TCR_Public/980116.MBX   T R O U B L E D  C O M P A N Y   R E P O R T E R

      Friday, January 16, 1998, Vol. 2, No. 11

CAMPO ELECTRONICS: Seeks Time to Assume or Reject Leases
CINCINNATI MICROWAVE: Judge Agrees to Close Lid
CLOTHESTIME: Postconfirmation Status Report
CRAIG CONSUMER: Order Approving Postpetition Financing
DOW CORNING: Judge Clarifies Verdict in Dow Implant Case

FRETTER: Order Extending Cash Collateral Order
IMMUDYNE: Announces Results of Annual Meeting
KOENIG SPORTING: Order Granting Extension of Exclusivity
LEVITZ: Seeks Revisions to Employee Relocation Program
MAIDENFORM: Supplier Objects to Handling of Claims

MANHATTAN BAGEL: Company Opens 1st of 10
MAX: Will Offer 7 Flights Every Day to Denver
ORTMANN/HERBST: Acquired by Crown Simplimatic
PETRIE: Re-Opens Solicitation of Offers for Winkelman's
PHOENIX INFORMATION: Equity Committee Seeks Counsel

Q-ENTERTAINMENT: Landlord Seeks Assumption or Rejection
SA TELECOMMUNICATIONS:Seeks Time to Assume or Reject Leases
SMITH TECHNOLOGY: Committee Objects to Borrowed Funds
VITALE ENTERPRISES: Court Enters Order Re: Alampi Firm
WESTERN PACIFIC: Settlement Agreement with Hunt and GFI
WINTERLAND: Emerges From Bankruptcy


CAMPO ELECTRONICS: Seeks Time to Assume or Reject Leases
The debtor, Campo Electronics, Appliances and Computers,
Inc. requests a 90 day extension until May 2, 1998 to
assume or reject unexpired non-residential real property
leases at three locations in Mississippi, Alabama and
Florida.  Campo needs this third extension so that it may
properly evaluate those store locations in light of Campo's
present negotiation to reach a consensual plan of

CINCINNATI MICROWAVE: Judge Agrees to Close Lid
The Cincinnati Post reported on 01/13/98 that Cincinnati
Microwave Inc.'s slow death by bankruptcy liquidation
became all but final Monday as a judge agreed to approve
the company's liquidation plan.  U.S. Bankruptcy Judge
Burton Perlman said he would confirm the plan after
hearing evidence Monday that 95.1 percent of the company's
unsecured fourth-class creditors - vendors and other
parties destined to receive 34 cents on the dollar - voted
for the plan.

Still, more courtroom battles loom for the once-prosperous
maker of radar detectors and cordless telephones. The
company filed for Chapter 11 last February. Even though
distributions to company creditors should start within
the next few months, some loose ends remain to be tied.

"We expect distributions to begin sometime in the first
quarter," said Louis Solimine, an attorney who represents
the company's unsecured creditors.  One loose end will be
dealt with later this month when Perlman hears from James
L. Jaeger, a founder and a former director of the company.
Jaeger has filed a general unsecured claim for $1.5
million, seeking compensation for payments he made to help
Microwave settle a class-action lawsuit filed by
people who owned the company's stock.

Shareholders suing Microwave said the company failed to
disclose ongoing production and distribution problems that
were behind the electronics maker's financial woes.

Microwave is fighting Jaeger's claim, said Edmund Adams,
who represents Microwave in the bankruptcy case.  Another
pending courtroom matter is a patent-infringement lawsuit
Microwave has against Whistler Corp. That trial is this
fall. Any money Microwave wins would be added to the $11
million-plus raised by liquidating company assets, Solimine

CLOTHESTIME: Postconfirmation Status Report
The Clothestime, Inc., et al., debtors filed a post-
confirmation status report on January 8, 1998.  The debtors
state that the disclosure statement projected a net loss
from operations of $5.049 million of fiscal 1997.  Such net
loss is now projected to be $4.998 million.  Of the
approximately 2,000 claims filed in the Chapter 11 cases,
all but approximately 100 have been finally resolved and
paid.  The company expects the remaining claims to be
reconciled and paid within the next four months.

CRAIG CONSUMER: Order Approving Postpetition Financing
On January 6, 1998 the court entered an order approving the
Stipulation approving postpetition financing between Craig
Consumer Electronics, Inc., fka Berel Industries, Inc., the
debtor and BT Commercial Corporation.  Additional financing
may not exceed $500,000.

DOW CORNING: Judge Clarifies Verdict in Dow Implant Case
The Houston Chronicle reported on 01/14/98 that a New
Orleans judge ruled Tuesday that a liability verdict
against Dow Chemical in a class-action breast implant case
still applies to the 1,800 women involved even though she
officially did away with the class.

Louisiana state Judge Yada Magee said her decertification
of the class a month ago was only a "procedural matter."
She said it was not meant to diminish the full impact of
the jury's decision in the first part of the trial, when
Dow was found liable for concealing information and
misrepresenting the risk of silicone implants.

"It was not the intent of this court to ex post facto
disallow the validity of the phase one verdict," Magee's
opinion stated.  Rick Laminack, an attorney for the
plaintiffs, said he expected Magee's ruling.

"The decertification changed nothing," he said. "We have a
decision that is binding on the 1,800, and we now have to
wrestle with a way to make it apply individually."
Dow contends Tuesday's ruling makes no sense.  "Once the
class is dissolved, the class is dissolved," Dow spokesman
John Musser said. "These women have no standing with
respect to any court."

The Louisiana trial was divided into several parts. In the
five- month first part, the jury was asked whether Dow
Chemical, largely because of its testing of silicone for
spinoff company Dow Corning, should be placed in the web of
liability for defective implants.

In the trial's next phase, scheduled to begin next week,
the eight named plaintiffs will try to prove that implants
caused their specific injuries. Because of rulings by
federal courts, the 1,800 women of the former Dow class -
if they still exist as a legal entity - are grouped with
thousands of other Dow Chemical plaintiffs in the court of
U.S. District Judge Denise Page Hood in Detroit.

Laminack said it is unclear how and where they would prove
their individual damage cases. But, he said, because they
have a partial verdict, they should get a special status
over other claimants whose cases have not been heard. This
assertion, he said, is supported by Magee's ruling.

"If they had lost phase one, they would have been in a much
worse position than those in the national class," Laminack
said. "They risked their case. They shouldn't be in a
position to risk it again."

Last month, Magee abolished the class claiming the
plaintiffs' cases were so particular in nature they could
not be resolved collectively. Nevertheless, she
said Tuesday, the jury's resolution of some important
common issues should remain in force.

"Phase one  . . .  certainly decided issues of materiality
and culpable conduct that were common among all of the
women of the Dow Chemical subclass, and vested these women
with certain rights," Magee said.  Musser said Dow Chemical
will appeal Magee's latest decision, which he called
"highly inconsistent  . . .  and legally deficient. For
plaintiffs to crow that this ruling is a major ruling is
premature at best," he said.

Plaintiffs hope to hang some high-dollar verdicts on Dow
Chemical so it will be forced into contributing
substantially to the national settlement of Dow Corning,
which sought bankruptcy protection in the wake of implant
litigation.  Most of the women suing Dow Chemical also have
cases against implant maker Dow Corning.  "I think this
helps that (settlement) process," Laminack said. "Whether
it's a nudge or a shove remains to be seen."

FRETTER: Order Extending Cash Collateral Order
An order was entered providing that the cash collateral
order providing that, upon the closing of sale of any pre-
petition collateral, the debtor shall pay to the Bank 92%
of the  net proceeds of the sale of pre-petition collateral
and that Fretter shall be entitled to retain the 8% balance
for its use shall continue to February 28, 1998.

If the debtor is required by a final order of the court to
fund a postpetition tax escrow account, then the
modification increasing the Bank's share shall
automatically be revised so that the debtor's share reverts
to up to 12%, but only to the extent necessary to fund the
escrow account and meet all operating expenses.

HARRAH'S: Analyst Says Contract Flawed
As reported in the Advocate Baton Rouge LA on  01/13/98, a
proposed contract to revive the long-stalled New Orleans
land casino project puts a great deal of power in the hands
of political appointees, according to a newspaper's
analysis.  An attorney paid by The Times-Picayune to review
the contract said that it is significantly better for the
state than previous proposed contracts. However, lawyer
Scott Willis' analysis said that the contract cedes policy-
making power on important matters to the Louisiana Gaming
Control Board, with members appointed by the governor. The
board regulates most legal forms of gambling in the state.

A future, gambling-friendly governor with gambling-friendly
appointees on the board could significantly reduce the
state's protections, Willis said.  John Campbell, an
attorney and the chief negotiator for the state's legal
team, said he was surprised by the criticisms Willis had of
the document and the power it gives to the gambling board.

"What that does in my judgment is impute an ill motive to a
state agency," Campbell said. "I find that incredible. ...
There has to be some discretion or judgment vested in the
body that regulates the industry."  Control over leases
with tenants on the casino's second floor would go to
the gambling board, Willis said. And the contract allows
the board to decide in the future what form of guarantee
will be acceptable to ensure payment of the state's $100
million annual casino tax.

The casino project has been in bankruptcy since November
1995, when the company shut down a temporary casino that
was performing poorly, and halted construction on its half-
built casino on the edge of the French Quarter.

The tax guarantee is a key element of the new contract.
Last year, the Legislature refused to approve a proposed
new contract, in part because of the lack of a cash
guarantee.  In November, hopes that the casino would be
revived were given new life when the project's main
partner, Harrah's Entertainment Inc. of Memphis, agreed to
provide the guarantee. Gov. Mike Foster then announced his
support and said he will include a vote on the contract on
the agenda for a special legislative session in March.

The new agreement requires the casino developer to complete
the building, open the casino and guarantee the state $100
million for each year the casino operates. Harrah's
Entertainment will annually renew the guarantee as long as
it continues to operate profitably, up to five years.

Willis said the contract ensures that the state will
receive at least $100 million. However, he said the
contract would allow a future gambling-friendly
board to all but eliminate the guarantee by loosening the

"The state's position is not as strong as it could have
been," Willis said.  Campbell noted that the guarantee is
not required by state law.  "The casino act does not
require a guarantee of the payment," Campbell said.
"That is a requirement that the governor placed on the
parties, so there is no lawmaker requirement to begin with.
The Gaming Control Board will have the full authority in
order to decide what is necessary."

Willis said that, if a gambling-friendly governor were
elected in 1999, he or she would be in office for almost
all of the five-year period after the casino is finished,
the time during which a future casino board could change
requirements for the guarantee.

The proposed contract also gives the casino board power to
decide what businesses will operate on the second floor of
the casino building. Some casino critics have said the
second floor could house a casino-subsidized restaurant
that could steal away customers from the city's famous

While state law would prohibit a Harrah's-subsidized
restaurant on the second-floor, a pro-gambling board could
allow Harrah's to, in effect, subsidize a restaurant by
offering restaurateurs free or low rent.  Another point:
The new contract bars any business that targets minors. But
would that prohibit arcades, toy stores and fast-food
restaurants that market to children? The interpretation
would be left up to the gambling board, Willis

The contract does not bar anyone under age 21 from the
building, only from the gambling space on the first floor.
Campbell said it is appropriate to allow children on the
second floor because state law allows children in the
building, even while banning them from gambling areas.
Willis' analysis also addresses what would occur if
dockside gambling at riverboats were to be legalized in New
Orleans, a move that Harrah's has long maintained would rob
it of its state-guaranteed monopoly on land-based gambling
in New Orleans.

The new contract states that, if the Legislature were to
allow dockside gambling, Harrah's would agree not to sue as
long as the only riverboat operating in the parish, Bally's
Belle, agrees not to expand.  Willis said a problem would
arise if Bally were to sell its boat after dockside
gambling is legalized.  Campbell said such a problem would
not occur.  "If there is a change in state law, it would
have to comport with contract provisions," Campbell said.
"The Legislature would have to be mindful of all these
provisions, (and legislation would have) to be carefully
drafted not to violate this contract."

IMMUDYNE: Announces Results of Annual Meeting
ImmuDyne, Inc. ("ImmuDyne" or the"Company"), announced that
the following five directors were elected by a majority of
shareholders at the recent annual shareholders meeting:
Robert Nakamura, M.D., Linda Marshall, James D. Wood, John
Joshua, and Leonid Ber, M.D.  At a Board meeting held
subsequent to the annual meeting, Robert Nakamura, M.D. was
elected Chairman of the Board and Leonid Ber, M.D. was
elected Secretary to serve for the ensuing year.  

The Company also announced unaudited results for the first
quarter ending November 30, 1997.  Revenues for the quarter
were $378,656, as compared to $873,379 for the quarter
ending November 30, 1996.  During the quarter ended
11/30/97, the Company had an actual loss of $60,279, as
compared to a net loss of $215,762 for the same period of
the prior year.  Total operating expenses decreased to
$309,116 for the quarter ended 11/30/97, down from $687,209
for the same period last year.  A settlement of past legal
fees in connection with the San Antonio litigation,
resulted in an extraordinary gain of $583,645.  This
resulted in net income of $530,446 or $.03 per share for
the quarter. Management expects to continue the path of
strong expense control.  

James D. Wood has announced his resignation from the Board
of Directors effective December 18, 1997.  Wood cited his
previously announced notice to retire and his recent
relocation to Spain as the basis for his resignation from
the Board.  His position on the Board of Directors will be
left vacant until the current Board of Directors appoints
someone the stand until the next annual stockholders

In a separate matter, the Company announced that it has
entered into a marketing agreement with McLaughlin
International, Inc.  ("McLaughlin").  McLaughlin
specializes in helping companies in marketing proprietary
products and technologies.  This new arrangement provides
the Company with the necessary funds to embark upon a
marketing effort previously unattainable and places the
Company in a stronger position to exploit its technology
and products in the marketplace.  Dr. Leonid Ber, COO, of
the Company stated "The Company is very satisfied to have
gotten such a strong vote of confidence from the McLaughlin
organization and I believe this strategic alliance places
the Company on a more solid foundation going forward."

In another separate matter, the Company announced that it
had received notice that Mr. and Mrs. Byron Donzis (both
former employees) and Carmel Research, Inc. (an entity
strongly associated with Mr. Donzis) have filed an
involuntary petition against the Company under Chapter 7 of
the Bankruptcy Code.  Management believes the involuntary
petition to be frivolous and without merit.  The Company
does not believe the involuntary petition satisfies the
requirements of 11 U.S.C. 303, and the Company intends to
vigorously oppose the filing.  The Company will seek
damages (including punitive damages) and any costs and fees
incurred as a result of the filing.  

Management believes the involuntary petition was filed in
bad faith and is further evidence of an orchestrated
continued harassment by Mr. Donzis and Carmel.  Management
believes the involuntary petition is merely another attempt
by Mr. Donzis and Carmel to collaterally attack and/or
avoid the Summary Judgment entered by the 37th District
Court in San Antonio, Texas.  Dr. Leonid Ber, COO, stated
"I feel that ImmuDyne's position is quite sound.  I would
encourage any current or potential shareholder to take the
time to read the court ordered Summary Judgment to come to
a better understanding of the facts."

KOENIG SPORTING: Order Granting Extension of Exclusivity
Judge David F. Snow entered an order extending the periods
during which the debtor, Koenig Sporting Goods, Inc., has
the exclusive right to file and obtain acceptance of a plan
of reorganization to and including February 13, 1998 and
April 14, 1998 respectively.

LEVITZ: Seeks Revisions to Employee Relocation Program
Levitz Furniture Incorporated, et al., seeks to implement
revisions to an employee relocation program by entering
into a contract with RE/MAX International Relocation
Services, Inc.

Under the proposed relocation program, RE/MAX will provide
home sale marketing assistance to employees designated by
the debtors and will act as a home sale financial
intermediary in return for a set fee and reimbursement of
RE/MAX's costs and expenses.  The fixed fee amount payable
to RE/MAX per employee home sale will be $3500 or $1800
depending on one of two options designated by the debtors
to apply to a particular employee's relocation.

By using RE/MAX the debtors can eliminate the costs of
paying Gross-Up Amounts and related wage taxes that
otherwise might be paid in connection with certain employee
relocations if the debtors were to continue their
prepetition relocation practices.

MAIDENFORM: Supplier Objects to Handling of Claims
Prior to the petition date, H. Warshow & Sons, Inc.
(Warshow) supplied goods to the debtors, Maidenform
Worldwide, Inc., et al.  They demanded reclamation of goods
with a value of $180,377.27.

The debtors requested authorization to pay 50% of valid
reclamation claims brought against the debtors.  Warshow
objects to the requested relief because the debtors do not
disclose which claimants are considered to be holders of
reclamation claims and provide no analysis of the validity
of the claims posited by each claimant.  Warshow states
that the motion merely states that the debtors have 21
reclamation claims totaling approximately $1.10 million and
that $554,204.29 of such claims are valid.

Warshow states that the if a seller has a valid reclamation
claim, such claim may only be denied where a court grants
the claimant an administrative priority claim or secures
the claimant's rights with an appropriate lien.  The
debtors request neither form of relief.  Instead, Warshow
claims that the debtors seek to impose credit terms on
Warshow and the other reclamation creditors and further
seek to force them to treat the remaining half of their
claims as general unsecured claims.  

Warshow states further that the motion alleges that the
claims of the sellers are subject to prepetition liens on
the debtor' inventory by certain pre-petition lenders.  
However, nowhere do the debtors allege that such liens are,
in fact, undersecured.  The motion is, according to
Warshow, nothing more than a disguised attempt to impose an
arbitrary settlement on certain creditors and an attempt to
force the extension of credit under the treat that the
prepetition liens may be undersecured.

MANHATTAN BAGEL: Company Opens 1st of 10
Prism Restaurants II has opened the first Manhattan Bagel
restaurant in the Detroit area at 1413 Rochester Road, in
the North Hills Shopping Center.  The 1,538-square-foot
Rochester Hills store is the first of 10 bagel bakeries
planned by Prism Restaurants II for Oakland County over a
three-year period under an exclusive area franchise
development agreement with Eatontown, N.J.-headquartered
Manhattan Bagel Company, Inc. (Nasdaq: BGLSQ).  

Rochester Hills-based Prism Restaurants II expects to open
two additional Manhattan Bagel stores this year within the
County, which was recently ranked one of the three most
prosperous areas, on a per capita basis, in the United
States.  The three Prism Restaurants II principals, who
together have 60 years experience in the foodservice
industry, also operate a Big Boy restaurant in Oxford,

Manhattan Bagel stores offer 21 varieties of New York-style
bagels, boiled and baked freshly at the stores throughout
the day.  The stores also carry an assortment of the
company's 21 varieties of cheese spreads, as well as deli
meats, muffins, and other breakfast products.  The
breakfast and lunch menus include a variety of hot and cold
bagel sandwiches, and salads.  Also included is a Manhattan
Beverage Works section featuring the proprietary MBW
Manhattan's Best Blend gourmet coffees.

The Rochester Hills store, which seats 15, operates Monday
through Friday from 5:30 a.m. to 6:00 p.m., and from 7:00
a.m. to 3:00 p.m. on Saturday and Sunday.   Manhattan Bagel
Company, headquartered in Eatontown, N.J., currently
franchises, licenses or operates approximately 320 stores
in 19 states and Washington, D.C., including five in
Michigan.  The company also operates bagel dough
manufacturing plants in Eatontown, N.J, Greenville, S.C.,
and Los Angeles.

Openings of additional stores may be subject to potential
delays caused by, among other things, lease negotiations,
permitting, weather, the delivery of equipment and
materials, and the availability of labor.   The financial
viability of Manhattan Bagel Company, which filed for
Chapter 11 Bankruptcy Protection on November 19, 1997, is
dependent upon, among other things, the company's ability
to obtain additional financing, to sell or close non-
performing company-owned stores, and otherwise structure a
financial reorganization acceptable to the company's

MAX: Will Offer 7 Flights Every Day to Denver
The Gazette reported on  01/13/98 that Western Pacific
Airlines and Mountain Air Express have agreed to revise
last October's deal, letting MAX offer seven daily flights
between Colorado Springs and Denver. In exchange, WestPac
will pay MAX $100,000 per week. WestPac had questioned the
validity of the agreement in U.S. Bankruptcy Court last
week, saying that MAX no longer had the five planes it
promised to commit to help WestPac's operations

MAX's fifth plane was repossessed last week. That led to
MAX's decision last week to drop the number of daily
flights between the Springs and Denver from 14
to eight.  WestPac won a decision on a separate matter in
court Monday. Bouilloun Aircraft Holdings Co. had appealed
a Dec. 3 decision that gave the bankrupt WestPac a
financial recovery package from outside investors.

Monday's decisions means Boullioun lost its argument that
the decision let the investors sublease WestPac's jets,
something that goes against the lease agreements. WestPac
leases three planes from Boullioun.

ORTMANN/HERBST: Acquired by Crown Simplimatic
Crown Simplimatic, Inc., has concluded the acquisition of
the assets of the bankrupt Ortmann + Herbst GmbH (O+H) in
Hamburg, Germany, it was announced today.  The purchase
price was not disclosed.   Assets acquired include the 0+H
facility in Hamburg, Germany, which manufactures highspeed
bottle and can fillers, beverage preparation and
processing systems, bottle washers, labelers, spare parts,
and the intellectual properties related to these products.  
Crown Simplimatic expects to employ 130 workers at the
Hamburg location.  In 1996, O+H reported sales of DM 149.4
million (U.S. $84.25 million).

"The acquisition of Ortmann + Herbst is an important step
in Crown Simplimatic's strategic growth plan," explained B.
Douglas Goodell, a managing director of Crown Simplimatic.
"O+H is well known as an advanced technology-based
manufacturer of fillers, beverage preparation and bottle
washing systems, and other equipment for the so-called 'wet
side' of beverage filling lines.  The addition of these
products will enable Crown Simplimatic to enhance its
position significantly as a global supplier to the beverage
and food industries.

"Prior to this transaction, the majority of Crown
Simplimatic's products were ideally suited for beverage
producers in markets characterized by heavy usage of 'one-
way' disposable packaging and low filling temperatures.  
These markets include the Americas, Australia, and parts of
Africa and Asia," Mr. Goodell continued. "The O+H products
are appropriate for 'European-style' markets, which are
dominated by returnable packaging and ambient temperature

Throughout the world, Crown Simplimatic employs 1,140
people (700 in the United States) in eleven factories,
which are located in the United States, Mexico, Uruguay,
United Kingdom, Belgium and Australia.  Annual turnover of
the company is about $200 million (U.S.). In addition to
diversified lines of other products, Crown Simplimatic is a
global leader in the design and manufacture of conveyors,
palletizers and other equipment used on the "dry side."

"The acquisition of Ortmanm + Herbst's technical expertise
and facilities will enhance our ability to meet the needs
of our customers," Mr. Goodell commented.  "The Hamburg
facility will be an important technology center for
us, manufacturing fillers, beverage preparation systems and
labelers.  With the exception of bottle washer systems, the
plant will continue to produce all existing O+H products.  
We do expect to move the existing O+H bottle washer
assembly business to Crown Simplimatic's facilities in
Londerzeel, Belgium, and San Luis Potosi, Mexico."

PETRIE: Re-Opens Solicitation of Offers for Winkelman's
Petrie Retail, Inc., a privately-held company which has
been operating under chapter 11 of the U.S. Bankruptcy
Code since October 1995, said today that it is re-opening
its solicitation of offers for the divestiture of its
Winkelman's Stores, Incorporated subsidiary. Winkelman's
operates 49 stores in Michigan and Ohio.  Its headquarters
are located in Livonia, Michigan.

Petrie Retail, Inc. said in December 1997 that it had begun
soliciting offers for the divestiture of Winkelman's as
part of its effort to reemerge from bankruptcy court
protection.  At the time, Petrie Retail stated that it
had received several expressions of interest.  In late
December 1997, Petrie Retail signed a letter of intent with
Crowley, Milner and Company (Amex: COM) of Detroit,
Michigan, under which Crowley agreed to purchase for an
undisclosed amount the inventory, furniture, fixtures and
lease hold improvements of 49 Winkelman's stores.  On
January 13, 1998, Crowley informed Winkelman's that it
had withdrawn its letter of intent.

CIBC Oppenheimer was retained by Petrie Retail to assist
with the divestiture of Winkelman's and is continuing to do
so.  Petrie Retail, Inc. is a retailer of women's apparel
headquartered in New Jersey.

PHOENIX INFORMATION: Equity Committee Seeks Counsel
The Official Committee of Equity Shareholders of Phoenix
Information Systems Corp., et al., debtors requests that
the court authorize its retention of Morris, James,
Hitchens & Williams as its co-counsel with Adelman, Gold &
Levine.  The debtor has chosen the Morris, James firm for
its legal services and its familiarity with local court

Q-ENTERTAINMENT: Landlord Wants Assumption or Rejection
Market/Ross, Ltd., a Texas limited partnership filed a
motion to compel the Trustee in the case of Q-Entertainment
Inc. et al. to pay post-petition lease obligations and
alternatively, to compel assumption or rejection of two
unexpired leases.  

Market/Ross entered into two leases for non-residential
real property with MWBC, Inc. that Market/Ross believes is
the same corporation as the debtor, Q-Zar USA, Inc. (one
debtor entity).  The term of both of the leases was 84
months with an option for extension of five years.  The
basic rent for one lease was over $20,000 per month subject
to certain increases.  MWBC has never finished out the
retail space, nor has it conducted operations in the space.  
MWBC failed to make any payment of its obligations.

Another lease was also entered into by MWBC and Market/Ross
for the same term, and at a rent of $11,806 per month,
subject to certain increases.  Since the petition date no
payments have been made with regard to this lease.  
Market/Ross claims that it is entitled to payment or
alternatively, to the immediate assumption or rejection of
the leases.  A hearing is set for February 2, 1998.

SA TELECOMMUNICATIONS:Seeks Time to Assume or Reject Leases
SA Telecommunications Inc., et al, debtors are seeking an
extension of the time within which the debtors must assume
or reject certain unexpired leases of nonresidential real
property.  A hearing will be held on February 9, 1998.

The debtors seek to extend the time for ninety days, to and
including April 20, 1998.  In light of the ultimate
purchaser's right to choose the lease it wants assigned to
it, the debtors cannot assume or reject any of the leases
until such time as the identity of the purchaser is
established and that entity has made the Lease
Determination.  The auction is scheduled to take place in
early February.  The debtors therefore request an extension
of the date by which they must assume or reject the leases
until after these events.

The debtor is also seeking the rejection of certain
unexpired leases of nonresidential real property.  These
are properties that have been vacated by the debtor and
consist mostly of office space.

The debtors also seek an extension of 17 days to file their

SMITH TECHNOLOGY: Committee Objects to Borrowed Funds
The Official Committee of Unsecured Creditors of Smith
Technology Corporation, et al., debtors filed its
objections to the motion of certain of the debtors for
authority to borrow funds with priority over administrative
expenses secured by liens on property of the debtors

The Committee believes that as of the petition date certain
of the debtors had a substantial number of work orders in
progress that were unbilled and unprocessed constituting
EBUR as well as substantial operating assets upon which the
Lenders assert security interests.  

Since the petition date, the Committee alleges that the
Lenders have "swept' all of cash receipts and collection of
the debtors without relief from the automatic stay and have
not accounted for the same to the court or the committee.  
The Committee believes that the Lenders have swept almost
$4 million of the debtors' funds and continue to sweep such
cash.  Further, the lenders were wired $2 million from the
sale of ERRS contracts.

The debtors obtained approval of five interim budgets
totaling approximately $8.6 million, the Committee claims
that many of the budgeted items were duplicative.  The
Committee believes that as of December 31, 1997 the Lenders
actually had "swept" more funds belonging to the debtors
then the lenders actually advanced post-petition to the

The debtors' motion asserts that the lenders are owed an
aggregate of $24.8 million on their pre-petition loans.  
The lenders have asserted that they are unsecured by the
debtors' assets. In their motion, the debtors seek to
provide the lenders with security and protection for the
DIP financing as well as "any and all obligations due to
lenders by the debtors" by granting to the lenders priority
in payment over all administration expenses and a security
interest and lien in all of the debtors assets subject only
to any lien or security interest senior to the lender at
the petition date.  

The Committee objects to the debtors' attempt to grant
repayment priority over expenses and to extend that
priority to the lenders' pre-petition loans.  The Committee
claims that this is an improper attempt to cross-
collateralize pre-petition loans and to afford property
securing the loans of a prepetition lender with protection
from a surcharge.

Since the Lenders believe their pre-petitions claims to be
undersecured, the net result of the proposed financing
arrangement would be that the debtors' estate will only be
able to repay the DIP financing from assets not already
encumbered by the lenders pre-petition security interest,
such as the debtors' estates avoidance actions, with no
benefit to unsecured creditors.

The Committee objects to the DIP financing unless it is
repaid first from all of the post-petition receipts and
revenues of the debtors prior to any application of
"proceeds" to the debtors' pre-petition obligations to the

The Committee also objects to the granting of post-petition
security interest to the lenders to secure their pre-
petition obligation from the debtors.

The Committee also objects to terms and conditions of the
financing order and believes that the proposed financing
order is oppressive overreaching and unjustified.

VITALE ENTERPRISES: Court Enters Order Re: Alampi Firm
Judge William F. Tuohey entered an order in the case of
Vitale Enterprises, Inc. modifying the order for the
retention of the law firm of Alampi, Arturi & D'Argenio.  
The Committee filed an objection to the retention
application premised upon the necessity of the counsel, a
possible conflict of interest and the payment of a $25,000

The Court Order stated that the debtors may retain the
Alampi firm for purposes of specific litigation and
landlord negotiations.  The debtors may not pay a retainer
to the Alampi firm.  Compensation to the firm will be
pursuant to an application to be submitted to and approved
by the court.

WESTERN PACIFIC: Settlement Agreement with Hunt and GFI
Hunt Petroleum Corporation and GFI Company are the holders
of a certain promissory note dated September 11, 1997,
executed and delivered by Western Pacific in favor of Bank
One of Texas, N.A. in the principal amount of $10 million.  
The note is secured by certain of Western Pacific's
accounts receivable as well as funds contained in a certain
cash collateral account held at Bank One Texas.  Prior to
its Chapter 11 petition, Western Pacific had drawn the full
$10 million.

A settlement agreement has been reached by the parties with
respect to the note.  The significant terms are as follows:

Smith, an affiliate of Energy Management Corporation will
purchase the Note from Hunt/GFI.

The claim pursuant to the Note will be allowed as a fully
secured claim in the principal amount of $10 million plus
accrued interest.
And any further litigation over the secured claim is

Professional fees and collection costs (estimated in excess
of $200,000) will be waived by Hunt/GFI.

Western Pacific may use all of the cash collateral ($6.9
million) subject only to the terms of the Cash Collateral

The allowed secured claim will remain subject tot the cram
down standards.

Western Pacific and Hunt/GFI will grant mutual releases of
all claims.

WINTERLAND: Emerges From Bankruptcy
Winterland Productions, the legendary entertainment
merchandising company, has emerged from Chapter 11
after only five months, as part of a successful
recapitalization effort designed to consolidate ownership
and strengthen the company financially.

Winterland used a "prestructured reorganization plan" to
expand sales during the bankruptcy period with an
additional $5 million in financing from Cerberus Partners
LP and Gordon Brothers Capital Corp.

The additional financing allowed Winterland to continue the
operating improvements that had been initiated by a new
management team that took over the company before the
bankruptcy filing last August. Winterland's already high
quality standards and customer service levels continued to
improve during the Chapter 11 period. CEO Donn Tice
announced that orders from Winterland's private label and
retail customers have climbed 20 percent since the filing.

Tice said the company had unanimous support from all of its
creditors. "This is a win-win plan for both our creditors
and company," Tice said. "Winterland is back in the game.
We're back in San Francisco. We're back on the growth

Paperwork to complete the bankruptcy process will be
completed by February 1, Tice said.  Winterland has begun a
$2 million multi-year capital improvement plan and
plans to augment its current 350-employee workforce to
support its growth. "We are officially reborn," Tice said.

Legal experts said that Winterland completed its
reorganization with extraordinary speed. Winterland's
position is strengthened as it emerges with broad support
from the industry and with no continuing lawsuits or

"We have the enthusiastic cooperation of the company's
suppliers and steadfast support from its artists and
customers," said Winterland attorney Peter Benvenutti of
the San Francisco law firm of Heller Ehrman White and
McAuliffe. "Creditors voted unanimously to accept
Winterland's Chapter 11 plan, reflecting their faith in the
company's management and in its plan for the future."

Tice said the company owed thanks to a long list of
supporters, retail customers, trade supplier partners,
artists, licensors, and employees. "The commitment from our
Winterland family has been terrific," he said.

Winterland is a producer of licensed and private label
apparel and related merchandise. Artists on Winterland's
roster include major names such as Madonna, Marilyn Manson,
Boyz II Men, Diana Ross and classics such as Jimi
Hendrix, Led Zeppelin and The Doors.

Winterland was founded 25 years ago in San Francisco as an
outgrowth of Bill Graham's concert promotion business. The
firm was sold to entertainment giant MCA in 1988. MCA then
sold it, in an over-leveraged buyout, to MML Inc., an East
Coast holding company controlled by controversial Maryland
businessman Morton L. Lapides, Sr.

In April 1997, Cerberus and Gordon Brothers became majority
owners of Winterland after MML Inc's leveraged buyout from
MCA in August 1996 ran into problems. These difficulties
were due in part to costly and unproductive facilities,
leasing arrangements and other obligations with Transcolor,
a company controlled by Lapides. The reorganization plan
allowed Winterland to eliminate the drain of the Transcolor
and MML relationships, and place the firm into the hands of
professional management and financially strong owners, Tice

A listing of meetings, conferences and seminars appears   
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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, Editor.   
Copyright 1998.  All rights reserved.  This material
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