TCR_Public/970910.MBX       T R O U B L E D   C O M P A N Y   R E P O R T E R

               September 10, 1997, Vol. 1, No. 13

                        In This Issue

ARROW TRANSPORTATION: To Sell Assets to Matlack
CINCINNATI MICROWAVE: Committee Objects to Extension
COLOR TILE: Franchisee Committee Objects to Settlement
COUNTY SEAT: Seeks Rejection of Real Property Leases
EATON’S: $302 Million Restructuring Plan

EDISON BROTHERS: Rejection/Assumption of Leases
FARM FRESH: Assets to be Acquired By Richfood Holdings
FLAGSTAR:Seeks Order Allowing and Classifying Claim
GREAT AMERICAN RECREATION: Objection To Consolidation
GROSSMAN’S: Needs Real Estate Consultant

HAMBURGER HAMLET: Notice of Order Confirming Plan
MAIDENFORM: Wants to Retain Claims Agent
MONTGOMERY WARD: Motion to Compel
NETS, INC.: Wants Extension of Filing Date for Plan
OLD AMERICA: Needs to Hire Special Employment Counsel

OLD AMERICA STORES: Meeting of Creditor
PAYLESS CASHWAYS: Hearing On Disclosure Statement
REXON: Stipulation to Resolve Claims
SILAS CREEK: Date Proposed for Filing Proofs of Claim
STREAMLOGIC: Wants to Sell Patents for Product Line

VAN CAMP:  Creditors Suggest Conversion to Chapter 7

                              ---------


ARROW TRANSPORTATION: To Sell Assets to Matlack
-----------------------------------------------
Arrow Transportation Co. of Delaware has agreed to sell substantially all
of its assets to Matlack, Inc. for approximately $5.47 million. The
transfer of assets included a sale of personal property free and clear
such as trailers, leasehold improvements, and its customer lists;
rejection of some real and personal property leases and executory
contracts to be assumed by Matlack, and rejection of certain collective
bargaining agreements.

On closing the sale, Arrow intends to file a plan of reorganization to
liquidate and distribute its remaining assets, including proceeds from the
sale, to its creditors.

A condition of the sale -- to counter the possibility of a strike -- is
that collective bargaining agreement with the Teamsters be rejected. If
two other collective bargaining agreements with Teamsters Local No. 848
and the International Association of Machinists & Aerospace Workers are
not rejected, the sale price will be reduced by $25,000.

A hearing is set for September 25, 1997, in Portland, Oregon.


CINCINNATI MICROWAVE: Committee Objects to Extension
----------------------------------------------------
The Official Committee of Unsecured Creditors of Cinicinnati Microwave,
Inc.is objecting to the debtor’s second motion to extend the exclusive
periods to file a disclosure statement and plan of liquidation and solicit
acceptances thereof.  The motion, if granted would extend those deadlines
to December 15, 1997 and February 13, 1998 respectively.  

The Committee objects to the extension stating that such an extension is
contrary to an agreement with the debtor to seek the Committee’s approval
for such an extension absent “extraordinary circumstances.” Further, the
Committee states that the liquidation of the debtor’s estate is
substantially complete and there is no operational or other reason why the
plan and disclosure statement cannot be filed on time.


COLOR TILE: Franchisee Committee Objects to Settlement
------------------------------------------------------
Color Tile, Inc'’s Official Committee of Franchisees objects to the
company’s plan for a global settlement. The settlement plan involving the
debtors, bank groups, DIP lenders, and the creditors’ committee that would
transfer substantially all Color Tile’s remaining assets to a newly formed
Delaware subsidiary, is too complex.

It says the settlement is nothing more than a reorganization plan that is
being pushed through without the protections of a disclosure statement.
“The attempt to disguise what is a liquidating plan as a settlement” is
troublesome, it says, because the settlement includes transfers of assets,
the creation of new entities, the creation of a trust and the appointment
of trustees, the transfer of liens and priorities, the appointment of a
new successor CEO for the debtor, and numerous other provisions.

The Committee says it supports similar objections filed by the Brownsville
Independent School District and 16 Other Texas Taxing Units and believes
more disclosure or confirmation of a plan of reorganization accompanied by
a disclosure statement is needed before moving forward with the
settlement.


COUNTY SEAT: Seeks Rejection of Real Property Leases
----------------------------------------------------
County Seat, Inc. has moved the court to reject 10 nonresidential real
property leases with an annual rental obligation of over $1.6 million
because the properties fail to provide any tangible benefit to the
debtors, their estates, creditors, or interest holders.


EATON’S: $302 Million Restructuring Plan
----------------------------------------
Landlords and bankers approved a $302 million restructuring plan to save
Eaton’s, one of Canada’s major department store chains, from bankruptcy.
Under Eaton’s plan, the company has promised all creditors - from bankers
and landlords to clothing and toy manufacturers repayment in full through
up-front cash payments and interest-bearing notes due next year.

Opposition by a majority of the debt holders in any one class of creditors
could be enough to push the 127-year-old department store chain into
bankruptcy. The landlords had been demanding more concessions since they
believed it would be tough to fill empty Eaton’s stores and keep other
tenants. Eaton’s has been operating under bankruptcy court protection
since February, when the family-owned company stunned Canada by revealing
it was deep in debt after years of sagging sales.

The court-ordered protection period - which gave Eaton’s a grace period
for paying overdue bills - expires Friday. In the meantime, Eaton’s is in
the process of closing 16 of its 85 stores.Cash to pay the bills has been
raised by selling real estate and splitting pension surpluses with
employees. More may come from selling shares in Eaton’s credit card
business.


EDISON BROTHERS: Rejection/Assumption of Leases
-----------------------------------------------
Edison Brothers Stores, Inc., would like to reject three of its leases in
shopping centers and malls because it no longer uses or needs the premises
and the stores do not warrant continued operation under the restructuring
of its business operation. It requests landlords who submit claims for
damages file them in liquidated amounts to expedite the initial
distributions to general unsecured creditors.

Edison further wants to assume 10 unexpired leases of real property and 15
modified leases because they are integral to its businesses. No hearings
are scheduled.


FARM FRESH: Assets to be Acquired By Richfood Holdings
------------------------------------------------------
Richfood Holdings, Inc., the leading wholesale food distributor in the
Mid-Atlantic region, today announced that it has reached an agreement in
principle to acquire substantially all of the assets of Farm Fresh, Inc.,
a privately-held supermarket chain based in Norfolk, Virginia.  The
proposed acquisition has been approved by an informal committee comprised
of holders of a substantial majority of Farm Fresh’s senior notes. Under
the terms of the agreement in principle, Richfood will not assume Farm
Fresh’s senior notes or other indebtedness for money borrowed, or its
lease obligations for previously-closed stores or six currently-operated
stores that will be closed in connection with the proposed sale.  

The anticipated purchase price is expected to consist of approximately
$220 million cash, plus the value of certain assumed capital leases, plus
1.5 million warrants for the purchase of shares of Richfood common stock
at an exercise price of $25 per share with a term of five years following
issuance.  Upon completion of the acquisition, Farm Fresh will operate as
a separate, wholly-owned subsidiary of Richfood.  Farm Fresh’s
headquarters will remain in Norfolk.  

The combined Company is expected to have annualized net sales of
approximately $3.8 billion, based on the most recent fiscal year results
for Richfood and Farm Fresh.  Including Richfood’s existing METRO/BASICS
retail stores, the combined Company will operate 59 supermarkets in the
Mid-Atlantic market with annualized retail net sales of approximately $1
billion. John E. Stokely, Richfood’s President and Chief Executive
Officer, said, “The combination of Richfood and Farm Fresh will unite the
premier wholesale food distributor in the Mid-Atlantic egion with the
premier retail grocer in the Tidewater region.  

Farm Fresh is a strong franchise with excellent store locations and a
solid marketplace reputation built over the past 40 years.” The
transaction is expected to be effected through a prepackaged voluntary
reorganization of Farm Fresh under Chapter 11 of the U.S. Bankruptcy Code
or other consensual proceeding.  Completion of the transaction is subject
to execution of a definitive agreement and approval of the reorganization
plan by the Bankruptcy Court and the holders of Farm Fresh’s senior notes,
as well as required regulatory approvals and other customary closing
conditions. Subject to these terms and conditions, the transaction is
expected to close in early 1998.

For its fiscal year ended December 28, 1996, Farm Fresh posted net sales
of $761.5 million, generating operating cash flow of $39.7 million.  Farm
Fresh operates 48 food stores in the Tidewater, Richmond and the
Shenandoah Valley areas of Virginia.


FLAGSTAR: Seeks Order Allowing and Classifying Claim
----------------------------------------------------
Flagstar Companies, Inc., Flagstar Corporation and Flagstar Holdings, Inc,
as debtors seek an order approving the stipulation between Flagstar and
FINOVA Capital Corporation allowing and classifying FINOVA’s claim.

Prior to filing for bankruptcy protection, Flagstar executed certain
guaranties in favor of FINOVA. Those guaranties were the basis upon which
FINOVA agreed to enter in the FINANCE Program Agreements with Denny’s Inc.
and El Pollo Loco, Inc.  The debtor believes that the continued support of
Denny’s, and El Pollo Loco by FINOVA is important to the continuing
business operations of these non-debtor operating subsidiaries.

The stipulation provides that FINOVA will have an allowed unsecured claim
on account of the Flagstar guaranties and FIVOVA’s claim will be classified
in Class 7A of the pre-packaged plan of the debtor.


GREAT AMERICAN RECREATION: Objection To Consolidation       
-----------------------------------------------------
The creditors, Robert Morgenroth and Parkway Power Corp. object to the
debtor’s Motion for Substantive Consolidation.  The creditors recently
entered into a stipulation with three of the debtors filing Robert
Morgenroth’s claim for approximately $524,000 and Parkway Power Corp.’s
claim in the approximate amount of $1.4 million. Problematic for the
creditors is whether the liability will be a joint and not a several
obligation, in which event the creditors would receive only one third of
their anticipated claim amount.

The creditors also object to the confirmation of the First Amended Plan in
that they claim there is no evidence of the projected capital structure of
the new company, and they state that the plan is not feasible.


GROSSMAN’S: Seeks Real Estate Consultant
----------------------------------------
Grossman’s, Inc. wants to hire Kane Corporation to assist with the sale of
vacant and unused real estate for the highest and best price available on
an expedited basis.

A hearing is set for September 18, 1997, before Judge Peter J. Walsh in
Wilmington, Delaware.


HAMBURGER HAMLET: Notice of Order Confirming Plan           
--------------------------------------------------
By notice dated September 4, 1997, the US Bankruptcy Court for the Central
District of Califonia announced the entry of an order confirming a plan of
reorganization in the Chapter 11 case of Hamburger Hamlet Restaurants.


MAIDENFORM: Wants to Retain Claims Agent
----------------------------------------
Maidenform Worldwide, Inc., wants to hire Poorman-Douglas Corp. as official
claims agent in its Chapter 11 cases to notify potential claimants and
process proofs of claims. A hearing on the matter is set for September 12,
1997, before Judge Cornelius Blackshear, in New York, New York.


MONTGOMERY WARD: Motion For Assumption or Rejection of Lease
------------------------------------------------------------
Interstate Consolidated Industries is seeking an order compelling the
debtor to assume or reject the lease of an automotive facility, blocking
the entire development of a middle school complex in Santa Ana California
to which $25,000,000 has been committed on a project currently in progress.
The movant claims that if this project is delayed even for thirty to sixty
days, the consequential damages alone could run into millions of dollars.  
A hearing on the motion will be held on October 1, 1997 at 2:00 PM before
the Honorable Peter J. Walsh United States Bankruptcy Court for the
District of Delaware, Marine Midland Plaza, 824 North Market Street, 6th
Floor, Wilmington, Delaware, 19801.  

Responses or objections to the motion, if any, must be in writing and filed
with the Court and served so that they are received by counsel, Duane,
Morris & Heckscher LLP, Teresa K.D. Currier, Esq. 1201 Market Street, Suite
1500, Wilmington, Delaware,1500 and Marc J. Winthrop, Esq. Winthrop Couchot
Professional Corp., 3 Civic Plaza, Suite 280, Newport Beach, California
92660, no later than September 26, 1997 at 4:00PM.


NETS, INC.: Wants Extension of Filing Date for Plan
--------------------------------------------------------
Nets, Inc., wants to extend for cause the exclusivity period for filing
its plan of reorganization. Although it sold substantially all its assets
in June 1997 to PSC Technology, Phoenix, Inc., it kept its corporate
existence, certain good will and tax attributes, and continues to employ
certain employees, all with an eye toward finalizing a plan of
reorganization.

The company is talking with the Official Committee of Unsecured Creditors
and other creditors about a plan and have a preliminary agreement; it is
also negotiating with the holder of a large disputed claim and expects an
agreement soon. With this in mind, the company would like through and
including October 6, 1997, to file its reorganization plan.


OLD AMERICA: Needs to Hire Special Employment Counsel
-----------------------------------------------------
Old America Stores, Inc. would like to retain Kilpatrick Stockton, LLP as
special employment counsel to offer advice with respect to the employment
discrimination cases currently pending against the company and in any
other cases that may arise during bankruptcy proceedings.


OLD AMERICA STORES: Meeting of Creditors
----------------------------------------
Old America Stores, Inc., Old America Wholesale, Inc., and Old America
Store, Inc. filed voluntary petitions for relief under Chapter 11 of the
Bankruptcy Code on August 11, 1997 in the United States Bankruptcy Court
for the District of Delaware.  A meeting of creditors pursuant to section
341 of the Bankruptcy Code has been scheduled for September 26, 1997 at
2:00PM at the J. Caleb Boggs Federal Building, 844 King Street, Room 2313
Wilmington, Delaware 19801.


PAYLESS CASHWAYS: Hearing on Disclosure Statement
-------------------------------------------------
On October 9, 1997 at 9:00 AM before the Honorable Arthur B. Federman, in
Courtroom 945, United States Courthouse, 811 Grand Boulevard, Kansas City,
Missouri a hearing will be held to determine the adequacy of the
Disclosure Statement in Support of the Plan of Reorganization filed by
Payless Cashways, Inc.

Any objection to the adequacy of the Disclosure Statement must be filed
with the US Bankruptcy Court and served on counsel for the debtor, Kathryn
B. Bussing , Blackwell Sanders Matheny Weary & Lombardi LLP Two Pershing
Square, Suite 1100, 2300 Main Street, PO Box 419030, Kansas City, Missouri
Telephone: (816) 234-6000 Fax: (816) 234-6077


REXON: Stipulation to Resolve Claims
------------------------------------
Tom H. Connolly, Plan Agent of the Liquidating Estate of Rexon, Inc.,
entered into a stipulation with claimants, SCI Systems, Inc. and Adelantos
de Technologia. Rexon Incorporated and Rexon/Tecmar, Inc. scheduled claims
in the total amount of approximately $1.4 million.  Claimants filed claims
in the approximate aggregate amount of $2.9 million.  Pursuant to the
stipulation, claimants will have an allowed claim in the aggregate amount
of $1.4 million Opposition to the stipulation must be in writing to the
Plan Agent, Tom H. Connolly 1121 Broadway, Suite 202, Boulder, Colorado
80302 (303)440-7676 Fax: (303) 440-7781 on or before September 19, 1997.


SILAS CREEK: Date Proposed for Filing Proofs of Claim
-----------------------------------------------------
Silas Creek Retail Inc., has proposed November 12, 1997, as the last day
all creditors can file prepetition proofs of claims.


STREAMLOGIC: Wants to Sell Patents for Product Line
---------------------------------------------------
Streamlogic Corp. would like to sell patents, patent applications, and
related intellectual property rights for its Raidion line of data storage
products and sell to Farrington Ltd. of the Cayman Islands for $1.02
million.

It says the sale is proper exercise of its business judgment and in the
best interests of the estate as the Raidion division has not been
profitable. Selling the patents will realize much-needed funds as proceeds
and maximize recoveries by creditors. A quick sale, says Streamlogic, is
necessary to preserve the value of the technology that might diminish with
time.

A hearing is set for September 26, 1997, before Judge Dennis Montall in San
Francisco, California,


VAN CAMP: Creditors Suggest Conversion to Chapter 7
---------------------------------------------------
Van Camp Seafood Co., Inc., has been asked by Protein Technologies
International, Inc., an unsecured creditor in the Van Camp Chapter 11
proceedings, to convert the case to Chapter 7 because it will best serve
the interests of the unsecured creditors by minimizing administrative
expenses.

Protein says all the debtor’s assets have been reduced to cash and because
there is no business to organize, a plan is not necessary and would be
wasteful. It continues, “If the case remains as a Chapter 11 there may be
several large, expensive law firms and accounting firms employed by the
estate to assist in distributing a pot of cash. Such a squandering of
resources is unthinkable when a single Chapter 7 trustee could wrap-up the
case without the expense of multiple professionals and the expenses
associated with a chapter 11 plan and disclosure statement.”

The hearing will be September 29, 1997, in the Southern District of
California.


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published by Bankruptcy
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