TCR_Public/980121.MBX T R O U B L E D  C O M P A N Y   R E P O R T E R
    Wednesday, January 21, 1998, Vol. 2, No. 14

CAJUN ELECTRIC: SW Electric Pays $930 Mil For Assets
FLAGSTAR: Provides SEC with Plan Documents
KDI HOLDINGS: Proposed Sale of Assets
LAMONTS APPAREL: Files Registration Statement
OXFORD HEALTH: Forms New Executive Committee

PAYLESS CASHWAYS: Cuts 5 Executives and 175 HQ Employees
PAYLESS CASHWAYS: Reports 4th Quarter & Fiscal Year Results
TOSHOKU AMERICA: Files for Chapter 11
VENTURE: Initiates Chapter 11 Reorganization Proceedings


CAJUN ELECTRIC: SW Electric Pays $930 Mil For Assets
Investor's Business Daily reported on January 19, 1998
Southwestern Electric Power increased its previous offer of
$780 million for Cajun Electric Power Cooperative's non-
nuclear assets. Shreveport, La.-based Southwestern is a
unit of Dallas based Central and South West. The offer was
included in an amended reorganization plan in the Chapter
11 bankruptcy of Cajun.

The Pittsburgh Post-Gazette reported on January 17, 1998                      
that Southwestern Electric, a Shreveport, La., utility,
wants to expand its territory by purchasing Cajun's two
power plants with 1,683 megawatts of capacity and 25-year
contracts to sell power to eight of the 11 members of the
cooperative. Cajun declared bankruptcy in December 1994
after it couldn't restructure $4.2 billion in debt.

FLAGSTAR: Provides SEC with Plan Documents
Advantica Restaurant Group Inc., formerly known as
Flagstar, filed an 8-K form on January 15, 1998 and
provided the SEC with copies of the following documents:

Joint Plan of  Reorganization  of  Flagstar Companies,   
Inc.  and   Flagstar, amended November 7, 1997,  and as
confirmed by order of the United  States  Bankruptcy  Court
for the   District  of  South   Carolina   filed                                   
November 12, 1997.

Indenture, dated as of January  7,  1998,                                   
between Advantica and First Trust National                                   
Association, as Trustee, relating  to  the
Advantica 11 1/4% Senior Notes Due 2008.

Warrant Agreement, dated  January  7, 1998,
between Advantica and Continental   Stock
Transfer and Trust Company.  

Registration Rights  Agreement, dated  as of
January 7, 1998, among Advantica and each
holder  of  registrable  securities  named

Credit Agreement, dated January 7, 1998, among Denny's,  
Inc., El  Pollo Loco, Inc.Flagstar Enterprises, Inc.,  
Flagstar Systems, Inc.,and Quincy's Restaurants, Inc., as
Borrowers, Advantica, as a Guarantor, the Lenders named
therein, and The Chase Manhattan Bank as administrative

A full-text copy of the filing is available via the
Internet at:

KDI HOLDINGS: Proposed Sale of Assets
KDI Holdings, Inc., Kolpen Distributors, Inc., KDI
Speciality Foods, Inc., and KDI Atlantic Foods, Inc.,
debtors, seek approval of the terms and conditions of an
Asset Purchase Agreement, which provides for the sale to
Distribution Acquisition, Inc. (DAI), of substantially all
of the debtors' assets and authorizing the debtors to
assume and assign as executory contracts their leases,
contracts and purchase orders.

A hearing will be held on January 29, 1998.  An auction
will be conducted at the sale hearing.  At the conclusion
of the auction, the debtors shall determine the final
highest and best bids for the assets.

Pursuant to the Asset Purchase Agreement, DAI will assume
the debtors' obligations to CIT provided that such
obligations do not exceed $8.6 million and $75,000 in cash
and a promissory note in the principle amount of $425,000
and the assumption of certain obligations of the debtors.

LAMONTS APPAREL: Files Registration Statement
Lamonts Apparel, Inc. filed a FORM S-1, REGISTRATION
STATEMENT with the SEC registering the new shares of common
stock under their recently confirmed plan of registration.

A full-text copy of the filing is available via the
Internet at:

OXFORD HEALTH: Forms New Executive Committee
On January 8, 1998 Oxford Health Plans, Inc. (Nasdaq:
OXHP) announced the formation of an executive committee,
consisting of two outside directors and Chairman of the
Board Stephen F. Wiggins, to strengthen and enhance the
company's ability to manage its growth.

The committee's first order of business will be to
supervise the external search for a new chief executive
officer, as well as a new chief financial officer.  William
Sullivan will remain president and chief executive officer
of the company until the CEO search is completed and is
expected to remain in a senior management capacity with the
company after a new CEO is appointed. The company also
announced that Albert A. Koch, chief operating officer of
Jay Alix & Associates, will serve as interim chief
financial officer.

Fred F. Nazem, managing general partner of Nazem and
Company and a member of the board of directors since 1989,
will chair the new committee.  He is joined by Mr. Wiggins
and James B. Adamson, Chairman, chief executive officer
and president of Advantica Restaurants Group, formerly
Flagstar Companies Inc.

In addition to the executive searches, the charter of the
committee includes supervision of regulatory matters, board
practices and corporate governance issues.

James B. Adamson, 49, is chairman, chief executive officer
and president of Advantica Restaurant Group, Inc. Al Koch
specializes in financial consulting and restructuring
services. He is the Chief Operating Officer of Jay Alix &
Associates. Fred Nazem is the founder and Managing Partner
of Nazem and Company, a New York City-based venture capital

PAYLESS CASHWAYS: Cuts 5 Executives and 175 HQ Employees
The Kansas City Star reported on January 20, 1998 that                 
amid collapsing sales, the new board of Payless Cashways
Inc. on Monday announced sweeping changes, including the
elimination of one-fourth of its headquarters staff and the
exit of five top executives.

The news comes just seven weeks after Payless emerged from
a fast-track Chapter 11 bankruptcy reorganization and two
weeks after Chief Executive Officer David Stanley and
President Susan Stanton agreed to leave. The Kansas City-
based home improvement retailer also reported Monday that
it lost $288.6 million in the year ended Nov. 29.

As part of its latest turnaround plan, Payless said it
would lay off 175 persons at its headquarters, eliminate
two of six operating divisions and cut spending.

Across-the-board cuts at Payless' headquarters will reduce
staff to about 500 employees from just under 700. Two
thousand employees, including about 100 at the
headquarters, lost their jobs in the July bankruptcy
reorganization. That restructuring included the closing of
29 stores.

No stores will be closed in the latest restructuring, but
regional offices in Dallas and Indianapolis will close and
two regional vice presidents, Michael Owen and Michael
Stucky, will leave the company.

Other top executives departing are Steve Lightstone, chief
financial officer; Ned Holland, senior vice president of
administration; and Michael Buchen, senior vice president
of merchandising.

The company said Monday that it had expected depressed
fourth-quarter results because of the Chapter 11 but that
it had looked for improvement after it emerged from
bankruptcy Dec. 2.

"The company anticipated that sales would be stronger in
1998 than we are now seeing," said Donald Roller, Payless'
acting chief executive officer. "The impact of Chapter 11
reorganization on the fourth quarter has not dissipated."

December sales are included in Payless' 1998 fiscal year.
Perhaps even more alarming was a 12.1 percent drop in same-
store sales for the quarter. Same-store sales are sales at
stores open at least one year and are considered the best
measure of sales strength.

"While lower results are to be expected in a Chapter 11
restructuring period, it is our responsibility to take the
difficult and determined actions necessary to restore the
company to appropriate performance levels," Roller said.

The company said the first two weeks of January showed some
improvement in same-store sales, but it did not give any
figures.  Markets where Payless still does OK, including
Dallas, are being ringed by the big-and-bold players in the
industry, namely Home Depot and Lowe's. The news Monday has
industry watchers questioning Payless' viability and
wondering why more drastic measures weren't taken in the
company's breakneck Chapter 11 reorganization.

"I think, and this has been the ongoing discussion around
here in recent days, to what extent is this reorganization
plan a masquerade?" said John Caulfield, senior editor of
National Home Center News.

Caulfield questioned the ability of the board of directors,
which replaced the previous board when Payless emerged from
bankruptcy, to make not only the tough decisions but also
the right decisions.

"It remains to be seen whether they have an awareness of
Payless' position in the market, where they need to be and
who is running the organization," Caulfield said. The
board's immediate concerns are finding someone to replace
both Stanley and Stanton and deciding the fate of its
salvation strategy, called dual-path.  Dual-path, to a
degree, caters to two segments of the market - the do-it-
yourself consumer and the professional builder/renovator.

Until the new board makes a decision, pursuit of the
strategy has been put on hold.  The timing of the
announcement, particularly the departure of Lightstone, the
company's top financial officer, left some observers
puzzled and wondering whether a new slate of officers might
be waiting.

"Absent wrongdoing, it's quite unusual for a public
enterprise of this size, particularly one that does 2
billion bucks in sales, to run without a chief financial
officer," said investment adviser Jerry Duggan of Leawood.
"One would hope they have their new team in the box."

Aside from the timing, Duggan wasn't surprised to hear of
the departure of Lightstone, Holland and Buchen.  "One
would assume as the new broom comes through the door, he's
going to bring his own team," Duggan added. Payless
completed its Chapter 11 reorganization, the largest ever
in the Western District of Missouri, in less than five
months. Many retail bankruptcies of this size take one to
two years.

In the results announced Monday, Payless said it lost
$201.8 million in the fourth quarter compared with net
income of $5.56 million a year earlier. When extraordinary
items are excluded, Payless' loss was $10.4 million for the
quarter and $35.5 million for the year.

Net quarterly sales were $504.4 million, down from $710
million a year earlier. Net sales for the year were $2.3
billion, down from $2.6 billion.

PAYLESS CASHWAYS: Reports 4th Quarter & Fiscal Year Results
Payless Cashways, Inc. (OTC Bulletin Board: PCSH), the
Kansas City-based building materials specialty retailer,
today reported operating results for its fourth quarter and
fiscal year ended November 29, 1997 and indicated that
December sales were below expectations.  Because results
have been slow to rebound following the Chapter
11 restructuring, the new Board, working closely with
senior management under the direction of Acting CEO Donald
E. Roller, announced sweeping changes designed to have an
immediate impact on the financial outlook of the Company.

For the fourth quarter and the fiscal year, sales, EBITDA,
and earnings were down compared to last year.  Losses for
the quarter reflect the impact of both competition and the
period spent in Chapter 11.  Negative pressure on sales
continued into December with same-store sales down 12.2%
compared to last year.  For the first two weeks of January,
same-store sales comparisons have improved.

Measures announced today, which are aimed at moving the
Company toward profitability, include:

.. Consolidation of the CEO and President positions and
separation of five additional officers
.. Significant expense reduction, including an
approximately 25% reduction in force at the headquarters
and a consolidation of the operating regions from six to
.. Approval of new merchandising and sales initiatives
.. Reduced and more targeted capital expenditures
.. Realignment of store management structure

Actions under way as of today include a national search for
a President/CEO, notification earlier this morning to
employees affected by the workforce reductions, and
assignment of a dedicated store manager in each retail
location.  Due to competitive considerations, the Company
did not disclose any detail concerning the merchandising
and sales initiatives or the targeting of capital

Reductions in the headquarters staff are taking place at
all levels, including senior management.  The focus for the
Company will be targeted to buying and selling, and
accounting for those activities.  Significantly reduced
staff will handle other functions.  Acting CEO Don Roller
said, "This is a potentially strong company with an
important position in the industry.  While lower results
are to be expected in a Chapter 11 restructuring period, it
is our responsibility to take the
difficult and determined actions necessary to restore the
Company to appropriate performance levels."

Net sales for the fourth quarter were $504.4 million, a
total decrease of 23.8%, and 12.1% on a same-store sales
basis compared to the same quarter of 1996 when presented
on a thirteen-week basis.  The total sales decrease
reflects the closing of 29 stores during the quarter.  For
financial reporting purposes, the fourth quarter of 1996
was a fourteen-week sales period compared to a thirteen-
week sales period for the fourth quarter of 1997.

On that basis, total sales for the quarter decreased 29.0%.  
Earnings before interest, taxes, depreciation, and
amortization (EBITDA), a measure of the Company's operating
cash flow, decreased to $17.3 million compared to $43.4
million for the fourth quarter of last year.  Fourth
quarter 1997 EBITDA benefited from a $5.1 million
LIFO credit compared to a $7.5 million LIFO credit in the
same period of 1996.

During the fourth quarter of fiscal 1997, the Company
recorded non-routine charges in connection with its
reorganization under Chapter 11 of the Bankruptcy Code.  
The Company incurred reorganization charges of $20.3
million ($12.5 million after tax) in the quarter ended
November 29, 1997, which were primarily professional and
administrative fees incurred in connection with the
Chapter 11 case, as well as amounts accrued under an
employee retention program.  The Company adopted fresh-
start accounting as of November 29, 1997, and recorded a
$355.6 million ($312.1 million after tax) fresh-start
revaluation charge and an extraordinary gain, net of tax,
of $138.2 million related to the discharge of indebtedness
in the case.  The Company also recorded an extraordinary
charge, net of tax, of $5.0 million related to the
early extinguishment of the Amended Credit Agreement and a
mortgage loan on December 3, 1997.  Both of these debt
instruments were replaced with new debt

The Company reported fourth quarter pro forma net loss of
$10.4 million compared to fourth quarter 1996 net income of
$5.6 million.  Pro forma net loss for fourth quarter 1997
excludes the reorganization items, fresh-start revaluation
charges, and extraordinary items related to the Company's
reorganization under Chapter 11 previously discussed.  
Including these non-routine charges recorded in the
quarter, net loss for the fourth quarter of 1997 was $201.8

Commenting on the fourth quarter of 1997, acting CEO Don
Roller said, "Continuing, intense competitive pressure,
combined with the impact of the Chapter 11 restructuring,
had a decidedly negative impact on the quarter. Sales
to professional customers, as well as consumers, were lower
than expected."

Net sales for the 1997 fiscal year were $2.3 billion, a
decrease of 11.9% in total, and 6.6% on a same-store basis
compared to fiscal 1996 when presented on a 52-week basis.  
Again, the total sales decrease reflects the closing of 29
stores during the fourth quarter of 1997.  For financial
reporting purposes, the 1996 fiscal year was a 53-week
sales period compared to a 52-week sales period for the
1997 fiscal year.  

Without adjusting for the 53rd week of 1996, total sales
for the 1997 fiscal year decreased 13.5%.  Pro forma EBITDA
decreased to $65.4 million compared to $134.6 million for
last year.  Pro forma EBITDA for 1997 excludes third
quarter 1997 inventory write- downs of $10.7
million related to the closing of 29 under-performing
stores, and pro forma EBITDA for 1996 excludes third
quarter 1996 inventory write- downs of $5.8
million related to the closing of nine under-performing
stores. EBITDA for fiscal 1997 benefited from a $0.7
million LIFO credit compared to a $3.2 million LIFO credit
in fiscal 1996.

For the 1997 fiscal year, the Company reported a net loss
of $288.6 million compared to a net loss of $19.1 million
in the previous year.  The net loss for the 1997 fiscal
year reflects reorganization items, fresh-start revaluation
charges, a store closing charge, an asset impairment
charge, and extraordinary items recorded in the third and
fourth quarters of 1997. Excluding the non-
routine items recorded in these quarters of 1997 and the
third quarter of 1996, pro forma net loss for the 1997
fiscal year would have been $35.5 million compared to net
income for the 1996 fiscal year of $7.4 million.

Commenting on the fiscal year 1997, Don Roller said,
"Disappointing results in the first and second quarters led
to the voluntary filing under Chapter 11 of the Bankruptcy
Code.  The results for the year following the July 21
filing were significantly impacted by the filing.  
Disruption in availability of some products and general
uncertainty among both professional and do-it-yourself
customers produced sales declines that the Company is still
working to overcome."

The Company also announced that early operating results for
1998 were tracking below its expectations.  Same-store
sales for December 1997, the first month of fiscal 1998, of
$143.7 million, were 12.2% below last year. The Company
expected some improvement in December after exiting the
Chapter 11 reorganization, but negative fourth quarter 1997
sales trends continued into December.

Don Roller said, "The Company anticipated that sales would
be stronger in 1998 than we are seeing now.  The impact of
the Chapter 11 reorganization on the fourth quarter has not
yet dissipated.  Soft sales in the early weeks of the new
year increase the need for a strong Spring selling season
and continued tight expense control."

He continued, "Payless Cashways is a company with a strong
tradition of perseverance and commitment.  It has struggled
under a heavy load of debt since 1988, as the competitive
landscape has become more and more challenging. I
believe it has the potential to continue to be among the
best building materials retailers in the industry, serving
millions of customers each month. I have been impressed
with the quality of both the people and the facilities at
Payless Cashways.  The Company's challenge is to
successfully attract and retain customers."

TOSHOKU AMERICA: Files for Chapter 11
Toshoku America, Inc. filed for Chapter 11 on December 24,
1997 in the Southern District of New York.  The company
serves as an agent for its parent company, Toshoku, Ltd. in
the import/export business.  Attorney to the debtor is Alan
Nisselson of Brauner Baron Rosenzweig & Klein, LLP.

TOP CREDITORS                           of Claim    Amount
------------                           --------    ------
The Sakura Bank, Ltd.                 Bank Loan  71,821,224
The Bank of Tokyo-Mitsubishi, Ltd.    Bank Loan  39,752,375
The Dai-Ichi Kangyo Bank, Ltd.        Bank Loan  20,425,276
The Asahi Bank, Ltd.                  Bank Loan  35,740,947
The Sanwa Bank, Ltd.                  Bank Loan  15,131,250
The Sumitomo Bank, Ltd.               Bank Loan   8,690,478
The Yasuda Trust & Banking Co., Ltd.  Bank Loan  27,055,192
The Mitsui Trust & Banking Co., Ltd.  Bank Loan  17,257,656
The Industrial Bank of Japan, Ltd.    Bank Loan  33,524,200
Long-Term Credit Bank of Japan, Ltd.  Bank Loan  18,192,097
The Norinchukin Bank                  Bank Loan  18,579,670
The Toyo Trust & Banking Co., Ltd     Bank Loan  14,260,105
The Hokuriku Bank, Ltd.               Bank Loan   9,132,636
The Bank of Yokohama, Ltd.            Bank Loan   5,000,000
Dai-Ichi Life (U.S.A.) Inc.           Loan        5,000,000
Seaboard Farms, Inc.                  Trade Debt    433,120
Pasternak, Baum & Co., Inc.           Trade Debt     39,178
Farmland Foods, Inc.                  Trade Debt     77,934
Arancia-CPC, SA Dec V                 Trade Debt  2,590,000

VENTURE: Initiates Chapter 11 Reorganization Proceedings         
Venture Stores, Inc. (NYSE: VEN) today filed for
reorganization under Chapter 11 of the U.S. Bankruptcy Code
to give the company time to continue its strategic
repositioning and evaluate other options.  The company also
announced that it has obtained from its current bank group,
led by BT Commercial Corp., a new $190 million debtor-in-
possession revolving credit facility that will provide the
company with adequate capital to continue operations during
its reorganization.

"We have fought for longer than anyone thought we could to
complete Venture's repositioning, retain value for
shareholders and give the company a chance for success,"
explained Robert N. Wildrick, the company's chairman and
chief executive officer.  "At this point, however, we need
the time out afforded by a Chapter 11 reorganization to cut
expenses, rebuild sales and customer confidence, and get
our merchandise mix balanced to achieve profitability."

Since March 1996, Venture has been implementing a major
program to reposition the company's stores from a general
merchandise discount format to a new family value retail
concept.  Venture has focused on offering time-pressed,
value-minded shoppers an expanded assortment of high
quality home, family, and leisure merchandise at low

"Customer response to the repositioning initiatives that we
have been able to execute effectively has been very
positive, which demonstrates that our overall strategy is
sound," Wildrick noted.  "Unfortunately, we started from an
extremely difficult position and have been hampered at
every step of the process by a series of external factors."

According to Wildrick, Venture has had ongoing problems
with receiving timely merchandise shipments from many
vendors because of constant rumors and speculation about
the company's future.  This meant that stores were
frequently out of stock on advertised merchandise and basic
items, which undermined sales and customer confidence.  In
addition, Venture was unable to achieve the right
merchandise mix, which had a negative impact on margins and
profitability.  The resulting poor financial results made
vendors even more reluctant to ship merchandise, continuing
the cycle.

"Despite a tremendous amount of effort on the part of the
entire Venture team, we have been caught in a cycle that
has been impossible to break outside of Chapter 11," he
added.  "Now, we will be able to correct many of the in-
stock problems we have faced, win back customer confidence
and achieve a more profitable mix of goods."

Venture's 93 family value stores in the Midwest will remain
open and continue to offer a selection of high quality
merchandise at everyday low prices.  Stores will honor all
gift certificates, merchandise credits, customer returns
and layaway arrangements.  While the company plans to
review the profitability of each of its stores on a case-
by-case basis and will likely close some locations, no
decisions regarding any specific store closings have
been finalized at this point.

The company will also begin immediately to implement
efforts to reduce expenses by approximately $8 million to
$10 million, including consolidations at its headquarters
in O'Fallon, Mo.  Specific plans have not been finalized,
but affected associates will be notified as soon as
possible.  The reorganization will have no immediate impact
on staffing at Venture's stores, and will not affect its
existing medical insurance, retirement or profit sharing

Venture Stores, Inc. operates 93 family value stores in
nine states.  The company's common stock is traded on the
New York Stock Exchange under the symbol VEN.

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Troubled Company Reporter is a daily newsletter, co-
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Debra Brennan, Editor.   
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