TCR_Public/960523.MBX BANKRUPTCY CREDITORS' SERVICE, INC.


Bankruptcy News For - May 23, 1996



  1. Country World is granted extension to close on $5,000,000 financing
  2. Grand Union announces 4th Quarter and Fiscal Year Results
  3. ChatCom Inc. completes $3 million preferred stock offering
  4. KEENE CORPORATION PLAN OF REORGANIZATION APPROVED
  5. HOUSE OF FABRICS OBTAINS $60 MILLION FINANCING FROM CIT




Holly Products Inc. is granted extension to close on
$5,000,000 financing of casino property



            BALA CYNWYD, Pa. -- May 23, 1996 -- Holly Products
        Inc. (NASDAQ:HOPR, HOPRW, AND HOPRR; BSE:HOP, HOPP) announced today
        that the U.S. Bankruptcy Court, District of Colorado, has granted
        the company's subsidiary, Country
World Casino Inc.'s
motion to
        extend the time to close on its previously approved $5,000,000
        financing package.
        


            The court gave Country World until June 17, 1996 to close on the
        financing and resolve all disputes concerning prior secured and
        unsecured debt.
        


            The purpose for the extension was to allow Country World the
        necessary time to resolve certain title issues and to replace one of
        the lenders associated with the financing.
        


            Holly Products' chairman has committed over $2,000,000 of his
        personal funds to replace such lenders. Accordingly, the chairman's
        loan, combined with the loan from Kennedy Funding Inc. will be
        sufficient to complete the court approved financing on a timely
        basis.  Closing is scheduled for early June.

        
            William Patrowicz, president of Holly Products Inc. stated,
        "Again, our chairman has stepped up to the plate to do what is best
        for the company.  His support at this crucial time will ensure a
        speedy resolve to the bankruptcy issues and allow us to get on with
        the building of the casino."
   

     
            Holly Products Inc. headquartered in Bala Cynwyd, Pa., has a
        wholly owned subsidiary, Navtech Industries Inc. of Blanding, Utah,
        and a majority owned subsidiary, Country World Casinos Inc., of
        Denver. Navtech is a manufacturer and tester of electronic
        components for casino equipment, hotel equipment, and signage.
        Country World Casinos Inc. is a development corporation, whose plan
        is to construct a casino in Black Hawk, Colorado, as well as a hotel
        complex.
      


        CONTACT: Martin E. Janis & Co. Inc., Chicago
                 Elliott Jacobson, 312/943-1100



Grand Union announces
4th Quarter and Fiscal Year Results


        


            WAYNE, N.J. -- May 23, 1996 -- The
Grand Union
        Company
announced that sales for the 12 week (the 'fourth
quarter')
        and 52 week (the 'fiscal year') periods ended March 30, 1996 totaled
        $519.9 million and $2,307.8 million, respectively, compared to
        $524.1 million and $2,391.7 million for the 12 week and 52 week
        periods ended April 1, 1995.  
        


            Same store sales increased 0.4% for the fourth quarter, while
        declining 0.9% for the fiscal year.
        


            EBITDA totaled $35.9 million, or 6.9% of sales, and $144.3
        million, or 6.3% of sales for the fourth quarter and the fiscal
        year, respectively, compared to $14.9 million, or 2.8% of sales, and
        $135.6 million, or 5.7% of sales for the comparable periods of the
        prior year.  
        


            Roger E. Stangeland, Chairman of the Board, said that he was
        especially pleased with the actions management has taken this year,
        working jointly with the Board, to develop a dynamic, customer
        focused strategic plan designed for long-term growth.  "Grand Union
        is in the process of implementing its strategy which has two primary
        objectives," Stangeland said.  "First, the company is committed to
        building sales by reducing costs in areas the customer doesn't see
        and reinvesting those savings in areas the customer sees every day.
        Secondly, Grand Union will focus much of its attention on developing
        even further the strengths it currently has in perishable and
        service department merchandising."
        


            Stangeland said that he was encouraged with the modest same
        store sales increases for the fourth quarter, only the second
        quarterly increase since the first quarter of fiscal 1992.  "The
        progress in same store sales this year, culminating in the positive
        fourth quarter comparison, demonstrates that our strategy is on
        target with the customer."
        


            Joseph J. McCaig, president and chief executive officer, said,
        "During the past year we made a number of important and positive
        changes in the way we operate our business under the two main
        headings of our strategic plan.  To reduce costs the customer
        doesn't see, we closed three distribution centers and entered into
        agreements with C&S Wholesale Grocers to supply product to our
        stores.  Additionally, we completed the store voluntary resignation
        incentive programs which reduced average hourly pay.  Finally, we
        made our organizational structure more effective by eliminating
        costly redundant regional organizations, centralizing store support
        services and decentralizing operational control over stores."
        


            "We reinvested those savings in programs the customer sees every
        day,"  McCaig said.  "We repositioned the pricing in most of our
        stores and implemented exciting new marketing and customer service
        programs in select areas which emphasize our perishables
        merchandising strengths."
        


            McCaig went on to say, "During the fourth quarter we completed
        the renovation of two stores, West Nyack and Monroe, NY, which are
        the first stores to completely incorporate the concepts of our
        'MASTERS' (Maximize All Space, Totally Expand the Right Stuff)
        strategy.  The total sales increases and favorable mix changes in
        both of these stores have met or exceeded our expectations.  During
        the fourth quarter, we also completed an enlargement of our Lake
        Placid, NY store and acquired a store in Millerton, NY."
        


            The company reported that total chain sales declined during this
        year's fourth quarter and fiscal year compared to the same periods
        of the prior year as a result of the sale or closure of 24 stores
        last year which were not replaced, partially offset by the effects
        of incremental new stores.  Additionally, as noted above, same store
        sales increased for the fourth quarter and declined for the fiscal
        year.
        


            The same store sales increase for the fourth quarter of 0.4%
        principally resulted from the positive impact of the 'More Lower
        Prices' price repositioning program implemented in most of the
        company's stores during the year, additional marketing and customer
        service programs introduced this year in the metropolitan Albany, NY
        and Bergen County, NJ areas and minor effects of the bankruptcy
        proceedings on last year's sales.  In addition, the fiscal year was
        positively impacted by the severe snowstorms which struck the New
        York metropolitan area in late December and early January and
        negatively impacted by strong promotional programs during last
        year's second and third quarters and the effects of closing the
        company's two New York metropolitan area distribution centers.
        


            EBITDA (earnings before LIFO provision, depreciation,
        amortization, unusual items, interest expense, income taxes and
        extraordinary gain) for the fourth quarter and the fiscal year, as a
        percentage of sales, was positively influenced by the savings
        generated by closing three distribution centers and entering into
        agreements with C&S Wholesale Grocers Inc. to supply product to
        Grand Union's stores, by the restoration this year of vendor
        promotional allowances and other vendor support which were not
        available to the company during the bankruptcy process last year and
        by gains from the sale of stores ($1.5 million for the quarter and
        $5.4 million for the fiscal year compared to none and $2.5 million
        for the same periods of the prior year).  EBITDA was negatively
        influenced, as a percentage of sales, by reduced gross margins and
        increased advertising costs associated with the price repositioning
        program and increased store labor principally related to the
        company's metropolitan Albany and Bergen County marketing programs.
        


            In addition to the two 'MASTERS' renovations, the company opened
        two new and two replacement stores and completed three enlargements
        and four major renovations this year.  Capital spending for the
        fiscal year, including capitalized leases other than real estate
        leases, totaled $46 million.  The company anticipates capital
        spending of $45 to $50 million during fiscal 1997.  Grand Union
        currently has under construction three replacement stores in Malta
        and Niskayuna, NY and Dumont, NJ, and a new store in Berlin, VT.
        


            The company reported a net loss of $29.3 million for the fourth
        quarter ($2.93 per share).  Included in the loss was a provision of
        $2.5 million relating to Grand Union's organizational restucturing.
        The Company's loss for the fourth quarter before amortization of
        excess reorganization value was $4.7 million ($.47 per share).  Net
        income for the fiscal year totaled $715.6 million and included an
        extraordinary gain on debt discharge of $854.8 million.
        


            Grand Union emerged from bankruptcy on June 15, 1995, whereupon
        it adopted "fresh-start" reporting in accordance with American
        Institute of Certified Public Accountants Statement of Position 90-
        7, "Financial Reporting by Entities in Reorganization under the
        Bankruptcy Code."  Adoption of fresh-start reporting resulted in an
        adjustment of the basis of assets, liabilities and equity to their
        respective fair values.  Under fresh-start reporting, the company is
        required to separate the results of its pre emergence operations
        from its post-emergence operations.  Accordingly, pre-emergance
        periods are not comparable with post-emergance periods.  The company
        has combined the pre-emergence and post-emergence operations for
        press release purposes and, because of the lack of comparability of
        net earnings, the company has chosen to discuss Sales and EBITDA
        since these measures are generally unaffected by the restructuring.

        
            Grand Union is a regional retail food company which currently
        operates 229 retail food stores in six Northeastern states.  Its
        common stock is traded under the GUCO symbol on the NASDAQ National
        Market.


     
                           THE GRAND UNION COMPANY
                      CONSOLIDATED STATEMENT OF OPERATIONS

                                 (unaudited)
                           (in thousands of dollars)
        
                            12 Weeks Ended            52 Weeks Ended
                         March 30,    April 1,    March 30,    April 1,
                           1996        1995        1996         1995
        
        Sales               $ 519,937   $ 524,060    $2,307,810   $2,391,696
        
        Gross profit (a)      168,076     150,302       715,497      707,231
        
        Operating and
         administrative
         expense (a)         (132,161)   (135,390)     (571,164)
        (571,640)
        
        Earnings before LIFO
         provision, depreciation,
         amortization, unusual
         items, interest expense,
         income tax benefit and
         extraordinary gain on
         debt discharge
         (EBITDA)              35,915      14,912       144,333      135,591
        
        LIFO provision           (800)      1,860        (1,800)       1,110
        
        Depreciation and
         amortization         (19,336)    (19,874)      (77,055)
        (87,098)
        
        Amortization of excess
         reorganization value (24,580)       --         (83,985)        --
        
        Unusual items (b)      (2,500)    (14,905)      (40,627)
        (27,417)
        
        Earnings (loss) before
         interest expense,
         income tax benefit and
         extraordinary gain on
         debt discharge       (11,301)    (18,007)      (59,134)      22,186
        
        Interest expense      (23,678)    (27,858)      (98,985)
        (182,016)
        
        Loss before income
         tax benefit and
         extraordinary gain
         on debt discharge   (34,979)     (45,865)     (158,119)
        (159,830)
        
        Income tax benefit     5,715         --          18,927        --
        
        Loss before
         extraordinary gain
          on debt discharge  (29,264)     (45,865)     (139,192)
        (159,830)
        
        Extraordinary gain
         on debt discharge      --           --         854,785        --
        
        Net income (loss)    (29,264)     (45,865)      715,593
        (159,830)
        
        Accrued preferred
         stock dividends        --         (1,307)
        --        (19,480)
        
        Net income (loss)
         applicable to
         common stock      $ (29,264)   $ (47,172)  $   715,593   $
        (179,310)

        
        (a) Gross profit and operating and administrative expenses reflect
        certain reclassifications made for the 52 and 12 week periods ended
        April 1, 1995 to conform to current year presentation.  

        
        (b) Unusual items consist of (i) a $2,500 provision related to
        organizational restructuring for the 12 and 52 weeks ended March 30,
        1996, (ii) a $3,747 charge related to pension settlements and early
        retirement programs for the 12 and 52 weeks ended April 1, 1995,
        (iii) a $8,888 and $10,770 charge for reorganization expenses for
        the 12 and 52 weeks ended April 1, 1995, respectively, (iv), a
        $2,270 and $12,900 provision for store closures for the 12 and 52
        weeks ended April 1, 1995, respectively, (v) a $15,000 warehouse
        closure provision for the 52 weeks ended March 30, 1996 (vii)
        $18,627 of reorganization expense for the 52 weeks ended March 30,
        1996, and (viii) a $4,500 provision for voluntary resignation
        incentives for the 52 weeks ended March 30, 1996.  
   


        CONTACT: Grand Union, Wayne
                 Donald C. Vaillancourt, 201/890-6100



ChatCom Inc. reports completion of a $3
million Regulation D 6% convertible preferred stock offering


        


            CHATSWORTH, Calif. -- May 23, 1996 -- ChatCom Inc.
        (NASDAQ: CHAT) announced Thursday the completion of a Regulation D
        6% convertible preferred stock offering totaling $3.0 million.
        


            The company is in the process of registering with the Securities
        and Exchange Commission the common stock which may be issued upon
        the conversion or redemption of the preferred stock.

        
            James Mariner, president and CEO, reports that the proceeds
        replace debt and provide for additional working capital.  "The
        company is now debt free with a strong balance sheet to support the
        product positioning the company is undertaking in the market place."
   

     
            Mariner further stated:  "The company expects to report a loss
        for the year ended March 31, 1996 of approximately $2 million
        (including $320,000 for a restructuring charge), which approximates
        the loss for the prior fiscal year.  
      

  
            "During the fourth quarter, the company experienced a
        significant drop in revenues.  The company believes that the drop in
        revenues was in part attributable to decreased government revenues.
        The decline is also associated with cash shortages the company
        experienced during the third and fourth quarter which restricted
        advertising and marketing for those periods, both vital for revenue
        generation.  
        


            "Advertising and marketing have been restarted with a brand new
        vigor and orders for new products during the company's current
        quarter are very encouraging.  The performance of the ChatTwin (a
        single slot board with dual independent processors and disk drives)
        already installed at U.S. Robotics, our launch customer, combined
        with other new products to be released in June, will make our
        company a strong contender everywhere a high density, high
        availability global information systems platform is required."


        CONTACT:  ChatCom Inc. -
                  James B. Mariner/John R. Grady, 818/709-1778


        

KEENE CORPORATION PLAN OF REORGANIZATION APPROVED BY
CREDITORS AND STOCKHOLDERS


        


            NEW YORK, May 23, 1996 - Keene
Corporation
(OTC Bulletin
        Board: KEENQ) today announced that each voting class of its
        creditors and its stockholders has voted to accept Keene
        Corporation's Fourth Amended Plan of Reorganization, dated March 11,
        1996 (the "Plan").  In addition, asbestos-related creditors voted to
        accept the Plan in a majority sufficient to meet the requirements
        for the issuance of a Permanent Channeling Injunction under Section
        524(g) of the Bankruptcy Code.  The Bankruptcy Court has scheduled a
        confirmation hearing for June 12, 1996.
        


        CONTACT:  Janice B. Grubin of Berlack, Israels & Liberman, LLP,
        212-704-0100



HOUSE OF FABRICS
OBTAINS $60 MILLION FINANCING FROM CIT


        


            SHERMAN OAKS, Calif., May 23, 1996 - href="chap11.hf.html">House of Fabrics,
        Inc.
(NYSE: HF) announced today that it has obtained a commitment
        for $60 million in financing from The CIT Group.  The new financing
        becomes effective at the end of July, when the company anticipates
        that it will successfully complete its restructuring and emerge from
        Chapter 11.
        


            Under the terms of the new financing agreement, The CIT Group
        will provide a $60 million revolving line of credit for an initial
        period of three-years.  The financing is part of the company's
        revised plan of reorganization, which has the support of the
        company's major constituencies, including its bank group, led by
        Bank America as agent, and the official committees of unsecured
        creditors and equity holders.
        


            "With this new financing, we are confident that House of Fabrics
        will be successful in its timely emergence from Chapter 11," said
        Gary L. Larkins, president and chief executive officer of House of
        Fabrics.
        


            "We are extremely pleased with the terms of the facility CIT has
        agreed to," said Mr. Larkins.  "The new financing, in combination
        with recent reductions in company debt, provides the liquidity and
        operating options the company needs to continue to rebuild and
        revitalize its business."
        


            Freddie Reiss, managing partner and head of the restructuring
        practice of Price Waterhouse LLP, who serves as financial advisor
        for the official committee representing the company's unsecured
        creditors, said, "The new financing supports the company's
        consensual Plan of Reorganization and provides House of Fabrics with
        the opportunity to emerge from Chapter 11 with a fresh, new start."
        


            A hearing will be held later today to consider the proposed
        disclosure statement for the plan.  The acceptance of the disclosure
        statement by the Bankruptcy Court will pave the way for the company
        to begin solicitation of creditors and equity holders for approval
        of the plan.
        


            House of Fabrics filed to restructure under Chapter 11 on
        November 2, 1994.
        


        CONTACT:  Sandra Sternberg or Rivian Bell, both of Sitrick and
        Company, 310-788-2850