TCR_Public/980113.MBX     T R O U B L E D  C O M P A N Y   R E P O R T E R

         Tuesday, January 13, 1998, Vol. 2, No. 8

2CONNECT: Files for Bankruptcy Protection
CUSTOM DISTRIBUTION: $2 Million Property Tax Reduction
FARM FRESH: Ratings Lowered by S&P
FOXMEYER: Trustee Seeks Settlement With Dupont Merck
FOXMEYER: Trustee May Have Some Multi-Million $$ Claims

MIDCOM COMMUNICATIONS: To Reject Real Property Leases
OLD AMERICA: Motion to Sell Substantially All Assets
OLD AMERICA: Proposed Cure Payments
PHOENIX INFORMATION: Equity Seeks Release Confidential Info
RDM SPORTS: Collection of Accounts Receivable

THE WIZ: Seeking Authority to Sell Excess Inventory
TOWN & COUNTRY: Names Ronald F. Stengel Interim CEO
UNISON HEALTHCARE: Three Subsidiaries File
VITALE: Interim Order Authorizing Use of Cash Collateral
WESTERN PACIFIC: A Lot of Finger Pointing
WESTERN PACIFIC: Court Authorizes Rejection of Contracts
WESTERN PACIFIC: MAX Wants Administrative Expense

Meetings, Conferences and Seminars


2CONNECT: Files for Bankruptcy Protection
2 Connect Express, Inc. (OTC Bulletin Board: CNTCU) today
announced that it has filed a voluntary petition
for protection under Chapter 11 of the United States
Bankruptcy Code, in order to protect the interests of its
creditors and shareholders.

The Company expects to reorganize its business affairs,
including closing non-productive stores, relocating
selected stores and reducing overhead expenses.  The
Company plans to file a plan of reorganization.

2Connect Express, Inc., is a specialty retailer and direct
consultative marketer of communications related products
and services under the name "2Connect, America's Total
Communications Store".  2Connect is the first independent
retailer and direct sales provider offering one stop
shopping for communications related products and services
to the individual and business community.  The Company
currently operates ten stores in South Florida.
2Connect Express Inc. says it has filed a voluntary
petition for protection under Chapter 11 of the United
States Bankruptcy Code, in order to protect the interests
of its creditors and shareholders.

CUSTOM DISTRIBUTION: $2 Million Property Tax Reduction
Chief U.S. Bankruptcy Judge William Gindin ruled last month
in Custom Distribution Services, Inc. v. City of Perth
Amboy Tax Assessor that the city over assessed a 23-acre
Superfund Site by $2 million partly because it failed to
consider cleanup costs or the "stigma" attached to the
contaminated property.

The Judge ruled that the city should reduce the assessment
on the site by one-tenth of the expected cleanup costs of
$1.39 million annually over ten years, plus another 20
percent annually for "contamination stigma."

"This is the first time that any court in New Jersey has
actually reduced an assessment based upon contamination
stigma," states Robert J. Cirafesi, partner in the
Woodbridge, NJ-based law firm of Wilentz, Goldman &
Spitzer, P.A., the company's trial counsel before Judge

Cirafesi, who specializes in real property tax appeals,
states that while the New Jersey State Supreme Court
recognized the potential impact of stigma on
environmentally challenged sites in re Inmar in 1988, this
decision is the first to quantify it.  According to the
city's tax assessor, the State Street property was
assessed at $3.8 million.  However, at the conclusion of
trial, Judge Gindin estimated the property's valuation
closer to $1.02 million.

The industrial property was used by National Lead
Industries/Dutch Boy Paint Facility for metal and smelting
refining and paint manufacturing from 1904 to 1980.  State
and federal authorities have determined that high levels
of hazardous metals and organic compounds were discharged
onto the property.  A 1990 and 1991 initial tax assessment
of $8.1 million had already been settled by Cirafesi and
the city resulting in a reduction to $4.03 million.
This most recent case was for the years 1992 through 1996.

The excessive real estate tax burden forced CDS to file for
bankruptcy.  "If the company had not filed for bankruptcy,
the state's statute of limitations for real property tax
appeals would have run out," said Louis T. DeLucia, another
partner in the Wilentz firm and the company's bankruptcy

FARM FRESH: Ratings Lowered by S&P           
Standard & Poor's lowered its ratings on Farm Fresh Inc.'s
$15.2 million convertible subordinated debentures and FF
Holdings Corp.'s $81 million 14.25% senior notes to 'D'
from single-'C'following the announcement that both
companies filed for Chapter 11 bankruptcy protection on
Jan. 7, 1998.  Standard & Poor's also affirmed its 'D'
rating on Farm Fresh Inc.'s $165.0 million 12.25% senior
notes due Oct. 1, 2000.

Additionally, Standard & Poor's revised its corporate
credit rating on Farm Fresh and FF Holdings Corp. to not
meaningful from double-'C'.  The Chapter 11 bankruptcy
protection filing was made in association with the
company's September 1997 agreement to sell most of its
assets to Richfood Holdings Inc. for $220 million in cash,
$30 million in assumed leases and 1.5 million warrants to
purchase Richfood's common stock.  Richfood, a food
wholesaler based in Richmond, Virginia and Farm Fresh's
largest supplier intends to continue operating 44 of Farm
Fresh's 47 supermarkets after the transaction closes.

FOXMEYER: Trustee Seeks Settlement With Dupont Merck
Bart A. Brown, Jr., the chapter 7 trustee for Foxmeyer
Corporation et al. is seeking entry of an order settling
chargeback and reclamation claims with Dupont Merck
Pharmaceutical Co.

The material provisions of the agreement are as follows:

The estates' chargeback claim is allowed in full.  $423,145
to offset prepetition general unsecured claim of DMP and
$473,765 used as dolllar for dollar reduction against and
satisfaction of reclamation claim of DMP.

DMP's Administravtive Claim.  The remaining reclamation
claim of $435,501 and Chapter 11 administrative claim of

DMP's Unsecured Claim.  Allowed unsecured claim in the
amount of $5,295,029 (scheduled amount of $6,627,440 less
reclamation component of $909,266 less chargeback offset of

Estates' Claim Preservation.  The Trustee reserves any and
all rights he or the estates have in connection with any
potential actions against DMP for preferences, fraudulent
conveyances and fraudulent transfers.  The Trustee will
seek any recovery on a Recovery Action from DMP and not
from the assignees of DMP's claims.

FOXMEYER: Trustee May Have Some Multi-Million $$ Claims
In 1993, FoxMeyer retained Woltz & Associates, Inc. to
assist it in specifically defining FoxMeyer's needs in an
integrated computer system.  Woltz prepared joint
requirements development reports.  Foxmeyer then solicited
proposals from various information technology providers.  

SAP America, Inc. was chosen and paid several million
dollars for an operating system and software.  Andersen
Consulting LLP was paid approximately $20 million to
install and implement the SAP system.  Pinnacle Automation,
Inc. and its subsidiaries provided FoxMeyer with the
hardware, information and logistical support for the
Washington Courthouse warehouse.  

In late 1995 FoxMeyer began operating the SAP sysetm.  
However, the system was not able to handle the normal
volume of information that FoxMeyer generated on a daily
basis.  It frequently shut down, leaving FoxMeyer without
any computer systems to perform its sales and
administrative tasks.  The warehouse was not properly
implemented and/or integrated into the SAP system.  In
early 1996 there were multi-million dollar inventory

The Trustee is evaluating all potentially meritorious
claims that could result in increasing the size of the
distributable assets of the estate upon liquidation.  The
Trustee is asking for the court to enter an order requiring
additional document and information in the control of SAP.,
Andersen, Pinnacle and Woltz, to be provided to the
Trustee.  He is also seeking examination of their employees
with respect to information relating to the computer
systems.  The Trustee is seeking examination of the
entities relating to the debtors' potential claims, which
in this case could be worth millions of dollars.

MIDCOM COMMUNICATIONS: To Reject Real Property Leases
Judge Walter Shapero entered an order on January 5, 1998
authorizing rejection of nine real estate leases with total
monthly base rents of over $7,000.  The leases were in
Georgia, Texas, California, Connecticut, New York,
Virginia, Illinois, New Jersey, and Indiana.  The occupants  
were PacNet Sales, M/C Sales, and Carrier Sales.

OLD AMERICA: Motion to Sell Substantially All Assets
Old America Stores, Inc., Old America Wholesale, Inc. and
Old America Stores, Inc., debtors, filed a motion seeking
an order authorizing the debtors to enter into an asset
purchase agreement for the sale of the debtors' retail
business operations and related non-cash assets, or
alternatively, an agency agreement to conduct store closing
sales at all locations, authorizing the conduct of an
auction and approving bidding procedures, protections and a
break-up fee.

The debtors subsequently modified the Sale Motion to seek
authority to establish a two-track bidding and auction
procedure to solicit competitive bids to the asset purchase
offer made by Robert E. Kirkland and to solicit liquidation
bids.  January 16, 1998 is set as the hearing date.

Any "Qualified Purchaser" must submit a certified check in
the amount of $600,000.  Any overbid at the Sale Auction
must be in an amount that is not less than $750,000 higher
than the purchase price set forth by Robert E. Kirkland,
and subsequent bids must be in additional increments of not
less than $50,000.

OLD AMERICA: Proposed Cure Payments
A hearing on the proposed assumption and assignment of
certain unexpired leases and executory contracts is
scheduled for January 16, 1998.  The records of the
debtors, Old America Stores, Inc., Old America Wholesale,
Inc. and Old America Stores, Inc. indicate that the cure
payments are in connection with the potential assumption
and assignment of the Designated Agreement.  Payments of
the proposed cure amounts will be made, with respect to any
Designated Agreement on the Closing.

The Lease Cure Amounts total about $500,000 and the
executory contract cure amounts total about $120,000.

PHOENIX INFORMATION: Equity Asks Release Confidential Info
The Official Committee of Equity Security Holders of
Phoenix Information Systems Corp. is asking the court to
direct the debtor to release certain proprietary
information of the debtor.

The Committee has a confidentiality agreement pursuant to
which the debtor has agreed to release certain proprietary
information to the Committee.  The committee can not pass
that information to third parties, including potential
buyers or investors.  The debtor has refused to permit the
information to be passed to third parties saying it would
be a potential breach of that certain Agreement of Sale
entered into by the debtor.  

The Committee alleges that the Agreement of Sale contains
certain provisions that are onerous to the estate in that
the potential buyer has a "lockup" provision that prohibits
the debtor from continuing to shop the company and/or its
assets.  Thus the Committee states that it is hampered in
performing its role to investigate and obtain, if possible,
other potential bidders and/or buyers who may have an
interest in the assets of the debtor.

RDM SPORTS: Collection of Accounts Receivable
RDM Sports Group et al. and Foothill Capital Corporation,
as agent for a group of lenders filed a joint emergency
motion seeking approval of certain parameters to enhance
the collection of accounts receivable.  They are asking the
court for the next available hearing date, as they believe
that the longer the accounts are not collected, the less of
a chance there will be to maximize the amount collected.

Foothill and the debtors seek authorization to compromise
and/or settle certain receivables without having to file a
separate motion in each instance.  Proposed parameters are
in the process of being submitted to the respective
committees for final approval.  

In addition, Montgomery Ward owes the debtors in excess of
$520,000, and the debtors seek authority to sell their
Montgomery Ward account receivable at the highest possible
price and in the exercise of the debtors' reasonable
business judgment.  Such sale would be separate and apart
from the collection parameters that will be presented to
the court in connection with this joint motion.   

THE WIZ: Seeking Authority to Sell Excess Inventory
By an order to show cause why their motion should not be
entered, the debtors, The Wiz, Inc. et al. state that it is
critical that they obtain authority as soon as possible to
sell certain Excess Inventory, consisting primarily of room
air conditioners.

The motion is set for January 15, 1998.

TOWN & COUNTRY: Names Ronald F. Stengel Interim CEO
Town & Country Corporation is pleased to announce the
appointment of Ronald F. Stengel as interim Chief
Executive Officer and a member of the Board of Directors.
Mr. Stengel is one of the foremost turnaround managers in
the country.

Mr. Stengel is the President and Chief Executive Officer of
R.F. Stengel & Co., Inc., a company organized in 1985 with
its principal focus in crisis management and turnaround or
reorganization consulting services. His clients have
included the Rytex Company, Storage Technology Corporation
and, most recently, Smith Corona Corporation, where he
engineered the transformation of the typewriter company
into a marketing and distribution oriented vendor of
small office/home office products. Previously, Mr. Stengel
was a partner in the reorganization advisory services
practice of Touche Ross & Co.

Town & Country Corp. voluntarily filed a pre-arranged plan
to reorganize under Chapter 11 of the Bankruptcy Code last
November. The financial restructuring is taking place at
the holding company level only and does not affect the
Company's operating subsidiaries or their relationships
with employees, customers and suppliers. The Company
expects the Bankruptcy Court to confirm its plan within the
next month.

"We are pleased with the progress we have made, and Ron's
expertise will enable us to accelerate the final
implementation of out strategic turnaround plan. As we
emerge from the court processes, we will have the necessary
capital and direction to allow us to concentrate on growing
and developing our core business," said Veronica Zsolcsak,
Chief Financial Officer of Town & Country.

The Board is actively recruiting a permanent Chief
Executive Officer to guide the Company longer-term.
Town & Country Corp. is an international manufacturer of
fine jewelry, with facilities in Massachusetts, New York,
Texas, Hong Kong and Thailand. Town & Country Corp. has
approximately 1,000 employees worldwide.

UNISON HEALTHCARE: Three Subsidiaries File
Unison HealthCare Corp. announced yesterday that three
of its subsidiaries have filed for bankruptcy protection in
Arizona. The filings, which involve 26 nursing homes in
Texas and Indiana, came after Omega Healthcare Investors
terminated the facilities' leases. Oakwood Health Care of
Arlington is included in the properties. It and the other
affected nursing homes will operate as usual until a ruling
is made in the bankruptcy case, spokeswoman Lisa Turner
said. The bankruptcy filings will not affect Unison's
operations in other states, company officials said. Unison
provides health services including nursing care,
rehabilitation therapy and pharmaceutical services.

VITALE: Interim Order Authorizing Use of Cash Collateral
By a court order entered December 22, 1997 the debtors,
Vitale Enterprises, Inc., et al. are authorized to continue
to use cash collateral in which First Union and NCB claim
an interest, until January 31, 1998.  

Pursuant to the entry of a separate order, Twin County
Grocers, Inc. is to be granted a first priority lien and
security interest in and to debtors' inventory to secure a
maximum of $100,000 per week (up to a maximum of $850,000
in the aggregate) in purchase price of goods sold and
delivered by Twin County to the debtors after the date of
this order.

The next hearing with respect to use of cash collateral has
been scheduled for January 27, 1998.

WESTERN PACIFIC: A Lot of Finger Pointing
The RockyMountainNews reported on January 10, 1998 that
Western Pacific founder Ed Beauvais broke a year's silence
Friday, saying he blames Chief Executive Robert Peiser for
running the airline into bankruptcy.

Beauvais, stripped of his title as chairman and his
$355,000 salary at a board meeting Tuesday, said he can now
respond to "cheap shots" from Peiser over the past year.

"I have opposed all the decisions that Peiser's management
has made," Beauvais said. "I hold Peiser and his management
responsible for all the losses since he arrived and hold
him responsible for the fact that Western Pacific is
in Chapter 11."

Peiser, a turnaround artist who replaced Beauvais as chief
executive officer, has said the upstart airline was broke
when he arrived in December 1996. Peiser blamed most of the
losses in 1997 on Beauvais' business plan. He also
called some of the "flying billboard" paint schemes
Beauvais pioneered on his jets "tacky."

Beauvais said the board's decision Tuesday to remove him as
chairman came as a surprise. Two representatives of Western
Pacific's new investor, Smith Management Co., joined
Beauvais, Peiser and Chief Financial Officer George
Leonard on the board for the first time this week.

Smith Management will invest up to $50 million to help
Western Pacific reorganize and emerge from bankruptcy,
possibly in early March. By then, Smith will own virtually
all the equity and take the airline private. Beauvais said
he expects to lose his board seat at that point.

After losing his job as chief executive officer in 1996,
Beauvais continued to draw a salary as chairman and
maintained an office with a secretary. But he
was shut out of operational decisions.  "Number 1, Western
Pacific was not broke," Beauvais said. "And so I think,
to a significant degree, if I had been allowed to follow
the policies that we were developing with some financial
assistance in the fourth quarter of 1996, the company would
be quite successful today."

Beauvais said he would not have moved the airline's
operations to Denver, as Peiser did last summer. Pointing
to December 1996 load factors of 63.7 percent that were 7.1
points higher than last month in Denver, Beauvais said the
smaller Colorado Springs market could have continued to
support the airline.

"The other thing that I think is important to emphasize is
I agreed to step down when the Hunt and Gaylord people
assured me that they would not let Western Pacific fail,"
Beauvais said.  The Hunt Petroleum Co. of Texas and the
Gaylord family of Oklahoma were the original financial
backers of Western Pacific.

Four board members representing the two families resigned
on Oct. 3 when they learned that the airline would file for
bankruptcy. Beauvais said the Hunts and Gaylords assured
him that they would invest up to $40 million more in
the airline.

WESTERN PACIFIC: Court Authorizes Rejection of Contracts
Judge Sidney Brooks has approved rejection of certain
ground handling agreements airport security service
agreements, the Alliance Agreement between Western Pacific
and MAX, a brokers services contract, a licensing of
software products contract, a reservations and marketing
agreement with Thrifty Rent-A-Car, a letter agreement with
respect to media services and an ESPN Thoroughbred racing

In addition, by separate order, the court approved the
Stipulation between Western Pacific and Executive Tower,
and Western Pacific shall have an extension to assume or
reject leases with Executive Tower to and including
February 15, 1998.

WESTERN PACIFIC: MAX Wants Administrative Expense
Mountain Air Express, Inc., filed a motion for allowance of
administrative expense and to compel Western Pacific to
comply with its obligations under the Letter Agreement
dated October 21, 1997.  The letter agreement was an
interim agreement outlining the major terms and conditions
to be included in a new Code Share Agreement.  The Letter
Agreement provided that MAX would continue to dedicate two
aircrafts to fly up to 186 flights between DEN and Colorado
Springs and that WestPac would pay MAX $200,000 per week
for the flights.  The Agreement also provided that MAX
would dedicate 3 additional aircraft to fly as specified by
Western Pacific.

MAX alleges that Western Pacific improperly set off amounts
asserted as flight cancellation charges from the amounts
owing to MAX under the agreement.  MAX also alleges that
Western Pacific has cancelled some of MAX's services
including cancellation of MAX's wheelchair service at
Denver International Airport, cancellation of MAX's Sky Cap
service, reaccomodation of WestPac passengers associated
with mis-connecting WestPac flights, failure to notify
WestPac passengers of schedule changes and/or sending
passengers from canceled WestPac flight to travel on MAX
flights, and the Baggage Service office is not assisting
MAX passengers. Western Pacific has also failed to comply
with its obligation to provide other currently provided
services to MAX and has caused damages to MAX.  MAX is
asking the court to compel Western Pacific to comply with
its obligations under the letter agreement.

Meetings, Conferences and Seminars

January 29-February 1, 1998
      37th Southern District Annual Meeting
         Plaza San Antonio, San Antonio, Texas
            Contact 1-972-285-0391

February 5-7, 1998
      Rocky Mountain Bankruptcy Conference
         Westin Tabor Center, Denver, Colorado
            Contact: 1-703-739-0800

February 19-22, 1998
      Annual Western District Meeting
         Universal City Hilton Hotel
         Los Angeles, California
            Contact 1-310-470-8487

February 22-25, 1998
      12th Annual Norton Bankruptcy Litigation Institute I
         Olympia Park Hotel, Park City, Utah
            Contact 1-770-535-7722

March 19-20, 1998
      Spring Leadership Meeting
         Hotel del Coronado, San Diego, California
            Contact 1-312-857-7734

March 20, 1998
      Bankruptcy Battleground West
         Century Plaza Hotel, Los Angeles, California
            Contact: 1-703-739-0800   

March 26-29, 1998
      10th Annual Norton Bankruptcy Litigation Institute II
         Flamingo Hilton, Las Vegas, Nevada
            Contact 1-770-535-7722

April 30-May 3, 1998
      Annual Spring Meeting
         Grand Hyatt, Washington, D.C.
            Contact: 1-703-739-0800

May 22-25, 1998
      50th New England District Annual Meeting
         Ocean Edge Resort & Golf Club
         Cape Cod, Massachusetts
            Contact 1-617-720-1355

May 31-June 5, 1998
      CLLA Credit Institute
         Marquette University, Milwaukee, Wisconsin
            Contact 1-312-781-2000

June 8-9, 1998
      Advanced Education Workshop & Legislative Conference
         Radisson Plaza, Charlotte, North Carolina
            Contact 1-312-857-7734

June 11-14, 1998
      Central States Bankruptcy Workshop
         Grand Traverse Resort, Traverse City, Michigan
            Contact: 1-703-739-0800

July 2-5, 1998
      Western Mountains Bankruptcy Law Institute
         Jackson Lake Lodge, Jackson Hole, Wyoming
            Contact 1-770-535-7722

July 16-19, 1998
      Northeast Bankruptcy Conference
         Sea Crest Resort, Falmouth, Massachusetts
            Contact: 1-703-739-0800

August 6-9-1998
      Southeast Bankruptcy Workshop
         Daufuskie Island Club & Resort,
         Hilton Head, South Carolina
            Contact: 1-703-739-0800

September 9-13, 1998
      Annual Convention
         Sheraton El Conquistador, Tuscon, Arizona
            Contact: 1-803-252-5646

September 17-20, 1998
      Southwest Bankruptcy Conference
         The Inn at Loretta, Santa Fe, New Mexico
            Contact: 1-703-739-0800
October 16-20, 1998
      1998 Annual Conference
         The Westin Hotel, Chicago, Illinois
            Contact 1-312-857-7734

December 3-5, 1998
      Winter Leadership Conference
         Westin La Paloma, Tucson, Arizona
            Contact: 1-703-739-0800

The Meetings, Conferences and Seminars column appears
in the TCR each Tuesday.  Submissions via e-mail to are encouraged.  


A listing of meetings, conferences and seminars appears   
every Tuesday.  
Bond pricing, appearing each Friday, is supplied by DLS   
Capital Partners, Dallas, Texas.  
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, Editor.   
Copyright 1998.  All rights reserved.  This material
is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources
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