TCR_Public/960708.MBX BANKRUPTCY CREDITORS' SERVICE, INC.


Bankruptcy News For:  July 8, 1996



  1. HOUSE OF FABRICS TO REDUCE NUMBER OF SHARES ISSUED...
  2. FOUNTAIN ANNOUNCES FINANCIAL RESULTS





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HOUSE OF FABRICS TO REDUCE NUMBER OF SHARES ISSUED WHEN IT EMERGES FROM CHAPTER 11


        


            SHERMAN OAKS, Calif. -- July 8, 1996  --  House of Fabrics Inc.
        (HF) said today that it has asked the Court for approval to reduce
        the total number of shares to be issued on the effective date of its
        reorganization to 5.1 million shares from 13.7 million shares.  The
        company said that it decided to reduce the total number of shares to
        be issued in order to increase the price of each share, thereby
        attempting to satisfy certain of the requirements to allow the
        company's stock to trade on a recognized exchange or the NASDAQ
        National Market System.
        


            The company said that the reduction in the total number of
        shares to be issued does not materially affect any creditor or
        equity security holder who is entitled to receive common stock in
        accordance with the company's third amended plan of reorganization.
        The proportion and total value of the stock, warrants or stock
        options to be distributed to creditors and equity holders will
        remain the same.
        


            The hearing to confirm the company's plan of reorganization is
        scheduled for July 10 in Bankruptcy Court in Los Angeles.
        


CONTACT:  Sandra Sternberg of Sitrick and Company, 310-788-2850



FOUNTAIN ANNOUNCES FINANCIAL RESULTS


        


            LARGO, Fla., July 8, 1996  --  Fountain Pharmaceuticals,
        Inc.
(OTC Bulletin Board: FPHI) announced today that revenues for
        the quarter ended June 30, 1996 were $887,000, more than a threefold
        increase over the comparable 1995 period, and net income from
        operations was $152,000, compared to $6,000 in the comparable 1995
        period.
        


            The Company's CEO, John C. Walsh, said "that the strong
        quarterly results were attributable primarily to expanding
        acceptance of the Company's products by dermatologists in Northern
        European markets, which bodes well for the products' introductions
        in larger markets in late 1996 and throughout 1997."  He also stated
        that the Company's products were finding interest among additional
        medical specialists, including podiatrists and long-term care
        providers.  Finally, he noted that the Company's new R&D facilities
        became operational in June and that developmental work on new
        projects had commenced.  "We have some interesting potentials for
        our technology," he said, and "We now have an operational base to
        support their pursuit."
        


            For the nine months ended June 30, 1996, as compared with the
        comparable nine months of 1995, revenues were $1.5 million, an
        increase of 66%, and net income from operations was $127,000, an 88%
        increase. Fountain also reported that, in addition to its year-to-
        date operating results, the Company had recorded one-time gains of
        $337,000 related to the closure of its Chapter 11 process.  The
        Company noted, however, that similar gains were recorded in 1995,
        and therefore, there would be no materially favorable effect from
        these factors on year-to-year comparisons.
        


            Fountain Pharmaceuticals, Inc., is a publicly traded company
        based in Largo, Florida, that specializes in the application of
        encapsulated delivery systems for the pharmaceutical and cosmetic
        industries.  The company's shares are traded in the "OTC Bulletin
        Board".
        


CONTACT:  John C. Walsh, CEO, Fountain Pharmaceuticals, Inc.,
        813-548-0900