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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, February 6, 2003, Vol. 7, No. 26

                          Headlines

AIRGATE PCS: S&P Affirms CCC- Credit Rating after Curing Default
AMERICA WEST: Revenue Passenger Miles Up 21.4% in January 2003
AMERICAN AIRLINES: Looks to Workers for $1.8 Billion Cost Cuts
AMERICAN COMMERCIAL: Case Summary & 20 Largest Unsec. Creditors
AMERICAN COMM'L: Has Until Mar. 19 to File Schedules & Statement

AMERIGAS: Finance Unit Commences Exchange Offer for 8-7/8% Notes
ANC RENTAL: Gets Nod to Consolidate Ops. at Charlotte Airport
ARMSTRONG: Court Okays Stipulation Extending EPA & FNRT Bar Date
ASIA GLOBAL CROSSING: Court Fixes February 28 as Claims Bar Date
ASPECT COMMS: President Rod Butters Resigns & Replacement Sought

ATA HOLDINGS: Red Ink Continues to Flow in Fourth Quarter 2002
AVON PRODUCTS: Reports Improved Performance for Fourth Quarter
BETHLEHEM STEEL: Court Okays Amendment to $450MM DIP Financing
BROOKS-PRI AUTOMATION: Sells Back Warrants to Shinsung Eng'g
BUDGET GROUP: Asks Court to Extend Removal Period to April 30

CARAUSTAR INDUSTRIES: Fourth Quarter Net Loss Stands at $13 Mil.
CHARMING SHOPPES: Outlines Plans for 2004
CHART INDUSTRIES: Eyeing Two Alternatives to Improve Financials
CLARENT CORP: Verso Obtains Court Nod to Acquire Debtor's Assets
COMMONWEALTH BIOTECH.: Closes 2002 with Major Loss Reductions

CONSECO INC: Wins Final Approval to Obtain $125MM DIP Financing
COVANTA ENERGY: Court Approves Fenelus Settlement Agreement
COVENTRY HEALTH: S&P Affirms BB+ Counterparty Credit Rating
DAN RIVER INC: Dec. 28 Working Capital Deficit Tops $54 Million
DILLINGHAM CONSTRUCTION: Voluntary Chapter 11 Case Summary

EGS NEW VENTURES: Voluntary Chapter 11 Case Summary
EROOMSYSTEM: Fails to Satisfy Nasdaq Continued Listing Standards
FC CBO II: S&P Places BB Class B Notes Rating on Watch Negative
FISHER COMMS: Williams O. Fisher Discloses 5.1% Equity Stake
FLEMING: Fitch Cuts Senior Unsec. & Sub. Debt Ratings to B+/B-

FOAMEX INT'L: Appoints K. Douglas Ralph as EVP and CFO
FREESTAR: Seeks Dismissal of Involuntary Chapter 7 Petition
GENUITY INC: Committee Gets Okay to Hire Kramer Levin as Counsel
GLOBAL CROSSING: Seeks Okay for Telecordia Settlemet Agreement
GROUP TELECOM: Consummates Sale Transaction with 360networks

HALO INDUSTRIES: Pursuing Talks re Potential Sale of Business
HARVARD INDUSTRIES: Brings-In Hilco as Real Estate Consultants
HAYES LEMMERZ: Disclosure Statement Hearing Commencing Today
HEALTH INSURANCE: S&P Plucks BB Fin'l Strength Rating from Watch
HOLIDAY RV: Appoints Casey L. Gunnell as President & Acting CEO

INTEGRATED HEALTH: Premiere Committee Signs-Up BDO as Advisor
J/Z CBO (DEL) LLC: S&P Hatchets Rating on Class C Notes to B+
KMART: SEC Approves NYSE Application to Delist Kmart Securities
LAND O'LAKES: Full-Year 2002 Financial Results Show Improvement
LERNOUT & HAUSPIE: Solicitation Period Extended Until March 31

LEVEL 3 COMMS: Completes Acquisition of All Genuity's Assets
LEVEL 3 COMMS: Narrows Net Capital Deficit to $240MM at Dec. 31
LGMI INC: Chapter 11 Case Summary & Largest Unsecured Creditor
LOUISIANA GAS: Voluntary Chapter 11 Case Summary
LOUISIANA RESOURCES: Voluntary Chapter 11 Case Summary

LOUISIANA-PACIFIC: Names Daniel Frierson to Board of Directors
LRCI INC: Voluntary Chapter 11 Case Summary
LUCENT: Inks 10 Reseller Agreements to Bring-In $10MM in Revenue
MANHATTAN IMAGING: Has Until Feb. 7 to Solicit Plan Acceptances
MOODY'S CORP: Fourth Quarter 2002 Results Show Improvement

MOSLER: Exclusivity Extended -- For the Last Time -- to May 6
MOTOROLA INC: Declares Quarterly Dividend Payable on April 15
NATIONAL CENTURY: US Trustee Appoints Creditors' Committee
NATIONAL STEEL: Judge Squires to Look at AK Steel's Bid Today
NAVIGATOR GAS: Wants More Time to File Schedules & Statement

NEXTCARD CREDIT: S&P Cuts Ratings on Ser. 2000-1 & 2001-1 Notes
ON COMMAND CORP: Commences Trading on OTCBB Effective Today
PACIFIC AEROSPACE: Intends to Execute 1-For-200 Reverse Split
PACIFIC GAS: Agrees to Modify Proposed Plan on Class 7 Claims
PALADYNE CORP: Shareholders Okay Proposed 1-For-10 Reverse Split

PEACE ARCH: Closes Acquisition, Financing & Debt Workout Deals
PHAR-MOR INC: Files Disclosure Statement for Liquidating Plan
PLAINS EXPLORATION: S&P Affirms & Removes BB- Rating from Watch
PRIMUS TELECOMM: Sets Special Shareholders' Meeting for March 31
REGUS BUSINESS: Seeks Okay to Hire Ordinary Course Professionals

RITE AID: Reports 5.7% Same Store Sales Increase for January
RITE AID: S&P Rates Planned $200MM Senior Secured Notes at B-
ROYAL PRECISION: Completes Proposed Merger with Royal Associates
RURAL CELLULAR: Will Publish Fourth Quarter Results on Feb. 24
SOTHEBY'S HOLDINGS: Will Promote All Live Auctions through eBay

SOUTHWESTERN ILLINOIS: S&P Drops Revenue Bonds Rating to D
SPARTAN STORES: Exploring Options for Food Town Retail Stores
STEEL DYNAMICS: Reaches Agreement to Purchase GalvPro Assets
SUN WORLD INT'L: Case Summary & 20 Largest Unsecured Creditors
SUNBEAM CORP: All Final Fee Applications Due By Friday

TENNECO AUTOMOTIVE: Dec. 31 Balance Sheet Upside-Down by $94MM
TIME WARNER TELECOM: Posts Q4 $244MM Net Loss on $175MM Revenue
TITANIUM METALS: Shareholders Approve Proposed Reverse Split
TRANSWITCH CORP: Files Patent Infringement Suit against Galazar
TRENWICK GROUP: Fitch Further Junks L-T & Sr. Debt Ratings to C

TRINITY ENERGY RESOURCES: Voluntary Chapter 11 Case Summary
UNITED AIRLINES: Hires Wilmer Cutler as Regulatory Counsel
US AIRWAYS: Wants Plan Filing Exclusivity Extended to April 1
USA BIOMASS CORP: Court Signs Final Plan Confirmation Order
USG CORP: Fourth Quarter Results Reflect Strong Core Businesses

WISER OIL: Delivers Plan to Comply with NYSE Listing Guidelines
W.R. GRACE: Wants Nod for Curtis Bay Employee Retirement Program
ZENITH NATIONAL: Narrows Net Loss to $8 Million in 4th Quarter

* DebtTraders' Real-Time Bond Pricing

                          *********

AIRGATE PCS: S&P Affirms CCC- Credit Rating after Curing Default
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'CCC-' corporate
credit rating on Atlanta, Georgia-based wireless carrier Airgate
PCS Inc.  Simultaneously, Standard & Poor's removed the rating
from CreditWatch, where it had been placed with negative
implications after the company defaulted on its bank loan and
indenture for senior subordinated discount notes by not filing
its annual report on Form 10-K on Dec. 31, 2002.

The CreditWatch removal is due to the company curing its default
under both the bank credit agreement and bond indenture by
filing its annual report in January 2003.

The outlook is negative. The 'CC' corporate credit rating on
Airgate's wholly owned subsidiary iPCS Inc., remains on
CreditWatch with negative implications. Excluding iPCS, Airgate
had total debt of about $364 million as of Sept. 30, 2002.

"Airgate has weak liquidity and is at risk of violating two bank
covenants in the near term. In the absence of substantial and
urgent improvements in operating and cash flow metrics, the
company faces significantly increased potential of undertaking a
financial restructuring. Maintenance of current ratings depends
on the company showing these improvements," said Standard &
Poor's credit analyst Michael Tsao.

Standard & Poor's also said that with weak free cash flow
prospects, the company's level of liquidity provides little
safety margin against execution missteps stemming from
competition, the weak economy, and management being distracted
by ongoing difficulties at iPCS.

Airgate and its wholly owned subsidiary iPCS provide wireless
services under the Sprint PCS brand primarily in lower tiered
markets in the Southeast and Midwest, respectively.


AMERICA WEST: Revenue Passenger Miles Up 21.4% in January 2003
--------------------------------------------------------------
America West Airlines (NYSE: AWA) reported traffic statistics
for the month of January 2003.  Revenue passenger miles for
January 2003 were a record 1.6 billion, an increase of 21.4
percent from January 2002.  Capacity for January 2003 was 2.4
billion available seat miles, up 16.2 percent from January 2002.
The passenger load factor for the month of January was a record
66.0 percent versus 63.1 percent in January 2002.

"America West's sustained increases in year-over-year market
share and revenue are an indication that travelers continue to
recognize that our business-friendly fare structure gives them
the flexibility they need at an affordable price," said Scott
Kirby, executive vice president, marketing and sales.

Founded in 1983 and proudly celebrating its 20-year anniversary
in 2003, America West Airlines is the nation's second largest
low-fare airline and the only carrier formed since deregulation
to achieve major airline status. Today, America West serves 92
destinations in the U.S., Canada and Mexico.

As previously reported in the Troubled Company Reporter,
Standard & Poor's raised America West's junk corporate credit
rating to 'B-'.


AMERICAN AIRLINES: Looks to Workers for $1.8 Billion Cost Cuts
--------------------------------------------------------------
Citing its unsustainable current losses -- estimated at
$5,000,000 a day -- and the long-term need to restructure its
business, American Airlines asked its labor leaders and
employees for $1.8 billion in permanent, annual savings through
a combination of changes in wages, benefits and work rules.

"We have together made significant changes in our operation, our
product and our service to build a more efficient and innovative
airline," the company said in letters to union leaders and non-
represented employee workgroups.

"But we need to do more. And we need to do it now. Our financial
results make it abundantly clear that American's future cannot
be assured until ways are found to significantly lower our labor
and other costs."

In letters to the unions, AMR Chairman and CEO Don Carty and
President Gerard Arpey noted that, unlike other financially
troubled airlines, the company turned to employees as a last
resort, and only after pursuing an aggressive restructuring plan
that identified $2 billion in annual, structural cost savings.

Company executives have said the airline needs an estimated
$4 billion in permanent annual savings to compete effectively
and return to profitability.

The company cited pricing actions by low-cost and bankrupt
carriers among the factors putting "unrelenting pressure" on the
company's financial situation.

"[A]s a last resort, we are taking the difficult step of asking
all of our employees to participate in American's recovery by
working with us to deliver $1.8 billion in permanent, steady-
state savings. We hope to work collaboratively with you to
restructure labor agreements to realize these permanent, annual
savings and those needed to address our long-term financial
health."  The company also said it would seek to obtain
accommodations from a number of its other stakeholders,
including aircraft lessors, lenders and suppliers.

               Closing 2 of 10 Reservation Centers
                 and Distributing 910 Pink Slips

In addition, the company announced the latest steps in its
ongoing restructuring efforts, stating it plans to close two of
its 10 domestic reservations offices -- Norfolk, Va., and Las
Vegas -- impacting approximately 910 reservations representative
positions.

According to the company's proposal, the $1.8 billion in cost
savings would be divided by work group as follows:

     -- Pilots: ($660 million)
     -- Flight attendants: ($340 million)
     -- TWU represented employees: ($620 million)
     -- Agents and representatives: ($80 million)
     -- Management and support staff: ($100 million)

Each work group's share was allocated in consideration of
American's strategic goals as well as a review of the
competitive landscape and labor costs at other airlines. The
company said it hopes to work collaboratively through a process
of active engagement with union leaders and non-unionized
employee groups to determine how each will deliver its share of
the targeted savings through a combination of changes in wages,
benefits, and work rules.

In the meeting, Carty and Arpey assured labor leaders that
management would continue to do its share and emphasized that
the proposed cuts come on top of a second year of across-the-
board pay freezes for management and a 22 percent reduction in
management and support staff positions, resulting in more than
$200 million in savings to date.

"Unfortunately, we have little other choice," Carty and Arpey
wrote.  "What we do have is an opportunity no longer available
to our counterparts at United and US Airways: the chance to work
together to find mutually acceptable solutions to our financial
crisis in order to avoid the uncertainty of courts and creditors
determining our fate.

"Given the magnitude of this request and the sacrifice we are
asking of our employees, the importance and impact of your
leadership during this pivotal time is critical to our success,"
Carty and Arpey wrote to union leaders.

"This is a painful time, but we are confident that the men and
women who have built their careers at American Airlines will
recognize the gravity of the situation and work with us as we
embark upon a difficult but necessary journey toward recovery,"
Carty and Arpey concluded. "We are grateful for and inspired by
the determination and dedication of the people of American and
know that with their support, we will succeed."

For more information on AMR, visit http://www.amrcorp.com

AMR Corp.'s 10.200% bonds due 2020 are currently trading at
about 31 cents-on-the-dollar.

               Is Bankruptcy Counsel on Board?

"It would be absolutely foolish for a company in our situation,
with two of our major competitors in bankruptcy, not to have
expert bankruptcy advice on hand all the time.  That's what
we've got and have had for some time," Mary Schlangenstein at
Bloomberg News quotes Mr. Carty saying Tuesday at a Goldman
Sachs & Co. transportation conference in New York Tuesday.
Press reports circulated last month saying that AMR's hired
Marcia Goldstein, Esq., and Martin Beinenstock, Esq., at Weil,
Gotshal & Manges for legal advice.  Harvey Miller at Greenhill &
Co., Reuters reports, has also been retained to advise
American.  Weil Gotshal's served as counsel to AMR for years;
Alan B. Miller, Esq., Thomas A. Roberts, Esq., and Shai Y.
Waisman, Esq.; in the Firm's New York office and Mary R. Korby,
Esq., in the Firm's Dallas office represented American when it
acquired Trans World Airlines in 2001.  In a conference call on
Jan. 22, Jeffrey C. Campbell, AMR's CFO, declined to confirm or
deny the Company's retention of Ms. Goldstein or  Messrs.
Beinenstock and Miller.

             Attempting to Renegotiate Loan Covenants

American disclosed last month that it will seek to renegotiate
specific loan covenants under its $834 million credit facility
that expires December 15, 2005.  That credit agreement, data
obtained from http://www.LoanDataSource.comshows, was revised
in the fourth quarter of 2001, to require that American have at
least $1.5 billion of liquidity (defined as the sum of cash,
short-term investments, and 50% of the net book value of
unencumbered aircraft) at June 30, 2003.  American reports that
unrestricted cash balances at Dec. 31, 2002, stood at
approximately $2 billion, and cash continues to burn at a rapid
pace.


AMERICAN COMMERCIAL: Case Summary & 20 Largest Unsec. Creditors
---------------------------------------------------------------
Lead Debtor: American Commercial Lines LLC
             1701 E Market Street
             Jeffersonville, Indiana 47130

Bankruptcy Case No.: 03-90305

Debtor affiliates filing separate chapter 11 petitions:

     Entity                                        Case No.
     ------                                        --------
     American Commercial Lines Holdings LLC        03-90306
     American Commercial Barge Line LLC            03-90307
     American Commercial Lines International LLC   03-90308
     American Commercial Logistics LLC             03-90309
     Jeffboat LLC                                  03-90310
     Louisiana Dock Comapany LLC                   03-90311
     Houston Fleet LLC                             03-90312
     Lemont Harbor & Fleeting Services LLC         03-90313
     ACL Capital Corp                              03-90314
     American Commercial Terminals LLC             03-90315
     ACBL Liquid Sales LLC                         03-90316
     Orinoco TASV LLC                              03-90317
     American Commercial Terminals - Memphis LLC   03-90319
     Orinoco TASA LLC                              03-90318

Type of Business: American Commercial Lines LLC is an
                  integrated marine transportation and service
                  company. Additionally, ACL operates marine
                  construction, repair and service facilities
                  and river terminals.

Chapter 11 Petition Date: January 31, 2003

Court: Southern District of Indiana

Judge: Basil H. Lorch, III

Debtors' Counsel: Suzette E. Bewley, Esq.
                  Baker & Daniels
                  300 N Meridian St. #2700
                  Indianapolis, IN 46204
                  Tel: 317-237-0300

Total Assets: $838,878,000 (as of Sept. 27, 2002)

Total Debts: $770,217,000 (as of Sept. 27, 2002)

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Equity Group Investments,   Note Debt             $109,807,819
LLC
2 North Riverside Plaza
Suite 600
Chicago, IL 60601
Contact: William Pate
Phone: 312-466-3805

Citicorp Venture Capital    Note Debt              $22,138,557
388 Greenwich St.
New York, NY 10013

Northwestern Mutual Life    Note Debt              $17,225,323
Insurance
720 East Wisconsin Ave,
Milwaukee, WI 53202
Contact: Joan Clark-Gunin
Phone: 414-271-1444

American Express Fin'l      Note Debt              $16,578,340
Corp.
70100 AXP Financial Center
Minneapolis, MN 55440
Contact: Scott Schroepfer
Phone: 413-744-6070

David L. Babson             Note Debt              $11,750,000
One Memorial Drive,
Suite 1100
Cambridge, MA 02142
Contact: Mary Wilson Kibbe
Phone: 413-744-6070

Merrill Lynch Investment    Note Debt              $11,750,000
Managers
800 Scudders Mill Road
Plainsboro, NJ 08536
Contact: Kevin Booth
Phone: 609-282-2681

Markston International      Note Debt              $10,181,582
50 Main Street
Mezzanine Level
White Plains, NY 10019
Contact: Michael Mullarkey
Phone: 914-761-4700

Credit Suisse Asset Mgt.    Note Debt               $8,944,057
466 Lexington Avenue
16th Floor
New York, NY 10017
Contact: Richard Lindquist
Phone: 212-832-2626

Cigna Investment Services   Note Debt               $6,643,000
280 Trumbull Street
PO Box 2975
Hartford, CT 06104
Contact: Carolyn Natale
Phone: 860-534-2544

Litespeed Partners LP       Note Debt               $4,194,000
237 Park Avenue
8th Floor
New York, NY 10022

Cincinnati Financial Corp.  Note Debt               $3,393,006
6200 South Gilmore Road
Fairfield, Ohio 45104
Contact: Martin Hollenbeck
Phone: 513-870-2634

Broe Co.                    Note Debt               $3,000,000
252 Clayton Street #4
Denver, Colorado 80206

General ReNEAM (New         Note Debt               $3,000,000
England Asset Mgt.)
Pondview Corp. Center
76 Batterson Park Road
Farmington, CT 06032
Contact: Andrew Brown
Phone: 860-409-3272

Bear Stearns Asset Mgt.     Note Debt               $2,544,754
575 Lexington Avenue,
10th Floor
New York, NY 10179
Contact: Brian Crowley
Phone: 212-272-2000

Morgan Stanley Investment   Note Debt               $2,201,423
Management
1221 Ave. of the Americas
22nd Floor
New York, NY 10020
Contact: David Armstrong
Phone: 212-762-4000

Colonial Management Co.      Note Debt              $1,948,166
One Financial Center
Boston, MA 02111
Contact: Kevin Kronk
Phone: 617-772-3735

John Levin & Co.            Note Debt               $1,666,911
One Rockefeller Plaza,
25th Floor
New York, NY 10020
Contact: John Levin
Phone: 212-332-8400

Eagle Capital Mgt.          Note Debt               $1,565,000
499 Park Avenue
New York, NY 10022
Contact: Ravenel Curry
Phone: 212-293-4040

Mariner LDC                 Note Debt                 $761,000
500 Mamaroneck Avenue
Harrison, NY 10528
Phone: 914-798-4212

Robert Morganthau           Note Debt                 $116,196

Bank of New York as Trustee Indenture Trustee       Notice Only


AMERICAN COMM'L: Has Until Mar. 19 to File Schedules & Statement
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Indiana
gave American Commercial Lines LLC and its debtor-affiliates an
extension of the deadline by which they must file their
schedules of assets and liabilities, statements of financial
affairs and lists of executory contracts and unexpired leases
required under 11 U.S.C. Sec. 521(1).  The Debtors have until
March 19, 2003, to file these documents.

American Commercial Lines LLC, an integrated marine
transportation and service company, filed for chapter 11
protection on January 31, 2003 (Bankr. S.D.Ind. Case No.
03-90305).  Suzette E. Bewley, Esq., at Baker & Daniels
represents the Debtors in their restructuring efforts.  As of
September 27, 2002, the Debtors listed total assets of
$838,878,000 and total debts of $770,217,000.


AMERIGAS: Finance Unit Commences Exchange Offer for 8-7/8% Notes
----------------------------------------------------------------
AmeriGas Eagle Finance Corporation is offering to exchange all
of its outstanding Series C 8-7/8% Senior Notes due 2011, which
were issued in a private placement on December 3, 2002 and which
is referred to as the Series C notes, for an equal aggregate
amount of its registered Series B 8-7/8% Senior Notes due 2011,
which have been registered with the Securities and Exchange
Commission and are among the registered notes. The Company is
also offering to exchange all of its outstanding Series A 8-7/8%
Senior Notes due 2011, which were issued in a private placement
on August 21, 2001 and which are referred to as the Series A
notes (together with the Series C notes, the old notes), for an
equal amount of the registered notes. The terms of the
registered notes are identical in all material respects to the
terms of the old notes, except that the registered notes will
not bear legends restricting their transfer under the Securities
Act of 1933, as amended, and certain transfer restrictions,
registration rights and additional interest payment provisions
relating to the old notes will not apply to the registered
notes.

The exchange offer expires at 5:00 p.m., New York City time, on
a date yet to be determined by the Company, unless extended.

AmeriGas will exchange all old notes that are validly tendered
and not validly withdrawn prior to the expiration of the
exchange offer.

Tendered old notes may be withdrawn at any time prior to the
expiration of the exchange offer.

Each broker-dealer that receives registered notes for its own
account pursuant to the exchange offer must acknowledge that it
will deliver a prospectus in connection with any resale of such
registered notes.

The only conditions to completing the exchange offer are that
the exchange offer not violate any applicable law or applicable
interpretation of the staff of the Commission and no injunction,
order or decree has been or is issued that would prohibit,
prevent or materially impair AmeriGas' ability to proceed with
the exchange offer.

The Company will not receive any cash proceeds from the exchange
offer.

There is no active trading market for the notes and AmeriGas
does not intend to list the registered notes on any securities
exchange or to seek approval for quotations through any
automated quotation system. Neither  the Securities and Exchange
Commission nor any state securities commission has approved or
disapproved of the registered notes or determined if the planned
prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.

                          *     *     *

As reported in Troubled Company Reporter's November 28, 2002
edition, AmeriGas Partners, L.P.'s $88 million senior notes due
May 2011, issued jointly and severally with its special purpose
financing subsidiary AP Eagle Finance Corp., are rated 'BB+' by
Fitch Ratings.

The Rating Outlook is Stable.

AmeriGas' rating reflects the subordination of its debt
obligations to $569.5 million secured debt of the OLP including
the OLPs $559.4 million privately placed 'BBB' rated first
mortgage notes. In addition, Fitch's assessment incorporates the
underlying strength of AmeriGas' retail propane distribution
network.


ANC RENTAL: Gets Nod to Consolidate Ops. at Charlotte Airport
-------------------------------------------------------------
ANC Rental Corporation and its debtor-affiliates obtained
permission from the Court to consolidate their operations at the
Charlotte/Douglas International Airport.

As previously reported, the City of Charlotte balked at the
Debtors' proposal, claiming, among other things, that any
assumption and assignment of their National Concession Agreement
and the National Lease is an impermissible, unilateral
modification of the agreements.  The Debtors and the City have
now reached a compromise and bring that agreement to the
Bankruptcy Court for its stamp of approval.

Specifically, the City agrees to allow the Debtors:

  A. to reject the Automobile Rental Concession Agreement,
     dated September 25, 2000, between Alamo and the City,
     whereby the City granted to Alamo a non-exclusive right to
     operate a car rental concession at the Charlotte Airport
     -- the Alamo Concession Agreement;

  B. to reject the Service and Storage Facility Lease-
     Automobile Rental Concession-Ground Lease Agreement, dated
     August 23, 1993, between Alamo and the City, for the lease
     of certain premises to Alamo at the Charlotte Airport --
     the Alamo Lease;

  C. to assume the Automobile Rental Concession Agreement,
     dated November 1, 2000, as amended previously and pursuant
     to the settlement herein described, between National and
     the City, whereby the City granted to National a
     non-exclusive right to operate a car rental concession and
     leased certain premises to National at the Charlotte
     Airport -- the National Concession Agreement; and

  C. to assume the Ground Lease Agreement, dated July 13, 1981,
     as amended, between National and the City, for the lease of
     certain premises to National at the Charlotte Airport, and
     assign them to ANC, with ANC operating both the National
     and Alamo tradenames from the current National facilities
     -- the National Lease.

The Debtors calculate that these actions will result in
significant cost savings for them over both the short and the
long term in two ways:

    (a) an immediate savings to the Debtors of over
        $1,155,000 per year in fixed facility costs and other
        operational cost savings; and

    (b) by allowing the Debtors to take advantage of the
        efficiencies resulting from the operation of two brands
        out of a single location while maintaining their current
        level of customer service for both brands.

As part of their compromise with the City, in exchange for the
City's agreement to permit ANC to dual brand, the Debtors have
agreed to amend the National Concession Agreement to increase
the MAG Payment from $98,583 per month to $127,875.33 per month
or $1,534,504 annually, effective the first full month after
this Court approval. The increased monthly MAG payment will be
in effect through October 31, 2003, and thereafter will revert
to an annual MAG payment based upon 100% of the original MAG set
forth in the National Concession Agreement plus 50% of the
original MAG payment set forth in the Alamo Concession
Agreement.  As a result, the annual MAG payment beginning
November 1, 2003 will be the greater of $1,534,504 or 85% of the
gross receipts from the previous Contract Year.  A Contract Year
is defined in the National Concession Agreement as running from
November 1 to October 31.  The annual MAG payment will be
determined according to the terms of the National Concession
Agreement.

The Debtors agreed to pay rent under the Alamo Lease through
January 31, 2003. (ANC Rental Bankruptcy News, Issue No. 26;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


ARMSTRONG: Court Okays Stipulation Extending EPA & FNRT Bar Date
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
a Stipulation entered into by Armstrong World Industries, the
United States Environmental Protection Agency, and the Federal
Natural Resource Trustee, extending the deadline by which the
EPA and the FNRT must file proofs of claim to and including
March 31, 2003. (Armstrong Bankruptcy News, Issue No. 35;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


ASIA GLOBAL CROSSING: Court Fixes February 28 as Claims Bar Date
----------------------------------------------------------------
At the Asia Global Crossing Debtors' request, the U.S.
Bankruptcy Court for the Southern District of New York fixes
February 28, 2003, at 4:00 p.m., prevailing Eastern Time, as the
last date and time for any creditor to file proofs of claim
against the Debtors' estates.

Any person or entity asserting a prepetition claim against the
Debtors must file an original, written proof of claim,
substantially conforming to Official Form No. 10, so as to be
received on or before Feb. 28 by the Debtors.  Original proofs
of claim may either be mailed or delivered by messenger or
overnight courier, to:

          United States Bankruptcy Court
          for the Southern District of New York
          Claims Processing Dept., Room 511
          One Bowling Green
          New York, New York 10004

Proofs of Claim sent by facsimile or telecopy will not be
accepted.

Nine classes of creditors are not required to file a proof of
claim on or before the Bar Date:

     A. Any person or entity that has already properly filed,
        with the Clerk of the United States Bankruptcy Court for
        the Southern District of New York, a proof of claim
        against the Debtors, utilizing a claim form, which
        substantially conforms to the Proof of Claim or Official
        Form No. 10;

     B. Any person or entity:

        -- whose claim is listed on the Debtors' Statements of
           Financial Affairs, Schedules of Assets and
           Liabilities and Schedules of Executory Contracts,

        -- whose claim is not described as "disputed,"
           "contingent," or "unliquidated," and

        -- who does not dispute the amount or nature of the
           claim for the person or entity as set forth in the
           Schedules;

     C. Any person holding a claim for an administrative
        expense, as the term is used in Sections 503(b) and
        507(a) of the Bankruptcy Code;

     D. Any person or entity whose claim has been paid by the
        Debtors;

     E. Any person or entity that holds a claim arising out of
        or based solely on an equity interest in the Debtors;

     F. Any person or entity whose claim is limited exclusively
        to the repayment of principal, interest, and other
        applicable fees and charges on or under any bond or note
        issued by the Debtors; provided, however, that:

        -- the exclusion in this subparagraph will not apply to
           the Indenture Trustee under the applicable Debt
           Instruments,

        -- the Indenture Trustee will be required to file one
           proof of claim, on or before the Bar Date, on account
           of all of the Debt Claims on or under each of the
           Debt Instruments, and

        -- any holder of a Debt Claim wishing to assert a claim,
           other than a Debt Claim, arising out of or relating
           to the Debt Instruments will be required to file a
           proof of claim on or before the Bar Date, unless
           another exception applies;

     G. Any person or entity that holds a claim that has been
        allowed by a Court order entered on or before the Bar
        Date;

     H. Any person or entity that holds a claim solely against
        any of the Debtors' non-debtor affiliates; and

     I. A Debtor in these cases having a claim against another
        Debtor.

Any person or entity that holds a claim arising from the
rejection of an executory contract or unexpired lease as to
which the order authorizing the rejection is dated at least 10
days prior to the Bar Date must file a proof of claim based on
the rejection on or before the Bar Date.  Any person or entity
holding a claim that arises from the rejection of an executory
contract or unexpired lease as to which the order authorizing
the rejection is dated less than 10 days prior to the Bar Date
or thereafter is required to file a proof of claim before the
date as the Court may fix in the applicable rejection order.

Equity interest holders need not file a proof of interest.
The Debtors' common stock, of which 581,947,683 shares were
outstanding as of September 30, 2002, is held by numerous
individuals and entities.  Notice to these holders is
unnecessary because the Debtors have a list of all record
holders of equity interests as of the Petition Date.  (Global
Crossing Bankruptcy News, Issue No. 32; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

Asia Global Crossing's 13.375% bonds due 2010 (AGCX10USR1) are
trading at about 12 cents-on-the-dollar, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AGCX10USR1
for real-time bond pricing.


ASPECT COMMS: President Rod Butters Resigns & Replacement Sought
----------------------------------------------------------------
Aspect Communications Corporation (Nasdaq: ASPT), the leading
provider of enterprise customer contact solutions, announced
that Rod Butters, Aspect's president of worldwide market
development, sales and services, will be leaving the company and
that Aspect has instituted a search for a replacement for
Butters.

"Rod played a vital role during the transformation of Aspect's
sales force. We thank him for his past efforts and wish him well
in his new endeavors," said Beatriz Infante, Aspect's chairman,
president, and chief executive officer. Pending the announcement
of Butters' successor, marketing and sales functions within the
company will report to Infante.

Aspect Communications Corporation is the leading provider of
business communications solutions that help companies improve
customer satisfaction, reduce operating costs, gather market
intelligence and increase revenue. Aspect is a trusted mission-
critical partner with over two-thirds of the Fortune 50, daily
managing more than 3 million customer sales and service
professionals worldwide. Aspect is the only company that
provides the mission-critical software platform, development
environment and applications that seamlessly integrate voice-
over-IP, traditional telephony, e-mail, voicemail, Web, fax and
wireless business communications, while guaranteeing investment
protection in a company's front-office, back-office, Internet
and telephony infrastructures. Aspect's leadership in business
communications solutions is based on more than 17 years of
experience and over 8,000 implementations deployed worldwide.
The company is headquartered in San Jose, Calif., with offices
around the world and an extensive global network of systems
integrators, independent software vendors and distribution
partners. For more information, visit Aspect's Web site at
http://www.aspect.com

As reported in Troubled Company Reporter's January 30, 2003
edition, Standard & Poor's affirmed its 'B' corporate credit
rating and 'CCC+' subordinated debt ratings on Aspect
Communications Corp. At the same time, the ratings were removed
from CreditWatch, where they had been placed on October 25,
2002. The outlook is stable.

San Jose, California-based Aspect Communications is a provider
of software-based call center and customer relationship
management solutions. Total debt outstanding was $173 million as
of December 31, 2002.


ATA HOLDINGS: Red Ink Continues to Flow in Fourth Quarter 2002
--------------------------------------------------------------
ATA Holdings Corp. (Nasdaq:ATAH), parent company of ATA
(American Trans Air, Inc.), reported a fourth quarter loss
available to common shareholders of $57.6 million. This compares
with a loss available to common shareholders of $81.3 million in
the fourth quarter of 2001. ATA ended the fourth quarter with
$200.2 million in unrestricted cash.

Total operating revenues for the fourth quarter of 2002 were
$311.0 million, a 25.6 percent increase compared with the same
quarter in 2001. Scheduled service revenues increased 34.9
percent to $222.1 million. Charter service revenues increased
5.0 percent to $70.5 million. Total operating expenses increased
1.1 percent to $362.1 million.

"Our financial results remain unacceptable," said George
Mikelsons, ATA Chairman and CEO. "Our performance has been
impacted by multiple issues including the reduced demand for air
travel, an out-of-balance Chicago market with weak pricing,
aircraft deliveries that added to our capacity in a difficult
environment, and higher than anyone expected fuel prices. While
we are more than happy to close the books on 2002 and look
forward, in the fourth quarter we did take some significant
steps that set the groundwork for the Company's recovery."

"Shoring up ATA's liquidity, we funded a federally-guaranteed
loan in November that replaced the Company's expiring bank
revolver. We also worked with our banks to create a letter of
credit facility. And, we closed the final part of a nine-
aircraft EETC financing, as well as a single investor long-term
tax lease on a Boeing 737-800."

"We have set in motion a series of cost-savings initiatives that
will produce lower unit costs for 2003. We will increase the
utilization of our aircraft and our flight crews. We have
adopted strategic sourcing to reduce the expense of purchased
goods and services. And, we must recognize the significant
contribution of our employees who have improved our
productivity. We have fewer people on staff today than we did
two years ago, even though our capacity has grown 19 percent."

"At the same time, we are educating the public about what it
means to be 'An Honestly Different Airline.' Our team is
thoroughly reviewing all aspects of the flying experience, from
the point of making a reservation to the passenger exiting the
jetway. We're focusing on making our airline customer-centered,
and reducing the 'hassle factor'. With new planes, all-new gates
at our convenient Chicago-Midway hub, rapid check-in technology,
and our renewed commitment to focus on customers' needs, we have
significantly improved the product our customer is now
receiving."

Fourth Quarter Operating Results:

System-wide revenue passenger miles increased 25.2 percent to
2.99 billion, and available seat miles increased 26.2 percent to
4.55 billion compared with 2001. Total revenue per available
seat mile was 6.84 cents in the fourth quarter of 2002, down 0.4
percent compared with 2001. Mainline cost per available seat
mile was 7.35 cents. CASM excluding special items noted in the
table on page one was 6.83 cents, a decrease of 2.3 percent.

For ATA's scheduled service, RPMs increased 29.7 percent to 2.47
billion, ASMs increased 36.3 percent to 3.66 billion, and
passenger load factor decreased 3.4 points to 67.4 percent
compared with 2001. Scheduled service yield grew 4.0 percent to
9.00 cents and RASM decreased 1.0 percent to 6.06 cents.

For ATA's charter service, ASMs decreased 3.4 percent to 885.3
million; and block hours flown increased 12.5 percent to 8,453
compared with 2001. Charter RASM increased 8.7 percent to 7.97
cents.

The Company's unit fuel costs declined 4.0 percent in the fourth
quarter with our more fuel-efficient fleet compared with the
same period last year even as fuel prices increased 5.6 percent.

Year-to-Date Financial Results:

For the twelve months of 2002, total operating revenues
increased 0.1 percent to $1.28 billion compared with 2001.
Scheduled service revenues increased 8.0 percent to $886.6
million and charter service revenues decreased 14.0 percent to
$309.2 million. Total operating expenses increased 5.1 percent
to $1.44 billion.

The Company had a loss available to common shareholders of
$175.0 million, compared with a loss available to common
shareholders of $81.9 million in the year prior.

Year-to-Date Operating Results:

Compared with 2001, system-wide RPMs increased 6.1 percent to
12.38 billion, and ASMs increased 8.7 percent to 17.60 billion
for the twelve months of 2002. For ATA Holdings Corp., total
RASM decreased 7.9 percent to 7.26 cents. Mainline CASM was 7.58
cents. CASM excluding special items noted in the table on page
one was 7.07 cents, a decrease of 3.2 percent.

For ATA's scheduled service, RPMs increased 14.0 percent to 9.91
billion, ASMs increased 18.9 percent to 13.61 billion, and
passenger load factor decreased 3.2 points to 72.8 percent.
Scheduled service yield declined 5.3 percent to 8.94 cents and
RASM decreased 9.2 percent to 6.51 cents. For ATA's charter
service, ASMs decreased 16.0 percent to 3.98 billion; and block
hours decreased 6.2 percent to 38,134. Charter RASM increased
2.2 percent to 7.77 cents.

Summary of Recent Events:

     --  Obtained a $168 million loan with a $148.5 loan
guarantee from the Air Transportation Stabilization Board
(ATSB).

     --  Launched new "Straight Talk" advertising campaign with
the tagline, "ATA - An Honestly Different Airline," which
reinforces our commitment to customer-friendly travel policies.

     --  Announced new nonstop service from San Francisco to
Cancun, Indianapolis, and St. Petersburg and from St. Petersburg
to Las Vegas, Los Angeles, and San Francisco. Announced
increased frequencies from Indianapolis to Las Vegas, Ft. Myers,
and Ft. Lauderdale and from Chicago-Midway to Denver, Charlotte,
and Minneapolis.

     --  Finished 2002 as number one airline in passenger
boardings in Indianapolis and Chicago-Midway.

     --  System-wide ATA boarded 10 million passengers in 2002--
a Company record.

     --  ATA Connection announced the fifth daily flight from
Lexington, KY to Chicago-Midway.

     --  Achieved a milestone of 100,000 customers registered on
ata.com for travel rewards program.

     --  Enhanced ata.com so that customers who book flights on
line can make hotel reservations via ATA's website.

     --  Completed the two-stage pre-funded $260 million
enhanced equipment trust that financed nine new Boeing 737-800
aircraft delivered in 2002.

Now celebrating its 30th year of operation, ATA is the nation's
10th largest passenger carrier based on revenue passenger miles.
ATA operates significant scheduled service from Chicago-Midway
and Indianapolis to more than 40 business and vacation
destinations. To learn more about the Company, visit the Web
site at http://www.ata.com

                          *     *     *

As reported in Troubled Company Reporter's January 22, 2003
edition, Standard & Poor's affirmed its 'B-' corporate credit
ratings on ATA Holdings Corp., and subsidiary American Trans Air
Inc., and removed them from CreditWatch, where they were placed
September 13, 2001. However, Standard & Poor's lowered its
ratings on various enhanced equipment trust certificates. The
outlook is negative.

"The ratings were affirmed due to ATA's improved liquidity after
receipt of proceeds from a $168 million loan that was 90% backed
by a federal loan guarantee that closed in November 2002," said
Standard & Poor's credit analyst Betsy Snyder. Although the
company's liquidity has been enhanced, its fate will still
depend on the expected recovery in the airline industry.
Prolonged weakness in the industry would negatively affect ATA
and could result in a downgrade. "The downgrades of ATA's
enhanced equipment trust certificates reflect the substantial
deterioration in market values of the Boeing 757-200 aircraft
which form their collateral," Ms. Snyder noted. These planes,
while efficient and widely used, have been under pressure
following the shutdown of discount carrier National Airlines
(which operated solely B757's), US Airways Inc.'s bankruptcy
rejection and renegotiation of financings on its B757-200's, and
bankrupt United Air Lines Inc.'s attempts to reduce debt service
costs on many of its aircraft-backed obligations, including
those that finance B757-200's.

The ratings reflect ATA Holdings' substantial and growing debt
and lease burden and the price competitive nature of the markets
it serves.


AVON PRODUCTS: Reports Improved Performance for Fourth Quarter
--------------------------------------------------------------
Avon Products, Inc., (NYSE: AVP) reported net income of $193.0
million, or $.80 per diluted share, for the fourth quarter of
2002, which was $.01 per share higher than the guidance provided
by the company in December, and $.02 per share higher than its
original outlook for the quarter announced in October. The
higher-than-expected earnings increase reflects further strength
in Avon's U.S. and European operations, as well as performance
in its other regions that was in line with or better than
expectations.

In the previous year's fourth quarter, Avon reported net income
of $110.4 million, or $.46 per diluted share, which included a
special charge of $97.4 million pretax ($68.3 million after tax,
or $.28 per share) related to the company's Business
Transformation initiatives. Excluding the charge in 2001, Avon
said earnings per share increased 8% year-over-year in the
fourth quarter.

Sales in the quarter were at the high end of the company's
expectations, rising 5% to $1.84 billion, versus $1.74 billion
in 2001. Sales of beauty products drove overall sales in the
quarter, rising 9%, reflecting the company's strategic focus on
its beauty business. Excluding the negative effect of foreign
currency translation, sales growth accelerated to 14% in the
quarter, which was better than expected and represented the
highest quarterly increase in five years, driven by record unit
growth of 16% and a 13% increase in active Representatives.

Avon said operating profit rose 10% in the quarter and operating
margin expanded 70 basis points to a record 17.1%, enabling the
company to achieve its full-year target of a 50 basis-point
improvement, excluding unusual items. In addition, the company
said cash flow was stronger than expected in the quarter and
that full-year cash flow from operations of $565 million
exceeded the company's target of $500-550 million, even after
$120 million in cash contributions to its U.S. pension plans
during the year.

Commenting on the results, Andrea Jung, Avon's chairman and
chief executive officer, said, "We are extremely pleased that we
ended the year so strongly and that we have posted three
consecutive years of meeting or beating expectations every
quarter. This performance, especially in light of the extreme
external challenges we faced during the year, clearly
demonstrates the strength of Avon's strategies and management
team around the world today. We entered 2003 more confident than
ever that Avon's transformation is working and that we will
continue to build strength on strength going forward."

                       Full-Year Results

For full-year 2002, Avon reported net income of $534.6 million,
or $2.22 per diluted share, including a net restructuring charge
of $36.3 million pretax ($25.2 million after tax, or $.10 per
share). Avon said earnings for the year were $.01 ahead of its
December guidance and $.02 higher than its October outlook for
the year.

For 2001, Avon reported net income of $444.6 million or $1.85
per diluted share, including a net loss from unusual items of
$82.2 million pretax ($58.6 million after tax, or $.24 per
share).

Avon said that, excluding the effect of unusual items in 2002
and 2001, earnings per share increased 11% to $2.32 in 2002,
versus $2.09 in the prior year.

Sales in 2002 increased 4% to a record $6.17 billion, versus
$5.96 billion in 2001. Excluding the effects of foreign currency
translation, sales climbed 11% year-over-year, which was ahead
of the company's target of 10%, driven by record unit growth of
13% and a 10% increase in active Representatives, with all
geographic regions contributing to the gains.

             Fourth-Quarter Regional Highlights

The U.S. performance, which had been strong all year,
strengthened further in the fourth quarter, capping one of the
best years ever for Avon's largest business unit, despite a weak
U.S. economy. Sales grew 6% in the quarter and operating profit
rose 14%, on top of strong results last year, when fourth-
quarter sales and profits grew 9% and 16%, respectively. Beauty
sales climbed 14%, units increased 10% and active
Representatives grew by 5%, with the number of Representatives
reaching 600,000 in the quarter for the first time. U.S.
operating margin expanded by 140 basis points to a record
fourth-quarter level of 20.7%.

Europe also continued to post robust growth, with fourth-quarter
sales up 28% and operating profit up 37%, on top of 19% and 35%
increases, respectively, in last year's fourth quarter. Sales
growth reflected a 33% increase in units and a 27% jump in
active Representatives in the quarter. The strong profit growth
resulted in a 150 basis-point expansion in operating margin to a
record level of 22.1%. Performance in the region was again
driven by rapid and profitable growth in Russia and
Central/Eastern Europe, as well as double-digit sales and profit
growth in the U.K., the region's largest market.

In the Pacific region, sales increased 9%, operating profit rose
21%, with all major markets posting profit increases, and
operating margin expanded 180 basis points to 18.7% in the
quarter. Units grew 28% in the region, reflecting continued
rapid expansion of Avon's retail presence in China. China's
sales grew 37% in the quarter and the country was a major
contributor to the region's overall profit improvement. Active
Representatives increased 5% in the region.

Latin America posted solid results excluding the impact of
currency translation, with sales up 23% and operating profit up
17% -- the highest growth rates of the year. Sales growth was
driven by an 11% increase in units and a 13% gain in active
Representatives. In dollar terms, sales and profits declined 12%
and 11%, respectively, which was in line with the company's
expectations and reflected the continued weakness of local
currencies against the dollar. Operating margin increased 10
basis points to 25.1%. Brazil's results, while quite strong in
local currency terms, continued to be negatively affected by the
weakness of the real. Mexico posted particularly good results in
the quarter, with dollar sales and operating profit growing at
double-digit rates.

                         2003 Outlook

Commenting on the outlook for 2003, Ms. Jung said the company
has raised its EPS guidance by $.01 per share to $2.55 per
share, which would represent another year of double-digit EPS
growth, in line with Avon's stated long-term targets. The
guidance includes one-time costs of approximately $.05-$.06 per
share -- mainly in the first quarter -- associated with the
strategic repositioning of its beComing brand, announced last
week.

"We have strong momentum upon which to build," said Ms. Jung.
"We anticipate accelerating growth in dollar sales and operating
profits this year, with sales up in the 5-6% range versus 4% in
2002, and operating profit up double digits versus 7% last year.
We are targeting a 100-basis point expansion in operating margin
in 2003, even after approximately doubling incremental spending
on strategic growth initiatives," she said.

Ms. Jung also said Avon is targeting 2003 full-year cash flow in
the range of $650-$700 million, including anticipated U.S.
pension plan contributions of $60 million.

Avon is the world's leading direct seller of beauty and related
products, with $6.2 billion in annual revenues. Avon markets to
women in 143 countries through 3.9 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

As previously reported, Avon Products' September 30, 2002,
balance sheet shows a total shareholders' equity deficit of
about $62.5 million.


BETHLEHEM STEEL: Court Okays Amendment to $450MM DIP Financing
--------------------------------------------------------------
Bethlehem Steel Corporation and its debtor-affiliates obtained
the Court's approval of its third amendment and waiver to its
$450 million DIP Financing Agreement.

The Third Amendment and Waiver to the Revolving Credit and
Guaranty Agreement provides that:

A. Waiver

   Effective December 27, 2002, the DIP Lenders agreed to waive
   any Event of Default under the DIP Credit Agreement, that
   occurred or may have occurred as a result of PBGC's actions.

B. Event of Default

   An Event of Default will only occur if PBGC will:

    (i) file a notice of lien under the Federal Tax Lien Act or
        otherwise establish a lien priority with respect to any
        Lien under ERISA or Section 412 of the Bankruptcy Code
        against any of the Debtors' property.  However, no Event
        of Default will occur if:

        (a) the Debtors file a motion within 10 days after PBGC
            files a Notice of Lien and ask the Court to nullify
            the Lien; or

        (b) the Court issues an order within 20 days after the
            Debtors file their motion nullifying PBGC's lien;

   (ii) enforce collection of any Lien arising under ERISA or
        Section 412 of the Bankruptcy Code against any property
        of the Debtors; or

  (iii) obtain a Court order granting it relief from the
        automatic stay allowing it to exercise its rights
        and remedies against the Debtors with respect to its
        claims and Liens.

C. Affirmative Covenants

   The period within which the Debtors must provide written
   notice to GE Capital and each of the DIP Lenders of the
   occurrence of any other Termination Event by the PBGC is
   shortened from 10 to five days.  Bethlehem Steel Corporation
   is also required to notify GE Capital and each of the DIP
   Lenders within five days of any Debtor, Guarantor or ERISA
   Affiliate's knowledge of:

   1. PBGC's filing of a Notice of Lien, or intention to file,
      of any Notice of Lien;

   2. PBGC's establishment, or intention to establish, a
      priority with respect to any Lien, arising under ERISA or
      the Bankruptcy Code against any property of any Debtor; or

   3. PBGC's filing of a motion with the Court to establish a
      priority with respect to any lien. (Bethlehem Bankruptcy
      News, Issue No. 30; Bankruptcy Creditors' Service, Inc.,
      609/392-0900)


BROOKS-PRI AUTOMATION: Sells Back Warrants to Shinsung Eng'g
------------------------------------------------------------
Brooks-PRI Automation, Inc., (Nasdaq: BRKS) which delivers total
automation for semiconductor manufacturing, sold back to
Shinsung Engineering Co. Ltd., a South Korean manufacturer of
semiconductor clean room equipment, warrants to purchase
approximately 4 million shares of the common stock of Shinsung
that had originally been acquired by PRI Automation, Inc., prior
to Brooks' acquisition of PRI. The Warrants were sold to
Shinsung for $500,000 in January 2003.

The Company has determined that it is appropriate to record a
non-cash impairment charge of $11.5 million against the carrying
value of the Warrants as of December 31, 2002, which had been
established using the Black-Scholes valuation model. As a
result, the Quarterly Report on Form 10-Q that will be filed by
Brooks-PRI in February 2003 for the quarter ended December 31,
2002 will reflect a decrease from the results previously
announced on January 22, 2003 under the categories "Other
assets" and "Stockholders' equity" on the consolidated balance
sheet, while the GAAP net loss for the fourth quarter increases
by $11.8 million to $71.0 million, or a loss of $1.95 per share
after taking into account this impairment charge and related tax
impact. Remaining unchanged is the previously reported loss of
$0.66 per share on a pro forma basis (before amortization of
acquired intangible assets, acquisition-related and
restructuring charges and other charges). The Company is
releasing this information now to update the earnings report
provided on January 22, 2003.

Brooks-PRI (Nasdaq: BRKS) delivers automation solutions to the
global semiconductor industry. The company's hardware,
factory/tool management software, and our professional services
can manage every wafer, reticle and data movement in the fab,
helping semiconductor manufacturers optimize throughput, yield
and cost reduction, while reducing their time to market. Brooks-
PRI products and capabilities are used in virtually every fab in
the world. For information, visit http://www.brooks-pri.com

Brooks-PRI Automation's 4.750% bonds due 2008 are currently
trading at about 74 cents-on-the-dollar.


BUDGET GROUP: Asks Court to Extend Removal Period to April 30
-------------------------------------------------------------
According to Mathew B. Lunn, Esq., at Young Conaway Stargatt &
Taylor LLP, in Wilmington, Delaware, Budget Group Inc., and its
debtor-affiliates are parties to various prepetition state court
actions.  Since the Petition Date, the Debtors have been
primarily focused on the consummation of the North American Sale
and the sale of the Debtors' EMEA Operations.  Thus, the Debtors
have not had enough time to accurately assess whether any state
court actions remain with the Debtors' estates, and if so,
determine whether removal is appropriate.  Therefore, the
Debtors seek a 90-day extension of the current deadline to
protect their right to remove any of the state court actions and
any additional actions discovered through an investigation and
review of asserted claims against their estates.

By this motion, the Debtors ask the Court to extend the deadline
to file notices to remove actions and related proceedings until
the later of:

    -- April 30, 2003; or

    -- 30 days after entry of an order terminating the automatic
       stay with respect to the particular action sought to be
       removed.

Mr. Lunn explains assures the Court that the extension will not
prejudice the rights of the Debtors' adversaries to seek remand.

Rule 9027 of the Federal Rules of Bankruptcy Procedure and
Section 1452 of the Judiciary Procedures govern the removal of
pending civil actions.

Section 1452 specifically provides that:

    "A party may remove any claim or cause of action in a civil
    action other than a proceeding before the United States Tax
    Court or a civil action by a governmental unit to enforce
    such governmental unit's police or regulatory power, to the
    district court for the district where such civil action is
    pending, if such district court has jurisdiction of such
    claim or cause of action under section 1334 of this title."

Bankruptcy Rule 9027 sets forth the time period for filing
notices to remove claims or causes of action and provides, in
pertinent part:

    "If the claim or cause of action in a civil action is
    pending when a case under the [Bankruptcy] Code is
    commenced, a notice of removal may be filed in the
    bankruptcy court only within the longest of: (A) 90 days
    after the order for relief in the case under the
    [Bankruptcy] Code, (B) 30 days after entry of an order
    terminating a stay, if the claim or cause of action in a
    civil action has been stayed under Section 362 of the
    [Bankruptcy] Code, or (C) 30 days after a trustee qualifies
    in a chapter 11 reorganization case but not later than 180
    days after the order for relief."

Bankruptcy Rule 9006(b)(1) permits the Court to enlarge the
removal period.  Bankruptcy Rule 9006(b)(1) provides that:

    "Except as provided in paragraphs (2) and (3) of this
    subdivision, when an act is required or allowed to be done
    at or within a specified period by these rules or by a
    notice given thereunder or by order of court, the court for
    cause shown may at any times in its discretion (1) with or
    without motion or notice order the period enlarged if the
    request therefor is made before the expiration of the
    period originally prescribed or as extended by a previous
    order or (2) on motion made after the expiration of the
    specified time period permit the act to be done where the
    failure to act was the result of excusable neglect."

The Court will convene a hearing on February 18, 2003 to
consider the Debtors' request.  By application of Del.Bankr.LR
9006-2, the current deadline is automatically extended through
the conclusion of that hearing. (Budget Group Bankruptcy News,
Issue No. 14; Bankruptcy Creditors' Service, Inc., 609/392-0900)

DebtTraders says that Budget Group Inc.'s 9.125% bonds due 2006
(BDGP06USR1) are trading at about 23 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BDGP06USR1
for real-time bond pricing.


CARAUSTAR INDUSTRIES: Fourth Quarter Net Loss Stands at $13 Mil.
----------------------------------------------------------------
Caraustar Industries, Inc., (Nasdaq: CSAR) announced fourth
quarter and year-end 2002 results in line with expectations
announced on January 17, 2003. Revenues for the fourth quarter
were $252 million, an increase of 18.3 percent from revenues of
$213 million for the same period in 2002. The company recorded a
net loss for the quarter of $13.3 million. The loss was driven
primarily by restructuring and nonrecurring charges taken in the
quarter. Excluding restructuring charges of $7.3 million and
nonrecurring charges of $4.9 million, both net of taxes, net
income for the quarter was a loss of $1.1 million. Net loss for
the fourth quarter of 2001 was $5.1 million.

For the year ended December 31, 2002, revenues were $936.8
million, a 4.1 percent increase over revenues of $900.3 million
recorded in 2001. The net loss for 2002 was $17.9 million,
compared to a net loss of $14.6 million in 2001. Excluding
restructuring costs and nonrecurring charges recorded in 2002,
net loss for the year was $5.0 million. On a comparable basis,
the net loss for 2001 was $11.9 million.

Thomas V. Brown, president and chief executive officer of
Caraustar, stated, "Caraustar made significant strides in 2002
in regaining mill and converting volume, both in comparison with
our own performance in 2001 and in contrast to the overall
recycled boxboard industry. Total volume for the company
increased 8.8 percent (over 90 thousand tons) compared with
2001, while industry volume declined 2.4 percent. Excluding the
acquisition of the Smurfit-Stone Container Corporation
industrial packaging operations, Caraustar's volume grew 5.6
percent, with the gains primarily in the consumer goods-driven
coated boxboard mill system. The demand for industrial products
continues to shrink as it has for the last three years, and, as
a consequence, the related paperboard markets remain a
challenge. The integration of the SSCC facilities has been
progressing ahead of plan and is meeting our expectations
regarding volume and financial results, despite the sluggish
state of the industrial economy.

"The Sprague, Connecticut mill improved year-over-year operating
income by slightly more than $8 million in spite of a $5 million
decline in gross fiber margin. Sprague was profitable in the
fourth quarter. Our joint venture wallboard facing paper mill in
Indiana doubled its production of gypsum facing paper in 2002,
as it became qualified to supply most of our customer base, and
is expected to double the quantity of wallboard paper again in
2003.

"As has been previously reported, the critical event of 2002 was
the extreme volatility of fiber costs in the second and third
quarters followed by the escalation of energy costs in the
fourth quarter. On a pre-tax basis the gross fiber margins for
the last nine months of 2002 for our complete mill system,
compared with the prior year, declined more than $32 million. In
the fourth quarter, we saw some pricing improvement, and, even
though fiber costs have declined as expected, margins remained
over $10 per ton lower than they were in the fourth quarter of
2001. Energy costs increased $11 per ton in the fourth quarter
2002 when compared to third quarter, more related to concerns
associated with events in the Middle East than seasonal weather
conditions.

"Caraustar generated approximately $85 million of cash flow
(defined as earnings before interest, taxes, depreciation and
amortization) in 2002, including all one-time costs,
contributions from joint ventures, working capital funding of
approximately $10 million to the SSCC facilities in the fourth
quarter and repayment of $45 million in debt. We ended the year
with approximately $65 million of availability under our
revolving credit facility and $34 million of cash on hand.

"We will continue to aggressively respond to customer needs and
the demands of the market. Our gains in new business in 2002
were in the higher growth market segments and directly
associated with lower cost, lighter-weight products replacing
traditional paperboard applications. Caraustar has and will
continue to make the necessary consolidations to match
technology to customer requirements, and supply to demand."

The Company is not providing earnings guidance for 2003 because
of the volatility in key elements, especially fiber and energy,
which is driven by international events beyond our control. On
the conference call, we will discuss our estimates of volume and
confirm the outlook for improvements in our joint ventures, the
Sprague mill, and the SSCC industrial packaging acquisition. The
Company expects continued growth in cash flow as cash provided
by operating activities is supplemented by returns on
restructuring activities, the sale of idle property and tax
refunds.

Caraustar, to which Standard & Poor's assigned a BB Corporate
Credit Rating, is one of the largest and most cost-effective
manufacturers and converters of recycled paperboard and recycled
packaging products in the United States. The company has
developed its leadership position in the industry through
diversification and integration from raw materials to finished
products. Caraustar serves the four principal recycled
paperboard product markets: tubes, cores and cans; folding
carton and custom packaging; gypsum wallboard facing paper; and
miscellaneous "other specialty" and converted products.


CHARMING SHOPPES: Outlines Plans for 2004
-----------------------------------------
Charming Shoppes, Inc., (Nasdaq: CHRS), the retail apparel chain
specializing in women's plus-size apparel, is providing an
outlook and earnings guidance for the fiscal year ending
January 31, 2004.

Through its three core brands, Lane Bryant, Fashion Bug and
Catherines Plus Sizes, Charming Shoppes is the nation's largest
plus-size specialty apparel retailer. The Company's strategy is
to serve the growing fashion apparel needs of women wearing
plus-sizes, through its differentiated and distinct retail
chains.

The Company's financial plans during fiscal year 2004 include
the following:

Projected Sales Revenue:

During the fiscal year ending January 31, 2004, the Company
projects net sales of approximately $2.4 billion, including
comparable store sales for the total corporation of positive
low-single digits. Projections for net sales are planned using
the following assumptions:

     -- The Company is beginning fiscal year 2004 with
approximately 200 fewer stores, or 8% less square footage, than
a year ago. The decrease in store units and square footage is
primarily related to the closing of 130 Fashion Bug and 77 Added
Dimensions stores during the fiscal year ended February 1, 2003,
in conjunction with a restructuring plan announced on January
28, 2002.

     -- A continued uncertain economic outlook, in part due to
the geopolitical climate, may negatively impact consumer
spending.

     -- Comparable store sales projections for the total
corporation for the first half of the fiscal year are planned in
the flat to negative low single digit range, improving to
positive low single digit comps during the second half of the
year. By chain, for the fiscal year, the Company expects
comparable store sales for the Fashion Bug and Catherines Plus
Sizes stores to be in the positive low single digits, and flat
for Lane Bryant.

Projected Store Openings and Closings:

The Company's real estate strategy will be focused on supporting
growth in the plus-size businesses. Plans include the opening of
50-55 new stores in fiscal year 2004. The majority of store
openings will be strip center formats. By brand, approximate
store growth plans are:

                         Openings Relocations Closings
                         -------- ----------- --------
     Lane Bryant            35       20-25       15

     Catherines Plus Sizes  15       15-20       15

     Fashion Bug            1-5      20-25      20-30

     Total                 50-55     55-70      50-60

Projections for square footage at the end of fiscal year 2004
are 15.7 million square feet.

Projected Net Income and Earnings Per Share:

For the fiscal year ending January 31, 2004, the Company
projects net income in the range of $39 - $42 million and
resulting earnings per share in the range of $0.33 - $0.35.
Quarterly projections are provided in the table below.

Interest expense is planned at approximately $18 million for the
year.  Depreciation and Amortization is projected at
approximately $71 million for the year. Capital Expenditures are
estimated at $60 million. Free Cash Flow is projected at
approximately $20 - $25 million for fiscal year 2004.

Charming Shoppes, Inc., whose $130 million Senior Unsecured
Notes are currently rated by Standard & Poor's at 'BB-',
operates 2,248 stores in 48 states under the names LANE
BRYANT(R), FASHION BUG(R), FASHION BUG PLUS(R), CATHERINE'S PLUS
SIZES(R), MONSOON and ACCESSORIZE. Monsoon and Accessorize are
registered trademarks of Monsoon Accessorize Ltd.  Please visit
http://www.charmingshoppes.comfor additional information about
Charming Shoppes, Inc.


CHART INDUSTRIES: Eyeing Two Alternatives to Improve Financials
---------------------------------------------------------------
Chart Industries, Inc., (NYSE:CTI) delayed the release of its
financial results for the fourth quarter and year ended
December 31, 2002. The Company did, however, release information
on sales, orders and backlog for the fourth quarter of 2002. The
Company expects to release complete financial results for 2002
in late-March 2003. This delayed release will allow the Company
more time to complete negotiations with its senior lenders
regarding a restructuring of the Company's debt outstanding, to
finalize its analysis of goodwill impairment under Statement of
Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets," and to determine the impact of such items on
its 2002 financial statements.

The Company had been actively pursuing primarily two
alternatives to improve its financial condition and reduce its
leverage, which were a substantial equity investment in the
Company or a restructuring of the Company's debt outstanding
with its senior lenders. In the fourth quarter of 2002, the
Company commenced negotiations with its senior lenders regarding
such a restructuring and negotiations are proceeding. The
Company hopes to complete these negotiations in February 2003
and then expects to seek shareholder approval for the
transaction. As part of this proposed restructuring, the
Company's existing Credit Agreement would be replaced and
covenant violations existing at December 31, 2002 would be
waived. The Company is hopeful that a restructuring transaction
will be finalized before the end of the first quarter of 2003.
The Company also continues to advance the possible sale of
several non-core assets, the proceeds from which will be used to
reduce debt.

During the fourth quarter of 2002, the Company recorded
significant planned restructuring costs related to the
previously announced closure of its heat exchanger manufacturing
facility in the United Kingdom. In addition, as required under
accounting principles generally accepted in the United States,
the Company completed step one of the 2002 annual impairment
test for goodwill and determined that there is an indication of
goodwill impairment. The Company is in the process of completing
step two of the impairment test to determine the amount of
impairment. The resulting charge would be recorded in the fourth
quarter of 2002. The Company has approximately $170 million of
goodwill recorded prior to any impairment charge.

As a result of the Company's performance and its cumulative tax
loss position, the Company is also evaluating the need to
provide a valuation allowance against its net deferred tax
assets of approximately $27 million. Final terms of the debt
restructuring transaction will have a significant impact on the
amount of the valuation allowance required.

Pursuant to the Company's amended Credit Agreement, the Company
was required to issue to its lenders warrants at December 31,
2002 to purchase, in the aggregate, 773,133 shares of Chart
Common Stock at an exercise price of $0.75 per share. These
warrants have been valued at $0.4 million and will be amortized
to financing costs amortization expense over the remaining term
of the Company's Credit Agreement, which expires in March 2006.
In addition, the interest rate on the Company's debt outstanding
under its Credit Agreement will increase by 25 basis points
beginning in the first quarter of 2003.

Arthur S. Holmes, Chairman and Chief Executive Officer,
commented, "Our current negotiations to restructure Chart's
senior debt and our status with the process of determining the
amount of goodwill impairment prevent us from releasing complete
2002 financial results at this time. In an effort to provide as
much relevant market information to our shareholders as
possible, however, we are releasing fourth-quarter 2002 sales,
orders, and backlog information."

In accordance with the Company's previously announced
organizational changes that were effective October 1, 2002,
beginning with today's information, the Company is reporting
segment financial performance as follows:

    Energy and Chemicals ("E&C") - Includes Chart's Process
Systems, Heat Exchangers, NexGen Fueling and Greenville Tube
business units.

    Distribution & Storage ("D&S") - Includes Chart's cryogenic
containment products, which span the entire spectrum of the
industrial gas market from small customers requiring cryogenic
packaged gases to users requiring custom-engineered cryogenic
storage systems.

    Biomedical - Includes Chart's cryo-biological, medical,
telemetry and other home healthcare product lines, its aluminum
container product line, which serves agricultural markets, and a
variety of other end-use applications.

Sales for the fourth quarter of 2002 were $75.2 million,
increasing approximately two percent from $73.6 million for the
corresponding quarter of 2001. Orders in the fourth quarter of
2002 totaled $66.3 million, compared with $87.8 million in the
third quarter of 2002. Sales for the year ended December 31,
2002 were $296.3 million, down from $328.0 million for the year
ended December 31, 2001.

Commenting on Chart's sales for the year ended December 31,
2002, Mr. Holmes said, "Following a weak first-quarter start,
our 2002 sales stabilized at approximately $75 million per
quarter, or approximately $300 million per year. This sales
level is down almost 10 percent from 2001. The E&C segment has
been relatively flat year-over-year but is showing signs of
increased recovery going forward based upon strong hydrocarbon
processing activity. Our D&S segment took a significant hit in
sales this year, dropping 25 percent from 2001 levels,
reflecting the economic slowdown in the industrial sectors of
North America and Europe. The Biomedical segment demonstrated an
impressive 17 percent increase in sales over 2001 primarily
fueled by strong demand for our MRI products."

Mr. Holmes further commented on orders for Chart's three
business segments, stating, "Our E&C segment enjoyed a much
stronger year for order intake, posting an increase in orders of
31 percent over 2001. Our E&C businesses continue to actively
bid many natural gas, ethylene and other large hydrocarbon
projects worldwide. The healthy order intake has provided a more
robust backlog for this business going into 2003. However, the
industrial gas market continued to experience depressed demand
awaiting the recovery of this sector. Recently, there have been
some promising signs of improved industrial gas demand in Asia.
Following the shutdown of our U.K. heat exchanger operation, we
expect improved profitability for the E&C segment."

"2002 orders in the D&S segment decreased substantially compared
with 2001, caused by the economic slowdown and reductions in
capital spending. A bright spot is our packaged gas products.
New products serving the beverage market are demonstrating
improved demand and our efforts to convert industrial gas end-
users to liquid supply are succeeding. In addition, the
restructuring efforts commenced in 2002 are beginning to produce
lower costs and improved profitability for D&S products,
offsetting downward price pressures from the weak industrial
markets. LNG receiving and distribution activity in Europe also
is creating strong business for D&S products."

"Biomedical products experienced increased demand in 2002, with
orders up 11 percent over 2001. Demand continues to be strong,
although the product mix is changing. I expect continued strong
growth for this segment in 2003."

Mr. Holmes concluded, "Looking ahead, I am cautiously optimistic
that our products and the markets we serve will experience an
increase in demand in 2003. The completion of our planned
manufacturing consolidations and operational restructuring
activities in the first half of 2003 should contribute to
improved financial performance. We expect to conclude our debt
restructuring in a way that will provide for our long-term
capital needs and remove the aura of uncertainty that has
characterized our financial situation in 2002."

        Fourth-Quarter 2002 Sales, Orders and Backlog

Sales for the fourth quarter of 2002 were $75.2 million versus
$73.6 million for the fourth quarter of 2001, an increase of
$1.6 million, or two percent. E&C segment sales increased 31
percent to $25.3 million in the fourth quarter of 2002, from
sales of $19.2 million in the fourth quarter of 2001. The
Company commenced production on the heat exchangers and cold
boxes for a significant Bechtel LNG facility order adding $2.3
million in sales to the fourth quarter of 2002. General
improvements in the hydrocarbon processing market of the E&C
segment contributed to the additional increase in sales. D&S
segment sales decreased 14 percent, with fourth-quarter 2002
sales of $34.0 million, compared with $39.5 million for the same
quarter in 2001. A $4.9 million decline in the worldwide
standard tank business, where the Company's customers continue
to delay capital spending, primarily accounted for this
decrease. Biomedical segment sales increased seven percent to
$15.9 million in the fourth quarter of 2002, compared with sales
of $14.9 million in the fourth quarter of 2001. This increase
was primarily attributable to MRI product sales, which were up
$700,000 between the two quarters.

Chart's consolidated orders for the fourth quarter of 2002
totaled $66.3 million, compared with orders of $87.8 million for
the third quarter of 2002. Chart's consolidated firm order
backlog at December 31, 2002 was $69.3 million, compared with
$78.3 million at September 30, 2002.

E&C orders for the fourth quarter of 2002 totaled $16.4 million,
compared with $38.8 million in the third quarter of 2002. The
decrease in orders in the fourth quarter of 2002 is attributable
to the inclusion in the third quarter of 2002 of significant
orders from Bechtel for heat exchangers and cold boxes to equip
a large LNG facility. E&C backlog at December 31, 2002 was $44.2
million, down 17 percent from the September 30, 2002 backlog of
$53.1 million, but a strong 36 percent increase over the $32.5
million in backlog at the start of 2002.

D&S orders for the fourth quarter of 2002 totaled $33.6 million,
compared with $30.2 million for the third quarter of 2002,
primarily as a result of improved orders for industrial and
beverage packaged gas systems.

Biomedical orders for the fourth quarter of 2002 totaled $16.3
million, compared with $18.8 million for the third quarter of
2002. A weak European market for liquid oxygen systems was the
primary cause of this fourth-quarter decline in orders.

Chart Industries, Inc., is a leading global supplier of standard
and custom-engineered products and systems serving a wide
variety of low-temperature and cryogenic applications.
Headquartered in Cleveland, Ohio, Chart has domestic operations
located in 11 states and international operations located in
Australia, China, the Czech Republic, Germany and the United
Kingdom.

For more information on Chart Industries, Inc., visit the
Company's Web site at http://www.chart-ind.com

                        *    *    *

As reported in Troubled Company Reporter's November 6, 2002
edition, Chart Industries admitted they're actively pursuing
several financial restructuring initiatives in order to improve
the Company's financial condition and reduce its leverage. This
includes a potential substantial equity investment in the
Company. "[W]e are in advanced negotiations with one investor
group toward that end. We are also considering alternatives with
our senior lenders regarding a restructuring of the Company's
outstanding senior debt."

"[We are] hopeful that we will reach agreement on an equity
investment and/or debt restructuring in the fourth quarter of
2002. At the same time, we have advanced the possible sale of
several non-core assets, the proceeds from which will be used to
reduce debt."


CLARENT CORP: Verso Obtains Court Nod to Acquire Debtor's Assets
----------------------------------------------------------------
Verso Technologies, Inc. (Nasdaq: VRSO), an integrated
communications solutions company, announced that the Bankruptcy
Court having jurisdiction over Clarent's pending Chapter 11
reorganization has approved Verso's acquisition of substantially
all of Clarent's business assets.

As a result, Verso and Clarent will move forward to complete the
acquisition process, with the closing of the transaction
expected to occur by February 13, 2003. Verso will discuss
further details of the transaction during its fourth quarter
investor conference call, which will be held in mid-February.

On December 16, 2002, Verso and Clarent announced that they had
signed a definitive agreement whereby Verso would acquire
substantially all of the business assets of Clarent Corporation,
a provider of Voice over Internet Protocol solutions for next
generation networks and enterprise convergent solutions, for
$9.8 million, which Verso currently intends to finance through a
combination of cash and notes. To facilitate the transaction,
Clarent filed a voluntary petition for reorganization under
Chapter 11 of the Bankruptcy Code.

Clarent's product families address three main markets: the
converged enterprise, long distance bypass and IP-based voice
services over last-mile broadband networks. Key products include
next generation switching and call control software, high
density media gateways, multi-service access devices, signaling
and announcement servers, network management systems and high
demand telephony applications based on packet-switched
technology.

Verso Technologies provides integrated switching and solutions
for communications service providers who want to develop IP-
based services with PSTN scalability and quality of service.
Verso's unique, end-to-end native SS7 capability enables
customers to leverage their existing PSTN investments by
ensuring carrier-to-carrier interoperability and rich billing
features. Verso's complete VoIP migration solutions include
state of the art hardware and software, OSS integration, the
industry's most widely used applications and technical training
and support. For more information about Verso Technologies,
contact the company at http://www.verso.com

Clarent Corporation is a leading provider of softswitch and
enterprise convergence solutions for next generation networks.
Clarent solutions enable service providers and enterprises to
quickly deploy an integrated network capable of carrying both
voice and data traffic, deliver capital and operating expense
savings, and generate new revenue opportunities with innovative
services. Founded in 1996, Clarent is headquartered in Redwood
City, California, and has offices in North America, Europe and
Asia. For more information please visit http://www.clarent.com


COMMONWEALTH BIOTECH.: Closes 2002 with Major Loss Reductions
-------------------------------------------------------------
Commonwealth Biotechnologies, Inc. (NASDAQ:CBTE), a life
sciences contract research organization and biotechnology
company, announced execution of nearly $1.3 million in signed
contracts in January.

Virtually all of the work is related to new and on-going bio-
defense activities at the Company and all of the revenue is
expected to be realized in calendar year 2003. The new contracts
are with both federal agencies and private companies, but
further details are unavailable due to the nature of the work
being done.

"The exciting aspect of all this is that we have a continuing
pipeline of several other pending high dollar contracts with
other federal agencies and private companies, many of which we
anticipate signing in the coming months," explained Dr. Robert
B. Harris, President and CEO of CBI. "CBI is uniquely positioned
to perform bio-defense related work, and we have gained
considerable recognition in the industry for our efficiency,
timeliness, and creativity when it comes to analysis of
difficult laboratory samples. "

The new contracts come on the heels of the close of fiscal year
2002. Its unaudited financial reports for the year-to-date
continue to show that the Company is rigorously controlling
expenses while working to maintain top-line revenues. The
Company's 10-KSB is expected to be released on or before
March 31. For the year, the Company is expected to report a loss
of approximately $625,000, which compares with a loss of about $
1.7 million in fiscal year 2001. Gross revenues in 2002 were
about $ 4.4 million, compared to $ 4.8 million for 2001, which
included $400,000 in one-time licensing fees received by the
Company. Perhaps of equal importance, for the first time since
its initial public offering in 1997, the Company realized
positive cash flows of approximately $222,000 for the entire
year. The Company's EBITDA of nearly $300,000 was also positive
for the first time.

"We are clearly disappointed that revenues are essentially flat
compared to last year," said Dr. Richard J. Freer, Chairman and
COO, "but at the same time, CBI performed relatively well in one
of the most difficult years in the biotech sector. CBI has re-
focused itself into three principal areas, bio-defense,
comprehensive contract work, and clinical trial support, and we
are just beginning to see the fruits of our initiatives. "

Mr. James H. Brennan, Controller of the Company attributes CBI's
improvement in performance to tight daily control of
expenditures and significant decreases in operating expenses.
"CBI is increasing its productivity with less staff than we had
even one year ago. These are all very positive trends."

Founded in 1992, CBI is located at 601 Biotech Drive, Richmond,
VA 23235 (1-800-735-9224). The company occupied its 32,000
square foot facility in December, 1998. CBI has provided
comprehensive research and development services to more than
2,700 private, government, and academic customers in the global
biotechnology industry. For more information, visit CBI on the
Web at http://www.cbi-biotech.com

                         *    *    *

         Going Concern Uncertainty and Management Plan

In its Form 10-Q filed on November 14, 2002, Commonwealth
Biotechnologies disclosed:

"The financial statements have been prepared assuming the
Company will continue as a going concern. The Company incurred
losses totaling $ 232,336 during the nine month period ended
September 30, 2002 and has a history of losses that have
resulted in an accumulated deficit of $8,470,522 at September
30, 2002. In addition, the Company has had negative cash flows
in three of the past five years. The years in which the Company
reached positive cash flows were years in which equity offerings
were completed. However during the nine-month period ended
September 30, 2002, the Company has experienced positive cash
flows from operations based on actions taken by management to
affect the continuation of revenue and the reduction of
expenditures.

"Management has taken a number of steps to improve cash flow and
liquidity.  Beginning in the summer of 2001, the Company reduced
personnel levels, curtailed research and development expenses,
reduced marketing expenditures, and deferred directors' fees and
a portion of officers' compensation.  The Company has also
reduced or delayed expenditures on items that are not critical
to operations.  The Company is in active negotiations with a
number of parties with respect to strategic transactions that,
if consummated, would favorably impact the Company's financial
condition (see note 4 below). There can be no assurances,
however, that any such transactions will be consummated.

"On August 30, 2002 the Company completed a private placement of
335,555 shares of common stock at a purchase price of $.90 per
share and warrants to purchase an additional 83,889 shares of
common stock. The purchase agreement requires the Company to use
its best efforts to prepare and file with the Securities and
Exchange Commission as soon as practicable a registration
statement under the Securities Act with respect to the resale of
these securities. Net proceeds to the Company from this private
placement amounted to $262,450 and are to be used to increase
the marketing efforts of the Company.

"There can be no assurance that any funds required during the
next twelve months or thereafter can be generated from
operations or that if such required funds are not internally
generated that funds will be available from external sources
such as debt or equity financing or other potential sources. The
lack of additional capital resulting from the inability to
generate cash flow from operations or to raise capital from
external sources would force the Company to substantially
curtail or cease operations and would, therefore, have a
material adverse effect on its business. Further, there can be
no assurance that any such required funds, will be available on
attractive terms or that they will not have a significantly
dilutive effect on the Company's existing shareholders.

"There is substantial doubt about the Company's ability to
continue as a going concern. These financial statements do not
include any adjustments relating to the recoverability or
classification of asset carrying amounts or the amounts and
classification of liabilities that may result should the Company
be unable to continue as a going concern."


CONSECO INC: Wins Final Approval to Obtain $125MM DIP Financing
---------------------------------------------------------------
In her Final Order, Judge Doyle permits Conseco Finance
Corporation and its debtor-affiliates to obtain $125,000,000 of
DIP Financing from:

          Amount               Lender
          ------               ------
          $25,000,000          Lehman Capital
          $25,000,000          U.S. Bank
          $75,000,000          JC Flowers & Co. LLC and
                               Fortress Investment Group LLC

The salient terms of the DIP Facility are:

Borrowers:      Conseco Finance Corp.
                Conseco Finance Credit Corp.

Guarantors:     Conseco Finance Services Corp.
                CIHC, Incorporated

Administrative
Agent:          FPS DIP LLC, a Fortress/Flowers affiliate.

Commitment:     $125,000,000, in the form of a:

                     $65,000,000 revolving credit facility and a

                     $60,000,000 term loan.

Maturity Date:  April 16, 2003, or earlier if the Asset Purchase
                Agreement is terminated.

Mandatory
Prepayments:    Daily cash sweeps of cash in excess of
                $1,000,000 book balance will be used to
                pay down the DIP Facility Revolver.
                Proceeds from asset sales will be used
                to pay-down the Revolver and then the
                Term Loan.

Priority:       All borrowings constitute superpriority
                administrative claims against the Debtors'
                estates pursuant to 11 U.S.C. Sec. 364(c)(1).

Postpetition
Liens:          The Debtors' obligations to repay amounts
                borrowed from the DIP Lenders are secured,
                pursuant to 11 U.S.C. Secs. 364(c)(2) and
                (3), by perfected first-priority liens on all
                otherwise unencumbered assets and junior liens
                on all otherwise encumbered property, subject
                only to the Carve-Out.

Carve-Out:      The DIP Lenders agree, in the event of a
                default, to a $500,000 carve-out from
                their liens to allow for payment of
                professionals retained by the Debtors, any
                Official Committees, and fees imposed by
                the United States Trustee or the Court
                Clerk.

Fees:           The Debtors agree to pay a variety of fees:

                 (a) a 0.50% per annum Unused Commitment Fee
                     on every dollar not borrowed;

                 (b) a $1,950,000 Commitment Fee to FPS DIP
                     LLC for the Revolving Loan Facility;

                 (c) a $1,800,000 Commitment Fee to U.S. Bank
                     for the Term Loan Facility; and

                 (d) a $50,000 monthly Servicing Fee to
                     FPS DIP LLC.

Interest Rate:  10% per annum.  In the event of a default, the
                Interest Rate increases by 2% per annum.

DebtTraders reports that Conseco Inc.'s 10.750% bonds due 2008
(CNC08USR1) are trading at about 13 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CNC08USR1for
real-time bond pricing.


COVANTA ENERGY: Court Approves Fenelus Settlement Agreement
-----------------------------------------------------------
Covanta Energy Corporation and its debtor-affiliates obtained a
Court order authorizing, but not requiring, Covanta Energy
Services, Inc., and Covanta Lee, Inc. -- the Defendants -- to
enter into:

   (i) a settlement agreement by and among the Defendants,
       Claudette Fenelus, as Co-Personal Representative of the
       Estate of Auguste Masse, deceased, on behalf of and for
       the benefit of Louise Dina Masse, and Jose Masse -- the
       Movant -- and American International Group, Inc. to
       resolve all claims and counterclaims among the Parties
       in connection with that certain wrongful death action
       titled "Claudette Fenelus and Jenny Masse, as Co-Personal
       Representatives of the Estate of Auguste Masse, on behalf
       of and for the benefit of Carl Auguste Masse, a Minor;
       Cybill Masse, a minor; Jenne Masse; Jose Martin Masse, a
       Minor; and Louise Dina Masse, a Minor vs. Covanta Lee,
       Inc. and Covanta Energy Services, Inc. asserted against
       the Defendants by Movant in Florida state court; and

  (ii) a related agreement with AIG.

                       The Insurance Policy

Prior to the Petition Date, the Debtors maintained and paid for
the Commercial General Liability Insurance Policy of the period
of October 20, 2000 to October 20, 2001.  Under the terms of the
Insurance Policy, AIG pays certain attorneys' fees, litigation
costs, losses, arising from certain claims, including the claim
arising from those activities the Movant alleges in the Florida
Action.  However, pursuant to Payment Agreements between AIG and
certain of the Debtors and their affiliates and the Insurance
Policy, the Debtors have, among other obligations, a $250,000
per occurrence retention obligation to AIG for losses paid
pursuant to the Insurance Policy -- the Retention Obligation.
Therefore, any losses paid by AIG pursuant to the Insurance
Policy will subject the Debtors to a claim by AIG for payment of
the Retention obligation.

In addition to the Retention Obligation, the Insurance Program
also imposes, among other obligations, an Allocated Loss
Adjustment Expense on certain of the Debtors.  The Payment
Agreements provide that if the losses are within the amount of
the Retention Obligation, certain of the Debtors become liable
of the Loss Adjustment Obligation, which include among other
things, attorneys' fees and defense costs.  However, if losses
paid by AIG pursuant to the Insurance Policy exceed the
Retention Obligation, the Loss Adjustment Obligation would be
reduced by multiplying the amount of the allocated Loss
Adjustment Expenses by the fraction with a numerator equal to
$250,000 and denominator equal to the total of the losses for an
occurrence. Accordingly, any losses paid by AIG pursuant to the
Insurance Policy could subject certain of the Debtors to a claim
by AIG for payment of the Loss Adjustment Obligation.

The Retention and Loss Adjustment Obligations as well as the
Debtors and its affiliates' other obligations are secured by
collateral AIG held.  The collateral includes, but not limited
to:

     (i) letters of credit amounting to $38,400,000; and

    (ii) a surety bond for $19,500,000.

In addition, a Loss Stabilization Fund is held and maintained by
AIG or certain of its affiliates for obligations of certain of
the Debtors or their non-debtor affiliates.

                          The Settlement

Salient terms of the Settlement Agreement are:

1. In full satisfaction of all of the Movant's claims in the
   Florida Action, including any and all claims against the
   Defendants and any of the Debtors, AIG will pay the Movant
   $1,200,000;

2. In consideration for the Settlement Payment, the Movant will
   release and dismiss with prejudice any and all claims against
   the Defendants, any of the Debtors and AIG claimed in,
   related to or in connection with the Florida Action,
   including, without limitation, any and all rights to continue
   to or to assert any unsecured prepetition claim in the
   Debtors' bankruptcy proceeding;

3. The Settlement Agreement does not intend to or does not
   include payment for or constitute any release of any claims
   of the Co-Plaintiff in the Florida Action, and any remaining
   claims will survive the Settlement Agreement and proceed as
   filed; and

4. The Settlement Agreement will not become effective until it
   has been approved by the Court.

As a condition precedent to implementation of the Settlement
Agreement, AIG, the Debtors and their affiliates, agree that:

1. Any claim AIG may have against the Defendants or any Debtors
   for any Retention Obligation in connection with the payment
   of the Settlement Payment will be resolved in full by
   application of the $250,000 Retention Obligation to the Loss
   Stabilization Fund, held by and maintained with AIG;

2. Upon the application of the Retention Obligation, there will
   be no further requirement of any further Retention
   Obligations by the Defendants or nay of the Debtors to AIG in
   connection with the Settlement Payment, and AIG will release
   any and all rights to continue to or to assert any claim
   against the Debtors or their affiliates in connection with
   the Settlement Payment or the Florida Action, provided that
   both AIG and the Debtors retain all rights and claims with
   respect to calculation and payment to the other of any Loss
   Adjustment Obligations in connection with the Florida Action;

3. Payment of the Settlement Payment and application of the
   Retention Obligation to the Loss Stabilization Fund is
   without prejudice to AIG's position with respect to
   calculation of the Loss Adjustment Obligation in connection
   with the Florida Action, any future claims pursuant to the
   Insurance Program or any other insurance policy of the
   Debtors, and any premium due under the Insurance Program,
   and is without prejudice to the Debtors' position with
   respect to the calculation of the Loss Adjustment Obligation
   in connection with the Florida, any future claims pursuant
   to the Insurance Program or any other insurance policy of the
   Debtors;

4. Except as set forth in the AIG Agreement, AIG reserves all
   of its rights under the Insurance Program, including, without
   limitation, the right to collect all other amounts due or
   that may become due under the Insurance Program and the right
   to arbitrate any disputes thereunder, and the Debtors and
   their affiliates reserve all rights to object; and

5. The AIG Agreement will not become effective until it has
   been approved by this Court. (Covanta Bankruptcy News, Issue
   No. 22; Bankruptcy Creditors' Service, Inc., 609/392-0900)


COVENTRY HEALTH: S&P Affirms BB+ Counterparty Credit Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+'
counterparty credit rating on Coventry Health Care Inc., and
revised the company's outlook to positive reflecting its
improved capital adequacy and very strong profitability and
operating cash flows.

At the same time, Standard & Poor's affirmed its 'BB+' debt
rating on Coventry's $175 million senior notes due 2012.

Standard & Poor's remains cautious about the company's
acquisition-based growth strategy and the potential for
aggressive competitor pricing in western and central
Pennsylvania, which is one of the company's core markets.

"The company's business position is expected to remain very
good," said Standard & Poor's credit analyst Joseph Marinucci.
"Excluding acquisitions, enrollment is expected to increase
moderately to between 2 million-2.1 million members in 2003."

Consolidated earnings strength is expected to remain at or above
its currently strong level but could be hindered by aggressive
competitor pricing in western and central Pennsylvania, which is
one of the company's core markets. Despite the expectation for
strong bottom-line performance in 2003, Coventry's capital
adequacy is likely to be moderately diminished in because of the
combination of revenue growth and dividends paid to the holding
company. As a result, statutory surplus is expected to increase
modestly by about $30 million and capital adequacy is expected
to be 120%-130% as measured by Standard & Poor's capital model,
which is considered very good to strong. If Coventry were to
achieve Standard & Poor's earnings expectations for 2003, debt
leverage and interest coverage metrics would be considered
conservative for the rating level.


DAN RIVER INC: Dec. 28 Working Capital Deficit Tops $54 Million
---------------------------------------------------------------
Dan River Inc., (NYSE: DRF) reported results for the fourth
quarter and year ended December 28, 2002. Net sales for the
fourth quarter of fiscal 2002 were $153.2 million, up $7.4
million or 5.0% from $145.8 million in the fourth quarter of
fiscal 2001. For the fourth quarter of fiscal 2002, the Company
reported net income of $4.2 million. These results compare to a
net loss of $10.0 million for the fourth quarter of fiscal 2001.

Sales of Dan River's home fashions products for the fourth
quarter of fiscal 2002 were $112.1 million, up $3.4 million or
3.1% from the fourth quarter of fiscal 2001. Sales of apparel
fabrics were $31.3 million, up $3.7 million or 13.3%, and sales
of engineered products were $9.8 million, up $0.3 million or
2.9%.

For fiscal 2002 net sales were $612.9 million, down $18.1
million or 2.9% from $631.1 million for the 52 weeks of fiscal
2001. Before the cumulative effect of a change in an accounting
principle related to goodwill, the Company reported income of
$7.4 million for fiscal 2002, compared to a net loss of $20.9
million for fiscal 2001.

For the 2002 fiscal year, net sales of Dan River home fashions
products were $441.2 million, down $28.7 million, or 6.1%, from
fiscal 2001. Net sales of apparel fabrics were $131.5 million,
up $12.6 million or 10.6%, and net sales of engineered products
were $40.3 million, down $2.0 million or 4.8%.

At December 28, 2002, the Company's balance sheet shows that
total current liabilities exceeded total current assets by about
$54 million.

"We are pleased to be able to deliver these fourth quarter and
full year operating results," commented Joseph L. Lanier, Jr.,
Chairman and CEO. "At this time last year, we had set in motion
a plan that would allow us to return to our historic levels of
profitability. All the necessary actions had been taken to bring
inventory and capacity levels more in line with the current
business environment. Our expectations materialized in 2002 as
our operations ran at more normal levels, raw material prices
declined, and our product mix and margins improved.

"Accordingly, we were able to generate significantly increased
cash flow in fiscal 2002 due to the successful execution of our
plan and our focus on working capital management," commented Mr.
Lanier, "enabling us to repay $73.4 million of debt during
fiscal 2002. Total debt at year end fiscal 2002 was $252
million, down from $369 million just two years ago. Both our
existing credit facility and our senior subordinated notes
mature this year in the third and fourth quarter, and
accordingly, they are reflected in the current portion of long
term debt on our balance sheet. We are currently monitoring
market conditions and intend to refinance our bank debt with a
new credit facility and our senior subordinated notes with a new
issue of notes when market conditions are favorable. We expect
that we will complete these refinancings prior to the respective
maturities of our existing credit facility and notes."

In closing, Mr. Lanier said, "As we look to fiscal 2003, we
presently expect sales and operating results similar to fiscal
2002. For the full fiscal year of 2003, we are anticipating net
income of $0.40 to $0.45 per share. In the first quarter of
fiscal 2003, we are expecting net income of $0.05 to $0.10 per
share."

The fiscal 2001 fourth quarter results include net nonrecurring
pre-tax charges of $4.3 million, consisting mostly of a noncash
writedown in connection with the manufacturing consolidation
announced by the Company in December 2001. In addition, in the
fourth quarter of fiscal 2001 the Company recorded $3.5 million
in bad debt expense related to the Kmart Corporation bankruptcy
filing.

Included in the full fiscal 2002 results is a one-time increase
in income tax expense of $2.8 million, attributable to the tax
law changes associated with the Job Creation and Worker
Assistance Act of 2002, and a $1.6 million pre-tax charge ($1.0
million after tax) for bad debt expense related to the Chapter
11 filing of Kmart Corporation. The fiscal 2001 results include
a one-time tax benefit of $5.0 million recorded as a result of
the completion of an IRS examination and goodwill amortization
expense of $3.6 million.

In compliance with the new accounting pronouncement, SFAS No.
142, "Impairment of Goodwill and Intangible Assets," the Company
completed the required transitional impairment test of goodwill
in the third quarter of fiscal 2002. As a result of the test, a
$20.7 million non-cash charge has been recorded to reflect the
writedown of goodwill. This writedown reflects impairment of
goodwill in our engineered products, apparel fabrics and import
specialty products businesses, and is reported as the cumulative
effect of a change in accounting principle as of the first day
of fiscal 2002. Including this effect of the change in
accounting principle, the Company reported a net loss of $13.3
million for fiscal 2002.

The Company has also announced that its annual meeting of
shareholders will be held at 10 a.m. Eastern Time on April 25,
2003, at the Riverview Inn, Country Club Drive, in Danville,
Virginia. Shareholders of record on February 28, 2003 will be
eligible to participate in and vote at the annual meeting.


DILLINGHAM CONSTRUCTION: Voluntary Chapter 11 Case Summary
----------------------------------------------------------
Lead Debtor: Dillingham Construction Holdings, Inc.
             P.O. Box 1089
             Pleasanton, California 94588-8535

Bankruptcy Case No.: 03-40516

Debtor affiliates filing separate chapter 11 petitions:

     Entity                                     Case No.
     ------                                     --------
     Dillingham Construction Corp.              03-40517
     Watkins Engineers and Constructors, Inc.   03-40518
     Dillingham Construction N.A., Inc.         03-40519
     Dillingham Construction Pacific Basin      03-40520
     Nielsen Dillingham Builders, Inc.          03-40521
     Dillingham Construction Pacific            03-40522
     Inland Industrial Contractors, Inc.        03-40523
     Construction Design, Inc.                  03-40524
     Dillingham Construction Overseas           03-40525
     Paclantic Construction, Inc.               03-40526

Type of Business: The Debtors provide general construction,
                  design/build, construction management,
                  maintenance and emergency response services.

Chapter 11 Petition Date: January 28, 2003

Court: Northern District of California (Oakland)

Judge: Edward D. Jellen

Debtors' Counsel: Michael H. Ahrens, Esq.
                  Sheppard, Mullin, Richter and Hampton
                  4 Embarcadero Center 17th Fl.
                  San Francisco, CA 94111
                  Tel: 415-434-9100


EGS NEW VENTURES: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: EGS New Ventures Corp.
        1400 Smith Street
        Houston, Texas 77002

Bankruptcy Case No.: 03-10673

Type of Business: The primary purpose of Debtor, an affiliate
                  of Enron Corp., is to hold the ownership
                  interests of its four subsidiaries: Louisiana
                  Resources Company; LRCI, Inc.; Louisiana Gas
                  Marketing Company; and LGMI, Inc.

Chapter 11 Petition Date: February 5, 2003

Court: Southern District of New York (Manhattan)

Judge: Arthur J. Gonzalez

Debtors' Counsel: Brian S. Rosen, Esq.
                  Weil, Gotshal & Manges LLP
                  767 Fifth Avenue
                  New York, New York 10153
                  212-310-8602
                  Fax: 212-310-8007

                  and

                  Melanie Gray, Esq.
                  Weil, Gotshal & Manges LLP
                  700 Louisiana, Suite 1600
                  Houston, Texas 77002
                  Telephone: (713) 546-5000

Total Assets: ($166,134,058)

Total Debts: $40,161,806


EROOMSYSTEM: Fails to Satisfy Nasdaq Continued Listing Standards
----------------------------------------------------------------
eRoomSystem Technologies Inc., (Nasdaq: ERMS) received a Nasdaq
Staff Determination indicating that the company has failed to
comply with the minimum bid price requirement for continued
listing on the Nasdaq SmallCap Market as specified in Nasdaq
Marketplace Rule 4310(C)(4). The company has requested an oral
hearing before the Nasdaq Listing Qualifications Panel to review
the Nasdaq Staff Determination. Such hearing is expected to
occur no later than March 21, 2003. There, however, can be no
assurance that the Nasdaq Panel will grant the company's request
for continued listing.

eRoomSystem Technologies is a full-service in-room provider for
the lodging and travel industries. Its intelligent in-room
computer platform and communications network supports
eRoomSystem's line of fully automated and interactive
refreshment centers (minibars), room safes, ambient trays and
other proposed in-room applications. eRoomSystem's products are
installed in major hotel chains both domestically and
internationally.

                         *    *    *

                  Going Concern Uncertainty

In its SEC Form 10-QSB filed on November 14, 2002, the Company
reported:

Since inception, the Company has suffered recurring losses.
During the year ended December 31, 2001 and the nine months
ended September 30, 2002, the Company had losses of $2,444,411
and $1,942,775, respectively. During the year ended December 31,
2001 and the nine months ended September 30, 2002, the Company's
operations used $1,725,729 and $1,625,275 of cash, respectively.
These matters raise substantial doubt about the Company's
ability to continue as a going concern. Management is attempting
to obtain debt and equity financing for use in its operations.
Management's plans include modifying the costs of the Company's
products by using an outside manufacturer, reducing the sales
price of products to increase sales volume and completing a
private placement offering of up to $2,500,000 from the issuance
of a convertible promissory note and shares of Series D
Preferred Stock. Realization of profitable operations or
proceeds from the financing is not assured. The accompanying
financial statements do not include any adjustments relating to
the recoverability and classification of asset carrying amounts
or the amount and classification of liabilities that might
result should the Company be unable to continue as a going
concern.


FC CBO II: S&P Places BB Class B Notes Rating on Watch Negative
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on the
class A and B notes issued by FC CBO II Ltd., an arbitrage CBO
transaction managed by Bank of Montreal, on CreditWatch with
negative implications. The ratings on the class A and B notes
had previously been lowered on August 9, 2002.

The CreditWatch placements reflect factors that have negatively
affected the credit enhancement available to support the rated
notes since the previous rating action. These factors include
par erosion of the collateral pool securing the rated notes and
deterioration in the credit quality of the performing assets in
the pool.

Standard & Poor's noted that as of the most recent monthly
trustee report (Dec. 31, 2002), the class A par value ratio was
at 113.6%, versus the minimum required ratio of 119% and a ratio
of 115.6% at the time of the August 2002 rating action. The
class B par value ratio was 103.7%, versus its minimum required
ratio of 110% and a ratio of 106.3% at the time of the August
2002 rating action. Currently, $155.7 million (or approximately
17.7%) of the assets in the collateral pool come from obligors
rated 'D', 'SD', or 'CC'.

The credit quality of the collateral pool has also deteriorated
since the previous rating action. Currently, $62 million (or
approximately 7%) of the performing assets in the collateral
pool come from obligors with ratings in the 'CCC' range, and $97
million (or approximately 13%) of the performing assets come
from obligors with ratings on CreditWatch negative.

As part of its analysis, Standard & Poor's will be reviewing the
results of the current cash flow runs generated for FC CBO II
Ltd. to determine the level of future defaults the rated
tranches can withstand under various stressed default timing and
LIBOR scenarios, while still paying all of the rated interest
and principal due on the notes. The results of these cash flow
runs will be compared with the projected default performance of
the performing assets in the collateral pool to determine
whether the ratings assigned to the notes remain consistent with
the credit enhancement available.

               RATINGS PLACED ON CREDITWATCH NEGATIVE

                         FC CBO II Ltd.

                      Rating
     Class      To              From     Balance (Mil. $)
     A          AA/Watch Neg    AA       690.464
     B          BB/Watch Neg    BB       66.146


FISHER COMMS: Williams O. Fisher Discloses 5.1% Equity Stake
------------------------------------------------------------
William O. Fisher beneficially owns 437,904 shares of the common
stock of Fisher Communications, Inc., representing 5.1% of the
outstanding common stock shares of the Company.  Mr. Fisher has
sole power to vote, or direct the vote of; and sole power to
dispose of, or direct the disposition of, 4,400 such shares. He
shares voting and disposition powers over 433,504 shares.

Fisher Communications, Inc., is a Seattle-based communications
and media company focused on creating, aggregating, and
distributing information and entertainment to a broad range of
audiences. Its 10 network-affiliated television stations are
located in the Northwest, and its 28 radio stations broadcast in
Washington, Oregon, and Montana. Other media operations include
Fisher Entertainment, a program production business, as well as
Fisher Pathways, a satellite and fiber transmission provider,
and Fisher Plaza, a digital communications hub located in
Seattle.

As reported in Troubled Company Reporter's November 12, 2002
edition, Fisher Communications retained Goldman, Sachs & Co., as
financial advisor to assist in reviewing its strategic
alternatives.

In announcing its decision to review strategic alternatives, the
company issued this statement: "Our Board of Directors is fully
committed to acting in the best interests of the company and its
shareholders. Accordingly, and in light of industry conditions,
we have determined that it is appropriate at this time to review
a range of strategic alternatives for the company."


FLEMING: Fitch Cuts Senior Unsec. & Sub. Debt Ratings to B+/B-
---------------------------------------------------------------
Fitch Ratings has downgraded the credit ratings of Fleming
Companies, Inc., as follows: senior unsecured debt to 'B+' from
'BB-' and senior subordinated debt to 'B-' from 'B'. In
addition, Fleming's 'BB' rated secured bank facility is
affirmed, reflecting the significant asset protection provided
by the facility to the lenders. These actions are due to
weakness in Fleming's operating performance, a reduction in
anticipated proceeds from its retail divestitures and the
termination of its existing supply agreement with Kmart Corp. In
addition, the ratings are placed on Rating Watch Negative until
further clarity is provided as to the financial implications of
the termination of the Kmart relationship. About $1.9 billion in
debt is affected by these rating actions.

Fleming's recently reported 2002 results reflected a 17%
increase in its distribution revenues due to new business from
acquisitions and some significant new customers. However, its
operating profitability softened due to a heightened competitive
environment, weak economy and rising overhead costs,
particularly pensions and health care. As a result of these
factors, operating margins weakened in 2002 from prior year
levels and the improvement in credit protection measures Fitch
had anticipated has not materialized. In addition, in Sept. 2002
Fleming announced plans to divest its retail business and apply
the expected $450 million in proceeds to debt reduction.
Subsequently, Fleming lowered its forecasted proceeds. While
this reduction is partially offset by a higher retention of the
distribution business from sold stores, proceeds available for
debt reduction in 2003 will be lower than initially expected,
which will limit Fleming's ability to strengthen its credit
measures.

The announcement of the termination of Fleming's agreement with
Kmart is likely to result in significant one-time costs, along
with the loss of about $3 billion in revenues to Fleming.
However, the termination also eliminates a significant
uncertainty surrounding Fleming's ability to profitably service
the low-margin Kmart business and resolves whether its ties to
the troubled retailer were in Fleming's best interest over the
longer term.

Fleming has some financial flexibility to work through the
significant changes to its business as it has no debt maturities
until 2007. However, Fleming is currently re-negotiating its
secured bank agreement, which is not slated to mature until
2007. The new or amended facility is expected to have covenant
levels based, in part, on the assets of Fleming that will
provide the company with more flexibility. Fitch anticipates
that Fleming will be successful in this negotiation.

The Rating Watch Negative status is expected to be resolved once
details of the financial terms of the Kmart termination
agreement are available and some clarity is given as to
Fleming's strategic and operating plan going forward.

Fleming remains the largest supplier of consumer packaged goods
to the retail sector, serving over 50,000 retail locations
throughout the U.S.


FOAMEX INT'L: Appoints K. Douglas Ralph as EVP and CFO
------------------------------------------------------
Foamex International Inc. (NASDAQ:FMXI), the leading
manufacturer of flexible polyurethane and advanced polymer foam
products in North America, named K. Douglas Ralph as the
Company's Executive Vice President and Chief Financial Officer,
effective immediately.

Thomas Chorman, President and Chief Executive Officer of Foamex
said: "I am pleased that Doug has accepted this important role
as a member of our management team. With over 20 years of
experience as a financial executive, Doug has an extensive
financial background that will undoubtedly prove beneficial to
Foamex. I am confident that we have selected the best candidate
for the position, and I am certain that Doug will be a positive
addition to our management team and a significant asset to the
Company."

Mr. Ralph, 42, was most recently a financial executive at
Procter & Gamble, where he spent over 20 years in positions of
increasing responsibility. Most recently, Mr. Ralph served as
General Manager of Procter & Gamble's Equity Ventures program.
Prior to that, Mr. Ralph spent over five years in Europe,
including roles as Finance Manager for Procter & Gamble's
Scandinavian business and Finance Director of Procter & Gamble's
European Paper & Beverage business in Germany. In addition, Mr.
Ralph held a range of other financial leadership roles at both
the corporate and operating levels including responsibility for
financial reporting, forecasting, and project financial analysis
for a multi-billion dollar business within Procter & Gamble.

Mr. Ralph graduated summa cum laude from Susquehanna University
where he received a B.S. in Finance.

Foamex, headquartered in Linwood, PA, is the world's leading
producer of comfort cushioning for bedding, furniture, carpet
cushion and automotive markets. The Company also manufactures
high-performance polymers for diverse applications in the
industrial, aerospace, defense, electronics and computer
industries as well as filtration and acoustical applications for
the home. For more information visit the Foamex Web site at
http://www.foamex.com

At September 29, 2002, Foamex's balance sheet shows a total
shareholders' equity deficit of about $157 million, as compared
to a deficit of about $181 million at December 31, 2001.


FREESTAR: Seeks Dismissal of Involuntary Chapter 7 Petition
-----------------------------------------------------------
FreeStar Technologies, Inc., (OTCBB: FSTI) filed a motion to
dismiss the Chapter 7 Involuntary Bankruptcy Petition brought
against the Company on January 9, 2003.

FreeStar maintains that the Chapter 7 Petition brought by
vFinance, Inc., David Stefansky, Richard Rosenblum, Marc Siegel,
Papell Holdings LLC and Boat Basin Investors Ltd, in the
Southern District of New York on January 9, 2003, was filed in
bad faith in order to depress FreeStar's share price and thus
allow the Petitioners to cover a substantial naked short
position. News of the Petition on January 10, 2003 caused
FreeStar's share price to plummet.

FreeStar's motion of this date contends that dismissal and
sanctions under section 303(i) are warranted because:

     1. The Petitioners hold no claims against FreeStar that are
        not the subject of a bona fide dispute, therefore
        rendering the Petitioners unqualified to file an
        involuntary petition under 11 U.S.C. Sec. 303(b)(1)

     2. The interests of creditors, the public shareholders of
        FreeStar and the alleged debtor are better served by a
        dismissal. Moreover, Petitioners have commenced an
        action in the U.S. District Court for the Southern
        District of New York on the very same claim asserted in
        the petition, and thus do not need the court to protect
        their interests. Accordingly, independent grounds exist
        to dismiss this case under 11 U.S.C. Sec. 305(a)(1).

Paul Egan, President and Chief Executive Officer of FreeStar,
stated, "The Petitioners' effort to circumvent Rule 144 by means
of a Chapter 7 Involuntary Bankruptcy Petition was ill-advised.
Sanctions provided by the Bankruptcy Code in respect of bad
faith filings are clear; FreeStar is solvent and will seek
substantial punitive and consequential damages."

With Corporate headquarters in Santo Domingo, Dominican
Republic, and offices in Dublin, Ireland, and Helsinki, Finland,
FreeStar Technologies is focused on exploiting a first-to-market
advantage for enabling ATM and debit card transactions on the
Internet and high-margin credit card processing through a
leading Northern European processor, Rahaxi Processing Oy.
FreeStar Technologies' Enhanced Transactional Secure Software is
a proprietary software package that empowers consumers to
consummate e-commerce transactions on the Internet with a high
level of security using credit, debit, ATM (with PIN) or smart
cards. It sends an authorization number to the e-commerce
merchant, rather than the consumer's credit card information, to
provide a high level of security. For more information, please
visit the Company's Web sites at http://www.freestartech.com
http://www.rahaxi.comand http://www.epaylatina.com


GENUITY INC: Committee Gets Okay to Hire Kramer Levin as Counsel
----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
chapter 11 cases involving Genuity Inc., and its debtor-
affiliates, sought and obtained permission to hire Kramer Levin
Naftalis & Frankel LLP as its counsel, effective as of
December 5, 2002.

Committee Chairman David E. Oliver informs the Court that Kramer
Levin will perform all of the services necessary and desirable
to the conduct of these Chapter 11 cases on the Committee's
behalf. The Committee selected Kramer Levin primarily because
Kramer Levin's Bankruptcy Department has extensive experience in
the fields of bankruptcy and creditors' rights.  In particular,
Kramer Levin has represented creditors' committees in some of
the largest and most complex Chapter 11 reorganization cases of
recent years, including Dow Corning Corporation, SGL Carbon
Corporation, Bethlehem Steel Corporation, Adelphia Business
Solutions, Inc., Borden Chemicals and Plastics, American
Architectural Products, Big V Holdings, VF Brands, Inc., London
Fog Industries, Inc., MMH Holdings, Inc., Edison Brothers,
Olympia & York, SLM International, Inc., Buddy L, Integrated
Resources, Inc., Financial News Network, Inc., INTERCO
Incorporated and Public Service Company of New Hampshire.
Furthermore, Kramer Levin's broad-based practice, which includes
expertise in the areas of corporate and commercial law,
litigation, tax, intellectual property, employee benefits and
real estate, will permit it to represent fully the Committee's
interests in an efficient and effective manner.

Accordingly, the Committee sought and obtained the Court's
authority to retain Kramer Levin.  The firm will render certain
legal services as the Committee may consider desirable to
discharge the Committee's responsibilities and further the
interests of the Committee's constituents in these cases.  In
addition to acting as primary spokesman for the Committee,
Kramer Levin is also expected to assist, advise and represent
the Committee with respect to these matters:

  A. administration of these cases and the exercise of oversight
     with respect to the Debtors' affairs including all issues
     arising from the Debtors, the Committee or these Chapter 11
     cases;

  B. preparation of necessary applications, motions, memoranda,
     orders, reports and other legal papers;

  C. appearances in Court and at statutory meetings of creditors
     to represent the Committee's interests;

  D. negotiation, formulation, drafting and confirmation of a
     plan or plans of reorganization and related matters;

  E. any investigation as the Committee may desire concerning
     the assets, liabilities, financial condition and operating
     issues concerning the Debtors that may be relevant to these
     Chapter 11 cases;

  F. any communication with the Committee's constituents and
     others as the Committee may consider desirable in
     furtherance of its responsibilities; and

  G. performance of all of the Committee's duties and powers
     under the Bankruptcy Code and the Bankruptcy Rules and the
     performance of any other services that are in the interests
     of those represented by the Committee.

The principal attorneys expected to represent the Committee in
this matter and their current hourly rates are:

       Kenneth H. Eckstein                   $625
       Robert T. Schmidt                      450
       David M. Feldman                       440
       Matthew J. Williams                    380
       Jeffrey W. Narmore                     260
       Marc P. Schwartz                       210

In addition, other attorneys and paraprofessionals may from time
to time provide services to the Committee in connection with
these bankruptcy proceedings.  The current range of hourly rates
for Kramer Levin's attorneys and legal assistants are:

       Partners                        $440 - 625
       Counsel                          460 - 600
       Associates                       210 - 450
       Legal Assistants                 160 - 175

Kramer Levin's hourly billing rates are subject to periodic
adjustments to reflect economic and other conditions.

Mr. Oliver explains that Kramer Levin's hourly billing rates for
professionals are not intended to cover out-of-pocket expenses
and certain elements of overhead that are typically billed
separately.  Kramer Levin regularly charges its clients for the
expenses and disbursements incurred in connection with the
client's case, including word processing, secretarial time,
telecommunications, photocopying, postage and package delivery
charges, court fees, transcript costs, travel expenses, expenses
for "working meals", and computer-aided research.

Robert T. Schmidt of Kramer Levin assures the Court that:

  -- Kramer Levin is a "disinterested person" within the meaning
     of Section 101(14) of the Bankruptcy Code;

  -- neither Kramer Levin nor its professionals have any
     connection with the Debtors, the creditors or any other
     party-in-interest; and

  -- Kramer Levin does not hold or represent any interest
     adverse to the Committee in the matters for which it is to
     be retained.

However, Mr. Schmidt relates that Kramer Levin has represented,
currently represents, or in the future may represent these
parties in unrelated matters: JP Morgan Chase, State Street Bank
and Trust Company, The Bank of New York, Citibank N.A., Deutsche
Bank, BNP Paribas, Credit Suisse First Boston, Deloitte & Touche
LLP, First Union National Bank/Wachovia Bank, Qwest, Bellsouth,
MFS Telecom Inc., MCI WorldCom, Allegiance Telecom, AT&T,
Southwestern Bell, Toronto Dominion Bank, Ameritech, Level 3
Communications and Sprint. (Genuity Bankruptcy News, Issue No.
6; Bankruptcy Creditors' Service, Inc., 609/392-0900)


GLOBAL CROSSING: Seeks Okay for Telecordia Settlemet Agreement
--------------------------------------------------------------
Michael F. Walsh, Esq., at Weil Gotshal & Manges LLP, in New
York, relates that Telcordia Technologies, Inc. and certain of
its affiliates and subsidiaries provide software products and
services to Global Crossing Ltd., and its debtor-affiliates.
Some of these agreements, namely the LERG, LARG and TPM
Agreements, expired by their own terms during the GX Debtors'
Chapter 11 cases.  Another agreement, the Exchange Link
Agreement, contained payment terms, which the GX Debtors believe
exceeded the current price for these services in the
marketplace.  Still another, the Common Language Agreement,
obligated the GX Debtors to purchase services that they no
longer require for the continued operation of their network.

On May 31, 2002, Mr. Walsh recounts that Telcordia filed a
Request for Payment of Administrative Expenses seeking over
$1,674,972.11 for postpetition services purportedly provided to
the GX Debtors.  The GX Debtors contested certain of these
charges, particularly those charges that related to annual fees
under the Common Language Agreement, which they intended to
reject.  To continue to receive services from Telcordia and
preserve the business relationship between the parties, the GX
Debtors and Telcordia entered into negotiations to resolve all
claims and other issues related to Telcordia's provision of
services to the GX Debtors.

After extensive arm's-length negotiations, the parties agreed to
a settlement, which provides for the modification, restatement,
and assumption by the Debtors of certain Agreements, and the
rejection of the Common Language Agreement.  In addition, the
Settlement caps Telcordia's claims and reduces the Debtors'
future payment obligations under the Agreements.  Finally, the
Settlement ensures the continued provision of services by
Telcordia to the Debtors.

Thus, the Debtors ask the Court to approve of the Settlement
Agreement, which resolves the parties' disputes.

The salient terms of the Settlement Agreement are:

  A. Payment by the Debtors: The Settlement Agreement provides
     these aggregate payments to be made by Global Crossing
     North America, Inc. to Telcordia under all of the operative
     Agreements:

     -- $1,920,000, paid within 10 days of approval of the
        Settlement Agreement, to the extent due at that time,
        in the ordinary course of business to the extent payment
        obligations arose after the execution of the Settlement
        Agreement, as total payment for products and services
        provided by Telcordia to the Debtors in 2002 under the
        Agreements;

     -- $1,992,946, payable in the ordinary course of business,
        for products and services to be provided to the Debtors
        under the Exchange Link Agreement in 2003;

     -- $1,700,000, payable in the ordinary course of business,
        for products and services to be provided to the Debtors
        under the Exchange Link Agreement in 2004; and

     -- $708,331, payable in the ordinary course of business,
        for products and services to be provided to the Debtors
        under the Exchange Link Agreement in 2005.

  B. Allowed General Unsecured Claim: Telcordia will have an
     allowed general unsecured claim in the Debtors' Chapter 11
     cases in an aggregate amount not to exceed $613,036.

  C. Modification, Restatement, and Assumption of Certain
     Agreements: Effective as of January 17, 2003, certain terms
     of the Exchange Link Agreement are amended, including the
     pricing for products and services to be provided to the
     Debtors.  In addition, the Debtors agree to assume both of
     these agreements after the effective date of the Plan.

  D. Execution of LERG/TPM Agreement: Contemporaneously with the
     execution of the Settlement Agreement, Telcordia and the
     Debtors entered into the LERG/TPM Product Agreement,
     whereby Telcordia agreed to provide the Debtors with
     services critical to their Network.

  E. Rejection of the Common Language Agreement: The Debtors
     will reject the Common Language Agreement effective as of
     May 1, 2002.

  F. Releases: Pursuant to the Settlement Agreement, the Debtors
     and Telcordia each agree to fully and finally release,
     acquit, and forever discharge the other from any and all
     claims, avoidance claims, demands, obligations, actions,
     causes of action, rights or damages under any legal theory,
     from the beginning of time until January 17, 2003, other
     than claims arising under any warranties contained in the
     Agreements or applicable law; provided, however, that:

     -- the releases are limited to the matters relating to the
        Agreements occurring on or before January 17, 2003; and

     -- the releases do not affect obligations contained in the
        Settlement Agreement or that survive the Settlement
        Agreement.

Mr. Walsh insists that the Settlement Agreement is fair and
equitable and falls well within the range of reasonableness as
it avoids potential litigation between the parties with respect
to Telcordia's claims in the Debtors' Chapter 11 cases.

In addition, Mr. Walsh notes that the Debtors entered into a new
agreement with Telcordia, the LERG/TPM Product Agreement, for
the provision of products and services critical to the Debtors'
network.  In the absence of the Settlement Agreement, it is
unlikely that Telcordia would have agreed to enter into the new
agreement under the same terms.

Finally, under the Settlement Agreement, Telcordia and the
Debtors agree to release any and all claims against each other
for actions occurring prior to January 17, 2003.  This release
dispels the threat of potential litigation and allows the
parties to resume a normal business relationship.

Mr. Walsh contends that the services provided by Telcordia under
the Exchange Link and Fair Share/TRA Agreements are necessary to
the operation of the Debtors' network -- the "crown jewel" of
the Debtors' estates.  Moreover, with the modifications to the
Exchange Link Agreement, the Debtors will receive these critical
products and services on cost-effective terms.  Finally, by
entering into the Settlement Agreement, the Debtors and
Telcordia have agreed to the assumption of the Exchange Link and
the Fair Share/TRA Agreements without the Debtors' incurrence of
any cure costs.

Similarly, Mr. Walsh believes that the rejection of the Common
Language Agreement is beneficial to the Debtors' estates.  The
services contemplated under the Common Language Agreement are
not necessary to the Debtors' on-going business operations.  As
a result, rejecting the Common Language Agreement eliminates any
further payment obligations. (Global Crossing Bankruptcy News,
Issue No. 33; Bankruptcy Creditors' Service, Inc., 609/392-0900)

Global Crossing Holdings' 9.625% bonds due 2008 (GBLX08USR1) are
trading at about 4 cents-on-the-dollar, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=GBLX08USR1
for real-time bond pricing.


GROUP TELECOM: Consummates Sale Transaction with 360networks
------------------------------------------------------------
360networks Corporation, a leading provider of data
telecommunications services, announced the completion
of its acquisition of the operations of Group Telecom, one of
Canada's largest independent, competitive telecommunications
service providers. Under the terms of the agreement, the secured
creditors of GT will receive a cash distribution of
approximately C$250 million.

"We are excited about the combination of our businesses, and we
welcome the GT team and their customers to 360networks," said
Greg Maffei, 360networks chairman and chief executive officer.
"From a product, service and network standpoint, we offer a
tremendous value proposition to customers - high-quality,
reliable and innovative telecommunications services across North
America."

"Together our pioneering products and extensive network make us
one of Canada's largest, full-service, competitive
telecommunications companies," added Dan Milliard, Group
Telecom's chief executive officer. "We began integrating our
businesses with the signing of this transaction in November
and are already seeing the strength of the combination to the
benefit of customers and stakeholders."

Both companies were successfully reorganized with 360networks
completing its reorganization in November 2002 and GT completing
its reorganization and emergence from CCAA court protection
effective with the closing of the acquisition. Group Telecom
first obtained CCAA court protection on June 26, 2002.

360networks and GT provide telecommunications services and
network infrastructure in North America to over 13,000 carrier
and commercial customers. The combined company offers a
comprehensive range of services from traditional local and long
distance voice products to leading edge products such as optical
transport, wavelengths, Internet transport, Gigabit Ethernet,
and optical virtual private networks.

The company's optical mesh fiber network is one of the largest
and most advanced on the continent, spanning 33,000 route miles
(53,000 kilometers) and reaching 60 major cities in North
America, and includes 17 metro fiber networks in nine Canadian
provinces.


HALO INDUSTRIES: Pursuing Talks re Potential Sale of Business
-------------------------------------------------------------
As previously disclosed in a form filed with the Securities and
Exchange Commission on September 20, 2002 (SEC File No. 001-
13525), on August 30, 2002, HA-LO Industries, Inc., filed a
complaint against its former Chief Executive Officer John R.
Kelley in the United States District Court for the Northern
District of Illinois, for breach of the fiduciary duties of care
and loyalty and for waste, in connection with his role in HA-
LO's acquisition of Starbelly.com, Inc., in 2000 for $240
million in cash and stock. Upon motion agreed to by HA-LO and
Mr. Kelley, the District Court entered an order on October 15,
2002 to transfer this action to the Bankruptcy Court (as defined
below), where it is currently pending.

As previously disclosed in forms filed with the SEC on September
20, 2002 and September 30, 2002 (SEC File No. 001-13525), on May
28, 2002, an Amended Consolidated Class Action Complaint was
filed in the United States District Court for the Northern
District of Illinois, Eastern Division, against various former
and current officers and directors of HA-LO, alleging that such
individuals violated (i) Section 10(b) of the Securities
Exchange Act of 1934, as amended and Rule 10b-5 promulgated
thereunder and (ii) Section 20(a) of the Exchange Act, and
requesting compensatory damages in an amount to be proven at
trial and related costs and expenses. On July 3, 2002, HA-LO and
the Official Committee of Unsecured Creditors filed a Verified
Complaint in the Bankruptcy Court, against the plaintiffs in the
Class Action Suit, for (i) a preliminary and permanent
injunction against further prosecution of the Class Action Suit
and (ii) a declaratory judgment that any proceeds from any
director and officer insurance policy carried by HA-LO are the
sole and exclusive property of HA-LO's bankruptcy estate. The
plaintiffs in the Class Action Suit filed an answer in the
Bankruptcy Court on September 18, 2002, stating that the
preliminary and permanent injunction and the declaratory
judgment sought in the Injunction Complaint should be denied. On
October 17, 2002, the Bankruptcy Court entered an order agreed
upon by the parties, pursuant to which (i) the Class Action Suit
will be dismissed without prejudice with respect to Marc S.
Simon, a current director and Chief Executive Officer of HA-LO,
pursuant to the conditions set forth therein, (ii) the
Injunction Complaint will be dismissed without prejudice
pursuant to the conditions set forth therein, (iii) except as
otherwise specified therein, any written or other document
discovery from Mr. Simon, Gregory J. Kilrea (former Chief
Financial Officer of HA-LO), employees of Debtors and Debtors
will be enjoined through January 15, 2003 and (iv) certain
disclosures by the Debtors will be required according to the
dates set forth therein.

On November 6, 2002, HA-LO filed a complaint in the United
States District Court for the Northern District of Illinois,
Eastern Division, against Credit Suisse First Boston ("CSFB")
for gross negligence and negligent misrepresentation, breach of
contract and breach of fiduciary duty in connection with
providing financial advisory services and issuing a fairness
opinion in connection with the Starbelly Acquisition. The amount
of damages is unspecified.

In September 2002, the SEC commenced a formal investigation into
HA-LO regarding matters including HA-LO's previously intended
restatement of its financial results for the fiscal years ended
2000, 1999 and 1998 and the three months ended March 31, 2001,
and the Starbelly Acquisition. HA-LO indicates that it has been
working and cooperating, and continues to work and cooperate,
with the SEC in this investigation. The intended restatement was
previously disclosed in a Form 8-K filed with the SEC on
November 21, 2001 (SEC File No. 001-13525). HA-LO subsequently
disclosed in a Form 8-K filed with the SEC on September 20, 2002
(SEC File No. 001-13525), that it no longer intended to restate
its financial results as it had not retained independent public
accountants since the July 2002 resignation of its prior
independent public accountants.

HA-LO has been involved in discussions with various parties
regarding a potential sale of its business. No definitive
agreements have been executed by HA-LO or any other party
regarding such a potential sale. As HA-LO remains a debtor in
the Cases, any potential sale will require execution of a
definitive agreement and will be subject to certain sale
procedures imposed by applicable bankruptcy rules and
regulations. Even with the discussions to date with these
various parties, the holders of equity interests in HA-LO remain
unlikely to receive or retain anything of value on account of
their interests in HA-LO.

HA-LO remains a debtor, with two of its subsidiaries, Lee Wayne
Corporation and Starbelly.com, Inc. in three separate, although
jointly administered, Chapter 11 cases in case number 02 B
12059, and continues to work towards emerging from bankruptcy.
To date, although discussions have commenced between the Debtors
and the Official Committee of Unsecured Creditors regarding the
form and content of a plan or plans of reorganization, no plan
or plans of reorganization have been filed or confirmed by the
Bankruptcy Court.

Even with the discussions and events to date, the holders of
equity interests in HA-LO remain unlikely to receive or retain
anything of value on account of their interests in HA-LO in the
bankruptcy.

Persons interested in more information concerning the Cases, or
the Debtors' financial performance, are encouraged to review the
pleadings, reports and other papers on file in the Office of the
Clerk of the United States Bankruptcy Court for the Northern
District of Illinois, Eastern Division, Everett McKinley Dirksen
Federal Building, 219 S. Dearborn Street, Chicago, Illinois.


HARVARD INDUSTRIES: Brings-In Hilco as Real Estate Consultants
--------------------------------------------------------------
Harvard Industries, Inc., and its debtor-affiliates ask for
permission from the U.S. Bankruptcy Court for the District of
New Jersey to employ and retain Hilco Real Estate, LLC, as their
real estate consultants and advisors.

The Debtors relate that since the inception of these cases, the
Debtors and their professionals have been intensely involved in
an effort to maximize value of the estates through at least
three asset purchase transactions:

     (i) Hayes-Albion's operating facility in Rock Valley, Iowa
         to Total Component Solutions Corporation;

    (ii) Hayes-Albion's largest operating division to Trim
         Trends Co., LLC and Pagoda Enterprises Limited; and

   (iii) the joint sale of the Debtors' facilities located in
         St. Louis, Missouri and Arnold, Michigan.

Unfortunately, a proposed sale of Hayes-Albion's operating
facility in Albion, Michigan was aborted due to the facility's
largest customers' decision to resource their business.  As a
result, Hayes-Albion was forced to shutdown the Albion Facility
and cease operations of Harvard Transportation, which operated
solely to service the Albion Facility.  In addition, Harvard's
operating facility in Jackson, Michigan also ceased operations.
The Debtors are in the process of liquidating all of the assets
associated with its non-operating facilities.

In addition to the Albion Facility and Jackson Facility, the
Debtors currently own a parcel of real property and a building
located in Salem, South Carolina.

In light of the Asset Sales and the closings of the Albion
Facility and Jackson Facility, and the winding-up of the
Debtors' operations, the Debtors have determined that it is in
their best interests and in the best interests of their estates
to dispose of the Properties by sale or assignment at this
point.

At the request of Hilco Capital L.P. -- a junior secured lender
of the Debtors having a properly perfected security interest in
the Properties -- the Debtors spoke to Hilco Real Estate about a
possible engagement.  Hilco Real Estate expressed a desire to
market the Jackson Facility and the Salem Facility and is
evaluating their interest with regard to the Albion Facility.

The Debtors assert that this retention does not prejudice any
other party, and a non-biased comparison of the various real
estate firms previously considered supports the conclusion that
it's in everybody's best interests to retain Hilco Real Estate.

Specifically, Hilco Real Estate will:

     i. Meet with the Debtors to ascertain goals, objectives and
        financial parameters;

    ii. Develop a marketing program;

   iii. Coordinate and organize bidding procedures and sale
        procedures for the sale of the Properties;

    iv. Negotiate terms of purchase agreements on the Debtors'
        behalf; and

     v. Report periodically to Debtors regarding status of
        negotiations and sale process.

Hilco Real Estate will earn a 5% commission for its services,
paid in cash from the proceeds of any sale.  A written Agreement
delivered to the Bankruptcy Court specifically provides that the
employment is on a transactional basis and therefore hourly fees
will not be charged.  Additionally, Hilco Real Estate will be
entitled to reimbursement of up to $10,000 in Expenses and
$2,000 of additional Travel Expenses.

Harvard Industries, Inc., produces specialized parts for use
primarily on the automotive industry and have historically been
engaged in the business of designing, engineering and
manufacturing components for original equipment manufacturers
producing cars and light trucks in North America. The Company
filed for chapter 11 protection on January 15, 2002 (Bankr. N.J.
Case No. 02-50586). Bruce D, Gordon, Esq., at Dale & Gordon LLP,
and Joseph H. Smolinsky, Esq., at Chadbourne & Parke LLP
represent the Debtors in their restructuring efforts.


HAYES LEMMERZ: Disclosure Statement Hearing Commencing Today
------------------------------------------------------------
Hayes Lemmerz International, Inc., and its debtor-affiliates,
filed their Joint Plan of Reorganization with the accompanying
Disclosure Statement to the U.S. Bankruptcy Court for the
District of Delaware.

A hearing to consider the adequacy of the Debtors' Disclosure
Statement explaining the Debtors' Plan is set for today at 9:30
a.m. before the Honorable Mary F. Walrath.  If Judge Walrath
finds that the document contains adequate information, copies of
the Debtors' Plan and Disclosure Statement will be transmitted
to creditors and creditors will be asked to vote to accept the
plan.  The Debtors will be looking to garner acceptances on
account of 2/3 of the dollar amount of claims and 50% of the
number of creditors from each class of creditors defined in the
Plan.  If each creditor class overwhelmingly votes to accept the
Debtors' proposal, the plan confirmation is usually a breeze.

Hayes Lemmerz International, Inc., is one of the world's leading
global suppliers of automotive and commercial highway wheels,
brakes, powertrain, suspension, structural and other lightweight
components. The company and its debtor-affiliates filed for
Chapter 11 protection on Dec. 5, 2001, (Bankr. Del. Case No. 01-
11490).  J. Eric Ivester, Esq., Stephen D. Williamson, Esq.,
Anthony W. Clark, Esq., and Grenville R. Day, Esq., at Skadden,
Arps, Slate, Meager & Flom represent the Debtors in their
restructuring efforts.


HEALTH INSURANCE: S&P Plucks BB Fin'l Strength Rating from Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services removed from CreditWatch and
raised its counterparty credit and financial strength ratings on
Health Insurance Plan of Greater New York to 'BB' from 'B+'
because of the company's enhanced profitability and strong
operating cash flows, which stem from its strong core market
operating results.

Standard & Poor's also said that it raised its senior unsecured
debt rating on HIP's $31.1 million outstanding refunding
hospital revenue bonds (Series C, dated Feb. 1, 1990, and due
July 1, 2010) to 'BB' from 'B+'. The outlook on HIP is positive.

HIP has made significant strides in deleveraging its balance
sheet and is considered much better capitalized on a risk-
adjusted basis, based on Standard & Poor's capital model. "The
positive outlook reflects the expectation that HIP's operating
fundamentals will experience sustained improvement," said
Standard & Poor's credit analyst Joseph Marinucci.

HIP's operations have increasingly become more focused on its
primary market. Its business position was strengthened by the
November 2001 acquisition of Vytra Health Plans Long Island
Inc., which broadened HIP's core New York metro market presence
and provided new business development opportunities. Standard &
Poor's believes the Vytra brand will better enable the company
to penetrate a segment of the market that HIP has historically
not been positioned to reach. Vytra membership is expected to
account for about 20% of HIP's consolidated enrollment base by
year-end 2002.

HIP operates only in the downstate New York marketplace, which
significantly exposes the company to adverse developments on the
legislative, regulatory, and economic fronts. These events can
include--but are not limited to--provider contracting
restrictions, pricing constraints, and deterioration of general
business conditions. In addition, about 32% of HIP's core
membership is aligned with New York City and the municipal
government employees, and Standard & Poor's believes this
percentage could grow as HIP seeks out additional organic growth
opportunities.


HOLIDAY RV: Appoints Casey L. Gunnell as President & Acting CEO
---------------------------------------------------------------
Holiday RV Superstores, Inc., (Nasdaq: RVEE) announced that Lee
B. Sanders has been appointed as the non-executive Chairman of
the Board of Directors of the Company and Casey L. Gunnell has
been appointed as the President and Acting Chief Executive
Officer.  Mr. Sanders has been a director of the Company since
May 2000.  Mr. Gunnell has been a director of the Company since
October 2001 and was the President of the Company from October
2001 through May 2002 and Chief Financial Officer of the Company
from May 2001 through May 2002.

The Company also announced that Marcus A. Lemonis, the Company's
former Chairman, CEO and President, has resigned to pursue other
interests.

Holiday RV operates retail stores in Florida, Kentucky, New
Mexico, South Carolina, and West Virginia. Holiday RV, the
nation's only publicly traded national retailer of recreational
vehicles and boats, sells, services and finances more than 90 RV
brands.

                         *    *    *

As reported in Troubled Company Reporter's January 21, 2003
edition, the Company admitted it is in default on an additional
$5.1 million in secured debt owed to an investor.

Further, the $12.3 million owed to the investor is due and
payable upon demand. There can be no assurance as to the actions
which the investor may take with regard to the loans. The
Company does not have the funds to repay either of these loans
and therefore, if the investor were to demand the Company to
repay either of these loans, such action would have a material
adverse consequence on the Company and raise substantial doubts
as to the Company's ability to continue as a going concern.

The Company continues to evaluate whether it is in the best
interests of the Company to continue to pursue the Company's
previously announced appeal, since it appears unlikely, based
upon the Company's current situation, that the Company will be
able to show current and future compliance with the Nasdaq
Marketplace Rules requiring that the Company maintain certain
minimum stockholders' equity and market value of publicly held
shares.


INTEGRATED HEALTH: Premiere Committee Signs-Up BDO as Advisor
-------------------------------------------------------------
Anthony M. Saccullo, Esq., at The Bayard Firm, in Wilmington,
Delaware, tells the Court that given the recent developments in
these cases -- including Integrated Health Services, Inc., and
its debtor-affiliates' request to approve a disclosure statement
for a plan that contemplates a sale of substantially all of
their assets or reorganization and substantive consolidation --
the Premiere Committee requires further assistance from a
financial advisor to adequately protect the interests of this
discrete group of creditors.  The Premiere Committee wants to
further utilize the services of BDO as its financial advisor in
these cases and therefore requests that the Court approve
revised compensation terms to govern BDO's continued performance
of services in these cases.

Subject to the Court's approval in accordance with Section
330(a) of the Bankruptcy Code, Mr. Saccullo relates that BDO
will be compensated on an hourly-rate basis at its current
hourly rates for work of this nature and will be reimbursed
actual, necessary expenses incurred.  These hourly rates for
compensation by classification are:

       Partner                       $330 - 600
       Senior Manager                $215 - 480
       Manager                       $195 - 330
       Senior                        $140 - 245
       Staff                          $85 - 185

In the normal course of business, BDO revises its regular hourly
rates to reflect changes in responsibilities, increased
experience, and increased costs of doing business.  Accordingly,
BDO requests that these rates be revised to the regular hourly
rates that will be in effect from time to time.  Changes in
regular hourly rates will be noted on the invoices for the first
time period in which the revised rates became effective.

In connection with the submission of periodic billings, Mr.
Saccullo states that BDO will submit detailed descriptions of
the services performed by each professional and the time
expended on the engagement by each professional for all relevant
engagement activity categories.  In addition, reasonable out-of-
pocket expenses, including travel, report production, delivery
services, and other costs incurred in providing the services
will be included, at actual cost, in the total amount billed.

The Premiere Committee requires BDO's services primarily to
assist the Premiere Committee in evaluating Debtors' assets, the
Debtors' plan, including the effect of a sale of all assets and
the potential impact of substantive consolidation on the
Premiere Committee's members.  The Premiere Committee, however,
reserves the right to utilize BDO to perform any other services
authorized in the BDO Order.

Mr. Saccullo asserts that the relief sought is necessary to
allow the Premiere Committee to adequately protect the creditors
of the Premiere Group Debtors.  The Premiere Committee cannot
adequately analyze the current facts, circumstances and
prospects of these cases with respect to Premiere Group
creditors without financial advice similar to that afforded to
all other parties-in-interest. The relief sought is in
furtherance of the BDO Order and will not waste the assets of
these estates. (Integrated Health Bankruptcy News, Issue No. 50;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


J/Z CBO (DEL) LLC: S&P Hatchets Rating on Class C Notes to B+
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
class A, B, and C notes issued by J/Z CBO (Delaware) LLC, an
arbitrage CBO transaction managed by J/Z Advisers. At the same
time, the ratings on the class B and C notes are removed from
CreditWatch with negative implications, where they were placed
on December 5, 2002.

The rating actions reflect factors that have negatively affected
the credit enhancement available to support the notes since the
transaction originated in May 2000. These factors include
continuing par erosion of the collateral pool securing the rated
notes and a decline in the interest from the collateral pool
available for hedge and interest payments on the liabilities.

According to the most recent trustee report (December 2002), the
transaction is currently carrying $66.2 million in defaults,
$49.45 million of which was recognized as defaults by the
transaction in October 2002. As a result of the increased
defaults, the overcollateralization ratios have suffered since
closing. As of the December trustee report, the class A
overcollateralization ratio was 152.37% versus the required
ratio of 183%, and compared to a ratio of 199.24% at the time of
closing.

The weighted average coupon and the interest coverage ratio have
also deteriorated since origination. As of the December trustee
report, the WAC was at 11.92% versus the required 12%, and the
interest coverage ratio was at 66.84% versus the required 142%.

As a part of its analysis, Standard & Poor's reviewed the
results of recent cash flow model runs. These runs stressed
various parameters that are instrumental in the performance of
this transaction, and are used to determine its ability to
withstand various levels of default. When the stressed
performance of the transaction was then compared to the
projected default performance of the current collateral pool,
Standard & Poor's found that the projected performance of the
class A, B, and C notes, given the current quality of the
collateral pool, was not consistent with the prior ratings.
Consequently, the ratings are lowered on these notes to their
new levels. Standard & Poor's will continue to monitor the
performance of the transaction to ensure that the ratings
assigned to the rated tranches continue to reflect the credit
enhancement available to support the notes.

                     RATINGS LOWERED

                  J/Z CBO (Delaware) LLC

                  Rating
   Class    To          From            Current Balance (Mil. $)
   A        AA-         AAA             105.98

          RATINGS LOWERED AND REMOVED FROM CREDITWATCH

                   J/Z CBO (Delaware) LLC

                  Rating
   Class    To          From            Current Balance (Mil. $)
   B        BBB         A/Watch Neg     21.77
   C        B+          BBB/Watch Neg   20.37


KMART: SEC Approves NYSE Application to Delist Kmart Securities
---------------------------------------------------------------
The Securities and Exchange Commission approved an application
by the New York Stock Exchange, Inc., to strike Kmart
Corporation's common stock, $1.00 par value and the 7.75% Trust
Convertible Preferred Securities of Kmart Financing I.
Effective at the opening of business on January 30, 2003,
Kmart's common stock and trust preferred securities are struck
from NYSE's listing and registration.

The SEC considered the facts stated in NYSE's application as
well as public interest and investor protection.

In its opinion, NYSE determined that the Kmart securities are no
longer suitable for trading on the NYSE.  As of December 16,
2002, Kmart was below the NYSE's continued listing standard
requiring average closing price of not less than $1.00 over a
consecutive 30 trading-day period.  Kmart was not able to
demonstrate its ability to cure this non-compliance.  Kmart's
bankruptcy filing also tolled.

Pursuant to Section 12(d) of the Securities Exchange Act of
1934, any security registered on a national securities exchange
may be withdrawn or stricken from listing and registration in
accordance with the rules of the exchange and on the exchange's
application with the SEC.

Rule 499 of the NYSE provides that securities admitted to the
list may be suspended from dealings or removed from the list at
any time.  Section 802.01C of the NYSE's Listed Company Manual
also states that the NYSE would normally consider delisting a
security of a company either a domestic or non-U.S. issuer when
the average closing price of the security is less than $1.00 for
30 consecutive trading days.  Section 802.01D of the Manual also
allows the NYSE to consider suspending or removing from the list
a security of a company which has announced its intent to file
for bankruptcy or is under bankruptcy protection.

Kmart securities are presently quoted on the Pink Sheets
Electronic Quotation Service (http://www.pinksheets.com).
Kmart's common stock trades under the ticker symbol "KMRTQ"
while the trust preferred securities of Kmart Financing I trade
under symbol "KMTPQ". (Kmart Bankruptcy News, Issue No. 46;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

DebtTraders reports that Kmart Corp.'s 9.000% bonds due 2003
(KM03USR6) are trading at about 13 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=KM03USR6for
real-time bond pricing.


LAND O'LAKES: Full-Year 2002 Financial Results Show Improvement
---------------------------------------------------------------
Land O'Lakes reported 2002 net earnings of $98.9 million, as
compared to $71.5 million for 2001. Company officials indicated
year-end earnings were driven primarily by proceeds received
from vitamin price-fixing litigation settlements and bottom line
contributions from the company's Dairy Foods and Ag Services
branded and proprietary value-added business segments.

The company continued to pay down debt in 2002 and, at year-end,
total long-term debt (including current portion) was down by $55
million. The company's Long-Term-Debt to Capital ratio improved
to 51.1 percent, as compared 56.1 percent at the end of 2001.

The company's liquidity position was also strong, with $64
million in cash balances and $320 million of unused borrowing
capacity at year-end. In addition, the company is in compliance
with all of its financing covenants.

For the fourth quarter, the company reported net earnings of
$63.6 million, as compared to $18.7 million for the fourth
quarter of 2001. Again, proceeds from vitamin price-fixing
settlements and value-added earnings were the primary
contributors.

Company officials indicated that commodity price declines;
continued competitive pressures and milk supply/processing
demand issues facing its Upper Midwest Dairy operations; and
costs related to the start-up of its West Coast Cheese and
Protein International venture adversely affected operating
earnings.

Sales for the fourth quarter were $1.5 billion, down 9 percent
from fourth quarter 2001, primarily the result of depressed
commodity markets in swine, dairy and feed. For the year, sales
were basically flat at $5.8 billion.

Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA) for the quarter were $178.3 million, as calculated
under the company's bond indenture. For the year, bond EBITDA
was $314.5 million, which includes $155.5 million related to the
vitamin litigation settlements.

Dairy Foods

Land O'Lakes reported a $16.7 million pretax loss in Dairy Foods
for the quarter and a $32.1 million loss for the year. This
compares to fourth quarter earnings of $28.6 million and year-
end earnings of $50.7 million in 2001.

For the year, Land O'Lakes reported $47.3 million in pretax
earnings on its Dairy Foods Value-Added operations, which was
offset by $79.4 million in pretax losses on the Industrial side
of the business. On the Value-Added side, Retail, Deli and
Foodservice operations made significant contributions.

Losses on the Industrial side were driven primarily by slumping
commodity prices (cheese, whey, nonfat dry milk); milk
supply/processing demand balance issues in the Upper Midwest;
and the impact of higher than anticipated costs and slumping
mozzarella markets on CPI. They included $20 million in charges
related to plant shutdowns and $30 million in losses related to
the CPI start-up. Company officials outlined a number of
initiatives in response to these performance issues including:

     -- the consolidation of production and closing of the
        company's Perham and Faribault, Minnesota, plants;

     -- the planned 2003 closing of its Volga, South Dakota,
        plant; and

     -- intensified efforts to successfully complete the CPI
        start-up.

Company officials indicated they anticipate stronger dairy
volumes and enhanced brand-driven earnings in 2003.

Feed

Feed reported year-end pretax earnings of $156.5 million, as
compared to $24.7 million in 2001. For the quarter, Feed
achieved $117.7 million in pretax earnings, as compared to $9.4
million for the same quarter of 2001. Company officials
indicated proceeds from vitamin price-fixing litigation
settlements contributed significantly to Feed earnings.
Excluding gains related to the vitamin settlements and one-time
restructuring and integration costs, Feed generated
approximately $28 million in operating earnings for the year.

The integration of Purina Mills continued to progress well. In
the first full year of a disciplined, three-year integration
process, Feed generated $46 million in annualized synergies and
$35 million in 2002 cost-savings. Those savings were partly
offset by $27 million in one-time restructuring and integration
costs.

For the year, weather, markets, and swine and dairy industry
restructuring contributed to an 8 percent decline in livestock
feed sales. Branded and proprietary feed products did well, led
by record animal milk replacer sales and a 1 percent increase in
lifestyle feed volumes.

Seed

In Seed, Land O'Lakes reported a $1.7 million loss for the
quarter and $8.3 million in earnings for the year. This compares
with a loss of $3.5 million for the fourth quarter of 2001, and
pretax earnings of $3.6 million for the year.

Agronomy

Land O'Lakes conducts the majority of its agronomy business
through the Agriliance joint venture, in which the company holds
a 50 percent ownership position. For the quarter, the Agronomy
segment reported a pre-tax loss of $18.2 million, versus a loss
of $5.4 million for the fourth quarter of 2001. The company
reported a $1.8 million loss in Agronomy for the year, as
compared to $10.3 million in pretax earnings one year ago. These
results included $2.7 million in impairment charges related to
Agriliance's southern retail operations.

Swine

Slumping hog markets (averaging approximately $36 per
hundredweight in 2002 vs. $47 per hundredweight in 2001)
contributed to a $11.9 million fourth quarter pretax loss in
Swine, as compared to a $1.2 million loss in the fourth quarter
of 2001. For the year, the company reported a $23.2 million
pretax loss in swine, as compared to earnings of $3.1 million in
2001.

Company officials indicated progress is being made on efforts to
reduce capital usage and exposure to market risk in this
business segment.

Land O'Lakes -- http://www.landolakesinc.com-- is a national,
farmer-owned food and agricultural cooperative, with annual
sales of $6 billion. Land O'Lakes does business in all 50 states
and more than 50 countries. It is a leading marketer of a full
line of dairy-based consumer, foodservice and food ingredient
products across the United States; serves its international
customers with a variety of food and animal feed ingredients;
and provides farmers and local cooperatives with an extensive
line of agricultural supplies (feed, seed, crop nutrients and
crop protection products) and services.

As previously reported in Troubled Company Reporter, Moody's
Investors Service downgraded the ratings on Land O'Lakes, Inc.
Outlook is stable.

     Rating Action                           To           From

     Land O'Lakes, Inc.

     * Senior implied rating                 B1            Ba2

     * Senior secured rating                 B1            Ba2

     * Senior unsecured issuer rating        B2            Ba3

     * $250 million Senior secured bank
       facility, due 2004                    B1            Ba2

     * $291 million Senior secured term
       loan A, due 2006                      B1            Ba2

     * $234 million Senior secured term
       loan B, due 2008                      B1            Ba2

     * $350 million 8.75% Senior unsecured
       guaranteed Notes, due 2011            B2            Ba3

     Land O'Lakes Capital Trust I

     * $191 million 7.45% Trust preferred
       securities                            B3            Ba3

The lowered ratings reflects the company's weaker-than-expected
operating performance, giving rise to a constrained financial
flexibility and the deterioration of credit protection measures.


LERNOUT & HAUSPIE: Solicitation Period Extended Until March 31
--------------------------------------------------------------
As the only Debtor remaining without a confirmed plan, Lernout &
Hauspie Speech Products, NV, obtained an extension once more of
its exclusive period to solicit acceptances of its plan,
through and including March 31, 2003. (L&H/Dictaphone Bankruptcy
News, Issue No. 35; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


LEVEL 3 COMMS: Completes Acquisition of All Genuity's Assets
------------------------------------------------------------
Level 3 Communications, Inc., (Nasdaq: LVLT) completed its
acquisition of substantially all the assets and operations of
Genuity, a Tier 1 Internet Protocol communications company based
in Woburn, Mass. As consideration, Level 3 has paid $60 million
in cash to Genuity plus $77 million in cash for prepayments to
vendors for network services to be used by Level 3 in 2003. In
addition, Level 3 is assuming certain of Genuity's long-term
operating agreements.

Level 3 is purchasing substantially all the assets and customer
contracts owned by the operating subsidiaries of Genuity, Inc.
Pursuant to the asset purchase agreement signed by the companies
on November 27, 2002, Level 3's cash consideration at closing
was adjusted from the previously announced amount of $242
million, including adjustments related to the timing of closing,
employee severance reimbursements, and other adjustments
relating to decisions made to date regarding Genuity's operating
agreements.

The cash consideration from Level 3, along with the cash
remaining on Genuity's balance sheet, will be available to pay
the creditors of Genuity, which filed for protection under
Chapter 11 of the U.S. Bankruptcy Code. In accordance with the
asset purchase agreement, the final dollar amount of the cash
consideration remains subject to additional adjustment within
the next three months, but those adjustments are not expected to
be significant.

     One of the world's largest Internet backbone networks

As a result of the transaction, Level 3 now operates one the
largest Internet backbones in the world and is the primary
provider of Internet connectivity for tens of millions of dial-
up and broadband subscribers, through its ISP, cable and DSL
partners.

"This transaction marks the first major consolidation for the
industry after the market turmoil of the past few years," said
James Q. Crowe, chief executive officer of Level 3. "Industry
observers have been anticipating consolidation and that a
certain number of companies would emerge in a position of
strength, with sustainable and profitable businesses. We believe
this transaction makes Level 3 just such a company. The Genuity
transaction brings together the strength and resources of two
innovative industry leaders -- and positions Level 3 well for
the long term.

"This transaction significantly improves Level 3's financial
position. It adds substantial new revenue from high-quality
customers and creates value by generating significant network
and operating cost synergies for the combined business, as well
as reductions in capital expenditures. As a result, it
accelerates our projected time to positive free cash flow to the
second quarter of 2004."

Crowe noted that Level 3 is inheriting Genuity's culture and
long history as an Internet pioneer. "Genuity's roots go back to
BBN, which helped create many of the key technologies that
underpin IP communications," Crowe said. "Its engineers created
the first email system and sent the first email over a packet
network. They helped create the first routers and build the
first IP networks, which grew to become what we now know as the
Internet. More recently, Level 3 helped pioneer softswitch
technology, implemented Multi- Protocol Label Switching (MPLS)
services, and revolutionized bandwidth provisioning with its
ONTAP(SM) process. We believe that, together, we can build on
that strong combined legacy of innovation."

Paul R. Gudonis, Genuity's chief executive officer, also praised
the transaction. "The Genuity team has built a well-deserved
reputation for both technical innovation and customer care, of
which I am tremendously proud," Gudonis said. "[Tues]day, we
look forward to continuing that legacy of excellence as part of
Level 3. We believe this transaction is in the best interest of
both our creditors and customers. We believe that our customers
will benefit from having a stronger and more financially sound
service provider with industry-leading operational capabilities
and a technically advanced network platform."

"I am particularly pleased that Paul Gudonis has agreed to join
our team as Executive Vice President," Crowe said. "Initially,
Paul will work with senior management on the Genuity transition
and integration, as well as mergers and acquisitions and overall
corporate strategy. His vision, talent and experience will be of
great value to us as we move through the integration process."

          Agreements with Verizon and America Online

As part of the transaction, Level 3 has negotiated commercial
agreements with both Verizon and America Online, Genuity's
largest customers.

Verizon has signed new multi-year agreements with Level 3. Under
the agreements, Level 3 will provide a range of services to
Verizon, including certain transport and IP services, which
Verizon may use or resell to its customers. In addition, Level 3
will become Verizon's digital subscriber line aggregation
supplier in over 20 markets in North America. Under the
agreements, Level 3 will purchase certain services from Verizon
to expand its managed modem business.

"We're extremely pleased to be entering into this expanded
relationship with Level 3," said Paul Lacouture, president of
Verizon's Network Services Group. "We look forward to working
together closely and believe that our relationship can serve as
a source of significant value for both companies going forward."

As previously disclosed, America Online has signed an agreement
consenting to Level 3 acquiring America Online's network
services agreement with Genuity.

Kevin O'Hara, Level 3's president and chief operating officer,
said: "Through the Genuity transaction, we have been able to
forge significant expansions to our existing customer
relationships with Verizon and America Online, two of the
world's leading communications franchises. Our ongoing
relationship with these industry leaders is a source of pride
for Level 3, and we are committed to delivering the highest
value to them as a service provider."

Seth Libby, senior analyst with the wholesale communications
services practice at the Yankee Group, said the acquisition
brings needed consolidation in the Tier 1 backbone community.
"This transaction positions Level 3 with AT&T, WorldCom and
Sprint as a leading carrier of Internet traffic," Libby said.
"In addition, the customer contracts with Verizon and America
Online -- combined with Level 3's existing business -- establish
Level 3 as the primary provider of backbone connectivity for
millions of broadband subscribers."

        Genuity business unit to focus on managed services

Level 3 will operate its newly acquired managed IP services
business in Woburn under the name Genuity Managed Services. The
managed IP services business will deliver an enhanced product
suite, including Internet access, web hosting, virtual private
networks (VPNs), and advanced security services. It will deliver
those services over the Level 3 network, leveraging the
network's inherent cost efficiency and operational capabilities.

               Positive free cash flow expected
                during second quarter of 2004

As part of this transaction, Level 3 has assumed most of
Genuity's existing customer contracts and in addition, has
signed new multi-year customer contracts that together represent
expected revenue in excess of $1 billion over the remaining life
of the agreements. The company expects the Genuity transaction
to provide approximately $600 million of new revenue to Level 3
during 2003. Integration costs of approximately $75 to $100
million are expected to be incurred during 2003. As a result of
this transaction, the company now expects positive free cash
flow to occur in the second quarter of 2004.

"As a result of the degree of overlap in services and in the
geography of the Genuity and Level 3 networks, as well as our
integration planning, we are confident in our ability to
significantly reduce network expenses, operating expenses and
capital expenses over the coming quarters," said Sureel Choksi,
Level 3's chief financial officer.

                Level 3's acquisition strategy

Crowe noted that the Genuity transaction is consistent with
Level 3's previously announced acquisition strategy. "As we have
said in the past, we evaluate every potential acquisition
according to its ability to generate positive cash flow from
high credit quality customers," Crowe said. "We look for
opportunities to acquire recurring revenues that come
predominantly from services we already provide, in geographic
areas that we already serve, with customers consistent with our
existing customer base. Above all, we are committed to remaining
fully funded to free cash flow breakeven and improving our
financial position. The acquisition of Genuity's business meets
all of these key criteria."

Level 3 (Nasdaq: LVLT) is an international communications and
information services company. The company operates one of the
largest Internet backbones in the world, is one of the largest
providers of wholesale dial-up service to ISPs in North America
and is the primary provider of Internet connectivity for
millions of broadband subscribers, through its cable and DSL
partners. The company offers a wide range of communications
services over its 20,000-mile broadband fiber optic network
including Internet Protocol (IP) services, broadband transport,
colocation services, and patented Softswitch-based managed modem
and voice services. Its Web address is http://www.Level3.com

The company offers managed IP and information services through
its subsidiaries, Genuity Managed Services, (i)Structure and
Software Spectrum. For additional information, visit their
respective Web sites at http://www.genuity.com
http://www.softwarespectrum.comand http://www.i-structure.com


LEVEL 3 COMMS: Narrows Net Capital Deficit to $240MM at Dec. 31
---------------------------------------------------------------
Level 3 Communications, Inc., (Nasdaq: LVLT) announced its
fourth quarter 2002 results. The net loss for the quarter was
$313 million. Excluding certain one-time and extraordinary
items, the net loss for the quarter was $240 million. One-time
and extraordinary items included a $44 million extraordinary
gain from debt for equity exchanges on non-convertible debt
securities, a $68 million expense associated with debt for
equity exchanges of convertible securities, a $89 million gain
from the sale of Commonwealth Telephone stock and $138 million
in non-cash asset impairment charges.

Consolidated GAAP Revenue for 2002 was $3.15 billion, a 105
percent increase from 2001, largely as a result of the company's
acquisitions of Corporate Software and Software Spectrum.

Communications GAAP revenue for 2002 was $1.1 billion, a 15
percent decrease from $1.3 billion in 2001. The decline in
revenue was primarily due to a $288 million reduction in upfront
dark fiber revenue in 2002, partially offset by growth in
communications services revenue.

Consolidated EBITDA, excluding stock based compensation expense
and non- cash impairments and restructuring charges, was $118
million for the fourth quarter and $354 million for the full
year, compared to negative $300 million for the full year 2001.
Consolidated Adjusted EBITDA, defined by the company as
Consolidated EBITDA plus changes in cash deferred revenue and
non-cash cost of goods sold, was $121 million for the fourth
quarter and $457 million for the year, compared to $659 million
for the full year 2001, excluding the discontinued Asian
operations.

"I am pleased with the substantial improvement in performance we
have made this quarter," said James Q. Crowe, CEO of Level 3.
"We experienced modest improvement in new communications sales
and revenue, which coupled with continued tight management of
expenses, resulted in positive Operating Cash Flow for the first
time. We look forward to integrating Genuity's operations to
further increase cash flow over time."

                           Overview

The company's core business consists of communications and
information services. The company's non-core businesses include
coal mining and toll road operations. The company reports
separately the financial results of the communications business,
information services business and other businesses.

Communications GAAP Revenue and Cash Revenue:

Communications GAAP revenue for the fourth quarter 2002 was $273
million, versus $269 million for the fourth quarter 2001, and
versus $274 million for the third quarter 2002. Included in
total communications GAAP revenue was $243 million of
communications services revenue and $30 million attributable to
reciprocal compensation revenue. Reciprocal compensation
increased to $30 million for the fourth quarter 2002 from $28
million in the third quarter 2002 as a result of expected one-
time settlement revenue of $13 million partially offset by a
decrease due to annual contractual limits on reciprocal
compensation payments made by certain carriers. Communications
services revenue, excluding non-recurring termination revenue
and customer settlements, increased from $220 million during the
third quarter 2002 to $233 million during the fourth quarter
2002.

Communications cash revenue, defined as communications revenue
plus changes in cash deferred revenue, was $275 million for the
fourth quarter 2002 and $1.2 billion for the full year 2002.
Communications cash revenue includes upfront cash received for
dark fiber and other capacity sales that are recognized as GAAP
revenue over the life of the contract, generally ranging from 5
to 20 years. As the difference between communications GAAP
revenue and communications cash revenue is not expected to be
material going forward, the company does not plan to report
communications cash revenue in future quarters.

"During the fourth quarter, we saw continued strength in our
softswitch and IP services segments, as well as modest growth in
new sales of transport services," said Kevin O'Hara, president
and COO of Level 3. "Additionally, the rate of customer
disconnects continued to decline."

The company recently announced new customer agreements with AOL,
Cablevision Systems, Claranet, NORDUnet, United Online and
Verizon.

Cost of Revenue

Communications cost of revenue for the fourth quarter 2002 was
$39 million, resulting in an 86 percent gross margin, versus 85
percent in the third quarter 2002 and 67 percent in the same
period last year. For the full year 2002, gross margin for the
communications business increased to 81 percent from 54 percent
for the full year 2001 primarily as a result of the migration of
customer traffic to the Level 3 network from leased facilities.

         Selling, General and Administrative Expenses

Communications SG&A expenses for the fourth quarter 2002 were
$136 million, a 9 percent decrease over third quarter 2002 SG&A
expenses of $150 million, and a 34 percent decrease over fourth
quarter 2001 SG&A expenses of $207 million. SG&A expenses during
the fourth quarter were lower than expected due to one-time
accrual reductions totaling $16 million. The year over year
decrease primarily resulted from the company's ongoing cost
containment programs. The total number of employees in the
communications business was approximately 2,725 at the end of
the fourth quarter 2002.

               Earnings Before Interest, Taxes,
             Depreciation and Amortization (EBITDA)

Communications EBITDA, excluding stock-based compensation
expense and non- cash impairments and restructuring charges, was
positive $105 million for the fourth quarter 2002, versus
positive $84 million for the third quarter 2002. Communications
EBITDA was positive $282 million for the full year 2002 compared
to negative $322 million for the full year 2001.

Communications EBITDA margin increased to positive 38 percent
this quarter from positive 31 percent for the previous quarter,
and negative 29 percent for the same period in 2001.

                      Capital Expenditures

Consolidated gross capital expenditures for property, plant and
equipment were $45 million for the quarter and $218 million for
the year. However, reported or "net" capital expenditures were
negative $6 million for the quarter, primarily as a result of
the final payments made with respect to several large
construction contracts at costs that were below previously
estimated and accrued amounts. During the quarter, the company
closed out contracts that resulted in net reversals of
previously reported capital expenditures of $51 million. Capital
expenditures for the fourth quarter 2002 included approximately
$2 million for the information services and other businesses.

               Network and Operational Highlights

At the end of the fourth quarter, Level 3 offered services in 73
markets, consisting of 57 markets in North America and 16
markets in Europe. The company has local fiber networks in 36
markets and has constructed approximately 947,000 local fiber
miles to date.

Level 3 continues to be focused on providing industry leading
customer service and operational performance. The company's
proprietary provisioning system, ONTAP(SM), enables the company
to provide its customers superior dependability and
responsiveness.

In January 2003, Level 3 was recognized by Frost & Sullivan as
the Next Generation Service Provider of the Year. Frost &
Sullivan, a global growth consulting leader, presents awards to
companies that demonstrate excellence in their industry.

              Information Services Business Segment

Results for the information services business include the
company's Software Spectrum and (i)Structure subsidiaries. The
results of Corporate Software are consolidated with Software
Spectrum. As a result of the company's acquisitions of Software
Spectrum and Corporate Software during 2002, prior year
comparisons for the information services business are not
meaningful.

Revenue

Information services revenue was $642 million for the fourth
quarter 2002, representing a 16 percent decrease over the
previous quarter and falling short of the company's previous
projection of $750 million. The revenue shortfall was primarily
a result of Microsoft's sales promotions earlier in the year
that increased third quarter revenues but diminished the typical
seasonality that results in higher fourth quarter revenues.

EBITDA

EBITDA, excluding stock-based compensation expense, from the
information services business was positive $5 million for the
fourth quarter, compared to positive $14 million for the
previous quarter and negative $3 million for the same period
last year, which included only the (i)Structure business. EBITDA
lagged the company's previous projections primarily due to the
revenue shortfall and higher than expected one-time integration
expenses during the fourth quarter. The total number of
employees in the information services business was approximately
3,550 at the end of the fourth quarter.

                        Other Businesses

Revenue

Revenue from the company's coal mining business and its interest
in California Private Transportation Company (CPTC) was $30
million for the fourth quarter 2002, versus $29 million for the
third quarter 2002 and $28 million for the same period last
year. In January 2003, Level 3 sold its interest in its Southern
California toll road, which resulted in the company receiving
approximately $46 million in cash and a reduction in the
company's long-term debt of approximately $139 million.

EBITDA

EBITDA from the company's coal mining business and its interest
in CPTC was positive $8 million for the fourth quarter 2002
compared to positive $11 million last quarter and negative $2
million for the fourth quarter 2001.

Consolidated Expenses

Stock-Based Compensation Expense: The company recognized $27
million in non-cash expenses for stock-based compensation during
the fourth quarter 2002. The company's OSO program represents
the principal component of the company's stock-based
compensation. Since the inception of this program in 1998, this
expense has been accounted for in accordance with SFAS No. 123,
"Accounting For Stock-Based Compensation." Level 3 expenses the
value of OSOs and its other stock-based compensation over the
respective vesting period.

Under Level 3's plan, OSOs are issued quarterly, with the value
of the options indexed to the performance of the company's
common stock relative to the performance of the Standard &
Poor's 500 (S&P 500) Index.

Depreciation and Amortization: Depreciation and amortization
expenses for the quarter were $201 million, consistent with
third quarter 2002 and a 22 percent decrease over the fourth
quarter 2001 depreciation and amortization expenses of $258
million, primarily due to the impairment charge recorded during
the fourth quarter 2001.

       Working Capital, Operating Cash Flow and Liquidity

During the fourth quarter 2002, the company's consolidated
working capital was a source of approximately $8 million in
cash. Working capital requirements were favorable to previous
projections primarily due to higher than expected collections of
receivables in the information services business.

Operating Cash Flow, defined by the company as Consolidated
Adjusted EBITDA minus capital expenditures and working capital
requirements, was positive $84 million in the fourth quarter
2002 compared to negative $32 million for the previous quarter.
Operating Cash Flow for the full year 2002 was negative $57
million.

Free Cash Flow, defined by the company as Operating Cash Flow
minus net cash interest expense, was negative $6 million during
the fourth quarter 2002 compared to negative $152 million for
the third quarter. Operating Cash Flow and Free Cash Flow
benefited from the higher than expected communications EBITDA
during the quarter and higher than expected receivables
collections in the information services business.

Cash and marketable securities, plus restricted cash of $400
million held as security under the company's credit facility,
was $1.5 billion at year end, compared to the company's
previously issued projection of $1.3 billion. The higher than
expected cash balance was primarily due to the sale of certain
non-core assets during the fourth quarter and higher than
expected Operating Cash Flow.

At December 31, 2002, Level 3's balance sheet shows a total
shareholders' equity deficit of about $240 million.

        Acquisition of Genuity Assets and Operations

Level 3 completed its acquisition of substantially all of
Genuity, Inc.'s assets and operations. Level 3 paid $60 million
in net cash consideration to Genuity and assumed certain long-
term operating agreements. As part of the transaction, the
company also paid $77 million in cash for prepaid network vendor
services to be used by Level 3 during 2003. The company also
expects to incur one-time integration costs of approximately $75
to $100 million during 2003.

As a result of the transaction, Level 3 now operates one of the
largest Internet backbones in the world and is the primary
provider of Internet connectivity for tens of millions of dial-
up and broadband subscribers, through its ISP, cable and DSL
customers.

As part of this transaction, Level 3 has assumed most of
Genuity's existing customer contracts and in addition, has
signed new multi-year customer contracts that together represent
expected revenue in excess of $1 billion over the remaining life
of the agreements. The company expects the Genuity transaction
to provide approximately $600 million of new revenue to Level 3
during 2003.

"This transaction significantly improves Level 3's financial
position," said Crowe. "It adds substantial new revenue from
high-quality customers and creates value by generating
significant network and operating cost synergies, and reduced
capital expenditures for the combined business. As a result of
the Genuity transaction, the company's projection of free cash
flow positive is accelerated to the second quarter of 2004."

               Debt Reduction and Asset Sales

Debt Reduction

Since the beginning of the fourth quarter, the company has
reduced the face amount of consolidated debt by approximately
$500 million, including $139 million through the CPTC
transaction completed in January 2003. The balance of the debt
reduction occurred during the fourth quarter and consisted of
$295 million face amount of debt for equity exchanges in which
the company issued 24 million new shares of common stock, and a
reduction in mortgage debt by $59 million through the sale of
excess real estate.

"We're pleased with the continuing improvement in our balance
sheet through debt reductions," said Sureel Choksi, CFO of Level
3. "Over the past 18 months, we have reduced the face amount of
debt by approximately $2.9 billion through a combination of cash
repurchases, debt for equity exchanges and asset sales. As we've
said in the past, we'll continue to evaluate debt reduction
opportunities over time."

                           Asset Sales

Commonwealth Telephone

During the fourth quarter, the company received approximately
$159 million in net proceeds from the sale of 4.74 million
shares of Commonwealth Telephone Enterprises, Inc.
(Commonwealth) common stock. The company currently holds
approximately 1 million shares of Commonwealth Class B common
stock and retains a 29 percent voting interest in Commonwealth.

Real Estate

During the fourth quarter, Level 3 sold two excess colocation
facilities, resulting in gross proceeds of approximately $72
million. Approximately $59 million in cash was used to repay
associated mortgage debt. As a result of these transactions, the
company recognized an $81 million non-cash impairment charge
during the quarter.

CPTC

In January 2003, Level 3 received approximately $46 million in
cash proceeds from the sale of its toll road interest in
Southern California. Level 3's consolidated debt was reduced by
approximately $139 million as a result of the transaction.

                       Business Outlook

"The past two years have been marked by significant turmoil in
the communications industry, including generally weak demand for
communications services, long customer sales cycles and a record
number of companies within the industry filing for bankruptcy
protection," said Crowe. "As a result of these factors, as well
as the overall economic slowdown, our visibility into future
sales and cash flow growth has been limited.

"However, we experienced a modest improvement in new sales
during the past three months, although sales cycles continue to
be longer than we would like. Our customers are increasingly
viewing Level 3 as a clear survivor in the industry. As a
result, we are cautiously optimistic that during the middle of
2002, we reached a bottom in terms of new sales levels and
expect to see gradual improvement going forward. In addition, we
have demonstrated an ability to continue to improve cash flow as
a result of tight management of expenses.

"With the acquisition of Genuity's assets and operations, we
have also taken the first major step in industry consolidation,"
said Crowe. "We believe we are uniquely positioned to realize
significant cost synergies, resulting in further improvements in
cash flow after a period of integration. Overall, while we
continue to be subject to a weak economy and uncertainty
surrounding the prospects for war, our visibility, particularly
as it relates to cash flow performance, is improving."

"In addition to first quarter projections incorporating the
Genuity transaction, we are providing full year projections for
certain cash flow metrics," said Choksi. "For the communications
business, we expect to initially experience a reduction in gross
margin percentage, EBITDA and Operating Cash Flow as we take on
significant portions of Genuity's existing cost structure and
incur one-time integration expenses. As the year progresses, we
expect the Genuity transaction to contribute positively to
communications cash flow as we are able to realize significant
cost synergies.

"For the information services business, we expect EBITDA,
excluding stock- based compensation expense, to improve
significantly during 2003 as a result of the cost synergies
realized through the combination of Software Spectrum and
Corporate Software during 2002."

             Quarterly and Full Year Projections

Including the effects of the Genuity transaction, Level 3
expects consolidated GAAP revenue to be approximately $935
million during the first quarter 2003, including $395 million
from the communications business, $520 million from information
services and $20 million from other businesses. Approximately
$350 million of communications revenue is expected to come from
services revenue, $10 million in non-recurring termination and
customer settlement revenue, and approximately $35 million from
reciprocal compensation. The Genuity transaction, completed
during the quarter, is expected to contribute approximately $110
million to first quarter communications revenue.

Consolidated GAAP revenue is expected to be approximately $4.0
to $4.4 billion for the full year 2003. Communications revenue
is expected to be $1.7 to $1.8 billion, of which approximately
$600 million is expected to come from the Genuity transaction.
Information services revenue is expected to be $2.25 to $2.5
billion, and other revenue is expected to be $70-$80 million.

Gross margins for the communications business are expected to
decline to the mid to high 60 percent range for the first
quarter 2003. The quarter over quarter decrease is the result of
the lower initial margins of the Genuity business. Gross margins
are projected to improve during 2003 to the mid 70 percent range
by the end of the year as the integration of Genuity's
operations progresses.

Consolidated EBITDA, excluding stock-based compensation expense,
is expected to be $62 million for the first quarter, including
$55 million from the communications business, $5 million from
the information services business and the balance from other
businesses. The projected quarter over quarter decline is a
result of the acquisition of Genuity's assets and operations as
well as an expected increase in SG&A expenses.

Consolidated EBITDA, excluding stock-based compensation expense,
is expected to be $350 to $400 million for the full year 2003.
The company expects Consolidated Adjusted EBITDA of $63 million
for the first quarter and $375 to $450 million for the full year
2003.

Consolidated capital expenditures, including capital
expenditures related to the Genuity integration, are expected to
be approximately $55 million for the first quarter. Consolidated
working capital requirements are expected to be approximately
$25 million for the first quarter. The company expects the net
loss for the first quarter to be $0.65 per share.

Operating Cash Flow is expected to be negative $20 million for
the first quarter 2003 and positive $100 to $125 million for the
full year 2003, net of $75 to $100 million of one-time Genuity
integration costs. The expected decrease in Operating Cash Flow
from the fourth quarter 2002 to the first quarter 2003 is
primarily a result of the seasonality of the information
services business and the effects of the Genuity transaction.

The company expects to have cash and marketable securities,
including $400 million in restricted cash held as security under
the company's credit facility, of approximately $1.2 billion at
year-end.

As a result of the Genuity acquisition, the company now expects
to turn free cash flow positive during the second quarter of
2004.

Beginning in the first quarter 2003, the company will change its
use of non-GAAP financial disclosures to conform with recently
finalized Securities and Exchange Commission (SEC) rules
regarding the use of these non-GAAP metrics. As a result, Level
3 may modify certain non-GAAP financial metrics in future
quarters.

                             Summary

"I am pleased with Level 3's ability to execute in this
environment," said Crowe. "I believe that our ability to
complete and successfully integrate the Genuity transaction
coupled with our solid financial and operating performance, our
industry-leading provisioning times and quality of service, will
enable Level 3 to continue to differentiate itself in the
marketplace as we move forward during 2003."

Level 3 (Nasdaq: LVLT) is an international communications and
information services company. The company operates one of the
largest Internet backbones in the world, is one of the largest
providers of wholesale dial-up service to ISPs in North America
and is the primary provider of Internet connectivity for
millions of broadband subscribers, through its cable and DSL
partners. The company offers a wide range of communications
services over its 20,000-mile broadband fiber optic network
including Internet Protocol (IP) services, broadband transport,
colocation services, and patented Softswitch-based managed modem
and voice services. Its Web address is http://www.Level3.com

The company offers managed IP and information services through
its subsidiaries, Genuity Managed Services, (i)Structure and
Software Spectrum. For additional information, visit their
respective Web sites at http://www.genuity.com
http://www.softwarespectrum.comand http://www.i-structure.com


LGMI INC: Chapter 11 Case Summary & Largest Unsecured Creditor
--------------------------------------------------------------
Debtor: LGMI, Inc.
        1400 Smith Street
        Houston, Texas 77002

Bankruptcy Case No.: 03-10681

Type of Business: The primary purpose of Debtor, an affiliate
                  of Enron Corp., is to hold a limited
                  partnership interest in an entity that
                  transports and markets natural gas in
                  connection with a Louisiana pipeline.

Chapter 11 Petition Date: February 5, 2003

Court: Southern District of New York (Manhattan)

Judge: Arthur J. Gonzalez

Debtors' Counsel: Brian S. Rosen, Esq.
                  Weil, Gotshal & Manges LLP
                  767 Fifth Avenue
                  New York, New York 10153
                  212-310-8602
                  Fax: 212-310-8007

                  and

                  Melanie Gray, Esq.
                  Weil, Gotshal & Manges LLP
                  700 Louisiana, Suite 1600
                  Houston, Texas 77002
                  Telephone: (713) 546-5000

Total Assets: $59,904,738

Total Debts: $62,483,493

Debtor's Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
State of Louisiana          Tax Debt                  $531,804
Department of Revenue
P.O. Box 4936
Baton Rouge, LA 70821-4936
Edward B. Landry
Revenue Audit Reviewer
Phone: 225-219-2720


LOUISIANA GAS: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Louisiana Gas Marketing Company
        1400 Smith Street
        Houston, Texas 77002

Bankruptcy Case No.: 03-10676

Type of Business: The primary purpose of Debtor, an affiliate
                  of Enron Corp., is to hold a limited
                  partnership interest in an entity that
                  transports and markets natural gas in
                  connection with a Louisiana pipeline.

Chapter 11 Petition Date: February 5, 2003

Court: Southern District of New York (Manhattan)

Judge: Arthur J. Gonzalez

Debtors' Counsel: Brian S. Rosen, Esq.
                  Weil, Gotshal & Manges LLP
                  767 Fifth Avenue
                  New York, New York 10153
                  212-310-8602
                  Fax: 212-310-8007

                  and

                  Melanie Gray, Esq.
                  Weil, Gotshal & Manges LLP
                  700 Louisiana, Suite 1600
                  Houston, Texas 77002
                  Telephone: (713) 546-5000

Total Assets: $37,104,526

Total Debts: $163,457,520


LOUISIANA RESOURCES: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Louisiana Resources Company
        1400 Smith Street
        Houston, Texas 77002
        aka Louisiana Resources Company (LRC)
        aka LRC

Bankruptcy Case No.: 03-10678

Type of Business: The primary purpose of the Debtor, an
                  affiliate of Enron Corp., is to hold a
                  limited partnership interest in an entity
                  that transports and markets natural gas in
                  connection with a Louisiana pipeline.

Chapter 11 Petition Date: February 5, 2003

Court: Southern District of New York (Manhattan)

Judge: Arthur J. Gonzalez

Debtors' Counsel: Brian S. Rosen, Esq.
                  Weil, Gotshal & Manges LLP
                  767 Fifth Avenue
                  New York, New York 10153
                  212-310-8602
                  Fax: 212-310-8007

                  and

                  Melanie Gray, Esq.
                  Weil, Gotshal & Manges LLP
                  700 Louisiana, Suite 1600
                  Houston, Texas 77002
                  Telephone: (713) 546-5000

Total Assets: $35,198,957

Total Debts: $34,270,460


LOUISIANA-PACIFIC: Names Daniel Frierson to Board of Directors
--------------------------------------------------------------
Louisiana-Pacific Corporation (NYSE:LPX) elected Daniel K.
Frierson, chairman & chief executive officer of The Dixie Group,
to the board of directors, effective February 1, 2003.

"Dan is a highly ethical, honest, and knowledgeable businessman.
His experience with The Dixie Group will benefit LP as we work
to complete the restructuring program announced last May and
focus on improving our ongoing businesses," said Mark A. Suwyn,
LP chairman and chief executive officer.

Frierson joins LP with more than 37 years of operational
experience. He began his career with Dixie Yarns, Inc., now
called The Dixie Group, in 1966. In 1969, Frierson moved to the
Candlewick division, where he was promoted to sales manager in
1970. From 1975 to 1977, he served as vice president of the
Candlewick division, and from 1977 to 1979, he served as
President of the division and Executive Vice President of Dixie
Yarns, Inc. In 1979, he became President of Dixie Yarns, Inc.
and in 1987 was elected Chairman of the Board. Frierson
graduated from the University of Virginia and received his MBA
from the University's Darden School of Business.

Also on February 1, 2003, LP's board of directors voted to amend
the company's bylaws to increase the number of directors on the
board from 10 to 11 positions.

LP, whose corporate credit rating is rated by Standard & Poor's
at BB, is a premier supplier of building materials, delivering
innovative, high-quality commodity and specialty products to its
retail, wholesale, homebuilding and industrial customers. Visit
LP's Web site at http://www.lpcorp.comfor additional
information on the company.

                        *    *    *

Since May 2002, Louisiana-Pacific Corp.'s debt ratings fell into
the low-B levels:

     Debt Obligation                  S&P   Moody's  Fitch
     ---------------                  ---   -------  -----
     Senior Secured Debt              BB+     Ba1      NR
     Senior Unsecured Debt
        8-1/2% Notes due 2005         BB-     Ba1      NR
        8-7/8% Notes due 2010         BB-     Ba1      NR
     Subordinated Debt
        10-7/8% Notes due 2008        B+      Ba2      NR

"Management's desire to significantly reduce debt and focus on
businesses in which the company has competitive market and cost
positions should help stabilize credit quality and result in
acceptable performance throughout the business cycle," S&P said
last year.


LRCI INC: Voluntary Chapter 11 Case Summary
-------------------------------------------
Debtor: LRCI, Inc.
  1400 Smith Street
  Houston, Texas 77002

Bankruptcy Case No.: 03-10682

Type of Business: The primary purpose of Debtor, an affiliate
                  of Enron Corp., is to hold a limited
                  partnership interest in an entity that
                  transports and markets natural gas in
                  connection with a Louisiana pipeline.

Chapter 11 Petition Date: February 5, 2003

Court: Southern District of New York (Manhattan)

Judge: Arthur J. Gonzalez

Debtors' Counsel: Brian S. Rosen, Esq.
                  Weil, Gotshal & Manges LLP
                  767 Fifth Avenue
                  New York, New York 10153
                  212-310-8602
                  Fax: 212-310-8007

                  and

                  Melanie Gray, Esq.
                  Weil, Gotshal & Manges LLP
                  700 Louisiana, Suite 1600
                  Houston, Texas 77002
                  Telephone: (713) 546-5000

Total Assets: $205,824,484

Total Debts: $267,405,935


LUCENT: Inks 10 Reseller Agreements to Bring-In $10MM in Revenue
----------------------------------------------------------------
Lucent Technologies (NYSE: LU) announced 10 new Business
Partners have agreed to sell Lucent's market-leading performance
management and Internet protocol (IP) management software
solutions, VitalSuite(r) and VitalQIP(tm), to enterprises.

The software allows IT organizations to monitor every aspect of
network and application performance, and to better manage their
IP addresses. VitalSuite(r) and VitalQIP(tm) improve visibility
into the network and enable information technology departments
to enhance overall quality of service and reduce operating
expenses.

The new business partners include Adage Networks, HudsonIT,
Innovative Systems Design Inc., NetSource America, Network
Systems Architects, Northrop Grumman Information Technology,
Probe Systems, PVA Inc., Red Rock Technologies LLC and VANDIS.

The partners, who are located throughout North America, also
will offer pre-and post-sales support for these Lucent Software
solutions as well as the professional services needed to
install, manage and maintain the software.

"These new Lucent business partners in our North American Region
represent a significant milestone in achieving our goal to
establish a broader channel presence," said Bob Vetter,
president of the Network Operations Software roup in Lucent
Technologies. "By leveraging these distribution channels for our
market-leading portfolio of enterprise network management
software solutions, we move one step closer to establishing a
sales network with which to deliver our products and services to
enterprise customers."

"Enrolling these motivated market-leading software resellers and
integrators as business partners is crucial as we continue to
demonstrate the positive impact the business partner program can
have for Lucent," said Frank Farese, vice president, Global
Business Partners for Lucent. "We have carefully selected these
software resellers to create a relationship that benefits the
Lucent Business Partners and their customers."

VitalSuite(r) is a fully integrated package of three software
components, VitalNet(tm), VitalEvent(tm) and VitalApps(tm).
Together they monitor network and application performance and
identify problems in real-time with easy-to-read advanced GUIs
and graphical reports.

VitalQIP(tm) is a software solution designed to automate IP
address management across the enterprise. VitalQIP(tm) helps to
configure, automate, integrate and administer IP services across
the entire network and is compatible with multiple technologies
and platforms. The IP management software solution improves
reconfiguration time by more than 60 percent, which
significantly reduces the time spent manually managing an IP
infrastructure.

The Lucent Business Partner Program offers its participants one
of the industry's fastest return on investment, increased
revenue and margins, a nationwide team of sales, service and
support staff, new business development and co-marketing
opportunities, training, and access to Bell Labs research.

The program includes resellers, systems integrators and
distributors who deliver Lucent products including Internet
security solutions, IP services solutions, remote access
solutions, Optical Networking Solutions and Services to
enterprises, ISPs and service providers worldwide. For more
information on the Business Partner Program or to locate a
Lucent Business Partner, visit the Web site at
http://www.lucent.com/partner/advantage

Lucent Technologies, headquartered in Murray Hill, N.J., designs
and delivers the systems, software and services for next-
generation communications networks for service providers and
enterprises. Backed by the research and development of Bell
Labs, Lucent focuses on high-growth areas such as broadband and
mobile Internet infrastructure; communications software; web-
based enterprise solutions that link private and public
networks; and professional network design and consulting
services. For more information on Lucent Technologies, visit its
Web site at http://www.lucent.com

Lucent Technologies' 7.700% bonds due 2010 (LU10USR1) are
trading at about 32 cents-on-the-dollar, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=LU10USR1for
real-time bond pricing.


MANHATTAN IMAGING: Has Until Feb. 7 to Solicit Plan Acceptances
---------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the Southern District
of New York, Manhattan Imaging Associates, PC, obtained an
extension of its exclusive solicitation period pursuant to 11
U.S.C. Sec. 1121(d).  The Court gives the Debtor, until February
7, 2003, the exclusive right to solicit acceptances of its
Chapter 11 Plan from its creditors.

Manhattan Imaging Associates, P.C., operator of a medical
imaging/radiology imaging center, filed for chapter 11
protection on February 13, 2002 (Bankr. S.D.N.Y. Case No.
02-10646).  Robert R. Leinwand, Esq., at Robinson Brog Leinwand
Greene Genovese & Gluck P.C., represents the Debtor in its
restructuring efforts.  When the Company filed for protection
from its creditors, it listed $5,194,769 in total assets and
$5,328,079 in total debts.


MOODY'S CORP: Fourth Quarter 2002 Results Show Improvement
----------------------------------------------------------
Moody's Corporation (NYSE:MCO) announced results for the fourth
quarter and full year 2002.

    Summary Results for Fourth Quarter and Full Year 2002

Moody's revenue for the three months ended December 31, 2002
totaled $271.9 million, an increase of 23% from $220.9 million
for the same period of 2001. Reported revenue included $16.0
million related to KMV, which Moody's acquired on April 12,
2002. Excluding KMV's revenue, fourth quarter 2002 revenue was
$255.9 million, up 16% year-over-year. Fourth quarter operating
income of $129.0 million rose 16% from $111.0 million in the
same period of 2001.  Net income for the fourth quarter of 2002
was $69.8 million, an increase of 19% from $58.8 million in the
prior year quarter.

Revenue for full year 2002 totaled $1,023.3 million, rising 28%
from $796.7 million for 2001. Excluding KMV, revenue for 2002
was $981.2 million, up 23% from the prior year. Operating income
of $538.1 million for 2002 was up 35% from $398.5 million for
2001. Net income for 2002 was $288.9 million, an increase of 36%
from $212.2 million for 2001. Diluted earnings per share for
2002 were $1.83, an increase of 39% from $1.32 for 2001.

John Rutherfurd Jr., President and Chief Executive Officer of
Moody's Corporation said, "Moody's produced outstanding results
in 2002 after very strong growth in 2001. Moody's Investors
Service achieved significant revenue growth in most ratings
sectors -- including global structured finance, European
ratings, and U.S. public finance - as well as in global
research. In addition, Moody's KMV had excellent growth,
exceeding our projections at the time of acquisition. Our
results reflect our success in capitalizing on growth areas in
the global debt capital markets as well as creating the leading
quantitative credit assessment business, and demonstrate the
talent and dedication of our employees throughout the world."

                     Fourth Quarter 2002

Moody's fourth quarter 2002 revenue reflected strong gains in
several sectors of the ratings business compared with the prior
year period. Ratings revenue totaled $216.8 million for the
fourth quarter, a 14% increase from $189.9 million for the
fourth quarter of 2001. Research revenue grew 31% to $25.6
million in the quarter, reflecting increased customer focus on
credit risk and strong growth in licensing of Moody's data to
third party distributors. Overall, activity in the financial
markets for MIS was consistent with the outlook we provided at
the end of the third quarter: continued strength in global
structured finance, U.S. public finance, and global research,
and relative weakness in U.S. corporate finance. Moody's KMV
reported revenue of $29.5 million in the fourth quarter;
excluding the impact of KMV, revenue in the business was $13.5
million, up 17% from the fourth quarter of 2001.

Within the MIS ratings business, global structured finance
revenue totaled $103.3 million for the fourth quarter of 2002,
an increase of 30% from $79.4 million a year earlier. In the
U.S., structured finance revenue continued to benefit from
robust year-over-year volume increases in residential mortgage-
backed securities and good growth in the credit derivatives,
commercial mortgage-backed and asset-backed sectors.
International structured finance revenue rose more than 40%
year-over-year reflecting continued strong secular growth in
Europe and Japan, the two largest structured finance markets
outside the U.S. Global corporate finance revenue of $53.9
million for the fourth quarter was down 5% from $56.5 million
for the year-ago quarter. This decline was the result of lower
issuance in both the U.S. and Europe reflecting weak business
investment and slower refinancing activity. Revenue from global
financial institutions and sovereigns was $37.1 million for the
fourth quarter of 2002, an increase of 3% from the fourth
quarter of 2001 as growth in relationship-based revenues more
than offset the effect of a moderate decrease in issuance during
the quarter. U.S. public finance revenue grew 25% to $22.5
million for the fourth quarter of 2002, reflecting the favorable
interest rate environment and lower pay-as-you-go financing by
municipal borrowers.

Moody's U.S. revenue totaled $175.4 million for the fourth
quarter of 2002, an increase of 18% from $148.2 million in the
fourth quarter of 2001. Excluding the impact of KMV, Moody's
U.S. revenue was $168.5 million, up 14% from the year-earlier
period. For MIS, the increase in U.S. revenue was driven by
robust growth in structured finance and public finance ratings
and in research sales. MKMV also posted strong year-over-year
revenue growth.

Moody's international revenue of $96.5 million for the fourth
quarter of 2002 was 33% higher than the prior year period.
International revenue accounted for 35% of Moody's total for the
quarter, up from 33% for the fourth quarter of 2001. Excluding
the impact of KMV, international revenue was $87.4 million, 20%
higher than the fourth quarter of 2001. MIS had robust results
in European and Japanese structured finance ratings as well as
strong growth in its research sales.

Total operating expenses were $142.9 million for the fourth
quarter, 30% higher than the same period of 2001. Moody's fourth
quarter 2002 operating margin was 47% compared with 50% for the
fourth quarter of 2001. The fourth quarter 2002 margin reflected
the impact of several expenses not incurred in the prior year
period. These include investment spending on enhanced ratings
practices including the hiring of specialists in the areas of
accounting, risk transference and corporate governance; product
development; technology initiatives; and the settlement of a
patent licensing matter and costs related to management
succession at MKMV.

Moody's operating margin for the fourth quarter of 2002 was 7%
lower than the margin in the first nine months of the year.
Expenses resulting in the reduced margin included a $6 million
contribution to the Moody's Foundation, which was established in
2001 to carry out philanthropic activities on behalf of Moody's
Corporation, as well as the items noted above.

                        Full Year 2002

Revenue at Moody's Investors Service for 2002 was $941.8
million, an increase of 23% from 2001. MIS ratings revenue was
$848.2 million in 2002, up 22% from $694.4 million for 2001.
This growth was primarily driven by strength in U.S. and
European structured finance, global financial institutions, and
U.S. public finance. Global research revenue was $93.6 million,
31% higher than in 2001. For Moody's KMV 2002 revenue totaled
$81.5 million compared to $30.8 million for 2001; excluding KMV,
revenue for the business was $39.4 million for 2002, an increase
of 28% over 2001.

For the year, Moody's U.S. revenue was $680.3 million, an
increase of 21%. Excluding KMV, U.S. revenue was $661.3 million,
18% higher than the previous year. Moody's international revenue
rose 45% in 2002 to $343.0 million and increased 36% excluding
KMV. International revenue was 34% of Moody's total revenue in
2002, up from 30% in 2001.

                   Share Repurchase Program

During the fourth quarter of 2002, Moody's repurchased 5.0
million shares at a total cost of $227 million, including
400,000 shares to offset the issuance of shares under employee
stock plans. Since becoming a public company in October 2000 and
through the end of 2002, the company repurchased 19.5 million
shares at a total cost of $709.3 million, including 6.0 million
shares to offset shares issued under employee stock plans.
Management continues to anticipate completing the current $450
million share repurchase authorization by mid-2004.

As planned, Moody's funded the second quarter acquisition of KMV
with a combination of cash on hand and borrowings from its
short-term bank credit facilities, which were subsequently
repaid. Moody's has since borrowed under its bank credit
facilities to fund share repurchases, and has benefited from
favorable short-term borrowing costs. Management intends to
pursue long-term financing when it is appropriate in light of
cash requirements for share repurchase and other strategic
opportunities, which will result in higher financing costs. At
year-end 2002, Moody's had $107 million of outstanding
borrowings under its bank credit facilities, in addition to the
$300 million of long-term financing that was put in place at the
Company's spin-off from The Dun & Bradstreet Corporation.

                Outlook for Full Year 2003

The Company's outlook for 2003 takes into consideration the
current regulatory environment both within and outside the
United States. The SEC recently published a report on rating
agencies pursuant to the Sarbanes-Oxley Act. Ray McDaniel,
president of Moody's Investors Service, commented, "In our view
the SEC's report reflects the importance of ratings in the
marketplace and asks questions that are appropriate. We look
forward to working with the SEC and the Congress on these
issues." Based on management's current assessment, Moody's does
not believe that regulatory action will have a material effect
on the Company's 2003 outlook. However, changes in the
competitive structure of the ratings industry possibly resulting
from additional recognized rating agencies could have an effect
in the future.

We are providing our outlook for 2003 at a time of significant
global macroeconomic and geopolitical uncertainty. The inherent
difficulty in predicting changes in the global environment, and
the timing of such changes, creates important potential variance
in our outlook.

We recognize the difficulties in forecasting future results;
nevertheless, as we announced at the end of the third quarter,
we continue to expect low double digit percent growth in
reported earnings per share in 2003, before the impact of
expensing stock options. In MIS, we anticipate moderate growth
in global structured finance revenue in 2003 despite a
significant decline in the U.S. housing sector and residential
mortgage refinancings, and lower growth in U.S. consumer
spending affecting asset-backed issuance. In global corporate
finance, we expect to see moderate overall revenue growth in
2003 despite low business investment and mergers and
acquisitions activity in the U.S. In the U.S. public finance
sector, issuers will likely continue to rely on public debt to
fund their budgets as tax receipts remain weak. Nevertheless,
because of an expected decline in refinancing activity, our
outlook for public finance revenue is modestly lower in 2003. We
also expect a continuation of the strong growth in the research
business. Finally, we expect healthy growth in the Moody's KMV
business.

Moody's expenses for 2003 will likely reflect continued
investment spending on enhanced ratings practices, technology
initiatives and product development and continued hiring to
support growth areas of the business. Moody's expects a slight
decline in the operating margin in 2003 compared to the very
high margin level in 2002.

Overall for 2003, Moody's expects that percent revenue growth
will be in the mid-to-high single digits on a pro forma basis,
as if KMV had been acquired at the beginning of 2002. On a
reported basis, we expect that percent revenue growth will be in
the high single digits. With the impact of a lower effective tax
rate and share repurchases, we expect that diluted earnings per
share will grow in the low double digits on a reported basis
before the impact of expensing stock options, which is expected
to be approximately $0.04 per share.

Moody's Corporation (NYSE:MCO) is the parent company of Moody's
Investors Service, a leading provider of credit ratings,
research and analysis covering debt instruments and securities
in the global capital markets, and Moody's KMV, a credit risk
management technology firm serving the world's largest financial
institutions. The corporation reported revenue of $1,023 million
in 2002. Further information is available at
http://www.moodys.com

As previously reported, Moody's Corporation's September 30, 2002
balance sheet shows a working capital deficit of about $42
million, and a total shareholders' equity deficit of about $180
million.


MOSLER: Exclusivity Extended -- For the Last Time -- to May 6
-------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, MDIP, Inc., formerly known as Mosler, Inc., and its
debtor-affiliates obtained an extension of their exclusive
filing period.  The Court gives the Debtors, until May 6, 2003,
the exclusive right to file their plan of reorganization.  Judge
Gregory M. Sleet says the extension is with prejudice to the
Debtors' right to ask for further extensions.

Mosler, Incorporated, a leading integrator of physical and
electronic security systems, filed for chapter 11 protection on
August 6, 2001 in the United States Bankruptcy Court for the
District of Delaware (Case No. 01-10055).  Russell C.
Silberglied, Esq., at Richards Layton & Finger, and Robert
Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, represent
the Debtors in their restructuring efforts.  When the company
filed for protection from its creditors, it listed an estimated
assets of $10 million to $50 million and estimated debts of more
than $100 million.


MOTOROLA INC: Declares Quarterly Dividend Payable on April 15
-------------------------------------------------------------
Motorola, Inc., (NYSE: MOT) declared a regular quarterly
dividend of 0.04 cents per share, payable on April 15, 2003 to
stockholders of record at the close of business on March 14,
2003.

This will be Motorola's 224th consecutive quarterly dividend.

Motorola, Inc., (NYSE: MOT) is a global leader in providing
integrated communications and embedded electronic solutions.
Sales in 2002 were $26.7 billion.  Motorola is a global
corporate citizen dedicated to ethical business practices and
pioneering important technologies that make things smarter and
life better for people, honored traditions that began when the
company was founded 75 years ago this year.  For more
information, please visit: http://www.motorola.com

Motorola Inc.'s 5.220% bonds due 2097 are currently trading at
about 63 cents-on-the-dollar.  While shareholder equity
contracted by $2.3 billion over the past year, Motorola's
balance sheet at Sept. 28, 2002, shows a healthy 2:1 debt-to-
equity ratio and $7 billion in positive working capital.


NATIONAL CENTURY: US Trustee Appoints Creditors' Committee
----------------------------------------------------------
Pursuant to Sections 1102(a)(1) and 1102(b)(1) of the Bankruptcy
Code, Saul Eisen, the United States Trustee for Region 9,
appoints these 10 creditors to serve on an Official Committee of
Unsecured Creditors in National Century Financial Enterprises,
Inc., and its debtor-affiliates' chapter 11 cases:

  1. William F. O'Donnell
     Gerbig, Snell Weisheimer Advertising LLC
     500 Olde Worthington Road
     Westerville, Ohio 43082
     Telephone Number: 614-543-6471
     Fax Number: 614-543-6110
     Claim Amount: $654,984

  2. Allan Martia
     Biomar Technologies
     221 East Walnut Street, #243
     Pasadena, California 91101
     Telephone Number: 626-440-8288
     Fax Number: 626-440-8299
     Claim Amount: $250,000

  3. Linda Schwieterman
     Expert Technical Consultants, Inc.
     5115 Parkcenter Avenue, Suite 275
     Dublin, Ohio 43017
     Telephone Number: 614-766-5103 ext. 12
     Fax Number: 614-798-5228
     Claim Amount: $67,200

  4. Alexander Hoinsky
     Solutions For Management, Inc.
     8 East Germantown Pike, Suite 100
     Plymouth Meeting, Pennsylvania 19462
     Telephone Number: 610-832-5901 ext. 100
     Fax Number: 610-832-5909
     Claim Amount: $35,660

  5. Peter Clinton, John Costa and Geoff Arens
     ING Capital Markets LLC, agent for Mont Blanc Capital Corp.
     1325 Avenue of the Americas
     New York, New York 10019
     Telephone Number: 646-424-6514
     Fax Number: 646-424-6077
     Claim Amount: $456,862,239 -- NPF VI

  6. Mohan V. Phansalkar
     Pacific Investment Management Co.
     840 Newport Center Drive, Suite 300
     Newport Beach, California 92660
     Telephone Number: 949-720-6180
     Fax Number: 949-720-6361
     Claim Amount: $283,300,000 -- NPF XII

  7. Katalin Kutasi
     Alliance Capital Management, LP
     1345 Avenue of the Americas
     New York, New York 10105
     Telephone Number: 212-969-1590
     Fax Number: 212-969-6820
     Claim Amount: $188,500,000 -- NPF XII

  8. Scott Wyler
     III Finance Ltd.
     c/o III Offshore Advisors
     250 South Australian Ave., Ste 600
     West Palm Beach, Florida 33401
     Telephone Number: 561-655-5885
     Fax Number: 561-655-5496
     Claim Amount: $180,000,000 -- NPF XII

  9. Steven P. Rofsky
     Ambac Investments Inc.
     One State Street Plaza
     New York, New York 10004
     Telephone Number: 212-208-3441
     Fax Number: 212-797-5725
     Claim Amount: $120,500,000 -- NPF VI
                    $54,000,000 -- NPF XII

10. Oliver Diendonne
     Ofivalmo Gestion
     75017 Paris, France
     Telephone Number: 00-331-40686056
     Fax Number: 00-331-40559213
     Claim Amount: $10,000 -- NPF VI
(National Century Bankruptcy News, Issue No. 7; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


NATIONAL STEEL: Judge Squires to Look at AK Steel's Bid Today
-------------------------------------------------------------
Over the last couple of weeks, the landscape of National Steel's
bankruptcy proceedings has significantly changed with the more
lucrative bid submitted by AK Steel Corporation on the Debtors'
assets.  AK Steel presented virtually an identical proposal to
that of U.S. Steel except for these favorable terms:

    (i) an increased purchase price of $1,025,000,000;

   (ii) significantly greater cash consideration; and

  (iii) greater certainty to closing the transaction.  AK Steel
        commits to a definitive and logical strategy to address
        modifications to the Debtors' collective bargaining
        agreement with their unions.

The Debtors shifted their focus and commenced discussions with
AK Steel.

After arm's-length negotiations, the Debtors were able to
convince AK Steel to increase its bid -- now pegged at
$1,125,000,000 -- for the assets.  Accordingly, the Debtors
signed an asset purchase agreement with AK Steel.

The salient terms of the Asset Purchase Agreement include:

A. Assets To Be Sold

   The Debtors will sell all assets associated with the
   production, sale, and transportation of coke and steel
   products, including the National Steel Pellet Company,
   National Steel's iron ore pellet operation in Keewatin,
   Minnesota.  National Steel Pellet was not included in the
   Debtors' purchase agreement with U.S. Steel.

B. Purchase Price

   AK Steel will pay $1,125,000,000 for National Steel's assets,
   subject to the customary working capital adjustment.

   The Purchase Price is payable at the Closing and is comprised
   of:

    (i) a deposit escrow, which will be transferred directly to
        the Debtors by an escrow agent;

   (ii) $918,500,000, including an indemnity escrow.  AK Steel
        will pay the sum from immediately available funds, by
        wire transfer to an account or accounts the Debtors
        designate.  The Indemnity Escrow, however, will be
        delivered to the Escrow Agent; and

  (iii) $200,000,000 in assumed liabilities.

C. Deposit Escrow

   AK Steel will deliver $6,500,000 as deposit to the Escrow
   Agent.

D. Indemnity Escrow

   At the Closing, AK Steel will deliver to the Escrow Agent,
   $25,000,000 as Indemnity Escrow, which the Escrow Agent will
   hold for a period of 12 months from the Closing Date.

E. Purchase Price Adjustment

   -- The Cash Consideration will be increased for the lease
      payments the Debtors made which are due and payable on or
      after January 1, 2003:

       (i) the Cash Consideration will be increased by $1 for
           each $1 dollar of lease payments, not exceeding
           $2,000,000 in the aggregate;

      (ii) with respect to lease payments in excess of
           $200,000,000 in the aggregate, the Cash Consideration
           will be increased by $0.75 for each $1 of lease
           payments; and

   -- The Purchase Price may be reduced at the Closing, at AK
      Steel's election, on the basis of the estimated net
      receivables amount and the estimated inventory value set
      forth on the closing financial certificate delivered by
      the Debtors.  If the estimated working capital amount is
      less than $450,000,000, then AK Steel may reduce the Cash
      Consideration to be paid to the Debtors at the Closing by
      the amount of the shortfall.

F. Closing

   Among other things, AK Steel's obligation to close the
   transaction is subject to the satisfaction of these
   conditions:

   -- At the closing, the Debtors will deliver to AK Steel:

       (i) duly executed bills of sale transferring the acquired
           assets to AK Steel;

      (ii) duly executed real property special warranty, or its
           equivalent, deeds in recordable form, in form and
           substance acceptable to AK Steel, to effect the sale,
           transfer, assignment and delivery of the acquired
           real property;

     (iii) a lease assignment and assumption agreement, duly
           executed by the Debtors;

      (iv) all other instruments of conveyance and transfer, in
           form and substance reasonably acceptable to AK Steel,
           as are necessary to convey the acquired assets to AK
           Steel; and

       (v) all other previously undelivered certificates,
           agreements and other documents required to be
           delivered by the Debtors at or before the Closing in
           connection with the transactions contemplated by this
           Purchase Agreement.

   -- At the closing, AK Steel will deliver:

       (i) to the Debtors, the Purchase Price, less the
           Indemnity Escrow;

      (ii) to the Escrow Agent, the Indemnity Escrow;

     (iii) an assignment and assumption agreement, duly executed
           by AK Steel; and

      (iv) all other previously undelivered certificates,
           agreements and other documents required to be
           delivered by AK Steel at or before the Closing in
           connection with the transactions contemplated by this
           Purchase Agreement.

G. Union Negotiations

   AK Steel agrees that it will use all reasonable efforts to
   propose a collective bargaining agreement with United
   Steelworkers of America and keep the Debtors reasonably
   informed of the progress of the negotiations.  If by
   March 17, 2003, the USWA will not have executed and delivered
   collective bargaining agreements relating to its represented
   employees in the form and substance satisfactory to AK Steel,
   then AK Steel and the Debtors may mutually agree to permit AK
   Steel to continue the negotiations with USWA until a date
   that the Debtors and AK Steel mutually agree on.  The date
   will be no later than five business days before the auction
   date and one business day before the bid deadline.

   If it is successful with its negotiations with the USWA, AK
   Steel agrees that it will use all reasonable efforts to
   propose collective bargaining agreements and initiate
   negotiations of the collective bargaining agreements with
   each of:

    * the Security, Police, Fire Professionals of America
      International Union;

    * the International Chemical Workers Union;

    * the Bricklayers & Allied Craftworkers International Union;
      and

    * the Laborers' International Union of North America.

   AK Steel will keep the Debtors reasonably informed of the
   progress of any negotiations.  AK Steel further agrees to
   inform the Debtors, in writing, on or before five business
   days before the auction date and one business day before the
   bid deadline as to whether it has successfully completed
   negotiating and executed the collective bargaining agreement
   with the USWA.

A full-text copy of the parties' asset purchase agreement is
available for free at the Securities and Exchange Commission at:


http://www.sec.gov/Archives/edgar/data/70578/000095013103000340/0000950131-0
3-000340.txt

                  Hearing Today in Chicago

In view of the recent turn of events, Judge Squires continued
the sale hearing to today, February 6, 2002, at 10:30 a.m.
Judge Squires will consider the approval of the bidding
procedures granting AK Steel priority "stalking horse" status.
(National Steel Bankruptcy News, Issue No. 24; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

National Steel Corp.'s 9.875% bonds due 2009 (NSTL09USR1) are
trading at about 75 cents-on-the-dollar, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NSTL09USR1
for real-time bond pricing.


NAVIGATOR GAS: Wants More Time to File Schedules & Statement
------------------------------------------------------------
Navigator Gas Transport PLC, and its debtor-affiliates want the
U.S. Bankruptcy Court for the Southern District of New York the
extend the time period to file their schedules of assets and
liabilities, schedule of executory contracts and unexpired
leases, and statement of financial affairs as required by
section 521 of the Bankruptcy Code and Bankruptcy Rule 1007.

On the Petition Date, the Debtors filed with this Court a
consolidated list of creditors holding the thirty largest
unsecured claims against the Debtors.  The Debtors relate that
due to the size and diversity of their operations, they
anticipate that they will be unable to complete their Schedules
and Statements within 15 days, as required under Bankruptcy Rule
1007(c).

To prepare the required Schedules and Statements, the Debtors
must compile information from books, records and documents
relating to a multitude of transactions across the globe.
Collection of the necessary information requires an expenditure
of substantial time and effort on the part of the Debtors. Given
the significant burdens already imposed on the Debtors'
management by the commencement of this Chapter 11 case, the
Debtors request additional time to complete and file the
required Schedules and Statements. The Debtors have been working
diligently on the assembly of the necessary information.

Although the Debtors anticipate that they will be able to file
their Schedules and Statements in a timely fashion, out of an
abundance of caution, the Debtors request an extension of time
to file their Schedule and Statements through and including
March 12, 2003.

Navigator Gas Transport PLC's business consists of the transport
by sea of liquefied petroleum gases and petrochemical gases
between ports throughout the world. The Company filed for
chapter 11 protection on January 27, 2003 (Bankr. S.D.N.Y. Case
No. 03-10471).  Adam L. Shiff, Esq., at Kasowitz, Benson, Torres
& Friedman LLP, represents the Debtors in their restructuring
efforts.  When the Company filed for protection from its
creditors, it listed $197,243,082 in assets and $384,314,744 in
liabilities.


NEXTCARD CREDIT: S&P Cuts Ratings on Ser. 2000-1 & 2001-1 Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on all
classes of NextCard Credit Card Master Note Trust's asset-backed
notes series 2000-1 and 2001-1. All classes remain on
CreditWatch with negative implications, where they were
placed on June 7, 2002.

The lowered ratings reflect the substantial deterioration in the
performance of the underlying pool of credit card receivables
since June 2002. Additionally, Standard & Poor's expects that
collateral performance will continue to deteriorate further in
the near term. This marked deterioration in collateral pool
performance has increased the probability that the class C and D
noteholders of each transaction will not receive full repayment
of their original principal investment.

The deterioration of key credit metrics has accelerated at an
alarming pace during the past seven months. The trust's
principal payment rate, which is a key indicator of how quickly
investors will be paid out, fell to 4.8% ($41.08 million) in
December 2002 from 9.9% ($139.85 million) in June 2002. Prior to
the transactions entering early amortization in July 2002, the
trust's principal payment rate averaged approximately 10.75%.
The principal balance of the receivable pool has decreased to
$803.6 million from $1.376 billion between June 2002 and
December 2002.

The negative performance characteristics of the trust are also
apparent in the upward trend exhibited by the delinquency and
gross charge-off rates. June 2002 delinquency and gross charge-
off rates of 8.40% and 15.84%, respectively, have risen
dramatically, and peaked in December 2002 at 18.80% and 28.10%,
respectively. While delinquencies, stated as a percentage of
outstanding principal receivables, might be expected to
increase as the balance of principal receivables decreases,
delinquencies, stated solely in terms of dollars, have increased
by 33% to $157.92 million in December 2002 from $118.75 million
in June 2002. Additionally, the number of delinquent accounts
increased by 46% between June 2002 and December 2002 (30,204
accounts versus 44,059 accounts). Furthermore, trust yield,
which historically averaged approximately 19.15%, prior to June
2002, has fluctuated dramatically during the past seven months,
ranging between 8.96% and 20.35%.

After the trust entered into early amortization in July 2002,
noteholders began receiving principal collections to pay down
their bonds. Principal collections were allocated based on a
fixed allocation and were distributed sequentially beginning
with class A, on Aug. 15, 2002. As of the Jan. 15, 2002
distribution date, the class A invested amount of each
series has been reduced by approximately 63% (reductions
totaling $220.14 million and $327.08 million for series 2000-1
and 2001-1, respectively).

Concurrently, the $17,500,000 initial invested amount of series
2000-1's class D has been written down to its current balance of
$67,665, and the $24,500,000 initial invested amount of series
2001-1's class D has been written down to its current balance of
$19,792,733. This equates to reductions of 99.6% and 19.2% in
the class D invested amounts of series 2000-1 and 2001-1,
respectively. These principal write-downs reflect insufficient
monthly allocable finance charge collections available to
absorb investor default amounts allocated monthly to each
series.

Both series 2000-1 and 2001-1 have reserve accounts established
for the benefit of the class C and D noteholders. While the
series 2000-1 and 2001-1 spread accounts have balances of $24.4
million and $14.2 million, respectively, amounts in the spread
account are not available to fund class C and D principal
shortfalls until the final maturity date. On each monthly
payment date however, the spread accounts are available to fund
shortfalls in interest payments to the class C and D notes.
Class D interest, which is at the bottom of the payment
priorities, after investor default amount, has been funded from
draws on each transaction's spread account since the June 2002
distribution date. Draws on the spread account, to cover class D
interest and additional principal write-downs to the subordinate
classes, are expected to continue.

On June 28, 2002, Standard & Poor's lowered its ratings on all
classes of each series issued out of the NextCard Credit Card
Master Note Trust, reflecting Standard & Poor's expectation that
the performance associated with the underlying pool of credit
card receivables would deteriorate further once the base rate
trigger associated with each series was breached. Upon the base
rate breach, principal collections were passed through to
investors, paying down the outstanding notes. Since there was no
announced sale of NextBank N.A.'s interest in the trust at the
time, Standard & Poor's believed there was an increased
likelihood that the underlying credit card accounts would be
closed unless the NextBank receivership obtained additional
capital to fund future purchases by cardholders.

On July 10, 2002, the FDIC closed the underlying credit card
accounts open-to-buy. As of June 2002 (July 15, 2002
distribution date), the negative three-month average excess
spread rates for series 2000-1 and 2001-1 constituted base rate
trigger events for each series. Consequently, each series'
revolving period terminated and the transactions entered into
their early amortization periods. As a result, noteholders began
to receive principal collections on the Aug. 15 distribution
date.

The FDIC, in an effort to collect payments on the outstanding
receivables and help accelerate principal paydown of the bonds,
implemented a balance transfer program. The FDIC, with
assistance from VISA, contacted approximately 10 potential card
issuers to partner with. Ultimately, the FDIC signed agreements
with two financial institutions to offer balance transfer
options to existing NextCard customers. However, the balance
transfer program was not as successful as had been hoped. By
mid-September 2002, only approximately $35 million in principal
collections had been generated as a result of the program.

Lastly, effective Aug. 1, 2002, First National Bank of Omaha, a
division of First National of Nebraska, was appointed by the
Bank of New York, the trustee, as successor servicer for
NextCard. NextCard customers were advised to remit payments to
the FNBO lockbox beginning Sept. 1, 2002. FNBO, one of the top
five in-house merchant processors in the U.S., a top 15 VISA and
MasterCard issuer and processor, and one of the 15 largest
providers of remittance processing services, began servicing the
portfolio at the existing 2% per annum servicing fee. The
conversion process between NextCard and FNBO was completed by
the end of September 2002, at which time the FDIC terminated all
of its responsibilities as subservicer.

As evidenced by recent delinquency and charge-off data, Standard
& Poor's believes that the deteriorating performance trends
exhibited by the trust will continue to erode further in the
near term, reflecting the growing number of lower quality
obligors that remain in the trust. The stronger obligors that
can and have typically remitted higher monthly payments as a
percentage of their outstanding balances are continuing to pay
off their outstanding balances. The lower quality obligors that
remain in the trust are primarily responsible for the declining
payment rate and increasing delinquency and charge-off rates.

Standard & Poor's will continue to monitor the performance of
the key risk indicators associated with the aforementioned
transactions, and will continue to advise the market as
developments become available.

     RATINGS LOWERED AND REMAIN ON CREDITWATCH NEGATIVE

          NextCard Credit Card Master Note Trust
             Asset-backed notes series 2000-1

                         Rating
          Class    To                From
          A        BBB+/Watch Neg    AA/Watch Neg
          B        B/Watch Neg       BBB/Watch Neg
          C        CCC/Watch Neg     BB/Watch Neg
          D        CCC-/Watch Neg    B/Watch Neg

          NextCard Credit Card Master Note Trust
          Asset-backed notes series 2001-1

                         Rating
          Class    To                From
          A        BBB+/Watch Neg    AA/Watch Neg
          B        B/Watch Neg       BBB/Watch Neg
          C        CCC/Watch Neg     BB/Watch Neg
          D        CCC-/Watch Neg    B/Watch Neg


NQL INC: Court Okays Plan Exclusivity Extension through March 17
----------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of New
Jersey, NQL Inc., obtained an extension of its exclusive
periods.  The Court gave the Debtor, until March 17, 2003, the
exclusive right to file their plan of reorganization, and until
May 16, 2003, to solicit acceptances of that Plan from its
creditors.

NQL INC., through its DCi division, provides professional
services including Internet and intranet consulting, network
design, installation and maintenance as well as onsite support
for customers located primarily in the northeastern U.S. The
Company filed for chapter 11 protection on February 15, 2002
(Bankr. N.J. Case No. 02-31661).  Ira M. Levee, Esq., at
Lowenstein Sandler PC, represents the Debtor in its
restructuring efforts.


ON COMMAND CORP: Commences Trading on OTCBB Effective Today
-----------------------------------------------------------
On Command Corporation (Nasdaq: ONCO) has received notification
that its securities will be delisted from the Nasdaq National
Market effective with the open of business today. The Company's
securities will be immediately eligible for quotation on the OTC
Bulletin Board under the symbol ONCO.

"Given the financial stability the company achieved during 2002,
we are disappointed that we will no longer be trading on the
Nasdaq National Market. We look forward to continuing to be a
leading provider in the hotel in-room entertainment industry
conducting business as usual," said Chris Sophinos, president
and chief executive officer of On Command.

On Command Corporation -- http://www.oncommand.com-- is the
world's leading provider of in-room entertainment technology to
the lodging and cruise ship industries. On Command is a
majority-owned subsidiary of Liberty Satellite & Technology,
Inc. (OTC Bulletin Board: LSTTA, LSTTB).

On Command entertainment services include: on-demand movies;
television Internet services using high-speed broadband
connectivity; television email; short form television features
covering drama, comedy, news and sports; PlayStation video
games; and music-on-demand services through Instant Media
Network, a majority-owned subsidiary of On Command Corporation
and the leading provider of digital on-demand music services to
the hotel industry. All On Command products are connected to
guest rooms and managed by leading edge video-on-demand
navigational controls and a state-of-the art guest user
interface system. The guest menu system can be customized by
hotel property to create a robust platform that services the
needs of On Command hotel partners and the traveling public. On
Command and its distribution network services more than
1,000,000 guest rooms, which touch more than 300 million guests
annually.

On Command's direct served hotel properties are located in the
United States, Canada, Mexico, Spain, and Argentina. On Command
distributors serve cruise ships operating under the Royal
Caribbean, Costa and Carnival flags. On Command hotel properties
include more than 100 of the most prestigious hotel chains and
operators in the lodging industry: Accor, Adam's Mark Hotels &
Resorts, Fairmont, Four Seasons, Hilton Hotels Corporation,
Hyatt, Loews, Marriott (Courtyard, Renaissance, Fairfield Inn
and Residence Inn), Radisson, Ramada, Six Continents Hotels
(Inter-Continental, Crowne Plaza and Holiday Inn), Starwood
Hotels & Resorts (Westin, Sheraton, W Hotels and Four Points),
and Wyndham Hotels & Resorts.

On Command's September 30, 2002 balance sheet shows a working
capital deficit of about $10 million, and a total shareholders'
equity deficit of about $547,000.


PACIFIC AEROSPACE: Intends to Execute 1-For-200 Reverse Split
-------------------------------------------------------------
Pacific Aerospace & Electronics, Inc. (OTC Bulletin Board:
PCTH), a diversified manufacturing company specializing in metal
and ceramic components and assemblies, completed the
restructuring of the Company that began in March 2002. On
January 27, 2003, following shareholder approval at the Special
Meeting of shareholders, the Company amended its Articles of
Incorporation to increase the number of authorized shares of
common stock. The increase in authorized shares of common stock
resulted in the automatic conversion of the outstanding shares
of Series C Preferred Stock into 4,865,820,023 shares of common
stock, amounting to approximately 96.4% of the outstanding
shares of common stock of the Company on a fully-diluted basis.

The Company intends to effect a 1-for-200 reverse stock split of
its outstanding shares of common stock, as well as a
proportionate reduction in its shares of authorized but unissued
common stock, on or around February 17, 2003. Following the
reverse split, the number of outstanding shares of common stock
will be reduced to approximately 24.7 million shares. Existing
certificates representing the outstanding pre-reverse split
shares of common stock will not be required to be exchanged for
new certificates representing post-reverse split shares, but
will be deemed to automatically constitute and represent the
correct number of post-reverse split shares without further
action by the shareholders. Any fractional shares resulting from
the reverse split will be redeemed by the Company in cash based
on the fair market value of the common stock.

"We are very pleased to complete this restructuring," said Don
Wright, the Chief Executive Officer of the Company. "We can now
focus our energy on providing innovative and quality solutions
for our customers."

Pacific Aerospace & Electronics, Inc., is an international
engineering and manufacturing company specializing in
technically demanding component designs and assemblies for
global leaders in the aerospace, defense, electronics, medical,
telecommunications, energy and transportation industries. The
Company utilizes specialized manufacturing techniques, advanced
materials science, process engineering and proprietary
technologies and processes to its competitive advantage. The
Company has approximately 700 employees worldwide and is
organized into two operational segments -- U.S. Operations and
European Operations. More information may be obtained by
contacting the Company directly or by visiting its Web site at
http://www.pcth.com

Notwithstanding the results of fiscal 2002, if Pacific Aerospace
& Electronics is not successful in increasing cash provided by
operating activities, it may need to sell additional common
stock or other securities, or it may need to sell assets outside
of the ordinary course of business in order to meet its
obligations. There is no assurance that it will be able to sell
additional equity securities or that it will be able to sell
assets outside the ordinary course of business. In that
situation, the Company's inability to obtain sufficient cash if
and when needed could have a material adverse effect on its
financial position, the results of its operations, and its
ability to continue as a going concern.


PACIFIC GAS: Agrees to Modify Proposed Plan on Class 7 Claims
-------------------------------------------------------------
Certain Class 7 Claimants have filed objections to Pacific Gas
and Electric Company's proposed Reorganization Plan.  To settle
the dispute, PG&E and its parent, PG&E Corporation, entered into
a stipulation with seven Class 7 Claimants to modify the Plan.

The Class 7 Claimants are:

    (A) ABAG Power Company;
    (B) Constellation New Energy, Inc.;
    (C) Boston Properties, Inc.;
    (D) Boston Properties Limited Partnership;
    (E) Idaho Power Company;
    (F) New West Energy Corporation; and
    (G) Pinnacle West Capital Corporation.

The parties stipulate and agree that:

1. PG&E will amend the Plan:

   (a) with respect to the treatment of "ESP" claims to provide
       that the "Interest Commencement Date" will be the date
       when payment first became due;

   (b) to provide that the Disputed ESP Claims will earn
       interest through the date of payment in accordance with
       the Plan to the extent they become Allowed Claims; and

   (c) to provide that when a Disputed ESP Claim becomes an
       Allowed Claim, it will be satisfied by the payment of
       Cash and Long-Term Notes so that the total consideration
       paid at that time with respect to the claim will equal
       the Allowed Claim plus applicable postpetition interest
       on it through the payment date plus any applicable
       placement fees.  The Long-Term Note portion of the
       consideration -- not to exceed 40% of the Allowed Claim,
       but may be a lesser percentage at PG&E's sole discretion
       -- will be valued based on an average of the market
       quotes obtained three business days before the
       measurement date.  The measurement date will occur when
       the claim becomes an Allowed Claim, or as soon as
       practicable thereafter.  The payment will occur within
       five business days of the measurement date.  PG&E will
       obtain bid and ask quotations at 1:00 p.m. Eastern Time
       from three market makers, who will be members of the
       original underwriting syndicate with respect to the Long-
       Term Notes;

2. The Class 7 Claimants will withdraw their objections to the
   Plan and, to the extent that they have voted to reject the
   Plan, will promptly seek to have their votes changed to
   accept the Plan pursuant to Rule 3018(a) of the Federal Rules
   of Bankruptcy Procedures. (Pacific Gas Bankruptcy News, Issue
   No. 52; Bankruptcy Creditors' Service, Inc., 609/392-0900)


PALADYNE CORP: Shareholders Okay Proposed 1-For-10 Reverse Split
----------------------------------------------------------------
A special meeting of the stockholders of Paladyne Corp.,
(OTCBB:PLDY) was held Tuesday to consider a number of proposed
corporate actions.

At the special meeting, Paladyne stockholders approved the
following actions:

        1. A one-for-ten reverse stock split of the outstanding
           common stock of the Company.

        2. Approval of the Stock Purchase Agreement among the
           Company and WAG Holdings, LLC, Glen H. Hammer and A.
           Randall Barkowitz, providing for, among other things,
           the sale to the Buyers of 8,880,740 shares of Common
           Stock on a post-reverse split basis (equal to 70% of
           the post-reverse split, fully diluted shares
           outstanding of the Company).

        3. An amendment to the Company's Certificate of
           Incorporation to change the name of the Company to
           "Market Central, Inc."

The sale of shares to the Buyers is expected to become effective
tomorrow, Wednesday, February 5, 2003, following a closing
taking place in Atlanta, Georgia. Following that closing, the
Company will issue a press release describing the corporate
developments in greater detail.

The corporate name change and the reverse stock split are
expected to be effective at 12:01 a.m. Eastern time on
February 5, 2003 and the shares are expected to begin trading on
a post-split basis when the market opens tomorrow (February 5)
under the trading symbol "MKTE." Upon effectiveness of the
reverse stock split, each share of common stock outstanding
immediately prior to effectiveness will be reclassified as and
changed into one-tenth (1/10) of a share of the Company's common
stock. As a result, the total number of shares of common stock
outstanding will decrease by a factor of ten. In the next few
days, the Company will send Transmittal Materials to all
shareholders for use in exchanging their current pre-split
Paladyne stock certificates for new post-split Market Central
certificates. No fractional shares will be issued as a result of
the reverse split; rather, any fractional share interest will be
adjusted to the nearest whole share.

The Company urges shareholders not to send in their stock
certificates at this time, but to wait for the Transmittal
Materials to do so.

Through its principal subsidiary, e-commerce support centers,
inc., the Company is an outsource provider of telemarketing and
customer support with a suite of CRM (Customer Relationship
Management) services that maximize the effectiveness of customer
support and contact through the intelligent use of customer
data. Its clients include SurePay (a First Data Company),
Aramark, Crescent-Friedman Jewelers, cable companies Cox and
Times-Warner, Earthlink and a number of other ISPs.

As reported in Troubled Company Reporter's January 29, 2003
edition, the Company's independent accountant's report contained
a going concern qualification for the year ended August 31,
2002.

The Company's unaudited financial statements show net losses of
$138,792 and $563,159 for the three months ended November 30,
2002 and 2001, respectively.

The Company is not generating any cash from operations and it
has no cash resources. It is in default on the $350,000 loan
agreement with a bank and has been unable to meet its
obligations under the $5,000,000 notes to Gibralter Publishing,
Inc. The payments on various capital leases are also in arrears.
This situation and the anticipated need for working capital for
the Company to increase its marketing and revenue base has
resulted in the Board of Directors taking certain actions
intended to stabilize the Company and provide it with a chance
to succeed in the future. On December 10, 2002, the Company and
Gibralter Publishing, Inc. agreed to exchange $5,000,000 in
notes for 1,000,000 shares of Series D Preferred shares and
10,000,000 warrants for purchase of common shares of the
Company.

The Company's independent certified public accountants have
stated in their report included in the Company's August 31, 2002
Form 10-KSB, that the Company has incurred operating losses in
the last two years, and that the Company is dependent upon
management's ability to develop profitable operations. These
factors among others may raise substantial doubt about the
Company's ability to continue as a going concern.


PEACE ARCH: Closes Acquisition, Financing & Debt Workout Deals
--------------------------------------------------------------
Peace Arch Entertainment Group Inc., (AMEX: "PAE"; TSX: "PAE.A",
"PAE.B"), a leading independent television production company in
Canada, announced that on January 31, 2003, it closed its
previously announced acquisition, financing and debt
restructuring transactions.

Pursuant to the transactions, the Company issued an aggregate of
13,333,333 Class B Subordinate Voting Shares at a price of $0.30
per share and reserved for issuance 2,863,000 Class B
Subordinate Voting Shares. The reserved shares relate to
Conversion Rights Certificates that grant the holders the right
to convert indebtedness at prices no less than $3.00 per share
and no greater than $5.00 per share in approximately two to
three years from the closing date.

Peace Arch Entertainment Group Inc., which has a total
shareholders' equity deficit of about C$5 million as at November
2002, creates, develops, finances, produces and distributes
proprietary film and television programming for worldwide
markets and is headquartered in Vancouver, British Columbia.


PHAR-MOR INC: Files Disclosure Statement for Liquidating Plan
-------------------------------------------------------------
Together with the Official Committee of Unsecured Creditors,
Phar-Mor, Inc., and its debtor-affiliates file their Disclosure
Statement for the First Amended Joint Plan of Liquidation with
the U.S. Bankruptcy Court for the Northern District of Ohio.
The Disclosure Statement is available for a fee at:

  http://www.researcharchives.com/bin/download?id=030130224851

The Plan, as a product of extensive discussions among the
Debtors and the Committee, provides for the liquidation and
conversion of all of the Debtors' respective assets to Cash and
the distribution of the net proceeds to their respective
creditors in accordance with the priorities established by the
Bankruptcy Code.

The Plan of liquidation provides that the Debtors' Chapter 11
Cases will be substantively consolidated.  PharMor, Inc., and
its subsidiaries function under a common umbrella for tax,
reporting and other business purposes. The Plan Proponents
believe that consolidated treatment of Claims will maximize the
holders' recoveries especially since all of the Debtors'
business affairs were inextricably intertwined and co-mingled.

The Plan provides for 7 Treatment of Claims and Equity
Interests, which are:

(A) Unclassified Allowed Administrative Expense Claims and
     Priority Tax Claims

     All Allowed Administrative Expense Claims and Priority Tax
     Claims (which are not classified under the Plan) are to be
     paid in full including Allowed Reclamation Claims pursuant
     to the Bankruptcy Court's Reclamation Order of January 9,
     2002. These creditors are not impaired.

(B) Class 1: Other Priority Claims

     Holders of Class 1 shall be paid in full. Class 1 creditors
     are not impaired. Resolution of reclamation disputes based
     upon objections interposed to the Debtors' Reclamation
     Claims Report will be addressed pursuant to the Disputed
     Claims procedures described in the Plan.

(C) Class 2: Allowed Secured Claims

     Holders of Class 2, shall receive either

      (i) the return of the collateral securing such Claim or

     (ii) cash equal to the proceeds received from the sale of
          such collateral less actual costs and expenses of
          sale.

     Class 2 creditors are impaired.

(D) Class 3: Convenience Claims

     Class 3 creditors, including those who elect to reduce
     their Allowed Claims, are not impaired. Class 3 Convenience
     Claims with a face dollar amount less than $500.01 shall be
     deemed to have accepted treatment as a Class 3 Convenience
     Creditor. Any creditor whose Allowed Claim is in excess of
     $500.00 may reduce such Allowed Claim and receive $500.00
     as participants in the Convenience Class.

(E) Class 4: Phar-Mor I Priority Tax and LLC Claims

     Holders of Class 4 Claims consists of creditors from the
     chapter 11 case filed by Phar-Mor in 1992. Such creditors
     shall be treated in the same manner and afforded the same
     priority of distribution as provided for in the Phar-Mor I
     Cases. Class 4 creditors are not impaired.

(F) Class 5: Allowed General Unsecured Claims

     Class 5 Claims shall receive a pro rata distribution from
     Available Cash, after satisfaction in full of all Allowed
     Administrative Expense Claims, Allowed Priority Tax Claims
     and Allowed Claims in Classes 1 through 4, such funds
     resulting from the complete liquidation and collection of
     all of the Debtors' assets. Currently, the Debtors estimate
     that pro rata distributions will be made to holders of
     Class 5 Claims ranging from 15% to 18% of the aggregate
     amount of Allowed Class 5 Claims. Class 5 creditors are
     impaired.

(G) Class 6: Equity Interests

     Equity Interests are estimated to be valueless and
     accordingly are expected to receive no distribution under
     the terms of the Plan.  For purposes of the Plan, each
     holder of an Allowed Equity Interest in Class 6 is presumed
     to have rejected the Plan and is therefore not entitled to
     vote to accept or reject the Plan. Class 6 Equity Interests
     are impaired.

Phar-Mor, Inc., a retail drug store chain, filed for Chapter 11
protection on September 24, 2001, (Bankr. N.D. Ohio Case No.
01-44007).  In July 2002, The Ozer Group and Hilco Merchant
Resources launched GOB sales at the Company's 73 store
locations.  Michael Gallo, Esq., at Nadler, Nadler and
Burdman, represents the Debtors.


PLAINS EXPLORATION: S&P Affirms & Removes BB- Rating from Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' corporate
credit rating on midsize independent oil and gas company Plains
Exploration & Production Co. L.P. Inc., and removed the ratings
from CreditWatch with negative implications, where they had been
placed on June 26, 2002. The outlook is now stable. At the same
time, Standard & Poor's withdrew its ratings on Plains Resources
Inc.

Houston, Texas-based Plains E&P will have about $520 million in
outstanding debt, pro forma its recently announced $432 million
acquisition of 3TEC Energy Corp.

"The rating actions follow the completion of Plains Resources'
spin-off of about 90% of its oil and gas exploration and
production business to Plains E&P and the recently announced
acquisition (including outstanding debt) of 3TEC," said Standard
& Poor's credit analyst John Thieroff. "The ratings withdrawal
on Plains Resources reflects the lack of the company's public
debt," he continued.

The ratings on Plains E&P were initiated in June 2002 and were
immediately placed on CreditWatch with negative implications, to
reflect Standard & Poor's concern regarding the company's
ability to issue at least $60 million in equity to strengthen
its debt-laden balance sheet before the spin-off completion.
While the issuance never occurred, the company received a
capital contribution of $40 million from Plains Resources before
the spin-off, repayment of a loan by Plains Resources of $7
million, and significantly higher retention of earnings due to
much stronger-than-expected crude oil prices, to the extent that
the combination of these items obviates the need for equity
issuance at the current rating level.

The stable outlook reflects the significant cash flow protection
Plains E&P enjoys through its attractively priced commodity
hedges. Upward ratings and outlook revisions will likely depend
on successful integration of 3TEC assets and demonstrated, cost-
competitive exploration success with these properties.


PRIMUS TELECOMM: Sets Special Shareholders' Meeting for March 31
----------------------------------------------------------------
The Special Meeting of Stockholders of Primus Telecommunications
Group, Incorporated, a Delaware corporation, is to be held at
10:00 a.m., local time, on March 31, 2003 at Primus
Telecommunications Group, Incorporated, Board Room, 1700 Old
Meadow Road, McLean, Virginia, 20101 for the following purposes:

     1. To approve the issuance of 121,097 shares of Series C
Convertible Preferred Stock at a price of $75.0067 per share for
gross proceeds of $9.08 million to the Company before expenses;
and

     2. To transact such other business as may properly come
before the Special Meeting of Stockholders or any adjournment or
postponement thereof.

The Board of Directors has fixed February 10, 2003, as the
record date for determining the stockholders entitled to receive
notice of and vote at the Special Meeting of Stockholders and
any adjournment or postponement thereof. Such stockholders may
vote in person or by proxy.

PRIMUS Telecommunications Group, Incorporated (NASDAQ: PRTL),
with a total shareholders' equity deficit of about $183 million
(as of September 30, 2002), is a global facilities-based Total
Service Provider offering bundled voice, data, Internet, digital
subscriber line (DSL), Web hosting, enhanced application,
virtual private network (VPN), and other value-added services.
PRIMUS owns and operates an extensive global backbone network of
owned and leased transmission facilities, including over 300 IP
points-of-presence (POPs) throughout the world, ownership
interests in over 23 undersea fiber optic cable systems, 19
international gateway and domestic switches, a satellite earth
station and a variety of operating relationships that allow it
to deliver traffic worldwide. PRIMUS has been expanding its e-
commerce and Internet capabilities with the deployment of a
global state-of-the-art broadband fiber optic ATM+IP network.
Founded in 1994 and based in McLean, VA, PRIMUS serves
corporate, small- and medium-sized businesses, residential and
data, ISP and telecommunication carrier customers primarily
located in the North America, Europe and Asia Pacific regions of
the world. News and information are available at PRIMUS's Web
site at http://www.primustel.com

DebtTraders reports that Primus Telecommunications Group's
12.750% bonds due 2009 (PRTL09USR2) are trading at about 75
cents-on-the-dollar. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=PRTL09USR2


REGUS BUSINESS: Seeks Okay to Hire Ordinary Course Professionals
----------------------------------------------------------------
Regus Business Centre Corp., and its debtor-affiliates ask for
permission from the U.S. Bankruptcy Court for the Southern
District of New York to employ and compensate the professionals
utilized in the ordinary course of their businesses, without
requiring the submission of separate retention pleadings or fee
applications for each Ordinary Course Professional.

The Debtors regularly call upon certain professionals, including
attorneys and accountants, to assist them in carrying out their
assigned responsibilities. Such responsibilities may include
representation with respect to real estate matters, tax issues,
or environmental issues that arise in the ordinary course of
Debtors' businesses.

The Debtors disclose that they cannot continue to operate their
businesses with sound business practice unless they retain and
pay for the services of the Ordinary Course Professionals. The
operation of the Debtors' businesses would be hindered if the
Debtors were required to submit to the Court an application,
affidavit, and proposed retention order for each Professional
for approval of its employment and compensation. Further, a
number of the Ordinary Course Professionals are unfamiliar with
the fee application procedures employed in bankruptcy cases.
Some of the Ordinary Course Professionals might be unwilling to
work with the Debtors subject to these requirements. The
Debtors' continuing operations and ultimate ability to
reorganize require the uninterrupted services of the Ordinary
Course Professionals.

The Debtors anticipate no Ordinary Course Professional will be
paid more than $10,000 per month or more than $100,000 in fees
during the duration of these cases for services rendered to
Debtors without an order of this Court authorizing such higher
amount.

The Debtors do not believe that any professional has an interest
materially adverse to the Debtors, their creditors, or other
parties-in-interest, and thus none would be retained who do not
meet, if applicable, the special counsel retention requirement
of section 327(e) of the Bankruptcy Code.  The Debtors clarify
that they are not requesting authority to pay prepetition
amounts owed to Ordinary Course Professionals.

Regus Business Centre Corp., filed for chapter 11 protection on
January 14, 2003 (Bankr. S.D.N.Y. Case No. 03-20026). Karen
Dine, Esq., at Pillsbury Winthrop LLP represents the Debtors in
their restructuring efforts. When the Debtors filed for
protection from its creditors, it listed debts and assets of:

                               Total Assets:    Total Debts:
                               -------------    ------------
Regus Business Centre Corp.    $161,619,000     $277,559,000
Regus Business Centre BV       $157,292,000     $160,193,000
Regus PLC                      $568,383,000      $27,961,000
Stratis Business Centers Inc.      $245,000       $2,327,000


RITE AID: Reports 5.7% Same Store Sales Increase for January
------------------------------------------------------------
Rite Aid Corporation (NYSE, PSX: RAD) announced sales results
for January.

                        Monthly Sales

For the four weeks ended January 25, 2003, same store sales rose
5.7 percent over the prior-year period. Pharmacy same store
sales were up 7.1 percent, while front-end same store sales were
up 3.1 percent.

Total drugstore sales for the four-week period rose 3.6 percent
to $1.196 billion compared to $1.155 billion for the same period
last year. Prescription revenue accounted for 65.2 percent of
drugstore sales, and third party prescription revenue
represented 92.4 percent of pharmacy sales.

                      Year-to-Date Sales

Same store sales for the 47-week period ended January 25, 2003
increased 7.1 percent, consisting of a 10.3 percent pharmacy
same store sales increase and a 2.0 percent increase in front-
end same store sales.

Total drugstore sales for the 47 weeks ended January 25, 2003
gained 4.5 percent to $14.212 billion from $13.596 billion in
last year's like period. Prescription revenue accounted for 63.1
percent of total drugstore sales, and third party prescription
revenue was 92.7 percent of pharmacy sales.

              Rite Aid Reaffirms EBITDA Guidance;
        Revises Fourth Quarter Same Store Sales Guidance

Rite Aid also reaffirmed its EBITDA guidance for the fourth
quarter and fiscal year 2003, which ends March 1, 2003. Based on
current trends, the company expects fourth quarter EBITDA to be
$160.0 million to $170.0 million, which compares to $143.5
million in the prior year fourth quarter. EBITDA for fiscal 2003
is expected to be $605.0 million to $615.0 million.

Based on current trends, the company said it expects same store
sales for the fourth quarter to increase 4.75 percent to 5.75
percent over last year's fourth quarter. Previous guidance was
an increase of 6.0 percent to 7.0 percent, which the company
gave on December 19, 2002.

Rite Aid Corporation, with a total shareholders' equity deficit
of about $105 million (as of November 30, 2002), is one of the
nation's leading drugstore chains with annual revenues of more
than $15 billion.  On December 28, 2002 Rite Aid operated 3,407
stores compared to 3,581 stores a year earlier.


RITE AID: S&P Rates Planned $200MM Senior Secured Notes at B-
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' rating to
Rite Aid Corp.'s proposed $200 million senior secured notes
offering, which matures in 2011. The notes are being issued
under rule 144A with registration rights.

At the same time, Standard & Poor's affirmed its 'B' corporate
credit ratings on Rite Aid and Rite Aid Lease Management Co. The
outlook is positive. Camp Hill, Pennsylvania-based Rite Aid had
$3.7 billion of debt outstanding as of Nov. 30, 2002.

The senior secured notes are rated one notch below the corporate
credit rating because the issue is secured by a second priority
lien on inventory, accounts receivable, and other assets of Rite
Aid's operating subsidiaries. Standard & Poor's does not see
enough intrinsic value in this collateral to indicate that this
debt would receive materially better protection than unsecured
senior debt.

Rite Aid plans to use the net proceeds from the offering for
general corporate purposes, which may include capital
expenditures and repayments or repurchases of outstanding
indebtedness.

"We believe the strategies being implemented by management will
continue to improve operations. The ratings on the company could
be raised if profitability levels continue to rise and result in
improved credit protection measures," said Standard & Poor's
credit analyst Diane Shand.

Although Rite Aid is a dominant player in the drug store chain
industry, ranking second in terms of units, credit protection
and profitability measures are weak due to previous management's
poor execution of a rapid growth strategy. The company's
operating performance has been improving since fiscal 2000 due
to strategies put in place by new management.

The ratings on Rite Aid reflect the challenges the company faces
in improving operations at its drug stores amidst intense
competition. The ratings also reflect the company's significant
debt burden and thin cash flow protection.

Rite Aid Corporation's 7.00% bonds due 2027 (RAD27USR1) are
trading at about 62 cents-on-the-dollar, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=RAD27USR1for
real-time bond pricing.


ROYAL PRECISION: Completes Proposed Merger with Royal Associates
----------------------------------------------------------------
Royal Precision, Inc. (OTC Bulletin Board: RIFL), the
manufacturer of Precision and Rifle branded steel and graphite
shafts, several of the most widely-used golf club shafts on the
professional golf tours, and distributor of Royal Grip(R) golf
club grips, and Royal Associates, Inc., a privately-held holding
company, jointly announced that the stockholders of Royal
Precision holding more than a majority of the issued and
outstanding shares, by action in writing, had approved the
Agreement and Plan of Merger, and pursuant to the Merger
Agreement, RA Merger Sub, Inc., a wholly-owned subsidiary of RA,
was merged with and into Royal Precision.  Royal Precision has
filed a certification and request with the Securities and
Exchange Commission for termination of its public reporting
obligations and of its registration under the Securities
Exchange Act.

As previously disclosed, as a result of the Merger, Royal
Precision has become a wholly-owned subsidiary of RA.  An
investor group that includes Christopher A. Johnston, the
Chairman of Royal Precision, John C. Lauchnor, the President,
Chief Executive Officer and a director of Royal Precision, the
remaining directors of Royal Precision, and certain other third
parties are the owners of RA.  All Royal Precision stockholders,
other than the members of the investor group and those who
properly pursue dissenters rights of appraisal of their Royal
Precision shares, are entitled to receive $.10 for each Royal
Precision share held.

RA is a closely held holding company formed by Christopher A.
Johnston, Chairman of the Board of Royal Precision, John C.
Lauchnor, President and Chief Executive Officer of Royal
Precision, and Kenneth J. Warren, Richard P. Johnston, David E.
Johnston and Charles S. Mechem, all of whom serve as directors
of Royal Precision, and Robert Jaycox.  Having completed its
acquisition of Royal Precision, RA intends to pursue
acquisitions, both within and outside of the golf industry.

Royal Precision, Inc., is a leading designer, manufacturer and
distributor of high-quality, innovative golf club shafts,
including the Rifle shaft featuring Royal Precision's "Frequency
Coefficient Matching" technology, or "FCM," designed to provide
consistent flex characteristics to all the clubs in a golfer's
bag. Royal Precision, Inc. is also a designer and distributor of
Royal Grip(R) golf club grips offering a wide variety of
standard and custom models, all of which feature durability and
a distinctive feel and appearance.

                         *    *    *

At November 30, 2002, Royal Precision, Inc., had negative
working capital of $2,011,000 and a current ratio of 0.8 to 1 as
compared to positive working capital of $2,911,000 and a current
ratio of 1.5 to 1 at May 31, 2002.  This decline in working
capital is primarily a result of the line of credit becoming
current. The lines of credit are subject to renewal in July
2003.  The Company has the right to extend the maturity date
through August 2004 provided certain requirements are met,
including an extended letter of credit from certain
stockholders.

As of August 16, 2002, the Company refinanced its bank debt. The
effects of the refinancing have been retroactively  applied to
May 31, 2002. The interest rates on the refinanced debt are 1%
to 4% lower than the prior rates.  Prior to the August 2002
refinancing, the Company was not in compliance with certain
financial covenants, but was successful in obtaining the
necessary waivers and amendments in August 2001, February 2002
and May 2002, to remedy such defaults. Although the Company
believes it will be in compliance with the covenants under
the refinancing, there can be no assurance that the Company
would be able to obtain any necessary waivers or amendments
upon the occurrence of any future incidence of noncompliance
with loan covenants.  As such, any instance of noncompliance
could have a material adverse effect on the Company's financial
condition.


RURAL CELLULAR: Will Publish Fourth Quarter Results on Feb. 24
--------------------------------------------------------------
Rural Cellular Corporation (OTCBB:RCCC) has scheduled its fourth
quarter operating results to be released on February 24, 2003,
post market.

On February 25, 2003 at 8:00 AM CT, a teleconference will be
held to discuss RCC's fourth quarter performance and other
financial matters. To participate in the call, please dial (888)
566-5907, give the operator your name, and identify Richard
Ekstrand as the call leader and RCCC as the pass code. To access
a replay of this call through March 6, 2003, dial (800) 925-
3968. An audio replay of the teleconference can also be accessed
by logging onto the Company's website at
http://www.RCCwireless.com To access the audio stream, click on
the Investor Relations section.

Rural Cellular Corporation (OTCBB:RCCC), based in Alexandria,
Minnesota, provides wireless communication services to Midwest,
Northeast, South and Northwest markets located in 14 states. At
September 30, 2002, the Company's balance sheet shows a total
shareholders' equity deficit of about $34 million.


SOTHEBY'S HOLDINGS: Will Promote All Live Auctions through eBay
---------------------------------------------------------------
Sotheby's and eBay announced that separate online auctions on
Sothebys.com will be discontinued in early May.  The companies
will place their emphasis on promoting Sotheby's live auctions
through eBay's Live Auctions(TM) technology and continuing to
build eBay's highly successful arts and antiques categories. The
Sothebys.com Web site will continue, but focus on supporting
Sotheby's live auction business.

"As our online auctions offered by our Dealer Associates and
Sotheby's have not generated a profit for Sotheby's, we are
discontinuing separate online auctions," said Bill Ruprecht,
President and Chief Executive Officer of Sotheby's Holdings,
Inc. "This action will regrettably lead to redundancies and a
one-time restructuring charge in the first quarter of 2003 in
the range of $2-3 million, but we anticipate that taking this
step will enhance our profitability in 2003."

"The power of the online medium remains extraordinary and we are
delighted that our relationship with eBay, the world's largest
online marketplace, with over 40 million users, will continue,"
said Mr. Ruprecht. "eBay's Live Auctions technology is of
growing interest to Sotheby's existing clients because it allows
them to follow Sotheby's traditional auctions via the Internet
and place bids online, in real time. We anticipate increased
interest as clients become more familiar with its availability
and ease of use."

"The art, antiques and collectibles categories on eBay generated
more than $1 billion in sales last year," said Geoff Iddison,
Vice President and General Manager of eBay Collectibles. "We are
delighted that many of Sotheby's dealer associates have
contributed to this growing marketplace and we look forward to
starting this new chapter in our relationship with Sotheby's."

Sotheby's Holdings, Inc., whose September 30, 2002 balance sheet
shows a working capital deficit of about $29 million, is the
parent company of Sotheby's worldwide live and Internet auction
businesses, art-related financing and real estate brokerage
activities. The Company operates in 34 countries, with principal
salesrooms located in New York and London. The Company also
regularly conducts auctions in 13 other salesrooms around the
world, including Australia, Hong Kong, France, Italy, the
Netherlands, Switzerland and Singapore. Sotheby's Holdings, Inc.
is listed on the New York Stock Exchange and the London Stock
Exchange.

Sotheby's Holdings' 6.875% notes due 2009 are currently trading
at about 74 cents-on-the-dollar.  Moody's rates those bonds at
B3 and Standard & Poor's has assigned its B+ rating.

Sotheby's Bank Loan Facility matures 5 days from today on
February 11, 2003.  Indications are that $175 million raised in
a sale-leaseback transaction involving Sotheby's headquarters
building located at 1334 York Avenue in Manhattan to RFR
Holding, LLC in December 2002, will pay this loan off in full.
Sotheby's also has to pay a $20.1 million fine imposed on the
European Commission that's due on February 8, 2003.


SOUTHWESTERN ILLINOIS: S&P Drops Revenue Bonds Rating to D
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on
Southwestern Illinois Development Authority's industrial revenue
bonds, series 1995, issued for Spectrulite Consortium Inc., to
'D' from 'A' due to a payment default on the bonds on Feb. 3,
2003.

Illinois' moral obligation pledge to replenish the debt service
reserve fund in the event a payment is made from the fund
secures the bonds. The payment default, however, occurred
because the bond trustee declined to access the debt service
reserve to make the Feb. 3rd payment without a court order,
following the borrower's filing for bankruptcy on Jan. 29,
2003.

"Although the series 1995 bonds are backed by the state's moral
obligation pledge, the default has nothing to do with the
state's willingness to make good on its obligation but rather
the unusual circumstances surrounding the default, which did not
allow the bond trustee sufficient time to trigger the moral
obligation mechanism to prevent the default," said credit
analyst John Kenward.

At this time, it is not known when, or if, the bankruptcy
court's order will be forthcoming.

Ratings assigned to other bonds backed by the state's moral
obligation pledge are not affected by this action.

The downgrade affects about $4.9 million of debt outstanding.


SPARTAN STORES: Exploring Options for Food Town Retail Stores
-------------------------------------------------------------
As part of a strategic review process, Spartan Stores, Inc.,
(Nasdaq:SPTN) is working with The Food Partners, an investment
banking firm specializing in the food industry, to explore
alternative strategies related to its Food Town retail grocery
stores. This exploration process does not include the Company's
21 deep-discount stores operating under The Pharm banner.

Following a comprehensive review of its retail and distribution
business segments, the Company has decided to take more decisive
actions regarding its Food Town retail grocery stores in
Northwest Ohio and Southeast Michigan.

"We are diligently working to implement the best possible
solution for 39 Food Town retail grocery stores in Northwest
Ohio and Southeast Michigan," stated Spartan Stores' Chairman,
President, and Chief Executive Officer, James B. Meyer. "All
options under consideration are intended to more rapidly return
our overall retail operations to profitability."

The Company also announced plans to close its Ohio distribution
operations during its fiscal 2003 fourth quarter as part of
continuing efforts to reduce operating costs and improve
operational efficiency in its distribution business segment. The
planned warehouse facility closings are expected to improve
capacity utilization and fixed cost leverage at the Company's
Grand Rapids and Plymouth, Michigan, distribution facilities.
The warehouse consolidation efforts, which began with selected
items during this past year, will continue and now include all
products and services currently provided from the Company's Ohio
facilities. Independent retail grocery store customers are not
served by the Ohio distribution operations and the Company does
not expect the consolidation to temper its ability to attract
new customers.

Based on the performance trend of its retail operations, the
Company expects to record non-cash charges to goodwill and other
asset balances in its fiscal 2003 third quarter ended January 4,
2003.

Spartan Stores, Inc., (Nasdaq:SPTN) Grand Rapids, Michigan, owns
and operates 94 supermarkets and 21 deep-discount drug stores in
Michigan and Ohio, including Ashcraft's Markets, Family Fare
Supermarkets, Food Town, Glen's Markets, Great Day Food Centers,
Prevo's Family Markets and The Pharm. The Company also
distributes more than 40,000 private-label and national brand
products to more than 330 independent grocery stores and serves
as a wholesale distributor to 6,600 convenience stores.

                         *   *   *

As previously reported, Standard & Poor's assigned its single-
'B' rating to Spartan Stores Inc.'s planned $200 million senior
subordinated note offering due in 2012. These notes will be used
to refinance a portion of the company's senior secured debt. The
company operates retail food stores and is a wholesale food
distributor. A double-'B'-minus corporate credit rating was also
assigned to Grand Rapids, Michigan-based Spartan. The outlook is
negative. Pro forma total debt is expected to be about $330
million.


STEEL DYNAMICS: Reaches Agreement to Purchase GalvPro Assets
------------------------------------------------------------
Steel Dynamics, Inc., (Nasdaq: STLD) whose corporate credit is
rated by Standard & Poor's at 'BB-', reached an agreement to
purchase the Jeffersonville, Indiana, assets of GalvPro II LLC.
This steel coating facility formerly operated by GalvPro is
capable of producing between 300,000 and 350,000 tons per year
of light-gauge, hot-dipped cold-rolled galvanized steel. The
southern Indiana facility will become a part of Steel Dynamics'
Flat Roll Division, based in Butler, Indiana, which is expected
to supply the plant with steel coils for coating. Production at
Jeffersonville is expected to begin mid-2003. SDI is currently
capable of funding the purchase from available cash on hand.

"This asset purchase is attractive as it gives us the
opportunity to increase SDI's galvanizing capacity at a
reasonable cost," said Keith Busse, President and CEO of Steel
Dynamics. "Buying the GalvPro plant is consistent with our
strategy of pursuing a richer mix of valued-added products. With
the increasing level of hot-band steel production at our Butler
mill and strong customer demand for our coated products, we are
out-running the capabilities of our current finishing lines.
This Jeffersonville facility, combined with a coil-coating
project underway at the Butler Cold Mill, will allow us to
increase the company's volume of production of higher-margin
downstream steel products."

The addition of the new galvanizing facility would give SDI the
ability to increase its percentage of sales of various value-
added products, which were approximately 60 percent of total
flat-roll shipments during 2002. Additional modifications at the
Butler Flat Roll mill are under consideration to enhance
throughput of value-added steel.

The Jeffersonville facility is located in the Clark Maritime
Center, near Louisville, Kentucky. Located on the Ohio River and
comprised of several steel-processing businesses, the Maritime
Center is accessible by rail, truck or barge. GalvPro commenced
production there in December 1999, and idled the plant 15 months
later due to financial circumstances.


SUN WORLD INT'L: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Lead Debtor: Sun World International Inc.
             52-200 Industrial Way
             Coachella, California 92236

Bankruptcy Case No.: 03-11370

Debtor affiliates filing separate chapter 11 petitions:

     Entity                                     Case No.
     ------                                     --------
     Sun Desert Inc.                            03-11369
     Coachella Growers                          03-11371
     Sun World/Rayo                             03-11374

Type of Business: Sun World is a leading producer of high value
                  crops and one of California's largest
                  vertically integrated agricultural concerns.

Chapter 11 Petition Date: January 30, 2003

Court: Central District of California, Riverside Division

Judge: David N. Naugle

Debtors' Counsel: Mette H. Kurth, Esq.
                  Klee, Tuchin, Bogdanoff & Stern LLP
                  18880 Century Park East Suite 200
                  Los Angeles, CA 90067
                  Tel: 310-407-4000

Total Assets: $148,000,000

Total Debts: $158,000,000

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
OZ Master Fund Ltd.         Loan                    $4,500,000
Nick Singer
Goldman Sachs
9 West 57th 39th Floor
New York, NY 10019
Tel: 212-790-0146

Weyerhaeuser Co.            Trade Debt                $654,481
Dean Bergthold
PO Box 3658
Modesto, CA 95352
Tel: 209-529-9950

OZF Credit Opportunities    Loan                      $500,000
Master Fund
Nick Singer
Bear Stearns & Co.
9 West 57th St. 39th Floor
New York, NY 10019
Tel: 212-790-0146

Simplot Grower Solutions     Trade Debt                $194,245

Keithly-Williams Seeds       Trade Debt                $153,208

Chep USA                     Trade Debt                $111,671

FMC Corp.                    Trade Debt                 $82,121

Smurfit-Stone Container Corp Trade Debt                 $78,952

Sinclair Systems Int'l       Trade Debt                 $78,172

International Paper          Trade Debt                 $72,205

Crinklaw Farm Services, Inc. Trade Debt                 $71,675

Imperial Irrigation District Trade Debt                 $67,207

Tri Cal Inc.                 Trade Debt                 $61,730

Foster Gardner, Inc.         Trade Debt                 $58,446

UC Regents-Riverside         Landlord                   $47,025

San Joaquin Helicopters      Trade Debt                 $40,820

Knobbe Martens Olson & Bear  Trade Debt                 $35,565

CV Organic Fertilizer       Trade Debt                 $33,535

Summit Global Partners      Trade Debt                 $28,125

California Custom           Trade Debt                 $27,970
Agricultural Services LLC


SUNBEAM CORP: All Final Fee Applications Due By Friday
------------------------------------------------------
In connection with Sunbeam Corporation's successful emerging
from Chapter 11 bankruptcy, the U.S. Bankruptcy Court for the
Southern District of New York fixed February 7, 2003 as the
deadline for professionals to submit their applications for
final allowance of compensation and reimbursement of expenses
rendered up to the Effective of the Debtor's Plan of
Reorganization.

All Final Fee Applications must be submitted to the Bankruptcy
Court and copies must be served on:

     i. Counsel for the Debtor
        Weil, Gotshal & Manges LLP
        767 Fifth Avenue
        New York, NY 10153
        Attn: George A. Davis, Esq.

    ii. the Office of the United States Trustee
        22 Whitehall Street
        New York, NY 1004
        Attn: Paul K. Schwartzberg

   iii. Counsel for the Banks
        Simpson Thacher & Bartlett
        425 Lexington Avenue
        New York, NY 10017
        Attn: Peter Pantaleno, Esq.

    iv. Counsel for the Committee
        Kasowitz Benson Torres & Friedman LLP
        1633 Broadway
        New York, NY 10019
        Attn: David Friedman, Esq.

Final fee applications must show and reflect the application of
any retainers received in connection with the Debtor's Chapter
11 case.

A hearing to consider the Final Fee Applications will be held
before the Honorable Arthur J. Gonzalez on February 19, 2003, at
10:00 a.m. in Manhattan.

Objections, if any, to any Final Fee Application must be
received by the Bankruptcy Court on or before February 10.
Copies must also be served on the four parties indicated.

Sunbeam Corporation, the largest manufacturer and distributor of
small appliances, sells mixers, coffeemakers, grills, smoke
detectors, toasters and outdoor & camping equipment in the
United States.  The company filed for Chapter 11 protection on
February 6, 2001, (Bankr. S.D.N.Y. Case No. 01-40252).  When the
Company filed for bankruptcy it listed $2,959,863,000 in assets
and $3,201,512,000 in debts.  Sunbeam emerged from chapter 11 on
December 18, 2002, as a private company.  The Debtors' Plan
swapped $1.6 billion of claims held by Prepetition Lenders for
new equity valued at just over $500 million and delivered a 1.5%
sliver of the news equity to holders of $862 million of bond
debt.  "It is an unfortunate situation that so much value has
been lost," Judge Gonzalez commented at Sunbeam's Confirmation
Hearing.


TENNECO AUTOMOTIVE: Dec. 31 Balance Sheet Upside-Down by $94MM
--------------------------------------------------------------
Tenneco Automotive (NYSE: TEN) reported net income, before the
cumulative effect of a goodwill accounting change, for full-year
2002 of $31 million, versus a net loss of $130 million in 2001.
The company reported net income of $9 million for the fourth
quarter of 2002 compared with a net loss of $99 million during
the fourth quarter of 2001.

The fourth quarter 2002 results include income related to
special adjustments for restructuring costs and taxes totaling
$16 million after-tax, or 38-cents per share. The fourth quarter
2001 results included net charges related to restructuring,
taxes and other items totaling $92 million after-tax, or $2.34
per share. Before special adjustments, the fourth quarter 2002
results would have been a net loss of $7 million even with the
2001 fourth quarter.

Tenneco Automotive reported 2002 revenue of $3.5 billion, a 3
percent increase. Reported EBITDA for the year was $313 million,
an increase of 28 percent over 2001. For the fourth quarter,
revenue was $846 million, compared with $758 million in fourth
quarter 2001, a 12 percent increase. Adjusted for favorable
currency, revenue increased 7 percent. Reported EBITDA for the
quarter was $71 million, compared with $40 million the previous
year.

For the full year, the company improved its cash position
primarily by reducing its working capital balance by $79
million, or as a percent of sales, from 7.6 percent to 5.1
percent. This and other cash management activities helped the
company reduce its total bank and bond debt by $70 million
during the year. The company met its 2002 goal of maintaining
SGA&E expense at 12 percent of sales, reporting SGA&E expense
during the fourth quarter of 11.6 percent. The company achieved
its Project Genesis restructuring goals for the year, generating
almost $12 million in savings. The company also significantly
outperformed its bank debt covenant ratios for 2002.

The company was awarded $440 million in annualized OE business
in 2002, including a significant increase in hot-end business on
the exhaust side, for platforms expected to go into production
in 2003 through 2005. The company's Asian-based alliances
generated approximately 15 percent of the new OE business. The
company also added new aftermarket customers in 2002 estimated
at $45 million in annualized revenue.

"I am very pleased with the progress we made in 2002 in
improving our operating and financial results and in achieving
full-year profitability," said Mark P. Frissora, chairman and
CEO, Tenneco Automotive. "We were successful in generating cash
and paying down debt for the year. We also continued to win new
OE business with our emission and ride control advanced
technologies and we broadened our aftermarket customer base as
well."

The company's borrowings increased by $38 million during the
fourth quarter of 2002. Accounts receivable sold under the
company's securitization arrangements declined $20 million,
reflecting a seasonal change attributable to lower OE sales
during the year-end holiday period. The remainder of the
increase in the company's borrowings resulted from cash used
during the fourth quarter, including an increase in inventories,
primarily for 2003 platform launches and an increase in cash
balances of $8 million.

Despite the increase in borrowings during the quarter, the
company again significantly outperformed the requirements of its
bank debt covenants. At December 31, the leverage ratio was
4.39, below the maximum limit of 5.75; the fixed charge coverage
ratio was 1.30, exceeding the minimum required ratio of 0.75;
and the interest coverage ratio was 2.26, exceeding the minimum
required ratio of 1.65.

At December 31, 2002, Tenneco Automotive's balance sheet shows a
total shareholders' equity deficit of about $94 million.

"Our North American original equipment business continued to
capitalize on strong production rates in the fourth quarter
while our OE business in Europe continued to improve
profitability, particularly in the emission control business
where gross margins improved 1.5 percentage points versus the
third quarter and 1.6 percentage points compared with fourth
quarter last year," said Frissora. "The North American
aftermarket showed increasing softness in the quarter, which
impacted our results. We're staying focused on controlling the
cost side of the business and working to stimulate demand for
ride control products through aggressive marketing and sales
efforts."

                         NORTH AMERICA

Continued strong production volumes drove an 11 percent increase
in North American original equipment revenue during the quarter.
The company reported North American original equipment revenue
of $338 million during the quarter versus $306 million in fourth
quarter 2001. Excluding catalytic converter pass-through sales,
revenue increased 12 percent. North American aftermarket revenue
for the quarter was $88 million versus $116 million one year
ago. Revenue was primarily impacted by the continuing decline in
the exhaust market and, to a lesser extent, lower volumes in the
ride control market.

North American EBIT increased to $21 million from $12 million
the previous year. Higher OE volumes and improved manufacturing
efficiency were offset by the impact of lower volumes in both
the ride control and exhaust segments of the aftermarket. Fourth
quarter 2002 results include a benefit of $2 million for an
adjustment in the estimate to complete Project Genesis and non-
accruable restructuring expenses of $2 million. Fourth quarter
2001 included $8 million in restructuring and related expenses.

                            EUROPE

The company reported a 22 percent increase in European OE
revenue to $253 million, compared with $207 million in the
fourth quarter of 2001. Higher currency exchange rates benefited
total OE revenues by $29 million. Excluding catalytic converter
pass-through sales and currency exchange, revenue was up 4
percent. The company's European aftermarket revenue increased 14
percent to $70 million, versus $61 million in fourth quarter
2001. Excluding the impact of currency exchange, aftermarket
revenue increased 1 percent.

European EBIT was $3 million in the quarter, compared with a
loss of $16 million in the fourth quarter of 2001. Fourth
quarter 2002 results include a net benefit of $3 million for an
adjustment in the estimate to complete Project Genesis, net of
non-accruable Genesis costs. Fourth quarter 2001 results include
a net $20 million of restructuring and related expenses and $4
million benefit for a reversal of an environmental reserve.

                         REST OF WORLD

The company reported revenue for its Asian operations of $39
million, a 151 percent increase compared with fourth quarter
2001. New business and increased OE volumes in China drove the
improvement.

Australian operations reported a 27 percent increase in revenue
to $33 million, versus $27 million one year ago.

In South America, the company reported revenue of $25 million
compared with $26 million in the fourth quarter of 2001.
Revenues increased 30 percent excluding the impact of currency
devaluations.

Combined EBIT for Asia, Australia and South America was $7
million versus $6 million in fourth quarter 2001. Fourth quarter
2002 results include a $1 million favorable adjustment in the
estimate to complete Project Genesis, net of non-accruable
Genesis costs. Fourth quarter 2001 results include a $1 million
restructuring charge for Project Genesis.

                            OUTLOOK

"Our top priority this year is to continue generating cash to
pay down debt, primarily through additional working capital
improvements and strengthening our margins. We are working to
grow the top line of our businesses by leveraging our advanced
technologies and strong brands and expanding to adjacent
markets," said Frissora. "We are also doubling our efforts to
control what we can in order to help offset what we anticipate
will be a tougher operating environment in the coming year in
light of current global economic and political uncertainties."

                CHANGE IN ACCOUNTING FOR GOODWILL

The company recorded a charge in full-year results of $218
million net of tax, or $5.48 per diluted share, for adopting the
Financial Accounting Standards Board's new rules on accounting
for goodwill. Including the goodwill charge, the company
reported a net loss for full-year 2002 of $187 million, or $4.74
per diluted share.

The attachments provide additional information on Tenneco
Automotive's fourth quarter and full year 2002 earnings.

                       2003 ANNUAL MEETING

The Tenneco Automotive board of directors has scheduled the
corporation's annual meeting of shareholders for Tuesday,
May 13, 2003 at 10:00 a.m. The meeting will be held at the
corporate headquarters, 500 North Field Drive, Lake Forest,
Illinois. The record date for shareholders to vote at the
meeting is March 21, 2003.

Tenneco Automotive is a $3.5 billion manufacturing company with
headquarters in Lake Forest, Illinois and approximately 20,000
employees worldwide. Tenneco Automotive is one of the world's
largest producers and marketers of ride control and exhaust
systems and products, which are sold under the Monroe(R) and
Walker(R) global brand names. Among its products are Sensa-
Trac(R) and Monroe(R) Reflex(TM) shocks and struts, Rancho(R)
shock absorbers, Walker(R) Quiet-Flow(TM) mufflers and
DynoMax(R) performance exhaust products, and Monroe(R)
Clevite(TM) vibration control components.


TIME WARNER TELECOM: Posts Q4 $244MM Net Loss on $175MM Revenue
---------------------------------------------------------------
Time Warner Telecom Inc. (Nasdaq: TWTC), a leading provider of
metro and regional optical broadband networks and services to
business customers, announced its fourth quarter 2002 financial
results, including $175.1 million in revenue, $57.4 million in
EBITDA, and a net loss of $243.7 million, which includes an
asset impairment charge of $212.7 million.

For the year ended December 31, 2002, the Company reported
revenue of $695.6 million, EBITDA of $189.2 million, and a net
loss of $366.0 million.

"Time Warner Telecom continues to perform well," said Larissa
Herda, Time Warner Telecom's Chairman, CEO and President. "We
have achieved progress toward profitability with strong EBITDA
and margins. In order to position us for the future, our focus
throughout 2002 was to drive operating efficiencies and conserve
capital resources during an economic downturn. That approach has
served us well. Our discipline should allow us to enjoy long-
term growth and overall success."

                            Revenue

Revenue for the quarter, including $5.2 million of nonrecurring
reciprocal compensation, increased 1% to $175.1 million, as
compared to the same period last year. When nonrecurring
reciprocal compensation is excluded, revenue decreased 2% as
compared to the same period last year, primarily related to
decreased intercarrier compensation. Excluding intercarrier
compensation, revenue increased 2% for the quarter over the same
period last year. This increase was led by growth in Internet
and data revenue, which increased 41% over the same period last
year, but was offset by a net decline in other revenue
categories primarily due to heavy customer churn.

               EBITDA, Margins and Expense Savings

During the fourth quarter the Company realized certain recurring
and one-time expense savings. Recurring savings were $3.5
million for workforce reductions that occurred in August 2002,
which favorably impacted both operating costs as well as
selling, general and administrative costs. One-time expense
savings in the quarter included $7.0 million in reduced
operating costs due to settlement and resolution of carrier
billing charges.

EBITDA for the fourth quarter was $57.4 million, reflecting a
33% EBITDA margin as compared to 18% for the same period last
year. If the nonrecurring reciprocal compensation revenue of
$5.2 million and one-time expense reductions of $7.0 million
were excluded for 2002, EBITDA would have been $45.2 million for
the fourth quarter, which depicts an EBITDA margin of 27%. Even
with this adjustment to eliminate these items, the fourth
quarter results reflected the highest recurring EBITDA margin
reported by the Company. The 27% EBITDA margin compares to an
EBITDA margin of 22% in 2001, after adjusting for the non-
recurring charge of $6.8 million in 2001.

Gross margin was 64% for the fourth quarter versus 55% in the
same period last year. After removing the one-time items
referenced above, gross margin would have been 59% for the
fourth quarter as compared to 55% for the same period last year.
The Company utilizes a fully burdened gross margin, including
network costs, long haul capacity costs and personnel costs for
customer care, provisioning, network maintenance, technical
field and network operations.

                         Asset Impairment

In the fourth quarter of 2002, the Company recorded a $212.7
million impairment charge pursuant to Statement of Financial
Accounting Standards No. 144 "Accounting for the Impairment or
Disposal of Long-Lived Assets." The non-cash impairment charge
primarily relates to the long-haul network acquired from GST
and, to a lesser degree, certain local network assets. The
Company generates revenue from these networks and expects to do
so in the future, however, the impairment reflects slower than
expected growth from these assets.

                            Net Loss

The Company reported a net loss of $243.7 million for the fourth
quarter of 2002, as compared to a net loss of $32.5 million for
the same period last year. The full year net loss for 2002 was
$366.0 million, as compared to a net loss of $81.2 million for
2001. The increase in the net loss for both the quarter and the
year primarily reflects the asset impairment charge in 2002.

                       Capital Expenditures

Capital expenditures for the quarter were $12.7 million, as
compared to $88.3 million for the same period last year. For the
year, capital expenditures totaled $104.8 million in 2002, as
compared to $425.5 million in 2001. The decrease in 2002
reflects the Company's controllable success-based spending plan
as well as its ability to redeploy network capacity. By
contrast, in 2001 the Company constructed five new markets and
entered 15 additional markets in an asset acquisition.

             Liquidity and Other Operating Highlights

As of December 31, 2002, the Company reported $506.5 million in
cash and equivalents. EBITDA of $57.4 million for the quarter
covered interest expense by approximately 2 times.

Effective October 25, the Company amended its credit facility
agreement. Under the amended terms, the Company relaxed certain
financial covenants, reduced the total facility to $800 million,
and increased the maximum interest spread on portions of the
facility, among other changes. The effective interest rate on
the amended facility was 5.1% at December 31, 2002. In
conjunction with the amendment, the Company increased its net
borrowings by $170 million, leaving $380 million undrawn. The
Company believes this credit facility, together with the cash on
hand and positive EBITDA provides adequate liquidity for the
Company's current business plan. The Company is in compliance
with all its financing agreements.

The Company continued to experience high levels of customer
disconnects and bankruptcies associated with the overall
economic environment. Disconnects in the quarter resulted in the
loss of $3.5 million in monthly recurring revenue, including
$0.7 million related to WorldCom. This compares to $3.3 million
of total disconnects experienced in the third quarter. The
Company reported that approximately 14% of recurring revenue was
from companies in bankruptcy as of December 31, 2002, comprised
primarily of WorldCom. "As WorldCom continues to move through
its restructuring process, we continue to work to understand
their future requirements," said David Rayner, Time Warner
Telecom's Senior Vice President and Chief Financial Officer.
"While it is difficult to quantify their ongoing needs due to
the nature of the bankruptcy process, we expect we could lose at
least half of the monthly recurring revenue from WorldCom over
the course of 2003." WorldCom represented approximately 10% of
the company's recurring revenue for the fourth quarter.

                    Setting Growth Foundation

"We are pleased with our cost containment efforts throughout the
past year," said Herda. "Given the economic environment, it is
imperative that we operate at the most efficient level possible.
However, cost cutting does not grow the business. In 2003, we
are launching several initiatives to enable us to grow. A few of
these initiatives include increasing our sales force, engaging
in joint marketing activities, launching new products, and
increasing network investments in our existing markets."

                    Increasing the Sales Force

As of December 31, the Company's sales force was 225. During
2003, Time Warner Telecom expects to increase its sales force by
as much as 30%, reflecting its desire to more aggressively
penetrate local market enterprises. "While carrier customers
remain important to us, we will continue to aggressively pursue
end-user opportunities to expand and diversify our customer
base," said Herda. "Adding highly skilled sales expertise will
be critical to our future growth."

                    Joint Marketing Activities

The Company has entered into several co-marketing arrangements
with national and regional technology and systems integrator
companies to jointly market the Company's services. These co-
marketers increase the Company's ability to provide a more
robust set of solutions for its enterprise customers. "While we
retain control of the sales process, jointly approaching
customers with vendors that already provide products
complimentary to the Company's offerings increases our value
proposition with customers," said Herda. "Developing a sales
strategy which combines the efforts of a select number of
complementary vendors and the Company's direct sales team
creates incremental sales coverage throughout Time Warner
Telecom's markets."

                    Launching New Products

In 2003, the Company will continue to focus on delivering new
products that will help leverage its existing network. "Fiber is
the name of the game," said Herda. "Most of the products in
demand today require fiber all the way to the customer premise.
Our strategy is to deploy local fiber networks and then
continually add new products and services that ride over our
networks." The Company expects to launch products and services
that support the data and IP initiatives its customers' are
undertaking. Specifically, the Company expects to more broadly
deploy its Metro Ethernet, or Native LAN, services to reach more
customers' locations in its markets. Subsequently, Internet
access and voice over IP solutions can ride this converged
network infrastructure.

          Increasing network investment in existing markets

The Company intends to more aggressively explore network
expansion, data services infrastructure and building entry
opportunities in its existing markets. The Company expects
capital expenditures for 2003 to be approximately $200 million.
"We focused on cash conservation and operating efficiencies in
2002," said Rayner. "2003 is the time for focused and measured
investment in future growth prospects, while remaining sensitive
to the continuing, unsettled economic climate. We intend to
enhance our growth opportunities, while maintaining the proper
cost structure."

"No single initiative is engineered to be the winning home run,
rather each component is designed to add solid incremental
growth," said Herda. "We are dedicated to seeking out growth
opportunities, but we recognize growth will not happen
overnight. Our path to long-term success is predicated upon our
fiber networks that extend all the way to the customers'
premises, a quality customer base, a dedicated team of people,
and our strong brand name. Our dedication to solid business
fundamentals and customer service will be the vehicle to move us
along that path," concluded Herda.

Time Warner Telecom Inc., headquartered in Littleton, Colo.,
delivers "last-mile" broadband data, dedicated Internet access
and voice services for businesses in U.S. metropolitan areas.
Time Warner Telecom Inc., one of the country's premier
competitive telecom carriers, delivers fast, powerful and
flexible facilities-based metro and regional optical networks to
large and medium customers. Please visit
http://www.twtelecom.comfor more information.

As reported in Troubled Company Reporter's November 13, 2002
edition, Standard & Poor's affirmed its single-'B' corporate
credit rating on competitive local exchange carrier Time Warner
Telecom Inc., and removed the rating from CreditWatch with
negative implications.

The rating was originally placed on CreditWatch on September 24,
2002 due to concerns about the company's ability to meet bank
loan covenants in 2003. At September 30, 2002, the Littleton,
Colorado-based company had $1.1 billion of total debt
outstanding. The outlook is negative.

"The affirmation and removal from CreditWatch follows the
company's announced amendments to its bank loan agreement, which
loosens the debt to EBITDA and EBITDA interest coverage
maintenance tests during 2003," said Standard & Poor's credit
analyst Catherine Cosentino. "This provides Time Warner Telecom
additional financial cushion, with the expectation that the
company can meet these revised covenants at the current
operating cash flow run rate of about $40 million per quarter."


TITANIUM METALS: Shareholders Approve Proposed Reverse Split
------------------------------------------------------------
Titanium Metals Corporation (NYSE: TIE) announced that at a
special meeting of stockholders held Tuesday the stockholders of
TIMET approved the amendment of TIMET's Certificate of
Incorporation to effect a reverse stock split of the Company's
common stock at a ratio of one share of post-split common stock
for each currently outstanding eight, nine or ten shares of pre-
split common stock, with the final exchange ratio to be selected
by the Board of Directors; and to reduce the number of
authorized shares of common stock and preferred stock of the
Company from 99,000,000 shares and 1,000,000 shares,
respectively, to 9,900,000 and 100,000 shares, respectively.
Following the special meeting of stockholders, TIMET's Board of
Directors unanimously approved the reverse stock split on the
basis of one share of post-split common stock for each currently
outstanding 10 shares of pre-split common stock.  Upon
satisfaction of the NYSE listing requirements, the effective
date of the reverse stock split will be announced.

TIMET, headquartered in Denver, Colorado, is a leading worldwide
producer of titanium metal products.  Information on TIMET is
available on the internet at http://www.timet.com

                         *    *    *

As reported in Troubled Company Reporter's October 31, 2002
edition, Standard & Poor's lowered its preferred stock
rating on Titanium Metals Corp., to single-'C' from triple-'C'-
minus following the company's announcement that it plans to
defer future dividend payments on its preferred stock.

Standard & Poor's said that it has affirmed its single-'B'-minus
corporate credit rating on the company. The outlook remains
negative.


TRANSWITCH CORP: Files Patent Infringement Suit against Galazar
---------------------------------------------------------------
TranSwitch Corporation (NASDAQ: TXCC), a leading developer and
global supplier of innovative high-speed VLSI semiconductor
solutions, filed suit in the U.S. District Court of
Massachusetts against Galazar Networks, Inc., for the
infringement of a number of fundamental patents.

These patents cover the technology for systems on a chip that
perform mapping, switching and cross connection of synchronous
optical networks and synchronous digital hierarchy signals.

"TranSwitch's technical leadership in the SONET/SDH area is
based on the significant research and development investment we
have made over many years. Our intellectual property includes a
comprehensive, worldwide patent portfolio of 128 patents granted
and 133 patents pending, " said Robert Pico, TranSwitch's vice
president of business development. "We aggressively enforce our
patent portfolio to protect the interests of our customers and
shareholders," continued Mr. Pico.

TranSwitch is seeking a permanent injunction prohibiting Galazar
Networks from using, selling, marketing or distributing versions
of their MSF 250 multi-service framer, which is part of their
SOLAR family of products, that infringe TranSwitch's
intellectual property. TranSwitch is also seeking monetary
damages as compensation for Galazar's infringement of
TranSwitch's intellectual property.

TranSwitch Corporation, headquartered in Shelton, Connecticut,
is a leading developer and global supplier of innovative high-
speed VLSI semiconductor solutions - Connectivity Engines(TM)-
to original equipment manufacturers who serve three end-markets:
the Worldwide Public Network Infrastructure, the Internet
Infrastructure, and corporate Wide Area Networks. Combining its
in-depth understanding of applicable global communication
standards and its world-class expertise in semiconductor design,
TranSwitch Corporation implements communications standards in
VLSI solutions that deliver high levels of performance.
Committed to providing high-quality products and service,
TranSwitch is ISO 9001 registered. Detailed information on
TranSwitch products, news announcements, seminars, service and
support is available on TranSwitch's home page at the World Wide
Web site - http://www.transwitch.com

As reported in Troubled Company Reporter's December 10, 2002
edition, Standard & Poor's affirmed its 'B-' corporate credit
and senior unsecured debt ratings on Traswitch Corp. At the same
time, Standard & Poor's revised the company's outlook to
negative from stable. The outlook revision reflects diminished
liquidity and ongoing cash usage, stemming from a severe decline
in the company's markets. Transwitch's quarterly revenue run
rate has been below $5 million and negative free cash flow has
been about $20 million per quarter since June of 2001.

The company may face difficulties increasing revenues from a
very low base, given substantial competition and a rapidly
evolving technology environment in the communications equipment
market.


TRENWICK GROUP: Fitch Further Junks L-T & Sr. Debt Ratings to C
---------------------------------------------------------------
Fitch Ratings has lowered its long-term rating and senior debt
ratings on Trenwick Group. Ltd. and its subsidiaries, to 'C'
from 'CC'. Fitch's ratings on Trenwick's capital securities and
preferred stock remain 'C'.

Fitch's rating action follows Trenwick's recent announcement
that it is taking a $107 million reserve charge. Trenwick has
$75 million of senior debt outstanding due April 1, 2003. The
company's capital structure also includes $68 million of trust
preferred capital securities due 2027 and $75 million of
traditional preferred securities. Fitch believes that Trenwick's
business prospects and financial flexibility are very limited
and that the company will be unable to refinance its senior
debt. In addition, Fitch believes that Trenwick's ability to
remain a going-concern is heavily dependent on financing
provided by an existing letter-of-credit facility. The LOC
facility's covenants include a provision that Trenwick refinance
its outstanding senior debt by March 1, 2003. As a result, Fitch
believes that senior debt holders may be forced to consider
accepting some form of payment-in-kind arrangement.

Trenwick's reserve charge impacted its U.S.-domiciled operating
subsidiaries and Trenwick International Limited, its U.K. based
subsidiary. At September 30, 2002 the company's lead U.S. based
subsidiary had $227 million of surplus. Depending on the amount
of the reserve charge allocated to each of Trenwick's operating
subsidiaries Fitch believes that the subsidiaries' year-end 2002
surplus position is likely to be significantly impaired.

Fitch also notes the ordinary dividend capacity of Trenwick's
lead U.S. based operating subsidiary is limited to the greater
of 10% of statutory surplus or 100% of the previous year's net
income. Through the first nine months of 2002, Trenwick's lead
operating subsidiary had reported a $30 million net loss. Note:
These ratings were initiated by Fitch as a service to users of
Fitch ratings. The ratings are based primarily on publicly
available information.

                     Trenwick Group, Ltd.

     -- Long-term Downgrade 'C'.

                    Trenwick America Corp.

     -- Long-term Downgrade 'C';

     -- Senior debt Downgrade 'C'.

                   LaSalle Re Holdings, Ltd.

     -- Long-term No Action 'C';

     -- Preferred stock No Action 'C'.

                    Trenwick Capital Trust I

     -- Preferred capital sec No Action 'C'.


TRINITY ENERGY RESOURCES: Voluntary Chapter 11 Case Summary
-----------------------------------------------------------
Debtor: Trinity Energy Resources Inc.
        16420 Park Ten Place
        Suite 450
        Houston, TX 77084
        dba Trinity Gas Corporation
        dba Trinity (Texas) Energy Resources Inc

Bankruptcy Case No.: 03-31453

Type of Business: Trinity Energy Resources Inc., is a developer
                  and operator of proven oil and gas reserves
                  in the Rocky Mountains, Texas, and Louisiana,
                  with international interests in the African
                  Republic of Chad.

Chapter 11 Petition Date: January 31, 2003

Court: Southern District of Texas (Houston)

Judge: Letitia Z. Clark

Debtor's Counsel: John William Mahoney, Esq.
                  Williams Birnberg & Andersen
                  6671 S.W. Freeway, Suite 303
                  Houston, TX 77074-2284
                  Tel: 713-981-9595

Total Assets: $1,009,626 (as of Sept. 30, 2002)

Total Debts: $1,619,031 (as of Sept. 30, 2002)


UNITED AIRLINES: Hires Wilmer Cutler as Regulatory Counsel
----------------------------------------------------------
Wilmer, Cutler & Pickering has extensive prior experience in
airline regulatory law, airline bankruptcy proceedings, and the
interplay between regulatory law and the Bankruptcy Code.  This
is one of the many reasons why the UAL Corporation and its
debtor-affiliates seek to employ WCP as its special regulatory
counsel.

WCP has represented the Debtors on regulatory law issues since
2000.  In addition, the two WCP attorneys primarily responsible
for this engagement -- Bruce H. Rabinovitz and Jeffrey Manley --
have represented the Debtors on regulatory matters since 1989.
If WCP were replaced with another counsel, it would undoubtedly
be disruptive and costly to the Debtors, their estates, and
their creditors.  Were the Debtors required to retain different
counsel for these regulatory matters, all parties-in-interest
would be unduly prejudiced by the time and expense necessary to
replicate WCP's ready familiarity with the intricacies of
airline regulatory law and its interface with the Bankruptcy
Code.  WCP has a national and international reputation, and
experience and expertise in airline regulatory law and
litigation.

Furthermore, WCP is well qualified and uniquely able to provide
the specialized legal advice sought by the Debtors on a going-
forward basis.

In accordance with Section 330(a) of the Bankruptcy Code,
compensation will be payable to WCP on an hourly basis, plus
reimbursement of actual, necessary expenses.  WCP's hourly rates
are set at a level designed to compensate it fairly for the work
of its attorneys and paraprofessionals and to cover fixed and
routine overhead expenses.  Hourly rates vary with the
experience and seniority of the individuals assigned and may be
adjusted by WCP from time to time.  The firm's current hourly
rates are:

          Partners                 $675 - 390
          Counsel                   495 - 365
          Associates                395 - 205
          Paraprofessionals         210 -  80

It is WCP's policy to charge its clients for all other expenses
incurred in connection with a client's case, including:

    -- photocopying;
    -- witness fees;
    -- travel expenses;
    -- certain secretarial and other overtime expenses;
    -- filing and recording fees;
    -- long distance telephone calls;
    -- postage;
    -- express mail and messenger charges;
    -- computerized legal research and other computer services;
    -- expenses for "working meals"; and
    -- telecopier charges.

WCP will charge the Debtors for these expenses in a manner and
at rates consistent with charges made to its other clients.

WCP will submit interim and final applications for compensation
in accordance with the Bankruptcy Rules, the local rules of this
Court and other and further Court orders.

Bruce H. Rabinovitz, Esq., a partner at WCP, outlines the scope
of the firm's representation.  Mr. Rabinovitz relates that WCP
is engaged to advise UAL Corporation on domestic and
international aviation regulatory matters, including:

    -- regulatory matters under Federal antitrust laws;

    -- aviation regulations arising under U.S. transportation
       laws;

    -- aviation regulations arising under European Union
       transportation laws; and

    -- aviation regulatory opinions required in conjunction with
       financing arrangements.

Mr. Rabinovitz discloses that WCP conducted an investigation
that was as thorough as possible in light of the limited time
available.  Mr. Rabinovitz searched the WCP conflicts database,
which is designed to reveal any connections with:

    (a) the holders of large unsecured claims against the
        Debtors -- other than lenders secured by, or lessors of,
        aircraft;

    (b) holders of 5% or more of the equity securities of
        United;

    (c) the aircraft-related lenders or lessors to the Debtors;

    (d) the Debtors' investment banks;

    (e) the trustees for the Debtors' unsecured debt; and

    (f) the Star Alliance and the members of the Star Alliance.

Mr. Rabinovitz asserts that based on the search, no person at
WCP has any connection with the Debtors, their creditors, the
United States Trustee or any other party with an actual or
potential interest in these Chapter 11 cases or their attorneys
or accountants.  However, despite the efforts to identify WCP's
connections with parties-in-interest, because WCP is an
international firm with approximately 540 attorneys in seven
offices, and because the Debtors are a multi-national enterprise
with thousands of creditors and other relationships, WCP is
unable to state with certainty that every client representation
or other connection has been discovered.  If WCP discovers
additional information that requires disclosure, WCP will file a
supplemental affidavit with the Court as promptly as possible.
Additionally, WCP has personnel and information barriers that
prevent the sharing of client information among members of the
firm.  Mr. Rabinovitz assures the Court that the barriers to
information flow will be enforced to the maximum possible.
(United Airlines Bankruptcy News, Issue No. 7; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

United Airlines' 10.670% bonds due 2004 (UAL04USR1) are trading
at about 6 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=UAL04USR1for
real-time bond pricing.


US AIRWAYS: Wants Plan Filing Exclusivity Extended to April 1
-------------------------------------------------------------
US Airways Group asks Judge Mitchell extend their exclusive
periods to file a plan of reorganization to April 1, 2003 and
to solicit acceptances of that plan to May 30, 2003.  Although
the Debtors have filed a proposed plan of reorganization, John
Wm. Butler, Esq., at Skadden, Arps, Slate, Meagher & Flom,
explains, as a precaution, the Debtors wish to extend the
Exclusive Periods in the event that the Plan is not confirmed or
does not ultimately go into effect. This request, Mr. Butler
stresses, does not change the Debtors' goal of emerging from
bankruptcy in the first quarter of 2003.

The Plan, Mr. Butler tells Judge Mitchell, is the culmination of
the significant efforts by the Debtors and other parties in
interest to stabilize the Debtors' businesses and position the
Debtors to emerge from chapter 11 as a stronger, financially
sound airline.  The Debtors direct Judge Mitchell's attention to
four specific milestones:

    * US Airways, Inc. has obtained conditional approval for a
      $1 billion, 6 ® year long term loan, $900 million of which
      will be guaranteed by the federal government under the Air
      Transportation Safety and Stabilization Act (Public Law
      107-42), which US Airways will seek to use under
      applicable law as part of a post-Chapter 11 exit financing
      facility.

    * US Airways Group, Inc. has obtained authority to enter
      into an investment agreement with The Retirement Systems
      of Alabama under which RSA will make a $240 million equity
      investment in the reorganized Group, and has entered into
      a $500 million debtor-in-possession credit facility with
      RSA that will provide financing during the pendency of
      these chapter 11 cases.

    * US Airways has negotiated collective bargaining
      agreements, containing cost savings from labor from each
      of its five major unions, and has also reached agreements
      with each of its major credit card processors.

    * The Debtors have devoted significant attention to
      evaluating their numerous aircraft and equipment leases
      and rationalizing their fleet.  Since the Petition Date,
      the Debtors have rejected or abandoned unnecessary
      aircraft.  The Debtors have also unilaterally agreed to
      perform their obligations under section 1110 of the
      Bankruptcy Code with respect to a substantial portion of
      their fleet.  The Debtors have been in extensive
      negotiations with their aircraft lessors and financiers
      with respect to the remainder of their fleet to
      restructure their aircraft obligations consistent with
      market rates with very significant cost savings.

While the Debtors hope that the Plan will be confirmed at the
Confirmation Hearing and will subsequently go into effect, as a
precaution they are seeking to extend the Exclusive Periods in
order to provide a sufficient buffer to further refine, if
necessary, a restructuring plan.  This is merely a protective
measure that the Debtors are taking so that, in the event that
the Plan is not confirmed or does not ultimately go into effect,
the Debtors will have an opportunity to continue to work with
parties in interest to propose a plan that will be confirmed and
will allow the Debtors to successfully emerge from these chapter
11 proceedings.

The Court will convene a hearing on February 20, 2003 to
consider the Debtors' request and Judge Mitchell directs that
the Debtors' exclusive period will remain intact through the
conclusion of that hearing. (US Airways Bankruptcy News, Issue
No. 24; Bankruptcy Creditors' Service, Inc., 609/392-0900)


USA BIOMASS CORP: Court Signs Final Plan Confirmation Order
-----------------------------------------------------------
USA Biomass Corporation (OTC: USBCQ) announced that the Federal
Bankruptcy Court signed the Confirmation Order which set an
Effective Date of February 10, 2003 for the company's
Reorganization Plan. This means that the company will officially
emerge from bankruptcy on that date; entitling the new
management team to assume full legal control and authority to
manage the company's business.

The USBC Shareholders Group, which had expected to have the
Reorganization Plan declared effective by September 30, 2002,
was able to take control of USA Biomass' principal business
operations on November 11, 2002. However, the unexpected delay
severely hampered the new management team's authority to finance
the equipment acquisitions necessary to bid for new business and
increase its volume of operations until the Reorganization Plan
was effective.

Revenues for December 2002, the first full month under the new
management team, were $183,000, and operating income approached
break even for December. January 2003 revenues, the company's
second month of operations, are expected to be approximately
$210,000, with near break-even operational results. Both months
of operations were at substantially below capacity.

As a result of the company's ability to now finance equipment
acquisitions, USA Biomass expects February 2003 revenues to
increase, with a continuing rise in revenues over the coming
months. The current business plan projects the company to end
this calendar year with annualized revenues at a run rate of
approximately $4,000,000, with continued future growth.

The company retained independent accountants in January 2003 who
have commenced their audits of the years 2000, 2001 and 2002.
USA Biomass expects to have all of its SEC filings current by
the end of February 2003, which will permit its stock to apply
for trading on the OTCBB. The company expects the "Q" which has
been added to its symbol to be removed no later than when it is
current with its SEC filings.

SoCal Waste Group, the USA Biomass Shareholder Group company
that has been operating the business, will be merged with USA
Biomass on the Effective Date. To finance the start-up of
operations while the company was undergoing reorganization
proceedings in federal bankruptcy court, the USA Biomass
Shareholder Group - composed largely of USA Biomass'
shareholders -- raised over $1,000,000 in equity capital to fund
SoCal Waste Group, and by extension, USA Biomass' start-up and
transition costs.


USG CORP: Fourth Quarter Results Reflect Strong Core Businesses
---------------------------------------------------------------
USG Corporation (NYSE: USG) reported fourth quarter 2002 net
sales of $851 million and net earnings of $21 million.

Net sales and net earnings for all of 2002 were $3,468 million
and $43 million, respectively. Diluted earnings per share for
the year were $1.00. Net earnings in 2002 included a non-cash,
non-taxable goodwill impairment charge of $96 million, or $2.22
per share.

Net sales and net earnings were $3,296 million and $16 million,
respectively, in 2001. Diluted earnings per share totaled $0.36.
Net earnings in 2001 included after-tax impairment charges of
$25 million, or $0.56 per share.

"USG made further strides in strengthening all of its core
businesses in 2002," said USG Corporation Chairman, President
and CEO, William C. Foote, commenting on the results of the past
year. "In our gypsum business, we made capital investments to
add capacity for our Sheetrock(R) Brand joint compounds and
Durock(R) Brand cement board products. Both product lines, as
well as USG's Sheetrock(R) Brand gypsum wallboard, achieved
record shipments during the year. Our distribution business
improved its operating margin and expanded its presence in
several markets. Domestically, our ceilings business reduced
costs and achieved higher earnings in a down market.
Internationally, we took steps to downsize our European ceilings
operations and position it for improved performance in the
future. In all three of our businesses, we implemented
enhancements to customer service and operating productivity."

While USG remained focused on its businesses and customers, it
was also working to resolve its Chapter 11 restructuring, which
was caused by runaway asbestos litigation. The central issue in
the restructuring is the amount of U.S. Gypsum's asbestos
liability, and USG has asked the Court to adopt procedures for
quantifying that liability. The Company would then be able to
determine its ability to satisfy both asbestos and non-asbestos
claims and whether any value would remain for current
shareholders. "We remain committed to our goal of fairly
compensating legitimate asbestos claimants and other creditors,
while protecting the interests of our current shareholders, but
we face many challenges and there is no guarantee that we will
be successful," commented Foote.

The outlook for the Corporation's markets in 2003 is mixed.
Demand for gypsum board is expected to remain strong, primarily
due to continued high demand for new homes. Despite the strong
demand, the wallboard industry is expected to continue to have a
large amount of excess capacity. Non- residential construction,
the principal market for the Corporation's ceiling products and
a major market for its distribution business, is likely to
remain weak. In addition, USG, like many other companies, faces
cost pressures in areas such as employee and retiree medical
expenses, raw material and energy costs, and insurance premiums.
In this environment, USG is focusing its management attention
and investments on improving customer service, manufacturing
costs and operating efficiencies, as well as selectively
investing to grow its businesses. "We plan to further strengthen
our operations and continue our efforts to build USG in 2003,"
stated Foote.

North American Gypsum

USG's North American Gypsum business recorded net sales of $523
million and operating profit of $59 million in the fourth
quarter. Net sales increased by 4 percent compared to the fourth
quarter of 2001, while operating profit increased by $1 million.
Most of the increase in sales came from higher prices for USG's
Sheetrock Brand gypsum wallboard, and record fourth quarter
shipments of Sheetrock Brand joint compounds and Durock Brand
cement board products.

United States Gypsum Company had net sales of $474 million and
operating profit of $47 million in the fourth quarter. Compared
to the fourth quarter of 2001, net sales increased by 3 percent
and operating profit rose $1 million. The sales increase was
primarily due to higher realized selling prices for gypsum
wallboard and record sales of joint compounds and cement board
products. The Company's operating profit margin in the quarter
was similar to the level in last year's fourth quarter.

U.S. Gypsum's shipments of gypsum wallboard for the quarter
totaled 2.4 billion square feet. Shipments were 6 percent lower
than shipments in the fourth quarter of 2001, when the Company
achieved the largest volume of fourth quarter shipments in its
history. U.S. Gypsum's wallboard plants operated at 89 percent
of capacity in the fourth quarter compared to 92 percent of
capacity in the fourth quarter of 2001.

U.S. Gypsum's nationwide average realized price of wallboard was
$102.98 per thousand square feet during the fourth quarter. This
is 7 percent higher than the same period a year ago. Prices are
currently averaging about $100 per thousand square feet.

Manufacturing costs for wallboard in the fourth quarter
increased versus the fourth quarter in 2001, primarily due to
higher waste paper costs and the unfavorable impact of lower
production volumes. Prices for waste paper, an important raw
material in wallboard, were 15 percent higher in the fourth
quarter compared to the same period a year earlier. Prices
declined during the quarter, but at the start of 2003, were
still above levels experienced in the first quarter of 2002.

In the fourth quarter, the Company announced the opening of a
new cement board manufacturing line at its Baltimore, Md.,
gypsum plant. The high-speed production line was built to meet
the increasing demand for the Company's high-quality Durock
Brand cement board products, which are typically used with
ceramic tile and exterior finish system applications. U.S.
Gypsum is the nation's leading cement board manufacturer and,
with the opening of the Baltimore line, now operates four cement
board production lines in the U.S.

The gypsum division of Canada-based CGC Inc. reported fourth
quarter 2002 net sales of $55 million, an increase of 6 percent.
Operating profit was $8 million, an increase of $1 million
compared with last year's fourth quarter results. The increases
in sales and profits were primarily due to both strong growth in
shipments and higher selling prices for both wallboard and joint
treatment.

Worldwide Ceilings

USG's Worldwide Ceilings business reported fourth quarter 2002
net sales of $142 million, a decline of 5 percent from the
fourth quarter of 2001. The business had an operating loss of $2
million, compared with an operating profit of $5 million in last
year's fourth quarter. The lower sales reflect a continued
weakening of the worldwide commercial construction markets where
ceiling products are used. The decline in operating profit was
largely due to an $11 million charge related to the downsizing
of USG's ceilings products operations in Europe.

USG Interiors' operating profit for the fourth quarter was $6
million, a decline of $1 million compared to the fourth quarter
of 2001. The ceilings division of Canada-based CGC had a $1
million profit, the same level as in the fourth quarter of 2001.
USG International had an operating loss of $9 million compared
to a $3 million operating loss in the fourth quarter of 2001.
The fourth quarter 2002 results of USG International included
the previously mentioned $11 million charge. The charge is
related to actions taken to close the ceiling tile plant in
Aubange, Belgium, and downsize European operations in order to
attain improved performance.

Building Products Distribution

L&W Supply, USG's building products distribution subsidiary,
reported fourth quarter 2002 net sales of $302 million, compared
to $285 million in the same period a year ago. The 6 percent
increase in revenues was primarily due to increased wallboard
shipments and complementary product sales in the quarter, as
well as increased wallboard selling prices.

Operating profit for L&W Supply was $13 million in the quarter
versus $11 million in the fourth quarter of 2001. Profitability
increased largely due to increased sales of complementary
building products and reduced operating expenses. As of December
31, 2002, L&W operated 181 locations in the U.S., distributing
gypsum wallboard, metal studs, ceiling tile and grid, and other
related building materials.

Other Consolidated Information

Fourth quarter 2002 selling and administrative expenses
decreased 4 percent, or $3 million year-over-year. For the year,
selling and administrative expenses increased 12 percent versus
2001. The increase in 2002 primarily reflects the full year
impact of a bankruptcy-related employee retention program that
was introduced in the third quarter of 2001 and higher incentive
compensation associated with the attainment of profit and other
performance goals.

Capital expenditures for the fourth quarter and 12 months of
2002 were $36 million and $100 million, respectively.
Expenditures for the same periods in 2001 were $34 million and
$109 million, respectively.

For the fourth quarter, USG's Chapter 11 reorganization expenses
of $2 million reflected $4 million of legal and financial
advisory fees, partially offset by $2 million of interest income
earned by the USG companies in Chapter 11. Under AICPA Statement
of Position 90-7 (SOP 90-7), "Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code," interest income
earned on cash accumulated as a result of the Chapter 11 filing
is recorded as an offset to Chapter 11 reorganization expenses.

Interest expense for the fourth quarter and 12 months of 2002
was $4 million and $8 million, respectively. For the same
periods in 2001, interest expense was $2 million and $33
million, respectively. Under SOP 90-7, virtually all of USG's
outstanding debt is classified as liabilities subject to
compromise, and interest expense on this debt is not accrued or
recorded. Interest expense for the full year 2002 is therefore
not directly comparable to interest expense for 2001.
Contractual interest expense not accrued or recorded on pre-
petition debt totaled $18 million and $74 million for the fourth
quarter and 12 months of 2002, respectively.

As of December 31, 2002, USG had $830 million of cash, cash
equivalents and marketable securities on a consolidated basis,
up from $493 million as of December 31, 2001, and $748 million
on September 30, 2002. Some or all of the cash, along with other
assets, will be required to discharge the liabilities of USG and
its consolidated subsidiaries that are in Chapter 11, and may
not be available for distribution to equity security holders.

As of December 31, 2002, USG had $288 million of borrowing
capacity under a debtor-in-possession financing facility ("DIP
Facility"). Of this total, $272 million of borrowing capacity
was unused and $16 million supported standby letters of credit.
In January 2003, the Corporation reduced the size of the DIP
Facility to $100 million. This action was taken at the election
of the Corporation due to the level of cash and marketable
securities on hand and to reduce costs associated with the DIP
Facility. The resulting DIP Facility will be used largely to
support the issuance of standby letters of credit needed for its
business operations. The Corporation believes that cash on hand,
marketable securities and future cash available from operations
will provide sufficient liquidity to allow its businesses to
operate in the normal course without interruption for the
duration of the Chapter 11 proceedings.

Chapter 11

USG and its principal domestic subsidiaries filed voluntary
petitions for reorganization under Chapter 11 of the U.S.
Bankruptcy Code in Delaware on June 25, 2001. This action was
taken to resolve asbestos-related claims in a fair and equitable
manner, protect the long-term value of these businesses and
maintain market leadership positions.

On October 17, 2002, a hearing on proposals for case management
procedures for resolving asbestos personal injury claims was
held before the federal district judge assigned to USG's
bankruptcy case. At this time, the Court has not issued a ruling
on the matter.

For all other claims against the Debtors (including asbestos
property damage claims), the Bankruptcy Court set a bar date, or
deadline, of January 15, 2003, for filing claims. The Debtors
are currently in the process of processing and evaluating those
claims.

The Corporation is unable to predict at this time how pre-
petition creditors and equity security holders of the Debtors
will ultimately be treated in the Chapter 11 proceedings.
However, pre-petition creditors may receive less than 100
percent of the face value of their claims and the interests of
equity security holders are likely to be substantially diluted
or may be cancelled in whole or in part.

USG Corporation is a Fortune 500 company with subsidiaries that
are market leaders in their key product groups: gypsum
wallboard, joint compound and related gypsum products; cement
board; gypsum fiber panels; ceiling panels and grid; and
building products distribution. For more information about USG
Corporation, visit the USG home page at http://www.usg.com


WISER OIL: Delivers Plan to Comply with NYSE Listing Guidelines
---------------------------------------------------------------
The Wiser Oil Company (NYSE:WZR) is submitting a business plan
answering the New York Stock Exchange's requirements for
continued listing.

This effort follows a formal notice from the Exchange that Wiser
is below the Exchange's continued listing criteria of a total
market capitalization of not less than $50 million over a 30-day
trading period and stockholders' equity of not less than $50
million. At the end of the third quarter of 2002, Wiser's
stockholders' equity was less than $50 million and its average
market capitalization over the previous 30 trading days ended
December 16, 2002 (the period used by the Exchange for its
calculations) was less than $50 million.

Since the date of notification by the Exchange, the Company
believes that it has returned into compliance with the market
capitalization criteria, averaging greater than $50 million over
the past 30 days. Total market capitalization is computed using
9.4 million shares of common stock outstanding as of September
30, 2002 and assumes the mandatory conversion of its preferred
stock into 5.9 million shares of common stock on May 26, 2003,
for a total of 15.3 million outstanding shares of common stock.
The focus of the business plan is on bringing the stockholders'
equity back over $50 million.

Wiser believes its business plan will allow it to achieve the
requirements of the Exchange for stockholders' equity and
qualify it for continued listing. The Exchange requires that
Wiser be in compliance with these requirements within eighteen
months of notice from the Exchange. The Company's plan, if
accepted by the Exchange, will be reviewed quarterly for ongoing
compliance with its goals and objectives.

The notice has no impact on Wiser's day-to-day operations or
finances. Wiser recently announced new field discoveries in the
Gulf of Mexico and is in the midst of an active winter drilling
program in Canada. The company expects to fund 100% of its 2003
capital expenditure program of $32 million from cash flow.
Forecasted 2003 daily production of 69,000 million cubic feet
per day is 7% higher than 2002's average daily output.

Dallas-based Wiser Oil Company (NYSE:WZR), whose September 30,
2002 balance sheet shows a working capital deficit of about $11
million, is an independent oil and gas exploration and
production company with reserves and production along the Texas
Gulf Coast, the Gulf of Mexico, the Permian Basin of West Texas
and New Mexico, and Alberta, Canada. The Company's total proved
reserves at December 31, 2001 were 212.4 billion cubic feet
equivalent, with natural gas comprising 46% of total reserves.
Wiser's proved reserves at December 31, 2001 were 81% developed,
with approximately 63% located in the United States and 37%
located in Canada.


W.R. GRACE: Wants Nod for Curtis Bay Employee Retirement Program
----------------------------------------------------------------
The Curtis Bay complex is the W.R. Grace Debtors' largest
manufacturing facility in the United States.  A wide range of
products is manufactured at Curtis Bay for the Debtors' Davison
Chemicals businesses, including fluid cracking catalysts,
hydroprocessing catalysts, polyolefin catalysts and silica gel
products, as well as additives, catalyst supports, and other
catalyst and silica products.

At Curtis Bay, the Debtors employ approximately 710 hourly and
salaried employees, which totals approximately 40% of Davison's
United States workforce.  A union has represented the hourly
workforce at Curtis Bay since at least the 1950s.  The total
number of hourly employees currently represented by the Union is
approximately 400 or 56% of the total workforce at Curtis Bay.

The collective bargaining agreement with the Union, which
preceded the 2002 Union Agreement, was scheduled to expire on
October 12, 2002.  Therefore, to avoid the possibility of a
costly work stoppage, a new agreement to replace the expired
agreement needed to be finalized.

The Debtors' objectives regarding the negotiations with the
Union were to:

    -- enhance managerial flexibility regarding work rules,

    -- provide compensation and benefits to Union employees that
       would be equitable and competitive,

    -- maintain employee morale and acceptable labor relations
       with the Union, and

    -- avoid a costly work stoppage by the Union employees.

The Debtor sought to achieve these objectives in the most cost-
efficient manner possible while preserving their ability in the
future to change certain benefit plans and control costs with
respect to those plans, as future business circumstances might
dictate.  The Debtors believe that the 2002 Union Agreement
accomplishes all of these objectives.

The negotiations with the Union, and the implementation of the
2002 Union Agreement, constitute conducting business in the
ordinary course.  Therefore, implementation of the provisions of
the 2002 Union Agreement -- except for the Pension Amendments --
would not require court approval.

The Debtors want to secure Judge Fitzgerald's consent to fund
the Union Pension Plan in an amount necessary to implement the
Pension Amendments under the 2002 Union Agreement and the
requirements of the Internal Revenue Code.

Accordingly, the Debtors seek the Court's authority to make a
one-time, lump-sum contribution to the trust funding the W.R.
Grace & Co. Retirement Plan for Hourly Employees of Curtis Bay
in no event more than $10,000,000.

Before the beginning of the formal negotiations that ultimately
led to the 2002 Union Agreement, union representatives made it
clear to Curtis Bay management that employee benefits in
general, and the benefits under the Union Pension Plan in
particular, would be significant topics of negotiation.  The
Union took the position that:

      (1) the benefits under the Union Pension Plan were not
          equitable and competitive when compared to the pension
          benefits of other Davison unions;

      (2) the recent significant increase in retiree medical
          premiums would have a devastating impact on present
          and future Curtis Bay employees for many reasons,
          including the failure of the Union Pension Plan to
          provide benefits that would offset any portion of the
          increases in retiree medical premiums;

      (3) the Debtors had not made any contribution to the
          Union Pension Plan for many years; and

      (4) the Union had significant objections to the Debtors'
          retention of the unilateral right to change or
          amend certain benefit plans covering Union employees,
          including the retiree medical plan.

For these reasons, certain union representatives indicated that
the Debtors' failure to make concessions with respect to
employee benefits would likely result in a strike at Curtis Bay.

During the negotiations, the Debtors rejected the Union's
demands for concessions regarding the cost and design of its
retiree medical plan and any limitation affecting the Debtors'
unilateral right to amend certain employee benefit plans
covering the Union employees.  The Debtors did, however, agree
to amend the Union Pension Plan to increase benefits in a manner
that is consistent with benefits increases agreed in accordance
with a collective bargaining agreement negotiated before the
2002 Union Agreement, covering a different group of Davison
hourly employees, provided that they could secure the requisite
approval from the Court, and if necessary, the Internal Revenue
Service.

                    The Union Pension Plan

In general, the Union Pension Plan is a defined-benefit pension
plan, which satisfies the qualification requirements under the
Internal Revenue Code.  The applicable "plan year" is a calendar
year.  The Plan is funded with employer contributions.  Those
contributions, and all related earnings, are in a trust that is
tax-exempt.

As of January 1, 2002, the fair market value of the assets held
in trust to provide Plan benefits was $26,754,474; and the
"current liability" was $28,245,074.  Due primarily to the
significant decline in the stock market during 2002, as well as
making required benefit payments, as of December 31, 2002, the
fair market value of those assets amounted to $22,419,039.  The
liability under the Plan will be recalculated as of December 31,
2002, and will be complete sometime in May 2003.  As a result of
the consistently overfunded status of the Union Pension Plan in
the last decade, the Debtors have not been required to make, and
have not made, any contribution to the Plan since at least 1991.

The Plan is a so-called "flat-dollar unit benefit plan", which
provides a specific dollar amount for each year of service,
commencing at age 62, which is paid in the form of an annuity
over the life of the retired employee or in other forms of
benefit of the same actuarial value, but lower actual monthly
benefit, including an annuity over the joint lives of the
retired employee and his or her spouse.  For instance, under the
benefit formula that currently applies -- without implementation
of the Pension Amendments, an eligible employee would be
entitled to a lifetime annuity commencing at age 62 or later
equal to $38 for each year of eligible service.  Thus, an
employee with 30 years of service would be entitled to a $1,140
month annuity.

                       The Plan Amendments

The most significant aspect of the Pension Amendments is that
the monthly pension benefit for any Union Employee who retires
on or after September 28, 2002, would be increased from $38 to
$50 per year of service.  This means, for example, that an
eligible employee who retires with 30 years of service with the
Debtors, that employee's straight life annuity benefit, payable
at age 62 or thereafter would be $1,500 per month, for life.
This would be an increase of 31.6% over the benefit under the
prior formula. To implement the Pension Amendments, the Debtors
are required to make an $8,600,000 contribution not later than
September 15, 2003.

Aside from the Pension Amendments, the only other material cost
to the Debtors as a result of the 2002 Union Agreement is a
moderate wage increase.  The hourly rate of the Union Employees
is scheduled to increase by about 3.5% annually from 2002 to
2005, under that Agreement.

                      The Legal Argument

Section 401(a)(33) of the Bankruptcy Code generally prohibits
the adoption of any amendment to increase or enhance benefits
under a defined benefit pension plan -- like the Union Pension
Plan -- during the period that the employer which sponsors the
plan is a "debtor in a case under title 11, United States Code."
unless one of the exceptions provided is satisfied.  The
exception that is most relevant to the circumstances regarding
the Union Pension Plan provides that the amendments may be
adopted where "the plan, were such amendment to take effect,
would have a funded current liability percentage of 100
percent."

The Funded Exception would apply to the Pension Amendments under
the Union Pension Plan, if the Debtors make the Required
Contribution by no later than September 15, 2003.  In that case,
the Required Contribution is considered made on December 31,
2002 -- i.e., the last day of the Plan's 2002 plan year -- for
purposes of calculating the "funded current viability
percentage" under the Funded Exception, for the 2002 plan year.
The Pension Amendments would be adopted effective on or after
January 1, 2003; and, as of the adoption, the Funded Exception
would be satisfied.

                     The Required Contribution

The exact amount of the Required Contribution will be calculated
by the actuary of the Union Pension Plan, as of December 31,
2002.  That calculation will be completed in May 2003.  The
actuary currently estimates that the Required Contribution will
be approximately $8,600,000 to $9,000,000.  The Debtors will
make the Required Contribution as soon as possible after the
exact amount has been calculated, to demonstrate good faith to
the Union, in accordance with the Debtors' objective of
continuing acceptable labor relations with the Union.

At this time, the actuary of the Union Pension Plan estimates
that, in order to comply with the funding requirements, the
Debtors will not be required to make any additional
contributions to the Union Pension Plan during 2003 or 2004, if
the Required Contribution is made in a timely basis during 2003.

The Debtors believe that the implementation of the increase in
pension benefits, in accordance with the Plan Amendments, as
agreed with the Union, will contribute significantly to
maintaining:

    -- acceptable labor relations with the Union at the Debtors'
       Curtis Bay plant, and

    -- the morale of both the employees represented by the
       Union, as well as other employees.

The benefits increases under the Pension Amendments were
essential in helping to persuade the Union employees to ratify
the 2002 Union Agreement. (W.R. Grace Bankruptcy News, Issue No.
36; Bankruptcy Creditors' Service, Inc., 609/392-0900)


ZENITH NATIONAL: Narrows Net Loss to $8 Million in 4th Quarter
--------------------------------------------------------------
Zenith National Insurance Corp., (NYSE:ZNT) reported a net loss
for the fourth quarter of 2002 of $7.8 million, compared to a
net loss for the fourth quarter of 2001 of $9.4 million. Net
income for the year ended December 31, 2002 was $10.2 million,
compared to a net loss for the year ended December 31, 2001 of
$25.9 million.

Net income in 2002 includes a previously reported charge of
$19.5 million after tax, or $1.04 per share, for increased
workers' compensation loss reserves in the fourth quarter.

Gross workers' compensation premiums written increased about
49.9% and 32.9% in the three months and year ended December 31,
2002, respectively, compared to the corresponding periods of
2001. In California, gross workers' compensation premiums
written increased about 64.6% and 47.3% in the three months and
year ended December 31, 2002, respectively, compared to the
corresponding periods of 2001.

The combined ratio for the property-casualty insurance
operations was 106.5% for the year ended December 31, 2002
compared to 118.9% for the year ended December 31, 2001. The
combined ratio for the workers' compensation operations for the
year ended December 31, 2002 was 108.7% compared to 114.0% for
the year ended December 31, 2001. Accident year combined ratios
for the workers' compensation operations were 131.3%, 119.1% and
103.2% for 2000, 2001 and 2002, respectively.

Book values per share at December 31, 2002 and December 31, 2001
were $16.89 and $16.20, respectively.

Commenting on the results, Stanley R. Zax, Chairman & President
said, "We returned to profitability in 2002 with unprecedented
demand to purchase our workers' compensation policies. We
experienced continuing demand for our policies in January 2003.
Healthcare and indemnity cost increases necessitate continued
price increases which are about 21% for 2003 compared to 18% the
prior year, including 30% increases in California for 2003
compared to 27% in the prior year."

As previously reported, Standard & Poor's lowered its
counterparty credit rating on Zenith National Insurance Corp.,
to double-'B'-plus from triple-'B'-minus and its ratings on
ZNT's affiliates, Zenith Insurance Co., and ZNAT Insurance Co.,
to triple-'B'-plus from single-'A'-minus due to poor but
improving operating results in workers' compensation and large
losses in 2000 and 2001 in assumed reinsurance.


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

Issuer               Coupon   Maturity  Bid - Ask  Weekly change
------               ------   --------  ---------  -------------
Federal-Mogul         7.5%    due 2004  15.0 - 16.0      -2.0
Finova Group          7.5%    due 2009  35.5 - 37.5      +1.0
Freeport-McMoran      7.5%    due 2006  94.5 - 96.5      +0.5
Global Crossing Hldgs 9.5%    due 2009   3.5 - 4.0       -0.5
Globalstar            11.375% due 2004  7.5  - 8.5       +1.0
Lucent Technologies   6.45%   due 2029  55.0 - 57.0      +2.0
Polaroid Corporation  6.75%   due 2002   6.5 - 7.5       +1.0
Terra Industries      10.5%   due 2005  90.0 - 92.0       0.0
Westpoint Stevens     7.875%  due 2005  33.0 - 35.0      -2.0
Xerox Corporation     8.0%    due 2027  65.0 - 67.0      +1.0

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.

Each Tuesday edition of the TCR contains a list of companies
with insolvent balance sheets whose shares trade higher than $3
per share in public markets.  At first glance, this list may
look like the definitive compilation of stocks that are ideal to
sell short.  Don't be fooled.  Assets, for example, reported at
historical cost net of depreciation may understate the true
value of a firm's assets.  A company may establish reserves on
its balance sheet for liabilities that may never materialize.
The prices at which equity securities trade in public market are
determined by more than a balance sheet solvency test.

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

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

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

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

                          *********

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

Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard
Group, Inc., Washington, DC USA. Yvonne L. Metzler, Bernadette
C. de Roda, Donnabel C. Salcedo, Ronald P. Villavelez and Peter
A. Chapman, Editors.

Copyright 2003.  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 $675 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each.  For subscription information, contact Christopher
Beard at 240/629-3300.

                *** End of Transmission ***