TCR_Public/980617.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, June 17, 1998, Vol. 2, No. 118


AR ACCESSORIES: Bank Group Seeks Release of $19 Million
AMERISTAR: To File Chapter 11
CF&I STEEL: Retirees Could Receive Lost Benefits
CALDOR: Estimates Spending $7M For Year 2000 Fix
CANTERBURY PORT: Put Into Liquidation

DECORATIVE HOME: Sues To Enforce Calvin Klein Pact
FAMILY BARGAIN: Announces First-Quarter Operating Results
JACKSON BROOK: Search Firm Seeking Owner
L.A. GEAR: Wins Court Confirmation Of Reorganization Plan

LEVITZ: Seeks 90-Day Exclusivity Extension
LYNX GOLF: Noncompliance with Loan Covenants and Waiver
MONTGOMERY WARD: Seeks Okay Of Pact With Ha-Lo
NATIONAL HERITAGE: Settlement with Investors Insurance
ORANGE COUNTY: Release of Info on Merrill Lynch OK'd

SUBSTANCE ABUSE: Court Confirms Plan
TOWN AND COUNTRY: Plan Confirmed
UNCLE B'S BAKERY: Announces Results for the Third Quarter
ULTRAFEM: Files Motion On Sale of Assets
UNISON HEALTHCARE: Agreement in Principle With Creditors

WAY 2 CHEAP: Owners File For Bankruptcy - Company to Follow
YAMAICHI SECURITIES: Insurers Seek Repayments

AR ACCESSORIES: Bank Group Seeks Release of $19 Million
The bank group of AR and Wallet Works Inc. asked the court
to approve the release of nearly $19.4 million of the
approximately $23.8 million in proceeds from last month's
sale of the leather products maker and its retail unit.  
Bank One Wisconsin, Firstar Bank Milwaukee N.A., and Harris
Trust & Savings Bank are seeking nearly $15.5 million of
the $18.3 million of AR sale proceeds and $3.9 million
of the $5.4 million of Wallet Works proceeds. (Federal
Filings Inc., 15-June-98)

AMERISTAR: To File Chapter 11
Ameristar International Holdings Corp. has requested a halt
in trading shares of the company as the company attempts to
restructure under chapter 11, according to Reuters. The
filings follows a federal court judgment of approximately
$700,000 against the Nashville, Tenn. company, which
develops oil, gas and mining sites. (ABI 16-June-98)

CF&I STEEL: Retirees Could Receive Lost Benefits
Several hundred retirees of the old CF&I Steel may have
their lost benefits restored, according to The Pueblo
Chieftain. More than 250 steelworkers who took the
company's early retirement plan were promised $400 monthly
bonuses and stopped receiving them wen the bankruptcy
company's pension was taken over by the Pension Benefit
Guaranty Corporation, a government agency. The PBGC has
continued to pay out what was required under the company's
defined benefit plan but refused to pay the additional
bonus to the early retirees. But recently, a PBGC
spokesperson said the agency is attempting to determine
whether there is enough money to pay some of the bonuses.
CF&I filed chapter 11 in 1990. (ABI 16-June-98)

CALDOR: Estimates Spending $7M For Year 2000 Fix
Caldor Corp. expects to spend approximately $7 million to
modify its computer systems to achieve year
2000 compliance. The retailer has already identified
"significant systems" requiring modification or replacement
of existing software. Caldor also is initiating
communication with key vendors and suppliers in order to
assess their compliance efforts. (Courtesy of
The Daily Bankruptcy Review Copyright c June 16, 1998 - ABI

CANTERBURY PORT: Put Into Liquidation
The Canterbury Port and Province Credit Union has been put
into liquidation.  The credit union, which went into
interim liquidation on May 15, freezing members' savings,
was put into liquidation by Master Geoff Venning in the
High Court in Christchurch yesterday. The interim
liquidator, David Crichton, of Grant Thornton, was
appointed liquidator. Mr. Crichton said he would collect
the  credit union's loans, pay its creditors, and make
distributions to members.

At a meeting in the James Hay Theatre this week about 1000
of the credit union's 6500 members gave a clear indication
to Mr. Crichton that they preferred liquidation to a
proposal from directors for restructuring.  Mr. Crichton
told the meeting the credit union was insolvent with a
deficit of $1.2 million over assets of $7.6 million. He
pinpointed deficient lending policies, bad debts, and
trading losses for the credit union's failure.

Breaches of the Friendly Society and Credit Unions Act
included loans being granted for more than 10 years, loans
for business purposes, and for staff and directors. Bad
debts had not been written off and loan delinquency
reporting had been evaded.

Mr. Crichton said the credit union had also become involved
in land-owning activities through a company, LCS Ltd, that
had since gone into liquidation with a possible loss of
$300,000 to the credit union. A staff member's fraud  
had cost the credit union $328,000, of which only $65,000
had been ordered in reparations.

The credit union had fidelity insurance to cover cases of
fraud but its insurer had refused to pay out, citing
"slack" loan reporting procedures.   Mr. Crichton yesterday
refused to rule out legal action against the credit  
union directors and auditors. (Press-06/13/98)

DECORATIVE HOME: Sues To Enforce Calvin Klein Pact
Decorative Home sued Calvin Klein Inc. and Crown Crafts
Inc., claiming that CKI breached their licensing agreement
and Crown interfered with the contractual relationship
between Decorative Home and CKI.  "CKI's conduct was
fraudulent, manipulative and in furtherance of its long
standing plan to shift the license for the Calvin Klein
home products business to a third party rather than
continue with the Debtors," the complaint charges.  The
lawsuit seeks reinstatement of a 1994 long-term licensing
agreement, which Decorative Home claims was wrongfully
terminated in 1997, giving it the right to manufacture CKI-
licensed home accessories. (Federal Filings Inc., 15-June-

FAMILY BARGAIN: Announces First-Quarter Operating Results
Family Bargain Corp. announced financial results for the
first quarter ended May 2, 1998.  Net sales for the first
quarter increased 10.0 percent to $66.5 million, as
compared with $60.4 million reported in the comparable
period last year. Comparable store sales increased 3.3
percent over the same period of the prior year. The company
experienced a net loss in the first quarter of fiscal 1998
of  $7.1 million.

Basic loss per share before and after extraordinary items
was 88 cents and $1.44, respectively. The loss includes an
extraordinary charge of $2.8 million, net of taxes, related
to the restructuring of subordinated debt and
an unusual charge of $1.5 million associated with the
recruitment of the company's CEO.

This compares with a net loss of $2.9 million, or a 60 cent
basic loss per share, in the same period last year. The
first quarter net loss for fiscal 1998 before the
extraordinary items and unusual charges was $2.8 million,
or 58 cents per share.

Mike Searles, president and chief executive officer, said:
"We are encouraged that the results exceeded expectations
after adjusting for the charges related to the subordinated
notes and the unusual charge. During the quarter we
completed a refinancing of the company's subordinated debt.
As previously reported, the new notes replace 1993
bankruptcy reorganization notes with terms favorable to the

Searles also commented, "We look forward to completing the
recently announced rights offering. With these proceeds we
will retire $3.3 million in debt, upgrade the company's
information systems and fund future store growth."

Notice was given that on June 5, 1998, a securities class
action lawsuit was filed in the United States District
Court for the Eastern District of Wisconsin against
Harnischfeger Industries, Inc. and certain of its officers
on behalf of all persons who purchased or otherwise
acquired shares of Harnischfeger common stock at
artificially inflated prices between November 20, 1997 and
April 27, 1998.

The complaint alleged that the company misrepresented or
failed to disclose material information about
Harnischfeger's results of operations, financial condition
and weaknesses in its financial internal controls regarding
the Company's accounting for long-term construction
contracts in Indonesia.  And that as a result of such
information the stock was artificially inflated such that
persons who purchased or otherwise acquired common
stock during the Class Period were damaged by overpaying
for the stock.

On June 1, 1998 in a press release, defendants admitted
that the total charges were expected to be $257 million,
$192 million of additional costs to be recognized in regard
to long-term construction contracts, $27 million of which
related to the fourth fiscal quarter of 1997.

Plaintiff is represented in this class action by the New
York law firm of Wechsler Harwood Halebian & Feffer LLP.

JACKSON BROOK: Search Firm Seeking Owner
The search for a new owner of Jackson Brook Institute will
be handled by Quorum Health Resources Inc., which
specializes in hospital management and sales, said David
Hillman, a lawyer for the hospital.

Gary Brooks, chief executive officer of the hospital, will
be replaced by Pam Ivester of Quorum, who will run it until
a buyer is found. Brooks took over the hospital after it
filed for Chapter 11 bankruptcy protection 10 weeks ago.
(Patriot Ledger Quincy 06/09/98)

L.A. GEAR: Wins Court Confirmation Of Reorganization Plan
Judge Barry Russell of the United States Bankruptcy Court,
Central District of California, Monday confirmed a Chapter
11 Plan of Reorganization for L.A. Gear, Inc.

The plan converts roughly $60 million in pre-petition
indebtedness into a new issue of Series A Voting,
Participating, Convertible Preferred Stock. It  
also converts L.A. Gear's outstanding Series B Preferred
Stock into New Common Stock. L.A. Gear's existing
outstanding Common Stock is terminated pursuant to  
the plan.

L.A. Gear commenced the Chapter 11 case about five months
ago. "The confirmation of a plan of reorganization within a
five-month period of time is an outstanding
accomplishment," said David Gatto, chairman and chief  
executive officer of L.A. Gear. "Our successful financial
reorganization will permit us to focus on completing the
transition of our business to licensing  L.A. Gear's
valuable trademarks and trade names."

Gatto said that, "L.A. Gear now will expand its domestic
and worldwide licensing efforts to include key apparel and
accessory categories, in addition to its existing lines of
athletic footwear."

LEVITZ: Seeks 90-Day Exclusivity Extension
Seeking another 90-day exclusivity extension, Levitz said
it has continued to work diligently to develop its long-
term business plan, but the plan is not yet complete.  
"Once the long-term business plan is complete, the Debtors
will need to assess, at least preliminarily, their
performance under the business plan and to discuss the
results with their major creditor constituencies," the
retailer said. (Federal Filings Inc., 15-June-98)

LYNX GOLF: Noncompliance with Loan Covenants and Waiver
Lynx Golf, Inc. announced today that it was out of
compliance with, and not likely to meet in the future,  
minimum financial covenant requirements under terms of a
bridge loan with Union Planters Bank of St. Louis,
Missouri.  The bridge loan was originally extended
in February of this year and as of June 15, 1998 had
approximately $3,400,000 outstanding.  

The Company requested and has received a temporary waiver
with respect to such violations until June 22, 1998.  The
Company is in discussions with Union Planters with respect
to a continued waiver, extension of the maturity, and to
otherwise restructure the terms of the bridge loan. At the  
same time, the Company is engaged in discussions with
various vendors, seeking their cooperation with respect to
outstanding payables, and is engaged in discussions with a
variety of potential financing sources, both with respect
to satisfying the Company's existing obligations as well as
providing adequate capital for the Company's ongoing and
future operations.

To help deal with these issues, the Company has taken
aggressive steps to reduce its operating costs including
the layoff of 25 full time and 6 temporary employees and
has negotiated salary reductions with its senior management

Separately, the Company announced a reconstitution of its
Board of Directors and the concomitant resignations of
Richard Bonnycastle, Jon Gruber, Jim Nantz, Harry Casari,
P.A Novelly and Bette Lou Reade from the Board.
As part of the reconstitution, Paul Little, a former
Director of the Company and a principal with GTL
Securities, Inc. in Toronto, Canada, has rejoined the
Board.  The Board also includes G. Louis Graziadio III,
William D.  Dallas, PGA Tour star Fred Couples, O. Lynn
Roach, Jeffrey Silverstein, Chris Harned and Dave Schaefer.

MONTGOMERY WARD: Seeks Okay Of Pact With Ha-Lo
Montgomery Ward & Co. has reached a new agreement with
Ha-Lo Industries Inc. that would result in a net benefit of
about $1 million and may bring up to an additional $8.2
million or more over the next six years, provided that the
retailer vests in and exercises its warrants for Ha-Lo
common stock. The agreement calls for the assumption of a
prepetition contract in which Montgomery Ward agreed to buy
specialty and premium advertising products from Ha-Lo, and
restructuring of the terms of certain warrants and
registration rights of common stock issued by Ha-Lo.
(Courtesy of The Daily Bankruptcy Review Copyright c June
16, 1998)

NATIONAL HERITAGE: Settlement with Investors Insurance
A Settlement Agreement and Release was entered into in
April,1998 between Donna Lee Williams, Insurance
Commissioner of the State of Delaware, in her capacity as
Liquidator of National Heritage Life Insurance Company in
Liquidation and Investors Insurance Group, Inc., IIC, Inc.,
and Investors Insurance Corporation.  

The Agreement was  entered into as settlement of the legal
proceeding which was pending in the  United States District
Court for the Middle District of Florida whereby NHLIC  
sought to foreclose on an eight million dollar secured
subordinated debenture  payable on March 31, 1997 with
interest at eight percent payable quarterly for  which IIG
disputed and filed counterclaims as to the ownership of the
Debenture  and the amount due under the Debenture. The
Agreement was subject to a verified petition of the Court
of Chancery of the State of Delaware having jurisdiction  
over NHLIC, which was granted and the Agreement was
approved in all respects on  May 1, 1998.

ORANGE COUNTY: Release of Info on Merrill Lynch OK'd
A California appellate court upheld a lower court ruling
ordering release of grand jury testimony about Merrill
Lynch & Co.'s connection with the $1.64 billion Orange
County bankruptcy.  The county and news organizations,
including The Associated Press, sought the grand jury
transcripts to get details of the firm's $30 billion
settlement with District Attorney Michael Capizzi to end a
criminal probe.  Merrill Lynch, however, has 65 days to
appeal the decision by the 4th District Court of Appeal to
the state Supreme Court, so any release of transcripts may
be months away.

The criminal probe ended abruptly with the June 1997
settlement.  Grand jury transcripts are usually kept secret
unless an indictment is returned. The brokerage's attorneys
have argued that no judge has the authority to release
grand jury transcripts in absence of an indictment. (AP
Wire: Business-06/16/98)

SUBSTANCE ABUSE: Court Confirms Plan
Substance Abuse Technologies, Inc., a Delaware corporation
n/k/a Employee Information Services, Inc., filed for
voluntary relief under Chapter 11 of the United States  
Bankruptcy Code on September 10, 1997, in the United States
Bankruptcy Court for the Southern District of Florida.  On
November 18, 1997, SAT and Steven A. Cohen and S.A.C.
Capital Associates, LLC filed a Joint Plan of
Reorganization, which was subsequently amended. By Order
dated May 26, 1998, the Court confirmed the Third Amended
Joint Plan of Reorganization Proposed by SAT and  S.A.C.,
as Modified by the Second Modification to the Third Amended
Plan, dated  May 21, 1998. (C:States SEC-06/15/98)

TOWN AND COUNTRY: Plan Confirmed
On May 26, 1998, Town & Country Corporation of
Massachusetts' Fourth Amended Plan of Reorganization was
confirmed by the United States Bankruptcy Court for the
District of Massachusetts.

UNCLE B'S BAKERY: Announces Results for the Third Quarter
William T. Rose, Jr., chairman and chief executive officer
of Uncle B's Bakery, Inc., today announced results for the
Company's third quarter.  In making the announcement, he
noted, "Income from operations for the third quarter of
fiscal year 1998 was $305,817, an improvement of $270,390
from the $35,427 income from  operations in the second
quarter of fiscal 1998. The Company's aggressive
cost  reduction program has continued to favorably impact
the financial results since  sales in the 2nd and 3rd
quarters of FY 1998 were approximately the same."

For the third quarter, the Company reported a net loss of
$45,193 or ($0.01) per share on net sales of $3.5 million
compared to a net loss of $377,355 or ($0.10) per share on
net sales of $5.3 million for the same period of the prior
year.  This favorable change in net loss is primarily
attributable  to the cost reduction programs mentioned
previously.  The net loss for the first nine months was
$865,854 or ($0.24) per share compared to a net loss of  
$94,031 or ($0.03) per share for the same period of the
prior year.

The Company indicated that its current capital structure
must change and is discussing possible approaches with its
primary lender. On May 19, 1998, the Company's lender gave
written notice that the Company was in default of its loan
payments and the lender would pursue its legal remedies and
has demanded payment for all amounts due under the loan
agreement.  To date, the lender has not attempted to
implement any of its legal remedies,  but there can be no
assurance it will not do so in the future.

ULTRAFEM: Files Motion On Sale of Assets
Ultrafem, Inc. has signed an asset purchase agreement for
the sale, subject to Bankruptcy Court approval, of
substantially all of its assets to Akcess Pacific
Group, LLC for $5.0 million in a combination of cash and
new  indebtedness.  Pursuant to Section 363 of the United
States Bankruptcy Code, higher and better third party bids
may be submitted at a hearing to be conducted in accordance
with bidding procedures established by the Bankruptcy  
Court.  Ultrafem is requesting that the Court schedule
such a hearing to  consider competing bids as early as June
29, 1998.

UNISON HEALTHCARE: Agreement in Principle With Creditors
Unison HealthCare Corporation announced that it has reached
an agreement in principle with respect to restructuring of
the Company's debt and equity with Omega HealthCare
Investors, Inc. and representatives of Unison's $20 million
13% Senior Notes due 1999 and $100 million 12.25% Senior
Notes due 2006.

Under the agreement in principle, the treatment of
approximately $17.3 million of disputed secured claims of
entities related to Bruce Whitehead and David Kremser,
former directors of the Company, with whom no agreement in  
principle has been reached, would depend upon the results
of anticipated litigation over the possible disallowance or
equitable subordination of such claims. If such secured
claims are not disallowed or equitably subordinated to  
the claims of general unsecured creditors, the Whitehead
and Kremser related entities would receive in full
satisfaction of such claims 100% of the Class A  
Common Stock, representing approximately 7% of the fully
diluted equity, of the reorganized company.

The Class A Common Stock would have rights identical to  
those of other common shareholders in the reorganized
Company except that the Class A Common Stock would have a
$17.3 million liquidation preference over the  remaining
common stock. If such secured claims are disallowed or
equitably  subordinated, they will be canceled and will
receive nothing in the reorganization. In either event, the
holders of the 13% Senior Notes would receive approximately
$21 million in new promissory notes of the Company in  
full satisfaction of their claims, and the Company's trade
creditors and holders of the 12.25% Senior Notes would
receive pro rata distributions of approximately $4.6
million in new promissory notes and all of the Class B  
Common Stock of the reorganized Company.

The Class B Common Stock will represent approximately 79%
of the fully diluted equity of the reorganized company if
the Class A Common Stock is issued to the Whitehead and
Kremser related entities, and approximately 83% of the
fully diluted equity if the claims of the Whitehead related
entities are disallowed or equitably subordinated and
canceled. Up to 5% of the fully diluted equity of the  
reorganized entity would be allocated to management
incentive options. The Company's currently outstanding
equity would be canceled and current stockholders would
receive a pro rata distribution of warrants to purchase up  
to 5% of the fully diluted equity of the reorganized

The Company also announced that it has secured a
continuation of its accounts receivable line of
credit with HealthCare Financial Partners in the amount of
$11 million, which will be available to the Company for
vendor payments and to meet working capital requirements
during the Chapter 11 process.

The agreement in principle also provides for resolution of
all claims of Omega against the Company under lease and
mortgage arrangements affecting 20 of the Company's 51
total healthcare facilities. Omega would purchase seven  
facilities owned and operated by the Company for
approximately $40 million, yielding net cash proceeds to
the Company of approximately $18 million after  
payment in full of transaction costs and indebtedness
currently secured by such facilities.

These facilities and 10 other facilities currently leased
by Omega to the Company or subject to mortgage loans in
favor of Omega would be combined into a single master lease
at lease rates which are comparable to those currently in
effect under the existing facility leases. Six leased
facilities would be returned to Omega, and three additional
facilities subleased by the Company to another operator
would be excluded from the master lease, for which  Omega
would receive $2 million in cash and a $3 million, seven-
year promissory  note as compensation.

In addition, Omega would purchase $3 million of the
Company's new 5% cumulative preferred stock, convertible
into 4% of the Company's fully diluted equity. All
prepetition rent and mortgage payments due to Omega would
be paid.

WAY 2 CHEAP: Owners File For Bankruptcy - Company to Follow
Christopher Lott and his wife, Beth, cited debts of more
than $900,000 and assets of just more than over $200,000 in
the Chapter 7 filing.   The business is expected to make a
bankruptcy filing within a month as it organizes a list of
people it owes money to, said William Peckham, the
attorney  representing the Lotts in bankruptcy court.

Way 2 Cheap closed its two Austin stores without warning in
March. Computers customers had paid for or that were in the
shop for repair were locked in the stores.  The company
reported revenues of $7 million in 1996. Way 2 Cheap also
sold PCs by mail.

In the bankruptcy filing, the Lotts list Compass and
Norwest banks as creditors.

YAMAICHI SECURITIES: Insurers Seek Repayments
Some of the 14 life and nonlife insurers that have  
extended a total of 43 billion yen in subordinated loans to
Yamaichi Securities Co. will go to court this week to seek
repayments from the collapsed brokerage, they said Tuesday.

The insurance companies maintain that Yamaichi violated its
loan contracts with them by hiding losses.  Yamaichi
treated some 120 billion yen in unrealized securities
losses as off-the-book liabilities, according to
investigations into the brokerage's business failure.

The hidden liabilities eventually grew to 158 billion yen
and prompted Yamaichi to decide last November on voluntary
closure of operations.  Yamaichi is unable to pay back all
liabilities because it has fallen into a capital deficit of
some 20 billion yen.

The insurers have been negotiating repayment with Yamaichi,
stressing that their subordinated loans should be treated
the same as ordinary loans because the brokerage's hiding
of the loss has made the contracts invalid. The talks  
have failed to produce agreement.  Most of the 14 insurers
will eventually file suits against Yamaichi, industry  
sources said.  Yamaichi will hold a shareholders' meeting
this month to finalize its voluntary liquidation process.
(Kyodo - 06/16/98)


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