TCR_Public/980918.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, September 18, 1998, Vol. 2, No. 183


2CONNECT EXPRESS: Sterne Agee To Acquire Equity Interests
AMERICAN RICE: Interim Okay For $8M of DIP
FULCRUM DIRECT: Delia's Acquires Certain Assets For $4.75M
FULLER AUSTIN: Notice of Disclosure Statement Hearing
GIBSON GREETINGS: Completes Sale of Capital Stock

GLOBAL MOTORSPORT: Quarter Report for Period Ended July 31
IMAGYN MEDICAL: Reports Amended Senior Credit Facility
ITHACA INDUSTRIES: Reports Termination of Accountant
LOTSOFF CORP: Notification of Late Filing
MEDICAL RESOURCES: Registration Statement

O'BRIEN ENVIRONMENTAL: NRG Energy Acquires 41.86% Interest
PACE HEALTH: Shareholders to Vote on Asset Purchase
PARAGON TRADE: Exclusivity Extended
PEGASUS GOLD: Disclosure Statement Gets Nod
PERK DEVELOPMENT: FFCA Seeks Assumption or Rejection

PHILIPPINE AIRLINES: Shutting Down After 57 Years
POWER CO: Creditor Panel Named
RYMER FOODS: Common Stock Acquired In Exchange Offer
SOLV-EX: Responds to Suit
VENATOR GROUP: Will Close 570 Stores/ $173M Charge

VENTURE: To File Late Quarterly Report
WEINER'S STORES: Quarterly Report For Period Ended August 1
WESTBRIDGE: $67 Million Assets/$110 Million Liabilities
WIRELESS ONE INC: Reports New $20 Million Note Facility


2CONNECT EXPRESS: Sterne Agee To Acquire Equity Interests
2Connect Express Inc. filed a form 10-QSB for the quarterly
period ended August 1, 1998.

On August 27, 1998 the Company entered into an agreement
with Sterne Agee whereby Sterne Agee will, as of the
Effective Date of the Plan of Reorganization of the Company
filed with the U.S. Bankruptcy Court, Southern
District of Florida, acquire out of bankruptcy 100% of the
equity interests of the Company and the Company will retain
the Coral Square Mall store lease and certain store
fixtures. In consideration for such acquisition, Sterne
Agee will make a new value contribution to the bankruptcy
estate for the benefit of the Company's creditors in the
amount of $175,000, which funds are currently in
escrow. To effect this transaction and in accordance with
the Plan of Reorganization, as amended on August 7, 1998,
upon the Effective Date, all of the current and existing
Common Stock of the Company will be forever extinguished
and canceled and the Company will issue new shares of
Common Stock to Sterne Agee which shall constitute 100% of
the issued and outstanding shares.

The existing shareholders of Common Stock will not retain
any interest in the post-bankruptcy entity or receive any
distribution from the bankruptcy estate for their
extinguished and cancelled interests. The Bankruptcy Court
scheduled a hearing to confirm the Plan of Reorganization
for October 14, 1998. The Effective Date is to occur ten
days after confirmation of the Plan of Reorganization.

Also pursuant to the terms of the Agreement and effective
August 27, 1998, all of the members of the Company's Board
of Directors, except for Marc D. Fishman, resigned from the
Board of Directors and Mr. Fishman, as the sole
remaining director, and in accordance with the Bylaws of
the Company, appointed James S. Holbrook, Jr., Craig R.
Heyward and F. Eugene Woodham, each of whom are employees
of Sterne Agee, to fill three of the vacancies. The Board
of Directors has further resolved to appoint James S.
Holbrook, Jr. as the Chairman of the Board and, in
accordance with the Bylaws of the Company, to designate
that the Chairman of the Board is the chief executive
officer of the Company.

The Company's net sales for the second quarter ended August
1, 1998 were $112,061 versus $844,730 during the comparable
second quarter ended July 31, 1997. Net loss for the second
quarter ended August 1, 1998 was ($71,549) versus
($979,993) for the last year comparable quarter ended July
31, 1997.

AMERICAN RICE: Interim Okay For $8M of DIP
American Rice Inc. has interim approval for up to $8
million of additional debtor-in-possession financing over
the next four months from its bank group, led by First
Union National Bank.  There were no objections and the U.S.
Bankruptcy Court in Corpus Christi, Texas, gave the
new financing interim approval at a Sept. 11 hearing.
(Federal Filings Inc. 17-Sept-98)

FULCRUM DIRECT: Delia's Acquires Certain Assets For $4.75M
dELiA*s Inc. (Nasdaq: DLIA) announced that it has acquired
certain assets from the estate of Fulcrum Direct, Inc., a  
privately-held catalog company currently in bankruptcy, for
approximately $4.75  million.  The primary assets include
the trademarks and mailing lists for the Zoe, Storybook
Heirlooms, Playclothes, After the Stork and Just for
Kids catalog titles.  The purchase also includes
approximately $2.4 million of selected Zoe and Storybook
Heirlooms inventory.  Additionally, dELiA*s has agreed to
assume certain of Storybook Heirlooms customer refund

FULLER AUSTIN: Notice of Disclosure Statement Hearing
Fuller-Austin Insulation Company, debtor, published a
notice in The Wall Street Journal (17-Sept-98) of hearings
to consider the adequacy of the debtor's prepetition
disclosure and disclosure statement and approval of
prepetition solicitation of votes with respect to the
debtor's plan of reorganization, approval of technical
modifications to the plan, and confirmation of the plan and
the deadline for the filing of proofs of claim.

The hearing to consider the Disclosure statement will be
held on October 15, 1998.  The plan incorporates a
settlement agreement between the debtor and DynCorp.  The
debtor will seek court approval of the settlement

The Unsecured Claims Bar Date is October 8, 1998.

GIBSON GREETINGS: Completes Sale of Capital Stock
On September 1, 1998, Gibson Greetings, Inc. completed the
sale of 100% of the capital stock of its wholly-owned
subsidiary The Paper Factory of Wisconsin, Inc., a
Wisconsin corporation to PFW Acquisition Corp., a Delaware
corporation. The Paper Factory, based in Appleton,
Wisconsin, operates 180 party good stores in 40
states and had net sales of approximately $86.1 million for
the fiscal year ended December 31, 1997.

The Company received approximately $36.4 million in cash in
the transaction. The price is subject to adjustment based
on a post-closing audit.

GLOBAL MOTORSPORT: Quarter Report for Period Ended July 31
Global Motorsport Group Inc. filed a form 10-Q with the
SEC, the company's quarterly report for the three month
period ended July 31, 1998.

In the fiscal years ended 1998, 1997 and 1996,
international sales accounted for 17%, 19% and 20%,
respectively, of the Company's total net sales.

The company reports net income of $2.37 million on net
sales of $45.3 million for the period ending July 31, 1998
and $4.83 million net income on net sales of $90.1 million
for the six months ended July 31, 1998.

The Company is the largest independent supplier of
aftermarket parts and accessories for Harley Davidson

IMAGYN MEDICAL: Reports Amended Senior Credit Facility
Imagyn Medical Technologies Inc. reports to the SEC that on
August 24, 1998, the Company and its senior lenders amended
and restated the Company's senior credit facility. In
connection with the amendment, the Company entered into a
$57.5 million amended credit agreement that is
comprised of a $43 million revolving facility and a $14.5
million term facility.

The amended facility made available to the Company $14.5
million of additionalterm financing.

The amended credit facility expires on December 30, 1998
and may be extended for two additional one-year periods on
each December 30th, provided that no event of default
occurred during the preceding year.  In no event will the
term of the amended credit facility extend beyond December
30, 2000. The borrowings under the amended credit facility
are secured by substantially all of the assets of the
Company and its subsidiaries. The Company is required to
meet certain covenants under the amended credit agreement,
including financial covenants.

ITHACA INDUSTRIES: Reports Termination of Accountant
In a form 8-KA filed with the SEC, Ithaca Industries Inc.
filed a letter written by KPMG Peat Marwick LLP
stating that on August 21, 1998 KPMG's appointment as
principal accountants was terminated.

LOTSOFF CORP: Notification of Late Filing
Lotsoff Corp. notified the SEC that it could not timely
file its quarterly report for the period ended July 31,
1998 due to the fact that initial distribution of 763,723
shares of the Company's Common Stock (representing
approximately 18% of the issued and outstanding shares)
could not be confirmed prior to the close of business on
September 14, 1998.

MEDICAL RESOURCES: Registration Statement Filed with SEC
Medical Resources, Inc. filed a Registration Statement with
the SEC.

The shares offered consist of up to 9,336,961 shares of
common stock, par value $.01 per share of Medical
Resources, Inc., a Delaware corporation

As a result of its net loss for 1997 and the late filing of
its 1997 Annual Report on Form 10-K, the Company is
currently in default of certain financial covenants under
the agreements for its $78,000,000 of Senior Notes. The
financial covenant defaults under the Senior Note
agreements entitle the lenders to exercise certain remedies
including acceleration of repayment. In addition, certain
medical equipment notes and operating and capital leases of
the Company, aggregating $14,575,000 at June 30, 1998
contain provisions which allow the creditors or lessors to
accelerate their debt or terminate their leases and seek
certain other remedies if the Company is in default under
the terms of agreements such as the Senior Notes.

A full-text copy of the filing is available via the
Internet at:

NEI WEBWORLD: Annual Meeting of Shareholders - August 7
The Annual Meeting of Shareholders of NEI WebWorld, Inc.
will be held at the offices of the Company, 4646
Bronze Way, Dallas, Texas, on August 7, 1998 at 10:00 a.m.,
local time, for the primary purpose of electing five
directors of the Company.

O'BRIEN ENVIRONMENTAL: NRG Energy Acquires 41.86% Interest
NRG Energy, Inc., acquired a 41.86% interest in
Cogeneration Corporation of America, pursuant to the
confirmed plan of reorganization for O'Brien Environmental
Energy, Inc. and pursuant to the amended and restated stock
purchase and reorganization agreement dated as of 01-31-96.
In connection with the negotiation and consummation of the
plan, on 03-08-96, NRG ENERGY entered into a loan agreement
with O'Brien (Schuykill) Cogeneration, Inc. ("Schuykill"),
a wholly owned subsidiary of Cogeneration, pursuant to
which NRG Energy agreed to make a loan in the principal
amount of $10,000,000  available to Schuykill upon
Schuykill's request. As part of the consideration  for
entering into the loan agreement, Cogeneration entered into
an option  agreement dated 03-08-96, with NRG Energy.
Pursuant to the option agreement, Cogeneration agreed that,
on date on which the Reporting Person made as loan to
Schuykill pursuant to the loan agreement, NRG Energy would  
have the right, upon 15 business days' notice, to reduce
the outstanding  principal amount of the note payable to
NRG Energy by Schuykill by  $3,000,000 in exchange for the
396,255 Cogeneration common shares. (States SEC - 09/16/98)

PACE HEALTH: Shareholders to Vote on Asset Purchase
PACE Health Management Systems, Inc. announced a special
meeting of shareholders on Wednesday, October 7, 1998.

At the Special Meeting, shareholders will be asked to
consider and to vote upon a proposal to approve and adopt
an Asset Purchase Agreement, dated June 30,1998 by and
between the Company and Minnesota Mining and Manufacturing
Company, a Delaware corporation ("3M"), pursuant to
which 3M has agreed to purchase substantially all of the
Company's assets and assume certain of the Company's
liabilities.  If the Asset Purchase Agreement is approved
and the Transaction becomes effective, the Company will
receive a cash purchase price of $4,750,000, $750,000 of
which will be placed in escrow, and which will be subject
to certain adjustments as described in the accompanying
Proxy Statement. The liabilities of the Company
that will be assumed are expected to total approximately
$1,400,000. Although the Company will no longer operate a
business following the Transaction, the Company will not be
liquidated. Management of the Company intends, for a period
up to twelve months following the Transaction, to seek a
business combination with a suitable entity. In the
interim, the net proceeds from the Transaction will be
invested in U.S. government securities.

PARAGON TRADE: Exclusivity Extended
Over the objection of patent infringement adversary Procter
& Gamble Co., the U.S. Bankruptcy Court in Atlanta extended
Paragon Trade's exclusive periods to file a reorganization
plan and solicit acceptances to Oct. 19 and Dec. 18,
respectively.  While the official creditors' committee and
Kimberly-Clark Corp. did not object to the latest
exclusivity extension for the diaper maker, P&G maintained
its position that Paragon did not deserve any additional
exclusivity. (Federal Filings Inc. 17-Sept-98)

PEGASUS GOLD: Disclosure Statement Gets Nod
The court last week approved the disclosure statement for
Pegasus Gold Inc.'s joint liquidating plan, subject to the
inclusion of some additional language. The U.S.
Bankruptcy Court in Reno, Nev., also gave final approval to
the separate disclosure statement filed by four
subsidiaries, in connection with their reorganization plan.
The court has set an Oct. 19 hearing to consider
confirmation of the reorganization plan proposed by
subsidiaries Florida Canyon Mining Inc., Montana Tunnels
Mining Inc., Diamond Hill Mining Inc., and Pegasus Gold
International Inc. A confirmation hearing on the
liquidating plan is scheduled for Oct. 26. (The Daily
Bankruptcy and ABI September 17, 1998)

PERK DEVELOPMENT: FFCA Seeks Assumption or Rejection
FFCA Acquisition Corporation leases 22 of 42 restaurant
properties to the debtors, Perk Development Corporation and
Brambury Associates.

The debtors and Travel Ports of America, Inc. have made an
offer to assume and assign the FFCA leases but such offer
violates the requirements of the Bankruptcy Code and
provides no payments for arrearages exceeding $2 Million.  
In addition, FFCA would have to reduce its rents by 40%.

FFCA is actively seeking parties who would enter into an
assumption and assignment transaction acceptable to FFCA.  
FFCA states that because the debtors, by their own
admissions, will not be able to operate their restaurant
properties within the next 60-90 days, the court should
establish an October 15, 1998 deadline to assume or reject
their nonresidential real property leases.   An order
establishing an October 15th assumption/rejection deadline
will, according to FFCA, provide for a fair and efficient
disposition of the debtors' leasehold interests and will
prevent the accrual of substantial unfunded administrative
expense claims and additional harm to FFCA and the debtors'
employees and other lessees and vendors.

PHILIPPINE AIRLINES: Shutting Down After 57 Years
hilippine Airlines (PAL), ravaged by labour conflicts and
citing "enormous losses", announced on Thursday it was
shutting down after 57 years of operation, the biggest  
Philippine firm to fold amid Asia's economic crisis.

Philippine President Joseph Estrada immediately called an
emergency meeting with PAL management and unionists to try
to persuade the company to remain open, warning its closure
would further damage the country's already crippled  

"We are deeply saddened to announce that at midnight of
September 23, Philippine Airlines will close following the
breakdown of negotiations between management and the labour
unions," management said in a statement.

"The insurmountable burden of continued losses has become
too heavy for the company to bear. With no capital
infusion, PAL cannot operate viably in the face of enormous
losses amid the harsh business environment," it said.

Last week, seeking to prevent collapse, the airline made
its last offer - 20 percent equity to employees, equivalent
to three board seats, in exchange for a 10-year suspension
of collective bargaining agreements.  The unions spurned
the offer, saying it would mean surrendering their  

PAL owes about $2 billion to a group of local and foreign
banks led by the Philippine National Bank and Chase
Manhattan Bank N.A.
($=43.78 pesos) (Reuters: Financial - 09/17/98)

POWER CO: Creditor Panel Named
The U.S. Trustee has appointed an official committee of
Power Co. of America L.P.'s unsecured creditors: Southern
Co. Energy Marketing L.P.; Entergy Power Marketing Corp.;
Niagara Mohawk Energy Marketing Inc.; American Electric
Power Service Corp.; Cinergy Services Inc.; ConAgra Energy
Services Inc.; PacifiCorp Power Marketing Inc.; Stand
Energy Corp.; Statoil Energy Inc.; American Energy Trading
Inc.; and Engage Energy U.S. L.P. The committee has
retained Andrews & Kurth LLP as counsel. (The Daily
Bankruptcy Review and ABI September 17, 1998)

RYMER FOODS: Common Stock Acquired In Exchange Offer
Rymer Foods, Inc. filed a statement on Schedule 13D with
the SEC relating to the common stock, par value $.04 per
share of Rymer Foods Inc., a Delaware corporation.

This statement is filed by Riverside Capital Advisers, Inc.

Riverside is a Florida corporation having both its
principal business and principal office address at 1650
S.E. 17th Street, Suite 204, Fort Lauderdale, Florida

1,907,151 shares of Common Stock of Rymer Foods owned
beneficially by Riverside, were acquired in an exchange
offer of Rymer Foods Inc. 11% Senior Notes due 12/15/2000,
the balance of 253,061 were all purchased in the open
market through brokerage transactions.

The net investment cost (excluding commissions, if any) of
the shares of Common Stock beneficially owned directly by
Riverside is approximately $12,006,510.
Riverside is the beneficial owner of 2,160,212 shares of
Common Stock that it holds in discretionary investment
accounts and over which it has  sole voting and investment

SOLV-EX: Responds to Suit
Albuquerque's Solv-Ex Corp. has filed its response to the
U.S. Securities and Exchange Commission's suit that alleges
the company and two of its executives defrauded investors.

In its suit, filed in July, the SEC contends that Solv-Ex,
Solv-Ex CEO John S. Rendall and Vice President Herbert M.
Campbell, repeatedly misled investors and industry analysts
about its ability to produce oil and recover other  
industrial minerals from its former Canadian lease

Solv-Ex had worked for years on developing a profitable
technology to extract bitumen from oil sands in Alberta,
Canada. Last year, the company sought bankruptcy protection
but has recently emerged from it.

The alleged fraud and misrepresentation were critical in
inflating Solv-Ex stock prices from about $5 a share to a
high of about $38 in 1996, the SEC claims.

The SEC also alleges that Solv-Ex understated its
outstanding common stock by 3 million shares in its
quarterly filing in March 1996.

In a statement, Solv-Ex officials said, "Solv-Ex believes
that the commission's allegations are without merit."
The company also contends the SEC has not interviewed the
primary consultants Solv-Ex used to prepare company

Litigation "may be the only opportunity to restore our
integrity (and) explore what we think are serious flaws and
abuses in the regulatory system," Rendall said in the
statement. (Albuquerque Journal; 09/15/98)

VENATOR GROUP: Will Close 570 Stores/ $173M Charge
Venator Closes Kinney and Footquarters Stores
Venator Group Inc., New York, will close its 570 Kinney and
Footquarters shoe stores and take a $173-million third-
quarter charge as it tries to rebuild itself as a
sportswear retailer, according to a newswire report. The
company, which recently changed its name from Woolworth
Corp., will convert about 60 of its Kinney shoe stores and
103 Footquarters stores to its Lady Foot Locker, Kids Foot
Locker and Colorado formats. It also plans to launch a new
athletic outlet chain using some of its existing stores.
The company began its reorganization in 1995.

VENTURE: To File Late Quarterly Report
Venture Stores Inc. filed a Notification o f Late Filing
with the SEC.  The company reports that despite the
Company's diligent efforts, completion of the Form 10-Q has
been delayed due to various difficulties associated with
the filing of the Company's Bankruptcy Petition, including
without limitation completion of the audit of the Company's
financial statements for the year ended January 31,
1998,compilation of the necessary financial and other
information to be included in the Form 10-Q, and the
Company's limited financial and personnel resources as a
result of the Bankruptcy Petition.  The
Company intends to file the Form 10-Q as soon as is

The Company anticipates that the statements of income
included in its quarterly report on form 10-Q for the
second quarter ended August 1, 1998 will report net
earnings of approximately $4.3 million, as compared to a
net loss of $103.0 million reported for second quarter of
1997. The Company anticipates that the net earnings per
common share for second quarter of 1998 will be $.21,
compared to a net loss per common share of $5.67 for second
quarter of 1997. The positive net earnings are attributable
to a gain associated with the Kimco Realty transaction,
asset write-offs and asset realizations occurring during
the period.

WEINER'S STORES: Quarterly Report For Period Ended August 1
Weiner's Stores Inc. filed a quarterly report with the SEC
for the quarterly period ended August 1, 1998.

Net sales in the second quarter of 1998 increased 6.4% to
$68,548,000 from $64,397,000 in the second quarter of 1997.
The increase is primarily attributable to a 4.7% increase
in comparable store sales and new store sales, offset by
the closing of seven stores in the fourth quarter of 1997.
Net sales in the first six months of 1998 increased 2.4% to
$130,127,000 from $127,083,000 in the first six months of

The Company's net loss for the second quarter of 1998 was
$596,000, or $0.03 per share of common stock, compared to a
net loss of $69,000 or $0.69 per share of common stock for
the second quarter of 1997. The Company adopted "fresh
start" accounting upon its emergence from Chapter 11
reorganization. The Company's net income for the first six
months of 1998 was $8,000, or less than $0.01 per share of
common stock, compared to a net loss of $156,000 or $1.56
per share of common stock for the first six months of 1997.

WESTBRIDGE: $67 Million Assets/$110 Million Liabilities
Westbridge Capital Corp.'s Chapter 11 petition, filed
Wednesday in Wilmington, Del., lists total assets and debts
of about $67.3 million and $110 million respectively.  Fort
Worth, Texas-based Westbridge has filed a prepackaged
reorganization plan that was negotiated with an ad
hoc committee of holders of the company's 11% senior
subordinated notes due 2002 and 7.5% convertible
subordinated notes due 2004.  Westbridge, an insurance
holding company, expects to exit Chapter 11 by Dec. 31.
(Federal Filings Inc. 17-Sept-98)

WIRELESS ONE INC: Reports New $20 Million Note Facility
On September 4, 1998, Wireless One, Inc. obtained a new
$20,000,000 Senior Secured Discretionary Note Facility   
Also on September 4, 1998, the Company issued senior
secured notes pursuant to the Senior Facility in the amount
of $12,500,000.

The Notes (i) mature on April 15, 1999, (ii) pay 13%
per annum interest, (iii) require the Company to pay
a facility fee at the time of maturity of the Notes
equal to 5% of the aggregate principal amount of the
Notes issued September 4, 1998, plus up to 10% of the
aggregate principal amount of any additional Notes
issued pursuant to the Senior Facility and (iv) are
secured by substantially all of the Company's assets.

Upon the request of the Company, the purchaser of the
Notes may at its sole discretion and pursuant to
terms determined by the purchaser, purchase up to an
additional $7,500,000 of the Notes.  Such additional
Notes will otherwise be subject to the same terms and
conditions as the Notes which were issued on
September 4, 1998 and will also mature on April 15,
1999.  In connection with the purchase of the Notes,
the Company also issued to the purchaser of the Notes
seven year detachable warrants to purchase up to 6%
of the Company's fully-diluted common stock.
Attached as exhibits hereto are the material
agreements pursuant to which the Notes have been issued.

Based upon the Company's current business plan and
management's forecast of the Company's cash needs,
management believes that the Senior Facility will give the
Company access to sufficient working capital to proceed
with its business plan through the first quarter of 1999.                                


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