TCR_Public/971017.MBX T R O U B L E D   C O M P A NY   R E P O R T E R

     Friday, October 17, 1997, Vol. 1, No. 41


AMERICAN RECYCLING: Files for Chapter 11 Protection
BARNEY’S: Seeks Extension To Assume or Reject Leases
BRE-X: Judge Lets Shareholders Sue
GROSSMAN’S:  Motion To Limit Notice and Shorten Time
KOENIG: Order Approving Sale of Assets

MARVEL ENTERTAINMENT: Some Secured Lenders Commit to Toy Biz
MONTGOMERY WARD: Banks Present Issues For Appeal
PAYLESS CASHWAYS; Mortgagee Objects To Provision of Plan
RELLEK: Seeks Approval of  Settlement
SUNSHINE REHAB: Creditor Objects to Extension

U.S. ONE: Certain Assets sold to WinStar
WESTERN PACIFIC: Workers to Get Back Pay, Cash from Jet Sale
WESTMORELAND COAL: Agreed  Order To Allocate Expenses

BOND PRICING from DLS Capital Partners


AMERICAN RECYCLING: Files for Chapter 11 Protection
American Recycling Centers of America-California, Inc.,
filed for chapter 11 in the
U.S. Bankruptcy Court, District of Minnesota under Judge
Nancy C. Dreher.  The
company, which provides recycling services in the disposal
of major household
appliances, lists assets of $9.99 million and liabilities of
$5.88 million, according to
the Troubled Company Prospector.

BARNEY’S: Seeks Extension To Assume or Reject Leases
On October 22, 1997 a hearing will be held with respect to
the motion of the debtors seeking to extend their time
to assume or reject certain unexpired leases of
nonresidential real property.

As of the petition date, the debtors were lessees or sub-
lessees under approximately 55 unexpired true or purported
leases of nonresidential real property.  The time granted
the debtor to assume or reject leases has been extended four
times. Now, the debtor seeks to further extend the time to
assume or reject the leases on properties owned by the
Apartment Corporation, Northwestern, JLM and Fifth
Avenue, for 120 days through and including February 20,

The debtor claims that since entering into the Asset
Purchase Agreement with Dickson Concepts
(International Limited, Barney’s and its subsidiaries,
representatives, the Committee and its representatives or
members, may solicit new proposal and alternative
plans.   The ongoing nature of  these activities makes it
imperative for the debtor to maintain flexibility with
respect to business determination concerning the

The debtor also claims that the extent of its liability to
Isetan is important to formulating and confirming any
plan of reorganization and, accordingly, to making
determinations as to assumption or rejection of the

BRE-X: Judge Lets Shareholders Sue
Bre-X shareholders will sue company directors to try to
recover money they allege was pocketed through insider
trading before the company's gold find was exposed as a
hoax, according to an Associated Press report.  
Judge Robert Cairns gave approval to a group of
investors from Alberta and Ontario to move forward on the
legal action even though Bre-X Minerals remains under court-
ordered bankruptcy protection which expires October 31.  
Cairns also ordered that any money remaining in the hands
of Bre-X and related companies Bresea Resources and Bre-X
Minerals be held by the court.

GROSSMAN’S:  Motion To Limit Notice and Shorten Time
On October 21, 1997  a hearing will be held on the debtor’s
motion to approve the stipulation and settlement
dismissing the adversary proceeding against Grossman’s
by Congress Financial Corporation.  Objections to
the matter must be filed by October 20, 1997.  The debtor
claims that the  shortened time periods will not
prejudice any party or the rights of any party.  

This matter arose from a proof of claim against the estate
Grossman’s, Inc., et al. asserting a secured claim in
the amount of $1 million. plus attorneys fees and expenses.  

The parties have compromised the disputed issues and
settled the claim.  Grossman’s shall pay Congress, upon
approval by the bankruptcy court, the sum of $695,000. in
full settlement of the claim.

KOENIG: Order Approving Sale of Assets
The Bankruptcy Court for the Northern District of Ohio -
Eastern Division has entered an order approving the sale of
assets by Koenig Sporting Goods, Inc. to Kinney Corporation.

In addition, certain unexpired leases, sublesases and
certain executory agreements were assumed and assigned to

MARVEL ENTERTAINMENT: Some Secured Lenders Commit to Toy Biz
Toy Biz, Inc., announced that  senior secured lenders of
Marvel Entertainment Group, Inc., representing more than
one-third of the outstanding amount of Marvel's senior
secured debt have agreed to support Toy Biz's plan to
combine with Marvel.  Toy Biz will continue seeking the
consent of the remaining Marvel lenders necessary to
reach the two-thirds threshold the proposal requires by
November 14.

Joseph Ahearn, CEO of Toy Biz, noted, "We are pleased to see
that a growing number of the Marvel lenders believe that
the proposal we have put forward represents an
acceptable basis for resolving the situation at Marvel and
we are confident that once the remaining lenders have an
opportunity to consider the proposal more fully, we will
receive the support of the requisite number of lenders."

MONTGOMERY WARD: Banks Present Issues For Appeal
The Dai-Ichi Kangyo Bank, Ltd., The Fuji Bank, Ltd., The
Long-Term Credit Bank, Ltd., The Sakura Bank, Ltd., and The
Sanwa Bank, Ltd. have stated four issues that the Banks
will present on appeal:

1. Did the Bankruptcy Court err in approving retention and
severance packages for the debtor’ employees when the
debtors presented no evidence that they can reorganize

2.  Did the Bankruptcy Court err in approving retention of
bonuses and severance packages for the debtors’ employees
where the debtors failed to demonstrate that such bonuses
and packages were necessary to ensure the employees’
continued employment with the debtor?

3.  Did the bankruptcy Court err in approving retention
bonuses and severance packages for the debtors’ employees
where the debtors presented no evidence that creditors would
benefit from a reorganization and the Bankruptcy Court
failed to find that creditors would so benefit?

4.  Did the Bankruptcy Court err in approving retention
bonuses and severance packages for employees of the debtors
where such bonuses and severance packages were
predicated in part on the duration of the employees’
employment with the debtors prior to the commencement of
the debtors’ chapter 11 cases?

PAYLESS CASHWAYS; Mortgagee Objects To Provision of Plan
As of the filing date of its petition in Chapter 11,
Payless Cashways, Inc. was indebted to UBS Mortgage
Finance, Inc. in the principal amount of $97,400,000 which
indebtedness was secured by first liens upon and security
interests in a significant amount of the real property
owned by the debtor.

Although UBS does not have any objection to the adequacy of
the Disclosure Statement, UBS claims that it will not be in
a position to vote in favor of the plan until the treatment
of Class 2B claims described in the Term Sheet and
Disclosure Statement is set forth in definitive
documentation which is acceptable to UBS, the debtor
and the debtor’s lenders.

RELLEK: Seeks Approval of Settlement
Rellek, Inc. f/k/a Keller Industries, Inc. seeks court
approval of a Settlement Agreement between the debtor,
US Industries, Inc., Keller Ladders, Inc. and Bank of
America, NTSA.  The objection deadline is October 29, 1997.

The Settlement Agreement provides for the division of
the balance of a certain escrow fund equally between
Rellek and Keller Ladders and the division of certain
deposits being held by third parties.  As of May 30, 1997
the balance in the escrow fund
was $1,854,683.07.  The Settlement Agreement also
provides for KLI to return to Rellek all deposits, refunds
or payments it has or receives which arise out of the
Building Products Division or assets not purchased by KLI.

Also included in the agreement are releases between the
parties of all claims arising out of or related to the Net
Current Asset Adjustment, the Net Current Asset Claim and
the Administrative Expense Claim.  The effectiveness of
the Settlement Agreement is subject to certain conditions

SUNSHINE REHAB: Creditor Objects to Extension
Creditor, Emeritus Corporation objects to the motion for
extension of time within which to assume or reject unexpired
leases filed by debtor, Sunshine Rehab Inc.

According to Emeritus, Sunshine is not operating
within the Emeritus facilities, and Sunshine is
not planning on recommencing business at the Emeritus
facilities.  Prior to filing its bankruptcy case, Sunshine
had an accrued prepetition debt of approximately

While Sunshine claims that it needs to extend the lease
terms until its $10,000,000 Medicare claim is resolved,
the creditor claims that Sunshine can pursue its
litigation even if the leases are rejected.

At least, Emeritus believes that it is entitled to an
administrative claim for the rent that is due for the sixty
days following the filing of  the debtor’s petition.

U.S. ONE: Certain Assets Sold to WinStar
U.S. One Communications Corp. has signed an agreement to
sell to WinStar Communications, Inc., 14 newly
installed Lucent 5ESS-2000 switches and a 10-year prepaid
lease for fiber-optic capacity in the New York City
Metropolitan area.  WinStar switches and other assets.  Of
this amount, $80 million is payable in cash at the time of
closing, which is expected to occur within a week.  An
additional $20 million will be due in approximately 90-120
days, when there should be a confirmation of U.S. One's
bankruptcy plan.  WinStar has the option of making the final
payment in cash or WinStar stock, the value of which will
be set at the time of that payment.

WESTERN PACIFIC: Workers to Get Back Pay, Cash from Jet Sale
Western Pacific Airlines employees will be paid for
their two weeks of work just before the company declared
bankruptcy, judge Sidney Brooks ruled this week.  
WestPac officials say about $747,000 in wages is owed to
1,500 salaried and hourly workers.

According to The Gazette, airline officials said the
decision was critical to WestPac's ability to hang on
to employees during its financial reorganization.

Wage laws dictate that no worker can collect more than
$4,000 in wages earned before the company declared
bankruptcy.  Wages earned after the bankruptcy was
declared will be paid on a regular schedule.

WestPac attorney Christian Onsager said the airline is
trying to raise cash for day-to-day bills by selling the
one jet in its fleet of 19 that it owns.  Then it will
lease the Boeing 737 jet back from the buyer.

The 9-year-old plane is worth roughly $20 million, according
to Scott Hamilton, editor of Commercial Aviation Report.
WestPac's outstanding debt on the plane is about $15
million, Hamilton added, so it might clear about $5 million
from a sale.

A hearing on the possible jet sale as well as passenger
facility charges for DIA is scheduled for October 22.

WESTMORELAND COAL: Agreed Order To Allocate Expenses
The Court has approved the debtors’ motion to allocate
administrative and overhead expenses among the debtors’
respective estates.

The expenses to be allocated include bankruptcy
administration, cash management and investment
management, insurance administration, personnel and
human resources management, financial reporting and
management, shareholder interests, and subsidiary
operations management.

Bond Pricing from DLS Capital Partners
Following are indicated prices for selected bankrupt and
distressed bond issues for the week beginning
October 13,1997. (f) denotes flat.

Alliance Entertainment 11 1/4 '05 15-18 (f)
American Telecasting 0/14 1/2 '04 39-41
Brunos 10 1/2 '05 50-51 45 1/2 (f)
Grand Union 12 '04 45 1/2-46 1/2
Harrah's Jazz 14 1/4 '01 28-30 (f)
Harvard Industries 12 '04 34-37 (f)
Hechinger 9.45 '12 80-81
Hills Department Stores 12 1/2 '03 82-83
Home Holdings 8 5/8 '03 31-33 (f)
Levitz 9 5/8 '03 29-32 (f)
Liggitt 11 1/2 '99 51-53
Mobilemedia 9 3/8 '07 27-28 1/2 (f)
Musicland 9 '03 90-92
Payless Cashways 9 1/8 '03 17-18 (f)
Penn Traffic 9 5/8 '05 66 1/2-68
Speedy Muffler 10 7/8 '06 72-75
Trump Atlantic City 11 1/4 '06 981/2-991/2
Trump Castle 11 3/4 '03 95-97
Wickes 11 5/8 '03 93-94

Losers over the last months have continued their recent
weakness.  Brunos dropped seven points on the week, and
Speedy Muffler and Cityscape bonds moved lower as well.  
Liggett bonds, however, moved up about five points and are
now being quoted with interest.


A listing of meetings, conferences and seminars appears every

Bond pricing, appearing each Friday, is 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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mail forwarding, electronic re-mailing and
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Information contained herein is obtained from
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