TCR_Public/971215.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, December 15, 1997, Vol. 1, No. 79
    
                     Headlines

ALPHASTAR: Seeks Authority to Reject Leases
BRADLEES: Seeks Financing and 6-Month Exclusivity Extension
DALFORT AVIATION: Singapore Company To Buy Dalfort
DOW CORNING: Committees State Positions on Procedures
DOW CORNING: Seeks Compromise with Unione Italiane

DOW CORNING: Seeks Disallowance of Duplicative Claims
DOW CORNING: Granite State Wants Access to Proofs of Claim
FIDELITY BANCORP: Takes Charge On Reliance Acceptance Notes  
FOXMEYER: The Aftermath - McKesson's New Merger
GROSSMAN'S: Canton to Emerge By End of the Year

GROSSMAN'S: Seeks to Estimate Claims and Distribute Cash
HARVARD INDUSTRIES: Seeks to Close Auto Parts Plant
MAIDENFORM: Seeks to Reject Leases
MEDNET: Seek Time to Assume or Reject Lease
MIDCOM: Adequate Assurance to Sprint

MOLTEN METAL: Oak Ridge Operations Not Affected
MOUNTAIN AIR: Lost Ruling Could Mean Loss of 1 of 5 Planes
PEGASUS GOLD: Pegasus Gold Australia Files
TODAY'S MAN: Modifications to Plan

                               --------

ALPHASTAR: Seeks Authority to Reject Leases
-------------------------------------------
AlphaStar Television Network Inc. and Tee-Comm Distribution
Inc., debtors, seek authorization to reject certain
unexpired leases of non-residential real property.


On November 27, 1997, Champion Holding Company was the
purchaser of substantially all of the debtor's assets.
Due to the sale, the debtors will have no need for the
leases they are currently seeking authority to reject.  The
leases include a 10,804 square foot warehouse space in
Tanawanda, New York, a warehouse in Puerto Rico, and
warehouse storage in Waipahu, Hawaii.

BRADLEES: Seeks Financing and 6-Month Exclusivity Extension
-----------------------------------------------------------
Bradlees, Inc. which last month reported its first
profitable quarter since the end of fiscal 1994 today said
it has successfully negotiated a new $250 million financing
facility with a bank group led by BankBoston, N.A.
The new facility consists of an up to 18 month $250 million
debtor-in- possession (DIP) revolving facility and an up to
three year $250 million post-bankruptcy revolving credit
facility.  The facility, which is subject to bankruptcy
court approval, would provide Bradlees with increased
liquidity, as well as enhanced borrowing capacity,
acceptable financial covenants and lower financing costs.  
It would replace the current $200 million DIP facility, due
to expire June 28, 1998.

Additionally, Bradlees said it has filed a motion,
supported by the Official Committee of Unsecured Creditors,
seeking bankruptcy court approval of a six-month extension
through August 3, 1998 of its exclusive right to propose
and file a plan of reorganization.

The company also said it plans to close an additional
underperforming store in North Attleboro, Mass., in
February 1998 and sell the owned property to a
third party, subject to bankruptcy court approval.  
Bradlees had originally hoped to conclude the sale
agreement earlier this month in conjunction with a
December 2 announcement concerning the closing of five
stores.  Following the six closings, the company will
operate 103 stores in seven states.

Peter Thorner, Bradlees Chairman and Chief Executive
Officer, said, "We are pleased to report that Bradlees is
in its healthiest position since entering Chapter 11 and
the new $250 million facility will further strengthen our
financial position.  We intend to use the extended
exclusivity period to develop and file a consensual plan of
reorganization.

"Since the beginning of 1997, we have made significant
progress in stabilizing operations and implementing
numerous programs designed to allow the company to
successfully reorganize and emerge from bankruptcy.  We
have refocused our merchandising and marketing strategies,
built a team of seasoned retail executives, and delivered
significantly improved year-to-date operating results
compared with the same period last year.  We are focused on
three key merchandise lines moderately priced apparel for
the family, home goods and selective hardlines merchandise   
and on quality and fashion, especially in apparel and home
goods, as a way to differentiate Bradlees from the
competition."

Bradlees is a leading regional discount retailer with
annual total sales of more than $1.6 billion.


DALFORT AVIATION: Singapore Company To Buy Dalfort
---------------------------------------------------                  
The Fort Worth Star-Telegram reported on December 11, 1997
that Dalfort Aviation, one of the companies involved in the
legal fight over expanding flights at Dallas Love Field,
will be bought by Singapore Technologies Aerospace, a
spokeswoman for the Singapore-based aircraft maintenance
company said last night.

Shirley Tan, manager of corporate communications for
Singapore Technologies Aerospace, said in a telephone
interview that details of the transaction are not final,
"but we think we should be able to make a formal
announcement within a few days."

Tan said she expects no problems in closing the deal.
"There's just a few loose ends to be tied up," she said.
Dalfort owner Bruce Leadbetter, a founder and major backer
of Legend Airlines, which plans to offer long-haul jet
service from Love Field, was out of town and unavailable to
comment last night. Company spokesman Roger Myers would
neither confirm nor deny that the Love Field-based Dalfort
is up for sale.

Dalfort is the last remaining vestige of Braniff
International Airlines, which went bankrupt and ceased
operations in 1982. Braniff was acquired and restarted in
1984 by an investment group led by Chicago financier Jay
Pritzker. The reborn Braniff struggled and in 1988 the
Pritzker group sold the airline, which ultimately failed.
But the Pritzker group retained the maintenance division
and renamed it Dalfort. Leadbetter, a Dallas businessman
who had been a part of the Pritzker investment group,
bought Dalfort in 1993.


DOW CORNING: Committees State Positions on Procedures
-----------------------------------------------------
The Dow Corning News Issue #50, published by Bankruptcy
Creditors' Service, reported on the responses of the
Committees to the debtor's motion to establish procedures
applicable to claim objections.

The Committee of Unsecured Creditors registered its
position on the debtor's motion to establish procedures
applicable to claim objections. The Committee generally
supports the Debtor's Motion because it perceives, in the
light of the filing of more than 700,000 proofs of claim,
the need for establishment of procedures to govern the
claim objection process fairly and efficiently.

The Commercial Committee states that the majority of the
procedures contemplated by the Motion will facilitate that
goal.  However, the Commercial Committee raises some issues
it believes require some clarification and offers, as well,
some specific suggestions for modification of the
procedures proffered by the Debtors.  

In this connection, the Commercial Committee points out
that the Debtor does not detail how the claim objection
process it proposes would be coordinated with the
settlement process embodied in the Commercial Claims
Order.  In this Order, the Commercial Committee reserves
the right to seek, (by motion, stipulation or otherwise)
implementation of additional or alternative procedures
fixing the allowed amount of commercial claims in
advance of plan confirmation.  The Commercial Committee
wants the Commercial Claims Order expressly preserved in
any Order approving the Debtor's Motion.

Further, the Commercial Committee observes that while the
Debtor states that the requirements for Responses to the
Omnibus Implant Objection will not be governed by the claim
procedures it seeks, the Debtor does not similarly carve
out any exception with respect to the content of Responses
to Claim Objection No. 2 through Claim Objection No. 7.  It
is unclear, therefore, what procedures the Debtor envisions
governing Claim Objection Nos. 2 through 7; the Commercial
Committee wants the Debtor to clarify its intention
regarding these Claim Objections.

The Commercial Committee also suggests some minor
modifications to the procedures contemplated by the Debtor:

1.  Admission of Counsel: Claimants' counsel should be
admitted prior to or at the Initial Status Conference so
that counsel need not travel to Michigan prior to the
Initial Status Conference.

2.  Contents of Initial Response: The requirement that a
personal injury claimant make a statement in the Initial
Response as to his or her willingness to submit to the
"core" jurisdiction of the Bankruptcy Court possibly should
be eliminated as inappropriate.  The goal of this deletion
is to avoid the possibility that the issue of whether
allowance or disallowance of a personal injury tort claim
is or is not a core matter, may result in unnecessary
litigation about the nature and scope of a tort
claimant's jury trial right.

3.  Advanced Settings: To ensure that claimants have
sufficient time to respond to an objection, an objector
should be required to serve the notice of setting of the
Initial Conference and the objection at least 45
days prior to the Initial Conference; and the claimant
should have at least 30 days from service of the objection
and notice of the Initial Conference to file and serve a
Response.

4.  Style of Objections: The Daticon claim number to which
the objection relates should be identified in the caption
of the objection.  If the objection is an omnibus
objection, an addendum listing the Daticon
claim numbers should be affixed to the objection.

5.  Service of Discovery Pleadings: A Notice Party should
be served with all discovery pleadings related to a
contested claim(s) if the Notice Party informs the party or
parties seeking discovery, or respective counsel, of its
desire to be served with discovery pleadings.

The Tort Claimants' Committee presents its Principal
Objections to the Debtor's Motion to Establish Procedures
Applicable to Claim Objections:

1.  Establishing procedures for omnibus form objections to
personal injury and wrongful death claims is premature.  In
the context of this objection, the Tort Committee observes
that the Court has under advisement the issue of whether it
has the power to rule on the Debtor's omnibus
summary judgment motion on disease claims.  Since the
filing of this objection, however, Judge Spector has
decided that the summary judgment motion is a core
proceeding which the Bankruptcy Court may legally hear and
determine.

The Tort Committee, however, considered the possibility
that Judge Spector might decide he has such jurisdiction
before ruling on the Tort Committee's objection and states
that even if the Court decides it has such jurisdiction, it
still would be more prudent not to exercise such power at
this juncture of the case.  By such reasoning, the Tort
Committee argues, its position that it is premature to
establish procedures for the claim objections remains
intact.

2.  Administrative proceedings to address the Debtor's more
than 700,000 claim objections are potentially in conflict
with possibly similar proceedings before District Judges
Hood and Pointer.  Since the District Court is currently
evaluating procedures to be implemented for liquidation
of personal injury and wrongful death claims against the
Debtor's shareholders, the procedures regarding liquidation
of personal injury claims against the Debtor should be
coordinated with these matters.

3.  The MDL District Court is in the midst of proceedings
involving a National Science Panel.  Determinations there
may have some application to the liquidation of the
Debtor's tort liability.

It therefore seems pointless at this time, argues the Tort
Committee, to design and implement procedures for
liquidation of these claims without the involvement of the
Michigan District Court.

Nonetheless, the Tort Committee recognizes that the Court
may decide to grant the Debtor's premise that procedures
for handling claim objections are reasonable at this time.  
Some of more salient objections set forth by the Tort
Committee to the Debtor's procedures in their current form
are:

1.  The Debtor's procedures for Docketing and Administering
Claim Objections, generally, should be modified so that,
wherever logistically possible, they take into account and
attempt to remedy the geographical disadvantages and
difficulties experienced by many unrepresented or under-
financed, yet represented, claimants.

2.  The Debtor's proposal that it be permitted to file
piecemeal omnibus objections to claims, using "common
issues" as a basis to summarily resolve a vast number of
claims, should be modified.  Claims should not be
litigated piecemeal, thereby requiring under-financed
claimants to repeatedly respond and/or appear on multiple
occasions in a far away bankruptcy court to litigate the
merits of their claims:  Claims and defenses should be
tried in toto.

3.  Procedures should be implemented, when practicable, to
allow parties to appear at procedural hearings
telephonically, given the difficulties and expense of
attending multiple hearings before the bankruptcy court.  
Procedures of this sort are routine in many courts and
promote efficiency and fairness.

4.  Individual Claimants represented by a single attorney
could be heard collectively.

5.  A claims objection docket should be established by the
Clerk of the Court for each individual claim objection and
not for categories of claim objections.  Because the
pleadings and documents in any particular claim objection
may multiply as the litigation proceeds, it is essential
that separate dockets be maintained with respect to each
claim objection proceeding to insure the orderly
administration of the case and issues involved.  

6.  A preliminary audit of claimant addresses of record
should be implemented and a report made to the Court to
insure appropriate procedures have been followed by the
Claims Docketing Agent with respect to change of
address information.  The mass mailings to date indicate
that numerous claimants have moved; the Tort Committee has
received various individual reports that change of address
information was properly submitted yet notices were not
received.

7.  The initial response should simply admit or deny the
statement in the Omnibus Objection.  The contents of the
initial response required by the Debtor's procedures are
unduly burdensome and excessively stringent given what is
contemplated by the Federal Rules of Procedure.

8.  The Initial Report should be served on the Notice
Parties and upon the claimant as well.  The claimant should
have the opportunity to appear at the Initial Conference by
telephone in order to allow a fair opportunity to be heard
if substantive matters are addressed regarding procedures
or allowance of the claim.  Service of the proposed
scheduling order upon the claimants should be not less than
20 to 30 days before the Initial Conference.

9.  The Debtor's suggested mediations should be conducted
regionally at locations throughout the country in order to
minimize the difficulties and expense of travel.  A panel
of proposed mediators should be selected jointly by the
Debtors and the Committees.

10.  Before disallowance or reduction of a claim occurs on
the basis of failure to file a response, the Debtor should
first certify and submit proof of service upon the claimant
by registered or certified mail.  An affidavit of service
should be presented to the Court evidencing that
service has, in fact, been effected on a claimant in a
conclusive rather than presumptive basis.

11.  Adopting the general settlement procedures described
in the Commercial Claims Order is acceptable subject to
further review of the amounts which comprise the current
thresholds   The Tort Committee expresses its willingness
to discuss these thresholds with the Debtor and
other official committees in an attempt to reach a
resolution.

The Tort Committee concludes that the implementation of
procedures regarding adjudication of the personal injury
and wrongful death claims is premature.  However, to the
extent procedures are implemented, then these
modifications, among others, should be provided in order to
allow the claims to be processed in an orderly, equitable
manner.


DOW CORNING: Seeks Compromise with Unione Italiane
--------------------------------------------------
The Debtor explains that its insurance under a number of
excess liability insurance policies, purchased by the
Debtor and Dow Chemical from Unione Italiana Reinsurance
Company of America, entitle it, among other things, to
reimbursement of certain costs incurred in connection with
defending the Breast Implant Claims.

The Debtor and Unione disagree as to the extent of coverage
afforded by the Excess Policies for the Breast Implant
Claims.  Litigation ensued; and, in the Michigan Litigation
before Judge Colombo, Jr., the Debtor sought to recover
past expenditures for defending or satisfying Breast
Implant Claims.

The misrepresentation defense lodged by Unione and other
insurers to the effect that the Debtor intentionally or
innocently misrepresented or concealed material facts about
the risks of silicone breast implants was defeated,
resulting in judgment for the Debtor.  Unione and the other
insurers appealed.

The Debtor and Unione have reached an agreement to
compromise and settle their disputes.  The principal terms
of the Settlement Agreement, as summarized, are:

(a)Unione will pay the Debtor $1,440,000 in U.S. dollars
within 10 days after approval of the Settlement Agreement.

(b)In consideration of Unione's payment, the Debtor will
provide three releases:

  1.A release of Unione under the Policies with respect to     
Breast Implant Claims and claims resulting from other
implant devices;

  2.  A release of the products liability limits of the
Policies; and

  3.  a waiver of other claims arising out of the Breast
Implant Claims, including, e.g., consequential damages
claims.  This waiver releases Unione from other possible
claims not only by the Debtor but also by Dow Chemical and
other insureds (like certain implant surgeons).

(c)The Debtor will try to obtain from other settling
insurers their waivers of any contribution or other claims
such insurers may have against Unione with respect to
Breast Implant Claims.

(d)Unione will make payments under the Policies without
recourse to the Debtor or other insurers (to the extent
that other insurers release Unione).  Additionally, the
Debtor will reduce the amountof any judgment against other
excess insurers by the amount of  any contribution or
indemnity award against Unione by such other insurer.

(e)The Debtor will use its best efforts to include in any
plan of reorganization a channeling injunction to protect
Unione from additional third-party claims on policies
released pursuant to the settlement.

(f) Following approval of the Settlement Agreement, Unione
and the Debtor will file a stipulation of dismissal of
their claims against one another in the Michigan
Litigation.  


DOW CORNING: Seeks Disallowance of Duplicative Claims
-----------------------------------------------------
Issue #50 of the Dow Corning News, published by Bankruptcy
Creditors' Service reports that the Debtor is seeking
disallowance of implant claims that are duplicative of one
or more Implant Claims.  The Debtor explains that the
genesis of such duplication arises from a situation in
which the individual implant claimant filed a Supplemental
Proof of Claim which mistakenly duplicated
her/his individual Proof of Claim, rather than filing it
for a family member of the implant claimant.

Under the procedures for docketing claims followed by DSI,
implant recipients who filled out the Supplemental Proof of
Claim in this mistaken manner, and filed it, now have one
or more duplicate individual claim(s). Disallowance of such
Duplicate Supplemental Claims will rectify duplication

Disallowing the Duplicate Supplemental Claims will not in
any way impact the rights of the duplicate claim filers to
assert their surviving individual Implant Claim against the
Debtor.  To the extent that a disallowed Duplicate
Supplemental Claim contains information that is not
contained in the surviving Implant Claim, this information
will be treated as supplemental documentation to the
surviving Implant Claim.

TORT COMMITTEE'S RESPONSE

The Tort Committee, after evaluating the process by which
the Duplicate Supplemental Claims have been identified,
agrees that these procedures, generally, should have
correctly identified the duplicate claims.  And the
Tort Committee also agrees that the Duplicate Supplemental
Claims need to be combined with the surviving Implant
Claims as to any new information they may contain and/or
eliminated as to the duplicative information they
contain.

The Tort Committee does have, however, several procedural
objections to the manner in which the Debtor chooses to
eliminate duplicate claims.  The Debtor says it is
addressing the Tort Committee's concerns by agreeing that
disallowance of the Duplicate Supplemental Claims "shall
not waive or prejudice the positions of the Tort Committee
or any party with respect to pending or future claims other
[than] the identified Duplicate Supplemental
Claims regarding the issue of the bankruptcy court's
jurisdiction to adjudicate Implant Claims."

HEARING BEFORE JUDGE SPECTOR

During the course of a Hearing on the Debtor's Motion,
Judge Spector said that many of the individual claimants
who are objecting to the Debtor's attempt to disallow their
supplemental claim forms have requested that the
Judge protect their rights during the Hearing.  Judge
Spector said he is accepting that role; that he reviewed
the responses and is ready to consider each response which
seems to offer a valid defense one by one with
the Debtor's Counsel.  Moreover, Judge Spector criticized
the failure of appearance by individual claimants'
attorneys or their failure to withdraw their clients'
duplicative supplemental claims before the hearing date.

The Debtor's Counsel explained that 308 of the 32,000
supplemental claims which the Debtor seeks to disallow as
duplicative can be considered in a lump as it were.  These
308 supplemental claims were filed by Baxter and are
duplicative of the entries already entered on the Debtor's
Schedule.

Judge Spector wondered why the Debtor did not serve notice
on Baxter as to this duplication instead of alarming the
individual claimants concerning a matter that amounted to a
ministerial error.  Additionally, he told the Debtor's
counsel that the individual 308 claimants should receive
explanations concerning the nature of the duplication and
assurance that their claims remain intact.

In reviewing the remaining responses, Judge Spector
identified two errors in the Debtor's review of the
supplemental claims: one in which a husband
filed a supplemental claim for loss of consortium; and
another where the supplemental proof of claim was for the
child of the individual claimant.  In these instances,
Judge Spector overruled the Debtor's request for
disallowance of the supplemental claims.

Some of the responses raised issues requiring some
additional consideration.  For example, where the
information in the supplemental claim was not duplicative;
an instance being where a hospital filed a claim
for cost of implant removal.  Judge Spector ruled that a
hospital is not one of the entities entitled to file a
supplemental proof of claim; therefore the Debtor's
disallowance was sustained and only the primary
claim survived.

Judge Spector, in his desire to protect against trampling
on the claimants'rights, suggested that the granting of the
Debtor's Motion to Disallow could be qualified by the
statement that any claimant, within 28 days of
entry of the Court's Order, be permitted to present
evidence to the Court that what on its face appears to be
an improper duplication is something else that should be
accepted.  However, Judge Spector deferred to the
Debtor's Counsel, who said that the Debtor had already
considered this avenue and decided it was unnecessary.

Accordingly, Judge Spector Granted the Debtor's Motion,
subject to the exceptions articulated in Court.


DOW CORNING: Granite State Wants Access to Proofs of Claim
----------------------------------------------------------
Granite State Insurance Company wants authorization to
obtain access to all proofs of claim and related documents
and compilations of data arising from each Implant Claim in
which the Debtor asserts that Granite has any
obligation to provide a defense for or contribute to the
cost of defending such claim.

Granite and some other insurance companies provided certain
insurance coverage to the Debtor.  The Debtor asserts that
Granite and the other insurance companies are obligated
under these policies to provide the Debtor with defense
costs and/or a defense and/or indemnification arising
from the Debtor's financial exposure from Implant Claims,
particularly those Implant Claims arising from foreign
claimants residing outside of the United States and Canada.

Granite's access to the documents and data it considers
relevant for determining its obligations to the Debtor are
confidential under a Bar Order and a similar Blue Cross
Order.  Granite explains that it will maintain the
confidentiality of the documents to which it desires access
-- the Foreign Claims Implant Information --; that it and
the other similarly positioned insurance companies will use
such information only to assess their potential obligations
to the Debtor.

Granite further states that the Debtor, as well as the
Commercial and Physicians' Committees have consented to
access by Granite and the other insurance companies to the
relevant information for the limited purpose of
assessing their obligations and defenses.  The Tort
Committee has not contested this request, "at least not
yet."


FIDELITY BANCORP: Takes Charge On Reliance Acceptance Notes  
-----------------------------------------------------------
Fidelity Bancorp, Inc. (Nasdaq: FBCI) announced that it
took a one-time $3 million charge against earnings for the
fourth quarter and fiscal year ended September 30,1997 and
has restated its previously reported preliminary results of
operations.  In the announcement of its unaudited year-end
results, issued in a press release on October 20, 1997, the
Company reported net income was $3.9 million or $l.38 per
fully diluted share for the year ended September 30, 1997,
compared with $2.1 million or $0.72 per fully diluted share
in 1996. Restated, the Company's net income for 1997 was
$925,000 or $0.32 per fully diluted share.  Complete
financial statements are included with the Company's Form
10-K, filed today with the SEC.

The one-time, $3 million charge taken by the Company was
based on its determination that certain subordinated notes
held in its investment portfolio are other than temporarily
impaired and have no readily discernible market value.  The
notes were acquired by the Company in 1994 from Cole Taylor
Financial Group, Inc., when Cole Taylor was the parent
company for both a consumer finance company and a Chicago-
area bank.  Earlier this year, Cole Taylor's bank
subsidiary was "spun-off" to certain Cole Taylor
shareholders in exchange for stock and certain assets.  The
notes remained as obligations of the surviving company,
which is now known as Reliance Acceptance Group, Inc.
(RACC) and is the parent company for the consumer finance
company.

As reported in the Company's November 21, 1997 press
release, the notes have a par value and cost basis of $3
million, and were estimated to have a value of $2.25
million when the Company issued its October 20, 1997 press
release announcing preliminary earnings for the quarter and
fiscal year ended September 30, 1997.  At the time, this
reduction in value had not been charged against earnings
because, based on then available information and generally
accepted accounting principles, the notes were considered
to be temporarily impaired.

On November 14, 1997, RACC filed a Form 10-Q with the SEC
in which RACC reported, among other things, substantial
additions to its loan loss reserves, increasing
delinquencies and repossession losses, a severe decline in
its net interest margin, continuing defaults under senior
credit agreements, a lack of future funding sources, and
the imposition of substantial restrictions by senior
lenders.  In addition, RACC reported that it is seeking a
buyer and that bankruptcy is likely under certain
circumstances.  Duff & Phelps Credit Rating Co. thereafter
downgraded its rating on RACC's subordinated notes to CCC
(Triple C).

The Company has evaluated currently available information
about RACC's present circumstances and future prospects in
an effort to assess impairment and to place a value on the
notes in the context of a possible RACC liquidation, sale
and/or bankruptcy.  The Company has concluded that the
impairment is other than temporary, and that a complete
write-down of the notes is appropriate, because of RACC's
worsening condition, the fact that the notes are
subordinate to the senior debt and are structurally
subordinate to the other obligations of RACC's finance
company subsidiary, and the substantial uncertainties that
exist regarding ultimate realization of the asset.

According to Raymond S. Stolarczyk, the Company's chairman
and chief executive officer, "There is no reason to
believe, based upon currently available information, that
the Company will obtain any near term recovery on
the principal balance of the notes in the context of a
liquidation, sale and/or bankruptcy of RACC."  He added
that "a buyer for RACC has not surfaced, and RACC appears
to be in a liquidation mode now, having reported that it
has no present ability to originate new receivables, and is
limited to using its net cash flow to pay down its senior
lenders and to spending under a weekly budget
preapproved by its senior lenders."

"Under these circumstances," Stolarczyk said, "the Company
decided that the most appropriate course of action is to
assign no value to the notes, prepare a tax plan to realize
as much tax benefit from the charge as possible and work
with other subordinated debenture holders to closely
monitor developments concerning RACC.  We will also
continue to explore and pursue alternatives for
realizing a recovery on this investment," he said.

"Clearly we are disappointed that this investment has
blemished an otherwise record year," Stolarczyk added.  "In
any case, this is a very unique situation.  We initially
invested in a bank holding company and through events
beyond our control, we now have instead an investment in a
leveraged finance company.  I am confident that this event
will not affect our core operations or our ability to build
earnings and shareholder value for our investors."

Fidelity Bancorp, Inc. is the holding company for Fidelity
Federal Savings Bank, which provides retail banking
services through five full-service locations in Chicago,
Franklin Park and Schaumburg.  Fidelity's stock is traded
on the Nasdaq National Market System under the symbol
"FBCI."  


FOXMEYER: The Aftermath - McKesson's New Merger
-----------------------------------------------
The Investor's Business Daily reported on December 11, 1997
that McKesson Corp. is taking steps to ensure it remains
the nation's largest drug wholesaler. The company announced
a deal in September to buy No. 4 AmeriSource Health Corp.
for $1.72 billion in stock and assumption of AmeriSource's
$532.3 million in long-term debt.

The combined McKesson-AmeriSource would have more than $22
billion in annual sales from drugs, mostly in the U.S. That
would boost McKesson's share of the $64 billion drug
distribution market to 34% from 22%, says David Risinger of
Morgan Stanley, Dean Witter, Discovery & Co. The Federal
Trade Commission is reviewing the deal and expects to weigh
in by early next year. With or without the deal, McKesson
should fare well next year, says Lawrence Marsh of Salomon
Brothers Inc. Earnings gains would be 33% should the
AmeriSource deal go through and 25% if it gets rejected, he
says.

The proposed McKesson-AmeriSource merger came several weeks
after No. 3 Cardinal Health Inc. agreed in August to buy
No. 2 Bergen Brunswig Corp. for about $3 billion in stock
and assume $386 million in that company's debt. The
McKesson-AmeriSource deal would pre-empt Cardinal-
Brunswig's claim to the No. 1 distributor spot.  If the
Cardinal-Brunswig merger takes place, that combined company
would have 31% market share, Risinger says. The FTC is
reviewing the deal.  The motivation for both McKesson and
Cardinal is the same: get bigger to meet managed care's
demand to reduce costs. Both companies think bulk allows
them to deal on equal terms with ever larger drug suppliers
and clients.

McKesson, meanwhile, has sold several disparate businesses
that distracted management from focusing on key health-care
sales, Risinger says. The company, while reshuffling its
portfolio, continues to improve operations. It boosted
results at its core domestic drug distribution unit
during the second quarter ended Sept. 30 while digesting
FoxMeyer Drug Co. McKesson bought the assets of the
bankrupt drug distributor last year for $598 million.

The operating margin on drug distribution sales, excluding
revenues from FoxMeyer, grew to 1.92% in the quarter from
1.71% the year prior, Risinger says. At the same time, the
company boosted domestic drug sales by 18.5% year-
over-year, excluding FoxMeyer's contribution. FoxMeyer had
'96 sales of about $3.7 billion. McKesson's second-quarter
domestic drug sales were $3.54 billion, or 80% of total
revenue. Pharmacies accounted for about two-thirds of drug
purchases. Going forward, the company is poised to save
$120 million a year following the AmeriSource merger. Much
of that will come with the planned shutdown of 28
warehouses.

McKesson has generated consolidation-related savings
before. The company, through Sept. 30, had cut $38 million
of the $80 million in redundant costs tied to the purchase
of FoxMeyer. The rest will be gone by July, McKesson CEO
Mark Pulido recently said.  "We believe the merger with
AmeriSource should follow the same pattern as FoxMeyer with
significant earnings per share accretion and growth rate
acceleration," Risinger said. Analysts credit recent gains
to Pulido, who became president in May '96 and CEO this
April. Under him, McKesson has sold noncore businesses and
replaced them with complementary ones.

Pulido, former CEO of Sandoz Pharmaceuticals, "has
invigorated McKesson and has it on a clearly focused
strategy devoted to health- care supply management," said
Donald Spindel, an analyst with A.G. Edwards & Sons Inc.
Following the FoxMeyer purchase, McKesson bought General
Medical Inc. for about $775 million in February. General
Medical, with about $1.8 billion in annual sales, is one of
the nation's top suppliers of medical-surgical supplies.

McKesson's sales of noncore assets include:

   *  Millbrook Distribution Services Inc. and the AquaVend
vended water business, both in March '97 for book value.
Millbrook supplies food stores and other retailers with
general merchandise, health and beauty aids and specialty
food items.

   *  A 55% interest in Armor All Products Corp. to Clorox
Co. for $221.9 million in December 1996. Armor All makes
car and home-related finish protection products.

McKesson began its recent divestiture effort in November
'94 when it sold its PCS Health Systems unit, the
country's's largest third- party processor of prescription
claims, to Eli Lilly & Co.


GROSSMAN'S: Canton to Emerge By End of the Year
-----------------------------------------------
With the approval of Grossman's Inc.'s reorganization plan,
the bankruptcy court paved the way for the Canton building
supply chain to emerge from Chapter 11 protection by the
end of this year. Unsecured creditors of Grossman's with
qualified claims of more than $25,000 will be paid out of
an "unsecured recovery pool," plus they will get half the
stock in the reorganized company. Jeld-Wen Inc., a maker of
window and door products, is co-sponsor of the
reorganization plan and will provide $8.65 million for
distribution to unsecured creditors. A subsidiary of Wenco
Industries, Jeld-Wen will also provide funding for the
ongoing operation of Grossman's, taking ownership of the
other 50 percent stake in the company.

Grossman's, Jeld-Wen and the Official Committee of
Unsecured Creditors have filed a motion with the court to
make an initial 14 cent payout from the pool to qualified
unsecured creditors. Further payouts are possible, the
company said.  Dirck K. Iacobelli, interim vice president
and chief financial officer, said no further store closings
are planned, and it will continue to be business as
usual at remaining Grossman's outlets. Last year,
Grossman's fired some 1,600 workers and shuttered 60 full-
service retail stores. Facing a cash crunch, Grossman's
filed for bankruptcy protection in April.


GROSSMAN'S: Seeks to Estimate Claims and Distribute Cash
--------------------------------------------------------
Grossman's Inc., GRS Holding Company, Inc. and GRS Realty
Company, Inc., debtors filed a joint motion with Jeld-Wen
and the Official Creditors Committee to estimate Class 7
and Class 8 claims and to authorize a cash distribution of
14% to holders of allowed Class 8 claims and to approve a
cash reserve amount.

Based upon the claims processing efforts, it appears that
the total amount of allowed unsecured claims and allowed
convenience claims is likely to exceed $46.2 million.  
Accordingly, the movants have agreeed to cap payouts at
$8.645 million, pursuant to which all holders of Allowed
Class 8 Claims shall receive a pro rata share of an
unsecured recovery pool.

The movants are requesting that the court estimate that
Class 7 and 8 claims do not exceed the reserve amount of
$58.235 million and that the court authorize cash
distributions to holders of allowed Class 8 claims in the
amount equivalent to 14% of their allowed claims; and that
the court approve as reasonable the cash reserve amount
established for remaining distributions.

The debtors claim that this reserve mechanism has been
approved by other bankruptcy courts and will permit
creditors with fixed, liquidated, and undisputed claims to
receive a substantial portion of their pro rata share of
the unsecured recovery pool without waiting for the
complete resolution of all claim disputes.


HARVARD INDUSTRIES: Seeks to Close Auto Parts Plant
----------------------------------------------------    
Harvard Industries, Inc. announced it will seek the
approval of the U.S. Bankruptcy Court for the District
of Delaware to stop producing exterior rear view mirrors
and exterior door handles for the automobile industry and
close its manufacturing facility in Bolivar, Tenn.
An exact date for the closing of the facility, known as the
Harman plant, has not been set, but will probably be
sometime after February 1998, according to Richard T.
Dawson, Harvard's senior vice president for law and
administration.

"For the past two years, the Harman plant has experienced a
steady erosion of its business base," Dawson said.  "It is
unlikely that the base will improve significantly enough to
warrant continued operations.  We have tried to sell the
plant, but negotiations some of which continued until late
last week have failed to produce an acceptable deal."

Harvard Industries' customers in the automotive industry
will make arrangements to obtain rear view mirrors and door
handles from other suppliers, and Dawson said Harvard will
continue to supply the parts during that transition period,
a period expected to last little more than 90 days.
The future of the Harman facility has not been decided, but
Dawson said the company is negotiating with a company that
has interest in the building and equipment.  The company
would manufacture products unrelated to any products
made previously at the Harman plant, according to Dawson.

"At this time, there is no way of knowing whether those
negotiations will be fruitful," Dawson said.  "If a sale
can be negotiated, we do not know whether new operations at
the Harman plant will provide job opportunities for
the current work force." Harvard's Harman plant employs
approximately 385 workers. Harvard Industries, a major
producer of OEM automotive parts and accessories, filed for
protection under Chapter 11 of the U.S. Bankruptcy Code
last May. The company recently sold the Kingway material
handling division of its Kingston-Warren subsidiary to
Stanwich Acquisition Corp. for about $18 million.

The Harman plant closing and the Kingway sale are all part
of Harvard's evaluation of its non-core business elements,
Dawson said. "Harvard is continuing to look closely at its
operations and is committed to concentrating on the growth
possibilities of its core business," Dawson said.  "When
our restructuring is completed, Harvard Industries will
once again be a leader in the automotive OEM industry."

Harvard Industries, Inc. designs, develops and manufactures
a broad range of components for original equipment
manufacturers that produce cars and light trucks in North
America and abroad.


MAIDENFORM: Seeks to Reject Leases
----------------------------------
Maidenform Worldwide, Inc., Maidenform, Inc., and NCC
Industries, Inc., seek to reject certain leases of
nonresidential real property.  The debtors are parties to
approximately eight-nine unexpired leases of nonresidential
real property, eight relate to retail outlet stores and
nine are used as offices and for warehousing and
manufacturing.

After reviewing and analyzing the leases, the debtors close
sixteen of their outlet stores and distribution center.

Three additional outlet stores are of little or no value to
their estates.  Therefore, the debtors have determined in
their sound business judgment to close these stores and
reject the related leases.  The stores are located in
Tilton, New Hampshire, Worcester, Massachusetts and
Burlington, North Carolina.


MEDNET: Seek Time to Assume or Reject Lease
-------------------------------------------
Mednet, MPC Corporation, Medi-Mail, Inc. and Medi-Claim
Inc., debtors seek an order extending the time to assume or
reject a lease, "the Las Vegas lease" between Rocky
Mountain Bank Note Co., n/k/a John A. Harland and Medi-
mail, Inc. for property located in Las Vegas, Nevada.

The current deadline for assumption or rejection of the
lease is December 29, 1997.  The debtors seek to extend the
time for 60 days, through and including February 28, 1998.

The debtors state in support of their request that they
have formulated their Chapter 11 plan, however they are
uncertain whether they will continue to operate their
businesses out of the Las Vegas Property or another site.  
The debtors have made numerous leasehold improvements over
the years to the Las Vegas Property, and making a hasty
decision to assume or reject the Las Vegas Lease could
result in the loss of a valuable asset of the estate and
will provide a windfall to a lessor. All of the debtors'
operations are conducted out of its Las Vegas, Nevada
facility.  In addition, the debtors state that they have
been concentrating on negotiations with Bergen Brunswig
Drug Company and Foothill Capital Corporation concerning
post-petition financing and use of cash collateral.


MIDCOM: Parties and Court Agree on Payment to Sprint
------------------------------------------------------
On December 5, 1997, the court entered an order reflecting
the agreement of the parties to the debtor's proposal for
adequate assurance of payment to Sprint Communication
Company L.P.  the debtor, Midcom Communications, Inc. is a
reseller of Sprint long distance service. Just prior to the
filing, the debtor's monthly usage under the resale
agreement approximated $4 million.

As adequate assurance of paynment, Midcom shall pay to
Sprint weekly in advance the sum of $925,000, and Sprint
will determine the exact amount owed on the fifteenth of
each month.

The Committee has until December 12, 1997 to file a written
objection to this agreed order.

MOLTEN METAL: Oak Ridge Operations Not Affected
-----------------------------------------------      
The Knoxville News Sentinel reported on December 4, 1997
that Molten Metal Technology, which owns two waste-
processing plants in Oak Ridge, filed Wednesday for
bankruptcy protection in Boston as part of the company's
efforts to remedy an ailing financial condition. Michele
Perry, a Molten Metal spokeswoman, said there would be no
immediate impact on the Oak Ridge plants as a result of
Wednesday's action in Massachusetts.

The Oak Ridge facilities, which process and recycle
components from radioactive wastes, employ about 150
people. "It's business as usual in Oak Ridge," Perry said.
"Nothing has really changed." Molten Metal filed for
reorganization under Chapter 11 of the Federal Bankruptcy
Code. In a prepared statement, F. Gordon Bitter, the
company's chief executive officer, said, "We will continue
to operate our nuclear services business, and our priority
is to continue to offer the highest quality service to our
customers.

"The Chapter 11 filing will enable us to conserve cash
while continuing to seek financing and strategic partners
to help us pursue our other target markets. The filing also
permits the company to devote its existing resources
to enhancing the value of our business."  The bankruptcy
filing is the latest fallout from the controversy
surrounding Molten Metal's operations, its political
contributions and contract relationship with the U.S.
Department of Energy.

A congressional panel investigated contributions from
Molten Metal and its former chairman, William Haney III, to
Vice President Al Gore and questioned whether the political
donations were linked to DOE's funding of Molten Metal's
technology research programs. The company has denied any
wrongdoing and said the evidence showed that  "no
influence was exerted" in extending Molten Metal's contract
with DOE.

Molten Metal has blamed its financial woes in part on the
congressional probe and widespread news reports of the
company's problems. The two Oak Ridge plants are a key part
of Molten Metal's nuclear services business unit, and Perry
emphasized again Wednesday those facilities are a priority
because they generate revenues. The company last week
announced the layoff of 33 workers in Oak Ridge. That
followed an earlier reduction of 14 full-time jobs and
several contractor positions.

Molten Metal's Q-CEP Facility on Bear Creek Road processes
resins from nuclear power plants. The firm also sells casks
and other waste-related equipment to the nuclear industry.
Molten Metal also owns a Mixed-Waste Recycling Center in
Oak Ridge's Commerce Park. It is the legacy of the
company's M4 Environmental partnership with Lockheed
Martin. The partnership was dissolved earlier this year.

Perry said Wednesday that waste operations had slowed at
the recycling center because of staff reductions. When
waste loads are processed there, workers from the other Oak
Ridge plant are brought in to help run the equipment, she
said.


MOUNTAIN AIR: Lost Ruling Could Mean Loss of 1 of 5 Planes
----------------------------------------------------------               
The DEnver Post reported on December 11, 1997 that a
federal bankruptcy judge ruled Wednesday that the Dornier
aircraft company can take back one of five turboprop planes
from Mountain Air Express, the commuter airline that flies
out of Denver.  MAX, as the carrier is known, filed for
Chapter 11 bankruptcy early last month because of a cash
crunch it suffered following the earlier bankruptcy of
Western Pacific Airlines. WestPac owns 57 percent of MAX,
which flies to Colorado Springs, Aspen, Kansas City, Tulsa
and Oklahoma City from Denver International Airport with
its fleet of five 32-seat Dornier turboprops.

Dornier attorney Susan Martineau said the aircraft company
is expected to decide as early as today if it will try to
get the plane back from MAX. The court ruled that MAX did
not have an enforceable contract to lease the aircraft.
Dornier also says MAX should return the other four planes
it leases because the airline has defaulted on lease
payments. U.S. Bankruptcy Judge Sidney Brooks has yet to
rule on this claim.

MAX President Tom McClain said he's confident the airline
will retain use of all five planes in the coming weeks as
the carrier plans its reorganization from bankruptcy.
Despite Brooks' ruling on the fifth plane, MAX expects to
keep using the aircraft, either by successfully negotiating
a deal or by filing an appeal.


PEGASUS GOLD: Pegasus Gold Australia Files
------------------------------------------                           
On December 11, 1997, Pegasus Gold Inc. (PGU - AMEX, TSE,
ME) (the "Company") announced its wholly owned subsidiary
Pegasus Gold Australia Pty Ltd has voluntarily appointed
Administrators of that company in Australia. The
Administrators are Peter Geroff and Gregory Moloney of
Ferrier Hodgson of Brisbane.  The firm specializes in
insolvencies.  

The appointment of Administrators follows the decision to
suspend operations at Pegasus Gold Australia's Mt. Todd
gold mine, located near Katherine in the Northern Territory
of Australia, and place the mine on care and maintenance
effective November 15, 1997.  Pegasus Gold Inc. has
concluded that it is not in the best interests of all
stakeholders to continue to fund significant operating
losses of its Australian subsidiary.  By suspending
operations at Mt. Todd, along with the appointment of
Administrators, the Company is endeavoring to protect both
the Mt. Todd assets and the funds advanced by the Company
to Pegasus Gold Australia, pending the determination of
restructuring proposals.  

The Administrators have advised that under Australian law
they are required to provide Pegasus Gold Australia's
creditors with a report about its business, property,
affairs and financial circumstances as well as their
recommended course of action.

Peter Geroff, one of the Administrators, and a partner in
the specialist insolvency firm of Ferrier Hodgson said "the
intention of the Administrators while performing a review
of the whole of Pegasus Gold Australia operations, is to
continue to keep all stakeholders fully informed, including
the current employees of the Pegasus Gold Australia as well
as the Jawoyn people (the traditional Aboriginal owners of
the land upon which the Mt. Todd Mine is situated) with
whom the Company has always had an excellent relationship.  
After that review," Geroff continued, "the Administrators
will discuss proposals with creditors of Pegasus Gold
Australia, and liaise with Pegasus Gold Inc. and its
banking group."  

Pegasus Gold Australia Pty Ltd is a wholly owned subsidiary
of Pegasus Gold Inc., an international gold mining company
headquartered in Spokane, Washington.  Pegasus, a Canadian
company by incorporation, currently produces about 500,000
ounces of gold from operations in North America as well as
Australia.  The Company carries out exploration
internationally through offices located in Mendoza,
Argentina; Kalgoorlie, Australia; Itaituba, Brazil;
Santiago, Chile; and Panama City, Panama.  The common
shares of Pegasus are traded under the symbol PGU on the
American, Toronto and Montreal stock exchanges.  Options on
the Company's common shares are traded on the Chicago
Board Options Exchange and the Montreal Exchange.  


TODAY'S MAN: Modifications to Plan
----------------------------------
The debtors seek approval of non-material modifications and
enhancements to Clss-6 General Unsecured Creditors.  In
connection with these modifications the Creditors'
Committtee has agreed to support confirmation of the
debtors' plan.

The modifications are to the defindeed term "iInterest
Pool" and "Distributions Under the Plan".

The plan has been amended to provide that the cash portion
of Unclaimed Distributions to Class 6 Creditors shall be
deposited into the Interest Pool and distributed to Class 6
Creditors (who have claimed their distributions) to
increase Class 6 creditor redcoveries up to a maximum of
112% of Allowed Claims.  In addition, the plan has been
amended to provide a "floor" for the Interest Pool to the
extent that Allowed Claims in Class 6 exceed the debtors'
estimate of 35,217,078 to help insure that creditors
receive at least 6% of their Allowed Claim on account of
post-petition interest.  Notwithstanding the foregoing, the
debtors will only be obligated to contribute a maximum of
an additional $287,000 after application of unclaimed Cash
Distribution to help the distribution to Class 6 Creditors
from the Interest Pool reach 6% of their
Allowed Claims.

Since the amendment is de minimus, and enhances the
position of creditors, the debtors seek the entry of the
order amending the plan.

                     ---------

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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.,
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Debra Brennan and Rebecca A. Porter, Editors.   
   
Copyright 1997.  All rights reserved.  This material is    
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