TCR_Public/971020.MBX T R O U B L E D   C O M P A N Y   R E P O R T E R

     Monday, October 20, 1997, Vol. 1, No. 42


BEST PRODUCTS: Seeks Approval of Settlement
BIG RIVERS: PacifiCorp Seeks Sur-Reply and Oral Argument
ELDER BEERMAN: Files Amended Disclosure Statement
FRETTER: Seeks Order Establishing Supplemental Bar Date
KENWIN SHOPS: Files for Chapter 11

MIDCON OFFSHORE: LDNG Objects To Use of Proceeds
MONTGOMERY WARD: Seeks Assumption of Contracts
NETS: Manzi’s Response to Committee’s Objection
POCKET: Debtor Opposes NatTel’s Right To File Plan
RDM SPORTS: Lenders Want Protection

SMITH TECHNOLOGY: To Sell Some Remaining Assets
WESTERN PACIFIC: MAX averts a shutdown


BEST PRODUCTS: Seeks Approval of Settlement
Best Products Co., Inc. is seeking a court order approving a
settlement and release agreement between Best and Hartford
Specialty Company on behalf of itself and certain insurance

The Hartford Companies issued insurance policies to Best
covering workers compensation, general liability, auto
liability, products liability and employee benefits

Under the agreements, Best provided Hartford with letters of
credit presently in the amount of $16,479,505 to secure its
obligations under the program agreements.  The issuers of
the letters of credit are secured by property of Best’s
estate which Best wishes to distribute to creditors.  

Under the Settlement Agreement, Best and the Hartford
Companies seek to resolve their obligations so that Hartford
can release the letters of credit and Best can obtain the
release of the security interests of the banks which have
issued the letters of credit.

The parties agree that no Best I Claims can be brought
against the Hartford Companies and that no Best II Claims
(as defined in the Settlement Agreement) can be brought
against the Hartford Companies except to the extent that
such claims would exceed $500,000.

BIG RIVERS: PacifiCorp Objects to Sur-Replies
PacifiCorp Kentucky Energy Company and PacifiCorp Power
Marketing, Inc. are opposing Big Rivers’ and LG&E’s requests
for a sur-reply in the appeal action commenced by

According to PacifiCorp all of the parties support a request
for an oral argument and the sur-reply briefs are nothing
more than an improper procedural tactic by the Appellees to
get in the last word and delay the appeals process.

Alternatively, PacifiCorp argues that if the Court finds
that the sur-replies are warranted, PacifiCorp claims that
the appeal is not moot, that PacifiCorp has standing to
appeal, and that sections 1129(a)1) and ll29(a)3) provide a
basis to challenge the confirmation of the plan.
Further, PacifiCorp argues that the plan deprived holders of
Class 8 Claims the right to vote their claims, because they
were incorrectly treated as unimpaired in the plan.
PacifiCorp argues that the third party releases and other
injunction provision in the plan violate the bankruptcy
code, the court improperly granted protection to the Phase I
transactions, and the plan improperly permits post
confirmation modification without proper compliance with the
bankruptcy code.  

ELDER BEERMAN: Files Amended Disclosure Statement
The Elder-Beerman Stores Corp. announced today that it has
filed an amended plan of reorganization and disclosure
statement with the U.S. Bankruptcy Court for the Southern
District of Ohio.

In developing the amended plan and disclosure statement, the
company said its financial advisor, Bear Stearns & Co.,
prepared an updated valuation of the equity of the company.  
The midpoint of the range of that valuation allows Elder-
Beerman to return to general unsecured creditors a recovery
of 106% on allowed claims, or $1.06 for every $1 of
principal amount of allowed claims.

"It is highly unusual for creditors to receive even a full
recovery, much less 106%," said Richard M. Cieri, a
bankruptcy attorney from Jones, Day, Reavis & Pogue and
counsel to Elder-Beerman.  "This company has experienced a
remarkable turnaround."

The bankruptcy court has set a hearing date of November 10,
1997 to review the amended disclosure statement.  A
confirmation hearing on the plan is scheduled for December

"We are pleased with the amended plan. It provides for a
fair recovery for all stakeholders," said Frederick J.
Mershad, president and chief executive officer of Elder-
Beerman.  "We look forward to obtaining approval for our
reorganization plan and emerging from Chapter 11 in December
as an independent company."

The Elder-Beerman Stores Corp. is a leading regional
department store company headquartered in Dayton, Ohio.  
Annual sales in fiscal 1996 were $569.6 million.

FRETTER: Seeks Order Establishing Supplemental Bar Date
Fretter, Inc. and its affiliated debtors and debtors in
possession are seeking a court order establishing January
2,1998 as the date by which proofs of claim must be filed by
certain supplemental creditors, and approving the form of
notice of the supplemental bar date.

The debtor states that the logistics of this Chapter 11 case
are complex, making it difficult to reach all potential
creditors.  Some creditors including retirees of Cyclops
Corporation (a former affiliate of the Silo Entities) who
purchased Cobra coverage under the debtors’ medical plans
and who may have incurred covered medical claims prior to
termination of the debtors’ medical plan, were not notified
of the original bar date for claimants.

KENWIN SHOPS: Files for Chapter 11
Kenwin Shops, which operates women's apparel stores, filed
for Chapter 11 bankruptcy protection Wednesday. The Smyrna-
based company said in its filing that "a steep decline in
sales," the lack of timely delivery of merchandise caused by
uncertainty of payment and various lawsuits all contributed
to its filing.

The filing in federal bankruptcy court in New York lists
$1.3 million in total assets and $3.2 million in total
liabilities.  Kenwin said it plans to continue operations
and intends to propose a reorganization plan and exit
Chapter 11 "as promptly as possible."

The company said it has taken "significant steps" to change
its marketing approach and reduce expenses. The company said
it plans to take additional steps, including closing stores
and reducing certain lease commitments.

Kenwin announced in August that it had closed 27
unprofitable stores in an attempt to reduce operating
losses. Kenwin's stock was delisted from the American Stock
Exchange last year, and it now trades on the over-the-
counter bulletin board.

MIDCON OFFSHORE: LDNG Objects To Use of Proceeds
While Louis Dreyfus Natural Gas Corp.(LDNG), holder of
security interests in all assets of the Midcon Offshore,
Inc. estate supports the Trustee’s proposed sale of the
estate’s South Marsh Island Blocks 141/144, LDNG opposes the
distribution of the proceeds of the sale.

A remainder portion of the proceeds of the sale are to pay
Long Horizons Fund LLP, the Trustee’s DIP lender.  But LDNG
states that there is no indication whether the payments to
Long Horizons will be used to retire debt on the revolving
credit DIP facility permanently or whether the proceeds will
be recycled into the borrowing base.

The distinction is critical, states LDNG, because Midcon’s
significant losses show no sign of abating, and oil and gas
properties are, by their nature, wasting assets.  LDNG
believes that if the estate’s operation is continued much
longer the value of LDNG’s collateral will almost certainly
shrink to a level beneath the amount of its secured claim.

LDNG further states that the court should authorize this
sale of assets, but in order to provide adequate protection
to LDNG, the court should require the Trustee to use all
available proceeds of such sale to permanently retire debt
of Long Horizons.

MONTGOMERY WARD: Seeks Assumption of Contracts
A hearing will be held on October 31, 1997 on the motion of
debtors and debtors in possession for an order authorizing
the assumption of certain executory employment contracts,
amending certain other executory employment contracts, entry
into certain postpetition employment contracts and
authorizing executive emergence incentive programs.

The debtors are seeking to retain members of Montgomery
Ward’s Executive Committee to remain in the debtors’ employ
and to work toward a successful reorganization of the
debtors’ estates.  Nine of the fourteen current members of
the executive committee have been employed by the debtors
for less than one year. If these executives are lost, the
debtors argue that it will be difficult and very expensive
for the debtors to attract qualified replacements.

The key provisions of the proposed employment agreements
include an increase of Mr. Roger Goddu’s base salary by a
minimum of $50,000 per year, a two year salary for Goddu
upon termination for other than cause, $700,000 in lieu of a
short term incentive, and if there is a change of control,
Goddu will receive three years base salary plus three times
his annual short-term incentive as severance.  

Short term incentives will be paid regardless of
performance, Mr. Civgin’s long term incentive in the amount
of $450,000 vesting over four years, Mr. Donoho will receive
a cash award of $100,000 for every full six months of active
service up to a maximum of $500,000 payable on December 31,
1999 and Messrs. Austin and Caporale have an incentive plan
providing for a maximum payment of $500,000 for each
executive vesting over three years and payable in May 2000.

NETS: Manzi’s Response to Committee’s Objection
James Manzi filed a response to the Official Committee of
Unsecured Creditors’ objection to his proof of claim.

Manzi’s proof of claims are based on a loan Manzi made to
Nets, in the amount of $1,593,301.70 plus accruing interest,
costs and expenses, Nets’ obligation to indemnify Manzi for
expenses incurred in connection with any actions asserted
against Manzi as a result of Manzi’s role as a director or
officer of Nets, and Manzi’s claim for attorneys’ fees and
expenses incurred in connection with certain post-petition
financing Manzi extended to Nets pursuant to a  borrowing
stipulation that was approved by the bankruptcy court. He
claims that the Committee has the burden to bring forth
evidence or legal theories that would justify the
disallowance of his claim.   

POCKET: Debtor Opposes NatTel’s Right To File Plan
Pocket Communications, Inc. and its wholly owned subsidiary,
DCR PCS, Inc. object to NatTel’s motion to modify the
debtors’ exclusive right to file a plan and they object to
allow consideration of NatTel’s competing plan.

Pocket states that this is the latest attempt by National
Telecom PCS, Inc., to interfere with these Chapter 11
proceedings to the detriment of legitimate creditors during
the debtors’ exclusive period.

“NatTel is a frustrated would-be competitor of the debtors,”
says Pocket.  The debtor goes on to call NatTel’s actions
“baseless terrorist tactics.”

The debtor claims that NatTel has not asserted any
legitimate reason for denying the debtors’ exclusivity
period in the midst of the confirmation process of its plan.
Further, Pocket states that NatTel’s desire to file a
competing plan to the debtors’ pending plan is not grounds
for the termination of the debtors’ exclusive period.

The debtor claims that this is a very large and complex
case, it has only been in bankruptcy for six months, the
debtors have remained current on postpetition obligations
and the debtors are not using exclusivity as a means of
pressuring creditors to submit to their demands.

RDM SPORTS: Lenders Want Protection
Foothill Capital Corporation, as agent for a group of
lenders of RDM Sports Group, Inc. et al. filed a limited
objection to the sale of certain real property in Smith
County, Texas.

As of October 13, 1997, Foothill’s claims against the
debtors pursuant to the DIP loan agreement totaled
approximately $32.6 million plus accrued and unpaid
interest, fees and expenses.

Foothill is requesting that the court order RDM to remit to
Foothill at the closing the proceeds of the sale of assets
or alternatively order the claims and liens of Foothill to
attach to the proceeds from the sale of the assets.

Likewise, Foothill has filed a limited objection with
respect to the sale by Diversified Trucking Corp. (a debtor
herein) to FHL Capital Corporation of certain assets of
Diversified Trucking Corp. Foothill demands that the
proceeds from the sale of these assets be remitted at the
closing to Foothill to apply against its claims and liens
or, alternatively, that Foothill’s liens attach to the
proceeds of the sale of such property.

SMITH TECHNOLOGY: To Sell Some Remaining Assets

Smith Technology Corp. of Newport Beach said Monday that it
plans to sell certain assets of its remaining operations,
primarily contracts, to another company in the
environmental-remediation business, after filing for Chapter
11 protection last week.

The company also said Smith senior lenders will provide
interim debtor-in-possession financing as due diligence is
performed by the prospective buyer.

Smith Technology filed for bankruptcy protection Oct. 8 in
U.S. Bankruptcy Court, listing $22.2 million in assets and
$72.3 million in liabilities.

Smith, which provides cleanup services for hazardous-waste
sites, listed Chase Manhattan Bank and BTM Capital Corp. as
its two largest unsecured creditors, each with a claim of
$24.2 million.

VCS SAMOA: Final Date For Proofs of Claim
November 26, 1997 at 4:00 PM is the last date and time for
filing proofs of claims against the debtors, VCS Samoa
Packing Company and Van Camp Seafood Company Inc.

WESTERN PACIFIC: MAX averts a shutdown
Western Pacific Airlines averted the possible shutdown of
its commuter subsidiary, Mountain Air Express (MAX), on
Wednesday by agreeing to forward $332,000 to MAX to pay
employees' salaries, aviation fuel and aircraft insurance.
WestPac took the action after MAX officials filed an
emergency motion with the U.S. Bankruptcy Court in Denver to
force the parent airline to honor its contract with the
commuter carrier.

In a letter sent by MAX to WestPac late Monday afternoon,
the commuter airline - which flies between Denver and eight
cities in the region - said it had missed a $293,000 payroll
payment to employees on Friday and a "substantial" number of
MAX employees were ready to quit if they were not paid. The
commuter airline has about 300 employees, including many who
are based at Denver International

MAX's letter said it had only $12,000 in cash on hand and
would be forced to shut down if money was not forthcoming
from WestPac. The warning forced lawyers for MAX and WestPac
and its creditors into a series of emergency meetings
Wednesday in the hallway outside the bankruptcy courtroom of
Judge Sidney Brooks.

The agreement they reached called for WestPac to wire MAX
$70,000 for insurance on the company's Dornier 328 turboprop
planes, $55,000 for aviation fuel and about $207,000 for
salaries owed to MAX employees. Key to reaching the deal was
getting Fairchild Dornier, owner of MAX's five leased
Dornier 328s, to accept a 15-day "standstill agreement" in
which the aircraft lessor would not repossess the planes if
the past-due insurance payment is made.

In a conference call with MAX employees Wednesday afternoon,
company President Tom McClain said that the money had
arrived from WestPac and that employees would be paid today
all of the straight-time pay they are owed.

The tentative agreement also allows MAX to establish code-
sharing relationships with other airlines. Code-sharing
refers to joint ticketing arrangements between two airlines
that allow seamless travel for consumers on both carriers.
McClain said his carrier also expects to have similar pacts
with Frontier Airlines and TWA. Frontier "is interested in
pursuing some type of relationship with MAX, depending on
how things turn out in court," Frontier's marketing vice
president, Jeff Potter, said on Wednesday.

McClain said MAX was profitable in the third quarter ended
Sept. 30 and the airline filled 58 percent of its seats for
the quarter. But he added that MAX is owed about $2 million
by WestPac for travel services supplied before the jet
carrier's Oct. 5 bankruptcy filing.

A listing of meetings, conferences and seminars appears
every Tuesday.

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
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