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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

            Monday, February 17, 2003, Vol. 7, No. 33

                          Headlines

ACTERNA CORP.: Advisers Retained & Talks with Lenders Begin
ACTERNA CORP: Sells Product Line to Tollgrade for $14MM + Debts
ADVANCED TISSUE: License & Supply Pact with Biozhem Terminated
AES CORP: Re-Shapes Management Structure to Improve Performance
AES CORP: Dec. 31, 2002 Balance Sheet Upside-Down by $341 Mill.

ANC RENTAL: Seeks to Amend & Extend MBIA Notes to March 31, 2003
BAC SYNTHETIC: Fitch Ratchets Series 2000-1 Class C Rating to BB
BCE INC: Preferred Shares Rated P-2/BBB by Fitch
BETHLEHEM STEEL: ISG Denies Rumors re Post-Acquisition Job Cuts
BURLINGTON: Proposes Exclusivity Be Extended Until May 31, 2003

BURLINGTON IND.: Reports 23% Drop in 1st Quarter 2003 Net Sales
CALPINE: Closes Secondary Warranted Units Offering for C$153MM
CALPINE CORP: Reports Profitable Year-End Results
CASUAL MALE: Exiting Levi's and Dockers Outlet Store Business
CELL-LOC INC: Fiscal Second Quarter Results Show Improvement

CLARENT CORP: Completes Asset Sale to Verso Technologies Inc.
CONSECO INC: Brings-In Bankruptcy Management Co. as Claims Agent
CONSECO INC: Strategic Income Fund Unit Declares Dividend
CONSECO VARIABLE: Fitch Ups Fin'l Strength Rating to BBB from B
COTTON GINNY: Agrees to Sell Retail Assets to Continental Saxon

DIGITAL TELEPORT: Court Clears CenturyTel Bid to Acquire Assets
ENCOMPASS SERVICES: Obtains Nod to Sell Five Non-Core Assets
ENRON CORP: Unsecured Panel Wants to Recover $80 Mill. Transfers
FEDERAL-MOGUL: December 31 Net Capital Deficit Tops $1.4 Billion
FELCOR LODGING: S&P Drops Corporate Credit Rating to B+ from BB-

FLEMING COMPANIES: Shipments to Kmart Stores to End by March 8
FREESTAR TECH.: Request for Injunction against Margaux Nixed
GENTEK INC: Gets Court Okay to Implement Key Employee Programs
GERLING GLOBAL: AM Best Affirms B++ Financial Strength Ratings
GLIMCHER REALTY: Reports Improved Fourth Quarter 2002 Results

GLOBAL CROSSING: Urges Court to Say Yes to Accenture Settlement
GRAHAM PACKAGING: Posts Improved Net Sales for December Quarter
HASBRO INC: FY 2002 GAAP Net Loss Stands at $170.7 Million
HAYES LEMMERZ: Claims Classification & Treatment Under the Plan
HOLIDAY RV: Delays Form 10-K Filing & Expects Nasdaq Delisting

HOST MARRIOTT: S&P Cuts Rating to B+ on Weak Industry Conditions
HUNTLEIGH TELECOMMUNICATIONS: Brings-In James Goldman as Counsel
INTEGRATED HEALTH: Wants to Continue Employment of Professionals
IPC ACQUISITION: Credit Protection Concerns Spur Stable Outlook
JUNIPER GEN.: S&P Says Rating Unaffected by El Paso's Downgrade

KAISER ALUMINUM: Signs-Up Martin Murphy as Future Claimants' Rep
KMART CORP: Proposes Comprehensive Claims Resolution Procedures
LIONBRIDGE TECH: Roy Cowan Discloses 10% Equity Stake
LIONS GATE ENTERTAINMENT: Red Ink Continues to Flow in Q3 2003
LODGENET: TimeSquare & CIGNA Report 7.8% Equity Stake

LUMENON: Ontario Court Further Extends CCAA Stay for LILT Canada
MAGELLAN HEALTH: Inching Closer to Bankruptcy Day-by-Day
MCDERMOTT INT'L: S&P Keeps B Credit Ratings on Watch Negative
MERITAGE CORP: Prices Add-On Offering of 9.75% Senior Notes
MESA AIR GROUP: Increased Operating Costs Hurt Q1 2003 Results

METROMEDIA: Taps Steven Panagos as Chief Restructuring Officer
MJ DESIGNS: Jo-Ann Stores Closes Acquisition of 3 Store Leases
MOTO PHOTO: Plans to File Chapter 11 Plan Within Two Months
NAT'L CENTURY: Mid Atlantic, et. al, Urge Court to Dismiss Cases
NETIA HOLDINGS: Court Dismisses All Objections to Restructuring

OREGON STEEL: Soft Industry Conditions Prompt Negative Outlook
O'SULLIVAN INDUSTRIES: Net Capital Deficit Widens to $60 Million
PHOTOWORKS: Says Funds Enough to Finance Near-Term Operations
PLANVISTA: Resolves Suit with Trewit & Harrington Benefit
PLAINTREE SYSTEMS: Wins Court Approval of Proposal to Creditors

POLAROID: Wants Lease Decision Period Extended Through July 31
PRIME HOSPITALITY: S&P Watches BB Rating After Weak Q4 Earnings
PRIMUS TELECOMMS: Shareholders To Convene March 31 in Virginia
PRIMUS TELECOMMS: Dec. 31 Balance Sheet Upside-Down by $200 Mil.
QUEBECOR INC: Dec. 31 Working Capital Deficit Tops C$600 Million

QUEBECOR MEDIA: Dec. 31 Working Capital Deficit Tops C$479 Mill.
RE-CON: Receives Certificate of Full Performance from Trustee
ROWECOM: Taps Kurtzman Carson as Notice and Claims Agent
RURAL/METRO CORP: Balance Sheet Insolvency Stands at $160 Mill.
SALON MEDIA: Issues Convertible Promissory Notes to John Warnock

SATCON TECH: Seeking Prompt Capital Infusion to Fund Operations
SMTC CORP: Continuing Initiatives to Improve Balance Sheet
SOLECTRON CORP: Replaces Expiring 364-Day $250MM Credit Facility
SOLECTRON: Fitch Assigns BB+ Sr. Secured Rating to New Facility
STARBAND: Wants to Maintain Filing Exclusivity through April 26

STRUCTURED ENHANCED: Fitch Cuts Series 1999-6 Notes Rating to B-
TELESPECTRUM: Annual Stockholders' Meeting Set for March 14
TYCO INT'L: Buys Back $2.4BB Zero Coupon Convertible Debentures
TYCO INT'L: Names Naren Gursahaney VP of Operational Excellence
UNITED AUSTRALIA: Files Plan Disclosure Statement in New York

UNITED INDUSTRIES: S&P Ups Sub. Debt Rating to B- from CCC+
UPMC HEALTH: A.M. Best Affirms B++ Financial Strength Ratings
US AIRWAYS: Argenbright Urges Court to Lift Stay to Nix Pacts
US STEEL: Fitch Rates Convertible Preferred Shares at B+
WEIRTON STEEL: Releases Details of Tentative Contract Agreement

WELLMAN INC: Issuing Up to $125M of Preferreds to Warburg Pincus
WORLD HEART: Launches New HeartSaverVAD Implantable Heart Pump

* BOND PRICING: For the week of February 17 - 21, 2003

                          *********

ACTERNA CORP.: Advisers Retained & Talks with Lenders Begin
-----------------------------------------------------------
The global economic downturn has adversely impacted Acterna
Corporation's communications testing and other businesses.
Product demand has decreased, average selling prices have
eroded, and Acterna has excess manufacturing capacity.

In light of the continued downturn and its negative impact on
the Company's results of operations and cash flows, Acterna sees
that it has to reduce its outstanding long-term debt to remain
viable on a long-term basis.  To do that, the Company's started
talking to its senior lender group (representing the Company's
largest creditors) to restructure its existing long-term debt
obligations.

                     Advisers on Board

Acterna says it's engaged legal and financial advisors
experienced in restructurings and has appointed a chief
restructuring officer to augment its management team.

FTI Policano & Manzo is advising JPMorgan Chase Bank, the
Administrative Agent for the consortium of lenders under a
Credit Agreement dated as of May 23, 2000 (as amended three
times to date).

Clayton, Dubilier & Rice is intimately involved in the
restructuring talks.  CD&R is represented by Paul S. Bird, Esq.,
at Debevoise & Plimpton.

Houlihan, Lokey, Howard & Zukin Financial Advisers, Inc., was
called on the scene in August 2002 to provide financial advisory
and appraisal services.

The form that the restructuring is likely to take has not yet
been determined, Acterna says, but could involve an out-of-court
restructuring, an exchange offer or a so-called "prepackaged" or
"prearranged" Chapter 11 case in order to implement the debt
reduction. The discussions with the Company's senior lenders
have not progressed to the point where it is possible for the
Company to predict the terms or timing of any such restructuring
and there can be no assurance that any such restructuring will
be successfully concluded.  However, based on information
currently available to the Company, it is likely that the
holders of its existing common stock will not receive any
recovery under any circumstances.  Not surprising: Acterna's
balance sheet at Dec. 31, 2002, shows $497 million in assets and
nearly $1.3 billion in liabilities.

As of December 31, 2002, the Company had liquidity of
approximately $97 million, which includes cash and cash
equivalents of $88 million and available credit under its
Revolving Credit Facility of $9 million.

                     Airshow Sale and
            9.75% Senior Sub Debt Tender Offer
                        Completed

On August 9, 2002, the Company consummated the sale of its
Airshow business and received net proceeds of approximately
$157.4 million.  The Company used $153.5 million of these
proceeds to repay a portion of its outstanding debt, including
(i) repayment of $128.5 million of Senior Secured Credit
Facility term loan borrowings and (ii) transaction costs of $1.6
million and for other corporate purposes. Concurrently with the
consummation of the sale of Airshow, the Company retired $106.3
million in principal amount of its 9.75% Senior Subordinated
Notes due 2008 for cash consideration of $220 for each $1000
principal amount of notes tendered, and all accrued interest due
thereon. The retirement of the Senior Subordinated Notes was
made in connection with the June 24, 2002 cash tender offers, as
amended.

                   Bank Loan Amendments

During July 2002, the Company reached an agreement with its
lenders regarding amendments to its Senior Secured Credit
Facility.  Under the amendments, which became effective on
August 7, 2002, the lenders, among other things:

      (1) approved the sale of the Company's Airshow
          business to Rockwell Collins,

      (2) permitted the Company to use up to $24 million to
          purchase a portion of its 9.75% Senior
          Subordinated Notes due 2008 pursuant to the
          combined tender offers; and

      (3) agreed to certain changes to financial covenants
          in the Revolving Credit Facility.

In connection with the covenant tinkering, the minimum liquidity
requirement of $25,000,000 at the end of each quarter remains
the same; however, the minimum cumulative EBITDA covenants (as
defined in the Senior Secured Credit Facility) have been
modified to require that EBITDA not fall below:

      Minimum EBITDA   Testing Period
      --------------   --------------
       ($40,000,000)   two quarters ended September 2002
       ($17,000,000)   three quarters ended December 2002
                 $0    four quarters ending March 2003

If the Company pays an additional $100 million of term debt on
or prior to June 30, 2003, the minimum cumulative EBITDA
covenant will be modified to:

      Minimum EBITDA   Testing Period
      --------------   --------------
         $20,000,000   four quarters ending June 2003
         $30,000,000   four quarters ending September 2003
         $40,000,000   four quarters ending December 2003
         $50,000,000   four quarters ending March 2004

If the Company does not repay at least $100 million of term debt
prior to June 2003, the Company would then be subject, until
2007, to more restrictive financial covenants regarding its
interest coverage ratio, defined as the ratio of the Company's
EBITDA to its interest expense, and its leverage ratio, defined
as the ratio of the Company's total indebtedness to its EBITDA.
During this period, if the Company does not repay at least $100
million as described above, the Company's interest coverage
ratio would not be permitted to be less than 2 to 1 and its
leverage ratio would not be permitted to exceed 4.5 to 1.

As of December 31, 2002, the Company was in compliance with its
financial covenants.  The financial covenants the Company is
subject to are defined per the terms of the Senior Secured
Credit Agreement, as amended.  Liquidity is defined as cash or
cash equivalents, plus available borrowings under the Revolving
Credit Facility as of the balance sheet date. EBITDA is defined
as Earnings Before Interest, Taxes, Depreciation and
Amortization for the period presented.  EBITDA can be modified
for certain items as defined in the credit agreement.


ACTERNA CORP: Sells Product Line to Tollgrade for $14MM + Debts
---------------------------------------------------------------
Acterna (OTCBB:ACTR), the world's leading provider of cable
network test and management solutions, announced the sale of its
Status and Performance Monitoring product line to Tollgrade
Communications (Nasdaq:TLGD).

Tollgrade acquired the product line, used for status monitoring
of cable networks, for $14.3 million in cash and the assumption
of certain liabilities. The agreement includes a contingent
payment of up to $2.4 million, payable to Acterna in the form of
an earn-out based on 2003 performance targets.

"This transaction advances Acterna's strategy to focus our
investment and resources on the company's core communications
test strengths," said Dave Holly, general manager of Acterna's
Cable Networks Division. "Our growth in the cable market will be
driven by consistent advancements of our test tools and the
integration of workforce management solutions through Acterna's
TechSync(TM) portfolio, designed to reduce costs associated with
installing, troubleshooting and managing cable services such as
high-speed Internet access, video-on-demand and telephony."

Added Holly, "Tollgrade is an excellent strategic fit for the
Status and Performance Monitoring unit and its employees. We are
pleased with a transaction that we believe creates new growth
opportunities for the business."

Acterna, which will transition 47 employees to Tollgrade as part
of the transaction, continues engineering, marketing and service
operations at its Bradenton, Florida and Indianapolis Cable
Network Division offices.

Acterna draws from its innovative set of instruments, systems,
software and services to create TechSync solutions increasing
workforce efficiencies in the cable market.

The award-winning DSAM-2500 is a lightweight, handheld meter
that was recently enhanced to support web-based workforce
automation functionality, enabling network operators to
integrate unlimited applications in an interactive environment
for technicians.

Acterna also recently introduced its FDM-100 Field Data
Management software, a client application providing an effective
approach for linking and managing DSAM-2500 test instruments and
results.

Acterna is the world's leading provider of integrated network
test and management solutions for global cable networks.
Acterna's cable networks portfolio enables cable operators to
meet demand and enhance the reliability and performance of their
networks and services.

Deployed around the world, Acterna's cable systems, software and
instruments comprise the industry's broadest set of products
that support cable operators through the network life cycle,
from building the network to deploying and managing advanced
services.

Acterna is the world's largest provider of test and management
solutions for optical transport, access and cable networks, and
the second largest communications test company overall. Focused
entirely on providing equipment, software, systems and services,
Acterna helps customers develop, install, manufacture and
maintain their optical transport, access, cable, data/IP and
wireless networks.

The company serves customers in more than 80 countries. Acterna
is a subsidiary of Acterna Corporation. Information about
Acterna can be found on the Web at http://www.acterna.com


ADVANCED TISSUE: License & Supply Pact with Biozhem Terminated
--------------------------------------------------------------
Biozhem Cosmeceuticals, Inc. (OTCBB:BZHME), a developer and
marketer of advanced skin care products, announced that its
License and Supply Agreement dated September 25, 2000 (together
with the amendment dated January 1, 2002) with Advanced Tissue
Sciences, Inc., (OTCBB:ATISQ) was terminated.

On January 23, 2003 Biozhem received a letter notifying it of
ATS's intent to terminate the Agreement due to Biozhem's failure
to make license threshold and royalty payments. Thane
International Inc., (OTCBB:THAN), was contractually obligated to
make the payments to ATS on behalf of Biozhem pursuant to a
Management Services Agreement dated April 10, 2002 between Thane
and Biozhem whereby Thane had taken over financial, development
and marketing responsibilities for the RevitalCel System of
products.

Biozhem filed for arbitration against Thane in September 2002,
and Biozhem is currently pursuing its remedies through the
arbitration process expected to occur in mid-March 2003.
Biozhem's counsel made Thane aware of the ATS letter and its
responsibility to cure the default within ten days. Thane failed
to cure this breach in the allowed time period and, as a result,
the Agreement has been terminated.

Advanced Tissue Sciences, Inc., is engaged in the development
and manufacture of human-based tissue products for tissue repair
and transplantation. The Company filed for chapter 11
reorganization under the federal bankruptcy laws on October 10,
2002 (Bankr. S.D. Calif. Case No. 02-09988). Craig H. Millet,
Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP
represent the Company in its reorganization proceedings.


AES CORP: Re-Shapes Management Structure to Improve Performance
---------------------------------------------------------------
The AES Corporation (NYSE: AES) announced organizational changes
intended to improve the Company's overall business performance.

The new management structure aligns reporting responsibilities
along two business lines as opposed to the previous structure
that was based on geographic regions. The new business lines for
organizational purposes are Electric Generation and Integrated
Utilities, each to be headed by one of two Chief Operating
Officers in the new organizational structure.

Effectively immediately, John Ruggirello, Executive Vice
President, becomes Chief Operating Officer for Generation. In
addition, AES has launched a global search to fill the new
position of Executive Vice President and Chief Operating Officer
for Integrated Utilities. Both COOs will report to Paul
Hanrahan, President and Chief Executive Officer. Mr. Hanrahan
will serve as acting Chief Operating Officer for Integrated
Utilities until the search is completed.

AES also announced that Joseph C. Brandt has been appointed Vice
President and Chief Restructuring Officer, and will report
directly to Mr. Hanrahan.  Mr. Brandt has been responsible for
the restructuring of various troubled AES businesses since mid-
2002, and will continue with that responsibility.

"In the near term, we are focused on growing earnings and
shareholder value through operational excellence and performance
improvement," said Mr. Hanrahan. "This new management structure
is the best way for us to enhance performance, since the
performance issues in each business line cut across all
geographic boundaries. Although we made significant progress in
2002 as we grappled with the many challenges facing our
industry, we still have much room for improvement. That will be
our main focus in 2003 and beyond."

Mr. Hanrahan noted that as AES continues to expand its
disclosure of financial information to investors, the company
will continue to report financial information according to four
business areas (Contract Generation, Competitive Supply, Growth
Distribution Businesses and Large Utilities) and five geographic
regions (North America, Caribbean, South America, Europe and
Asia).

In addition, AES announced that J. Stuart Ryan, Executive Vice
President and Chief Operating Officer for North America, will be
leaving the Company effective February 28, 2003 to pursue other
opportunities.

AES is a leading global power company comprised of contract
generation, competitive supply, large utilities and growth
distribution businesses.

The company's generating assets include interests in 176
facilities totaling over 60 gigawatts of capacity, in 33
countries. AES's electricity distribution network sells 108,000
gigawatt hours per year to over 16 million end-use customers.

For more general information visit http://www.aes.com

As reported in Troubled Company Reporter's January 30, 2003
edition, Fitch Ratings assigned a 'BB' rating to The AES Corp.'s
recently completed secured debt refinancing comprised of a
multi-tranche $1.62 billion senior secured credit facility and
$258 million of secured notes. Fitch also affirmed the existing
ratings of AES and those of its subsidiaries, IPALCO Enterprises
and Indianapolis Power and Light. AES, IPALCO, and IP&L's
ratings are removed from Rating Watch Negative. The Rating
Outlook is Negative. CILCORP and Central Illinois Light
Company's ratings remain on Rating Watch Evolving pending
completion of their committed sale to Ameren Corporation. The
CILCORP sale is now awaiting final SEC approval.

The newly assigned rating of AES's secured debt reflects the
strong asset coverage, net of AES subsidiaries' individual
debts, afforded by the security package and the stringent terms
and conditions that govern the bank credit agreement and secured
notes indenture. The ratings of the various secured debt
instruments do not differentiate among the various tranches that
enjoy varying baskets of collateral since in Fitch's view all
have reasonably strong recovery prospects. All secured
debtholders benefit from a fixed amortization schedule that
requires AES to pay down 50% of the secured credit facility and
40% of the secured notes by November 2004. They are also
advantaged by a cash sweep mechanism that requires AES to use a
significant portion of proceeds from asset sales to pay down the
secured debt. Fitch projects a breakeven liquidity scenario in
which AES meets the fixed amortization schedule with proceeds
from the CILCORP sale, a slightly reduced forecast of parent
operating cash flow relative to that of 2002, and a much reduced
capital investment schedule. Any additional funding, either via
asset sales or access to capital markets, would improve AES's
liquidity position and allow the company to pay down debt and
strengthen its balance sheet.

AES Corporation's 10.250% bonds due 2006 (AES06USR1) are trading
at about 46 cents-on-the-dollar, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AES06USR1for
real-time bond pricing.


AES CORP: Dec. 31, 2002 Balance Sheet Upside-Down by $341 Mill.
---------------------------------------------------------------
The AES Corporation (NYSE: AES) announced that net income from
recurring operations for 2002 was $421 million before certain
charges. Net loss for the year, after all charges, was $3.509
billion. For the year, revenues increased 13% to $8.6 billion.

For the quarter ended December 31, 2002, net income from
recurring operations was $15 million. Net loss for the quarter,
after all charges, was $2.766 billion. Parent Operating Cash
Flow for 2002 was $1.095 billion.

At December 31, 2002, the Company's balance sheet shows a
working capital deficit of about $2 billion, and a total
shareholders' equity deficit of about $341 million.

Paul Hanrahan, President and Chief Executive Officer, commented,
"AES is on the road to recovery. Despite an extremely
challenging year for us and the entire sector, I am proud of the
overall progress AES made in 2002. As a result of our efforts
last year, we have significantly improved our liquidity
situation. Looking ahead to 2003, we are focused on
substantially improving the performance of our businesses across
the company to provide value to our shareholders and to position
AES for long-term growth."

Barry Sharp, Chief Financial Officer, stated, "With our
continued emphasis on performance improvements and cash flow, we
achieved POCF of $1.095 billion for 2002. Combined with our
successful corporate refinancing at the end of 2002 and proceeds
from our asset sales program, we now have liquidity exceeding
$500 million and a flexible amortization schedule for continuing
to reduce debt at the parent company level over the next several
years. Looking forward to 2003, we expect consolidated net cash
from our subsidiary operating activities of approximately $2.2
billion - which will enable cash distributions to the parent as
POCF to continue at an estimated $1.0 billion during 2003,
further supporting our continued progress toward a stronger
balance sheet."

AES currently expects its earnings per share for 2003 before
discontinued operations, calculated in accordance with generally
accepted accounting principles, to be $0.50 per share. There are
a number of market factors, including foreign exchange rates,
commodity prices and interest rates, as well as other
significant business factors that could make our actual results
vary from this expectation. This expectation excludes the impact
of adopting new accounting principles and excludes the effects
of any future business acquisitions or dispositions.

AES is a leading global power company comprised of contract
generation, competitive supply, large utilities and growth
distribution businesses.

The company's generating assets include interests in 176
facilities totaling over 60 gigawatts of capacity, in 33
countries. AES's electricity distribution network sells 108,000
gigawatt hours per year to over 16 million end-use customers.

For more general information http://www.aes.com


ANC RENTAL: Seeks to Amend & Extend MBIA Notes to March 31, 2003
----------------------------------------------------------------
ANC Rental Corporation, and its debtor-affiliates seek the
Court's authority to enter into certain amendments of the Second
Amended and Restated Financing Agreement.  The amendment
provides for the continued release of funds from certain
collection accounts to certain non-debtor special purpose
entities through and including March 31, 2003, in the maximum
revolving amount not to exceed $2,300,000,000, with an automatic
renewal to April 18, 2003 subject to these conditions:

    A. On or prior to March 31, 2003, or on a later date as MBIA
       may elect, the Debtors have closed a DIP financing
       facility amounting to at least $60,000,000;

    B. The Debtors have demonstrated to MBIA's satisfaction that
       ARG Funding Corp. will have sufficient cash on hand to
       make the Controlled Amortization Payment on the ARG
       Funding Corp. Series 2000-4 Notes due on April 21, 2003;
       and

    C. ANC has demonstrated to MBIA's satisfaction that during
       the week beginning April 20, 2003, the Debtors will have
       sufficient cash on hand to make all scheduled "Fleet
       Financing and Lease Payments" due during that week, on
       the same terms and conditions as set forth in the Third
       Order Authorizing Debtors to Lease Automobiles and
       Provide Protection in Connection with the Master Lease
       Agreements, dated November 5, 2002, including with
       respect to:

       1. the payment of the $400,000 monthly administrative fee
          in connection with the Amendment;

       2. certain protections relating to the Amendment; and

       3. the Debtors' ability to enter into other agreements
          and documents necessary to consummate the transaction.

The Amendment will allow, subject to the other terms and
conditions of the New Vehicles Transaction Documents, these non-
debtor special purpose entities to finance the purchase of the
vehicles that, in turn, are leased to the Debtors for use in
their daily rental operations.

The monthly administrative fee will be paid on the 13th of each
month.  The funds received by the Lessor SPEs pursuant to the
Amendment will be used to fund the acquisition of the Debtors'
vehicle fleet.  The MBIA Notes are secured by a first priority
lien on the vehicles purchased with the proceeds of the MBIA
Notes and all other collateral relating to these vehicles.

Mark J. Packel, Esq., at Blank Rome LLP, in Wilmington,
Delaware, contends that the Amendment of the Second Amended and
Restated Financing Agreement is necessary to induce MBIA to
enter into the transaction and to allow the Lessor SPEs to
finance the purchase of vehicles that are subsequently leased to
the Debtors.  In addition, the Debtors have investigated the
possibility of obtaining fleet financing from alternative
sources and have determined that the alternative financing
arrangements would be on less advantageous terms than the
financing sought in this Motion.

Mr. Packel asserts that the amendment is critical to the
Debtors' ability to obtain new vehicles and to their
reorganization efforts.  Absent authorization and empowerment to
consummate the Amendment, the Debtors' ability to serve their
customers and adequately maintain their business operations will
be materially impaired.  The Debtors believe that the Amendment
is reasonable and appropriate under the circumstances. (ANC
Rental Bankruptcy News, Issue No. 27; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


BAC SYNTHETIC: Fitch Ratchets Series 2000-1 Class C Rating to BB
----------------------------------------------------------------
Fitch Ratings has downgraded two classes of notes and affirmed
three classes of notes issued by BAC Synthetic CLO 2000-1
Limited, a synthetic cash flow CDO established by Bank of
America to provide credit protection on a $10 billion portfolio
of investment grade, corporate debt obligations.

     The following securities have been downgraded:

-- $250,000,000 Class B Floating Rate Notes to 'A' from 'A+';

-- $100,000,000 Class C Floating Rate Notes to 'BB' from 'BB+'.

The following securities have been affirmed:

-- $265,000,000 Class A Floating Rate Notes 'AAA';

-- $100,000,000 Class D Floating Rate Notes 'CC';

-- $25,000,000 Class E Floating Rate Notes 'C'.

Fitch's rating action reflects further credit deterioration and
the notes' exposure to Solutia, Inc., which was recently called
a credit event. This will result in higher than expected credit
protection payments under the credit default swap agreement with
Bank of America CLO Corporation II, and a diminished level of
credit enhancement for the class B and C notes.

Fitch further notes the possible occurrence of an optional early
termination. Under the terms of the credit default swap Bank of
America can elect to terminate the transaction beginning on
October 14, 2003 or semi-annually thereafter. If Bank of America
does not exercise the termination option it is required to
provide an additional $60 million of first-loss protection which
would likely have a positive impact on the rating of the notes.
If an Optional Termination were to occur on October 14, 2003,
Bank of America would not provide the additional first-loss
protection which would likely result in losses to some of the
noteholders.

Fitch will continue to monitor the performance of this
transaction and Bank of America's decision on whether or not to
elect an early termination.


BCE INC: Preferred Shares Rated P-2/BBB by Fitch
------------------------------------------------
Standard & Poor's Ratings Services assigned its 'P-2' Canadian
national scale and its 'BBB' global scale preferred share
ratings to telecommunications holding company BCE's C$150
million (six million units) cumulative redeemable first
preferred shares series AC. Proceeds will be used to repay
preferred shares to be redeemed by BCE. Should BCE exercise its
option to purchase for cancellation its series U cumulative
redeemable first preferred shares and issue an additional C$350
million (14 million units) series AC shares, the additional
shares would be assigned preliminary 'P-2' Canadian national
scale and 'BBB' global scale preferred share ratings.

At the same time, ratings outstanding on BCE, including the 'A'
long-term corporate credit rating, were affirmed. The outlook is
stable.

"The ratings reflect the leading market position of BCE's
wholly-owned subsidiary Bell Canada, which is the largest
communications company in Canada; the expectation that Bell
Canada will continue to be the single largest contributor to
revenue and EBITDA; and BCE's commitment to maintaining a
balanced capital structure," said Standard & Poor's credit
analyst Joe Morin.

The ratings are underpinned by Bell's large local-access and
wireless customer bases, growth in wireless and consumer DSL
revenues, and focus on prudent cost management that is expected
to result in BCE achieving discretionary free cash flow
breakeven in the next 12 months on a consolidated basis.

The ratings also consider marginal erosion in local revenues,
continued pricing pressures in long distance, and general
economic uncertainty resulting in weaker business demand for
data services. BCE's recent announcement that it has regained
full control in sympatico.ca and reduced its ownership in Bell
Globemedia is consistent with the company's strategy of focusing
on its principal telecommunications assets, and is not expected
to have a material impact on consolidated results.

Revenues and EBITDA are expected to be flat to marginally higher
in 2003. Improvements through tighter cost management and
productivity enhancements are expected to offset the impact of
slowing top-line revenue growth in the near term to ensure that
credit protection measures remain in line with the rating.

As of September 30, 2002, BCE reported a working capital deficit
of about $247 million.


BETHLEHEM STEEL: ISG Denies Rumors re Post-Acquisition Job Cuts
----------------------------------------------------------------
Wilbur Ross, Chairman of International Steel Group says, "ISG
and Union to Decide Post-Acquisition Staffing Levels at
Bethlehem Steel -- Not CEO Miller Bethlehem Steel Corp.  CEO
Steve Miller is widely quoted [Thurs]day as saying that 3,000 to
4,000 jobs will be cut when International Steel Group acquires
Bethlehem.  Mr. Miller will play no role in establishing manning
levels at the new company. ISG and the United Steel Workers of
America are in productive discussions regarding a program
whereby ISG will offer economic incentives for workers to take
early retirement.

There is no question that there will be more jobs at Bethlehem
as part of ISG than there would be if Bethlehem tried to
struggle along on its own.  I request that Mr. Miller retract
his statement."


BURLINGTON: Proposes Exclusivity Be Extended Until May 31, 2003
---------------------------------------------------------------
Marc T. Foster, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, relates that since the Petition Date, it
has been Burlington Industries, Inc. and its debtor-affiliates'
desire and collective goal to emerge from Chapter 11 as quickly
as possible with a streamlined business model that will enable
them to be competitive and successful in today's market.

The Debtors have aggressively pursued their restructuring goals.
The Debtors outline what they've accomplished to date:

A. Business Plan

    The Debtors created significant cash flows for the Debtors'
    estates through the implementation of the initial Business
    Plan that was developed earlier in these Chapter 11 cases.
    The Debtors continue to exceed the goals set by the initial
    Business Plan, including:

   (a) the early paydown of the Debtors' initial $96,000,000
       borrowings under their postpetition credit agreement
       - the "DIP Facility";

   (b) the early paydown of the Debtors' prepetition credit
       agreement by approximately $46,000,000;

   (c) the creation of significant excess cash balances in
       excess of the goals set by the initial Business Plan -
       $91,000,000 as of December 31, 2002, which is
       approximately $57,000,000 more than anticipated including
       (b) above; and

   (d) improving the operating performance of the Debtors'
       businesses with EBITDA results year-to-date well in
       excess of the goals set by the initial Business Plan.

B. Asset Sales

    The Debtors have continued in earnest the process of
    disposing of certain non-core assets pursuant to either the
    Court's order authorizing certain miscellaneous asset sale
    procedures or individual orders of the Court under Section
    363 of the Bankruptcy Code.  The Debtors have completed the
    sale of:

   (a) substantially all of the assets relating to their bedding
       and window consumer products businesses to Springs
       Industries, Inc.;

   (b) certain equipment of Debtor Burlington Fabrics, Inc.
       to Gibbs International, Inc.;

   (c) certain of their assets relating to their residential
       upholstery fabrics business to Tietex International, Ltd;

   (d) certain of their Mexican assets to Textiles Morelos;

   (e) a trucking terminal located in Gaston County, North
       Carolina to USF Dugan, Inc.;

   (f) a warehouse facility in Statesville, North Carolina to
       Badger Sportswear, Inc.;

   (g) a vacant textile plan in Denton, North Carolina to Magna
       Fabrics, Inc.; and

   (h) various equipment and certain de minimis assets.

C. Intercompany Transaction

    The Debtors have obtained Court approval of, and
    consummated, an intercompany transaction for the sale of
    substantially all of Burlington Fabrics, Inc.'s assets to
    Debtor Burlington Investments II, Inc. in exchange for
    approximately $4,500,000. The transactions approved by the
    BFI Sale Motion may result in the collection of over
    $35,000,000 in tax refunds by Debtor Burlington Industries,
    Inc., with the potential for an additional tax refund or
    refunds in excess of $60,000,000 and a significant tax loss
    carryforward asset for fiscal year 2003 and beyond.

D. Contract and Asset Analysis

    The Debtors commenced an exhaustive review of their
    thousands of executory contracts and unexpired leases to
    determine:

    (a) which were beneficial or necessary to the Debtors'
        reorganization efforts; and

    (b) which were burdensome or no longer needed by the Debtors
        under the Business Plan Based on the results of this
        review, the Debtors have sought and obtained Court
        approval to assume, assume and assign or reject a
        variety of executory contracts and unexpired leases and
        are preparing to take appropriate action on the majority
        of their remaining executory contracts and unexpired
        leases under the Plan.

E. IRS Settlement

    The Debtors have resolved the Internal Revenue Services'
    claims against the Debtors' estates for tax years 1995, 1996
    and 1997, which totaled approximately $20,781,530.  The
    Debtors obtained Court approval of a settlement with the
    IRS, pursuant to which the Debtors agreed to pay and the IRS
    agreed to accept $53,482, plus related interest, in full
    satisfaction of the IRS' tax claims for the tax years
    mentioned.

F. Claims Process

    On May 8, 2002, the Debtors obtained Court authority to
    establish the general claims and other bar dates for filing
    proofs of claim against the Debtors' estates.  The Debtors
    subsequently set the general Bar Date as July 22, 2002 and
    mailed notices to that effect, along with proof of claim
    forms, to approximately 52,000 creditors and other known
    parties-in-interest.  The Debtors have taken substantial
    steps towards analyzing and reconciling the more than 3,700
    claims that were filed against or scheduled by the Debtors.

G. Amendment to Credit Facility

    The Debtors negotiated and obtained Court approval of a
    Third Amendment to the DIP Facility.  The Third Amendment to
    the DIP Facility increased the amount of adequate protection
    provided to the Debtors' prepetition lenders and, more
    importantly, increased the Debtors' asset sale basket, i.e.,
    the limitation imposed upon asset dispositions by the
    Debtors by an additional $31,300,000.

    Entry into the amendment was necessary to insure that the
    Debtors have the continued ability to sell, and thereby
    maximize the value of their non-core assets, which will help
    the Debtors improve their liquidity and cash position.

H. Adversary Proceedings and Other Litigation

    The Debtors have continued to prosecute claims or adversary
    proceedings relating to the turnover of estate property or
    automatic stay issues against numerous parties.  Through
    these actions, the Debtors seek to recapture or preserve
    value for their respective estates.

I. Other Chapter 11 Matters

    The Debtors have sought and obtained Court authority to take
    a variety of other actions that the Debtors believe to be of
    substantial benefit to their estates and creditors,
    including the divestiture of significant liabilities
    associated with one of their Mexican joint ventures
    established to build and operate a denim garment and laundry
    processing facility.

In connection with the foregoing activities, the Debtors have
focused on implementing the Business Plan and have made great
strides on numerous components of the Business Plan, including:

    (a) unifying the Debtors' sales and marketing force so that
        all apparel products are marketed and sold under one
        organization known as Burlington WorldWide;

    (b) expanding the product offerings of the Debtors'
        manufacturing base with sourced products from Burlington
        WorldWide's international mill partners to enable the
        Debtors to offer a broader range of fabrics to their
        customers and deliver the products to points of assembly
        worldwide;

    (c) exiting, by sale to third parties, the consumer products
        portions of them interior furnishings business;

    (d) selling non-core businesses and excess assets,
        generating net cash proceeds in excess of $55 million;

    (e) continuing to create value for the estate through the
        ongoing development and improvement in the Debtors'
        investment in their joint venture technology business,
        Nano-Tex, LLC; and

    (f) reducing the Debtors' domestic manufacturing base for
        apparel fabrics through the closure or sale of eight of
        the Debtors' locations, including Sheffield, North
        Carolina; Mount Holly, North Carolina; Stonewall,
        Mississippi; Kinderton, Virginia; Halifax, Virginia;
        Clarksville, Virginia; Aguascalientes, Mexico; and
        Acambaro, Mexico.

These activities resulted in a significantly lower investment in
working capital, improved cash flow for the Debtors and the
elimination of significant excess manufacturing capacity and
related losses.

Moreover, and perhaps most importantly, Mr. Foster emphasizes,
the Debtors have worked diligently with their advisors to
analyze their various exit strategies and develop a Plan that
will incorporate the Business Plan and facilitate the Debtors'
emergence from Chapter 11.

These efforts intensified during the Second Extended Period, as
the Debtors and their advisors aggressively pursued those exit
strategies that would maximize value for the Debtors' estates
and continued discussions with the Debtors' key creditor
constituencies regarding the Debtors' restructuring
alternatives.

As part of these efforts, the Debtors and their advisors have
devoted substantial time to:

    (a) analyzing various exit strategies and potential issues
        relating thereto, including the tax and corporate
        governance implications of such strategies;

    (b) maintaining an open dialogue with the Creditors'
        Committee and the Debtors' prepetition lenders regarding
        the Debtors' potential exit strategies, the Debtors'
        progress on the Plan and the respective constituencies'
        views regarding restructuring alternatives; and

    (c) preparing initial drafts of the Plan and the related
        disclosure statement.

Mr. Foster reveals that the Debtors have made substantial
progress on the Plan and are working to finalize and file the
Plan as soon as reasonably practicable.

Accordingly, the Debtors need additional time to complete their
analysis and pursuit of their restructuring alternatives, make a
final determination regarding their ultimate exit strategy,
review this strategy with their key creditor constituencies and
finalize the terms of the Plan.

The Debtors ask the Court to extend for the third time the
Exclusive Filing Period to May 31, 2003 and the Exclusive
Solicitation Period to July 31, 2003 to afford the Debtors the
exclusive opportunity to continue their restructuring efforts
and preparation of a plan or plan of reorganization in these
Chapter 11 cases.

Mr. Foster asserts that an extension is warranted on these
grounds for relief:

A. The Requested Extension of the Exclusive Periods is Justified
    by the Size and Complexity of the Debtors' Chapter 11 Cases

    The Debtors together constitute a large, extremely complex
    organization.  In fact, Mr. Foster asserts, the Burlington
    Companies are one the world's leading developers, marketers
    and manufacturers of soft goods used in a wide variety of
    apparel and interior furnishings.

    Through these Chapter 11 cases, the Debtors are undertaking
    the difficult and complex task of remaining one of the
    world's leading textile companies, while reducing their
    overhead and operating costs and radically changing their
    business model by extending their product sourcing skills to
    a global network, all in hopes of maximizing the recovery of
    their estates.

    Mr. Foster maintains that the size and complexity of the
    Debtors' business, corporate structure and financing
    agreements compel the requested extension of the Exclusive
    Period.  Indeed, several issues concerning the impact of the
    Debtors' various exit strategies on the Debtors' business,
    capital structure and executory contracts and unexpired
    leases must be addressed before any Plan may be finalized
    and filed with the Court.

    The Debtors believe that the next four months will be
    extremely productive, will continue to improve the results
    for creditors in these Chapter 11 cases and will be very
    demanding on the Debtors and the Debtors' advisors based on
    the need to accomplish these tasks:

    (a) prepare and obtain approval of a disclosure statement;

    (b) negotiate, finalize and confirm any proposed Plan;

    (c) continue discussions with their key creditor
        constituencies regarding the Plan;

    (d) continue to close and liquidate certain facilities and
        other assets;

    (e) prosecute claims objections; and

    (f) continue to manage the day-to-day operations of the
        Debtors' businesses.

B. The Debtors' Progress in These Cases Warrants an Extension of
    the Exclusive Periods

    The Debtors have made substantial progress in addressing
    certain of the major issues facing their estates as of the
    Petition Date, Mr. Foster reminds the Court.

    The Debtors' progress on these critical issues to date
    justifies the requested extension of the Exclusive Periods,
    asserts Mr. Foster.

C. The Requested Extension of the Exclusive Periods Will Not
    Harm the Debtors' Creditors or Other Parties-in-Interest

    Accordingly, the relief requested will not result in a
    delay of the plan process; rather, it will simply permit the
    process to move forward in an orderly fashion.

In light of the foregoing factors, Mr. Foster insists, the
Debtors' request for an additional four-month extension is
relatively modest.

The Court will convene a hearing on February 27, 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. (Burlington Bankruptcy News,
Issue No. 25; Bankruptcy Creditors' Service, Inc., 609/392-0900)


BURLINGTON IND.: Reports 23% Drop in 1st Quarter 2003 Net Sales
---------------------------------------------------------------
Burlington Industries Inc.'s net sales for the first quarter of
the 2003 fiscal year were $189.7 million, 22.9% lower than the
$246.2 million recorded for the first quarter of the 2002 fiscal
year, partially due to planned volume reductions resulting from
restructuring plans.  Export sales totaled $29.8 million and
$32.3 million in the fiscal 2003 and 2002 periods, respectively.

Net sales for the Apparel Fabrics segment for the first quarter
of the 2003 fiscal year were $93.5 million,  23.0% lower than
the $121.5 million recorded in the first quarter of the 2002
fiscal year.  This decrease  was due primarily to 25.2% lower
volume, primarily due, as that of above, to planned reductions
resulting from restructuring  plans, offset by 2.2% higher
selling prices and product mix.

Net sales of products for interior furnishings markets for the
first quarter of the 2003 fiscal year were $41.1 million, 38.6%
lower than the $66.9 million recorded in the first quarter of
the 2002 fiscal year.  Excluding $21.6 million sales reduction
due to the sale of the consumer products businesses, net sales
of the interior furnishings segment were 14.0% lower than in the
prior year.  This decrease was primarily due to 14.6% lower
volume, offset by 0.6% higher selling prices and product mix.

Net sales for the Carpet segment for the first quarter of the
2003 fiscal year were $55.6 million, 3.1% lower than the $57.4
million recorded in the first quarter of the 2002 fiscal year.
This decrease was primarily due to 4.7% lower volume, partially
offset by 1.6% higher selling prices and product mix.  The
Company believes that lower sales volume was principally due to
corporate business customers' budget reductions or postponements
of projects.

Net sales of other segments for the first quarter of the 2003
fiscal year were $3.2  million compared to $4.2 million recorded
in the first quarter of the 2002 fiscal year.  This decrease was
primarily related to decreased revenues in the transportation
business.

Total reportable segment income for the first quarter of the
2003 fiscal year was $1.6 million compared to a loss of $19.3
million for the first quarter of the 2002 fiscal year.

Loss of the Apparel Fabrics segment for the first quarter of the
2003 fiscal year was $3.6 million compared to loss of $18.0
million recorded for the first quarter of the 2002 fiscal year.
This improvement was due primarily to $7.3 million higher
margins due to selling price and product mix, $9.2 million
improvement in manufacturing performance due to restructuring,
and $2.2 million due to lower selling, general and
administrative expenses resulting from restructuring and cost
reduction programs, partially offset by $3.0 million of higher
run-out expenses related to restructuring and $1.7 million lower
margins due to volume.

Loss of the interior furnishings products segment for the first
quarter of the 2003 fiscal year was $0.3  million compared to a
loss of $6.6 million recorded for the first quarter of the 2002
fiscal year.  This improvement was due primarily to $5.4 million
of improved manufacturing performance, $2.6 million lower
selling, general and administrative expenses resulting from
restructuring and cost reduction programs and $0.8 million lower
bad debt expense, partially offset by $2.5 million lower margins
due to reduced volume resulting from the disposition of the
consumer products businesses.

Income of the Carpet segment for the first quarter of the 2003
fiscal year was $5.4 million compared to $6.2 million recorded
for the first quarter of the 2002 fiscal year. This decrease was
due primarily to $0.8 million lower  margins due to lower volume
and $0.6 million  deterioration in manufacturing performance,
partially offset by $0.6 million of lower selling, general and
administrative expenses.

Income of other segments for the first quarter of the 2003
fiscal year were $0.1 million compared to the loss of $0.9
million recorded for the first quarter of the 2002 fiscal year.
This resulted primarily from the absence of carrying costs for a
sold terminal in the transportation business and the absence of
losses in a disposed insurance business.

General corporate expenses not included in segment results were
$1.8 million for the first quarter of the 2003 and 2002 fiscal
years.

Before the provisions for restructuring and impairment,
operating loss before interest and taxes for the first quarter
of the 2003 fiscal year would have been $0.7  million compared
to the loss of $21.4 million for the first quarter of the 2002
fiscal year.

Subsequent to the Petition Date, interest expense is reported
only to the extent that it will be paid during the Chapter 11
Cases or that it is probable that it will be an allowed claim.
Interest expense for the first quarter of the 2003 fiscal year
was $7.4 million, or 3.9% of net sales, compared with $13.5
million,  or 5.5% of net sales, in the first quarter of the 2002
fiscal year. The decrease was mainly attributable to the Chapter
11 Cases (contractual interest expense would have been $12.8
million and $16.2 million, respectively), lower borrowing levels
and lower interest rates.

Other income for the first quarter of the 2003 fiscal year was
$0.9 million, consisting principally of gains on the disposal of
assets.  Other income for the first quarter of the 2002 fiscal
year was $0.8 million, consisting principally of interest
income.

During the first quarter of the 2003 fiscal year, the Company
recognized a net pre-tax charge of $4.3 million associated with
the Chapter 11 Cases.  The Company incurred $2.8 million for
fees payable to professionals retained to assist with the filing
of the Chapter 11 Cases, and $1.5 million was recorded  for
service rendered for the period  related to retention incentives
that were approved by the Bankruptcy  Court on January 17, 2002.

Income tax expense (benefit) of $0.3 million was recorded for
the first quarter of the 2003 fiscal year in  comparison with
$(25.8) million for the first quarter of the 2002 fiscal year.
The total income tax  expense (benefit) for the 2003 and 2002
periods is different from the amounts obtained by applying
statutory rates to loss before income taxes primarily as a
result of foreign losses with no tax benefits,  tax rate
differences on foreign transactions, changes in the valuation
allowance, and the favorable tax treatment of export sales from
the exclusion for extraterritorial income under section 114 of
the Internal  Revenue Code.  The change in the valuation
allowance for both the 2003 and 2002 periods relate to deferred
tax assets on net operating loss (NOL) carryforwards.  It is
management's opinion that it is more likely than not that some
portion of the deferred tax asset will not be recognized.

Net loss for the first quarter of the 2003 fiscal year of $15.6
million included a net charge of $0.16 per share related to
restructuring and run-out costs and $0.08 per share related to
reorganization items.  Net loss for the first quarter of the
2002 fiscal year of $75.2 million, and included a net charge of
$0.86 per share related to restructuring and run-out costs and
$0.09 per share related to reorganization items.

                 Liquidity and Capital Resources

On November 15, 2001, the Company filed the Chapter 11 Cases,
which will affect the Company's liquidity and capital resources
in fiscal year 2003.

During the first three months of the 2003 fiscal year, cash of
$8.4 million was generated from sales of assets and other
investing activities.  Cash balances were used primarily for
debt repayments of $33.7  million, capital expenditures of $3.1
million and $18.7 million for operating activities.  At December
28,  2002, total debt of the Company not subject to compromise
was $430.9 million, total debt subject to compromise was $300.0
million, and cash on hand totaled $90.7 million. At September
28, 2002, total debt of the Company not subject to compromise
was $464.6  million, total debt subject to compromise was $300.0
million, and cash on hand totaled $137.8 million.

The Company's principal uses of funds during the next several
years will be for repayment and servicing of  indebtedness,
working capital needs, capital expenditures and expenses of the
Chapter 11 Cases. The Company intends to fund its financial
needs principally from net cash provided by operating
activities, asset sales (to the extent permitted in the
Bankruptcy Cases) and, to the extent necessary, from funds
provided by credit facilities. The Company believes that these
sources of funds will be adequate to meet the Company's
foregoing needs.


CALPINE: Closes Secondary Warranted Units Offering for C$153MM
--------------------------------------------------------------
Calpine Corporation (NYSE: CPN), a leading North American power
producer, and Calpine Power Income Fund (TSX: CF.UN) announced
that they have completed the secondary offering of Warranted
Units of the Calpine Power Income Fund for gross proceeds of Cdn
$153.3 million.  The 17,034,234 Warranted Units were sold to a
syndicate of underwriters led by Scotia Capital Inc. and CIBC
World Markets Inc. at a price of Cdn $9.00.  The Warrants will
trade on the Toronto Stock Exchange under the symbol CF.WT.

The securities have not been registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or
sold in the United States absent registration or an applicable
exemption from the registration requirements.

Calpine Power Income Fund is an unincorporated open-ended trust
that invests in electrical power generation assets.  The Fund
indirectly owns interests in two power generating facilities in
British Columbia and Alberta and has a loan interest in a third
power generating facility in Ontario.  The Fund is managed by
Calpine Canada Power Ltd., which is headquartered in Calgary,
Alberta.  The Trust Units of the Calpine Power Income Fund are
listed on the Toronto Stock Exchange under the symbol CF.UN, and
the Trust Units have the second-highest Canadian stability
rating of "SR-2" with a stable outlook from Standard & Poor's.
For more information about the Fund, please visit its Web site
at http://www.calpinepif.com.

Based in San Jose, Calif., Calpine Corporation is an independent
power company that is dedicated to providing wholesale and
industrial customers with clean, efficient, natural gas-fired
and geothermal power generation.  It generates power through
plants it owns, operates, leases and develops in 23 states in
the United States, three provinces in Canada and in the United
Kingdom.  Calpine also owns approximately 1.0 trillion cubic
feet equivalent of proved natural gas reserves in Canada and the
United States.  The company was founded in 1984 and is publicly
traded on the New York Stock Exchange under the symbol CPN.  For
more information about Calpine, visit its Web site at
http://www.calpine.com.

                         *   *   *

As reported in Troubled Company Reporter's December 11, 2002
edition, Calpine Corp.'s senior unsecured debt rating was
downgraded to 'B+' from 'BB' by Fitch Ratings. In addition,
CPN's outstanding convertible trust preferred securities and
High TIDES were lowered to 'B-' from 'B'. The Rating Outlook was
Stable. Approximately $9.3 billion of securities were affected.


CALPINE CORP: Reports Profitable Year-End Results
-------------------------------------------------
San Jose, California-based Calpine Corporation (NYSE: CPN), one
of North America's leading power companies, announced financial
and operating results for the quarter and twelve months ended
December 31, 2002.

Before certain non-recurring items, Calpine achieved $0.09
diluted earnings per share, or $34.6 million in net income for
the fourth quarter 2002.  The company reported $0.05 diluted
loss per share, or an $18.0 million net loss, compared with
$0.30 diluted earnings per share, or $100.0 million of net
income, in the fourth quarter of 2001.

Before certain non-recurring items, Calpine achieved $0.84
diluted earnings per  share, or $329.6 million in net income for
the twelve months ended December 31, 2002. Calpine earned $0.39
diluted earnings per share, or $141.6 million in net income,
compared with $1.87 diluted earnings per share, or $648.1
million of net income, for the same period of 2001.  Results are
unaudited and subject to the completion of the 2002 audit and
the reaudit of 2000 and 2001 by Deloitte & Touche LLP.

"Looking back on 2002, I am pleased to report that Calpine
remained profitable even in a recessionary year and during a
period of depressed energy prices," stated Calpine Chairman and
CEO Peter Cartwright.  "The company made significant strides in
enhancing liquidity and increasing our revenue-generating
capabilities.  In 2002, we completed approximately $3.1 billion
of finance transactions, retired debt, completed non-strategic
asset sales, and reduced 2002/2003 forecasted capital spending
by over $4 billion.  We recently announced restructuring of our
turbine agreements, reducing capital expenditures by an
additional $3.4 billion.

"I am equally proud of the fact that Calpine has achieved
another industry first.  In 2002 alone, we completed the
construction of more power plants in one year than any power
company or agency in the history of the power industry.  During
the most favorable of market conditions, the addition of 8,200
megawatts of capacity would be impressive -- given today's
challenging marketplace, it is extraordinary.

"2002 is behind us.  We faced intense pressures -- with American
industry, in general, and the power industry, in particular --
suffering a great loss of confidence from the public and from
investors.  Calpine enters 2003 as a stronger organization,
backed by the nation's largest, most efficient and cleanest
fleet of natural gas-fired power-generating facilities in North
America.  Calpine has in place the people, the commitment to
integrity, and the proven strategy to succeed."

    2002 Fourth Quarter and Year-End Financial Results

Financial results for the twelve months ended December 31, 2002,
were affected by a significant decrease in electricity prices
and spark spreads compared with the same periods in 2001,
primarily reflecting an increase in supply.  However, average
realized electric prices increased in the three months ended
December 31, 2002 compared to the fourth quarter of 2001 while
sparks spreads were relatively flat because of rising fuel
costs.  The company has experienced a significant drop in margin
from trading activities, which reflects the company's decision
to limit this activity due to costs associated with credit
support for trading.  In addition, financial results have been
impacted by charges in connection with equipment cancellations.

Total electrical generating production for the three and twelve
months ended December 31, 2002, increased by 41% and 71%,
respectively, as the company brought additional facilities into
operation.  However, the combination of lower spark spreads on
electrical generation, higher operating expenses and
depreciation charges associated with additional plants coming on
line, and lower trading gains resulted in decreases of 16% and
18%, respectively, in gross profit for the three and twelve
months ended December 31, 2002, compared with the same periods
in 2001.  Calpine's low cost of production, economies of scale
and portfolio of long-term contracts helped to mitigate the
effects of the depressed power market on Calpine's financial
results.  In addition, the company recorded a pre-tax $404.7
million charge for the year in connection with the equipment
cancellations and related charges.

Financial results for the fourth quarter of 2002 reflect higher
project development costs, as the company expensed costs related
to the indefinite suspension of certain development projects.
In addition, the company incurred a $210.7 million pre-tax
charge for equipment cancellations and related charges.  General
and administrative expense increased due to the growth of the
company's infrastructure needed to support operations and due to
charges related to the company's reorganization, including
severance and excess office space, and for reaudit fees for 2000
and 2001.  Interest expense increased due to additional projects
in commercial operation.  Other income increased primarily as a
result of a pre-tax gain of $114.5 million from the receipt of
Senior Notes as consideration for British Columbia asset sales.
Discontinued operations included $48.0 million net gains on the
sale of the De Pere Energy Center, and Alberta and British
Columbia oil and gas assets.

              Operations-Focused Power Company

In 2002, Calpine increased its power generation portfolio by
more than 72%, adding approximately 8,200 megawatts of the
cleanest, most efficient natural gas-fired generation in North
America.  Calpine now has 76 power plants in operation --
totaling more than 19,000 megawatts of capacity -- and
owns approximately one trillion cubic feet equivalent of proved
natural gas reserves in Canada and the United States.

With its 19,000-megawatt portfolio in place, Calpine has
completed a corporate restructuring program -- successfully
transitioning the company from a development-focused independent
power company, to one of North America's largest owners and
operators of power-generating facilities.  Consistent with
its proven business model, the company continues to enter into
long-term power contracts and currently serves more than 80
wholesale and industrial customers throughout North America.  In
2002, Calpine:

    --    Continued to enhance its safety program; the company's
          lost time accidents record was four times better than
          the nationwide power industry average.

    --    Remained the industry leader for cleanest natural gas-
          fired power portfolio, with the most environmentally
          responsible natural gas-fired power plants in North
          America; remains the largest geothermal power producer
          in the world.

    --    Operated 76 power plants with a 92% average
          availability.

    --    Produced a record 74.5-million megawatt hours, a 71%
          increase from 2001.

    --    Reduced plant operating expenses per megawatt-hour by
          approximately 10% in 2002, compared to 2001.

    --    Completed construction of nine natural gas-fired power
          plants and four expansion projects, adding more than
          8,200 megawatts of capacity.

    --    Advanced construction of 23 projects in 12 states and
          one province in Canada.

    --    Produced approximately 350 million cubic feet
          equivalent per day of natural gas -- representing
          about 26% of the company's total gas requirements.

              Liquidity-Enhancing Initiatives

Calpine developed and continues to execute its program to
enhance liquidity.  In 2002, the company:

    --    Completed $3.1 billion of finance transactions.

    --    Divested nearly $550 million of non-strategic assets.

    --    Retired approximately $1.2 billion of debt, including
          approximately $880 million of zero-coupon convertible
          debentures.

    --    Reduced 2002/2003 capital spending by more than $4
          billion, canceling and deferring delivery and payment
          of major equipment.

    --    Restructured major power contracts, increasing near-
          term earnings and retaining long-term value.

In February 2003, the company further advanced its capital
expenditure reduction program, announcing restructured
agreements with its major gas and steam turbine manufacturers.
These new agreements give Calpine the option to cancel its
existing orders for 87 gas turbines and 44 steam turbines.  They
reduce the company's future capital commitments by approximately
$3.4 billion and will provide greater flexibility to better
match equipment commitments with Calpine's revised construction
and development program.  The company has canceled 11 gas
turbines and two steam turbines to date.

"Calpine continues to demonstrate the ability to raise
substantial capital, reduce capital expenditures and increase
our revenue-generating capabilities to meet both our liquidity
needs and construction financing requirements," stated Calpine
CFO Bob Kelly.  "Our strong operating cash flow, combined with
our ongoing program to enhance liquidity, gives Calpine a
competitive advantage as we advance our 2003 refinancing
program."

                   2003 Earnings Guidance

The company is establishing its diluted earnings per share
guidance for the year ending December 31, 2003 of approximately
$0.40 to $0.50 per share and anticipates EBITDA, as adjusted of
approximately $1.4 billion to $1.5 billion.  These estimates are
based on average on-peak market spark spreads of approximately
$8.00 - $10.00 per megawatt-hour, effective cost control and
continued execution of the company's business plan.

Based in San Jose, California, Calpine Corporation is leading
North American power company that is dedicated to providing
wholesale and industrial customers with clean, efficient,
natural gas-fired power generation.  It generates and markets
power through plants it develops, owns, leases and operates in
23 states in the United States, three provinces in Canada and in
the United Kingdom.  Calpine also is the world's largest
producer of renewable geothermal energy, and it owns
approximately one trillion cubic feet equivalent of proved
natural gas reserves in Canada and the United States. The
company was founded in 1984 and is publicly traded on the New
York Stock Exchange under the symbol CPN.  For more information
about Calpine, visit its Web site at http://www.calpine.com

DebtTraders reports that Calpine Corp.'s 10.500% bonds due 2006
(CPN06USR2) are trading at 50 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CPN06USR2for
real-time bond pricing.


CASUAL MALE: Exiting Levi's and Dockers Outlet Store Business
-------------------------------------------------------------
Casual Male Retail Group, Inc. (Nasdaq: CMRG), retail brand
operator of Casual Male Big & Tall, Levi's(R) Outlet by Designs,
Dockers(R) Outlet by Designs, and Ecko Unltd(R) outlet stores,
said that to further its previously stated goal of focusing
primarily on its Casual Male Big and Tall business, it plans to
accelerate the closing of its Levi's(R) and Dockers(R) Outlet
stores and ultimately exit the business. In addition, the
Company announced it has transferred the operations of its
remaining seven Candie's(R) outlet stores to Candie's, Inc.

David A. Levin, President and Chief Executive Officer of the
Company commented, "We remain pleased with the progress of our
Casual Male business and continue to identify opportunities to
grow the top line and increase market share. Our decision to
exit the Levi's(R)/Dockers(R) outlet business and the
Candie's(R) outlet business will enable us to focus our
attention on, and utilize our resources for, expanding CMRG's
profitable core Casual Male Big and Tall business."

The Levi's(R)/Dockers(R) sales base has continued to erode
during the second half of fiscal 2003 and initiatives that the
Company has been working on with Levi Strauss & Co., have been
insufficient to offset these continuing negative sales trends.
As a result, the Company will accelerate its previously
announced downsizing of the Levi's(R) and Dockers(R) outlet
business by closing up to 50-55 stores over the next 24 months,
thus reducing the sales volume of the Levi's(R) and Dockers(R)
outlet business to less than 10% of CMRG's total sales. The
remaining 30 stores will either be closed at the end of their
respective lease terms, or otherwise be divested in a sale
transaction. In spite of continuing sales erosion, CMRG is
forecasting the remaining Levi's(R) and Dockers(R) outlet
business to generate positive operating income while the stores
are open.

In connection with the closing of Levi's(R) and Dockers(R)
outlet stores over the next twelve months, discontinuing its
Candies(R) outlet stores, and negotiating lease settlements on
certain leases, results for the fourth quarter of fiscal year
2003 will include a charge of between $27-30 million relating to
the impairment of fixed assets and write-off of deferred tax
assets, liquidation costs of closing stores and lease settlement
costs. The approximate impact of this charge upon CMRG's net
liquidity position is estimated to approximate $3-5 million.

With respect to the Candie's(R) transition, Candie's, Inc., will
now assume operations of 7 of the locations for the next 12-18
months, after which time Candie's, Inc., will either purchase
the stores from the Company, or close the stores. The Company
plans to convert 4 of the 5 Candie's(R) outlet stores not
assumed by Candie's, Inc. to either its Casual Male outlet or
Ecko Unltd.(R) outlet store concepts during fiscal 2004.

Dennis R. Hernreich, Executive Vice President, COO/CFO, stated,
"While in the process of downsizing and exiting our non-core
operations, we remain extremely focused on our Casual Male Big
and Tall business. In fact, our goal to significantly improve
operating margins has been progressing ahead of schedule, with
over $20 million in annualized cost savings achieved to date.
During the fourth quarter, the Casual Male business operating
margin and operating income was significantly improved upon from
the prior year. We believe that the strategy devised to exit the
Levi's(R) and Dockers(R) outlet business will have minimal
impact upon CMRG's balance sheet, and not disturb CMRG's growth
and profitability plans for its primary businesses."

CMRG, the largest retailer of big and tall men's apparel,
operates 467 Casual Male Big & Tall stores, Casual Male e-
commerce site, Casual Male catalog business, 83 Levi's(R) Outlet
by Designs and Dockers(R) Outlet by Designs stores and 6 Ecko
Unltd(R) outlet stores located throughout the United States and
Puerto Rico. The Company is headquartered in Canton,
Massachusetts and its common stock is listed on the Nasdaq
National Market under the symbol "CMRG."

Casual Male filed its chapter 11 petition under the federal
bankruptcy laws on May 18, 2002 (Bankr. S.D.N.Y. Case No.
01-41404).  Adam C. Rogoff, Esq., at Weil, Gotshal & Manges,
LLP, represents the Debtors in its reorganization proceedings.


CELL-LOC INC: Fiscal Second Quarter Results Show Improvement
------------------------------------------------------------
Cell-Loc Inc., (TSX: CLQ) reported its financial results for the
second quarter of fiscal year 2003 ended December 31, 2002. The
net income for the second quarter was C$2.2 million compared to
a net loss of C$2.6 million for the same period last year. (All
monetary figures are expressed in Canadian dollars, unless
specified otherwise).

                    Corporate Highlights

Private Placement

In January 2003, Cell-Loc completed a private placement of
1,702,456 units, which resulted in proceeds of approximately
$970,400.

US$40 Million Equity Line of Credit

On May 16, 2002, Cell-Loc announced that it had received final
receipts from the Alberta and Ontario securities commissions and
closed its prospectus offering of subscription shares and
commitment warrants under an equity line of credit for proceeds
of up to $40 million (US). As of December 31, 2002 the Company
has not drawn on this equity line of credit.

TimesThree Inc.

During fiscal year 2001 TimesThree Inc., a subsidiary of Cell-
Loc Inc., signed leases for 115 tower sites in Dallas, Austin
and Atlanta, all of which were for a term of five years. As of
November 28, 2002, TimesThree had lease rental payments of
approximately $1.9 million US due and payable under these
contractual arrangements. The lease commitments for tower sites
were predicated on the deployment of the Company's cellular
location networks. Accordingly, other costs associated with the
corporate activities of TimesThree were incurred and remain
outstanding.

TimesThree has terminated any further network development in
Dallas and Austin and the Company has ceased financial and
operations support for TimesThree. TimesThree is in default of
its tower lease agreements and has advised the respective tower
companies of its inability to make payment on those lease
agreements.

TimesThree's only assets at November 28, 2002 were its interests
in the tower leases, which the Company values at $nil.
TimesThree's debts totaled $5.7 million (US) at November 28,
2002, including $3.3 million (US), which was due to Cell-Loc.
With respect to the obligations of TimesThree to third parties,
the Company has not provided corporate guarantees, letters of
credit or any other financial assurances for the obligations of
TimesThree.

The board has determined that, due to the significant debt in
TimesThree, the absence of any future economic benefit to Cell-
Loc from TimesThree, and there being no liability of Cell-Loc
for TimesThree obligations, TimesThree should be de-consolidated
from the Cell-Loc financial statements at November 28, 2002. As
a result of de-consolidation, the consolidated debt of Cell-Loc
was reduced by $3.6 million at November 28, 2002, which has been
recognized as a gain for income purposes.

          Interim Management Discussion and Analysis

During the second quarter ended December 31, 2002 Cell-Loc
earned net income of $2.23 million. The gain is primarily
attributed to the gain on the de-consolidation of TimesThree
Inc. Cell-Loc used $655,000 for operations this quarter, which
is a 43 percent decrease from the $1.16 million used for the
quarter ended September 30, 2002 and a 175 percent increase from
the same quarter last year. Network and capital expenditures for
the quarter decreased to $13,000 from $31,000 last quarter and
$8,000 for the quarter ended December 31, 2001.

Deferred Revenue

In March 2002, Cell-Loc received $800,000, which had been
recorded as deferred revenue from the license agreement with IQ2
Communications Corp., for exercising its option to acquire from
Cell-Loc the sole rights to Cell-Loc's intellectual property for
use in the Austin, Texas geographic market, subject to an
agreement between the parties dated October 5, 2001. During the
quarter ended December 31, 2002 an agreement was reached between
Cell-Loc and IQ2 granting IQ2 additional future considerations,
and relieving Cell-Loc of the requirement to establish a
commercial network in Austin. As of December 31, 2002 the
Company has recognized this amount as revenue.

Operations

Operating expenses were $1.0 million for the second quarter
relative to $2.24 million for the previous quarter and $638,000
for the same quarter last year. The reduction in operating
expenses reflects the de-consolidation of TimesThree Inc. Cost
savings continue to be realized through consolidation of the
number of inventory storage facilities.

Marketing and Business Development

Expenses for marketing and business development for the quarter
ended December 31, 2002 were $40,000. This number has decreased
49 percent from $79,000 for the previous quarter and decreased
70 percent from the same period last year. The lower costs were
realized as a result of the restructuring program undertaken in
September 2001 and a continued focus on reducing travel and
related expenses.

General and Administration

Expenses for general and administration costs for the quarter
ended December 31, 2002 were $406,000. The reduction of staff
levels and the focus on ensuring expenditures are limited to
core projects and essential items have resulted in a consistent
level of general and administrative expenditures. The current
quarter shows a 40 percent reduction from the $675,000 spent
during the same period last year.

Research and Development

As the Company continues to upgrade and develop its technology,
research and development expenditures will be required. The
expenses are and will continue to be specifically related to the
ongoing technical development required to refine the Company's
commercial products. The $367,000 expense this quarter reflects
an eight percent decrease from the $402,000 last quarter, and
reflects a 45 percent decrease from the $666,000 for the quarter
ended December 31,2001.

               Liquidity and Capital Resources

The December 31, 2002 total cash balance of $562,000 represents
a $1.0 million, or 63 percent, decrease from the first quarter
cash balance of $1.5 million. The working capital balance has
increased to $307,000 from a working capital deficiency of $2.47
million for the period ended September 2002. The increase in
working capital for the period ended December 31, 2002 is a
direct result of de-consolidating TimesThree Inc. Subsequent to
the quarter end, the Company received $970,400 from the January
2003 private placement. The Company has entered into contracts
to sell a portion of the assets formerly classified as available
for deployment, the proceeds from which will be a source of near
term cash. In the absence of the Company selling the network
equipment contracted for sale or the Company generating cash by
licensing its technology to third parties, the Company will
deplete its cash reserves at the end of March 2003. The
Company's monthly use of cash continues to be scrutinized to
ensure optimal use of cash resources.

                  Business Risks and Prospects

The Company is actively negotiating commercial contracts. The
joint venture agreements currently being negotiated are examples
of the focused business strategy that Cell-Loc has now
undertaken. Joint venture arrangements, such as those negotiated
with IQ2 and Cell-Loc Chongqing will enable the Company to
introduce Cell-Loc's technology to the global market.

The ability to source products and continue research and
development is contingent on the Company's ability to continue
the working relationships that have been established with the
vendors and creditors who supply goods and services to Cell-Loc.

The Company's ability to continue to generate revenue and
achieve positive cash flow in the future is dependent upon
various factors, including the level of market acceptance of its
services, the degree of competition encountered by the Company,
the cost of acquiring new customers, technology risks, the
ability to fund continued network deployment and operations,
general economic conditions and regulatory requirements.

Cell Loc Inc. -- http://www.cell-loc.com-- a leader in the
wireless location industry, is the developer of Cellocate(TM), a
family of network-based wireless location products that enable
location-based services. Located in Calgary, Alberta, Cell-Loc
currently develops, markets and supports its patented wireless
location technology in Asia as well as North and South America,
with a view to expanding globally.  Cell Loc is listed on the
Toronto Stock Exchange under the trading symbol: "CLQ."


CLARENT CORP: Completes Asset Sale to Verso Technologies Inc.
-------------------------------------------------------------
Clarent Corporation (OTC:CLRN) completed the sale of its
business assets to Verso Technologies Inc., (Nasdaq:VRSO) an
Atlanta-based, integrated switching solutions company. Clarent
announced a definitive agreement with Verso on December 16,
2002, for the sale of substantially all of its business assets.
As part of that agreement, Clarent filed for voluntary
reorganization under Chapter 11. Total consideration for the
sale was approximately $9.8 million in debt of Verso. With the
completion of the asset sale Verso will continue sales,
development and the support of Clarent's Softswitch and
NetPerformer(R) product lines.

"We're pleased to bring this sale to a successful conclusion so
quickly," said James B. Weil, President of Clarent. "Verso
provides a solid future for our award-winning technology,
continuity for our customers, and opportunity for many of our
employees," Weil continued.

Clarent Corporation provides 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

Clarent Corporation filed its chapter 11 petition under the
federal bankruptcy laws on December 13, 2002 (Bankr. N.D. Calif.
Case No. 02-33504). Debra I. Grassgreen, Esq., at Pachulski,
Stang, Ziehl, Young & Jones, represent the Debtor in this case.

Verso Technologies provides integrated switching 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 over IP 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 www.verso.com or by calling 678/589-3500.

Clarent Corporation (Nasdaq:CLRNE) is a leading provider of
voice solutions for next generation networks. Clarent'ssolutions
enable service providers to deploy a converged network(voice,
data and applications). Clarent solutions reduce costsand
increase operating efficiencies while delivering innovativenew
services that allow end users to manage theircommunications.
Founded in 1996, Clarent is headquartered in Redwood City,
Calif. and has offices in Asia, Europe, LatinAmerica and North
America.


CONSECO INC: Brings-In Bankruptcy Management Co. as Claims Agent
----------------------------------------------------------------
Conseco Inc., and its debtor-affiliates sought and obtained
permission to employ Bankruptcy Management Company as the
official noticing, claims and balloting agent in these chapter
11 cases.

In order to reduce administrative expenses, the Debtors obtained
authorization to pay BMC's fees and expenses without the
necessity of a fee application. Invoices will be submitted to
the Debtors' accounts payable department on a monthly basis.

As the Debtors' notice and claims agent, BMC will:

   1) Prepare and serve required notices in these Chapter 11
      Cases, including:

         i. Notice of the commencement of these Chapter 11 Cases
            and the initial meeting of creditors under Section
            341(a) of the Bankruptcy Code;

        ii. Notice of the claims bar date;

        iii. Notice of objections to claims;

        iv. Notice of any hearings on a disclosure statement and
            confirmation of a plan of reorganization; and

        v. Other miscellaneous notices to any entities, as the
           Debtors or the Court may deem necessary or
           appropriate for an orderly administration of these
           Chapter 11 Cases;

   2) After the mailing of a particular notice, file with the
      Clerk's Office a certificate or affidavit of service that
      includes a copy of the notice involved, an alphabetical
      list of persons to whom the notice was mailed and the date
      and manner of mailing;

   3) Maintain copies of all proofs of claim and proofs of
      interest filed;

   4) Maintain official claims registers, including, among other
      things, this information for each proof of claim or proof
      of interest:

         i. the applicable Debtor;

        ii. the name and address of the claimant and any agent
            thereof, if the proof of claim or proof of interest
            was filed by an agent;

       iii. the date received;

        iv. the claim number assigned; and

         v. the asserted amount and classification of the claim;

   5) Implement necessary security measures to ensure the
      completeness and integrity of the claims registers;

   6) Transmit to the Clerk's Office a copy of the claims
      registers on a weekly basis, unless requested by the
      Clerk's Office on a more or less frequent basis;

   7) Maintain an up-to-date mailing list for all entities that
      have filed a proof of claim or proof of interest, which
      list will be available upon request of a party in interest
      or the Clerk's Office;

   8) Provide access to the public for examination of copies of
      the proofs of claim or interest without charge during
      regular business hours;

   9) Record all transfers of claims pursuant to Rule 3001(e) of
      the Federal Rules of Bankruptcy Procedure and provide
      notice of such transfers as required;

  10) Comply with applicable federal, state, municipal, and
      local statutes, ordinances, rules, regulations, orders and
      other requirements;

  11) Provide temporary employees to process claims, as
      necessary; and

  12) Promptly comply with other conditions and requirements as
      the Clerk's Office or the Court may at any time prescribe.

(Conseco Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


CONSECO INC: Strategic Income Fund Unit Declares Dividend
---------------------------------------------------------
Conseco Strategic Income Fund (NYSE:CFD) declared a dividend of
$0.09 per share, payable Mar. 7, 2003 to holders of record at
the close of business on Feb. 28, 2003.

Conseco Strategic Income Fund is a closed-end investment
management company. The Fund's primary investment objective is
to seek high current income. As discussed in the Fund's
prospectus, the Fund intends to distribute substantially all of
its net investment income monthly. All net realized capital
gains, if any, generally will be distributed to the Fund's
shareholders at least annually, although net capital gains
(i.e., the excess of net long-term capital gains over net short-
term capital losses) may be retained by the Fund.

The Fund is managed by Conseco Capital Management, Inc., a
wholly owned subsidiary of Conseco, Inc. (OTCBB:CNCEQ).
Headquartered in Indianapolis, Ind., Conseco is one of middle
America's leading sources for insurance, investment and lending
products. Through its subsidiaries and a nationwide network of
distributors, Conseco helps 13 million customers step up to a
better, more secure future.


CONSECO VARIABLE: Fitch Ups Fin'l Strength Rating to BBB from B
---------------------------------------------------------------
Fitch Ratings upgraded and removed from Rating Watch Evolving
the insurer financial strength rating of Conseco Variable
Insurance Company (which is in the process of being renamed
Jefferson National Life Insurance Company), to 'BBB' from 'B'.
The Rating Outlook is Stable.

This action follows the completion of Fitch's review of
Jefferson National and its new parent, Inviva Inc., a New York-
based holding company, which acquired Jefferson National from
Conseco, Inc., in October 2002. The rating reflects Jefferson
National's strategic importance to Inviva's business model and
the support the company is receiving from Inviva's seasoned
investors, management and partners. The company is adequately
capitalized, and the general account portfolio is conservatively
invested. Jefferson National's previous rating reflected the
distressed financial condition of its former parent, Conseco.

Inviva, a start-up holding company entering its fourth year of
operation, acquired Jefferson National for $75 million to build
scale for the technology platform that is the core element of
its business strategy. Jefferson National also comprises the
bulk of Inviva's assets. At September 30, 2002, Jefferson
National had total admitted assets of $2.1 billion and adjusted
surplus of $68 million. The conversion of Jefferson National's
$1.2 billion block of variable annuity business to Inviva's
proprietary platform is the first major test of the technology.
The platform is designed to provide real-time underwriting for
partners and to significantly reduce the costs of insurance
product manufacturing, issuance and servicing. It is also
designed to work with any distribution channel. The conversion
is due to be completed by mid-year 2003.

Fitch believes there is execution risk in the conversion of the
Jefferson National business and in the nature of Inviva's start-
up operations generally. A successful conversion will
significantly reduce maintenance costs for the block of business
while moderately growing scale. Since scale is important to the
success of this venture, Fitch notes that annuity surrenders
have slowed after a spike up when Conseco's restructuring and
bankruptcy filing were announced. A core group of Jefferson
National's broker-dealers has remained with the company and
continues to produce new business. Inviva has existing
partnerships with other distribution channels, including BISYS,
which offer considerable potential going forward.

                         Rating Action

               Conseco Variable Insurance Company

     -- Insurer Financial Strength rating upgraded to 'BBB' from
        'B', Removed from Rating Watch Evolving.


COTTON GINNY: Agrees to Sell Retail Assets to Continental Saxon
---------------------------------------------------------------
Cotton Ginny Limited reached an agreement in principle to sell
the retail assets of its Cotton Ginny Division to Toronto-based
Continental Saxon Group.  Under the terms of the agreement,
Continental Saxon will assume ownership of Cotton Ginny's
remaining retail locations, as well as its warehousing and head
office facilities in Toronto. In addition, the agreement
authorizes Continental Saxon to extend offers of employment to
current employees at Cotton Ginny retail locations and corporate
headquarters.

The sale is subject to the final approval of the Ontario Supreme
Court of Justice.

"We are very pleased to announce the conclusion of this
agreement with Continental Saxon," said Larry Gatien, acting
president and chief executive officer of Cotton Ginny Limited.
"Obviously we are delighted that the Cotton Ginny brand will
live on in Canada, and we are deeply relieved that we have
found a way to preserve the jobs of so many of our employees
across the country. I would like to once again express my most
sincere thanks to every one of our employees for their
commitment and understanding during this very trying period in
the company's history."

According to Al Pace, president and chief executive officer of
the Continental Saxon Group, "Cotton Ginny has built up a
tremendous amount of brand loyalty since its founding more than
20 years ago, and we believe there continues to be tremendous
goodwill associated with the brand, and strong demand for its
products. We have been working very closely with Cotton Ginny's
suppliers through the bid process, and we are energized by their
support and enthusiastic about the prospect of working together
in the future."

Cotton Ginny will continue to operate its Tabi International
stores as a separate division. Since being acquired by Cotton
Ginny in 1994, the Tabi brand has continued its strong
performance, increasing from 30 to 90 stores, and producing
positive financial results in each of the last two fiscal years.


DIGITAL TELEPORT: Court Clears CenturyTel Bid to Acquire Assets
---------------------------------------------------------------
Digital Teleport Inc., and CenturyTel Inc., (NYSE:CTL) announced
that a federal bankruptcy court has approved CenturyTel's $38
million bid to acquire the assets of the regional fiber optics
communications company.

"This acquisition is a natural extension of our clustering
strategy in rural and small-to-mid-sized city markets," said
Glen F. Post, III, chairman and CEO of CenturyTel. "Digital
Teleport's regional fiber network will help CenturyTel reduce or
eliminate existing network costs from other transport providers
and pursue additional revenue opportunities.

"The DTI employees have achieved impressive results during the
re-organization process. We look forward to having them join
CenturyTel," Post said.

"We couldn't be happier with the results," said Paul Pierron,
president and CEO of Digital Teleport. "CenturyTel's purchase
should eliminate any remaining concerns that our customers,
suppliers and employees may have about the long-term financial
stability and future of Digital Teleport.

"CenturyTel is a prudent and respected company with strong
fundamentals and operating principles that mirror Digital
Teleport's values and that will enable this business to realize
its full growth potential," Pierron said. "The transaction will
be transparent to our customers."

Under terms of the asset sale approved late Thursday afternoon
by Judge Barry S. Schermer, of the U. S. Bankruptcy Court for
the Eastern District of Missouri in St. Louis, CenturyTel will
assume all existing contracts with customers and with most
suppliers.

The transaction is expected to be completed during the second
quarter of 2003.

CenturyTel, Inc., provides communications services including
local, long distance, Internet access and data services to more
than 3 million customers in 22 states. The company,
headquartered in Monroe, Louisiana, is publicly traded on the
New York Stock Exchange under the symbol CTL, and is included in
the S&P 500 Index. CenturyTel is the 8th largest local exchange
telephone company, based on access lines, in the United States.
The company's Web site is http://www.centurytel.com

Digital Teleport provides wholesale fiber optic transport
services in secondary and tertiary Midwest markets to national
and regional telecommunications carriers. The company's network
spans 5,700 route miles across Arkansas, Illinois, Iowa, Kansas,
Missouri, Nebraska, Oklahoma and Tennessee. Digital Teleport
also provides fiber optic communications services to enterprise
customers and government agencies in St. Louis' premier office
buildings. The company's Web site is
http://www.digitalteleport.com


ENCOMPASS SERVICES: Obtains Nod to Sell Five Non-Core Assets
------------------------------------------------------------
Pursuant to Court-approved bidding procedures, Encompass
Services Corporation and its debtor-affiliates solicited and
received bids for the sale of:

    1. Encompass Design Group;
    2. Encompass Power Systems, Inc.;
    3. Encompass Ind./Mech. of Texas, Inc.;
    4. Building One Service Solutions, Inc. and
    5. Building One Commercial, Inc.

The Debtors then held an auction on each of the assets at the
offices of their counsel, Weil, Gotshal & Manges LLP, to solicit
the highest and best offer.  When the dust settled, the Debtors
determined to consummate the sale of:

    -- Encompass Design and Encompass Power to Sterling Planet
       Holdings, LLC for $3,200,000 in aggregate gross purchase;

    -- Encompass Ind./Mech. to Ken Polk Investments, LLC, for
       $16,000,000 in gross purchase price in the form of notes;
       and

    -- Building One Service Solutions and Building One
       Commercial to Horizon National Services, LLC, for
       $21,600,000 in gross purchase price consideration.

             Two Contractors Object to Cure Amounts

Servco Industries, Inc. and E.O. Wood Company, two of the
Debtors' contractors, asserts that the Debtors still owe them
sums with respect to their executory contracts.  Servco alleges
that its records reflect a cure amount amounting to $167,501
with respect to Building One Service Solutions, Inc. -- not
$3,170 as the Debtors disclosed.  E.O. Wood Company also asserts
claim against Encompass Ind./Mech.

Unless the full cure amounts are paid, Servco and E.O. insist
that the Debtors cannot assume and assign the contracts.

                      *     *     *

After reviewing the merits of the case, Judge Greendyke allows
the Debtors to consummate the sale of their assets, free and
clear of all liens, claims, encumbrances, and other interests.

Notwithstanding the cure objections, the Debtors are also
permitted to assume and assign the executory contracts and
unexpired leases associated with the assets to these buyers
effective as of:

    Buyer                                        Date
    -----                                        ----
    Ken Polk Investments, LLC            December 31, 2002
    Sterling Planet Holdings, LLC        December 30, 2002
    Horizon National Services, LLC       December 30, 2002

Regarding Encompass Ind./Mech.'s executory contracts with E.O.
Wood Company, Judge Greendyke reserves E.O.'s rights to dispute
any cure amount pending further investigation and discussion.
Servco's rights to dispute the cure amount for any executory
contract with Building One Service Solutions/Building One
Commercial is also preserved pending further discussion and
investigation.

Additionally, Building One Service Solutions and Building One
Commercial, Encompass and Horizon National are authorized and
directed to enter into and perform under transition services
agreements.  No contract required for the performance of the
Agreement will be rejected until the Transaction Services
Agreements have been terminated pursuant to its terms.

To the extent any objections have not been withdrawn, waived, or
settled, these objections are overruled on the merits.
(Encompass Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


ENRON CORP: Unsecured Panel Wants to Recover $80 Mill. Transfers
----------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of Enron Corporation and its debtor-affiliates seeks to
recover over $70,000,000 of transfers made within a year prior
to the Debtors' Chapter 11 filing and over $10,000,000 in
annuity transfers made at least 90 days prior to Petition Date
from Enron's former Chief Executive and Chairman of the Board,
Kenneth L. Lay, and his wife Linda P. Lay.

                     The Loan Agreement

Susheel Kirpalani, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
in New York, relates that on September 1, 1989, Kenneth Lay and
Enron entered into a loan commitment agreement.  Pursuant to the
terms of the Loan Agreement, Enron agreed "to make Advances to
Lay in an aggregate amount not to exceed at any time
$2,500,000." The Loan Agreement also provided that Mr. Lay "may
borrow, prepay and reborrow under Section 2.01" -- the Revolving
Loan Facility.

The Loan Agreement was first amended on February 28, 1994 to
increase the maximum allowable balance under the Revolving Loan
Facility from $2,500,000 to $4,000,000.  Mr. Kirpalani continues
that the Loan Agreement was further modified on May 3, 1999 to
enable Mr. Lay to "repay" any outstanding balance on the
Revolving Loan Facility "either in cash or shares of common
stock of Enron Corp."

Between February 10, 1997 through November 27, 2001 -- the Loan
Period, Mr. Lay received cash from Enron under the Revolving
Loan Facility totaling $106,803,116.  Pursuant to the 1999
Amendment, Mr. Lay repaid $94,025,000 of his total borrowings
under the Revolving Loan Facility by repeatedly conveying shares
of Enron stock to Enron.  In addition, Mr. Kirpalani reports,
Mr. Lay maintained over $7,000,000 in balance on the Revolving
Loan Facility for which he has made no payment, by cash, stock
or other means.

Mr. Kirpalani tells Judge Gonzalez that on November 4, 2001,
less than one month before the Petition Date, the Loan Agreement
was once again amended to increase the maximum allowable balance
under the Revolving Loan Facility from $4,000,000 to $7,500,000.
Despite the fact that the 2001 Amendment was not executed until
November 4, 2001, Mr. Lay began obtaining loans over the
$4,000,000 limit in August 2001.

Mr. Kirpalani notes that throughout 2001, Mr. Lay received
information from sources both within and outside that Enron was
in dire financial condition.  Regardless of his knowledge of
Enron's deteriorating financial condition, Mr. Lay continued to
use the Revolving Loan Facility to take out enormous cash loans
from Enron while purportedly "repaying" the loans by conveying
large amounts of Enron's overvalued stock back to Enron.

On October 25, 2001 and October 26,2001, Mr. Lay made a combined
$2,825,000 worth of "repayments" under the Revolving Loan
Facility.  These were the final repayments that Mr. Lay made
under the Loan Agreement.  On the other hand, Mr. Lay received
cash advances totaling $2,525,000 as a result of transactions
executed from November 1 through 27, 2001.

According to Mr. Kirpalani, since the 1999 Amendment, Mr. Lay
made all of his loan repayments under the Revolving Loan
Facility with Enron stock.  Mr. Lay made 26 separate repayments
to Enron corresponding to $94,025,000 of the money he was
advanced through the Revolving Loan Facility.  Of these 26
repayments, 22 were tendered during the one-year period
immediately preceding the Petition Date totaling $81,525,000.

                    The Annuity Agreement

Despite the Debtors' apparent financial distress that has been
mounting for some time, on September 21, 2001, the Lays entered
into a "Purchase, Sale and Reconveyance Agreement" with Enron --
the Annuity Agreement.  Pursuant to the Annuity Agreement, Enron
paid $10,000,000 in cash to the Lays' joint checking account via
wire transfer.  In exchange, the Lays were obligated to transfer
their interests in two annuity contracts issued by Manulife NA
to Enron for a period of time to end on December 31, 2005.

As estimated by Enron in internal documents proposing different
potential transactions with the Lays, the Annuity Contracts had
a collective value of $4,691,567 as of September 21, 2001.
Thus, Mr. Kirpalani concludes, the Annuity Agreement represented
a windfall of more than $5,308,433 over and above Enron's own
belief in the market value of the Annuity Contracts.

Enron purportedly entered into the Annuity Agreement with the
Lays because of Mr. Lay's continued value to Enron, "despite the
fact that Mr. Lay's continued employment with Enron was of no
value," the Committee charges.

Given these facts, the Committee asks the Court to enter a
judgment for:

A. Avoidance and recovery of the Loan Transfers as a fraudulent
    transfer since:

    -- the Loan Transfers to Mr. Lay constituted a transfer of
       an interest in the Debtors' property;

    -- the Loan Transfers to Mr. Lay were for his benefit;

    -- Enron received less than reasonable equivalent value for
       the Loan Transfers;

    -- Enron was insolvent at the time of, or was rendered
       insolvent as a result of, the Loan Transfers;

    -- as a direct and proximate result of the Loan Transfers,
       Enron and its creditors suffered losses amounting to at
       least the value of the Loan Transfers;

    -- at the time of the Loan Transfers, there were creditors
       of Enron holding unsecured claims, and insufficient
       assets to pay Enron's liabilities in full;

    -- the Debtors are entitled to avoid the Loan Transfers
       pursuant to Sections 544 and 548(a)(1)(B) of the
       Bankruptcy Code and Sections 270 to 281 of the New York
       Department Credit Law or other applicable law; and

    -- pursuant to Section 550 of the Bankruptcy Code, the
       Debtors may recover for the benefit of the Debtors'
       estates the value of Loan Transfers from the initial
       transferee, from an entity for whose benefit the Loan
       Transfers were made, or from any immediate or mediate
       transferee of the initial transferee;

B. Avoidance and recovery of the Annuity Transfers as a
    fraudulent transfer since:

    -- the Annuity Transfers to the Lays and the [unidentified]
       Partnership constitutes a transfer of an interest in
       property of the Debtors;

    -- the Annuity Transfers to the Lays were for the benefit
       of the Lays and the Partnership;

    -- Enron received less than reasonably equivalent value for
       the Annuity Transfers;

    -- Enron was insolvent at the time of, or became insolvent
       as a result of, the Annuity Transfers;

    -- As a direct and proximate result of the Annuity
       Transfers, Enron and its creditors suffered losses
       amounting to at least the value of the Annuity Transfers;

    -- at the time of the Annuity Transfers, there were Enron
       creditors holding unsecured claims, and insufficient
       assets to pay Enron's liabilities in full;

    -- the Debtors are entitled to avoid the Annuity Transfers
       pursuant to Sections 544 and 548(a)(1)(B) of the
       Bankruptcy Code and Sections 270 to 281 of the New York
       Department Credit Law or other applicable law; and

    -- pursuant to Section 550 of the Bankruptcy Code, the
       Debtors may recover for the benefit of the Debtors'
       estates the value of Annuity Transfers from the initial
       transferee, from an entity for whose benefit the Loan
       Transfers were made, or from any immediate or mediate
       transferee of the initial transferee;

C. Award of interest at the maximum legal rate commencing
    from January 31, 2003 until the entry of judgment;

D. Award of cost of the suit; and

E. Award of reasonable and necessary attorney's fees to the
    extent permitted by law, through and including trial and
    for any subsequent appeal. (Enron Bankruptcy News, Issue No.
    56; Bankruptcy Creditors' Service, Inc., 609/392-0900)


FEDERAL-MOGUL: December 31 Net Capital Deficit Tops $1.4 Billion
----------------------------------------------------------------
Federal-Mogul Corporation (OTC Bulletin Board: FDMLQ) reported
its financial results for the fourth quarter and full year of
2002. Fourth quarter 2002 sales were $1,289 million, compared to
$1,292 million for the same period last year. For the fourth
quarter 2002, Federal-Mogul reported a net loss of $113 million,
compared to a net loss of $112 million in 2001. Excluding
charges for restructuring activities, asset impairments, losses
from divestitures of businesses and Chapter 11 and
Administration-related expenses, Federal-Mogul reported a net
loss from operations of $17 million in the fourth quarter 2002
compared with a net loss from operations of $23 million for the
same period last year. Fourth quarter 2002 net cash provided
from operating activities was $68 million.

For the full year, Federal-Mogul posted sales of $5,422 million,
compared to full year 2001 sales of $5,457 million. The full
year net loss was $1,629 million for 2002, compared to a net
loss in 2001 of $1,002 million. The full year net loss reported
for 2002 included a $1,418 million charge for a cumulative
effect of change in accounting from the adoption of Statement of
Financial Accounting Standard No. 142. Full year 2002 net cash
provided from operating activities was $257 million.

Excluding charges for restructuring, impairment, gains and
losses on sales of businesses, and Chapter 11 and
Administration-related expenses, Federal- Mogul reported full-
year 2002 earnings before income taxes and cumulative effect of
change in accounting principle of $100 million compared to a
loss of $178 million in 2001. The loss reported in 2002 excludes
amortization of goodwill and certain other intangible assets as
a result of the adoption of FAS 142. Also excluded is a portion
of interest expense on pre-petition debt as a result of the
restructuring proceedings. Excluding the aforementioned items,
operating results in 2002 showed gains over the prior year due
to productivity improvements. These improvements were offset by
significant increases in pension costs.

Due to the market performance of the company's pension plans'
investments over the past several years, Federal-Mogul
contributed $26 million to its United States pension plan.
Federal-Mogul has a schedule of contributions to pay
approximately one million British pounds per month in 2003 in
the United Kingdom. Funding strategies are currently under
review for its U.S. plan.

As part of the company's ongoing efforts to reduce its cost
structure, Federal-Mogul's global employment decreased four
percent in 2002 to 47,000 employees.

At December 31, 2002, the Company's balance sheet shows a total
shareholders' equity deficit of about $1.4 billion.

"From an operations standpoint, our efforts in 2002 have
resulted in profitability improvements and productivity
increases. We are using all of our resources, both human and
capital, to improve and grow our operations for the future. In
addition, our announced plan to acquire Honeywell's global
Bendix friction-materials business to grow one of our core
product lines further signifies the exciting future we have
ahead of us," said Frank Macher, chairman and chief executive
officer. "Our recently announced agreement in principle with our
major U.S. creditors on a consensual Plan of Reorganization is
evidence we are on-track to successfully emerge from Chapter 11
this year with a viable capital structure and operations free
from asbestos liability. We will emerge as a stronger Federal-
Mogul ready to capitalize on our sustainable competitive
advantage in both product and process technologies."

                         Aftermarket Sales

Sales of replacement parts to aftermarket customers totaled 45
percent of the company's 2002 sales. Full year 2002 aftermarket
sales were $2,423 million compared to $2,542 million in 2001.
Excluding divestitures and the effects of movement in foreign
exchange, sales decreased by two percent. By geographic region,
2002 sales were 77 percent in the Americas and 23 percent in
Europe and Africa. Fourth quarter 2002 aftermarket sales were
$563 million, compared to $602 million for fourth quarter 2001.
Excluding divestitures and the effects of movement in foreign
exchange, sales decreased by seven percent.

"We are pleased with our performance in this difficult market as
we have been able to increase share through the strength of our
brands and new product introductions," said Macher. "Our
revolutionary one-piece Wagner(R) ThermoQuiet(TM) premium disc
brake pads have exceeded customer expectations, and we are very
proud of this product's recognition as a PACE Award finalist for
significant innovation."

Federal-Mogul earned several notable honors from customers for
its 2002 performance, being named Supplier of the Year for the
second consecutive year by Aftermarket Auto Parts Alliance, and
Sales and Service Vendor of the Year by O'Reilly Auto Parts. In
addition, Federal-Mogul was recognized with brand marketing
awards including 18 Global Design Awards, the most ever won in a
single year, from Aftermarket Business magazine.

                    Original Equipment Sales

Sales of original equipment parts totaled 55 percent of the
company's full year sales. Full year 2002 original equipment
sales were $2,999 million, compared to $2,915 million in 2001.
Excluding divestitures and the effects of movement in foreign
exchange, sales increased by three percent. By geographic
region, 2002 sales were 48 percent in the Americas, 49 percent
in Europe and Africa, and three percent in the rest of the
world. Fourth quarter 2002 sales were $726 million, compared to
$690 million in 2001. Excluding divestitures and the effects of
movement in foreign exchange, sales were essentially flat.

Full year original equipment sales for the global Friction
product line were $374 million, compared to $339 million in
2001. Excluding the effects of movement in foreign exchange,
sales increased by eight percent. By geographic region, 2002
Friction OE sales were 36 percent in the Americas and 64 percent
in Europe and Africa and the rest of the world. In the fourth
quarter, Friction OE sales were $96 million, up 16 percent
compared to fourth quarter 2001 sales excluding the effects of
movement in foreign exchange.

Full year original equipment sales for the global powertrain
product lines of Bearings, Pistons, Piston Rings and Liners, and
Sintered Valve Train and Transmission Products were $1,747
million, compared to $1,712 million in 2001. Excluding
divestitures and the effects of movement in foreign exchange,
sales increased by three percent. By geographic region, 2002
sales of the powertrain OE products were 37 percent in North
America, 62 percent in Europe and one percent in the rest of the
world. In the fourth quarter, powertrain OE sales were $425
million, compared to $406 million in 2001. Excluding
divestitures and the effects of movement in foreign exchange,
sales were flat.

Full year original equipment sales for the global product lines
of Sealing Systems and Systems Protection were $639 million,
compared to $630 million in 2001. Excluding the effects of
movement in foreign exchange, sales were flat. By geographic
region, 2002 Sealing Systems and Systems Protection OE sales
were 74 percent in North America, 25 percent in Europe and
Africa, and one percent in the rest of the world. In the fourth
quarter, Sealing Systems and Systems Protection OE sales were
$150 million, compared to $146 million in 2001. Excluding the
effects of movement in foreign exchange, sales increased one
percent.

Federal-Mogul is a global supplier of automotive components,
sub-systems, modules and systems serving the world's original
equipment manufacturers and the aftermarket. The company
utilizes its engineering and materials expertise, proprietary
technology, manufacturing skill, distribution flexibility and
marketing power to deliver products, brands and services of
value to its customers. Federal-Mogul is focused on the
globalization of its teams, products and processes to bring
greater opportunities for its customers and employees, and value
to its constituents.

Headquartered in Southfield, Michigan, Federal-Mogul was founded
in Detroit in 1899 and today employs 47,000 people in 24
countries. On October 1, 2001, Federal-Mogul decided to separate
its asbestos liabilities from its true operating potential by
voluntarily filing for financial restructuring under Chapter 11
of the Bankruptcy Code in the United States and Administration
in the United Kingdom. For more information on Federal-Mogul,
visit the company's Web site at http://www.federal-mogul.com

Federal-Mogul Corp.'s 8.800% bonds due 2007 (FDML07USR1) are
trading at about 13 cents-on-the-dollar, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=FDML07USR1
for real-time bond pricing.


FELCOR LODGING: S&P Drops Corporate Credit Rating to B+ from BB-
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating for hotel owner FelCor Lodging Trust Inc. to 'B+' from
'BB-'.

At the same time, Standard & Poor's removed the rating from
CreditWatch, where it was placed on February 5, 2003. The
outlook is stable. At the end of 2002, the Irving, Texas-based
company had $1.9 billion of debt on its balance sheet.

FelCor's operating cash flows were materially affected by the
slowing economy and reduced demand from business travelers.
FelCor's 2002 RevPAR declined 8.1% year-over-year and its EBITDA
of $306 million, declined 17%. For 2003, management expects flat
RevPAR, and EBITDA of $277 million - $289 million. This
represents a 6%-10% drop in EBITDA from 2002 as a result of
competitive rates and higher operating costs. "Based on
management's 2003 guidance, FelCor's credit measures are not
expected to recover to levels consistent with the prior 'BB-'
rating in the intermediate term," said Standard & Poor's credit
analyst Stella Kapur.

The ratings for FelCor reflect its high debt leverage for the
rating as a result of the sluggish economy and the terrorist
attacks of Sept. 11, 2001. Offsetting these factors are its
large base of owned hotels, its fairly geographically diverse
portfolio, its good management team, and its ownership of
primarily full-service properties that are concentrated in
the upper- and mid-scale segments.


FLEMING COMPANIES: Shipments to Kmart Stores to End by March 8
--------------------------------------------------------------
Fleming Companies, Inc., (NYSE: FLM) has been asked by Kmart to
conclude shipments to Kmart's stores by March 8, 2003. Fleming
has concurred with this date. This action follows the joint
announcement that Fleming and Kmart made February 3, 2003,
regarding the termination of the supply relationship. In
coordination with Kmart, Fleming has begun winding down all
Kmart-related inventories in Fleming's distribution network.

"Based on Kmart's request for ending the supply relationship on
March 8, we are moving expediently toward conclusion of the
Kmart supply arrangement," said Mark Hansen, Fleming Chairman
and Chief Executive Officer. "We are finalizing our action plan
for necessary adjustments to our distribution network and
support structure, which will allow us to maintain an efficient
supply network for the nearly 50,000 retail locations served by
the company across the nation. We look forward to moving ahead
with our business strategy."

Fleming will provide the related financial information,
including guidance for 2003, upon the completion of the
company's action plan.

With its national, multi-tier supply chain network, Fleming is
the #1 supplier of consumer package goods to retailers of all
sizes and formats in the United States. Fleming serves nearly
50,000 retail locations, including supermarkets, convenience
stores, supercenters, discount stores, concessions, limited
assortment, drug, specialty, casinos, gift shops, military
commissaries and exchanges and more. Fleming serves more than
600 North American stores of global supermarketer IGA. To learn
more about Fleming, visit the Company's Web site at
http://www.fleming.com

As reported in Troubled Company Reporter's February 7, 2003
edition, Standard & Poor's lowered its corporate credit
rating on grocery wholesaler Fleming Cos. Inc., to 'B' from
'BB-'. The rating remains on CreditWatch with negative
implications, where it was placed on September 5, 2002.

Lewisville, Texas-based Fleming has no debt maturities until
2007.

The downgrade reflects the increased challenges Fleming faces in
its core wholesale business now that the Kmart Corp. supply
contract has been terminated, as well as ongoing difficulties
with the integration and exit of other business units. Since the
Kmart contract represented about $3 billion in revenues, Fleming
will likely need to reduce its distribution capacity, incurring
substantial one-time costs, unless it can replace the volume
quickly. Although the Kmart business was low-margin and the
lower distribution volume will reduce working capital needs, the
impact on Fleming's overall operating efficiency is uncertain.

Fleming Companies Inc.'s 10.125% bonds due 2008 (FLM08USN1),
DebtTraders reports, are trading between 62 and 64. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=FLM08USN1for
real-time bond pricing.


FREESTAR TECH.: Request for Injunction against Margaux Nixed
------------------------------------------------------------
Margaux Investment Management Group S.A., reported that a motion
brought by Boat Basin Investors LLC, Papell Holdings Ltd, Marc
Siegel, David Stefansky and Richard Rosenblum in January 2003 -
naming the Margaux Group - was denied Tuesday February 11, 2003.

The Plaintiffs' injunction, which moved for the delivery of
7,707,332 shares of Freestar Technologies, Inc., unrestricted
common stock, was denied and the action stayed by the Southern
District Court of New York, pending the outcome of a Chapter 7
Petition brought by separately by the Plaintiffs against
FreeStar Technologies, Inc.

Margaux Investment Management Group S.A., offers qualified,
independent fund management and investment services with a focus
on absolute returns to a select group of investors. Margaux's
clients include financial institutions, high-net worth
individuals, trusts and corporate entities. The firm's fund
management services are based on fundamental macroanalysis and
company-specific microanalysis. For more information, please
visit the Company's Web site at http://www.margauxgroup.ch


GENTEK INC: Gets Court Okay to Implement Key Employee Programs
--------------------------------------------------------------
GenTek Inc., and its debtor-affiliates sought and obtained Court
authority to implement or continue certain key employee programs
and honor, in part, prepetition obligations arising  under the
programs.

             Prepetition Executive Retention Plan

In connection with the commencement of certain restructuring
initiatives, on April 2002, the Debtors initiated a Prepetition
Retention Plan to ensure that they would be able to rely on the
services of their most essential Key Employees during this
period.  The Prepetition Retention Plan provided for retention
bonuses to be paid to a select group of 23 Key Employees in two
installments, with 30% of each bonus to be paid in December 2002
and the remaining amount of each bonus payable in December 2003.

Twenty-three Key Employees are eligible to receive payments
under the Prepetition Retention Plan.  These 23 Key Employees
are the Debtors' senior and most irreplaceable employees --
excluding the Debtors' Chief Executive Officer -- whose energies
and talents will be critical to the Debtors' successful
reorganization.  In choosing to remain in the Debtors' employ
and forgo other employment opportunities during the critical
months leading up to the commencement of these cases, many of
the 23 Key Employees have relied on the promise of the
Prepetition Retention Plan, which was intended to, among other
things, offset the Debtors' inability to offer meaningful stock
options or other equity-based compensation.  The 23 Key
Employees have not yet received any payment under the
Prepetition Retention Plan.

In view of that, the Debtors ask Judge Walrath for permission to
honor their obligations under the Prepetition Retention Plan
with respect to the portions of the retention bonuses due to be
paid to the 23 Key Employees in December 2002.  The Debtors are
obligated to pay $900,000 on account of the December 2002 bonus.

The Debtors do not intend to pay the remaining amount of
Prepetition Retention Plan bonuses currently scheduled to be
paid in December 2003.  The amounts payable in December 2003
will be replaced by the KERP program, and all eligible Key
Employees will be required to waive their remaining rights under
the Prepetition Retention Plan as a condition of their
participation in the KERP program.

                   Key Employee Retention Plan

The Debtors want to implement a new KERP program designed to
address the heightened uncertainties facing them and their
employees as a result of the Chapter 11 Petition.

The proposed KERP provides for payment of periodic retention
bonuses to, and enhanced severance protection for, 220 Key
Employees during the pendency of these Chapter 11 cases.  The
KERP also provides a smaller group of 15 Key Employees with
enhanced severance protections in lieu of other severance rights
in the event that any of 15 Key Employees are terminated in
connection with a sale of a business segment in which they are
employed or with a change in control of the Debtors, which will
not include the Debtors' emergence from bankruptcy as a stand
alone business.

A. KERP Retention Bonus Plan

The KERP provides retention bonuses to the 220 Key Employees
payable in installments throughout the duration of the Debtors'
Chapter 11 cases.  Under the proposed KERP, the Debtors will
make these retention bonus payments:

  (a) 50% of the annual retention bonus amount will be paid six
      months after the Petition Date;

  (b) 50% of the annual retention bonus amount will be paid
      12 months after the Petition Date, or two months after the
      date the Debtors emerge from Chapter 11, if the Emergence
      Date occurs less than a year after the Petition Date; and

  (c) If the Debtors' Chapter 11 cases extend beyond 12 months
      from the Petition Date:

          (i) 50% of the annual retention bonus amount for each
              full six-month period will be paid after the 12-
              month anniversary of the Petition Date; and

         (ii) a prorated portion of 50% of the annual retention
              bonus amount will be paid two months after the
              Emergence Date for the six-month period in which
              the Debtors emerge from Chapter 11 bankruptcy.

The amount of each Key Employee's annual bonus under the
proposed KERP will range from 10% to 125% of that Key Employee's
annual base salary.  However, GenTek's Chief Executive Officer
and Chief Financial Officer will each be entitled to receive an
annual KERP retention bonus equal to 150% of their annualized
base salaries.

The payment of the proposed KERP retention bonuses on a periodic
basis during the pendency of these cases will be in lieu of the
December 2003 bonuses otherwise payable to eligible Key
Employees under the Prepetition Retention Plan.

The payment of the proposed KERP retention bonuses will
generally be conditioned on each eligible Key Employee's
remaining actively employed and in good standing as of each
payment date:

  -- If a Key Employee voluntarily terminates employment during
     the pendency of the Debtors' Chapter 11 cases, or is
     terminated for cause, all future KERP retention bonuses
     payable to that person including any prorated portions,
     will be forfeited;

  -- If a participating Key Employee dies, becomes disabled or
     is terminated other than for cause, that person will be
     eligible to receive a prorated payment of the KERP
     retention bonus applicable to the period before that Key
     Employee's termination; and

  -- If a participant's termination is related to the sale of
     the business segment in which that participant works, he
     will be entitled to full payment of the KERP retention
     bonus for the period in which the sale occurs.  In the
     event of a change of control, the Debtors will require
     GenTek's buyer to assume and continue the KERP Retention
     Bonus Plan, provided, however, that the Debtors' emergence
     from Chapter 11, unless in conjunction with a sale of the
     Debtors' business, will not be deemed a change of control.

The Debtors intend to set aside $500,000 in a discretionary KERP
retention bonus pool, including amounts of future KERP bonuses
that become available due to termination of Key Employees. The
pool will be used to make KERP retention payments to individuals
who are hired after the KERP program is approved to replace
departing Key Employees, as well as to compensate existing
employees who become Key Employees during the pendency of the
KERP program.

The Debtors estimate that the total annual cost of the proposed
KERP retention bonus program assuming all Key Employees remain
eligible and excluding any discretionary amounts is $10,600,000.

B. KERP Enhanced Severance Benefits

The proposed KERP program also provides enhanced severance
benefits to eligible Key Employees, who will receive a lump sum
payment of salary as well as a continuation of medical and life
insurance benefits -- depending on the identity and position of
each individual Key Employee -- with respect to a period from
six months to three years from the employee termination date.
The treatment is intended as an enhancement of the Debtors'
current severance practice, under which the majority of Key
Employees are entitled to severance for a period of between six
and 12 months following termination.  Those Key Employees who
terminate their employment voluntarily, or who are terminated
for cause, will not be eligible to receive KERP severance
payments.

C. KERP Chance in Control Protections

The KERP program further provides for alternative severance
protections -- which will be in lieu of any other severance
rights -- to 15 of the Debtors' most senior Key Employees in the
event that they are terminated without cause within 12 months
after a change of control of the Debtors or a sale of the
business segment by which they are then employed.  Under this
provision, each covered Key Employee will receive a severance
payment of at least 150% and no more than 200% of the sum of
that person's annualized base salary plus annualized performance
bonus target.  However, the Debtors' CEO and CFO will each be
entitled to receive a change of control severance payment equal
to 300% of the sum of his annualized base salary plus annualized
performance bonus target.  The Debtors' emergence from Chapter
11 pursuant to a confirmed plan of reorganization, unless in
conjunction with a sale of the Debtors' business, will not be
deemed a "change of control" for purposes of the KERP.

The Debtors estimate the theoretical maximum cost of their Key
Employee severance program, as enhanced by the proposed KERP
program and including Key Employee change in control
protections, to be $35,000,000.  However, the Debtors believe
that the actual cost of their Key Employee severance program
will be far less than this theoretical maximum amount.

              Supplemental Executive Retirement Plan

Before the Petition Date, the Debtors maintained SERP programs
for their Key Employees, which provided salary deferral
contributions, employer matching contributions, retirement
account contributions and pension plan contributions in excess
of the deferral limitations and the discrimination tests set
forth in Sections 401 and 402 of the Internal Revenue Code of
1986. The Debtors' SERP plans are each, in part, an unfunded
"excess benefit plan" within the meaning of the ERISA of 1974
and, in part, an unfunded plan of deferred compensation for
certain Key Employees.

Although SERP contributions vested immediately, the SERP
programs are unfunded and provide that any benefits payable
under the programs will be paid out of the Debtors' general
assets.  As of the Petition Date, the Debtors estimate that the
aggregate unfunded balance for current employees under all SERP
programs, excluding balances owed to their CEO, was $1,700,000,
consisting of $1,200,000 in savings balances and $500,000 in
retirement balances.

The Debtors want to honor, in part, these prepetition unfunded
SERP obligations for their existing Key Employees:

  (a) With respect to active employees other than the CEO, the
      Debtors will pay 100% of existing SERP balances in the
      ordinary course of their business, provided, however, that
      no active employee will be entitled to a cash distribution
      on account of a SERP balance until the 2nd anniversary of
      the Emergence Date.  The Debtors anticipate paying
      $1,700,000 for the active employees;

  (b) The Debtors will honor 100% of their CEO's SERP savings
      balance.  The CEO will further be eligible for a cash
      payout of his SERP savings balance on retirement.
      However, the proposed KERP provides that no cash payout
      with respect to the CEO's SERP savings balance may occur
      until two years following the Emergence Date.  The Debtors
      expect to pay $1,100,000; and

  (c) The Debtors will honor 50% of the CEO's SERP pension
      balance, subject to a five-year vesting period, such that
      10% of the existing prepetition SERP pension balance will
      vest on each of the 1st through 5th anniversaries of the
      Emergence Date.  Vesting will be contingent on the CEO's
      continued employment as of each vesting date.  The Debtors
      further propose that the CEO be eligible for cash payout
      of any vested SERP pension balances upon retirement
      consistent with the provisions of the existing SERP
      program, except that the CEO will not be entitled to a
      cash distribution on account of a SERP balance until the
      2nd anniversary of the Emergence Date.  The Debtors
      estimate that the total value of 50% of the CEO's
      prepetition SERP pension balance is $1,100,000.

            Debtors Will File Employee Info Under Seal

The Debtors sought and obtained the Court's consent to file as
confidential document an exhibit which reports (a) the
individual salary information and (b) information regarding
proposed individual treatment under the proposed KERP Program
for over 200 employees affected by the KERP Motion.  The
Retention Information will remain under seal and confidential
and will not be available to anyone other than:

    1. the Court;
    2. the U.S. Trustee;
    3. the counsel for the agent to the prepetition lenders; and
    4. the Official Committee of Unsecured Creditors' counsel.

(GenTek Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


GERLING GLOBAL: AM Best Affirms B++ Financial Strength Ratings
--------------------------------------------------------------
A.M. Best Co. has affirmed the financial strength ratings of B++
(Very Good) of Gerling Global Life Insurance Company (Toronto)
and Gerling Global Life Reinsurance Company (Los Angeles, CA).
These ratings remain under review, but the implications have
been changed from negative to developing.

These rating actions reflect A.M. Best's view that the assets of
these companies are sufficiently protected to meet
policyholders' claims and will not be accessed to finance any
potential difficulties of their ultimate parent company, Gerling
Konzern Globale Ruckversicherungs AG. GKG is currently seeking a
buyer for its life reinsurance operations. GKG's life
reinsurance portfolio and its life reinsurance subsidiaries are
in the process of being transferred to the recently established
Gerling Life Reinsurance GmbH.

A.M. Best remains in close discussions with Gerling and will
resolve the under review status as soon as the new ownership is
determined.


GLIMCHER REALTY: Reports Improved Fourth Quarter 2002 Results
-------------------------------------------------------------
Glimcher Realty Trust, (NYSE: GRT), one of the country's premier
retail REITs, reported results for its fourth quarter and year
ended December 31, 2002. Funds From Operations per diluted share
were $0.69 for the fourth quarter of 2002 and $2.49 for the year
ended December 31 compared to $0.66 and $2.72 for the fourth
quarter and year ended December 31, 2001, respectively. Fourth
quarter revenues increased 15.5% to $80.7 million primarily due
to the inclusion of operating results for four malls that were
reported as joint ventures in the fourth quarter of 2001 for
which the Company acquired the third-party joint venture
interests in 2002. Higher average occupancy in the mall
portfolio also contributed to the revenue increase. Full year
revenues increased 7.7% to $270.2 million in 2002 as compared to
2001. FFO increased 16.6% to $25.8 million for the fourth
quarter due to the stronger revenue performance in 2002. FFO is
an industry standard measure for evaluating operating
performance defined as net income plus real estate depreciation
less gains or losses from depreciable property sales,
extraordinary items and cumulative effect of accounting changes.

"I am very pleased to report that our strategic efforts to focus
on growth in the mall portfolio, reduce our investment in non-
core community center assets and reduce leverage has been
substantially completed in 2002," said Michael P. Glimcher,
President. "Today over 85% of the Company's revenues, operating
income and minimum rents is from our regional mall portfolio,
and for the first time in our history, in-line mall store
occupancy exceeds 90% and average in-line mall store sales are
$300 per square foot. The Company's community center asset
disposition program generated proceeds of $275 million in 2002,
which after closing costs, were used to reduce debt. Over the
past two years our debt to market capitalization has improved
from 65.8% to 57.9% at December 31, 2002. Our improved capital
structure and concentration in regional mall properties ideally
positions Glimcher for growth."

                  Fourth Quarter 2002 Results

Revenues increased 15.5% to $80.7 million compared with revenues
of $69.8 million in 2001. The inclusion of revenues from both
Almeda Mall and Northwest Mall, formerly joint ventures until
the Company acquired the third-party interests in November 2002,
and both Dayton Mall and SuperMall of the Great Northwest where
the third-party joint venture interests were acquired in the
third quarter of 2002, were the primary contributors to the
increase in fourth quarter revenues. The acquisition of the
third-party joint venture interest in these four malls in 2002
is consistent with the Company's strategy to have predominantly
a regional mall portfolio. At December 31, 2002, the Company had
a joint venture interest in three of its 23 regional mall
properties as compared to seven of 23 regional malls in 2001.
Also contributing to the revenue increase was higher average
occupancy in the mall portfolio, partially offset by the
reduction in revenues resulting from mall anchor tenant
vacancies.

Fourth quarter FFO increased 16.6% to $25.8 million from $22.1
million in 2001. FFO per diluted share was $0.69 for the year
ended December 31, 2002 as compared to $0.66 in the prior year.
For regional malls, the Company realized NOI growth of 1.7% and
same-store revenue was slightly lower by 1% as compared to the
fourth quarter of 2001. Same-store community center revenue and
NOI decreased 0.3% and 11.2%, respectively, compared to the
fourth quarter of 2001.

                    Year to Date Results

Revenue for 2002 rose 7.7% to $270.2 million from $250.9 million
in the prior year period. FFO increased 5.6% to $89.1 million
compared with $84.3 million for 2001. FFO was lower on a per
share basis at $2.49 per diluted share in 2002 compared to $2.72
per diluted share in 2001, reflecting the dilution that resulted
from asset sales. Earnings per diluted share were $0.75 at
December 31, 2002. In 2001 the Company reported earnings per
diluted share of $1.12, including $0.72 attributable to a $22.4
million gain related to the Company's redemption of preferred
shares. On a comparative basis, the $0.35 increase in earnings
per diluted share in 2002 is primarily due to the operating
income increase of $7.4 million and gains on asset sales.

                         Asset Sales

During 2002, the Company sold 27 community centers and 3 single
tenant assets for gross proceeds of $274.7 million.

During the fourth quarter the Company sold Meadowview Square, a
151,242 square foot property in Kent/Ravenna, Ohio for $9.5
million. The Company entered into a contract on June 6, 2002 for
the sale of 22 community center and single tenant assets. The
initial phase of the transaction involving the sale of 13 of
these properties for $106.0 million was completed on September
3, 2002. On December 6, 2002 the sale of the remaining 9
properties was completed for $94.3 million. Substantially all of
the $12.5 million gain recorded in the fourth quarter is from
the sale of the 22 properties. Net gains and losses from the
sale of previously depreciated real estate are included in the
captions titled "Gain (Loss) on Sale of Properties" and are
excluded from the computation of FFO. The sales proceeds after
payment of related closing costs were used to reduce outstanding
borrowings.

                            Outlook

The Company is maintaining its FFO guidance for 2003 in the
range of $2.52 to $2.60 per diluted share. This guidance assumes
additional asset sales in 2003 of $40 million.

                      Dividend Performance

For the fourth quarter of 2002, the Company declared a cash
dividend of $0.4808 per common share, which was paid on January
15, 2003, to common shareholders of record as of December 31,
2002. The cash dividend is equivalent to $1.9232 on an
annualized basis. The Company also paid a cash dividend of
$0.578125 on its 9.25% Series B Preferred Shares on January 15,
2003, to shareholders of record on December 31, 2002. On an
annualized basis, this is the equivalent of $2.3125 per
preferred share.

Glimcher Realty Trust -- a real estate investment trust whose
corporate credit and preferred stock ratings are rated by
Standard & Poor's at BB and B, respectively -- is a recognized
leader in the ownership, management, acquisition and development
of enclosed regional and super-regional malls, and community
shopping centers.

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


GLOBAL CROSSING: Urges Court to Say Yes to Accenture Settlement
---------------------------------------------------------------
Global Crossing Ltd., and its debtor-affiliates ask Judge Gerber
to approve their Settlement Agreement with Accenture LLP, which
includes the assumption of certain underlying agreements between
the parties.

Michael F. Walsh, Esq., at Weil Gotshal & Manges LLP, in New
York, informs the Court that Accenture LLP has completed a very
significant consulting and software customization project for
the GX Debtors.  Accenture began the work before the Petition
Date and completed the project in March 2002.  Two disputes have
arisen under the agreements concerning:

    -- what portion of the work performed is attributable to the
       postpetition period; and

    -- whether Accenture holds intellectual property rights that
       the GX Debtors need to continue to benefit from the work
       performed.

The GX Debtors and Accenture have resolved those issues recently
and have entered into a settlement agreement.

Mr. Walsh recounts that the Debtors and Accenture are parties to
an Independent Contractor/Consultant Agreement, dated March 22,
2001.  Pursuant to the Master Agreement, Accenture would provide
consulting services to the Debtors.  The terms of each request
would be governed by separate letters sent from Accenture to the
Debtors.  Under an arrangement letter dated June 11, 2001,
Accenture agreed to provide consulting services relating to the
installation, customization, and integration of certain
financial software into the Debtors' electronic accounting and
financial reporting systems.

According to Mr. Walsh, the Debtors use the SAP Software as
their principle accounting and financial reporting tools.
Although Accenture is not the author of the SAP Software,
extensive modifications were necessary to adapt the software to
the Debtors' businesses.  Accenture and the Debtors' personnel
have spent thousands of hours on the Project, which was
completed successfully.  Key elements of the Project were
performed after the Petition Date.  Under the terms of the
Master Agreement, Accenture owns all the intellectual property
rights related to the Project until the Debtors have paid the
full project price.

Accenture maintains that:

    -- it is entitled to payment in full of amounts owing under
       the Agreements amounting to $21,000,000; and

    -- $5,000,000 of the Disputed Amount is entitled to
       administrative priority.

The Debtors contest the priority of the Disputed Amounts.
However, absent the Debtors' assumption of the Agreements, they
may lose the use of the IP Rights.  To assume the Agreements,
the Debtors are required to cure all defaults, which would
require payment in full of the Disputed Amount.

Accordingly, the Debtors and Accenture have agreed to a
settlement of amounts due under the Agreements dated
November 22, 2002.  The salient terms of the Settlement
Agreement are:

    A. The Debtors will make these payments:

       -- $1,000,000 to Accenture without further delay; and

       -- $3,800,000, payable at the Debtors' option in the
          ordinary course of their business, from any
          administrative claim or reserve established under the
          Plan of Reorganization, or as an assumed liability of
          the Reorganized Debtors, in eight monthly installments
          of $475,000;

    B. Accenture will have a single allowed administrative
       expense claim against the Debtors in an aggregate amount
       not to exceed the Settlement Payments.  Accenture will
       not be required to file any proof of claim in the
       Debtors' Chapter 11 cases;

    C. The Debtors will assume the Agreements.  The Debtors are
       not required to make any cure payments in connection with
       the Assumption;

    D. The assumption and payments will result in a transfer of
       the IP Rights to the Debtors;

    E. During calendar years 2003 and 2004, the Debtors will
       grant Accenture a right to bid on formal requests for
       proposals with respect to systems development projects,
       which the Debtors wish to pursue.  If, in the  Debtors'
       sole and absolute discretion, Accenture's bid is equal to
       or superior than any other bids in all material respects,
       Accenture will be deemed a "Preferred Vendor" and the
       Debtors will negotiate in good faith with Accenture for
       these Services.  The Debtors reserve the right to elect
       not to secure the applicable Services from Accenture or
       any other party; and

    F. The Debtors and Accenture exchange mutual releases,
       provided, however, that these releases will not affect
       obligations expressly preserved by or contained in the
       Settlement Agreement.

Mr. Walsh believes that the Settlement Agreement is fair and
equitable and falls well within the range of reasonableness as
it enables the parties to avoid the costs of litigation to
resolve outstanding issues arising from the Agreements.  Absent
authorization to enter into the Settlement Agreement, the
Debtors and Accenture would require judicial intervention to
resolve the portion of the Disputed Amounts that would be
entitled to administrative priority in the event the Debtors
reject the Agreements.  However, even winning the dispute would
force the Debtors to retain another consultant to recreate the
work done under the Project.  The undertaking of litigation
would be a costly drain on the resources of the Debtors' estates
and would divert the attention of its management and legal
personnel from the current efforts to maximize the value of the
estates.

Mr. Walsh tells the Court that the Settlement Agreement provides
the Debtors with an avenue to assume the Agreements, thereby
obtaining the permanent transfer of the IP Rights, at a
significantly reduced cost.  Without approval of the Settlement
Agreement, the Debtors would have to pay $21,000,000 to cure any
defaults under the Agreements prior to assuming the Agreements.
Absent assumption of the Agreements, the Debtors would be unable
to continue using the IP Rights, which are extremely important
to their ability to use the SAP Software.  In addition, the SAP
Software and the IP Rights enable the Debtors to produce
financial forecasts and report other important financial
information to the Court and parties-in-interest.  It is,
therefore, important to the Debtors to have the ability to
continue using the IP Rights.  The Settlement Agreement provides
the most cost effective way for the Debtors to continue its use
of the SAP Software.

Accordingly, the Court should approve the assumption of the
Agreements in connection with the Settlement Agreement. (Global
Crossing Bankruptcy News, Issue No. 34; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


GRAHAM PACKAGING: Posts Improved Net Sales for December Quarter
---------------------------------------------------------------
The following are the preliminary results of Graham Packaging
Company, L.P., for the quarter and the year ended December 31,
2002. The results for the quarter and year ended December 31,
2002 are subject to completion of the Company's normal year-end
closing procedures.

For the quarter ended December 31, 2002, the Company estimates
that it had net sales of $211.7 million and operating income of
$13.7 million compared to net sales of $209.1 million and an
operating loss of $13.3 million for the quarter ended December
31, 2001. For the quarter ended December 31, 2002, it estimates
that it had Adjusted EBITDA (as defined below) of $44.8 million
compared to $41.3 million for the quarter ended December 31,
2001. This represents an 8% increase in Adjusted EBITDA over the
same period last year on an increase in net sales of 1%.

For the year ended December 31, 2002, the Company estimates that
it had net sales of $906.7 million and operating income of $95.2
million compared to net sales of $923.1 million and operating
income of $55.5 million for the year ended December 31, 2001.
For the year ended December 31, 2002, it estimates that it had
Adjusted EBITDA of $198.2 million compared to $171.5 million for
the year ended December 31, 2001. This represents a 16% increase
in Adjusted EBITDA over the same period last year on a decrease
in net sales of 2%.

As of December 31, 2002, Graham Packaging had outstanding
indebtedness of $1,070.6 million compared to $1,052.4 million as
of December 31, 2001.

Adjusted EBITDA is not intended to represent cash flow from
operations as defined by generally accepted accounting
principles and should not be used as an alternative to operating
income or net income as an indicator of operating performance or
to cash flow as a measure of liquidity.

Adjusted EBITDA is defined in Graham Packaging's senior credit
agreement and its indentures as earnings before minority
interest, extraordinary items, interest expense, interest
income, income taxes, depreciation and amortization expense,
impairment charges, the ongoing $1.0 million per year fee paid
pursuant to the Blackstone monitoring agreement, non-cash equity
income in earnings of joint ventures, other non-cash charges,
recapitalization expenses, special charges and unusual items and
certain non-recurring charges.

Adjusted EBITDA is included here because covenants in Graham
Packaging's debt agreements are tied to ratios based on that
measure. While Adjusted EBITDA and similar measures are
frequently used as measures of operations and the ability to
meet debt service requirements, these terms are not necessarily
comparable to other similarly titled captions of other companies
due to the potential inconsistencies in the method of
calculation.

                       *   *   *

As reported in Troubled Company Reporter's June 19, 2002,
edition, Standard & Poor's assigned its B rating to Graham
Packaging's $700 million credit facility.

That credit facility -- according to information obtained from
http://www.LoanDataSource-- is among:

     (a) GPC Capital Corp. II
         (to be renamed Graham Packaging Company Inc.),

     (b) Graham Packaging Company, L.P., and

     (c) GPC Capital Corp. I,

as Borrowers, and

     (1) Deutsche Bank Trust Company Americas, Individually,
         and as Administrative Agent and as Fronting Bank,

     (2) Deutsche Bank Securities Inc.,
         as Sole Lead Arranger and Sole Book Runner,

     (3) Salomon Smith Barney Inc., as Syndication Agent, and

     (4) Citicorp North America, Inc.,

and contains two key financial covenants:

     (A) Interest Coverage Ratio -- Graham agrees that it will
not permit the ratio of (a) EBITDA to (b) Cash Interest Expense
to be less than:
                                            Maximum Interest
               Testing Period                Coverage Ratio
               --------------               ----------------
          Closing Date to and
             including September 30, 2003       2.10:1.0

          October 1, 2003 to and
             including September 30, 2004       2.25:1.0

          October 1, 2004 to and
             including September 30, 2005       2.50:1.0

          October 1, 2005 and thereafter        2.70:1.0

      (B) Net Leverage Ratio -- Graham agrees that it will not
permit the ratio of the ratio of (a) Total Net Debt to (b)
EBITDA to exceed:
                                              Maximum Net
               Testing Period                Leverage Ratio
               --------------                --------------
          Closing Date to and
            including June 30, 2003             5.95:1.0

          July 1, 2003 to and
            including September 30, 2003        5.75:1.0

          October 1, 2003 to and
            including June 30, 2004             5.50:1.0

          July 1, 2004 to and
            including September 30, 2004        5.25:1.0

          October 1, 2004 to and
            including June 30, 2005             5.00:1.0

          July 1, 2004 to and
            including September 30, 2005        4.75:1.0

          October 1, 2005 to and
            including June 30, 2006             4.50:1.0

          July 1, 2006 to and
            including December 31, 2006         4.25:1.0

         January 1, 2007 and thereafter         4.00:1.0

Graham is a worldwide leader in the design, manufacture and sale
of customized blow molded plastic containers for the branded
food and beverage, household and personal care and automotive
lubricants markets with 55 plants throughout North America,
Europe and Latin America.


HASBRO INC: FY 2002 GAAP Net Loss Stands at $170.7 Million
----------------------------------------------------------
Hasbro, Inc., (NYSE: HAS) reported 2002 full year and fourth
quarter financial results. For the year, excluding certain non-
recurring items detailed below, the Company had net earnings of
$106.8 million, compared to earnings excluding certain non-
recurring items announced last year of $72.1 million. The
Company reported a GAAP (Generally Accepted Accounting
Principles) net loss of $170.7 million, including cumulative
effect of an accounting change of $1.42 per diluted share,
compared to net earnings last year of $59.7 million. Eliminating
the impact of amortization of goodwill and intangible assets
with indefinite lives from 2001 would have resulted in GAAP net
earnings for 2001 of $104.7 million.

"We are very pleased with our accomplishments in 2002. Excluding
certain non-recurring items, we delivered strong earnings and
exceeded consensus estimates for both the fourth quarter and the
full year in a very challenging economic and retail
environment," said Alan G. Hassenfeld, Chairman and Chief
Executive Officer.

"Our strategy of driving core brands is working as a number of
brands --including G.I. JOE, TRANSFORMERS, PLAY-DOH, LITE BRITE
and MAGIC THE GATHERING trading card games were all up
significantly for the fourth quarter," Hassenfeld continued.

For the fourth quarter, excluding non-recurring items detailed
below, the Company had net earnings of $72.9 million, compared
to $63.8 million last year before non-recurring items. The
Company reported GAAP net earnings of $62.2 million, compared to
net earnings of $52.5 million. Adjusting 2001 GAAP net earnings
for the impact of amortization noted above would result in 2001
net earnings for the quarter of $68.7 million.

In the fourth quarter, non-recurring items included a before and
after-tax charge of 4.8 million pounds sterling or approximately
U.S. $7.6 million, announced yesterday by the Company with
respect to decisions by the Office of Fair Trading in its
investigation of pricing practices of the Company's U.K.
subsidiary. Also in the fourth quarter, there is a non-cash,
after-tax charge of $3.2 million related to a further decline in
the value of the Company's investment in Infogrames
Entertainment SA. The 2001 fourth quarter non-recurring items
included an after-tax loss of $11.3 million related to the
deteriorating business environment in Argentina.

For the full-year 2002 results, non-recurring items included a
$245.7 million net of tax, non-cash charge as a cumulative
effect of a change in accounting principle related to the
adoption of FASB 142 "Goodwill and Other Intangibles." In
addition to the OFT charge discussed above, non-recurring items
also included a total non-cash, after-tax charge of $31.7
million related to the decline in the value of the Company's
investment in Infogrames Entertainment SA and $7.6 million after
tax income from interest received from a U.S. tax settlement. In
addition to the Argentina charge discussed above, non-recurring
items in 2001 also included a $1.1 million, net of tax, full
year cumulative effect of an accounting change that resulted
from the implementation of FASB 133.

Total fourth quarter net revenues were $997.4 million, compared
to $988.7 million a year ago. For the year, net revenues
worldwide were $2.8 billion, a decrease of 1% compared to the
prior year of $2.9 billion.

Revenues in the U.S. Toys segment were $996.5 million for the
year and $288.8 million for the quarter, an increase of 7% and
2%, respectively. Full year operating profit increased
significantly year over year to $75.7 million, compared with
$15.8 million last year. The segment experienced strength in
sales of certain core product lines including G.I. JOE,
TRANSFORMERS, PLAY-DOH and PLAYSKOOL. The Company also had a
number of successful new product introductions, including
BEYBLADES and FURREAL FRIENDS, two of the industry's hottest
products.

Revenues in the Games segment were $739.8 million for the year
and $269 million for the quarter, a decline of 8% and an
increase of 6%, respectively. Revenue for the year was impacted
by the decline in licensed trading card games and electronic
games. However, retail sales of board games in our top five U.S.
accounts continued to do well, with double-digit increases for
both the year and the quarter. In addition, the adult category
was up significantly at retail, led by the success of TRIVIAL
PURSUIT 20th ANNIVERSARY EDITION. The Games segment continued to
be profitable, with full year operating profit of $124.5 million
compared to $156.1 million last year.

International segment revenues were $970.8 million for the year
and $392 million for the quarter, a decline of 3% and 2%,
respectively. For the full year and quarter, this represents a
decline of 6% and 8% in local currency, respectively. Revenue
for the year was impacted by the decline in licensed trading
card games and electronic toys. However, the segment experienced
strength in sales of certain core product lines including
TRANSFORMERS, PLAY-DOH, MICRO-MACHINES and MAGIC THE GATHERING
trading card games. The segment continued to be profitable, with
operating profit of $12.7 million, prior to the OFT charge,
compared with operating profit of $28.7 million in the prior
year.

"We are pleased with the progress we have made in 2002," said
Alfred J. Verrecchia, President and Chief Operating Officer. "We
maintained our focus on managing the balance sheet as we reduced
inventory levels and increased cash. Inventories decreased by
$27.3 million or 13% and total debt, net of cash, decreased $384
million as compared to the fourth quarter last year and was down
$684 million compared to two years ago."

"Going forward, we believe over time we can grow revenue between
three to five percent per annum and we expect to deliver
operating margins of 10% or better this year," Verrecchia
concluded.

Full Year Earnings Before Interest, Taxes, Depreciation and
Amortization (EBITDA) was $403 million, compared to $435 million
last year.

Hasbro is a worldwide leader in children's and family leisure
time entertainment products and services, including the design,
manufacture and marketing of games and toys ranging from
traditional to high-tech. Both internationally and in the U.S.,
its PLAYSKOOL, TONKA, MILTON BRADLEY, PARKER BROTHERS, TIGER and
WIZARDS OF THE COAST brands and products provide the highest
quality and most recognizable play experiences in the world.

                           *   *   *

As previously reported, Fitch Ratings affirmed Hasbro, Inc.'s
'BB' senior unsecured debt rating.  In addition, the company's
new $380 million secured bank credit facility was rated 'BB+'.
The new facility, which replaced its previous 'BB+' rated
$650 million facility, continues to be secured by receivables,
inventories and intellectual property.

The ratings reflect the company's strong market presence and its
diverse portfolio of brands balanced against the cyclical and
shifting nature of the toy industry. The ratings also consider
the challenges the company continues to face in refocusing its
strategy on its core brands and its weak financial profile. The
Negative Outlook reflects uncertainty as to the company's
ability to successfully execute its strategy and its ability to
achieve revenue targets for its core brands as well as Star Wars
in 2002.


HAYES LEMMERZ: Claims Classification & Treatment Under the Plan
---------------------------------------------------------------
This table summarizes the classification and treatment of the
principal prepetition Claims and Interests under the First
Amended Plan of Hayes Lemmerz International, Inc., and its
debtor-affiliates, and in each case reflects the amount and form
of consideration that will be distributed in exchange for these
Claims and Interests and in full satisfaction, settlement,
release and discharge of these Claims and Interests:

Class  Description             Treatment
-----  ----------------------  ---------------------------------
  1    Other Priority Claims   On the first Periodic
                                Distribution Date occurring
                                after the later of
        Estimated Allowed       the date an Other Priority Claim
        Claims: $1,625,796      becomes an Allowed Other
                                Priority Claim or the date an
                                Other
        Estimated Percentage    Priority Claim becomes payable,
        Recovery: 100%          the holder of an Allowed Other
                                Priority Claim will receive:

                                -- cash equal to the amount of
                                   the Allowed Other Priority
                                   Claim; or

                                -- any other treatment as to
                                   which the Debtors and the
                                   Claimholder will have agreed
                                   in writing.

   2    Prepetition Credit      On the Effective Date, each
        Facility Secured        holder will receive its pro rata
        Claims                  Portion  of:

        Estimated Allowed       -- the Lenders' Payment Amount;
        Claims: $789,557,448       and

                                -- 15,000,000 shares of New
                                   Common Stock.

                                Each Prepetition Lender will
                                also be entitled to retain that
                                portion of the Adequate
                                Protection Payments previously
                                received by Prepetition Lender
                                but will be deemed to have
                                waived its right to a deficiency
                                claim and any further adequate
                                protection payments that may
                                come due subsequent to January
                                31, 2003.

   3a   BMO Synthetic Lease     On the Effective Date, the
        Secured Claims          holder with respect to the BMO-
                                Bowling Green Synthetic Lease
                                will be
        Estimated Allowed       accorded this treatment:
        Claims: $21,000,000
                                A. The Debtors will surrender
        Estimated Percentage       the BMO-Bowling Green
        Recovery: 100%             Synthetic Lease Property and
                                   to the BMO Synthetic Lessors
                                   on or before the Effective
                                   Date; provided, however, that
                                   in the event that the
                                   Reorganized Debtors determine
                                   that they must hold over for
                                   a limited period of time, the
                                   Reorganized Debtors will
                                   lease the BMO-Bowling Green
                                   Synthetic Lease Property from
                                   the BMO Synthetic Lessors;

                                B. The holders of Allowed BMO
                                   Synthetic Lease Secured
                                   Claims arising under the BMO-
                                   Bowling Green Synthetic Lease
                                   will be entitled to a single
                                   Allowed General Unsecured
                                   Claim in an amount equal to
                                   the excess of $10,700,000
                                   over the net sales proceeds
                                   received by the BMO Synthetic
                                   Lessors from the sale of the
                                   BMO-Bowling Green Synthetic
                                   Lease Property or, if the
                                   BMO-Bowling Green Synthetic
                                   Lease Property is not sold
                                   within six months following
                                   the Effective Date, an
                                   Allowed General Unsecured
                                   Claim in an amount equal to
                                  $5,700,000, which will be
                                   reduced by the administrative
                                   Claim, if any, to which the
                                   BMO Synthetic Lessors may be
                                   entitled; and

                                C. To the extent that the BMO
                                   Synthetic Lessors will
                                   demonstrate that the BMO-
                                   Bowling Green Synthetic Lease
                                   Property has depreciated as a
                                   result of the Debtors' use
                                   during the pendency of the
                                   Chapter 11 Cases, the BMO
                                   Synthetic Lessors will be
                                   entitled to receive an
                                   Administrative Claim in an
                                   amount equal to the
                                   depreciation or any other
                                   amount as agreed in writing
                                   by the Debtors and the BMO
                                   Synthetic Lessors.

                                Holders with respect to the BMO-
                                Northville Synthetic Lease will
                                receive:

                                A. All Allowed BMO Synthetic
                                   Lease Secured Claims arising
                                   under the BMO-Northville
                                   Synthetic Lease will be
                                   Reinstated; provided,
                                   however, that:

                                   -- the principal amount of
                                      Reinstated BMO-Northville
                                      Synthetic Lease will be
                                      $16,000,000,

                                   -- the interest in rate and
                                      term of the Reinstated
                                      BMO-Northville Synthetic
                                      Lease will be the same as
                                      the Term B component of
                                      the New Credit Facility,

                                   -- no principal amount under
                                      Reinstated BMO-Northville
                                      Synthetic Lease will be
                                      amortized over the term,
                                      and

                                   -- the Reinstated BMO-
                                      Northville Synthetic Lease
                                      will provide Reorganized
                                      HLI with the right to
                                      purchase the BMO-
                                      Northville Synthetic
                                      Lease Property;

                                B. The holders of Allowed BMO
                                   Synthetic Lease Secured
                                   Claims arising under BMO-
                                   Northville Synthetic Lease
                                   will be entitled to a
                                   $10,700,000 Allowed General
                                   Unsecured Claim, which will
                                   be reduced by the
                                   Administrative Claim, if
                                   any, to which the BMO
                                   Synthetic Lessors may be
                                   entitled; and

                                C. To the extent that the BMO
                                   Synthetic Lessors demonstrate
                                   that the BMO-Northville
                                   Synthetic Lease Property has
                                   depreciated as a result of
                                   the Debtors' use during the
                                   pendency of the Chapter
                                   11 Cases, the BMO Synthetic
                                   Lessors will be entitled to
                                   receive an Administrative
                                   Claim in an amount equal to
                                   the depreciation or any other
                                   amount as agreed to in
                                   writing by the Debtors and
                                   the BMO Synthetic Lessors.

   3b   CBL Synthetic Lease     On the Effective Date, Allowed
        Secured Claims          CBL Synthetic Lease Secured
                                Claims, in full satisfaction,
                                settlement, release and
        Estimated Allowed       discharge of and in
        Claims: $21,440,000     exchange for the Allowed CBL
                                Synthetic Lease Secured Claims
        Estimated Percentage    will be accorded this treatment:
        Recovery: 100%
                                With respect to the CBL-Air
                                Conditioner Synthetic Lease:

                                A. The Debtors will surrender
                                   the CBL Synthetic Lease
                                   Equipment under the CBL-Air
                                   Conditioner Synthetic Lease
                                   to CBL on or before the
                                   Effective Date; provided,
                                   however, that in the event
                                   that the Reorganized
                                   Debtors determine that they
                                   must hold over for a limited
                                   period of time, the
                                   Reorganized Debtors will
                                   lease the CBL Synthetic Lease
                                   Equipment from CBL on a
                                   month-to-month basis;

                                B. CBL will be entitled to an
                                   Allowed General Unsecured
                                   Claim in an amount equal to
                                   the excess of $1,700,000 over
                                   the net sales proceeds
                                   received by CBL from the sale
                                   of CBL Synthetic Lease
                                   Equipment or, if the CBL
                                   Synthetic Lease Equipment is
                                   not sold within six months
                                   following the Effective Date,
                                   an Allowed General Unsecured
                                   Claim in an amount equal to
                                   $600,000, which will be
                                   reduced by the Administrative
                                   Claim, if any, to which CBL
                                   may be entitled; and

                                C. To the extent that CBL will
                                   demonstrate that the CBL
                                   Synthetic Lease Equipment has
                                   depreciated as a result from
                                   the Debtors' use during the
                                   pendency of the Chapter 11
                                   Cases, CBL will be entitled
                                   to receive an Administrative
                                   Claim
                                   equal to the depreciation or
                                   any other amount as agreed to
                                   in writing by the Debtors and
                                   CBL.

                                With respect to the CBL-Other
                                Equipment Synthetic Lease:

                                (1) All Allowed CBL Synthetic
                                    Lease Secured Claims arising
                                    under the CBL-Other
                                    Equipment Synthetic Lease
                                    will be Reinstated;
                                    Provided, however, that:

                                    A. the principal amount of
                                       the Reinstated CBL-Other
                                       Equipment Synthetic Lease
                                       will be $20,600,000;

                                    B. the interest rate and
                                       term of the Reinstated
                                       CBL-Other Equipment
                                       Synthetic Lease will be
                                       the same as the Term B
                                       component of the New
                                       Credit Facility;

                                    C. no principal amount under
                                       the Reinstated CBL-Other
                                       Equipment Synthetic Lease
                                       will be amortized over
                                       the term; and

                                    D. the Reinstated CBL-Other
                                       Equipment Synthetic Lease
                                       will provide that the
                                       Reorganized Debtors will
                                       have the right to
                                       purchase the CBL
                                       Synthetic Lease equipment
                                       under the CBL-Other
                                       Equipment Synthetic
                                       Lease after expiration of
                                       the Reinstated CBL-Other
                                       Equipment Synthetic Lease
                                       or at any time prior to
                                       by payment of the
                                       remaining principal
                                       amount and any accrued
                                       and unpaid interest as of
                                       the date of the purchase.

                                (2) CBL, as holder of Allowed
                                    CBL Synthetic Lease Secured
                                    Claims arising under the
                                    CBL-Other Equipment
                                    Synthetic Lease, will be
                                    entitled to a $4,500,000
                                    Allowed General Unsecured
                                    Claim.  The BMO Synthetic
                                    Lessors' Allowed General
                                    Unsecured Claim will be
                                    reduced by the
                                    Administrative Claim, if
                                    any, to which CBL may be
                                    entitled and will be treated
                                    as a Class 7 General
                                    Unsecured Claim in
                                    accordance with the terms of
                                    the Plan.

                                (3) To the extent that CBL will
                                    demonstrate that the CBL
                                    Synthetic Lease Equipment
                                    under the CBL-Other
                                    Equipment Synthetic Lease
                                    has depreciated as a result
                                    from the Debtors' use during
                                    the pendency of the Chapter
                                    11 Cases, CBL will be
                                    entitled to receive an
                                    Administrative Claim in an
                                    amount equal to the
                                    depreciation or any other
                                    amount as agreed to in
                                    writing by the Debtors and
                                    CBL.

   3c Dresdner Synthetic      On the Effective Date, all
     Lease Secured Claims     allowed  Dresdner Synthetic
                              Secured Claim will be
                              reinstated, provided

     Estimated Allowed        however that:
     Claims: $8,300,000
                               A. the principal amount of the
                                   Reinstated Dresdner Synthetic
                                   Lease will be $8,300,000;

                                B. Reinstated Dresdner Synthetic
                                   Lease will have a 5-year
                                   term;

                                C. no principal amount under the
                                   Dresdner Synthetic Lease will
                                   be amortized over the term
                                   thereof; and

                                D. Reinstated Dresdner Synthetic
                                   Lease will provide that
                                   Reorganized HLI will have the
                                   right to purchase the
                                   Dresdner Synthetic Lease
                                   Property after expiration of
                                   the Reinstated, Dresdner
                                   Synthetic Lease or at
                                   any time prior to by payment
                                   of the remaining principal
                                   amount and any accrued and
                                   unpaid interest.

   4    Miscellaneous Secured   The legal, equitable, and
        Claims                  contractual rights of Allowed
                                Miscellaneous Secured
                                Claimholders will be
        Estimated Allowed       reinstated.
        Claims: $3,074,532

        Estimated Percentage
        Recovery: 100%

   5    Senior Note Claims      On the first Periodic
                                Distribution Date occurring
                                after the later of
        Estimated Allowed       the date a Senior Note Claim
        Claims: $316,130,000    becomes an Allowed Senior Note
                                Claim or the date a Senior Note
                                Claim becomes payable pursuant
                                to any agreement between the
                                Debtors and the holder of the
                                Senior Note Claim, the
                                Disbursing Agent will deliver to
                                each holder of Senior Notes:

                                -- distribution of the
                                   Claimholder's pro rata amount
                                   of shares of New Common
                                    Stock;

                                -- a distribution of the
                                   claimholders' pro rata share
                                   of Trust Recoveries;

                                -- a distribution of the
                                   claimholders' pro rata amount
                                   of remaining senior note
                                   proceeds of $13,000,000.

  6    Subordinated Note        The subordination provisions in
       Claims                   the Indentures will be given
                                effect so that the distributions
       Estimated Allowed        to which holders of Subordinated
       Claims: $885,919,552     Note Claims would otherwise be
                                entitled will be distributed
                                directly to the holders of
                                Prepetition Credit Facility
                                Secured Claims and Senior Note
                                Claims until the Claims are paid
                                in full together with interest,
                                fees and other charges which the
                                Claimholders may be entitled to
                                receive, to be determined as if
                                the Chapter 11 Cases had not
                                been commenced.  If holders of
                                Class 6 Subordinated Note Claims
                                vote to accept the Plan, on the
                                first Periodic Distribution Date
                                occurring after the later of the
                                date a Subordinated Note Claim
                                becomes an Allowed Subordinated
                                Note Claim or the date a
                                Subordinated Note Claim becomes
                                payable pursuant to any
                                agreement between a Debtor and
                                the holder of the Subordinated
                                Note Claim, the Disbursing Agent
                                will deliver to the Claimholder,
                                in full satisfaction,
                                settlement, release, and
                                discharge of and in exchange
                                for the Subordinated Note Claim
                                a distribution of a Pro Rata
                                amount of the Warrants.

   7    General Unsecured       On the first Periodic
        Claims                  Distribution Date occurring
                                after the later of the date a
                                General Unsecured Claim
        Estimated Allowed       becomes an Allowed General
        Claims: $182,055,630    Unsecured Claim or the date a
                                General Unsecured Claim becomes
                                payable pursuant to any
                                agreement between the Debtors
                                and the holder of a General
                                Unsecured Claim, the Disbursing
                                Agent will deliver to
                                the Claimholder:

                                -- a distribution of a pro rata
                                   amount of share of New Common
                                   Stock; and

                                -- a right to distributions of
                                   the claimholder's pro rata
                                   share of the Trust
                                   Recoveries.

   8    Subordinated            These claims will be cancelled,
        Securities Claims       released and extinguished, and
                                holders of these claims will
        Estimated Percentage    receive no distributions under
        Recovery: 0%            the Plan.

   9    Interests               Interests will be cancelled,
                                released, and extinguished and
        Estimated Percentage    holders of Interests will
        Recovery: 0%            receive no distribution.
(Hayes Lemmerz Bankruptcy News, Issue No. 26; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


HOLIDAY RV: Delays Form 10-K Filing & Expects Nasdaq Delisting
--------------------------------------------------------------
Holiday RV Superstores, Inc., (Nasdaq: RVEE) will be unable to
file its Form 10-K within the prescribed deadline required by
the rules and regulations under the Securities Exchange Act of
1934. The Company hopes to file its Form 10-K within the next 30
to 45 days.

As a result of the Company's failure to timely file its Form
10-K, and the Company's previous announcement that the Company's
common stock was subject to delisting from the Nasdaq SmallCap
Market for its failure to comply with the Nasdaq listing
requirements, the Company anticipates that its common stock will
be delisted from the Nasdaq SmallCap Market. The delisting of
the Company's common stock from Nasdaq SmallCap may adversely
affect the liquidity of the Company's common stock.

If the Company's common stock is delisted from the Nasdaq
SmallCap Market, the Company expects that its common stock would
be quoted on the "pink sheets" published by the National
Quotations Bureau, whereupon trading in the Company's common
stock would be subject to certain rules and regulations
promulgated under the Securities Exchange Act of 1934, as
amended, which impose additional sales practice requirements on
broker-dealers. The additional burdens imposed upon broker-
dealers by such requirements may discourage broker-dealers from
effecting transactions in the common stock, which could severely
limit the market liquidity of the common stock.

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.


HOST MARRIOTT: S&P Cuts Rating to B+ on Weak Industry Conditions
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating for upscale hotel owner and operator Host Marriott Corp.
to 'B+' from 'BB-'.

At the same time, Standard & Poor's removed the rating from
CreditWatch, where it was placed on February 5, 2003. The
outlook is stable. Total debt outstanding at the end of
September 2002 was $5.7 billion.

"Standard & Poor's expects the lodging environment will continue
to remain challenging throughout 2003. As rates remain
competitive and operating costs are increasing, lodging
companies are anticipating additional operating margin
deterioration," said Standard & Poor's credit analyst Stella
Kapur. She added, "Given Standard & Poor's current expectations
for 2003, Host's credit measures are not expected to improve
to levels consistent with the previous rating during the
intermediate term, even assuming some success in selling
assets."

Host's hotels are generally well located and have historically
been solid performers in the markets in which they operate.
However, hotels that operate in the upscale and luxury segments
have been among the most significantly affected by the events of
September 11 and the slowing economy. Revenue per available room
for its first 36 weeks ended September 6, 2002, declined 10.4%
year over year. This performance is in line with the upscale
segment of the lodging industry. For the full 2002, the company
expects to experience a RevPAR decline of 4%-5%.

Host's portfolio is well positioned to benefit as the economy
improves, particularly beyond 2003. The slowing growth rate of
new hotels and the high barriers to entry for new properties in
the urban upscale and luxury markets are factored into this
expectation, as is the quality of Host's properties. Standard &
Poor's expects that Host's portfolio will generate above-average
cash flow growth when the economy gains momentum, likely in
2004.


HUNTLEIGH TELECOMMUNICATIONS: Brings-In James Goldman as Counsel
----------------------------------------------------------------
Huntleigh Telecommunications Group, Inc., seeks for approval
from the U.S. Bankruptcy Court for the Western District of Texas
to employ James, Goldman & Haughland, PC as its bankruptcy
attorneys.

The professionals who will be primarily responsible in this
engagement are:

          Wiley F. James, III          $225 per hour
          Jamie Wall                   $125 per hour
          Aimee Charland Gillette      $ 85 per hour

The professional services that James Goldman will render are:

     a) Analysis of the Debtor's financial situation;

     b) Preparation and filing of any petition, Schedules,
        Statement of Financial Affairs, Plan of Reorganization
        and Disclosure Statement, as required;

     c) Representation of the Debtor at the meeting of creditors
        and confirmation hearing, and any adjourned hearings
        thereof.

     d) Representation of the Debtor in adversary proceedings
        and other contested bankruptcy matters.

     e) Providing the Debtor legal advice with respect to its
        powers and duties as a Debtor-in-Possession and the
        continued operation of its business;

     f) Preparation on behalf of the Debtor, as a Debtor-in-
        Possession, the necessary applications, answers, orders,
        reports and other papers;

     g) Helping the Debtor with any necessary documents for the
        obtaining of postpetition credits, offsets, etc.; and

     h) Performing all of the legal services for the Applicant,
        as a Debtor-in-Possession, which may be necessary
        herein.

Huntleigh Telecommunications Group, Inc. is a High Speed DSL
Internet Service Provider in El Paso, Texas.  The Company filed
for chapter 11 protection on February 3, 2003 in the U.S.
Bankruptcy Court for the Western District of Texas (Bankr. W.D.
Tex. Case No. 03-70097).


INTEGRATED HEALTH: Wants to Continue Employment of Professionals
----------------------------------------------------------------
James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor
LLP, in Wilmington, Delaware, tells the Court that Integrated
Health Services, Inc., and its debtor-affiliates desire to
continue to employ the Ordinary Course Professionals to render
services, similar to those services rendered prior to the
Petition Date.  These services include:

    -- tax preparation and other tax advice;

    -- legal services with regard to routine litigation,
       collection matters, reimbursement and regulatory matters,
       government investigations, corporate matters, and real
       estate issues; and

    -- other matters requiring the expertise and assistance of
       professionals.

According to Mr. Patton, the Debtors' post-acute care network
currently consists of over 1,450 service locations in 47 states
and the District of Columbia.  The Debtors submit that, in light
of the costs associated with the preparation of employment
applications for professionals who will receive relatively small
fees, it is impractical and cost inefficient for the Debtors to
submit individual applications and proposed retention orders for
each of the Ordinary Course Professionals.  Accordingly, and
consistent with the Court's Prior Order, the Debtors ask that
this Court extend the time during which the Debtors are
authorized to employ Ordinary Course Professionals through an
including August 4, 2003.  In addition, the Debtors ask the
Court to dispense with the requirement of individual employment
applications and retention orders with respect to each Ordinary
Course Professional.

As provided in the Prior Order, the Debtors propose that they be
permitted to pay each Ordinary Course Professional, without a
prior application to the Court by the professional, 100% of the
fees and disbursements incurred, after the submission to, and
approval by, the Debtors of an appropriate invoice setting forth
in reasonable detail the nature of the services rendered and
disbursements actually incurred; provided, however, that if any
professional's fees and disbursements exceed $50,000 per month,
then the payments to the professional for the excess amounts
will be subject to the prior approval of the Court in accordance
with Sections 330 and 331 of the Bankruptcy Code, the Federal
Rules of Bankruptcy Procedure, and the Local Rules of the United
States Bankruptcy Court for the District of Delaware.

Moreover, the Debtors also reserve the right to supplement the
list of the Ordinary Course Professionals from time to time as
necessary and in accordance with their previous practice.  In
this event, the Debtors propose to file a supplemental list with
this Court and to serve it on the Office of the United States
Trustee, counsel to the Creditors' Committee and the Bankruptcy
Rule 2002 service list.  The Debtors further propose that if no
objections are filed to a supplemental list within ten days
after service, the list would be deemed approved by the Court
without the necessity of a hearing.

Although certain of the Ordinary Course Professionals may hold
unsecured claims against the Debtors in respect of prepetition
services rendered to the Debtors, the Debtors do not believe
that any Ordinary Course Professional has any interest
materially adverse to the Debtors, their creditors, or other
parties-in-interest.  Mr. Patton assures that the Debtors will
not retain any Ordinary Course Professional that does not meet
the special counsel retention requirement of Section 327(e) of
the Bankruptcy Code.  The proposed ordinary course retention and
payment procedures will not apply to those professionals for
whom the Debtors have filed separate applications for approval
of employment.

Mr. Patton contends that the relief requested will save the
Debtors the expense of separately applying for the employment of
each professional.  Furthermore, relieving the Ordinary Course
Professionals of the requirement of preparing and prosecuting
fee applications will save the estates the additional
professional fees and expenses that would be caused thereby.
Likewise, the outlined procedure will spare the Court and the
United States Trustee from having to consider numerous fee
applications involving relatively modest amounts of fees and
expenses. (Integrated Health Bankruptcy News, Issue No. 52;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


IPC ACQUISITION: Credit Protection Concerns Spur Stable Outlook
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating and other ratings on IPC Acquisition Corp. and
revised the company's outlook to stable from positive. The
outlook revision reflects Standard & Poor's expectation that
credit protection measures will not improve over the near term.

New York-based IPC is the world's leading provider of voice
trading systems and services to large financial services and
other trading companies, with a 68% global market share. It had
$219 million of total debt outstanding at December 2002.

While IPC generated good free cash flow in fiscal 2002, ended
September, repaying about $35 million in bank debt, and is
expected to generate sufficient free cash flow in fiscal 2003 to
continue debt repayment, EBITDA is expected to decline amid
challenging financial services end-markets.

"Despite expectations that IPC's markets may face a challenging
spending environment in 2003, we expect the company to maintain
adequate profitability and generate sufficient cash flow to
continue to repay bank debt," said Standard & Poor's credit
analyst Emile Courtney. "Debt protection measures provide some
cushion at the current ratings level."

IPC designs, manufactures, and installs desktop hardware, called
turrets, and related switching gear, which provide reliable
communications between trading parties. Recurring maintenance
and professional services sales are about one-third of revenues.

While IPC's customers view trading systems as critical, the
company's narrowly focused product portfolio serves
predominantly the financial-services end market. The company's
competitors lack the scale and focus of IPC, which benefits from
high barriers to entry given the importance of after-sales
service and high customer switching costs.


JUNIPER GEN.: S&P Says Rating Unaffected by El Paso's Downgrade
---------------------------------------------------------------
Standard & Poor's Ratings Services said that Juniper Generation
LLC's (B+/Stable/--) rating will not be affected by the recent
downgrade of its parent company, El Paso Corp., to 'B+' from
'BB' since Juniper is bankruptcy remote from El Paso. The risk
of a substantive consolidation is small because, in the event of
an El Paso bankruptcy, Juniper's independent director is
unlikely to consent to a voluntary bankruptcy filing of Juniper.


KAISER ALUMINUM: Signs-Up Martin Murphy as Future Claimants' Rep
----------------------------------------------------------------
Kaiser Aluminum Corporation and its debtor-affiliates sought and
obtained Court permission to appoint Martin J. Murphy as the
Legal Representative for Future Asbestos Claimants, nunc pro
tunc to December 19, 2002.

Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger,
tells the Court that the Debtors and their advisors have
evaluated several potential candidates to serve as a Futures
Representative. The Debtors also discussed the appointment of a
Futures Representative with the statutory committees. Following
careful consideration of the potential candidates for Futures
Representative, the Debtors have determined that Mr. Murphy is
well qualified to represent the interests of the Future
Claimants. Mr. DeFranceschi notes that both the Creditors'
Committee and the Asbestos Committee support Mr. Murphy's
retention and appointment.

The Debtors appoints Mr. Murphy under these terms and
conditions:

A. Appointment

     Mr. Murphy will be appointed for the purpose of protecting
     the rights of persons or entities that may subsequently
     assert future asbestos-related claims or demands against
     the Debtors. Mr. Murphy will have no other obligations
     except those that may be prescribed by Court Orders and
     those that he may accept.

B. Standing

     Mr. Murphy will have standing under Section 1109(b) of the
     Bankruptcy Code to be heard as a party-in-interest in all
     matters relating to the Debtors' Chapter 11 cases and will
     have the powers and duties of a committee as set forth in
     Section 1103 as are appropriate for a Futures
     Representative.

C. Engagement of Professionals

     Mr. Murphy may retain attorneys, and other professionals,
     consistent with Sections 105, 327 and 524(g), subject to
     prior Court approval.

D. Compensation

     Compensation, including professional fees and reimbursement
     of expenses, will be payable to Mr. Murphy and his
     professionals from the Debtors' estates, as appropriate.
     The Debtors will compensate Mr. Murphy at the rate of $400
     per hour.

E. Liability

     Mr. Murphy will not be liable to any person or entity for
     any damages arising from or relating to his performance as
     Futures Representative, including acts or omissions in
     connection with his performance as Futures Representative,
     except for damages caused by his gross negligence or
     willful misconduct.  Mr. Murphy will not be liable to any
     person as a result of any action or omission he may take or
     make in good faith.

F. Indemnification

     The Debtors will indemnify Mr. Murphy for any damages
     arising from or relating to the performance of his duties
     as Futures Representative, except for damages caused by his
     gross negligence or willful misconduct.  The Debtors will
     indemnify Mr. Murphy for damages resulting from an action
     or omission he may take or make in good faith.

G. Right to Receive Notices

     Mr. Murphy and any professionals he retained will be deemed
     members of the "Core Group Service List".

H. Termination of Appointment

     Unless otherwise ordered by this Court, Mr. Murphy's
     appointment as Futures Representative will terminate on
     the confirmation of a reorganization plan in these cases.
     In addition, Mr. Murphy's appointment as Futures
     Representative may be terminated at any time by the entry
     of a Court order, either on its own motion or on a motion
     of any party-in-interest, for cause, including Mr. Murphy's
     death, incapacity or inability to serve as the Futures
     Representative.

The Debtors assure the Court that Mr. Murphy does not hold any
adverse interest to their estates and is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.  He is not affiliated with or representing any person or
entity with claims against, or any other interest in, the
Debtors' estates. (Kaiser Bankruptcy News, Issue No. 22;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


KMART CORP: Proposes Comprehensive Claims Resolution Procedures
---------------------------------------------------------------
Kmart Corporation and its debtor-affiliates want to compromise
or settle certain prepetition claims and allow claims based on
those settlements without further court approval.  If a
streamlined comprehensive claims resolution procedure isn't put
in place, Kmart tells Judge Sonderby, she's going to have more
stacks of small-dollar claim settlements brought to her chambers
than she has the time or staff to accommodate.

The Debtors have made significant headway in the analysis of
prepetition reconciliation process.  The Debtors believe that
the proposed settlement parameters will assist them in
reconciling claims efficiently and to achieve a prompt
distribution of the plan consideration to the creditors.

Of the 46,397 claims filed against the estates, the Debtors
found 17,917 claims involving slight differences between the
asserted amount and the amount reflected in their schedules, or,
in their books and records.  These claims account for 12% of the
total dollar amount of all controversial claims.  Consequently,
the Debtors believe that these claims are ripe for an informal
claims resolution procedure given the vast number of these
claims.

J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom,
tells the Court that the Debtors will settle disputed claims
without further Court approval where the disputed amount is
$1,000,000 or less and so long as the aggregate amount in
controversy that they resolved does not exceed $2,000,000,000.
However, the Debtors propose that the Resolution Cap may be
increased with the consent of their statutory committees and
without further Court order.  Any disputes arising out of larger
claims, which would have a more significant impact on creditor
recoveries, will remain subject to the regular process of claims
resolution in this Court.

Mr. Ivester asserts that the proposed Procedures will allow for
the efficient resolution of a large number of claims while
retaining court oversight of significant disputes.  As each
claim is resolved, the Debtors promise to report the final
allowed on their claims register, which is being maintained by
Trumbull Services, LLC.  "As the process moves forward, all
parties will be able to monitor the Debtors' progress in
reconciling claims," Mr. Ivester says.  In a case of this size
and complexity, Mr. Ivester points out that the expense of
seeking Court approval for every settlement would significantly
reduce the benefits otherwise incident to resolving the claims
on a consensual basis.

Notwithstanding, the Debtors also propose to implement an
alternative dispute resolution protocol to expedite and
facilitate the determination of a claim against the estates,
where they have reached an impasse with respect to that claim.
The Debtors will implement the ADR Procedures with respect to
claims for which the Prepetition Claims Resolution Procedures do
not apply -- that is, those claims where the Amount in
Controversy exceeds $1,000,000, except for personal injury
claims.

According to Mr. Ivester, "[the ADR Procedures] will complement
the Prepetition Claims Resolution Procedures and the existing
personal injury claims procedure approved by the Court and will
ease the burden on the parties and the Courts where negotiation
has not been successful, or where, given the Amount in
Controversy, the Prepetition Claims Resolution Procedures are
not available."

The Debtors will adopt these ADR Procedures:

A. Referral and Notice

    The Debtors will refer a Disputed Claim to mediation, and
    upon that referral, the Disputed Claim will be classified as
    an ADR claim.  The Debtors will then select a mediator to
    conduct a mandatory, non-binding mediation, subject to the
    affected claimant's right to object to the Debtors' choice.
    The Mediator will serve the affected Claimant with an ADR
    notice which will:

      (i) schedule the exchange of Mediation statements;

     (ii) identify the format of and procedures to be followed
          during the Mediation;

    (iii) describe who should attend;

     (iv) describe the fee structure and timing of payment of
          the required Mediation fees; and

      (v) describe the effect of a mediated settlement.

    The ADR Notice must be returned within 30 calendar days
    after the ADR Notice date along with payment of the required
    fee and execution of the required Mediation agreement.

    The completed and signed ADR Notice must be sent to:

                      Kmart Corporation
                      c/o Trumbull Services LLC
                      4 Griffin Road North
                      Windsor, Connecticut 06095

B. Mediation Fees


    Each party to a Mediation will be responsible for half of
    the Mediator's fees, which will be consistent with industry
    standards.  Any Claimant subject to a Mediation will make an
    initial deposit against the fees, payable to the Mediator,
    by the ADR Return Deadline.  The initial deposit will not
    exceed $750.  All fees required to be paid must be paid
    within 30 calendar days after the relevant Mediation
    conference.  Any excess payments will be returned to the
    Claimant on the conclusion of the Mediation.  In the event a
    Claimant defaults in the payment of mediation fees, the
    Debtors will remain responsible for the payment of the
    Mediator.

C. Mediation Statement

    The ADR Notice will schedule the first mediation conference
    no sooner than 20 days and no more than 40 days after the
    ADR Notice Date, and will set the ADR Return Deadline for
    the submission of a Mediation statement.  The Return
    Deadline will not be earlier than the date of the first
    mediation conference.

    The Mediation Statement must indicate certain required
    information including, but not limited to:

    * the Claimant's name and address;

    * a short statement of the Claimant's contentions including
      the legal and factual basis for the ADR Claim;

    * the name and address of any attorney representing a
      Claimant;

    * the alleged amount of the Claimant's ADR Claim;

    * the name and address of the applicable Debtor; and

    * evidence that the Claimant wishes to present in support of
      his ADR Claim, including contracts, invoices or other
      documentary evidence.

D. Good Faith Compliance

    A Claimant's failure to comply with the ADR Procedures may
    result in the disallowance of an ADR Claim.  Upon any
    failure to comply, the Debtors may serve a notice of that
    failure on the Mediator and the Claimant.  If the Debtors
    and the Claimant are unable to agree on a resolution of the
    Default Notice within seven days after mailing, the Debtors
    may schedule a hearing for the resolution of the Default
    Notice by the Court.  There will be a presumption in favor
    of disallowance of an ADR Claim for the Claimant's failure
    to:

      (i) timely pay the Mediator's fees;

     (ii) attend a Mediation conference;

    (iii) timely submit the Mediation Statement; or

     (iv) execute a Mediation agreement.

E. Settlement Approval Procedures

    In case the ADR Procedures result in the settlement of an
    ADR Claim, the Debtors and the Claimant will execute a
    stipulation that will only become effective on compliance
    with any existing settlement procedures, including without
    limitation the Prepetition Claims Resolution Procedures, if
    applicable. If the Debtors and a Claimant settle an ADR
    Claim outside of existing settlement parameters, the Debtors
    will ask the Court to approve the settlement on 10 days
    notice of the Stipulation.

    The Debtors will serve the Stipulation to the Office of the
    U.S. Trustee and the statutory committees' counsel.  If no
    objections are timely filed, the Debtors will submit an
    order approving the Stipulation without further notice or
    hearing. If an objection is timely filed, the matter will be
    scheduled for hearing at the next omnibus hearing or special
    claims hearing date.

F. Termination

    A Mediation will be terminated at any time, by agreement of
    the parties or on the determination of the Mediator on the
    request of one party.  After the termination, the ADR Claim
    will be resolved by the Court, or by other forum as required
    by applicable law.

G. Holders of ADR Claims Must Have Timely Filed Proofs of Claim

    Nothing in the ADR Procedures alters the requirement that
    each Claimant must have timely filed a proof of claim.
(Kmart Bankruptcy News, Issue No. 47; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


LIONBRIDGE TECH: Roy Cowan Discloses 10% Equity Stake
-----------------------------------------------------
Mr. Roy J. Cowan may be deemed to beneficially own 3,193,500
shares of the common stock of Lionbridge Technologies, Inc., as
of December 31, 2002. Such Shares include 322,916 shares of
common stock deemed to be beneficially owned by Mr. Cowan
pursuant to options exercisable within 60 days of December 31,
2002. The amount of common stock held by Mr. Cowan represents
10.0% of the outstanding common stock of Lionbridge Technologies
based on 31,687,690 shares of common stock reported as
outstanding in the Company's Form 10-Q Quarterly Report for the
quarter ended September 30, 2002.

Mr. Cowan has sole power to vote or direct the vote of, and sole
power to dispose of, or to direct the disposition of, 2,870,584
shares.

Lionbridge's working capital deficit widens to about $4 million
at September 30, 2002.


LIONS GATE ENTERTAINMENT: Red Ink Continues to Flow in Q3 2003
--------------------------------------------------------------
Lions Gate Entertainment (AMEX:LGF) (TSX:LGF) achieved improved
EBITDA and bottom line performance for its Fiscal 2003 third
quarter ended December 31, 2002, compared to the prior-year
third quarter, the Company announced.

EBITDA (earnings before interest, provision for income taxes,
amortization, minority interests and discontinued operations)
rose to $1.2 million for the three months ended December 31
compared to negative $1.9 million (redefined) in last year's
third quarter.

Net cash provided by operations during the quarter increased to
$3.6 million, compared to net cash used in operations of $4.9
million in the prior year's third quarter.

Net loss allocated to common shareholders for the third quarter
was $3.2 million (after giving effect to the Series A preferred
share dividends and accretion on the Series A preferred shares)
based on 43.2 million weighted average common shares outstanding
compared to a net loss of $4.1 million in the prior-year third
quarter (after giving effect to the Series A preferred share
dividends and accretion on the Series A preferred shares) based
on 43.0 million weighted average common shares outstanding for
the three months ended December 31, 2001.

Fiscal 2003 third quarter revenues were $61.9 million, a
decrease of 12.3%, compared to $70.6 million in the prior-year
third quarter. Gross profit margins improved to 53.8% from 42.4%
in last year's third quarter.

"The third quarter is historically our softest three-month
period. Consequently, we are pleased with the improvement from
last year and we remain on track for net free cash flow,
profitability and continued EBITDA growth for full Fiscal 2003,"
said Lions Gate Chief Executive Officer Jon Feltheimer. "We
continue to execute the strategy we spelled out three years ago:
disciplined growth, debt reduction, overhead reduction and
utilization of our diversification to drive product from our
core businesses through the entire value chain."

             Nine-Month Results Reflect Strength

Lions Gate achieved significant improvement in all major
categories for the nine months ended December 31, 2002. Nine-
month revenues of $233.9 million increased 33.4% from $175.4
million in the first nine months of last year. Nine-month EBITDA
(earnings before interest, provision for income taxes,
amortization, minority interests, gain on dilution of investment
in subsidiary and discontinued operations) increased by 488% to
$14.7 million compared to $2.5 million (redefined) for the first
nine months of Fiscal 2002. Net cash provided by operations for
the first nine months of Fiscal 2003 was $3.7 million, an
improvement from net cash used in operations of $57.1 million
during the prior year's first nine months.

Net loss allocated to common shareholders was $1.1 million for
the first nine months of Fiscal 2003 (after giving effect to the
Series A preferred share dividends and accretion on the Series A
preferred shares) on 43.2 million weighted average common shares
outstanding compared to a net loss allocated to common
shareholders of $6.1 million (after giving effect to the Series
A preferred share dividends and accretion on the Series A
preferred shares) on 42.6 million weighted average common shares
outstanding for the first nine months of Fiscal 2002.

         Strong Third Quarter Growth In Motion Pictures

Motion picture revenues of $43.6 million during the Fiscal 2003
third quarter increased 48% from $29.5 million in the prior-year
quarter, driven by theatrical revenues from SECRETARY and RULES
OF ATTRACTION, home entertainment revenues from titles such as
FRAILTY, LIBERTY STANDS STILL and MONSTER'S BALL, revenues from
the international releases LIBERTY STANDS STILL and RULES OF
ATTRACTION as well as continued strong library sales.

Lions Gate has already set in place its theatrical release slate
for most of Fiscal 2004, including such eagerly-anticipated,
high-profile films as CONFIDENCE, GODSEND, WONDERLAND, SHATTERED
GLASS, CABIN FEVER and the Sundance Film Festival acquisition
THE COOLER. In addition, the Company is positioned to generate
maximum value from the home entertainment distribution of its
current and upcoming releases as well as its library of
theatrical titles reacquired from Universal Studios during the
quarter (including such prestige films as GODS AND MONSTERS,
AFFLICTION, AMERICAN PSYCHO, THE RED VIOLIN and SHADOW OF THE
VAMPIRE).

Television revenues of $12.2 million during the quarter
decreased 61% from $31.0 million in the prior year's third
quarter due to a change in product mix and the decision to move
the delivery of the Lifetime movie to a later fiscal quarter.
Lions Gate's Termite Art nonfiction programming division
contributed revenues of $4.5 million in the quarter compared to
$3.4 million in last year's third quarter, delivering 22.5 hours
of specials to leading cable networks.

In Animation, third quarter revenues of $4.9 million decreased
44% from $8.8 million in the prior year's third quarter.
CineGroupe delivered 20 half-hours of DAFT PLANET and STRANGE
TALES during the quarter compared to 29 half-hours of SAGWA, THE
CHINESE SIAMESE CAT, WHAT'S WITH ANDY and BIG WOLF ON CAMPUS
delivered in the third quarter of Fiscal 2002.

Lions Gate is a leading, diversified independent producer and
distributor of motion pictures, home entertainment, television
programming and animation worldwide and holds a majority
interest in the pioneering CinemaNow VOD business. The Lions
Gate brand name is synonymous with original, cutting edge,
quality entertainment in markets around the world.

                           *   *   *

As reported in the August 21, 2002 issue of the Troubled Company
Reporter, the Company's recently hired independent auditors,
Ernst & Young LLP, on May 17, 2002, in their Auditors Report,
said, concerning Lions Gate Entertainment Corporation: "[T]he
Company has incurred recurring operating losses and requires
additional financing in order to produce future films.
Additionally, the Company has not successfully negotiated
distribution arrangements for future films. These matters raise
substantial doubt about the Company's ability to continue as a
going concern."


LODGENET: TimeSquare & CIGNA Report 7.8% Equity Stake
-----------------------------------------------------
TimesSquare Capital Management, Inc. and CIGNA Corporation
beneficially own 7.8% of the outstanding common stock of
LodgeNet Entertainment Corporation, represented by the ownership
of 966,493 such shares.  TimesSquare and CIGNA hold shared
voting and dispositive powers over the stock.

LodgeNet Entertainment Corporation -- http://www.lodgenet.com--
is the leading provider in the delivery of television-based
broadband, interactive services to the lodging industry, serving
more hotels and guest rooms than any other provider throughout
the United States and Canada, as well as select international
markets.  These services include on-demand digital movies,
digital music and music videos, Nintendo(R) video games, high-
speed Internet access and other interactive television services
designed to serve the needs of the lodging industry and the
traveling public.  As one of the largest companies in the
industry, LodgeNet provides service to 930,000 rooms (including
more than 850,000 interactive guest pay rooms) in more than
5,600 hotel properties worldwide.  More than 260 million
travelers have access to LodgeNet systems on an annual basis.
LodgeNet is listed on NASDAQ and trades under the symbol LNET.

The company reported a working capital deficit of about $7.5
million and total shareholders equity deficit of about $90
million at Sept. 30, 2002.


LUMENON: Ontario Court Further Extends CCAA Stay for LILT Canada
----------------------------------------------------------------
Lumenon Innovative Lightwave Technology, Inc., (NASDAQ SC: LUMM)
released details of the terms and conditions governing the
Renewal Order signed on Wednesday, February 12, 2003 by the
Superior Court of Quebec, which extends until March 6, 2003 the
Initial Order granted by the Court on January 8, 2003, providing
LILT Canada Inc., Lumenon's wholly owned Canadian operating
subsidiary, with certain relief, including a stay of proceedings
and protection from creditors under the Canadian Companies'
Creditors Arrangement Act.

The Initial Order was set to expire pursuant to its original
terms on February 7, 2003 but LILT had petitioned the Court
seeking an extension of the Initial Order.

While the Renewal Order is substantially similar to the Initial
Order it does contain some modifications including a provision
which allows the holders of Lumenon's convertible notes to serve
certain notices for the sole purpose of triggering delays
provided for under Quebec law relating to the exercise of their
rights as secured creditors of LILT. Allowing the noteholders to
serve such notices will enable them to move more quickly to
exercise their rights as secured creditors of LILT in the event
that the protection afforded to LILT by the Renewal Order
expires or is terminated.

Commenting on the extension Gary Moskovitz, Lumenon's President
and CEO said, "We are very pleased, that after the Court's
careful consideration of the facts, we were granted this
extension. Moving forward, we will continue to aggressively
pursue various restructuring scenarios with the expectation that
we will complete product development of our first series of
products, and be in a position to initiate telecommunications
certification processes by early April of this year, provided,
of course, that LILT and Lumenon can remain under the protection
of the CCAA and the automatic stay pursuant to Chapter 11
proceedings, respectively, during this time and that we have
arranged satisfactory financing."

Lumenon also announced that as a result of Lumenon's Chapter 11
bankruptcy filing on February 9, 2003, and in accordance with
Marketplace Rules 4330(a)(1) and 4300, Nasdaq has notified
Lumenon that it will delist the company's securities from the
Nasdaq SmallCap Market, subject to Lumenon's right to appeal.
Lumenon has determined not to appeal Nasdaq's decision.
Accordingly, Lumenon expects that its common stock will be
delisted from the Nasdaq SmallCap Market at the opening of
business on February 20, 2003, as specified by Nasdaq in the
delisting notification. In addition, as a result of Lumenon's
Chapter 11 filing, the fifth character "Q" will be appended to
Lumenon's trading symbol such that, effective with the opening
of trading on February 13, 2003, the trading symbol for
Lumenon's securities will be changed from LUMM to LUMMQ.

In addition, Nasdaq advised Lumenon in the delisting
notification that, because Lumenon is the subject of bankruptcy
proceedings, Lumenon's securities will not be immediately
eligible for quotation on the OTC Bulletin Board following the
delisting by Nasdaq. According to Nasdaq, Lumenon's securities
may become eligible for quotation on the OTCBB if a market maker
makes application (a "Form 211") to register in and quote the
securities in accordance with the SEC's Exchange Act Rule 15c2-
11, and Nasdaq clears the application. Only a market maker, not
Lumenon, may file a Form 211. There is no assurance that
Lumenon's securities will become eligible to trade on the OTCBB
in the future, or that a trading market will develop even if
Lumenon's securities become eligible to trade on the OTCBB in
the future. The OTCBB is a regulated quotation service that
displays real-time quotes, last-sale prices, and volume
information in over-the-counter securities. Further information
about the OTCBB is available at http://www.otcbb.com

Lumenon Innovative Lightwave Technology, Inc., a photonic
materials science and process technology company, designs,
develops and builds optical components and integrated optical
devices in the form of packaged compact hybrid glass and polymer
circuits on silicon chips. These photonic devices, based upon
Lumenon's proprietary materials and patented PHASIC(TM) design
process and manufacturing methodology, offer system
manufacturers greater functionality in smaller packages and at
lower cost than incumbent discrete technologies. Lumenon(TM) is
a trademark of Lumenon Innovative Lightwave Technology, Inc.

For more information about Lumenon Innovative Lightwave
Technology, Inc., visit the Company's Web site at
http://www.lumenon.com


MAGELLAN HEALTH: Inching Closer to Bankruptcy Day-by-Day
--------------------------------------------------------
Magellan Health Services, Inc., has retained Gleacher Partners,
LLC as its financial advisor to assist it in its efforts to
restructure its debt.  The Company is currently in discussions
with its lenders under the senior secured bank credit agreement
dated February12, 1998, as amended, and members of an ad hoc
committee formed by the holders of its 9.375% Senior Notes due
2007 and the 9% Senior Subordinated Notes due 2008.  The Lenders
and the Ad Hoc Committee have each retained separate financial
and legal advisors to assist them in the restructuring process.

               Draft Term Sheet is Circulating

The Company has had discussions with the Lenders, the Ad Hoc
Committee and their separate financial and legal advisors and
has distributed to them a [non-public] draft term sheet with
respect to a proposed financial restructuring.  The proposed
financial restructuring described in the draft term sheet
contemplates:

      * an exchange of the Subordinated Notes for
        substantially all of the equity of the Company,

      * a reinstatement of the Senior Notes with
        modification of certain interest payments from cash
        to additional Senior Notes,

      * reinstatement of the obligations under the Credit
        Agreement with modified amortization payments, and

      * a modification of the Company's contingent purchase
        price obligations to Aetna Inc. and an extension of
        the Company's customer contract with Aetna which
        currently expires December 31, 2003.

The draft term sheet contemplates that the proposed financial
restructuring will be effected through commencement of a chapter
11 case under the U.S. Bankruptcy Code and the subsequent
consummation of a plan of reorganization.  In addition, the
draft term sheet contemplates that the providers of behavioral
health services with whom the Company contracts, as well as the
Company's customers and employees, will not be adversely
affected by the restructuring, all debts owing to those parties
will continue to be paid in the ordinary course of business, and
that the Company will continue to operate in the ordinary course
of business.

Magellan cautions that although the restructuring talks are
taking place, none of the parties has agreed or is obligated to
implement the proposed restructuring or any other restructuring.
If a restructuring plan satisfactory to the Company and its
creditors can't be agreed to in the context of a prepackaged or
prearranged chapter 11 proceeding, the company will go into
bankruptcy anyway.

Magellan owes more than $1 billion as of December 31, 2002.  The
Company believes that its operations can no longer support its
existing capital structure and that it must restructure its debt
to levels that are more in line with its operations.  Although
the Company believes it has sufficient cash on hand to meets its
current operating obligations, the Company does not have
sufficient cash on hand or the ability to borrow under its Bank
Loan Agreement to pay scheduled interest and to make contingent
purchase price payments, which amounts are due this month.

                    The Credit Agreement

Magellan Health Services, Inc., and its Charter Behavioral
Health System of New Mexico, Inc., and Merit Behavioral Care
Corporation, subsidiaries are borrowers under a Credit
Agreement, according to http://www.LoanDataSource.comwith:

      * JPMorgan Chase Bank, individually and as
           Administrative Agent, Collateral Agent and an
           Issuing Bank,
      * Wachovia Bank, National Association, individually
           and as Syndication Agent and an Issuing Bank,
      * AmSouth Bank,
      * ARES Leveraged Investment Fund II, L.P.,
      * Ares IV CLO Ltd.,
      * The Bank of Nova Scotia,
      * Bank Polska Kasa Opieki S.A.,
      * Black Diamond 1999-1 Ltd.,
      * Black Diamond CLO 2000-1 Ltd.,
      * Black Diamond International Funding, Ltd.,
      * Costantinus Eaton Vance CDO V, Ltd.,
      * Credit Lyonnais N.Y. Branch, as Documentation Agent,
      * Eaton Vance CDO III, Ltd.,
      * Eaton Vance Institutional Senior Loan Fund,
      * Eaton Vance Senior Income Trust,
      * Fleet National Bank,
      * General Electric Capital Corporation,
      * Grayson & Co.,
      * Harbour View CLO IV, Ltd.
      * Highland Legacy Limited,
      * KZH Highland 2 LLC,
      * KZH Pamco LLC,
      * KZH Pondview LLC,
      * KZH Soleil LLC,
      * Long Lane Master Trust IV,
      * ML CBO IV (Cayman) Ltd.,
      * Morgan Stanley Prime Income Trust,
      * Oppenheimer Senior Floating Rate Fund,
      * Oxford Strategic Income Fund,
      * Pam Capital Funding L.P.,
      * Pamco Cayman Ltd.,
      * Senior Debt Portfolio,
      * SRV-Highland, Inc.,
      * Van Kampen Prime Rate Income Trust, and
      * Van Kampen Senior Income Trust.

Attorneys at Cravath, Swaine& Moore provide legal counsel to the
lending consortium.

JPMorgan delivered its Default Notice to Magellan, the company's
lawyers at King & Spalding in Atlanta, and HSBC Bank, the
Indenture Trustee for the 9% Senior Subordinated Notes due 2008,
on February 4, 2003.

                     New Chief Executive

On December4, 2002, Magellan names Steven J. Shulman, a managed
care executive with 30years of industry experience, as its new
chief executive officer.  Mr. Shulman is the former chairman,
president and chief executive officer of Prudential
HealthCare,Inc. Prior to joining Prudential in 1997, Shulman co-
founded Value Health,Inc., a NYSE specialty managed care company
which included one of the largest behavioral health managed care
companies at the timeValue Behavioral Health; he also served as
president of its Pharmacy and Disease Management Group. Most
recently, Shulman founded and serves as chairman and chief
executive of Internet HealthCare Group (IHCG) an early stage
health care venture fund. Prior to that, Shulman worked at
CIGNA Healthplans as president of its East Central Division
managing 11 HMOs and at Kaiser Permanente as director, medical
economics. He is a member of the board of directors of Lumenos,
Digital Insurance, RealMed, BenefitPointInc. and Ramsay Youth
ServicesInc.

Headquartered in Columbia, Maryland, Magellan Health
Services,Inc. (OCBB: MGLH), is the country's leading behavioral
managed care organization, with approximately 68million covered
lives.  Its customers include health plans, government agencies,
unions, and corporations.


MCDERMOTT INT'L: S&P Keeps B Credit Ratings on Watch Negative
-------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'B' corporate
credit ratings on McDermott International Inc. and its
subsidiary, McDermott Inc., remain on CreditWatch with negative
implications, where they were first placed on Nov. 7, 2002. This
CreditWatch update follows the New Orleans, Louisiana-based
construction and engineering firm's announcement that it has
entered into a definitive agreement with its existing lenders
providing for a new credit facility to replace two existing
facilities.

At the same time, Standard & Poor's withdrew its 'B' corporate
credit and bank loan ratings on J. Ray McDermott S.A. (J. Ray)
following the cancellation of its old credit facility.

"While liquidity is improved with the new credit facility,
Standard & Poor's still has concerns regarding the near-term
operating outlook for J. Ray, McDermott's marine construction
services subsidiary," said Standard & Poor's credit analyst Dan
DiSenso. J. Ray is experiencing cost overruns on several
projects, and the firm has hired outside consultants to review
project estimating and bidding procedures. Moreover, current
geopolitical risks will likely delay some customer capital
spending. Therefore, the company's operations could be cash flow
negative for the next few quarters.

The new $180 million secured bank facility will be available to
both J. Ray and another subsidiary, BWX Technologies. Moreover,
$105 million cash collateral will be returned to McDermott,
following cancellation of the McDermott and BWX Technologies
facility, bolstering the firm's liquidity.

Standard & Poor's will review management's plans to improve
operating performance and to strengthen project administration
procedures prior to arriving at a ratings decision.


MERITAGE CORP: Prices Add-On Offering of 9.75% Senior Notes
-----------------------------------------------------------
Meritage Corporation (NYSE:MTH) has priced an add-on offering of
$50 million in aggregate principal amount of its 9.75% senior
notes due June 1, 2011.

The notes were priced at 103.25% of their face amount to yield
9.054%. The Company intends to use the net proceeds from the
offering for general corporate purposes, which will include the
paydown of the Company's senior credit facility. Closing of the
offering is expected to occur on February 21, 2003. These notes
will be issued under an add-on provision of the indenture that
governs the 9.75% senior notes due 2011 issued by Meritage on
May 31, 2001. Collectively, they will constitute a single series
of notes with those notes, bringing the aggregate principal
amount outstanding of the 9.75% senior notes due 2011 to $205
million. In connection with the offering, the Company has agreed
to file an exchange offer registration statement under the
Securities Act in order to exchange the unregistered notes for
substantially identical registered notes. Following the exchange
offer, the notes will be identical to and trade with the 9.75%
senior notes due 2011 issued by Meritage on May 30, 2001.

The notes have been offered only to qualified institutional
buyers in the United States under Rule 144A under the Securities
Act of 1933, as amended, and certain investors outside of the
United States under Regulation S under the Securities Act. The
offering of the notes has not been registered under the
Securities Act or any state securities laws and the notes may
not be offered or sold in the United States absent registration
or an applicable exemption from the registration requirements of
the Securities Act and applicable state securities laws.

Meritage Corporation designs, builds and sells distinctive
single-family homes ranging from entry-level to semi-custom
luxury. Meritage operates in the Phoenix and Tucson, Arizona
markets under the Monterey Homes, Hancock Communities and
Meritage Homes brand names, in the Dallas/Ft. Worth, Austin and
Houston, Texas markets as Legacy Homes and Hammonds Homes, and
in the East San Francisco Bay and Sacramento, California markets
as Meritage Homes. In addition, Meritage is now active in the
Las Vegas, Nevada market. The Meritage web site is located at:
http://www.meritagehomes.com

As reported in Troubled Company Reporter's February 5, 2003
edition, Standard & Poor's raised its rating on Meritage Corp.'s
$155 million of senior unsecured notes to 'B+' from 'B'. At the
same time, the corporate credit rating on Meritage is affirmed
and the outlook is revised to positive from stable.

The rating actions acknowledge Meritage's conservative financial
risk profile relative to the present ratings, as well as the
improved financial flexibility provided by the company's new
unsecured revolver. Management has demonstrated the ability and
willingness to finance a rapidly growing homebuilding business
in a manner that will preserve below average levels of debt and
very strong interest coverage measures. Furthermore, the
integration of acquired homebuilding companies appears to have
proceeded smoothly as evidenced by the maintenance of solid
margins and inventory turnover levels. However, these strengths
are tempered by Standard & Poor's assumption that Meritage will
continue to aggressively pursue acquisitions in familiar and
possibly unfamiliar markets, potentially challenging a lean
corporate infrastructure.


MESA AIR GROUP: Increased Operating Costs Hurt Q1 2003 Results
--------------------------------------------------------------
Mesa Air Group, Inc., (Nasdaq: MESA) announced a fiscal first
quarter net loss of $0.6 million on revenues of $133.1 million.
Excluding pro forma items that included an after-tax loss of
$1.0 million from operations at CCAir, which shut down on
November 4, 2002, pro forma first quarter earnings were $0.5
million. This compares to pro forma income of $4.1 million on
revenues of $111.2 million for the comparable period in fiscal
2002. Net income of $3.7 million was reported in the first
quarter of 2002.

First quarter operating results were impacted by a significant
increase in operating costs associated with the Company's
planned growth under the US Airways and America West code-share
contracts, as well as unscheduled maintenance expenses. The
Company continued to incur expenses related to the
implementation of the new CRJ-700 and -900 aircraft, primarily
related to crew training, wages and ownership costs for
delivered but not revenue producing aircraft. The Company also
incurred additional crew costs of approximately $1.1 million
associated with preparing for the significant growth planned
under its US Airways jet contract, which commenced on February
9th with five regional jet aircraft. First quarter results were
further impacted by an increase from plan in non-CCAir related
maintenance expense of $3.5 million resulting from a significant
increase in the number of unscheduled engine overhauls. In
addition, the Company's US Airways Express turboprop flying,
Frontier JetExpress operations and Mesa's independent
Albuquerque turboprop operations, which represented 20% of
passenger revenues during the quarter, continues to be impacted
by the weak revenue environment affecting the domestic airline
industry. Given the spool-up of the Company's larger regional
jet operations, the start of the Company's additional flying for
US Airways and a recently restructured engine maintenance
agreement, the Company does not expect to incur the above
mentioned expenses in the future to the extent experienced in
this quarter.

On October 26, 2002, Freedom Airlines, which operates CRJ 700
aircraft and plans to operate CRJ-900 aircraft as America West
Express under a code-share agreement with America West, began
revenue flight operations with the larger regional jet. During
the first quarter, the Company continued its regional jet
expansion by adding four 64-seat CRJ-700 aircraft to its fleet.
Subsequent to quarter end, the Company took delivery of our
first 80-seat CRJ-900 aircraft and two additional CRJ-700
aircraft, bringing the number of regional jets in the fleet to
73. Mesa is the launch customer for the CRJ-900 and will be the
first airline in the world to operate the aircraft in revenue
service.

In January 2003, the Company reached a tentative agreement for a
new contract with the Air Line Pilots Association, which
represents our 1,300 pilots. As part of the contract, the
Company and ALPA reached an agreement concerning the Company's
participation in the US Airways 'Jets for Jobs' regional
expansion program. The contract remains subject to ratification
by the Company's pilots. Under the Company's code share
agreement with US Airways, US Airways and the Company recently
expanded their regional jet agreement by adding 20 50-seat
regional jets to the existing fleet of 32 regional jet aircraft.
In addition, the Company signed a letter of intent with US
Airways to provide an incremental 50 regional jets, including 30
70-seat regional jets. All of these additional jets are to be
operated under the US Airways 'Jets for Jobs' regional expansion
program.

"In an industry often faced with labor turmoil, we are delighted
to have reached a tentative agreement with our pilots that
provides a solid foundation and framework for our future growth.
With all parties working cooperatively towards a common goal, we
were able to reach this agreement in less than a year," said
Jonathan Ornstein, Mesa's Chairman and CEO. "In addition, the
recent decision by the ATSB to provide loan guarantees to US
Airways brings our partner several steps closer to finalizing
its restructuring, in which Mesa is proud to play a significant
role. While the quarter was difficult financially as a result of
our investment in our future and a number of one-time expenses,
we are now well positioned to take advantage of the new
opportunities at US Airways and the previously planned expansion
at America West."

As of December 31, 2002, the Company's cash and net marketable
security positions were approximately $39.8 million.

Mesa currently operates 122 aircraft with 889 daily system
departures to 147 cities, 37 states, Canada, Mexico and the
Bahamas. It operates in the West and Midwest as America West
Express, the Midwest and East as US Airways Express, in Denver
as Frontier JetExpress, in Kansas City as Midwest Express and in
New Mexico as Mesa Airlines. The Company, which was founded in
New Mexico in 1982, has approximately 3,000 employees. Mesa is a
member of Regional Aviation Partners.


METROMEDIA: Taps Steven Panagos as Chief Restructuring Officer
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave its nod of approval to Metromedia Fiber Network, Inc.'s
retention of Zolfo Cooper Management, LLC.

Steven G. Panagos will serve as the Chief Restructuring Officer,
a Member of the Boards of Directors, and a member of the
Executive Committee of the Debtors' Boards of Directors.

In his capacity as Chief Restructuring Officer, Mr. Panagos will
report directly to the Executive Committee.  Mr. Panagos will
also utilize the Staff of Zolfo Cooper including Robert Cotton,
Russell Kemp and Denise Lorenzo.  The Staff will report to Mr.
Panagos.  Mr. Panagos and Staff will provide advisory services
with respect to:

     (i) restructuring the Debtors;

    (ii) streamlining the operations of the Debtors including
         without limitation renegotiation of vendor contracts,
         leases and other fixed charges;

   (iii) a possible sale, transfer or other disposition of any
         or all of the assets of the Debtors or any possible
         business combination;

    (iv) restructuring of the Debtors' balance sheet and debt
         structure; and

     (v) such other related tasks as requested by the Executive
         Committee.

Mr. Panagos will devote a minimum of 120 hours per month for the
period of July 1, 2002 through September 1, 2002 and a minimum
of 80 hours in months thereafter.  The professionals' current
hourly rates are:

          Steven Panagos           $625 per hour
          Robert Cotton            $475 per hour
          Russell Kemp             $350 per hour
          Denise Lorenzo           $325 per hour
          Principals               $525 - $675 per hour
          Professional Staff       $250 - $520 per hour
          Support Personnel        $ 50 - $300 per hour

Metromedia Fiber Network, Inc. builds urban fiber-optic networks
distinguished by the sheer quantity of fiber available -- its
864 fibers per cable is up to nine times the industry norm --
and sells the dark fiber to telecommunications service
providers.  The Company and its debtor-affiliates filed for
chapter 11 protection on May 20, 2002 (Bankr. S.D.N.Y. Case No.
02-22736).  When the Debtors filed for protection from its
creditors, they listed $7,024,208,000 in total assets and
$4,262,086,000 in total debts.


MJ DESIGNS: Jo-Ann Stores Closes Acquisition of 3 Store Leases
--------------------------------------------------------------
Jo-Ann Stores, Inc. (NYSE: JAS.A JAS.B), the leading national
fabric and craft retailer, successfully completed the
acquisition of three store leases in the Dallas/Fort Worth area
from MJDesigns, L.P., for an undisclosed sum.

The transaction was approved by the U.S. Bankruptcy Court for
the Northern District of Texas, Fort Worth Division on
February 11.  MJDesigns, a Texas-based arts and crafts retailer,
has been operating under Chapter 11 bankruptcy protection since
December 13, 2002 (Bankr. N.D. Tex. Case No. 02-49955).

Alan Rosskamm, Jo-Ann Stores' chairman and chief executive
officer, said, "We are pleased to have acquired these well-
established locations. These stores, along with two additional
superstores we plan to open in the area during 2003, will
increase our presence in a thriving market we are very excited
about. We look forward to retaining many of the experienced
MJDesigns employees to staff our superstores."

The three stores, which had annual combined revenues of $16
million in the last full fiscal year of operation under
MJDesigns, are currently running court-approved liquidation
sales.

Jo-Ann expects to take possession of the stores in late April or
early May. The stores will be remodeled, remerchandised and
reopened as Jo-Ann superstores later this year. Including these
three locations, Jo-Ann expects to open approximately 20 new
store locations nationwide during the next 12 months.

Jo-Ann Stores, Inc. -- http://www.joann.com-- the leading
national fabric and craft retailer with locations in 48 states,
operates 847 Jo-Ann Fabrics and Crafts traditional stores and 72
Jo-Ann superstores.


MOTO PHOTO: Plans to File Chapter 11 Plan Within Two Months
-----------------------------------------------------------
Moto Photo, Inc., (PK:MOTOQ) completed the previously-announced
transaction to sell substantially all of its assets to MOTO
Franchise Corporation, pursuant to an asset purchase agreement
dated November 25, 2002.  The transaction closed on February 10.
The purchase price of $2,796,258 was reduced by the decrease in
receivables and inventory of $1,363,373 since June 30, 2002, as
provided in the asset purchase agreement entered into by the
parties and authorized by the U. S. Bankruptcy Court. The net
amount due was paid in cash and through the assumption of
liabilities. In addition, the Company could earn up to $300,000
over the next three years based on the sales performance of
franchised stores.  The sale of the assets was done under the
provisions of section 363 of the Bankruptcy Code; Moto Photo
filed a voluntary petition under Chapter 11 of the Bankruptcy
Code on November 25, 2002 (Bankr. S.D. Ohio Case No. 02-38935).

Upon consummation of the sale, MOTO Franchise Corporation began
conducting the franchise and related activities formerly
conducted by the Company. With the exception of one Company
store, which is under contract for sale and awaiting Bankruptcy
Court approval, Moto Photo, Inc., has ceased operating
activities. Moto Photo, Inc., intends to file a plan of
reorganization under the Bankruptcy Code within the next two
months. Trading in its stock is anticipated to cease upon
confirmation of the plan.

Moto Photo, Inc., was a Dayton, Ohio based franchisor and
operator of 279 one-hour photofinishing stores in the U.S. and
Canada.


NAT'L CENTURY: Mid Atlantic, et. al, Urge Court to Dismiss Cases
----------------------------------------------------------------
Pursuant to Section 1112(b) of the Bankruptcy Code and Rules
1017(f)(1) and 9014 of the Federal Rules of Bankruptcy
Procedure:

    (a) Mid Atlantic Home Health Network, Inc., National Nurses
        Services, Springs Nursing Home, LLC, Hunt Country Home
        Health, Inc. and Hunt Country Services -- the Mid
        Atlantic Entities -- ask the Court to dismiss NPF VI'S
        Chapter 11 case;

    (b) Pain Control Consultants ask the Court to dismiss the
        Chapter 11 case of Debtor NPF XII;

    (c) Pain Net, Inc., ACCI/AllCare, Inc., ACCI AllCare of
        Massachusetts, Inc., ACCi/AllCare of Pennsylvania, Inc.,
        Allmed Services, Inc., Pain Net Northern California
        Management Corporation, Rivertown Surgery Center, LLC,
        Strongin Health Services Corporation and Texas NPI, Inc.
        -- the Pain Net Entities -- ask the Court to dismiss the
        Chapter 11 cases of Debtors NPF VI, Inc. and NPF XII,
        Inc.; and

    (d) Living Hope Southwest Medical Services, LLC, asks the
        Court to dismiss the Chapter 11 case of Debtor NPF XII,
        Inc.

Charles H. Cooper, Jr., Esq., at Cooper & Elliot, in Columbus,
Ohio, recounts that prior to National Century Financial
Enterprises, Inc. and its debtor-affiliates' bankruptcy filing,
the Mid Atlantic Entities, Plan Control, Living Hope and Pain
Net Entities entered into Sale Agreements and Amendments with
NPF VI or NPF XII.  Pursuant to the Sale Agreements, the NPF
Funds would finance accounts receivable generated by the
Healthcare Providers on a weekly revolving basis, and advance
these funds to them for use in the payment of all essential
operating expenses.  However, Mr. Cooper notes, NPF unilaterally
and without notice ceased providing the funds needed to finance
their operations.

On the Petition Date, NCFE filed its Adversary Complaint naming
the Mid Atlantic entities, Pain Control, Living Hope and Pain
Net Entities as defendants and the Court issued an Order
prohibiting them from asserting any ownership or control over
the proceeds of the Purchased Receivables.

According to Mr. Cooper, the articles of incorporation of NPF VI
and NPF XII require that "at all times, at least one of the
directors of the Corporation will be an independent director who
will at no time be a shareholder or a director, officer,
employee, or affiliate of any shareholder of the Corporation."
See Articles of Incorporation, Article 7.

The articles of incorporation for NPF VI and NPF XII further
require that:

    [T]he Corporation will not, without the affirmative vote of
    100% of the members of the Board of Directors of the
    Corporation:

    (a) institute a proceeding to be adjudicated insolvent, or
        consent to the institution of any bankruptcy or
        insolvency case or proceeding against it, or file or
        consent to a petition under any applicable federal or
        state law relating to bankruptcy, seeking the
        corporation's liquidation or reorganization or any other
        relief for the Corporation;

    (b) amend, alter, change or repeal Article 3, Article 6,
        Article 7 or Article 8;

Mr. Cooper informs that Court that based on information
currently available to the Healthcare Providers, it appears that
the Chapter 11 petition filed on behalf of NPF VI and NPF XII
were not properly authorized.  "This is more than a technical
shortcoming that might be excused as an oversight in the
Debtors' rush to commence Chapter 11 cases in the face of
federal criminal investigations and collapsing credit ratings,"
Mr. Cooper says.

In the Debtors' Certificate of Resolutions dated November 18,
2002, Sherry Gibson, allegedly acting on behalf of NCFE as the
sole shareholder of NPF VI and NPF XII, purports to authorize
the filing of bankruptcy petition for NPF VI and NPF XII.
Though, Mr. Cooper notes, there is no recitation of any vote by
the board of directors of either NPF VI or NPF XII to authorize
the filing of the bankruptcy petitions, and apparently, there
was no such vote.  Moreover, there is no indication as to who
the members of the board of directors of NPF VI an NPF XII were
when the bankruptcy filing as purportedly authorized, whether
the board contained at least one "independent director" or that
the Board unanimously authorized any bankruptcy filing as
required by the Debtors' Articles of Incorporation.

Hence, Mr. Cooper asserts that the NPF VI and NPF XII's
bankruptcy case should be dismissed because:

A. Standard for Dismissal Under Section 1112(b)

    Section 1112(b) of the Bankruptcy Code permits the Court, on
    request of any party in interest, to dismiss a Chapter 11
    case for cause.  The Bankruptcy Code sets forth a list of
    factors that may constitute cause to dismiss a chapter 11
    case.

    Mr. Cooper explains that it has been the law that a
    corporation may file a voluntary bankruptcy petition only if
    authorized to do so under applicable state corporate
    governance and the corporation's organizational documents.

B. Ohio Law and NPF Debtors' Organizational Documents Require
    Approval of the Board of Directors to Commence Voluntary
    Bankruptcy Proceedings

    The Ohio General Corporation Law provides that "except where
    the law, the articles, or the regulations require action to
    be authorized or taken by shareholders, all of the authority
    of a corporation will be exercised by or under the direction
    of its directors."

    Mr. Cooper emphasizes that under the Ohio law, the board of
    directors of a corporation has the power to authorize the
    filing of a bankruptcy petition.  If the bankruptcy filing
    is not properly authorized, the court must dismiss the
    petition.

C. The Test for Proper Authorization

    Mr. Cooper also points out that the articles of
    Incorporation of NPF VI and NPF XII contains requirements
    pertinent to authorization for a voluntary bankruptcy
    filing:

    -- that the board of directors consist of at least one
       independent director, and

    -- a supermajority (100%) vote of the board of directors of
       NPF XII to authorize filing a bankruptcy petition.

    These requirements could not be amended or changed without
    the vote of 100% of the board of directors, including at
    least one independent director as stated on the Articles of
    Incorporation, Article 8(b).  These requirements were
    included specifically to deprive NCFE, as the sole
    shareholder, of the authority unilaterally to place the NPF
    Funds into bankruptcy. If the articles of incorporation do
    not fix the number of directors, as is the case here, the
    Ohio Code fixes the number at three, unless the corporation
    has fewer than three shareholders, in which case it could
    have the same number of directors as shareholders.

    It appears that NPF VI and NPF XII had only one shareholder
    each, and therefore could have had as few as one director
    each.  However, Mr. Cooper tells Judge Calhoun that one
    director had to be an independent director.

D. The Cases of Debtors NPF VI and NPF XII Should be Dismissed
    for Cause Mr. Cooper assures the Court that the Movants will
    establish at the hearing that the corporate resolutions
    purporting to authorized the filing of the Chapter 11
    petitions were not adopted in compliance with the principle
    of Ohio corporation law and provisions in the articles of
    incorporation of NPF VI and NPF XII requiring that a
    voluntary bankruptcy filing must be approved by 100% of the
    directors of each corporation, including at least one
    independent director.

    The petitions purportedly were authorized only by NCFE in
    its capacity as sole shareholder of NPF VI and NPF XII even
    though the articles of incorporation were structured
    specifically to prevent NCFE, as the sole shareholder, from
    acting unilaterally to place the NPF Funds in bankruptcy.

    Furthermore, at the time the petitions were filed, NCFE
    appointed David Coles as director of NPF VI and NPF XII.
    Mr. Coles, however, is a principal of Alvarez & Marsal, a
    restructuring consultants/crisis managers hired by NCFE.  He
    therefore is not, and never was, independent and his vote
    could not have been sufficient to authorize a Chapter 11
    filing.

    Thus, even if the Debtors had attempted to comply with the
    requirement of Ohio law, its voluntary petition for
    bankruptcy must be approved by the board of directors of the
    present debtor, and the Movants are currently aware of no
    evidence that they did.  Thus, their resolution is invalid
    under the articles of incorporation because the boards had
    no independent directors.

    Ultimately, the bankruptcy petition of NPF VI and NPF XII
    were filed with the authorization of no one other than NCFE,
    the sole shareholder of these debtors, and it has been
    settled law for 57 years that the shareholders of an Ohio
    corporation may not commence a bankruptcy petition on its
    behalf. (National Century Bankruptcy News, Issue No. 9;
    Bankruptcy Creditors' Service, Inc., 609/392-0900)


NETIA HOLDINGS: Court Dismisses All Objections to Restructuring
---------------------------------------------------------------
Netia Holdings S.A., (WSE: NET, NET2) Poland's largest
alternative provider of fixed-line telecommunications services,
said that all objections to Netia's restructuring previously
filed by minority claimholders in United States Bankruptcy Court
had been dismissed.

The minority claimholders had objected, among other things, to
the turnover of funds to Netia that had been maintained by Netia
for the benefit of certain of its former bondholders. The United
States Bankruptcy Court will now decide when these funds will be
turned over to Netia.

Netia Holdings SA's 13.125% bonds due 2009 (NETH09NLN1),
DebtTraders says, are trading 17 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NETH09NLN1
for real-time bond pricing.


OREGON STEEL: Soft Industry Conditions Prompt Negative Outlook
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Portland, Oregon-based Oregon Steel Mills Inc. to negative from
stable based on overall soft industry conditions and increased
raw material costs.

Standard & Poor's said that it has affirmed its 'BB-' corporate
credit rating on the company. Oregon Steel has $305 million in
total debt.

"Standard & Poor's is concerned that soft industry conditions in
some of Oregon Steel's key product segments and increased raw
material costs could be prolonged and cause deterioration of the
company's credit measures," said Standard & Poor's credit
analyst Paul Vastola. "Rising costs together with declining
volumes and selling prices and a shift to a lower product
mix will put significant pressure on the company's margins."

Standard & Poor's said that its ratings reflect Oregon Steel
Mills' diversified product mix and good market position. The
ratings also reflect its aggressive capital structure and
volatile operating performance due to exposure to cyclical
industries, particularly the oil and gas transmission pipeline
business.

DebtTraders reports that Oregon Steel Mills Inc.'s 11.000% bonds
due 2003 (OS03USR1) are trading at 93 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=OS03USR1for
real-time bond pricing.


O'SULLIVAN INDUSTRIES: Net Capital Deficit Widens to $60 Million
----------------------------------------------------------------
O'Sullivan Industries Holdings, Inc. (OTC Bulletin Board:
OSULP), a leading manufacturer of ready-to-assemble furniture,
reported its fiscal 2003 second quarter operating results for
the period ended December 31, 2002.

                         Net Sales

Net sales for the second quarter were $79.1 million, a decrease
of 6.2% from sales of $84.3 million in the comparable period a
year ago. Year to date net sales were $150.7 million, a decrease
of 9.5% from net sales of $166.5 million in the comparable
period a year ago. Net sales for the prior year periods have
been adjusted to reflect the adoption of an accounting
pronouncement that reclassifies certain selling expenses to a
reduction of net sales.

                         Operations

Operating income for the second quarter was $8.1 million, or
10.3% of net sales, a decrease of 4.3% from operating income of
$8.5 million, or 10.0% of net sales, in the comparable period a
year ago. Year to date operating income was $16.0 million, or
10.6% of net sales, an increase of 8.5% from operating income of
$14.8 million, or 8.9% of net sales, in the comparable period a
year ago.

                       Income and EBITDA

Net loss for the second quarter was $1.1 million compared to net
income of $1.1 million in the comparable quarter a year ago.
Year to date net loss was $2.7 million compared to net loss of
$300,000 in the comparable period a year ago. The increased net
loss reflects increased income tax expense from the arbitration
settlement with RadioShack. During the fiscal 2003 second
quarter and six-month periods ending December 31, 2002, our
payments to RadioShack totaled $3.1 million, and $6.2 million,
respectively.

Adjusted EBITDA for the second quarter was $11.7 million, or
14.8% of net sales, a decrease of 5.1% from adjusted EBITDA of
$12.3 million, or 14.6% of net sales in the comparable period a
year ago. Year to date adjusted EBITDA was $23.2 million, or
15.4% of net sales, an increase of 3.9% from adjusted EBITDA of
$22.3 million, or 13.4% of net sales in the comparable period a
year ago. The attached table reconciles adjusted EBITDA to net
income.

We define adjusted EBITDA as earnings before interest, taxes,
depreciation, amortization and the accrual of special payment on
options to purchase Series A junior preferred stock. Adjusted
EBITDA is presented to provide additional information about our
operations. This item should be considered in addition to, but
not as a substitute for or superior to, operating income, net
income, operating cash flow and other measures of financial
performance prepared in accordance with generally accepted
accounting principles. Adjusted EBITDA may differ in the method
of calculation from similarly titled measures used by other
companies. Adjusted EBITDA provides another measure of the
operations of the business of O'Sullivan prior to the impact of
interest, taxes and depreciation. Further, adjusted EBITDA is a
common method of valuing highly leveraged companies such as
O'Sullivan, and adjusted EBITDA is a component of each of the
financial covenants in our senior credit facility.

                      Working Capital

For the six months ending December 31, 2002, net cash provided
by operating activities was $1.7 million, compared to net cash
provided by operating activities of $26.3 million in the
comparable period a year ago. The biggest change from the prior
year was $11.8 million in accounts payable and accrued
liabilities related to the timing of plant shutdowns and
incentive compensation payments and accruals between the two
years.

Inventory levels at the end of the current quarter were $49.0
million compared to the low $43.1 million balance at December
31, 2001, an increase of $5.9 million, or 13.9%. However,
inventory levels have decreased $8.0 million, or 14.0%, from
$57.0 million at the end of the quarter ended September 30,
2002. Accounts receivable levels during the current quarter
dropped to $37.8 million from $48.5 million in the prior year
quarter, a decrease of $10.7 million, as we have decreased our
days sales outstanding compared to the prior year.

Capital expenditure spending for the six-month period ended
December 31, 2002 was $2.7 million, a decrease of $3.2 million,
from the $5.9 million spent in the comparable period a year ago.
Cash on hand levels remained strong at $9.0 million compared to
$20.6 million in the prior year.

At December 31, 2002, the Company's balance sheet shows a
working capital deficit of about $60 million.

                    Management Comments

Richard Davidson, president and chief executive officer stated,
"During the recently completed quarter, O'Sullivan Furniture was
challenged with the continuing difficult business environment.
Although we believe that our top line performance is in-line
with the overall RTA market, it continues to be disappointing.
However, we are taking actions to diversify our product
offerings and customer base in an effort to improve our future
top line results. These initiatives include our recently
announced licensing agreement with Coleman for a line of
innovative storage products. We are also aggressively pursuing
the Commercial Office Furniture and Systems segment and have
recently placed groups in two major office superstores.

"Even with the sales decline, O'Sullivan Furniture continues to
deliver improving operating and adjusted EBITDA margins from the
efforts we have undertaken over recent quarters," continued Mr.
Davidson. "Due to the uncertainty of the U.S. economy and the
RTA furniture market, we will continue to manage our cost
structure to leverage our position as a low-cost producer."

Mr. Davidson concluded, "Looking to the March quarter, we see no
improvement in the near-term business environment. In fact,
comparisons with the prior year March quarter will be extremely
difficult due to the high level of sales recorded last year from
post-2001 Christmas replenishments and the rollout of new
products to several mass merchants. Therefore, we currently
expect gross sales in the third quarter of fiscal 2003 will be
about 15% lower than sales in the third quarter of fiscal 2002.
We anticipate our fiscal 2003 third quarter operating income to
decline approximately 20% to 30% from the fiscal 2002 third
quarter."


PHOTOWORKS: Says Funds Enough to Finance Near-Term Operations
-------------------------------------------------------------
PhotoWorks, Inc., is a leading photo services company dedicated
to providing its customers with innovative ways to create and
tell the stories of their lives through photos. The Company
offers an array of complementary services and products primarily
under the brand names PhotoWorks(R) and Seattle FilmWorks(R).

To promote its service and products, the Company relies
primarily on direct marketing via mail and online email
programs. Management believes its complementary value-added
services and products promote customer loyalty and increase
customer demand. The Company strives to increase both average
order size and order frequency by informing its existing
customer base of its integrated array of services and products.
The Company also believes that the online archive provides an
opportunity to monetize its customer's "personal equity" through
photo output, in the form of prints, reprints, and gifts for
traditional and digital camera users. The Company's commitment
to expanding its digital service and product offerings is
intended to support this strategy. The Company uses email and
other direct-marketing media to effectively communicate
with both its existing and inactive customers.

The net loss for the first quarter of fiscal 2003 was
$1,050,000, compared to a net loss of $167,000 for the first
quarter of fiscal 2002. Operating results may fluctuate in the
future due to changes in the mix of sales, marketing and
promotional activities, price increases by suppliers,
introductions of new products, research and development
requirements, actions by competitors, conditions in the direct-
to-consumer market and the photofinishing industry in general,
national and global economic conditions and other factors.

Net revenues for the first quarter of fiscal 2003 were
$8,353,000 as compared to net revenues of $11,063,000 in the
first quarter of fiscal 2002. The decrease in net revenues was
primarily due to declines in traditional film processing
volumes. In the first quarter of fiscal 2003, net revenues from
digital printing services increased to approximately 9% of net
revenues, or $752,000, compared to 4.5% of net revenues, or
$493,000, in the first quarter of the prior year. Additionally,
net revenues in the first quarter of fiscal 2002 included
approximately $700,000 from sales of the Company's preloaded
cameras. There were no sales of preloaded cameras in the current
year. The Company also closed a number of retail locations in
fiscal 2002, which accounted for approximately $300,000 in
revenues in the first quarter of the prior year. Net revenues in
fiscal 2003 are expected to be lower than fiscal 2002 primarily
due to lower film processing volumes.

Cost of goods and services consists of labor, postage, supplies
and fixed operating costs related to the Company's services and
products. Gross profit in the first quarter of fiscal 2003
decreased to 22.4% of net revenues compared to 23.3% in the
first quarter of fiscal 2002. The decrease in gross profit is
primarily due a lower margin on certain digital print services,
particularly the Company's $.19 print sale on digital prints,
and increased customer service costs related to new services.
Gross profit fluctuates due to the seasonal nature of revenues
when measured against relatively fixed overhead costs associated
with equipment and facilities.

Total operating expenses in the first quarter of fiscal 2003
increased to 34.6% of net revenues compared to 24.1% in the
first quarter of fiscal 2002, primarily due to lower net
revenues. Additionally, the Company has increased research and
development expenditures on its digital initiatives. Future
periods may reflect increased or decreased operating costs due
the timing and magnitude of marketing activities and research
and development activities.

Marketing expenses in the first quarter of fiscal 2003 increased
to 11.0% of net revenues compared to 8.4% in the first quarter
of fiscal 2002. Marketing expenditures in the first quarter of
fiscal 2003 were higher primarily due to the Company's continued
focus on retention and reactivation marketing programs. In
addition, the Company is testing marketing programs to acquire
new digital customers. Overall marketing expenditures for fiscal
2003 are expected to be lower as compared to fiscal 2002.

Research and development expenses increased to $536,000 for the
first quarter of fiscal 2003 compared to $416,000 in the first
quarter of fiscal 2002. The increase is due primarily to
investments in new digital related services that will offer
digital camera users with solutions to their digital printing
needs and offer film based customers the convenience of digital
services. Research and development expenses consist primarily of
costs incurred in developing online photo archiving and photo
sharing services, computerized online image management concepts,
other online services, and creating equipment necessary to
provide customers with new digital photographic services and
products. Research and development expenditures are expected to
be higher in fiscal 2003 as compared to fiscal 2002.

General and administrative expenses increased to $1,435,000 for
the first quarter of fiscal 2003 compared to $1,316,000 for the
first quarter of fiscal 2002. The increase is primarily due to
increased legal and accounting fees and costs associated with
information and technology services. General and administrative
expenses consist of costs related to management information
systems, computer operations, human resource functions, finance,
legal, accounting, investor relations and general corporate
activities.

                 Liquidity and Capital Resources

As of February 1, 2003, the Company's principal source of
liquidity included approximately $3,934,000 in cash and cash
equivalents, which includes the $1,808,000 tax refund received
in January 2003. In addition, in the first quarter of fiscal
2003, the Company generated cash from operating activities of
$880,000 compared to $48,000 in the first quarter of fiscal
2002. The increase was due to certain expenditures made in
September 2002 of $3,455,000, primarily for prepayment of
postage amounts, which is being utilized in fiscal 2003. As of
December 28, 2002, approximately $1,747,000 of the prepaid
expenditures remain. The decrease in prepaid expenses of
$1,899,000 was partially offset by a decrease in accounts
payable of $430,000, a decrease in accrued compensation of
$346,000 and an increase in net loss.

The Company currently anticipates that existing cash and cash
equivalents and projected future cash flows from operations will
be sufficient to fund its operations, including any capital
expenditures, through at least December 31, 2003. However, if
the Company does not generate sufficient cash from operations to
satisfy its ongoing expenses, the Company may be required to
seek external sources of financing or refinance its obligations.
Possible sources of financing include the sale of equity
securities or bank borrowings. There can be no assurance that
the Company will be able to obtain adequate financing in the
future.


PLANVISTA: Resolves Suit with Trewit & Harrington Benefit
---------------------------------------------------------
Plan Vista Corporation and Plan Vista Solutions have resolved
litigation with Trewit, Inc. and Harrington Benefit Services,
Inc. without payment by PlanVista Corporation or PlanVista
Solutions, and the parties have signed mutual releases.

At September 30, 2002, Planvista reported  a total shareholders
equity deficit of about $14 million.


PLAINTREE SYSTEMS: Wins Court Approval of Proposal to Creditors
---------------------------------------------------------------
Plaintree Systems Inc., (TSX: LAN; OTC BB: LANPF) announced that
on January 29, 2003, they received Court approval for its
Proposal to Creditors. The PTC was accepted on January 8 by
approximately 90% of its creditors represented at the meeting of
creditors.

"To summarize the Proposal, the Company is required to arrange
for a new $175,000 financing, and out of such funds Plaintree
will pay its unsecured creditors up to $.30 on the dollar for
their claims that existed on November 18, 2002," stated David
Watson, President and CEO. "If the Company is unable to arrange
for the financing, then the unsecured creditors will be paid up
to $.50 on the dollar from any future available cash flow
generated by the Company between January 1, 2003 and
December 31, 2006."

Further details regarding the PTC can be obtained on the
Company's Web site at http://www.plaintree.com The secured
creditors of the Company are not affected by the results of the
PTC.

Plaintree continues to investigate sources of financing.
However, if the Company is not successful in obtaining the
necessary funding and/or if the Company does not meet its
existing forecast, continuation of the existing business may not
be viable. There can be no assurance that the Company will be
able to raise additional capital.

Ottawa-based, Plaintree -- http://www.plaintree.com-- founded
in 1988, develops and manufactures the WAVEBRIDGE series of FSO
wireless links using Class 1, eye-safe LED (Light Emitting
Diode) technology. Plaintree is publicly traded in Canada on The
Toronto Stock Exchange and in the U.S. on the OTC: Bulletin
Board, with 90,221,869 shares outstanding.


POLAROID: Wants Lease Decision Period Extended Through July 31
--------------------------------------------------------------
Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in Wilmington, Delaware, relates that to date, Polaroid
Corporation and its debtor-affiliates are lessees to a number of
non-residential real property. Although almost all of the
unexpired leases have been rejected or assumed and assigned
pursuant to the Asset Purchase Agreement and the Sale Order, the
Debtors are still in the process of determining which leases of
real property will remain with their estates.

The Debtors expect to ultimately seek the Court's permission to
reject some, if not all, of the remaining Unexpired Leases prior
to the conclusion of their Chapter 11 cases.  However, Mr.
Galardi points out that some of the remaining Unexpired Leases
may prove to be "below market" leases that may yield value to
the estates through their assumption and assignment to third
parties. Until the Debtors have had the opportunity to complete
a thorough review of all of the remaining Unexpired Leases, they
cannot determine exactly which of the remaining Leases should be
assumed, assigned or rejected.

Moreover, Mr. Galardi explains, even though the Debtors have
made substantial progress in their evaluation of the Unexpired
Leases, the Debtors have not yet been able to assess the value
or marketability of all of the Unexpired Leases. Indeed, the
Debtors believe that, due to the potential importance of the
task, the size of the Debtors' cases and the Debtors' primary
focus on developing a fair and equitable liquidating plan of
reorganization, it will be impossible to them to adequately
assess whether to assume or reject the remaining Unexpired
Leases prior the deadline.

Thus, pursuant to Section 365(d)(1) of the Bankruptcy Code, the
Debtors ask the Court to extend the period for them to decide
whether to assume or reject an Unexpired Lease through and
including the earlier of July 31, 2003 or the date of plan
confirmation.

Mr. Galardi contends that the extension should be granted under
Section 365(d)(1) because:

    (a) the Debtors' cases are large and complex, with
        $1,900,000,000 revenues, 8,000 employees and operations
        worldwide;

    (b) the Debtors have consummated the sale of substantially
        all of their assets and have submitted a disclosure
        statement and revised liquidating plan of
        reorganization;

    (c) the Debtors need more time to do the review of the
        remaining Unexpired Leases before making any decision;
        and

    (d) the Debtors will continue to remain current on all of
        their postpetition rent obligations.

Absent the extension, Mr. Galardi says, the Debtors might be
compelled to prematurely assume substantial long-term
liabilities or forfeit the benefits associated with some of the
Unexpired Leases.

By application of Del.Bankr.LR 9006-2, the current deadline is
automatically extended through the conclusion of the hearing on
the Debtors' request scheduled on February 18, 2003. (Polaroid
Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


PRIME HOSPITALITY: S&P Watches BB Rating After Weak Q4 Earnings
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB' corporate
credit rating for Fairfield, New Jersey-based Prime Hospitality
Corp. on CreditWatch with negative implications following its
recent earnings announcement.

For the fourth quarter of 2002, Prime's core portfolio
experienced a 5% decline in revenue per available room over last
year. EBITDA for the period declined by almost 50% to $9.9
million primarily due to lower occupancy levels and asset
divestitures. Additionally, credit measures are very weak for
the rating, with operating lease-adjusted debt to EBITDA at a
little under 5x and interest coverage just under 2x. Total
operating lease-adjusted debt at the end of December 2002 was
around $515 million.

"In resolving the CreditWatch listing, Standard & Poor's will
meet with management to discuss the lodging operating
environment, and management's intermediate-term financial
strategy," said Standard & Poor's credit analyst Stella Kapur.

Prime Hospitality owns, manages, and franchises 247 hotels
throughout the U.S. The company owns and operates three
proprietary brands that compete in different segments:
AmeriSuites, Wellesday Inns & Suites, and Prime Hotels and
Resorts. Also within its portfolio are owned and/or managed
hotels operated under franchise agreements with national hotel
chains including Hilton, Radisson, Sheraton, Holiday Inn, and
Ramada.


PRIMUS TELECOMMS: Shareholders To Convene March 31 in Virginia
--------------------------------------------------------------
The Special Meeting of Stockholders of Primus Telecommunications
Group, Incorporated, a Delaware corporation, will 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.

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, Web hosting, enhanced application,
virtual private network, 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 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 Telecom Group's 11.750% bonds
due 2004 (PRTL04USR1) are trading between 91 and 93. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=PRTL04USR1
for real-time bond pricing.


PRIMUS TELECOMMS: Dec. 31 Balance Sheet Upside-Down by $200 Mil.
----------------------------------------------------------------
PRIMUS Telecommunications Group, Incorporated (Nasdaq:PRTL), a
global facilities-based Total Service Provider offering an
integrated portfolio of voice, data, Internet, and Web hosting
services, announced results for the fourth quarter and full year
ended 2002, and provided guidance for 2003.

"The year 2002 is one in which PRIMUS ensured it would be a
survivor and laid a strong foundation for future growth and
profitability," stated K. Paul Singh, Chairman and Chief
Executive Officer of PRIMUS. "Our performance for the fourth
quarter added a substantive flourish to a year for which all
PRIMUS employees can be justifiably proud. Contrary to the
trends that have buffeted the telecommunications industry,
PRIMUS has -- for the third consecutive quarter -- reported
revenue growth, and -- for the seventh consecutive quarter --
improved EBITDA (earnings before interest, taxes, depreciation
and amortization). In fact, the record $30 million EBITDA in the
fourth quarter exceeded our upwardly revised goals and resulted
in a record full year 2002 EBITDA of $101 million.

"The accomplishments of this past year reflect the successful
execution of the three-pronged strategy we adopted almost two
years ago -- accelerate EBITDA generation, reduce debt and, once
sufficient progress had been made on both those fronts, access
capital on favorable terms. Through a combination of cost
reduction efforts, implementing operational efficiencies, and
pruning low-margin businesses, we were able to grow our EBITDA
from $12 million in 2001 to $101 million in 2002. Over the past
two years, we have reduced our debt from $1.3 billion to $591
million. The success of our improved operating performance and
our debt reduction efforts enabled us to close the first part
($33 million) of an overall $42 million Convertible Preferred
Stock investment by funds affiliated with the American
International Group at year-end 2002 -- a fitting conclusion to
a spectacular year."

               Fourth Quarter Financial Results

PRIMUS's net revenue in the fourth quarter of 2002 was $268
million, compared with $261 million in the prior quarter and
$259 million for the fourth quarter of 2001. "The increase in
revenue, both year-over-year and sequentially, is attributable
to growth in our retail operations in the United States,
Australia, Canada and Europe," stated Neil L. Hazard, Executive
Vice President and Chief Operating and Financial Officer of
PRIMUS. Net revenue for the fourth quarter on a geographic basis
was derived as follows: 38% from North America, 35% from Europe,
and 27% from Asia-Pacific. The mix of revenues by customer type
in the fourth quarter was 77% retail (25% business and 52%
residential) and 23% carrier, compared with third quarter 2002
retail revenues of 76% and carrier revenue of 24%. Data/Internet
and voice-over-Internet protocol revenues were $42 million in
the fourth quarter, representing 16% of total revenues.

The process of migrating customers from Cable & Wireless to
PRIMUS commenced in the United States late in the fourth
quarter, pursuant to the Company's previously announced
acquisition. This process will continue in the first quarter of
2003, and the full quarterly revenue will be realized in the
second quarter of 2003. We expect sustainable annual revenue
from this customer base to be in the $40 million range.

As a percentage of net revenue, gross margin for the fourth
quarter 2002 was a record 36.3%, an increase of 190 basis points
over the third quarter's 34.4%, and 34.6% gross margin in the
fourth quarter of 2001. Gross margin for the fourth quarter 2002
was a record $97 million, compared with $90 million in both the
prior quarter and fourth quarter of 2001. "The record gross
margin demonstrates the Company's ability to manage its cost
structure and reflects a more favorable mix of higher-margin
retail revenues," said Mr. Hazard.

Selling, general and administrative expenses for the fourth
quarter of 2002 were $67 million or 25.1% of net revenue, as
compared to $70 million or 26.9% of net revenue for the fourth
quarter of 2001, primarily due to reductions in staffing costs.

EBITDA for the fourth quarter of 2002 was a record $30 million,
compared to $26 million in the prior quarter, and $20 million in
the fourth quarter of 2001. "With 15% sequential growth in
EBITDA, PRIMUS has exceeded the high end of its goal of $100
million in EBITDA in 2002, and now has an annualized EBITDA run
rate of $120 million," stated Mr. Hazard. The operating loss in
the fourth quarter was $14 million (which includes a $22 million
non-cash non-recurring asset impairment write-down principally
related to the Company's telecommunications network) as compared
to an operating loss of $550 million in the year-ago quarter
(which included a $526 million non-cash non-recurring asset
impairment write-down).

In the fourth quarter of 2002, PRIMUS purchased in the open
market $21 million in principal amount of its high yield notes
for $11 million. This resulted in an extraordinary gain of $9
million. Including this extraordinary gain, PRIMUS had a loss of
$18 million in the fourth quarter of 2002, compared with a net
loss of $482 million for the fourth quarter 2001. The weighted
average number of basic and diluted common shares outstanding
this quarter was 64.9 million compared to 58.2 million for the
fourth quarter of 2001.

For the full year 2002, revenue was $1.02 billion as compared to
$1.08 billion for the full year 2001, a 5% decrease attributable
primarily to de-emphasizing EBITDA-negative products and
businesses. EBITDA was a record $101 million for 2002, as
compared to $12 million in 2001. The Company recorded an
operating loss in 2002 of $(3) million, compared to a loss of
$672 million in 2001. PRIMUS's net loss was $35 million for the
full year 2002. This compares to a loss of $306 million for the
full year of 2001. The weighted average number of basic and
diluted common shares outstanding for the full years 2002 and
2001 was 64.6 million and 53.4 million, respectively.

                    Management Goals for 2003

Based upon cumulatively strong operating results over the last
six quarters, the Company is cautiously optimistic with respect
to its prospects for 2003. Barring adverse geo-political
developments and worsening trends in the telecommunications
industry specifically, our goals for 2003 are: (1) revenue
growth in the range of 6% to 8% over 2002; (2) EBITDA growth of
at least 30% over the prior year; (3) capital expenditures in
the range of $30 million to $35 million; and (4) positive
earnings per share by year-end 2003.

                Liquidity And Capital Resources

PRIMUS ended the fourth quarter of 2002 with restricted and
unrestricted cash of $104 million, as compared to $79 million in
the prior quarter. Included in the year-end cash balance is $33
million from the first closing issuance of Series C Convertible
Preferred Stock in December 2002. We have scheduled on March 31,
2003 a Special Meeting of Stockholders to seek approval for the
second step closing involving the issuance of approximately $9
million of Series C Convertible Preferred Stock, consistent with
Nasdaq requirements.

At year-end 2002, PRIMUS had total long-term debt of $591
million, comprised of $369 million of senior notes, $71 million
of convertible debentures, and $151 million of vendor and other
debt. During the fourth quarter, the Company spent $7 million on
capital expenditures, $11 million to purchase long-term debt in
the open market and approximately $13 million in interest
payments. Subsequent to year-end 2002, the Company spent $36
million to purchase $44 million principal amount of senior notes
with a maturity date of August 2004. With this purchase, the
Company has reduced the amount of senior notes due in August
2004 to $43.6 million. Correspondingly, the Company's run rate
interest expense on its total debt will be approximately $14
million per quarter going forward.

Effective at the close of trading, the 8% Performance Adjustment
feature of the Series C Convertible Preferred Stock, which was
payable in cash or stock at the Company's option, has been
extinguished prospectively since the Company has achieved one of
the "Performance Milestones." The amount earned under the 8%
Performance Adjustment through February 13, 2003 will be
"payable" as an adjustment to the Conversion Price. Accordingly,
the initial conversion price of $1.875 per share of common stock
has been adjusted to $1.857 per share.

The Company intends to continue to pursue opportunities to raise
additional debt and equity financing on favorable terms in order
to take advantage of opportunities to improve further its
liquidity and expand its current business.

The Company and/or its subsidiaries will evaluate and determine
on a continuing basis, depending upon market conditions and the
outcome of events described as "forward-looking statements" in
this release and our SEC filings, the most efficient use of the
Company's capital, including investment in the Company's network
and systems, lines of business, potential acquisitions,
purchasing, refinancing, exchanging or retiring certain of the
Company's outstanding debt securities in the open market or by
other means to the extent permitted by its existing covenant
restrictions. While the Company has suspended discussions it had
been conducting with certain of its high yield bondholders, it
remains receptive to proposals made by individual holders.

At December 31, 2002, Primus Telecommunications' balance sheet
shows a working capital deficit of about $73 million, and a
total shareholders' equity deficit of about $200 million.

PRIMUS Telecommunications Group, Incorporated (NASDAQ: PRTL) 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.


QUEBECOR INC: Dec. 31 Working Capital Deficit Tops C$600 Million
----------------------------------------------------------------
Quebecor Inc., (TSX:QBR.A) (TSX:QBR.B) recorded revenues of
C$12.01 billion in the 2002 financial year, compared with
C$11.63 billion in 2001, a 3.4% increase. (All succeeding
monetary figures are expressed in Canadian dollars unless
specified otherwise). On a pro forma basis, revenues totaled
$12.07 billion in 2001. The pro forma figures for 2001 report
Quebecor Media's results as if the transfer of control over the
Cable Television segment in May 2001 and TVA Group in September
2001 had occurred on January 1, 2001. The higher revenues in
2002 mainly reflect the inclusion of the results of the Cable
Television segment and of TVA Group, the inclusion of the
results of the Business Telecommunications segment since
November 2001, and increased revenues in the Newspapers segment,
particularly from advertising sales. These factors, combined
with the positive effect of the conversion of sales denominated
in US dollars into Canadian currency, more than offset the 1%
decrease in Quebecor World's revenues, stated in US dollars, as
a result of the difficult market environment, and lower revenues
in the Web Integration/Technology segment.

Operating income amounted to $2.02 billion in 2002, compared
with $1.89 billion in 2001, a 7.0% increase. On a pro forma
basis, operating income was $2.02 billion in 2001. The increase
was mainly due to the reasons noted in the discussion of
revenues above, as well as lower newsprint prices and effective
cost containment measures. These factors outweighed the decrease
in the Printing segment's operating income due to reduced
production capacity utilization and increased price pressure.

Net income was $91.9 million in 2002, or $1.42 per basic share,
compared with a net loss of $248.7 million, or $3.85 per basic
share, in 2001. In accordance with new accounting rules, the
Company did not record any amortization of goodwill in 2002.

"In a still-difficult environment for the communications
industry, Quebecor has posted very satisfactory results in the
year just ended," commented Pierre Karl Peladeau, President and
Chief Executive Officer of Quebecor Inc. "The company reported
earnings in every quarter of 2002 and slashed its debt by more
than a billion dollars in 2002 and in the beginning of 2003. We
are particularly proud of Quebecor Media's strong performance.
It improved its results and reduced its debt load, in line with
the objectives management set at the beginning of the year. All
our subsidiaries contributed to enhancing the company's bottom
line, including Videotron, which generated cash flow and reduced
its debt ratio despite the labour dispute. Constantly increasing
the profitability of each of our operations and cutting debt
will remain our absolute priorities in 2003."

As a result of the financial operations carried out in 2002 and
the beginning of 2003, the Company has reduced its debt by more
than $1 billion, using its cash flow and proceeds from the sale
of Quebecor World shares. Quebecor World's debt has been reduced
by $530.9 million, Quebecor Media's debt by $429.7 million, and
Quebecor Inc.'s debt by $81.9 million.

On December 9, 2002, Quebecor closed a secondary offering of 6.8
million subordinate voting shares of Quebecor World Inc. at a
price of $36.00 per share for a total of $244.8 million,
realizing a gain on disposal of $67.4 million. The purpose was
to repay Quebecor's 54.7% share of a $429.0 million term loan
contracted by Quebecor Media, which falls due in April 2003.
Immediately after the end of the 2002 financial year, Quebecor
Inc. contributed $216.0 million to the share capital of Quebecor
Media, enabling Quebecor Media to reduce its debt by the same
amount. Quebecor will make an additional contribution of $19
million prior to the April 2003 due date.

On February 7, 2003, Sun Media Corporation closed a private
placement of Senior Notes in the principal amount of US$201.5
million and contracted new bank credit facilities totalling $425
million. The proceeds from the sale of Senior Notes and the new
bank credit facilities will be used to pay down in full all Sun
Media loans and to pay a $260 million dividend to Quebecor Media
Inc., of which $150 million will be used to reduce the long-term
debt of Videotron ltee. This payment on Videotron's debt will be
in addition to debt reductions totalling $168 million made by
Videotron in 2002. Following these financial operations,
Videotron will have repaid a total of $318 million, or nearly
25% of its long-term debt, in 2002 and the beginning of 2003,
giving it the best ratios in the industry in Canada.

Amortization charges increased by $82.9 million in 2002,
primarily as a result of the inclusion of the results of the
Cable Television, Broadcasting and Business Telecommunications
segments. Financial expenses were reduced by $41.3 million due
to lower interest rates, lower debt levels at the subsidiaries
and the unfavourable effect of the exchange rate on the portion
of the debt denominated in foreign currency in 2001. Reserves
for restructuring of operations and special charges totalled
$68.7 million in 2002 ($552.2 million in 2001). The Company
recorded a write-down of goodwill in the amount of $187.0
million ($99.0 million, net of non-controlling interest),
including $68.0 million for the Cable Television segment and
$107.6 million for the Business Telecommunications segment. In
2001, write-downs of goodwill resulted in a charge of $147.0
million. Quebecor realized a gain of $91.2 million on the sale
of businesses, shares of subsidiaries and portfolio investments
in 2002 ($44.7 million in 2001).

In the fourth quarter of 2002, Quebecor's revenues totalled
$3.24 billion, compared with $3.14 billion in the same quarter
of 2001, a 3.5% increase. Net income was $3.6 million, or $0.06
per basic share, compared with a net loss of $186.0 million, or
$2.88 per basic share, in the fourth quarter of 2001. It should
be noted that the 2001 loss included a goodwill amortization
charge of $32.7 million.

                        Printing

Quebecor World's revenues amounted to US$6.24 billion in 2002,
compared with US$6.32 billion in 2001. Its operating income was
US$898.4 million, compared with US$955.6 million in 2001.
Quebecor World reported net income of US$279.3 million in 2002,
compared with US$83.8 million in 2001, excluding amortization of
goodwill in the amount of US$61.4 million. Stated in Canadian
dollars, Quebecor World's revenues were virtually unchanged,
increasing from $9.79 billion in 2001 to $9.80 billion in 2002.
The strength of the US dollar, the main currency in which
Quebecor World's sales are denominated, therefore partially
offset the decrease in North American sales, stated in US
currency. Operating income was $1.41 billion, compared with
$1.48 billion in 2001. The industry was beset by excess
production capacity and downward price pressure during 2002.

In the fourth quarter of 2002, Quebecor World's revenues totaled
US$1.69 billion, a 5% increase. Operating income was US$246.2
million, an increase of 4.6% compared with the same period of
2001. Stated in Canadian dollars, Quebecor World's revenues in
the fourth quarter of 2002 amounted to $2.66 billion, a 4%
increase, and operating income was $386.4 million, also a 4%
increase.

Quebecor World signed a number of new contracts and extensions
of existing contracts in the last quarter of 2002. In November,
a long-term $240 million contract was signed with Rogers
Publishing, the largest publisher of periodicals in Canada. In
December, Quebecor World signed three major contracts: a US$230
million contract with publishing house Simon & Shuster, a
contract worth US$150 million with food retailer Albertsons, and
a $270 million contract to print telephone directories for the
Yellow Pages Group Co. In early 2003, the subsidiary signed a
long-term Latin American contract estimated at US$40 million
with Telefonica de Espana to print telephone directories in
Brazil, Chile, Argentina and Peru.

                        Cable Television

In 2002, Videotron reported revenues of $715.6 million and
operating income of $262.7 million. On a comparable basis, the
2001 figures were $709.6 million and $271.9 million
respectively. Revenues grew by $6.0 million, or 0.8%, in 2002.
Despite aggressive competition from satellite television
services and the problems caused by the labor conflict between
Videotron and its unionized employees, Videotron signed up
57,000 new customers to its illico digital television service in
2002 while losing 136,000 subscribers to its analog cable
television service, for a net loss of 79,000 customers. At the
same time, Videotron gained 77,000 new customers for its high-
speed cable Internet access service, which now serves 306,000
subscribers.

Operating income decreased by $9.2 million, or 3.4%, in 2002, on
a comparable basis. The impact on operating income of the net
loss of cable television customers, combined with the lower
profit margin, due primarily to the migration of customers from
analog to digital services, was fully offset by the contribution
from new customers for Internet access services, which generate
higher profit margins. At the same time, efficiencies of more
than $20.0 million yielded by the cost rationalization program
implemented since the acquisition by Quebecor Media and an $8.3
million refund of property tax paid on the network in previous
years, which was received in 2002, were not enough to offset
additional costs incurred during the financial year. These
included charges of $18.5 million related to the maintenance of
operations during the labor dispute, the impact of reduced
capitalization of certain operating expenses following the
completion of the network modernization program, and costs for
improving customer service.

In the last quarter of 2002, Videotron's revenues totaled $181.7
million, compared with $180.0 million in the same quarter of
2001. Operating income was $73.2 million, compared with $70.6
million in the fourth quarter of 2001, an increase of $2.6
million or 3.7%. The improvement resulted primarily from reduced
operating costs. Videotron's average monthly revenue per
subscriber increased 7.8% from $39.20 in the fourth quarter of
2001 to $41.85 in the fourth quarter of 2002.

                            Newspapers

The Newspapers segment's revenues amounted to $853.6 million in
2002, compared with $838.1 million in 2001, an increase of $15.5
million or 1.8%. Increases of 4.0% and 2.1% in advertising and
circulation revenues respectively were partially offset by
decreased printing revenues. Operating income grew to $222.3
million in 2002, an increase of $21.5 million or 10.7%. The
Newspapers segment's operating margin was 26.0% in 2002,
compared with 24.0% in 2001. The increase in operating income
derives primarily from lower newsprint prices, effective cost
containment measures introduced in 2001 and continued in 2002,
and higher revenues.

In the fourth quarter of 2002, the segment's revenues amounted
to $228.6 million, compared with $221.5 million in the same
quarter of 2001, an increase of $7.1 million or 3.2%.
Advertising and circulation revenues grew by 6.0% and 2.6%
respectively. Fourth quarter operating income declined by $2.2
million from $68.3 million in 2001 to $66.1 million in 2002.

                        Broadcasting

In 2002, TVA Group generated revenues of $323.4 million and
operating income of $78.9 million. In 2001, the figures were
$322.8 million and $69.5 million respectively, on a comparable
basis. Increased broadcasting and publishing revenues almost
entirely offset the decrease in production and international
distribution operations resulting from the reorganization
carried out in 2001. The growth in operating income in 2002
stemmed from the higher revenues, the increased profitability of
TVA's broadcasting operations as a result of lower operating
costs, among other things, and the addition of Publicor's
results to the Broadcasting segment's consolidated figures as of
May 2002. TVA Group's publishing segment therefore posted
revenues of $64.8 million, compared with $47.2 million in the
previous year, and its operating income was $16.7 million,
compared with $9.4 million in 2001.

The Broadcasting segment recorded revenues of $97.3 million in
the fourth quarter of 2002, compared with $88.2 million in 2001,
a 10.3% increase. It posted even stronger growth in operating
income, which rose by 30.1% to $30.8 million, compared with
$23.7 million in the same quarter of the previous year. The
increase in operating income was essentially caused by the
reasons noted in the discussion of the annual results.

The BBM ratings for fall 2002, released at the beginning of
2003, again confirmed TVA's dominant position among Quebec
general-interest television networks. The TVA network's 36%
market share in the Quebec market as a whole, up 1% from the
same period of the previous year, was, once again, greater than
that of its two main rivals, SRC (17%) and TQS (14%), combined.

                   Leisure and Entertainment

In 2002, the Leisure and Entertainment segment's revenues
totaled $244.5 million, compared with $260.1 million in the
previous year. The $15.6 million decrease resulted mainly from
the transfer of Publicor magazines from the Leisure and
Entertainment segment to the Broadcasting segment in a
transaction closed in May 2002. Operating income remained
virtually unchanged, increasing from $28.8 million to $29.0
million. The significant improvement in the profitability of
Archambault Group and the Books segment made up for the loss of
income resulting from the transfer of the magazines. It should
be noted that revenues and operating income for the previous
year included the results of St. Remy Media Inc., which was sold
at the end of 2001.

In the fourth quarter of 2002, the Leisure and Entertainment's
revenues were $76.9 million, a decrease of $2.5 million. Fourth
quarter operating income declined from $10.3 million in 2001 to
$9.7 million in 2002. The decreases resulted mainly from the
transfer of Publicor to the Broadcasting segment. In October
2002, Archambault opened its 11th superstore in the Complexe Les
Ailes shopping centre in downtown Montreal.

              Business Telecommunications

Videotron Telecom Ltd., reported revenues of $91.9 million in
2002, versus $96.7 million in 2001, on a comparable basis. The
decrease in revenues from point-to-point telecommunications and
the impact on revenues of the discontinuation of certain
operations in 2001 were not entirely offset by the contribution
of businesses acquired in 2002 and higher revenues from Internet
communications. Operating income amounted to $27.3 million in
2002, compared with $23.4 million in the previous year, an
increase of $3.9 million or 16,6%. The improvement in
profitability was mainly due to the considerable reduction in
labor costs and higher profit margins, which outweighed costs
caused by vandalism against VTL's network during the labour
dispute at Videotron.

In the last quarter of 2002, VTL's revenues were $24.6 million,
versus $22.3 million in the same quarter of 2001, on a
comparable basis. Fourth quarter operating income increased by
21.9% from 6.5 million in 2001 to $7.9 million in 2002,
essentially for the reasons noted above. In December, VTL
expanded its network's coverage by acquiring two fiber-optic
routes stretching a total of 1,200 km across southern Ontario
and to the US.

                   Web Integration/Technology

The Web Integration/Technology segment posted revenues of $79.8
million in 2002, compared with $129.1 million in 2001. A $34.9
million drop in the revenues of Mindready Solutions Inc. as a
result of slumping demand from telecoms accounted for the major
part of the decrease. Sales declined by $14.4 million at Nurun's
e-Business Services segment due to a decrease in business at all
offices and the discontinuation of some operations that no
longer fit into Nurun's long-term development plans. The
operating loss was $10.7 million, compared with $15.4 million in
2001. The lower operating loss in 2002 was mainly due to the
recording under operating expenses of special charges related to
the restructuring of operations in 2001, and lower operating
expenses and improved profit margins in 2002, which more than
made up for the decrease in revenues. Despite an exceedingly
difficult business environment for Web agencies around the
world, Nurun's e-Business Services segment generated operating
income in each of the last three quarters of 2002.

In the last quarter of 2002, the segment's revenues amounted to
$20.4 million, compared with $20.8 million in the same period of
2001. The operating loss was reduced substantially to $0.8
million, compared with $6.5 million in the last quarter of 2001.
Nurun's e-Business Services segment recorded operating income of
$0.9 million in the last quarter of 2002. In November 2002,
Nurun signed a contract worth nearly $3 million with the Quebec
Pension Plan to develop Web-based transactional services for the
major Quebec government agency.

                     Internet/Portals

The Internet/Portals segment's revenues were virtually unchanged
at $26.8 million in 2002, compared with $27.4 million in 2001.
The world-wide decline in revenues from advertising banners on
general-interest portals in 2002 was therefore offset by the
significant increase in revenues from the specialty sites
Jobboom.com, MatchContact.com and Autonet.ca. The operating loss
decreased from $21.5 million in 2001 to $2.6 million in 2002, an
$18.9 million improvement. The performance reflects the success
of the multi-stage restructuring process launched in 2001 and
continued during the 2002 financial year. Lower payroll and
advertising/promotion expenses, combined with increased revenues
from the specialty sites, contributed to the substantial
improvement. The Internet/Portals segment reached the breakeven
point, in terms of operating income, during the last two
quarters of 2002.

In the fourth quarter of 2002, revenues were $5.9 million,
compared with $7.4 million in the same period of 2001. The
segment posted operating income of $0.2 million, compared with a
$4.2 million loss in the last quarter of 2001.

                   Financial Position

Quebecor's consolidated long-term debt and consolidated bank
debt decreased by $826.5 million in 2002: Quebecor World's debt
was reduced by $530.9 million and Quebecor Media's debt by
$213.7 million, primarily at subsidiaries Videotron and Sun
Media Corporation, which posted reductions of $168.0 million and
$39.4 million respectively. The balance of Quebecor's debt was
reduced mainly by using the proceeds from the sale of TQS, which
closed in the first quarter of 2002.

In December 2002, Quebecor closed a secondary offering of 6.8
million subordinate voting shares of Quebecor World Inc. at a
price of $36.00 per share for a total of $244.8 million.
Immediately after the end of the 2002 financial year, Quebecor
Inc. contributed $216.0 million to the share capital of Quebecor
Media, enabling Quebecor Media to repay the same amount of a
$429.0 million term loan coming due in April 2003. Counting the
reduction in the term loan, Quebecor Media decreased its debt by
a total of nearly $430 million.

At December 31, 2002, the Company and its subsidiaries had cash,
cash equivalents and liquid investments with remaining
maturities greater than three months totaling $513.5 million,
consisting mainly of short-term investments. At the same date,
the consolidated debt, including the short-term portion of the
long-term debt, totaled $6.33 billion, not including a $979.9
million liability related to exchangeable debentures, which is
now shown as a separate line item on the Company's consolidated
balance sheet. Of the total long-term debt, $2.68 billion is
attributable to Quebecor World and $3.51 billion to Quebecor
Media. Quebecor Media's debt includes Sun Media Corporation's
$515.1 million debt, Videotron's $1.12 billion debt, and TVA
Group's $51.2 million debt, as well as Senior Notes in an
aggregate amount of $1.39 billion and a term loan of $429.0
million. The $139.4 million balance of the consolidated debt
consists of Quebecor Inc.'s debt, including advances under the
Company's authorized $201.0 million revolving credit facility.

Quebecor Inc.'s December 31, 2002 balance sheet shows that total
current liabilities exceeded total current assets by about $600
million.

                   Accounting Policies

In 2002, the Company made certain changes to its accounting
policies in order to conform to new Canadian Institute of
Chartered Accountants accounting standards. The Company
completed the goodwill impairment tests for each of its
operating units, in accordance with the new recommendations in
Section 3062 of the CICA Handbook, and entered a charge of $1.17
billion against opening retained earnings, net of non-
controlling interest of $0.99 billion, in order to account for
the estimated goodwill impairment loss in the Cable Television
segment ($1.93 billion), the Business Telecommunications segment
($165.0 million), the Web Integration/Technology segment ($20.4
million) and the Internet/Portals segment ($41.8 million).

Quebecor Inc., (TSX: QBR.A, QBR.B) is a communications company
with operations in North America, Europe, Latin America and
Asia. It has two operating subsidiaries, Quebecor World Inc. and
Quebecor Media Inc. Quebecor World is the largest commercial
printing company in the world. Quebecor Media owns operating
companies in numerous media-related businesses: Videotron ltee,
the largest cable operator in Quebec and a major Internet
Service Provider; Sun Media Corporation, Canada's second-largest
newspaper group; TVA Group Inc., the largest French-language
general-interest television network in Quebec; Netgraphe Inc.,
operator of the CANOE network of English- and French-language
Internet properties in Canada; Nurun Inc., a leading Web agency
in Canada and Europe. Quebecor Media is also engaged in book
publishing, in magazine publishing through TVA Publishing Inc.,
in distribution and retailing of cultural products through
Archambault Group, the largest chain of music stores in eastern
Canada, in video rentals and sales through the SuperClub
Videotron chain, and business telecommunications through
Videotron Telecom Ltd. In all, Quebecor Inc. has operations in
17 countries.


QUEBECOR MEDIA: Dec. 31 Working Capital Deficit Tops C$479 Mill.
----------------------------------------------------------------
Quebecor Media Inc., (TSX:QBR.A.TO) (TSX:QBR.B.TO) recorded
revenues of C$2.27 billion during the 2002 financial year,
compared with C$1.84 billion in 2001. (All succeeding monetary
figures are expressed in Canadian dollars unless specified
otherwise). The $433.5 million increase stems from the inclusion
of the results of the Cable Television segment and of TVA Group
following the transfer of control over those entities in 2001,
the inclusion of the Business Telecommunications segment in the
consolidated results since November 2001, and higher revenues in
the Newspapers segment, particularly from advertising sales.
These factors were partially offset by lower business volume in
the Web Integration/Technology segment. Operating income was
$604.9 million in 2002, compared with $408.9 million in 2001.
The $196.0 million increase was mainly due to the inclusion of
the results of the Cable Television, Broadcasting and Business
Telecommunications segments for the full 12 months of 2002,
combined with significantly improved operating results in the
Newspapers, Web Integration/Technology and Internet/Portals
segments. Lower newsprint prices and effective cost containment
measures introduced in 2001 and continued in 2002 contributed to
this improvement.

The Company recorded a net loss of $213.9 million in 2002,
compared with $444.2 million in 2001. In accordance with new
accounting rules, the Company did not record any amortization of
goodwill in 2002. Excluding goodwill amortization, net of non-
controlling interest, the net loss would have been $275.7
million in 2001.

Amortization charges increased by $81.2 million in 2002 to
$245.5 million. Financial expenses increased by $34.6 million
from $287.8 in 2001 to $322.4 million in 2002. The higher
amortization charges and financial expenses mainly reflect the
inclusion of the results of the Cable Television, Broadcasting
and Business Telecommunications segments. The impact on
financial expenses was partially offset, however, by lower
interest rates and reduced debt levels. Reserves for the
restructuring of operations and special charges totaled $39.3
million in 2002 ($152.1 million in 2001) and write-down of
goodwill amounted to $187.0 million, including $68.0 million for
the Cable Television segment and $107.6 million for the Business
Telecommunications segment. In 2001, the Company recorded a
$146.9 million charge for write-down of goodwill.

As a result of the financial operations carried out in 2002 and
the beginning of 2003, Quebecor Media has reduced its debt by a
total of nearly $430 million, or 12.2% of the debt entered on
its balance sheet at December 31, 2002, using its cash flow and
an injection of capital by its parent company.

Specifically, immediately after the end of the 2002 financial
year, Quebecor Inc. contributed $216.0 million to the share
capital of Quebecor Media, enabling Quebecor Media to repay the
same amount of a $429.0 million term loan coming due in April
2003. Quebecor will make an additional contribution of $19
million prior to the April 2003 due date.

On February 7, 2003, Sun Media Corporation closed a private
placement of Senior Notes in the principal amount of US$201.5
million and contracted new bank credit facilities totaling $425
million. The proceeds from the sale of Senior Notes and the new
bank credit facilities will be used to pay down in full all Sun
Media loans and to pay a $260 million dividend to Quebecor Media
Inc., of which $150 million will be used to reduce the long-term
debt of Videotron ltee. This payment on Videotron's debt will be
in addition to debt reductions totaling $168 million made by
Videotron in 2002. Following these financial operations,
Videotron will have repaid a total of $318 million, or nearly
25% of its long-term debt, in 2002 and the beginning of 2003,
giving it the best ratios in the industry in Canada.

In the fourth quarter of 2002, Quebecor Media generated revenues
of $621.9 million, compared with $599.4 million in the same
period of 2001. The increase was due to the inclusion of the
Business Telecommunications segment in the consolidated results
and higher revenues in the Broadcasting and Newspapers segments.
Operating income rose by $19.1 million, or 11.5%, to $185.2
million. The performance was due to significantly improved
results in the Broadcasting, Web Integration/Technology,
Internet/Portals and Cable Television segments, and the
consolidation of the Business Telecommunications segment. The
Company posted a net loss of $173.5 million in the fourth
quarter of 2002, compared with $163.9 million in the same
quarter of 2001. Not counting amortization of goodwill, net of
non-controlling interest, the net loss would have been $120.4
million in the fourth quarter of 2001.

                        Cable Television

In 2002, Videotron reported revenues of $715.6 million and
operating income of $262.7 million. On a comparable basis, the
2001 figures were $709.6 million and $271.9 million
respectively. Revenues grew by $6.0 million, or 0.8%, in 2002.
Despite aggressive competition from satellite television
services and the problems caused by the labor conflict between
Videotron and its unionized employees, Videotron signed up
57,000 new customers to its illico digital television service in
2002 while losing 136,000 subscribers to its analog cable
television service, for a net loss of 79,000 customers. At the
same time, Videotron gained 77,000 new customers for its high-
speed cable Internet access service, which now serves 306,000
subscribers.

Operating income decreased by $9.2 million, or 3.4%, in 2002, on
a comparable basis. The impact on operating income of the net
loss of cable television customers, combined with the lower
profit margin, due primarily to the migration of customers from
analog to digital services, was fully offset by the contribution
from new customers for Internet access services, which generate
higher profit margins. At the same time, efficiencies of more
than $20.0 million yielded by the cost rationalization program
implemented since the acquisition by Quebecor Media and an $8.3
million refund of property tax paid on the network in previous
years, which was received in 2002, were not enough to offset
additional costs incurred during the financial year. These
included charges of $18.5 million related to the maintenance of
operations during the labor dispute, the impact of reduced
capitalization of certain operating expenses following the
completion of the network modernization program, and costs for
improving customer service.

In the last quarter of 2002, Videotron's revenues totalled
$181.7 million, compared with $180.0 million in the same quarter
of 2001. Operating income was $73.2 million, compared with $70.6
million in the fourth quarter of 2001, an increase of $2.6
million or 3.7%. The improvement resulted primarily from reduced
operating costs. Videotron's average monthly revenue per
subscriber increased 7.8% from $39.20 in the fourth quarter of
2001 to $41.85 in the fourth quarter of 2002.

                        Newspapers

The Newspapers segment's revenues amounted to $853.6 million in
2002, compared with $838.1 million in 2001, an increase of $15.5
million or 1.8%. Increases of 4.0% and 2.1% in advertising and
circulation revenues respectively were partially offset by
decreased printing revenues. Operating income grew to $222.3
million in 2002, an increase of $21.5 million or 10.7%. The
Newspapers segment's operating margin was 26.0% in 2002,
compared with 24.0% in 2001. The increase in operating income
derives primarily from lower newsprint prices, effective cost
containment measures introduced in 2001 and continued in 2002,
and higher revenues.

In the fourth quarter of 2002, the segment's revenues amounted
to $228.6 million, compared with $221.5 million in the same
quarter of 2001, an increase of $7.1 million or 3.2%.
Advertising and circulation revenues grew by 6.0% and 2.6%
respectively. Fourth quarter operating income declined by $2.2
million from $68.3 million in 2001 to $66.1 million in 2002.

                        Broadcasting

In 2002, TVA Group generated revenues of $323.4 million and
operating income of $78.9 million. In 2001, the figures were
$322.8 million and $69.5 million respectively, on a comparable
basis. Increased broadcasting and publishing revenues almost
entirely offset the decrease in production and international
distribution operations resulting from the reorganization
carried out in 2001. The growth in operating income in 2002
stemmed from the higher revenues, the increased profitability of
TVA's broadcasting operations as a result of lower operating
costs, among other things, and the addition of Publicor's
results to the Broadcasting segment's consolidated figures as of
May 2002. TVA Group's publishing segment therefore posted
revenues of $64.8 million, compared with $47.2 million in the
previous year, and its operating income was $16.7 million,
compared with $9.4 million in 2001.

The Broadcasting segment recorded revenues of $97.3 million in
the fourth quarter of 2002, compared with $88.2 million in 2001,
a 10.3% increase. It posted even stronger growth in operating
income, which rose by 30.1% to $30.8 million, compared with
$23.7 million in the same quarter of the previous year. The
increase in operating income was essentially caused by the
reasons noted in the discussion of the annual results.

The BBM ratings for fall 2002, released at the beginning of
2003, again confirmed TVA's dominant position among Quebec
general-interest television networks. The TVA network's 36%
market share in the Quebec market as a whole, up 1% from the
same period of the previous year, was, once again, greater than
that of its two main rivals, SRC (17%) and TQS (14%), combined.
Leisure and Entertainment

In 2002, the Leisure and Entertainment segment's revenues
totaled $244.5 million, compared with $260.1 million in the
previous year. The $15.6 million decrease resulted mainly from
the transfer of Publicor magazines from the Leisure and
Entertainment segment to the Broadcasting segment in a
transaction closed in May 2002. Operating income remained
virtually unchanged, increasing from $28.8 million to $29.0
million. The significant improvement in the profitability of
Archambault Group and the Books segment made up for the loss of
income resulting from the transfer of the magazines. It should
be noted that revenues and operating income for the previous
year included the results of St. Remy Media Inc., which was sold
at the end of 2001.

In the fourth quarter of 2002, the Leisure and Entertainment's
revenues were $76.9 million, a decrease of $2.5 million. Fourth
quarter operating income declined from $10.3 million in 2001 to
$9.7 million in 2002. The decreases resulted mainly from the
transfer of Publicor to the Broadcasting segment. In October
2002, Archambault opened its 11th superstore in the Complexe Les
Ailes shopping centre in downtown Montreal.

                Business Telecommunications

Videotron Telecom Ltd., reported revenues of $91.9 million in
2002, versus $96.7 million in 2001, on a comparable basis. The
decrease in revenues from point-to-point telecommunications and
the impact on revenues of the discontinuation of certain
operations in 2001 were not entirely offset by the contribution
of businesses acquired in 2002 and higher revenues from Internet
communications. Operating income amounted to $27.3 million in
2002, compared with $23.4 million in the previous year, an
increase of $3.9 million or 16,6%. The improvement in
profitability was mainly due to the considerable reduction in
labour costs and higher profit margins, which outweighed costs
caused by vandalism against VTL's network during the labour
dispute at Videotron.

In the last quarter of 2002, VTL's revenues were $24.7 million,
versus $22.3 million in the same quarter of 2001, on a
comparable basis. Fourth quarter operating income increased by
21.9% from 6.5 million in 2001 to $7.9 million in 2002,
essentially for the reasons noted above. In December, VTL
expanded its network's coverage by acquiring two fiber-optic
routes stretching a total of 1,200 km across southern Ontario
and to the US.

                   Web Integration/Technology

The Web Integration/Technology segment posted revenues of $79.8
million in 2002, compared with $129.1 million in 2001. A $34.9
million drop in the revenues of Mindready Solutions Inc. as a
result of slumping demand from telecoms accounted for the major
part of the decrease. Sales declined by $14.4 million at Nurun's
e-Business Services segment due to a decrease in business at all
offices and the discontinuation of some operations that no
longer fit into Nurun's long-term development plans. The
operating loss was $10.7 million, compared with $15.4 million in
2001. The lower operating loss in 2002 was mainly due to the
recording under operating expenses of special charges related to
the restructuring of operations in 2001, and lower operating
expenses and improved profit margins in 2002, which more than
made up for the decrease in revenues. Despite an exceedingly
difficult business environment for Web agencies around the
world, Nurun's e-Business Services segment generated operating
income in each of the last three quarters of 2002.

In the last quarter of 2002, the segment's revenues amounted to
$20.4 million, compared with $20.8 million in the same period of
2001. The operating loss was reduced substantially to $0.8
million, compared with $6.5 million in the last quarter of 2001.
Nurun's e-Business Services segment recorded operating income of
$0.9 million in the last quarter of 2002. In November 2002,
Nurun signed a contract worth nearly $3 million with the Quebec
Pension Plan to develop Web-based transactional services for the
major Quebec government agency.

                       Internet/Portals

The Internet/Portals segment's revenues were virtually unchanged
at $26.8 million in 2002, compared with $27.4 million in 2001.
The world-wide decline in revenues from advertising banners on
general-interest portals in 2002 was therefore offset by the
significant increase in revenues from the specialty sites
Jobboom.com, MatchContact.com and Autonet.ca. The operating loss
decreased from $21.5 million in 2001 to $2.6 million in 2002, an
$18.9 million improvement. The performance reflects the success
of the multi-stage restructuring process launched in 2001 and
continued during the 2002 financial year. Lower payroll and
advertising/promotion expenses, combined with increased revenues
from the specialty sites, contributed to the substantial
improvement. The Internet/Portals segment reached the breakeven
point, in terms of operating income, during the last two
quarters of 2002.

In the fourth quarter of 2002, revenues were $5.9 million,
compared with $7.4 million in the same period of 2001. The
segment posted operating income of $0.2 million, compared with a
$4.2 million loss in the last quarter of 2001.

                      Financial position

In 2002, Quebecor Media's long-term consolidated debt and bank
debt decreased by $213.7 million. Subsidiaries Videotron and Sun
Media Corporation accounted for most of the decrease, with
reductions of $168.0 million and $39.4 million respectively.
Immediately after the end of the 2002 financial year, Quebecor
Inc. contributed $216.0 million to the share capital of Quebecor
Media, enabling Quebecor Media to repay the same amount of a
$429.0 million term loan coming due in April 2003. Counting the
reduction in the term loan, Quebecor Media decreased its debt by
a total of nearly $430 million.

At December 31, 2002, the Company and its subsidiaries had cash,
cash equivalents and liquid investments with remaining
maturities greater than three months totalling $275.7 million,
consisting mainly of short-term investments. The Company and its
subsidiaries also had unused lines of credit of $275.0 million
available, for total available liquid assets of $550.7 million.
At the same date, the consolidated debt, including the short-
term portion of the long-term debt, totalled $3.51 billion,
including Sun Media Corporation's $515.1 million debt, Videotron
ltee's $1.12 billion debt, TVA Group's $51.2 million debt,
Senior Notes in an aggregate amount of $1.39 billion and a term
loan of $429.0 million.

At December 31, 2002, Quebecor Media's balance sheet shows a
working capital deficit of about C$479 million.

                   Accounting policies

In 2002, the Company made certain changes to its accounting
policies in order to conform to new Canadian Institute of
Chartered Accountants accounting standards. The Company
completed the goodwill impairment tests for each of its
operating units, in accordance with the new recommendations in
Section 3062 of the CICA Handbook, and charged $2.14 billion to
opening retained earnings, net of non-controlling interest of
$18.8 million, in order to account for the goodwill impairment
loss in the Cable Television segment ($1.93 billion), the
Business Telecommunications segment ($165.0 million), the Web
Integration/Technology segment ($20.4 million) and the
Internet/Portals segment ($41.8 million).

As reported in Troubled Company Reporter's Thursday Edition,
Standard & Poor's removed its ratings on diversified media
company, Quebecor Media Inc., from CreditWatch with negative
implications, where they were placed on Sept. 16, 2002,
following the completion of Sun Media's refinancing that
was carried out largely as expected. In addition, outstanding
ratings on Quebecor Media, including the 'B+' long-term
corporate credit rating, along with all ratings on subsidiaries
Sun Media Corp., and Videotron Ltee, were affirmed. The outlook
is stable.

"The ratings affirmations reflect improved financial flexibility
at Sun Media and Quebecor Media, due to the easing of covenant
restrictions on free cash flows and a light amortization
schedule following the refinancing," said Standard & Poor's
credit analyst Barbara Komjathy.


RE-CON: Receives Certificate of Full Performance from Trustee
-------------------------------------------------------------
Re-Con Building Products Inc. received a "Certificate of Full
Performance" from the Trustee for the Company's creditors
certifying that the proposal to its creditors, as filed with the
official receiver on the 6th day of February, 1998, accepted on
February 24, 1998 and further amended on December 8, 1999, has
been fully performed as of the 23rd day of January, 2003.

"We are very pleased that this has been accomplished and is now
behind us" stated P. Louis Clarke, President of the Company. "We
would also like to thank all of the unsecured creditors and our
many customers who supported us throughout this process."

Re-Con Building Products Inc. is an Abbotsford, B.C. based
company which manufactures fiber cement roofing products for the
North American residential housing market.


ROWECOM: Taps Kurtzman Carson as Notice and Claims Agent
--------------------------------------------------------
RoweCom, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Massachusetts' for permission to hire Kurtzman
Carson Consultants LLC as the official Notice, Claims and
Balloting Agent in its chapter 11 cases.

The Debtors relate that ten thousands of their creditors and
parties-in-interest are involved in these cases and may impose
heavy administrative burdens on the Office of the Clerk of the
Court.  To relieve the Clerk's Office of such burden, the
Debtors engage Kurtzman Carson to take charge on the noticing,
claims and balloting matters in these chapter 11 cases.

Specifically, Kurtzman Carson will:

     (a) Prepare and serve required notices in these chapter 11
         cases, including:

            i. Notice of the commencement of these chapter 11
               cases and the initial meeting of creditors under
               Section 341(a) of the Bankruptcy Code;

           ii. Notice of the claims bar date;

          iii. Notice of objections to claims;

           iv. Notice of any hearings on a disclosure statement
               and confirmation of a plan of reorganization; and

            v. Other miscellaneous notices to any entities, as
               the Debtors or the Court may deem necessary or
               appropriate for an orderly administration of
               these chapter 11 cases;

     (b) After the mailing of a particular notice, prepare for
         filing with the Clerk's Office a certificate or
         affidavit of service that includes a copy of the notice
         involved, an alphabetical list of persons to whom the
         notice was mailed and the date and manner of mailing;

     (c) Maintain copies of all proofs of claim and proofs of
         interest filed;

     (d) Maintain official claims registers, including these
         information for each proof of claim or proof of
         interest:

            i. the applicable Debtor;

           ii. the name and address of the claimant and any
               agent thereof, if the proof of claim or proof of
               interest was filed by an agent;

          iii. the date received;

           iv. the claim number assigned; and v. the asserted
               amount and classification of the claim;

     (e) Implement necessary security measures to ensure the
         completeness and integrity of the claims registers;

     (f) Transmit to the Clerk's Office a copy of the claims
         registers on a weekly basis, unless requested by the
         Clerk's Office on a more or less frequent basis;

     (g) Maintain an up-to-date mailing list for all entities
         that have filed a proof of claim or proof of interest,
         which list shall be available upon request of a party
         in interest or the Clerk's Office;

     (h) Provide access to the public for examination of copies
         of the proofs of claim or interest without charge
         during regular business hours;

     (i) record all transfers of claims pursuant to Bankruptcy
         Rule 3001(e) and provide notice of such transfers as
         required by Bankruptcy Rule 3001(e);

     (j) comply with applicable federal, state, municipal, and
         local statutes, ordinances, rules, regulations, orders
         and other requirements;

     (k) provide temporary employees to process claims, as
         necessary;

     (l) promptly comply with such further conditions and
         requirements as the Clerk's Office or the Court may at
         any time prescribe; and

     (m) provide computerized balloting database services, print
         and serve solicitation materials on parties entitled to
         vote on any plan of reorganization, and provide
         assistance in connection with ballot tabulation and
         certification.

Kurtzman Carson' consulting fees range from:

     Clerical                            $ 40 to $ 65 per hour
     Bankruptcy Consultant               $125 to $200 per hour
     Senior Bankruptcy Consultant        $220 to $275 per hour
     Technology/Programming Consultant   $125 to $195 per hour

Rowecom, Inc., offers content sources and innovative
technologies and provides information specialists, particularly
in the library, with complete solutions serving all their
information needs, in print or electronic format. The Company,
together with six of its affiliates, filed for chapter 11
protection on January 27, 2003 in the U.S. Bankruptcy Court for
the District of Massachusetts Eastern Division (Bankr. Mass.
Case No. 03-10668).  Stephen E. Garcia, Esq., Mindy D. Cohn,
Esq., at Kaye Scholer LLC and Jeffrey D. Sternklar, Esq.,
Jennifer L. Hertz, Esq., at Duane Morris, LLP, represent the
Debtors in their restructuring efforts.  When the Company filed
for protection from its creditors, it listed estimated assets
and debts of over $50 million each.


RURAL/METRO CORP: Balance Sheet Insolvency Stands at $160 Mill.
---------------------------------------------------------------
Rural/Metro Corporation (Nasdaq:RURL), a leading national
provider of medical transportation and fire protection services,
reported results for its fiscal 2003 second quarter, highlighted
by gains in net revenue and same-service-area growth.

For the quarter that ended December 31, 2002, the company
reported an 8-percent increase in net revenue to $123.5 million,
compared to $114.3 million for the same period of the prior
year. The company continued to experience the benefit of its
same-service-area growth strategies, marking an 8 percent
increase in revenue from ongoing operations over the same period
a year ago.

The company reported $148,000 in net income for the quarter
ended December 31, 2002. This compares to net income of $3.2
million for the three months ended December 31, 2001. The change
in net income is due to increased operating income of $2.2
million offset by an increase in interest expense of $1.8
million, an increase in income tax provision of $1.7 million,
and a decrease in income from discontinued operations of $1.7
million. The increase in interest expense is due to the
renegotiation of the company's credit facility effective
September 30, 2002. The increase in the income tax provision is
related to a $1.6 million refund received during the same period
of the prior year, which was recorded as an income tax benefit.
Effective September 27, 2002, the company disposed of its Latin
American operations, which represented $1.7 million of net
income for the three months ended December 31, 2001.

For the six months ended December 31, 2002, the company reported
an 8-percent increase in net revenue of $249.0 million, compared
to $230.8 million for the six months ended December 31, 2001.

For the six months ended December 31, 2002, the company reported
net income of $16.3 million, or fully diluted earnings per share
before the accretion of preferred stock of $0.91 cents. This
compares to a net loss for the same period of the prior year of
$47.5 million, or a loss of $3.13 per fully diluted share. The
change in net income is due to increased operating income of
$6.1 million offset by an increase in interest expense of
$900,000, and an increase in the income tax provision of $1.7
million. The six months ended December 31, 2002 included a $12.5
million gain related to the disposition of the company's Latin
American operations. The six months ended December 31, 2001
included a charge of $49.5 million relating to the cumulative
effect of a change in accounting principle. The increase in
interest expense for the six months is due to the renegotiation
of the company's credit facility effective September 30, 2002.
The increase in the income tax provision is related to a $1.6
million refund received during the same period of the prior
year, which was recorded as an income-tax benefit.

For the three months ended December 31, 2002, the company
generated $11.0 million in earnings from continuing operations
before interest, taxes, depreciation and amortization (adjusted
EBITDA), representing a margin of 9 percent on net revenue,
compared to $9.4 million of adjusted EBITDA for the three months
ended December 31, 2001, or a margin of 8 percent. For the
current six-month period, the company generated $24.2 million in
adjusted EBITDA, compared to $19.3 million for the same period
of the prior year, which represents a 25-percent increase in
adjusted EBITDA year over year. The company has provided a
reconciliation of net income to adjusted EBITDA in an attached
table.

Jack Brucker, President and Chief Executive Officer, said, "We
are very encouraged by the continuing strides we make to expand
our business in current service areas while we carefully explore
new market opportunities. We believe our percentage of same-
service-area growth provides a solid indicator for consistent
growth potential and gains in market share."

Cash collected from medical transports tracked favorably during
the quarter. At the close of the second quarter ended
December 31, 2002, cash collected in excess of net/net revenue
was $3.0 million. Additionally, average days' sales outstanding
(DSO) for the same period held steady at 71 days when compared
to the prior quarter.

The Company's December 31, 2002 balance sheet shows a total
shareholders' equity deficit of about $160 million.

Brucker continued, "Collectively, these metrics demonstrate
continued progress in our billing and collections efforts and
support the long-term effectiveness of our strategies to
maximize and expedite reimbursement for the services we
provide."

Business activities during the quarter included the award of a
new contract to provide exclusive emergency medical
transportation services to Loudon County, Tennessee; renewal of
a long-standing contract to provide 911 ambulance services to
the City of Chandler, Arizona; and a renewal contract for
firefighting services at Sikorsky Aircraft Corporation's
helicopter testing facility in West Palm Beach, Florida.

During the second quarter, the company also entered into new or
expanded medical transportation contracts with a variety of
facilities in established Rural/Metro service areas,
representing combined additional net revenue of approximately
$2.8 million annually.

Brucker continued, "We are now halfway through fiscal 2003, and
we believe we are on the right track to maintain the revenue and
growth momentum necessary to achieve our plan and enhance long-
term value to our stakeholders."

The company reaffirmed that its fiscal 2002 annual stockholders'
meeting will be held at 10 a.m. on March 12, 2003, during which
stockholders will vote to re-elect two members to the Board of
Directors. Previously, the company had anticipated it would
present a proposal to increase authorized common shares in order
to complete the conversion of preferred stock granted last year
to the company's banks to common shares. Because the company's
former independent auditor, Arthur Andersen L.L.P, is no longer
available to provide its consent, the company will undergo a re-
audit of its 2001 financial statements reflecting the
presentation of its former Latin American operations as
discontinued operations. This process will be completed prior to
a stockholder vote on the proposal. To avoid a further delay of
the upcoming annual meeting, the company will present the
proposal following fiscal 2003.

Rural/Metro Corporation provides emergency and non-emergency
medical transportation, fire protection, and other safety
services in 26 states and more than 400 communities throughout
the United States.

Rural/Metro Corp.'s 7.875% bonds due 2008 (RURL08USR1) are
trading at about 68 cents-on-the-dollar, DebtTraders says. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=RURL08USR1
for real-time bond pricing.


SALON MEDIA: Issues Convertible Promissory Notes to John Warnock
----------------------------------------------------------------
On January 26, 2003, Salon Media Group, Inc., sold and issued a
convertible promissory note and warrants in a financing
transaction in which it raised gross proceeds of approximately
$100,000. The Note and Warrant Purchase Agreement was entered
into between the Company and the investor John Warnock. The Note
may be convertible at a future date into equity securities of
the Company at a conversion price to be determined. The Warrants
grant the holders thereof the right to purchase an aggregate of
approximately 150,000 shares of the Company's common stock at an
exercise price of $0.0575 per share. The Company will use the
capital raised for working capital and other general corporate
purposes.

The Note automatically converts upon the closing of the
Company's first sale of its preferred or common stock following
February 11, 2003, with aggregate gross proceeds to the Company
of at least $2,000,000 (including the conversion of the
outstanding principal of all Notes and other converted
indebtedness of the Company), and, if no Subsequent Financing
shall have occurred by the close of business on September 30,
2003, then the Note shall automatically convert into shares of
the Company's common stock. In the event of an automatic
conversion of the Note upon a Subsequent Financing, the number
of shares of preferred or common stock to be issued upon
conversion of this and other notes shall equal the aggregate
amount of the Note obligation divided by the price per share of
the securities issued and sold in the Subsequent Financing. In
the event of an automatic Note conversion into common stock
absent a Subsequent Financing, the number of shares of the
common stock to be issued upon conversion of Notes shall equal
the aggregate amount of the Note obligations divided by the
average closing price of the Company's common stock over the
sixty (60) trading days ending on September 30, 2003, as
reported on such market(s) and/or exchange(s) where the common
stock has traded during such sixty trading days.

In connection with the Financing, the Company granted the
Investors a security interest in the Company's assets, subject
to the rights of any Senior Indebtedness (as such term is
defined in the Agreement) and pre-existing rights.

Neither the Note, Warrants, nor the shares of common stock
underlying the Warrants have been registered for sale under the
Securities Act of 1933, as amended, and may not be offered or
sold in the United States absent registration under such act or
an applicable exemption from registration requirements.

                         *   *  *

Salon Media Group's September 30, 2002 balance sheet shows that
total current liabilities eclipsed total current assets by about
$2.2 million.

In its SEC Form 10-Q filed on November 13, 2002, the Company
reported:

"As of September 30, 2002, Salon had approximately $0.3 million
in available cash remaining from the issuance of convertible
redeemable notes issued in July 2002. Salon also had $0.5
million of restricted cash held primarily as deposits for
various lease arrangements.

"Net cash used in operations was $1.9 million for the six months
ended September 30, 2002, compared to $3.3 million for the six
months ended September 30, 2001. The principal use of cash
during the six months ended September 30, 2002 was to fund the
$3.1 million net loss for the period and a $0.1 million decrease
in liabilities, offset partly by non-cash charges of $1.1
million. The principal use of cash during the six months ended
September 30, 2001 was to fund the $5.3 million net loss for the
period and a $0.6 million decrease in liabilities, offset partly
by non-cash charges of $2.2 million.

"No cash was used in investing activities for the six months
ended September 30, 2002, compared to an immaterial amount for
the six months ended September 30, 2001. Salon does not expect
any significant capital expenditures during the current fiscal
year.

"Net cash provided from financing activities was $0.6 million
for the six months ended September 30, 2002, compared to $3.1
million for the six months ended September 30, 2001. The
principal source of funds for the six months ended September 30,
2002 was $0.7 million from the issuance of convertible
redeemable notes, offset by $0.1 million of lease payments. The
principal source of funds for the six months ended September 30,
2001 was $3.2 million from the issuance of Series A convertible
preferred stock, offset by $0.1 million of lease payments.

"As of September 30, 2002, Salon's available cash resources were
sufficient to meet working capital needs for approximately one
month. Subsequent to September 30, 2002, Salon received gross
proceeds of $0.2 million from the issuance of an unsecured
promissory note to a member of Salon's Board of Directors. Salon
believes with this cash, together with collections of accounts
receivable, that it will be able to fund working capital needs
through November 2002. Copies of the relevant documents relating
to the issuance of the unsecured promissory note were filed with
the Securities and Exchange Commission on October 15, 2002.

"In October 2002, Salon entered into an Accounts Receivable
Purchase Agreement with a bank. Under the terms of the
agreement, the bank can purchase acceptable receivables from
Salon for which Salon can receive 60% or 80% of the face value
of the receivables, depending on the nature of the receivable.
The aggregate purchase receivables outstanding under the
agreement cannot exceed $1.0 million, however the amount is
capped at $0.3 million until such time that Salon has $2.5
million of unrestricted cash. Salon has not received any funds
under this agreement as of this filing and estimates that it may
be able to receive approximately $70,000 during the month of
November 2002.

"Salon's independent accountants have included a paragraph in
their report for the fiscal years ending March 31, 2002 and 2001
indicating that substantial doubt exists as to Salon's ability
to continue as a going concern because it has recurring
operating losses and negative cash flows, and an accumulated
deficit. Salon has eliminated various positions, not filled
positions opened by attrition, implemented a wage reduction of
15% effective April 1, 2001, and has cut discretionary spending
to minimal amounts, and predicts it may reach cash-flow break
even for its quarter ending September 30, 2003.

"Salon needs to raise additional funds and is currently in the
process of exploring financing options. If it is unable to
complete the financial transactions it is pursuing or if it is
unable to otherwise fund its liquidity needs, then it may not be
able to continue as a going concern. Liquidity continues to be a
constraint on business operations, including Salon's ability to
react to competitive pressures or to take advantage of
unanticipated opportunities. If Salon raises additional funds by
selling equity securities, or instruments that convert into
equity securities, the percentage ownership of Salon's current
stockholders will be reduced and its stockholders will most
likely experience additional dilution. Given Salon's recent low
stock price, any dilution will likely be very substantial for
existing stockholders."


SATCON TECH: Seeking Prompt Capital Infusion to Fund Operations
---------------------------------------------------------------
SatCon Technology was organized as a Massachusetts corporation
in 1985 and reincorporated as a Delaware corporation in 1992. It
is developing enabling technologies for the emerging critical
power marketplace where power quality and uninterruptible power
are important. The Company designs, develops and manufactures
high-efficiency high power electronics and a variety of standard
and custom high-performance machines for specific applications.
Its critical power products convert, store and manage
electricity for businesses and consumers, the U.S. Government
and the military that require high-reliability electronics and
controls and high-quality, uninterruptible power. It is
utilizing its engineering and manufacturing expertise to develop
products it believes will be integral components of distributed
power generation and power quality systems. Its specialty motors
are typically designed and manufactured for unique customer
requirements such as high power-to-size requirements or high
efficiency.

Product revenue decreased by $0.8 million, or 13%, from $6.1
million in fiscal year 2002 to $5.3 million in fiscal year 2003.
The decrease was attributable to $0.6 million of decreased
revenue from Power Systems and $0.2 million of decreased revenue
from Electronics. The decline of $0.6million in Power Systems
was due to lower sales in Satcon's Test Measurement, Magnetics
and Motors and Service and Parts product lines. These adverse
variances were offset in part by an increase in revenue from its
Power Conversion product line. The decrease in Electronics
revenue was due in part to the continued weakness of the telecom
and semiconductor industries.

The Company says it needs an immediate infusion of capital to
sustain its operations and it is endeavoring to raise capital
through a debt and equity financing transaction. However there
can be no assurance that it will be able to raise the required
capital. It is currently in default under its Loan and Security
Agreement, dated September 13, 2002, with Silicon Valley Bank
due to its failure to obtain additional capital and to maintain
adjusted tangible net worth, as defined. The Company entered
into a forbearance agreement with the Bank on December 19, 2002
which was extended until January 25, 2003 at which time it
expired. If the Bank decides not to fund Satcon's operations,
which it has the right to do, or if Satcon is unable to raise
additional capital in the immediate near term, it will be forced
to furlough or permanently lay off a significant portion of its
work force which will have a material adverse impact on Satcon
including its financial position and the results from
operations. Under these circumstances, the Company may not be
able to continue its operations. Further, without additional
cash resources, it may not be able to keep all or significant
portions of its operations going for a sufficient period of time
to enable it to sell all or portions of its assets or operations
at their market values.

Satcon has incurred significant costs to develop its
technologies and products. These costs have exceeded total
revenue. As a result, it has incurred losses in each of the past
five years and for the three months ended December 28, 2002. As
of December 28, 2002, it had an accumulated deficit of $90.5
million. During the three months ended December 28, 2002, it
incurred a loss of $5.3 million and a reduction in its cash, net
of borrowings, from $2.1 million to $0.2 million.

                        *   *   *

SatCon Technology Corporation(R) (Nasdaq: SATC) reported that
Silicon Valley Bank has granted an extension of its forbearance
agreement until January 25, 2003.

SatCon Technology Corporation manufactures and sells power and
energy management products for digital power markets. SatCon has
three business units: SatCon Power Systems manufactures and
sells power systems for distributed power generation, power
quality and factory automation, including inverter electronics
from 5 kilowatts to 5 megawatts. SatCon Electronics manufactures
and sells power chip components; power switches; RF devices;
amplifiers; telecommunications electronics; and hybrid
microcircuits for industrial, medical, military and aerospace
applications. SatCon Applied Technology develops advanced
technology in digital power electronics, high-efficiency
machines and control systems for a variety of defense
applications with the strategy of transitioning those
technologies into multiyear production programs. For further
information, please visit the SatCon Web site at
http://www.satcon.com


SMTC CORP: Continuing Initiatives to Improve Balance Sheet
----------------------------------------------------------
SMTC Corporation (Nasdaq: SMTX), (TSX: SMX), a global provider
of electronics manufacturing services to the technology
industry, reported fourth quarter revenue of $116 million,
compared to $153 million for the previous quarter and $126
million for the same quarter last year. The Company announced in
the second quarter of 2002 its intention to terminate its supply
agreement with Dell, which was substantially complete during the
third quarter of 2002. Excluding revenue from Dell during the
third and fourth quarters of 2002, fourth quarter revenue
declined 5% from the previous quarter.

The net loss on a GAAP basis for the fourth quarter of 2002 of
$24.5 million, or $0.85 per share, includes restructuring
charges of $24.2 million ($0.2 million included in cost of
sales) and other charges of $1.2 million ($1.0 million included
in selling, general and administrative expenses and $0.2 million
included in amortization expense). The net loss on a GAAP basis
for the previous quarter of $13.4 million, or $0.47 per share,
includes restructuring charges of $12.8 million ($6.3 million
included in cost of sales) and other charges of $0.9 million
(included in cost of sales). The net loss on a GAAP basis for
the fourth quarter of 2001 of $36.7 million or $1.28 per share,
includes the loss from discontinued operations of $0.8 million,
restructuring charges of $20.7 million ($2.3 million included in
cost of sales), other charges of $6.4 million ($5.7 million
included in cost of sales and $0.7 million included in selling,
general and administrative expenses) and goodwill amortization
of $2.1 million.

The Company calculates adjusted net earnings (loss) as net
earnings (loss) before discontinued operations, amortization of
goodwill, restructuring and other charges and the related income
tax effect. Adjusted net earnings(1) for the fourth quarter of
2002 are $1.0 million or $0.03 per share compared to adjusted
net earnings(1) of $0.3 million or $0.01 per share for the
previous quarter and an adjusted net loss(1) of $4.8 million or
$0.17 per share for the same period last year. The financial
results continue to demonstrate a return to profitability as
reported in both the third and fourth quarters of 2002 on an
adjusted basis, as the Company executes on its restructuring
initiatives.

For the fiscal year ended December 31, 2002, revenue was $569
million compared to $599 million for the same period last year.
Net loss on a GAAP basis for the 2002 fiscal year was $108.0
million, which included restructuring charges of $37.0 million
($6.5 million included in cost of sales), other charges of $2.1
million ($0.9 million included in cost of sales, $1.0 million
included in selling, general and administrative expenses and
$0.2 million included in amortization expense), the effects of a
change in accounting policy of $55.6 million and the loss from
discontinued operations of $10.2 million. This compares to a net
loss on a GAAP basis for the same period last year of $104.8
million, including restructuring charges of $67.2 million ($25.4
million included in cost of sales), other charges of $27.2
million ($18.4 million included in cost of sales and $8.8
million included in selling, general and administrative
expenses) and the loss from discontinued operations of $4.4
million. Adjusted net loss(1) for the 2002 fiscal year was $3.0
million or $0.11 per share compared to an adjusted net loss(1)
of $17.0 million or $0.59 per share for the same period last
year.

Gross profit on a GAAP basis for the fourth quarter of 2002 was
$8.7 million compared to $1.7 million for the previous quarter
and a loss of $5.0 million for the same period in the prior
year. Gross profit for the fourth quarter of 2002, excluding
restructuring charges of $0.2 million, was $8.9 million or 7.7%
of revenue, versus $8.8 million or 5.8% of revenue, excluding
$6.3 million of restructuring charges and $0.9 million of other
charges, for the previous quarter and $3.0 million or 2.4%,
excluding restructuring charges of $2.3 million and other
charges of $5.7 million, for the same period last year.

The operating loss on a GAAP basis for the fourth quarter of
2002 was $22.7 million compared to $11.3 million for the
previous quarter and $34.7 million for the same period in the
prior year. The operating income, excluding restructuring and
other charges as described above, for the fourth quarter 2002
was $2.7 million compared to operating income, excluding
restructuring and other charges as described above, of $2.4
million for the previous quarter and an operating loss,
excluding restructuring and other charges as described above, of
$5.5 million for the same period last year.

As announced in the third quarter of 2002, the Company continues
to realign its cost structure and plant capacity to the current
economic environment and recorded restructuring charges of $24.0
million and other charges of $1.5 million during the quarter,
related to the cost of exiting equipment and facility leases,
asset impairment charges, severance costs and inventory
exposures.

Effective January 1, 2002, the Company had unamortized goodwill
of $55.6 million. In response to the implementation of new
accounting standards, the Company completed its transitional
goodwill impairment testing in the third quarter of 2002 and
concluded that a write-off of the entire amount was required and
recorded a charge as a cumulative change in accounting principle
as at January 1, 2002.

As was previously announced, The Company and its lending group
signed a definitive agreement under which certain terms of the
current credit facility were revised providing the liquidity and
financial resources to continue to provide top quality service
to our customers. The revised terms were effective December 31,
2002 and established amended financial and other covenants
covering the period up to June 30th, 2004, based on the
Company's current business plan.

The Company achieved a net cash cycle of 31 days for the fourth
quarter of 2002 compared to 66 days for the same period in 2001
as it continues to drive working capital improvements. Days
sales outstanding improved to 46 days at the end of the fourth
quarter of 2002 from 59 days for the same period in 2001.
Inventory turns improved to 11 times as we exit the fourth
quarter of 2002, from 6 times for the same period in 2001.

Frank Burke, Chief Financial Officer of SMTC commented, "For the
previous five quarters, our message has been consistent;
management will work to improve the Company's balance sheet and
margins. The industry has been a difficult one to operate in as
the economic slowdown in the EMS sector has lasted longer than
expected. Despite this, SMTC management has made the necessary
decisions to improve the business and has not been inclined to
wait for the industry turnaround."

SMTC's President and C.E.O., Paul Walker added, "In 2002, SMTC
made tremendous progress to right size our operations and put
the right global footprint in place to best serve our customers.
We are pleased with the improvements we have made on both our
margins and our balance sheet and feel that we have created a
solid platform from which to serve our customers and create
value for our shareholders".

                     2003 Outlook

Based on current customer indication and reflecting typical
seasonality, the Company expects revenue for the first quarter
of 2003 to be in the range of $90 million to $100 million and
adjusted earnings per share to be between a loss of $0.05 per
share to $0.00 per share.

SMTC Corporation, whose corporate credit and senior bank loan
ratings were cut by S&P to B, is a global provider of advanced
electronic manufacturing services to the technology industry.
The Company's electronics manufacturing and technology centers
are located in Appleton, Wisconsin, Austin, Texas, Boston,
Massachusetts, Charlotte, North Carolina, San Jose, California,
Toronto, Canada, Donegal, Ireland and Chihuahua, Mexico. SMTC
offers technology companies and electronics OEMs a full range of
value-added services including product design, procurement,
prototyping, printed circuit assembly, advanced cable and
harness interconnect, high precision enclosures, system
integration and test, comprehensive supply chain management,
packaging, global distribution and after-sales support. SMTC
supports the needs of a growing, diversified OEM customer base
primarily within the networking, communications and computing
markets. SMTC is a public company incorporated in Delaware with
its shares traded on the Nasdaq National Market System under the
symbol SMTX and on The Toronto Stock Exchange under the symbol
SMX. Visit SMTC's web site, http://www.smtc.com, for more
information about the Company.


SOLECTRON CORP: Replaces Expiring 364-Day $250MM Credit Facility
----------------------------------------------------------------
Solectron Corporation (NYSE: SLR), a leading provider of
electronics manufacturing and supply-chain services, has
executed a secured 364-day, $200 million credit facility to
replace its existing 364-day, $250 million facility that expired
Thursday.  The new facility expires Feb. 12, 2004.

Solectron also amended its existing multi-year, $250 million
credit facility to incorporate substantially the same terms as
negotiated in the new 364-day facility. The multi-year facility
expires Feb. 14, 2005.  Both facilities are now secured by
certain assets of Solectron and its domestic subsidiaries,
including inventory, accounts receivable and equipment.

Together, the facilities provide Solectron with $450 million in
available credit. No amounts are currently drawn under either
credit facility.

Solectron expects to file amended credit agreements with the SEC
as exhibits to its next 10-Q report in April.

Solectron -- http://www.solectron.com-- provides a full range
of global manufacturing and supply-chain management services to
the world's premier high-tech electronics companies. Solectron's
offerings include new-product design and introduction services,
materials management, high-tech product manufacturing, and
product warranty and end-of-life support. Solectron, based in
Milpitas, Calif., is the first two-time winner of the Malcolm
Baldrige National Quality Award. The company had sales of $12.3
billion in fiscal 2002.


SOLECTRON: Fitch Assigns BB+ Sr. Secured Rating to New Facility
---------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' senior secured rating to
Solectron Corporation's new bank credit facility. Solectron's
'BB' senior unsecured debt and 'B+' Adjustable Conversion Rate
Equity Security Units are affirmed. The Rating Outlook remains
Negative.

Solectron recently announced a new $450 million senior secured
credit facility consisting of a $200 million 364-day revolver
facility and a $250 million multi-year facility due 2005. The
company's previous facility was $500 million. The new facility
is secured by the company's domestic assets and benefits from a
covenant package that limits excess leverage, protects against
ongoing operating losses, and requires a minimum liquidity
profile. Fitch's rating of the secured bank facility also
recognizes the senior position the facility has in the company's
capital structure and the large amount of capital junior to the
bank facility. If fully drawn, Fitch estimates the senior
secured credit facility would represent approximately 10% of the
company's capital structure.

The company's ratings continue to reflect the challenging demand
environment for technology, especially telecommunications,
pricing pressures for printed circuit board fabrication, lower
but improved capacity utilization levels, and event risk of
restructuring programs. The ratings also consider Solectron's
top-tier position in the electronic manufacturing services
industry, consistent operating cash flow and free cash flow,
diversity of end-markets and geographies, altered capital
structure, solid cash position, and recent working capital
improvements (mostly from increased inventory turns) albeit in
an industry downturn. The Negative Rating Outlook indicates that
if adverse market conditions persist, outsourcing contracts do
not materialize from new customers, the company makes
significant cash acquisitions, or if it is unsuccessful in
execution of announced restructurings, the ratings may be
negatively impacted.

Solectron has maintained solid liquidity in a severe market
downturn. Cash as of the first quarter ending November 30, 2002,
excluding restricted cash for ACES and synthetic leases, totaled
$1.9 billion and the company's bank facility was unutilized.
Driven primarily by inventory reductions, Solectron continues to
generate operating cash flow to fund capital expenditures and
reduce debt. Applying 70% equity credit for the approximate $1
billion of ACES, total debt as of November 30, 2002, was $2.7
billion, a year-to-year reduction from $5.1 billion. Cash and
proceeds from various debt offerings have been used to reduce
the company's overall debt levels, mainly Solectron's liquid
yield option notes. Presently, approximately $518 million of
2.75% LYONs and $1.2 billion of 3.75% LYONs are putable in cash
or stock on May 2003 and May 2004, respectively. The remaining
debt consists mainly of $500 million senior notes due 2009 and
$150 million due 2006. Fitch expects the put obligations
associated with the LYONs will be settled with cash or new debt.

Quarterly revenues and Solectron's operating performance have
shown signs of stabilization the last few quarters. Revenues
increased sequentially for the past two quarters and have
consistently been in the $3 billion range even though some
weakness is expected in the current quarter. Quarterly EBITDA
levels (excluding restructuring charges) continue to fluctuate
but improved sequentially in the first quarter to a Fitch-
estimated $93.7 million. Revenue and profitability improvements
were primarily driven by new programs wins and growth from
markets outside of telecommunications and continued cost
reductions. As of the November 30, 2002, leverage, measured by
total debt (including the equity credit for the ACES) to EBITDA,
is estimated in excess of 9x with interest coverage at less than
2x.


STARBAND: Wants to Maintain Filing Exclusivity through April 26
---------------------------------------------------------------
Starband Communications Inc., tells the U.S. Bankruptcy Court
for the District of Delaware that it need an extension on its
exclusivity periods.  The Debtor asks to extend its exclusive
time to file a Chapter 11 Plan through April 26, 2003 and its
exclusive solicitation period through June 25, 2003.

The Debtor asserts that it has made significant progress towards
rehabilitation during the first eight months that this case has
been pending.  Nevertheless, since the effect of Gilat's
restructuring on the Debtor is unclear at this point, the Debtor
is presently unable to complete its own restructuring and
propose a plan.  Accordingly, the Debtor believes that it will
need an extension to develop, negotiate and propose a
reorganization plan.

The Debtors points out that they have been successful in
streamlining their business and has reduced costs substantially
through workforce reductions. The Debtor also has reduced costs
by replacing a MCI service contract with a less costly
substitute and moving into new office space to save $90,000 per
month on rent.

Additionally, the Debtor has taken a number of positive steps to
grow its business and make it more attractive to potential
investors. The Debtor's settlement with EchoStar Communications
Corporation during the first two months of the chapter 11 case
was critical to remove various controls that EchoStar had over
the Debtor's business.  Further, the Debtor's pending motion
with Microsoft Corporation allows the Debtor an excellent chance
to expand its subscriber base by encouraging subscribers to
which Microsoft will no longer provide satellite service to
obtain service from the Debtor.

StarBand Communications Inc., provides two-way, always-on, high-
speed Internet access via satellite to residential and small
office customers nationwide. The Company filed for chapter 11
protection on May 31, 2002 (Bankr. Del. Case No. 02-11572).
Thomas G. Macauley, Esq., at Zuckerman and Spaeder LLP
represents the Debtor in its restructuring efforts. When the
Company filed for protection form its creditors, it listed
$58,072,000 in assets and $229,537,000 in debts.


STRUCTURED ENHANCED: Fitch Cuts Series 1999-6 Notes Rating to B-
----------------------------------------------------------------
Fitch Ratings downgraded the Notes of Structured Enhanced Return
Vehicle Trust, series 1999-6 (SERVES 1999-6). The transaction is
a synthetic collateralized loan obligation that enables
investors to gain exposure to the economics of a reference loan
portfolio via a total rate of return swap between the trust and
Bank of America, N.A., the Swap Provider, on a leveraged basis.

The following security has been downgraded:

    -- $62,900,000 notes from 'BB' to 'B-'.

SERVES 1999-6, was established to enter into a total rate of
return swap with the Swap Provider referencing a $450 million
high-yield loan portfolio. The transaction has experienced
higher than expected losses in the underlying reference
portfolio. Subsequently, Fitch believes that the notes are no
longer representative of a 'BB' rating.

Fitch will continue to monitor this transaction.


TELESPECTRUM: Annual Stockholders' Meeting Set for March 14
-----------------------------------------------------------
The Annual Meeting of Stockholders of Telespectrum Worldwide,
Inc. will be held Friday, March 14, 2003,  10:00 a.m., local
Eastern time at O'Melveny & Myers LLP, 30 Rockefeller Plaza, New
York, New York 10112 for the following purposes:

   *  To amend the Company Certificate of Incorporation to
      effectuate a 1-for-1,000 reverse split of its outstanding
      shares of common stock pursuant to which each stockholder
      will receive one share of common stock for each 1,000
      shares held and to reduce the authorized number of shares
      of its common stock from 200,000,000 to 10,000,000.

   *  To amend the Company Certificate of Incorporation to
      provide for action to be taken by its stockholders by
      partial written consent in lieu of a meeting.

   *  To approve the adoption of the 2002 Stock Incentive Plan.

   *  To elect five directors to the Board of Directors.

   *  To transact any other business that may properly come
      before the meeting.

February 7, 2003 is the record date for the meeting. This means
that holders of Company voting stock at the close of business on
that date are entitled to:

   *  receive notice of the meeting; and

   *  vote at the meeting and any adjournment or postponement of
      the meeting.

                           *   *   *

As previously reported, on April 29, 2002, TeleSpectrum
Worldwide, Inc., entered into an agreement with its bank lenders
that resulted in a recapitalization of its balance sheet and a
reduction of its debt.

In addition to entering into the amended credit agreement and
completing the recapitalization with its bank lenders on April
29, 2002, other debt balances outstanding to unsecured creditors
were restructured from $15.2 million to approximately $0.7
million, with cash payments of $1.6 million. Certain commercial
liabilities, primarily accounts payable, which had a carrying
value of $3.0 million were also settled through cash payments of
$1.0 million and notes payable of $0.3 million. Additional
settlements were reached on certain real estate lease
obligations that will result in a reduction of $4.9 million of
future lease commitments through cash payments of $0.5 million
and notes payable of $0.4 million. As part of the debt
restructuring, the Company divested itself of its ownership
interest in eSatisfy.com. The Company recorded a gain on the
above for approximately $11.2 million.

As a result of these transactions, TeleSpectrum recorded a gain
on the extinguishment of debt and restructuring of the above
obligations for approximately $141.7 million.

At June 30, 2002, the Company had a stockholders' deficit of
$18.2 million, and reported net income of approximately $128.9
million during the first six months of 2002. The amended
agreement requires compliance with stipulated covenants,
including EBITDA, fixed charge, and capital expenditures, which
was based on the Company's updated business plan for 2002.
During the second quarter of 2002, the Company failed to meet
the financial covenant terms of the Amended and Restated Credit
Agreement dated April 29, 2002. The Company obtained a limited
waiver from the bank group for the non-compliance with EBITDA
and fixed charge coverage covenant for the second quarter. The
Company also obtained an amendment from the bank group to modify
future quarterly covenants. Management believes based on the
revised forecast levels that these covenants are attainable.

Management believes that the restructuring of its bank debt and
other liabilities that occurred on April 29, 2002, together with
existing working capital and projected results for 2002, should
enable the Company to generate sufficient cash flow to meet its
operating cash needs, fund required capital expenditures, and
satisfy its debt service and other financing requirements. As a
result of continuing customer losses and a declining revenue
base, the Company implemented a significant cost reduction plan
in January 2002. This plan included the reduction of corporate
overhead and the closure of five additional contact centers. As
of June 30, 2002, the Company estimates that it will save over
$15 million in connection with this plan for 2002. On an
annualized basis, this plan will reduce fixed expenses by
approximately $19 million. Subsequent to the January plan, the
Company instituted additional cost reductions in March to
include the reduction of additional corporate overhead and the
closure of one additional contact center. The Company estimates
these savings will total $1.5 million in 2002 and $2.5 million
annually thereafter. The impact of these reductions was first
realized in June 2002.

The Company does not have a line of credit or other short-term
borrowing facility available. In addition, covenants in its
amended credit agreement restrict the Company's ability to
pledge assets as collateral for other borrowings.

The Company's 2002 operating plan assumes a stabilization of the
Company's revenue base and an improvement in operating profit
margins from historical levels. The Company's ability to meet
its obligations in the ordinary course of business is dependent
upon successful implementation of its operating plan and
stabilization of its operations. Uncertainties exist with
respect to management's plans, because events and circumstances
frequently do not occur as expected, and those differences may
be material. These uncertainties raise substantial doubt about
its ability to continue as a going concern.


TYCO INT'L: Buys Back $2.4BB Zero Coupon Convertible Debentures
---------------------------------------------------------------
Tyco International Ltd. (NYSE - TYC, BSX - TYC, LSE - TYI)
announced the results of its offer to repurchase Zero Coupon
Convertible Debentures due February 12, 2021 issued by its
wholly-owned subsidiary, Tyco International Group S.A.  Holders'
option to surrender their debentures for repurchase expired at
5:00 p.m., New York City time, on February 12, 2003.

Tyco has been advised by the depositary, U.S. Bank, N.A., that
$2,421,126,000 in aggregate principal amount at maturity of
Debentures were validly surrendered for repurchase and not
withdrawn and Tyco has repurchased all of such debentures.  The
purchase price for the debentures was $764.15 in cash per $1,000
in principal amount at maturity.  The aggregate purchase price
for all of the debentures validly surrendered for repurchase and
not withdrawn was $1,850,103,433.

Tyco International Ltd. is a diversified manufacturing and
service company.  Tyco operates in more than 100 countries and
had fiscal 2002 revenues from continuing operations of
approximately $36 billion.

Tyco International Ltd.'s December 31, 2002 balance sheet shows
a working capital deficit of about $3 billion.


TYCO INT'L: Names Naren Gursahaney VP of Operational Excellence
---------------------------------------------------------------
Tyco International Ltd. (NYSE: TYC, BSX: TYC, LSE: TYI)
announced that Naren K. Gursahaney, the former President and CEO
of GE Medical Systems in Asia and the Pacific, has been named to
the newly created position of Vice President of Operational
Excellence.  In this position, Mr. Gursahaney will lead Tyco's
Six Sigma and Lean Manufacturing initiatives.  Mr. Gursahaney
will report directly to Chairman and Chief Executive Officer,
Edward Breen.

Mr. Breen said: "Naren Gursahaney is a proven leader with an
outstanding track record of strengthening operating businesses,
and he is the ideal person to lead our Six Sigma activities. One
of my highest priorities this year will be to drive operational
intensity across all of Tyco's businesses.  Naren will direct
that effort, helping to make sure that each of our outstanding
businesses reaches its full potential in terms of efficiency,
productivity and return on investment."

Mr. Gursahaney said: "I'm tremendously excited about the
opportunities for creating a company-wide culture of excellence
at Tyco.  Many of Tyco's businesses have already made
significant advances in this area, while others are at the early
stages.  I look forward to working with executives at all
levels of the Company in developing a new Tyco that will deliver
operational excellence in a consistent, disciplined, sustained
program."

Mr. Gursahaney held a number of positions during a 10-year
career at GE. In his most recent position as head of GE Medical
Systems in the Asia-Pacific region, Mr. Gursahaney was
responsible for growing revenues and operating margins by 15% in
2001.  Previous to this position, Gursahaney was Chief
Information Officer of GE Medical Systems and Vice President-
Service, GE Medical Systems-Asia.  As an executive in GE's
corporate offices in Fairfield, Connecticut, Gursahaney
supported the Vice Chairman of GE in the rollout and
implementation of key corporate initiatives, such as Six Sigma,
in GE's international operations.

Previous to joining GE, Mr. Gursahaney spent over three years at
Booz Allen & Hamilton in Cleveland, OH.  He also was an engineer
at Westinghouse Electric Corporation.  Mr. Gursahaney has an MBA
from the University of Virginia, Darden School and a BS in
Mechanical Engineering from Pennsylvania State University.

Tyco International Ltd. is a diversified manufacturing and
service company.  Tyco is the world's largest manufacturer and
servicer of electrical and electronic components; the world's
largest designer, manufacturer, installer and servicer of
undersea telecommunications systems; the world's largest
manufacturer, installer and provider of fire protection systems
and electronic security services and the world's largest
manufacturer of specialty valves.  Tyco also holds strong
leadership positions in medical device products, and plastics
and adhesives.  Tyco operates in more than 100 countries and had
fiscal 2002 revenues from continuing operations of approximately
$36 billion.


UNITED AUSTRALIA: Files Plan Disclosure Statement in New York
-------------------------------------------------------------
United Australia/Pacific, Inc., formerly known as UIH
Australia/Pacific, Inc., filed its Disclosure Statement in the
U.S. Bankruptcy Court for the Southern District of New York.
The disclosure document is intended to provide creditors with
adequate information allowing them to make informed decisions
about whether to vote to accept or reject the company's plan to
emerge from chapter 11.  A full-text copy of the Debtor's
Disclosure Statement is available for a fee at:

  http://www.researcharchives.com/bin/download?id=030211003946

The Summary for the Classification and Treatment of Claim and
Equity Interests Under the Plan are:

Class Type of Claim or         Treatment              Estimated
       Equity Interest                                 Recovery
----- ----------------  ------------------------     ---------
  --   DIP Credit        Holders agreed to waive,     N/A
       Agreement Claims  release and discharge,
                         all Allowed DIP Credit
                         Agreement Claims

  --   Administrative    Paid in full, in Cash        100%
       Expense Claims

  --   Priority Tax      The Debtor, at its sole      100%
       Claims            option, will either:
                         (1) pay in cash or
                         (2) make deferred Cash
                             payments

  1    Priority Non-Tax  Unimpaired; paid in full     100%
       Claims

  2    Bondholder Claims Impaired; will receive       6.47%
                         its Ratable Proportion of
                         $34,500,000 in Cash.

  3    General Unsecured Impaired                     7%
       Claims

  4    Intercompany      Impaired; Cancelled on the   0%
       Claims            Effective Date

  5    Equity Interests  Unimpaired                   100%

  6    Other Equity      Impaired                     0%
       Interests

Under the Plan, the common stock of UAP will be retained by its
current shareholders in order to preserve the existing UAP
structure so Reorganized UAP can monitor and participate as a
shareholder in the bankruptcy involving Telefenua. The Debtor
believes that cancellation of the UGC Claims, while leaving the
existing common stock of UAP outstanding is an efficient way to
effect that result without causing a change of control of UAP.
The Debtor understands that UGC also prefers this approach for
these reasons.

United Australia/Pacific, Inc., through an indirect 51.4% owned
subsidiary, is a leading provider of pay television, telephone
and Internet services in Australia and New Zealand. The Company
filed for chapter 11 protection on March 29, 2002 (Bankr.
S.D.N.Y. Case No. 02-11467).  Martin N. Flics, Esq., and Gregg
D. Josephson, Esq., at Latham & Watkins represent the Debtor in
its restructuring efforts.  When the Company filed for
protection from its creditors, it listed $42,705,901 in assets
and $549,803,884 in debts.


UNITED INDUSTRIES: S&P Ups Sub. Debt Rating to B- from CCC+
-----------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
and senior secured bank loan ratings on St. Louis, Missouri-
based United Industries Corp. to 'B+' from 'B' and the
subordinated debt rating to 'B-' from 'CCC+'.

The outlook is stable. United Industries' total debt outstanding
was approximately $400 million as of Dec. 31, 2002.

The upgrade reflects the company's improved credit profile and
Standard & Poor's expectations that United Industries will
maintain credit protection measures consistent with the revised
rating, despite the possibility of additional niche
acquisitions.

"United Industries Corp.'s ratings reflect its high debt
leverage, seasonal business characteristics, and competitive
industry dynamics," said Standard & Poor's credit analyst Jean
C. Stout. "These factors are somewhat offset by the company's
solid market positions in consumer lawn and garden pesticides
and fertilizers and in household insecticides."

United Industries benefits from a more diversified product
portfolio and customer mix following recent acquisitions as well
as benefiting from favorable industry growth prospects.

The company manufactures and markets consumer lawn and garden
pesticides, including herbicides, and indoor and outdoor
insecticides, as well as insect repellents, fertilizers, and
soils. Within the growing $2.8 billion U.S. consumer lawn and
garden and household insecticide retail markets, the company
participates in the value and opening price point categories.
It is well positioned within its product categories, with the
No. 1 position in home centers and the No. 2 position within the
mass merchandiser channel. Still, industry dynamics remain
competitive, with branded and nonbranded participants, including
branded segment leader The Scotts Co. (BB/Positive/--).


UPMC HEALTH: A.M. Best Affirms B++ Financial Strength Ratings
-------------------------------------------------------------
A.M. Best Co. has affirmed the financial strength rating of B++
(Very Good) of UPMC Health Plan Inc and assigned an initial
financial strength rating of B++ (Very Good) to UPMC Health
Benefits Inc., (both of Pittsburgh). Both ratings have stable
outlooks.

These ratings are based on both companies' strategic roles as
the managed care affiliates to the University of Pittsburgh
Medical Center Health System, a fully integrated health care
delivery organization. These ratings also consider the well-
established provider networks, a diversified offering of health
plans and lower operating expenses in the plan memberships.
Offsetting factors include previous underwriting losses incurred
with expansion, reliance on capital support from their parent
and formidable service area competition.

Established in 1996, UPMC has grown rapidly to more than 368,000
members by marketing health benefits that provide the highest
quality product at an affordable price to families, individuals
and employers. Throughout western Pennsylvania, UPMC presents a
comprehensive product selection that is a competitive
alternative to the region's leader, Highmark Blue Cross Blue
Shield. Following an underwriting and net loss between 1996 and
2001, UPMC reported an underwriting gain and net profit for the
last nine months of 2002. An expanded plan design, innovative
customer service and growing provider network has effectively
lowered the administrative and medical expense against premium
revenue.

Earnings from operations have reduced negative retained earnings
and the reliance on capital provided by the parent. Fundamental
liquidity and leverage ratios indicate some improvement in
capital position; however, premium to capital at 12.0 times is
high, and equity per member per month of $10.12 is substantially
below industry norm. Concerns regarding capital adequacy are
somewhat mitigated by UPMC's implicit support to maintain the
health plan's risk-based-capital at minimum regulatory
requirements. With the initial capital investment complete, UPMC
has the capacity to realize economies of scale through expansion
of business lines and product options.

Furthermore, UPMC remains an important part of the health
system's commitment to heighten managed care across the region.
Competition is formidable, although UPMC has an inherent
advantage to increase its market share through affiliation with
the region's premier medical facilities.


US AIRWAYS: Argenbright Urges Court to Lift Stay to Nix Pacts
-------------------------------------------------------------
Prior to the Petition Date, Argenbright Security, Inc. performed
numerous services under certain contracts with US Airways Group
Inc., including passenger screening, airport security, sky cap,
transportation and other aviation services.

Shortly after the September 11 terrorist attack, Congress passed
the Aviation and Transportation Security Act.  Under the ATSA,
the federal government was to assume responsibility for
passenger and cargo screening.  However, this could not be
immediately implemented.  The Debtors and the Federal Aviation
Administration entered into an agreement to reimburse the
Debtors for security services until the federal government could
start its operation.

Air carriers were supposed to begin collecting a fee from
passengers to cover the cost of security services.  The funds
were to be remitted by the air carriers to the Transportation
Security Administration so the TSA could pay security providers.

Argenbright continues to provide non-security services to the
Debtors.  For example, it provides sky cap services at Denver
International Airport, special services at Ronald Reagan
National Airport in Washington DC, pre-board screening services
at Port Columbus International Airport in Columbus, Ohio and
security services at Orlando International Airport.

As of the Petition Date, the Debtors owed Argenbright over
$1,000,000.  Argenbright has filed three proofs of claim
totaling $820,000.

Argenbright asks the Court to modify the automatic stay to
terminate sky cap services at the Denver International Airport
and security services at the Orlando International Airport.

Mark E. Felger, Esq., at Cozen & O'Connor, in Wilmington,
Delaware, asserts that cause exists to terminate the Agreements
because the Debtors are in default on both Agreements.
"Argenbright will suffer harm if required to maintain the
Agreements because the Debtors are not meeting their
obligations," Mr. Felger says. (US Airways Bankruptcy News,
Issue No. 26; Bankruptcy Creditors' Service, Inc., 609/392-0900)


US STEEL: Fitch Rates Convertible Preferred Shares at B+
--------------------------------------------------------
Fitch Ratings has assigned a 'B+' rating to U.S. Steel's Series
B mandatory convertible preferred stock, which is consistent
with current ratings ('BB' for senior unsecured, 'BB+' for
secured bank debt). All ratings remain on Rating Watch Negative
following the company's bid for certain assets of National
Steel. The company has stated that proceeds from the preferred
offering will be used for general corporate purposes, including
funding working capital, financing potential acquisitions, debt
reduction and voluntary contributions to its employee benefit
plans. If the company was successful in acquiring the assets of
National Steel, the proceeds may be used to finance a portion of
the purchase price. The preferred stock is not being issued to
recapitalize the company.


WEIRTON STEEL: Releases Details of Tentative Contract Agreement
---------------------------------------------------------------
Specifics of the tentative contract agreement at Weirton Steel
Corp. -- designed as a major cost-cutting measure -- were
released by the company, the Independent Steelworkers Union and
the Independent Guard Union.

The parties provided general details last Friday when they
announced their tentative accord. The unions currently are
conducting a ratification vote and the results will be known on
Feb. 19.

The proposed contract, which affects 3,200 unionized employees,
calls for:

     -- a 5 percent pay decrease;

     -- a pension plan freeze;

     -- cancellation of a planned dollar an hour wage increase
        set for April 1;

     -- 50 percent of vacation pay would be paid on Feb. 20 with
        the remaining 50 percent to be paid on July 17 instead
        of 100 percent being paid on Feb. 20. This would result
        in an immediate savings in liquidity of more than $6
        million;

     -- discussions in the near future on possible health care
        coverage changes which could result in additional cost-
        savings.

If the unionized work force ratifies the agreement, 530
management personnel will incur like reductions. In total, the
company stands to reduce its annual operating costs by $38
million.

"We're responding to the new low-cost operating methods used to
reopen closed mills and to bring others out of bankruptcy. These
methods have increased the competitive pressure on our company.
We believe it is prudent to make immediate and effective changes
to the way we conduct business in order to be a long-term
survivor," said John Walker, company president and chief
executive officer.

While the current contracts do not expire until March 2004, the
company reopened negotiations in December for it and the unions
to develop their own methods for competing in the domestic steel
industry's new business environment.

"Our union members are well aware of some of the major changes
now taking place for unionized workers in other domestic steel
companies. Our union leadership saw the need to enter into
contract negotiations to save our jobs, our pensions and
affordable, quality health care for active and retired
employees," Mark Glyptis, ISU president, concluded.

In addition to competing with the emerging low-cost mills, the
tentative agreement also helps Weirton Steel, ISU and IGU
address other cost issues including consolidation within the
steel industry, a slow economy, continued high steel import
levels and a sharp rise in health care costs.

"The IGU also is committed to a long-term future for Weirton
Steel and we're prepared to work with the ISU and Weirton Steel
to keep our company viable for the future," said Joe Balzano,
IGU president.

Weirton Steel (OTC Bulletin Board: WRTL) is the seventh largest
U.S. integrated steel company.


WELLMAN INC: Issuing Up to $125M of Preferreds to Warburg Pincus
----------------------------------------------------------------
Wellman, Inc., (NYSE: WLM) entered into an agreement to sell up
to $125.4 million of perpetual convertible preferred stock to
Warburg Pincus, the global private equity firm. With the signing
of this agreement, Warburg Pincus is investing $20 million in
Wellman in the form of a convertible subordinated note that will
be exchanged into Preferred Stock upon shareholder approval, and
receive warrants to purchase 1.25 million shares of Wellman
common stock at an exercise price of $11.25 per share. In
addition, Oliver M. Goldstein, a Warburg Pincus Vice President,
was named a director of Wellman, Inc., increasing to nine the
number of directors on Wellman's Board.

Tom Duff, Wellman's Chairman and Chief Executive Officer, said,
"We are excited to have Warburg Pincus, a premier private equity
firm, as our financial partner. We believe this investment
substantially improves our financial flexibility and positions
us to expand, prosper, and to build upon our strong competitive
positions in the PET resin and polyester fiber businesses."

Proceeds from the transaction will be used primarily to pay down
existing debt. Wellman anticipates that the issuance of the
Preferred Stock will strengthen its balance sheet and facilitate
the refinancing of a significant amount of debt that is maturing
over the next 18 months.

The sale of Preferred Stock is subject to certain conditions,
including shareholder approval. Wellman intends to have a
special meeting of its shareholders in the second quarter of
2003 to approve the transaction. The Preferred Stock issuance is
also subject to Wellman obtaining a new $175 million credit
facility to replace its existing $275 million credit facility,
which matures in September 2003. The company's lead banks, JP
Morgan Chase Bank and Fleet National Bank, will arrange and have
committed to participate in the new facility.

"We expect the issuance of the Preferred Stock to provide a
layer of equity capital that will substantially improve our
capital structure and financial flexibility," said Keith
Phillips, Wellman's Chief Financial Officer. "We believe the
proceeds from this transaction will enable us to refinance our
maturing debt on attractive terms and conditions." After
shareholder approval, Warburg Pincus will exchange its $20
million subordinated note and invest up to an additional $105.4
million for approximately 11.1 million shares of Preferred
Stock, of which approximately 4.4 million shares will be
convertible into Wellman common stock at $11.25 per share and
6.7 million shares will be convertible at $11.25 per share or,
if lower, 10% over the average market price of Wellman common
stock for the 20 trading days before the closing. Warburg Pincus
will also receive warrants to purchase an additional 1.25
million shares of Wellman common stock at an exercise price
equal to the conversion price of the 6.7 million share tranche
of Preferred Stock. There are restrictions on when the Preferred
Stock can be converted into common stock. The conversion price
is subject to adjustment if specified share price performance is
not achieved within four years, as well as standard anti-
dilution protection.

The $11.25 conversion price was set at a premium over the market
price of Wellman's common stock at the time the parties entered
into a letter of intent with respect to this transaction. The
liquidation preference of the Preferred Stock will accrete for
at least the first five years. The annual accretion rate is 8.5%
for the first five years, which would be reduced to 7.25% in the
event that the Preferred Stock becomes eligible to participate
in common stock dividends. After the fifth year, the rate will
increase by 1.5% and may be paid in cash.

J.P. Morgan Securities, Inc., Fleet Securities, Inc., and Bear,
Stearns & Co. Inc., are serving as Wellman's advisors on this
transaction.

Mr. Goldstein, the Warburg Pincus Vice President, said, "We are
pleased to make this substantial investment in Wellman. We look
forward to partnering with this management team and its Board to
continue to build the company and to drive shareholder value."

Wellman, Inc., manufactures and markets high-quality polyester
products, including PermaClear(R) and EcoClear(R) brand PET
(polyethylene terephthalate) packaging resins and Fortrel(R)
brand polyester fibers. The world's largest PET plastic
recycler, Wellman utilizes a significant amount of recycled raw
materials in its manufacturing operations.

Warburg Pincus LLC has been a leading private equity investor
since 1971. The firm currently has nearly $10 billion under
management, with approximately $6 billion available for
investment globally in a range of sectors including chemicals
and industrials, energy and natural resources, financial
services and technologies, healthcare and life sciences,
information and communications technology, media and real
estate.

As reported in Troubled Company Reporter's October 15, 2002
edition, Wellman, Inc., whose corporate credit rating is
currently rated at BB+ by Standard & Poor's, retained Keen
Realty, LLC and CB Richard Ellis/Columbia to market and dispose
of the company's manufacturing facility in Marion, South
Carolina. Keen Realty is a real estate firm specializing in
restructuring real estate and lease portfolios and selling
excess assets. CB Richard Ellis is a vertically integrated
commercial real estate services company with a geographically
diversified network focusing on transaction management,
financial services, and management services.


WORLD HEART: Launches New HeartSaverVAD Implantable Heart Pump
--------------------------------------------------------------
World Heart Corporation (OTCBB: WHRTF, TSX: WHT) unveiled its
next-generation HeartSaverVAD(TM) (ventricular assist device) to
the media and Bay Street Analysts at the Toronto Stock Exchange
(TSX).

The device will be unique because it will be both small
(approximately 350 ml) and pulsatile. Like WorldHeart's
Novacor(R) LVAS (left ventricular assist system), HeartSaverVAD
will assume part or all of the heart's pumping action, while
leaving the heart in place. The need to choose between a pulse
and a small device is removed. The HeartSaverVAD will deliver
both.

HeartSaverVAD is designed to be fully implantable, remotely
powered and remotely monitored, without the need for a volume
compensator to regulate atmospheric pressure; therefore, no
openings in the body are required following implant. Placement
of the device may be abdominal or thoracic.

The pulsing action is delivered by direct magnetic activation of
a single pusher plate causing the blood to fill and eject into,
and out of, the blood chamber. No bearings or other mechanism is
required. Reliability and durability are enhanced; power
requirements and size are reduced.

Production of HeartSaverVAD will be relatively simple, resulting
in lower costs.

"The new HeartSaverVAD combines the strength of the Novacor LVAS
and HeartSaverVAD technologies to produce a unique next-
generation device," said Dr. Tofy Mussivand, WorldHeart's
Chairman and Chief Scientific Officer. "HeartSaverVAD will
deliver comfortable, reliable and long-lasting support for
people suffering from end-stage heart failure. The body's
natural pulse will remain."

"It is expected that HeartSaverVAD will set the standard for the
next generation of VADs," Dr. Mussivand added.

                 About Novacor LVAS

Novacor LVAS is an electromagnetically driven pump that provides
circulatory support by taking over part or all of the workload
of the left ventricle. It is commercially approved as a bridge
to transplantation in the U.S. and Canada. On November 22, 2002,
the FDA filed WorldHeart's Premarket Approval Supplement seeking
destination-therapy indication for its Novacor LVAS.

In Europe, the Novacor LVAS device has unrestricted approval for
use as a bridge to transplantation, an alternative to
transplantation and to support patients who may have an ability
to recover the use of their natural heart. In Japan, the device
is commercially approved for use in cardiac patients at risk
of imminent death from non-reversible left ventricular failure
for which there is no alternative except heart transplantation.

                 Heart Failure in America

More than 5 million people in the United States suffer from
heart failure, with new diagnoses of more then 500,000 annually.
Each year, about 4,000 people are added to the list of
candidates eligible to receive a heart transplant, with fewer
than 2,500 available donor hearts.

World Heart Corporation, with a September 30, 2002 shareholders
equity deficit of about C$35.4 million, a global medical device
company based in Ottawa, Ontario and Oakland, California, is
currently focused on the development and commercialization of
pulsatile ventricular assist devices. Its Novacor LVAS (Left
Ventricular Assist System) is well established in the
marketplace and its next-generation technology, HeartSaverVAD,
is a fully implantable assist device intended for long-term
support of patients with heart failure.


* BOND PRICING: For the week of February 17 - 21, 2003
------------------------------------------------------

Issuer                                Coupon  Maturity  Price
------                                ------  --------  -----
Adelphia Communications                3.250%  05/01/21     8
Adelphia Communications                6.000%  02/15/06     8
Adelphia Communications               10.875%  10/01/10    43
Advanced Energy                        5.250%  11/15/06    73
Advanced Micro Devices Inc.            4.750%  02/01/22    60
AES Corporation                        4.500%  08/15/05    55
AES Corporation                        8.000%  12/31/08    63
AES Corporation                        8.750%  06/15/08    65
AES Corporation                        8.875%  02/15/11    62
AES Corporation                        9.375%  09/15/10    67
AES Corporation                        9.500%  06/01/09    67
Akamai Technologies                    5.500%  07/01/07    45
Alaska Communications                  9.375%  05/15/09    72
Alexion Pharmaceuticals                5.750%  03/15/07    67
Allegheny Generating Company           6.875%  09/01/23    73
Alkermes Inc.                          3.750%  02/15/07    64
Alpharma Inc.                          3.000%  06/01/06    74
Amazon.com Inc.                        4.750%  02/01/09    73
American Tower Corp.                   5.000%  02/15/10    70
American & Foreign Power               5.000%  03/01/30    62
Amkor Technology Inc.                  5.000%  03/15/07    60
AMR Corp.                              9.000%  08/01/12    25
AMR Corp.                              9.000%  09/15/16    31
AMR Corp.                              9.750%  08/15/21    24
AMR Corp.                              9.800%  10/01/21    24
AMR Corp.                             10.000%  04/15/21    24
AMR Corp.                             10.200%  03/15/20    25
AnnTaylor Stores                       0.550%  06/18/19    62
Aquila Inc.                            6.625%  07/01/11    75
Argo-Tech Corp.                        8.625%  10/01/07    70
Applied Extrusion                     10.750%  07/01/11    63
Aquila Inc.                            6.625%  07/01/11    75
Aspen Technology                       5.250%  06/15/05    67
BE Aerospace Inc.                      8.875%  05/01/11    72
Best Buy Co. Inc.                      0.684%  06?27/21    70
Borden Inc.                            7.875%  02/15/23    57
Borden Inc.                            8.375%  04/15/16    58
Borden Inc.                            9.200%  03/15/21    59
Borden Inc.                            9.250%  06/15/19    66
Boston Celtics                         6.000%  06/30/38    65
Brocade Communication Systems          2.000%  01/01/07    74
Brooks-PRI Automation Inc.             4.750%  06/01/08    74
Building Materials Corp.               8.000%  10/15/07    75
Burlington Northern                    3.200%  01/01/45    54
Burlington Northern                    3.800%  01/01/20    73
Calair LLC/Capital                     8.125%  04/01/08    59
Calpine Corp.                          4.000%  12/26/06    49
Calpine Corp.                          7.750%  04/15/09    42
Calpine Corp.                          8.500%  02/15/11    42
Calpine Corp.                          8.625%  08/15/10    43
Case Corp.                             7.250%  01/15/16    73
CD Radio Inc.                         14.500%  05/15/09    42
Cell Therapeutic                       5.750%  06/15/08    58
Centennial Cellular                   10.750%  12/15/08    53
Champion Enterprises                   7.625%  05/15/09    41
Charter Communications, Inc.           4.750%  06/01/06    19
Charter Communications, Inc.           5.750%  10/15/05    22
Charter Communications Holdings        8.625%  04/01/09    46
Ciena Corporation                      3.750%  02/01/08    72
Cincinnati Bell Telephone (Broadwing)  6.300%  12/01/28    68
Cincinnati Bell Inc. (Broadwing)       7.250%  06/15/23    70
CNET Inc.                              5.000%  03/01/06    65
Comcast Corp.                          2.000%  10/15/29    23
Comforce Operating                    12.000%  12/01/07    57
Commscope Inc.                         4.000%  12/15/06    74
Conexant Systems                       4.000%  02/01/07    49
Conseco Inc.                           8.750%  02/09/04    16
Continental Airlines                   4.500%  02/01/07    43
Continental Airlines                   8.000%  12/15/05    54
Corning Inc.                           6.750%  09/15/13    74
Corning Inc.                           6.850%  03/01/29    62
Corning Glass                          8.875%  03/15/16    75
Cox Communications Inc.                0.348%  02/23/21    72
Cox Communications Inc.                0.426%  04/19/20    46
Cox Communications Inc.                2.000%  11/15/29    30
Cox Communications Inc.                3.000%  03/14/30    41
Crown Cork & Seal                      7.375%  12/15/26    72
Cubist Pharmacy                        5.500%  11/01/08    48
Cummins Engine                         5.650%  03/01/98    64
CV Therapeutics                        4.750%  03/07/07    75
Dana Corp.                             7.000%  03/15/28    73
Dana Corp.                             7.000%  03/01/29    73
DDI Corp.                              6.250%  04/01/07    16
Delco Remy International              10.625%  08/01/06    55
Delta Air Lines                        7.900%  12/15/09    71
Delta Air Lines                        8.300%  12/15/29    55
Delta Air Lines                        9.000%  05/15/16    65
Delta Air Lines                        9.250%  03/15/22    62
Delta Air Lines                        9.750%  05/15/21    66
Delta Air Lines                       10.375%  12/15/22    69
Dynegy Holdings Inc.                   6.875%  04/01/11    46
EOTT Energy Partner                   11.000%  10/01/09    67
Echostar Communications                4.875%  01/01/07    74
Echostar Communications                5.750%  05/15/08    73
Edison Mission                         9.875%  04/15/11    29
Edison Mission                        10.000%  08/15/08    36
El Paso Corp.                          7.000%  05/15/11    65
El Paso Corp.                          7.750%  01/15/32    60
El Paso Energy                         6.950%  12/15/07    66
El Paso Energy                         8.050%  10/15/30    64
El Paso Natural Gas                    7.500%  11/15/26    57
El Paso Natural Gas                    8.625%  01/15/22    66
Emulex Corp.                           1.750%  02/01/07    72
Energy Corporation America             9.500%  05/15/07    62
Enron Corp.                            9.875%  06/15/03    16
Enzon Inc.                             4.500%  07/01/08    74
Equistar Chemicals                     7.550%  02/15/26    71
E*Trade Group                          6.000%  02/01/07    74
Finisar Corp.                          5.250%  10/15/08    48
Finova Group                           7.500%  11/15/09    35
Fleming Companies Inc.                 5.250%  03/15/09    32
Fleming Companies Inc.                 9.250%  06/15/10    71
Fleming Companies Inc.                10.125%  04/01/08    72
Foamex LP/Capital                     10.750%  04/01/09    72
Ford Motor Co.                         6.625%  02/15/28    74
Fort James Corp.                       7.750%  11/15/23    74
General Physics                        6.000%  06/30/04    51
Geo Specialty                         10.125%  08/01/08    58
Georgia-Pacific                        7.375%  12/01/25    72
Giant Industries                       9.000%  09/01/07    70
Goodyear Tire & Rubber                 6.375%  03/15/08    68
Goodyear Tire & Rubber                 6.625%  12/01/06    70
Goodyear Tire & Rubber                 7.000%  03/15/28    44
Goodyear Tire & Rubber                 7.875%  08/15/11    60
Great Atlantic                         9.125%  12/15/11    70
Great Atlantic & Pacific               7.750%  04/15/07    70
Gulf Mobile Ohio                       5.000%  12/01/56    63
Health Management Associates Inc.      0.250%  08/16/20    66
Human Genome                           3.750%  03/15/07    66
Human Genome                           5.000%  02/01/07    71
I2 Technologies                        5.250%  12/15/06    64
Ikon Office                            6.750%  12/01/25    65
Ikon Office                            7.300%  11/01/27    70
Imcera Group                           7.000%  12/15/13    75
Imclone Systems                        5.500%  03/01/05    72
Incyte Genomics                        5.500%  02/01/07    69
Inhale Therapeutic Systems Inc.        3.500%  10/17/07    54
Inland Steel Co.                       7.900%  01/15/07    73
Internet Capital                       5.500%  12/21/04    37
Isis Pharmaceutical                    5.500%  05/01/09    65
Juniper Networks                       4.750%  03/15/07    73
Kmart Corporation                      9.375%  02/01/06    14
Kulicke & Soffa Industries Inc.        4.750%  12/15/06    61
LTX Corporation                        4.250%  08/15/06    65
Lehman Brothers Holding                8.000%  11/13/03    62
Level 3 Communications                 6.000%  09/15/09    45
Level 3 Communications                 6.000%  03/15/10    41
Level 3 Communications                 9.125%  05/01/08    65
Level 3 Communications                11.000%  03/15/08    66
Liberty Media                          3.500%  01/15/31    64
Liberty Media                          3.750%  02/15/30    52
Liberty Media                          4.000%  11/15/29    55
LTX Corp.                              4.250%  08/15/06    68
Lucent Technologies                    5.500%  11/15/08    68
Lucent Technologies                    6.450%  03/15/29    56
Lucent Technologies                    6.500%  01/15/28    55
Lucent Technologies                    7.250%  07/15/06    74
Magellan Health                        9.000%  02/15/08    25
Mail-Well I Corp.                      8.750%  12/15/08    71
Mapco Inc.                             7.700%  03/01/27    69
Medarex Inc.                           4.500%  07/01/06    64
Metris Companies                      10.125%  07/15/06    39
Mikohn Gaming                         11.875%  08/15/08    74
Mirant Corp.                           5.750%  07/15/07    45
Mirant Americas                        7.200%  10/01/08    50
Mirant Americas                        7.625%  05/01/06    66
Mirant Americas                        8.300%  05/01/11    44
Mirant Americas                        8.500%  10/01/21    36
Missouri Pacific Railroad              4.750%  01/01/20    70
Missouri Pacific Railroad              4.750%  01/01/30    70
Missouri Pacific Railroad              5.000%  01/01/45    62
Motorola Inc.                          5.220%  10/01/21    63
MSX International Inc.                11.375%  01/15/08    67
NTL Communications Corp.               7.000%  12/15/08    19
National Steel                         9.875%  03/01/09    56
National Vision                       12.000%  03/30/09    50
Natural Microsystems                   5.000%  10/15/05    62
Nextel Communications                  5.250%  01/15/10    72
Nextel Partners                       11.000%  03/15/10    67
NGC Corp.                              7.625%  10/15/26    56
Noram Energy                           6.000%  03/15/12    72
Northern Pacific Railway               3.000%  01/01/47    52
Northern Telephone Capital             7.875%  06/15/26    61
Northwest Airlines                     8.130%  02/01/14    63
NorthWestern Corporation               6.950%  11/15/28    73
Oak Industries                         4.875%  03/01/08    63
OM Group Inc.                          9.250%  12/15/11    69
ON Semiconductor                      12.000%  05/15/08    73
ONI Systems Corporation                5.000%  10/15/05    74
OSI Pharmaceuticals                    4.000%  02/01/09    67
Owens-Illinois Inc.                    7.800%  05/15/18    68
Pegasus Communications                 9.750%  12/01/06    57
PG&E Gas Transmission                  7.800%  06/01/25    61
Philipp Brothers                       9.875%  06/01/08    47
Providian Financial                    3.250%  08/15/05    74
Province Healthcare                    4.250%  10/10/08    74
PSEG Energy Holdings                   8.500%  06/15/11    75
Quanta Services                        4.000%  07/01/07    65
Qwest Capital Funding                  7.000%  08/03/09    71
Qwest Capital Funding                  7.250%  02/15/11    71
Qwest Capital Funding                  7.900%  08/15/10    72
RF Micro Devices                       3.750%  08/15/05    74
RF Micro Devices                       3.750%  08/15/05    74
Radiologix Inc.                       10.500%  12/15/08    74
Redback Networks                       5.000%  04/01/07    26
Revlon Consumer Products               8.625%  02/01/08    44
Rural Cellular                         9.750%  01/15/10    61
Ryder System Inc.                      5.000%  02/25/21    71
SBA Communications                    10.250%  02/01/09    61
SC International Services              9.250%  09/01/07    66
Schuff Steel Co.                      10.500%  06/01/08    74
SCI Systems Inc.                       3.000%  03/15/07    74
Sepracor Inc.                          5.000%  02/15/07    66
Sepracor Inc.                          5.750%  11/15/06    73
Silicon Graphics                       5.250%  09/01/04    54
Sotheby's Holdings                     6.875%  02/01/09    74
TCI Communications Inc.                7.125%  02/15/28    74
Talton Holdings                       11.000%  06/30/07    40
TECO Energy Inc.                       7.000%  05/01/12    73
Tenneco Inc.                          11.625%  10/15/09    75
Teradyne Inc.                          3.750%  10/15/06    72
Terayon Communications                 5.000%  08/01/07    66
Tesoro Petroleum Corp.                 9.000%  07/01/08    74
Tesoro Petroleum Corp.                 9.625%  11/01/08    75
Time Warner Telecom                    9.750%  07/15/08    65
Time Warner                           10.125%  02/01/11    65
Transwitch Corp.                       4.500%  09/12/05    59
Tribune Company                        2.000%  05/15/29    73
US Airways Passenger                   6.820%  01/30/14    73
Universal Health Services              0.426%  06/23/20    62
US Timberlands                         9.625%  11/15/07    61
Vector Group Ltd.                      6.250%  07/15/08    70
Veeco Instrument                       4.125%  12/21/08    72
Vertex Pharmaceuticals                 5.000%  09/19/07    75
Viropharma Inc.                        6.000%  03/01/07    46
Weirton Steel                         10.750%  06/01/05    45
Weirton Steel                         11.375%  07/01/04    60
Western Resources Inc.                 6.800%  07/15/18    75
Westpoint Stevens                      7.875%  06/15/08    28
Williams Companies                     7.625%  07/15/19    74
Williams Companies                     7.750%  06/15/31    69
Williams Companies                     7.875%  09/01/21    73
Witco Corp.                            6.875%  02/01/26    71
Worldcom Inc.                          7.375%  01/15/49    23
Xerox Corp.                            0.570%  04/21/18    64

                          *********

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 ***