TCR_Public/980731.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, July 31, 1998, Vol. 2, No. 149

2CONNECT EXPRESS: Advises SEC of Amended Disclosure Statement
AMERICAN SHIPYARD: Competing Plans to Produce New Owner
BESTBANK: Critically Undercapitalized Sub-Prime Lender Shut Down
BRETT AQUALINE: $1.6 Million California Filing
BRUNO'S, INC.: Selling 15 Stores to Albertson's, Inc.

CAI WIRELESS: Commences Prepackaged Bankruptcy
CELLPRO, INCORPORATED: Announces Loss & Adverse Patent Decision
COLOR TILE: Exclusivity Extended to January 11, 1999
CROWN BOOKS: Reports Chapter 11 Filings to SEC
DOW CORNING: 2nd Quarter Profits Drop 22%

FINANCIAL CORPORATION: Second Payment Coming September 8, 1998
FPA MEDICAL: To Leave Sacramento by Sept.; Won't be Missed
FPA MEDICAL: WellPoint Discloses Impact of FPA Bankruptcy
GRUPO DINA: Santander Analyst Predicts Default on 8.00% Bonds
GUY F. ATKINSON: Exclusivity Extended to April 30, 1999

INTERNATIONAL META: Files June 1998 Operating Reports
KEENE CORPORATION: Creditors' Trust Discloses Stake
KIA MOTORS: Creditors will write off half of Kia's debt
KOO KOO ROO: Announces Second Quarter Results
MANHATTAN BAGEL: New World Coffee to the Rescue

MOBILEMEDIA CORPORATION: DIP Pact Extended to March 31, 1999
NATIONAL ENERGY: S&P Cuts Rating to CCC+ & Warns of Default
OMEGA ENVIRONMENTAL: Releases Monthly Operating Reports
PETRIE RETAIL: Pleading for Prolonged Exclusive Period
PHILLIPS UNIVERSITY: Phillips Trustees Await Loan Funds

ROMA FIG: Fresno, California, Operation Files for Chapter 11
SOLV-EX CORP.: SEC Asks Court to Delay Chapter 11 Exit
SPECTRAN CORP.: 2nd Quarter Loss Leads to Covenant Violation

Bond Pricing for Week of July 27, 1998 from DLS Capital Partners


2CONNECT EXPRESS: Advises SEC of Amended Disclosure Statement
2Connect Express, Inc. (OTC Bulletin Board:CNTCU) provided the
SEC with notice of its recent announcement that it has filed a
motion with the United States Bankruptcy Court, Southern District
of Florida, to amend its Disclosure Statement and expedite a
hearing on such motion.  The Disclosure Statement amendment is
required based on recent events, the Company says.  As a result,
the Disclosure Statement amendment, which is subject to
Bankruptcy Court approval, provides for the extinguishment of all
pre-confirmation equity interests in 2Connect as of the Effective
Date of the Plan.

The Company believes that this recent information is material and
must be disclosed to all creditors and equity securities holders
in connection with their deliberation on the Plan.

2Connect filed a voluntary petition for relief under Chapter 11
of the U.S. Bankruptcy Code on January 12, 1998, and subsequently
closed all of its stores except the store at Coral Square Mall in
Coral Springs, Florida.  The Coral Square store has operated
since June 16, 1998 under a management agreement with Bobby
Allison Cellular Systems of Florida, Inc. whereby Bobby Allison
is responsible for all expenses related to that store and is
entitled to any profits or losses that it generates. The Company
has liquidated most other assets and reduced overhead to skeleton

AMERICAN SHIPYARD: Competing Plans to Produce New Owner
A new owner for troubled American Shipyard could emerge from
Bankruptcy Court as early as today, according to a report
appearing in the Providence Journal.  Judge Arthur N. Votolato
expects to complete a contested confirmation hearing today,
bringing an end to the 1996 chapter 11 case commenced by the
Rhode Island shipyard.  

Three Rhode Island groups:

   * Lincoln Street Partners, of Newport;
   * New England Boat Builders, or NEBB, of Portsmouth; and
   * Carpionato Properties, of Johnston.

have pitched nearly identical plans to buy the yard to five
groups of creditors.  The groups favor propping up the shipyard's  
operations with more light-commercial marine use.

Creditor Participation Services Corp., of Providence, objects on
five points, lawyer Peter G. Berman told the Providence Journal,
describing the point of contention as the shipyard's fair-market
value.  PSC is seeking payments from the shipyard of up to $4.6
million.  It holds a lien against nearly all the shipyard's
assets.   The bidders, in their plans, offer PSC the same terms -
payments of up to $3.8 million.   They also propose paying PSC
$450,000 in interest, at a rate of 8.5% since the yard filed for
bankruptcy.  PSC is seeking an additional $500,000 in interest
money.  That tally reflects a market-driven 15-percent interest
rate, according to court papers, the Journal related.

BESTBANK: Critically Undercapitalized Sub-Prime Lender Shut Down
BestBank of Boulder, Colo., which specialized in sub-prime (or  
high-risk) credit cards, was found to be critically
undercapitalized, said Richard Fulkerson, Colorado's banking
commissioner, according to a report appearing in the Portland
Press Herald.  Fulkerson also said that the bank managers exposed
federally insured depositors to risk when they did not stop the
rapid growth of the bank's credit card program.

BestBank closed last Thursday, with losses of $134.5 million, but  
only $23 million on hand in capital reserves, according to a
Colorado Banking Commission report.

BRETT AQUALINE: $1.6 Million California Filing
Listing $1,624,830 in assets and $1,660,832 in liabilities, Brett
Aqualine Inc., a California Limited Partnership (James Brett,  
President) filed a chapter 11 petition in Huntington Beach on
July 21, 1998.  The case number is 98-20362-RA.

BRUNO'S, INC.: Selling 15 Stores to Albertson's, Inc.
Bruno's, Inc. yesterday announced that it has entered into an
agreement to sell 15 stores, including one new store that has not
commenced business, to Albertson's, Inc. of Boise, Idaho.  Eleven  
of the stores are located in the Nashville area and four in the
Chattanooga market, which includes Ft. Oglethorpe, Georgia.  In
addition to the 15 supermarkets that will be sold to Albertson's,
another 20 stores operated by Bruno's will be sold or closed.

"Earlier this year, we initiated a store rationalization program
to identify stores that fit into our overall strategy.  This
program is being conducted as part of our ongoing financial
restructuring effort.  The decision  announced today is the
result of that program.  There is no doubt that the sale of these
particular stores puts us in a stronger financial and operational  
position," said Bruno's Chairman and CEO James A. Demme.

Demme added that the buying and selling of stores is a routine
part of the supermarket business.  "These are strategic decisions
aimed at better positioning Bruno's to compete in our remaining
markets," said Demme.

Following the completion of the transactions announced yesterday,
Bruno's will own and operate 164 supermarkets in Alabama,
Mississippi, Florida, and Georgia.

CAI WIRELESS: Commences Prepackaged Bankruptcy
CAI Wireless Systems, Inc. (the "Company") announced yesterday
that it had commenced a prepackaged bankruptcy with the
overwhelming support of its creditors by filing a petition for
relief  under Chapter 11 in the Federal Bankruptcy Court in
Wilmington, Delaware.  The Company said that of the creditors
who voted in its prepetition solicitation of consents, which
expired at midnight on Tuesday, 99.9% of its 12-1/4% Senior  
Notes due 2002 ("Senior Notes") and 92.3% of its Subordinated
Notes voted in  favor of the Plan of Reorganization.  Pursuant to
the Plan, in cancellation of  their existing securities, holders
of the Senior Notes would receive, in the aggregate, new
six-year Senior Notes in the aggregate initial principal amount  
of $100 million and approximately 91% of the common equity of the
reorganized company, and holders of the Subordinated Notes would
receive the remaining approximately 9% of the common equity.
Holders of the Company's senior secured debt have been repaid in
full with approximately $48 million of a new debtor-in-
possession financing facility and virtually all of the Company's
other  creditors, including vendors, licensors and employees will
be paid in full in  the ordinary course. However, under the Plan,
existing shareholders of CAI will  not receive any distribution
and their shares will be extinguished.

A debtor-in-possession financing facility of $60 million provided
by the Company's present senior lender was approved by the
Bankruptcy Court, which  also established September 9, 1998 as
the date for a confirmation hearing on  the Company's Plan.  The
Company would expect to emerge from bankruptcy shortly  
thereafter, subject to certain approvals of the Federal
Communications  Commission, the obtaining of a new senior secured
credit facility and various  other customary conditions.

"We are gratified by the strong support of the Company's reditors
in endorsing CAI's plan to achieve financial stability.  We look
forward to emerging from the **bankruptcy** expeditiously," said
Jared E. Abbruzzese, CAI's Chairman and Chief Executive Officer.

The Company said that none of its operating subsidiaries had
filed for bankruptcy protection except for Philadelphia Choice
Television, Inc. ("PCT"),  which is included in the Company's
Plan of Reorganization.  In connection with  the Plan, PCT and
the Company will seek to sell and assign an aggregate of 64  
contracts to provide cable television services to various
multi-dwelling units  in the Philadelphia market for
approximately $6 million in cash.

Statements contained in this press release relating to CAI's
future operations may constitute forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act
of 1934, as amended.  Actual results of the Company may differ
materially from those in the forward-looking statements and may
be affected by a number of factors, including the ability of
CAI to emerge from the Chapter 11 case commenced today in a
prompt and expeditious manner, as well as other factors contained
herein and in CAI's securities filings.

CELLPRO, INCORPORATED: Announces Loss & Adverse Patent Decision
CellPro, Incorporated (NASDAQ:CPRO) today reported a net loss of
$5.0 million for its first fiscal quarter ended June 30, 1998, on
$2.5 million in product sales for the same quarterly period.

CellPro disclosed that, on July 24, 1997, the U.S. District Court
in Delaware ruled on several post-trial motions in a patent case
involving Johns Hopkins University, Baxter Healthcare Corp. and
Becton Dickinson & Company as plaintiffs and the Company as
defendant.  The Court entered a judgment in favor of the
plaintiffs for alleged willful patent infringement in the case.
The District Court also simultaneously filed an Order for
Permanent Injunction (the "Injunction") which severely restricts
the Company's right to sell its CEPRATE(R) SC Stem Cell  
Concentration System and required the termination of all sales of
its CEPRATE(R) LC Laboratory Cell Selection System (LC34). The
Company has appealed the Injunction and the other judgments
issued by the District Court.  The case has been fully briefed,
and on May 5, 1998, oral arguments were heard by the U.S. Court
of Appeals for the Federal Circuit. There is no way to know
when the  Appeals Court will issue its decision in the case.  The
Company believes that  future financial results will likely be
materially adversely affected by the Injunction unless it is
overturned on appeal, stayed or significantly modified.

CellPro, Incorporated is a biotechnology company in Bothell,
Washington specializing in the development, manufacturing and
marketing of proprietary continuous-flow, cell-selection systems
for use in a variety of therapeutic, diagnostic and research

COLOR TILE: Exclusivity Extended to January 11, 1999
Color Tile Inc. won an extension of its exclusive periods
to file a liquidating reorganization plan and solicit plan
acceptances through Jan. 11 and March 11, respectively. The U.S.
Bankruptcy Court in Wilmington, Del., granted the 180-day
extension following a July 23 hearing. The defunct floor-covering
retailer said the extension was needed to allow the creditors'
committee to continue to pursue potential causes of action
against prepetition transferees and others on the company's
behalf.  While the panel has evaluated thousands of potential
claims and filed numerous complaints, several actions that
represent the greatest potential recovery are in the midst of
discovery.  (ABI and Federal Filings, Inc. 30-Jul-1998)

CROWN BOOKS: Reports Chapter 11 Filings to SEC
In a Form 8-K filed with the Securities and Exchange Commission
this week, Crown Books Corporation reports to the Commission that
on July 14, 1998, Crown Books Corporation (the "Registrant") and
its subsidiaries, Crown Books East Corporation, Crown Books West
Corporation, Crown Books National Corporation, Super Crown Books
Corporation and Crown DHC Corporation (collectively, the
"Subsidiaries") filed voluntary petitions for relief under
Chapter 11 of the United States Bankruptcy Code in the United
States Bankruptcy Court for the District of Delaware (the
"Court").  The cases of Registrant and the Subsidiaries, which
are being jointly administered, are pending in such Court as
Cases Nos. 98-1575(RRM) through 98-1580(RRM) inclusive.  Each of
Registrant and the Subsidiaries is continuing to operate its
business as a debtor-in-possession.

DOW CORNING: 2nd Quarter Profits Drop 22%
Dow Corning Corp.'s second-quarter profits dropped 22% on a sharp
decline in sales in Asia and flat sales elsewhere, the company
announced Thursday.  The silicone-based materials maker earned
$45.9 million, down from $58.6 million in the second quarter of
last year.  Sales in the second quarter dropped 5% to $630.9
million from $664.7 million for the same period in 1997.  For the
first six months of this year, the company earned $100.8 million,  
down 9% from $112 million earned in the first half of 1997.

"Poor business conditions in Asia affected us negatively both
directly within Asia and indirectly in other parts of the world,
most notably as customers in electronics-related markets slowed
their purchases," said John Churchfield, Dow Corning's chief
financial officer.   The strengthening U.S. dollar continued to
drag the growth of reported revenue and earnings from foreign
operations, Churchfield said.  

FINANCIAL CORPORATION: Second Payment Coming September 8, 1998
Airland Corporation, as the distribution agent (the "Agent") for
the holders for the 9% Convertible Subordinated Debentures of
Financial Corporation of Santa Barbara due 2012, announced today
that it has established a special payment date of September 8,
1998 (the "Payment Date") for the second payment on the
Debentures pursuant to Chapter 11 Plan of Reorganization (the
"Plan") of  Financial Corporation of Santa Barbara, Debtor,
confirmed by the United States Bankruptcy Court for the Central
District of California (Case No. LA90-23257-NRR).  The special
record date for determining Debentureholders entitled to  receive
such payment is August 10, 1998 (the "Record Date").  On the
Payment  Date, the Agent will distribute an aggregate amount of
$19.93451 per each $1,000 par value of outstanding Debentures to
the registered owners of the  Debentures as of the Record Date
(the "Registered Owners").  This payment  represents the second
distribution of monies by the Agent since the Plan was  confirmed
on March 31, 1995.  

For further information, contact Matthew Metcalfe, Airland
Corporation, P.O. Box 2903, Mobile, Alabama 36652, Telephone 334-
432-2600, Fax 334-433-4478.

FPA MEDICAL: To Leave Sacramento by Sept.; Won't be Missed
The Sacramento Bee reports that FPA Medical Management's bumpy
ride in Sacramento is expected to end by September when the
financially troubled company closes up shop in the area.  The
change is not expected to have much impact on the nearly 55,000
patients involved because doctors who worked for FPA have
arrangements with most health plans that allow for unbroken
coverage, Winni Loesch, medical director for FPA, said Monday.

One significant issue remains to be finalized, the Bee related.
FPA's doctors worked in six health care centers around
Sacramento. Those buildings were leased by FPA.  It's unclear
whether Catholic Healthcare West will take over those buildings
or move the doctors to other locations. Negotiations are ongoing,
said Lisa Haines, a  spokeswoman for the buildings' owner,
Foundation Health Systems.

FPA MEDICAL: WellPoint Discloses Impact of FPA Bankruptcy
WellPoint Health Networks, Inc. (NYSE:WLP), in announcing its
second quarter earnings, disclosed that it recorded a pretax
charge of $48.7 million in the second quarter of 1998 related to
its holdings in FPA Medical Management, Inc., which recently
filed for bankruptcy.  WellPoint received stock in FPA in
connection with the stock-for-stock merger of Health Partners
Inc. with FPA in the fourth quarter of 1997.

GRUPO DINA: Santander Analyst Predicts Default on 8.00% Bonds
Despite its low price and wide spread, Santander analyst Robert
Schmieder does not believe investors should buy Grupo Dina's
8.00% convertible bond due 2004 at this time.  He is cautious on
the Dina credit, given the following factors:

   (1) the company's current inability  to upstream cash freely
       from its profitable U.S. operations to the parent  

   (2) Dina's overall poor credit quality;

   (3) the considerable cash principal and interest payments due
       over the next 12 months;

   (4) the cash drain  resulting from its Mexican trucking
       operations, including expected further market share loss,
       reflecting former partner Navistar's aggressive entry into  
       the market as a competitor; and

   (5) a less-than-stellar management.

Mr. Schmieder cannot advocate a positive stance toward these
bonds based solely on the possibility of a restructuring.  Even
with a refinancing, investors would still own a highly leveraged
cyclical entity, whose only source of cash flow  its MCI bus
operations will likely peak this year.  Also, he believes that
the corporate restructuring being contemplated leaves convertible  
holders in a weaker position in the debtor hierarchy.  Santander
expects that, unless there is a restructuring, Dina will soon
come dangerously close to  defaulting on its debt obligations.

Mr. Schmieder stated that he would avoid the convertible in its
present state, but would reevaluate the company, following the
completion of a successful restructuring plan.  In the meantime,
the spread on Dina's convertible, at 710 basis points, is
extraordinarily tight versus Empresas ICA's 2004 convertible,
which trades at a 671 spread.  Mr. Schmieder believes this is a
compelling swap opportunity, augmented by the almost $10
difference in dollar price, the Dina convertible at 81 and the
ICA convertible at 71.25 and given his belief that ICA's
creditworthiness is far stronger than Dina's.

Santander Investment is wholly owned by Banco Santander S.A.
(NYSE: STD).  Spain's leading financial group with US$219 billion
in total managed funds at the end of the first quarter 1998
(including US$171 billion in balance sheet assets).  With
operations in 34 countries including all the major international
financial centers, Banco Santander also has the largest
commercial banking network in Latin America among international

GUY F. ATKINSON: Exclusivity Extended to April 30, 1999
Highlighting an eventful July 24 hearing, the court extended
Atkinson's exclusive period to file a liquidating reorganization
plan to April 30.  In addition, Atkinson has filed a business
plan with the court that provides for monthly usage of cash
collateral consistent with a budget that runs through March 31.  
Separately, the company received approval to sell its Atkinson
Dynamics Co. division, which makes heavy-duty industrial
intercoms, to Federal Signal Corp. for $1.95 million, after
Federal Signal outbid Pacific Networks & Co. at an auction
Friday.  (Federal Filings, Inc. 29-Jul-1998)

INTERNATIONAL META: Files June 1998 Operating Reports
International Meta Systems, Inc., released its Monthly Operating
Report of Debtor-in-Possession for the Period ended June 30,
1998.  The financial statements were filed with the United States
Bankruptcy for the Western District of Texas, Austin Division, in
connection with the Company's ongoing proceeding under chapter 11
of the U.S. Bankruptcy Code (Case No. 98-10782FM), and the
Company delivered copies to the SEC.  Full-text copies of the
filings are available at no charge via the Internet at:

KEENE CORPORATION: Creditors' Trust Discloses Stake
Richard A. Lippe, Esq., Managing Trustee for the Keene Creditors
Trust, discloses in an Amended Form 13-D that, as the principal
holder of the stock of Reinhold Industries, Inc. (Reorganized
Keene Corporation), he has retained HT Capital Advisors, LLC to
assist the Trust in developing and implementing a strategy to
realize upon the value of its investment in Reinhold, including
an evaluation of whether the Trust should at this time seek a
merger, sale of shares or other transaction that would involve
a disposition by the Trust of all of its shares of Class B Common  
Stock for cash.  

As compensation for HT's services hereunder, the Trust
has agreed to pay HT:

   (a) A non-refundable, up-front retainer of $30,000;

   (b) An additional Transaction Fee equal to the greater
       of (i) $150,000 and either (ii) 3% of the consideration,
       payable in cash upon the closing of any Transaction with a
       party contacted by HT; or (iii) 1 1/2% of the
       consideration payable in cash  upon  the  closing of any
       Transaction with a party not contacted by HT if at any
       time within 12 months  after  the expiration  or  
       termination  date of  this  Agreement  (x)  such
       Transaction  is  consummated or (y) an agreement is
       entered into which subsequently results in a consummated

KIA MOTORS: Creditors will write off half of Kia's debt
The Korea Times reported that creditors of Kia Motors
Corporation and its sister firm, Asia Motors Company, have
now agreed to write off 6.56 trillion won of the combined
debt of the two automakers.  At least 247 billion won of
debt is to be converted into equity.

The new debt structure announced by officials from the
Korea Development Bank, the major creditor of the two
automakers, reduces Kia's debt to 4.02 trillion won and
Asia Motor's debt to 1.27 trillion won. The creditor banks
have put both of these companies up for sale through an
international tender.  

This latest report from the Korea Times stated that the
total debt before any write offs for the two firms is 9.13
trillion won for Kia and 2.73 trillion won for Asia Motors.  

KOO KOO ROO: Announces Second Quarter Results
Koo Koo Roo announced yesterday that restaurant revenues for the
second quarter ended June 30, 1998 increased 43% to $22.7 million
(including revenues of $8.0 million relating to the Hamburger
Hamlet restaurants acquired in May 1997), compared to restaurant
revenues of $15.9 million for the same period in 1997 (including
revenues of $3.4 million for Hamburger Hamlet).  Same store sales
for Koo Koo Roo restaurants opened at least 18 months increased
by 2.4% for the quarter ended June 30, 1998, compared to the same
period in 1997.  The Company also reported that it is in
negotiations with a prospective purchaser for the assets of Color
Me Mine, Inc.

The Company reported earnings before interest, taxes,
depreciation and amortization ("EBITDA") of approximately
$651,000 for the quarter ended June 30, 1998.  The Company
incurred a net loss of $960,000, or $(.02) per common share for
the quarter ended June 30, 1998, based on 50.7 million weighted  
average common shares outstanding, compared to a net loss of $4.3
million or $(.22) per share for the same period in 1997, based on
19.0 million weighted average shares outstanding.

Lee A. Iacocca, Acting Chairman of the Board, commenting on the
second quarter results said, "Bill Allen and his management team
have worked diligently during 1998 to design and implement a
sound business plan and those efforts are favorably impacting
both operating results and cash flow."

"We are pleased to report that our substantial reductions in
corporate overhead implemented during the fourth quarter of 1997
and first quarter of 1998, as well as the closure of non-
performing stores in outlying markets, resulted in improved
operating results for the second quarter of 1998.  This  
represents a significant achievement in our on-going efforts to
stabilize our cash flow and improve the financial condition and
operating results of the Company," said Mr. A. William Allen, the
Company's Chief Executive Officer.

"Also, we are pleased with the 2.4% growth in same store sales
during the second quarter of 1998.  This increase was achieved in
spite of inclement weather conditions during April and May 1998
in our core Southern California market," Mr. Allen added.

Commenting on the potential sale of the assets of Color Me Mine,
Inc., Mr. Allen said, "We hope to be in a position to announce
the consummation of an  agreement for the sale in the near
future.  We recently completed the sale of the Arrosto Coffee
business, which included the roasting plant and the stand-  
alone Arrosto store.  A sale of Color Me Mine would complete our
plan to divest the Company's non-core businesses."

Mr. Allen said that the $3 million bridge **loan** from Family
Restaurants "significantly enhanced the Company's cash position."  
He added, "The next key element in our business plan is the
proposed merger with Family Restaurants, Inc., which we believe
will be highly beneficial to both companies and their
stockholders.  We have filed our merger documents with the
Securities and Exchange Commission ("SEC") and are currently
awaiting their comments.  Upon final approval by the SEC, we hope
to mail the proxy to our shareholders during August 1998 and hold
the special shareholder meeting to vote on the proposed merger in
September 1998."

The Company also announced that it had signed an international
license agreement to license the Koo Koo Roo California
Kitchen(TM) concept to quality restaurant operators and investors
for the State of Israel.  This license agreement provides for up
front license fees and continuing royalty payments based upon
revenues of the restaurants.

Koo Koo Roo, Inc. operates 52 restaurants in California, Las
Vegas, Florida and the Washington, D.C., beltway area, including
14 Hamburger Hamlet restaurants.  The Company's Canadian partner
also operates three Koo Koo Roo California Kitchen restaurants in

MANHATTAN BAGEL: New World Coffee to the Rescue
New World Coffee & Bagels, Inc. (Nasdaq: NWCI) announced that it
has signed an agreement to acquire Manhattan Bagel Company
(Nasdaq: BGLSQ), the bagel manufacturer and franchiser that filed
for Chapter 11 protection last November. The agreement covers
the acquisition of Manhattan Bagel's approximately 310 store
franchise system, two bagel dough manufacturing plants and
corporate operations.  Both chains would retain their individual
identities while consolidating their corporate infrastructure.

Pro forma systemwide sales should approach $150 million from the  
approximately 350 franchised and company-owned Manhattan Bagel
and New World stores.  Manhattan Bagel currently franchises,
licenses or operates approximately 310 units, while New World
franchises or operates 43 units.  Pro forma revenues for the
combined entity should exceed $45 million, including retail store
sales, sale of bagel dough, cream cheese and coffee beans to
franchisees, and franchise royalty and fee income. The combined
entity would have a major market presence in the Northeast,  
the Southeast and in California. Existing bagel dough plants (in
Eatontown, NJ and Los Angeles, CA), and a coffee plant (in
Branford, CT), are expected to be capable of supplying stores on
both coasts.

"This combination is a natural fit strategically and
operationally," said Ramin Kamfar, New World's CEO and President.
"Strategically, Manhattan Bagel has an award-winning bagel
product which is a perfect complement for our award-winning
coffee. In addition, our store base complements Manhattan's
strength in the Northeast to create a leading presence in the
area.  Operationally, our strength in systems and the depth of
our management team are a match for Manhattan's needs in order to
grow its business.  For Manhattan Bagel franchises, the
combination presents an opportunity to increase sales by
featuring New World's highly-acclaimed branded coffee and adding
iced coffees, frozen coffee drinks and espresso-based beverages
to the menu," Mr. Kamfar continued. "Manhattan Bagel stores
currently average approximately 10% of their sales in coffee
where the comparable figure for New World's bagel stores is close
to 50%. These product lines would be supported by a full range of
merchandising and marketing programs."

"The financial synergies of this transaction are expected to be  
significant," said Jerry Novack, New World's Chief Financial
Officer.  "The benefits of maximizing plant capacity for both
parties, cross selling of coffee and bagel products and
consolidation of general and administrative overhead should be
substantial. We will work with Manhattan Bagel to implement a
state-of-the-art computer system that we expect will help enhance
the ability to track and improve store profitability. The
transaction should prove strongly assertive to our earnings."

Under the acquisition, which is subject to necessary bankruptcy
court approvals, New World would provide up to $3.5 million for
Manhattan Bagel's  secured creditors, provide $11.5 million for
Manhattan Bagel's unsecured creditors, and assume up to %5.0
million in additional liabilities.  No value will be provided to
Manhattan Bagel equity holders.  The transaction will be  
primarily financed with cash and debt.  The two companies are
currently working  on a plan of reorganization that would enable
Manhattan Bagel to emerge from  Chapter 11 bankruptcy protection.

MOBILEMEDIA CORPORATION: DIP Pact Extended to March 31, 1999
MobileMedia has negotiated an extension of its debtor-in-
possession credit facility until March 31 and reduced DIP lender
Chase Manhattan Bank's commitment from $100 million to $75
million.  A preliminary hearing on the modified DIP facility,
which had been set to expire July 31, was scheduled for  
yesterday.  (Federal Filings, Inc. 29-Jul-1998)

NATIONAL ENERGY: S&P Cuts Rating to CCC+ & Warns of Default
Standard & Poor's yesterday lowered its corporate credit and
senior debt ratings of National Energy Group Inc. to  triple-'C'-
plus from single-'B' and revised its outlook to developing
meaning ratings could be raised, lowered, or affirmed from

The combination of lower hydrocarbon prices and the lack of
success in the company's drilling program has resulted in weaker
cash flow generation and a reduction in financial flexibility.  
At current hydrocarbon prices, National Energy's remaining 1998
capital program is expected to outstrip its cash flow generation
such that its revolving credit facility is likely to be fully
drawn  by year-end 1998.  The company is in the process of
drilling several new wells  in its higher impact areas in
Louisiana and offshore Gulf of Mexico.  Risks associated with
drilling these wells have been lowered relative to the
prior  drilling program as the company now has access to 3-D
seismic data and has  hired managers who have more experience
operating in these areas.

Despite heavy capital spending for exploration and development,
National Energy's reserves and production have fallen since
October 1997.  While the company has maintained fairly steady
production in its core areas of Texas, Oklahoma, and Arkansas,
cash flow from these areas is limited.  Without substantial
success in the company's current drilling program or actions to  
enhance financial flexibility, National Energy could face the
prospect of a default within about one year.

OMEGA ENVIRONMENTAL: Releases Monthly Operating Reports
Omega Environmental, Inc., filed its unaudited financial
statement information as of and for each of the months ended
April 30, 1998 and March 31, 1998 with related notes with the
United States Bankruptcy Court and delivered copies to the
Securities and Exchange Commission.  Full-text copies of the
financial statements are available at no charge via the Internet

February and March, 1998:

March and April, 1998:

April and May, 1998

PETRIE RETAIL: Pleading for Prolonged Exclusive Period
Claiming that its case is "considerably more complex than may
appear at first blush," PS Stores Acquisition Corp., Petrie's
parent, is seeking a 60-day extension of its exclusive period to
file a reorganization plan.  PS asserted that, although it is
essentially a holding company with few assets and creditors, its
plan, like Petrie's, will involve "complicated tax and corporate
law issues."  The cases are linked in "several crucial ways," PS
said, noting that the two entities share similar significant
creditors and that the Petrie stock is the parent company's most
significant asset.  (Federal Filings, Inc. 29-Jul-1998)

PHILLIPS UNIVERSITY: Phillips Trustees Await Loan Funds
The Daily Oklahoman says that, After 92 years, Enid-based
Phillips University's future comes down to whether the check is
in the mail.  Trustees were told Tuesday that the initial
$700,000 of a $12 million loan agreement soon would be available
to them.  If the money does not arrive by Thursday, trustees will
meet again to start the process of closing the private four-year
college.  Trustees face a Friday deadline for presenting a
disclosure statement and reorganization plan to U.S. Bankruptcy
Court in Oklahoma City.

"A plan will be filed," said Michael Sohn, vice president for  
university advancement.  The plan has two parts, he said. One is
an outline if the money arrives.  The other sets up a liquidation
procedure, meaning doom for Phillips.  Liquidation would mean
selling property, equipment and buildings to pay the university's
$5 million debt.  The university would have very little left to
continue operating after its debtors are paid.   

The loan agreement appears to be the university's only hope.   
Talks to reach an agreement with the American Academy of Distance
Education and Training to buy Phillips for a reported $6 million
broke down Tuesday, Sohn said.

ROMA FIG: Fresno, California, Operation Files for Chapter 11
Ronald Storelli DBA Roma Fig and Berenda Ranch, located at 18847
Fanallon Road, Madera, and estimating assets and liabilities of
one to ten million dollars, filed for protection under chapter 11
on July 12, 1998 in Fresno.  The case number is 98-16394.

SOLV-EX CORP.: SEC Asks Court to Delay Chapter 11 Exit
The U.S. Securities and Exchange Commission asked a federal judge
in Albuquerque to delay Solv-Ex Corp.'s exit from Chapter 11
bankruptcy to give creditors more time to weigh fraud allegations
against the company's executives, according to the Albuquerque
Journal.  The journal explains that the SEC filed the motion this
week in U.S. Bankruptcy Court, where a judge is scheduled to hear
arguments Wednesday on Solv-Ex's reorganization plan -- the  
final step before the company emerges from bankruptcy.

The SEC sued Solv-Ex, CEO John Rendall and Senior Vice President
Herbert Campbell last week, claiming they defrauded investors by
issuing misleading statements about the company's technology.
Those statements helped push the company's shares as high as $38
from $5 between January 1995 and April 1997, the SEC claimed.

"We certainly believe the shareholders and creditors need to have
time to consider those allegations," said Katherine Addleman,
assistant enforcement director with the SEC's Denver office.  The
SEC is concerned because Rendall and Campbell will remain
executives with the company after it exits **bankruptcy**
protection, she said.

Creditors have already approved the company's reorganization
plan, but could decide to change their vote before the plan is
approved by a judge.  Solv-Ex said last week the SEC's charges
are without merit, and it intends to contest the claims.   

On Monday, Campbell said the company has questions about the
SEC's timing regarding its request for a delay. But Campbell said
Solv-Ex officials would refrain from making comment until
Wednesday's hearing.  The SEC said it filed the motion after
Solv-Ex refused to voluntarily comply with its request to extend
the period for shareholders and creditors to vote on the
bankruptcy reorganization plan.

The Journal reminded readers that Albuquerque-based Solv-Ex
claimed it had developed the technology to extract oil from tar
sands in northern Canada at about half the current cost, although
it's method was never proven on a commercial scale.  Solv-Ex was
delisted from the Nasdaq Stock Market in July 1997.  Its shares,
now traded over the counter, were unchanged at 7/8.  In November,
Solv-Ex sold a majority stake in its tar sands leases to Koch
Industries Inc. of Wichita, Kan., for $23 million.  Solv-Ex filed
for bankruptcy last year after failing to raise additional
capital to continue development of a processing plant about 300
miles north of Edmonton, Alberta.

SPECTRAN CORP.: 2nd Quarter Loss Leads to Covenant Violation
"Due to the loss incurred during this year's second quarter,
Sturbridge, Mass.-based SpecTran Corp. is in violation of certain
covenants with its debt holders.  As a result, SpecTran has
initiated conversations with its debt holders to obtain waivers  
and/or modifications of certain covenants in its loan agreements
to accommodate this temporary decline in earnings.

SpecTran (NASDAQ:SPTR) develops, manufactures and markets glass
optical fibers and value-added fiber optic products.  This week,
SpecTran announced a 1998 second quarter net loss of $1,383,000
on revenues of $17,032,000.  The net loss for the first six
months of 1998 was $518,000 on $32,259,000 of revenues.


Bond Pricing for Week of July 27, 1998 from DLS Capital Partners

Amer Pad & Paper  13 '05              52-55
Amer Telecasting 0/14 1/2 '04         24-26
Asia Pulp & Paper 11 3/4 '05          80-82
APS  11 7/8 '06                        7-10(f)
Boston Chicken 7 3/4 '04              23-24
Brazos 10 1/2 '07                     68-72
Brunos 10 1/2 '05                     16-17(f)
CAI Wireless 12 3/4 '04               25-26
Cityscape 12 3/4 '04                  40-41(f)
E & S Holdings 10 3/8 '06             72-74
Grand union 12 '04                    58-59(f)
Greate Bay 10 7/8 '04                 84-85(f)
Harrah's Jazz 14 1/4 '01              30-32(f)
Hechinger 9.45 '12                    76-77
Liggett 11 1/2 '99                    73-75
Mobilemedia 9 3/8 '07                 46-48(f)
Penn Traffic 9 5/8 '05                34-35
Royal Oak 12 3/4 '06                  72-76
Service Merchandise 9 '04             72-73
Zenith 6 1/4 '11                      32-33(f)
Bond pricing, appearing each Friday, is supplied by DLS Capital
Partners, Dallas, Texas.


A calendar of Meetings, Conferences and Seminars column appears
each Tuesday in the TCR.  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,

Copyright 1998.  All rights reserved.  This material is
copyrighted and any commercial use, resale or publication in any
form (including e-mail forwarding, electronic re-mailing and
photocopying) is strictly prohibited without prior written
permission of the publishers.   

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.  The TCR subscription rate is
$575 for six months delivered via e-mail.  Additional e-mail
subscriptions for members of the same firm for the term of the
initial subscription or balance thereof are $25 each.  For
subscription information, contact Christopher Beard at

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