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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, September 5, 2002, Vol. 6, No. 176     

                          Headlines

ASBESTOS CLAIMS: Wants Court to Appoint Trumbull as Claims Agent
ATLANTIC COAST: Blaylock Initiates Coverage with "Hold" Rating
AVON PRODUCTS: Reaffirms Outlook for Third Quarter and FY 2002
BALDWINS INDUSTRIAL: Looks to Alvarez for Restructuring Advice
BETHLEHEM STEEL: Seeks Second Extension of Lease Decision Period

BORDEN CHEMICAL: S&P Places B+ Corp. Rating on Watch Negative
BUDGET GROUP: Taps Fowler White as Counsel in Ryder Litigation
CALYPTE BIOMEDICAL: Diedre M. McCoy Discloses 5.1% Equity Stake
CASUAL MALE: Keeps Exclusive Right to File Plan Until Dec. 26
CENTRAL EUROPEAN MEDIA: Deloitte Takes Over Andersen's Work

CHESAPEAKE ENERGY: Completes 3 Mid-Continent Gas Acquisitions
CLAXSON INTERACTIVE: Amends Pending Exchange Offer for 11% Notes
CLICK COMMERCE: Board Approves One-For-Five Reverse Stock Split
CMS ENERGY: Sells Power Plant in Thailand to Advanced Power
COMDIAL CORP: Bridge Financing Reaches $3.5 Million at August 15

COMDIAL CORP: Settles Patent Infringement Suit with Rates Tech.
COMDISCO INC: Court Approves Proposed Estimated Claims Reserve
CONSECO FINANCE: Moody's Cuts 42 Securitization Ratings
CONSOLIDATED FREIGHTWAYS: Penn. Gov. Directs Aid to Employees
CONSOLIDATED FREIGHTWAYS: Shareholders Out of the Money

CONSOLIDATED FREIGHTWAYS: Closure Won't Impact on Canadian Unit
CONSOLIDATED FREIGHTWAYS: GECC Commits to Provide $225M Facility
CONSOLIDATED FREIGHTWAYS: Voluntary Chapter 11 Case Summary
CONTINENTAL AIRLINES: Traffic Slides-Down 9.5% in August 2002
CREDIT STORE: Brings-in Richard Budd from Marotta Gund as CRO

DADE BEHRING: Creditors' Meeting to Convene on Sept. 20, 2002
DANA CORP: Closes $152 Mill. Sale of Real Estate Services Group
DLJ COMMERCIAL: Fitch Affirms Low-B Ratings on Classes B-4 to 6
ENRON: Connecticut Resources Files Suit to Recoup $220MM Claim
ENRON: Marathon Oil Acquires LNG Delivery Rights at Elba Island

FARMLAND INDUSTRIES: Wants to Restructure Fertilizer Operations
FOUNTAIN PHARMA.: Sends Information Statement to Shareholders
GENTEK INC: Fitch Downgrades Senior Subordinated Notes to D
GLIMCHER: Closes $106MM Asset Sale to Repay Maturing Obligations
GLOBAL CROSSING: Asks Court to Okay Settlement with Level 3

HOMEGOLD FINL: Receives Bid for Purchase of Retail Mortgage Unit
HORSEHEAD: Gets Interim Nod to Use Lenders' Cash Collateral
INT'L AIRLINE: Independent Accountants Raise Going Concern Doubt
IT GROUP: Court Okays Jefferson Wells' Retention as Tax Advisor
J.E.M INC: Court Schedules Bankruptcy Sale for September 10

KEY3MEDIA GROUP: G. Andrea Botta Leaves Post as Director
KMART CORP: Wants Court Approval to Engage Encore Food Experts
LERNOUT & HAUSPIE: Court Okays Dictaphone Transition Agreement
LODGIAN INC: Amended Plan's Classification & Treatment of Claims
MAIL-WELL: Envelope Unit Names J. Santimore as East Region VP

MIDWAY AIRLINES: Pilots Reaches Tentative Pact with Management
NAPSTER: Court Fixes September 30 Bar Date for Proofs of Claim
NOTIFY TECHNOLOGY: Fails to Meet Nasdaq Listing Requirements
OMEGA HEALTHCARE: Fitch Upgrades Preferred Rating to C from D
PACIFIC GAS: Court Blesses Confirmation Discovery Protocol

PUBLIC SERVICE: Offering "Participating Units" to Repay Debts
RACHEL'S GOURMET: June 30 Balance Sheet Upside-Down by $3 Mill.
RMF COMMERCIAL: Fitch Junks $7.3 Million Class F P-T Certs.
SAFETY-KLEEN: Wants to Expand Connolly Bove's Litigation Role
SCIENT INC: Creditors Meeting to Convene on September 20, 2002

TERAFORCE TECH.: Reaches Accord to Restructure Outstanding Debt
TICE TECHNOLOGY: Coulter & Justus Expresses Going Concern Doubt
TIDEL TECHNOLOGIES: Renews Senior Credit Line with JP Morgan
UAL CORP: S&P Keeping Watch on Junk Corporate Credit Rating
UNIFORET: June Quarter Balance Sheet Upside Down by C$90 Million

US AIRWAYS: McGuireWoods Serving as Local Bankruptcy Counsel
U.S. STEEL: Appoints Szymanski as Gen. Manager, Service Centers
WHEELING-PITTSBURGH: Wants to Maintain Exclusivity Until Dec. 23
WORLDCOM INC: Court Grants Various Utilities Adequate Assurance

* FTI Consulting Acquires PwC's U.S. Business Recovery Services

* DebtTraders' Real-Time Bond Pricing

                          *********

ASBESTOS CLAIMS: Wants Court to Appoint Trumbull as Claims Agent
----------------------------------------------------------------
Asbestos Claims Management Corporation wants the U.S. Bankruptcy
Court for the Northern District of Texas to appoint Trumbull LLC
as the Official Claims Balloting and Mailing Agent for the
Debtor and as Agent for the Bankruptcy Court.

Trumbull is expected to:

     a) provide notice to all parties in interest of the
        commencement of this chapter 11 case and provide notice
        to all creditors of the first meeting of creditors
        pursuant to section 341 of the Bankruptcy Code;

     b) assist with the preparation of the ACMC's schedules and
        statement as required by Rule 1007(a) of the Federal
        Rules of Bankruptcy Procedure;

     c) notify creditor of the bar to be established in this
        chapter 11 case pursuant to Bankruptcy Rule 3003(c)(3)
        and the existence and amount of their respective claims,
        as established by ACMC's records;

     d) docket all claims received and maintain the official
        claims register and provide the Clerk with an exact
        duplication on a weekly basis;

     e) upon completion of the docketing process for all claims
        received to date, turn over the Clerk a copy of the
        Claims Register for the Clerk's review;

     f) upon approval by the Clerk of the Claims Register,
        relocate all of the actual proofs of claim filed to the
        Claims Agent;

     g) ensure that the Claims Register shall specify for each
        claim docketed

        - the claims number assigned,
        - the date received,
        - the name and address of the claimant and agent, if an
          agent filed the proof of claim, and
        - the amount and classification asserted by such
          claimant;

     h) maintain the mailing list for all entities that have
        filed a proof of claim and make such list available at
        the request of any of the parties in interest or the
        Clerk;

     i) upon entry of a final decree closing the case, box and
        transport all original documents in proper format, as
        provided by the Clerk's Office, to the Federal Archives;

     j) comply with any further conditions and requirements as
        the Clerk's Office may prescribe;

     k) provide all service necessary with respect to the
        preparation, mailing and tabulation of ballots with
        respect to ACMC's plan or plans of reorganization; and

     l) provide such other administrative services that may be
        requested by ACMC.

In accordance with 28 U.S.C. Section 156(c), Trumbull will be
compensated for its services from the assets of ACMC's estate or
by the NGC Settlement Trust.  Specific hourly rates and
transaction costs are not disclosed.

Asbestos Claims Management Corporation filed for chapter 11
protection on August 19, 2002 at the U.S. Bankruptcy Court for
the Northern District of Texas. Michael A. Rosenthal, Esq., and
Janet M. Weiss, Esq., at Gibson, Dunn & Crutcher represent the
Debtor in its restructuring efforts.  When the Company filed for
protection from its creditors it listed debts and assets of over
$100 million.


ATLANTIC COAST: Blaylock Initiates Coverage with "Hold" Rating
--------------------------------------------------------------
Blaylock & Partners' airlines and transportation analyst Ray
Neidl has initiated coverage of Atlantic Coast Airlines Holdings
(Nasdaq: ACAI) with a "hold" recommendation. The rating stems
from the possibility that UAL Corp., which provides about
80 percent of ACAI's revenues, may file for bankruptcy.  Mr.
Neidl believes that investors will tend to avoid ACAI stock
until the UAL situation is clarified.

In his report titled "Waiting for More Clarity," Mr. Neidl
states that he would recommend a "Buy" rating and a $22 price
target -- based on a conservative 15x multiple on 2003 EPS
estimate of $1.43 -- for ACAI once the UAL situation becomes
clearer.  Mr. Neidl believes the stock is very attractive, as it
recently traded at $30, over 20x the projected EPS for fiscal
2003.

Mr. Neidl notes that ACAI's profitability and growth are
predictable, as 100 percent of its flights operate under fee-
per-departure contracts, mainly with large carriers like UAL and
Delta.  The contracts guarantee ACAI a certain margin, which he
estimates to be between 10-12 percent before fuel cost
adjustment and 12-14 percent excluding adjustments.  The company
has remained profitable, and given the industry downturn, still
maintained good margins.  He predicts the company to move to an
all regional jet fleet and have over 150 jets by the end of
2004; it currently operates 98 jets. Regional jets are an
aircraft type that is desired by larger network carriers, to
enable them to offer more service to smaller communities that
cannot support frequent service by the larger jets.

ACAI's earnings risks are limited as long as it continues its
excellent service reputation, meeting its contract obligations
and operating in a reliable manner.  However, the main risk for
ACAI is that the airline will not get paid if flights are
cancelled, and partners can impose penalties or terminate the
contracts, as they operate under the fee-per-departure contract.

Another risk that industry observers have noted is that major
partners may try to modify their contracts, as they continue to
lose revenue.  However, Mr. Neidl disagrees since the contracts
are legally binding and the larger carriers need the service of
regional airlines now more than ever.

Blaylock's ratings system consists of "buy," "hold" and "sell"
recommendations.  Investment banking stocks have a "not rated"
designation. Institutional investors interested in receiving
more information should contact Mr. Neidl at 212/715-6627
(rneidl@blaylocklp.com).  Journalists interested in receiving
copies of the research reports should contact Dao Tran at
dtran@starkmanassociates.com

Based in New York, Blaylock & Partners, L.P., has been ranked by
Black Enterprise magazine as the number one minority-owned
investment banking firm for 1999 and 2000.  The firm has co-
managed four of the largest most recent IPOs -- Travelers
Property Casualty Corp., Prudential Financial, Inc., Kraft Foods
Inc., and Agere Systems Inc.  Blaylock & Partners is a member of
the NASD and SIPC.

Blaylock & Partners, L.P., is a member of the National
Association of Securities Dealers, CRD number 35669.


AVON PRODUCTS: Reaffirms Outlook for Third Quarter and FY 2002
--------------------------------------------------------------
Avon Products, Inc., (NYSE: AVP) reaffirmed earnings per share
expectations for the third quarter and full-year 2002, citing
continued excellent sales and profit growth in the U.S and
strong local currency results in its international operations.

The company said it remains comfortable with the consensus
estimate for earnings per share of $.47 in the third quarter,
compared with $.44 per share in the third quarter of last year,
before unusual items in both periods.

In the third quarter of this year, as previously announced, Avon
expects to record a special charge related to its Business
Transformation initiatives. The charge is likely to be smaller
than originally planned and is now estimated to be in the range
of $40-$60 million pretax, or $.10-$.20 per share. Avon said no
additional special charges are anticipated for the company to
achieve its targeted 250 basis-point increase in operating
margin from Business Transformation by the end of 2004.

In last year's third quarter, unusual items increased earnings
by $.04 per share to $.48 per share.

For full-year 2002, Avon said it is on track to achieve its
previously stated target of double-digit earnings growth, or
$2.30 per share, compared with $2.09 per share in 2001, before
unusual items in both years. In 2001, unusual items reduced
earnings by $.24 per share to $1.85 per share.

Avon said local currency sales in the third quarter should be up
double digits, on top of the very strong 12% increase in last
year's third quarter. Sales growth is being driven by double-
digit increases in both units and active Representatives, with
all geographic regions posting solid gains. Dollar-denominated
sales are expected to be up approximately 2% in the quarter,
after the effects of foreign currency translation.

Operating profit in the third quarter is expected to increase at
a mid-to-high teens percentage rate in local currencies and at a
mid-single-digit rate in dollars. Operating margin should
increase approximately 30 basis points from last year's record
level of 12.6%, and gross margin is forecast to increase
approximately 60 basis points.

Avon also said cash flow from operations continues to be strong,
reflecting ongoing inventory improvements. The company is on
track to generate its targeted $500-$550 million in cash flow
for the full year, even after its plan to make a larger-than-
anticipated cash contribution of approximately $75 million to
its employee pension plan in the third quarter. An additional
contribution to the pension plan is possible in the fourth
quarter, the company said.

Commenting on the outlook for the quarter, Andrea Jung, Avon's
chairman and chief executive officer, said, "The underlying
strength of our global direct selling operations is continuing.
The U.S. business should deliver another quarter of outstanding
results, demonstrating that our largest developed market can
achieve sustained, impressive growth. In addition, Europe and
Asia each are posting double-digit profit increases, while in
Latin America, robust local currency results in most markets are
helping to offset weakness in Argentina.

"We're very pleased that Avon's overall performance for the year
is on track despite the ongoing economic crisis in Argentina,
and we look forward to posting our third consecutive year of
double-digit earnings growth in 2002," Ms. Jung said.

Avon is scheduled to report third-quarter financial results on
October 18.

              Regional Outlook For Third Quarter

Sales in the U.S. in the third quarter are expected to increase
5%, on top of the 7% sales increase recorded in the third
quarter of 2001, which was the highest third-quarter growth rate
in recent years. Sales in the quarter are being driven by mid-
single-digit unit growth and an estimated 2% increase in the
number of active Representatives.  Operating profit in the U.S.
is expected to grow in the mid-to-high teens, and operating
margin is forecast to expand by approximately 150 basis points
to a record third-quarter level of over 16%, driven by continued
benefits from Business Transformation.

In Europe, sales are forecast to be up over 20%, driven by
growth in units and active Representatives in the 20% range.  
Operating profit is expected to increase in the mid teens.  
Europe's strong performance is resulting from ongoing
substantial growth in the markets of Central and Eastern Europe,
especially Russia, as well as solid sales and unit growth in the
U.K., the largest market in the region. Europe's operating
margin is forecast to be about 90 basis points lower due to
significant investments in the quarter to implement the region's
supply chain strategies.

In Latin America, sales are expected to be down mid-teens, but
are forecast to advance at a mid-teens rate in local currencies,
with solid growth in units and active Representatives.  Most
markets in the region are generating double-digit local currency
sales gains, with especially robust growth in Brazil and
Venezuela.  In Argentina, local currency sales are expected to
be about flat, and Avon's business there remains profitable on a
dollar basis despite the country's economic issues and major
currency devaluation. Operating profit in the region is forecast
to be down approximately 10%, but should increase at a double-
digit rate in local currencies, driven by results in Brazil,
Mexico, Venezuela and Chile. Operating margin for the region is
expected to be up about 80 basis points in the quarter.

In Asia, sales are expected to be up in the high single digits,
driven by double-digit growth in units and active
Representatives. All major markets are expected to contribute to
the sales growth, particularly China and Taiwan. Asia's
operating profit is expected to be up over 20%, reflecting
strong growth in Japan, China and Taiwan. Substantial operating
margin expansion in the range of 170 basis points is forecast
for the region in the quarter.

Avon is the world's leading direct seller of beauty and related
products, with approximately $6.0 billion in annual revenues.  
Avon markets to women in 143 countries through 3.5 million
independent sales Representatives.  Avon product lines include
such recognizable brand names as Avon Color, Anew, Skin-So-Soft,
Advance Techniques Hair Care, beComing and Avon Wellness.  Avon
also markets an extensive line of fashion jewelry and apparel.  
More information about Avon and its products can be found on the
company's Web site http://www.avon.com

At June 30, 2002, Avon's balance sheets show a total
shareholders' equity deficit of about $40 million.


BALDWINS INDUSTRIAL: Looks to Alvarez for Restructuring Advice
--------------------------------------------------------------
Baldwins Industrial Service, Inc., and Baldwins Leasing, LP ask
the U.S. Bankruptcy Court for the Southern District of Texas for
permission to employ Alvarez & Marsal, Inc., to give them
restructuring advice.

The Debtors wish to engage Alvarez & Marsal as their
restructuring advisors because of Alvarez & Marsal's prepetition
employment as the Debtors' restructuring advisors.  The cost and
delay of obtaining and educating new restructuring advisors who
do not possess the extensive knowledge of the Debtors' financial
history would be detrimental to the Debtors' reorganized
efforts.

Specifically, Alvarez & Marsal's will:

     i) provide assistance in the identification, evaluation and
        implementation of options for the Debtors to accomplish
        a resolution to its financial distress through an in-
        court or out-of-court process;

     2) review all of the Debtors agreements for borrowed money
        and lease financing and summarizing the pertinent
        information in a chart with a more detailed written
        description of each agreement attached as well as
        evaluate the structure of the Debtors financing and
        leasing obligation;

     3) provide assistance in the development of a receipts and
        disbursements cash flow analysis and forecast and other
        analysis and forecasting tools;

     4) evaluate the potential for the Debtors to obtain
        financing in support of an in-court or an out-of-court
        restructuring as assist in arranging such financing if
        required;

     5) provide pre-bankruptcy planning and implementation
        assistance as may be necessary with the Debtors'
        counsel;

     6) provide assistance in the filing and administration of
        an in-court restructuring, including compliance with the
        reporting, administrative and informational requirement
        of an in-court restructuring including the development
        of an order authorizing the use of Cash Collateral,
        Disclosure Statements and Plan of Reorganization,
        Schedules and Statements of Financial Affairs, Monthly
        Operating Reports and other documents as requested by
        counsel or the Debtors;

     7) assist in communication and negotiations with creditors
        and other parties involved;

     8) provide assistance in the identification and evaluation
        of preferential or voidable transactions, if necessary;

     9) provide expert testimony as may be necessary and
        acceptable to Alvarez & Marsal;

    10) prepare a liquidation analysis;

    11) provide transactional assistance relative to the plan of
        reorganization; and

    12) provide other assistance, potentially inclusive of
        management assistance, as may be requested by the Debtor
        and subject to Alvarez & Marsal's approval.

Alvarez & Marsal's current hourly rates are:

          Managing Directors      $450 - $520 per hour
          Directors               $325 - $400 per hour
          Associates              $250 - $325 per hour
          Analysts                $180 - $225 per hour

Baldwins Industrial Services Inc., and Baldwins Leasing LP  
filed for chapter 11 protection on August 26, 2002. Jack M.
Partain, Jr., Esq., at Fulbright & Jaworksi represents the
Debtors in their restructuring efforts.  When the Company filed
for chapter 11 protection it listed assets of not more than $10
million and estimated debts at not more than $50 million.


BETHLEHEM STEEL: Seeks Second Extension of Lease Decision Period
----------------------------------------------------------------
From 37 unexpired leases as of the Petition Date, Bethlehem
Steel Corporation and its debtor-affiliates now remain parties
to 22 Unexpired Leases.  The composition of these leases
include:

(a) 11 Unexpired Leases relating to regional sales offices
    operated by the Debtors;

(b) a sublease to a third party;

(c) leases used for storage facilities;

(d) leases for office space, ground leases; and

(e) leases for a railroad track and a security gate.

The Unexpired Leases pertain to properties owned by 20 different
lessors.  The Debtors intend to continue to pay postpetition
rent obligations under the Unexpired Leases as they become due.

"In making informed decisions in assuming or rejecting each of
the Unexpired Leases, additional time is required to adequately
assess the potential value of each, within the marketplace as
well as within the Debtors' own operations," Jeffrey L.
Tanenbaum, Esq., at Weil, Gotshal & Manges LLP, in New York,
remarks.  The Debtors must decide within the context of a long-
term business plan and in agreement with a workable Chapter 11
plan.

Thus, for the second time, the Debtors ask the Court to extend
the period within which they may assume or reject unexpired
nonresidential real property leases to and including the earlier
of:

    -- June 16, 2003; and
    -- confirmation of a Chapter 11 plan.

In the alternative, the Debtors ask the Court to issue a Bridge
Order to prevent the expiration of the existing lease decision
period pending the disposition of this request.

Mr. Tanenbaum argues that the extension of the Lease Decision
Period is warranted because:

(1) The Debtors have remained current and fully intend to remain
    current with respect to all outstanding postpetition
    obligations under the Unexpired Leases;

(2) The proposed extension does not adversely affect any
    substantive rights of the Debtors' lessors and sublessees,
    if any.  Any lessor may request the Court to set an earlier
    date by which the Debtors must assume or reject that
    lessor's Unexpired Lease;

(3) The Unexpired Leases are valuable assets that are important
    to the Debtors' reorganization.  The company's ability to
    operate their steel production and manufacturing facilities
    without the continued use of the property underlying the
    Unexpired Leases will be adversely impacted; and

(4) A reasoned determination as to all Unexpired Leases cannot
    be made at this critical stage in the Debtors' Chapter 11
    cases. The Debtors' management is in the process of making
    vital decisions regarding restructuring alternatives, while
    continuing to work diligently on a number of matters
    directly related to any future Chapter 11 plan.

Mr. Tanenbaum also points out that the extension of the Debtors'
Lease Decision Period will:

  (i) avert the statutory forfeiture of valuable assets;

(ii) promote their ability to maximize the value of their
      Chapter 11 estates; and

(iii) avoid the incurrence of needless administrative expenses
      by minimizing the likelihood of inadvertent rejections of
      valuable leases or premature assumptions of burdensome
      leases.

Mr. Tanenbaum notes that the Debtors do not intend to wait until
the end of the proposed extension period to make a global
determination as to the assumption or rejection of the Unexpired
Leases.  Rather, the Debtors will continue to evaluate the
Unexpired Leases on an ongoing basis as expeditiously as
practicable and file appropriate motions as soon as informed
decisions can be made.

"Given their importance to the Debtors' continued operations,
the Unexpired Leases may be an integral component of the
Debtors' reorganization," Mr. Tanenbaum adds. (Bethlehem
Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

Bethlehem Steel Corporation's 10.375% bonds due 2003 (BS03USR1),
DebtTraders reports, are trading at 9.5 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BS03USR1for  
real-time bond pricing.


BORDEN CHEMICAL: S&P Places B+ Corp. Rating on Watch Negative
-------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Borden
Chemical Inc., including the double-'B'-plus corporate credit
rating, on CreditWatch with negative implications. The company
has about $569 million in total debt outstanding.

"The CreditWatch placement reflects heightened concerns related
to the company's credit profile, which has deteriorated due to a
sizable debt burden, still challenging conditions in the
chemical sector, and the disclosure that the completion of the
company's new credit facilities has been delayed beyond earlier
expectations," said Standard & Poor's credit analyst Peter
Kelly. The CreditWatch placement highlights the risk of a
downgrade if new credit agreements are not finalized during
September as announced. The new facilities, which will be
secured by Borden assets, are believed to be substantially
committed and in the final stages of negotiation with a group of
banks. Accordingly, Borden Chemical's borrowing capacity is
currently limited to arrangements with its affiliate, Borden
Foods Holdings. The current ratings reflect Standard & Poor's
view that current sources of capital, and cash on the balance
sheet, will be sufficient to meet the near-term requirements of
the business, but these arrangements are limited in terms of the
ongoing transparency necessary to support the current ratings.

Operating margins have reflected a number of persistent
challenges, including higher raw material and energy costs in
2001 and soft demand stemming from the slowdown in the U.S.
economy. These conditions are expected to persist throughout
2002, and may limit opportunities to substantially improve an
already subpar financial profile. As of June 30, 2002, Borden
Chemical's financial profile reflected total debt to EBITDA
above 4 times and EBITDA interest coverage of approximately
2.5x. Accordingly, ratings could be lowered modestly even if
Borden is able to complete its financing plans as anticipated.

The ratings on Borden Chemical will remain on CreditWatch
pending further disclosure related to the outcome of
negotiations with its bankers, and a full review of the terms
and conditions of the bank facilities to ensure that sufficient
liquidity will be maintained throughout the business cycle. If
Borden is unable to satisfactorily complete these negotiations
soon, ratings will likely be lowered. Standard & Poor's will
also review the new bank facilities, which are to be secured by
assets, to evaluate the recovery prospects for existing senior
unsecured bondholders, in a simulated default and liquidation
scenario. A guarantee agreement related to the public
outstanding senior unsecured notes between Borden Foods Holdings
was automatically released when the prior bank facility expired.

Borden, with sales of about $1.4 billion, is a producer of
industrial and specialty chemicals. Borden was acquired by
Kohlberg Kravis Roberts & Co., in 1995. The company is a leading
producer of formaldehyde-based thermosetting resins for the
forest products industry, as well as resins for industrial
applications. End uses include furniture and construction
products, such as structured panels, medium-density fiberboard
and particleboard, and coatings for the foundry industry.


BUDGET GROUP: Taps Fowler White as Counsel in Ryder Litigation
--------------------------------------------------------------
Budget Group Inc., and its debtor-affiliates are involved in an
ongoing lawsuit brought by Ryder Systems Inc., involving the
Debtors' alleged unauthorized use of the Ryder TRS trademark.

Robert L. Aprati, the Debtors' Executive Vice President, General
Counsel and Secretary, informs the Court that Fowler White
Burnett P.A. represents the Debtors in the Ryder Litigation.

By this application, the Debtors seek the Court's authority to
employ Fowler as its special trademark litigation counsel in
connection with these Chapter 11 cases.

The Debtors anticipate that Fowler will provide the legal and
litigation support required by the Debtors in connection with
the numerous issues that are involved with the Ryder Litigation,
including advising and representing the Debtors with respect to
these matters:

A. counseling, providing strategic, advice to, and representing
   the Debtors in connection with the Ryder Litigation,
   including:

   -- providing discovery related support and assistance to the
      Debtors in regards to matters arising in Florida and other
      strategic areas as necessary, including, but not limited
      to defending and taking depositions, pursuing other
      investigations in regards to the Ryder Litigation and
      drafting various documentation in connection with
      discovery requests, and

   -- where appropriate, conducting research and drafting of
      pleadings and documents relating to the ongoing Ryder
      Litigation as required by the Debtors and in coordination
      with Pennie & Edmonds LLP;

B. along with its co-counsel Pennie, assisting in the trial
   preparation and defense of the Ryder Litigation if the case
   proceeds to trial; and

C. rendering any other services as may be in the best interests
   of the Debtors in connection with the forgoing, as agreed
   upon by Fowler and the Debtors.

In the events leading up to the filing of the Ryder Litigation,
Mr. Aprati tells the Court that Debtors were under the
impression that the lawsuit would be filed and litigated in
Florida due to the proximity of the parties and events involved
with the litigation.  But in March 2002, the Ryder Litigation
was filed in the Federal District Court for the Southern
District of New York, and as a result, the services to be
provided by Fowler were modified to allow Fowler to coordinate a
concerted defense in the Ryder Litigation with its co-counsel,
Pennie & Edmonds LLP. Through their representation of the
Debtors, the members of Fowler have become uniquely and
thoroughly familiar with the Debtors and their business affairs.  
The members, counsel and associates of Fowler who will represent
the Debtors in connection with the matters upon which Fowler is
retained have extensive knowledge and expertise in all aspects
of trademark litigation work and the treatment of these issues
in the context of a Chapter 11 bankruptcy.

Mr. Aprati fears that the Debtors' representation in this matter
would likely be jeopardized if the Debtors were forced to seek
other counsel or defend the lawsuit themselves at this stage in
the litigation.  The Debtors believe that Fowler's continued
representation of the Debtors in connection with the Ryder
Litigation is essential to their success in the Chapter 11
process and will provide a substantial benefit to their estates.

The firms, Pennie and Fowler, have advised the Debtors that they
will make every effort to avoid any duplication of work.  Mr.
Aprati explains that Pennie will be responsible for certain
discovery issues, trial preparation and pretrial and local
matters while Fowler will be focusing on discovery and trial
preparation.  If the Ryder Litigation proceeds to trial, both
Pennie and Fowler will serve as co-counsel to the Debtors in the
defense of this lawsuit.

Fowler will charge the Debtors its customary hourly rates for
matters of this type.  Fowler will seek reimbursement of all
costs and expenses incurred in connection with these cases.
Fowler's hourly billing rates currently range from:

       Attorneys                 $200 to $365
       Paraprofessionals         $125 to $150

These hourly rates are subject to periodic increases in the
normal course of Fowler's business.

William R. Clayton, a shareholder of Fowler, informs the Court
that the Firm has received a $48,635.13 retainer in connection
with Fowler's representation of the Debtors relating to this
ongoing trademark litigation.  This will constitute a retainer
for future services to be rendered and future disbursements and
charges to be incurred in connection with the Debtors' Chapter
11 cases.  In addition, within one year prior to the Petition
Date, Fowler has received $185,314.57 on account of legal
services rendered on behalf of the Debtors.

Mr. Clayton assures the Court that Fowler, its members, counsel
and associates:

    -- do not represent or hold any material adverse interest to
       the Debtors or their estates with respect to the matters
       upon which Fowler is to be employed; and

    -- do not have any material connections with the Debtors,
       their officers, affiliates, creditors, or any other
       party-in-interest or their respective attorneys and
       accountants, or the United States Trustee.

However, Fowler currently represents or in the past has
represented these parties in matters unrelated to these cases:

A. Institutional Lenders:  Bank of America N.A., SunTrust Bank,
   General Electric Capital Corp.;

B. Creditors:  Goldman Sachs & Co., Salomon Smith Barney Inc.,
   Computer Science Corp., Prudential Securities Inc., Citibank
   N.A., UBS Paine Webber Inc., and AT&T;

C. Insurers: Great American, Federal Insurance, Liberty Mutual
   and Travelers;

D. Major Vendors:  Nissan Motors Acceptance Corp. and Hyundai;
   and

E. Professionals:  King & Spalding.

Mr. Clayton tells the Court that Fowler will conduct an ongoing
review of its files to ensure that no conflicts or other
disqualifying circumstances exist or arise.  If any new relevant
facts or relationships are discovered, Fowler will supplement
its Application with a disclosure to the Court. (Budget Group
Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service,
Inc., 609/392-0900)    

Budget Group Inc.'s 9.125% bonds due 2006 (BD06USR1),
DebtTraders reports, are trading at 18.5 cents-on-the-dollar.
See http://www.debttraders.com/price.cfm?dt_sec_ticker=BD06USR1
for real-time bond pricing.


CALYPTE BIOMEDICAL: Diedre M. McCoy Discloses 5.1% Equity Stake
---------------------------------------------------------------
Diedre M. McCoy beneficially owns 4,404,490 shares of the common
stock of Calypte Biomedical Corporation, with sole voting and
dispositive powers. The shares were purchased for cash
($150,000), and represents 5.1% of the outstanding common stock
of the Company.  

Ms. McCoy is an Investment Manager and President of Domino
International, Ltd., Charlotte House, Charlotte Street, Nassau,
Bahamas.
  
Calypte Biomedical's urine-based HIV-1 test is touted as having
several benefits over blood tests, and has received FDA approval
for use in professional laboratories. The test is also available
in China, Indonesia, Malaysia, and South Africa. The company
would like to extend its HIV test by making it faster and
adapting it for over-the-counter sale. The firm is working on
urine- and blood-based tests for other diseases and participates
in a national HIV testing service known as Sentinel. Calypte
Biomedical also owns about 30% of Pepgen, which is developing an
interferon-based drug to treat multiple sclerosis.

As previously reported, Calypte's June 30, 2002 balance sheet
shows a total shareholders' equity deficit of about $7.5
million.


CASUAL MALE: Keeps Exclusive Right to File Plan Until Dec. 26
-------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the Southern District
of New York, Casual Male Corp., and its debtor-affiliates
obtained a further extension of their exclusive periods.  The
Court gives the Debtors, until December 26, 2002, the exclusive
right to file their liquidating chapter 11 plan and until
February 14, 2003, to solicit acceptances of that Plan from
their creditors.

Casual Male Corp., with its debtor-affiliates filed for chapter
11 protection on May 18, 2001. Adam C. Rogoff, Esq., at
Cadwalader, Wickersham & Taft represents the Debtors as they
wind-down their assets. When the Company filed for protection
from its creditors, it listed $299,341,332 in total assets and
$244,127,198 in total debts.  The Debtors anticipate that the
Estates may have in excess of $70 million to be distributed to
creditors under a chapter 11 plan.


CENTRAL EUROPEAN MEDIA: Deloitte Takes Over Andersen's Work
-----------------------------------------------------------
The Audit Committee of the Board of Directors of Central
European Media Enterprises Ltd., annually considers and
recommends to the Board the selection of its independent public
accountants. As recommended by the Company's Audit Committee,
the Board of Directors has decided to no longer engage Arthur
Andersen as the Company's independent public accountants and
engaged Deloitte & Touche to serve as the Company's independent
public accountants for 2002. The date of resignation of Andersen
was July 31, 2002, and of appointment of Deloitte & Touche was
August 1, 2002.

Andersen's reports on the Company's consolidated financial
statements for the year 2001 was modified on a going concern
basis since in its cash flow projections the Company was relying
on cash flows that were outside the Company management's direct
control.

Central European Media Enterprises Ltd., is a TV broadcasting
company with leading stations located in Romania, Slovenia,
Slovakia and Ukraine. CME is traded on the Over the Counter
Bulletin Board under the ticker symbol "CETVF.OB".


CHESAPEAKE ENERGY: Completes 3 Mid-Continent Gas Acquisitions
-------------------------------------------------------------
Chesapeake Energy Corporation (NYSE: CHK) has completed three of
its previously announced Mid-Continent gas acquisitions and will
close the fourth this week.  In addition, the company has
recently entered into significant new hedging positions for its
projected 2003 production volumes.  Chesapeake has now hedged
56% of its projected first quarter 2003 natural gas volumes of
41.5 bcf at an average NYMEX price of $4.00 per mmbtu and 100%
of its projected full-year 2003 oil volumes of 3.4 million
barrels at an average NYMEX price of $27.50 per barrel.  
Chesapeake's 2003 hedging program will also benefit from locked
in profits of $9 million ($0.05 per mcfe) from closed out hedges
originally entered into in 2001 for 2003 gas volumes.

The company remains well hedged for the second half of 2002 with
hedges in place covering 60% of projected gas volumes at an
average NYMEX price of $4.40 per mmbtu and hedges in place
covering 53% of projected oil volumes at a NYMEX price of $25.40
per barrel.  Chesapeake's new gas hedges are straight swaps
while its existing gas hedges are primarily cap-swaps and
collars. Chesapeake's new oil hedges are swaps that pay a
premium in exchange for the counterparty's right to cancel the
swap arrangement for any day in which NYMEX oil prices close at
less than $21.00 per barrel.  Chesapeake's 2002 oil hedges are
straight swaps.  Chesapeake's counter-parties are investment-
grade rated financial institutions.

The company strongly believes that decreasing natural gas
production and flat to slightly increasing demand will continue
to drive natural gas prices higher in 2003.  Weather during the
winter of 2002-03 will likely determine how quickly gas prices
escalate.  Chesapeake plans to hedge additional volumes of 2003
natural gas as opportunities present themselves.

Chesapeake's newest acquisitions were first announced in late
July and increase the company's estimated proved reserves and
daily production by 125 bcfe and 28 mmcfe.  The assets are
located exclusively in the Mid-Continent, are 96% gas and have
an estimated reserve life of 12.1 years.  The cost of the four
transactions was $168 million and this was financed in early
August by issuing 9.0% senior notes due in 2012.

Chesapeake believes that its unique regional and product focus
(only on gas and only in the Mid-Continent) is the key to
achieving its goal of leading the industry in profitability per
unit of production and, as a result, delivering superior returns
to its investors.  To that end, Chesapeake concentrates on
integrating an active drilling program (currently #3 in the
U.S.), an active acquisition program (over $1 billion in last
two years) and an opportunistic hedging strategy (more than $200
million of increased revenues realized to date and anticipated
through year-end 2002) into a distinctive corporate strategy.

In addition to acquiring publicly-traded Canaan Energy
Corporation and its 100 bcfe of proved reserves for a total cost
of approximately $125 million earlier this summer, Chesapeake's
latest transactions include the following:

    --  The Williams Companies -- Williams acquired an
attractive set of western Oklahoma gas assets through its
acquisition of Barrett Resources Corporation in 2001.  
Chesapeake previously acquired Barrett's eastern Oklahoma assets
in January 2000 and has now consolidated all previously owned
Barrett Oklahoma assets under Chesapeake's ownership.

    --  Focus Energy Corporation -- Chesapeake acquired this
Houston-based privately-held Mid-Continent gas producer after
several years of discussion with the management of Focus.  
Canaan and Focus owned very similar western Oklahoma assets and
integration of these properties will yield unusually large
efficiencies.

    --  EnCana Corporation -- Prior to its merger with
PanCanadian to form EnCana, Alberta Energy had acquired
miscellaneous western Oklahoma assets through an earlier
transaction.  Chesapeake acquired the EnCana assets when EnCana
decided to exit the Mid-Continent.

    --  Enogex Corporation -- Enogex is the unregulated
subsidiary of Oklahoma City-based OG&E Corporation, Oklahoma's
largest electric utility. Chesapeake purchased Enogex's Mid-
Continent assets as part of OG&E's divestment of its E&P assets.

Chesapeake acquired each of these property groups from sellers
making strategic exits from either the exploration and
production business or from the Mid-Continent.  These "tuck-in"
or "niche" acquisitions are easily integrated into Chesapeake's
existing Mid-Continent asset base and provide substantial
opportunities to increase revenues, reduce costs and accelerate
drilling activities.  The company anticipates making similar
acquisitions in the years ahead.

Chesapeake Energy Corporation is one of the 10 largest
independent natural gas producers in the U.S.  Headquartered in
Oklahoma City, the company's operations are focused on
exploratory and developmental drilling and producing property
acquisitions in the Mid-Continent region of the United States.  
The company's Internet address is http://www.chkenergy.com

As reported in Troubled Company Reporter's August 9, 2002
edition, Moody's assigned a B1 rating to Chesapeake Energy's
$250 million senior notes, while Fitch gave it a BB- rating.

Chesapeake Energy Corp.'s 8.50% bonds due 2012 (CHK12USR1) are
trading at 99 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CHK12USR1for  
real-time bond pricing.


CLAXSON INTERACTIVE: Amends Pending Exchange Offer for 11% Notes
----------------------------------------------------------------
Claxson Interactive Group Inc., (Nasdaq: XSON) announced the
extension and the amendment of its pending exchange offer and
consent solicitation for all U.S.$80 million outstanding
principal amount of the 11% Senior Notes due 2005 (144A Global
CUSIP No. 44545HHA0 and Reg S Global ISIN No. USP52800AA04) of
its subsidiary, Imagen Satelital S.A.

Claxson is now offering U.S.$500 in principal amount of its
Senior Notes due 2010 in exchange for each U.S.$1,000 principal
amount of Old Notes.  The Company has also increased the
interest rate on the proposed New Notes 100 basis points from
7.25% to 8.25%.  In addition, Claxson has increased the consent
payment to U.S.$15 per U.S.$1,000 principal amount of Old Notes
payable to all holders who tender their Old Notes on or prior to
the new expiration date.  The Company has also now provided that
Imagen will unconditionally and irrevocably guarantee on a
senior basis all the interest and principal payments on the New
Notes.  Any holder who has previously tendered their Old Notes
will automatically be eligible to receive all of the new and
improved terms.

The Supplement dated September 3, 2002 contains a full
description of the amendments to the Exchange Offer in
connection with this extension.  In addition, the Company will
need the approval of the public offering of the New Notes by the
Argentine Comision de Valores prior to expiration.

The expiration date for the Exchange Offer has been extended
from 5:00 p.m. New York City time on August 30, 2002 to 5:00
p.m. New York City time on September 16, 2002, unless further
extended.  As of 5:00 p.m. New York City time on August 30, 2002
Claxson received tenders from holders of approximately U.S. $8.1
million in aggregate principal amount of the Old Notes.

The new notes will not be registered under the U.S. Securities
Act of 1933, as amended, and will only be offered in the United
States to qualified institutional buyers and accredited
investors in private transactions and to persons outside the
Unites States in off-shore transactions.  The new notes will be
listed on the Buenos Aires Stock Exchange.

Claxson (Nasdaq: XSON) is a multimedia company providing branded
entertainment content targeted to Spanish and Portuguese
speakers around the world.  Claxson has a portfolio of popular
entertainment brands that are distributed over multiple
platforms through Claxson's assets in pay television, broadcast
television, radio and the Internet.  Claxson was formed in a
merger transaction, which combined media assets contributed by
El Sitio, Inc., and other media assets contributed by funds
affiliated with Hicks, Muse, Tate & Furst Inc. and members of
the Cisneros Group of Companies. Headquartered in Buenos Aires,
Argentina, and Miami Beach, Florida, Claxson has a presence in
all key Ibero-American countries, including without limitation,
Argentina, Chile, Brazil, Spain, Portugal and the United States.
    
                         *    *    *

As reported in Troubled Company Reporter's August 20, 2002
edition, the independent auditors report with respect to
Claxson's financial statements included in Claxson's Form 20-F
filed with the Securities and Exchange Commission included a
"going concern" explanatory paragraph, indicating that its
potential inability to meet its obligations as they become due,
raises substantial doubt as to Claxson's ability to continue as
a going concern. In an effort to improve its financial position,
Claxson is taking certain steps, including the restructuring of
its subsidiaries' debt and renegotiation of applicable
covenants. Its failure or inability to successfully carry out
these plans could ultimately have a material adverse effect on
its financial position and its ability to meet its obligations
when due.

                  Update on Debt Renegotiation

On April 30, 2002, Imagen Satelital S.A., an Argentina-based
Claxson subsidiary, announced that it would not make an interest
payment of US $4.4 million on its 11% Senior Notes due 2005. On
June 27, 2002, Claxson announced that it had commenced an
exchange offer and consent solicitation for all US$80 million
outstanding principal amount of these notes. Further, on August
1, 2002 Claxson announced the extension of the pending exchange
offer and consent solicitation. The expiration date for the
exchange offer was extended from July 31, 2002, to August 14,
2002.. Simultaneously with this release, the Company has
announced the further extension of the offer until August 28,
2002.

Claxson is currently not in compliance with the coverage ratios
required under its Chilean syndicated credit facility, primarily
as a result of the 17% decrease in the value of the Chilean Peso
against the U.S. Dollar in 2001. Failure to comply with the
financial covenants set forth in the Chilean syndicated credit
facility could result in the acceleration of all amounts due and
payable thereunder. Claxson has been actively negotiating with
the lenders to amend the credit facility to modify this
financial covenant in order to bring it into compliance. Until
negotiations are final, this debt will be classified as short
term in the balance sheet.


CLICK COMMERCE: Board Approves One-For-Five Reverse Stock Split
---------------------------------------------------------------
Click Commerce, Inc., (Nasdaq: CKCM), the most widely deployed
provider of partner portal software, announced that its Board of
Directors has authorized a reverse stock split at a ratio of
one-for-five (1:5), and has set September 4, 2002 as the
effective date for the reverse stock split.  Click Commerce is
taking this action in order to satisfy the Nasdaq minimum bid
price requirement. Click Commerce's stockholders, by an
overwhelming majority, approved the reverse stock split at a
special meeting of stockholders held August 30, 2002.

"We have been executing well on our business strategy to focus
on achieving profitability while keeping our customers happy,
maintaining our product leadership and winning new customers,"
said Michael W. Ferro, Jr., Chairman and Chief Executive Officer
of Click Commerce. "We believe we can continue this momentum and
although it is not possible to predict future market conditions,
we believe that implementing a reverse stock split will result
in a trading price above the $1.00 per share minimum bid price
requirement necessary for Click Commerce to meet the
requirements for continued listing of its common stock on The
Nasdaq National Market."

Click Commerce believes that the reverse stock split will result
in a trading price above the $1.00 per share minimum bid price
requirement. However since this requirement will not have been
satisfied for 10 consecutive trading days by September 5, 2002,
Click Commerce expects to receive a Nasdaq Staff Determination
letter at the close of business on September 5, 2002, indicating
that Click Commerce's common stock has not complied with the
$1.00 minimum bid price requirement for continued listing on The
Nasdaq National Market set forth in Nasdaq Marketplace Rule
4450(a)(5), and that Click Commerce's common stock will
therefore be subject to delisting from The Nasdaq National
Market.

Click Commerce intends to request a hearing before a Nasdaq
Listing Qualifications Panel to review the Staff Determination
once it receives this letter. Click Commerce has been advised
that Nasdaq will not take any action to delist Click Commerce's
common stock pending the conclusion of that hearing and that if
the Click Commerce common stock continues to trade above the
$1.00 minimum bid price requirement for 10 consecutive trading
days and Click Commerce continues to satisfy all other minimum
listing conditions, such hearing may not be required.

Shares of Click Commerce common stock will trade under the
symbol "CKCMD" for 20 days after the reverse split goes into
effect.

Click Commerce (Nasdaq: CKCM) provides configurable portal
solutions that enable global corporations to gain competitive
advantage through improved relationships and operational
efficiencies within their distribution channels through online
commerce, channel management and partner relationship
management. Corporations such as Black & Decker, Delphi,
Emerson, Equistar, Kawasaki, Lubrizol, Mitsubishi, Motorola and
Volvo have transformed their channel relationships using the
Click Commerce Partner Portal and Click Commerce Applications.

Founded in 1996, Click Commerce leverages more than five years
of channel management expertise to enable global enterprises to
significantly increase brand loyalty, customer satisfaction and
financial performance. The company's software is used by
corporations in more than 70 countries and in 15 languages.  
Visit Click Commerce at http://www.clickcommerce.com  


CMS ENERGY: Sells Power Plant in Thailand to Advanced Power
-----------------------------------------------------------
CMS Energy Corporation's (NYSE: CMS) independent power unit, CMS
Generation Co., has closed the sale of its 66 percent ownership
interest in a power plant in Thailand.  CMS sold its ownership
in the National Power Supply Units 7 and 8 plant to its partner,
Thailand's Advanced Power Supply Public Company Ltd., a
subsidiary of the Soon Hua Seng Group. The NPS plant was CMS
Energy's sole investment in Thailand.

"We continue to achieve progress toward our goal of $2.9 billion
of asset optimization proceeds," said Ken Whipple, CMS Energy
chairman and chief executive officer.  Proceeds from the sale
will be used to improve CMS Energy's balance sheet and reduce
debt.

The 300-megawatt coal- and biomass-fueled power plant began
commercial operation in 1999, and is located 140 kilometers east
of Bangkok in Thailand's Prachinburi Province.  Advanced Power
Supply now owns substantially all of the plant.

CMS Energy Corporation is an integrated energy company, which
has as its primary business operations an electric and natural
gas utility, natural gas pipeline systems, independent power
generation, and energy marketing, services and trading.

For more information on CMS Energy, please visit its Web site at
http://www.cmsenergy.com

                           *   *   *

As reported in Troubled Company Reporter's July 17, 2002,
edition, Fitch downgraded the ratings of CMS Energy and its
subsidiaries Consumers Energy Co., and CMS Panhandle Eastern
Pipe Line Co.  The senior unsecured debt rating of CMS has been
lowered to 'BB-' from 'BB+'.  The downgrades of Consumers and
PEPL reflect Fitch's notching criteria with respect to parent
and subsidiary ratings.

CMS, Consumers and PEPL will remain on Rating Watch Negative,
where they were originally placed on June 11, 2002 due to
concerns surrounding CMS' weak liquidity position, high parent
debt levels, and limited financial flexibility. CMS' market
access continues to be constrained by the company's need to
restate its 2000 and 2001 financial statements to eliminate the
effects of 'wash trades' with other energy companies. While
Consumers and PEPL are fundamentally sound, the companies'
financial condition and credit ratings may be adversely affected
by the financial stress of their parent. The Negative Rating
Watch will remain in place pending a meeting with CMS management
within the next several weeks to review the company's updated
business plan.

     Ratings lowered and maintained on Rating Watch Negative

                       CMS Energy

       --Senior unsecured debt to 'BB-' from 'BB+';

--Preferred stock/trust preferred securities to 'B-' from 'BB-'.

                    Consumers Energy

      --Senior secured debt to 'BBB' from 'BBB+';

      --Senior unsecured debt to 'BB+' from 'BBB';

--Preferred stock/trust preferred securities to 'BB-' from
                         'BB+'.

              Consumers Power Financing Trust I

      --Trust preferred securities to 'BB-' from 'BB+'.

                         PEPL

         --Senior unsecured debt to 'BB+' from 'BBB'.


COMDIAL CORP: Bridge Financing Reaches $3.5 Million at August 15
----------------------------------------------------------------
As previously reported Comdial Corporation conducted closings on
its private placement of 7% senior subordinated secured
convertible promissory notes in the aggregate principal amount
of $3,000,000.00 pursuant to Subscription Agreements which
provide for up to $4 million of bridge financing to the Company.

On August 15, 2002, the Company closed on an additional $475,000
of Bridge Notes. This sale brings the total raised to date from
the Bridge Financing to $3,475,000.00. Proceeds from this sale
will be used for working capital and product development and
delivery.

The holders of the Bridge Notes are eligible to convert 13.33%
of the principal amount of the Bridge Note into shares of common
stock at a conversion price of $0.01 per share.

Pursuant to the terms of the previous advisory agreement between
the Company and Commonwealth Associates, LP, and as a result of
the most recent closing of the Bridge Notes, the Company issued
additional warrants to Commonwealth to acquire 242,017 shares of
common stock at an exercise price of $0.01 per share.

                              *    *    *

                          Debt Restructuring

On June 21, 2002, ComVest entered into an agreement with
Comdial's senior bank lender to purchase the bank's
approximately $12.7 million senior secured debt position,
outstanding letters of credit of $1.5 million, and 1,000,000
shares of Series B Alternate Rate Convertible Preferred Stock
(having an aggregate liquidation preference of $10.2 million)
for a total of approximately $8.0 million. Although there can be
no assurances, it is expected that this buy-out by ComVest,
which is subject to closing conditions, will be completed during
2002.  In connection with its debt restructuring, Comdial will
seek additional longer term financing which it expects will be
in the form of a new senior bank loan and other debt or equity
funding to be raised during 2002.  It is anticipated that the
Bridge Financing will be replaced by or convert into this
subsequent longer term financing.  There can be no assurance
that the Company will be successful in obtaining additional
financing or that the terms on which any such funding may be
available will be favorable to the Company.

                           Nasdaq Delisting

As a result of its immediate convertibility into shares of
common stock, the issuance of the Bridge Notes required
shareholder approval under the corporate governance requirements
of Nasdaq's Marketplace Rules. The failure to obtain shareholder
approval prior to the issuance of the Bridge Notes has resulted
in the Company's shares being delisted from the Nasdaq SmallCap
Market(R).  The Company anticipates that its common stock will
be quoted on the NASD's OTC-BB.  Nasdaq determined that the
Company was not eligible for immediate listing on the OTC-BB
because part of the delisting order related to public interest
concerns regarding the substantial dilution.  Accordingly, the
Company's stock currently trades on the Pink Sheets Electronic
Quotation Service.  The application to be quoted on the OTC-BB
must be filed by one or more broker-dealers and the Company must
meet certain requirements, including that its filings under the
Exchange Act must be current.  There can be no assurance that
the Company's stock will be quoted on the NASD's OTC-BB in the
future, in which case the Company's stock will continue to trade
through the pink-sheets.

Comdial Corporation, headquartered in Sarasota, Florida,
develops and markets sophisticated communications solutions for
small to mid-sized offices, government, and other organizations.
Comdial offers a broad range of solutions to enhance the
productivity of businesses, including voice switching systems,
voice over IP (VoIP), voice processing and computer telephony
integration solutions. For more information about Comdial and
its communications solutions, please visit its Web site at
http://www.comdial.com  


COMDIAL CORP: Settles Patent Infringement Suit with Rates Tech.
---------------------------------------------------------------
On August 23, 2002, Comdial Corporation reached a settlement of
a lawsuit that was filed against the Company on August 12, 2002
by Rates Technology Inc., in the federal district court for the
Eastern District of New York. The suit had alleged patent
infringement and breach of contract and had claimed damages of
at least $4.5 million in the patent claim (plus treble damages)
and at least $1 million in the breach of contract claim. The
settlement included payment of an undisclosed amount by the
Company and general releases in favor of both parties.

Comdial Corporation, headquartered in Sarasota, Florida,
develops and markets sophisticated communications solutions for
small to mid-sized offices, government, and other organizations.
Comdial offers a broad range of solutions to enhance the
productivity of businesses, including voice switching systems,
voice over IP (VoIP), voice processing and computer telephony
integration solutions. For more information about Comdial and
its communications solutions, please visit its Web site at
http://www.comdial.com  


COMDISCO INC: Court Approves Proposed Estimated Claims Reserve
--------------------------------------------------------------
Former President and Chief Investment Officer of the Venture
Lease Division of Comdisco Inc., Manuel A. Henriquez and the
Debtors mutually agreed to Mr. Henriquez's departure on March
31, 2000, and entered into a Separation Agreement, General
Release and Covenant Not to Sue.

According to Douglas J. Lipke, Esq., at Vedder, Price, Kaufman &
Kammholz, in Chicago, Illinois, Mr. Henriquez's compensation was
provided for in mechanisms typical within the venture capital
community, which allowed him to participate in the success of
the investments that he and others made for Comdisco.  During
his employment, Mr. Henriquez was a participant in a certain
Incentive Compensation Plan dated October 1, 1996, which
entitled him to a bonus payout based on the percentage increase
in profits.  On December 30, 1999, both Mr. Henriquez and the
Debtors agreed to modify the 1996 Plan and entered into an
Incentive Plan Termination Agreement.

Mr. Lipke informs the Court that Mr. Henriquez received five
payments under the 1996 Plan prior to May 15, 2001 on:

    (a) May 15, 1999,
    (b) November 15, 1999,
    (c) February 15, 2000,
    (d) May 15, 2000, and
    (e) November 15, 2000.

Payments required under the 1996 Incentive Plan Agreements,
including those due on May 15, 2001, have not been made and have
accrued.  Accordingly, Mr. Henriquez filed a breach of contact
action against the Debtors, prior to the Petition Date, seeking
an accounting of the complicated commissions.

The Debtors and Mr. Henriquez also entered into another
Incentive Compensation Plan dated January 1, 2000.  Likewise,
the Debtors failed to pay Mr. Henriquez's benefits under the
Plan.

Since the Petition Date, Mr. Lipke asked the Debtors' counsel
for financial information, which Mr. Henriquez requires in order
to accurately calculate his claim.  But the Debtors have only
provided a minimal portion of the requested information.

Based upon limited information available, Mr. Henriquez
estimates that his claim under both 1996 and 2000 Incentive
Plans and Separation Agreement reach $78,980,000:

    Payment due May 2001 from 1996 Fund            $14,440,000

    36.11% of remaining assets in Fund 1996         35,400,000

     6.96% of remaining assets in Fund 2000         12,070,000

    24.5% interest in Rosemont Venture
          Management I, LLC representing Interests
          in Hybrid Venture Partners LP              7,270,000

    24.5% interest in Rosemont Venture Management
          I, LLC required Management fees            9,800,000
                                                   ------------
                 TOTAL ESTIMATED CLAIM             $78,980,000

A comparison of Mr. Henriquez's Proofs of Claim as opposed to
the Debtors' proposed Estimated Claims to establish a Disputed
Claims Reserve shows:

Name of Debtor             Henriquez's Claim   Debtors' Estimate
--------------             -----------------   -----------------
Hybrid Venture Partners LP     $7,270,000                  $0
Comdisco, Inc.                 78,980,000           3,000,000
Rosemont Venture
   Management I, LLC            9,800,000                   0

Thus, Mr. Henriquez asks the Court to deny the Debtors' Motion,
or, in the alternative, grant the Motion using the amounts
provided in his Proofs of Claim for $78,980,000.  Otherwise, Mr.
Lipke says, the Disputed Claim will be grossly underestimated.

(2) Glen C. Howard

When Glen C. Howard left Comdisco, he signed a Separation
Agreement and General Release dated June 5, 2001.  On November
21, 2001, Mr. Howard filed three Proofs of Claim against:

    (a) Comdisco, Inc., representing his participation in two
        Incentive Compensation Programs known as the 1996 Plan &
        the 2000 Plan -- Claim No. 1991;

    (b) Rosemont Venture Management I, LLC -- Claim No. 1989;
        and

    (c) Hybrid Venture Partners, LP -- Claim No. 1990.

Douglas J. Lipke, Esq., at Vedder, Price, Kaufman & Kammholz, in
Chicago, Illinois, argues that the Debtors grossly
underestimated the value of Mr. Howard's claims with a total
difference of $60,850,000.  A comparison of Mr. Howard's Proofs
of Claim as opposed to the Debtors' proposed Estimated Claims to
establish a Disputed Claims Reserve shows:

Name of Debtor               Howard's Claim   Debtors' Estimate
--------------               --------------   -----------------
Hybrid Venture Partners LP     $1,780,000                  $0

Comdisco, Inc.                 59,670,000           3,000,000

Rosemont Venture
   Management I, LLC            2,400,000                   0

Despite repeated requests for various financial information to
accurately calculate Mr. Howard's Claim, Mr. Lipke says, the
Debtors produced only minimal and inconsequential documents.

The Debtors' counsel advised Mr. Lipke that the documents would
be forthcoming.  However, none was received.  This prompted Mr.
Howard's filing of an Objection to the Debtors' proposed
Disclosure Statement asserting that it did not contain
sufficient information to evaluate the Debtors' claims and
assets.  The Debtors' counsel asked Mr. Lipke to withdraw the
Objection based on the Debtors' commitment to provide the
requested documents and information relating to the claim on or
before June 14, 2002. But Mr. Lipke received only 10% of the
information requested on July 9, 2002 after a series of meetings
and consultations with the Debtors.

Thus, Mr. Howard asks the Court to deny the Debtors' motion or,
in the alternative, grant the motion using the amounts provided
in his Proofs of Claim.

(3) Avant! Corporation, LLC

James A. Tiemstra, at Miller, Starr & Regalia, in Walnut Creek,
California, informs the Court that Avant! Corporation, as
tenant, and Renco Investment Company, as landlord, entered into
a lease dated February 24, 1997 for the premises located in
Fremont, California.

On September 14, 2000 Avant!, as assignor, and the Debtors, as
assignee, entered into an Assignment of Lease.  Pursuant to the
Assignment, the Debtors agreed to assume all provisions of the
lease and indemnify Avant! from all liability, cost and expense
that would arise under the Lease.

Shortly after taking possession of the Premises, the Debtors
hired Devcon Construction, Inc. to make certain tenant
improvements and to build out the premises.  As part of the
buildout, Devcon installed certain computer and
telecommunications equipment, cooling systems and other
equipment at the Premises.  But the Debtors failed to pay for
these improvements.  As a result, Devcon and one of its
subcontractors, Partition Specialists Inc. recorded mechanic's
liens against the Premises for $4,307,604 and $30,385.

To remove these liens, Avant! paid to Devcon $4,221,452 on
behalf of the Debtors.  This sum, plus prepetition interest,
gives rise to Avant!'s liquidated claim.

On February 7, 2002, Renco filed an action in the Alameda
Superior Court against Avant! for alleged damages under the
Lease.  Renco asserts a claim for $37,181,010 in unpaid rent and
other obligations under the Lease.  Renco further claims
$5,852,981 in damages as a result of Avant! and the Debtors'
failure to remove certain alterations from the Premises and to
build out the Premises as required under the Lease.  In
addition, Renco asserts damages in $30,285 for the mechanic's
lien placed on the Premises by Partition Specialists.  
Furthermore, Renco also claims its attorney's fees, costs, and
interest.

On November 30, 2001, Avant! filed its Proof of Claim for the
amounts it paid to remove Devcon's mechanic's lien and Renco's
claims under the Lease.  The Claim consists of two liquidated
portions in the principal amount of:

    (a) $4,307,604 to remove Devcon's mechanic's lien, and

    (b) $41,895 for certain computer software products and
        related charges.

The Debtors contend that the estimated maximum amount of its
exposure to Avant! is zero.

Accordingly, Avant! opposes the Debtors' Motion for Allowance of
Estimated Claims Reserve citing these reasons:

  (a) the Debtors' scheme of setting a capped reserve for
      payment of all disputed claims but setting no cap for non-
      disputed claims violates Section 1123(a)(4) of the
      Bankruptcy Code, which requires the same treatment for all
      claims within a class;

  (b) the Debtors have presented no credible support for its
      estimate of the Maximum Liability for Disputed Claims;
      and

  (c) the Debtors' estimate of Avant!'s Claim is clearly
      insufficient and raises serious doubts regarding the
      Debtors' estimate of other unliquidated claims.

For purposes of establishing a reserve, Mr. Tiemstra asserts
that Avant!'s claims should be estimated in the full amount of
the Debtors' potential liability plus all out-of-pocket amounts:

    Indemnification for payment of
       mechanics lien (liquidated)                 $4,307,604

    Computer Software Products & related
       maintenance (plus interest)                     48,000

    Indemnification for rent and other lease
       obligations                                 43,064,276

    Indemnification for Attorney's Fees & Costs       400,000
                                                   ----------
                TOTAL                             $47,819,880

(4) Renco Investment Company

Renco Investment Company, a lessor under a certain Industrial
Space Lease with the Debtors for certain real property located
in Fremont, California, filed a Proof of Claim on November 13,
2001.

Douglas J. Lipke, Esq., at Vedder, Price, Kaufman & Kammholz, in
Chicago Illinois, argues that the Debtors provided no
information in their Motion to Estimated Unliquidated Claims
other than the statement that they have reviewed each of the
Claims and have estimated a range of potential liability for
each.

The total difference between Renco's Proof of Claim and that of
the Debtors estimated value is $9,768,022.  The Debtors'
proposed estimated claim to establish a Disputed Claims Reserve
is only $6,000,000 as compared to Renco's Claim of $15,768,022.

Thus, Renco asks the Court to deny the Debtors' Motion, or, in
alternative, grant the Motion using the amounts provided in its
Proof of Claim.

                        *     *     *

After due deliberation, Judge Barliant grants the Debtors'
Motion to estimate the amount of certain contingent or
unliquidated disputed claims, and other disputed claims for
purposes of establishing the Comdisco and Prism Disputed Claim
Reserve under the Chapter 11 Plan.

The Debtors retain their rights to object to the allowance or
classification of the Claims on any factual or legal grounds
which includes:

    (a) the disallowance of Unliquidated Claims and/or Other
        Disputed Claims,

    (b) the reduction of Unliquidated Claims and/or Other
        Disputed Claims to amounts less than the Estimated
        Amounts, and

    (c) the reclassification of the Unliquidated Claims and/or
        Other Disputed Claims to other Plan Classes.

With respect to the claims of Manuel Henriquez and Glen C.
Howard, the Court estimates the claims at an aggregate amount of
$90,000,000; provided, however that in the event either claims
are settled individually, the remaining claim estimated for the
non-settling party will not exceed $90,000,000 less the
settlement amount.

With respect to the claims of Renco Investment Company and
Avant! Corporation LLC, Judge Barliant estimates the claims by
establishing two estimation amounts for the claims:

(a) $6,200,000 will be reserved on account of the rent and
    restoration damages for the claims -- representing
    $11,430,132 for rent and restoration less security deposits
    held by Renco in the amount of $5,273,572 -- and Renco shall
    be entitled to payment, if any, on account of its claim out
    of the funds prior to Avant!, provided that in the event
    that Avant pays Renco the amounts in consideration of the
    claims, Avant! will be entitled to pursue the funds in this
    reserve up to the remainder of the estimated amount; and

(b) $4,307,604 will be reserved on account of the mechanic's
    lien portion of the claims and Avant! will be entitled to
    payment, if any, on account of its claim out of the funds
    prior to Renco, provided that in the event that Renco pays
    Avant! amounts or the amounts are offset from the claim
    Renco has against Avant! in consideration of the claim,
    Renco will be entitled to pursue the funds in this reserve
    up to the remainder of the estimated amount.

Secured Claims Against Comdisco will be paid pursuant to the
confirmed Plan.  The source of payment of any Secured Class C-1
Claim arising from a discounted lease receivable transaction
will not be limited to the Disputed Claims Reserve, but will be
paid from the accounts and other sources.

There are 173 Comdisco Unliquidated Claims with a total
estimated amount of $317,037,617.  Among the largest Comdisco
Unliquidated Claims are:

Creditor                            Claim No.   Estimated Amount
--------                           ---------   -----------------
AG Capital Funding Partners LP         2407          $1,704,408
Anchor Centre Properties Inc            177           1,003,788
Avant! Corp.                           2454           4,307,604
Bank One, NA, FKA First National       1723         135,140,780
Brandywine Operating Partnership LP    2259           1,530,496
Brandywine Operating Partnership LP    2913           1,179,338
Citibank NA, London Branch             1641           2,239,316
Development Specialists, Inc.            22           7,500,000
Devon Energy Corporation               2132           1,231,439
Fleet Business Credit                  2123           3,800,000
Flohr, Thomas                          2129           1,750,000
Florida First Bank                      788           1,032,722
Foundry Portfolio Associates LLC       2189           1,287,646
Henriquez, Manuel                      2273          45,000,000
Howard, Glen C.                        1991          45,000,000
Internal Revenue Service               2907          10,000,000
Modis Professional Services            1242           1,152,817
Renco Investment Company               1335           6,186,945
Silver Oak Capital LLC                 2406          20,960,592
Vantagepoint Venture Partners III      1866           1,950,000
Vantagepoint Venture Partners IV LP    1867           8,400,000
Verizon Comm Inc Operating Tel Subs    2447           3,000,000

There are 50 Prism Unliquidated Claims with an estimated amount
of $39,062,373.  Some of the largest Claims are:

Creditor                            Claim No.   Estimated Amount
--------                            ---------   ----------------
Anchor Centre Properties Inc            176            $273,243
Bank of Bermuda Client Asset           2085             656,000
Duke Weeks Realty LP NKA                327             181,457
Modis Professional Services            1243             572,164
Twist, Basil R. Jr.                    1929             102,876
Verizon Comm Inc.                   1002447          37,000,000
W9/LWS II Real Estate, LP              1093             168,415

There are 444 Comdisco Disputed Claims amounting to
$587,786,820, but the Total Estimated Amount is only
$94,455,166.  Some of the largest Comdisco Disputed Claims
estimated for the Reserve are:

Creditor                        Claim No.  Original   Estimated
--------                        --------   --------   ---------
Ansbacher, Charles                 1955  $1,012,561   $1,012,561
Central States SE & SW Pension     2790   1,428,800    1,428,800
Citicorp Investment Bank           1639   1,711,661    1,711,661
Collins, Bryant                    1510   2,252,000    1,700,000
Downey Savings & Loan Assn FA       242  21,975,000   21,975,000
Duncan, James D.                   2828   1,784,538       18,000
EMC Corporation                    1733   1,247,441      800,000
Equity Office Properties, LLC      1285   1,175,885      822,724
GST Telecommunications Inc.        2281   1,400,000    1,400,000
Inrance/Computerm                  1638   1,261,502      582,293
Internap Network Services, Inc.    1469   1,317,837    1,317,837
JP Morgan Chase                    1980   9,675,000    9,675,000
JP Morgan Chase                    1981   2,055,000    2,055,000
Labe, James P.                     1725  43,758,000    2,500,000
MDC Mortgage Finance, Inc.         1927   3,466,000    3,466,000
Merrill Lynch Pierce Fenner Smith  1669   9,918,238    9,918,238
Metromedia Fiber Network Svcs      2403   1,874,497        6,727
National Westminster Bank PLC      1463   1,354,500    1,354,500
New Century Enterprises, Inc       2455 263,073,144      920,145
Riverway                           2881   1,239,541    1,239,541
SBC Communications                 1090   1,107,304      900,000
Tickner, Geoff                      151   2,686,685    2,686,685
US Bancorp Equipment Fin Inc FKA   2314   1,772,090    1,772,090
Woolwich, Ira S.                   2450   1,470,000      600,000

There are 66 Prism Disputed Claims amounting to $27,819,752.
However, Total Estimated Amount is only $25,736,309.  Some of
the largest Disputed Claims for Prism are:

Creditor                        Claim No.  Original   Estimated
--------                        --------   --------   ---------
AGL Investments No 2 LP            2131    $760,253     $760,253
CEP Second St. Investors, LLC      1974     769,975      340,000
Commerce Park, LP                  1357     815,778      106,461
Illinois Bell Telephone Company    1891   3,074,407    3,074,407
Indiana Bell Telephone Company     1892     696,443      696,443
Michigan Bell Telephone Company    1893   2,207,425    2,207,425
Nortel Networks Inc.               2437   3,030,304    3,030,304
Ohio Bell Telephone Company        1895   3,695,728    3,695,728
Pacific Bell Telephone Company     1896   4,426,956    4,426,956
Southwestern Bell Telephone Co     1899     577,373      577,373
SRA/33 Washington, LP              1661     941,150      941,150
Wisconsin Bell, Inc DBA Ameritech  1894     691,211      691,211
(Comdisco Bankruptcy News, Issue No. 35; Bankruptcy Creditors'
Service, Inc., 609/392-0900)    


CONSECO FINANCE: Moody's Cuts 42 Securitization Ratings
-------------------------------------------------------
Moody's Investors Service downgraded the ratings of 42
subordinated classes and confirmed the ratings of one
subordinate class from Conseco Finance.

                  Rating Actions:

        Green Tree Manufactured Housing Contract
     Senior/Subordinated Pass-Through Certificates:

* Series 1993-1; $30.048 mil., 8.45% Class B Certificates,    
  downgraded from Baa1 to Baa3

* Series 1993-2; $65.337 mil., 8.00% Class B Certificates,
  downgraded from Baa1 to Ba3

* Series 1994-1; $36.505 mil., 7.85% Class B-2 Certificates,
  downgraded from Baa3 to Ba3

* Series 1994-2; $25.209 mil., 8.55% Class B-2 Certificates,
  downgraded from Ba3 to B2

* Series 1994-3; $12.805 mil., 8.65% Class B-2 Certificates,
  rating confirmed at Ba3

* Series 1994-4; $20.017 mil., 8.60% Class B-2 Certificates,
  downgraded from Ba3, to B2

* Series 1994-5; $25.021 mil., 8.55% Class B-2 Certificates,
  downgraded from Ba3, to B2

* Series 1994-6; $30.185 mil., 9.00% Class B-2 Certificates,
  downgraded from Ba3, to B3

* Series 1994-7; $21.210 mil., 9.35% Class B-2 Certificates,  
  downgraded from Ba3, to B3

* Series 1994-8; $31.392 mil., 9.40% Class B-2 Certificates,
  downgraded from Ba3, to B3

* Series 1995-1; $22.721 mil., 9.20% Class B-2 Certificates,
  downgraded from Ba3, to B3

* Series 1995-2; $16.456 mil., 8.80% Class B-2 Certificates,
  downgraded from Ba3, to Caa1

* Series 1995-3; $22.636 mil., 8.10% Class B-2 Certificates,
  downgraded from Ba3, to B1

* Series 1995-4; $12.803 mil., 7.70% Class B-2 Certificates,
  downgraded from Ba3, to B1

* Series 1995-5; $18.053 mil., 7.65% Class B-2 Certificates,
  downgraded from Ba2, to B2

* Series 1995-6; $17.844 mil., 8.00% Class B-2 Certificates,
  downgraded from Ba3, to Caa1

* Series 1995-7; $13.904 mil., 7.70% Class B-2 Certificates,
  downgraded from Ba3, to B1

* Series 1995-8; $19.196 mil., 7.65% Class B-2 Certificates,
  downgraded from Ba3, to B2

* Series 1995-9; $15.948 mil., 7.55% Class B-2 Certificates,
  downgrade from Ba2, to B2

* Series 1995-10; $16.212 mil., 7.40% Class B-2 Certificates,
  downgraded from Ba2, to B3

* Series 1996-1; $15.966 mil., 7.30% Class B-2 Certificates,
  downgraded from Ba2, to B2

* Series 1996-2; $18.618 mil., 7.90% Class B-2 Certificates,
  downgraded from Ba3, to Caa2

* Series 1996-3; $14.883 mil., 8.05% Class B-2 Certificates,
  downgraded from Ba3, to Caa2

* Series 1996-4; $16.614 mil., 8.10% Class B-2 Certificates,
  downgraded from Ba3, to Caa3

* Series 1996-5; $18.115 mil., 8.45% Class B-2 Certificates,
  downgraded from Ba3, to Caa3

* Series 1996-6; $16.625 mil., 8.35% Class B-2 Certificates,
  downgraded from Ba3, to Caa3

* Series 1996-7; $16.800 mil., 8.10% Class B-2 Certificates,
  downgraded from Ba3, to Caa1

* Series 1996-8; $21.051 mil., 8.30% Class B-2 Certificates,
  downgraded from Ba3, to Caa1

* Series 1996-9; $15.750 mil., 8.11% Class B-2 Certificates,
  downgraded from Ba3, to Caa2

* Series 1997-1; $17.500 mil., 7.76% Class B-2 Certificates,
  downgraded from Ba3, to Caa1

* Series 1997-2; $19.250 mil., 8.05% Class B-2 Certificates,
  downgraded from Ba3, to Caa2

* Series 1997-3; $28.000 mil., 8.03% Class B-2 Certificates,
  downgraded from Ba2, to Caa1

* Series 1997-4; $18.200 mil., 7.73% Class B-2 Certificates,
  downgraded from Ba2, to B3

* Series 1997-5; $19.250 mil., 7.49% Class B-2 Certificates,
  downgraded from Ba2, to B3

* Series 1997-7; $19.250 mil., 7.59% Class B-2 Certificates,
  downgraded from Ba2, to Caa1

* Series 1998-1; $15.750 mil., 8.11% Class B-2 Certificates,
  downgraded from Ba2, to Caa1

* Series 1998-2; $30.00 mil., 8.44% Class B-2 Certificates,
  downgraded from Ba3, to Caa2

* Series 1998-4; $20.000 mil., 8.11% Class B-2 Certificates,
  downgraded from Ba3, to Caa1

* Series 1998-5; $14.260 mil., 7.99% Class B-2 Certificates,
  downgraded from Ba3, to Caa2

* Series 1998-7; $34.000 mil., 8.24% Class B-2 Certificates,
  downgraded from Ba2, to Caa2

* Series 1998-8; $60.750 mil., 8.50% Class B-2 Certificates,
  downgraded from Ba2, to Caa1

        Conseco Finance Securitizations Corp.:

* Series 1999-6; $35.000 mil., 9.20% Class B-2 Certificates,
  downgraded from Ba2, to Caa1

* Series 2000-1; $31.500 mil., 8.80% Class B-2 Certificates,
  downgraded from Ba2, to Caa1

Moody's relates that the rating actions were prompted by a
series of downgrades experienced by the company.

Conseco Finance Corp., a wholly owned subsidiary of Conseco
Inc., is the largest servicer of manufactured housing contracts
in the United States, with a servicing portfolio of
approximately $24.4 billion in receivables as of March 2002. The
company is based in St. Paul, Minnesota.


CONSOLIDATED FREIGHTWAYS: Penn. Gov. Directs Aid to Employees
-------------------------------------------------------------
Pennsylvania Gov. Mark Schweiker directed Labor and Industry
Secretary Johnny J. Butler to provide immediate and
comprehensive job-assistance services to employees laid off from
Consolidated Freightways Corp., sites across the state.

Consolidated announced yesterday that it is filing for Chapter
11 bankruptcy.  The company projected 840 employee layoffs in
Cumberland and York counties.  An unknown number of employees at
additional Consolidated locations across Pennsylvania also will
be affected.

"I want to assure Consolidated employees and their families that
the Commonwealth will do everything in its power to help them
get back to work," Gov. Schweiker said.

Labor and Industry staff are contacting Consolidated officials
and leaders of the various local Teamsters unions that represent
the workers at locations across the state to set up meetings and
help workers based on their needs and their schedules, Gov.
Schweiker said.

Laid-off workers can receive up to 26 weeks of unemployment
compensation benefits by calling toll-free 1-888-313-7284, or
through the PA PowerPort at http://www.state.pa.us, PA Keyword:  
"unemployment."

Re-employment and related services also are available through
any Team Pennsylvania CareerLink office and through the PA
PowerPort at http://www.state.pa.us, PA Keyword: "jobs."  

Re-employment services include job counseling, skills
assessment, job search and placement, on-the-job or other
training, resume writing, and additional social or personal help
as needed.  All services are free.


CONSOLIDATED FREIGHTWAYS: Shareholders Out of the Money
-------------------------------------------------------
Consolidated Freightways Corp., (Nasdaq:CFWYE) believes
stockholders are unlikely to receive any distribution on account
of their stock ownership. The company and related entities plan
to filed petitions for relief under Chapter 11 later Tuesday. In
its Form 10-Q to be filed Tuesday, the company said that it is
unlikely that it will be able to fully satisfy the claims of
creditors from the proceeds of any sale or liquidation. Because
of this, there will likely be no money available for
distribution to stockholders. The length of the Chapter 11 case
cannot be determined at this time.

The company announced Monday that it had discontinued all U.S.
operations and would liquidate the business in an expeditious
and orderly manner.


CONSOLIDATED FREIGHTWAYS: Closure Won't Impact on Canadian Unit
---------------------------------------------------------------
Canadian Freightways, headquartered in Calgary, Alberta,
confirmed that the Canadian managed company and it's divisions
across Canada and the United States, will not be impacted by the
closure of parent company Consolidated Freightways Corp.
(NASDAQ:CFWYE). Consolidated Freightways, headquartered in
Vancouver, Washington, Tuesday filed for Chapter 11 Bankruptcy
protection in the United States and announced it would cease
operations.

"I am disappointed Consolidated Freightways could not right
their financial situation. I have my Canadian Freightways team
focused on keeping all of our domestic and international
customers satisfied and their shipments moving," advised Darshan
Kailly, President and Chief Executive Officer of Canadian
Freightways.

Canadian Freightways is operationally and financially
independent, with the resources, the people and the coverage to
keep all of their customers' shipments moving without
interruption. The Canadian group of companies has been
profitable every year since 1962, and enjoys a growing list of
satisfied customers throughout its expanding network. Canadian
Freightways won the 2002 Consumers Choice Award for best
transportation company in Calgary and Edmonton.

Canadian Freightways has been operating in Canada since 1935 and
today employs 2000 people. Specializing in guaranteed time-
definite and expedited transportation, customs brokerage and
supply chain services across Canada and the United States, the
company provides service to businesses who expect to create
competitive advantage with their supply chain. The company's Web
site is http://www.canadianfreightways.com


CONSOLIDATED FREIGHTWAYS: GECC Commits to Provide $225M Facility
----------------------------------------------------------------
Consolidated Freightways Corp., (Nasdaq:CFWYE) filed Chapter 11
bankruptcy petitions with the United States Bankruptcy Court for
the Central District of California.

The company also said one of its immediate goals is to complete
in-transit customer deliveries as quickly as possible.

The company yesterday ceased most U.S. operations. However, the
CF AirFreight, Canadian Freightways, Ltd. and Grupo Consolidated
Freightways, S.A. de RL subsidiaries continue to operate as
usual.

The company said it had received commitments for $225 million in
debtor-in-possession financing from General Electric Capital
Corporation to provide liquidity during the bankruptcy
proceedings. Pending Court approval, the DIP facility will
replace an accounts receivable securitization agreement and real
estate credit facility previously provided by GECC. After
outstanding borrowings and letters of credit under these
agreements are rolled over into the DIP facility, approximately
$40 million of new financing will be available to the company to
proceed with an orderly liquidation.

The company also filed its Form 10-Q and announced its financial
results for the period ended June 30, 2002. At the same time,
company officers certified as to the financial information
contained in the Form 10-Q, in compliance with SEC requirements.

The company reported revenues of $482.4 million and an operating
loss of $53.9 million, after a write-off of approximately $11.0
million of internal-use software that the company will not use
due to its bankruptcy filing. These results follow the previous
quarter's operating loss of $30.9 million on revenues of $463.0
million.

Since the company is no longer considered a going concern, CFC
also recorded an additional $62.6 million in valuation allowance
against net deferred tax assets, which constituted more than
half the quarter's net loss of $123.2 million.

In its Form 10-Q report filed Tuesday with the Securities and
Exchange Commission, CFC said the bankruptcy petition is
necessary because of substantial operating losses in the prior
18 months and the resulting impact on liquidity, letter-of-
credit and surety bond requirements to support the company's
self-administered insurance programs.

According to the company, a number of recent events created a
domino effect that left CFC inadequately capitalized to continue
operations. Last month, a surety bond that secured the company's
workers compensation and vehicular casualty insurance was
cancelled, leading the company to believe that additional bonds
would also be cancelled. This negatively impacted pending
discussions with all lenders and investors. Ultimately, the
company was unable to secure financing and to bridge the surety
bond gap.

Faced with continuing losses and without the ability to obtain
additional financing, CFC's board of directors reluctantly
concluded that the company could not continue to operate outside
of Chapter 11 protection.

In its Form 10-Q report, the company reported assets of
approximately $783.6 million and liabilities of approximately
$791.6 million.

The law firm of Latham & Watkins in Los Angeles acts as legal
counsel for the company in its bankruptcy proceedings.

Consolidated Freightways was founded in Portland, Ore. in 1929.
The company provides less-than-truckload transportation,
airfreight forwarding and supply chain management services
throughout North America. The company is headquartered in
Vancouver, Washington.


CONSOLIDATED FREIGHTWAYS: Voluntary Chapter 11 Case Summary
-----------------------------------------------------------
Lead Debtor: Consolidated Freightways Corporation   
             16400 SE CF Way
             Vancouver, Washington 98683

Bankruptcy Case No.: 02-24289

Debtor affiliates filing separate chapter 11 petitions:

Entity                                     Case No.
------                                     --------
Consolidated Freightways Corporation       02-24284
of Delaware

Chapter 11 Petition Date: September 3, 2002

Court: Central District of California, Riverside Division

Judge: M. Goldberg

Debtors' Counsel: Michael S. Lurey, Esq.
                  Latham & Watkins
                  633 West Fifth Street, Suite 4000
                  Los Angeles, California 90071-2007
                  Phone: (213) 485-1234
                  Fax: (213) 891-8763

Total Assets: $783,573,000 (as of June 30, 2002)

Total Debts: $791,559,000 (as of June 30, 2002)


CONTINENTAL AIRLINES: Traffic Slides-Down 9.5% in August 2002
-------------------------------------------------------------
Continental Airlines (NYSE: CAL) reported an August 2002
systemwide mainline jet load factor of 79.1 percent, 1.0 point
above last year's August load factor.  For August 2002,
Continental reported a record August domestic mainline jet load
factor of 78.6 percent and an international mainline jet load
factor of 79.8 percent.

Continental reported an on-time arrival rate of 83.3 percent and
a completion factor of 99.9 percent for its mainline jet
operations in August 2002.

In August 2002, Continental flew 5.8 billion mainline jet
revenue passenger miles and 7.3 billion mainline jet available
seat miles systemwide, resulting in a traffic decrease of 9.5
percent and a capacity decrease of 10.6 percent as compared to
August 2001.  Domestic mainline jet traffic was 3.4 billion RPMs
in August 2002, down 13.0 percent from August 2001, and August
2002 domestic mainline jet capacity was 4.4 billion ASMs, down
14.5 percent from August last year.

Systemwide August 2002 mainline jet passenger revenue per
available seat mile is estimated to have decreased between 2 and
4 percent compared to August 2001 as a result of lower year-
over-year yields, slightly offset by higher load factors.  For
July 2002, RASM declined 4.0 percent as compared to July 2001.

Consolidated breakeven load factor for September 2002 is
estimated to be 87 percent, 9 points higher than August 2002 due
to September seasonality. Actual consolidated breakeven load
factor may vary significantly from this estimate depending on
actual passenger revenue yields, fuel price and other factors.  
Month-to-date consolidated load factor information can be found
on Continental's Web site at http://www.continental.comin the  
Investor Relations-Financial/Traffic Releases section.

ExpressJet Airlines, a subsidiary of Continental Airlines doing
business as Continental Express, separately reported a record
August load factor of 66.4 percent for August 2002, 0.4 points
above last year's August load factor. ExpressJet flew 366.6
million RPMs and 551.9 million ASMs in August 2002, resulting in
a traffic increase of 6.7 percent and a capacity increase of
6.1 percent versus August 2001.

Continental Airlines' 8.0% bonds due 2005 (CAL05USR1),
DebtTraders reports, are trading at about 94.281. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CAL05USR1for  
real-time bond pricing.


CREDIT STORE: Brings-in Richard Budd from Marotta Gund as CRO
-------------------------------------------------------------
The Credit Store, Inc., seeks permission from the U.S.
Bankruptcy Court for the District Of South Dakota to employ J.
Richard Budd as its Corporate Restructuring Officer.

The Debtor is seeking to hire Marotta Gund Budd & Dzera
Management, LLP as its restructuring advisors, and in connection
with that employment, J. Richard Budd will serve as the Debtor's
Corporate Restructuring Officer.  Mr. Budd is a principal of
Marotta Gund and he will be paid along with other employees and
principals of Marotta Gund.  Marotta Gund will provide all
necessary restructuring advice, testimony and the services of J.
Richard Budd as CRO on a substantially full time basis, for a
flat fee of $90,000 per month.

The Debtor relates that it began experiencing significant cash
flow problems six months ago, exacerbated by declining
conditions in the market.  This prompted the Board of Directors
to hire Marotta Gund to assist it in developing a financial plan
to restructure its debts, or alternatively, sell its assets in
order to maximize recovery for its creditors.  Marotta Gund has
been employed since July 2002 to provide restructuring advisory
services.

Recently, Mr. Budd has had numerous discussions with existing
lenders, potential asset purchasers, and potential purchasers of
the Debtor's business operations. In connection with the
bankruptcy, Mr. Budd has agreed to provide his services on a
substantially full time basis to the Debtor, along with Richard
Grant, an associate at Marotta Gund.  Their current hourly rates
are:

          J. Richard Budd           $500 per hour
          Richard Grant             $375 per hour

Mr. Budd has provided guidance to members of the management
team, and the Board, in connection with the Debtor's sale
efforts, restructuring efforts and efforts to reduce costs, to
ensure that a going-concern business could emerge either in
connection with out-of-court workout, or a chapter 11 bankruptcy
proceeding.

Mr. Budd will be responsible for coordinating all Chapter 11
work, soliciting potential purchasers for sales, negotiating
with potential investors, communicating and responding to
creditor inquiries, working directly with secured creditors on
negotiations related to use of cash collateral, adequate
protection and resolution of their claims, testifying in
bankruptcy court and reporting to both the Board and the
President of the Debtor.  Marotta Gund will also assist in
evaluating potential offers to purchase, assist management by
providing necessary financial analyses and projections and
further assisting management with putting together schedules,
presentations to potential investors or purchasers, as well as
cash flow budgets.

The Credit Store, Inc., is primarily in the business of
providing credit card products to consumers who may otherwise
fail to qualify for a traditional unsecured bank credit card.
The Company filed for chapter 11 protection on August 15, 2002.
Clair R. Gerry, Esq., at Stuart, Gerry & Schlimgen, LLP and Mark
E. Andrews, Esq., at Neligan Stricklin, LLP represent the Debtor
in its restructuring efforts.  When the Company filed for
protection from its creditors, it listed $68 million in assets
and $69 million in debts.


DADE BEHRING: Creditors' Meeting to Convene on Sept. 20, 2002
-------------------------------------------------------------
The United States Trustee will convene a meeting of Dade Behring
Holdings Inc.'s, and its debtor-affiliates', creditors on
September 20, 2002, at 1:30 p.m., at the U.S. Trustee's Office,
Room 3330, 227 West Monroe Street, Chicago, Illinois, 60604.
This is the first meeting of creditors required under 11 U.S.C.
Sec. 341(a) in all bankruptcy cases.  

The Debtors comprise the sixth largest manufacturer and
distributor of in vitro diagnostic (IVD) products in the world.
The Debtors primarily sell diagnostic systems that include
instruments, reagents, consumables, service and date management
systems. Of the total estimated $20 billion annual global IVD
market, the Debtors serve a $12 billion segment targeted
primarily at clinical laboratories. Dade Behring filed for
Chapter 11 protection on August 1, 2002. James Sprayregen, Esq.,
and Marc Kieselstein, Esq., at Kirkland & Ellis represent the
Debtors in their restructuring efforts.


DANA CORP: Closes $152 Mill. Sale of Real Estate Services Group
---------------------------------------------------------------
Dana Corporation (NYSE: DCN) announced that, in accordance with
plans announced in October 2001, it has completed the sale of
the Austin, Texas-based Real Estate Services Group of Dana
Credit Corporation to a fund managed by Fortress Investment
Group LLC.  Fortress is an investment and asset management
company based in New York City.

Proceeds from the sale were $152.5 million, which approximates
the net book value of the subsidiaries and assets included in
the transaction.

Lazard Freres & Company LLC served as adviser to Dana during the
transaction.

Dana Chief Financial Officer Bob Richter said, "In late June we
sold several DCC subsidiaries.  This sale of RESG is the next
significant step in the divestiture of the DCC businesses."

Dana Corporation is one of the world's largest suppliers of
components, modules and complete systems to global vehicle
manufacturers and their related aftermarkets.  Founded in 1904
and based in Toledo, Ohio, the company operates some 300 major
facilities in 34 countries and employs approximately 70,000
people.  The company reported sales of $10.3 billion in 2001.  
Dana's Internet address is http://www.dana.com

As reported in the March 1, 2002 edition of Troubled Company
Reporter, Standard & Poor's assigned a BB rating to Dana's
new $250 million debt issue.


DLJ COMMERCIAL: Fitch Affirms Low-B Ratings on Classes B-4 to 6
---------------------------------------------------------------
Fitch Ratings affirms DLJ Commercial Mortgage Corp. commercial
mortgage pass through certificates, series 1998-CF2, $152.7
million class A-1A, $579.5 class A-1B, and interest-only class S
at 'AAA'. In addition, Fitch affirms the following classes:
$55.4 million class A-2 at 'AA', $60.9 million class A-3 at 'A',
$13.8 million class A-4 at 'A-', $41.5 million class B-1 at
'BBB', $16.6 million class B-2 at 'BBB-', $52.6 million class B-
3 at 'BB', $11.1 million class B-4 at 'BB-', $22.2 million class
B-5 at 'B' and $13.8 million class B-6 at 'B-'. Fitch does not
rate the $22.2 million class C. The rating affirmations follow
Fitch's annual review of the transaction, which closed in
November 1998.

As of the August 2002 distribution date, the certificate
principal balance has been reduced by 5.9% to $1.04 billion from
$1.10 billion at issuance. The certificates are collateralized
by 300 loans, of which 299 are secured by commercial and
multifamily properties, with significant concentrations in New
York (14%), California (13%), Florida (11%) and Texas (11%).
Significant property type concentrations include multifamily
(25%), office (24%), retail (21%) and hotel (14%). The remaining
loan, Heritage Pointe, representing 2.3% of the pool, fully
defeased as of February 2001.

Ten loans are specially serviced (10.5%) including the largest
loan in the transaction secured by an office property in New
York, NY (6.7%). The largest loan transferred when the guarantor
passed away and the loan was assumed without lender consent. The
loan is performing and expected to return to the master servicer
once the issue is resolved. The next largest specially serviced
loan (1.9%) is secured by a retail property in Port Richey, FL.
The loan became delinquent after Wal-Mart vacated the center and
other tenants began exercising a percentage rent option in their
leases. Wal-Mart continues to make rental payments, which when
combined with the percentage rent from other tenants is
insufficient to cover debt service. ORIX Real Estate Capital
Markets (ORIX), as special servicer, filed for foreclosure in
January 2002. The remaining eight loans (0.8%) are cross-
collateralized and cross-defaulted and secured by gas stations.
ORIX is working on a forbearance agreement to allow the borrower
to sell the properties and pay off the loans.

ORIX, as master servicer, provided year-end 2001 operating
statements for 89% of the outstanding pool balance. The weighted
average debt service coverage ratio for YE 2001 was 1.59 times,
compared to 1.72x at YE 2000 and 1.46x at issuance for loans
that reported all three years operating statements (84%).

Fitch reviewed ORIX's watchlist, which contained loans with to
year-to-date 2002 DSCR below 1.1x, bankrupt tenants and vacant
space. Most of the loans with DSCR below 1.1x were hotels, which
are often seasonal. The borrowers of the properties with vacancy
issues are marketing the space or have recently re-leased the
vacant space. All loans on the watchlist remain current on debt
service payments. Fitch will continue to closely examine the
watchlist loans. The affirmations reflect the stable performance
of the pool since issuance. Fitch will continue to monitor the
transaction, as surveillance is ongoing.


ENRON: Connecticut Resources Files Suit to Recoup $220MM Claim
--------------------------------------------------------------
By this Complaint, the Connecticut Resources Recovery Authority
seeks to reclaim $220,179,887 in public funds that were taken by
Enron Corp., through the use of fraudulent, false manipulative
representations which induced the Authority to enter into a
convoluted set of agreements.

According to Richard Blumenthal, Esq., Attorney General of the
State of Connecticut, the Authority is a non-profit, quasi-
public state agency with a legal status akin to that of a
municipality, created by statute and its powers and
responsibilities are set forth in the Solid Waste Management
Services Act.  The Authority provides solid waste trash disposal
and management services in Connecticut, including the Mid-
Connecticut Project.

On March 30, 2001, Enron Corp, Enron Power, the Authority and
Connecticut Light & Power entered into agreements wherein the
Authority permitted CL&P to advance $220,179,887 to Enron Corp.,
for the account and on behalf of the Authority.  In turn, the
Authority agreed to release CL&P from a 1985 Agreement to buy
the Authority's power for $0.85 per kilowatt-hour in exchange
for a new agreement to buy the Authority's power over the same
12-year period for only $0.30-0.33 per kWh.  Enron Power agreed
to repay the $220,179,887 loan to the Authority plus interest at
7% per annum, in two separate payments made each month at $2,375
each for 12 years, regardless of whether or not the Authority
ever delivered any steam or other energy to Enron Corp.  The
Authority did not receive collateral, surety, hedge or credit
protection in any form to secure Enron Power's obligation to the
Authority other than an unconditional, unsecured guarantee of
Enron Corp.

Under the Agreements, Enron Power simply transferred the energy
in an instant in a wash transaction without any conditions or
obligations and with no profit since it never obtained any
custody or control, risk of loss, obligation or commitment with
respect to any of the Authority's energy.  In effect, Enron
Corp., contributed nothing under the Agreement other than being
the financing vehicle.  "This created a $220,179,887 unsecured,
disguised loan to Enron Corp. in total violation of the
Authority's tightly limited statutory investment authority," Mr.
Blumenthal says.  Hence, Mr. Blumenthal believes, the loan was
illegal under Connecticut law.  It was an act beyond the scope
of the Authority -- "ultra vires" -- and thus void from the
start -- "void ad initio."

Mr. Blumenthal contends that Enron Corp., had actual knowledge
that the loan was beyond the Authority's scope, making Enron
Corp. unjustly enriched by the loan.

Furthermore, Mr. Blumenthal continues, before the Agreements
were closed, the Authority was compelled to purchase a two-month
hedge transaction for January to February 2001.  The Authority
purchased was compelled to buy another hedge transaction for
$750,000 in order for Enron Power not to withdraw from the
transaction.

In order to induce the Authority to make these transactions,
Enron Corp., officers and employees "falsely stated that Enron
was undertaking a disproportionate risk in the transaction in
light of its superior credit rating, borrowing capacity,
financial success and long-term stability," Mr. Blumenthal says.  
The Authority particularly relied upon:

  (a) falsely inflated credit ratings derived from false
      representations of Enron Corp in its 10-K, 10-Q and other
      public SEC filings which reflected false financial
      statements for the period from January 1, 1996 through
      the first quarter of 2001 -- the Relevant Period;

  (b) false financial statements and SEC filings during the
      Relevant Period;

  (c) false representations made by Enron Corp. representatives
      throughout the Relevant Period in press releases and
      other publications concerning its operations, performance
      and liquidity; and

  (d) false statements about Enron Corp.'s profitability,
      operations, debt and borrowing capacity to induce the
      Authority to enter into the Agreements.

Enron Corp.'s financial fraud came to light shortly after the
Authority transferred the funds, as evidenced by:

    (a) the sudden resignation of the Chief Operating Officer,
        Jeffrey Skilling;

    (b) the posting in October 2001 of a surprise quarter loss
        and the announcement of investment and asset write-downs
        of $1,200,000;

    (c) disclosure of SEC probes of Enron's related party
        transactions;

    (d) Enron's restatement in November 2001 of its financial
        statements for the prior three years and the first three
        quarters of the current year; and

    (e) the filing in December 2001 for Chapter 11 protection.

Mr. Blumenthal tells the Court that Enron Power ceased making
its monthly payments when Enron Corp. filed for Chapter 11
protection.  This loss, Mr. Blumenthal points out, creates a
direct threat to the Authority's solvency, which in effect,
affects the Connecticut taxpayers because the State is obligated
to make payments on more than $200,000,000 in the Authority
bonds if it does not have the money to pay the debt service.

Accordingly, the Authority asks the Court:

  (a) to compel Enron Corp. to immediately transfer $220,179,887
      to the Authority;

  (b) to enjoin Enron Corp. from transferring, diminishing
      or dissipating in any manner;

        -- the bank accounts and all other immediate and mediate
           transferees which have received the $220,179,887 paid
           to Enron Power on Enron Corp.'s behalf; and

        -- any investment vehicle or other property in which the
           $220,179,887 has been reinvested by Enron Corp. and
           the proceeds of any investment.

      In the alternative, the Authority seeks a replacement lien
      on Enron's unencumbered assets in the amount of any
      diminution of the funds being held; and

  (c) for a declaratory judgment, pursuant to Section 541(d) of
      the Bankruptcy Code, stating that:

        -- the energy produced by the Authority and delivered to
           third party CL&P is not a property of the Enron
           estates and the Authority may thus sell or transfer
           it directly to third parties;

        -- all funds being withheld by CL&P from the Authority
           which were or will be payable to the Authority as
           purportedly contemplated by the Agreements are the
           property of the Authority and not any of the Enron
           estates; and

        -- in light of the "ultra vires" and "void ad initio"
           status of the Agreements as to the Authority, any
           motion by any party to cause any known estate to
           assume or reject the Agreements would be unnecessary
           and moot. (Enron Bankruptcy News, Issue No. 40;
           Bankruptcy Creditors' Service, Inc., 609/392-0900)


ENRON: Marathon Oil Acquires LNG Delivery Rights at Elba Island
---------------------------------------------------------------
Marathon Oil Company, a wholly owned subsidiary of Marathon Oil
Corporation (NYSE: MRO), has acquired Enron's right to deliver
and sell liquefied natural gas at terminal facilities located at
Elba Island, near Savannah, Georgia.  The United States
Bankruptcy Court for the Southern District of New York approved
the transfer of ownership on August 28.  Marathon was the
successful bidder for the rights, with a $31.9 million bid.

Under the terms of the agreement, Marathon can supply up to 58
billion cubic feet of natural gas (as LNG) per year, for
approximately 17 years, to El Paso Merchant Energy at the Elba
Island LNG re-gasification terminal.

"This acquisition is indicative of the progress Marathon is
making toward building an integrated gas business," said
Clarence P. Cazalot Jr., president and CEO of Marathon Oil
Corporation.  "This agreement will enable us to capture value
from the expected growth in LNG imports into the U.S., while
also providing options to commercialize our significant natural
gas resources in Equatorial Guinea."

Marathon will continue to seek LNG supply positions both through
upstream equity resources and through the evolving LNG spot
trade in the Atlantic Basin.

Marathon Oil Corporation is an energy company engaged in the
worldwide exploration, production and transportation of crude
oil and natural gas. Through Marathon Ashland Petroleum LLC, the
company also refines, markets and transports petroleum products
in the United States.  For more information about Marathon,
visit the Company's Web site at http://www.marathon.com


FARMLAND INDUSTRIES: Wants to Restructure Fertilizer Operations
---------------------------------------------------------------
Farmland Industries Inc., seeks to restructure its fertilizer
manufacturing assets through a sale or strategic alliance as
part of its bankruptcy reorganization process. The assets are
the primary component of Farmland's Crop Production division,
which had sales of $745 million in fiscal 2001.

Farmland president and CEO Bob Terry said, "Selling or
repositioning our fertilizer business will allow us to
significantly reduce outstanding debt and reduce or eliminate
the cyclical business risk inherent in the fertilizer industry."

Terry continued, "We believe there is tremendous potential in
Farmland Foods and the Farmland(R) brand. We have elected to
place stronger focus on growing and improving this business."

Farmland owns seven nitrogen fertilizer manufacturing
facilities, located in Fort Dodge, Iowa; Coffeyville, Kan.;
Dodge City, Kan.; Lawrence, Kan., Pollock, La., Beatrice, Neb.;
and Enid, Okla. Farmland also owns 19 fertilizer distribution
terminals throughout the U.S.  Farmland's Crop Production
division employs 531 administrative and production workers.

In addition, Farmland is a partner in phosphate manufacturing
joint ventures in Wyoming and Utah, and jointly owns a nitrogen
manufacturing plant in Trinidad and Tobago with Mississippi
Chemical Corp. Farmland continues working with Cargill toward
the sale of Farmland's interest in Farmland Hydro, a phosphate
fertilizer operation in Bartow, Fla. The company will also
continue to pursue the sale of non-core assets and investments,
including its petroleum refinery in Coffeyville, Kan.

"We intend to restructure our fertilizer assets through a sale
or strategic alliance, presuming we can identify an appropriate
buyer or partner and negotiate a fair price," said Terry.
"Meanwhile we will continue to operate the plants, and we expect
no disruption of fertilizer supply to our members."

Terry said the decision was made by Farmland's 21-member Board
of Directors and will be reviewed by the court-appointed
committees overseeing Farmland's reorganization.

Farmland Industries, Inc., Kansas City, Mo. --
http://www.farmland.com-- is a diversified agricultural  
cooperative with interests in food, fertilizer, petroleum,
animal feed and grain businesses.


FOUNTAIN PHARMA.: Sends Information Statement to Shareholders
-------------------------------------------------------------
An Information Statement was mailed on or about August 2, 2002
to the holders of record at the close of business on July 22,
2002, of the Class A and Class B common stock, $.001 par value
per share of Fountain Pharmaceuticals, Inc., in connection with
the Company's acquisition of SiriCOMM, Inc., and appointment of
certain persons to the Board of Directors of the Company other
than at a meeting of the shareholders of the Company.

The Information Statement was also mailed to the Company's
shareholders in connection with a proposed action by written
consent to authorize and approve:

     1. An amendment and restatement of the Company's
        Certificate of Incorporation which:

        (a) changes the name of the Company to "SiriCOMM, Inc.";

        (b) combines the outstanding shares of common stock into
            a single class of common stock;

        (c) reverse splits the outstanding shares of the
            Company's common stock one-for-sixty;

        (d) decreases the par value of the Company's Common
            Stock resulting from the Reverse Split to $.001;

        (e) increases the number of shares of common stock the
            Company is authorized to issue to 50,000,000; and

        (f) increases the number of shares of Preferred Stock,
            $.001 par value, the Company is authorized to issue
            from 2,000,000 to 5,000,000.

     2. The adoption of the Company's 2002 Equity Incentive
        Plan.

     3. The approval of the acquisition of SiriCOMM, Inc.

The sole member of the Board of Directors, Mr. Brendon K.
Rennert, beneficially owns 3,500,000 shares of Class A common
stock and 100,000 shares of Class B common stock. These
shareholdings represent approximately 59.6% and 95.7%,
respectively, of the total outstanding votes of all issued and
outstanding common stock of the Company and was sufficient to
take the proposed action on the Record Date. Dissenting
shareholders do not have any statutory appraisal rights as a
result of the action taken. Mr. Rennert, on behalf of Park
Street Acquisition Corp., executed a written consent on July 15,
2002 in favor of the proposed action on behalf of the shares of
the Company which he controls. The Company does not intend to
solicit any proxies or consents from any other shareholders in
connection with these actions.

Pursuant to the provisions of Delaware law and the Company's
Certificate of Incorporation, the amendments require the
approval of a majority of such shares. Accordingly, Mr.
Rennert's vote is sufficient to approve these matters, which he
believes is in the best interests of the Company and its
shareholders. The corporate action will be effective 20 days
after the mailing of the Information Statement.

Fountain Pharmaceuticals, which had relied largely on loans from
chairman James Schuchert, Jr., ran out of time and money. Before
suspending operations and transferring its assets instead of
facing foreclosure, it primarily developed "cosmeceuticals"
based on its proprietary drug-delivery technology -- man-made
microscopic spheres carry pharmaceuticals that are released when
applied to the skin. The technology was used in sunscreens,
lotions, and moisturizers under the Celazome and LyphaZone
brands.

Since Fountain Pharmaceuticals no longer has assets except the
Company's public shell, it no longer has the ability to generate
revenue; therefore, the Company is not in the position to
continue as a going concern.

The Company's Board of Directors is currently pursuing
candidates with potential business interest with which to
merge.  The Company has reached an agreement to acquire all of
the issued and  outstanding shares of SiriCOMM, Inc.  


GENTEK INC: Fitch Downgrades Senior Subordinated Notes to D
-----------------------------------------------------------
Fitch Ratings has downgraded GenTek Inc.'s senior subordinated
notes to 'D' from 'C'. Fitch has affirmed the 'CC' rating on the
senior secured credit facility.

The rating downgrade is based upon the payment default relating
to GenTek's scheduled August 1, 2002 interest payment on the 11%
senior subordinated notes. GenTek's senior lenders issued a
payment blockage notice pursuant to the senior credit facility
preventing GenTek from paying interest due to the senior
subordinated noteholders. GenTek was not permitted to make the
scheduled interest payment during the grace period, which ended
August 31, 2002, thus defaulting on the senior subordinated
notes.

GenTek is continuing its restructuring discussions with the
senior secured lenders and the senior subordinated noteholders.
In late August, 66% of senior subordinated noteholders agreed to
take no action for a 60-day period, while restructuring
discussions continue. Thus, the senior subordinated noteholders
are not expected to accelerate principal and interest payments
for a 60-day period, which began on August 28, 2002.

GenTek is a diversified manufacturer with business segments
focused on manufacturing, performance products, and
communications. In 2001, GenTek had $1.2 billion in revenue and
$143 million in EBITDA.


GLIMCHER: Closes $106MM Asset Sale to Repay Maturing Obligations
----------------------------------------------------------------
Glimcher Realty Trust, (NYSE: GRT), one of the country's premier
retail REITs, has completed the sale of a portfolio of 13
properties for a purchase price of approximately $106 million.  
This represents the initial closing on a sale of a portfolio of
22 assets that was the subject of a June 11, 2002 press release.  
The Company's contract for the sale of nine remaining community
centers continues in force with the closing of that group of
assets subject to the approval of an assumption of the loan
securing the assets.  The buyer is a group of private investors
that have no prior affiliation with the Company or its major
shareholders.

The purchase price included $76.8 million in cash and the
assumption of four existing mortgages with an outstanding
balance of $29.2 million.  The cash proceeds were used to repay
a $50 million mortgage that was scheduled to mature on October
26, 2002 and to pay down $19.2 million on the Company's floating
rate bridge loan facility.  The balance of the funds after
payment of closing related costs were used to reduce the
outstanding borrowings on the Company's line of credit.

The properties are located in the Midwest and Southeast and
total approximately 2.1 million square feet of gross leasable
area.  Eleven of the properties are community centers and two
are single tenant assets.  

"This $106 million sale is a major step forward in the execution
of our plan to lower the Company's leverage and focus on
regional mall assets," said Michael P. Glimcher, President.  
"The closing of this transaction has reduced our debt to market
capitalization ratio below 60% as of August 31 and completes our
refinancing requirements for 2002."

During 2002 the Company has closed on the sale of 17 community
centers and three single tenant assets for a total of $171.5
million.  As of August 31, 2002, the Company retains ownership
or has a joint venture interest in a total of 85 properties
aggregating 27.9 million square feet of gross leasable area.  
The Company's 23 regional malls represent 19.7 million square
feet of GLA which is approximately 71% of the total portfolio.

Glimcher Realty Trust, a real estate investment trust, is a
recognized leader in the ownership, management, acquisition and
development of enclosed regional and super-regional malls and
community shopping centers.

Glimcher Realty Trust's common shares are listed on the New York
Stock Exchange under the symbol "GRT."  Glimcher Realty Trust is
a component of both the Russell 2000(R) Index, representing
small cap stocks, and the Russell 3000(R) Index, representing
the broader market.


GLOBAL CROSSING: Asks Court to Okay Settlement with Level 3
-----------------------------------------------------------
Global Crossing Ltd., its debtor-affiliates, and Level 3
Communications LLC provide each other with fiber optic capacity,
cable station access and private line and voice services on a
global basis, pursuant to various agreements.  The Debtors
regard Level 3 as a strategic vendor going forward, according to
Michael F. Walsh, Esq., at Weil Gotshal & Manges LLP, in New
York.

Level 3 asserts claims against the Debtors for $61,400,000 in
the aggregate.  The Debtors dispute the existence, amount,
extent and priority of Level 3's claims.  The Debtors also
assert preference claims and a variety of other claims against
Level 3 aggregating $41,400,000 for nonpayment of services
rendered.

The salient terms of the Level 3 Settlement Agreement are:

A. Global Crossing Parties:  Atlantic Crossing Ltd.; Atlantic
   Crossing II, Ltd.; GC Pan European Crossing France S.A.R.L.;
   GC Pan European Crossing Nederland BV; GCL; GC Bandwidth; GC
   North American Networks; Global Crossing USA, Inc.; GT
   Landing II Corp.; and GT U.K. Ltd;

B. Level 3 Parties:  Level 3; Level 3 (Bermuda) Limited; Level 3
   Communications, BV; Level 3 Communications Limited; Level 3
   Communications, SA; and Level 3 Landing Station, Inc.;

C. Releases, Covenants Not to Sue and Waivers of After-
   Discovered Claims Related to the Principal Agreements:  The
   Parties release the other from any and all claims arising out
   of:

   -- the Yellow Cable System Co-Build Agreement dated February
      16, 2000 between Level 3 (Bermuda) Ltd., Level 3
      International Ltd. and Level 3 Communications, LLC and
      Atlantic Crossing II Ltd., including the leases by the
      Debtors and GT U.K. for cable station space in Bellport,
      New York and Bude, Cornwall, respectively, as referenced
      in the Co-Build Agreement;

   -- the Upgrade Sharing and Capacity Acquisition Agreement,
      dated February 16, 2000, between Atlantic Crossing, Ltd.
      and Level 3 (Bermuda) Ltd., including the leases by Level
      3 for cable station space in Suffolk County, New York and
      Sennen, Cornwall, as referenced in the Upgrade Sharing
      Agreement;

   -- the Capacity Purchase Agreement, dated September 28, 1998,
      between Ultraline (Bermuda) Ltd., now known as Level 3
      (Bermuda) Ltd. and Atlantic Crossing, Ltd., and related
      agreements and amendments; and

   -- the IRU Agreement, dated September 6, 2000 between Level 3
      Communications, LLC and Global Crossing North American
      Networks, Inc.  The Parties also agree not to sue on any
      claim for damages arising under the Principal Agreements
      as a result of facts or circumstances occurring up to and
      including the Execution Date and waive claims arising
      under the Principal Agreements as a result of facts or
      circumstances which existed prior to the Execution Date,
      but which were unknown by the applicable party at this
      date;

D. Releases, Covenants Not to Sue and Waivers of After-
   Discovered Claims Related to the Additional Arrangements:  
   The Global Crossing Parties and the Level 3 Parties release
   the other from any and all claims arising out of agreements
   or arrangements among Level 3 and certain of its subsidiaries
   and affiliates, including Level 3 Communications SA, Level 3
   Communications BV, Level 3 (Bermuda) Limited, and certain of
   the Debtors' subsidiaries and affiliates, including GC Pan
   European Crossing France S.A.R.L., GC Pan European Crossing
   Nederland, BV, GT U.K., Ltd., Global Crossing USA, Inc.,
   GC Bandwidth and GC North American Networks regarding:

    -- certain Pan European Crossing collocation services;

    -- certain United States domestic voice and private line
       services;

    -- certain international private line services; and

    -- San Jose local loop joint build, up to and including the
       Execution Date.

   The Parties also covenant not to sue on any claim for damages
   arising under the Additional Arrangements as a result of
   facts or circumstances occurring up to and including the
   Execution Date and waive claims arising under the Additional
   Arrangements as a result of facts or circumstances which
   existed prior to the Execution Date, but which were unknown
   by the applicable party;

E. Resolution of Trans-Atlantic Matters:  The Parties will
   release the other from certain claims relating to the
   Capacity Purchase Agreement, the Upgrade Sharing Agreement
   and the Co-Build Agreement, as applicable;

F. Resolutions of Matters under the Dark Fiber IRU Agreement:
   The Dark Fiber IRU Agreement is amended to delete the
   Debtors' obligations or options to purchase, and Level 3's
   obligation to deliver, any additional segments of certain
   conduit or fiber.  The Dark Fiber IRU Agreement is further
   amended so that the Debtors are permitted to retain the IRUs
   in all conduit and fiber delivered and fully paid for prior
   to the Execution Date.  The Retained Fiber and Conduit will
   continue to be governed by the terms of the Dark Fiber IRU
   Agreement as amended by the Level 3 Settlement Agreement;

G. Resolution of Interlink Matters:  Contemporaneously with the
   execution of the Level 3 Settlement Agreement, the Debtors
   and Level 3 executed the "Interlink Agreement" to effect the
   transfer by GC North America to Level 3 of whatever interest
   which GC North America has in and under the Outside Plant
   Construction Contract between GC North America and KeySpan
   Communications Corporation, with respect to one quad duct;

H. U.S. Yellow Cable Station Lease:  Contemporaneously with the
   execution of the Settlement Agreement, the Debtors and Level
   3 executed the lease for the cable landing station at
   Bellport, New York.  The Debtors' rent payment obligation
   under the lease is discharged;

I. Dismissal of Arbitration:  Within 5 business days after Court
   approval of this motion, the Debtors and Level 3 will file a
   joint stipulation of dismissal, with prejudice, of the
   pending arbitration before the American Arbitration
   Association;

J. Future Payments by Level 3 to Global Crossing for OA&M:  The
   fees payable by Level 3 to the Debtors from January 1,
   2004 forward, under the Upgrade Sharing Agreement and
   Capacity Purchase Agreement, will be fixed at $2,000,000 per
   year -- allocated $150,000 to the Capacity Purchase Agreement
   and $1,850,000 to the Upgrade Sharing Agreement.  These
   payments will be made quarterly in advance;

K. Payments by Level 3 Under Additional Arrangements:
   $2,296,665.37 within July 30, 2002 in full satisfaction of
   all amounts due between the parties with respect to the
   Additional Arrangements through either May 31, 2002 or June
   30, 2002 arising out of or under or relating to the
   Additional Arrangements based upon facts or circumstances
   occurring up to and including the Release Date.  This payment
   will be in full satisfaction of all claims of the Debtors
   against Level 3 vice versa that have accrued or arisen under
   the Additional Arrangements based upon facts or circumstances
   occurring up to and including the June 30, 2002.  For all
   amounts due from Level 3 to the Debtors or from the Debtors
   to Level 3 subsequent to the Release Date, Level 3 will pay
   to the Debtors and the Debtors will pay to Level 3 all
   amounts not disputed in good faith invoiced or to be invoiced
   and that become due and payable after the Release Date; and

L. Assumption of Executory Contracts:  The Debtors will assume
   these Level 3 Agreements, provided that no payments will be
   required in connection with the assumption:

   -- Co-Build Agreement:  For purposes hereof, the "Co-Build
      Agreement" will include the leases by GT Landing II Corp.
      and GT U.K. for cable station space in Bellport, New York,
      and Bude, Cornwall, respectively, as referenced in the Co-
      Build Agreement;

   -- Upgrade Sharing Agreement:  For purposes hereof, the
      "Upgrade Sharing Agreement" will include the leases by
      Level 3 for cable station space in Suffolk County, New
      York, and Sennen, Cornwall, referenced in the Upgrade
      Sharing Agreement;

   -- Capacity Purchase Agreement; and

   -- Dark Fiber IRU Agreement. (Global Crossing Bankruptcy
      News, Issue No. 19; Bankruptcy Creditors' Service, Inc.,
      609/392-0900)


HOMEGOLD FINL: Receives Bid for Purchase of Retail Mortgage Unit
----------------------------------------------------------------
HomeGold Financial, Inc. (OTC Bulletin Board: HGFN), has
received a formal bid for the retail mortgage division.  If
negotiations go as planned the transaction could be completed
within 120 days.  An acquisition of this nature is attractive to
prospective acquirers because of their ability to purchase the
production franchise, while assuming little of the overhead,
including executive management.  Further, by completing the
expansion initiative the Company has put into place a
significant component of the Company's continuing efforts to
return to profitability.  During the first six months of 2002,
HomeGold opened twelve new production centers nationwide,
increasing the total number of such centers to seventeen.  
Currently, each center has an average of 21 loan officers.  Once
mature, each center will ultimately increase to approximately 31
loan officers.

The expansion initiative is designed to grow the Company's loan
production capacity via increasing the number of Company loan
officers in strategically located production centers.  In
addition to the expansion initiative, the Company has other
projects underway that will create operating efficiencies and
contribute to the profitability of the Company:

     * The creation of a related title and closing business
       through the formation of a joint venture with an
       independent company,

     * Centralization of the underwriting function which will
       streamline the origination process and improve the
       quality of the mortgages originated,

     * Implementation of incentive compensation programs that
       reward Company profitability and seasoned, high
       performing employees,

     * Continued standardization and simplification of all
       operating procedures across production centers,

"Now that the expansion campaign is complete we can focus 100%
of our resources and attention towards increasing production and
enhancing other core competencies," indicates Mr. Sheppard, CEO
HomeGold, Inc.  In developing a portfolio of 17 geographically
dispersed production centers, HomeGold now has the production
capacity to take advantage of its warehouse credit facilities.
"We have the liquidity and the capacity -- Now it's time for us
to generate the loan volume and take advantage of these
opportunities.  Moreover, a loan distribution system of the size
we've created makes us more attractive to the current
prospective acquirer or any other acquirers."

In reviewing the operating results of the individual production
centers, we are satisfied that they are ramping up in a fashion
consistent with our expectations.  "We are confident that a full
complement of 17 mature production centers will provide the
level of profitability that our shareholders expect.  This is
what we intend on delivering to our shareholders," Mr. Sheppard
is quoted as saying.

In other business not related to the above matters, HomeGold has
received clarification on a certain $2.5 million deposit with
one of its warehouse lenders.  It has been resolved that this is
a collateral deposit and will not require any adjustment to the
financials statements.

As reported in Troubled Company Reporter's August 28, 2002
edition, Standard & Poor's junked HoneGold's counterparty credit
rating at CCC-.


HORSEHEAD: Gets Interim Nod to Use Lenders' Cash Collateral
-----------------------------------------------------------
Horsehead Industries, Inc., and debtor-affiliates sought and
obtained interim approval from the U.S. Bankruptcy Court for the
Southern District of New York to use their Lenders' cash
collateral through September 20, 2002, pending a final hearing.

The Cash Collateral which the Debtors seek to use is either cash
or the cash proceeds of collateral subject to liens and security
interests in favor of JP Morgan Chase Bank, as lender and
administrative agent for certain other banks and financial
institutions.  The Agent has had liens and security interests in
certain assets of the Debtors for many years and has been the
Debtors' working capital lender for over 10 years.  The Debtors
and the Lenders tells the Court that they have negotiated the
Interim Order in good faith.

The Debtors are authorized to use their Cash Collateral in the
ordinary course of their businesses in accordance with this
Budget (in thousands):

                                     Week Ending
                                     -----------
                      8/23     8/30      9/8     9/13    9/20    
                      ------   ------    ------  ------  ------
Beginning Cash        $5,189   $6,627    $6,413  $4,594  $3,075
Total Receipts         3,700    3,800     3,425   3,525   3,725
Total Disbursements    2,261    5,014     4,244   5,044   3,324
Ending Cash            6,627    5,413     4,594   3,075   3,476

The Debtors have acknowledged that as of the Filing Date, the
pre-petition funded loans owed to the Lenders amounted to
approximately $4,100,000.  The Lenders are granted Replacement
Liens and the Lenders are also given a super priority
administrative expense claim as further adequate protection, to
the extent the Replacement Liens are inadequate.

Additional miscellaneous provisions in the Interim Order include
a $350,000 carve-out for payment of the Debtors' professionals
and a $150,000 carve-out for the Creditors' Committee
Professionals --should a committee be appointed and they retain
professionals.

The Court determined that the Debtors do not have sufficient
sources of cash to carry on the operation of their businesses
without the use of the Cash Collateral. The Debtors' ability to
maintain business relationships with their vendors, suppliers
and customers and to meet payroll and other operating expenses
is essential to the Debtors' continued viability and the value
of their businesses as going concerns. In the absence of the use
of the Cash Collateral, the continued operation of the Debtors'
businesses would not be possible, and serious and irreparable
harm to the Debtors and their estates would occur.

Horsehead Industries, Inc., d/b/a Zinc Corporation of America,
the largest zinc producer on August 19, 2002 at Southern
District of New York. Laurence May, Esq., at Angel & Frankel, PC
represents the Debtors in their restructuring efforts. When the
Company filed for protection from its creditors, it listed
$215,579,000 in assets and $231,152,000 in debts.


INT'L AIRLINE: Independent Accountants Raise Going Concern Doubt
----------------------------------------------------------------
International Airline Support Group, Inc., is a leading
redistributor of aftermarket aircraft spare parts used primarily
for commuter turboprop aircraft, McDonnell Douglas MD-80 and DC-
9 aircraft.  Management believes that the Company has one of the
most extensive inventories of aftermarket Embraer EMB-120
Brasilia, MD-80 and DC-9 parts in the industry.  In addition,
the Company provides aircraft spare parts for Airbus, Boeing,
Lockheed and other McDonnell Douglas and commuter turboprop
aircraft. The aircraft spare parts distributed by the Company,
including avionics, rotable and expendable airframe and engine
parts, are sold to a wide variety of domestic and international
air cargo carriers, major commercial and regional passenger
airlines, maintenance and repair facilities and other
redistributors.  The wide variety  of aircraft spare parts
distributed by the Company are acquired through purchase or
consignment of surplus or bulk inventories from airlines,
purchases from  other redistributors and disassembly of
aircraft.

In addition to being a provider of aircraft spare parts, the
Company leverages its industry expertise  to purchase, sell and
lease aircraft and engines.  The Company has periodically
acquired, leased and sold a variety of narrow-body commercial
jet aircraft, such as Boeing 727 and 737 and McDonnell Douglas
MD-80 and DC-9 aircraft, as well as commuter turboprop aircraft,
such as Embraer EMB-120  aircraft.  The Company currently owns
eight Embraer EMB-120 aircraft, five of which are leased.  The
Company derives revenue from lease payments and seeks to sell
spare parts to the lessee both for the leased aircraft and other
aircraft in the lessee's fleet.  Upon return of the aircraft,
the Company  either re-leases, sells or disassembles the
aircraft for parts in order to achieve the highest utilization
of the asset.  The Company believes that its aircraft trading
activities and its parts redistribution business complement one
another.

The Company's other business activities include providing
advisory services on parts-inventory  disposition to air
carriers and other interested parties, including aviation
services companies.  The  Company's advisory services complement
its parts sales and aircraft trading and leasing activities by
enhancing the Company's reputation as an industry expert in
commercial jet and turboprop parts.

International Airline Support's net sales decreased by 1.2% from
$18.3 million in fiscal 2001 to $14.4 million in fiscal 2002.  
This decrease was primarily due to a decrease in parts and
engine sales, which was partially offset by an increase in
aircraft sales. The decline in parts sales is  attributable to
the weaker economy, pricing pressure from competition, a higher
percentage of turboprop part sales compared to jet part sales
and a higher percentage of expendable part sales compared to
rotable part sales.  Turboprop parts on average tend to have
lower selling prices than  equivalent jet parts, while
expendable parts also tend to sell for less than rotable parts.  
During fiscal 2002, the Company sold nine engines and one
aircraft as compared to fiscal 2001, during which the Company
sold eleven engines and no aircraft.  Lease and service revenue
decreased 15.4% from  $3.2 million in fiscal 2001 to $2.7
million in fiscal 2002, due primarily to fewer assets being on  
lease during  fiscal 2002.  Due primarily to the decrease in
parts and engine sales and the decrease in lease and service
revenue, partially offset by the increase in aircraft sales,
total revenue for fiscal 2002 decreased 20.3% to $17.1 million
from $21.5 million for fiscal 2001.

Cost of sales decreased 23.9% from $14.1 million in fiscal 2001
to $10.7 million in fiscal 2002.  Cost of sales as a percentage
of total revenue decreased from 65.6% in fiscal 2001 to 62.6% in
fiscal 2002.  The decrease in the cost of sales as a percentage
of total revenue in fiscal 2002 compared to fiscal 2001 was due
to a higher percentage of total revenue being provided by
aircraft and engine sales and higher margins in aircraft and
engine sales. The cost of sales on part sales decreased 32.3%
from $10.6 million in fiscal 2001 to $7.2 million in fiscal
2002.  This decrease was primarily due  to the decrease in sales
in the period.

Total loss for fiscal 2002 were $8,534,000, compared to net
earnings for fiscal 2001 of $343,000.

The Company obtains working capital and long-term financing for
inventory and aircraft acquisitions under its Credit Facility.  
The Credit Facility includes a revolving credit facility that
permits it to borrow up to $14 million.  It also includes two
term loans that totaled approximately $8.4 million  as of May
31, 2002.  The Credit Facility matures in December 2005,
although the lender may declare  all amounts outstanding to be
immediately due and payable as a result of defaults.  The
Company is required to make partial repayments of the principal
of the term loans, including a payment of $216,000 that was due
on September 1, 2002, which the Company is unable to pay.  The
interest rate that the Company pays on borrowings pursuant to
the Credit Facility is subject to fluctuation and  may change
based upon certain financial covenants.  As of August 15, 2002,
the interest rate under the Credit Facility was the lender's
base rate minus 0.25% (4.5%).  The Credit Facility is secured by
substantially all of the assets of the Company and availability
of amounts for borrowing is subject to certain limitations and
restrictions.  

The Company is not in compliance with certain covenants included
in the Credit Facility.  The  Company ceased to be in compliance
with the covenants during the second quarter of fiscal 2002 when
it recorded a non-cash impairment charge to eliminate the
Company's investment in Air 41 LLC.  As a  result of the
default, the entire principal amount of the indebtedness
outstanding under the Credit Facility, approximately
$19,719,000, has been classified as current in the Company's
balance sheet at May 31, 2002.  Furthermore, as a result of the
defaults, the Company's lender could accelerate the Company's
obligation to repay the amount of all borrowings outstanding
under the Credit Facility, could refuse to extend additional
credit to the Company and could foreclose on its lien on the
Company's assets.  The Company would be unable to continue
operations if the lender took such actions. The report of the
independent certified public accountants, on the Company's
financial statements that have been filed with the SEC, includes
a paragraph which indicates the uncertainty about the Company's
ability to continue operations caused by the uncured defaults.

International Airline Support Group and its lender are
negotiating the terms of a revised credit facility.  In the
negotiations, the Company is, among other things, seeking to
delay the repayment  of principal amounts due with respect to
the term loans, including the payment due on September 1,  2002.  
The Company's lender is currently extending credit under the  
Credit Facility while the terms of the revised credit facility
are being negotiated.  The Company has no assurances, however,
that  the lender will continue to do so.

On August 22, 2002, the Company received the proposed terms of a
revised credit facility from the lender.  The proposed terms
would reduce the amount of the revolving credit facility to $2
million.  The entire amount outstanding under the Credit
Facility would be converted to a term loan.  The total term loan
balance under the lender's proposal would be approximately $18.5
million.  The Company  would be required to make periodic
payments of principal with respect to the term loan and to repay
it in full by August 31, 2003.  The amount of the revolving
credit facility would be increased by a percentage of the amount
of the term loan repaid, up to a maximum revolving credit
facility of $10 million.  The amounts the Company would be
permitted to borrow under the revolving credit facility  would
be based on the amount of its accounts receivable and the value
of its inventory.  The interest rate on borrowings pursuant to
the revolving credit facility would be the lender's prime rate
plus 3%.  The interest rate on the proposed term loan would be
initially the lender's prime rate plus 4%.  The interest rate on
the term loan would be reduced as the term loan is repaid.

The Company is continuing its negotiations with its lender but
has no assurances that it will be able to consummate a revised
credit facility with the lender.  Accordingly, the Company is
pursuing other alternatives to the lender's proposal.  Such
alternatives include discussions with other potential sources of
financing and with companies that might pursue a business
combination transaction with  the Company.  The Company has no
assurance that any of such alternatives will materialize.

As of August 22, 2002, the Company would have been permitted to
borrow approximately $104,000  pursuant to the Credit Facility,
but for the uncured defaults described above.  However, as
stated, the Company's lender is currently extending credit under
the Credit Facility while the terms of the revised credit
facility are being negotiated.  The Company has no assurances,
however, that the lender will continue to do so.  Furthermore,
following September 1, 2002, the Company will be in default in  
the repayment of an installment of principal due under the
Credit Facility, which may cause the lender to withhold
additional credit.  If the lender were to refuse to extend
additional credit, the Company would be unable to continue its
operations.  At present, the Company will not have sufficient
working capital to conduct its operations unless the lender
increases the amount of borrowing availability.


IT GROUP: Court Okays Jefferson Wells' Retention as Tax Advisor
---------------------------------------------------------------
The IT Group, Inc., and its debtor-affiliates obtained the
Court's authority to employ and retain Jefferson Wells
International as their tax compliance and tax accounting advisor
in these Chapter 11 cases, nunc pro tunc to July 8, 2002.

Jefferson will mainly work on tax compliance matters where it
will assemble financial data and file the necessary:

A. income and franchise tax returns for the Debtors with the
   federal government and nearly all of the 50 state
   governments; and

B. sales and use tax and personal property tax returns in
   numerous local taxing jurisdictions.

Jefferson will be compensated for its services based on the
firm's current hourly rates, which are:

     Professional Services -- Operate Core Operations    $88.00
     Department Manager/Supervisor                        99.00
     Engagement Mgmt -- Tax & Accounting                 107.00
     Subject Matter Expenses                             192.50
(IT Group Bankruptcy News, Issue No. 16; Bankruptcy Creditors'
Service, Inc., 609/392-0900)  


J.E.M INC: Court Schedules Bankruptcy Sale for September 10
-----------------------------------------------------------
               UNITED STATES BANKRUPTCY COURT
                  DISTRICT OF CONNECTICUT
                    NEW HAVEN DIVISION

    In re:                  :
                            :      Chapter 11
    J.E.M., Inc.,           :      
                            :      Case No. 99-34910 (LMW)
            Debtor.         :  

                NOTICE OF BANKRUPTCY SALE
             SEPTEMBER 10, 2002 at 11:00 A.M.

      PLEASE TAKE NOTICE the Honorable Lorraine Murphy Well,
United States Bankruptcy Court has approved procedures for an
auction sale to be held in the 17th Floor Courtroom, Connecticut
Financial Center, 157 Church Street, New Haven, Connecticut.

      The Properties to be sold are in Meriden, Connecticut:

      a. 30,000 sq. ft., multi-story facility on 10+/- acre, a
         walking distance from central business district. Six
         independent corporate identity entrances & elevator
         banks, information tech/enterprise zone, three-level
         parking garage with 256 spaces at One King Place,
         Meriden, Connecticut;

      b. One Family Dwelling at 40 Orange Street;

      c. One Family Dwelling at 79 Bronson Street;

      d. One Family Dwelling at 85 Bronson Avenue;

      e. One Family Dwelling at 34 Queen Street;

      f. One family Swelling at 38 Queen Street; and

      g. Two Family Dwelling at 22 Queen Street.

      Please contact the Debtor's Real Estate Counsel, Ellen
Breslin, Esq. at Jaspan Schlesinger Hoffman LLP at 516-746-8000
for a copy of the Bid Package.

      Please contact Mr. Joseph L.A. Tesoriere (203) 226-5800 to
arrange for an inspection of the properties.


KEY3MEDIA GROUP: G. Andrea Botta Leaves Post as Director
--------------------------------------------------------
By letter dated August 28, 2002, G. Andrea Botta resigned as a
Director of Key3Media Group, Inc.  Mr. Botta did not give any
reasons for his resignation.

Key3Media owns and produces about 60 trade shows and conferences
for the information technology industry, including the annual
COMDEX show held in Las Vegas. In addition to the popular US
event, Key3Media puts on nearly 20 other COMDEX shows in 16
countries. (COMDEX shows account for almost 35% of sales.) Other
events include Networld+Interop, Seybold Seminars, SOFTBANK
Forums, and JavaOne. Key3Media's events draw about 1.5 million
participants each year. The company was spun off from publisher
Ziff-Davis (now part of CNET Networks) in 2000. Japan's SOFTBANK
owns about 55% of Key3Media. (hoovers)

                          *   *   *

As reported in the August 7, 2002 issue of the Troubled Company
reporter, Key3Media Group, Inc., (NYSE: KME) is undertaking a
strategic review of its operations in response to the sustained
economic downturns being experienced in the information
technology, networking and trade show industries.

In addition, the New York Stock Exchange has announced that it
will suspend trading of Key3Media Group, Inc.'s common stock
commencing on Monday, July 29, 2002 and seek to delist the
shares from the exchange. The NYSE said it was taking this
action due to the abnormally low recent selling prices of the
shares. The Company has discussed these matters with the NYSE
and has decided not to challenge the NYSE's actions. The Company
intends to apply to have its shares included in the over-the-
counter bulletin board to facilitate future trading. A new
trading symbol for the Company's shares will be announced as
soon as it is available.


KMART CORP: Wants Court Approval to Engage Encore Food Experts
--------------------------------------------------------------
Kmart Corporation's "ability to manage their business and
preserve value for their estates is dependent upon, among other
things, the development of a retail food strategy that increases
sales and profits, improves service, reduces shrink, formalizes
an advertising strategy, and improves inventory management and
support systems in the Debtors' grocery business," remarks John
Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom,
in Chicago, Illinois.  Mr. Butler says the Debtors have
determined that Encore Associates, Inc. is well suited to
assisting the Debtors in these tasks through Encore's provision
to Kmart of temporary employees to work on specific projects and
initiatives within Kmart to accomplish the above results.

It is against this backdrop that the Debtors ask Judge Sonderby
to approve the engagement of Encore, in the ordinary course of
business, to provide temporary help in the form of a team of
experienced senior food industry executives to successfully
achieve these objectives.

The Debtors engage Encore to:

(a) Develop a vision and strategy for Kmart's retail food
    business;

(b) Identify and place an interim senior executive within Kmart
    to manage the retail food business;

(c) Develop a comprehensive organizational structure for Kmart's
    retail food business;

(d) Develop a retail pricing strategy and process to support
    Kmart's retail food business;

(e) Develop recommendations and processes for improved service
    and service levels within Kmart's retail food business;

(f) Develop an improved advertising strategy;

(g) Improve the retail food businesses inventory management and
    supporting systems;

(h) Reduce shrink within the retail food business;

(i) Develop a financial reporting system for the retail food
    business at a store level;

(j) Identify and place a senior executive within Kmart to manage
    the retail food business in the long-term; and

(k) Recruit qualified candidates for employment positions at
    Kmart, as needed, under a separate agreement.

Mr. Butler tells the Court that the engagement of Encore will be
under the direct supervision of Kmart Corporation's Executive
Vice President, Strategic Planning and Business Initiatives.
Encore will provide a team of temporary services providers who
will assist in fulfilling the engagement tasks.  Encore has
recommended these persons as the Temporary Employees:

  Employee         Function
  --------         --------
  Dick King        Gen. Mdse. Manager, Food & Consumables
  Tom Demott       Project Leader
  Gary Smith       Team Leader, Vision & Strategy, Exe. Search
  David Dean       Team Leader, Mdse., Procurement & Dist.
  Robin Thomas     Team Leader, Retail Operations
  Glenn McBee      Team Leader, Pricing Strategy
  Richard Gorthy   Team Member, Dist./Contract, Service Level
  Craig McDonald   Project Manager
  Chad Sumner      Team Leader, Ad Strategy Recommendations
  Kurt Salmon      Team Leader, Inventory Mgmt & Supporting Sys

Mr. Butler assures the Court that the Temporary Employees have
extensive experience in retail grocery operations, and will be
instrumental in helping the Debtors develop a retai1 food
strategy that increases sales and profits.

Encore will not provide additional Temporary Employees to the
assignment without first consulting with the Debtors to obtain
the Debtors' agreement in writing.  Moreover, Encore will
attempt to utilize Kmart personnel to fulfill the roles and will
take steps as may be necessary to avoid duplication with Kmart's
other professionals.

The Temporary Employees billing rates are:

                Employee                Rate
                --------                ----
                Dick King         $50,000/month
                Tom Demott          3,000/day - 300/hr
                Gary Smith          5,000/day
                David Dean          3,000/day - 300/hr
                Robin Thomas        3,000/day - 300/hr
                Glenn McBee         1,200/day - 300/hr
                Richard Gorthy      1,200/day - 300/hr
                Craig MacDonald     3,000/day - 300/hr
                Chad Sumner         No cost to Kmart
                Kurt Salmon         No cost to Kmart
                Administrative        $45/hr

Estimated service fees through year-end December 31, 2002 are
$1,150,000.

The Debtors will reimburse Encore for reasonable, documented,
preauthorized travel and other business expenses incurred by the
Temporary Employees.

Mr. Butler further relates that Kmart may terminate the
Agreement immediately, at any time, without cause and without
further obligation to Encore, except payment due for services
rendered or incurred by Encore.  Either party may also terminate
the Agreement immediately upon notice to the other party in the
event the other party breaches or fails to perform any of its
obligations in any material respect or attempts to assign or
otherwise transfer its rights, obligations, or duties under the
Agreement. (Kmart Bankruptcy News, Issue No. 31; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


LERNOUT & HAUSPIE: Court Okays Dictaphone Transition Agreement
--------------------------------------------------------------
L&H NV and L&H Holdings USA Inc., obtained the Court's authority
to:

    (i) sign a Transition Services Agreement with Dictaphone
        Corporation,

   (ii) pay Dictaphone $16,250 for services rendered by
        Dictaphone personnel to L&H NV for the postpetition
        period from January 1, 2002, and June 30, 2002, and

  (iii) provide Dictaphone with an Allowed Administrative
        Claim for $5,265 against L&H Holdings for services
        rendered by Dictaphone personnel to Holdings for
        the postpetition period from January 1, 2002 to
        June 30, 2002.

Prior to Dictaphone's emergence from its Chapter 11 case, some
of its personnel provided legal and accounting services to the
L&H Debtors. Dictaphone has been reimbursed for the costs of
these services through December 31, 2002, in accordance with the
Court-approved intercompany allocation in May 2001.

Donna L. Harris, Esq., at Morris Nichols Arsht & Tunnell,
relates that Dictaphone and the L&H Debtors have negotiated the
terms of a Transition Agreement, under which Dictaphone will, as
of July 1, 2002, continue to provide certain services to the L&H
Debtors in exchange for a pre-determined fee arrangement.

The parties have also agreed that, for services rendered by
Dictaphone personnel to the L&H Debtors during the postpetition
period between January 1, 2002 and June 30, 2002, Dictaphone
will be reimbursed $16,250 by L&H NV and $5,265 by Holdings.

The pertinent terms of the Transition Services Agreement are:

(1) Services Provided to L&H NV

     Dictaphone personnel will assist L&H NV in:

        (i) the management of its United States cash account;

       (ii) facilitation of the liquidation process -- i.e.,
            development and implementation of procedures for
            distributions under the plan of liquidation,
            voting process for the liquidation plan,
            confirmation process, claims reconciliation,
            monitoring Bankruptcy Court pleadings and
            creditor settlement agreements;

      (iii) payment of professional fees; and

       (iv) preparation and filing of United States tax
            returns.

(2) Services Provided to Holdings

     Dictaphone personnel will assist Holdings as needed in:

        (i) the management of its United States cash account;

       (ii) facilitation of the liquidation process -- i.e.,
            development and implementation of procedures for
            distributions under the plan of liquidation,
            voting process for the liquidation plan,
            confirmation process, claims reconciliation,
            including review of existing work, monitoring
            Bankruptcy Court pleadings and creditor
            settlement agreements;

      (iii) payment of professional fees;

       (iv) advice regarding insurance issues; and

        (v) assistance with Blue Cross receivables.

(3) Reimbursement

     The L&H Debtors will be invoiced monthly for actual time
     incurred, plus actual out-of-pocket expenses, if any.
     The L&H Debtors will reimburse Dictaphone for fees and
     expenses charged by the Dictaphone personnel within five
     days of receiving the monthly invoice from Dictaphone.

(4) Rates

     $125 per hour for Jo-Ann Hamilton and Tim Ledwick
      $85 per hour for tax services

     These rates will be charged effective July 1, 2002.  The
     time charged for the Services rendered by Ms. Hamilton
     and Mr. Ledwick to either L&H NV or Holdings will not
     exceed 50 hours in any one month without the prior
     written approval of the L&H Debtors.

(5) Reimbursement to Dictaphone for Services from January 1
     to June 30, 2002

     Dictaphone will be reimbursed for services provided to
     the L&H Debtors between January 1, 2002 and June 30, 2002
     as:

        (i) $16,250 to be paid by L&H NV -- i.e., 5 hours per
            week for 26 weeks at the rate of $125 per hour,
            and

       (ii) $5,265 from Holdings -- 1 hour per week for 26
            weeks at the rate of $125 per hour, plus
            compensation for certain tax-related services
            and expenses incurred -- to be deemed an Allowed
            Administrative Claim.

(6) Treatment of Dictaphone Fees and Expenses Under Holdings
     Plan

     The fees and expenses payable by Holdings to Dictaphone
     will be deemed to be Allowed Administrative Claims under
     the Holdings Plan.  Allowed Administrative Claims,
     including those held by Dictaphone, are proposed to be
     paid in whole or in part with common stock of ScanSoft.

(7) Term

     Dictaphone personnel will continue to provide these
     services to the L&H Debtors until the terms of the
     respective liquidating plans of L&H NV and Holdings are
     implemented and the distributions process under each
     plan is complete.

The L&H Debtors, who are in the process of liquidating their
businesses and winding up their operations, have determined that
their own personnel are unable to perform these services.  
According to Ms. Harris, these services are indispensable to the
successful liquidation of the L&H Debtors through their
respective Chapter 11 liquidating plans.  Dictaphone personnel
have performed similar services for the L&H Debtors since the
Petition Date.

Furthermore, Ms. Harris explains, the retention of third-party
professionals to provide these services at this stage of the L&H
Debtors' Chapter 11 cases would be extremely inefficient and
more expensive than obtaining the services from Dictaphone under
the Transition Agreement.  Not only are they intimately familiar
with the affairs of the L&H Debtors and the functioning of their
Chapter 11 cases, Ms. Harris says, the Dictaphone personnel have
been performing similar services for a considerable period of
time and can continue to do so in an efficient and cost-
effective manner. (L&H/Dictaphone Bankruptcy News, Issue No. 29;
Bankruptcy Creditors' Service, Inc., 609/392-0900)  


LODGIAN INC: Amended Plan's Classification & Treatment of Claims
----------------------------------------------------------------
Lodgian, Inc., and its debtor-affiliates' Disclosure Statement
divides the claims against, and equity interests in, each of the
Debtors into separate classes, states the estimated aggregate
amount of the claims or equity interests in each class and
summarizes the treatment of each class.  The claim amounts and
recoveries represent the Debtors' best estimate of those values
given the information available at this time.  About 4,299
proofs of claim were filed in the Debtors' Chapter 11 case as of
the bar date.  As of August 21, 2002, the Debtors have completed
a preliminary review of these claims, including reconciliation
with their own books and records.  However, due to number and
amount of claims in dispute, as well as the risk of error
inherent in reconciling a large number of proofs of claim with
the books and records of 83 different entities, it is possible
that the actual amount of allowed claims may differ materially
from the Debtors' estimates. The Debtors continue to seek to
resolve disputed claims and further refine this analysis.

The estimation of recoveries makes these assumptions:

-- The CCA Debtors, the Roundabout Debtor and their respective
   hotel properties are not included in the consolidated
   business and operations of the Reorganized Group from and
   after the Effective Date;

-- The consolidated enterprise value of the Reorganized Group is
   $630,000,000;

-- The amount of allowed secured claims against the Debtors is
   $382,700,000;

-- The amount of allowed unsecured claims against the Debtors is
   $27,000,000;

-- The initial new common stock has a value as of the Effective
   Date of $85,000,000; and

-- The warrants have a value as of the Effective Date of
   $8,000,000.

The Debtors' Disclosure Statement groups all prepetition Claims
and Equity Interests into classes and explains how those claims
and interests will be treated:

Class        Designation                     Treatment
-----  ---------------------------  ----------------------------
      DIP Credit Agreement Claims  Payment of all amounts
                                   outstanding, and cash
                                   collateralization or
                                   replacement of outstanding
                                   letters of Credit.

      Other Admin. Exp. Claims     Paid in full.

      Priority Tax Claims          Paid in full with interest
                                   over a period not to exceed 6
                                   years from the date of
                                   assessment of tax.

1A    BO Agreements                Repaid in full.

1B    BO/Rockbridge Agreements     Repaid in full.

1C    CCA Agreements               Receive distribution
                                   consistent with any
                                   resolutions, by agreement of
                                   the parties or order of the
                                   Court, of all disputes
                                   between the Debtors and CCA.

1D    Chase Agreements             Reinstated on original terms,
                                   except $492,000 arrearages in
                                   principal payments is
                                   rescheduled for final payment
                                   at maturity.

1E    Column/Criimi Mae Agreements Reinstated on original terms,
                                   except $132,000 arrearages in
                                   principal payments is
                                   rescheduled for final payment
                                   at maturity.

1F    DLJ/Column Agreements        Reinstated on original terms,
                                   except $388,000 arrearages in
                                   principal payments is
                                   rescheduled for final payment
                                   at maturity.

1G    DLJ/Column/Criimi Mae        Reinstated on original terms,
      Agreements                   except $2,157,000 arrearages
                                   in principal payments is
                                   rescheduled for final payment
                                   at maturity.

1H    DDL Kinser Agreements        2 year note; principal equal
                                   to Allowed Claim with
                                   interest rate of prime plus
                                   2%; amortization prior to
                                   maturity; secured by existing
                                   collateral.

1I    First Union Agreements       Reinstated on original terms,
                                   except $48,000 arrearages in
                                   principal payments is
                                   rescheduled for final payment
                                   at maturity.

1J    GMAC Agreements              Repaid in full or reinstated
                                   on original terms, except
                                   $103,000 arrearages in
                                   principal payments is
                                   rescheduled for final payment
                                   at maturity.

1K    GMAC-Orix Agreements         Under discussion.

1L    Lehman/Criimi Mae Agreements Reinstated on original terms,
                                   except $471,000 arrearages in
                                   principal payments is
                                   rescheduled for final payment
                                   at maturity to be extended to
                                   3 years.

1M    MSSF Prepetition Credit      Repaid in full.
      Facility

1N    Roundabout Agreements        Surrender of underlying hotel
                                   property.  Terms under
                                   discussion.

1O    Wells Fargo Agreements       Under discussion.

1P    Miscellaneous                As provided in the Plan or
                                   agreed with the holder.

2     Priority Non-Tax Claims      Paid in full.

3     General Unsecured Claims     Holders will receive Plan
                                   Securities consisting of:

                                   * $8,405,000 of New Preferred
                                     Stock; and

                                   * 5.69% of Initial New Common
                                     Stock.

4     Senior Subordinated Notes    Holders will receive:
      Claims
                                   * $116,595,000 of New
                                     Preferred Stock; and

                                   * 78.94% of Initial New
                                     Common Stock.

5     Convenience Claims           Paid in full.

6     CCA Guarantee Claims         Receive distribution
                                   consistent with any
                                   resolutions, by agreement of
                                   the parties or order of the
                                   Court, of all disputes
                                   between the Debtors and CCA.

7     CRESTS Claims                Claimants will receive:

                                   * 12.40% of Initial New
                                     Common Stock;

                                   * 83.33% of A Warrants; and

                                   * 24.39% of B Warrants.

8    Old Lodgian Common Stock      Claimants will receive:

                                   * 2.97% of New Common Stock;

                                   * 16.67% of A Warrants; and

                                   * 75.61% of B Warrants.

9    Debtor Owned Old Subsidiary   The legal equitable and
     Equity Interests              contractual rights of holders
                                   of Allowed Equity Interests
                                   will remain unaltered.

10A  Columbus Hospitality Assoc.   No Distribution.
     Servico Centre Associates

10B  Melbourne Hospitality Assoc.  0.05% of New Subsidiary
                                   Equity.

     New Orleans Airport Motel     13.32% of New Subsidiary
                                   Equity.

11   Subordinated Claims           No distribution.
(Lodgian Bankruptcy News, Issue No. 15; Bankruptcy Creditors'
Service, Inc., 609/392-0900)  


MAIL-WELL: Envelope Unit Names J. Santimore as East Region VP
-------------------------------------------------------------
Mail-Well Envelope announced that Jeff Santimore has been
promoted from Pricing Team Leader to Regional Vice President.  
In his new position, he will have responsibility for all
operations in Mail-Well Envelope's East Region, including
leading the growth of the company in the Northeastern and
Southeastern United States.

"Jeff's passion for the envelope business manifested itself in
his success in the multiple roles he held in the industry for
the past 26 years.  Jeff was also invaluable in a leadership
role in Mail-Well's recent strategic planning process," said Bob
Hart, CEO of Mail-Well Envelope.  Santimore, a second-generation
envelope veteran, started in the business at 17 as a material
handler.  He worked his way through the ranks prior to joining
Mail-Well, including stints as operator, machine adjuster, shift
supervisor and purchasing manager.

Santimore has served Mail-Well since 1991 in a variety of
positions. He was one of the company's leading Sales Executives
prior to assuming his most recent assignment as Strategic
Initiative Pricing Team Leader.  He holds a Bachelor of Science
degree in Business Systems Management from Johnson & Wales
University in Providence, Rhode Island.

Mail-Well Envelope is a division of Mail-Well, Inc. (NYSE: MWL).
Headquartered in Englewood, Colo., Mail-Well specializes in
three multi-billion dollar market segments in the highly
fragmented printing industry: commercial printing, envelopes and
printed office products.  These three divisions achieved sales
of $1.9 billion in 2001.  Mail-Well divested its label division
in May 2002.  Mail-Well has over 11,000 employees and more than
80 printing facilities and numerous sales offices throughout
North America.

                         *    *    *

As reported in Troubled Company Reporter's July 22, 2002
edition, Mail-Well completed the refinancing of its bank debt by
securing a new $300 million senior secured credit facility. Part
of the availability of this new credit facility was used to pay
off existing bank debt. As a result of this refinancing, the
Company wrote-off deferred financing fees as an extraordinary
loss of $5.4 million, net of income taxes. As a result of the
foregoing, the Company's net loss was $34.3 million for the
quarter compared to a net loss of $92.5 million during the
second quarter of 2001. On a year to date basis, the Company's
net loss was $56.0 million compared to a net loss of $88.9
million for the comparable period of 2001.

Also, in a previous report, Standard & Poor's lowered its
corporate credit rating  on Mail-Well Inc., to double-'B'-minus
from double-'B', its subordinated debt rating to single-'B' from
single-'B'-plus, and its senior secured and senior unsecured
debt ratings to double-'B'-minus from double-'B'.

At the same time, Standard & Poor's assigned its double-'B'-
minus rating to Mail-Well I Corp.'s $300 million senior secured
revolving bank facility due 2005, which is guaranteed by its
holding company parent, Mail-Well Inc., and all non-borrower
subsidiaries.

The outlook is negative.


MARINER POST-ACUTE: Squabbling with PI Claimants about Sanctions
----------------------------------------------------------------
Certain Personal Injuries Claimants who took part in mediations
pursuant to the Alternative Dispute Resolution Procedures
ask the Court to impose sanctions on Mariner Post-Acute Network,
Inc., Debtors for attending mediations in bad faith.

MPAN asks the Court to continue the hearing on the Motion for
Sanctions filed by Jacqueline Coody, Leona Carter, and Doris
Tenant.  The Debtors' Counsel, Mark D. Collins, Esq. at
Richards, Layton & Finger has been trying to reach the
Claimants' counsel but has failed to do so.  Mr. Collins
explains to the Court that Ness Motley PA, the Claimants'
counsel, has not returned six telephone calls over a period of
six weeks.  Mr. Collins believes that this matter can be
resolved out of Court if Ness Motley will return his phone
calls.

Mr. Collins indicates that if a hearing is, in fact, necessary
at some point in time, the Debtors intend to present multiple
witnesses who'll testify the ADR mediations were conducted in
good faith. (Mariner Bankruptcy News, Issue No. 32; Bankruptcy
Creditors' Service, Inc., 609/392-0900)  


MIDWAY AIRLINES: Pilots Reaches Tentative Pact with Management
--------------------------------------------------------------
Pilot union negotiators representing the cockpit crews of Midway
Airlines on Sunday reached a tentative contract agreement with
management, which is planning to resume the airline's operations
as a US Airways Express carrier.

"We're eagerly anticipating the resumption of Midway Airlines'
operations and are pleased to have reached a comprehensive
agreement that will allow our company to get back on its feet
and provide a decent livelihood for our pilots and their
families," said Capt. Mark W. Stewart, the union custodian for
the Midway Airlines pilots' unit of the Air Line Pilots
Association, International. "Our crews will be happy to get back
to work doing what they do best: flying our valued customers to
their destinations, always striving to uphold the highest
standards of safety and efficiency," Stewart said.

The pilots' agreement will become effective pending final
approval from ALPA's president, Capt. Duane Woerth, and Stewart.

The carrier, based in Raleigh-Durham, fell on hard times last
summer, filing for bankruptcy protection Aug. 13, 2001 and
ceasing operations Sept. 12 in the aftermath of the terrorist
attacks that devastated the airline industry. A government grant
temporarily resuscitated the airline, allowing it to operate
from Dec. 19, 2001 to July 17, 2002 before again suspending
operations.

Under a letter of intent to provide code-share feed for US
Airways, the carrier is planning to resume operations as early
as Nov. 1 using a fleet of CL-65 small jets. The carrier's plans
call for the fleet to grow to approximately 18 jets by April
2003.

Founded in 1931, ALPA is the world's oldest and largest pilot
union, representing more than 66,000 cockpit crewmembers at 43
airlines in the U.S. and Canada. Visit the ALPA Web site at
http://www.alpa.org


NAPSTER: Court Fixes September 30 Bar Date for Proofs of Claim
--------------------------------------------------------------
By the Bar Date Order of the U.S. Bankruptcy Court for the
District of Delaware, the General Bar Date has been fixed as
September 30, 2002, by which creditors of Napster, Inc., and its
debtor-affiliates must file their proofs of claims or be forever
barred from asserting their claims.

A signed original proof of claim, together with supporting
documentation, must be received by the Debtors' Claims and
Noticing Agent no later than 5:00 p.m. on Sept. 30.  Claims must
be addressed to:

      Logan & Company, Inc.
      546 Valley Road
      Upper Montclair, New Jersey 07043
      Attention: Napster Claims Processing Department
    
Proofs of claims need not be filed if they are on account of:

      (i) Claims properly filed against one or more of the
          Debtors;

     (ii) Claims not listed as contingent, disputed and
          unliquidated;

    (iii) Claims previously allowed by or paid pursuant to an
          Order of the Court;

     (iv) Debtors that hold Claims against one or more of the
          other Debtors.              

                      Alternative Bar Dates

Governmental Unit Bar Date

All governmental units holding claims against the Debtors
(whether secured, unsecured priority or unsecured nonpriority)
are required to file proofs of claim by December 6, 2002.    
      
Rejection Bar Date

Any entity whose claims arise out of the court-approved
rejection of an executory contract or an unexpired lease must
file their proofs of claims before or at the later of:

      (a) the General Bar Date; or

      (b) 30 days after the date of the order authorizing the
          rejection of the applicable contract or lease.

Amended Schedule Bar Date

Claimants affected by any amendment to the Debtors' Schedules of
Assets and Liabilities must file their proofs of claim or amend
any previously filed proofs of claim on or before the later of:

     (a) the General Bar Date; or

     (b) 30 days after the date that notice of the applicable
         amendment is served on the claimant.

Napster, Inc., filed for Chapter 11 protection on June 6, 2002.
Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A.
and Richard M. Cieri, Esq., Michelle Morgan Harner, Esq., and S.
Todd Brown, Esq., at Jones, Day, Reavis & Pogue represent the
Debtors in their liquidating efforts.


NOTIFY TECHNOLOGY: Fails to Meet Nasdaq Listing Requirements
------------------------------------------------------------
Notify Technology Corporation (Nasdaq: NTFY), has received a
Nasdaq Staff Determination on August 27, 2002, indicating that
the Company has failed to comply with the minimum net tangible
asset requirement and the minimum bid price requirement for
continued listing on the Nasdaq SmallCap Market as set forth in
Marketplace rules 4310(C)(2)(B) and 4310(C)(4), respectively,
and, therefore, its securities are subject to delisting from the
Nasdaq SmallCap Market.  The Company has the option to appeal
the Staff's determination pursuant to Marketplace Rule 4800
Series but does not anticipate doing so.  Accordingly, the
Company's Common Stock, Units and Class A Warrants will be
delisted from the Nasdaq SmallCap Market as of the opening of
business on September 4, 2002.

The Company expects its Common Stock (NTFY), Units (NTFYU) and
Class A warrants (NTFYW) will trade on the Over-the-Counter
Bulletin Board (OTC BB) under the same symbols following their
delisting from The Nasdaq SmallCap Market.

Founded in 1994, Notify Technology Corporation, is an innovative
communications company offering wireless and wireline products
and services. Notify Technology is quickly becoming a leading
consumer, SOHO, and Enterprise environment provider of mobile
wireless software and services for Over-The-Air synchronization
and management of email and PIM (contacts, calendar, tasks)
independent of device and network. Notify's wireline solution
provides consumer voice mail notification to customers of CLECs
in multiple states. Notify sells its products through wireline
carriers and wireless carriers. The company is headquartered in
San Jose, Calif. For more information, visit
http://www.notifycorp.comor contact 408-777-7920.


OMEGA HEALTHCARE: Fitch Upgrades Preferred Rating to C from D
-------------------------------------------------------------
Fitch Ratings has affirmed the 'B-' rating for Omega Healthcare
Investors, Inc.'s outstanding $100 million 6.95% senior
unsecured notes due August 1, 2007 and removed it from Rating
Watch Negative. The Rating Outlook is Negative. Fitch has also
upgraded the preferred stock rating to 'C' from 'D' on Omega's
outstanding $57.5 million series A 9.25% cumulative preferred
stock, $50 million series B 8.625% cumulative preferred stock
and $105 million series C 10% cumulative preferred stock.

The affirmation and removal of the Rating Watch Negative follows
the repayment of the $100 million June 15, 2002 6.95% senior
debt obligation and reflects positively on Omega's improving
liquidity. However, the Negative Outlook reflects Fitch's
concern over the quality of the unencumbered asset base, which
is not fully stabilized. While Omega benefits from a portfolio
of geographically diverse skilled nursing facilities, no
development risk, a clear business strategy, a markedly improved
liquidity profile, and a manageable use of debt leverage at 36%
debt to undepreciated book capital, from 43% year over year, the
unsecured debt rating is hinged principally upon Omega's
unencumbered skilled nursing assets, which, by definition, have
no prior claims on them. These free and clear assets, while
potentially representing reasonable recovery protection in a
liquidation scenario, do not currently cover their contractual
rents.

Positively, Fitch notes that, despite being recently hampered by
bankruptcy defaults by many of its tenant operators and
liquidity issues from a short debt maturity schedule, Omega has
generated sufficient liquidity to make timely repayments on its
June 15, 2002 $100 million 6.95% senior debt obligations through
asset sales, dividend suspension, and cash flow retention, which
has prompted Fitch to remove the Rating Watch Negative status.
Fitch also notes that with the majority of skilled nursing
providers in a post-bankruptcy phase, better-stabilized
operations industry wide, and more favorable Medicare and
Medicaid reimbursements, the skilled nursing industry is poised
to produce stronger operating results. The fact that the
majority of Omega's tenant leases have been reaffirmed or
repriced is also a credit positive, since more stable revenues
have been achieved. Nevertheless, Omega is still working through
some tenant and balance sheet difficulties and Fitch's Negative
Outlook on the senior debt issues until the unencumbered pool of
assets stabilize.

Improvement in the unencumbered asset base from their current
occupancy levels to a stabilized industry average in the low to
mid-80% range, which would allow these assets to provide
sufficient coverage to meet their rent obligations independently
and without subsidies from the other assets in the master lease
pools that have prior claims on them, will be material factors
in future outlook and rating considerations. While the
stabilization of these assets may take some time, Fitch
recognizes that the new management team has been committed to
repaying its debt obligations, and has the industry experience
and commitment to stabilize operations and accretively expand
Omega's skilled nursing portfolio on a stand alone basis.

The 'C' preferred rating, which has been upgraded from 'D',
reflects clarification of Fitch policy regarding the treatment
of ratings of securities where companies have elected to utilize
deferral features provided in the instrument. In this case, it
is the single 'C' rating of a cumulative preferred issue that is
being accrued by an entity due to suspended dividends, but has
not filed for bankruptcy protection. Fitch believes that there
is an increased likelihood that Omega will begin to pay down the
approximate $35 million of accrued preferred dividends as of
August 15, 2002, that have been generated by the $57.5 million
series A cumulative preferred stock, the $50 million series B
cumulative preferred stock, and the $105 million 10% convertible
series C preferred stock since dividends were suspended in
February 2001. Fitch expects that Omega's continued operations
will provide sufficient cash flow to begin its necessary
cumulative dividend repayments within the next several quarters,
which Omega will soon have to resume in order to maintain its
real estate investment trust (REIT) status. Omega's operations
have recently returned to profitability and its forward losses
are gradually diminishing. Prior to the commencement of a common
dividend, all cumulative preferred dividends need to be paid out
first. Should Omega begin to repay its unpaid cumulative
dividends, the preferred rating would likely move to 'CC,'
absent more substantial improvements in Omega's operation
performance and funding profile.

Omega Healthcare Investors, Inc., is an $832 million (total
market capitalization) equity health care REIT investing in and
providing financing to the long-term care industry. At June 30,
2002, Omega owned or held mortgages on 233 skilled nursing and
assisted living facilities with approximately 24,400 beds
located in 28 states and operated by 36 independent healthcare
operating companies.


PACIFIC GAS: Court Blesses Confirmation Discovery Protocol
----------------------------------------------------------
At the California Public Utilities Commission's behest, the
Bankruptcy Court approved a Discovery Protocol to be used in
connection with confirmation proceedings concerning the
competing Plans proposed by the Pacific Gas and Electric Company
Proponents and the CPUC.

These Discovery Procedures are available only to the Proponents,
the Committee, the United States Trustee and to persons or
entities who timely file and serve objections to confirmation of
one or both of the Plans.

                     A. Deposition Protocol

1. Counsel for the Committee, Milbank, Tweed, Hadley & McCloy,
   LLP is responsible for coordinating the scheduling of all
   percipient and expert depositions.

2. Each Party is to notify Committee Counsel and the other
   Proponents of the date, time and location the witnesses it
   intends to call at trial will be available for deposition.

3. The examination of a non-expert deponent will begin with one
   seven-hour day of questioning by the Proponent seeking the
   examination, unless otherwise agreed by the Proponent that is
   not affiliated with the deponent.  If the examination is only
   sought by a Non-Proponent, that Non-Proponent will begin the
   questioning. Only Parties and their agents, or anticipated
   expert witnesses and their agents, may attend depositions.

4. Normally, the Court expects that non-expert depositions will
   conclude within two seven-hour days per witness, but further
   time is permitted when necessary.

5. All Parties should attempt to coordinate their questioning of
   deponents, and should avoid using multiple examiners to cover
   similar subject matter.

              B. Disclosure Of Non-Expert Witnesses

The Proponents are to:

* No later than August 15, 2002, file and serve on all other
  Parties a disclosure identifying the name, title and business
  address of each non-expert witness the Party intends to call
  at trial, including a brief summary of the subject matter of
  each witness' expected testimony;

* No later than August 22, 2002, provide information concerning
  the availability for deposition of those non-expert witnesses
  identified on August 15, 2002;

* provide availability for deposition of Proponents' non-expert
  witnesses identified after August 15, 2002 at the same time
  they are identified;

* on or before September 16, 2002, file and serve a supplemental
  designation of non-expert witnesses whom the Proponent in good
  faith determined after August 15, 2002 that it intends to call
  at trial.

Non-Proponents shall:

* no later than September 16, 2002, file and serve on all other
  Parties a disclosure identifying the name, title and business
  address of each non-expert withess the Party intends to call
  at trial, including a brief summary of the subject matter of
  such witness' expected testimony;

* on or before October 28, 2002, file and serve a supplemental
  designation of non-expert witnesses whom the Non-proponent in
  good faith determined after September 16, 2002 that it intends
  to call at trial;

* no later than September 23, 2002, provide information
  concerning the availability for deposition of those non-expert
  witnesses identified on September 16, 2002;

* provide availability for deposition of Non-proponents' non-
  expert witnesses identified after September 16, 2002 at the
  same time they are identified.

                  C. Expert Witness Disclosures

With respect to the CPUC's Plan:

1. Disclosures on experts to offer direct expert testimony at
   the confirmation hearing will be served by the CPUC or any
   other Party on all other Parties no later than September 20,
   2002, together with a statement indicating the date, time and
   location the expert will be available for deposition;

2. Disclosures on expert testimony to rebut or contradict the
   CPUC expert testimony shall be served by the PG&E Plan
   Proponents and any other Party on all other Parties no later
   than October 4, 2002, together with a statement indicating
   the date, time and location the experts will be available for
   deposition;

3. The CPUC shall serve on all other Parties no later than
   October 14, 2002 disclosures regarding the testimony of any
   expert witness it intends to offer solely to rebut or
   contradict the testimony of a non-rebuttal expert disclosed,
   together with a statement indicating the date, time and
   location the expert will be available for deposition.

With respect to the PG&E Proponents' Plan:

a. Disclosures on direct expert testimony in support of the PG&E
   Plan at the confirmation hearing shall be served by the PG&E
   Plan Proponents and any other Party on all other Parties no
   later than October 18, 2002, together with a statement
   indicating the date, time and location the expert will be
   available for deposition;

b. Disclosures on expert testimony to rebut or contradict the
   testimony or otherwise in opposition to confirmation of the
   PG&E Plan shall be served by the CPUC and any other Party on
   all other Parties no later than October 29, 2002, together
   with a statement indicating the date, time and location such
   expert will be available for deposition;

c. The PG&E Plan Proponents shall serve on all other Parties no
   later than November 8, 2002, the disclosures regarding the
   testimony of any expert witness they intend to offer solely
   to rebut or contradict the testimony of a non-rebuttal
   expert, together with a statement indicating the date, time
   and location such expert will be available for deposition.

                 D. Other Discovery Mechanisms

1. Demands for Inspection.

   A Party may propound demands for inspection of documents on
   any other Party; but a Party shall not be required to produce
   documents previously made available to the Parties in a data
   room or document repository. Any Party may elect to produce
   documents by making them available for inspection and copying
   at a data room or document repository in San Francisco,
   California.

2. Subpoenas for Documents.

   Subject to the limitations under the Bankruptcy Rules, any
   Party may subpoena documents from a person or entity that is
   not a Party.

3. Other Written Discovery.

   (a) The total number of requests and Subparts to requests for
       admission that may be propounded by a Party on any other
       Party shall not exceed 25.

   (b) The total number of written interrogatories and Subparts
       to interrogatories that may be propounded by a Party on
       any other Party shall not exceed 25.

4. Service of Written Discovery.

   Subject to any limitations set forth in an applicable
   protective order, all written discovery requests propounded
   by Parties as well as any written responses shall be served
   on all Parties at the time such request or response is made.

5. Written Discovery Cut Off.

   No Party may propound written discovery after October 8,
   2002.

                      E. Scope Of Discovery

Proponents, the Committee and the U.S. Trustee may seek
discovery regarding any matter, not privileged, that is relevant
to the Court's consideration of the PG&E Plan or the CPUC Plan.
Each Objector to either the PG&E Plan or the CPUC Plan may seek
discovery relevant to any matter, not privileged, that is raised
in its written objections. This provision shall be liberally
construed in favor of a broad scope of discovery.

                   F. Interim Protective Order

On or before August 26, 2002, the Proponents shall serve on all
other Parties their proposed form(s) of protective order
governing the use and dissemination of information produced or
furnished in the discovery action. The Court will hold a hearing
on September 4, 2002 at 1:30 p.m. to consider the entry of the
protective order.

Until a protective order is entered or until September 26, 2002,
whichever is earlier, all documents, written discovery
responses, and deposition testimony produced in response to a
discovery request related to plan confirmation proceedings and
which has been designated Confidential by a Party shall be used
by Parties receiving the Confidential Confirmation Discovery
Information solely for the purpose of conducting litigation of
the plan confirmation proceedings and related discovery in
PG&E's Chapter 11 case.

No Party may disseminate Confidential Confirmation Discovery
Information any other person who is not also a Party, except to
consultants, expert witnesses or other agents that the
disseminating Party has retained for purposes of litigation of
the plan confirmation proceedings and related discovery in
PG&E's Chapter 11 case and the recipient of the information
should have received a copy of the Discovery Protocol and
executed a copy of Agreement to be Bound by it.

                    G. Discovery Disputes

If any dispute arises concerning discovery, the Parties shall
try first to resolve such dispute in good faith on an informal
basis. If the dispute cannot be resolved in this way, the Party
seeking to obtain the discovery may request the Court to
schedule a telephonic conference concerning the dispute. A Party
requesting this conference should contact Virginia Belli, Judge
Montali's Courtroom Deputy (415-268-23 23), to obtain a date and
time.  Any dispute arising between October 4 and October 18,
2002 will be handled by Chief Judge Edward Jellen.  A Party
requesting a telephonic conference during that time period
should contact Raenna Abreu, Judge Jellen's Judicial Assistant
(510-879-3525).

Procedures for telephonic conferences are published on the
Court's Web site at http://www.canb.uscourts.gov click on  
Pacific Gas and Electric Company Chapter 11 Case, then
Instructions for Telephonic Appearances.

             H. Modifications Of Discovery Procedures

Any Party seeking relief from or modification to any provision
of the Discovery Protocol Order shall try first to obtain
agreement from the Parties who would be affected by the relief
or modification. If an agreement cannot be reached in good faith
on an informal basis, the Party seeking the relief or
modification may bring the matter to the Court's attention by
contacting the Courtroom Deputy.

                   I. Further Status Conference

The Court will convene a further status conference on Wednesday,
September 25, 2002 at 9:30 a.m. to discuss procedures for the
confirmation trial.

The confirmation trial shall commence on Tuesday, November 12,
2002. (Pacific Gas Bankruptcy News, Issue No. 43; Bankruptcy
Creditors' Service, Inc., 609/392-0900)    


PUBLIC SERVICE: Offering "Participating Units" to Repay Debts
-------------------------------------------------------------
Public Service Enterprise Group plans to offer $400 million of
participating units.

The offering of participating units will consist of 8 million
corporate units, each with a stated amount of $50.  The offering
will increase by up to 9.2 million corporate units if the
underwriters exercise their overallotment in full.

Each unit will include a purchase contract under which the buyer
will agree to purchase shares of PSEG's common stock on November
16, 2005.  Each unit will also contain a trust preferred
security due 2007 with a liquidation amount of $50.

PSEG will use the net proceeds from the transaction to repay
short-term indebtedness and to make additional equity
investments in certain of its subsidiaries.

The company has appointed Merrill Lynch & Co., and Morgan
Stanley as the joint book-running managers for the offering.

A registration statement related to this offering has been filed
with the Securities and Exchange Commission and has become
effective.  This news release does not constitute an offer to
sell or a solicitation of an offer to buy the securities, nor
shall there be any sale of these securities in any state or
jurisdiction in which such an offer, solicitation or sale would
be unlawful prior to registration or qualification under the
securities law of any such jurisdiction.  Each offering may be
made only by means of a prospectus and the related prospectus
supplement, copies of which may be obtained from Merrill Lynch
and Morgan Stanley.

At June 30, 2002, Public Service Enterprise Group's balance
sheet shows that its total current liabilities exceeded its
total current assets by about $2 billion.


RACHEL'S GOURMET: June 30 Balance Sheet Upside-Down by $3 Mill.
---------------------------------------------------------------
Rachel's Gourmet Snacks Inc., manufactures, markets and
distributes "Rachel's Made From the Heart" gourmet potato chips
(snack foods). The potato chips are sold by independent
distributors and Company sales personnel to grocery and
convenience stores, restaurants, and other retail and
institutional accounts. The Company also manufactures potato
chips for others under private labels.

The Company's recent condensed consolidated financial statements
were prepared in contemplation of the Company as a going
concern. The Company has incurred net losses of $1,939,225,
$1,732,884 and $1,751,288 for calendar years 2000 and 2001 and
the six months ended June 30, 2002, respectively, and  as of
June 30, 2002, has a working capital deficiency of $3,306,273,
an accumulated deficit of $16,705,435 and a stockholders'
deficiency of $3,091,079. The Company also has a material
uncertainty regarding a shareholder dispute. These conditions,
among others, raise substantial doubt about the Company's
ability to continue as a going concern.

Triple-C-Inc., a Canadian subsidiary of the Company, had a
revolving line of credit facility with Congress Financial
Corporation. Under the terms of the line of credit agreement,
borrowings were due on demand and were collateralized by
substantially all Triple-C-Inc.'s assets. The line of credit had
requirements relating to tangible net worth, additional debt,
and dividends, among other requirements. Over the six months
ended July 31, 2002, Congress reduced availability under the
line of credit severely limiting Triple-C-Inc.'s access to vital
working capital. On August 1, 2002, the Company sought an order
appointing Mintz & Partners Limited as interim receiver of
Triple-C-Inc. On the same day, Triple-C-Inc. made an assignment
pursuant to the provisions of the Bankruptcy and Insolvency Act
(Canada), naming Mintz as trustee. Also on August 1, 2002,
subject to the making of an Approval and Vesting Order, Mintz
agreed to sell to Johnvince Foods, Ltd., and Johnvince agreed to
buy from Mintz, all of Mintz's and Triple-C-Inc.'s right, title,
and interest in substantially all Triple-C-Inc.'s assets. On
August 8, 2002, the Supreme Court of Ontario appointed Mintz as
the interim receiver and approved the sale of the assets by
issuance of an Approval and Vesting Order. The purchase price
for the assets was not sufficient to satisfy the unsecured debts
of Triple-C-Inc.

The Company has a dispute relating to options held by certain
stockholders. The stockholders believe the Company is required
to repurchase their 608,000 shares for $3.221 per share
($1,958,368) with five year 6% promissory notes. The Company
believes the stockholders did not exercise their options by the
October 1, 1999, specified date in the manner required. The
stockholders assert that they did properly exercise their
options and the Company's dispute is without merit. It is
possible that either party may resort to judicial resolution of
this matter. While the Company is confident that it did not
receive actual or constructive notice of exercise of the
stockholders' right to require the Company to purchase all or
part of its shares, it is a possibility that litigation with the
stockholders will result in an adverse judgement against the
Company, which may have a material adverse effect on the Company
and its operations, and may jeopardize the Company's ability to
continue as a going concern. The terms of the notes require the
principal to be paid in full five years after the exercise of
the options with semi-annual interest payments. The outcome at
this time cannot be determined.


RMF COMMERCIAL: Fitch Junks $7.3 Million Class F P-T Certs.
-----------------------------------------------------------
Fitch Ratings downgrades RMF Commercial Mortgage Pass-Through
Certificates, series 1995-1's $10.2 million class E to 'BB-'
from 'BB' and $7.3 million class F to 'CCC' from 'B-'. In
addition, Fitch affirms the following classes: $24.3 million
class A and interest-only classes I-2 & I-3 at 'AAA', $8.8
million class B at 'AA+', $8.8 million class C at 'A+' and $7.3
million class D at 'BBB'. Fitch does not rate the class G or
class H certificates. The rating actions follow Fitch's review
of the transaction, which closed in December 1995.

Classes E and F were downgraded to reflect the year-to-year
decline in the credit quality of the transaction. The
transaction's weighted-average debt service coverage ratio for
the trailing twelve months ended March 31, 2002 declined to 1.26
times from 1.48x during the last annual review. For the TTMs
ended March 31, 2002, 41% of the transaction had a DSCR below
1.0x, compared to 34% during the last review. Additionally, one
pool of six cross-collateralized and cross-defaulted loans, the
EHA pool, accounting for 21% of the transaction, is currently
90-days delinquent and in special servicing. While the special
servicer has a tangible workout plan that will include, among
other things, receipt of approximately $3 million from the
borrower, Mariner Post Acute, and the assumption of the loans by
a to-be-determined operator, it is still unclear when and on
what terms the loans will be assumed.

Currently, the certificates are collateralized by 20 fixed-rate
mortgage loans secured by 22 health care properties. As of the
July 29, 2002 distribution report, the transaction's certificate
balance declined by approximately 50% to $72.5 million from
$146.1 million at issuance. This reduction is due to scheduled
amortization as well as prepayments. Since closing, 16 loans
have paid off. The remaining properties are located in 10
states, with significant concentration in Tennessee (21% by loan
balance), Illinois (17%), and Pennsylvania (12%).

The reasons for the collateral's weak year-to-year operating
performance varied. Higher operating costs, heavy competition,
weak demand, and regulatory compliance issues were some of the
recurring explanations for weak operating performance.
Currently, four loans are in special servicing, the
aforementioned EHA pool, the Regency Nursing and Rehab loan, the
Indigo Manor loan, and the IHCP pool.

The EHA pool has a current balance of $15.1 million (21%) and
has been in special servicing since February 2000, shortly after
the borrower/operator, Mariner Post Acute (Mariner), filed for
Chapter 11 bankruptcy protection. A reorganization plan was
agreed upon in March 2002. Under the plan, Mariner is to convey
the six facilities to the trust and make a payment of $3
million. The special servicer has a business plan in place and
is negotiating the possible assumption of the EHA loans. For the
TTMs ended March 31, 2002, the EHA pool had a WA DSCR of 0.54x.
The Regency Nursing and Rehab loan has a current balance of $4.1
million (6%) and has been in special servicing since February
2000, shortly after the borrower/operator, Regency Health
Services, filed for Chapter 11 bankruptcy protection. The
special servicer indicated that it expects this loan to be
resolved shortly, at this time no substantial losses are
expected. For the TTMs ended March 31, 2002, the Regency Nursing
and Rehab loan had a DSCR of 1.47x. The Indigo Manor loan has a
current balance of $6.4 million (9%) and has been in special
servicing since February 2000. This loan is in default due to
the borrower's failure to pay real estate and payroll taxes for
1999 and 2000. A new operator was put in place in September
2001. The new operator has worked out a payment plan to make up
for past due taxes. For the TTMs ended March 31, 2002, the
Indigo Manor loan had a DSCR of 0.63x. The IHCP pool has a
current balance of $4 million (5%) and has been in special
servicing since May 2002. This is a two-loan/two-property pool.
One of the properties has been experiencing declining occupancy
and this has translated into poor operating results. The second
property is performing strongly. The special servicer expects a
successful resolution of this pool given the crossed nature of
the pool and the strength of one of the properties. For the TTMs
ended March 31, 2002, the IHCP pool had a WA DSCR of 0.86x.

Fitch's rating actions recognized the improvement in credit
enhancement levels resulting from amortization and prepayments.
Despite the improvements to credit enhancement levels, the
transaction's credit quality has deteriorated from a WA DSCR
standpoint. Also, the EHA pool is large enough that any loss of
value could have a marked effect on the transaction's non-
investment grade classes.

Fitch will continue to monitor the transaction as part of its
ongoing surveillance.


SAFETY-KLEEN: Wants to Expand Connolly Bove's Litigation Role
-------------------------------------------------------------
Safety-Kleen Corporation and its debtor-affiliates ask the Court
to expand the employment scope of Connolly Bove Lodge & Hutz
LLP, as Special Litigation Counsel, to assist the Debtors with
the investigation and possible prosecution of the Third-Party
Claims.

Since its retention, CBL&H has represented the Debtors in
connection with the PwC Claims and the commencement and
prosecution of the Avoidance Actions.

CBL&H has not and will not perform services typically performed
by the Debtors' general bankruptcy counsel, Skadden, Arps,
Slate, Meagher & Flom LLP.  Specifically, CBL&H has not and will
not perform services directly relating to the Debtors' general
restructuring efforts or other matters involving the conduct of
the Debtors' chapter 11 cases.

The Debtors seek to further expand the scope of CBL&H's
employment and retention due to the firm's experience and
knowledge in the field of creditors' rights and business
reorganizations under chapter 11 of the Bankruptcy Code, its
experience and knowledge in commercial litigation, its proximity
to the Court, its ability to respond quickly to emergency
hearings in this Court, and its current working relationship
with Debtors as their special litigation counsel.

The Debtors explain that this additional retention is necessary
because of potential conflicts of interest perceived by Skadden
relating to the Third-Party Claims.

Compensation will continue to be payable to CBL&H on an hourly
basis, plus reimbursement of actual and necessary expenses
incurred.  These attorneys and paralegals will be the primary
professionals at CBL&H involved in conducting the Discovery
Actions:

             Craig B. Young, Esq.            $325
             Jeffrey C. Wisler, Esq.          325
             Gregory Weinig, Esq.             185
             Michelle McMahon, Esq.           185
             Gwendolyn Lacy, Esq.             150
             Marc Phillips, paralegal         110
             Sandy McCollum, paralegal       $110

Other attorneys and paralegals may from time to time serve the
Debtors in connection with the defense of PwC claims,
prosecution of the Avoidance Actions, and conducting of the
Discovery Actions. Additionally, the Debtors may call upon the
specialized knowledge and skills of other attorneys at CBL&H to
provide related services, as necessary.

On behalf of CBL&H, Mr. Wisler reports that as part of its
diverse practice, CBL&H appears in cases, proceedings and
transactions involving many different professionals, including
attorneys, accountants, financial consultants and investment
bankers, some of which may be or represent claimants and
parties-in-interest in the Debtors' cases.  Based on current
knowledge of the professionals involved, CBL&H does not
currently represent or have a relationship with any attorneys,
accountants, financial consultants or investment bankers that
would be adverse to the Debtors, their creditors or equity
security holders, except that CBL&H may in the past have acted,
or may presently be acting, as counsel or co-counsel with some
of those attorneys, accountants, financial consultants or
investment bankers in matters wholly unrelated to this case.
(Safety-Kleen Bankruptcy News, Issue No. 44; Bankruptcy
Creditors' Service, Inc., 609/392-0900)    


SCIENT INC: Creditors Meeting to Convene on September 20, 2002
--------------------------------------------------------------
A meeting of creditors and equity security holders, pursuant to
Section 341 of the Bankruptcy Code, is scheduled for September
20, 2002, at 2:00 p.m. New York City time to be held at the
Office of the United States Trustee, Southern District of New
York, 80 Broad Street, 2nd Floor, New York 10004.

All creditors are invited, but not required, to attend. This
meeting of creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the Debtors' financial affairs and
operations that would be of interest to the general body of
creditors.

Scient, headquartered in New York with offices in London and key
regions throughout the United States, is a leading consulting
and professional services company focused on transforming
clients' businesses through the creation of multi-channel
experiences that strengthen connections among people, businesses
and communities. The Debtors filed for Chapter 11 protection
with the U.S. Bankruptcy Court for the Southern District of New
York. Linda Worton Jackson, Esq., at Greenberg Traurig, P.A.,
Miami, Florida and Howard J. Berman, Esq., at Green Traurig, New
York, represent the Debtors in their restructuring efforts.


TERAFORCE TECH.: Reaches Accord to Restructure Outstanding Debt
---------------------------------------------------------------
TeraForce Technology Corporation (OTCBB:TERA) has reached
agreement in principle for a restructuring of its outstanding
debt and infusion of new equity. Closing of the transactions is
subject to completion of definitive documentation and certain
other conditions.

Under the arrangements, currently outstanding debt amounting to
$3,000,000 will be exchanged for approximately 25 million shares
of common stock and warrants for the purchase of an additional
600,000 shares of common stock. The warrants will have an
exercise price of $0.12 per share. In addition, the Company will
amend currently outstanding warrants for the purchase of
1,650,000 shares of common stock to provide for an exercise
price of $0.12 per share.

The balance of the Company's outstanding debt, which amounts to
approximately $3,600,000, will be amended to provide for an
ultimate maturity in 2004, with certain reductions during 2003.
This debt will be outstanding pursuant to revolving bank credit
facilities and will be guaranteed by a private investor.
Pursuant to the restructuring and extension of the debt
facilities, the Company will amend currently outstanding
warrants for the purchase of 960,000 shares of common stock to
provide for an exercise price of $0.12 per share. The Company
will also issue new warrants for the purchase of 960,000 shares
of common stock at an exercise price of $0.12 per share.

Concurrent with the debt restructuring, the Company expects to
sell additional shares of common stock that will result in
proceeds to the Company of approximately $2,000,000. Closing of
the debt restructuring transactions is contingent upon the
completion of this additional equity transaction. The Company
expects to close all of these transactions within the next 30
days. The Company's bank credit facilities are being extended 30
days to allow for completion of these transactions.

Based in Richardson, Texas, TeraForce Technology Corporation
(OTCBB:TERA) designs, develops, produces and sells high-density
embedded computing platforms and digital signal processing
products, primarily for applications in the defense electronics
industry. TeraForce's primary operating unit is DNA Computing
Solutions, Inc., http://www.dnacomputingsolutions.com


TICE TECHNOLOGY: Coulter & Justus Expresses Going Concern Doubt
---------------------------------------------------------------
Tice Technology, Inc., is a Delaware corporation that was formed
in 1996 to acquire and hold the issued and outstanding stock of
Tice Engineering and Sales, Inc. During 1997, Tice acquired all
of the issued and outstanding stock of TES in exchange for
5,450,220 common shares and 750,000 Class B common shares. Upon
completion of the exchange, TES became a wholly owned subsidiary
of Tice.

Effective January 1, 2001, Tice purchased substantially all of
the assets of MidSouth Sign Company, LLC in exchange for
5,000,000 of its common shares and the assumption of certain
liabilities. Also effective on January 1, 2001, Tice purchased
substantially all of the assets of The LandOak Company, LLC in
exchange for 8,000,000 of its common shares and the assumption
of certain liabilities. Tice formed two subsidiaries, MidSouth
Sign Company, Inc. and LandOak Company, Inc., in which to
operate the businesses purchased.

LandOak, of which Tice is the sole shareholder, is primarily in
the automobile and light truck rental, leasing, financing and
sales business. LandOak had a loss of $2,486,919 for fiscal year
2002. Management explored a variety of opportunities to expand
LandOak's rental operations and determined that LandOak cannot
effectively compete in its market. The lack of financing has
limited LandOak's ability to acquire additional vehicles further
impeding LandOak's ability to compete. Management concluded that
the rental, leasing and financing operations at LandOak could
not create sufficient cash flow to justify its existence.
Management has attempted to locate a buyer for the rental
operations but has been unsuccessful to date.

The primary business of MidSouth, a wholly owned subsidiary of
Tice, is the design, fabrication, installation and service of
metal and vinyl signage, primarily for customers in the
southeastern United States. In addition, MidSouth operates a
division called National Survey Associates that has been
providing sign survey, project management and other services to
customers on a national basis since 1995.

MidSouth had a loss of $1,239,176 for fiscal year 2002. As part
of the proposed transaction with A-G Tech, Tice has agreed to
divest itself of MidSouth. Effective July 1, 2002, MidSouth sold
its installation business and certain related assets to a former
MidSouth employee for $139,500 payable monthly through June 1,
2003. The asset purchase agreement included a supply agreement
whereby MidSouth granted the purchaser the exclusive right to
supply installation services for twelve months. The purchaser
also agreed not to compete with MidSouth for business in certain
areas or hire MidSouth's employees which are not listed in the
agreement as available to purchaser.

National Services Associates, Inc., a Tennessee corporation
owned by the current President of Tice, Charles West, and an
unrelated person, purchased the NSA division and the related
assets effective August 1, 2002. The consideration was
forgiveness of approximately $275,000 owed by MidSouth to the
purchasers and the purchaser's assumption of the liabilities
related to the NSA division. Pat Martin, a director of Tice,
negotiated the transaction on behalf of Tice as it involves a
purchase by the existing President of Tice. MidSouth agreed not
to compete with the purchaser in the area of national signage
surveys and not to solicit customers listed in the agreement for
twenty-four months following the closing. In consideration of
the agreement, the purchaser agreed to pay MidSouth a fee of 5%
of receipts from the customers listed on the exhibit. MidSouth
also agreed not to offer employment to NSA employees for twelve
months.

With respect to the remaining MidSouth business (design,
fabrication and service), the employee who purchased the
installation business and related assets in July 2002 has agreed
to acquire the stock of MidSouth, provided that Tice pays off
the MidSouth secured debt to two financial institutions prior to
the closing with A-G Tech and provided that Tice advances
$250,000 of working capital to MidSouth. Payment of these
amounts will satisfy amounts owed by Tice, TES and LandOak to
MidSouth and the excess of such payments to MidSouth will be a
loan from Tice to MidSouth which will be secured by MidSouth's
assets. The loan is not expected to exceed $300,000 and will
bear interest at 6%. Payments will be made over two years based
on five year amortization with all remaining principal and
interest due at the end of twenty-four months. Tice will be
prohibited from competing with MidSouth or hiring any MidSouth
employees for five years from the date of closing. Tice has the
option for $1 for ten years to acquire up to 10% of the
outstanding stock of MidSouth. MidSouth must notify Tice at
least thirty days in advance of any sale of the stock or
substantially all assets of MidSouth.

As this sale (and the sale of the stock of LandOak) is a sale of
substantially all assets of Tice, Tice's shareholders must
approve the sale. A meeting is being set and a proxy prepared.
Shareholders holding in excess of 51% of the issued and
outstanding common shares of Tice have agreed to vote their
shares in favor of the sale.

Tice continues to be interested in acquisition. Since its
inception, Tice has financed its operations through a
combination of cash flow from operations, bank borrowings,
borrowings from individuals and the sale of common stock.
Capital requirements have arisen primarily in connection with
operating losses and purchases of fixed and intangible assets.
Tice (through its wholly owned subsidiary, TES) has historically
made significant expenditures each year for research and
development and marketing of new technology, particularly in
fiscal years 2001 and 2002, related to the FS-2000 felling
machine and the dual-sew lockstitch machine.  In connection with
the acquisitions of MidSouth and LandOak, Tice has incurred
operating losses and has significantly increased the amount of
its liabilities, increasing the need for capital to meet debt
obligations, working capital requirements and investment in
property and equipment. In addition, Tice will have additional
capital needs as it pursues other acquisitions, including the
acquisition of A-G Tech for which Tice has entered into a Term
Sheet outlining proposed terms of the acquisition. Tice's cash
flow was affected by the MidSouth and LandOak businesses during
only the fourth quarter of fiscal year 2001 and the entirety of
fiscal year 2002.

On July 3, 2002, the Company entered into a Term Sheet
describing the proposed terms for Tice to acquire the assets of
A-G Tech. If a final definitive agreement is reached, Tice will
acquire substantially all the assets and contract rights of A-G
Tech, including the commercialization and market rights held by
A-G Tech to the patented Atmospheric Plasma technology developed
at the University of Tennessee Research Center and privatized by
A-G Tech. As a condition to the acquisition, Tice must raise
$6.5 million of new capital through a private placement. Tice
must also meet several other conditions for the successful
consummation of the transaction including, but not limited to,
obtaining shareholder approval for the increase in the number of
authorized Tice common shares, divestiture of Tice's current
subsidiaries, LandOak Company, Inc. and MidSouth Sign Company,
Inc., conversion of 500,000 of the 750,000 Class B common shares
to common shares, and the issuance of 500,000 new Class B common
shares to the principals of A-G Tech thereby effecting a change
in control of Tice.

If successfully consummated, this major shift in business
strategy by Tice will also result in an anticipated change in
the Company's name. Closing for this transaction is anticipated
by September 30, 2002, but no later than December 31, 2002,
unless otherwise agreed by the parties.

Notwithstanding these anticipated business developments the
Company's independent auditors, Coulter & Justus, P.C., of
Knoxville, Tennessee, have stated, in their July 25, 2002
Auditors Report: "[T]he Company has suffered recurring losses
from operations and has a net capital deficiency, which raises
substantial doubt about its ability to continue as a going
concern."


TIDEL TECHNOLOGIES: Renews Senior Credit Line with JP Morgan
------------------------------------------------------------
Tidel Technologies, Inc., (Nasdaq: ATMS) has renewed its senior
revolving credit facility with JP Morgan Chase until December
30, 2002.  The other terms of the facility remained unchanged.

Tidel Technologies, Inc., is a manufacturer of automated teller
machines and cash security equipment designed for specialty
retail marketers.  To date, Tidel has sold more than 40,000
retail ATMs and 150,000 retail cash controllers in the U.S. and
36 other countries.  More information about the company and its
products may be found on the company's Web site at
http://www.tidel.com  

Tidel's June 30, 2002 balance sheet shows that its total current
liabilities exceeds its total current assets by about $4.4
million.


UAL CORP: S&P Keeping Watch on Junk Corporate Credit Rating
-----------------------------------------------------------
SUAL Corp. (CCC/Watch Dev/--), parent of United Air Lines Inc.
(CCC/Watch Dev/--), announced a new CEO, Glenn F. Tilton,
formerly Vice Chairman of ChevronTexaco Corp., and interim
Chairman of Dynegy Inc.  Standard & Poor's Ratings Services said
its ratings for both entities remain on CreditWatch with
developing implications.

"Tilton's appointment as successor to interim CEO John W.
Creighton, Jr., after a long and difficult executive search,
should help reinvigorate negotiations between the company and
its unions regarding cost concessions to avoid a bankruptcy
filing," said Standard & Poor's credit analyst Philip Baggaley.

"The previous September 16 deadline for resolution of labor
talks may be extended now, but Tilton still has a very difficult
task in persuading employees to accept major pay cuts, and the
company faces mid-November debt payments that UAL has said it
cannot meet," the analyst continued. Tilton was elected with the
support of the pilots and machinists unions, which have Board
seats and can together block an executive choice (though the
previous two CEOs were also chosen with the initial support of
those two unions). The President of UAL and the Chief Operating
Officer of United resigned with the change in management, adding
to the executive turnover.

Previous UAL management on August 28 presented its unions with
proposed labor cost concessions of $1.5 billion annually over
six years as part of a plan to save $2.5 billion per year.
Management said it hoped to file a revised application with the
Air Transportation Stabilization Board on September 16 for a
$1.8 billion federal loan guaranty if it could reach agreement
with unions, suppliers and other parties to participate in cost
cutting. All three major United unions sharply criticized those
proposals.

Standard & Poor's ratings could be lowered if progress toward a
financial restructuring does not materialize, or if such a plan
includes defaulting on debt instruments; alternatively, ratings
could be raised if such a plan is concluded successfully.


UNIFORET: June Quarter Balance Sheet Upside Down by C$90 Million
----------------------------------------------------------------
Uniforet Inc., reports net earnings of C$9.0 million for its
second quarter ended June 30, 2002, compared to a net loss of
C$47.5 million for the corresponding period in 2001.

Second quarter results included a non-recurring pre-tax gain of
C$3.2 million for the recovery of countervailing duties and
antidumping duties paid on lumber shipments made during fiscal
2001 to the U.S. following the decision of the U.S.
International Trade Commission, announced on May 16, 2002, to
forgive all countervailing duties and antidumping duties on
Canadian lumber shipments into the United States prior to May 5,
2002.

Following the adoption in 2001 of the new accounting policy
concerning foreign currency translation on long-term assets and
liabilities denominated in foreign currencies, the Company
recorded a pre-tax gain of C$10.8 million in the second quarter
of 2002. Results for the second quarter of 2001 included a non-
recurring charge of C$52.0 million resulting from the loss of
ownership of the 11.125% US senior notes of its wholly-owned
subsidiary, 3735061 Canada Inc.  Excluding non-recurring items
and the effect of foreign exchange fluctuations on long-term
assets and liabilities denominated in foreign currencies and the
related income tax, the net loss for the second quarter ended
June 30, 2002, amounted to C$0.3 million, compared to a net loss
of C$3.8 million for the same period last year.

For the first half of 2002, the net earnings were C$8.6 million,
compared to a net loss of C$59.1 million for the same period
last year. Excluding non-recurring items and the effect of
foreign exchange fluctuations on long-term assets and
liabilities denominated in foreign currencies and the related
income tax, the net loss for the first half of 2002 amounted to
C$0.5 million, compared to a net loss of C$9.8 million for the
same period last year.

The accompanying consolidated financial statements for the
quarters ended June 30, 2002 and 2001, have been compiled on the
same basis as for the consolidated financial statements for the
year ended December 31, 2000, using the going-concern
assumption. In addition, these consolidated financial
statements do not include any value adjustment or
reclassification of assets, liabilities or operating results
that may be appropriate given recent events and pursuant to the
implementation or the non-implementation of a potential plan of
arrangement with creditors or any other reorganization plan.

                          SALES

Sales for the second quarter of 2002 decreased by 8.7% to C$44.3
million, compared to those of the same quarter of last year.
However, lumber sales improved by 8.8% to C$44.3 million thanks
to a 10.6% increase in the net selling price of lumber and a
6.9% increase in shipments. Pulp sector generated no sales in
the second quarter of 2002, as compared to C$7.8 million for the
same period last year.

For the six months ended June 30, 2002, sales amounted to C$83.4
million, down by 9.9% compared to the same period of 2001,
mainly as a result of pulp mill down time since February 16,
2001; pulp sales amounted to $21.4 million during the first half
of 2001. Lumber sales increased by 17.1% to C$83.4 million due
to a 23.9% increase in the net selling price of lumber while
shipments decreased slightly by 2.7%. An increase in woodchip
shipments also contributed to the upturn, even if selling prices
were down 8.9% compared to those of the same period last year.

                     OPERATING INCOME

Operating income for the second quarter of 2002 was C$5.1
million compared to C$0.4 million for the same quarter last
year. Operating income from the lumber sector amounted to C$6.3
million compared to C$4.8 million for the corresponding period
last year, the result of improved net selling prices, increased
shipments, and comparable unit costs of goods sold. Following
the pulp mill closure, the operating loss from the pulp sector
amounted to C$1.2 million for the second quarter of 2002,
compared to C$4.4 million for the same quarter last year.

Operating income for the first half of 2002 was C$10.7 million,
compared to an operating loss of C$1.3 million for the same
period last year. Operating income from the lumber sector
increased to C$13.0 million, compared to C$4.1 million for the
corresponding period last year as a result of an improved net
selling price for lumber and of a greater number of shipments,
while unit costs of goods sold increased by 7.5% owing to higher
fibre utilization ratio. Operating loss from the pulp sector
amounted to C$2.3 million for the first half of 2002, compared
to C$5.4 million for the same period last year.

                     CASH POSITION

Operations generated C$21.0 million during the first quarter of
2002, mainly due to a seasonal decrease in log inventories,
compared to C$35.2 million for the corresponding period of 2001.
Net repayments on long-term debt were C$0.7 million, compared to
C$0.1 million for the same period last year. Additions to fixed
assets amounted to C$0.7 million, compared to C$0.5 million for
the corresponding period of 2001.

For the first half of 2002 operations generated C$10.5 million,
compared to C$25.4 million for the corresponding period of 2001,
when the Company was cashing in accounts receivable and
inventories following the pulp mill closure in February 2001.
Net repayments on long-term debt were C$0.8 million, compared
to C$0.4 million for the same period of the last year. Additions
to fixed assets amounted to C$1.2 million, compared to C$1.0
million for the corresponding period of 2001.

As at June 30, 2002, the Company had cash and cash equivalents
of C$12.6 million and a working capital deficiency of C$21.6
million for a ratio of 0.71:1, compared to a ratio of 0.63:1 as
at December 31, 2001. Also, at the same date, the balance sheet
shows a total shareholders' equity deficit of about C$90
million.

                    OVERVIEW OF OPERATIONS

Operations for the quarter unfolded in a context of uncertainty
with respect to imposition of countervailing duties on Canadian
lumber shipments to the U.S. For reasons of administrative
procedure, no duty was applied to shipments carried out between
April 22 and May 21, 2002. Beginning May 22, 2002, however, all
lumber shipments to the U.S. were affected by countervailing
duties of 27.2%, which resulted in a substantial drop in demand
and in the net selling prices obtained. The two sawmills
operated normally throughout the second quarter, while the pulp
mill at Port-Cartier remained closed.

                          OUTLOOK

The Company is still awaiting judgment in its court case with
some of the US note holders, who object, among other things, to
the composition of that class of creditors. The court's decision
will determine the Company's strategy in terms of the conclusion
of a plan of arrangement with its creditors. Lumber markets are
expected to remain volatile over the next months, as demand and
prices decreased at the end of the second quarter. Some
producers have announced downtime at their sawmills in order to
balance production with demand.

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


US AIRWAYS: McGuireWoods Serving as Local Bankruptcy Counsel
------------------------------------------------------------
US Airways Group seeks the Court's authority to employ
McGuireWoods of McLean, Virginia, as restructuring and
bankruptcy co-counsel.  Prior to the Petition Date, the Debtors
sought McGuireWoods' services for the preparation of the Chapter
11 proceedings.

Lawrence E. Rifken, Esq., at McGuireWoods, tells the Court that
the Debtors and the firm are parties to an engagement agreement
dated July 18, 2002.   According to Mr. Rifken, McGuireWoods'
continued representation is critical to the Debtors' efforts to
restructure their business because McGuireWoods has achieved a
high level of familiarity with its business, legal and financial
affairs.  McGuireWoods also has experience with the local
practice before the Eastern District of Virginia Bankruptcy
Court with respect to large chapter 11 cases.  For example,
McGuireWoods served as debtor's counsel in In re Best Products
Co, Inc., In re Heilig Meyers Co., et al., In re AMF Bowling
Worldwide, Inc., et al., and In re Motient Corporation, et al.

In addition, the Debtors selected McGuireWoods as attorneys
because of the firm's experience and knowledge in the field of
debtors' and creditors' rights.

Because of the extensive legal services that will be required,
the Debtors desire to employ McGuireWoods under a general
retainer.  Skadden, Arps, Slate, Meagher & Flom has been
retained as lead counsel in these proceedings.  Both firms have
assured Debtors that they will use their best efforts to avoid
duplication of services.

McGuireWoods is expected to:

    (a) advise the Debtors with on their powers and
        duties as debtors and debtors-in-possession in the
        continued management and operation of their business
        and properties;

    (b) attend meetings and negotiate with representatives of
        creditors and other parties in interest and advise and
        consult on the conduct of the case, including all of
        the legal and administrative requirements of operating
        in Chapter 11;

    (c) advise the Debtors with any contemplated sales of
        assets or business combinations, including negotiation
        of asset, stock purchase, merger or joint venture
        agreements, formulate and implement bidding procedures,
        evaluate competing offers, draft appropriate corporate
        documents with respect to the proposed sales, and
        counsel the Debtors with the closing of such sales;

    (d) advise the Debtors with postpetition financing and cash
        collateral arrangements, and negotiate and draft
        related documents, provide advice and counsel with r
        respect to prepetition financing arrangements, and
        provide advice to the Debtors in connection with the
        emergence financing and capital structure, and
        negotiate and draft related documents relating;

    (e) advise the Debtors on matters relating to the
        evaluation of the assumption, rejection or assignment
        of unexpired leases and executory contracts;

    (f) provide advice to the Debtors with respect to legal
        issues arising in or relating to the Debtors' ordinary
        course of business including attendance at senior
        management meetings, meetings with the Debtors'
        financial and turnaround advisors and meetings of the
        board of directors, and advice on employee, workers'
        compensation, employee benefits, labor, tax,
        environmental, banking, insurance, securities,
        corporate, business operation, contracts, joint
        ventures, real property, press/public affairs and
        regulatory matters and advise the Debtors with respect
        to continuing disclosure and reporting obligations, if
        any, under securities laws;

    (g) take all necessary action to protect and preserve the
        Debtors' estates, including the prosecution of actions
        on their behalf, the defense of any actions commenced
        against those estates, negotiations concerning all
        litigation in which the Debtors may be involved and
        objections to claims filed against the estates;

    (h) prepare, on behalf of the Debtors, all motions,
        applications, answers, orders, reports and papers
        necessary to the administration of the estates;

    (i) negotiate and prepare on the Debtors' behalf plan(s) of
        reorganization, disclosure statement(s) and all related
        agreements and documents and take any necessary
        action on behalf of the Debtors to obtain confirmation
        of such plan(s);

    (j) attend meetings with third parties and participate in
        negotiations with respect to these matters;

    (k) appear before this Court, any appellate courts, and the
        U.S. Trustee, and protect the interests of the Debtors'
        estates before such courts and the U.S. Trustee; and

    (l) perform all other necessary legal services and provide
        all other necessary legal advice to the Debtors in
        connection with these Chapter 11 cases.

Mr. Rifken asserts that the members, counsel and associates of
McGuireWoods:

    -- do not have any connection with any of the Debtors, their
       affiliates, their creditors, the U.S. Trustee, any person
       employed in the Office of the U.S. Trustee, or any other
       party-in-interest, or their respective attorneys and
       accountants, and

    -- are "disinterested persons," as that term is defined in
       Section 101(14) of the Bankruptcy Code.

According to Mr. Rifken, McGuireWoods previously rendered legal
services to the Debtors for which it was compensated.  Certain
McGuireWoods attorneys may own common stock of US Airways Group,
either directly or indirectly.  McGuireWoods attorneys may also
hold US Air common stock in managed accounts over which they
have no control.  In addition, many McGuireWoods attorneys are
participants -- with open balances -- in the Debtors' Dividend
Miles.

The Engagement Agreement provided for a $200,000 retainer
program, which the Debtors have funded, for professional
services rendered previously and in the future.  According to
McGuireWoods' books and records, for the period July 11, 2002 to
August 11, 2002, the total amount of services billed to the
Debtors in connection with contingency planning was $128,816.10
with an additional $4,581.15 in costs and expenses.
McGuireWoods' books and records also indicate that on August 9,
2002, the firm received $133,397.25 from the Debtors, exclusive
of the Retainer.  McGuireWoods' total fees were $143,129.00,
less a 10% discount of $14,312.90, which brought the total
adjusted fees to $128,816.10.

Pursuant to the Engagement Agreement, McGuireWoods provides the
Debtors with periodic statements for services rendered and costs
and expenses incurred.  During the reorganization cases, the
periodic statements will constitute a request for an interim
payment.  For professional services, McGuireWoods' fees are
based on its standard hourly rates, which are periodically
adjusted. The firm will provide professional services to the
Debtors under its standard rate schedules and, therefore,
McGuireWoods will not be seeking to be separately compensated
for staff, clerical and resource charges.  McGuireWoods' hourly
rates range from:

         $270 - 575      partners
          155 - 325      associates
          100 - 190      legal assistants and support staff.

McGuireWoods has agreed to give the Debtors a 10% discount on
all of the Firm's fees.  This discount does not apply to costs
and expenses incurred by McGuireWoods.  The hourly rates are
subject to periodic increases in the normal course of
McGuireWoods' business, often due to the increased experience of
a particular professional.

Mr. Rifken relates that the firm intends to apply to the Court
for allowance of compensation for professional services rendered
and reimbursement of charges and disbursements incurred.  It is
McGuireWoods' policy to charge its clients in all areas of
practice for all include photocopying, witness fees, travel
expenses, secretarial and other overtime expenses, filing and
recording fees, long distance telephone calls, postage, express
mail and messenger charges, computerized legal research charges
and other computer services, expenses for working meals and
telecopier charges. (US Airways Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


U.S. STEEL: Appoints Szymanski as Gen. Manager, Service Centers
---------------------------------------------------------------
Thomas J. Usher chairman, CEO and president of United States
Steel Corporation (NYSE: X), announced the appointment of
Stephen A. Szymanski to the position of general manager-service
centers, electrical, agricultural and industrial equipment.  The
appointment is effective September 1.

In this position, based in Chicago, Szymanski will be
responsible for both marketing and sales to U. S. Steel's
service center, electrical, agricultural and industrial
equipment customers.  He succeeds Joseph R. Scherrbaum, Jr. who
has been appointed vice president-commercial for U. S. Steel
Kosice in the Slovak Republic.  Szymanski will report to J.
James Kutka, vice president - commercial for sheet products.

Szymanski began his career with U. S. Steel in 1974 and held
various sales positions in Chicago and Milwaukee.  In 1981, he
became a sales representative for the company's central region
and in 1983, moved into marketing when he was named product
manager for heavy products.  Szymanski was promoted to manager-
sales for the Midwest region in 1988 with responsibility for
plate and structural products and in 1992 was named district
sales manager for the Chicago area.  In 1997, he was promoted to
his most recent position, manager-sales and service for the
Midwest region.

Szymanski holds a bachelor's degree in engineering management
from the University of Missouri in Rolla, a master's degree in
management from Northwestern University Kellogg Graduate School
of Management in Evanston, Ill. and a master's degree in
business management from Marquette University in Milwaukee.

He has been an executive member of the metals industry committee
for the Boy Scouts of Chicago for the past seven years and
chairman for two years.

For more information on U. S. Steel, visit its Web site at
http://www.ussteel.com

                         *    *    *

As reported in Troubled Company Reporter's August 12, 2002
edition, Fitch Ratings affirmed the senior unsecured long-term
ratings of U.S. Steel at 'BB' and assigned a 'BB+' rating to the
company's senior secured revolver. The Rating Outlook is Stable.
Since the beginning of the year, the prices of hot-rolled and
cold rolled steel sheet have risen dramatically and with them
U.S. Steel's profits. On shipment increases of 619 thousand tons
and price realizations of $12/ton more, U.S. Steel has turned an
operating loss of $61 million in the first quarter of 2002 into
an operating profit of $47 million in the second quarter. Price
increases have been announced effective in August and September;
the company's order book is extended into October; and the
weaker dollar in concert with 30% disputed steel tariffs should
temper future imports. U.S. Steel's seven domestic furnaces are
operating at near capacity, and the company is projecting a
profit for the year. Liquidity is strong following the company's
mid-May stock offering.

U.S. Steel will likely somehow figure into the politically
encouraged consolidation going on in the steel industry
(Nucor/Trico/Birmingham and Corus/CSN). Recent discussions have
included a potential combination with National Steel, and U.S.
Steel is continuing discussions with third parties. The company
purchased U.S. Steel Kosice (Slovak Republic) in November 2000.
Any substantive change in the business profile of U.S. Steel
could impact the company's ratings.


WHEELING-PITTSBURGH: Wants to Maintain Exclusivity Until Dec. 23
----------------------------------------------------------------
With the ink scarcely dry on the Agreed Order extending
Wheeling-Pittsburgh Steel Corp., and its debtor-affiliates'
exclusive periods for a seventh time, the Debtors ask the Court
for another 91-day extension.

Specifically, Wheeling-Pittsburgh seeks an extension of:

    (i) the exclusive period to file a plan of
        reorganization to December 23, 2002; and

   (ii) the exclusive period to solicit acceptances
        of that plan to  February 21, 2003.

Scott N. Opincar, Esq., at Calfee Halter & Griswold LLP, relates
that since the Petition Date, the Debtors have dealt with a
multitude of complex supply, employee and contract issues that
typically arise in large and complicated Chapter 11 cases.  
Simultaneously, the Debtors have been stabilizing operations and
working towards the ultimate goal of constructing a plan of
reorganization by:

    (a) working diligently to determine whether any third
        parties have an interest in acquiring all or a part
        of their facilities; and

    (b) investigating thoroughly various possible
        reconfigurations of the business that would support
        continued operation as a stand alone business.

The Debtors continue to investigate a number of possible options
for the reorganization of their businesses and have kept the
Official Committees apprised of these options.  Recently, the
Debtors have retained an additional advisor -- RBC Dain Rauscher
-- to assist them in arranging financing to support a stand-
alone plan of reorganization, and have also agreed with the
Official Noteholders' Committee to retain an additional advisor
to pursue possible sale opportunities.  The Debtors have also
negotiated substantial wage and other concessions from their
unions, salaried workers and numerous suppliers, and have taken
other cost-cutting measures.  These steps are part of the
Debtors' continuing efforts to eliminate ongoing operating
losses and to support the Debtors' continued business until the
Debtors may file a plan of reorganization and emerge from
bankruptcy.

In addition, the Debtors are involved in "serious, substantial
negotiations with their creditors."  The Debtors are preparing
to file shortly for a government-guaranteed loan under the
Emergency Steel Loan Guaranty Act to provide exit financing for
a plan of reorganization.

Although they have made significant progress, the Debtors
require additional time to stabilize their operations and to
work out the details of a plan of reorganization with all
affected constituents. In addition, a termination of the
Debtors' exclusivity periods is a triggering event under the
Modified Labor Agreement that the Debtors negotiated with the
United Steel Workers of America, AFL-CIO-CLC, which would
entitle the USWA to terminate that agreement and the many cost-
saving concessions in it.  It is in the best interests of the
Debtors and their estates to avoid that risk and to continue the
exclusivity periods without interruption.

Based on these arguments, the Debtors contend that the requested
extensions are appropriate. (Wheeling-Pittsburgh Bankruptcy
News, Issue No. 26; Bankruptcy Creditors' Service, Inc.,
609/392-0900)  


WORLDCOM INC: Court Grants Various Utilities Adequate Assurance
---------------------------------------------------------------
Sharon L. Levine, Esq., at Lowenstein Sandler P.C., in Roseland,
New Jersey, informs the Court that prior to the Petition Date,
AT&T provides telecommunications and related services to the
Debtors.  As of the Petition Date, Worldcom Inc., and its
debtor-affiliates owed AT&T $53,000,0001 for the Services.

Specifically, Ms. Levine relates that AT&T provides wholesale
and retail local and long-distance voice and data service and
toll free directory assistance with an average run rate of
$13,784,503.89 per month.  In addition, AT&T provides switched
access services to the Debtors with an average run rate of
$2,780,786 per month.  AT&T also receives per call compensation
in connection with AT&T payphones in public and military markets
with an average run rate of $220,000 per month.  Finally AT&T
provides collocation and related services to the Debtors with an
average run rate of $2,439,960.34 per month.  The total average
monthly run rate for the AT&T Services that AT&T provides to the
Debtors is $19,225,249.  AT&T also purchases switched access
services from the Debtors.  The average run rate of the switched
access services that AT&T purchases from the Debtors is
$6,100,000 per month.

Ms. Levine contends that the Motion and proposed order fail to
provide AT&T anything more than what is already provided to any
other vendor of postpetition goods or services.  "The proposed
order could easily be construed as requiring AT&T to provide
services to the Debtors without protections," Ms. Levine says.
When goods or services are provided to a debtor-in-possession in
the postpetition period, the Debtors are obligated to pay for
those goods and services if the Debtors want the vendor to
continue supplying the goods or services.  Neither the
Bankruptcy Code nor case law require vendors to continue to
provide goods or services to a debtor-in-possession on a
continuous basis if the debtor-in-possession does not does not
timely pay for the goods and services.  Thus, the Debtors'
promises that they will make timely payment of undisputed
amounts are an assurance of nothing. To the contrary, Ms. Levine
says, it is nothing more than an acknowledgment that the Debtors
are obligated to follow the law.

Balancing AT&T's need for protection from unreasonable risk of
nonpayment with the Debtors' need to maintain liquidity, weighs
in favor of granting AT&T additional guarantees of future
payment.  Ms. Levine asserts that a security deposit equal to
three months of anticipated AT&T services or a requirement that
the Debtors' prepay AT&T's monthly invoices will resolve AT&T's
potential exposure to the risk of nonpayment without threatening
the Debtors' liquidity.  The Debtors' liquidity would not be
adversely affected if they were required to post a deposit or
prepay monthly invoices, Ms. Levine contends.

Thus, AT&T asks the Court to direct the Debtors to post a
security deposit equal to three months of anticipated AT&T
Services totaling $57,675,747 and prepay AT&T's monthly
invoices, subject to the Debtors' right to subsequently dispute
any actual charges.  To the extent that the Debtors dispute any
charges for AT&T Services, AT&T wants the Debtors to implement a
procedure by which disputes are resolved in an expedited manner.  
Furthermore, in the event the Debtors default on any of their
postpetition obligations to AT&T, AT&T seeks the Court's
authority to suspend or terminate all services rendered by AT&T
to the Debtors, unless the Debtors cure the default immediately.  
In addition, AT&T seeks the Court's permission to enter into a
postpetition setoff arrangement with the Debtors, whereby any
amounts owed to AT&T by the Debtors on a monthly basis for AT&T
Services may be setoff against any amounts owed to the Debtors
by AT&T on a monthly basis for the switched access services that
the Debtors provide to AT&T.

                 Avaya Requests $2,214,945 Payment

According to Vincent A. D'Agostino, Esq., at Lowenstein Sandler
P.C., in Roseland, New Jersey, the Debtors fail to provide Avaya
anything more than what Avaya is already entitled to receive in
these bankruptcy cases.  Mr. D'Agostino argues that the proposed
measures of adequate assurance are insufficient.

Avaya asks the Court to compel the Debtors to post a security
deposit equal to three months of anticipated Avaya Services
totaling $2,214,945 and prepay Avaya's monthly invoices, subject
to the Debtors' right to subsequently dispute any actual
charges. To the extent that the Debtors dispute any charges for
Avaya Services, Avaya contends that a procedure should be
implemented to resolve disputes in an expedited manner.  In the
event the Debtors default on any of their postpetition
obligations to Avaya, Avaya asks the Court for permission to
suspend or terminate all services rendered by Avaya to the
Debtors, unless the Debtors cure this default within 5 business
days after Avaya provides written notice to the Debtors and
their counsel.

          Various Utilities Request Adequate Assurance

These utility service providers request postpetition deposits
from the Debtors as adequate assurance:

Utility                       Prepetition Debt   Deposit Request
-------                       ---------------    ---------------
Allegheny Power                     $35,506.36       $47,589
Ameren Electric Power              $371,131.41      $399,803
Ameren CIPS                          $3,512.00        $7,910
Ameren UE                          $220,795.35      $287,424
Baltimore Gas & Electric Co.       $525,380.00      $488,658
Central Hudson Gas & Electric        $2,530.00        $4,900
City Public Service                $136,299.00      $211,960
Commonwealth Edison              $1,100,000.00    $4,000,000
Commonwealth Edison of New York    $274,300.41      $394,665
Orange & Rockland Utilities        $154,322.76      $170,650
Dominion Virginia Power          not available    $1,289,392
Detroit Edison                   $1,000,000.00      $406,879
Michigan Consolidated Gas        not available        $5,962
Duke Power Co.                   not available      $163,711
Georgia Power                      $438,904.53      $521,480
Long Island Lighting Co.         not available      $195,975
Massachusetts Electric Co.         $260,000.00      $380,000
Narragansett Electric Corp.         $30,000.00       $30,000
Niagara Mohawk Power Corp.         $152,096.47      $169,870
New York State Electric & Gas       $80,615.03       $83,280
PECO Energy Co.                    $215,673.00      $328,960
Progress Telecom Corp.           $2,764,635.87    $2,119,294
Public Service Electric & Gas      $640,587.30      $818,618
Savannah Electric                    $4,923.57        $8,495
Salt River Project                 $147,356.05      $172,080
Southern California Edison         $755,971.00    $1,160,930
Tampa Electric Co.                 $462,279.26      $502,000

Robert T. Barnard, Esq., at Thompson Hine LLP, in New York,
contends that the Court should not grant the Debtors injunctive
relief because it actually deprives the Utilities of their
rights under applicable federal and state law.  Mr. Barnard
notes that the proposed injunctive relief imposes a severe
hardship on the Utilities.  Under the Utilities' regulatory
mandated and contractually agreed billing cycles, the Utilities
could provide the Debtors with 2 or more months of unpaid
service before the Utilities could begin to terminate service to
the Debtors for nonpayment of postpetition bills.  The proposed
injunctive relief requires the Utilities to incur losses before
they can move the Court for the right to terminate service to
the Debtors for nonpayment of postpetition bills.

Mr. Barnard contends that there is no need for the injunctive
relief because the Utilities' normal billing cycles, which are
governed by applicable tariffs, regulations, contractual terms
and state laws, provide the Debtors with more than sufficient
protections to address billing or payment disputes.  Under the
Utilities' billing cycles, the Debtors receive one month of
utility service before the Utility issues a bill for this
service.  Once a bill is issued, the Debtors have 15 to 30 days
to pay the applicable bill.  If the Debtors fail to timely pay
the bill, a past due notice is issued on the account, which
generally provides the Debtors with a week to cure the default.
During either of the foregoing time periods, the Debtors are
provided sufficient time to raise and address any billing or
payment disputes that arise.

If the Debtors fail to cure the arrearage by the applicable cure
period set forth in the notice, Mr. Barnard says, the service is
subject to disconnection.  Hence, under the Utilities'
regulatory mandated or contractually agreed billing cycles, the
Debtors must be severely delinquent in the payment of their
bills and ignore a written warning notice before service would
be disconnected for nonpayment of postpetition bills.  
Therefore, there is no need for a Court supervised billing
dispute procedure.

Moreover, Mr. Barnard points out that it would impose a severe
burden on this Court to establish a Court supervised billing
dispute procedure for the 120 pages of Utilities listed in the
Utility Motion.  In the rare situation where Court supervision
may be required or necessary, either party could bring the
matter before the Court.  Accordingly, the Court should not
establish a Court supervised billing dispute procedure.

Mr. Barnard claims that the Debtors are clearly attempting to
circumvent the plain language of the statute and add additional
requirements and burdens upon the Utilities that are not
required or included in Section 366(b).

In addition, the Debtors are trying to limit a Section 366(b)
request to issues regarding solvency or liquidity, when there
may be many other reasons that a Utility would be seeking to
modify a Section 366 adequate assurance of payment
determination. Accordingly, as the requirements of Section
366(b) are clear and unambiguous with respect to a motion to
modify an adequate assurance of payment determination, the Court
should deny the Debtors' request to engraft additional
conditions and requirements onto the statute.

                 Mid-Size Carrier Group Responds

The Mid-Size Carrier Group is composed of ALLTEL Communications
Inc., CenturyTel Inc., FairPoint Communications Inc., Frontier
Telephone of Rochester Inc., Iowa Telecommunications Services
Inc., Kerrville Telephone Company, Madison River Communications
LLC, Rock Hill Telephone Company, Roseville Telephone Company,
TDS Telecommunications Corporation, The Concord Telephone
Company, Valor Telecommunications Enterprises LLC, and Virgin
Islands Telephone Corporation.

The Mid-Size Carrier Group agrees with the Debtors that an
abrupt termination of the various telecommunications services
provided by and through the Debtors would have a devastating
effect on the Debtors' customers and should be avoided.  Many of
the Mid-Size Carrier Group members' customers are also customers
of the Debtors.  However, the Debtors' proposed plan to provide
"adequate assurance of payment" under Sections 366 does little
to protect these customers or address this issue other than to
shift the risk of a default to service providers.

Raymond R. Pring, Jr., Esq., at Wiley Rein & Fielding LLP, in
McLean, Virginia, argues that the Mid-Size Carrier Group and
other entities that provide services to the Debtors should not
be forced to bear the entire economic risk of the Debtors'
continued business operations when reasonable and feasible
alternatives, that comport with statutory requirements and the
public interest as well as protect customers, are readily
available.

Mr. Pring asserts that the Debtors' Motion should be denied for
a number of reasons.  To the extent that one or more members of
the Mid-Size Carrier Group is determined to be a utility or to
provide utility services, the adequate assurance of payment
proposed by the Debtors is woefully inadequate and not in
compliance with the Bankruptcy Code.  Mr. Pring contends that
the requirement of a deposit is particularly appropriate here
given the financial reporting abnormalities that preceded the
Debtors' bankruptcy petition.  "The Mid-Size Carrier Group
should not be forced to rely upon the Debtors' financial
reporting and projections as a form of assurance, given the
Debtors' accounting problems, and in light of the Debtors'
history of payment defaults and late payments with the Mid-Size
Carrier Group," Mr. Pring says.

According to Mr. Pring, the implementation of an effective early
warning system, together with the provision for expeditious
resolution of billing disputes and dissemination of timely,
accurate and current financial information of the Debtors, are
critical to assuring timely payment of the Debtors' postpetition
obligations to the Mid-Size Carrier Group.  Moreover, the Mid-
Size Carrier Group also seeks, as adequate assurance of payment:

    -- the ability to bill the Debtors as frequently as weekly,

    -- a requirement that the Debtors pay undisputed portions of
       invoices within 7 days after receipt of the invoice,

    -- a requirement that the Debtors assume or reject executory
       contracts with the Mid-Size Carrier Group within 30 days
       after entry of the order granting relief, and

    -- an order prohibiting the Debtors from seeking injunctive
       relief against any Mid-Size Carrier Group member
       exercising its rights.

              Debtors' Proposed Additional Assurance

Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New
York, informs the Court that since filing the Utility Motion,
the Debtors have negotiated with many, if not all, of the
Objecting Entities.  Out of the discussions, the Debtors drafted
a Revised Adequate Assurance, which -- in addition to the
Proposed Adequate Assurance -- includes:

1. In the event of a payment default for postpetition Utility
   Services, a Utility Company may send notice by facsimile
   to the Debtors, with a copy to counsel for the Debtors.  If
   payment of the undisputed portion is not made by wire
   transfer or similar good federal funds within 3 business days
   thereafter, the Utility Company may seek an order requiring
   immediate payment or any other relief as is appropriate, with
   objections returnable not less than 2 business days
   thereafter;

2. Immediately upon receipt of an Enforcement Notice, the
   Debtors will provide a copy of the notice to a representative
   selected from among the Utility Companies;

3. The Debtors and the Utility Companies that have reciprocal
   obligations to one another will negotiate in good faith to
   resolve issues relating to, and establish procedures for, the
   mutual setoff of payments for services.  To the extent the
   Debtors and a Utility Company are unable to agree upon a
   resolution or procedures, the Debtors or the Utility Company
   may seek relief from this Court;

4. To the extent termination of services to the Debtors'
   customers is necessary, the Debtors will comply with all
   applicable regulatory requirements, including, but not
   limited to, timely service of notices to customers consistent
   with Section 214;

5. A reservation of rights for the Debtors or any Utility
   Company to assert that a Utility Company is or is not a
   utility as contemplated in Section 366 of the Bankruptcy
   Code;

6. A reservation of rights for the Debtors or any Utility
   Company with respect to assumption or rejection of executory
   contracts under Section 365 of the Bankruptcy Code; and

7. A limitation of the injunction preventing Utility Companies
   from terminating services based upon a postpetition default.

Based upon the facts of these cases, all of the elements of the
Revised Adequate Assurance provide the Utility Companies with
adequate assurance under Section 366 of the Bankruptcy Code.  
The Revised Adequate Assurance provides Utility Companies with:

-- a significantly reduced risk of non-payment;

-- an ability to limit postpetition credit exposure to the
   Debtors;

-- an ability to closely monitor the Debtors' financial status;
   and

-- expedited procedures to return to the Court in the event the
   Debtors' liquidity declines materially.

These assurances are precisely the "adequate assurance"
contemplated by Section 366 of the Bankruptcy Code.

Ms. Goldstein notes that the Objecting Entities' requests for
deposits, letters of credit, escrow accounts, prepayments, and
expedited payment terms all suffer from the same fatal flaw --
having to furnish any of these requests will cripple the
Debtors' liquidity.  The availability under the DIP Financing is
critical to the Debtors' ability to continue to operate its
businesses in the ordinary course.  Deposits, letters of credit,
escrow accounts, prepayments, and expedited payments all drain
the Debtors' availability under the DIP Financing and,
therefore, the Debtors' liquidity, dollar for dollar.

Some of the Objecting Entities have requested that the Court
compel the Debtors to grant junior liens on the Debtors'
property and superpriority claims under Sections 364(b) and (c)
of the Bankruptcy Code.  Ms. Goldstein asserts that this is
simply not an option.  The Debtors are expressly prohibited
under the DIP Financing from granting junior liens on any of the
Debtors' property or affording parties superpriority
administrative expense claims.  The DIP Financing was the
product of extensive arm's length negotiations and is now in the
process of syndication.  "The Utility Companies are unrealistic
to believe that these core provisions of the DIP Financing could
be subject to change," Ms. Goldstein says.

Several of the Objecting Entities have also requested a "carve-
out" from the collateral securing the DIP Financing of amounts
owed to them.  Ms. Goldstein argues that this would be
inconsistent with the provisions already negotiated and would
result in a severely damaging reduction of availability under
the DIP Financing facility.

For no stated reason, several of the Objecting Entities have
requested that the Court compel the Debtors to pay for utility
services by wire transfer.  Ms. Goldstein points out that this
procedure is administratively burdensome and costly.  The only
way the Debtors could pay by wire transfer is if each utility
company billed the Debtors for all services provided each month
once a month, as opposed to the existing daily billing cycles.
Even if the Utility Companies were able to make that change, it
would be an administrative burden on the Debtors because wire
transfers do not enable the Debtors to accurately account for
fund transfers in the same manner as paper checks.  According to
Ms. Goldstein, the Debtors have 70,000 accounts with the Utility
Companies.  One payment per month per account, if done by wire
transfer, would cost the Debtors an additional $490,000 per
month.  There is no justification for this additional
administrative burden or the excessive associated cost.

Several of the Objecting entities -- particularly the Incumbent
Local Exchange Carriers -- have requested that the Court compel
the Debtors to provide deposits for what the ILECs consider "new
services."  Ms. Goldstein explains that the Debtors are
continuing to operate their businesses, including obtaining new
customers.  Each time the Debtors sign up a new customer or
increase services to an existing customer, the Debtors must add
additional voice and data lines or additional network equipment.
In most cases, the only entities that can supply the additional
lines and equipment are the ILECs.  If the ILECs are permitted
to erect artificial barriers to provisioning customers by
designating additional services as "new services" and thereby
requiring deposits, the Debtors stand to lose significant
revenues.  Moreover, Ms. Goldstein says, the additional deposit
requirements would drain the Debtors' liquidity dollar for
dollar.  These artificial barriers are no doubt erected by the
ILECs, not to provide adequate assurance, but rather to prevent
the Debtors from entering into markets and obtaining new
customers that the ILECs -- as the major competitors of the
Debtors -- want to obtain as their own.  Accordingly, Ms.
Goldstein asserts, the ILECs' request should be denied.

          Committee Responds to Requests for Assurance

Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP,
in New York, tells the Court that the facts of these cases do
not require the payment of deposits or prepayments in order to
provide the Objecting Utilities with adequate assurance.  In
similar to the other large chapter 11 cases involving
telecommunications companies pending before the Court, the
Objecting Utilities are adequately assured of payment for
postpetition services, as required by Section 366 of the
Bankruptcy Code, through the combination of:

    (a) the Debtors' history of timely payment of undisputed
        prepetition utility invoices,

    (b) the allowance of an administrative expense priority
        claim for services rendered to the Debtors postpetition,
        and

    (c) the institution of various procedural safeguards.

The Committee points out that two key factors support this
finding:

1. The Debtors have relationships going in both directions with
   the Objecting Utilities -- that the Debtors are creditors of,
   and not just debtors to, the Objecting Utilities -- and that
   the Objecting Utilities currently owe the Debtors amounts
   substantially in excess of the amounts owed by the Debtors to
   the Objecting Utilities; and

2. The Debtors have sufficient liquidity to satisfy any
   administrative claim of the Objecting Utilities as a result
   of cash generated from operations and the Debtors' proposed
   $2,000,000,000 postpetition financing facility.

According to Mr. Dizengoff, the Debtors generated revenue at
$3,000,000,000 per month in 2001.  In addition, there is no
material secured debt on the Debtors' assets other than the DIP
Facility, which provides the Debtors with liquidity of up to
$2,000,000,000 to pay administrative claims.  Thus, even with
the Debtors' $750,000,000 monthly utility bills, the Debtors'
lack of secured creditors and significant liquidity clearly
ensure that the Objecting Utilities are not subject to an
unreasonable risk of nonpayment of their administrative claims
for services provided postpetition.

Other factors weighing heavily in favor of a finding of the
requisite adequate assurance, without the need for any deposits
or prepayments, are:

-- the Debtors record of timely paying all of its undisputed
   utility bills prior to the Petition Date,

-- the Objecting Utilities are currently withholding amounts
   owed to the Debtors in excess of amounts owed by the Debtors
   owe the Objecting Utilities, and

-- the additional safeguards the Motion proposes to impose,
   including expedited hearing procedures in the event of a
   dispute relating to payment for postpetition services and
   procedures for the monthly sharing of financial information.

If the Debtors were required to provide the Objecting Utilities
with prepayments or deposits, Mr. Dizengoff argues that the
Debtors' restructuring efforts would be crippled by the
resulting drain of its financial resources.  If the Debtors were
required to give each of its utilities a two-month deposit --
$1,500,000,000 in the aggregate or $590,000,000 net of amounts
owing to the Debtors from its utilities -- which many of the
Objecting Utilities are requesting, the Debtors would not have
sufficient financial flexibility successfully to reorganize.
Additionally, this requirement, with its attendant message that
administrative creditors are subject to an unreasonable risk of
nonpayment, would send a powerful signal to the Debtors'
employees, creditors and customers, as well as the government,
media and capital markets, that the Debtors will not be able
successfully to reorganize.  "This message would likely become a
self-fulfilling prophecy," Mr. Dizengoff says.  It is,
therefore, very important to preserve the Debtors' available
liquidity in order to provide the Debtors with an opportunity to
rehabilitate its businesses.

                            *   *   *

Judge Gonzalez rules that any and all unpaid charges for
postpetition services provided by the Utility Companies to the
Debtors constitute actual and necessary expenses of preserving
the Debtors' estates.  In addition, with respect to those claims
for the amounts incurred after August 14, 2002, each Utility
Company is granted an administrative expense priority claim.
This claim:

-- will constitute a junior superpriority administrative claim
   in each of the Debtors' estates;

-- will be "pari passu" with one another and will be junior
   only:

   (a) to the claims of the DIP Lenders as a result of the
       Interim or any final order, and

   (b) to any intercompany junior liens and claims of each of
       the WorldCom Debtors, and

-- will be senior to any other administrative claim unless
   otherwise ordered by the Court.

Judge Gonzalez also directs the Debtors and the Utilities
Companies to negotiate in good faith an expedited dispute
resolution procedure.

In the event of a payment default for postpetition Utility
Services, a Utility Company may send notice by facsimile to the
Debtors, with a copy to counsel for the Debtors and the
Creditors' Committee, and if payment of the undisputed portion
is not made by wire transfer or similar good federal funds
within 3 business days thereafter, the Utility Company may seek:

-- by order to show cause, an order requiring immediate payment
   or any other relief as is appropriate, with objection
   returnable not less than 2 business days thereafter, or

-- appropriate action under any applicable tariff or regulation,
   provided, however, that this action is without prejudice to
   the Debtors' right to seek injunctive relief from this Court.
   (Worldcom Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
   Service, Inc., 609/392-0900)   


* FTI Consulting Acquires PwC's U.S. Business Recovery Services
---------------------------------------------------------------
FTI Consulting, Inc. (NYSE: FCN), the premier national provider
of turnaround, bankruptcy and litigation-related consulting
services, has completed the acquisition of the U.S. Business
Recovery Services Division of PricewaterhouseCoopers.

BRS is the leading provider of bankruptcy, turnaround and
business restructuring services to corporations in the United
States.  Headquartered in New York, BRS has more than 350 people
housed in 15 offices across the U.S. with significant practices
in New York, Dallas, Los Angeles, Chicago and Atlanta.  For its
fiscal year ended June 30, 2002, BRS had revenues of
approximately $170.0 million on a stand-alone basis and pro
forma income from operations of approximately $50.0 million, net
of estimates for integration costs and the amortization of
identifiable intangible assets other than goodwill resulting
from a preliminary allocation of the purchase price.

The purchase price plus other acquisition costs included
approximately $143.0 million of cash and 3.0 million shares of
FTI common stock.  The cash portion of the purchase price was
financed by FTI from its existing cash, a new senior bank term
loan of $74.0 million, and $45.0 million from a new $100.0
million revolving credit line.

FTI is also continuing discussions for the sale of its Applied
Sciences Division with a group led by the division's president.  
Proceeds from any sale would be used to reduce the debt incurred
in connection with the acquisition of BRS, and results of the
Applied Sciences Division will be reflected as a discontinued
operation beginning with the third quarter of 2002.  As
previously disclosed, the net effect of the acquisition of BRS
and the planned sale of Applied Sciences is expected to be
significantly accretive to FTI's earnings per share from
continuing operations and to earnings per share.

FTI said that the integration of the BRS operations with its
existing bankruptcy, turnaround and restructuring practice was
already well underway. The combined operations will conduct
business under the FTI Consulting name.

Jack Dunn, FTI's chairman and chief executive officer, stated,
"Completing this acquisition and joining Dom DiNapoli and his
group with the FTI team headed by Bob Manzo and Mike Policano is
the beginning of the next exciting chapter in the FTI story.  We
see considerable future organic and other growth opportunities
for the company and have significantly expanded our resources
and ability to realize them."

Stewart Kahn, president and chief operating officer of FTI,
commented, "The acquisition of BRS has dramatically enhanced our
ability to provide our full range of services to even more
clients and thereby maximize our opportunities for growth.  We
also look forward to a meaningful reciprocal client-referral
relationship with Applied Sciences as it begins the process of
separating from us."

FTI Consulting is a multi-disciplined consulting firm with
leading practices in the areas of bankruptcy, financial
restructuring and litigation consulting.  Modern corporations,
as well as those who advise and invest in them, face growing
challenges on every front.  From a proliferation of "bet-the-
company" litigation to increasingly complicated relationships
with lenders and investors in an ever-changing global economy,
U.S. companies are turning more and more to outside experts and
consultants to meet these complex issues.  FTI is dedicated to
helping corporations, their advisors, lawyers, lenders and
investors meet these challenges by providing a broad array of
the highest quality professional practices from a single source.

FTI is on the Internet at http://www.fticonsulting.com


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

Issuer               Coupon   Maturity  Bid - Ask  Weekly change
------               ------   --------  ---------  -------------
Federal-Mogul         7.5%    due 2004    23 - 25        -1
Finova Group          7.5%    due 2009    31 - 33        +3
Freeport-McMoran      7.5%    due 2006    88 - 90        +1
Global Crossing Hldgs 9.5%    due 2009   0.5 - 1.5       0
Globalstar            11.375% due 2004     3 - 5         0
Lucent Technologies   6.45%   due 2029    66 - 68        +2
Polaroid Corporation  6.75%   due 2002   5.5 - 7.5       0
Terra Industries      10.5%   due 2005    78 - 80        -1
Westpoint Stevens     7.875%  due 2005    46 - 48        -3
Xerox Corporation     8.0%    due 2027    40 - 42        +2

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

                          *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices
are obtained by TCR editors from a variety of outside sources
during the prior week we think are reliable.  Those sources may
not, however, be complete or accurate.  The Monday Bond Pricing
table is compiled on the Friday prior to publication.  Prices
reported are not intended to reflect actual trades.  Prices for
actual trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy
or sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

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.
                  
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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.

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