TCR_Public/000607.MBX   T R O U B L E D   C O M P A N Y   R E P O R T E R

     Wednesday, June 7, 2000, Vol. 4, No. 111

                    Headlines

ALTERNATE ENERGY: To Halt Operations; File Bankruptcy
AMERICAN ARCHITECTURAL: Moody's Downgrades Sr. Notes To Caa1
AURORA INDUSTRIAL: Case Summary and 6 Largest Unsecured Creditors
AUTOINFO: Announces Rescheduled Disclosure Statement Hearing Date
CHICAGO ORNAMENTAL: Case Summary and 20 Largest Creditors

EINSTEIN/NOAH: Reports Quarterly Loss
GOTHIC ENERGY: Announces Deal with Discount Bond Holders
HARVARD INDUSTRIES: Considering Breed Technologies Acquisition
HOMECHEF: Files for Chapter 11
KITTY HAWK: Alleged Violations of WARN Act

LEVITZ: T. Rowe Price & Carl Marks File Suit
MARINER: Motion To Sell Land Owned By GCI-Bella
MBA POULTRY: Omaha firm buys assets of MBA Poultry
PARACELSUS: Commencement of Trading on OTC Bulletin Board
PATHMARK: To Seek Bankruptcy Protection

PENNCORP FINANCIAL: Plan of Reorganization Confirmed
PENN TRAFFIC: Reports First Quarter Loss
PHILIP SERVICES: Reports Fresh Start Balance Sheet
POWERWORX ONLINE: Case Summary and 20 Largest Unsecured Creditors
SAFETY KLEEN: Bond Values Down

SERVICE MERCHANDISE: Seeks New Bar Date For Exec. Security Plan
SINGER: Third Extension to Remove Actions
SPECIALTY RETAILERS: Moody's Lowers Senior Implied Rating To Ca
STONE & WEBSTER: Case Summary and 20 Largest Unsecured Creditors
TOWER AIR: Wings Set To Fly Again
ZERMATT CBO LIMITED: Moody's Downgrades Three Tranches

                    *********

ALTERNATE ENERGY: To Halt Operations; File Bankruptcy
-----------------------------------------------------
According to an article in The Augusta (Ga.) Chronicle
On June 3, 2000, the new managers of Augusta-based Alternate
Energy Resources announced they temporarily will halt operations
and seek bankruptcy protection in an attempt to restore
profitability.

The company laid off 60 employees Friday, about 95 percent of its
work force, said John Clain, chief executive officer of St. James
Asset Management Inc., the Atlanta-based investment group that
purchased a majority of the company's stock from co-owner John
Metts in late March.
  
The layoffs and the plan to file Chapter 11 next week will
establish a 60-day ''cooling off'' period allowing the
financially troubled company to pay off more than $ 500,000 in
debt to private vendors and about $ 23,000 to the city's
utility department. Clain said they plan to pay 100 percent of
the dollars they owe.

Employees laid off Friday were given two weeks' severance pay.
Mr. Clain said the workers would be offered re-employment after
60 days.  St. James Asset Management paid $ 2.8 million for its
equity stake in the company. Co-owner Jim Evans, who bought into
the company six years ago, still has ownership of the business.
  
Mr. Clain said an estimated $ 1 million in capital improvements
will be made at the Walden Drive facility during the downtime.
The new equipment will allow the company to take on a wider
variety of toxic substances.
  
Alternate Energy, one of four permitted solvent recyclers in
Georgia, was formed in 1975 to handle waste oil. It became a
hazardous waste facility in 1983.  The company has been
financially crippled for most of the past decade because of more
than $ 1 million in state environmental fines and cleanups
stemming from groundwater contamination cases in the 1980s when
the company was under different ownership.  Alternate Energy
discharges its waste into the city sewage system after filtering
out the hazardous materials.
  
The company's overdue utilities account went as high as $ 161,000
last summer.  Alternate Energy's solid wastes are shipped to
other plants or buried in landfills. Some of the material is
blended into combustible fuel mixtures used by cement factories.  
Mr. Clain, whose firm invests in undervalued companies, said he
intends to place Alternate Energy and several other regional
recyclers into a publicly traded holding company within 36
months.  He said his firm is negotiating the purchase of a waste
facility in Alabama.
  

AMERICAN ARCHITECTURAL: Moody's Downgrades Sr. Notes To Caa1
------------------------------------------------------------
Moody's Investors Service downgraded the ratings of American
Architectural Products's ("AAPC") $125 million senior unsecured
notes due 2007 to Ca from Caa1. Moody's has also downgraded
AAPC's issuer rating to Ca from Caa2 and lowered its senior
implied rating to Caa3 from B3. Moody's rating outlook for the
company is changed to negative from stable.

The ratings reflect the announcement that AAPC elected to enter
into the 30-day grace period as provided for in the Indenture for
its $125 million of 11.75% Senior Notes due 2007 ("Senior Notes")
and to defer the payment of $7.3 million of interest on the
Senior Notes otherwise payable on June 1, 2000. AAPC has also
entered into a waiver agreement with the lender for the Company's
$25 million Credit Facility, which provides for a limited waiver
of compliance with certain financial covenants and the effect of
the decision to defer the interest payment on the Senior Notes.
AAPC hired Banc of America Securities LLC as its financial
advisor to consider options relating to refinancing, raising new
capital, restructuring existing funded debt obligations and
potential sales of non-core assets.

During the month of June, the Company anticipates it will have
borrowing availability of $5-7 million, which it indicates is in
the general range of its projected working capital financing
requirements for the remainder of fiscal year 2000 and, in the
opinion of management, is sufficient to properly operate the
business.

The company has not filed a financial statement since 3rd Quarter
ending September 30, 1999, and with limited disclosure, precludes
Moody's from accessing the financial performance of the company
along with the quality of its assets.

AAPC is a manufacturer and distributor of a broadly diversified
line of windows, doors and related products designed to meet a
variety of consumer demands in both the new construction and
repair/remodel markets, primarily for residential uses.


AURORA INDUSTRIAL: Case Summary and 6 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Aurora Industrial Park, LLC
         875 Aurora Avenue, Suite 200
         Aurora, IL 60505

Petition Date: June 2, 2000    Chapter 11

Court: N. District of Illinois

Bankruptcy Case No.: 00-16520

Judge: John H. Squires

Debtor's Counsel: Charles J. Myler
                   Myler Ruddy & McTavish
                   111 W Downer Pl, Suite 400
                   Aurora, IL 60506
                   Tel:(630) 897-8475

Total Assets: $ 4,293,537
Total Debts:  $ 3,548,697

6 Largest Unsecured Creditors

Larsen Management Group
220 Alyworth Ave., #200
South Haven, MI 49090
Mr. Steven Goforth
Tel:(616) 637-6307                        $ 346,000

R. Betker & Associates                    $ 137,000

Rocks, Pitts & Poust                       $ 23,000

Direct Design                              $ 13,000

CB Richard Ellis                           $ 11,518

William E. Hanna Surveyors                  $ 2,575



AUTOINFO: Announces Rescheduled Disclosure Statement Hearing Date
-----------------------------------------------------------------
AutoInfo Inc. (OTCBB:AUTO) announced that the hearing schedule to
be held before the Honorable Adlai S. Hardin Jr., United States
Bankruptcy Judge, in Room 520 of the United States Bankruptcy
Court, 300 Quarropas Street, White Plains, N.Y. 10601, on June 7,
2000 has been rescheduled for 10:30 a.m. on June 27, 2000.
  
William Wunderlich, president and chief financial officer of
AutoInfo, stated, "the hearing date has been rescheduled to allow
us additional time to file our amended disclosure statement and
plan of reorganization. We believe that this additional time will
ultimately expedite the acceptance of the disclosure statement
which will lead to the timely confirmation of our reorganization
plan. We continue with our efforts to proceed toward the
consummation of a transaction in our continuing efforts to
restore shareholder value."
  

CHICAGO ORNAMENTAL: Case Summary and 20 Largest Creditors
---------------------------------------------------------
Debtor: Chicago Ornamental Iron Co.
         An Illinois Corporation
         3131 Soffel
         Melrose Park, IL 60160

Petition Date: June 2, 2000     Chapter 11

Court: N. District of Illinois

Bankruptcy Case No.: 00-16404

Judge: John H. Squires

Debtor's Counsel: David K. Welch
                   Dannen, Crane, Heyman & Simon
                   Suite 1540
                   135 S. LaSalle St
                   Chicago, IL 60603
                   Tel:(302) 641-6777

Total Assets: $ 1 million above
Total Debts:  $ 1 million above

20 Largest Unsecured Creditors

Area Erectors, Inc.                    $ 192,980

Walko & Associates                     $ 186,975

Ironworkers Local No. 63               $ 138,987

Western Architectural Iron Co.         $ 101,016

White Brothers Trucking Co.             $ 79,284

Aarow, S.P. Associates, LLC             $ 65,109

Assurance Agency, Ltd.                  $ 62,352

Danny's Construction Co. Inc.           $ 54,000

Liberty Mutual Ins. (Install)           $ 44,673

Bend Tec, Inc.                          $ 39,500

Urban Real Estate Research              $ 25,394

Alert Construction Company              $ 25,234

Roy S. Transfer                         $ 23,503

Liberty Mutual W/C                      $ 22,661

Raven Electric                          $ 21,611

Westmont Engineering Company            $ 19,000

Sam Smith Trust                         $ 16,793

Chicago Tube & Iron Co.                 $ 15,940

Construction Specialties, Inc.          $ 15,845

M&R Machine Tool Co.                    $ 15,710


EINSTEIN/NOAH: Reports Quarterly Loss
-------------------------------------
According to the Denver Post on May 31, Einstein/Noah Bagel Corp.
reports a net loss of $ 9.3 million, or 28 cents a share for the
quarter that on ended April 16.  The company compared to this
quarter had a net loss of $ 5.7 million, or 17 cents per share,
for the same period a year ago.  Einstein/Noah's reported
revenues for this quarter has climbed 4.8% from $ 112.4 million
last year to a $ 118.3 million for the same quarter.


GOTHIC ENERGY: Announces Deal with Discount Bond Holders
--------------------------------------------------------
Gothic Energy Corporation (OTC Bulletin Board:  GOTH) announced
that it had reached agreement with the holders of approximately
90% principal amount of its outstanding 14-1/8% Senior Secured
Discount Notes to convert those notes into shares of common stock
of the Company.  The agreement is part of a plan to restructure
the Company's balance sheet which includes, among other things,
the surrender by Chesapeake Energy Corporation of its holdings of
the Company's outstanding Series B Preferred Stock and
approximately 2.4 million shares of Common Stock in exchange for
assignments of various undeveloped leaseholds and for substantial
revisions to a participation agreement between the Company and
Chesapeake as previously announced.
  
The conversion of the notes and the other restructurings of the
Company's balance sheet are intended, pursuant to the agreement,
to be effected through a pre-negotiated Plan of Reorganization
under Chapter 11 of the Federal Bankruptcy Code.  As contemplated
by the agreement, the Plan of Reorganization will provide
that the holders of all outstanding Discount Notes will be
converted into Common Stock and will receive approximately 94% of
the Company's equity.  Under the Plan, the Company's current
common stockholders will receive approximately 6% of the
Company's equity.
  
It is contemplated that the Plan of Reorganization will only
apply to the parent company and not to its operating subsidiary,
Gothic Production Corporation.  It is expected that the Company's
operating subsidiary will meet all its secured debt obligations,
trade credit and other obligations in the ordinary course of its
business and that there will be no disruption of its operations.  
It is anticipated that the proceedings under the Bankruptcy Code
will be filed within 30 to 60 days and, subject to court
approval, consummated by the end of the third calendar quarter of
2000.  Prior to commencing the proceeding, Gothic Production
intends to seek certain waivers and consents from its senior
secured lenders.
  
The Plan of Reorganization will also provide for offerings of
additional shares of Common Stock to the holders of the Discount
Notes and the current holders of the Company's Common Stock to
participate in the sale of up to $15.0 million of additional
shares of Common Stock.  The offerings of Common Stock
will be made pro-rata to the holders of the Discount Notes and
current holders of Common Stock, with $12.75 million offered to
the holders of Discount Notes and $2.25 million offered to the
holders of Common Stock.  If fully subscribed by the holders of
the Discount Notes and Common Stock, the post-confirmation
ownership of Gothic by the current holders of the Common Stock
will represent approximately 9% of the Company's outstanding
equity. The foregoing does not constitute an offer of any
securities for sale.  Such securities have not been registered
under the Securities Act of 1933 and may not be offered or sold
in the United States absent registration or an applicable
exemption from the registration requirements.
  
The agreement also contemplates that after confirmation the
Company's Board of Directors will consist of seven members, five
of whom will be designated by the former holders of the Discount
Notes, one will be designated by the existing Board members and
one will be designated by management.  The executive officers
of the Company will remain unchanged.
  
Mike Paulk, President and Chief Executive Officer of the Company
commented, "Over the past year we, together with our financial
advisors, CIBC World Markets, have examined many alternatives for
restructuring and re- capitalizing Gothic.  We have also been
approached by a number of companies interested in discussing a
possible purchase of Gothic during that time.  In each of these
instances, the impediments to raising new capital and to
discussing a sale of the company where we could maximize the
value of our asset base, centered on the uncertainties relating
to our existing capital structure, including specifically
the Discount Notes and the Series B Preferred Stock.  This
restructuring, including the $15.0 million of additional capital
intended to be raised, and puts the Company in a position to
actively develop its asset base.  Eliminating the 14-1/8%
interest obligation on the Discount Notes and the 12% pay-in-kind
dividend on the Series B Preferred Stock will improve
substantially our balance sheet position and operating results."
  
Gothic Energy Corporation is an oil and gas acquisition,
exploitation, development and production company headquartered in
Tulsa, Oklahoma. Additional information may be obtained by
contacting Michael Paulk or Steven Ensz at the corporate
headquarters, Two Warren Place, 6120 South Yale Avenue, Suite
1200, Tulsa, Oklahoma, 74136, telephone number 918/749-5666.


HARVARD INDUSTRIES: Considering Breed Technologies Acquisition
--------------------------------------------------------------
The Wall Street Journal reports on June 6, 2000 that                
Harvard Industries Inc. is considering an acquisition of Breed
Technologies Inc., which is currently under Chapter 11
bankruptcy-court protection, a court filing indicates. Officials
at Harvard, a Lebanon, N.J., auto-equipment maker which itself
emerged from Chapter 11 protection in 1998, couldn't be reached
to comment. Breed's filing in U.S. Bankruptcy Court in
Wilmington, Del., indicated that there are two offers on the
table for Breed, a Lakeland, Fla., provider of automotive-safety
restraints, but also said the company is considering a "stand
alone" plan of reorganization. Breed filed for Chapter 11
protection in September.


HOMECHEF: Files for Chapter 11
------------------------------
The Sacramento Bee reports on May 31, 2000 that HomeChef, a Bay
Area chain of kitchenware and cooking lesson centers has filed
for bankruptcy protection under Chapter 11 on May 22 in the Santa
Rosa Division of U.S. Bankruptcy Court for the Northern District.  
Apparently a  key investor decided to stop funding HomeChef,
forcing the bankruptcy.  The Corte Madera-based retailer is not
traded publicly and relies deeply on private investors for its
financing.


KITTY HAWK: Alleged Violations of WARN Act
------------------------------------------
According to the News-Sentinel on May 31, lawyers for Local 747
of the International Brotherhood of Teamsters filed a brief in
bankruptcy court on May 10 alleging Kitty Hawk Inc. violated the
WARN Act.  The act serves as a safety net in case a certain
company went out of business or was forced into mass layoffs.  
Kitty Hawk violated the WARN Act after it ceased operations on
April 30, two days after the company announced the shutdown
without prior warning or notice to its 600 employees.


LEVITZ: T. Rowe Price & Carl Marks File Suit
--------------------------------------------
On April 27, 2000, two of Seaman's shareholders -- T. Rowe Price
Recovery Fund, L,P. and Carl Marks Management Co., L.P. --
commenced an action in the Chancery Court for the State of
Delaware to enjoin the Seaman's transactions. Rowe and Marks
allege they own 42% of the common stock of Seaman.  Rowe and
Marks further allege that the Seaman-Levitz transactions are
intended solely to benefit Resurgence as the majority shareholder
of Seaman and entities affiliated with Resurgence.  In addition,
Rowe and Marks have sued certain Seaman officers, alleging that
their selling their Seaman shares to Resurgence violated their
fiduciary duties to all shareholders.  The Chancery Court has
scheduled hearings on these allegations, Levitz has moved the
Bankruptcy Court for an order enjoining the Chancery Court action
on the ground that the action violates the automatic stay because
it is an attempt to interfere with the property of the estate.  
In addition, Levitz has sought attorneys' fees, damages, and
punitive damages. (Levitz Bankruptcy News Issue 45; Bankruptcy
Creditors' Services Inc.)


MARINER: Motion To Sell Land Owned By GCI-Bella
-----------------------------------------------
Mariner Post-Acute Network, Inc. and its debtor affiliates and
its indirect wholly owned subsidiary GCI-Bella Vita, Inc. seek
the Court's authorization to effect the sale of 5.3 acres of
vacant land owned by GCI in Parker, Colorado, free and clear of
liens, claims, encumbrances and interests, and exempt from
Transfer Taxes.

GCI acquired the land for $699,000 in 1996 for the purpose of
constructing an assisted living facility. However, for various
reasons, the Land was never developed, and currently produces no
income or other benefits for the Debtors.

In July 1999, GCI engaged real estate broker Frederick Ross
Company to market the land and the marketing effort produced an
offer by Signature Inc. Pursuant to that, GCI and Signature Inc.
entered into a Sale Agreement which provides for Signature to buy
the land at $1 million in cash, subject
to:

  (1) A price reduction of $150,000 to Signature for closing the
transaction before obtaining certain approvals for the
development of the Land.

  (2) A credit of up to $20,000 to Signature for closing the sale
before obtaining clear title to a small strip of property within
the Land known as "Ballpark Lane."

It follows that if Signature elects to close notwithstanding the
Ballpark Lane title issue, and prior to obtaining the development
approvals, the Debtors will have net proceeds of:

     $  1,000,000    less
     $    150,000    less
     $     20,000    less
     $     50,000    approximately, as the 6% sales commission to
Ross
     ------------
     $     78,000

In accordance with the DIP financing arrangements, 25% of the net
proceeds will be for working capital needs, and 75% will be paid
to the Debtors' prepetition senior secured lenders as adequate
protection.

With respect to the Site Development Approval, the Sale Agreement
provides that if Signature does not obtain such approvals by July
24, 2000, it may terminate the Sale Agreement or close earlier,
by June 15, 2000, in exchange for a $150,000 purchase price
reduction. The Debtors believe that Signature will elect to waive
the Site Development Approval condition and thus close by June
15, 2000.

With respect to the Ballpark Lane title issue, the Sale Agreement
provides that Signature will have 60 days from the date it
receives a copy of the Court's Sale Order to perfect title to
Ballpark Lane. If Signature is not able to obtain clear title
within that period, it has the option of terminating the Sale
Agreement or closing the sale. If Signature elects to close the
sale notwithstanding the title problem, or if it is able to cure
the title problem, it is entitled to a credit against the
purchase price of up to $20,000 for its costs incurred in
obtaining clear title.

In their business judgment, the Debtors believe that even at the
reduced purchase price, the sale to Signature is in the best
interest of the Debtors' estates. The Debtors further represent
that Signature is a "good faith" purchaser of the Land within the
meaning of Bankruptcy Code section 363(m), that the negotiations
have been conducted at arms length, and that adequate notice of
the sale is being provided pursuant to the Notice
Procedures Order.

The Debtors also assert that the proposed sale satisfies the
requirements for a sale free and clear of liens, claims,
encumbrances and interests under Bankruptcy Code section 363(f)
and for exemption from Transfer Taxes pursuant to Bankruptcy Code
section 1146(c).(Mariner Bankruptcy News Issue 6; Bankruptcy
Creditors' Services Inc.)


MBA POULTRY: Omaha firm buys assets of MBA Poultry
--------------------------------------------------
An Omaha firm managed by a former Inacom Corp. executive bought
the assets of a financially strapped poultry producer in U.S.
Bankruptcy Court.
  
Bird Watchers, managed by former Inacom Corp. chairman Bill
Fairfield, purchased the assets of MBA Poultry of Tecumseh on
Monday for $4.8 million.
  
MBA attorney Bill Biggs said the sale has given the company "life
and vitality."
  
It also should mean consumers could see the company's Smart
Chicken label in the stores "in very short order," he said.
  
The plant, which employs nearly 300 people, abruptly closed in
January after equipment problems forced MBA to file for Chapter
11 bankruptcy protection from creditors. MBA promised to reopen,
but has been restructuring its financing plan since filing for
Chapter 11.
  
MBA suffered months of dismal financial reports after it started
producing its air-cooled "Smart Chicken" products in a
refurbished factory in 1998.
  
The company blamed faulty conveyor belts for curtailing
production and setting back sales.
  
The "Smart Chicken" production uses an air-chilling process
rather than the traditional method of dumping birds into a large
tank of ice and water. Researchers felt everything within that
bath potentially could get on all the birds and increase the risk
of contamination.
  
Both MBA President Mark Haskins and Fairfield declined comment
Monday.
  
Bird Watchers offered the only bid of $2.3 million on MBA's
equipment and the only combined bid on both the equipment and the
plant's real estate. The Small Business Administration was the
only other bidder on the real estate, offering $ 1.5 million.
That was the amount it had lent to MBA, Biggs said.
  
The SBA is on a list of four secured creditors who can expect to
be repaid, in part or in full, with proceeds from the auction,
Biggs said.
  
Heading the debt list, as required by law, are MBA's real-estate
property taxes. Also on it are delinquent utility bills owed to
the city of Tecumseh and loans from the American National Bank
and the Money Store, both of Omaha.
  
A co-founder of Inacom Corp, Fairfield stepped down as president
and CEO last October.
  
Inacom Corp., a former Fortune 500 company, moved its
headquarters from Omaha to an Atlanta suburb earlier this year.
  

PARACELSUS: Commencement of Trading on OTC Bulletin Board
---------------------------------------------------------
Paracelsus Healthcare Corporation (OTC Bulletin Board: PLHC) was
informed  on June 5, 2000 that the Company's common stock will be
traded on the NASD OTC Bulletin Board Service.  The ticker symbol
for the stock is "PLHC."
  
Paracelsus Healthcare Corporation was founded in 1981 and is
headquartered in Houston, Texas.  Including a hospital
partnership, Paracelsus presently owns the stock of hospital
corporations that own or operate 10 hospitals in seven
states with a total of 1,287 beds.  Additional Company
information may be accessed through http://www.prnewswire.com
under the Company's name.


PATHMARK: To Seek Bankruptcy Protection
---------------------------------------
Pathmark Stores Inc. said last Friday that it is preparing to
seek bankruptcy protection.  The company is struggling with $ 960
million in bond debt hopes to revitalize New Jersey's No. 2
grocery chain. The Carteret-based subsidiary of Supermarkets
General Holding Corp. said it has reached agreement with a
committee of its bondholders to swap their claims for shares in a
reorganized Pathmark. Pathmark 's debts are a result of a 1987
leveraged buyout by a group led by Merrill Lynch & Co. Last
month, the company missed making a $33.3 million interest payment
to holders of $665 million in company bonds.

"Given the strong support we've gotten from the bondholders
group, we believe a majority of bondholders will support this
plan," said Harvey Gutman, Pathmark's senior vice president.
(Compiled from Associated Press and Bloomberg News reports.)


PENNCORP FINANCIAL: Plan of Reorganization Confirmed
----------------------------------------------------
PennCorp Financial Group, Inc. announced on June 5, 2000 that the
Delaware Bankruptcy Court has confirmed its Plan of
Reorganization, clearing the way for consummation of the Plan and
completion of a recapitalization transaction chosen by the
Company's Board of Directors in March 2000.  The Company expects
consummation of the Plan and closing of the recapitalization
transaction to occur on or before June 19, 2000.
  
Confirmation of the Plan came at the conclusion of a hearing
which assured that all reorganization requirements had been met
under the Bankruptcy Code, which included acceptance by the
requisite majority of preferred shareholders. The Company
received votes in favor of the Plan from holders of approximately
90 percent of its two outstanding series of preferred stock,
which satisfied voting requirements for confirmation.
  
Under the terms of the Plan and the recapitalization agreement:
  
-- Preferred stockholders will receive one share of common stock
of the reorganized company for each share of outstanding
preferred stock.  The rights offering was fully underwritten by
Inverness/Phoenix Capital, LLC and Vicuna Advisors, LLC.
  
-- All existing shares of the Company's common stock will be
cancelled for no value.
  
-- The Company's existing senior and subordinated debt, with
principal estimated to aggregate approximately $175 million at
confirmation, will be paid in full in cash.
  
-- Any and all other claims and liabilities of the Company will
be paid in accordance with their terms.
  
Consummation of the recapitalization transaction remains subject
to the consummation of a $95 million credit facility with ING
Barings in New York.
  
PennCorp Financial Group, Inc. is an insurance holding company.  
Through its subsidiaries, the Company underwrites and markets
life insurance and accident and sickness insurance throughout the
United States.  The Company filed voluntary petitions for
reorganization under Chapter 11 in the U.S. Bankruptcy Court for
the District of Delaware in Wilmington on February 7, 2000.
  
  
PENN TRAFFIC: Reports First Quarter Loss
----------------------------------------
Penn Traffic Co. officials told The Associated Press that they
overlooked their first quarterly loss of $ 26.7 million, or $
1.33 per share that ended April 29.  And since the emergence of
Penn Traffic from bankruptcy reorganization last June, it has now
lost nearly an amount of $ 87 million.  But, aside from the
reported net loss there are still other signs that the regional
grocery chain is recovering its financial status.

  
PHILIP SERVICES: Reports Fresh Start Balance Sheet
--------------------------------------------------
Philip Services Corporation (TSE: PSC, NASDAQ:PSCD) announced its
audited fresh start balance sheet as at March 31, 2000.  The
unaudited financial results of Philip Services Corp., the
predecessor company, for the 1999 year-end and the first quarter
ended March 31, 2000 are also included. All currency figures are
stated in U.S. dollars.  Results have been presented according to
U.S. generally accepted accounting principles. "With our
financial reorganization behind us, we have removed the
uncertainty that hampered our performance and business growth
over the past year," said Anthony Fernandes, President and CEO.
"Our employees have demonstrated outstanding dedication and
commitment during this difficult time, and the response of our
clients has been very encouraging. We are very pleased with the
improvement indicated by our first quarter performance.

"With renewed financial stability, it is our objective to realize
the potential of our company and build a foundation for
profitable growth.  We are integrating our services to our
clients and moving forward as one company.  We have also embarked
on a significant undertaking to establish common business
processes that will allow for the widespread sharing of best
practices and information across our company.  With the
underlying strength of our people and the breadth of our service
capabilities and client base, I am both confident and
enthusiastic about our future."


POWERWORX ONLINE: Case Summary and 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Powerworx Online, Inc.
          A Nevada Corporation
          5775 Flatiron Pky #205
          Boulder, CO 80301

Type of Business: Internet services.

Petition Date: May 30, 2000   Chapter 11

Court: District of Nevada

Bankruptcy Case No.: 00-13979

Judge: Linda B. Riegle

Debtor's Counsel: Susan G. Boswell
                    1 S Church St #1700
                    Tucson, AZ 85701

Total Assets: $ 1,000,000
Total Debts:  $ 8,356,272

20 Largest Unsecured Creditors

Deep Marble, Inc.
PO Box 365                   Promissory
Louisville, CO 80027         Note              $ 1,000,000

Don Bunch
305 Terminal Drive           Promissory
Morristown, TN 37814         Note                $ 750,000

David Wild
1010 St Ives Ct.             Promissory
Morristown, TN 37814         Note                $ 750,000

Tim Wild
1985 Crocket Ridge Road      Promissory
Morristown, TN 37814         Note                $ 750,000

Uunet Technologies, Inc.
Accounts Receivable Dept.
1945 Old Gallows Rd
Vienna, VA 22182             Trade
(703) 203-5600               Payable             $ 737,573

Ernst and Young, LLP
Bank of America-LA 98594
Los Angeles, CA 90074-8594   Trade
(720) 931-4000               Payable             $ 351,032

Alston & Bird, LLP
PO Drawer 34009
Charlotte, NC 28234          Trade
(704) 555-1212               Payable             $ 336,578

Martin Clark
3040 Sugarwood Dr.           Promissory
Kodak, TN 37764              Note                $ 250,000

George McGuffin
2103 N. Economy Rd.          Promissory
Morristown, TN 37814         Note                $ 250,000

MCI World Com                Trade Payable       $ 162,000

Sprint Paranet               Trade Payable       $ 108,535

David J. Reuben              Promissory Note      $ 78,000

Jack E. Campell              Promissory Note      $ 75,000

Ronnie Ailey                 Promissory Note      $ 75,000

R.R. Donnelley, Inc.         Trade Payable        $ 73,226

Center Partners, LLC         Trade Payable        $ 67,362

Agilent Technologies         Trade Payable        $ 54,204

Jeffrey P. Wood              Promissory Note      $ 52,000

Craig & Teresa Wild          Promissory Note      $ 50,000

Jerry Issacs                 Promissory Note      $ 50,000


SAFETY KLEEN: Bond Values Down
------------------------------
The Mergers and Acquisitions Report published an article on
                
June 05, 2000 stating that ever since Safety-Kleen Corp.'s
auditors withdrew its financial statements for the last three
years, its bond values have "entered death territory."
  
On May 15, the industrial waste management company announced it
would not make its $10.4 million in interest payments on its
9.25% senior unsecured notes due 2009. According to the article,
sources say the bonds have been recently quoted from 4 to 12
cents on the dollar, and at least one analyst thinks when the
dust settles, that price might be 4 to 12 cents too high.
  
The company has two bond issues of $325 million each, which were
trading just below par in early January. The 30-day grace period
expires on June 15. The company on June 1 deferred an interest
payment on an additional issue.
  
Columbia, S.C.-based Safety-Kleen provides industrial waste
services in the U.S. and Canada. Its stock was trading at $0.69
at press time and has been under $1 the entire month of May.
  
Following the March 6 announcement that PricewaterhouseCoopers
would withdraw its auditing approval of the financial statements,
Safety-Kleen saw its CEO, CFO and COO resign. A board committee
led by four independent directors is investigating the accounting
irregularities with the aid of PricewaterhouseCoopers. It has
indefinitely delayed the reports on those results.
  
During March, several shareholders filed class action securities
fraud suits, and the company said in an SEC filing it is
anticipating more.
  
The banking syndicate is led by Toronto Dominion Inc., from whom
Safety-Kleen obtained an extra $20 million in March.
  
Jay Alix & Associates has also been retained by the company for
restructuring consultation.

There is much speculation as to whether the company will file for
Chapter 11 bankruptcy protection.
  
  
SERVICE MERCHANDISE: Seeks New Bar Date For Exec. Security Plan
---------------------------------------------------------------
The Debtors sought and obtained Court approval for the extension
of the deadline for filing proofs of claim in connection with the
Debtors' Executive Security Plan until 30 days following the
earlier of:

  (a) the completion of the negotiations between the Debtors and
the ESP Committee, and

  (b) the termination of the ESP Committee's function and duties
under prior orders of the Court.

As the negotiations and discussions between the Debtors and the
ESP Committee are still going on, the Debtors believe it is
prudent to seek a temporary extension of the deadline for the
filing of claims in connection with the ESP in order to avoid
premature filing in this regard when there is still uncertainty
over the ultimate treatment of the ESP. The Debtors say they hope
that with more time for negotiations, the ESP Committee and the
Debtors will resolve or narrow the issues that would be presented
in such proofs of claim. (Service Merchandise Bankruptcy News
Issue 12; Bankruptcy Creditors' Services Inc.)


SINGER: Third Extension to Remove Actions
-----------------------------------------
The Singer Company NV and certain of its affiliates seek a court
order permitting an extension of the time period within which the
debtors may remove pending proceedings until the later of
September 30, 2000 or 30 days after the entry of an order
terminating the automatic stay with respect to any particular
action sought to be removed.  

The debtors are parties to judicial and administrative
proceedings involving a wide variety of claims.  The debtors are
beginning the process of reviewing and reconciling proofs of
claim.  They have received over 1,00 claims that total in excess
of $6.8 billion.  In connection with the debtors' process of
reviewing and reconciling claims, the debtors intend to make a
final decision as to which Actions they desire to remove.  Thus
the debtors require additional time to determine which, if any,
of th actions should be removed and, if appropriate, transferred
to this district6. The debtors believe that an extension to
September 30, 2000 will provide sufficient time for them to
complete this analysis, consistent with the timetable for
emergence from Chapter 11 and the claims reconciliation process.
The debtors submit that the relief requested is in the best
interests of their estates and creditors.


SPECIALTY RETAILERS: Moody's Lowers Senior Implied Rating To Ca
---------------------------------------------------------------
Moody's Investors Service downgraded the debt ratings of
Specialty Retailers Inc., ("Stage") the primary operating
subsidiary of Stage Stores, Inc. Both companies filed for
protection under Chapter 11 of the U.S. bankruptcy code. The
following ratings were affected by this action:

Senior implied rating to Ca from Caa1;

$35 million senior secured revolving credit facility to B3 from
B2;

$200 million senior secured revolving credit facilities to Ca
from Caa2;

Senior unsecured issuer rating to Ca;

$200 million senior guaranteed notes to Ca from Caa3;

$100 million senior subordinated notes to C from Ca.

The revised ratings reflect the weakness of Stage's financial
condition and business prospects at the time of the bankruptcy
filing. The downgrade of the $35 million secured credit facility,
which closed on March 6th, reflects Moody's expectation that
lenders are likely to be fully repaid.

The company has announced that it is arranging for a $450 million
DIP facility. Moody's believes that a substantial portion of that
facility, if approved, will be used to finance credit card
receivables currently financed under an off-balance sheet
vehicle.

Stage Stores and its subsidiary, Specialty Retailers Inc.,
operates more than 600 stores in 33 states under the names Stage,
Bealls, and Palais Royale.


STONE & WEBSTER: Case Summary and 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Stone & Webster, Inc.
         245 Summer Street
         Boston, MA 02210

Type of Business: Principally engaged in providing professional
engineering, construction, and consulting services. Certain of
the Debtors also own and operate fourteen cold storage
warehousing facilities primarily in the Southeastern United
States.

Petition Date: June 2, 2000        Chapter 11

Court: District of Delaware

Bankruptcy Case No.: 00-02142

Debtor's Counsel: Gregg M. Galardi
                   Skadden, Arps, Slate, Meagher & Flom LLP
                   One Rodney Square, PO Box 636
                   Wilmington, DE 19899-0636
                   Tel:(302) 651-3000

Total Assets: $ 917,251,000
Total Debts:  $ 604,461,000

20 Largest Unsecured Creditors

Power Piping Co. Inc.
4 Allegheny Center
Suite 401
Pittsburgh, PA 15212
Steven Janaszck              Trade debt            $ 8,832,751

Sturgeion Electric
12150 East 112th Ave
Henderson, CO 80640          Trade debt            $ 6,400,000

Daelim
Yoido PO Box 1117
Seoul, Korea
Mr. Hak II Lee               Trade debt            $ 4,813,639

Forster Wheeler Limited
PO Box 71448
Chicago, IL 60694-1448       Trade debt            $ 2,668,531

Merrell & Garaguaso, Inc.
157 Locke Avenue
Swedesboro, NJ 08085                               $ 1,806,093

Freitag-Weinhardt, Inc.
PO Box 5177
5900 No. 13th Street
Terre Haute, IN 47805-5177   Trade debt            $ 1,753,805

O'Connor Constructors, Inc.
45 Industrial Drive
Canton, MA 2021
Paul Stuart                  Trade debt            $ 1,483,510

Hyundai Heavy Industries, Inc.
1 Chonha - Dong 682-792
Ulsan, Korea
Mr. H.C. Moon                Trade debt            $ 1,468,168

Alstom Elektrik Endustrial
Baris Mah. E-5 Alti, 1801 Sk.
Gebze/Kocaeli
no: 104,41410                Trade debt            $ 1,365,000

Miller Eads
4125 N. Keystone Ave.
Indianapolis, IN 46205       Trade debt            $ 1,347,205

Panalpina, Inc.
PO Box 60614 - AMF
Houston, TX 77205            Trade debt            $ 1,064,176

ABB
PO Box 500
2000 Day Hill Road
Windsor, CT 06095-0500
Edward Henry                 Trade debt            $ 1,048,905

Schelling America, Inc.
PO Box 80367
Raleigh, NC 27673            Trade debt            $ 1,033,480

State Board of Equalization
PO Box 942879
Sacramento, CA 94279-8015    Trade debt            $ 1,029,917

Brush Transformers
PO Box 20
Lounghborough - Leicester    Trade debt              $ 917,993

Powell Electrical
Manufacturing Co.
PO Box 843823
Dallas, TX 75284-3823        Trade debt              $ 895,261

Babcock-Borsig
Aktiengesellsschaft
Egellsstrabe 21              Trade debt              $ 889,082

Hohl Industrial
Services, Inc.
95 Stark Street
Tonawanda, NY 14150-1290     Trade debt              $ 883,529

G.E. International
7250 McGinnis Ferry Road
Suwanse, GA 30024
Dennis McNulty               Trade debt              $ 817,920

Institut Francals
Du Petrole
1 ET 4
Avenue De Bois - Preu
Rueil-Malmaison
France 92852                 Trade debt             $ 801,525



TOWER AIR:  Wings Set To Fly Again
----------------------------------
According to an article in The Daily News(NY) on May 31, troubled
Tower Air which filed for bankruptcy in February, is planning to
have back its New York service to Trinidad and Tobago with
charter flights beginning this June 17.  Tower Air also is in
discussion to add New York-to-Tel Aviv charter service.  The
company's immediate goal is to come out of bankruptcy and with
all this charter build-up it is giving Tower Air the necessary
nudge onwards to its recovery.
      
   
ZERMATT CBO LIMITED: Moody's Downgrades Three Tranches
---------------------------------------------=--------
Moody's Investors Service announced that it has downgraded all
three rated tranches issued by Zermatt CBO Limited. The
downgrades -- from Aa3 to A1 for the Class A Notes, from Baa3 to
Ba1 for the Class B Notes and from B1 to Caa3 for the Class C
Notes -- reflect the deterioration in the credit quality and par
value of the collateral pool. As a result of the decline in
credit quality and loss of par, the initial ratings assigned to
the tranches are no longer consistent with the credit risk posed
to investors.

Rating Action: Downgrade
The ratings of the following tranches has been downgraded:
Issuer: Zermatt CBO Limited
Tranche Descriptions:

$215.25 M Class A Senior Secured Floating Rate Notes Due 2010;
From Aa3 to A1

$51 M Class B Senior Secured Fixed Rate Notes Due 2013; From Baa3
to Ba1

$9.75 Class C Senior Subordinated Fixed Rate Notes Due 2013; From
B1 to Caa3

                    *********

  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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