TCR_Public/000316.MBX   T R O U B L E D   C O M P A N Y   R E P O R T E R

     Thursday, March 16, 2000, Vol. 4, No. 53  
                            
                  Headlines

ACME METALS: Alpha Tube Seeks To Extend Exclusivity
A.G. FINANCIAL: Files For Chapter 11 Bankruptcy
AMERICAN MOBILE SATELLITE: Motorola Sells Shares
CLIMACHEM: Amends Revolving Credit Facility
COSTILLA ENERGY: Disclosure Statement With Respect To Plan

FILENE'S BASEMENT: Shareholders Report Divestiture
FORCENERGY: Lehman Brothers Reports Holdings
GANTOS: To Conduct Store Closing Sales; Appoints Kahn Consulting
GENTIVA HEALTH: Moody's Assigns Ratings; Outlook Negative
GEO: Reports Major Oil and Asphalt Reserves, Lawsuit Settlement

HOMEMAKER INDUSTRIES: To Sell Substantially All of Its Assets
HOUSING RETAILER: Seeks Appointment of Trustee
INTERACTIVE NETWORK: Employees Marc Lumer & Co as Auditors
JUMBOSPORTS: Orders Authorize Sales
JUMBOSPORTS: Seeks To Sell Real Property in Dallas, Texas

JUMBOSPORTS: Seeks To Sell Real Property in Lafeyette, Louisiana
KCS ENERGY: Committee Taps Saul, Ewing as Co-counsel
LAROCHE INDUSTRIES: To Miss Bond Interest Payment
MASSACHUSETTS HEAVY: Files Chapter 11 Bankruptcy
MERRY GO ROUND: Ernst & Young Hires Adversary

RAINTREE: Omega Takes Possesion of Nursing Homes
SHONEY INC.: Moody's Lowers Debt Ratings; Outlook Negative
SUBMICRON: Liquidating Plan of Reorganization Approved
TURBODYNE: Reports Further Sale of Light Metals Division
VENCOR: Justice Department Claims $1 Billion Owed

WORLDCORP: InteliData Announces WorldCorp No Longer Holds Shares
WORLDCORP: Memorandum Regarding Joint Liquidating Plan

                  *********

ACME METALS: Alpha Tube Seeks To Extend Exclusivity
---------------------------------------------------
On March 1, 2000, Alpha Tube Corporation, debtor, filed a motion
for an order further extending its exclusive periods within which
to file a plan of reorganization and solicit acceptances thereto
to and including May 30, 2000 and July 31, 2000, respectively.
A hearing to consider the motion will be held on March 16, 2000
at 3:30 PM.

The reorganization planning of the Acme Debtors and Alpha Tube is
closely intertwined as a result of the contingent claims asserted
against Alpha Tube's estate.  Unless there is a further extension
of the Alpha Tube's Exclusive periods, the Acme Debtors will not
have a meaningful opportunity to utilize fully their previously
extended exclusive periods.


A.G. FINANCIAL: Files For Chapter 11 Bankruptcy
-----------------------------------------------
A.G. Financial Service Center Inc. has filed for Chapter 11
bankruptcy protection in the Southern District of Indiana.

Between 1992 and 1996, this subsidiary of Houston-based American
General Corp., provided credit card financing for the purchase of
more than 240,000 television satellite dishes in numerous states.  
Since 1994, approximately 600 lawsuits and attorney general
investigations have been filed against AG Financial for damages
relating to the satellite financing business. The litigation
involves allegations of consumer fraud and the failure to comply
with truth in lending laws.

The Chapter 11 filing was prompted by a $168 million judgment,
including $167.5 million in punitive damages, entered by a
Mississippi state court against AG Financial in May 1999, on
behalf of 27 consumers. Following entry of the judgment, AG
Financial perfected its appeal, sold substantially all of its
assets to a related company for 7 million, and filed Chapter 11.
The schedules include the 240,000 consumers that financed their
satellite purchases through the debtor.

Immediately after the Chapter 11 filing, Judge Basih H. Lorch III
approved the company's motion to enjoin all pending litigation
against the debtor, its parent company and affiliates. The
injunction remains in place while the parties attempt to
negotiate a consensual plan that resolves the litigation.

John Ames and Paul Porter of Greenebaum, Doll & McDonald in
Louisville, Ind., represent the debtor. Bettina Whyte, of Jay
Alix & Associates, is serving as the debtor's president,
treasurer and chairman of the board. Josiah Daniel III of
Vinson & Elkins in Dallas represents American General. David
Kleiman and James Moloy of Dann, Pecar, Newman & Kleiman in
Indianapolis represent the Official Unsecured Creditors'
Committee. Kevin Dempsey of Indianapolis is the Assistant
U.S. Trustee.


AMERICAN MOBILE SATELLITE: Motorola Sells Shares
------------------------------------------------
Motorola sold 3,000,000 shares of American Mobile Satellite
Corporation's common stock on February 29, 2000.  The sale, made
at $28. per share, was through a block trade in the open market,
on the Nasdaq Stock Market by a broker.  In connection with the
sale of shares effected on February 29, 2000 Motorola has agreed
with the broker who effected the sale not to dispose of or hedge
any of its shares during the period from February 29, 2000 and
continuing through the date 60 days after February 29, 2000,
except with the prior written consent of the broker.

As a consequence of the sale Motorola no longer holds more than a
five percent interest in the company.  Motorola, Inc. now
beneficially owns  2,470,532 shares of the company's common
stock, representing 4.99% of the outstanding common stock of
American Mobile Satellite.  Motorola does hold sole power to
vote, or direct the vote of, dispose of, or direct the
disposition of, the remaining 2,470,532 shares.


CLIMACHEM: Amends Revolving Credit Facility
-------------------------------------------
On March 1, 2000, ClimaChem, Inc. amended its revolving credit
facility. The company had previously fallen below certain
adjusted tangible net worth and debt ratio requirements under the
Credit Facility between the lender and certain of the company's
subsidiaries.  ClimaChem's lender agreed to forbear from
exercising its rights under the Credit Facility arising as a
result of the financial covenants pending the amendment of the
Credit Facility.

The March 1, 2000, amendments to the Credit Facility eliminated
the company's failure to meet the financial covenants under the
Credit Facility.  The amendment, among other things, increased
the annual interest rate applicable to the company's revolving
credit facility and letters of credit by one percent and reduced
the company's net worth and interest coverage ratios.  The
amendment further provides that if new financial covenants for
the fiscal year beginning in January 2001 are not agreed to
by the lender by October 1, 2000, the Credit Facility will
terminate automatically on December 31, 2000.


COSTILLA ENERGY: Disclosure Statement With Respect To Plan
----------------------------------------------------------
The debtor, Costilla Energy, Inc., has filed a Disclosure
Statement with respect to Debtor's plan of reorganization dated
February 29, 2000.

In general terms, the plan calls for the continued existence of
Costilla Energy, Inc., with new ownership and an improved balance
sheet.  Under the plan, all existing common and preferred stock
of the debtor, including any options and warrants to buy such
stock are canceled.  New common stock in the reorganized debtor
will be issued to the general unsecured creditors of the debtor.  
As such, an estimated $189 million of unsecured debt will be
eliminated from the debtor's balance sheet.  The debtor will also
be relieved of its ongoing obligations to pay interest and
principal upon such debt.

Under the terms of the plan, the debtor's senior secured debt
will either be replaced by new exit financing or restructured.  
The debtor is currently seeking such new exit financing, however,
the debtor cannot make any assurances that it will be obtained.  
In any event, the debtor expects to emerge with approximately $50
million of senior secured debt.

The debtor's financial projections reflect an anticipated level
of activity by the Reorganized Debtor that will maintain its
properties and business, without significant growth or
development.  It is anticipated that the reorganized debtor will
conduct a limited drilling and development program and
participate in certain third-party proposals under joint
operating agreements to maintain certain leasehold positions and
avoid non-consent penalties.  The loss of such leases due to a
failure to drill and produce in accordance with the terms of the
lease, or the penalties for failing to participate in such third-
party proposals may have a material adverse effect on the
reorganized debtor.

The debtor continues to seek opportunities to merge its business
or sell assets to obtain optimal value.  It is anticipated that
he business plan of the reorganized debtor will focus on these
efforts to merge its business or sell its assets, subject to
complying with the terms and conditions of applicable loan
agreements and normal corporate governance.


FILENE'S BASEMENT: Shareholders Report Divestiture
--------------------------------------------------
FMR Corp., Edward C. Johnson 3d and Abigail P. Johnson no longer
hold stock in Filenes Basement Corporation, having divested
themselves of their former holdings.


FORCENERGY: Lehman Brothers Reports Holdings
--------------------------------------------
Lehman Brothers Holdings Inc. is reporting the beneficial
ownership of 4,643,298 shares of the common stock of Forcenergy
Inc.  The subsidiary which acquired the security being reported
on by Lehman Brothers Holdings Inc. (the parent company) is
Lehman Brothers Inc., a Broker/Dealer.  Sole voting and
dispositive powers rest with the ownership of the stock, which
represents 19.4% of the outstanding common stock of Forcenergy.


GANTOS: To Conduct Store Closing Sales; Appoints Kahn Consulting
----------------------------------------------------------------
Gantos, Inc. announced that it has received approval from the
Bankruptcy Court to sell all of its store inventories and other
store assets and to enter into an agreement with Gordon Brothers
Retail Partners, LLC and Ozer Group, LLC to conduct the store
closing sales.  Despite its efforts to reorganize, the Company
was unable to satisfy the terms and conditions of its debtor-in-
possession (DIP) credit facility.  As a result, the Company held
an auction to appoint agents to conduct store-closing sales as
part of their proposed liquidation of the Company.  The joint
venture composed of Gordon Brothers Retail Partners, LLC and the
Ozer Group LLC was the successful bidder at the auction.

The store closing sales have begun and are expected to continue
for approximately eight weeks.  As the sales conclude in each
store, the Company expects to close the store.  The Company
expects to wind up its business under the supervision of the
bankruptcy court under Chapter 11 of the U.S. Bankruptcy Code
with the assistance of various professionals approved by the
bankruptcy court.

Effective March 9, 2000, the Bankruptcy Court approved the
retention of Kahn Consulting, Inc. (KCI) as Responsible Officer
for the Company.  The existing Gantos Senior Officers and most of
the Board of Directors have resigned.  KCI is highly experienced
in reorganization matters and the obligations of a
debtor-in-possession.  KCI's duties include winding down the
debtor, coordinating and managing the liquidating process, and
administering of the estate and day to day operations.
    
Gantos, Inc. is a specialty retailer of women's wear and
accessories.  The Company currently operates 114 stores in 24
states.


GENTIVA HEALTH: Moody's Assigns Ratings; Outlook Negative
---------------------------------------------------------
Moody's Investors Service assigned a (P)B2 rating to the senior
secured credit facility of Gentiva Health Services ("Gentiva")
and downgraded the rating of the convertible subordinated
debentures of Gentiva's wholly owned subsidiary, Quantum Health
Resources, Inc. ("Quantum"), from Ba3 to Caa1. Gentiva, formerly
the Olsten Health Services subsidiary of Olsten Corporation
("Olsten"), is being split-off into an independent, publicly
traded company in conjunction with Olsten's merger with Adecco,
S.A. The ratings affected are as follows:

Gentiva:

$150MM senior secured credit facility: (P)B2 (Prospective
rating pending review of final documentation.)

Senior implied rating: B2

Senior unsecured issuer rating: B3

Quantum:

$78.6 million convertible subordinated debentures due October
1, 2000: downgraded from Ba3 to Caa1.

The rating outlook is negative. Gentiva is a provider of home
health care and related services.

The ratings reflect uncertainty regarding the refinancing of the
Quantum subordinated debentures which mature on October 1, 2000,
Gentiva's thin operating margins and negative pro forma cash flow
from operations, and the potential for future impairment of
goodwill given the company's low returns. The ratings also
reflect the highly competitive and fragmented nature of the home
health care industry, as well as the likelihood of continued
reimbursement pressure from third party payors.

Positive factors supporting the ratings include Gentiva's
position as the leading provider of home health care services in
the U.S., the company's modest pro forma leverage, and the
favorable underlying demographics which should continue to
support the company's business, particularly its specialty
pharmaceutical services line.

Gentiva's three primary lines of business are specialty
pharmaceutical services, home care nursing, and staffing
services. Moody's notes that on a pro forma basis for the nine
months ended October 3, 1999, specialty pharmaceutical services
represented roughly 48% of total revenue and contributed $33
million in operating income, while nursing services represented
45% of revenue yet contributed an operating loss of $36 million.
Staffing services represented 7% of revenue with a modest
operating profit.

Moody's further notes that the company's accounts receivable have
increased substantially in recent periods, stemming in part from
a billing system conversion as well as growth in the slower-
paying pharmaceutical services business. As of October 3, 1999
the company's pro forma average accounts receivable days
outstanding were approximately 125, with a greater number of days
outstanding attributable to specialty pharmaceutical services and
fewer days attributable to nursing services.

Structurally, the (P)B2 rating assigned to the senior revolving
credit facility recognizes a security interest in all of the
present and future tangible and intangible personal property of
the company, other than equipment. The principle assets securing
the facility are accounts receivable, with borrowings limited to
80% of eligible receivables under a borrowing base mechanism.
While there appears to be adequate asset coverage, the rating on
the credit facility is constrained by the company's limited
financial flexibility given the pending maturity of the Quantum
debentures. The Caa1 rating on the convertible subordinated notes
of Quantum reflects their contractual subordination to all senior
debt.

Moody's will continue to monitor the company's progress in
stabilizing its capital structure following the split-off
transaction.

Gentiva Health Services, headquartered in Melville, NY, is the
largest provider of home health care services in the United
States, providing specialty pharmaceutical, nursing, and staffing
services.


GEO: Reports Major Oil and Asphalt Reserves, Lawsuit Settlement
----------------------------------------------------------------
Dennis Timpe, chairman of the board and president of Geo
Petroleum Inc. (Internet Pinksheets:GOPL), announced that
independent petroleum engineers have evaluated the company's
Oxnard Field leases in Ventura County, Calif. and reported that
they contain net proved reserves of 33.3 million barrels of oil.

They predicted that the property would yield future net revenues
of $275.8 million, with a discounted present value of $160
million, using drilling technology presently in use.

Geo plans to increase the recoverable reserves in the field by
using new technology called Steam Assisted Gravity Drainage
(SAGD). The engineering firm predicted that successful use of
this process would add reserves of 15.3 million barrels, expected
to yield future net revenues of $194.6 million with a present
value of $83 million.

Management estimates the total potential oil recovery for the
field at 48.6 million barrels of oil. Previous estimates, based
on the development of the field solely by SAGD methods, exceeded
the currently predicted levels.

Timpe estimated that capital of $18 million to $45 million,
depending on the development method employed, would be required
in order to develop Geo's holdings on 630 acres. The company will
seek this capital using a combination of project financing, joint
ventures and other investment sources.

California's need for asphalt to construct new highways has
resulted in a market expected to remain strong for the next
decade. Geo's Oxnard crude oil is excellent feed stock for
asphalt and can command a $3 per barrel premium over crude oil
prices when used for asphalt production.

Geo emerged from bankruptcy in December 1999, when it obtained
a$500,000 capital investment from TD & Associates Inc., a firm
managed by Timpe. He stated that the U.S. Bankruptcy Court on
March 9, 2000 had approved the settlement of three lawsuits
related to the bankruptcy, enabling Geo to proceed with its plans
to develop the Oxnard Field, to resume oil field waste disposal
operations, and to resume production in the Rosecrans Field in
Los Angeles County.

In the near term, Rosecrans production of light oil is expected
to yield at the rate of about $600,000 in annual net revenues.
Production can be increased as more capital becomes available to
the company. Rosecrans reserves are in addition to those stated
above, and are now being evaluated.

The low oil prices of about $6 per barrel for Oxnard crude oil in
1998, which contributed to Geo's bankruptcy, have recently
increased to more than $23 per barrel. Rosecrans oil is currently
selling for about $30 per barrel.

Timpe stated that the current expansion of oil industry activity
will result in higher revenues from Geo's commercial waste
disposal well. The company has added a second disposal well to
meet the demand, and expects it to go online during April 2000.
Geo has previously recorded gross revenues of up to $437,000
annually from its single waste disposal well.


HOMEMAKER INDUSTRIES: To Sell Substantially All of Its Assets
-------------------------------------------------------------
Homemaker Industries, Inc., a debtor and debtor in possession in
a chapter 11 case, and a manufacturer and wholesaler of rugs and
other home furnishings, today filed an application to sell
substantially all of its assets, free and clear of the claims and
liens of creditors.  The prospective buyer is a A&M, Inc., a
company formed by Arthur Miller, Homemaker's chief executive
officer, for price of not more than $7.5 million.  A hearing to
consider the application, and an auction to consider higher and
better bids will be held on April 4, 2000 at 11:00 a.m., before
the Honorable Jeffry H. Gallet, United States Bankruptcy Judge,
Alexander Hamilton United States Custom House, One Bowling Green,
Courtroom 523, New York, New York 10004.

Homemaker's largest customers include some of the leading
retailers in the country.  Its showroom is in New York City, and
its executive offices and distribution center in North
Charleston, South Carolina.  Homemaker also operates a
distribution center in Brownsville, Texas and a manufacturing
plant in Matamoros, Mexico.

The Bankruptcy Court for the Southern District of New York has
issued an order dated March 14, 2000 (the "Order to Show Cause")
approving the form, manner and notice of the Motion, approving
certain bidding procedures, i.e., fixing certain Auction
Procedures.  Copies of the Motion and its exhibits and of
the Order to Show Cause may be obtained electronically by
accessing the Court's website at:  http://www.nysb.uscourts.gov.

Bidders interested in making higher and better bids must adhere
to the Auction Procedures approved in the Order to Show Cause.  
All parties interested in making bids should contact the Debtor's
investment bankers, Harvey Tepner, Loeb Partners Corporation, 61
Broadway, New York, New York 10006, 212-483-7086, the Debtor's
counsel, Alec P. Ostrow, Esq., Salomon Green & Ostrow, P.C., 919
Third Avenue, New York, New York 10022, 212-319-8500 or the
Chambers of the Honorable Jeffry H. Gallet, United States
Bankruptcy Judge, United States Bankruptcy Court, One Bowling
Green, New York, New York 10004, 212-668-2301.


HOUSING RETAILER: Seeks Appointment of Trustee
----------------------------------------------
The debtors, Housing Retailer Holdings, Inc. and its debtor
affiliates respond to the Creditor Committee's motion for
appointment of a Chapter 11 Trustee.

The debtors claim that there is no cause for appointing a Chapter
11 Trustee.  The debtors claim that there is no fraud,
dishonesty, incompetence, or gross mismanagement and in fact the
Holding Companies have succeeded in securing post-petition
financing in order to pursue litigation claims against Ted D.
Parker and his affiliates.

The appointment of a Chapter 11 trustee is an event of default
under the terms of the DIP Financing. The Holding Companies'
estates have proceeded on course and there are no developments
which would justify the appointment of a Chapter 11 trustee.

Ted Parker Home Sales Inc. and Carolina Home Sales Inc. also
object to motion for appointment of a Chapter 11 Trustee.  
However, these debtors believe that the appointment of a chapter
7 Trustee and conversion of their cases would be in the best
interests of the estates.


INTERACTIVE NETWORK: Employes Marc Lumer & Co as Auditors
---------------------------------------------------------
On March 3, 2000, Interactive Network Inc. engaged Marc Lumer &
Company as its independent auditors and the principal accountant
to audit the company's financial statements. Prior to March 3,
Interactive Network had not engaged Lumer in any consultation.


JUMBOSPORTS: Orders Authorize Sales
----------------------------------
The debtor's motion to sell real property located in North
Charleston, South Carolina to John Derbyshire and Linda
Derbyshire was granted by the US Bankruptcy Court, Middle
District of Florida on February 28, 2000.

On February 29, 2000, the court entered an order approving the
sale of real property located in Ft. Worth, Texas to The Bruder
Company, Inc.  for $3.73 million.


JUMBOSPORTS: Seeks To Sell Real Property in Dallas, Texas
---------------------------------------------------------
The debtor, JumboSports Inc., seeks authority to sell real
property located at 3500 Preston Road, Plano, Texas to Preston
Parker Crossing Limited for a total purchase price of $3.85
Million.

The debtor has completed the going-out-of-business sale at this
location and no longer need s the real property.  The debtor
believes that the proposed sale price offered by the buyer is the
highest and best offer received, and is reasonable.    

Any competing bid for the property must be submitted no later
than March 24, 2000 and must start at $3.86 million (and all
subsequent higher bids must be in incremental increases of at
least $10,000).


JUMBOSPORTS: Seeks To Sell Real Property in Lafeyette, Louisiana
----------------------------------------------------------------
The debtor, JumboSports Inc., seeks authority to sell real
property located at 3814 Ambassador Caffery Parkway, Lafeyette,
Louisiana to Michael G. Hamner for a total purchase price of
$1.92 Million.

The debtor has completed the going-out-of-business sale at this
location and no longer need s the real property.  The debtor
believes that the proposed sale price offered by the buyer is the
highest and best offer received, and is reasonable.    

Any competing bid for the property must be submitted no later
than March 24, 2000 and must start at $1.93 million (and all
subsequent higher bids must be in incremental increases of at
least $10,000).


KCS ENERGY: Committee Taps Saul, Ewing as Co-counsel
----------------------------------------------------
The Official Committee of Unsecured Creditors of KCS Energy Inc.
seeks to retain Saul Ewing Remick & Saul LLP as co-counsel for
the Official Committee of Unsecured Creditors.

The Committee seeks to retain Saul Ewing as its co-counsel with
Dunn & Crutcher LLP.

The firm will provide the following services without duplicating
the efforts of Dunn & Crutcher LLP:

Provide legal advice with respect to the Committee's rights,
powers and duties in these cases;

The preparation on behalf of the Committee of all necessary
applications, answers, forms of orders, reports and other legal
papers;

The representation of the Committee in any and all matters
involving contests with the debtors, alleged secured creditors
and other third parties;

The negotiation of consensual plans of reorganization;

Attorneys for the firm will charge current standard hourly rates,
which range from $165 per hour for an associate to $325 per hour
for a partner.


LAROCHE INDUSTRIES: To Miss Bond Interest Payment
-------------------------------------------------
LaRoche Industries' board of directors has approved a resolution
that the company will not make the scheduled March 15, 2000 bond
interest payment of $8.3 million on its 9 1/2% Senior
Subordinated Notes due 2007, while it continues its efforts on
the development of a financial restructuring plan. The notes
provide for a grace period of 30 days in which to make the
payment.

The company has commenced and scheduled further discussions with
its bank group, Senior Subordinated noteholders and their
financial and legal advisors regarding a capital restructuring
designed to de-leverage the company.

The company's bank group continues its support of the company and
its restructuring efforts by providing continued access to an
existing credit facility and entering into a Forbearance
Agreement despite noncompliance with certain requirements of the
company's credit facility.

"We are actively negotiating with our bondholders, focusing
largely on an equitization strategy," said Gerald B. Curran, vice
president and chief financial officer for LaRoche Industries.
Chanin Capital Partners is leading the discussions for LaRoche.

Curran stated that the company's operations and business
activities will continue to function as usual throughout the
negotiations and restructuring effort.

LaRoche Industries is a privately held, global producer and
distributor of nitrogen, chlor-alkali and fluorocarbon chemical
products.


MASSACHUSETTS HEAVY: Files Chapter 11 Bankruptcy
------------------------------------------------
According to a report in The Boston Herald on March 14, 2000,
Massachusetts Heavy Industries, the company that was kicked out
of the Fore River Shipyard in Quincy after it defaulted on
millions of dollars in taxpayer-supported loans, sought Chapter
11 bankruptcy protection on March 13, 2000.

According to the report MHI defaulted on nearly $ 80 million in
various loans, including a $55 million MARAD-backed loan from
Fleet National Bank.  MHI also owes millions of dollars to the
Massachusetts Development Finance Agency, the Massachusetts Water
Resources Authority and the city of Quincy.


MERRY GO ROUND: Ernst& Young Hires Adversary
--------------------------------------------
Ernst & Young has turned to a former adversary to help the
firm win back a $185 million settlement paid to a client last
year.

The small Pikesville law firm of Snyder, Weiner, Weltchek,
Vogelstein & Brown was on the other side of the table when the
Big Five accounting firm agreed last April to settle a lawsuit
with the now-defunct Merry-Go-Round clothing chain.

Now Ernst & Young has hired the firm to recover the $185 million
from Swidler, Berlin, Shereff and Friedman LLP, the Washington,
D.C., law firm that served as Merry-Go-Round's legal counsel in
its efforts to reorganize under Chapter 11 bankruptcy.

Merry-Go-Round, which was liquidated in 1996, had blamed Ernst &
Young's accountants for its failed turnaround bid and said the
firm concealed a business relationship with Swidler & Berlin that
represented a conflict of interest.

Ernst & Young filed a lawsuit Monday in Baltimore Circuit Court,
blamed Swidler Berlin managing partner Roger Frankel for failing
to disclose the ties between the law firm and the accounting firm
when he recommended that Merry-Go-Round hire Ernst & Young.

The law firm had received more than $4 million in fees from Ernst
& Young, the suit contends, and Swidler Berlin was afraid the
disclosure might prevent Ernst & Young from winning the Merry-Go-
Round assignment, the suit claimed.

When Ernst & Young agreed last year to settle claims it provided
incompetent and fraudulent advice to Merry-Go-Round, the
accounting firm said it believed "other parties bear substantial
responsibility for the failure of Merry-Go-Round to survive" and
that it would "look to these parties for contribution to the
settlement."


RAINTREE: Omega Takes Possesion of Nursing Homes
------------------------------------------------
Omega Healthcare Investors Inc., a real estate investment trustee
investing in and providing financing to the long-term care
industry, announced that it has taken possession of 30 nursing
homes and assisted living properties operated by RainTree
Healthcare Corp, Phoenix, which provides health care services to
about 2,400 residents in Indiana, Alabama, Texas, Colorado and
Arizona. RainTree filed for bankruptcy protection on Feb. 29 and
moved to transition lease properties to Omega in connection with
proceedings in bankruptcy court. RainTree operated 35 facilities,
and 1999 revenues exceeded $100 million. Omega has contracted
with Vencor Operating Inc., Louisville, Ky., to manage the
properties and supervise direct patient care.


SHONEY INC.: Moody's Lowers Debt Ratings; Outlook Negative
----------------------------------------------------------
Moody's Investors Service lowered the ratings of Shoney's $75
million revolving secured bank facility and $176.5 million
secured bank term note, due 2002, to B2 from B1; $122.5 million
convertible zero-coupon debentures, due 2004, to Caa2 from Caa1;
and $51.6 million convertible subordinated debentures, due 2002,
to Caa2 from Caa1. Moody's also lowered the senior implied rating
to B3 from B2 and the senior unsecured issuer rating to Caa1 from
B3. The outlook remains negative. The rating action was prompted
by our belief that the company's enterprise value has declined in
relation to its obligations due to the continuing decline in
operating results at the company's flagship Shoney's unit. The
negative outlook reflects our expectation that management's
turnaround efforts will continue to face significant challenges,
due to intense competition in the casual dining segment of the
restaurant industry.

The ratings reflect the continued weak operating performance of
the company's core Shoney's concept restaurants, high financial
leverage, low returns on assets and sales, and intense
competition in the family dining segment of the restaurant
industry. The company recently announced the engagement of
financial advisors to help evaluate how it might reduce debt and
associated financing costs. We believe Shoney's compliance with
financial covenants will be tight going forward, and required
cash debt service payments will consume a good portion of the
company's free cash flow over the next several years. While the
management team remains committed to revitalize the company's
operations, we continue to believe that the turnaround will
likely take an extended period of time and that the company's
debt protection measures could weaken further in the intermediate
term.

The ratings recognize that the company owns a significant
proportion of restaurant real estate, that the Shoney's unit
maintains a fairly modern store base after several years of
remodeling, and that the company has divested practically all
extraneous restaurant concepts. The solid performance at Captain
D's, with improving same store sales and margins, also support
the ratings.

The B2 rating on the bank credit facility recognizes that it is
secured by substantially all of the company's assets, including
real estate of about 427 restaurants. We believe that the
collateral would provide good protection to the banks. The Caa2
ratings on the convertible zero-coupon debentures and the
subordinated convertible debt recognize that these debts are
contractually subordinate to the bank credit facility and that
the company's common shares trade at a small fraction of the
conversion price. We believe that the severity of loss in a
distressed scenario would be at least partially mitigated by
asset value in excess of the bank obligations.

Beyond Shoney's, the family dining segment of the casual dining
restaurant industry includes large chains such as Denny's,
Perkins, Cracker Barrel, and Bob Evans competing with local
restaurants and other meal solution providers. Customer traffic
has fallen due to perceived declines in the price/value
relationship. Same store sales at the Shoney's unit, which still
accounts for over 50% of total revenue, have been declining since
1993. The most recently available year-over-year store traffic
counts at the Shoney's unit are down almost 9%.

Shoney's restaurants have been challenged for several years, as
evidenced by declining revenue and restaurant operating margins,
along with same store sales. Total revenue has decreased as the
company has closed or sold to franchisees many of the under-
performing stores, but 1999 average unit volume increased 6% to
almost $1.5 million following closure or sale to franchisees of
142 stores. Same store sales have decreased for several years
after menu price increases were more than offset by decreases in
customers. To reverse the negative trends and attract more
frequent visits, we expect that the company will maintain the
emphasis on improved customer service through better training and
more efficient staff utilization. However, we expect that future
operating results will likely be dampened by absorption of at
least some portion of higher labor costs stemming from expected
increases in the minimum wage or probable increases in relatively
low chicken, meat, and seafood prices.

As the company's revenue has fallen for the past several years,
debt has also decreased as the company has paid down the bank
term loans with required principal amortization payments and
asset sale proceeds. Given the high proportion of real estate
that the company owns, rent expense is relatively minor. For the
fiscal year ended September 1999, debt equaled about 4.4 times
EBITDA while EBITDA coverage of cash interest was around 3.2
times. We anticipate moderate reductions in debt and cash
interest going forward as the company continues to pay down the
term loan.

Shoney's, Inc., headquartered in Nashville, Tennessee, operates
or franchises 525 Shoney's family dining restaurants, 567 Captain
D's quick service seafood restaurants, and 3 Fifth Quarter
steakhouses.


SUBMICRON: Liquidating Plan of Reorganization Approved
------------------------------------------------------
SubMicron Systems Corporation (OTC Bulletin Board: SUBM), which
filed its voluntary Petition under Chapter 11 of the Federal
Bankruptcy Code on September 1, 1999 and consummated sale of
substantially all of its assets pursuant to Bankruptcy Court
Order in October 1999, has received approval from the United
States Bankruptcy Court for the District of Delaware to mail its
Liquidating Plan of Reorganization and Disclosure Statement. The
Plan and voting materials will be mailed today. Ballots must be
received by April 17, 2000 and hearing on confirmation of the
Liquidating Plan of Reorganization will be May 3, 2000.

Although the Liquidating Plan of Reorganization provides for no
payment to, or other recovery by, the holders of SubMicron's
common stock, there continues to be inexplicable activity in both
the price and trading volume of SubMicron's common stock.


TURBODYNE: Reports Further Sale of Light Metals Division
--------------------------------------------------------
Turbodyne Technologies Inc. (EASDAQ:TRBD) announced the following
update on the bankruptcy sale of substantially all of the assets
of its subsidiaries, Pacific Baja Light Metals Corporation, Baja
Pacific Light Metals Inc., and Optima Wheel Inc. (collectively,
the "Debtor").

On December 14, 1999, the Bankruptcy Court entered an order
authorizing the sale of substantially all of the assets of the
Debtor to an assignee of Hawthorne Partners (the "Buyer").

The order provided that the Buyer shall assume up to $1.2 million
of liabilities arising from the Debtor's obligations to Mexican
governmental agencies and utility providers. Turbodyne believes
that these Mexican obligations do not exceed $1.2 million.

The order also provided that the Buyer would not be responsible
for the Debtor's obligations under any equipment lease, except to
the extent the Buyer assumed such lease. All equipment leases of
the Debtor which Turbodyne guaranteed have been assumed by the
Buyer, except for one.  Turbodyne believes that the obligation of
the Debtor and Turbodyne, as guarantor, will not exceed $40,000
under the equipment lease rejected by the Buyer.

The order also provided that the Buyer would not be responsible
for the Debtor's obligations in connection with any employment or
labor agreements or any pension plan of the Debtor. After
reasonable inquiry, the Company has been unable to determine the
amount of the contingent liabilities but believes that they will
not have an adverse impact on its ability to remain a going
concern.

Turbodyne Technologies Inc., a California-based high technology
company, specializes in the development of charging technology
for internal combustion engines plus the development and
manufacturing of high-tech assemblies for electrically assisted
turbochargers and superchargers. Turbodyne Technologies Inc.'s
headquarters is located in Carpinteria; the European business
location is Frankfurt, Germany. Additional information about the
company is available on the Internet at http://www.turbodyne.com.


VENCOR: Justice Department Claims $1 Billion Owed
-------------------------------------------------
American Health Line reports on March 14, 2000 that
Justice Department officials claimed that Vencor Inc., owes the
government $1 billion as the result of a fraudulent Medicare
billing scheme.  ($1 billion including triple damages)

Exactly how much money the agency will recoup remains uncertain,
as Vencor filed for Chapter 11 bankruptcy protection last
September, the Washington Post reports.  


WORLDCORP: InteliData Announces WorldCorp No Longer Holds Shares
----------------------------------------------------------------
InteliData Technologies Corp., Reston, Va., announced that
WorldCorp Inc. no longer holds any shares of InteliData common
stock, according to a newswire report. WorldCorp, one of the
founding investors in InteliData, is in the process of
liquidating under chapter 11. (ABI 15-Mar-00)


WORLDCORP: Memorandum Regarding Joint Liquidating Plan
------------------------------------------------------
The debtors, WorldCorp, Inc. and WorldCorp Acquisition Corp.
submitted a memorandum regarding the First Amended Joint
Liquidating Plan of Reorganization.  The amended plan and revised
Disclosure Statement respond to comments from the Committee and
the SEC and to events that have occurred since the original plan
and original disclosure statement were filed on January 10, 2000.

The changes in the plan are primarily procedural and do not
affect the allocation of assets among creditors groups for
purposes of distribution under the plan.

The plan provides for all of the property of the debtors to be
liquidated or distributed over time to the holders of allowed
claims.  

                         *********

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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