TCR_Public/971103.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, November 3, 1997 Vol. 1, No. 50



BRADLEES: $51M In Cash Freed Up
COUNTY SEAT: Emerges from Chapter 11
DOW CORNING: Court Approves Insurance Compromise
ERD WASTE: Seeks To Employ Executive Sounding Board
GUY ATKINSON: Deadline For Filing Proofs of Claim

HARRAH’S JAZZ: Order For Use of Cash Collateral
KIA: Assets Frozen
MARVEL: Files Multi-Count Lawsuit
MARVEL: Toy Biz Labels Lawsuit 'Act of Desperation'
OLD AMERICA: Period Extended To Assume or Reject Leases

PAYLESS CASHWAYS:  Trial For Retirees
WESTERN PACIFIC: Committee Seeks Consultants

BRADLEES: $51M In Cash Freed Up
The American Banker reported on October 30, 1997 that
Bradlees Inc. has won court approval to increase the amount
of cash  available under its $200 million loan from Chase
Manhattan Corp.

Bankruptcy Judge Burton Lifland approved the revision
Wednesday, giving  the discount retailer an extra $51
million to buy merchandise for  Christmas.

Braintree, Massachusetts-based Bradlees, which entered
Chapter 11 in 1995, said  it needed the cash after sales
fell short of projections and vendors became concerned about
shipping on credit.

The loan amendment, which gives Chase a $250,000 fee,
expires Jan. 31.  Bradlees has until Feb. 2 to
file a plan to exit bankruptcy proceedings.

COUNTY SEAT: Emerges from Chapter 11
On October 30, 1997 County Seat Stores, Inc. announced
that on October 29, 1997 it consummated its plan of
reorganization and emerged from  bankruptcy.  The plan,
which had been supported by more than eighty-eight
percent of County Seat's creditors casting votes, was
confirmed by the United States Bankruptcy Court for the
District of Delaware on October 1, 1997.

Under the plan, holders of general unsecured claims against
County Seat will receive 100% of the new common stock of
County Seat, subject to warrants issued to holders of old
preferred stock and County Seat's management.

In  consummating the plan, County Seat entered into a $115
million revolving credit facility and issued senior notes
having an aggregate principal amount of $85 million.  Monies
from these transactions will be used by County Seat to
refinance existing debt, make certain payments required by
the plan and for general working capital purposes.

Since its bankruptcy filing, County Seat has, under the
direction of Sam Forman, its new President and Chief
Executive Officer, redirected its merchandising, buying and
operational efforts.  In particular, County Seat has
implemented a strategy emphasizing value-oriented, private
label casual apparel which yields significantly higher
profit margins than brand name merchandise.  

The new Board of Directors of County Seat consists of Sam
Forman, Brett D. Forman, senior Vice President of Real
Estate and Corporate Development, and three outside

DOW CORNING: Court Approves Insurance Compromise
The Stipulation and Agreement of Dow Corning Corporation and
the Official Committee of Tort Claimants was approved by the

The Agreement provides that Dow Corning Corporation will not
seek or support disbursement of insurance settlement
proceeds being held prior to confirmation of a plan of
reorganization.  And that Dow Corning  will use its best
efforts to preserve such insurance proceeds to fund such a

Dow Corning may take steps to determine the rights to
insurance settlement proceeds prior to confirmation of a
plan as long as such steps do not cause any disbursement of
insurance settlement proceeds prior to confirmation.  Dow
Corning has accessed the insurance policies that are the
subject of the buy-out insurance settlement approved by or
pending before the court to the exclusion of any claims to
the insurance settlement proceeds of any other insured under
any of the subject policies.

Dow Corning retains the right to enter into compromises
of disputes over entitlement to any of the insurance
settlement proceeds and to seek court approval of such
compromises after notice and a hearing.

The Committee may oppose or appeal  or attempt to prevent
disbursement of any such compromises until final.

ERD WASTE: Seeks To Employ Executive Sounding Board
ERD Waste Corp. et al. applied to the Court for an order
appointing Executive Sounding Board Associates Inc. (ESBA)
its financial advisors.  The debtors have paid ESBA a
retainer for post-petition services in the amount of

GUY ATKINSON: Deadline For Filing Proofs of Claim
The United States Bankruptcy Court for the Northern District
of California has ordered that December 15, 1997 shall be
the deadline for all entities to file claims that arose or
are deemed to have arisen prior to August 10, 1997 against
Guy F. Atkinson Company of California, Guy F. Atkinson
Company, and Guy F. Holdings, Ltd.,

HARRAH’S JAZZ: Order For Use of Cash Collateral
Harrah’s Jazz Company, Harrah’s Operating Company, Inc., the
Bondholders Committee and Norwest Bank Minnesota, N.A., as
Successor Indenture Trustee and Successor Collateral Agent
to FNBC stipulate and agree to the extension of time and
additional uses of cash collateral and DIP loan proceeds for
expenses paid or incurred after April 22, 1996.  

The Court has entered an order authorizing the debtor to use
cash collateral other than the Minimum Cash Reserve as
defined in the Final DIP Order and loan proceeds for
expenses payable from October 1-October 31, 1997.
The budgeted expenditures for October are based on the
debtor’s anticipated receipt of business interruption
insurance proceeds during October in the amount of
$1,391,152.  If said anticipated insurance proceeds are not
timely received in full, debtor will not have sufficient
funds to make all of the expenditures in full as set forth
in its budget.  

KIA: Assets Frozen
A Seoul court on Friday ordered all assets of troubled Kia
Motors Corp. frozen, clearing the way for court receivership
being sought by its creditors.

The Seoul Civil Court also issued the same order for Kia's
commercial vehicle arm, Asia Motors Corp. which also is in
heavy debt.  The decision is expected to end a prolonged
battle between the nation's No. 2 car maker and its creditor
banks. The banks has said they would provide bailout loans
only when court receivership was accepted.

But Kia had demanded a special court protection that allows
a firm to retain its current management while seeking to
reschedule its debt. Court receivership means new management
takes over.  In Friday's ruling, the court froze all assets
of the two financially troubled car makers until it appoints
new managers after consulting with creditors.

Hours after the ruling, Korea Development bank and other
major creditors announced an initial 490 billion won (dlrs
516 million) bailout loan package for Kia.  But the court
decision may anger thousands of Kia workers who have been on
strike since last Wednesday protesting the creditors'
application for court receivership.

They feared that the banks would eventually sell their
company to a third party that will lay off workers and
curtail union activities. Samsung, the nation's
largest conglomerate, is reportedly interested in taking
over Kia.

Kia, the nation's eighth largest conglomerate, was declared
near bankrupt in July with dlrs 10 billion in debt.
Last week, the government intervened and said it would
support court receivership for Kia, assume majority
ownership through a state-controlled bank
and install a temporary new management team.

MARVEL: Files Multi-Count Lawsuit
Marvel Entertainment Group announced that it has filed a
multi-count complaint in the U.S. District Court in Delaware
against Ronald Perelman, Chase and other banks, and Toy
Biz's principal shareholders Avi Arad and Isaac Perlmutter
alleging responsibility for Marvel's financial collapse.  
Also named in the complaint is New York fund manager Mark
Dickstein of Dickstein Partners.  Marvel is currently under
Chapter 11 bankruptcy protection commenced by former
management, under the direction of Perelman and his

The lawsuit seeks to allow Marvel to take control of the Toy
Biz Board of Directors, to strip the banks of their
collateral and to otherwise subordinate the banks'claims,
and to assess money damages against Perelman and others
based on an alleged improper and collusive scheme.  
Simultaneous with the lawsuit filing, Marvel -- which owns
approximately 78% of the voting shares of Toy Biz -- filed
motions for a temporary restraining order ("TRO") to prevent
the purported Toy Biz Board from taking any further action
and, separately, for removal of the Marvel Chapter 11
bankruptcy case to the U.S. District Court in Delaware.  

Marvel's Chairman of the Board, Carl C. Icahn, stated,
"While we did not want to resort to litigation, we felt that
it was imperative that we stop Toy Biz's improper actions
and resolve other uncertainties that are hovering over our
Company in order to stop the current downward spiral."  
Icahn added, "We feared that the exodus of personnel that
Marvel has suffered since rumors of Toy Biz's purported
merger proposal surfaced would continue unless we took this
decisive action to address past improper conduct and to
enable Marvel to move toward a reorganization plan that will
allow us to emerge from Chapter 11 and restore this great

The complaint alleges, among other things, that Perelman,
with the active cooperation of his affiliates, improperly
transferred Marvel's toy licensing rights to Toy Biz in
1993, over-leveraged Marvel's parent holding companies,
and undertook a number of ill-fated and expensive
acquisitions that were detrimental to the Company.  It also
stated that he pledged the Company's assets to support
previously unsecured loans and orchestrated an unwarranted
and collusive series of bankruptcy filings in an effort to
maintain control and economic ownership of Marvel.  

The complaint further alleges that Chase, in its capacity as
agent bank for a series of bank loans, lent Perelman
material assistance in undertaking a series of collusive and
improper activities designed to injure Marvel's estate.  
Marvel asserts that, as a consequence of Chase's improper
conduct, the Court should strip the banks of their secured
status and otherwise equitably subordinate the banks'
estimated $710 million in loans.  The lawsuit also seeks
a determination that Toy Biz' recently announced plan to
merge Marvel and Toy Biz was unauthorized by Toy Biz'
rightful board and, therefore, a nullity. Marvel's claims
against Dickstein center around his alleged improper
interference with the recently announced settlement among
Marvel and the banks.

Marvel said the improper conduct of the defendants makes the
filing of this lawsuit critical to its continuing efforts to
save the Company from liquidation.  The complaint also
alleges that the defendants have not only committed
egregious acts against the Company, but have consistently
resisted good faith and reasonable efforts to resolve
disputes and put Marvel on a track to emerge from
bankruptcy.  Most recently, Marvel, the standby purchasers,
and Chase entered into a formal settlement agreement, but
Chase failed to deliver the necessary two-thirds vote for
approval.  The standby purchasers had already committed $385
million in cash and deposited the funds into an escrow
account, based on Marvel's understanding that Chase, as
agent bank, would deliver the requisite bank syndicate

MARVEL: Toy Biz Labels Lawsuit 'Act of Desperation'
Toy Biz Inc. responded to Marvel Entertainment Group's
lawsuit against the Company, by issuing the following

Marvel's lawsuit against Toy Biz is without merit and
clearly an act of desperation as the Toy Biz plan of
reorganization for Marvel gains more support from Marvel's
senior secured lenders.  This shotgun litigation is not a
surprise, given Carl Icahn's history of bullying tactics.  
His reputation as a corporate terrorist has manifested
itself through Marvel's bankruptcy.

Joseph Ahearn, Toy Biz Chief Executive Officer and
President, said, "Marvel's filing of this suit was done not
to benefit its creditors and shareholders but to benefit a
disgruntled proposed buyer of Marvel - Mr. Icahn.  Now that
Mr. Icahn has found that he cannot buy the house he is
choosing to burn it down.  

While Mr. Icahn's press release says that the lawsuit 'is
critical' to save Marvel from liquidation, its true purpose
is to maintain Mr. Icahn's noose around the neck of this
beleaguered Chapter 11 debtor.  Given this act of self-
interest on the part of Mr. Icahn, Toy Biz would fully
support the appointment of a neutral bankruptcy trustee.  In
fact, that may be the only way to insure an orderly
resolution of this bankruptcy filing.  I find it hard to
understand how the members of Marvel's Board of Directors
who have a fiduciary responsibility to Marvel's secured
lenders could act in a manner which so clearly contradicts
the desire of a growing number of those lenders to support
a merger with Toy Biz.

"Regarding Marvel's equity ownership in Toy Biz, we have
repeatedly stated that Marvel simply has a 26.5% equity
ownership of Toy Biz.  Upon the change in control in Marvel,
the supervoting rights once associated with Marvel's stock

OLD AMERICA: Period Extended To Assume or Reject Leases
The Court has granted the motion of the debtors, Old America
Stores, Inc., Old America Wholesale, Inc., and Old America
Store, Inc., extending the time within which the debtors may
assume or reject unexpired leases to and including February
9, 1998

PAYLESS CASHWAYS:  Trial For Retirees
Certain retirees of Payless Cashways, Inc. filed a Motion to
Compel Separate Classification of Deferred Compensation
Claims, and the debtor filed an objection thereto, and
United States Trust Company of New York  as indenture
trustee filed an objection thereto.

The Court has ordered that the motion is considered an
objection to confirmation of the plan, and that there will
be a  pre-trial conference on November 7, 1997 and a trial
on November 13, 1997.

WESTERN PACIFIC: Committee Seeks Consultants
The Official Unsecured Creditors Committee in the Case of
Western Pacific Airlines, Inc. applied to the court to
employ Simat, Helliesen & Eichner, Inc. to act as airline
industry consultants for the Official Unsecured Creditor
Committee.  Simat, Helliesen & Eichner seek a security
retainer of $100,000.

If approved by the Court, the consultants will advise the
Committee of the debtor’s viability as a going concern, it
will assist the Committee in consulting with the debtor
concerning the administration of the debtor’s businesses
and assets, it will analyze the liquidation value of the
debtor, and consult and participate with the Committee in
analyzing any plan of reorganization or sale of the debtor’s

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
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Information contained herein is obtained from sources
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