TCR_Public/980226.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 26, 1998, Vol. 2, No. 39                    

AL TECH: Seeks to Employ Professionals
ARROW TRANSPORTATION: Responds to Matlack Objections
GULF CANADA: Announces Major Debt Reduction Program
GULF RESOURCES: Trustee Applies to Employ Professionals

HOMEPLACE STORES: Committee Hiring Ernst & Young
MIDCON OFFSHORE: Trustee Seeks Action on Cash Collateral
MOLTEN METAL: Seeks to Employ Appraiser
NIAGARA MOHAWK: State Regulators Approve Plan

ORANGE COUNTY: May Abandon Debt Management Policy
OXFORD HEALTH: Launches Turnaround Plan with New CEO
PACKAGING PLUS: Leads Field to Acquire Vallerie's Trucking
RDM SPORTS: Foothill Supports Appointment of Trustee
STRAIGHT ARROW: Emerges from Bankruptcy

TOSHUKU AMERICA: Applies to Reject Executory Contracts
TOSHUKU AMERICA: Seeks Time to Assume or Reject Leases


AL TECH: Seeks to Employ Professionals
Al Tech Specialty Steel Corp. seeks to employ Levin,
Fishbein, Sedran & Berman as counsel, nunc pro tunc to the
petition date, to Debtor regarding litigation in
Pennsylvania, as one of several plaintiffs seeking class
certification in In re: Graphite Electrodes Antitrust

If the Pennsylvania Litigation is not certified as a class
action, LFS&B intends to apply to the Western District of
New York Court for allowance of compensation according to
its contingency fee arrangement with the Debtor. If the
Pennsylvania litigation is certified class action, LFS&B
will not seek compensation from the Debtor's estate, and
will apply only to the United States District Court for the
Eastern District of Pennsylvania for its compensation.

The Debtor also seeks to employ Dollinger & Dollinger, PA
as counsel for the sale of a New Jersey property.

ARROW TRANSPORTATION: Responds to Matlack Objections
Matlack, Inc. has filed an objection to the proposed
Disclosure Statement of Arrow Transportation Co. of
Delaware, dated December 17, 1998. Matlack claims the Plan
of Reorganization is doomed to fail and therefore should be

Matlack contends that because the Purchase of Assets
Agreement dated September 3, 1997 provides for an indemnity
period that runs until September 25, 2002, the Court must
freeze any attempt by Arrow to distribute funds to
creditors until the indemnity period expires. Matlack
asserts there is a theoretical possibility that a
contingent claim under the Sale Agreement could ripen into
an actual claim by the end of 2002. Matlack complains that
its rights under the Sale Agreement would be frustated by
any distribution to prepetition priority and general
unsecured claims prior to the expiration of the indemnity

The Debtors move the Court to reject Matlack's attempt to
thwart a distribution to the creditors. Matlack's
contingent indemnity claims are not "actual" administrative

GULF CANADA: Announces Major Debt Reduction Program
Gulf Canada Resources Limited today announced a significant
debt reduction program, including the sale of North
American and international producing and non-producing
assets and the creation of an infrastructure trust in  
Western Canada, with target proceeds of approximately $850

Gulf has hired RBC Dominion Securities Inc. to assist in
the creation and marketing of an infrastructure trust to
capture value by selling approximately 49 per cent of a
portion of the Company's extensive network of gas
transmission and processing facilities. Gulf will continue
to operate the facilities and maintain the flexibility to
process its gas volumes in what the Company believes is
becoming a very exciting gas market.

In another move today, the Board of Directors of Gulf
adopted a Shareholders' Protection Rights Plan. The Plan
will be presented to the shareholders for ratification at
the Gulf Annual and Special Meeting on April 30, 1998.  
(Canada Newswire; 02/20/98)

GULF RESOURCES: Trustee Applies to Employ Professionals
Charles E. Bearden, Chapter 11 Trustee for Gulf Resources
Corporation and Mustang Oil & Gas Corporation has proposed
to employ the law firm of Jeffers & Banack, Inc. as special
counsel to appear on his behalf and to assist the Trustee
in such representation as is appropriate for the estate.
The trustee requires J&B's services to counsel the Trustee
on pending matters, assist on sales of property, assist in
dealing with the Debtors' secured creditors on cash
collateral and lift stay issues, and to undertake other
work as may arise.  The Trustee seeks to employ counsel on
an hourly basis.

The Trustee also seeks to employ Platt, Sparks & Associates
Consulting Petroleum Engineers, Inc. to assist with work
regarding applications with the Railroad Commission of
Texas. PSA requires a retainer of $2,500 and usual hourly

The Trustee also seeks to employ Providence Oil Company to
assist with gas and oil exploration and production matters
at an hourly fee of $400. The services of an oil and gas
exploration and land work expert are required by the estate
to evaluate assets and prepare them for sale.

The Trustee further seeks to employ Smart Business
Solutions to assist with inventory of the computers systems
and computer hardware on a flat fee basis of $2,000.

Finally, the Trustee seeks to employ accountants J. A.
Compton & Co. at an hourly fee.

HOMEPLACE STORES: Committee Hiring Ernst & Young
The Official Committee of Unsecured Creditors of Homeplace
Stores, Inc. has applied to employ Ernst & Young, LLP as
accountants and financial advisors, nunc pro tunc to
January 16, 1998. Ernst & Young would be paid on an hourly
basis for its services.

MIDCON OFFSHORE: Trustee Seeks Action on Cash Collateral
Sheila MacDonald, Chapter 11 Trustee for Midcon Offshore,
Inc., seeks authority to Extend and Restrict Use of Cash
Collateral. The Trustee wants to ensure funds are available
primarily for bookkeeping and administrative services and
de minimis overhead expenses.

MOLTEN METAL: Seeks to Employ Appraiser
Molten Metal Technology, Inc. seeks to employ East
Tennessee Appraisal Group to conduct an appraisal of the
Debtors' Q-CEP facility and Tech Center located in Oak
Ridge, Tenn. The appraisal is needed to support Debtors'
request for allowance of liens priming asserted mechanics
liens on the Debtors' Tennessee assets sought in the
Financing Motion.

The Debtors will require up to the full amount of the $13
million in new financing contemplated in the Financing
Motion to complete the projects necessary to the Debtors'
capital improvement business plan and to fund net operating
cash deficiencies pending the completion of such projects.

In light of an approaching March 4 hearing on the matter,
the Debtors request that the Court grant this relief on an
emergency basis, either with or without a hearing, on or
before February 20, 1998.

NIAGARA MOHAWK: State Regulators Approve Plan
State regulators approved Niagara Mohawk Power Corp.'s
restructuring plan Tuesday, which proponents say will
reduce rates and open up competition in New York's gas and
electricity markets.

The plan will reduce rates for large industrial and
commercial customers by up to 25 percent. Residential and
small commercial customers will get rate cuts of less than
3.5 percent.

The plan will allow Niagara Mohawk consumers to buy
electricity from cheaper sources. In return, Niagara Mohawk
will be allowed to branch out into what the company says
are more lucrative businesses.

Niagara Mohawk had predicted double-digit rate increases if
the plan did not go through, and had threatened to file for
bankruptcy. The company provides gas and electricity to 2
million customers in upstate New York.
(AP Online; 02/24/98)

ORANGE COUNTY: May Abandon Debt Management Policy
Beset by competing demands for revenue and with interest
rates moving against it, Orange County may abandon its once
high-priority plan for shedding part of nearly $1 billion
of bankruptcy recovery debt from its books, county
officials said.

With rates so low, it is probably too costly for the county
to buy back its high-coupon bonds, chief financial officer
Gary Burton said. "Our bonds are selling for considerably
over their face value," Burton noted during a meeting with
reporters last Friday to discuss the county board of  
supervisors' new long-range financial planning process.

Burton and other county officials, including chief
executive officer Janice M. Mittermeier, said the board may
shelve its debt-management policy adopted last April. Early
defeasance was touted at the time as a way to lower debt
service costs and recover investment-grade ratings lost
after the December 1994 bankruptcy.
(American Banker Inc. - Bond Buyer 24-Feb-1998)

OXFORD HEALTH: Launches Turnaround Plan with New CEO
Oxford Health Plans Inc. launched its turnaround strategy
by announcing a $700 million recapitalization package and
naming a veteran managed-care executive as its new chief
executive officer. But a surprisingly large loss and the
last-minute bailout of a critical financing partner rattled
investors, who sent the company's share price tumbling 7.5%.

The Norwalk, Conn., managed-care company reported a fourth-
quarter loss of $284.7 million, or $3.58 cents a share,
more than double the deficit it forecast for the period in
December. And it said high administrative and medical costs
mean its losses will continue "until the company begins to
realize the benefits" of its resusitation efforts.

As expected, the company named Norman Payson, a 49-year-old
physician and former CEO of Healthsource Inc., as its new
chief executive. Kohlberg Kravis Roberts & Co. withdrew
from the refinancing deal at the last minute, citing
"philosophical differences" with Dr. Payson. That means
that Texas Pacific Group, alone, will be the new equity
investor. It is putting up $350 million to purchase two new
issues of preferred stock that come with warrants for 22.5
million Oxford common shares.  (The Wall Street Journal

PACKAGING PLUS: Leads Field to Acquire Vallerie's Trucking
Packaging Plus Services, Inc. (OTC Bulletin Board: PKGP)
announced that it has obtained the consent as the leading
candidate under its formal purchase agreement for the
purchase of all of the assets of Vallerie's Transportation
Services, Inc., from the U.S. Bankruptcy Court in
Connecticut. PKGP's President and CEO, Mr. Richard A.
Altomare was quoted as saying, "Although others may bid
against us at the final hearing to be held on March 5, PKGP
as the leading candidate, has secured a priority position
for this purchase. Our offer has the support of all
creditors at this stage."

Vallerie's is a $28,000,000 regional transportation
company. It has approximately 300 employees, and in excess
of $3,000,000 in assets, including equipment. FQ
Transportation, PKGP's wholly owned subsidiary, will
purchase the assets and oversee Vallerie's operation and
other future transportation acquisitions.

RDM SPORTS: Foothill Supports Appointment of Trustee
Foothill Capital Corporation, as agent for a group of
lenders of RDM Sports Group, Inc., supports the United
States Trustee's emergency motion for appointment of a
Chapter 11 trustee. Foothill does cite limitations to its
support, however. Foothill does not support the appointment
of a trustee in the Debtors' Chapter 11 cases with expanded
powers, such as the power to investigate and pursue claims
without further Order of the Court.

Foothill also does not waive its rights under the DIP loan
agreement and specifically reserves the right to exercise
such rights and remedies, including, the right to call a
default under such agreement for the appointment of t
Chapter 11 trustee and to exercise its remedies thereunder.
Foothill also reserves the right to seek relief from the
automatic stay to exercise its rights and remedies with
respect to the collateral securing the obligations of the
Debtors under the Loan Agreement.

If a trustee is appointed, Foothill requests that it, along
with the Creditors Committee, the Bondholders Committee and
the United States Trustee fashion the appropriate Order
appointing a trustee.

STRAIGHT ARROW: Emerges from Bankruptcy
Devon Katzev, president of Straight Arrow Products, Inc.,
Bethlehem, PA, today announced that the company has
successfully emerged from Chapter 11 of the U.S. Bankruptcy
Code.  The company entered Chapter 11 little more than a
year ago after a parting of the ways with its former

Straight Arrow manufactures and markets Mane 'n Tail(TM)
Shampoo and Conditioner, Hoofmaker(R) Intensive Protein
Moisturizer and Body Guard(TM) Insect Repellent Towlettes.

Willow Grove, Pa. based KMR Management, Inc., a management
consulting company, was hired by Straight Arrow in July
1996 to supply management services and to guide the company
through its stabilization and restructuring. "KMR is
largely responsible for Straight Arrow's ability to
survive," added Katzev.

Katzev added that, as part of the re-launch of the product
lines, a new branding campaign will be rolled-out
regionally beginning in April and will include television,
radio, print and direct mail advertising.

TOSHUKU AMERICA: Applies to Reject Executory Contracts
Toshuku America, Inc. seeks to reject an unexpired
agreement of lease of non-residential real property between
Manufacturers Life Insurance Company and Toshuku Los
Angeles, Inc., a consulting agreement between the Debtor
and Shalom Greenbaum, and a financial information network
services agreement between the Debtor and Telerate Systems

TOSHUKU AMERICA: Seeks Time to Assume or Reject Leases
Toshuku America, Inc. seeks an extension of time to assume
or reject three unexpired leases of nonresidential real
property in New York, California, and Oregon for 120 days,
through and including June 22, 1998. The Debtor's
management and professionals have continued working to
stabilize the operations of the Debtor's businesses and to
address numerous administrative and business issues. The
Debtor is still evaluating the value of the leases to the


A listing of meetings, conferences and seminars appears
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Debra Brennan and Lexy Mueller, Editors.   
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