TCR_Public/971023.MBX    T R O U B L E D   C O M P A N Y   R E P O R T E R

       Thursday, October 23, 1997 Vol. 1, No. 45

                   Headlines

CONSOLIDATED HYDRO: Response to Stockholders Objections
DOW CORNING: U.S. Objects to Disclosure Statement
GUY F. ATKINSON: Seeks Authority to Obtain DIP Financing
MONTGOMERY WARD: Seeks to Close Stores/Retain Liquidators
POCKET: NatTel’s Fiery Reply

OLD AMERICA: Seeks to Close 3 Stores and Retain Liquidators
PAYLESS CASHWAYS: Court Approves Rejection of Lease
PAYLESS CASHWAYS: Court Grants Order For Search Firm
PAYLESS CASHWAYS: Court Orders Sale
PAYLESS CASHWAYS: Does Not Have To Pay Check

PAYLESS CASHWAYS: Retail Consulting OK'd
UNDERWATER WORLD: Files for Bankruptcy
US ONE: Winstar Closes Acquisition

                       -------

CONSOLIDATED HYDRO: Response to Stockholders Objections
-------------------------------------------------------
Consolidated Hydro, Inc., (CHI) responded to the objection  
of the stockholders to confirmation of the proposed plan.

The debtors state that although the stockholders claim  
otherwise, the essence of their objection is that "it fails  
to provide appropriate equity to the common stockholders of  
the debtor."  The Objecting Stockholders have blithely  
ignored the fact that the debtor is insolvent and that under  
the absolute priority rule applicable in Chapter 11, common  
stockholders have no entitlement to participate in the  
reorganized CHI. Consequently, the objection is without  
merit.

The confirmation hearing on the plan is scheduled for today.


DOW CORNING: U.S. Objects to Disclosure Statement
-------------------------------------------------
The United States of America, an unsecured creditor of Dow  
Corning Corporation objects to the Amended Disclosure  
Statement saying that it does not provide information of a  
kind and in sufficient detail to enable a reasonable  
investor typical of holders of claims or interests to make  
an informed judgment about the plan, as required by the  
Bankruptcy Code.

Specifically, the United states claims that the Disclosure  
Statement identifies 23 classes of claims.  One of the  
classes is entitled “Government Payor Claims,” which  
purports to cover at lest some of the United States’  
Claims.  However, the Disclosure Statement provides  
absolutely no explanation for creating this special class  
and absent an explanation from the debtor the United States  
does not have the information necessary to make a sound  
judgment about the plan.

Furthermore, the United States claims that the debtor  
provides no explanation for how it proposes the Court would  
estimate the United States’ claims or the factors that would  
determine whether these claims get estimated at all.


GUY F. ATKINSON: Seeks Use Of Collateral, Cash Collateral  
---------------------------------------------------------
Guy F. Atkinson Company of California, Guy F. Atkinson  
Company and Guy F. Atkinson Holdings, Ltd., are seeking  
authority of the Court to continue to use collateral and  
cash collateral and to continue to borrow under a debtor-in-
possession financing agreement.

The current court order authorizing DIP financing from  
bonding companies and Granting Liens and Priorities expires  
on October 31, 1997.

The debtors request that the court extend the debtors’  
authority to use collateral and cash collateral and to  
provide adequate protection to the Banks, the Bonding  
Companies, Yale University and to extend the debtors’  
authority to borrow from the Bonding companies until March  
31, 1998.


MONTGOMERY WARD: Seeks to Close Stores/Retain Liquidators
---------------------------------------------------------
Montgomery Ward Holding Corp. seeks to close certain stores,  
conduct store closing sales and enter into an agency
agreement with the liquidating agent, Gordon Brothers Partners,
Inc. and Hilco Trading Company/Garcel, D/B/A Great American  
Asset Management and Alco Capital Group, Inc.

The hearing will take place on November 7, 1997.

The company proposes closing 43 retail stores, 1 liquidation  
center and 44 auto service centers

In conjunction with the motion to close the stores, and in  
order to accomplish the sales quickly and efficiently, the  
debtors sought an order to limit the notice and shorten the  
time for objections to October 23, 1997.


POCKET: NatTel's Fiery Reply
------------------------------
Jack Robinson, Attorney and principal of National Telecom  
(NatTel) has filed a  fiery reply to the debtors' opposition  
to NatTel's motion to modify the debtors' exclusive right to  
file a plan.

Robinson stated, "The debtors' opposition, filed by and  
signed by Attorney Paul M. Nussbaum of the Debtors'  
bankruptcy law firm of Whiteford, Taylor & Preston, is  
perhaps one of the most scurrilous and vitriolic pleadings  
ever to have been filed in a bankruptcy case.  Attorney  
Nussbaum's personal attacks on opposing counsel go way  
beyond the bounds of acceptable advocacy, and border on (if  
not exceed) the unethical.  His malevolent attempts to  
personalize these proceedings draw upon the basest instincts  
of the human character."

The pleading goes on to say, "Rather than be drawn into  
responding to the scurrilous allegations found in the  
debtors' guttersnipish pleading, NatTel will leave it to  
this court to determine whether such personal attacks  
warrant sanctions pursuant to Fed.R.Civ.P.11."

The pleading goes on to argue once again that the debtors'  
proposed plan is unconfirmable as a matter of law and that  
allowing NatTel's proposed competing plan to be considered  
simultaneously with the debtors' plan not only is in the  
best interest of creditors, but does not prejudice the  
debtors in the least.


OLD AMERICA: Seeks to Close 3 Stores and Retain Liquidators
-----------------------------------------------------------
A hearing will be held on October 24, 1997 on the motion of  
Old America Stores, Inc., Old America Wholesale, Inc., and  
Old America Store, Inc. for authority to close three of its  
stores and for the authority to hire Alliance Retail Group,  
Inc. as liquidators with respect to the sales.


PAYLESS CASHWAYS: Court Approves Rejection of Lease
---------------------------------------------------
The Court has signed an Order authorizing Payless Cashways,  
Inc. to reject the unexpired lease of nonresidential real  
property located in Stockton, California.


PAYLESS CASHWAYS: Court Grants Order For Search Firm
----------------------------------------------------
Payless Cashways, Inc. has been authorized by the Court to  
engage the search firm Spencer Stuart to identify Board
of Director Candidates.


PAYLESS CASHWAYS: Court Orders Sale
-----------------------------------
The Court has authorized the sale of the properties at:

           14051 Bellaire Boulevard, Houston, Texas
           717 Maxey Road, Houston, Texas
           5202 Red Bluff Road, Pasadena, Texas
           2730 Sunrise Boulevard,Rancho Cordova,Cal.
           900 West Nasa road One, Webster, Texas

The ad valorem tax liens for the 1997 tax year, previously  
assessed on the Lake Dallas, Texas and the two Houston,  
Texas properties are retained against the properties until  
such taxes, together with any penalties or interest which  
might accrue thereon in the ordinary course of business are  
paid in full by the purchaser or any subsequent owners of  
the properties.

The proceeds of the sales of the Lake Dallas, Texas and the  
Salem, Mass. properties are proceeds of Designated  
Collateral, and shall be used to pay down the pre-petition  
debt pursuant to the terms of the DIP order.

The proceeds of the sale of the rest of the properties after  
payment of the sales commission, shall be held by the  
debtor for the benefit of UBS Mortgage Finance, Inc and  
Canadian Imperial Bank of Commerce.  The proceeds shall be  
disbursed only upon order of the court.  


PAYLESS CASHWAYS: Does Not Have To Pay Check
--------------------------------------------
The Court has entered an Order providing that Georgia-
Pacific has no right the $1,487,331.40 check that was  
not paid by NationsBank pursuant to a binding stop payment  
on July 21, 1997 revoking a provisional settlement it had  
granted on July 18, 1997.

The Court ruled that no pre-petition transfer of funds took  
place, the funds necessary to settle the check to Georgia-
Pacific remained property of the bankruptcy estate, and  
Georgia-Pacific has no legal claim to the funds.

Absent evidence that the Doctrine of Necessity applies, the  
Court stated that it does not have the equitable power to  
authorize Payless to treat one unsecured creditor  
differently from all others.


PAYLESS CASHWAYS: Retail Consulting OK'd
-----------------------------------------
The Court has approved the request of Payless Cashways, Inc.  
to employ and retain Retail Consulting Services, Inc. as a  
real estate consultant


WILL ROGERS DOWNS: Trying to Reorganize
---------------------------------------
The Tulsa World reported on October 21, 1997 that a group  
hoping to revive Will Rogers Downs listed the race track's  
liabilities at $16.1 million in a document filed in U.S.  
Bankruptcy Court.

Judge Terrence Michael held a brief hearing and declined  
to dismiss the reorganization case.  "We want to proceed  
through the bankruptcy," said attorney Heath Hardcastle,  
who represents Caveat Capital Corp., which filed an  
amended reorganization plan and disclosure statement  
Tuesday.

Hardcastle told the judge he expects the Internal Revenue  
Service to object to the track's disclosure statement.  
Creditors include the IRS, the Rogers County treasurer,  
the Oklahoma Employment Security Commission and  
construction lienholders.

Will Rogers Downs had been protected from creditors under  
a previous bankruptcy court case that was dismissed in  
December. Track builder Will Rogers Jockey & Polo Club  
Inc. subsequently filed a new Chapter 11 bankruptcy  
reorganization petition in federal bankruptcy court in  
Tulsa. That move prevented Rogers County from auctioning  
the Claremore track to recover back taxes.

Reorganization calls for Cottonwood Racing Corp., which  
owns the track, to provide thoroughbred and quarter horse  
racing and simulcast betting if the state racing  
commission allows it.

Cottonwood has applied for a 37-day meet from March 20 to  
June 7. The Oklahoma Horse Racing Commission is scheduled  
to consider that request Thursday.

The reorganization plan laid out a schedule for paying  
some of the track's taxes and bills over several years.  
The plan hinges on anticipated income from future races at  
Will Rogers.

The only year of operation was 1987, according to court  
documents that estimate the track's worth at $800,000.  
Several short meets took place during the county fair in  
later years.


UNDERWATER WORLD: Files for Bankruptcy
---------------------------------------
The Star Tribune Twin Cities reported that UnderWater World  
at the Mall of America filed for protection from creditors
Friday under the U.S. Bankruptcy Code.

Despite the Chapter 11 filing, the year-old aquarium expects  
to stay open as officials try to develop a new debt-payment
plan in 90 to 120 days. Friday's filing followed news in
September that Tarlton Aquastar, the attraction's Texas-
based developer, had delayed $1.1 million in bond payments
due March 1, then missed $1.2 million in payments Sept. 1.

The filing, in U.S. Bankruptcy Court in St. Paul, reported  
the aquarium's total assets of $22,046,119 and liabilities
of $23,729,854 as of Sept. 28.The walk-through aquarium
opened in June 1996 in the mall's basement. There was a
burst of attendance after it opened, but then the crowds
began diminishing.

Joy Frederick, Tarlton's vice president for marketing and  
public relations, said that because it has been difficult to
reach all of the aquarium's investors, the developer decided
to seek courtprotection until a new financing plan can be
prepared.

"We'd been in negotiations with the investors for a little  
over six months to try to restructure the debt," she said.
It's premature to discuss future options, she said. "If we
had one, we wouldn't be doing this."

Tarlton President Erik Pedersen said last month that  
UnderWater World was trying to restructure more than $21
million in debt by year's end to meet the next bond payment
on March 1.

The combination of 13.75 percent interest on seven-year  
bonds totaling $23.75 million and lower-than-expected
attendance caused the aquarium to slip below the break-even
point, he said. "We knew the margin was so thin," he said.

The aquarium reported drawing 1.4 million visitors during  
the year that ended in June. Holmes said this year's
attendance is on track to meet projections of 1.1 million to
1.3 million.

According to the filing, the largest secured claim is $13  
million by Norwest Bank Minnesota. The bank also has an
unsecured claim of $3.15 million.  Among more than 40
unsecured creditors, the Mall of America Co. claims
$162,530.  Tarlton is listed as the aquarium's majority
owner, with 60 percent, while Cargill Inc. holds 20 percent.
No other owner holds more than 4 percent.

The Mall of America released a statement late Friday saying  
that it is "fully confident that UnderWater World will
emerge from this restructuring stronger and in a position
that they will continue to be an enormous draw to the mall."


US ONE:   Winstar Closes Acquisition
------------------------------------  
Winstar Communications Inc.{WCII} has completed the  
acquisition of telecommunications assets held by US One  
Communications Corp., currently in bankruptcy  
proceedings. The purchase includes 14 5ESS-2000 switches  
manufactured by Lucent Technologies Inc. {LU}. WinStar, in  
announcing the deal last week, said it will accelerate the  
deployment of its broadband telecommunications network as  
well.

WinStar, an operator of 38 GHz broadband wireless services,  
paid $100 million in the acquisition--$80 million in cash  
paid at closing and $20 million to be made in a final  
payment some 90-120 days from now.  
WinStar can choose to make this payment in cash or WinStar  
stock, once US One's reorganization plan receives final  
bankruptcy court approval.

In a separate transaction, WinStar received approximately  
$19 million in cash from selling two of the 5ESS-2000  
switches in those areas where it has sufficient capacity  
already in place. WinStar said that it is discussing offers  
from various parties for five additional switches.  


                   -----

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.  

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