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InterNet Bankruptcy Library - News for July 8, 1997

Bankruptcy News For July 8, 1997

  1. Enstar Announces Sale of First Union
            Stock to Retire Debt

  3. Flagstar Restructuring Plan Receives
            Overwhelming Support

  5. HFS Incorporated Responds to
            Montgomery Ward Bankruptcy Filing

  7. Montgomery Ward Bankruptcy News:
            First Issue Free

  9. First Merchants Acceptance Corporation
            Announces Loan Defaults; May Seek Bankruptcy Protection

Enstar Announces Sale of First Union
Stock to Retire Debt

MONTGOMERY, Ala.--July 8, 1997--The Enstar Group Inc.
(ESGR:OTC) today announced the sale in the market on July 3 and
July 7 of 176,300 shares of common stock of First Union Corp.
held by Enstar.

Enstar also announced that it may sell up to an additional
13,700 shares of common stock of First Union in the market in the
near future. The net proceeds from the sales will be used by
Enstar to repay approximately $18.1 million of indebtedness owed
to First Union National Bank of Georgia. The First Union
indebtedness was incurred by Enstar in October 1996 in order to
make final distributions to creditors under Enstar's bankruptcy
plan. Following the sales on July 3 and July 7, Enstar holds
677,123 shares of common stock of First Union Corp.

CONTACT: The Enstar Group Inc., Montgomery Amy M. Dunaway,

Flagstar Restructuring Plan Receives
Overwhelming Support

SPARTANBURG, S.C.--July 8, 1997--href="chap11.flagstar.html">Flagstar Companies, Inc.
(OTC:FLST) today announced that its financial restructuring plan
has been overwhelmingly approved by creditors and shareholders in
the consent solicitation which concluded yesterday, paving the
way for a voluntary, "prepackaged" Chapter 11 filing in
U.S. Bankruptcy Court in South Carolina within the next few days.

The company said that every class approved the plan by a wide
margin except for holders of its 10% Convertible Junior
Subordinated Debentures due 2014, which was expected. The Chapter
11 filing therefore is "prepackaged," which should
result in an expedited bankruptcy process and a quick emergence
from Chapter 11. Although one class, holding the smallest amount
of Flagstar's debt, has not voted in favor of the plan, the
bankruptcy court may still approve the plan if it is deemed fair
and equitable to all stakeholders, in which case the class may
forfeit its right to any recovery under the plan.

"We are pleased by the support we have received from our
senior note holders, our senior subordinated debenture holders
and our preferred and common stockholders in the face of a much
needed financial overhaul," said James B. Adamson, chairman
and chief executive officer of Flagstar. "The vote is a
clear indication that our plan treats all classes fairly. With
the voting now behind us, we are in an excellent position to
complete our restructuring on our original schedule by the fall
of this year."

Flagstar is one of the nation's largest restaurants companies,
with over 3,200 moderately-priced restaurants and annual revenues
of approximately $2.7 billion. Flagstar owns and operates the
Carrows, Coco's, Denny's, El Pollo Loco and Quincy's Family
Steakhouse restaurant brands and is the largest franchisee of

CONTACT: Flagstar Companies Inc. Investor Contact: Larry
Gosnell, 864/597-8658 Media Contact: Karen Randall, 864/597-8440

HFS Incorporated Responds to Montgomery
Ward Bankruptcy Filing

PARSIPPANY, N.J.--July 8, 1997--HFS Incorporated (NYSE:HFS)
provided the following statement relating to the potential
acquisition of Signature Financial/Marketing Inc. from href="chap11.montgomeryward.html">Montgomery Ward & Co. Inc.
which announced it has filed for bankruptcy protection under
Chapter 11 of the United States Bankruptcy Code:

"The company has fulfilled its strategic objective in
direct marketing through its pending merger with CUC
International (NYSE:CU). However, the company continues to focus
on acquisitions which are strategic, and earnings per share and
cash flow additive. We believe the potential acquisition of
Signature may achieve those objectives upon the successful
conclusion of the reorganization of Montgomery Ward."

HFS Incorporated is a global provider of real estate and
travel services. The company is the world's largest franchisor of
residential real estate brokerage offices, provides mortgage
services to consumers and is the global leader in corporate
employee relocation.

HFS is also the largest franchisor of hotels and rental car
agencies, the leading provider of vacation timeshare exchanges
and is the second largest vehicle management company worldwide.
HFS and CUC recently announced a merger of equals expected to
close in the fall of 1997.

CONTACT: HFS Incorporated, Parsippany Elliot Bloom,

Montgomery Ward Bankruptcy News:
First Issue Free

Princeton, N.J., July 8, 1997 - Bankruptcy Creditors' Service,
Inc., today announced publication of MONTGOMERY WARD BANKRUPTCY
NEWS. This new case-specific bankruptcy newsletter follows
yesterday's announcement by Montgomery
Ward Holding Corp., Montgomery Ward & Co., Incorporated

and 58 of their affiliates that they have commenced a
reorganization under chapter 11 of the United States Bankruptcy

"Montgomery Ward proposes to restructure $4 billion of
debt by repositioning itself in the retail marketplace-maybe
it'll work; maybe it won't," said Peter A. Chapman,
President of Bankruptcy Creditors' Service, Inc., and Editor of
Ward story ends in a successful reorganization or a painful
liquidation, MONTGOMERY WARD BANKRUPTCY NEWS-like our other
case-specific bankruptcy newsletters-will provide on-going,
in-depth news and reporting about these chapter 11

Chapman explains that attorneys, large creditors and so-called
vulture investors involved in chapter 11 bankruptcy cases as
large and complex as Montgomery Ward's find BCSI's case-specific
newsletters to be an invaluable resource as they attempt to wade
through the mountains of paper filed with the Bankruptcy Court
and long hours of court hearings.

includes, among other things:

(i) background information about Montgomery Ward and its
position in the

retail sector; (ii) Montgomery Ward's one-week-old business
plan to reposition, revitalize and rehabilitate itself; (iii)
summary data taken from Montgomery Ward's 60 separate chapter 11
bankruptcy petitions; and (iv) a calendar of key dates and
deadlines related to Montgomery Ward's chapter 11 cases. Chapman
said that next week's issue will provide subscribers with a
detailed look at:

(a) Montgomery Ward's $1,000,000,000 DIP financing facility
with General

Electric Capital Services, (b) the handfuls of emergency
motions brought before Judge Walsh to keep

Montgomery Ward's businesses operating without interruption
from an employee's or customer's perspective, and (c) the
entourage of financial, legal and other professionals who will
push and pull Montgomery Ward through the chapter 11 process.
MONTGOMERY WARD BANKRUPTCY NEWS is distributed on a subscription
basis by e-mail or fax for $45 per issue. Delivery is free by
e-mail; nominal fax charges apply. New issues are published as
significant activity occurs (generally every 10 to 20 days) in
the Montgomery Ward cases.

Chapman stated that one copy of the first issue of MONTGOMERY
WARD BANKRUPTCY NEWS is available at no charge upon request.
Chapman further advised that individuals with access to the
Internet can obtain copies of the first issue of MONTGOMERY WARD
BANKRUPTCY NEWS at News/Montgomery Ward.txt
from the InterNet Bankruptcy Library.

SOURCE Bankruptcy Creditors' Service, Inc. /CONTACT: Peter A.
Chapman of Bankruptcy Creditors' Service, Inc., 609-392-0900, fax
609-392-0040, or

First Merchants Acceptance Corporation
Announces Loan Defaults; May Seek Bankruptcy Protection

DEERFIELD, IL---July 8, 1997--As previously reported, First
Merchants Acceptance Corp. (NASDAQ: FMACE) discovered certain
irregularities involving unauthorized entries made in the
company's financial records that resulted in its being out of
compliance under its financing arrangements.

The company announced today that it is in default under its
secured senior loan agreement with its bank group (which expired
by its terms on June 30), as well as under the indentures under
which two series of subordinated reset notes have been issued.
The company further announced that it has not been able to obtain
replacement financing for its senior loan facility and that its
bank group has ceased honoring checks. The company continues to
explore other sources of financing, but may seek protection under
the United States Bankruptcy Code.

First Merchants is a national specialty finance company,
primarily engaged in financing the purchase of used automobiles
by consumers who have limited access to traditional sources of
credit. The company acquires dealer-originated retail installment
contracts from franchised and independent automobile dealers and
financial institutions in 37 states.

This press release contains various forward-looking statements
and information that are based on management's beliefs as well as
assumptions made by and information currently available to
management, including statements regarding future economic
performance and financial condition, liquidity and capital
resources, and management's plans and objectives. Such statements
are subject to various risks and uncertainties which could cause
actual results to vary materially from those stated. Should one
or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, estimated, expected or
projected. Such risks and uncertainties include the availability
of financing on terms and conditions acceptable to the company,
the ability of the company to securitize its finance contracts in
the asset-backed securities market on terms and conditions
acceptable to the company, changes in the quality or composition
of the serviced finance contract receivable portfolio. Certain of
these as well as other risks and uncertainties are described in
more detail in the company's Annual Report on Form 10-K, as
amended, for the year ended Dec. 31, 1996. The company undertakes
no obligation to update any such factor or to publicly announce
the result of any revisions to any of the forward-looking
statements contained herein to reflect future events or

CONTACT: First Merchants Acceptance Corp. Norm Smagley/Howard
Adamski, 847/948-9300 or Amen & Associates Bob Amen,