TCR_Public/971106.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, November 6, 1997, Vol. 1, No. 53

                    Headlines  

ELDER BEERMAN: Free of Hostile Takeover  
FLAGSTAR: Motion For Prepackaged Plan
FLAGSTAR: Order Extending Holdings Exclusivity Period  
HARRAH'S JAZZ: Harrah's Entertainment Supports Plan
KIA: Creditors Appoint New Manager  

KIA: Resumes Production
PUDGIE'S CHICKEN: Signs Deal With North Fork Bank
SANYO: Stops Business Except Withdrawals
WESTERN PACIFIC: Sale To Sterling Approved

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ELDER BEERMAN: Free of Hostile Takeover
---------------------------------------
The Dayton Daily reported on November 4, 1997 that after  
quietly fighting a potential takeover for more than a year,  
Elder-Beerman Stores Corp. won a major victory late Thursday  
that will let the retailer emerge from bankruptcy free of  
hostile threats. The agreement prevents Carson Pirie Scott  
and Proffitt's from attempting a takeover of the Moraine-
based chain at least until Jan. 31, 1999.


FLAGSTAR: Motion For Prepackaged Plan
-------------------------------------
The debtors have informed the court that every impaired
class except for the 10% noteholders in Class 6 voted to
accept the prepackaged plan.  Because Class 6 voted to
reject the Prepackage Plan, the debtors request that the
court utilize the "cram-down" provision of the bankruptcy
code to confirm the plan over the objection of the 10%
noteholders.


FLAGSTAR: Order Extending Holdings Exclusivity Period
-----------------------------------------------------
The Bankruptcy Court, District of South Carolina has entered  
an order extending Holdings exclusivity period until  
November 10, 1997 and to solicit acceptances thereof until  
February 9, 1998.


HARRAH’S JAZZ: Harrah's Entertainment Supports Plan
------------------------------------------------
Harrah's Entertainment, Inc. today announced its support of  
a proposed plan of reorganization for the New Orleans land-
based casino.

In exchange for improved financial flexibility in the plan  
which helps the project's long-term success, Harrah's  
Entertainment (HET) is prepared to provide a guarantee to  
the state for the tax minimum payment of $100 million.
In exchange for the guarantee, certain financial  
considerations have been included in the plan that improve  
the liquidity of the project, particularly in the critical  
early years.

HET is pleased that the plan, which distributes the  
financial risk of the project equitably among all of the  
debt and equity participants, has been endorsed by the  
Louisiana Governor, Mike Foster.

"Harrah's Entertainment is pleased that an agreement has  
been reached on a plan that should satisfy the state's  
requirements and we can again move this project forward,"  
stated Colin Reed, executive vice president and chief  
financial officer of Harrah's Entertainment.  "The plan we  
are proposing is fundamentally different than what was  
earlier proposed and now offers a fair and equitable  
sharing of the risks and rewards in the project.  All along,  
Harrah's Entertainment said it would only participate in the  
project if it felt the financial obligations of our company  
were appropriate for our upside potential, and that Harrah's  
Entertainment would not be unduly burdened with risk that  
was not commensurate with risk and concessions by other  
parties who stand to benefit from a successful casino."

Under the proposed plan, HET will provide a guarantee that  
assures payment of $100 million for the first fiscal year in  
which the casino operates.  The guarantee renews year by  
year until the completion of approximately five years  
of operations.

According to Reed, HET has negotiated a number of  
significant changes to other terms of the project that  
reduce the downside risks to the project and to  
HET, that financially reward HET for the additional risk,  
that provide substantially more flexibility for the project,  
and that greatly improve the overall liquidity of the  
project, particularly in the critical early years.
HET will provide additional debtor in possession (DIP)  
financing for the project, estimated at $9 million, to carry  
the project through bankruptcy consummation.  Each month's  
DIP loan is contingent upon specific milestones being  
reached in the process within certain time parameters,  
including such milestones as various state, city and  
bondholder approvals and endorsements.

Total expenditures anticipated to complete the project have  
risen by $30 million to $306 million, driven by costs  
associated with the additional project delays.  HET's equity  
will be $75 million in cash, of which $30 million has  
been funded to date through DIP loans and, in addition, HET  
will guarantee $125 million of debt.

Also, HET will guarantee a standby working capital loan of  
$25 million and provide a $10 million subordinated loan.  As  
stated previously, HET will have a further guarantee of $100  
million to the state for the minimum annual tax. This  
$100 million is effectively reduced by 1/365th with each  
daily payment to the state, and therefore HET's potential  
liability is reduced with each daily payment.  In addition,  
the $25 million working capital loan may be used to help  
pay the daily tax payments if needed.

Other funding necessary to complete the project, estimated  
at $96 million, is to be provided by banks and underwriters  
and is not to be guaranteed by HET. The plan also  
anticipates releases of litigation claims by the parties  
involved in the project. Completion of this proposal is  
subject to numerous approvals.

Based upon these developments, Harrah's Jazz intends to  
request the Bankruptcy Court overseeing its reorganization  
to deny or postpone any consideration of a motion to convert  
the proceedings into a Chapter 7 liquidation which was  
previously filed by the United States Trustee.

Louisiana Gov. Mike Foster has approved a rescue plan to  
complete construction of the troubled land- based casino in  
New Orleans and open it for business, if state lawmakers  
approve.

Foster says the new plan guarantees the state an annual  
payment of $100 million, but says the final decision is up  
to the legislature. Foster says it is a plan and a guarantee  
any bank would accept.

The plan now goes to the State Gambling Board and a  
legislative committee for review.  Meanwhile, the unfinished  
100,000-square-foot casino building sits half-finished on  
Canal Street.


KIA: Creditors Appoint New Manager
----------------------------------
Creditors of Kia Motors have named an official from Korea  
Development Bank to reschedule debts topping $10 billion and  
lead a comeback after strikes and funding shortfalls  
silenced assembly lines.  Kim Je-kwon ("KEEM Jeh-kwahn"), an  
informations systems manager from the state-run bank, takes  
immediate control of a 12-person team supervising funding  
for the debt-ridden company.

The team must negotiate new funding, in part to honor  
promissory notes paid to subcontractors and suppliers.  Kim  
takes over as the government awaits a court decision on  
receivership sought by Kia creditors led by the Korea  
Development Bank.

The government plans to turn Kia into a state-run company by  
converting equity held by the state-run bank in Kia into a  
controling share interest.  Workers at Kia Motors and sister  
company Asia Motors launched an immediate protest strike  
when the plan was announced two weeks ago, in part because  
it also called for the selloff of Asia Motors.

The strike ended Monday following last week's resignation of  
Kia Motors president Kim Sun-hong, who held out against  
government pressure to step aside for three months.  Kia  
management and workers oppose the nationalization plan  
because they suspect it is an interim step toward selling  
the company to archrivals Hyundai, Daewoo or Samsung.  


KIA: Resumes Production
-------------------------
Kia Motors Corp., South Korea's second largest car
maker, resumed operations Wednesday, one day after a parts
shortage had forced a halt to production. Operations at Kia
Motors and its commercial vehicle arm, Asia Motors Corp.,
had been paralyzed by a 13-day strike until workers returned
to work Monday.

But production was suspended again Tuesday when tire
companies refused to supply their products until the car
makers repay debts of $50 million. On Wednesday, Hankook
Tire Co. and Kumho Tire Co. resumed supplies after Kia's
newly appointed managers promised to repay the debts as soon
as possible, Kia officials said.

With more than $10 billion in debt, Kia was declared near
bankrupt in July.  Last month, the government said it would
place Kia under court receivership, assume majority
ownership through a state-controlled bank and install a
temporary new management team.


PUDGIE'S CHICKEN:  Signs Deal With North Fork Bank
--------------------------------------------------
Pudgie's Chicken, Inc., an operator/franchisor of quick  
service takeout and delivery Pudgie's restaurants, announced  
today that it has executed an agreement with North Fork Bank  
to set aside up to one million dollars to finance capital  
improvement expenditures for qualified franchisees of  
Pudgie's Famous Chicken.

Steven Wasserman, Chief Executive Officer of Pudgie's said,  
"We are pleased to have executed this deal with North Fork  
Bank.  We believe this opportunity will provide our  
franchisees with the necessary capital to make improvements  
to update their restaurants and better compete with other  
concepts.  As we move forward, we expect to emerge from  
Chapter 11 shortly and at such time our franchisees will be  
in an even better position."

Pudgie's filed its Plan of Reorganization on October 3,  
1997, and a hearing is scheduled for November 5, 1997, when  
the Plan of Reorganization will be submitted to a vote by  
the Company's creditors and stockholders.   


SANYO: Stops Business Except Withdrawals
----------------------------------------
Sanyo Securities Co. announced  Tuesday it had obtained
court protection from its creditors and that it is giving up
on trying to free itself from a crushing debt burden.

Sanyo said it will stop all business operations except
customer withdrawals, and make "utmost efforts" to
restructure under the protection of the Tokyo District
Court, which will appoint an administrator.

Sanyo is the first prominent stockbroker to declare
bankruptcy in Japan’s postwar history. In the past, other
troubled brokerages have shut down without trying to
restructure under court protection, or merged with other
brokerages. Hiroshi Mitsuzuka, Finance Minister, appealed
for calm and pledged that customers' assets would be
safeguarded. He said the Government expected Sanyo's
three main creditor banks to maintain the brokerage's
operating liquidity.

Sanyo Securities has been in dire straits since being forced
to take over Y80 billion in non-performing assets from its
affiliated non-bank, Sanyo General Capital, and other
finance companies in 1994.

Under a restructuring plan, Sanyo Securities borrowed Y20
billion from Nippon Life Insurance and eight other life
insurers. The brokerage raised another Y20 billion by
allocating new shares to its main creditor banks - Bank of
Tokyo-Mitsubishi, Nippon Credit Bank, and Daiwa Bank - and
to Nomura Securities, one of its biggest shareholders.

The crunch came last Friday when the nine life insurance
companies refused the stockbroker's request for a further
extension of the repayment deadline on their Y20 billion in
subordinated loans. These are unsecured loans on which
repayment priority is secondary if the borrower goes under.
They can be counted as equity of the lender if the remaining
maturity period is more than a year.

When the nine insurers refused an extension, Sanyo
Securities' capital-to-risk ratio fell below 120 per cent,
raising doubt about its viability. It had already been hit
by falling commissions in Tokyo's slumping stock market and
by heavy investment in hi-tech trading centres.


WESTERN PACIFIC: Sale To Sterling Approved
------------------------------------------
The Bankruptcy Court, District of Colorado has authorized  
the sale of one Boeing 737-Y30 aircraft to Sterling European  
Airlines, a/k/a Sterling European Kommanditaktieselskab for  
$20, 900,000 less maintenance reserves held by the CIT  
Group/Equipment Financing, Inc.  The terms of the bid call  
for a sale and a short term lease of the Aircraft to Western  
Pacific and a right of first refusal in favor of Western  
Pacific in the event of a sale of the Aircraft by Sterling.

                        ---------

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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