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InterNet Bankruptcy Library - News for August 20, 1997

Bankruptcy News For August 20, 1997

  1. Bradlees Reports Improved
            Second-Quarter Results

  3. Grossman's Releases Second Quarter
            Results and Balance Sheets

  5. Jayhawk Acceptance Corporation
            Announces Filing of Joint Plan of Reorganization

  7. LOT$OFF Corporation Announces Planned
            Store Conversions

  9. Payless Cashways Receives Court
            Approval on Permanent DIP Financing

  11. Tapistron International, Inc.
            Emerges from Chapter 11 Bankruptcy

Bradlees Reports Improved
Second-Quarter Results

BRAINTREE, Mass., Aug. 20, 1997 - href="chap11.bradlees.html">Bradlees, Inc. today reported
significantly reduced operating and net losses for the second
quarter (13 weeks) ended August 2, 1997, compared with the second
quarter (13 weeks) ended August 3, 1996.

Bradlees reported a second-quarter loss before interest and
reorganization items of $11.1 million, compared with a loss of
$39.4 million last year. The EBITDA (earnings before interest,
taxes, depreciation and amortization, and net restructuring
payments) loss was $2.0 million, compared with an EBITDA loss of
$23.1 million in the prior-year period. The net loss was $16.9
million, or $1.48 per share, compared with a net loss of $82.8
million, or $7.25 per share, last year. Last year's results
included charges totalling $45.8 million primarily associated
with 14 closing stores of which $39.9 million was classified as
reorganization items and the remainder included in cost of goods

The loss before interest and reorganization items was $37.1
million for the 26 weeks ended August 3, 1997, compared with
$83.1 million last year. The EBITDA loss was $18.6 million,
compared with an EBITDA loss of $55.8 million in the prior-year
period. The year-to-date net loss was $48.8 million, or $4.29 per
share, compared with a net loss of $136.5 million, or $11.96 per
share, last year.

Total sales for the second quarter were $311.5 million,
compared with $386.2 million, reflecting the closing of 15 stores
since the end of last year's second quarter (12 stores were
closed during last year's second quarter), and a

comparable-store sales decline of 7.3 percent, reflecting, in
part, the continued de- emphasis of the aggressive promotional
activity of last year. Total sales for the year-to-date period
were $588.3 million, compared with $736.1 million last year,
reflecting the closing of 27 stores since the beginning of last
year's second quarter, and a comparable-store sales decline of
6.9 percent.

Peter Thorner, Chairman and Chief Executive Officer, said,
"Entering the busiest selling period of the year, we are
halfway to the year-over-year EBITDA improvement of $76 million
forecasted in our 1997 business plan. This significant
improvement in operational results is a result of management's
focus on improving gross margin rates and reducing expenses.

"We are continuing to make modifications to Bradlees'
marketing strategy, merchandising mix and presentation. Among
these changes are the gradual re-establishment of lower opening
price points in selective merchandise categories, and the
increase in the item intensity and price-point orientation of the
weekly advertising circulars. We have also seen immediate
positive customer response to the reintroduction of certain basic
health, beauty, convenience and commodity items - which customers
expect to be carried by discount stores. Additionally, initial
results from the late-July reinstatement of the layaway program
are very encouraging," Mr. Thorner said. "We anticipate
that the implementation of these and other evolutionary changes
during the coming months will lead to improved sales performance
by enhancing customer awareness of the quality and value of
Bradlees' merchandise offerings, while increasing customer
traffic and avoiding costly promotions," Mr. Thorner said.

Bradlees operates 109 stores in seven Northeastern states and
is one of the nation's largest discount retailers with annual
total sales of more than $1.5 billion.

                         (Operating as
                   (Dollars in thousands except
                   per share amounts)

                                13 Weeks ended   
                         Aug. 2, 1997   Aug. 3,
                         1996  Aug. 2, 1997
  Aug. 3, 1996

      Total sales          $311,507     $386,195 

      Leased sales           l4,091       16,617 
      Net sales             297,416      369,578
      Cost of goods sold    204,480      268,182
      Gross margin           92,936      101,396
        Leased department and
       other operating income 3,l45        3,931
                             96,081      105,327

        Selling, store operating,
         administrative and
       distribution expenses 98,134      134,281
        Depreciation and
       amortization expense   9,038       10,459

        Loss before interest and
       reorganization items(11,091)     (39,413)

        Interest and
       debt expense           3,702        2,444
      Reorganization items    2,071       40,928

      Net loss            ($16,864)    ($82,785) 

      Net loss per share    ($1.48)      ($7.25) 

                            BRADLEES INC. AND
                         (Operating as
                        CONDENSED CONSOLIDATED
                        BALANCE SHEETS
                                (Dollars in

  2/1/97    8/3/96

        Current assets:
      Unrestricted cash and cash equivalents     
      $10,858    $10,025
      Restricted cash and cash equivalents       
        9,334      9,126
       Total cash and cash equivalents           
        20,192     19,151
      Accounts receivable                        
       10,453      8,240
      253,993    236,920
      Prepaid expenses                           
        8,887      8,466
      Assets held for sale                       
        7,754      8,419
       Total current assets                      
       301,279    281,196

      Property excluding capital leases, net     
      136,975    139,246
      Property under capital leases, net         
       22,681     24,395
       Total property, plant and equipment, net  
       159,656    163,641
        Lease interests at fair value and lease
       acquisition costs, net                    
       146,570    150,229
      Assets held for sale                       
        5,250      5,250
      Other, net                                 
        4,432      3,884
       Total other assets                        
       156,252    159,363

       Total Assets                             
       $617,187   $604,200

                           BRADLEES, INC. AND
                         (Operating as
                        CONDENSED CONSOLIDATED
                        BALANCE SHEETS
                                (Dollars in

       8/2/97        2/1/97

        Current liabilities:
      Accounts payable                   
      $139,410      $115,315
      Accrued expenses                     
      41,389        45,924
      Short-term debt                      
      89,000        42,500
      Self-insurance reserves               
      7,378         7,086
        Current portion of capital
       lease obligations                    
       1,966         1,722
      Total current liabilities           
      279,143       212,547
        Long-term liabilities:
      Obligations under capital leases     
      32,224        33,296
      Deferred income taxes                 
      8,581         8,581
      Self-insurance reserves              
      14,979        14,386
      Other long-term liabilities          
      26,976        27,642
      Total long-term liabilities          
      82,760        83,905

        Liabilities subject to settlement under
       the reorganization case            
       567,365       571,041

        Stockholders equity (deficiency):
        Common stock
      Par value                               
      115           115
      Additional paid-in capital          
      137,951       137,951
      Unearned compensation                   
      ---         (167)
      Accumulated deficit               
      (449,382)     (400,525)
      Treasury stock, at cost               
      (765)         (667)
      Total stockholders' deficiency    
      (312,081)     (263,293)

        Total Liabilities and Stockholders'
       $617,187      $604,200

SOURCE Bradlees, Inc. /CONTACT: Bill Roberts of Bradlees,

Grossman's Releases Second Quarter
Results and Balance Sheets

CANTON, Mass.---Aug. 20, 1997--Grossman's
(NASDAQ:GROSQ) released consolidated balance sheets as
of June 30, 1997 and statements of operations for the three
months and six months ended June 30, 1997. The Company reported a
net loss for the 1997 second quarter of $7.6 million versus a net
loss of $2.9 million in the second quarter of 1996. The net loss
per share in the second quarter of 1997 was 27 cents versus a net
loss per share of 11 cents in 1996.

For the six month period ended June 30, 1997, the Company
reported a net loss of $19.6 million, or 70 cents per share,
versus a net loss of $57.6 million, or $2.21 per share, in 1996.
The 1996 results include a first quarter restructuring charge of
$40.2 million.

Sales from ongoing operations for the three months ended June
1997 totalled $55.7 million, 36.5% below the $87.7 million for
the same period in 1996. Comparable store sales for the second
quarter were 37.7% below the 1996 level.

Sales from ongoing operations for the six months ended June
1997 totalled $105.1 million, 31.3% below the $152.7 million for
the same period in 1996. Comparable store sales for the six month
period were 34.0% below the 1996 level.

Statements contained in this release that are not based on
historical fact are "forward-looking" statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Important factors, beyond the company's control, that could
cause actual results to differ materially from those in the
forward-looking statements include, but are not limited to, the
need for approvals by the Bankruptcy Court, competition,
stability of customer demand, and the sufficiency of its capital
resources. Undue reliance should not be placed on these forward
looking statements, which speak only as of the date hereof. The
company undertakes no obligation to publicly release revisions to
these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence
of unanticipated events.

Grossman's operates 15 stores under the name Contractors'
Warehouse in California, Indiana, Kentucky and Ohio, and 28
stores under the name Mr. 2nd's Bargain Outlet in Massachusetts,
New York and Rhode Island.

Grossman's Inc. press releases and public filings can be
accessed on the Internet through Business Wire's Home Page:

The Bargain Outlet Division maintains a web site for product
information, store locations and feedback:

                      GROSSMAN'S INC. AND
                         CONSOLIDATED BALANCE
                    (in thousands, except per
                    share data)

                                       JUNE 30,  
                                       31,  JUNE




  Cash and cash equivalents         $    128    
  $  1,058    $    679 Receivables, less
  allowance of
    $2,209 at June 30, 1997
    $2,810 at December 31, 1996
    and $745 at June 30, 1996          3,050     
     10,710      14,548
  Inventories                         59,922     
   56,662      61,229 Property held for sale     
           8,819       15,199       4,802 Other
  current assets                 2,464       
  1,559       3,884
        Total current assets            74,383   
           85,188      85,142

    net of accumulated depreciation
    of $17,416 at June 30, 1997,
    $16,114 at December 31, 1996
    and $15,220 on June 30, 1996      23,035     
     25,549      30,324
  PROPERTY HELD FOR SALE                 -       
      -        38,232 PREPAID PENSION ASSET      
           9,691        9,536         125 OTHER
  ASSETS                         3,109       
  3,168         927
        TOTAL ASSETS                  $110,218   
         $123,441    $154,750


                       GROSSMAN'S INC. AND
                          CONSOLIDATED BALANCE
                     (in thousands, except per
                     share data)

                                     JUNE 30,  
                                     DECEMBER 31,



   Accounts payable and accrued
    liabilities                     $ 25,630    
    $ 60,229    $ 71,444

   Liabilities subject to Compromise  46,202     
      --          -- Accrued interest            
            500          397         410

   Revolving term note payable        32,443     
    30,024        -- Current portion of long-term
    and capital lease obligations      2,860     
     12,228       7,095

        Total current liabilities      107,635   
          102,878      78,949

  REVOLVING TERM NOTE PAYABLE           --       
     --        20,310

   OBLIGATIONS                           140     
       634      22,117

  PENSION LIABILITY                     --       
     --         8,247

  OTHER LIABILITIES                    9,173     
    7,241       8,390
        Total liabilities              116,948   
          110,753     138,013

   Common stock, $.01 par value,
    Shares authorized - 50,000
    Shares issued - 28,000 in 1997,
    27,676 at December 31, 1996 and
    26,519 at June 30, 1996              281     
        277         265

  Additional paid-in-capital         157,992     
  157,825     156,229

  Retained earnings (deficit)       (165,003)   
  (145,414) (121,839)  Minimum pension liability
  --           --      (16,476)
    Cumulative foreign currency
     translation adjustment
  --           --       (1,442)       
        Total Stockholders'
        Investment                    (6,730)    
         12,688      16,737

        INVESTMENT                  $110,218    
        $123,441    $154,750


                         GROSSMAN'S INC. AND
                       CONSOLIDATED STATEMENTS OF
                       OPERATIONS (in thousands,
                       except per share data)

                                   THREE MONTHS  
                                   MONTHS ENDED
                                   JUNE 30,      
                                   ENDED JUNE 30,
                                  1997       1996
                                  1996 ----      
                                  ----      ----

  SALES                      $ 55,749   $ 87,704 
   $105,124 $200,685 COST OF SALES               
  42,479     66,833     81,986 153,844
                             --------   --------
                              --------   --------

    Gross Profit               13,270     20,871 

    Selling and
      administration           18,386     22,929
    Depreciation and
        amortization                949       
        997      1,971      2,846
    Store closing expense
  -          -          -      40,150   
    Preopening expense             64        395
                             --------   --------
                              --------   --------

  OPERATING  (LOSS)            (6,129)    (3,450)
    (18,281) (57,874)

    Interest expense              712      1,016
    Net gain on disposals of
  -          -          -         (27)   
    Other                      (1,595)    (1,628)

                                 (883)      (612)
   UNCONSOLIDATED AFFILIATE        -         108
  -         316    
   ITEMS AND INCOME TAXES      (5,246)    (2,946)

  REORGANIZATION ITEMS          2,322         -  
      2,322         -
                             --------   --------
                              --------   --------

  (LOSS) BEFORE INCOME TAXES   (7,568)    (2,946)
    (19,589) (57,633) PROVISION FOR INCOME TAXES
       -          -          -          -
  NET (LOSS)                 $ (7,568)  $ (2,946)
   $(19,589) $(57,633)

   (PRIMARY)                   $(0.27)    $(0.11)

    (Primary)                  28,024     26,458

CONTACT: Grossman's Inc. Arthur S. Ryan (617) 830-4081

Jayhawk Acceptance Corporation Announces
Filing of Joint Plan of Reorganization

DALLAS, TX - Aug. 20, 1997 - Jayhawk
Acceptance Corporation
(Nasdaq: JACCQ) today stated that as a
result of its previously announced discussions with the Official
Committee of Unsecured Creditors in its Chapter 11 Case, a Joint
Plan of Reorganization proposed by both the Company and the
Committee has been filed. The U. S. Bankruptcy Court for the
Northern District of Texas, at Dallas has approved a disclosure
statement relating to the Joint Plan, and the Company will begin
soliciting votes on the Joint Plan in the next few days. The
Bankruptcy Court has scheduled a hearing to consider confirmation
of the Joint Plan for September 29, 1997. Although discussions
are continuing with its secured lender and other necessary
parties, the Company anticipates it will reach agreement with
such parties to support the Joint Plan.

Except for the historical information contained herein, the
matters discussed in this press release, including the matters
relating to the Joint Plan and any beliefs with respect thereto,
are forward looking statements that are dependent upon a number
of risks and uncertainties that could cause actual results to
differ materially. These risks and uncertainties include the
unpredictability of the results of legal proceedings and
negotiations, and the risk factors identified in the Company's
SEC filings. The Company does not intend to provide updated
information about the matters referred to in these forward
looking statements, other than in the context of management's
discussion and analysis in the Company's quarterly and annual
reports on Form 10-Q and 10-K.

Jayhawk Acceptance Corporation is a specialized financial
services company headquartered in Dallas, Texas.

SOURCE Jayhawk Acceptance Corporation /CONTACT: Virginia L.
Cleveland of Jayhawk Acceptance Corporation, 214-754-1016/

LOT$OFF Corporation Announces Planned
Store Conversions

SAN ANTONIO, TX - Aug. 20, 1997 - San Antonio-based LOT$OFF
Corporation (OTC Bulletin Board: LOTS, LOTSP) announced today
that it was proceeding with its previously announced store
conversion program, from an off-price ("50-OFF") to a
close-out ("LOT$OFF") retailing concept, at 17 store
locations in 13 markets. Next week, such conversions will be
implemented at the Company's store locations in Brownsville,
Harlingen, Pharr, McAllen, Roma and Laredo, Texas with
"Grand Re-Openings" scheduled for Saturday, August 30,
and running through Labor Day Weekend. The balance of the
conversions (in Albuquerque, Baton Rouge, Bossier City, El Paso,
Memphis, New Orleans and Shreveport) are scheduled for the week
of September 28 with "Grand Re- Openings" planned for
Saturday, October 4. Upon completion of these conversions, the
Company will have all 41 of its stores (Texas, Louisiana,
Oklahoma, New Mexico and Tennessee) converted to the Company's
new store name ("LOT$OFF") and retailing concept.

Coincident and consistent with the implementation of this
conversion program has been a change in the mix of products
carried in the Company's converted stores, historically a
majority in family apparel, to a majority in non-apparel
merchandise, principally through the addition of new product
categories to the Company's historical non-apparel offerings
which included cosmetics, housewares and giftware, home
furnishings, shelf-stable food products, toys, luggage, footwear,
stationery and health and beauty aids. New categories include
sporting goods, automotive, greeting cards, jewelry, books, party
goods, seasonal items, pet supplies and hardware, among others.
The Company will continue to maintain a healthy showing of basic,
family apparel products in the LOT$OFF stores. The actual
merchandise mix will fluctuate by category, by season and by
store based on customer needs and buying trends, demographics and
the availability of products at close-out prices. This
merchandising concept is designed to appeal to value- conscious
shoppers and other "bargain hunters," and management is
hopeful its implementation will lead to increased store traffic
and improved operating results.

LOT$OFF Corporation (formerly 50-OFF Stores, Inc.), which had
net sales of $22.3 million during the first half of fiscal 1998
while reorganizing in a Chapter 11 bankruptcy, emerged from
bankruptcy on June 16, 1997 and expects a substantial increase in
sales and a return to profitability in its fiscal second half
ending January 30, 1998.

SOURCE LOT$OFF Corporation /CONTACT: Charles Fuhrmann, CEO, of
LOT$OFF Corporation, 210- 804-4904/

Payless Cashways Receives Court Approval
on Permanent DIP Financing

KANSAS CITY, Mo., Aug. 20, 1997 - href="chap11.paylesscashways.html">Payless Cashways, Inc.
(OTC Bulletin Board: PYLSQ) said today that it has received final
Court approval of the Company's $125 million debtor-in-possession
(DIP) financing agreement.

The DIP agreement calls for a group of financial institutions
led by Canadian Imperial Bank of Commerce to provide $125 million
in post-petition financing to Payless Cashways to be used to
purchase merchandise and fund the Company's ongoing operating
needs during the restructuring process. The Company filed its
Chapter 11 petition and plan of reorganization in the U.S.
Bankruptcy Court for the Western District of Missouri in Kansas
City on July 21, 1997.

"The DIP financing agreement will provide more than
adequate financial resources for our merchandising and other
operating requirements as Payless Cashways moves forward in its
restructuring," said David Stanley, chairman and chief
executive officer.

In other action, the Court also approved the Company's
proposed employee retention plan, developed to ensure that
critical employees remain with the Company during its
restructuring. Consideration of a motion by the Company to
establish the procedure for handling reclamation claims was
continued to September 17, 1997 at the request of the Official
Committee of Unsecured Creditors and with the concurrence of
Payless Cashways.

"We continue to make progress on our restructuring
efforts, and with the continued and increasing support of the
Company's suppliers and the hard work of its employees, we are
optimistic Payless Cashways will emerge from the reorganization
process by the end of this year as a stronger, profitable, more
competitive enterprise," Mr. Stanley stated.

Payless Cashways, Inc. is a full-line building materials
specialty retailer concentrating on remodelers, residential and
commercial contractors, property management and industrial firms,
and do-it-yourselfers. The Company currently operates 194
building materials stores in 22 states located in the Midwestern,
Southwestern, Pacific Coast, Rocky Mountain, and New England
areas. The stores operate under the names of Payless Cashways,
Furrow, Lumberjack, Hugh M. Woods, Somerville Lumber, Knox
Lumber, and Contractor Supply. Payless Cashways currently employs
approximately 17,000 people in its stores, headquarters offices
and distribution centers.

This paragraph is included in this release to comply with the
safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. There are certain important factors that
could cause results to differ materially from those anticipated
by the forward- looking statements made above. Investors are
cautioned that all forward-looking statements involve risk and
uncertainty. Among the factors that could cause different results
are: consumer spending and debt levels, interest rates, housing
activity, lumber prices, product mix, growth of certain market
segments, competitor activities, an excess of retail space
devoted to the sale of building materials, success of the Dual
Path strategy, the need for Bankruptcy Court approvals, the
adequacy of and compliance with the DIP financing, stability of
customer demand and supplier support, and the many uncertainties
involved in operating a business in a Chapter 11 bankruptcy
environment. Additional information concerning those and other
factors is contained in the company's SEC filings, copies of
which are available from the Company without charge or on the
Company's web site,

SOURCE Payless Cashways, Inc. /CONTACT: Sandra Sternberg or
Ann Julsen, 816-234-6183, 310- 788-2850, both of Sitrick And

Tapistron International, Inc. Emerges
from Chapter 11 Bankruptcy

RINGGOLD, Ga.--Aug. 20, 1997--Tapistron International, Inc.
(NASDAQ Bulletin Board: TAPIQ) Tapistron International, Inc.
today announced that the U.S. District Bankruptcy court in
Atlanta confirmed the company's reorganization plan on August 18.
This order clears the way for Tapistron to emerge from Chapter 11

"This is a great day for everyone associated with the
company," declared Darwin Poe, President and Chief Executive
Officer. "We've worked long and hard to put into place a new
financial structure that will allow the company to prosper going
forward. I'm proud of our employees and management team whose
dedication and persistence were principally responsible for this

"We are, in addition, particularly thankful to our many
customers, suppliers, and partners around the world who have
supported us during this challenging period and allowed Tapistron
to complete the restructuring in a relatively short amount of
time. We can now focus on objectives that benefit everyone
associated with the company," Poe stated.

Tapistron plans not only to repay 100% of all its debt with
interest but also expects to continue doing business with many of
its present creditors. Poe mentioned that the full repayment of
debt-which was an essential part of the company's long term
strategy of maintaining goodwill and strong relationships-was
enabled by a substantial recapitalization of the company as well
as increased machine sales.

Poe stated, "The CYP technology throughout this period
has not been questioned; in fact, its reputation has grown due to
machine enhancements and close customer relationships. It should
be noted that during the past twelve months more CYP systems were
sold than in any other fiscal year. Continuing sales to carpet
manufacturers worldwide enabled us to maintain our production
operations, and negotiations with new and current customers are
increasing in frequency and providing us with confidence in
another year of exceptional results."

"Today's events are important for two reasons," Poe
concluded. "First, it will bring renewed energy and focus to
serving our customers, who truly believe in our technology.
Second, it better positions us to make investments in new,
complementary products and services. We still have a lot of
opportunities and challenges ahead, and this was an important
step forward."

Tapistron International., Inc. manufactures the unique and
proprietary CYP (Computerized Yarn Placement) Machine for
producing pattern tufted carpets and rugs. Corporate and
manufacturing offices are located in Ringgold, Georgia.

CONTACT: Tapistron International, Inc. Floyd Koegler, Chief
Financial Officer Roger Ensley, Controller 706-965-9300
706-965-9310 fax