TCR_Public/951006.MBX BANKRUPTCY CREDITORS' SERVICE, INC.



Niagara Mohawk Proposes Open Competition,
        Customer Choice, Sweeping Corporate Restructuring: "PowerChoice"
        Proposal Would Let Customers Choose Electricity Supplier; Includes
        Utility's Exit From Power Generation; Relief From Mandated Contracts
        With Unregulated Generators; Shared Asset Write-Downs: Price Freeze
        for Residential, Commercial Customers; Cut for Industrial Customers
        if Plan is Adopted

        
            ALBANY, N.Y.--Oct. 6, 1995--href="chap11.niagara.html">Niagara Mohawk
        Power Corp.
(NYSE:NMK) Friday proposed a sweeping corporate
        restructuring designed to create an open, competitive electricity
        market, deregulate electricity generation in the company's service
        area and freeze or reduce electricity prices over the next five
        years.
        


            The proposal, called PowerChoice, was filed today with the New
        York State Public Service Commission.  PowerChoice would allow all
        customers to choose their electricity supplier within three years
        after the plan is implemented.
        


            PowerChoice also calls for Niagara Mohawk to restructure itself
        by putting its power plants into a separate company.  The rest of
        the business would be reconfigured, under separate ownership, into a
        holding company with regulated subsidiaries that would transmit and
        distribute electricity and natural gas and supply energy services.
        It would also have subsidiaries that will engage in marketing,
        brokering and service activities.
        


            "An outdated regulatory system and failed energy policies have
        destroyed the link between electricity supply, demand and price in
        New York," Niagara Mohawk Chairman William E. Davis said.  "The
        present system doesn't work.  We have an oversupply of power but
        prices are rising.  Niagara Mohawk, our customers and shareholders
        have been pushed to a crisis point.  There must be a fundamental
        restructuring of the electricity market in Niagara Mohawk's service
        area or the upstate economy will continue to bear the burdens of
        growing electricity prices."
        


            Mr. Davis cautioned that this vision for a competitive
        electricity market and customer choice cannot be achieved unless
        high-cost contracts that the company was required to sign with
        unregulated generators are restructured and onerous state tax and
        energy policies are addressed.
        


            "Our customers are already suffering from past policies that
        require them to pay more than $400 million a year extra for power
        produced by unregulated generators," Mr. Davis said.  "In addition,
        New York utility taxes are more than double the national average.
        We stand ready to endure our fair share of the hardship that will
        result from this transition process for the long-term good of our
        customers and shareholders, but unregulated generators and the state
        absolutely must do their part as well."
        


        Key provisions of the PowerChoice proposal include:
        


            "We recognize that this is a bold plan that requires sacrifices
        by many parties," Mr. Davis said.  "But it will take a bold plan to
        undo the years of well-intentioned but harmful policies that created
        this situation.  And it will take a bold plan to create a rational
        electricity market that restores the supply demand-price link and to
        give customers choice.
        


            "Niagara Mohawk shareholders have already endured years of
        depressed returns on their investments.  Our customers have seen
        their bills rise and should not have to endure more increases due to
        escalating payments to unregulated generators and unfair taxes.  And
        our employees have experienced large staff reductions, restricted
        resources, and continuing uncertainty.  We are not willing to accept
        further deterioration of this situation.  If PowerChoice appears
        unachievable, the company cannot rule out the possibility of
        restructuring under Chapter 11 of the U.S. bankruptcy code.  That
        certainly wouldn't be in the best interest of the state or
        unregulated generators.  We look forward to discussing PowerChoice
        constructively with other parties, and we hope they will do the same
        for the sake of the New York economy."
        


            Under procedures established by the Public Service Commission,
        Niagara Mohawk and the parties to its rate case will negotiate the
        company proposal with the goal of achieving a PSC-approved
        settlement by year-end.  "We recognize that this is an arduous
        undertaking; but we remain committed to pushing our plan forward,"
        Mr. Davis said.
        


            Niagara Mohawk is an electric and gas utility with the largest
        service area in New York State.  The company serves 1.5 million
        electricity and 500,000 natural gas customers across a 24,000-square-
        mile service area in upstate New York.
        


        CONTACT:  Niagara Mohawk Power Corporation,          
                  Kerry P. Burns, 315/428-5266;
                  Stephen F. Brady, 315/428-6961
        




        NIAGARA MOHAWK $2.6 BILLION SENIOR DEBT DOWNGRADED TO 'BB' BY FITCH
        -- FITCH FINANCIAL WIRE --

        
            NEW YORK, New York--Oct. 6, 1995--href="chap11.niagara.html">Niagara Mohawk Power's
        outstanding $2.6 billion first mortgage bonds and secured pollution
        control bonds are downgraded to "BB" from "BBB" by Fitch.  The
        company's $541 million preferred stock is also downgraded to "B+"
        from "BBB-."  The credit trend is declining.

        
            Niagara Mohawk's projected bondholder protection measures are
        weak, and investors are likely to face prolonged uncertainty
        following the company's announcement today of a proposal to split
        into a distribution/transmission company and a separate generating
        company as part of a broad restructuring.
   

     
            As proposed, the restructuring would include staged initiation
        of retail open access over a period from 1997 to 2000, inauguration
        of a competitive wholesale generation market, rate freezes, and
        reformation of purchase power contracts.  According to management,
        the legal separation of the generating company would be accomplished
        via a tax- free split-up, in which common and preferred stock would
        be divided pro rata between the two corporations.  Existing
        bondholders would continue to hold bonds in the generating company,
        which would carry on as Niagara Mohawk, unless the holders exchanged
        the bonds in a voluntary exchange offer for bonds of the new holding
        company, which would acquire the electric transmission and gas and
        electric distribution businesses.
      

  
            A major risk is that the company's plan depends on many
        variables, a number of which are not in the company's control,
        including the reduction or elimination of the New York gross receipt
        tax, potential purchase of nuclear power facilities by the New York
        Power Authority, and voluntary renegotiation of uneconomic power
        purchase contracts. Power contract negotiations would be spurred by
        the twin threats that the utility will condemn unregulated generator
        properties by exercise of eminent domain or may ultimately file a
        petition in bankruptcy.  To make the generating company a
        competitive power producer, NMK proposes to write down the carrying
        value of its owned generating assets by a significant amount, which
        has been estimated at roughly $400 million, providing that non-
        utility generators reduce contractual prices to effect a reduction
        in the present value of contract obligations four times as great as
        NMK's write-down.  It is highly uncertain whether the outcome will
        ultimately match this aggressive proposal.
        


            While pressing forward with the proposed restructuring, NMK
        plans to hedge its bets by filing a traditional rate increase
        application for a large rate increase to become effective in 1997,
        and may consider an application for an emergency rate increase to
        become effective in 1996. Despite the company's forecasts that a
        voluntary bankruptcy is an option in the event that the proposed
        restructuring is not implemented as proposed,  Niagara Mohawk
        continues to pay common stock dividends of approximately $40 million
        per quarter.
        


        /CONTACT:  Ellen Lapson, 212-908-0504, or John Watt, 212-908-0523/




        JAMESWAY CORPORATION ANNOUNCES SALES FOR
SEPTEMBER 1995 AND OTHER
        DEVELOPMENTS

        
            SECAUCUS, N.J., Oct. 6, 1995 -- href="chap11.jamesway.html">Jamesway Corporation
        (NYSE: JMY) today announced that same store sales for the five-week
        period ended September 30, 1995, decreased 9% compared with the
        corresponding period a year ago.
        


            Sales for the five-week period ended September 30, 1995,
        excluding leased departments, were $57.5 million compared to $64.2
        million for the same period a year ago.  The Company had 90 stores
        in operation at the end of the period this year compared with 92
        stores a year ago.
        


            Sales for the thirty-five weeks ended September 30, 1995,
        excluding leased departments were $374.0 million compared with
        $418.5 million for the thirty-five week period a year ago.  Same
        store sales for the thirty-five week period were 8% below the same
        period last year.
        


            Jamesway also announced that, as a result of the continued weak
        sales results, operating losses and increasingly constricted trade
        credit, it is considering the filing of a petition under Chapter 11
        of the United States Bankruptcy Code.
        


            Jamesway Corporation operates a chain of 90 regional discount
        department stores in seven Northeastern and mid-Atlantic States.
        


        /CONTACT:  Michael Palmer, Executive VP, Finance, Administration of
        Jamesway Corporation, 201-330-6000/




        CONSUMAT SYSTEMS FILES FOR PROTECTION UNDER CHAPTER 11

        
            RICHMOND, Va., Oct. 6, 1995 -- href="chap11.consumat.html">Consumat Systems, Inc. (OTC-
        Bulletin Board: CSMT), the Richmond, Virginia based incineration and
        pollution control equipment manufacturer, announced today that it
        has filed for protection under Chapter 11 of the United States
        Bankruptcy Code, in the United States Bankruptcy Court for the
        Eastern District of Virginia in Richmond.
        


            While the Company has operated profitably for the last five
        quarters, the bankruptcy filing was precipitated by a continued
        working capital deficiency and litigation involving New England
        Waste Services, Inc. (NEWS).  The NEWS litigation relates to the
        1994 sale of the stock in the Company's landfill subsidiary in New
        Hampshire.  Subject to Bankruptcy Court approval, Sirrom Capital
        Corporation, a Small Business Investment Company based in Nashville,
        Tennessee, will provide up to $500,000 of Debtor in Possession
        financing during the bankruptcy.  This financing will alleviate the
        working capital deficiency and allow the Company to complete all
        contracts in a timely manner.  Subject to successful negotiation of
        creditor claims, Sirrom will also provide post- bankruptcy financing
        to the Company.
        


            The Company intends to file a plan of reorganization later this
        month and will seek confirmation of the plan as soon as is possible
        thereafter.  Pending confirmation, the Company will conduct business
        as usual.
        


        /CONTACT:  Robert L. Massey or Mark E. Hills, Consumat Systems Inc.,
        804-746-4120/