TCR_Public/971128.MBX T R O U B L E D   C O M P A N Y   R E P O R T E R        
  Friday, November 28, 1997, Vol. 1, No. 68

ALPHASTAR TELEVISON: TV/COM Objects to Sale of Assets
ARROW TRANSPORTATION: Order Approving Auctioneer
CALIDO CHILE: Salsa Company Files for Chapter 11
CONFEDERATION TREASURY: Limited Bankruptcy Settlement

ERD WASTE: Court OKs Feldman Radin Accountants
HOUSE OF FABRICS: Sales Down - Seven Fewer Stores
KENETECH WINDPOWER: Seeks Time to Assume or Reject Leases
LIL'THINGS: All 13 Stores Commence Closing
PAYLESS CASHWAYS: New Stock Closes at $4.25

PAYLESS CASHWAYS: Court Denies Priority of Retirees' Claims
SEARCH CAPITAL: Automobile Credit Fund Settlement
SMITH TECHNOLOGY: Committee Objects to Bar Date
SMITH TECHNOLOGY: Committee Objects to Extension for Leases
STANDARD BRANDS: Court Approves Corimon Settlement

VAN LEUNEN'S: Stipulation and Order Allowing Claim of Bank


ALPHASTAR TELEVISON: TV/COM Objects to Sale of Assets
TV/COM International, Inc. objected to the motion of the
debtors, Alphastar Television Network, Inc. and Tee-Comm
Distribution, Inc., seeking court approval of the assets
purchase agreement and authorizing the sale of
substantially all of the debtors' assets and authorizing
the assumption of executory contracts and leases and
authorizing the debtors' entry into a management agreement.

TV/COM stated that while TV/COM waived its right of first
refusal with respect to the sale of certain assets to
Champion, it did not waive its rights as the protected
assets, and it did not waive its rights  with respect to
any other bidder or potential bidder.

ARROW TRANSPORTATION: Order Approving Auctioneer
The Court has entered an order approving the employment of
The Ash Organization, Inc., dba Wershow-Ash-Lewis as
auctioneer for the debtor, Arrow Transportation Co. of

CALIDO CHILE: Salsa Company Files for Chapter 11
The Kansas City Star reported on November 25, 1997 that
Calido Chile Traders Systems Inc., operators of the Calido
Chile Traders stores, has filed for Chapter 11 protection
in U.S. Bankruptcy Court in Kansas.  CCT Distribution Inc.,
a wholly owned subsidiary of Calido, also filed for Chapter
11 reorganization. CCT manufactures various product lines
sold by Calido.

Calido specializes in hot and spicy salsas and related
products. The two companies listed total consolidated
assets of $1.05 million and total liabilities of $710,000.

John Shannon, president of the Calido, said bad debt and
litigation issues were among the problems leading to the
filing. Chapter 11 allows the company to reorganize debts
while protecting it from creditors. Calido, which once had
six company-owned stores, is down to just one in St.
Louis. The company also has nine franchises and three
licensees. But other franchises that have been terminated
are still operating under the Calido name, part of the
litigation the company faces.

Calido has 11 employees at its retail store and Merriam

CONFEDERATION TREASURY: Limited Bankruptcy Settlement
As announced today in Toronto, a settlement of claims in
the Ontario bankruptcy of Confederation Treasury Services
Limited (CTSL) has been agreed to by KMPG Inc., the
Liquidator of Confederation Life Insurance Company in
Canada, by the Rehabilitator of Confederation Life in the
United States, and by UBS, financial advisor to holders of
Cdn.$l00 million 9.5% Eurobonds due 1997 and of 100 million
British pound sterling 9.5% Eurobonds due 1997 issued by
CTSL.  CTSL was placed under the jurisdiction of the
Canadian courts through filings under the Companies
Creditors' Arrangement Act (CCAA) in August 1994 and
subsequently under the Bankruptcy and Insolvency Act.

Under the terms of the settlement, CTSL will pay equal
amounts to the Arm's Length Creditors and to the U.S.
Rehabilitator.  The settlement is expected to result in an
aggregate distribution to Arm's Length Creditors of at
least Cdn.$369 million.  There will be a differential in
the relative distributions to be made to Eurobond holders
and to other Arm's Length Creditors arising from
certain aspects of a guaranty in favor of the Eurobonds
which was provided by Confederation Life Insurance Company,
parent of CTSL. After taking this differential into
account, as well as certain costs incurred for the
exclusive account of the Eurobond holders, it is estimated
that the net distribution to Eurobond holders will be not
less than 70% of the principal amount of their bond claims.  
Other Arm's Length Creditors are expected to realize
recoveries of an estimated 65-67% of the principal amount
of their claims.

The 70% net recovery expected to be realized by Eurobond
holders represents an improvement of some 43% over the
comparable net distribution they would have received under
the Plan of Compromise and Arrangement sponsored by the
court appointed Monitor in CTSL's earlier CCAA proceeding
in Ontario.

Based on the recommendation of UBS, that Plan was defeated
two years ago by over 90% in value of Arm's Length
Creditors casting a vote.

Noted Tom Sperry, managing director at UBS in New York, "In
aggregate dollar terms the total amount to be distributed
to all Arm's Length Creditors under the settlement is more
than Cdn.$100 million greater than under the rejected
Monitor's Plan, an increase of approximately 40% overall."  
He continued, "The 70% net dividend expected to be received
by Eurobond holders from CTSL's bankruptcy estate also
constitutes an increase in value on the order of 100%
compared to the secondary market trading price of the bonds
at the time the Arm's Length Creditors Committee was
organized by UBS in the fall of 1994."

The CTSL settlement is subject to certain conditions,
including U.S. and Canadian Court approval.  Agreement to
the terms of the settlement negotiated with the Canadian
Liquidator and U.S. Rehabilitator of Confederation Life by
UBS signifies UBS' endorsement of the terms and its intent
to recommend the settlement to Eurobond holders for
acceptance in a formal vote expected to take place in
January.  If approved, the settlement is expected to become
effective in less than 90 days, with distributions
scheduled to occur in February.

Consolidated Stainless Inc. (NASDAQ/NMS: "PIPE") today
announced that its board of directors has determined
that it is in the company's best interests to attempt to
renegotiate the terms of its indebtedness (currently
$19,300,000) to Mellon Bank, N.A. ("Mellon") that is
outstanding under the Loan and Security Agreement, by and
between the company and Mellon, dated March 10, 1997, as
amended.  If the company is not successful in renegotiating
the terms of this indebtedness, the company's board
of directors has resolved to consider filing a Chapter 11
Reorganization Petition with respect to the company under
the United States Bankruptcy Code in order to reorganize
and restructure the company's financial affairs.

ERD WASTE: Court OKs Feldman Radin Accountants
The court has authorized the debtor, ERD WASTE CORP., et
al., to employ and retain the firm of Feldman Radin & Co.,
P.C. to act as accountants to the debtors.

HOUSE OF FABRICS: Sales Down - Seven Fewer Stores
House of Fabrics, Inc. (Nasdaq: HFAB), today reported
financial results for the third fiscal quarter and nine
months ended October 31, 1997. For the three-month period,
the company reported a net loss of $481,000, equal to $0.09
per share, compared with net income of $520,000, or $0.10
per share, for the third quarter last year, the first
quarter the company emerged from bankruptcy.  Sales for the
third quarter totaled $61.5 million, compared with $69.9
million last year, reflecting seven fewer stores in
operation this year.

For the nine months ended October 31, 1997, the company
reported a net loss of $10.8 million, or $2.05 per share,
compared with net income of $64.1 million a year ago, which
included a one-time gain of $100.9 million on forgiveness
of debt in connection with the company's emergence from
Chapter 11 in August 1996. Results for the 1996 nine-month
period include six months of bankruptcy operations
("predecessor company") and three months of post bankruptcy
operations ("successor company").  Sales for the current
nine-month period amounted to $165.8 million versus $181.3
million a year ago, reflecting 7 fewer stores in operation.

"Sales were soft for the first two months of the quarter
but improved considerably for October," said Donald L.
Richey, president and chief executive officer.  "The gross
margin improvement for the quarter to 45.2% from 42.5% was
gratifying, and reflects the company's shift in strategy
away from deep storewide discounts, along with the benefits
of cost controls and other initiatives that have been put
into place."

During the third quarter, House of Fabrics completed the
final installation of its company-wide point-of-sale cash
register system, which provides sales information by item
and is permitting management to effectively monitor
individual store performance.  Richey added that the
company also strengthened its field and merchandising
organization and is continuing to receive support
from vendors.

Also during the quarter, House of Fabrics retained Los
Angeles investment banking firm F.M. Roberts & Company,
Inc. to advise it on financing and enhancing shareholder

KENETECH WINDPOWER: Seeks Time to Assume or Reject Leases
On December 15, 1997 a hearing will be held on the fourth
motion of Kenetech Windpower, Inc., fka U.S. Windpower,
Inc., debtor, for an Order extending the time within which
to assume or reject leases of real property.

The debtor is seeking an extension for an additional four
months, until May 1, 1998, the date by which KWI must
assume or reject the potential leases of nonresidential
real property.

LIL'THINGS: All 13 Stores Commence Closing
Starting November 26, 1997 all 13 stores of Lil' Things,
Inc. commenced closing.  Hilco/Great American Group a
leading retail advisory and finance firm, will manage the
closing of the remaining Lil' Things stores.  Hilco/Great
American Group was assigned the management of the closing
stores by a federal bankruptcy court. Lil' Thing, Inc. is a
Dallas based chain of 13 superstores specializing in
children's products.

According to Harvey M. Yellen, Hilco/Great American Group
executive vice president, the assignment involves the
chain's entire inventory of children's apparel, furniture
and toys with a retail value of more than $16 million.
The stores are located in Arizona, California, Colorado,
and Texas.  The going out of business sales will continue
until all the merchandise is sold.

PAYLESS CASHWAYS: Court Denies Priority of Retirees' Claims
Judge Arthur Federman wrote a Memorandum Opinion with
respect to the classification of the claims of nine
retirees holding claims scheduled by the debtor in the
amount of $6,497,021.48.

The court was asked to determine whether the claims of the
retirees fit within the definition of Indebtedness to which
certain Senior Subordinate Notes of Payless would be
subordinated in priority to the retirees' claims.
The analysis of the court focused on the definition of
Indebtedness, and the definition of Senior Indebtedness.
The court concludes that a  plain reading of the operative
language indicates that the claimants cannot claim senior
status based on that provision, sine it refers to either a
conditional sale or other title retention agreements.  
Therefore, the claimants are not entitled to claim its

The contract providing the basis of the retirees' claims
used archaic boilerplate language, and the evidence offered
indicated that the definition of the Indebtedness was not
negotiated at all. Since there was no evidence of intent,
the claimants could have used industry practice as
evidence, but did not.  Ultimately, the court found that
the retirees, claiming that they were entitled to treatment
superior to other creditors, did not meet the burden of
proving that entitlement.

PAYLESS CASHWAYS: New Stock Closes at $4.25
The Kansas City Star reported on November 26, 1997
that the "When-issued" stock in the new Payless Cashways
Inc. began trading this week, and it quickly established a
price range of $4.13 to $5.75 a share.

On Tuesday, it closed at $4.25, down from Monday's close of
$5.75. That decline came on only six trades totaling 48,500
shares. The largest of those trades was 25,000 shares.

Shareholders don't yet have possession of their new Payless
stock, but it's trading on what's called a when-issued
basis.  The delay in distribution of the stock is caused in
part by the logistics of having holders of the old Payless
stock exchange those shares for new ones.

On paper the new stock had been valued at about $9.20 a
share. But in actual trading, the price is established by
supply and demand.  Payless' new ticker symbol is PCSHV,
the "V" denoting the when-issued status of the stock. It is
now trading on the Nasdaq's bulletin board system.
Once it is no longer trading on a when-issued basis, the V
will be dropped and it will begin trading on Nasdaq's
National Market System. The listing then will
be carried in the stock tables of The Kansas City Star's
business section.

Meanwhile, trading in the old Payless stock continues to be
active. On Tuesday more than a million shares changed hands
with the stock closing at 8.5 cents a share.

SEARCH CAPITAL: Automobile Credit Fund Settlement
A hearing will be held on December 15, 1997 to consider the
motion of Thomas C. Given, Litigation Trustee, for the
approval of a global settlement of claims against Search
Capital Group, Inc. and related parties, and for approval
of the allocation of the settlement proceeds among the Auto
Credit Noteholders.

Under the proposed settlement terms, all Noteholders who
bought notes from the first 5 Auto Credit companies will
receive 10.75% of their remaining damages, after accounting
for cash, stock and Warrants delivered or promised under
the Search/Auto Credit Plan.

All Noteholders who bought Notes from the last 3 auto
credit companies will receive 21.50% of their remaining
damages, after accounting for the amount of cash, stock,
and Warrants delivered or promised under the Search/Auto
Credit Plan.

Noteholders who opted out of the Litigation Trust and who
exercise their right to opt out of the settlement of the
Mississippi Action will only receive 10.75% of their
remaining damages.

All noteholders who chose the "Search Equity Option" under
the plan will receive additional shares of Search common
stock if the settlement is approved.  All Noteholders who
chose the "Collateral Option" under the plan will receive

The total amount of cash and stock to be distributed to
Noteholders is about $2,080,000.

In connection with the global settlement, the Trustee is
also asking for approval of payment of $262,500 in stock
and $237,500 in cash to counsel for the Mississippi
plaintiffs.  Those fees and the global settlement will also
be subject to approval by the Mississippi court.

SMITH TECHNOLOGY: Committee Objects to Bar Date
The Official Unsecured Creditors Committee has objected to
the motion of Smith Technology Corporation, et al., debtors
for entry of an order establishing a bar date for filing
proofs of claims.

According to the Committee, establishing a Bar Date at this
time is premature.  None of the debtors have filed any
schedules or statements of financial affairs and thus
creditors cannot determine whether their respective claims
will be scheduled at all or scheduled as disputed by any of
the debtors.  The Committee also objects to the debtors'
counsel acting as the claims processing agent.  

SMITH TECHNOLOGY: Committee Objects to Extension for Leases
The Official Unsecured Creditors Committee objected to the
motion of the debtors, Smith Technology Corporation, et
al., seeking an extension of time in which the debtors must
assume or reject unexpired leases of nonresidential real

The Committee objects to an indefinite extension of time,
but would approve of an additional 60 day period, through
and including February 5, 1998.

STANDARD BRANDS: Court Approves Corimon Settlement
The Court entered an order approving the settlement between
Standard Brands Paint Co., a California corporation,
Standard Brands Paint Company, a Delaware corporation,
Major Paint Company, a California corporation and Corimon

The agreement provides that all of the Corimon claims shall
be treated as general pre-petition unsecured claims that
are subordinated to the payment of all priority expenses
allowed under the bankruptcy code, including fees and
expenses (not to exceed $200,000) incurred by a Creditor
Trust established for creditors and interest holders.

The first $300,000 to be received by the Creditor Trust
shall be distributed to Corimon.  After all other unsecured
creditors of the estates have received distributions from
the Creditor Trust equal to 25% of their allowed unsecured
claims, Corimon shall receive the next $300,000.

After the next $500,000 shall be distributed to creditors
voting in favor of the Chapter 11 plan (on a pro rata basis
of their allowed claim), Corimon will receive a special pro
rata recovery of $175,000, subject to adjustment by a set

After Releasing Creditors recive 50% of their allowed
claims, Corimon shall receive an amount equal to 50% of the
next distributions otherwise available to unsecured
creditors from the Creditor Trust subject to certain
provisions, and

After Releasing Creditors receive 75% of their allowed
claims, Corimon shall receive 66 2/3% of the next
distribution subject to certain provisions

The Corimon Claims consist of:

Corimon's post-petition claim of $3.1 million.

Claims for approximately $1 million in claims for sums
certain, and claims held by Corimon to the extent of
amounts paid by Corimon before or after the Effective Date
of the agreement are $5.7 million.
All other claims are listed as filed in the proofs of

VAN LEUNEN'S: Stipulation Allowing Claim of Bank
The debtor, Van Leunen's Inc. d/b/a All About Sports has
filed a motion for entry of Stipulation and Agreed Order
allowing the secured claim of The Provident Bank and
Payment in full.

The motion provides that the debtor, the Committee, The
Provident Bank and the court agree that Provident Bank's
secured claim should be allowed in the amount of
$16,846,225.20 and that this claim has been paid in full.

The debtor paid to The Provident Bank the proceeds of the
sale of its inventory and other property against which
Provident asserted a lien, security interest or mortgage in
partial satisfaction of the bank's secured claim.  The
debtor paid the remaining balance due Provident from the
sale of its real property located in Amelia, Ohio.

The debtor and the Committee reviewed and approved the
amount of Provident's secured claim.  The letters of credit
that had been outstanding were terminated without being

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