TCR_Public/971218.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, December 18 1997, Vol. 1, No. 82

                           Headlines

ALPHASTAR: Operations May Be Divided
BARNEY'S: To Extend Key Employee Program
BEERS CONSTRUCTION: Gellerstedt Steps Down
BOYDS WHEELS: Third Quarter Report
BRADLEES: New DIP Financing Package

BRAUN'S FASHIONS: Third Quarter Earnings
DOEHLER-JARVIS: Committee Responds to Exclusivity Extension
DOEHLER-JARVIS: Committee Responds to Sale
GUY F. ATKINSON: Court Rejects MK's Agreement
MAX: Plan to Pull Out of Bankruptcy

MMT: Offer to Purchase Wet Waste
MOBILEMEDIA: Contract with MCI
MOBILEMEDIA: Needs Time to Assume or Reject Leases
MONTGOMERY WARD: Agreement with ValueVision
MONTGOMERY WARD: Closing 10 Electric Avenue Store

MONTGOMERY WARD: D.I.R. Intervenes for WC Claimants
THE WIZ: Files for Chapter 11
TODAY'S MAN: Restatement of 3rd Quarter Results
WESTERN PACIFIC: Lender Holds Clout

                            ---------

ALPHASTAR: Operations May Be Divided
------------------------------------
The Communications Daily reported on December 17, 1997 that
Champion Holding reportedly purchased AlphaStar for $4.6
million.  AlphaStar declared bankruptcy in August when it had
$105 million in liabilities and $72 million in assets.
Champion Pres. Mahmoud Wahba is said to be considering
restoring service in the Caribbean before reactivating North
American markets. The Company said direct-to-home operations
may be divided into 3 divisions: AlphaStar Bcstg., comprising
old AlphaStar operations; AlphaStar PC Webcasting, providing
video, data and audio via satellite; Champion Private
Network and Teleport.


BARNEY'S: To Extend Key Employee Program
----------------------------------------
Barney's , Inc., et al. is seeking an order authorizing the
debtors to extend the key employee retention bonus program.  
A hearing will be held on the matter on January 7, 1998.  
Executives designated to participate in the program include
Executive Vice Presidents, Senior Vice Presidents, Corporate
Vice Presidents and Divisional Managers, and Corporate
Office, Store and Merchandizing Key executives.  

A portion of the bonuses to be paid under the Extended Bonus
Program will be paid only if certain performance criteria are
met.  The maximum cost of the Extended Bonus Program for
fiscal year 1998 is approximately $2,259,155.  The debtors
believe that the proposed extension of the existing bonus
program will insure the continued success of the debtors'
efforts to retain its key employees by providing such
employees with the incentive to remain in the debtors' employ
throughout the reorganization process.


BEERS CONSTRUCTION: Gellerstedt Steps Down
------------------------------------------
The Atlanta Journal/Constitution reported on December 16,
1997 that Larry Gellerstedt III will step down as chief
executive of Beers Construction Co. on Jan. 1, ending more
than 30 years of family management of Atlanta's biggest
builder. Gellerstedt, 41, will remain as chairman until June,
and then he will become nonexecutive chairman for a year
after that to assure a smooth transition.


Joe Riedel, who became president nearly a year ago, will be
the new CEO. Ted Hudgins, chief operating officer, will
become president. The announcement came as a surprise. Beers
had shown impressive growth during Gellerstedt's decade as
CEO --much of it after he agreed to sell the company to
Skanska of Sweden in 1994.  "Any time you go from being the
majority owner of a company to being the regional CEO of a
global company, there's going to be change," Gellerstedt said
in an interview Monday.

"When I talked to the employees this morning, I told them
there's going to be a tremendous amount of speculation:
something is wrong with my health, or something is wrong with
Skanska. There's nothing there. I just really have a passion
to try something new."  Gellerstedt took over Beers from his
father, Larry Gellerstedt Jr., who had run the company since
the early 1960s.  

"I'm not an engineer by training," said Gellerstedt, who
majored in history and psychology in college and has worked
at Beers full time for 20 years. "I've always had in the back
of my mind interest in a business career other than
construction. I absolutely intend to find another job with
equal challenges to the ones I've had at Beers. I'm not even
close to hanging up the spurs."

But Gellerstedt said he doesn't yet know what he will do
next. While saying he doesn't regret selling Beers to Skanska
four years ago, Gellerstedt said he considers himself more
of an entrepreneur than a regional manager. "When you wake up
and you have to work a little bit more at something than you
are used to, then it's time to look at yourself,"
Gellerstedt said. "Joe and Ted have done a fabulous job
running the company. I can't think of a better time to make a
transition."

Gellerstedt loves challenges. As chairman of the Fernbank
Museum of Natural History, he pulled it back from the brink
of bankruptcy. More recently, he has been overseeing the
merger of the Egleston and Scottish Rite children's
hospitals. He plans to continue his numerous civic roles.
James B. Williams, chairman and CEO of SunTrust Banks, said
he plans to go ahead with plans to make Gellerstedt a
SunTrust director despite his departure from Beers. "He won't
stay unoccupied for long," Williams said. "He's got too much
talent."

Williams said he knew of no falling-out between Gellerstedt
and Skanska but added, "I kind of gathered Larry could have
more fun doing something else." Tommy Holder, CEO of Holder
Construction, another major Atlanta builder, said he was "not
terribly" surprised by Gellerstedt's move. "I have just
suspected for a while that that was going to be his exit
strategy," he said.  Gellerstedt said, however, that leaving Beers
wasn't an easy decision. "I thrive on challenge," he said.
"But I'm scared. I've never had to look for a job before."


BOYDS WHEELS: Third Quarter Report
----------------------------------
The following is a statement from Boyds Wheels' Chairman
Gardiner S. Dutton and President David M.
Asher:

One of the more significant events in the history of Boyds
Wheels occurred after the third quarter ended.  Boyd
Coddington, the company founder, resigned as chairman and
chief executive officer Oct. 31, 1997.  Boyd has signed a

multiyear consulting contract and his duties will include
public relations for Boyds Wheels, assisting in design work,
and performing sales and marketing functions.
Freeing him from day to day operating
responsibilities will allow him to focus in those areas where
he can make a major impact on the company's future. This
should be a great help in our turnaround efforts.  Boyd will
continue to serve on the board of directors.  

Gardiner Dutton, a company director, was appointed to serve
as interim chairman and CEO.  Dutton has an extensive
background in managing public manufacturing companies, having
recently served for 5 years as CEO of a turnaround defense
contractor, Bowmar Instrument Corp., and as CEO for the prior
10 years of Inertia Dynamics Corp. (now Ryobi Outdoor
Products), a lawn and garden equipment manufacturer.  Both
Asher, the company president, and Karkosky, director of
operations, were colleagues of Dutton at Ryobi Outdoor
Products.

At the recent S.E.M.A. show, the largest trade show for
automotive after market products, Boyd Coddington and Chip
Foose, the company's chief designer, were inducted into the
Hot Rod Hall of Fame sponsored by Hot Rod Magazine. This
demonstrates the reknown of this company in its niche market
and the important contributions made by Boyd and Chip.  

Financial results continue to be disappointing.  On revenues
of $4.8 million in the third quarter, the company lost $2.1
million, including a $465,000 write off on an account
receivable from one customer
which filed for Chapter 11 bankruptcy in September.  Nine
month net sales totaled $12.6 million with a recorded loss of
$7.5 million, including $2.3 million for one time
special charges.  Loss per share was $0.55 for the quarter
and $1.95 for nine months.  As previously stated, we do not
expect to return to profitability until mid 1998.

As of this date, we have not finalized refinancing of the
company's bank lines and it may require an equity infusion to
accomplish this task. Regardless, we need to complete these
actions during the fourth quarter.  The company's new
marketing strategies headed by Bob Williams and ably assisted
by Dave Asher and Boyd Coddington, appear promising.  While
it is too early to predict, we fully expect to add several new
customers in 1998 and report significant increases in sales
volume.  We have three new sales representative groups with
more than 30 sales people working east of the Mississippi
river.  This is the first time the company has had
significant coverage in this territory.

As always, we appreciate your support and please feel free to
write should you have comments or questions.

     Cordially,

     Gardiner S. Dutton        David M. Asher Chairman            
        President


BRADLEES: New DIP Financing Package
-----------------------------------
The American Banker Inc. - Bond Buyer reported on December
16, 1997 that Bradlees Inc. has arranged a new $500 million
debtor-in-possession financing package with a group of banks
led by BankBoston Corp. The Braintree, Mass.-based discount
retailer has been in Chapter 11 bankruptcy since June 1995.
The company's problems largely stemmed from competition from

larger discount competitors, including Wal-Mart Stores  Inc.
and the Target chain, owned by Dayton-Hudson Corp.
Bradlees' new financing includes a $250 million
debtor-in-possession facility with a term of up to 18 months.
The credit replaces a $200 million  debtor-in-possession
credit led by Chase Manhattan Corp. The deal also includes
a $250 million post-bankruptcy revolving credit facility.

"Bradlees is in its healthiest position since entering
Chapter 11, and  the new $250 million facility will further
strengthen our financial  position," said Peter Thorner,
chairman and chief executive officer of  Bradlees in a
statement. The financing, which is subject to bankruptcy
court approval, would  provide Bradlees with additional
liquidity, enhanced borrowing capacity,  financial
covenants, and lower financing costs, the retailer said.

Bradlees also said it has filed a motion seeking bankruptcy
court approval of a six-month extension of its right to
propose and file a reorganization plan through August 3,
1998. Following the announced closing of six underperforming stores
expected to conclude in February 1998, the company will
operate 103 stores in seven states.


BRAUN'S FASHIONS: Third Quarter Earnings
----------------------------------------
Braun's Fashions reports that operating income rose 4% and
EPS exceeded analysts' revised estimates. Last year's EPS
benefited from a reversal of reorganization expense and no
income tax expense, and thus exceeded this year's EPS.

- Total Q3 sales increased 9% to $29.5 million, led by a 14%
increase in Nov. same-store sales.
- Third quarter same-store sales rose 6% on 164 stores; up
12% for nine-month same-store sales.

"While our third quarter finished on a strong note, with
excellent post-Thanksgiving sales, we recognize that fourth
quarter comparisons will be
against last year's exceptionally strong 18% same-store sales
increase, which included a 25% same-store sales increase for
December," said Nicholas H. Cook, Chairman and Chief
Executive Officer.
    
For the third quarter ended November 29, 1997, Braun's net
income was $2.4 million or $0.50 per share, compared with
$4.8 million or $1.12 per share in the year-ago quarter.  
Cook added, "Our third quarter earnings are not comparable to
last year, as last year's net income benefited principally
from a reorganization expense reversal of $0.9 million and no
income tax expense. On an operating basis, we had a 4%
increase in third quarter operating income to
$4.1 million."

Sales for the third quarter increased 9% to $29.5 million, as
favorable weather conditions and a new color assortment
boosted sales in November after modest same-store sales
increases in the first two months of the quarter. Same-store
sales increased 6% in this year's third quarter on 164 stores
operating during the comparable periods.

Gross margin was 37.4% compared with 37.2% in last year's
third quarter. Selling, general and administrative expenses
were $6.2 million or 21.2% of sales, compared with $5.6
million or 20.5% of sales in the prior year, as sales were
lower than expected for this year's September and October.
Braun's opened two new stores during this year's third
quarter to finish the period with 180 stores.  The company
began last year's third quarter with 186 stores, and closed
15 stores during the period to end with 171 stores.

For the nine-month period ended November 29, 1997, Braun's
net income rose to $3.7 million or $0.76 per share, from a
net loss of $4.9 million or $1.26 per share in last year's
nine-month period, which included reorganization expenses of
$8.2 million and a tax benefit of $0.9 million.  Nine-month
fiscal 1998 net income included an extraordinary gain of
$113,000 or $0.02 per share
related to the purchase at a discount from par of $908,000
principal face amount of 12% Senior Notes due 2005.  Sales
increased to $72.2 million from $71.4 million, as a 12% rise
in same-store sales on 164 stores was offset by fewer
operating stores during most of the nine-month period.  
Operating income climbed 118% to $6.4 million from $2.9
million in the previous nine-month
period, which included high markdowns at stores closed during
last year's reorganization.

Braun's financial condition continues to be solid.  Cash and
equivalents were $9.4 million at the end of the quarter,
sufficient to fund the company's present expansion and
operating requirements.  Working capital was $18.4 million
and shareholders' equity increased to $19.7 million.


DOEHLER-JARVIS: Committee Responds to Exclusivity Extension
-----------------------------------------------------------
The Official Committee of Unsecured Creditors of
Doehler-Jarvis, Inc., et al., responded to the debtors'
motion for an order further extending the debtors' exclusive
periods to file a plan of reorganization and solicit
acceptances thereto.

The Committee supports the motion to extend the period of
exclusivity, and believes that Mr. Roger G. Pollazzi,
recently appointed Chief Operating Officer of Harvard
Industries, Inc., should be given the opportunity to
familiarize himself with the debtors' businesses and to
implement certain initiatives that will be the basis for any
plan of reorganization.


DOEHLER-JARVIS: Committee Responds to Sale
------------------------------------------
The Official Committee of Unsecured Creditors of
Doehler-Jarvis, et al. responded to the dispositions of
assets of the debtors' estates.  In August of 1997, the
Committee filed a complaint against the Lenders alleging that
the Lenders failed to perfect certain of the security
interests granted in connection with the Prepetition Credit
Agreement.  

As part of the debtors' efforts to emerge from Chapter 11,
the debtors have disposed of and anticipate disposing of
certain assets of the estates.  In light of the lawsuit
initiated by the filing of the complaint, the committee
states that the debtors' use of proceeds of the dispositions

of assets of the estates to pay down the Lenders' claims, as
well as any other pay down in accordance with the debtors'
DIP financing agreement with the lenders, may be subject to
disgorgement.  

The Committee wishes to put the Debtors, the lenders and
other parties-in-interest on notice that any such use of
proceeds, as well as any other pay down, are subject to the
reservation of all of the Committee's rights and remedies,
including the right to seek disgorgement.


GUY F. ATKINSON: Court Rejects MK's Agreement
---------------------------------------------
The Bankruptcy Court's Rejection of the expense reimbursement
agreement With Morrison Knudsen has opened the door for new
solicitations by Atkinson.
Atkinson (NASDAQ/NMS:ATKNQ) today announced that it is
considering several business combination proposals and
soliciting others as it seeks to emerge from Chapter 11.  
Under the terms of the court ruling, all interested parties
have until December 29 to exchange term sheets and to provide
comment on the period of plan exclusivity.

Atkinson's Board is considering a range of options for the
highly regarded construction company, which has a portfolio
of 40 active projects. Chairman and CEO John F. Whitsett
said, "Several of the offers on the table have potential, and
we have not ruled out the possibility of remaining
independent."

MK and Atkinson remain in discussions, although MK withdrew
its original proposal following the U.S. Bankruptcy Court's
rejection of due diligence expense reimbursement in a hearing
last week. Atkinson operates both domestically and
internationally providing full service construction to
markets for power, infrastructure, industrial process, pulp
and paper, mining, transportation, and water and wastewater
treatment.


MAX: Plan to Pull Out of Bankruptcy
-----------------------------------
The Colorado Springs Gazette reported on December 17, 1997
that Mountain Air Express planned to submit to the U.S.
Bankruptcy Court a plan detailing how the airline intends to
pull itself out of Chapter 11 protection.  MAX officials were
unavailable to confirm whether the plan had been filed
Monday. The plan should include budgets and payment schedules
for MAX's creditors.   

MAX filed for bankruptcy protection November 6, 1997  citing
timing problems with revenues as the cause for a temporary
cash shortage. But the Colorado Springs-based airline
announced November 20 that a Phoenix-based investment group -
which included Edward Beuavaise, founder of MAX and its
parent company Western Pacific Airlines - would provide up to
$3 million in backing.

MAX operates five Dornier 328 turboprop planes, each seating
32 passengers, although MAX must return one of the planes to
Dornier by next Monday. Besides providing the link for
WestPac between Denver and Colorado Springs, MAX flies
from Denver to a handful of mountain resorts and Oklahoma
City, Tulsa and Kansas City. It employs roughly 300 people,
most of whom work in Colorado
Springs.


MMT: Offer to Purchase Wet Waste
--------------------------------
MMT of Tennessee Inc. filed a notice of offer to purchase the
estate's Wet Waste business property and assume and asign
relaed executory contracts subject to counteroffers.  The
offeror is NUKEM Nuclear Technologies Corporation, and the
offered cash purchase price for the Wet Waste segment of the
debtor's business is $6.7 million.

The hearing for court approval of the sale was scheduled for
yesterday. Any counteroffer price must equal or exceed an
amount 5 percent greater than the Offer Price and must be
accompanied by a deposit in the amount of $750,000.


MOBILEMEDIA: Contract with MCI
------------------------------
MobileMedia Communications, Inc., et al., is seeking
authority to enter into and perform under a Carrier
Agrreement with MCI Tleecommunications Corportation.  A
hearing will be held on the matter on January 6, 1998.  The
debtors' paging buiness is dependent on various telephone
services provided by long-distance telephone companies, also
known as interexchange carriers.  

The debtors' long-distance telephone service is currently
provided by 18 different long-distance carriers.  The debtors
believe that they will realize annual cost savings under the
agreement of approximately $6 million, including $1.5
million in annual savings already obtained as a result of an
initial conversion of certain telephone services to MCI.

MCI's services were selected after four other proposals were
reviewed by the debtors.  The agreement contains a monthly
minimum purchase commitment of $1 million, however the
debtors currently spend approximately $2 million per month on
the services at issue. The debtors are required to provide a
security deposit in the form of either a cash deposit or a
$2.1 million letter of credit.


MOBILEMEDIA: Needs Time to Assume or Reject Leases
--------------------------------------------------
MobileMedia Communications, Inc., et al., is seeking court
authority to extend the period within which the debtors may
assume or reject unexpired leases of nonresidential real
property.  The debtors represent that the current deadline to
assume or reject unexpired real property leases is December
31, 1997.  The debtors are requesting that the time be
extended an additional 60 days, until March 2, 1998.

The debtors are party to more than 300 unexpired leases of
nonresidential real property which relate to property used by
the debtors for retail stores, sales offices, administrative
offices and storage and more than 4,000 leases for tower and
other sites at which the debtors have installed
transmitters.

The lease review process is critical to the debtors' future
opertations.  The debtors are lookng into both a stand-alone
plan and a potential third-party transaction.  The debtors
are working closely with The Blackstone Group, LP, their
financial advisors and investment bankers.  The debtors
believe that the analysis of which leases are to be assumed
and which are to be rejected are determinations that will
result both in reduced future liabilities and the
preservation of valuable assets which must be done within the
framework of a plan of reorganization.


MONTGOMERY WARD: Agreement with ValueVision
-------------------------------------------
Montgomery Ward Holding Corp., debtor is seeking entry of an
order approving the stipulation between the debtor and
ValueVision International, Inc. and ValueVision Direct
Marketing Company, Inc.  Prior to the filing of the debtors'
Chapter 11 cases, Montgomery Ward entered into a series of
transactions with ValueVision.  ValueVision is headquartered
in Eden Prairie, Minnesota and operates a television home
shopping network serving 40 states.  

Under the terms of a certain Operating Agreement, Montgomery
Ward has agreed to purchase $20 million in advertising time
from ValueVision to be placed with television stations and
cable operatiors with whom Value Vision has contractual
agreements to purchase advertising time.  As of the Petition
Date, Montgomery Ward purchased and paid for approximately
$2.5 million of advertising time and owed ValueVision
approximately $1.1 million.

Pursuant to the Stipulation between the two parties, Ward's
obligation to purchase $20 million of advertising time from
ValueVision is reduced to $10 million over a five-year period
at the rate of l$2 million per year.  Ward may terminate
after 3 years.  The debtors seek entry of a court order
approving the Stipulation, and a hearing is set for December
30, 1997.  It is the debtors' business judgment that the
benefits of the restructrued arrangements to the estate
outweigh the costs.


MONTGOMERY WARD: Closing 10 Electric Avenue Stores
--------------------------------------------------
Montgomery Ward Holding Corp., et al. requests the entry of
an order authorizing the rejection of ten Electric Avenue &
More stores. A hearing will be held on December 30, 1997.

In the debtor's business judgment, it is in the best
interests of the estate to reject the leases.
The stores covered by these leases have been closed and
Montgomery Ward has no use for the stores.  The debtors claim
that they attempted to find parties to whom they could
profitably assign the leases, but they were unable to do so.


MONTGOMERY WARD: D.I.R. Intervenes for WC Claimants
---------------------------------------------------
Intervention by the Department of Industrial Relations (DIR)
will ensure that injured employees of bankrupt retailer
Montgomery-Wards will continue to receive the workers'
compensation benefits to which they are entitled, according
to Acting Director, John Duncan.  
Montgomery-Wards was self-insured until 1987 and has been
insured since 1987 for compensation to employees with
job-related injuries.  

A 45 day nationwide stay was granted to Wards on evidentiary
hearings and trials of fact in its workers' compensation
proceedings as a result of an order by the U.S. Bankruptcy
Court in Delaware.  Following legal intervention by the
office of Self Insurance Plans within DIR, the company has
turned over payment of its workers' compensation claims in
California to its insurance carries and, for older claims to
the self insurers' security fund.  

"The net result is that the processing of all
Montgomery-Wards' workers' compensation claims has now
returned to normal," said Duncan.  "As a direct result of two
interventions by DIR in its Bankruptcy proceedings, the
workers' compensation claims of Montgomery-Wards, at least in
California, have been turned over to the workers'
compensation insurance carriers that wrote the
company's policies and to the Self Insurer's Security Fund
for pre-1988 claims that were self-insured by the bankrupt
company."  

In response to DIR objections filed in September,
Montgomery-Wards agreed to let all self-insured workers'
compensation claims in California be taken over by the
California Self Insurer's Security Fund. The company left
self-insurance in mid-1987 and very few self-insured claims
remained open at the time of its bankruptcy filing on July 7,
1997.  

The security deposit posted with DIR will be used to fund
payment of these self-insured claims.  
In October, DIR filed additional objections to
Montgomery-Wards' plan to further delay payment of insured
workers' compensation claims.  As a result, the company
agreed to turn over payment of all insured claims to the
insurance carriers that wrote large deductible workers'
compensation insurance policies for them.

Under the policies, Montgomery-Ward was to fund the first
$500,000 of every claim. "Under California law the carrier is
responsible to pay the entire claim including any deductible
amount," Duncan explained, "and collect back the deductible
from the employer if it can.  In this case, the carriers will
pay the insured claims and stand in line with other
creditors in the hope of getting some deductible amounts
reimbursed to them." The Bankruptcy Court, while ordering the
carriers to pay, did give Montgomery-Wards a 45 day reprieve
on any evidentiary hearings or trials of fact before any
State Workers' Compensation Appeals Boards.  This stay ended
on December 9, 1997.


THE WIZ: Files for Chapter 11
-----------------------------
Nobody Beats The Wiz, an electronics retailer with more than
50 stores in the New York metropolitan area, filed for
bankruptcy protection Tuesday, saying it planned to close 17
stores. The Chapter 11 petitions for The Wiz Inc. were filed
in U.S. Bankruptcy Court in Manhattan, the company said in a
statement. The electronics, music and video retailer,
headquartered in Carteret, N.J., employs 4,200 people at more
than 50 stores with total annual sales of more
than $1 billion.  

In July, the company announced it was closing all three of
its Massachusetts stores and two in Connecticut because they
can't compete effectively. It announced at the time that it
expected to lay off no more than 300 full-
time and part-time workers, 7 percent of its work force at
its 63 stores before the closings.

The company blamed a "general softness in the
consumer electronics industry" for sagging sales that harmed
its ability to support its
less profitable outlets outside of the immediate New York
City area. "The bankruptcy filings provide The Wiz with the
flexibility to restructure its finances and reorganize around
our core metropolitan area locations," said
Lawrence Jemal, the company's president and chief executive
officer.  

The Wiz said it was immediately seeking Bankruptcy Court
approval to close 17 stores that were not doing well. It also
asked permission to continue all consumer practices,
including honoring consumer deposits, gift certificates,
refund and exchange policies and other promotional events.


TODAY'S MAN: Restatement of 3rd Quarter Results
-----------------------------------------------
Today's Man, Inc. (Nasdaq-NNM:TMANQ), operating under the
protection of Chapter 11 of the U.S. Bankruptcy Code as a
Debtor-in-Possession, today announced the filing of its Form
10-Q with the Securities and Exchange Commission for the
quarter ended November 1,1997.  As a result of the creditor
vote and the confirmation of Today's Man's Plan of
Reorganization by the U.S. Bankruptcy Court in Delaware on
December 12th, the Company has determined to take a charge in
the third quarter for the previously reported $7.3 million
plan related payments to creditors.  

The payments are classified as interest expense in the
accompanying Consolidated Statements of Income. As previously
reported, the Company's net sales for the third quarter,
ended November 1, 1997, increased 8.6% to $48.5 million from
$44.6 million in the third quarter of 1996.  Income from
operations rose to $1,970,300 from $11,000 in the comparable
1996 quarter.  

The Company reported a net loss for the third quarter of
$6,267,900, or ($0.58) per share, versus a net loss of
$750,100, or ($0.07) per share, for the third quarter of
1996.  Excluding the previously described plan related
payments classified as interest expense, net income for the
quarter was $996,100, or $0.09 per share.  Comparable store
sales increased 8.6% for the 25 superstores in operation at
the end of each quarter, respectively.  

As previously reported, the Company's net sales for the nine
months increased 4.8% to $142.9 million from $136.3 million
for the nine months of 1996.  Income from operations rose to
$4,747,000 from a loss of $2,611,300 in
the comparable 1996 period.  The Company reported a net loss
for the nine months of 1997 of $5,440,100 or ($0.50) per
share, versus a net loss of $5,746,400, or ($0.53) per share,
for the nine months of 1996.  

Excluding the previously described plan related payments
classified as interest expense, net income for the nine
months was $1,823,900, or $0.17 per share.  Comparable store
sales increased 7.9% for the 25 superstores in operation at
the end of each nine month period, respectively.  The Company
had 10,861,005 weighted average outstanding shares during
all relevant periods presented.


WESTERN PACIFIC: Lender Holds Clout
-----------------------------------
The Colorado Springs Gazette reported on December 16, 1997
that only one person has more control over the fate of
Western Pacific Airlines than president and chief executive
Robert Peiser.  That person is John Adams.   It is Adams,
President of New York-based Smith Management Group,
who holds the bankrupt airline in his deep pockets.
Without Adams, WestPac likely would
be a thing of the past.

Adams sat down with members of the news media for the first
time Monday to discuss his vision of WestPac, what the
critical next few days might bring and why he and his company
decided to bail out an airline that has averaged nearly
$20 million in losses each of the past four quarters.

Smith Management offered WestPac $30 million in loans, and up
to another $20 million to pull it out of bankruptcy, in
exchange for ownership of the airline. Those basic terms were
approved two weeks ago by a bankruptcy judge in Denver.
That led to the initial $10 million investment, which WestPac
used primarily to get aircraft lease payments up to date.
But the agreement calls for Smith, should it choose, to offer
another $20 million on or after Saturday - money
WestPac will need to survive into next year.

Officials of Smith Management are still negotiating with a
committee representing WestPac's creditors to determine what
they will receive out of the bankruptcy. Most likely, the
payoff will be a fraction of what the creditors
are actually owed, and could include some sort of equity in
the reorganized firm.

Although budget projections showed WestPac would need more
cash by this week, Peiser said Monday that was not the case.
And Adams stressed that all or part of the $20 million loan
could come before Saturday, should WestPac need it.  One key
may be the creditor committee's endorsement of the final plan
to exit from bankruptcy. Adams said the two sides are very
close to a deal.

When asked about operations in Colorado Springs, where half
of WestPac's 1,500 employees work at the company's
headquarters or reservations center, Peiser was quick to jump
in. "There are some reasons to stay in Colorado Springs, and
some reasons to move (to Denver)," Peiser said, mentioning
the cost and inconvenience of moving
operations and employees weighed against the convenience of
consolidated operations.


WESTERN PACIFIC: Lender Looks to Strike Deal
--------------------------------------------
The Denver Post reported on December 16, 1997 that Smith
Management Co., the New York investment firm that lent
Western Pacific Airlines $10 million earlier this
month, hopes to strike a deal with WestPac's
creditors on the airline's reorganization
before it pumps more money into the operation.

A new financing plan for WestPac that was approved by a
federal bankruptcy judge on Dec. 3 said Smith Management
would make available an additional $20 million for the
airline to meet expenses beginning Saturday. But Smith
President John Adams said in a visit to Denver on Monday that
there is no firm deadline for making all or most of the $20
million available to WestPac.

If talks with the unsecured creditors committee do not result
in a deal by the end of this week, the negotiations could
continue next week and Smith could make cash available to
WestPac on an as-needed basis while discussions with
creditors continue, Adams and WestPac President Robert Peiser
said in an interview Monday.

Adams said Smith Management plans to put "sufficient capital"
into WestPac to make the airline thrive. He said the
investment firm plans a new offering of stock in a
reorganized WestPac next fall.  "We are committed to this
airline."  A deal with the creditors committee would
make WestPac's reorganization proceed more quickly
and more smoothly, but Peiser said reorganization
can occur without the consent of the committee.

Peiser and Adams noted that WestPac and Smith are close to an
agreement with the creditors.  James Markus, lead attorney
for the creditors committee, agreed that talks with officials
of WestPac and Smith Management "are progressing
meaningfully."  WestPac creditors have about $50 million in
claims against the airline and the creditors committee -
representing the carrier's jet fuel supplier, aircraft
maintenance contractor, a computer services company and other
creditors, including Denver International Airport - have
claims totaling about half of the entire creditor debt.

It is expected that creditors will convert a portion of the
debt they hold in WestPac into some combination of new equity
in a reorganized company, cash and warrants that give them
the right to acquire equity in the future. Holders of
WestPac's current equity are expected to get little or
nothing from the bankruptcy reorganization.

In recent weeks, WestPac's stock has been trading at or near
its historic low, reflecting the widely held belief that it
may be rendered worthless by a reorganization plan. On the
OTC Bulletin Board Monday, WestPac's stock closed
at 41 cents a share, down 5 cents. Beauvais sold shares A
Washington service that monitors purchases and sales of stock
reported late last week that WestPac Chairman Edward
Beauvais sold 442,000 shares of WestPac stock for between 41
cents and 75 cents a share between Nov. 21 and Nov. 28 and
another 194,000 shares between 26 cents and 41 cents a share
on Dec. 2.

                        ---------

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