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T R O U B L E D   C O M P A N Y   R E P O R T E R
      
    Thursday, March 5, 1998, Vol. 2, No. 44                 
                    
                   Headlines

ALLIANCE ENTERTAINMENT: Reports January Operating Results
BN1 TELECOMMUNICATIONS: Seeks Extension for Exclusivity
BRUNO'S: Chase, PPM In Contest To Provide Bruno's DIP Pact
CALDOR: General Electric Lighting v. Debtors
CALDOR: Operating Results

DOEHLER-JARVIS: Seeks Time to Assume or Reject Leases
ELI WITT: AIG Applies for "Substantial Contribution"
FIRST MERCHANTS: Court Confirms Plan
FLOWIND CORPORATION: Needs Time to Assume or Reject Leases
FOXMEYER: McKesson Objects to Technology Claims Consultant

GENERAL WIRELESS: FCC Wants Suit Moved To District Court
L.A. GEAR: Asks U.S. Trustee to OK Financial Advisor
MANHATTAN BAGEL: Interim Use of Cash Collateral Extended
MARVEL HOLDINGS: White & Case Objects to Compromise
MIDCOM: Committee Objects to Foothill Payment

MONTGOMERY WARD: Let's Compare Losses
PAN AM: May Stiff Miami
PAN AM: Reported Talks with Icahn
STRAWBERRIES: Seeks Extension of Exclusive Periods
SUN JET: Ready to Fly Again

TOSHOKU AMERICA: Committee Seeks Reorganization Officer
VENTURE: Reclamation Claims Must Be Filed By March 23
WESTERN PACIFIC: Who Walked Away With Money?
YAMAICHI SECURITIES: Atsuo Miki Questioned on Cover Up

                    *********

ALLIANCE ENTERTAINMENT: Reports January Operating Results
---------------------------------------------------------
Alliance Entertainment Corp., reported significantly
reduced operating losses for January, 1998.  At the same
time, the company said that it continues to be on track
with its business plan and expects to emerge from Chapter
11 by mid-year.

For the month ended January 31, 1998, Alliance reported a
consolidated net loss of $4.8 million on net sales of $24.6
million.  The reported loss includes $2.4 million in
interest and reorganization expenses.

Through the Blackstone Group, the company is soliciting
offers for the purchase of its two remaining music labels
Castle Communications and Concord Jazz.  The company
remains interested in identifying an equity sponsor, and
the company is moving forward with a reorganization plan
both on a stand-alone and equity partnership bases.


BN1 TELECOMMUNICATIONS: Seeks Extension for Exclusivity
-------------------------------------------------------
BN1 Telecommunications, Inc. is seeking an order
extending, by an additional 120 days the debtor's
exclusive time to file a plan of reorganization and an
additional sixty days beyond the 120 day extension period
to gain acceptance of the plan of reorganization.

BN1 seeks an extension of time of the exclusive period to
file a plan until July 29, 1998 and until September 27,
1998 to gain acceptance of such plan.

BN1 states that it has stabilized the relationships with
its telecommunications service providers and the rates
which it is charged, it has taken substantial steps to
stabilize its customer base, and it is negotiating with a
number of prospective purchasers and believes that a sale
of its assets may be reached in the near future.


BRUNO'S: Chase, PPM In Contest To Provide Bruno's DIP Pact
----------------------------------------------------------
A bidding war has emerged between Chase Manhattan Bank and
PPM America Special Investments Fund L.P. to provide
Bruno's Inc. with a $200 million debtor-in-possession
financing facility.  Chase and PPM presented modifications
to their DIP financing offers to the supermarket chain and
its creditors' committee at a meeting in New York on
Monday. (Federal Filings, Inc. 04-Mar-1998)


CALDOR: General Electric Lighting v. Debtors
-------------------------------------------
As reported in Issue Number 25 of the Caldor Bankruptcy
News (Published by Bankruptcy Creditors' Service), at a
recent Pre-trial Conference before Judge Garrity, counsel
for GE explained the basis of GE's Adversary Proceeding
against the Debtors to Judge Garrity: that GE had a
prepetition retailer and consignment agreement with the
Debtors whereby GE delivered large lamps to the Debtors on
consignment.  As of the Petition Date Caldor had at least
$750,000 of consigned inventory and GE continued to deliver
the large lamps postpetition.  

GE is seeking payment for these lamps, said GE's attorney,
and there is also a set-off issue.  GE was supposed to
provide Caldor with $500,000 of free goods in both 1996 and
1997, which GE did not do. GE is seeking a set-off of that
total amount, $1,000,000, against the prepetition monies
owed GE. When the Debtors sold the consigned lamps to which
GE held title, according to GE's attorney they were
supposed to segregate the resulting proceeds.

There are two amounts involved, asserted the attorney:  a
$2,000,000 prepetition amount for which GE filed a Proof of
Claim and at least $750,000 for the consigned inventory
sold postpetition.  GE believes the Debtors have used the
proceeds from the sale of these lamps to which GE
held title, even though, when the Debtors sold the
consigned lamps to which GE held title, they were supposed
to segregate the resulting proceeds.

The Debtors are seeking to negotiate with General Electric
before proceeding to set a date for discovery.  Judge
Garrity suggested that the parties continue to talk.  He
noted that the crux of the issue seemed to be whether GE's
obligation to supply the free goods was a prepetition or
postpetition obligation.  


CALDOR: Operating Results
-------------------------
THE CALDOR CORPORATION AND SUBSIDIARIES
Consolidated Statement of Operations(Dollars in Thousands)
For the period November 30, 1997 to January 3, 1998 the
company reported:
Net Sales                                        $423,137
Net Income / (Loss)                               $32,763


DOEHLER-JARVIS: Seeks Time to Assume or Reject Leases
-----------------------------------------------------
The debtors, Doehler-Jarvis, Inc., and affiliated
companies are seeking an extension of the time period
within which the debtors may assume or reject their leases
of nonresidential real property. The debtors have
identified 13 unexpired leases of nonresidential real
property in 7 states.  The aggregate amount of base rent
owed by the debtors per year exceeds $425,000.

The debtors state that they are presently in the process
of formulating a plan or plans of reorganization. In
connection with the plan or plans, the debtors will
evaluate their financial situation and the potential value
of the leases.  However, the debtors argue that to
prematurely make determinations about assumption and
rejection could well subject the debtors and their estates
to significant and unnecessary administrative expense
claims.

The debtors seek an extension for a period of 91
additional days until July 6, 1998.


ELI WITT: AIG Applies for "Substantial Contribution"
----------------------------------------------------
American Home Assurance Company and American International
Group, Inc. are asking the court for the allowance of an
administrative expense for making a "substantial
contribution " to the Chapter 11 case of The Eli Witt
Company.

AIG is currently owed $1,414,000 from a payment made to
the state of Florida.  AIG argues that it advanced three
primary issues to benefit the estate.  AIG advanced the
preservation of the "knowledge of insolvency" defense to
certain reclamation claims; the preservation of potential
claims against Culbro, the debtor's parent company; and
objections to the final fee applications filed by lead
counsel for the Committee.  AIG spent its own money
addressing these three issues.  AIG incurred fees in
excess of $100,000 in helping the estate with these
matters and AIG's work resulted in a direct benefit to the
estate of $1,148,260.

AIG is seeking its actual expenses for professional fees
in contributing to the estate.


FIRST MERCHANTS: Court Confirms Plan
------------------------------------
The court confirmed First Merchants' liquidating plan of
reorganization and the plan is scheduled to be effective on
March 15.  At the confirmation hearing, the U.S. Bankruptcy
Court in Wilmington, Del., overruled the objection filed by
the Internal Revenue Service.  The sub-prime auto lender
was able to settle, prior to the hearing, an objection
regarding plan releases filed by the plaintiffs in a class
action suit. (Federal Filings Inc. 04-Mar-1998)


FLOWIND CORPORATION: Needs Time to Assume or Reject Leases
----------------------------------------------------------
At a hearing on March 27, 1998, Flowind Corporation,
debtor,  will seek an extension of time to assume or
reject nonresidential real property leases from February
28, 1998 to and including the Effective Date of the
debtor's plan of reorganization, but  not later than May
31, 1998.  

Flowind is the lessee under 17 identified leases.  The
debtors most valuable assets are its wind farms.  The
leases affected by this motion are the leases or contracts
for the use of land on which the wind farms are located.  
The debtor claims that it is currently not in a position
to decide which land rights to assume and which land
rights to reject.  

The debtor plans to sell its windfarm assets to MNR Energy
Systems, Inc. dba Premier Technologies and ESI Energy,
Inc./ESI Tehachapi Acquisitions, Inc., through its plan of
reorganization.  It is unknown whether MNR and ESI will
require assumption and assignment of all or less than all
of the land rights.


FOXMEYER: McKesson Objects to Technology Claims Consultant
----------------------------------------------------------
The McKesson Corporation objects to the application of the
Chapter 7 Trustee for an order approving the retention of
Chicago Partners, LLC to serve as consultants to the
Trustee and requests that the application be denied.

McKesson claims that if the court grants the application,
then Chicago Partners, would have full access to all of
the business records and files that were purchased by and
belong to McKesson.  There are no safeguards to prevent
the consultants from engaging in extensive discovery that
would not be permitted in certain Antitrust litigation
wherein Chicago Partners is an expert.

The unrestricted discovery would be prejudicial to
McKesson because the discovery period in the Antitrust
Litigation has ended.


GENERAL WIRELESS: FCC Wants Suit Moved To District Court
--------------------------------------------------------
In a last-ditch effort to delay General Wireless' avoidance
claims trial against the Federal Communications Commission,
the government late Monday filed a motion to withdraw
reference and move the case to the district court.  The
government plans to seek a stay of litigation pending a
ruling on the motion.  The company's subsidiaries, which
hold licenses to provide personal communications services
in areas in and around San Francisco, Miami, and Atlanta,
sued the FCC and contended that amounts owed to the agency
for the wireless licenses exceed their value by more than
$750 million. (Federal Filings Inc. 04-Mar-1998)


L.A. GEAR: Asks U.S. Trustee to OK Financial Advisor
----------------------------------------------------
L.A. Gear, Inc., submitted an application to the
United States Trustee for authority to employ Libra
Investments, Inc. as its financial advisor.  The
application seeks authorization for the debtor to employ
Libra Investments as the debtor's financial advisor in
connection with the restructuring of L.A. Gear's $50
million principal amount 7.75% convertible subordinated
debentures due 2002.


MANHATTAN BAGEL: Interim Use of Cash Collateral Extended
--------------------------------------------------------
The court in the case of Manhattan Bagel Company, Inc.,
and I & J Bagel, Inc., debtors, entered an order
authorizing the debtor to use cash collateral for the
period commencing on March 1, 1998 and continuing through
the period ending April 30, 1998 in accordance with the
revised cash collateral budget, up to the aggregate amount
of $6.146,719. through the period ending April 30, 1998 as
set forth in the debtor's budget.


MARVEL HOLDINGS: White & Case Objects to Compromise
---------------------------------------------------
The law firm of White & Case is an administrative creditor
in the case of Marvel Holdings, Inc., and Marvel (parent)
Holdings, Inc.  The law firm objects to the joint motion
of the debtors and LaSalle National Bank, as successor
Indenture Trustee for the entry of an order approving a
compromise and settlement.  

The settlement provides for the satisfaction of the
bondholders' secured claims by distributing their
collateral to them, fixes the amount of the bondholders'
unsecured claims in an amount equivalent to the gross
amount owed under the indentures less the value of the
returned collateral and awards La Salle dominion over
claims and causes of action that may otherwise belong to
Holdings and Parent.

White & Case argues that the "settlement" is effectively a
disguised plan of reorganization for the Holdings Debtors
which does not afford creditors and parties in interest
the procedural safeguards required by the Chapter 11 plan
confirmation process.

The firm states that even if it is an enforceable
settlement, it still should not be approved as it provides
for the liquidation of essentially all estate assets
without providing any meaningful return or benefit to the
estates.


MIDCOM: Committee Objects to Foothill Payment
---------------------------------------------
The Unsecured Creditors' Committee of Midcom
Communications, Inc. filed an objection to the payment of
a $1,050,000 termination charge to Foothill Capital
Corporation from the WinStar Sale.

Foothill claims that it has the right to the termination
charge base upon certain language in the Loan and Security
Agreement between Foothill and the debtors.  The Committee
believes that the termination charge is not enforceable
under the bankruptcy code because the applicable provision
in the Loan Agreement does not attempt to provide a
measure of the damages, but merely exacts a penalty
against the debtors.

Furthermore the Committee argues that even if the
termination Charge is enforceable, Foothill waived any
right it may have had to collect a termination charge
because Foothill required the sale which terminated the
loan, and Foothill cannot legally receive a premium for
early termination of the loan where early termination
occurred as a result of Foothill's own actions.  Finally,
the Committee argues that payment of the termination
charge would be grossly inequitable to unsecured creditors
and would provide Foothill with a substantial
windfall, after having already been more than adequately
compensated by the debtors through the receipt of
substantial interest and substantial fees excluding the
termination charge.

The Committee asks that the court order Foothill to
disgorge the termination charge portion of the proceeds
plus any interest accrued during Foothill's retention of
the Funds.


MONTGOMERY WARD: Let's Compare Losses
-------------------------------------
Montgomery Ward reported a $1.17 billion loss as sales at
its stores plunged by double-digits in the last three
months of the year. The company's 1997 loss was nearly five
times the $237 million loss it posted in 1996, when it was
liquidating much of its inventory in an attempt to
reposition its apparel offerings.

The 1997 report, filed with the trustee in Ward's
bankruptcy reorganization, does not include results from
Signature Group, the direct marketing subsidiary that it
has expressed interest in selling. Signature's performance
will be detailed in the company's annual report to be filed
with the Securities and Exchange Commission later this
month.

About $200 million of expense cuts are planned this year,
including some staff reductions and possible store
closings. Of Ward's 300 stores, 206 stores finished 1997 in
the black. (Chicago Sun Times 02-Mar-1998)


PAN AM: May Stiff Miami
-----------------------
Miami-Dade County commissioners have learned they may
not collect on the  $5 million loaned to Pan American World
Airways to keep the air carrier's headquarters in Miami.
County attorney Robert Ginsburg is standing in line with
other creditors and convinced the only way taxpayers will
recoup the loan is if a bankruptcy court approves a
restructuring plan that would enable Pan Am to fly again.

Last year, Mayor Alex Penelas and the county commission
took the advice of the Beacon Council, Greater Miami's
economic and development organization, to make the loan to
ensure 600 jobs stayed in the county. Beacon Council
executive director Frank Nero now candidly admits he made a
mistake, saying the prospect of losing hundreds of jobs
blinded his judgment.

As painful as the bad loan may be, taxpayers are also stuck
with about $400,000 in outstanding debt on landing and
aircraft parking fees at Miami International Airport.

(UPI News 03/04/98 )


PAN AM: Reported Talks with Icahn
---------------------------------
Pan American Airways Corp. and Pan American World Airways
Inc. said their talks with a New York investment firm
stalled and the soonest the discount carriers could begin
flying again is the middle of this week. The carriers also
said New York financier Carl Icahn is one of several
potential investors with whom they're negotiating for the  
financing they need to resume operations. (Chicago Sun
Times 02-Mar-1998)


STRAWBERRIES: Seeks Extension of Exclusive Periods
--------------------------------------------------
Milford Resolution, Inc. (fka Strawberries Inc.) and
Strawberries Holding, Inc., debtors, seek entry of an
order extending the exclusive filing period for
approximately thirty days to and including April 13, 1998
and extending the exclusive solicitation period also for
approximately thirty days to and including June 11, 1998.

The debtors state that substantial progress has been made
in the case to warrant an extension of the exclusive
periods. The debtors are engaged in active negotiations
with the Unofficial Committee and Equitable over the
elements of the term sheet, and once agreed upon, the
debtors will need time to document and finalize a plan of
liquidation. The debtors believe that with the
finalization of the term sheet, the consensual plan
process will be concluded.


SUN JET: Ready to Fly Again
---------------------------
Sun Jet International Airlines received U.S. Bankruptcy
Court approval to resume flights. Debtor-in-possession
financing is being provided by Aviation Industries Corp.,
which must file a reorganization plan by March 20.

Clearwater-based Sun Jet is to recall about 60 employees
and restart charter service in as soon as 90 days. John
Mansour, the former Sun Jet CEO who will continue to run
the airline, said he hopes to be up to four aircraft and
150 employees in eight months.


TOSHOKU AMERICA: Committee Seeks Reorganization Officer
-------------------------------------------------------
The Official Committee of Unsecured Creditors of Toshoku
America Inc., is seeking an order approving Stewart J.
Kahn as reorganization officer and allowing the retention
of Kahn Consulting, Inc.  A hearing is set for March 13,
1998.

As reorganization officer, Kahn would work with and
supervise the accountants and personnel of the debtor in
developing and supplying information requested by the
Committee, monitoring and reporting to the Committee on the
operations and activities of the debtor, evaluating and
reporting to the committee on the internal controls of the
debtor and implementing changes, among other services.  
Kahn will also participate in the legal process in Japan.
Kahn will be paid at an hourly rate of $430.


VENTURE: Reclamation Claims Must Be Filed By March 23
-----------------------------------------------------
The debtor, Venture Stores Inc., is seeking approval of its
omnibus reclamation procedures.  If approved, vendors
asserting reclamation claims against Venture must take
action by March 23, 1998.

The debtor is seeking the entry of the order relating to
reclamation procedures in order to stabilize the debtor's
trade relations and to ensure the equitable and orderly
disposition of reclamation claims. To date,140 vendors
have sent notices of reclamation for goods received by the
debtor on credit, and two adversary proceedings have been
filed, with threats of more adversary proceedings.

Pursuant to the reclamation procedures the debtors are
seeking, and in addition to other provisions, one half of
the vendor's agreed reclamation claim will be paid in cash
and the other half will be allowed as an administrative
expense claim, and will be paid, in cash, upon the
effective date of the plan.


WESTERN PACIFIC: Who Walked Away With Money?
--------------------------------------------
Edward Beauvais, founder and former president, chief
executive and chairman certainly made money. He cashed in
all but about 300,000 of the 2.5 million shares of stock he
bought for $2,500 at WestPac's inception. He and his
holding company made nearly $6 million from the stock.

A $350,000 salary, earned after being removed as president
and CEO in 1996, added to the total. And Beauvais can claim
WestPac was long out of his hands when it went down.

Peiser found enough money to keep WestPac going, but the
investors pulled the plug before anyone knew for sure
whether WestPac would ultimately survive. In that way,
Peiser can prop up his reputation by pointing to Smith
Management as the reason for WestPac's failure.

He never cashed in his stock options, but did earn $25,000
per month salary and a $300,000 bonus when he started. He
never uprooted his family, which remained back home in
Detroit.

For WestPac shareholders, the ones who made money
timed their buys and sells just right to turn a quick
profit. Thousands of investors, many of them folks in
Colorado Springs rooting for the hometown airline, hold
stock certificates worth nothing.  The stock certificates
may someday be a collector's item.

The Hunts and Gaylords - millionaire families controlling
Hunt Petroleum of Texas and GFI Co., respectively -
together pumped somewhere around $45 million into WestPac
and never saw a return.  A few family members regained a
small amount of that by selling stock, but mostly after it
had dropped below $2 per share. It all might be a blow to
the collective egos of two otherwise very successful
companies.

Those who invested about $13 million in Beauvais before the
airline ever got off the ground - not including the Hunt
and Gaylord families - paid an average of $3 per share.
When WestPac went public in 1995, about 100 people -
including a who's who of Springs business folks - sold part
of their shares for about $19 each. Those cashing in
included Economic Development Corp. head Rocky Scott, real
estate agent Kay Deen Patterson, bookstore owners Dick
and Judy Noyes, and businessman Frank O'Donnell.
They'll tell their grandkids they were among a handful who
made money on WestPac.

Smith Management-The investment firm will keep some of the
money passengers paid to book WestPac flights. It also will
recoup some money from some of WestPac's jets - Smith has
the right to four of them and is fighting in court
for more - by subleasing them to other airlines.
That money won't come close to making up for the $24
million that Smith Management fed WestPac in December and
January, plus the roughly $5 million it will spend to shut
down the airline.

But Smith Management exists to invest in risky
ventures. Smith's investment in Hawaiian Airlines a few
years ago was a win, and its foray into WestPac was a loss.
The company is very private, so it's difficult to gauge how
this loss affects it. Most analysts say Smith Management
simply will lick its wounds and move on.

WestPac employees-They always seemed to be having a good
time, and most wouldn't trade the experience for anything.
If this had to happen, the timing isn't bad - Colorado
Springs employers are scrounging for help, and many have
called WestPac officials to set up group interviews.

The city of Colorado Springs and the Colorado Springs
Airport-The city is one of the few WestPac creditors owed
nothing. The city waived about $200,000 in overdue bills
and paid $115,000 in exchange for the temporary concourse
WestPac built in late 1996 for about $4 million.
WestPac also helped elevate Colorado Springs' national
profile and helped fuel a burgeoning economy.

However, trying to attract both tourists and new
businesses to the Springs is much more difficult without
strong air service (think Nike would seriously consider
Colorado Springs when executives would have to change
planes to get to their Portland base?) Boardings at the
airport in 1998 may be half what they were in 1996
(although still a 50 percent increase from 1994), and the
airport's take of concession sales dropped by
$225,000 in December as compared to December 1996.

There are those who believe Frontier is strengthened by
WestPac's demise, and can better challenge United.
Denver is owed - and won't get - about $7 million from
WestPac. Remaining airlines will once again be paying
among the highest fees in the country. (Gazette 03/01/98)


YAMAICHI SECURITIES: Atsuo Miki Questioned on Cover Up
------------------------------------------------------
The former president of collapsed brokerage giant Yamaichi
Securities Co. was questioned by prosecutors Wednesday on
suspicion he helped cover up some $2 billion in corporate
losses, Japanese media reports said.

Former Yamaichi president Atsuo Miki, 62, is suspected of
hiding the losses through an illegal practice known as
"tobashi," in which accounts that show losses are
transferred from one client to another to keep them from
showing up on financial statements, various reports said.

Yamaichi collapsed last November under the weight of the
losses Japan's biggest business failure ever. Yamaichi
Finance Co., an affiliate, filed for bankruptcy Monday.

Prosecutors raided the Yamaichi main office in Tokyo on
Wednesday, a company spokesman said. The homes of Miki and
former Yamaichi chairman Tsugio Yukihira, 66, were also
searched, NHK TV reported.

                      *********

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