TCR_Public/980626.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, June 26, 1998, Vol. 2, No. 125


ALLIANCE ENTERTAINMENT: Court Approves Disclosure Stmt.
ANCHOR GLASS: Price Adjustment Deal Gets Approval
BIG RIVERS: LG&E Energy Receives Nod To Lease Assets                           
FPA MEDICAL: HMO Cancels Contract

FIRST UNION: Expects to Report Loss                 
FRONTIER AIRLINES: Revenue Up 26.7% in Fourth Quarter                      
GRAND UNION: Restructuring Plan OK'd by Security Holders
INTEGRAL PERIPHERALS: Investors shell out $3.5M

LEVITZ FURNITURE: Exclusivity Period Extended
LEVITZ FURNITURE: Employment Agreement Entered with Grund
MARVEL ENTERTAINMENT: Icahn Group's Claims in Question
MONTGOMERY WARD: Amended Committee List

MONTGOMERY WARD: Motion to Allow Setoffs By Bank Group
PARTY WORLD: Hearing on Conversion to Chapter 7
PHILIPPINE AIRLINES: U.S. Bankruptcy Court Issues TRO

R&S/STRAUSS: Interim DIP Hearing Reset
RELIANCE ACCEPTANCE: Objections to Confirmation of Plan
RELIANCE ACCEPTANCE: Taylor Group Amends Objections
SANYO SECURITIES: Set for Liquidation
SCHWEITZER: Creditors Want Resort Sold for $18 Million

SERVICE MERCHANDISE: DCR Downgrades Service Merchandise
SWALLOW'S NEST: Files Chapter 11
THAI FARMERS BANK: S&P Assigns CreditWatch
YAMAICHI SECURITIES: 13 Insurance Companies File Lawsuit

DLS CAPITAL PARTNERS: Bond Pricing for Week of June 22


ALLIANCE ENTERTAINMENT: Court Approves Disclosure Stmt.
Alliance Entertainment Corp.'s disclosure statement
yesterday received court approval, subject to minor changes
to be made by tomorrow.  The music distributor plans to use
the time to respond to the remaining issues raised by
the unsecured creditors' committee.  The court will
schedule a confirmation hearing date tomorrow. (Federal
Filings Inc. 24-June-98)

ANCHOR GLASS: Price Adjustment Deal Gets Approval
Anchor Resolution Corp.'s liquidating trustee has received
approval of an agreement with Consumers Packaging Inc. and
"New Anchor" that settles all purchase price adjustment
claims in connection with the sale of the former
glass maker's assets. Anchor (f/k/a Anchor Glass Container
Corp.) last year sold its assets to Consumers and Owens-
Brockway Glass Container Inc. for about $328.8 million in
cash and about $48 million in preferred and common stock of
a new entity (New Anchor)formed by Consumers.

However, Anchor sought about $76.3 million of purchase
price adjustments in its favor and New Anchor sought $96
million of adjustments in its favor.  

Under the settlement, Consumers and New Anchor will deliver
$1 million in cash to Trustee Mark Stickel and New Anchor
will transfer warrants for 1,225,000 of its common shares
to the trustee.

The 10-year warrants have an exercise price of $0.10, which
will be waived as further consideration. The stipulation
also grants Consumers warrants for 525,000 New Anchor Class
B shares and allows creditors receiving New Anchor
securities under Anchor's liquidating plan to elect four of
New Anchor's 11 directors. (The Daily Bankruptcy Review
Copyright c June 25, 1998 - ABI 25-June-98)

The court entered a final order authorizing the debtor to
obtain secured postpetition debt.  By stipulation, First
Merit Bank, NA and the debtor, BN1 Telecommunications, Inc.
agree to extend the debtor's authority to obtain post
petition financing from June 15, 1998 through July 15,

BIG RIVERS: LG&E Energy Receives Nod To Lease Assets                           
LG&E Energy (NYSE: LGE) received all but one of the
necessary approvals required from the Federal Energy
Regulatory Commission to lease the generating assets of Big
Rivers Electric Corporation, based in Henderson, Ky., for
approximately 25 years. One remaining approval from FERC -
regarding the exempt wholesale generator status of one of
LG&E Energy's affiliates in the transaction - is the final
FERC ruling needed before the transaction closes in mid-

The four coal-fired power plants owned or operated by Big
Rivers will be managed by Western Kentucky Energy, a
subsidiary of LG&E Energy, and will add 1,700 megawatts of
generating capacity to LG&E Energy's growing portfolio of  
energy assets.  The addition of the Big Rivers facilities,
combined with LG&E Energy's existing assets, gives the
company access to, or control over, more than 11,000
megawatts of power.

The Kentucky Public Service Commission approved the
transaction in principle on April 30, 1998, including a
wholesale rate reduction for Big  Rivers' four distribution
cooperatives.  Final review by the Kentucky PSC is  
expected within the next few weeks.

FPA MEDICAL: HMO Cancels Contract
Cash-strapped FPA Medical Management Inc. yesterday said
that a Florida health maintainence organization has
canceled its contract with the local company, as
FPA faces a July 8 deadline for raising funds. But a
spokesman for the company was unable to provide the name of
the HMO or the number of patients involved in
the contract.

The troubled San Diego-based managed care company said
yesterday that refinancing talks with bankers had entered
an advanced stage regarding modification of its loan

"They are crossing the T's and dotting the I's," said
Steven Seiler, the FPA spokesman. But he added there is no
guarantee that agreements will be reached before the
company is scheduled to run out of money in early July. FPA
said yesterday it has no present intention of filing for
bankruptcy protection, but might consider the possibility
later this year as part of its agreement with lenders.

The company also said it has appointed Thomas Allison its
executive vice president and chief financial officer.
Allison, who replaces Douglas Kerner and is said to have
experience with troubled companies, was formerly a partner
with Arthur Andersen LLP's Corporate Recovery practice and
had been a consultant to FPA since earlier this month. FPA
announced in May that it was running out of cash, was
losing money on some of its contracts and had overpaid by
$125 million for some acquisitions.

The announcement came seven weeks after the resignation of
Dr. Seth Flam as chief executive officer. Flam, who left
with a severance package valued at nearly $5 million,
declared the company in excellent shape at the time of his

Last week, FPA, whose annual revenues exceed $1 billion,
was unable to make a $2.6 million interest payment due on
its debentures. The company also confronted reports from
the state medical society and others that it is failing
to pay some doctors.

FPA said again yesterday that it is unaware of debts to
doctors that exceed 60 days. Under its contracts with HMOs,
FPA provides physician care to 1.4 million patients through
a network of 8,000 doctors. Health Net said last week it is
bypassing its agreement with FPA in certain cases and
paying doctors directly to insure continuity of quality

Santa Ana-based PacifiCare, an HMO that earlier said it
would increase payments to FPA in Nevada to ease its
financial crisis, said it is continuing to monitor the care
FPA is providing but has not received a "disproportionate"
number of complaints from patients.

A spokeswoman for PacifiCare was unsure if the HMO had also
chosen in some cases to bypass FPA and pay doctors
directly. The price of FPA shares, meanwhile, closed at
$1.44 yesterday, up 50 cents, on the Nasdaq Stock Exchange.
The shares remain far from their 52-week high of $40, which
was reached late last year.

FPA reported a net loss in the first quarter of this year
of $9.1 million, or 20 cents per share, on revenues of $392
million. (San Diego Union And Tribune; 06/23/98)

FIRST UNION: Expects to Report Loss                 
Cleveland-First Union Real Estate Investments here, which
just recently saw the end of a protracted proxy contest for
its control, said last week that it expects to report a
substantial second quarter loss as a result of significant
one-time charges.

The real estate investment trust said that the net loss
will total $18.8 million, or 60 cents per share.
According to First Union, the loss is the result of, "among
other things, extraordinary (one-time) expenses recognized
in the second quarter of the year of approximately $17.5
million incurred in connection with the recent proxy
fight and in connection with the change in control that
occurred resulting from the former Trustees' unwillingness
to approve the nomination or election of the nominees
proposed by Gotham Partners, LP."

For nearly a year, from the middle of last summer until
this past May, First Union's board of trustees engaged in a
fight for control of the company with Gotham Partners, LP,
a New York-based limited partnership that was one of the
REIT's largest shareholders.

According to First Union, included in the one-time $17.5
million hit related  to the proxy fight is $3.2 million for
the REIT's proxy fees, $3.4 million in cash severance pay
to Mr. Mastandrea plus the vesting of 128,000 shares of
restricted stock, $5.0 million due to lifting restrictions
on restricted shares which followed the change in control
of the REIT, a $2.25 million reserve for a contract to
purchase a parking facility in San Diego and a $3.1 million
reimbursement of Gotham's proxy expenses and legal fees, a
charge that Gotham has agreed to postpone until First
Union's financial condition improves.

In addition, First Union's new board of trustees received a
default notice last week from National City Bank, the
administrative agent for the lenders under the REIT's $125
million credit facility. (National Mortgage News-24-June-

FRONTIER AIRLINES: Revenue Up 26.7% in Fourth Quarter                              
Frontier Airlines Inc., (FRNT: Nasdaq) narrowed its loss
and grew its revenue after its chief competitor, Western
Pacific Airlines, met its fate in bankruptcy court.
On Tuesday, Denver-based Frontier said its revenues rose
26.7 percent to nearly $42 million in its fourth quarter
ended March 31.

The airline posted a loss of more than $2 million for the
quarter, but it was a sharp improvement of the $3.3 million
it lost during the same period last year. The airline also
said it achieved a profit over the month of March.
Frontier President Sam Addoms noted the improvements
followed WestPac's demise in February.

"Until then, the market had been supersaturated by Western
Pacific, and at deep-discount prices," he said.
For the year, however, Frontier remains deep in the red.
The airline said it lost more than $17.7 million, or $1.95
a share for the year ended March 31.  That compares to a
loss of $12.2 million, or $1.49 per share during the same
period a year ago.

Frontier's revenue's for the latest fiscal year rose 26.3
percent to more than $147 million. (Rocky Mountain News -

GARNET RESOURCES: Signs Merger Agreement with Aviva
Garnet Resources Corporation (OTC Bulletin Board: GARN) and
Aviva Petroleum Inc. (Amex: AVV; London: AVP) announced
today that they have signed an Agreement and Plan of
Merger. Shareholders of Garnet will receive one share of
Aviva common stock for each ten shares of Garnet  
common stock that they hold.  Garnet shareholders holding
less than l,000 Garnet shares or who would receive
fractional Aviva common shares after the exchange will
receive cash in the amount of $0.02 for each Garnet share
held.  Garnet shareholders entitled to receive Aviva common
stock will be issued one Aviva depositary share for each
five shares of Aviva common stock that they receive as a
result of the merger.  The Aviva depositary shares trade on
the American Stock Exchange under the symbol "AVV".

Aviva also announced that it has entered into Debenture
Purchase Agreements with the holders of $15 million in
principal amount of Garnet's outstanding 9 1/2% Convertible
Subordinated Debentures due December 21, 1998, providing
for the acquisition of the Debentures for an aggregate of
approximately 12.9 million shares of Aviva common stock.  
The acquisition of the Debentures is a condition to Aviva's
obligation to consummate the merger. Aviva has reached  
agreement in principle with its bank lender regarding the
terms of a $15 million credit facility.  The loan proceeds
will be used to refinance the outstanding bank debt of
Aviva and Garnet.  The refinancing of such bank debt is
also a condition of Aviva's obligation to consummate the

Completion of the merger is planned to take place during
the third quarter of this year and is subject to various
contingencies including the execution of a definitive
credit agreement and the approval of the merger by the  
shareholders of Aviva and Garnet.  A Joint Proxy Statement,
to be filed shortly with the Securities and Exchange
Commission, will be sent to shareholders of both companies
prior to special meetings of the shareholders of each
company to be called at a later date.

The Bookstore Debtors of Gaylord Companies, Inc. filed an
Emergency Motion for continued use of cash collateral.
United Magazine Company ("Unimag") is filing a response to
address issues raised in that motion.

The Bookstore Debtors infer that Unimag may refuse to
proceed with the clsoing fo the Unimag Plan.  Unimag states
that the Bookstore Debtors fail to inform the ocurt that a
material adverse change has occurered in the level of the
debtors' non-consignment inventory, which gives Unimag the
right to withdraw its plan.  Unimag is awaiting a
reconciliation of the Ingram consignment inventory to
determine whether it is feasible to proceed with the Unimag
Plan in its current form.

GRAND UNION: Restructuring Plan OK'd by Security Holders
The Grand Union Company announced that it has received
overwhelming  approval from its Senior Noteholders and
preferred stockholders for its  previously announced plan
of reorganization with holders of more than 72% of
its Senior Notes and all of its preferred stockholders
voting in favor of the plan.

Of those voting, holders of more than 99% of the Senior
Notes voted in favor of the plan. As a result, the Company
commenced a voluntary, prepackaged Chapter 11 proceeding
today in the U.S. Bankruptcy Court in Newark, N.J.

As previously announced, the Company's restructuring is
being effected through a voluntary, prepackaged Chapter 11
proceeding. Trade vendors will be unimpaired and will
continue to be paid in the ordinary course of business.
In conjunction with the plan, Grand Union has signed a
firm, underwritten commitment letter from Swiss Bank
Corporation and Lehman Commercial Paper, Inc., for a $300
million credit facility.

The Company currently operates 222 retail food stores in
six Northeastern states.

INTEGRAL PERIPHERALS: Investors shell out $3.5M
A San Francisco-based investment group acquired the assets
of Integral Peripherals Inc. out of Chapter 11 bankruptcy
protection for nearly $3.5 million.

Asian Pacific Growth Fund II LP, an affiliate of high-tech
investors Hambrecht & Quist, brought all of Integral's
assets into the new company, Mobile Storage Technology Inc.
All but two of Integral's 50 employees joined the resulting
new company, which occupies Integral's office space.

The Boulder-based Integral Peripherals, which manufactures
hard disk drives for portable computers, filed Chapter 11
on March 9, 1997, reporting assets of $51.3 million and
liabilities of $25.1 million.

If creditors reach an agreement, they could likely be paid
in three to four months. If an agreement isn't reached,
Markus said Integral would likely convert to Chapter 7 and
it could take years to settle the case.

Mobile Storage Technology purchased all of Integral's
assets including its intellectual property, technology
rights and existing contracts with IBM Corp., Toshiba Corp.
and Quantum Corp. Sources close to the company said the
company intends to carry on work begun at Integral.
(Denver Business Journal - 06/19/98)

International Precious Metals Corp., the Toronto company
that claimed to have found gold in the desert west of
Phoenix, Friday announced that it has filed for
reorganization in U.S. Bankruptcy Court in Phoenix.

Company spokesmen could not be reached for comment.

IPM, which had been exploring its Black Rock property 90
miles west of Phoenix for four years, long claimed that
standard procedures fail to accurately measure its find.
The mining company had reported a $4.84 million  
net loss last year, and its stock was was de-listed this
spring by the Nasdaq stock market. (Arizona Republic -

LEVITZ FURNITURE: Exclusivity Period Extended
Judge Farnan granted the motion of Levitz Furniture,
extend the exclusive period during which to file a plan of
reorganization.  The period during which to file a plan
will expire on August 30, 1998, and the exclusive period
during which to solicit acceptances of such plan will
expire on October 30, 1998.  (Levitz Bankruptcy News 24-

LEVITZ FURNITURE: Employment Agreement Entered with Grund
Subject to Court approval, the Debtors have entered into an
Employment Agreement with Edward L. Grund, newly hired as
their new President of Store Operations.  Mr. Grund's
hiring, the Debtors say, completes their senior
management team. (Levitz Bankruptcy News 24-June-98)             

MARVEL ENTERTAINMENT: Icahn Group's Claims in Question
Charging the "Icahn Group" with abusing its control of
Marvel and its holding companies to drive down secured bank
claim prices, Dickstein Partners Inc. asked the court to
disallow or equitably subordinate the group's
claims.  Dickstein alleged that the Icahn Group (Carl
Icahn's High River Limited Partnership, Westgate
International L.P., and their affiliates) "repeatedly
attempted to buy secured bank claims at prices depressed by
the Icahn Group's own control of the Debtors."  The Icahn
Group used its control to litigate against the banks each
time they refused to sell their claims, "wreak[ing] havoc
on the claims of those who would not sell," according to
Dickstein. (Federal Filings, Inc. 24-June-98)

MONTGOMERY WARD: Amended Committee List
The U.S. Trustee for Region III makes the following
appointments to the Official Committee of Unsecured
Creditors appointed in the Debtors' cases:

     Credit Lyonnais
     The Bank of New York
     The Bank of Nova Scotia
     NationsBank, N.A.
     Maytag Corp.
     White Consolidated Industries, Inc.
     Franklin Corporation
     Whirlpool Corp.
     John Hancock Mutual Life Insurance Co.
     Simon DeBartolo Group, L.P.
     Union Bank of Switzerland

*** Accordingly, MTD Products has resigned, replaced by
Franklin. (Montgomery Ward Bankruptcy News 24-June-98)

MONTGOMERY WARD: Motion to Allow Setoffs By Bank Group
The Debtors tell the Court that, at the Petition Date,
certain members of the Prepetition Bank Group held
$27,391,397 of the estates' money on deposit in
their institutions for various reasons.  Upon the filing of
the Debtors' chapter 11 petitions, the Banks immediately
froze all bank accounts holding these funds.  The Banks
asserted a right of setoff against $1,058,700,000
owed under the Prepetition Credit Agreements.

The Debtors have considered the Banks arguments and now
request that the Court modify the automatic stay to the
extent necessary to permit the Banks to setoff these funds
against amounts which the Banks are owed. (Montgomery Ward
Bankruptcy News 24-June-98)

The National Minor Football League, a non-profit
organization that operated for three years in Charlotte,
N.C., has filed for chapter 7 protection with
liabilities of more than $86,000 owed to more than 40
creditors, including 14 former team owners, The Business
Journal of Charlotte reported. The professional league once
had 35 teams, and it was to be used as a farm system for
the National Football League.  League founder Ronnie DeLapp
said the end for the league really came last year when the
NFL bought out the former World League of American Football
and renamed it NFL Europe with plans to use it exclusively
for NFL player development. A hearing is scheduled for July
14. (ABI 25-June-98)

PARTY WORLD: Hearing on Conversion to Chapter 7
On September 16, 1998 the court will conduct a status
conference hearing in the case of Party World, Inc. and
Party America, Inc. and the court will conduct a hearing on
the court's order to show cause why the cases should not be
converted to Chapter 7.

Beleaguered Philippine Airlines Inc (PAL) said it was
having trouble finding buyers for 13 planes it was trying
to sell to raise desperately needed cash.  Other Asian
airlines such as Cathay Pacific Airways Ltd and Malaysian  
Airline Systems Bhd were also selling their jets as part of
cutbacks following the Asian financial crisis, Zapanta

Apart from sales, it will also terminate leases on 27
aircraft and is trying to cancel the delivery of nine
planes due this year from manufacturers Airbus Industrie
[ARBU.CN] and Boeing Co. PAL said it wanted to cancel an  
order for four 747-400s from Boeing and five A320s from
Airbus. (Reuters: International - 06/25/98)

PHILIPPINE AIRLINES: U.S. Bankruptcy Court Issues TRO
The Philippine Securities and Exchange Commission (SEC) and
a U.S. bankruptcy court have barred banks, suppliers,
leasers and other parties from pressing their claims
against the cash-strapped Philippine Airlines (PAL), a
newspaper reported Wednesday.

PAL legal counsel Estelito Mendoza was quoted by the Manila
Times as saying Tuesday that a U.S. bankruptcy court has
issued a temporary restraining order barring all persons or
entities anywhere in the U.S. from pursuing or enforcing
claims against PAL.

The order was issued by the bankruptcy court in the
northern district of California in response to PAL's
petition against American firm Aviation Sales
Leasing Co., one of PAL's aircraft leasers, which had filed
for claims against the airline. The U.S. bankruptcy court's
order, which effectively restrains PAL's US- based
creditors from seizing any of the airline's assets, will be
effective until July 2.

In Manila, the SEC also issued an order suspending all
claims pending before any local court or body against the
debt-ridden and strike-crippled national flag carrier.
Mendoza said if PAL encounters a similar problem with its
creditors in Europe, the company will also seek the same

The SEC on Tuesday created a receivership committee to take
custody of all existing assets and properties of PAL and
discuss a rehabilitation program filed by the company last
Friday.  PAL said in the petition that it was unable to pay
a total of 2.1 billion dollars in debt due to its
deteriorating financial situation aggravated by the
ongoing strike of its pilots.

The devastating strike of some 600 PAL pilots, which
entered the 21st day Wednesday, has cost PAL more than 2
billion pesos (50  million dollars) in lost revenue, PAL
said. (Xinhua English Newswire - 06/24/98)

R&S/STRAUSS: Interim DIP Hearing Reset
The court reset for Friday the interim hearing on
R&S/Strauss Inc.'s $25 million DIP financing agreement with
Congress Financial Corp.  "Balancing [R&S's] desire to
obtain postpetition financing on the best terms possible
with the need to obtain chapter 11 protection as
expeditiously as possible, the Debtors considered several
prospective postpetition lenders. . . The Debtors concluded
that the Congress proposal (as embodied in the Financing
Agreements) was the most advantageous financing available,"
the auto parts retailer said. (Federal Filings Inc. 24-

RELIANCE ACCEPTANCE: Objections to Confirmation of Plan
The Curnyn-Graham Shareholders are Reliance shareholders
who filed suits against the Taylor Defendants and others
for injuries to shareholders from violation of the federal
securities (and other) laws during the course of the Split-
Off Transactions.

The Curnyn-Graham Shareholders object to the debtor
contracting for a servicer choosing to liquidate all or
some of the existing finance contracts.  Proceeds from the
contracts will be distributed to creditors and shareholders
as specified in the "liquidating" plan.

The shareholder also complain that Reliance intends to have
an estate representative prosecute the litigation on
Reliance's behalf, instead of allowing the Curnyn-Graham
shareholders to prosecute the claims they have asserted on
their own behalf.

In addition, the shareholders request that the court retain
jurisdiction of the settlement or compromise of claims by
the estate representative so that the shareholders who
request notice should be given the opportunity to object.

The shareholders also claim that there is an improper
injunction enjoining shareholders from pursuing claims
against directors and officers.

RELIANCE ACCEPTANCE: Taylor Group Amends Objections
Jeffrey W. Taylor, Bruce W. Taylor, the Taylor Family
Partnership and Taylor Capital Group, Inc., (The Taylor
Group) object to the fourth amended joint plan of
reorganization proposed by the debtors, Reliance Acceptance
Group, Inc., et al.

The Taylor Group objects to the permanent injunction on all
claimants who may seek to enforce their rights against all
officers and directors of the debtors who served on or
after the Petition Date.  They also state that the plan
violates the absolute priority rule.  The holders of equity
interests are allowed to retain those interests under the
plan, and they are eligible to receive other proceeds under
the plan, all in violation of the absolute priority rule
because higher classes are impaired.  The Taylor Group
states that the plan is not proposed in good faith, and
that it is not in the best interests of creditors.

SANYO SECURITIES: Set for Liquidation
The Japanese brokerage Sanyo Securities has abandoned
restructuring efforts and plans to halt its business. But
the securities company is still negotiating about a
possible buyout with a foreign financial company that Sanyo
refused to name. Sanyo applied for court protection from
creditors last November as it sought to rebuild its
operations under a corporation rehabilitation law. If no
agreement is reached with the unnamed foreign financial
suitor by August, Sanyo will likely dissolve the business
by the end of that month. In March, Sanyo's liabilities
exceeded its assets by some $750 million, largely as a
result of bad loans held by affiliated companies.

SCHWEITZER: Creditors Want Resort Sold for $18 Million
A group of 200 creditors, owed millions of dollars by
bankrupt Schweitzer Mountain Resort, wants the ski hill
sold to a Seattle firm to recoup some of  their cash.
The creditors recently filed a formal reorganization plan
in bankruptcy court. It basically asks a judge to approve
selling the resort to Harbor Properties Inc. for $18

"Right now there is great support and consensus from all
the creditors on the plan," said Maggie Lyons, Schweitzer's
chief financial officer. "The momentum couldn't be better
to get some closure to this. Eighteen million is a  
very fair price for the mountain." The only other solid
offer made for the resort was for $12 million.

Schweitzer is about $28 million in debt. The bulk of that,
$21 million, is owed to U.S. Bank. Under the creditors'
proposal, the bank would be repaid about $15 million.

There is a July 9 hearing in bankruptcy court to review the
sale proposal. (Spokesman Review-06/20/98)

SERVICE MERCHANDISE: DCR Downgrades Service Merchandise
Duff & Phelps Credit Rating Co. has downgraded its ratings
of Service Merchandise Company, Inc. (NYSE: SME) senior  
notes to 'B' (Single-B) from 'B+' (Single-B-Plus) and
senior subordinated  debentures to 'B-' (Single-B-Minus)
from 'B' (Single-B). Debt affected by this  rating action
totals approximately $314 million. DCR also lowered its
rating  on SME's bank facilities to 'BB-' (Double-B-Minus)
from 'BB' (Double-B) despite the facilities being heavily
secured by all unpledged assets of the company.   The
rating downgrade of the bank facility reflects the
considerable decline in operating results combined with an
uncertain future.

Over the past five years, decreasing sales and EBITDA
margins have lead to a significant deterioration in credit
protection measures.

SWALLOW'S NEST: Files Chapter 11
Swallow's Nest, Seattle, has filed for chapter 11
protection,listing assets of $237,000 and liabilities of
about $800,000, including a total of $126,000 in secured
claims, according to the Puget Sound Business Journal. The
outdoor clothing and gear retailer posted a loss of $96,000
for the first six months of the year. The 26-year-old
company has faced stiff competition from REI, based in
Kent, Wash., according to observers, but Swallow's Nest
President and principal owner Stan Reeve said the
competition wasn't the problem, but rather it was a 1995
catalog venture. In addition, Reeve said a Japanese joint
venture the company has pursued for over a year has
contributed to its financial difficulties. The Japanese
company went bankrupt in January 1997. (ABI 25-June-98)

THAI FARMERS BANK: S&P Assigns CreditWatch
Standard & Poor's today placed its double-'B' long-term
rating and its single-'B'-plus subordinated debt rating on
Thai Farmers Bank Public Co. Ltd. (TFB) on CreditWatch with
negative implications, following the bank's announcement of  
plans to acquire and restructure Phatra Thanakit Public Co.
Ltd. (PHATRA).

TFB's short-term rating is affirmed at 'B'. At the same
time, the 'double-'B'- minus/B' ratings of PHATRA have been
placed on CreditWatch with developing  implications.

The placement of TFB's ratings on CreditWatch with negative
implications reflects Standard & Poor's concerns over the
financial impact of the bank's planned acquisition of
PHATRA, Phatra Securities Co. Ltd. (PTSEC), and Thai
Farmers Asset Management Co. Ltd. (TFAM); and the potential
obligations stemming from the guarantee line of baht (Bht)
29.4 billion given to PHATRA's promissory notes and
negotiable certificates of deposit (NCD) holders.

TFB's decision to restructure PHATRA (Thailand's largest
finance company, with total assets of approximately Bht59.5
billion, or 8% of TFB's asset base) and its related
companies stems from a continuing weakening of economic and
operating conditions in Thailand.

Adding to concerns was a further deterioration in PHATRA's
asset quality, with nonperforming loans rising to Bht20.82
billion, or 36% of total loans, in June 1998.

YAMAICHI SECURITIES: 13 Insurance Companies File Lawsuit
Thirteen Japanese insurance companies jointly filed a
lawsuit against Yamaichi Securities Co., seeking repayments
of loans totaling some 41 billion yen on grounds the
defunct brokerage violated loan contracts, officials said.

Eleven life insurers -- including Yasuda Mutual Life
Insurance Co., Dai-ichi Mutual Life Insurance Co., Asahi
Mutual Life Insurance Co. and Fukoku Mutual Life Insurance
Co. -- and three nonlife insurers have extended
subordinated loans to Yamaichi.  Of the three nonlife
insurers, Tokio Marine and Fire Insurance Co. earlier filed
a loan repayment suit against Yamaichi.

According to the suit the 13 companies provided Yamaichi
with some 41 billion yen in subordinated loans. But after
Yamaichi collapsed in November, it turned out that the
Tokyo-based brokerage held considerable off-the-book debts
and marked some 20 billion yen in capital deficit for the
year ended in March 1998.

The lenders are claiming they would not have extended loans
had Yamaichi made appropriate disclosure on its business
conditions.  On these grounds, they charge that the loan
contracts were invalid and that Yamaichi is obliged to
repay subordinated loans as it is for other types of
loan. (Kyodo News; 06/24/98)

DLS CAPITAL PARTNERS: Bond Pricing for Week of June 22
Following are indicated prices for selected issues:

Amer Telecasting  0/14 1/2 '04        24 - 26
Asia Pulp & Paper 11 3/4 '05          90 - 91
APS 11 7/8 '06                         8 - 12 (f)
Boston Chicken 7 3/4 '04              18 - 19
Brazos 10 1/2 '07                     66 - 69
Brunos 10 1/2 '05                     14 - 17 (f)
CAI Wireless 12 1/4 '02               22 - 24
Cityscape 12 3/4 '04                  40 - 42 (f)
E & S Holdings 10 3/8 '06             73 - 75
Grand Union 12 '04                58 1/2 - 59
Greate Bay 10 7/8 '04                 85 - 86 (f)
Harrah's Jazz 14 1/4 '01              29 - 31 (f)
Hechinger 9.45 '12                    73 - 75
Levitz 9 5/8 '03                      50 - 52 (f)
Liggett 11 1/2 '99                    68 - 72
Mobilemedia 9 3/8 '07                 33 - 35 (f)
Penn Traffic 9 5/8 '04                35 - 36
Royal Oak 11 '06                      82 - 84
Service Merchandise 9 '04             74 - 75
Trump Castle 11 3/4 '03           92 1/2 - 94
Zenith 6 1/4 '11                      32 - 34


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
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Information contained herein is obtained from sources
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          * * *  End of Transmission  * * *