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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, May 7, 1998, Vol. 2, No. 91                  

                  Headlines

APS HOLDING: Sees Need to Amend DIP Pact
ATLAS ENVIRONMENTAL: WasteMasters Acquires Interest
BARRY'S JEWELERS: Hearing on Disclosure Statement Set
BARRY'S JEWELERS: Plan Funded With $50M From Foothill
BOYDS WHEELS: Order Fixes July 3, 1998 as Bar Date

BUSTER BROWN: Has Okay For BNY Exit Facility Deposit
CROWN BOOKS: Accountants Question Viability
DATA 1 INC: Seeks Approval of Compromise with Digital
DOW CORNING: Income Rises 2 Percent
DYNASTY INC: Las Vegas Property Sold for $46 Million

FIRST ENTERPRISE: U.S. Trustee Seeks to Convert or Dismiss
FRETTER INC: Court Grants Motion for Global Settlement
GULF RESOURCES: Hearing to Convert Cases to Chapter 7
HOMEOWNERS MORTGAGE: Files for Chapter 11 Protection
JOSE HESS: Case Summary & 20 Largest Creditors

MIDCON OFFSHORE: Limited Objection to Disclosure Statement
PAN AM: Judge Orders Financial Data to Wexford
PARAGON TRADE: K-C Objects to Exclusivity Extension
QUADRAX CORPORATION: Judge Approves Sale of Tooling
QUADRAX CORPORATION: Stipulation Regarding Stay Motion

SEARCH FINANCIAL: Responds to Request to Abolish Committee
VENTURE STORES: Kimco Details Leasing Agreement with Kmart
WESTERN PACIFIC: Committee Wants To Pursue Smith Management

                  *********

APS HOLDING: Sees Need to Amend DIP Pact
----------------------------------------
Absent a change in the current operating environment, APS
Holding Corp. may need to amend its $100 million
debtor-in-possession credit agreement in the second or
third quarter of fiscal 1999 (ends Jan. 30) to avoid
default.  "While the Company has been in compliance with
its covenants through March 1998, it is likely that
continuation of unfavorable operating conditions may
require the Company to seek modification of its
current bank covenants during the second or third quarter
of the current fiscal year," the auto parts distributor
warned. (Federal Filings, Inc. 06-May-98)


ATLAS ENVIRONMENTAL: WasteMasters Acquires Interest
---------------------------------------------------
WasteMasters, Inc. announced that it has acquired the
controlling interest in Atlas Environmental, Inc. voting
common stock from a group of Atlas shareholders in exchange
for 342,591 shares of WasteMasters common stock valued
at $3.00 per share.  In connection with the transaction,
four (4) additional members designated by WasteMasters were
added to the Atlas board of directors giving WasteMasters
control of the board.  

Atlas is believed to be the largest construction and
demolition debris recycler and the largest remediator of  
petroleum-contaminated soils in the State of Florida.
Atlas, which, among other  holdings, owns four recycling
facilities and a construction and demolition debris
landfill, generated revenues in 1997 in excess of $16
million.

R. Dale Sterritt, Jr., Chairman, President and Chief
Executive Officer of WasteMasters, stated: "I look for
undervalued assets.  On those rare occasions when an
opportunity arises to acquire high quality assets at
bargain basement prices, I don't hesitate."

Atlas President, T. Alec Rigby, stated: "In January 1997
Atlas and eleven of its subsidiaries filed petitions
seeking reorganization under Chapter 11 of the Federal
Bankruptcy Code.  Our reorganization has now taken a giant
step forward."


BARRY'S JEWELERS: Hearing on Disclosure Statement Set
-----------------------------------------------------
On June 3, 1998, Judge Vincent P. Zurzolo will hold a
hearing on the motion for an order authorizing and
approving the adequacy of disclosure with respect to the
original plan and disclosure statement, dated April 30,
1998 proposed by Barry's Jewelers, Inc.


BARRY'S JEWELERS: Plan Funded With $50M From Foothill
-----------------------------------------------------
In connection with its recently filed plan of
reorganization, Barry's executed a financing commitment
letter with Foothill Capital Corp. for a $50 million credit
facility and paid a non-refundable commitment fee of
$75,000.  Reorganized Barry's would have the one-time
option to reduce the $50 million maximum credit
line to no less that $25 million upon the sale of its
entire accounts receivable portfolio.  Funds for the plan
would also come from cash on hand and a $15 million equity
infusion from bondholders.  DDJ Capital Management L.L.C.
and Mitchell Hutchins Asset Management Inc. (and/or funds
they manage) have agreed to contribute $15 million minus
any amount contributed by other bondholders. (Federal
Filings, Inc. 06-May-98)


BOYDS WHEELS: Order Fixes July 3, 1998 as Bar Date
--------------------------------------------------
In the case of Boyds Wheels Inc., the court has entered an
order fixing July 3, 1998 as the last date for filing
proofs of claim.


BUSTER BROWN: Has Okay For BNY Exit Facility Deposit
----------------------------------------------------
Buster Brown Apparel Inc. received court approval last week
to enter into a proposed exit financing facility with
BNY Financial Corp. and pay the lender a $50,000 due
diligence deposit.  Foothill Capital Corp., Buster Brown's
debtor-in-possession lender, withdrew its objection to the
company's request after BNY confidentially disclosed the
proposed facility's terms, which were initially filed under
seal. (Federal Filings, Inc. 06-May-98)


CROWN BOOKS: Accountants Question Viability
-------------------------------------------
The Wall Street Journal reported on May 5, 1998 that Crown
Books Corp.'s accountants raised questions about the
company's ability to continue as s going concern in a
filing with the SEC.

The company, majority-owned by Dart Group Corp. said that
it is negotiating with its principal vendor to reschedule
payments, and it is negotiating with lenders to increase
the amount of money it can borrow.


DATA 1 INC: Settlement Agreement Between TBF and Digital
--------------------------------------------------------
Tampa Bay Financial Inc., (TBF) a large stockholder of the
debtor is seeking an order approving a compromise of
controversy with Digital Equipment Corporation.

Digital filed an unsecured claim against the debtor in the
amount of $4,828,974.  TBF executed a guaranty of the
debtor's obligations to Digital, limited to $1 million.  In
return, the debtor agreed to indemnify TBF for any amounts
that TBF was required to pay to Digital.

Pursuant to the terms of the agreement, TBF and Mr. Smith
will be liable, jointly and severally to pay to Digital the
sum of $728,329 on an agreed-to schedule. TBF states that
it understands that the debtor is also preparing a motion
to approve this settlement Agreement and for authority to
perform its obligations under the Settlement Agreement.

A hearing will be held on this matter on May 26, 1998.


DOW CORNING: Income Rises 2 Percent
-----------------------------------
Dow Corning Corp. has posted a 2.8 percent increase in net,
first-quarter income to $54.9 million, compared with $53.4  
million in the same period last year.  The company also
reports today a 2.6 percent increase in quarterly sales, to
$649.1 million.  The latest financial report says Dow
Corning's reserves for settling breast-implant litigation
now top $2.4 billion.

In the past quarter, Dow Corning says operating profits
slipped due to higher costs and the negative effect of
currency exchange rates.   Dow Corning is equally owned by
Dow Chemical Co. and Corning Inc. (UPI: Financial-
05/05/98)


DYNASTY INC: Las Vegas Property Sold for $46.5 Million
------------------------------------------------------
Goldrush Casino & Mining Corporation is pleased to announce
that F.G. 7-11, LLP(formerly known as Jockey Games, LLC and
Fun N Games, LLC) has exercised its option to purchase the
Company's Dynasty, Inc., Las Vegas property for US
$46,500,000.  The transaction was completed on May 5, 1998
and has received all necessary approvals.

FG received a reduction in the purchase price of US
$250,000 by exercising its option within 90 days of the
Dynasty Bankruptcy plan confirmation date.  FG also
received 100,000 options to acquire common shares of the
Company at US $1.00.

The sales proceeds from the transaction will be used to
retire the debt of the Company and to move the Company
forward into an operating mode.  The proceeds will be held
at Bank of America by an Accomodator. This allows the
Company to qualify for a 1031 tax exchange at its election.  
The Company will announce its intentions in this regard
within the 45-day identifying period detailed by the IRS
code.  The closing of the FG and Dynasty transaction and
upcoming payment of creditors constitutes the effectuation
of Dynasty's plan of confirmation as was submitted to and
approved by the United States Bankruptcy Court. Dynasty  
anticipates it will shortly file for voluntary emergence
from Chapter 11 and  estimates that the procedural aspects
of the exiting process may take up to 60 days for
dismissal.


FIRST ENTERPRISE: U.S. Trustee Seeks to Convert or Dismiss
----------------------------------------------------------
M. Scott Michel the United States Trustee is seeking an
order converting the Chapter 11 case of First Enterprise
Financial Group, Inc. and First Enterprise Acceptance
Company, debtors, to cases under Chapter 7 of the Code or
in the alternative, dismissing these cases.

The U.S. Trustee states that the automatic stay with
respect to all of the debtors' property was modified; and
the therefore the debtors currently have no assets with
which to operate their business, and there is no reasonable
likelihood of reorganization in these cases.


FRETTER INC: Court Grants Motion for Global Settlement
------------------------------------------------------
Over the objection of the United States Trustee, (the
objection was overruled) Judge Pat E. Morgenstern-Clarren
entered an order on April 22, 1998 approving the Global
Settlement of Fretter, Inc.


GULF RESOURCES: Hearing to Convert Cases to Chapter 7
-----------------------------------------------------
A hearing has been scheduled on the U.S. Trustee's motion
to convert cases of Gulf Resources Corporation, Mustang Oil
& Gas Corporation, debtors, to Chapter 7 on May 18, 1998.

The Chapter 11 Trustee, Charles E. Bearden filed a motion
seeking a continuance of the hearing to a date after June
14, 1998.  On April 30, 1998 Charles E. Bearden filed a
notice of filing of motion to abandon property of the
debtor's estate.  The Trustee seeks to abandon all oil and
gas properties subject to the liens of Energy Income Fund
LP.


HOMEOWNERS MORTGAGE: Files for Chapter 11 Protection
----------------------------------------------------
HomeCapital Investment Corporation said today that
its operating subsidiary, HomeOwners Mortgage & Equity
Inc., has filed for reorganization under Chapter 11 of the
Bankruptcy Code on Monday, May 4, 1998.  Under the
protection of bankruptcy court, HOME will seek to develop a
plan of reorganization and meanwhile protect the assets of
HOME in the best interests of its creditors and Company
stockholders.

E. Jeff Bomer, Chairman of the Board of HOME, in announcing
these developments stated that, "Since Fannie Mae sought to
terminate HOME's Seller/Servicer Contract on March 24,
1998, the Company has been pursuing alternative financing
sources and means of restoring HOME's lending activities.
The decision to seek reorganization for HOME was
precipitated by our desire to preserve its enterprise value
while developing a business strategy.  If we are unable to
implement a plan for continuing operations, then we will
seek an orderly liquidation of HOME."


JOSE HESS: Case Summary & 20 Largest Creditors
--------------------------------------------------
Debtor:  Jose Hess, Inc.
         500 Greenwich Street
         New York, NY 10013
         
Type of business: Manufacturer and distribution of high-end
gold and gold and diamond jewelry.

Court: Southern District of New York

Case No.: 98-43216    Filed: 05/05/98    Chapter: 11

Debtor's Counsel: Scott S. Markowitz
                  Todtman, Nachamie, Spizz &
                  Johns, P.C.
                  425 Park Avenue
                  New York, NY 10022
                  (212) 754-9400

Total Assets:            $3,359,000
Total Liabilities:       $7,648,000

20 Largest Unsecured Creditors:

   Name                          Nature       Amount
   ----                          ------       ------Diagem,
Inc.                     Trade     $1,086,000
Star Diamond Trading Co., Inc.   Trade       $866,753
Quantum Diamonds, Inc.           Trade       $282,700
Michael Bitton Company           Trade       $255,000
Facetone Trading Co.             Trade       $179,571
M. Fabrikant & Sons, Inc.        Trade       $149,763
Fullcut Manufacturers, Inc.      Trade       $121,258
Bharat Diamond Corporation       Trade       $121,258
GR Fancies                       Trade       $120,880
S. Bellara Diamonds, Inc.        Trade       $120,045
Eurostar Belgium, Inc.           Trade       $113,502
Gallit Diamonds, Inc.            Trade        $97,683
Ginsberg, Kaufman & Trister      Trade        $69,129
Gemdek Corporation               Trade        $73,893
Devi Diam                        Trade        $67,250
Antwerp Sales International      Trade        $38,467
NY Star Diamond Inc.             Trade        $38,698
Rathe Productions Inc.           Trade        $38,022
T. Gluck & Co., Inc.             Trade        $34,440
All Cut Diamond                  Trade        $34,590


MIDCON OFFSHORE: Limited Objection to Disclosure Statement
----------------------------------------------------------
Forcenergy Inc. filed a limited objection to the Disclosure
Statement of Midcon Offshore, Inc., debtor.  Forcenergy
Inc., a creditor of the debtor, submits that the Disclosure
statement is inadequate because it fails to provide for
Forcenergy's secured claim.  Forcenergy filed a proof of
claim for a secured claim totaling $1,911,000 and an
unsecured claim totaling $290,633.  Forcenergy also states
that the Disclosure Statement fails to define the phrases
"Mineral Lien Claimants" and "Mineral Liens."  


PAN AM: Judge Orders Financial Data to Wexford
----------------------------------------------
U.S. Bankruptcy Judge A Jay Cristol ordered Pan Am's
managers to give Wexford's lawyers financial data and said
he was duty bound to consider any higher offer. But
Cristol, who urged Guilford and Pan Am's creditors to work
quickly to complete a deal and get the airline out of
bankruptcy court before July, said he was deeply skeptical
a deal with better terms than Guilford's would appear.

Besides giving tentative approval to a letter of intent
from Guilford to buy Pan Am, he authorized the immediate
injection of $2 million by Guilford into Pan Am. (Reuters:
Financial - 05/06/98)


PARAGON TRADE: K-C Objects to Exclusivity Extension
---------------------------------------------------
Kimberly-Clark Corporation (K-C) filed an objection to the
motion of Paragon Trade Brands, Inc. for an order extending
the exclusive period to file a plan of reorganization and
to solicit acceptances.  As its objection, KC states that
the debtor has always represented that it is party to a
Conversion Agreement with Procter & Gamble Company which
requires the debtor to have an alternative design for its
product on or before July 6, 1998.  Given that
representation, K-C states that 120 days is unreasonable,
because in no more than 60 days, debtor should be in a
position to advise the court concerning its alternate
design efforts and, if appropriate, to request an
additional extension of exclusivity.

K-C also claims that the debtor represented it anticipates
completion of its business plan by the end of April 1998
and the extensions now sought are unreasonably long.

K-C believes that K-C's damages in excess of $100 million
are continuing as an administrative claim at the rate of $2
million per month.  K-C is concerned that the continued
operation of debtor will not result in a plan that will
enable the debtor to pay its debts in full.

K-C does believe that this is a complex case, as opposed to
Procter & Gamble Company, which stated in its objection to
the extension of exclusivity that this is a single issue,
uncomplicated case.  However, K-C states that this case is
different than other complex cases because the debtor has
admitted its need to formulate its strategy and begin
implementation of that strategy by July 6, 1998. A bar date
of June 5, 1998 has already been set in this case.


QUADRAX CORPORATION: Judge Approves Sale of Tooling
---------------------------------------------------
In the case of Quadrax Corporation, debtor, Judge Arthur N.
Votolato, Jr. denied the objection of Messrs. Buck, Park,
McDonald, St. Louis and Tessier, and granted and approved
the sale by Quadrax Corporation of certain tooling to
Spinergy, Inc.


QUADRAX CORPORATION: Stipulation Regarding Stay Motion
------------------------------------------------------
Upon the motion for relief from the automatic stay filed by
LaSalle National Bank, as Trustee for Structured Asset
Securities Corporation Multi-class Pass Through
Certificates Series 1994-C1 Trust, and the Objection
thereto of the debtor and Power Stick Manufacturing and
Advanced Pultrusion Technologies, Ltd., it is stipulated
that the debtor shall be permitted to remain on the
premises at 300 High Pint, Portsmouth, Rhode Island through
and including August 2, 1998.  A post-petition
administrative claim shall accrue for the benefit of
LaSalle at the monthly rate of $8,700.


SEARCH FINANCIAL: Responds to Request to Abolish Committee
----------------------------------------------------------
Search Financial Services Acceptance Corp., and its
affiliates, as debtors file a response to the motion
requesting the court to direct appointment of an Unsecured
Creditors' Committee and to abolish the Equity Security
Holders' Committee.

The debtors state that there has been little interest by
unsecured creditors in serving on a committee of unsecured
creditors.  The debtor states that what has been made clear
is the debtors' intention to subordinate Hall's claim.  The
debtor states that Hall fails to point out in the motion
that Craig Hall is a former director and equity holder of
SFSI.  In addition to being subordinated to the claims of
Fleet and Hibernia, the debtors expect that Hall's claim
may be re-characterized as equity under principles of
Section 510 equitable subordination.

The debtors also point out that Shareholders put on the
Equity Committee are also potentially some of the largest
unsecured creditors; preferred shareholders for missed
dividends and warrant holders for the $.25 call option have
argued that they are unsecured creditors.  The debtors
state that, "Ironically after Fleet and Hibernia, the
largest unsecured creditors, Hall and the members of the
Equity Committee all have claims arising from their equity
interests.

The debtors state that equity holders have been well
represented and they claim that Hall has objected to nearly
every action taken by the debtors, and the debtors ask the
court to enter an order denying the instant motion.


VENTURE STORES: Kimco Details Leasing Agreement with Kmart
----------------------------------------------------------
Kimco Realty Corp. announced that it reached an agreement
with Kmart Corp. whereby this national retailer will lease
49 locations currently leased to Venture Stores Inc.  Kimco
said it is negotiating with other major retailers to
enter into leases for the remaining 40 Venture locations it
agreed to purchase.

On April 27, 1998, Kimco announced an agreement with
Venture Stores to purchase Venture's leasehold position at
89 locations, including 56 properties pursuant to two
unitary leases currently in place with Kimco, 30 properties  
pursuant to a master lease with Metropolitan Life Insurance
Co. and three properties leased by Venture from others.  At
the same time, Kimco said it also entered into an agreement
with Metropolitan Life to purchase the 30 fee and leasehold
positions of the properties that Metropolitan Life
currently leases to Venture.

These transactions are contingent upon bankruptcy court
approval of the purchase by Kimco of Venture's leasehold
positions.


WESTERN PACIFIC: Committee Wants To Pursue Smith Management
-----------------------------------------------------------
The Official Committee of Unsecured Creditors Of Western
Pacific Airlines, Inc. is seeking court authority to
commence a detailed inquiry, analysis and pursuit of claims
and causes of action against Smith Management Company and
the related debtor and DIP lenders.

The Committee believes that there is a good faith and
colorable basis to pursue such claims.  The Committee
claims that Smith contends that the DIP Lenders refused to
continue funding on the grounds that there was a material
adverse change from the debtor's proposed budget. However,
no budget was ever approved or finalized by Smith.  The
Committees states that during the debtor's last 2 weeks of
operations, its daily bookings were rising dramatically,
and the Committee believes that there was no material
adverse change upon which the DIP Lenders could cease their
funding obligations.  The Committee also believes that an
action against the DIP Lenders will provide significant
benefit to the estate.

                  *********

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