TCR_Public/980423.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, April 23, 1998, Vol. 2, No. 80                    
                   
                    Headlines

ALLIANCE ENTERTAINMENT: DIP Pact Amendment Has Final Okay
ANVIL RANGE: Deloitte & Touche Appointed Interim Receiver
ARROW TRANSPORTATION: First Amended Plan of Reorganization
AUSTRALIS HOLDINGS: Collection Proceedings Suspended
CAMELOT MUSIC: Announces Proposed Public Offering            

HOMEPLACE STORES: Seeks Extension of Exclusivity
KIA MOTORS: President Speaks Out
LIBERTY'S HOUSE: Judge Rules Jurisdiction in Hawaii
MARVEL: Equity Announces New Plan
MEDLAB: Definitive Acquisition Agreement

MONTGOMERY WARD: To Assume Leases
ORANGE COUNTY: Merrill Lynch Seeks Sealed Transcripts
PAN AM: Banmiller to Step Down as CEO
PAN AM: NationsBank Seeks Relief from Stay
PETRIE RETAIL: Exclusivity Extended To May 15

QUADRAX CORP: Objection to Sale of Certain Tooling
ROASTERS CORP: Change of Venue Tiff
SEARCH FINANCIAL: Objects to Appointment of Trustee
ULTRAFEM: Securities Class Action Amended Complaint Filed
VITALE ENTERPRISES: Seeks Appointment of Logan & Company
          
                    *********


ALLIANCE ENTERTAINMENT: DIP Pact Amendment Has Final Okay
---------------------------------------------------------
Alliance Entertainment Corp. received final approval to
amend its $50 million debtor-in-possession financing
agreement with The Chase Manhattan Bank at a hearing held
yesterday.  The court granted interim approval of the
amendment, which reduces EBITDA requirements, over the
objection of the creditors' committee on April 1. (Federal
Filings Inc. 21-Apr-98)


ANVIL RANGE: Deloitte & Touche Appointed Interim Receiver                               
---------------------------------------------------------
Anvil Range Mining announces that the various creditors of
the Corporation requested the appointment by the Ontario
Court of an Interim Receiver to assume responsibility for
the affairs of the Corporation.  

The Court appointed Deloitte & Touche as Interim Receiver
of Anvil Range effective immediately.  Since January of
this year the Corporation has attempted, without success,
to develop a restructuring plan acceptable to all
stakeholders of the Corporation.  The transition to new
authority by the Interim Receiver over the Corporation's
affairs is expected to evolve over the next few days.  


ARROW TRANSPORTATION: First Amended Plan of Reorganization
----------------------------------------------------------
Arrow Transportation Co. of Delaware proposes a plan of
reorganization that provides for the complete liquidation
of Arrow's remaining assets and the distribution of the
proceeds of the liquidation to creditors.

The treatment of classes is provided in the plan.

Class 1. Holders of priority claims will be paid in full.

Class 2. The Claim of Congress Financial Corporation
Northwest was paid in full.

Class 3. The Allowed Secured Claim of Associates commercial
Corporation was satisfied by payment of $2.1 million to
associates under a stipulated order.

Class 4. The Allowed Secured Claim of Concord was fixed at
$385,000 by stipulated order and that amount was paid.  Any
deficiency claim shall be treated as a general unsecured
claim.

Class 5.  Part of the collateral securing the Class 5
Allowed Secured Claim of Mellon was sold to Matlack.  The
parties entered into a stipulated order valuing the mellon
collateral sold to Matlack at $1,128,450 and that amount
was paid to Mellon.  The remainder of Mellon's remaining
collateral was surrendered .  Any deficiency claim of
Mellon shall be treated as a general unsecured claim.

Class 6. The collateral securing the Class 6 allowed
secured claim of Mercedes Benz was surrendered.  Any
deficiency claim of Mercedes Benz shall be treated as a
general unsecured claim.

Class 7. The Class 7 Allowed secured claim of Deer Park, if
any, shall be paid in full in cash when it is allowed by an
order of the court.

Class 8.  The Class 8 allowed secured claim of Multnomah
County, if any, shall be paid in full in cash when it is
allowed by an order of the court.

Class 9. Louis and Karen Larsen shall have no right to
payment from the Continuing Estate until they exhaust their
remedies against Arrow's interest in Arrow's Pollution and
Remediation Legal Liability Policy issued by Reliance
National Indemnity Company. Any judgments unpaid after
application of insurance proceeds shall be treated as a
general unsecured claim.

Class 10. Unified Sewerage Agency of Washington County,
Oregon shall have no right to payment until it exhausts its
remedies against Arrow's interest in insurance liability
policy issued by Reliance National Indemnity Company.  Any
judgment remaining unpaid after application of insurance
proceeds shall be treated as a general unsecured claim.

Class 11. Claims of General Unsecured Creditors.  The
Continuing Estate shall make pro rata payments to Allowed
Claims in Class 11 from the proceeds of the liquidation of
assets and causes of action.   The first pro rata payment
shall be made on December 31, 1998 if an only if the
Trustee then has $400,000 in cash.  The final pro rata
payment will be made at the earlier of the liquidation of
the assets, resolution of contested claims or when directed
by the Continuing Committee.

Class 12.  Arrow Transportation Co. (Arrow's parent -
interests arising from its ownership of common stock)  
shall receive nothing.


AUSTRALIS HOLDINGS: Collection Proceedings Suspended
----------------------------------------------------
Australis Holdings Pty Ltd., News Corp.'s News Ltd. unit,
and certain movie studios have agreed to suspend collection
activity in the company's bankruptcy cases until May 6.  At
that time, Australis Holdings will either seek the parties'
consent to extend the moratorium or court approval for an
injunction preventing the parties from initiating
collection proceedings. (Federal Filings Inc. 21-Apr-98)


CAMELOT MUSIC: Announces Proposed Public Offering            
-------------------------------------------------
Camelot Music Holdings, Inc. announced that it intends to
file a registration statement on Form S-1 with the
Securities and Exchange Commission in connection with a
proposed initial public offering of its Common Stock.  The
offering will be made on a firm commitment basis through a
syndicate of underwriters.

Camelot anticipates that the offering will be made
principally by certain institutional stockholders of the
Company who received their shares of Common Stock in
connection with the Company's emergence from bankruptcy
protection on January 27, 1998.  Camelot plans to file its
registration statement in late May 1998, and it anticipates
that the offering will commence in July 1998.


HOMEPLACE STORES: Seeks Extension of Exclusivity
------------------------------------------------
HomePlace Holdings, Inc. and its affiliates, as debtors
seek an order granting an extension of exclusive periods to
file plans of reorganization and solicit acceptances
thereto.

The debtors seek an extension of the exclusive period
within which they may file a plan or plans  of
reorganization through and including September 8, 1998, and
an extension of the solicitation period through and
including November 9, 1998.

The debtors state that the initial 120 day period does not
afford the HomePlace Group a realistic opportunity to
stabilize its business, formulate a business plan, and
craft a feasible plan of reorganization.   The request for
the September 8, 1998 date coincides with the deadline to
assume or reject unexpired leases of nonresidential real
property.

The HomePlace Group states that it has been busy reviewing
the leases of the store locations, and identified ten
stores to initially close.  The debtors set up refinancing,
saving $350,000 in waived interest expense under the DIP 2
facility.  The HomePlace Group has a working capital
revolver of up to $130 million and subordinated debt
financing of $15 million.  The debtors state that
management has expended enormous time and effort responding
to administrative matters and emergencies incidental to a
case of this size and complexity.  The debtors received
approximately 100 reclamation claims with a gross claim
value of approximately $3.5 million.  The debtor has
retained bankruptcy counsel, local counsel and corporate
counsel.  In addition, the debtors retained turnaround
consultants and accounts and financial advisors.  An
official creditors' committee has been established and an
unofficial committee of equity security holders  was formed  
for the purpose of representing the interests of the
stockholders.


KIA MOTORS: President Speaks Out
--------------------------------
South Korean President Kim Dae-Jung said Wednesday  
that the fate of ailing Kia Motors Corp. would be decided
upon by "market forces."   "The government has no plan to
give favors to a certain company in handling Kia.  Its fate
will be decided upon publicly by market forces," Kim said
in talks with militant union leaders.

The president, however, stressed that Kia could not remain
as a public entity as demanded by its striking union
members, who downed tools last week to protest court-
managed receivership.  Kia officials interpreted Kim's
comment as clarifying the government's "no intervention"
policy, saying creditors would exercise full powers over
Kia.   "The president appears to be passing it to
creditors, who already clarified their objection to Kia's
sell-off and promised to help the company get back on its
feet," a Kia Motors spokesman told AFP.

But the Korea Development Institute (KDI) called for Kia's
public sale.  The KDI report followed a pledge Tuesday by
receivers that the embattled auto firm would not be handed
to a third party.  Workers eased their strike action
against a court decision last week to put  the company
under receivership, and returned to Kia's production lines
Tuesday.  But Kia's union has threatened to resume a full
walkout next week unless the government and creditors give
a firm commitment.

Militant union leaders Wednesday vowed to push ahead with
planned strikes, rejecting an offer by South Korean
President Kim Dae-Jung to solve disputes through dialogue.
"We will stage strikes in late May or in early June as
planned unless our demands are met," declared Lee Kap-Yong,
head of the Korean Confederation of  Trade Unions (KCTU).  
The KCTU demanded a review of a landmark layoffs accord
reached in January to help extricate South Korea from its
economic debacle. It has accused employers of abusing the
accord.

Lee also refused to take part in new negotiations with
employers and the government, which were proposed by the
president during earlier talks with KCTU leaders.
"We will continue to stay away from the second round of
tripartite negotiations," he said, urging the president to
work out concrete steps for job protection.

The KCTU head demanded the government first present
"concrete" steps to block employers from laying off
workers.  He also argued that the government failed to give
a firm commitment over a demand by Kia Motors Corp. workers
that the auto company be not handed to a third party.
(Agence France-Presse; 04/22/98)


LIBERTY'S HOUSE: Judge Rules Jurisdiction in Hawaii
---------------------------------------------------
U.S. District Court Judge William H. Yohn Jr. ruled that
because the case concerns the administration of the estate
of Liberty House, Hawaii's oldest and largest department
store, it "goes to the very heart of bankruptcy
jurisdiction."

Yohn said, "It would be extremely burdensome and
inefficient to both the court and the parties to litigate
these two actions on opposite ends of the United States.  
The debtor and most of its assets are much closer to the
Hawaiian venue."

Liberty House defaulted on a $173 million loan from Bank of
America early this year.  That prompted the bank to appoint
a new board to take control of the company, but the move
came after the original board of directors' request for
Chapter 11 protection.  The bank accused the directors of
filing bankruptcy merely to protect their jobs. (Legal
Communications, Ltd. 20-Apr-98)


MARVEL: Equity Announces New Plan
----------------------------------
The Official Equity Security Holders' Committee, announced
that a new proposal was submitted to the Trustee, John
Gibbons, which substantially improves the treatment of
Marvel's creditors and interest holders as compared to
their treatment under the Joint Plan proposed by Toy Biz
and Marvel's secured lenders.  The Equity Committee has
contended that value which should otherwise go to Marvel's
shareholders was being unfairly distributed to Toy Biz's
shareholders under the Toy Biz Plan.

Under the proposal submitted to Mr. Gibbons, High River  
Ltd. Partnership and Westgate International, L.P., entities
associated with Carl Icahn and Elliot Associates, offered
to purchase substantially all of Marvel's assets, excluding
Panini, a portion of certain litigation, and the
confectionery company for a purchase price of 475 million
dollars.  Gary Schildhorn, lead counsel for the Equity
Committee, estimates that this offer increases the return
to Marvel's Lenders from a range of $.62-$.68 on the  
dollar under the Toy Biz proposal to between $.72-$.78 on
the dollar. Accordingly, Mr. Schildhorn anticipates support
for the proposal, except from those secured debt holders
who have speculated in Toy Biz stock.  Marvel shareholders
will receive 7.5% of the new company, along with certain
warrants and a portion of the proceeds from a litigation
trust.

The new proposal is subject to higher and better bids and
is conditioned only on a judicial determination that Marvel
retains its corporate governance rights over Toy Biz.  This
issue is currently pending before the Third Circuit Court
of Appeals.  However, in the event that the condition is
not satisfied, the Icahn entities; Elliot Associates; and
the Equity Committee have agreed to support a modified Toy
Biz Plan which improves the treatment afforded to Marvel's
equity holders under the existing Plan.  The Equity
Committee is confident that the Trustee will promptly
pursue this new proposal as it materially benefits Marvel's
creditors and equity holders.


MEDLAB: Definitive Acquisition Agreement
----------------------------------------
Laboratory Corporation of America(R) Holdings announced
that it has entered into a definitive agreement with
Medlab, Inc. to acquire certain of  the assets of Medlab.  
Established in 1983, and based in Wilmington, Delaware,  
Medlab is the largest provider of clinical laboratory
testing services in Delaware with annual revenues in 1997
of approximately $20 million.  Terms of the definitive
agreement were not disclosed.

"The combination of LabCorp and Medlab will allow us to
greatly enhance our laboratory services in Delaware and is
directly in line with our strategy of adding volume to take
advantage of existing testing capacity while improving  
our operating and service levels in key markets," said
Thomas P. Mac Mahon, President and Chief Executive Officer
of LabCorp.

Medlab filed for Chapter 11 protection under U.S.
bankruptcy law in September 1997.  Consummation of the
transaction is subject to the approval of the U.S.
Bankruptcy Court in Wilmington, Delaware.

MONTGOMERY WARD: To Assume Leases
---------------------------------
Montgomery Ward Holding Corp., et al., debtors seek a court
order authorizing the assumption and assignment of
nonresidential real property leases in Plattsburgh, New
York; Ithaca, New York; Rome, New York; Waukegan, Illinois;
Dallas (Northtown), Texas; Nashua, New Hampshire; Altamonte
Springs, Florida; and Bedford, New Hampshire.

In the debtors' business judgment it is in the best
interests of the debtors' estates to assume and assign the
leases.  The stores on the properties have closed and the
debtors sold the right to make the decision regarding the
assumption and assignment or rejection to the purchaser,
Klaff Realty.


ORANGE COUNTY: Merrill Lynch Seeks Sealed Transcripts
-----------------------------------------------------
Merrill Lynch and Co. Inc. argued Tuesday that a California
appeals court should overrule a lower court's order and
keep grand jury transcripts related to the 1994 Orange
County bankruptcy under wraps.  Robert Morvillo, a lawyer
for the Wall Street brokerage giant, argued before a three-
judge panel of the California Court of Appeals, 4th
District, that a California Superior Court judge erred last
year when he ordered the grand jury transcripts to be
released to the public.

Morvillo said that by making the thousands of pages of
documents public, the court would be ignoring hundreds of
years of common law tradition and would also be violating
state statutes governing the secrecy of grand juries.
"Secrecy has been the hallmark of the grand jury since at
least the 1600s ... and is an integral part of that
institution," Morvillo told the panel.  Morvillo also
argued that California law stated that if a grand jury did  
not indict anyone, its transcripts must be kept
confidential.  But Morvillo's arguments were repeatedly
interrupted by two of the three judges, who questioned his
assertion that specific state laws prevented a local
judge from unsealing the papers.  The judges also
challenged his assertion that the grand jury transcripts  
were not related to the root cause of the bankruptcy.

Kelli Sager, a lawyer representing the media, told the
court Tuesday that the public had a compelling right to
know what went on in the grand jury proceedings.  Sager
argued that it was highly unusual for a grand jury
investigation to be aborted and for the district attorney
to cut a deal with Merrill Lynch that gave his office $3
million, or 10 percent of the total settlement. She said
the public might be able to see evidence of possible foul
play if the transcripts were released. (Reuters: Financial
- 04/22/98)


PAN AM: Banmiller to Step Down as CEO
-------------------------------------
David A. Banmiller, president and CEO of Pan American World
Airways, announced today that he will step down from  
his positions on April 30.

Robert Mencel, a 20-year veteran of airline flight
operations, will become general manager and assume all
responsibilities for the day-to-day activities of the
carrier.

Pan Am is currently operating two owned Boeing 727-200's
for charter flying with 173 seats per aircraft. The airline
intends to enter sale/lease back arrangements on these
aircraft to generate cash to retire part of the debt
owed to NationsBank, Pan Am's largest secured creditor. It
is anticipated that additional aircraft will be acquired
through leasing as Pan Am grows its charter operations. The
airline noted that there is excellent demand for its  
charter services.

Mencel will manage a staff of approximately 125 employees,
including flight crew members, who will oversee Pan Am's
charter operations from the airline's Fort Lauderdale
maintenance base.


PAN AM: NationsBank Seeks Relief from Stay
------------------------------------------
On February 26, 1998, NationsBank was owed approximately
$25.7 million.  A substantial amount of the debtors assets
that are collateral for NationsBank's claims are unrelated
to the debtors' charter of 727-200 aircraft.

The Bank now want to obtain and dispose of the debtor's
"Excess Assets."  The Bank states that the debtors have no
equity in the assets and they are not necessary to an
effective reorganization.

The "Excess Assets include 8.64 acres of mortgaged
property, the common stock of Pan American Airbridge
Holdings, a share certificate, spare part, engine parts and
excess furniture and equipment.


PETRIE RETAIL: Exclusivity Extended To May 15
---------------------------------------------
The court extended Petrie's exclusive periods for filing a
reorganization plan and soliciting plan acceptances to May
15 and July 15, respectively.  Petrie said it needed the
extension as a precautionary measure in case the apparel
retailer, official committee of unsecured creditors, and
majority shareholder Warburg Pincus Ventures L.P. need more
time to finalize negotiations regarding their joint plan.
(Federal Filings Inc. 21-Apr-98)


QUADRAX CORP: Objection to Sale of Certain Tooling
--------------------------------------------------
Michael E. Buck, David B. Park, Gerard J. McDonald, Stephen
St. Louis and Noel Tessier, general unsecured wage claim
creditors (wage creditors) object to the proposed sale of a
dye stamping tool used in the production of spokes and
reinforcement to Spinergy Inc.

The wage creditrors believe that Spinergy would be willing
to resume a vendor/customer relationship assuming that the
wage creditors had the Tooling and were back in business.

The wage creditors state that if Spinergy is seeking to
purchase the Tooling from the debtor, its only purpose in
doing so is to make arrangements to obtain thermoplastic
and thermoset composite products independently of the
debtor.  The wage creditors agree with the debtor that it
would be in the best interests of the debtor's estate to
sell the assets used in the debtor's thermoplastic and
thermoset composite business. The wage creditors believe,
however, that the greatest benefit to the debtor's estate
will result from the sale of the assets as part of the
ongoing business of the debtor.

The wage creditors themselves have made an offer to debtor
to purchase the debtor's thermoplastic and thermoset
composite business, including most of the equipment, the
customer lists and other important assets.  The wage
creditors state that the debtor and debtor's counsel
suggest that the wage creditors operating the business
might "chill" other bidders.  However, the wage creditors
believe that operating the business they will increase the
interest in bidding because it will be a going concern.
However, the sale of the Tooling would lower the bid of the
wage creditors.


ROASTERS CORP: Change of Venue Tiff
-----------------------------------
Roasters Corporation, debtor, files an objection to the
motion for change of venue filed by K.C.M. Enterprises,
Inc., and others.  The debtor states that its principal
place of business is its principal office that is currently
located in Chapel Hill North Carolina.  Otherwise, the
debtor is a pure franchiser.

The debtor states that the "convenience of the parties:
will be served by retaining this case in North Carolina
rather than Florida, since North Carolina is convenient to
the vast majority of the creditors and the debtor's
management.


SEARCH FINANCIAL: Objects to Appointment of Trustee
---------------------------------------------------
The debtor, Search Financial Services Inc., and its
affiliates, state that there is no evidence of gross
management of this case that would justify appointment of a
trustee.

The debtor states that the current management came in after
the problems arose that led to this bankruptcy.  The debtor
points out that the appointment of a Chapter 11 trustee in
this case will constitute an event of default under the
Hibernia loan documents and it could be loss of that
financing for the consumer finance operations.  According
to the debtor probably the single most important factor for
the debtors' prospects of recovery is to continue financing
for the consumer finance business.

Furthermore, the debtor states that the status of Hall
Phoenix/Inwood, Ltd., the entity that filed the motion to
appoint a Chapter 11 Trustee, as a creditor is tenuous.


ULTRAFEM: Securities Class Action Amended Complaint Filed
---------------------------------------------------------
An amended complaint was filed in the shareholder
securities class action lawsuit previously filed on March
18, 1998 against Ultrafem and certain of its officers and
directors on behalf of the Company's common stockholders.
The First Amended Complaint adds as defendants Jeffries &
Co. and Hampshire Securities Corp., co-lead underwriters of
Ultrafem's secondary offering of November 12, 1996 wherein
the Company raised approximately $40 million from
plaintiffs and members of the class.  The Amended Complaint
is brought on behalf of purchasers of the common stock of
Ultrafem who bought stock pursuant to or traceable to the
Company's November 12, 1996 public offering of 2 million
shares of Ultrafem common stock at $20.00 per share or in
the open market from  November 12, 1996 to February 19,
1998.

The Amended Complaint charges that the defendants engaged
in a common plan and scheme to defraud by violating the
federal securities laws (Sections 11, 12 and 15 of the
Exchange Act of 1933 and Sections 10 and 20(a) of the
Securities  Exchange Act of 1934) and the common law by
engaging in a common scheme and plan to defraud plaintiffs
and members of the class similarly situated by stating
facts about its product INSTEAD that were not true
and by representing that the Company had sufficient working
capital with the approximate $36 million from the November
1996 offering plus $16.6 million left over from the
Company's initial public offering in February 1996, to last
for 12 months, i.e., until November 1997, when in fact the
Company was running out of cash by June 1997; that the
Company had "commitments" for sales from leading retail
chains and mass market retailers; that the Company could go
back to the investing public or the private sector for
additional financing if necessary; and that the Company and
its products had a healthy, glowing, and rosy future.


VITALE ENTERPRISES: Seeks Appointment of Logan & Company
--------------------------------------------------------
Vitale Enterprises, Inc. et al., debtors, are seeking
approval of the debtors' agreement with Logan & Company,
Inc., as Claims Agent and appointing Logan as agent of the
bankruptcy court.

Logan & Company would transmit, receive, docket, maintain,
photocopy and microfilm claims and process other
administrative information.

                    *********

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