TCR_Public/971229.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 29, 1997, Vol. 1, No. 87
                      
                      Headlines

ALPHASTAR: Looks to Reject Executory Contracts
DIXONS US HOLDINGS: Motion for Extension of Exclusivity
DOW CORNING: Settlement With Unione Italiana
ERD WASTE: Order Setting Hearing for Sale
HAYES MICROCOMPUTER: Investors OK Access Beyond Merger

KIA MOTORS: Is Ford in Kia's future?
KOENIG SPORTING: Hearing to Extend Exclusivity
L.LURIA: Court Sets Bar Date of February 28, 1998
MANHATTAN BAGEL: Needs Time to Assume/Reject Leases MARTIN
LAWRENCE: Court Extends Objection & Distribution Date

MIDCOM COMMUNICATIONS: Landlords Complain No Rent Paid
MOLTEN METALS: Committee Taps Darr of KPMG Peat Marwick
MONTGOMERY WARD: Seeks Postpetition Agreement with Bank One
PAYLESS CASHWAYS: Memorandum Opinion of Court
PHOENIX INFORMATION: Court Sets January 14, 1998 as Bar Date

POCKET: DIP Lenders Object to Assignment of Causes of Action
SILAS CREEK: Notice of Bar Date with Respect to Leases
SMITH TECHNOLOGY: Debtors Seek to Reject 13 Leases
U.S. ONE: To Retain and Employ Coopers & Lybrand
WESTERN PACIFIC: Court Sets January 23, 1998 as Bar Date
WESTERN PACIFIC: Two Join Board

                          ---------

ALPHASTAR: Looks to Reject Executory Contracts
---------------------------------------------
Alphastar Television Network Inc. and Tee-Comm Distribution,
Inc. seek court authority to reject intercompany agreements,
license agreements, indemnity agreements, non-disclosure
agreements, employment agreements, direct broadcast
satellite affiliate agreements, service agreements,
programming agreements, carriage agreements, software
agreements, consulting agreements and various other
contracts.

The court entered an order approving the sale and assignment
of the debtors' contract rights for satellite transponder
services to Loral Space Com Corporation d/b/a Loral Skynet.  
Debtors were forced to discontinue the provision of
programming services in August 1997.

At a second auction, Champion Holding Company was the
successful bidder to purchase substantially all of the
debtor's assets. The asset sale closed on December 11, 1997
and all remaining employees of the debtors were laid off on
December 12, 1997.  The debtors are no longer conducting
operations, and have no need for the contracts that they now
want to reject.


DIXONS US HOLDINGS: Motion for Extension of Exclusivity
-------------------------------------------------------
The debtors, Dixons US Holdings, Inc., et al. filed a motion
for an order extending the debtors' exclusive periods in
which to file a plan of reorganization and to solicit
acceptances thereof.  A hearing to consider the motion will
be held on January 7, 1998.

The debtors seek an extension of approximately 90 days, from
December 29, 1997 through and including March 30, 1998, for
the period in which to file a plan, and an extension through
May 29, 1998 to solicit acceptances to such a plan.

The debtors contend that they have made significant progress
on numerous fronts since the cases were filed, and the size
and complexity of these cases make a further extension
necessary to maintain the orderly progress of these cases to
allow the debtors to resolve the myriad issues impacting
plan formulation.


DOW CORNING: Settlement With Unione Italiana
---------------------------------------------
Judge Arthur J. Spector entered an order authorizing and
approving the compromise and settlement with Unione Italiana
Reinsurance Company of America.  The settlement agreement
results in substantial benefits to the debtor's estate
including, but not limited to: settlement of complex
litigation and payment by Unione of the settlement amount of
$1,440,000 in addition to and not inclusive of any payments
previously made by Unione to the debtor, which funds,
subject to further orders of the court, shall be held in the
Unione Settlement Fund.


ERD WASTE: Order Setting Hearing for Sale
------------------------------------------
ERD Waste Corp. filed a motion for an order approving
procedures and notice with respect to the sale of
substantially all of the equipment of Absorbent
Manufacturing & Technologies, Inc. to Environmental Filter
Corp.  The court has entered an order for a hearing on
December 30, 1997.

In order for a third party offer to be considered, it must
be in an initial amount of $487,500 with any further
overbids made at the hearing to be in increments of at least
$25,000 accompanied by a refundable good faith deposit of
20% of the offered purchase price, $21,750 of which may be
released to EFC if a sale is approved to another higher and
better offer.


HAYES MICROCOMPUTER: Investors OK Access Beyond Merger
------------------------------------------------------                    
The Atlanta Journal/Constitution reported on December 24,
1997 that Hayes Microcomputer Products of Norcross said
Tuesday that the company's shareholders have unanimously
approved a merger of the modem maker with Access
Beyond Inc.  A formal announcement was planned for Friday.
If the deal is approved by shareholders of Maryland-based
Access Beyond, the two companies will become Hayes Corp.,
with 60 million shares of stock that will trade on the
Nasdaq exchange under the ticker symbol HAYZ.

"This will be a tremendous opportunity for people who have
wanted to invest in Hayes," said Jim Jones, Hayes' chief
financial officer.  Access Beyond shareholders are to vote
Monday. Approval would mean Hayes Corp. stock could start
trading the next day. Original plans called for naming
the combined company Hayes Communications, an idea scrapped
because the rights to the name were already held in some
states, officials said.

Merger terms call for each shareholder of Hayes to receive
about 4.63 shares of Access Beyond stock, giving them about
79 percent of the combined company, he said. Access Beyond
shares closed at $4.62 1/2 per share Tuesday. Should
Access Beyond retain that value, the result would be a
combined company with a market valuation of about $277
million.

The combined company will have revenue of about $275
million, Jones said. Dennis Hayes, founder and chairman of
the company, holds nearly 50 percent of the stock. Other
shareholders include Singapore-based Acma Ltd., which has
28 percent, and two Hong Kong companies, Kaifa, which holds
8 percent, and Wong's, which holds 4 percent.

Remaining stock is held by four smaller shareholders, one of
which is the company's employee stock ownership plan. Hayes,
celebrating its 20th anniversary in 1998, virtually created
the modem market, then plummeted into bankruptcy. It emerged
in 1996 with several solid quarters but ran into trouble in
1997 due largely to industry upheaval and uncertainty about
standards for the new 56-kilobits-per-second modem.

The company's work force has been pared from 1,100 to about
700. Joe Formichelli, hired in 1996 to become chief
executive, left in September. He was replaced by P.K. Chan.


KIA MOTORS: Is Ford in Kia's future?
------------------------------------                            
The Morning Star, Wilmington NC reported on December 24,
1997 that the South Korean government will consider selling
debt-ridden Kia Motors Corp. and other bankrupt companies to
foreign buyers as a way of getting the struggling nation
back on its feet, said Kim Won Gil, economic
aide to President-elect Kim Dae Jung.

"It's a time for more efficient management," Kim Won Gil
said. "If a buyer turns a company around, we should
appreciate the buyer regardless whether the buyer is foreign
or belongs to a Korean industrial group."  Ford Motor Co. is
the likeliest Detroit automaker to take an interest in
Kia, because it already owns 9.5 percent of the company and
because its Mazda unit owns 8 percent. Kia has sold 50,394
vehicles in the U.S. this year.

Kia dealerships have closed in Wilmington and Jacksonville.
In Wilmington, Kia first designated one garage, then
another, then a third as the place to take Kias for service.
Mad Hatter Auto Car Care now does the work.  Alex Trotman,
Ford's chairman, recently told reporters he's not seeking an
expanded interest. However, he said if the Koreans asked him
to consider such a move, "I'd react by buying a plane ticket
and go see them to negotiate."

Besides negotiating about price, Ford would also likely
negotiate about expand access to the domestic Korean auto
market, which the company has long complained is one of the
most closed markets in Asia.


KOENIG SPORTING: Hearing to Extend Exclusivity
----------------------------------------------
A hearing concerning the motion of Koenig Sporting Goods,
Inc. to extend the exclusive periods in which to file and
obtain acceptance of a plan of reorganization is set for
January 8, 1988.  


L.LURIA: Court Sets Bar Date of February 28, 1998
-------------------------------------------------
Judge Robert A. Mark entered an order setting the claims bar
date of February 28, 1998 in the Chapter 11 case of L.Luria
& Son, Inc.

The court also entered an order authorizing the debtor's
assumption of 3 leases in Pembroke Pines, Florida, Boca
Raton Florida, and Miami Florida. The debtor will assign the
leases to Michaels Stores, Inc. and Michaels will pay the
debtor $500,000 to acquire the debtor's right, title and
interest in each of the leases.


MANHATTAN BAGEL: Needs Time to Assume/Reject Leases
---------------------------------------------------
Manhattan Bagel Company, Inc., debtor, states that the
company has commenced the process of analyzing which of its
leases it will assume or reject. The debtor currently has
approximately 314 open stores operating in 17 states and the
District of Columbia. Given the size of the debtor's
operations, the debtor states that the number of leases and
store locations require more time to determine whether to
reject or assume each lease.

Furthermore, the debtor is the tenant under many leases
where a franchisee is a subtenant, and the franchisee pays
the rent directly to the landlord.  The debtor does not know
in some cases if the franchisee has been paying rent.

The debtor is seeking an extension of time from January 18,
1998 to May 18, 1998.


MARTIN LAWRENCE: Court Extends Objection & Distribution Date
------------------------------------------------------------
The Court in the Chapter 11 case of Martin Lawrence Limited
Editions, Inc., entered an order extending the date by which
claims for affirmative relief and objections to claims filed
against the debtor's estate must be filed, and by which
distributions to Class 11 unsecured creditors must be made.  
The date is continued through and including February 18,
1998.


MIDCOM COMMUNICATIONS: Landlords Complain No Rent Paid
------------------------------------------------------
Forbes-Cohen/Nemer Associates, and Koppy Nemer/Forbes Cohen
Associates, Lessors, filed a motion requesting that the
debtors, Midcom Communications, Inc. et al. be directed to
assume or reject unexpired leases and the Lessors object to
debtor's motion to extend the time to assume or reject their
leases.

The debtors are lessees pursuant to two leases with combined
monthly rent of over $39,000. plus increases in taxes and
electricity.  In addition, the Lessors claim that MidCom
owes the Lessors arrearages in rent in the sum of over
$100,000 plus increases in taxes, and electricity for the
months of November and December, 1997.  The Lessors claim
that since filing their petition, the debtors have not made
any payments to the Lessors, nor have they received adequate
protection for their continued possession of the premises.

The Lessors request that the court enter an order requiring
debtors to assume or reject the leases within 15 days from
the date of filing this motion, or, in the alternative,
within the time limits set forth in the bankruptcy code.


MOLTEN METALS: Committee Taps Darr of KPMG Peat Marwick
-------------------------------------------------------
The Creditors Committee in the Chapter 11 case of Molten
Metals Technology, Inc. et al. has filed a motion for
authority to employ Stephen B. Darr of KPMG Peat Marwick LLP
as financial advisor to the Creditors Committee.

The Committee would like Darr to assess the debtors'
financial position, review and assess the debtors' financial
projection, review and assess certain historical
transactions, analyze the monthly operating reports, review
and assess the plan of reorganization, advise the Committee
with respect to alternatives for consideration to enhance
the plan of reorganization, and provide expert testimony,
among other services.

KPMG has represented that their fees will be at the blended
rate of $210 per hour.


MONTGOMERY WARD: Seeks Postpetition Agreement with Bank One
------------------------------------------------------------
Montgomery Ward Holding Corp., et al. seek authorization to
enter into a postpetition credit card retailer agreement
with Bank One, N.A.  Pursuant to this agreement, Montgomery
Ward would honor charge cards issued by Bank One.  These
charge cards would be issued pursuant to the Sony Preferred
Card private label card program and could be used by the
debtors' customers to purchase certain merchandise or
services.  Montgomery Ward agrees to honor all valid Sony
Preferred Cards for the sale of certain Sony Electronics
Inc. merchandise or services and for incidental related non-
Sony products.


PAYLESS CASHWAYS: Memorandum Opinion of Court
---------------------------------------------
Judge Arthur B. Federman wrote a Memorandum Opinion after a
group of unsecured claimants filed a motion to compel
separate classification of their deferred compensation
claims in this Chapter 11 case.  The claimants' motion was
denied.  The Court stated that based on a plain reading of
the 1993 Senior Subordinate Note Indenture, deferred
compensation due claimants was not entitled to priority
treatment.  The Court stated that the claimants were given
an opportunity to prove a contrary meaning.

There are nine retirees who joined in the contested matter,
and they hold claims, scheduled by the debtor in the amount
of $6,497,021.48.  The Court stated that there was no
evidence of the intent of the parties.  They also offered no
proof to prove the burden of entitlement to priority of
their claims.


PHOENIX INFORMATION: Court Sets January 14, 1998 as Bar Date
------------------------------------------------------------
In the Chapter 11 case of Phoenix Information Systems Corp.,
Phoenix Systems Group Inc. and Phoenix Systems Ltd., the
court set January 14, 1998 as the last date for filing
proofs of claim against the debtors and debtors in
possession.  For those claimants who agree with the amount
of their scheduled pre-petition claim and the classification
of the scheduled pre-petition claim, they need not file a
proof of claim


POCKET: DIP Lenders Object to Assignment of Causes of Action
------------------------------------------------------------
The DIP Lenders object to the motion of Pocket
Communications, Inc., debtor, for approval of the
"Stipulation and Consent Order Authorizing Assignment of
Certain Causes of Action to Creditors' Committee."

The DIP Lenders state that they are "amazed that such a
short Motion and Stipulation could be so objectionable.  Far
from being in the best interest of the debtors' estate, the
Stipulation is a complete waste of time and money and there
is no basis for approving it."

The motion requests the authority to assign to the Committee
the right to bring unidentified preference actions on behalf
of the debtors' estates..  Without mentioning the causes of
action, the potential defendants, the possible defenses and
counterclaims or the chances of success, that the DIP
lenders have a lien on all preference actions, and that
neither the debtors nor the Committee ever discussed the
motion with the DIP lenders.  They found the Committee's
wiliingness to assume responsibility for preference actions
without making these disclosures equally troubling.


SILAS CREEK: Notice of Bar Date with Respect to Leases
------------------------------------------------------
On November 26, 1997 the court entered an order approving
the motion of Silas Creek Retail, Inc. and Silas Creek
Retail, LP rejecting certain executory contracts and
unexpired leases.  Any person or entity with a claim arising
from the rejection of the leases or contracts must file an
original proof of claim with regard to such claim on or
before January 20, 1998.  The contracts are newspaper
advertising contracts, credit card processing contracts,
employment contracts, vehicle leases, Water, Mops, HVAC,
Security, pest control, and waste disposal contracts and
leases.


SMITH TECHNOLOGY: Debtors Seek to Reject 13 Leases
--------------------------------------------------
Smith Technology Corporation f/k/a Smith Environmental
Technologies Corporation et al., are asking the Court to
approve the rejection of thirteen unexpired leases of
nonresidential real property.  The leases are all for office
space, and the debtors have no further need for any of the
space.  According to the debtors, the rent and other charges
required to be paid under the leases impose continuing
burdensome obligations upon the debtors that far outweigh
any possible value the leases might have as assets of the
debtors' estates.


U.S. ONE: To Retain and Employ Coopers & Lybrand
-------------------------------------------------
U.S. One Communications Corp. and its subsidiaries filed a
motion for the entry of an order authorizing the retention
and employment of Coopers & Lybrand LLP to perform certain
tax-related services for the debtors.  Coopers & Lybrand
will provide services to the debtors related to their
federal, state and local tax obligations.  The firm will
review prior returns for compliance with applicable law.  In
addition, Coopers & Lybrand will provide the debtors with
consulting services for past, pending or future filings.  
Further, it will assist the debtors in obtaining refunds of
overpaid sale sand use taxes.

Coopers & Lybrand will charge hourly rates ranging between
$350 for a partner and $100 for staff.  With respect to its
compensation relating to the recovery of any overpaid sales
and use taxes, Coopers & Lybrand's total fee shall not
exceed 25% of such recovery.


WESTERN PACIFIC: Court Sets January 23, 1998 as Bar Date
--------------------------------------------------------
The date of January 23, 1998 was established as the Claims
Bar Date in Western Pacific's bankruptcy case, and shall be
the last date on which proofs of claim or interest may be
filed against the bankruptcy estate of Western Pacific.


WESTERN PACIFIC: Two Join Board
-------------------------------
Western Pacific Airlines announced the appointment of John
Adams and Gregory Anderson to the airline's
board of directors. Adams is president of New York's Smith
Management Co., which has committed $30 million so far in
"debtor-in-possession" to WestPac to help bring the airline
out of Chapter 11 bankruptcy. Anderson is president of
Phoenix's Anderson & Wells Co., which controls a partnership
that is an investor in Smith Management's financing for
WestPac. Adams and Anderson join WestPac President Robert
Peiser, the airline's chief financial officer, George
Leonard, and Western Pacific Chairman Ed Beauvais on the
carrier's board of directors.

                    -----------

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