TCR_Public/971222.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 22 1997, Vol. 1, No. 84
                      
                      Headlines

AMERICAN WESTERN: Bought for Scrap by Apex Subsidiary
EVANSVILLE BREWERY: Michael Lynch Best Bidder
FLAGSTAR: Sets Jan. 7 As Effective Date for Emergence   
FLOWIND: Subsidiaries Intend to Sell Inventory
HARRAH'S JAZZ: Asks Court Approval of New Plan

HARRAH'S JAZZ: Lawyers Want to Quiz Foster
HEILIG-MEYERS: Plans Cuts, Closings
HOLTRACHEM: Agreement with State Finalized
INTERSCIENCE: Sells Xerox Maintenance Division
LAMONTS: Court Approves Reorganization Plan

MANHATTAN BAGEL: Recognizes Franchise Advisory Council             
MAX: Given 10 Days to Return Airplane
MOLTEN METAL: Wants to Pay Employees' Prepetition Claims
MONTGOMERY WARD: Fixed Fee to Arthur Andersen
MONTGOMERY WARD: Requests Rejection of Equipment Leases

MONTGOMERY WARD: Seeks More Professionals
PHOENIX INFORMATION: Files Chapter 11
RICKEL HOME: Seeks Approval for Stalking Horse Agreement
WESTERN PACIFIC: Announces Cash Infusion

                      ---------

AMERICAN WESTERN: Bought for Scrap by Apex Subsidiary
-----------------------------------------------------
21st Century Fuels reported on December 10, 1997 that St.
Louis-based Clark Oil Trading Co. (COTC), a subsidiary of
Apex Oil, has finalized a $9.5 million deal to buy the
86,000 b/d former American Western Refining refinery at
Lawrenceville, IL, in a sale approved by the U.S.
Bankruptcy Court. The closing was November 25, 1997.

COTC (formerly affiliated with Clark Refining & Marketing)
intends to sell the refinery for scrap, rather than restart
it, according to COTC spokesman Neil Miller.  The refinery
was formerly operated by Castle Refining. Its operation was
tied to a crude-for-products hedging scheme with former
partner MG Refining & Marketing. The refinery became
economically problematic after MG's hedging division lost
nearly $2 billion a few years ago in the biggest-ever oil
market trading fiasco in history.


EVANSVILLE BREWERY: Michael Lynch Best Bidder
---------------------------------------------
According to the Evansivilee courier, on December 17, 1997,
Michael Lynch, CEO of Michigan Avenue Partners promises to
have beer flowing again in late January. Sterling, Falls
City, Wiedemann and Gerst beers are alive and still living
at Fulton Avenue and Lloyd Expressway.   Michigan Avenue
Partners of Chicago, whose confident, brash CEO Michael
Lynch offered in October to buy the ailing Evansville
Brewing Co. while pledging to keep its operation here, was
ruled best bidder Tuesday by U.S. Bankruptcy Judge Basil H.
Lorch III.

Lynch landed the 147-year-old brewery Tuesday with the same
$3 million bid he made two months ago, just before
Evansville Brewing filed for bankruptcy.  If Lynch meets
the bankruptcy court's requirements, including closing the
deal 11 days after Lorch issues a signed order approving
the sale, it means the brewery's work force of about 90
people will return soon, maybe sometime in January. "Think
of it as Michigan Avenue Partners' present to the employees
of Evansville Brewing Co. Merry Christmas," Lynch said
moments after the brewery's Chapter 11 hearing ended
Tuesday afternoon in federal court.

Lynch said one of his first tasks would be the
"repositioning of senior management," and he wasted no time
offering the position of brewery chief executive officer to
Michael Exline, the current financial chief.  Though Exline
said he is still responsible to current management until
Lynch closes the deal, he indicated he will then accept the
offer. Lynch said he would announce other appointments and
"structural changes" by year's end.

Of 13 bids in all, only one -- from Shula Inc. of Chicago,
allied with the Pittsburgh Brewing Co. -- was for all
brewery assets. It came in "at least a couple hundred
thousand" below the successful bid, according to Stanley
Talesnick, Evansville Brewing's bankruptcy attorney.
And Pittsburgh was anything but the hometown favorite
because the company had made little effort to allay fears
that it would close the local brewery and take its brands
back home, where brewing capacity outstrips production.

Lynch and Michigan Avenue Partners, on the other hand, had
the clear backing of brewery workers, including several who
attended the entire 5 1/2 -hour hearing. At the end, Lynch
approached a few of them, thanked them for supporting him,
and said, "Merry Christmas. Let's make this very profitable
for all of us."  "Great," said 2 1/2 -year brew house
worker Craig Abshier, in his late 20s. "I've been off work
over six months out of the last 12."  Current brewery
president and chief executive Stephen W. Cook seemed
relieved and pleased at the outcome. "This is what I've
been working six to eight months for -- to get a suitable
buyer. I'm very pleased someone bought it who's going to
operate it here."  Cook said his tenure with the brewery
will end when Michigan Avenue takes
over.

Though relations between Evansville Brewing officials and
Lynch have been strained since Lynch missed an October
deadline for paying earnest money and the brewery proceeded
with its bankruptcy petition, Cook said he "felt all
along that Mr. Lynch would be the one who would acquire the
brewery."  Talesnick also was bluntly critical of Lynch in
October, but said Tuesday that Lynch had his confidence.
"He came with the money, he came with a signature. There is
no reason to think (Michigan Avenue officials) don't intend
to consummate the deal and keep the brewery operating "

Michigan Avenue put up $250,000 in earnest, which it will
forfeit if the deal isn't completed within 11 days. Of the
$3 million purchase price, $2.5 million is due at the
closing, with the balance to be paid in quarterly
installments of $25,000 over five years beginning March 1.
The actual purchaser will be Evansville Acquisition Co.
LLC, a subsidiary of Michigan Avenue Partners.

Lynch testified at the hearing that he is the majority
shareholder and CEO of the subsidiary, which he said
involves no Evansville Brewing officials, shareholders or
employees. Lynch said he plans to use the subsidiary to
acquire other brewing interests.  He also has acquired
other brands he intends to brew in Evansville, but
could not disclose them immediately because of
"confidentiality requirements."


FLAGSTAR: Sets Jan. 7 As Effective Date for Emergence   
-----------------------------------------------------
Flagstar Companies, Inc. (NASDAQ:FLST) announced that the
company has set January 7, 1998 as the Effective Date for
its emergence from Chapter 11.  The company has also filed
a motion with the U.S.  Bankruptcy Court for an order
establishing January 2, 1998 as the Record Date for
determination of debt security holders entitled to
distributions under the Amended Joint Plan of
Reorganization (the "Amended Plan") as confirmed by the
U.S. Bankruptcy Court by order entered on November
12, 1997.  

Holders of record of the Old Senior Notes, Senior
Subordinated Debentures and 10% Convertible Junior
Subordinated Debentures will be furnished with a
letter of transmittal by the Disbursing Agent for use in
tendering old debt securities in exchange for new
securities to be issued on or soon after the Effective
Date.  First Trust National Association will act as
Disbursing Agent for the New Senior Notes and Continental
Stock Transfer & Trust Company will act as Disbursing Agent
for the New Common Stock and New Warrants.  

Under the Amended Plan, 40 million shares of New Common
Stock will be issued, with holders of Senior Subordinated
Debentures receiving 95.5% of the New Common Stock and
holders of the 10% Convertible Subordinated Debentures
receiving 4.5% of the New Common Stock plus four million
New Warrants exercisable at $14.60 per share over a seven-
year term.  The Amended Plan does not allocate
distributions to holders of Old Common Stock or Old
Preferred Stock and such securities will be canceled on the
Effective Date.  Holders of Old Senior Notes will receive
New Senior Notes representing 100% of the principal amount
of the Old Senior Notes plus accrued interest through the
Effective Date.  

A limited "when issued" trading market for the New Common
Stock has developed in the over-the-counter market under
the trading symbol DINEV.  Upon emergence from Chapter 11,
the company will change its name to Advantica Restaurant
Group, Inc.  and will list the New Common Stock and New
Warrants on the Nasdaq National Market under the trading
symbols DINE and DINEW, respectively.  

Flagstar is one of the nation's largest restaurant
companies with nearly 3,300 moderately priced restaurants
and annualized revenue of approximately $2.7 billion.  
Flagstar owns and operates the Carrows, Coco's, Denny's, El
Pollo Loco and Quincy's Family Steakhouse restaurant brands
and is the largest franchisee of Hardee's.


FLOWIND: Subsidiaries Intend to Sell Inventory
----------------------------------------------
Advanced Wind Turbines, Inc. (AWT) and Advanced Blade
Manufacturing, Inc.,(ABM) two subsidiaries of debtor
FloWind Corporation intend to enter into a contractual
arrangement with the Conservation and Renewable Energy
System (CARES) and Illinova Energy Partner,(IEP) with the
approval of the Export-Import Bank (Ex-Im) of the United
States and the debtor.  AWT and ABM would sell certain wind
turbine inventory to IEP at less than its book value for
use in the CARES windfarm project.  

The inventory has a book value of about $4.54 million and
requires about $500,000 to be workable.  The sales price of
the inventory before the reworking would be $4 million.  Of
the $4 million purchase price for the inventory, $1.58
million will be paid to the vendors of AWT and ABM.  The
remaining $2.42 million will be set aside for payment to
Ex-Im on account of its secured claim.  

As a result, Ex-Im's $9 million secured claim against the
debtor and the debtor's unsecured intercompany receivable
from AWT and/or ABM which is also collateral for the EX-IM
loan, will both be reduced by $2.42 million providing a
substantial benefit to the debtor's estate.  A portion of
the amount reserved for Ex-Im not to exceed $1.42 million
might be set aside to cure any defects in the inventory
that are identified prior to passage of the buyer's
acceptance test.


HARRAH'S JAZZ: Asks Court Approval of New Plan
----------------------------------------------
Harrah's Jazz Co. will ask a federal bankruptcy judge on
January 21 to approve the company's revised reorganization
plan for the idled land casino. The date for the
"confirmation" hearing was set by U.S. Bankruptcy Judge
Thomas Brahney III. The scheduling of the confirmation
hearing came a day after the state Gaming Control Board
unanimously approved Harrah's Jazz's revised casino
operating contract with the state. The Legislature has the
final say on the contract.

Governor Mike Foster is urging state lawmakers to convene a
special session early next year and approve the contract.
Harrah's Jazz officials are hoping to open the casino in
early 1999.

Brahney approved the previous reorganization plan in April,
but the Legislature rejected Harrah's Jazz's earlier casino
operating contract with the state in June, sending the
company back to the drawing board. Harrah's Jazz's
bondholders and unsecured creditors overwhelmingly approved
the previous reorganization plan, with 99 percent of the
unsecured creditors supporting it and 96 percent of the
bondholders voting in favor of it. Patrick said that only
those bondholders and unsecured creditors who voted on the
previous reorganization plan are entitled to vote on the
revised plan.

Patrick said those bondholders and unsecured creditors will
be mailed a revised plan, but only those who wish to change
their vote need to vote again. Those votes are due by
January 16, he said. Bondholders would own slightly more
than 50 percent of the project, but the value of their junk
bonds would be $187 million instead of the $435 million
when they were originally purchased.  Brahney also approved
Harrah's Jazz's "disclosure statement," or outline, of its
plan to reorganize the casino's finances and emerge from
bankruptcy protection.

Patrick said the statement was mailed to bondholders and
unsecured creditors in mid-November, and only one
bondholder objected.  The entire reorganization plan still
must be approved.  In addition to guaranteeing the state's
$100 million annual tax payment, the revised casino
operating contract approved by the Gaming Control Board
now:

    * Prohibits the casino from operating hotels.

    * Prohibits activities aimed at minors on the casino's second
      floor, such as a children's arcade. The second floor
      will be used as an entertainment venue.

    * Provides for better public access to information about the
      casino.

    * Requires any lawsuit arising out of the casino contract to
      be filed in the 19th Judicial District Court in Baton
      Rouge, keeping litigation in the state.

The Baton Rouge Advocate reported on December 13, 1997 that
the Legislature's special session in late January may be a
waste of tax payer's money. Sen. Ken Hollis, R-New Orleans,
and Rep. Edwin Murray, D-New Orleans, two of the main
proponents of the contract, have said they will travel the
state to gain enough signatures for the Legislature to call
the special session.

Lawmakers have never before taken advantage of the
procedure that allows them to call a special session, but
Gov. Mike Foster has said if there are not enough
legislators willing to meet, then there are obviously not
enough votes to approve the contract.  That makes sense,
although some legislators might sign the petition for a
special session and still vote against the contract. Others
might refuse to sign, but end up voting for the contract if
the session is called.

It takes a majority of each house for the Legislature to
call itself into special session - the same number it will
take to approve a resolution ratifying the casino contract.
That means proponents must get the signatures of 20
senators and 53 representatives to call the special
session.  Foster has urged the lawmakers in a letter to
approve the contract. He contends that the issue is about
the state honoring its contracts, and not about gambling.
We do not find that contention convincing. The state did
not void the contract. The original casino contract with
Harrah's was voided by Harrah's when it abruptly shut down
the temporary casino in November 1995 and declared
bankruptcy.

In our view, the most compelling argument for approval of
the contract is that it would ensure payment of some $56
million to unsecured creditors who were left holding an
empty bag when the casino shut down.  Those creditors would
likely receive only pennies on the dollar if the assets of
the casino company are liquidated.

The state would also be guaranteed at least $100 million in
tax revenue. While the state can certainly find good uses
for that money, the state can also do without the extra
money with relative ease. Some proponents, especially in
New Orleans, would also argue that the contract should be
approved because it will guarantee completion of the casino
building. However, the property at the foot of Canal Street
is valuable to the city with or without the building, and
it is questionable whether the structure is ideal for the
location.

Before addressing the question of whether the contract
should or shouldn't be approved, lawmakers must decide
whether the issue is of such compelling urgency that it
deserves the attention of a 10-day special session of the
Legislature. While it is true that special sessions have
become almost commonplace, we think they should be
restricted to issues of an urgent and compelling statewide
interest.  The casino contract does not fit that
definition. It has been two years since Harrah's shut its
doors and turned its employees out into the streets
just before the holiday season. Will a few more months make
that much difference?

Last summer, when the Legislature considered the first new
contract, proponents argued immediate approval was
necessary or the project would be dead forever. While
opponents might wish that had been so, it obviously didn't
work out that way, since six months later a new "new" deal
is on the table.  If a special session is not called by the
Legislature, Foster could certainly place the issue before
lawmakers in the multi-purpose special session he plans
immediately prior to the 1998 regular session.

If it is not considered in that special session, it is
possible the issue could be decided in the regular session,
even though that session is restricted to fiscal matters,
since it would require only a resolution to ratify the
contract and not the adoption of a law.  Whatever the
outcome, we do not believe the contract merits a special
10-day special session all its own. It is not of sufficient
importance or urgency.


HARRAH'S JAZZ: Lawyers Want to Quiz Foster
------------------------------------------
The Baton Rouge Advocate reported that attorneys for six
former casino regulators want to question the governor
under oath about his involvement in the sudden closure two
years ago of the state agency that oversaw the troubled New
Orleans land casino. Demands to appear for sworn testimony
were issued late last week to Governor Mike Foster and his
top aide, Stephen Perry, in a federal lawsuit filed here by
displaced board members of the Louisiana Economic
Development and Gaming Corp.

Attorneys for the former regulators also demanded records
from Foster's transition organization, which Perry headed,
in an attempt to determine whether gambling interests paid
any of the expenses the governor had between his election
in November 1995 and his swearing-in January 1996.
Cheney Joseph, the governor's executive counsel, has said
he will oppose any attempt to turn over the transition
office's financial records, saying they have nothing to do
with the lawsuit, and any attempt to compel sworn testimony
from the administration.

The lawsuit stems from the sudden closure of the LEDGC
office in December 1995.  LEDGC was shut down by members of
the state attorney general's staff and by Murphy J. Foster
III, the son of Mike Foster, who was then the governor-
elect. The younger Foster said he was working on behalf of
his father and under the authority of then-outgoing Gov.
Edwin Edwards. The six former board members, who regulated
the New Orleans land casino, contend in the federal lawsuit
that their civil rights were violated by being illegally
removed from their jobs.

They are seeking back pay.

Five of the former board members have filed a related
lawsuit in state court in Baton Rouge that could, were they
to win, hamstring attempts to revive the new casino.

That lawsuit contends the Louisiana Gaming Control Board,
created in 1996 to regulate the casino and other forms of
gambling, does not have the authority to approve a new
state contract with the casino because LEDGC's functions
were not legally transferred.

State attorneys disagree, saying the new board was given
all of LEDGC's responsibilities and the lawsuit is merely
an attempt by the former board members to be paid salaries
cut off at the time of LEDGC's closure.  Last Tuesday, the
Gaming Control Board approved a new contract with Harrah's
Jazz Co., the bankrupt casino's owner, setting up an
attempt by backers to have the Legislature ratify the pact
in a special session next month.

William Patrick, an attorney for Harrah's Jazz, which is
not involved in the displaced regulators' lawsuit, said he
believed the Gaming Control Board had the proper authority
to approve the new contract.  In December 1995, Murphy
Foster and the Attorney General's Office said LEDGC
had to be closed because it depended upon funding from
Harrah's temporary casino, which had closed.

During the takeover of LEDGC's office, employees were laid
off immediately, and the board members' salaries were cut
to nothing.  However, board members were placed on call
during the early portion of 1996 by the state in case
action was needed on the Harrah's case.


HEILIG-MEYERS: Plans Cuts, Closings
-----------------------------------                       
Heilig-Meyers Co. will close about 60 stores and
eliminate about 400 employees as part of an effort to
reduce costs and boost profits at its core furniture
business.  The home-furnishings retailer said late
Wednesday that it would take a $134 million pre-tax charge
over the third and fourth quarters to cover the expenses
associated with the restructuring.  Wall Street barely
reacted to the news, although analysts said it will help
the company control expenses.

Heilig-Meyers stock rose 25 cents to $12.9375 Thursday on
the New York Stock Exchange.  "This is a very healthy move
for them," said Wallace W. Epperson Jr., a furniture
analyst with Richmond-based Mann, Armistead and Epperson
Ltd.  The restructuring will focus on its Heilig-Meyers
furniture division, which generates about 63 percent of the
company's total revenues.  About 60 stores will be closed
early next year in large markets like Atlanta, Cleveland
and Milwaukee, where it has been difficult for the
company's small-town format to be successful.

It will relocate another 20 or 30 stores to higher-traffic
areas. Also, it will initiate a new merchandising and
advertising strategy that will differentiate between larger
and smaller markets.  Heilig-Meyers will also slow its
expansion plans. In the last four years, between 45 and 100
stores were opened annually.  Nearly 400 jobs will be cut
companywide, including about 80 people at its corporate
headquarters. The company employs about 22,000 workers.

Heilig will also change its credit-card operations, looking
for better ways to predict potential bad-risk customers.
About 85 percent of Heilig-Meyers merchandise is bought on
credit.  The company will put aside $50 million to increase
a reserve for customers who file for bankruptcy or fall
behind on payments.  Also Wednesday, the company reported a
loss of $49.1 million, or 85 cents a share, compared with
earnings of $9.5 million, or 19 cents a share a year ago.
For the first nine months of the year, Heilig-Meyers lost
$26.1 million, or 46 cents a share, compared with earnings
of $29.61 million, or 60 cents a share, a year ago.


Standard & Poor's lowered its corporate credit rating on
Heilig-Meyers Co. to double-'B'-plus from triple-'B'-
minus. In addition, Standard & Poor's lowered its senior
unsecured debt rating on the company's wholly owned
subsidiary, MacSaver Financial Services Inc., to double-
'B'-plus from triple-'B'-minus.  MacSaver's ratings reflect
the unconditional guarantee for payment of principal and
interest by Heilig-Meyers.  The outlook is revised to
negative.

The ratings downgrade is based on erosion in the credit
quality of Heilig-Meyers' credit operations and operating
difficulties with its core store format.  Heilig-Meyer's
will take a $134 million pretax charge over the third and
fourth quarters related to problems in its credit
operations and its core Heilig-Meyer furniture stores.  A
high level of personal bankruptcies and loan loss
provisions are expected to continue to plague the company's
credit portfolio.  The company now expects to operate the
Heilig-Meyer store division with loan loss provision at
6.0%-6.5% of sales, up from a previous target of
5.0%-5.5%.  While the company has operated within this new
range for the last few quarters, bankrupt accounts have
increased.  Heilig-Meyers has allocated $50 million of the
special charge to its bad debt reserve, largely reflecting
a new, more conservative charge-off policy.

The ratings on Heilig-Meyers still reflect its leading
position in the highly competitive home furnishings
industry.  The company should be able to use its size to
benefit from purchasing economies.  At the same time,
Standard & Poor's believes its growing exposure to the more
competitive metropolitan and large town markets increases
business risk.  While the returns are higher, these larger
markets are more competitive, expensive, and vulnerable to
economic downturns.

The rating also recognizes the company's cost-cutting
initiatives that are estimated to save $30 million
annually, as well as slower new store growth and
less capital spending.  In addition, nearly $50 million in
cash flow from the disposition of accounts receivables at
the closed stores will bolster financial flexibility.  The
potential for profit improvement and higher cash flow is
particularly important given the increase in the company's
leverage following the special charge.  Total debt will be
at over two thirds of the capital structure, yet also
recognizes that much of the company's outstanding debt is
used to support its in-house credit operations.

The outlook is negative.  Weakness at the company's credit
operations has demanded attention.  New credit scoring
models and outside expertise to help identify credit risk
better will be utilized.  Nevertheless, credit trends in
bankruptcies and provisions for charge-offs have yet to
improve.  Further deterioration in the company's
credit portfolio coupled with greater risks entailed in its
new store formats and lingering problems at the core
Heilig-Meyers stores could further impact profitability,
cash flow, and credit protection, Standard & Poor's said.   
CreditWire


HOLTRACHEM: Agreement with State Finalized
------------------------------------------
The Bangor Daily News reported on December 18, 1997 that
after months of difficult negotiations, the Board of
Environmental Protection on Wednesday finalized an
agreement between the state and HoltraChem Manufacturing of
Orrington, committing the company to $2.2 million in fines
and corrective actions after years of releasing dangerous
chemicals -- including mercury -- into the environment.

"This has not been a pleasant negotiation for us," said Ned
Sullivan, commissioner of the Department of Environmental
Protection. At times, he said, working with the chemical
company on the banks of the Penobscot River was like
"hand-to-hand combat."  The commissioner reiterated his
desire for HoltraChem to convert its plant to a mercury-
free process. HoltraChem, which employs about 70 people,
produces chlorine and caustic soda by sending an electrical
charge through salt water. Mercury is used in small amounts
as a part of that chemical reaction, and the company
recycles nearly all of it.

Sullivan said he would urge the Legislature to consider
either lowering the limit for mercury releases or requiring
mercury-free processes. The chemical company, the only one
in Maine that uses such a process, has said such a costly
conversion would force it to close the Orrington plant.
This year alone, the aging HoltraChem plant accidentally
released hundreds of thousands of gallons of mercury-
contaminated water into the ground or the river in four
events.

Company officials point to a series of improvements made to
the plant since they bought it out of bankruptcy in 1994.
The company reduced mercury discharges into the Penobscot
by 25 percent, slashed airborne mercury emissions
by 50 percent and cut production of hazardous waste by 17
percent. Those hazardous wastes are shipped to Canada.
HoltraChem President Bruce Davis said he believes the
settlement, which represents more than 7 percent of the
company's annual revenues, is too high.

On Wednesday, in response to statements about the company's
lack of cooperation at the BEP meeting, Davis stressed his
organization's cooperation with the state.  "All of the
issues raised in the order were being addressed, and almost
all were corrected before the negotiations began, which the
DEP appreciated," he said in a prepared statement. "We have
been working diligently with the DEP and are anxious and
willing to correct our problems ... and will continue to do
the best we can to improve our operations in order to be a
good neighbor."

Sullivan cited the spills that have occurred on
HoltraChem's watch and said the company was responsible for
knowing the condition of the plant before its
sale.  "The kinds of releases that have happened on
HoltraChem's watch are intolerable, and we are going to use
all the powers available to us to make sure that they
stop," he said. In addition to pushing for the elimination
of the mercury process, the DEP also could push for a
change in the permitting process. No date has been set
for formally renewing HoltraChem's air and water pollution
permits.

The order, which the board unanimously approved, requires
the company to:

    * Pay $736,000 in fines and interest and $1.5 million in
      corrective actions.

    * Conduct comprehensive monitoring of ground water, surface
      water and air emissions.

    * Hire an independent engineer to evaluate risks in the
      plant's infrastructure and provide a plan to address any
      such concerns.

    * Monitor air around the plant to collect data about
      emissions leaving the property's boundaries

    * Prevent contaminated ground water from entering a nearby
      stream and prevent contaminated sediments from reaching the
      Penobscot River.

The company also was required to test nearby drinking wells
for contamination from the plant. Scott Whittier, director
of DEP's hazardous material regulation division, said the
most recent tests found no mercury or caustic in those
wells. The state is still studying the samples for evidence
that any ground water could travel from the plant to the
neighbors' drinking water.


INTERSCIENCE: Sells Xerox Maintenance Division
-----------------------------------------------                 
Interscience Computer Corporation (Nasdaq: INTRO) announced
that it had sold its Xerox laser printer maintenance
business to Anacomp, Inc. (Nasdaq: ANCO), a major
international provider of information delivery systems and
services.  The assets sold were maintenance contracts with
34 customers, certain accounts receivable, inventory
located at customer sites or with field engineers, and
certain diagnostic equipment used by field engineers.  
Anacomp paid $1,200,000 for the above assets plus an
earnout up to $500,000 after one year based on their gross
receipts for 12 months post closing.  Anacomp also agreed
to assume the Company's obligations under the maintenance
contracts.  The inventory and diagnostic equipment were
sold at 80% of book value.  The sale was approved by
the U.S. Bankruptcy Court on December 1, 1997.  The sale
was effective as of November 1, 1997.  The Xerox
maintenance business currently represents approximately 35%
of the company's gross revenues.

Interscience had filed for protection under Chapter 11 of
the U.S. Bankruptcy Code on March 6, 1997.  The Company
submitted a plan of reorganization and a disclosure
statement on December 2, 1997 to the bankruptcy court.  The
Plan is subject to amendment prior to its confirmation
hearing.  A hearing on the adequacy of the disclosure
statement and the accompanying plan is presently scheduled
for January 7, 1998.

Interscience continues to operate its business selling
consumable products (including its patented fusing agent)
and its maintenance services for Siemens laser printers and
other non-Xerox peripherals.


LAMONTS: Court Approves Reorganization Plan
-------------------------------------------
Lamonts Apparel, Inc., which operates 38 family apparel
stores in five northwestern states, announced that
the U.S. Bankruptcy Court in Seattle has confirmed the
company's Plan of Reorganization, which describes the
manner in which Lamonts will restructure its debt.  The
Plan is expected to become effective on Jan. 31, 1998, at
which time Lamonts will emerge from Chapter 11 protection.  
The company will exit with $42 million of financing under
the terms of its existing agreement with BankBoston, N.A.

Mr. Schlesinger recalled that "When new management came on
board three years ago, we found a retail chain that was
unfocused in its merchandising and marketing strategies.  A
number of stores had not operated profitably and were
subsequently closed in order to redirect resources to
profitable operations.  "Today, Lamonts is a smaller but
stronger competitor and the preferred source of casual
family clothing for the customer seeking popular branded
apparel at value pricing.  

"Our position as a Northwest-based regional retailer gives
us a competitive advantage in assessing and meeting the
needs of families in the five Northwestern states.  The
seasoned managers we have attracted to our team are
continually fine-tuning our merchandising strategy to
expand and improve our product offerings."  Lamonts also
announced a new five-member board of directors, which will
commence responsibilities once the company emerges from
Chapter 11.  The new board will include Mr. Schlesinger and
Loren R. Rothschild, Lamonts' current vice chairman, as
continuing director; as well as Paul M. Buxbaum, chief
executive officer of The Buxbaum Group; Stanford Springel,
management consultant; and John J. Wiesner, former chief
executive officer of C.R. Anthony Company.

Confirmation of the Plan followed a hearing to assure that
all reorganization requirements had been met under the
Bankruptcy Code, including approval by the requisite
majorities of creditor and shareholder classes.  The
Plan calls for creditors and shareholders to receive an
initial distribution of nine million shares of new common
stock in the reorganized company. Various classes of
warrants will also be distributed as detailed in the Plan
and Disclosure Statement.  The old common stock and notes
will be canceled when the Plan takes effect.


MANHATTAN BAGEL: Recognizes Franchise Advisory Council             
------------------------------------------------------
Manhattan Bagel Company, Inc. (Nasdaq:  BGLSQ) today
announced that it has recognized the independently
elected MBC Franchise Advisory Council as the official
association representing the chain's franchisees.

The 12-member council is comprised of one representative
for each of the Company's regions, including two members
for the heavily stored Pennsylvania/Southern New
Jersey/Delaware region.  Candidates were placed into
nomination and elected by the entire franchisee body, with
ballots tabulated under franchisee and Manhattan Bagel
Company (MBC) supervision.

"We are truly an independent group, and have no agenda
other than serving the best interests of the MBC
franchisees," said Bob Higgs, president of the
council.  Higgs, representative for the Northern New
Jersey/Lower New York State region, was elected president
in a vote by council members at the initial meeting this
month.  The council plans to convene four times a year.

The process of establishing the council began several
months prior to Manhattan Bagel Company's filing for
Chapter 11 Bankruptcy Protection on November 19, 1997.  
Subsequent to the filing, Manhattan Bagel regional
franchisors formed a separate independent Regional
Franchise Association (RFA). Jack Mangan, regional
franchisor for Georgia and the Carolinas, was elected
president of that group.

Other members elected by the franchisees are:  Pat
Wangsness, representative for Virginia/D.C./Maryland, Peter
Bulkley, for Ohio/Michigan/Pittsburgh; Tom Collins, for
Rhode Island/Massachusetts/ Connecticut; Bob Hendrickson,
for Florida; Nick Panagopoulos, for Georgia and
the Carolinas; Shirley Monahan and Steve Ratowski for
Pennsylvania/Southern New Jersey/Delaware; Wassim Issa, for
Upstate New York/Metro Cleveland; Paul Barnett for Texas;
Joanna Daszek, for Southern California; and Joel Carson,
for Northern California.

The council also elected Wangsness as vice president,
Bulkley as secretary and Collins as treasurer.
Among other things, the council will appoint an advertising
committee that will work with MBC on future programs, and
monitor disbursements from and payments to the fund.  
Committees are also being formed for new product
development, purchasing and Chapter 11 liaison.

The initial meeting of the council was held on December 3
and 4 at the Sheraton Hotel in Eatontown, N.J.  Following
the meeting, detailed minutes and a letter from Higgs were
mailed to the entire membership.  "We intend to emerge
a better, larger and stronger group than when we started,"
said Higgs.

Sanford (Sandy) Nacht, the turnaround consultant retained
by MBC, commented:  "Formation of the council represents a
significant step in our turnaround process.  It establishes
an important vehicle for input and communication.  We will
work hand-in-hand to address all areas of concern."

Nacht, who has worked extensively with franchise and retail
companies, added:  "A franchise organization is like a
three-legged stool, comprised of the franchisor,
franchisees and regional franchisors.  If any of these
groups pull in a different direction, the stool isn't
sturdy.  We intend to do our best to ensure that all three
'legs' are working together for our mutual interests."

Manhattan Bagel, headquartered in Eatontown, N.J.,
currently has approximately 320 franchised, licensed or
company-owned stores in 19 states and Washington, D.C.  The
Company also operates manufacturing plants in Eatontown,


MAX: Given 10 Days to Return Airplane
-------------------------------------
Dornier Aviation has requested one of the five planes it
provides Mountain Air Express, and a federal bankruptcy
judge has given the airline until December 22 to hand it
over. Dornier, maker and lessor of the 32-seat turboprop
planes that MAX flies, made a request late Thursday for the
plane's return this weekend, and MAX immediately filed a
notice of appeal.

In an emergency hearing in Denver, Judge Sidney Brooks gave
MAX 10 days to return the plane. The judge ruled that
Dornier has the right to repossess one of the airline's
planes because a short-term lease had expired last month.
But the judge also urged the two sides to work out a deal
to keep the plane in MAX's fleet.  The continued use of the
plane is vital to MAX's survival and emergence from
bankruptcy.

MAX will appeal the decision to the U.S. District Court, a
move that, if heard, could delay the repossession. MAX
officials said the delay could give them time to work out a
deal with Dornier.  Dornier officials said the company is
open to a deal, but hasn't been approached by MAX.  They
also said the company could turn around and lease the plane
to any of several other clients immediately.  If that
happens, MAX would be forced to change its flight schedules
and accommodate potentially thousands of passengers during
the peak holiday period.

MAX officials say they have not made those changes, but
they won't cut any destinations from their roster -
including Steamboat Springs and Gunnison, to be added next
week.   


MOLTEN METAL: Wants to Pay Employees' Prepetition Claims
--------------------------------------------------------
At a December 17 hearing, and upon the debtor's motion for
authority to pay employees' prepetition vacation, expense
and benefit claims, Judge Carol J. Kenner, authorized the
payment in full of expense reimbursement claims sought to
be paid by the debtors as well as that portion of aggregate
vacation claims that are entitled to priority under the
Bankruptcy Code.  A continued hearing is set for December
23, 1997 to consider the balance of the relief sought by
the debtors.


MONTGOMERY WARD: Fixed Fee to Arthur Andersen
---------------------------------------------
Montgomery Ward Holding Corp. obtained authority by the
court to retain Arthur Andersen LLP to provide internal
audit and tax services.  Payment was to be made based on
hourly billing.  On November 14, 1997, Andersen and the
debtors reached a fixed fee agreement regarding services
that are not covered by the contract and for which Andersen
had been billing the debtors on an hourly basis.  
Montgomery Ward ahas agreed to pay Andersen $511,600 for
these services, including out of pocket expenses.

Andersen would be relieved of any obligation to submit
monthly statements or file fee applications for its fees
charged under the agreement.  In addition, the debtors
request that they be allowed to pay Andersen the full
amount owed under the agreement, rather than 80% of the
fees as set forth in the Administrative Order.


MONTGOMERY WARD: Requests Rejection of Equipment Leases
-------------------------------------------------------
Montgomery Ward Holding Corp., et al., has requested that
the court authorize the rejection of certain equipment
leases with a Sanwa Business Credit Corporation.  The
monthly rent for the equipment leased totaled about
$63,000, and the term of the leases continued until August
31, 1998.

The debtor no loner needs the equipment leased in the
operations of its business. Montgomery Ward is closing 46
stores that utilized the leased equipment.


MONTGOMERY WARD: Seeks More Professionals
------------------------------------------
Montgomery Ward Holding Corp., et al., is seeking court
approval to employ and retain the Bentley Group as
Management Consultants for Customer and Product service and
support.Bentley will be compensated on a fixed fee basis
pursuant to a contract between the parties.  The primary
objectives of the services to be provided is to improve the
efficiency and manageability of the call management
process, recude the cost of service delivery and reduce the
cost of inventory by designing and implementing an
inventory m,anagement process and improving inventory
distribution ppprocesses and develop an optimized
servicesupport model and develp a comprehensive service
plan.

Bentley will be paid no more than $350,000 plus expenses
for services rendered.

The debtors are also seeking court approval to retain and
employ Holland & Hart as Special Counsel in connection with
a purported class action case pending in Wyoming. Holland &
Hart will be paid their usual hourly rates.


PHOENIX INFORMATION: Files Chapter 11
-------------------------------------
Phoenix Information Systems Corp, Phoenix Systems Group
Inc. and Phoenix Systems Ltd. filed for Chapter 11
protection on December 3, 1997 in the U.S. Bankruptcy Court
for the District of Delaware.  The debtors have operated
under the additional names: SC Primo and Dynasty Travel
Group. A meeting of creditors is scheduled for January 9,
1998.  Co-Counsel for the debtors are LeBouf, Lamb Greene &
Macrae, LLP and Young, Conaway Stargatt & Taylor.


RICKEL HOME: Seeks Approval for Stalking Horse Agreement
--------------------------------------------------------
On December 24, 1997, the court will entertain the motion
of the debtor, Rickel Home Centers, Inc., seeking approval
for a Stalking Horse Agreement for the sale of the debtor's
leases and fleet. The debtor is also seeking approval of
bidding procedures, the payment of a 3% break-up fee, and
authorizing borrowing of up to $1 million by spending the
deposit under the Stalking Horse Agreement.

The debtor's most important remaining asset is its 53
leases representing all of the stores and the debtor's
headquarters and distribution center.  The debtor received
two proposals for a bulk purchase of its leases.  One, from
Rickel Realty (members of Rickel Realty include members of
the Creditors' Committee) as well as a less attractive
proposal from a joint venture of Schottenstein/Bernstein
Capital Group LLC and Keen Realty.

The Stalking Horse Agreement provides for the sale of the
leases and the fleet for a total purchase price of $30.55
million.  To secure its performance under the agreement,
Rickel Realty has agreed to post a deposit of $1 million.  
The debtors are seeking a $2.45 million overbid increment.

The court has reserved January 22, 1998 as the day for a
hearing on which it will hear one or more subsequent
motions by the debtor for the approval of the disposition
of its property - to assume and assign those of the leases
that will be sold.  The debtor expects to consider bids and
to determine the best qualifying bids by January 22.


WESTERN PACIFIC: Announces Cash Infusion
----------------------------------------
On Friday, Western Pacific Airlines announced it has
received approximately $1.5 million from Smith
Management Company ("SMC") as an advance against the
commitment of $20 million "debtor in possession" financing,
which was approved by the Court on December 3, 1997.  The
$20 million commitment is in addition to Smith's initial
funding of $10 million, which occurred December 4, 1997,
for a total of $30 million.

In order to make this possible, SMC has agreed that certain
conditions in the initial term sheet have been satisfied
and has postponed Western Pacific's requirement to file a
plan of reorganization, which was originally due December
20, 1997.  "This is truly a measure of Smith's confidence
in Western Pacific and its future and allows us to continue
our positive discussions with the Creditor's Committee,"
said President and Chief Executive Officer Robert A.
Peiser.  

Peiser added,"The only remaining requirement necessary to
consummate the agreement with SMC for the full $20 million
is the filing of a plan of reorganization that is
acceptable to Smith Management.  Any concerns that Smith's
intentions were not to provide ongoing, adequate funding
should be alleviated by today's announcement."

                            ---------

A listing of meetings, conferences and seminars
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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.,Princeton, NJ,  and Beard Group, Inc.,
Washington DC.  Debra Brennan and Rebecca A.
Porter, Editors.

Copyright 1997.  All rights reserved.  This
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