do not hold filed or scheduled claims.

      * Waive from having to send the PG&E Plan and PG&E
Disclosure Statement to the Non-Voting Parties.

      * Proposed Notice of Orders approving this Motion and,
inter alia,

    (1) establishing the Voting Record Date;

    (2) approving Notices of Non-Voting Status;

    (3) approving solicitation procedures, forms of voting
        ballots, voting timetable and tabulation procedures;

    (4) approving Notices to Parties to Executory Contracts;

    (5) approving the Notice to State Agencies; and

    (6) fixing the date, time, and place for the Confirmation
        Hearing and the deadline for filing objections to
        confirmation.

                 Voting Agent for Both Plans

With Judge Montali's permission, PG&E retained Innisfree M&A
Incorporated to act as the voting agent for the PG&E Plan.

The Voting Agent will coordinate all mailings related to the
PG&E Plan (including both voting and non-voting documents),
respond to inquiries from creditors, equity security holders and
other interested parties.  The Agent will also receive and
account for all Voting Ballots, and tabulate the votes.  In
addition, the Voting Agent will assist in researching certain
information regarding equity security holders and bondholders.

In order to coordinate the efforts of mailing, soliciting and
tabulating votes for both Plans, it will be necessary to expand
the Voting Agent's role to perform the same functions with
respect to the CPUC Plan. PG&E suggests that the Voting Agent be
instructed to distribute concurrently the PG&E Disclosure
Statement and Plan and the CPUC Disclosure Statement and Plan,
together with any relevant notices or other documents, and that
certain of the same procedures for the PG&E Plan be employed for
the CPUC Plan. The incremental costs associated with the CPUC
Plan (including, without limitation, copying, postage, and
services of the Voting Agent) will be borne by the CPUC.

                    Voting Eligibility

A.  Voting Classes - PG&E Plan And CPUC Plan.

Section 1126 of the Bankruptcy Code provides that only holders
of allowed claims or equity interests that are impaired under a
Chapter 11 plan of reorganization are entitled to vote to accept
or reject the Plan. Unimpaired classes are deemed to accept the
plan, and classes in which the holders will receive no recovery
under a Chapter 11 plan are deemed to reject the plan.

Under the PG&E Plan, 10 classes or subclasses of claims and
equity security interests are impaired and are therefore
entitled to vote to accept or reject the PG&E Plan.  There are
10 classes or subclasses of claims and equity security interests
that are unimpaired, and therefore not entitled to vote on the
PG&E Plan.

Under the CPUC Plan, 7 classes or subclasses of claims and
equity security interests are impaired and are therefore
entitled to vote to accept or reject the CPUC Plan.  There are
12 classes or subclasses of claims and equity security interests
that are unimpaired, and therefore not entitled to vote on the
CPUC Plan.

B.  Voting Record Date

Bankruptcy Rule 3017(d) and 3018(a) provide for the
determination of a Record Date of creditors and interest for
plan voting purposes. Only holders of claims/interests of record
of that date are entitled to vote on the Plan. The voting record
date is typically the date the Court issues its order approving
the disclosure statement. Under appropriate circumstances,
however, Bankruptcy Rules 3017 and 3018 authorize the Court to
fix a different date following notice and a hearing.

PG&E an CPUC propose setting a common record date that is
sufficiently later than the date the Bankruptcy Court enters its
Order approving the Voting Record Date but also sufficiently
earlier than the Solicitation Commencement Date for both Plans.
They believe that a common record date for both the PG&E Plan
and the CPUC Plan will avoid confusion in soliciting and
tabulating votes.  They believe that it and afford those
entities responsible for assembling ownership lists of publicly
traded debt and equity securities the preparation time necessary
to compile an accurate list of holders.

PG&E and CPUC will make separate requests for the Court to set
the date as the Voting Record Date for both Plans.

C.  Holders Entitled To Vote.

Once the Voting Record Date is determined, it is proposed that
only the following holders of impaired claims and interests be
entitled to vote to accept or reject each of the Plans:

(a) holders of claims, as of the Voting Record Date, that are
     not listed as contingent, un-liquidated, or disputed
     (excluding scheduled claims that have been superseded by
     filed proofs of claims) in PG&E's Amended and Restated
     Schedules filed with the Bankruptcy Court on July 2, 2001,

    (i)  as to which no objection has been filed as of the
         Solicitation Commencement Date; or

    (ii) to the extent an objection has been filed, (x) that have
         been temporarily allowed prior to the Voting Deadline
         for the voting purpose pursuant to Bankruptcy Rule
         3018(a), (y) that have been allowed by the Bankruptcy
         Court for any purpose pursuant to the Bankruptcy Court's
         ruling on such objection prior to the Voting Deadline,
         or (z) that are otherwise entitled to vote on account of
         meeting the criteria in subsection (c) below;

(b) holders of filed proofs of claim or interest listed, as of
     the Voting Record Date, on the official claims register
     maintained by Robert L. Berger & Associates, LLC, the Claims
     Agent appointed by the Bankruptcy Court,

    (i)  as to which no objection has been filed as of the
         Solicitation Commencement Date; or

    (ii) to the extent an objection has been filed, (x) that have
         been temporarily allowed prior to the Voting Deadline
         for the voting  purpose of accepting or rejecting such
         Plan pursuant to Bankruptcy Rule 3018(a), (y) that have
         been allowed by the Bankruptcy Court for any purpose
         pursuant to the Bankruptcy Court's ruling on such
         objection prior to the Voting Deadline, or (z) that are
         otherwise entitled to vote on account of meeting the
         criteria in subsection (c) that immediately follows; and

(c) registered record holders of PG&E bonds, notes, debentures,
     or shares of stock, and beneficial owners holding such
     securities through nominee holders, in each case as of the
     Voting Record Date, as evidenced by the records of the
     applicable trustee or transfer agent, as well as the records
     of The Depository Trust Company, Euroclear, and Clearstream.
     (The Depository Trust Company is the central depository for
     the vast majority of securities held in "street name" in the
     United States. Euroclear and Clearstream are the two
     principal depositories in Europe holding on behalf of
     nominees and other holders.)

D.  Notices Of Non-Voting Status.

1.  No copies of Plan or Disclosure Statement to Non-Voting
     Classes

     Pursuant to Bankruptcy Rule 3017(d), the Movants request the
     Bankruptcy Court to direct that neither PG&E nor the CPUC
     need mail copies of the Plan and Disclosure Statement to any
     holders of claims or interests in a PG&E Unimpaired Class or
     CPUC Unimpaired Class, to parties to executory contracts and
     un-expired leases who do not hold filed or scheduled claims,
     or to holders of Disputed Claims under either of the Plans,
     unless otherwise requested of the Voting Agent in writing by
     facsimile (212-446-3605) or e-mail (pge@innisfreema.com).

2.  Opportunity to Express Preference By Classes 3 and 4a under
     CPUC Plan

     The CPUC will however, provide holders of Claims in Classes
     3 and 4a under the CPUC Plan copies of the CPUC Plan and
     Disclosure Statement so that such Claim holders have the
     opportunity to express a preference for either the PG&E Plan
     or CPUC Plan in accordance with the joint ballot to be
     provided to holders of Claims in Classes 3 and 4a.

3.  Copies of Plans and Disclosure Statements to Preferred Stock
     Holders

     The Movants intend to provide copies of the respective Plan
     and Disclosure Statement, as well as Voting Ballots, to
     holders of Preferred Stock Equity Interests as a
     precautionary measure because certain holders of such
     interests may contend that their interests are impaired.

4.  Joint Notice of Non-Voting Status

     The proposed joint Notice of Non-Voting Status to
     Holders of Claims or Equity Interests in Unimpaired Classes,
     identifies the PG&E Unimpaired Classes (1, 2, 4b, 4d, 4f,
     4g, 8, 10, 12 and 13) and CPUC Unimpaired Classes (1, 2, 3,
     4a, 4b, 4d, 4f, 4g, 8, 10, 12 and 13) and informs the
     members of such classes that they hold unimpaired claims or
     interests under the PG&E Plan and/or the CPUC Plan, and thus
     are conclusively presumed to have accepted the PG&E Plan
     and/or the CPUC Plan pursuant to Section 1126(f) of the
     Bankruptcy Code.

     With respect to "beneficial owners" of securities issued by
     PG&E who hold their interests through a "nominee holder,"
     such as bondholders and stockholders who hold their
     securities through a bank or brokerage firm, they request
     the Bankruptcy Court to direct all nominee holders to
     forward PG&E's and the CPUC's Notice of Non-Voting Status to
     Holders of Claims or Equity Interests in Unimpaired Classes,
     to the beneficial owners within 5 business days of receipt
     by such nominee holders of the Notice.

     In addition, the movants propose to mail (i) a joint Notice
     to Parties to Executory Contracts, to all known parties to
     executory contracts and un-expired leases who do not hold
     filed or scheduled claims (excluding claims scheduled as
     contingent, un-liquidated, or disputed) under the PG&E Plan
     and CPUC Plan, and (ii) a joint Notice to Holders of
     Disputed Claims, to all holders of Disputed Claims under the
     PG&E Plan and CPUC Plan.

     These Notices will inform such parties that they are not
     entitled to vote on either the PG&E Plan or CPUC Plan. They
     submit that these Notices, to be mailed at the same time as
     the Solicitation Packages are mailed to holders of impaired
     claims and interests entitled to vote to accept or reject
     one or both of the Plans, satisfy the requirements of
     Bankruptcy Rule 3017(d).

                Solicitation And Balloting Process

A.  Solicitation.

Pursuant to Bankruptcy Rule 3017(d), the Movants propose that
the court authorize and direct the Voting Agent and nominee
holders to send the following materials (collectively, the
"Solicitation Package") to all persons entitled to vote on the
PG&E Plan and/or the CPUC Plan:

(1) An appropriate Voting Ballot,;

(2) Copies of the PG&E Plan and the PG&E Disclosure Statement;

(3) Copies of the CPUC Plan and the CPUC Disclosure Statement;

(4) The Notice of Orders; and

(5) Any other documents approved by the Bankruptcy Court.

The Movants propose to mail the Solicitation Package to the
following persons entitled to vote on the PG&E Plan and/or the
CPUC Plan:

(a) Holders of allowed claims, as of the Voting Record Date,

(b) Holders of valid filed proofs of claim,

(c) Registered holders, as of the Voting Record Date, of PG&E
      bonds, notes, debentures, or shares of stock or nominee
      holders for beneficial owners of PG&E bonds, notes,
      debentures, or shares of stock

B.  Voting Ballots.

Separate Voting Ballots have been prepared for each of the 11
PG&E Voting Classes (including Class 13) in the PG&E Plan and
each of the eight CPUC Voting Classes (including Class 13) in
the CPUC Plan. These Voting Ballots allow the PG&E Voting
Classes and CPUC Voting Classes (i) to vote to accept or reject
the PG&E Plan, (ii) to vote to accept or reject the CPUC Plan
and (iii) to indicate a preference between the Plans, to the
extent both of the Plans are accepted (either by a vote or by
deemed acceptance pursuant to Bankruptcy Code Section 1129(f)).

In addition, Movants have agreed, subject to the court's
approval, to allow creditors in Classes 3a, 3b and 4a entitled
to vote on the PG&E Plan to express a preference as between the
PG&E Plan and the CPUC Plan, notwithstanding the fact that under
the CPUC Plan such creditors are unimpaired and deemed to have
accepted the Plan.

With respect to holders of publicly held debt securities or
equity interests issued by PG&E, PG&E has prepared two types of
proposed Voting Ballots:

(1) a "Beneficial Owner Ballot" to be submitted by registered
     holders of PG&E bonds, notes, debentures, or shares of stock
     as of the Voting Record Date and beneficial owners holding
     their voting securities through nominee holders; and

(2) a "Master Ballot" to be submitted by nominee holders on
     behalf of beneficial owners of PG&E bonds, notes,
     debentures, or shares of stock as of the Voting Record Date.

PG&E has also prepared a proposed "Claim Holder Ballot" for all
other types of claims. A special ballot for holders of claims in
Classes 3a, 3b and 4a entitled to vote under the PG&E Plan has
also been prepared.

With respect to registered holders of allowed claims or
interests (e.g., debt security holders or stockholders of
record) entitled to vote on the PG&E Plan and/or the CPUC Plan,
the Movants propose that the Voting Agent will send Solicitation
Packages directly to them and the registered holders in turn
will submit their Voting Ballots directly to the Voting Agent.

The Movants propose that beneficial owners, on the other hand
(e.g., bondholders or stockholders who hold their securities
through nominee holders such as banks or brokerage firms), will
receive their Solicitation Packages through their nominee
holders, and that such nominee holders will have two options.
They may pre-validate the beneficial owners' Voting Ballots and
instruct the beneficial owners to directly submit their votes to
the Voting Agent. If the nominee holder chooses not to
prevalidate the beneficial owners' individual ballots, but to
instead process the beneficial owners' individual ballots, the
nominee holder shall summarize the beneficial owners' votes on a
Master Ballot and submit the Master Ballot to the Voting Agent.

C.  Voting Schedule.

The Movants ask the Bankruptcy Court to approve the following
schedule, which is premised on solicitation commencing on June
17, 2002. To the extent the Solicitation Commencement Date
changes pursuant to the court's order, they propose that the
dates be adjusted accordingly, without the need for further
Court order:

(1) Submission of Documents to the Voting Agent.

     Each of PG&E and the CPUC will cause to be delivered to the
     Voting Agent any and all documents to be included in the
     Solicitation Package no later than the date designated by
     the Voting Agent as the deadline for its receipt of such
     materials in order to comply with the voting schedule
     described below.

(2) Preliminary Mailing to Nominee Holders [10 business days
     prior to the Solicitation Commencement Date]:

     The Voting Agent may begin distributing elements of the
     Solicitation Packages to nominee holders of PG&E bonds,
     notes, debentures, notes, shares of stock, or other
     securities in the Voting Classes, as well as Class 13, on
     June 3, 2002. During this preliminary mailing period,
     nominee holders may prepare their mailings to their
     respective beneficial owners but may not mail them. During
     this period, the Voting Agent will also prepare the
     Solicitation Packages to be sent to registered holders of
     claims and equity security interests.

(3) Mailing to Registered Holders of Claims and Interests and to
     Beneficial Owners [end date of 10 business day preliminary
     mailing period]: (the "Solicitation Commencement Date").

     On June 17, 2002, the Voting Agent and nominee holders of
     PG&E bonds, notes, debentures, shares of stock, or other
     securities will mail the Solicitation Packages to the
     registered holders of claims or interests and beneficial
     owners of PG&E bonds, notes, debentures, shares of stock, or
     other securities in the PG&E Voting Classes and the CPUC
     Voting Classes, as well as Class 13 (with respect to the
     PG&E Plan and the CPUC Plan).

(4) Voting Deadline [end of 8-week period beginning on the
     Solicitation Commencement Date]:

     Pursuant to Bankruptcy Rule 3017(c), persons entitled to
     vote, in order for the Voting Agent to count their votes,
     must properly complete, execute, and deliver their Voting
     Ballots to the Voting Agent or, in certain cases, to their
     nominee holder by mail, overnight mail, or personal delivery
     so that the Voting Agent or nominee holder, if applicable,
     receives such Ballots no later than 5:00 p.m. Eastern Time
     on August 9, 2002 (the "Voting Deadline"), unless the
     Bankruptcy Court extends the Voting Deadline. Nominee
     holders will have up to three additional business days to
     transmit Master Ballots to the Voting Agent. The Voting
     Agent must, however, receive all Master Ballots no later
     than 5:00 p.m. Eastern Time on the third business day after
     the Voting Deadline.

                      Tabulation Procedures

A. Claim Amount.

For purposes of tabulating the votes of creditors and interest
holders with respect to acceptance or rejection of the PG&E
Plan, PG&E proposes to specify each creditor's or interest
holder's PG&E Voting Class under the PG&E Plan and undisputed
claim or interest amount.

Likewise, for purposes of tabulating the votes of creditors and
interest holders with respect to acceptance or rejection of the
CPUC Plan, the CPUC proposes to specify each creditor's or
interest holder's CPUC Voting Class under the CPUC Plan and
undisputed claim or interest amount.

The Movants submit that voting creditors and interest holders
may vote only the undisputed portion of their respective claims
and interests, unless otherwise ordered by the Bankruptcy Court.
The claim or interest amount eligible to vote shall be based on
one of the following:

(1) The amount set forth on a filed proof of claim or interest
     which: (a) is not the subject of a pending objection (or, if
     the subject of a pending objection, to the extent not
     subject to objection); (b) has not been disallowed,
     disqualified, and reduced; and (c) has not been estimated
     and/or temporarily allowed for voting purposes prior to the
     Voting Deadline;

(2) The amount set forth as a claim or interest in PG&E's
     Schedules as not contingent, un-liquidated, or disputed
     (excluding scheduled claims that have been superseded by
     filed claims) which (a) is not the subject of a pending
     objection (or, if the subject of a pending objection, to the
     extent not subject to objection); (b) has not been
     disallowed, disqualified, and reduced; and (c) has not been
     estimated and temporarily allowed for voting purposes prior
     to the Voting Deadline;

(3) The amount estimated and/or temporarily allowed for voting
     purposes prior to the Voting Deadline with respect to a
     claim or equity interest pursuant to an order of the court;
     or

(4) For securities claims and equity interests, the amount
     evidenced by the records of the trustee or transfer agent,
     as well as the records of The Depository Trust Company,
     Euroclear, Clearstream, or of the individual nominees
     holding the securities, except that in no event shall a
     nominee be entitled to vote in excess of its position in The
     Depository Trust Company or as a registered holder.

For claims allocated among different PG&E Voting Classes or
among different CPUC Voting Classes, the holders of the claims
will receive separate Voting Ballots for each PG&E Voting Class
or CPUC Voting Class, as the case may be. These claimants will
accordingly be entitled to vote in more than one PG&E Voting
Class or CPUC Voting Class based on the amount of their claim
attributable to each PG&E Voting Class or CPUC Voting Class.

B.  Vote Tabulation.

Pursuant to Sections 105 and 1126 of the Bankruptcy Code, the
Movants request that the Bankruptcy Court approve the following
vote tabulation guidelines:

(1)  The Voting Agent will not count any Voting Ballot that does
      not indicate an acceptance or rejection of one or both
      Plans;

(2)  The Voting Agent will not count any Voting Ballot that is
      returned to the Voting Agent unsigned;

(3)  Pursuant to Rule 3018(a), the Voting Agent will count only
      the first timely Voting Ballot it receives from a creditor
      or interest holder, unless, unless change is authorized by
      the Court for cause after notice and hearing;

(4)  The Voting Agent will not count any Voting Ballot that is
      received after the pertinent voting deadline even if
      postmarked or otherwise sent prior to such deadline, unless
      the Bankruptcy Court extends such deadline;

(5)  The Voting Agent will not count any Voting Ballot that the
      Voting Agent determines is not legible;

(6)  The Voting Agent will not count any Voting Ballot
      transmitted via facsimile or any other electronic means,
      except, for voting confirmations received from Euroclear or
      Clearstream which may be transmitted electronically as
      customary;

(7)  The Voting Agent will not count any individual Voting
      Ballot that purports to partially accept and partially
      reject one or both of the Plans; each creditor or interest
      holder will therefore vote all of a claim or interest
      within a particular PG&E Voting Class or CPUC Voting Class
      either to accept or reject one or both of the Plans;

(8)  The Voting Agent will not count any Voting Ballot of a
      creditor or interest holder that is duplicative of a Voting
      Ballot of another creditor or interest holder;

(9)  Each creditor or interest holder will be deemed to have
      voted the full amount of its undisputed claim or interest
      as of the Voting Record Date, within a particular PG&E
      Voting Class or CPUC Voting Class, as shown on the records
      provided to the Voting Agent, except that, in the event of
      a conflict, the official records provided to the Voting
      Agent will prevail; and

(10) To the extent that there are over-votes submitted by a
      nominee holder on the Master Ballot or pre-validated
      ballots (or over-votes on the Master Ballot are not
      reconcilable prior to the vote certification) with respect
      to a Plan, votes to accept or reject one or both of the
      Plans will be applied by the Voting Agent in the same
      proportion as the votes to accept or reject the Plan
      submitted on the Master Ballot or pre-validated ballots
      that contain the over-vote, but only to the extent of the
      amount of votes to which such nominee holder is authorized
      to submit as of the Voting Record Date.

(11) For the purposes of tabulating the preferences of those
      PG&E and CPUC Classes entitled to express a preference, a
      preference will only be counted if the creditor or equity
      security holder votes in favor of both Plans and expresses
      a preference for only one of the Plans.

                       Confirmation Hearing

Pursuant to Bankruptcy Rule 2002(b), each of PG&E and CPUC will
provide creditors and interest holders not less than 25-day-
notice of the time fixed for filing objections to confirmation
of the Plan and for the Confirmation Hearing.

In addition, the Movants propose to publish the Notice of Orders
for purposes of, inter alia, providing notice to creditors and
other interested parties who are not readily identifiable or
reachable.

The Movants propose to publish the Notice of Orders at least 25
calendar days prior to the PG&E Plan and CPUC Plan Confirmation
hearing in the following publications: Wall Street Journal
(National Edition); The New York Times (National Edition); San
Francisco Chronicle; Los Angeles Times; Bakersfield Californian;
Fresno Bee; Modesto Bee; Press Democrat (Santa Rosa); Sacramento
Bee; San Jose Mercury News and Stockton Record. The Movants
submit that publication of the Notice of Orders is adequate and
sufficient notice to the creditors, equity security holders and
other interested persons under the circumstances. (Pacific Gas
Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


PACIFICARE HEALTH: S&P Rates $200MM Senior Unsecured Notes at B+
----------------------------------------------------------------
Standard & Poor's assigned its single-'B'-plus rating to
PacifiCare Health Systems Inc.'s $200 million senior unsecured
notes due in 2009. The outlook is negative.

The offering is made pursuant to an exemption from registration
under the Securities Act of 1933, as amended. Proceeds of this
new debt issue will be used to reduce the existing term loan
facilities, which will allow PacifiCare to extend the maturity
date of the existing term debt by two years, to Jan. 3, 2005.

Santa Ana, California-based PacifiCare currently has a good
business position as a regional managed care organization.
Offsetting this strength is the company's below-average
operating performance, marginal capitalization, and high
percentage of goodwill in its capital.

"PacifiCare is expected to complete its debt restructuring
before year-end 2002 and to further improve its earnings
performance with pretax operating income of about $260 million
in 2002," said Standard & Poor's credit analyst Philip Tsang.

With the proposed new debt issue, Standard & Poor's expects the
company's debt-to-capital ratio to remain close to the current
level of about 40%. If PacifiCare is unable to refinance or
extend the maturity of the existing term loan in 2002, or if the
company's 2002 earnings performance does not meet Standard &
Poor's expectation, the ratings on the company will likely be
lowered.


PITTSBURGH CORNING: Reaches Accord to Settle Asbestos Liability
---------------------------------------------------------------
PPG Industries (NYSE:PPG), participating insurers and
representatives of asbestos claimants have reached agreement for
the settlement of all current and future personal injury claims
against PPG and Pittsburgh Corning for asbestos products
manufactured, distributed or sold by the companies.

"This agreement would enable us to put all our asbestos product
claims exposure behind us, most of which is the result of our
50-percent ownership position in Pittsburgh Corning," said
Raymond W. LeBoeuf, chairman and chief executive officer of PPG.
"Although we continue to believe we're not responsible for
Pittsburgh Corning's products, we feel this agreement will
benefit our company and our shareholders in view of the number
of claims and runaway verdicts against other companies."

LeBoeuf said the agreement would be incorporated into a plan of
reorganization for Pittsburgh Corning, which will be submitted
to the federal bankruptcy court in Pittsburgh. The agreement
will become effective 30 days after the reorganization plan is
approved and no longer subject to appeal. This process could
take a year or more, and no payments are required until then. At
that point, PPG will issue certain policy releases and credits
against policy limits to participating insurers in exchange for
their contributions to the fund.

When a final settlement is probable, PPG plans to record an
aftertax charge of about $500 million, reflecting primarily the
current value of cash contributions over a 21-year period, as
well as 1.4 million shares of PPG stock. Also included in the
settlement is the contribution of PPG's shares of Pittsburgh
Corning. PPG's insurers have agreed to make substantial
contributions to the settlement. Payments by insurers and PPG
would total approximately $2.7 billion during the 21 years.

Pittsburgh Corning was established in 1937 to sell glass block
and foamglass low-temperature insulation -- neither of which
contained asbestos. Pittsburgh Corning manufactured asbestos-
containing high-temperature pipe insulation from 1962 to 1972
and filed for bankruptcy in 2000. As a result of the bankruptcy,
PPG wrote down its investment in Pittsburgh Corning with a $35-
million aftertax charge in the first quarter of 2000.

LeBoeuf said the agreement would have no effect on PPG's
operations, including capital spending, dividend policy,
liquidity or the company's commitment to technology and customer
service. The settlement does not include claims against PPG
caused by asbestos exposure on premises owned, rented or
controlled by the company. "These claims are not significant and
are covered by separate insurance agreements," LeBoeuf said.

Under terms of the agreement, a trust would be established for
the benefit of claimants and funded with contributions under the
settlement agreement. The court would also enter a permanent
channeling injunction under Section 524(g) and other provisions
of the Bankruptcy Code, in which all covered claims against PPG
and Pittsburgh Corning are channeled to the trust for payment.
LeBoeuf said although it is possible the injunction might be
challenged, he strongly believes it will withstand legal review.


PITTSBURGH CORNING: Hartford Caps Exposure at $120-$150 Million
---------------------------------------------------------------
The Hartford Financial Services Group, Inc. (NYSE: HIG)
announced its participation, along with several dozen other
insurance carriers, in a settlement in principle by its insured
PPG Industries of litigation arising from asbestos exposures
involving Pittsburgh Corning Corporation, which is 50%-owned by
PPG.

The Hartford's portion of the settlement, which would be drawn
from the company's existing reserves for asbestos claims, is
estimated to be between $120 and $150 million (on a non tax-
affected basis), net of appropriate discounting and net of
anticipated reinsurance recoveries.  The Hartford would not
incur an earnings charge for this exposure.

The settlement is subject to a number of contingencies,
including the negotiation of a definitive agreement among the
parties and approval by the bankruptcy court supervising the
reorganization of Pittsburgh Corning.  It would provide
financial certainty to PPG and its insurance carriers in
connection with these asbestos exposures, and would resolve what
The Hartford today believes is its largest currently known
asbestos exposure.

The structure of the settlement would allow The Hartford to make
fixed payments to a settlement trust over a 20-year period
beginning in 2004. Because the structure of the settlement calls
for future payments over a long period of time, the settlement
would not have an immediate impact on The Hartford's asbestos
survival ratios (defined as carried asbestos reserves divided by
average asbestos claim payments).

The Hartford (NYSE: HIG) is one of the nation's largest
investment and insurance companies, with 2001 revenues of $15.1
billion.  As of March 31, 2002, The Hartford had assets of
$184.9 billion and shareholders' equity of $9.0 billion.  The
company is a leading provider of investment products, life
insurance and group benefits; automobile and homeowners
products; business property and casualty insurance; and
reinsurance.

The Hartford's Internet address is http://www.thehartford.com


POLYMER GROUP: Arranges $125M DIP Financing Package
---------------------------------------------------
Polymer Group, Inc. (NYSE: PGI) announced that in order to
reduce its debt and strengthen its competitive position, the
Company and 20 domestic subsidiaries have filed voluntary
petitions for a "pre-negotiated" reorganization under Chapter 11
of the U.S. Bankruptcy Code, and that the major elements of such
reorganization have the backing of its existing bank group and
the holder of more than two-thirds of its outstanding bonds. In
its filings in the U.S. Bankruptcy Court in Columbia, South
Carolina, the Company indicated that it will reorganize on an
expedited basis and has targeted emergence from Chapter 11
during the third quarter of 2002.

Polymer Group has received commitments for up to $125 million in
debtor-in-possession (DIP) financing from a group of lenders led
by JPMorgan Chase that will be used to fund post-petition
operating expenses and to meet supplier and employee
obligations.

Polymer Group's international operations and joint ventures are
excluded from the filing. There should be no impact on the
ability of non-U.S. entities to continue to meet the needs of
their customers, employees and vendors.

The Company has received support for the major elements of the
reorganization from its existing bank group and the holder of
more than two-thirds of its outstanding bonds to implement the
reorganization. PGI expects to eliminate more than $550 million
in debt through this reorganization.  In addition, the Company
has a commitment for up to $75 million in the form of a new
money investment from CSFB Global Opportunities Partners, L.P.,
a New York-based investment fund.

Polymer Group Chairman, President and CEO, Jerry Zucker, stated,
"We are committed to completing our reorganization as quickly as
possible and we are targeting emergence in the third quarter of
2002.  We expect that the restructuring process will generally
have no impact on the Company's ability to fulfill its
obligations to its customers and employees. During the
restructuring period and beyond, we will continue to operate as
one of the world's leading nonwovens companies and a major
supplier of engineered fabrics. We fully expect that our vendors
and customers will support the steps taken as part of our
program to adjust our capital structure and strengthen the
Company's position for the future. Vendors will be paid for all
products supplied and services rendered after the filing date."

Mr. Zucker also stated, "We made our best efforts to negotiate a
reasonable debt exchange, but unfortunately a number of note
holders were unwilling to make the proposed concessions. I
regret the impact that our filing will have on PGI shareholders,
but after considering a wide range of alternatives, it became
clear that this course of action was the preferable way to
resolve PGI's restructuring challenges in a timely manner. This
step provides us with an expeditious alternative to reduce our
debt and effectively restructure our balance sheet. I am
confident that with the support of our dedicated employees,
suppliers and customers, PGI will emerge as a stronger and more
competitive company."

Through "first day" motions, Polymer Group has requested that
the Court authorize certain actions, including entering into DIP
financing arrangements, continuing wages and benefits to
employees without interruption and permitting the Company to pay
certain pre-petition obligations to various businesses that
are integral to its operations. It is the Company's intention to
submit a reorganization plan within 10 business days which will
include payment in full to all of its vendors, subject to court
approval.

The Company's pension plans and 401K plans are maintained
independently of the Company and are protected under federal
law. The Company will continue to administer the plans as usual.
There are no shares of Polymer Group, Inc. stock held in any of
the plans.

Polymer Group, Inc., the world's third largest producer of
nonwovens, is a global, technology-driven developer, producer
and marketer of engineered materials. With the broadest range of
process technologies in the nonwovens industry, PGI is a global
supplier to leading consumer and industrial product
manufacturers. The Company employs approximately 4,000 people
and operates 25 manufacturing facilities throughout the world.
Polymer Group, Inc. is the exclusive manufacturer of Miratec(R)
fabrics, produced using the Company's proprietary advanced
APEX(R) laser and fabric forming technologies. The Company
believes that Miratec(R) has the potential to replace
traditionally woven and knit textiles in a wide range of
applications. APEX(R) and Miratec(R) are registered trademarks
of Polymer Group, Inc.


PRANDIUM INC: Unit Inks Agreement to Sell Hamburger Hamlet Chain
----------------------------------------------------------------
Prandium, Inc. (OTC Bulletin Board: PDIMQ) announced that its
wholly owned subsidiary, FRI-MRD Corporation, has signed an
agreement for the stock sale of its 14 unit Hamburger Hamlet
concept located in California, Maryland and Virginia to Los
Angeles based Latin Intellectual Properties, Inc.

Latin Intellectual Properties principal, Mr. Brad Gluckstein,
holds a majority interest in LA's renowned latin nightclub, the
Conga Room(R) in LA's Miracle Mile on Wilshire Boulevard.  As
the founder of the Conga Room and a real estate developer,
Gluckstein assembled a group of celebrity investors and
entertainment industry executives in 1996 to open the Conga Room
and subsequently open the upscale, nuevo latino restaurant
adjacent to the club, La Boca.  While not a party to this
transaction, some of the celebrity investors in the Conga Room,
are noted Hollywood, Sports and Music elite such as actress,
musician Jennifer Lopez, actor Jimmy Smits, musician Sheila E.,
comedian Paul Rodriguez, baseball star Bobby Bonilla, movie
producers Gary Foster ("Sleepless in Seattle" and "Tin Cup") and
David Valdes ("The Time Machine" and "The Green Mile"), media
mogul Michael Solomon and music titan, Les Bider (Chairperson of
Warner Chappell Music Publishing).

"Hamburger Hamlet's tremendous brand equity draws from over four
generations in Southern California and now extends to the east
coast with the Washington D.C. and adjacent markets," said
Gluckstein, a Los Angeles native. "Founded in 1950 and rich in
tradition, Hamlet is poised to compete more aggressively in the
casual dining segment and we will provide a continuity of
entrepreneurial spirit, which has so characterized the chain
throughout its storied history."

Under the terms of the sale, Prandium will receive, subject to
certain post-closing adjustments based on a closing balance
sheet, cash proceeds of $15 million ($500,000 of which will be
held in escrow for one year in connection with potential post
closing obligations).  As disclosed in earlier filings, net cash
proceeds from the sale will be used to repay indebtedness
related to the FRI-MRD Note claims involved in Prandium's
capital reorganization currently in progress.  The sale is
expected to close after completion of the Company's
reorganization, but no earlier than July 24, 2002. The sale is
subject to standard closing conditions, including the final
approvals of the Company's senior lender and other standard
third party consents.

Commenting on the Hamlet sale and the progress of the Prandium
reorganization proceedings, Kevin Relyea, Prandium Chief
Executive Officer said, "We feel that this transaction will
benefit Hamlet in that its partnership with Gluckstein and his
newly formed investment group will create an environment that
should provide tremendous visibility for the concept and
establish an even stronger presence in its key markets.  This
transaction, along with the progress we are making in the
restructuring, should position us appropriately to execute our
business plan."

In connection with its reorganization, the Company also
announced that a hearing has been set for June 14, 2002 to
consider court confirmation of the Prandium reorganization plan,
which was previously approved by an overwhelming majority of its
bondholders.

Prandium operates a portfolio of full-service and fast-casual
restaurants including Chi-Chi's(R), Koo Koo Roo(R), and
Hamburger Hamlet and is headquartered in Irvine, California.  To
contact the company call (949) 863-8500, or link to
http://www.prandium.com

Latin Intellectual Properties, Inc., owner/operator of the Conga
Room and La Boca Restaurant, is headquartered in Los Angeles,
California. To contact the company call Evelyn Amaya at (323)
935-0900, or link to http://www.congaroom.com

Prandium, Hamburger Hamlet, Koo Koo Roo, Chi-Chi's and Conga
Room are registered trademarks or service marks of their
respective holders.


PROVELL INC: Look for Schedules and Statements by July 25, 2002
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
granted Provell, Inc. an extension of the time period in which
the Company must file its schedules of assets and liabilities,
statements of financial affairs and lists of executory contracts
and unexpired leases.  The Debtor has until July 25, 2002 to
file those documents and comply with 11 U.S.C. Sec. 521(1).

Provell, Inc., develops, markets and manages an extensive
portfolio of membership and customer relationship management
programs that provide discounts and other benefits to members in
the areas of shopping, travel, hospitality, entertainment,
health/fitness, finance, cooking and home improvement.  The
company filed for chapter 11 protection on May 9, 2002.  Alan
Barry Hyman, Esq., Jeffrey W. Levitan, Esq., David A. Levin,
Esq. at Proskauer Rose LLP represent the Debtors in their
restructuring efforts. When the Debtors filed for protection
from its creditors, they listed $40,574,000 in total assets and
in $82,964,000 total debts.


PSINET: Court Approves First Amended Disclosure Statement
---------------------------------------------------------
After objections were raised by various entities, changes to the
PSINet, Inc.'s Disclosure Statement were made or ordered by the
Court on the record at the May 9 hearing.  As a result, the
First Amended Disclosure Statement With Respect To The Joint
Liquidating Plan, dated May 9, 2002, incorporates these changes:

* Filing of Liquidating LLC Agreement

The Debtors will file with the Bankruptcy Court, by May 28,
2002, a copy of the Liquidating LLC Agreement, which will govern
the operation of the Liquidating LLC to be created under the
Plan. The Liquidating Manager Agreement, which is the employment
contract of the Liquidating Manager, will be attached as an
exhibit to the Liquidating LLC Agreement.

* Substantive Consolidation (Consulting Expressly Excluded)

The following sentence has been added: "The estates of PSINet
Consulting Solutions Holdings, Inc. and any of its direct or
indirect subsidiaries would be expressly excluded from such
substantive consolidation."

* Holders Of Secured Claims Will Retain Liens On Collateral

The amendment provides that the holders of Secured Claims will
retain the liens on their Collateral (including, without
limitation, the provisional liens granted to General Electric
Capital Corporation and Cisco Systems Capital Corporation)
following transfer of assets to the Liquidating LLC, subject to
any rights the Debtors, the Liquidating Manager or the
Creditors' Committee may have to challenge the validity,
perfection or amount of such liens or to seek the avoidance of
such liens.

* Reserves for Disputed Deficiency Claim

With respect to any Disputed Deficiency Claim of an undetermined
amount, the Debtors have added the provision for establishing
reserves at an amount equal to the total Claim of the holder,
and for the Liquidating Manager to deposit a Pro Rata share of
such cash in the Disputed General Unsecured Claims Reserve for
the account of such holder based on that amount. Following any
subsequent determination of the Allowed amount of a Secured
Claim, if the allowed amount of the secured claim is less than
that of the total claim, the Face amount of the Disputed
Deficiency Claim arising from expected liquidation of the
collateral will be reduced. The First Amended Disclosure
Statement and Plan provides that any reserves deposited on
account of that Disputed Deficiency Claim will be adjusted
accordingly, to reflect any corresponding reduction in the Face
Amount of the Disputed Deficiency Claim.

* Interest on Claims

Added provision:

     "If the Debtors or the Liquidating Manager elect to satisfy
      an Allowed Secured Claim by payment of such Claim, interest
      will be paid with respect to such Claim on account of the
      period during which such Claim remained a Disputed Secured
      Claim prior to Allowance to the extent required by
      applicable bankruptcy law."

* Selection of the Liquidating Manager

The First Amended Disclosure Statement and Joint Liquidating
Plan states explicitly:

     "The Liquidating Manager will not be an insider of the
      Debtors nor an outside advisor to the Debtors."

* Preservation of Books and Record upon Wind-Up and Dissolution

The following paragraph has been added:

     "As will be provided in the Liquidating LLC Agreement, the
      Liquidating Manager will secure storage facilities and make
      such arrangements as are necessary in order to store and
      preserve the books and records and communications (written
      and electronic) of the Debtors for a minimum of six months
      after the Effective Date. Documents within the Debtors'
      possession have been the subject of discovery requests by
      certain lead plaintiffs in various securities class action
      cases against PSINet Inc. and certain of its officers and
      directors, and these lead plaintiffs have informed the
      Debtors of their position that adequate provision must be
      made by the Liquidating Manager for the preservation and
      production of such documents following the Effective Date.
      In addition, by an Order dated March 26, 2002, the
      Bankruptcy Court has ordered the Debtors to produce to the
      Chapter 11 Trustee for PSINet Consulting Solutions
      Holdings, Inc. ("PSINet Consulting") certain documents in
      the Debtors' possession that have been determined to be
      property of PSINet Consulting. The Debtors' counsel are in
      the process of reviewing their records to determine which
      documents may be responsive to this request and which may
      be subject to applicable privileges and may require in
      camera review by the Bankruptcy Court. The PSINet
      Consulting Chapter 11 Trustee has informed the Debtors of
      its position that the Debtors' books and records may be
      essential to resolution of various intercompany claims and
      claims that may be brought by or against PSINet Consulting
      and that adequate provision must be made for the
      preservation and production of such documents following the
      Effective Date."

* Release of Claims against Officers and Debtors

Pursuant to the amendment, the release includes release from
claims held by the estate of PSINet Consulting Solutions
Holdings, Inc. Specifically, the added provision reads: "The
release, discharge and injunction provisions ... would apply to
any Claim that may be held by the estate of PSINet Consulting
Solutions Holdings, Inc. against any Released Party arising out
of or based upon such Released Party's service in any such
capacity or any transaction, event, circumstance or other matter
involving or relating to the Debtors that occurred on or before
the Effective Date."

The list of Released Parties has been amended to include Gary P.
Hobbs and exclude Mary Louise Jacobus. The amended version
reads: "The Released Parties are Harry G. Hobbs, Lawrence E.
Hyatt, Kathleen B. Horne, David J. Kramer, Lota S. Zoth, Brian
Geoghegan, Kathleen J. Haithcock, Gary P. Hobbs, Philippe
Kuperman, John F. Kraft, Ian P. Sharp, William H. Baumer and
Ralph J. Swett."

* Elaboration on Intercompany Claim

In the Section on Liquidation Analysis, the First Amended
Disclosure Statement tells of the basis asserted by the PSINet
estate for its $98 million intercompany claim against PSINet
Consulting and the objection of the Trustee of Consulting. It
also tells of the presence of potential claim by PSINet
Consulting against the PSINet estate. Such disclosure is added
in the section on Liquidation Analysis. It says:

    "The Debtors assert that this claim is based on PSINet Inc.'s
     loans and advances made to PSINet Consulting and the payment
     by PSINet Inc. of certain obligations of PSINet Consulting
     to its creditors, including, without limitation, the payment
     by PSINet Inc. of approximately $56 million to PSINet
     Consulting's bank creditors. The Debtors assert that the
     claim of $98 million represents the net balance owing to
     PSINet Inc. from PSINet Consulting after deducting amounts
     owing by PSINet Inc. to PSINet Consulting. The Trustee
     responsible for the PSINet Consulting estate has informed
     the Debtors that he believes there is no basis to the PSINet
     claim. In addition, the Trustee has informed the Debtors
     that he is currently investigating potential claims the
     PSINet Consulting estate may have against PSINet Inc., and
     he has obtained an extension of time to file a proof of
     claim against the Debtors' estates. The Debtors and the
     Trustee each reserve all rights with respect to any claim
     either estate may assert against the other."

* Disclosure on Escrow Account re Preferred Stock

The Debtors have also added in the Section on Liquidation
Analysis disclosure on the presence of an escrow account holding
funds in connection with certain Series C Cumulative Convertible
Preferred Stock, and the question whether the funds held
constitute property of the Debtors' Chapter 11 estates. The
following has been inserted into the First Amended Disclosure
Statement:

    "An ad hoc committee of holders of PSINet Inc.'s Series C
     Cumulative Convertible Preferred Stock (the "Series C Ad Hoc
     Holders"), joined by AIG SoundShore Funds, which also
     asserts to hold a significant number of shares of PSINet
     Inc.'s Series C Cumulative Convertible Preferred Stock, have
     questioned whether certain funds held in a deposit account
     in accordance with an agreement between PSINet Inc. and
     Wilmington Trust Company dated as of May 4, 1999, constitute
     property of the Debtors' Chapter 11 estates. These Series C
     Ad Hoc Holders assert that such funds must be distributed
     exclusively to the holders of the Series C Cumulative
     Convertible Preferred Stock, and they intend to commence an
     adversary proceeding seeking a judicial ruling that such
     funds on deposit are not in fact the Debtors' property
     pursuant to section 62 541(a) of the Bankruptcy Code. The
     Debtors and Creditors' Committee intend to reserve all
     rights in connection with any such adversary proceeding,
     including without limitation the right to assert that such
     funds are indeed property of the Debtors' estates and thus,
     should be treated in accordance with the Plan. The funds in
     this deposit account have not been included in the
     liquidation analysis set forth below."

* Cisco's Assertion of Admin. Claim for Rent Payments in Excess
   of $30 Million in Section on Liquidation Analysis

The First Amended Disclosure Statement has included, also in the
Section on Liquidation Analysis, disclosure on this matter as
follows:

    "Cisco Systems Capital Corporation ("Cisco") has asserted
     that the amount of administrative expense claims set forth
     in the liquidation analysis may understate the Debtors'
     potential liability for administrative expense claims. Cisco
     has advised the Debtors that it believes it would be
     entitled to administrative rent payments in excess of $30
     million if it prevails on its pending appeal to the United
     States District Court for the Southern District of New York
     of an Order of the Bankruptcy Court entered on December 18,
     2001 re-characterizing certain master lease and equipment
     schedules between Cisco and the Debtors as financing
     arrangements. Alternatively, Cisco has advised the Debtors
     that it believes it is entitled to adequate protection
     payments (which would be entitled to administrative expense
     priority) in excess of $10 million if it prevails on its
     pending motion before the Bankruptcy Court for adequate
     protection payments for the use of Cisco's equipment.
     Pursuant to a Stipulation and Order dated March 19, 2002,
     litigation of Cisco's motion for adequate protection
     payments has been continued indefinitely and Cisco has been
     granted a provisional lien on certain of the Debtors' cash
     accounts in the amount of Cisco's claim for adequate
     protection payments, which provisional lien will be released
     if and to the extent the Bankruptcy Court later determines
     that Cisco is not entitled to such adequate protection
     payments. The Debtors dispute Cisco's assertions, and they
     and the Creditors' Committee reserve all rights they may
     have to assert or defend claims or disputes relating to the
     pending appeal of the re-characterization order, Cisco's
     pending motion for adequate protection payments, the
     validity and/or avoidability of Cisco's claimed security
     interests in the Cisco equipment, or Cisco's entitlement to
     administrative rent payments or adequate protection payments
     or its entitlement to such payments in the amount or
     priority asserted (collectively, the "Disputes"). Likewise,
     Cisco reserves all of its rights which it may have to assert
     or defend claims or disputes relating in any manner to the
     Disputes."

* GECC's Assertion for Admin. Claim and Provisional Lien

The First Amended Disclosure Statement includes information on
this matter as follows:

    "General Electric Capital Corporation ("GECC") has also
     asserted that it is entitled to administrative expense
     adequate protection payments for the use of its equipment.
     Pursuant to a Stipulation and Order dated March 6, 2002,
     litigation of GECC's motion for adequate protection payments
     has been continued indefinitely and GECC has been granted a
     provisional lien on certain of the Debtors' cash accounts in
     the amount of approximately $1.7 million plus certain
     additional amounts accruing on a monthly basis, which
     provisional lien will be released if and to the extent the
     Bankruptcy Court later determines that GECC is not entitled
     to such adequate protection payments. The Debtors and the
     Creditors' Committee reserve all rights they may have to
     assert or defend claims or disputes relating to GECC's
     pending motion for adequate protection payments, the
     validity and/or avoidability of GECC's claimed security
     interests in the GECC equipment, or GECC's entitlement to
     adequate protection payments or its entitlement to such
     payments in the amount or priority asserted.

The above is also included in the section on Liquidation
Analysis.

* Disclosure on Objections

The Debtors have included the following summary on several
specific objections to the Plan made by various parties in
interest that may be asserted as objections to confirmation of
the Plan. The Debtors acknowledge that, although they dispute
these objections and reserve all rights with respect thereto,
there can be no assurance that the Bankruptcy Court will confirm
the Plan if these or other objections are asserted at the
confirmation hearing.

    "The United States Attorney for the Southern District of New
     York, representing the interests of the United States of
     America and its agencies, including but not limited to the
     United States Department of the Treasury -- Internal Revenue
     Service, has informed the Debtors of its position that the
     releases of certain non-debtor parties provided in Section
     11.3 of the Plan are over-broad to the extent they may
     restrain the Government's ability to commence actions and
     take other measures to collect taxes from non-debtor
     parties, and it has reserved all rights to object to
     confirmation of the Plan on this or any other basis.

    "NTFC Capital Corporation ("NTFC") has advised the Debtors of
     its position that the Plan violates sections 1123(a)(4) and
     1129(a)(3) of the Bankruptcy Code by providing earlier
     payment for the claims of the holders of Senior Notes as
     compared to holders of Disputed Class 3 General Unsecured
     Claims, including NTFC's Deficiency Claim, and that the Plan
     provisions relating to the release, exculpation and
     discharge of claims against certain of the Debtors'
     directors and officers are inappropriate as a matter of law,
     and NTFC has reserved all rights to object to confirmation
     of the Plan on the basis of these or other objections.

    "General Electric Capital Corporation ("GECC") has advised
     the Debtors of its position that the Plan provisions
     relating to the release of claims against certain of the
     Debtors' directors and officers violate section 524(e) of
     the Bankruptcy Code, and has reserved all rights to object
     to confirmation of the Plan on the basis of these or other
     objections.

    "Bruce Waldack, Creeden Capital Management, LLC, Lance
     Lessman, Lance Lessman IRA, and Stephen W. McGowan, the Lead
     Plaintiffs in certain securities class action cases against
     PSINet Inc. and certain of its present and former officers
     and directors pending in the United States District Court
     for the Eastern District of Virginia (In re PSINet Inc.
     Securities Litigation, Civ. Action No. 00-1850-A), have
     advised the Debtors of their position that the Plan
     provisions relating to the release of third party claims
     against certain of the Debtors' directors and officers
     violate section 524(e) of the Bankruptcy Code, and have
     reserved all rights to object to confirmation of the Plan on
     the basis of these or other objections . . . . The Lead
     Plaintiffs have also questioned whether such Plan release
     provisions may result in the loss of their ability to
     recover from the proceeds of the Debtors' directors' and
     officers insurance policies, and they have asserted that
     they may continue to assert their Claims against the Debtors
     after the Effective Date in order to recover proceeds under
     such policies to the extent such policies provide 'entity
     coverage. Beyond acknowledging that confirmation of the
     Debtors' liquidating Plan will not result in the discharge
     of the Debtors pursuant to section 1141(d)(3) of the
     Bankruptcy Code, the Debtors do not take a position with
     respect to these issues, which are disputes among the Lead
     Plaintiffs and the issuers of such insurance policies.

    "Harrison J. Goldin, the Chapter 11 Trustee for PSINet
     Consulting Solutions Holdings, Inc. and PSINet Consulting
     Knowledge Services, Inc., has advised the Debtors of its
     position that the Plan provisions relating to the release of
     third party claims against certain of the Debtors' directors
     and officers are legally impermissible, and has reserved all
     rights to object to confirmation of the Plan on the basis of
     this or other objections."

* Management of Debtors

Certain personal particulars of the members of the Board of
Directors and the Executive Officers have been updated. The
updated versions are summarized as follows:

1. Board of Directors

Ian P. Sharp, 68, Chairman of Board of Directors since April
2001 and has served on the PSINet Board of Directors since
September 1996. Previously, he was President and Founder of I.P.
Sharp Associates, a software development company. Currently
retired, Mr. Sharp founded the company named after him in 1964
after being chief programmer at Ferranti-Packard, in Toronto.
Principal Occupation: retired.

Ralph J. Swett, 66, Director since 1998. Mr. Swett was the
former Vice Chairman of the Board of Directors of IXC
Communications, Inc. Mr. Swett was also Chairman of IXC
Communications from its formation in July 1992 through April
1998, and served as Chief Executive Officer and President of IXC
Communications from July 1992 to October 1997. Prior to that,
Mr. Swett served as Chairman of the Board and Chief Executive
Officer of Communications Transmission, Inc., a predecessor
entity to IXC Communications, from 1986 to 1992. From 1969 to
1986, Mr. Swett served in increasingly senior positions (Vice
President, President and Chairman) of Times Mirror Cable
Television, a subsidiary of Times Mirror and a previous owner of
IXC Carrier, Inc., the direct parent company of IXC
Communications, and as a Vice President of Times Mirror from
1981 to 1986. Mr. Swett served as Chairman of IXC Carrier since
1979 and served as its Chief Executive Officer from 1986 to
October 1997 and its President from 1991 to October 1997.
Principal Occupation: retired.

William H. Baumer, 68, Director since 1993. Mr. Baumer has been
a Professor of Philosophy at the University at Buffalo since
1971 and was Acting Chairman of the Department of Economics at
the University at Buffalo from June 1992 until June 1995. Mr.
Baumer was Treasurer and Vice President of NYSERNet from January
1986 to December 1990 and from December 1989 to December 1990,
respectively.

2. Executive Officers

Harry G. Hobbs, 48 President and Chief Executive Officer since
May, 2001. Mr. Hobbs served as Executive Vice President
and President, International Operations from November 2000 to
March 2001, as Senior Vice President and President, PSINet
Europe from September 1998 to November 2000 and as Vice
President, Customer Administration from September 1997 to
September 1998. Prior to joining PSINet, Mr. Hobbs served as
Vice President, Customer Care for American Personal
Communications, LP, a provider of wireless communications
services and an affiliate of Sprint Spectrum, from February 1995
to August 1997. Prior to that, Mr. Hobbs served in various
positions in the Customer Service, Operations and Large Account
Support groups at MCI, including Vice President, Global Customer
Service from September 1993 to February 1995, Director,
Operations from March 1992 to February 1995 and Director, Large
Account Group from November 1990 to March 1992. Harry Hobbs is
not related to Gary Hobbs.

Lawrence E. Hyatt, 47, Executive Vice President and Chief
Financial Officer since July 2000 and as Chief Restructuring
Officer since April, 2001. Prior to joining PSINet, Mr. Hyatt
served as an executive with Marriott Corporation's families of
companies for nearly 20 years, most recently as the Executive
Vice President and Chief Financial Officer for Host Marriott
Services (now HMSHost Corporation, a whollyowned subsidiary of
Autogrill S.p.A.) from December 1999 to June 2000. Prior to
that, Mr. Hyatt served as Senior Vice President and Chief
Financial Officer of Sodexho Marriott Services, Inc. from March
1998 to December 1999.  Mr. Hyatt performed a variety of roles
at Marriott International and served as Senior Vice President of
Finance and Planning from 1988 to 1998. Prior to joining
Marriott International, Mr. Hyatt served as an Associate for ICF
Incorporated and a financial analyst for the U.S. Department of
Energy. Mr. Hyatt was also a director for Xpedior Incorporated,
a PSINet majority owned subsidiary.

Kathleen B. Horne, 44, Executive Vice President since January
2001 and General Counsel since October 1999. Ms. Horne served as
Senior Vice President from October 1999 to January 2001, as Vice
President and Deputy General Counsel from November 1998 to
September 1999 and as Assistant General Counsel from April 1996
to November 1998. Prior to joining PSINet, Ms. Horne was a
partner since January 1996 and prior to that was an associate
with the law firm of Nixo n, Hargrave, Devans & Doyle LLP (now
known as Nixon Peabody LLP).

Other executive officers of the Debtors include Lota Zoth, David
Kramer, John Kraft, Brian Geoghegan, Philippe Kuperman, Kathleen
J. Haithcock and Gary P. Hobbs (no relation to Harry Hobbs).

In addition to the above, the First Amended Disclosure Statement
includes technical amendments regarding dates and progress in
the reorganization process such as the Debtors' entry into an
agreement to sell their European operations. These have been
reported in other items of the newsletter. (PSINet Bankruptcy
News, Issue No. 21; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


RAYTEL MEDICAL: Lenders Agree to Waive Loan Covenants Defaults
--------------------------------------------------------------
Raytel Medical Corp. (Nasdaq:RTEL) reported operating results
for its second fiscal quarter ended March 31, 2002.

Revenues for the second quarter of fiscal 2002 were $17.6
million, compared to $18.1 million for the second quarter of
fiscal 2001. Giving effect to non-recurring expenses related to
the recently completed tender offer, the Company recorded a net
loss of $3.9 million for the current quarter. This compared to a
net loss of $20.5 million for the quarter ended March 31, 2001,
which also gave effect to non-recurring items, including a loss
of $19.4 million recorded in connection with the sale of the
Company's clinic in Port St. Lucie, Florida and an additional
$2.0 million reserve for estimated legal fees and other expenses
related to the OIG investigation, which was concluded last year.

For the six months ended March 31, 2002, revenues were $35.7
million, compared to $35.4 million in the same period last year.
For the first six months of fiscal 2002, the Company reported a
net loss of $3.6 million versus a net loss of $20.4 million for
the same period one year ago.

On Feb. 7, 2002, the Company entered into a definitive merger
agreement pursuant to which SHL TeleMedicine Ltd. (SWX: SHLTN or
"SHL"), a developer and marketer of telemedicine devices and
provider of telemedicine services, will acquire Raytel.
According to the terms of the agreement, an indirect, wholly-
owned subsidiary of SHL commenced a tender offer for all of
Raytel's outstanding shares at a price of $10.25 per share in
cash. On April 2, 2002, SHL, through its subsidiary, accepted
all shares tendered for payment and provided a subsequent
offering period for stockholders to tender their shares. An
aggregate of 2,408,006 shares of Raytel common stock,
representing approximately 81% of the outstanding Raytel stock,
was acquired by SHL in the tender offer. The SHL subsidiary will
be merged into Raytel in a transaction in which any Raytel
shares not tendered will be converted into the right to receive
the same per share cash price paid in the tender offer. A
special meeting of Raytel stockholders is scheduled to be held
on June 4, 2002 to vote upon the merger. The merger is expected
to close promptly following the special meeting of stockholders.
In connection with the transaction, Raytel recorded tender offer
expenses, consisting primarily of legal fees, investment banking
fees, bonus payments to certain employees related to the change
in control and other related costs of $3.5 million and $3.6
million for the three and six months ended March 31, 2002,
respectively.

As of March 31, 2002, the Company was in default of certain
financial covenants under its $15,000,000 credit facility
agreement, due principally to the significant expenses which it
incurred in connection with the recently-completed tender offer.
At the Company's request, its lender waived these defaults and
agreed to modify the covenants prospectively, among other things
to eliminate the tender offer expenses from the calculation of
certain financial ratios. The amount outstanding under the
credit line as of March 31, 2002 was $13.1 million.

Raytel -- http://www.raytel.com-- headquartered in Windsor,
Conn., is a leading provider of services and efficient
dissemination of technical information to physicians and
patients utilizing telephone technology and the delivery of
diagnostic information over secure Internet links, as well as
ambulatory diagnostic imaging facilities for general as well as
cardiac imaging.


REALNAMES CORP: Microsoft Contract Decision Triggers Closure
------------------------------------------------------------
Effective May 13, 2002, RealNames Corporation ceased normal
business operations. Eighty-three employees have been terminated
as the company begins an orderly wind down. During the wind down
process, RealNames will be liquidating its assets and making
every effort to maximize their value for the benefit of its
creditors and shareholders.

RealNames' Keywords work in the Microsoft Internet Explorer
browser pursuant to an agreement the two companies reached in
March 2000. Microsoft has chosen not to renew its distribution
contract, which ends on June 30, 2002, with RealNames. On June
30th, the Keyword service will no longer be available.

"RealNames has posted three consecutive quarters of revenue
growth and reached positive cash flow in the first quarter of
2002, a significant milestone for any private company. Our
performance also demonstrates that Keywords will extend naming
beyond domain names," said Keith Teare, RealNames' Founder and
Chief Executive Officer. "In fact, Keywords were used more than
500 million times last quarter around the world - ten times
growth over two years. The Chinese and Japanese Keyword systems
- which allow native language web addressing - depend on
RealNames technology.

"Despite our success, taking the step to shut down the company
has become necessary," continued Teare. "Microsoft's decision
not to renew our distribution contract makes maintaining the
company untenable. The growth in Keyword usage as well as the
business success of RealNames clearly demonstrates that Keywords
are the next generation naming system. Without our key
distributor, it does not make sense to keep the business active
in its current form."

"RealNames technology has been broadly recognized, and forms the
core of a very strong set of intellectual property assets,
including patents, for which we are actively seeking buyers,"
said Teare. "The IETF just announced that it will issue an RFC
on the Common Name Resolution Protocol, a technology central to
the new naming architecture demanded by the Internet."


ROMACORP: Commences Exch. Offer for 12% Sr. Notes Due July 2006
---------------------------------------------------------------
Romacorp, Inc. has made an offer to exchange 12% Senior Secured
Notes due April 1, 2006 for up to all the outstanding 12% Senior
Notes due July 1, 2006 of the Company. The Company is also
soliciting consents with respect to certain amendments to the
indenture governing the 12% Senior Notes due July 1, 2006. It is
a condition to the exchange offer and consent solicitation that
holders of not less than a majority of the aggregate principal
amount of outstanding 12% Senior Notes due July 1, 2006 shall
have validly consented to the proposed amendments to the
indenture governing the 12% Senior Notes on or prior to the
expiration date.

The exchange offer will be effected on a basis of $790 principal
amount of 12% Senior Secured Notes for each $1,000 principal
amount of 12% Senior Notes validly tendered and accepted for
exchange. Currently, $57,000,000 aggregate principal amount of
12% Senior Notes are outstanding. The Company will exchange up
to $45,030,000 aggregate principal amount of 12% Senior Secured
Notes for up to all of the 12% Senior Notes outstanding.

Holders of 12% Senior Notes who validly deliver consents to the
proposed amendments on or prior to the expiration date will be
entitled to receive a consent fee of $10 for each $1,000
principal amount of 12% Senior Notes for which consents are
received. The consent fee will be paid in the form of 12% Senior
Secured Notes due April 1, 2006.

The exchange offer and consent solicitation will expire at 5:00
p.m., New York City time, on June 11, 2002, unless extended.

Jefferies & Company, Inc. has been appointed as information
agent for the exchange offer, and The Bank of New York is
serving as exchange agent. Copies of the Exchange Offering
Memorandum and Consent Solicitation Statement may be obtained
from Jefferies & Co., Inc., 650 Poydras Street, Suite 2215, New
Orleans, Louisiana 70130 or by phone at 504-681-5778.

Romacorp, Inc. operates and franchises Tony Roma's restaurants,
the world's largest casual dining restaurant chain specializing
in ribs. The Company currently operates 56 restaurants and
franchises 195 restaurants in 29 states and 25 foreign countries
and territories.


ROANOKE PRO FOOTBALL: Chapter 7 Case Summary
--------------------------------------------
Debtor: Roanoke Pro Football, LLC
         Roanoke, Virginia

Bankruptcy Case No.: 02-02053

Chapter 7 Petition Date: May 10, 2002

Court: Western District of Virginia

Judge: William F. Stone Jr.

Debtors' Counsel: Howard J. Beck, Esq.
                   Gentry, Locke, Rakes & Moore
                   Crestar Plaza, 10 Franklin Road, S. E.,
                    Suite 800
                   Roanoke, Virginia 24022-0013
                   Phone: (540) 983-9324


SHELDAHL INC: Investor Group Intends to Purchase Assets
-------------------------------------------------------
Sheldahl, Inc. (NASDAQ: SHELQ) has received a letter of intent
from Ampersand Ventures, Molex Inc. and Morgenthaler Partners,
Sheldahl's three largest shareholders, for the purchase of a
substantial portion of its assets under Section 363 sale
procedures pursuant to the U.S. Bankruptcy Code. Sheldahl
announced earlier this month it had filed a voluntary petition
for Chapter 11 reorganization with the U.S. Bankruptcy Court for
the District of Minnesota.

"This offer would provide Sheldahl the ability to emerge from
this process with a strong balance sheet and the financial
resources to remain a leader in the interconnect and materials
business," said Benoit Pouliquen, President and Chief Executive
Officer. "In the coming weeks, we will solicit additional offers
from other potential buyers."

Sheldahl said the letter of intent is non-binding. The offer
includes a majority of the Company's operating assets, contracts
and certain obligations necessary to maintaining its operations.
Sheldahl said it would retain an investment banking firm to
solicit additional offers from other interested parties. The
Company said it is expected to complete the bidding process in
the next 2 months under guidelines set forth by the bankruptcy
court.

"During this period of transition, we have continued to meet all
customer requirements. We have appreciated the support of our
customers and vendors since the filing," said Mr. Pouliquen.

Sheldahl, Inc. is a leading producer of high-density substrates,
high-quality flexible printed circuitry, and flexible laminates
primarily for sale to the automotive, electronics and data
communications markets. The Company, which is headquartered in
Northfield Minnesota, has operations and contract assembly
operation in Northfield; Longmont, Colorado; Endicott, NY;
Toronto, Ontario, Canada; Chihuahua, Chih., Mexico; and Manilla,
Phillipines. Sheldahl's Common Stock trades on the NASDAQ
National Market tier of the NASDAQ Stock Market under the
Symbol: SHELQ. Sheldahl news and information can be found on the
World Wide Web at http://www.sheldahl.com


STERLING CHEMICALS: Files Plan of Reorganization in Houston
-----------------------------------------------------------
Sterling Chemicals Holdings, Inc. (OTC Bulletin Board: STXX),
Sterling Chemicals, Inc. and certain of their direct and
indirect U.S. subsidiaries filed their proposed plan of
reorganization and related disclosure statement with the U.S.
Bankruptcy Court for the Southern District of Texas, Houston
Division.  Sterling Chemicals Holdings, Inc. and most of its
U.S. subsidiaries filed voluntary petitions for reorganization
under Chapter 11 of the Bankruptcy Code on July 16, 2001.

"The filing of our reorganization plan is an important milestone
in Sterling's financial restructuring," said David G. Elkins,
Sterling's President and Co-Chief Executive Officer.  "The plan
is based on an overall structure that was developed through
extensive discussions with our major creditor groups.  Looking
forward, we hope to successfully conclude the negotiations with
our creditors so that the plan, with appropriate modifications,
can be confirmed and consummated during the third calendar
quarter.  The plan will achieve one of our primary goals, which
is to emerge from Chapter 11 with a much-improved and viable
capital structure."

The plan of reorganization, as filed, is premised upon an asset
separation structure, with Sterling's pulp chemicals business
being separated from the Company's core petrochemicals business.
Equity ownership of the pulp chemicals business will be
transferred to the holders of the Company's 12-3/8% Senior
Secured Notes, while equity ownership of the petrochemicals
business will be shared, in percentages to be determined, by one
or more new equity investors and the holders of unsecured
claims.  Under the plan, the interests of the Company's current
stockholders would be eliminated.  The plan calls for the
infusion of up to $80 million by the new equity investors, $50
million of which will be invested at the time the Company
emerges from Chapter 11.

The disclosure statement is subject to the approval of the
Bankruptcy Court before being mailed to creditors for
solicitation of their approval of the plan.  As bankruptcy law
does not permit solicitation of an acceptance or rejection of a
plan of reorganization until a disclosure statement relating to
the plan is approved by the Bankruptcy Court, this announcement
is not intended to be, nor should it be construed as, a
solicitation for a vote on the plan.  Sterling will emerge from
Chapter 11 if and when the plan receives the requisite creditor
approvals and is confirmed by the Bankruptcy Court. The plan is
subject to supplementation, modification and amendment prior to
confirmation.

The entities included in the Chapter 11 bankruptcy proceeding
own and operate the Company's manufacturing facilities in Texas
City, Texas; Pace, Florida; and Valdosta, Georgia.  The
Company's foreign subsidiaries, including those in Canada,
Australia and Barbados, are not included in the bankruptcy
cases.

Based in Houston, Texas, Sterling Chemicals Holdings, Inc. is a
holding company that, through its operating subsidiaries,
manufactures petrochemicals, acrylic fibers and pulp chemicals,
and provides large-scale chlorine dioxide generators to the pulp
and paper industry.  Sterling has a petrochemicals plant in
Texas City, Texas; an acrylic fibers plant in Santa Rosa County,
Florida; and pulp chemical plants in Grande Prairie, Alberta;
Saskatoon, Saskatchewan; Thunder Bay, Ontario; Vancouver,
British Columbia; Buckingham, Quebec and Valdosta, Georgia.


TESORO PETROLEUM: Fitch Revises Outlook on Low-B's to Negative
--------------------------------------------------------------
Fitch Ratings has revised the Rating Outlook on the debt of
Tesoro Petroleum Corporation to Negative from Stable. Fitch
rates Tesoro's senior secured credit facility 'BB' and
subordinated debt 'B+'. Although Fitch remains comfortable with
Tesoro's current ratings, the unexpected changes in the terms of
the Golden Eagle acquisition combined with weaker forecasts by
Tesoro have raised Fitch's concerns with Tesoro's liquidity and
prompted the change in Rating Outlook. Management anticipates
closing on the acquisition of Valero's 168,000-bpd Golden Eagle
refinery and 70 associated marketing sites by the end of this
week.

On April 2, 2002, Fitch downgraded the ratings on Tesoro's debt
due to the significant debt required to finance the Golden Eagle
acquisition combined with Fitch's expectations for Tesoro and
the oil industry over the next several quarters. At the time of
the downgrade, Fitch's forecasts were significantly more
conservative than those of Tesoro and have not changed. Although
the change in terms will significantly improve Tesoro's expected
liquidity at closing, any additional unexpected issues for
Tesoro or a significant draw on Tesoro's revolver could result
in a downgrade.

Due to the downturn in the industry cycle over the last six
months, Tesoro had to draw on its revolver more than management
was comfortable with ahead of closing on the Golden Eagle
transaction. Rather than close into a too-tight revolving credit
situation, Tesoro management renegotiated the final terms of the
Golden Eagle transaction with Valero Energy to, (a) reduce the
total price by $50 million, and, (b) issue deeply-subordinated
seller's notes for another $150 million, reducing the cash
requirements at closing by $200 million. Tesoro has already
issued $450 million of new subordinated notes in addition to the
issuance of $250 million of equity in March to finance the
acquisition.

The new seller's notes have zero coupons for a significant
period and are non-callable. Based on the net present value, the
new notes will be recorded as $65 to $85 million on Tesoro's
books. The reduction in the acquisition price, combined with the
zero-coupon portion of the notes should significantly improve
Tesoro's short-term liquidity position. At closing, Tesoro
expects to have nothing drawn on its new $225 million revolver
and will likely be long cash on the balance sheet.

As for Tesoro's debt covenants, management is working with
lenders to amend the secured credit facility. The substantial
1st quarter loss has resulted in a debt-to-earnings ratio that
exceeds the maximum permitted under the secured credit facility
requiring a waiver to the existing financial covenant. The
amended and restated covenants after closing the Golden Eagle
transaction will reflect the weaker margin environment
experienced in the first quarter of this year.

The amended and restated credit facility places restrictions on
Tesoro including a limit on capital spending and required de-
levering from non-operating sources. By the end of 2002, Tesoro
is required to raise net proceeds of $125 million from a
combination of mandatory divestment of assets or issuance of
equity. The funds raised will be used to pay down debt.

In addition, Tesoro must also limit current year cap-ex to $275
million and 2003 is capped at $302.5 million. Tesoro has already
reduced 2002 capital plans by $70 million from $337 million to
$267 million. The reduction in cap-ex should not interfere with
upcoming environmental requirements.

The addition of Golden Eagle provides Tesoro with a complex
refinery in the high-margin state of California. Although Fitch
views the acquisition as a significant positive from an
operational and geographical diversification standpoint, the
acquisition requires the addition of a significant amount of
debt. The Golden Eagle acquisition follows closely behind
Tesoro's debt financed acquisition of two refineries and
associated retail assets from British Petroleum (BP) in
September 2001 for $670 million.

At closing, total debt for Tesoro will be over $2 billion versus
$350 million outstanding last September immediately prior to the
purchase of the two BP refineries. Adjusted debt-to-
capitalization (including 8.0 times gross rental expense) should
be 70%. Going forward, Fitch expects credit protection, as
measured by EBITDA-to-interest to be above 3.0x, with debt-to-
EBITDA of 3.0x to 4.0x.

Tesoro operates five wholly owned refineries with a total
combined capacity of 390,000 bpd. Tesoro refocused its business
strategy in the late 1990s, becoming primarily a downstream
player in the oil industry. The Washington and Hawaii refineries
were acquired in 1998 and, in late 1999, Tesoro sold its
exploration and production assets to EEX Corp., effectively
exiting the upstream end of the business.

Tesoro sells refined products wholesale or through approximately
675 retail outlets and is beginning to market through the
Mirastar brand at Wal-mart sites in 17 states in the western
United States. Tesoro is also the largest operator of marine
terminals along the Louisiana and Texas Gulf Coast with 16
terminals and operates several marine terminals on the West
Coast as well.


TRANS WORLD: Seeks to Extend Exclusive Period through August 30
---------------------------------------------------------------
Trans World Airlines, Inc. and its debtor-affiliates want to
extend their exclusive period within which to file a Chapter 11
plan and extend the period during which the Company has the
exclusive right to solicit acceptances of that plan.  The
Debtors seek order from the U.S. Bankruptcy Court for the
District of Delaware extending their Exclusive Filing Period
through August 30, 2002 and their Exclusive Solicitation Period
through October 30, 2002.

The Debtors assert that the size and complexity of their cases
justify further extension of the exclusivity periods. The large
size of the debtor and the consequent difficulty in formulating
a plan are important factors which constitute cause for
extending the exclusivity periods, the Debtors explain.

The Debtors further believe that the progress in these cases
warrants an extension of the exclusivity periods. To illustrate
this point, the Debtors enumerate key components of their
progress since Petition Date:

      -- development and implementation of bidding procedures for
         the sale of substantially all of the Debtors assets;

      -- implementation of a Key Employee Retention Plan;

      -- preparing for and litigating the Debtors' motion to sell
         substantially all of the Debtors' assets, the Debtors'
         motion to reject the Karabu Ticket Program Agreement,
         and the Debtors' motion to establish procedures
         regarding the assumption, assignment, or rejection of
         their executory contracts;

      -- resolving issues and drafting motions and other
         documents concerning the Debtors' obligations under 11
         U.S.C. Section 1110 with respect to aircraft and
         aircraft equipment;

      -- preparing for and arguing emergency appeals to the
         District Court and the Third Circuit regarding the Bid
         Procedures Order, the Sale Order, the DIP Financing
         Order, the Key Employee Retention Program Order, and
         litigation concerning certain appellants' requests for
         stays pending appeals;

      -- modification of the Debtors' collective bargaining
         agreements affecting approximately 20,000 employees
         pursuant to Section 1114 of the Bankruptcy Code;

      -- modification of certain retiree benefits;

      -- designation of certain executory contracts and unexpired
         leases to assume and assign or reject and the
         calculation of relative cure amounts;

      -- reconciliation and payment of certain executory
         contracts that were assumed and assigned to LLC;

      -- working with American Airlines, Inc. to resolve post-
         closing working capital and other adjustments;

      -- analysis of administrative expense, priority, and
         secured claims;

      -- analysis of reclamation claims;

      -- objection to and settlement of certain motions for the
         allowance and payment of administrative expenses;

      -- liquidation of several aircraft remaining in the estates
         after the American sale transaction;

      -- filing of the Disclosure Statement and Plan;

      -- soliciting votes in favor of the Plan; and

      -- negotiating with various parties to resolve objections
         to the Plan.

Trans World Airlines filed for chapter 11 protection on January
10, 2001 in Delaware Bankruptcy Court, before AMR bought its
assets and formed TWA Airlines LLC, whose operations are being
combined with those of American. TWA serves more than 160 cities
in North America, the Caribbean, Europe, and the Middle East.
James H.M. Sprayregen, Esq. at Kirkland & Ellis and Laura Davis
Jones, Esq. at Pachulski, Stang, Ziehl, Young & Jones represent
the Debtors in their restructuring effort.


U.S. PLASTIC LUMBER: Working Capital Deficit Tops $56 Million
-------------------------------------------------------------
U.S. Plastic Lumber Corp. (Nasdaq:USPL) announced its operating
results for the first quarter, or three months ended March 31,
of 2002.

USPL reported an operating income of $504,000 for the first
quarter of 2002, as compared with an operating loss of $3.1
million in the same quarter in 2001. The first quarter operating
results in 2002 reflect positive operating income in both the
Plastic Lumber and Environmental Recycling divisions, as well as
$604,000 of corporate expenses in connection with the proposed
sale of the Environmental Recycling division. Operating income
in the first quarter of 2001 included a one time charge of
$182,000 for the severance component of the Plastic Lumber
division's fourth quarter 2000 restructuring. The net loss for
the first quarter of 2002 was $2.8 million compared with $5.0
million in 2001.

Revenues for the first quarter of 2002 were $36.9 million,
compared with $38.6 million for the same quarter in 2001, a
decrease of 4%. Revenues from the Plastic Lumber division were
$14.2 million in the first quarter of 2002. While this
represents a decrease of $1.5 million, or 10%, as compared to
the first quarter of 2001, on a sequential basis the first
quarter revenues increased significantly from $10.3 million of
revenue in the fourth quarter of 2001. The Plastic Lumber
division's revenues were below last year's revenues primarily
due to the impact of exiting the low margin resin trading
business. The first quarter of 2001 included $2.3 million of
resin revenues compared with $48,000 in the first quarter of
2002. Excluding the effects of revenues from the resin trading
business, Plastic Lumber division revenues increased by 6%
during the quarter. Revenues from the Environmental Recycling
division during the first quarter of 2002 were $22.7 million,
compared with $23.0 for the same quarter in 2001.

Commenting on the first quarter 2002 results, Mark Alsentzer,
Chairman, CEO and President of USPL said, "We are very pleased
with the first quarter results. For the first time in 21 months,
our Plastic Lumber and Environmental Recycling divisions both
had positive operating income in the same quarter, and our
consolidated EBITDA for the first quarter, including corporate
expenses, was $2.4 million, as compared to an EBITDA loss of
$800,000 in 2001. The first quarter results are indicative of
the success of our year-long restructuring efforts in our
Plastic Lumber business, as well as the substantial backlog of
work we have at Clean Earth." In discussing USPL's net loss in
the first quarter, Alsentzer added, "Our interest expense of
$3.4 million in the first quarter included approximately $1.4
million in non-cash interest charges resulting from the
amortization of deferred financing costs and debt discounts and
a beneficial conversion feature which was recorded in the first
quarter."

Mike McCann, Chief Operating Officer of USPL, added, "The
restructuring of the Plastic Lumber division is largely
complete. While the plant closings and associated personnel
reductions were difficult decisions, our remaining plants in
Chicago, Illinois, Ocala, Florida and Denver, Colorado are now
operating at high levels of efficiency and productivity. With
the deck season now upon us we anticipate continued sales growth
in the next several quarters. Our ``Carefree Xteriorsr' deck
portfolio, with its 100% HDPE, composite and structural lumber
products, is the most complete alternative deck offering in the
industry and continues to gain acceptance at the distributor and
retail levels." McCann also noted that none of the products in
USPL's deck portfolio contain chromated copper arsenate (CCA).
The U.S. Environmental Protection Agency (EPA) recently
announced its plan to ban the use of pressure-treated lumber
containing CCA by January of 2004 due to its carcinogenic
properties. USPL's building products will not leach harmful
chemicals into the soil, are rot and insect resistant,
maintenance friendly and carry limited transferable warranties
of up to 50 years.

Commenting on the results of the Environmental Recycling
division, Frank Barbella, President of Clean Earth, Inc., said,
"While the winter weather normally makes for a weak first
quarter for us, we were very pleased with this past quarter's
operating results as our fixed base soil treatment facilities
operated at or near capacity, resulting in improved operating
margins for the quarter."

U.S. Plastic Lumber Corp. has two main business lines: the
manufacture of plastic lumber, packaging and other value added
products from recycled plastic, and the operation of
interrelated environmental recycling services. U.S. Plastic
Lumber is the nation's largest producer of 100% HDPE recycled
plastic lumber. Headquartered in Boca Raton, Florida, USPL is a
highly integrated, nationwide processor of a wide range of
products made from recycled plastic feedstocks. USPL creates
high quality, competitive building materials, furnishings, and
industrial supplies by processing plastic waste streams into
purified, consistent products. USPL's products are
environmentally responsible and are both aesthetically pleasing
and maintenance friendly. They include such brand names as
Carefree Decking(R), SmartDeck(R), RecycleDesign(TM), Trimax(R),
Earth Care(TM), and OEM products including Cyclewood(R). USPL
currently operates three plastic manufacturing centers.

At March 31, 2002, the company reported a working capital
deficiency of about $56 million.


VELOCITA CORP: Will Not Make Scheduled Bond Interest Payment
------------------------------------------------------------
Velocita Corp., a national broadband networks provider, will not
make the May 15th interest payment on its senior notes due 2010.
As previously announced, Velocita is considering a number of
financial and strategic alternatives, including restructuring
its debt, the sale to one or more strategic investors, the sale
or other disposition of substantially all of its business or
assets, and filing for protection under Chapter 11 of the United
States Bankruptcy Code.  It has determined not to make the
scheduled interest payment in order to preserve cash while it
explores these options.  Under the terms of the indenture
governing the senior notes, Velocita has another 30 days to make
the payment in order to avoid a default under the senior notes.

Velocita today also announced that it plans to suspend its
obligation to file periodic reports under the Securities and
Exchange Act of 1934, as amended, in order to avoid the costs
involved with complying with those requirements.  Therefore
Velocita will not file a report on Form 10-Q for the quarter
ended March 31, 2002.  Velocita intends to provide to the
holders of its senior notes, certain quarterly financial
information for the period ended March 31, 2002, that is being
provided to its lenders under its credit agreement.

In addition, Velocita announced that it has reached an agreement
with a consortium of banks, whereby the banks agree to provide
an additional waiver and forbear taking any enforcement action
as a result of the occurrence and continuance of certain
enumerated defaults and events of default in the company's
credit agreement. This period extends through May 31, 2002.  As
with the waiver extensions previously announced by Velocita,
this agreement continues to require Velocita to comply with its
other covenants in the credit agreement.  Pursuant to the
agreement, all remaining undrawn loan commitments under the
credit agreement have been terminated.  In addition, the
agreement continues to limit the ability of PF.Net Corp.,
Velocita's wholly-owned subsidiary, to make restricted payments
to its affiliates, including payments to Velocita that would be
required for Velocita to pay interest on its senior notes.

During this forbearance period, Velocita will continue to move
forward on its strategic alternatives and options. In addition,
the company will continue ongoing discussions with its bank
lenders regarding modification of the terms of its credit
agreement.  If, at the end of the forbearance period, the
company has not obtained an amendment to, or a waiver or
forbearance under, the credit agreement, the company will be in
default with respect to certain financial and other covenants
under the credit agreement. Velocita is unable to predict when
or if it will be able to obtain the necessary modifications of
its credit agreement from its banks, or whether the banks will
at any point pursue any or all remedies available to them.

Velocita Corp. -- http://www.velocita.com-- based in the
greater Washington, D.C. area, is a broadband networks provider
serving communications carriers, Internet service providers, and
corporate and government customers. Founded in 1998 as a
facilities-based provider of fiber optic communications
infrastructure, Velocita has agreements with AT&T to construct
approximately half of AT&T's nationwide fiber optic network.
These construction agreements with AT&T serve as the foundation
for Velocita, formerly known as PF.Net, to grow and expand its
own network, as well as add service offerings. Cisco Systems
provides all optical and IP equipment to power Velocita's
network.


WABASH NATIONAL: First Quarter Net Sales Drop 33% to $243 Mill.
---------------------------------------------------------------
Wabash National Corporation (NYSE: WNC) announced results for
the first quarter ended March 31, 2002.  Net sales for the first
quarter of $162 million declined 33% compared to $243 million
for the same period last year.  Net loss for the quarter of
$14.6 million improved by 18% compared to a net loss of $17.7
million for the same period last year.

Commenting on these results, Mark R. Holden, Senior Vice
President-Chief Financial Officer, stated, "The improved results
for the first quarter reflect the effects of the significant
restructuring activities the Company has taken over the past
nine months.  While we have significantly reduced our cost
structure, opportunity for further improvement remains.  The
results for the first quarter include approximately $10 million
(pre-tax) of charges associated with the Company's refinancing
and restructuring of its debt, additional bad debt provisions
and further, albeit reduced, used trailer and new trailer
charges, among other things.  As previously announced, the
Company has successfully completed the refinancing and
restructuring of its revolving line of credit and senior notes
in April.  The Company also recently announced the appointment
of Bill Greubel as President and Chief Executive Officer.  As a
result, we believe our new credit facilities and restructured
operations, combined with our new leadership, positions the
Company for significantly improved performance."

Wabash National Corporation designs, manufactures, and markets
standard and customized truck trailers under the Wabash(TM) and
Fruehauf(R) brands. The Company believes it is the world's
largest manufacturer of truck trailers, the leading manufacturer
of composite trailers and through its RoadRailer(R) products,
the leading manufacturer of bimodal vehicles.  The Company's
wholly owned subsidiary, North American Trailer Centers(TM), is
one of the leading retail distributors of new and used trailers
and aftermarket parts, including its Fruehauf(R) and Pro-Par(R)
brand products with approximately 50 locations throughout the
U.S. and Canada.


WARNACO GROUP: Silk Mills Lease Decision Period Moved to July 27
----------------------------------------------------------------
For the fourth time, Silk Mills, LC and Huntington Storage &
Distribution, LP agree to give The Warnaco Group, Inc., and its
debtor-affiliates an extension to decide whether to assume or
reject the leases located at:

   (a) 2401 South Branch Avenue and 2408-30 8th Avenue, Altoona,
         PA -- the Silk Mills Lease; and

   (b) RD #4, Industrial Park, Huntingdon, PA -- the Huntingdon
         Lease.

With the approval of Judge Bohanon, the Parties agree that:

     (a) The Stipulation becomes effective on April 24, 2002;

     (b) The time to assume or reject the Silk Mills Lease is
         further extended through and including July 27, 2002;

     (c) The time to assume or reject the Huntingdon Lease is
         further extended through and including the confirmation
         of a plan or plans of reorganization in the Chapter 11
         cases, without prejudice to the rights of the Debtors to
         seek further extensions or for Huntingdon to object to
         same;

     (d) The Debtors agree provide Silk Mills and Huntingdon at
         least 60 days written notice of rejection of the Silk
         Mills Lease or Huntingdon Lease prior to the later of:

          (i) the date of the entry of the order approving each
              such rejection, and

         (ii) the rejection effective dates set forth in the
              order approving each such rejection; and

     (e) During the 60-day notice period preceding the rejection
         of the Silk Mills Lease or the Huntingdon Lease, the
         Debtors will continue to fulfill all their
         administrative obligations under the Silk Mills Lease
         or the Huntingdon Lease, as the case may be, including,
         without limitation, timely payment of rent for the
         period up to and including the rejection effective
         dates, as set forth in the order approving each such
         rejection. (Warnaco Bankruptcy News, Issue No. 24;
         Bankruptcy Creditors' Service, Inc., 609/392-0900)


WASH DEPOT: Employs Ernst & Young as Accountants and Advisors
-------------------------------------------------------------
Wash Depot Holdings, Inc. and its debtor affiliates obtained
approval from the U.S. Bankruptcy Court for the District of
Delaware to retain and employ Ernst & Young LLP as accountants
and tax advisors, nunc pro tunc to November 12, 2001.

Primarily, the Debtors will look for Ernst & Young's assistance
on:

      i) preparation of the Debtors' federal, state and local tax
         returns that must be filed, including income tax returns
         for the tax year 2000 which, per an extension filed by
         the Debtors, need to be filed with the Internal Revenue
         Service and various state taxing authorities in which
         they maintain operations;

     ii) the provisions of accounting, tax and auditing services
         and advice in connection with ongoing activities and
         obligations; and

    iii) the provision of necessary accounting analysis and
         advice in support of the Debtors' chapter 11 plan and
         bankruptcy cases.

The Debtors tell the Court that will pay Ernst & Young at its
usual and customary hourly rates:

      Partners/Principals          $575-$850
      Senior Managers              $523-$582
      Managers                     $418-$495
      Seniors                      $303-336
      Staff/interns                $116-$215

Ernst & Young will bill the Debtors on a fixed rate basis for
performing tax compliance services:

           Tax year 2000:     $65,000
           Tax year 2001:     $75,000

Wash Depot Holdings, Inc. which provides car washing services,
filed for chapter 11 protection on October 1, 2001 together with
its direct and indirect subsidiaries. Michael R. Lastowski, Esq.
at Duane, Morris & Heckscher LLP and Daniel C. Cohn, Esq. at
Cohn, Kelakos, Khoury, Madoff & Whitesell LLP represent the
Debtors in their restructuring efforts.


WILLIAMS COMMS: Moves to Assume Restructuring Pact with BofA
------------------------------------------------------------
Corinne M. Ball, Esq., at Jones Day Reavis & Pogue in New York,
relates that Williams Communications Group (WCG) began
discussions with its Lenders concerning a restructuring of its
obligations under the Credit Agreement with Bank of America N.A,
as administrative agent, in the fourth quarter of 2001.
Thereafter, in light of the continuing deterioration of
conditions in the telecommunications industry and the financial
markets in general, WCG determined to undertake a comprehensive
debt restructuring and de-leveraging of its balance sheet. To
accomplish this goal, WCG commenced negotiations with not only
the Lenders, but also with The Williams Companies Inc. (TWC) and
an informal committee that was formed in February 2002 by
certain holders of WCG's Senior Redeemable Notes. The
negotiations with the Lenders and the Informal Note-holders
Committee culminated in the execution of the Restructuring
Agreement immediately prior to the commencement of these Chapter
11 cases.

The Debtors therefore ask the Court to authorize them to assume
the Restructuring Agreement.

The key provisions of the Restructuring Agreement are:

A. Prepayment of Amounts Outstanding Under the Credit Agreement:
    Williams Communications LLC has agreed to prepay a total of
    $450,000,000 in upcoming scheduled amortization payments
    under the Credit Agreement. Of that amount, $200,000,000 was
    prepaid upon execution of the Restructuring Agreement and the
    remaining $250,000,000 will be payable by Williams LLC upon
    consummation of a Chapter 11 plan for the Debtors that
    reflects the provisions set forth in the Restructuring
    Agreement. These prepayments will be applied to reduce
    scheduled amortization payments under the Credit Agreement,
    in the direct chronological order of maturity, thus obviating
    the need for further principal payments by Williams LLC under
    the Credit Agreement until December 31, 2004.

B. New Investment: The Restructuring Agreement requires WCG to
    obtain new debt or equity funding in the amount of
    $150,000,000 from sources outside WCG. The proceeds of the
    New Investment will be used to fund, in part, the
    $250,000,000 in prepayments due under the Credit Agreement
    upon consummation of the Plan.

C. Amendments to the Credit Agreement. The Lenders have agreed
    to an interim amendment of the Credit Agreement and to the
    material terms of a permanent amendment and restatement of
    the Credit Agreement. These modifications to the Credit
    Agreement:

    a. provide that the commencement of the Chapter 11 cases
       will not create an event of default and acceleration of
       the Company's obligations under the Credit Agreement;

    b. modify certain financial covenants to eliminate potential
       events of default and align the covenants to WCG's current
       business plan and cash forecasts;

    c. provide that the $450,000,000 in prepayments will be
       applied to future maturities in direct chronological order
       of maturity; and

    d. otherwise reflect the provisions of the Restructuring
       Agreement.

D. Use of Cash Collateral: The Lenders have agreed to allow the
    Debtors to use $25,000,000 of the Lenders' cash collateral
    upon the terms of a proposed order, to fund the expenses of
    the Chapter 11 cases.

E. Treatment of Claims of Claims Under a Chapter 11 Plan: The
    Debtors have agreed to use their reasonable best efforts to
    propose, solicit acceptances to, and obtain confirmation of
    the Plan, containing the following treatment for claims
    against the Debtors:

    a. holders of allowed unsecured claims against the Debtors,
       (consisting of the allowed unsecured claims arising under
       the Senior Redeemable Notes and any allowed unsecured
       claims of TWC) will receive their pro rata share of 100%
       of the new common stock of reorganized WCG;

    b. the secured claims of the Lenders' arising from the
       Debtors' Guarantees will be unimpaired; and

    c. claims arising from rescission of a purchase or sale of
       WCG's securities, or for reimbursement or contribution on
       account of such claims, will receive no distribution under
       the Plan and such claims will be discharged.

F. Governance of Reorganized WCG: The Debtors have agreed that
    the Plan will provide for a nine-person board of directors of
    reorganized WCG, to be initially comprised of the CEO, at
    least two current directors selected by WCG's current board
    of directors, and six directors selected by the official
    committee of unsecured creditors appointed in these cases.

G. Agreement to Vote for the Debtors' Chapter 11 Plan: Subject
    to the receipt of a disclosure statement that has been
    approved by the Court as containing "adequate information"
    pursuant to Section 1125 of the Bankruptcy Code, and provided
    that such information is not materially different from
    information already provided by the Company to the Lenders
    and Noteholders party to the Restructuring Agreement, each
    Holder has agreed to vote to accept a chapter 11 plan
    proposed by the Debtors that provides for and is consistent
    with the terms of the Plan set forth in the Restructuring
    Agreement.

H. Right To Participate/Right of First Offer: The Restructuring
    Agreement gives the Holders of Senior Redeemable Notes who
    were parties to the Restructuring Agreement when it was
    initially executed, the right to participate in an additional
    $150,000,000 investment in the Company, on substantially
    similar terms as the New Investment, as well as a right of
    first offer to participate in future public or qualifying
    private issuance of debt or equity securities by WCG for two
    years following consummation of the Plan.

I. Termination Events: If the Restructuring Agreement is assumed
    by the Debtors, it will terminate upon written notice from
    the terminating Party or Parties if any of the conditions set
    forth below occurs, provided, however, that such termination
    requires a vote of such of the Lenders party to the
    Restructuring Agreement as constitute the "Required Lenders"
    under the Credit Agreement, or a vote by Noteholders that are
    Parties to the Restructuring Agreement who hold not less than
    51% of such group's Note Holdings:

    a. the Plan is not consummated by July 15, 2002, provided,
       however, that such deadline can be extended to October 15,
       2002 on the following conditions:

       1. the prepayment of $50,000,000 of the $250,000,000
          prepayment due under the Credit Agreement upon
          consummation of the Plan;

       2. the satisfaction by the Company of certain EBITDA tests
          under the Credit Agreement;

       3. the Debtors will have filed the Plan and proposed
          Disclosure Statement with the Court;

       4. a date will have been set for a hearing on the proposed
          Disclosure Statement; and

       5. the Debtors will be prosecuting the Plan in good faith;
          or

    b. the Plan contains terms materially inconsistent with or
       less favorable than those described in the Restructuring
       Agreement, or the Plan is modified in any way that makes
       it materially inconsistent with or less favorable than the
       terms set forth in the Restructuring Agreement; or

    c. WCG fails to procure a commitment from a qualified
       investor for the New Investment by the date of the voting
       deadline set forth the Plan; or

    d. the Debtors fail to file the Plan and Disclosure Statement
       on or before May 20, 2002; or

    e. The Cash Collateral Order is not entered on or before May
       20, 2002, or the Debtors' authorization to use the Cash
       Collateral will have been terminated without the consent
       of the Agent, acting at the direction of the Consenting
       Lenders which constitute the Required Lenders; or

    f. An Event of Default occurs under the Credit Agreement and
       is continuing without waiver by the Required Lenders; or

    g. WCG seeks or another person obtains a judicial order or
       judgment that affects adversely or alters in any
       respect the rights and remedies of the Lenders with
       respect to Williams LLC or its property; or

    h. The Debtors fail to propose in the Plan the separate
       classification of the claims arising under the Senior
       Redeemable Notes.

Ms. Ball informs the Court that the Restructuring Agreement was
executed after the Debtors carefully considered numerous
restructuring alternatives, and is the result of extensive
negotiations with representatives of each of the Company's
principal creditor constituencies. Pursuant to the Restructuring
Agreement, over 90% of the Lenders, and holders of more that
$875,000,000 in principal amount of the Senior Redeemable Notes
have each agreed to support a restructuring proposed by the
Debtors that will:

A. provide WCG with the means to continue and grow its business
    by eliminating the debt service requirements associated with
    over $5,000,000,000 in unsecured obligations of WCG,

B. result in the prepayment of nearly 50% of the indebtedness
    and outstanding under the Credit Agreement, thereby freeing
    Williams LLC from significant interest obligations as well as
    the need to make any further principal amortization payments
    until December 31, 2004; and

C. perhaps most importantly, allow Williams LLC's debts to be
    restructured without the need to resort to Chapter 11,
    thereby avoiding the attendant damage to Williams LLC's
    customer, vendor, and employee relationships that could ensue
    from a chapter 11 filing, and could diminish the overall
    value of the enterprise.

Moreover, unlike the situation where a debtor seeks to assume an
executory contract that will saddle the estate with post-
petition financial obligations, Ms. Ryland points out that the
Debtors' obligations under the Restructuring Agreement are non-
monetary in nature.  The Debtors will simply be obligated to
diligently prosecute and consummate the Plan. The Debtors
believe that the Plan represents the best possible outcome for
their estates and creditors. The Debtors are otherwise entitled
to propose and prosecute plans under Section 1121 of the
Bankruptcy Code. Therefore the Debtors submit that assumption of
the Restructuring Agreement represents the reasonable exercise
of the their business judgment. (Williams Bankruptcy News, Issue
No. 3; Bankruptcy Creditors' Service, Inc., 609/392-0900)


WINSTAR COMMS: Court Nixes Trustee's Bid to Hire Kaye Scholer
-------------------------------------------------------------
Judge Akard denies the Winstar Communications, Inc. Trustee's
application to retain Kaye Scholer as her counsel.  Judge Akard
says that since Winstar is liquidating and not reorganizing, no
unusual legal expertise, a trait which Kaye Scholer apparently
possesses, is necessary.  He feels that Kaye Scholer's
application is unnecessary and duplicative of the Trustee's
application to employ and retain Fox Rothschild.

Judge Akard also takes exception to the Firm's hourly rates:
$590 for partners and $335 for associates.  He feels these rates
are exorbitant given that the Trustee's application for Kaye
Scholer's retention and employment is, as earlier stated,
unnecessary and duplicative.

            Chapter 7 Trustee Moves for Reconsideration

Chapter 7 Trustee Christine C. Shubert, meanwhile, asks the
Court to reconsider and modify its decision and to accept the
Trustee's clarification of the Court's Order authorizing the
employment and retention of Fox Rothschild.  The change should
reflect that Fox Rothschild is to serve the as the Trustee's
local counsel in the Debtors' proceedings.

Michael G. Menkowitz, Esq., at Fox, Rothschild, O'Brien &
Frankel in Philadelphia, Pennsylvania, tells the Court that the
Trustee applied for the retention of Kaye Scholer based on the
recommendation of the Post-Petition Lenders. This came after
several discussions with the counsel to the Lenders regarding
the status of the proceedings and a prospective strategy on how
to maximize the return to the estates and the Debtors'
creditors. The Creditors Committee had also recommended the
retention of Kaye Scholer based on the firm's bankruptcy
expertise and experience in large and complex bankruptcy cases.

Mr. Menkowitz informs the Court that, in addition, the Post-
Petition Lenders have full knowledge of Kaye Scholer's hourly
rates.  They have agreed to carve-out the fees and expenses of
Kaye Scholer, as well as the other professionals to be retained
by the estates.

Mr. Menkowitz submits that that the denial of Kaye Scholer's
retention at this stage of the proceedings would seriously
impede the Trustee's ability to expeditiously liquidate the
Debtors' estates and severely impact the potential return to the
Debtors' creditors. He admits that Kaye Scholer became
integrally involved in every aspect of the Debtors' cases, and
had developed a harmonious working relationship with the
Trustee, when Judge Katz made issued an oral ruling granting the
application for Kaye Scholer's retention. Judge Katz's oral
ruling, however, was not entered in the Court's docket.

Mr. Menkowitz clarifies that the Trustee only intends for Fox
Rothschild to be retained to serve in the capacity of local
counsel, determining that it is in the best interests of the
Debtors' estate. He states that to avoid duplication of Kaye
Scholer's efforts as lead counsel, the Trustee, counsel to the
Creditors' Committee and the Post-Petition Lenders, agreed that
Fox Rothschild would complete work on the transactions that they
were involved in prior to Kaye Scholer's engagement. After that,
they would only handle those matters in which a potential
conflict of interest could arise.  This was due to the massive
amount of potential defendants in the Debtors' cases and those
aspects of the case that would customarily be handled by local
counsel since Kaye Scholer does not have a Delaware office.

Mr. Menkowitz tells the Court that since the Trustee's
engagement of Kay Scholer on February 18, 2002, the firm has
assumed the role of lead counsel. He states that Kaye Scholer
has spent a considerable amount of time since that date
counseling the Trustee in connection with a multitude of complex
issues requiring the Trustee's immediate attention. These issues
include:

A. Analyzing the Asset Purchase Agreement, Management Agreement
    and other related agreements authorized by the Court's Order
    dated December 19, 2002, and advising the Trustee of the
    rights and obligations of the Debtors' estates under the
    agreements and the Sale Order;

B. Analyzing the Debtors' executory contracts and unexpired
    leases and advising the Trustee of her rights and obligations
    with respect to these, i.e., drafted and prosecuted the
    Trustee's Motion to Extend Time to Assume or Reject Executory
    Contracts and Unexpired Leases Under Section 365(d)(1) of the
    Bankruptcy Code;

C. Analyzing the status of the administrative claims filed
    during the Chapter 11 proceedings and drafting the Trustee's
    Motion for an Order Authorizing Trustee to Establish Last
    Date to File Administrative Proofs of Claim;

D. Counseling the Trustee in connection with the Transition
    Services Agreement between the estates and Winstar Holdings,
    LLC, which is necessary for the estates to: (a) complete
    their obligations for reporting to the U.S. Trustee's office;
    (b) filing tax returns; (c) completing its asset recovery
    work; and (d) agreeing on the appropriate amounts due and
    owing to each of the entities resulting from inter-company
    transactions; and

E. Counseling the Trustee in connection with maximizing the
    value and the disposition of the Excluded Assets, as defined
    in the Sale Order, and advising the Trustee in connection
    with and participating in negotiations in connection with the
    Excluded Assets, including but not limited to:

   a. Reviewing the Debtors' books and records in connection with
      $350,000,000 in payments made during the preference
      period, and counseling the Trustee in connection with
      prosecuting potential preference actions in connection with
      the payments;

   b. Reviewing the Debtors books and records in connection with
      transfers made by the Debtors which may constitute
      fraudulent transfers and counseling the Trustee in
      connection with prosecuting potential fraudulent conveyance
      actions;

   c. Participating in the negotiation and consummation of the
      sale of the Debtors' 5% interest in Winstar Holdings, LLC
      for 792,000 shares of Class B Common Stock of IDT
      Corporation;

   d. Participating in the negotiations and marketing of the
      Debtors minority interest in a Russian Telecommunications
      Company;

   e. Participating in the negotiations and marketing of the
      Debtors' interest in a joint venture in Hong Kong;

   f. Participating in the negotiation and settlement of several
      disputes in connection with assets sales;

   g. Prosecuting existing causes of action in connection with
      the Excluded Assets; and

   h. Counseling the Trustee with respect to commencement of
      lawsuits in connection with Excluded Assets.

Fox Rothschild, Mr. Menkowitz maintains, has limited
participation in connection with the negotiation of these items.
He disagrees with the Court's determination that handling a
liquidation in Chapter 7 does not require unusual legal ability
or expertise. He emphasizes that the Debtors' cases are
extremely complex and atypical. Kaye Scholer is already deeply
immersed in negotiations in connection with maximizing the value
of several Excluded Assets remaining with the Debtors' estates.
Many of these negotiations are time-sensitive. To disrupt the
negotiations at this late stage would have a severely
detrimental effect on the value of the Excluded Assets.

Mr. Menkowitz points out that the Debtors' case will require a
significant amount of manpower and resources considering the
sheer volume of payments that the Debtors made during the
preference period, which approximate $350,000,000. He submits
that the liquidation of the Debtors' estates has already given
rise to a whole host of multifaceted issues such as federal and
local regulatory issues.  These regulatory issues include issues
in connection with the liquidation of the Debtors' assets;
international law issues with respect to the purchase and sale
of assets in various foreign countries; and massive amounts of
more traditional bankruptcy issues. Without an absolute windfall
resulting from the Trustee's prosecution from the bankruptcy
causes of action, it is unlikely that any creditors other than
the Post-Petition Lenders will receive any distribution in the
Debtors' cases. (Winstar Bankruptcy News, Issue No. 27;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


XEROX CORP: Receives $496 Million Financing from GE Capital
-----------------------------------------------------------
Xerox Corporation (NYSE: XRX) continues to make significant
progress in strengthening its financial position as it delivers
on a strategy to build back value and restore the company to
good health.

The company announced that it received $496 million in financing
from GE Capital, secured by portions of Xerox's lease
receivables in the U.S., which will be amortized over a period
that extends into 2005. Xerox and GE Capital expect to complete
additional U.S. monetizations this year while the two companies
finalize the agreement for GE Capital to become the primary
provider of equipment financing for Xerox customers in the U.S.

On May 1, GE Capital Vendor Financial Services and Xerox
launched its joint venture, Xerox Capital Services. XCS manages
Xerox's customer administration and leasing activities in the
U.S., including various financing programs, credit approval,
order processing, billing and collections.

In the past year, Xerox has received approximately $2.7 billion
in financing from GE Capital, secured by portions of Xerox's
lease receivables in the U.S., United Kingdom and Canada.

For additional information about The Document Company Xerox,
visit http://www.xerox.com/investor


XO COMMS: Total Shareholder Deficit Nears $2 Billion at Mar. 31
---------------------------------------------------------------
XO Communications, Inc. (OTCBB:XOXO) announced financial results
for the quarter ended March 31, 2002.

Total revenue was $333.4 million in the first quarter of 2002, a
20.2 percent increase over revenue reported in the first quarter
of 2001, and a 2.8 percent decrease over revenue reported in the
fourth quarter of 2001. The slight decrease in quarter-over-
quarter was attributable to the sale of XO's European operations
and, to a lesser extent, continuing customer bankruptcies.

Of the total revenue reported in the first quarter of 2002,
$168.3 million was derived from voice services revenue, which
includes revenue from local, long distance and other enhanced
voice services, and $135.8 million was attributable to data
services, which includes Internet access, network access, and
web hosting. Revenue from integrated voice and data services
totaled $28.8 million and other revenue totaled $0.5 million in
the first quarter of 2002.

EBITDA loss totaled $12.2 million in the first quarter of 2002,
compared to an EBITDA loss of $39.5 million in the fourth
quarter of 2001, and a $77.1 million EBITDA loss in the first
quarter of 2001.

During the quarter, XO implemented Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible
Assets," which resulted in XO taking a $1.9 billion non-cash
charge against earnings, reflected as a cumulative effect of an
accounting change, representing a write off of all of the
company's goodwill. As a result of these factors, XO incurred a
net loss for the quarter of $2.2 billion, or a net loss of $4.97
per share. Without the one-time, non-cash write off of goodwill,
the normalized first quarter net loss would have been $299.0
million, or a net loss of $0.68 per share. This compares with a
net loss of $443.5 million, or a net loss of $1.20 per share for
the first quarter of 2001.

XO reported that, as of the March 31, 2002, it had approximately
$589.0 million in cash and marketable securities on hand. During
the fourth quarter of 2001 and continuing in 2002, XO has
successfully implemented a series of expense reduction and cash
conservation initiatives. Late last year, XO also disclosed that
it would not make cash interest and dividend payments on its
unsecured notes and preferred stock beginning on December 1,
2001. XO noted that its improving trend in EBITDA loss and its
recent completion of several significant non-repeating capital
projects are expected to result in a further decrease of its
cash burn rate for the remaining quarters of 2002.

Accordingly, assuming revenues remain generally consistent with
current levels in the near term, continued reductions in uses of
cash consistent with recent trends and continued nonpayment of
cash interest and dividend amounts during the proposed
recapitalization process, XO currently estimates that the $589.0
million of cash and marketable securities on hand as of March
31, 2002 will be sufficient to fund its operations through the
completion of its proposed recapitalization.

XO Communications is one of the world's leading providers of
broadband communications services offering local and long
distance voice communication services, Digital Subscriber Line
(DSL) access, Web hosting and e-commerce service, Virtual
Private Networks (VPNs), dedicated access, global transit and
application infrastructure services for delivering applications
over the Internet or a VPN.

XO has assembled an unrivaled set of facilities-based broadband
networks and Tier One Internet peering relationships throughout
the United States. XO currently offers facilities-based
broadband communications services in 65 markets throughout the
United States.

At March 31, 2002, XO Communications' balance sheet shows a
total shareholders' equity deficit of close to $2 billion.


* DebtTraders' Real-Time Bond Pricing
-------------------------------------

    Issuer           Coupon   Maturity  Bid - Ask   Weekly change
    ------           ------   --------  ---------   -------------
Crown Cork & Seal     7.125%  due 2002    95 - 97        0
Federal-Mogul         7.5%    due 2004    19 - 21        -1
Finova Group          7.5%    due 2009  34.5 - 35.5      0
Freeport-McMoran      7.5%    due 2006    87 - 89        0
Global Crossing Hldgs 9.5%    due 2009   1.5 - 2.5       -0.5
Globalstar            11.375% due 2004   7.5 - 9.5       +0.5
Lucent Technologies   6.45%   due 2029    63 - 65        +2
Polaroid Corporation  6.75%   due 2002   2.5 - 4.5       0
Terra Industries      10.5%   due 2005    86 - 89        0
Westpoint Stevens     7.875%  due 2005    64 - 66        -1
Xerox Corporation     8.0%    due 2027    51 - 53        +1

Bond pricing, appearing in each Thursday's edition of the TCR,
is provided by DebtTraders in New York. DebtTraders is a
specialist in global high yield securities, providing clients
unparalleled services in the identification, assessment, and
sourcing of attractive high yield debt investments. For more
information on institutional services, contact Scott Johnson at
1-212-247-5300. To view our research and find out about private
client accounts, contact Peter Fitzpatrick at 1-212-247-3800.
Real-time pricing available at http://www.debttraders.com

                           *********


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

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

Bond pricing, appearing in each Thursday's edition of the TCR,
is provided by DebtTraders in New York. DebtTraders is a
specialist in global high yield securities, providing clients
unparalleled services in the identification, assessment, and
sourcing of attractive high yield debt investments. For more
information on institutional services, contact Scott Johnson at
1-212-247-5300. To view our research and find out about private
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, Donnabel C. Salcedo, Ronald P. Villavelez and Peter
A. Chapman, Editors.

Copyright 2002.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.  Information
contained herein is obtained from sources believed to be
reliable, but is not guaranteed.

The TCR subscription rate is $625 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each.  For subscription information, contact Christopher
Beard at 240/629-3300.

                      *** End of Transmission ***