TCR_Public/971010.MBX T R O U B L E D   C O M P A N Y   R E P O R T E R

     Friday, October 10, 1997, Vol. 1, No. 35


EDISON BROTHERS: September Sales
KIWI INTERNATIONAL: Not Chicken to Enter Boston Market
LIGGETT: Settlement May Force Company into Bankruptcy
MARVEL ENTERTAINMENT: Banks Balk, Marvel Seeks New Financing

MARVEL ENTERTAINMENT: Toy Biz Wants to Combine Businesses
POCKET COMMUNICATIONS: NatTel Objects to Plan, Wants Own
VTX-ELECTRONICS: Emerges from Bankruptcy
WESTERN FIDELITY: Committee Won’t Approve More Advisors
WESTERN PACIFIC: Immediate Plans Up in the Air

Bond Pricing, DLS Capital Partners


Craig Consumer Electronics, Inc., has requested permission
from Judge Kathleen P. March of the U.S. Bankruptcy Court
for the Central District of California to reject the
employment contracts with its current president, Richard I.
Berger, and with its managing director for Hong King, Bonnie
Metz, who have been on administrative leave during a
government agency’s investigation into certain transactions.

EDISON BROTHERS: September Sales
Edison Brothers Stores, Inc., reported same-store sales of
$71.7 million for September 1997 (the five weeks ended Oct.
4, 1997).  This is a decrease of 5 percent, or $3.8 million,
from same-store sales of $75.5 million in September 1996.

Total sales for September 1997 declined 18.1 percent to
$75.4 million from $92.1 million for the same period last
year.  Total sales figures reflected the fact that Edison
operated an average of 1,635 stores during September 1997,
approximately 14.5 percent fewer than the 1,913 stores open
in September 1996.

"September sales results were well below expectations," said
Alan Miller, the company's chairman and CEO.  "The sales
trend softened beginning in the third week of September and
has continued into October.  We also are operating
approximately 100 fewer stores than projected, a result of
additional closings prior to emergence from Chapter 11.  
These facts lead us to anticipate that fiscal 1997 EBITDA
will be significantly less than the projection set forth in
the June 1997 disclosure statement filed with the U.S.
Bankruptcy Court."

For the 35 weeks ended Oct. 4, 1997, same-store sales were
$573.4 million, a decrease of 1.6 percent from same-store
sales of $582.7 million for the comparable period of 1996.  
Year-to-date 1997 total sales through September decreased
13.4 percent to $613.8 million from sales of $708.4 million
for the same period last year.

KIWI INTERNATIONAL: Not Chicken to Enter Boston Market
Kiwi International Air Lines begins new flights to Florida
and Newark from Boston’s Logan Airport on October 20, 1997,
hoping for a mix of business and leisure travelers to make
its presence in Boston a worthwhile gamble, according to the
Boston Herald.

Five years after it was started by former Eastern and Pan
American employees, Kiwi is fighting to emerge from Chapter
11, with Jerry Murphy at the helm as CEO and Baltimore
surgeon Charles Edwards holding an 80 percent stake.

A few flights a day from Boston will hopefully appeal to
both the cost-conscious corporate set and Florida
vacationers with service, fares, and gimmicks like 10-flight
coupon books. "We will never claim to be a major airline,"
Murphy said. "We're a niche carrier. We can serve the
business community. But no way will we be able to get above
four or five trips a day."

If Kiwi can fill the seats on these few flights, and keep
the loyalty of customers and travel agents, to whom Murphy
has pledged he will not cut commissions, the venture may
bring profits.

LIGGETT: Settlement May Force Company into Bankruptcy
Liggett Group is pleading for political help to stay in
business after breaking ranks with the rest of the U.S.
tobacco industry and admitting cigarettes cause cancer and
are addictive, according to Associated Press.

Liggett Group chairman Ronald Fulford has asked North
Carolina governor Jim Hunt to help the company avoid the
more than $200 million a year for 25 years it could owe
under a proposed $368 billion tobacco settlement with nearly
40 states.

A letter from Fulford to Hunt raises the prospect
that more than 2,000 retirees would lose health or life
insurance benefits if Liggett were forced to comply with the
punishing terms negotiated by its bigger rivals.

"Liggett cannot make the payment called for in the
settlement," Fulford said. "Therefore, if Liggett is
included, Liggett goes out of business and the settlement
pool of dollars is no larger. However, if Liggett is
excluded, the settlement pool is not affected but jobs and
benefits of a large number of active and retired employees
of Liggett and their dependents are preserved."

Liggett's earlier, separate deal with 22 states included an
agreement to pay 25 percent of its pretax profits for 25
years. The company said the modest payments were all the
fifth-largest cigarette maker could afford without going

Liggett's share of the U.S. cigarette market is less than 2
percent and it registers sales of less than $400 million a
year.  The company has about 340 employees at its Durham,
North Carolina, headquarters, down from more than 1,700 in
the early 1990s.  In March, Liggett's outside auditors
warned that the company risked insolvency as early as the
beginning of 1998 unless it was able to refinance its debts.  
Since then, LeBow and his debtors have failed to agree on a
refinancing plan.

MARVEL ENTERTAINMENT: Banks Balk, Marvel Seeks New Financing
Marvel Entertainment Group Inc., said its plan to emerge
from bankruptcy by selling $385 million in bank debt has
“unraveled” because The Chase Manhattan Bank, as agent, was
unable to get the requisite support for the deal from two-
third’s of the bank lenders, although 50 percent agreed.

The agreement-in-principle finalized on September 29 would
have allowed High River Limited Partnership and Westgate
International L.P to purchase all pre- and postpetition bank
claims for $385 million in cash and the transfer of Marvel's
Panini S.p.A. business. High River and Westgate had already
funded an escrow account in the amount of $385 million,
which will now be returned.

Marvel said that it will seek new financing from High River
and Westgate over the objections of the banks, and it will
fight the banks' efforts to appoint a Chapter 11 trustee.
The bank lenders have opposed any new borrowings by Marvel
that could be repaid ahead of their existing loans.  

However, Marvel said without new financing, it may be forced
into a piecemeal liquidation, so it will continue to
litigate in an effort to save the company. Marvel said its
cash position is at a dangerously low level due, in no small
part, to the demands and actions of the banks.  The company
added that it is concerned about the loss of vendor,
supplier, and employee support

The next hearing has been scheduled for October 24, 1997.  

MARVEL ENTERTAINMENT: Toy Biz Wants to Combine Businesses
Toy Biz, Inc., says it has proposed a plan for the
combination of its business with Marvel Entertainment Group,
Inc.  The plan put forward by Toy Biz would result in the
merger of Toy Biz and Marvel (except for the Panini
subsidiary), and Marvel’s senior secured lenders would
receive about $230 million in cash and securities equal to a
40 percent stake in the new company, together with the
proceeds from the sale of Panini.

Under the proposal, unsecured creditors and equity holders
of Marvel would receive warrants and subscription rights,
respectively, in the combined company.  Common stockholders
of Toy Biz would receive one share of common stock in the
combined company for each share of Toy Biz common stock.  
The cash payments to be made to the Marvel senior secured
lenders would be funded by issuing preferred stock and
senior notes for the combined company.

Toy Biz’s proposal is subject to acceptance by at least two-
thirds of the holders of Marvel senior secured debt and to
bankruptcy court approval.  Toy Biz says it anticipates
receiving stockholder approval of the proposal and will seek
all regulatory approvals expeditiously.

Joseph Ahearn, Toy Biz CEO, stated, "We believe that this
proposal represents an opportunity for both Toy Biz
stockholders as well as Marvel creditors and stockholders to
participate in a meaningful way in a combined Marvel/Toy Biz
on terms that we believe should be acceptable to all parties

According to a Marvel spokesperson, the company has not yet
received any proposal nor has it had any discussions with
Toy Biz about a proposal.  Marvel said it is highly
skeptical of the proposal, given Toy Biz's track record of
abandoning three prior agreements-in-principle on this
matter.  In any event, Marvel believes that the Toy Biz
board of directors is improperly constituted and therefore
does not have the authority to make any proposals or enter
into any agreements at this time.  

POCKET COMMUNICATIONS: NatTel Objects to Plan, Wants Own
Pocket Communications’ bankruptcy plan, filed September 29
in Baltimore, lacks adequate financial information and fails
to identify potential investors or outline remedies to
recoup $143 million paid to the FCC for C-block PCS
licenses, says National Telecom, according to Communications
Daily (Warren Publishing, Inc.).

NatTel CEO Jack Robinson said the bankruptcy court must
reject the plan, since Pocket executives failed to show how
it would be carried out. Pocket lawyers defended their plan,
but NatTel sought approval to submit its own reorganization
plan to take over Pocket and its PCS licenses,
$1.3 billion in debt to the FCC, and other expenses with the
help of outside businesses. Robinson cited a $25-million
pledge from White River Partners as evidence the alternative
offer was more viable.

However, White River president Bruce Berger said in a letter
to NatTel that it had "preliminary interest" in making
investment, but that "in no way should be considered a
commitment to provide financing."

The NatTel offer is contingent on FCC acceptance of a three-
year delay in resuming debt payment, an arrangement that
differs from the FCC’s current plan for C-block licensees.
NatTel said it would retain the right to elect different
treatment of the debt if the FCC offered. The FCC must also
waive "all necessary and applicable FCC laws" to allow
NatTel to sell Pocket when the deal is confirmed by the
court. In another court filing, NatTel said it would pay
back $4.8 million in financing arranged after the bankruptcy
filing and it would honor administrative expenses filed
after April 1, 1997.

The Pocket reorganization plan showed it would opt for two
of four options selected by the FCC: (1) a full-pay buyback
plan on the licenses, using up to 70 percent of the down
payment to cover a market price established at auction, and
(2) disaggregation, returning 15 MHz in "any or all" of
licenses won at auction in return for a 50 percent cut in
debt to be repaid in six equal installments beginning next

Pocket also told the court, "Notwithstanding anything to the
contrary provided herein, DCR PCS may elect to settle the
claims of the FCC in return for a single cash payment to
occur immediately following a re-auction of the licenses"
under bankruptcy rules.

VTX-ELECTRONICS: Emerges from Bankruptcy
VTX Electronics Corp., which filed a petition for
reorganization under Chapter 11 of the Bankruptcy Code on
January 10, 1997, announced that the United States
Bankruptcy Court for the Eastern District of New York
approved its disclosure statement on September 29, 1997.  
The court has set a confirmation date of October 28, 1997.

The proposed plan includes a one-for-five exchange of common
stock, based on the disclosure statement approval date.

Howard Griffith, VTX’s newly elected president, said "I am
pleased with the completion of Chapter 11 proceedings, and
now the company's staff can concentrate on what they do
best; engineer, design, and manufacture quality cable
assemblies for voice, video, and data communication

WESTERN FIDELITY: Committee Won’t Approve More Advisors
Western Fidelity Funding, Inc.’s Unsecured Creditors
Committee objects to the company’s applications to hire
Smith McCullough as special counsel and Price Waterhouse as
financial advisor. The committee says Western Fidelity has
filed five applications to employ professionals and already
has in-house counsel. The services of these two firms would
duplicate services already being provided by others, and
hiring the firms is an unnecessary expense. The committee
says at this time, the company is not engaged in the
production of any new business and while it is collecting
the proceeds from prior business, it is not creating any new
assets. The assets available for distribution are eroding at
a rate of approximately $200,000 per month, before
administrative expenses.

WESTERN PACIFIC: Immediate Plans Up in the Air
Western Pacific Airlines filed for bankruptcy protection
last week, but is continuing its flights for now. Creditors
are scheduled to meet today in U.S. Bankruptcy Court in
Denver before Judge Sidney Brooks to elect a committee to
represent their interests.

Judge Brooks has also scheduled a hearing today to cover DIP
financing and the $500,000 Denver International Airport says
it is owed by WestPac.

According to the Denver Gazette, analysts say WestPac needs
at least $10 million in financing in the near term, then up
to $50 million to pull the airline out of bankruptcy.  
WestPac won't talk about its DIP plans, but analysts believe
much of the airline's assets are tied up as collateral or
pledged to creditors.

WestPac president Robert Peiser said the airline is in an
undeniable cash crunch but that it filed for Chapter 11 to
protect its existing cash resources instead of waiting until
it runs out of cash and it becomes impossible to reorganize.

Last week, four of the company's seven board members
resigned from their posts. Irwin Jr., Jim Wilkert, Glenn
Stinchcomb, and Clay Bennett represented the Gaylord family
of Oklahoma and Hunt Petroleum, of Texas, two of WestPac's
largest shareholders.

The Dallas Morning News reports they resigned "to avoid
potential conflicts of interests" between Western Pacific
and their business interests, GFI Co. and Hunt Petroleum
Co., which had guaranteed a $10 million loan to WestPac from
Bank One Texas.

The families opposed WestPac's request to withdraw $2.8
million from the airline's receivables account, fearing this
would jeopardize the account, which was used by WestPac as
collateral to back the $10 million loan.

On Tuesday, Judge Brooks cleared he way for WestPac to get
the $2.8 million after the airline proved its receivables
exceeded $8 million, the minimum amount required in the
account to protect the Gaylord and Hunt loan.

Elise Eberwein, a WestPac spokeswoman, declined to say how
the $2.8 million will be used or how long it will enable the
airline to continue flying.

WestPac’s largest unsecured creditors are BF Goodrich
Aerospace, owed $8 million; Denver International Airport,
owed about $4 million; and Mercury Air Group,, owed $2

WestPac reported a net loss of about $17 million in the
second quarter this year, just before it moved the bulk of
its operation from Colorado Springs to Denver International.

The airline owes money to about $130,000 to the Colorado
Springs Airport and millions to Denver. Since June 29, when
WestPac moved most of its flights to DIA, it has failed to
pay more than $5 million in terminal and landing fees, said
airport spokesman Chuck Cannon. WestPac puts the figure at
$4 million.

City officials Colorado Springs and Denver say they’ll meet
this week to determine what to do to get paid in the future.

Bond Pricing, DLS Capital Partners
Following are prices for selected bankrupt and distressed
bond issues for the week beginning October 6, 1997.

Alliance Entertainment 11 1/4 '05 15 - 18 (f)
American Telecasting 0/14 1/2 '04 36 - 38
Brunos 10 1/2 '05 55 - 57
CAI Wireless 12 1/4 '02 34 - 35 1/2
Flagstar 11 1/4 '04 46 - 47 (f)
Grand Union 12 '04 47 - 48
Harrah's Jazz 14 1/4 '01 29 - 31 (f)
Harvard Industries 12 '04 37 - 39 (f)
Hechinger 9.45 '12 80 - 81 1/2
Hills Department Stores 12 1/2 '03 82 - 83
Home Holdings 8 5/8 '03 33 - 35 (f)
Levitz 9 5/8 '03 29 - 32 (f)
Liggitt 11 1/2 '99 44 - 47 (f)
Mobilemedia 9 3/8 '07 27 - 28 1/2 (f)
Musicland 9 '03 89 - 90 1/2
Payless Cashways 9 1/8 '03 17 - 18 (f)
Penn Traffic 9 5/8 '05 65 - 66 1/2
Speedy Muffler 10 7/8 '06 75 1/2 - 78
Trump Atlantic City 11 1/4 '06 97 - 97 1/2
Trump Castle 11 3/4 '03 93 - 94
Wickes 11 5/8 '03 93 - 94

The telecom sector eased a this week as the big runup the
last few weeks induced some profit taking.  Speedy Muffler
continued to get hammered following poor quarterly resorts,
and Levitz backed off and short-overing ebbed.


Meetings, conferences and seminars appear every Tuesday.  

Bond pricing supplied by DLS Capital Partners, Dallas, Texas.  

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 Creditors' Service,
Inc., Princeton, NJ, and Beard Group, Inc.,
Washington DC.  Debra Brennan and
Rebecca A. Porter, Editors.

Copyright 1997.  All rights reserved.  This
material is copyrighted and any commercial use,
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Information contained herein is obtained from
sources believed to be reliable, but is not

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