TCR_Public/000608.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, June 8, 2000, Vol. 4, No. 112

                   Headlines

BIRMINGHAM STEEL: Announces Agreement With AIR
CELOTEX: BPB Announces Agreement For Purchase of Businesses
COLORADO GREENHOUSE: Sells Two of its Greenhouses
COMMERCIAL FINANCIAL: Former Workers To Be Compensated
DAEWOO INTERNATIONAL: Hearing to Consider Sale

DYNAMATIC CORP: Taps Colmen Capital Advisors
EMPLOYEE SOLUTIONS: Jeffrey Colby Resigns
EQUIMAR SHIPHOLDING: Moody's Downgrades Mortgage Notes
FAMILY GOLF: Secures Final Approval For $15MM In DIP Financing
FRANCHISE MORTGAGE: Fitch Downgrades Loan Receivables Trust

GOLDEN OCEAN: Approval of Term Sheet
GOLDEN OCEAN: Motion To Terminate Exclusivity
GS TECHNOLOGIES: Moody's Downgrades Notes
HARADA INDUSTRY CO.: Group loss widens in FY99
HARRISBURG EAST: Agrees To Sell Mall

HAZAMA CORP: Stock distressed as the company
HEDSTROM HOLDINGS: Committee Taps Saul, Ewing, Remick & Saul
JOAN AND DAVID: Propose Order To Pay Severance and Retention
JOAN AND DAVID: Tap Leonard B. Pack as Special Counsel
KAWASAKI HEAVY INDUSTRIES: S&P downgrades citing debt woes

LAROCHE INDUSTRIES: Committee Objects To Chanin Capital
LEVITZ: Motion For Approval of Seventeenth DIP Facility Amendment
MICROBEST: Files Chapter 11 Petition
PACIFIC GATEWAY: Exchange Concludes New Agreement With Its Banks
SAFETY COMPONENTS: Deadline For Filing Proofs of Claim

SAFETY COMPONENTS: Implementation of Severance Program
SERVICE MERCHANDISE: Motion To Restrict Claim Trading Activity
SILVER CINEMAS: Taps Latham & Watkins as Special Counsel
STAGE STORES: $450 Million DIP Facility Receives Interim Approval
TEU HOLDINGS: Order Approves Retention of Liquidation Consultants

TEU HOLDINGS: Seeks Authority to Retain Sales Consultant
WASTE MANAGEMENT: Subsidiary Completes Sale in Australia
ZEGARELLI GROUP: Settles Lawsuit

                   *********

BIRMINGHAM STEEL: Announces Agreement With AIR
----------------------------------------------
Birmingham Steel Corporation announced that American Iron
Reduction, LLC, ("AIR") has completed a financial restructuring
with AIR's lenders. Birmingham Steel and GS Industries,
Charlotte, North Carolina, each own a 50% interest in AIR, a
Louisiana joint venture that produces direct reduced iron. Among
other changes, the new agreement defers interest and principal
payments on AIR's debt and reduces the amount of annual direct
reduced iron purchase requirements.

John Correnti, chairman and chief executive officer of Birmingham
Steel, commented, "We are pleased that American Iron Reduction
has successfully completed a financial restructuring with its
lenders. The terms of the new agreement provide financial and
operating relief, and also support Birmingham Steel's desire to
eventually terminate our participation in the venture."

Correnti continued, "As we have previously stated, AIR is no
longer a strategic investment for Birmingham Steel. With AIR's
new financing agreement complete, the co-sponsors have enhanced
opportunities to explore discussions with parties interested in
acquiring the venture. The financial restructuring of AIR is a
substantial achievement, and represents yet another significant
step in our quest to turnaround Birmingham Steel."

Birmingham Steel operates in the mini-mill sector of the steel
industry and conducts operations at facilities located across the
United States. The common stock of Birmingham Steel is traded on
the New York Stock Exchange under the symbol "BIR."


CELOTEX: BPB Announces Agreement For Purchase of Businesses
-----------------------------------------------------------
BPB plc ("BPB") announces that it has reached agreement for the
purchase of the wallboard and ceiling tile businesses of Celotex
Corporation ("Celotex") in the USA, subject to regulatory
approval and other technical conditions, with completion expected
in July 2000. The purchase consideration is $345 million
(pnds stlg 230 million) in cash on a debt-free basis and will be
financed using existing committed facilities.

For the year to 31 August 1999, the wallboard and ceiling tile
businesses of Celotex had combined sales of $291 million, EBITDA
of $77 million and pre- tax profit of $63 million; the combined
net assets at 31 August 1999 were $221 million. They employ some
1,400 people.

The acquisition of Celotex considerably strengthens BPB's
existing North American presence. Celotex holds a share of almost
4% of the US wallboard market, selling over 100 million square
metres per annum from four plants in Iowa, Ohio, Wyoming and
Florida, with commissioning soon of a newly constructed
65 million square metre plant in Kentucky at a cost of $72
million, of which $32 million had been spent by 31 August 1999.
It has secure sources of gypsum and also operates a dedicated
65,000 tonne per annum wallboard liner mill in Illinois which
will supply approximately half the liner requirements of the
merged businesses.

Celotex meets 10% of the North American demand for ceiling tiles,
supplying a range of mineral fibre and laminated products from
five plants in Michigan, Wisconsin, Indiana, Pennsylvania and
Mississippi.  Ceiling tiles and wallboard are sold through
similar routes to market and this acquisition represents a
significant progression in the development of BPB's strategy to
provide fast-track, lightweight building systems using shared
operations, logistics and customers. The Celotex operations also
complement BPB's existing European leadership in gypsum-based
ceiling tiles and provide the foundations for a global ceilings
business with pro forma sales of around pnds stlg 100 million
per annum.

Integration of the Celotex operations with BPB's Canadian
subsidiary will provide opportunities to lower the annual
operating costs by over $15 million and enhance BPB's existing
market positions in the USA.

Commenting on yesterday's agreement Richard Cousins, BPB's Chief
Executive said:

"The acquisition of the Celotex wallboard and ceiling tile
businesses will secure one of our key strategic objectives in
gaining a direct presence in the American internal linings
market. When added to Westroc's existing wallboard sales, Celotex
will establish BPB as the fourth largest producer with an 8 to 9%
share of the 3 billion square metres of annual sales in North
America, a region representing more than 50% of world demand and
with long term growth of 3 to 4% per annum."


COLORADO GREENHOUSE: Sells Two of its Greenhouses
------------------------------------------
The Albuquerque Journal reports on June 1, 2000 that Colorado
Greenhouse Inc. plans to hire an independent company to sell its
greenhouse in Estancia, which shut down Feb. 11 after the
Colorado-based company filed for Chapter 11, and in Grants, which
closed in January, both listed at a combined amount of $25
million, the company's CEO, Martin Wehr said.


COMMERCIAL FINANCIAL: Former Workers To Be Compensated
------------------------------------------------------
According to Tulsa World on June 1, Commercial Financial Services
Inc. has agreed to pay 1,367 employees laid off between Jan. 8
and Feb 8 of last year. The former workers would then sign a
release promising not to sue over the layoffs the company made
after filing for bankruptcy on Dec. 11 of 1998.


DAEWOO INTERNATIONAL: Hearing to Consider Sale
----------------------------------------------
The debtor, Daewoo International (America) Corp. seeks approval
of a certain contract of sale with the Purchaser, Pan Pac
International for the sale of a commercial warehouse located at
3206-3232 North Kennicott Avenue, Arlington Heights, Illinois,
subject to higher and better offers.  The proposed purchase price
is $1.9 million and the sale includes the assumption and
assignment of two unexpired Service Agreements.


DYNAMATIC CORP: Taps Colmen Capital Advisors
--------------------------------------------
The debtor, Dynamatic Corporation applies to employ Colmen
Capital Advisors, Inc. as its consultants and investment bankers.  
Among other things, it is anticipated that Colmen will provide
advice and consultation in connection with the management of
Dynamatic including the development and implementation of sales
and marketing plans for the company. Colmen will receive a one
time fee of $20,000 and payments of $5,000 per week for time
associated with the engagement.


EMPLOYEE SOLUTIONS: Jeffrey Colby Resigns
-----------------------------------------
The Arizona Republic reports on June 1, 2000 that Employee
Solutions Inc. announced that Jeffrey Colby president of TEAM
Services, has resigned from its board of directors.  TEAM
Services was acquired by Employee Solutions in 1996,
and the decision to resign for Colby was to avoid the appearance
of a conflict of interest between the company, Colby and his
business partners.


EQUIMAR SHIPHOLDING: Moody's Downgrades Mortgage Notes
------------------------------------------------------
Moody's Investors Service lowered to Caa3 from B3 the rating on
the $125 million 9 7/8% first preferred ship mortgage notes due
July 2007 issued by Equimar Shipholding Limited and guaranteed by
its parent B+H Ocean Carriers Limited and certain subsidiaries.
The issuer rating was lowered to C from Caa2 and the senior
implied rating to Caa3 from B3. The rating outlook is negative.

The rating action was prompted by the company's increasingly
tight liquidity position and its announcement that it was seeking
bondholder consent to amend the Indenture to permit the
application of approximately $2.2 million currently held in trust
and up to $1.25 million that may be realized upon a vessel sale
or refinancing, to its scheduled July 1, 2000 interest payment.
Consent of 100% of the bondholders is required for approval. The
company has indicated that absent the consent, the interest
payment will not be made as recent efforts to raise capital and
liquidity have not been successful to date. In addition, Moody's
notes that the company's accounts receivable secured $5 million
revolver matures in August 2000. Moody's believes that a
restructuring of the company's debt is likely.

Given the improved though still relatively depressed spot and
charter freight rates for Handy size product tankers, the age of
Equimar's fleet, and heightened regulatory and market sensitivity
to older tanker vessels following the sinking of the "Erika"
(unrelated to B+H Ocean Carriers), we believe that the market
value of the collateral vessels supporting the notes is
substantially below the initial offering's 80% advance rate. Full
realization on the notes is unlikely.

The negative rating outlook reflects Moody's concern about
projected on-going losses, the possibility that efforts to raise
funds to satisfy the July interest payment prove unsuccessful,
and concern about the uncertainty and volatility of the
realizable value of the secured vessels.

B+H Ocean Carriers Limited through its Equimar Shipholdings and
Cliaship subsidiaries is one of the larger Handy size product
tanker operators in the Indo-Asia Pacific region operating a
fleet of 16 vessels (12 operated by Equimar). The company has
completed a major fleet restructuring and up dated its fleet
during 1999 as it scrapped five 1970's built medium range 30,000
DWT product tankers and acquired for $46 million from Chevron six
35,000 DWT product tankers built in the 1981 to 1983 period, four
acquired by Cliaship and two by Equimar. Moody's notes that the
Cliaship acquired vessels were financed with secured bank debt
and do not provide security to note holders. Over time the fleet
pledged to note holders has declined in size and the remaining
vessels have depreciated in value.

The company's rating has benefited from the stability provided by
the multi-year charter contract (typically two to four years)
placed for about 60% of the fleet. However, the drop in the spot
market rates over the last 2 1/2 years since the notes were
issued (in the 30% to 40% range) has also resulted in charter
rates to similarly decline upon renewal. Moody's believes that as
a result, performance in 1999 will show a loss in excess of $15
million (the fiscal year-end numbers have not yet been released)
and EBITDA to interest coverage to be in the 0.5 times range.
(The company reported a loss of $11.1 million in the first six
months of 1999 compared to earnings of $3.6 million for the
period the year earlier.) As a result of the losses and the need
to accelerate the timing of a special survey costing about $1.5
million for one vessel, the company's liquidity position has been
squeezed. Moody's believes that working capital position is
negative and that additional flexibility from the stretching of
trade payables is not possible.

Equimar Shipholding Limited and B+H Ocean Carriers Limited are
both Liberian corporations. The companies' administrative
headquarters are in Hamilton, Bermuda with technical and
commercial management headquartered in Singapore.


FAMILY GOLF: Secures Final Approval For $15MM In DIP Financing
--------------------------------------------------------------
Family Golf Centers Inc. (FGCIQ) announced today that it received
final approval of the bankruptcy court of its previously
announced $15 million debtor-in-possession ("DIP") credit
facility from its existing working capital lender, The Chase
Manhattan Bank.

The company said that the entire DIP facility is now available
for, among other things, funding working capital and other post-
petition expenses of Family Golf and its U.S. subsidiaries.

As previously announced, on May 4, 2000, Family Golf and all of
its U.S. subsidiaries filed voluntary petitions with U.S.
Bankruptcy Court for the Southern District of New York to
reorganize under chapter 11 of the U.S. Bankruptcy Code.

Family Golf Centers is an operator of golf centers in North
America. The company's golf centers provide a wide variety of
practice and play opportunities, including facilities for
driving, chipping, putting, pitching and sand play and typically
offer full-line pro shops, golf lessons and other amenities such
as miniature golf and snack bars. The company also operates
sports and family entertainment facilities, including ice rinks
and Family Sports Supercenters. Currently, the company owns,
operates and has under construction 111 golf facilities and 19
ice rink and family entertainment facilities in 23 states and
three Canadian provinces.


FRANCHISE MORTGAGE: Fitch Downgrades Loan Receivables Trust
-----------------------------------------------------------
Fitch downgrades the following classes of notes under FMAC Loan
Receivables Trust, series 1997-C (1997-C): Class B from `AA' to
`AA-', class C from `A' to `A-', class D from `BBB' to `BBB-',
class E from `BB' to `B-' and class F from `B' to `CCC'. Under
FMAC Loan Receivables Trust Series, 1998-A (1998-A) the ratings
on the following classes of notes are also downgraded: Class E
from `BB' to `BB-' and class F from `B' to `B-'. The rating
downgrades are based upon the realized losses on loans related to
one restaurant borrower with principal divided between 1997-C
($7,135,718) and 1998-A ($2,310,854) and do not impact any other
securitizations originated by Bay View Franchise Mortgage
Acceptance Company, LLC (BVFMAC). The Rating Watch Negative
remains for all classes of 1997-C and for classes C, D, E and F
for 1998-A.

The losses in 1997-C and 1998-A are the result of a recently
issued bankruptcy judgement on a restaurant borrower where a sale
of the bankruptcy estate was ordered by the court. The purchase
price allowed the special servicer to recover less than
$1,000,000 on the principal balance of $9,446,572 for the
collateral units (no other offers on the units were submitted
despite public advertising). After servicer advances and expenses
are re-paid to the special servicer, there will be no recoveries
to either 1997-C nor 1998-A.

It should be noted that both 1997-C and 1998-A have additional
defaulted borrowers. In 1997-C and 1998-A there is an additional
restaurant company with leasehold collateral that has been
foreclosed upon by the special servicer. Approximately 88% of the
principal balance of this borrower is in the 1997-C
securitization. Currently, a management team has been hired to
operate the stores, stabilize operations and prepare the
restaurant company for sale in the future. The timing of this
sale has yet to be determined by the special servicer.

In 1998-A there is also an energy borrower that has defaulted
with fee simple collateral. The special servicer has foreclosed
upon the collateral and is actively pursuing a cash sale of the
company to the highest bidder. The special servicer feels the
bidding process will be completed within 120 days. The subject
sites represent a major share of the Atlanta market for a tier 1
concept (Exxon). Thus, Fitch has greater confidence that
relatively higher recoveries will be achieved in relation to the
defaulted restaurant company.

Fitch will continue to closely monitor the workout process of
each defaulted borrower to determine the potential impact on each
securitization once recoveries are realized by BVFMAC as special
servicer. In addition, BVFMAC has continued to support each of
the securitizations through servicer advances on each defaulted
borrower.


GOLDEN OCEAN: Approval of Term Sheet
------------------------------------
The Official Committee of Unsecured Creditors of Golden Ocean
Group Limited, et al. seek court approval of the Term Sheet for
the proposed joint plan of reorganization to be funded by
Frontline, Ltd., a Break up fee of $2 million and expense
reimbursement of Frontline, Ltd.  As more fully set forth in the
Term Sheet, Frontline will fund the joint plan of reorganization
with cash, its own publicly traded common stock, warrants to
purchase additional common stock, and certain other property in
exchange for issuance of all of the capital stock of the
reorganized debtors.  

Holders of administrative claims would be paid in full up to
$11.5 million, after which additional expenses would reduce
amounts available to a litigation trust to be formed pursuant to
the proposed plan of reorganization and to an employee severance
pool to be established by the reorganized debtors;

Holders of unsecured priority claims will be paid in full in cash
upon the effective date of the debtors' joint plan of
reorganization;

Holders of general unsecured claims will receive a combination of
cash equal to 5% of the allowed amount of such holder's claim,
and distributed pro rata per $1 million face amount of allowed
unsecured claim, 4,280 Frontline common shares with a guaranteed
floor price of $10 and maximum cap price of $12.21 and warrants
for 2,000 Frontline common shares with a strike price of $12.21
exercisable for a period of five years; in addition, notheholders
shall receive additional consider in consideration for the
release of certain upstream guarantees given by certain of the
debtors' subsidiaries.

Other continent guarantee claims existing in favor of creditors
holding secured claims against the vessel-owning subsidiaries
shall be assumed by the reorganized debtors, the face amount of
which exceeds $1 million; and

All existing equity and equity-related instruments, including
without limitation, common stock, options and warrants, shall be
canceled.


GOLDEN OCEAN: Motion To Terminate Exclusivity
---------------------------------------------
The Official Committee of Unsecured Creditors of Golden Ocean
Group Limited, et al, debtors, seeks a court order terminating
the debtor's exclusivity periods with respect to filing and
acceptance of a plan of reorganization.  

The Committee currently consists of the following entities:

Bankers Trust Company, Kawasaki Heavy Industries, Capricorn
Transport, Inc. (c/o Sumitomo Corp), Sea Winner Shipping Corp.
and Hyacinth Shipping Corp. (c/o Nissho Iwai Corporation); Bright
Future Maritime SA (c/o Mitsubishi Corp), Griffin Shipping,
Inc.(c/o Tomen Corp) DDJ Capital Management LLC and US Bancorp
Investments, Inc.

The Committee believes that the Frontline Term Sheet presents the
highest and best percentage recovery for the Debtors' estates.
Termination of exclusively periods ins necessary to preserve the
value of the debtors' estates by authorizing the Committee to
file a plan of reorganization.  To comply with the time-frame set
forth in the Frontline term sheet, the Committee believes it must
obtain the authority to file and serve a joint disclosure
statement and joint plan of reorganization that implements the
transaction set forth in the Frontline term Sheet as quickly as
possible. .  The plan of reorganization will contemplate an
effective date of October 1, 2000.


GS TECHNOLOGIES: Moody's Downgrades Notes
------------------------------------------
Approximately $250 Million of Debt Securities Affected

New York, June 06, 2000 -- Moody's lowered its ratings for GS
Technologies Operating Co., Inc. (GSTOC) due to the company's
weak cash flow, prospects for a continuation of difficult market
conditions for many of its products, and very high leverage.
GSTOC's senior implied rating was lowered to Caa3 from B3.
GSTOC's $125 million of 12% senior unsecured notes due 2004, and
$122 million of 12.25% senior unsecured notes due 2005, were both
downgraded to Ca from Caa1. The company's senior unsecured issuer
rating was lowered to Ca from Caa2. The rating outlook remains
negative.

While GSTOC is expected to perform somewhat better in 2000 than
1999, Moody's expects operating cash flow will fall far short of
covering interest expense and capital expenditures. Parent
company GS Technologies Corporation reported EBITDA of $18.6
million in 1999, its worst year since its formation in 1993.
EBITDA should be higher in 2000, aided by modestly higher wire
rod prices and reduced losses from American Iron Reduction (AIR),
the company's 50%-owned DRI joint venture. However, Moody's
anticipates cash flow from GS Technologies' mill liner and
grinding media businesses will decline in 2000 as weak metal
prices and mining company consolidations will reduce shipments
and restrain prices for these products. Overall, Moody's is
forecasting consolidated EBITDA for 2000 in the range of $30 to
$37 million, which is less than interest expense. Capital
expenditures, which the company had at one time estimated to be
$33 million for the year, will raise year-end total debt above
the March 31 balance of $321 million. Under these assumptions, GS
Technologies could end 2000 with debt to EBITDA of around 9
times, and it will have negative equity.

Moody's is concerned that GSTOC's cash flow may never expand to a
level that will allow it to adequately service debt and fund
maintenance capex. The implications of this in terms of
enterprise value, refinancing risk, and expected loss are the
primary factors behind Moody's downgrade. GSTOC's best year was
1997, when it reported EBITDA of $73.6 million. This exceeded
interest and capex by $13.8 million. In every other year since
1994, when GSTOC issued the 12% senior notes, its EBITDA has been
less than interest and capex. And the outlook for GSTOC's
business is arguably less favorable today than it was from 1995
to 1998, given today's higher wire rod imports, lower rod prices,
lower metal prices, and a more fragile US economy.

GSTOC received $68.5 million in cash in the first quarter of 2000
from the sale of Florida Wire and Cable. About half of the sales
proceeds were used to repay debt. The company has the option of
selling other significant assets. GSTOC also arranged a new $130
million five year credit facility in the first quarter. The
credit facility is guaranteed by GS Technologies Corporation,
which also guarantees the senior notes. The $120 million
revolving credit portion of the facility is secured by current
assets and the $10 million term loan is secured by fixed assets.
The revolver is subject to a borrowing base, has a $25 million
availability reserve, but has no financial covenants. Unused
availability under the revolving credit facility was $24.5
million as of March 31, 2000.

GSTOC has applied for a $50 million five year senior secured bank
loan that will be guaranteed by the US government under the
provisions of the Emergency Steel Loan Guarantee Act of 1999. It
should find out whether or not its application was accepted by
the Emergency Steel Guarantee Loan Board in late June or July.
GSTOC may have little financial flexibility if it is not
successful in arranging the government guaranteed loan.

GSTOC operates two steel minimills and two foundries in the US,
and GS Technologies operates several grinding media facilities
and joint ventures internationally. The company is headquartered
in Charlotte, NC.


HARADA INDUSTRY CO.: Group loss widens in FY99
----------------------------------------------
Harada Industry Co. (6904) has reported a 1.24 billion yen
consolidated pretax loss for fiscal 1999, up from the 815
million yen loss projected earlier and the 749 million yen
loss for fiscal 1998.

A new computer system installed at the major antenna
manufacturer's U.S. subsidiary experienced problems,
boosting transport costs by just over 200 million yen. The
unit also faced increased payments for personnel reduction.

The company took a 260 million yen extraordinary loss for
inventory markdowns at subsidiaries, resulting in a
consolidated net loss of 1.46 billion yen, larger than 988
million yen the year before. Group sales fell about 20% to
17.88 billion yen. (Nikkei  06-Jun-2000)


HARRISBURG EAST: Agrees To Sell Mall
------------------------------------
The Patriot-News reports on June 1, 2000 that Harrisburg East
Mall, an 890,000-square-foot shopping center will be offered for
sale.  The mall being sold and the planned auction of the
property is scheduled to begin at 10 a.m. on July 18 and will be
conducted by EQK Realty Investors.


HAZAMA CORP.: Stock distressed as the company
---------------------------------------------
Hazama Corp. (1837) announced May 24 that it is asking its
creditors to forgive 105 billion yen in outstanding debt,
and on May 29, its shares fell 7 yen to a record low of 45
yen.  On Friday, they closed at 46 yen.

On May 26, Dai-Ichi Hotel Ltd. (9710), which has been
asking Long-Term Credit Bank of Japan and other creditors
to forgive loans, filed for protection under Japan's
bankruptcy laws. LTCB is also Hazama's top creditor, so
there are fears that the negotiations on its debt waiver
may not go well.

Hidenori Kawasaki at Kokusai Securities Co. says retail
margin players are engaged in both buying and selling. It
appears that corporate investors are unwinding cross-
shareholdings. Moreover, margin players who bought the
stock when it was near last December's high of 86 yen are
selling as the due date for closing out these transactions
approaches.

Many market watchers are concerned about the direction of
the company's rehabilitation plan.  Along with using debt
waivers to help dispose of nonperforming assets held by
both the parent and its group companies, a main pillar of
Hazama's rehabilitation strategy is its plan to roughly
halve its interest-bearing liabilities to 156 billion yen
over the next five years.

An analyst affiliated with a European brokerage firm says
that with the entire construction industry continuing to
decline, he does not believe the company will be able to
survive without major reorganizing.  Some concrete
incentives will be required for the stock to stage a real
rebound. (Nikkei  05-Jun-2000)


HEDSTROM HOLDINGS: Committee Taps Saul, Ewing, Remick & Saul
------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
cases of Hedstrom Holdings, Inc., et al. seeks authorization to
retain and employ Saul, Ewing, Remick & Saul LLP as local counsel
for the Committee.  The firm will be compensated at its current
standard d hourly rates ranging from $105 per hour for a
paralegal to $325 per hour for a partner.
The firm will provide, among others, the following legal
services:

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

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

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

Negotiate consensual plans of reorganization;

Perform all other legal services for the Committee which may be
necessary and proper in these proceedings.


JOAN AND DAVID: Propose Order To Pay Severance and Retention
------------------------------------------------------------
The debtors propose an order for the court authorizing the debtor
to pay retention bonuses to certain essential employees and
severance payments to certain employees who will be terminated
due to store closings.

The aggregate amount of the Retention Bonuses equals $93,500.  
The severance payments total $29,500.


JOAN AND DAVID: Tap Leonard B. Pack as Special Counsel
------------------------------------------------------
The debtor, joan and david helpern incorporated seek authority to
retain Leonard B. Pack as special corporate transactional counsel
for the debtor.  As special corporate counsel, Pack will perform
necessary legal services in connection with the potential sale of
the debtor's business as a going concern or such other
transaction regarding the sale of substantially all of the
debtor's assets.

The debtor's representatives are currently negotiating in earnest
with several third parties regarding a potential acquisition of
the debtor's business as a going concern.  In light of the
current negotiations, the debtor has determined that the
assistance of corporate counsel to work with its other
professionals is necessary at this time.  Pack's current
customary hourly rate is $350 per hour.


KAWASAKI HEAVY INDUSTRIES: S&P downgrades citing debt woes
----------------------------------------------------------
US credit ratings agency Standard & Poor's yesterday
downgraded Japan's Kawasaki Heavy Industries (KHI), citing
the firm's struggle to lower debt as its earnings and sales
fall.

KHI's debt rating, based on public information, went down
to a predominately speculative BB from medium-grade BBB.
Japan's third-largest heavy equipment maker had total debt
of 487 billion yen (US$4.51 billion) at the end of March,
resulting in a total debt-to-capital ratio of 73 percent,
the credit risk appraiser noted.

Currency fluctuations had hurt KHI's earnings, along with
weak orders in its shipbuilding, aerospace and industrial
equipment operations.  A new management was forging
alliances and reducing labor costs in an effort to compete,
Standard & Poor's said in a statement.

"Nonetheless, these efforts are still at an early stage,
and it will be several years before KHI can fully benefit
from its improved cost position."

The company's restructuring efforts would drive up costs,
so it could not expect any major reduction of its debt
soon, the agency added.  "As a result, the company's cash-
flow protection measures should remain weak in the near
term."

KHI's net loss widened to 18.6 billion yen in the year to
March from 6.1 billion a year before. Its revenue shrank to
1,150 billion yen from 1,200 billion.  The company said
after posting the losses on May 26 that it would close two
machinery plants in the current fiscal year to March 2001.

In April Standard & Poor's main rival, Moody's Investors
Service, said it might downgrade the ratings of KHI and its
two bigger competitors, Mitsubishi Heavy Industries and
Ishikawajima-Harima Heavy Industries (IHI).

One key concern for KHI and IHI was the rising threat posed
by South Korean shipbuilders, whose profitability has been
enhanced by the depreciation of the won against the
Japanese yen, Moody's said.  (Business Day  06-Jun-2000)


LAROCHE INDUSTRIES: Committee Objects To Chanin Capital
-------------------------------------------------------
The Official Committee of Unsecured Creditors of LaRoche
Industries Inc. and LaRoche Fortier Inc. objects to the
application to retain Chanin Capital Partners as Financial
Advisors.

In light of the fact that Chanin had already received $300,000 in
connection with services already rendered, and much of the
restructuring discussions will involve a deleveraging of the
company by converting existing debt to equity, the Committee
objects tot he $100,000 monthly advisory fee.  After some period
of time, the Committee asks that the fee be reduced to reflect
the fact that a substantial amount of the work that Chanin has
been retained to perform should have been completed.  The
Committee also objects to the Restructuring Transaction Fee of
approximately $1,450,000.


LEVITZ: Motion For Approval of Seventeenth DIP Facility Amendment
-----------------------------------------------------------------
The Debtors advise the Court that, as of May 25, 2000, the total
Overadvance Term Loan Commitment was $35,000,000 and $30,000,000
is funded.  The Debtors further advise that they expect to file a
motion seeking approval of an Eighteenth Amendment to (i) extend
the DIP Facility to December 31, 2000, (ii) waive violations of
EBITDA covenants required as of March 31, 2000, and (iii) provide
for an increase in the Overadvance Term Loan commitment to a
total of $45,000,000.  

Additionally, the Debtors report that they anticipate arranging
exit financing before the Confirmation Date comprised of a
working capital revolver with a total commitment of approximately
$95,000,000.  The terms, conditions, collateral requirements and
borrowing availability under the working capital facility are
expected to be similar to the current DIP Facility.  In addition,
LHFI is expected to obtain a secured term note in the approximate
amount of $47,000.000.  Proceeds from the secured term note will
be used to fund Levitz' operating and working capital
requirements.  (Levitz Bankruptcy News Issue 45; Bankruptcy
Creditor's Services Inc.)


MICROBEST: Files Chapter 11 Petition
------------------------------------
Microbest, Inc. (OTC Pink Sheets: MBST) announced on June 6, 2000
that it filed June 1, for bankruptcy protection under the
provisions of Chapter 11 to protect the shareholders, vendors,
employees and customers from two former insiders who made
a hostile attempt to acquire the assets of the Company to satisfy
a judgment they received as a result of a settlement negotiated
in 1998.

Michael J. Troup, CEO, said, "While engaged in good faith
negotiations to resolve the issue, we became aware of separate,
aggressive maneuvers to obtain control of the Company's cash flow
and physical assets.  We moved quickly to protect the Company."

Troup further said, "The Company was attempting to expedite the
resolution as it was required under the terms of a $2,500,000
financing commitment by Bruderman Brothers, Inc., a Wall Street
investment banking firm with which we have had a relationship for
several years.  We had financing in place, and with the exception
of reaching a settlement on this issue, we had responded to the
remaining concerns of the SEC regarding our 'fully reporting
status,' a requirement to get back on the NASD Bulletin Board."

"It is our intention to present our plan of re-organization to
the Bankruptcy Court as quickly as possible," CFO Bill Breslin
stated.  "Having had strong relationships with our vendors for a
number of years, I have assured them of our intentions to fully
protect them, and they are all working with us to ensure a
constant flow of our products to our growing customer base."
"Our proprietary BioCleansing(R) Systems are becoming the
standard for meeting the Federal requirements for
'Environmentally Preferable' cleaning solutions," Troup
explained.  "Our systems employing microbial cultures and
high-tech cleansers are focused on commercial kitchen and
restroom cleaning and are acknowledged to clearly out-perform
traditional caustic cleaners. They are user-safe, and digest
organic waste such as grease, oils and urine, eliminating
odors, keeping drain lines free, reducing slip/fall accident risk
and protecting tile and grout.  The growing demand for our
products and technology reflects a heightened commitment by both
our government and private sector communities to solve practical
problems and protect workers and our environment."


PACIFIC GATEWAY: Exchange Concludes New Agreement With Its Banks
----------------------------------------------------------------
Pacific Gateway Exchange, Inc. (Nasdaq: PGEX) announced it has
reached a restated and amended credit agreement with its banks.  
In combination with its recently concluded sale of assets to
Multimedia Fiber Network, the Company's restated and amended
credit agreement increases the Company's working capital by
approximately $16.6 million, satisfies the $25 million repayment
obligation that was due May 15, 2000 and waives all existing
defaults.

Under its restated credit agreement with Bankers Trust Company
and Bank of America, N.A., cash proceeds of approximately $28.8
million from the sale to MFN of the Company's interests in the
Japan-U.S. Cable Network and its related Japanese subsidiaries
were used to permanently reduce its outstanding obligations to
the banks from $75.6 million to approximately $47 million.  As
part of the deal, the banks have agreed to a continuing revolving
line of credit of approximately $47 million, all of which is
outstanding after the Company borrowed the balance of
approximately $16.6 million of the MFN proceeds.  On future asset
sales, including the sale of its interest in the TAT-14 cable
network to MFN for approximately $10 million, the banks agreed to
allow the Company to re-borrow 50% of any such future net
proceeds with the remaining 50% used to permanently reduce the
obligations under the line of credit.  The revolving line of
credit matures November 20, 2000.

The Company is continuing to pursue other strategic and financing
alternatives, including selected asset sales, accounts receivable
and asset based lending, and private equity investments.

The Company continues to consolidate its business lines to focus
on data and VoIP services.  In line with that strategy, the
Company previously announced a letter of intent for the sale of
its U.S. retail operations.  In addition, the Company has taken
prudent steps to reduce its operating expenses and in that regard
has significantly reduced employee headcount.  Additional cost
cutting measures continue to be implemented as the Company
transitions its business focus to its data initiatives.

Pacific Gateway is a global facilities-based communications
carrier providing voice, bandwidth, data and Internet services to
a wide array of domestic and international carriers, ISPs, and
retail customers.

Pacific Gateway, through its wholly-owned subsidiary, IECom,
provides voice, data access, and travel services to the ethnic
small office/home office and residential markets in the U.S.  
Onyx Networks, also a wholly-owned subsidiary
of Pacific Gateway, is a global provider of localized IP network
solutions, delivering high-performance Internet connectivity,
collocation and remote content solutions to Global Enterprise
Customers and Network Service Providers worldwide.

Onyx is able to substantially extend its global reach and connect
major metropolitan areas around the world by leveraging the 45
operating agreements in 29 countries and ownership in 32 undersea
fiber optic cable systems of its parent company, Pacific Gateway
Exchange.  In addition, Onyx has committed peering sessions
totaling 274, spanning UK, U.S., and Japan. Onyx presently has
Internet exchange points in MAE East, MAEWest, Dallas, PAIX, Pac
Bell NAP, Equinix -SJC, Ameritech Advanced Data Services, LINX,
and JPIX and is in the process of entering the Amsterdam Internet
Exchange.

Onyx currently offers global Internet services in the following
cities: Hong Kong, Tokyo, Sydney, San Francisco, Los Angeles,
Dallas, Chicago, New York, Washington D.C., Atlanta, Miami, Sao
Paulo, and London.

In addition, Pacific Gateway's domestic network spans 12 major
metropolitan cities.  The Company presently operates switching
and international gateway facilities in New York, Los Angeles,
Dallas, the United Kingdom, Russia, New Zealand, Japan,
Australia, and Germany.

Additional Pacific Gateway information is available at
www.pgexch.com. IECom information is available at www.go-
iecom.com.  Onyx Networks information is available at
www.onyx.net.


SAFETY COMPONENTS: Deadline For Filing Proofs of Claim
------------------------------------------------------
On May 24, 2000, the US Bankruptcy Court for the District of
Delaware entered an order establishing July 7, 2000 as the
general claims bar date in the Chapter 11 cases of Safety
Components International, Inc. and its affiliates.


SAFETY COMPONENTS: Implementation of Severance Program
------------------------------------------------------
Safety Components International, Inc. and its affiliated debtors
seek authority for implementation of a Severance Program for Key
Executives.

The purpose of the Severance program is to minimize executive
management turnover and retain four key executives in a tight
labor market, thereby ensuring that such key management members
continue to provide essential management services during this
period.  The maximum cost of the severance benefits under the
Severance Program is approximately $1,237,500.  Safety Components
has identified four key executives to receive these benefits upon
a triggering event including loss or material change in
employment.


SERVICE MERCHANDISE: Motion To Restrict Claim Trading Activity
--------------------------------------------------------------
The Debtors tell Judge Paine that certain claim traders requested
modifications to the proposed procedures.  Negotiation,
accordingly, resolved objections raised by HSBC Bank USA, a
secured lender, and Bank of New York and State Street Bank &
Trust Company, the indenture trustees.

Contrarian Capital Management, LLC, Touchstone Capital, LLC and
Verde Partners, the Debtors say, can't be satisfied.  The Debtors
have tried to negotiate, but conversations are unproductive.  

The Debtors present Judge Paine with a Revised Proposed Order
incorporating six principal modifications to the Initial Proposed
Order:

(1) Application Limited to Substantial Claimholders

Instead of requiring the filing of a notice or certificate for
any transfer of claims, the restrictions under the Revised
Proposed Order will apply only to acquisitions by Substantial
Claimholders with $25 million or more of claims against the
Debtors. The Debtors believe the number of claimholders involved
will probably be less than 10.

(2) No Stay for Transfer of up to $250 Million But More Reporting
Above That

While the Initial Proposed Order would have stayed any proposed
transfer by large claimholders of claims to which the Debtors
objected pending a hearing, the Revised Proposed Order, as the
Debtors describe, imposes no restrictions on Substantial
Claimholders to acquire claims in the aggregate up to at least
$250 million.

Because of this, the Debtors argue that if the Contrarian Group
is correct in their estimation, that approximately $120 million
of Claims are currently in the hands of Substantial Claimholders,
then such Substantial Claimholders, in the words of the Debtors,
are allowed to more than double their holdings in the aggregate
before restrictions on further acquisitions would be imposed
under the Order.

Alongside this, the Revised Proposed Order requires more detailed
information reporting from claimholders holding, or planning to
hold, substantial amounts of claims so that the Debtors can use
the information to establish a mechanism to monitor the total
amount of claims, and if this exceeds a threshold, a Substantial
Claimholder would be required to provide the Debtors with notice
and an opportunity to object to such acquisition at a hearing
before the Court.

(3) Elimination of Risk of Selective Enforcement

In response to the Contrarian Group's concern over possible bias
in challenging trades, the Debtors draw attention to a "first
come, first served" rule provided in the Revised Proposed Order.
Moreover, the Debtors contend, the high threshold in the holding
of claims before the Debtors could object reduces the possibility
of bias and cronyism.

(4) Provision for Rolling and Flexible Thresholds

The Revised Proposed Order would provide for a rolling review and
revision of both the definition of a Substantial Claimholder and
of the definition of the maximum amount of claims Substantial
Claimholders may acquire in the aggregate. The Debtors say that
such review and revision will be done automatically as the
Debtors' information on the amount of outstanding Claims is
refined after the Claims Bar Date.

(5) Elimination of Indenture Trustee Duties Other Than Notice

The Debtors point out that the only duty that the Revised
Proposed Order imposes on the indenture trustee will be to notify
the holders on a quarterly basis.

(6) Exemption of Secured Claims

To remove unnecessary restriction on the trading of secured
claims, which is not applicable to satisfaction of the IRC
section 382(1)(5) safe harbor, considering that holders of
secured claims are not expected to receive stock in exchange of
the secured claims, the Debtors have excluded such secured claims
from the Revised Proposed Order, with respect to reporting
requirements governing Substantial Claimholders, to the extent
these claims are secured.

The Debtors describes the Contrarian Group's Objection to the
Revised Proposed Order as being based on a misapplication of law
and fact.

The Debtors accuse the Contrarian Group of objecting in order to
enhance the profit-making opportunities of a handful of new Claim
holders at the expense of the protection offered by the Revised
Proposed Order for the benefit of the Debtors, the estate and the
other Claim holders.

Accordingly, the Debtors ask the Court to overrule the Contrarian
Group's objections and approve the Revised Proposed Order.

Entertaining arguments from all sides, Judge Paine directs that:

(1)  A Substantial Claimholder shall provide a Notice of Status
to the Court and to the Debtors of their status as a Substantial
Claimholder on the later of (a) 60 days after entry of the Order
or (b) 10 days after becoming a Substantial Claimholder.

(2)  A Substantial Claimholder is (i) any beneficial owner of
claims or an option or a contract to acquire claims in an
aggregate principal amount up to the "Triggering Amount",
excluding secured claims, or (ii) any controlled entity through
which a Substantial Claimholder owns an indirect interest in
claims against the Debtors.

(3)  The initial Triggering Amount shall be $25 million,
calculated to equal approximately 4% of the Debtors' total
unsecured claims, estimated at $625 million. If the estimation is
adjusted for more than $100 million, the Triggering Amount will
be recalculated.

(4)  Any person who has previously given Notice of Status but
ceases to be a Substantial Claimholder shall provide a Notice of
Termination of Status.

(5)  Acquisitions by any Noncompliant Claimholder shall be null
and void and the Debtors may further enforce remedies.

(6)  A Substantial Claimholder shall provide a Notice of Intended
Acquisition before any transfer of claims is effected.

(a) In the absence of objections, the acquisition, other than
Excluded Transfers, will be effective 10 days from the Notice.

(b) The Debtors may file an objection with the Court within 10  
calendar days on the grounds that such transfer may limit the
Debtors' ability to utilize their Net Operating Loss carryovers.
In such event, approval of transfer will be stayed pending a
hearing which will be on tbe next scheduled Omnibus hearing date
that is at least twenty days after the filing of the objection.

(7)  After 75 days since the entry of the Court Order on April 6,
a Substantial Claimholder may ask the Debtors about the Non-
Qualifying Amount and get a reply within 5 business days. If the
Non-Qualifying Amount is less than $250 million, the Substantial
Claimholder may provide an Expedited Notice on the date of the
advice for acquisition of claims not exceeding the Non-Qualifying
Amount.

(a) The term Non-Qualifying Amount shall mean the sum of

(i) the total amount of claims
  
(A) held by Substantial Claimholders not being legal holders of
such claim for at least 18 months prior to March 15, 1999
with respect to Service Merchandise or March 27, 1999 with
respect to the Affiliate Debtors; or
  
(B) not arising in the ordinary course of the trade or business
     
of the Debtors and was not held by such Substantial
Claimholder at all times since the incurrence of such
claim; and

(ii) all outstanding Reserved Amounts.

The initial amount of the Non-Qualifying Limit shall be $250
million, calculated to equal approximately 40% of the Debtors'
unsecured claims.

(b)  A Reserved Amount shall be deemed to remain outstanding
until the earlier of (i) the receipt by the Debtors of a Notice
of Excluded Transfer, or (ii) twenty days after the date of the
Expedited Notice relating to such Reserved Amount. In calculating
the Non-Qualifying Amount, the Debtors shall be entitled to rely
upon all Notices of Status, Notices of Intended Acquisition,
Notices of Disposition, and Notices of Termination of Status they
receive.

(8)  A Substantial Claimholder shall provide the Debtors with a
Notice of Disposition within 10 days after effectuating any
disposition of claims, accompanied by a Notice of Termination of
Status as the case may be.

(9)  Any indenture trustee(s) or transfer agent(s) for any class
of bonds or debentures of the Debtors shall provide to the
registered holders on a quarterly basis a notice regarding the
Court Order, and a registered holder shall, in turn, provide such
notice to any holder for whose account such registered holder
holds such bonds or debentures.

(10) Any Person who sells Claims against the Debtors in the
aggregate principal amount of at least $1 million to another
Person shall provide a copy of the Court Order to the purchaser.

(11) The Debtors shall serve a copy of the Court Order on the
parties on the Master Service List established in these cases, as
well as on the parties on the 2002 List. (Service Merchandise
Issue 12; Bankruptcy Creditors' Services Inc.)


SILVER CINEMAS: Taps Latham & Watkins as Special Counsel
--------------------------------------------------------
The debtors, Silver Cinemas International, Inc., et al. seeks to
employ Latham & Watkins as special counsel to the debtors for
postpetition financing and general corporate advice.  Latham has
agreed to be compensated on a time-spent basis, based upon its
usual and customary hourly rates and fees, ranging from $110 per
hour to $450 per hour.

It is anticipated that the firm will advise the debtors with
regard to documentation of a DIP financing agreement and review
of periodic filings, if any, filed by the debtor with the SEC.


STAGE STORES: $450 Million DIP Facility Receives Interim Approval
-----------------------------------------------------------------
On Friday, Hon. Wesley W. Steen (S.D. Texas) approved a number of
first-day motions and a  debtor-in-possession (DIP) facility of
$450 million on an interim basis for Houston-based Stage Stores
Inc., which filed for chapter 11 on Thursday in Houston along
with two subsidiaries. A hearing for the final approval is set
for June 26. The DIP facility is funded by a group of banks
for which CITICORP USA INC. is the agent. Bankruptcy counsel are
Andrew E. Jillson and Lynnette R. Warman of Jenkens & Gilchrist
PC, Dallas. Stage Stores sells brand-name apparel, accessories,
cosmetics and footwear to small communities in the U.S.,
primarily under the names Stage, Bealls and Palais Royal. (ABI
07-June-00)


TEU HOLDINGS: Order Approves Retention of Liquidation Consultants
-----------------------------------------------------------------
By order entered on May 16, 2000, the US Bankruptcy Court for the
District of Delaware entered an order approving the retention of
Gordon Brothers Retail Partners, LLC and Maynard's Auctioneers,
Ltd., as liquidation consultant to the debtors.


TEU HOLDINGS: Seeks Authority to Retain Sales Consultant
--------------------------------------------------------
The debtor, TEU Holdings, Inc. and its debtor affiliates seek
entry of an order authorizing the debtors to retain Daley-Hodkin
Corporation as sales consultant for the sale of certain of the
debtors' trademarks, tradenames, and retail and catalog mailing
and customer lists.

Among other needs the debtors require assistance in marketing the
assets for sale and in managing the sale process.  The debtors
have determined that it is prudent to retain the services of a
sales consultant to assist them with the sale of the Assets so
that the value of the assets is maximized for the debtors'
estates.  Daley-Hodkin has agreed to be compensated for its
services through a ten percent buyer's premium charged to each
buyer of any portion of assets to be sold.  The buyer's premium
shall not be considered property of the estate and shall
constitute Daley-Hodkin's entire fee for all of its services.  In
the event that there are no acceptable bids received for the
Assets or the bids received total less than $100,000, Congress
Financial Corporation has agreed to pay Daley-Hodkin a $10,000
fee and to reimburse Daley-Hodkin for any out-of-pocket expense
associated with the sale of the Assets up to $30,000.


WASTE MANAGEMENT: Subsidiary Completes Sale in Australia
--------------------------------------------------------
Waste Management Inc. (NYSE:WMI) today announced that its wholly
owned subsidiary has completed its previously announced
transaction to sell its waste services operations in Australia to
Paris-based SITA. At its completion, the transaction generated
proceeds of approximately U.S.$230 million.

The sale of the business in Australia stems from Waste
Management's strategy to re-focus the Company on its North
American solid waste operations. The Company's subsidiaries are
in discussions with other parties regarding the divestiture of
its other remaining international businesses, as well as non-core
and certain non-integrated solid waste assets in North America.
The Company intends to use the proceeds of these divestitures
primarily to reduce debt and to make selective tuck-in
acquisitions of solid waste businesses in North America.

Waste Management Inc. is its industry's leading provider of
comprehensive waste management services. Based in Houston, the
Company serves municipal, commercial, industrial, and residential
customers throughout the United States, and in Canada, Puerto
Rico and Mexico.


ZEGARELLI GROUP: Settles Lawsuit
--------------------------------
Zegarelli Group International, Inc. ("ZEGG") announced that it
settled the lawsuit with the buyers of its contract packaging
business.  As a result of the settlement, ZEGG will receive
$400,000 through August 2000 and will collect $ 1,700,000 in
quarterly installments over six years, plus interest.

ZEGG is currently operating under Chapter 11 of the Bankruptcy
Act. Alfred E. Booth, Jr., chief executive officer, stated that
the settlement will enable the Company to effect a settlement
with creditors.  The Company's business (principally marketing
its line of professional hair care products) is currently
operating at a very low level.  Mr. Booth stated that the
aforementioned payments may enable the Company to expand
operations.
                   *********

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
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Edem Alfeche and Ronald Ladia, Editors.

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

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