TCR_Public/971030.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 30, 1997 Vol. 1, No. 48


ANCHOR RESOLUTION: Seeks Extension of Exclusive Period
FLAGSTAR: Extension of 90 Day Period
FLAGSTAR: Seeks Extension of Exclusive Period
GENERAL WIRELESS: Licenseholding Subsidiaries In Chapter 11
KIA MOTORS: Chairman Resigns

MID-CONTINENT: Court Approves Plan
PAYLESS CASHWAYS: Stock Heavily Traded
PRESIDIO: Retains Wexford Management
SPORTSTOWN: Hearing for Final Distribution
SUBSTANCE ABUSE: Secures Long-Term Funding
WESTERN PACIFIC: Nets $5.4 Million In Sale of Jet

ANCHOR RESOLUTION: Seeks Extension of Exclusive Period
Anchor Resolution Corp. et al. is seeking an order extending
its exclusive period to solicit acceptances to the second
amended joint Chapter 11 liquidating plan of reorganization,
as may be amended, to November 15, 1997 or until the
conclusion of the hearing on confirmation of the debtor’s

The debtor claims that the extension of time will permit the
debtors to conclude the balloting process.  In addition, the
time extension requested will permit the debtor to focus its
efforts in the time before the confirmation hearing on the
plan confirmation process without the burden of the spectre
of a competing plan.

FLAGSTAR: Extension of 90 Day Period
The Debtors have sought and obtained an extension of the 90-
day period granted under Rule 9027 of the Federal Rules of
Bankruptcy procedure for the Removal of civil actions to the
Bankruptcy Court for resolution.  The Debtors seek an
additional 90 days in order to focus on litigation with
the 10% Noteholders and confirmation of the Prepackaged
Plan. The Debtors relate that they have been overwhelmed by
discovery requests from the 10% Noteholders.

FLAGSTAR: Seeks Extension of Exclusive Period
As a precautionary measure, in the event that the 10%
Noteholders cause delay in confirmation of the Prepackaged
Plan beyond the November 6 Confirmation Hearing, the Debtors
request that the Court extend their exclusive periods during
which to file a plan of reorganization and solicit
acceptances thereof.

The Debtors argue that, based on the procedural posture of
these cases, substantial cause exists pursuant to 11 U.S.C.
Sec. 1121 for a 90-day extension of the Debtors' exclusive
periods.  Although the Debtors believe that they will obtain
confirmation of the Prepackaged Plan on November 6, there is
no assurance.  In the event that confirmation were denied
and the Debtors exclusive periods were to lapse, the likely
result would be the filing of competing plans and
counterproductive litigation not in the best interest of
anyone involved in these cases.

Accordingly, the Debtors ask the Court to extend their
exclusive period during which to file a plan of
reorganization through and including February 8, 1998 and
their exclusive period during which to solicit acceptances
of such plan through and including April 9, 1998.

GENERAL WIRELESS: Licenseholding Subsidiaries In Chapter 11
As reported in Communications Today on October 28, 1997,
Dallas-based C-block PCS licensee General Wireless Inc.
(GWI) sought Chapter 11 bankruptcy protection in U.S.
Bankruptcy Court in Dallas for the 14 separate subsidiary
companies it formed to hold its licenses. GWI did not file
for protection itself since the company's 14 licenses were
under the control of the subsidiaries, GWI PCS 1 through GWI
PCS 14.

"Because the commission did not provide viable alternatives,
General Wireless had no recourse other than seeking an
objective and impartial forum in which a commercially viable
solution may be created. Accordingly, General Wireless
subsidiaries have sought relief in the forum responsible for
supervising the restructuring of debts," the company said in
a statement. GWI had been threatening to resort to
bankruptcy since it became clear that the FCC would not sign
off on a substantial discount or similar debt restructuring
for C-block licensees. Along with NextWave Telecom
Inc., the company had been pushing for a full-price buyout
option that would allow it to use all of its down payment to
buy licenses at a 15 percent backout to net present value.

After the FCC adopted the current four-option menu for C-
block licensees, including a full-price buyout option with
no discount at all and a 30 percent penalty on deposits (CT,
9/26), GWI said that the plan did not present a viable
alternative to bankruptcy.

FCC Chairman Reed Hundt issued a statement saying GWI's
decision "is not
surprising given the failure of the commission majority to
adopt a workable solution for the larger C-block licensees.
Now the bankruptcy court must slowly sift through the
barrage of clever legal arguments made by the debtor's
lawyers designed to keep these licenses on ice."

Hundt said it is "disappointing that the commission failed
to follow the
bipartisan direction from Congress to adopt a workable
option that would have avoided this filing." He added, "it
is equally unfortunate that Congress has not yet provided
the FCC with legislation that would eliminate the
uncertainties of bankruptcy by making crystal clear that
these licenses belong to the American people and that no
bankruptcy lawyer can claim otherwise." Although it had kept
a relatively low profile since the auction, GWI was the
third largest C-block bidder, offering nearly $1.1 billion
for 14 licenses in California, Florida and Georgia,
including San Francisco, Miami and Atlanta.

In May, the company withdrew a planned stock offering but
said it did not anticipate missing any license payments. At
that time, Pocket Communications Inc. already had filed its
own Chapter 11 petition and NextWave had asked the FCC for a
waiver of its order that NextWave restructure its ownership
to reduce foreign investment, saying such a restructuring
would force it into an inhospitable capital market.

At the time, GWI CFO Dennis Spickler said "I think it's safe
to say that both Pocket and NextWave were far more stretched
financially {than GWI} because they pushed hard to deploy
their networks. We chose a more conservative approach, and
as a result, I don't think we are as far along in deployment
of our network, and we're not as stretched as they are."

JAY JACOBS: Letter of Intent
Jay Jacobs, Inc. announced that it has entered into a letter
of intent with Noari Capital Corporation for a
recapitalization of the company.  Noari Capital through an
investment banking firm will offer preferred stock to
accredited investors in a private placement.

The recapitalization will involve a one for five reverse
split of the company’s common stock to be effective as of
the closing of the transaction.  There will also be an
issuance of between $4 million and $6 million of convertible
preferred stock at $2.00 per share.  Each share of preferred
stock will be convertible into two shares of common stock of
the company and will also have certain other provisions
including mandatory conversion, anti-dilution and
restrictive covenants.

There will be a payment of $1.5 million in cash and the
issuance of $1 million of the company’s common stock as
payments in full for the approximately $2.5 still owed to
pre-bankruptcy creditors. Rex Steffey, President and CEO of
Jay Jacobs said, “Upon closing, the recapitalization will
strengthen our balance sheet, complete our obligations under
the Chapter 11 bankruptcy plan and allow for the
implementation of our business plan...”

KIA MOTORS: Chairman Resigns
The head of South Korea's troubled Kia group resigned
Wednesday, ending a key dispute with creditor banks and
urging striking workers to return to assembly lines.  Kia's
lending banks had demanded that chairman Kim Sun-hong resign
before they provided more bailout loans for Kia Motors,
South Korea's second largest car maker.

Kim had rejected that suggestion, and Kia workers have been
on strike since last Wednesday, claiming the banks were
plotting to sell their company after installing a pliant

MID-CONTINENT: Court Approves Plan
The United States Bankruptcy Court for the Northern District
of Oklahoma confirmed the Chapter 11 plan of reorganization
for Mid-Continent Power Company, Inc., an Oklahoma-based
cogeneration company.  The plan provides for the transfer of
MCPC’s assets to Oklahoma Loan Acquisition Corporation, a
company formed by NRG Energy, Inc. to invest in the MCPC

In January 1996, NRG acquired 42 percent of the common stock
of O’Brien Environmental Energy through a contested
bankruptcy process and brought it out of bankruptcy in April

PAYLESS CASHWAYS: Stock Heavily Traded
As reported in the Kansas City Star on October 28, 1997,
Payless Cashways Inc.'s stock was among the thousands of
heavily traded issues in Monday's market slide, losing
almost 37 percent of its value and closing at 15 1/2 cents a

Payless, which until June normally traded less than 100,000
shares a day, saw almost 1.8 million shares change hands on
Monday. One theory as to why the stock was so actively
traded on Monday, besides the overall market activity, was
that the different classes of creditors have started
receiving and analyzing the so-called disclosure statement.
Payless mailed almost 40,000 of those statements on Oct. 17.

Among the factors that can be determined from Payless'
disclosure statement is that on paper, the company's stock
after it emerges from bankruptcy is projected to be worth
about $9.20 a share.  If the plan is approved by the U.S.
Bankruptcy Court and Payless emerges from Chapter 11,
current Payless shareholders would receive one share of new
Payless stock for every 100 existing shares.  However, when
and if the plan is approved and the new stock is distributed
and starts trading, it could go anywhere.

Trading volume increased significantly in mid-June after the
company revealed large losses, delayed a key filing with the
Securities and Exchange Commission and revealed that it
would once again meet with its banks. That high volume
continued after the company filed for Chapter 11 bankruptcy
reorganization on July 21. The recent heavy volume prompted
Rob Lundeen, the chairman of the committee representing
Payless shareholders, to ask the Securities and Exchange
Commission to investigate trading in the stock.

Lundeen said he recently received a letter from the
commission acknowledging his inquiry.  However, as is its
policy, the commission refused to confirm or deny it was
pursuing an investigation.

PRESIDIO: Retains Wexford Management
Presidio Capital Corp., a British Virgin Islands Corporation
and the post-bankruptcy successor to Integrated Resources,
Inc. announced today that it had entered into an agreement
with Wexford Management LLC to retain Wexford as a
consultant with respect to the management of the Company.  
Wexford has been responsible for the management and
administration of Presidio, and its subsidiaries since the
Company began operations on November 3, 1994 upon the
consummation of the plan of reorganization in Integrated's
bankruptcy case.  

Under the new agreement, Wexford will provide consulting
services relating to the management of Presidio for up to 6
months following the November 3, 1997 expiration of its
existing agreement. In a related development, Presidio
announced the appointment of Richard J.Sabella as President
and Chief Executive Officer of Presidio.

During Wexford's tenure, Presidio made liquidating
distributions of over $360 million and shareholders who
bought Presidio shares when they were originally issued in
November 1994 have received value (based on the current
stock price) of $61.38 on a $29.80 investment, an IRR of
approximately 48%.

SPORTSTOWN: Hearing for Final Distribution
Sportstown, Inc., seeks an order of the court approving the
final distribution and approving procedures relating to the
closing of the debtor’s bankruptcy case.  A hearing will be
held on November 20, 1997.

SUBSTANCE ABUSE: Secures Long-Term Funding
Substance Abuse Technologies, Inc., (SAT)(AMEX:SAU)
announced that on October 23, 1997, the United States
Bankruptcy Court for the Southern District of Florida
approved long-term financing for the Company making it
possible for SAT to meet its day-to-day operating needs
without interruption during the final phase of Chapter 11
bankruptcy proceedings.  

According to SAT's bankruptcy attorney, Linda Worton,
“Approval of the long-term financing was a big step in the
Company's road to recovery." Ms. Worton confirmed that the
Company is developing a plan of reorganization, which will
enable SAT to emerge from Chapter 11 as a stronger company,
with less debt and a greater market share.  Ms. Worton and
the Company's management team will be meeting with the
Company's creditors next week to discuss the terms of the

Steven A. Cohen and SAC CAPITAL ADVISORS, LLC are the source
of the recently approved long-term financing.  Under the
terms of the agreement between SAT and SAC Capital, SAT will
have a line of credit of almost $3,000,000 to fund normal
company operations, administrative expenses and the cost of
acquiring DataMed International.  

Company officials also confirmed that SAT, which provides
drug- free workplace consulting, training, legal support,
and drug and alcohol testing administration, will complete
the acquisition of DataMed International, a third party
administrator located in Lakewood, Colorado.  SAT has been
managing the day-to-day operations of DataMed since July
under an interim management agreement and has been
successful in turning around its operations.  "We are
excited about how well things are going with DataMed, since
we took over management and we look forward to finalizing
the details of that acquisition," said Robert M. Stutman,
Chairman and CEO.  

WESTERN PACIFIC: Nets $5.4 Million In Sale of Jet
Western Pacific Airlines tried to negotiate a $20 million-
plus airplane sale with four potential buyers in the span of
two hours. In the end, the airline gained $20.9 million,
agreeing to sell the one jet it owns - a Boeing 737-300 - to
Sterling European Airlines, and gaining some semblance of
financial stability for the next month.

WestPac also agreed to lease the jet back from Sterling for
$260,000 per month for at least 30 days. With the equity
WestPac has in the jet, the airline will receive about $5.4
million in cash from the sale. Of that, up to $1.2 million
will go toward replenishing a collateral account set up to
secure a loan from WestPac backers. The deal is scheduled to
close no later than Friday.

WestPac had agreed to sell the jet outright to another group
late last week for $20.4 million. But the airline wanted to
entertain other offers, and brokered an extension on the
sale from U.S. Bankruptcy Court Judge Sidney Brooks until

Those offers came from three different groups, including
Sterling, a charter carrier based in Copenhagen, Denmark.
One of the potential buyers - Babcock & Brown, which already
leases two jets to WestPac - offered a high bid of $21.2
million for the jet, but had no representatives in the
courtroom when the hearing began. Judge Brooks wouldn't
allow the bid, citing a clause in WestPac's motion that said
all bids must be made in person.  And even after Babcock's
attorney arrived during a recess, Brooks, who has generally
ruled in favor of requests that would help WestPac, wouldn't
allow the bid. After the auction, WestPac Chief Executive
Robert Peiser promised proceedings could be even more
chaotic next week, when the airline sells the buying rights
to at least one of the two new 737s it has ordered from
Boeing. One plane is scheduled to arrive in December;
another is due late in 1998.

The three groups who walked away from Monday's sale empty-
handed are expected to make bids on the Boeing jet due in
December. That could net WestPac another $1 million to $2
million.  Meanwhile, in a deal made last year, negotiations
continue on the lease of a used 737 to be delivered next
month, WestPac officials said. WestPac officials said that
with last week's jet sale, the airline has enough operating
capital to make it at least through the end of November.
Peiser, ever upbeat, continues to say that revenues are
stronger than projected going into the bankruptcy earlier
this month.

On December 4,  roughly $9 million is owed to several
companies that lease jets to WestPac. Another $4 million to
$5 million will be due in late December. Peiser said he is
still looking for outside investors to take financial
control of the company and see WestPac through the
bankruptcy. He also said WestPac might try to renegotiate
the airline leases before Dec. 4, offering to pay higher
monthly lease payments in exchange for payment deferrals,
for example.

In other rulings Monday, Judge Brooks ruled that WestPac
should not be forced to decide immediately whether it wants
to continue its contract for employee health benefits with
Employer's Health Insurance Co. The insurance company argued
that WestPac owes it about $700,000 in premiums,including
premiums the airline collected from employees through
payroll deductions but never remitted to the insurance

Brooks said that a final hearing will be held after next
Monday - the day WestPac must make a $175,000 payment to
Employer's Health for benefits in November. Presumably, if
WestPac doesn't make that payment, the judge may force the
airline to decide if it wants to terminate the insurance
contract. Airline officials said that won't happen,
promising that the payment will be made. "Assuming we make a
payment, which we will, employee benefits will continue
uninterrupted," said Glenn Goldberg, WestPac vice president
of human resources.


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