TCR_Public/000110.MBX    T R O U B L E D   C O M P A N Y   R E P O R T E R
         Monday, January 10, 2000, Vol. 4, No. 6


BAPTIST FOUNDATION: Seeks To Extend Time To Assume/Reject Leases
BOSTON CHICKEN: Files Plan of Reorganization
COLORADO CASINO: Applies To Employ Unirock Management
CUSTOM SHOP: Case Summary and 21 Largest Unsecured Creditors

DOW CORNING: Asks That Portion Of Opinion Be Set Aside
DREXEL SHIRT: Case Summary and 19 Largest Unsecured Creditors
FAVORITE BRANDS: Seek Authority To Settle De Minimis Claims
FRUIT OF THE LOOM: Seeks To Honor Prepetition Employee Payments
FWT INC: Says It Is Poised For Growth

GENESIS DIRECT: Order Authorizes CW Gifts To Reject Leases
GENESIS DIRECT: Order Extends Exclusivity
GIBSON GREETINGS: Enters Credit Agreement With GE Capital
HARNISCHFEGER: Announces Selection of Initial Bids for Beloit
HARNISCHFEGER: US Trustee's Appoints 2nd Creditors' Committee

HC, HOLDINGS: Case Summary and 10 Largest Unsecured Creditors
INDUSTRIAL IMAGING: Leighton Reports Stock Ownership
INDUSTRIAL IMAGING: Special Meeting Of Stockholders
IRIDIUM: Seeks 90-Day Extension of Its Exclusive Periods
KCS: Reiterates Restructuring Agreement

LAMONTS: Receives Interim Financing Approval
LIBERTY HOUSE: Committee Supports Extension For Leases
LOEWEN: Motion For Compromise With Wachovia On Letters of Credit
NEUROMEDICAL SYSTEMS: Reports Financial Information To SEC
PHONETEL TECHNOLOGIES: Leucadia Reports Holdings

PHONETEL TECHNOLOGIES: Prepackaged Plan Consummated
PREMIER SALONS: Bar Date For Filing Proofs of Claim
RAND ENERGY: Consummation of Joint Plan of Reorganization
SERVICE MERCHANDISE: Reports Favorable Holiday Season
TIE/COMMUNICATIONS: Taps Special Litigation Counsel


BAPTIST FOUNDATION: Seeks To Extend Time To Assume/Reject Leases
Baptist Foundation of Arizona, Inc. together with certain of its
subsidiaries and affiliates, submit their motion for an order
extending the companies' time to assume or reject executory
contracts and unexpired leases.  The companies request a ninety
day extension, up to and including April 9, 2000, or the date a
plan or plans of reorganization are confirmed, whichever is

BOSTON CHICKEN: Files Plan of Reorganization
Boston Chicken, Inc. announced that it and its Boston Market
related subsidiaries ("Boston Chicken") filed a joint Plan of
Reorganization with the United States Bankruptcy Court for the
District of Arizona in Phoenix.  The Plan is based on the
previously announced Asset Purchase Agreement that provides for
the sale to Golden Restaurant Operations, Inc., a McDonald's
Corporation subsidiary, of substantially all of the assets of
Boston Chicken and the assumption of certain related liabilities
for an estimated purchase price of $ 173.5 million.  Certain
assets not subject to the Asset Purchase Agreement, including
Boston Chicken's ownership interest in Einstein/Noah Bagel Corp.,
will be transferred to a Plan Trust for the benefit of creditors.
Under the terms of the Plan of Reorganization, filed today, after
payment of bankruptcy administrative expenses and payment of
claims entitled to priority under the Bankruptcy Code, the
Debtors' senior secured creditors will receive substantially less
than the aggregate face value of their loans to the Company.
Holders of the Debtors' equity securities and holders of any
claims arising out of the purchase of the Debtors' convertible
subordinated debt and equity securities will receive no
distributions under the proposed Plan of Reorganization.  In
addition, it is unlikely that holders of the Company's
convertible subordinated debt securities will receive any
distributions under the Plan of Reorganization.

Boston Chicken filed its voluntary petition for Chapter 11
bankruptcy protection in the U.S. Bankruptcy Court, District of
Arizona on October 5, 1998.  Boston Chicken expects the Chapter
11 process, including the Disclosure Statement hearing and the
subsequent Plan Confirmation hearing, to be completed by mid-year
2000.  All filings in this case are available on the internet at

Boston Chicken, Inc. operates and franchises restaurants under
the Boston Market brand name that specialize in fresh, convenient
meals, featuring homestyle entrees, fresh vegetables, sandwiches,
salads and side dishes. There are 858 Boston Market restaurants
in 33 states and the District of Columbia. Information on Boston
Chicken and Boston Market is available at

COLORADO CASINO: Applies To Employ Unirock Management
The debtor, Colorado Casino Resorts, Inc. applies for an order
authorizing the employment of UniRock Management Corp as its
financial advisor.   UniRock prepared a valuation analysis for
the debtor UniRock's post-petition services are limited in scope
and will be rendered only as needed by the debtor in connection
with plan confirmation.  The services will be limited to:

Providing the debtor with any necessary or required, updated
valuation reports and related information or analyses; and

Preparing for and providing expert testimony with respect to any
of UniRock's services as may be necessary in connection with plan
confirmation or as otherwise may be required.

UniRock has agreed to accept a fee of $5,000 payable upon
completion of the services.

CUSTOM SHOP: Case Summary and 21 Largest Unsecured Creditors
Debtor:  Custom Shop Corp.
         402-413 Route 23
         Franklin, NJ 07416

Petition Date:  January 3, 2000       
Chapter 11
Court:  District of  Delaware            
Judge:  Peter J. Walsh

Debtor's Counsel:  Robert J. Dehney
                   Derek C. Abbott
                   Morris, Nichols, Arsht & Tunnell
                   1201 N. Market St.
                   P.O. Box 1347
                   Wilmington, DE 19899 - 1347
                   Tel (302) 658-9200
                   Fax (302) 658-3989

                   Fruman Jacobson
                   Robert F. Richards
                   Sonnenschein Nath & Rosenthal
                   8000 Sears Tower
                   Chicago, IL 60606
                   Tel (312) 876-8000
                   Fax (312) 876-7934

                   Joseph H. Smolinsky
                   Sonnenschein Nath & Rosenthal
                   1221 Avenue of the Americas, 24th floor
                   New York, NY 10020-1089
                   Tel (212) 768-6700
                   Fax (212) 768-6800

21 Largest Unsecured Creditors

Mortimer Levitt             Subdebt               $ 2,384,100
Nat'l Retail Const.         Trade Debt             $ 195,000
Lalire March Architects     Trade Debt             $ 96,235
Lectra Systems              Trade Debt             $ 80,000
Provincial Store Fixtures   Trade Debt             $ 58,647
Bloomburg                   Trade Debt             $ 57,440
Katz Digital Technologies   Trade Debt             $ 54,111
Bieri & Associates          Trade Debt             $ 46,445
Dow Jones & Co.             Trade Debt             $ 35,675
New York Times              Trade Debt             $ 31,896
Positive Image              Trade Debt             $ 27,006
Hammer Graphics             Trade Debt             $ 25,819
R. J. Pitcher               Trade Debt             $ 22,274
Frank Galipo Photography    Trade Debt             $ 21,495
MBS Business Products       Trade Debt             $ 20,689
New York Sample Card        Trade Debt             $ 16,508
Fisher Development Inc.       Trade Debt       $ 12,767
Maury Rogoff Public Relations Trade Debt       $ 12,398
Nationwide Yellow Pages  Trade Debt            $ 10,081
North American Graphics  Trade Debt            $ 8,853
Chicago Tribune Co.      Trade Debt            $ 7,223

The debtors, Dailey International Inc. and its affiliates seek
entry of an order for a final decree closing the Chapter 11
cases.  The plan has been substantially consummated and the
initial distributions to holders of allowed general unsecured
claims have been made in accordance with the terms of the plan
and the confirmation order.  The claims review and resolution
process is complete, although certain claims remain to be
litigated, if necessary.

DOW CORNING: Asks That Portion Of Opinion Be Set Aside
Dow Corning Corp. and the Tort Claimants Committee (TCC),
representing women with silicone breast implant and other product
liability claims, today announced that they have jointly asked
U.S. District Judge Denise Page Hood to set aside one portion of
the U.S. Bankruptcy Court's recent opinion that has created
confusion about Dow Corning's Joint Plan of Reorganization, a
plan that was approved by 94 percent of the claimants.

Although the Bankruptcy Court in Bay City, Mich., confirmed the
Joint Plan on Nov. 30, 1999, in an opinion signed on Dec. 21, the
Court attempted to modify the Plan to allow anyone who did not
vote in favor of it to sue Dow Corning's shareholders and other
third parties.

In pleadings filed today, Dow Corning and the TCC asked Judge
Hood to set aside this portion of the Bankruptcy Court's Dec. 21
opinion and restore the release of third parties, consistent with
the plan that claimants overwhelmingly approved.  The pleadings
stated that the Bankruptcy Court had no jurisdiction over the
Joint Plan once Plan objectors filed appeals from the
Confirmation Order.

"The third-party release is an integral part of the Joint Plan of
Reorganization that was heavily negotiated between Dow Corning
and the Tort Claimants Committee to resolve the silicone breast
implant controversy," said Gary E. Anderson, president and chief
executive officer of Dow Corning. "Without the third-party
release, there is no closure of breast implant litigation against
our shareholders or Dow Corning.  The Joint Plan, as filed,
already provides a fair and equitable way for women with breast
implants to have their day in court.  The Joint Plan allows any
claimant to file a lawsuit against the Litigation Facility, which
will be funded by Dow Corning following implementation of the
Joint Plan."

Anderson stressed that the Joint Plan, including the third-party
release, had been overwhelmingly approved by the claimants, and
that both Dow Corning and the Tort Claimants Committee remain
committed to obtaining final approval for the Joint Plan as
originally agreed to.  "We are asking Judge Hood to eliminate the
confusion created by the Bankruptcy Court's Dec. 21 opinion so
that we can proceed with the appeals process and implement the

Tort Claimants Committee representative Ralph I. Knowles said,
"Both the TCC and Dow Corning are committed to resolving this
last remaining issue so that we can rapidly implement the Joint
Plan and begin the processing and payment of claims as soon as

DREXEL SHIRT: Case Summary and 19 Largest Unsecured Creditors
Debtor:  Drexel Shirt Co., Inc.
         402-413 Route 23
         Franklin, NJ 07416

Petition Date:  January 3, 2000     
Chapter 11
Court:  District of Delaware           
Judge:  Peter J. Walsh

Debtor's Counsel:
Robert J. Dehney
Derek C. Abbott
Morris, Nichols, Arsht & Tunnell
1201 N. Market St.
P.O. Box 1347
Wilmington, DE 19899 - 1347
Tel (302) 658-9200

Fruman Jacobson
Robert F. Richards
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, IL 60606
Tel (312) 876-8000
Fax (312) 876-7934
Joseph H. Smolinsky
Sonnenschein Nath & Rosenthal
1221 Avenue of the Americas, 24th floor
New York, NY 10020-1089
Tel (212) 768-6700
Fax (212) 768-6800

19 Largest Unsecured Creditors

Threadtex                 Trade debt      $ 264,287
Custom Vetement Assoc     Trade debt      $ 237,383
Hagale Industries         Trade debt      $ 170,861
E. Tennenhouse            Trade debt      $ 166,951
Superbra, Inc             Trade debt      $ 130,172
Martin Grienfield Clothiers Trade debt    $ 130,142
Santai American Corp.     Trade debt      $  54,816
IBM Corp                  Trade debt      $  33,905
Bentley Cravats Corp.     Trade debt      $  32,575
Finova Capital Corp.      Trade debt      $  30,166
Ezrason's Inc.            Trade debt      $  29,486
Computer Inventory Assoc  Trade debt      $  26,000
Warren Corp               Trade debt      $  25,837
NationsBanc Commercial    Trade debt      $  24,479
Dickard Widder Industries Trade debt      $  23,406
MBS Business Products     Trade debt      $  20,689
Domeuil                   Trade debt      $  17,594
W. Stafford Collections   Trade debt      $  12,909
BNY Financial Corp.       Trade debt      $  11,896

FAVORITE BRANDS: Seek Authority To Settle De Minimis Claims
Favorite Brands International Holding Crop., et al., debtors,
seek authority to settle certain claims in the Chapter 11 cases.  
The debtors seek court authority to settle all claims less than
$750,000 without seeking court approval.  For those claims
between $50,000 and $750,000, the debtors shall notify the
creditors' committee.

FRUIT OF THE LOOM: Seeks To Honor Prepetition Employee Payments
Excluding Fruit of the Loom, Ltd., the Debtors' aggregate
workforce consists of approximately 11,022 employees.  Paychecks
were issued prior to the Petition Date and many have not been
cashed.  Additionally, Employees are entitled to vacation, sick
pay and paid time off benefits.  At the Petition Date, the
Debtors estimate that accrued and unpaid Employee-Related
Liabilities approximate:

$19,000,000 for wages, salaries, bonuses, commissions, and taxes;
500,000 for vacation, holiday and sick pay;
9,300,000 for 401(k), flexible spending, pension and other plans;

The Debtors' Employees are vital to daily operations, maintaining
positive employee morale is important, and the reorganization
effort will fail if the Debtors lose their valuable employees.  
Accordingly, by this Motion, the Debtors sought and obtained the
Court's authority to honor all prepetition obligations to their
Employees in the ordinary course of business.  

The Debtors have not spent the time to determine how many
employees are owed more than the $4,300 cap under 11 U.S.C. Sec.
507(a), but the Debtors are confident that the vast majority of
pre-petition Employee claims are below that amount.  

FWT INC: Says It Is Poised For Growth
FWT, Inc. reports strong sales and increased hiring as it emerges
from a bankruptcy reorganization.  The fast-paced nine-month
process was officially completed December 31, 1999.  With members
of FWT's founding family back in charge the firm is poised for
continued growth in the booming wireless communications field.  
FWT designs and markets wireless communications infrastructure
products, including towers, monopolies, shelters and

"We are increasing employment to help fill customer orders," said
Roy Moore, FWT's chief executive officer.  "We have added more
than 20 new employees and are continuing to recruit others."

"We would like to express our sincere appreciation to our
customers, employees and strategic partners who worked with us
throughout this process," said Fred Moore, chairman of the
executive committee.

The firm is beefing up its sales staff with the addition of
industry veterans such as Mike Rigley, who recently returned as
vice president of sales. Rigley has served in various positions
over the past 12 years with FWT.

"We are continuing to focus on high quality, on-time delivery and
a high level of customer service," said Carl Moore, FWT's
president.  "We remain committed to providing our customers with
flexible, timely support, innovative solutions and manufacturing
expertise to ensure their success.  Our customers are our most
valued asset.  I truly appreciate their support during the

"We are definitely positioned to continue to grow the business
and take advantage of the continued strong demand for our
company's products in the explosive growth in the wireless
communications field," he added.

GENESIS DIRECT: Order Authorizes CW Gifts To Reject Leases
The US Bankruptcy Court for the District of New Jersey entered an
order on December 23, 1999 authorizing CW Gifts, LLC to reject
executory contracts and unexpired leases.  CW has contracted,
pursuant to a certain asset purchase agreement to sell
substantially all of its assets to Dr. Leonard's Healthcare Corp.
or such other successful bidder to be determined at a hearing.

GENESIS DIRECT: Order Extends Exclusivity
By order of the court entered on December 21, 1999, the debtors'
exclusive time period within which to file a plan of
reorganization and solicit acceptances of such plan is extended
for 90 days up to and including March 17, 2000 and May 15, 2000.

GIBSON GREETINGS: Enters Credit Agreement With GE Capital
On November 30, 1999, Gibson Greetings, Inc. and its wholly owned
subsidiaries, Gibson Greetings International Limited and GGIP,
Inc., entered into a Credit Agreement with General Electric
Capital Corporation, as Agent and Lender.  The Credit Agreement
provides for a revolving credit facility of up to $50 million
through November 30, 2002, subject to earlier termination in
certain events.  The maximum amount which the company may borrow
from time to time will be based upon the amount of its eligible
accounts receivable and inventory, subject to certain

At November 30, 1999, maximum availability under the Credit
Agreement was approximately $39.4 million, with actual borrowings
of approximately $20.8 million.  Loans will bear interest at a
rate equal to high grade 30-day commercial paper plus a margin of
1.75% to 2.75% depending upon the company's financial
performance.  The company's obligations under the
Credit Agreement are secured by a lien in favor of GECC on
substantially all of the company's assets.  The Credit Agreement
contains customary covenants restricting, among other things, the
company's ability to incur additional debt, make investments,
incur liens, merge or sell its assets or pay dividends.  The
company is also required to comply with certain covenants
including maximum capital expenditures, minimum fixed charge
coverage ratio, minimum EBITDA, minimum tangible net worth and
minimum interest coverage ratio.  Simultaneously with entering
into the Credit Agreement, Gibson repaid all amounts outstanding
under its prior loan agreement with a group of banks led by Bank
One, N.A.

HARNISCHFEGER: Announces Selection of Initial Bids for Beloit
Harnischfeger Industries, Inc. (OTC Bulletin Board: HRZI)
announced the selection of initial bids for the sale of assets of
Beloit Corporation, the company's pulp and papermaking equipment
manufacturing and servicing subsidiary.  The company and its U.S.
subsidiaries, including Beloit, filed for reorganization under
Chapter 11 of the U.S. Bankruptcy Code on June 7, 1999.

The Beloit businesses are being sold through an auction to be
conducted on January 10, 2000 at the offices of Kirkland & Ellis
in Chicago.  A hearing before the Bankruptcy Court to approve
bids that are accepted by Beloit at the auction is set for
January 19, 2000.  Government agency approvals may also be

The selected initial bids receive "stalking horse" protection in
the auction under "Bid Protection Procedures" previously approved
by the Bankruptcy Court. The Bid Protection Procedures provide
selected bidders with a topping fee of up to 3 1/2% of their
initial bids in the event the assets are sold to other parties
and require competing bids to be at least 1/2% greater than the
sum of the selected bid plus the topping fee.

The selected initial bids are:

-- Pulp and Finishing Divisions:  Groupe Laperriere & Verreault

-- Woodyard Division:  Andritz AG

-- OASIS:  Alignment Services of North America, Inc.

-- Paper Aftermarket and Roll Covers Division:  Valmet

-- Paper Technology:  Mitsubishi Heavy Industries, Inc.

Robert N. Dangremond, Chief Restructuring Officer for the company
and Beloit, is directing the Beloit sale process and
PricewaterhouseCoopers Securities LLC is acting as
Harnischfeger's investment banker to assist in the sale of
Beloit.  While the company continues to pursue the sale of the
Beloit businesses through the Bankruptcy Court approved auction
process, there can be no assurance as to whether or when any
transaction will take place.

Harnischfeger Industries, Inc. is a global company with business
segments involved in the life-cycle management of equipment for
underground mining (Joy Mining Machinery), surface mining (P&H
Mining Equipment), and pulp and papermaking (Beloit Corporation).

HARNISCHFEGER: US Trustee's Appoints 2nd Creditors' Committee
The United States Trustee advises that that Georgia-Pacific
resigned from the Creditors Committee as of December 9, 1999.  
Accordingly, pursuant to 11 U.S.C. Sec. 1102, the U.S. Trustee
appoints the following entities to serve on the Official
Creditors' Committee:

     1.  HSBC Bank USA , as Indenture trustee;

     2.  Conseco Capital Mangement, Inc.;

     3.  Intelligroup, Inc.;

     4.  Rockwell International Corporation;

     5.  United Steelworkers of America, AFL-CIO;

     6.  The First National Bank of Chicago;

     7.  National Westminster Bank PLC;

     8.  PNC Bank, N.A.;

     9.  Suntrust Bank ; and

     10. J. Weldon Cole.

HC, HOLDINGS: Case Summary and 10 Largest Unsecured Creditors
Debtor:  HC, Holdings, Inc.
             402-413 Route 23
             Franklin, NJ 07416

Petition Date:  January 3, 2000       
Chapter 11
Court:  District of  Delaware            
Judge:  Peter J. Walsh

Debtor's Counsel:  

Robert J. Dehney
Derek C. Abbott
Morris, Nichols, Arsht & Tunnell
1201 N. Market St.
P.O. Box 1347
Wilmington, DE 19899 - 1347
Tel (302) 658-9200
Fax (302) 658-3989

Fruman Jacobson
Robert F. Richards
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, IL 60606
Tel (312) 876-8000
Fax (312) 876-7934

Joseph H. Smolinsky
Sonnenschein Nath & Rosenthal
1221 Avenue of the Americas, 24th floor
New York, NY 10020-1089
Tel (212) 768-6700
Fax (212) 768-6800

10 Largest Unsecured Creditors

Brand Equity Ventures  Subordinated Secured
                       Undercollateralized Debt 2,089,819
Ronald H. Cordover      Subordinated Secured
                      Undercollateralized Debt  1,025,000
Greystone Ventures  Subordinated Secured
                   Undercollateralized Debt     1,025,000
Kronish Lieb Weiner & Hellman  Legal Services      87,841
PricewaterhouseCoopers Accounting Services         46,434
Levy Kerson            Executive Search Services   41,795
Baker & Hostetler          Legal Services          18,157
Universal Capital Group     Consulting Services     7,500
Testa Hurwitz & Chibeault    Legal Services         4,579
Krisiewicz McCoy & Co.  Accounting Tax Services       750

INDUSTRIAL IMAGING: Leighton Reports Stock Ownership
Charles M. Leighton beneficially owns 3,000,000 shares of common
stock and warrants to purchase an additional 2,000,000 shares of
Industrial Imaging Corporation.  Mr. Leighton owns 27.55% of the
company's issued and outstanding common stock.  He has the sole
power to vote or direct the vote, and the sole power to dispose
or to direct the disposition of all of these securities.

Under the terms of a Stock and Warrant Purchase Agreement between
Industrial Imaging, Imprimis SB, L.P., Imprimis Investors LLC,
Wexford Spectrum Investors LLC and Mr. Leighton, dated October
26, 1999, the Wexford Affiliates sold to Mr. Leighton the
3,000,000 shares of Industrial Imaging common stock and warrants
to purchase 2,000,000  additional shares of common stock owned of
record on that date by the  Wexford Affiliates. Using his own
personal funds to pay the aggregate purchase price of $95,000,
Mr. Leighton is under no obligation to any third party as a
of the purchase since he did not borrow the funds used in the

Mr. Leighton purchased securities of Industrial Imaging for
personal investment purposes.  His purchase of securities of the
company is related to the sale by the company of substantially
all of its assets to an unaffiliated third party, Focus AOI, Inc.  
Under the terms of a certain Asset Purchase Agreement dated
November 1, 1999, Focus has agreed to pay the company, not later
than four years after the closing of the transaction described in
the Asset Purchase Agreement, a certain multiple of the net
earnings of the company's former business.  A substantial
percentage of the Earnout, after satisfaction of certain
noteholders' claims, should be
available for distribution to the company's shareholders in the
form of a cash dividend.  Mr. Leighton's purchase of the
securities of the company was conditioned upon the signing of the
Asset Purchase Agreement and the inclusion of satisfactory
Earnout provisions in that agreement.

Mr. Leighton acted as a broker on behalf of Industrial Imaging
with respect to the transaction described in the Asset Purchase
Agreement.  Under that agreement, Mr. Leighton is entitled to
receive a certain percentage of the Earnout as a broker's fee.  
He has also signed a Stockholder's Voting Agreement and
Irrevocable Proxy, in which Mr. Leighton has assigned to
officers of Focus AOI the right and obligation to vote his shares
in favor of the transaction described in the Asset Purchase

INDUSTRIAL IMAGING: Special Meeting Of Stockholders
A special meeting of stockholders of Industrial Imaging
Corporation has been called to be held on January 18, 2000 at
10:00 a.m., Eastern  Standard Time, at the Lowell Courtyard, 30
Industrial Avenue, Lowell, Massachusetts, called in connection
with the proposed sale of substantially all of the company's
operating assets to Focus AOI, Inc., a Delaware corporation.  The
special meeting of stockholders has been called for the purpose
of considering and voting upon the following proposals:

1. To consider and vote upon the sale of substantially all
of the company's assets to Focus as set forth in the Asset
Purchase Agreement; and

2. To  consider  and  act  upon  any  matters  incidental
to the foregoing and any other matters that come before the

The Board of Directors of Industrial Imaging has unanimously
voted for the transaction.  The Board is said to believe that the
proposed asset sale is in the best interests of the company and
the stockholders of the company. Holders of 7,700,758 shares
(approximately 70.71%) (10 persons) of the outstanding common
stock of the company have executed proxies to vote in favor of
the transaction and all the other items proposed.  As of December
20, 1999 there were 10,890,201 shares of Industrial Imaging
common stock outstanding.

For the full content of the Asset Purchase Agreement access the  
Internet, free of charge.

IRIDIUM: Seeks 90-Day Extension of Its Exclusive Periods
The U.S. Bankruptcy Court in Manhattan on Thursday was to
consider Iridium LLC's (IRIQE) request for a 90-day extension in
its exclusive periods for filing and soliciting acceptances to a
chapter 11 plan. The request follows Iridium's conclusion that it
needs funding from an outside investor to successfully
reorganize. While the company has received interest and is
continuing to search for potential investors, it has not obtained
funding commitments. In addition to seeking investors, Iridium
recently began seeking potential purchasers of the company's
assets. Iridium believes the process of seeking an investor
and/or asset purchaser will take until at least Feb. 15., several
weeks after the Jan. 11 expiration of the company's exclusive
period for filing a plan.

KCS: Reiterates Restructuring Agreement
KCS Energy, Inc. (NYSE: KCS) announced today that an involuntary
bankruptcy petition was filed by three purported Senior
Noteholders on January 5, 2000. Despite such filing, the Company
reiterated its intention to move forward with a Restructuring
Agreement that has been approved by more than two-thirds of the
holders of the Company's 8.875% Senior Subordinated Notes due
January 15, 2008 and by more than a majority of its 11% Senior
Notes due January 15, 2003 and to continue to pay trade creditors
in the ordinary course.  As part of that agreement, the Company
intends to move forward with its previously announced plan to
implement the Restructuring pursuant to a case under Chapter 11
of the Bankruptcy Code.

KCS President and Chief Executive Officer James W. Christmas
stated, "We are confident the Restructuring Agreement, as
announced on December 28, is the best possible plan for all of
KCS' stakeholders -- lenders, Noteholders, equity investors,
trade creditors and employees."  The Agreement provides for all
Senior Noteholders to receive a cash payment for interest due as
of January 15, 2000, totaling $16.5 million.  Consenting Senior
Noteholders will exchange their existing notes for new 11% Senior
Notes due January 15, 2005 secured by a junior lien against
certain assets.  Non-consenting Senior Noteholders will have
their existing Senior Notes reinstated, as amended in accordance
with the existing indenture.  Senior Subordinated Noteholders
will receive a combination of cash and redeemable convertible
preferred stock in exchange for their Subordinated Notes.  In
addition, the Restructuring Agreement would enable the Company to
continue to pay trade creditors in the normal course of business.  
The Company intends to file the proposed plan with the bankruptcy
court on or before January 18, 2000.  The plan will be subject to
confirmation by the bankruptcy court.

KCS is an independent energy company engaged in the acquisition,
exploration, development and production of natural gas and crude
oil with operations in the Mid-Continent and Gulf Coast regions.  
The Company also purchases reserves (priority rights to future
delivery of oil and gas) through its Volumetric Production
Payments (VPP) program.  For more information on KCS Energy,
Inc., please visit the Company's web site at

To receive KCS' latest news and other corporate developments via
fax at no cost, please call 1-800-PRO-INFO.  Use company code
KCS.  See also

LAMONTS: Receives Interim Financing Approval
Lamonts Apparel Inc. (OTCBB:LMNTE), which operates 38 casual
lifestyle and apparel stores in five Northwestern states,
received Court approval today for interim use of the company's
new debtor-in-possession (DIP) financing which makes $45 million
available to Lamonts immediately.

The company noted that the unsecured creditors represented at
today's hearing had given their "enthusiastic support" to the new
financing package. A final hearing on the financing will be held
Jan. 31.

Alan Schlesinger, Lamonts' chairman and chief executive officer,
stated that he was pleased with the overall response from the
vendor community.

"We had a number of important vendors calling us immediately to
find out when they could resume shipping merchandise. While we
are still in the process of calling and responding to every
vendor, we feel that the vendor community is overall very
supportive of Lamonts' efforts."

Founded in 1967, Lamonts Apparel operates 38 stores in Alaska,
Idaho, Oregon, Utah, and Washington. The company is well-known in
the Northwest as a retailer of brand-name apparel, accessories
and home decor from such manufacturers asAlfred Dunner, Byer of
California, Jockey, Lee, Levi, Liz Claiborne, Mikasa, OshKosh,
Pacific Trail, Rafaella and Woolrich.

Lamonts has headquarters in Kirkland in the greater Seattle area
and employs approximately 1,500 people. The company voluntarily
filed to reorganize under Chapter 11 on Jan. 4. Additional
corporate information is available at the company's Web site at

LIBERTY HOUSE: Committee Supports Extension For Leases
The Official Committee of Unsecured Creditors of Liberty House,
Inc. support the debtor's motion for an order extending the time
to assume, assume and assign or reject approximately 17 unexpired
non-residential real property leases until May 31, 2000.  The
Committee believes that the additional time is necessary to
ensure that the debtor and its creditors have flexibility to deal
with the remaining leases, particularly in the context of the
joint creditor plan filed by the Committee and the debtor's
secured lenders, which has been delayed as the parties attempt to
resolve a large tax claim.

The only objection to the debtor's motion for extension was by
the new owner of the Ala Moana Center, the location of Liberty
House's flagship department store in Honolulu.  Liberty House
states that the large disputed IRS claim and the longstanding
controversy concerning corporate control render Liberty House's
reorganization process unstable.  Liberty House's chapter 11 case
has been prolonged by factors generally beyond its control, but
it assert that its business and the Chapter 11 case are stable.  
At the value of $90 million as noted in the objection, this lease
may be Liberty House's must valuable unencumbered asset, and the
debtor does not wish to assume or reject the lease without
careful evaluation.

LOEWEN: Motion For Compromise With Wachovia On Letters of Credit
Before the Petition Date, Wachovia Bank, N.A. issued six letters
of credit on behalf of Debtor Loewen Group Acquisition Corp. in a
total maximum face amount of $4,750,000.  As of the Petition
Date, the maximum face amounts of these notes totaled
$4,382,083.39.  The amounts that can be drawn under some of the
letters of credit have decreased and will continue to do so
over time.  In addition, Wachovia has already honored draws under
some of the letters. LGAC's obligations under these letters of
credit are secured by a collateral account of $4,400,416.71.  The
Debtors and Wachovia have agreed to modify the automatic stay in
bankruptcy to allow Wachovia to use the collateral account to
satisfy LGAC's obligations under the letters of credit.

This agreement allows Wachovia to immediately apply the
collateral account to LGAC's obligations that are outstanding if
and when the Court enters an order approving the agreement.  The
agreement also allows Wachovia to use the collateral account to
satisfy any obligations resulting from LGAC's drawing on the
letters of credit after entry of a Court order approving the
agreement.  Finally, the agreement sets out a procedure by which
Wachovia can remit to LGAC the collateral account amounts
equivalent to portions of a letter of credit that cannot be used
by LGAC under the terms of the letters.  (Loewen Bankruptcy News
Issue 17; Bankruptcy Creditors' Service Inc.)

NEUROMEDICAL SYSTEMS: Reports Financial Information To SEC
When filing its financial information for the month of October
1999 with the U. S. Bankruptcy Court for the District of
Delaware, Neuromedical Systems Inc. reported net revenue of
$8,904 and net losses of $85,344.

PHONETEL TECHNOLOGIES: Leucadia Reports Holdings
Leucadia National Corporation is a New York corporation with its
principal office in New York City. It is a financial services
holding company principally engaged in personal and commercial
lines of property and casualty insurance, banking and lending,
manufacturing and mining. In October and November 1999, Leucadia
purchased an aggregate of $9,500,000 principal amount of PhoneTel
Technologies Inc. 12% Senior Notes due 2006 for an aggregate
purchase price of $1,560,000. Leucadia obtained the funds
for these purchases from its working capital.

On October 20, 1999, the United States Bankruptcy Court for the
Southern District of New York confirmed PhoneTel's Chapter 11
reorganization plan.  Under the Plan, 10,205,000 shares of common
stock will be outstanding following the Plan's consummation.  Of
these shares, 9,500,000 will be issued to holders of the Senior
Notes, which originally were issued in the aggregate principal
amount of $125,000,000.

Leucadia expects to receive approximately 722,000 shares upon
consummation of the Plan, representing approximately 7.07% of the
common stock to be outstanding following consummation of the
Plan.  Leucadia acquired the Senior Notes and will hold the
common stock for investment purposes.  Notwithstanding the
foregoing, Leucadia says it will monitor its interest in the
company with a view toward maximizing the value of its

PHONETEL TECHNOLOGIES: Prepackaged Plan Consummated
On November 17, 1999, the prepackaged plan of reorganization of
PhoneTel Technologies, Inc. was consummated, thus completing the
company's financial restructuring. In accordance with the terms
of the Plan, PhoneTel's 12% Senior Notes due in 2006 have been
converted into approximately 95% of the reorganized company's
common stock, with former equity holders sharing in the remaining
5%. In addition, the former equity holders will receive warrants
to purchase approximately 1.1 million shares of the reorganized
company's common stock, at an exercise price of $10.50 per share,
with a term of three years. These equity interests are subject to
dilution by certain other equity issuances, including issuances
upon the exercise of certain options and awards to purchase up to
an aggregate of 5% of the reorganized company's common stock, to
be granted pursuant to the terms of a new management incentive
plan approved as part of the Plan. Claims of employees, trade and
other creditors of the company, other than holders of the Senior
Notes, will be paid in full by the company in the ordinary course
unless otherwise agreed, with the company retaining its rights
and defenses with respect to such claims.

In connection with the consummation of the Plan, the company has
also entered into a new credit agreement with Foothill Capital
Corporation which provides for a $46 million revolving credit
line. The proceeds of the facility have been primarily utilized
to repay the principal balance of the prior line of credit with
Foothill. The terms of the Agreement provide for interest on the
principal balance at three percent above the base rate and
obligate the company to pay certain fees which become due and
payable at various intervals throughout the term of the
Agreement. Certain fees, together with interest thereon, may be
deferred and added to the then outstanding principal balance at
the option of the company. Certain fees are also subject to
reductions for early prepayment of the principal balance
outstanding. The Agreement also includes covenants which require
the company to maintain certain financial ratios and limit the
incurrence of additional debt, capital expenditures and the
payment of dividends.

Pursuant to the terms of the Plan, a new Board of Directors has
been appointed.  The five member board includes Thomas M.
Barnhart, II, John D. Chichester, the company's President and
Chief Executive Officer, Eugene I. Davis, Peter G. Graf and Kevin
L. P. Schottlaender. Thomas M. Barnhart, II has been elected to
serve as the company's Chairman of the Board.

PREMIER SALONS: Bar Date For Filing Proofs of Claim
On December 16, 1999, the US Bankruptcy Court for the District of
Delaware entered an order establishing January 31, 2000 as the
general claims bar date in the Chapter 11 cases of Premier Salons
International, Inc. and GEMM Holdings, Inc.

RAND ENERGY: Consummation of Joint Plan of Reorganization
The US Bankruptcy Court for the Northern District of Texas,
Dallas Division entered a confirmation order on November 3, 1999,
confirming the joint plan of reorganization for Rand Energy
Company dated September 22, 1999.  All of the conditions
precedent to the consummation of the plan have been satisfied,
and the "consummation date," as defined in the plan is November
30, 1999.

SERVICE MERCHANDISE: Reports Favorable Holiday Season
Service Merchandise Company, Inc. (OTCBB:SVCDQ) announced that it
has successfully completed its 1999 holiday season and, subject
to physical inventory results and other normal year-end
adjustments, should substantially exceed the benchmark targets
established in its 1999 Business Plan. Having surpassed the
commitments forecasted to its creditors during 1999 and
consistent with its strategic reorganization timeline developed
and announced in the first quarter of 1999, Service Merchandise
said it is seeking a further extension of the period in which the
Company has the exclusive right to file or advance a plan of
reorganization in its Chapter 11 case through the 2000 holiday

In a motion filed with the United States Bankruptcy Court in
Nashville on Wednesday and presently set for hearing on January
25, 2000, the Company seeks an extension of the plan proposal
period through and including April 30, 2001 and an extension of
the Company's exclusive right to solicit acceptances of its
plan through and including June 30, 2001. The Company has
proposed that its Official Committee of Unsecured Creditors have
an opportunity to request that the Court reevaluate the proposed
extension in May 2000 following the formal presentation of
Service Merchandise's Year 2000 Business Plan in March 2000.

"The extension will provide Service Merchandise the opportunity
to complete, present and implement its 2000 Business Plan, assess
the results of the Plan and formulate, propose, solicit
acceptances of and confirm a reorganization plan
prior to the original termination date of its $750 million
debtor-in-possession (DIP) financing agreement in June 2001,"
said Chief Executive Officer Sam Cusano.

"From the outset of our reorganization cases, the Company's goal
has been to first stabilize Service Merchandise's business
operations -- including marketing, merchandising, store
operations, E-commerce and other distribution channels -- in 1999
and then formulate a 2000 Business Plan which, if successful,
should be the basis for the Company's successful emergence from
Chapter 11 in 2001. Stabilization of the business is only the
first step of a reorganization, however, we recognize that many
challenges lie ahead before Service Merchandise can return to
long-term growth and profitability," Mr. Cusano said.

"While final year-end results will not be reported until the
year-end closing process is completed at the end of this month,
we are pleased to report that the Company has met each of its
primary 1999 goals and substantially exceeded target EBITDAR
(earnings before interest, taxes, depreciation, amortization and
restructuring charges) for continuing store operations during the
nine months ended December 31, 1999 of approximately $35
million." He noted that the targeted EBITDAR represents an
approximate $7 million improvement in performance over the same
1998 nine-month period on a comparable store basis.

Based on preliminary financial information, the Company's
December 1999 sales exceeded $500 million while gross margin
exceeded the Plan by more than $5 million. More than $7 million
customer transactions took place at Service Merchandise during
the December holiday period.

Cusano noted that liquidity remained strong in 1999, with more
than $150 million of excess availability maintained under the
Company's DIP financing agreement throughout the course of the
reorganization cases to date, and that the Company expected to
have more than $250 million of excess availability in January
2000. Actual vendor support (e.g. accounts payable) exceeded the
Plan by $34 million or 43 percent during peak inventory
requirements in late October and early November. Out-of-stock
inventory occurrences (including in-transit shipments) were
reduced from 14 percent at the commencement of the Chapter 11
cases to 2 percent entering into the Christmas selling season.

"The holiday selling season was the critical test for Service
Merchandise, and the Company's efforts at the store and corporate
levels combined with the support of our lender, vendors and
customers have resulted in strong December sales performance,"
said President and Chief Operating Officer Charles Septer.

"During the past year, the Company has improved vendor and
customer relations, refocused its merchandising mix, re-
established its private label credit card program, and completed
successful store rationalization, asset disposition and cost
reduction programs. Combined with other significant achievements
during 1999, we believe Service Merchandise is well-positioned to
formulate the 2000 Business Plan and implement a successful
reorganization strategy consistent with our original timetable,"
Mr. Cusano said.

Service Merchandise and its subsidiaries filed voluntary
petitions for reorganization under Chapter 11 in the U.S.
Bankruptcy Court for the Middle District of Tennessee in
Nashville on March 27, 1999. The Company presented its
1999 Plan to its principal lenders, vendors and other creditors
in Nashville on July 14, 1999. The 2000 Plan is presently
scheduled for similar presentation on March 21, 2000 in

Service Merchandise is a specialty retailer focusing on fine
jewelry, home and gift products.

TIE/COMMUNICATIONS: Taps Special Litigation Counsel
TIE/Communications Inc. submitted an application to the US
Trustee for approval of employment of Frandzel Share Robins &
Bloom LC as special litigation counsel for the debtor for the
purpose of investigating , filing and litigating objections to
requests for payment of fees and expenses of Paul, Hastings,
Janofsky & Walker LLP, special litigation counsel to the
Creditors Committee.


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