TCR_Public/980212.MBX T R O U B L E D   C O M P A N Y   R E P O R T E R
      
   Thursday, February 12, 1998, Vol. 2, No. 30                     
                    
                   Headlines

ALPHASTAR: Motion to Dismiss
BARNEYS: Comparable Store Sales Increase 11.5%
EVANSVILLE BREWERY: Last Assets To Be Liquidated
GUY F. ATKINSON: Asset Sale to Clark
HALLA: Selling Auto Parts Business

LEVITZ FURNITURE: Monthly operating report
LEVITZ: Seeks to Reject GECC Lease
MIDCOM: Committee Seeks to Modify Exclusive Period
MIDCOM: Sale of AdVal Assets Ordered
MOLTEN METAL: Extension of Due Date for Loan

NETS: Disclosure Statement for Plan of Liquidation
ONEITA INDUSTIRES: Increased Losses Predicted
PARAGON TRADE: Employs Professionals
PARAGON TRADE: Committee Hires Professionals
PARAGON TRADE: Hearing Set on Leases

PARAGON TRADE: Receives Extension to File Security Holders
POCKET COMMUNICATIONS: Extension of Credit Facility
SMITH CORONA: Positive Results After Chapter 11 Emergence
WESTERN PACIFIC: Employees Stay to Wrap Up
WESTERN PACIFIC: The Last Battle - the Planes

                   *********

ALPHASTAR: Motion to Dismiss
----------------------------
A hearing on the motion of Harris Trust and Savings Bank
and Bank of Montreal ("the banks") for an order dismissing
the Chapter 11 bankruptcy cases of Alphastar Television
Network, Inc. and Tee-Comm Distribution Inc. is scheduled
on March 18, 1998.

The banks state that the debtors have ceased their business
operations and virtually all of the employees have been
laid off.  The assets of each estate are fully encumbered
by the validly-perfected pre-petition and post-petition
liens of the banks.

As of the date of this motion, substantially all of
AlphaStar's estate has been liquidated. The banks list a
summary of the priority of the liens and mortgages
encumbering AlphaStar's and Distribution's estates. The
banks claim that cause exists to dismiss these bankruptcy
cases because there is no longer any purpose to be served
in continuing them.

In a companion motion the banks argue that the automatic
stay should be permitted to permit the banks to enforce
their respective security interests against the debtors'
assets.  


BARNEYS: Comparable Store Sales Increase 11.5%
----------------------------------------------
Barney's, Inc. said that comparable store sales and EBITDA  
increased significantly for the first five months of the
1998 fiscal year over the comparable reporting period for
fiscal 1997.

The company reported more than a two-fold increase in
EBITDA year over year and a 10.1% increase in comparable
store sales for the same reporting period. EBITDA for the
22 weeks ended January 3, 1998 were $15.1 million compared
with $7 million for the prior year reporting period.

Comparable store sales for the 22-week period beginning
August 3 and ending January 3, 1998 were $151.8 million
compared to $137.8 million for the comparable period in
1997.  Total sales for the 22 week period ending January 3,
1998 were $165 million compared with total sales of $170.4
million for the same prior year reporting period.  In
addition, Barneys had four fewer full-price stores than in
the prior year.  For Fiscal December, the five week period
ending January 3, 1998, the company reported comparable
store sales of $38.2 million, versus $34.3 million over the
prior December period, an increase of 11.5%.


EVANSVILLE BREWERY: Last Assets To Be Liquidated
-------------------------------------------------
The Evansville Courier reported on February 7, 1998 that
the remaining assets of the bankrupt Evansville Brewing Co.
-- buildings, land and equipment -- could be liquidated by
early April, a brewery bankruptcy attorney said.

The company will ask a federal bankruptcy judge next month
to approve a $475,000 bid for the real estate submitted by
local businessman John Smith.   On Friday, the brewery also
filed a request for permission to hire an auctioneer for
the sale of equipment from the plant at Lloyd Expressway
and Fulton Avenue.

The brewery is seeking to hire National Industrial
Service Inc. of St. Louis to auction brewery equipment in
late March or early April.

Sale of Sterling, Falls City and other beer brands brewed
by Evansville Brewing was finalized Jan. 30. The buyer,
Pittsburgh Brewing Co., got the labels for $850,000 and a
five-year agreement to pay 4 cents for every case of
former Evansville beer sold.


GUY F. ATKINSON: Asset Sale to Clark
------------------------------------
Federal Filings Inc. reported on February 10, 1998 that a
limited asset sale to Clark Construction Group Inc. was
approved at a Feb. 6 hearing over the objections of the
creditors' committee and banks.  The sale, which is
expected to close sometime next week, includes the Atkinson
name, goodwill, certain personal property, and
some intellectual property rights for $1 million cash and
future consideration over four years.


HALLA: Selling Auto Parts Business
----------------------------------
South Korea's bankrupt Halla conglomerate is negotiating to
sell all or part of its auto parts operations to American,
British and German companies.  Halla owns South Korea's
largest auto parts maker, Mando Machinery Corp.

ITT Corp. of the United States and British auto parts maker
Lucas Industries PLC are interested in buying all or part
of Mando's steering, brake and shock absorber plants, Halla
said.


LEVITZ FURNITURE: Monthly operating report
------------------------------------------
In its monthly operating report for the fiscal month ended
December 31, 1997, Levitz Furniture Incorporated and
subsidiaries reported a Net Loss of ($19,995,000) on Net
Sales of $73,800,000


LEVITZ: Seeks to Reject GECC Lease
----------------------------------
The Debtor seeks to reject the lease of a Baltimore,
Maryland property and the improvements thereon as of
February 28. The Debtors have determined that it is in the
best interests of their estates to reject the lease, which
imposes burdensome obligations. General Electric Capital
Corporation has a put option requiring Levitz to purchase
the premises and the improvements thereon at a purchase
price of $4 million, an amount the debtors believe to be in
excess of the property. As a result of this put option, the
Debtors are not likely to sell or assign the lease. By
rejecting the lease now, the Debtors will not incur any
further administrative expenses.


MIDCOM: Committee Seeks to Modify Exclusive Period
--------------------------------------------------
The Official Committee of Unsecured Creditors of Midcom
Communications, Inc. is requesting a modification of the
exclusive periods during which only the Debtors may file,
and solicit votes for, a plan of reorganization, and
permitting the Committee to file and solicit acceptances
for a liquidating plan of reorganization.

The Committee asserts that because substantially all of the
physical assets of the Debtors will shortly be liquidated
in these Chapter 11 cases and all that remains will be the
resolution of claims, pursuit of causes of action and
distribution to creditors. The Debtors' secured
indebtedness has been paid in full and any decisions
impacting the Debtors' assets and liabilities have
ramifications only for unsecured creditors.


MIDCOM: Sale of AdVal Assets Ordered
-------------------------------------
On February 3, 1998, the Court approved the sale of the
assets of Midcom's remaining subsidiary, AdVal, to DICOMM
Ventures, Inc.


MOLTEN METAL: Extension of Due Date for Loan
--------------------------------------------
On December 22, 1997, the Company secured a short-term loan
of $7.7 million from a lender to fund continued operations
and to allow the Company time to secure medium-term
financing from various potential financing sources,
including from the Lender.  The short-term loan was
approved by a final Order of the Bankruptcy Court on
January 6, 1998. The short-term loan, which was originally
due on January 30, 1998, is secured with a lien on
substantially all of the assets of the Company
and its subsidiaries.

On January 30, 1998, the Lender agreed in writing to extend
the term of the short-term loan for an additional week, to
February 6, 1998, so that the Lender could complete its due
diligence with respect to offering a $20 medium-term loan.
On February 3, 1998, the Lender provided a proposed
commitment to make a medium-term loan of $20 million to the
Company, subject to agreement on terms and conditions of
the financing. Additional time is needed to negotiate
the proposed financing transaction. Accordingly, on
February 6, 1998, the Lender agreed in writing to extend
the term of the short-term loan for an additional
week, to February 13, 1998, so that the Company and the
Lender can complete negotiations with respect to the
proposed financing transaction.


NETS: Disclosure Statement for Plan of Liquidation
---------------------------------------------------
Nets, Inc. filed a plan of liquidation.  The plan provides
for the liquidation of the debtor's assets and distribution
of all available proceeds to pay priority and
administrative expenses and a pro rata dividend to
unsecured creditors who will be paid in cash subject to
appropriate reserves for disputed claims and certain other
adjustments.

The debtor will be dissolved when all of the assets that
are capable of liquidation are liquidated and when all of
the proceeds thereof are distributed to the holders of
claims in accordance with the plan.

Under the plan, approximately $8 million will be available
on the effective date to pay holders of allowed
administrative and priority expenses; holders of allowed
secured claims, if any and a pro rata dividend to general
unsecured creditors.

The plan provides that allowed priority claims, if any,
shall be paid from the plan fund as soon as practicable
after the effective date.  Pre-petition tax liabilities are
estimated at $15,000. The estimate does not include the
$1.1 million proof of claim filed by the Department of
Revenue for Pennsylvania that includes a priority claim of
approximately $850,000.

Class One Claim - the Secured claim - consists of four
convertible demand notes to Jim Manzi.  The debtor believes
that the Manzi notes are secured by a pre-petition
perfected security interest in all the assets of the
debtor.  The Committee disagrees.  There is litigation
concerning the Class one claim.  Except to the extent the
court allows Manzi's secured claim, the debtor anticipates
that there will be no allowed secured claims.

Class Two Claims - Unsecured Creditors- are impaired under
the plan.  Claims holders will receive a pro rata cash
payment from the plan fund.

Class Three Interests - all holders of preferred and common
stock- are impaired under the plan.  The plan provides that
all class three interest holders will receive nothing.


ONEITA INDUSTIRES: Increased Losses Predicted
---------------------------------------------
In its latest FORM 12b-25 Notification of late filing with
the SEC, Oneita Industries Inc. reported:

Sales for the 1998 first quarter will be approximately
$26,500,000 compared to $33,900,000  for the 1997 first  
quarter.  The decrease of $7,400,000 was the result of
lower units sold and lower unit sales prices.

Net income for the 1998 first quarter is estimated to be a
loss between $9,500,000 and $10,500,000 compared to a loss
of $5,900,000 last year.  The increased loss was caused  by
the unit  price  decrease mentioned above and inventory  
write downs to estimated fair market  value both offset by
reduced manufacturing costs.


PARAGON TRADE: Employs Professionals
------------------------------------
Paragon Trade Brands, Inc. has received authorization to
hire Wilkie Farr & Gallagher as special reorganization
counsel, nunc pro tunc to January 6, 1998. The application
has been approved on an interim basis for 60 days from the
January 16, 1998 order by Judge Margaret H. Murphy until
WF&G can supplement the application with more complete
information concerning any connections or relationships
which may present an adverse interest to the Debtor or its
estate. The Debtor has 20 days from the order date to
provide this information.

Paragon also received authorization on February 3, 1998 to
hire Cravath Swaine & Moore as special litigation counsel
to assist the Debtor in pursuing relief in an action
currently pending in the U.S. District Court for the
Northern District of Texas, subject to providing further
information within 20 days about any of CSM's prior
connections with the Debtor, and to hire Baker & Botts,
L.L.P. as special litigation counsel in the Texas action,
subject to the same 20-day supplemental action.

On February 4, 1998, Paragon received authority to hire
Connolly, Bove, Lodge & Hutz as its special local
litigation counsel in The Proctor & Gamble Co. v. Paragon
Trade Brands, Inc. civil action and Rockey, Milnamow &
Katz, Ltd. as special counsel to represent Paragon in
patent matters.

Paragon is conditionally allowed to employ The Blackstone
Group as their financial advisor and investment banker.
Blackstone has been granted permission to report its time
in 15-minute increments, not half-hour increments as they
had requested. Furthermore, the Court asserts that
Blackstone did not properly apply for permission to receive
monthly fees, adjusted for a reduced level of activity when
necessary. Blackstone must supply supplemental information
and a hearing will convene on March 13, 1998 on these
matters. No compensation shall be paid to Blackstone until
further order.

Finally, Paragon has applied to hire Hopgood, Calimafde,
Kalil & Judlowe, L.L.P. as its special litigation counsel
to coordinate as necessary with counsel in The Proctor &
Gamble Co. v. Paragon Trade Brands, Inc. civil action. A
decision is pending.


PARAGON TRADE: Committee Hires Professionals
--------------------------------------------
The Official Committee of Unsecured Creditors was granted
authority on February 3, 1998 to hire O'Melveny & Meyers
LLP as counsel and Parker, Hudson, Rainer & Dobbs LLP as
co-counsel. The Committee must supply additional
information on how the legal tasks will be divided by the
two firms.


PARAGON TRADE: Hearing Set on Leases
------------------------------------
A hearing has been set on February 23, 1998 to consider an
extension of time to assume or reject certain
nonresidential real property leases.


PARAGON TRADE: Receives Extension to File Security Holders
----------------------------------------------------------
The Debtor has received permission to extend the time to
file the list of equity security holders, statements and
schedules until March 3, 1998.


POCKET COMMUNICATIONS: Extension of Credit Facility
---------------------------------------------------
Federal Filings Inc. reported on February 10, 1998 that
Pocket's lenders and the Federal Communications Commission
agreed to extend the maturity of the company's $5 million
credit facility and the FCC deadline for foreclosing on
Pocket's wireless PCS licenses to Feb. 19.  In addition,
the U.S. Bankruptcy Court in Baltimore adjourned Pocket's
application for authority to select one of the FCC's debt
restructuring options until the Feb. 19 hearing.


SMITH CORONA: Positive Results After Chapter 11 Emergence
---------------------------------------------------------
Smith Corona Corp. reported its financial results for the
second quarter ended Dec. 31, 1997.  The company reported
net income of $2.2 million, or 78 cents per share, on
sales of $17.0 million, compared with a loss of $2.6
million, or $1.17 per share, on sales of $22.4 million for
the same period last year.  Results included a gain of
approximately $3.7 million from the sale of the company's
manufacturing operations in November 1997, as well as an
extraordinary gain of $.5 million from favorable claims
resolutions.

For the six months ended Dec. 31, 1997, the company
reported net income of $.7 million, or 26 cents per share,
on sales of $31.8 million.  For the same period last year,
the company reported a loss of $2.6 million, or $1.13 per
share, on sales of $43.4 million.  Results for the period
last year included a pension curtailment gain of $3.4
million.  

Selling, general and administrative expenses for the
quarter and six months included increased spending of $2.8
million and $3.7 million, respectively, to support new
product development and advertising.  

Smith Corona continued to show improvement in gross margin
as a percent of net sales.  Gross margin for the quarter
totaled 28.1 percent, vs. 27.2 percent for the same period
last year.  For the six months, the company reported gross
margin of 25.3 percent, compared with 23.1 percent for the
six months last year.

The second quarter was the first period in which Smith
Corona recorded sales totaling $.4 million of new products
targeted to the high-growth small office/home office (SOHO)
market.  At the recent Consumer Electronics Show, the
company introduced 14 new and several next-generation
products in such high-volume categories as multifeature
wireless telephones, hands-free headsets, telassistant
phones with integrated caller ID and personal electronic
organizer features, and plain-paper inkjet facsimile
machines.


WESTERN PACIFIC: Employees Stay to Wrap Up
------------------------------------------
The Gazette reported on 2/07/98 that WestPac asked about
100 of its reservation agents to stay on for two extra
weeks to help ticket holders and close down operations.
About 70 showed up for work Friday. WestPac is assuring the
agents that Smith Management Co. has been mandated by the
U.S. Bankruptcy Court to pay them for their work.

Some WestPac employees say they were coerced into staying
when WestPac officials told them they would not be eligible
for unemployment insurance benefits if they quit.  WestPac
officials deny any coercion. Officials said in court Friday
the company had paid health-and life-insurance benefit
premiums that will cover former employees through the end
of February.

Owners of jets want them back in service: The 11 companies
who own WestPac's 18 jets don't want the planes sitting on
the Denver International Airport tarmac.  The companies
argued in bankruptcy court Friday that they want Smith
Management Co., the New York investment company that holds
WestPac's former assets, to decide soon whether it will
sublease the jets to other airlines or return them.
Smith Management is asking for 30 days to decide.
Bankruptcy Judge Sidney Brooks said he may decide Monday
whether to order Smith to make up its mind immediately.


WESTERN PACIFIC: The Last Battle - the Planes
---------------------------------------------
The Denver Post reported on 2/10/98 that because of
defaults in airplane leases, leasing companies are in court
fighting for the right to seize their planes and fly them
out of Denver International Airport.  At Monday's hearing,
lawyers for Smith Management and the WestPac bankruptcy
estate said they planned to return six of the 18 aircraft
immediately to lessors and they wanted to decide over the
next two weeks whether to make good on the leases for any
or all the remaining 12.

If they do, they would make past-due rent payments and then
sublease the planes to other aviation companies, presumably
at a premium over the current lease rate.  Smith hoped to
pocket the premium as part of the collateral the investor
held for its loans.

U.S. Bankruptcy Court Judge Sidney Brooks made a ruling on
the lease issue that was a compromise between giving
lessors the immediate right to repossess their planes and
giving Smith two weeks or more to honor the leases for the
12 planes.  He ruled that Smith has until 5 p.m. Thursday
or whatever period the lease allows - whichever is later -
for paying past-due bills of the leasing companies. If
there is no cure, the lessors are entitled to take their
planes back, Brooks said.

                     -----------

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