TCR_Public/000705.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, July 5, 2000, Vol. 4, No. 130

                   Headlines

ACME STEEL: Action on Loan Delayed
AHERF: Settles Fraud Charges With SEC
AIOC: Effective Date of Chapter 11 Plan of Liquidation
AMERICAN AIRCARRIERS: Announces Agreement With Bank
AMERICAN BANKNOTE: Extension of Cash Collateral

AMERISERVE: Talking With Wal-Mart Unit
APPLIED THERMAL: Files for Chapter 11
BORDEN CHEMICALS & PLASTICS: Agreement To Sell Certain Assets
BOSTON CHICKEN: Heinz Grows Boston Market Line
BROWN & SHARPE:  Possible Sale or Merger

CANADIAN AIRLINES:  Albert Court Approves Plan
CONNEAUT LAKE: Judge Rules That Trustee Takes Control Over Park
CWT SPECIALTY STORES: Compromise and Settlement With Committee
DYNEX CAPITAL:  Bankruptcy On Its Tail
ELCOTEL INC: Company In Default On Covenants

GENESIS HEALTH:  Hamilton Center Unaffected In Chapter 11
GENEVA STEEL: Board Approves Application for $110 Million Loan
HARNISCHFEGER: Motion To Amend DIP Facility
HILLSBOROUGH RESOURCES: Court Extends Protection Until August
HOLLYTEX CARPET: Owners Decide To Shut Down Plant

HYUNDAI GROUP: Agrees To Back Out Of Car Business
KITTY HAWK: Bond Prices Questionable
MONARCH DENTAL: Extends Loan Agreement
NORTON MOTORCYCLES: Pledges Shares To Circle Capital
OREGON STEEL:  Releases Second-Quarter Report

OWENS CORNING: Releases Expectations To SEC
PANDA GLOBAL: S&P Downgrades to `CCC' From `B-'
PATHMARK STORES: Prepack Bankruptcy Gives Control To Bondholders
PIC N PAY: Shoe Show To Take Over 73 Stores
PRIME CAPITAL: Negotiations Cease Between Prime and Finantra

RECOM MANAGED SYSTEMS: Files Chapter 11 Bankruptcy Petition
RELIANCE GROUP: Moody's Downgrades Ratings
SOGO CO.: Lenders to Forgive US$5.9 Billion
STRAND PROPERTIES:  Defaults On Mortgage Payments
TAYLOR CBI/COMMEMORATIVE BRANDS: Moody's Assigns/Lowers Ratings

TOYTIME INC: Involuntary Case Summary
TOYTIME: Involuntary Petition Filed on July 3, 2000
TRANSTEXAS GAS: Annual Meeting Set For July 25, 2000
WORLDPORT COMMUNICATIONS: Annual Meeting Set For July 21, 2000

Meetings, Conferences and Seminars

                   *********

ACME STEEL: Action on Loan Delayed
----------------------------------
Acme Steel Company announced it has been informed that action on
its loan application with the Emergency Steel Loan Guarantee
Board has been delayed subject to further discussions with the
Executive Director of the Board clarifying the loan application.

Stephen D. Bennett, Chairman of the Board, President and Chief
Executive Officer, of Acme Metals Incorporated (OTC Bulletin
Board: AMIIQ), the parent of Acme Steel Company, said, "I am
confident that the Company will be able to submit a plan of
reorganization to the Bankruptcy Court in the near future."

Acme Metals Incorporated, the parent company of Acme Steel
Company, through its operating subsidiaries, is a fully
integrated producer of steel, steel strapping and strapping
products, and welded steel tubing.  On September 28, 1998, Acme
Metals and its subsidiaries filed separate voluntary petitions
for protection and reorganization under Chapter 11 of the United
States Code.  The Company is in possession of its properties and
assets and continues to manage its business as debtor-in-
possession subject to the supervision of the Bankruptcy Code.  
Its common stock is listed on the Bulletin Board of the National
Association of Securities Dealers under the symbol AMIIQ.


AHERF: Settles Fraud Charges With SEC
-------------------------------------
The Securities and Exchange Commission announced that Allegheny
Health Education and Research Foundation has settled fraud
charges by agreeing to a cease and desist order, although the
non-profit didn't admit nor deny the allegations by SEC that it
inflated its 1997 income by more than $114 million and
misrepresented finances for subsidiary operations.  No fines were
imposed since the company is operating business under Chapter 11
Bankruptcy Protection.

"We hope this sends a clear message to those in the non-profit
health-care world that when they access U.S. markets, they have
to do so in a way that's fair and accurate," said Ronald Long,
district administrator in the SEC's Philadelphia office.


AIOC: Effective Date of Chapter 11 Plan of Liquidation
------------------------------------------------------
Edward G. Moran, the Chapter 11 Trustee of AIOC Corporation  and
AIOC Resources AG, announces that the effective date of his
Amended Joint Transnational Chapter 11 Plan of Liquidation for
those chapter 11 debtors was June 22, 2000, and that he made his
first distribution to creditors under the plan on June 29, 2000.
The plan provides for 100% distributions on all allowed
administrative and priority claims, and for distributions that,
in total, are estimated at approximately 19% and 27% on allowed
general unsecured claims against Corp. and Resources,
respectively.

The U.S. Bankruptcy Court for the Southern District of New York
confirmed the plan by order entered on June 2, 2000. In
accordance with the plan and the confirmation order, final
applications for payment of administrative expense claims and fee
claims must be filed with the Court, and served on all
appropriate parties, no later than July 12, 2000. Failure to
timely file and serve such applications shall result in such
claims being disallowed and forever barred and discharged. Copies
of the plan, the confirmation order, and the notice of the
occurrence of the effective date may be obtained electronically
by accessing the Court's website at: www.nysb.uscourts.gov.
Parties in interest may also obtain further information by
contacting the Chapter 11 Trustee, Mr. Edward G. Moran, at 212-
697-3515 (telephone) or 212-986-1530 (fax).

Before the commencement of their chapter 11 cases in April 1996,
Corp. and Resources were engaged, among other things, in the
purchase and sale of ferrous, nonferrous, and precious metals
with trading partners throughout the world, and maintained more
than twenty offices worldwide. In August 1996, Resources also
became the subject of an involuntary bankruptcy proceeding in
Zug, Switzerland, which is being administered by the Bankruptcy
Office for the Canton of Zug, Switzerland. The Swiss and U.S.
proceedings involving Resources have been administered and
coordinated under a Cross-Border Liquidation Protocol entered
into by and between the Chapter 11 Trustee and the Swiss
Bankruptcy Office, and approved by the U.S. Bankruptcy Court.

  
AMERICAN AIRCARRIERS: Announces Agreement With Bank
---------------------------------------------------
According to a report by The Press Enterprise Co. on June 27,
2000, American Aircarriers Support Inc., has reached an agreement
with bank lenders to continue funding for its operating capital
until Aug 1.  The aircraft maintenance company in San Bernardino
reported a first-quarter loss last month of $ 769,000 on revenues
of $ 14 million, suffering its loss for the first time ever.  It
resulted the technical default on the company's $100 million line
of credit.


AMERICAN BANKNOTE: Extension of Cash Collateral
-----------------------------------------------
American Banknote Corporation will present a stipulation and
order extending the use of cash collateral through September 30,
2000 to the Honorable Prudence Carter Beatty, US Bankruptcy
Court, Southern District of New York on July 17, 2000 at 12:00
noon.


AMERISERVE: Talking With Wal-Mart Unit
--------------------------------------
According to an article in The New York Times on July 1, 2000,
AmeriServe Food Distribution Inc. said that it was talking with
the McLane company unit of Wal-Mart Stores Inc. and other parties
concerning possible "strategic alternatives," including a sale of
assets or a partnership. AmeriServe, which is based in Addison,
Tex., called the discussions "preliminary" and subject to
bankruptcy court approval. McLane, which is based in Temple,
Tex., provides distribution services to convenience stores, mass
merchandisers and fast-food restaurants. It is owned by Wal-Mart.


APPLIED THERMAL: Files for Chapter 11
-------------------------------------
The Daily Oklahoman reports that Applied Thermal Systems Inc.
sent home all its manpower maintaining 5 from a total of 22.   
Neal Tomlins, attorney representing the Tulsa firm that designs
heat transfer equipment, says that the company "needs some
breathing room" and is in engaged in "highly specialized" work
for power plants.  Applied Thermal claimed assets of $5.8 million
and debts of $7.25 million upon filing with the Bankruptcy Court
for the Northern District of Oklahoma. And among the 20 largest
creditors that owes $ 4.62 million are two firms from Oklahoma
City, three from Canada, and five from Tulsa.  Firms from
Oklahoma listed $409,829 for ESCOA and $ 88,384 for Petrofab Inc.
of Moore.  Largest creditor listed that owed $ 1.66 million was
Express Metal Fabricators of Locust Grove.


BORDEN CHEMICALS & PLASTICS: Agreement To Sell Certain Assets
-------------------------------------------------------------
Borden Chemicals and Plastics Limited Partnership has signed a
definitive agreement to sell the formaldehyde and certain other
assets of its operating limited partnership to Borden Chemical,
Inc., a separate entity which is a subsidiary of Borden, Inc.,
for $48.5 million. As part of the agreement, BCI has an option to
acquire the operating limited partnership's methanol assets for
$3 million at year-end. The operating limited partnership will
own and operate the methanol assets through 2000, with the
intent of exiting the business at that time. The operating
limited partnership is also closing its nitrogen production
facilities, thereby completing the process of exiting all of its
non-vinyl based basic chemical businesses.

These actions follow the partnership's previously announced
strategic decision to become a focused polyvinyl chloride
producer and to realize value for its non-PVC businesses, which
are currently unprofitable with poor fundamentals.

Proceeds at closing will be $38.8 million, with an interest
bearing promissory note of $9.7 million due in six months. The
proceeds from the sale, net of deal cost, will be used to pay
down debt and reinvest in the PVC business. The transaction is
expected to result in a gain in the second quarter. Additionally,
the partnership expects the salvage value of its nitrogen
production facilities to moderately exceed the closing costs.

The closing of the sale of the formaldehyde assets is subject to
the receipt by the operating limited partnership of regulatory
approval and other necessary consents. Under the terms of the
agreement, BCI will acquire all of the operating limited
partnership's formaldehyde assets, along with methanol tankage
and dock facilities and related adjacent land.

The agreement provides for the immediate termination of the
nitrogen purchase contract between the operating limited
partnership and BCI, except for the sale and purchase of existing
inventory. The operating limited partnership will close its
ammonia and urea production facilities in July. Also, the
operating limited partnership will continue to supply BCI and
other methanol customers under contract for at least six months
and will make arrangements to supply product to other non-BCI
nitrogen customers. If it is still operating the methanol
facility at year-end, the operating limited partnership expects
to close the plant by the end of 2000 or early in 2001.

"This transaction represents a major positive step for the
partnership," said William H. Carter, chairman of the
partnership. "We are shedding businesses that are currently not
profitable and have poor long-term prospects based on the U.S.
natural gas costs currently exceeding $4.60 per mmBTU versus
offshore natural gas costs historically ranging between $0.25 and
$1.00 per mmBTU. Natural gas is the principle raw material for
methanol, ammonia and urea."

The impetus for change was the major downturn across all three
business lines that began in 1997. In December 1998, the
partnership announced the retention of Evercore Partners and
Salomon Smith Barney to explore strategic alternatives.  The
options explored included joint ventures, mergers or alliances,
or the sale of some or all of the businesses. None of the
discussions that took place during 1999 resulted in a transaction
proposal that the partnership deemed in the interest of the
unitholders. More recently, the partnership retained the
consulting firm A.D. Little to assist in developing strategic
business plans for the various operations. A.D. Little also
advised the partnership on the final transaction.

"For more than a year, we have reviewed a range of strategic
alternatives and discussed possible transactions with a number of
parties," said Carter. "The BCI offer clearly represents the best
value for unitholders. The transaction enables us to eliminate
much of our exposure to natural gas, realize a fair value for
these non-core assets, and focus exclusively on our profitable
PVC business."

Carter said that the operating limited partnership's
methanol/formaldehyde and nitrogen products businesses have been
breakeven to cash negative for more than two years as a result of
high natural gas prices and worldwide overcapacity. Also, U.S.
natural gas prices have been elevated for some time with no
improvement on the cost side foreseen. In addition, increased
offshore methanol and nitrogen products supported by far cheaper
sources of natural gas are expected to enter the U.S. market,
weakening the domestic supply and demand balance. The overall
demand for methanol is also expected to decline as MTBE is phased
out as a fuel additive.

Carter added that Georgia Gulf, Ashland Chemical and other North
American methanol producers have exited the business in the last
24 months due to unattractive fundamentals. In addition, a
significant portion of the domestic chemical industry's ammonia
and urea production is currently idled.

The transactions with BCI were reviewed, and unanimously
approved, by a special committee comprised of the three
independent members of the board of directors of BCP Management,
Inc., the general partner of the operating limited partnership.
The special committee retained and was advised by separate legal
counsel, Baker & Hostetler, LLP, and a separate financial
advisor, Wasserstein, Perella & Co., which issued a fairness
opinion to the committee.

"This completes a rigorous process of active negotiations over
the last few months," said George W. Koch, board member, BCP
Management and chair of the special committee. "The committee was
unanimous in its approval of the transaction and believes the
agreement is in the best long term interest of our unitholders."

The partnership also announced that Mark J. Schneider, president
and chief executive officer, was elected to the Board of
Directors of BCP Management, Inc.


Borden Chemicals and Plastics Limited Partnership operates
facilities located in Geismar and Addis, La., and Illiopolis,
Ill. BCP Management, Inc., a wholly owned subsidiary of Borden,
Inc., has a 2 percent interest and serves as general partner.
Publicly traded units account for the remaining 98 percent
ownership.


BOSTON CHICKEN: Heinz Grows Boston Market Line
----------------------------------------------
With sales of its Boston Market brand frozen entrees outstripping
projections, H.J. Heinz. Co. is expanding the line.  "The concept
is having a suite of Boston Market foods," said Michael Doherty,
general manager of communications for the Heinz Frozen Food Co.

Frozen products will include pot roast, corn bread and cinnamon
apples. Pot roast isn't something you can actually purchase at
Boston Market restaurants, but neither is the grilled chicken
entree that was part of the initial product line Heinz introduced
under that banner last fall. But it is in keeping with the
upscale turn on downhome American foods that personifies the
Boston Market concept, Mr. Doherty said.

As for financial particulars, Heinz isn't offering any, other
than repeating the $100 million in fiscal 2001 Boston Market
sales projected by Heinz CEO Bill Johnson last September.

The Boston Market products have had some obstacles to overcome.
For instance, the items are, on average, higher priced than
established competitors such as Stouffers. And, there's the
negative press that dogs the restaurant of the same name.

Heinz established a marketing agreement with the Colorado-based
restaurant chain whose official name is Boston Chicken Inc. in
early 1997. Boston Chicken wound up in Chapter 11 bankruptcy
protection and later was acquired by McDonald's.

Heinz rolled out frozen entrees in September 1999 to 40 percent
of the U.S. They became available in Pittsburgh and the rest of
the country in February.

Heinz's mission was to turn out a frozen product that matched the
quality of the restaurants. The research and development was done
here. The Boston Market line was the first major launch by the
frozen food division. In-house development is something of a new
strategy for Heinz, which has tended to acquire brands rather
than focus on R&D efforts.

Mr. Doherty said the Heinzs Weight Watchers' Smart Ones also will
roll out a line of low-calorie "bowls" - rice or pasta-based
dishes - this summer. The concept was launched last year by
competitor Con Agris Healthy Choice line and also is used by the
rice company Uncle Ben's, which used bowls to segue into the
frozen foods section.

"The testing is awesome," said Mr. Doherty.

Not all Heinz innovations are edible. This August, Heinz will
introduce resealable pouch packaging for Ore-Ida french fries.
The package will also stand up instead of flopping.


BROWN & SHARPE:  Possible Sale or Merger
----------------------------------------
According to the Providence Journal-Bulletin, Rhode Island's
oldest manufacturer, Brown & Sharpe announced to put itself up
for sale or a merger with a company.   Chase Securities Inc. was
hired "to pursue various strategic alternatives, including a
possible sale or merger of the company."  NYSE ended trading of
Brown & Sharpe stock (BNS:NYSE) at 11 am, before the news was
released after 30 mins.  Prices declined after it resumed trading
about 12:30 pm.  The stock was down to 28 percent, or 87.5 cents
a share to close at $ 2.25 a share.  The company is in "technical
default" on its bond and bank loans, and lacks enough equity
capital to comply with the agreements between its lenders.


CANADIAN AIRLINES:  Albert Court Approves Plan
----------------------------------------------
According to an article in The New York Times on June 28, 2000,
Canadian Airlines received court approval to settle 3.5
billion Canadian dollars ($2.4 billion) worth of debt with its
creditors.  The Alberta court approval will then pave a way for
its integration with Air Canada of Montreal. The Calgary-based
carrier's chief executive, Paul Brotto, says integration with Air
Canada may come this year.  And under the court-approved
restructuring plan, secured creditors will get 97 percent of what
the airline owed, while unsecured creditors will get 14 percent.


CONNEAUT LAKE: Judge Rules That Trustee Takes Control Over Park
---------------------------------------------------------------
The AP reports on June 29, 2000 that a bankruptcy judge in
Youngstown, Ohio, ruled that William Jorden, court-appointed
trustee, take control over financially troubled Conneaut Lake
Park, replacing Conneaut Lake Park Management Group, which has
run the 108-year-old park since February 1999.  Months ago,
Jorden sought to evict the management group, saying that it had
failed to pay $100,000 annual rent, and never secured a $600,000
credit line as required by its lease.  But the company blocked
the eviction by filing for bankruptcy in Youngstown, and Jorden
did the same thing in April.  The company had plans for $17
million in improvements for the park.  But Jorden planned for the
trustees to take control of the park and run it as a nonprofit
business.

Bankruptcy trustee Andrew Suhar last week went to the park and
determined that it couldn't get out of debt and move forward
without a change in ownership.  Jorden said the bankruptcy court
Wednesday ordered the management group to leave the property.

"My mission has been to preserve Conneaut Lake Park and this is
the first, positive step," Jorden said.  "We are going to run
this, for the first time in a hundred years, in a way that all
the profits will go into the park," he added.


CWT SPECIALTY STORES: Compromise and Settlement With Committee
--------------------------------------------------------------
The debtor, CWT Specialty Stores, Inc., seeks a court order
fixing the time, date and place of a hearing to July 20, 2000 at
9:30 AM on the debtor's motion for order determining the allowed
amount of the claim of Foothill Corporation and approving a
compromise and settlement with the official unsecured creditors'
committee.

The debtor believes that the payoff amount to Foothill is
$8,458,000, however Holdings' claim against the debtor increases
commensurate with the magnitude of Foothill's draw under the
Letters of Credit.  If Foothill draws under the Letters of
Credit, Holdings, in effect, will be subrogated to Foothill's
position as a secured creditor of the debtor, up to the amount of
the draw on the Letters of Credit.  The Creditors' Committee has
indicated to the debtor and Holdings that, absent approval of the
proposed settlement, it would challenge Holdings' secured
creditor position under the Junior Participation Agreement as
subrogee of Foothill, and would seek to invalidate Holdings'
Liens and subordinate its claim below the claims of general
unsecured creditors under the doctrine of equitable
subordination.

After extension negotiations, the debtor, Holdings and the
Creditors' Committee have agreed on a proceeds-sharing
arrangement, whereby, after Foothill's claim is satisfied in full
and Holdings is subrogated to its position, ten percent of any
proceeds collected by the debtor's estate, net of administrative
expenses, would be available to pay allowed claims against the
debtor's estate.  

Implementation of the settlement with the Creditors' Committee
would confirm Holdings' status as a subrogee of Foothill and
release Holdings from any further claims or actions by the
Creditors' Committee as to it status as a secured creditor of the
debtor's estate.

The debtor states that a failure to determine the amount of
Foothill's claim would unduly disrupt the wind-up of this case.


DYNEX CAPITAL:  Bankruptcy On Its Tail
--------------------------------------
The Richmond Times Dispatch reports that Dynex Capital Inc. may
follow the path of other finance firms in the past year and a
half into bankruptcy.  The company is currently in talks with
lenders on dissolving its debts.  Dynex president, Thomas H.
Potts, says "the company has short-term credit obligations, and
even though we're not in default, we're still on a very short
fuse."  Lenders and creditors have withdrew credit from Dynex as
well as the other subprime lending industry. Dynex could remain
independent or start fishing for buyers.


ELCOTEL INC: Company In Default On Covenants
--------------------------------------------
The Sarasota Herald-Tribune reports that Elcotel Inc. posted a $
7.8 million loss for the fourth quarter of this year and $ 11.2
million for last years together with the very low demand for its
pay telephones which is the heart of its business.  Losses
amounted to 57 cents and 83 cents per share, respectively.  
Company officials reveals that Elcotel is still in
default on some covenants of $ 11.5 million for its bank
financing and is seeking funds to pay for it. Company executives
were wrong on the expected time frame it could secure for funds.


GENESIS HEALTH:  Hamilton Center Unaffected In Chapter 11
---------------------------------------------------------
Intelligencer Journal reports that Lancaster Hamilton Arms Center
is unaffected from its parent company's filing for bankruptcy
protection in Chapter 11.  Genesis health Ventures Inc.'s filing
in U.S. Bankruptcy Court in Delaware will not affect Hamilton
Arms 95 residents or its manpower of 95 at the 336 West End Ave.  
Linda Sullivan, Hamilton's administrator, says that "We're going
to continue to do business as usual," and "We're known for
quality care and we're going to continue that."  Hamilton Arms
Center, the only Genesis-owned nursing home in this area, was
privately owned by Geriatric and Medical Corp. before it was
acquired in the early 1970s.


GENEVA STEEL: Board Approves Application for $110 Million Loan
--------------------------------------------------------------
Geneva Steel announced on July 3, 2000 that the Emergency Steel
Loan Guarantee Board has extended an offer of guarantee to
Citicorp USA, as administrative agent, in connection with a
proposed $110 million term loan to the Company.

Geneva Steel is currently developing a Chapter 11 plan of
reorganization through, among other things, discussions with the
official creditors committees established in its Chapter 11
proceeding.  The objective of the plan of reorganization is to
restructure the Company's balance sheet to (i) significantly
strengthen the Company's financial flexibility throughout the
business cycle; (ii) fund required capital expenditures and
working capital needs; and (iii) fulfill those obligations
necessary to facilitate emergence from Chapter 11.

In conjunction with formulating the plan of reorganization, the
Company, with Citicorp USA, filed an application on January 31,
2000, for a U.S. government loan guarantee under the Emergency
Steel Loan Guarantee Program. The application sought an eighty
five percent guarantee for a $l10 million term loan.  The term
loan is a portion of the financing required to consummate
Geneva's plan of reorganization.  The plan also contemplates that
the Company will establish a revolving credit facility as well as
receive an equity infusion of $25 million through issuance of
preferred stock.  With the guarantee having been granted, Geneva
is now in a position to finalize its financing arrangements
and file a plan of reorganization.  "Today's offer of a guarantee
by the Emergency Steel Loan Guarantee Board is a very important
step forward in Geneva's efforts to emerge from Chapter 11.  The
board's decision clears the way for the Company to file its plan
of reorganization within a short time," said Joseph A. Cannon,
chairman of the board and chief executive officer.

Although Geneva expects to file a plan of reorganization, there
can be no assurance at this time that the plan of reorganization
will actually be proposed by the Company, approved or confirmed
by the bankruptcy court, or that, if proposed, approved,
confirmed and consummated, such a plan will achieve the
objectives described above.  Similarly, there can be no assurance
that the financings contemplated by the plan of reorganization
can be obtained on terms favorable to the Company, or at all.  
Under Chapter 11 bankruptcy, the rights of, and the ultimate
payment by the Company to, prepetition creditors may be
substantially altered.  This will likely result in such claims
being paid in the Chapter 11 bankruptcy proceedings at
substantially less than 100 percent of their face value.  
Moreover, the interests of existing preferred and common
shareholders could, among other things, be eliminated.  Although
Geneva currently anticipates filling the plan of reorganization
shortly, there can be no assurances as to the actual timing for
the filing of the plan.

Geneva Steel is an integrated steel mill operating in Vineyard,
Utah.  The Company manufactures steel plate, hot-rolled coil,
pipe and slabs primarily in the Western and Central United
States.


HARNISCHFEGER: Motion To Amend DIP Facility
-------------------------------------------
The Debtors move the Court for entry of an order authorizing them
to enter into a Third Amendment to their Revolving, Term Loan and
Guaranty Agreement.  The Third Amendment provides for a reduction
of the DIP Credit Agreement from $750 million to $350 million.

The facility, as amended, will consist of two tranches, and the
term loan component of the DIP Credit Facility will be
eliminated:

Tranche A: (1) in the amount of $250 million, will be available
for both revolving loans and letters of credits, with a limit for
the issuance of letters of credit of $210 million, consisting of
$190 million sublimit for standby letters of credit and $20  
million sublimit for import documentary letters of credit. In
the case of standby letters of credit, the aggregate Letter of
Credit Outstandings,

(a) in favor of lenders to HII's Foreign Subsidiaries, shall be
limited to $100 million when aggregated with loans and
investments permitted to repay the Indebtedness of Foreign
Subsidiaries, and

(b) in connection with performance and bid requirements,
customer advance and progress payments and surety bonds of
HII's Foreign Subsidiaries, will be limited to $100 million
(instead of $40 million).

(2) will mature on the date as was originally provided under the
DIP Credit Agreement, that is, the earliest of:

(a) two years after the Petition Date;

(b) the substantial consummation of a plan or plans of
reorganization in the Debtors' chapter 11 cases, which for
purposes of the Loan Agreement will be no later than the
effective date of such plan; and

(c) the Lenders' election, in their sole discretion, upon the
occurrence of an event of default.

Tranche B: (1) in the amount of $100 million, will consist of
revolving loans, pursuant to which the name of the DIP Credit
Agreement will be changed to the Revolving Credit and Guaranty
Agreement;

(2) will mature on December 31, 2000;

The amendment also provides that:

(1) The availability under the DIP Credit Agreement will be
subject to a Borrowing Base, which is defined to include:

    (a) 85% of the total Eligible Accounts Receivable;

    (b) 35% of Eligible Unbilled Accounts Receivable;

    (c) 35% of Eligible Work-in Process;

    (d) 50% of Eligible Raw Materials and Finished Goods;

    (e) M&E Component; and

    (f) the Intellectual Property Component (until Tranche B is
repaid in full).

The Borrowing Base will be computed at the end of each fiscal
month, and the failure to timely deliver a certified Borrowing
Base Certificate will constitute an additional Event of Default.

(2) The cash collateralization of the Letters of Credit will now
be required if the aggregate Letters of Credit Outstanding in
excess of the amount held in the Letter of Credit Account exceeds
the lesser of the Total Commitment or the Borrowing Base.

(3) The availability of funds under the DIP Credit Agreement for
the benefit of Beloit will be limited to an aggregate principal
amount not in excess of the sum of

    (a) the portion of the Net Cash Proceeds received from the
Beloit sale auction which was loaned by Beloit to HII, plus

    (b) $23,000,000, plus

    (c) an amount not in excess of $17,000,000 in respect of
Letters of Credit issued for Beloit's benefit.

(4) The availability of funds under the DIP Credit Agreement for
the benefit of Beloit will be further limited by the requirement
that Beloit's cumulative EBITDA will be no less than $50,000,000
for the period commencing on May 1, 2000 through December 31,
2000.

(5) No further funds will be available to Beloit under the DIP
Credit Agreement after December 31, 2000.

(6) The following changes are proposed to be made to the negative
covenants contained in the DIP Credit Agreement:

    (a) Liens on the assets of Foreign Subsidiaries granted to
secure Indebtedness for borrowed money of such Foreign
Subsidiaries in existence on the Petition Date will be allowed in
the aggregate amount of $200 million (instead of $175 million) of
such Indebtedness with no further limitations;       

    (b) Indebtedness with respect to Capital Leases will be
permitted in an amount not to exceed $5,000,000 in the aggregate,
and additional loans and advances to Foreign Subsidiaries will
exclude Beloit's Foreign Subsidiaries;

    (c) Capital Expenditures will be reduced;

    (d)  The amount of required cumulative EBITDA will be reduced
to exclude Beloit's EBITDA;

    (e)  Allowed investments will be redefined to

         (i)   prohibit advances and loans to and among Beloit
and its consolidated Subsidiaries, including its Foreign
Subsidiaries;

         (ii)  limit the aggregate amount of loans and advances
by the Debtors to Foreign Subsidiaries from and after the Third
Amendment Effective Date to $75 million (instead of $110
million) for repayment of Indebtedness, when aggregated with
loans and investments permitted to repay the Indebtedness of
Foreign Subsidiaries, provided, that the sum of advances and
loans under this clause and the Letter of Credit Outstandings
of Letters of Credit issued (A) in favor of lenders to Foreign   
Subsidiaries and (B) in connection with performance and bid     
requirements, customer advances, progress payments and surety
bonds of Foreign Subsidiaries may not exceed $150 million in
the aggregate; and
   
         (iii) limit advances and loans to Beloit in the manner
will be made available as described above;

    (f)  Sales and other dispositions of assets outside of the
ordinary course of business will be permitted for assets having a
fair market value not exceeding $250,000 for each such sale or,
in the case of assets having a market value in excess of
$250,000, $10 million in the aggregate.

The Amendment also provides for the payment of an amendment fee
in the amount of $2,562,500 as a condition precedent to the
effectiveness of the Amendment.

The Debtors submit that as the proposed amendment of DIP Facility
more accurately reflects the current capital needs of the
Debtors, it will reduce the Debtors' administrative expenses by
reducing the amount of the commitment fees payable, and is in the
best interest of the Debtors, their estates and creditors
in the Debtors' business judgment. (Harnischfeger Bankruptcy News
Issue 24; Bankruptcy Creditors' Services Inc.)


HILLSBOROUGH RESOURCES: Court Extends Protection Until August
-------------------------------------------------------------
Hillsborough Resources Limited (Vancouver, British Columbia)
("HLB"-TSE) announced that the Supreme Court of British Columbia
has extended the protection previously granted to Hillsborough
and its wholly owned subsidiary, Quinsam Coal Corporation, under
the Companies' Creditors Arrangement Act until August 31st, 2000.  
The extension was granted to permit Hillsborough Resources
and Quinsam time in which to complete meetings of the
shareholders and creditors preparatory to coming out of creditors
protection.


HOLLYTEX CARPET: Owners Decide To Shut Down Plant
-------------------------------------------------
The AP reports on June 30, 2000 that Beaulieu of America, which
bought Hollytex Carpet Mills plant, has decided to close the
mill, believing that doing so could save them about $5 million a
year, City Manager Alan Riffel said.  About 300 people will be
put out of work.  But leaders of Anadarko city don't intend to
lose Hollytex that easy.  They have formed a task force, which
offered to provide more than $1 million in tax breaks and more
than $1 million in interest-free loans just to help prevent the
closing of the mill.


HYUNDAI GROUP: Agrees To Back Out Of Car Business
-------------------------------------------------
Hyundai Group said it will loosen links to its flagship car
business, Hong Kong I Mail reports, bowing to government
pressure.  Hyundai's retreat comes less than 24 hours after South
Korea's largest industrial group insisted it would maintain its
ties to Hyundai Motor, hoping to use a new partnership with
DaimlerChrysler to strengthen its dominance of the nation's car
market.  The reversal, HKIM continues, strengthens the
government's hand as it tries to reduce the power of Korea's
industrial groups, which have long been run by their founding
families as private fiefdoms.

At issue is Hyundai founder Chung Ju Yung's 9.1% stake in Hyundai
Motor.  The government has said he must reduce the holding to
less than 3% before the carmaker can be declared legally
independent.  Hyundai, in response, said the government had no
right to dictate how much Mr. Chung could own since he had
already sold his stakes in other affiliates and stepped down from
management.  Instead of spinning off Hyundai Motor, Hyundai
suggests it will sell some 20 other units ranging from Korea's
largest contractor to life insurers.


KITTY HAWK: Bond Prices Questionable
------------------------------------
Mergers and Acquisitions Report reports on July 3, 2000 that
following a conference call to its creditors in mid-June, the
bonds of bankruptcy-protected Kitty Hawk Inc. shot up about 20%-
but one high-yield analyst following the situation thinks
investors may be getting ahead of themselves.

Kitty Hawk announced on May 1 it had filed for Chapter 11
protection (M&AR, 5/15/00), after having said it would miss a $17
million coupon payment on May 15. It listed $907 million in
assets and $512 million in debts, $340 million of which is in
9.95% senior secured notes.

The bonds, which had been trading in the mid 20s at the time of
the filing, moved up to the low forties in the last few weeks.

It would be tempting to push the bonds up further to around 50,
but the risk is large, said the analyst. One must remember, "The
thing isn't viable. You have very little information in terms of
the business itself," he said.

One distressed investor said that when the bonds initially
dropped to the 20s following the announcement that the assets in
the company's collateral package had been overestimated,
investors believed that equity in a restructured Kitty Hawk would
be worth nothing.

Another reason for the bond jump is an increase in buyers
relative to sellers. "Those who needed to get out got out," he
said-and vultures moved in. He added that there could be some
strategic buyers in the mix.

A second distressed investor said valuation has gone up because
the company's jets are now worth more. But much of the company's
collateral is not that attractive. "The bonds went from cheap in
the 20s to rich in the 40s. There's no longer an attraction in
the 40s," he said.

He estimated a recovery value in the mid-40s and said the
company's goal of emergence by year-end is "aggressive," but it
should happen before the end of the first quarter 2001.

Kitty Hawk said it hopes to have a new business plan by the end
of July. It's told creditors it will divest its non-core
operations and center its attention on freight and charter
operations, as it did before the acquisition of its wide-bodied
planes in 1998.

The analyst said the divestiture of those planes from Kitty Hawk
International will add some extra capital, and the company has
had a fair amount of success renegotiating some of its contracts,
reducing its overhead and cutting costs.

Since being freed of its debt obligations by the bankruptcy
filing, Kitty Hawk has been steadily building cash and will be
able to eke by without DIP financing, he added.

At this point Kitty Hawk looks as though it will have more value
as an operating business than at liquidation value, the analyst
added.

Financial advisor Seabury Advisors LLC, which had success in
steering Continental Airlines Inc. through bankruptcy in the
early 1990s, has, in Kitty Hawk, a company free of the
complicating problems such as labor unions which plague other,
larger airlines. Bankers at Seabury were unavailable for comment.

The analyst thought the end of the year as a re-emergence goal is
doable.

The official committee of unsecured creditors retained law firm
Forshey & Prostok LLP as legal counsel. Wayne Lovett, general
counsel for Mercury Air Group Inc., who is co-heading the
unsecured creditors committee, said, "Things are progressing
well. We have high hopes the company will continue to progress."


MONARCH DENTAL: Extends Loan Agreement
--------------------------------------
Monarch Dental Corporation (Nasdaq: MDDS), announced that it has
entered into an amended loan agreement with its lenders to extend
the maturity of its short-term note, due under its Credit
Facility, from June 30, 2000 to December 15, 2000.  The parties
entered into this agreement to provide the Company with
additional time to complete its previously announced process of
exploring strategic alternatives, including the possible sale or
merger of the Company.  This extension is subject to certain
conditions, including that the Company enter into a definitive
agreement with respect to a strategic transaction by July 31,
2000.  Failure to satisfy the conditions, covenants and
agreements set forth in the amended loan agreement will
constitute a default under the Credit Facility and no assurances
can be given that the Company will be able to satisfy such
conditions, covenants and agreements.

Monarch Dental Corporation currently manages 190 dental offices
serving 20 markets in 14 states.


NORTON MOTORCYCLES: Pledges Shares To Circle Capital
----------------------------------------------------
On March 23, 2000, Circle Capital Group S.A. loaned Norton
Acquisition Corporation $200,000 to use for working capital.
Nortn Acquisition Corp. is a Minnesota Corporation that owned
6,000,000 of the approximately 7,000,000 outstanding shares of
Norton Motorcycles, Inc. All shares owned by Norton Acquisition
were issued in a private offering and were therefore
"restricted securities" as that term is defined in Rule 144
promulgated under the Securities Act of 1933.

Pursuant to the Loan agreements, Norton Acquisition pledged its
6,000,000 shares of Norton Motorcycles, Inc., to Circle Capital
as security for the Loan. Norton Acquisition is now in default
under the terms of the Loan and Circle Capital has elected to
retain the 6,000,000 shares of pledged stock in Norton
Motorcycles, Inc., in satisfaction of the Loan. Circle Capital
has specifically invoked a procedure under Minnesota Statute
ss.336.9-505(2). This statute generally gives a secured creditor
the right to retain the collateral in full satisfaction of the
secured debt in the event the debtor fails to object to the
secured creditor's retention of the collateral after written
notification and after a 21-day period has elapsed. As Circle
Capital has given this notice and as the 21-day period
has now elapsed, it is Norton Motorcycles, Inc.'s understanding
that Circle Capital is now the valid owner of 6,000,000 of its
shares and will, accordingly, take steps to reflect such
ownership in its books and records. Said shares continue to be
restricted under the Act.

The actions described above result in a substantial change of
control of Norton Motorcycles, Inc., as such action transfers
approximately 85.7% of the issued and outstanding shares of
Norton Motorcycles, Inc., from Norton Acquisition Corporation to
Circle Capital.


OREGON STEEL:  Releases Second-Quarter Report
---------------------------------------------
Oregon Steel, Inc. (NYSE:OS) releases its second-quarter earnings
report and appears to be heading for another possible downturn.  
According to Zachs Investment Research, the steel firm will
likely meet Wall Street analysts projections for the quarter
ending June 30, 2000 but has failed for four consecutive
quarters.  Oregon Steel will then violate not one, but two of the
just-renegotiated covenants.

And even if the second quarter does meet expectations the Company
will still miss its required interest coverage ratio of 1.87,
coming in at a ratio of approximately 1.84 instead. Meeting
performance expectations would also mean it will violate the
maximum leverage ratio of 4.75, with Oregon Steel instead finding
itself with a more troublesome ratio of 4.89.


OWENS CORNING: Releases Expectations To SEC
-------------------------------------------
Information released by Owens Corning indicates that the
softening housing market and related decrease in demand for
building materials, coupled with sharp increases in raw material
and energy costs, are expected to reduce the company's sales and
income from operations for the second quarter  ended June 30,
2000, below levels reported for the same period last year.

On a preliminary basis and subject to final results for the
second quarter, the company expects net sales for the period to
be slightly below the $1.3 billion reported in the same period
last year.  The company said this reflects weaker demand in its
roofing, siding and insulation businesses, as the housing market
responds to the rise in interest rates.  Due to strong sales in
the first quarter, the sales for the first half of the year are
expected to show growth in excess of four percent.

The company reported that $30 million of second quarter cost
increases driven by asphalt and PVC cost pressures have continued
to depress margins in the roofing and vinyl siding businesses.  
In addition, higher debt levels and interest rates are expected
to increase borrowing costs by more than $10 million versus the
same period last year.

Also on a preliminary basis, net income, excluding special items,
is expected to be approximately $1.00 per share on a diluted
basis, compared to $1.31 per share in the same period a year ago.  
However, it is expected that the company will report a net loss
for the second quarter after giving effect to the special items.

The company expects to report its actual second quarter results
on July 13, 2000.

For the full year, the company anticipates sales growth of
approximately four percent.  However, continued margin pressure,
increased borrowing costs and continued market weakness is likely
to reduce earnings per share, excluding the special items, by
approximately 20% below 1999's levels.


PANDA GLOBAL: S&P Downgrades to `CCC' From `B-'
-----------------------------------------------
Standard & Poor's today downgraded its rating on Panda Global
Energy Co.'s (Panda) $155 million senior secured notes, due 2004,
to triple-'C' from single-'B'-minus.

The outlook has been revised to negative from stable.

Panda's 100 MW coal-fired power project at Luannan, China has
recently become commercially operational, but its tariff rate is
still under negotiation with the Tangshan Municipal Government.
The Luannan project is currently being paid a "testing" tariff
rate of slightly below 0.20 yuan/kilowatt-hour (kWh), which is
insufficient to cover all operating costs. The tariff rate in the
original cash flow projection is around 0.60 yuan/kWh, but the
Tangshan Municipal Government is currently only offering around
0.30 yuan/kWh.

The rating reflects the following weaknesses:

-- Financial performance of the Luannan power project, the major
source of cash flow support for debt service on the notes, is
substantially below projections due to the low tariff rate
currently being paid.

-- The debt service reserve was used for the April 2000 debt
service payment, and is unlikely to be replenished in the near
term.

-- The projected after-tax debt service coverage ratio (DSCR)
will remain below 1 times (x) from 2000 to 2003 under an initial
0.35 yuan/kWh scenario. The average DSCR from 2000 to 2004 is
projected to be 0.8x.

-- Uncertainty about the pending lawsuit with Credit Suisse First
Boston (Hong Kong) Ltd. (CSFB), a significant bondholder, which
could result in a technical default by the company under the
notes. CSFB, in a letter to the notes trustee, alleges certain
nonpayment covenant defaults relating to the sale of certain
assets by Panda Global Holdings Inc. (PGH), the parent and
guarantor of the notes, and that fair market value may not have
been received in exchange for such assets. PGH and Panda have
brought legal actions against CSFB and others, seeking injunctive
relief precluding an acceleration of the notes on the basis of
the alleged defaults.

-- Refinancing risk in that only about 15% of the notes will be
amortized prior to maturity in 2004.

-- Structural subordination of the notes to existing debt on the
Rosemary and Brandywine projects in the U.S.

-- A highly leveraged financing structure for Panda and PGH.
PGH's debt to capital ratio on a consolidated basis was more than
120% for the year-ending Dec. 31, 1999.

The major strengths include:

-- Both units of the Luannan power plant are commercially
operational despite a construction delay;

-- Approximately $6 million in delay liquidated damages are
expected to be collected from the engineering, procurement, and
construction contractor, which may be available to support debt
service;

-- The Brandywine and Rosemary projects in the U.S. are
performing as expected, providing cash flow support for the
notes' debt service; and

-- Because it is an active power project developer in the U.S.,
PGH has some incentives not to default on the notes because it
has to obtain debt for new projects.

The outlook is negative due to uncertainty about the timing and
level of the final tariff rate for the Luannan project and the
tight liquidity position of Panda and PGH, Standard & Poor's
said.


PATHMARK STORES: Prepack Bankruptcy Gives Control To Bondholders
----------------------------------------------------------------
According to a report in Crain's New York Business on June 26,
2000, Pathmark Stores Inc. is working on a prepackaged bankruptcy
plan giving bondholders complete control of the company in
exchange for the forgiveness of $1 billion in debt.  The company
believes that the plan will allow the company to emerge from
bankruptcy in the third quarter of this year.  Executives
anticipate that once it is freed from $100 million in annual
interest payments to bondholders, the 136-store chain-with 20
locations in the city will be able to upgrade its operations and
pursue expansion in its territory of New York, New Jersey and
eastern Pennsylvania.  "The completion of this restructuring will
represent a rejuvenation for the Pathmark franchise," says Harvey
Gutman, the chain's senior vice president for retail development.  
"For the first time, the company will have its hands untied."

But with the grocery retailing industry undergoing consolidation,
many think the restructuring may be window dressing for a sale of
the Carteret, N.J.-based company.


PIC N PAY: Shoe Show To Take Over 73 Stores
-------------------------------------------
According to an article in The Business Journal on May 26, 2000,
Concord-based Shoe Show Inc. plans to open in 73 former Pic 'N
Pay stores within three weeks, company officials say.

Shoe Show, the nation's largest privately owned footwear
retailer, recently bought the store leases from Matthews-based
Pic 'N Pay, which filed for federal bankruptcy protection in
March and soon after started going-out-of-business sales.

According to the article, terms of the lease acquisition haven't
been disclosed.

Shoe Show could reopen the stores under its store names The Shoe
Dept., Burlington Shoes or Shoe Show.

The acquired sites are throughout the Southeast, says Kirk Krull,
vice president of real estate and development for Shoe Show. The
majority of the stores are in Georgia and the Carolinas.
Krull outlined the Pic 'N Pay lease acquisitions in an interview
during the International Council of Shopping Centers annual
convention in Las Vegas this week. Shoe Show was featured as one
of the new generation of retailers at the convention, which drew
nearly 30,000 participants.

Krull declines to disclose Shoe Show's investment in the Pic 'N
Pay deal or discuss such details as the cost of renovations.
In addition, he says Shoe Show was hired 80% of the current Pic
'N Pay store employees.

Pic 'N Pay officials couldn't be reached for comment.

Topeka, Kan.-based Payless ShoeSource Inc., the nation's largest
publicly held footwear retailer, also has bought some Pic 'N Pay
leases. However, a Payless spokesman won't say how many stores
that chain plans to open at former Pic 'N Pay sites.

The liquidation of 43-year-old Pic 'N Pay comes after several
years of struggle and declining sales. Pic 'N Pay initially filed
for Chapter 11 in 1996 and, after coming up with a plan for
reorganization, re-emerged as a leaner company.

Pic 'N Pay's most recent Chapter 11 filing lists about 1,000
creditors. In court documents filed in U.S. Bankruptcy Court in
Delaware, the company outlined plans to cease operations by May
31 and hired a liquidation firm to operate going-out-of-business
sales.

Pic 'N Pay operated 453 stores in 17 states under the names Pic
'N Pay, Shoe World and Shoe City.


PRIME CAPITAL: Negotiations Cease Between Prime and Finantra
------------------------------------------------------------
Prime Capital Corporation ("Prime") announced that Prime and
Finantra Capital, Inc. ("Finantra") have discontinued
negotiations for the purchase of all of the issued and
outstanding common shares of Prime. As previously reported, the
Letter of Intent executed by the parties on February 8, 2000 and
amended on March 31, 2000 expired prior to the satisfaction of
certain contingencies.  Prime and Finantra had been negotiating
continuously and diligently to reach an agreement and satisfy
such contingencies but were unsuccessful.

As a result of the prolonged negotiations with Finantra and cash
flow problems, the Company has failed to timely file its Form 10-
K and 10-Q and does not anticipate making such filings in the
near future.

Further, Prime and its advisor Development Specialists, Inc. have
expended substantial efforts to work out various arrangements
with its creditors and are still considering all alternatives
including a liquidation of Prime's assets. The Company has
reduced its workforce by approximately 50% to minimize Prime's
expenses during this period.


RECOM MANAGED SYSTEMS: Files Chapter 11 Bankruptcy Petition
-----------------------------------------------------------
Recom Managed Systems, Inc. (OTCBB:RMSI.OB) filed a petition for
voluntary Chapter 11 bankruptcy in the United States Bankruptcy
Court Eastern District of California, Sacramento Division on
Monday, June 26.

In April of this year the company announced its intention to file
a Chapter 7 petition for dissolution. Management now believes
that a corporate reorganization may be a viable alternative that
would better serve the interests of its investors, shareholders
and creditors. Consequently, the company filed under Chapter 11
and is currently preparing a reorganization plan for
consideration by the court. The current officers and directors
continue to manage the affairs of the company.


RELIANCE GROUP: Moody's Downgrades Ratings
------------------------------------------
Moody's Investors Service has downgraded the ratings on the
senior and subordinated debt issues of Reliance Group Holdings,
Inc. The senior debt obligations have been downgraded to B3, and
the rating on subordinated debt instruments has been moved to
Caa1. The insurance financial strength ratings of the company's
principal operating subsidiaries were also downgraded, to Ba2
(Questionable) from Baa2 (Adequate). The ratings remain on
review, with direction uncertain pending the outcome of one or
more of a number of outstanding matters.

Reliance currently faces maturing bank debt of $237.5 million on
August 31, 2000 and $290 million of senior notes maturing in
November, 2000. With limited financial flexibility at the holding
company, the company's ability to take dividends out of the
operating entities is critical to enabling Reliance to repay its
senior creditors on time. Moody's noted that Reliance has not yet
accessed funds at those companies in order to repay its maturing
obligations. Further, insurance regulators may be unwilling to
give Reliance their approval to take such dividends, owing to
continuing uncertainty about the adequacy of reserves and eroding
marketplace confidence. The erosion of Reliance's market support
is reflected in the company's recent decisions to sell a number
of its specialty commercial businesses.

Reliance previously announced an agreement to be acquired by
Leucadia National Corporation. Moody's does not view the proposed
acquisition as a stabilizing factor, given Leucadia's role as a
financial -- rather than strategic -- investor. Upon completion
of the recently announced divestitures, Reliance will have shrunk
its continuing business portfolio to a number of relatively less
attractive businesses and Moody's believes that the company will
find it difficult to operate profitably going forward, with
expense challenges on the remaining active business as well as
the growing runoff book.

Expanding on its action, Moody's reiterated that the ratings
remain under review, with direction uncertain. This review status
reflects the evolving nature of the events at Reliance. For
example, Moody's noted that Leucadia's due diligence period will
end on July 21st. Moreover, over the next two months several
other rating factors should take on additional clarity. These
factors include the status of the banking facility, the
availability of extraordinary dividends from the insurance
company (should that be pursued), the completion of the announced
sales of certain of Reliance's books of business, and the second
quarter operating results. Moody's will continue to evaluate the
appropriateness of its rating as these factors come into focus.

The following ratings were downgraded:

Reliance Group Holdings, Inc. -- Senior debt to B3 from Ba2;

Reliance Group Holdings, Inc. -- Subordinated debt to Caa1 from
Ba3;

Reliance Insurance Company -- Insurance financial strength to Ba2
from Baa2;

Reliance Insurance Company of Illinois -- Insurance financial
strength to Ba2 from Baa2;

Reliance National Insurance Co. of New York -- Insurance
financial strength to Ba2 from Baa2;

Reliance National Indemnity Co. -- Insurance financial strength
to Ba2 from Baa2;

Reliance National Insurance Co. -- Insurance financial strength
to Ba2 from Baa2;

United Pacific Insurance Co. -- Insurance financial strength to
Ba2 from Baa2;

United Pacific Insurance Co. of New York -- Insurance financial
strength to Ba2 from Baa2.

Reliance Group Holdings, Inc. is a New York-based publicly traded
holding company for several property/casualty insurance
subsidiaries. For the quarter ended March 31, 2000 Reliance
reported consolidated debt of $735 million and shareholder's
equity stood at $1.13 billion.


SOGO CO.: Lenders to Forgive US$5.9 Billion
-------------------------------------------
Sogo, Japan's ninth-largest department store operator, will have
US$5.9 billion in loans forgiven by creditors and the government
in what will be the nation's largest bailout ever, according to a
report appearing in the Nihom Keizai Shimbun citing unnamed
government officials.  The bailout will mark the end to days of
speculation that the struggling Osaka-based retailer will be kept
afloat.  Its shares have more than doubled since June 20 after
reports of a bailout circulated and after Sogo said it was
confident lenders would forgive the loans.

Officials, the South China Morning Post explains, opted for a
bailout because of the psychological and financial damage a Sogo
collapse would wreak.  Chief among the worries of the officials
engineering a bailout is that Sogo's failure would cause Japanese
consumers to fear for their own jobs and stop spending.  A Sogo
bankruptcy would have a direct impact on its 11,400 employees,
the 50,000 employees at the 10,000 companies it does business
with and millions of Japanese who work at companies on financial
ground almost as shaky as Sogo's.


STRAND PROPERTIES: Defaults On Mortgage Payments
------------------------------------------------
An article from the Lexington Herald-Leader reports that Strand
Properties defaulted on mortgage payments.  Lexington businessman
George W. Griffin, gave Strand $ 7.43 million in damages after he
agreed to invest $ 500,000 in Strand but failed to provide the
money at the last minute.  The lender then foreclosed and later
sold an office building at 155 East Main Street for $ 2.4 million
to recover the $ 2.03 million owed by Strand.

According to Fayette Circuit Judge Gary D. Payne, Griffin is
guilty of breach of contract, fraud and bad faith.  Griffin was
then ordered to pay Strand more than $ 1.49 million for actual
losses and more than $ 5.94 million in punitive damages.  This
should help Strand pay its debts and emerge from Chapter 11
bankruptcy reorganization.


TAYLOR CBI/COMMEMORATIVE BRANDS: Moody's Assigns/Lowers Ratings
---------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Taylor CBI
Company's ("Taylor CBI") proposed $170 million secured revolving
credit facility consisting of a $55 million revolver; $57.5
million term A loans and $57.5 million term B loans. The senior
implied rating is B1, and the senior unsecured issuer rating is
B2. The outlook is stable. This is the first time that Moody's is
rating the debt of Taylor CBI which was formed by the merger of
Taylor Publishing Company ("Taylor" no rated debt prior to the
merger) and Commemorative Brands, Inc. ("CBI" senior implied
rating of B2). Additionally in connection with the proposed
transactions, Moody's lowered the rating of Commemorative Brands,
Inc.'s $90 million 11% senior subordinate notes, due 2007, to
(P)Caa2 from Caa1. All ratings are subject to the completion and
execution of final documentation.

The ratings reflect Taylor CBI's modest credit statistics and the
absence of proven and sustained turnaround in the operational
efficiency of either of the merged companies. In Moody's opinion,
the latter underscores the pro-forma company's high financial
leverage, moderate interest coverage and relatively low retained
cash as a percentage of total pro-forma debt. This lack of
material financial flexibility is concerning given that there is
minimal cushion for further operational and/or potential
integration related mishaps. The ratings reflect Moody's
expectation that the pro-forma financial condition of Taylor CBI
will likely remain stable and be characterized by relatively low
top line growth with relatively flat to slightly increasing
bottom line improvements.

The ratings incorporate the longstanding reputation of each
company in their respective core markets (publication of
scholastic yearbooks and manufacture of class rings in the United
States). On a pro-forma basis, the ratings recognize the strength
and stability of historical cash flows as evidenced by EBIT
margins of approximately 11% achieved during periods of less than
desirable operational efficiency. Given that CBI is the dominant
contributor of EBIT to the pro-forma entity, the ratings
acknowledge the relative de-leveraging of CBI and the incremental
improvements, both realized and anticipated, in cash flow and
overall enterprise value resulting from the merger.

The provisional downgrade of Commemorative Brands, Inc.'s
outstanding senior subordinated notes to (P)Caa2 from Caa1
reflects the deeply subordinated position of the notes, given the
addition of approximately $110 million of potential secured
outstandings ahead of the notes on a pro-forma basis and the
intended stripping of substantially all protective financial
covenants in the indenture once the sponsor, as part of the
proposed merger transactions, tenders the majority of the
existing subordinated CBI notes leaving an estimated $40 million
outstanding.

Retained cash (defined as EBITDA less interest expense, taxes and
capital expenditures) is approximately $12 million which equates
to 6% of total debt. Adjustments to the $28 million pro-forma
EBIT total $3 million of non-cash add-backs related primarily to
non-recurring expenses at CBI. It is likely that an estimated $3
million of additional cost savings from the merger should be
realized over the intermediate term.

Taylor CBI Company is being formed through the merger and
recapitalization of Taylor Publishing Company - a leading
publisher of scholastic yearbooks in the US servicing
approximately 7,800 customer contracts each representing an
individual junior high school, high school, college or university
- and Commemorative Brands, Inc., a leading manufacturer of class
rings and other forms of affinity jewelry in the US through its
ArtCarved and Balfour operations. The sponsor, Castle Harlan,
Inc. currently controls majority interests in both companies
totaling approximately $88 million cash equity invested on a pro-
forma basis which accounts for roughly 31% of the pro-forma
capital structure. Proceeds from the proposed credit facility are
intended to refinance existing debt at both.


TOYTIME INC: Involuntary Case Summary
-------------------------------------
Alleged Debtor: Toytime, Inc.
                2377 Crenshaw Blvd.
                Suite 302
                Torrance, CA 90501
                
Involuntary Petition Date: June 27, 2000

Case Number: 00-02893            Chapter: 11

Court: District of Delaware

Petitioners' Counsel: Michael S. Fox
                      Traub, Bonacquist & Fox, LLP
                      655 Third Avenue - 21st Floor
                      New York, NY 10017

                      Jan A. van Armerogen, Jr.,
                      Reed, Smith, Shaw, McClay, LLP
                      1201 N. Market Street, Suite 1500
                      Wilmington, DE 19801

Petitioners:

Mattel Inc.              Goods Sold             $ 1,154,000

Grey Advertising Inc.    Services                 $ 351,347

GuideStar Direct Corp.   Goods Sold & Services    $ 304,739

Microsoft Corp.          Advertising Services     $ 894,996

Mancan, Inc.             Services                 $ 201,406


TOYTIME: Involuntary Petition Filed on July 3, 2000
---------------------------------------------------
The Atlanta Journal and Constitution reports on July 4, 2000 that
Mattel Inc. and Microsoft Corp. forced foundering start-up
Internet toy seller ToyTime Inc. into bankruptcy court seeking
payment of trade debt.  In an involuntary Chapter 11 petition
filed in U.S. Bankruptcy Court in Wilmington on Monday, Mattel,
Microsoft, Grey Advertising Inc., GuideStar Direct Corp. and
Mancan Inc. say ToyTime owes them about $ 3 million in unpaid
bills. ToyTime, which marketed toys as toytime.com and infant
products as babytime.com, closed its Web sites in May, faced with
investor apathy and competition, the Los Angeles Times reported.
Last month ToyTime asked potential buyers to send e-mail
to bidstoytime.com.


TRANSTEXAS GAS: Annual Meeting Set For July 25, 2000
----------------------------------------------------
TransTexas Gas Corporation will hold its annual meeting on
Tuesday, July 25, 2000, beginning at 10:00 a.m., central daylight
time, at The Hotel Sofitel, 425 North Sam Houston Parkway East,
Houston, Texas 77060. The matters to be voted on include:

1.   the approval of amendments to the Certificate of
Designation for Series A Senior Preferred Stock of the company to
decrease the par value of the Series A Senior Preferred Stock
from $1.00 to $0.001, to change the first dividend payment date,
to make certain conforming changes thereto and to increase the
number of authorized shares of Series A Senior Preferred Stock;

2.   the approval of amendments to the Certificate of
Designation for Series A Junior Preferred Stock of the company to
decrease the par value of the Series A Junior Preferred Stock
from $1.00 to $0.001, to change the first dividend payment date,
to correct an error therein and to make certain conforming
changes thereto.

The record date for the annual meeting was June 13, 2000. Only
stockholders of record at the close of business on the record
date are entitled to receive notice of and to vote at the annual
meeting.


WORLDPORT COMMUNICATIONS: Annual Meeting Set For July 21, 2000
--------------------------------------------------------------
Worldport Communications, Inc. will hold its 2000 annual meeting
of stockholders at the Marriott's Lincolnshire Resort located at
Ten Marriott Drive, Lincolnshire, Illinois at 10:00 a.m. local
time, on July 21, 2000, for the following purposes:

1. To elect four directors to hold office until the 2001 annual
meeting;

2. To approve the company's 2000 Long-Term Stock Incentive Plan;

3. To approve an increase in the number of authorized shares of
the company's common stock from 65,000,000 to 200,000,000 and to
amend the company's Certificate of Incorporation accordingly;

4. To ratify the selection of Arthur Andersen LLP as the
company's independent accountants for the year ending December
31, 2000; and

5. To transact such other business as may properly come before
the meeting.

The Board of Directors has fixed the close of business on May 30,
2000 as the record date for the determination of stockholders
entitled to notice of and to vote at the meeting.


Meetings, Conferences and Seminars
----------------------------------
July 13-16, 2000
   AMERICAN BANKRUPTCY INSTITUTE
      7th Annual Northeast Bankruptcy Conference
         Doubletree Hotel, Newport, Rhode Island
            Contact: 1-703-739-0800
            
July 21-24, 2000
   National Association of Chapter 13 Trustees
      Annual Seminar
         Adams Mark Hotel, St. Louis, Missouri
            Contact: 1-800-445-8629 or info@nactt.com

August 3-5, 2000
   ALI-ABA
      Fundamentals of Bankruptcy Law
         Seaport Hotel and Conference Center,
         Boston, Massachusetts
            Contact: 1-800-CLE-NEWS

August 9-12, 2000
   AMERICAN BANKRUPTCY INSTITUTE
      5th Annual Southeast Bankruptcy Workshop
         Hyatt Regency, Hilton Head Island, South Carolina
            Contact: 1-703-739-0800

August 14-15, 2000
   TURNAROUND MANAGEMENT ASSOCIATION
      Advanced Education Workshop
         Loews Vanderbilt Plaza, Nashville, Tennessee
            Contact: 1-312-822-9700 or info@turnaround.org
         
August 17-19, 2000
   ALI-ABA
      Banking and Commercial Lending Law -- 2000
         Renaissance Stanford Court
         San Francisco, California
            Contact: 1-800-CLE-NEWS

September 7-8, 2000
   ALI-ABA and The American Law Institute
      Conference on Revised Article 9 of the
      Uniform Commercial Code
         Hilton New York Hotel, New York, New York
            Contact: 1-800-CLE-NEWS

September 12-17, 2000
   NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES
      Convention
         Doubletree Resort, Montery, California
            Contact: 1-803-252-5646 or info@nabt.com

September 15-16, 2000
   AMERICAN BANKRUPTCY INSTITUTE
      Views From the Bench 2000
         Georgetown University Law Center, Washington, D.C.
            Contact: 1-703-739-0800

September 21-22, 2000
   RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC.
      3rd Annual Conference on Corporate Reorganizations
         The Regal Knickerbocker Hotel, Chicago, Illinois
            Contact: 1-903-592-5169 or ram@ballistic.com   

September 21-23, 2000
   AMERICAN BANKRUPTCY INSTITUTE
      Litigation Skills Symposium
         Emory University School of Law, Atlanta, Georgia
            Contact: 1-703-739-0800

September 21-24, 2000
   AMERICAN BANKRUPTCY INSTITUTE
      8th Annual Southwest Bankruptcy Conference
         The Four Seasons, Las Vegas, Nevada
            Contact: 1-703-739-0800

November 2-6, 2000
   TURNAROUND MANAGEMENT ASSOCIATION
      Annual Conference
         Hyatt Regency, Baltimore, Maryland
            Contact: 312-822-9700 or info@turnaround.org

November 27-28, 2000
   RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC.
      Third Annual Conference on Distressed Investing
         The Plaza Hotel, New York, New York
            Contact: 1-903-592-5169 or ram@ballistic.com   
   
November 30-December 2, 2000
   AMERICAN BANKRUPTCY INSTITUTE
      Winter Leadership Conference
         Camelback Inn, Scottsdale, Arizona
            Contact: 1-703-739-0800

February 22-24, 2001
   ALI-ABA
      Real Estate Defaults, Workouts, and Reorganizations
         Wyndham Palace Resort, Orlando (Walt Disney
         World), Florida
            Contact: 1-800-CLE-NEWS

July 26-28, 2001
   ALI-ABA
      Chapter 11 Business Reorganizations
         Hotel Loretto, Santa Fe, New Mexico
            Contact: 1-800-CLE-NEWS

The Meetings, Conferences and Seminars column appears
in the TCR each Tuesday.  Submissions via e-mail to
conferences@bankrupt.com are encouraged.  

                   *********

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.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.  Information
contained herein is obtained from sources believed to be
reliable, but is not guaranteed.

The TCR subscription rate is $575 for six months delivered via
e-mail. Additional e-mail subscriptions for members of the same
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are $25 each. For subscription information, contact Christopher
Beard at 301/951-6400.

                 * * * End of Transmission * * *