TCR_Public/000117.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 17, 2000, Vol. 4, No. 11


ACME METALS: Creditors' Committee Objects To Equity Committee
AMERICAN PAD & PAPER: Files Voluntary Petition in Chapter 11
BUSH LEASING: Files Chapter 11 Petition
EXCELSIOR-HENDERSON: Meeting of Creditors Set for January 31
FRUIT OF THE LOOM: Files Petition in the Cayman Islands

FRUIT OF THE LOOM: Worldtex Resumes Product Shipments
GRAEME LIMITED: Seeks Time To Assume/Reject Leases
GULF STATES STEEL: Additional Noteholders Appointed
HEDSTROM: Moody's Lowers Debt Ratings
INTERNATIONAL HERITAGE: $1.48M Judgement Against Former Officer

JUST FOR FEET: Announces Third Quarter Sales
KAMPEN & ASSOC: Motion For Relief From Stay
LAMONTS: Promotes E.H. Bulen to President
LOEWEN: Motion To Sell Undeveloped Real Property in Palm Beach
MEDPARTNERS: Applies To Set Hearing Date For Disclosure Statement

MOBILE ENERGY: Joint Motion For Approval of K-C Settlement
NEXTWAVE: Says FCC Rejects $4.3 Billion Payment
PICO MACOM INC: Last Date To File Proofs of Claim
PSI INDUSTRIES: Motion To Sell Assets
SERVICE CORP: To Lay Off 1,141 Employees

SHOE CORP: Seeks Approval of Agreement with ZCMI and The May Co.
THORN APPLE: Private Sale of Real Estate
TULTEX CORP: US Bank Seeks Adequate Protection
UNIFORET: Moody's Downgrades Ratings
USTEL: Completes Asset Sale to Unity Communications, Inc.


ACME METALS: Creditors' Committee Objects To Equity Committee
The Official Committee of Unsecured Creditors of Acme Metals
Incorporated and four of its direct and indirect subsidiaries
objects and opposes the motion of certain shareholders to appoint
an official committee of equity security holders of Acme.

The creditors' committee states that no equity committee should
be appointed because of the cost of an additional committee, the
likelihood that the debtor is insolvent, and that it shareholders
are adequately represented by the current Board of Directors,
elected by the shareholders post-petition.

AMERICAN PAD & PAPER: Files Voluntary Petition in Chapter 11
American Pad & Paper Company (OTCBB:AMPP) (AP&P) announced
that it has filed a petition in the United States
Bankruptcy Court in Delaware to convert the involuntary
Chapter 11 petition filed by its bondholders on January
10, 2000 to a voluntary Chapter 11 proceeding under the
Federal Bankruptcy Code. AP&P is seeking protection under
Chapter 11 to ensure that day-to-day operations continue
normally. The Company plans to pursue various strategic
and financial alternatives, including asset sales and
restructuring the Company's debt. As previously announced,
the Company has retained Lazard Freres & Co. LLC as advisors
to assist it in this process.

To ensure liquidity throughout this period, AP&P has received a
commitment for $65 million of debtor-in-possession (DIP)
financing from a group of its current bank lenders. This
commitment of DIP financing exhibits the continuing support of
the Company's existing bank group. The Company expects the DIP
financing to be approved by the court at a hearing early next
week. Funds will then be available to the Company to fulfill
future obligations associated with operating its business during
the bankruptcy.

"Our focus throughout this process has been to try to
maximize value for all of the Company's stakeholders,"
stated James W. Swent III, Chief Executive Officer. "While
we initially felt that progress was being made in
the negotiations with the bank group and bondholders,
unfortunately these discussions did not yield a consensual
solution. After exploring all available alternatives,
we believe that converting the bondholders' involuntary
Chapter 11 petition to a voluntary Chapter 11 proceeding
presents the most effective means to restructure our debt
while safeguarding the interests of all involved. The DIP
financing agreement will provide liquidity for our daily
operations during the reorganization period and will help to
ensure that our customers continue to receive the products
and level of service they have come to expect from AP&P."

American Pad & Paper Co., which invented the legal pad in
1888, is a leading manufacturer and marketer of paper-based
office products in North America. Product offerings
include envelopes, writing pads, file folders, machine
papers, greeting cards and other office products. The key
operating divisions of the Company are Williamhouse, AMPAD,
and Creative Card. Company revenues in 1998 were $662 million,
additional information is available on the Company's Website

BUSH LEASING: Files Chapter 11 Petition
Bush Leasing Inc., a commercial truck leasing company, has filed
for Chapter 11 bankruptcy protection.

Bush Leasing has more than 1,000 creditors, with both assets and
liabilities in excess of $100 million, according to a preliminary
filing.  The company filed for Chapter 11 in the federal
bankruptcy court in Dayton on Monday.

The filing lists 20 of the company's largest unsecured creditors,
a group owed some $1.3 million as of November. Among them: RPS
Inc., Goodyear Tire & Rubber, Nissan Diesel America Inc., Western
Ohio Freightliner and Fleetmasters Inc.

Filing Chapter 11 under federal laws lets a company hold
creditors at bay while reorganizing the business. The company
believes it can pay something to its unsecured creditors,
according to court documents.

Chairman and Founder George F. Bush said the company tried to
change the terms of $310 million in secured debt because of cash-
flow problems but was forced to seek Chapter 11 protection when
talks fell through.

"Many of our lenders cooperated, but some refused," Bush said.
"As a result, and to preserve value, we decided to file."

He said the company is looking into the possible sale of some or
all of its lease portfolio.

Bush Leasing is a privately held commercial fleet leasing company
that leases or rents vehicles in 48 states and employs 200

Truck leasing accounts for more than 60 percent of the business,
with rentals and complete delivery service making up the rest.
Other offices are in Atlanta, Los Angeles, Chicago, Cincinnati,
Toronto and Philadelphia.

EXCELSIOR-HENDERSON: Meeting of Creditors Set for January 31
In the case of Excelsior-Henderson Motorcycle Manufacturing
Company, a meeting of creditors is set for January 31, 2000 at
9:00 AM, US Courthouse, Room 1017, 300 S. 4th St., Minneapolis,
MN. Proofs of claim must be filed by April 25, 2000.  Attorney
for the debtor is Michael L. Meyer, Ravich Meyer Kirkman &
McGrath, 80 S. 8th Street, Room 4545, Minneapolis, Mn.

FRUIT OF THE LOOM: Files Petition in the Cayman Islands
Fruit of the Loom Ltd., which moved to the Cayman Islands last
year, has filed a petition in the Caymans to bring a further
bankruptcy application, according to Reuters. The company which
had been based in Chicago for years, filed for bankruptcy
protection in December after hurriedly shifting much of its
production out of the United States. The new bankruptcy petition
in the Grand Court of the British overseas territory was filed on
Dec. 20, and if approved, would allow the company to wind up its
affairs largely in public. Unlike the U.S. bankruptcy system,
assets and liabilities of a company being "wound up" or
liquidated are not in the public record under the Cayman Islands
bankruptcy law. In the U.S. filing, the company listed $2.4
billion in liabilities, at least $60 million more than its
assets. A hearing has not been scheduled yet to hear the Caymans
application to liquidate, and offices of the company in the
Caymans were closed and phone calls diverted to an El Salvador
plant--one of 60 facilities where Fruit of the Loom employs about
40,000 people worldwide. (ABI 14-Jan-00)

FRUIT OF THE LOOM: Worldtex Resumes Product Shipments
Worldtex, Inc. (NYSE: WTX) announced that it has resumed product
shipments to Fruit of the Loom (FTL).  FTL filed for
reorganization under Chapter 11 of the U.S. Bankruptcy Code on
December 29, 1999.  Worldtex acquired a manufacturing facility
from FTL in December, 1998 and entered into an long-term supply
agreement at that time.

Barry D. Setzer, Chairman and Chief Executive Officer of Worldtex
stated, "We have a good relationship with Fruit of the Loom as
their principal supplier of narrow elastic fabric.  They were our
largest customer in 1999 at just over 14% of total revenues.  We
believe that this restructuring will serve FTL well as they
capitalize on their brand and market share strengths in the
consumer apparel industry.  We anticipate that they will continue
as a significant customer in 2000."

Allan W. Hall, Vice President, Purchasing of Fruit of the Loom,
stated that, "We are appreciative of the support shown by our
customers and suppliers during this process.  We believe that our
relationship with Worldtex has been very successful and
anticipate ongoing benefits in the future."

Worldtex indicated that its accounts receivable balance with FTL
was approximately $4.4 million at December 31, 1999.  Barry D.
Setzer, concluded that, "This receivable will be subject to the
terms of FTL's reorganization plan, which has yet to be proposed.  
While we are evaluating the proper accounting treatment for this
receivable, we are pleased to resume shipping and anticipate any
new receivables will be paid on a current basis, given the new
debtor-in-possession financing FTL has arranged."     Worldtex
also disclosed that its representative, Mitchell R. Setzer,
Treasurer and Secretary, has been selected as one of seven
members of FTL's official committee of unsecured creditors.  This
committee will represent all unsecured creditors during FTL's
reorganization process.

With current annual revenues of nearly $300 million, Worldtex is
a market leader in the covered elastic yarn and narrow elastic
fabric markets throughout the Americas and Europe.  Worldtex
supplies a broad range of component products to the apparel,
textile, medical and specialty end-use markets.

GRAEME LIMITED: Seeks Time To Assume/Reject Leases
Graeme Limited, Semi-Tech Corporation, ISTM Investments
(Barbados) Inc., debtors, seek a 90-day extension of the time
within which the debtors must assume, assume and assign, or
reject the offer to lease dated October 14, 1998, between Semi-
Tech and Valecon Developments Inc. for the premises located at
2800 14th Avenue, Markham, Ontario, Canada.

The Offer to Lease, the only lease of nonresidential real
property of which the debtors are aware, is a lease for the
premises from which the debtors conduct their operations. At this
point, it is unclear how long the debtors will need to utilize
the space leased pursuant to the Offer To Lease.  Semi-Tech is
current on its post-petition rental obligations under the Offer
to Lease and intends to timely perform all post-petition
obligations under the Offer to lease as required by the
Bankruptcy Code.

GULF STATES STEEL: Additional Noteholders Appointed
The United States Bankruptcy Administrator appoints Ronald E.
Bew, 5208 Fox Ridge Road, Roanoke, Virginia 24014 to the Official
Committee of Noteholders of Gulf States Steel, Inc. of Alabama

HEDSTROM: Moody's Lowers Debt Ratings
Approximately $330 Million of Long-Term Debt Affected

New York, January 13, 2000 -- Moody's Investors Service lowered
the rating of Hedstrom Corporation's (Hedstrom) $110 million of
10% senior subordinated notes, due 2007, to Caa3 from B3 and
lowered the rating of its secured credit facility, which includes
$121 million of term loans and a $70 million revolving credit, to
Caa1 from B1. Concurrently, the rating of Hedstrom Holdings,
Inc.'s (Holdings) $29 million of 12% senior discount notes (face
amount $44.6 million), due 2009, was lowered to C from Caa1.
Hedstrom's senior implied rating was dropped to Caa1 from B1. The
ratings outlook remains negative. The company's senior unsecured
issuer rating is C.

The downgrades reflect Hedstrom's disappointing operating results
for the first nine months of fiscal 1999, especially the third
quarter ended September 30th. Based on its year-to-date
performance, the company's full-year earnings will likely fall
substantially short of original expectations. Weak sales,
profitability and cash flow, combined with a heavy debt burden,
continues to raise concerns over the company's ongoing ability to
meet its debt service obligations in a timely fashion.

In addition, liquidity concerns have been heightened as result of
the company's poor cash flow and the recent announcement that it
may not be able to meet the fourth quarter 1999 financial
covenants contained in its bank credit agreement. The latter is
especially concerning due to the fact that Hedstrom entered into
its Fifth Amendment to its secured credit facility on September
30, 1999. This amendment provided for less restrictive financial
covenants for the third and fourth quarters. Although Moody's
believes some covenant relief will be provided for the fourth
quarter, there are questions concerning the company's ability to
borrow under the secured credit facility in the future, the
amount available to be borrowed, as well as the company's ongoing
ability to meet the financial covenants contained in its bank
credit agreement. The company had no unused borrowing
availability as of September 30, 1999; however, its cash balance
was nearly $15 million. Unused availability was approximately $8
million at December 31, 1999.

For the third quarter ended September 30, 1999, Hedstrom reported
an 11% drop in sales to $57 million from $64 million in the third
quarter 1998. Sales from the company's Montreal Division, which
accounted for approximately 20% of total sales in 1998 and
principally manufacturers and markets art and crafts, game
tables, and battery-operated ride-on vehicles, declined 30%
period over period. The Bedford (outdoor gym sets and activity
products) and ERO (licensed indoor sleeping bags, play tents and
wall decorations) Divisions, which accounted for 36% and 24% of
1998 sales, respectively, also reported declining sales in the
quarter. Among other things, unfavorable product sales mix,
negative manufacturing variances, close out sales of certain
products, and high material costs and employee-related expenses,
all contributed to substantial declines in third quarter gross
profit and operating income (EBIT). Third quarter 1999 EBITDA of
approximately $700 thousand failed to cover total interest
expense of $9 million. LTM EBITDA of approximately $33 million
($25 million of EBITA) covered Hedstrom's interest expense a mere
1.1 times (.9 times EBITA), while Holdings' interest expense was
covered slightly less than 1 times (.7 times EBITA).

The $29 million of senior discount notes at Holdings commence
cash interest payments on June 1, 2002. Thus, Moody's has
heightened its focus on the consolidated financial position of
Hedstrom and its parent.

Total consolidated debt at Holdings and Hedstrom was
approximately $324 million at September 30, 1999, which was
approximately the same as the company's LTM sales. Outstandings
under the secured credit facility was approximately $175 million,
or 54% of total funded debt. Based on LTM EBITDA of $33 million,
Holdings' leverage is very high at nearly 10 times (13 times
EBITA) while Hedstrom's is approximately 9 times (12 times
EBITA). The company's balance sheet is weakened by $185 million
of goodwill, which represents almost 50% of its total assets, as
well as high inventory and negative retained earnings. LTM EBITA
return on assets was a low 6%.

Although Hedstrom's operating performance was showing some
improvement during the first and second quarters of 1999, its
extremely weak third quarter operating results has renewed
Moody's concerns over the company's ability to generate positive
earnings and sufficient cash flow to meet its debt obligations.
Also, with nearly 50% of its sales to its top four accounts, Wal-
Mart, Toys R Us, K-Mart and Target, the company has significant
revenue concentration risk. Hedstrom reported net losses in
fiscal 1998 and 1996.

Notwithstanding an improvement in the company's cash flow, its
debt may ultimately need to be restructured. The next coupon
payment on the senior subordinated notes is due on June 1, 2000.

Headquartered in Mount Prospect, Illinois, Hedstrom Corporation
is a leading North American manufacturer and marketer of
children's leisure and activity products. Its offerings include,
among other things, outdoor gym sets, wood gym kits and slides,
spring horses, playballs, arts and crafts kits, game tables and
licensed indoor sleeping bags, play tents and wall decorations.

INTERNATIONAL HERITAGE: $1.48M Judgement Against Former Officer
A judge entered a $1.48 million default judgment against Larry G.
Smith, an International Heritage Inc. officer accused of
participating in one of the largest pyramid schemes ever, a
Securities and Exchange Commission lawyer said today.

Smith's whereabouts are unknown, Bill Hicks, an attorney at the
SEC's Atlanta office, said.  The SEC asked a federal judge to
issue the default judgment for restitution and fines when Smith
dropped from sight, said Hicks.

Hicks said Smith was the last defendant in the SEC's case against
Raleigh-based IHI. Atlanta U.S. District Judge Richard W. Story
had ordered him to pay back $1.37 million and pay a fine of

Last August, Claude W. Savage of Charlotte, who founded IHI with
Smith and Stan Van Etten, agreed to pay $50,000 to settle civil
fraud charges filed by the SEC.

Van Etten settled the SEC's complaint against him in June by
paying $150,000 and surrendering his legal claim to $3.5 million
in cash he had put toward a bond IHI posted last year.

None of the former IHI officers admitted wrongdoing.

IHI, which has closed, filed for Chapter 11 bankruptcy

The SEC reached agreement in June on its complaint against IHI.
The complaint, filed in March 1998 in Atlanta, alleged IHI
defrauded investors and generated more than $150 million in
revenue by promoting merchandise with snob appeal, but said it
profited mostly by drawing new entrants.

About 12,600 creditors initially filed claims against IHI
totaling more than $30 million.

JUST FOR FEET: Announces Third Quarter Sales
Just For Feet, Inc. announced consolidated net sales of
$246,570,000 for the third quarter ended October 30, 1999,
representing a 9.1% increase over the third quarter consolidated
net sales in the prior year of $226,008,000.  For the nine months
ended October 30, 1999, consolidated net sales were $693,323,000,
an increase of 25.3% over consolidated net sales of $553,258,000
for the first nine months of the prior year.

Just For Feet, Inc.'s consolidated comparable store sales for the
third quarter of the current year declined 4.7%, as compared to
an increase of 3.1% for the third quarter of the prior year.
Comparable store sales in the superstore division declined 3.2%
for the third quarter of the current year as compared to the
third quarter of the prior year.  Comparable store sales in the
specialty store division declined 14.6% for the third quarter of
the current year as compared to the third quarter of the prior
year.  For the first nine months of this year, the Company's
consolidated comparable store sales declined 0.7%, as compared to
an increase of 2.8% in consolidated comparable store sales
for the first nine months of the prior year.  There were 94
superstores and 70 specialty stores (which reduced from 118
specialty stores on October 3, 1999, in anticipation of the
planned liquidation of certain specialty stores discussed
below) in the comparable store sales base at October 30, 1999.

As previously announced, on November 4, 1999, the Company filed a
petition for relief under Chapter 11 of the Bankruptcy Code.  The
sales information presented above does not reflect the closure
and liquidation of many of the Company's stores, as discussed
below, which process was commenced after the end of the third
quarter.  As a result, these sales numbers are not indicative of
the current status of the Company's business.  In addition, the
Company previously announced that Deloitte & Touche LLP had
resigned as the Company's independent auditors.  The Company is
continuing its search for a new auditing firm.  The Company
expects to make major adjustments to its financial statements
that will have a significant negative impact on the Company's
third quarter operating results due in part to the bankruptcy
filing.  The Company does not intend to report operating results
for the third quarter or the fiscal year ending January 29, 2000
until a new auditor has been engaged and it has reviewed such
results.  In addition to the adjustments resulting from the
bankruptcy filing, operating results for the third quarter and
the fiscal year have been and will be negatively impacted by
declining gross margins resulting from the inventory liquidation
initiative and the overall decrease in comparable store sales.

In September 1999, the Company announced a moratorium on the
signing of new store leases while it evaluated the profitability
of all locations.  On October 27, 1999, the Company announced
that it planned to close 85 stores from the specialty store
division, operated as Athletic Attic, Athletic Lady and Imperial
Sports stores.  On November 24, 1999, the Company entered into an
agreement with Universal Capital Group to liquidate the inventory
of 37 of the Company's superstores (26 of which were former
Sneaker Stadium Stores acquired by the Company in July 1998 and
converted to the Just For Feet format) and elected to close the
two superstores located in Puerto Rico in a Company- operated
liquidation.  These store closures will take place in controlled
liquidation processes over the next three to four months and will
leave 113 superstores, 87 specialty stores and the web site in the Just for Feet family.  

On November 8, 1999, the Company entered into a Debtor-In-
Possession financing arrangement (the "DIP Agreement") with Bank
of America through its Business Credit group.  Borrowings under
this agreement are limited to the lesser of $200.0 million or a
calculated borrowing base that is a percentage of eligible
inventory as defined in the agreement.  As a result of the
planned inventory liquidations and the store closings discussed
above, the Company's eligible inventory has been greatly reduced,
thereby reducing the maximum borrowing base under the DIP
Agreement.  This decreased availability has resulted in a
critical cash flow situation for the Company and the possibility
that cash on hand, cash generated from operations and funds
available under the DIP Agreement will not be sufficient to meet
the current obligations of the Company, which include, but are
not limited to, the purchase of new product for the remaining

As previously announced, in September 1999, the Company engaged
Wasserstein, Perella & Co. to evaluate strategic alternatives
available to the Company. Wasserstein Perella has evaluated
various alternatives over the past five months and continues to
do so.  Among the alternatives presently being considered by
the Company and Wasserstein Perella are the sale of the Company
or certain of its assets or the liquidation of the Company.  The
Company has received indications of interest with respect to the
sale of all and certain of the Company's assets.  The Company
does not anticipate that either of the alternatives presently
being considered will result in the holders of the Company's
common stock realizing any value for those holdings.

On January 7, 2000, the Company's common stock ceased trading on
the Nasdaq Stock Market.  The common stock may continue to trade
in the over-the-counter market and real time quotations may
become available on the OTC Bulletin Board if any of the
Company's market makers file the appropriate forms and the OTC
Bulletin Board authorizes such quotation.

The Company has not filed its Quarterly Report on Form 10-Q for
the quarter ending October 30, 1999 and there is no assurance as
to when or whether the Company will file such report.

Following the filing of the Company's bankruptcy petition, three
separate lawsuits were filed against various current and former
members of the Board of Directors, current and former officers of
the Company, the Company's former auditors and various other
parties.  The lawsuits, which are currently pending in the United
States District Court for the Northern District of Alabama, each
contain different allegations generally including violations of
Section 10(b) of the Securities Exchange Act of 1934 (the "
Exchange Act") and Rule 10b-5 promulgated thereunder, Section
20(a) of the Exchange Act, professional negligence, insider
trading, breach of fiduciary duty, common law fraud and deceit.

The Company believes that each of the named defendants denies the
allegations and intends to vigorously defend himself.

In addition, the Company is aware of an investigation commenced
by the Alabama Securities Commission, which has subpoenaed
documents from the Company and its former auditors.  The Company
has not been informed of the subject matter or scope of the

Just For Feet, Inc. operates both large format superstores and
smaller specialty stores that specialize in brand-name athletic
and outdoor footwear and apparel.  The Just For Feet superstores
feature a full line of sports related apparel, a high level of
customer service and a distinctive combination of entertainment
elements creating an exciting shopping experience.

KAMPEN & ASSOC: Motion For Relief From Stay
Shoalwater Bay Indian Tribe d/b/a Cascade Land Depository seek
relief from the stay to enable it to proceed with foreclosure of
certain real property belonging to the debtor.  Shoalwater Bay
Indian Tribe is the holder of a Deed of Trust securing a
Promissory Note executed by the debtor in favor of the Tribe for
the principal amount of $1.55 million with interest.  The Note
fully matured on May 1, 1998 and the debtor failed to make
payment.    The Tribe seeks to conduct the foreclosure sale on
March 3, 2000.

LAMONTS: Promotes E.H. Bulen to President
Lamonts Apparel, Inc. (OTCBB:LMNTE), which operates 38 casual
lifestyle and apparel stores in five Northwestern states,
announced today that its board of directors had approved the
appointment of E.H. Bulen, executive vice president and general
merchandise manager, to president of Lamonts, effective
immediately. Alan Schlesinger will continue to serve as chairman
of the board. Mr. Bulen, age 49, will be responsible for all

"Ed has been part of our team for the past four years, and his
talents have been underutilized," Mr. Schlesinger stated. "We
need a more strategic focus in our merchandising, and Ed is the
right person for the job. I will continue to maintain a
leadership role in the company with an emphasis on short- and
long-range strategic planning."

Mr. Bulen has a 24-year career in retail merchandising and an
industry reputation in accessories, men's wear, and children's
wear. Prior to joining Lamonts in 1996, Mr. Bulen served as vice
president of retailing for VANS, Inc. in Southern California with
responsibility for managing 80 retail footwear and accessories
stores. He also spent 17 years with The May Company-California,
beginning as an area sales manager and rising to the position of
senior vice president and general merchandise manager. Mr. Bulen
holds an MBA degree and resides in Bellevue, Wash. with his

Founded in 1967, Lamonts Apparel, Inc. 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 as Alfred
Dunner, Byer of California, Jockey, Lee, Levi, Liz Claiborne,
Mikasa, OshKosh, Pacific Trail, Rafaella, and Woolrich.

Lamonts is headquartered in Kirkland, Wash. 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

LOEWEN: Motion To Sell Undeveloped Real Property in Palm Beach
The Debtors ask the Court's approval to sell 37.33 acres of
undeveloped real property in Palm Beach County, Florida, for
$1,000,000 less a $60,000 broker commission and other closing
costs.  The buyers are Thien T. Mai and Mien T. Neuyen.
(Loewen Bankruptcy News Issue 17; Bankruptcy Creditors' Service

MEDPARTNERS: Applies To Set Hearing Date For Disclosure Statement
The debtor, Medpartners Provider Network, Inc. requests that the
court schedule a hearing on or about February 24, 2000 to
consider the Disclosure Statement to accompany the Chapter 11
plan of MedPartners Provider Network, Inc. dated November 5,
1999.  The date is particularly important to the debtor due to a
Confirmation Deadline of March 31, 2000 provided for in the
Supplemental Plan Agreement.  Due to the fragile timing balance,
the debtor requests that the court set any of February 23, 24 or
25 for the Disclosure Statement hearing.
MOBILE ENERGY: Joint Motion For Approval of K-C Settlement
Mobile Energy Services Company LLC and its affiliated debtor and
the Steering Committee for the taxable bondholders and the tax
exempt bondholders jointly move the court for approval of a
settlement and compromise with Kimberly-Clark Tissue Company.

Pursuant to the settlement, Kimberly Clark Tissue Company
("KCTC") agrees to pay the debtor a settlement payment in the
amount of $3 million subject to certain adjustments.  KCTC shall
enter into a new Energy Services Agreement with the debtor.

Among other provisions, KCTC will grant the debtor an assignable
option to purchase from the existing assets constituting its pulp
mill in Mobile, Alabama, those assets necessary to operate an 800
short-ton per day pulp mill as such assets have been identified
by the debtors.

KCTC will convey and grant certain property interests, including
rights of way to be used to construct and operate the Cogen

The parties agree that on or before February 29, 2000, the
property conveyances shall be consummated; On or before July 31,
2000, the debtors shall file a plan of reorganization.

Mobile Energy's revenue was estimated at $84.6 million in 1997,
the last year for which figures are available

NEXTWAVE: Says FCC Rejects $4.3 Billion Payment
According to NextWave Telecom, the actions taken by the FCC,
purporting to revoke licenses granted to NextWave and seeking to
put these licenses up for re-auction in July 2000, are null and
void under the bankruptcy laws. In purporting to take this
action, the FCC inexplicably rejected NextWave's written offer to
make an immediate payment to the FCC of$4.3 billion. This
represents full payment of NextWave's bid in the FCC's auctions,
a bid that the FCC had earlier accepted. The FCC thus abandons
the largest payment ever tendered for any spectrum licenses and
an opportunity to provide the benefit of these licenses to the
American public immediately. Unfortunately, the action taken by
the FCC will inevitably lead to lengthy delays in the utilization
of this PCS spectrum and will entail further rounds of time-
consuming litigation.

NextWave Telecom has done everything in its power to avert
further litigation with the FCC and place its licenses into
productive use immediately. The FCC has repeatedly acknowledged
that NextWave's payment obligations are suspended by operation of
the Bankruptcy Code.

The FCC's action is a radical departure from established law and
agency conduct, and an unwarranted blow to the reasonable
reliance that the Company and its creditors placed on the
agency's own statements in various courts.

The FCC has violated the legal rights of NextWave and its
creditors and investors. The Commission's action forces the
Company to take all legal steps necessary to protect its rights
and those of the many people and companies who have invested in
its licenses. The Company has over 3000 creditors and
shareholders, the majority of whom are small businesses and
individuals, and it intends to defend their assets against
arbitrary and illegal actions by others, including the FCC.

In addition to NextWave, there are approximately twenty other
small business C-block auction participants (along with all of
their creditors and shareholders) that are in various bankruptcy
courts across the nation fighting a similar battle. They will
also be severely impacted and irreparably harmed by this
Commission action. The ultimate price paid by these small
businesses, which were invited by the United States Congress and
the FCC to participate in the federal auctions, is incalculable.

NextWave Offers to Make Full Payment in Single Lump Sum

On December 16, 1999, with the overwhelming support of its
creditors and equity investors, NextWave filed a modified plan of
reorganization with the Bankruptcy Court which provided full
payment of its bid price to the FCC, together with all accrued
interest to date, under the terms of the FCC's installment
payment notes.

Earlier this week, in an effort to avert any legitimate rationale
for further litigation, the Company proposed to satisfy its
entire financial obligation to the FCC by making a lump sum
payment of over$4.3 billion to the U.S. Treasury upon
confirmation of its modified plan, currently scheduled for
January 21, 2000. That payment, together with the $505 million of
license payments already made by the Company, would total in
excess of $4.8 billion and would be the largest payment ever made
by a company to the United States government for any spectrum
auction held to date. In addition to the full payment, NextWave
has offered to provide $1 billion in free internet access to
underserved populations across the United States.

Unaccountably, the FCC rejected that proposal, even though it
would have served the public interest by ensuring prompt
utilization of the PCS spectrum covered by NextWave's licenses
while providing for an immediate and complete payment in full of
any amounts due. Under the FCC rules, NextWave had no obligation
to pay any of the principal amounts of the C-block notes until
the first quarter of 2003.

Throughout NextWave's reorganization proceeding and other C-block
litigation, the FCC's position has always been the same - the FCC
must be paid in full or else its "auction integrity" will suffer.
NextWave's offer to immediately pay the FCC the full amount of
its bid price under the modified plan both protects the integrity
of the auction process, and puts the C, D, E and F block licenses
held by NextWave to immediate commercial use. Against this
backdrop, the FCC's rejection of NextWave's offer to immediately
pay the FCC the full amount of its bid price is inexplicable and

In June of 1998, NextWave sought protection under the bankruptcy
code to reorganize its business. Consistent with the purposes of
the bankruptcy laws, which are designed to facilitate and support
the rehabilitation of businesses, NextWave was able to prepare
and finance a plan of reorganization that paid the FCC and its
creditors in full and would put its spectrum into immediate use
for the public benefit. The Commission's rejection of NextWave's
tender of $4.3 billion is contrary to law, and amounts to an
impermissible attempt to punish the Company for asserting the
statutory rights made available to it by Congress.

The FCC acknowledged early on that NextWave has enjoyed
"bankruptcy protection from collection of C-block license
payments pending reorganization of its business affairs." This
position was reiterated numerous times in pleadings throughout
NextWave's Chapter 11 proceedings. Now, eighteen months after
giving NextWave, its creditors and investors such assurances, the
FCC seeks to ignore its previously acknowledged application of
the bankruptcy laws in order to revoke and reauction the
Company's licenses, alleging that Next Wave missed interest
payments while in bankruptcy. The FCC's action yesterday is
untenable under the bankruptcy laws and unsupported by any
rulings in the current proceedings between the Company and the
Commission. As the FCC well knows, numerous provisions of the
federal Bankruptcy Code, the Communications Act, and the
Administrative Procedure Act prevent the Commission from
rescinding or reclaiming NextWave's licenses in the manner it

The FCC had also acknowledged throughout all the court
proceedings that NextWave never defaulted on any of its payments
to the FCC. NextWave paid $505 million in full compliance with
its initial payment obligations, and under the Bankruptcy Code
NextWave's Chapter 11 filing had the effect of automatically
staying any further payment obligations during the pendency of
the reorganization proceeding. The FCC now asserts that the
automatic stay of the Bankruptcy Court no longer applies to it,
but federal law does not authorize such a dramatic departure from
fundamental bankruptcy principles. Moreover, the FCC has taken
this position without any guidance on the application of the
automatic stay from the courts. The FCC's attempted action seeks
to bring into question the applicability of the Bankruptcy Code
to federal agencies in general.

Companies in other regulated industries, such as the airlines
industry, have sought protection under the bankruptcy laws while
they reorganize, later emerging as stronger competitors. These
companies were not deterred or intimidated by federal regulators
from exercising their statutorily provided rights, and consumers
have benefited.

NextWave's plan of reorganization is supported by $5 billion of
new capital, $4.3 billion of which would be paid to the
government, and vendor financing commitments that support the
immediate build-out of the network. Confirmation of this plan was
set for the end of January, enabling the immediate deployment of
a new wireless network. Contrary to the implications of the FCC,
NextWave's reorganization and business plan complies fully with
the Commission's rules and timetable for build out of the
spectrum. Over $100 million has been invested to date toward the
build out of NextWave's network and activities have continued at
a pace well within the requirements of the FCC's rules.

The FCC's efforts to block the commercialization of NextWave's
licenses and its election to pursue unlawful actions to punish
NextWave for exercising statutorily granted rights are at odds
with federal laws and with the Commission's own statements
regarding the need for prompt utilization of NextWave's spectrum.
In addition to thwarting the policy objectives mandated by
Congress, the FCC's action callously harms other creditors and
the investors, including numerous private and state pension
funds, in a manner that the bankruptcy laws were specifically
designed to prevent. We are confident that the courts will
respond appropriately to the FCC's unlawful action and that
NextWave's rights will be vindicated.

PICO MACOM INC: Last Date To File Proofs of Claim
The US Bankruptcy Court for the Central District of California,
Los Angeles Division, set the last date to file proofs of claim
or interest.  Any person or entity that asserts a claim against
or interest in the debtor must file a proof of claim on or before
March 1, 2000.

PSI INDUSTRIES: Motion To Sell Assets
The US Bankruptcy Court for the Southern District of Florida,
West Palm Beach Division entered an order finding that the terms
and conditions of the Asset Purchase Agreement are approved, and
the debtor is authorized to sell the assets to M Group USA Inc.

SERVICE CORP: To Lay Off 1,141 Employees
13-Jan-2000-HOUSTON (AP) - Service Corp. International said it
will lay off 1,141 employees and take a $273 million
restructuring charge, causing the world's largest funeral and
cemetery company to miss its earnings estimate for the current

Houston-based SCI said it will fall short of its previous
earnings estimate of 14 to 18 cents per share for its fiscal
fourth quarter. Quarterly and fiscal year-end results are due out
in February.

SCI's stock has lost about four-fifths of its value in the past
12 months after a series of earnings warnings and shortfalls.
Analysts say SCI and other funeral companies expanded too
aggressively by buying up independent operations.

The layoffs, announced Wednesday night, will cost SCI $151
million in severance pay.

Of the workers to be fired, 385 are based in North America. Many
of them are former owners of independent funeral homes and
cemeteries bought out by the company. They had been kept on as
employees, hired as consultants or signed to noncompete

Another 715 international operations employees will be released,
many of those from the company's offices in France. The company
said the corporate office in Houston will lose 33 workers, and
eight executives will be laid off.

SCI plans to sell about 50 funeral homes or cemeteries and
approximately 45 parcels of undeveloped cemetery property or
excess land. The reduction of assets and loans to their estimated
value, lease terminations and technology costs account for the
rest of the restructuring costs.

In addition to the $273 million restructuring charge, SCI said it
would post other one-time charges of about $39 million. The
company said the changes would result in before-tax savings of
$45 to $50 million this year and $60 to $65 million a year after

SHOE CORP: Seeks Approval of Agreement with ZCMI and The May Co.
Shoe Corporation of America, Inc. and SCOA License, Inc., debtors
seek approval of SCOA's and SLI's execution of a Memorandum
Agreement with Zion's Co-Operative Mercantile Institution
("ZCMI")and The May Department Stores Company for the sale of
certain fixtures and equipment and the compromise and settlement
of claims between the parties.

The debtors shall cease operations of the ZCMI Shoe Departments
as of the close of business on January 15, 2000.  SCOA Will sell
to May and May will purchase all fixtures for $591,055 and all
supplies for $37,777.

In exchange for the sale of the fixtures and supplies, SCOA will
receive total cash consideration of $628,832.  This agreement
represents a compromise of claims, and the debtors seek court
approval of the agreement.

SYSTEMSOFT CORP: Notice of Hearing On Disclosure Statement
A hearing will be held on January 21, 2000 at 9:30 AM at the
Harold Donohue Federal Building and Courthouse, 595 Main Street,
Worcester in Courtroom 3.  The purpose of the hearing will be to
consider and rule on the adequacy of the information contained in
the Second Amended Disclosure statement of Systemsoft

THORN APPLE: Private Sale of Real Estate
When the debtor sold substantially all of its assets to IBP, Inc.
in August 1999, it did not sell the parcels of real estate
related to the Frederick Fresh Meats plant located in Detroit,
Michigan.  The highest offer it has received for the real estate
was from Metropolitan Marketplace for $1.5 million.  The debtor
states that there is a sound business reason for the sale of the
real estate and the price to be received was the result of arms
length good faith negotiations on behalf of the debtor.  The
debtor now seeks court approval of the sale.

TULTEX CORP: US Bank Seeks Adequate Protection
US Bank NA in its capacity as Indenture Trustee, as the debtors'
largest creditor, states that it is entitled to have its
interests protected and not to bear disproportionately the risk
that the debtors' reorganization will fail.  According to the
Bank, the DIP order does not adequately protect the Trustee's
interest in its collateral in that it fails to protect the
Trustee from the certain decline in the value of such collateral.  
The equipment has and will continue to depreciate and the real
estate is declining in value.  The Trustee seeks further adequate
protection in the Collateral.  The Trustee states that it is
clearly entitled to adequate protection, including periodic
payments.  The value of the Noteholder Priority Collateral is
declining and there is no adequate provision in the DIP Order to
protect the Trustee from the economic risk.  Further, the Bank
states that the Noteholders' junior lien on the remaining
Collateral is also being eroded as increasing amounts of debt are
piled on top of the Noteholders' lien and the assets of the
estates are depleted toward the end of reducing the Banks' debt.  

The Trustee seeks adequate protection payments, payment of
interest, professionals' fees, payment of proceeds of notheholder
priority collateral, a replacement lien for Noteholders, and
maintenance of collateral, reporting of notices, access to
collateral, obligations in respect of noteholder priority
collateral and the right to exercise remedies.

UNIFORET: Moody's Downgrades Ratings
Approximately $125.0 Million of Debt Securities Affected.

New York, January 13, 2000 -- Moody's Investors Service lowered
the debt ratings on Uniforet's senior secured notes to Caa1 from
B3. The ratings downgrade reflects the worsening liquidity
position of the company, exacerbated by ongoing losses stemming
from the high operating cost of one of the company's major
facilities and a weak pricing environment in uncoated groundwood
and lumber.

Ratings downgraded are:

Backed Senior secured notes, from B3 to Caa1

Senior implied rating: from B3 to Caa1

Issuer rating: from Caa2 to Caa3

Low groundwood paper prices and poor financial performance at the
company's Tripap mill have contributed to a weakening in results
and the use of most of the Tripap available liquidity. Two of
Uniforet's four uncoated groundwood machines at its Tripap mill
have been shut down for over six months due to a weak order file.
This has caused a related buildup in inventory at the Port
Cartier pulp mill, resulting in utilization of most of the
availability under the company's existing credit facilities. The
company has engaged Tembec as a sales agent for its market pulp,
but progress has been slow, and the company has not been able to
capitalize on higher pulp prices.

Despite some recent positive movement in groundwood paper prices,
we believe the company may have difficulty in meeting its
scheduled April coupon payment. The company has announced that it
has engaged Banc of America Securities LLC as a financial
advisor. However, because of the company's current weak
liquidity, the company may be constrained in building its winter
log inventory, which could restrict operations and cash
generation in the spring.

Uniforet is a Montreal, Quebec based manufacturer of lumber,
pulp, and groundwood papers.

USTEL: Completes Asset Sale to Unity Communications, Inc.
UStel, Inc. (OTC:USTL) (OTC:USTLW) UStel, Inc. has completed the
sale of its cellular retail telecommunications assets.

Under the terms of the Asset Purchase Agreement, Unity
Communications, Inc. purchased all of the cellular retail
telecommunications assets of UStel for approximately $1.9 million
in cash, subject to certain adjustments.

The sale of the assets to Unity, completes UStel's efforts to
sell its operating assets which are subject to the protection of
Chapter 11 of the United States Bankruptcy Code. All of the
proceeds from the sale of such assets will be applied toward
partial payment of a term loan, revolving credit facility,
equipment loan and debtor-in-possession loan from UStel's secured
lenders, Goldman Sachs Credit Partners L.P. and Coast Business
Credit. As a result, the Company believes that no proceeds from
the sale to Unity will be available to satisfy claims of the
unsecured creditors and shareholders.

UStel continues to evaluate whether any other claims either exist
or should be pursued on behalf of the unsecured creditors and
shareholders. UStel will continue the process of winding down its
operations and at an appropriate time may consider converting the
Bankruptcy case into a Chapter 7 liquidation.


A listing of Meetings, Conferences and Seminars appears each
Tuesday in the TCR.

Bond pricing, appearing each Friday, is supplied by DLS Capital
Partners, Dallas, Texas.


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, and Beard
Group, Inc., Washington, DC.  Debra Brennan, Yvonne L. Metzler,
Edem Alfeche and Ronald Ladia, Editors.

Copyright 2000.  All rights reserved.  ISSN 1520-9474.

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