TCR_Public/980508.MBX T R O U B L E D   C O M P A N Y   R E P O R T E R
     Friday, May 8, 1998, Vol. 2, No. 92                  


2CONNECT EXPRESS: Merger Agreement with Bobby Allison
AR ACCESSORIES: Wallet Works Acquired by Wilsons
ALLIANCE ENTERTAINMENT: Exclusivity Extended Through May 20
BANK OF AMERICA: US Supreme Court to Hear Ownership Issue
CGE FORD: Filed Liquidating Reorganization Plan

GAYLORD COMPANIES: United Magazine Company Plan
GAYLORD COMPANIES: Bookstore Debtors' Second Amended Plan
GREATE BAY HOTEL: Bank Trustee Objects to Tax Counsel
HAGERSTOWN FIBER: SBCCS Seeks Relief from Automatic Stay

HALLA GROUP: Mando Machinery Workers Go on Strike
KIA MOTORS: Ford May Increase Its Stake
KIWI INTERNATIONAL: Four Companies in Talks to Acquire Kiwi
MANHATTAN BAGEL: Seeks Rejection of Six Leases
NAL-FINANCIAL: Interim Agreement with Trusts Gets Approval

PAN AM: Until May 20 to Complete Deal with Guilford
PEGASUS GOLD: Proposed Order Approving Severance Program
SAMSUNG GROUP: To Reduce Core Businesses
VENTURE STORES: Hilco/Great American Won Auction

DLS CAPITAL PARTNERS: Bond Pricing for Week of May 4, 1998


2CONNECT EXPRESS: Merger Agreement with Bobby Allison
2Connect Express, Inc. announced that it has executed a
Merger Agreement with Bobby Allison Cellular Systems of
Florida, Inc., whereby Bobby Allison will merge with and
into a newly formed subsidiary of 2Connect after 2Connect  
emerges from bankruptcy. 2Connect has liquidated all  
excess inventory, fixtures and equipment, reduced its
overhead to skeleton  levels, and filed a Plan of
Reorganization and Disclosure Statement with the court,
preparatory to the aforementioned merger.

The merger is dependent on, among other things,
confirmation by the court of the Plan of Reorganization and
the execution of a letter of intent for additional
financing. Upon completion of additional financing, for
which there are no current commitments or indications of
interest, it is anticipated that 20% of the combined entity
will be owned by current shareholders of 2Connect, 35% by
principals of Bobby Allison and 45% by new investors, some
of which may  also be existing shareholders.

AR ACCESSORIES: Wallet Works Acquired by Wilsons
Wilsons The Leather Experts Inc. the leading specialty
retailer of leather apparel and accessories, announced they
were the successful bidder for the inventory and store
fixtures of 40 retail stores located in 22 states and the
trademarks of the Wallet Works(TM), Inc. at a bankruptcy
auction sale held in Milwaukee.  The purchase price of $5.2
million included substantially all the assets of Wallet
Works, Inc. including inventory. The sale was approved by
the United States Bankruptcy Court for the Eastern District
of Wisconsin and is expected to close early next week.

The sale of assets was undertaken with the approval of all
creditors to maintain the underlying business while
maximizing the repayment to creditors.

ALLIANCE ENTERTAINMENT: Exclusivity Extended Through May 20
The court yesterday extended Alliance Entertainment Corp's
exclusive periods to file a reorganization plan and solicit
plan acceptances through May 20 and July 20, respectively.  
Meanwhile, the company is still in talks with potential
purchasers of Concord Records Inc. and expects to present a
stalking horse bid for the unit in two to three weeks.
(Federal Filings Inc. 7-May-1998)

BANK OF AMERICA: US Supreme Court to Hear Ownership Issue
The U.S. Supreme Court will resolve a long-standing dispute
over the rights of bankrupt debtors to retain ownership of
their reorganized company even though creditors haven't
been fully paid off.   Heeding calls from insurers, bankers
and others, the high court agreed Monday to hear an appeal
of a lower court decision that gave shareholders the  
exclusive right to purchase equity in the reorganized
companies. Courts around the country have been split for
years over the exclusivity issue, which arises most
frequently with failed real estate ventures.

Bankers and insurers want the high court to award ownership
of bankrupt companies to unpaid creditors and let them
decide whether to sell to the former owners. Lenders argue
that, by giving exclusive purchasing rights to
shareholders, courts often allow them to pay less for it
than a company is worth.

The so-called new-value exception is designed to encourage
new investments that will improve the chances the company
will be able to pay off its debts under a bankruptcy
reorganization  plan.   The high court now will decide
whether to endorse strict adherence to the absolute
priority rule, allow the exception for new investments, or
stake out a middle ground -- possibly allowing shareholders
to purchase their stake through a competitive bidding

In the instant case the Chicago-based Seventh Circuit U.S.
Court of Appeals invoked the new-value exception in a
dispute involving a BankAmerica subsidiary, Bank of America
National Trust and Savings Association. The bank sought to
recover $93 million owed on a loan it made to a Chicago
real estate venture called 203 North LaSalle Street
Partnership, which was facing Chapter 11 bankruptcy

The plan gave the bank about $60 million of the debt. The
reorganization allowed the owners of the company to retain
their stakes -- and ownership of the building -- if they
paid the  equivalent of $4.1 million into the business. A
federal trial judge upheld the plan over the bank's
objections.   A divided panel of the Seventh Circuit, which
affirmed the ruling, said the U.S. bankruptcy code, though
unclear, suggests the new-value exception applies.  The
court added that the capital infusion "may enhance the
value of the business after reorganization."

The owners of the Chicago partnership, said the new-value
rule will apply only in rare cases because a series of tax
and bankruptcy law changes have reduced the incentives for
owners of real-estate ventures to resist foreclosure.  The
case is Bank of America National Trust and Savings
Association v. 203 North LaSalle Street Partnership, 97-
1418. (Journal Record - 05/05/98)

CGE FORD: Filed Liquidating Reorganization Plan
CGE Ford Heights LLC filed a liquidating reorganization
plan on May 4 that allows the indenture trustee for the
company's bondholders to chose between two options for the
disposal of CGE's Ford Heights, Ill., waste tire-to-energy
facility.  Under the plan's first option, the idled
facility and certain other assets would be transferred to
U.S. Bank Trust N.A. (formerly known as First Trust
Illinois N.A.), the trustee for $79.6 million of bonds.  
The second option calls for CGE to sell the facility with
the net proceeds used to satisfy all claims, liens and
encumbrances. (Federal Filings Inc. 7-May-1998)

Contemporary Industries Corporation, debtor, seeks a court
order authorizing it to sell to Kum & Go LC substantially
all of its operating assets.  On April 7, 1998, the debtor
entered into the agreement with Kum & Go to sell
substantially all of its operating assets and assign
certain of its leases and executory contracts to Kum & Go.

Pursuant to the agreement Kum & Go has agreed to pay: a
purchase price of $1.2 million for the headquarters,
$11,952,500 as the purchase price for the Owned Stores and
the Leased Stores and the Equipment located therein, $3
million as the purchase price for the Franchisee Stores and
the Equipment located therein, and as the purchase price
for the Inventory, an amount equal to 65% of the market
retail price as established by a physical inventory.

The debtor states that this sale will minimize
administrative expenses, maximize sale values and provide
maximum benefit that can be obtained by the creditors.
The sale of the assets will be subject to competitive
bidding.  The auction sale of the assets will be conducted
on May 19, 1998. Anyone who intends to submit a bid must
deposit $1.6 million in readily available funds.  An
Initial Bid for the Headquarters, owned stores, Leased
Stores and associated Equipment must be in the minimum
amount of $13.8 million plus Inventory and Petroleum
Products according to formulas in the agreement.

GAYLORD COMPANIES: United Magazine Company Plan
Both the United Magazine Company Plan (Unimag Plan) and the
Second Amended Plan of The Bookstore Debtors will be
considered for confirmation on April 27, 1998.

Pursuant to the Unimag Plan the debtor shall cease
operations.  All property of the estate which Unimag wishes
to acquire shall be sold to Unimag.

Cash in the amount of $195,000 plus a six year note in the
principal amount of $220,000 shall be delivered by Unimag
to the Disburing Agent.  

The Unimag plan didvides holders of Claims and Equity
Interests, other than Creditors with unclassified claims,
into classes based upon their legal rights and/or interest.

Under the terms of the plan, the Treatment of Impaired
Classes is as follows:

Class 1.1 Greenfield Commercial Credit LLC  - Allowed
Secured Claim of $235,000 - to be paid in equal monthly
deferred payments of principal plus interest.

Class 1.2 Ingram Book Company  - Allowed Claim- Ingram
shall receive equal monthly payments up to $400,000 plus 8%
interest over 36 months.

Class 1.3 Allowed Secured Claims of Creditors not included
in any other class Each holder shall receive full and
complete satisfaction of the Allowed Secured Claim in equal
monthly payments plus 8% interest, over 3 years.

Class 3.1 The Allowed Claim of any general unsecured
creditor not included in any other class.  Pro rata share
of allowed claim.

Class 3.2 Unimag Unsecured Claim shall be waived.

Class 4.1  The Equity Interests in the debtor - All of the
Equity Interest in the debtor shall be extinguished.   

GAYLORD COMPANIES: Bookstore Debtors' Second Amended Plan
This Second Amended Plan of Reorganization dated April 1,
1998 is proposed by the debtors, Gaylord Book Company,
Sawworth Book Company, Gaylord's Inc. and Gaylord
Enterprises, Inc. (The Bookstore Debtors). Both the United
Magazine Company Plan (Unimag Plan) and the Second Amended
Plan of the Bookstore Debtors will be considered for
confirmation on April 27, 1998.

The plan provides for the following classes of Claims:

Class 1.1 The Greenfield Allowed Secured Claim - This
amount is fixed at $235,000.

Class 1.2 The Allowed Secured Claims of Creditors not
included in any other class. The estimated amount of these
claims is $0.

Class 2.1 The Allowed Claims of Unsecured creditors
entitled to priority.  The amount of these claims is $0.

Class 3.1 The Allowed Claims of general unsecured creditors
in the amount of $1,000 or less.  The estimated amount of
these claims is $100,000.

Class 3.2 The Allowed Claim of any general unsecured
creditor not included in any other class. The estimated
amount of these claims is $1.2 million.

Class 4.1 The Equity interests in debtor shall be

Following confirmation and the Effective Date, the assets
and liabilities of the debtors will be consolidated into
Reorganized Gaylord Book Company which will either be
debtor Gaylord Book Company itself, or a newly formed
entity.  Ingram Book Company will make available to
Reorganized Gaylord Book Company a line of credit of up to
$250,000 based upon 50% of the value of the non-Ingram
inventory.  In the event of a default in any payment to
Ingram, Ingram will have the option to exercise its
security interest in the outstanding shares of Reorganized
Gaylord Book Company.  The plan contemplates a
consolidation of the four debtors.  The Bookstore
operations have been run as a separate line of business.  
The debtors have proposed to consolidate operations into
one entitiy, and the debtors claim that the only
alternative to the proposed plan is a Chapter 7

This plan and the accompanying disclosure statement do not
involve Gaylord Companies, Inc., The Cookstore, Inc. or The
Cookstore Worthington, Inc.  Those entities will submit a
separate plan.

GREATE BAY HOTEL: Bank Trustee Objects to Tax Counsel
State Street Bank and Trust Company, as Trustee for the
holders of the 10.78% First Mortgage Notes Due 2004
responds to the application of the debtor, Greate Bay Hotel
& Casino, Inc. to employ Rosenblum, Wolf & Lloyd, P.A. as
Special Real Property Tax Counsel to GBHC.  The Trustee has
a direct interest in the real estate taxes affecting the
mortgaged premises since the Notes are secured by the
property including refunds of real estate taxes.

The Trustee does not have sufficient information to assess
the advisability of the Application and requests that it be
denied except to the extent the reasonableness of the fee
arrangement is established, and that any tax refund be held
subject to the lien of the Trustee.

HAGERSTOWN FIBER: SBCCS Seeks Relief from Automatic Stay
SBCCS Constructors Joint Venture (SBCCS) is seeking
modification of the automatic stay for the purpose of
permitting pending arbitration proceedings that are already
in an advanced stage, to go forward to judgment.  The
parties have completed discovery, and SBCCS has filed a
motion for Summary Judgment that is pending.  Each party
has spent in excess of $300,000 on the arbitration

SBCCS and the debtor entered into an agreement for the
design, engineering, procurement and construction services
necessary to provide and construct a waste paper pulping
and de-inking facility, and a waste water treatment plant,
to be located near Hagerstown, Maryland.  In consideration
of its performance, the debtor, Hagerstown Fiber Limited
Partnerhip was to pay SBCCS $131,210,000.

SBCCS states that there is cause to grant SBCCS relief from
the automatic stay.  Allowing the arbitration to proceed
will result in a complete resolution of the issues between
the parties.  Further, SBCCS states that there is a strong
federal policy in favor of arbitration, and that is cause
to grant relief from the automatic stay.  SBCCS claims that
even if the court were to apply an exercise of discretion
standard, enforcement of the arbitration clause in the EPC
contract is appropriate in the circumstances fo this case.  
The debtor cannot show that there is a specific conflict
between enforcing the arbitration clause and the bankruptcy

HALLA GROUP: Mando Machinery Workers Go on Strike
Workers at Mando Machinery Corp. went on strike  
Thursday, paralyzing production of South Korea's largest
auto parts maker.  Some 5,000 workers at seven workplaces
across the country laid down tools, calling for payment of
arrears in wages worth 50 billion won (37.3 million  
dollars), a company spokesman told AFP.

The workers, demanding the company pay them April wages and
1997 bonuses worth three and half months of monthly salary,
filed applications in a bid to impound Mando's assets until
they are paid off.  Mando Machinery is a subsidiary of the
Halla Group, which collapsed in December last year. The
company was declared insolvent on December 6 and was
allowed temporary court protection on April 15 to enable it
to negotiate with creditors to reschedule debts. (Agence
France Presse - 05/07/98)

KIA MOTORS: Ford May Increase Its Stake
Ford Motor Co. will consider increasing its 16.9-
percent stake in troubled South Korean carmaker Kia Motors
Corp., a senior Ford official said Wednesday.  But Wayne
Booker, a Ford vice-chairman, said any new investment must
be preceded by a further restructuring of Kia, which filed
for bankruptcy last summer with $10 billion in debt.

Booker told Industry and Energy Minister Park Tae-young
about the U.S. automaker's plans at a meeting Wednesday,
ministry officials said. (Detroit News - 05/07/98)

KIWI INTERNATIONAL: Four Companies in Talks to Acquire Kiwi
Four companies are in talks to acquire the Newark, N.J.-
based airline's parent company, Kiwi International
Holdings, just 10 months after it teetered on the edge of
bankruptcy.   Kiwi International Holdings spokesman Rob
Kulat said two of the company's investors, Kiwi Holdings
Inc. and Aviation Industries Inc., are negotiating, as is
Coventry Industries Corp., a holding company that owns
manufacturing, industrial fabrication, employee staffing
and consumer-products units. A fourth, unidentified company
is also negotiating for the carrier.

Kiwi International Air Lines was in bankruptcy-court
protection when it was purchased by Baltimore physician
Charles Edwards in July 1997 for $16 million.  Since then,
the carrier has trimmed unprofitable routes such as those
to Las  Vegas and Tampa.

MANHATTAN BAGEL: Seeks Rejection of Six Leases
The debtors, Manhattan Bagel Company, Inc., and I & J
Bagel, Inc. seek approval of the rejection of their leases
for certain of their company-owned stores.  The store
locations are in Manchester, Connecticut, Newington,
Connecticut, Alpharetta, Georgia, Irvine, California,
Midland Park, New Jersey and Maderia, Ohio.

As part of the process of analyzing their business affairs,
the debtor has rejected certain leases for which buyers can
not be found and where it would not be cost effective to
assign such leases.  The rejection of these leases is for
sound business purposes based upon the debtors' sound
business judgment.

NAL-FINANCIAL: Interim Agreement with Trusts Gets Approval
NAL Financial Group Inc. announced Wednesday that the
interim agreement between NAL Acceptance Corp., the
company's wholly owned subsidiary, and several  
securitization trusts has received final approval by the
Bankruptcy Court.

The company and several of its subsidiaries filed for
bankruptcy protection  under Chapter 11 of the Bankruptcy
Code on March 23, 1998. Mercedes Padin, general counsel to
the company, stated, "Since our filing, we have been
negotiating with the securitization trusts to ensure NAL
received reasonable servicing fees for the work it performs
on behalf of these trusts. As we previously stated, this
agreement will provide the company with above-market
servicing income for 98 days.

"This income will assist the company as it strives to
reorganize.  In return, the securitization trusts receive
vital, uninterrupted servicing of portfolios containing
approximately $220 million in non-prime auto loans.   
These trusts are an important part of our reorganizational
efforts and we hope to promptly commence negotiations with
representatives of the trusts for long-term servicing

The company also announced that it has engaged William B.
Dyer as its interim chief executive officer.  Dyer is the
former president and chief operating officer of Auto
Lenders Acceptance Corp., a subsidiary of Fortis  
Inc., and has over 10 years of experience in the non-prime
auto finance industry.

Andrew Combs, vice president of finance was made chief
operating officer of the corporation.  Combs stated, "We
are delighted to have Bill join our company.  His
knowledge, expertise and outstanding reputation in our
industry will be of immense help as we prepare our
reorganizational plan and negotiate with creditors."

Dyer's engagement as CEO of the company and its
subsidiaries and affiliates is subject to approval by the
Bankruptcy Court.

PAN AM: Until May 20 to Complete Deal with Guilford
Timothy Mellon's Guilford Transportation Industries has  
presented a plan in Miami bankruptcy court to buy Pan
American World Airways  for $28 million.  Guilford and Pan
Am have until a May 20 court appearance to complete the
deal, although other offers for the airline will be

A lawyer for Wexford Management LLC, a Greenwich, Conn.,
operator of hedge funds, told the Judge A. Jay Cristol that  
Wexford had tried in late April to open deal talks with  
Pan Am's managers and may yet make a counterbid for Pan
Am's jets, name and route licenses by May 18.

NationsBank, owed some $26 million by Pan Am, would get
just over $14 million from the all-cash Guilford deal and
urged the judge to sign an order giving preliminary
approval to the Guilford deal.   

Timothy Mellon, chairman and a founder of Guilford, said
that rival bids were possible but unlikely since none was
likely to match his all-cash offer. Mellon said Guilford
was eager to take control of Pan Am and hoped to return the
airline to scheduled flight service, perhaps to selected
Latin American cities and some in the United States. Pan Am
may also carry freight, possibly in combination with
railroads, he said. (Reuters: Financial-05/06/98)

PEGASUS GOLD: Proposed Order Approving Severance Program
Pegasus Gold Corporation, et al, debtors, submitted to the
court proposed findings of fact, conclusions of law and an
order for approval of the severance and retention programs
for key employees and vacation pay option for all

The debtors are seeking an order approving two retention
and severance programs for 4 senior executives and 21 key
employees.  The Official Committee of Unsecured Creditors
negotiated modifications to the Initial Program which the  
debtors accepted.  According to Citibank, NA which appeared
as agent for the debtors' bank lenders, those lenders
support the program.  The Committee studied the issue
closely and negotiated significant modifications of the
Initial Program and supports the program.  The members of
the Board authorized the Program because it believes in its
business judgment, it is in the best interest of the
debtors.  The debtors have provided evidence that there is
a need for such a program, and that they are reasonable.

SAMSUNG GROUP: To Reduce Core Businesses
Samsung Group, South Korea's second-largest conglomerate in
terms of assets, announced a plan Wednesday to restructure
itself to weather the nation's financial crisis by reducing
its "core businesses" from 10 to four or five  
while looking for $5 billion in foreign investment.

The plan identified electronics, finance and "services" as
core businesses but avoided the question of the future of
its most troubled entity, Samsung Motor Co.

The group said it will attempt to reduce its debt-to-
equity ratio from the current level of about 350 percent to
124 percent in the next five years while paying off about
29 trillion won ($21.55 billion) in debts.  The company
said it was negotiating to sell some businesses to General  
Electric Co. and Hewlett-Packard Corp. of the United

All the plan said about Samsung Motor, a multibillion-
dollar investment that has produced 20,000 cars since
beginning production this year, was that it was
in the midst of negotiations aimed at "attracting foreign
funds in strategic cooperation with foreign motor
companies."  Samsung Motor's search for a foreign investor
has encountered problems similar to those of many other
South Korean companies eager for an infusion of  
capital from abroad.(International Herald Tribune 05/07/98)

VENTURE STORES: Hilco/Great American Won Auction
The joint venture of Hilco/Great American Group II LLC and
Gordon Brothers Retail Partners LLC won yesterday's auction
for the right to conduct Venture's going-out-of-business
sales after increasing the minimum guaranteed return to
52.75%.  A number of liquidators participated in the six-
hour auction, including a joint venture of, among others,
the Ozer Group L.L.C., the Nassi Group L.L.C., and ALCO
Capital Group.  Last month, the retailer accepted the Hilco
venture's initial bid, which guaranteed a minimum 49%
return on the sale of at least $350 million in inventory at
the retailer's 73 stores. (Federal Filings Inc. 7-May-1998)

DLS CAPITAL PARTNERS: Bond Pricing for Week of May 4, 1998
The following are indicated prices for selected issues:

Amer Telecasting 0/14 1/2 '04               24 - 26
Asia Pulp & Paper 11 3/4 '05                89 - 91
APS 11 7/8 '06                              18 - 20 (f)
Boston Chicken 7 3/4 '04                    43 - 45
Bradlees 11 '02                              1 - 2 (f)
Brunos 10 1/2 '05                           22 - 23 (f)
CAI Wireless 12 1/4 '02                     19 - 21
Cityscape 12 3/4 '04                        46 - 48 (f)
E&S Holdings 10 3/8 '06                     82 - 83
Grand Union 12 '04                          59 - 60 (f)
Greate Bay 10 7/8 '04                       86 - 87 (f)
Harrah's Jazz 14 1/4 '01                    30 - 32 (f)
Hechinger 9.45 '12                          79 - 80
Hills 12 1/2 '03                        92 1/2 - 93 1/2
Levitz 9 5/8 '03                            49 - 51(f)
Liggett 11 1/2 '99                          75 - 77
Mobilemedia 9 3/8 '07                       17 - 19 (f)
Penn Traffic 9 5/8 '05                      47 - 48
Royal Oak 11 '06                            80 - 82
Service Merchandise 9 '04                   76 - 77
Trump Castle 11 3/4 '03                     90 - 91
Zenith 6 1/4 '11                            43 - 44


The Meetings, Conferences and Seminars column appears
in the TCR each Tuesday.  Submissions via e-mail to are encouraged.

Bond pricing, appearing each Friday, is supplied by DLS   
Capital Partners, Dallas, Texas.  

S U B S C R I P T I O N   I N F O R M A T I O N   
Troubled Company Reporter is a daily newsletter, co-
published by Bankruptcy Creditors' Service, Inc.,
Princeton, NJ, and Beard Group, Inc., Washington, DC.  
Debra Brennan and Lexy Mueller, Editors.   
Copyright 1998.  All rights reserved.  This material
is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly
prohibited without prior written permission of the
Information contained herein is obtained from sources
believed to be reliable, but is not guaranteed.   
The TCR subscription rate is $575 for six months   
delivered via e-mail.  Additional e-mail subscriptions
for members of the same firm for the term of the initial   
subscription or balance thereof are $25 each.  For   
subscription information, contact Christopher Beard
at 301/951-6400.  
        * * *  End of Transmission  * * *