TCR_Public/980513.MBX T R O U B L E D   C O M P A N Y   R E P O R T E R
     
     Wednesday, May 13, 1998, Vol. 2, No. 95                  

                  Headlines

BARRY'S JEWELERS: Bondholders Support Extension
BARRY'S JEWELERS: Creditors' Committee Objects to Extension
CLUETT AMERICAN: Weak Financial Profile
GENERAL WIRELESS: Taps Arthur Anderson as Accountants
GULF RESOURCES: Notice of Rescheduled Hearing

HOSPITAL STAFFING: Applies to Employ Special Accountants
KIWI INTERNATIONAL: Coventry Signs Letter of Intent
LIL' THINGS: Order Authorizes Termination of 401(K)
MARVEL ENTERTAINMENT: Toy Biz/Marvel Announce Settlement
PARAGON TRADE: Court Authorizes Real Estate Broker

PARAGON TRADE: Court Extends Exclusivity Until Decision
RICKEL HOME CENTERS: Rejection of Leases
ROASTERS CORP: Applies to Employ Real Estate Broker
SMITH TECHNOLOGY: Seeks Bar Date for Filing Proofs of Claim
SUNBELT NURSERY: Applies to Employ Professionals

TRI-LITE INC: Creditor Seeks Conversion to Chapter 7
VCS SAMOA: Memorandum in Support of 2nd Amended Plan
VENTURE STORES: Auction Set for May 29, 1998

                  *********

BARRY'S JEWELERS: Bondholders Support Extension
-----------------------------------------------
The Official Bondholder Committee for Barry Jewelers, Inc.
supports the motion of the debtor, Barry's Jewelers, Inc.,
requesting an extension through August 31, 1998 of the time
within which it must assume, assume and assign or reject
unexpired real property leases.

The Bondholders believe that there is cause for granting
the motion, that the case is a large and complex case.  The
Bondholders' state that the debtor has shown great
diligence in quickly advancing the status of the case, but
that the debtor has had insufficient time to complete the
process of evaluating the leases since it has been busy in
negotiations that have culminated in a fully consensual
plan of reorganization.  The Bondholders claim that there
is no prejudice to landlords because of this extension,
although the landlord creditors object strongly to the
extension.


BARRY'S JEWELERS: Creditors' Committee Objects to Extension
-----------------------------------------------------------
The Official Unsecured Creditors Committee of Barry's
Jewelers, Inc. objects to the debtor's motion for an order
granting an extension of time within which to assume or
reject unexpired leases of real property.

The landlord-creditors of the debtor are objecting to a
third extension on the time period for determination of
assumption or rejection of leases, due to the fact that
such landlords have already waited one year for the
debtor's decision.  The Landlords claim that when the
debtor finally decides to reject its remaining leases, the
lessors will hold substantial unsecured rejection claims.  

They also argue that no cause has been demonstrated for the
further extension.  The creditors complain that the debtor
has had a full opportunity both to review the non-economic
provisions of all of its leases and to analyze operating
performance of its stores at the leased locations.  The
creditors state that the debtor has already had adequate
time to make decisions as to assumption or rejection. The
creditors state that all major parties in interest have
agreed to the plan, and the financing is in place.

The debtor has also admitted that it presently intends to
move for assumption of 40 leases, so the creditors question
why an extension is necessary until August to file the
simple motion for assumption.


CLIUETT AMERICAN: Weak Financial Profile
----------------------------------------
On May 12, 1998, Standard & Poor's assigned its single-'B'-
minus rating to Cluett American Corp.'s $112 million senior
subordinated notes due 2008.  In addition, a single-'B'-
plus bank loan rating was assigned to the company's $50
million revolving credit facility due 2004, $60 million
term loan due 2005, and $50 million term loan due 2004.  A
single-'B'-plus corporate credit rating also was assigned.  

The outlook is stable. Note proceeds, together with bank
debt and equity, will be used to recapitalize the company.  
Following the completion of the transaction, Vestar  
Capital Partners III, L.P. will own approximately 71%
of the common equity.   The company has been operating
under Chapter 11 since July 1995 and will emerge  from
bankruptcy protection upon the closing of the notes.  

The ratings reflect the Cluett American's weak financial
profile and short track record of improving operating
results, somewhat offset by the company's good brand names.


GENERAL WIRELESS: Taps Arthur Anderson as Accountants
-----------------------------------------------------
General Wireless, Inc. and GWI PCS, Inc. and affiliated
subsidiaries, as debtors, filed an application to employ
Arthur Andersen LLP as their accountants for the limited
purpose of the preparation of certain tax returns.  The
debtors state that such services will in no way duplicated
the services Price Waterhouse LLP is performing for the
debtors.  The debtors never intended to use Price
Waterhouse as auditors and tax accountants, but rather
planned to seek authority to employ Andersen to do so.  
Andersen will charge its usual and customary hourly rates
which range from $75 for a staff consultant to $325 for a
partner.


GULF RESOURCES: Notice of Rescheduled Hearing
---------------------------------------------
The U.S. Trustee's Motion to convert the cases of Gulf
Resources Corporation and Mustang Oil & Gas Corporation,
to Chapter 7 has been rescheduled for June 15, 1998.


HOSPITAL STAFFING: Applies to Employ Special Accountants
--------------------------------------------------------
Hospital Staffing Services, Inc., debtor, seeks an order
authorizing the employment of Holstein, Peacos & Egort, PA
as special cost reporting accountants for the debtor.

The firm will be paid the sum of $55,000 upon completion of
fifteen year-end Medicare costs reports and two year-end
Medicaid reports for the fiscal year ended November 30,
1997.  Compensation for on-going reimbursement consulting
will be payable on an hourly basis, ranging from $45 for
administrative services to $185 for a managing partner. A
retainer of $10,000 is subject to court approval.


KIWI INTERNATIONAL: Coventry Signs Letter of Intent
---------------------------------------------------
Diversified holding company Coventry Industries Corp. said
Monday it has signed a letter of intent to buy Kiwi  
International Holdings Inc., but a spokesman for the
airline said the companies are still negotiating and have
not reached an agreement.

Coventry said in a statement it would buy the airline for
an undisclosed amount of stock.  A Kiwi spokesman, however,
told Reuters he had just spoken with Kiwi Chairman Charles
Edwards, who said the companies had not reached an
agreement of any sort. "I hope they wire me the money,"
Edwards quipped, according to the spokesman. Edwards denied
having signed a letter of intent with Coventry, the
spokesman added.  Edwards, a Baltimore surgeon, bought Kiwi
for $16.5 million last July, when the Newark, N.J.-based
airline was in bankruptcy proceedings.

Coventry said it expected to reach a definitive agreement
by June 15, subject to the completion of due diligence.  
The Boca Raton, Fla.-based Coventry has been in talks to
buy three small low-fare airlines, including Kiwi, Business
Week reported on April 30. (Reuters: Financial-05/11/98)

The Wall street Journal reported on May 12, 1998 that a
spokesman for Kiwi stressed that the two companies are just
discussing a merger, and that they have a long way to go.


LIL' THINGS: Order Authorizes Termination of 401(K)
-------------------------------------------------
Judge Harold C. Abramson entered an order on May 4, 1998
ordering American United Life Insurance Company, as service
provider on the Plan, to terminate the debtor's 401(K)
plan.


MARVEL ENTERTAINMENT: Toy Biz/Marvel Announce Settlement
--------------------------------------------------------
Toy Biz, Inc. and Marvel Entertainment Group, Inc.
announced that an agreement, subject to court approval, has
been reached among Toy Biz, John J.  Gibbons, Chapter 11
Trustee of Marvel, representatives of Marvel's
Senior Secured Lenders and certain other parties to settle
litigation commenced by Marvel against Toy Biz, Marvel's
Senior Secured Lenders and those other parties as well as
litigation commenced by Toy Biz against Marvel.  

On March 30, 1998, the United States District Court for the
District of Delaware, which has been administering the
Marvel Chapter 11 cases entered a judgment declaring that
the  supervoting rights associated with the class B
common stock of Toy Biz owned by  Marvel, which enabled
Marvel to control the Toy Biz board, terminated on June  
20, 1997 when Carl C. Icahn took control of Marvel.  This
judgment has been  appealed by Marvel's Trustee and others
to the United States Court of Appeals  for the Third
Circuit.  On April 13, 1998, the Court of Appeals stayed,
pending  the outcome of the appeal, the previously
scheduled confirmation hearing on the  plan of
reorganization that had been proposed by Toy Biz and
Marvel's Senior Secured Lenders, providing for the
combination of Toy Biz and Marvel.

If the settlement agreement is approved by the District
Court which is overseeing Marvel's bankruptcy, the Trustee
has agreed to seek to have the stay of the confirmation
hearing vacated, to defer consummation of the appeal and to  
withdraw the appeal upon consummation of the Plan of
Reorganization. Under the terms of the proposed settlement
agreement, the Trustee, the Senior Secured  Lenders of
Marvel, Toy Biz and others will exchange releases,
including  releases from the lawsuit commenced by Marvel.  
That lawsuit was commenced by Marvel when it was controlled
by the Icahn interests against the Senior Secured  Lenders,
Toy Biz and others.

Among the parties against whom Marvel brought its  lawsuit
are Ronald O. Perelman and certain of his affiliates and
associates, who are not being released.  The proposed
settlement also provides for the amendment of the proposed
plan of reorganization so that Marvel equityholders  and
entities entitled to securities litigation claims will
receive three series  of warrants upon consummation of the
amended Plan of Reorganization entitling  them to purchase
common and convertible/exchangeable preferred stock to be  
issued by the combined company.  

The first series of four million warrants will  have a term
of six months and will allow the recipients to purchase
common stock in the combined company at a price of $12.00
per share (subject to  increase based on the issuance date
of the warrants).  The second series of  three million
warrants will have a term of six months and will allow the  
recipients to purchase convertible/exchangeable preferred
stock in the combined  company at a price of $10.65 per
share (also subject to increase based on the  issuance date
of the warrants).  The final series of five million
warrants will  have a term of four years and will allow the
recipients to purchase common  stock in the new company at
a price of $18.50 per share.  Finally, the equity  holders
and class securities litigation claimants will be entitled
to receive  distributions from any recovery on certain
future litigation.

The agreement is subject to the approval of the Senior
Secured Lenders.  The agreement is subject to confirmation
of the amended Plan of Reorganization by June 30, 1998,
which will require the Court of Appeals to lift its stay,
and consummation of the amended Plan of Reorganization by
August 15, 1998. (PR Newswire: Retail-05/12/98)


PARAGON TRADE: Court Authorizes Real Estate Broker
--------------------------------------------------
Judge Margaret H. Murphy approved the application of
Paragon Trade Brands, Inc. to employ Hart Corporation as
real estate broker for the debtor in the Chapter 11 case.  

The court also authorized payment to Hart of the
commission(s) set forth in the Exclusive Listing
Agreements.  Any further payments must be approved by the
court.

A hearing will be held on May 20, 1998 on the debtor's
application to employ The Blackstone Group LLP as financial
advisor and investment banker to the debtor. The Blackstone
Group has submitted a first fee application in the amount
of $376,000.


PARAGON TRADE: Court Extends Exclusivity Until Decision
------------------------------------------------------
A hearing was held before Judge Margaret H. Murphy on May
5, 1998 on the motion of the debtor, Paragon Trade Brands,
Inc., for an extension of the exclusive periods.  

Objections were filed by Procter & Gamble Company,
Kimberly-Clark Corporation and a Response by the Official
Unsecured Creditors' Committee.  The court has not made any
determination with respect to the motion, and the court
extended exclusivity until further order of the court.

Since entry of this order, the debtor announced that it
would cooperate with Procter & Gamble in negotiating a
plan.


RICKEL HOME CENTERS: Rejection of Leases
----------------------------------------
The debtor, Rickel Home Centers, Inc., seeks an order
authorizing the rejection of five nonresidential real
property leases.  Four of the leases cover stores
Flemington, New Jersey; Middletown, New York;
Pleasantville, New Jersey; and Pottstown, Pennsylvania.  
The stores are "Abandoned Leases" that Staples, Inc. did
not desire to have assigned to it pursuant to the sale of
41 of the debtor's leases to Staples, Inc.

According to the debtor, authorization to reject the leases
is in the best interests of the debtor.  The debtor has not
been able to find any entity willing to purchase the leases
on terms that would result in a benefit to the debtor or
its estate.  The cost of carrying the leases and continuing
to find a potential buyer is not in the debtor's best
interests.

The fifth lease covers the premises in South Plainfield,
new Jersey for debtor's warehouse and executive offices.  
Attempts at marketing the lease were unsuccessful and
Staples, Inc. did not want to take assignment of the lease.

The lease is currently a drain on the debtor's limited
assets and the rejection of the lease is, according to the
debtor, in its best interests.


ROASTERS CORP: Applies to Employ Real Estate Broker
---------------------------------------------------
The debtor, Roasters, Corp., requests authority to employ
Owen E. Dempsey as a real estate consultant in this case,
and to approve payment of his commission from the proceeds
of certain sales which are subject to court approval.

Dempsey was formerly employed by the debtor as its chief
real estate counsel and as the real estate/excess property
manager.  Debtor has agreed to pay him 7% of the sale price
for each of the properties for which he negotiated sales,
payment to be made at closing.  The debtor wishes to employ
Dempsey on modified terms for a limited purpose.

The debtors wish to employ Oates Commercial Properties to
market and locate potential purchasers for certain property
located at 4720 Showcase Blvd., Memphis, Tennessee.  The
debtor proposes to pay Oates 6% of the sale price of a
purchase of the property, subject to court approval.


SMITH TECHNOLOGY: Seeks Bar Date for Filing Proofs of Claim
-----------------------------------------------------------
The debtors, Smith Technology Corporation, et al., request
an order establishing July 10, 1998 as the date by which
proofs of claim must be filed by creditors and approving
the form of notice of bar date.


SUNBELT NURSERY: Applies to Employ Professionals
------------------------------------------------
Sunbelt Nursery Group, Inc. and its affiliates, as debtors,
applied to employ Pachulski, Stang, Ziehl & Young, PC as
general bankruptcy counsel.  The debtors paid the firm a
pre-petition general retainer of $229,250.

The debtors applied to employ Ernst & Young LLP as its
financial advisors.  Ernst & Young received $225,000 pre-
petition from the debtors.

The debtors applied to employ Sidley & Austin as debtors'
corporate and securities counsel.    The debtors seek to
hire Sidley & Austin to assist the debtor with its
publicreporting and disclosure requirements under federal
and state law, including periodic reports required to be
filed with the SEC.  Sidley & Austin received a retainer
for pre-petition and post-petition services in the
aggregate amount of $20,000.

The Official Committee of Unsecured Creditors is seeking to
employ Clarkson, Gore & Marsella as Committee Counsel.
The firm will be employed at the expense of the Estates in
the Bankruptcy Cases.


TRI-LITE INC: Creditor Seeks Conversion to Chapter 7
----------------------------------------------------
A. Alvin Katz, a creditor of Tri-Lite, Inc., debtor, seeks
an order converting this case to a Chapter 7 based on the
material breach of the confirmed plan of reorganization,
and the inability of the plan proponents to substantially
consummate the confirmed plan of reorganization.  Katz was
formerly the president and CEO of Tri-Lite.  

Katz claims that a substantial number of Tri-Lite creditors
still have not received the first scheduled payment of $.30
on the dollar on their claims, and the creditors are
allegedly going to have to accept less than the 70% of the
total claim distribution called for under the plan.  Katz
has also not received the 80,000 shares of stock in the
reorganized debtor due as post-petition compensation under
the plan o f reorganization.  Katz has not received any
distribution including the first scheduled payment as an
unsecured class 4 creditor regarding his claim under a pre-
petition executory employment contract which was not
rejected by the debtor.  

Katz claims that the best interests of creditors will be
served by conversion of the case to Chapter 7 and the
appointment of a Chapter 7 trustee to liquidate the
remaining assets, and to prevent further professional fees.


VCS SAMOA: Memorandum in Support of 2nd Amended Plan
----------------------------------------------------
The debtors, VCS Samoa Packing Company and Van Camp Seafood
Company, Inc. and the Official Committees of Unsecured
Creditors in each case submit a Memorandum in support of
confirmation of the 2nd amended joint plan of liquidation.  
The plan enables the debtors to pay the claims of creditors
through the distribution of the proceeds from the
liquidation of the debtors' business.

Seven of the eight creditor classes have approved the plan.
The plan distributes all available cash in the debtors'
estate in accordance with priorities set forth in the
Bankruptcy Code, and contemplates the payment in full of
Allowed, Administrative Claims, Priority Claims and Secured
Claims and a pro rata distribution of the remaining funds
on hand to the holders of Allowed Unsecured Claims.

The plan incorporates a negotiated settlement with The
Prudential Insurance Company of America, Gateway Recovery
Trust and the Committees, which enhances the dividend to
holders of Claims in Classes 5, 6 and 7, and a negotiated
settlement with Van Can Company which resolves all of the
claims of Van Can, and also enhances the dividend to holder
of Class 7 claims.

The plan is conditioned on separate court approval of
settlements with PBGC and VCS National Packing Company and
the debtor.

The debtor addresses the objection of P.T. Mantrust by
stating that a plan incorporating releases of nondebtor
parties may be confirmed where the releases are essential
to the plan.


VENTURE STORES: Auction Set for May 29, 1998
---------------------------------------------
The debtor, Venture Stores Inc. is holding an auction for
the purchase of certain real estate leases, related
furniture, fixtures, equipment and vehicles.  The debtor
will conduct an auction on May 29, 1998.

To be eligible to participate in the auction, offers must
contain an initial bid providing consideration not less
that $2.25 million more than the consideration proffered by
the Buyer, KRC Acquisition Corp., Kimven Corporation and
KRCV Corporation in the "Asset Purchase Agreement."  The
minimum increment for subsequent bids is no less than
$250,000 more than the previous high bid.  A hearing will
be held on June 1, 1998 to approve the sale of the
properties.

                  *********

The Meetings, Conferences and Seminars column appears
in the TCR each Tuesday.  Submissions via e-mail to
conferences@bankrupt.com 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
publishers.   
  
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  * * *