TCR_Public/980514.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, May 14, 1998, Vol. 2, No. 96                  

                  Headlines

BARNEY'S: Creditors Cancel Dickson Pact to Buy Company
BUFFETS, INC: Announces Stock Repurchase Authorization
DECORATIVE HOME: $11M Term Loan Amendment Wins Okay
DOEHLER-JARVIS: Seeks to Extend Exclusivity
FIRST ENTERPRISE FINANCIAL: Seeks Bar Dates

GREATE BAY: Extension of Exclusivity Through August 10
HOPE: Court Rejects Bankruptcy Filing
HOMEOWNERS MORTGAGE: Case Summary and Unsecured Creditors
KIA MOTORS: Former Kia Group Head Arrested in Crisis Probe
LESLIE FAY: Reports First Quarter Results             

MARVEL: If Settlement Approved - Trustee Withdraws Appeal
MOBILEMEDIA: Disclosure Statement Hearing Reset For June 2
MOTHERS WORK: To Close, Convert Episode Stores
NAL FINANCIAL: Order Approves Committee's Counsel
PARAGON TRADE: Hart Corp Tapped as Real Estate Broker

PARAGON TRADE: Seeks Special Counsel for Employment Matters
RESURGENS COMMUNICATIONS: Acquisition Bid By World Access
SEARCH FINANCIAL: Completes Sale of Assets Of MS Financial
SONESTA BEACH HOTEL: Turned Over to New Partnership  
WANG-GLOBAL: Granted Final Stock Distribution                       

WELCOME HOME: Seeks to Extend Exclusivity
WHEREHOUSE: In Talks to Buy Blockbuster Music Chain

                 *********

BARNEY'S: Creditors Cancel Dickson Pact to Buy Company
------------------------------------------------------
According to a report on May 13, 1998 in The Wall Street
Journal, a committee of unsecured creditors canceled the
$322 million contract by Dickson Concepts (International)
Ltd. to purchase the company.

The unsecured creditors reportedly said that they are close
to proposing a reorganization plan of their own for
Barney's to emerge as an independent company.

The unsecured creditors along with two so-called vulture
funds that invested in Barney's debt, Whippoorwill
Associates Inc. and Bay Harbour Mangement LC have been
discussing the plan for Barney's emergence as an
independent company.  

The article quoted Lawrence Handelsman attorney at the New
York law firm of Stroock & Stroock & Lavan LLP who
represents the unsecured creditors. He said that Dickson
could still make another bid and that the creditors would
review any new offers.


BUFFETS, INC: Announces Stock Repurchase Authorization
-------------------------------------------------------
Buffets, Inc. announced today that its Board of Directors
has authorized the expenditure of up to $40,000,000 for the
purchase of outstanding shares of Buffets, Inc. common
stock, to be effected from time to time in transactions on
the Nasdaq National Market or otherwise.  The company has
approximately 45,398,981 shares of common stock
outstanding.

The company also announced that it has reached an agreement
in principle to  purchase 11 Country Harvest Buffet
restaurants from Country Harvest Buffet Restaurants, Inc.
of Seattle, Washington.  Of the 11, 7 are located in  
California, 2 in Washington, 1 in Colorado and 1 in
Montana.  The transaction is expected to close in June,
1998, subject to the satisfaction of certain conditions,
including bankruptcy court approval .


DECORATIVE HOME: $11M Term Loan Amendment Wins Okay
---------------------------------------------------
After a hearing Monday, the court approved an amendment to
Decorative Home Accent Inc.'s postpetition term loan
facility that increases availability under the term loan
agreement by up to $11 million.  The court noted that the
home accessories manufacturer was unable to obtain the
credit that the term lenders would provide on an unsecured
basis and that the creditors' committee had no objection to
the amendment. (Federal Filings Inc. 13-May-1998)


DOEHLER-JARVIS: Seeks to Extend Exclusivity
-------------------------------------------
The debtors, Doehler-Jarvis, Inc. and its affiliated
companies, seek an order further extending their exclusive
periods in which to file a plan or plans of reorganization
and solicit acceptances thereto.

The debtors request that the exclusive proposal period be
extended from June 2, 1998 through August 1, 1998 and the
exclusive solicitation period be extended from August 1,
1998 through September 30, 1998.

The debtors state that they have made substantial progress
toward reorganization.  They delivered a detailed business
plan to the Creditors' Committee.  The Creditors' Committee
and the debtors have shared data and developed a plan a
term sheet and an issue list.  The debtors and the
Creditors' Committee now have a framework with which to
formulate a consensual plan of reorganization.  The size
and complexity of these cases, as well as the substantial
progress made towards stabilizing the debtors' businesses
is undisputed and was established in connection with
previous extensions of exclusivity.

The debtors list many examples of their progress in the
case: The debtors' new management team led by Roger
Pollazzi is now integrated into the company; most of the
debtors' non-core assets have been sold; leases have been
assumed, assigned and rejected; unprofitable plants have
been closed; the debtors obtained a $25 million
subordinated DIP facility; severance plans have been
developed and the debtors obtained a February 9, 1998 Bar
Date.  In addition, the debtors state that creditors will
not be prejudiced by the extensions.


FIRST ENTERPRISE FINANCIAL: Seeks Bar Dates
-------------------------------------------
First Enterprise Financial Group, Inc. and First Enterprise
Acceptance Company, debtors, seek to establish deadlines
for creditors to file proofs of claim in the debtors'
Chapter 11 cases.  The debtors request that all creditors
holding or wishing to assert claims that arose prior to the
filing of the cases be required to file a proof of claim on
or before July 22, 1998.  Governmental units and
administrative claimants must file a proof of claim on or
before September 14, 1998.


GREATE BAY: Extension of Exclusivity Through August 10
------------------------------------------------------
Greate Bay Hotel & Casino, Inc. won an extension of its
exclusive period for filing a reorganization plan from
May 5 through Aug. 10.  The creditors' committee did not
object to the company's extension request, however,
indenture trustee State Street Bank & Trust Co. filed a
statement generally supporting a shorter, 75-day extension.
(Federal Filings Inc. 13-May-1998)


HOPE: Court Rejects Bankruptcy Filing
-------------------------------------   
The apparently bankrupt High Opportunity Petroleum
Enterprises Inc. ("HOPE") just needed one more day to
complete its bankruptcy filing, a company lawyer said  
after a judge dismissed the incomplete petition Monday.  
Joe Garza, who represents the defunct Arlington-based
multilevel marketing company, said the company's list of
5,000 creditors took longer than expected to file with the
U.S. Bankruptcy Court in Fort Worth.

HOPE filed for Chapter 7 bankruptcy more than two weeks
ago. Chapter 7 is straight bankruptcy, meaning remaining
assets would be sold off to pay creditors. But because the
company failed to file its financial information and
mailing matrix of creditors, the petition was automatically
dismissed.

Famed for attracting people to sell gasoline debit cards at
a discount, HOPE swelled to 51,000 national distributors
last summer. Lawyers placed the value of HOPE's bank
account at $10 million to $13 million. But the company fell
hard and fast just six months after its inception. Numerous
creditors sued the company for unpaid funds, consumer
complaints with the state Attorney General's office soared
to the 100s and government investigations ensued.

One investigation by the U.S. Postal Inspections Service
concluded in March that HOPE was an illegal pyramid scheme
that made money off new recruits rather than the sale of a
legitimate product. The Postal Service ordered the company  
to cease and desist.


HOMEOWNERS MORTGAGE: Case Summary and Unsecured Creditors
---------------------------------------------------------
Debtor:  HomeOwners Mortgage & Equity Inc.
         6836 Austin center Blvd.
         Suite 280
         Austin, Texas 78731

Type of business: Consumer Finance

Originator, seller and purchaser of secondary mortgage and
home improvement loans

Court: Western District of Texas

Case No.: 98-11551   Filed: 05/07/98    Chapter: 11

Debtor's Counsel: D. Michael Dalton, Gary C. Miller,
                     Martha F. McDugald

                  Mayor, Day, Caldwell & Kaeton, LLP
                  700 Louisiana
                  Suite 1900
                  Houston, Texas 77002
                  
Total Assets:              $32,660,000 (approx.)
Total Liabilities:         $31,000,000 (approx.)
                                                   No. of
                              Approximate Amount    Holders
                                 ---------------    -------
Fixed, liquidated secured debt      $20,000,000          4
Contingent secured debt              $5,925,000          1
Disputed secured debt                   unknown          1
Unliquidated secured debt               unknown          1

Fixed, liquidated unsecured debt     $1,025,000         90
Contingent unsecured debt            $4,022,000        183
Disputed unsecured debt                 unknown          1
Unliquidated unsecured debt             unknown          1

No. of shares of common stock             5,555  

20 Largest Unsecured Creditors:

   Name                            Nature    Approx. Amount
   ----                            ------        --------
Guaranty Federal Savings Bank    Bank Loans         unknown
First National Bank of Keystone    Contract      $3,370,000
FNMA                  Alleged Contact Claim         unknown
Department of HUD     Title 1 Ins. Premiums        $190,000
First Plus Financial               Contract        $179,000
Compulink Loan Services            Contract         $73,400
Kristin Conroy          Unfunded Loan Check         $53,300
Homespec of America            service fees         $48,900
Willoz direct                     Trade debt        $48,800
Curtis T. Johnson                 Loan Check        $44,600
LS Plus Holding                Mgemt.Charges        $43,500
Kurt Stilling            Unfunded Loan Check        $43,350
Warren Hendrix           Unfunded Loan Check        $42,450
V. Keonnella             Unfunded Loan Check        $42,070
Keith Duncan             Unfunded Loan Check        $40,270
George Weaver            Unfunded Loan Check        $36,900
Terrence L. Jones        Unfunded Loan Check        $36,280
Lewis and Rock LLP                Legal Fees        $31,460
Harry J. Miller          Unfunded Loan Check        $31,300
Clark F. Newman          Unfunded Loan Check        $31,180


KIA MOTORS: Former Kia Group Head Arrested in Crisis Probe
----------------------------------------------------------                 
South Korean prosecutors said on Wednesday they had
arrested the former chairman of Kia Group, Kim Sun-hong,
because of illegal debt payment guarantees offered between
the group's units.   "(Kim) left indiscriminate over-
investment by Kia affiliates unchecked and focused instead
on efforts to raise the outside credibility of the Kia
Group," a statement from the prosecution office said. An
official said Kim was arrested on Tuesday.

Local media reports said Kim was arrested for using
corporate funds to buy shares in Kia affiliates as a way to
maintain management of the group and for authorising cross
payment guarantees among affiliates for two years between  
1995 to 1997. (Reuters - 05/13/98)


LESLIE FAY: Reports First Quarter Results             
-----------------------------------------                             
The Leslie Fay Company, Inc. reported financial results for
its first quarter of 1998, covering the 13 weeks ended
April 4.  For purposes of comparability, the discussion of  
year-ago results uses pro forma data that reflect the
dispositions of the company's Sassco Fashions and
Castleberry product lines and "fresh start" adjustments,
both stemming from the company's emergence from Chapter 11  
bankruptcy protection on June 4, 1997.  The comparability
of first quarter 1998 results with first quarter 1997
results is adversely affected by the inclusion in the 1997
period of 14 weeks of operations and the operations of
the company's Outlander clothing line, discontinued in the
fourth quarter of 1997.

For its first quarter of 1998, Leslie Fay reported a 9.3%
increase in net sales to $45.3 million from $41.4 million
in net sales for the company's year-ago quarter.  The
company's operating income for the first quarter of 1998
was $5.9 million, compared with $5.6 million for the year-
ago period.

The company's net income for the first quarter of 1998
increased to $3.8 million, or $1.11 per basic share, from
net income of $3.5 million, or $1.02 per basic share, for
last year's quarter.  The per share (basic) data for both  
periods has been calculated using 3.4 million outstanding
common shares, of which 21 percent are not currently
trading due to a hold back by the bankruptcy court.

Leslie Fay's earnings before interest, taxes, depreciation
and amortization (EBITDA) for its first quarter of 1998 was
$5.1 million, compared with $4.6 million for the year-ago
quarter.  Leslie Fay's EBITDA as a percentage of sales
continued strong, at 11.3%, compared with 11.2% for last
year's quarter.  Trailing 12-month EBITDA was $8.3 million,
which was 6.1% of sales.  The company's EBITDA also
excludes stock-based compensation expense and  
amortization of excess revalued net assets over equity.


MARVEL: If Settlement Approved - Trustee Withdraws Appeal
---------------------------------------------------------
Marvel Entertainment and Toy Biz have agreed to the terms
of a settlement that calls for an amendment to the proposed
reorganization plan so that Marvel stockholders and those
entitled to securities litigation claims will receive three
series of warrants upon completion of the reorganization  
plan, entitling them to purchase common and convertible
preferred stock issued  by the combined company.

The first series of 4 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.  The second series of 3 million warrants will have a
term of six months and will allow the recipients to
purchase convertible preferred stock in the combined
company at a price of $10.65 per share.  The final series
of 5 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.  

If the settlement is approved by the court overseeing
Marvel's bankruptcy, Marvel's trustee, which is running the
company, has agreed to withdraw an appeal of a March 30
District Court judgment.   The judgment declared that
Marvel's Marvel Characters Inc. subsidiary had lost voting
control over Toy Biz, a Marvel licensee, as of June 20,
1997 when Carl Icahn took control of Marvel from Revlon
chief Ron Perelman.

Toy Biz has sought to take control of Marvel since then,
saying a stock agreement cut Marvel's control in Toy Biz to
26 percent. Meanwhile, Marvel has sought to regain control
over Toy Biz's board.  Toy Biz sued, saying that the 1995
stock agreement called for Marvel's 7.4 million class B Toy
Biz shares, which carried 78 percent voting control in Toy
Biz, to be converted if there was a change of control at
Marvel.

The Stockholders and class securities litigation claimants
will be entitled to receive distributions from any recovery
on certain future litigation.   The senior secured lenders
that have agreed to support the reorganization plan must
approve the agreement. Toy Biz expects to receive
the approval  shortly, the statement said.


MOBILEMEDIA: Disclosure Statement Hearing Reset For June 2
----------------------------------------------------------
At a hearing yesterday, the court rescheduled MobileMedia's
previously adjourned disclosure statement hearing for June
2.  Last month, MobileMedia, the secured lenders' steering
committee, and the creditors' committee agreed to adjourn
an April 14 disclosure statement hearing to continue to
discuss the company's proposed stand-alone reorganization
plan. (Federal Filings Inc. 13-May-1998)


MOTHERS WORK: To Close, Convert Episode Stores
----------------------------------------------
Mothers Work Inc., a maternity wear retailer, said it will  
close or convert 21 Episode retail stores to cut losses.
Philadelphia-based Mothers Work purchased the Episode
stores June 1, 1996, for $11 million, attempting to expand
into women's casual and work clothes carried by Episode.  
The Episode stores were operating under Chapter 11
bankruptcy protection when they were bought. The company
said it will lose $5.4 million in the third quarter of this
fiscal year, with $1.8 million in cash to be paid out in
the fourth quarter, in connection with the store closings.


NAL FINANCIAL: Order Approves Committee's Counsel
-------------------------------------------------
In the case of NAL Financial Group, Inc. and its
affiliates, as debtors, Judge Paul G. Hyman approved the
request of the Official Committee of Creditors Holding
Unsecured Claims to employ Stroock & Stroock & Lavan LLP as
counsel to the Committee.


PARAGON TRADE: Hart Corp Tapped as Real Estate Broker
-----------------------------------------------------
Paragon Trade Brands, Inc. is seeking an order approving
the appointment of Hart Corporation as its real estate
broker to sell certain pieces of real estate in
Porterville, California and Oneonta, New York under a flat
commission arrangement.  The commission shall be the
greater of $60,000 or 6% of the gross contract sale price
of the property in each case.


PARAGON TRADE: Seeks Special Counsel for Employment Matters
-----------------------------------------------------------
Paragon Trade Brands, Inc. requests court authority to
employ Davis Wright & Tremaine as its special litigation
counsel to handle certain employment and employee benefit
matters.  The debtor has agreed to pay the firm its
standard hourly rates subject to an agreed 10% discount.


RESURGENS COMMUNICATIONS: Acquisition Bid By World Access
---------------------------------------------------------
World Access, Inc. announced that it has signed definitive
agreements to acquire Cherry Communications  Incorporated,
d/b/a Resurgens Communications Group, and Cherry  
Communications U.K. Limited.  The agreement is subject to
the approval of the Bankruptcy Court.

Pursuant to the terms of the agreements, the creditors of
Resurgens Communications Group ("RCG") and the shareholders
of Cherry U.K. will receive approximately 3.7 million
shares of World Access common stock in the aggregate,
currently valued at approximately $140 million.  In
addition, the RCG creditors and Cherry U.K. shareholders
have the right to receive additional consideration of up to
7.5 million shares of World Access common stock over the
next two and one-half years, contingent upon the
achievement of certain EBITDA levels by Resurgens during
this timeframe. The transaction is subject to, among other
things, Resurgens exceeding pre-defined levels of monthly
revenues and gross margin, the receipt of the requisite
corporate and regulatory approvals, the confirmation of
RCG's Plan of Reorganization and the approval of World
Access shareholders.

WorldCom, Inc. a major customer and vendor of Resurgens,
has subsequently provided Resurgens approximately $26
million of direct financial support through a debtor in
possession facility and additional financial support,
primarily through trade credits.  Upon completion of the  
Resurgens acquisition, WorldCom is expected to own
approximately 15% of World  Access on a fully diluted
basis.


SEARCH FINANCIAL: Completes Sale of Assets Of MS Financial
----------------------------------------------------------
Search Financial Services Inc. announced today that it has
completed the sale of the assets of MS Financial, Inc. to
Fleet Bank, N.A., as agent for the MSF bank group, in
complete satisfaction of MSF's indebtedness to the bank  
group.  

That indebtedness was guaranteed by Search.  The sale was
approved by the Bankruptcy Court for the Northern District
of Texas, Dallas Division.  As previously reported, MSF
will be entitled to receive 65% of the proceeds from the
liquidation of MSF's receivables portfolio and other assets
sold to Fleet Bank after deducting therefrom an amount
equal to the obligations owed under the loan agreement,
estimated at approximately $55 million, plus continuing
interest and certain costs, including servicing costs.  At
March 31, 1998, the book value of MSF's assets was
approximately $63.7 million, excluding unearned interest of
approximately $18 million.  At that date, the debt owed to  
the bank group was approximately $58.6 million.  

Search announced also that the Bankruptcy Court had denied
the motion of Hall Phoenix/Inwood, Ltd. for appointment of
a Trustee for Search.  


SONESTA BEACH HOTEL: Turned Over to New Partnership  
---------------------------------------------------
Owners of Sonesta Beach Hotel, Key Biscayne, Fla, turned
over property to  a management firm as part of a Chapter 11
bankruptcy deal. (Miami Herald; 05/02/98 - Copyright - The
New York Times Co. 1998)


WANG-GLOBAL: Granted Final Stock Distribution                       
---------------------------------------------
Wang Global announced on May 12, 1998 that the United
States Bankruptcy Court has granted approval to distribute
the remaining 2.5 million shares of common stock to
creditors of the  predecessor company. The shares have been
held in a distribution reserve following Wang's emergence
from bankruptcy in 1993.

The distribution will not increase the number of Wang
Global shares outstanding and therefore will not change the
basis upon which Wang Global reports its per share
earnings. Wang Global anticipates that the distribution  
in shares will be completed within the next six to nine
months.


WELCOME HOME: Seeks to Extend Exclusivity
-----------------------------------------
Welcome Home, Inc. represents that May 18, 1998 is the last
day on which the debtor has the exclusive right to file a
plan.  July 14, 1998 is the last day on which the debtor
has the exclusive right to obtain acceptance of a plan.  
The debtor needs additional time to finalize a plan of
reorganization.  The debtor and the Committee have been
actively negotiating the terms of a plan since the
beginning of this year.  Within the past 10 days they have
reached an agreement in principal. Debtor's counsel has
prepared a draft of the plan and expects to share it with
the Committee shortly.

The debtor request entry of an order extending to and
including July 17, 1998 the time in which debtor retains
the exclusive right to file and plan, and extending to and
including September 11, 1998, the time in which the debtor
has to obtain acceptance of a plan.


WHEREHOUSE: In Talks to Buy Blockbuster Music Chain
---------------------------------------------------
Music store chain Wherehouse Entertainment has held talks
to buy Viacom Inc.'s nearly 400-store Blockbuster  
Music chain, sources close to the talks said Tuesday.
Wherehouse, a 220-store chain that recently emerged  
from Chapter 11 bankruptcy, first approached Viacom months
ago and opened discussions regarding the Blockbuster chain,
a source familiar with Wherehouse said.

Other industry sources cited rumors that Wherehouse had
recently made an offer -- estimated at around $200 million
-- for the troubled chain, which had sales of about $600
million last year.

"When they came out of bankruptcy, they planned to use $35
million to rebuild their stores but have kept the money in
a war chest," another industry source said.  "The first
company they went after was the Camelot music store chain
and Spec's music chain, and it's been on the prowl ever
since," said the source familiar with Wherehouse.

According to news reports, Viacom has retained investment
bank Wasserstein & Perella to sell the music chain.
(Reuters: Financial - 05/12/98)

                  *********

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