TCR_Public/980727.MBX T R O U B L E D   C O M P A N Y   R E P O R T E R
       Monday, July 27, 1998, Vol. 2, No. 145

AR ACCESSORIES: Union Pact Could Speed Plan
APS HOLDING: Panel Sues Lenders To Void Liens
ALLIANCE ENTERTAINMENT: Concord Seeks Exclusivity Extension
AMERICAN PAD: Announces Second Quarter Results
BOSTON CHICKEN: Renegotiates Senior Credit Facility

BOYDS WHEELS: May Return to Business
BROOKE GROUP LTD: Consulting Agreement with J. Sauter
CAI WIRELESS: Complicated Restructuring Agreement
COLOR SPOT NURSERIES: Put on S&PWatch Negative
DAEWOO CORP: Long-term Foreign Currency Rating Lowered

DATA 1 INC: Order Denies US Trustee's Motion
FPA MEDICAL: Eliminates Value of Stock
FPA MEDICAL: Files Current Report with SEC
GEOTEK COMMUNICATIONS: Files Reorganization Plan
KIA MOTORS: Ford, Daewoo Motor and Hyundai Submit Bids

LAKE CORP: GE Capital Enters Into Definitive Agreement
MARVEL ENTERTAINMENT: Last Date to File Proofs of Claim
MEGO MORTGAGE: Stock Ownership Reported
MILFORD RESOLUTION: Hearing to Consider Disclosure Stmt
NANTUCKET INDUSTRIES: Operating Results for Fiscal Year

PEGASUS GOLD: Files Plan with Court
PHELPS TECHNOLOGIES: Authority to Employ Attorneys
PHOENIX INFORMATION: Committee Objects to Extension of
ROSS TECHNOLOGY: Agreement to Sell BridgePoint


AR ACCESSORIES: Union Pact Could Speed Plan
GROUP INC. (X.AAG) - A compromise is close between AR
Accessories Group Inc. and the union that would resolve a
number of pending issues in the case, paving the way for a
liquidating plan within weeks. A motion to compromise
union, administrative, priority, and secured claims, as
well as a motion to reject the union's collective
bargaining agreement, are likely to be resolved during an
Aug. 3 hearing. (Federal Filings Inc. 24-July-98)

APS HOLDING: Panel Sues Lenders To Void Liens
APS Holding's creditors' committee has sued the
company's prepetition lenders to void their liens on and
security interests in certain prepetition collateral. The
panel alleged that the lenders illegally converted their
$227.6 million prepetition claim into a superpriority
administrative claim secured by virtually all of the auto
parts distributor's assets, according to the complaint,
recently entered on the court docket. (Federal Filings Inc.

ALLIANCE ENTERTAINMENT: Concord Seeks Exclusivity Extension
Concord Records, Inc., a subsidiary of Alliance
Entertainment, is seeking a 60 day extension, to and
including September 30, 1998, of the period for exclusively
filing a plan of reorganization.

The extension is expected to provide Concord with an
adequate opportunity to complete plan negotiations and
develop a consensus around a feasible plan of
reorganization.  The debtors state that since filing for
bankruptcy protection, the debtors generally have taken
great strides in stabilizing their operations, identifying
profitable businesses and commencing the sale or
liquidation of non-core operations.

AMERICAN PAD: Announces Second Quarter Results
American Pad & Paper Company announced that James W. Swent,
III, has been appointed Chief Executive Officer and a
member of its Board of Directors. Robert C. Gay, a Managing
Director of Bain Capital will become Chairman of the Board.
The Company also announced that Russell M. Gard is stepping
down as President and Chief Operating Officer, but will
continue his duties as Vice Chairman and a member of the
Board of Directors.

American Pad & Paper Company announced on July 9, 1998 that
its bank group has given the Company a 30-day waiver while
it seeks to negotiate a permanent amendment to its current
lending agreement.  Based on preliminary second quarter
results, the Company is in violation of certain financial
covenants of the current facility.

On July 16, 1998 American Pad & Paper Company reported
financial results for the second quarter and six months
ended June 30, 1998.

For the second quarter the company reported a net loss of
$55.9 million, or $2.02 per share, on net sales of $146.7
million.  The net loss includes approximately $41.0
million, or $1.48 per share, in the write-down of goodwill
associated with the Shade/Allied continuous forms business.  
The write-down of goodwill does not affect cash.  Year to
date, the company reported a net loss of $58.0 million, or
$2.09 per share, on net sales of $308.3 million.  As of
June 30, 1998, the company reported it had a net working
capital of $163.6 million, including cash of $31.4 million.

Comparable period results for the second quarter 1997 were
net income of $4.7 million, or $.16 per share, on net sales
of $167.2 million.  For the first six months of 1997 net
income was $8.7 million, or $.30 per share, on net sales
of $317.0 million.

AP&P also announced it has retained the management
consulting firm Bain & Company and the investment banking
firm Goldman Sachs & Company to assist the company in
evaluating its current position in the marketplace and
setting the Company's long-term strategic direction.

BOSTON CHICKEN: Renegotiates Senior Credit Facility
Boston Chicken Inc. has obtained $39.3 million in financing
from its senior lenders and retained an investment banking
firm to restructure its debt of more than $800 million.

The new loan, which was announced last week, will be used
to pay off $9.1 million of a $10.7 million deferred loan
payment, and for working capital and  refinancing and
restructuring costs. The latest loan and $219 million in
other senior debt will be due Oct. 17.

The firm of BT Alex Brown will renegotiate the rest of the
restaurant chain's debts.

J. Michael Jenkins, who took over as chief executive in
May, says he also will consider selling real estate
holdings, which amount to $100 million, and then leasing
back the stores.(Gazette-07/20/98)

BOYDS WHEELS: May Return to Business
Boyd Coddington, the founder of Boyds Wheels Inc. said that
he hopes to return to business later this year as a
streamlined, more profitable, version of the  
company that went bankrupt less than three years after it
initially sold stock  to the public.

Under the reorganization plan, unsecured creditors would
get a 12 percent stake in the company.

The new Boyds would make custom wheels, design hot rods and
sell auto-care products. The company hopes to have about 40
employees (90 percent fewer than before bankruptcy), sales
of about $10 million, and a first-year profit of about $2
million. Most manufacturing would be done overseas.

If creditors and the court approve the proposal, the
company could return as soon as Dec. 1.

If the company is revived, creditors would be a minority
shareholder. A group led by Coddington hopes to own about
85 percent of the company, while present shareholders would
get about 3 percent. The stock trades over the  
counter for about 7 cents a share. At its peak in early
1996, the stock traded for more than $16.50 a share.
(Orange County Register - 07/21/98)

BROOKE GROUP LTD: Consulting Agreement with J. Sauter
Brooke Group Ltd. entered into a Consulting Agreement with  
J. Sauter Enterprises, Inc., a Florida corporation.

The Company shall pay the Consultant 24 quarterly payments
of $94,000 each or such greater or lesser amount which,
when taxed at the highest individual marginal federal
income tax rate, will yield to Consultant's shareholder(s)
$57,500 after payment of such taxes with respect to such

CAI WIRELESS: Complicated Restructuring Agreement
CAI Wireless Systems Inc., hired an investment  
banking firm in Los Angeles and New York to assess its
reorganization plan for the holders of $275 million in
company bonds. The plan would give the note holders 91
percent of the ownership in CAI. Investment banking firm BT
Alex Brown is seeking to find additional financing as well.

If this group fails to approve the reorganization plan,
which has a deadline of July 28, the company will be unable
to go forward with a so-called "prepackaged" bankruptcy
reorganization plan.

So far, the company has not secured approval from the bond
holders. It has said in government filings it showed the
plan to a majority of bond holders. It also has said it
would not accept a counterproposal from some debt holders,  
which calls for higher interest rates than the company had
been offering.

The reorganization plan also provides no compensation for
common stock holders, who have seen their investments drop
from a high of more than $20 a share several years ago to a
few cents. CAI stock closed at 5 1/2 cents, up   
1/2 cent on Monday. The company is facing shareholder

Standard & Poor's recently downgraded CAI debt to a "D"  
rating, its lowest. In that report, S&P raised questions
not only about CAI but about others in the industry.

The ratings agency said the current business of wireless
transmission of analog multichannel television signals is
not competitive with existing cable or direct broadcast
satellite offerings.

CAI said in a news release last month that it has arranged
for $60 million of so-called debtor-in-possession financing
that could be used after a bankruptcy filing. Of that
total, $48 million will be used to repay loans. (Times

COLOR SPOT NURSERIES: Put on S&PWatch Negative
Standard & Poor's today lowered its corporate credit and
bank loan ratings of Color Spot  Nurseries Inc. to single-
'B'-minus from single-'B'-plus.

The ratings on the company's subordinated debt and
preferred stock were lowered to triple-'C' from single-'B'-

Additionally, the ratings are placed on CreditWatch with
negative implications.

The company had $141 million of debt outstanding as of
March 26, 1998.  In March 1998, the company was in default
of their credit agreement and subsequently received a
waiver for the March test period. Currently, Color Spot  
has $23 million outstanding under its credit
agreement. Under the current agreement, the company must
reduce its working capital line borrowings to under  $15
million for a 30-day period between the months of July
through September.

Standard & Poor's believes the company will be in violation
of the terms of its credit agreement in the fourth quarter
of fiscal 1998. Also, it is unclear at this time whether
enough cash will be generated in the fourth quarter to meet
the clean-down requirements. Standard & Poor's will
continue to monitor developments, including bank

DAEWOO CORP: Long-term Foreign Currency Rating Lowered
Standard & Poor's lowered the long-term foreign currency
rating of Daewoo Corp. to single-'B' from single-'B'-plus.
The rating remains on CreditWatch with negative

The downgrade reflects the difficult business environment
surrounding Daewoo as  well as the company's worsening
financial profile, Standard & Poor's said.  "Daewoo's
construction and automobile businesses in Korea are
suffering from rapidly contracting demand under current
economic conditions."

Fairly solid results from Daewoo's machinery export trading
and from the shipbuilding activities of a subsidiary would
be insufficient to offset the sluggish performance of
operations at home. Moreover, Daewoo's continued  
investments in emerging markets face greater risks in light
of growing political and economic uncertainties in the
Asian region.

Daewoo's sizable debt burden has grown as a result of the
company's aggressive investment strategy in recent years
coupled with the won's sharp depreciation in 1997, Standard
& Poor's said. Consolidated net debt stood at Korean won
(W) 24 trillion at the end of 1997. Funds from operations
covered less than 10% of  net debt for the year, while
pretax net interest coverage was low at around 2.0  times.

The rating remains on CreditWatch with negative
implications, reflecting lingering concerns about Daewoo's
business and financial profile over the near  
term. As with other major Korean industrial groups
(chaebol), the Daewoo Group is taking steps to restructure
its business and financial organization. At present,
however, Daewoo's success in implementing this
restructuring plan is not assured.

Meanwhile, widespread corporate sector restructuring in
Korea could sink the nation's economy into further turmoil.
In addition, Daewoo is expected to participate in the
auction of failed automaker Kia Motors Corp. If it wins the  
bid, Daewoo could experience further deterioration in its
financial profile given the extremely unfavorable market
for automobiles in Korea. (Futures World-07/24/98)

DATA 1 INC: Order Denies US Trustee's Motion
The United States Trustee's Emergency Motion to Reconsider
the final oreder confirming the debtor's second amended plan
of reorganization is denied. Parties in interest have 20
days to file an objection solely to paragraph 14 of the final
order confirming the debtor's plan. The paragraph states:

"On and following the Effective Date, neither the debtor, nor
any of their respective officers, directors, employees or agents
(acting in such capacity), nor Memory One, Inc., nor TBF
and Carl Smith, nor any professional persons employed by
any of them shall have or incur any liability or obligation
to any person for any action taken or omitted to be taken
in connection with or related to the formulation, preparation,
dissemination, implementatin, confirmation or consummation of
the Plan, the related Disclosure Statement, or any contract, release
or other agreement or document created or entered into or any other
action taken or omitted to be taken in connection with the plan
or in connection with this bankruptcy case."

FPA MEDICAL: Eliminates Value of Stock
FPA Medical Management Inc. is the most disastrous case of
a big health-care company that grew so fast it
lost track of costs and could not pay doctors for their

Several Wall Street analysts said the filing signaled the
end of the company.

FPA shares had already plummeted from $40 last fall to a
low of a few cents after earlier disclosures of losses that
analysts attributed to risky contracts with managed-care
companies and heavy debt assumed from FPA's two dozen  
acquisitions in the last two years.

Investors have reacted to the FPA troubles by dragging down
share prices of two other big physician-practice management
companies, Medpartners and Phycor Inc. Analysts said Phycor
was the strongest financially of the three.

FPA closed Monday at 18.75 cents, down 53.13 cents in
Nasdaq trading.  Medpartners was unchanged at $6.38 on the
New York Stock Exchange. Phycor declined 18.75 cents, to
$15.75, in Nasdaq trading.

Doctors expected companies like FPA to strengthen their
hand in negotiating payments with HMOs and to lighten their
costs by taking over dealings with the
insurance companies and providing centralized information

In four years as a publicly traded company, FPA reached a
peak of 7,900 doctors with 1.4 million patients.

The company's biggest customer, Santa Ana-based PacifiCare
Health Systems, withdrew contracts covering 200,000
patients this month and arranged to pay those doctors
directly or through other groups.(Orange County Register -

FPA MEDICAL: Files Current Report with SEC
On July 18, 1998, the Board of Directors of FPA Medical
Management Inc. formally endorsed the terms of a
prenegotiated plan of reorganization.  A full-text copy of
the Plan of Registration Term Sheet is available via the
Internet at:

GEOTEK COMMUNICATIONS: Files Reorganization Plan
Geotek Communications Inc. has filed its reorganization
plan, based on a term sheet calling for lender S-C Rig
Investments III L.P. to underwrite a $20 million rights
offering for 80% of the new common stock. While general
unsecured creditors were to receive new notes and common
stock pursuant to the term sheet, the plan offers them new
stock only. The recently-appointed creditors' committee has
not yet taken a position on the proposed plan. (Federal
filings Inc. 24-July-98)

KIA MOTORS: Ford, Daewoo Motor and Hyundai Submit Bids
Ford Motor Co. and other foreign companies submitted
documents Friday to bid for South Korea's troubled Kia
Motors and its sister firm, Asia Motors Corp., a Kia
spokesman said.

Ford and Korea's second-largest automaker, Daewoo Motor,
followed South Korea's largest automaker, Hyundai Motor
Co., and upstart Samsung Motors Inc., which submitted their
documents earlier this week, spokesman Kim Sam-sung said.

He said other foreign companies also had submitted letters
of intent by Friday's deadline but did not want their names
disclosed. Ford and its affiliate Mazda of Japan are
already Kia's biggest shareholders with about a 17
percent stake.

The Korea Development Bank, Kia's main creditor, plans to
sell Kia and Asia Motors together. Kia and Asia Motors are
both under court receivership, a form  of bankruptcy
reorganization, after nearly collapsing last July.

The bank said the buyers who need to take at least a 51
percent stake in the companies.

The bank said Kia's total liabilities were estimated at 8.8
trillion won ($6.8 billion) at the end of March, against
its total assets of 7.7 trillion won ($6 billion). Asia
Motors had 3.1 trillion won ($2.4 billion) in liabilities
and 1.6 trillion won ($1.3 billion) of assets.

A bank official said creditors were discussing writing off
some of the debts of the two companies.

The bank said candidates would be offered opportunities to
assess the finances and management of Kia and Asia Motors
after July 27 and would be required to submit bids by Aug.
21. After a 10-day review of the proposals, the
creditors would announce a winner on Sept. 1.

"It will be a race between Ford and Hyundai with others
trailing behind," said Ji Sung-chul, an analyst at LG
Economic Research Institute.

Kia officials refused to disclose details of the bid
letters, but analysts said Ford was best placed to win
because of its long-time ties with Kia.

"Among other things, Ford has a well-established business
link with Kia and  can bring in foreign capital and
advanced technology into the country," said Oh  Chang-suk,
at Daishin Economic Research Institute.

Ford and Mazda Motor Corp. jointly own 16.9 percent of Kia.

But Hyundai can argue that its larger production would give
economy of scale benefits and consolidate an industry
suffering from excess capacity, analysts said.

"It is true Hyundai has troubles in competing overseas with
its 1.6 million- vehicle capacity. If it can increase the
capacity by one more million, that will help a lot," said
LG Economic's Ji.

Daewoo Motor said it would like to join with Hyundai to
take over Kia and Asia Motors, but Hyundai has refused to
comment on that option. (Reuters: International- 07/24/98)

LAKE CORP: GE Capital Enters Into Definitive Agreement
GE Capital, the financial services group of General  
Electric Co., has entered into a definitive agreement with
Chuo- ku, Osaka-based Lake Corp. to acquire Lake's consumer
finance business.

Under the terms of the deal, a newly-formed GE Capital
subsidiary will acquire the Lake name, trademark and
consumer finance business infrastructure  
such as the retail network branches and facilities.

Financial terms were not disclosed.

GE Capital said all 2,700 employees in the consumer finance
business are  
expected to become part of the GE Capital organization.

The deal, which has been finalized, will close on or about
Nov. 2.

MARVEL ENTERTAINMENT: Last Date to File Proofs of Claim
Any party or parties with claims for damages against the
debtors from the rejection of executory contracts or
unexpired leases listed on the Exhibit A attached to the
motion shall have 30 days from receipt of the motion or
until August 20, 1998 to file a proof of claim.

MEGO MORTGAGE: Stock Ownership Reported
report to the SEC the beneficial ownership of 5,359,116
shares of Common Stock representing 17.53% of the class, of
Mego Mortgage Corp.

Emanuel J. Friedman reports sole voting power over
6,766,667 shares of common stock, and sole beneficial
ownership of 12,125,783 shares of stock representing 39.67%
of the class.

Mr. Friedman may be deemed to indirectly beneficially own  
5,359,116 shares of common stock by virtue of his "control"
position  as Chairman and Chief Executive Officer of
Friedman Billings Ramsey  Group, Inc. 4,452,307 of those
shares are beneficially owned by Friedman Billings Ramsey &
Co., Inc., a wholly owned subsidiary of FBRG and a
registered broker-dealer.

Mr. Friedman's  acquisition of common stock on June 29,
1998 is part of a broad plan to recapitalize Mego.  Mr.
Friedman's acquisition was made for investment purposes.

MILFORD RESOLUTION: Hearing to Consider Disclosure
The Disclosure Statement of Milford Resolution, Inc, (f/k/a
Strawberries Inc.), and Strawberries Holding, Inc. will be
presented for approval at a hearing before Judge Roderick
R. McKelvie on August 20, 1998.

NANTUCKET INDUSTRIES: Operating Results for Fiscal Year
Net sales for the fiscal year ended February 28, 1998  
decreased 29% from the prior year levels to $21.7  million.  
Sales under the Brittania license declined $10.4 million
from prior year levels, with the balance of the men's
fashion underwear business off by $609,000.  The decline in
sales of the men's products is primarily related to the
phase out of the Brittania product associated  with the
actions  announced by Levi's to dispose of the Brittania  
brand, and the loss of certain styles to competitors  
within the Companies business environment.  GUESS? product
sales increased $2.3 million from prior year levels, which
includes $2.7 million in close out sales, and reflects the  
Company's efforts to reduce its carrying levels of GUESS?
inventory, and generate cash.

The Company has incurred significant losses in recent years
which have generally resulted in severe cash flow problems
that have negatively impacted the ability of the Company to
conduct its business as presently structured.

In March, and then May 1998 Congress Financial Corporation
extended its Loan and Security Agreement with the Company
to August 18, 1998; discussions are on going, for the
Company and  Congress to enter into a new,  long term
financing  facility.  In management's opinion, a new
agreement will be in place prior to the expiration of the
current extension.  As of May 20, 1998, the most recent   
measurement date,  the  Company  had  excess  borrowing
availability of $800,000  pursuant to its credit agreement  
with  Congress Financial. The Company in May 1998 has  
entered  into an  agreement  with its Subordinated Debt
holder to extend the cure period, with respect to $322,551
in prior  interest  payment defaults  and for the  interest  
payment due in August 1998, until December 1998.

PEGASUS GOLD: Files Plan with Court
On July 17, 1998, Pegasus Gold Inc. filed a Plan of
Reorganization with the U.S. Bankruptcy Court.

PHELPS TECHNOLOGIES: Authority to Employ Attorneys
Judge Karen M. See approved the application of Phelps
Technologies, Inc. and Phelps Tool and Die Houston Inc.
for the employment of the law firm of Adams Nye Sinunu
Walker LLP, as special counsel, effective February 2, 1998.

PHOENIX INFORMATION: Committee Objects to Extension of
The Official Committee of Equity Security Holders of
Phoenix Information Systems Corp., Phoenix Systems Ltd.
and Phoenix Systems Group, Inc., object to the proposed
extension of the debtors' exclusive periods.

The Committee states that the debtors have failed to
present sufficient cause supported by the evidence to
justify a further extension of the Exclusive Periods.  "The
debtors are not large companies and all of the assets of
the debtors have been sold and the debtors have effectively
ceased operating, thereby leaving very little, if anything
to reorganize."

The Committee states that the plan, among other failings,
seeks to compel impermissible third party releases.  By
precluding the Equity Committee from proferring its own
plan, the debtors are seeking to pressure the equity
holders into accepting what currently amounts to be their
only alternative.

"In the context of a liquidation, creditors and equity
holders have a greater interest in formulating a plan for
equitable distribution of the proceeds than the debtors who
are mere shareholders."

ROSS TECHNOLOGY: Agreement to Sell BridgePoint
ROSS Technology, Inc. (Nasdaq: RTEC) announced that the
Company has entered into an agreement to sell its  
BridgePoint business unit to BridgePoint Technical
Manufacturing Corporation.  The BridgePoint business unit
was formed in the second quarter of 1998 to contain the
Company's scaled back sales, service and operations
employees, as well as the inventory related to the
Company's 32 bit products. The purchase price of the
BridgePoint sale is $5.66 million in cash, plus the
assumption of certain liabilities, subject to proration for
expenses and revenues incurred by the Company after June
29, 1998, as well as holdbacks for indemnification and  
tax items.  

In addition, the Company will pay $1.72 million to
BridgePoint in connection with BridgePoint's assumption of
certain warranty repair liabilities for previous product
sales to customers throughout the world.  The sale is  
subject to customary conditions, including receipt of
financing by BridgePoint Technical Manufacturing
Corporation, which is a newly formed corporation of  
which Joe D. Jones, the Company's Vice President of
Operations, is president and a stockholder.  The
consummation of the BridgePoint sale is expected to  
occur in August 1998.

The Company's Board of Directors has adopted a Plan of
Complete Liquidation and Dissolution, pursuant to which the
Company will be liquidated by the sale of all or
substantially all of its remaining assets and payment of
claims, obligations  and expenses owing to the Company's
creditors.  Based on the anticipated value of the Company's
assets to be sold and the amount owed to creditors of the
Company, the Company does not believe it will have any
funds or assets remaining to make distributions to either
preferred or common stockholders.

The Company anticipates that the BridgePoint sale and the
Plan of Liquidation will be approved by Fujitsu Limited as
the Company's majority common stockholder and sole holder
of the Company's outstanding preferred stock. The Company
intends to proceed with liquidation and dissolution  
regardless of whether the BridgePoint sale is consummated.

Despite extensive efforts, the Company has been  
unable to sell its "Viper" design operations.

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
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