TCR_Public/971027.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 27, 1997 Vol. 1, No. 47   


BIG RIVERS: Disqualification Motion Appeal
CALDOR: Discussion on Extension of Exclusive period  
DOW CORNING: Tort Claimants Object to Disclosure Statement
DOW CORNING: More Objections to Disclosure Statement
DOW CORNING: Earning’s Rise

FLAGSTAR: Hearing To Extend Exclusivity  
KENETECH WINDPOWER: Hearing on Rejection of Agreements
LIL’ THINGS: Expedited Hearing on Loan Agreement
MIDCON: US Replies to Objection of Louis Dreyfus

WESTMORELAND COAL: Court Appoints Committee
WESTMORELAND COAL: Crowell & Moring File Motion


BIG RIVERS: Disqualification Motion Appeal
Appellants, Pacificorp Kentucky Energy Company and  
Pacificorp Power Marketing, Inc. are appealing from an order  
wherein the judge, J. Wendell Roberts refused to recuse  
himself and to remove J. Baxter Schilling as examiner from  
the Big Rivers Chapter 11 case, despite the allegation by  
the appellants of pervasive ex parte communication between  
them throughout the bankruptcy case.

On appeal, Pacificorp asks if a bankruptcy judge, by his own  
order can exempt himself and an examiner from the  
prohibitions on ex parte communications and whether the  
bankruptcy judge erred in denying the motion to disqualify  
him and to remove the examiner in light of the alleged  
undisputed evidence of the extensive ex parte communications  
with the examiner.

CALDOR: Discussion on Extension of Exclusive period
As reported in the CALDOR BANKRUPTCY NEWS, Issue Number 22,  
published by the Bankruptcy Creditor’s Service, Princeton,  
New Jersey:

"What's your sense on, realistically, when we can see a  
plan," Judge Garrity asked Michael Crames, Esq., at the  
uncontested hearing at which the Court granted the Debtors'  
Fourth Motion for an extension of their exclusive periods?   
"I fully appreciate the significance of the fall and  
Christmas seasons, and you know I understand that, but  
what's your feeling as far as whether we will see a plan in  
the spring?"

"Realistically, your Honor," Mr. Crames replied, "we are  
going as far as we can with the constituents; making certain  
assumptions, which is not unusual in Chapter 11, as you  
know, including that the business plan will be realized,  
that the Debtor will achieve its projected results, that's a  
major assumption obviously.

DOW CORNING: Tort Claimants Object to Disclosure Statement
The Official Committee of Tort Claimants filed an objection  
to the proposed amended Disclosure Statement of Dow Corning  
They argued that the amended plan should not be sent out for  
a vote because its treatment of voting, classification and  
other matters is patently defective.  Particularly, that the  
debtor discriminates against individual tort claimants who  
vote no, that the Litigation Trust violates due process,  
that the “Best Interests” test can not be satisfied for  
claims in the Litigation Trust, that the releases of the  
debtor’s shareholders violate a provision of the Bankruptcy  
Code, that the classification of tort claimants violates a  
section of the Code, and that the proposed Plan cannot  
possibly satisfy the cramdown standards.

The second basis of objection is that the proposed  
Disclosure Statement utterly fails to provide the  
information to which tort claimants are entitled.  The  
Disclosure Statement fails to disclose that most claimants  
will not receive the recoveries advertised in the  
Symptom/Medical Condition Grid, and it fails to accurately  
disclose the aggregate nominal and present values of the  
contemplated distributions to tort claimants.   

They also claim that the Disclosure Statement does not  
contain adequate information regarding the releases included  
in the plan, and that it  misleadingly suggests that if the  
plan is voted down it will be confirmed through cram down  
and claimants will face endless litigation of breast implant  

DOW CORNING: Earning’s Rise
Dow Corning Corp. said third-quarter earnings rose fourteen  
percent mostly because of lower reorganization costs.

Profits were $64.1 million vs. $56.4 million in the same  
period last year. For the three months ended Sept. 30, the  
company had sales of $677.8 million, up 5 percent from  
$644.3 million in the same quarter last year.

"Sales volume growth was healthy in most product lines and  
geographies, but the strong U.S. dollar continues to reduce  
reported revenue," John Churchfield, Dow Corning's chief  
financial officer, said in a statement.

He said earnings grew due mainly to lower reorganization  
costs and higher non-operating income.

For the first nine months of 1997, Dow Corning earned $176.1  
million, compared with $160.3 million for the same period in  
1996. Sales were $1.97 billion, up from $1.89 billion for  
the first nine months of last year.

Once the world's largest maker of silicone breast implants,  
Dow Corning is reorganizing in federal bankruptcy court. The  
Chapter 11 filing followed a flood of lawsuits by women who  
claim the implants caused health problems.

DOW CORNING: More Objections to Disclosure Statement
The Common Benefit Litigation Expense Fund, the Mentor  
Settlement Fund and the Bioplasty Settlement Fund have also  
filed an Objection to the Amended Disclosure Statement of  
Dow Corning Corporation.   

They claim that the Disclosure Statement does not address  
the issue of payment of fees and expenses for the provision  
of common benefit services to breast implant recipients.
They believe that there may be a conflict of interest for  
non-independent persons to serve as trustees for the  
Litigation Trust.

They claim that the causation trial only benefits the  
Reorganized Debtor because if the Reorganized Debtor is  
successful in the trial, the outcome is binding on all  
Rejecting Claimants, however, if the Reorganized Debtor is  
unsuccessful, the Rejecting Claimants must still  
individually prove causation.

The Objection also states that since the total number of  
Rejecting Claimants, even assuming acceptance of the Plan,  
could be in the tens of thousands, the provision for only
ten trials per year is inadequate.

And finally they claim that the use of a facility other than  
the Claims Office in Houston, Texas, to evaluate claims made  
under the Global Settlement would not be cost efficient.

FLAGSTAR: Hearing To Extend Exclusivity
A hearing will be held on November 6, 1997 to consider the  
motion by debtors Flagstar Corporation, Flagstar Companies,  
Inc., and Flagstar Holdings, Inc. to extend the time of the  
exclusivity period for 90 days.   

KENETECH WINDPOWER: Hearing on Rejection of Agreements
A hearing will be held on November 17, 1997 on the motion of  
the debtor, Kenetech Windpower, Inc., fka U.S. Windpower,  
Inc., seeking to reject specified agreements related to  
Altamont Pass Partnerships

The agreements in question relate to the ownership and  
operation of wind-powered electric power plants in the  
Altamont Pass area of California.

The debtor claims that the Agreements consist of the  
estate’s remaining burdensome agreements with respect to the  
partnerships’ windplants and agreements and contracts in  
conjunction therewith. The debtor argues that the rejection  
is in the best interest of the estates because the debtor no  
longer derives any benefit from any of the agreements.

LIL’ THINGS: Expedited Hearing on Loan Agreement
The Court has approved the debtor’s motion for an Expedited  
Hearing on its Motion to Approve a First Amendment to the  
Loan and Security Agreement between the debtor and  
BankBoston Retail Finance Inc. and to establish certain  
supplemental procedures in the event of default.

The debtor is allowed to shorten the notice of hearing on  
its Amendment Motion which is set for hearing on October 28,  
1997 to 13 days.  The time period for responses to the  
Amendment Motion is reduced to 12 days making the deadline  
October 27, 1997.

MIDCON: US Replies to Objection of Louis Dreyfus
The United States of America, on behalf of the U.S.  
Department of the Interior, Minerals Management Service  
(MMS) filed a Reply to the Objection of Louis Dreyfus  
Natural Gas Corporation to the Proposed Use of Proceeds  
Arising From the Trustee’s Motion to Sell Estate’s Interests  
in South Marsh Island Block 141/144.

The Trustee in this case had requested approval to sell the  
estate’s interests in the South Marsh Island Block 141 and  
144 leases to Noram.  According to the United States, Midcon  
is in default on the leases and owes $1,040,464.29 to the  
MMS plus $39,000 in civil penalties.

Louis Dreyfus Natural Gas Corporation,(LDNG) a secured  
creditor whose claim against Midcon is disputed by the  
estate, objects to the use of the sale proceeds to cure the  
royalty default owed by Midcon to the MMS.

LDNG argues that the Trustee need not cure the royalty  
default but may instead provide adequate assurance that the  
Trustee will promptly cure the default, but instead to pay  
LDNG’s secured claim in full.

The US disagrees that the secured claim is entitled to  
payment before the cure of the defaults on the leases.

WESTMORELAND COAL: Court Appoints Committee
The Court has appointed a Retired Salaried Employees’  
Committee consisting of the following individuals:

Steve J. Bobrosky Sr.
18 Third Avenue East
Big Stone Gap, Virginia 24219

James D. Garrison
1746 Derby Road
Appalachia, Virginia 24216

Howard H. Frey
236 Holmecrest Road
Jenkintown, Pennsylvania 19046

Joseph C. Byrne
12 Margin Court
Newtown, Pennsylvania 18940

Boyce W. Glover Jr.
4700 Emory Lane
Charlotte, NC 28211-3064

The US Trustee shall convene a meeting with the members of  
the Retirees’ Committee as soon as practicable. The members  
of the Committee may request reimbursement of expenses.

WESTMORELAND COAL: Crowell & Moring File Motion
Crowell & Moring LLP filed a motion seeking a determination  
that the Firm can represent the UMWA Combined Benefit Fund  
in its pending negotiations with the Health Care Financing  
Administration (HCFA) without disqualifying the Firm from  
its current representation of Westmoreland Coal Company,  
Westmoreland Energy, Inc., Westmoreland Terminal Company,  
Westmoreland Resources, Inc., and Westmoreland Coal Sales  
Company, Inc., debtors.

The Firm argues that the HCFA matter does not involve any  
issues that relate to the debtors’ Chapter 11 cases or the  
debtors’ disputes with the Funds.  Moreover, the fees to be  
generated by the Firm in the proposed representation of the  
Combined Fund in connection with the HCFA matter will  
constitute less that .5 percent of the Firms’ revenues  
during the period of the proposed representation.

The Firm agrees that employees of the firm working on one  
matter will not work on the other matter, and that the  
debtors have consented to the Firms’s proposed  
representation of the Combined Fund and have agreed to waive  
any conflict of interest such representation involves,  
conditioned on a determination by the Court that such  
representation by the Firm will not disqualify it from  
representing the debtors.  Likewise, the Funds have waived  
any conflict of interest.
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     
material is copyrighted and any commercial use,     
resale or publication in any form (including e-    
mail forwarding, electronic re-mailing and     
photocopying) is strictly prohibited without prior     
written permission of the publishers.     
Information contained herein is obtained from     
sources believed to be reliable, but is not     
The TCR subscription rate is $575 for six months     
delivered via e-mail.  Additional e-mail subscriptions for     
members of the same firm for the term of the initial     
subscription or balance thereof are $25 each.  For     
subscription information, contact Christopher Beard at     
       * * *  End of Transmission * * *